Contract No. 95MS-94862
September 20, 1995
POWER SALES AGREEMENT
between the
UNITED STATES OF AMERICA
DEPARTMENT OF ENERGY
acting by and through the
BONNEVILLE POWER ADMINISTRATION
and
NORTHWEST ALUMINUM COMPANY
Index to Sections
- -------------------------------------------------------------------------------
Section Page
1. Effective Date and Term . . . . . . . . . . . . . . . . . . . . . . . . 3
2. Deliveries of Firm Power Between the Effective Date
and Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Commencement of Deliveries of Firm Power. . . . . . . . . . . . . . . . 4
4. Termination of Prior Contract and Other Contracts . . . . . . . . . . . 4
5. Termination of This Agreement . . . . . . . . . . . . . . . . . . . . . 5
6. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7. Exhibits; Interpretation. . . . . . . . . . . . . . . . . . . . . . . . 16
8. Contract Revisions and Waivers. . . . . . . . . . . . . . . . . . . . . 17
9. Purchase and Sale of Annual Take-or-Pay Firm Energy . . . . . . . . . . 18
10. Monthly, Weekly, Daily, and Hourly Amounts of Firm Power. . . . . . . . 19
11. Rate Test Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . 22
12. Rates and Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
13. Billing and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 23
14. Relief from Take-or-Pay Obligation. . . . . . . . . . . . . . . . . . . 27
15. Unauthorized Increase Charges . . . . . . . . . . . . . . . . . . . . . 28
16. Changes in Firm Power Amounts . . . . . . . . . . . . . . . . . . . . . 29
17. Reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
18. Curtailment or Remarketing. . . . . . . . . . . . . . . . . . . . . . . 35
19. Load Regulation, Unbundled Products, and Other
Transmission Products . . . . . . . . . . . . . . . . . . . . . . . . 42
20. Provisions Relating to Delivery of Firm Power . . . . . . . . . . . . . 44
21. Assignment of Agreement . . . . . . . . . . . . . . . . . . . . . . . . 44
22. Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . 45
23. Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Index to Sections
- -------------------------------------------------------------------------------
Section Page
24. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
25. Hold Harmless . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
26. Damages for Failure by BPA to Deliver . . . . . . . . . . . . . . . . . 51
27. Obligations During Performance of This Agreement. . . . . . . . . . . . 51
28. Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
29. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
30. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
31. Signature Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Exhibit A (General Contract Provisions). . . . . . . . . . . . . . . . 16
Exhibit B (Fees for Remarketing) . . . . . . . . . . . . . . . . . . . 16
Exhibit C (Rate Schedule). . . . . . . . . . . . . . . . . . . . . . . 16
Exhibit D (Monthly Amounts of Firm Power). . . . . . . . . . . . . . . 16
Exhibit E (Points of Delivery) . . . . . . . . . . . . . . . . . . . . 16
Exhibit F (Unrecoverable Costs and Transfer Costs) . . . . . . . . . . 16
Exhibit G (Stability Reserve Scheme(s)). . . . . . . . . . . . . . . . 16
Exhibit H (Arbitration Procedures) . . . . . . . . . . . . . . . . . . 16
Exhibit I (Use-of-Facilities Charge) . . . . . . . . . . . . . . . . . 16
This POWER SALES AGREEMENT, executed September 28, 1995, by the UNITED
STATES OF AMERICA (Government), Department of Energy, acting by and through the
BONNEVILLE POWER ADMINISTRATION (BPA or Bonneville), and NORTHWEST ALUMINUM
COMPANY (Company), a corporation incorporated under the laws of the State of
Oregon. BPA and the Company are hereinafter sometimes referred to individually
as "Party" and collectively as "Parties."
W I T N E S S E T H :
WHEREAS pursuant to section 5(d) of the Pacific Northwest Electric Power
Planning and Conservation Act (Northwest Power Act), BPA is authorized to sell
power to the Company; and
WHEREAS on October 23, 1985, BPA and the Company entered into Contract No.
DE-MS79-86BP-91987, hereinafter referred to as "Prior Contract"; and
WHEREAS this Agreement provides for the termination of the Prior Contract;
and
Contract No. 95MS-94862
2
WHEREAS BPA desires to sell, and the Company desires to purchase, Firm
Power pursuant to the terms and conditions of this Agreement; and
WHEREAS the Company and BPA have entered into an Integration of Resources
transmission agreement, Contract No. 95MS-94766 (IR Transmission Agreement),
which provides for transmission of non-Federal power; and
WHEREAS BPA is authorized pursuant to law to market electric power and
energy generated at various Federal hydroelectric projects in the Pacific
Northwest or acquired from other resources, to construct and operate
transmission facilities, to provide transmission and other services, and to
enter into agreements to carry out such authority;
NOW, THEREFORE, the Parties hereto agree as follows:
1. EFFECTIVE DATE AND TERM
(a) Effective Date
This Agreement shall become effective on the date that it is executed
by BPA.
(b) Term
This Agreement shall continue in effect until 2400 hours on September
30, 2001, unless terminated earlier as provided herein. All
obligations incurred hereunder shall be preserved until satisfied.
2. DELIVERIES OF FIRM POWER BETWEEN THE EFFECTIVE DATE AND COMMENCEMENT DATE
During the period between the Effective Date and the Commencement Date, the
Prior Contract shall govern the sale of Firm Power by BPA to the Company;
provided, however, that, as of the Effective Date, the Company shall have
no obligation under section 2(b)(1) of the Prior Contract to reimburse BPA
for any costs, unrecoverable or otherwise; and provided further, that
section 2(b)(2) limitations
Contract No. 95MS-94862
3
on the Company's right to purchase electric power shall be of no further
application and shall terminate.
3. COMMENCEMENT OF DELIVERIES OF FIRM POWER
Deliveries of Firm Power shall commence on the later of October 1, 1996, or
the date that FERC provides interim approval of a Rate Schedule that
satisfies the Rate Test; provided, however, that the Company may waive in
writing its right to terminate this Agreement under section 5(a)(2)(A) and
thereupon deliveries of Firm Power shall commence in accordance with the
provisions of this Agreement..
4. TERMINATION OF PRIOR CONTRACT AND OTHER CONTRACTS
(a) Effective on the Commencement Date, the Prior Contract shall
terminate, if it has not previously been terminated, and all
obligations of the Parties under the Prior Contract shall terminate,
except for the Company's liability to pay for power delivered under
the Prior Contract prior to the Commencement Date. If the Commencement
Date has not occurred by October 1, 1996, then, in addition to any
other right to terminate, the Company may terminate the Prior Contract
upon 7 days' written notice to BPA. Such notice may be given any time
after October 1, 1996, and prior to the Commencement Date.
(b) The Company shall not terminate the Prior Contract in part to reduce
the contract demand under the Prior Contract to an amount which is
less than the annual amount of HLH and LLH Energy in megawatthours for
Contract Year 1996-1997 (as specified in section 9(b) of this
Agreement), divided by 8,760 hours, effective during the period April
1, 1996, through September 30, 1996.
(c) In addition to termination of the Prior Contract pursuant to section
4(a), the following contract(s) shall terminate effective on the
Commencement Date:
Contract No. 95MS-94862
4
o Contract No. DE-MS79-78BP90030 (1978 IRE Agreement)
o Contract No. DE-MS79-87BP90230 (Protected Storage Agreement)
o Contract No. DE-MS79-94BP94442 (Interim IRE Agreement)
All liabilities accrued by either Party under any agreement listed in
this section 4(c) are preserved until satisfied.
5. TERMINATION OF THIS AGREEMENT
(a) Excused Termination
The Company shall have the right to terminate this Agreement, subject
to the following terms:
(1) Conditions Over Which BPA Has Control That Allow for Excused
Termination
The Company may terminate this Agreement upon 7 days' notice to
BPA if any one of the following events occur:
(A) if BPA issues a final Record of Decision in the 1996 Rate
Case that proposes a Rate Schedule which is applicable to
this Agreement and which fails to satisfy the Rate Test;
(B) if by September 1, 1996, BPA has failed to file a Rate
Schedule with FERC that is applicable to this Agreement and
satisfies the Rate Test;
(C) if, within 180 days of the remand of the Rate Schedule by
FERC or a court to BPA, BPA does not propose revised rates,
including a Rate Schedule that satisfies the Rate Test; or
if
Contract No. 95MS-94862
5
FERC fails to approve such Rate Schedule; or such Rate
Schedule is subsequently disapproved by a court;
(D) if at any time, BPA acts or fails to act so as to entitle
the Company to terminate pursuant to section 22 of this
Agreement; or
(E) if after breach by BPA, as determined under section 22 or by
a Federal Court, BPA has not cured the breach within 30 days
following such determination.
(2) Conditions Over Which BPA Does Not Have Control That Allow for
Excused Termination
The Company may terminate this Agreement upon 7 days' notice to
BPA if either of the following events occur:
(A) if by September 30, 1996, FERC has failed to approve, on an
interim or final basis, a Rate Schedule that is applicable
to this Agreement and satisfies the Rate Test; or
(B) if any term, covenant, or condition of this Agreement or the
Rate Schedule or the performance of such term, covenant, or
condition, is held to be invalid or unenforceable, or
enjoined by an order of a court, and such order is not
stayed, pending any appeals; provided, however, that if only
one or both of: (i) section 18(b)(2)(B) of this Agreement,
and (ii) a contract entered into pursuant to section
18(b)(2)(B) of this Agreement, is held to be invalid or
unenforceable, then such order shall not permit the Company
to terminate this Agreement under this section 5(a)(2).
Contract No. 95MS-94862
6
(b) Obligations Upon Expiration or Termination
(1) Obligations Upon Expiration or Termination for Any Reason
Upon expiration of this Agreement at 2400 hours on September 30,
2001, or upon termination of this Agreement pursuant to section
5(a), or for any other reason, the following terms and conditions
shall apply:
(A) BPA shall make the BPA substation and/or transmission
facilities whose primary purpose is to serve the Company's
load available for use of the Company for deliveries of
power from BPA, or from third parties under BPA's
then-current transmission tariffs.
The Company will reimburse BPA pursuant to the terms and
conditions of Exhibit F for the unrecoverable cost, if any,
in BPA substation or transmission facilities whose primary
purpose is to serve the Company's load during the life of
this Agreement, to the extent that BPA cannot mitigate such
cost. Continued transmission service at the same level of
service as purchases hereunder through and at such
facilities under BPA's then-current transmission tariffs is
mitigation for unrecoverable cost under this Agreement.
If BPA does not have another use at the site for such
facilities to serve other BPA customers, and the Company
makes an offer to purchase such facilities for the
unamortized investment in the facilities as determined
pursuant to Exhibit F plus the appraised value of the
property on which the facilities are located, and BPA
rejects the offer, then the Company shall not be required to
reimburse BPA for any unrecoverable costs pursuant to
Exhibit F.
Contract No. 95MS-94862
7
(B) If the Company is served by transfer over third-party
facilities, the Company shall pay any amount BPA is
obligated to pay the third party under the transfer
arrangement, pursuant to the terms and conditions of Exhibit
F.
(C) If BPA proposes new investments in substation or
transmission facilities whose primary purpose is to serve
the Company's load, and the Company consents to such
investment, Exhibit F will be amended to include such
investments. The Company's consent to such investments shall
not be unreasonably withheld.
(2) Obligations After Expiration or Termination Pursuant to Section
5(a)(1)
After expiration of this Agreement, or if the Company terminates
this Agreement pursuant to section 5(a)(1), then BPA shall not
charge, except to the extent specified in section 5(b)(1), the
Company or a third party doing business with the Company any
amount, charge, or fee of any nature whatever based on the
purchases made by the Company under this or any prior power
purchase agreements between the Company and BPA or based on the
termination or reduction of the amount of power purchased by the
Company under this Agreement or any such prior agreements.
Nothing in this Agreement is intended to imply that the Company
would have any obligation to pay such charges under any
circumstances or to pay BPA any amounts except as expressly
provided in this Agreement. This provision is a material term and
essential to the Company having entered into this Agreement.
Contract No. 95MS-94862
8
6. DEFINITIONS
(a) "Agreement" means this Power Sales Agreement, Contract No. 95MS-94862.
(b) "Commencement Date" means the date that deliveries commence under this
Agreement.
(c) "Contract Demand" means the maximum integrated hourly rate of delivery
that the Company may request under this Agreement and is equal to
177.40 megawatts. The Contract Demand shall not be increased except
through:
(1) a process conducted pursuant to section 5(d)(3) of the Northwest
Power Act that provides for BPA to acquire increased reserves
from its direct service industrial companies; or
(2) a technological allowance which BPA shall grant upon the
Company's demonstration to BPA that such allowance meets the
criteria for a technological allowance under the Prior Contract.
(d) "Contract Year" means the period that begins on October 1 and ends on
the following September 30.
(e) "Control Area" or "Load Control Area" means the electrical (not
necessarily geographical) area within which a controlling utility
operating under all North American Electric Reliability Council
standards has the responsibility to adjust its generation on an
instantaneous basis to match internal load and power flow across
interchange boundaries to other Control Areas. A utility operating a
Control Area is called a "controlling utility."
Contract No. 95MS-94862
9
(f) "Demand" means the maximum integrated hourly rate of delivery during
each month of each Contract Year for Firm Power deliveries under this
Agreement, as specified in Exhibit D.
(g) "Effective Date" means the date that this Agreement is signed by BPA.
(h) "Event" means the period during which BPA restricts service to the
Company under this Agreement to obtain Operating Reserves or Stability
Reserves. The Event shall commence with the reduction in deliveries to
the Company under this Agreement due to a BPA request for Operating
Reserves or a transfer trip or signal that initiates Stability
Reserves restriction. Unless reinstated as provided herein, the Event
shall end when BPA's dispatcher notifies the Company that the load
restricted for such reserves can be restored to service.
Notwithstanding the foregoing, the Event will end (subject to
reinstatement as provided herein) when system conditions occur that
would result in tripping the Company for undervoltage or
underfrequency load shedding. Any BPA restriction or series of BPA
restrictions that make up an SR Event shall be treated as part of a
single Event.
After an Event has ended, the Event shall be reinstated and continue
as follows:
(1) if the Event Magnitude was less than (Federal Load) x (15
minutes), then the Event shall be reinstated if BPA requests or
obtains Reserves from the Company again within 10 hours;
(2) if the Event Magnitude was equal to or greater than (Federal
Load) x (15 minutes), then the Event shall be reinstated if BPA
requests or obtains Reserves from the Company again within 21
hours;
Contract No. 95MS-94862
10
(3) if the Event Magnitude was equal to or greater than (Federal
Load) x (30 minutes), then the Event shall be reinstated if BPA
requests or obtains Reserves again within 42 hours;
(4) if the Event Magnitude was equal to or greater than (Federal
Load) x (60 minutes), then the Event shall be reinstated if BPA
requests Reserves again within 84 hours; and
(5) if the Event Magnitude was equal to or greater than (Federal
Load) x (90 minutes), then the Event shall be reinstated if BPA
requests or obtains Reserves again within 126 hours.
(i) "Event Duration" means the total cumulative Event Minutes of the
Event.
(j) "Event Magnitude" means a value calculated for each Event as the sum
of: (Requested Operating Reserves x Event Minutes associated with the
use of Operating Reserves) + (Amount of Load Tripped for Stability
Reserves x duration of the SR Event in minutes) for each restriction
during the Event. The Event Magnitude shall not include loads
restricted pursuant to operating reserves and stability reserve rights
that BPA has under other contracts.
(k) "Event Magnitude Limit" means the Federal Load multiplied by 90
minutes.
(l) "Event Minute(s)" means the minute(s) of restriction (or any portion
thereof) during an Event.
(m) "Excess Firm Energy" means Firm Energy that would have been delivered
to the Company for service to its expected Plant Load but is excess
due to a reduction in the Company's actual Plant Load.
(n) "Federal Load" means an hourly amount of energy equal to the lesser of
(1) 50 percent of the Process Load operating immediately prior to the
Event,
Contract No. 95MS-94862
11
or (2) 50 percent of the Firm Energy either scheduled to the Company,
remarketed to other Qualified Purchasers, used by BPA, or any
combination thereof.
(o) "FERC" means the Federal Energy Regulatory Commission, or its
successor.
(p) "Firm Energy" means the Federal energy that the Company has agreed to
purchase from BPA under this Agreement.
(q) "Firm Power" means the monthly amounts of Demand and Firm Energy (HLH
and LLH) purchased by the Company under this Agreement.
(r) "Heavy Load Hours" or "HLH" means those hours that begin at 6 a.m. and
end at 10 p.m., Monday through Saturday.
(s) "Light Load Hours" or "LLH" means all hours that are not HLH.
(t) "Material Plant Damage" means the inability of the Company to resume
industrial production at all or any portion of its plant because of
damage to plant production facilities resulting from a restriction;
for example, the inability to resume electrolysis in one or more pots
without rebuilding or substantially repairing such pot(s).
(u) "Non-Federal Service" means, for the purposes of section 18(a) of this
Agreement, the monthly amounts of demand, HLH energy and LLH energy
that the Company chooses to acquire from non-Federal entities to serve
a portion of its Plant Load during the term of this Agreement. The
Company agrees that such amounts must be supplied to the Plant Load.
The Company may purchase additional amounts of non-Federal energy that
will not be used in calculating the amount of curtailed energy
(v) "Occurrence" means a system condition that results in the need for
Reserves.
Contract No. 95MS-94862
12
(w) "Operating Reserves" means nonspinning reserves, provided by the
Company under this Agreement, that are necessary to enable BPA either
to reestablish its load/resource balance after loss of generation or
transmission facilities, or to meet any of its other existing
nonspinning operating reserve obligations. Operating Reserves provided
under this Agreement shall not include, without limitation: (1)
Stability Reserves provided by the Company in this Agreement; (2)
operating reserves provided by the Company in any other contract; and
(3) any other reserves that BPA has acquired under other arrangements.
(x) "Plant Load" means the total electrical energy load at Company
facilities eligible for BPA service during any given time period
whether the Company has chosen to serve its load with BPA power or
non-Federal power.
(y) "Process Load" means, for an aluminum facility or a chlor-alkali
facility, the electrolytic load.
(z) "Qualified Purchaser" shall mean a utility or entity which: (1) is
capable of performing the financial obligations undertaken for a sale
or for an option to buy; (2) meets BPA's standards of service,
including having an available transmission path; and (3) if required
by State or Federal law, the purchaser has received all necessary
approvals from appropriate regulatory bodies to conduct the
transaction with BPA.
(aa) "Rate Schedule" means the Industrial Firm Power Rate Schedule
(IP-96.5), the Point-to-Point Transmission Rate Schedule, exclusive of
the Delivery Charge therein (PTP-96.5), Ancillary Products and
Services Rate Schedule (APS-96), a rate schedule that includes the
fixed curtailment fee for the option specified in section 18(a), and
the General Rate Schedule Provisions established by BPA, and
applicable to sales under this Agreement. When
Contract No. 95MS-94862
13
Contract No. 95MS-94862 such Rate Schedule has received interim or
final approval by FERC, then it shall be attached hereto as Exhibit C.
(bb) "Rate Test" means: (1) the calculation of whether the total average
price in mills per kilowatthour, using the Rate Schedule, to determine
if such total average price is less than or equal to the price
specified in section 11(a) of this Agreement; (2) the determination of
whether the fixed curtailment fee, for purposes of section 18(a) of
this Agreement, is less than or equal to the amount specified in
section 11(b); and (3) the determination of whether the
use-of-facilities charge, as may be revised pursuant to section
8(b)(2) and Exhibit I, is less than or equal to the amount determined
pursuant to section 11(c). The Rate Test is further described in
section 11 of this Agreement.
(cc) "Requested Operating Reserves" means the amount of Operating Reserves,
pursuant to section 17, that the BPA dispatcher requests the Company
to trip for purposes of providing Operating Reserves.
(dd) "Reserves" means the Stability Reserves and Operating Reserves
provided by the Company under this Agreement.
(ee) "SR Event" means the period during which BPA implements a Stability
Reserve restriction. An SR Event shall be an Event for all purposes.
The beginning of the SR Event shall be identified by a transfer trip
or other signal from BPA to the Company restricting delivery of energy
under this Agreement. Unless reinstated as provided herein, the end of
the SR Event shall be identified by the BPA dispatcher's notification
to Company that delivery of all energy to which Company is entitled
under this Agreement can be restored. Notwithstanding the foregoing,
the Event will end (subject to reinstatement as provided herein) when
system conditions occur that result in tripping the Company for
undervoltage or underfrequency load shedding. If such undervoltage or
underfrequency load shedding signal is received by
Contract No. 95MS-94862
14
the Company prior to Event Minute 3 of the SR Event, then the
restriction shall be deemed an event of Force Majeure until service is
restored.
After an SR Event has ended, the SR Event shall be reinstated and
continue as follows:
(1) if the SR Event duration was 5 Event Minutes or less, then the SR
Event shall be reinstated if BPA restricts deliveries to Company
pursuant to its Stability Reserve rights within 2 hours or less
of the last SR Event Minute;
(2) if the SR Event duration was more than 5 Event Minutes but not
more than 15 Event Minutes, then the SR Event shall be reinstated
if BPA restricts deliveries to Company pursuant to its Stability
Reserve rights within 4 hours or less of the last SR Event
Minute;
(3) if the SR Event duration was more than 15 SR Event Minutes but
not more than 22 Event Minutes, then the SR Event shall be
reinstated if BPA restricts deliveries to Company pursuant to its
Stability Reserve rights within 6 hours or less of the last SR
Event Minute; and
(4) if the SR Event duration was more than 22 Event Minutes, then the
SR Event shall be reinstated if BPA restricts deliveries to
Company pursuant to its Stability Reserve rights within 8 hours
or less of the last SR Event Minute.
(ff) "Stability Reserves" means those reserves, provided by the Company
under this Agreement, that are necessary to ensure the stability of
the Federal Columbia River Transmission System against losses of
transmission facilities pursuant to the scheme(s) in Exhibit G or any
additional scheme(s) adopted pursuant to section 17 herein. Stability
Reserves provided under this Agreement shall not include, without
limitation: (1) stability reserves
Contract No. 95MS-94862
15
provided by the Customer in the General Transmission Agreement or in
other agreements; (2) operating reserves or forced outage reserves
that BPA has acquired under this Agreement or under other agreements;
and (3) any other reserves that BPA has acquired under other
arrangements.
(gg) "Take-or-Pay Obligation" means the obligation, as modified by section
14, of the Company to pay for the Firm Power purchased by the Company
under this Agreement. On an annual basis, the amounts of HLH and LLH
Firm Energy that the Company agrees to purchase from BPA is specified
in section 9(b) of this Agreement. The monthly amounts of HLH and LLH
Firm Energy shall be as specified in Exhibit D. The monthly Demand
amounts, for the purposes of this Take-or-Pay Obligation, shall be the
monthly Demand amounts specified in Exhibit D. If the calculation of
the Take-or-Pay Obligation for a Contract Year for which Demands are
not yet required to be specified under section 10(a) becomes relevant,
then the Demands for such Contract Year shall be calculated by
dividing the annual HLH Firm Energy, if any, for each such Contract
Year, as specified in section 9(b), by the number of HLH in a Contract
Year. Weekly, daily, and hourly amounts of HLH and LLH Firm Energy are
the amounts submitted by the Company pursuant to section 10 of this
Agreement.
7. EXHIBITS; INTERPRETATION
Exhibit A (General Contract Provisions), Exhibit B (Fees for Remarketing),
Exhibit C (Rate Schedule), Exhibit D (Monthly Amounts of Firm Power),
Exhibit E (Points of Delivery), Exhibit F (Unrecoverable Costs and Transfer
Costs), Exhibit G (Stability Reserve Scheme(s)), Exhibit H (Arbitration
Procedures), and Exhibit I (Use-of-Facilities Charge) are attached hereto
and made a part of this Agreement. If there is a conflict between the body
of this Agreement and any exhibit, then the body of this Agreement shall
prevail. If there is a conflict between Exhibit C and any other exhibit,
then all other exhibits shall prevail over Exhibit C.
Contract No. 95MS-94862
16
8. CONTRACT REVISIONS AND WAIVERS
(a) Amendments and Exhibit Revisions
Except as otherwise expressly provided to the contrary in this
Agreement, the provisions of the body of this Agreement may be amended
only by the mutual written agreement of the Parties hereto subsequent
to the date of execution of this Agreement.
(b) Exhibit Revisions
(1) Revision of Exhibits A through H
Except as otherwise expressly provided to the contrary in this
Agreement, the provisions of Exhibits A through H may be revised
only by the mutual written agreement of the Parties hereto
subsequent to the date of execution of this Agreement.
(2) Revision of Exhibit I
Exhibit I may be revised by BPA in the same manner and under the
same terms and conditions for revision of the use-of-facilities
charge under the IR Transmission Agreement, as amended or
replaced, except as limited by the terms and conditions of
Exhibit I.
(c) Waivers
(1) Failure by a Party to exercise any right, remedy, or option
hereunder or delay in exercising such right, remedy, or option
shall not operate as a waiver by such Party of its right to
exercise any such right, remedy, or option prior to the time such
right, remedy, or option expires by an express term of this
Agreement; nor shall such failure or delay by such Party operate
as a waiver of any right, remedy or option that may arise from a
subsequent event under the relevant provisions of this Agreement.
Contract No. 95MS-94862
17
(2) The Parties may agree to waive any provision of this Agreement to
address temporary problems or unforeseen circumstances. Any such
waiver shall be in writing and shall clearly specify the period
of time for which the waiver is in effect. The consent of the
other Party to such a waiver shall not be unreasonably withheld.
No Party shall claim that the granting of a waiver sets a binding
precedent for future waivers, even if similar waivers are granted
throughout the term of this Agreement.
9. PURCHASE AND SALE OF ANNUAL TAKE-OR-PAY FIRM ENERGY
(a) Mutual Obligation
BPA shall sell and deliver to the Company and the Company shall
purchase from BPA, for service to its Plant Load, annual amounts of
HLH and LLH Firm Energy on a take-or-pay basis, as specified in
section 9(b).
(b) Annual Amounts of Firm Energy
The Company shall purchase, during each Contract Year, the following
annual amounts of HLH and LLH Firm Energy:
---------------------------------------------------------------------
Firm HLH Energy Firm LLH Energy
Contract Year (megawatthours) (megawatthours)
---------------------------------------------------------------------
1996-1997 569,440 425,670
1997-1998 450,720 337,680
1998-1999 476,560 356,840
1999-2000 502,400 376,000
2000-2001 499,200 376,800
---------------------------------------------------------------------
(c) Other Purchases
This Agreement does not limit the Company's right to purchase power
from BPA, consistent with Federal statutes, under other agreements, or
to purchase power from third parties.
Contract No. 95MS-94862
18
(d) Minimum Demand for Transmission
A Company may elect to specify a minimum level of Demand for
transmission for any month for the remaining term of this Agreement at
the time the Company makes its submission of monthly amounts of Firm
Power. Any request to specify a minimum level of Demand made after
February 1, 1996, shall be subject to available transmission capacity
as described in section 10(a). The Company may assign any excess
minimum Demand for transmission consistent with terms for Assignment
of Transmission Service under BPA's Point-to-Point Transmission
Service Tariff. The amount of minimum Demand for transmission as
elected or assigned shall be specified in Exhibit D.
10. MONTHLY, WEEKLY, DAILY, AND HOURLY AMOUNTS OF FIRM POWER
(a) Monthly Amounts of Firm Power
Not later than the February 1, immediately prior to October 1 of each
Contract Year, the Company shall specify monthly amounts of Demand and
HLH and LLH Firm Energy for such Contract Year. The total of the
monthly amounts of HLH and LLH Firm Energy shall equal the annual
amounts specified in section 9(b) for such Contract Year. The Company
may set its Demand in each month in the 1996-1997 Contract Year at any
level up to its Contract Demand. Any increase in amounts of Demand for
a specific month in a later Contract Year above the greater of: (1)
the amount of Demand for such month in the previous Contract Year; or
(2) the minimum level of Demand for transmission specified in Exhibit
D; is subject to BPA's determination of available transmission
capacity. If additional generating resources integrated at points with
transmission capacity available to the Company's points of delivery
are available for BPA's use or purchase, then BPA shall determine that
transmission capacity is available under this Agreement. BPA shall
also treat as available any transmission capacity made available by
the Company to BPA through a reduction in demand under any other
transmission agreement with BPA. If BPA determines that
Contract No. 95MS-94862
19
firm transmission capacity is not available for the Company's request,
BPA will notify the Company within 60 days of the approved level of
Demand. Each year, Exhibit D shall be revised to reflect the amounts
specified by the Company, consistent with this section 10(a).
(b) Weekly, Daily, and Hourly Amounts of Firm Power
The Company shall either: (i) provide advance submittals of weekly,
daily, and hourly amounts of Firm Energy and any Excess Firm Energy
pursuant to section 10(b)(1), which will remain as submitted unless
changed pursuant to section 10(b)(2); or (ii) provide such submittals
pursuant to the terms of section 10(b)(2) only.
(1) Advance Submittals of Weekly, Daily, and Hourly Amounts of Firm
Energy
The Company may submit weekly, daily, and hourly amounts in
advance of, but not later than allowed under section 10(b)(2).
Such advance submittals shall specify HLH and LLH amounts of Firm
Energy to be delivered hereunder until the Company changes its
submittal. The Company may change any advance submittal pursuant
to section 10(b)(2). All advance submittals shall include a
beginning and ending hour.
(2) Submittals of Weekly, Daily, and Hourly Amounts of Firm Power
(A) Weekly Amounts of Firm Power
At least 2 months prior to the delivery month, the Company
shall provide BPA with its notice of weekly amounts of HLH
and LLH Firm Energy for each month. The total of the
Company's weekly amounts of HLH and LLH Firm Energy during a
month shall be equal to the monthly amounts specified in
Exhibit D for such month. For transition weeks
Contract No. 95MS-94862
20
(weeks that include days from the prior month or days from a
subsequent month), the Company shall identify the amounts of
HLH and LLH Firm Energy associated with each monthly period.
The Company may request a waiver to provide for changes in
weekly amounts of HLH and LLH Firm Energy on less than 2
months' prior notice, if the request is due to temporary or
unanticipated operational problems.
(B) Daily Amounts of Firm Power
No later than the Wednesday prior to the
Sunday-through-Saturday weekly delivery period, the Company
shall provide BPA with notice of its daily amounts of
required HLH and LLH Firm Energy. The sum for HLH and LLH of
the daily amounts for the week shall be equal to the weekly
amounts. For transition weeks, the Company shall identify
the daily amounts associated with each monthly period.
(C) Hourly Amounts of Firm Energy
The Company shall specify, orally or in writing, hourly
amounts of Firm Energy in whole megawatthours not later than
2 p.m. on the workday prior to the day or days of delivery.
Such specified amounts shall be scheduled amounts for all
purposes under this Agreement. The sum of the Company's
hourly amounts for HLH and LLH Firm Energy for the day shall
be equal to its daily amount for HLH and LLH Firm Energy.
The specified amount of LLH Firm Energy for any LLH shall
not be less than 50 percent of the Company's average hourly
amount of LLH Firm Energy for the day.
Contract No. 95MS-94862
21
11. RATE TEST COMPLIANCE
For purposes of the Company's right to terminate under section 5(a), the
Rate Test will be satisfied only if all of the following conditions
specified in sections 11(a), 11(b), and 11(c) are met.
(a) Rate Test for Delivered Firm Power
The total average price (excluding the use-of-facilities charge) for
Firm Power delivered to the Company during each Contract Year,
including all charges for Firm Energy; Demand; reactive power;
transmission on a point-to-point basis (excluding the delivery
charge); load regulation; and any other applicable charge, is 22.1
mills per kilowatthour or less.
The total average price shall be calculated from the Rate Schedule by
summing all applicable charges as provided above for the purchase of
equal hourly amounts of delivered Firm Power for each hour of each
Contract Year of this Agreement, and dividing the resulting sum by the
total number of kilowatthours of such sale in the Contract Year. In
calculating the total average price, the calculation shall assume a
Plant Load equal to the delivered amounts used in the calculation, a
constant power factor of 0.98 lagging, and shall not assume any
purchase of load shaping products, any preschedule changes, any
remarketing of Excess Firm Energy, or any Unauthorized Increases. For
purposes of calculating the total average price, BPA shall use the
lowest firm transmission rate in the Rate Schedule for deliveries to
the Company's facilities.
(b) Rate Test for Fixed Curtailment Fee
The fixed curtailment fee in the Rate Schedule is less than or equal
to 5 mills per kilowatthour.
Contract No. 95MS-94862
22
(c) Rate Test for Use-of-Facilities Charge
The use-of-facilities charge specified in Exhibit I is less than or
equal to the use-of-facilities charge that is used for deliveries of
non-Federal power under the IR Transmission Agreement, and is
calculated pursuant to Exhibit I.
12. RATES AND CHARGES
(a) The rates and charges for all services provided by BPA under this
Agreement (exclusive only of charges for additional power or optional
services specifically requested by the Company) shall be as specified
in Exhibit B, and the Rate Schedule in Exhibit C, and Exhibit I, and
shall include no other fee or charge, other than those specified in
Exhibits, B C, and I. Such Rate Schedule shall not be revised except
as required in a remand order of FERC or a court upon direct review of
the Rate Schedule. Exhibit I may be revised pursuant to the provisions
of section 8(b)(2).
(b) If the Company specifies a minimum level of Demand for transmission
pursuant to section 9(d), the charge for the amount by which such
monthly minimum Demand for transmission exceeds the Demand in any
month shall be the Embedded Cost Network Charge under Rate Schedule
PTP-96.5.
13. BILLING AND PAYMENT
Bills for power shall be rendered monthly by BPA. Failure to receive a bill
shall not release the Company from liability for payment. If requested by
the Company, BPA will electronically transmit the Company's power bill to
the Company on the issue date of the bill, provided the Parties have
compatible electronic equipment. BPA may elect to electronically transmit
only that portion of the bill showing the amount owed. If the entire bill
is not provided by electronic means, BPA will also send the Company a
complete copy of its power bill by mail.
Contract No. 95MS-94862
23
(a) Due Date
Bills shall be due by close of business on the 20th day after the date
of the bill (Due Date). This requirement also holds for revised bills
(see section 13(h)). If the 20th day is a Saturday, Sunday, or Federal
holiday, the Due Date shall be the next business day.
(b) Payments of $50,000 or More
(1) If the Company's monthly bill from BPA is $50,000 or more, the
Company must pay by wire transfer using procedures established by
BPA's Financial Services Group, unless the Company has obtained
the right to pay by mail as provided in section 13(b)(2). Wire
transfer amounts are due and payable on the Due Date.
(2) The Company may pay its bill by mail even if the amount exceeds
$50,000, provided the following conditions have been met:
(A) the Company gives BPA 30 days' notice of its intent to pay
by mail;
(B) The Company ensures that BPA receives full payment by the
above-stated Due Date; and
(C) the Company has not incurred late payment charges while
paying its bills by mail.
If the Company incurs a late payment charge while paying its
bills under this payment provision, BPA may rescind the Company's
right to pay bills of $50,000 or more by mail. The Company would
then be required to pay by wire transfer as provided in section
13(b)(1).
Contract No. 95MS-94862
24
(c) Payments of Less than $50,000 If the Company's monthly bill from BPA
is less than $50,000, the Company may pay the bill by mail. Payment
for such bills will be accepted as timely if the payment is postmarked
by the Due Date. Payments shall be mailed to:
Bonneville Power Administration
P.O. Box 6040
Portland, OR 97228-6040
(d) Computation of Bills
Bills for products and services purchased under this Agreement shall
be rounded to whole dollar amounts, by eliminating any amount which is
less than 50 cents and increasing any amount from 50 cents through 99
cents to the next higher dollar.
(e) Estimated Bills
At its option, BPA may elect to render an estimated bill for a month
to be followed at a subsequent billing date by a final bill for that
month. Such estimated bill shall have the validity of, and be subject
to, the same payment provisions as a final bill.
(f) Late Payment
Bills not paid in full on or before close of business on the Due Date
shall be subject to an interest charge of one-twentieth percent (0.05
percent), applied each day to the unpaid balance. This interest charge
shall be assessed on a daily basis until such time as the unpaid
amount is paid in full.
Remittances received by mail which are not required to be paid by wire
transfer will be accepted without assessment of the charges referred
to in the preceding paragraph of this section 13(f), provided the
postmark indicates the payment was mailed on or before the Due Date.
Contract No. 95MS-94862
25
(g) Disputed Bills
In the event of a billing dispute, the Company agrees to note the
disputed amount and pay its power bill in full by the Due Date. The
amount billed is subject to late payment charges until paid in full.
If it is determined that the Company is entitled to a refund of any
portion of the disputed amount, then BPA will make such refund with
interest computed from the date of receipt of the disputed payment.
Interest will be computed using an interest rate of one-twentieth
percent (0.05 percent) applied each day to the disputed payment
amount. BPA shall not be liable for interest prior to the time the
Company notifies BPA of the dispute. Disputed bills are subject to the
terms and conditions of section 22 of this Agreement.
(h) Revised Bills
As necessary, BPA may render revised bills. The date of a revised bill
shall be its issue date.
(1) If the amount of the revised bill is more than the amount of the
previous bill, the previous bill remains due on its Due Date, and
the additional amount is due on the Due Date of the revised bill.
(2) If the amount of the revised bill is less than the amount of the
previous bill, the obligation to pay the previous bill is
satisfied by payment of the revised bill on the Due Date of the
previous bill.
(3) If the revised bill changes the Party to whom money is due, the
previous bill is canceled and the amount owed the other Party is
due on the Due Date of the revised bill.
(4) If payment of the previous bill results in an overpayment, a
refund is due on the later of: (A) the Due Date of the revised
bill, or (B) 20 days after the receipt of the payment for the
original bill.
Contract No. 95MS-94862
26
14. RELIEF FROM TAKE-OR-PAY OBLIGATION
(a) Hourly Amounts
BPA shall relieve the Company of its Take-or-Pay Obligation for any
hourly decrease in Firm Power usage below the scheduled amount of Firm
Power for any hour, to the extent that such decrease is less than or
equal to the greater of 1 megawatt or 5 percent of the Firm Power
scheduled for such hour; provided, however, that BPA shall relieve the
Company of its Take-or-Pay Obligation for up to 15 percent of the Firm
Power scheduled for such hour, if the Company demonstrates to BPA that
an operational occurrence took place that caused a reduction in Plant
Load.
(b) Daily Amounts
BPA shall relieve the Company of its Take-or-Pay Obligation for any
daily decrease in Firm Power usage below the Company's daily amount of
HLH and/or LLH Firm Energy, to the extent that such decrease is less
than or equal to the greater of 1 average megawatt or 5 percent of the
daily HLH and/or LLH Firm Energy for the day.
(c) Monthly Amounts
BPA shall relieve the Company of its Take-or-Pay Obligation for any
monthly decrease in Firm Power usage below the Company's monthly
amount of HLH and/or LLH Firm Energy, to the extent that such decrease
is less than or equal to the greater of 1 average megawatt or 1
percent of the Firm Power specified in Exhibit D for such month.
(d) Maintenance Outage
In addition to any other relief provided herein, BPA shall relieve the
Company of its Take-or-Pay Obligation for any Firm Energy that cannot
be delivered due to an interruption pursuant to section 4(f) of
Exhibit A.
Contract No. 95MS-94862
27
(e) Restricted Energy
The Company shall not be required to pay BPA the Rate Schedule energy
charge for the amount of energy restricted by BPA, or the amount of
energy the Company cannot use prior to the restoration of plant
operations following any such restriction.
15. UNAUTHORIZED INCREASE CHARGES
(a) Measured Amounts in Excess of Scheduled Amounts
Measured Demand and Measured Energy, as those terms are defined in
Exhibit C, General Rate Schedule Provisions, which is not assigned to
classes of power delivered under other agreements, shall be deemed to
be a Firm Power delivery under this Agreement. In lieu of the Demand
and Firm Energy charges under the Rate Schedule, BPA will assess the
Unauthorized Increase charge specified in the Rate Schedule for any
hourly amount of Measured Demand or Measured Energy in excess of the
lesser of the amount scheduled for such hour or the Demand for any
HLH, to the extent that such hourly excess exceeds the larger of:
(1) 1 megawatt; or
(2) 1 percent of the scheduled amount of Firm Power on any such
hour.
(b) Scheduled Amounts in Excess of Daily Amounts
BPA shall assess an Unauthorized Increase charge for any scheduled
daily amounts of HLH or LLH Firm Energy that exceeds the Company's
daily amount of Firm Energy for HLH or LLH established pursuant to
section 10(b)(2)(B).
Contract No. 95MS-94862
28
(c) Firm Power Deliveries to Plant Load Dedicated to Non-Federal Service
BPA shall assess an Unauthorized Increase charge for any delivery of
Firm Power to Plant Load served by Non-Federal Service when the
Company has elected to curtail its purchases pursuant to section
18(a), unless such deliveries are allowed under an applicable rate
schedule or under a separate agreement between the Parties.
16. CHANGES IN FIRM POWER AMOUNTS
(a) The Company may request, and BPA may, but shall not be obligated to
provide monthly or annual amounts of Firm Power that differ from the
amounts specified in Exhibit D.
(b) BPA shall not grant such request if the change shall cause BPA's Firm
Power obligation to exceed the Company's Contract Demand.
(c) If BPA grants the request, the changes shall be reflected in a
revision to Exhibit D to be executed by the Parties.
(d) The amounts of Firm Power in the revised Exhibit D shall be purchased
and sold at the applicable rates specified in Exhibit C of this
Agreement.
17. RESERVES
(a) Operating Reserves
In the event of an Occurrence requiring the use of Operating Reserves,
unless otherwise provided by separate agreement, the Company shall,
within 5 minutes of receiving an appropriate request from BPA, provide
Operating Reserves by reducing its Federal Load for up to 120 Event
Minutes as follows:
Contract No. 95MS-94862
29
(1) Amount of Requested Operating Reserves
The amount of Requested Operating Reserves will be specified by
BPA in its request; provided that the amount of Requested
Operating Reserves shall not exceed the Federal Load at the time
of BPA's notice.
(2) Use of Other Operating Reserves
BPA shall use all other operating reserves available to BPA,
including reserves available from parties other than direct
service industry customers, prior to using Operating Reserves
under this Agreement.
(3) Company Failure to Respond to BPA's Request for Operating
Reserves
If the Company fails to respond to BPA's request for Operating
Reserves by voluntarily reducing its load to the level requested
within 5 minutes after BPA's request for Operating Reserves, BPA
may unilaterally restrict (Unilaterally Restrict(ed)) an amount
up to the Company's entire Process Load so that BPA can obtain
the Requested Operating Reserves in a timely manner; provided in
the event BPA Unilaterally Restricts the Company's load by
opening a circuit breaker, BPA shall open the circuit breaker
that results in the smallest load reduction necessary to achieve
BPA's Requested Operating Reserves. In the event that BPA
Unilaterally Restricts the Company's load, BPA will work with the
Company to restore service to the nonreserve portion of its load
as soon as practicable, but in any event within 90 minutes. BPA
will not provide compensation for any service in excess of the
Requested Operating Reserves Unilaterally Restricted due solely
to the Company's failure to respond in a timely manner to BPA's
request for Operating Reserves. In the event BPA Unilaterally
Restricts the Company's load, for purposes of calculating Event
Magnitude and liquidated damages, BPA shall be deemed to restore
non-BPA power service prior to restoring BPA power service.
Contract No. 95MS-94862
30
BPA shall not unreasonably refuse to cooperate with the Company,
at the Company's expense, if the Company requests to install
circuit breakers, at the Company's expense, to allow for greater
flexibility in the amount of Company's load that would be
susceptible to a Unilateral Restriction.
(b) Stability Reserves
The Company shall provide Stability Reserves up to the hourly amount
of Firm Power delivered to the Company under this Agreement and for
a period of up to 30 Event Minutes per Event as provided herein:
(1) Amount of Stability Reserves
When necessary to provide Stability Reserves, BPA may restrict
deliveries of Firm Power under this Agreement to Company's
aluminum smelter Process Load for a period of up to 30 Event
Minutes per Event pursuant to the scheme(s) listed in Exhibit G
and to Company's other loads under any additional scheme(s)
adopted pursuant to this section 17(b)(3); provided, that BPA
shall have the sole right to determine whether to restrict all or
part of Company's energy subject to restriction hereunder when an
SR Event occurs.
(2) Additional Installations
In the event that the Company makes less than 100 percent of its
Process Load available to BPA for Stability Reserves under this
Agreement or under other agreements, the Company shall pay all
costs for such additional installations as may be needed at the
Company's facilities or BPA's facilities used solely to serve the
Company to allow for the restriction of only a portion of the
Company's load.
Contract No. 95MS-94862
31
(3) Additional Stability Reserve Schemes To the extent BPA
determines:
(A) the need for additional Stability Reserve scheme(s) not
listed in Exhibit G that would restrict, at a frequency and
duration similar to the scheme(s) listed in Exhibit G, the
energy subject to restriction under this Agreement,
(B) the need to apply Stability Reserve schemes listed in
Exhibit G and additional Stability Reserve scheme(s) to
energy delivered under this Agreement to nonaluminum direct
service industries, or
(C) the need for modifications to the elements of schemes listed
in Exhibit G that would significantly change the expected
frequency or duration of restrictions, then:
(D) the Company agrees to cooperate in the development of such
scheme(s) and shall not unreasonably withhold its consent to
implementation of such scheme(s), at BPA's expense.
BPA shall consult with the Company on the need for such schemes,
the operational characteristics as they affect the Company, and
the additional compensation for such scheme(s) (except for the
application of the Stability Reserve schemes listed in Exhibit G
to energy delivered under this Agreement to nonaluminum direct
service industries) that BPA shall pay, and;
BPA shall consider alternative methods and costs, including
purchases from entities other than direct service industry
customers, for obtaining such additional reserves.
Contract No. 95MS-94862
32
(c) General Provisions
(1) Restoration of Service
Notwithstanding any other provision of this Agreement, BPA shall
end the Event as soon as possible. The Company agrees to
cooperate in the development of mechanisms that will enhance
BPA's ability to notify the Company of the end of an Event.
(2) No Right to Cause Material Plant Damage
Notwithstanding any other provision of this Agreement, including
the breach and damages provisions, BPA shall have no contractual
right under this Agreement which would cause the Company to incur
Material Plant Damage as a result of providing Reserves;
provided, BPA shall not be liable for damages for such Material
Plant Damage that occurred prior to reaching the Event Magnitude
Limit or prior to Event Minute 46 for an SR Event.
(3) Compensation for Reserves
The Company shall be compensated for providing reserves through
the credit in the applicable power rate in the Rate Schedule for
all Events with an Event Magnitude less than or equal to the
Event Magnitude Limit, and for all SR Events of an Event Duration
of 30 minutes or less.
(4) Liquidated Damages
The Parties acknowledge that restrictions beyond that allowed by
this Agreement may result in damage to and lost production by the
Company's production facilities prior to Material Plant Damage
and that such damage is difficult to quantify. Therefore the
Company may recover from BPA liquidated damages as follows:
Contract No. 95MS-94862
33
(A) If an SR Event Duration exceeds 30 Event Minutes, then BPA
shall be liable to Company as follows:
(i) 200 mills per kilowatthour of restricted energy during
SR Event Minutes 31 through 45 (or portion thereof) of
an SR Event; and
(ii) 400 mills per kilowatthour of restricted energy during
SR Event Minutes (or portion thereof), after SR Event
Minute 45 of an SR Event; or
(B) If the Event Magnitude of any Event exceeds the Event
Magnitude Limit, then BPA shall be liable to the Company for
200 mills per kilowatthour for each kilowatthour that the
Event Magnitude exceeds the Event Magnitude Limit.
Each megawatt of restricted load that is subject to both sections
17(c)(4)(A) and 17(c)(4)(B) shall be paid for at the highest
level specified under either section 17(c)(4)(A) or section
17(c)(4)(B), but shall not be paid for under both sections
17(c)(4)(A) and 17(c)(4)(B).
(5) Material Plant Damage
In lieu of section 17(c)(4)(A)(ii) or 17(c)(4)(B), at the
Company's option, if the SR Event Duration exceeds 45 SR Event
Minutes, or an Event exceeds the Event Magnitude limit and the
Company incurs, in its determination, Material Plant Damage as a
direct result of the restriction, then as to the portion of its
production facilities that suffers Material Plant Damage, BPA and
the Company agree that these damages can be reasonably quantified
and, therefore, for that portion of its production facilities,
the Company may recover actual damages (excluding only lost
production and lost profits). Such actual
Contract No. 95MS-94862
34
damages shall not exceed $30 per kilowatt of plant production
facilities suffering Material Plant Damage. The liquidated
damages charges in sections 17(c)(4)(A)(ii) and 17(c)(4)(B) shall
continue to apply to that portion of Company's load which the
Company does not determine has suffered Material Plant Damage.
BPA shall not be liable for any portion of Material Plant Damage
associated with restrictions to service to the Company's load
resulting from stability or operating reserves which the Company
provides to others or provides for its own use. In the event that
Material Plant Damage is a result of a Company's load being
restricted under this Agreement and under other agreement(s)
between BPA and the Company or between the Company and a third
party (or parties), then BPA shall be liable under this Agreement
only for a portion of the Material Plant Damage. BPA's share of
the Material Plant Damage under this Agreement shall be based on
the ratio of: the Event Magnitude divided by the sum of Event
Magnitude and the number of megawatt-minutes of such other
restriction during, or immediately before or after the Event.
(6) Makeup Power
At the Company's request, BPA shall sell and deliver to the
Company energy in excess of the amount shown in Exhibit D (Makeup
Power), at the applicable energy charge only established for Firm
Energy in the Industrial Firm Power Rate in the Rate Schedule, to
the extent that such energy is needed by the Company to restore
its operations following a restriction. Such Makeup Power shall
not subject the Company to any Unauthorized Increase or other
charge.
18. CURTAILMENT OR REMARKETING
The Company shall have a one-time option, at the time the Company makes its
first submission of monthly amounts of Firm Power pursuant to section 10(a)
of this
Contract No. 95MS-94862
35
Agreement, to either: curtail its purchases pursuant to section 18(a); or
remarket Excess Firm Energy pursuant to section 18(b). Following the
Company's election, BPA and the Company shall operate under the terms and
conditions of either section 18(a) or section 18(b), as applicable.
(a) Curtailment of Excess Firm Energy for a Fixed Fee
The Company may curtail its Plant Load below the sum of its
Take-or-Pay Obligation plus any amount of Non-Federal Service the
Company identifies at the time it elects this curtailment option. BPA
shall relieve the Company of its Take-or-Pay Obligation for Demand and
Firm Energy for any such curtailed amounts and the Company shall pay
BPA the fixed curtailment fee in mills per kilowatthour for each
kilowatthour of such curtailed amounts, as specified in the Rate
Schedule. Selection of this curtailment option shall relieve the
Company of its obligation to pay the use-of-facilities charge
specified in Exhibit I for amounts of curtailed energy.
(1) The Company shall provide BPA as much notice as possible, but not
less than 48 hours, of any curtailment of Firm Power usage.
(2) If the Company chooses to use Non-Federal Service for part of its
Plant Load, the Company shall specify the monthly amounts of
demand, HLH energy, and LLH energy of Non-Federal Service, if
any, for the term of this Agreement. BPA shall not be obligated
to serve these specified monthly amounts, and any service to
these amounts shall be subject to an Unauthorized Increase
charge, as provided for in section 15(c).
(3) Curtailed energy shall be equal to the Company's Take-or-Pay
Obligation for Firm Energy reduced by the relief from take-or-pay
provisions of section 14, minus the Measured Energy for Firm
Power delivered under this Agreement.
Contract No. 95MS-94862
36
(4) Election of this curtailment option operates to assign the
Company's right to transmit an amount of energy equal to the
curtailed energy to BPA.
(b) Remarketing Excess Firm Energy Without a Fixed Fee
(1) Notice and Request to Remarket
The Company shall request that BPA remarket Excess Firm Energy
by notifying BPA of:
(A) the amount and minimum duration of Excess Firm Energy to be
remarketed; and
(B) the manner pursuant to section 18(b)(2) in which the Company
wants BPA to remarket the Excess Firm Energy.
(2) Remarketing Options
The Company may select one or more of the following options for
remarketing Excess Firm Energy:
(A) The Company may identify one or more Qualified Purchasers
that have agreed to purchase some or all of the Excess Firm
Energy under specified terms and conditions at agreed-upon
prices or price formulas and for agreed-upon amounts and
durations. The Company shall provide BPA at least the notice
specified in section 18(b)(3) prior to the date that
deliveries are to begin under each proposed sale.
(B) The Company may arrange in advance for a Qualified
Purchaser(s) to purchase any Firm Power that becomes Excess
Firm Energy during any period for which the Company and a
Qualified Purchaser may agree. The Company shall provide
Contract No. 95MS-94862
37
BPA at least the notice specified in section 18(b)(3) prior
to the date on which the prearrangement becomes effective.
In addition, the Company shall notify BPA as required in
section 10(b) when deliveries are to begin under the
arrangement.
(C) The Company may request that BPA find purchasers for the
Excess Firm Energy. If the Company chooses, it may request
that BPA seek sales of specified amounts for daily, weekly,
monthly, or other specified durations, and the Company may
specify minimum prices or price ranges for the sales. BPA
and the Company shall agree on the price of the sale at the
time of the transaction unless the daily limitations in
section 18(b)(4)(E) apply. BPA shall promptly notify the
Company of the sales made on the Company's behalf.
(D) The Company and BPA may agree to a price for use in
crediting the Company's wholesale power bill under section
18(b)(4). BPA shall have discretion to dispose of or use
such Excess Firm Energy without regard to the procedures
associated with other options for disposal, and the Company
shall have no further rights with respect to such Excess
Firm Energy that is subject to such agreement.
(3) Applicability of Preference Provisions
Excess Firm Energy remarketed by BPA shall be subject to
applicable statutory provisions regarding preference. BPA shall
notify the Company within the time period specified below if BPA
or another Qualified Purchaser with public preference has elected
to perform the agreement.
Contract No. 95MS-94862
38
----------------------------------------------------------------
Minimum Maximum Period
Notice Period for BPA to Respond
Duration of Sale to Notify BPA to Company
----------------------------------------------------------------
Up to 1 month 48 hours 24 hours
Up to 6 months 7 days 2 days
Over 6 months 14 days 7 days
Prearrangements under 21 days 14 days
section 18(b)(2)(B)
----------------------------------------------------------------
(4) Crediting the Company's Wholesale Power Bill
(A) During months when Excess Firm Energy is being remarketed by
BPA, such power shall continue to be included in the amount
of Firm Power billed by BPA as if delivered to the Company.
(B) BPA may sell the Excess Firm Energy to the Qualified
Purchaser(s) as arranged by the Company under options
section 18(b)(2)(A) and section 18(b)(2)(B) or dispose of
such power on whatever alternative terms that BPA may
separately arrange. In either event, BPA shall credit the
Company for the Excess Firm Energy revenues based on the
price(s) agreed to between the Company and the Qualified
Purchaser(s) net of the amounts specified in section
18(b)(4)(C).
(C) BPA shall determine the revenues for Excess Firm Energy
delivered during a month by subtracting from the amount paid
by the Qualified Purchaser (or the amount agreed to be paid
or credited if BPA elects not to remarket to the Qualified
Purchaser, disposes of or uses the Excess Firm Energy under
section 18(b)(2)(D), or remarkets the Excess Firm Energy
under section 18(b)(2)(C)): (i) any applicable transmission
charges or losses specified in section 18(b)(4)(F); and (ii)
the remarketing fee, as specified in Exhibit B. The fee or
the pro rata share of the fee that the Company would have
paid to
Contract No. 95MS-94862
39
another entity under a transaction under section 18(b)(2)(B)
shall be deducted from revenues when BPA elects to retain
the Excess Firm Energy for itself. No charges shall apply
under section 18(b)(4)(C)(i) and section 18(b)(4)(C)(ii)
when BPA uses such Excess Firm Energy for its own use or
disposes of such Excess Firm Energy under section
18(b)(2)(D).
(D) BPA shall credit the Company's wholesale power bill for
revenues from sales of Excess Firm Energy in the month in
which BPA uses such Excess Firm Energy for its own use or
disposes of such Excess Firm Energy under section
18(b)(2)(D), BPA is paid for such Excess Firm Energy under
section 18(b)(2)(C), or BPA is paid for such Excess Firm
Energy by the Qualified Purchaser. If the amount of the
credit during any month exceeds the power bill amount, then
BPA shall pay the Company the amount of the difference.
(E) BPA shall credit the Company for sales made under section
18(b)(2)(C) on Company's behalf subject to the limitations
in this paragraph. For sales of 1 month duration or less, if
BPA notified the Company at the start of a transaction that
it was subject to daily remarketing limitations and BPA is
simultaneously remarketing power for the Company and selling
nonfirm energy on a daily basis, then the Company shall
receive credit for the energy that BPA remarkets on the
Company's behalf on such days at BPA's average sale price
for nonfirm energy (including remarketed energy) for such
day; provided, however, BPA shall have no obligation to
credit the Company at such average daily price to the extent
that the total amount of Excess Firm Energy remarketed under
similar contract provisions for the Company and other
entities
Contract No. 95MS-94862
40
providing for daily remarketing limitations exceeds the
following limits:
------------------------------------------------------------
If BPA's actual daily
average sales (excluding Limit to total amount
remarketed amounts) are: of remarketed energy:
------------------------------------------------------------
equal to
or greater but less
than (aMW) than (aMW) (aMW)
------------------------------------------------------------
0 600 25% of BPA actual sales
600 1,000 200
1,000 1,500 250
1,500 3,000 300
3,000 4,000 400
4,000 5,000 500
5,000 - - 600
------------------------------------------------------------
In the event the above limits are exceeded, the Company
shall be credited for its pro rata share of remarketed
energy at the average daily price. All sales of remarketed
energy for each day under the daily remarketing limitations
shall be considered made under a single active schedule to
determine remarketing fees. Sales of remarketed energy under
the daily remarketing limitations shall be considered made
over the southern intertie during the months of April
through July, and in the Pacific Northwest during other
months. The Company may request that BPA remarket the
remainder of its Excess Firm Energy at the best available
price for additional energy, or the Company may arrange to
store the Excess Firm Energy for sale at another time. BPA
shall not discriminate against the Company in the storage or
disposal of such remaining Excess Firm Energy.
(F) There are no additional transmission charges for Excess Firm
Energy except when:
(i) BPA incurs incremental transfer costs, including
losses,
Contract No. 95MS-94862
41
(ii) the Qualified Purchaser receiving delivery would have
paid a charge for low-voltage delivery higher than the
charge, if any, paid by the Company.
The Company shall pay such incremental costs. Any deliveries
of Excess Firm Energy over BPA's interties shall be charged
BPA's standard intertie tariffs. Losses will be valued at
the price of the remarketed power.
19. LOAD REGULATION, UNBUNDLED PRODUCTS, AND OTHER TRANSMISSION PRODUCTS
(a) Purchase of Load Regulation
If the Company is within BPA's Control Area, or if BPA provides load
regulation services to the Company through a third party, the Company
shall purchase load regulation from BPA. The charge for load
regulation shall be as specified in Exhibit C.
(b) Moving Out of BPA's Control Area
The Company may elect to discontinue the purchase of load regulation
from BPA by notifying BPA of its intent to either:
(1) establish its own Control Area consistent with the
then-applicable requirements of the North American Electric
Reliability Council (NERC), the Western Systems Coordinating
Council (WSCC), and the Northwest Power Pool (NWPP); or
(2) locate in another Control Area operating in accordance with NERC,
WSCC and NWPP standards.
Contract No. 95MS-94862
42
(c) Schedule for Changing Control Areas
(1) Upon notice by the Company that the Company intends to move out
of BPA's Control Area, BPA shall use best efforts to effectuate
the change of Control Area within a reasonable period of time
from the date of request, provided, however, that the Company
obtains the full cooperation of any third party to take all steps
required for BPA to accomplish the change consistent with
applicable NERC, WSCC, and NWPP standards.
(2) Within a reasonable time, which may be less and shall not exceed
60 days following receipt of the Company's notice of intent to
change Control Areas, BPA shall provide the Company with:
(A) an estimate of the schedule for making the necessary
changes, and
(B) an estimate of the costs that BPA will incur in making the
required changes.
(3) BPA shall continue to charge the Company for load regulation
until the date that another Control Area assumes full Control
Area responsibility.
(4) If the Company moves out of BPA's Control Area, the Parties shall
schedule Firm Power in accordance with then-existing WSCC
scheduling practices. The Parties shall amend the appropriate
provisions of this Agreement to reflect such practices.
(d) Unbundled Products and Other Transmission Services
BPA shall offer to the Company the ancillary services, the network
integration transmission product, the point-to-point transmission
product,
Contract No. 95MS-94862
43
and the intertie transmission products that BPA offers to its utility
customers. BPA may offer to the Company other unbundled services. If
the Company elects to purchase such products, the Parties agree to
amend the appropriate provisions of this Agreement.
(e) Eccentric Loads
None of the Company's facilities operating as of the Effective Date
shall be billed as Eccentric Loads.
(f) Unbundling of Assignability in the Point-to-Point Transmission Rate
If BPA offers a point-to-point transmission rate schedule that offers
the right to purchase point-to-point transmission that is not
assignable, the Company shall be eligible to take service under such
schedule if the Company chooses to purchase such product. The Parties
agree to amend the appropriate provisions of this Agreement to provide
for transmission charges for Excess Firm Energy remarketed over BPA's
network facilities at BPA's standard tariffs for point-to-point
service.
20. PROVISIONS RELATING TO DELIVERY OF FIRM POWER
(a) Delivery to Company's Firm Load
BPA shall deliver Firm Power to the Company's firm load at the
Point(s) of Delivery specified in Exhibit E.
(b) Other Provisions Relating to Delivery
Other provisions relating to delivery shall be as specified in Exhibit
A.
21. ASSIGNMENT OF AGREEMENT
This Agreement shall inure to the benefit of, and shall be binding upon the
respective successors and assigns of the Parties. This Agreement or any
interest therein may be transferred or assigned by either Party to another
only upon the written consent of the other Party, which shall not be
unreasonably withheld, except
Contract No. 95MS-94862
44
as specifically provided in this section. The consent of BPA is hereby
given to: (a) any assignment to a successor in interest of the Company that
agrees to perform the obligations of the Company under this Agreement; and
(b) any security assignment or other like financing instrument which may be
required under terms of any mortgage, trust, security agreement or holder
of such instrument of indebtedness made by and between the Company and any
mortgagee, trustee, secured party, subsidiary of the Company or holder of
such instrument of indebtedness, as security for bonds or other
indebtedness of such Company, present or future. Such mortgagee, trustee,
secured party, subsidiary, or holder may realize upon such security in
foreclosure or other suitable proceedings, and succeed to all right, title,
and interests of such Company.
22. DISPUTE RESOLUTION
(a) The Parties intend by this Agreement to create contract rights and
obligations to be interpreted to carry out the mutual intent of the
Parties expressed herein and that such rights and obligations shall be
enforceable, to the maximum extent consistent with existing statutes,
like any other commercial contract.
(b) If a dispute arises between the Parties regarding the terms,
conditions, or performance of obligations under this Agreement, then
the Parties shall continue performance under this Agreement pending
resolution of such dispute. Parties shall first seek to resolve any
dispute by settlement prior to giving notice of initiation of an
arbitration under this Agreement.
(c) Upon the written notice from either Party to the other Party, any and
all disputes arising under the terms of this Agreement or out of
performance under this Agreement are subject to arbitration on any
issue, including without limitation, issues of fact, any law relating
to performance under this Agreement, and contract interpretation.
Contract No. 95MS-94862
45
(d) The Company and BPA shall agree to a set of procedures for the conduct
of any arbitration under this section 22 by February 1, 1996, and
shall attach such procedures as Exhibit H to this Agreement. In the
event the Company and BPA have not agreed to a set of procedures prior
to a notice of a dispute under this section 22, then the arbitration
procedures for commercial arbitration of the CPR Institute for Dispute
Resolution (Non-Administered Arbitration Rules) shall be used for that
dispute.
(e) The Parties agree that all material related to plant technology, plant
operations or to proving damages which is submitted by the Company to
BPA, the arbitrator or any other party in any dispute under this
Agreement is confidential. The Parties shall jointly request a
protective order from the arbitrator:
(1) preserving the confidentiality of such material;
(2) limiting its use to such proceeding; and
(3) requiring its return to Company at the conclusion of the
proceeding.
BPA agrees not to voluntarily disclose any such information
outside of the agency and agrees to restrict access to and use of
such information to employees necessary to and for purposes
associated only with the conduct of such proceeding. If requested
to provide such information to any Federal agency or Congress,
BPA shall inform the agency or Congress of the confidential
nature of the information and request that the agency or Congress
retain the information as confidential. BPA shall also inform the
Company of the request prior to complying with the request.
Responding to any such request shall not be a breach of this
Agreement.
(f) As part of a decision to resolve the dispute, an arbitrator may direct
that one or both of the Parties take actions to meet its obligations
under the
Contract No. 95MS-94862
46
Agreement and may also direct that one Party pay the other Party an
amount of damages caused to a Party as may be determined to result
from a breach of the Agreement by the other Party.
(g) The decision and award of the arbitrator shall be binding on both
Parties to the maximum extent permissible under the law existing at
the time that the notice of arbitration is given by one Party to the
other Party.
(h) Within 30 days after BPA's receipt of the arbitrator's decision and
award, the Administrator shall decide to accept or reject the
arbitrator's decision and award, and provide notice of the decision to
the Company and the arbitrator. If BPA rejects the arbitrator's
decision and award, then the notice shall state whether the
Administrator contends that such decision and award is not binding on
BPA as a matter of law.
(i) If BPA provides such a notice to the Company and the arbitrator of
nonacceptance of an award directing actions to be taken other than the
payment of money, then the arbitrator shall review the decision and
issue an alternative award which shall provide for an amount of money
damages only. The Administrator shall have 30 days after the receipt
of such alternative award to provide notice to the Company and the
arbitrator accepting or rejecting the alternative award. If the
Administrator rejects an award for the payment of money, then such
rejection shall not affect either Party's right to seek to enforce or
to challenge the award.
(j) If BPA fails to provide notice of acceptance, nonacceptance, or
rejection of an award as required in section 22(f), 22(g), or 22(i),
then the Company may notify BPA that it will terminate this Agreement
if BPA fails to provide such notice of acceptance, nonacceptance, or
rejection of the award within 21 days. If BPA fails to provide such
notice within 21 days of such request, the Company may terminate this
Agreement.
Contract No. 95MS-94862
47
(k) If BPA notifies the Company that it will not accept any award and
decision of the arbitrator directing money to be paid, or upon
acceptance does not comply with the award and decision, or seeks to
set aside any award on the grounds that the award is not binding on
it, then the Company may, by giving notice to BPA within 90 days,
terminate this Agreement. Such notice of termination shall be
effective 30 days after the date it is received by BPA.
(l) If the Company fails to comply with an award issued by an arbitrator
and has not filed a legal action to modify, vacate, or set aside the
award in a court having jurisdiction within 90 days, then BPA may
demand performance of the award from the Company. If the Company does
not then comply with the award within 90 days after such demand, BPA
may terminate this Agreement. This provision shall not limit any other
right to seek enforcement or other relief available to BPA.
(m) Any monetary award entered by an arbitrator shall bear interest at a
rate of one-twentieth percent (0.05 percent) per day, from the 31st
day following receipt of the award by the Parties until the day the
award is satisfied.
(n) Irrespective of whether a notice of termination of this Agreement is
given, the Party in whose favor the award and decision was made shall
retain all rights to seek enforcement of the award, or other
appropriate relief in a court of competent jurisdiction. Nothing in
the foregoing shall limit the right of the other Party to seek any
remedies it may have under law.
23. FORCE MAJEURE
(a) Definition of Force Majeure
"Force Majeure" means an event beyond the reasonable control and
without the fault or negligence of the Party claiming Force Majeure.
Force Majeure includes but is not limited to:
Contract No. 95MS-94862
48
(1) strikes or work stoppages, including threats of strikes or
imminent strikes, the settlement of which shall be at the sole
discretion of the Party subject to the strike;
(2) events reasonably beyond the control of the Parties (including
those events creating actual or imminent safety problems) and
which the Party could not, by exercise of reasonable diligence
and foresight, have been expected to avoid;
(3) floods or other natural disasters; or
(4) order or injunction entered by any court having competent subject
matter jurisdiction or any order of an administrative officer,
other than an officer of BPA or the Department of Energy, which
cannot be stayed, suspended, or set aside pending review of such
order.
Neither the unavailability of funds or financing, nor conditions of
national or local economies or markets shall be considered a Force
Majeure. The economic hardship of either Party shall not constitute a
Force Majeure.
(b) Obligations of the Parties
Each Party shall notify the other as soon as possible of any Force
Majeure which may, in any way, affect the delivery of Firm Power under
this Agreement.
To the extent either Party is prevented, for the duration of the Force
Majeure, from meeting its obligations under this Agreement by a Force
Majeure, both Parties shall be excused from their respective
obligations without liability to the other for the period reasonably
required to restore the affected Party's operations to conditions
existing prior to the occurrence of the Force Majeure.
Contract No. 95MS-94862
49
24. NOTICES
Unless the Agreement requires otherwise, any notice, demand, or request
provided for in this Agreement, or served, given, or made in connection
with it, shall be in writing and shall be deemed properly served, given, or
made if delivered in person or sent by telegraph, or by acknowledged
delivery, or sent by registered or certified mail, postage prepaid, to the
persons specified below:
To the Company: Mr. Brett Wilcox
Northwest Aluminum Company
3313 West 2nd Street
The Dalles, OR 97058
To BPA: Mr. Sydney D. Berwager - SH
Senior Customer Account Executive
U.S. Department of Energy
Bonneville Power Administration
P.O. Box 3621
Portland, OR 97208-3621
Any Party may, by written notice to the other Party, change the designation
or address of the person so specified as the one to receive notices
pursuant to this Agreement.
25. HOLD HARMLESS
Each Party hereto hereby assumes all liability for injury or damage to
persons or property arising from the act or neglect of its own employees,
agents or contractors and shall indemnify and hold the other Party harmless
from any liability arising therefrom. Each Party releases the other Party
from, and shall indemnify the other Party for, any such liability. As used
in this section: (a) the term "Party" means, in addition to such Party
itself, its directors, officers, and employees; (b) the term "damage" means
all damage, including consequential damage; and (c) the term "person" means
any person, including those not connected with either Party to this
Agreement.
Contract No. 95MS-94862
50
26. DAMAGES FOR FAILURE BY BPA TO DELIVER
In the event BPA fails to deliver the hourly amounts of Firm Energy
scheduled by the Company to the plant's Point of Delivery, and such
delivery is not restricted by BPA pursuant to its Reserve rights under this
Agreement, or such delivery is not excused by section 4(f) of Exhibit A,
BPA shall pay the Company (on the date payment by the Company for the Firm
Energy would otherwise have been due under this Agreement):
(a) an amount for each megawatthour of such nondelivery equal to the price
at which the Company is, or would be, able to obtain comparable
supplies of power at a commercially-reasonable price (adjusted to
reflect differences in transmission costs, if any) minus the
applicable payment under this Agreement; provided, if such sum as
determined above is negative then it shall be deemed to equal zero; or
(b) liquidated damages as provided for an Event which exceeds an Event
Magnitude Limit, if the Company or its agent is unable,
notwithstanding its diligent effort to do so, to obtain replacement
power.
27. OBLIGATIONS DURING PERFORMANCE OF THIS AGREEMENT
During the course of performance of this Agreement by the Company, BPA
shall not charge the Company or a third party doing business with the
Company any amount, charge or fee of any nature whatever based on the
historical purchases made by the Company under any prior power purchase
agreements between the Company and BPA. This provision is a material term
essential to the Company having entered into this Agreement.
28. THIRD PARTIES
The rights, obligations, and benefits of this Agreement shall inure solely
to the signatories and the terms, covenants and conditions herein shall not
be interpreted
Contract No. 95MS-94862
51
to create, nor are they intended to create any right, benefit, or
obligation to any third party whatsoever.
29. SEVERABILITY
If any term, covenant, or condition of this Agreement or the application of
any such term, covenant, or condition shall be held invalid as to any
person, entity, or circumstance by any court of competent jurisdiction,
then such term, covenant, or condition shall remain in force and effect to
the maximum extent permitted by law, and all other terms, covenants, and
conditions of this Agreement and their application shall not be affected
thereby but shall remain in force and effect unless the court finds that
such provision is not severable from all other provisions of this
Agreement. The Company's right to terminate this Agreement under section
5(a)(2)(B) shall not be limited by any finding that any term, covenant, or
condition of this Agreement is severable.
30. ENTIRE AGREEMENT
The terms and provisions contained in this Agreement, including the
exhibits and all referenced documents, constitute the entire agreement
between the Parties and supersede all previous communications,
representations, or agreements, either oral or written, between the Parties
with respect to the subject matter of this Agreement. Except as expressly
provided in this Agreement, this Agreement shall not supersede agreements
with respect to the Prior Contract.
Contract No. 95MS-94862
52
31. SIGNATURE CLAUSE
The signatories hereto represent that they have been duly authorized to
enter into this Agreement on behalf of the Party for whom they sign.
IN WITNESS WHEREOF, the Parties have executed this Agreement.
UNITED STATES OF AMERICA
Department of Energy
Bonneville Power Administration
By /s/ SYDNEY D. BERWAGER
---------------------------------
Senior Customer Account Executive
Name Sydney D. Berwager
-------------------------------
(Print/Type)
Date 9/28/95
-------------------------------
NORTHWEST ALUMINUM COMPANY
By /s/ BRETT WILCOX
-------------------------------------
Name Brett Wilcox
-----------------------------------
(Print/Type)
Title President
----------------------------------
Date 9/28/95
-----------------------------------
Contract No. 95MS-94862
53
Exhibit A, Page 1 of 8
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
GENERAL CONTRACT PROVISIONS
Index to Sections
- -------------------------------------------------------------------------------
Section Page
1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Metering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(a) Metering Costs. . . . . . . . . . . . . . . . . . . . . . . . . . 2
(b) Metering Requirements at Company Facilities . . . . . . . . . . . 2
(c) Metering Standards. . . . . . . . . . . . . . . . . . . . . . . . 3
(d) Data Reporting Requirements . . . . . . . . . . . . . . . . . . . 4
(e) Metering Tests. . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) Ownership of Facilities . . . . . . . . . . . . . . . . . . . . . 5
(b) Access to Facilities. . . . . . . . . . . . . . . . . . . . . . . 5
(c) General Environmental Provisions. . . . . . . . . . . . . . . . . 6
4. Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(a) Character of Service. . . . . . . . . . . . . . . . . . . . . . . 6
(b) Voltage Levels. . . . . . . . . . . . . . . . . . . . . . . . . . 6
(c) Balancing Phase Demands . . . . . . . . . . . . . . . . . . . . . 7
(d) Harmonic Control. . . . . . . . . . . . . . . . . . . . . . . . . 7
(e) Voltage Flicker . . . . . . . . . . . . . . . . . . . . . . . . . 8
(f) Maintenance Outages . . . . . . . . . . . . . . . . . . . . . . . 8
5. Statutory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . 8
1. DEFINITIONS
(a) "Federal System" or "Federal System Facilities" means the facilities
of the Federal Columbia River Power System (FCRPS). For purposes of
this Agreement, the FCRPS includes:
(1) the Federal Government's generating facilities in the Pacific
Northwest for which BPA is the designated marketing agent;
(2) the Federal Government's facilities under BPA's jurisdiction;
(3) any other facilities which BPA has a right to use by contract,
license, or treaty; and
Contract No. 95MS-94862
Exhibit A, Page 2 of 8
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
(4) any other facilities from which BPA receives generating
capability.
(b) "Prudent Electric Utility Practice" or "Prudent Utility Practice"
means, at any particular time, the generally accepted practices,
methods, and acts in the electric utility industry that would achieve
the desired result. If there are no such practices, methods, and acts,
Prudent Electric Utility Practice means the practices, methods, and
acts which, in the exercise of reasonable judgment in light of the
facts known at the time the decision was made, could have been
expected to accomplish the desired result consistent with reliability
and safety considerations.
2. METERING
(a) Metering Costs The Parties shall bear the costs of metering as
provided in sections 2(a)(1) and 2(a)(2), except as otherwise
specifically provided in section 2(b).
(1) Metering of Existing Facilities
BPA shall bear the costs of any meter replacement or new meter
installation at any Company facility that is used for delivery of
Federal power and which is an existing facility on the Effective
Date of this Agreement.
(2) Metering of New Company Facilities
The Company shall pay all costs associated with installing
BPA-approved metering at the following types of locations
established by the Company after the Effective Date of this
Agreement:
(A) all points of generation integration;
(B) all automatic generation control (AGC) interchange points;
and
(C) all other points of electrical interconnection, including
convenience points of delivery.
(b) Metering Requirements at Company Facilities
(1) Points of Automatic Generation Control Interchange
The following metering is required for each AGC interchange point
(a point on a Control Area boundary);
(A) telemetering of the kilowatts (kW) at such point; and
Contract No. 95MS-94862
Exhibit A, Page 3 of 8
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
(B) hourly metering capable of providing summaries, at the end
of each clock hour, of the kilowatthours (kWh) and
kilovoltampere reactive hours (kVArh) (lagging and leading)
exchanged during the previous hour.
(2) Other Electrical Connections
All electrical interconnections other than AGC interchange points
and points of generation integration shall be metered on an
hourly basis for both kW/kWh and kilovoltamperes reactive
(kVAr)/kVArh (lagging and leading) quantities. BPA shall pay for
any upgrades or replacement of required meters on facilities
existing on the Effective Date; the Company shall pay to meet
BPA's metering requirements for all new facilities.
(3) Eccentric Loads
At its own expense, the Company shall separately meter each of
its eccentric loads, which are large loads that have an extremely
steep ramp rate (more specifically defined in BPA's Billing
Policy or product catalog). Eccentric loads shall be metered
using telemetering equipment or the equivalent.
(c) Metering Standards
(1) All meters at new installations where the interconnections are
"normally closed" shall be capable of providing data
electronically unless BPA otherwise agrees.
(2) BPA will determine whether hourly data or meter slips are
required for those interconnections that are normally operated in
the "open" position.
(3) All meters providing data electronically shall be compatible with
BPA's electronic metering systems.
(4) As of the Effective Date, BPA principally uses a telemetering
system, a kWh system, and BPA's Revenue Metering System (RMS) for
metering. There are acceptable alternatives to each of these
specific systems. The Company shall consult with BPA to ensure
compatibility of any Company meter with BPA's then-current
metering system.
(5) The Company's meters shall meet BPA's accuracy standards as
described in the BPA's Billing Policy.
Contract No. 95MS-94862
Exhibit A, Page 4 of 8
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
(6) The Company shall coordinate with BPA to determine BPA's
information and communication needs when designing future meter
installations.
(7) BPA-installed metering shall be used exclusively for BPA purposes
unless otherwise agreed.
(8) If the required metering capability is not installed by the
Effective Date and until its installation, the Parties shall
calculate the hourly quantities using a default methodology
specified in the Billing Policy, unless a different methodology
is specified in the Points of Delivery Exhibit.
(d) Data Reporting Requirements
(1) Telemetered data shall be furnished to BPA continuously on a
real-time basis via 10-30 hertz telemetry, BPA's Supervisory
Control and Data Acquisition system, the Interutility Data
Exchange system, or other data collection method as determined by
BPA.
(2) Hourly metered data for all points of generation integration and
points of AGC interchange shall be furnished to BPA at the end of
each clock hour. Data shall be reported through the kWh metering
system or an approved alternative.
(3) Hourly metered data for:
(A) points of delivery (excluding points of AGC interchange);
and
(B) eccentric loads
shall be furnished to BPA at least once a month, at the end of
the Company's billing cycle.
(4) The Company shall submit a meter slip to BPA for all metering
points which do not currently have:
(A) metering capable of providing hourly kWh and kVArh
quantities; or
(B) electronic communications for such metered amounts (through
the RMS or equivalent).
Contract No. 95MS-94862
Exhibit A, Page 5 of 8
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
(e) Metering Tests
Each Party shall inspect and test each of its meters used to measure
power flowing between the Parties:
(1) at least once every 2 years; and
(2) upon the request of the other Party.
Each Party shall give reasonable notice to the other stating when a
test or inspection will occur. The other Party has the right to have
one or more representatives present at such test or inspection.
3. FACILITIES
(a) Ownership of Facilities
(1) Except as otherwise expressly provided, equipment or salvable
facilities owned by one Party and installed on the property of
the other shall remain the property of the owner.
(2) Each Party shall identify all movable equipment and other
salvable facilities which it installed on the other's property by
permanently affixing suitable markers plainly identifying the
owner. Within a reasonable time after such installation, and
again after any subsequent modification of such installation,
representatives of the Parties shall jointly prepare an itemized
list of said movable equipment and salvable facilities.
(b) Access to Facilities
Whenever one Party has facilities or equipment located on, or planned
to be located on, the other's property, the property owner shall give
the facility or equipment owner permission to access such property for
any reasonable purpose related to such facilities or equipment,
including removal. The property owner shall also provide accurate and
up-to-date information on those facilities and equipment owned by the
property owner, to the extent needed by the other Party to accomplish
its purpose.
Each Party shall have the right, at any reasonable time, to enter the
other's property to read meters and inspect the other Party's electric
installation. The inspecting Party shall observe written instructions
and posted rules and such other necessary instructions or inspection
standards to which the
Contract No. 95MS-94862
Exhibit A, Page 6 of 8
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
Parties have agreed. Only those electric installations used to deliver
power that BPA sells or wheels to the Company shall be subject to
inspection.
The inspecting Party shall be liable for any injury, loss, damage, or
accident resulting from their inspection.
(c) General Environmental Provisions
Each Party shall be responsible for the cost of compliance with the
requirements of all applicable Federal State, and local environmental
laws for its own facilities, even when those facilities are located on
the property of the other Party.
4. DELIVERIES
(a) Character of Service
Unless otherwise provided in this Agreement, BPA shall make electric
power available to the Company in the form of 3-phase alternating
current, at a nominal frequency of 60 hertz.
(b) Voltage Levels
(1) Voltage Levels on the Transmission System
BPA has the right to operate its transmission system as provided
below and cannot accept any restriction of that right.
(A) 500 Kilovolt System
BPA shall normally operate its 500 kV transmission system in
a range from the nominal voltage to 10 percent above the
nominal voltage (500 kV to 550 kV).
(B) 115-345 Kilovolts
BPA shall normally operate its 115-345 kV transmission
system within 5 percent of the nominal voltage. BPA normally
operates in the range from nominal voltage to 5 percent
above, but reserves the right to operate in the lower half
of the range. Sometimes BPA will allow some of its
transmission lines or facilities to operate above or below
the normal voltage limits where no substantive damage will
occur from this operation.
(2) Voltage Levels at Points of Delivery
When the nominal voltage at the Company's point of delivery is
115 kV or more, BPA shall deliver power to the Company at the
operating voltage of the transmission system. If the nominal
voltage
Contract No. 95MS-94862
Exhibit A, Page 7 of 8
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
at the Company's point of delivery is below 115 kV, the delivery
voltage may differ from the operating voltage of the transmission
system as a result of the "turns ratio" and impedance of the
transformer providing the delivery service.
(3) Voltage Schedules
Voltage schedules are necessary for the efficient and reliable
transmission of electrical power. BPA will establish a voltage
schedule for each critical (or key) substation, as determined by
BPA. Depending on the hourly operating requirements at each
substation and at each point of generation integration, BPA will
issue a target voltage (set-point) for the voltage schedule. At
any time, BPA may reset the voltage schedule. The Company shall
take all appropriate actions to help BPA maintain the established
voltage schedule.
(4) Voltage Levels During Abnormal System Conditions
During outages or emergencies, BPA will maintain delivery voltage
within 10 percent of the nominal voltage for all facilities
having a nominal voltage less than 500 kV. BPA will normally
match other transmission providers' voltage levels for abnormal
system conditions when they share transmission responsibilities.
At times during abnormal system conditions, BPA may need the
Company to supply additional reactive power from its generating
facilities (relative to normal requirements) to maintain
reasonable voltage levels. The Company shall use its best efforts
to comply with BPA's request.
(c) Balancing Phase Demands
The current on any one phase shall not deviate by more than 5 percent
from the current on any other phase, unless otherwise agreed by the
Parties.
(d) Harmonic Control
Each Party shall design, construct, operate, maintain, and use its
electric facilities in accordance with Prudent Utility Practice to
reduce, to acceptable levels, the harmonic currents and voltages which
pass into the other Party's facilities. To that end, the Parties shall
be guided by the recommended practices and requirements for harmonic
control specified in The Institute of Electrical and Electronics
Engineers, Inc. (IEEE) Electrical Power System Standard 519-1992, or
its successor. The Parties shall accomplish harmonic reductions using
equipment which is specifically designed, and permanently operated and
maintained, as an integral part of the facilities of the Party which
owns the system on which the harmonics are generated.
Contract No. 95MS-94862
Exhibit A, Page 8 of 8
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
(e) Voltage Flicker
Voltage flicker is normally detectable through visible variations in
light intensity. However, flicker may be present even when no light
variations are detectable. Since flicker is disruptive to lighting and
can damage computer equipment, it must be controlled. IEEE Recommended
Practices and Requirements for Harmonic Control in Electric Power
Systems (IEEE Standard 519) provides definitions and limits on
acceptable levels of voltage flicker, as set by IEEE Standard 519.
Both Parties shall control voltage flicker on their respective systems
as required by IEEE Standard 519.
(f) Maintenance Outages
The Company, BPA, or a transferor may temporarily interrupt or reduce
deliveries of electric power if any such party determines that such
interruption or reduction is necessary or desirable to install
equipment in, make repairs to, make replacements within, conduct
investigations and inspections of, or perform other maintenance work
on, the Company's facilities, the Federal System, or the transferor's
system.
Except in an emergency where such notice is not possible, the
interrupting party shall notify the other affected entities in advance
of an interruption or reduction in service. The interrupting party
shall identify the reason for such interruption or reduction, and the
probable duration. To the extent reasonable or appropriate, the
Company or BPA shall schedule such interruption or use temporary
facilities or equipment to minimize the effect of any such
interruption or outage.
5. STATUTORY PROVISIONS
(a) The provisions of sections 9(c) and (d) of Public Law 96-501 and the
provisions of Public Law 88-552 (the Provisions) as may be amended
prior to the execution of this Agreement are hereby incorporated by
this reference.
(b) BPA agrees that the Company, together with other companies in the
Pacific Northwest, shall have priority to power that BPA has available
for sale, in conformity with the Provisions.
Contract No. 95MS-94862
Exhibit B, Page 1 of 1
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
FEES FOR REMARKETING
Excess Firm Energy remarketed pursuant to section 18(b) of this Agreement shall
be subject to the following charges:
1. One-Tenth (0.1) mill per kilowatthour multiplied by the total amount of
energy remarketed under section 18(b)(2)(C), plus the scheduling and
dispatching fee under BPA's ancillary services rate schedule.
2. Two thousand dollars ($2,000) per contract under section 18(b)(2)(A) and
section 18(b)(2)(B), plus the scheduling and dispatching fee under BPA's
ancillary services rate schedule.
The Parties may agree to different charges for specific transactions. The prices
above are all inclusive, including scheduling and dispatch, sales, billing,
invoicing, and other administrative services.
Contract No. 95MS-94862
Exhibit C, Page 1 of 1
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
RATE SCHEDULE
Contract No. 95MS-94862
Exhibit D, Page 1 of 1
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
MONTHLY AMOUNTS OF FIRM POWER
CONTRACT YEAR 10/01/96 THROUGH 09/30/97
- ----------------------------------- -----------------------------------
HLH LLH Demand HLH LLH Demand
Month (MWh) (MWh) (MW) Month (MWh) (MWh) (MW)
- ----------------------------------- -----------------------------------
October April
November May
December June
January July
February August
March September
- ----------------------------------- -----------------------------------
Contract No. 95MS-94862
Exhibit E, Page 1 of 1
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
POINTS OF DELIVERY
THE DALLES PLANT POINT OF DELIVERY
Location: the point in the Government's Harvey Substation where the 13.8
kilovolt (kV) facilities of the Government and the Company are connected;
Voltage: 13.8 kV;
Metering: in the Government's Harvey Substation, in the 13.8 kV circuits over
which such electric power and energy flows.
Contract No. 95MS-94862
Exhibit F, Page 1 of 1
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
UNRECOVERABLE COSTS AND TRANSFER COSTS
1. UNRECOVERABLE COSTS
(a) The unrecoverable costs in BPA substation or transmission facilities
used to serve the Company's load, shall include the following
unamortized investment in the facilities:
---------------------------------------------------------------------
Unamortized
Investment
---------------------------------------------------------------------
Prior to October 1, 1996 $193,480
Contract Year 1997 $364,824
Contract Year 1998 $324,506
Contract Year 1999 $283,109
Contract Year 2000 $279,008
Contract Year 2001 $274,717
---------------------------------------------------------------------
(b) If the facilities must be removed from the site, the unrecoverable
costs shall include, in addition to the unamortized investment for
such facilities, all reasonable costs involved in the disposition of
such facilities, such as, but not limited to, labor in dismantling
equipment, transportation, site restoration and cleanup (except for
the cost covered under section 3(c) of Exhibit A), less any
mitigation, such as the salvage value of such equipment.
2. TRANSFER COSTS
The Company is not served by transfer over third-party facilities.
Contract No. 95MS-94862
Exhibit G, Page 1 of 1
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
STABILITY RESERVE SCHEME(S)
1. Import Contingency Load Tripping Schemes: Remedial Action Scheme for the
loss of the AC Intertie and Remedial Action Scheme for the loss of the DC
Intertie.
Contract No. 95MS-94862
Exhibit H, Page 1 of 1
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
ARBITRATION PROCEDURES
Contract No. 95MS-94862
Exhibit I, Page 1 of 2
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
USE-OF-FACILITIES CHARGE
I&A(1) I&A O&M(2)
Annual Annual Annual
Facility Investment Cost Ratio Cost Cost Demand $/kW/yr
- -------- ---------- ---------- -------- -------- ------ -------
(3) (4) (kW)
Harvey $1,392,220 8.00% $111,378 $284,100 167,500 $2.36
Substation
Total Use-of-Facilities Charge (Harvey) = 0.197 $/kW/mo
- ---------------
1 Investment and amortization.
2 Operations and maintenance.
3 Based on ACR table dated 6/2/95, column 8 minus column 5 for U substation category.
4 Based on O&M table dated 6/2/95.
1. CHANGES TO THE USE-OF-FACILITIES CHARGE
(a) Changes in Costs and Demands
This Exhibit I may be revised annually to reflect changes in: (1) the
yearly noncoincidental demands on the facility under this Agreement
and other agreements; (2) changes in I&A annual cost ratio; (3)
changes in O&M annual cost; and (4) changes in the general transfer
agreement costs, if applicable. Any changes in the costs or demands
used in calculating the use-of-facilities change in this Exhibit I are
subject to the dispute resolution provisions of section 22.
(b) Limits on Changes in Use-of-Facilities Charge
The sum of the annual costs for I&A annual cost, O&M annual cost, and
the cost of general transfer agreements, if applicable, used in
calculating the use-of-facilities charge shall not exceed a limit
equal to 150 percent of such total annual cost specified in the
initial Exhibit I as adjusted for changes in investments. The formula
used for determining the use-of-facilities charge shall not change
from the formula used in developing the initial Exhibit I.
Contract No. 95MS-94862
Exhibit I, Page 2 of 2
Contract No. 95MS-94862
Northwest Aluminum Co.
Effective on the Commencement Date
2. NEW INVESTMENTS IN FACILITIES SERVING THE COMPANY
(a) Use-of-Facilities Charge
If new investments are proposed by BPA and agreed to by the Company in
accordance with the provisions of section 5(b)(1)(C), such investments
shall be used in the use-of-facilities charge under this Agreement.
(b) Change in Rate Test Limit
If BPA makes such new investments, the limit on the use-of-facilities
charge specified in section 1(b) of this Exhibit I shall be
proportionately increased to reflect such new investments.
Contract No. 95MS-94862