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EXHIBIT 10.67
INTERCONNECTION AGREEMENT BETWEEN
MONTAUP ELECTRIC COMPANY
AND
NRG ENERGY. INC.
This Agreement, entered into as of the ____ day of October. 1998. between
Montaup Electric Company. a Massachusetts corporation (hereinafter "the
Company"), a subsidiary of Eastern Utility Associates ("EUA") and NRG Energy,
Inc., a Delaware corporation (hereinafter "the Generator").
W I T N E S S E T H:
WHEREAS. the Company and the Generator have entered into an Asset
Purchase Agreement (the "Asset Purchase Agreement") for the sale of certain
Company generating assets; and
WHEREAS, the Generator plans to own and operate or cause to be operated,
the purchased Company generating assets located on property situated at Somerset
Station in Somerset, MA (the "Facility"); and
WHEREAS, the Company and/or its Affiliates intend to continue to operate
their transmission and distribution business from their present locations; and
WHEREAS, this Interconnection Agreement is to establish the requirements,
terms and conditions for the interconnection of the Generator's Facility with
the transmission system of the Company; and
WHEREAS, the Interconnection Facilities are intended to enable the
Generator to operate in parallel with the Company's electrical system; and
WHEREAS, the Company and the Generator desire to interconnect the
Facility with the Company's transmission facilities, on terms mutually
beneficial to the Parties.
NOW THEREFORE, in consideration of the premises and the mutual promises
and agreements of the Company and the Generator (hereinafter referred to
collectively as the "Parties" and individually as a "Party"), intending to be
legally bound, hereby agree to the following:
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ARTICLE 1
OPERATION OF THE INTERCONNECTION FACILITIES
1.1 Operation and Maintenance of Interconnection Facilities. Generation
Interconnection Facilities means the facilities identified in Appendix A,
that are owned. operated and maintained by the Generator. Company
Interconnection Facilities are those facilities identified in Appendix A
that are owned, operated and maintained by the Company and supported by
the Generator or applicable tariff. Together Generation Interconnection
Facilities and Company Interconnection Facilities herein shall be
Interconnection Facilities. The Company shall own, operate and maintain
the Company's Interconnection Facilities supported by the Generator,
through use of its personnel or its designees under the supervision of
Company personnel, in accordance with good utility practice. The Company
may, in accordance with good utility practice, curtail or interrupt
interconnected operation of the Interconnection Facilities, at any time
that such curtailment or interruption or delay is necessary under good
utility practice, in order for the Company to inspect, repair, or replace
equipment associated with the Company's electric system, or to aid in the
restoration of service on the Company's system or on the systems with
which it is directly or indirectly interconnected, provided any such
interruption, reduction or refusal shall continue only for so long as it
is necessary under good utility practice and that the Company uses best
efforts to restore service promptly following any such curtailment or
interruption
1.2 Company Access to Interconnection Facilities. The Generator shall provide
and grant to the Company such access to the Generator's Facility, as
necessary or appropriate, to inspect, test, operate and maintain the
Company's Interconnection Facilities.
ARTICLE 2
METERING
2.1 Metering Requirements. The point of metering shall be at the
Interconnection Point (as defined in Article 3). The meters will be
tested and maintained by the Company or its designee at the sole expense
of the Generator. Equipment necessary for remote metering and indication
of the Interconnection Facilities is currently installed. The Generator
shall be responsible for the cost for regular routine testing of the
meters and associated equipment in accordance with the standards set
forth by the Company to implement NEPOOL requirements or similar regional
metering standards.
2.1.1 The installation by the Company or its designee, of additional
metering equipment shall be at the Generator's sole expense. The
Company shall furnish and install the necessary meter sockets and
wiring in accordance with accepted electrical
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standards and state and local codes. The Company shall furnish,
install, read, and maintain the metering equipment.
2.1.2 A separately executed agreement between the Parties shall provide
for the responsibilities and costs associated with reading the
meters and reporting pertinent data to the Independent System
Operator for New England ("ISO-NE") and/or the New England Power
Pool ("NEPOOL").
2.1.3 The Company shall also conduct testing, other than routine
maintenance testing, upon the reasonable request, and in the
presence of a representative of the Generator. The Company shall
maintain an accurate log or record of all such meter testing. If
the metering equipment is found in any such test to be inaccurate,
it shall be made accurate, and if it is found to be inaccurate by
more than two percent (2%) up or down, the meter readings for the
period of inaccuracy shall be adjusted to correct such
inaccuracies as far as the same can be reasonably -ascertained and
such adjusted readings shall be reported to the Generator by the
Company. If the period of inaccuracy cannot be ascertained such
period will be deemed to have -encompassed one-half of the time
period since the last test of the meter. The cost of any testing
performed in accordance with this paragraph shall be borne by the
Generator, if the results of the tests conducted by the Company
prove the metering equipment to be inaccurate by less than two
percent (2%) up or down, and otherwise by the Company.
ARTICLE 3
DELIVERY AND MEASUREMENT
All electricity shall be delivered at the Interconnection Point in the
form of three-phase sixty-hertz alternating current at a voltage of 115 kV. The
Interconnection Point means the point where the Company's system connects with
the Generator's Facility as identified in Appendix A. The parties agree to
negotiate in good faith to modify the Interconnection Point from time to time as
may be required by changes in applicable regulation, NEPOOL requirements,
alterations of the Facility or the Interconnection Facilities or by good utility
practice. Generating Units 5, 6 and the two jet combustion turbines (Unit 7) are
connected to the transmission system at the 115 kV switchyard. Unit 5 is
connected to both 115 kV busses through a breaker and a half arrangement with
the U6 line. Unit 6 is connected to both busses through a pair of breakers. Unit
7 is connected to the East bus through a single breaker.
ARTICLE 4
FORCE MAJEURE
The Company shall not be considered to be in default of any obligation
hereunder as a result of all or any part of the Interconnection Facilities being
destroyed, damaged, or otherwise rendered inoperable or unavailable as a result
of or caused by storm, flood, lightning, earthquake,
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fire, explosion, equipment failure, civil disturbance, labor dispute, regulatory
lag, Act of God or the public enemy, or any cause beyond the control of the
Company. Nor shall the unavailability of all or any part of the Interconnection
Facilities for any such cause relieve the Generator of any obligations to make
any payment under Article 5 of this Agreement as long as the Company shall use
good utility practice to restore the availability of the Interconnection
Facilities so rendered inoperable or unavailable at the cessation of the event
causing or resulting in such inoperability or unavailability.
The Company shall not be responsible in tort, contract or strict
Liability to the Generator for damages of any description whatsoever which may
result from any unavailability of the Interconnection Facilities unless such
availability is the result of willful default, deliberate misconduct or gross
negligence by the Company.
ARTICLE 5
BILLING AND PAYMENT
Bills shall be rendered by the Company to the Generator during the first
part of the succeeding month, and payment shall be due within twenty (20) days
of receipt of bill ("Due Date"). Such bills shall be delivered via first class
mail postage pre-paid, or by facsimile.
Billing for the expenses and overheads for on-going operations and
maintenance shall be as specified in Appendix B.
If the transmittal of payment is not postmarked by the Due Date, an
interest charge shall be paid on the unpaid balance computed daily from the Due
Date at an annual rate equal to two percent (2%) more than the then current
Prime Interest rate charged by the Bank of Boston. In the event the bill is
disputed, interest shall accrue only on the unpaid amount finally determined to
be due and payable.
Notwithstanding the above, if any bill remains unpaid for more than sixty
(60) days from the Due Date, except amounts in dispute, the Company may suspend
operation of the Interconnection Facilities hereunder until frill payment has
been made.
ARTICLE 6
PROCEDURES GOVERNING SHUTDOWN AND RESUMPTION
OF DELIVERY OF GENERATION
The following procedures govern the shutdown and resumption of delivery
of generation. Such procedures shall be subject to change as mutually agreeable:
6.1 Unscheduled Facility Outage. In the event of an unscheduled shutdown by
the Generator, it shall notify the Company as promptly as is possible by
telephone notice given directly to the Company's System Operator, as to
the circumstances believed to have caused the
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shutdown, and subsequently shall confirm to the Company in writing its
formal determination as to the reason for the interruption.
6.2 Emergency Relating to Facility Power. If a curtailment or interruption of
the acceptance by the Company of electric power generated in accordance
with Article 1.1 is occasioned by emergency circumstances which do not
permit advance notice, the Company shall notify the Generator by
telephone, as promptly after the event as is reasonably possible under
the circumstances, of the reasons for the shutdown and its expected
duration.
6.3 Failure of SCADA. In the event of a failure of the SCADA terminal to
transmit data to the Company or its affiliate's SCADA system, at a time
when the continuing inflow of the Generator's energy into the Company's
electrical system would unreasonably impair or threaten to impair the
safe and reliable operation of the Company's system, the Company shall
have the right to require the Generator to shut down its Facility for the
duration of such period. The Company shall be subject to no liability in
the event of such shutdown unless such failure is a result of willful
default, deliberate misconduct or gross negligence of the Company. The
Parties agree to take all reasonable actions to prevent, mitigate and
promptly correct any such failures and to cooperate to that end.
6.4 Shutdown, Reduction, Curtailment or Delay of Operation Of Interconnection
Facilities. In the event that the Company reduces, curtails or delays the
operation of the Interconnection Facilities in accordance with Article
1.1, the Company shall be subject to no liability for such interruption;
provided that the Company complies with the standards set forth in
Article 1.1. In the case when shutdown can be scheduled, the Company
shall notify the Generator by telephone, at the earliest practical time,
but not later than at least fifteen minutes prior to the scheduled
shutdown, of reasons for the shutdown, the time scheduled for it to take
place, and its expected duration. The Company shall resume interconnected
operation of the facility as quickly as possible in accordance with
Article 1.1.
6.5 Procedures for Resumption of Facility Operation. On occasions when
interconnected operation has been interrupted by the Generator and the
Generator wishes to resume such interconnected operation, it shall give
telephone notice to the Company or its affiliate's System Operator at
least fifteen minutes in advance as to the time which resumption of
operation is desired; provided, however, that such advance notice to
Company may be waived by the Company's said System Operator and the
Generator may institute a manual interconnection more quickly in any
instance in which the Company's said System Operator shall deem
appropriate. In the event that the Generator's interconnection shall have
been previously disconnected or locked out by the Company, the Company
shall reconnect and/or reset the permissive relay so as to allow the
Generator to resume interconnected operation at the time scheduled in the
Company's telephone notice. However, if technical conditions existing on
the Company's system are such that it is not feasible in accordance with
this Article for the Company to allow interconnection with
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the Generator at the time proposed for the resumption of generation, the
Company may deny interconnected operation at that time, but shall
thereafter notify the Generator by telephone as to the earliest time that
it is able to accept generation from the Generator and shall cooperate
diligently to resume interconnected operation with the Generator at that
time.
6.6 Right to Open Disconnects. The Generator shall afford to the Company
reasonable access at all times to the disconnects associated with the
Interconnection Facilities, and the Company shall have the right to open
said disconnects whenever it is appropriate to do so pursuant to Article
1.1, provided that the Company complies with the provisions of Article
1.1.
ARTICLE 7
RESPONSIBILITY FOR PROTECTIVE RELAYS
The Interconnection Facilities are designed and constructed with mutually
beneficial protective relay schemes, serving functions and meeting tolerances
which have been agreed upon between the Parties. The Generator shall own and be
responsible for maintaining the said mutual relay schemes in good operational
order and condition, and shall cause said mutual relay scheme to operate within
prescribed tolerances. The Generator shall be responsible for adhering to
reasonable testing procedures and schedules for such testing for such equipment
and the reporting thereof as well as for any reasonable periodic maintenance or
replacement, as determined by the Company in accordance with good utility
practice.
ARTICLE 8
RESPONSIBILITY TO PROTECT EACH PARTY'S SYSTEM
FROM THE OTHER PARTY'S SYSTEM
Except as may be set forth in this Agreement to the contrary, each Party
shall be responsible for protecting its facilities from possible damage by
reason of electrical disturbances or faults caused by the operation, faulty
operation, or non-operation of the other Party's facilities, as well as for
electrical systems interconnected to the Company's electrical system and unless
due to willful default, deliberate misconduct or gross negligence, such other
Party shall not be liable for any damages so caused.
ARTICLE 9
POWER FACTOR
Unless otherwise requested by the Company or its designee. the Generator
will operate the Facility at unity power factor at the metering point and within
tolerance of the power factor controller. In no case however, will the Generator
be required to operate outside the volt-ampere range of the Facility's
capability as determined from the equipment manufacturer's recommendations.
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ARTICLE 10
TERM OF AGREEMENT
This Agreement shall become effective on the Closing Date (as defined in
the Asset Purchase Agreement) and the term of this Agreement shall remain in
effect until the date on which the Facility is completely decommissioned. The
Company shall file this Agreement with the Federal Energy Regulatory Commission
("FERC") as a Rate Schedule within the meaning of 18 C.F.R. Part 35. The
Generator agrees to support such filing and cooperate with the Company and
provide any information reasonably required by the Company to comply with
applicable filing requirements.
ARTICLE 11
ASSIGNMENT
This Agreement shall be binding upon and shall inure to the benefit of,
and may be performed by, the successor and assigns of the Parties, except that
no assignment, pledge or other transfer of this Agreement by any party shall
operate to release the assignor, pledgor or transferor of any of its obligations
hereunder unless: (1) consent to the assignment is given in writing by the other
Party, such consent not to be unreasonably withheld; (2) such assignment, in
whole or in part, is to financial institutions or entities for the purpose of
financing construction and/or providing permanent debt financing of the Facility
or modification thereof, (3) Company assigns its interest in this Agreement to
an affiliate of the Company or to a transferee of all of the assets of the
Company; (4) the Generator assigns its interest in and obligations under the
Agreement to an affiliate of the Generator and such affiliate assumes all of the
Generator's obligations under this Agreement.
ARTICLE 12
APPLICABLE LAWS
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts.
ARTICLE 13
REGULATION
This Agreement is subject to all applicable state and federal laws and to
all duly promulgated orders and other authorized action of governmental
authority having jurisdiction. Nothing in this Agreement shall require the
Generator to own any asset or equipment, operate or maintain any asset or
equipment, provide any service to the Company or any other person, or take any
other action that could reasonably be expected to result in the Generator being
regulated as a public utility, electric utility, transmission company,
distribution company, or other entity subject to regulation under the Public
Utility Holding Company Act, the Federal Power Act (other than by reason of
sales for resale from the Facility), or applicable public utility regulation
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in the affected states. The Parties agree to negotiate in good faith to modify
this Agreement to prevent such regulatory impacts from occurring and/or to seek
waivers from such regulations, as necessary, and to make such modifications as
may reasonably be necessary to avoid the Generator becoming regulated as a
public utility as a result of this Agreement, other than under the Federal Power
Act by reason of sales for resale from the Facility.
ARTICLE 14
FUTURE OPERATIONS
The Generator covenants and agrees that it will at all times be
responsible for the operation and maintenance, whether performed by itself or by
others, of the Facility in compliance with all applicable provisions of any
Federal, State, or local laws, as may be supplemented or amended from time to
time.
ARTICLE 15
LIABILITY
Neither party hereto, nor its respective parents, subsidiaries,
affiliates, agents, officers, directors, employees, successors, assigns, shall
be liable, directly or indirectly, to the other or its respective parents,
subsidiaries, affiliates, agents, officers, directors, employees, successors,
assigns or customers for claims for special incidental, indirect or
consequential damages, whether based on breach of warranty (express or implied),
contract, tort or otherwise, connected with or resulting from, directly or
indirectly, performance or the failure to perform by either party of any of its
obligations under this Agreement.
ARTICLE 16
INSURANCE
16.1 Responsibility. The Generator covenants and agrees with the Company to
maintain in full force and effect throughout the term of this Agreement
the types and minimum dollar amounts of insurance coverage set forth in
16.2.
16.2 Coverage. The Generator agrees to maintain at all times the following
insurance:
(1) Workmen's compensation insurance as prescribed or permitted
by law.
(2) Employer's liability insurance with limits of not less than
one hundred thousand dollars ($100,000) per occurrence.
(3) Comprehensive general liability and property damage
insurance with limits not less than five hundred thousand
dollars ($500,000)
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per person and one million dollars ($1,000,000) per
accident for property damage.
(4) Automobile liability coverage with limits not less than
five hundred thousand dollars ($500,000) per person and one
million dollars ($1,000,000) per accident for bodily injury
(including death) and one million dollars (51.000.000)
aggregate for property damage.
(5) Umbrella liability insurance in a minimum amount of eight
million dollars ($8,000,000).
(6) All risk property and boiler and machinery insurance
against damage to owned. leased or operated property, that
is part of the Facility, on a replacement cost basis, with
self-insurance of not more than five hundred thousand
dollars ($500,000); and business interruption insurance, of
the types which a prudent developer, owner and operator of
a similar project would provide, or as may be required by a
lender The Generator shall provide a copy of all state
and/or insurance company inspection reports to the Company
within thirty (30) days of issuance.
(7) The minimum liability and amounts specified above shall be
adjusted at least as often as at three-year intervals by
the ratio of the value of the Consumer Price Index, all
categories, for the Greater Boston area as of January,
1999, to the most recent January value of such index at the
time of adjustment.
16.3 Insured. The insurance policy or policies entered into pursuant to this
Article of the Interconnection Agreement shall be endorsed naming the
Company or, at the option of the Company, a Company affiliate as an
additional insured, except to the extent of Company's negligence or
willful misconduct, with respect to any and all third party bodily injury
and/or property damage claims arising from the performance of this
Agreement and shall require ten (10) days written notice to be given to
the Company of cancellation for non-payment of premium and thirty (30)
days' written notice to be given to the Company of cancellation for any
other reason and any material change in the policy(s). The insurance
coverage described herein shall be primary to any other coverage
available to the Company and shall not be deemed to limit the Generator's
liability under this Agreement.
16.4 Certificate of Insurance. The Generator shall provide the Company with
certificates of insurance as evidence of coverage. Such certificates
shall include a statement that
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coverage will not be reduced or cancelled by the carrier without first
providing the Company at least thirty (30) days' prior written notice.
16.5 Company Insurance. The Company agrees to maintain at all times insurance
with respect to the Interconnection Facilities substantially comparable
to the insurance described in 16.2, provided, however, that the Company
shall not be obligated to maintain any business interruption insurance.
ARTICLE 17
NEED FOR ADDITIONAL INTERCONNECTION FACILITIES
At some future time, the Generator may modify or add additional
generation capacity to the units specified in this Agreement or may add new-
generation to the Facility. This may require the Company to design, engineer and
construct additional transmission facilities. In the event of such occurrence, a
separately executed agreement between the Company and the Generator shall be
developed to detail the terms and conditions of interconnected operations of the
additional transmission facilities. Such additional Interconnection Facilities
will be constructed in a manner consistent with Company, NEPOOL, ISO-NE and FERC
requirements.
ARTICLE 18
NO DEDICATION OF FACILITIES
No undertaking by the Company or the Generator shall be deemed to
constitute a dedication of its system, or any portion thereof, to the public or
the requirements of the other Party, and all undertakings of each Party
hereunder with respect to the other shall cease upon the termination of this
Agreement. Subject to Article 1.1 of this Agreement, the Generator shall have
the right to alter the generation output or capability of generation, including
the decommissioning, mothballing, retirement, expansion, repowering or other
development of generation.
ARTICLE 19
SAFETY STATEMENT
It is the Generator's responsibility to assure that all work performed
under this Agreement by other than the Company's personnel or personnel under
the Company's supervision, reasonably complies with Company safety rules in
addition to all applicable municipal, state, OSHA, and other federal
regulations. The Company shall furnish its safety rules to the Generator.
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ARTICLE 20
ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the Parties
regarding the Interconnection Facilities and supersedes all previous agreements,
discussions, communications and correspondence regarding such Interconnection
Facilities.
ARTICLE 21
NOTICES AND BILLS
All notices hereunder. in which the manner of delivery is not otherwise
specified. shall be sent by U.S. mail postage prepaid or shall be hand
delivered. Notices and other communications by the Company to the Generator
shall be addressed to:
NRG Energy, Inc.
1221 Nicollet Mall
Minneapolis, MN 55403-2445
Attention: Craig Mataczynski, President, NRG North America
Facsimile: 612-373-5430
With a copy to:
James Bender, General Counsel
Facsimile: 612-373-5392
Notices and other communications by the Generator to the Company shall be
addressed to:
Director of Transmission Services
EUA Service Corporation
750 West Center Street
West Bridgewater, MA 02379
All payments to the Company shall be sent to:
EUA Service Corporation
Accounts Receivable Department
750 West Center Street
West Bridgewater, MA 02379
Either party may change the address to which bills or notices are to be
sent by written notice to the other party.
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Witness the name of the Parties hereto affixed by their respective
officers as of the date first written above. Executed in duplicate.
MONTAUP ELECTRIC COMPANY
By: /s/ Kevin A. Kirby Date: October 13, 1998
------------------------------- ----------------------------
Name: Kevin A. Kirby
Title: Vice President
NRG ENERGY, INC.
By: /s/ Craig Mataczynski Date: October 13, 1998
------------------------------- ----------------------------
Name: Craig Mataczynski
Title: President, NRG North America
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FIRST AMENDMENT
TO INTERCONNECTION AGREEMENT BETWEEN
MONTAUP ELECTRIC COMPANY AND
SOMERSET POWER, LLC
WHEREAS, Montaup Electric Company, a Massachusetts corporation
(hereinafter "the Company") and Somerset Power, LLC, a Delaware corporation
(hereinafter "the Generator"), have entered into an Interconnection Agreement
dated as of October 13, 1998 ("the Agreement"); and
WHEREAS, the Agreement establishes the Requirements, terms and conditions
for the interconnection of the Generator's facilities with the transmission
system of the Company; and
WHEREAS, the Company and the Generator desire to amend the agreement to
allow the Generator to be responsible for testing and maintaining the metering
equipment.
NOW, THEREFORE, the Company and the Generator agree as follows:
1. Section 2.1 is amended by deleting "Company" in the second
sentence and inserting "Generator".
2. Section 2.1.1 is amended by deleting "Company" in the first
sentence and inserting "Generator" and further deleting the second
and third sentences.
3. Section 2.1.3 is deleted and the following Section 2.1.3 is added:
2.1.3 The Generator shall also conduct testing, other than
routine maintenance testing, upon the reasonable request,
and in the presence of, a representative of the Company.
The Generator shall maintain an accurate log or record of
all such meter testing. If the metering equipment is found
in any such test to be inaccurate, it shall be made
accurate, and if it is found to be inaccurate by more than
two percent (2%) up or down, the meter readings for the
period of inaccuracy shall be adjusted to correct
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such inaccuracies as far as the same can be reasonably
ascertained and such adjusted readings shall be reported to
the Company by the Generator. If the period of inaccuracy
cannot be ascertained such period will be deemed to have
encompassed one-half of the time period since the last test
of the meter. The cost of any testing performed in
accordance with this paragraph shall be borne by the
Company, if the results of the tests conducted by the
Generator prove the metering equipment to be inaccurate by
less than two percent (2%) up or down, and otherwise by the
Generator.
4. Article 19 is amended by deleting "reasonably" and "Company safety
rules in addition to" in the first sentence, and further deleting
the second sentence.
5. Appendix A I. is amended by adding "14. Metering and associated
equipment" -
6. Appendix A II. is amended by deleting "Metering and associated
equipment" and inserting "None at this time."
IN WITNESS WHEREOF, the Company and the Generator have executed this First
Amendment as of the 26th day of April 1999.
Montaup Electric Company Somerset Power, LLC
By: /s/ Kevin A. Kirby By: /s/ Mark D. Anderson
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Its: Vice President Its: Authorized Representative
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