AMENDMENT No. 2
To The
SAN JUAN UNIT 4
PURCHASE AGREEMENT AND PARTICIPATION AGREEMENT
Between
Public Service Company of New Mexico
and
The City of Farmington, New Mexico
1.0 PARTIES
This Amendment No. 2 to the San Juan Unit 4 Purchase Agreement and
Participation Agreement ("Amendment No. 2") is made and entered into this 27th
day of October 1999, by and between PUBLIC SERVICE COMPANY OF NEW MEXICO, a New
Mexico corporation ("PNM") and THE CITY OF FARMINGTON, NEW MEXICO, an
incorporated municipality, a body politic and corporate, existing as a political
subdivision under the constitution and laws of the State of New Mexico (the
"City"), hereinafter sometimes referred to individually as a "Party" or
collectively as the "Parties."
2.0 RECITALS
This Amendment No. 2 is made with reference to the following facts,
among others:
2.1 The San Juan Unit 4 Purchase Agreement and Participation Agreement
was entered into by the Parties as of November 17, 1981 and was amended by
Amendment No. 1 thereto dated as of October 31, 1984 (collectively, as thus
amended, the "PPA"). The PPA governs the purchase by the City of an 8.475
percent undivided ownership interest in San Juan Unit 4 and associated common
facilities, supplies and inventories and the operation thereof by PNM as
Operating Agent of the San Juan Project.
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2.2 PNM and Tucson Electric Power Company ("TEP") only are parties to
the San Juan Project Co-Tenancy Agreement (the "Co-Tenancy Agreement") and the
San Juan Project Operating Agreement (the "Operating Agreement").
2.3 The Co-Tenancy Agreement and the Operating Agreement have been
previously amended by action of PNM and TEP, through and including Amendments
Number 10 to the Co-Tenancy Agreement and the Operating Agreement.
2.4 The San Juan Project Construction Agreement was terminated in 1995
by action of PNM and TEP.
2.5 PNM, TEP, Century Power Company, Southern California Public Power
Authority ("SCPPA"), the City, M-S-R Public Power Agency ("M-S-R"), the County
of Los Alamos, New Mexico ("County") and the City of Anaheim, California
("Anaheim") entered into the San Juan Project Designated Representative
Agreement ("DR Agreement") as of April 29, 1994, for the purpose of complying
with the federal Clean Air Act Amendments of 1990; the DR Agreement was
thereafter accepted by Utah Associated Municipal Power Systems ("UAMPS") and
Tri-State Generation and Transmission Association, Inc. ("Tri-State") at the
time of their respective purchases of ownership interests in the San Juan
Project.
2.6 The owners of the San Juan Project, including PNM and the City,
have negotiated a San Juan Project Participation Agreement among PNM, TEP, the
City, M-S-R, the County, SCPPA, Anaheim, UAMPS and Tri-State (the "Participation
Agreement") to amend, restate and replace in their entirety the Co-Tenancy
Agreement and the Operating Agreement and to set out in one instrument all of
the matters previously included in the Co-Tenancy Agreement and the Operating
Agreement.
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2.7 The Participation Agreement will, upon its effective date, provide
the City with all the rights, privileges and obligations of a "Participant," as
that term is defined in the Participation Agreement, and is intended to
supersede the rights, privileges and obligations of the City as a "Unit
Participant," as that term is defined in the Operating Agreement.
2.8 The Parties desire to amend the PPA to harmonize the PPA with the
Participation Agreement.
NOW, THEREFORE, based on the foregoing recitals and in consideration of
the mutual promises, terms and covenants of this Amendment No. 2, the Parties
hereby agree as follows:
3.0 TERM AND TERMINATION
3.1 This Amendment No. 2 shall become effective as of the date on which
the Participation Agreement becomes effective.
3.2 Section 33.2 of the PPA is amended to read in its entirety as
follows:
This Agreement shall continue in full force and effect from its
Effective Date until the termination date of the San Juan Project
Participation Agreement, dated as of October 27, 1999 (the
"Participation Agreement").
4.0 CHANGES IN REFERENCES TO CO-TENANCY AGREEMENT
AND OPERATING AGREEMENT
4.1 Subsection (2) of Section 2.3.1 of the PPA is hereby deleted in its
entirety.
4.2 Section 8 of the PPA is hereby amended to read in its entirety as
follows:
8.1 Participation Agreement. Except as otherwise provided in
this Agreement, the rights and obligations of the Parties with
respect to the San Juan Project are as set forth in the
Participation Agreement. Any reference in this Agreement to any
provision of the San Juan Project Agreements shall be deemed to
be a reference to the corresponding or successor provision of the
Participation Agreement.
8.2 PNM-City Relationship. The relationship between PNM and
the City with respect to Unit 4 shall be governed by this
Agreement. As between PNM and the City, where a specific
provision of this Agreement is in conflict with a provision in
one or more of the San Juan Project Agreements, the provisions of
this Agreement shall govern.
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4.3 Except as otherwise provided herein, the Participation Agreement
shall be applicable to all aspects of the City's ownership interest in San Juan
Unit 4.
5.0 PNM AS PROJECT MANAGER
5.1 Section 9 of the PPA is hereby deleted in its entirety.
6.0 PNM AS OPERATING AGENT
6.1 Section 10 of the PPA is hereby amended to read in its entirety as
follows:
10.1 The City recognizes that PNM is the Operating Agent, as that
term is defined in Section 5.31 of the Participation Agreement.
10.2 PNM's responsibilities as Operating Agent to the City are
described in Section 28 of the Participation Agreement.
7.0 APPLICABILITY OF CERTAIN PROVISIONS OF CO-TENANCY AGREEMENT
7.1 Section 11 of the PPA is hereby deleted in its entirety.
8.0 ENTITLEMENT TO AND SCHEDULING OF POWER AND ENERGY
8.1 Section 12 of the PPA is hereby deleted in its entirety.
9.0 START-UP AND AUXILIARY POWER
9.1 Section 13 of the PPA is hereby amended to read as follows:
Each Party shall be obligated to provide its share of
start-up and auxiliary power and energy in proportion to its
Participation Share in San Juan Unit 4 as provided in Section 17
of the Participation Agreement. Any supplementary arrangements
which may be required to facilitate the City's supply of start-up
and auxiliary power and energy shall be made in accordance with
procedures established by the Coordination Committee, as that
term is defined in Section 7 of the Interconnection Agreement.
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10.0 CAPITAL BETTERMENTS, ADDITIONS AND REPLACEMENTS
10.1 Section 14 of the PPA is hereby deleted in its entirety.
11.0 PNM'S RIGHT OF FIRST REFUSAL
11.1 Section 15 of the PPA is hereby amended to read in its entirety as
follows:
PNM shall have a right of first refusal with respect to the
sale or disposition of the Transfer Interest or portion thereof.
Such right shall be exercised in accordance with the terms and
conditions and the procedures set out in Section 11 of the
Participation Agreement.
12.0 DEFAULTS
12.1 The reference to "the prime lending rate established and published
by Irving Trust Company, or if the foregoing is not legally enforceable against
the city, then at a rate of 18 percent per annum" in Section 19.3 of the PPA is
replaced by "ten percent (10%) per annum."
12.2 The reference to "(i) the prime lending rate established and
published by Irving Trust Company, (ii) twelve percent (12%) per annum" in
Section 19.4 of the PPA is replaced by "ten percent (10%) per annum."
12.3 Sections 19.5 and 19.6 of the PPA are hereby deleted in their
entirety.
13.0 DISPUTES; ARBITRATION
13.1 Section 20 of the PPA is hereby amended to read in its entirety as
follows:
In the event that a dispute between the Parties should arise
under this Agreement, such dispute shall be first submitted to the
PNM and City members on the Engineering and Operating Committee for
resolution. In the event these members are unable to resolve such
dispute within ninety (90) days after submission, the dispute shall
be referred in writing to the President or a Vice President
designated by PNM and the Mayor of the City, or his or her designee.
If such dispute has not been resolved within thirty (30) days after
the referral made by either Party (unless such thirty (30) day
period is extended by mutual agreement of the Parties), either Party
may thereafter call for submission of such dispute to arbitration in
the manner set forth in Section 37 of the Participation Agreement,
which call shall be binding upon the Parties, except that the
notices required under Section 37.1 of the Participation Agreement
shall only be provided to the Parties to this Agreement unless the
dispute between the Parties to this Agreement affects the interests
of other parties to the Participation Agreement.
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14.0 RELATIONSHIP OF PARTIES
14.1 Sections 25.2 and 25.4 of the PPA are hereby deleted in their
entirety.
15.0 DESTRUCTION, DAMAGE OR CONDEMNATION OF SAN JUAN UNIT 4
15.1 Section 42 of the PPA is hereby deleted in its entirety.
16.0 AMENDMENT TO EXHIBIT A
16.1 The definition of "Unit Participant" is hereby deleted from
Exhibit A to the PPA.
17.0 CONTINUATION IN EFFECT
17.1 Except as herein modified, all provisions of the PPA are unchanged
and continue in full force and effect.
IN WITNESS WHEREOF, the Parties have caused this Amendment No. 2 to be
executed by their duly authorized representatives as of the date set forth
above.
PUBLIC SERVICE COMPANY OF NEW MEXICO
By: /s/ Patrick J. Goodman
--------------------------------------
Patrick J. Goodman
Vice President, Power Production
THE CITY OF FARMINGTON, NEW MEXICO
By:
--------------------------------------
Mayor
Attest:
- ---------------------------
City Clerk
73523
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