EXHIBIT 10.48
VULCAN/BN
FUNDING AGREEMENT
1. PARTIES: The Parties to this Funding Agreement ("Agreement") are
Vulcan/BN Geothermal Power Company, a California partnership ("Seller") and
Southern California Edison Company ("Edison"), a California corporation,
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 On March 1, 1984, Edison and Magma Electric Co. ("Magma")
executed a Power Purchase Contract to provide the terms and conditions for the
sale by Magma and the purchase by Edison of electrical power from an electrical
generating facility located at Niland, California.
2.2 On May 10, 1984, Edison and Magma amended the Power Purchase
Contract (Amendment No. 1).
2.3 On January 4, 1985, Magma assigned its rights, title, and
interest in the Power Purchase Contract to Vulcan Power Company, to which
assignment Edison consented on January 11, 1985.
2.4 On August 30, 1985, Vulcan Power Company assigned its
rights, title, and interest in the Power Purchase Contract to Seller, to which
assignment Edison consented on September 25, 1985.
2.5 On April 1, 1986, Edison and Seller amended the Power
Purchase Contract (Amendment No. 2).
2.6 Seller is a signatory to the Funding and Construction
Agreement ("Funding and Construction Agreement") among the Imperial Irrigation
District ("IID") and independent power companies, listed as participants
("Participants") therein, which was executed on June 29, 1987. Seller's
capacity entitlement under the Funding and Construction Agreement is
sufficient to satisfy its capacity and energy deliveries under the Power
Purchase Contract.
2.7 Seller is, at the date of execution of this Agreement, in
full compliance with the terms and conditions of the Power Purchase Contract,
the Qualifying Facilities Milestone Procedure ("QFMP") and/or Edison's Tariff
Rule 21, as applicable.
2.8 Seller and Edison jointly agree that a transmission capacity
limit of 400 MW exists on the existing transmission line between Edison's
Mirage Substation and its Devers Substation (the "Mirage/Devers Line") and
that construction of additional transmission facilities may, in Edison's sole
judgment, be required to allow delivery of Seller's electrical energy and
capacity over the portion of Edison's system between Edison's Mirage and
Devers Substations. Such facilities shall hereinafter be referred to as the
"Additional Transmission Facilities."
2.9 Six (6) Qualifying Facility projects identified in Appendix
A, Appendix B, and Appendix C, attached hereto, have previously executed
Funding Agreements to pay a pro rata share of the Additional Transmission
Facilities.
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2.10 Seller acknowledges that, because of the transmission
priority of its project under the QFMP and/or Edison's Tariff Rule No. 21, it
may not be entitled thereunder to use the existing Mirage/Devers Line to
deliver its power to Edison. Therefore, Seller is willing to pay a portion of
the cost of the Additional Transmission Facilities which may be required to
accommodate transmission of its electrical energy and capacity, as further set
forth therein.
3. AGREEMENT: The Parties agree as follows:
4. TERM: This Agreement shall be effective upon execution by the
Parties and shall remain in effect until the earliest of (a) termination by
agreement of the Parties, (b) completion of the Additional Transmission
Facilities, or (c) January 1, 1995.
5. FUNDING ACCOUNT:
5.1 Within 30 days after the date of execution of this funding
agreement, Seller shall, in the amount determined pursuant to the formula set
forth herein, either (a) provide Edison with an irrevocable letter of credit
issued by a commercial lender acceptable to Edison in its sole judgment
allowing Edison to draw the funds for use consistent with the terms and
conditions of this Agreement, or (b) establish and fund an escrow account
governed by an escrow agreement in a form acceptable to Edison, consistent
with the terms and conditions of this Agreement. The escrow account or letter
of credit so established shall hereinafter be referred to as the "Funding
Account." The dollar amount of Seller's Funding Account shall be
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the amount specified in Appendix D hereto as Seller's funding contribution,
which is established as follows:
X = A x (B / C)
Where: X = Seller's Funding Account in dollars
A = Seller's MW capacity as specified in Appendix D
B = $3,150,000
C = 79 MW
Seller shall not be required to contribute any funds in excess of the amount
identified in Appendix D hereto as Seller's funding contribution.
5.2 Interest which may be paid to the Funding Account shall
accrue to the Funding Account and shall contribute to the principal when
earned. Seller shall not have any right to make withdrawals of accrued
interest unless and until the Funding Account is released to Seller pursuant
to Section 5.6 of this Agreement.
5.3 Edison shall have sole drawing rights on the funds contained
in the Funding Account. Edison may use those funds for payment of the costs
actually incurred by Edison to construct the Additional Transmission
Facilities determined necessary by Edison in its sole discretion to accept the
electric capacity and energy of Seller pursuant to the Power Purchase Contract
and to pay any taxes levied on those funds as contributions in aid of
construction.
5.4 Seller shall maintain the Funding Account in effect until
the termination of this Agreement pursuant to Section 4 hereof. Failure to do
so shall cause Seller to lose
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its rights to transmission capacity under this Agreement and shall cause
Edison's obligation to accept Seller's power pursuant to Sections 6.1 and 6.2
of this Agreement to terminate.
5.5 In the event of termination of this Agreement, Edison shall
not be obligated to reimburse Seller for any funds withdrawn from the Funding
Account in accordance with the terms and conditions of this Agreement.
5.6 In the event that this Agreement has terminated pursuant to
Section 4 hereof prior to the commencement of construction of the Additional
Transmission Facilities, Edison shall promptly release Seller's Funding
Account to Seller. Seller shall have no other right to terminate or withdraw
funds from the Funding Account.
6. OBLIGATIONS OF EDISON:
6.1 As long as Seller is in compliance with all of the terms and
conditions of this Agreement, Edison shall accept power from Seller pursuant
to Seller's Power Purchase Contract on the date of Firm Operation (as that
term is defined in the Power Purchase Contract) in the amount specified in
Appendix D hereto, under the terms and conditions of Section 6.2 of this
Agreement. Purchases from Seller shall be made pursuant to the Power Purchase
Contract for energy and capacity delivered to Edison's Mirage Substation (a)
during the term of this Agreement and (b) following termination of this
Agreement only if terminated pursuant to Section 4.
6.2 For that period of time between payment of funds pursuant to
Section 5.1 of this Agreement and completion
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and placing in service of the Additional Transmission Facilities, Seller's
access to transmission capacity between Edison's Mirage and Devers
substations, pursuant to this Agreement, shall be on an as-available and
interruptible basis. Upon completion and placing in service of the Additional
Transmission Facilities, Seller's access to such transmission capacity shall
be firm for the balance of the term of Seller's Power Purchase Contract.
6.3 In the event that Edison enters into an agreement with a
developer other than those listed in Appendix A, Appendix B, Appendix C, or
Appendix D, which requires the use of capacity on the Additional Transmission
Facilities, Edison shall require such developer to pay a portion of the costs
of the Additional Transmission Facilities. Such payment shall be in accordance
with the formula specified in Section 5.1 of this Agreement. Such payment
shall not affect Seller's funding contribution as specified in Appendix D.
7. OWNERSHIP: Edison shall own and operate any Additional
Transmission Facilities which may be constructed or installed to fulfill
Edison's obligations pursuant to this Agreement.
8. TAXES:
8.1 Edison shall pay ad valorem taxes and other taxes properly
attributed to the Additional Transmission Facilities.
8.2 Edison may, at its sole discretion, use funds from the
Funding Account to pay taxes levied on contributions in aid of construction.
However, Seller shall not be required to
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pay any tax, or provide any funds for the payment of any tax, in excess of its
funding contribution as set forth in Appendix D of this Agreement.
8.3 If requested by any taxing authority, Seller or Edison, as
the case may be, shall provide information in its possession concerning the
Additional Transmission Facilities to such taxing authority.
9. NONDEDICATION OF FACILITIES: Neither Party, by this Agreement,
dedicates any part of its facilities to the public or to the service provided
under the Power Purchase Contract, and such service shall cease upon
termination of the Power Purchase Contract.
10. NOTICE: All notices pertaining to this Agreement shall be in
writing and shall be sufficient if delivered in person or sent by certified
mail, postage prepaid, return receipt requested, to Seller or to Edison at the
following address:
If to Seller: Vulcan/BN Geothermal Power Company
c/o Vulcan Power Company, Partner
11770 Bernardo Plaza Court
Suite 366
San Diego, CA 92129
Attention: Secretary
If to Edison: Southern California Edison Company
Post Office Box 800
Rosemead, CA 91770
Attention: Secretary
All notices sent pursuant to this Section 10 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.
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11. PREVIOUS COMMUNICATIONS: This Agreement contains the entire
agreement between the Parties, their agents, and employees as to the
Additional Transmission Facilities, and merges and supersedes all prior
agreements, commitments, representations, and discussions between the Parties
relating thereto. No Party shall be bound to any other obligations,
conditions, or representations with respect to the subject matter of this
Agreement. Notwithstanding the foregoing, nothing in this Agreement shall be
construed to terminate, supersede or amend the Power Purchase Contract, except
if, and only to the extent, specifically set forth herein.
12. SUCCESSORS AND ASSIGNS: This Agreement shall not be assigned by
Edison without Seller's consent, which consent shall not be unreasonably
withheld. Seller may assign this Agreement with the written consent of Edison
only if such assignment is in conjunction with assignment of the Power
Purchase Contract. Any such assignment or delegation made without said written
consent shall be null and void. Edison's consent to such assignment shall not
be unreasonably withheld. Any assignment of this Agreement in conjunction with
assignment of the Power Purchase Contract shall be in full compliance with the
applicable terms and conditions of the Power Purchase Contract. Any assignment
of this Agreement shall not relieve the Seller of its primary liability for
any of its duties and obligations hereunder unless the assignee expressly
assumes those duties and obligations in writing.
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13. UNCONTROLLABLE FORCE: Neither Party shall be considered to be in
default in the performance of any of its obligations under this Agreement,
except for obligations to pay money, when and to the extent failure of
performance shall be caused by an uncontrollable force. The term
"uncontrollable force" shall mean any cause beyond the control of the Party
unable to perform such obligations including, but not limited to, failure of
or threat of failure of facilities, flood, earthquake, storm, drought, fire,
pestilence, lightning and other natural catastrophes, epidemic, war, riot,
civil disturbance or disobedience, strike, labor dispute, labor or material
shortage, sabotage, government priorities, restraint by court order or public
authority (whether valid or invalid), and action or nonaction by or inability
to obtain or keep the necessary authorizations or approvals from any
government agency or authority, which by exercise of due diligence such Party
could not reasonably have been expected to avoid and which by exercise of due
diligence it has been unable to overcome. Nothing contained in this Section 13
shall be construed as to require a Party to settle any strike or labor dispute
in which it may be involved.
14. EFFECT OF SECTION HEADINGS: Section headings appearing in this
Agreement are inserted for convenience only, and shall not be construed as
interpretations of text.
15. GOVERNING LAW: This Agreement shall be interpreted, governed, and
construed under the laws of the State
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of California as if executed and to be performed wholly within the State of
California.
16. SIGNATURES: IN WITNESS WHEREOF, the Parties hereto have executed
this Funding Agreement this 18 day of MAY, 1990.
SOUTHERN CALIFORNIA EDISON COMPANY
By /s/ Robert Dietch
Vice President
VULCAN/BN GEOTHERMAL POWER COMPANY
BY: VULCAN POWER COMPANY, PARTNER
By /s/ Jon R. Peele
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Name Jon R. Peele
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Title Vice President
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APPENDIX A
DEVELOPER PROJECT CAPACITY FUNDING
--------- ------- -------- -------
Western Power Imperial 15 MW $ 598,101.27
Group Unit II, Resource
Inc. Recovery (QFID
No. 1043)
Earth Energy, Salton Sea II 20 MW $ 797,468.35
Inc. (QFID No. 3028)
Magma Power Leathers (QFID 38 MW $1,515,189.35
Company No. 3026)
Ormesa Ormesa 1E 6 MW $ 239,240.51
Geothermal (QFID No. 3010)
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TOTAL APPENDIX A 79 MW $3,150,000.00
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APPENDIX B
DEVELOPER PROJECT CAPACITY FUNDING
--------- ------- -------- -------
Colmac Energy, Colmac Energy, 25.8 MW $1,028,734.20
Inc. Inc.
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APPENDIX C
DEVELOPER PROJECT CAPACITY FUNDING
--------- ------- -------- -------
Ormesa Ormesa 6.5 MW $ 259,177.22
Geothermal Geothermal
(QFID No. 3010)
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APPENDIX D
DEVELOPER PROJECT CAPACITY FUNDING
--------- ------- -------- -------
Magma Power Vulcan/BN* 6 MW $ 239,240.52
Company Geothermal
(QFID No. 3006)
Magma Power Del Ranch, Ltd. 4 MW $ 159,493.67
Company (QFID No. 3004)
Magma Power Elmore, Ltd. 4 MW $ 159,493.67
Company (QFID No. 3009)
Magma Power Leathers, L.P. 4 MW $ 159,493.67
Company (QFID No. 3026)
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TOTAL APPENDIX D 18 MW $ 717,721.50
* Seller
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