EXHIBIT 10.41
IMPERIAL ENERGY CORPORATION
LONG TERM POWER PURCHASE
POWER PURCHASE CONTRACT
BETWEEN
SOUTHERN CALIFORNIA EDISON COMPANY
AND
IMPERIAL ENERGY CORPORATION
TABLE OF CONTENTS
Section Title Page
- ------- ----- ----
1 PROJECT SUMMARY 1
2 DEFINITIONS 4
3 TERM 10
4 GENERATING FACILITY 11
5 OPERATING OPTIONS 19
6 INTERCONNECTION FACILITIES 20
7 METERING 21
8 POWER PURCHASE PROVISIONS 22
9 PAYMENT AND BILLING PROVISIONS 40
10 TAXES 42
11 TERMINATION 43
12 SALE OF GENERATING FACILITY 43
13 ABANDONMENT OF PROJECT 44
14 LIABILITY 45
15 INSURANCE 47
16 UNCONTROLLABLE FORCES 49
17 NONDEDICATION OF FACILITIES 51
18 PRIORITY OF DOCUMENTS 52
19 NOTICES AND CORRESPONDENCE 52
20 PREVIOUS COMMUNICATIONS 52
21 THIRD PARTY BENEFICIARIES 53
22 NONWAIVER 53
23 DISPUTES 53
24 SUCCESSORS AND ASSIGNS 55
25 EFFECT OF SECTION HEADINGS 55
26 TRANSMISSION 55
27 AMENDMENT 58
28 GOVERNING LAW 58
29 CONFIDENTIALITY 58
30 MULTIPLE ORIGINALS 59
APPENDIX A
APPENDIX B
APPENDIX C
1. PROJECT SUMMARY
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This Contract is entered into between Southern California Edison
Company ("Edison") and Imperial Energy Corporation, a California
corporation ("Seller"). Seller is willing to construct, own, and
operate a Qualifying Facility and sell electric power to Edison and
Edison is willing to purchase electric power delivered by Seller to
Edison at the Point of Interconnection pursuant to the terms and
conditions set forth as follows:
1.1 All Notices shall be sent to Seller at the following
address: Imperial Energy Corporation
2049 Century Park East, Suite 1100
Los Angeles, CA 90067
Attn: President
1.2 Seller's Generating Facility:
a. Nameplate Rating: 3,000 kW.
b. Location: Niland, Imperial County, California
c. Type (Check One):
[ ] Cogeneration Facility
[X] Small Power Production Facility
1.3 Contract Capacity: 1,000 kW
1.3.1 Estimated as-available capacity: 2,000 kW.
1.4 Expected annual production: 21,024,000 kWh.
1.5 Expected Date of Firm Operation: July 1, 1985
1.6 Contract Term: 20 years
1.7 Operating Options pursuant to Section 5: (Check One)
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[X] Operating Option I. Excess Generator output dedicated to Edison. No
electric service or standby service required from Edison. --
[ ] Operating Option II. Entire Generator output dedicated to Edison
with separate electric service required from Edison.
1.8 The Capacity Payment Option selected by Seller pursuant to Section 8.1
shall be: (Check One)
[ ] Option A - As-available capacity based upon:
[ ] Standard Offer No. 1 Capacity Payment Schedule, or
[ ] Forecast of Annual As-Available Capacity Payment Schedule
[X] Option B - Firm Capacity
a. The as-available capacity price (first year): ____ kW-yr. (Appendix
A)
b. The Contract Capacity Price: $132 kW-yr. (Firm Capacity)
1.9 The Energy Payment Option selected by Seller pursuant to Section 8.2
shall be: (Check One)
[X] Option 1 - Forecast of Annual Marginal Cost of Energy in effect at
date of execution of this Contract. (Appendix B)
[ ] Option 2 - Levelized Forecast of Marginal Cost of Energy in effect
at date of execution of this Contract. (Appendix C)
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For the energy payment refund pursuant to Section 8.5 under Option
2, Edison's Incremental Cost of Capital is 15%.
Seller may change once between Options 1 and 2, provided Seller
delivers written notice of such change at least 90 days prior to the
date of Firm Operation. For Option 1 or 2, Seller elects to receive
the following percentages in 20% increments, the total of which
shall equal 100%:
60 percent of Forecast of Annual Marginal Cost of Energy, and 40
---------- --
percent of Edison's published avoided cost of energy as updated
-------
periodically and accepted by the Commission.
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GENERAL TERMS AND CONDITIONS
2. DEFINITIONS
When used with initial capitalizations, whether in the singular or in
the plural, the following terms shall have the following meanings:
2.1 Adjusted Capacity Price: The $/kW-yr capacity purchase price based on
the Capacity Payment Schedule in effect at the time of Contract
execution for the time period beginning on the date of Firm Operation
for the first generating unit and ending on the date of termination or
reduction of Contract Capacity under Capacity Payment Option B.
2.2 Appendix A: Capacity Payment Schedule - Forecast of Annual As
Available Capacity
2.3 Appendix B: Energy Payment Schedule - Forecast of Annual Marginal Cost
of Energy
2.4 Appendix C: Energy Payment Schedule - Levelized Forecast of Marginal
Cost of Energy
2.5 Capacity Payment Schedule(s): Published capacity payment schedule(s)
as authorized by the Commission and in effect at the time of execution
of this Contract for as-available or firm capacity.
2.6 Commission: The Public Utilities Commission of the State of
California.
2.7 Contract: This document and Appendices, as amended from time to time.
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2.8 Contract Capacity: The electric power producing capability of the
Generating Facility which is committed to Edison.
2.9 Contract Capacity Price: The capacity purchase price from the Capacity
Payment Schedule approved by the Commission and in effect on the date
of execution of this Contract for Capacity Payment Option B.
2.10 Contract Term: Period in years commencing with date of Firm Operation
during which Edison shall purchase electric power from Seller.
2.11 Current Capacity Price: The $/kW-yr capacity price provided in the
Capacity Payment Schedule determined by the year of termination or
reduction of Contract Capacity and the number of years from such
termination or reduction to the expiration of the Contract Term for
Capacity Payment Option B.
2.12 Edison: The Southern California Edison Company.
2.13 Edison Electric System Integrity: The state of operation of Edison's
electric system in a manner which is deemed to minimize the risk of
injury to persons and/or property and enables Edison to provide
adequate and reliable electric service to its customers.
2.14 Emergency: A condition or situation which in Edison's sole judgment
affects Edison Electric System Integrity.
2.15 Energy: Kilowatthours generated by the Generating Facility which are
purchased by Edison at the Point of Interconnection.
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2.16 Firm Operation: The date agreed on by the Parties on which each
generating unit of the Generating Facility is determined to be a
reliable source of generation and on which such unit can be reasonably
expected to operate continuously at its effective rating (expressed in
kW).
2.17 First Period: The period of the Contract Term specified in Section
3.1.
2.18 Forced Outage: Any outage other than a scheduled outage of the
Generating Facility that fully or partially curtails its electrical
output.
2.19 Generating Facility: All of Seller's generators, together with all
protective and other associated equipment and improvements, necessary
to produce electrical power at Seller's Facility excluding associated
land, land rights, and interests in land.
2.20 Generator: The generator(s) and associated prime mover(s), which are a
part of the Generating Facility.
2.21 Interconnection Facilities: The electrical interconnection facilities
furnished, at no cost to Edison, by Seller, or by the Interconnecting
Utility on Seller's behalf, which is appurtenant to, and/or incidental
to, the Project. The Interconnection Facilities shall include, but are
not limited to, transmission lines and/or distribution lines between
the Project and transmission lines and/or distribution lines of the
Interconnecting Utility, relays, power-circuit breakers, metering
devices, telemetering devices, and
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other control and Protective devices specified by the Interconnecting
Utility as necessary for operation of the Project in parallel with the
Interconnecting Utility's electric system.
2.22 Interconnecting Utility: The electric utility, or any other utility
that is directly connected with the Project, and which receives
electrical energy generated by the Generating Facility.
2.23 Monthly Capacity Factor: For each month, the Energy expressed in kWh,
divided by the product of: (i) the total of Contract Capacity and
Estimated as-available capacity, as specified in Section 1.3; and (ii)
the total hours in the month, minus (a) maintenance hours allowed in
Section 4.5, (b) hours during an Uncontrollable Force on either the
Edison Interconnecting Utility's systems which prohibits Edison from
accepting electrical energy from the Project, and (c) hours that
Edison curtailed or reduced the delivery of electrical energy from the
Project pursuant to Sections 4.4 and 8.4.
2.24 Operate: To provide the engineering, purchasing, repair, supervision,
training, inspection, testing, protection, operation, use, management,
replacement, retirement, reconstruction, and maintenance of and for
the Generating Facility in accordance with applicable California
utility standards and good engineering practices.
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2.25 Operating Representatives: Individual(s) appointed by each Party for
the purpose of securing effective cooperation and interchange of
information between the Parties in connection with administration and
technical matters related to this Contract.
2.26 Parties: Edison and Seller.
2.27 Party: Edison or Seller.
2.28 Peak Months: Those months which the Edison annual system peak demand
could occur. Currently, but subject to change with notice, the peak
months for the Edison system are June, July, August and September.
2.29 Point of Interconnection: The point where the electrical energy
generated by the Seller at the Project is delivered to the Edison
electric system.
2.30 Project: The Generating Facility and Interconnection Facilities
required to permit the Generator to deliver electrical energy and make
capacity available to Interconnecting Utility.
2.31 Qualifying Facility: Cogeneration or Small Power Production Facility
which meets the criteria as defined in Title 18, Code of Federal
Regulations, Section 292.201 through 292.207.
2.32 Renewable Resources: Wind parks, small hydroelectric, solar, and
geothermal resources which produce electric power.
2.33 Second Period: The Period of the Contract Term specified in Section
3.2.
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2.34 Seller: The Party identified in Section 1.0.
2.35 Seller's Facility: The premises and equipment of Seller located as
specified in Section 1.2. This Generating Facility to be known as
"Imperial Energy Salton Sea Unit 1".
2.36 Small Power Production Facility: The facilities and equipment which
use biomass, waste, or Renewable Resources, including wind, solar,
geothermal, and water, to produce electrical energy as defined in
Title 18, Code of Federal Regulations, Section 292.201 through
292.207.
2.37 Summer Period: Defined in Edison's Tariff Schedule No. TOU-8 as now in
effect or as may hereafter be authorized by the Commission.
2.38 Tariff Schedule No. TOU-8: Edison's time-of-use energy tariff for
electric service exceeding 500 kW, as now in effect or as may
hereafter be authorized by the Commission.
2.39 Uncontrollable Forces: Any occurrence beyond the control of a Party
which causes that Party to be unable to perform its obligations
hereunder and which a Party has been unable to overcome by the
exercise of due diligence, including but not limited to flood,
drought, earthquake, storm, fire, pestilence, lightning and other
natural catastrophes, epidemic, war, riot, civil disturbance or
disobedience, strike, labor dispute, action or inaction of
legislative, judicial, or
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regulatory agencies or other proper authority, which may conflict with
the terms of this Contract or failure, threat of failure or sabotage
of facilities which have been maintained in accordance with good
engineering and operating practices in California.
2.40 Winter Period: Defined in Edison's Tariff Schedule No. TOU-8 as now in
effect or as may hereafter be authorized by the Commission.
3. TERM
This Contract shall be effective upon execution by the Parties and
shall remain effective until either Party gives 90 days prior written
notice of termination to the other Party, except that such notice of
termination shall not be effective to terminate this Contract prior to
expiration of the Contract Term specified in Section 1.6.
3.1 The First Period of the Contract Term shall commence upon date of Firm
Operation but not later than 5 years from the date of execution of
this Contract.
a. If the Contract Term specified in Section 1.6 is 15 years, the
First Period of the Contract Term shall be for 5 years.
b. If the Contract Term specified in Section 1.6 is 20, 25, or 30
years, the First Period of the Contract Term shall be for 10
years.
3.2 The Second Period of the Contract Term shall commence upon expiration
of the First Period and shall continue for the remainder of the
Contract Term.
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4. GENERATING FACILITY
4.1 Ownership
The Generating Facility shall be owned by Seller.
4.2 Design
4.2.1 Seller, at no cost to Edison, shall:
a. Design the Generating Facility.
b. Acquire all permits and other approvals necessary for the
construction, operation, and maintenance of the Generating
Facility.
c. Complete all environmental impact studies necessary for the
construction, operation, and maintenance of the Generating
Facility.
4.2.2 Edison shall have the right to review the design of the
Generating Facility's electrical system and the Seller's
Interconnection Facilities. Edison shall have the right to
request modifications to the design of the Generating
Facility's electrical system and the Seller's Interconnection
Facilities. Such modifications shall be required if necessary
to maintain Edison Electric System Integrity. If Seller does
not agree to such modifications, resolution of the difference
between the Parties shall be made pursuant to Section 23.
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4.3 Construction
Edison shall have the right to review, consult with, and make
recommendations regarding Seller's construction schedule and to
monitor the construction and start-up of the Project. Seller shall
notify Edison, as far in advance of Firm Operation as reasonably
possible, of changes in Seller's Construction Schedule which may
affect the date of Firm Operation.
4.4 Operation
4.4.1 Edison shall have the right to monitor the operation of the
Project and may require changes in Seller's method of
operation if such changes are necessary, in Edison's sole
judgment, to maintain Edison Electric System Integrity.
4.4.2 Seller shall notify, in writing, Edison's Operating
Representative at least 14 days prior to (i) the initial
delivery of electrical energy to the Point of Interconnection.
4.4.3 Edison shall have the right to require Seller to curtail or
reduce the delivery of electrical energy from the Project to
the Edison electric system whenever Edison determines, in its
sole judgment, that such curtailment or reduction is necessary
to facilitate maintenance of Edison's facilities,
Interconnecting Utility's facilities, or to maintain Edison
Electric
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System Integrity. If Edison requires Seller to curtail or
reduce the delivery of electrical energy from the Project to
the Edison electric system pursuant to this Section 4.4.3,
Seller shall have the right to continue to serve its total
electrical requirements. Each Party shall endeavor to correct,
within a reasonable period, the condition on its system which
necessitates the curtailment or the reduction of delivery of
electrical energy from the Project. The duration of the
curtailment or the reduction shall be limited to the period of
time such a condition exists.
4.4.4 Each Party shall keep the other Party's Operating
Representative informed as to the operating schedule of their
respective facilities affecting each other's operation
hereunder, including any reduction in Contract Capacity
availability. In addition, Seller shall provide Edison with
reasonable advance notice regarding its scheduled outages
including any reduction in Contract Capacity availability.
Reasonable advanced notice is as follows:
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SCHEDULED OUTAGE ADVANCE NOTICE
EXPECTED DURATION TO EDISON
Less than one day 24 Hours
One day or more
(except major overhauls) 1 Week
major overhaul 6 Months
4.4.5 Notification by each Party's Operating Representative of
outage date and duration should be directed to the other
Party's Operating Representative by telephone.
4.4.6 Seller shall not schedule major overhauls during Peak Months.
4.4.7 Seller shall maintain an operating log at Seller's Facility
with records of: real and reactive power production; changes
in operating status, outages, Protective Apparatus operations;
and any unusual conditions found during inspections.
Changes in setting shall also be logged for Generators which are
"block-loaded" to a specific kW capacity. In addition, Seller
shall maintain records applicable to the Generating Facility,
including the electrical characteristics of the Generator and
settings, adjustments of the Generator control equipment, and
well-field information. Information maintained pursuant to
this Section 4.4.7 shall
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be provided to Edison, within 30 days of Edison's request.
4.4.8 At Edison's request, Seller shall make all reasonable effort
to deliver power at an average rate of delivery at least equal
the Contract Capacity during periods of Emergency. In the
event that the Seller has previously scheduled an outage
coincident with an Emergency, Seller shall make all reasonable
efforts to reschedule the outage. The notification periods
listed in Section 4.4.4 shall be waived by Edison if Seller
reschedules the outage.
4.4.9 Seller shall demonstrate the ability to provide Edison the
specified Contract Capacity within 30 days of the date of Firm
Operation. Thereafter, at least once per year at Edison's
request, Seller shall demonstrate the ability to provide
Contract Capacity for a reasonable period of time as required
by Edison. Seller's demonstration of Contract Capacity shall
be at Seller's expense and conducted at a time and pursuant to
procedures mutually agreed upon by the Parties. If Seller
fails to demonstrate the ability to provide the Contract
Capacity, the Contract Capacity shall be reduced by
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agreement of the Parties pursuant to Section 8.1.2.5.
4.4.10 The Seller warrants that the Generating Facility meets the
requirements of a Qualifying Facility as of the effective date
of this Contract and continuing through the Contract Term.
4.4.11 The Seller warrants that the Generating Facility shall at all
times conform to all applicable laws and regulations. Seller
shall obtain and maintain any governmental authorizations and
permits for the continued operation of the Generating
Facility. If at any time Seller does not hold such
authorizations and permits, Seller agrees to reimburse Edison
for any loss which Edison incurs as a result of the Seller's
failure to maintain governmental authorization and permits.
4.4.12 In the event electrical energy from the Project is curtailed
or reduced pursuant to Sections 4.4.3, 16 and 8.4, the Seller,
at its sole discretion, may elect (i) to sell said electrical
energy to a third party or (ii) deliver said electrical energy
to a third party for future delivery to Edison at times and at
amount agreeable to Edison. The Seller shall
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.
be responsible for making all such arrangements. The provisions
in this Section 4.4.12 shall apply only for the duration of the
curtailment or reduction.
4.4.13 Seller shall maintain operating communications with the Edison
switching center designated by the Edison Operating
Representative. The operating communications shall include,
but not be limited to, system paralleling or separation,
scheduled and unscheduled shutdowns, equipment clearances,
levels of operating voltage or power factors, and daily
capacity and generation reports.
4.5 Maintenance
4.5.1 Seller shall maintain the Generating Facility in accordance
with applicable California utility industry standards a good
engineering and operating practices. Edison shall have the
right to monitor such maintenance of the Generating Facility.
Seller shall maintain and deliver a maintenance record of the
Generating Facility to Edison's Operating Representatives upon
request.
4.5.2 Seller shall make a reasonable effort to schedule routine
maintenance during Off-Peak Months and expected minimal
generation periods for renewable resources. Outages for
scheduled
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maintenance shall not exceed a total of 30 peak hours for the
Peak Months.
4.5.3 The allowance for scheduled maintenance is as follows:
a. Outage periods for scheduled maintenance shall not
exceed 840 hours (35 days) in any 12-month period.
This allowance may be used in increments of an hour or
longer on a consecutive or nonconsecutive basis.
b. Seller may accumulate unused maintenance hours on a
year-to-year basis up to a maximum of 1,080 hours (45
days). This accrued time must be used consecutively
and only for major overhauls.
4.6 Any review by Edison of the design, construction, operation, or
maintenance of the Project is solely for the information of Edison. By
making such review, Edison makes no representation as to the economic
and technical feasibility, operational capability, or reliability of the
Project. Seller shall in no way represent to any third party that any
such review by Edison of the Project, including, but not limited to, any
review of the design, construction, operation, or maintenance of the
Project by Edison, is a representation by Edison as to the economic and
technical feasibility, operational capability, or reliability of said
facilities. Seller is solely
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responsible for economic and technical feasibility, operational
capability, and reliability of said facilities.
4.7 Edison shall have access, at reasonable times and upon reasonable
notice, to the Generating Facility and those portions of Seller's
Geothermal field serving such Facility, for the purpose of gathering
technical information. Seller's technical records subject to such
inspection shall include, but not be limited to, drilling data, well
-testing data, well-production data, power plant performance data,
environmental data, and operation and maintenance data, provided,
however, that Edison shall not be entitled to inspect (i) Seller's
financial records or any other data of a non-technical nature, or (ii)
any portions of Seller's geothermal field other than those wells serving
the Generating Facility. Edison agrees to abide by Seller's operating
rules and regulations in connection with any such inspection by
Edison.
5. OPERATING OPTIONS
5.1 Seller shall elect in Section 1.7 to Operate its Generating Facility
pursuant to one of the following options:
a. Operating Option 1: Seller dedicates the excess Generator
output to Edison with no electric service required from
Edison.
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b. Operating Option II: Seller dedicates the entire Generator
output to Edison with electric service required from Edison.
5.2 After expiration of the First Period of the Contract Term, Seller may
change the Operating Option, but not more than once per year upon at
least 90 days prior written notice to Edison. A reduction in Contract
Capacity as a result of a change in operating options shall be subject
to Section 8.1.2.5. Edison shall not be required to remove or reserve
capacity of Interconnection Facilities made idle by a change in
operating options. Edison may dedicate any such idle interconnection
Facilities at any time to serve other customers or to interconnect
with other electric power sources. Edison shall process requests for
changes of operating option in the chronological order received.
6. INTERCONNECTION FACILITIES
6.1 Seller shall design, engineer, procure, construct, and test the
Interconnection Facilities in accordance with applicable California
utility standards and good engineering practices and the rules and
regulations of the Interconnecting Utility.
6.2 The design, installation, operation, maintenance, and modifications of
the Interconnection Facilities shall be at Seller's expense.
6.3 Seller, at no cost to Edison, shall acquire all permits and approvals
and complete all environmental impact
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studies necessary for the design, installation, operation, and
maintenance of the interconnection Facilities.
7. METERING
7.1 All meters and equipment used for the measurement of electric power
for determining Edison's payments Seller pursuant to this Contract
shall be provided, owned, and maintained by Edison and/or
Interconnecting Utility at Seller's expense.
7.2 If Seller's Generating Facility is rated at a Capacity of 500 kW or
greater, then Edison, at its option, may install at Seller's expense
generation metering and/or telemetering equipment.
7.3 Edison's or Interconnecting Utility's meters shall be sealed and the
seals shall be broken only when the meters are to be inspected,
tested, or adjusted by Edison or Interconnecting Utility. Seller shall
be given reasonable notice of testing and have the right to have its
Operating Representative present on such occasions.
7.4 Edison's or Interconnecting Utility's meters installed pursuant to
this Contract shall be tested by Edison or Interconnecting Utility, at
Edison's or Interconnecting Utility's expense, at least once each year
and at any reasonable time upon request by either Party, at the
requesting Party's expense. If Seller makes such request, Seller shall
reimburse said expense to Edison
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or Interconnecting Utility within thirty days after presentation of a
bill therefor.
7.5 Metering equipment found to be inaccurate shall be repaired, adjusted,
or replaced by Edison or Interconnecting Utility such that the
metering accuracy of said equipment shall be within plus or minus two
percent. If metering equipment inaccuracy exceeds plus or minus two
percent, the correct amount of Energy and Contract Capacity delivered
during the period of said inaccuracy shall be estimated by Edison and
agreed upon by the Parties.
8. POWER PURCHASE PROVISIONS
Prior to the date of Firm Operation, Seller shall be paid for Energy
equal to 90% of Edison's published avoided cost of energy based on
Edison's full avoided operating cost as periodically updated and
accepted by the Commission. If at any time electrical energy can be
delivered to Edison and Seller is contesting the claimed jurisdiction
of any entity which has not issued a license or other approval for the
Project, Seller, in its sole discretion and risk, may deliver
electrical energy to Edison and for any electrical energy purchased by
Edison Seller shall receive payment from Edison for (i) Energy
pursuant to this Section 8, and (ii) as-available capacity based on
90% capacity price from the Standard Offer No. 1 Capacity Payment
Schedule as approved by the Commission. Unless and until all required
licenses and
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approvals have been obtained, Seller may discontinue deliveries at any
time.
8.1 Capacity Payments
If Seller shall sell to Edison and Edison shall purchase from Seller
capacity pursuant to the Capacity Payment Option selected by Seller in
Section 1.8. Seller shall receive monthly payments for capacity equal to
90% of the payment provisions specified in this Section 8.1.
8.1.1 Capacity Payment Option A -- As-Available Capacity.
If Seller selects Capacity Payment Option A, Seller shall be paid a
monthly capacity payment calculated pursuant to the following formula:
Monthly Capacity Payment = (A x D)+(B x D)+(C x D)
Where A = kWh purchased by Edison during on-peak periods
defined in Edison's Tariff Schedule No. TOU-8.
B = kWh purchased by Edison during mid-peak periods
defined in Edison's Tariff Schedule No. TOU-8.
C = kWh purchased by Edison during off-peak periods
defined in Edison's Tariff Schedule No. TOU-8.
D = The appropriate time differentiated capacity
price from either the
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Standard Offer No. 1 Capacity Payment Schedule
or Forecast of Annual As-Available Capacity
Payment Schedule as specified by Seller in
Section 1.8.
8.1.1.1 If Seller specifies the Standard Offer No. 1 Capacity Payment
Schedule in Section 1.8, then the formula set forth in Section
8.1.1 shall be computed with D equal to the appropriate time
differentiated capacity price from the Standard Offer No. 1
Capacity Payment Schedule for the Contract Term.
8.1.1.2 If Seller specifies the Forecast of Annual As-Available
Capacity Payment Schedule in Section 1.8, the formula set
forth in Section 8.1.1 shall be computed as follows:
a. During the First Period of the Contract Term, D shall
equal the appropriate time differentiated capacity
price from the Forecast of Annual As-Available
Capacity Payment Schedule.
b. During the Second Period of the Contract Term, the
formula shall be computed with D equal to the
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appropriate time differentiated capacity price from
Standard Offer No. 1 Capacity Payment Schedule, but
not less than the greater of (i) the appropriate time
differentiated capacity price from the Forecast of
Annual As-Available Capacity Payment Schedule for the
last year of the First Period, or (ii) the appropriate
time differentiated capacity price from the Standard
Offer No. 1 Capacity Payment Schedule for the first
year of the Second Period.
8.1.2 Capacity Payment Option B--Firm Capacity Purchase If Seller
selects Capacity Payment Option B, Seller shall provide to
Edison for the Contract Term the Contract Capacity specified
in Section 1.3, or as adjusted pursuant to Section 8.1.2.6,
and Seller shall be paid as follows:
8.1.2.1 If Seller meets the performance requirements set forth in
Section 8.1.2.2, Seller shall be paid a Monthly Capacity
Payment, beginning from the date of Firm Operation equal to the
sum of the on-peak, mid-peak and off-peak Capacity Period
Payments. Each capacity
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period payment is calculated pursuant to the following
formula:
Monthly Capacity Period = A x B x C x D
Payment
Where A = Contract Capacity Price specified in Section 1.8
based on the Standard Offer No. 2 Capacity Payment
Schedule as approved by the Commission and in
effect on the date of the execution of this
Agreement.
B = Conversion factors to convert annual capacity
prices to monthly payments by time of delivery as
specified in Standard Offer No. 2 Capacity Payment
Schedule and subject to periodic modifications as
approved by the Commission.
C = Contract Capacity specified in Section 1.3.
D = Period Performance Factor, not to exceed 1.0,
calculated as follows: [Period kWh Purchased by
Edison (Limited by the Level of Contract
Period Performance Factor = Capacity)]
-------------------------------------------------
(0.8 x Contract Capacity x (Period
Hours minus Maintenance
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Hours Allowed in Section 4.5.))
8.1.2.2 Performance Requirements
To receive the Monthly Capacity Payment in Section 8.1.2.1,
Seller shall provide the Contract Capacity in each Peak Month
for all on-peak hours as such peak hours are defined in
Edison's Tariff Schedule No. TOU-8 on file with the
Commission, except that Seller is entitled to a 20% allowance
for Forced Outages for each Peak Month. Seller shall not be
subject to such performance requirements for the remaining
hours of the year.
a. If Seller fails to meet the requirements specified in
this Section 8.1.2.2, Seller, in Edison's sole
discretion, may be placed on probation for a period
not to exceed 15 months. If Seller fails to meet the
requirements specified in this Section 8.1.2.2 during
the probationary period, Edison may derate the
Contract Capacity to the greater of the capacity
actually delivered during the probationary period, or
the capacity at which Seller can
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reasonably meet such requirements. A reduction in
Contract Capacity as a result of this Section 8.1.2.2
shall be subject to Section 8.1.2.5.
b. If Seller fails to meet the requirements set forth in
Section 8.1.2.2 due to a Forced Outage on either the
Edison system, or the Interconnecting Utility System,
or a request to reduce or curtail delivery under
Section 8.4, Edison shall continue Monthly Capacity
Payments pursuant to Capacity Payment Option B. The
Contract Capacity curtailed shall be treated the same
as allowable scheduled maintenance outages in the
calculation of the Monthly Capacity Payment.
8.1.2.3 If Seller is unable to provide Contract Capacity due to
Uncontrollable Forces, Edison shall continue Monthly Capacity
Payments pursuant to Capacity Payment Option B for 90 days
from the occurrence of the Uncontrollable Force. Monthly
Capacity Payments payable during a
28
period of interruption or reduction by reason of an
Uncontrollable Force shall be treated the same as allowable
scheduled maintenance outages.
8.1.2.4 Capacity Bonus Payment
For Capacity Payment Option B, Seller may receive a Capacity
Bonus Payment as follows:
a. Bonus During Peak Months
For a Peak Month, Seller shall receive a Capacity Bonus
Payment if (i) the requirements set forth in Section
8.1.2.2 have been met, and (ii) the on-peak capacity
factor exceeds 85%.
b. Bonus During Non-Peak Months
For a non-peak month, Seller shall receive a Capacity
Bonus Payment if (i) the requirements set forth in
Section 8.1.2.2 have been met, (ii) the on-peak capacity
factor for each Peak Month during the year was at least
85%, and (iii) the on-peak capacity factor for the non
-peak month exceeds 85%.
c. For any eligible month, the Capacity Bonus Payment
shall be calculated as follows:
29
Capacity Bonus Payment = A x B x C x D
Where A = (1.2 x On-Peak Capacity Factor)-
1.02
Where the On-Peak Capacity Factor, not to exceed 1.0, is
calculated as follows:
[Period kWh Purchased by Edison
On-Peak Capacity Factor = (Limited by the Level of Contract
Capacity)]
-------------------------------------------
[(Contract Capacity) x (Period Hours minus
Maintenance Hours Allowed in
Section 4.5)]
B = Contract Capacity Price specified in
Section 1.8 for Capacity Payment
Option B
C = 1/12
D = Contract Capacity specified in Section 1.3
d. When Seller is entitled to receive a Capacity Bonus
Payment, the Monthly Capacity Payment shall be the sum
of the Monthly Capacity Payment pursuant to Section
8.1.2.1. and the Monthly Capacity Bonus Payment pursuant
to this Section 8.1.2.4.
8.1.2.5 Capacity Reduction
a. Seller may reduce the Contract Capacity specified in
Section 1.3,
30
provided that Seller gives Edison prior written notice
for a period determined by the amount of Contract
Capacity reduced as follows:
Amount of Contract Length of
Capacity Reduced Notice Required
------------------ ---------------
25,000 kW or under 12 months
25,001 - 50,000 kW 36 months
50,001 - 100,000 kW 48 months
over 100,000 kW 60 months
b. Seller shall refund to Edison, with interest at the
current published Federal Reserve Board three months
prime commercial paper rate an amount equal to the
difference between (i) the accumulated Monthly
Capacity Payments paid by Edison pursuant to Capacity
Payment Option B up to the time the reduction notice
is received by Edison, and (ii) the total capacity
payments which Edison would have paid if based on the
Adjusted Capacity Price.
c. From the date the reduction notice is received to the
date of actual
31
capacity reduction, Edison shall make capacity
payments based on the Adjusted Capacity Price for the
amount of Contract Capacity being reduced.
d. Seller may reduce Contract Capacity without the notice
prescribed in Section 8.1.2.5(a), provided that Seller
shall refund to Edison the amount specified in Section
8.1.2.5(b) and an amount equal to: (i) the amount of
Contract Capacity being reduced, times (ii) the
difference between the Current Capacity Price and the
Contract Capacity Price, times (iii) the number of
years and fractions thereof (not less than one year)
by which the Seller has been deficient in giving the
prescribed notice. If the Current Capacity Price is
less than the Contract Capacity Price, only payment
under Section 8.1.2.5(b) shall be due to Edison.
8.1.2.6 The Parties may agree in writing at any time to adjust the
Contract Capacity. Seller may reduce the Contract Capacity
32
pursuant to Section 8.1.2.5. Seller may increase the Contract
Capacity with Edison's approval and thereafter receive payment
for the increased capacity in accordance with the Contract
Capacity Price for the Capacity Payment Option selected by
Seller in Section 1.8 for the remaining Contract Term.
8.1.2.7 For Capacity Payment Option B, Seller shall be paid for
capacity in excess of Contract Capacity based on the
as-available capacity price in Standard Offer No. 1 Capacity
Payment Schedule, as updated and approved by the Commission.
8.2 Energy Payments - First Period
During the First Period of the Contract Term, Seller shall be paid a
Monthly Energy Payment for the Energy delivered by the Seller and
purchased by Edison at the Point of Interconnection equal to 90% of
the payment provisions specified in this Section 8.2, pursuant to the
Energy Payment Option selected by the Seller in Section 1.9.
8.2.1 Energy Payment Option 1 -- Forecast
of Annual Marginal Cost of Energy.
If Seller selects Energy Payment Option 1, then during the First
Period of the Contract
33
Term, Seller shall be paid a Monthly Energy Payment for Energy
delivered by Seller and purchased by Edison during each month in
the First Period of the Contract Term pursuant to the following
formula:
Monthly Energy Payment = [(A x D) + (B x D) + (C x D)] x E x F
Where A = kWh purchased by
Edison during on-peak
periods defined in
Edison's Tariff Schedule
No. TOU-8.
B = kWh purchased by Edison
during mid-peak periods
defined in Edison's
Tariff Schedule No.
TOU-8.
C = kWh purchased by Edison
during off-peak periods
defined in Edison's
Tariff Schedule No.
TOU-8.
D = The sum of:
(i) the appropriate time
differentiated energy
price from the Forecast
of Annual Marginal Cost
of Energy, multiplied by
the decimal equivalent of
the percentage of the
forecast specified in
Section 1.9, and (ii) the
appropriate time
differentiated energy
price from Edison's
published avoided cost of
energy
34
multiplied by the
decimal equivalent of the
percentage of the
published energy price
specified in Section 1.9.
E = Energy Loss Adjustment
Factor for Remote
Generating Sites1
F = 1/1.032
8.2.2 Energy Payment Option 2 -- Levelized Forecast of
Marginal Cost of Energy. If Seller selects Energy
Payment Option 2, then during the First Period of the
Contract Term, Seller shall be paid a Monthly Energy
Payment for Energy delivered by Seller and purchased by
Edison each month during the First Period of the
Contract Term pursuant to the following formula:
Monthly Energy Payment = [(A x D) + (B x D) + (C x D)] x E x F]
Where A = kWh purchased by
Edison during on-peak
periods defined in
Edison's Tariff Schedule
No. TOU-8.
B = kWh purchased by Edison
during mid-peak periods
defined in Edison's
Tariff Schedule No.
TOU-8.
- ----------
1 The Energy Loss Adjustment Factor for Remote Generating Sites shall be
1.0, subject to adjustment by Commission orders and rulings.
35
C = kWh purchased by Edison
during off-peak periods
defined in Edison's
Tariff Schedule No.
TOU-8.
D = The sum of:
(i) the appropriate time
differentiated energy
price from the Levelized
Forecast of Marginal Cost
of Energy, for the First
Period of the Contract
Term multiplied by the
decimal equivalent of the
percentage of the
levelized forecast
specified in Section 1.9,
and (ii) the appropriate
time differentiated
energy price from
Edison's published
avoided cost of energy
multiplied by the decimal
equivalent of the
percentage of the
published energy price
specified in Section 1.9.
E = Energy Loss Adjustment
Factor for Remote
Generating Sites2
F = 1/1.032
8.2.2.1 Performance Requirement for Energy Payment Option 2
- ---------
2 The Energy Loss Adjustment Factor for Remote Generating Sites shall be
1.0, subject to adjustment by Commission orders and rulings.
36
During the First Period when the annual forecast referred to in
Section 8.2.1 is greater than the levelized forecast referred to
in Section 8.2.2, Seller shall deliver to Edison at least 70
percent of the average annual kWh delivered to Edison during
those previous periods when the levelized forecast referred to
in Section 8.2.2 is greater than the annual forecast referred to
in Section 8.2.1. If Seller does not meet the performance
requirements of this Section 8.2.2.1, Seller shall be subject to
Section 8.5.
8.3 Energy Payments - Second Period
During the Second Period of the Contract Term, Seller shall be paid a
Monthly Energy Payment for Energy delivered by Seller and purchased by
Edison at the Point of Interconnection at a rate equal to 90% of
Edison's published avoided cost of energy as updated and authorized by
the Commission, pursuant to the following formula:
Monthly Energy Payment = kWh purchased by Edison for each on-peak,
mid-peak, and off-peak time period
defined in Edison's Tariff
Schedule No. TOU-8
37
x Edison's published avoided cost of
energy by time of delivery for each
time period
x Energy Loss Adjustment Factor for Remote
Generating Sites3
8.4 Edison shall not be obligated to accept or pay for electrical
energy from the Project, and may request Seller whose Generating
Facility is one (1) MW or greater to discontinue or reduce delivery of
electrical energy, for not more than 300 hours annually during off-peak
hours when (i) purchases would result in costs greater than those which
Edison would incur if it did not purchase electrical energy from Seller
but instead utilized an equivalent amount of electrical energy generated
from another Edison source, or (ii) the Edison Electric System
demand would require that Edison hydro-energy be spilled to reduce
generation.
8.5 Energy Payment Refund
If Seller elects Energy Payment Option 2, Seller shall be subject to the
following:
8.5.1 If Seller fails to perform the Contract obligations for any
reason during the First Period of the Contract Term, or fails to
meet the performance requirements set forth in Section 8.2.2.1,
and at the time of such failure
- ---------
3 The Energy Loss Adjustment Factor for Remote Generating Sites shall be
1.0, subject to adjustment by Commission orders and rulings.
38
to perform, the net present value of the cumulative Energy
payments received by Seller pursuant to Energy Payment Option
2 exceeds the net present value of what Seller would have been
paid pursuant to Energy Payment Option 1, Seller shall make an
energy payment refund equal to the difference in such net
present values in the year in which the refund is due. The
present value calculation shall be based upon the rate of
Edison's incremental cost of capital specified in Section 1.9.
8.5.2 Not less than 90 days prior to the date Energy is first
delivered to the Point of Interconnection, Seller shall
provide and maintain a performance bond, surety bond,
performance insurance, corporate guarantee, or bank letter of
credit, satisfactory to Edison, which shall insure payment to
Edison of the Energy Payment Refund at any time during the
First Period. Edison may, in its sole discretion, accept
another form of security except that in such instance a 1-1/2
percent reduction shall then apply to the levelized forecast
referred to in Section 8.2.2 in computing payments for Energy.
Edison shall be provided with certificates evidencing Seller's
compliance with the security requirements in
39
this Section 8.5.2 which shall also include the requirement
that Edison be given 90 days prior written notice of the
expiration of such security.
8.5.3 If Seller fails to provide replacement security not less than
60 days prior to the date of expiration of existing security,
the Energy Payment Refund provided in Section 8.5 shall be
payable forthwith. Thereafter, payments for Energy shall be 100
percent of the Monthly Energy Payment provided in Section 8.2.1.
8.5.4 If Edison at any time determines the security to
be otherwise inadequate, and so notifies Seller, payments
thereafter for Energy shall be 100 percent of the Monthly
Energy Payment provided in Section 8.2.1. If within 30 days of
the date Edison gives notice of such inadequacies, Seller
satisfies Edison's security requirements, Energy Payment
Option 2 shall be reinstated. If Seller fails to satisfy
Edison's security requirements within the 30-day period, the
Energy Payment Refund provided in Section 8.5 shall be payable
forthwith.
9. PAYMENT AND BILLING PROVISIONS
9.1 For Energy and capacity purchased by Edison:
9.1.1 Edison shall mail to Seller no later than thirty days after the
end of each monthly billing
40
period (1) a statement showing the Energy and capacity delivered
to Edison during the on-peak, mid-peak and off-peak periods, as
those periods are specified in Edison's Tariff Schedule No.
TOU-8 for that monthly billing period, (2) Edison's computation
of the amount due Seller, and (3) Edison's check in payment of
said amount.
9.1.2 If the monthly payment period involves portions of two different
published Energy payment schedule periods, the monthly Energy
payment shall be prorated on the basis of the percentage
of days at each price.
9.1.3 If the payment period is less than 27 days or greater than 33
days, the capacity payment shall be prorated on the basis of the
average days per month per year.
9.1.4 If within thirty days of receipt of the statement Seller does
not make a report in writing to Edison of an error, Seller shall
be deemed to have waived any error in Edison's statement,
computation, and payment, and they shall be considered correct
and complete.
9.2 Payments Due to Contract Capacity Reduction
9.2.1 The Parties agree that the refund and payments provided in
Section 8.1.2.5 represent a fair compensation for the reasonable
losses that
41
would result from such reduction of Contract Capacity.
9.2.2 In the event of a reduction in Contract Capacity, the quantity,
in kW, by which the Contract Capacity is reduced shall be used
to calculate the refunds and payments due Edison in accordance
with Section 8.1.2.5, as applicable.
9.2.3 Edison shall provide invoices to Seller for all refunds and
payments due Edison under this section which shall be due within
60 days.
9.2.4 If Seller does not make payments as required in Section 9.2.3,
Edison shall have the right to offset any amounts due it against
any present or future payments due Seller and may pursue any
other remedies available to Edison as a result of Seller's
failure to perform.
9.3 Energy Payment Refund
Energy Payment Refund is immediately due and payable upon Seller's failure
to perform the contract obligations as specified in Section 8.5.
10. TAXES
10.1 Seller shall pay ad valorem taxes and other taxes properly attributable to
the Project. If such taxes are assessed or levied against Edison, Seller
shall pay Edison for such assessment or levy.
10.2 Seller shall pay ad valorem taxes and other taxes properly attributed to
land, land rights, or
42
interest in land for the Project. If such taxes assessed or levied against
Edison, Seller shall pay Edison for such assessment or levy.
10.3 If the Interconnection Facilities are owned by Edison, Edison shall pay ad
valorem taxes and other taxes properly attributed to said facilities. If
such taxes are assessed or levied against Seller, Edison shall pay
Seller for such assessment or levy.
10.4 Seller or Edison shall provide information concerning the Project to any
requesting taxing authority.
11. TERMINATION
This Contract shall terminate if Firm Operation does not occur within
5 years of the date of Contract execution.
12. SALE OF GENERATING FACILITY
12.1 If Seller desires to sell the Generating Facility, Seller shall promptly
offer to Edison, or any entity designated by Edison in its sole
discretion, the right to purchase the Generating Facility. Edison, or any
such entity designated by Edison, shall have up to sixty days
following the offer to accept Seller's offer or reach agreement with
Seller.
12.2 If the Parties are unable to reach a satisfactory agreement within sixty
days following the offer pursuant to Section 12.1, and the Generating
Facility is offered to any third party or parties, Edison, or any such
entity designated by Edison, has the right
43
for thirty days following each offer to agree to purchase the Generating
Facility under the same terms and conditions, if such terms and conditions
are better to Edison than those offered in Section 12.1. Any offer to sell
made more than two years after Edison's failure to accept a previous offer
to sell under Section 12.1, shall again be subject to the terms of
Sections 12.1 and 12.2.
12.3 Notwithstanding the foregoing, Seller shall have the right at any time to
sell or transfer the Generating Facility to an affiliate of Seller without
giving rise to any right of first refusal of Edison. An "affiliate" of
Seller shall mean a Party's parent, a Party's subsidiary, or any
company of which a Party's parent is a parent. A "parent" shall mean a
company which owns directly or indirectly not less than 51% of the shares
entitled to vote in a election of directors of another company.
13. ABANDONMENT OF PROJECT
13.1 The Generating Facility shall be deemed to be abandoned if Seller
discontinues operation of the Generating Facility with the intent that
such discontinuation be permanent. Such intent shall be conclusively
presumed by either (i) Seller's notice to Edison of such intent, or (ii)
Seller's operation of the Generating Facility in such a manner that
no Energy is generated therefrom for 200 consecutive
44
days during any period after Firm Operation of the first generating unit,
unless otherwise agreed to in writing by the Parties. If the Project is
prevented from generating Energy due to an Uncontrollable Force, then such
period shall be extended for the duration of the Uncontrollable
Force, not to exceed one year.
13.2 If Seller abandons the Generating Facility during the term of this
Agreement, Edison, or any entity designated by Edison in its sole
discretion, shall have the right to purchase the Generating Facility
pursuant to the provisions of Section 12.
14. LIABILITY
14.1 Each Party (First Party) releases the other Party (Second Party), its
directors, officers, employees and agents from any loss, damage, claim,
cost, charge, or expense of any kind or nature (including any direct,
indirect or consequential loss, damage, claim, cost, charge, or
expense), including attorney's fees and other costs of litigation,
incurred by the First Party in connection with damage to property of the
First Party caused by or arising out of the Second Party's construction,
engineering, repair, supervision, inspection, testing, protection,
operation, maintenance, replacement, reconstruction, use or ownership of
it facilities, to the extent that such loss, damage, claim, cost, charge,
or expense is
45
caused by the negligence of Second Party, its directors, officers,
employees, agents, or any person or entity whose negligence would be
imputed to Second Party.
14.2 Each Party shall indemnify and hold harmless the other Party, its
directors, officers, and employees or agents from and against any loss,
damage, claim, cost, charge, or expense of any kind or nature (including
direct, indirect or consequential loss, damage, claim, cost, charge, or
expense), including attorney's fees and other costs of litigation,
incurred by the other Party in connection with the injury to or death of
any person or damage to property of a third party arising out of the
indemnifying Party's construction, engineering, repair, supervision,
inspection, testing, protection, operation, maintenance, replacement,
reconstruction, use, or ownership of its facilities, to the extent that
such loss, damage, claim, cost, charge, or expense is caused by the
negligence of the indemnifying Party, its directors, officers,
employees, agents, or any person or entity whose negligence would be
imputed to the indemnifying Party; provided, however, that each Party
shall be solely responsible for and shall bear all cost of claims brought
by its contractors or its own employees and shall indemnify and hold
harmless the
46
other Party for any such costs including costs arising out of any
workers compensation law. Seller releases and shall defend and indemnify
Edison from, any claim, cost, loss, damage, or liability arising from
any contrary representation concerning the effect of Edison's review of
the design, construction, operation, or maintenance of the Project.
14.3 The provisions of this Section 14 shall not be construed so as to
relieve any insurer of its obligations to pay any insurance claims in
accordance with the provisions of any valid insurance policy.
14.4 Neither Party shall be indemnified by the other Party under Section 14.2
for its liability or loss resulting from its sole negligence or willful
misconduct.
15. INSURANCE
15.1 Until Contract is terminated, Seller shall obtain and maintain in force
as hereinafter provided comprehensive general liability insurance,
including contractual liability coverage, with a combined single limit
of not less than $1,000,000 for each occurrence. The insurance
carrier or carriers and form of policy shall be subject to review and
approval by Edison.
15.2 Prior to the date Seller's Generating Facility first delivers electrical
energy to the Point of
47
Interconnection, Seller shall (i) furnish certificate of insurance to
Edison, which certificate shall provide that such insurance shall not be
terminated nor expire except on thirty days prior written notice to
Edison, (ii) maintain such insurance in effect for so long as Seller's
Generating Facility is delivering electrical energy to the Point of
Interconnection, and (iii) furnish to Edison an additional insured
endorsement with respect to such insurance in substantially the
following form: "In consideration of the premium charged, Southern
California Edison Company (Edison) is named as additional insured
with respect to all liabilities arising out of Seller's use and
ownership of Seller's Generating Facility. "The inclusion of more than
one insured under this policy shall not operate to impair the rights of
one insured against another insured and the coverages afforded by this
policy will apply as though separate policies had been issued to
each insured. The inclusion of more than one insured will not, however,
operate to increase the limit of the carrier's liability. Edison will
not, by reason of its inclusion under this policy, incur liability to
the insurance carrier for payment of premium for this policy.
"Any other insurance carried by Edison which may be applicable shall be
deemed excess insurance and
48
Seller's insurance primary for all purposes despite any conflicting
provisions in Seller's policy to the contrary."
If the requirement of Section 15.2 (iii) prevents Seller from obtaining
the insurance required in Section 15.1 then upon written notification by
Seller to Edison, Section 15.2 (iii) shall be waived.
15.3 If Seller fails to comply with the provisions of this Section 15, Seller
shall, at its own cost, defend, indemnify, and hold harmless Edison, its
directors, officers, employees, agents, assigns, and successors in
interest from and against any and all loss, damage, claim, cost, charge,
or expense of any kind or nature (including direct, indirect or
consequential loss, damage, claim, cost, charge, or expense, including
attorney's fees and other costs of litigation) resulting from the death
or injury to any person or damage to any property, including
the personnel and property of Edison, to the extent that Edison would
have been protected had Seller complied with all of the provisions of
this Section 15.
16. UNCONTROLLABLE FORCES
16.1 Neither Party shall be considered to be in default in the performance of
any of the agreements contained in this Contract, except for obligations
to pay money, when and to the extent failure of performance shall be
caused by an Uncontrollable Force.
49
16.2 If either Party because of an Uncontrollable Force is rendered wholly or
partly unable to perform its obligations under this Contract, the Party
shall be excused from whatever performance is affected by the
Uncontrollable Force to the extent so affected provided that:
(1) the non-performing Party, within two weeks after the occurrence of
the Uncontrollable Force, gives the other Party written notice
describing the particulars of the occurrence,
(2) the suspension of performance is of no greater scope and of
no longer duration than is required by the Uncontrollable Force,
(3) the non-performing Party uses its best efforts to remedy its
inability to perform (this subsection shall not require the
settlement of any strike, walkout, lockout or other labor dispute
on terms which, in the sole judgment of the Party involved in the
dispute, are contrary to its interest. It is understood and agreed
that the settlement of strikes, walkouts, lockouts or other labor
disputes shall be at the sole discretion of the Party having the
difficulty),
(4) when the non-performing Party is able to resume performance
of its obligations under this Contract, that Party shall give the
other Party written notice to that effect, and
50
(5) capacity payments during such periods of Uncontrollable Force on
Seller's party shall be governed by Section 8.1.2.3.
16.3 In the event that either Party's ability to perform cannot be corrected
when the Uncontrollable Force is caused by the actions or inactions of
legislative, judicial or regulatory agencies or other proper authority,
this Contract may be amended to comply with the legal or regulatory
change which caused the nonperformance. If a loss of Qualifying Facility
status occurs due to an Uncontrollable Force and Seller fails to make
the changes necessary to maintain its Qualifying Facility status, the
Seller shall compensate Edison for any economic detriment incurred by
Edison as a result of such failure.
16.4 The Interconnecting Utility's facilities used in delivering the
electrical energy from the Point of Interconnection shall be covered by
the provisions of this Section 16.
17. NON-DEDICATION OF FACILITIES
Neither Party, by this Contract, dedicates any part of its faci1ities
involved in this Project to the public or to the service provided
under the Contract, and such service shall cease upon termination of
the Contract.
51
18. PRIORITY OF DOCUMENTS
If there is a conflict between this document and any Appendix, the
provisions of this document shall govern. Each Party shall notify the
other immediately upon the determination of the existence of any such
conflict.
19. NOTICES AND CORRESPONDENCE
All notices and correspondence pertaining to this Contract shall be
in writing and shall be sufficient if delivered in person or sent by
certified mail, postage prepaid, return receipt requested, to Seller
as specified in Section 1.1, or to Edison as follows:
Southern California Edison Company
Post Office Box 800
Rosemead, California 91770
Attention: Secretary
All notices sent pursuant to this Section 19 shall be effective when
received, and each Party shall be entitled to specify as its proper
address any other address in the United States upon written notice to
the other Party.
20. PREVIOUS COMMUNICATIONS
This Contract contains the entire agreement and understanding between
the Parties, their agents, and employees as to the subject matter of
this contract, and merges and supersedes all prior agreements,
commitments, representations, and discussions between the Parties. No
Party shall be bound to any other obligations, conditions, or
representations with respect to the subject matter of this Contract.
52
21. THIRD PARTY BENEFICIARIES
This Contract is for the sole benefit of the Parties and shall not be
construed as granting any rights to any person or entity other than
the Parties or imposing obligations on either Party to any person or
entity other than the Parties.
22. NON-WAIVER
None of the provisions of the Contract shall be considered waived by
either Party except when such waiver is given in writing. The failure
of either Edison or Seller to insist on any one or more instances
upon strict performance of any of the provisions of the Contract or
to take advantage of any of its rights hereunder shall not be
construed as a waiver of any such provisions or the relinquishment of
any such rights for the future, but the same shall continue to remain
in full force and effect.
23. DISPUTES
23.1 Any dispute arising between the Parties relating to interpretation of
the provisions of this Contract or to performance of the Parties
hereunder, other than matters which may not be settled without the
consent of an involved insurance company, shall be reduced to writing
stating the complaint and proposed solution and submitted to the
appropriate Edison manager, whose interpretation and decision thereon
shall be incorporated into a written document which shall specify
Edison's position and that it is the final decision of such manager. A
copy of such document
53
shall be furnished to Seller within ten days following the receipt of
Seller's written complaint.
23.2 The decision of such manager pursuant to Section 23.1 shall be final and
conclusive from the date of receipt of such copy by the complaining
Party, unless within thirty days Seller furnishes a written appeal to
such manager. Following receipt of such appeal, a joint hearing shall be
held within fifteen days of said appeal, at which time the Parties shall
each be afforded an opportunity to present evidence in support of their
respective positions. Such joint hearing shall be conducted by one
authorized representative of Seller and one authorized representative
of Edison and other necessary persons. Pending final decision of a
dispute hereunder, the Parties shall proceed diligently with the
performance of their obligations under this Contract and in accordance
with Edison's position pursuant to Section 23.1.
23.3 The final decision by the Parties' authorized representatives shall be
made within fifteen days after presentation of all evidence affecting
the dispute, and shall be reduced to writing. The decision shall be
final and conclusive.
23.4 If the authorized representatives cannot reach a final decision within
the fifteen-day period, any remedies which are provided by law may be
pursued.
54
24. SUCCESSORS AND ASSIGNS
Neither Party shall voluntarily assign its rights nor delegate its
duties under this Contract, or any part of such rights or duties,
without the written consent of the other Party, except in connection
with the sale or merger of a substantial portion of its properties.
Any such assignment or delegation made without such written consent
shall be null and void. Consent for assignment shall not be withheld
unreasonably. Such assignment shall include, unless otherwise
specified therein, all of Seller's rights to any refunds which might
become due under this Contract. Seller may assign all or any part of
its interest under this Contract to a financing institution to
facilitate financing for the Project by the Seller.
25. EFFECT OF SECTION HEADINGS
Section headings appearing in this Agreement are inserted for
convenience only, and shall not be construed as interpretations of
text.
26. TRANSMISSION
26.1 Edison shall use its best efforts to contract with third parties in
order to secure the least expensive transmission path(s) or
arrangement(s) for the transmission of the electric energy from the
Project to the Point of Interconnection. Edison shall be responsible
for all costs associated with such transmission of electric energy from
the Project to the Point of Interconnection.
55
26.2 If Edison, using its best efforts, is unable to secure firm transmission
service or equivalent arrangements from third parties which are required
to transmit the electric energy from the Project to the Point of
Interconnection, then Edison shall not be liable to the Seller for any
damages arising from Edison's failure to secure said transmission
service or arrangements nor will Edison be required to purchase electric
energy which is not delivered or capacity which is not made available at
the Point of Interconnection.
26.3 Transmission Account
26.3.1 A Transmission Account ("Account") will be established to
offset, as necessary, transmission service costs which Edison
might incur as a result of the Project's failure to achieve a
Monthly Capacity Factor of 80%.
26.3.2 Transmission Surcharges ("Surcharge") will be placed into the
Account. The Surcharge will be 1% of the Energy and capacity
payments as specified in Section 8. The Surcharge will start on
the date of initial delivery and will continue until the Account
balance is $25,000 including Surcharge and interest, if
applicable. When the Account balance reaches $25,000, the
Surcharge will be curtailed and
56
interest on the Account, if any, will be paid to the Seller.
26.3.3 Transmission Deductions ("Deductions") will be made when the
Project's Monthly Capacity Factor drops below 80%. The
Deductions will be payed to Edison to offset specific Project
related transmission service costs which Edison has incurred as
a direct result of the Project's failure to achieve the 80%
Monthly Capacity Factor. The procedure for calculating the
Deductions will be prepared by Edison's Operating
Representative and reviewed by the Seller's Operating
Representative prior to the date of initial delivery. This
procedure may be modified from time to time, as necessary.
26.3.4 The Surcharge will be in effect at any time during the Contract
Term when the Account balance drops below $25,000.
26.3.5 In the event that the Deductions exceed the Account balance, the
remaining unpaid Deductions shall be paid by the Seller to
Edison within 30 calendar days of the Seller's receipt of
Edison's notice to pay said unpaid Deductions. If an Account
balance exists at the date the Contract terminated, then said
balance shall be paid
57
to the Seller within 30 calendar days of termination.
27. AMENDMENT
If at any time during the term of this Agreement a change in
circumstances not anticipated at the time this Agreement was executed
significantly alters the rights or obligations of either Party, the
terms of the Agreement which are directly affected by the change
shall be amended by mutual agreement of Parties.
28. GOVERNING LAW
This Contract shall be interpreted, governed, and construed under the
laws of the State of California as if executed and to be performed
wholly within the State of California.
29. CONFIDENTIALITY
29.1 Except as provided herein, the Parties shall hold all information
related to or received pursuant to this Contract as confidential.
29.2 Except as provided in Section 29.3, neither Party shall disclose any
part nor the whole of this Contract to any third Party without the
express written consent of the other Party; such consent shall not be
unreasonably withheld.
29.3 From time to time governmental and/or regulatory agencies may request
disclosure of the Contract or Contract-related information from either
Party or both Parties and if such is the case either Party or both
Parties may consent to such disclosure provided
58
that (i) the requestor(s) be notified by the disclosing Party that the
information being released is confidential and that (ii) the disclosing
Party inform the other Party, in writing, as to the nature of the
information disclosed and to whom disclosed.
30. MULTIPLE ORIGINALS
This Contract is executed in two counterparts, each of which shall be
deemed an original.
SIGNATURES
IN WITNESS WHEREOF, the Parties hereto have executed this Contract
this 22nd of February, 1984.
SOUTHERN CALIFORNIA EDISON COMPANY
By: /s/ Edward A. Myers, Jr.
----------------------------
Name: Edward A. Myers, Jr.
--------------------
Title: Vice President
--------------------
IMPERIAL ENERGY CORPORATION
By: /s/ Michael B. Malvin
-----------------------------
Name: Michael B. Malvin
---------------------
Title: President
--------------------
59
APPENDIX A
SOUTHERN CALIFORNIA EDISON COMPANY
LONG-TERM STANDARD OFFER
CAPACITY PAYMENT SCHEDULE -
FORECAST OF ANNUAL AS-AVAILABLE CAPACITY
Line As Available Capacity2
No. Year (S/kW-year)
- --------------------------------------------------------------------------
1 1983 70
2 1984 76
3 1985 81
4 1986 87
5 1987 94
6 1988 101
7 1989 109
8 1990 117
9 1991 126
10 1992 148
11 1993 158
12 1994 169
13 1995 180
14 1996 194
15 1997 206
- ----------
1 This forecast to be used in conjunction with Capacity Payment Option A.
2 The annual as-available capacity (S/kW-yr) will be converted to a
seasonal time-of-delivery ((cent)/kWh) value that is consistent with
as-available time-of-delivery rates current authorized by the
Commission for Avoided As-Available Capacity.
A-1
APPENDIX B
SOUTHERN CALIFORNIA EDISON COMPANY
LONG-TERM STANDARD OFFER
ENERGY PAYMENT SCHEDULE -
FORECAST OF ANNUAL MARGINAL COST OF ENERGY1
Line Annual Marginal Cost of Energy2
No. Year ((cent)/kWh)
--------------------------------------------------------------------------
1 1983 5.3
2 1984 5.6
3 1985 5.7
4 1986 6.0
5 1987 6.4
6 1988 6.9
7 1989 7.6
8 1990 8.1
9 1991 8.6
10 1992 9.3
11 1993 10.1
12 1994 10.9
13 1995 11.8
14 1996 12.6
15 1997 13.6
- ----------
1 This forecast to be used in conjunction with Energy Payment Option 1.
2 The annual energy payments in the table will be converted to seasonal
time-of-delivery energy-payment rates that are consistent with the
time-of-delivery rates currently authorized by the Commission for
Avoided Energy Cost Payments.
B-1
APPENDIX C
SOUTHERN CALIFORNIA EDISON COMPANY
LONG-TERM STANDARD OFFER
ENERGY PAYMENT SCHEDULE -
LEVELIZED FORECAST OF MARGINAL COST OF ENERGY(1)
5-Year
Initial Levelized Levelized
Line Year of Forecast Forecast
No. Delivery ((cent)/kWh) ((cent)/KWh)
- --------------------------------------------------------------------
1 1983 5.7 6.5
2 1984 6.0 6.9
3 1985 6.4 7.3
4 1986 6.8 7.9
5 1987 7.3 8.5
6 1988 7.9 9.1
- ----------
1 Levelized Forecast to be used in conjunction with Energy Payment
Option 2.
2 The annual energy payments in the table will be converted to
seasonal time-of-delivery energy payment rates that are consistent
with the time-of-delivery rates currently authorized by the
Commission for Avoided Energy Cost Payments.
C-1
AMENDMENT NO. 1
TO
POWER PURCHASE CONTRACT
BETWEEN
SOUTHERN CALIFORNIA EDISON COMPANY
AND
IMPERIAL ENERGY CORPORATION
AMENDMENT NO. 1 TO
POWER PURCHASE CONTRACT BETWEEN
SOUTHERN CALIFORNIA EDISON COMPANY AND
IMPERIAL ENERGY CORPORATION
1. Parties
The Parties to this Amendment No. 1 to the Power Purchase Contract
between Southern California Edison Company and Imperial Energy
Corporation, executed on February 22, 1984, hereinafter referred to
as "Amendment No. 1", are Imperial Energy Corporation, a California
corporation, hereinafter referred to as "Seller", and Southern
California Edison Company, a California corporation, hereinafter
referred to as "Edison", hereinafter sometimes referred to
individually as "Party" and collectively as "Parties".
2. Recitals
2.1 On February 22, 1984, Edison and Seller of executed the
Power Purchase Contract to provide the terms and conditions
for the sale by Seller and purchase by Edison of electrical
power delivered by Seller to Edison at the Point of
Interconnection from Seller's "Salton Sea Unit 1" generating
facility, located at Niland, California.
2.2 The Parties desire to amend the Power Purchase Contract to
modify the terms of: (i) Payments for Energy; (ii) Contract
Capacity of the Generating Facility; (iii) Successors and
Assigns; and (iv) Transmission.
1
3. Agreement
The Parties agree to the following:
4. Effective Date
This Amendment No. 1 shall become effective upon execution by the
Parties.
5. Amendment to Section 8.1.2.6
Add the designation "a." to the existing paragraph, and add the
following paragraph "b":
b. Edison consents to the Seller increasing the
Contract Capacity from the amount
specified in Section 1.3 to any amount up
to 14,000 kW provided that:
(i) The Seller provides a written notice to
Edison at least 12 months prior to
the proposed increase in the Contract
Capacity;
(ii) The Date of Firm Operation for the
proposed increased Contract Capacity
shall occur no later than five years
after the date of Contract execution;
and
(iii) The 230 kV interconnection between the
Edison and Imperial Irrigation District
electric systems has been completed and
is in service prior to the Date of Firm
Operation for the proposed increased
Contract Capacity."
2
6. Amendment to Section 8.2.1:
6.1 The formula for calculating the Monthly Energy Payment is
deleted in its entirety and replaced
with the following:
"Monthly Energy Payment = ( (AxD)+(BxD)+(CxD) ) x E"
6.2 The definition of "F" is deleted in its entirety.
7. Amendment to Section 8.2.2
7.1 The formula for calculating the Monthly Energy Payment is
deleted in its entirety and replaced
with the following:
"Monthly Energy Payment = ( (AxD)+(BxD)+(CxD) ) x E"
7.2 The definition of "F" is deleted in entirety.
8. Amendment to Section 24
8.1 The first sentence in Section 24 is deleted in its entirety
and replaced with the following: "Neither Party shall
voluntary assign its rights nor delegate its duties under
this Contract, or any part of such rights or duties, without
the written consent of the other party, except in connection
with the sale, exchange or merger of a substantial portion
of its properties."
8.2 The last sentence in Section 24 is deleted in its entirety
and replaced with the following: "Notwithstanding the
foregoing, (i) Seller may assign all or part of its interest
under this Contract to a financial institution to facilitate
financing for the Project by the Seller, and (ii) Seller may
assign its
3
interest under this Contract to a partnership of
which Seller, or its permitted successor or assign, is the
general partner, provided that the assignee assumes all of
Seller's obligations hereunder and that no such assignment
shall relieve Seller of any such obligation."
9. Amendment to Section 26
Add the following to Section 26:
26.4 In the event the Contract Capacity specified in
Section 1.3 is increased pursuant to the provisions
of Section 8.1.2.6(b), Edison shall have the option
to select the transmission plan described in either
Section 26.4.l or Section 26.4.2. Edison shall
notify the Seller in writing of its selection under
this Section 26.4 at least three (3) months prior
to date of Firm Operation.
26.4.1 Transmission Option 1
If Edison selects the transmission
option specified in this Section
26.4.1, the transmission
arrangements associated with the
transmission of the electrical
energy from the Project to the
Point of Interconnection shall be
pursuant to the provisions of
Sections 26.1, 26.2, and 26.3.
4
26.4.2 Transmission Option 2
If Edison selects the transmission
option specified in this Section
26.4.2, then:
26.4.2.1 Edison shall endeavor to make
arrangements with Interconnecting
Utilities for the necessary
transmission of the electrical
energy from the Project to the Point
of Interconnection. Seller
shall be responsible for all costs
associated with such transmission of
electrical energy, commencing on the
date of Firm Operation of the
proposed increased Contract
Capacity, as described in Section
8.1.2.6(b), including the costs of
transmission losses from the Project
to the Point of Interconnection as
provided for in the transmission
arrangements between Edison and the
Interconnecting Utilities.
5
26.4.2.2 If Edison is unable to secure
satisfactory firm transmission
service or equivalent
arrangements from Interconnecting
Utilities which are required to
transmit the electrical energy from
the Project to the Point of
Interconnection, at terms and
conditions satisfactory to Edison,
in its sole judgement, then Edison
shall not be liable to the
Seller for any damages arising
from Edison's failure to secure said
transmission service or arrangements
nor will Edison be required to
purchase Energy which is not
delivered or capacity which
is not made available at the Point
of Interconnection.
26.4.2.3 Commencing on the date of Firm
Operation of the proposed increased
Contract Capacity, as described in
Section 8.1.2.6(b), and extending
6
through the Contract Term, the
payments specified in Sections
8, 8.1, 8.2, and 8.3 shall be made
at 100% of their calculated
value instead of the 90% of their
calculated value as otherwise
required by those Sections.
26.4.2.4 Commencing on the date of Firm
Operation of the proposed
increased Contract Capacity,
Sections 26.1, 26.2, and 26.3
shall be inoperative.
26.4.2.5 Edison shall pay to Seller,
within 30 calendar days after the
date of Firm Operation of the
proposed increased Contract
Capacity, the balance remaining in
the Transmission Account established
under Section 26.3.
26.4.2.6 Edison shall prepare and mail
a bill to Seller for the
transmission costs, as provided for
in Section 26.4.2.1, within 30 days
of the end of each month. Seller
7
shall pay such bills within 20
calendar days of the receipt of
said bill."
10. Effect of this Amendment No. 1
Except as amended herein, all terms, covenants, and conditions
contained in the Power Purchase Contract shall remain in full force and
effect.
11. Signature Clause
The signatories hereto represent that they have been appropriately
authorized to enter into this Amendment No. 1 on behalf of the Party
for whom they sign. This Amendment No. 1 is hereby executed as of
this 13th day of November, 1984.
SOUTHERN CALIFORNIA EDISON COMPANY
By /s/ Edward A. Myers, Jr.
________________________________
Edward A. Myers, Jr.
Vice President
IMPERIAL ENERGY CORPORATION
By /s/ Michael B. Malvin
________________________________
Michael B. Malvin
President
8
AMENDMENT NO. 2
TO
POWER PURCHASE CONTRACT
BETWEEN
SOUTHERN CALIFORNIA EDISON COMPANY
AND
MAGMA POWER COMPANY
AMENDMENT NO. 2 TO
POWER PURCHASE CONTRACT BETWEEN
SOUTHERN CALIFORNIA EDISON COMPANY AND
MAGMA POWER COMPANY
1. Parties
The Parties to this Amendment No. 2 to the Power Purchase Contract
between Southern California Edison Company and Imperial Energy
Corporation, executed on February 22, 1984 ("Power Purchase
Contract"), hereinafter referred to as "Amendment No. 2", are
Southern California Edison Company, a California corporation,
hereinafter referred to as "Edison", and Magma Power Company, a
Nevada corporation, hereinafter referred to as "Seller", hereinafter
sometimes referred to individually as "Party" and collectively as
"Parties".
2. Recitals
This Amendment No. 2 is made with reference to the following facts,
among others:
2.1 On February 22, 1984, Edison and Imperial Energy Corporation
("Imperial") executed the Power Purchase Contract to provide
the terms and conditions for the sale by Imperial and the
purchase by Edison of electrical power delivered by Imperial
to Edison at the Point of Interconnection from the 1,000 kW
electrical generating facility located at Niland,
California.
2.2 On June 15, 1984, Edison and Magma Electric Company executed
a Power Purchase Contract, which was amended on November 30,
1984 ("Magma Electric Contract").
1
2.3 On November 13, 1984, Edison and Imperial amended the Power
Purchase Contract to modify the terms of: (i) Payments for
Energy, (ii) Contract Capacity of the Generating Facility,
(iii) Successors and Assigns, and (iv) Transmission.
2.4 On January 22, 1986, Seller acquired an option to purchase
the geothermal leaseholds described in and pursuant to the
terms and conditions contained in the Option to Acquire
Adjacent Geothermal Leasehold ("Option") among Seller,
Imperial, Niland Power, Inc., and Salton Sea Associates.
2.5 On January 22, 1986, in conjunction with the Option,
Imperial assigned to Seller its rights, title and interest
in the Power Purchase Contract. Edison consented to said
assignment on March 12, 1986.
2.6 On January 22, 1986, in conjunction with the Option, Niland
Power, Inc. assigned to Seller its rights, title and
interest in the Power Purchase Contract between Edison and
Imperial, dated April 16, 1985 which it acquired from
Imperial on September 9, 1985 ("Imperial II Contract").
Edison consented to said assignment on March 12, 1986.
2.7 On February 10, 1986, Vulcan/BN Geothermal Power Company, of
which Seller's affiliate is a partner, declared its 29,500
kW geothermal project at Niland in firm operation. Based on
the successful development of its first project at Niland,
Seller has concluded that
2
its succeeding projects should be duplicates of that project.
2.8 On March 14, 1986, Imperial, Niland Power, Inc., and Salton
Sea Associates assigned to Seller their rights, title and
interest in those geothermal leaseholds described in and
pursuant to the terms and conditions contained in the
Option.
2.9 The aforementioned Power Purchase Contracts provide for
projects which will all be constructed and operated on
contiguous sites.
2.10 Concurrent with this Amendment No. 2, Edison, Seller and
Magma Electric Company have agreed to amend the Magma
Electric Contract and the Imperial II Contract to
effectively transfer Capacity to be purchased by Edison from
the Magma Electric Contract and the Imperial II Contract to
the Power Purchase Contract to account for the increase in
the Capacity to be produced under the Power Purchase
Contract.
2.11 Seller, based on the aforementioned facts, desires to amend
the Power Purchase Contract to reflect a change in the
rating of the Seller's Generating Facility.
3. Agreement
The Parties agree to the following.
4. Effective Date
This Amendment No. 2 shall become effective upon execution by the
Parties.
3
5. Amendment to Section 1.1
Section 1.1 is deleted in its entirety and replaced with the
following:
"1.1 All notices shall be sent to Seller at the following
address.
Magma Power Company
P.O. Box 17760
Los Angeles, California 90017
Attention: President"
6. Amendment to Section 1.2
6.1 Subparagraph a of Section 1.2 is deleted in its entirety and
replaced with the following:
"a. Nameplate Rating: 38,000 kW."
6.2 Add the following subparagraph "d":
"d. Generating Facility Designation: Niland No. 2."
7. Amendment to Section 1.3
Section 1.3 is deleted in its entirety and replaced with the
following:
"Contract Capacity: 34,000 kW
1.3.1 Estimated as-available capacity: 4,000 kW."
8. Amendment to Section 1.4
Section 1.4 is deleted in its entirety and replaced with the following:
"Expected annual production: 238,272,000 kWh."
9. Amendment to Section 1.5
Section 1.5 is deleted in its entirety and replaced with the following:
"Expected Date of Firm Operation: January 1, 1989."
4
10. Amendment to Section 1.6
Section 1.6 is deleted in its entirety and replaced with the following:
"Contract Term: 30 years."
11. Amendment to Section 1.8
Section 1.8, Option B, subparagraphs a and b, are deleted in their
entirety and replaced with the following:
X Standard Offer No. 2 Capacity Payment
----- Schedule in effect at time of contract
execution.
_____ Standard Offer No. 2 Capacity Payment
Schedule in effect at time of Firm
Operation."
12. Amendment to Section 1.9
The last paragraph in Section 1.9 is deleted in its entirety and
replaced with the following:
"100 percent of Forecast of Annual Marginal Cost of Energy, and
0 percent of Edison's published avoided cost of energy as
updated periodically and accepted by the Commission."
13. Amendment to Section 8
Section 8 is deleted in its entirety and replaced with the following:
"Prior to the date of Firm Operation, Seller shall be paid for Energy
only pursuant to Edison's published avoided cost of energy based on
Edison's full avoided operating cost as periodically updated and
accepted by the Commission. If at any time electrical energy can be
delivered to Edison and Seller is contesting the claimed jurisdiction
of any entity which has not issued a license or other approval for
the Project, Seller, in its sole discretion and risk, may deliver
electrical energy to Edison and for any electrical energy purchased
by Edison, Seller shall receive payment from Edison for (i) Energy
pursuant to this Section, and (ii) as-available capacity based on a
capacity price from the Standard Offer No. 1 Capacity Payment
Schedule as approved by the Commission. Unless and until all required
5
licenses and approvals have been obtained, Seller may discontinue
deliveries at any time."
14. Amendment to Section 8.1
The first two sentences in Section 8.1 are deleted in their entirety
and replaced with the following:
"Seller shall sell to Edison and Edison shall purchase from Seller
capacity pursuant to the Capacity Payment Option selected by Seller
in Section 1.8. The Capacity Payment Schedules will be based on
Edison's full avoided operating costs as approved by the Commission
throughout the life of this Contract."
15. Amendment to Section 8.1.2.6
Subparagraph b is deleted in its entirety.
16. Amendment to Section 8.2
The first sentence in Section 8.2 is deleted in its entirety and
replaced with the following:
"During the First Period of the Contract Term, Seller shall be paid a
Monthly Energy Payment for the Energy delivered by the Seller and
purchased by Edison at the Point of Interconnection pursuant to the
Energy Payment Option selected by the Seller in Section 1.9, as
follows."
17. Amendment to Section 8.3
The first sentence in Section 8.3 is deleted in its entirety and
replaced with the following:
"During the Second Period of the Contract Term, Seller shall be paid
a Monthly Energy Payment for Energy delivered by Seller and purchased
by Edison at the Point of Interconnection at a rate equal to 100% of
Edison's published avoided cost of energy as updated periodically and
accepted by the Commission, pursuant to the following formula:"
18. Amendment to Section 26
Section 26 is deleted in its entirety and replaced with the
following:
6
"Seller shall be solely responsible, using all reasonable efforts, to
negotiate and conclude all required transmission and interconnection
agreements with the Interconnecting Utility. Such agreements shall
provide for the transmission of electrical energy generated by the
Generating Facility to the Point of Interconnection."
19. Effect of this Amendment No. 2
Except as amended herein, all terms and conditions contained in the
Power Purchase Contract shall remain in full force and effect.
20. Signature Clause
The signatories hereto represent that they have been appropriately
authorized to enter into this Amendment No. 2 on the behalf of the
Party for whom they sign. This Amendment No. 2 is hereby executed
as of this 10th day of April, 1986.
SOUTHERN CALIFORNIA EDISON COMPANY
By: /s/ Edward A. Myers, Jr.
______________________________
Edward A. Myers, Jr.
Vice President
MAGMA POWER COMPANY
By: /s/ Andrew W. Hoch
______________________________
Andrew W. Hoch
President