Exhibit 10.21.1
ELECTRICITY PURCHASE CONTRACT
This Electricity Purchase Contract, dated as of Jan.
18, 1988, is by and between E. I. DU PONT DE NEMOURS AND
COMPANY, a Delaware corporation with its principal office located
at 1007 Market Street, Wilmington, Delaware 19898 ("Du Pont"),
and O'BRIEN ENERGY SYSTEMS INC., a Delaware corporation with its
principal office located at 225 South Eighth Street,
Philadelphia, Pennsylvania 19106 ("O'BRIEN").
RECITALS
A. O'Brien and Du Pont entered a Steam Purchase
Contract (the "Steam Purchase Contract") on December 8, 1986, in
which O'Brien agreed to supply Du Pont with s team from a
cogeneration facility (the "Facility") which O'Brien will build
and operate on a site leased from Du Pont adjacent to Du Pont's
Parlin, New Jersey, Plant (the "Plant").
B. O'Brien and Du Pont now want to enter into an
electricity purchase contract in accordance with the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual
covenants and promises herein contained, Du Pont and O'Brien
agree as follows:
ARTICLE I. Definitions
A. Unless otherwise specified in this Contract, the
terms used herein shall have the same meanings as those used
in the Steam Purchase Contract. Where the word "steam" is used
in the definition in the Steam Purchase Contract, for purposes of
this Contract, the word "electricity" shall be understood unless
the context requires otherwise.
B. "JCP&L" shall mean Jersey Central Power & Light
Company.
ARTICLE II. Sale and Purchase of Electricity
A. Quantity:
O'Brien agrees to sell electricity to Du Pont for use
in Du Pont's Plant in quantities required by Du Pont up to a
maximum of 9MW and Du Pont agrees to buy its purchase
requirements for electricity up to 9MW in accordance with the
terms and conditions hereof for a twenty (20) year period
commencing with the Initial Delivery Date. If Du Pont should
require more than 9M, O'Brien will supply the additional
requirements on such terms and conditions as the parties shall
agree at the time, but under no circumstances will the price be
greater and the terms more stringent than those covering the
initial 9MW under this agreement.
B. Type and Character of Service:
The electrical energy furnished by O'Brien shall be of
the type known as t twenty four hundred (2400) volts, three (3)
phase, three (3)( wire, sixty (60) cycles, alternating current.
he variation of the voltage shall remain within plus or minus 5%
of 2400 volts.
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C. Description of the System:
All equipment (except the 2.4kv switchgear and feeders)
will be owned, operated and maintained by O'Brien. This
configuration and ownership is shown on the Functional Diagram to
Define Operation of Equipment attached as Exhibit A. O'Brien
will supply, design, install, and interconnect the 2.4kv
switchgear and feeders, which upon start-up will be conveyed to
Du Pont. Upon Du Pont's acceptance of O'Brien's conveyance of
the 2.4kv switchgear and feeders, Du Pont shall be responsible
for their operation and maintenance and shall indemnify O'Brien
against any liability or claims which may arise out of operation
thereafter of said equipment. O'Brien shall provide Du Pont with
any warranties obtained by O'Brien on such equipment upon
conveyance.
ARTICLE III. Term and Termination
The term and termination provisions of the Steam
Purchase Contract, as may be amended from time to time, shall be
applicable to this Contract.
ARTICLE IV. Purchase Price
o Du Pont shall pay O'Brien for purchased electricity as
follows:
EC = JCP&L rate x 0.65
Where:
EC == The Electricity Charge per ;month;
and
JCP&L rate = The applicable Jersey Central Power &
Light General Service Primary Rate at the
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then current delivered voltage or its applicable
successor, including all demand charges, energy
charges, fuel adjustments, taxes, and any other charges
that would have been paid to JCP&L if Du Pont had
purchased a comparable amount of power from JCP&L.
o In the event that Du Pont does not have any
requirement for electricity, the bill for that month,
or any such period, will be zero.
ARTICLE V. Construction and Operation of the Cogeneration
Facility.
A. O'Brien has agreed in the Steam Purchase Contract
to construct and operate the Facility to furnish steam to Du
Pont. In addition to the commitments made in that document,
O'Brien agrees to the further provisions in this Article V to
allow O'Brien to supply Du Pont with the electricity covered buy
this Electricity Purchase Agreement.
B. O'Brien agrees to construct the facility with a
capacity adequate to deliver at least 9MW of electricity to D
Pont on a continuous basis. To ensure this capacity, O'Brien
will install two Frame Six Combustion Turbine Combined Cycle
Systems, each of which is more than capable of meeting Du Pont's
projected demand.
C. In the event O'Brien fails to supply Du Pont's
electricity requirements for a period of six consecutive months
or, in the alternative, if O'Brien notifies Du Pont that it can
no longer meet such requirements, O'Brien will immediately make
available to du Pont for Du Pont's use all equipment necessary to
serve Du Pont from the 230kv system until Du Pont's service can
be returned to the 34.5kv system or Du Pont finds other electric
service acceptable to Du Pont.
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O'Brien shall obtain in its loan agreement any necessary waiver
from its lender to permit Du Pont to exercise the foregoing
option. Furthermore, the two 13.8kv to 2.4kv transformers shall
be installed in such a way that they can be replaced with 34.5kv
to 2.4kv transformers and reconnected to the existing JCP&L
34.5kv feeders. To the extent JCP&L requires Du Pont to pay for
this conversion, O'Brien agrees to contribute up to $ 500,000
toward the cost of such conversion and will secure such
obligation by establishing at the time the cogen facility starts
up either an escrow account or a letter of credit with a credit
worthy bank in the amount of $500,000.
ARTICLE VI. Interconnection with Du Pont's Plant
A. O'Brien shall provide at its expense all equipment
and systems necessary to supply electricity to Du Pont's Plant as
shown on Exhibit A. Upon completion of construction, O'Brien
will convey to Du Pont all of the equipment below the Point of
Interconnection as shown on Exhibit A. O'Brien will be
responsible for maintenance of all equipment and systems above
the Point of Interconnection, and Du Pont will be responsible for
maintenance of all equipment and systems below the Point of
Interconnection.,
B. The interconnection facilities shall be designed
to generally accepted engineering standards. Du Pont and
O'Brien agree to cooperate in determining appropriate and
compatible equipment specifications for interconnection
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facilities; provided, however, that notwithstanding anything to
the contrary herein, Du Pont shall not be responsible for any
damage to the Facility due to demand from Du Pont's systems.
O'Brien will give Du Pont at least forty-five days notice prior
to commencing operation and interconnection. Du Pont and
O'Brien shall develop written procedures for interconnection,
prior to interconnection. Du Pont shall have the right to
witness testing and start up of all interconnection facilities.
C. O'Brien shall at its expense, and in accordance
with Exhibit B, dismantle and remove, including transportation to
JCP&L's facilities for storage or disposal in accordance with
appropriate regulations, JCP&L's existing 34.5kv substations and
transmission lines, and the 2.4kv metering installations from the
Parlin Site.
D. The existing 34.5kv feeders supplying the Du Pont
plant shall be maintained in operation throughout the
construction of the Facility. Shutdowns during feeder
relocations should be limited to one feeder at a time and to a
maximum duration of twelve (12) hours for any one shutdown.
Switchover from the JCP&L a34.5 feeders to O'Brien's 13.8kv
feeders shall not be made until O'Brien's generating facility is
fully on line and has demonstrated for a sixty (60) day period a
100% ability to meet Du Pont's electric requirements.
ARTICLE VII. Service Interruptions
A. Subject to force majeure and normal maintenance
requirements, O'Brien agrees to provide a continuous supply
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of electricity to Du Pont at the quantities and characteristics
described in Article II hereof.
B. O'Brien agrees to consult with Du Pont on a
regular basis and to schedule, to the extent reasonably possible,
all routine maintenance of the electrical generating system to
coincide with periods when Du Pont's operations are shut down or
Du Pont's electricity needs are reduced.
C. If for any reason other than force majeure O'Brien
fails to provide Du Pont with the contract amounts of electricity
and replacement power is not received from JCP&L due to the fault
of O'Brien, O'Brien will reimburse Du Pont for its losses
incurred (including out-of-pocket cost, loss of product, raw
materials, direct labor and any damaged equipment) up to a
maximum of $10,000 per hour, but not to exceed $250,000 for any
one incident and furthermore not to exceed in any contract year
the total electricity revenues received from Du Pont in any such
year.
ARTICLE VIII. Priority of Service
If at any time O'Brien is unable to supply the contract
amounts of electricity to both Du Pont and to JCP&L, it shall
first supply Du Pont's needs up to the contractual amount before
supplying any other customer for its electricity.
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ARTICLE IX. Standby Power
A. O'Brien and Du Pont agree that Du Pont will enter
an agreement with JCP&L whereby JCP&L will sell standby power
directly to Du Pont, in accordance with a letter agreement from
JCP&L to Du Pont dated October 9, 1987, copy attached as
Exhibit B. This standby Power Agreement will be maintained by Du
Pont during the life of this agreement. O'Brien will compensate
Du Pont for the amount Du Pont pays JCP&L for the standby power,
that is, the flat charge per ;month whether power is used or not,
but Du Pont will pay for any power when used.
B. O'Brien guarantees that the bill paid by Du Pont
to JCP&L will be capped at the then current General Service
Primary Rate as defined in Article 4.
C. If at any time O'Brien's performance is such that
JCP&L, in accordance with its Standby Tariff in other applicable
rules, requires Du Pont to sign a firm power contract in order to
continue receiving power, Du Pont shall have the right to
terminate Du Pont's obligation to purchase electricity from
O'Brien, effective as of the same date that JCP&L requires Bu
Pont to sign a contract for the firm power. Such termination
shall not affect Du Pont's right or O'Brien's obligation to
continue the electrical interconnection parts of this contract,
and O'Brien will take all reasonable steps to assure
uninterrupted electrical service from JCP&L to Du Pont.
D. If JCP&L's tariffs or the rules of the New Jersey
Board of Public Utilities change so that Du Pont cannot
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receive the equivalent of firm power without signing a new
contract with JCP&L, Du Pont shall have the right to reduce
purchases from O'Brien to the e extent power is purchased from
JCP&L under such new contract.
ARTICLE X. Metering
A. O'Brien will own, operate, and maintain all
necessary meters and associated equipment, including, without
limitation, generation metering and the telemetering equipment,
utilized for measuring energy deliveries and for determining Du
Pont's payments to O'Brien. The metering point will be at the
Point as shown on Exhibit A. Du Pont can install
check meters at their expenses, if deemed necessary by Du Pont./
B. O`Brien shall permit Du Pont employees to enter
upon its leased premises at any reasonable time for the purpose
of inspecting and/or testing or witnessing the testing of the
accuracy of the metering equipment.
C. The owners of meters and metering equipment shall
inspect, test, and calibrate their equipment at regular intervals
of not more than one 91) year, as agreed between the parties, and
any inaccuracy disclosed by such tests shall be promptly
corrected. Either party shall have the right to have any meter
tested at any time at its expense. Representatives of the other
party shall be afforded a reasonable opportunity to be present at
all meter inspections and tests. If at any time a meter is found
inaccurate by more than 1%, an adjustment shall be made in
settlements between the parties to
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compensate for the effect of such inaccuracy over a preceding
period of thirty (30) days from removal or testing of the meter
or over any shorter period during which such inaccuracy may be
determined to have existed. If at any time a meter should fail
to register or its registration should be so erratic as to be
meaningless, the quantities such meter was intended to record
shall be determined from check meters, if available, or otherwise
from the best obtainable data.
ARTICLE XI. Billings, Credits and Payments
On or immediately after Du Pont's monthly closing data
(which shall be supplied O'Brien by Du Pont at the beginning of
the year) O'Brien will prepare a monthly bill and bill Du Pont
for the electricity purchased by Du Pont during the previous
month. Each invoice will include all necessary information for
calculation of the payment pursuant to Article IV hereof, and
credit Du Pont each month for an amount equal to the contracted
power times the standby rate plus any applicable taxes. Payment
for such invoices shall be made by Du Pont within thirty (30)
days after receipt. Payments made thereafter shall be subject to
a late payment charge on the unpaid amount of such invoice of one
percent per month. Should DuPont fail to pay any invoice within
thirty (30) days after receipt, O'Brien, in addition to
collecting the interest set out herein, may pursue any available
remedy at law or in equity.
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ARTICLE XII. Other Provisions
The following Provisions of the Steam Purchase Contract
are hereby incorporated by reference into this Contract and shall
be applicable to this Contract as if they were fully set forth
herein:
Article 7. Force Majeure; Contingency]
Article 12. Assignment and Subcontracting
Article 13. Preconditions to Performance
Article 14. Remedies
Article 15. Compliance with Laws, Rules and
Regulations
Article 16. Indemnification
Article 17. Insurance
Article 18. Amendments; Waiver
Article 19. Severability
Article 20. Governing Law
Article 21. Notices
IN WITNESS WHEREOF, Du Pont and O'Brien have caused
this Agreement to be executed by their duly authorized
representatives on the date and year first above written.
E. I. DU PONT DE NEMOURS AND COMPANY
By /s/ W. Datum
Title: Senior Vice President - Materials and Logistics
O'BRIEN ENERGY SYSTEMS, INC.
By: /S/ Jeffrey Baines
Title: Executive Vice President
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EXHIBIT A
FUNCTIONAL DIAGRAM TO DEFINE EQUIPMENT OPERATION
[DIAGRAM INSERT]