EXHIBIT 10.42
STANDARD OFFER NO. 2
STANDARD OFFER FOR POWER PURCHASE
WITH
A FIRM CAPACITY QUALIFYING FACILITY
(BONNEVILLE PACIFIC CORPORATION)
File No. QFE 200.416
Revised March 7, 1990
SO2-6
TABLE OF CONTENTS
SECTION TITLE PAGE
1. Parties 1.
2. Project Summary 1.
3. Definitions 5.
4. Project Fee 15.
5. Project Development Milestone 17.
6. Effective Date and Term 31.
7. Purchase of Energy 32.
8. Method of Purchase and Sale 32.
9. Purchase of Capacity 34.
10. Seller's General Obligations 45.
11. SDG&E's General Obligations 50.
12. Interconnection Facilities 51.
13. Cancellation Charges 53.
14. Billing and Payment 54.
15. Metering of Energy Deliveries 55.
16. Continuity of Service 57.
17. Default Remedies 67.
18. Abandonment 70.
19. Nondedication of Facilities 71.
20. Liability 71.
21. Insurance 72.
22. Uncontrollable Force 74.
23. Non-Waiver 74.
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SECTION TITLE PAGE
24. Successors & Assigns 75.
25. Effect of Section Headings 75.
26. Governing Law 75.
27. Several Obligations 76.
28 Conditions 76.
Signatures 78.
EXHIBITS
A - Site Location Metes and Bounds Description (if
necessary)
B - Time Periods
C - Schedules for Payments of Firm Capacity
D - QF Quarterly Status Report
E - Reduction and Termination Payment Example
F - SDG&E's Electric Department Rule 21
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1. PARTIES
The Parties to this Agreement are Bonneville Pacific Corporation
(Seller), a Delaware Corporation and San Diego Gas & Electric Company (SDG&E),
a California corporation (individually "Party", collectively "Parties"), who
agree as follows:
2. PROJECT SUMMARY
Seller represents that the statements made below are true and selects
the options to this Agreement specified below, which options are described in
more detail in the Sections referenced below:
2.1 Seller's Generating Facility:
2.1.1 Nameplate Rating (Net of Station Load) 52,890 kw
2.1.2 Interconnection Voltage Level at the Generating
Facility boundary/69 kV For out-of-service area
Sellers only;
(a) The Point of Delivery North Gila Substation and
(b) The Designated Point of Interconnection Miguel
Substation
2.1.3 Location (out of service area):
Yuma, AZ (See Exhibit A) (if address not available,
append metes and bounds description)
(Exhibit A)
2.1.4 Type of Facility:
X Cogeneration Facility
X Small Power Production Facility
2.1.5 Scheduled Firm Capacity Operation Date (Section 5.9)
January 1, 1993.
2.1.6 Term as measured from the Scheduled Firm Capacity
Operation Date (Section 6.1) 30 years.
2.2 Purchase Price of Capacity.
2.2.1 Amount of Firm Capacity (Section 9.3) 50,000 kW
2.2.2 Seller shall provide Firm Capacity according to (check
one) (Section 9.3):
X Option 1 - Dispatchable
Option 2 - Actually Delivered
2.2.3 Seller chooses to have Firm Capacity Payments based on
(check one) (Section 9.4):
X Option 1 - Schedule in effect at time of
execution (attached as Exhibit C).
Option 2 - Schedule in effect on the Scheduled Firm
Capacity Operation Date.
2.2.3.1 If Seller chooses Option 1:
Price per kw of Firm Capacity will be
$140 /kw-yr
2.3 Method of Purchase and Sale (check one)
(Section 8.1):
N/A Simultaneous Purchase and Sale
N/A Sale of Surplus Energy
X Off System Sales
2.4 Project Development Material Milestones:
2.4.1 Provide inform- Not later than
ation for and pay three (3) months
costs of Prelimi- after the date of
nary Interconnec- execution of this
tion/Operating Agreement or such
Study pursuant to other date as
Section 5.4. agreed to by the
parties.
See Section 5.4.
2.4.2 (For out-of-ser- Not later than six
vice area Generat- (6) months from
ing Facilities the date of execut
only) Provide ion of this agree-
acceptable proof ment.
that Seller has
obtained rights
for transmission
of power to the
designated SDG&E
point of delivery
(Section 5.5).
2.4.3 Provide informat- Not later than the
ion and pay cost date specified in
for SDG&E to con- 2.4.4.
duct a Line Loss See Section 5.6.
and Transmission
Impact Study
(Section 5.6).
2.4.4 Provide informat-
ion for and pay
costs of Detailed Not later than 6
Interconnection/ months following
Operating Study the date of execu-
pursuant to tion of this
Section 5.7. agreement.
2.4.5 Commence construc-
tion of the
Generating Faci- Not later than 18
lity pursuant to months prior to
Section 5.8: the date specified
in 2.4.6
2.4.6 Establish Reliable Not later than
Operation of the December 31, 1994.
Generating Faci-
lity pursuant to
Section 5.9.
2.5 Seller selects the following metering locations
Section 15.1):
(a) For Sellers located within SDG&E Operating
system:
N/A Metering on SDG&E's side of
Interconnection Facilities.
N/A Metering on Seller's side
of Interconnection Facilities.
Transformer Loss Compensation Factor N/A%
(b) For out-of-service area Generating Facilities
metering location to be as specified in the Three
Party Operating Agreement.
2.6 NOTICES
Any formal communication or notice in connection with the
Agreement shall be in writing and shall be deemed properly
given if delivered in person or sent by first class mail,
postage prepaid, to the person specified below:
San Diego Gas & Electric Company
c/o Secretary
P.O. Box 1831
San Diego, CA 92112
Bonneville Pacific Corporation
c/o Secretary
257 East 200 South, Suite 800
Salt Lake City, Utah 84111
3. DEFINITIONS
3.1 Agreement: This Standard Offer for Power Purchase and
Interconnection with a Firm Capacity Qualifying Facility between
SDG&E and Seller, and exhibits, as amended from time to time.
3.2. Alternative Energy Cost
The lowest estimated expense per Mw-hr which SDG&E would otherwise
have incurred in generating or purchasing 100 Mw of energy from
alternative sources. The value is currently determined by SDG&E's
Energy Control Center and recorded hourly on the California Power
Pool Economy Energy Transactions Log as the system decremental
value.
3.3 As-Available Capacity: That capacity level, up to the Nameplate
Rating of the Generating Facility, Seller makes available to SDG&E
from Initial Operation to the time Generating Facility achieves
Reliable Operation per the terms of this Agreement.
3.4 As-Available Capacity Payment Schedule: SDG&E's schedule of
time-differentiated payments and conditions for the purchase of
As-Available Capacity from Qualifying Facilities as updated from
time-to-time.
3.5 Bill: A written statement setting forth charges and requiring
payment for electrical service, gas service, or both, as more
fully discussed in SDG&E's Rules of Service.
3.6 Block Curtailment: A curtailment period scheduled by SDG&E
consisting of one 400 consecutive hour period or two 200
consecutive hour periods.
3.7 Capacity Factor: The net kilowatt-hours produced by the
Generating Facility after Station Load and delivered to the
Designated Point of Interconnection, for a period of time, divided
by the product of the Firm Capacity and the number of hours in the
period of time.
3.8 Capacity Payment Schedule for Firm Capacity Qualifying Facilities:
SDG&E's schedule of prices and conditions for purchase of capacity
from Firm Capacity Qualifying Facilities. The capacity prices
contained therein are derived from SDG&E's full avoided cost as
approved by the CPUC. SDG&E's current Firm Capacity Payment
Schedule is attached as part of Exhibit C. The schedule effective
for the term of this Agreement will be as specified in Sections
2.2.3 and 9.4.
3.9 Cogeneration Facility: A facility which produces electric energy
and steam or forms of useful thermal energy (such as heat), which
are used for industrial, commercial, heating, or cooling purposes,
as defined in Title 18 Code of Federal Regulations (CFR), Part
292, as of the effective date of this Agreement.
3.10 Contract Year: The twelve month period commencing with the Firm
Capacity Availability Date and each twelve month period
commencing with the anniversary of the Firm Capacity Availability
Date.
3.11 CPUC: The California Public Utilities Commission or any successor
agency having regulatory con- trol over SDG&E or its successors.
3.12 Current Capacity Payment: The $/kW-Year Capacity Payment
Schedule, published by SDG&E, at the time of termination or
reduction of Firm Capacity, assuming a term equal to the balance
of the term of the Agreement.
3.13 Detailed Interconnection/Operating Study: SDG&E's determination
of the Interconnection Facilities required to interconnect the
Generating Facility with the SDG&E system for both on and
off-system purchases for the delivery, metering and scheduling of
power, and the proper and safe operation of the Generating
Facility in parallel with the SDG&E electric system, including an
estimate of costs and construction lead time.
3.14 Designated Point of Interconnection: (applicable to
out-of-service area Sellers only) The designated point on the
SDG&E system at which power purchased under this Agreement shall
be deemed received into the SDG&E service area.
3.15 Energy: Electric energy expressed in kilowatt-hours generated by
the Generating Facility less Station Load, delivered to the
Designated Point of Interconnection and sold to SDG&E.
3.16 Energy Payment Schedule: SDG&E's schedule of time-differentiated
payments and conditions for purchase of Energy from Firm Capacity
Qualifying Facilities as updated from time-to-time. The Energy
prices contained therein will be derived from SDG&E's full avoided
operating costs, as approved by the CPUC, throughout the life of
the Agreement.
3.17 FERC: The Federal Energy Regulatory Commission or any successor
agency having a similar function.
3.18 Firm Capacity: The amount of kilowatts specified in Section
2.2.1.
3.19 Firm Capacity Availability Date: The day following the day Seller
passes a capacity demonstration test in which Seller demonstrates
the ability of the Generating Facility to deliver Firm Capacity
continuously into SDG&E's system. The capacity demonstration test
will require the Seller to operate the Generating Facility at an
average capacity factor, based on Firm Capacity, of 80% or greater
during the on-peak and semi-peak hours in a thirty (30)
consecutive day period or such shorter period as the Parties agree
is satisfactory. Calculation of the average capacity factor shall
exclude any energy associated with generation levels greater than
the Firm Capacity.
3.20 Flexible Curtailment: A curtailment period of varying length as
more fully described in Section 16.
3.21 Forced Outage: Any Generating Facility outage resulting from a
design defect, inadequate construction, operator error or a
breakdown of the mechanical or electrical equipment that fully or
partially curtails the electrical output of the Generating
Facility.
3.22 Generating Facility: All of Seller's generating units, together
with all protective and other associated equipment and
improvements owned, maintained, and operated by Seller, which are
necessary to produce electrical power, excluding associated land,
land rights, and interests in land.
3.23 Initial Operation: The day upon which the Generating Facility
commences energy deliveries to the SDG&E system.
3.24 Interconnection Facilities: Facilities and devices which are
either (1) required for the proper and safe operation of the
Generating Facility in parallel with SDG&E's electric system, or
(2) required for the delivery, metering and scheduling of power
from an out-of-service area Generating Facility; and which are
either owned by Seller or are SDG&E Facilities and which are as
described in Section 12.
3.25 Interconnection Facilities Agreement: That Agreement which must
be executed prior to Initial Operation of the Generating Facility,
which sets forth the interconnection terms and conditions for
interconnec-tion of in-service area Generating Facilities in
parallel with the SDG&E system.
3.26 Line Extension Facilities: All facilities, excluding the
Interconnection Facilities, as generally described in Section 12,
which are determined by SDG&E to be necessary to connect SDG&E's
existing system to the Point of Delivery in order to accept the
output of the Generating Facility.
3.27 Line Loss/Transmission Impact Study: For out-of-service area
Generating Facilities, that study required in addition to the
operating Study, which will identify (a) Line Losses associated
with delivery of power from the Point of Delivery to the
Designated Point ofInterconnection and (b) the extent to which
capacity on SDG&E's intertie transmission facilities will be
affected by the acceptance of power from the Generating Facility.
3.28 Meters: Any meter installed as part of the Interconnection
Facilities to measure the amount of Energy and Firm Capacity
delivered to SDG&E.
3.29 Minimum Load Condition: A situation when SDG&E's electric system
load minus the margin required for regulation of its generation
resources is equal to or less than the sum of (1) the minimum
electrical output of generating units committed for system
security; (2) the electrical output associated with firm purchases
which SDG&E is obligated to accept due to contractual terms or
penalties; and (3) the output of Qualifying Facilities providing
electricity to SDG&E.
3.30 Nameplate Rating: The gross generating capacity of the Generating
Facility less Station Use. For purposes of this Agreement,
Nameplate Rating is that rating specified in Section 2.1.1 of the
Agreement.
3.31 O&M Charge: An amount paid monthly by Seller to SDG&E to cover
the operation and maintenance of the Line Extension and SDG&E
Facilities.
3.32 Point of Delivery: The point where: (1) for Generating Facilities
located within the SDG&E system, Seller's electrical conductors
contact SDG&E's system as it shall exist whenever the deliveries
are being made or at such other point as the Parties agree in
writ-ing or (2) for out-of-service area Generating Facilities, the
point at which power delivered to SDG&E is accepted.
3.33 Preliminary Interconnection/Operating Study: SDG&E's preliminary
estimate of the costs and equipment necessary for the
interconnection and/or deliv-ery of power from the Generating
Facility to the SDG&E system. This Study may also establish the
date by which Seller must request and pay for a Detailed
Interconnection/Operating Study under Section 5.7.1.
3.34 Project Fee: The fee more fully described in Section 4, which
Seller posts and SDG&E shall hold as security for Sellers
maintaining adequate progress in the development of the Generating
Facility.
3.35 Qualifying Facility: A Cogeneration Facility or a Small Power
Production Facility as defined in section 3.9 and 3.41,
respectively.
3.36 Reliable Operation: That level of operation established as of the
Firm Capacity Availability Date. Reliable operation must occur no
later than one (1) year from the Scheduled Firm Capacity Operation
Date.
3.37 Scheduled Firm Capacity Operation Date: The date specified in
Section 2.1.5 as the day upon which the Generating Facility will
be capable of reliably supplying Firm Capacity to the SDG&E
system.
3.38 SDG&E's Electric Department Rule 21: SDG&E's interconnection
standards for cogenerators and small power producers
interconnected with the SDG&E system, in effect on the date of
execution of this Agreement, incorporated as Exhibit F. (Some
portions not applicable to out-of-service area generating
facilities).
3.39 SDG&E Facilities: Facilities owned by SDG&E which are required
for scheduling, metering and operation and for the proper parallel
operation of the Generating Facility with SDG&E's system. These
facilities will include, but not be limited to: connection,
transformation, communication, switching, metering, safety
equipment and any necessary additions and/or reinforcements
required and added by SDG&E to SDG&E's system, excluding any Line
Extension Facilities.
3.40 Small Power Production Facility: A facility which produces
electric energy solely by the use, as a primary energy source, of
biomass, waste, renewable resources, or any combination thereof,
as defined in Title 18 Code of Federal Regulations, Part 292, as
of the date of execution of this Agreement.
3.41 Station Load: Load specifically related to the operation of the
generation auxiliary equipment. Such auxiliary equipment includes,
but is not necessarily limited to, forced and induced draft fans,
cooling towers, boiler feed pumps, lubricating oil systems,
generating facility lighting, fuel handling systems, control
systems, and sump pumps.
3.42 Statement: A written statement setting forth amounts of Energy
and Firm Capacity delivered and sold to SDG&E and amounts due to
Seller for such Energy and Firm Capacity, as more fully described
in Section 15.
3.43 Surplus Energy: The total output of the Generating Facility, less
Station Load and other load requirements of the Seller, that the
Seller actually delivers to the Point of Delivery from the
Generating Facility.
3.44 System Emergency: A condition on SDG&E's system which is likely
to result in imminent significant disruption of service to
customers, or is likely to endanger life or property.
3.45 Three Party Operating Agreement: That Agreement which must be
executed prior to Initial Operation, which will set forth the
terms and conditions for the metering, scheduling and billing, and
ownership and maintenance of facilities, necessary for delivery of
power from an out-of-service area Generating Facility to the SDG&E
system.
3.46 Willful Action:
3.46.1 Action taken or not taken by a Party at the direction of
its directors, officers or supervisory employees affecting its
performance under this Agreement, which action is knowingly or
intentionally directed by such directors, officers or supervisory
employees with conscious indifference to the injurious
consequences thereof, or with intent that injury or damage would
result or would probably result therefrom. Willful Action does
not include any act or failure to act which is merely involuntary,
accidental, or negligent.
3.46.2 Action taken or not taken by a Party at the direction of
its directors, officers or supervisory employees affecting its
performance under this Agreement, which action has been determined
by arbitration award or final judgment or judicial decree to be a
contract breach under this Agreement and which occurs or continues
beyond the time specified in such arbitration award or judgment or
judicial decree for curing such default, or, if no time to cure is
specified therein, occurs or continues thereafter beyond a
reasonable time to cure such default.
3.46.3 Action taken or not taken by a Party at the direction of
its directors, officers of supervisory employees affecting its
performance under this Agreement, which action is knowingly or
intentionally directed by such directors, officers or supervisory
employees with the knowledge that such action taken or not taken
is a contract breach under this Agreement.
4. PROJECT FEE
4.1 No later than the date Seller executes this Agreement, Seller
shall post and thereafter maintain a Project Fee equal to five
dollars ($5) for each kilowatt of Nameplate Rating of the
Generating Facility specified in Section 2.1.1. Seller may not
increase the Nameplate Rating of the Generating Facility after the
date of execution of this Agreement. The Project Fee shall be held
as security for Seller maintaining adequate progress in the
development of the Generating Facility. The Project Fee shall be
established by either an escrow account or by an irrevocable
letter of credit with terms and conditions agreed to by the
Parties. Such escrow account or irrevocable letter of credit
shall provide for the disbursement of the Project Fee in
accordance with Section 4.2.
4.2 The Project Fee shall be disbursed in the following manner on
notice provided to the holding agent by SDG&E.
4.2.1 The Project Fee, including any interest earned, shall be
returned to Seller (a) if the Generating Facility achieves
Reliable Operation prior to the date specified in Section 2.4.6;
(b) if Seller terminates this Agreement as a result of an
Uncontrollable Force prior to Reliable Operation of the Generating
Facility; (c) if Seller determines as a result of either the Line
Loss and Transmission Impact Study or the Detailed
Interconnection/Operation Study that the project is no longer
feasible or that transmission capacity is not available, (Seller
must apply for a refund within ninety (90) calendar days after
receiving written notification of the results of such study.); (d)
if Seller determines that the cost or conditions of obtaininq
transmission rights from the Generating Facility to SDG&E's system
renders the project non-economic, and so notifies SDG&E no later
than 30 days after the date such transmission rights must be
secured under Section 5.5; (e) if the conditions of Section 28 are
not fulfilled and this Agreement is terminated; or (f) if Seller
terminates this Agreement as a result of the CPUC approval
described in Section 28 not having been obtained by November 30,
1990, and Seller notifies SDG&E in writing no later than 30 days
after the actual date of said CPUC decision.
4.2.2 The Project Fee, including any interest earned, shall be
paid to SDG&E in the event Seller fails to complete each and every
project development milestone set forth in Section 5, whether or
not SDG&E pursues any other remedy at law or under this Agreement.
5. PROJECT DEVELOPMENT MILESTONES
5.1.1 The following events shall constitute Project Development
Milestones:
(a) Submit Quarterly Status Reports (Section S.2)
(b) Maintain Site Control (Section 5.3)
(c) Provide information for and pay costs of the Preliminary
Interconnection/Operating Study (Section 5.4).
(d) (For out-of-service area Generating Facilities only) Provide
evidence that Seller has secured acceptable transmission
rights for delivery of Energy and Firm Capacity from the
Generating Facility to the SDG&E Point of Delivery (Section
5.5).
(e) (For out-of-service area Generating Facilities only) Provide
information and pay costs for SDG&E to conduct a Line
Loss/Transmission Impact Study (Section 5.6).
(f) Provide information for and pay costs of the Detailed
Interconnection/Operating Study (Section 5.7).
(g) Commence construction of the Generating Facility (Section
5.8)
5.1.2 If Seller fails to complete each Project Development
Milestone in the time and manner provided in Sections 5.2 through
5.9, SDG&E may terminate this Agreement and Seller shall be liable
for liquidated damages, if any, pursuant to Section 17 of this
Agreement and such other damages as SDG&E may be entitled to. If
SDG&E terminates this Agreement the provision of Sections 5.1.3
and 5.1.4 shall also apply.
5.1.3 If SDG&E terminates this Agreement pursuant to 5.1.2,
Seller may execute another contract with SDG&E only under one of
the other alternative methods described in Section 5.1.4 and only
if the following conditions are satisfied.
(a) Seller provides SDG&E with a new project definition and
provides SDG&E a new project fee in the amount of S5/kw; and
(b) Seller has paid to SDG&E all outstanding obligations arising
under this Agreement including any damages which SDG&E may
have incurred as a result of Seller's failure to perform
under this Agreement. Nothing in this Section 5.1.3 shall
limit SDG&E's remedies at law under this Agreement.
5.1.4 If Seller satisfies the requirements of Section 5.1.3,
Seller may execute a new contract with SDG&E, to sell power from
the Generating Facility, by any of the following alternative
methods:
(a) By fulfilling all the prerequisites for eligibility to
execute and by executing a firm capacity standard offer contract,
if one is available. If Seller elects to sign a then current firm
capacity standard offer contract within two years of the date of
termination of this Agreement by SDG&E, the price for the firm
capacity provided under such contract shall be the lesser of the
then current firm capacity prices specified in the contract or the
Firm Capacity price Seller would have received under this
Agreement.
(b) By fulfilling all the prerequisites for eligibility to
execute and by executing an available long-run standard offer
contract if one is available. However, Seller may not participate
in the next long run standard offer update cycle if such cycle
occurs within two years after the date of termination of this
Agreement by SDG&E.
(c) By fulfilling all the prerequisites for eligibility to
execute and by executing an as available standard offer contract,
if one is available. If Seller signs an as-available standard
offer because no other standard offer agreement is then currently
available, Seller may switch to another standard offer agreement
when one becomes available subject to the conditions of such
standard offer and this Section 5.1.4.
(d) A non-standard agreement subject to the negotiations between
Seller and SDG&E.
5.2 Submit Quarterly Status Reports
5.2.1 Beginning on the first day of the calendar quarter
following the date of execution of this Agreement, and continuing
on the first day of each calendar quarter thereafter until the
Scheduled Firm Capacity Operation Date, Seller shall submit to
SDG&E a complete and accurate Quarterly Status Report in the form
attached as Exhibit D. The Quarterly Status Report shall describe
the progress of project development and shall include without
limitation (a) the current status of and schedule for project
development; (b) Seller's progress since the last submitted
Quarterly Status Report; and (c) an explanation of any changes to
the project development schedule since Seller's last submitted
Quarterly Status Report. If, in SDG&E's judgment, the scheduled
development of the Generating Facility places Seller in jeopardy
of missing a project development milestone under this Section 5,
Seller shall, upon request, provide a summary of the steps which
Seller has taken and proposes to take to ensure timely Reliable
Operation of the Generating Facility.
5.2.2 If Seller fails to provide a Quarterly Status Report in a
timely manner or if Seller fails to submit a complete and accurate
Quarterly Status Report, SDG&E will so notify Seller and Seller
shall promptly provide a complete and accurate Quarterly Status
Report. If Seller fails to provide two consecutive Quarterly
Status Reports as provided in Section 5.2.1, SDG&E shall notify
Seller in writing that Seller has failed to complete this project
development milestone. Unless Seller provides SDG&E with a
complete and accurate Quarterly Status Report within thirty (30)
calendar days after Seller receives such notice from SDG&E, the
provisions of Section 5.1.2 shall apply.
5.3 Maintain Site Control
5.3.1 Seller warrants that it will secure, and provide evidence
to SDG&E that it possesses, Site Control of the site described in
Section 2.1.3 and Exhibit A before March 31, 1990 and that Seller
shall maintain continuous Site Control for the term of this
Agreement. If SDG&E does not receive evidence sufficient to
clearly demonstrate that Seller possesses Site Control consistent
with Section 5.3.2 prior to said date, this Agreement shall
terminate and the provisions of Sections 4.2.2 and 5.1.2 apply.
Seller shall not have additional time to cure this default.
5.3.2 Site Control shall consist of the following, or other form
of Site Control acceptable to SDG&E:
(a) The ownership of the location of Generating Facility
specified in Section 2.1.3;
(b) The leasehold interest in the location specified in Section
2.1.3 which leasehold interest shall specifically include the
right to construct and operate the Generating Facility at such
location;
(c) Seller's exclusive and irrevocable contractual right to
construct and operate the Generating Facility at the location
specified in Section 2.1.3; or
(d) Seller's exclusive and irrevocable option to obtain any of
the rights described in Section 5.3.2 (a) through (c) above. This
alternative shall only constitute Site Control prior to the
commencement of construction of the Generating Facility.
5.3.3 Seller shall provide SDG&E with prompt notice of any change
in the status of its Site Control. If, at any time, SDG&E has
reason to believe that Seller has lost Site Control, SDG&E may
request from Seller evidence that Seller cont- inues to possess
Site Control. If Seller fails to provide such evidence within
thirty (30) calendar days after Seller receives SDG&E's request,
the provisions of Section 5.1.2 shall apply.
5.3.4 Where the term of Seller's Site Control does not extend for
the full term of this Agreement, Seller shall advise SDG&E of the
date Site Control is scheduled to expire. Seller shall provide to
SDG&E, no later than the date Seller's Site Control is scheduled
to expire, evidence that Seller's Site Control has been renewed
or extended. If Seller fails to provide such evidence, SDG&E
shall notify Seller in writing that Seller is not in compliance
with this Section 5.3.4. Unless Seller provides SDG&E with
evidence that Site Control has been renewed or extended within
thirty (30) calendar days after SDG&E's notification, the
provisions of Section 5.1.2 shall apply.
5.3.5 This Agreement is project and site specific; however, with
SDG&E's prior consent, Seller may be permitted to adjust the
location of the Generating Facility within the proximity of the
site specified in Section 2.1.3 if necessary for project
development.
5.4 Provide information for and Pay costs of Preliminary
Interconnection/Operating Study
5.4.1 To the extent that Seller will be interconnected with the
electrical system of Arizona Public Service Company ("APS") and
APS will deliver Seller's generation to the North Gila substation,
this milestone is complete. Otherwise not later than three (3)
months after the effective date of this Agreement or such other
date as the Parties may agree, Seller shall provide SDG&E with the
information necessary for SDG&E to perform a pre- liminary
Interconnection/Operating Study. The Parties shall cooperate to
ensure that Seller provided SDG&E with sufficient information no
later than said date.
5.4.2 Seller shall pay any cost associated with the Preliminary
Interconnection/Operating Study by the date specified in Section
5.4.1 or within thirty (30) calendar days of billing by SDG&E,
whichever is later.
5.4.3 Except for Generating Facilities located out of SDG&E's
Service Area, priority for transmission capacity on the SDG&E
system shall be established on the date Seller has completed the
requirements specified in Section 5.4.1 and 5.4.2.
5.4.4 The results of the Preliminary Interconnection/Operating
Study are for information purposes only, except that in the event
the date determined for providing information for and paying the
cost of the Detailed Interconnection/Operating Study pursuant to
Section 5.5 is earlier than the date specified in Section 2.4.3,
then such earlier date shall establish the milestone date for
this project development milestone pursuant to Section 5.7.1.
5.4.5 SDG&E may, at its discretion, waive the requirements of
this Section 5.4 if SDG&E deems that a Preliminary
Interconnection/Operating Study is unnecessary.
5.4.6 If Seller fails to either (a) provide the information
necessary for SDG&E to conduct the Preliminary
Interconnection/Operating Study or (b) pay the costs of such study
by the date required, SDG&E shall notify Seller in writing that
Seller has not completed this project development milestone. If
Seller fails to provide such information or pay such costs, as the
case may be, within thirty (30) calendar days after SDG&E's
notification, the provisions of Section 5.1.2 shall apply.
5.5 (For out-of-service area Generating Facilities only). Provide
evidence that Seller has obtained accept- able transmission rights
for delivery of Energy and Firm Capacity from the Generating
Facility to the Point of Delivery.
5.5.1 Not later than six (6) months from the date of execution of
this Agreement, Seller shall provide to SDG&E satisfactory
evidence that Seller has obtained rights for firm transmission
service from the Generating Facility to the Point of Delivery.
5.5.2 Such firm transmission rights must be acceptable to SDG&E
in its sole discretion, so as to allow for the proper and safe
delivery of power from the Generating Facility to SDG&E consistent
with the obligations of Seller to provide SDG&E with Firm Capacity
under this Agreement. SDG&E's right to approve the firm trans-
mission rights hereunder shall not entitle it to require terms or
conditions more burdensome than those normally contained in the
standard practices in the utility industry with respect to
interutility firm capacity transactions.
5.5.3 Such firm transmission rights must commence no later than
Initial Operation and must remain in effect for the remaining term
of this Agreement.
5.5.4 If Seller fails to obtain transmission rights acceptable to
SDG&E by the date specified in Section 5.5.1, SDG&E shall notify
Seller in writing that Seller has not completed this project
development milestone. If Seller fails to provide SDG&E with
evidence that acceptable transmission rights have been secured
within thirty (30) calendar days after SDG&E's notification; the
provisions of Section 5.1.2 shall apply.
5.6 (For out-of-service area Generating Facilities Only). Provide
information and pay cost for SDG&E to conduct a Line
Loss/Transmission Impact Study.
5.6.1 To the extent that Seller will be interconnected with the
electrical system of Arizona Public Service Company ("APS")and APS
will deliver Seller's generation to the North Gila substation,
this milestone is complete. Otherwise not later than the date
specified in Section 2.4.4 for conducting the Detailed
Interconnection/Operating Study, Seller shall provide to SDG&E all
information necessary for SDG&E to perform a Line Loss and
Transmission Impact Study. The Parties shall cooperate to ensure
that Seller provides SDG&E with sufficient information no later
than said date.
5.6.2 Seller shall pay any costs associated the Line Loss and
Transmission Impact Study by the date specified in Section 5.6.1
or within thirty (30) calendar days of billing by SDG&E, whichever
is later.
5.6.3 Priority for transmission capacity on the SDG&E system
shall be established on the date Seller completes the requirements
specified in Sections 5.6.1 and 5.6.2. (not applicable to
out-of-service area Generating Facilities).
5.6.4 SDG&E shall complete the Line Loss/Transmission Impact
Study within thirty (30) days after Seller has requested, paid
for and provided all information necessary for SDG&E to conduct
such study. The Line Loss and Transmission Impact Study shall,
among other items, identify any line losses associated with
delivery of Energy and Firm Capacity from the Point of Delivery to
the Designated Point of Interconnection, as well as identify any
impacts of operation of the Generation Facility on SDG&E's
intertie transmission system including those which would restrict
SDG&E's ability to economically accept power along the designating
intertie path.
5.6.5 The results of the Line Loss/Transmission Impact Study
pertaining to rates for transmission losses are for informational
purposes only. Actual rates for losses from the Point of Delivery
to the Designated Point of Interconnection shall be SDG&E's FERC
filed rates, subject to change from time to time and filing with
the appropriate Regulatory Agencies.
5.6.6 If Seller fails either (a) to provide the information
necessary for SDG&E to perform the Line Loss/ Transmission Impact
Study or (b) to timely pay the costs associated with the Line
Loss/Transmission Impact Study, SDG&E shall notify Seller in
writing that Seller has not completed this project development
milestone. If Seller fails to provide such information or pay such
costs, as the case may be, within thirty (30) calendar days after
SDG&E'snotification, the provisions of Section 5.1.2 shall apply.
5.7 Provide information for and pay costs of Detailed
Interconnection/Operating Study
5.7.1 Not later than the date specified in Section 2.4.4, or such
earlier date as may be determined by the Preliminary
Interconnection/Operating Study, Seller shall provide SDG&E with
all information necessary for SDG&E to perform a Detailed
Interconnection/Operating Study. The Parties shall cooperate to
ensure that Seller provides SDG&E with sufficient information no
later than said date.
5.7.2 Seller shall pay any costs associated with the Detailed
Interconnection/Operating Study by the date specified in Section
5.7.1 or within thirty (30) calendar days of billing by SDG&E,
whichever is later.
5.7.3 Subject to Section 5.6. If priority for transmission
capacity on the SDG&E system has not been previously established
in Section 5.4, such priority shall be established on the date
Seller completes the requirements specified in Section 5.7.1 and
5.7.2.
5.7.4 If Seller fails either (a) to provide the information
necessary for SDG&E to perform the Detailed
Interconnection/Operating Study or (b) to timely pay the costs
associated with the Detailed Interconnection/Operating Study,
SDG&E shall notify Seller in writing that Seller has not completed
this project development milestone. If Seller fails to provide
such information or pay such costs, as the case may be, within
thirty (30) calendar days after SDG&E's notification, the
provisions of Section 5.1.2 shall apply.
5.8 Commence construction of the Generating Facility
5.8.1 Seller shall commence construction of the Generating
Facility and shall provide to SDG&E written notice that
construction has commenced not later than the date specified in
Section 2.4.5. Construction of the Generating Facility shall be
deemed to have commenced in accordance with Section 5.8.2. If
Seller fails to commence construction or fails to provide SDG&E
written notice that construction has commenced by the date
specified, SDG&E shall notify Seller in writing that Seller has
not completed this Project Development Milestone. Unless Seller
commences construction and provides SDG&E with written notice of
commencement of construction within thirty (30) calendar days
after SDG&E's notification, the provisions of Section 5.1.2 shall
apply.
5.8.2 Commencement of construction shall be defined as the date
on which Seller initiates continuous work to install major
Generating Facility components such as penstocks, diversion works,
production wells and steam gathering systems, or the placement of
concrete foundations for structures and equipment at the location
of The Generating Facility specified in Section 2.1.3.
5.9 Establish Reliable Operation of the Generating Facility
5.9.1 Seller must establish Reliable Operation of the Generating
Facility by the Scheduled Firm Capacity Operation Date, specified
in Section 2.1.5, subject to the provisions of Section 5.9.2.
5.9.2 If Seller does not establish Reliable Operation of the
Generating Facility by the Scheduled Firm Capacity Operation Date
specified in Section 2.1.5, Seller shall have until the date
specified in Section 2.4.6 to establish Reliable Operation,
subject to the following provisions.
(a) Seller shall submit to SDG&E an updated Status Report for the
Generating Facility, in the form as described in Section 5.2
within 10 days after the Scheduled Firm Capacity Operation Date.
Seller shall submit an updated report every 30 days thereafter
until Seller establishes Reliable Operation of the Generating
Facility. Seller shall include in each report: (i) an update of
the current status of and schedule for project development and
(ii) a summary of the steps which Seller has taken and proposes to
take to ensure that it will be able to establish Reliable
Operation of the Generating Facility by the date required in this
Section 5.9.2. In addition, Seller shall include in the initial
report an explanation of why Reliable Operation did not occur by
the Scheduled Firm Capacity Operation Date.
(b) The price for Firm Capacity shall be that price Seller would
have received under this Agreement, had Seller established
Reliable Operation as of the Scheduled Firm Capacity Operation
Date, according to the options selection in Sections 9.3 and 9.4.
(c) The date specified in Section 2.4.6 shall be delayed one
additional day for each day after June 30, 1990 elapsing until the
CPUC approves this Agreement consistent with Section 28. In no
event shall the date in Section 2.4.6 be delayed beyond June 1,
1995.
5.9.3. The provisions of Section 5.1.2 shall apply if Seller
fails to:
(a) provide Status Reports in a timely manner or to submit
complete and accurate Quarterly Status Reports as prescribed in
Section 5.9.2 or;
(b) establish Reliable Operation of the Generating Facility
within the time required by Sections 5.9.1 and 5.9.2.
6. EFFECTIVE DATE AND TERM
6.1 This Agreement shall be binding upon execution and shall remain in
effect for the number of years specified in Section 2.1.6 from the
later of the Scheduled Firm Capacity Operation Date or the Firm
Capacity Availability Date.
6.2 This Agreement shall terminate if Reliable Operation does not
occur on or before the date specified in section 2.4.6.
7. PURCHASE OF ENERGY
7.1 Payment of Energy shall be based on time of delivery. The time
periods currently in effect are shown in Exhibit B and may be
revised from time to time.
7.2 Beginning with Initial Operation and continuing for the term of
this Agreement, Seller shall sell and deliver and SDG&E shall
purchase and accept, Energy produced from the Generating Facility
up to the Nameplate rating specified in Section 2.1.1, according
to SDG&E's Energy Payment Schedule as updated from time-to-time.
For out-of-service area Generating Facilities all energy
purchased shall be adjusted to reflect losses from the Point of
Delivery to the Designated Point of Interconnection and loses
incurred in delivering energy to the Point of Delivery.
Additionally, Seller shall receive no line loss adjustments or
credits for line losses deemed avoided by on-system Generating
Facilities.
8. METHOD OF PURCHASE AND SALE
8.1 All Energy delivered to SDG&E at the Point of Delivery and
registered by the Meters located thereat shall be provided
according to the option described below and selected in Section
2.3.
8.1.1 Simultaneous Purchase and Sale: Seller shall sell and
deliver to SDG&E the total Generat- ing Facility output, minus
Station Load, to the Point of Delivery. Seller shall purchase
from SDG&E all energy used by Seller for its own consumption.
8.1.2 Sale of Surplus Energy: Seller shall sell and deliver to
SDG&E at the Point of Delivery any Surplus Energy generated by the
Generating Facility. Seller shall purchase from SDG&E any
additional energy required for Seller's own consumption.
8.1.3 Off-System Sales: Seller shall sell to SDG&E at the Point
of Delivery Energy delivered from the Generating Facility less any
losses associated with such delivery of power from the Generating
Facility to the Point of Delivery and from the Point of Delivery
to the Designated Point of Interconnection.
8.2 All Energy delivered to SDG&E by Seller shall be metered according
to time-of-use metering at Seller's expense.
8.3 Seller (except an out-of-service area Seller) shall have the
ability to convert between the options specified in Section 8.1
provided that the Seller gives SDG&E a minimum of sixty (60) days
advance written notice prior to the desired date of such
conversion. Seller may not convert more than once in any 12 month
period. Any and all costs incurred by SDG&E as a result of any
such conversion shall be paid by the Seller within thirty (30)
days of receipt of notice from SDG&E of the amount of such costs.
In addition, the cost of SDG&E Facilities and Line Extension
Facilities upon which the monthly O&M charge is based shall be
adjusted to reflect the costs of such conversion. SDG&E shall not
be required to remove or reserve capacity of the Interconnec- tion
Facilities or Line Extension Facilities made idle by Seller' s
energy sale conversion except as provided in SDG&E's Electric
Department Rule 21 and may use such facilities at any time to
serve other customers or to interconnect with other elec- tric
power sources as provided in SDG&E's Electric Department Rule 21.
8.4 If the option described in Section 8.3 is exercised, then
termination provision (as described in Section 17) shall apply to
the amount by which the Firm Capacity is reduced as a result of
such conversion.
8.5 SDG&E shall process a request by Seller to convert between the
Options specified in Section 8.1 and institute any changes made
necessary by such request as expeditiously as possible given
SDG&E's other resource commitments. The conversion shall be
effective on the date SDG&E notifies Seller that all changes
necessary to accommodate such conversion have been completed.
9. PURCHASE OF CAPACITY
9.1 Payment for Capacity shall be based on time of delivery. The time
periods currently in effect are shown in Exhibit B and may be
revised from time to time.
9.2 Beginning on Initial Operation and continuing until the Scheduled
Firm Capacity Operation Date or the Firm Capacity Availability
Date of the Generating Facility, whichever occurs later subject to
the provisions of this Agreement, Seller shall sell and deliver
and SDG&E shall purchase and accept, as available capacity
produced from the Generating Facility up to the Nameplate Rating
of the Generating Facility specified in Section 2.1.1, according
to SDG&E's As Available Capacity Payment Schedule as updated from
time to time.
9.2.1 For an out-of-area Generating Facility, capacity payments
to Seller shall be adjusted to reflect additional losses from the
Generating Facility to the Point of Delivery and from the Point of
Delivery to the Designated Point of Interconnection.
Additionally, Seller shall receive no line loss adjustments or
credits for any line losses deemed avoided by on-system Generating
Facilities.
9.3 Beginning on the Scheduled Firm Capacity Operation Date or the
Firm Capacity Availability Date of the Generating Facility,
whichever occurs later subject to the provisions of this
Agreement, and continuing for the remaining term of this
Agreement, Seller shall provide and SDG&E shall purchase Firm
Capacity from the Generating Facility to the SDG&E system at the
Point of Delivery in an amount and for a period as specified in
Sections 2.2.1 and 2.1.6 respectively, according to one of the
following options as selected in Section 2.2.2:
Option 1 - Dispatchable
Option 2 - Actually Delivered
9.4 SDG&E shall purchase Firm Capacity based upon one of the following
options as selected by Seller in Section 2.2.3:
Option 1: The Capacity Payment Schedule for Firm Capacity
Qualifying Facilities in effect at the time of
execution of this Agreement attached as Exhibit
C; and
Option 2: The Capacity Payment Schedule for Firm Capacity
Qualifying Facilities in effect as of the
Scheduled Firm Capacity Operation Date of the
Generating Facility.
9.5 If Seller has elected to provide SDG&E Firm Capacity according to
the Dispatchable Option (Option 1), payments for Firm Capacity
under this Agreement shall be calculated as follows:
The monthly payment for Firm Capacity will be one-twelfth of the
product of the Firm Capacity Price (CP) taken from the Firm Capacity Payment
schedule in effect at the time of execution, multiplied by the Firm Capacity
(FC) and the Capacity Bonus Factor (CBF). Hours of curtailment and energy
deliveries during curtailments shall be specifically excluded from the
capacity calculations.
CP = Firm Capacity Price
FC = Firm Capacity (for out-of-service area Generating
Facilities, minus any adjustments for line losses from
the Point of Delivery to the Designated Point of
Interconnection)
CBF = Capacity Bonus Factor (see 9.7)
($) = (1/12) CP x FC x CBF
9.6 If Seller has elected to provide SDG&E with the Firm Capacity
according to the Actually Delivered Option (Option 2), payments
for Firm Capacity under this Agreement shall be calculated as
follows: The monthly payment for Firm Capacity will be the
product of the Period Price Factor (PPF), the Monthly Delivered
Capacity (MDC) and the Capacity Bonus Factor (CBF), plus any
allowable payment for outages due to scheduled maintenance.
($) = PPF x MDC x CBF
The PPF is determined by multiplying the Firm Capacity Price,
taken from the Firm Capacity Payment Schedule in effect on the
date of execution, by the following Al- location Factor (AF):
AF(yr/month) x Firm Capacity Price($/kw-yr)=PPF($/kw-mo)
Summer 0.13801 x =
Winter 0.04428 x =
AF = The factor that allocates the Firm Capacity Price between
summer and winter months. These factors may be changed upon
one year notice from SDG&E.
The MDC is determined as follows:
1) Determine the Performance Factor (P), which is defined as
follows:
P = A (1-L) (P is less than or equal to 1)
C x (B-S) x E
A = Total kilowatt-hours delivered during all on-peak and
semi-peak hours during the month excluding any Energy
associated with generation levels greater than the
Firm Capacity.
L = (for an out-of-service area Seller) The losses,
expressed as a decimal fraction, associated with
delivery of capacity purchased by SDG&E from the Point
of Delivery to the Designated Point of Interconnection
as specified in the Section 2.1.2.
C = Firm Capacity.
B = Total on-peak and semi-peak hours during the month.
S = Total on-peak and semi-peak hours during the month the
Generating Facility is out of service on scheduled
maintenance.
E = 0.8 to reflect a 20% allowance for forced outage.
(2) Determine the Monthly Capacity Factor (MCF), which is
computed using the following expression:
MCF = P x (1.0 - M)
D
M = The number of hours during the month the Generating
Facility is out of service on scheduled maintenance.
D = The number of hours in the month.
(3) Determine the MDC by multiplying the MCF by C:
MDC (kilowatts) = MCF x C
The monthly payment for Firm Capacity is then determined by
multiplying the proper PPF determined above by MDC and CBF.
($) = PPF x MDC x CBF
CBF = Capacity Bonus Factor (See Section 9.7)
9.6.1 Furthermore, the payment for a month in which there is an
outage for scheduled maintenance shall also include an amount
equal to the product of the average hourly capacity payment and
the number of hours of outage for scheduled maintenance in the
month calculated according to the following formula:
Payment = ($) x S
B - S
where ($) is the monthly payment from the second paragraph of
Section 9.6, line 6 and B and S are from paragraph 9.6(1).
9.7 Capacity Bonus Factor. A Seller who actually delivers Firm
Capacity during the on-peak hours of the peak months at a Capacity
Factor of 85%, as defined by the CPUC, is entitled to an incentive
payment. The Capacity Bonus Factor (CBF) will be calculated as
follows:
CBF = ED ( 1-L) (CBF is greater
C x (PP - SP) x .85 than or equal to 1)
ED = Energy delivered during on-peak hours of the peak months.
L = (for an out-of-service area Seller) The losses, expressed as
a decimal fraction, associated with delivery of capacity
purchased by SDG&E, from the Point of Delivery to the
Designated Point of Interconnection as specified in Section
2.1.2.
C = Firm Capacity
PP = On-peak hours in the peak months
SP = Total on-peak hours during the peak months that the
Generating Facility is out of service on Scheduled
Maintenance.
Conditions
(1) Agreement must be in effect and Generating Facility must be
operable for all of the peak months in order that CBF be
calculated.
(2) The CBF for the period October 1 to September 30 will be
determined by the Generating Facility's performance in the
preceding peak months.
(3) CBF will be equal to 1.0 until Seller's peak months data is
available.
(4) During probationary periods CBF will be limited to 1.O.
(5) Hours of curtailment and energy deliveries during
curtailments shall be specifically excluded from the
capacity calculations.
9.8 Minimum Performance Requirements: To receive capacity payments,
the Generating Facility must meet the following requirements:
9.8.1 The amount of Firm Capacity shall be dispatchable by SDG&E
throughout the year (Option 1) or actually delivered to SDG&E for
all of the on-peak hours of the peak months (Option 2). These
months are currently defined as the months of June, July, August
and September, and may be changed upon one year notice by SDG&E.
All Energy generated by the Generating Facility at levels greater
than the amount of Firm Capacity will be specifically excluded
from the Firm Capacity payment calculations. Hours of curtailment
and energy deliveries during curtailments shall be specifically
excluded from the capacity calculations.
9.8.2 If Seller chooses Option 1, the Firm Capacity shall be
dispatchable by SDG&E throughout the year, subject to a maximum 20
percent monthly allowance for Forced Outages and scheduled
maintenance, and also subject to an allowance for up to 45 days
for a major overhaul. Except during the peak months on the SDG&E
system, Seller may accumulate and apply the 20 percent allowance
for Forced Outages for any consecutive three (3) month period.
Dispatchable means that the Generating Facility is operable and is
capable of delivering capacity, and, when called upon, must
deliver at least the amount of capacity requested by SDG&E up to
the full amount of Firm Capacity. Curtailment rights are as
defined elsewhere in this Agreement.
9.8.3 If Seller chooses Option 2, the Firm Capacity must actually
be delivered to SDG&E for all the on-peak hours of all the peak
months, excluding scheduled maintenance and subject to a 20
percent monthly allowance for Forced Outages.
9.9 Failure to meet minimum Performance requirements. If Seller fails
to meet the minimum performance requirements, on a monthly basis,
then the Seller will be placed on a probationary period not to
exceed 15 months, and will be subject to the following:
9.9.1 Under Option 1 (Dispatchable): During the probationary
period, the Seller will continue to receive capacity payments for
the amount of dispatchable capacity available during said period.
During the probationary period, the Seller's monthly payment for
capacity shall be determined by substituting for the Firm
Capacity, the capacity at which Seller would have met the minimum
performance requirements. In any month during the probationary
period that Seller does not meet the minimum performance
requirements at whatever capacity was determined for the previous
month, Seller's monthly payment for capacity shall be determined
by substituting the capacity at which Seller would have met the
minimum performance requirements. If after the expiration of this
period, the Seller has not demonstrated an ability to provide its
amount of Firm Capacity to SDG&E, that capacity shall be derated
and subsequent monthly payments limited to the new amount of
capacity. The amount by which the Seller's capacity is reduced
shall be subject to Section 17 of the Agreement.
9.9.2 Under Option 2 Actually Delivered: During the probationary
period, the Seller shall earn capacity payments for the amount of
capacity actually delivered. If the Seller fails to deliver the
full contract capacity during each of the following year's peak
months, the amount of Firm Capacity shall be derated to the
greater of the Firm Capacity actually delivered when the minimum
requirements are not met, or the amount of Firm Capacity which
would be reasonably likely to be met. The amount by which the
Firm Capacity is reduced shall be subject to Section 17 of the
Agreement.
9.9.3Hours of curtailment and energy deliveries during
curtailments shall be specifically excluded from the capacity
calculations.
9.10 Scheduled Maintenance: Scheduled Maintenance for the Generating
Facility shall be allowed according to the following conditions:
9.10.1 Outage periods for scheduled maintenance shall not exceed
840 hours (35 days) in any 12 month period.
9.10.2 Seller may accumulate unused scheduled maintenance hours
on a year-to-year basis up to a maximum of 1,080 hours (45 days).
This accrued time must be used consecutively and only for major
overhauls.
9.10.3 Major overhauls shall not be scheduled during the peak
months and shall be limited to once every three years.
9.10.4 Scheduled maintenance shall not exceed 30 peak hours
during the peak months.
9.10.5 Seller shall notify SDG&E 24 hours prior to a scheduled
outage of less than one day, one week prior to a scheduled outage
of one day or more (except for major overhauls), and six months
prior to a major overhaul during periods acceptable to both
parties. Agreed upon dates shall not be changed without formal
written notice to SDG&E in accordance with Section 2.6 of this
Agreement.
9.10.6 Capacity payments will continue during allowed outages for
scheduled maintenance.
9.11 Adjustment to Firm Capacity: Firm Capacity as specified in
Section 2.2.1 may be adjusted only under the following conditions:
9.11.1 Seller may increase the amount of Firm Capacity with the
approval of SDG&E and receive payment for the additional capacity
thereafter. A new overall capacity price will be established
based on the original capacity price for the original Firm
Capacity and the applicable capacity price for the remaining term
of this agreement published by SDG&E at the time the increase is
first delivered to SDG&E. This new overall capacity price will be
prorated in proportion to the original Firm Capacity and the
increase in Firm Capacity.
9.11.2 Either Party may request, when it reasonably appears that
the capacity of the Generating Facility may have changed for any
reason, that a new Firm Capacity be determined. If a decrease
occurs that decrease will be subject to Section 17 of the
Agreement.
10. SELLER'S GENERAL OBLIGATIONS
Seller shall:
10.1 Design, own, construct, operate and maintain the Generating
Facility provided that SDG&E shall have the right to require
modifications to such design as provided in Section 11.2.
10.2 Operate and maintain the Generating Facility in accordance with
prudent electrical practices. If a condition is created by Seller
which may unreasonably interfere with the reliability or safety of
operation of the Generating Facility or the SDG&E system, the
Seller shall correct or eliminate such condition with reasonable
diligence.
10.3 Notify SDG&E: (a) by January l, May l and September l of each
year, of the estimated scheduled maintenance and estimated daily
Energy and Firm Capacity for the succeeding four months and (b) by
September 1 of each year, of the estimated scheduled maintenance
and estimated daily Energy and Firm Capacity for the following
year.
10.4 If an in-service area Generating Facility, place its main
disconnect switch under the control of both SDG&E and Seller by
(a) allowing SDG&E to add its lock to Seller's lock on the switch
door, (b) allowing SDG&E to stencil its markings on the switch
door and (c) allowing SDG&E 24-hour access to the switch. Switch
operation shall be reserved exclusively for SDG&E and Seller
personnel, and each Party will be able to lock out the switch.
Switch maintenance shall be performed by Seller's personnel.
10.5 Provide SDG&E by means of a separate, written instrument, any
rights-of-way and access required for construction, operation,
maintenance, inspection and testing of Interconnection Facilities
and testing, reading of Meters and operating of Seller's main
disconnect switch.
10.6 Maintain proper daily Generating Facility operating records,
including, but not limited to fuel consumption, cogeneration fuel
efficiency, kilowatts, kilovars and kilowatt-hours generated and
maintenance performed, and make such records as are reasonably
needed by SDG&E to implement this Agreement available to SDG&E
during normal business hours upon request.
10.7 Provide to SDG&E Generating Facility electrical design and
Interconnection Facilities design drawings for its review prior to
finalizing Generating Facility design and before beginning
construction work based on such drawings. SDG&E may require
modification of such design as provided in Section 11.2.
10.8 Provide to SDG&E reasonable advance written notice of any changes
in the Generating Facility or Interconnection Facilities and
provide to SDG&E design drawings of any such changes for its
review and approval as provided in Section 11.2.
10.9 If an in-service area Generating Facility, test its
Interconnection Facilities at least every 12 months, by qualified
personnel, notify SDG&E at least 72 hours in advance of such tests
and permit SDG&E to have a representative present at such tests.
10.10 If an in-service area Generating Facility, design and operate the
Generating Facility to limit the adverse effects of reactive power
flow on the utility system. Seller shall operate the Generating
Facility in a manner to satisfy the reactive power requirement of
Seller's load within the limit of the Generating Facility's
capability as set forth in SDG&E's Electric Department Rule 21.
10.11 Notify SDG&E of Initial Operation at least forty-five (45) days
prior to such date. SDG&E shall inspect the Interconnection
Facilities within thirty (30) days of receipt of such notice. If
SDG&E concludes in good faith that the Interconnection Facilities
are for any reason unacceptable, SDG&E will notify Seller in
writing within five (5) days of completion of the inspection,
stating the reasons for its determination. Seller shall correct
any deficiencies noted by SDG&E and shall provide SDG&E with the
further right to inspect in accordance with the guidelines set
forth above.
10.12 Notify SDG&E at least fourteen (14) calendar days prior to: (a)
the initial energizing of the Point of Interconnection; (b) the
initial operation of each of Seller's generators; and (c) the
initial testing of Seller's protective apparatus. SDG&E shall
have the right to have a representative present at such times.
10.13 Reimburse SDG&E for the cost of acquiring any property rights
which are determined by SDG&E to be required pursuant to this
Agreement.
10.14 Be liable to SDG&E for any loss of whatever kind which SDG&E
incurs as a result of (a) Seller's failure to obtain or maintain
any necessary permit or approval, including completion of required
environmental studies, necessary for the construction, operation
and maintenance of the Generating Facilities, and (b) Seller's
failure to comply with necessary permits and approvals or with any
applicable law.
10.15 As of Initial Operation and throughout the term of this Agreement,
maintain and operate the Generating Facility to assure that the
Generating Facility meets the requirements of a Qualifying
Facility established as of the date of execution of this
Agreement. Seller warrants that the Generating Facility will meet
the requirements of a Qualifying Facility as defined herein from
Initial Operation throughout the term of this Agreement.
10.16 Comply with the requirements of and design the Generating Facility
consistently with SDG&E Electric Department Rule 21, to the extent
that is clear by the context of a particular provision of Rule 21
that such provision should apply to off-system Generating
Facilities, provided, however that the charge for operation and
maintenance of Line Extension and Interconnection Facilities
specified in Rule 21 is subject to revision from time-to-time as
authorized by the CPUC.
11. SDG&E'S GENERAL OBLIGATIONS
SDG&E shall:
11.1 Operate and maintain its electrical facilities in accordance with
applicable generally accepted practices in the electric utility
industry.
11.2 Have the right to review all Generating Facilities and
Interconnection Facilities specifications and designs submitted by
Seller. SDG&E may require modifications to such specifications
and designs as it deems necessary to allow SDG&E to operate its
system safely and reliably. SDG&E shall notify Seller in writing
of the results of the review of the specifications and designs
submitted by Seller, within thirty (30) days of receipt of such
specifications and designs by SDG&E. SDG&E shall include in its
notification to Seller any flaws or design errors, perceived by
the utility in its review of the material submitted by the Seller.
SDG&E's review of Seller's specifications and designs shall not be
construed as confirming or endorsing the design or as any warranty
of safety, durability or reliability of the Generating Facility or
any of the equipment or the technical or economic feasibility of
the Generating Facility. SDG&E shall not, by reason of such
review or failure to review, be responsible for strength, details
of design, adequacy or capacity of the Generating Facility or
equipment, nor shall SDG&E's acceptance of such specifications or
designs be deemed to be an endorsement of any facility or
equipment. Notwithstanding anything in this Agreement to the
contrary, SDG&E shall not be liable to Seller and Seller shall
indemnify and hold SDG&E harmless from any claim, cost, loss,
damage or liability, including attorney's fees and interest,
in-connection with SDG&E's exercise of its rights under this
Section 11.2.
11.3 Make SDG&E Facilities' records available to Seller upon request as
are needed by Seller to implement this Agreement.
11.4 Make available to Seller any data filed in accordance with CPUC
Decision No. 83-10-093, Ordering Paragraph 5f, as specifically
requested by Seller.
11.5 Make available SDG&E Electric Department rules and other existing
publications governing interconnection, at Seller's request.
12. INTERCONNECTION FACILITIES
12.1 The Parties shall execute a separate Interconnection Facilities
Agreement. The Interconnection Facilities Agreement shall provide
for ownership, construction, operation and maintenance of the
Interconnection Facilities pursuant to SDG&E's Electric Department
Rule 21. For an out-of service area Generating Facility, SDG&E
and Seller shall execute a Three Party Operating Agreement, in
lieu of an Interconnection Facilities Agreement, covering design,
purchase, installation, ownership operation and maintenance of
Interconnection Facilities.
12.2 If an in-service area Generating Facility, SDG&E shall own and
shall be solely responsible for the design, purchase,
installation, operation and maintenance of those Interconnection
Facilities necessary to protect SDG&E's system, employees and
customers from damage or injury arising out of or connected with
the operation of the Generating Facility.
12.3 If an in-service area Generating Facility, SDG&E shall design,
own, operate and maintain the SDG&E Facilities and Line Extension
Facilities required to connect the Generating Facility to SDG&E's
electric system as set forth in the Interconnection Facilities
Agreement and the Three Party Operating Agreement.
12.4 If an in-service area Generating Facility, Seller shall be
allocated existing line capacity in accordance with SDG&E's
Electric Department Rule 21.
12.5 The Parties recognize that from time to time certain improvements,
additions or other changes in the Interconnection Facilities may
be required for the proper and safe operation of the Generating
Facility in parallel with SDG&E's system. SDG&E shall have the
right to make such changes or require Seller to make such changes,
whichever is appropriate, upon reasonable advance written notice
to Seller. Seller shall reimburse SDG&E for all costs incurred by
SDG&E for any additions or changes in the SDG&E Facilities to the
extent required by SDG&E's Electric Department Rule 21 and the
cost of SDG&E Facilities upon which the O&M charge is based shall
be adjusted to reflect the cost of such changes.
12.6 If an in-service area Generating Facility, Seller shall pay for
operation and maintenance of Line Extension and SDG&E Facilities
in accordance with SDG&E's Electric Department Rule 21 and Section
14.2 of this Agreement. Seller shall be solely responsible for
maintaining in good operating condition all Interconnection
Facilities owned by Seller. When the Generating Facility is
generating electrical energy whether or not it is operating in
parallel with SDG&E's system, all Interconnection Facilities shall
be in good repair and proper operating condition.
12.7 For an out-of-service area Seller, Seller shall be responsible for
securing all rights for transmission to the Point of Delivery.
Seller shall also be responsible for securing all interconnection
arrangements with its host utility necessary for the delivery of
power to the Point of Delivery consistent with Seller's
obligations under this Agreement.
13. CANCELLATION CHARGES
Seller shall be responsible for the reimbursement to SDG&E of any and
all cancellation charges incurred as a result of SDG&E cancelling
order(s) for equipment necessary for the interconnection between SDG&E
and Seller, provided that said charges be due to Seller's cancellation
or modification of the Generating Facility. Seller shall pay SDG&E
within thirty (30) days after receipt of notice for said charges.
14. BILLING AND PAYMENT
14.1 SDG&E shall read all Meter(s) monthly according to its regular
meter reading schedule beginning no more than thirty (30) days
after Initial Operation. SDG&E shall mail to Seller not later
than thirty (30) days after the end of each monthly billing period
(a) a Statement showing Energy and capacity delivered to SDG&E
during each of the then currently effective Time-of-Use periods
during the monthly billing period, (b) SDG&E's computation of the
amount due Seller, and (c) SDG&E's check in payment of said
amount. If within thirty (30) days of receipt of the Statement
Seller does not make a report in writing to SDG&E of an error,
Seller shall be deemed to have waived any error in SDG&E's
Statement, computation, and payment, and they shall be considered
correct and complete. SDG&E reserves the right to provide such
Statement concurrently with any Bill to Seller for electric or gas
service provided by SDG&E to Seller in accordance with applicable
Rules of Service. For off-system QFs, the determination of the
amount of Energy and Capacity delivered shall be as specified in
the Three Party Operating Agreement.
14.2 Seller shall pay SDG&E (a) the installed cost of SDG&E Facilities
(to the extent appropriate) and the installed cost of any Line
Extension Facilities, (b) a monthly payment for specified SDG&E
Facilities, if appropriate, (c) a monthly O&M Charge for Line
Extension Facilities and SDG&E Facilities, and (d) a monthly
charge to reimburse SDG&E for leased communication facilities when
required by SDG&E for telemetering the Generating Facility output
all in accordance with SDG&E's Electric Department Rule 21 and
Interconnection/Three Party Operating Agreement. Seller shall pay
SDG&E for such charges within fifteen (15) days of the receipt of
a bill for any such charge.
14.3 If either Party disputes a Statement, payment shall be made as if
no dispute existed, pending resolution of the dispute. If the
Statement is determined to be in error, the amount determined to
be in error shall be refunded by the Party owing, with monthly
interest at a rate equal to that applied to SDG&E's Energy Cost
Adjustment Clause pursuant to Section 9.(j).(4) of SDG&E's
Electric Department Preliminary Statement, or successor CPUC
approved interest rate.
14.4 If either Party disputes a Bill, such dispute shall be resolved in
accordance with SDG&E's applicable Rules of Service.
15. METERING OF ENERGY DELIVERIES
15.1 Metering for electric service to Seller and for Energy purchases
by SDG&E shall be at the Point of Delivery or as specified in the
Three Party Operating Agreement. Metering will be installed which
will measure and record flows in each direction. All the meters
and equipment used for measuring power delivered to SDG&E shall be
located on the side of the Interconnection Facilities selected by
Seller and selected in Section 2.5 or as otherwise specified in
the Three Party Operating Agreement. If Seller selects a metering
location on Seller's side of the Interconnection Facilities the
power recorded as delivered to SDG&E shall be adjusted by applying
the transformer loss compensation factor specified in Section 2.5
to derive the amount of energy and capacity deemed delivered. The
transformer loss compensation factor shall be as agreed to by the
parties or at Seller's election, shall be calculated based on the
measured value of transformer losses from the transformer to be
used. If Seller chooses this latter option, Seller shall pay
SDG&E for the cost of determining this measured value.
15.2 All Meters shall be sealed and the seal shall be broken only by
SDG&E, upon occasions when the Meters are to be inspected, tested
or adjusted.
15.3 SDG&E shall inspect and test all Meters upon their installation
and on its regular testing schedule. If requested to do so by
Seller, SDG&E shall inspect or test a Meter, but the expense of
such inspection or test shall be paid by Seller unless the Meter
is found not to comply with the accuracy specifications found in
SDG&E's Electric Department Rule 18, or any superseding standard.
15.4 If a Meter is in error, Section B of SDG&E's Electric Department
Rule 18, or any superseding standard, shall be applied.
15.5 Seller shall report the hourly and daily Energy recordings to
SDG&E periodically as agreed upon by the Authorized
Representatives. Where the Generating Facility's rated capacity
is greater than 2 Mw, the Generating Facility's output shall be
telemetered to SDG&E's Mission Control Center as specified in
SDG&E's Electric Department Rule 21.
16. CONTINUITY OF SERVICE
16.1 SDG&E shall not be obligated to accept or pay for, and SDG&E may
require Seller to temporarily curtail, interrupt or reduce
deliveries of Energy upon advance notice to Seller, in order for
SDG&E to construct, install, maintain, repair, replace, remove,
investigate or inspect any of its equipment or any part of its
system, or if SDG&E determines that such curtailment, interruption
or reduction is necessary because of a System Emergency, forced
outages on the SDG&E system or its interconnected tie lines,
operating conditions on its system, or compliance with prudent
electrical practices, provided that SDG&E shall not interrupt
deliveries pursuant to this Section solely in order to take
advantage, or to make purchases, of less expensive energy
elsewhere.
16.2 SDG&E shall not be obligated to accept or pay for, and may require
Seller, with a Qualifying Facility with Nameplate Rating of one
megawatt or greater, to temporarily curtail, interrupt or reduce
deliveries of Energy during periods of Minimum Load Condition
where such purchase results in "negative avoided cost" to SDG&E as
such term is defined by the CPUC.
16.3 Notwithstanding any other provision of this Agreement, if at any
time SDG&E determines that either (a) the Generating Facility may
endanger SDG&E personnel, or (b) the continued operation of the
Generating Facility may endanger the integrity of SDG&E's electric
system, SDG&E shall have the right upon notice to Seller, to
disconnect the Generating Facility from SDG&E's system. The
Generating Facility shall remain disconnected until such time as
SDG&E is satisfied that the condition(s) referenced in (a) or (b)
of this Section 16.3 have been corrected.
16.4 Whenever possible, SDG&E shall give Seller reasonable advance
notice of its intent to refuse to purchase Energy under this
Section 16.
16.5 The Parties will coordinate temporary curtailment and interruption
or reduction of deliveries of Energy required for either Party to
construct, install, maintain, repair, replace, remove, investigate
or inspect equipment in its respective electric system.
16.6 Curtailment of out-of-service area Generating Facility
16.6.1 SDG&E may curtail deliveries of Energy from the Generating
Facility , subject to the conditions set forth in this Section.
16.6.2 For purposes of this Section 16.6, each day shall be
considered to begin at midnight (0001 hrs) and end at midnight
(2400 hrs).
16.6.3 In the event an hour of curtailment scheduled pursuant to
this Section 16.6. coincides with scheduled maintenance, such hour
shall be counted as scheduled maintenance for the purposes of this
Agreement.
16.6.4 SDG&E shall designate the type of curtailment as either
Flexible Curtailment or Block Curtailment. SDG&E shall continue
to make Firm Capacity payments for each curtailment hour subject
to the provisions of this Section 16.6. At the time SDG&E gives
notice of a curtailment period, SDG&E shall also provide a
non-binding estimate of its expected Alternative Energy Cost
during the curtailment period. Seller shall be provided a copy of
SDG&E's California Power Pool Economy Energy Transactions log
indicating SDG&E's system decremental value to verify the
Alternative Energy Cost offers. This information is confidential
to SDG&E and Seller shall not provide this information to anyone
without SDG&E's written consent.
16.6.5 To schedule a Flexible Curtailment, SDG&E shall notify
Seller, no later than two (2) hours prior to the start of the
curtailment period, of the hours, duration, and Alternative Energy
Cost for the curtailment period. No later than one-half (1/2)
hour after SDG&E notifies Seller of such curtailment period,
Seller shall notify SDG&E of the level at which Seller will
operate during the curtailment period. If Seller fails to provide
SDG&E such notice within the time required, SDG&E shall limit
Seller's schedule of deliveries during the curtailment period to
the level at which Seller was delivering to SDG&E at the time
notice was due. The price for Energy delivered and accepted by
SDG&E during these periods shall be as described in Section
16.6.8.(b). Each Flexible Curtailment period shall have a
duration of no less than eight (8) consecutive hours.
16.6.6 The maximum amount of Flexible Curtailment in any calendar
year shall be as follows:
Flexible Maximum
Contract Curtailment Number of
Years Hours Curtailments
1 through 9 900 125
10 through 15 1400 125
16 thereafter 2200 150
16.6.7 Each year SDG&E shall notify Seller of SDG&E's intent to
schedule a Block Curtailment within a six month time period. When
SDG&E better evaluates the timing of the Block Curtailment, SDG&E
shall give Seller not less than three weeks notice of the starting
time, duration, and Alternative Energy Cost for the Block
Curtailment. No later than seven (7) days after SDG&E notifies
Seller of such curtailment period, Seller shall notify SDG&E of
the level at which Seller will operate during the curtailment
period. If Seller fails to provide SDG&E such notice within the
time required, SDG&E shall limit Seller's schedule of deliveries
during the curtailment period to the level at which Seller was
delivering to SDG&E at the time notice was due. The price for
Energy delivered and acc- epted by SDG&E during these periods
shall be as described in Section 16.6.8.(b). The amount of Block
Curtailment in any Contract Year shall not exceed one 400 hour
block or two 200 hour blocks.
16.6.8 During each hour of Flexible or Block Curtailment,
payments shall be made based on the following:
a) Firm Capacity payments shall be made in accordance with
Section 16.6.11.
b) Payments for Energy which Seller has opted to continue to
deliver and provided proper notice of such election in
accordance with Sections 16.6.5 and 16.6.7 shall be
purchased by SDG&E at the Alternative Energy Cost.
c) In the event that the output of the Generating Facility
during any curtailment hour exceeds the level of scheduled
deliveries, pursuant to Sections 16.6.5 and 16.6.7, Seller
shall not be paid by SDG&E for any Energy in excess of such
scheduled amount during such curtailment hour(s).
16.6.9 Nothing in this Section 16.6 is intended to provide Seller
the right, either expressed or implied, to deliver energy to SDG&E
in amounts greater than that designated in Section 2.2.1.
16.6.10 The maximum Energy price paid under this Section 16.6 may
not exceed the applicable time differentiated price for a
non-curtailment hour as provided in Sections 7 and 8.
16.6.11 During hours of curtailment designated under this Section
16.6, SDG&E shall continue to make Firm Capacity payments. Under
Option 1, hours of curtailment and energy deliveries during
curtailments shall be specifically excluded from the capacity
calculations. Under Option 2, for each curtailment hour, payments
shall be made pursuant to the following: (i) payments to Seller
for firm capacity during each on-peak or semi-peak curtailment
hour shall be calculated using Assumed Production Factors derived
from Seller's historical performance pursuant to Section 16.6.12,
provided, that payments for firm capacity calculated using the
Assumed Production Factors shall not exceed the maximum payments
provided under Section 9, (ii) nothing in this Section 16.6 shall
be construed to entitle Seller to payments for Firm Capacity prior
to the Firm Capacity Availability Date, (iii) no firm capacity
payment adjustments are applicable for curtailments during
off-peak and super offpeak hours since no firm capacity payments
are earned during those periods.
16.6.12 Assumed Production Factors a) Subject to the provisions
of Sections 16.6.4, 16.6.5 and 16.6.6, during periods of
curtailment SDG&E shall pay Seller firm capacity payments, as
appropriate, calculated using Assumed Production Factors derived
from Seller's historical performance during the on-peak and
semi-peak time periods during the previous calendar year. The
Assumed Production Factors shall be calculated as follows:
APFs = summer kwhp = summer kwhsP
C x (summer Hp + Summer Hsp)
APFp = summer kwhp
C x summer Hp
where:
APFs = Assumed Production Factor for the summer months for
the combined on-peak and semi-peak periods.
APFp = Assumed Production Factor for the summer on-peak
period
Summer Kwhp, summer kwhsp = the respective on-peak and semi-peak
Energy (kwh) purchased by SDG&E during the previous calendar
year's summer billing period excluding any energy purchased during
periods of Curtailment.
Summer Hp, summer Hsp = the respective on-peak and semi-peak hours
during the previous calendar year's summer billing period
excluding scheduled maintenance hours and curtailment hours under
Section 16.
APFw = winter kwhp +winter kwhsp
C x (winter Hp + winter Hsp)
APFw = Assumed Production Factor for the winter months for
the combined on-peak and semi-peak periods winter
kwhp, winter kwhsp = the respective on-peak and
semi-peak Energy purchased by SDG&E during the
previous calendar year's winter billing period,
excluding any Energy purchased during periods of
curtailment.
C = Firm Capacity
Winter Hp, winter Hsp = the respective on-peak and semi-peak hours
during the previous calendar year's winter billing period
excluding scheduled maintenance and any curtailment hours under
Section 16.
b) During the first twelve (12) monthly billing cycles following
Initial Operation, the Assumed Production Factors shall be
calculated based on cumulative available monthly billing data.
After the first twelve (12) months and until a full calendar
year's billing data is available, the Assumed Production Factors
shall be calculated using the most recent twelve (12) monthly
billing cycles available.
c) During any billing month in which a curtailment period has
occurred during the peak or semipeak time periods under Section
16.6, Firm Capacity payments and Bonus Payments made by SDG&E to
Seller shall be made as follows:
(1) The formula for calculation of Performance Factor (P) as
defined in Section 9.6 shall be revised as follows:
P = Aasm(1-L) P is less than or
C x (B-S) x E equal to 1
where Aasm replaces A and where: Aasm = the sum of the total
kilowatt-hours delivered during all on-peak and semi-peak hours
excluding any kilowatt-hours delivered during hours of curtailment
and excluding any Energy associated with generating levels
greater than the Firm Capacity, plus the kilowatt-hours associated
with the applicable Assumed Production Factor for the combined
time period(s) in which curtailment hour(s) occurred. The
kilowatt-hours associated with the Assumed Production Factor shall
be calculated by multiplying the appropriate APF times the Firm
Capacity times the hours in the on-peak and semi-peak hours in
which curtailment was invoked during the monthly billing cycle.
2) The formula for calculation of the Capacity Bonus Factor (CBF) as
defined in Section 9.7 shall be revised as follows:
CBF = EDasm (1-L) CBF is greater than
C x (PP-SP) x .85 equal to 1
where EDasm replaces ED
and where:
EDasm = the sum of the Energy delivered during the on-peak hours
of the peak months excluding any Energy delivered during hours of
Curtailment, plus the kilowatt hours associated with the Assumed
Production Factor calculated for the summer months. The kilowatt
hours associated with the Assumed Production Factor shall be
calculated by multiplying the APFp times the Firm Capacity times
the number of summer on-peak hours in which curtailment was
invoked during the billing cycle.
16.6.13 During hours of curtailment designed under this section
16.6, Seller shall have the right to sell such curtailed energy to
a third party. It is Seller's obligation not to sell the
curtailed energy on a firm basis. If Sell has elected to sell
energy to a third party during curtailment period, SDG&E shall
have the right to recall such energy for delivery to SDG&E during
such curtailment period upon giving Seller one (1) hour prior
notice of its desire to suspend curtailment. SDG&E will only
suspend curtailment if circumstances change the assumptions
underlying the scheduling of the curtailment. Seller shall use
its best efforts to recommence deliveries to SDG&E should SDG&E
suspend curtailment prior to the time such curtailment period was
scheduled to end.
17. DEFAULT AND REMEDIES
17.1 If either Party defaults in the due performance or observance of
any term or condition of this Agreement, said Party shall be in
default. Upon the occurrence of any default and at any time
thereafter so long as the same shall be continu- ing, the
non-defaulting Party may, by notice to the defaulting Party
specifying the nature of such default, declare this Agree- ment to
be in default. The defaulting Party must remedy such default
within the time specified in this Agreement, or, if no time is
specified, within thirty (30) days after receiving written notice
from the non-defaulting Party. In the event that the defaulting
Party fails to cure its default within such period of time, the
non-defaulting Party may at any time thereafter exe- rcise, at its
election, any rights or remedies it may have under this Agreement,
at law or in equity to enforce the terms hereof, including, but
not limited to, monetary damages, injunctive rel- ief, specific
performance and termination of this Agreement.
17.2 Nothing in this Agreement is intended to limit SDG&E's right to
demand and Seller's obligation to provide adequate assurance in
the circumstances described in the Uniform Commercial Code. The
Parties specifically intend that such rights and obligations shall
exist whether or not the Uniform Commercial Code otherwise
applies.
17.3 Liquidated Damages: Seller agrees to pay SDG&E in event of
Seller's default, as Liquidated Damages and not as a penalty, the
amount calculated pursuant to this Section 17. The Parties agree
that said calculations represent a reasonable endeavor to estimate
fair compensation for SDG&E's foreseeable losses associated with
Seller's failure to deliver Firm Capacity that might result from
Seller's default or from a reduction in Firm Capacity under this
Agreement. The amount of Seller's Liquidated Damages payment shall
be reduced by the Project Fee, if any, paid to SDG&E pursuant to
Section 4 of this Agreement; provided, however, if the amount of
Seller's Liquidated Damages payment is less than the Project Fee
paid to SDG&E pursuant to Section 4 of this Agreement, Seller
shall not be entitled to a refund of the Project Fee or any
portion thereof. This Section 17 shall not preclude or limit
SDG&E's entitlement to monetary damages for losses other than for
failure to deliver Firm Capacity or resulting from other events of
Seller's default.
17.4 In the event of default, SDG&E shall bill Seller for all amounts
due under this Agreement including the amounts calculated in
Section 17. Seller shall pay interest on all amounts due from the
date of notice of default, compounded monthly, at an interest rate
equal to the lower of (a) the maximum rate allowed by law, or (b)
one-twelfth of the most recent month's interest rate on Commercial
Paper (prime, three months) published in the Federal Reserve
Statistical Release, G.13, (or if such publication is no longer
being issued, the closest similar publication), plus 50 basis
points (See Exhibit E). Seller shall pay SDG&E within thirty (30)
calendar days of receipt of SDG&E's bill.
17.5 The non-defaulting party shall have the right to offset any
amounts due it from the defaulting party against any present or
future payments it owes to the defaulting party and may at all
times pursue any other remedies available to it.
17.6 For purposes of this Section 17, "Termination Payment A" shall
mean an amount equal to the difference between payments for Firm
Capacity to date based on the original Agreement length and
payments that would have been made, based upon the period of
Seller's actual performance, up to the date of reduction or
termination, plus interest as set forth in Section 17.4.
17.6.1 If Seller terminates this Agreement, or all or part of the
Firm Capacity stated in Section 2.2.1 with the following
prescribed written notice:
Amount of Capacity
Terminated Length of Notice
Under 5,000 kw 12 months
5,000 kw to 10,000 kw 36 months
10,000 kw to 20,000 kw 48 months
20,001 kw and over 60 months
Seller shall refund to SDG&E Termination Payment A as described in
Section 17.6. SDG&E shall then make capacity payments to Seller
for the remainder of Seller's perfor- mance, if any, at an
adjusted capacity price.
17.6.2 If Seller terminates this Agreement, or all or part of the
Firm Capacity stated in Section 2.2.1, without the notice
prescribed in Section 17.6.1, Seller shall pay SDG&E "Termination
Payment B". Termination Payment B shall consist of the sum of (a)
Termination Payment A and (b) a one-time payment. The one-time
payment shall be equal to the amount of Firm Capacity being
terminated times the difference between the Current Capacity Price
on the date of termination for a term equal to the balance of the
term of the Agreement and the Firm Capacity price. This product
shall be pro-rated for the length of notice given, if any, by
taking the difference between the amount of months of notice
prescribed minus the amount of months of notice given and dividing
by twelve (See Exhibit E, Example 2). In the event that the
Current Capacity Price is less than the Firm Capacity price or the
termination or reduction is a result of an uncontrollable force on
the part of the Seller, then only Termination Payment A shall
apply.
18. ABANDONMENT
18.1 If, in any six (6) month period after the Firm Capacity
Availability Date, Seller fails to deliver to SDG&E at least the
number of kilowatt hours derived from the product of four hundred
and thirty-eight (438) hours times the Firm Capacity rating
measured in kilowatts, Seller shall provide to SDG&E all of the
following:
18.1(a) a written description of the reason for Seller's low
level of performance;
18.1(b) a summary of the action Seller is taking to improve its
performance; and
18.1(c) a schedule for bringing Seller's deliveries up to the
Firm Capacity rating.
18.2 In any fifteen (15) month period after the Firm Capacity
Availability Date, Seller shall deliver to SDG&E not less than the
number of kilowatt hours derived from the product of one thousand
and ninety-five (1,095) hours times the Firm Capacity rating
measured in kilowatts. If, for any reason, Seller fails to
deliver this minimum amount, SDG&E may terminate this Agreement on
written notice. Unless excused as a result of an Uncontrollable
Force, such failure shall constitute a default, entitling SDG&E to
its remedies at law and under Section 17 of this Agreement.
19. NONDEDICATION OF FACILITIES
Seller does not hereby dedicate any part of the Generating Facility to
serve SDG&E, its customers, or the public. SDG&E does not hereby
dedicate any part of its system or facilities to serve or accept Energy
and Firm Capacity from Seller to any greater extent than may be provided
by law.
20. LIABILITY
20.1 Except in the case of Willful Action or sole negligence, neither
Party shall hold the other Party, its officers, agents or
employees liable for any loss, damage, claim, cost, or expense for
loss or damage to property, or injury or death of persons, which
arises out of the other Party's ownership, operation or
maintenance of facilities on its own side of the Point of
Delivery.
20.2 Except as set forth in Section 20.1, each Party agrees to defend,
indemnify and save harmless the other Party, its officers, agents,
and employees against all losses, claims, demands, costs, or
expenses for loss of or damage to property, or injury or death of
persons, which directly or indirectly arise out of the
indemnifying Party's performance pur- suant to this Agreement;
provided, however, that a Party shall be solely responsible for
any such losses, claims, demands, costs or expenses which result
from its sole negligence or Willful Action.
21. INSURANCE
21.1 Seller, at its own expense, shall secure and maintain in effect
during the life of this Agreement the following insu-rance as will
protect Seller and SDG&E during the performance of operation
hereunder:
21.1.1 General Liability Insurance with a combined single limit
for bodily injury and property damage of not less than (a)
$1,000,000 each occurrence if the Generating Facility is 100 kw or
greater; (b) $500,000 each occurrence if the Generating Facility
is between 20 kw and 100 kw; and (c) $100,000 each occurrence if
the Generating Facility is 20 kw or less. Such General Liability
Insurance shall include coverage for Premises-Operations, Owners
and Contractors Protective, Products/Completed Operations Hazard,
Explosion, Collapse, Underground, Contractual Liability, and Broad
Form Property Damage including Completed Operations.
21.1.2 The liability insurance specified in Section 21.1.1 shall
name SDG&E as additional insured and shall contain a severability
of interest or cross-liability clause. The requirement to name
SDG&E as additional insured shall be waived if such requirement
prevents Seller from obtaining insurance as specified herein.
21.2 Certificates of Insurance evidencing the coverages and provision
as required in Sections 21.1.1 and 21.1.2 above shall be furnished
to SDG&E prior to interconnected operation of the Generating
Facility and shall provide that written notice be given to SDG&E
at least thirty (30) days prior to cancellation or reduction of
any coverage. SDG&E shall have the right, but not the obligation,
to inspect the original policies of such insurance. Seller will
not be allowed to commence interconnected operations unless
evidence of satisfactory insurance has been provided to SDG&E in a
timely manner. SDG&E will allow Seller to self-insure in lieu of
compliance with the requirements of Section 22.1 under the
following conditions:
21.3.1 Seller must be a governmental agency with an established
record of self-insurance.
21.3.2 Seller must provide to SDG&E at least thirty (30) days
prior to the Operation Date evidence of an acceptable plan to
self-insure to a level of coverage equivalent to that required
under Section 22.1
21.3.3 If Seller ceases to self-insure to the level required
hereunder, or if Seller is unable to provide continuing evidence
of Seller's ability to self-insure, Seller shall immediately
obtain the coverage required under Sections 21.1.
22. UNCONTROLLABLE FORCE
Neither Party shall be considered to be in default with respect to any
obligation hereunder, other than the obligations to pay money, if
prevented from fulfilling such obligation by reason of an uncontrollable
force. The term "uncontrollable force" means unforeseeable causes,
other than Forced Outages, beyond the reasonable control of and without
the fault or negligence of the Party claiming uncontrollable force,
including but not limited to, acts of God, labor disputes, sudden
actions of the elements, actions by any legislative, judicial or
regulatory agency which conflict with the terms of this Agreement, and
actions by federal, state, municipal, or any other government agency.
Whichever Party is rendered unable to fulfill any obligation by reasons
of uncontrollable forces shall give prompt written notice of such fact
to the other Party and shall exercise due diligence to remove such
inability with all reasonable dispatch. Nothing in this Agreement shall
require a Party to settle any strike or labor dispute in which it is
involved.
23. NON-WAIVER
None of the provisions of this Agreement shall be considered waived by
either Party except when such waiver is given in writing. The failure
of either Party to insist in any one or more instances upon strict
performance of any of the provisions of this Agreement or to take
advantage of any or its rights hereunder shall not be construed as a
waiver of any such provisions or the relinquishment of any such rights
for the future, but the same shall continue and remain in full force and
effect.
24. SUCCESSORS & ASSIGNS
24.1 This Agreement shall be binding upon and inure to the benefit of
the respective successors and assigns of the Parties.
24.2 Neither Party shall voluntarily assign its rights nor delegate its
duties under this Agreement, or any part of such rights or duties,
without the written consent of the other Party, except in
connection with the sale or merger of a substantial portion of its
properties. Any such assignment or delegation made without such
written consent shall be null and void. Consent for assignment
will not be withheld unreasonably. Such assignment shall include,
unless otherwise specified therein, all of Seller's rights to any
refunds which might become due under this Agreement.
25. EFFECT OF SECTION HEADINGS
Section headings appearing in this Agreement are inserted for
convenience only, and shall not be construed as interpretations of text.
26. GOVERNING LAW
This Agreement shall be interpreted, governed, and construed under the
laws of the State of California as if executed and to be performed
wholly within the State of California.
27. SEVERAL OBLIGATIONS
Except where specifically stated in this Agreement to be otherwise, the
duties, obligations and liabilities of the Parties are intended to be
several and not joint or collective. Nothing contained in this Agreement
shall ever be construed to create an association, trust, partnership, or
joint venture or impose a trust or partnership duty, obligation or
liability on or with regard to either Party. Each Party shall be
individually and severally liable for its own obligations under this
Agreement.
28. CONDITIONS
28.1 This Agreement, other than Section 28, and Sections 4.1, 4.2.1,
4.2.2, and 5.3, is contingent on SDG&E obtaining an order from the
CPUC that (i) SDG&E's payments made to Seller under this Agreement
are recoverable, through SDG&E's Energy Cost Adjustment Clause,
subject to review of the reasonableness of SDG&E's performance
under the Agreement, and-(ii) this Agreement is reasonable and
SDG&E's entering into this Agreement is prudent. SDG&E will use
best efforts and Seller shall provide such reasonable assistance
as SDG&E may request in order to expedite obtaining such approval.
Both Parties shall evaluate whether the CPUC has approved this
Agreement based upon the above criteria. To the extent that the
CPUC imposes conditions in its decision which increase either
Party's risk in any respect beyond that which would be present, in
the reasonable judgement of such Party, had the CPUC merely made
the order specified in (i) and (ii) above, such Party may notify
the other that the Agreement has not been Approved by the CPUC.
Within ten (10) days of both Parties' receipt of the CPUC
decision, each Party shall notify the other in writing of its
determination that the decision (a) approves this Agreement, or
(b) does not approve this Agreement, based on the criteria above.
If either Party determines that the CPUC decision does not approve
this Agreement, the Parties shall meet forthwith to modify the
Agreement in a manner to preserve its economic integrity, and
resubmit it to the CPUC, unless the Parties deem it unnecessary
and provide written notice to each other consistent with this
Section 28.1.
28.2 Upon both Parties' providing notice to the other that this
Agreement has been approved by the CPUC, the condition set forth
in Section 28.1 shall be deemed fulfilled.
IN WITNESS WHEREOF, the Parties have caused Agreement to be executed in their
respective names, in duplicate by their respective official representatives as
of the day and year last written below.
By /s/ Robert A. Keegan
(Dated) Robert A. Keegan
Vice President - Development
Bonneville Pacific Corporation
By /s/ Donald E. Felsinger
(Dated) Donald E. Felsinger
Vice President - Marketing
and Resource Development
San Diego Gas & Electric Company
EXHIBIT A
SITE LOCATION METES AND BOUNDS DESCRIPTION
A parcel of property located within the South One-Half of the South one-Half
of the North One-Half (N 1/2, N 1/2) of Section Thirty-Three (33), Township
Sixteen South (T16S), Range Twenty-Two East (R22E), San Bernardino Base and
Meridian (SBBM), Yuma County, Arizona. Said parcel being more particularly
described as follows: Commencing at the Southwest Corner of the Northwest
Quarter of the Northeast Quarter (NW 1/4, NE 1/4), of Section Thirty-Three
(33); Thence N00 14'37"E a distance of 417.42 feet to a point, said point
being the TRUE POINT OF BEGINNING; Thence N00 14'37'E a distance of 538.56
feet to a point; Thence S89 58'54"W a distance of 464.64 feet to a point;
Thence N00 06'31''E a distance of 854.69 feet to a point; Thence S80 13'33"E a
distance of 471.47 feet to a point; Thence S00 00'30"W a distance of 5.07 feet
to a point; Thence S80 13'33"E a distance of 1038.46 feet to a point; Thence
S00 07'26"W a distance of 562.89 feet to a point, said point being the
beginning of a curve to the left with a radius of 60.00 feet, a central angle
of 250 31'44", a chord bearing of 854 51'34"W and a chord length of 97.98
feet; Thence 262.35 feet along the arc of said curve to a point, said point
being the beginning of a curve to the right with a radius of 30.00 feet and a
central angle of 70 31'44"; Thence 36.93 feet along the arc of said curve to a
point; Thence S00 07'26"W a distance of 652.11 feet to a point, said pint
being the beginning of a curve to the right with a radius of 170.00 feet and a
central angle of 11 28'43"; Thence 34.06 feet along the arc of said curve to a
point; Thence S11 36'06"W a distance of 60.31 feet to a point said point being
the beginning of a curve to the left with a radius of 230.00 feet and a
central angle of 11 28'43"; Thence 46.07 feet along the arc of said curve to a
point; Thence S00 07'26"W a distance of 35.50 feet to a point, said point
being the beginning o a curve to the right with a radius of 25.00 feet and a
central angle of 89 51'28"; Thence 39.21 feet along the arc of said curve to a
point; Thence S89 58'54"W a distance of 711.95 feet to a point; Thence N00
14'37"E a distance of 367.42 feet to a point; Thence S89 58'54"W a distance of
208.71 feet to a point, said point being the TRUE POINT OF BEGINNING.
EXHIBIT B
TIME PERIODS
The Time Periods currently in effect for San Diego Gas & Electric are defined
in accordance with the following table:
Summer Winter
May 1 - September 30 All Other
On-Peak 11 a.m.-6 p.m. Weekdays 5 p.m.-8 p.m. Weekdays
Semi-Peak 6 a.m.-11 a.m. Weekdays 6 a.m.-5 p.m. Weekdays
6 p.m.-10 p.m. Weekdays 8 p.m.-10 p.m. Weekdays
Off-Peak 10 p.m.-Midnight Weekdays 10 p.m.-Midnight Weekdays
5 a.m.-6 a.m. Weekdays 5 a.m.-6 a.m. Weekdays
5 a.m.-Midnight Weekends 5 a.m.-Midnight Weekends
5 a.m.-Midnight Holidays 5 a.m.-Midnight Holidays
Super
Off-Peak Midnight-5 a.m All days Midnight-5 a.m. All days
All time periods listed are clock time.
The holidays specified are: New Year's Day, President's Day, Memorial Day,
independence Day, Labor Day, Veteran's Day, Thanksgiving Day and Christmas Day
as designated by California Law.
The time period definitions may be revised to comply with CPUC orders
regarding billing hours.
The energy payments currently are calculated and published four times a year
in accordance with the following table:
Effective Date Applicable Period
February 1 February 1-April 30
May 1 May 1-July 31
August 1 August 1-October 31
November 1 November 1-January 31
EXHIBIT C
Date 09 Mar 89 TABLE 1
SAN DIEGO GAS & ELECTRIC COMPANY
CAPACITY PAYMENT SCHEDULE
FOR
FIRM CAPACITY QUALIFYING FACILITIES
182 MW BLOCK OF SO-2 QFS
DOLLARS/KW-YR
SCHEDULED FIRM
CAPACITY OPERATING DURATION OF CONTRACT (YEARS)
DATE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
1988 65 37 82 32 35 41 46 52 54 57 60 62 64 67 69
1989 5 7 18 25 35 42 47 51 55 59 61 64 67 69 71
1990 9 25 33 44 52 57 62 65 69 72 74 77 79 81 83
199 43 48 59 66 71 74 78 81 83 86 88 90 92 95 96
1992 53 69 75 80 83 86 89 91 94 96 98 100 103 105 106
1993 86 88 91 93 95 98 100 102 104 106 108 111 113 115 116
SCHEDULED FIRM
CAPACITY OPERATING DURATION OF CONTRACT (YEARS)
DATE 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
1988 70 72 74 76 77 79 80 81 83 84 85 86 87 88 89
1989 73 75 77 79 80 82 83 85 86 87 89 90 91 92 93
1990 85 87 89 91 92 94 95 97 98 99 101 102 103 104 105
1991 98 100 102 104 105 107 108 110 111 112 114 115 116 117 118
1992 108 110 112 114 115 117 118 120 121 123 124 125 127 128 129
1993 118 120 122 124 125 127 129 130 132 133 135 136 137 138 140
EXHIBIT D
QUARTERLY STATUS REPORT
QFID No.
Name of Seller
Date
Directions: A complete and accurate response is required each time this
report is filed with SDG&E. Responses of "not appli- cable" or "N/A" must be
supported by a detailed factual explanation for clarification purposes. If
Forecast Completion Date has not been established, so state and explain.
Forecast Check if
(or actual) Schedule
Completion Check if Change from
Date (1) Completed Previous Report
Milestone
Site Control
(a) Proof provided to
SDG&E / / / /
(b) Current site control
status:
_____ Project has site control
_____ Project does not have site control
Critical Path Permit (2)
(a) Permit application
filed / / / /
(b) Permit application
accepted / / / /
(c) Permit issued / / / /
Fuel Supply Status: (e.g., contract signed. resource evaluation studies
complete. etc.)
Financing Secured
(a) Construction (short-
term) / / / /
(b) Permanent (long-
term) / / / /
Forecast Check if
(or actual) Schedule
Completion Check if Change from
Date (1) Completed Previous Report
Final Method of Service
Study Requested / / / /
Equipment Contract Award
(a) Generator / / / /
(b) Turbine/prime mover / / / /
Equipment Ordered
(a) Generator / / / /
(b) Turbine/prime mover / / / /
Engineering/Design
(a) Preliminary
Engineering % Complete
(b) Final Engineering % Complete
Construction Contract
Awarded / / / /
Interconnection Construction
(a) Seller construction
started / / / /
(b) SDG&E construction
requested / / / /
Project Construction
(a) Site grading started / / / /
(b) Major foundations
started / / / /
(c) Turbine/prime mover
on site / / / /
(d) Generator on site / / / /
(e) Construction status % Complete
Forecast Check if
(or actual) Schedule
Completion Check if Change from
Date (1) Completed Previous Report
Initial Parallel
Operation / / / /
Start-up testing begun / / / /
(a) Testing status % Complete
Firm (or As-Available)
Capacity Availability
Date / / / /
Describe progress of project development since the last submitted Quarterly
Status Report (attach additional pages, if needed):
Explain any changes to the project development schedule since last submitted
Quarterly Status Report (attach additional pages, if needed):
I certify that the foregoing information is true and complete.
Date
Signature
Name
Title
Contact Person
Telephone Number
Notes: (1) Should reflect project's current schedule for Milestones not yet
completed or actual completion date for Milestone completed. (2) The
Critical Path Permits for all non-thermal projects and thermal projects exempt
from CEC Site Certification are (i) for Geothermal, County Conditional Use
Permit or Special Zone Permit; (ii) for Biomass, County Conditional Use Permit
or Special Zone Permit, or Air Quality Permit; (iii) for Wind, County
Conditional Use Permit or Special Zone Permit; (iv) for Cogeneration, Air
Quality Permit; (v) for Hydro, FERC License or Exemption. California Energy
Commission Site Certification is required for non-exempt thermal projects over
50 MW.
EXHIBIT E
REDUCTION AND TERMINATION
PAYMENT EXAMPLE
These examples are for demonstration purposes only and should not be
construed as a projection of SDG&E Actual Termination Payments.
Example 1:
Termination with 36 months written notice given 12 years after the
Operation Date for termination 15 years after the Operation Date or on
December 31, 1999.
Assumptions for this example:
Contract Capacity - 10 megawatts (10,000 kilowatts)
Contract Term - 25 years
Operation Date - January 1, 1985
Contract Capacity Price - $115 per kilowatt per year
Monthly Interest Rate - 1% per month (assumed to be constant)
(a) Total Capacity Payment made = $115/kW-yr x 10,000 kw = $1,150,000 per
year
(b) Total Capacity Payments which would have been made for a 15 year
Contract Term = $100/kW-yr x 10,000 kw = $l,000,000 per year.
(c) The difference between (a) and (b) of annual overpayments = $1,150,000 -
$l,000,0000/yr = $150,000/yr
Termination Payment A is then the value at the end of the 12th year of the sum
of the annual overpayments multiplied by a one (1%) percent per month interest
charge.
Termination Payment A:
$150,000/yr x 1 yr/12 months x (Compound Amount Factor at 1% per month for 12
years) = $3,988,269.
SDG&E would then pay QF $100/kW-yr for the remaining 36 months of revised
contract term.
Example 2:
Termination without prescribed notice 12 years after the Operation Date
or on December 31, 1997.
Assumption for this Example:
Contract Capacity - 10 megawatts
(10,000 kilowatts)
Contract Term - 25 years
Operation Date - January 1, 1985
Contract Capacity Price - $115 per kilowatt per year
Monthly Interest Rate - 1% per month (Assumed to be
constant)
Length of Notice Given - 3 months
Termination Payment B is equal in the sum of Termination Payment A (using the
same methodology as in Example 1 above), and a one-time payment, as follows:
Termination Payment A
(a) Total Capacity Payment made = $115/kW-yr x 10,000 kw
= $l, 150,000/yr
(b) Total Capacity Payment which would have been made using the same
Capacity Payment Schedule in effect at the time of execution for a 12
year contract term = $93/kW-yr x 10,000 kw = $930,000/yr
(c) The difference between (a) and (b), of overpayment $1,150,000 - $930,000
= $220,000/yr
Termination Payment A is then the value at the end of the 12th year of the sum
of the annual overpayments multiplied by one (1%) percent per month interest
charge.
Termination Payment A:
= $220,000/year x 1 year/12 months x (Compound Amount Factor at 1%
month for 12 years) = $5,849,460
One Time Payment
The payment can be formulated as follows: = (Amount of Firm Capacity
Terminated) x (Current Capacity Price - Firm Capacity Price) x (Amount
of Notice Prescribed - Amount of Notice Given)
12 months/year
= (10,000 kW)(200 S/kW-yr - 115 $/kW-yr) (36-3 mos)
(12 mos/yr)
= $2,337,500
Termination Payment B
Termination Payment B = Termination Payment A + One Time Payment
= $5,849,460 + $2,337,500
= $8,186,960
SAN DIEGO GAS & ELECTRIC COMPANY Revised Cal.P.U.C Sheet No.5083-E
San Diego, California Cancelling Original Cal.P.U.C. Sheet No.4242-E
Sheet 1
EXHIBIT F
RULE 21
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
A. General
1. This Rule presents the design and operating guidelines that should
be applied to Cogeneration and Small Power Production sources that
meet the criteria for a Qualifying Facility (QF) as defined by
Title 18, Code of Federal Regulation (CFR) Section 292.101(b)(1).
These guidelines are necessary to facilitate safe integration of
customer generation into the utility's system. In addition, the
QF must also comply with the utility's applicable rules
regulations.
2. These guidelines will cover 1) customer design requirements and
operating procedures and 2) utility design requirements and
operating procedures.
3. For the purpose of simplicity, the term customer will be used
in the guidelines to refer to both cogenerators and small power
producers.
B. Customer Systems Description
1. The customer may elect to use any of a variety of energy sources
including solar, wind or other alternative energy sources, in
addition to conventional fossil fuels. The end conversion for
connection to the utility's system must provide 60Hz alternating
current.
2. The customer may elect to run his generator in parallel with the
utility or as a separate system with capability of non-parallel
load transfer between the two independent systems. The
requirements for these two methods of operation are outlined
below.
C. Separate System (See Supplement I in Section K.)
1. A separate system is defined as one in which there is no
possibility of connecting the customer's generation in parallel
with the utility's system. For this design to be practical, the
customer must be capable of transferring load between the two
systems in an open transition or non-parallel mode. This can be
accomplished by either an electrically or mechanically interlocked
switching arrangement which precludes operation of both switches
in the closed position. The customer will be required to provide
protection to ensure adequate clearing of faults on his own
system.
Advice Ltr. No.603-E-SUPP. Issued by Date Filed April 13, 1984
Decision No.83-10-093 RONALD K. FULLER Effective May 13,1984
84-03-092 Vice President-Regulatory Services Resolution No.
Sheet 2 RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
C. Separate System (See Supplement I in Section K.) (Continued)
2. If the customer has a separate system, the utility will require
verification that the transfer scheme meets the non parallel
requirements. This will be accomplished by approval of drawings
by the utility in writing and, if the utility so elects, by field
inspection of the transfer scheme. The utility will not be
responsible for approving the customer's generation equipment and
assumes no responsibility for its designor operation.
3. Many Uniterruptible Power Supply (UPS) systems do not specifically
meet the separate system criteria. However, if they are not
capable of backfeed they will be classified as a separate system.
If they can backfeed, they must meet the requirements of parallel
operation.
D. Parallel Operation
A parallel system is defined as one in which the customer's generation
can be connected to a bus common with the utility's system. A transfer
of power between the two systems is a direct and generally desired
consequence. For this operation to be practical and safe, the
customer's equipment must meet the following conditions:
1. General Design Requirements
a. The customer's installation must meet all applicable
national, state, and local construction and safety codes.
b. All interconnection equipment at the customer's facility
shall be installed and maintained by the customer. If,
after review of the customer's design, it is determined that
in addition, equipment need be installed on the utility
through a power purchase or interconnection agreement with
the customer and in accordance with this Rule.
Sheet 3
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
D. Parallel Operation (Continued)
1. General Design Requirements (Continued)
c. A manual load break disconnect device shall be available
at or near the customer's main service point(s). This
disconnect device may be owned by either party but the
utility must have preemptory control for utility outages or
switching. The disconnect device must be capable of being
locked in the open position if the customer has access to
the disconnect device (see Section K.2.a.).
d. Voltage regulation equipment will be required on the
customer's generator to maintain service voltage within
normal utility limits (not required under 100 Kw).
e. Generator characteristics shall be specified and the
connection to the utility's system shall be designed to
limit voltage harmonic distortion to less than 3% for any
single frequency and to less than 5% total harmonic content.
If harmonic distortion causes interference to other utility
customers, the responsible party will redesign his system to
eliminate such interference.
f. The customer shall submit drawings and schematics of
interconnecting equipment and associated protection to the
utility for review and approval. Typical required drawings
will include, but not necessarily be limited to the
following prints: single line diagram, relay functional,
metering on line and switch gear details, circuit breaker
open and close control circuits. The utility will review
only those portions of the drawings and schematics which
apply to metering and the protection of the utility system.
The utility assumes no responsibility for review or approval
of equipment or circuit drawings pertaining to the
protection of the customer's system.
Sheet 4
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
D. Parallel Operation (Continued)
2. General Operating Requirements
a. The customer must maintain service voltage within normal
utility limits. If high or low voltage complaints or
flicker complaints result from operation of the customer's
generation, such generating equipment shall be disconnected
until the problem is resolved.
b. The customer shall discontinue parallel operation when
requested by the utility:
(1) To facilitate maintenance or repair of utility
facilities;
(2) During system emergencies;
(3) When the customer's equipment is operating in a
hazardous manner or is operating such that it is
interfering with other customers on the system.
NOTE: The utility may disconnect the customer from the
utility's system at any time without prior
notification, as system conditions may dictate.
c. The customer may not commence parallel operation of its
generator(s) until final written approval has been given by
the utility. The utility reserves the right to inspect the
customer's facility and witness testing of any equipment or
devices associated with the interconnection.
d. The utility reserves the right to inspect the customer's
facilities whenever it appears that the customer is
operating in an unsafe or harmful manner to the utility's
facilities, personnel or other customers.
Sheet 5 RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
D. Parallel Operation (Continued)
2. General Operating Requirements (Continued)
e. To assure the continued and safe operation of the
interconnection between the utility and the customer,
the utility recommends that the customer maintain and
calibrate his equipment and protective devices
associated with the interconnection to the utility on
a repetitive basis. The utility reserves the right to
require customers to provide the utility with
maintenance and calibration reports.
E. Customer Generation Less than 100 Kw (See Supplement II in Section
L.)
1. The utility shall provide and install metering, at a
location acceptable to the utility, as necessary to comply
with applicable customer generation gas and electric rate
schedules, power purchase contracts, or utility
requirements. The installation, operation, and maintenance
costs of these metering facilities shall be borne by the
customer, except as provided in Section J.l.d.
2. Where service is provided at or below 480 V, the customer is
to be served by a dedicated distribution transformer except
in the following circumstances:
a. The generator is under 10 kw, or
b. The generator is under lOO kw and is an induction
generator wherein the customer explicitly provides
for 24-hour immediate utility access to all
interconnection facilities as provided in Rule
l6.A.l.a.(1).
3. The customer should maintain his power factor within a
reasonable range. For small generators, power factor
correction may not be desirable.
4. The customer will be required to provide suitable devices to
ensure adequate protection for the following:
a. All faults on the customer's system.
b. All faults on the utility's system.
c. Backfeed or start-up of a customer's generator(s) into
a dead utility busSheet 6
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
E. Customer Generation Less Than 100 kw (See Supplement II in Section
L.) (Continued)
5. The following customer protective devices are required as a
minimum to effect connection and separation of the utility
and customer systems. For induction generators below 10 kw,
the following are recommended but not required. The
customer will still be responsible for providing
protection for the conditions of Section E.4.
a. Individual phase overcurrent trip devices.
b. Undervoltage trip devices.
c. Underfrequency trip devices.
d. Synchronizing or equivalent controls to ensure a
smooth connection with the utility's system.
6. The requirements listed in Section E.5. are based on the
utility's forecast that there will be a relatively small
amount of customer generation versus load for any particular
line on the utility's system. If a heavy saturation of
small power production on some line(s) does occur at a
future time, future customers may be required to provide
additional protection at that time. Where an induction
generator is to be installed, some of the trip devices may
be waived. Permission to waive certain devices will be
given only after a check of the supply circuit (for
capacitance) has been made and it has been determined that
the customer's generation will not be able to backfeed the
utility's system.
7. The customer shall not reconnect his generator after a
protective device trip unless his system is energized from
the utility source or unless he has isolated his system from
the utility.Sheet 7
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
F. Customer Generation Capacity 100 kw-1Mw (See Supplement III in
Section M.)
1. The utility shall provide and install metering, at a
location acceptable to the utility, as necessary to comply
with applicable customer generation gas and electric rate
schedules, power purchase contracts, or utility
requirements. The installation, operation, and maintenance
cost of these metering facilities shall be borne by the
customer.
2. The customer's generator(s) shall be designed and operated
to limit the adverse affects of reactive power flow on the
utility's system under all reasonably probable load
conditions. Generators shall be operated in a
manner to satisfy the reactive power requirement of the
customer's own load within the limits of the generator's
capability unless otherwise specified by the utility.
a. For synchronous generators, sufficient generator
reactive capability shall be provided to withstand
normal voltage changes on the utility's system.
b. For induction generators, capacitor installations will
likely be required for reactive power support. The
cost of such capacitors will be borne by the customer.
3. The customer shall install relaying to provide adequate
protection for the following:
a. All faults on the customer's system.
b. All faults on the utility's system.
c. Unbalanced or single phase conditions on the utility's
system.
d. Backfeed or start-up of the customer's generator(s)
into a dead utility bus.Sheet 8
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
F. Customer Generation Capacity 100 kw-1 (See Supplement III in
Section M.) (Continued)
4. Protective devices required are as follows:
a. Individual phase overcurrent trip devices.
b. Undervoltage trip devices.
c. Sensitive current unbalance relays.
d. Synchronizing controls; either automatic or manual.
e. Over/under frequency trip devices.
5. The customer shall not reconnect hi generator after a
protective device trip unless his system is energized from
the utility source, or unless he has isolated his system
from the utility. To prevent such hazardous connections,
the protective devices specified in Sections F.5.b. and
F.4.d. are required. In addition generator control
circuit(s) must be designed to prevent accidental generator
connection to a dead utility system. Design variations are
acceptable provided the requirements of Section F.3. are
satisfied.
G. Customer Generation Capacity Greater the 1 Mw (See Supplement IV
in Section N.)
1. The utility shall provide and install metering, at a
location acceptable to the utility, as necessary to comply
with applicable customer generation gas and electric rate
schedules, power purchase contracts, or utility
requirements. The installation, operation, and maintenance
costs of these metering facilities shall be borne by the
customer.
Sheet 9
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
G. Customer Generation Capacity Greater the 1 Mw (See Supplement IV
in Section N.) (Continued)
2. The customer's generator(s) shall be designed and operated
to limit the adverse affects of reactive power flow on the
utility's system under all reasonable probable load
conditions. Generators shall be operated in a
manner to satisfy the reactive power requirement of the
customer's own load within the limits of the generator's
capability unless otherwise specified by the utility.
a. For synchronous generators, sufficient generator
reactive capability shall be provided to withstand
normal voltage damages on the utility's system.
b. For induction generators, capacitor installations will
likely be required for reactive power support. Such
capacitors will be at the expense of the customer.
3. The customer shall install relaying to provide adequate
protection for the following:
a. All faults on the customer's system.
b. All faults on the utility's system.
c. Unbalanced or single phase conditions, or
deteriorating voltage waveform conditions on the
customer's generator(s).
d. Backfeed or start-up of the customer's generator(s)
into a dead utility bus.
4. Protective devices required are as follows:
a. Individual phase overcurrent trip devices.
b. Sensitive ground protection.
c. Over/under voltage trip devices.
Sheet 10
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
G. Customer Generation Capacity Greater than 1 Mw (See Supplement IV
in Section N.) (Continued)
4. (Continued)
d. Sensitive current unbalance relays.
e. Synchronizing controls; either automatic or manual
synchronizing supervised by a synchronizing relay.
f. Over/under frequency trip devices.
g. Telemetering or supervisory equipment (See Sections
G.6., G.7., G.8., and I.2.).
5. The customer shall not reconnect his generator after a
protective device trip unless his system is energized from
the utility source, or unless he has isolated his system
from the utility. To prevent such hazardous connections,
the protective devices specified in Sections G.4/c. and
G.4.e. are required. In addition, generator control
circuit(s) must be designed to prevent accidental generator
connection to a dead utility system. Design variations are
acceptable provided the requirements of Section G.3. are
satisfied.
6. Telemetering of Plant Output
Telemetering of the plant output (Mw, Mvar) to the Utility
Control Center, at customer's cost, is required when the
output of the customer's generation is greater than 2 Mw,
and the generation is operating in parallel with the
utility.
7. Utility Supervisory Control
When the customer is selling firm capacity greater than or
equal to 5 Mw to the utility, one of the following is
required:Sheet 11
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
G. Customer Generation Capacity Greater than 1 Mw (See Supplement IV
in Section N.) (Continued)
7. Utility Supervisory Control; (continued)
a. Complete supervisory control system allowing operation
of plant generation from the Utility Control Center.
b. Manning of generation facilities during all hours of
operation and all periods in which customer's facility
may be dispatched to allow operation as directed from
the Utility control Center.
8. Control and Indication of Customer's Main Breaker
When the total output of the customer's generation is less
than 5 Mw, control and indication of the customer's main
breaker will not generally be required. However, this
decision will be made on an individual basis by the utility.
H. Utility System Description
1. The vast majority of, if not all, customers with generation
will be connected to the utility's distribution system.
This is a radial system and past experience indicates these
loads are of a passive nature. The encouragement of
customers to install onsite generation, however, will
make backfeed a distinct possibility. The incorporation of
protective devices on the customer's equipment cannot be
relied upon to prevent all possibilities of backfeed. Since
backfeed is probable, the following design and operating
requirements must be incorporated.
2. Utility Design Requirements
a. A means of disconnection must be available on both
sides of the utility metering; must be under the
control of the utility; and shall be applied to all
customers with parallel generation.
Sheet 12
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
H. Utility System Description (Continued)
2. Utility Design Requirements (Continued)
a. (Continued)
This can be accomplished with switches, load break
elbows, cutouts or secondary breakers. Customer
disconnects can also be used provided that:
(1) The switches meet with utility approval.
(2) The utility has pre-emptive control.
b. Transformers feeding customers with parallel
generation shall be identified with a special tag
attached to the transformer or pole. This will notify
field crews of the possibility of backfeed. Incoming
load data sheets should be flagged and used to
initiate orders to tag poles.
c. All maps and diagrams used by System Operators to
direct switching operations shall have sources of
parallel generation identified.
d. A supervisory control and monitoring system will be
incorporated for those customers as specified in
Sections G.7. and G.8.
I. Utility Operation Procedures
1. As specified in Section H.1., backfeed from customer
generation is a distinct possibility. To maintain safe
working conditions, strict adherence to safety rules is
required. Utility procedure is to ground de-energized lines
and equipment upon which work will be performed.
2. The utility will exercise direct control over customer
generation to the extent allowed by the contract and
elsewhere in the Rule. A supervisory system is required for
this control (see Sections G.7 and G.8).
Sheet 13
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
I. Utility Operation Procedures (Continued)
3. The utility must have discretionary control over all
customer generation, independent of magnitude, during
outages, equipment maintenance or emergencies.
4. Additional safety control or procedures may be required as
experience dictates.
5. It is normal utility practice to utilize multi-shot high
speed reclosing on its distribution circuits.
J. Interconnection and Line Extension/Line upgrade Facility Cost*
1. General
a. The installation and maintenance costs of facilities
related to the interconnection of a customer's
facility (interconnection facilities) to the utility's
system, utilizing the utility's normal standards,
shall be borne by the customer.
b. The installation and maintenance costs of any line
extension line upgrade facilities, utilizing the
utility's normal standards, shall be borne by the
customer. Line extension/line upgrade facilities
are defined as all facilities exclusive of
interconnection facilities, determined by the utility
to be necessary to connect the utility's system to the
customer's point of delivery in order to accept the
output of the customer's generating facility. The
cost of any portion of the line extension/line upgrade
undertaken to serve future additional customers shall
be borne by the utility.
* As used in this Section J. only, the terms "interconnection
facilities" and "line extension/line upgrade facilities" refer
only to such facilities to be owned and maintained by the utility.
Sheet 14
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
J. Interconnection and Line Extension/Line Upgrade Facility Cost
(Cont'd.)
1. General (Continued)
c. The customer shall be responsible for the costs of
exploring the feasibility of a project or its
interconnection with the utility's system, including
reasonable advance charges imposed by the utility for
feasibility studies. A transmission line study for
any customer shall be completed by the utility within
the time period identified by the utility in
accordance with the applicable procedures as
established by the California Public Utilities
Commission.
d. The customer shall be responsible for costs of
metering, telemetering (to the extent required under
this Rule), and safety checks except to the extent
that, under the utility's existing other rules, a
comparable customer would not be similarly charged.
Where the customer's generating facility is less that
20 kw, except those customers remaining on Schedule AD
after June 30, 1987, and customer does not require
that power delivered to the utility be measured on a
time-of-delivery basis, the utility will bear the cost
of installing, operating and maintaining one standard
watt-hour meter (and current transformers if required)
to measure power flows from the customer to the
utility. The customer shall provide and install
necessary meter sockets and enclosure equipment at or
near the point of delivery.
e. The customer shall be responsible for the installation
and maintenance costs of only those future utility
system alterations which are necessary to maintain the
California Public Utilities Commission's adopted
interconnection standards for the customer's
particular interconnection facilities. Said standards
shall be those in effect at the time customers and
utility sign the power purchase or interconnection
agreement. Should a line extension/line upgrade not
be directly required by or beneficial to the customer,
the customer shall be treated like any other customer
on the utility's system.
Sheet 15
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
J. Interconnection and Line Extension/Line Upgrade Facility Cost (Cont'd)
1. General (Continued)
f. When the customer wishes to continue to reserve
interconnection and line extension/line upgrade facilities
which were previously paid for by the customer, but have
been idled by an energy sale conversion, the utility shall
continue to charge the customer an operation and maintenance
(O&M) charge for these facilities. When the customer no
longer needs the facilities for which he has paid, or fails
to pay the required O&M charge, a termination payment due to
the utility or customer shall be calculated in accordance
with the applicable sections of the Rule and the power
purchase or interconnection agreement.
g. The utility shall treat any money collected from a customer
for a line extension/line upgrade that accommodates a second
customer in the same manner as customer advances would be
treated under the utility's regular line extension rules for
other customers.
h. The O&M charge required under this Section J. shall commence
at such time as the facilities are installed and able to be
used.
2. Allocation of the utility's Existing Line Capacity
For purposes of interconnecting the customer with the utility,
existing capacity on the utility's transmission and/or
distribution system and a priority to such line capacity will be
allocated as follows:
a. For a customer who receives either a final Standard Offer
#4, a Standard Offer #2, or a Uniform Standard Offer #1, the
following shall apply;
(1) For a customer who bids for and receives a final
Standard Offer #4 Power Purchase Agreement, entitlement to
existing capacity on the utility's transmission and/or
distribution system and a priority to such line capacity
will be established as of the date its bid is accepted by
the utility; or
Sheet 16
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
J. Interconnection and Line Extension/Line Upgrade Facility Cost (Cont'd)
2. Allocation of the Utility's Existing Line Capacity (Continued)
a. (Continued)
(2) for a customer who submits an application for and
receives a Standard Offer #2, entitlement to existing
capacity on the utility's transmission and/or distribution
system and a priority to such line capacity will be
established as of the date the customer pays for and
provides all information necessary for the utility to
conduct either a preliminary or detailed interconnection
study; or for an out-of-service area Seller, as of the date
Seller pays the costs and provides all information necessary
for the utility to conduct a Line Loss and transmission
Impact Study as defined in the Standard Offer #2 Agreement;
or
(3) for a customer who signs a Uniform Standard Offer #1
Agreement, entitlement to existing capacity on the utility's
transmission and/or distribution system and a priority to
such line capacity, will be establish as of the date the
customer both pays the Project Fee and pays the cost of, and
provides all information necessary for the utility to
conduct, either a preliminary or detailed interconnection
study, as defined in the Uniform Standard Offer #1
Agreement.
b. For a customer who signs a non-standard power purchase
agreement, entitlement to existing capacity on the utility's
transmission and/or distribution system and a priority for
such capacity will be established per the terms and
conditions specified in such non-standard agreement,
consistent with the above or as otherwise provided in such
non-standard contract.
c. If a customer fails to perform any of the obligations
specified in the Commission's authorized bidding protocol or
queue management procedures, whichever is applicable, or
fails to meet one of the performance milestones specified in
the power purchase agreement executed by the parties, the
customer's allocation of existing capacity and priority to
said line capacity shall be terminated and shall be
reallocated to other uses.
Sheet 17
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
J. Interconnection and Line Extension/Line Upgrade Facility Cost (Cont'd).
Allocation of the Utility's Existing Line Capacity (Continued)
d. In the event that the customer losese his priority for available
line capacity but desires to continue the project, the terms of
the power purchase agreement and applicable law, shall determine
whether the power purchase agreement is subject to termination as
a result of such loss of priority, and the manner in which new
priority may be established.
e. Where existing line capacity is allocated to a customer, the
customer shall incur no obligation for costs associated with
future line upgrades needed to accommodate other customers. If
existing line capacity is not sufficient to facilitate the
customer's capacity requirements, the customer shall bear the cost
of any additional line upgrade necessary to facilitate the
customer's capacity requirement. If two or more customers
establish priority rights simultaneously, the customers shall
share the costs of any additional line upgrade necessary to
facilitate their cumulative capacity requirements. Costs shall be
shared based on the relative proportion of capacity each customer
will add to the line.
3. Customer Installation of the Interconnection and Line
Extension/Line Upgrade Facilities (Exclusive of Metering)
At the option of the customer, installation of that portion of the
customer's interconnection and line extension/line upgrade
facilities (exclusive of metering) that is not covered by the
utility's regular line extension rules may be performed by the
customer's contractor under the guidelines of and subject to the
conditions and exceptions contained in Rule 15, Section E.8 and
the following:
Sheet 18
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
J. Interconnection and Line Extension/Line Upgrade Facility Cost (Cont'd)
3. Customer Installation of the Interconnection and Line
Extension/Line Upgrade Facilities (Exclusive of Metering)
(Continued)
a. The customer signs a power purchase or interconnection
agreement with the utility specifying the facilities to be
installed by the customer;
b. Prior to construction, the customer makes payment to the
utility, for the utility installation. The payment shall
include a CIAC tax gross-up and shall be made to the utility
pursuant to the utility's extension rules; and
c. The customer makes payment to the utility of a monthly
operation and maintenance charge which shall be determined
as 0.7% of the sum of the actual installed cost of the
facilities deeded to the utility plus the estimated or
actual installation cost (as selected in accordance with
Section J.4.b.) of the metering provided by the utility.
In the event that the customer terminates the use of the
iter-connection and line extension.line upgrade facilities at an
time, the customer will make a termination payment to the utility
which shall be determines as follows:
(1) The estimated or actual* installation cost of the metering
provided by the utility plus the estimated removal cost of the
interconnection and line extension/line upgrade facilities, less
(2) The salvage value of any materials removed and the fair
market value of any facilities the utility will continue to use to
service other customers rather than removing, less
(3) The estimated or actual* installation cost of the metering
that was previously paid in advance to the utility by the
customer.
If the termination payment as determined above is negative, then
the utility will refund that amount, without interest, to the
customer.
- - ---------------------------------
*If the actual cost option was selected in Section J.4.b.
Sheet 19
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
J. Interconnection and Line Extension/Line Upgrade Facility Cost (Cont'd)
Utility Installation of the Interconnection and Line Extension/Line
Upgrade Facilities
At the option of the customer, installation of the interconnection and
line extension/line upgrade facilities may be made by the utility,
provided the type of facilities requested are acceptable to the utility
and the utility agrees to the installation of the facilities under the
following conditions:
a. The customer will execute a power purchase or interconnection
agreement covering the installation of the interconnection and
line extension/line upgrade facilities.
b. Prior to commencement of the installation of the facilities and as
part of the power purchase or interconnection agreement, the
customer will choose to pay the cost of installation based on
either actual cost or a binding estimate.
c. Payment Method for Interconnection Facility
The customer will choose one of the following options to provide
payment to the utility for the installation and maintenance costs
of the interconnection facility:
(1) Option 1
(a) The customer will advance to the utility, prior to
construction, the estimated installed cost of the
interconnection facilities and related engineering fees.
(b) If the customer chooses to pay for installation based
on actual cost (as specified in Section J.4.b.), the utility
will, as soon as practical after the interconnection
facilities are completely installed by the utility, wither
bill or refund to the customer, as applicable, any
difference between the estimated and actual installed cost
of the interconnection facilities.
Sheet 20
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
J. Interconnection and Line Extension/Line Upgrade Facility Cost (Cont'd)
4. Utility Installation of the Interconnection and Line
Extension/Line Upgrade Facilities (Continued)
c. Payment Method for Interconnection Facility (Continued)
(1) Option 1 (Continued)
(c) The customer will make payment to the utility of
a monthly operation and maintenance (O&M) charge
which shall be determined as 0.7% of the
estimated or actual installed cost (as selected
in accordance with Section J.4.b.) of the
interconnection facilities.
(d) In the event that the customer terminates the
use of the interconnection facilities at any
time, the customer will make a termination
payment to the utility which shall be determined
as follows:
(i) The estimated or actual* installation cost
plus the estimated removal cost of the
interconnection facilities, less
(ii) The salvage value of any materials removed
and the fair market value of any facilities the
utility will continue to use to service other
customers rather than removing, less
(iii) The estimated or actual* installation
cost of the interconnection facilities that was
previously paid in advance to the utility by the
customer.
*If the actual cost option was selected in Section J.4.b.
Sheet 21
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
J. Interconnection and Line Extension/Line Upgrade Facility Cost (Cont'd)
4. Utility Installation of the Interconnection and Line
Extension/Line Upgrade Facilities (Continued)
c. Payment Method for Interconnection Facility (Continued)
(1) Option 1 (Continued)
(d) (Continued)
If the termination payment as determined above
is negative, then the utility will refund that
amount without interest, to the customer.
(2) Option 2
(a) The customer will make payment to the utility of
a monthly interconnection facility (IF) charge
for a term of 60 months commencing when the
utility begins work to install the removable and
reusable interconnection facilities. The
monthly charge will be 3.4% of the estimated
installed cost of the removable and reusable
interconnection facilities. Removable and
reusable interconnection facilities may include
such items as transformers. disconnect switches,
circuit breakers, protective relays, and other
related equipment which can be removed and
reused by the utility in the event that the
customer terminates the use of the
interconnection facilities. The utility
reserves the right to determine individually the
removable and reusable interconnection
facilities, This determination will be subject
to confirmation by the utility at such time the
customer terminates either his power purchase or
interconnection agreement or his use of the
interconnection facilities, whichever is
earliest.
Sheet 22
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
J. Interconnection and Line Extension/Line Upgrade Facility Cost (Cont'd)
4. Utility Installation of the Interconnection and Line
Extension/Line Upgrade Facilities (Continued)
c. Payment Method for Interconnection Facility (Continued)
(2) Option 2 (Continued)
(b) The customer will advance to the utility, prior
to construction, the related engineering fees
for the total installation and the estimated
installed cost of those interconnection
facilities that cannot be removed and reused by
the utility.
(c) If the customer chooses to pay for installation
based on actual cost (as specified in Section
J.4.b.), the utility will, as soon as practical
after the interconnection facilities are
completely installed by the utility, calculate a
revised monthly IF charge based on the actual
installed cost of the removable and reusable
interconnection facilities. The utility will
either bill or refund to the customer, as
applicable, to account for the difference in IF
charge based on the estimated versus the actual
installed cost of such facilities. Once the
revised monthly IF charge is determined, future
monthly payments by the customer to the utility
will be at the revised monthly charge.
(d) The customer will make payment to the utility of
a monthly operation and maintenance (O&M) charge
which shall be determined as 0.7% of the total
estimated or actual installed cost (as selected
in accordance with Section J.4.b.) of the
interconnection facilities.
Sheet 23
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
J. Interconnection and Line Extension/Line Upgrade Facility Cost (Cont'd)
4. Utility Installation of the Interconnection and Line
Extension/Line Upgrade Facilities (Continued)
c. Payment Method for Interconnection Facility (Continued)
(2) Option 2 (Continued)
(e) In the event that the customer terminates the
use of the interconnection facilities, the
customer will make a termination payment to the
utility which shall be determined as follows:
(i) The total estimated or actual* installed
cost plus the estimated removal cost of the
interconnection facilities, less
(ii) The salvage value of any materials removed
and the fair market value of any facilities the
utility will continue to use to service other
customers rather than removing, less
(iii) The estimated or actual* installed cost
of the interconnection facilities that cannot be
removed and reused by the utility that was
previously paid in advance to the utility by the
customer, less
(iv) The capital contribution of the monthly IF
charge as calculated by the utility.
If the termination payment as determined above
is negative, then the utility will refund that
amount, without interest, to the customer.
*If the actual cost was selected in Section J.4.b.
Sheet 24
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
J. Interconnection and Line Extension/Line Upgrade Facility Cost (Cont'd)
4. Utility Installation of the Interconnection and Line
Extension/Line Upgrade Facilities (Continued)
c. Payment Method for Interconnection Facility (Continued)
(2) Option 2 (Continued)
(f) Prior to the utility's acceptance of this
option, the customer shall provide and maintain
one of the following:
(i) A letter of Credit which will guarantee
payment of the estimated installed cost of the
interconnection facilities that is in excess of
the advance payment made by the customer under
Section J.4.c.(2)(b),
(ii) A Surety Bond, acceptable to the utility,
which will guarantee payment of the estimated
installed cost of the interconnection facilities
that is in excess of the advance payment made by
the customer under Section J.4.c.(2)(b),
(iii) A similar security, acceptable to the
utility, which will guarantee payment of the
estimated installed cost of the interconnection
facilities that is in excess of the advance
payment made by the customer under Section
J.4.c.(2)(b).
d. Payment Method for Line Extension/Line Upgrade Facilities
(1) The customer will advance to the utility, prior to
construction, the estimated installed cost of the line
extension/line upgrade facilities and related
Sheet 25
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
J. Interconnection and Line Extension/Line Upgrade Facility Cost (Cont'd)
4. Utility Installation of the Interconnection and Line
Extension/Line Upgrade Facilities (Continued)
d. Payment Method for Line Extension/Line Upgrade Facilities
(Continued)
(1) (Continued)
engineering fees. The customer will make payment to
the utility of a monthly operation and maintenance
(O&M) charge which shall be determined as 0.7% of the
estimated or actual installed cost (as selected in
accordance with Section J.4.b) of the line
extension/line upgrade facilities.
(2) If the customer chooses to pay for installation based
on actual cost (as specified in Section J.4.b.), the
utility will, as soon as practical after the line
extension/line upgrade facilities are completely
installed by the utility, either bill or refund to the
customer, as applicable, any difference between the
estimated and actual installed cost of the line
extension/line upgrade facilities.
(3) In the event that the customer terminates the use of
the interconnection and line extension/line upgrade
facilities, the customer will make a termination
payment to the utility for the line extension/line
upgrade facilities which shall be determined as
follows:
(i) The estimated or actual* installation cost plus
the estimated removal cost of the line extension/line
upgrade facilities, less
Sheet 26
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
J. Interconnection and Line Extension/Line Upgrade Facility Cost (Cont'd)
4. Utility Installation of the Interconnection and Line
Extension/Line Upgrade Facilities (Continued)
d. Payment Method for Line Extension/Line Upgrade Facilities
(Continued)
(3) (Continued)
(ii) The salvage value of any materials removed and
the fair market value of any facilities the utility
will continue to use to service other customers rather
than removing, less
(iii) The estimated or actual* installation cost of
the line extension/line upgrade facilities that was
previously paid in advance to the utility by the
customer.
If the advance payment for the line extension/line
upgrade was shared among more than one customer, the
termination payment for each customer will be
determined in the same proportion as each customer's
advance payment bears to the total advance payment.
If the termination payment as determined above is
negative, then the utility will refund that amount,
without interest, to the customer.
*If the actual cost option was selected in J.4.b.
Sheet 27
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
K. Supplement I - Typical Separate System Installation.
SUPPLEMENT I - SEPARATE SYSTEM
(Diagram)
NOTES: 1. Switches Interlocked so both
cannot be closed at same time.
2. Additional phase and ground
protection may be required
where service is taken at 12
kv or higher.
Relay Identification
M = Meter 3. Complete electrical metering
requirements are not
indicated. A separate
metering guidelines
publication is available from
the utility.
Sheet 28
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
L. Supplement II - Typical Installation of Under 100 kw.
(Diagram)
Sheet 29
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
M. Supplement III - Typical Installation of Under 100 kw to 1 MW.
(Diagram)
Sheet 30
RULE 21 (Continued)
CUSTOMER-OWNED GENERATION--QUALIFIED FACILITIES
N. Supplement IV - Typical Installation of 1 MW and Above.
(Diagram)