Exhibit 10.47
Information contained herein, marked with [***], is being filed pursuant to a
request for confidential treatment.
POWER PURCHASE CONTRACT
BETWEEN
CHENGDU HUAXI ELECTRIC POWER SHAREHOLDING (GROUP) COMPANY LTD.
AND
CHENGDU AES KAIHUA GAS TURBINE
POWER CO., LTD.
TABLE OF CONTENTS
ARTICLE 1. GENERAL PRINCIPLES...........................................
ARTICLE 2. DEFINITIONS..................................................
2.01 Definitions..................................................
ARTICLE 3. PARTIES TO THE CONTRACT......................................
3.01 The Parties..................................................
3.02 Mutual Representations and Warranties........................
ARTICLE 4. RIGHTS AND OBLIGATIONS OF THE PARTIES........................
4.01 Rights and Obligations of the Seller.........................
4.02 Rights and Obligations of the Purchaser......................
ARTICLE 5. POWER STATION OPERATION AND DISPATCH.........................
5.01 Power Station Operation and Maintenance......................
ARTICLE 6. MEASUREMENT OF ELECTRICAL ENERGY.............................
6.01 Installation and Maintenance of Meters.......................
6.02 Measurement of Electrical Energy.............................
ARTICLE 7. PRICING......................................................
ARTICLE 8. PAYMENT CALCULATIONS.........................................
8.01 Payment for Annual Minimum Quantity Energy...................
8.02 Payment for Failure to take the Annual Minimum Quantity......
8.03 Payment for Additional Sales.................................
8.04 Failure to Accept Electrical Energy..........................
8.05 Electricity Fee Payments.....................................
ARTICLE 9. TERM AND TERMINATION.........................................
9.01 Term.........................................................
9.02 Defaults and Termination.....................................
ARTICLE 10. INDEMNIFICATION..............................................
10.01 Indemnification..............................................
ARTICLE 11. GOVERNING LAW AND DISPUTE RESOLUTION.........................
11.01 Governing Law................................................
11.02 Change of Law................................................
11.03 Friendly Consultations.......................................
11.04 Arbitration..................................................
11.05 Continuing Rights and Obligations............................
11.06 Enforcement of Award.........................................
11.07 Waiver of Sovereign Immunity Defense.........................
ARTICLE 12. FORCE MAJEURE................................................
12.01 Definition of Force Majeure..................................
12.02 Parties' Obligations Upon Occurrence of Force Majeure........
12.03 Notification Requirement ....................................
12.04 Change of Circumstances......................................
ARTICLE 13. ASSIGNMENT...................................................
13.01 Assignment...................................................
ARTICLE 14. MISCELLANEOUS PROVISIONS.....................................
14.01 Notices......................................................
14.02 Binding Effect...............................................
14.03 Language.....................................................
14.04 Confidentiality..............................................
14.05 Severability.................................................
14.06 Entire Contract..............................................
14.07 Effectiveness................................................
14.08 Insurance....................................................
APPENDIX A.
INTERCONNECTION AND DISPATCH CONTRACT
APPENDIX B.
METERING POINT AND POINT OF DELIVERY
APPENDIX C.
TERMINATION CHARGE
APPENDIX D.
THE ELECTRIC TARIFF ADJUSTMENT METHOD FOR CHENGDU AES KAIHUA GAS
TURBINE POWER CO., LTD.
ARTICLE 1. GENERAL PRINCIPLES
This Power Purchase Contract (including all Appendices attached hereto, ("the
Contract") is made in Chengdu, Sichuan Province, the People's Republic of China
on this ____th day of July, 1996 by and between Chengdu Huaxi Electric Power
Shareholding (Group) Company Ltd. [Chinese Characters] (hereinafter referred to
as the "Purchaser") and Chengdu AES KAIHUA Gas Turbine Power Co., Ltd. [Chinese
Characters] (hereinafter referred to as the "Seller"). Each of Purchaser and
Seller may hereinafter individually be referred to as a "Party" and collectively
as the "Parties."
After friendly consultations conducted in accordance with the laws and
regulations of the People's Republic of China and on the basis of the principles
of equality and mutual benefit, the Parties agree as follows:
ARTICLE 2. DEFINITIONS
2.01 Definitions
For purposes of this Contract, the capitalized items set forth below
will have the following corresponding meanings:
(a) "Acceptable Power Factor" means that for any month, the
average power factor for the Power Station shall be between
0.8 and 0.85;
(b) "Annual Energy Payment" has the meaning set forth in Article
8.02 hereof;
(c) "Annual Minimum Quantity" or "AMQ" has the meaning given it in
the Electric Tariff Adjustment Method;
(d) "Capital Return" has the meaning given to it in Schedule 1
which is attached to the Electric Tariff Adjustment Method;
(e) "Change of Law" means any change in any national, provincial,
prefectural, municipal or other local law, rule, regulation or
policy in the People's Republic of China, relating to taxes,
environmental issues or other matters concerning the
production, delivery, or sale of electrical energy, or any
change in any interpretation thereof that was relied upon by
the Seller in entering into this Contract;
(f) "Commencement of Operations Date" means the date on which the
Power Station goes into commercial operation as more fully
described in Article 4.01(h) hereof;
(g) "Current Tariff" shall have the meaning given it in the
Electric Tariff Adjustment Method;
(h) "Declared Capacity" means the Net Station Capacity which is
declared by the Seller in a written notice to the Purchaser on
the Commencement of Operations Date and on or before the first
day of each calendar year thereafter, as being the applicable
Net Station Capacity in effect until the next such notice is
given;
(i) "Dispatch Provisions" means the procedures to be followed by
the Grid, the Purchaser and the Seller, for the scheduling and
control of the delivery of electrical energy as more fully
detailed in the Interconnection and Dispatch Contract;
(j) "Dispatch Center" means the Sichuan Power Dispatch Bureau
located in Chengdu City, Sichuan Province, People's Republic
of China, and any successor thereof;
(k) "Electric Tariff Adjustment Method" means the Electric Tariff
Adjustment Method entered into between the Purchaser and the
Seller which is attached as Appendix D hereto, and approved by
the Price Bureau, that defines the Current Tariff to be paid
by the Purchaser to the Seller, and subsequent adjustments to
the Current Tariff;
(l) "Electricity Fee" means the amount to be paid by the Purchaser
to the Seller pursuant to Article 8.05(b) hereof;
(m) "EPC Contractor" means the company or group of companies that
is responsible for the design, engineering, procurement,
construction, startup and testing of the Power Station;
(n) "EPC Contract" means the Construction Services Contract
between the Seller and the EPC Contractor for the design,
engineering, procurement, construction, start-up and testing
of the Power Station;
(o) "Force Majeure" has the meaning given to it in Article 12.01
hereof;
(p) "Fuel Contract" means the Gas Purchase and Supply Contract for
the purchase and transportation of fuel to the Power Station
between the Seller and the Fuel Supplier, as such contract may
be amended from time to time;
(q) "Fuel Supplier" means the Chengdu Huachuan Petroleum & Natural
Gas Exploration and Development Company;
(r) "Gas Interconnection Facility" has the meaning given to it in
the Fuel Contract;
(s) "Grid" means Sichuan Provincial Power Bureau, the owner and
operator of the electric transmission system to which the
Power Station will be connected;
(t) "Interconnection Approval" means the approval received by the
Seller from the Grid establishing the right of the Seller to
connect to the electric transmission system of the Grid;
(u) "Interconnection Fee" means the fee, associated with the
Transmission Facilities, paid to the Chengdu City Power Supply
Bureau for the Seller's right to connect the Power Station to
the Grid;
(v) "Interconnection and Dispatch Contract" means the contracts
for the interconnection and dispatch of the Power Station
attached as Appendix A hereto, as amended or supplemented;
(w) "Joint Venture Contract" means the cooperative joint venture
contract dated as of November 28, 1995, entered into among
Chengdu Huaxi Electric Power Shareholding (Group) Company
Ltd., China National Aero-Engine Corporation and AES China
Generating Company Limited for the establishment of the
Seller, as such cooperative joint venture contract may be
amended or supplemented from time to time;
(x) "KW" means kilowatt;
(y) "KWH" means kilowatt hours;
(z) "MW" means megawatt;
(aa) "MWH" means megawatt hours;
(ab) "Metering Point" means the location of the Purchaser's meters
and the Seller's meters as described in Appendix B attached
hereto;
(ac) "Net Station Capacity" means the total generation capacity in
MW of the Power Station as measured at the Point of Delivery
after deduction for parasitic load;
(ad) "Point of Delivery" means the physical point of
interconnection between the Power Station and the Transmission
Facilities at which the Purchaser takes delivery of the
electrical energy from the Seller and where the Seller's
equipment maintenance responsibility ends and the Grid's
responsibility starts as more fully described in the diagram
set forth in Appendix B attached hereto. Risk of loss of
electrical energy shall pass from the Seller to the Purchaser
at the Point of Delivery;
(ae) "Power Factor Penalty" means the penalty imposed on the
Seller, per KWH, for failure to achieve the Acceptable Power
Factor in any given month as calculated in accordance with the
Document of the Ministry of Hydro Power and Electricity - 1982
No. 21;
(af) "Power Station" shall mean the simple cycle, approximately 50
MW (at Site conditions and net of parasitic load) electric
generating power plant, consisting of a gas turbine generator
set, to be constructed on and operated at the Site and owned
by the Seller, including, without limitation, the Site, all
machinery, equipment, installations, warehouses, fuel pumps,
pipes and pipelines, control facilities, shops, buildings,
meters and interconnection equipment and substation at the
Site, required to construct and/or operate the Power Station
in a manner which allows Seller to comply fully with its
obligations under this Contract;
(ag) "PRC Government Authority" means any ministry, agency, bureau,
department, political subdivision, corporation, commission,
instrumentality or other government authority under the direct
or indirect control of any central, provincial or local
government of the People's Republic of China;
(ah) "Price Bureau" means the Chengdu City and/or the Sichuan
Provincial price control bureaus and any other PRC Government
Authority required to provide an approval for the Current
Tariff or Electric Tariff Adjustment Method;
(ai) "Prudent Electrical Practices" means those generally accepted
standards, as may be changed from time to time, that are
commonly adhered to by owners and operators of electric
generating power stations to design, engineer, construct,
operate, maintain and test electric equipment within the
constraints of safety, efficiency, economy, reliability, and
equipment manufacturer's recommendations;
(aj) "Transmission Facilities" means the Interconnection Fee and
the transmission facilities to be designed, purchased,
constructed and erected by the Grid required to connect the
Power Station from the Point of Delivery to the Grid's
existing electrical system in order to permit the flow of
electrical energy between them;
(ak) "RMB" or "Renminbi" means the lawful currency of the People's
Republic of China;
(al) "Site" means the real property located at Chengdu City,
Sichuan Province, People's Republic of China as described in
Appendix 1 of the Joint Venture Contract upon which the Power
Station is located;
(am) "Term" means the term of this Contract as defined in Article 9
hereof;
(an) "USD" or "US$" means the lawful currency of the United States
of America.
ARTICLE 3. PARTIES TO THE CONTRACT
3.01 The Parties
The Parties to this Contract are:
(a) Purchaser, Chengdu Huaxi Electric Power Shareholding (Group)
Company Ltd., registered in Chengdu City, Sichuan Province,
the People's Republic of China with its legal address at No.
24 Nan San Duan Y. Huan Road, Chengdu, Sichuan Province,
People's Republic of China.
Legal Representative of Purchaser:
Name: Qu Delin
Position: General Manager
Nationality: Chinese
(b) Seller, Chengdu AES KAIHUA Gas Turbine Power Co., Ltd.,
registered in Chengdu City, Sichuan Province, the People's
Republic of China with its legal address in the Enterprise
Development Zone, Jintang County, Sichuan Province, People's
Republic of China.
Legal Representative of Seller:
Name: Qu Delin
Position: Chairman of the Board
Nationality: People's Republic of China
3.02 Mutual Representations and Warranties
Purchaser and Seller each represent and warrant the following:
(a) Each Party possesses full power and authority and the legal
right to enter this Contract and to perform its obligations
herein; and
(b) The representative of each Party whose signature is affixed
hereto has been fully authorized to sign this Contract and to
bind its respective Party thereby.
ARTICLE 4. RIGHTS AND OBLIGATIONS OF THE PARTIES
4.01 Rights and Obligations of the Seller
(a) Sale and Delivery of electrical energy during start up and
testing: Prior to the Commencement of Operations Date of the
Power Station, the Seller agrees to deliver electrical energy
generated during the start up and testing of the Power Station
to the Purchaser.
(b) Sale and Delivery of electrical energy: Beginning from the
Commencement of Operations Date of the Power Station, Seller
agrees to deliver and sell at the Point of Delivery to
Purchaser all electrical energy generated by the Power
Station, in accordance with the terms of this Contract and its
Appendices attached hereto. Seller agrees to deliver such
electrical energy in accordance with the Dispatch Provisions
attached hereto as Appendix A. Delivery of such electrical
energy will be subject to planned outages and unplanned
outages as further described in Article 5 and the
Interconnection and Dispatch Contract, and subject to events
of Force Majeure as more fully described in Article 12.01 of
this Contract.
(c) Exclusivity: Seller may not sell any electrical energy from
the Power Station to anyone other than the Purchaser.
(d) Design and Construction of the Power Station: Seller is
responsible for the development, design, and construction of
the Power Station. Seller will keep Purchaser reasonably
informed while performing its obligations as described herein.
Upon the commencement of construction of the Power Station,
Seller shall deliver to the Purchaser, a construction schedule
detailing the planned construction progress and specifying the
expected date of the start of testing of the Power Station.
(e) Installation of Seller's Meters: Seller is responsible for
installing and maintaining all Seller's meters as required by
this Contract and as more fully described in Article 6.
(f) Fuel: Seller is responsible for the fuel supply to the Power
Station.
(g) Operation and Maintenance of the Power Station: Seller is
responsible for the management, operation, maintenance and
repair of the Power Station.
(h) Commencement of Operations Date: Seller is responsible for
start-up and testing of the Power Station. Seller will notify
Purchaser in writing upon completion of testing of the Power
Station in accordance with the EPC Contract between the Seller
and the EPC Contractor. The date set forth in the Seller's
notification to the Purchaser shall be the Commencement of
Operations Date of the Power Station.
(i) Power Factor: Seller shall operate the Power Station so that
the Acceptable Power Factor is achieved. Seller shall be
liable for the Power Factor Penalty for a failure to achieve
the Acceptable Power Factor.
4.02 Rights and Obligations of the Purchaser
(a) Purchase and Acceptance of electrical energy: Beginning on the
Commencement of Operations Date for the Power Station,
Purchaser will purchase and accept from Seller, at the Point
of Delivery, all electrical energy generated by the Power
Station and delivered to Purchaser in accordance with the
Dispatch Provisions, this Contract, and the Appendices
attached hereto. Such purchase and acceptance of electrical
energy will also be subject to planned outages and unplanned
outages as more fully described in Article 5 of this Contract
and the Interconnection and Dispatch Contract, and will be
subject to events of Force Majeure as more fully described
Article 12.01 of this Contract. To the extent electrical
energy is generated for start-up and testing purposes prior to
the Commencement of Operations Date for the Power Station,
Purchaser agrees, at all times, except during a Grid
emergency, to accept all such electrical energy at the Point
of Delivery and to pay the Seller seventy percent (70%) of the
Current Tariff per KWH for such electrical energy. During
start-up and testing Purchaser shall allow Seller to operate
the Power Station as necessary to complete plant testing in
accordance with the EPC Contract.
(b) Pricing Approval: Purchaser is responsible for causing all
approvals necessary in connection with the pricing of
electrical energy made available to the Purchaser hereunder to
be received by the Seller from the appropriate level Price
Bureau, and from any other relevant PRC Government Authority.
Such approvals will include the approval of the Electric
Tariff Adjustment Method, the initial Current Tariff and the
principles which will define all future price increases in the
Current Tariff due to higher fuel costs, increased operating
and maintenance costs, changes in the RMB to USD exchange
rates which may affect payments of debt service or profit
repatriation or due to any Change of Law which might adversely
effect the financial return to the Seller. The obligations in
this Article 4.02(b) must be satisfied as a condition to the
obligations of the Seller continuing under this Contract.
(c) Installation of Purchaser's Meters: Purchaser is responsible
for installing and maintaining all Purchaser's meters as
required by this Contract and as more fully described in
Article 6.
(d) Other Government Approvals: Purchaser is responsible for
obtaining the appropriate approvals from all PRC Government
Authority concerning the Purchaser's obligations under this
Contract. Purchaser will assist Seller in obtaining all
permits and licenses as are necessary to proceed with
construction and operation of the Power Station. Purchaser
will cause the Interconnection Approval and all approvals
required by Seller for the Fuel Contract to be received by the
Seller. The obligations in this Article 4.02(d) must be
satisfied as a condition to the obligations of the Seller
continuing under this Contract.
(e) Provision of Construction Electricity: Purchaser is
responsible for supplying, or causing others to provide, the
Seller and the Seller's EPC Contractor a continuous and
uninterrupted supply of electrical energy to the construction
site during construction of the Power Station. For this
service, Seller and EPC Contractor shall not be obligated to
pay more than the tariff paid for such service by other
similarly situated general industrial users of such services.
All rights, title and interest in any equipment put into
service by the Purchaser to meet the obligations of this
Article 4.02(e) shall be transferred to the Seller upon the
Purchaser's receipt of the payment made in accordance with
Article 4.02(i) hereof.
(f) Provision of Standby Electrical Energy and Utilities:
Purchaser is responsible for supplying, or causing others to
provide, a continuous and uninterrupted supply of standby
electrical energy to the Power Station for the Term of this
Contract. Such standby electrical energy shall be sufficient
for testing and start up of the Power Station and for
providing basic station service for the Power Station during
times when the Power Station cannot supply its own energy. For
this service, Seller and EPC Contractor shall not be obligated
to pay more than the tariff paid for such service by other
similarly situated general industrial users of such services.
(g) Provision of Other Utilities: Purchaser shall cause to be
provided to Seller, at Seller's expense, all utilities,
(including, without limitation, telecommunication, fresh
water, waste disposal) and access to the Site which the Seller
requires in order to construct the Power Station in accordance
with the EPC Contract and to operate the Power Station in the
manner contemplated by this Contract, as fired by the fuel
supplied under the Fuel Contract, subject only to the Seller
paying the established, applicable customary rate or charge
for the utilities provided to Seller pursuant to this Article
4.02(g) as paid for by other similarly situated users of such
utilities.
(h) Interconnection: Purchaser is responsible for providing, or if
it is unable to provide, causing others to provide, (i) the
Transmission Facilities necessary to connect the Power Station
to the Grid and (ii) the Gas Interconnection Facility
necessary to provide natural gas to the Power Station.
Purchaser guarantees that (i) the Transmission Facilities will
be ready and available and capable of supplying electrical
energy to the Power Station and accepting the electrical
energy generated by the Power Station and (ii) the Gas
Interconnection Facility will be ready and available to
deliver natural gas to the Power Station prior to the
scheduled start of testing of the Power Station under the EPC
Contract. In the event the Purchaser fails to fulfill its
obligations as provided for in this Article 4.02(h), the
Commencement of Operations Date for the Power Station shall,
notwithstanding such failure, be deemed to have occurred upon
notice by the Seller to the Purchaser that the Power Station
is ready to commence sales of electrical energy hereunder, and
thereafter the Purchaser shall pay to the Seller, commencing
on the date of such notice, the Annual Energy Payment.
(i) In consideration of the Purchaser arranging for the provision
of electricity in accordance with Article 4.02(e) and Article
4.02(f) hereof, utilities in accordance with Article 4.02 (g),
and the Transmission Facilities in accordance with Article
4.02 (h), Seller shall make a one time payment to Purchaser of
fourteen million Renminbi (RMB 14 million) no later than
thirty (30) days following the initial contribution to the
registered capital of the Seller and Seller shall also pay
such reasonable costs, as shall be agreed to by Seller, of the
electric transformer and associated facilities as agreed by
the Seller, required for the supply of electricity to the
Power Station.
ARTICLE 5. POWER STATION OPERATION AND DISPATCH
5.01 Power Station Operation and Maintenance
(a) Planned Outages: The Parties agree and understand that in
order to undertake necessary overhaul, maintenance, inspection
and repair of the Power Station, the Seller is entitled to
completely shutdown or partially reduce the output of the
Power Station for periods of time. The Seller shall coordinate
the schedule of planned outages with Purchaser and the
Dispatch Center in accordance with the Interconnection and
Dispatch Contract. Seller shall provide, in November of each
year, to the Purchaser, a copy of the planned outage schedule
for the following year.
(b) Unplanned Outages: The Parties agree and understand that in
the course of operating the Power Station unscheduled outages
and emergencies may occur and that the Seller shall be
entitled to completely shutdown or partially reduce the output
of the Power Station for periods of time during such events.
Seller will use reasonable efforts to notify Purchaser of any
unscheduled outages, emergencies or other reductions in output
of the Power Station in accordance with the Interconnection
and Dispatch Contract.
ARTICLE 6. MEASUREMENT OF ELECTRICAL ENERGY
6.01 Installation and Maintenance of Meters
(a) Installation: Seller and Purchaser will each install one meter
at the Metering Point. Both the Seller's meter and the
Purchaser's meter shall be capable of measuring the Power
Station output in appropriate units at one (1) minute
intervals.
(b) Testing and Calibration: The Parties shall test the metering
equipment as needed, but no less than twice per year. If the
difference between the measurement by the Seller's meter and
the Purchaser's meter is more than plus or minus two-tenths
(0.2) of one (1%) percent, the Parties shall perform
calibration maintenance on the metering equipment. When
calibrating the metering equipment, voltage transformers, and
current transformers, the Parties shall achieve an accuracy
level no lower than specified in the following standards:
(i) Active Power Metering System - IEC 687 -1980 (Class
0.25)
(ii) Voltage Transformer - IEC (Class 0.2)
(iii) Current Transformer -IEC (Class 0.2)
A Party will be notified in advance by the other Party of any
calibration maintenance intended to be undertaken by the other
Party and will be permitted to attend all testing and
calibration.
6.02 Measurement of Electrical Energy
(a) All measurement of electrical energy delivered by Seller to
Purchaser under this Contract will be made at the Metering
Point by suitable kilowatt hour meters.
(b) In any month, if the number of KWHs measured by the
Purchaser's meter is different from the number of KWHs
measured by the Seller's meter by more than plus or minus
two-tenths (.2) of one (1%) percent, the meters shall be
recalibrated as described in Article 6.01 (b) and the
measurement of electrical energy used for the purpose of
submitting an invoice to the Purchaser shall be calculated as
described in Article 6.02(d) below.
(c) Subject to 6.02(b) above, the measurement of electrical energy
used for the purpose of submitting an invoice to the Purchaser
shall be the Purchaser's meter.
(d) In the event of a difference in the measured KWHs as described
in Article 6.01(b) above, the measured KWHs from the more
accurate meter, as determined by the testing described in
Article 6.01 (b) above, shall be used for the purpose of
submitting an invoice to the Purchaser.
ARTICLE 7. PRICING
The Parties agree that the price for electrical energy
delivered in accordance with this Contract shall be based on
and in accordance with Article 8 hereof and the Electric
Tariff Adjustment Method attached as Appendix D hereto.
ARTICLE 8. PAYMENT CALCULATIONS
8.01 Payment for Annual Minimum Quantity Energy
In each calendar year, all electrical energy delivered, in
accordance with instructions from the Dispatch Center, by the
Seller to the Purchaser shall be considered part of the Annual
Minimum Quantity until the sum of the delivered electrical
energy equals the Annual Minimum Quantity. For all electrical
energy delivered by the Seller to the Purchaser under this
Contract, the Purchaser agrees to pay the Seller, a fee
calculated as follows:
[***]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
8.02 Payment for Failure to take the Annual Minimum Quantity
The Purchaser shall be obligated to purchase the Annual
Minimum Quantity. If (i) the Purchaser or the Grid fails for
any reason to accept the electrical energy made available by
the Seller or (ii) the Dispatch Center fails in any calendar
year to dispatch the Power Station to meet the Purchaser's
obligation to purchase the Annual Minimum Quantity, and as a
consequence, the annual quantity of electrical energy
delivered to the Point of Delivery is less than the Annual
Minimum Quantity, the Purchaser agrees to pay the Seller a fee
which shall be based on the difference between the actual
electrical energy delivered in the calendar year and the
Annual Minimum Quantity. The fee payable by Purchaser under
this Article 8.02 shall be invoiced by Seller to Purchaser in
January of each year. Such fee shall be calculated as follows:
[***]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
8.03 Payment for Additional Sales
Seller shall make available as much additional electrical
energy, above the Annual Minimum Quantity, to the Purchaser as
is consistent with Prudent Electrical Practices, the technical
limits of the Power Station, the safe and prudent operation of
the Power Station and the Dispatch Provisions. The Purchaser
agrees to purchase, in accordance with the Dispatch
Provisions, all the additional electrical energy, above the
Annual Minimum Quantity, made available by the Seller
calculated as follows:
[***]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
8.04 Failure to Accept Electrical Energy
Beginning on the Commencement of Operations Date, during any
month in which the Power Station is available to deliver
electrical energy for more than [***] hours, if the Purchaser
fails at any time and for any reason to accept [***] MWH of
electrical energy from the Power Station in such month, the
Purchaser shall pay the Seller in each such month a fee
calculated as follows:
[***]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
In the event that the sum of the electrical energy, delivered
by the Seller in a calendar year and paid for by the Purchaser
in accordance with Article 8.01 hereof, is greater than the
Annual Minimum Quantity, the Seller shall repay to the
Purchaser, all payments made to the Seller under this Article
8.04 in the month of January following the end of such
calendar year, plus interest accrued at the rate of [***]
per day on such amount.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
8.05 Electricity Fee Payments
(a) On 26th, 27th or 28th day of each calendar month, the Seller
shall read the electric meters in accordance with Article 6
hereof and calculate the amount due from Purchaser for
electric energy made available in accordance with Article 8.01
hereof. The Purchaser shall have the right to witness the
reading of the meters by the Seller.
(b) Invoices: On the fifth day of each calendar month, Seller will
deliver an invoice to the Purchaser detailing the total
payment due from Purchaser pursuant to Article 8.01, Article
8.02, Article 8.03 and Article 8.04 hereof (collectively the
"Electricity Fee").
(c) Disputes: Should there be a dispute concerning invoiced
amounts of the Electricity Fee, Purchaser agrees to remit the
full amount of the invoice. Upon resolution of the dispute,
any sum to be refunded to Purchaser will be paid together with
interest at a rate of [***] percent per day. Interest will
accrue from the date Purchaser paid the invoice until the date
on which the amount is refunded to the Purchaser.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
(d) Payment: Subject to the terms of this Contract, Purchaser will
pay to Seller each amount shown on invoices submitted by
Seller. Such payments made by Purchaser will be made before
the twentieth (20th) day of each calendar month without any
withholding or deduction. All payments by the Purchaser to
Seller hereunder, shall be made free and clear of all taxes,
charges, duties, and any other governmental extractions
imposed on the Purchaser.
(e) Delinquent Payments: If any amount payable of the Electricity
Fee is not paid on or before the specified due date, the
delinquent amount shall accrue interest at a rate of [***]
percent per day, until the date on which such delinquent
amount and the accrued interest thereof is received by Seller.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
ARTICLE 9. TERM AND TERMINATION
9.01 Term
This Contract shall have a term (the "Term") commencing on the
date this Contract is executed and delivered by the Parties
hereto and expiring on the fifteenth (15) anniversary of the
Commencement of Operations Date, unless terminated earlier in
accordance with the provisions of this Contract. If the Power
Station is able to generate electrical energy, but through the
fault of the Purchaser or an event of Force Majeure, is unable
to deliver the electrical energy or must reduce the delivery
of the electrical energy, for an aggregate of thirty (30) days
in any one calendar year during the term of the Contract, this
Contract shall be extended for a period equal to the period of
such reduction or suspension of service.
9.02 Defaults and Termination
(a) Seller's Defaults: Any of the following events shall be a
default by Seller under this Contract unless such event
occurred as a result of Purchaser's breach of its obligations
hereunder:
(i) Seller becomes bankrupt or insolvent and such
circumstances continue unremedied for ninety (90)
days;
(ii) Seller abandons the Power Station for a period of six
(6) months;
(iii) Seller inexcusably fails to generate and deliver
electrical energy to Purchaser for a period of one
hundred twenty (120) consecutive days; provided
however, the Seller shall not be in default if such
failure on the part of Seller is due to Purchaser's
or the Grid's failure to accept electrical energy or
is due to the failure of the Dispatch Center to
dispatch the Power Station in accordance with the
Interconnection and Dispatch Contract, or is due to
the failure of the Fuel Supplier to deliver fuel to
the Power Station in accordance with the Fuel
Contract, or is due to an insurable event or an event
of Force Majeure; or
(iv) Seller materially breaches any other material
obligation under this Contract and such circumstances
continue unremedied for a period of one hundred
eighty (180) days.
(b) Purchaser's Defaults: Any of the following events shall be a
default by the Purchaser under this Contract unless such event
occurred as a result of Seller's breach of its obligations
hereunder:
(i) Except in the event that the Seller has failed to pay
any taxes or fees due and payable, any PRC Government
Authority (including, without limitation any Price
Bureau) either (A) revokes or substantially alters
any license, permit, or approval previously issued to
the Seller or (B) fails to approve the Current Tariff
or fails to approve any adjustment in the Current
Tariff required to be made hereunder or in accordance
with the Electric Tariff Adjustment Method;
(ii) an event of default of the Fuel Supplier under
Article 11.2 of the Fuel Contract occurs;
(iii) Purchaser is dissolved or reorganized pursuant to
law; provided however, the Purchaser shall not be in
default if the newly formed organization expressly
assumes Purchaser's obligations described herein, the
provisions of Article 13.01 are satisfied, and the
financial condition of such newly formed organization
is fully acceptable and satisfactory to Seller;
(iv) Purchaser fails to make a payment in accordance with
this Contract and such non-payment continues for a
period of thirty (30) days following its due date;
provided that the Seller shall have the right to
suspend delivery of electrical energy to the
Purchaser after ten (10) days of such non-payment;
(v) Purchaser materially breaches any other material
obligation under this Contract and such circumstances
continue unremedied for one hundred eighty (180)
days; or
(vi) a breach by the Dispatch Center of the
Interconnection and Dispatch Contract.
(c) Procedures for Termination: Following the occurrence of one of
the defaults described in Section 9.02 above, the
non-defaulting Party may elect to terminate this Contract as
follows:
(i) The Party exercising its right to terminate the
Contract will notify the defaulting Party of its
intent to terminate. Such notice will specify the
default or breach in reasonable detail.
(ii) Upon receipt of the termination notice, the Party
charged with defaulting under this Contract shall
have ninety (90) days, or ten (10) days in the event
of failure to make any payment in accordance with
this Contract, to cure, mitigate or resolve the
default. If the Party charged with breaching the
Contract has failed to cure, mitigate or resolve such
default within the prescribed cure period, the Party
exercising its right to terminate this Contract shall
have the right to serve final notice of termination
to the defaulting Party.
(d) Termination Charge: In the event that this Contract is
terminated prior to the end of the Term, the following shall
apply:
(i) If the Seller abandons the Power Station prior to the
Commencement of Operations Date of the Power Station,
then no termination charge shall be paid.
(ii) If Seller terminates this Contract on account of the
default described in Article 9.02(b)(ii) and receives
full payment of the termination charge set forth in
Appendix C of the Fuel Contract from the Fuel
Supplier, then no additional termination charge shall
be payable by the Purchaser. In any such case, all
rights, title and ownership of the Power Station
shall be transferred as provided for under the Fuel
Contract and the Seller shall have no further
obligation to the Purchaser under this Contract.
(iii) In all other cases, (including termination by the
Purchaser pursuant to Article 9.02(a) above) the
Purchaser agrees to pay the Seller a termination
charge as calculated in Appendix C which is attached
hereto within thirty (30) days of receipt of the
final notice of termination described in Article
9.02(c)(ii). Upon full payment of the termination
charge, all rights, title, and ownership of the Power
Station shall be transferred by the Seller to the
Purchaser and the Seller shall have no further
obligation to the Purchaser under this Contract.
(e) Remedies upon Termination: The Party exercising its right to
terminate this Contract may pursue other remedies available to
it at law or equity or otherwise. The provisions contained in
this Article 9.02 (d) and Article 9.02 (e) shall survive the
termination of this Contract.
ARTICLE 10. INDEMNIFICATION
10.01 Indemnification
Seller and Purchaser hereby agree to indemnify and hold each
other, and their respective agents, employees, and
representatives harmless, with respect to loss or damage to
persons or property arising from the gross negligence,
inexcusable failure to act, bad faith, or willful misconduct
in connection with such Party's performance under this
Contract.
ARTICLE 11. GOVERNING LAW AND DISPUTE RESOLUTION
11.01 Governing Law
The validity, interpretation and implementation of this
Contract will be in accordance with the laws of the People's
Republic of China where such laws are published and publicly
available. In the event there is no published and publicly
available law in the People's Republic of China governing a
particular matter under this Contract, reference will be made
to general international commercial practices.
11.02 Change of Law
Purchaser agrees to indemnify and hold Seller harmless for any
financial impact on Seller's rights or obligations under this
Contract attributable to a Change of Law. In the event a
Change of Law adversely affects Seller's expected financial
benefit under this Contract, the Purchaser agrees to
compensate Seller by adjusting the Current Tariff as set forth
in the Electric Tariff Adjustment Method.
11.03 Friendly Consultations
In the event of any dispute, controversy, or claim arising out
of or relating to this Contract, or the breach, termination or
invalidity thereof, the disputing Party shall provide written
notice thereof to the other Party. The Parties shall attempt
in the first instance to resolve such dispute through friendly
consultations.
11.04 Arbitration
(a) If the dispute is not resolved by friendly consultation within
60 days after notice of a dispute is given by a Party, then
any Party may submit the dispute for final binding arbitration
by the Beijing City Arbitration Commission, in accordance with
its rules then in force. The arbitration proceedings shall be
held in Mandarin Chinese and English. The site of the
arbitration shall be Beijing. Should there exist a conflict
between the rules of the Beijing City Arbitration Commission
and the provisions of this Contract, the provisions of this
Contract will prevail.
(b) There shall be three (3) arbitrators. All three arbitrators
shall speak both Mandarin Chinese and English. Purchaser and
Seller shall each appoint (1) arbitrator within thirty (30)
days of the date of the request to initiate arbitration.
Within thirty (30) days from the appointment of the second of
the Parties' arbitrators, the Parties' arbitrators shall
appoint a third arbitrator who shall, in addition to his
duties as arbitrator, act as chairman of the arbitration
tribunal. Arbitrators not appointed within the time limits set
forth in this Article 11.04(b) shall be appointed by the
Secretary General of the International Center for Settlement
of Investment Disputes. The Parties hereby waive and renounce
any right to appeal the award of the arbitration panel or to
have any question of law or fact referred to a court or other
forum in the People's Republic of China except in furtherance
of enforcing the award of the arbitration panel.
(c) The award of the arbitration panel shall be issued not later
than sixty days following the close of hearings by the panel.
The arbitration award shall be final and binding on the
Parties and shall not be subject to appeal to any court. The
Parties agree to be bound thereby and to act accordingly.
(d) The costs of arbitration shall be borne by each Party as
designated in the arbitration award.
11.05 Continuing Rights and Obligations
Whenany dispute occurs and is the subject of friendly
consultations, or arbitration, the Parties shall continue to
exercise their remaining respective rights, and fulfill their
remaining respective obligations under this Contract.
11.06 Enforcement of Award
The Parties acknowledge that any award rendered pursuant to
Article 11.04 hereof shall be governed by the 1958 Convention
on the Recognition and Enforcement of Foreign Arbitration
Awards of the United Nations. The award shall be enforceable
in any court that has jurisdiction over the losing Party or
over the property of the losing Party.
11.07 Waiver of Sovereign Immunity Defense
In any arbitration proceeding, any legal proceeding to enforce
any arbitration award and in any legal action between the
Parties pursuant to or relating to this Contract, each Party
expressly waives the defense of sovereign immunity and any
other defense based on the fact or allegation that it is an
agency or instrumentality of a sovereign state.
ARTICLE 12. FORCE MAJEURE
12.01 Definition of Force Majeure
"Force Majeure" means all events which are beyond the
reasonable control of the Parties to this Contract. For
purposes of this Contract, events of Force Majeure are
reasonably unforeseen, unavoidable or insurmountable events
which arise after execution of this Contract and which prevent
total or partial performance by any Party. Such events will
include but not be limited to the following, earthquakes,
typhoons, flood, fire, any other natural disaster, strikes,
political disturbances, wars, or any other instance which
cannot be reasonably foreseen, prevented or controlled. For
purposes of this Contract, events of Force Majeure shall also
include those events considered Force Majeure in general
international commercial practice and under any agreement or
contract for the supply of fuel to the Power Station
(including, without limitation, any event of force majeure
under the Fuel Contract), and any event which results in an
interruption in the supply of fuel to the Power Station,
whether or not it was foreseeable. The Purchaser shall not be
entitled to claim Force Majeure due to any Change of Law or
due to any act of any PRC Government Authority or due to any
decrease in the demand for electrical energy in the People's
Republic of China or due to any increase in the supply of
electrical energy in the People's Republic of China. The
Seller shall be entitled to claim Force Majeure due to any
Change of Law or due to any act of any PRC Government
Authority which prevents the Seller from performing its
obligations hereunder or prevents the Seller from realizing
the economic benefits accruing to it under this Contract.
12.02 Parties' Obligations Upon Occurrence of Force Majeure
(i) If the occurrence of an event of Force Majeure
prevents a Party from fulfilling its obligations
under this Contract, the Party will be excused from
performing such obligations provided:
(a) Suspension of performance is of no greater
scope and no longer duration than is
reasonably required to correct consequences
caused by the event of Force Majeure; and
(b) The affected Party's remaining obligations
not affected by the event of Force Majeure
will not be excused.
(ii) The Parties agree to take all reasonable precautions,
due care, and reasonable measures to mitigate the
consequences of a Force Majeure event.
12.03 Notification Requirement
In the event either Party is unable to fulfill its obligations
under this Contract as a result of Force Majeure, such Party
will promptly notify the other Party. Such notification will
state the nature of the event, the anticipated duration, and
any action taken by the affected Party to mitigate the effect.
12.04 Change of Circumstances
Notwithstanding anything herein to the contrary, if any event
of Force Majeure affecting the operation of the Power Station
or the performance of the obligations of the Contract by
either or both of the Parties continues for a period longer
than one hundred and eighty consecutive (180) days (any such
event or circumstance in this Article 12.04 hereinafter
referred to as a "Change of Circumstances"), the Seller shall
give notice to the Purchaser thereof and the Parties shall
meet and endeavor to agree to amendments to this Contract
which will permit Seller to realize substantially the same
benefits and Capital Return as it would have received had the
Change of Circumstances not occurred. If after sixty (60) days
following the commencement of a Change of Circumstances, no
such agreement to amend the Contract has been reached, Seller
shall be entitled upon written notice to the Purchaser to
terminate this Contract. In any such case of termination, the
Purchaser shall pay the Seller a termination charge calculated
in accordance with Appendix C which is attached hereto within
thirty (30) days following Purchaser's receipt of such notice
of termination. Upon full payment by the Purchaser of the
termination charge, all rights, title, and ownership of the
Power Station shall be transferred by the Seller to the
Purchaser and the Seller shall have not further obligation to
Purchaser hereunder.
ARTICLE 13. ASSIGNMENT
13.01 Assignment
Neither Party may assign or transfer any of its rights,
benefits or obligations under this Contract without the prior
written consent of the other Party, except as follows:
(a) Purchaser's Rights of Assignment: Purchaser may assign its
rights and obligations under this Contract to a successor
statutory body. The successor statutory body must provide
financial guarantees satisfactory to Seller demonstrating the
successor's ability to continue Purchaser's obligations under
this Contract. In addition, the successor statutory body must,
prior to any such assignment, expressly agree with the Seller
in writing to be fully bound by Purchaser's obligations set
forth in this Contract.
(b) Seller's Rights of Assignment: Seller may assign its rights
and obligations under this Contract to any parent, subsidiary,
shareholder(s) or affiliate. Such assignment would be for the
purpose of constructing, owning and operating the Power
Station. In addition, the assignee must expressly agree in
writing to be fully bound by Seller's obligations set forth in
this Contract. Upon such assignment, Seller will be relieved
of all obligations herein. Seller may also assign its rights
under this Contract, including its right to receive revenues
from the sale of electrical energy under this Contract, as
security to financial institutions or other lenders of debt or
equity to the Power Station. Upon such assignment of this
Contract and through enforcement by such financial
institutions or other lenders of their rights under such
security assignment or upon assumption of the obligations of
the Seller by such financial institutions or other lenders,
such assignees shall have the right to perform all of Seller's
obligations under this Contract.
ARTICLE 14. MISCELLANEOUS PROVISIONS
14.01 Notices
Any notice or written communication provided for in this
Contract by any Party to the other Party will be sent by
facsimile, telegram or telex, and confirmed by delivery of a
letter by courier service, promptly transmitted and addressed
to the appropriate Party. For notices or communications
delivered by courier service, such notice of communication
will be considered received twelve (12) days after such notice
or communication is given to the courier service for delivery.
For notices or communications dispatched by facsimile,
telegram or telex, such notice or communication will be
considered received two (2) days after such notice or
communication was dispatched. All notices and communications
will be sent to the appropriate addresses set forth in Article
3 of this Contract until the same is changed by notice in
writing to and acknowledged by the other Party.
14.02 Binding Effect; Amendment
This Contract is made for the benefit of and is legally
binding on the Parties and their respective lawful successors
and assignees. This Contract may be changed, amended or
modified only by a written instrument signed by both Parties.
14.03 Language
This Contract will be executed and delivered in both Chinese
and English. Both language versions of this Contract will be
equally authentic and effective.
14.04 Confidentiality
Both Parties agree that all information and documents
(financial, technical or otherwise) which are not publicly
available and which are obtained by one Party will be kept
confidential by the other Party. Furthermore, except as
required by law, such information and documents will not be
disclosed to any other person or entity, other than such
Party's advisers, consultants, and lenders and their advisers
and consultants without the prior written approval of the
Party from whom the information or documents originated.
14.05 Severability
If any section, paragraph, clause or provision of this
Contract is finally adjudicated by a court of competent
jurisdiction to be invalid, the remainder of this Contract, to
the extent reasonably possible, will remain in full force and
effect as though such section, paragraph, clause or provision
or any part thereof so adjudicated to be invalid, had not been
included herein.
14.06 Entire Contract
This Contract and the Electric Tariff Adjustment Method
constitute the entire agreement between the Parties with
respect to the subject matter contained herein and therein.
This Contract and the Electric Tariff Adjustment Method
supersede all prior and contemporaneous discussions,
negotiations, agreements and contracts between the Parties
concerning their subject matter. In the event of conflict
between the terms and conditions of the Contract and the
Electric Tariff Adjustment Method on one hand, and the terms
and conditions of the Interconnection and Dispatch Contract on
the other, the terms and conditions of the Contract and the
Electric Tariff Adjustment Method shall prevail.
14.07 Effectiveness
Notwithstanding any provision to the contrary in this
Contract, Seller's obligations under this Contract shall be
subject to the Seller's written confirmation that each party
to the Joint Venture Contract has made its initial
contribution of registered capital to the Seller in accordance
with the terms and conditions of the Joint Venture Contract.
14.08 Insurance
Seller shall maintain insurance coverages equal to or greater
than those defined in Article 17.02 of the Joint Venture
Contract.
IN WITNESS WHEREOF, and intending to be legally bound, each of the Parties
hereto have caused this Contract to be executed and to become effective by their
duly authorized representatives as of the date first set forth above.
SIGNATURES
For the Purchaser:
[Signature Illegible]
---------------------------------------
By:
Date:
Name:
Title:
For the Seller:
[Signature Illegible]
----------------------------------------
By:
Date:
Name:
Title:
APPENDIX A.
INTERCONNECTION AND DISPATCH CONTRACTS
INTERCONNECTION AND DISPATCH CONTRACT
This Interconnection and Dispatch Contract (the "Contract") is entered into as
of ------------- July 1996 between Sichuan Power Dispatch Bureau ([Chinese
text]) ("Dispatcher") and Chengdu AES KAIHUA Gas Turbine Power Co., Ltd.
([Chinese text]) ("Seller"). Terms not otherwise defined herein shall have the
meaning given to them in the Power Purchase Contract between Chengdu Huaxi
Electric Power Shareholding (Group) Company Ltd. and Chengdu AES KAIHUA Gas
Turbine Power Co., Ltd. (the "Power Purchase Contract").
I. Conditions for Interconnection
The Dispatcher agrees to the integration of the Power Station into the
operations of the Dispatcher's transmission system and of the Grid upon
the fulfillment of the following conditions:
A. The Power Station shall possess, but be not limited to,
following technical conditions:
1. All the generating equipment in the Power Station
shall be in good condition, with the ability to
maintain a continuous and steady output,
2. The Power Station shall have a comprehensive and
reliable relay protection apparatus, with adequate
safeguards in operation for circuits of 110 kilovolts
and above,
3. In order to meet the requirements of dispatch
communications and the transmission of information,
there shall be two independent ways of communications
between the Power Station and Dispatch Center,
4. There shall be installed at the Power Station to the
satisfaction of the Dispatcher telemetry data
equipment in accordance with the codes and
specifications issued by the Ministry of Electric
Power of the People's Republic of China, and
5. All electric energy metering equipment installed at
the Power Station shall be capable of measuring the
on-grid output of the Power Station in appropriate
units at one (1) minute intervals.
B. The technology utilized and operational management procedures
employed at the Power Station shall be in compliance with the
regulations and stipulations of electric power industry in the
People's Republic of China, and with the requirements of the
Grid.
C. The operations of the Power Station shall be in accordance
with Prudent Electrical Practices at all times.
II. Dispatch Management
A. Commencing on the Commencement of Operations Date, the Power
Station will be available for dispatch by the Dispatcher.
B. The Seller and Dispatcher agree that the Power Station is
normally to be dispatched as a peaking power plant. The Seller
and Dispatcher further agree that the Power Station will be
dispatched by the Dispatch Center at its maximum capacity
allowed consistent with international operating standards and
within the limits recommended by manufacturers of the Power
Station's equipment (hereinafter referred to as the "Technical
Limits") and Prudent Electrical Practices. The Dispatcher
agrees that notwithstanding the needs of the Grid during an
emergency, the Dispatcher shall request the Power Station to
operate according to Paragraph 2.3 below.
C. Dispatcher agrees that at a minimum, it shall dispatch the
Power Station a sufficient number of hours so that the Power
Station can deliver the Annual Minimum Quantity to the
Purchaser as such term is defined in the Power Purchase
Contract.
D. The Seller shall accept and comply with the unified dispatch
of the Power Station by the Dispatcher in accordance with this
Contract. In case of an emergency that might pose a risk to
life and/or safety of the Power Station's equipment,
preventative measures may be taken by the Seller's personnel
in accordance with acceptable international operating
standards and equipment manufacturers' recommended operating
procedures and without prior instructions from the Dispatcher.
The Dispatcher's personnel on duty shall be informed of the
situation requiring emergency actions as soon as possible.
E. The Seller's duty officer or other employee posted on duty at
the Power Station shall never hide the truth from the
Dispatcher's personnel, and shall report factually and reply
accurately to any inquiries by the Dispatcher's personnel on
duty.
F. The Dispatcher shall inform the Seller of a Grid emergency as
soon as possible after it occurs and when normal operations
may be resumed.
G. Seller shall be responsible for providing to the Dispatcher
any operational planning documentation given to the Purchaser
by the Seller at the time such documentation is given to the
Purchaser by the Seller.
H. The Dispatcher shall issue such dispatch instructions as are
necessary to allow the Seller and the Purchaser to perform
their obligations under the Power Purchase Contract.
III. Dispatch Parameters
A. During each calendar year, the Dispatcher shall issue dispatch
orders so that the number of KWHs delivered by the Seller to
the Purchaser shall be equal to or greater than the Annual
Minimum Quantity as defined in the Power Purchase Contract.
B. When the Power Station is operational, the Dispatcher shall
request the Power Station to deliver one-hundred percent
(100%) of the Net Station Capacity.
C. The Dispatcher shall not request that the Power Station
increase or decrease the capacity of the energy delivered by
the Power Station in a manner that would result in operating
the Power Station's equipment inconsistent with international
operating standards, Prudent Electrical Practices and the
Technical Limits.
D. Except in the case of a Grid emergency, the Dispatcher shall
not cycle the Power Station between full load and no load more
than twice in a 24 hour period.
IV. Dispatch Schedule
A. In order for the Seller to plan its purchase of fuel needed
for the generation of electricity by the Power Station, and to
plan the scheduling of maintenance and overhaul of the Power
Station's equipment, the Seller shall provide the Dispatch
Center sixty (60) days prior to the beginning of each year
with a schedule of the availability of the Power Station
during the following year and its planned outages. Before
December 31st of each year, the Seller and the Dispatcher
shall mutually agree on a schedule of availability for the
Power Station for the following year.
B. Ten (10) days prior to the beginning of each month, and three
(3) days prior to the beginning of each week, the Seller and
the Dispatch Center shall confirm by written notice or
facsimile sent to each other the availability schedule of the
Power Station for the following month or week, as the case may
be. The Seller and the Dispatch Center may propose
modifications to such monthly and weekly availability schedule
provided such modifications are consistent with Prudent
Electrical Practices and the Technical Limits. To the fullest
extent possible, such modifications shall be made so as to
minimize costs to the Seller.
C. Each day, prior to 12:00 noon on such day, the Seller shall
inform by facsimile the Dispatcher of the Net Station Capacity
available for the following day.
D. Each day, prior to 5:00 p.m. on such day, the Dispatch Center
shall confirm by facsimile its request for electricity to be
delivered on the following day.
E. As the need for an unplanned outage arises, the Seller shall
promptly provide notice thereof to the Dispatcher as soon as
such need arises along with an estimate of its cause, scope
and duration. The Seller and the Dispatch Center shall agree
on a modification of the availability schedule of the Power
Station to take into account such unplanned outage. If an
unplanned outage occurs after November 1st of any year in
which the Seller has not delivered the Annual Minimum Quantity
to the Purchaser, the Dispatcher shall use its best efforts to
issue dispatch instructions to the Seller to permit the Power
Station to deliver an amount of energy equal to the shortfall
resulting from such outage to the Purchaser by no later than
April 1st of the following year.
V. Miscellaneous
A. The performance of the obligations of the Dispatch Center and
the Seller hereunder shall be subject to relief on account of
an event of Force Majeure in the same manner and to the same
extent as, in the case of the Dispatch Center, the scope of
the relief available to the Purchaser for Force Majeure under
the Power Purchaser Contract and in the case of the Seller,
the scope of relief available to the Seller for Force Majeure
under the Power Purchaser Contract.
B. The term of this Contract shall be the same as the Term of the
Power Purchaser Contract.
C. The Seller shall have the right to assign this Contract in the
same way and to the same extent as its right to assign the
Power Purchaser Contract.
D. Any dispute arising out of or inconnection with this Contract
shall be resolved in accordance with the procedures for
dispute resolution set forth in Article 11.04 of the Power
Purchase Contract. In the event of a conflict between the
terms and conditions of this Contract and the terms and
conditions of the Power Purchase Contract, the Seller and the
Dispatch Center shall amend this Contract in accordance with
the terms and conditions of the Power Purchase Contract.
E. This Contract is effective as of the date first written above.
IN WITNESS HEREOF, and intending to be legally bound, the Dispatch Center and
the Seller have affixed below the signatures of their duly authorized
representatives.
For the Dispatch Center: For the Seller:
By: By:
----------------------------- ------------------------------
Name: Name:
Title: Title:
SUPPLEMENTAL INTERCONNECTION AND DISPATCH CONTRACT
This Supplemental Interconnection and Dispatch Contract (the "Contract") is
entered into as of ------ July 1996 between Sichuan Power Dispatch Bureau
([Chinese text]) ("Dispatcher") and Chengdu AES KAIHUA Gas Turbine Power Co.,
Ltd. ([Chinese text]) ("Seller"). Terms not otherwise defined herein shall have
the meaning given to them in the Power Purchase Contract (the "Power Purchase
Contract") between Chengdu Huaxi Electric Power Shareholding (Group) Company
Ltd. ([Chinese text]) ("Purchaser") and the Seller.
The Dispatcher and the Seller (the "Parties") acknowledge that they have entered
into the Interconnection and Dispatch Contract dated as of ---------- July 1996
(the "Interconnection and Dispatch Contract") and that all terms and conditions
therein (as amended or supplemented by Article 5 below ) are binding on the
Parties.
1. Conditions for Interconnection
The conditions for interconnection shall be the same as those found in
Article 1 of the Interconnection and Dispatch Contract.
2. Dispatch Management
The dispatch management shall be the same as found in Article 2 of the
Interconnection and Dispatch Contract.
3. Dispatch Parameters
The dispatch parameters shall be the same as those found in Article 3
of the Interconnection and Dispatch Contract.
4. Dispatch Schedule
The dispatch schedule shall be the same as found in Article 4 of the
Interconnection and Dispatch Contract.
5. Supplemental Dispatch
5.1 In accordance with the Power Purchase Contract, the Seller
anticipates and desires to have dispatch orders issued by the
Dispatcher allowing the Seller to deliver to the Purchaser
additional energy above the Annual Minimum Quantity as defined
in the Power Purchase Contract.
5.2 In accordance with Article 4 of the Interconnection and
Dispatch Contract, the Seller and the Dispatch Center shall
agree on a number of KWH above the Annual Minimum Quantity
(the "Supplemental Energy") that the Seller shall deliver to
the Purchaser each year.
5.3 The Dispatcher agrees to issue additional dispatch orders in
accordance with Articles 2 and 3 of the Interconnection and
Dispatch Contract so that the Power Station can deliver the
Supplemental Energy to the Purchaser.
5.4 The Seller agrees to pay the Dispatcher a fee of ----% of the
Current Tariff for each KWH of Supplemental Energy that the
Seller delivers to the Purchaser.
6. Miscellaneous
6.1 The performance of the obligations of the Dispatch Center and
the Seller hereunder shall be subject to relief on account of
an event of Force Majeure in the same manner and to the same
extent as, in the case of the Dispatch Center, the scope of
the relief available to the Purchaser for Force Majeure under
the Power Purchase Contract and in the case of the Seller, the
scope of relief available to the Seller for Force Majeure
under the Power Purchase Contract.
6.2 The term of this contract shall be the same as the Term of the
Power Purchase Contract.
6.3 The Seller has the right to assign this Contract in the same
way and to the same extent as its right to assign the Power
Purchase Contract.
6.4 Any dispute arising out of or in connection with this Contract
shall be resolve in accordance with the procedures for dispute
resolution set forth in Article 11.04 of the Power Purchase
Contract. In the event of a conflict between the terms and
conditions of this Contract and the terms and conditions of
the Power Purchase Contract, the Seller and the Dispatch
Center shall amend this Contract in accordance with the terms
and conditions of the Power Purchase Contract.
6.5 This Contract is effective as of the date first written above.
IN WITNESS HEREOF, and intending to be legally bound, the Dispatch Center and
the Seller have affixed below the signatures of their duly authorized
representatives.
For the Dispatch Center: For the Seller:
By: By:
---------------------------- ------------------------------
Name: Name:
Title: Title:
APPENDIX B.
METERING POINT AND POINT OF DELIVERY
The Metering Point shall be same as the Point of Delivery. The Metering Point
and the Point of Delivery shall be on the low voltage side bushings of the main
step up transformer after the feed to the station service transformer.
[DIAGRAM]
APPENDIX C.
TERMINATION CHARGE
The termination charge payable by the Purchaser shall be calculated as follows:
[***]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
APPENDIX D.
THE
ELECTRIC TARIFF ADJUSTMENT METHOD
FOR
CHENGDU AES KAIHUA GAS TURBINE
POWER CO., LTD.
Section 1. Preamble
After friendly consultation conducted in accordance with the principles of
equality and mutual benefit, the following parties (hereinafter individually a
"Party" and collectively the "Parties") agree to this ELECTRIC TARIFF ADJUSTMENT
METHOD (hereinafter referred to as the "Method"). The implementation of the
Method shall be the responsibility of the Chengdu City Price Control Bureau,
registered in Chengdu City, Sichuan Province, People's Republic of China ("Price
Bureau").
The Parties to this Method are:
(a) Chengdu Huaxi Electric Power Shareholding (Group) Company Ltd. ([Chinese
text]), registered in Chengdu City, Sichuan Province, the People's Republic of
China with its legal address at Renmin Nan Lu, Chengdu, Sichuan Province,
People's Republic of China ("Purchaser").
Legal Representative of Purchaser:
Name:
Title:
Nationality: Chinese
(b) Chengdu AES KAIHUA Gas Turbine Power Co., Ltd. ([Chinese text]), registered
in Chengdu City, Sichuan Province, the People's Republic of China with its legal
address in the Economic Development Zone, Chengdu, Sichuan Province, People's
Republic of China ("Seller").
Legal Representative of Seller:
Name: Qu Delin
Title: Chairman of the Board
Nationality: Chinese
Section II. Mutual Representations and Warranties
Each of the Purchaser and the Seller represents and warrants that it possesses
full power and authority and the legal right to enter into and abide by this
Method and to perform its obligations herein.
Section III. Definitions:
Unless otherwise defined herein, any capitalized term used in this Method shall
have the meaning given to such term in the Power Purchase Contract between
Chengdu Huaxi Electric Power Shareholding (Group) Company Ltd. and Chengdu AES
KAIHUA Gas Turbine Power Co., Ltd., dated as of __________ July 1996 (the
"Contract").
Section IV. Purpose:
The purpose of this Method is to set forth the manner in which the tariff for
electrical energy delivered from the Power Station to the Purchaser pursuant to
the Contract is to be determined and adjusted. The unit price in RMB per KWH
which shall be payable by the Purchaser for electrical energy delivered from the
Power Station to the Purchaser pursuant to the Contract shall be, as determined
and adjusted by this Method, referred to in this Method and defined for purposes
of the Contract, as the "Current Tariff".
Section V. Budget:
A. Initial Budget
Prior to the Commencement of Operations Date, Seller's board
of directors shall prepare a budget (the "Initial Budget") for
the costs Seller estimates will be incurred with respect to
the Power Station from the Commencement of Operations Date to
the end of the calendar year in which the Commencement of
Operations Date occurs ("First Tariff Period"). The Initial
Budget shall contain specific line items and cost estimates
for the various components of the Current Tariff which are
defined in Section 6 hereof, and where appropriate,
adjustments to such costs for fluctuations in the exchange
rate. The amounts in the Initial Budget which are adopted by
the Seller's board of directors, as adjusted for fluctuations
in the exchange rate, shall be the basis for determining the
initial Current Tariff which shall be payable by the
Purchaser. Such amounts in the Initial Budget also shall be
the basis for any adjustments to the initial Current Tariff to
be made pursuant to Section 8 hereof during the First Tariff
Period.
B. Subsequent Budgets
Prior to the end of the First Tariff Period, and prior to the
end of each calendar year following the end of the First
Tariff Period, (each calendar year following the end of the
First Tariff Period being hereinafter referred to as a
"Subsequent Tariff Period"), the Seller's board of directors
shall prepare a new budget (a "Subsequent Budget") for the
costs the Seller estimates will be incurred with respect to
the Power Station in the applicable Subsequent Tariff Period.
The Subsequent Budget shall contain specific line items and
cost estimates for the various components of the Current
Tariff defined in Section 6 hereof, and where appropriate,
adjustments to such costs for fluctuations in the exchange
rate. It shall also contain an adjustment for the differences
from year to year between actual costs incurred and the
budgeted costs. The amounts in a Subsequent Budget which are
adopted by the Seller's board of directors, as adjusted for
fluctuations in the exchange rate and for the differences
between actual and budgeted costs, shall be the basis for
determining the Current Tariff which shall be payable by the
Purchaser in applicable Subsequent Tariff Periods. Such
amounts in a Subsequent Budget also shall be the basis for any
adjustments to the Current Tariff to be made pursuant to
Section 8 hereof during such applicable Subsequent Tariff
Period.
Section VI. Current Tariff:
The Current Tariff shall be calculated in accordance with the following
equation:
[***]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
Section VII. Price Bureau Approval of the Current Tariff:
The Seller shall provide the Price Bureau with a statement detailing the
calculation of the initial Current Tariff ninety (90) days prior to the
Commencement of Operations Date and detailing any subsequent Current Tariff
ninety (90) days prior to the beginning of each calendar year following the year
in which the Commencement Date of Operations occurs. The statement shall be
accompanied by the Initial Budget or the Subsequent Budget, as the case may be,
certified as having been adopted by the Seller's board of directors. The Price
Bureau shall approve the initial Current Tariff as calculated by this Method
prior to the Commencement of Operations Date and it shall approve a subsequent
Current Tariff prior to each calendar year to which such Current Tariff is
intended to apply. The Seller estimates that the initial Current Tariff will be
[***]. The initial Current Tariff shall be determined based on the
Seller's actual investment in the Power Station at the Commencement of
Operations Date in accordance with the Method.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
Section VIII. Mid-Year Current Tariff Adjustments:
If during the Term, in any year, there is a Significant Change in Costs (which
for purposes of this Method shall be defined as a five percent (5%) or more
increase in Fuel Costs beyond the amounts budgeted for Fuel Costs in the Initial
Budget or applicable Subsequent Budget, as the case may be), such Significant
Change in Costs shall be reflected in a corresponding adjustment to the Current
Tariff. Such adjustment shall be made such that all of the Significant Change in
Costs is paid for by the Purchaser and the Seller's Capital Return is no less
after such adjustment is made as it was prior to the occurrence of the
Significant Change in Costs. The Price Bureau shall consider the Seller's
application for such an adjustment and shall inform the Seller of the Price
Bureau's decision on the mid-year Current Tariff adjustment within sixty (60)
days of the Seller's submission of the application for such adjustment.
Section IX. Obligations of the Purchaser:
The Purchaser agrees to accept from the Seller all electrical energy made
available by the Power Station in accordance with the terms of the Contract and
to pay for all such electrical energy made available from the Power Station in
accordance with the terms of the Contract and this Method.
Section X. Obligations of the Seller:
Seller agrees to make available to the Purchaser all electrical energy from the
Power Station in accordance with the terms of the Contract.
Section XI. Effectiveness:
Notwithstanding any provision to the contrary in the Contract or this Method,
Seller's obligations under this Method shall be subject to the Seller's written
confirmation that each party to the Joint Venture Contract has made its initial
contribution to the registered capital of the Seller in accordance with the
terms and conditions of the Joint Venture Contract.
Section XII. Disputes:
Any dispute arising out of or in connection with this Method shall be resolved
in accordance with the procedures for dispute resolution set forth in Article
11.04 of the Contract.
IN WITNESS WHEREOF, and intending to be legally bound, the Parties hereto have
each affixed the signatures of their duly authorized representatives.
SIGNATURES:
Agreed to and Accepted by:
Chengdu Huaxi Electric Power Shareholding (Group) Company Ltd.
---------------------------------------
Name:
Title:
Agreed to and Accepted by:
Chengdu AES KAIHUA Gas Turbine Power Co., Ltd.
---------------------------------------
Name:
Title:
SCHEDULE 1 - CAPITAL RETURN
- --------------------------------------------------------------------------------
YEAR CAPITAL RETURN
- --------------------------------------------------------------------------------
1 US$[***]
- --------------------------------------------------------------------------------
2 US$[***]
- --------------------------------------------------------------------------------
3 US$[***]
- --------------------------------------------------------------------------------
4 US$[***]
- --------------------------------------------------------------------------------
5 US$[***]
- --------------------------------------------------------------------------------
6 US$[***]
- --------------------------------------------------------------------------------
7 US$[***]
- --------------------------------------------------------------------------------
8 US$[***]
- --------------------------------------------------------------------------------
9 US$[***]
- --------------------------------------------------------------------------------
10 US$[***]
- --------------------------------------------------------------------------------
11 US$[***]
- --------------------------------------------------------------------------------
12 US$[***]
- --------------------------------------------------------------------------------
13 US$[***]
- --------------------------------------------------------------------------------
14 US$[***]
- --------------------------------------------------------------------------------
15 US$[***]
- --------------------------------------------------------------------------------
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
Note: This table has been calculated on the date the Contract is
executed based on the assumption that the total investment in the Power Station
is US$36.904 million. The actual amounts of the Capital Return shall be
recalculated by the Seller prior to the Commencement of Operations Date based on
the Seller's actual investment in the Power Station. To the extent any of the
amounts in this table are denominated in United States Dollars, for purposes of
calculating the Current Tariff, they shall be converted into RMB at the rate of
exchange prevailing on the date of conversion.