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Exhibit 10.3
POWER SALES AND AGENCY AGREEMENT
THIS POWER SALES AND AGENCY AGREEMENT (this "Agreement") is entered into
as of this 24th day of March, 2000 by and between NRG Power Marketing Inc., a
Delaware corporation ("Power Marketing") and Louisiana Generating LLC, a
Delaware limited liability company (the "Owner") (each individually a "Party,"
or collectively the "Parties").
RECITALS
WHEREAS, Owner is a party to a Fifth Amended and Restated Asset Purchase
and Reorganization Agreement (the "Asset Sale Agreement") dated September 21,
1999, with Ralph R. Mabey, as Chapter 11 Trustee of Cajun Electric Power
Cooperative, Inc. ("Cajun"), pursuant to which Owner is to acquire two electric
generation facilities (commonly referred to as "Big Cajun I" and "Big Cajun
II"), with a total generating capacity of approximately 1700 MWs, located in New
Roads, Louisiana, along with certain other specified assets; and
WHEREAS, upon the closing of the Cajun acquisition pursuant to the Asset
Sale Agreement, Owner will (i) enter into certain forms of power supply
agreements with the eleven former Cajun electricity membership cooperatives, and
(ii) assume Cajun's power supply obligations under two long-term power sales
agreements with Southwestern Electric Power Company, one agreement with South
Mississippi Electric Power Association, and one agreement with Municipal Energy
Agency of Mississippi (hereinafter, all agreements in this recital are referred
to as the "Power Supply Contracts"); and
WHEREAS, Owner wishes to retain the services of Power Marketing as its
agent, to (i) manage, market and sell its Excess Station Power (including any
Deficit Station Power necessary to meet the obligations of Owner under the Power
Supply Contracts), (ii) manage, procure and provide, as the case may be, the
requirements of Owner for Fuel, and (iii) market, sell and purchase, as the case
may be, the Emission Credits generated by or necessary for the conduct of the
business of Owner; and
WHEREAS, Power Marketing desires to (i) manage, market and sell all of
Owner's Excess Station Power (including any Deficit Station Power necessary to
meet the obligations of Owner under the Power Supply Contracts), (ii) manage,
procure and provide Owner's requirements for Fuel, and (iii) market, sell and
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purchase, as the case may be, the Emission Credits generated in or necessary for
the conduct of Owner's business.
NOW THEREFORE, in consideration of the premises and the covenants,
conditions, and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement with initial capitalization, the following
terms shall have the meanings specified or referred to in this Article I.
"Affiliate" means, with respect to any person or entity, (i) each entity that
such person or entity Controls, (ii) each person or entity that Controls such
person or entity, and (iii) each entity that is under common Control with such
person or entity.
"Agreement" shall have the meaning provided in the introductory paragraph
hereof.
"All-in Fuel Cost" means, for any period, the actual cost incurred, on a
first-in-first-out basis, by Power Marketing for Fuel supplied by Power
Marketing to the Owner during such period, including the spot or contract price
paid therefor by Power Marketing, all costs of transportation and delivery of
such Fuel, and all taxes paid or payable by Power Marketing in association
therewith.
"Ancillary Services" means any or all of the following: (i) 10 minute spinning
reserve, (ii) 10 minute non-spinning reserve, (iii) operating reserves, (iv)
automatic generation control, (v) voltage support, and (vi) black start
services.
"Big Cajun I" means Big Cajun I, Units 1 and 2, both of which are 110 MW natural
gas-fired electric generating facilities located in New Roads, Louisiana.
"Big Cajun II" means Big Cajun II, Units 1 and 2, which are 575 MW coal-fired
electric generating units, and Big Cajun II, Unit 3, which is a 575 MW
coal-fired electric generating unit of which Owner owns a 58% undivided
interest. Big Cajun II is located in New Roads, Louisiana.
"Business Day" means any day other than a Saturday, a Sunday, or a holiday on
which national banking associations in Minnesota or New York are not open for
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business. A Business Day shall begin at 8:00 a.m. and end at 5:00 p.m. Eastern
Standard (or Daylight) time.
"Capacity" means the aggregate installed generating capability of all of the
Units located at the Station, measured in megawatts ("MW") or kilowatts ("KW").
"Coal Supply Agreement" means that certain Coal Supply Agreement between Triton
Coal Company and Owner dated August 1, 1997.
"Control" means the possession, directly or indirectly, through one or more
intermediaries, of (i) in the case of a corporation, a majority of the
outstanding voting securities thereof; (ii) in the case of a limited liability
company, partnership, limited partnership or venture, the right to more than 50%
of the distributions therefrom (including liquidating distributions); (iii) in
the case of a trust or estate, including a business trust, a majority of the
beneficial interest therein; and (iv) in the case of any other entity, a
majority of the economic or beneficial interest therein.
"Deficit Station Power" means any Power that is required to fulfill Owner's
contractual supply obligations under the Power Supply Contracts, at any point,
that cannot otherwise be generated or supplied by generation assets owned,
leased or controlled by Owner.
"Delivery Point" means the point at which the Station is connected to Entergy
Corporation, Central Louisiana Electric Company ("CLECO"), or Southwestern
Electric Power Company ("SWEPCO") transmission systems as indicated in the
respective Interconnection Agreement or such other delivery point as Power
Marketing shall designate.
"Dispatch" means setting the level of Power output of the Station.
"Emissions Credits" means credits, in units established by applicable regulatory
authorities, resulting from the reduction of air pollutants (including NOx and
SO(2)) from an emitting source or facility, that have been certified by the
applicable regulatory authority.
"Energy" means electric energy, measured in megawatt hours ("MWh") or kilowatt
hours ("KWh"), generated and deliverable by Owner.
"Excess Station Power" means the difference between (i) the sum of Station Power
plus all Power Purchases, and (ii) the Power sold pursuant to the Power Supply
Contracts.
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"Force Majeure" means an event which (i) is not within the reasonable control of
the Party claiming Force Majeure (the "Claiming Party"), (ii) was not caused by
the acts, omissions or delays of the Claiming Party or any person over whom the
Claiming Party has control, (iii) is not an act, event or condition the risks or
consequences of which the Claiming Party has expressly agreed to assume pursuant
to this Agreement, and (iv) by the prompt exercise of due diligence, the
Claiming Party is unable to overcome or avoid or cause to be avoided. Subject to
the foregoing, Force Majeure includes, but is not restricted to acts of God,
fire, civil disturbance, labor dispute, labor or material shortage, sabotage, or
action or restraint by court order of any public or governmental authority (so
long as the Claiming Party has not applied for or assisted in the application
for, and has opposed where and to the extent reasonable, such government
action).
"Fuel" means the natural gas required to operate Big Cajun I.
"Governmental Entity" means the government of the United States, or any
political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Interconnection Agreement" means any or all of the following: (i) an Electric
System Interconnection Agreement effective as of January 1, 1991 by and between
CLECO and Cajun; (ii) an Electric System Interconnection Agreement dated as of
January 1, 1998 by and between SWEPCO and Cajun; (iii) an As-Available Energy
Transmission Service Agreement dated as of May 31, 1989 by and between SWEPCO
and Cajun; (iv) a Network Integration Transmission Service Agreement dated as of
January 1, 1998 (as revised March 25, 1999) by and between Entergy Services,
Inc. ("ESI") and Cajun; (v) a Network Operating Agreement, dated as of January
1, 1998 by and between ESI and Cajun; (vi) a Non-Firm Point-to-Point
Transmission Service Agreement dated as of January 1, 1998 by and between ESI
and Cajun; (vii) a Firm Point-to-Point Transmission Service Agreement dated as
of January 1, 1998 by and between ESI and Cajun; and (viii) any replacement or
new Agreements negotiated by Owner relating to the transmission of electricity
from a Station.
"Interest Rate" means, for any date, the interest equal to the "Prime Rate" as
may be published on the first Business Day of the applicable calendar month in
The Wall Street Journal under "Money Rates."
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"Net Power Revenue" means, for any period, the gross receipts during such period
from sales by Power Marketing of Excess Station Power, reduced by (i) the cost
of any Power Purchases, (ii) the amount of any transmission or other costs
incurred by Power Marketing during such period in delivering Excess Station
Power to the point of sale, (iii) the amount of any state or federal Taxes paid
or required to be paid by Power Marketing with respect to the sale of Excess
Station Power or otherwise with respect to the performance of its obligations
hereunder, and (iv) the amount of any other costs paid by Power Marketing during
such period in connection with the sale of Excess Station Power, including an
arms-length, commercially reasonable allocation of overhead and administrative
expense.
"Net Power Cost" means, for any period, the cost during such period of purchases
by Power Marketing of Deficit Station Power, increased by (i) the amount of any
transmission or other costs incurred by Power Marketing during such period in
delivering Deficit Station Power to the point of sale, (ii) the amount of any
state or federal Taxes paid or required to be paid by Power Marketing with
respect to the purchase of Deficit Station Power or otherwise with respect to
the performance of its obligations hereunder, and (iii) the amount of any other
costs paid by Power Marketing during such period in connection with the purchase
of Deficit Station Power, including an arms-length, commercially reasonable
allocation of overhead and administrative expense.
"Power" means Capacity, Energy or Ancillary Services or any combination thereof,
as the case may be.
"Power Purchases" means any Power purchased by Power Marketing on behalf of
Owner.
"Power Supply Contracts" shall have the meaning provided in the second recital
hereof.
"Prudent Independent Power Industry Practice" means any of the practices,
methods and acts engaged in or approved by a significant portion of the
independent power industry during the relevant time period, or any of the
practices, methods and acts which, in the exercise of reasonable judgment in
light of the facts known at the time the decision was made, could have been
expected to accomplish the desired result at the lowest reasonable cost
consistent with good business practices, reliability, safety and expedition.
Prudent Independent Power Industry Practice is not intended to be limited to the
optimum practice, method or act to the exclusion of all others, but rather to be
practices, methods or acts generally accepted in the region and consistently
adhered to by Owner. Prudent Independent Power Industry Practices
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shall include, but not be limited to North American Electric Reliability Council
("NERC") Criteria & Guidelines, Southwest Power Coordinating Council ("SPCC")
Criteria & Guidelines, as they may be amended from time to time, including the
rules, guidelines and criteria of any successor organization to the foregoing
entities.
"Station" means the generating facilities acquired by Owner.
"Station Power" means the aggregate total Power generated by the Station from
time to time.
"Taxes" means any tax, charge, impost, tariff, duty or fee of any kind charged,
imposed or levied, directly or indirectly, by any Governmental Entity, including
any value-added tax, sales tax, stamp duty, gross receipts tax, property tax,
registration fee or license, but excluding any tax on income.
"Transportation Contract" means that certain Coal Transportation Agreement
between The Burlington Northern and Santa Fe Railway Company, American
Commercial Marine Service and Owner dated January 22, 1997.
"Unit" means each of the operating electricity generating units located at the
Station.
ARTICLE II
TRANSACTIONS AND SERVICES
2.1 Power Transactions.
(a) Right to Excess Station Power. Power Marketing shall have the
exclusive right, as agent for Owner, to sell or trade all of the Excess Station
Power.
(b) Right to Transact Power Purchases. Power Marketing shall have the
exclusive right, as agent for Owner, to buy or trade all Power Purchases.
(c) Delivery of Excess Station Power. Owner shall use all commercially
reasonable efforts, in accordance with Prudent Independent Power Industry
Practice, to deliver any Excess Station Power sold by Power Marketing to the
contractually designated Delivery Point, in accordance with instruction received
from Power Marketing.
(d) Purchase or Sale of Ancillary Services. Power Marketing shall have the
exclusive right, as agent for Owner, to purchase, sell, or trade all Ancillary
Services.
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Power Marketing, in its sole discretion, may fulfill any Ancillary Service
obligation either through (i) the use of Big Cajun I or Big Cajun II or any
other generating facility that will be owned by NRG South Central Generating LLC
("NRG South Central") or an Additional Guarantor, or (ii) acquisition from a
third party provider.
(e) Dispatch. Power Marketing shall have the exclusive right and the
obligation to effect the Dispatch of the Station. Power Marketing shall effect
such Dispatch, as agent for Owner, through bilateral contracts and the Power
Supply Contracts, and such Dispatch shall be subject to the physical limitations
of the Station as Owner may advise Power Marketing from time to time.
(f) Other Power Sales Agreements. Power Marketing shall assist Owner in
performing all of its obligations under the Power Supply Contacts and any other
power sale agreements to which it may be a party.
(g) Metering. For the purposes of determining quantities of Power
delivered, metering shall be determined based upon the Delivery Points of the
relevant Interconnection Agreements.
(h) Auxiliary Power. Power Marketing shall be responsible for negotiating
agreements for the provision of Power to the Station for auxiliary load and
Station start-up as required to support the Dispatch schedule.
2.2 Fuel Requirements.
(a) Big Cajun I. Power Marketing shall procure for Owner all Fuel at such
time and in such amounts as are necessary to satisfy all Fuel requirements of
Big Cajun I. Owner shall notify Power Marketing on a regular basis, sufficiently
in advance of the need therefore, of the anticipated Fuel requirements. All Fuel
shall be contracted for by Power Marketing as agent for Owner.
(b) Big Cajun II. Power Marketing shall provide oversight and advice to
Owner on an "as requested" basis regarding the Coal Supply Agreement and the
Transportation Contract. In addition, at the request of Owner, Power Marketing
will assist in the procurement of new or additional coal supply or
transportation arrangements, should circumstances necessitate such assistance.
2.3 Emissions Credits.
(a) Big Cajun I. Owner shall make available and transfer to Power
Marketing, as its exclusive agent, all Emissions Credits owned, earned or
acquired
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by Owner that are in excess of the amount of Emission Credits required to
operate Big Cajun I at its scheduled capacity. Power Marketing shall procure for
Owner all Emissions Credits, in excess of those generated by Owner, that are
required by Owner to operate Big Cajun I at its scheduled capacity.
(b) Big Cajun II. Pursuant to the terms of Owner's Coal Supply Agreement
for Big Cajun II, the coal supplier is obligated to procure SO(2) allowances for
the first 5 years of the contract (the "Initial Term") to the extent Owner's
SO(2) emissions from Big Cajun II exceed 43,804 tons per calendar year. If,
however, SO(2) emissions are less than 43,804 tons in any calendar year during
the Initial Term, then Owner must convey to the coal supplier two-thirds the
number of allowances less than 43,804 ton allotment. During the Initial Term,
Power Marketing shall assume all responsibilities of Owner under the Coal Supply
Agreement regarding SO(2) emission for the benefit of Owner. To the extent
available, Power Marketing shall use commercially reasonable efforts to maximize
the value of any excess SO(2) allowances available to Owner under the Coal
Supply Agreement. The responsibilities of Power Marketing regarding SO(2)
emission allowances upon completion of the Initial Term shall be agreed upon by
Power Marketing and Owner on or before three (3) months prior to completion of
the Initial Term. With respect to Emissions Credits (other than SO(2)), the
obligations of Power Marketing regarding Big Cajun II shall be the same as the
obligations set forth in Section 2.3(a) applicable to Big Cajun I.
2.4 Load Management; Risk Management and Hedging.
(a) Load Management. Power Marketing shall assist Owner in fulfilling
Owner's load management obligations set forth in the Power Supply Contracts.
Power Marketing shall assume primary responsibility for these obligations. Owner
shall notify Power Marketing of any pending material changes in Owner's load in
a timely manner.
(b) Risk Management and Hedging. Power Marketing shall implement
appropriate risk management practices and develop a hedging strategy for the
benefit of Owner, subject to the provisions of Section 7.1 of this Agreement.
ARTICLE III
PAYMENTS
3.1 Payments for Excess Station Power. Power Marketing shall pay to Owner for
the amount of the Excess Station Power provided by Owner to Power Marketing the
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Net Power Revenue from the sales by Power Marketing of such power. By no later
than the twenty-fifth (25th) day of each calendar month, Power Marketing shall
deliver an estimated statement, together with the estimated payment required
pursuant to such statement, to Owner setting forth, separately with respect to
Capacity, Energy and Ancillary Services, the estimated Excess Station Power
provided by Owner pursuant to Dispatch effected by Power Marketing during the
preceding calendar month and the total amount due to Owner from Power Marketing
with respect thereto, together with any applicable supporting documentation. As
soon as possible with respect to each calendar month, and in any case no later
than ten (10) Business Days after final reconciliation of such calendar month,
Power Marketing shall deliver a true-up statement to Owner with respect to such
calendar month, which statement shall set forth, separately with respect to
Capacity, Energy and Ancillary Services, the actual Excess Station Power
provided by Owner pursuant to Dispatch effected by Power Marketing. If such
true-up statement reveals a shortfall in payment by Power Marketing with respect
to such payment, then such true-up statement shall be accompanied by payment for
such shortfall, together with interest at the Interest Rate from the date
originally due (i.e., the twenty-fifth (25th) day of the month following the
calendar month in which such Power was provided or generated by Owner) until
paid in full. If such true-up statement reveals an overpayment by Power
Marketing with respect to such payment, then Owner shall refund such overpayment
to Power Marketing no later than ten (10) Business Days following the delivery
of such true-up statement, together with interest at the Interest Rate from the
date such overpayment was originally made until repaid in full.
3.2 Payments for Deficit Station Power. Owner shall pay to Power Marketing for
the amount of the Deficit Station Power provided by Power Marketing to Owner the
Net Power Cost from the purchase by Power Marketing of such power. By no later
than the twenty-fifth (25th) day of each calendar month, Power Marketing shall
deliver an estimated statement, together with the estimated payment required
pursuant to such statement, to Owner setting forth, separately with respect to
Capacity, Energy and Ancillary Services, the estimated Deficit Station Power
procured by Power Marketing during the preceding calendar month and the total
amount due to Power Marketing from Owner with respect thereto, together with any
applicable supporting documentation. As soon as possible with respect to each
calendar month, and in any case no later than ten (10) Business Days after final
reconciliation of such calendar month, Power Marketing shall deliver a true-up
statement to Owner with respect to such calendar month, which statement shall
set forth, separately with respect to Capacity, Energy and Ancillary Services,
the actual Deficit Station Power provided by Power Marketing. If such true-up
statement reveals a shortfall in payment by Owner with respect to such payment,
then such true-up statement shall be accompanied by payment for such shortfall,
together with interest at the Interest Rate
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from the date originally due (i.e., the twenty-fifth (25th) day of the month
following the calendar month in which such Power was provided to Owner) until
paid in full. If such true-up statement reveals an overpayment by Owner with
respect to such payment, then Power Marketing shall refund such overpayment to
Power Marketing no later than ten (10) Business Days following the delivery of
such true-up statement, together with interest at the Interest Rate from the
date such overpayment was originally made until repaid in full.
3.3 Payments for Fuel. Power Marketing will use commercially reasonable efforts
to have all Fuel invoiced directly to Owner for payment. In the event Owner is
not invoiced directly by the Fuel supplier, Owner shall pay to Power Marketing
the All-in Fuel Cost for the Fuel procured by Power Marketing. Power Marketing
shall deliver to Owner on or before the fifteenth (15th) day of each month a
statement of the All-in Fuel Cost for Fuel supplied in the previous month that
was not invoiced directly to Owner, together with all applicable supporting
documentation. Owner shall pay to Power Marketing the amount of each such
statement on or before the last day of the month in which such statement is
delivered.
3.4 Payments for Emissions Credits. Power Marketing shall deliver to Owner on or
before the fifteenth (15th) day of each month a statement with respect to any
Emissions Credits sold or purchased by Power Marketing in the previous month,
together with any applicable supporting documentation. Power Marketing shall
remit to Owner with any such statement with respect to Emissions Credits sold by
Power Marketing for Owner the full amount then due. Owner shall pay to Power
Marketing the amount of each such statement with respect to any Emissions
Credits purchased by Power Marketing for the benefit of Owner on or before the
last day of the month in which such statement is delivered.
3.5 Fuel and Emission Credit Compensation. In consideration for the services
rendered by Power Marketing pursuant to Sections 2.2 and 2.3, Owner shall pay to
Power Marketing an amount equal to the number of manhours expended by
appropriate personnel of Power Marketing for services rendered (rounded to the
nearest quarter of an hour), multiplied by the hourly rates set forth on Exhibit
A (which rates each shall escalate on the first day of each calendar year during
the term hereof by an amount which is 3% of the rate applicable during the prior
calendar year). Power Marketing shall prepare and submit to Owner on a monthly
basis invoices covering the fees to which Power Marketing is entitled under this
Section 3.5.
3.6 Load and Risk Management Services Compensation. In consideration for the
services rendered by Power Marketing pursuant to Section 2.4, Owner shall pay to
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Power Marketing an amount equal to the number of manhours expended by
appropriate personnel of Power Marketing for services rendered (rounded to the
nearest quarter of an hour), multiplied by the hourly rates set forth on Exhibit
A (which rates each shall escalate on the first day of each calendar year during
the term hereof by an amount which is 3% of the rate applicable during the prior
calendar year). Power Marketing shall prepare and submit to Owner on a monthly
basis invoices covering the fees to which Power Marketing is entitled under this
Section 3.6.
3.7 Overdue Payments; Defaults. If any Party shall fail to make any payment
(including any estimated payment) when due, such overdue payment shall accrue
interest at the Interest Rate plus 2% from the due date to the date of payment.
In addition, if Power Marketing is the defaulting Party with respect to payments
for Excess Station Power and continues to default with respect to any payment
for thirty (30) days after notice of such default by Owner, then Owner may (i)
terminate this Agreement, or (ii) take any other such actions as are available
to it an law or equity with respect to such default. During the exercise of any
remedy, Power Marketing shall continue to be obligated to pay Owner for all
Excess Station Power not otherwise sold by Owner. In addition, Power Marketing
shall remain obligated to pay Owner for all Excess Station Power generated by
Owner pursuant to Dispatch effected by Power Marketing. Owner may exercise any
one or more of such remedies, and no such exercise shall limit Owner's rights to
exercise any other remedy.
3.8 Billing Dispute. If either Party, in good faith, disputes a statement, the
disputing Party shall immediately notify the other Party of the basis for the
dispute; provided, however, that no adjustment for any invoice or payment will
be made unless objection to the accuracy thereof was made prior to the lapse of
one (1) year from the date such amount was paid. The disputing Party shall pay
the undisputed portion of such statement no later than the due date. If any
amount withheld under dispute is ultimately determined to be due to the other
Party, it shall be paid within five (5) Business Days of such determination
along with interest accrued at the Interest Rate from the date originally due
until the date paid. Inadvertent overpayments shall be returned by Party
overpaid upon request or deducted by such Party from subsequent payments, with
interest accrued at the Interest Rate from the date originally paid until the
date paid or deducted.
ARTICLE IV
PERFORMANCE EXCUSED
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4.1 Force Majeure. If either Party is rendered unable by an event of Force
Majeure to carry out, in whole or part, its obligations under this Agreement,
then, for only the pendency of such Force Majeure, the Party affected by the
event shall be temporarily relieved of its obligations hereunder to deliver
Power insofar as they are affected by Force Majeure but for no longer period;
provided, however, that such Party shall not be relieved of its obligation to
make payments then due or becoming due with respect to performance which
occurred prior to the event. The Party affected by an event of Force Majeure
shall provide the other Party with written notice setting forth the full details
thereof within two (2) Business Days after the occurrence of such event and
shall take all reasonable measures to mitigate or minimize the effects of such
event of Force Majeure.
4.2 Scheduled Outages. Owner shall notify Power Marketing of any scheduled
outage of any Unit. During the period of such scheduled outage and any
additional time reasonably required to complete the work for which such outage
was scheduled, Owner shall be relieved of its obligations hereunder to deliver
Power from such Unit.
ARTICLE V
TITLE, RISK OF LOSS AND INDEMNIFICATION
5.1 Title and Risk of Loss. Title to and risk of loss related to Excess Station
Power sold by Power Marketing hereunder shall remain with Owner until delivery
to the Delivery Point. Owner warrants that it will deliver to Power Marketing
the Excess Station Power free and clear of all liens, claims and encumbrances
arising prior to the Delivery Point. Title to and risk of loss related to
Deficit Station Power procured by Power Marketing shall transfer from seller to
Owner at the Delivery Point.
5.2 Indemnity. Each Party shall indemnify, defend and hold harmless the other
party from any Claims arising from any act or incident occurring during the
period when control and title to Power is vested, as between the Parties as
provided in Section 5.1, in the indemnifying Party. "Claims" means all claims or
actions, threatened or filed and, whether groundless, false or fraudulent, that
directly or indirectly relate to the subject matter of an indemnity, and the
resulting losses, damages, expenses, attorneys' fees and court costs, whether
incurred by settlement or otherwise, and whether such claims or actions are
threatened or filed prior to or after the termination of this Agreement.
5.3 Duty to Mitigate. Each Party agrees that it has a duty to mitigate damages
and covenants that it will use commercially reasonable efforts to minimize any
damages it
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may incur as a result of the other Party's performance or non-performance of
this Agreement.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS
6.1 Representations and Warranties. Each Party hereby represents and warrants to
the other Party that the following statements are true and correct as of the
date hereof and shall be true and correct at all times that such Party is a
Party hereto:
(a) It is duly formed, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation or formation; to the extent
required by applicable law, it is duly qualified and in good standing in the
jurisdiction of its principal place of business, if different from its
jurisdiction of incorporation or formation; and it has full power and authority
to execute and deliver this Agreement and to perform its obligations hereunder
and thereunder, and all necessary actions by the officers, managers, members or
other applicable persons necessary for the due authorization, execution,
delivery, and performance of this Agreement by it have been duly taken.
(b) It has duly executed and delivered this Agreement and the other
documents contemplated herein, and each constitutes a legal, valid and binding
obligation of such Party enforceable against it in accordance with the terms of
such document (except as may be limited by bankruptcy, insolvency or similar
laws of general application and by the effect of general principles of equity,
regardless of whether considered at law or in equity).
(c) Its authorization, execution, delivery, and performance of this
Agreement does not and will not (i) conflict with, or result in a breach,
default or violation of, (A) its organizational documents, (B) any contract or
agreement to which it is a party or is otherwise subject, or (C) any law, order,
judgment, decree, writ, injunction or arbitral award to which it or any of its
properties is subject; or (ii) require any consent, approval or authorization
from, filing or registration with, or notice to, any governmental authority
(including any approvals required by the Federal Energy Regulatory Commission)
or other person, unless such requirement has already been satisfied.
(d) It has obtained all governmental approvals (including all approvals,
authorizations or waivers from the Federal Energy Regulatory Commission)
necessary to perform its obligations hereunder.
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(e) It is not a party to any litigation the outcome of which could
reasonably be expected to adversely affect its ability to perform its
obligations hereunder or to have a material adverse effect on its properties,
business or financial condition.
6.2 Covenants. The Parties hereby covenant and agree as follows:
(a) Each Party will timely acquire and maintain all permits, licenses,
waivers and approvals (including approval to operate as an exempt wholesale
generator) required by any state or federal regulatory authority in order for it
to perform its obligations hereunder.
(b) Each Party will at all times abide by all laws, rules and regulations
of any state or federal governmental authority applicable to the conduct of such
Party or the performance of its obligations hereunder.
(c) Power Marketing will not sell Power to any of its Affiliates except in
conformity with the laws, rules and regulations of any Governmental Entity
applicable to such transactions.
ARTICLE VII
MISCELLANEOUS
7.1 Owner Risk Oversight. Owner shall have the right to influence the strategy
of Power Marketing with respect to (i) the purchase and sale of Energy,
Capacity, and Ancillary Services, and (ii) the overall level of risk to be
undertaken by Power Marketing on behalf of Owner. At the request of Owner, Power
Marketing shall make available for review all relevant records and documentation
supporting transactions entered into by Power Marketing on behalf of Owner.
7.2 Term of Agreement. The Term of this Agreement will begin on the date of this
Agreement and will end on December 31, 2030.
7.3 Governing Law and Jurisdiction. This Agreement and the rights and duties of
the Parties hereunder shall be governed by and construed, enforced and performed
in accordance with the laws of the State of New York without regard to any
conflict of law rules thereof (other than Section 5-1401 of the New York General
Obligations Law). Any lawsuits arising under this Agreement shall be instituted
in the federal or state courts of New York located in New York County, and each
party hereby irrevocably submits to the in personam jurisdiction of such courts.
EACH PARTY
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HEREIN WAIVES ITS RESPECTIVE RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
LITIGATION ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT.
7.4 Assignment. Neither Party shall assign this Agreement or its rights
hereunder without the prior written consent of the other Party, provided,
however, either Party may, without the consent of the other Party (and without
relieving itself from liability hereunder), (i) transfer, sell, pledge, encumber
or assign this Agreement or the accounts, revenues or proceeds hereof in
connection with any financing or other financial arrangements by or for the
benefit of Owner or NRG South Central, (ii) transfer or assign this Agreement to
an Affiliate of such Party if such Affiliate's creditworthiness and technical
ability to perform hereunder is not materially different than that of such
Party, (iii) transfer or assign this Agreement to any person or entity
succeeding to all or substantially all of the assets of such Party, or (iv) in
the case of Owner, transfer or assign this Agreement to any person or entity
acquiring the Station; provided, however, that in each such case, any such
assignee (other than an assignee in a transaction referred to in clause (i)
above) shall agree in writing to be bound by the terms and conditions hereof and
such assignee's creditworthiness and technical ability to perform hereunder
shall not be materially different than that of such Party.
7.5 Notices.
If to Power Marketing:
NOTICES AND CORRESPONDENCE:
NRG Power Marketing Inc.
1221 Nicollet Mall
Minneapolis, MN 55403
Attn: Audrey Zibelman
Phone: (612) 373-5300
Fax: (612) 373-5430
INVOICES:
NRG Power Marketing Inc.
1221 Nicollet Mall
Minneapolis, MN 55403
Attn: Christine Harrell
Phone: (612) 373-5300
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Fax: (612) 373-5430
PAYMENTS BY WIRE:
Bank: LaSalle National Bank
Address: Chicago, IL
ABA: 071 000 505
Account: NRG Power Marketing LLC
Acct. No.:
If to Owner:
NOTICES & CORRESPONDENCE:
Louisiana Generating LLC
P.O. Box 15540
Baton Rouge, LA 70895
Attn: Alan Williams
Phone: (225) 291-3060
Fax: (225) 296-1746
INVOICES:
Louisiana Generating LLC
P.O. Box 15540
Baton Rouge, LA 70895
Attn: Michael Manning
Phone: (225) 291-3060
Fax: (225) 296-1746
PAYMENTS BY WIRE:
Bank:
Address:
ABA:
Account:
Acct. No.:
7.6 General. No amendment or modification to this Agreement shall be enforceable
unless reduced to writing and executed by both Parties. This Agreement shall not
impact any rights enforceable by any third party (other than a permitted
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successor or assignee bound to this Agreement). No waiver by a Party of any
default by the other Party shall be construed as a waiver of any other default.
Any provision declared or rendered unlawful by any applicable court of law or
regulatory agency or deemed unlawful because of a change in law will not
otherwise affect the remaining lawful obligations that arise under this
Agreement. The headings used herein are for convenience and reference purposes
only. All indemnity and audit rights hereunder shall survive the termination of
this Agreement for six (6) years. For any period over which interest shall
accrue, interest shall accrue on the first day of such period, but shall not
accrue on the last day thereof.
7.7 Confidential Information. During the Term of this Agreement and for three
(3) years thereafter, neither Party shall divulge, furnish or make accessible to
anyone or use in any way any confidential or secret information of the other
Party which it has acquired or become acquainted with in the performance of its
obligations under this Agreement. Each Party acknowledges that the
above-described information constitutes a unique and valuable asset of the Party
seeking such confidential treatment, and that any disclosure or other use of
such knowledge other than for the sole benefit of such other Party would be
wrongful and would cause it irreparable harm. Both during and after the term of
this Agreement, each Party will refrain from any acts or omissions that would
reduce the value of such knowledge or information to such other Party. The
foregoing obligations of confidentiality, however, shall not apply to any
knowledge or information which (i) is now published or which subsequently
becomes generally publicly known in the form in which it was obtained from the
Party seeking such confidential treatment, other than as a direct or indirect
result of the breach of this Agreement, (ii) is disclosed to any regulatory
authority having jurisdiction over the disclosing party, (iii) is disclosed as
required by law or pursuant to legal process, or (iv) is disclosed to a lending
institution (or any agent or trustee thereof) in connection with any financing
for the benefit of Owner or NRG South Central subject to the terms of a
confidentiality agreement having provisions substantially similar to this
Agreement.
7.8 Renegotiation of Commercial Terms. The Parties acknowledge that the
commercial terms of this Agreement reflect the Affiliate relationship that
exists between Owner and Power Marketing. In the event that any portion of
Owner, its parent, NRG South Central, or NRG South Central's members (NRG
Central U.S. LLC or South Central Generation Holding LLC) is sold, transferred
or conveyed to a non-Affiliate, Owner and Power Marketing agree to renegotiate
the commercial terms of this Agreement to reflect an arms-length commercial
arrangement.
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IN WITNESS WHEREOF, the parties have executed this Power Sales and Agency
Agreement in multiple counterparts to be construed as one as of the date first
set forth above.
NRG POWER MARKETING INC.
By: /s/ Craig A. Mataczynski
------------------------------------
Name: Craig A. Mataczynski
Title: President
LOUISIANA GENERATING LLC
By: /s/ Craig A. Mataczynski
------------------------------------
Name: Craig A. Mataczynski
Title: Vice President
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ANNEX A
NRG Power Marking Inc.
2000 Standard Labor Rates for Intracompany Transactions
- --------------------------------------------------------------------------------
Category Fully Loaded Standard Rate
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Executive 210.00
- --------------------------------------------------------------------------------
Regional Manager 136.00
- --------------------------------------------------------------------------------
Sr. Attorney 129.00
- --------------------------------------------------------------------------------
Attorney 100.00
- --------------------------------------------------------------------------------
Exec. Dir. Energy Mktg. 113.00
- --------------------------------------------------------------------------------
Trader/Contract Administrator 86.00
- --------------------------------------------------------------------------------
Hourly Scheduler 46.00
- --------------------------------------------------------------------------------
Sr. Accountant 52.00
- --------------------------------------------------------------------------------
Executive Dir. Finance/Tax 100.00
- --------------------------------------------------------------------------------
Sr. Financial Analyst 58.00
- --------------------------------------------------------------------------------
Financial Analyst 52.00
- --------------------------------------------------------------------------------
Sr. Accountant 52.00
- --------------------------------------------------------------------------------
Accountant 46.00
- --------------------------------------------------------------------------------
Administrative Support 35.00
- --------------------------------------------------------------------------------
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