EXHIBIT 10.42
TRANSMISSION SERVICE AGREEMENT
FOR THE
DEL RANCH POWER PLANT
BETWEEN
IMPERIAL IRRIGATION DISTRICT
AND
DEL RANCH, LTD.
TABLE OF CONTENTS
Section Title Page
1 PARTIES.................................................1
2 RECITALS................................................1
3 AGREEMENT...............................................1
4 DEFINITIONS.............................................1
5 TERM....................................................4
6 TRANSMISSION SERVICE....................................4
7 TRANSMISSION LOSSES....................................10
8 CHARGES................................................11
9 BILLING AND PAYMENT....................................12
10 LIABILITY..............................................14
11 AUDITING...............................................16
12 AUTHORIZED REPRESENTATIVES.............................17
13 NO DEDICATION OF FACILITIES............................17
14 NON-WAIVER.............................................17
15 NO THIRD PARTY RIGHTS..................................18
16 UNCONTROLLABLE FORCES..................................18
17 ASSIGNMENTS............................................19
18 GOVERNING LAW..........................................20
19 NOTICES................................................20
20 SIGNATURE CLAUSE.......................................21
EXHIBIT I - DEVELOPMENTS AND METHODOLOGIES FOR TRANSMISSION
SERVICE CHARGES AND SCHEDULING FEE
EXHIBIT II - TRANSMISSION SERVICE FOR DEL RANCH, LTD.
(i)
1. PARTIES: The Parties to this Agreement are
Imperial Irrigation District, organized under the Water Code of
the State of California ("IID"), and Del Ranch, Ltd.
("Producer"), hereinafter sometimes referred to individually as
"Party," and collectively as "Parties."
2. RECITALS: This Agreement is made with reference
to the following facts, among others:
2.1 Producer has caused to be constructed or intends to construct
an alternative energy resource facility located in IID's service area.
2.2 Producer and IID have entered into a Plant
Connection Agreement.
2.3 Producer desires to purchase, and IID desires to sell firm
transmission service of power from the Plant to Edison's Mirage Substation
subject to the terms and conditions specified herein.
2.4 Producer and IID are parties to that certain Funding and
Construction Agreement dated June 29, 1987, providing for the funding and
construction of transmission lines within
IID's service area.
3. AGREEMENT: The Parties agree as follows:
4. DEFINITIONS: The following terms, when used
herein with initial capitalization, whether in the singular or plural, shall
have the meanings specified:
4.1 Agreement: This IID - Producer Transmission
Service Agreement for Alternative Resources between Del Ranch,
Ltd. and IID, and all Exhibits attached hereto, as such Agreement
may subsequently be amended for firm transmission service between each Plant
and Edison's Mirage Substation.
4.2 Authorized Representative: The representative of
a party designated in accordance with Section 12.
4.3 Date of Initial Service: The date when the output
from each Plant is first available for delivery to Edison, as
notified to IID pursuant to Section 5.2.
4.4 Edison: Southern California Edison Company.
4.5 Funding and Construction Agreement: An agreement entered into
by IID and others dated June 29, 1987, providing for the funding and
construction of the Heber-Mirage Transmission Project, to which a form of this
agreement is attached as Exhibit III.
4.6 Maximum Transmission Service Entitlement: The
Maximum Transmission Service Entitlement for each Plant, as specified in
Exhibit[s] II, Transmission Service, and in any subsequent Plant Amendments.
4.7 Normal Transmission Capacity: The maximum transfer capability,
expressed in megawatts (MW), from the Point of Receipt to the Point of
Delivery. Such transfer capability, as determined by IID, in its sole
judgment, shall be consistent with prudent operating procedures and with
generally-accepted engineering and operating practices in the electrical
utility industry.
4.8 Operating Transmission Capability: The maximum
transfer capability, expressed in megawatts (MW), available to
IID at any given time to transmit power from Point of Receipt to
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Point of Delivery. Such transfer capability shall be as determined by IID in
its sole judgment, may vary from time-to-time depending on system conditions,
and shall be consistent with prudent operating procedures and
generally-accepted engineering and operating practices in the electrical
utility industry.
4.9 Plant: An electrical generating alternative energy resource
facility developed by Producer for which IID shall provide transmission
service, as specified in Exhibit(s) II, Transmission Service, and in any
subsequent Plant Amendments.
4.10 Plant Amendment: An agreement reached by the Parties, as an
amendment to this Agreement, for transmission service to be provided by IID
for a Plant added by Producer or for Producer's account subsequent to the
execution of this Agreement.
4.11 Plant Connection Agreement: An agreement between IID and
Producer providing for the connection of a Plant to IID's electrical system,
as specified in Exhibit[s] II, Transmission Service, and in any subsequent
Plant Amendments.
4.12 Point(s) of Delivery: The 230-kV switchrack at the Mirage
Substation site where Edison's 230-kV facilities are attached to IID's 230-kV
Coachella-Mirage Line or other points as may be mutually agreed upon by the
Authorized Representatives.
4.13 Point of Receipt: The point on the high voltage side of the
Plant's transformer where IID's metering equipment measures the delivery of
energy to the IID system.
4.14 Transmission Service Entitlement: The amount of
transmission service, expressed in megawatts (MW), provided by
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IID for each Plant, from the applicable Point of Receipt to the applicable
Point(s) of Delivery.
5. TERM:
5.1 Unless otherwise agreed to by the Parties, this Agreement shall
be effective on the Completion Date for the transmission lines being
constructed pursuant to the Funding and Construction Agreement, as the term
Completion Date is defined in Article I thereof, and shall remain in effect
until April 15, 2015. It is understood that if such Completion Date does not
occur, this Agreement shall be of no force or effect.
5.2 The Transmission Service Entitlement to be provided by IID for
each plant shall be contingent on a Plant Connection Agreement being in
effect. Transmission service for each Plant shall commence on the Date of
Initial Service of such Plant. Producer's Authorized Representative shall give
IID's Authorized Representative written notice of the Date of Initial Service
at least thirty (30) days before the Date of Initial Service.
6. TRANSMISSION SERVICE:
6.1 Subject to the terms of this Agreement, IID shall provide to
Producer and Producer shall purchase from IID transmission service over IID's
transmission system for each Plant. IID shall make arrangements with Edison to
provide, at Producer's or Edison's expense, for the transfer of the electrical
power to be delivered to Edison hereunder from IID's transmission system to
Edison's transmission system at the Point(s) of Delivery.
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6.2 The Transmission Service Entitlement for each Plant shall be
the Maximum Transmission Service Entitlement for such Plant specified in
Exhibit[s] II, Transmission Service, or any subsequent Plant Amendments, or
such lesser amount as may be established as follows. Beginning on the Date of
Initial Service for each Plant, Producer shall be entitled to specify a
Transmission Service Entitlement by advance written notice given to IID's
Authorized Representative at least thirty (30) days prior to the Date of
Initial Service. The Transmission Service Entitlement to be provided by IID
subsequent to the Date of Initial Service may be adjusted at six (6) month
intervals thereafter until two (2) years after the Date of Initial Service for
such Plant (the "Trial Period"). Such adjustments shall be made by having
Producer's Authorized Representative give IID's Authorized Representative a
ninety (90) day advance written notice as to the adjustment required.
Beginning two (2) years after the Date of Initial Service for such Plant,
Producer shall be entitled to specify a Transmission Service Entitlement for
each successive two-year period during the remaining term of this Agreement by
written notice from Producer's Authorized Representative to IID's Authorized
Representative given at least ninety (90) days prior to the beginning of each
two-year period.
6.3 The Transmission Service Entitlement selected by Producer for
each Plant in accordance with Section 6.2 may be any amount which is less than
or equal to the Maximum Transmission Service Entitlement for such Plant
specified in Exhibit[s] II, Transmission Service and in any subsequent Plant
Amendments,
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provided, however, that the following shall apply to each Plant after the
Trial Period for such Plant has elapsed.
6.3.1 If (i) the sum of the Transmission Service Entitlements
for all Plants which are no longer in their Trial Periods is less than the sum
of the Maximum Transmission Service Entitlements for such Plants, as shown in
Exhibit[s] II, Transmission Service and in any subsequent Plant Amendments,
(the "Aggregate Maximum Transmission Service Entitlement"), and (ii) provided
that IID requires additional capacity for transmitting electric power to
Edison's transmission system for another person (or, following the Credit
Installment Period as defined in the Funding and Construction Agreement, for
itself) and (iii) IID's use of such required capacity would be in conflict
with Producer's right as provided herein to increase the sum of the
Transmission Service Entitlements for such Plants to the Aggregate Maximum
Transmission Service Entitlement, then IID shall so notify Producer in
writing, specifying in such notice the portion, expressed in megawatts (MW),
of the excess of the Maximum Transmission Service Entitlement over the
Transmission Service Entitlement for each such Plant which it desires to use
as stated above. Producer shall have ninety (90) days after receipt of IID's
notice to notify IID in writing that it desires to increase the Transmission
Service Entitlements of such Plants. To the extent that Producer does not
elect to increase the Transmission Service Entitlement of each such Plant up
to the Maximum Transmission Service Entitlement for such Plant, IID shall be
entitled to use such unclaimed capacity to satisfy the
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transmission requirements specified in its notice to Producer, and to the
extent that IID does so, Producer shall thereafter be foreclosed from
increasing the Transmission Service Entitlement for such Plant in a manner
which would conflict with such usage by IID.
6.3.2 IID shall treat Producer and each other person who has
entered into a transmission service agreement similar in substance to this
Agreement in a fair and nondiscriminatory manner in requesting additional
transmission capacity as provided in this Section 6.3. Without limiting the
generality of the foregoing, IID shall request additional transmission
capacity from Producer and such other persons on a pro rata basis, in
proportion to the Aggregate Maximum Transmission Service Entitlement for each
person less the sum of the Transmission Service Entitlements for each of such
persons' generating plants which is no longer in a Trial Period.
6.4 In the event that the Original Capacity Nomination designated
by Producer (or the Participant associated with Producer) is adjusted pursuant
to Section 3.07 of the Funding and Construction Agreement, the Parties agree
to amend this Agreement in such a way that the sum of the Maximum Transmission
Service Entitlements for all Plants hereunder is equal to such Original
Capacity Nomination as so adjusted. As used in this Section 6.4, the terms
Original Capacity Nomination and Participant shall have the meanings assigned
to them in Article I of the Funding and Construction Agreement.
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6.5 IID reserves the right to interrupt or curtail the
transmission service provided hereunder as follows:
6.5.1 If the Operating Transmission Capability is reduced to
less than Normal Transmission Capacity from a Point of Receipt to a Point of
Delivery, and when continuity of service within IID's service area is not
being jeopardized, IID may curtail the transmission service currently being
provided from such Point of Receipt to such Point of Delivery, to an amount
"A" determined by the following formula:
A = Operating Transmission Capability x Transmission Service
Normal Transmission Capacity Entitlement
The transmission service for each Plant affected
shall be curtailed by multiplying the Transmission Service Entitlement in
accordance with Exhibit[s] II, Transmission Service and in any subsequent
Plant Amendments by the same percentage (expressed as a decimal) as used in
the determination of "A." However, any such curtailment shall occur only after
IID has made all reasonable efforts to eliminate the cause of the reduction in
Operating Transmission Capability, and IID shall then employ reasonable
efforts to eliminate expeditiously the cause of said reduction.
6.5.2 If continuity of service within IID's control area is
being jeopardized, as determined by IID in its sole judgment, IID may
interrupt or curtail the transmission service provided hereunder to the extent
necessary to avoid or eliminate such jeopardy; provided that (i) such
interruptions or curtailments may be made so that IID may fully utilize all
generating resources owned by it or available to it under
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contract in order to avoid damage to IID's electrical system caused by
overloading, (ii) such interruption or curtailment shall occur only after IID
has made all reasonable efforts to avoid or eliminate such jeopardy and (iii)
to the extent feasible any curtailment of transmission service provided
hereunder from a Point of Receipt to a Point of Delivery shall be made in
accordance with the formula set forth in Section 6.5.1.
6.6 If IID's efforts do not avoid or eliminate such jeopardy, the
Parties shall endeavor to develop some other arrangement to avoid or eliminate
such jeopardy and minimize the effects of IID's interruption or curtailment on
both parties.
6.7 In the event of any curtailments or interruptions made pursuant
to Section 6.5.1 or Section 6.5.2, Producer shall, immediately after being
orally notified by IID, reduce the electrical output of the Plants by the
amounts requested by IID.
6.8 The transmission service to be provided by IID and purchased by
Producer for each Plant shall not exceed the Transmission Service Entitlement
for that Plant.
6.9 Subject to Section 6.5, IID shall, during the periods that IID
has agreed to provide the transmission service at the specified Transmission
Service Entitlements, accept hourly scheduled energy deliveries at each Point
of Receipt and simultaneously deliver the same amount of energy (less
transmission losses as provided herein) at the Point(s) of Delivery mutually
agreed upon by the Parties' dispatchers and/or schedulers.
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6.10 Hourly scheduled energy deliveries at each Point of Receipt shall conform
with the practices and procedures developed by the Parties' dispatchers and
schedulers and agreed to by the Authorized Representatives.
7. TRANSMISSION LOSSES:
7.1 IID shall determine, by transmission power flow analysis, the
electrical losses (expressed as a percent amount of hourly scheduled energy
deliveries) associated with the electrical output from each Plant. Such
analysis shall be performed by IID at its sole expense. The initial percent
amount, for each Plant, representing the electrical losses as determined
herein shall be as specified in Exhibit[s] II, Transmission Service and in any
subsequent Plant Amendments.
7.2 Unless otherwise agreed to by Producer's and IID's schedulers
and dispatchers, IID shall reduce the amount of all hourly scheduled energy
deliveries for Producer or Producer's account by the percent amount of such
hourly deliveries for each Plant in accordance with Exhibit[s] II,
Transmission Service and in any subsequent Plant Amendments.
7.3 If either Party believes that there has been a significant
change in IID's electrical system and the electrical losses associated with
any Plant should be redetermined, either Party's Authorized Representative may
submit a written request to the other Party's Authorized Representative that
the electrical losses be redetermined. Following such request, a transmission
flow analysis shall be performed by IID as approved by the Authorized
Representatives and paid for by the requesting Party.
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Whenever the percent amount for electrical losses is redetermined, such
percent amount shall become effective as of the first day of the month
following the date of such redetermination; provided, that such a
redetermination may be no sooner than twelve (12) months after the most recent
redetermination. Any redetermination of electrical losses made pursuant to
this Section 7 shall be based on conditions in existence at the time of such
redetermination.
7.4 Along with the monthly billing pursuant to Section 9.1, for the
transmission service for each Plant, IID shall submit a monthly summary of
hourly scheduled energy deliveries and of electrical losses for each Plant.
8. CHARGES:
8.1 For transmission service provided by IID, Producer shall pay
IID at a rate to be determined by IID pursuant to the methodologies specified
in Exhibit I.A. The initial rate is specified in Exhibit[s] II, Transmission
Service and revisions thereto will be specified in any subsequent Plant
Amendments. Any specific facility charge to Producer for connecting the
Plant(s) to the IID transmission system shall be included only in the Plant
Connection Agreement(s) between IID and Producer.
8.2 The transmission rate shall be reviewed annually and may be
revised. Any revision of the rates shall be based on the methodologies in
Exhibit I.A and on the conditions in existence at the time of the revision.
Producer shall have the right to review any exhibits or work papers prepared
by IID to revise the rates.
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8.3 An initial monthly scheduling fee, as specified in Exhibit[s]
II, Transmission Service and revisions thereto specified in any subsequent
Plant Amendments, shall be paid by Producer to IID for those months in which
there were scheduled energy deliveries from the Plant(s). The initial
scheduling fee has been determined by IID pursuant to the methodology
specified in Exhibit I.B. The scheduling fee shall be reviewed annually and
may be revised. Any revision of the scheduling fee shall be based on the
methodology in exhibit I.B and on the conditions in existence at the time of
the revision. Producer shall have the right to review any exhibits or work
papers prepared by IID to revise the scheduling fee.
9. BILLING AND PAYMENT:
9.1 IID shall render bills to Producer, beginning in the month of
the Date of Initial Service, on or before the fifteenth (15th) day of each
month for the transmission service to be provided during the month. Producer
shall pay such bills within twenty (20) days after receipt thereof.
All payments by Producer shall be sent to:
Imperial Irrigation District
c/o Manager, Finance and Accounting
P.O. Box 937
Imperial, California 92251
All billings by IID shall be sent to:
Del Ranch, Ltd.
7029 Gentry Road
Calipatria, California 92233
9.2 Either Party's Authorized Representative may at
any time, by advance written notice to the other Party's
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Authorized Representative, change the address to which payments or billings
shall be sent.
9.3 Bills which are not paid in full by said due date shall
thereafter bear an additional charge of one and one-half percent (1-1/2%) per
month, or the maximum legal rate of interest, whichever is less, compounded
monthly on the unpaid amount prorated by days from the due date until payment
is received by IID.
9.4 In the event any portion of any bill is disputed, the disputed
amount shall be paid when due under protest. If the protested portion of the
payment is found to be incorrect by the Authorized Representatives, the
disputed amount shall be paid by IID to Producer, including interest at the
rate of 1-1/2% per month, or the maximum legal rate, whichever is less,
compounded monthly from the date of payment by Producer to the date the refund
check or adjusted bill is received by Producer.
9.5 For a fractional part of a calendar month at the beginning or
end of the period for which the transmission service is provided hereunder,
the charge pursuant to Section 8.1 shall be proportionately adjusted by the
ratio of days that service is furnished by IID to Producer during such month
to the total number of days in such month.
9.6 The charge for the transmission service pursuant to Section 8.1
shall be proportionately reduced to the extent the duration of the
interruptions or curtailments of the transmission service which may occur
pursuant to Section 6.5.1 or Section 6.5.2 exceed a cumulative total of
twenty-four (24) hours during
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any calendar month based on 730 hours per month representing the full
transmission service charge. The amount of such pro rata reduction in any
month shall reflect the duration and amount of such interruptions or
curtailments which exceed said cumulative 24 hours. Such pro rata reduction
shall be reflected as a credit to Producer as soon as possible in a subsequent
monthly bill.
9.7 The charge for the transmission service shall not be reduced if
IID can deliver, but Edison's transmission system cannot receive, the hourly
scheduled energy deliveries independent of the duration of time this condition
exists.
10. LIABILITY:
10.1 Except for any loss, damage, claim, costs, charge or expense
resulting from Willful Action, neither Party (the "released Party"), its
directors or other governing body, officers or employees shall be liable to
the other Party for any loss, damage, claim, cost, charge, or expense of any
kind or nature incurred by the other Party (including direct, indirect or
consequential loss, damage, claim, cost, charge or expense; and whether or not
resulting from the negligence of a Party, its directors or other governing
body, officers, employees or any person or entity whose negligence would be
imputed to a Party) from engineering, repair, supervision, inspection,
testing, protection, operation, maintenance, replacement, reconstruction, use
or ownership of the released Party's electrical system, Plant(s) or associated
facilities in connection with the implementation of this Agreement. Except for
any loss, damage, claim, cost, charge or expense resulting from Willful
Action,
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each Party releases the other Party, its directors or other governing body,
officers and employees from any such liability.
10.2 For the purpose of this Section 10, Willful Action shall be
defined as action taken or not taken by a Party at the direction of its
directors or other governing body, officers or employees having management or
administrative responsibility affecting its performance under this Agreement,
as follows:
10.2.1 Action which is knowingly or intentionally taken or not
taken with conscious indifference to the consequences thereof or with intent
that injury or damage would result or would probably result therefrom.
10.2.2 Action which has been determined by final arbitration
award or final judgment or judicial decree to be a material default under this
Agreement and which occurs or continues beyond the time specified in such
arbitration award or judgment or judicial decree for curing such default or,
if no time to cure is specified therein, occurs or continues thereafter beyond
a reasonable time to cure such default.
10.2.3 Action which is knowingly or intentionally taken or not
taken with the knowledge that such action taken or not taken is a material
default under this Agreement.
10.3 Willful Action does not include any act or failure to act
which is merely involuntary, accidental or negligent.
10.4 The phrase "employees having management or administrative
responsibility," as used in Section 10.2, means the employees of a Party who
are responsible for one or more of
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the executive functions of planning, organizing, coordinating, directing,
controlling and supervising such Party's performance under this Agreement with
responsibility for results.
10.5 Subject to the foregoing provisions of this Section 10, each
Party agrees to defend, indemnify and save harmless the other Party, its
officers, agents, or employees against all losses, claims, demands, costs or
expenses for loss of or damage to property, or injury or death of persons,
which directly or indirectly arise out of the indemnifying Party's performance
pursuant to this Agreement; provided, however, that a Party shall be solely
responsible for any such losses, claims, demands, costs or expenses which
result from its sole negligence or Willful Action.
11. AUDITING:
11.1 IID shall make its books, records, and other supporting
information, as requested, available to Producer or to Producer's designated
contracted representatives with a CPA firm, for the purpose of auditing any
charges or accounts to be kept by IID hereunder. All such audits shall be
undertaken at reasonable times and in conformance with generally-accepted
auditing stan dards.
11.2 If as a result of such audits Producer believes its charges or
accounts should be adjusted, the findings shall be presented to the Authorized
Representatives. If the Authorized Representatives agree that any audit
finding should result in a revision of charges or accounts, such revisions
shall be
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retroactive to the first billing for such charges and accounts and shall be
made as soon as practical after determination.
11.3 The amount of any unresolved dispute shall accrue interest at
the rate of one and one-half percent (1-1/2%) per month, or the maximum legal
rate, whichever is less, compounded monthly for any amount of money ultimately
refunded to Producer.
12. AUTHORIZED REPRESENTATIVES: Within thirty (30) calendar days
after the Completion Date, as defined in Article I of the Funding and
Construction Agreement, each Party shall designate by written notice to the
other Party a representative who is authorized to act on its behalf in the
implementation of this Agreement. Either Party may at any time change the
designation of its Authorized Representative by written notice to the other
Party.
13. NO DEDICATION OF FACILITIES: Any undertaking by one Party to
the other Party under any provision of this Agreement shall not constitute the
dedication of the system or any portion thereof of the Party to the public or
to the other Party, and it is understood and agreed that any such undertaking
under any provision of this Agreement by a Party shall cease upon the
termination of its obligations hereunder.
14. NON-WAIVER: None of the provisions of this Agreement shall be
considered waived by either Party except when such waiver is given in writing.
The failure of either Party to insist in any one or more instances upon strict
performance of any of the provisions of this Agreement or to take advantage of
any of its rights hereunder shall not be construed as a waiver of
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any such provisions or the relinquishment of any such rights for the future,
but the same shall continue and remain in full force and effect.
15. NO THIRD PARTY RIGHTS: The Parties do not intend
to create rights in or to grant remedies to any Third Party or
others as a beneficiary of this Agreement or of any duty,
covenant, obligation or undertaking established hereunder.
16. UNCONTROLLABLE FORCES: Neither Party shall be considered to be
in default in the performance of any of its obligations under this Agreement
when a failure of performance shall be due to an uncontrollable force. The
term "uncontrollable force" shall mean any cause beyond the control of the
Party affected including, but not restricted to, failure of or threat of
failure of facilities which have been maintained in accordance with
generally-accepted engineering and operating practices in the electrical
utility industry, flood, drought, earthquake, tornado, storm, fire,
pestilence, lightning and other natural catastrophes, epidemic, war, riot,
civil disturbance or disobedience, strike, labor dispute, labor or material
shortage, sabotage, government priorities and restraint by court order or
public authority (whether valid or invalid) and actions or nonaction by or
inability to obtain or keep the necessary authorizations or approvals from any
governmental agency or authority, the failure or inability of Edison to
receive the electric power to be transmitted hereunder at the Point(s) of
Delivery, which by exercise of due diligence such Party could not reasonably
have been expected to avoid and which by exercise of
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due diligence it has been unable to overcome. Nothing contained herein shall
be construed as to require a Party to settle any strike or labor dispute in
which it may be involved. Either Party rendered unable to fulfill any of its
obligations under this Agreement by reason of an uncontrollable force shall
give prompt written notice of such fact to the other Party and shall exercise
due diligence to remove such inability with all reasonable dispatch.
17. ASSIGNMENTS:
17.1 Any assignment by Producer of its interest in this Agreement
which is made without the written consent of IID (which shall not be
unreasonably withheld) shall not relieve Producer from its primary liability
for any of its duties and obligations hereunder, and in the event of any such
assignment Producer shall continue to remain primarily liable for payment of
any and all money due IID hereunder and for the performance and observance of
all other covenants, duties and obligations to be performed and observed
hereunder by it to the same extent as though no assignment has been made.
17.2 Notwithstanding any provision of Section 17.1 to the contrary,
prior to the end of the Credit Installment Period, as defined in Article I of
the Funding and Construction Agreement, Producer's right to transmission
service under this Agreement with respect to one or more of the Plants may be
assigned only (i) to a purchaser or co-owner of such Plants or to a person who
will operate such Plants pursuant to a contract or other arrangement with such
purchaser and in either case only
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with the prior written consent of IID (which shall not be unreasonably
withheld) or (ii) for security purposes, to a bank or other entity which
provides financing for such Plants or any electrical transmission facilities
associated therewith. Producer and IID agree that nothing in this Section 17.2
may be amended, modified or waived without the prior written consent of each
and every party to the Funding and Construction Agreement (except for any
parties in default thereunder).
17.3 Whenever an assignment of Producer's interest in this
Agreement is made with the written consent of IID, Producer's assignee shall
expressly assume in writing the duties and obligations hereunder of Producer
and, within thirty (30) days after any such assignment and assumption of
duties and obli gations, Producer shall furnish or cause to be furnished to
IID a true and correct copy of such assignment and assumption of duties and
obligations.
17.4 Subject to the foregoing restrictions on assignments, all of
the terms of this Agreement shall be binding upon and inure to the benefit of
both of the Parties and their respective successors, permitted assigns and
legal representatives.
18. GOVERNING LAW: This Agreement shall be
interpreted, governed by and construed under the laws of the
State of California. or the laws of the United States, as
applicable.
19. NOTICES: Any notice, demand or request provided
for in this Agreement, or served, given or made in connection
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with it, shall be in writing and shall be deemed properly served, given or
made if delivered in person or sent by United States mail, postage prepaid, to
the persons specified below unless otherwise provided for in this Agreement:
Imperial Irrigation District
c/o General Manager
P.O. Box 937
Imperial, California 92251
Del Ranch, Ltd.
7029 Gentry Road
Calipatria, California 92233
Either Party may at any time, by notice to the other Party, change
the designation or address of the person so specified as the one to receive
notices pursuant to this Agreement.
20. SIGNATURE CLAUSE: The signatories hereto represent that they
have been appropriately authorized to enter into this IID-Del Ranch Power
Plant Transmission Service Agreement for Alternative Resources (Standard Form)
on behalf of the Party for whom they signed. This Agreement is hereby executed
as of the 2nd given day of August, 1988.
[S E A L]
IMPERIAL IRRIGATION DISTRICT
By: /s/ Tony Gallego
-------------------------------------
President, Board of Directors
DEL RANCH, LTD., a California
Limited Partnership
By: Red Hill Geothermal, Inc.
a General Partner
By: /s/ Jon R. Peele
---------------------------------------
Vice President
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EXHIBIT I.A
DEVELOPMENT AND METHODOLOGY FOR THE
TRANSMISSION SERVICE CHARGE
IID's transmission service charge shall be recalculated during the month of
April of each year, using the methodology summarized in this Exhibit. The
recalculated transmission service charge shall be effective on June 1 of the
year of recalculation.
EI.A-1 Plant Investment
TAI = WP + PA - TR + GP + M&S
where
TAI = Total adjusted investment at the time of calculation.
WP = Estimate of weighted Transmission Plant Cost ($40,980,291) as
December 31, 1983 calculated using the following formula:
WP = (0.7 x OC) + (0.3 x RCN); where
OC = Cumulative original cost of Transmission
Plant as shown in IID's accounting records, obtained by
summing the actual cost of all yearly additions to
Transmission Plant from 1938 to the end of 1983, (i.e.,
$20,700,415).
RCN = Estimate of the cumulative reproduction cost
to build the Transmission Plant items
identified in OC in 1983 dollars. Calculated
by summing the escalated cost of each yearly
addition to Transmission Plant starting in
1938 up to the end of calendar year 1983
using the Handy-Whitman Index for Total
Transmission Plant for the Pacific Region,
(i.e., $88,300,000).
PA = Cumulative sum of additions to Transmission Plant from January
1, 1984 to the end of the year preceding the year of
calculation. Thus, if the calculation takes place in 1996, PA is
sum of Transmission Plant additions at actual cost from January
1, 1984 to December 31, 1995.
PA = Sum of [TPA(i) + OA(i)] where TPA(i) =
Annual additions to Transmission
Plant for each year associated with
the Transmission Project, as defined
in Section 7.05 of the Funding and
Construction Agreement. TPA(i) is
calculated for each year from Completion Date of
Transmission Project to end of year preceding
year of calculation.
-EIA-1-
OA(i) = Other annual additions to Transmission
Plant by IID each year. OA(i) is calculated for
each year from January 1, 1984 to end of year
preceding year of calculation.
TR = Sum of (i) and (ii) where:
(i)= For facilities placed in service prior to 1984, the cumulative sum
of the annual Weighted Retirement Costs (WRC) for retirements from
Transmission Plant from January 1, 1984 to the end of the year
preceding the year of calculation. Thus, if the calculation takes
place in 1996, TR is comprised of the sum of annual Transmission
Plant retirements from January 1, 1984 to December 31, 1995 with
each year's original cost adjusted to account for the weighted cost
of retirement.
where WRC = Weighted Retirement Cost for transmission
retired in a given year.
OCI = Original cost of transmission facilities
retired in a given year.
WRC = 70%*OCI + 30%*OCI*RCN/OC
(ii) = Cumulative sum of original cost of annual
transmission retirements for facilities placed in
service after January 1, 1984.
GP = General plant investment as shown in IID's accounting records, as
of the year preceding the year of calculation, allocated to
transmission use by the ratio of total allocated transmission O&M
cost to the sum of production O&M cost excluding fuel, distribution
O&M cost, transmission O&M cost, dispatching cost, and customer
accounting and services costs.
M&S= Materials and supplies inventory held by IID as of the year
preceding the year of calculation, allocated to transmission use by
the ratio of Transmission Plant Original Cost to Total Electric
Plant original cost as reflected in IID's accounting records for
the year preceding the year of calculation.
EI.A-2 Annual Cost
TAC = (1.25 x CRF x TAI) + OM + A&G
where
TAC = Total Annual Cost.
CRF = Annual capital recovery factor calculated for a 33- year
amortization using the average interest rate for the year
preceding the year of calculation from the "Merrill Lynch 500
Municipal Bond Index Electric- Retail."
OM = Total allocated transmission O&M cost during the year preceding
the year of calculation, equal to the sum of (i) dispatching
costs and (ii) transmission O&M cost allocated to transmission
use by the ratio of
-EIA-2-
Transmission Plant original cost (OC) to Total Transmission Plant
original cost (including the cost of subtransmission plant) as
shown in IID's accounting records.
A&G = Administrative and general cost during the year
preceding the year of calculation, allocated to
transmission use by the ratio of total allocated
transmission cost (OM) to the sum of production O&M
cost excluding fuel, distribution O&M cost,
transmission O&M cost, dispatching cost, and customer
accounting and services cost. Administrative and
general cost is comprised of Power Department plus
Joint Department A&G less Customer Account Expense.
EI.A-3 Monthly Transmission Service Charge
TSC = TAC
--------
12 x APL
where
TSC = Monthly transmission service charge, in $/kW.
APL = Annual peak load during the year preceding the year
of calculation, expressed in kW, which is equal to the sum of
IID's service peak load plus all transmission wheeling commitments
(including all Transmission Service Entitlements).
Examples
(1) Recalculation of 1985 Transmission Service Charge Plant Investment
OC = 20,700,415
RCN= 88,300,000
WP = (0.7 x OC) + (0.3 x RCN) = 40,980,291 PA = 0 + 4,111,000 = 4,111,000
GP = 1,526,849 x 764,058
-------------------------------------------------------
3,085,080 + 4,080,868 + 694,545 + 189,450 + 1,621,252
= 1,526,849 x 0.079 = 120,625
M&S = 6,151,304 x 20,700,415
162,700,978
= 6,151,304 x 0.1272 = 782,629
TAI = 40,980,291 + 4,111,000 + 120,625 + 782,629
= 45,994,545
Annual Cost
CRF = (33 years, 10.41%) = 10.8221%
OM = 189,540 + 694,545 x 20,700,415
25,025,093
= 189,540 + 694,545 x 0.8272 = 764,058
A&G =
4,086,530 x 764,058
-------------------------------------------------------
3,085,080 + 4,080,868 + 694,545 + 189,450 + 1,621,252
= 4,086,530 x 0.079 = 322,847
TAC = (1.25 x 0.108221 x 45,994,545) + 764,058 + 322,847
= 7,308,875
-EIA-3-
Monthly Transmission Service Charge
APL = 369,000 + 63,000 = 432,000
TSC = 7,308,875 = 1.41 $/kW
------------
12 x 432,000
(2) Sample Calculation, 1996
Assumptions
- Weighted cost of Transmission Plant to 12-31-83;
$40,980,291.
- Transmission Additions to 12-31-95; $67,000,000.
- Transmission Credit to rate base through 12-31-94;
$30,000,000.
- Transmission credits used during 1995 were $6,000,000; IID's
Reserved Capacity is 40 MW, and the Deemed Capacity is 600 MW.
- No accumulated retirements.
- General plant investment as of 12-31-95, from IID
records, is $2,000,000.
- All allocation factors are assumed the same as in the previous
example but, in general, would not be identically the same each
year.
- Materials and supplies inventory as of 12-31-95; from
IID records, is $8,000,000.
- The 12-month average Merrill-Lynch Index interest rate is 8% in
1995.
- Dispatching costs in 1995 were $1,000,000.
- IID's transmission O&M costs in 1995 were $1,000,000.
- IID's administrative and general costs in 1995 were
$5,000,000.
- IID's service peak load in 1995 was 543 MW.
- IID's total transmission commitments in 1995 were 320
MW.
Adjusted Investment 1996
- ------------------- ------
WP = Weighted Plant to 12-31-83........$ 40,980,291
OA[1984-1995] = Transmission Plant Additions
Through 12-31-95 (excludes
Transmission Project)...............67,000,000
TPA[1984-1994] = Transmission Credit to Rate Base
Through 12-31-94....................30,000,000
TPA[1995] = Transmission Credit Rate Base during
1995; 6,000,000 x 600 - 40
600.............5,600,000
GP = General Plant Allocated;
2,000,000 x 0.079......................158,000
M&S = M&S Allocated; 8,000,000 x 0.1272 ...1,017,600
------------
TAI = $144,755,891
-EIA-4-
Annual Cost
CRF = (33 years, 8%) = 8.6852
OM = 1,000,000 + 1,000,000 x 0.8272 = 1,827,200
A&G = 5,000,000 x 0.079 = 395,000
TAC = 1.25 x 0.086852 x $144,755,891 + 1,827,200 + 395,000
= $17,937,623
Monthly Transmission Service Charge
APL = 543,000 + 320,000 = 863,000
TSC = $17,937,623 = $1.73/kW
12 x 863,000
R1
-EIA-5-
EXHIBIT I.B
METHODOLOGY AND CALCULATION OF SCHEDULING FEE
ANNUAL DETERMINATION
OF
IID SCHEDULING FEES
IID, in April each year, will calculate monthly fees for scheduling
services related to Alternative Energy Resources and transactions with other
utilities as follows:
A. An appropriate number of scheduling units will be
assigned to every IID resource, Alternative Energy
Resource, and transaction with other utilities in
operation during the preceding year. The number of
scheduling units assigned to each resource and/or
transaction will depend upon the total daily number of
functions and therefore, estimated time required to
schedule the resource and/or transaction. This
estimate will be directly related to the complexity of
the scheduling service being provided. Table 1 shows
how the total scheduling units were determined for the
IID system.
B. The expenses related to dispatching and scheduling
services will be equal to the sum of the following:
1. IID FPC Account 556 for the year preceding the
year of calculation
2. A portion of the annual expenses related to the SCADA and
AGC systems for the year preceding the year of calculation,
determined by multiplying one half of the levelized debt service
payments for the systems by the percentage that FPC Account 556 is
of the total of FPC Accounts 556, 561 and 581. Table 2 shows
calculations involved with this step.
C. The annual scheduling fee per scheduling unit will be
determined by dividing the expenses related to
scheduling found in Step B by the total scheduling
units from Step A. The per unit fee will then be
multiplied by the number of scheduling units assigned
to each resource and/or transaction to develop an
appropriate annual scheduling fee for that resource
and/or transaction. The monthly scheduling fee will
then be calculated by dividing the annual fee by 12.
Table 3 shows the calculation.
The revised scheduling fee will be effective on June 1 of the year in which
they are calculated.
R1
-EIB-1-
IID-Edison
Service Agreement
for Alternative
Energy Resources TABLE 1
IMPERIAL IRRIGATION DISTRICT
SCHEDULING FEE METHODOLOGY
DETERMINATION OF TOTAL SCHEDULING UNITS
On
Hours Payback Pre- AGC Off Loss
Energy Capacity Variable /Banking Scheduling System System Accounting
(X=2) (X=2) (X=1) (X=2) (X=1) (X=1) (X=1) (X=1) Total
----------------------------------------------------------------------------
IID's Generating
Units:
Pilot Knob x x x x 6
Drop No. 1 x x x x 6
Drop No. 2 x x x x 6
Drop No. 3 x x x x 6
Drop No. 4 x x x x 6
Drop No. 5 x x x x 6
Ea - Highline x x x x 6
Turnip and Double x x x x 6
Weir
El Centro Unit No. 1 x x x x 6
El Centro Unit No. 2 x x x x 6
El Centro Unit No. 3 x x x x 6
El Centro Unit No. 4 x x x x 6
Coachella Units
No. 1 and 2 x x x x 6
Coachella Units
No. 3 and 4 x x x x 6
Rockwood x x x x 6
Brawley x x x x 6
---
Subtotal 96
Alternative Energy
Resources:
Earth Energy x x x x x x x 10
Magma (East Mesa) x x x x x x 9
Heber HGC x x x x x x x 10
Vulcan Power x x x x x x x 10
Ormesa I x x x x x x x 10
Ormesa II x x x x x x x 10
_______ Binary x x x x x x x 10
---
Subtotal 69
Transactions with
Other Utilities:
DOE x x x x x 7
EPE x x x x x 7
SCE x x x x x 7
SDG&E x x x x x x x 10
APS (Yucca) x x x x x 7
SCE GT's (Axis) x x x x x x 9
APS (Axis) x x x x x x 9
YCWUA x x x x x x 9
---
Subtotal 65
Total Scheduling Units 230
-EIB-2-
TABLE 2
IMPERIAL IRRIGATION DISTRICT
SCHEDULING FEE METHODOLOGY
EXPENSES RELATED TO SCHEDULING
IID 1986 Actual
FPC Account 556 (3) $371,297 (52.15%)
FPC Account 56l $230,170 (32.33%)
FPC Account 581 $110,461 (15.52%
-------- -------
$711,928 (100.0%)
SCADA and AGC Systems
Investment (2) = $4,536,285
Annual Expense
$4,536,285 x 0.1170923 (1) = $531,164
Expenses Related to Scheduling
FPC Account 556 = $371,297
52.15% of SCADA and AGC Systems
Annualized Expense ($531,164 x 0.5215) = $277,002
--------
Total Expense Related to Scheduling = $648,299
(1) Capital Recovery Factor determined from levelized debt service payments
of $7,611,000 for $65,000,000 - May, 1983 COP issue.
(2) Fifty percent of total investment for SCADA and AGC $9,072,571 is
assumed related to transmission service.
(3) Related to load dispatching for system control.
-EIB-3-
TABLE 3
IMPERIAL IRRIGATION DISTRICT
SCHEDULING FEE METHODOLOGY
CALCULATION OF SCHEDULING FEE
Annual Charge per Scheduling Unit
Total Expenses Related to Scheduling (from Table 2) = $648,299
Total Scheduling Units (from Table 1) 230
-------
Annual Charge per Scheduling Unit ($613,446/220) = $ 2,818
Alternative Energy Resource Scheduling Fee
Magma (East Mesa) Plant:
Annual Charge (9 Scheduling Units x $2,818) = $25,362/year
Monthly Charge ($25,362/12) $ 2,113/month
All Other Plants:
Annual Charge (10 Scheduling Units x $2,818) = $28,180/year
(1) Monthly Charge ($28,180/12) = $ 2,348/month
(1) Also applies to new plants to be on-line in 1988 & 89
-EIB-4-
EXHIBIT II
TRANSMISSION SERVICE
FOR THE DEL RANCH POWER PLANT
EII-1. DESCRIPTION:
EII-2. APPLICABILITY: Applicable to the transmission service
to be provided by IID to Producer for transmitting the
electrical output from the Del Ranch Plant Point of
Receipt to the Point(s) of Delivery.
EII-3. PLANT CONNECTION AGREEMENT: The Del Ranch Plant
Connection Agreement to be executed between IID and
Producer.
EII-4. MAXIMUM TRANSMISSION SERVICE ENTITLEMENT: 38 MW.
TRANSMISSION SERVICE ENTITLEMENT: 38 MW, as specified
in accordance with Sections 6.2 and 6.3.
EII-5. POINT OF RECEIPT: See Section 4.13.
EII-6. POINT(S) OF DELIVERY: The 230-kV switchrack at
Edison's Mirage Substation.
EII-7. TERM: The term of the Transmission Service Entitlement
for the Del Ranch Power Plant shall be effective from
the Date of Initial Service and shall terminate on
April 15, 2015.
EII-8. TRANSMISSION SERVICE CHARGE: $1.41 per kilowatt-month,
or as revised in accordance with Section 8.2, times
Transmission Service Entitlement.
EII-9. SCHEDULING FEE: $2,348 per month or as revised in
accordance with Section 8.3.
EII-10. TRANSMISSION LOSSES: 2.98% or as revised in accordance
with Section 7.
-EII-1-
AMENDMENT NO. 1
EXHIBIT II
TRANSMISSION SERVICE
FOR THE DEL RANCH POWER PLANT
EII-1. DESCRIPTION:
EII-2. APPLICABILITY: Applicable to the transmission service
to be provided by IID to Producer for transmitting the
electrical output from the Del Ranch Plant Point of
Receipt to the Point(s) of Delivery.
EII-3. PLANT CONNECTION AGREEMENT: The Del Ranch Plant
Connection Agreement to be executed between IID and
Producer.
EII-4. MAXIMUM TRANSMISSION SERVICE ENTITLEMENT: 42 MW.
TRANSMISSION SERVICE ENTITLEMENT: 42 MW, as specified
in accordance with Sections 6.2 and 6.3.
EII-5. POINT OF RECEIPT: See Section 4.13.
EII-6. POINT(S) OF DELIVERY: The 230-kV switchrack at
Edison's Mirage Substation.
EII-7. TERM: The term of the Transmission Service Entitlement
for the Del Ranch Power Plant shall be effective from
the Date of Initial Service and shall terminate on
April 15, 2015.
EII-8. TRANSMISSION SERVICE CHARGE: $1.41 per kilowatt-month,
or as revised in accordance with Section 8.2, times
Transmission Service Entitlement.
EII-9. SCHEDULING FEE: $2,348 per month or as revised in
accordance with Section 8.3.
EII-10. TRANSMISSION LOSSES: 2.20% or as revised in accordance
with Section 7.
-EII-2-
AMENDMENT NO. 1
EXHIBIT II
TRANSMISSION SERVICE
FOR THE DEL RANCH POWER PLANT
[SEAL] IMPERIAL IRRIGATION DISTRICT
By: /S/ W.R. Condit
---------------------------------------
President, Board of Directors
DEL RANCH, LTD., a California
Limited Partnership
By: /S/ Russ L. Tenney
---------------------------------------
-EII-3-