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EXHIBIT 10.9
Certain portions of this exhibit have been deleted and
confidentially filed with the Securities and Exchange Commission pursuant to a
confidential treatment request under Rule 406 under the Securities Act of
1933, as amended. The confidential portions of the exhibit that have been
deleted are indicated by "[*****]" inserted in place of such confidential
information.
Contract for Electric Power
Rate HLF, Transmission Delivery
AGREEMENT made this ______ day of February, 1995, by and between
ALABAMA POWER COMPANY, hereinafter called the Company, and SIMCALA, INC., a
Delaware corporation, hereinafter called the Consumer.
IN CONSIDERATION of the mutual agreements hereinafter contained, IT IS AGREED:
FIRST: That during the term of five (5) years from the beginning of
service (not later than the 8th day of February, 1995), and thereafter until the
expiration of at least one (1) year written notice by either party to the other
party of its intention to terminate this agreement. The Company shall maintain
sufficient line and transformer capacity to enable it to sell and deliver
electric power to the Consumer at a delivery point in Montgomery County, Alabama
described a follows: The point of connection between the Company's 115,000 volt
conductors and the Consumer's 115,000 volt conductors at the Consumer's silicon
metal plant premises near Mt. Meigs.
Service provided shall be for a capacity of [****] kilowatts in the
form of three-phase alternating current at approximately sixty hertz, from the
Company's 110,000 volt Transmission line.
SECOND: The Consumer's capacity (KVA or KW) and energy (KWH) used by
the Consumer shall be measured by meters and instruments installed and owned by
the Company. The Consumer shall pay a charge based on capacity established and
energy used each month in accordance with the rate schedule attached hereto and
made a part hereof or the lawful rate schedule which may replace the same
pursuant to regulation by the Alabama Public Service Commission or its successor
in function. Unless otherwise expressly provided, the words "month" and
"monthly" as used herein and in the applicable rate schedule shall not mean or
refer to a calendar month, but shall mean and refer to the period between
consecutive meter readings. Meters will be read by the Company at appropriate
intervals to determine the Consumer's capacity and the amount of energy used for
billing in accordance with the applicable rate schedule.
[*] Confidential treatment requested
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THIRD: A bill for the service supplied hereunder shall be rendered by
the Company for each month, and, if not paid at the Company's office within ten
(10) days next succeeding the due date of such bill, the Company may, at any
time thereafter, upon five days' written notice, suspend service, and, if not
paid within another period of fifteen (15) days, the Company may, at its option,
treat this agreement as terminated, and at an end, whereupon all rights of the
Consumer hereunder shall cease. The Consumer shall make weekly advance payments
of an estimated one (1) week power bill, until such time as Consumer's credit is
approved by the Company. The Company may, at its discretion, allow the Consumer
to make advance payments on other terms, such as bimonthly, during the period
prior to approval of the Consumer's credit by the Company.
The Company may however, extend the time for paying any one or more
bills, or any part thereof, and its action in so doing, whether by taking note
of the Consumer or anyone else with or without security or merely extending the
time for paying such bill or bills, shall be without prejudice, and by so doing
the Company shall not be held or considered as waiving any of its rights
hereunder, including its right at its option, thereafter to suspend service
and/or to treat this agreement as terminated and at an end.
FOURTH: All transformers, lines, wiring, switches, apparatus,
appliances, materials and equipment essential to render service (hereinafter
"equipment") up to the delivery point described in Article FIRST hereof, and all
the Company's metering equipment wherever placed, shall be owned, maintained and
operated by the Company, and shall at all times be subject to its inspection,
repair, replacement or alteration, and removable at its option. The Consumer
shall supply and prepare without charge to the Company a suitable site or sites
for such transformer substation as may be needed and shall also supply, without
charge to the Company, suitable accommodations for the Company's metering
equipment. All equipment on the Consumer's side of said delivery point shall be
supplied, owned, maintained and operated by and at the expense of the Consumer
with a view of securing a power factor as near 90% lagging as may be deemed
satisfactory for the Company. The Consumer shall be responsible for the
maintenance, repair and replacement of all equipment located an the Consumer's
side of said delivery point, and the Consumer agrees to keep Company's equipment
safe and in good operating condition and the Company shall not be held liable
for accidents or injuries or damages of any kind due to the condition of the
Consumer's equipment and the operation, maintenance and repair and replacement
thereof.
The Company shall not be in any way responsible for the transmission or
control of said electric energy on the Consumer's side of said delivery point
and the Company shall not be liable on account of injuries to persons or damages
to property resulting in any manner from the receipt, use or application by the
Consumer of such electric energy. The Company may, however, refuse to render
service or may discontinue service at any time and from time to time if the
Consumer's equipment is hazardous, or if the operation of such equipment
adversely affects the safe and economical operation of the Company's system, or
if the operation of such equipment adversely affects service to other Consumers.
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Each party hereto shall use reasonable diligence not to damage the
electrical equipment of the other and each party hereto shall reimburse the
other party for any injury to employees of the other party or damage to the
electrical equipment of the other party resulting from defects in the operation
and maintenance of its own electrical equipment or resulting from its negligence
or that of its agents or employees, and each party hereto shall indemnify the
other party against liability for injury or damage suffered by third parties
from any such defects and/or negligence.
The Consumer shall allow the Company free access and entry to the
Consumer's properties and premises and the Consumer hereby agrees to convey to
the Company such rights of way for transmission lines and easements for such
transformer substations on, over, and across the Consumer's property and
premises as may be required for the purpose of rendering service to the Consumer
and to others who may be economically served from such transmission lines and
substations.
FIFTH: If at any time the Consumer desires to increase the capacity
required to be maintained by the Company pursuant to the provisions of Article
FIRST hereof, ninety days' written notice thereof shall be given to the Company,
and the Company shall then make the required increase subject to the
availability of equipment and to the rules, regulations and conditions under
which the Company may then be operating. Should the capacity herein required to
be maintained exceed the Consumer's maximum integrated fifteen-minute capacity
by 25% or more for a period of six consecutive months, the Company may upon
thirty (30) days' written notice, decrease the said required capacity to
approximately the amount of such maximum integrated fifteen-minute capacity,
subject to increase again only as above provided.
In the event the Consumer's maximum integrated fifteen-minute capacity
exceeds the capacity required to be maintained hereunder, the supplying of such
capacity by the Company shall not be deemed to constitute a waiver of the
aforesaid notice and the Consumer will reduce such maximum capacity to the
capacity stated in Article FIRST at any time upon written notice from the
Company and will thereafter keep within said capacity until increased as herein
provided. The Consumer shall be liable for all damages resulting to the Company
by reason of any such excess or excesses. The Company may interrupt the service
without notice at any time a momentary overload shall exceed said capacity by
more than 50%, but shall be under no duty to do so.
SIXTH: Electric energy furnished hereunder may be used by the Consumer
for lighting and other purposes incidental and necessary to the primary
operations of the Consumer. The Company, however, shall be under no duty or
obligation hereunder to render a reduced or regulated voltage suitable for such
lighting service or critical leads sensitive to voltage fluctuations. In the
event the voltage or the regulation of the energy furnished hereunder is found
by the Consumer to be unsatisfactory for such purposes, suitable voltage
regulating and transforming apparatus may be installed at the expense of the
Consumer.
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The Consumer agrees not to use any electric power at the premises
served hereby other than that furnished hereunder without the written consent of
the Company, and the Consumer further agrees not to sell or dispose of any power
furnished hereunder, or which may be generated directly or indirectly therefrom,
without the written consent of the Company.
SEVENTH: The obligations of the Company hereunder are dependent upon
its securing and retaining the necessary rights, easements, privileges,
franchises, permits and equipment and the Company shall not be liable to the
Consumer in the event it is delayed in the delivery of power or is prevented
from delivering the power herein provided for by its inability to secure and
retain such rights, easements, privileges, franchises, permits and equipment. In
the event the Company is delayed in delivering power from any of the above
causes, the time fixed for the commencement of the term of this Agreement shall
be extended for a period equal to such delay. If the delivery of electric power
is interrupted due to an act of God or nature, such as but not limited to, wind,
lightning, storms or flood, or from injunction or strike, or from riot or
invasion, or from fire or accident, or from breakdown or failure of its system
or from maintenance or repairs of its system, or temporarily from connecting new
customers or from interruption in an emergency threatening the integrity of its
system, or from any other cause reasonably beyond the Company's control, the
Company shall not be liable to the Consumer for such interruption but shall use
its best efforts to restore the service promptly. During such interruptions, the
Consumer shall have the right to use such other power as may be available,
provided that Company-owned facilities are not energized from another power
source.
The obligations of the Company under this agreement are subject to all
laws, rules and regulations under which the Company may from time to time be
operating and are further dependent upon and subject to the demands or
priorities of the United States Government and the State of Alabama, and the
Company shall not be obligated hereunder to continue the delivery of any
quantity of electric power in the event it is required to supply such power to
the United States Government or to the State of Alabama or to any person, firm,
corporation or governmental entity designated by the United States Government or
the State or Alabama.
In the event the Consumer shall make an assignment for the benefit of
the Consumer's creditors, or voluntary or involuntary proceedings in bankruptcy
are initiated seeking to adjudge the Consumer a bankrupt, or if the Consumer be
adjudged a bankrupt, or if the Consumer's affairs be placed in the hands of any
court for administration or if the Consumer shall fail to comply with the terms
hereof, this agreement shall, at the Company's Option, thereupon terminate and
be at an end.
EIGHTH: A waiver of one or more defaults by either party hereto shall
not be considered a waiver of any other or subsequent default by such party.
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NINTH: Before this agreement shall be binding upon the Company it must
be approved in writing and endorsed below by an authorized official of the
Company. All previous communications between the parties hereto, whether verbal
or written, with reference to the subject matter of this agreement are hereby
abrogated, and no modification hereof shall be binding unless it shall be in
writing duly accepted by the Consumer and approved by an authorized official of
the Company.
This agreement shall not be assigned by the Consumer without the
written consent of the Company.
TENTH: Article TENTH consisting of two (2) pages is attached to and
made a part of this contract. The information contained in this Article TENTH is
customer confidential and proprietary information.
ELEVENTH: This contract shall not become effective until it has been
filed with and approved by the Alabama Public Service Commission, whereupon it
will cancel and supersede the contract between the Company and Ohio Ferro-Alloys
Corporation dated February 3, 1987.
ALABAMA POWER COMPANY
SIMCALA, INC. By: /s/
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Consumer Manager-Power Contracts
By: /s/
--------------------------------- Approved:
President ALABAMA POWER COMPANY
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Official Capacity
By: /s/
-------------------------------
Its: Vice President - Marketing
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CUSTOMER
CONFIDENTIAL
ARTICLE TENTH
INCREMENTAL ENERGY
Attached to and made a part of the Contract for Electric Power between Alabama
Power Company (hereinafter called "the Company") and Simcala, Inc. (hereinafter
called "the Consumer") dated ______________________________ . WHEREAS, by reason
of the Consumer's unusual operations and particularly since the Consumer can,
upon notice from the Company, reduce its electric load to a predetermined level
and is willing to do so, the Company agrees to supply Incremental Energy in lieu
of the HLF Capacity required to be maintained in Article FIRST of this Contract,
in accordance with the provisions set forth below.
(A) DEFINITIONS
(1) "Incremental Energy" or "IE" means that energy consumed by
the submerged arc furnaces. These loads are defined as electrothermal loads and
may be exempt by the State of Alabama Department of Revenue from certain state
utility taxes.
(2) "IE Capacity" means the capacity associated with
Incremental Energy (IE) and shall be the maximum Integrated fifteen (15) minute
capacity during each billing period measured in kilowatts (KW) by an appropriate
capacity meter, but not less than [****] KW.
(B) CHARGES: The charges for IE effective January 31, 1995 are as
follows: BILLING MONTHS OF JUNE THROUGH OCTOBER
10:00 A.M. - 9:00 P.M., Monday through Friday [****] cents/KWH
All other hours [****] cents/KWH
[*] Confidential treatment requested
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BILLING MONTHS OF NOVEMBER THROUGH MAY
7:00 A.M. - 9:00 P.M., Monday through Friday [****] cents/KWH
All other hours [****] cents/KWH
Charges for IE are subject to the provisions of the Company's Rate ECR (Energy
Cost Recovery), Rate RSE (Rate Stabilization and Equalization), Rate CNP
(Adjustment for Commercial Operation of Certified New Plant), Rate T (Tax
Adjustment) or its successor(s) in function.
(C) INTERRUPTION OF INCREMENTAL ENERGY SERVICE
The delivery of the IE Capacity shall be subject to suspension at the
Company's discretion, as set forth below. No credits are associated with the
suspension of the delivery of IE Capacity. Upon four (4) hour's advance notice
from the Company to the Consumer (except, however, in the event of an emergency
on the Company's system, the time specified in the notice shall be for such
shorter time period, as little as fifteen (15) minutes, as the emergency
circumstances may, in the Company's judgment, require), the delivery of IE shall
be subject to suspension for any period or periods of time, except as limited
hereinafter. Such notice may be either oral or written, but if given orally
shall be promptly confirmed in writing to the Consumer's representative
designated to receive such notices. Any continuous period during which the
deliver of IE is suspended is hereinafter referred to as a "Suspension Period."
The total time of Suspension Periods associated with IE shall not exceed eight
(8) hours per day nor six hundred (600) hours per calendar year. There shall be
only one (1) such Suspension Period per day, and no more than five (5) such
Suspension Periods during any week (Sunday through Saturday).
(D) The Consumer agrees that whenever the Company suspends delivery of
IE Capacity, it will reduce its load to 2,000 KW or to such lesser amount as the
Consumer, at its option, may desire.
[*] Confidential treatment requested
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(E) The Consumer shall pay a compliance incentive of [***] for each KW
of IE Capacity above 2,000 KW taken by the Consumer during each such Suspension
Period imposed during the term of this Contract.
(F) The MINIMUM BILL provisions of Rate HLF will apply to the IE
Capacity as defined in paragraph (A)(2) above.
[*] Confidential treatment requested.
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AMENDMENT NO. 1
TO THE
CONTRACT FOR ELECTRIC POWER
THIS AMENDMENT is entered into as of July 8, 1997, by and between
SIMCALA, INC., a Delaware corporation ("Customer"), and ALABAMA POWER COMPANY
("Company").
WHEREAS, the Company and the Customer have entered into a Contract for
Electric Power dated February 8, 1995 for electric service to the Customer's
silicon metal plant located near Mt. Meigs; and
WHEREAS, the Customer desires to change the Contract capacity
requirements of the plant to incorporate an additional furnace at the plant; and
WHEREAS, the Company is willing to make such changes under the terms
and conditions set forth below:
NOW THEREFORE, in consideration of the premises and the mutual
covenants of the parties, the parties agree as follows:
1. As of the effective date set forth above, the Capacity
references in Article FIRST and TENTH of the Contract shall be
revised by deleting the reference to [****] KW and
substituting [****] KW.
Except as modified by this Amendment No. 1, all terms and conditions of the
Contract shall remain in full force and effect.
WHEREFORE, each of the parties has executed this Amendment as of the
effective date hereof by its duly authorized representatives.
SIMCALA, INC. ALABAMA POWER COMPANY
By: /s/ By: /s/
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Its: Pres/CEO Its: VP - Marketing
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[*] Confidential treatment requested