Exhibit 10.4
RESTATED TRANSMISSION AGREEMENT
BETWEEN
PACIFICORP
AND
ARIZONA PUBLIC SERVICE COMPANY
Index of Sections
Page
PARTIES ..............................................1
RECITALS ..............................................1
AGREEMENT ..............................................4
Section 1. Term..........................................4
Section 2. Regulatory Approval and Termination...........4
Section 3. Phoenix/Mead Line.............................5
Section 4. Navajo loop-In Project/Alternate
Arrangements..................................5
S7ection 5. Transmission Interconnection with
Northwest Utilities...........................5
Section 6. PacifiCorp Transfer Rights....................7
Section 7. Western Area Power Administration
Transmission Rights...........................7
Section 8. Scheduling....................................9
Section 9. Uncontrollable Forces.........................9
Section 10. Indemnification..............................10
Section 11. Assignment...................................11
Section 12. Miscellaneous................................11
i
RESTATED TRANSMISSION AGREEMENT
PARTIES
The Parties to this Restated Transmission Agreement ("Agreement"),
dated this 5th day of April, 1995, are PacifiCorp, an Oregon corporation and
Arizona Public Service Company, an Arizona corporation ("APS"). APS and
PacifiCorp are sometimes referred to collectively as "Parties" and individually
as "Party."
RECITALS
WHEREAS, PacifiCorp and APS are engaged in the generation,
transmission and distribution of electric power and energy; and
WHEREAS, the Parties have resolved to enhance the efficient operation
of their respective systems by taking advantage of the diversity of their loads
and generation facilities; and
WHEREAS, on September 21, 1990, the Parties entered into a series of
contracts, including a Transmission Agreement, as amended by an October 11, 1990
Letter Agreement and an October 1, 1993 Amendment No. 1 between the Parties to
achieve such efficiencies; and
WHEREAS, the Parties intend to continue to study and discuss
additional arrangements which will enhance efficiency and inure to the benefit
of their customers and, to that end, have executed Amendment No. 1 to the
Long-Term Power Transactions Agreement and Asset Purchase and Power Exchange
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Agreement ("Amendment No. 1") of even date herewith and have determined that
this Restated Transmission Agreement should be substituted for the original
Transmission Agreement, as amended; and
WHEREAS, PacifiCorp owns a 345 kV transmission line from Sigurd, Utah
that interconnects at the Utah/Nevada border with a 345 kV transmission line
owned by the Nevada Power Company that is interconnected with the Harry Allen
Substation in Southern Nevada which collectively are hereinafter referred to as
the "Sigurd/Harry Allen line;" and
WHEREAS, PacifiCorp and Nevada Power Company have had discussions
regarding the potential of significantly increasing the transfer capability
between Nevada and Utah either by upgrading the existing Sigurd/Harry Allen line
or constructing a parallel line (hereinafter referred to as the "Sigurd Upgrade
Project"); and
WHEREAS, APS, along with a number of other entities, is a participant
in the Mead-Phoenix project which, among other things, is expected to result in
the construction of a 500 kV transmission line from Phoenix, Arizona to the Mead
Substation in Nevada (hereinafter referred to as the "Phoenix/Mead line") and an
interconnection of the Mead Substation and the Harry Allen Substation at a new
substation in Southern Nevada presently referred to as "Marketplace"; and
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WHEREAS, it is expected that as a result of the Mead- Phoenix Project,
APS will have at least 200 MW of bidirectional firm transmission rights between
Phoenix and Marketplace; and
WHEREAS, the Sigurd Substation is interconnected to transmission lines
going north to interconnect with Montana Power Company and Idaho Power Company
at the Brady Substation, and potentially The Washington Water Power Company
(hereinafter referred to as the "Northwest Utilities"), and Idaho Power Company
at the Borah Substation; and
WHEREAS, at such time as the Mead-Phoenix Project and the Sigurd
Upgrade Project are completed, there will exist a major new transmission path
interconnecting utilities in the Desert Southwest with PacifiCorp and the
Northwest Utilities; and
WHEREAS, APS and other entities in the Desert Southwest are
considering interconnecting the Navajo Generating Station switchyard to the Glen
Canyon Generating Station switchyard, hereinafter referred to as the "Navajo
Loop-In Project"; and
WHEREAS, the Sigurd Upgrade Project and the Navajo Loop-In Project are
not anticipated to be completed in a timely fashion, if at all; and
WHEREAS, APS wishes to engage in the purchase, sale and exchange of
power and energy with Northwest Utilities and PacifiCorp wishes to engage in the
purchase, sale and exchange of power with utilities in the Desert Southwest; and
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WHEREAS, APS and PacifiCorp are concurrently with the signing of this
Agreement, contracting with the Western Area Power Administration ("Western")
for transmission service between the Glen Canyon 230 kV Substation and Western's
230 kV Pinnacle Peak Substation;
NOW, THEREFORE, in consideration of the mutual covenants set forth
below, the Parties agree as follows:
AGREEMENT
1. Term
This Agreement shall be effective and shall replace the Transmission
Agreement in its entirety upon (i) execution of a Firm Transmission Service
Contract between APS, PacifiCorp and the U.S. Department of Energy, Western,
Salt Lake City Area Integrated Projects ("Western Transmission Contract") as
described in Section 7 and (ii) its acceptance or approval for filing by the
Federal Energy Regulatory Commission ("FERC"), and shall terminate on the same
date that the Asset Purchase and Power Exchange Agreement dated September 21,
1990 ("Asset Agreement") between the Parties terminates.
2. Regulatory Approval and Termination
2.01 PacifiCorp shall file this Agreement and Amendment No. 1 with the
FERC. APS shall file a letter of concurrence supporting PacifiCorp's filing of
this Agreement and Amendment No. 1 with the FERC. If the FERC issues an order
not accepting either agreement for filing in their entirety and without material
change, the Parties shall exercise best
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efforts to amend the agreements to comply with the FERC order or negotiate
replacement agreements providing similar benefits to both Parties. In the event
such amendment or replacement agreements are not executed by the Parties within
sixty days following the FERC's issuance of such order, this Agreement and
Amendment No. 1 shall terminate and be of no further force or effect and the
Transmission Agreement dated as of September 21, 1990, shall remain in full
force and effect.
2.02 The rates for service specified herein, and the provisions
contained herein for services to be provided without separate charge, shall
remain in effect for the term of this Agreement and shall not be subject to
change through application to the FERC pursuant to Section 205 of the Federal
Power Act absent the agreement of PacifiCorp and Arizona.
3. Phoenix/Mead Line
APS shall work in good faith with other affected entities to cause the
Phoenix/Mead Line to be in service by the end of 1996.
4. Navajo Loop-In Project/Alternate Arrangements
If the Navajo Loop-In Project is completed, or if APS or PacifiCorp
construct transmission facilities or enter into other commercial arrangements
that negate APS' or PacifiCorp's need to maintain its contractual rights under
the Western Transmission Contract, either Party may, upon mutual agreement of
the Parties, which agreement shall not be unreasonably withheld, terminate its
participation in the Western
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Transmission Contract. A Party shall not be required to agree to such
termination unless, upon its sole determination, such Party determines that it
will not incur any additional costs or there will be no adverse operational
impacts to its system as a result of such termination.
5. Transmission Interconnection with Northwest Utilities
5.01 During the term of this Agreement, APS shall have 100 MW of net
bidirectional firm transfer rights through PacifiCorp's system between the Glen
Canyon/Four Corners Substations and the Borah/Brady Substations in Idaho;
however, the sum of North-bound transfers and South-bound transfers shall not
exceed 300 MW in any hour.
5.02 Upon the later of: (i) the completion of the Phoenix/Mead Line or
(ii) May 15, 1997, and for the balance of the term of this Agreement, APS shall
have an additional firm right to transfer 150 MW from the Borah/Brady Substation
over PacifiCorp's system to the Four Corners/Glen Canyon Substations. In
addition to APS' rights to transfer 150 MW from the Borah/Brady Substations to
the Four Corners/Glen Canyon Substations, APS shall have the right to make
and/or accept deliveries at the Glen Canyon Substation as described in the
Western Transmission Contract.
5.03 PacifiCorp shall provide the services described in Subsections
5.01 and 5.02 without charge to APS.
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6. PacifiCorp Transfer Rights
6.01 Upon the later of: (i) the completion of the Phoenix/Mead Line or
(ii) May 15, 1997, and for the balance of the term of this Agreement, PacifiCorp
shall have a firm right to deliver up to 150 MW from the Phoenix terminal of the
Phoenix/Mead Line to the Mead Substation (or to the Marketplace Substation, if
such is constructed) from APS' firm rights. PacifiCorp's 150 MW Phoenix/Mead
delivery rights are in addition to a 350 MW net scheduling right provided under
Section 15 of the Asset Agreement. In addition to PacifiCorp's rights to deliver
up to 150 MW from the Phoenix terminal of the Phoenix/ Mead line to the Mead
Substation (or to the Marketplace Substation, if such is constructed),
PacifiCorp shall have the right to make and/or accept deliveries at the Pinnacle
Peak Substation as described in the Western Transmission Contract.
6.02 Except as provided for in Section 16 of the Asset Agreement, APS
shall provide the transmission services described in Subsection 6.01 without
charge to PacifiCorp.
7. Western Area Power Administration Transmission Rights
7.01 Except as provided for in Section 4, effective the later of (i)
May 15, 1997 or (ii) the completion of the Phoenix-Mead Transmission Project,
and for the balance of the term of this Agreement, the Parties shall contract
with Western for firm, bidirectional transmission service between the Glen
Canyon Substation and Western's Pinnacle Peak Substation in amounts necessary to
allow for the transfers specified in
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Sections 5 and 6 and to allow for the seasonal exchange provided in Section 3.3
of the Long-term Power Transaction Agreement dated September 21, 1990, as
amended. The cost of the aforementioned transmission service (hereinafter
referred to as "Western Transfer Rights") shall be shared equally between the
Parties unless otherwise mutually agreed.
7.02 APS shall have first priority use of the north- to-south transfer
capability available from the Western Transfer Rights. PacifiCorp shall have
first priority use of the south-to-north transfer capability available from the
Western Transfer Rights.
7.03 At such times as either Party is not making use of its
first-priority use of the Western Transfer Rights as set forth in Subsection
7.02, such use shall be made available to the other Party for nonfirm
transactions at no charge. It is understood that use by one Party of the other
Party's Western Transfer rights, unless otherwise mutually agreed, is on a
nonfirm basis and such use may be interrupted or curtailed by the Party with
first-priority rights at any time.
7.04 At such times as some or all of the Western Transfer Rights are
not available, the Parties shall use best efforts to reschedule deliveries
previously scheduled under the Western Transfer Rights to mutually agreed
alternate point(s) of delivery; provided, however, a Party shall not be required
to interrupt or curtail its other firm schedules at any such alternate point(s)
of delivery in order to accommodate
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deliveries previously scheduled under the Western Transmission
Contract.
8. Scheduling
PacifiCorp and APS shall preschedule their transfer requirements no
later than 1000 hours MST on each work day observed by both Parties immediately
preceding the day(s) of delivery, or as otherwise mutually agreed by the
Parties' dispatchers or schedulers. The Parties shall make delivery in
accordance with preschedules, unless otherwise mutually agreed, which comply
with the applicable transfer rights set forth in Sections 5 and 6. All
deliveries shall be deemed to be made during the hours and in the amounts as
accounted for in the APS and PacifiCorp system logs. However, if scheduled
deliveries are interrupted due to an Uncontrollable Force as defined in Section
9, such schedules shall be adjusted to reflect such interruption.
9. Uncontrollable Forces
Neither Party to this Agreement shall be considered to be in default
in the performance of any obligation hereunder if failure to perform shall be
due to an Uncontrollable Force. The term "Uncontrollable Force" means any cause
beyond the control of the Party affected, including, but not limited to, failure
of facilities, flood, earthquake, storm, fire, lightening, epidemic, war, riot,
civil disturbance, labor disturbance, sabotage, restraint by court order or
public authority, which by exercise of due foresight, such Party could
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not reasonably have been expected to avoid, and which by exercise of due
diligence would not be able to overcome. The Parties shall not, however, be
relieved of liability for failure of performance if such failure is due to
causes arising out of removable or remediable causes which it fails to remove or
remedy with reasonable dispatch. Any Party rendered unable to fulfill any
obligation by reason of an Uncontrollable Force shall exercise due diligence to
remove such inability with all reasonable dispatch. Nothing contained herein,
however, shall be construed to require a Party to prevent or settle a strike
against its will.
10. Indemnification
Neither Party ("First Party") shall be liable, whether in warranty,
tort, or strict liability, to the other Party ("Second Party") for any injury or
death to any person, or for any loss or damage to any property, caused by or
arising out of any electric disturbance of the First Party's electric system,
whether or not such electric disturbance resulted from the First Party's
negligent act or omission. Each Second Party releases the First Party from, and
shall indemnify and hold harmless the First Party from, any such liability. As
used in this Section, (1) the term "Party" means, in addition to such Party
itself, its agents, directors, officers, and employees; (2) the term "damage"
means all damage, including consequential damage; and (3) the term "persons"
means any person, including those not connected with either Party to this
Agreement.
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11. Assignment
Neither Party shall assign this Agreement without the prior written
consent of the other Party, except:
(a) to any corporation into which or with which the Party making
the assignment is merged or consolidated or to which the Party transfers
substantially all of its assets;
(b) to any person or entity wholly owning, wholly owned by, or
wholly owned in common with the Party making the assignment.
Subject to the foregoing restrictions in this Section, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the Parties and their respective successors and assigns.
12. Miscellaneous
12.01 Amendment. This Agreement may be amended only by an instrument
in writing executed by the Parties which expressly refers to this Agreement and
states that it is an amendment hereto.
12.02 Section and Paragraph Headings. The section and paragraph
headings contained in this Agreement are for reference purposes only and shall
not in any way affect the meaning or interpretation of this Agreement.
12.03 Waiver. Any of the terms or conditions of this Agreement may be
waived at any time and from time to time, in writing, by the Party entitled to
the benefit of such terms or conditions.
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12.04 Choice of Law. This Agreement shall be subject to and be
construed under the laws of the State of Arizona.
12.05 Notices. All notices, requests, demands, and other
communications given by APS or PacifiCorp shall be in writing and shall be
deemed to have been duly given when delivered personally or when deposited into
the United States mail, to the following addresses:
To APS: Arizona Public Service Company
Corporate Secretary
P.O. Box 53999
Phoenix, AZ 85072-3999
To PacifiCorp: PacifiCorp
Sr. Vice President,
Wholesale Transactions & Transmission
700 N.E. Multnomah Blvd.
Portland, OR 97232
or to such other address as APS or PacifiCorp may designate in writing.
12.06 Integrated Agreement. This Agreement constitutes the entire
agreement between the Parties hereto, and supersedes all prior agreements and
understandings, oral and written, among the Parties hereto with respect to the
subject matter hereof.
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IN WITNESS WHEREOF, the Parties have signed this Agreement as of the
date first above written.
Pacificorp
By Brian D.Sickels
---------------------------------------
Title: Vice President, Power Systems
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Arizona Public Service Company
By Jack E. Davis
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Title: Vice President,
Generation and Transmission
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