1996 FIRM CAPACITY & ENERGY SALE
AGREEMENT BETWEEN
TUCSON ELECTRIC POWER COMPANY
AND
TEXAS-NEW MEXICO POWER COMPANY
TUCSON-TNP
1996 FIRM CAPACITY & ENERGY SALE AGREEMENT
1. PARTIES
The Parties to this Agreement are TUCSON ELECTRIC POWER COMPANY,
an Arizona corporation ("Tucson"); and TEXAS-NEW MEXICO POWER
COMPANY, a Texas corporation ("TNP"), hereinafter collectively
referred to as "Parties" and individually referred to as "Party".
2. RECITALS This Agreement is made with reference to the
following facts, among others:
2.1 The Parties are engaged in the generation, transmission
and distribution of electric power and energy in one or
more of the States of Arizona, New Mexico, and Texas.
2.2 Electrical system interconnections exist which will
allow scheduled interchanges of power and energy to take
place between the Parties' respective systems.
2.3 Tucson desires to sell from its system and TNP desires to
purchase, in accordance with the terms and conditions set
forth herein, 30 megawatts of Firm Capacity and Firm
Energy, with no minimum energy requirement
NOW THEREFORE, The Parties agree as follows:
3. DEFINITIONS
The following terms when initially capitalized in this Agreement,
whether singular or plural, shall have the meaning as hereinafter
specified:
3.1 "Agreement" means this Agreement between Tucson and TNP.
3.2 "FERC" means the Federal Energy Regulatory
Commission, or its
-1-
successor.
3.3 "Firm Capacity" means system capacity as set forth in
Section 5.1 that is made available to TNP from Tucson's
system resources to facilitate deliveries of Firm Energy,
subject to curtailment only as provided in Section 5.3.
3.4 "Firm Energy" means the energy associated with Firm
Capacity, as set forth in Section 5.2.
3.5 "Point of Delivery" for all transactions hereunder shall
mean the 345 kV bus at Greenlee Substation.
4. EFFECTIVE DATE AND TERM
4.1 Subject to Sections 4.2 and 4.4, the period during which
sales win be made under this Agreement shall be January 1,
1996 through December 31, 1996, inclusive of both dates.
4.2 On or before January 31, 1995 Tucson will tender this
Agreement to the FERC for filing in compliance with
applicable regulation, and will request an effective date
of January 1, 1996. If, after filing this Agreement, FERC
or any other appropriate regulatory authority Orders any
material changes or modifications of this Agreement which
are unacceptable to either Party, the Party objecting to
such change or modification shall notify the other Party
of such objection, and to the extent the objection is not
remedied, this Agreement shall become void as of the
effective date of such order, and all obligations except
the obligation to pay for capacity and energy received,
prior to such effective date, shall terminate thereafter.
4.3 Neither Party hereto shall unilaterally make application
to FERC for a change in rates or in any other provision of
this Agreement pursuant to the provisions of either
Section 205 or 206 of the Federal Power Act.
5. CAPACITY AVAILABILITY AND ENERGY DELIVERY
5.1 Commencing January 1, 1996 and continuing each month
through the term of this Agreement, Tucson shall make
available at the Point of Delivery, and TNP shall
purchase, 30 megawatts of Firm Capacity. This Firm
Capacity shall be provided from Tucson's system
resources.
5.2 Commencing January 1, 1996 and continuing each month
through the term of this Agreement, Tucson shall deliver
and TNP shall accept and pay for Firm Energy as
scheduled by TNP, with no minimum energy requirement
5.3 Tucson may curtail energy deliveries under this Agreement
(i) for forced generation or transmission outages or (ii)
if the integrity or reliability of the transmission or
generation system is jeopardized. With respect to
priority of interruption or curtailment of service, TNP
will be curtailed on a pro rata basis with customers of
similar levels of firmness, and only SRP, NTUA and
Tucson's retail customers will have priority over TNP and
such other firm customers. Tucson may, as soon as
necessary, interrupt or reduce energy deliveries hereunder
to the extent needed to reduce or eliminate such jeopardy.
However, if practicable Tucson shall give TNP advance
notice before interrupting or reducing deliveries and
shall use reasonable efforts to supply scheduled energy,
including purchasing available energy from other
utilities.
6. SCHEDULING
Tucson shall be obligated to deliver Firm Capacity and Firm Energy
to TNP according to the following procedures:
6.1 Projected Monthly Schedules - By October 15, 1995,
TNP shall submit to Tucson in writing a monthly on-peak
and off-peak breakdown of the projected amount of Firm
Energy associated with Firm Capacity to be delivered
during 1996. Such projections shall represent a good
faith estimate by TNP of its anticipated deliveries and
shall not be binding on either Party.
6.2 Daily Schedules by TNP - TNP shall preschedule
deliveries of all Firm Energy and Firm Capacity no later
than 10-00 a.m. Mountain-. Standard Time on the last
normal business day observed by both Parties prior to the
day(s) of delivery, or as otherwise mutually agreed by
the Parties' dispatchers or schedulers. TNP may schedule
changes to this preschedule on a real-time basis with a
minimum 30 minutes notice, or as otherwise mutually
agreed. Tucson shall deliver such Firm Capacity and Firm
Energy in accordance with these daily schedules.
6.3 System Logs - All deliveries hereunder shall be deemed to
be made during the hours and in the amounts as accounted
for in Tucson's and TNP's dispatchers' system logs;
provided, that if scheduled deliveries are interrupted as
contemplated in Section 5.3 or due to uncontrollable
forces (as defined in Section 10), such schedules shall be
adjusted to reflect such interruption and any scheduled
delivery so interrupted may be rescheduled by TNP at a
later date by mutual agreement
7. LOSSES
Tucson shall be responsible for losses to the Point of Delivery.
TNP shall be responsible for losses associated with this Agreement
beyond the Point of Delivery.
8. CHARGES
8.1 Tucson shall bill TNP monthly on or before the tenth
(10th) day of the month following each month service is
rendered, in accordance with the provisions of Exhibit
A attached hereto. Bills shall be sent by facsimile to:
Texas-New Mexico Power Company
Attention: Mr. Charles T. Summers
Fax # (505) 538-3768 ext 227
Bills shall be deemed to be received on the day sent by
facsimile. The original invoice shall be sent via United
States mail to:
Texas-New Mexico Power Company
Attention: Mr. Randy Ownby
P. 0. Box 2943
4100 International Plaza
Fort Worth, Texas 76113
TNP shall pay Tucson by the tenth (10th) day after receipt of
the bill. Payment shall be made by wire transfer to:
Bank One
Tucson, Arizona
ABA #122-100-024
Credit Account #2002-8131
Tucson Electric Power Company
Amounts not paid by the due date shall be payable with
interest accrued on each calendar day from the due date to
the date of payment The interest shall be at a rate of two
percentage points above the then-effective prime commercial
lending rate per annum announced by the Chase Manhattan Bank
(NA), or its successor, at its principal office in New York
City.
8.2 In the event any portion of any bill is disputed,
the entire amount including disputed amount shall be
paid when due. The protest shall be timely if made at
the time of payment or within 60 days after the alleged
irregularity in billing is discovered, or should have
been discovered. If the disputed portion of the payment
is found to be incorrect, Tucson shall refund to TNP any
amount due, including interest accrued on each calendar
day from the date of payment by TNP to the date the
refund check is mailed by Tucson. The interest shall be
as provided in Section 8.1 herein.
9. AUTHORIZED REPRESENTATIVES
9.1 Each Party shall designate a person as its Authorized
Representative. Such Authorized Representative shall be
authorized to act on behalf of the Party designating
such Representative in carrying out the provisions of
this Agreement Each Party shall notify the other Party
within fifteen (15) calendar days after execution of @s
Agreement of the designation of its Authorized
Representative and shall promptly notify the other Party
of any subsequent changes in such designation.
9.2 The Authorized Representatives will meet as required to
provide coordination with respect to matters which
affect the implementation of this Agreement
9.3 Authorized Representatives shall have no authority to
modify any of the provisions of this Agreement
10. UNCONTROLLABLE FORCES
Neither Party shall be considered to be in default in the
performance of any of its obligations hereunder when failure of
performance shall be due to uncontrollable forces, other than
the obligation to make payment of any amounts due for Firm
Capacity made available and any Firm Energy delivered prior to
the occurrence of an uncontrollable force. The term
"uncontrollable forces" shall mean any event beyond the control
of the Party unable to perform such obligation including, but
not limited to, failure of or threat of failure of electric
facilities; flood, earthquake, storm, fire, lightning and other
natural catastrophes; epidemic, war, riot, civil disturbance or
disobedience; labor dispute, labor or material shortage;
sabotage; government priorities and restraint by court order or
public authority; and action or nonaction by, or failure to
obtain the necessary authorizations or approvals from any
governmental agency or authority, which by exercise of due
diligence such Party could not reasonably have been expected to
avoid and which, by exercise of due diligence, it shall be
unable to overcome. Nothing contained herein shall be construed
as to require either Party to settle any strike or labor dispute
in which it may be involved.
11. ASSIGNMENT OF AGREEMENT
This Agreement may be assigned by a Party without the prior
written consent of the other Party to (i) a wholly-owned
subsidiary or other affiliate in which the assigning Party has at
least a majority ownership interest or (ii) a successor by merger
or consolidation. In all other cases Agreement may not be
assigned without the prior written consent of the other Party.
12. NO DEDICATION OF FACILITIES
Any undertaking by one Party to the other under any provision of
this Agreement shall not constitute the dedication of ownership or
title 'm the system or any portion thereof of either Party to the
public or to the other Party, and it is understood and agreed that
any such undertaking by either Party shall cease upon the
termination of this Agreement
13. NOTICES
Any notice, demand or request provided for in this Agreement, or
served, given or made in connection with it, shall be in writing
and shall be deemed properly served, given or made if delivered in
person or sent by United States mail, postage prepaid, to the
persons specified below:
Texas-New Mexico Power Company c/o Assistant Vice
President - Resource Acquisition & Management P. 0.
Box 2943
Fort Worth, Texas 76113
Tucson Electric Power Company c/o Secretary
P. 0. Box 711
Tucson, Arizona 85702
-7-
A Party may at any time by written notice change the
designation or the address of the person so specified.
14. GOVERNING LAW
This Agreement shall be governed by and construed under the laws
of the State of Arizona or the federal laws of the United States,
as applicable.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the 20th day of December, 1994.
TEXAS-NEW MEXICO POWER COMPANY
By: Randy Ownby
Title: Assistant Vice President - Resource
Acquisition
TUCSON ELECTRIC POWER COMPANY
By: Steven J. Glaser
Title: Vice President
-8-
EXHIBIT A RATE SCHEDULE TUCSON-TNP
1996 FIRM CAPACITY & ENERGY SALE AGREEMENT
DEMAND CHARGES:
Rate
Year $/KW-Mo.
1996 3.50
ENERGY CHARGES:
Prescheduled
Month Year $/MWh
On-Peak Off-Peak
January 1996 $28.00 $20.00
February 1996 $28.00 $20.00
March 1996 $27.00 $20.00
April 1996 $27.00 $20.00
May 1996 $26.00 $20.00
June 1996 $29.00 $21.00
July 1996 $31.00 $23.00
August 1996 $31.00 $23.00
September 1996 $29.00 $21.00
October 1996 $26.00 $20.00
November 1996 $29.00 $20.00
December 1996 $29.00 $20.00
On-Peak hours are hours ending 0700-2200 MST, Monday through
Sunday. AR other hours are Off-Peak.