Exhibit 10.6
RECIPROCAL TRANSMISSION SERVICE AGREEMENT
BETWEEN
ARIZONA PUBLIC SERVICE COMPANY
AND
PACIFICORP
APS Contract No. 48138
By Federal Energy Regulatory Commission ("FERC") order/ notice of acceptance
dated ___________________ in FERC Docket No. ___________, this Agreement,
Arizona Public Service Company Rate Schedule FERC Rate Schedule No. , and
PacifiCorp FERC Rate Schedule No. ______, was accepted for filing and permitted
to become effective in accordance with Section of this Agreement on the _____
day of _________________, 19____.
EXECUTION COPY
APS Contract No. 48138
EXHIBIT 10.6
RECIPROCAL TRANSMISSION SERVICE AGREEMENT
BETWEEN
ARIZONA PUBLIC SERVICE COMPANY
AND
PACIFICORP
TABLE OF CONTENTS
-----------------
1. PARTIES............................................................ 1
2. RECITALS........................................................... 1
3. ENTIRE AGREEMENT................................................... 3
4. DEFINITIONS........................................................ 3
4.1 Authorized Representative(s)................................. 3
4.2 Cholla/Four Corners System:.................................. 3
4.3 Due Date..................................................... 3
4.4 FERC......................................................... 3
4.5 Four Corners/Borah-Brady System:............................. 3
4.6 Interest..................................................... 4
4.7 kV........................................................... 4
4.8 kWh.......................................................... 4
4.9 MW........................................................... 4
4.10 Point of Delivery............................................ 4
4.11 Point of Receipt............................................. 4
4.12 Reciprocal Transmission Demand............................... 4
4.13 Reciprocal Transmission Service.............................. 5
4.14 Transmission Demand.......................................... 5
4.15 Transmission Service......................................... 5
4.16 Uncontrollable Force......................................... 5
5. SPECIAL PROVISIONS................................................. 6
5.1 Reciprocal Transmission Service.............................. 6
5.2 Effective Date, Acceptance and Term.......................... 6
5.3 Authorized Representatives:.................................. 8
6. RATES FOR TRANSMISSION SERVICE..................................... 9
7. GENERAL TERMS AND CONDITIONS....................................... 9
7.1 Notifications................................................ 9
7.2 Electrical Load Characteristics.............................. 10
7.3 Uncontrollable Force......................................... 11
7.4 Indemnity.................................................... 11
7.5 Waiver....................................................... 12
7.6 Billing and Payment.......................................... 12
7.7 Unilateral Action............................................ 13
7.8 Assignment................................................... 13
7.9 Regulatory Fees.............................................. 14
7.10 Third Party Beneficiaries.................................... 15
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APS Contract No. 48138
7.11 Applicable Law............................................... 15
7.12 Nondedication of Facilities.................................. 15
7.13 Interruptions................................................ 15
EXHIBIT A............................................................. A-1
APS Contract No. 48138
RECIPROCAL TRANSMISSION SERVICE AGREEMENT
BETWEEN
ARIZONA PUBLIC SERVICE COMPANY
AND
PACIFICORP
1. PARTIES:
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The Parties to this Reciprocal Transmission Service Agreement ("Agreement")
are ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation ("APS") and
PACIFICORP, an Oregon corporation ("PacifiCorp"), hereinafter collectively
referred to as "Parties" and individually as "Party."
2. RECITALS:
--------
This Agreement is entered into with reference, in part, to the
following:
2.1 APS and PacifiCorp are engaged in the generation, transmission and
distribution of electric power and energy in the western United
States.
2.2 The Parties have taken steps through a series of prior agreements to
enhance the efficient operation of their respective systems by
taking advantage of the diversity of their loads and generation
facilities.
2.3 PacifiCorp owns the Cholla Unit No. 4 at the Cholla Generation
Station and has increased the net generating capability of the
Cholla Unit No. 4 from 350 MW to 380 MW effective October 1, 1993.
2.4 To integrate the increase in the net generating capability of the
Cholla Unit No. 4 into PacifiCorp's system, PacifiCorp
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APS Contract No. 48138
has requested south to north firm transmission service from APS, on
the Cholla/Four Corners System, in addition to the transmission
service provided by APS under the September 21, 1990 transmission
agreement between the Parties.
2.5 Pending the execution of this Agreement and acceptance for filing by
the FERC, APS has been providing firm transmission service for the
increase in the net generating capability of the Cholla Unit No. 4
under the terms and conditions of the Western System Power Pool
Agreement.
2.6 APS desires south to north firm Transmission Service on the Four
Corners/Borah-Brady System.
2.7 In keeping with the Parties' continuing efforts to study and discuss
additional arrangements to benefit the Parties and enhance the
efficiencies of their respective systems which will inure to the
benefit of their customers, and in the event PacifiCorp's Four
Corners/Borah-Brady System is able to accommodate Reciprocal
Transmission Service, APS and PacifiCorp recognize the mutual
benefits of and agree to provide Reciprocal Transmission Service to
each other over the Cholla/Four Corners System and the Four
Corners/Borah- Brady System, respectively, under the terms hereof.
2.8 Until the Four Corners/Borah-Brady System is able to accommodate
additional transmission for APS, which will initiate such Reciprocal
Transmission Service, APS agrees to provide PacifiCorp with
Transmission Service under the terms hereof.
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APS Contract No. 48138
3. ENTIRE AGREEMENT:
----------------
This Agreement shall constitute the entire contract between the Parties and
shall supersede all prior proposals, agreements, representations,
negotiations, or letters pertaining to the Reciprocal Transmission Service
to be provided hereunder, whether written or oral. The Parties shall not be
bound by or be liable for any statement, representation, promise,
inducement, or understanding of any nature not set forth in this Agreement.
Any changes to the provisions of this Agreement shall not be valid unless
mutually agreed upon in writing by the Parties.
4. DEFINITIONS:
-----------
The following terms, when used in this Agreement shall have the
meanings specified:
4.1 Authorized Representative(s): A representative of APS and a
representative of PacifiCorp who are authorized to act in behalf of
their respective Party in the implementation of this Agreement.
4.2 Cholla/Four Corners System: APS' electric transmission system
between the Cholla Power Plant 500 kV switchyard and the Four
Corners Power Plant 345 kV switchyard.
4.3 Due Date: The Fifteenth (15th) calendar day after the invoice date
or after the facsimile date of the invoice, whichever is earlier.
4.4 FERC: The Federal Energy Regulatory Commission.
4.5 Four Corners/Borah-Brady System: PacifiCorp's
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APS Contract No. 48138
electric transmission system between the Four Corners Power Plant
345 kV switchyard and the Borah and Brady substations in southern
Idaho.
4.6 Interest: Interest compounded monthly at the rate per annum quoted
by Citibank, NA, New York, New York as the prime interest rate
quoted as of the first day of each month in which a payment is
overdue, plus three percent (3%). APS may change the designated
banking institution stated herein by providing PacifiCorp with
fifteen (15) day advance written notice.
4.7 kV: Kilovolt or kilovolts.
4.8 kWh: Kilowatt-hour or kilowatt-hours.
4.9 MW: Megawatt or Megawatts.
4.10 Point of Delivery: For the Cholla/Four Corners System, the point of
interconnection between the Parties in the Four Corners Power Plant
345 kV switchyard and, for the Four Corners/Borah-Brady System, the
Borah and/or Brady Substations.
4.11 Point of Receipt: For the Cholla/Four Corners System, the point of
interconnection between the Parties in the Cholla Power Plant 500 kV
switchyard and, for the Four Corners/Borah-Brady System, the point
of interconnection between APS and PacifiCorp in the Four Corners
Power Plant 345 kV Switchyard.
4.12 Reciprocal Transmission Demand: For the Cholla/Four Corners System,
the 30,000 kW of firm transmission capacity APS shall
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APS Contract No. 48138
be obligated to provide for PacifiCorp on the Cholla/Four Corners
System from the Point of Receipt to the Point of Delivery. For the
Four Corners/Borah-Brady System, the 30,000 kW of firm transmission
capacity PacifiCorp is obligated to provide for APS on the Four
Corners/Borah-Brady System from the Point of Receipt to the Point of
Delivery.
4.13 Reciprocal Transmission Service: The firm transmission capacity
provided by APS to PacifiCorp over the Cholla/Four Corners System
from the Point of Receipt to the Point of Delivery and by PacifiCorp
to APS over the Four Corners/Borah-Brady System from the Point of
Receipt to the Point of Delivery up to the Reciprocal Transmission
Demand at no cost to the Parties.
4.14 Transmission Demand: The 30,000 kW of firm capacity APS shall be
obligated to provide and PacifiCorp is obligated to pay for on the
Cholla/Four Corners System from the Point of Receipt to the Point of
Delivery.
4.15 Transmission Service: The firm capacity provided by APS to
PacifiCorp from south to north over the Cholla/Four Corners System
from the Point of Receipt to the Point of Delivery up to the
Transmission Demand in accordance with the rates and charges in
Section .
4.16 Uncontrollable Force: Any cause beyond the control of the Party
affected, including, but not limited to, failure of facilities,
flood, earthquake, storm, fire, lightning, epidemic, war, riot,
civil disturbance, labor disturbance,
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APS Contract No. 48138
sabotage, restraint by court order or public authority, which by
exercise of due diligence would not be able to overcome.
5. SPECIAL PROVISIONS:
------------------
5.1 Reciprocal Transmission Service: The Parties shall provide each
other Reciprocal Transmission Service; however, the Parties'
obligations to provide the Reciprocal Transmission Service shall not
begin until such time as the Four Corners/Borah-Brady System, as
solely determined by PacifiCorp, has sufficient capacity to provide
APS all of its Reciprocal Transmission Demand. Until such time,
PacifiCorp shall pay APS for Transmission Service on the Cholla/Four
Corners System. Reciprocal Transmission Service shall begin on the
first day of the calendar month following the month PacifiCorp
determines that transmission capacity is available on the Four
Corners/Borah-Brady System.
5.2 Effective Date, Acceptance and Term:
5.2.1 This Agreement shall become effective upon execution and
acceptance for filing by the FERC and permitted to become
effective under the rules and regulations of the FERC.
5.2.2 The Parties agree to waiver of FERC's filing and notice
requirements in order to permit the early filing and
acceptance of this Agreement.
5.2.3 The Parties agree to fully participate in any FERC hearing
and/or court proceeding regarding this Agreement.
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APS Contract No. 48138
5.2.4 The Parties concur with all rates and charges and all
terms and conditions in this Agreement and, upon the FERC
filing, the Parties agree to support the acceptance in
full of this Agreement.
5.2.5 If upon the filing of this Agreement, FERC orders a
hearing to determine whether this Agreement is just and
reasonable, this Agreement shall not become effective
until the date when an order no longer subject to judicial
review has been issued by the FERC determining this
Agreement to be just and reasonable.
5.2.6 If, as the result of the filing, FERC modifies or
conditions any of the terms and conditions, rates or
charges of this Agreement, and such modification or
condition is objectionable to either PacifiCorp or APS for
whatever reason and as solely determined by PacifiCorp or
APS, this Agreement shall terminate and be of no further
force or effect upon written notice of such objection by
either Party within thirty (30) days from the date of
FERC's order modifying or conditioning this Agreement. In
the event that neither PacifiCorp nor APS provide written
notice, this Agreement shall be deemed accepted as
conditioned or modified.
5.2.7 The term of this Agreement shall be from the effective
date and shall remain in effect for the
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APS Contract No. 48138
term of the Transmission Agreement between PacifiCorp and
APS, dated September 21, 1990 (APS Contract No. 48015).
5.3 Authorized Representatives:
5.3.1 Within thirty (30) days after the execution of this
Agreement, each Party shall designate its Authorized
Representative by giving written notice to the other
Party. Either Party may change its Authorized
Representative by giving written notice to the other Party
at anytime. The functions and responsibilities of the
Authorized Representatives shall be:
5.3.1.1 To establish procedures and standard practices
(consistent with the provisions hereof) for
the guidance of system load dispatchers and
other operating employees as to matters
affecting interconnected operations of the
respective systems related to this Agreement,
including but not limited to scheduled
maintenance and repair;
5.3.1.2 To do such other things as are necessary to
administer and implement this Agreement;
provided that the Authorized Representatives
shall have no authority to amend any of the
provisions of this Agreement.
5.3.2 The establishment of any practice or procedure and
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APS Contract No. 48138
any other action or determination by the Authorized
Representatives shall be effective when signed by the
designated Authorized Representatives of both Parties.
6. RATES FOR TRANSMISSION SERVICE:
-------------------------------
Initially, the rates and related charges for Transmission Service rendered
by APS to PacifiCorp will be computed in accordance with Exhibit A unless
changed in accordance with Section 7.7 of this Agreement. PacifiCorp shall
take or pay for the Transmission Demand under this Agreement, which amount
shall constitute the monthly minimum, until such time as Reciprocal
Transmission Service commences, pursuant to Section 5.1.
7. GENERAL TERMS AND CONDITIONS:
----------------------------
7.1 Notifications:
7.1.1 Notifications under this Agreement, except written
notices required or authorized herein, may be made by
telephone or other means between the Authorized
Representatives established pursuant to Section 5.3.1.
Any written notices, demands or requests given under
Sections 7.1.2 and 7.1.3. hereof shall be delivered in
person or mailed as follows:
For PacifiCorp:
Vice President, Power Systems and Development
PacifiCorp
700 NE Multnomah, Suite 1600
Portland, Oregon 97232-4116
For APS:
Arizona Public Service Company
c/o Secretary
P.O. Box 53999
Phoenix, Arizona 85072-3999
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APS Contract No. 48138
Either Party may change such designations from time to
time by giving written notice to the other Party.
7.1.2 Except as set forth in Section 7.1.3 hereof, where any
notice, demand or request provided for in this Agreement
must be given within a specific period of time, such
notice, demand or request shall be in writing, and shall
be deemed properly served, given or made, if sent by
registered or certified mail, postage prepaid, to the
person(s) that have been designated in accordance with
Section 7.1.1 hereof.
7.1.3 Communications between the Parties of a routine nature,
when time is not of the essence, shall be deemed served,
if delivered in person (or by agent of either Party),
sent by facsimile or sent by first-class mail, postage
prepaid, to the person(s) who have been designated in
accordance with Section 7.1.1 hereof.
7.2 Electrical Load Characteristics:
7.2.1 The Parties shall design, construct, operate, maintain
and coordinate their respective facilities in accordance
with generally accepted utility practices of the Western
Systems Coordinating Council.
7.2.2 Each Party shall use its best effort to construct,
operate and maintain its system facilities so as to avoid
the likelihood of a disturbance originating
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APS Contract No. 48138
from its system which might cause impairment of service
in the system of the other Party.
7.3 Uncontrollable Force: 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 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.
7.4 Indemnity:
7.4.1 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
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APS Contract No. 48138
from, any such liability. As used in this Section , i)
the term "Party" means, in addition to such Party itself,
its agents, directors, officers, and employees; ii) term
"damage" means all damage, including consequential
damage; and iii) the term "persons" means any person,
including those not connected with either Party to this
Agreement.
7.4.2 The provisions of this Section shall not be construed so
as to relieve any insurer of its obligation to pay any
insurance proceeds in accordance with the terms and
conditions of any valid insurance policy of either Party.
7.5 Waiver: The failure of either Party to insist upon strict
performance of any of the provisions of this Agreement or the
payment or acceptance of payment by either Party for all or part of
the obligations under this Agreement shall not be deemed a waiver of
any right or remedy otherwise available to either Party with respect
to the future performance of such provisions.
7.6 Billing and Payment:
7.6.1 APS shall render invoices to PacifiCorp for Transmission
Service on or before the fifteenth (15th) day of each
calendar month for services furnished during the
preceding billing period.
7.6.2 PacifiCorp shall pay APS on or before the Due Date.
PacifiCorp shall mail the payment to APS' designated
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APS Contract No. 48138
office. PacifiCorp may also pay invoices by electronic
transfer if agreed to by the Parties. Amounts which are
not received by APS on or before the Due Date shall bear
Interest.
7.6.3 In the event any portion of any invoice is disputed,
PacifiCorp shall pay the disputed amount under protest
when due. If the protested portion of the payment is
found to be incorrect, APS shall refund to PacifiCorp any
payment due, including Interest from the date APS
receives payment to the date the refund check is mailed
by APS.
7.7 Unilateral Action: Nothing contained in this Agreement shall be
construed as affecting in any way, the right of either Party to
unilaterally make application to the FERC for a change, with respect
to the service it is rendering to the other Party, in
classification, or service, or any provision, term, rule, rate,
regulation, condition or contract relating thereto, under Section
205 of the Federal Power Act or any successor statute and pursuant
to the FERC's rules and regulations promulgated thereunder; or the
right of PacifiCorp to request modifications with respect to the
services rendered hereunder by APS under Section 206 of the Federal
Power Act and pursuant to the FERC's rules and regulations
promulgated thereunder.
7.8 Assignment:
7.8.1 Neither Party shall assign this Agreement without the
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APS Contract No. 48138
prior written consent of the other Party, which consent
may not be unreasonably withheld. The restrictions of this
Section shall not apply:
7.8.1.1 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;
7.8.1.2 to any person or entity wholly owning, wholly
owned by, or wholly owned in common with the
Party making the assignment.
7.8.2 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.
7.9 Regulatory Fees:
7.9.1 Any regulatory filing fees related to any changes to this
Agreement, or relative to either Party's decision to
modify or to terminate this Agreement, shall be the
responsibility of the Party initiating said action unless
otherwise mutually agreed.
7.9.2 The responsibility for any regulatory fees, charges, or
assessments associated with Reciprocal Transmission
Service under this Agreement, other than those described
in Section hereof, shall be equally shared by both
Parties.
7.9.3 The responsibility for any regulatory fees, charges,
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APS Contract No. 48138
or assessments associated with Transmission Service under
this Agreement, other than those described in Section
hereof, shall be the responsibility of PacifiCorp to the
extent that such charges or assessments are not already
recovered in APS' charges to PacifiCorp for Transmission
Services.
7.10 Third Party Beneficiaries: This Agreement shall not be construed to
create rights in, or to grant remedies to any third Party as a
beneficiary of this Agreement or of any duty, obligation, or
undertaking established herein.
7.11 Applicable Law: This Agreement shall be construed and interpreted in
accordance with Arizona law.
7.12 Nondedication of Facilities: The performance of the Parties pursuant
to this Agreement shall not constitute the dedication of the
electric system or any portion thereof of either Party to the other
Party or to a third party, and it is understood and agreed that any
right, interest, obligation or duty hereunder by either Party shall
cease upon the termination of this Agreement.
7.13 Interruptions:
7.13.1 The Parties shall use due diligence to furnish
uninterrupted Transmission Service or Reciprocal
Transmission Service but do not guarantee uninterrupted
transmission of a Party's capacity and energy.
7.13.2 The Parties shall not be liable for any claim of
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APS Contract No. 48138
damage attributable to any interruption or reduction of
Transmission Service or Reciprocal Transmission Service
due to (i) an Uncontrollable Force as defined in the
Agreement; (ii) any operating decisions, which in the
operating Party's sole judgement are necessary to
maintain reliable service or to protect its generation or
transmission facilities or to ensure the safety of its
employees or contractors, and (iii) necessary or routine
maintenance, repairs, replacements, or installations of
equipment, or the investigation and inspection of
equipment. To the extent practicable, the Parties shall
provide reasonable advance notice to each other of any
scheduled interruptions, reductions or other impairments
of Transmission Service or Reciprocal Transmission
Service.
7.13.3 In the event it is necessary to curtail Transmission
Service or Reciprocal Transmission Service because in the
discretion of the Party providing such service, the
transmission system over which such service is being
provided is in jeopardy, APS and PacifiCorp shall curtail
their respective transactions in the following order: (i)
non-firm transactions that would mitigate such jeopardy
shall be reduced proportionately and (ii) firm schedules
shall be reduced proportionately with all other firm
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APS Contract No. 48138
transactions on the affected transmission system to a
level necessary to remove such jeopardy; provided,
however, the Parties in order to maintain system
integrity, may utilize curtailment provisions which may
vary from this principle in accordance with generally
accepted utility practices.
7.13.4 The Parties shall endeavor to restore Transmission
Service or Reciprocal Transmission Service as soon as
practicable after an interruption.
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APS Contract No. 48138
8. SIGNATURE:
---------
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized officers or representatives as of the 2nd day of
March, 1994.
ARIZONA PUBLIC SERVICE COMPANY
Signature: Jack E. Davis
-------------------------
Name: Jack E. Davis
-------------------------
Title: Vice President
-------------------------
PACIFICORP
Signature: Dennis P. Steinberg
-----------------------------------
Name: Dennis P. Steinberg
-----------------------------------
Title: Vice President
-----------------------------------
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APS Contract No. 48138
RECIPROCAL TRANSMISSION SERVICE AGREEMENT
BETWEEN
ARIZONA PUBLIC SERVICE COMPANY
AND
PACIFICORP
EXHIBIT A
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Rates for Transmission Service
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1. Transmission Charge: $1.52/kW per month times the Transmission Demand.
2. Tax Charge: A Tax Charge of 0% shall be applied to the Transmission Charges
in Section 1 above, subject to the terms of Section 3 hereof. The 0% Tax
Charge is to cover the "Arizona Transaction Privilege (Sales) Tax or
similar tax(es).
3. SALES TAX:
3.1 The Parties believe that the Transmission Service being provided
hereunder is not subject to transaction privilege tax (sales tax),
excise tax or any similar tax ("Taxes"). If, and in the event that,
the Arizona State Department of Revenue, Arizona cities or towns, or
other governmental units ("Taxing Entity") issue(s) an assessment or
notice of intent to assess for such Taxes, whether prospectively or
retroactively, and any associated interest or penalties, APS shall
notify PacifiCorp of such Taxes.
3.2 APS shall pay the Taxing Entity the required retroactive Taxes and
APS shall notify PacifiCorp of such payment. The notification shall
include a proof of payment satisfactory to PacifiCorp. PacifiCorp
agrees to reimburse APS for the full amount of the retroactive Taxes
and any associated interest or penalties paid by APS, within fifteen
(15) days of such notification.
3.3 PacifiCorp shall have the right, upon notification and at its own
expense, to participate with APS in any appeal or protest of an
assessment of Taxes.
3.4 APS shall have the right to include Taxes in any future invoice
rendered to PacifiCorp after the date of notification specified in
Section 3.1 hereof and prior to the date of a final determination,
if any, that such Taxes are not due.
3.5 If any Taxes and associated interest and penalties paid by APS and
for which APS was reimbursed by PacifiCorp pursuant
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APS Contract No. 48138
to Section 3.2 hereof, are refunded, or credited, by a Taxing Entity
to APS, APS shall notify PacifiCorp of the receipt of such refund,
or credit, within fifteen (15) days and APS shall promptly refund
the amount of such refund, or credit, including any interest paid
thereon.
3.6 Each Party to any proceeding pursuant to this Section 3 shall bear
its own cost and expense, including attorneys fees, in connection
therewith.
Revision No. Original
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Effective Date:
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