Exhibit 10.68
SCE STANDARD CONTRACT
LONG TERM POWER PURCHASE
POWER PURCHASE CONTRACT
BETWEEN
SOUTHERN CALIFORNIA EDISON COMPANY
AND
CHINA LAKE JOINT VENTURE
DOCUMENT NO.: 2126C
EFFECTIVE DATE: September 7, 1983
REVISED: May 4, 1984
1. Project Summary
This Contract is entered into between Southern California Edison Company
("Edison") and China Lake Joint Venture, A Joint Venture between California
Energy Company, Inc. and Caithness Geothermal 1980, Ltd. ("Seller"). Seller is
willing to construct, own, and operate a Qualifying Facility and sell electric
power to Edison and Edison is willing to purchase electric power delivered by
Seller to Edison at the Point of Interconnection pursuant to the terms and
conditions set forth as follows:
1.1 All Notices shall be sent to Seller at the following address:
California Energy Company, Inc.
3333 Mendocino Avenue, Suite 100
Santa Rosa, CA 95401
1.2 Seller's Generating Facility:
a. Nameplate Rating: 79,500 kW.
b. Location: Naval Weapons Center-China Lake, CA
c. Type (Check One):
__Cogeneration Facility
X Small Power Production Facility
d. Delivery of power to Edison at a nominal 115,000 volts.
e. Seller shall commence construction of the Generating Facility by August 1,
1984.
1.3 Edison Customer service District: Ridgecrest District
510 S. China Lake Blvd.
Ridgecrest, CA 93555
Phone: (714) 375-1552
1.4 Location of Edison operating Switching Center:
Lugo Substation
6655 Escondido Street
Hesperia, CA
1.5 Contract Capacity: Phase 1 29,000 kW
Phase 2 23,000 kW
Phase 3 23,000 kW
TOTAL 75,000 kW
1.5.1 Estimated as-available capacity: 0 kW.
1.6 Expected annual production: 591,300,000 kWh.
1.7 Expected Firm Operation for each phase:
Phase 1 01-1-86
Phase 2 06-30-86
Phase 3 12-31-86
1.8 Contract Term: 24 years
1.9 operating options pursuant to Section 5: (Check One)
__Operating Option I. Entire Generator output dedicated to Edison. No electric
--
service or standby service required.
X Operating option II, Entire Generator output dedicated to Edison with separate
- -
electric service required.
a. Electric service Tariff Schedule No. TOU-8 pursuant to Section 10.2.
b. Contract demand 0 kW.
-
___Operating Option III. Excess generator output dedicated to Edison with Seller
serving own load.
a. Electric service Tariff Schedule No.__ pursuant to Section 10.2.
b. Contract demand _____ kW.
c. Standby Demand ______________ kW pursuant to Section 10.2.
d. Maximum electrical requirements expected __kW.
e. Standby electric service Tariff Schedule No._____ pursuant to Section 10.2.
f. Minimum monthly charge for standby service ___.
1.10 Interconnection Facilities Agreement pursuant to Section 6 shall be: (Check
One)
____ - Added Facilities Basis (Appendix A.1)
- -___ Capital Contribution Basis (Appendix A.2)
-X Seller Owned and Operated Basis (Appendix A.3)
- -----
1.11 The Capacity Payment Option selected by Seller pursuant to Section 9.1
shall be: (Check one)
____ Option A - As-available capacity based upon:
____ Standard Offer No. 1 Capacity Payment Schedule, or
____ Forecast of Annual As-Available Capacity Payment Schedule. The as-available
capacity price (first year): $ kW-yr.
X Option B - Firm Capacity (check one)
- -
X Standard offer No. 2 Capacity Payment Schedule in effect at time of Contract
- -
execution,
Standard Offer No. 2 Capacity Payment Schedule in effect at time of Firm
operation of first generating unit. Contract Capacity Price: $150.20/kW-yr.
(Firm capacity).
1.12 The Energy Payment Option selected by Seller pursuant to Section 9.2 shall
be: (Check One)
X Option 1 - Forecast of Annual Marginal Cost of Energy in effect at date
- -----
of execution of this Contract. (Appendix B)
____ Option 2 - Levelized Forecast of Marginal Cost of Energy in effect at date
of execution of this Contract. Levelized Forecast for expected date of Firm
Operation is ___ (c)/kWh. If Seller's Generating Facility is an oil/natural gas
fueled cogenerator, Seller may' not select Option 2.
For the energy payment refund pursuant to Section 9.5 under Option 2, Edison's
Incremental Cost of Capital is ____%. Seller may change once between Options 1
and 2, provided Seller delivers written notice of such change at least 90 days
prior to the date of Firm Operation.
For Option 1 or 2, Seller elects to receive the following percentages in 20%
increments, the total of which shall equal 100%:
100 Percent of Forecast of Marginal Cost of Energy (Annual or Levelized), not
- ----
to exceed 20% of the annual forecast for oil/natural gas fueled cogenerators,
and
_____ Percent of Edison's published avoided cost of energy based on Edison's
full avoided operating costs as updated periodically and accepted by the
Commission.
1.13 Metering Location (Check one)
Seller elects metering location pursuant to Section 8 as follows:
_____ Edison's side of the Interconnection Facilities
X Seller's side, of the Interconnection Facilities. Loss compensation
- ------
factor is equal to (to be determined), pursuant to Section 8.3.
July 8, 1987 Wayne Petzer indicated no transformer to be used, project to be
directly connected to 115 kV system, therefore no transformer losses associated
with this project. --June Sutherland
General Terms & Conditions
2. Definitions
When used with initial capitalizations, whether in the singular or in the
plural, the following terms shall have the following meanings:
2.1 Adjusted Capacity Price: The $/kW-yr capacity purchase price based on the
Capacity Payment Schedule in effect at time of Contract execution for the time
period beginning on the date of Firm operation for the first generating unit and
ending on the date of termination or reduction of Contract Capacity under
Capacity Payment Option B.
2.2 Appendix A.l: Interconnection Facilities Agreement -- Added Facilities Basis
2.3 Appendix A.2: Interconnection Facilities Agreement
Capital Contribution Basis
2.4 Appendix A.3: Interconnection Facilities Agreement -- Seller Owned and
Operated Basis
2.5 Appendix B: Forecast of Annual Marginal Cost of Energy
2.6 Capacity Payment Schedule(s): Published capacity payment schedules as
authorized by the Commission for as-available or firm capacity.
2.7 Cogeneration Facility: The facility and equipment which sequentially
generate thermal and electrical energy as defined in Title 18, Code of Federal
Regulations, Section 292.202.
2.8 Commission: The Public Utilities Commission of the State of California.
2.9 Contract: This document and Appendices, as amended from time to time.
2.10 Contract Capacity: The electric power producing capability of the
Generating Facility which is committed to Edison.
2.11 Contract Capacity Price: The capacity purchase price from the Capacity
Payment Schedule approved by the Commission for Capacity Payment Option D.
2.12 Contract Term : Period in years commencing with date of Firm Operation for
the first generating unit(s) during which Edison shall purchase electric power
from Seller.
2.13 Current Capacity Price: The $/KW-yr capacity price provided in the Capacity
Payment Schedule determined by the year of termination or reduction of Contract
Capacity and the number of years from such termination or reduction to the
expiration of the Contract Term for Capacity Payment Option B.
2.14 Edison: The Southern California Edison Company.
2.15 Edison Electric System Integrity: The state of operation of Edison's
electric system in a manner which is deemed to minimize the risk of injury to
persons and/or property and enables Edison to provide adequate and reliable
electric service to its customers.
2.16 Emergency: A condition or situation which in Edison's sole judgment affects
Edison Electric System Integrity.
2.17 Energy: Kilowatthours generated by the Generating Facility which are
purchased by Edison at the Point of Interconnection.
2.18 Firm Operation: The date agreed on by the Parties on which each generating
unit(s) of the Generating Facility is determined to be a reliable source of
generation and on which such unit can be reasonably expected to operate
continuously at its effective rating (expressed in KW).
2.19 First Period: The period of the Contract Term specified in Section 3.1.
2.20 Forced Outage: Any outage other than a scheduled outage of the Generating
Facility that fully or partially curtails its electrical output.
2.21 Generating Facility: All of Seller's generators, together with all
protective and other associated equipment and improvements, necessary to produce
electrical power at Seller's Facility excluding associated land, land rights,
and interests in land.
2.22 Generator: The generators and associated prime mover(s), which are a part
of the Generating Facility.
2.23 Interconnection Facilities: Those protection, metering, electric line(s),
and other facilities required in Edison's sole judgment to permit an electrical
interface between Edison's system and the Generating Facility in accordance with
Edison's Tariff Rule No. 21 titled Cogeneration and Small Power Production
Interconnection Standards filed with the Commission.
2.24 Interconnection Facilities Agreement: That document which is specified in
Section 1.10 and is attached hereto.
2.25 KVAR: Reactive kilovolt-ampere, a unit of measure of reactive power.
2.26 Operate: To provide the engineering, purchasing, repair, supervision,
training, inspection, testing, protection, operation, use, management,
replacement, retirement, reconstruction, and maintenance of and for the
Generating Facility in accordance with applicable California utility standards
and good engineering practices.
2.27 Operating Representatives: Individuals appointed by each Party for the
purpose of securing effective cooperation and interchange of information between
the Parties in connection with administration and technical matters related to
this Contract.
2.28 Parties: Edison and Seller.
2.29 Party: Edison or Seller.
2.30 Peak Months: Those months which the Edison annual system peak demand could
occur. Currently, but subject to change with notice, the peak months for the
Edison system are June, July, August, and September.
2.31 Point of Interconnection: The point where the transfer of electrical energy
between Edison and Seller takes place.
2.32 Project: The Generating Facility and Interconnection Facilities required to
permit operation of Seller's Generator in parallel with Edison's electric
system.
2.33 Protective Apparatus: That equipment and apparatus installed by Seller
and/or Edison pursuant to Section-4.2.
2.34 Qualifying Facility: cogeneration or Small Power Production Facility which
meets the criteria as defined in Title 18, Code of Federal Regulations, Section
292.201 through 292.207.
2.35 Second Period: The period of the Contract Term specified in Section 3.2.
2.36 Seller: The Party identified in Section 1.0.
2.37 Seller's Facility: The premises and equipment of Seller located as
specified in Section 1.2.
2.38 Small Power Production Facility: The facilities and equipment which use
biomass, waste, or Renewable Resources, including wind, solar, geothermal, and
water, to produce electrical energy as defined in Title 18, Code of Federal
Regulations, Section 292.201 through 292.207.
2.39 Standby Demand: Seller's electrical load requirement that Edison is
expected to serve when Seller's Generating Facility is not available.
2.40 Summer Period: Defined in Edison's Tariff Schedule No. TOU-8 as now in
effect or as may hereafter be authorized by the Commission.
2.41 Tariff Schedule No. TOU-8: Edison's time-of-use energy tariff for electric
service exceeding 500 kW, as now in effect or as may hereafter be authorized by
the Commission.
2.42 Uncontrollable Forces: Any occurrence beyond the control of a Party which
causes that Party to be unable to perform its obligations hereunder and which a
Party has been unable to overcome by the exercise of due diligence, including
but not limited to flood, drought, earthquake, storm, fire, pestilence,
lightning and other natural catastrophes, epidemic, war, riot, civil disturbance
or disobedience, strike, labor dispute, action or inaction of legislative,
judicial, or regulatory, agencies, or other proper authority, which may conflict
with the terms of this Contract, or failure, threat of failure or sabotage of
facilities which have been maintained in accordance with good engineering and
operating practices in California.
2.43 Winter Period: Defined in Edison's Tariff Schedule No. TOU-8 as now in
effect or as may hereafter be authorized by the Commission.
3. Term
This Contract shall be effective upon execution by the Parties and shall remain
effective until either Party gives 90 days prior written notice of termination
to the, other Party, except that such notice of termination shall not be
effective to terminate this Contract prior to expiration of the Contract Term
specified in Section 1.8.
3.1 The First Period of the Contract Term shall commence upon date of Firm
Operation but not later than 5 years from the date of execution of this
Contract.
a. If the Contract Term specified in Section 1.8 is 15 years, the First Period
of the Contract Term shall be for 5 years.
b. If the Contract Term specified in Section 1.8 is 20 years or greater, the
First Period of the Contract Term shall be for 10 years.
3.2 The Second Period of the Contract Term shall commence upon expiration of the
First Period and shall continue for the remainder of the Contract Terri.
4. Generating Facility
4.1 Ownership
4.1.1 The Generating Facility shall be owned by Seller.
4.1.2 Seller warrants that it has the right to enter into this Agreement and to
sell the energy generated by the Project to Edison under the terms of this
Agreement.
4.2 Design
4.2.1 Seller, at no cost to Edison, shall:
a. Design the Generating Facility.
b. Acquire all permits and other approvals necessary for the construction,
operation, and maintenance of the Generating Facility.
c. Complete all environmental impact studies necessary for the construction,
operation, and maintenance of the Generating Facility.
d. Furnish and install the relays, meters, power circuit breakers, synchronizer,
and other control and Protective Apparatus as shall be agreed to by the Parties
as being necessary for proper and safe operation of the Project in parallel with
Edison's electric system.
4.2.2 Edison shall have the right to:
a. Review the design of the Generating Facility's electrical system and the
Seller's Interconnection Facilities. Such review may include, but not be limited
to, the Generator, governor, excitation system, synchronizing equipment,
protective relays, and neutral grounding. The Seller shall be notified in
writing of the outcome of the Edison review within 30 days of the receipt of all
specifications for both the Generating Facility and the Interconnection
Facilities. Any flaws perceived by Edison in the design shall be described in
Edison's written notice.
b. Request modifications to the design of. the Generating Facility's electrical
system and the Seller's Interconnection Facilities. Such modifications shall be
required if necessary to maintain Edison Electric System Integrity when in
parallel with the Edison electric system.
4.2.3 If Seller's Generating Facility includes an induction-type generators,
Seller shall provide individual power factor correction capacitors for each such
generator. Such capacitors shall be switched on and off simultaneously with each
of the associated', induction-type generators of the Generating Facility. The
KVAR rating of such capacitors shall be the highest standard value which will
not exceed such generators no-load KVAR requirement. Seller shall not install
power factor correction in excess of that required by this Section unless agreed
to in writing by the Parties.
4.2.4 Seller shall not locate any part of a wind-driven generating unit of the
Generating Facility within a distance 1.25 times the height of a wind turbine
structure of an existing electric utility 33 kV, 66 kV, or 115 kV transmission
line right of way or within three rotor blade diameters of an existing electric
utility 220 kV or 500 kV transmission line right of way or any proposed
transmission line right of way of which Edison is pursuing regulatory approval
for construction.
4.2.5 If Seller's Generating Facility is a small hydro project, the Contract
Capacity in Section 1.5 shall be based on the average of the 5 lowest years of
stream flow taken from a study covering a minimum 50 years of continuous data.
The Parties may agree upon a shorter period if data for a 50-year period is not
obtainable.
4.3 Construction
Edison shall have the right to review, consult with, and make recommendations
regarding Seller's construction schedule and to monitor the construction and
start-up of the Project. Seller shall notify Edison, at least one year prior to
Firm Operation, of changes in Seller's Construction Schedule which may affect
the date of Firm Operation.
4.4 Operation
4.4.1 The Generating Facility and Seller's Protective Apparatus shall be
operated and maintained in accordance with applicable California utility
industry standards and good engineering practices with respect to synchronizing,
voltage and reactive power control. Edison shall have the right to monitor
operation of the Project and may require changes in Seller's method of operation
if such changes are necessary, in Edison's sole judgment, to maintain Edison
Electric System Integrity.
4.4.2 Seller shall notify in writing Edison's Operating Representative at least
14 days prior to:,
(a) the initial testing of Seller's Protective Apparatus; and
(b) the initial parallel operation of Seller's Generators with Edison's
electrical system.
Edison shall have the right to have a representative present at each event.
4.4.3 Edison shall have the right to require Seller to disconnect the Generator
from the Edison electric system or to reduce the electrical output from the
Generator into the Edison electric system, whenever Edison determines, in its
sole judgement, that such a disconnection is necessary to facilitate maintenance
of Edison's facilities, or to maintain Edison Electric System Integrity. If
Edison requires Seller to disconnect the Generator from the Edison electric
system pursuant to this Section 4.4.3, Seller shall have the right to continue
to serve its total electrical requirements provided Seller has elected Operating
Option III. Each Party shall endeavor to correct, within a reasonable period,
the condition on its system which necessitates the disconnection' or the
reduction of electrical output. The duration of the disconnection or the
reduction in electrical output shall be limited to the period of tine such a
condition exists.
4.4.4 The Generating Facility shall be operated with all of Seller's Protective
Apparatus in service whenever the Generator is connected to or is operated in
parallel with the Edison electric system. Any deviation for brief periods of
emergency or maintenance shall only be by agreement of the Parties.
4.4.5 Each Party shall keep the other Party's Operating Representative informed
as to the operating schedule of their respective facilities affecting each
other's operation hereunder, including any reduction in Contract Capacity
availability. In addition, Seller shall provide Edison with reasonable advance
notice regarding its scheduled outages including any reduction in Contract
Capacity availability. Reasonable advance notice is as follows:
SCHEDULED OUTAGE ADVANCE NOTICE
EXPECTED DURATION TO EDISON
Less than one day 24 Hours
One day or more
(except major overhauls) 1 Week
Major overhaul 6 months
4.4.6 Notification by each Party's Operating Representative of outage date and
duration should be directed to the other Party's Operating Representative by
telephone.
4.4.7 Seller shall not schedule major overhauls during Peak Months.
4.4.8 Seller shall maintain an operating log at Seller's Facility with records
of: real and reactive power production; changes in operating status, outages,
Protective Apparatus operations; and any unusual conditions found during
inspections. Changes in setting shall also be logged for Generators which are
"block-loaded" to a specific kW capacity. In addition, Seller shall maintain
records applicable to the Generating Facility, including the electrical
characteristics of the Generator and settings or adjustments of the Generator
control equipment and protective devices. Information maintained pursuant to
this Section 4.4.8 shall be provided to Edison, within 30 days of Edison's
request.
4.4.9 If, at any time, Edison doubts the integrity of any of Seller's Protective
Apparatus and, believes that such loss of integrity would impair the Edison
Electric System Integrity, Seller shall demonstrate, to Edison's satisfaction,
the correct calibration and operation of the equipment in question.
4.4.10 Seller shall test all protective devices specified in Section 4.2 with
qualified Edison personnel present at intervals not to exceed four years.
4.4.11 Seller shall, to the extent possible, provide reactive power for its own
requirements, and where applicable, the reactive power losses of interfacing
transformers. Seller shall not deliver excess reactive power to Edison unless
otherwise agreed upon between the Parties.
4.4.12 The Seller warrants that the Generating Facility meets the requirements
of a Qualifying Facility as of the date of Firm Operation and will continue to
meet such requirements through the Contract Tern.
4.4.13 The Seller warrants that the Generating Facility shall at all times
conform to all applicable laws and regulations. Seller shall obtain and maintain
any governmental authorizations and permits for the continued operation of the
Generating Facility. If at any time Seller does not hold such authorizations and
permits, Seller agrees to reimburse Edison for any loss which Edison incurs as a
result of the Seller's failure to maintain governmental authorization and
permits.
4.4.14 At Edison's request, Seller shall make all reasonable effort to deliver
power at an average rate of delivery at least equal to the Contract Capacity
during periods of Emergency. In the event that the Seller has previously
scheduled an outage coincident with an Emergency, Seller shall make all
reasonable efforts to reschedule the outage. The notification periods listed in
Section 4.4.5 shall be waived by Edison if Seller reschedules the outage.
4.4.15 Seller shall demonstrate the ability to provide Edison the specified
Contract Capacity within 30 days of the date of Firm Operation. Thereafter, at
least once per year at Edison's request, Seller shall demonstrate the ability to
provide Contract Capacity for a reasonable period of time as, required by
Edison. Seller's demonstration of Contract Capacity shall be at Seller's expense
and conducted at a time and pursuant to procedures mutually agreed upon by the
Parties. If Seller fails to demonstrate the ability to provide the Contract
Capacity, the Contract Capacity shall be reduced by agreement of the Parties
pursuant to Section 9.1.2.6.
4.5 Maintenance
4.5.1 Seller shall maintain the Generating Facility in accordance with
applicable California utility industry standards and good engineering and
operating practices. Edison shall have the right to monitor such maintenance of
the Generating Facility. Seller shall maintain and deliver a maintenance record
of the Generating Facility to Edison's Operating Representatives upon request.
4.5.2 Seller shall make a reasonable effort to schedule routine maintenance
during Off-Peak Months. Outages for scheduled maintenance shall not exceed a
total of 30 peak hours for the Peak Months.
4.5.3 The allowance for scheduled maintenance is as follows:
a. Outage periods for scheduled maintenance shall not exceed 840 hours (35 days)
in any 12-month period. This allowance may be used in increments of an hour or
longer on a consecutive or nonconsecutive basis.
b. Seller may accumulate unused maintenance hours on a year-to-year basis up to
a maximum of 1,080 hours (45 days). This accrued time must be used consecutively
and only for major overhauls.
4.6 Any review by Edison of the design, construction, operation, or maintenance
of the Project is solely for the information of Edison. By making such review,
Edison makes no representation as to the economic and technical feasibility,
operational capability, or reliability of the Project. Seller shall in no way
represent to any third party that any such review by Edison of the Project,
including but not limited to, any review of the design, construction, operation,
or maintenance of the Project by Edison is a representation by Edison as to the
economic and technical feasibility, operational capability, or reliability of
said facilities. Seller is solely responsible for economic and technical
feasibility, operational capability, or reliability thereof.
5. Operating Options
5.1 Seller shall elect in Section 1.9 to Operate its Generating Facility in
parallel with Edison's electric system pursuant to one of the following options:
a. Operating Option I: Seller dedicates the entire Generator output to Edison
with no electrical service required from Edison.
b. Operating Option II: Seller dedicates the .entire Generator output to Edison
with electrical service required from Edison.
c. Operating Option III: Seller dedicates to Edison only that portion of the
Generator output in excess of Seller's electrical service requirements. As much
as practicable, Seller intends to serve its electrical requirements from the
Generator output and will require electrical standby from Edison as designated
in Section 1.9.
5.2 After expiration of the First Period of the Contract Term, Seller may change
the Operating Option, but not more than once per year upon at least 90 days
prior written notice to Edison. A reduction in Contract Capacity as a result of
a change in operating options shall be subject to Section 9.1.2.6. Edison shall
not be required to remove or reserve capacity of Interconnection Facilities made
idle by a change in operating options. Edison may dedicate any such idle
Interconnection Facilities at any time to serve other customers or to
interconnect with other electric power sources. Edison shall process requests
for changes of operating option in the chronological order received.
5.2.1 When the Seller wishes to reserve Interconnection Facilities paid for by
the Seller but idled by a change in operation option, Edison shall impose a
special facilities charge related to the operation and maintenance of the
Interconnection Facility. When the Seller no longer needs said facilities for
which it has paid, the Seller shall receive credit for the net salvage value of
the Interconnection Facilities dedicated to Edison's use. If Edison is able to
make use of these facilities to serve other customers, the Seller shall receive
the fair market value of the facilities
determined as of the date the Seller either decides no longer to use said
facilities or fails to pay the required maintenance fee.
6. Interconnection Facilities
6.1 The Parties shall execute an Interconnection Facilities Agreement selected
by Seller in Section 1.10, covering the design, installation, operation and
maintenance of the Interconnection Facilities required in Edison's sole
judgment, to permit an electrical interface between the Parties pursuant to
Edison's Tariff Rule No. 21.
6.2 The cost for the Interconnection Facilities set forth in the appendices
specified in Section 1.10, are estimates only for Seller's information and will
be adjusted to reflect recorded costs after installation is complete; except
that, upon Seller's written request to Edison, Edison shall provide a binding
estimate which shall be the basis for the Interconnection Facilities cost in the
Interconnection Facilities Agreement executed by the Parties.
6.3 The nature of the Interconnection Facilities and the Point of
Interconnection shall be set forth either by equipment lists or appropriate one-
line diagrams and shall be attached to the appropriate appendix specified in
Section 1.10.
6.4 The design, installation,.-operation, maintenance, and modifications of the
Interconnection Facilities' shall be at Seller's expense.
6.5 Seller shall not commence parallel operation of the Generating Facility
until written approval for operation of the Interconnection Facilities has been
received from Edison. The Seller shall notify Edison at least forty-five days
prior to the initial energizing of the Point of Interconnection. Edison shall
have the right to inspect the Interconnection Facilities within thirty days of
receipt of such notice. If the facilities do not pass Edison's inspection,
Edison shall provide in writing the reasons for this failure within five days of
the inspection.
6.6 Seller, at no cost to Edison, shall acquire all permits and approvals and
complete all environmental impact studies necessary for the design,
installation, operation, and maintenance of the Interconnection Facilities.
7. Electric Lines And Associated Easements
7.1 Edison shall, as it deems necessary or desirable, build electric lines,
facilities and other equipment, both overhead and underground, on and off
Seller's Facility, for the purpose of effecting the agreements contained in this
Contract. The physical location of such electric lines, facilities and other
equipment on Seller's Facility shall be determined by agreement of the Parties.
7.2 Seller shall reimburse Edison for the cost of acquiring property rights off
Seller's Facility required by -Edison to meet its obligations under this
Contract.
7.3 Seller shall grant, or cause to be granted, to Edison, without cost to
Edison, and by an instrument of conveyance, acceptable to Edison, rights of way/
easements and other property interests necessary to construct, reconstruct, use,
maintain, alter, add to, enlarge, repair, replace, inspect and remove, at any
time, the electric lines, facilities or other equipment, both overhead and
underground, which are required by Edison to effect the agreements contained in
the Contract and the rights of ingress and egress at all reasonable times
necessary for Edison to perform the activities contemplated in the Contract.
7.4 The electric lines, facilities, or other equipment referred to in this
Section 7 installed by Edison on or off Seller's Facility shall be and remain
the property of Edison.
7.5 Edison shall have no obligation to Seller for any delay or cancellation due
to inability to acquire a satisfactory right of way, easements, or other
property interests.
8. Metering
8.1 All meters and equipment used for the measurement of electric power for
determining Edison's payments to Seller pursuant to this Contract shall be
provided, owned, and maintained by Edison at Seller's expense in accordance with
Edison's Tariff Rule No. 21.
8.2 All meters and equipment used for billing Seller for electric service
provided to Seller by Edison under Operating Options II or III shall be
provided, owned, and maintained by Edison at Edison's expense in accordance with
Edison's Tariff Rule No. 16.
8.3 The meters and equipment used for measuring the Energy sold to Edison-shall
be located on the side of the Interconnection Facilities as specified by Seller
in Section 1.13. If the metering equipment is located on Seller's side of the
Interconnection Facilities, then a loss compensation factor agreed upon by the
Parties shall be applied. At the written request of the Seller, and at Seller's
sole expense, Edison shall measure actual transformer losses. If the actual
measured value differs from the agreed-upon loss compensation factor, the actual
value shall be applied prospectively. If the meters are placed on Edison's side
of the Interconnection Facilities, service shall be provided at the available
transformer high-side voltage.
8.4 For purposes of monitoring the Generator operation and the determination of
standby charges, Edison shall have the right to require, at Seller's expense,
the installation of generation metering. Edison may also require the
installation of telemetering equipment at Seller's expense for Generating
Facilities equal to or greater than 10 MW. Edison may require the installation
of telemetering equipment at Edison's expense for Generating Facilities less
than 10 MW.
8.5 Edison's meters shall be sealed and the seals shall be broken only when the
meters are to be inspected, tested,-or adjusted by Edison. Seller shall be given
reasonable notice of testing and have the right to have its Operating
Representative present on such occasions.
8.6 Edison's meters installed pursuant to this Contract shall be tested by
Edison, at Edison's expense, at least once each year and at any reasonable time
upon request by either Party, at the requesting Party's expense. If Seller makes
such request, Seller shall reimburse said expense to Edison within thirty days
after presentation of a bill therefore.
8.7 Metering equipment found to be inaccurate shall be repaired, adjusted, or
replaced by Edison such that the metering accuracy of said equipment shall be
within two percent. If metering equipment inaccuracy exceeds two percent, the
correct amount of Energy and Contract Capacity delivered during the period of
said inaccuracy shall be estimated by Edison and agreed upon by the Parties.
9. Power Purchase Provisions
Prior to the date of Firm Operation, Seller shall be paid for Energy only
pursuant to Edison's published avoided cost of energy based on Edison's full
avoided operating cost as periodically updated and accepted by the Commission.
If at any time Energy can be delivered to Edison and Seller is contesting the
claimed jurisdiction of any entity which has not issued a license or other
approval for the Project, Seller, in its sole discretion and risk, may deliver
Energy to Edison and for any Energy purchased by Edison Seller-shall receive
payment from Edison for (i) Energy pursuant to this Section, and (ii) as-
available capacity based on a capacity price from the Standard Offer No. 1
Capacity Payment Schedule as approved by the Commission. Unless and until all
required licenses and approvals have been obtained, Seller may discontinue
deliveries at any time.
9.1 Capacity Payments
Seller shall sell to Edison and Edison shall purchase from Seller capacity
pursuant to the Capacity Payment Option selected by Seller in Section 1.11. The
Capacity Payment Schedules will be based on Edison's full avoided operating
costs as approved by the Commission throughout the life of this Contract. Data
used to derive Edison's full avoided costs will be made available to the Seller,
to the extent specified by Seller upon request.
9.1.1 Capacity Payment Option A -- [Intentionally Deleted]
9.1.2 Capacity Payment Option B -- Firm Capacity Purchase
If Seller selects Capacity Payment Option B, Seller shall provide to Edison for
the Contract Term the Contract Capacity specified in Section 1.5, or as adjusted
pursuant to Section 9.1.2.7, and Seller shall be paid as follows:
9.1.2.1 If Seller meets the performance requirements set forth in Section
9.1.2.2, Seller shall be paid a Monthly Capacity Payment, beginning from the
date of Firm Operation equal to the sum of the on-peak, mid-peak, and off-peak
Capacity Period Payments. Each Capacity Period Payment is calculated pursuant to
the following formula:
MONTHLY PERIOD CAPACITY PAYMENT A x B x C x D
Where A = Contract Capacity Price specified in Section 1.11 based on the
Standard Offer No. 2 Capacity Payment Schedule as approved by the Commission and
in effect on the date of the execution of this Contract.
B = Conversion factors to convert annual capacity prices to monthly payments by
time of delivery as specified in Standard Offer No. 2 Capacity Payment Schedule
and subject to periodic modifications as approved by the Commission.
C = Contract Capacity specified in Section 1.5.
D = Period Performance Factor, not to exceed 1.0, calculated as follows:
Period kWh purchased by Edison limited by the level of Contract Capacity
-------------------------------------------------------------------------
0.8 x Contract Capacity x (Period Hours minus Maintenance Hours Allowed in
Section 4.5.)
9.1.2.2 Performance Requirements
To receive the Monthly Capacity Payment in Section 9.1.2.1, Seller shall provide
the Contract Capacity in each Peak Month for all on-peak hours as such peak
hours are defined in Edison's Tariff Schedule No. TOU-8 on file with the
Commission, except that Seller is entitled to a 20% allowance for Forced Outages
for each Peak Month. Seller shall not be subject to such performance
requirements for the remaining hours of the year.
a. If Seller fails to meet the requirements specified in Section 9.1.2.2, Edison
may, in Edison's sole discretion, place Seller on probation for a period not to
exceed 15 months. if Seller fails to meet the requirements specified in Section
9.1.2.2 during the probationary period, Edison may derate the Contract Capacity
to the greater of the capacity actually delivered during the probationary
period, or the capacity at which Seller can reasonably meet such requirements. A
reduction in Contract Capacity as a result of this Section 9.1.2.2 shall be
subject to Section 9.1.2.6.
b. If Seller fails to meet the requirements set forth in Section 9.1.2.2 due to
a Forced Outage on the Edison system or a request to reduce or curtail delivery
under Section 9.4, Edison shall continue monthly Capacity Payments pursuant to
Capacity Payment Option B. The Contract Capacity curtailed shall be treated the
sane as scheduled maintenance outages in the Calculation of the Monthly Capacity
Payment.
9.1.2.3 If Seller is unable to provide Contract Capacity due to Uncontrollable
Forces, Edison shall continue Monthly Capacity Payments for 90 days from the
occurrence of the Uncontrollable Force. Monthly Capacity Payments payable during
a period of interruption or reduction by reason of an Uncontrollable Force shall
be treated the same as scheduled maintenance outages.
9.1.2.4 - [Intentionally Deleted]
9.1.2.5 Capacity Bonus Payment
For Capacity Payment Option B, Seller nay receive a Capacity Bonus Payment as
follows:
a. Bonus During Peak Months -- For a Peak Month, Seller shall receive a Capacity
Bonus Payment if (i) the requirements set forth in Section 9.1.2.2 have been
met, and (ii) the on-peak capacity factor exceeds 85%.
b. Bonus During Non-Peak Months -- For a non-peak month, Seller shall receive a
Capacity Bonus Payment if (i) the requirements set forth in Section 9.1.2.2 have
been met, (ii) the on-peak capacity factor for each Peak Month during the year
was at least 85%, and (iii) the on-peak capacity factor for the non-peak month
exceeds 85%.
c. For any eligible month, the Capacity Bonus Payment shall be calculated as
follows:
CAPACITY B0NUS PAYMENT = A x D x C x D
Where A = (1.2 x On-Peak Capacity Factor) - 1.02
Where the On-Peak Capacity Factor, not to exceed 1.0, is calculated as follows:
Period kWh purchased by Edison limited by the level of Contract Capacity
-------------------------------------------------------------------------
(Contract Capacity) x (Period Hours minus Maintenance Hours Allowed in Section
4.5)
B = Contract Capacity Price specified in Section 1.11 for Capacity Payment
Option B
C = 1/12
D = Contract Capacity specified in Section 1.5
d. When Seller is entitled to receive a Capacity Bonus Payment, the Monthly
Capacity Payment shall be the sum of the Monthly Capacity Payment pursuant to
Section 9.1.2.1 and' the Monthly Capacity Bonus Payment pursuant to this
Section.
e. For Capacity Payment Option B, Seller shall be paid for capacity in excess of
Contract Capacity based on the as-available capacity price in Standard Offer No.
1 Capacity Payment Schedule, as updated and approved by the Commission. Seller
shall not receive any as-available
capacity payment in excess of Contract Capacity if Seller's Generating Facility
is a small hydro project.
9.1.2.6 Capacity Reduction
a. Seller may reduce the Contract Capacity specified in Section 1.5, provided
that Seller gives Edison prior written notice for a period determined by the
amount of Contract Capacity reduced as follows:
Amount of Contract Length of
Capacity Reduced Notice Required
-------------------------------------
25,000 kW or under 12 months
25,001 - 50,000 kW 36 months
50,001 - 100,000 kW 48 months
over 100,000 kW 60 months
b. Subject to Section 10.4, Seller shall refund to Edison with interest at the
current published Federal Reserve Board three months prime commercial paper rate
an amount equal to the difference between (i) the accumulated Monthly Capacity
Payments paid by Edison pursuant to Capacity Payment Option B up to the time the
reduction notice is received by Edison, and (ii) the total capacity payments
which Edison would have paid if based on the Adjusted Capacity Price.
c. From the date the reduction notice is received to the date of actual capacity
reduction, Edison shall make capacity payments based on the Adjusted Capacity
Price for the amount of Contract Capacity being reduced.
d. Seller may reduce Contract Capacity without the notice prescribed in Section
9.1.2.6(a), provided that Seller shall refund to Edison the amount specified in
Section 9.1.2.6(b) and an amount equal to: (i) the amount of Contract Capacity
being reduced, times (ii) the difference between the Current Capacity Price and
the Contract Capacity Price, times (iii) the number of years and fractions
thereof (not less than one year) by which the Seller has been deficient in
giving prescribed notice. If the Current Capacity Price is less than the
Contract Capacity Price, only payment under Section 9.1.2.6(b) shall be due to
Edison.
9.1.2.7 Adjustment to Contract Capacity The Parties may agree in writing at any
time to adjust the Contract Capacity. Seller may reduce the Contract Capacity
pursuant to Section 9.1.2.6. Seller may increase the Contract Capacity with
Edison's approval and thereafter receive payment for the increased capacity in
accordance with the Contract Capacity Price for the Capacity Payment Option
selected by Seller for the remaining Contract Term.
9.2 Energy Payments --First Period
During the First Period of the Contract Term, Seller shall be paid a Monthly
Energy Payment for the Energy delivered by the Seller to Edison at the Point of
Interconnection pursuant to the Energy Payment Option selected by Seller in
Section 1.12, as follows. (Data used to derive Edison's Energy payments for the
First Period will be made available to the Seller, to the extent specified by
Seller, upon request.)
9.2.1 Energy Payment Option 1 -- Forecast of Annual Marginal Cost of Energy.
If Seller selects Energy Payment Option 1, then during the First Period of the
Contract Term, Seller shall be paid a Monthly Energy Payment for Energy
delivered by Seller and purchased by Edison during each month in the First
Period of the Contract Term pursuant to the following formula:
MONTHLY ENERGY PAYMENT (A x D) + (B x D) + (C x D)
Where A = kWh purchased by Edison during on-peak periods defined in Edison's
Tariff Schedule No. TOU-8.
B = kWh purchased by Edison during mid-peak periods defined in Edison's Tariff
Schedule No. TOU-8.
C = kWh purchased by Edison during off-peak periods defined in Edison's Tariff
Schedule No. TOU-8.
D = The sum of: (i) the appropriate time differentiated energy price from the
Forecast of Annual Marginal Cost of Energy, multiplied by the decimal equivalent
of the percentage of the forecast specified in Section 1.12, and (ii) the
appropriate time differentiated energy price from Edison's published avoided
cost of energy multiplied by the decimal equivalent of the percentage of the
published energy price specified in Section 1.12.
9.2.2 Energy Payment Option 2 -- Levelized Forecast of Marginal Cost of Energy.
If Seller selects Energy Payment Option 2, then during the First Period of the
Contract Term, Seller shall be paid a Monthly Energy Payment for Energy
delivered by Seller and purchased by Edison each month during the First Period
of the Contract Term pursuant to the following formula:
MONTHLY ENERGY PAYMENT = (A x D) + (B x D) + (C x D)
Where A = kWh purchased by Edison during on-peak periods defined in Edison's
Tariff Schedule No. TOU-8.
B = kWh purchased by Edison during mid-peak periods defined in Edison's Tariff
Schedule No. TCU-8.
C = kWh purchased by Edison during off-peak periods defined in Edison's Tariff
Schedule No. TOU-8.
D = The sum of:
(i) the appropriate time differentiated energy price from the Levelized Forecast
of Marginal Cost of Energy, for the First Period of the Contract Term multiplied
by the decimal equivalent of the percentage of the levelized forecast specified
in Section 1.12, and (ii) the appropriate time differentiated energy price from
Edison's published avoided cost of energy multiplied by the decimal equivalent
of the percentage of the published energy price specified in Section 1.12.
9.2.2.1 Performance Requirement for Energy Payment Option 2
During the First Period when the annual forecast referred to in Section 9.2.1 is
greater than the levelized forecast referred to in Section 9.2.2, Seller shall
deliver to Edison at least 70 percent of the average annual kWh delivered to
Edison during those previous periods when the levelized forecast referred to in
Section 9.2.2 is greater than the annual forecast referred to in Section 9.2.1
as resource conditions permit for solar, wind, and hydro Generating Facilities
and excluding uncontrollable forces. If Seller does not meet the performance
requirements of this Section 9.2.2.1, Seller shall be subject to Section 9.5.
9.3 Energy Payments - Second Period
During the Second Period of the Contract Term, Seller shall be paid a Monthly
Energy Payment for Energy delivered by Seller and purchased by Edison at a rate
equal to 100% of Edison's published avoided cost of energy based on Edison's
full avoided operating cost as updated periodically and accepted by the
Commission, pursuant to the following formula:
MONTHLY ENERGY PAYMENT = kWh purchased by Edison for each on-peak, mid-peak, and
off-peak time period defined in Edison's Tariff Schedule No. TOU-8
X Edison's published avoided cost of energy by time of delivery for
- ----------
each time period. Data used to derive Edison's full avoided costs will be made
available to the Seller, to the extent specified by Seller, upon request.
9.4 Edison shall not be obligated to accept or pay for Energy, and may request
Seller whose Generating Facility is one (1) till or greater to discontinue or
reduce delivery of Energy, for not more than 300 hours annually during off-peak
hours when (i) purchases would result in costs greater than those which Edison
would incur if it did not purchase Energy from Seller but instead utilized an
equivalent amount of Energy generated from another Edison source, or (ii) the
Edison Electric System demand would require that Edison hydro-energy be spilled
to reduce generation.
9.5 Energy Payment Refund
If Seller elects Energy Payment Option 2, Seller shall be subject to the
following:
If Seller fails to perform the Contract obligations for any reason during the
First Period of the Contract Term, or fails to meet the performance requirements
set forth, in Section 9.2.2.1, and at the time of such failure to-perform, the
net present value of the cumulative Energy payments received by Seller pursuant
to Energy Payment Option 2 exceeds the net present value of what
Seller would have been paid pursuant to Energy Payment Option 1, Seller shall
make an energy payment refund equal to the difference in such net present values
in the year in which the refund is due. The present value calculation shall be
based upon the rate of Edison's incremental cost of capital specified in Section
1.12.
9.5.2 Not less than 90 days prior to the date Energy is first delivered to the
Point of Interconnection, Seller shall provide and maintain a performance bond,
surety bond, performance insurance, corporate guarantee, or bank letter of
credit, satisfactory to Edison, which shall insure payment to Edison of the
Energy Payment Refund at any time during the First Period. Edison may, in its
sole discretion accept another form of security except that in such instance a
1-1/2 percent reduction shall then apply to the levelized forecast referred to
in Section 9.2.2 in computing payments for Energy. Edison shall be provided with
certificates evidencing Seller's compliance with the security requirements in
this Section which shall also include the requirement that Edison be given 90
days prior written notice of the expiration of such security.
9.5.3 If Seller fails to provide replacement security not less than 60 days
prior to the date of expiration of existing security, the Energy Payment Refund
provided in Section 9.5 shall be payable forthwith. Thereafter, payments for
Energy shall be 100 percent of the Monthly Energy Payment provided in Section
9.2.1.
9.5.4 If Edison at any time determines the security to be otherwise inadequate,
and so notifies Seller, payments thereafter for Energy shall be 100 percent of
the Monthly Energy Payment provided in Section 9.2.1. If within 30 days of the
date Edison gives notice of such inadequacies, Seller satisfies Edison's
security requirements, Energy Payment Option 2 shall be reinstated. If Seller
fails to satisfy Edison's security requirements within the 30-day period, the
Energy Payment Refund provided in Section 9.5 shall be payable forthwith.
10. Payment And Billing Provisions
10.1 For Energy and capacity purchased by Edison:
10.1.1 Edison shall mail to Seller not later than thirty days after the end of
each monthly billing period (1) a statement showing the Energy and Contract
Capacity delivered to Edison during the on-peak, mid-peak, and off-peak periods,
as those periods are specified in Edison's Tariff Schedule No. TOU-8 for that
monthly billing period, (2) Edison's computation of the amount due Seller, and
(3) Edison's check in payment of said amount.
10.1.2 If the monthly payment period involves portions of two different
published Energy payment schedule periods, the monthly Energy payment shall be
prorated on the basis of the percentage of days at each price.
10.1.3 If the payment period is less than 27 days or greater than 33 days, the
capacity payment shall be prorated on the basis of the average days per month
per year.
10.1.4 If within thirty days of receipt of the statement Seller does not make a
report in writing to Edison of an error, Seller shall be deemed to have waived
any error in Edison's statement, computation, and payment, and they shall be
considered correct and complete.
10.2 For electric service provided by Edison:
10.2.1 Under Operating Option III pursuant to Section 5.1, standby electric
service shall be provided under terms and conditions of Edison's tariff schedule
indicated below as now in effect, or as may hereafter be authorized by the
Commission to be revised. The applicable tariff schedules are:
STANDBY TARIFF ELECTRIC SERVICE TARIFF
SCHEDULE NO.
SCG-l TOU-8 or GS-2
SCG-2 TOU-8
SCG-3 TOU-8
10.2.1.1 (Applicable to SCG-1 only) The Standby Demand for calculation of the
standby charge in SCG-1 as specified in Section 1.9. Edison reserves the right
to adjust the Standby Demand based on recorded demand during periods standby
power is required.
10.2.1.2 (Applicable to SCG-1 only) The capacity rating for determination of
standby waiver qualifications shall be Contract Capacity plus the maximum
electric load served by the Generating Facility during the on-peak time period
recorded during the preceding 12-month tine period.
10.2.1.3 A minimum monthly charge may be established for standby electric
service as provided in the tariff schedule elected in Section 1.9. Said minimum
monthly charge shall be specified in Section 1.9.
10.2.2 Under Operating Options II and III pursuant to Section 5.1, electric
service shall be provided under terms, conditions, and rates of Edison's tariff
schedule indicated below as now in effect or as may hereafter be authorized by
the Commission to be revised.
The applicable tariff schedule is: TOU-8,
The contract demand for calculation of the minimum demand charge in the
applicable tariff schedules is specified in Sect-ion 1.9.
10.2.3 Edison shall commence billing Seller for electric service rendered
pursuant to the applicable tariff schedule on the date that the Point of
Interconnection is energized.
10.3 Monthly charges associated with Interconnection Facilities shall be billed
pursuant to the Interconnection Facilities Agreement contained in the Appendix
specified in Section 1.10.
10.4 Payments due to Contract Capacity Reduction
10.4.1 The Parties agree that the refund and payments provided in Section
09.1.2.6 represent a fair compensation for the reasonable losses that would
result from such reduction of Contract Capacity.
10.4.2 In the event of a reduction in Contract Capacity, the quantity, in kW, by
which the Contract Capacity is reduced shall be used to calculate the refunds
and payments due Edison in accordance with Section 9.1.2.6, as applicable.
10.4.3 Edison shall provide invoices to Seller for all refunds and payments due
Edison under this section which shall be due within 60 days.
10.4.4 If Seller does not make payments as required in Section 10.4.3, Edison
shall have the right to offset any amounts due it against any present or future
payments due Seller and may pursue any other remedies available to Edison as a
result of Seller's failure to perform.
10.5 Energy Payment Refund
Energy Payment Refund is immediately due and payable upon Seller's failure to
perform the contract obligations as specified in Section 9.5.
11. Taxes
11.1 Seller shall pay ad valorem taxes and other taxes properly attributable to
the Project. If such taxes are assessed or levied against Edison, Seller shall
pay Edison for such assessment or levy.
11.2 Seller shall pay ad valorem taxes and other taxes properly attributed to
land, land rights, or interest in land for the Project. If such taxes are
assessed or levied against Edison, Seller shall pay Edison for such assessment
or levy.
11.3 If the Interconnection Facilities are owned by Edison, Edison shall pay ad
valorem taxes and other taxes property attributed to said facilities. If such
taxes are assessed or levied against Seller, Edison shall pay Seller for such
assessment or levy.
11.4 Seller or Edison shall provide information concerning the Project to any
requesting taxing authority.
12. Termination
12.1 This Contract shall terminate if Firm Operation does not occur within 5
years of the date of Contract execution.
13. Liability
13.1 Each Party (First Party) releases the other Party (second Party), its
directors, officers, employees and agents from any loss, damage, claim, cost,
charge, or expense of any kind or nature (including any direct, indirect or
consequential loss, damage, claim, cost, charge, or expense), including
attorney's fees and other costs of litigation incurred by the First Party in
connection with damage to property of the First Party caused by or arising out
of the Second Party's construction, engineering, repair, supervision,
inspection, testing, protection, operation, maintenance, replacement,
reconstruction, use or ownership of its facilities, to the extent that such
loss, damage, claim, cost, charge, or expense is caused by the negligence of
Second Party, its directors, officers, employees, agents, or any person or
entity whose negligence would be imputed to Second Party.
13.2 Each Party shall indemnify and hold harmless the other Party, its
directors, officers, and employees or agents from and against any loss, damage,
claim, cost, charge, (including direct, indirect or consequential loss, damage,
claim, cost charge, or expense), including attorney's fees and other costs of
litigation incurred by the other Party in connection with the injury to or death
of any person or damage to property of a third party arising out of the
indemnifying Party's construction, engineering, repair, supervision, inspection,
testing, protection, operation, maintenance, replacement, reconstruction, use,
or ownership of its facilities, to the extent that such loss, damage, claim,
cost, charge, or expense is caused by the negligence of the indemnifying Party,
its directors, officers, employees, agents, or any person or entity whose
negligence would be imputed to the indemnifying Party; provided, however, that
each Party shall be solely responsible for and shall bear all cost of claims
brought by its contractors or its own employees and shall indemnify and hold
harmless the other Party for any such costs including costs arising out of any
workers compensation law. Seller releases and shall defend, and indemnify Edison
from, any claim, cost, loss, damage, or liability arising from any contrary
representation concerning the effect of Edison's review of the design,
construction, operation, or maintenance of the Project.
13.3 The provisions of this Section 13 shall not be construed so as to relieve
any insurer of its obligations to pay any insurance claims in accordance with
the provisions of any valid insurance policy.
13.4 Neither Party shall be indemnified under this section 13 for its liability
or loss resulting from its sole negligence or willful misconduct.
14. Insurance
14.1 Until Contract is terminated, Seller shall obtain and maintain in force as
hereinafter provided comprehensive general liability insurance, including
contractual liability coverage, with a combined single limit of (i) not less
than $1,000,000 each occurrence for Generating Facilities 100 kW or greater;
(ii) not less than $500,000 for each occurrence for Generating Facilities
between 20 kW and 100 kW; and (iii) not less than $100,000 for each occurrence
for Generating Facilities less than 20 kW. The insurance carrier or carriers and
form of policy shall be subject to review and approval by Edison.
14.2 Prior to the date Seller's Generating Facility is first operated in
parallel with Edison's electric system, Seller shall (i) furnish certificate of
insurance to Edison, which certificate shall provide that such insurance shall
not be terminated nor expire except on thirty days prior written notice to
Edison, (ii) maintain such insurance in effect for so long as Seller's
Generating Facility is operated in parallel with Edison's electric system, and
(iii) furnish to Edison an additional insured endorsement with respect to such
insurance in substantially the following form:
"In consideration of the premium charged, Southern California Edison company
(Edison) is named as additional insured with respect to all liabilities arising
out of Seller's use and ownership of Seller's Generating Facility." "The
inclusion of more than one insured under this policy shall not operate to impair
the rights of one insured against another insured and the coverages afforded by
this policy will apply as though separate policies had been issued to each
insured. The inclusion of more than one insured will not" however, operate to
increase the limit of the carrier's liability., Edison will not, by reason of
its inclusion under this policy, incur liability to the insurance carrier for
payment of premium for this policy."
"Any other insurance carried by Edison which may be applicable shall be deemed
excess insurance and Seller's insurance primary for all purposes despite any
conflicting provisions in Seller's policy to the contrary." If the requirement
of Section 14.2(iii) prevents Seller from obtaining the insurance required in
Section 14.1 then upon written notification by Seller to Edison, Section
14.2(iii) shall be waived.
14.3 The requirements of this Section 14 shall not apply to Seller who is a
self-insured governmental agency with established record of self-insurance.
14.4 If Seller fails to comply with the provisions of this Section 14, Seller
shall, at its own cost, defend, indemnify, and hold harmless Edison, its
directors, officers, employees, agents, assigns. and successors in interest from
and against any and all loss, damage, claim, cost, charge, or expense of any
kind of nature (including direct, indirect or consequential loss, damage, claim,
cost, charge, or expense., including attorney's fees and other costs of
litigation) resulting from the death or injury to any person or damage to any
property, including the personnel and property of Edison, to the extent that
Edison would have been protected had Seller complied with all of the provisions
of this Section 14.
15. Uncontrollable Forces
15.1 Neither Party shall be considered to be in-default in the performance of
any of the agreements contained in this Contract, except for obligations to pay
money, when and to the extent failure of performance shall be caused by an
Uncontrollable Force.
15.2 If either Party because of an Uncontrollable Force is rendered wholly or
partly unable to perform its obligations under this Contract, the Party shall be
excused from whatever performance is affected by the Uncontrollable Force to the
extent so affected provided that:
(1) the nonperforming Party, within two weeks after the occurrence of the
Uncontrollable Force, gives the other Party written notice describing the
particulars of the occurrence,
(2) the suspension of performance is of no greater scope and of no longer
duration than is required by the Uncontrollable Force,
(3) the nonperforming Party uses its best efforts to remedy its inability to
perform (this subsection shall not require the settlement of any strike,
walkout, lockout or other labor dispute on terms which, in the sole judgment of
the Party involved in the dispute, are contrary to its interest. It is
understood and agreed that the settlement of strikes, walkouts, lockouts or
other labor disputes shall be at the sole discretion of the Party having the
difficulty),
(4) when the nonperforming Party is able to resume performance of its
obligations under this Contract, that Party shall give the other Party written
notice to that effect, and
(5) capacity payments during such periods of Uncontrollable Force on Seller's
part shall be governed by Section 9.1.1.3.
15.3 In the event that either Party's ability to perform cannot be corrected
when the Uncontrollable Force is caused by the actions or inactions of
legislative, judicial or regulatory agencies or other proper authority, this
Contract may be amended to comply with the legal or regulatory change which
caused the nonperformance.
If a loss of Qualifying Facility status occurs due to an Uncontrollable Force
and Seller fails to make the changes necessary to maintain its Qualifying
Facility status, the Seller shall compensate Edison for any economic detriment
incurred by Edison as a result of such failure.
16. Nondedication Of Facilities
Neither Party, by this Contract, dedicates any part of its facilities involved
in this Project to the public or to the service provided under the Contract, and
such service shall cease upon termination of the Contract.
17. Priority Of Documents
If there is a conflict between this document and any Appendix, the provisions of
this document shall govern. Each Party shall notify the other immediately upon
the determination of the existence of any such conflict.
18. Notices And Correspondence
All notices and correspondence pertaining to this Contract shall be in writing
and shall be sufficient if delivered in person or sent by certified mail,
postage prepaid, return receipt requested, to Seller as specified in Section
1.1, or to Edison as follows:
Southern California Edison Company Post Office Box 800
Rosemead, California 91770
Attention: Secretary
All notices sent pursuant to this Section 18 shall be effective when received,
and each Party shall be entitled to specify as its proper address any other
address in the United States upon written notice to the other Party.
19. Previous Communications
This Contract contains the entire agreement and understanding between the
Parties, their agents, and employees as to the subject matter of this contract,
and merges and supersedes all prior agreements, commitments, representations,
and discussions between the Parties. No Party shall be bound to any other
obligations, conditions, or representations with respect to the subject matter
of this Contract.
20. Nonwaiver
None of the provisions of the Contract shall be considered waived by either
Party except when such waiver is given in writing. The failure of either Edison
or Seller to insist on any one or more instances upon strict performance of any
of the provisions of the Contract or to take advantage of any of its rights
hereunder shall not be construed as a waiver of any such provisions or the
relinquishment of any such rights for the future, but the sane shall continue to
remain in full force and effect.
21. Successors And Assigns
Neither Party shall voluntarily assign its rights nor delegate its duties under
this Contract, or any part of such rights or duties, without the written consent
of the other Party, except in connection with the sale or merger of a
substantial portion of its properties. Any such assignment or
delegation made without such written consent shall be null and void. Consent for
assignment shall not be withheld unreasonably. Such assignment shall include,
unless otherwise specified therein, all of Seller's rights to any refunds which
might become due under this Contract.
22. Effect Of Section Headings
Section headings appearing in this Agreement are inserted for convenience only,
and shall not be construed as interpretations of text.
23. Governing Law
This Contract shall be interpreted, governed, and construed under the laws of
the State of California as if executed and to be performed wholly within the
State of California.
24. Multiple Originals
This Contract is executed in two counterparts, each of which shall be deemed an
original.
SIGNATURES
IN WITNESS WHEREOF, the Parties hereto have executed this Contract this 4th day
of June, 1984.
SOUTHERN CALIFORNIA EDISON COMPANY
By: /s/ Edward A. Myers, Jr.
--------------------------
Edward A. Myers, Jr.
Vice President
CHINA LAKE JOINT VENTURE
By CALIFORNIA ENERGY COMPANY,INC.
By: /s/ David L. Ludvigson
------------------------
David L. Ludvigson
Executive Vice President
1. Parties
This Amendment No. 1 to the Power Purchase Contract between Southern California
Edison Company and China Lake Joint Venture ("Contract") is entered into between
Southern California Edison Company ("Edison") and China Lake Joint Venture, a
Joint Venture between California Energy Company, Inc., and Caithness Geothermal
1980, Ltd. ("Seller"); individually, "Party," and collectively, "Parties."
2. Recitals
This Amendment No. 1 to the Contract is made with reference to the following
facts, among others:
2.1 The Parties executed the Contract as of the 4th day of June, 1984.
2.2 The Contract did not specify which of the methods of providing
interconnection facilities for the project set forth in Appendix A of the
Contract would be utilized.
2.3 Seller wishes to provide the interconnection facilities on a "Seller Owned
and operated Basis."
3. Agreement
3.1 The Parties hereby agree to amend the Contract as follows:
3.1.1 Section 1.2.a is amended to substitute "79,500 kW" for "75,000 kW".
3.1.2 Delete Section 1.5 entirely and insert:
"1.5 Contract Capacity: Phase 1 - 29,000 kW
Phase 2 - 23,000 kW
Phase 3 - 23,000 kW
TOTAL 75,000 kW`
3.1.3 Section 1.6 is amended to substitute "622,000,000" for "591,300,000".
3.1.4 Section 1.10 is amended to insert a check mark in the blank preceding
"Seller Owned and Operated Basis."
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3.1.5 Appendices A.1, A.2, and A.3 are deleted and replaced by the attached
Appendix A.
4. Other Contract Terms And Conditions
Except as expressly amended, the terms and conditions of the original Contract
shall remain in full force and effect.
5. Effective Date
This Amendment No. 1 shall become effective when it has been duly executed by
the Parties.
6. Signature Clause
The signatories hereto represent that they have been appropriately authorized to
enter into this Amendment No. I to the Contract on behalf of the Party for whom
they sign. This Amendment No. 1 is hereby executed as of this 29th day of May,
1985.
SOUTHERN CALIFORNIA EDSION COMPANY
By /s/ EDWARD A. MYERS JR.
------------------------
EDWARD A. MYERS JR.
Vice President
CHINA LAKE JOINT VENTURE
By CALIFORNIA ENERGY COMPANY, INC.
By /s/ DAVID L. LUDVIGSON
-----------------------
Name: DAVID L. LUDVIGSON
Title: Executive Vice President
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