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Exhibit 10.6(a)
THE MONTANA POWER COMPANY
and
PUGET SOUND POWER & LIGHT COMPANY
and
THE WASHINGTON WATER POWER COMPANY
and
PORTLAND GENERAL ELECTRIC COMPANY
and
PACIFIC POWER & LIGHT COMPANY
COMMON FACILITIES AGREEMENT
COLSTRIP UNITS #1, #2, #3 and #4
2
COMMON FACILITIES AGREEMENT
COLSTRIP UNITS #1, #2, #3 AND #4
TABLE OF CONTENTS
Index
Page
----
1. Definitions .......................................................... 1
2. Term ................................................................. 2
3. Allocation of Common Facilities ...................................... 2
4. Addition or Deletion of Common Facilities............................. 2
5. Cost Allocations ..................................................... 2
6. Operation of Common Facilities ....................................... 3
7. Budget ............................................................... 3
8. Provisions for Additional Facilities ................................. 4
9. Arbitration .......................................................... 5
10. Waiver of Right to Partition ......................................... 5
11. Conveyance of Common Facilities ...................................... 6
12. Mutual Support ....................................................... 6
13. Miscellaneous ........................................................ 7
Exhibit A - Common Facilities
Exhibit B - Common Facilities Lands
Exhibit C - Colstrip Plants #l-#4 Buffer Zone
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COMMON FACILITIES AGREEMENT
This Agreement is made as of the 6th day of May, 1981, by and between the
following parties: THE MONTANA POWER COMPANY, a Montana corporation ("Montana"),
PUGET SOUND POWER & LIGHT COMPANY, a Washington corporation and PUGET COLSTRIP
CONSTRUCTION COMPANY, a Washington Corporation (collectively, "Puget"), THE
WASHINGTON WATER POWER COMPANY, a Washington corporation ("Water Power"),
PORTLAND GENERAL ELECTRIC COMPANY, an Oregon corporation ("Portland"), PACIFIC
POWER & LIGHT COMPANY, a Maine corporation ("Pacific"), and BASIN ELECTRIC POWER
COOPERATIVE, a North Dakota cooperative corporation ("Basin Electric").
1. DEFINITIONS.
(a) The "#1 & #2 Owners Agreement" means the Construction and Ownership
Agreement for Colstrip Units #1 and #2 entered into July 30, 1971.
(b) The "#3 & #4 Owners Agreement" means the Ownership and Operation
Agreement for Colstrip Units #3 and #4 entered into May 6, 1981.
(c) "Committees" means the Owner's Committee provided for in the #1 & #2
Owners Agreement and the Committee provided for in the #3 & #4 Owners Agreement.
(d) "Common Facilities" means all personal property listed on Exhibit A
hereto and all real property described in Exhibit B hereto, either as modified,
added to, or deleted from, from time to time in the manner provided in Section
4.
(e) "Common Facilities Operator" means the Operator appointed under
Section 6(a) hereof.
(f) "Owners" means Montana, Puget, Water Power, Portland, Pacific, and
Basin Electric, and their successors and assigns.
(g) "Prudent Utility Practice" at any particular time means either any of
the practices, methods and acts engaged in or approved by a significant portion
of the electrical utility industry prior thereto or any of the practices,
methods or acts, which, in the exercise of reasonable judgment in the 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
reliability, safety and expedition. Prudent Utility Practice shall apply not
only to functional parts of the Common Facilities, but also to appropriate
structures, landscaping, painting, signs, lighting, other facilities and public
relations programs, including recreational facilities, and any other programs or
facilities, reasonably designed to promote public enjoyment, understanding and
acceptance of the Projects. Prudent Utility Practice is not intended to be
limited to the
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optimum practice, method or act, to the exclusion of all others, but rather to
be a spectrum of possible practices, methods or acts. Prudent Utility Practice
shall also include those practices, methods and acts that are required by
applicable laws and final orders or regulations of regulatory agencies having
jurisdiction.
2. TERM.
This agreement shall be effective and binding when executed by Montana,
Puget, Water Power, Portland and Pacific and shall be effective and binding as
to Basin Electric only when executed by Basin Electric. This agreement shall
continue until the first to end of (a) the term of the #1 & #2 Owners Agreement
or (b) the term of the #3 & #4 Owners Agreement; provided, however, that section
10 hereof shall survive until the end of the term of both the #1 & #2 Owners
Agreement and the #3 & #4 Owners Agreement.
3. ALLOCATION OF COMMON FACILITIES.
Exhibit A to this agreement allocates the Common Facilities between
Colstrip Units #1 and #2 and Colstrip Units #3 and #4. That portion of the
Common Facilities allocated to Colstrip Units #1 and #2, is part of the Project,
as that term is defined in the #1 & #2 Owners Agreement. That portion of the
Common Facilities allocated to Colstrip Units #3 and #4 is part of the Project,
as that term is defined in the #3 & #4 Owners Agreement.
4. ADDITION OR DELETION OF COMMON FACILITIES.
Common Facilities may be modified, added to, or deleted from this
agreement only with the approval of both Committees; provided, however, that no
such action by the Committees shall be effective to divest any Owner of any
interest in the Common Facilities or reduce such interest without the written
consent of the Owner or Owners so affected.
5. COST ALLOCATIONS.
The costs of construction, operation and maintenance of the Common
Facilities shall be allocated between the Colstrip Units #1 and #2 and Colstrip
Units #3 and #4 in the portion provided in Exhibit A to this agreement, as
modified from time to time. A Committee may at any time propose to the
Committees a revised method of allocating costs which it believes is more
equitable than the initial allocation herein provided. Each Committee shall use
every effort in good faith to agree on such revised method of allocating costs
and shall proceed under Section 9 if such effort does not result in agreement.
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6. OPERATION OF COMMON FACILITIES.
(a) The Owners hereby appoint Montana, and Montana hereby accepts
appointment, as the Common Facilities Operator. The Common Facilities Operator,
as agent for and on behalf of the Owners, shall construct, operate and maintain
the Common Facilities, hire all necessary personnel, and pay all construction,
operation and maintenance expenses (including, but not limited to, labor
payroll, materials and supplies), all in accordance with the #1 & #2 Owners
Agreement and the #3 & #4 Owners Agreement, guidelines established from time to
time by the Committees, and any applicable laws, regulations, orders, permits
and licenses, now or hereafter in effect, of any governmental authority.
(b) The Common Facilities Operator shall not assign, transfer or delegate,
voluntarily or by operation of law, its responsibilities to any person without
the written consent of the Committees. If the Common Facilities Operator is
replaced as operator under the #3 & #4 Owners Agreement, it shall be removed as
Common Facilities Operator hereunder and in such event the replacement operator
under the #3 and #4 Owners Agreement shall be deemed to be the Common Facilities
Operator under this Agreement, provided that no such replacement of Common
Facilities Operator shall become effective earlier than the effective date of
its substitution or replacement as operator under the #3 and #4 Owners Agreement
unless:
(i) the existing Common Facilities Operator consents thereto; or
(ii) an arbitrator shall find that the Common Facilities Operator is in
material breach of its obligations as Common Facilities Operator.
The Common Facilities Operator removed shall be entitled to recover from the
Owners an equitable amount to cover the cost impacts of such removal.
7. BUDGET
(a) On or before September 1 of each year, the Common Facilities Operator
shall submit to the Committees a budget of its estimate of costs of
construction, operation and maintenance of the Common Facilities by calendar
months for the operating year beginning January 1, next following. Such budget
shall be subject to approval by the Committees which approval shall not
unreasonably be withheld. The Committees shall approve such budget or a revised
budget on or before November 1 in any such year. The budget will list the work
force and expense therefor, materials, supplies, and other expenses associated
with the normal maintenance program. Extraordinary items of maintenance
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will be detailed to set forth the cost of labor required beyond that available
from the regular force and other expense which will be incurred. The Common
Facilities Operator will submit budget revisions as may become necessary from
time to time during any operating year which the Committees shall promptly
consider and which shall similarly be subject to approval by the Committees. The
budget will guide expenditures for construction, operation and maintenance
purposes through the ensuing year, except as may be required in an emergency.
(b) In the event of emergency or instances of unforeseen maintenance
restricting use of the Common Facilities below that required by the Owners when
repairs could be effected more rapidly by expenditure of overtime and other
expediting costs, the Owners will be individually notified. Unless authorized by
the Committees, the Owners desiring accelerated repairs will share pro rata,
according to their respective ownerships, as determined from Exhibit A to this
Agreement and the #1 & #2 Owners Agreement and the #3 & #4 Owners Agreement, the
expediting costs expended to return the Common Facilities to the required
operating level at an earlier date.
(c) The Owners recognize that it will be necessary for continued operation
of the Common Facilities, or to maintain them in operable condition, that the
Common Facilities Operator be in a position to meet commitments for labor,
repairs and replacements, materials and supplies, services and other expenses of
a continuing nature in order that it may fulfill its obligations to the Owners
as Common Facilities Operator under this Agreement. Accordingly, notwithstanding
any of the provisions of this Section 7, the Common Facilities Operator, on
behalf of the Owners, may make all expenditures in the normal course of business
or in an emergency, all as the same are necessary for the proper and safe
operation and maintenance of the Common Facilities. As soon as practicable after
the making of any such expenditures, the Common Facilities Operator shall make a
full report thereof to the Committees. The Common Facilities Operator shall take
any action required by a final and binding order of any public authority having
jurisdiction or in any emergency for the safety of the Common Facilities.
8. PROVISIONS FOR ADDITIONAL FACILITIES.
(a) Each Owner shall have the right at its expense to install and operate
on the Common Facilities land, facilities for its own system; provided, however,
that the facilities of any Owner shall be so installed and operated as not to
burden or unreasonably interfere with the ultimate full utilization of the land
for Colstrip Units #1, #2, #3 and #4, or with the facilities off the other
Owners or with the construction of additional generating units. In the event
that an Owner proposes to install or operate facilities which would require the
relocation of previously installed facilities of another Owner, or of the Common
Facilities, but would otherwise meet the requirements of
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the preceding sentence, the Owner desiring to install or operate such facilities
shall have the right to call for such relocation if it bears all direct and
indirect costs of such relocation.
(b) Each Owner releases all other Owners and their agents and employees
from claims to profits, charges, rents, or benefits that may arise from use by
any Owner of Common Facilities land pursuant to Section 8(a).
9. ARBITRATION.
(a) Any controversies arising out of or relating to this Agreement, except
those arising out of relating to Sections 3 and 4 hereof, which cannot be
resolved through negotations between the Committees within thirty (30) days
after inception of the matter in dispute shall, upon demand of either Committee,
be submitted to an Arbitrator having demonstrated expertise in the matter
submitted. If the Committees cannot mutually agree upon such Arbitrator, then
upon petition of any Committee, such Arbitrator shall be appointed by the
Superior Court of the State of Washington, in and for the County of Spokane. The
arbitration shall be conducted in Spokane, Washington, pursuant to the
Washington Arbitration Act, RCW Chapter 7.04 as the same may be amended from
time to time. The Arbitrator shall render his decision in writing not later than
thirty (30) days after the matter has been submitted to him, and such decision
shall be conclusive and binding upon the Owners. The costs incurred by any
arbitration proceedings shall be charged to costs of construction or cost of
operation, whichever may be appropriate, all in accordance with the #1 & #2
Owners Agreement and the #3 & #4 Owners Agreement, provided that each Committee
shall pay its own attorney's fees and costs of witnesses.
(b) An Owner who disagrees with the Committees' resolution of any
controversy arising out of Section 5 hereof within thirty (30) days after such
Committee resolution of the matter in dispute may submit such matter to an
Arbitrator pursuant to Section 9(a). All references to the "Committee" in
Section 9(a) shall be changed to "Owner" for purposes of application to this
subsection.
10. WAIVER OF RIGHT TO PARTITION
So long as the Common Facilities or any part thereof as originally
constructed, reconstructed or added to are used or useful for the generation of
electric power and energy, or to the end of the period permitted by applicable
law, whichever first occurs, the Owners waive their right to partition of the
Common Facilities whether by partition in kind or sale and division of the
proceeds thereof, and agree that they will not resort to any action at law or in
equity to partition and further waive the benefit of all laws that may now or
hereafter authorize such partition of the properties comprising the Common
Facilities. It is agreed this covenant shall be deemed to run with the land.
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All instruments of conveyance which effect, evidence or vest each Owner's
respective ownership interest in the Common Facilities shall contain this waiver
of right to partition.
11. CONVEYANCE OF COMMON FACILITIES.
Each Owner shall promptly take all action (including, but not limited to,
obtaining all requisite authorizations) necessary for participation by such
Owner in the ownership, construction, operation and maintenance of the Common
Facilities. Each Owner shall promptly take such action (including, but not
limited to, the execution, acknowledgment, delivery and recordation of
instruments of conveyance) as may reasonably be requested by any other Owner to
effect, evidence or vest each Owner's respective interests in the Common
Facilities; provided, however, that Montana and Puget shall not be obligated to
convey an interest in the Common Facilities prior to January 1, 1984.
12. MUTUAL SUPPORT.
(a) Montana and Puget now own and may hereafter acquire certain land near
Colstrip, Montana, within the boundaries shown on Exhibit C to this Agreement,
for use in connection with Colstrip Units #1 and #2 (the "1 & 2 Lands"). Montana
and Puget shall grant to the Owners such easements, licenses and other rights in
the 1 & 2 Lands as may be reasonably necessary for the effective and efficient
construction, operation and maintenance of Colstrip Units #3 and #4 and related
improvements (including, but not limited to, substations, transmission lines,
ponds and utilities, but excluding residential housing); provided that such
rights and the exercise thereof shall not materially interfere with the
construction, operation and maintenance of Colstrip Units #1 and #2 and related
improvements (including, but not limited to, substations, transmission lines,
ponds, utilities and existing residential housing). Any such grant may be for
such compensation (not in excess of Montana's and Puget's costs which are
equitably allocable to the rights granted) and subject to such reservations,
restrictions, conditions and other provisions as may reasonably be required by
Montana and Puget.
(b) The Owners now own and may hereafter acquire certain land near
Colstrip, Montana, within the boundaries shown on Exhibit C to this Agreement,
for use in connection with Colstrip Units #3 and #4 (the "3 & 4 Lands"). The
Owners shall grant to Puget and Montana such easements, licenses and other
rights in the 3 & 4 Lands as may be reasonably necessary for the effective and
efficient construction, operation and maintenance of Colstrip Units #1 and #2
and related improvements (including, but not limited to, substations,
transmission lines, ponds and utilities, but excluding residential housing);
provided that such rights and the exercise thereof shall not materially
interfere with the construction, operation and maintenance of Colstrip Units #3
and #4 and related improvements (including, but not limited to,
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substations, transmission lines, ponds, utilities and existing residential
housing). Any such grant may be for such compensation (not in excess of the
Owners' costs which are equitably allocable to the rights granted) and subject
to such reservations, restrictions, conditions and other provisions as may
reasonably be required by the Owners.
13. MISCELLANEOUS.
(a) The headings of the clauses of this Agreement are inserted for
convenience of reference only and shall not affect the meaning or construction
thereof.
(b) The singular of any term in this Agreement shall encompass the plural
and the plural the singular, unless the context otherwise indicates.
(c) This Agreement shall be construed in accordance with the laws of the
State of Montana, except that Section 9 shall be construed in accordance with
the laws of the State of Washington.
(d) This Agreement shall not be amended except by written instrument
executed, acknowledged and delivered by all of the Owners.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
several counterparts.
THE MONTANA POWER COMPANY
By /s/ Melvyn M. Ryan
------------------------------------------
Its Executive Vice President
------------------------------------------
for Administration
------------------------------------------
Attest:
/s/ T. O. McElwain
- ----------------------------------
Asst. Secretary
PUGET SOUND POWER & LIGHT COMPANY
By /s/ D. H. Knight
------------------------------------------
Its Senior Vice President
------------------------------------------
Attest:
/s/ W. E. Watson
- ----------------------------------
Secretary
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PUGET COLSTRIP CONSTRUCTION COMPANY
By /s/ D. H. Knight
------------------------------------------
Its Senior Vice President
------------------------------------------
Attest:
/s/ W. E. Watson
- ----------------------------------
Secretary
THE WASHINGTON WATER POWER COMPANY
By /s/ H. W. Harding
------------------------------------------
Attest:
/s/ L. O. Falk
- ----------------------------------
Secretary
PORTLAND GENERAL ELECTRIC COMPANY
By /s/ Glen E. Bredemier
------------------------------------------
Attest:
/s/ Warren Hastings
- ----------------------------------
Asst. Secretary
PACIFIC POWER & LIGHT COMPANY
By /s/ R. B. Lisbakken
------------------------------------------
Attest:
/s/ Sally A. Nofziger
- ----------------------------------
Asst. Secretary
BASIN ELECTRIC POWER COOPERATIVE
By
------------------------------------------
Attest:
- ----------------------------------
Secretary
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STATE OF MONTANA )
) ss.
COUNTY OF SILVER BOW )
On this 6th day of May, 1981, before me, the undersigned, a Notary Public
in and for the State of Montana, personally appeared Melvyn M. Ryan, known to me
to be the Executive Vice President of THE MONTANA POWER COMPANY and acknowledged
to me that he executed the within instrument on behalf of that corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal the day and year in this certificate first above written.
/s/ James Walsh
------------------------------------------
Notary Public in and for the State of
Montana, residing at Butte
My Commission expires 6/26/82
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 6th day of May, 1981, before me, the undersigned, a Notary Public
in and for the State of Washington, personally appeared D. H. Knight, known to
me to be the Sr. Vice President of PUGET SOUND POWER & LIGHT COMPANY and
acknowledged to me that he executed the within instrument on behalf of that
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal the day and year in this certificate first above written.
/s/ Jeanette Ragsdale
------------------------------------------
Notary Public in and for the State of
Washington, residing at Seattle
My Commission expires August 1, 1981
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STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 6th day of May, 1981, before me, the undersigned, a Notary Public
in and for the State of Washington, personally appeared D. H. Knight, known to
me to be the Sr. Vice President of PUGET COLSTRIP CONSTRUCTION COMPANY and
acknowledged to me that he executed the within instrument on behalf of that
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal the day and year in this certificate first above written.
/s/ Jeanette Ragsdale
------------------------------------------
Notary Public in and for the State of
Washington, residing at Seattle
My Commission expires August 1, 1981
STATE OF WASHINGTON )
) ss.
COUNTY OF )
On this 6th day of May, 1981, before me, the undersigned, a Notary Public
in and for the State of Washington, personally appeared H. W. Harding, known to
me to be the Vice President of THE WASHINGTON WATER POWER COMPANY and
acknowledged to me that he executed the within instrument on behalf of that
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal the day and year in this certificate first above written.
/s/ Lois L. Loveridge
------------------------------------------
Notary Public in and for the State of
Washington, residing at Spokane
My Commission expires October 17, 1982
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STATE OF OREGON )
) ss.
COUNTY OF )
On this 6th day of May, 1981, before me, the undersigned, a Notary Public
in and for the State of Oregon, personally appeared Glen E. Bredemeier, known to
me to be the Vice President of PORTLAND GENERAL ELECTRIC COMPANY and
acknowledged to me that he executed the within instrument on behalf of that
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal the day and year in this certificate first above written.
/s/ Shirley A. Kushner
------------------------------------------
Notary Public in and for the State of
Oregon, residing at Portland, OR
My Commission expires 9/27/84
STATE OF OREGON )
) ss.
COUNTY OF )
On this 6th day of May, 1981, before me, the undersigned, a Notary Public
in and for the State of Oregon, personally appeared R. B. Lisbakken, known to me
to be the Vice President of PACIFIC POWER AND LIGHT COMPANY and acknowledged to
me that he executed the within instrument on behalf of that corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal the day and year in this certificate first above written.
/s/ Hilda V. Hambach
------------------------------------------
Notary Public in and for the State of
Oregon, residing at Portland, Oregon
My Commission expires September 28, 1982
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STATE OF NORTH DAKOTA )
) ss.
COUNTY OF )
On this ______ day of ____________, ___, before me, the undersigned, a
Notary Public in and for the State of North Dakota, personally appeared
__________________________, known to me to be the _______________________ of
BASIN ELECTRIC POWER COOPERATIVE and acknowledged to me that he executed the
within instrument on behalf of that corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal the day and year in this certificate first above written.
-------------------------------------
Notary Public in and for the State of
North Dakota, residing at ______________
My Commission expires __________________
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Page 1 of 1
Exhibit A
Common Facilities Agreement
Colstrip Units #1, #2, #3
and #4
COMMON FACILITIES
Portion of Cost Portion of Cost
Allocated to Allocated to
Facility Description Units #1 & #2 Units #3 & #4
- -------------------- --------------- ---------------
A. Miscellaneous Facilities
Sewer System .3186 .6814
Fire Protection Connections .95 .05
Garage/Warehouse .3186 .6814
Meteorological Structure .3186 .6814
Air Quality Monitoring Programs
(Excluding Indian Reservation
Monitoring) .3186 .6814
Coal Handling Crew Facilities .3186 .6814
Marine Equipment .3186 .6814
Diesel Fuel Storage .3186 .6814
Gasoline Storage .3186 .6814
115 kV Start-up Transmission Line .3186 .6814
B. Drainage and Runoff Retention
Secondary Sediments Retention .3186 .6814
C. Intake Water System
Intake Canal & Structure .3186 .6814
Pumps (Excluding Labor) .6372 .3628
Other Mechanical (Excluding Pumps
but Including Labor)
& Electrical Equipment .4779 .5221
D. Coal Handling Facilities
Concrete Tunnel .500 .500
Receiving Hoppers .500 .500
Conveyor No. 6 .714 .286
E. Surge Pond
Entire Pond & Structure .3186 .6814
Mechanical & Electrical Equipment .6372 .3628
Cutoff Wall No. 1 .3186 .6814
Cutoff Wall No. 2 .3186 .6814
F. All Land Described
in Exhibit B Hereto .3186 .6814
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[MAP OMITTED]
17
[MAP OMITTED]
18
[MAP OMITTED]
19
STATE OF OREGON )
) ss.
County of Multnomah )
On this 30 day of June 1998, before me, the undersigned Notary Public in
and for the State of Oregon personally appeared Walter E. Pollock, known to me
to be the Senior Vice President of PORTLAND GENERAL ELECTRIC COMPANY and
acknowledged to me that he executed the within instrument on behalf of that
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal the day and year in this certificate first above written.
- ----------------------------------- /s/ Karen J. Lewis
[SEAL] OFFICIAL SEAL -------------------------------------
KAREN J. LEWIS Notary Public for the State of Oregon
NOTARY PUBLIC - OREGON Residing at Portland Oregon
COMMISSION NO.038820 My Commission expires 10/20/98
MY COMMISSION EXPIRES OCT 20, 1998
- -----------------------------------
STATE OF OREGON )
) ss.
County of Multnomah )
On this __ day of _____________, 1998, before me. the undersigned Notary
Public in and for the State of Montana, personally appeared
___________________________ known to me to be the
_____________________________ of PACIFIC POWER & LIGHT COMPANY, now PACIFICORP
and acknowledged to me that he executed the within instrument on behalf of that
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal the day and year in this certificate first above written.
-------------------------------------
Notary Public for the State of Oregon
Residing at _________________________
My Commission expires _______________