Exhibit 10.108
Contract No. 14-06-300-2131
NAVAJO PROJECT
PARTICIPATION AGREEMENT
BETWEEN
THE UNITED STATES OF AMERICA
ARIZONA PUBLIC SERVICE COMPANY
DEPARTMENT OF WATER AND POWER
OF THE CITY OF LOS ANGELES
NEVADA POWER COMPANY
SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT
TUCSON GAS & ELECTRIC COMPANY
NAVAJO PROJECT PARTICIPATION AGREEMENT
TABLE OF CONTENTS
SECTION PAGE
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1 PARTIES 1
2 RECITALS 1
3 AGREEMENT 2
4 DEFINITIONS 2
4.1 CAPACITY 2
4.2 CONTRACTING OFFICER 2
4.3 CO-TENANTS 2
4.4 ENERGY 3
4.5 FIRM OPERATION 3
4.6 GENERATION ENTITLEMENT SHARE 3
4.7 NAVAJO GENERATING STATION 3
4.8 NAVAJO PLANT SITE 4
4.9 NAVAJO PROJECT 4
4.10 NET EFFECTIVE GENERATING CAPABILITY 4
4.11 OPERATING AGENT 4
4.12 PARTICIPANTS 4
4.13 POWER 4
4.14 PROJECT AGREEMENTS 4
4.15 PROJECT INSURANCE 5
4.16 PROJECT MANAGER 5
4.17 SECRETARY 5
4.18 STATION WORK 5
4.19 STATION WORK LIABILITY 5
(i)
SECTION PAGE
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4 DEFINITIONS (Continued)
4.20 TRANSMISSION SYSTEM 6
4.21 TRANSMISSION WORK 6
4.22 TRANSMISSION WORK LIABILITY 6
4.23 WILLFUL ACTION 7
4.24 ZERO NET LOAD 9
5 OWNERSHIP OF NAVAJO PROJECT 9
6 GENERATING STATION CAPACITY AND ENERGY ENTITLEMENTS 10
7 TRANSMISSION SYSTEM 11
8 ADMINISTRATION 15a
9 OTHER COMMITTEES 21
10 PROJECT MANAGERS 21
11 OPERATING AGENTS 23
12 CONSTRUCTION SCHEDULES 24
13 CONSTRUCTION COSTS 24
14 OPERATION AND MAINTENANCE COSTS 25
15 ADVANCEMENT OF FUNDS 27
16 TAXES 29
17 NONPARTITIONMENT 30
18 MORTGAGE AND TRANSFER OF INTERESTS 30
19 RIGHT OF FIRST REFUSAL 33
20 DESTRUCTION 33
21 INSURANCE 35
22 LIABILITY 38
(ii)
SECTION PAGE
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23 INTERESTS HELD FOR THE USE AND BENEFIT OF UNITED STATES 41
24 REIMBURSEMENT FOR COSTS AND EXPENSES 43
25 DEFAULTS 43
26 ARBITRATION 45
27 ACTIONS PENDING RESOLUTION OF DISPUTES 46
28 REMOVAL OF OPERATING AGENTS 47
29 RELATIONSHIP OF PARTICIPANTS 47
30 FEES 48
31 OFFICIALS NOT TO BENEFIT 48
32 COVENANT AGAINST CONTINGENT FEES 49
33 EQUAL OPPORTUNITY 49
34 WORK HOURS ACT OF 1962 54
35 EXAMINATION OF RECORDS 56
36 ASSIGNMENT OF CLAIMS 56
37 CONVICT LABOR 58
38 UNCONTROLLABLE FORCES 58
39 GOVERNING LAW 59
40 BINDING OBLIGATIONS 59
41 NONDEDICATION OF FACILITIES 60
42 PROJECT AGREEMENTS 60
43 TERM 61
44 ASSIGNMENT OF INTERESTS 61
45 NOTICES 62
46 MISCELLANEOUS PROVISIONS 63
(iii)
SECTION PAGE
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47 USE OF FACILITIES OF LOS ANGELES 65
48 AGREEMENT SUBJECT TO COLORADO RIVER COMPACT 66
(iv)
NAVAJO PROJECT
PARTICIPATION AGREEMENT
1. PARTIES: The parties to this agreement are: THE UNITED STATES OF AMERICA,
hereinafter referred to as the "United States", acting through the
Secretary of the Interior; ARIZONA PUBLIC SERVICE COMPANY, an Arizona
corporation, hereinafter referred to as "Arizona"; DEPARTMENT OF WATER AND
POWER OF THE CITY OF LOS ANGELES, a department organized and existing
under the Charter of the City of Los Angeles, a municipal corporation of
the State of California, hereinafter referred to as "Los Angeles"; NEVADA
POWER COMPANY, a Nevada corporation, hereinafter referred to as "Nevada";
SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an
agricultural improvement district organized and existing under the laws of
the State of Arizona, hereinafter referred to as "Salt River Project"; and
TUCSON GAS & ELECTRIC COMPANY, an Arizona corporation, hereinafter
referred to as "Tucson".
2. RECITALS: This agreement is made with reference to the following facts,
among others:
2.1 By the Colorado River Basin Project Act (82 Stat. 885) the
Congress of the United States authorized the construction, operation and
maintenance of the Central Arizona Project. Pursuant to Section 303 of
said Act, the Secretary is authorized to enter into agreements
with non-Federal interests proposing to construct thermal generating
powerplants whereby the United States shall acquire the right to such
portions of their capacity, including delivery of power and energy over
appurtenant transmission facilities to mutually agreed upon delivery
points, as he determines is required in connection with the operation of
the Central Arizona Project.
2.2 The Secretary has determined that the acquisition of a right to
a portion of the capacity of the Navajo Project is the most feasible plan
for supplying the power requirements of the Central Arizona Project and
augmenting the Lower Colorado River Basin Development Fund.
2.3 The parties desire to participate in the construction, operation
and maintenance of the Navajo Project in accordance with the provisions of
this Participation Agreement and the other Project Agreements.
3. AGREEMENT: In consideration of the mutual covenants herein, the parties
agree as follows:
4. DEFINITIONS: The following terms, when used herein, shall have the
meanings specified:
4.1 CAPACITY: Electrical rating expressed in megawatts (mw) or
megavolt-amperes (mva).
4.2 CONTRACTING OFFICER: The Secretary of the Interior or his duly
authorized representative.
4.3 CO-TENANTS: Any one or all of the parties other
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than the United States.
4.4 ENERGY: Kilowatt-hours (kwh).
4.5 FIRM OPERATION: The state of completion at which a component of
the Navajo Project is determined by the appropriate engineering and
operating committee to be reliable and at which that component can
reasonably be expected to operate continuously at its rated Capacity.
4.6 GENERATION ENTITLEMENT SHARE: The percentage entitlement of each
Participant in each unit of the Navajo Generating Station. Each
Participant's percentage is as follows:
4.6.1 United States = 24.3 per cent.
4.6.2 Arizona = 14.0 per cent.
4.6.3 Los Angeles = 21.2 per cent.
4.6.4 Nevada = 11.3 per cent.
4.6.5 Salt River = 21.7 per cent.
Project
4.6.6 Tucson = 7.5 per cent.
4.7 NAVAJO GENERATING STATION: Three coal-fired steam electric
generating units, each having a nameplate rating of 750 mw and an
estimated Net Effective Generating Capability of 770 mw, and all
facilities and structures used therewith or related thereto, to be
constructed at or adjacent to the Navajo Plant Site. The Navajo Generating
Station is generally described in
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Exhibit A-1 hereto.
4.8 NAVAJO PLANT SITE: A parcel of land in Coconino County, Arizona,
consisting of approximately 1,020 acres and being generally depicted on
Exhibit B hereto.
4.9 NAVAJO PROJECT: The Navajo Project shall consist of the Navajo
Generating Station and the Transmission System, all as generally described
and depicted on Exhibit A hereto.
4.10 NET EFFECTIVE GENERATING CAPABILITY: The maximum continuous
ability of each unit of the Navajo Generating Station to produce Power
which is available to the Participants at the high voltage terminals of
the generator step-up transformers.
4.11 OPERATING AGENT: A Co-Tenant responsible for the operation and
maintenance of a component of the Navajo Project in accordance with the
Project Agreements,
4.12 PARTICIPANTS: Any one or more of the parties, including the
United States.
4.13 POWER: Kilowatts (kw) or megawatts (mw).
4.14 PROJECT AGREEMENTS: This Participation Agreement, the grants
from the United States for use of Indian lands pursuant to 25 U.S.C.
Section 323 (Section 323 grants), the plant site lease, the co-tenancy
agreements, the construction agreements, the operating agreements, other
agreements for rights of way and easements for the Navajo Project
facilities, the Navajo Station Coal
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Supply Agreement, agreements related to the transportation of fuel, the
Water Service Contract dated the 17th day of January, 1969 (Contract No.
14-06-400-5033), the agreements establishing the rights of the
Participants in water rights or coal lands, the agreement between the Salt
River Project and the United States concerning the capacity entitlements
of the United States, as such agreements are originally executed or as
they may thereafter be supplemented or amended.
4.15 PROJECT INSURANCE: Policies of insurance to be procured and
maintained in accordance with Section 21 hereof.
4.16 PROJECT MANAGER: A Co-Tenant responsible for the construction
and completion of a component of the Navajo Project in accordance with the
Project Agreements.
4.17 SECRETARY: The Secretary of the Interior.
4.18 STATION WORK: Engineering, design, contract preparation,
purchasing, construction, supervision, expediting, inspection, accounting,
testing, protection, operation, repair, maintenance, replacement,
reconstruction or use of and for the Navajo Generating Station.
4.19 STATION WORK LIABILITY: Liability of one or more Participants
for damage suffered by anyone other than a Participant, whether or not
resulting from the negligence of any Participant, its directors, officers,
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employees or any other person or entity whose negligence would be imputed
to such Participant, resulting from:
4.19.1 The performance or non-performance of Station Work.
4.19.2 The use or ownership of the Navajo Generating Station.
4.19.3 The past or future performance or non-performance of
the obligations of any Participant under any of the
Project Agreements, except obligations relating solely
to the Transmission System.
4.20 TRANSMISSION SYSTEM: The Transmission System as generally
described in Exhibit A-2 hereto.
4.21 TRANSMISSION WORK: Engineering, design, contract preparation,
purchasing, construction, supervision, expediting, inspection, accounting,
testing, protection, operation, repair, maintenance, replacement,
reconstruction or use of and for the Transmission System.
4.22 TRANSMISSION WORK LIABILITY: Liability of one or more
Participants for damage suffered by anyone other than a Participant,
whether or not resulting from the negligence of any Participant, its
directors, officers, employees or any other person or entity whose
negligence would be imputed to such Participant,
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resulting from:
4.22.1 The performance or non-performance of Transmission
Work.
4.22.2 The use or ownership of the Transmission System or any
component thereof.
4.22.3 The past or future performance or non-performance of
the obligations of any Participant under any of the
Project Agreements, except obligations relating solely
to the Navajo Generating Station.
4.23 WILLFUL ACTION:
4.23.1 Action taken or not taken by a Participant at the
direction of its directors, officers, Contracting
Officer or employees having management or
administrative responsibility affecting its performance
under any of the Project Agreements, which action is
knowingly or intentionally taken or failed to be taken
with conscious indifference to the consequences thereof
or with intent that injury or damage would result or
would probably result therefrom.
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Willful Action does not include any act or failure to
act which is merely involuntary, accidental or
negligent.
4.23.2 Action taken or not taken by a Participant at the
direction of its directors, officers, Contracting
Officer or employees having management or
administrative responsibility affecting its performance
under any of the Project Agreements, which action has
been determined by final arbitration award or final
judgment or judicial decree to be a material default
under any of the Project Agreements 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.
4.23.3 Action taken or not taken by a Participant at the
direction of its directors, officers, Contracting
Officer or employees having management
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or administrative responsibility affecting its
performance under any of the Project Agreements, which
action is knowingly or intentionally taken or failed to
be taken with the knowledge that such action taken or
failed to be taken is a material default under any
Project Agreements.
4.23.4 The phrase "employees having management or
administrative responsibility" as used in this Section
4.23 means employees of a Participant who are
responsible for one or more of the executive functions
of planning, organizing, coordinating, directing,
controlling and supervising such Participant's
performance under any of the Project Agreements.
4.24 ZERO NET LOAD: The load upon a generating unit when the
generator gross output equals the total unit auxiliary consumption.
5. OWNERSHIP OF NAVAJO PROJECT:
5.1 The Co-Tenants shall acquire and own the Navajo Generating
Station as tenants in common, as follows:
5.1.1 Arizona shall own an undivided 14.0 per cent interest
therein.
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5.1.2 Los Angeles shall own an undivided 21.2 per cent
interest therein.
5.1.3 Nevada shall own an undivided 11.3 per cent interest
therein.
5.1.4 Salt River Project shall own:
(i) an undivided 21.7 per cent interest therein
for its own use and benefit, and
(ii) an undivided 24.3 per cent interest therein
for the use and benefit of the United States
in accordance with the Project Agreements.
5.1.5 Tucson shall own an undivided 7.5 per cent interest
therein.
5.2 The Co-Tenants shall acquire the ownership interests in the
Transmission System components as described in Exhibit C hereto and shall
own the same as tenants in common. Not every Co-Tenant will own an
interest in every component of the Transmission System.
6. GENERATING STATION CAPACITY AND ENERGY ENTITLEMENTS:
6.1 The Capacity entitlement of each Participant in each unit of the
Navajo Generating Station shall be the product of its Generation
Entitlement Share and the Net Effective Generating Capability of such
unit.
6.2 Each Participant shall be entitled to schedule
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for its account Power and Energy from any generating unit up to the amount
of its available Capacity entitlement in such unit.
6.3 When a Participant requests operation of a unit, each
Participant shall, unless otherwise mutually agreed, schedule for its
account its share of minimum net generation which shall be the product of
its Generation Entitlement Share and the minimum net generation
established for such unit. At any time any Participant has scheduled from
any unit an amount of Power in excess of its minimum net generation, then
each of the other Participants shall only be obligated to schedule for its
account an amount of Power equal to the product of its Generation
Entitlement Share and the remaining amount of minimum net generation,
provided that such reductions do not result in economic detriment to any
Participant or the Operating Agent.
6.4 Operation of any unit by the Operating Agent shall be subject to
scheduled outages or curtailments, operating emergencies and unscheduled
outages or curtailments of such unit.
7. TRANSMISSION SYSTEM:
7.1 The Transmission System shall be designed, constructed and
operated with the objective of permitting each Participant to transmit
under normal operating conditions its share of entitlement in the Navajo
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Generating Station from the Navajo Generating Station to its designated
points of delivery in a manner which will not, unreasonably affect the
operation of the electric systems of the Participants, and, so that when
operated in parallel with such systems, the loss of any one circuit will
not cause any other circuit or element of and of the parallel transmission
systems of a Participant to carry Power in excess of the short-time rating
of such parallel transmission system as may be established by the owner of
such system.
7.2 Each Participant shall have the right to use the Transmission
System to transmit to its designated delivery points under normal
operating conditions Power in an amount equivalent to its Capacity
entitlement share in the Navajo Generating Station or to reserve the
Transmission System for such transmission without regard to the origin,
source, ownership or type of generation used to produce such Power.
7.3 Any Participant may acquire firm entitlement in the Transmission
System, in addition to that provided for in Section 7.2 hereof upon the
written agreement of all Participants having cost responsibility for the
facilities over which such firm entitlement is sought, provided that said
firm entitlement does not materially interfere with the right of any other
Participant to transmit its entitlement as provided in Section 7.2
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hereof. Such written agreement shall specify the amount of monetary
compensation to be paid to and the allocation among the Participants for
such firm entitlement.
7.4 Any Participant may make non-firm use of transmission Capacity
in addition to its use under Section 7.2 hereof to the extent that
transmission Capacity is determined to be available by the Operating
Agents in accordance with criteria to be developed by the engineering and
operating committee.
7.5 If two or more Participants concurrently desire to make non-firm
use of transmission Capacity in the same segment of the Transmission
System pursuant to Section 7.4 hereof, and the available transmission
Capacity in such segment is not adequate to satisfy all such requests,
then, unless otherwise agreed to, the available Capacity will be shared by
those Participants concurrently requesting such Capacity in proportion to
their cost responsibility in such segment.
7.6 The Participants' designated points of delivery shall be as
follows:
7.6.1 Arizona = Navajo 500 KV Switchyard and Phoenix Area
Substation (s).
7.6.2 Los Angeles = Navajo 500 KV Switchyard and McCullough
500 KV Switchyard.
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7.6.3 Nevada = Navajo 500 KV Switchyard and McCullough
287 KV Switchyard.
7.6.4 Salt River = Navajo 500 KV Switchyard
Project and Phoenix Area Substation (s).
7.6.5 Tucson = Navajo 500 KV Switchyard and Phoenix Area
Substation (s).
7.6.6 United = Navajo 500 KV Switchyard,
States McCullough 500 KV Switchyard, Phoenix
Area Substation (s), and the Moenkopi
Switchyard during the period in which the
United States is selling power to
Southern California Edison Company
pursuant to the Contract With Southern
California Edison Company For Interim
Sale Of United States' Entitlement In
Navajo Project for delivery at Moenkopi
switchyard.
7.7 Each Participant shall be entitled to interconnect its
transmission system with the Transmission System at its designated points
of delivery, and the costs of such interconnection shall be paid by such
Participant.
7.8 In the event of an outage or curtailment of any circuit or
element of the Transmission System, the Operating Agents shall make every
effort to furnish temporary alternate service through other circuits or
elements of the Transmission System, and the Participants shall make
every effort to furnish alternate
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service to the other Participants over available parallel transmission
systems, and, in the event of an outage or curtailment of any such
parallel transmission system of a Participant, the Operating Agents shall
make every effort to furnish temporary alternate service over the
Transmission System. There will be no charge to any Participant for such
service provided pursuant to this Section 7.8, except for compensation in
Energy for additional losses that may be incurred as a result of providing
such alternate service.
7.9 Upon agreement with all the other Participants, a Participant
may at its expense make interconnections to the Transmission System at
other points. Such agreement shall specify the terms and conditions
under which such interconnections may be made and the charges to the
interconnecting Participant, if any, and the distribution of such charges
to the other Participants.
7.10 Unless otherwise agreed to by the engineering and operating
committee, when the Capacity available to the Participants in any segment
of the Transmission System is insufficient to accommodate all of the firm
use of the Transmission System pursuant to Section 7.2 hereof, then the
use of the available Capacity of that segment of the Transmission System
will be allocated in proportion to the Participants' cost responsibility
in such segment. It is not the intention of the Participants
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to dedicate any Capacity in the Transmission System for use by third
parties.
7.11 The Transmission System will be interconnected with the Four
Corners-Eldorado 500 KV transmission line at the Moenkopi Switchyard in
accordance with the memorandum of intent attached as Exhibit H hereto.
7.12 For the purposes of Section 7, any use of any section of line
by the United States which is in excess of the greater of (i) the United
States' percentage cost responsibility in such line times the capability
of such, or (ii) the capability required to supply the power requirements
of the Central Arizona Project, shall be deemed to be non-firm use unless
the right to such use shall have been acquired pursuant to Section 7.3
hereof.
8. ADMINISTRATION:
8.1 The Participants shall establish the following Committees, whose
functions and shall be as described herein or in the subsequent Project
Agreements:
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8.1.1 One coordinating committee for the Navajo Project,
consisting of one representative from each Participant,
who shall be an officer or general manager of a
Participant or the designee of the Secretary, or his
authorized alternates.
8.1.2 One engineering and operating committee for the Navajo
Generating Station, consisting of two representatives
from each Participant.
8.1.3 One engineering and operating committee for the
Transmission System, consisting of two representatives
from each Participant.
8.1.4 One auditing committee for the Navajo Project,
consisting of two representatives from each
Participant.
8.2 The coordinating committee shall have the following functions,
among others:
8.2.1 To provide liaison among the Participants at the
management level.
8.2.2 To exercise general supervision over the engineering and
operating committees and the auditing committee.
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8.2.3 To consider matters referred to it by another committee.
8.2.4 To perform such other functions and duties as may be
assigned to it in the Project Agreements.
8.3 The engineering and operating committees shall have the
following functions, among others, at the construction stages:
8.3.1 To provide liaison among the Participants and between
them and the respective Project Managers and Operating
Agents with respect to the engineering, construction and
start-up of the components of the Navajo Project.
8.3.2 To consider such matters and take such actions as are
assigned to them in the Project Agreements.
8.3.3 To perform such other functions and duties as may be
assigned to them by the coordinating committee.
8.4 The engineering and operating committee for the Navajo
Generating Station shall have the following functions, among others, with
respect to the operation of the Navajo Generating Station:
8.4.1 To provide liaison among the
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Participants and between them and the Operating Agent.
8.4.2 To review and act upon the Operating Agent's
recommendations concerning:
Budgets for operation and maintenance and for
capital expenditures
Manning tables
Operating and maintenance practices and procedures
Planned maintenance schedules
Policies for establishing inventories
Statistical and administrative reports, budgets
and information and other similar records, and
the form and preparation thereof, to be kept and
performed by the Operating Agent
Procedures for determining Capacities of
facilities
Procedures for capital expenditures
Procedures for performance and efficiency testing
Procedures for maintaining Power and Energy
accounting
Procedures for dealing with operating emergencies
or curtailed operations
Practices and procedures for scheduling Power and
Energy
8.4.3 To perform such other functions and duties as may be
assigned to it in the Project Agreements or by the
coordinating committee.
8.5 The engineering and operating committee for the Transmission
System shall have the following functions, among others, with respect to
the operation of the Transmission System:
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8.5.1 To provide liaison among the Participants and between
them and the Operating Agents.
8.5.2 To review and act upon the Operating Agents'
recommendations concerning:
Practices and procedures for accounting for
transmission losses
Budgets for operation and maintenance and for
capital expenditures
Operating and maintenance practices and procedures
Planned maintenance schedules
Policies for establishing inventories
Statistical and administrative reports, budgets
and information and other similar records, and
the form and preparation thereof, to be kept and
performed by the Operating Agents
Procedures for determining Capacities of
facilities
Procedures for capital expenditures
Procedures for performance testing
Procedures for maintaining Power and Energy
accounting
Procedures for dealing with operating emergencies
or curtailed operations
8.5.3 To perform such other functions and duties as may be
assigned to it in the Project Agreements or by the
coordinating committee.
8.6 The auditing committee shall have the following functions, among
others:
8.6.1 To develop procedures for proper
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accounting and financial liaison among the Participants
in connection with the engineering, construction,
operation, replacement and reconstruction of the Navajo
Project.
8.6.2 To review accounting and financial aspects thereof.
8.6.3 To advise and make recommendations to the coordinating
committee, the Project Managers and the Operating Agents
on matters involving auditing and financial
transactions.
8.6.4 To perform such other functions and duties as may be
assigned to it in the Project Agreements or by the
coordinating committee.
8.7 Within thirty (30) days after the execution of this agreement,
each Participant shall designate its representatives on the committees
hereby established. Such designation shall be in writing, with copies
mailed to each of the Participants.
8.8 Any action or determination of a committee must be unanimous.
8.9 All actions, agreements or determinations made by the committees
shall be reduced to writing. In addition, the engineering and operating
committees and
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the auditing committee shall keep written minutes and records of all
meetings.
8.10 The committees shall have no authority to
modify any of the terms, covenants or conditions of the
Project Agreements.
8.11 If the engineering and operating committees or the auditing
committee fail to agree while performing the functions and duties assigned
to them in this agreement or in the other Project Agreements, then such
disagreement shall be referred to the coordinating committee.
9. OTHER COMMITTEES:
9.1 Other committees may be established by the coordinating
committee to perform such other functions and have such responsibility as
may be assigned to them by the coordinating committee.
10. PROJECT MANAGERS:
10.1 The Project Managers shall be as follows:
10.1.1 Salt River Project shall be the Project Manager for the
Navajo Generating Station.
10.1.2 Arizona shall be the Project Manager for the
Transmission System, except for the Navajo-McCullough
500 KV line and the McCullough Substation.
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10.1.3 Los Angeles shall be the Project Manager for the
Navajo-McCullough 500 KV line and the McCullough
Substation.
10.2 A Project Manager shall:
10.2.1 Provide for the engineering, design, contract
preparation, purchasing, construction, supervision,
expediting, inspection, accounting, testing and
start-up of its designated component so as to complete
such component for Firm Operation.
10.2.2 Promptly supply the Participants with information on
major matters regarding its designated component and
significant factors which affect construction
schedules.
10.2.3 Provide the committees with all necessary records and
information pertaining to matters within their
designated responsibilities.
10.3 The Project Managers of the Transmission System shall optimize
the design of the Transmission System. The Participants recognize that
such optimization may result in modifications in the Transmission System
as described in Exhibit A-2. In the event of such
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modifications, the Participants shall agree on an equitable method of
allocating the construction, operation and maintenance cost
responsibilities.
11. OPERATING AGENTS:
11.1 The Operating Agents shall be as follows:
11.1.1 Salt River Project shall be the Operating Agent
for the Navajo Generating Station.
11.1.2 Arizona shall be the Operating Agent for the
Transmission System, except for the
Navajo-McCullough 500 KV line and the McCullough
Substation.
11.1.3 Los Angeles shall be the Operating Agent for the
McCullough Substation.
11.1.4 Nevada shall be the Operating Agent for the
Navajo-McCullough 500 KV line.
11.2 The Operating Agents shall be responsible for the operation and
maintenance of their designated components of the Navajo Project, and in
connection therewith shall:
11.2.1 Provide for engineering, contract preparation,
purchasing, repair, supervision, training,
expediting, inspection, testing, protection,
operation, maintenance, retirement
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and replacement.
11.2.2 Prepare recommendations covering the matters
which are to be reviewed and acted upon by the
engineering and operating committees.
11.2.3 Follow the practices and procedures which have
been reviewed and approved by the engineering and
operating committees and generally accepted
practices in the electric utility industry.
11.2.4 Keep the Participants fully and promptly advised
of material changes in conditions or other
material developments affecting the performance
of their designated responsibilities.
12. CONSTRUCTION SCHEDULES:
12.1 Construction of the Navajo Project has been planned with the
objective of having each component available for start-up operation or
energization for test date and for Firm Operation on the dates specified
in Exhibit D hereto.
13. CONSTRUCTION COSTS:
13.1 Construction costs shall include all payments made and
obligations incurred by the Project Managers for or in connection with the
construction of the
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Navajo Project, including but not limited to those costs specified in
Exhibit E hereto.
13.2 The construction costs of the Navajo Generating Station shall
be shared and paid for by the Participants in proportion to their
Generation Entitlement Shares.
13.3 The construction costs of the Transmission System shall be
shared and paid for by the Participants in the manner shown in Exhibit C
hereto.
13.4 United States shall not bear any part of any other
Participant's costs for interest, interest during construction, financing
charges and franchise fees.
14. OPERATION AND MAINTENANCE COSTS:
14.1 Operation and maintenance costs of the Navajo Generating
Station shall include all payments made and obligations incurred by the
Operating Agent for or in connection with operation and maintenance,
including but not limited to those costs specified in Exhibit F hereto.
14.2 The operation and maintenance costs of the Navajo Generating
Station, including costs of water but excluding costs of fuel, shall be
shared by the Participants in proportion to their Generation Entitlement
Shares. The amount of fuel required for active storage and the initial
emergency fuel storage, the rate of fuel consumption for Zero Net Load
operation and the costs of start-up shall be determined in accordance with
procedures to be established by the engineering and
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operating committee, and the costs thereof and fixed fuel transportation
charges, if any, shall be shared by the Participants in proportion to
their Generation Entitlement Shares.
14.3 Except as provided in Section 14.2 hereof, the costs of fuel
for each generating unit and the variable fuel transportation charges
shall be shared by each Participant in the ratio that such Participant's
monthly net energy generation scheduled from such unit bears to the total
monthly net energy generation scheduled from such unit.
14.4 The costs of ash disposal shall be shared among the
Participants in the same proportions as the monthly allocations of fuel
costs among the Participants.
14.5 The operation and maintenance costs of the Transmission System
shall include all payments made and obligations incurred by the Operating
Agent for and in connection with such operation and maintenance, including
but not limited to those costs specified in Exhibit G hereto.
14.6 The operation and maintenance costs of the Transmission System
shall be shared and paid for by the Participants in the manner specified
in Exhibit C hereto.
14.7 United States shall not bear any part of any other
Participant's costs for interest, interest during
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construction, financing charges and franchise fees.
15. ADVANCEMENT OF FUNDS:
15.1 Each Participant shall advance its share of construction costs
and the operating and maintenance costs prior to the date when funds are
required by the Project Managers or Operating Agents to pay such costs so
that the Project Managers and Operating Agents in their capacity as such
will not have to advance any funds on behalf of another Participant.
15.2 The Participants shall pay in advance all construction costs in
accordance with cost estimates and payment schedules to be established by
the Project Managers. The first such cost estimate and payment schedule
shall be established not less than sixty (60) days following the execution
of this agreement and shall be updated monthly thereafter. At least once
each month following the initial payment of construction costs, as called
for by such cost estimates and payment schedules, the Project Managers
shall notify each Participant of the estimated weekly expenditures for the
succeeding month, and each Participant shall pay to the Project Managers
once each week its share of such estimate. Following completion of
construction, each Project Manager shall compute the total costs of
construction of its designated component of the Navajo Project and each
Participant shall promptly settle any
-27-
balance of its indebtedness in accordance therewith. If at any time it is
determined that a Participant has made advances which are greater or less
than its share of the construction costs, the difference shall be paid,
refunded or credited.
15.3 Each Participant shall pay its share of operating and
maintenance costs in accordance with requests for funds submitted by the
Operating Agents. Funds shall be requested as near to the date such funds
are required by the Operating Agents as is practical under the
circumstances, but a Participant shall have not less than three (3)
business days advance notice prior to the due date for requested funds.
15.4 The United States shall be given appropriate credit for any
interest in Federal lands, other than Indian lands, administered by the
Department of the Interior which are made available for the Navajo
Project. In instances where Federal laws or regulations prescribe fees or
charges, or the basis or method for determining such fees or charges, for
the use of Federal lands which are so administered and made available for
the Navajo Project, the amount of such fees or charges or the provisions
of such laws or regulations shall govern the determination of the credit
to be given to the United States. In the absence of applicable Federal
laws or regulations, the amount of the credit to be
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given to the United States shall be as mutually agreed upon by the
Participants or, failing such agreement, as conclusively determined by the
Secretary.
16. TAXES:
16.1 The Participants shall use their best efforts to have any
taxing authority imposing any taxes or assessments on the Navajo Project,
or any interests or rights therein, assess and levy such taxes or
assessments directly against the ownership or beneficial interest of each
Participant.
16.2 All taxes or assessments levied against each Participant's
ownership or beneficial interest in the Navajo Project, excepting those
taxes or assessments levied against an individual Participant in behalf of
any or all of the other Participants, shall be the sole responsibility of
the Participant upon whose ownership or beneficial interest said taxes or
assessments are levied.
16.3 If any property taxes or any other taxes or assessments are
levied or assessed in a manner other than as specified in Section 16.1
hereof, it shall be the responsibility of the coordinating committee to
establish equitable practices and procedures for the apportionment among
the Participants of such taxes and assessments and the payment thereof.
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17. NONPARTITIONMENT:
17.1 Each Co-Tenant hereto agrees to waive any rights which it may
have to partition any component of the Navajo Project, whether by
partitionment in kind or by sale and division of the proceeds, and further
agrees that it will not resort to any action in law or in equity to
partition such component, and it waives the benefits of all laws that may
now or hereafter authorize such partition for a term (i) which shall be
co-terminus with the co-tenancy agreement for such component, or (ii)
which shall be for such lesser period as may be required under applicable
law.
18. MORTGAGE AND TRANSFER OF INTERESTS:
18.1 Except as provided in Section 18.6 hereof, each Co-Tenant shall
have the right at any time and from time to time to mortgage, create or
provide for a security interest in or convey in trust all or a part of its
ownership share in the Navajo Project, together with an equal interest in
the Project Agreements to a trustee or trustees under deeds of trust,
mortgages or indentures, or to secured parties under a security agreement,
as security for its present or future bonds or other obligations or
securities, and to any successors or assigns thereof, without need for the
prior written consent of any other Participant, and without such
mortgagee, trustee or secured party assuming or becoming
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in any respect obligated to perform any of the obligations of the
Participants.
18.2 Except as provided in Section 18.6 hereof, any mortgagee,
trustee or secured party under present or future deeds of trust,
mortgages, indentures or security agreements of any of the Co-Tenants and
any successor or assign thereof, and any receiver, referee or trustee in
bankruptcy or reorganization of any of the Co-Tenants, and any successor
by action of law or otherwise, and any purchaser, transferee or assignee
of any thereof may, without need for the prior written consent of the
other Participants, succeed to and acquire all the rights, titles and
interests of such Co-Tenant in the Navajo Project and the Project
Agreements, and may take over possession of or foreclose upon said
property, rights, titles and interests of such Co-Tenant.
18.3 Except as provided in Section 18.6 hereof, each Co-Tenant shall
have the right to transfer or assign all or part of its ownership share in
the Navajo Project, together with an equal interest in the Project
Agreements, to any of the following without the need for prior written
consent of any other Participant:
18.3.1 To any entity acquiring all or substantially all of the
property of such Co-Tenant; or
18.3.2 To any entity merged or consolidated
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with such Co-Tenant; or
18.3.3 To any entity which is wholly-owned by a Co-Tenant; or
18.3.4 To the Salt River Valley Water Users' Association, an
Arizona corporation, in the case of a transfer by Salt
River Project.
18.4 Except as otherwise provided in Sections 18.1, 18.2, and 18.6
hereof, any successor to the rights, titles and interests of a Co-Tenant
in the Navajo Project, together with an equal interest in the Project
Agreements, shall assume and agree to fully perform and discharge all of
the obligations hereunder of such Co-Tenant, and such successor shall
notify each of the other Participants in writing of such transfer,
assignment or merger, and shall furnish to each Participant evidence of
such transfer, assignment or merger.
18.5 No Participant shall be relieved of any of its obligations
under the Project Agreements by an assignment under this Section 18
without the express prior written consent of all of the remaining
Participants.
18.6 The rights set forth in Sections 18.1, 18.2 and 18.3 hereof
shall not apply to such interests of Salt River Project in the Navajo
Project or in the Project Agreements as are held for the use and benefit
of the United States, and Salt River Project shall transfer,
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convey, mortgage, encumber or hypothecate any such interest only upon the
prior written instruction of the United States.
19. RIGHT OF FIRST REFUSAL:
19.1 Except as provided in Section 18 hereof, should any Co-Tenant
desire to transfer its ownership in the Navajo Project, or any portion
thereof, to any person, entity or another Co-Tenant, each remaining
Co-Tenant shall have the right of first refusal to purchase such interest
on the basis of the greater of the following amounts:
19.1.1 The amount of the bona fide written offer from the
buyers, or
19.1.2 The fair market value.
19.2 If more than one of the Co-Tenants desire to purchase such
interest, it shall be transferred in the ratio that the Generation
Entitlement Share of each Co-Tenant desiring to purchase bears to the
total Generation Entitlement Shares of such Co-Tenants.
19.3 The provisions of this Section 1.9 shall not apply to any
interest held by the Salt River Project for the use and benefit of the
United States.
20. DESTRUCTION:
20.1 If a generating unit of the Navajo Generating Station should be
destroyed to the extent that the cost of repairs or reconstruction is less
than 60% of the
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original cost thereof, the Participants shall, unless otherwise agreed,
repair or reconstruct such generating unit to substantially the same
general character or use as the original. The Participants shall share the
costs of such repairs or reconstruction in proportion to their Generation
Entitlement Shares in the generating unit so destroyed.
20.2 If a generating unit of the Navajo Generating Station should be
destroyed to the extent that the cost of repairs or reconstruction is 60%
or more of the original cost, the Participants shall, upon agreement,
restore or reconstruct such unit to substantially the same general
character or use as the original; provided, however, that should all of
the Participants not agree to restore or reconstruct such unit, but some
of the Participants nevertheless desire so to do, then the Participants
who do not agree to restore or reconstruct shall sell their interests in
such unit to the remaining Participants at their proportionate interests
in the salvage value thereof. The Participants agreeing to repair or
reconstruct such unit shall share the costs of repair or reconstruction in
the proportion that the Generation Entitlement Share of each bears to the
total Generation Entitlement Share of such Participants.
20.3 If any facilities of the Transmission System should be
destroyed, the Participants shall, unless
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otherwise agreed, repair or reconstruct such facilities to substantially
the same general character or use as the original. The Participants shall
share the costs of such repair or reconstruction in proportion to their
original cost responsibility for the facilities so destroyed.
21. INSURANCE:
21.1 During the construction stage, each Project Manager shall
procure or cause to be procured and maintain in force policies of
comprehensive bodily injury and property damage liability insurance; all
risk builder's risk insurance; contractor's equipment all risk floater
insurance; employees' dishonesty bonds; automobile liability insurance;
and workmen's compensation insurance covering employees of such Project
Manager engaged in the performance of its responsibilities under the
Project Agreements at the job site, and such other coverage as the
Participants may agree is desirable.
21.2 During the operating stage, each Operating Agent shall procure
or cause to be procured and maintain broad form steam turbine insurance,
including reasonable expediting expenses; broad form boiler and pressure
vessel insurance, including reasonable expediting expenses; work men's
compensation insurance covering employees of the Operating Agent engaged
in the performance of its responsibilities under the Project Agreements at
the job site; physical damage insurance; comprehensive bodily
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injury and property damage liability insurance; employees dishonesty
bonds; and automobile liability insurance; and such other coverage as the
Participants may agree is desirable.
21.3 Each Participant shall be named an insured, individually and
jointly with the other Participants, on all insurance, and the
comprehensive bodily injury and property damage liability insurance shall
carry cross-liability endorsements.
21.4 Salt River Project shall be the loss payee for all property
insurance covering such interests in the Navajo Project as it holds for
the use and benefit of the United States. Any proceeds paid to Salt River
Project by reason of the destruction or damage of such interests shall be
held or disposed of by it pursuant to the terms of the Project Agreements.
21.5 The insurable values, limits, deductibles, retentions and other
special terms of the Project Insurance shall be agreed upon by the
Participants prior to the placement of such Project Insurance. Pending
such agreement, the Project Managers or Operating Agents shall procure
insurance binders providing such coverage as in their respective judgments
is necessary. After such agreement, a policy of Project Insurance shall
not be changed without the prior written consent of all of the
Participants, except for minor changes and insurance
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binders procured pursuant to this Section 21.5, as to which notification
shall be given to the other Participants by the Project Manager or
Operating Agent responsible for procuring such Project Insurance.
21.6 Each Participant shall be furnished with either a certified
copy of each of the policies of the Project Insurance or a certified copy
of each of the policy forms of Project Insurance, together with a line
sheet therefor (and any subsequent amendments) naming the insurers and
underwriters and the extent of their participation.
21.7 Each Co-Tenant shall have the right, by written notice to the
party procuring the policy, to name any mortgagee, trustee or secured
party on all or any of the Project Insurance policies as loss payees or
additional insureds as their interests may appear.
21.8 Each of the Project Insurance policies shall be endorsed so as
to provide that all additional named insureds shall be given the same
advance notice of cancellation or material change as that required to be
given to the party having procured the policy.
21.9 Project Insurance policies shall be primary insurance for all
purposes and shall be so endorsed. Any insurance carried by a Participant
individually shall not participate with the Project Insurance as respects
any loss or claim for which valid and collectible Project Insurance shall
apply and shall apply solely as respects
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the individual interest of the Participant carrying such insurance.
21.10 In the event that any other Co-Tenant's insurance program
affords equal or better coverage on a more favorable cost basis than that
available to the Project Manager or Operating Agent responsible for
procuring such Project Insurance, the Participants may agree by separate
written agreement that such insurance program may be utilized to afford
all or part of the Project Insurance coverage required by Sections 21.1 or
21.2 hereof.
22. LIABILITY:
22.1 Except for any damage resulting from Willful Action, and except
to the extent of any damage covered by valid and collectible Project
Insurance, liability on the part of any Participant (first Participant),
or any of its directors, officers or employees, for any damage to any
Participant (second Participant), whether or not caused by negligence,
which occurs as the result of performance or non-performance of its
responsibilities under the Project Agreements may not be collected from
the Participant (first Participant), or any of its directors, officers or
employees, by any action in law or equity by the Participant (second
Participant).
22.2 In the event any insurer providing Project Insurance refuses to
pay any judgment obtained by a Participant (second Participant) against
another
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Participant (first Participant), or any of its directors, officers or
employees, on account of liability referred to in Section 22.1 hereof, the
Participant (first Participant), or any of its directors, officers or
employees, against whom the judgment is obtained, shall, at the request of
the prevailing Participant (second Participant) and in consideration for
the release given in Section 22.1 hereof, execute such documents as may be
necessary to effect an as assignment of its contractual rights against the
non-paying insurer and thereby give the prevailing Participant (second
Participant) the opportunity to enforce its judgment directly against such
insurer.
22.3 Except for Station Work Liability resulting from Willful
Action, and except as provided in Section 22.6 hereof, the costs and
expenses of discharging all Station Work Liability imposed upon one or
more of the Participants for which payment is not made by Project
Insurance shall be allocated among the Participants in proportion to their
Generation Entitlement Shares.
22.4 Except for Transmission Work Liability resulting from Willful
Action, and except as provided in Section 22.6 hereof, the costs and
expenses of discharging all Transmission Work Liability imposed upon one
or more of the Participants for which payment is not made by the Project
Insurance shall be allocated among the Participants in proportion to their
cost responsibility in the
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facilities involved in the operative facts which give rise to the
Transmission Work Liability. However, if the proximate cause of such
liability cannot be determined or is not related to any particular
facilities, then such costs and expenses shall be allocated among the
Participants in proportion to their Generation Entitlement Shares.
22.5 Each Participant shall be responsible for the consequences of
its own Willful Action, and shall indemnify and hold harmless the other
Participants from the consequences thereof.
22.6 Except for liability resulting from Willful Action, any
Participant whose electric customer shall make a claim or bring an action
for any death, injury, loss or damage arising out of electric service to
such customer, shall indemnify and hold harmless all other Participants,
their directors, officers and employees, from and against any liability
for such death, injury, loss or damage. The term "electric customer" shall
mean an electric consumer to whom no Power is delivered for resale.
22.7 The provisions of this Section 22 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 valid and collectible Project
Insurance policies.
22.8 The terms "Participant" and "Participants",
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as used in this Section 22, shall include any Project Manager or Operating
Agent, in its capacity as such.
23. INTERESTS HELD FOR THE USE AND BENEFIT OF UNITED STATES:
23.1 Salt River Project shall acquire and hold the interests
acquired for the use and benefit of the United States so that the United
States will realize the full use and benefit of its entitlement as
provided for in the Project Agreements.
23.2 Salt River Project shall not execute any Project Agreement or
any other agreement which purports to apply to the rights, titles or
interests held for the use and benefit of the United States to which the
United States is not a contracting party in its capacity as a Participant
without the prior written consent of the United States. Except as
otherwise provided in the Project Agreements, Salt River Project shall not
exercise any rights, privileges or options in any such agreement for or on
behalf of the United States without the prior written consent of the
United States. With respect to any Project Agreement to which the United
States is not a contracting party, except as otherwise provided in the
Project Agreements, the United States shall have a right, co-equal with
the rights of the Participants who are contracting parties to such Project
Agreement, to participate in any decision or action taken under such
Project Agreement which in any manner applies to or affects a right,
-41-
title or interest held by Salt River Project for the use and benefit of
the United States, to the same extent and to the same effect as though the
United States were a contracting party to such Project Agreement.
23.3 Although it is the intention of the Participants that no
Co-Tenant should incur any additional liability or burden by reason of the
generating and transmission Capacity dedicated for the use and benefit of
the United States,should any such liability or burden be imposed upon
Salt River Project solely by reason of its holding legal title to any
property or holding an interest in the Project Agreements for the use and
benefit of the United States such liability or burden shall be shared by
the Co-Tenants and allocated among them in the ratio that each Co-Tenant's
Generation Entitlement Share bears to the total Generation Entitlement
Shares of the Co-Tenants.
23.4 All moneys paid to Salt River Project pursuant to the Project
Agreements which are for the use and benefit of the United States shall
be segregated from its general funds and, upon written request of the
Contracting Officer, such funds will be invested by Salt River Project in
the manner specified in such request. All interest earned and appreciation
in value on such investments shall inure to the benefit of the United
States and all losses on such investments shall be at the risk of the
United States. If the proceeds exceed the amount
-42-
of the obligation for which they are designated or held, then, upon
written request of the United States, Salt River Project shall pay such
excess to the United States or its designee.
24. REIMBURSEMENT FOR COSTS AND EXPENSES:
24.1 The United States shall reimburse Salt River Project for all
costs and expenses not otherwise specifically provided for in the Project
Agreements but which are imposed upon, measured by and associated with the
interests held by Salt River Project for the use and benefit of the United
States.
25. DEFAULTS:
25.1 Unless otherwise provided in the Project Agreements, in the
event of a default by any Participant under any of the Project Agreements:
25.1.1 The non-defaulting Participants, following receipt of
reasonable notice, shall remedy the default, with the
costs thereof allocated among and paid by each of the
non-defaulting Participants in the ratio that their
Generation Entitlement Shares bear to the total
Generation Entitlement Shares of all non-defaulting
Participants.
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25.1.2 The defaulting Participant shall remedy such default as
soon as possible and shall pay upon demand to each non-
defaulting Participant any amount paid by such
non-defaulting Participant for the account of the
defaulting Participant plus interest thereon at the
rate of ten per cent (10%) per annum or the legal
maximum rate of interest, whichever is the lesser, from
the date of expenditure by the non-defaulting
Participant.
25.1.3 If such default by a Co-Tenant shall continue for a
period of six (6) months or more without having been
remedied by the defaulting Co-Tenant, following a
determination as a result of arbitration or judicial
proceeding that an act of default exists, the matter
may be re-submitted to arbitration as permitted by law,
with a request that the arbitrators determine what
additional remedies may be reasonably necessary or
required under the circumstances.
25.1.4 The United States shall not be liable
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for any interest charges or attorneys' fees.
25.2 Any Participant may dispute an asserted default by it, provided
that such Participant shall pay the disputed payment or perform the
disputed obligation under written protest. Payments made without protest
shall be deemed to be correct, except to the extent that audits may reveal
the necessity for adjustments.
26 ARBITRATION:
26.1 If a dispute between any of the Participants should arise under
the Project Agreements which does not involve the legal rights of or which
will not create a legal obligation upon the United States under the
Project Agreements, or will not affect the interests or rights held for
the use and benefit of the United States under the Project Agreements, any
Participant may call for submission of the dispute to arbitration, which
call shall be binding upon all of the other Participants. Except as
specifically provided in the Project Agreements, the arbitration shall be
governed by the rules and practices of the American Arbitration
Association. The award of the arbitrators shall be final and binding upon
the Participants, and the costs and expenses of the arbitrators shall be
shared equally by the Participants participating in the arbitration,
unless otherwise decided by the arbitrators.
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26.2 If a dispute arises between any of the Participants which does
or may involve the legal rights of or which will or may create a legal
obligation upon the United States under the Project Agreements, or which
affects or may affect the interests or rights held for the use and benefit
of the United States under the Project Agreements, then any Participant
may call for submission to arbitration of any part of the dispute, issue
or action related thereto which the United States may lawfully submit to
arbitration. If the Contracting Officer agrees to such arbitration, or if
the Contracting Officer refuses or fails to arbitrate and a court of
competent jurisdiction thereafter finally decides that the United States
may lawfully submit the matter in dispute to arbitration, it shall be
conducted in the manner set forth in Section 26.1 hereof, or in such
other manner as may be provided for by Federal law.
27. ACTIONS PENDING RESOLUTION OF DISPUTES:
27.1 If a dispute should arise which is not resolved by the
coordinating committee, then, pending the resolution of the dispute by
arbitration or judicial proceedings, the Project Managers or Operating
Agents shall proceed with the Station Work or Transmission Work in a
manner consistent with the Project Agreements and generally accepted
practice in the electric utility industry, and the Participants shall
advance the funds required to
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perform such Station Work or Transmission Work in accordance with the
applicable provisions of the Project Agreements. The resolution of any
dispute involving the failure of one of the committees to reach agreement
upon matters involving future expenditures shall have prospective
application from the date of final determination, and amounts advanced by
the Participants pursuant to this Section 27.1 during the pendency of such
dispute shall not be subject to refund except upon a final determination
that the expenditures were not made in a manner consistent with generally
accepted practice in the electric utility industry.
28. REMOVAL OF OPERATING AGENTS:
28.1 If an Operating Agent shall fail to remedy any material act of
default within a reasonable time following a final determination by a
panel or arbitrators or judicial proceeding that the Operating Agent is in
default, then any Participant may cause the Operating Agent to be removed
by serving written notice of removal upon such Operating Agent and upon
all of the other Participants.
29. RELATIONSHIP OF PARTICIPANTS:
29.1 The covenants, obligations and liabilities of the Participants
are intended to be several and not joint or collective and, except as
expressly provided in the Project Agreements, nothing herein contained
shall ever
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be construed to create an association, joint venture, trust or
partnership, or to impose a trust or partnership covenant, obligation or
liability on or with regard to any one or more of the Participants. Each
Participant shall be individually responsible for its own covenants,
obligations and liabilities as herein provided. No Participant or group of
Participants shall be under the control of or shall be deemed to control
any other Participant or the Participants as a group. No Participant shall
be the agent of or have a right or power to bind any other Participant
without its express written consent, except as provided in the Project
Agreements.
29.2 The Co-Tenants hereby elect to be excluded from the application
of Subchapter "K" of Chapter 1 of Subtitle "A" of the Internal Revenue
Code of 1954, or such portion or portions thereof as may be permitted or
authorized by the Secretary of the Treasury or his delegate insofar as
such Subchapter, or any portion or portions thereof, may be applicable to
the Co-Tenants under the Project Agreements.
30. FEES:
30.1 No Project Manager or Operating Agent shall receive any fee or
profit hereunder.
31. OFFICIALS NOT TO BENEFIT:
31.1 No Member of or Delegate to Congress or Resident Commissioner
shall be admitted to any share or part of
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this agreement or to any benefit that may arise herefrom, but this
restriction shall not be construed to extend to this agreement if made
with a corporation or company for its general benefit.
32. COVENANT AGAINST CONTINGENT FEES:
32.1 The Co-Tenants warrant that no person or selling agency has
been employed or retained to solicit or secure this agreement upon an
agreement or understanding for a commission, percentage, brokerage or
contingent fee, excepting bona fide employees or bona fide established
commercial or selling agencies maintained by a Co-Tenant for the purpose
of securing business. For breach or violation of this warranty the United
States shall have the right to annul this agreement without liability or
in its discretion to deduct from the payments to be made hereunder, or
otherwise recover the full amount of such commission, percentage,
brokerage or contingent fee.
33. EQUAL OPPORTUNITY:
33.1 Except as provided in Title.42 U.S.C. Section 2000-e-2(i) and
in keeping with any obligation undertaken by any of the Co-Tenants, in
this section referred to as the Contractor, or their assigns, pursuant to
the terms of said Title 42 U.S.C. Section 2000-e-2(i) to give preference
for employment to qualified Indians for work on or near an Indian
Reservation, during the performance of this
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agreement, the Contractor agrees as follows:
33.1.1 The Contractor will not discriminate against any
employee or applicant for employment because of race,
color, religion, sex or national origin. The Contractor
will take affirmative action to insure that applicants
are employed, and that employees are treated during
employment without regard to their race, color,
religion, sex or national origin. Such action shall
include, but not be limited to the following:
Employment, upgrading, demotion or transfer;
recruitment or recruitment advertising; layoff or
termination; rates of pay or other forms of
compensation; and selection for training, including
apprenticeship. The Contractor agrees to post in
conspicuous places available to employees and
applicants for employment, notices to be provided by
the Contracting Officer setting forth the provisions of
this equal
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opportunity clause.
33.1.2 The Contractor will, in all solicitations or
advertisements for employees placed by or on behalf of
the Contractor, state that all qualified applicants
will receive consideration for employment without
regard to race, color, religion, sex or national
origin.
33.1.3 The Contractor will send to each labor union or
representative of workers with which it has a
collective bargaining agreement or other contract or
understanding, a notice to be provided by the agency
Contracting Officer advising the labor union or
workers' representative of the Contractor's commitments
under this equal opportunity clause, and shall post
copies of the notice in conspicuous places available to
employees and applicants for employment.
33.1.4 The Contractor will comply with all provisions of
Executive Order No. 11246 of September 24, 1965, and of
the rules, regulations and
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relevant orders of the Secretary of Labor.
33.1.5 The Contractor will furnish all information and reports
required by Executive Order No. 11246 of September 24,
1965, and by the rules, regulations and orders of the
Secretary of Labor, or pursuant thereto, and will
permit access to its book, records and accounts by the
contracting agency and the Secretary of Labor for
purposes of investigation to ascertain compliance with
such rules, regulations and orders.
33.1.6 In the event of the Contractor's non-compliance with
this equal opportunity clause, or with any of the said
rules, regulations or orders, this agreement may be
cancelled, terminated or suspended in whole or in part,
and the Contractor may be declared ineligible for
further government contracts in accordance with
procedures authorized in Executive Order
-52-
No. 11246 of September 24, 1965, and such other
sanctions may be imposed and remedies invoked as
provided in Executive Order No. 11246 of September 24,
1965, or by rule, regulation or order of the Secretary
of Labor, or as otherwise provided by law.
33.1.7 The Contractor will include the provisions Of Sections
33.1.1 through 33.1.7 hereof in every subcontract or
purchase order unless exempted by rules, regulations or
orders of the Secretary of Labor issued pursuant to
Section 204 of Executive Order No. 11246 of September
24, 1965, so that such provisions will be binding upon
each subcontractor or vendor. The Contractor will take
such action with respect to any subcontract or purchase
order as the contracting agency may direct as a means
of enforcing such provisions, including sanctions for
non-compliance; provided, however, that, in the event
the Contractor becomes involved in,
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or is threatened with, litigation with a subcontractor
or vendor as a result of such direction by the
contracting agency, the Contractor may request the
United States to enter into such litigation to protect
the interests of the United States.
34. WORK HOURS ACT OF 1962:
34.1 This agreement, to the extent that it is of a character.
specified in the Contract Work Hours Standards Act (Public Law 87-581,
76 Stat. 357) and is not covered by the Walsh-Healey Public Contracts Act
(41 U.S.C. Sections 35-45), is subject to the following provisions and to
all other provisions and exceptions of said Contract Work Hours Standards
Act:
34.1.1 No Contractor or subcontractor contracting for any
part of the contract work which may require or involve
the employment of laborers or mechanics shall require
or permit any laborer or mechanic in any workweek in
which he is employed on such work, to work in excess of
eight (8) hours in any calendar day or in excess of
forty (40) hours in any workweek unless such laborer or
mechanic receives compensation at a
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rate not less than one and one-half times his basic rate
of pay for all hours worked in excess of eight (8) hours
in any calendar day or in excess of forty (40) hours in
such workweek, whichever is the greater number of
overtime hours.
34.1.2 In the event of any violation of the provisions of
Section 34.1.1 hereof, the Contractor and any
subcontractor responsible for such violation shall be
liable to any affected employee for his unpaid wages.
In addition, such Contractor or subcontractor shall be
liable to the United States for liquidated damages.
Such liquidated damages shall be computed, with respect
to each individual laborer or mechanic employed in
violation of the provisions of Section 34.1.1 hereof,
in the sum of Ten Dollars ($10.00) for each calendar
day on which such employee was required or permitted to
work in excess of eight (8) hours or in excess of forty
(40) hours in a workweek without payment of the
required overtime wages.
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34.1.3 The Secretary may withhold, or cause to be withheld,
from any monies payable on account of work performed by
the Contractor or subcontractor, the full amount of
wages required by this agreement, and such sums as may
administratively be determined to be necessary to
satisfy any liabilities of such Contractor or
subcontractor for liquidated damages as provided in
Section 34.1.2 hereof.
34.1.4 The Contractor shall require the foregoing Sections
34.1.1, 34.1.2, 34.1.3 and this Section 34.1.4 to be
inserted in all subcontracts.
35. EXAMINATION OF RECORDS:
35.1 The Co-Tenants agree that the Comptroller General of the United
States, or any of his duly authorized representatives, shall, until the
expiration of three (3) years after final payment under the Project
Agreements, have access to and the right to examine any directly pertinent
books, documents, papers and records of the Co-Tenants involving
transactions related to this agreement.
36. ASSIGNMENT OF CLAIMS:
36.1 Pursuant to the provisions of the Assignment
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of Claims Act of 1940, as amended (31 U.S.C. Section 203, 41 U.S.C.
Section 15), if this agreement provides for payments aggregating $1,000 or
more, claims for monies due or to become due any Co-Tenant from the
Government under this agreement may be assigned to a bank, trust company,
or other financing institution, including any Federal lending agency, and
may thereafter be further assigned and reassigned to any such institution.
Any such assignment or reassignment shall cover all amounts payable under
this agreement and not already paid, and shall not be made to more than
one party, except that any such assignment or reassignment may be made to
one party as agent or trustee for two or more parties participating in
such financing. Unless otherwise provided in this agreement, payments to
an assignee of any monies due or to become due under this agreement shall
not, to the extent provided in said Act, as amended, be subject to
reduction or setoff. (The preceding sentence applies only if this
agreement is made in time of war or national emergency as defined in said
Act and is with the Department of Defense, the General Services
Administration, the Atomic Energy Commission, the National Aeronautics and
Space Administration, the Federal Aviation Agency, or any other department
or agency of the United States designated by the President pursuant to
Clause 4 of the proviso of Section 1 of the Assignment of Claims Act of
1940, as amended by the Act
-57-
of May 15, 1951, 65 Stat. 41.)
36.2 In no event shall copies of this agreement or of any plans,
specifications, or other similar documents relating to work under this
agreement, if marked "Top Secret", "Secret", or "Confidential", be
furnished to any assignee of any claim arising under this agreement or to
any other person not entitled to receive the same. However, a copy of any
part or all of this agreement so marked may be furnished, or any
information contained therein may be disclosed, to such assignee upon the
prior written authorization of the Contracting Officer.
37. CONVICT LABOR:
37.1 In connection with the performance of work under this
agreement, the Contractor agrees not to employ any person undergoing
sentence or imprisonment at hard labor.
38. UNCONTROLLABLE FORCES:
38.1 No Participant shall be considered to be in default in the
performance of any of its obligations under the Project Agreements (other
than obligations of said Participant to pay costs and expenses) when a
failure of performance shall be due to uncontrollable forces. The term
"uncontrollable forces" shall be any cause beyond the control of the
Participant affected, including but not restricted to failure of or threat
of failure of facilities, flood, earthquake, storm, fire, lightning,
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epidemic, war, riot, civil disturbance or disobedience, labor dispute,
labor or material shortage, sabotage, restraint by court order or public
authority, and action or non-action by or failure to obtain the necessary
authorizations or approvals from any governmental agency or authority,
which by exercise of due diligence such Participant could not reasonably
have been expected to avoid and which by exercise of due diligence it
shall be unable to overcome. Nothing contained herein shall be construed
so as to require a Participant to settle any strike or labor dispute in
which it may be involved. Any Participant rendered unable to fulfill any
of its obligations under the Project Agreements by reason of
uncontrollable forces shall exercise due diligence to remove such
inability with all reasonable dispatch. The term "Participant" as used in
this Section 38.1 shall include any Project Manager or Operating Agent, in
its capacity as such.
39. GOVERNING LAW:
39.1 To the extent permitted by law, this agreement shall be
governed by the laws of the State of Arizona, except insofar as
controversies involving the rights of the United States are concerned.
40. BINDING OBLIGATIONS:
40.1 All of the obligations set forth in the Project Agreements
shall bind the Participants and their
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successors and assigns, and such obligations shall run with the
Co-Tenants' rights, titles and interests in the Navajo Project and with
all of the interests of each Participant in the Project Agreements;
provided that any mortgagee, trustee or secured party shall not be finally
obligated for obligations arising prior to taking of possession or the
initiation of remedial proceedings.
41. NONDEDICATION OF FACILITIES:
41.1 The Project Agreements shall not be construed to grant to any
Co-Tenant any rights of ownership in, possession of or control over the
electric system of the United States.
41.2 The Project Agreements shall not be construed to grant to the
United States any rights of ownership in, possession of, or control over
the electric system of any Co-Tenant.
41.3 The Co-Tenants do not intend to dedicate and nothing in the
Project Agreements shall be construed as constituting a dedication by any
Co-Tenant of its properties or facilities, or any part thereof, to the
United States or to any other Co-Tenant or to the customers of the
United States or to the customers of any other Co-Tenant.
42. PROJECT AGREEMENTS:
42.1 The Participants hereto agree to negotiate in good faith and to
proceed with diligence to obtain all
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of the Project Agreements among the Participants and between the
Participants and other entities.
42.2 It is acknowledged by the Participants that one or more of the
Project Agreements may contain provisions which are in conflict with or
contrary to the terms of this agreement, and any such provision in a
Project Agreement executed subsequent to the execution of this agreement
shall be deemed to supersede, amend or modify any conflicting or contrary
provision herein. The mutual agreement of the Participants to supersede,
amend or modify the terms hereof shall constitute the legal consideration
to support such change in the legal rights and obligations of the
Participants.
43. TERM:
43.1 This agreement shall become effective when it has been duly
executed and delivered on behalf of all of the Participants and shall be
effective during the interim between the date of execution thereof and the
effective date of the last of the Project Agreements; provided if any of
the Project Agreements shall fail to become effective, then this
agreement shall have a term of fifty (50) years from its effective date.
44. ASSIGNMENT OF INTERESTS:
44.1 Any Co-Tenant who acquires in its name an interest in any real
or personal property or contract which is part of the Navajo Project shall
transfer and assign an
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undivided interest therein to the other Co-Tenants so that the ownership
and rights of the Co-Tenants in such property or contract shall be as
provided for in the Project Agreements.
45. NOTICES:
45.1 Any notice, demand or request provided for in the Project
Agreements shall be deemed properly served, given or made if delivered in
person or sent by registered or certified mail, postage prepaid, to the
persons specified below:
45.1.1 United States of America
c/o The Secretary of the Interior
United States Department of the Interior
Washington, D. C. 20240
45.1.2 Arizona Public Service Company
c/o Secretary
P. O. Box 21666
Phoenix, Arizona 85036
45.1.3 Department of Water and Power of the City of
Los Angeles
c/o General Manager
P. O. Box 111
Los Angeles, California 90054
45.1.4 Nevada Power Company
c/o President
P. O. Box 230
Las Vegas, Nevada 89109
45.1.5 Salt River Project Agricultural
Improvement and Power District
c/o Secretary
P. O. Box 1980
Phoenix, Arizona 85001
45.1.6 Tucson Gas & Electric Company
c/o Secretary
P. O. Box 711
Tucson, Arizona 85702
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45.2 Any Participant may, at any time, by written notice to all
other Participants, designate different or additional persons or different
addresses for the giving of notices hereunder.
45.3 Any Project Manager or Operating Agent shall provide to each
Participant a copy of any notice, demand or request given or received by
it in connection with any of the Project Agreements.
46. MISCELLANEOUS PROVISIONS:
46.1 Each Participant agrees, upon request by the other
Participants, to make, execute and deliver any and all documents
reasonably required to implement the Project Agreements,
46.2 The captions and headings appearing in the Project Agreements
are inserted merely to facilitate reference and shall have no bearing upon
the interpretation thereof.
46.3 Each term, covenant and condition of the Project Agreements is
deemed to be an independent term, covenant and condition, and the
obligation of any Participant to perform all of the terms, covenants and
conditions to be kept and performed by it is not dependent on the
performance by the other Participants of any or all of the terms,
covenants and conditions to be kept and performed by them.
46.4 In the event that any of the terms, covenants or conditions of
any of the Project Agreements, or the
-63-
application of any such term, covenant or condition, shall be held invalid
as to any person or circumstance by any court having jurisdiction in the
premises, the remainder of such Project Agreement, and the application of
its terms, covenants or conditions to such persons or circumstances shall
not be affected thereby.
46.5 The Project Agreements shall be subject to filing with, and to
such changes or modifications as may from time to time be directed by,
competent regulatory authority, if any, in the exercise of its
jurisdiction.
46.6 The Co-Tenants shall install and diligently operate in the
Navajo Generating Station equipment offering the most effective
commercially proven electrostatic concept, or other equally effective and
acceptable equipment available under the technology known at the time of
design, having a design efficiency for removal of particulate matter of
99.5% to minimize smoke, flyash and dust in stack emissions; provided
that, except as amended in this Section 46.6, the provisions of Article 16
of the Water Service Contract dated January 17, 1969 (Contract No.
14-06-400-5033) shall remain in full force and effect.
46.7 Any waiver at any time by any Participant of its rights with
respect to a default or any other matter arising in connection with this
agreement shall not be deemed a waiver with respect to any subsequent
default or matter.
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47. USE OF FACILITIES OF LOS ANGELES:
47.1 The United States may use, for such period or periods of time
as it desires, the 500 KV transmission line of Los Angeles between
McCullough Substation and Eldorado Substation and associated terminal
facilities to the extent of the right of Los Angeles to use such terminal
facilities. Unless otherwise agreed, the United States' right to use the
facilities of Los Angeles shall not exceed 250 megawatts. Payment shall be
made annually by the United States to Los Angeles for any period of such
use at the rate of eight percent (8%) per annum of the capital cost of Los
Angeles in such line and in switching facilities at Eldorado and
McCullough Substations installed to terminate the line, as described in
Exhibit C, times the ratio that the Capacity desired by the United States
in megawatts in such line bears to 1,000 megawatts.
47.2 The land presently held by Los Angeles under Bureau of Land
Management Grant No. N-2763, dated January 23, 1969, which land comprises
the site of McCullough Substation, may be utilized by Nevada and United
States without charge for such use other than as provided in Section 47.3.
If and when Los Angeles acquires fee title to such land, Nevada and United
States shall each continue to have the right to use such land, and for any
period of such use the user shall pay
-65-
Los Angeles annually at the rate of six percent (6%) of the investment of
Los Angeles in such land times the user's Common Facilities cost
responsibility percentage in McCullough Substation as provided for in
Exhibit C.
47.3 During any period of use of land by Nevada or United States
pursuant to Section 47.2, the user shall reimburse Los Angeles for all
costs and expenses not otherwise specifically provided for in the Project
Agreements but which are imposed upon Los Angeles by virtue of its holding
interests in or owning the land comprising the site for the McCullough
Substation in the amount determined by multiplying such costs and expenses
by the user's Common Facilities cost responsibility percentage in
McCullough Substation as provided in Exhibit C.
48. AGREEMENT SUBJECT TO COLORADO RIVER COMPACT:
48.1 This agreement is made upon the express condition and with the
express understanding that all rights hereunder shall be subject to and
controlled by the Colorado River Compact, being the compact or agreement
signed at Santa Fe, New Mexico, November 24, 1922, pursuant to Act of
Congress approved August 19, 1921, entitled "An Act to permit a compact or
agreement between the States of Arizona, California, Colorado, Nevada, New
Mexico, Utah and Wyoming respecting the disposition and apportionment of
the waters of the Colorado River, and for other purposes", which Compact
was approved in
-66-
Section 13 (a) of the Boulder Canyon Project Act.
IN WITNESS WHEREOF, the parties hereto have caused this
Participation Agreement to be executed as of the 30th day of
September, 1969.
THE UNITED STATES OF AMERICA
By /s/ Walter J. Hickel
--------------------------
Secretary of the Interior
ARIZONA PUBLIC SERVICE COMPANY
ATTEST: By /s/ M. C. Titus
/s/ Gerald Griffin -------------------------
- --------------- Executive VICE PRESIDENT
Assistant Secretary
DEPARTMENT OF WATER AND POWER
OF THE CITY OF LOS ANGELES
by
BOARD OF WATER AND POWER COMMISSIONERS
OF THE CITY OF LOS ANGELES
ATTEST:
/s/ Mary J. Born By /s/ Frank R. Palmieri
- --------------- ---------------------
SECRETARY PRESIDENT
NEVADA POWER COMPANY
ATTEST:
/s/ Authorized Signatory By /s/ Harry Allen
- --------------- ----------------
Secretary President
[STAMP] [STAMP]
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SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT
ATTEST:
/s/ F. E. Smith By /s/ V. I. Corbell
- --------------- ------------------
Secretary President
TUCSON GAS & ELECTRIC COMPANY
ATTEST:
By /s/ H. R. Catlin
/s/ W. D. Brooks ------------------
- ---------------- VICE PRESIDENT
ASSISTANT SECRETARY
-68-
District of Columbia )
) ss.
City of Washington )
On this the 3rd day of November, 1970, before me, the undersigned officer,
personally appeared Walter J. Hickel, Secretary of the Interior of the United
States of America, known to me to be the person described in the foregoing
Navajo Project Participation Agreement (Contract No. 14-06-300-2131), and
acknowledged that he executed the same in the capacity therein stated and for
the purposes therein contained.
In witness whereof I hereunto set my hand and official seal.
/s/ Kathy A. Willing
[SEAL] -------------------------------------
My Commission Expires May 14, 1974
State of Arizona )
) ss.
County of Maricopa )
On this the 16th day of March, 1970, before me, the undersigned officer,
personally appeared M. C. Titus, who acknowledged himself to be the Executive
Vice President of ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation, and
that he, as such Executive Vice President, being authorized so
-69-
to do, executed the foregoing Navajo Project Participation Agreement (Contract
No. 14-06-300-2131) for the purposes therein contained, by signing the name of
the corporation by himself as such Executive Vice President.
In witness whereof I hereunto set my hand and official
[SEAL] /s/ Authorized Signatory
------------------------
Notary Public
My commission expires:
My Commission Expires Oct. 15, 1971
- -----------------------------------
State of California )
) ss.
County of Los Angeles ) See Page 74
On this, the _______________ day of_____________________________, 1970,
before me the undersigned officer, personally appeared Frank R. Palmieri, the
President of the Board of Water and Power Commissioners of the DEPARTMENT OF
WATER AND POWER OF THE CITY OF LOS ANGELES, a department organized and existing
under the Charter of the City of Los Angeles, a municipal corporation of the
State of California, known to me to be the person described in the foregoing
Navajo Project Participation Agreement (Contract No. 14-06-300-2131), and
acknowledged that he executed the same in the capacity therein stated and for
the purposes therein contained.
-70-
In witness whereof I hereunto set my hand and official seal.
____________________
Notary Public
My commission expires:
________________________
State of Nevada )
) ss.
County of Clark )
On this the 12th day of June, 1970, before me, the undersigned officer,
personally appeared Harry Allen, known to me to be the President of NEVADA POWER
COMPANY, a Nevada corporation, and that he, as such President, being authorized
so to do, executed the foregoing Navajo Project Participation Agreement
(Contract No. 14-06-300-2131) for the purposes therein contained, by signing the
name of the corporation by himself as President.
In witness whereof, I hereunto set my hand and official seal.
/s/ Myrtice L. Carroll
-----------------------
Notary Public
My commission expires:
_____________________
[STAMP]
-71-
State of Arizona )
) ss.
County of Maricopa )
On this the 16th day of March, 1970, before me, the undersigned officer,
personally appeared V. I. Corbell and F. E. Smith, the President and Secretary,
respectively, of SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT,
an Arizona agricultural improvement district, known to me to be the persons
described in the foregoing Navajo Project Participation Agreement (Contract No.
14-06-300-2131), and acknowledged that they executed the same in the capacity
therein stated and for the purposes therein contained.
In witness whereof I hereunto set my hand and official seal.
/s/ Joanne Claridge
-------------------- [SEAL]
Notary Public
My commission expires:
My Commission Expires July 11, 1972
- -----------------------------------
State of Arizona )
) ss.
County of Pima )
On this the 11th day of June, 1970, before me, the undersigned officer,
personally appeared H. R. Catlin, who acknowledged himself to be the Vice
President of TUCSON GAS & ELECTRIC COMPANY, an Arizona corporation, and that he,
-72-
as such Vice President, being authorized so to do, executed the foregoing Navajo
Project Participation Agreement (Contract No. 14-06-300-2131) for the purposes
therein contained, by signing the name of the corporation by himself as Vice
President.
In witness whereof I hereunto set my hand and official seal.
/s/ Diana Howland
--------------------
Notary Public
My commission expires:
[SEAL]
My.Commission Expires Dec. 8, 1972
-----------------------------------
-73-
State of California )
) ss.
County of Los Angeles )
On this, the 1st day of October, 1970, before me, the undersigned officer,
personally appeared Frank R. Palmieri and Mary J. Born, who were on November 20,
1969, the President and Secretary, respectively, of the Board of Water and Power
Commissioners of the DEPARTMENT OF WATER AND POWER OF THE CITY OF LOS ANGELES, a
department organized and existing under the Charter of The City of Los Angeles,
a municipal corporation of the State of California, known to me to be the
persons described in the foregoing Navajo Project Participation Agreement
(Contract No. 14-06-300-2131; DWP No. 10334), and acknowledged that they
executed the same on November 20, 1969, in the capacity therein stated and for
the purposes therein contained.
In witness whereof I hereunto set my hand and official seal.
/s/ Linda L. Newman
--------------------
Notary Public
My commission expires:
[STAMP]
______________________
-74-
EXHIBIT A
DESCRIPTION OF NAVAJO PROJECT
Exhibit A-l - Description of Navajo Generating Station
The Navajo Generating Station shall consist of the following:
I. Three steam electric generating units (Unit 1, Unit 2 and Unit
3), which shall have a nameplate rating of 750,000 KW and shall be
tandem-compound, four flow, single reheat, turbine-generator units with initial
steam conditions of 3500 psig and 1000 F. and reheat to 1000 F. and designed to
take steam from three pulverized coal-fired super-critical steam generator
units.
II. All auxiliary equipment associated with said units.
III. An administration building machine shop and warehouse to be
located adjacent to the powerplant.
IV. A pumping station and all associated equipment to be located on
the Colorado River.
V. 500 KV step-up transformers and all equipment associated
therewith up to the point where the leads from the said transformers terminate
at the dead-end structure in the Navajo 500 KV Switchyard.
VI. Standby auxiliary power transformation equipment and related
facilities.
VII. Plant control and communication facilities and associated
buildings or equipment.
Exhibit A-2 - Description of Transmission System
The Transmission System shall consist of the following:
I. Navajo 500 KV Switchyard
A. The Navajo 500 KV Switchyard shall be a basic
breaker-and-a-half scheme providing termination for facilities as presently
planned:
1. Navajo Generating Unit #1.
2. Navajo Generating Unit #2.
3. Navajo Generating Unit #3.
4. Navajo-McCullough 500 KV Line.
5. Navajo-Moenkopi 500 KV Line.
6. Navajo-Phoenix Area 500 KV Line.
B. The switchyard limits for purposes shown on Exhibit C will be
the low voltage bushings of the generator step-up transformer and where the 500
KV leads from the series and shunt compensation attach to the switchyard
structure. The switchyard limits for purposes of design, construction, operation
and maintenance shall be the switchyard side of the first 500 KV transmission
line dead-end tower located outside the switchyard or where the 500 KV leads
from the generator step-up transformers attach to the switchyard structure. The
switchyard will include the metering, protective equipment, communications
equipment,
-2-
relaying and associated equipment, etc.
II. Navajo-McCullough 500 KV Line
The Navajo-McCullough 500 KV line for purposes shown on Exhibit
C shall consist of approximately 250 miles of 500 KV line with associated series
and shunt compensation, terminated at the appropriate 500 KV switchracks in the
Navajo 500 KV Switchyard and McCullough 500 KV Switchyard.
III. Navajo-Moenkopi 500 KV Line
The Navajo-Moenkopi 500 KV line for purposes shown on Exhibit C
shall consist of approximately 76 miles of 500 KV line with associated series
and shunt compensation, terminated at the appropriate 500 KV switchracks in the
Navajo 500 KV Switchyard and Moenkopi 500 KV Switchyard.
IV. Navajo-Phoenix Area 500 KV Line
The Navajo-Phoenix Area 500 KV line for purposes shown on
Exhibit C shall consist of approximately 249 miles of 500 KV line with
associated series and shunt compensation, terminated at the appropriate
switchracks in the Navajo 500 KV Switchyard and Phoenix Area Substation(s).
V. Moenkopi-Phoenix Area 500 KV Line
The Moenkopi-Phoenix Area 500 KV line for purposes shown on
Exhibit C shall consist of approximately 173 miles of 500 KV line with
associated series and shunt compensation, terminated at the appropriate 500 KV
switchracks in the Moenkopi 500 KV Switchyard and Phoenix Area
-3-
Substation(s).
VI. Other Associated Components
A. Moenkopi 500 KV Switchyard to be owned and expanded by
Arizona Public Service Company in accordance with Section 7.11 and Exhibit H of
this agreement.
B. Additions to series capacitors in the Moenkopi-Eldorado 500
KV line.
C. Additions to series capacitors in the Arizona Public Service
Company Cholla-Pinnacle Peak 345 KV line.
D. Additions to series capacitors in the Arizona Public Service
Company Four Corners-Moenkopi 500 KV line.
VII. McCullough Substation
The McCullough Substation shall consist of the following
components:
A. The 500 KV switchyard comprising the termination facilities
for the Navajo-McCullough 500 KV Line, McCullough-Victorville 500 KV Line,
McCullough-Eldorado 500 KV Line and transformer bank, including but not limited
to the 500 KV AC buses, power circuit breakers and disconnect switches and the
structures therefor.
B. A 400 MVA 500/287 KV transformer bank and the equipment
associated therewith, spare 133 MVA 500/287 KV transformer and the transformer
leads from the high and low voltage transformer bushings to the points of
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termination on the buses in the 500 KV and 287 KV switchyards.
C. The 287 KV switchyards comprising the termination
facilities for two McCullough-Nevada 287 KV Lines, McCullough-Hoover 287 KV Line
and transformer bank, including, but not limited to, the 287 KV buses, power
circuit breakers, disconnect switches and the structures therefor.
D. The common facilities, which shall include, but not limited
to, communications equipment, protection equipment controls, batteries,
auxiliary equipment, station grounding grid, lighting and yard improvements, but
shall not include the substation site.
E. The substation limits for the purposes shown on Exhibit C
shall be where the leads from the series and shunt compensation for the
Navajo-McCullough 500 KV Line and McCullough-Victorville 500 KV Line, from the
McCullough-Eldorado 500 KV Line, from the two McCullough-Nevada 287 KV Lines,
and from the McCullough-Hoover 287 KV Line attach to the substation structure.
The substation limits for the purpose of design, construction, operation and
maintenance shall be the substation side of the first 500 KV and 287 KV
transmission line dead-end towers located outside the substation. The substation
shall include the metering, protective equipment, communications equipment,
relaying and associated equipment, etc.
-5-
VIII. Phoenix Area Substation(s)
A. The Phoenix Area Substation(s) shall be a basic
breaker-and-a-half scheme providing termination for facilities presently
planned:
1. Moenkopi-Phoenix Area 500 KV Line.
2. Navajo-Phoenix Area 500 KV Line.
3. A 500/230 KV step-down transformer #1.
4. A 500/230 KV step-down transformer #2.
5. A 500/345 KV step-down transformer.
B. The substation limits for purposes shown on Exhibit C will
be where the 500 KV leads from the series and shunt compensation attach to the
switchyard structure and where the 230 KV and 345 KV leads from the step-down
transformer attach to the substation structure in the 230 KV and 345 KV
substation. The substation limits for purposes of design, construction,
operation and maintenance shall be the substation side of the first 500 KV
transmission line dead-end tower located outside the switchyard or where the 230
KV and 345 KV leads from the step-down transformer attach to the substation
structure in the 230 KV and 345 KV substation.
-6-
EXHIBIT B
Navajo Project
[MAP]
EXHIBIT C
TRANSMISSION ALLOCATION
CONSTRUCTION AND O&M COST
OWNERSHIP % RESPONSIBILITY %
-------------------------------------- ----------------------------------
SRP 1/ APS TGE NPC L.A. SRP 2/ SRP APS TGE NPC L.A. U.S.
------ ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
I. Navajo 500 KV Switchyard 21.7 14.0 7.5 11.3 21.2 24.3 21.7 14.0 7.5 11.3 21.2 24.3
II. Navajo-McCullough 500 KV Line 26.1 48.9 25.0 26.1 48.9 25.0
III. Navajo-Moenkopi 500 KV Line 21.7 14.0 7.5 11.3 21.2 24.3 21.7 14.0 7.5 11.3 21.2 24.3
IV. Navajo-Phoenix Area 500 KV Line 38.3 24.7 13.3 23.7 38.3 24.7 13.3 23.7
V. Moenkopi-Phoenix Area 500 KV
Line 38.3 24.7 13.3 23.7 38.3 24.7 13.3 23.7
VI. Other Associated Components 3/
A. Moenkopi 500 KV Switchyard 100.00 21.7 14.0 7.5 11.3 21.2 24.3
B. Moenkopi-Eldorado 500 KV
Series Capacitor Additions 4/ 26.1 48.9 25.0
C. Cholla-Pinnacle Peak 345 KV
Series Capacitor Additions 100.00 38.3 24.7 13.3 23.7
D. Four Corners-Moenkopi 500 KV
Series Capacitor Additions 100.00 38.3 24.7 13.3 23.7
VII. McCullough Substation 5/
VIII. Phoenix Area 500 KV Substation(s)38.3 24.7 13.3 23.7 38.3 24.7 13.3 23.7
1/ SRP's ownership for its own use and benefit
2/ SRP's ownership for the use and benefit of the United States.
3/ O&M cost responsibility applies only to the facilities added at these
locations in conjunction with the Navajo Project.
4/ The capacitors on the Eldorado end of this line will be owned 100% by
Southern California Edison Co. and those on the Moenkopi end will be owned
100% by APS.
5/ See Exhibit C-1A for details of ownership and cost responsibility. There
is attached to this Exhibit C, Exhibits C-1, C-1A and C-1B, which by this
reference are made a part of this Exhibit C.
EXHIBIT C-1
NAVAJO PROJECT [ILLEGIBLE] DIAGRAM OF
COST RESPONSIBILITY, PROJECT MANAGER & OPERATING AGENT
LIMITS FOR TRANSMISSION SYSTEM
[NAVAJO PROJECT PLAN]
EXHIBIT C-1A
NAVAJO PROJECT
MCCULLOUGH SUBSTATION
NEVADA POWER COMPANY
[NAVAJO PROJECT PLAN]
CONSTRUCTION AND MAINTENANCE
OWNERSHIP % COST RESPONSIBILITY %
--------------------------------------------------------
SUBSTATION COMPONENT LA NPC SRP(1) LA NPC U.S.
--------------------------------------------------------
500 kv Switchyard 77.4 16.4 6.2 77.4 16.4 6.2
287 kv Switchyard 40.1 59.9 -- 40.1 59.9 --
500/287 kv Transformer Bank 60.5 39.5 -- 60.5 39.5 --
Common Facilities 67.9 23.9 8.2 67.9 23.9 8.2
(1) SRP's ownership for the use and benefit of the United States.
The cost responsibility percentage for each Participant in Common
Facilities is the proportion that the investment of each Participant in line
compensation within McCullough Substation and in the other components of
McCullough Substation bears to the total investment of the Participants in such
line compensation and components expressed as a percentage and the percentages
for Common Facilities shown in the above table are to be recalculated using this
method when actual cost determinations are made.
The ownership percentage for each Participant in Common Facilities shall
be the same as the cost responsibility percentage in Common Facilities for such
Participant, except that the ownership percentage in Common Facilities of Salt
River Project shall be the same as the cost responsibility percentage in Common
Facilities of United States.
The Substation operation cost responsibility percentage shall be the same
as the construction and maintenance cost responsibility percentage Common
Facilities.
Los Angeles shall construct, operate and maintain additional facilities
EXHIBIT C-1B
500 KV TRANSMISSION LINE OF LOS ANGELES BETWEEN McCULLOUGH SUBSTATION AND
ELDORADO SUBSTATION AND SWITCHING FACILITIES AT ELDORADO AND McCULLOUGH
SUBSTATIONS INSTALLED TO TERMINATE THE LINE.
[NAVAJO PROJECT FLOW CHART]
SWITCHING FACILITIES INSTALLED TO TERMINATE THE 500KV LINE BETWEEN McCULLOUGH
SUBSTATION AND ELDORADO SUBSTATION ALLOCATED AS A PERCENTAGE OF SUBSTATION
COMPONENTS.
McCullough Substation
25.0% of 500 kv Switchyard
5.8% of Common Facilities Note for Exhibit C:
Eldorado Substation Exhibit C-1B by this
[ILLEGIBLE] is made a
16.7% of 500 kv Switchyard part of this Exhibit
EXHIBIT D
SCHEDULE OF CONSTRUCTION DATES
NAVAJO PROJECT
SCHEDULED SCHEDULED
NAVAJO START UP FIRM
GENERATING STATION DATE OPERATION
- ------------------ --------- ---------
Unit #1 3-1-74 6-1-74
Unit #2 3-1-75 6-1-75
Unit #3 3-1-76 6-1-76
SCHEDULED
ENERGIZATION FIRM
TRANSMISSION SYSTEM FOR TEST DATE OPERATION
- ------------------------------------ ------------- ---------
Navajo 500 KV Switchyard 2-1-74 3-1-74
Navajo-McCullough 500 KV Line 2-1-74 3-1-74
Navajo-Moenkopi 500 KV Line 2-1-74 3-1-74
Navajo-Phoenix Area 500 KV Line 2-1-75 3-1-75
Moenkopi -Phoenix Area 500 KV Line 2-1-74 3-1-74
Moenkopi 500 KV Switchyard 2-1-74 3-1-74
Cholla-Pinnacle Peak 345 KV Line ** 2-1-75 3-1-75
Four Corners-Moenkopi 500 KV Line ** 2-1-74 3-1-74
Moenkopi-Eldorado 500 KV Line ** 2-1-74 3-1-74
McCullough Substation 2-1-74 3-1-74
Phoenix Area Substation (#1) * 2-1-74 3-1-74
Phoenix Area Substation (#2) * 2-1-75 3-1-75
- ----------
* Phoenix Area #2 Substation needed only if both Phoenix 500 KV lines are
not terminated in same substation.
** Compensation only
EXHIBIT E
CONSTRUCTION COSTS OF THE NAVAJO PROJECT,
INCLUDING THE NAVAJO GENERATING STATION
AND THE TRANSMISSION SYSTEM
1.1 Construction costs shall consist of payments made and obligations
incurred (other than obligations for interest during construction) for the
account of Station Work or Transmission Work and shall consist of, but not be
limited to, the following:
1.1.1 All costs of labor, services and studies performed in
connection with Station Work or Transmission Work if
authorized and approved by the Project Managers.
1.1.2 Payroll and other expenses of the Project Managers'
engineering departments for their employees who perform
Station Work or Transmission Work, including customary labor
loading charges applicable thereto, such as department
overheads, time-off allowances, payroll taxes, compensation
insurance and employee benefits.
1.1.3 All components of the costs of construction, all overhead
costs associated with construction (including the allowance
for the Project Managers' administrative and
general expenses described in Exhibit E-l of this agreement),
all temporary facilities, all land and land rights, all
structures and improvements, and all equipment for the Navajo
Project, as set forth in the Electric Plant Instructions of
the FPC Accounts.
1.1.4 All costs and expenses, including those of outside consultants
and attorneys, incurred by the Project Managers or other
Parties in regard to the land and water rights and fuel
requirements and supply for the Navajo Project and to the
preparation of other agreements relating to Station Work or
Transmission Work with entities other than (i) the United
States acting in its capacity as a contractor for resources to
supply Central Arizona Project pumping power requirements and
(ii) the Participants. All Parties anticipating such costs and
expenses shall submit an estimate of such costs and expenses
to the respective Project Managers for authorization and
approval. Any Party incurring such costs and expenses shall
bill the respective Project Manager therefor.
-2-
1.1.5 All costs, including any rental charges, of materials,
supplies, tools, machinery, equipment, apparatus and
construction power used in connection with Station Work or
Transmission Work.
1.1.6 All costs of Project Insurance and all costs of any loss,
damage or liability arising out of or caused by Station Work
or Transmission Work which is not satisfied under the coverage
of Project Insurance.
1.1.7 All federal, state or local taxes of any character imposed
upon Station Work or Transmission Work, except any tax
assessed directly against an individual Party, unless such tax
was assessed to such individual Party in behalf of any or all
of the other Parties.
1.1.8 Expenses of other Parties incurred in the performance of
Station Work or Transmission Work, if authorized and approved
by the respective Project Manager, and the expenses of the
Operating Agents incurred during the engineering design
period, the construction period and the testing, the start-up
period of each unit of construction,
-3-
excluding any training expenses not properly chargeable to
construction costs.
1.1.9 All costs of relocating existing facilities by Station Work
or Transmission Work. Relocation of facilities and costs in
connection therewith shall be subject to agreement between the
Project Manager and the owners of the facilities involved.
1.2 In cases where the allocation of a cost item is made between Station
Work or Transmission Work and other work, such allocation shall be made on a
fair and equitable basis.
1.3 The Project Managers shall use the FPC Accounts to account for
construction costs in the final completion report and any supplement thereto.
1.4 The Project Managers and the other Parties shall not be entitled to a
fee, price, percentage or any other compensation over and above the costs of
services rendered by them in the performance of Station Work or Transmission
Work.
-4-
EXHIBIT E-1
ADMINISTRATIVE AND GENERAL EXPENSES APPLICABLE
TO CONSTRUCTION COSTS OF THE NAVAJO GENERATING
STATION AND THE TRANSMISSION SYSTEM
1.1 The allowance for the Project Manager's administrative and general
expenses to cover the costs of services rendered by it in the performance of
Station Work or Transmission Work shall be allocated monthly at the rate of
one per cent (1%) of construction costs incurred during the preceding month,
excluding from such construction costs:
1.1.1 Any allowance for administrative and general expenses provided
for in this Section 1.1.
1.1.2 Expenses of other Participants incurred in the performance of
Station Work or Transmission Work if authorized and approved
by the Project Manager, and the expenses of the Operating
Agent incurred during the engineering design period, the
construction period and the start-up period of each unit,
excluding any training expenses not charged to construction
costs, but including expenses which are billed by the
Operating Agent to the Project Manager pursuant to Section
1.1.3 of this Exhibit E-1.
1.1.3 All charges relating to the operation and maintenance of all
units during the start-up period of each said unit. Charges
shall include (a) the cost of fuel, (b) the cost of all
operation and maintenance expenses (exclusive of the cost of
maintenance performed by the engineer-constructor start-up
crews), and (c) an allowance for the Operating Agent's payroll
loading and administrative and general expenses.
1.1.4 Excepting only death, injury, loss or damage resulting from
Willful Action, the Participants shall pay to the extent of
their respective Generation Entitlement Shares for the costs
of discharging all legal liability imposed upon a Participant
for which payment shall not be made on account of valid and
collectible Project Insurance, and the expenses incurred in
settlement of injury and damage claims, including the costs of
labor and related supplies and expenses incurred in injury and
damage activities (all as referred to in FPC Account 925),
because of any claim arising out of or attributable to the
construction of the Navajo Project, the past
-2-
or future performance or non-performance of the obligations
and duties of any Participant (including the Project
Manager)or the past or future performance or non-performance
of Station Work or Transmission Work, including but not
limited to any claim resulting from death or injury to persons
or damage to property.
1.2 The allowance for the Operating Agent's administrative and general
expenses to cover the costs of services rendered by it in the performance of
capital additions, capital betterments and capital replacements shall be derived
in accordance with the procedure on Attachment No. 1 to this Exhibit E-1.
-3-
EXHIBIT E-1
ATTACHMENT NO. 1
CAPITAL ADMINISTRATIVE AND GENERAL RATIO
NAVAJO PROJECT
The rate to be applied to the Operating Agent's labor charges, which are
included in expenses for capital additions, capital betterments, and capital
replacements, to determine the Operating Agent's Administrative and General
expenses applicable thereto shall be established annually on the basis of the
Operating Agent's preceding year's construction expenses by the method set
forth herein unless otherwise agreed to by the Participants. The Administrative
and General Ratio will be adjusted to actual at year-end and the adjusted ratio
used in preparation of a revised billing to the Participants. A percentage based
on the Operating Agent's Administrative and General expenses shall be applied to
total construction costs on the following basis:
I Administrative and General expenses shall include:
(a) Expenses in F.P.C. accounts 920 and 921 applicable to
construction costs. The percentage for determining the
amount of such expenses allocable to construction shall
be determined as provided in Exhibit F-1, Attachment No.
1A.
(b) Payroll taxes applicable to the Administrative
and General salaries in F.P.C. accounts 920 and 921
allocable to construction, as provided in Exhibit F,
Attachments Nos. 1 and 1A.
(c) Compensation insurance applicable to the Administrative
and General salaries in F.P.C. accounts 920 and 921
allocable to construction, as provided in Exhibit F,
Attachments Nos. 3 and 3A.
(d) Pensions and benefits applicable to the Administrative
and General salaries in F.P.C. accounts 920 and 921
allocable to construction, as provided in Exhibit F,
Attachments Nos. 2 and 2A.
II Total pensions and benefits expense allocable to to total
labor charged to construction accounts at rate determined as
provided in Exhibit F, Attachment No. 2A.
III Total Administrative and General expenses allocable to
construction accounts shall be reduced by the amount of
Administrative and General expenses allocable to contract
construction.
The rate for application of Administrative and General expense to
construction costs, hereinafter referred to as "Capital A & G Ratio", is
expressed as percentage of total allocable Administrative and General expense
to total direct
labor charged to construction.
A & G Rate = A / C
where
A = net allocable A & G expenses as set forth
in I, II and III above
C = total direct labor charged to construction
accounts
-3-
EXAMPLE
DEVELOPMENT OR CAPITAL A & G RATIO
FOR THE
NAVAJO GENERATING STATION
Nevada Power Company Ariz Public Service Co.
--------------------- -----------------------
(Based on 1968 Costs) (Based on 1968 Costs)
Labor Total Labor Total
---------- --------- ---------- ----------
Net Allocable A & G Expenses
A & G salaries and expenses
charged to F.P.C. Accounts
920 and 921 $ 422,728 $ 531,802 $1,363,877 $1,910,668
========== ========= ========== ==========
Percent (See Exh. F-1) allocable
to construction 29.74% $ 125,719 $158,158 37.14% $ 506,544 $ 709,622
Add:
Payroll Taxes on allocated
labor (Exh. F, Attach. 1A) 3.83% 4,815 3.78% 19,147
Compensation Ins. on allocated
labor (Exh. F, Attach. 3A) 1.11% 1,395 1.14% 5,775
Pensions & Benefits on allocated
labor (Exh. F, Attach. 2A) 7.66% 9,630 11.92% 60,380
--------- ----------
Total A & G expense allocable
to construction $ 173,998 $ 794,924
Pensions & Benefits expense
allocable to total labor charged
to construction accounts
(Exh. F, Attachment 2A) 7.66% $1,282,333 $ 98,227 11.92% $4,879,188 $ 581,600
--------- ----------
Total A & G expense plus pensions
and benefits expenses
allocable to construction $ 272,225 $1,376,524
Less amount of A & G expenses
allocable to contract construction. 2,580 188,230
--------- ----------
Remainder of A & G plus benefits
expense allocable to construction $ 269,645 $1,188,294
========= ==========
Total Direct labor Charged to
Construction Accounts $ 933,695 $4,293,248
========= ==========
Capital A & G Ratio = $ 269,645 $1,188,294
---------- = 28.88% ---------- = 27.68%
$ 933,695 ===== $4,293,248 =====
Salt River Project L. A. DWP
----------------------- ------------------------
(Based on 1969 Budget) (Based on 68-69 Costs)
Labor Total Labor Total
----------- ---------- ----------- -----------
Net Allocable A & G Expenses
A & G salaries and expenses
charged to F.P.C. Accounts
920 and 921 $1,730,086 $2,334,498 $ 3,412,254 $ 6,126,895
========== ========== =========== ===========
Percent (See Exh. F-1) allocable
to construction 38.83% $ 671,792 $ 906,486 49.50% $1,689,066 $ 3,032,813
Add:
Payroll Taxes on allocated
labor (Exh. F, Attach. 1A) 3.38% 22,707 0.11% 1,858
Compensation Ins. on allocated
labor (Exh. F, Attach. 3A) 2.90% 19,482 0.94% 15,877
Pensions & Benefits on allocated
labor (Exh. F, Attach. 2A) 12.56% 84,377 13.66% 230,726
---------- -----------
Total A & G expense allocable
to construction $1,033,052 $ 3,281,274
Pensions & Benefits expense
allocable to total labor charged
to construction accounts
(Exh. F, Attachment 2A) 12.56% $6,606,824 $ 829,817 13.66% $43,581,981 $ 5,953,299
---------- -----------
Total A & G expense plus pensions
and benefits expenses allocable to
construction $1,862,869 $ 9,234,573
Less amount of A & G expenses
allocable to contract construction. 33,806 692,604
---------- -----------
Remainder of A & G plus benefits
expense allocable to construction $1,829,063 $ 8,541,969
========== ===========
Total Direct labor Charged to
Construction Accounts $5,898,725 $24,417,890
========== ===========
$1,829,063 $ 8,541,969
Capital A & G Ratio = ---------- = 31.00% ----------- = 34.98%
$5,898,725 ===== $24,417,890 =====
EXHIBIT F
OPERATION AND MAINTENANCE COSTS OF
THE NAVAJO GENERATING STATION
1. Generating Plant:
1.1 Operation and maintenance costs shall include the following
expenses to the extent that they are charge-able to the Navajo Generating
Station in accordance with sound accounting practice:
1.1.1 The operation expenses chargeable to FPC Accounts 500,
502, 503, 504, 505, 506, 507, 556, 557 and any costs in
the following FPC Accounts pertaining to load
dispatching:
1.1.1.1 560, 561, 562, 566 and 567.
1.1.2 The maintenance expenses chargeable to FPC Accounts 510
through 514, inclusive, and any costs in the following
FPC Accounts pertaining to load dispatching:
1.1.2.1 568, 569, 570 and 573.
1.1.3 Overhead expenses included in Sections 1.1.1 and 1.1.2
of this Exhibit F incurred by the Operating Agent
which are allocable to the operation and maintenance
of the Navajo Generating Station.
Such overhead expenses shall be determined in accordance with
the following allocation procedure:
1.1.3.1 Overhead expenses of the Operating Agent applicable
to the Navajo Generating Station operation and
maintenance expenses will be generated at two sources:
1.1.3.1.1 The salaries and expenses of the Operating
Agent's functional area responsible for power
supply and system operations, the supervisory,
administrative and clerical staff, including
members of the staff that perform system
protection, operation and production functions,
including appropriate system dispatching costs.
1.1.3.1.2 The salaries and expenses of the Operating
Agent's supervisor of steam generation, if not
included within Section 1.1.3.1.1 of
-2-
this Exhibit F, and his supervisory, administrative,
engineering and clerical staff.
These overhead costs shall be applicable to the
total payroll supervised by said functional areas of
the Operating Agent, respectively. The Navajo Generating
Station's share of such costs shall be equal to the sum
of: (a) the Operating Agent's functional area overhead
costs as described in Section 1.1.3.1.1 of this
Exhibit F multiplied by a ratio, the numerator of which
is the total Navajo Generating Station payroll and the
denominator of which is the Operating Agent's total
payroll supervised by said functional area, and (b) the
Operating Agent's functional area overhead costs as
described in Section 1.1.3.1.2 of this Exhibit F
multiplied by a ratio, the numerator of which is the
total Navajo Generating Station payroll and the
denominator of which is the Operating
-3-
Agent's total payroll supervised by said functional
area.
The total of the Navajo Generating Station
overhead costs set forth herein shall be allocated to
all direct labor charges at said Navajo Generating
Station, which shall include operation and maintenance
labor and work order labor charges. All such overhead
charges shall be allocated to the appropriate FPC
Account(s).
1.1.4 Applicable labor loading charges for Operating Agent's
employees whose salaries and wages are charged to the
operation and maintenance expense accounts. Such
labor loading charges shall include but not be limited
to time-off allowances employee payroll taxes chargeable
to FPC Account 408 and employee benefits chargeable to
FPC Accounts 925 and 926.
1.1.4.1 Payroll tax expenses incurred by the Operating
Agent which are allocable to the Navajo
Generating Station pursuant to Section 1.1.4 of
this Exhibit F shall be
-4-
determined by multiplying the sum of the Operating
Agent's total labor charges included in the
expenses determined in accordance with Sections
1.1.1 and 1.1.2 of this Exhibit F by a decimal
fraction, hereinafter referred to as the Payroll
Tax Ratio. Such Payroll Tax Ratio shall be derived
annually in accordance with the procedure and
example shown on Attachment Nos. 1 and 1A to this
Exhibit F.
1.1.4.2 Employee pensions and benefits expenses incurred
by the Operating Agent which are allocable to
the Navajo Generating Station pursuant to Section
1.1.4 of this Exhibit F shall be determined by
multiplying the sum of the Operating Agent's total
labor charges included in the expenses determined
in accordance with Sections 1.1.1 and 1.1.2 of
this Exhibit F by a decimal fraction, hereinafter
-5-
referred to as the Benefits Ratio. Such Benefits
Ratio shall be derived annually in accordance with
the procedure and example shown on Attachment Nos.
2 and 2A to this Exhibit F.
1.1.4.3 That portion of employee Workmen's Compensation
Insurance expenses and the related administrative
expenses incurred by the Operating Agent which are
allocable to the Navajo Generating Station
pursuant to Section 1.1.4 of this Exhibit F shall
be determined by multiplying the sum of the
Operating Agent's total labor charges included in
the expenses determined in accordance with
Sections 1.1.1 and 1.1.2 of this Exhibit F by a
decimal fraction, hereinafter referred to as the
Compensation Insurance Ratio. Such Compensation
Insurance Ratio shall be derived annually in
accordance with the procedure and example
-6-
shown on Attachment Nos. 3 and 3A to this Exhibit
F.
1.1.5 Administrative and general expenses of the
Operating Agent allocable to operation and
maintenance of the Navajo Generating Station
pursuant to Exhibit F-1 hereto.
1.1.6 The training expenses of operation and maintenance
personnel for the Navajo Generating Station,
including labor loading charges in accordance
with Section 1.1.4 of this Exhibit F and
applicable administrative and general expenses as
computed in accordance with Exhibit F-1 hereto,
which are incurred prior to the date of firm
operation and not properly chargeable to the costs
of construction of the Navajo Generating Station
shall be accumulated by the Operating Agent and
shall be apportioned to the Participants in
accordance with their Generation Entitlement
Shares and billed to the Participants.
1.1.7 All expenses of procuring and maintaining policies
of Project Insurance.
1.1.8 All costs chargeable to FPC Account 501.
-7-
EXHIBIT F
ATTACHMENT NO. 1
PAYROLL TAX RATIO
APPLICABLE TO OPERATING & MAINTENANCE EXPENSES
OF THE NAVAJO GENERATING STATION
The Payroll Tax Ratio to be applied to the labor expense portion of
the Navajo Generating Station Operation & Maintenance Expenses shall be
determined annually on the basis of the Operating Agent's preceding year's
expenses as set forth herein unless otherwise agreed to by the Participants.
The Payroll Tax Ratio will be adjusted to actual at year-end and the adjusted
ratio used in preparation of a revised billing to Participants.
Payroll Tax Ratio = T/P
Where: T = The Operating Agent's payroll tax expenses
chargeable to F.P.C. account 408 as applicable
to the labor expenses included in its total
system operation, maintenance, construction,
and general ledger accounts.
P = The Operating Agent's labor expenses as paid to
employees and distributed to total system operation,
maintenance, construction, and general ledger accounts.
The example in Exhibit F, Attachment No. 1A, sets forth the method
to be employed by the Operating Agent to determine the Payroll Tax Ratio.
-2-
EXHIBIT F
ATTACHMENT 1A
EXAMPLE
DEVELOPMENT OF PAYROLL TAX RATIO
APPLICABLE TO OPERATING & MAINTENANCE EXPENSES OF THE
NAVAJO GENERATING STATION
N. P. Co. A.P.S. Co. S.R.P. L.A. DWP
------------ ------------ ------------- -------------
(1968 Costs) (1968 Costs) (1969 Budget) (68-69 Costs)
------------ ------------ ------------- -------------
(T) Total Payroll Taxes $ 183,746 $ 933,421 $ 580,000 $ 106,112*
============ ============ ============= =============
(P) Labor Base
Total labor charged
to operation, maintenance,
construction, and general
ledger accounts $ 4,797,468 $ 24,690,234 $ 17,148,862 $ 93,904,454
============ ============ ============= =============
$ 183,746 $ 933,421 $ 580,000 $ 106,112
------------ = 3.83% ------------ = 3.78% ------------- = 3.38% ------------- = 0.11%
Payroll Tax Ratio = $ 4,797,468 ==== $ 24,690,234 ==== $ 17,148,862 ==== $ 93,904,454 ====
* Yearly estimate on basis of payroll periods from 5/18/69 to 6/30/69.
EXHIBIT F
ATTACHMENT NO. 2
BENEFITS RATIO APPLICABLE TO
OPERATING & MAINTENANCE EXPENSES
OF THE NAVAJO GENERATING STATION
The Benefits Ratio to be applied to the labor expense portion of the
Navajo Generating Station Operations and Maintenance Expenses shall be
determined annually on the basis of the Operating Agent's preceding year's
experience as set forth herein unless otherwise agreed to by the Participants.
The Benefits Ratio will be adjusted to actual at year-end and the adjusted ratio
used in preparation of a revised billing to Participants.
Benefits Ratio = B/L
Where: B = That portion of the Operating Agent's total system employee
pensions and benefits chargeable to F.P.C. account 926, including
payroll taxes and Employee Compensation Insurance Expense on labor
charges to account 926.
L = The Operating Agent's labor expenses as paid to employees and
distributed to its total system operation, maintenance,
construction, and general ledger accounts less labor charges to
F.P.C. account 926.
The example in Exhibit F, Attachment No. 2A, sets forth the method to be
employed by the Operating Agent to determine the Benefits Ratio.
-2-
EXHIBIT F
Attachment 2A
EXAMPLE
DEVELOPMENT OF BENEFITS RATIO
APPLICABLE TO OPERATING & MAINTENANCE EXPENSES OF THE
NAVAJO GENERATING STATION
Nevada Power Company Ariz. Public Service Co. Salt River Project L. A. DWP
-------------------- ------------------------ ---------------------- ------------------------
(based on 1968 Costs) (Based on 1968 Costs) (Based on 1969 budget) (Based on 68-69 Costs)
Labor Total Labor Total Labor Total Labor Total
--------- ----------- --------- ------------ --------- ------------ ---------- ------------
Pensions & Benefits
Employee
Pensions
& Benefits
Charged to
Account 926 $ 15,331 $ 279,249 $ 216,978 $ 2,905,654 $ 164,315 $ 2,124,326 $ 199,426 $ 12,802,019
Add: Pensions &
Benefits
Capitalized 86,488 -- -- --
----------- ------------ ------------ ------------
Subtotal $ 365,737 $ 2,905,654 $ 2,124,326 $ 12,802,019
Add:
Payroll Taxes
(Exh. F,
Attach, 1A) @ 3.83% @ 3.78% @ 3.38% @ 0.11%
of labor = $ 587 of labor = $ 8,202 of labor = $ 5,554 of labor = $ 219
Compensation Ins.
(Exh. F,
Attach, 3A) @1.11% @ 1.14% @ 2.69% @ 0.94%
of labor = $ 170 of labor = $ 2,474 of labor = $ 4,421 of labor = $ 1,875
----------- ------------ ------------ ------------
Total Pensions &
Benefits Expense $ 366,494 $ 2,916,330 $ 2,134,301 $ 12,804,113
=========== ============ ============ ============
Labor Base
Total labor charged
to Operation, Main-
tenance, Construc-
tion, and General
Ledger Accounts,
exclusive of labor
charged to Account 926. $ 4,782,137 $ 24,473,256 $ 16,984,547 $ 93,705,028
=========== ============ ============ ============
Benefits Ratio = $ 366,494 $ 2,916,330 $ 2,134,301 $ 12,804,113
----------- = 7.66% ------------ = 11.92% ------------ = 12.56% ------------ = 13.66%
$ 4,782,137 ===== $ 24,473,256 ===== $ 16,984,547 ===== $ 93,703,028 =====
EXHIBIT F
ATTACHMENT NO. 3
COMPENSATION INSURANCE RATIO
FOR THE
NAVAJO GENERATING STATION
The Compensation Insurance Ratio to be applied to the labor expenses
included in the Operating Agent's Administrative and General expense accounts
shall be determined annually on the basis of the Operating Agent's preceding
year's expenses as set forth herein unless otherwise agreed to by the
Participants. The Compensation Insurance Ratio will be adjusted to actual at
year-end and the adjusted ratio used in preparation of a revised billing to
Participants.
Compensation Insurance Ratio = l/P
Where: l = The Operating Agent's total system Compensation Insurance
premiums and accruals for self-insurance charges to F.P.C. Account
925, less amounts billed to others under participation agreements.
P = The Operating Agent's labor expenses included in its total
system operation, maintenance, construction, and general ledger
accounts, less amounts for labor billed to others under joint
participation project agreements.
The example in Exhibit F, Attachment No. 3A, sets forth the method to be
employed by the Operating Agent to determine the Compensation Insurance Ratio.
-2-
EXHIBIT F
ATTACHMENT 3A
EXAMPLE
DEVELOPMENT OF COMPENSATION INSURANCE RATIO
APPLICABLE TO OPERATING & MAINTENANCE EXPENSES
OF THE
NAVAJO GENERATING STATION
N.P. Co. A.P.S. Co. S.R.P. L.A. DWP
----------- ----------- ------------ ------------
(1968 Costs) (1968 Costs) (1969 Budget) (68-69 Costs)
----------- ----------- ------------ ------------
(T) Total Compensation Insurance Cost
Total Compensation Insurance $ 39,114 $ 282,548 $ 496,494 $ 879,659
Cost in Account 925 ========== =========== =========== ============
(P) Labor Base
Total labor charged to operation,
maintenance, and general ledger
accounts $3,515,135 $15,541,752 $11,250,137 $50,322,473
Total labor charged to *(Not Applicable) $ 9,148,482 $ 5,898,725 $43,581,981
construction accounts ---------------- ----------- ----------- -----------
Total Labor Expense $3,515,135 $24,690,234 $17,148,862 $93,904,454
========== =========== =========== ===========
Compensation Insurance Ratio = $ 39,114 $ 282,548 $ 496,494 $ 879,659
---------- = 1.11% ----------- = 1.14% ----------- = 2 .90% ----------- = 0.94%
$3,515,135 ==== $24,690,234 ==== $17,148,862 ===== $93,904,454 ====
* Nevada Power Company charges Compensation Insurance costs to plant labor
from liability account 232.2.
EXHIBIT F-1
ADMINISTRATIVE AND GENERAL EXPENSES APPLICABLE
TO OPERATION AND MAINTENANCE OF
THE NAVAJO GENERATING STATION
1.1 The allowance for the Operating Agent's administrative and general
expenses to cover the costs of services rendered by it in the performance of
operation and maintenance of the Navajo Generating Station shall be derived in
accordance with the procedure and examples shown on Attachment Nos. 1, 1A, 2
and 2A to this Exhibit F-1.
EXHIBIT F-1
ATTACHMENT NO. 1
DETERMINATION OF RATIO OF O & M LABOR AND
CONSTRUCTION LABOR TO TOTAL LABOR FOR THE
NAVAJO GENERATING STATION
I. Determination of the ratio of operating and maintenance labor
to total labor shall be as follows:
O & M Ratio = O/L
where
O = total labor charged to operation and
maintenance accounts less labor charged to
A & G accounts 920 through 932 inclusive
L = total labor charged to operating and
maintenance, construction, and general ledger
accounts, less labor charged to A & G accounts
920 through 932 inclusive
II. Determination of the ratio of construction labor to total
labor shall be as follows:
Construction Ratio = C/L
where
C = total labor in construction accounts
L = total labor charged to operation and
maintenance, construction, and general ledger
accounts, less labor charged to A & G accounts
920 through 932 inclusive
EXHIBIT F-1
ATTACHMENT 1A
EXAMPLE
DETERMINATION OF RATIO OF O & M LABOR AND CONSTRUCTION LABOR TO TOTAL LABOR
FOR THE
NAVAJO GENERATING STATION
N. P. Co. A.P.S. Co. S.R.P. L. A. DWP
----------- ----------- ------------ ------------
(1968 Costs) (1968 Costs) (1969 Budget) (68-69 Costs)
----------- ----------- ------------ ------------
(1) Total Labor in
Operation and Maintenance Accounts $ 3,290,399 $ 9,663,668 $ 11,245,752 $ 50,300,847
Less Labor charged to A &
G Accounts 920, thru 932
inclusive 485,437 1,405,923 1,958,894 5,863,153
----------- ------------ ------------ ------------
Net Labor in O & M Accounts $ 2,804,962 $ 8,257,745 $ 9,286,858 $ 44,437,694
Total Labor charged to
General Ledger Accounts 224,736 - 4,385 21,626
Total Labor in
Construction Accounts 1,282,333 4,879,188 5,898,725 43,581,981
----------- ------------ ------------ ------------
Total Labor Base $ 4,312,031 $ 13,136,933 $ 15,189,968 $ 88,041,301
=========== ============ ============ ============
Ratio of Net O & M Labor to Total $ 2,804,962 $ 8,257,745 $ 9,286,858 $ 44,437,694
----------- = 65.05% ------------ = 62.86% ------------ = 61.14% ------------ = 50.47%
Labor = $ 4,312,031 ===== $ 13,136,933 ===== $ 15,189,968 ===== $ 88,041,301 =====
(11) Ratio of Construction Labor to Total $ 1,282,333 $ 4,879,188 $ 5,898,725 $ 43,581,981
----------- = 29.74% ------------ = 37.14% ------------ = 38.83% ------------ = 49.50%
Labor = $ 4,312,031 ===== $ 13,136,933 ===== $ 15,189,968 ===== $ 88,041,301 =====
EXHIBIT F-1
ATTACHMENT NO. 2
ADMINISTRATIVE AND GENERAL EXPENSE
APPLICABLE TO OPERATION & MAINTENANCE
OF THE NAVAJO GENERATING STATION
That portion of the Operating Agent's administrative and general expenses
which are allocable to operation and maintenance of the Navajo Generating
Station shall be determined by multiplying the total operating and maintenance
labor of the Navajo Generating Station by a decimal fraction hereinafter
referred to as the "Administrative and General Expense Ratio." Such
Administrative and General Ratio shall be derived annually based on the
preceding year's expenses, as set forth herein unless otherwise agreed to by the
participants. The Administrative and General Ratio will be adjusted to actual at
year-end, and the adjusted ratio used in preparation of a revised billing to
participants.
The Administrative and General expenses charged to F.P.C. accounts 920 and
921 shall be multiplied by a percentage representing the ratio of operation and
maintenance labor to total labor. To the result shall be added the total in
F.P.C. accounts 923 and 932 plus additives to labor in F.P.C. accounts 920, 921,
and 932 as illustrated in Attachment No. 2A hereof. The resulting Administrative
and General expenses applicable to Operating and Maintenance
expense shall be divided by the total Operating and Maintenance expense labor
subject to Administrative and General expense allocation.
Administrative and General Expense Ratio = A/B
Where: A = Portion of Administrative and General Expenses charged to F.P.C.
accounts 920 and 921, plus total in F.P.C. accounts 923 and 932,
plus additives to labor in F.P.C. account 932 and to a portion of
the labor in F.P.C. accounts 920 and 921, as illustrated in
Attachment No. 2A hereof.
B = Total operating and maintenance labor, less labor, less labor in
Administrative and General expense accounts 920 thru 932 inclusive.
-2-
EXHIBIT F-1
ATTACHMENT 2A
EXAMPLE
DEVELOPMENT OF ADMINISTRATIVE & GENERAL RATIO
APPLICABLE TO OPERATION & MAINTENANCE EXPENSE
OF THE
NAVAJO GENERATING STATION
Nevada Power Company Ariz. Public Service Co. Salt River Project
--------------------- ------------------------ ---------------------
(Based on 1968 Costs) (Based on 1968 Costs) (Based on 1969 Costs)
Labor Total Labor Total Labor Total
------- --------- ------- -------- ------- -------
Administrative & General
Expenses
Account 920 A & G Salaries $ 422,728 $ 422,728 $1,363,877 $1,428,643 $1,647,490 $1,647,490
Account 921 A & G
Office Supplies &
Expense 109,074 482,025 82,596 687,008
----------- ---------- ---------- ---------- ---------- ----------
Total Accounts 920
and 921 $ 422,728 $ 531,802 $1,363,877 $1,910,668 $1,730,086 $2,334,498
=========== ========== ========== ========== ========== ==========
Percent Applicable to
Operation and Maintenance
(See Exh. F-1, Attach. 1A) 65.05% $ 274,985 $ 345,937 62.86% $ 857,333 $1,201,046 61.14% $1,057,775 $1,427,312
Account 923 Outside
Services 31,247 225,952 93,356
932 General Maintenance 28,161 65,978 264,235 456,799 64,493 94,263
----------- ---------- ---------- ---------- ---------- ----------
Subtotal $ 303,146 $ 443,162 $1,121,568 $1,883,797 $1,122,268 $1,614,931
Payroll Taxes as a
percentage of labor
(Exh. F, Attach. 1A) 3.83% $ 11,610 3.78% $ 42,395 3.38% $ 37,933
Compensation Ins. as a
percentage of labor (Exh.
F, Attach. 3A) 1.11% 3,365 1.14% 12,786 2.69% 30,189
Pensions & Benefits as a
percentage of labor
(Exh. F, Attach. 2A) 7.66% 23,221 11.92% 133,691 12.56% 140,957
---------- ---------- ----------
Total A & G
Expense allocable
to Operation
& Maintenance Accounts $ 481,358 $2,072,669 $1,824,010
========== ========== ==========
3) Net Labor Charged to
Operation & Maintenance
Accounts
(Excluding labor in A & G
Accounts 920 thru 932
inclusive) $2,804,962 $8,257,745 $9,286,858
========== ========== ==========
[ILLEGIBLE] & G Ratio = $ 481,358 $2,072,669 $1,824,010
----------- = 17.16% ---------- = 25.10% ---------- = 19.64%
$ 2,804,962 ====== $8,257,745 ===== $9,286,858 =====
L.A. DWP
------------------------
(Based on 60-69 Costs)
Labor Total
----------- -----------
Administrative & General
Expenses
Account 920 A & G Salaries $ 3,412,254 $ 3,412,254
Account 921 A & G
Office Supplies &
Expense 2,714,641
----------- -----------
Total Accounts 920
and 921 $ 3,412,254 $ 6,126,895
=========== ===========
Percent Applicable to
Operation and Maintenance (See
Exh. F-1, Attach. 1A) 50.47% $ 1,722,165 $ 3,092,244
Account 923 Outside
Services 404,288
932 General Maintenance 77,719 471,040
----------- -----------
Subtotal $ 1,799,884 $ 3,967,572
Payroll Taxes as a
percentage of labor
(Exh. F, Attach. 1A) 0.11% $ 1,980
Compensation Ins. as a
percentage of labor (Exh.
F, Attach. 3A) 0.94% 16,919
Pensions & Benefits as a
percentage of labor (Exh, F.
Attach. 2A) 13.66% 245,864
-----------
Total A & G
Expense allocable
to Operation
& Maintenance Accounts $ 4,232,335
===========
3) Net Labor Charged to
Operation & maintenance
Accounts
(Excluding labor in A & G $44,437,694
===========
Accounts 920 thru 932
inclusive)
[ILLEGIBLE] & G Ratio = $ 4,232,335
----------- = 9.52%
$44,437,694 ====
EXHIBIT G
OPERATION AND MAINTENANCE COSTS
OF THE TRANSMISSION SYSTEM
1.1 Operation and maintenance costs shall include the following expenses
to the extent that they are chargeable to the Transmission System in accordance
with sound accounting practice:
1.1.1 The Transmission System operation costs chargeable to FPC
Accounts 560, 561, 562, 563, 566 and 567.
1.1.2 The Transmission System maintenance costs chargeable to FPC
Accounts 568, 569, 570, 571 and 573.
1.1.3 The general plant maintenance costs chargeable to FPC Account
932 for maintenance of equipment, the book cost of which is
includable in FPC Account 397, Communication Equipment, and
FPC Account 398, Miscellaneous Equipment.
1.1.4 Overhead expenses included in Sections 1.1.1, 1.1.2 and 1.1.3
of this Exhibit G incurred by the Operating Agent which are
allocable to the operation and maintenance of the Transmission
System. Such overhead
expenses shall be determined in accordance with the following
allocation procedure:
1.1.4.1 Overhead expenses of the Operating Agent applicable to
Transmission System operation and maintenance expenses
will be generated at various functional areas. The
overhead costs of each functional area shall be
applicable to the total payroll supervised by said
functional areas of the Operating Agent. The
Transmission System's share of such costs shall be
equal to the sum of each applicable Operating Agent's
functional area overhead costs multiplied by a ratio,
the numerator of which is the total Transmission
System payroll and the denominator of which is the
Operating Agent's total payroll supervised by said
functional area.
The total of the Transmission System overhead costs set
forth herein shall be allocated to all direct labor charges at
said Transmission System, which shall
-2-
include operation and maintenance labor and work order labor
charges. All such overhead charges shall be allocated to the
appropriate FPC Account(s).
1.1.5 Applicable labor loading charges for Operating Agent's
employees whose salaries and wages are charged to the
operation and maintenance expense accounts. Such labor
loading charges shall include but not be limited to
time-off allowances, employee payroll taxes chargeable
to FPC Account 408 and employee benefits chargeable to
FPC Accounts 925 and 926 as provided in Section 1.1.4 of
Exhibit F hereto.
1.1.6 Administrative and general expenses of the Operating
Agent allocable to operation and maintenance of the
Transmission System pursuant to Exhibit G-1 hereto.
-3-
EXHIBIT G-1
ADMINISTRATIVE AND GENERAL EXPENSES APPLICABLE
TO OPERATION AND MAINTENANCE OF THE
TRANSMISSION SYSTEM
1.1 The allowance for the Operating Agent's administrative and general
expenses to cover the costs of services rendered by it in the performance of
operation and maintenance of the Transmission System shall be derived in
accordance with the procedure and examples shown on Attachment Nos. 1, 1A, 2 and
2A to Exhibit F-1 hereto.
SALT RIVER PROJECT
RESOLUTION
WHEREAS, the Board of Directors of the Salt River Project Agricultural
Improvement and Power District (herein called "Salt River Project") has
determined that it is in Salt River Project's best interest to enter into
various contracts relating to the construction, operation and maintenance of the
proposed Navajo Project consisting of three 750 MW (nameplate rating) coal-fired
steam electric generating units (herein called "Navajo Generating Station"),
located on the Navajo Indian Reservation near Page, Arizona, and the related 500
KV transmission system (herein called "Navajo transmission system"), with
ownership interests in the Navajo Generating Station to be as follows:
Arizona Public Service Co. (Arizona) 14.0%
City of Los Angeles, Department of
Water and Power (Los Angeles) 21.2%
Nevada Power Company (Nevada) 11.3%
Salt River Project Agricultural
Improvement and Power District
(Salt River Project) 46.0%
Tucson Gas and Electric Company
(Tucson) 7.5%
all of said entities referred to herein as the "Co-Owners," and
WHEREAS, Salt River Project shall own 21.7% of the Navajo Generating Station for
its own use and benefit and shall own and hold the remaining 24.3% of its
ownership interest in the Navajo Generating Station for the use and benefit of
the United States, Department of Interior, Bureau of Reclamation for the United
States' use to provide power and energy for Central Arizona Project pumping (the
"United States" and the above listed companies being herein collectively called
"Participants"), and
WHEREAS, the following described Agreements have been reviewed on this day with
this Board and this Board has determined that it is in the best interest of Salt
River Project to enter into said Agreements to effectuate the construction,
operation and maintenance of the Navajo Project;
NOW, THEREFORE, BE IT HEREBY RESOLVED, That the Board of Directors of Salt River
Project has and does hereby approve the Navajo Project Participation Agreement
among the Participants, and has and does hereby empower and direct that the
President or Vice President, and the
SALT RIVER PROJECT
Secretary or Assistant Secretary, make, execute and deliver said Participation
Agreement for, and on behalf of, the Salt River Project with such minor changes
or omissions therein as management may make in the premises, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve the Indenture of Lease for Navajo Units 1, 2 and 3,
and has and does hereby empower and direct that the President or Vice President,
and the Secretary or Assistant Secretary, make, execute, acknowledge and deliver
said Indenture of Lease for Navajo Units 1, 2 and 3 for and on behalf of the
Salt River Project with such minor changes or omissions therein as management
may make in the premises, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve that certain Federal Rights of Way, granted in
conformity with the Act of February 15, 1901, between the Secretary of Interior
and the Co-Owners as Grantees, and does hereby authorize, empower and direct
that the President or Vice President, and the Secretary or Assistant Secretary,
make, execute, acknowledge and deliver said Federal Rights of Way for, and on
behalf of, Salt River Project with such minor changes or omissions therein as
management may make in the premises, and this Board of Directors also
authorizes, empowers and directs its officers and management to make and file an
Application for Grant of Rights of Way under the Act of February 15, 1901, 31
Stat. 790, 43 U.S.C., Section 959, underlying any or all Project land rights,
and to take and perform all necessary acts in making and filing such
Application, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve that certain Federal Rights of Way and Easements,
granted in conformity of February 5, 1948, by and between the Secretary of
Interior and Salt River Project and the other Co-Owners as Grantees and does
hereby authorize, empower and direct that the President or Vice President, and
the Secretary or Assistant Secretary, make, execute, acknowledge and deliver
said Federal Rights of Way and Easements for, and on behalf of, the Salt River
Project with such minor changes and omissions therein as management may make in
the premises, and does hereby authorize, empower and direct its officers and
management to make and file an Application for the Grant of Rights of Way and
Easements under the Act of February 5, 1948, 62 Stat. 17, 25 U.S.C. Section 323,
underlying any or all Project land rights, and to take and perform all necessary
acts in making and filing such Application, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve the Memorandum of Agreement
SALT RIVER PROJECT
providing for execution of Navajo Station Coal Supply Agreement among it, the
other Co-Owners and Peabody Coal Company together with the Letter Agreement
relating thereto which sets forth additional understandings and agreements
concerning the Navajo Station Coal Supply Agreement, and has and does hereby
authorize, empower and direct that the President or Vice President, and the
Secretary or Assistant Secretary, make, execute, acknowledge and deliver said
Memorandum of Agreement and said Letter of Understanding for and on behalf of
the Salt River Project with such minor changes and omissions therein as
management may make in the premises, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve that certain Power Coordination Contract between the
Co-Owners and the United States and has and does hereby authorize, empower and
direct that the President or Vice President, and the Secretary or Assistant
Secretary, make, execute and deliver said Power Coordination Contract for and on
behalf of the Salt River Project with such minor changes and omissions therein
as management may make in the premises, and
BE IT HEREBY FURTHER RESOLVED that, the Board of Directors of Salt River Project
has and does hereby approve the Principles of Interconnected Operation for the
Navajo Project between the Co-Owners, the United States and the Southern
California Edison Company (whether or not said Southern California Edison
Company is party thereto), and does hereby authorize, empower and direct that
the President or Vice President, and the Secretary or Assistant Secretary make,
execute and deliver said Principles of Interconnected Operation for and on
behalf of the Salt River Project with such minor changes and omissions therein
as management may make in the premises, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve that certain Contract for Interim Use of United
States Entitlement in the Navajo Project (herein called "Layoff Contract")
between it and the United States and does hereby authorize, empower and direct
that the President or Vice President, and the Secretary or Assistant Secretary,
make, execute and deliver said Layoff Contract for and on behalf of the Salt
River Project with such minor changes and omissions therein as management may
make in the premises, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve that certain Memorandum Transmission Agreement
between it, the other Participants, and the Southern California Edison Company,
and has and does hereby authorize, empower and direct that the President or
Vice President, and the Secretary or Assistant Secretary, make, execute and
deliver said
SALT RIVER PROJECT
Memorandum Transmission Agreement for and on behalf of the Salt River Project
with such minor changes and omissions therein as management may make in the
premises, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve that certain Agreement for Delivery of the United
States Power and Energy for the McCullough Substation to the Mead Substation
between it, the United States and the other Eldorado System Co-Owners (whether
or not such entities become parties thereto), and has and does hereby authorize,
empower and direct that the President or Vice President, and the Secretary or
Assistant Secretary, make, execute and deliver said Agreement for and on behalf
of the Salt River Project with such minor changes and omissions therein as
management may make in the premises, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve that certain Spinning Reserve Pooling Agreement
between it, and the other Participants, excepting the City of Los Angeles,
Department of Water and Power (whether or not all such other Participants become
parties thereto), and has and does hereby authorize, empower and direct that the
President or Vice President, and the Secretary or Assistant Secretary, make,
execute and deliver said Spinning Reserve Fueling Agreement for and on behalf of
the Salt River Project with such minor changes and omissions therein as
management may make in the premises.
CERTIFICATE
I, F. E. Smith, the duly appointed, qualified and acting Secretary of the Salt
River Project Agricultural Improvement and Power District, HEREBY CERTIFY that
the foregoing is a true and complete copy of a resolution adopted by the Board
of Directors of said District at a special meeting thereof duly held on the 25th
day of August 1969, at which meeting a quorum was present and voted.
WITNESS my hand and seal of Salt River Project Agricultural Improvement and
Power District this 19th day of November 1969.
/s/ F. E. Smith
-------------------------------
F. E. Smith, Secretary
CERTIFICATE
I, Samuel P. Cowley, certify that I am the Secretary of the Nevada Power
Company, a corporation named herein; that Harry Allen who signed the above
contract on behalf of said corporation was then its President; that said
contract was duly signed for and in behalf of said corporation by authority of
its governing body and is within the scope of its corporate powers.
/s/ Samuel P. Cowley
-------------------------------
Samuel P. Cowley, Secretary
TUCSON GAS & ELECTRIC COMPANY
Certified Copy of Resolutions
Adopted by the Board of Directors
RESOLVED, that the proper officers of the Company be, and they
hereby are authorized to enter into a Participation Agreement between the
United States of America, Arizona Public Service Company, Department of
Water and Power of the City of Los Angeles, Nevada Power Company, Salt
River Project Agricultural Improvement and Power District and Tucson Gas &
Electric Company for the ownership of the Navajo Project wherein Tucson
Gas & Electric Company shall own an undivided 7-1/2% interest in the
Navajo Generating Station and varying percentage interests in the
transmission system. The Agreement shall be substantially in the form of
the draft filed with the Secretary of the Company marked "Filed September
23, 1969 with the Secretary of Tucson Gas & Electric Company", and be it
FURTHER RESOLVED, that the proper officers of the Company be, and
they hereby are further authorized to execute and enter into on behalf of
the Company the necessary Project Agreements contemplated by said
Participation Agreement, and such other documents reasonably required to
implement said Participation Agreement and Project Agreements.
**************
I, P. L. ABBOTT, Secretary of TUCSON GAS & ELECTRIC COMPANY
(hereinafter called the "Company"), DO HEREBY CERTIFY that the above and
foregoing is a true and complete copy of resolutions duly adopted by the
Board of Directors at the Regular Monthly Meeting held on the 23rd day of
September, 1969, at which meeting a quorum was present and acted thereon;
and
I DO FURTHER CERTIFY that said resolution is in full force and
effect on the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal
of the Company this 29th day of September, 1969.
/s/ Authorized Signatory
------------------------
CERTIFICATE
I, GERALD J. GRIFFIN, certify that I am an Assistant Secretary of
ARIZONA PUBLIC SERVICE COMPANY, the corporation named herein; that M. C.
TITUS, who signed the above contract on behalf of said Corporation was
then its Executive Vice President; that said contract was duly signed for
and in behalf of said Corporation by authority of its governing body and
is within the scope of its corporate powers.
/s/ Gerald J. Griffin
---------------------------
Assistant Secretary
CERTIFIED COPY OF RESOLUTION
I, GERALD J. GRIFFIN, Assistant Secretary of ARIZONA PUBLIC SERVICE
COMPANY, an Arizona corporation, HEREBY CERTIFY that, at a meeting of the Board
of Directors of said Company, duly convened and held on August 21, 1969, at
which a quorum was present and acting throughout, the following resolution was
adopted and is now in full force and effect:
RESOLVED, that the Board of Directors approves and ratifies the
action of the officers in negotiating and carrying forward the proposal
for the participation by the Company, along with others, in the so-called
Navajo Project, involving the construction near Page, Arizona, of three
generating units (presently estimated at 750 MW nameplate), with ownership
being held as tenants in common in the following respective undivided
interests:
Arizona Public Service Company 14.0%
Tucson Gas & Electric Company 7.5%
City of Los Angeles 21.2%
Nevada Power Company 11.3%
Salt River Project Agricultural
Improvement and Power District (For
Itself) 21.7%
(As Agent for U.S.B.R.) 24.3%
the said project to include certain transmission facilities to be located
in Arizona, with APS to be the Project Manager and Operating Agent for
said facilities, which are to be owned by APS and others as joint tenants
in various percentages related to projected use, these facilities
including a 500 kv line from the switchyard of the Navajo Plant near Page
to the Moenkopi Switching Station and from there to the Westwing
switchyard near Phoenix, and with another 500 kv line extending directly
from the Navajo switchyard to Westwing, together with various related
interconnections and switching facilities; and
FURTHER RESOLVED, that in connection with the Navajo Project, the
appropriate officers of the Company be, and they are hereby authorized to
negotiate and to execute and effectuate the necessary instruments and
agreements, including among others, the following:
(1) Participation Agreement
(2) Coordination Agreement
(3) Interconnection Agreement
(4) Plant Site Lease
(5) Fuel Supply and Transportation
Agreement
RESOLUTION NO. 416
BE IT RESOLVED by the Board of Water and Power Commissioners of The City
of Los Angeles that the President and the Secretary of this Board be and they
are hereby authorized to execute, on behalf of this Board, certain agreements
relating to the construction, ownership, operation and maintenance of facilities
for the generation of electrical power and energy and related facilities,
including fuel supply, copies of which agreements are on file with the Secretary
of this Board and which are identified as follows, that is:
Agreement Title DWP Number
- --------------- ----------
Navajo Project Participation Agreement 10334
Memorandum of Agreement Providing for Execution of Navajo 10335
Station Coal Supply Agreement
Letter Agreement 10336
Application for Federal Rights-of-Way and Easements 10337
Application and Grant of Rights-of-Way and Easements (25 U.S.C. 10338
Section 323)
United States, Department of the Interior, Power Coordination 10339
Contract
Interim Arrangement for Interconnected Operations 10340
Contract with Department of Water and Power of The City of 10341
Los Angeles for Interim Sale of United States Entitlement of
Navajo Project
Memorandum Transmission Agreement 10342
Victorville-Lugo Interconnection Agreement 10343
(6) Co-Tenancy Agreement
(7) Moenkopi Agreement
(8) Amendment to Navajo Wholesale Power Agreement
(9) Plant Construction Agreement
(10) Plant Operating Agreement
(11) Transmission Construction Agreement
(12) Transmission Operating Agreement
(13) Applications for Various Rights-of-Way and Easements
(14) Layoff Agreement
and
FURTHER RESOLVED, that the appropriate officers of the Company
are authorized to take such actions and to execute such further
agreements, instruments, applications, certificates, contracts or
other documents as may be necessary or appropriate in connection
with the foregoing to complete and effectuate the Company's proposed
participation in the Navajo Project.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of said
corporation this 3rd day of October, 1969.
/s/ Gerald J. Griffin
---------------------------
Assistant Secretary
-2-
Agreement Title (Continued) DWP Number
- -------------------------- ----------
Indenture of Lease 10344
Letter Agreement 10350
I HEREBY CERTIFY that the foregoingis a full, true and correct copy of a
resolution adopted by the Board of Water and Power Commissioners of The City of
Los Angeles at its meeting held NOV 20 1969
/s/ Mary J. Born
------------------------
Secretary
ORDINANCE NO. 139,629
AN ORDINANCE APPROVING AGREEMENTS RELATING TO PARTICIPATION BY THE
DEPARTMENT OF WATER AND POWER IN THE NAVAJO PROJECT
THE PEOPLE OF THE CITY OF LOS ANGELES DO ORDAIN AS FOLLOWS:
Section 1. That the Board of Water and Power Commissioners of The City of
Los Angeles be and it is hereby authorized, in its discretion, to execute and
enter into the following agreements, substantially in the form of those which
are on file with the City Clerk and identified below, relating to the
transmission and use of electrical Power and energy associated with the Navajo
Project:
AGREEMENT TITLE DWP NUMBER
- ---------------------------------------------------------------- ----------
Interim Arrangement for Interconnected 10340
Operations
Contrast with Department of Water and Power of The City
of Los Angeles for Interim Sale of United States, Entitle-
ment of Navajo Project 10341
Memorandum Transmission Agreement 10342
Victorville-Lugo Interconnection Agreement 10343
Letter Agreement 10350
Sec. 2. The City Clerk shall certify to the passage of this ordinance and
cause the same to be published in some daily newspaper printed and published in
the City of Los Angeles.
I hereby certify that the foregoing ordinance was introduced at the
meeting of the Council of the City of Los Angeles of November 10, 1969 and was
passed at its meeting of November 17, 1969.
REX E. LAYTON. City Clerk,
By M. B. Wilson, Deputy.
Approved November 18, 1969.
File No. 147173 Sup #1 SAM YORTY, Mayor.
(E54726) Nov 19 It
CERTIFICATION
STATE OF CALIFORNIA,
} ss.
COUNTY OF LOS ANGELES,
I, REX E. LAYTON, City Clerk of the City of Los Angeles and ex-officio
Clerk of the City Council of the City of Los Angeles, do hereby certify and
attest the foregoing to be a full, true and correct copy of the original
Ordinance No. 139,629 of the City of Los Angeles,
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
on file in my office, and that I have carefully compared the same with the
original.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the Seal of the City of Los Angeles, this 19th day
of November, 1969
/s/ Rex E. Layton
----------------------------------------
City Clerk of the City of Los Angeles
By /s/ Authorized Signatory
----------------------------------------
Form Clerk 22 -- 5M -- 11-68 (R) Deputy
ORDINANCE NO. 139,630
AN ORDINANCE APPROVING AGREEMENTS RELATING TO PARTICIPATION BY THE
DEPARTMENT OF WATER AND POWER IN THE NAVAJO PROJECT
THE PEOPLE OF THE CITY OF LOS ANGELES DO ORDAIN AS FOLLOWS:
Section 1. That the Board of Water and Power Commissioners of The City of
Los Angeles be and it is hereby authorized in its discription, to execute and
enter into the following agreements, substantially in the form of those which
are on file with the City Clerk and identified below, relating to the
construction, ownership, operation and maintenance of facilities for generation
of electrical power and energy and related facilities, including fuel supply:
AGREEMENT TITLE DWP NUMBER
- ---------------------------------------------------------------- ----------
Navajo Project Participation Agreement 10384
Memorandum of Agreement Providing for Execution of
Navajo Station Coal Supply Agreement 10385
Letter Agreement 10386
Application for Federal Rights-of-Way and Easements 10387
Grant of Federal Rights-of-Way and Eassements 10388
United States Department of the Interlor, Power Coor-
dination Contract 10339
Indenture of Lease 10344
Sec. 2. The City Clerk shall certify to the passage of this ordinance and
cause the same to be published in some daily newspaper printed and published in
the City of LOS Angeles.
I hereby certify that the foregoing ordinance was introduced at the
meeting of the Council of the City of Los Angeles, of November , 10, 1965 and
was passed at its meeting of November 17, 1968.
REX E. LAYTEN City Clerk,
By M. B. Wilson, Deputy.
Approved November 18, 1969.
File No. 147178 SAM YORTY, Mayor.
(E54727) Nov 19 It
CERTIFICATION
STATE OF CALIFORNIA,
} ss.
COUNTY OF LOS ANGELES,
I, REX E. LAYTON, City Clerk of the City of Los Angeles and ex-officio
Clerk of the City Council of the City of Los Angeles, do hereby certify and
attest the foregoing to be a full, true and correct copy of the original
Ordiance No. 139,630 of the City of Los Angeles,
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
on file in my office, and that I have carefully compared the same with the
original.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the Seal of the City of Los Angeles, this 19th day
of November, 1969
/s/ REX E. LAYTON
--------------------------------------
City Clerk of the City of Los Angeles
By /s/ Authorized Signatory
------------------------------------
Form Clerk 22 -- 5M -- 11-68 (R) Deputy
ORIGINAL
Southern California Edison Company
P. O. BOX 351
LOS ANGELES, CALIFORNIA 90053
October 3, 1969
ARIZONA PUBLIC SERVICE COMPANY
DEPARTMENT OF WATER AND POWER OF THE
CITY OF LOS ANGELES, BY THE BOARD
OF WATER AND POWER COMMISSIONERS
NEVADA POWER COMPANY
SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT
TUCSON GAS & ELECTRIC COMPANY
Gentlemen:
This letter will confirm the agreement reached in. the course of
negotiations of the Memorandum Transmission Agreement between the Participants
in the Navajo Project and Southern California Edison Company, concerning the
liability provisions to be agreed upon by the non-Federal parties to such
Memorandum Transmission Agreement. These provisions are to be in effect among
such non-Federal parties concerning the disposition of certain liabilities
arising out of the operations of their respective electric systems. It is agreed
that the following liability provisions will apply to the Memorandum
Transmission Agreement and that the reference to "Party" and "Parties" therein
shall mean a party or the parties to the Memorandum Transmission Agreement other
than The United States of America.
6. LIABILITY
6.1 Except for any loss, damage, claim, cost, charge or expense
resulting from Willful Action, no Party (First Party), its
directors, officers, or employees, shall be liable to any other
Party (Second Party) for any loss, damage, claim, cost, charge or
expense of any kind or nature incurred by any Second Party
(including direct, indirect,
- 2 -
or consequential loss, damage, claim, cost, charge or expense; and
whether or not resulting from the negligence of any Party, its
directors, officers, employees, or any other person or entity whose
negligence would be imputed to such Party) from (i) engineering,
repair, supervision, inspection, testing, protection, operation,
maintenance, replacement, reconstruction, use or ownership of First
Party's electric system,or (ii) the performance or non-performance
of the obligations of any Party under this Memorandum Transmission
Agreement. Except for any loss, damage, claim, cost, charge or
expense resulting from Willful Action, each Second Party releases
each other First Party, its directors, officers, and employees, from
any such liability.
6.2 Except for liability resulting from Willful Action, any Party whose
electric customer shall make a claim or bring an action for any
death, injury, loss or damage arising out of electric service to
such customer, shall indemnify and hold harmless all other Parties,
their directors, officers, and employees, from and against any
liability for such death, injury, loss or damage. The term "electric
customer" shall mean an electric consumer to whom no power is
delivered for resale.
6.3 Each Party shall be responsible for the consequences of
- 3 -
its Willful Action, and shall indemnify and save harmless the other
Parties, their directors, officers, and employees, from the
consequences thereof.
6.4 The term "Willful Action" as used in this Section 6 is defined as
follows:
6.4.1 Action taken or not taken by a Party at the direction of its
directors, officers, or employees, having management or
administrative responsibility affecting its performance under
the Memorandum Transmission Agreement, which action is
knowingly or intentionally taken or failed to be taken with
conscious indifference to the consequences thereof, or with
intent that injury or damage would result or would probably
result therefrom. Willful Action does not include any act or
failure to act which is merely involuntary, accidental or
negligent.
6.4.2 Action taken or not taken by a Party at the direction of its
directors, officers, or employees, having management or
administrative responsibility affecting its performance under
the Memorandum Transmission Agreement, which action has been
determined by final arbitration award or final judgment or
judicial decree to be a material default under the Memorandum
Transmission Agreement
- 4 -
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.
6.4.3 Action taken or not taken by a Party at the direction of its
directors, officers, or employees, having management or
administrative responsibility affecting its performance under
the Memorandum Transmission Agreement, which action is
knowingly or intentionally taken or failed to be taken with
the knowledge that such action taken or failed to be taken is
a material default under any Project Agreements.
6.4.4 The phrase "employees having management or administrative,
responsibility" as used in this Section 6.4 means employees of
a Party who are responsible for one or more of the executive
functions of planning, organizing, coordinating, directing,
controlling and supervising such Party's performance under
this Memorandum Transmission Agreement.
It is understood and agreed that as between The United States of America
and one or more of the non-Federal parties, liabilities within the purview of
Section 6 of the Memorandum Transmission Agreement shall be governed by the
provisions of Section 6 in such agreement, but that liability of one non-Federal
party to one or more other non-Federal parties to the Memorandum Transmission
- 5 -
Agreement that are within the purview of Section 6 as set forth in this letter
agreement shall be governed by the Section 6 herein.
Will you please signify your agreement to the terms and conditions of this
letter by executing the appropriate acceptance provisions hereof.
Very truly yours,
APPROVED AS TO FORM:
ROLLIN E. WOODBURY SOUTHERN CALIFORNIA EDISON COMPANY
Vice President & General Counsel
By /s/ David Barry
----------------------------
Assistant Counsel
10-3, 1969
By /s/ William R. Gould
----------------------------
Senior Vice President
The terms and conditions of this letter are agreed to this 31st day of
October, 1969.
ARIZONA PUBLIC SERVICE COMPANY
By /s/ MC Titus
----------------------------
Title Executive Vice President
DEPARTMENT OF WATER AND POWER OF THE CITY OF LOS ANGELES, BY THE BOARD OF WATER
AND POWER COMMISSIONERS OF THE CITY OF LOS ANGELES
/s/ Authorized Signatory
- ------------------------
By /s/ Authorized Signatory
----------------------------
President
And /s/ Authorized Signatory
----------------------------
Secretary
NEVADA POWER COMPANY
By /s/ Authorized Signatory
----------------------------
Title President
- 6 -
SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT
By /s/ Authorized Signatory
--------------------------------
Title President
TUCSON GAS & ELECTRIC COMPANY
By /s/ J. Luther Davies
--------------------------------
Title President
Contract No. 14-06-300-2140
MEMORANDUM TRANSMISSION AGREEMENT
between
PARTICIPANTS IN THE NAVAJO PROJECT
and
SOUTHERN CALIFORNIA EDISON COMPANY
DWPNO. 10342
MEMORANDUM TRANSMISSION AGREEMENT
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
1 PARTIES 1
2 RECITALS 1
3 AGREEMENT 3
4 TRANSMISSION PRINCIPLES 14
5 SUBSEQUENT AGREEMENTS 16
6 LIABILITY AND INSURANCE 16
7 ARBITRATION 19
8 EFFECTIVE DATE 21
9 REGULATORY APPROVAL 21
10 AGREEMENT SUBJECT TO COLORADO
RIVER COMPACT 22
11 AUTHORIZED REPRESENTATIVES OF THE 22
PARTIES
12 GENERAL POWER CONTRACT PROVISIONS 22
MEMORANDUM TRANSMISSION AGREEMENT
1. PARTIES
The Parties to this Memorandum Transmission Agreement are: ARIZONA
PUBLIC SERVICE COMPANY, an Arizona corporation ("Arizona"); DEPARTMENT OF
WATER AND POWER OF THE CITY OF LOS ANGELES, a department organized and
existing under the charter of the City of Los Angeles, a municipal
corporation of the State of California ("Los Angeles"); NEVADA POWER
COMPANY, a Nevada corporation ("Nevada"); SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT, an agricultural improvement district
organized and existing under the laws of the State of Arizona ("Salt River
Project"); TUCSON GAS & ELECTRIC COMPANY, an Arizona corporation
("Tucson"); THE UNITED STATES OF AMERICA ("United States") represented by
the officer executing this Memorandum Transmission Agreement, his duly
appointed successor or duly authorized representative ("contracting
officer"); all of the above collectively referred to as the
"Participants"; and SOUTHERN CALIFORNIA EDISON COMPANY, a California
corporation ("Edison").
2. RECITALS
This Memorandum Transmission Agreement is made with reference to the
following facts, among others:
2.1 Edison and Arizona entered into the Edison-Arizona
Transmission Agreement dated July 20, 1966, and Amendment No. 1 thereto
dated August 26, 1966, covering the terms and conditions of the
construction, ownership, operation and maintenance of a 500-kv
transmission line from the Four Corners Generating Station to the Eldorado
Substation, and the Moenkopi Switchyard (hereinafter referred to as the
"Edison-Arizona Transmission System").
2.2 The Participants have entered into the Navajo Project Participation
Agreement, which provides for the construction, ownership, operation
and maintenance of the Navajo Project, including the Transmission
System.
2.3 The Transmission System will include the following transmission
lines and related switchyard and substation facilities:
Navajo - McCullough 500-kv line
Navajo - Moenkopi 500-kv line
Navajo - Phoenix Area 500-kv line
Moenkopi - Phoenix Area 500-kv line
2.4 The Transmission System will operate interconnected with the
Edison-Arizona Transmission System.
2.5 The Parties desire to provide series capacitors ("Project Series
Capacitors") in the Transmission System and the Edison-Arizona
Transmission System, which will enable said systems to transmit
power in an amount equivalent to the Participants' entitlements
-2-
in the Navajo Generating Station, including the Central Arizona
Project pumping requirements, to their respective delivery points.
2.6 The Parties desire to provide series capacitors ("Incremental Series
Capacitors"), in addition to those referred to in Section 2.5 above,
which will provide an incremental amount of transmission capacity
on both the Navajo-McCullough 500-kv line and the Moenkopi-Eldorado
500-kv line between Moenkopi Switchyard and Eldorado Substation
equal to the Edison Moenkopi Delivery (defined in Section 2.7
hereof).
2.7 The United States desires to sell to Edison for delivery to Edison
at Moenkopi Switchyard a portion of its entitlement to power from
the Navajo Generating Station in accordance with provisions of the
Contract with Edison of even date for Interim Sale of United States
Entitlement in Navajo Project (such portion herein referred to as
the "Edison Moenkopi Delivery").
3. AGREEMENT
The Parties agree as follows:
3.1 Arizona shall furnish, install, own, operate and maintain:
3.1.1 Project Series Capacitors and associated equipment located in
the Moenkopi Switchyard
-3-
on the Moenkopi-Eldorado 500-kv line.
3.1.2 Incremental Series Capacitors and associated equipment located
in the Moenkopi Switchyard on the Moenkopi-Eldorado 500-kv
line.
3.2 Edison shall furnish, install, own, operate and maintain:
3.2.1 Project Series Capacitors and associated equipment in the
Eldorado Substation on the Moenkopi-Eldorado 500-kv line.
3.2.2 Incremental Series Capacitors and associated equipment in the
Eldorado Substation on the Moenkopi-Eldorado 500-kv line, and
Edison shall assume the cost thereof.
3.3 Arizona shall furnish, install, own, operate and maintain Project
Series Capacitors and associated equipment in the Moenkopi
Switchyard on the Navajo-Moenkopi 500-kv line.
3.4 Arizona shall furnish, install, own, operate and maintain Project
Series Capacitors, shunt reactors and associated equipment in the
Moenkopi Switchyard on the Moenkopi-Phoenix Area 500-kv line.
3.5 Arizona shall furnish, install, own, operate and maintain Project
Series Capacitors and associated equipment in both the Four Corners
Switchyard and the Moenkopi Switchyard on the Four Corners-Moenkopi
500-kv line.
-4-
3.6 Arizona shall furnish, install, own, operate and maintain Project
Series Capacitors and associated equipment in the Cholla Switchyard
and Pinnacle Peak Substation on the Cholla-Pinnacle Peak 345-kv
lines.
3.7 Arizona shall furnish, install, own, operate and maintain power
circuit breakers and related equipment (excluding series capacitors,
shunt reactors and associated equipment) in the Moenkopi Switchyard
for the interconnection of the Transmission System and the
Edison-Arizona Transmission System.
3.8 Participants in the Navajo-McCullough 500-kv line
("Navajo-McCullough Participants") shall furnish, install, operate
and maintain at their cost Project Series Capacitors, shunt reactors
and associated equipment at the terminals of the Navajo-McCullough
500-kv line, or at the midpoint of said line, or at all such
locations.
3.9 The Navajo-McCullough Participants shall furnish, install, operate
and maintain Incremental Series Capacitors and associated equipment
at the terminals of the Navajo-McCullough 500-kv line, or at the
mid-point of said line, or at all such locations.
3.10 The Navajo-McCullough Participants shall make appropriate financial
arrangements with Edison to cover the costs incurred by Edison in
complying with Section 3.2.1 hereof.
-5-
3.11 The Navajo-McCullough Participants shall make appropriate financial
arrangements with Arizona to cover the costs incurred by Arizona in
complying with Section 3.1.1 hereof.
3.12 The Participants shall make appropriate financial arrangements with
Arizona to cover the costs incurred by Arizona in complying with
Sections 3.3 and 3.7 hereof.
3.13 The Participants in Moenkopi-Phoenix Area 500-kv line (hereinafter
referred to as the "Moenkopi-Phoenix Area Participants") shall
make appropriate financial arrangements with Arizona to cover the
costs incurred by Arizona in complying with Sections 3.4, 3.5 and
3.6 hereof.
3.14 Edison shall make appropriate financial arrangements with Arizona to
cover the costs incurred by Arizona in complying with Section 3.1.2
hereof.
3.15 Edison shall make appropriate financial arrangements with the
Participants to cover the costs incurred by the Participants in
complying with Section 3.9 hereof.
3.16 The phrase "make appropriate financial arrangements" as used in
Sections 3.10 through 3.15 hereof, shall mean one of two alternates:
3.16.1 A contribution in aid of construction for the equipment to be
furnished and installed
-6-
and a mutually agreed monthly payment to cover all costs
other than depreciation and return on investment.
3.16.2 A monthly payment; substantially in accordance with present
formula and schedules of the Edison-Arizona Transmission
Agreement.
Within one year after the effective date of this Memorandum
Transmission Agreement, each Participant with a financial obligation
hereunder shall choose either of the above described alternates.
3.17 In lieu of the payment options provided in Section 3.16 hereof, the
Parties may exchange obligations or property by mutual agreement of
such Parties.
3.18 Arizona's charges to the Parties to cover all costs other than
depreciation and return on investment incurred in connection with
the Moenkopi Switchyard (including all series capacitors, shunt
reactors and associated equipment) shall be billed in proportion to
the initial gross investment in the Moenkopi Switchyard for which
they are responsible under the provisions of the Edison-Arizona
Transmission Agreement in the case of Edison and under the
provisions of the Participation Agreement in the case of the
Participants.
3.19 Edison and the Navajo-McCullough Participants shall each provide
reciprocal emergency service rights in
-7-
accordance with this Section 3.19 for which there shall be no charge made
by Edison to the Navajo-McCullough Participants, or by the
Navajo-McCullough Participants to Edison.
3.19.1 In the event of an outage of the Navajo-McCullough 500-kv line or
associated terminal facilities, subject to Section 3.19.3 hereof,
(i) the Navajo-McCullough Participants shall be entitled to have an
amount of power equivalent to their entitlement in the Navajo
Generating Station, less transmission losses, transmitted between
said station and McCullough Substation over the Moenkopi-Eldorado
and Eldorado-McCullough 500-kv lines and associated terminal
facilities; provided that, for the purposes of computing such
entitlements, the entitlement of the United States shall be deemed
to be 250/561 of the United States' entitlement in the Navajo
Generating Station; and (ii) Edison shall be entitled to have an
amount of power equivalent to its entitlement of 48% of the net
effective generating capacity of Four Corners Units 4 and 5 plus an
amount of power equal to the Edison Mocnkopi Delivery,
-8-
less transmission losses, transmitted between the Moenkopi
Switchyard and the Eldorado Substation over the Moenkopi-Eldorado
500-kv line and associated terminal facilities.
3.19.2 In the event of an outage of the Moenkopi-Eldorado 500-kv line or
associated terminal facilities, subject to Section 3.19.3 hereof,
(i) Edison shall be entitled to have an amount of power equivalent
to its entitlement of 48% of the net effective generating capacity
of Four Corners Units 4 and 5 plus an amount of power equal to the
Edison Moenkopi Delivery, less transmission losses, transmitted
between the Moenkopi Switchyard and the Eldorado Substation over
the Navajo-Moenkopi, Navajo-McCullough and Eldorado-McCullough
500-kv lines and associated terminal facilities; and (ii) the
Navajo-McCullough Participants shall be entitled to have an amount
of power equivalent to their entitlement in the Navajo Generating
Station, less transmission losses, transmitted between said station
and the McCullough Substation over the Navajo-McCullough 500-kv
line and associated
-9-
terminal facilities; provided, that, for the purposes of computing
such entitlements, the entitlement of the United States shall be
deemed to be 250/561 of the United States' entitlement in the
Navajo Generating Station.
3.19.3 Unless otherwise agreed upon by the system dispatchers of Edison
and the Navajo-McCullough Participants, in the event of an outage
of the Navajo-McCullough 500-kv line or the Moenkopi-Eldorado
500-kv line, the Navajo-McCullough Participants and Edison shall
reduce transmission of power and associated energy within one-half
hour after the occurrence of such outage so that the scheduled
delivery over the remaining in-service line does not exceed 1,000
megawatts. Said 1,000 megawatt limitation may be changed from time
to time by mutual agreement of the authorized representatives of
Edison and the Navajo-McCullough Participants. The entitlement of
each Navajo-McCullough Participant to capacity in the remaining
in-service transmission line shall be equal to the capacity of such
remaining in-service line as established above times the ratio that
such Participant's
-10-
entitlement in the Navajo Generating Station bears to the total
capability described in Section 3.26 hereof. Edison's entitlement to
capacity in the remaining in-service transmission line shall be
equal to the capacity of such remaining in-service line as
established above times the ratio that Edison's entitlement of 48%
of the net effective generating capacity of Four Corners Units 4 and
5 and the Edison-Moenkopi Delivery bears to the total capability
described in Section 3.26 hereof. For the purposes of this Section
3.19.3, the entitlement of the United States in the Navajo
Generating Station shall be deemed to be 250/561 of its entitlement
in the Navajo Generating Station.
3.20 Equitable adjustment for transmission losses in the Edison-Arizona
Transmission System and the Transmission System shall be agreed upon
between Edison and the Participants.
3.21 Edison and the Participants shall coordinate the design of the
Transmission System, the additions to the Edison-Arizona
Transmission System, and any interconnections thereto, including
criteria related to line loading, series capacitor ratings and
similar matters.
-11-
3.22 Arizona shall transmit for Edison between the Moenkopi Switchyard
and the Colorado River over the Edison-Arizona Transmission System
an amount of electric power equal to the Edison Moenkopi Delivery.
3.23 The ownership interests and cost responsibilities of the
Participants for the facilities to be installed pursuant to this
Memorandum Transmission Agreement shall be as provided in the Navajo
Project Agreements.
3.24 The Participants shall have the right to transmit power in an amount
equivalent to their entitlements in the Navajo Generating Station
through the Moenkopi Switchyard.
3.25 The Navajo-McCullough 500-kv line and the Moenkopi-Eldorado 500-kv
line will be interconnected at each end through other facilities,
and under normal operating conditions said two lines will be
operated in parallel as a system.
3.26 For the purposes of this Agreement, the total capability of the
system described in Section 3.25 hereof shall be deemed to be an
amount equivalent to the sum of: (i) the sum of the entitlements of
Nevada and Los Angeles in the Navajo Generating Station and 250/561
of the entitlement of the United States in the Navajo Generating
Station; (ii) the Edison entitlement in Four Corners Units 4 and 5,
-12-
which is 48% of the net effective generating capacity of said units;
and (iii) the Edison Moenkopi Delivery.
3.27 In the event that the Navajo-McCullough Participants desire to
schedule delivery of power over the Navajo-McCullough 500-kv line in
an aggregate amount in excess of the amount described in Section
3.26(i) hereof or Edison desires to schedule delivery of power over
the Moenkopi-Eldorado 500-kv line in an amount in excess of the sum
of the amounts described in Sections 3.26(ii) and 3.26(iii) hereof,
the Navajo-McCullough Participants and Edison shall conduct
engineering studies to determine the capability of the system
described in Section 3.25 hereof to deliver such additional power.
The deemed capability of said system as established in Section 3.26
hereof may be changed upon mutual agreement of all the
Navajo-McCullough Participants and Edison.
3.28 Until such time as the United States recaptures all of the Edison
Moenkopi Delivery, the Navajo-Phoenix Area Participants shall not
schedule power over the Transmission System in an amount which is in
excess of the sum of their entitlements in the Navajo Generating
Station without the mutual agreement of the Navajo-Phoenix Area
Participants and Edison.
3.29 The Participants shall have the right to interconnect
-13-
their systems with the Transmission System at their designated
points of delivery for the purpose of transmitting power in amounts
equivalent to their entitlements in the Navajo Generating Station.
3.30 Except as provided in Section 3.29 hereof, the Participants shall
not interconnect the Transmission System with their systems or
permit any third party to interconnect the Transmission System with
its system in a manner which would unreasonably jeopardize or
unreasonably impair the operation by Edison and Arizona of the
Edison-Arizona Transmission System.
3.31 Edison and Arizona shall not interconnect the Edison-Arizona
Transmission System with their systems or permit any third party to
interconnect the Edison-Arizona Transmission System with its system
in a manner which would unreasonably jeopardize or unreasonably
impair the operation of the Transmission System.
4. TRANSMISSION PRINCIPLES
4.1 Each Party shall, independently of the transmission capacity
otherwise maintained by others, maintain in its system, or between
its system and the system of other Parties or other entities,
sufficient capacity, by ownership or contract, which will permit it
to transmit all power and energy introduced
-14-
into its system to meet its own commitments and to fulfill its
written obligations, if any, to provide transmission service for
other Parties or other entities, regardless of the origin, source,
ownership or type of generation used to produce such power and
energy.
4.2 It is recognized that flows of electric energy may occur through
interconnections between the systems of the Parties as a result of
parallel operation of the systems of the Parties with each other and
with other entities. Each Party shall use its best efforts at all
times to maintain as nearly as practicable the scheduled quantities
of power and energy into and out of the control area containing its
system.
4.3 The Parties agree that, should differences arise between them
regarding the implementation of the foregoing principles, they will
seek an equitable solution and, if necessary, will perform joint
technical studies in an effort to agree upon (i) the amounts of
power that can be scheduled and transmitted on their systems or
between one Party's system and the systems of other Parties or other
entities in accordance with the principles of Section 4.1 hereof, or
(ii) upon whether any Party has been in violation of Section 4.2
hereof. In
-15-
the event such agreement cannot be reached, the matter shall be
submitted to arbitration, subject to and in accordance with the
provisions of Section 7 hereof, and in accordance with guidelines to
be established by the Parties for purposes of determining each
particular dispute.
5. SUBSEQUENT AGREEMENTS
5.1 The Parties intend that the obligations and principles of this
Memorandum Transmission Agreement will be implemented by definitive
agreements, including appropriate amendments to the Edison-Arizona
Transmission Agreement, which will be negotiated in good faith and
executed by the applicable Parties. In the event that all required
definitive agreements are not consummated, the Parties agree that
this Memorandum Transmission Agreement shall serve as the basis for
requiring the performance of all obligations herein set forth,
subject to the terms and conditions herein set forth.
6. LIABILITY AND INSURANCE
6.1 The Parties agree to use their best efforts to obtain a policy or
policies of liability insurance with cross liability endorsements
specifically limited to protecting the Parties from claims and
liabilities inter se arising out of the interconnected operation
provided for in the Memorandum
-16-
Transmission Agreement.
6.2 Except for any damage resulting from Willful Action, and except to
the extent of any damage covered by valid and collectible insurance,
if any, described in Section 6.1 hereof, and as between the
Participants, except to the extent of any damage covered by valid
and collectible Project Insurance as defined in the Navajo Project
Participation Agreement, liability on the part of any Party (First
Party), or any of its directors, officers or employees, for any
damage to any Party (Second Party) whether or not caused by
negligence, which occurs as the result of performance or
non-performance of its responsibilities under this Memorandum
Transmission Agreement may not be collected from the Party (First
Party), or any of its directors, officers or employees, by any
action in law or equity by the Party (Second Party).
6.3 Except for liability resulting from Willful Action, any Party whose
electric customer shall make a claim or bring an action for any
death, injury, loss or damage arising out of electric service to
such customer, shall indemnify and hold harmless all other Parties,
their directors, officers and employees, from and against any
liability for such death, injury, loss or damage. The term "electric
-17-
customer" shall mean an electric customer to whom no power is
delivered for resale.
6.4 Each Party shall be responsible for the consequences of its own
Willful Action, and shall indemnify and save harmless the other
Parties from the consequences thereof.
6.5 The term "Willful Action" as used in this Section 6 is defined as
follows:
6.5.1 Action taken or not taken by a Party at the direction of its
directors, officers, contracting officer, or employees, having
management or administrative responsibility affecting its
performance under the Memorandum Transmission Agreement, which
action is knowingly or intentionally taken or failed to be
taken with conscious indifference to the consequences thereof,
or with intent that injury or damage would result or would
probably result therefrom. Willful Action does not include any
act or failure to act which is merely involuntary, accidental
or negligent.
6.5.2 Action taken or not taken by a Party at the direction of its
directors, officers, contracting officer, or employees, having
management or administrative responsibility affecting its
performance under the Memorandum
-18-
Transmission Agreement, which action has been determined by
final arbitration award or final judgment or judicial decree
to be a material default under the Memorandum Transmission
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.
6.5.3 Action taken or not taken by a Party at the direction of its
directors, officers, contracting officer, or employees, having
management or administrative responsibility affecting its
performance under the Memorandum Transmission Agreement, which
action is knowingly or intentionally taken or failed to be
taken with the knowledge that such action taken or failed to
be taken is a material default under this agreement.
6.5.4 The phrase "employees having management or administrative
responsibility" as used in this Section 6.5 means employees of
a Party who are responsible for one or more of the executive
functions of planning, organizing,
-19-
coordinating, directing, controlling and supervising such
Party's performance under this Memorandum Transmission
Agreement.
7. ARBITRATION
7.1 If a dispute between any of the Parties should arise under this
Memorandum Transmission Agreement which does not involve the legal
rights of or which will not create a legal obligation upon the
United States under this Memorandum Transmission Agreement, or will
not affect the interests or rights held for the use and benefit of
the United States under the applicable Navajo Project Agreements,
any Party may call for submission of the dispute to arbitration,
which call shall be binding upon all of the other Parties. Except
as specifically provided in an applicable agreement, the
arbitration shall be governed by the rules and practices of the
American Arbitration Association. The award of the arbitrators shall
be final and binding upon the Parties, and the costs and expenses
of the arbitrators shall be shared equally by the Parties
participating in the arbitration, unless otherwise decided by the
arbitrators.
7.2 If a dispute arises between any of the Parties which does or may
involve the legal rights of or which will or may create a legal
obligation upon the United States under this Memorandum Transmission
Agreement,
-20-
or which affects or may affect the interests or rights held for the
use and benefit of the United States under the applicable Navajo
Project Agreements, then any Party may call for submission to
arbitration of any part of the dispute, issue or action related
thereto which the United States may lawfully submit to arbitration.
If the contracting officer agrees to such arbitration, or if the
contracting officer refuses or fails to arbitrate and a court of
competent jurisdiction thereafter finally decides that the United
States may lawfully submit the matter in dispute to arbitration, it
shall be conducted in the manner set forth in this Section 7, or in
such other manner as may be provided for by Federal law.
8. EFFECTIVE DATE
This Memorandum Transmission Agreement shall become effective when
it has been duly executed and delivered on behalf of the Parties.
9. REGULATORY APPROVAL
9.1 This Memorandum Transmission Agreement shall be subject to filing
with, and to such changes or modifications as may from time to time
be directed by, competent regulatory authority, if any, in the
exercise of its jurisdiction.
-21-
10. AGREEMENT SUBJECT TO COLORADO RIVER COMPACT
10.1 This agreement is made upon the express condition and with the
express understanding that all rights hereunder shall be subject to
and controlled by the Colorado River Compact, being the compact or
agreement signed at Santa Fe, New Mexico, November 24, 1922,
pursuant to Act of Congress approved August 19, 1921, entitled "An
Act to permit a compact or agreement between the States of Arizona,
California, Colorado, Nevada, New Mexico, Utah and Wyoming
respecting the disposition and apportionment of the waters of the
Colorado River, and for other purposes", which Compact was approved
in Section 13(a) of the Boulder Canyon Project Act.
11. AUTHORIZED REPRESENTATIVES OF THE PARTIES
11.1 Each Party and the contracting officer, by written notice to the
other, shall designate the representative who is authorized to act
in its and his behalf with respect to those matters contained herein
which are the functions and responsibilities of the authorized
representatives of the Parties. Each Party may change the
designation of its authorized representative upon written notice to
the other.
12. GENERAL POWER CONTRACT PROVISIONS
12.1 The General Power Contract Provisions effective
-22-
April 27, 1961, with revised Page 2 dated August 7, 1968, revised
Page 3 dated January 2, 1969, and revised Page 6 dated July 28,
1969, attached hereto are hereby made a part of this Memorandum
Transmission Agreement; provided, however, that Provisions A through
D, F through N, Q through S, V, Y, Z and AA through GG shall not
apply to this Memorandum Transmission Agreement; and provided that,
as to Provision P, since Title 42 U.S.C. 2000-e-2(i) provides for
the giving of preference to Indians in employment on or near an
Indian Reservation, the obligations of the non-federal Parties under
Provision P shall be subject to any obligation undertaken by said
non-federal Parties to give preference to Indians for employment on
or near an Indian Reservation.
IN WITNESS WHEREOF, the Parties have caused this Memorandum Transmission
Agreement to be executed as of this 30th day of September, 1969.
THE UNITED STATES OF AMERICA
By /s/ Walter J. Hickel
--------------------------------
Secretary of the Interior
ARIZONA PUBLIC SERVICE COMPANY
ATTEST: By /s/ M.C. Titus
/s/ Gerald J. Griffin --------------------------------
- ---------------------- EXECUTIVE VICE PRESIDENT
Assistant Secretary
-23-
DEPARTMENT OF WATER AND POWER
OF THE CITY OF LOS ANGELES
by
By /s/ Donald J. Reisner Board of Water and Power Commissioners of
- -------------------- the City of Los Angeles
ATTEST: By /s/ Authorized Signatory
-----------------------
/s/ Mary J. Born PRESIDENT
- --------------------
Secretary NEVADA POWER COMPANY
ATTEST: By /s/ Harry Allen
-----------------
/s/ Authorized Signatory President
- ------------------------
Secretary
SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT
By /s/ Authorized Signatory
ATTEST: ------------------------
President
/s/ Authorized Signatory
- ------------------------
Secretary TUSCON GAS AND ELECTRIC COMPANY
By /s/ HR Catlin
---------------
ATTEST: VICE PRESIDENT
/s/ W.D. Brooks
- ------------------------ SOUTHERN CALIFORNIA EDISON COMPANY
ASSISTANT SECRETARY
By /s/ William R. Gould
----------------------------
SENIOR VICE PRESIDENT
ATTEST:
/s/ Authorized Signatory [STAMP]
- ------------------------
ASSISTANT SECRETARY Approved as to form
-24-
Effective April 27, 1961
UNITED STATES DEPARTMENT OF THE INTERIOR
BUREAU OF RECLAMATION
GENERAL POWER CONTRACT PROVISIONS
A. Characteristics of Power and Energy.
Electric energy supplied hereunder will be three-phase, alternating
current, at a nominal frequency of sixty (60) cycles per second.
B. Delivery of Energy in Excess of Contract Obligation.
The Contractor may from time to time, in the absence of objection by
the contracting officer, use energy at rates of power delivery greater
than the contract rate of delivery in effect for each type of service
provided for in this contract, but such greater use shall not be deemed to
establish in the Contractor any right thereto and the Contractor shall
cease any such greater use whenever and for the periods of time requested
by the contracting officer. Nothing in this contract contained shall
obligate or be construed to obligate the United States to increase any
contract rate of delivery hereunder. If additional power is not available
from the United States, the responsibility for securing additional power
shall rest wholly with the Contractor.
C. Continuity of Electric Service to be Furnished.
The electric service, unless otherwise specified, will be furnished
continuously except (1) for interruptions or reductions due to
uncontrollable forces, as defined herein; (2) for interruptions or
reductions due to operation of devices installed for power system
protection; and (3) for temporary interruptions or reductions, which, in
the opinion of the contracting officer, are necessary or desirable for the
purposes of maintenance, repairs, replacements, installation of equipment,
or investigation and inspection. The United States, except in case of
emergency as determined by the contracting officer, will give the
Contractor reasonable advance notice of such temporary interruptions or
reductions and will remove the cause thereof with diligence.
D. Multiple Points of Delivery.
When electric service is furnished at two or more points of
delivery under the same schedule of rates, said schedule of rates shall
apply separately to the service supplied at each point of delivery;
Provided, That where the meter readings are considered separately and the
Contractor's system may be interconnected between points of delivery
during emergencies, the meter readings at any point of delivery will be
adjusted when necessary to compensate for duplication of power demand
recorded by meters at alternate points of delivery due to emergency
conditions which are beyond the Contractor's control or temporary
conditions caused by scheduled outages.
E. Uncontrollable Forces.
Neither party shall be considered to be in default in respect to any
obligation hereunder, if prevented from fulfilling such obligation by
reason of uncontrollable forces, the term uncontrollable forces being
deemed for the purpose of this contract to mean any cause beyond the
control of the party affected, including, but not limited to, failure of
facilities, flood, earthquake, storm, lightning, fire, epidemic, war,
riot, civil disturbance, labor disturbance, sabotage, and restraint by
court or public authority, which by exercise of due diligence and
foresight such party could not reasonably have been expected to avoid.
Either party rendered unable to fulfill any obligation by reason of
uncontrollable forces shall exercise due diligence to remove such
inability with all reasonable dispatch.
F. Modification of Rates.
The rate schedule specified in this contract shall be subject to
successive modification by the United States through the promulgation of
superseding rate schedules. If at any time the United States promulgates a
rate schedule superseding the rate schedule then in effect under this
contract, it will promptly notify the Contractor thereof. Said superseding
rate schedule, as of its effective date, shall become effective as to this
contract unless the Contractor, by notice in writing given to the
contracting officer within 180 days after notice to it by the United
States of promulgation of said superseding rate schedule, shall elect to
terminate this contract effective as of such date not more than three (3)
years subsequent thereto as the Contractor shall therein specify. In the
event of such termination, said superseding rate schedule shall not be
effective during the period of the remaining unexpired term of this
contract or during a period of two years from the date of notice to the
Contractor of the promulgation of said superseding rate schedule,
whichever period is shorter.
G. Minimum Annual Capacity Charge.
When the rate schedule in effect under this contract provides for a
minimum annual capacity charge, a statement of the minimum annual capacity
charge due, if any, shall be included in the bill rendered for electric
service for the last billing period of each calendar year, appropriately
adjusted on a pro rata basis if the full billing periods for the
adjustable items (including increases or decreases in the contract rate of
delivery) in the calendar year are less than 12. Fractional billing
periods will not be considered in such determination. Where multiple
points of delivery are involved and the contract rate of delivery is
stated to be a maximum aggregate rate of delivery for all points, in
determining the minimum annual capacity charge due, if any, the monthly
capacity charges at the individual points of delivery shall be added
together. If this contract represents a continuation of electric service
to an existing customer, for the purpose of determining the minimum annual
capacity charge, (1) the first 24 full billing periods shall begin with
the date that electric service was first rendered under the same or a
similar rate schedule in the expired or superseded contracts, and (2) for
the calendar year in which electric service is begun under this contract,
the minimum annual capacity charges under this contract and the contracts
it succeeded or superseded shall be combined into one such charge due at
the end of said calendar year and the monthly capacity charges during said
entire calendar year shall be credited against said combined minimum
annual capacity charge.
H. Billing and Payments.
The United States will submit bills to the Contractor on or before
the tenth day of each month for electric service furnished during the
preceding month, and payments will be due and payable by the Contractor on
the first day of the month immediately succeeding the date each bill is
submitted.
I. Nonpayment of Bills.
If the Contractor fails to pay any bill when due an interest charge
of one per cent (1%) of the amount unpaid shall be added thereto as
liquidated damages, and thereafter, as further liquidated damages, an
additional interest charge of one-half of one per cent (1/2%) of the
principal sum unpaid shall be added on the first day of each succeeding
calendar month until the amount due, including interest, is paid in full.
The United States shall have the right upon not less than fifteen (15)
days' advance written notice to discontinue furnishing electric service to
the Contractor for nonpayment of bills and to refuse to resume same so
long as any part of the amount due remains unpaid. Such a discontinuance
of electric service will
GENERAL POWER CONTRACT PROVISIONS
not relieve the Contractor of liability for the minimum charge during the
time electric service is so discontinued. The rights given herein to the
United States shall be in addition to all other remedies available to the
United States, either at law or in equity, for the breach of any of the
provisions hereof.
J. Adjustments for Fractional Billing Period.
(a) For a fractional part of a billing period at the beginning or
end of service, and for fractional periods due to withdrawals of service,
the demand or capacity charge, the kilowatthour blocks of the energy
charge, and the minimum charge shall each be proportionately adjusted in
the ratio that the number of hours that electric service is furnished to
the Contractor in such fractional billing period bears to the total number
of hours in the billing period involved.
(b) Whenever irrigation and/or drainage pumping service is supplied
under this contract, adjustments in the demand or capacity charge and in
the kilowatthour blocks of the energy charge as applicable, and in the
minimum charge of the rate schedule under which service is supplied, shall
be made for the fractional part of the billing period at the beginning and
end of pumping service in each year in like manner as is provided for in
section (a) of this article. If pumping service is supplied in conjunction
with service for other purposes and is not metered separately, the billing
demand for pumping service shall be considered to be the difference
between the highest 30-minute integrated demand measured during the
billing period and the contract rate of delivery for firm power.
K. Adjustments for Curtailments to Service.
Unless curtailment of service is due to a request by the customer,
billing adjustments will be made if the delivery of electric energy is
curtailed because of conditions on the power system of the United States,
which system for the purpose of such adjustments hereunder shall include
transmission facilities utilized but not owned by the United States, for
periods of one (1) hour or longer in duration each. The total number of
hours of curtailed service in any billing period shall be determined by
adding (1) the sum of the number of hours of interrupted service to (2)
the product of: the number of hours of reduced service multiplied by the
percentage of said reduction below the lesser of (a) the contract rate of
delivery, or (b) the obligation of the United States to deliver firm power
and energy as established under the operating agreement entered into
pursuant to the Auxiliary Power Service article hereof, or (c) the rate of
delivery required by the Contractor at the time of such reduction. The
demand or capacity charge, the kilowatthour blocks of the energy charge,
and the minimum charge shall each be proportionately adjusted in the ratio
that the total number of hours of such curtailed service as herein
determined bears to the total number of hours in the billing period
involved. The Contractor shall make written claim within thirty (30) days
after receiving the monthly bill, for adjustment on account of any
curtailment to service, for periods of one (1) hour or longer in duration
each, alleged to have occurred and which is not reflected in such bill.
Failure to make such written claim, within said thirty (30) day period,
shall constitute a waiver thereof. All curtailments to service, which are
due to conditions on the power system of the United States, shall be
subject to the provisions of this article and the Contractor shall be
limited in its remedy to the relief granted by this article; Provided,
That withdrawal of power and energy under contract provisions shall not be
deemed curtailments to service.
L. Metering.
(a) The total electric power and energy delivered to the Contractor
will be measured by metering equipment to be furnished and maintained by
the United States. Meters shall be sealed and the seals shall be broken
only upon occasions when the meters are to be inspected, tested, or
adjusted, and representatives of the Contractor shall be afforded
reasonable opportunity to be present upon such occasions. Metering
equipment shall be inspected and/or tested at least once each year by the
United States and at any reasonable time upon request therefor by either
party. Any metering equipment found to be defective or inaccurate shall be
repaired and readjusted or replaced. Should any meter fail to register,
the electric power and energy delivered during such period of failure to
register shall, for billing purposes, be estimated by the contracting
officer from the best information available.
(b) If any of the inspections and/or tests provided for herein
disclose an error exceeding two per cent (2%), correction based upon the
inaccuracy found shall be made of the records of electric service
furnished since the beginning of the monthly billing period immediately
preceding the billing period during which the test was made; Provided,
That no correction shall be made for a longer period than such inaccuracy
may be determined by the contracting officer to have existed. Any
correction in billing resulting from such correction in meter records
shall be made in the next monthly bill rendered by the United States to
the Contractor, and such correction when made shall constitute full
adjustment of any claim between the parties hereto arising out of such
inaccuracy of metering equipment.
M. Resale of Electric Energy.
The Contractor shall not sell any of the electric energy delivered
to it hereunder to any customer of the Contractor for resale by that
customer.
N. Power Factor.
While the Contractor normally will be required to maintain the power
factor as stated in the rate schedule then in effect under this contract,
the Contractor will be permitted to operate at a lower power factor when
conditions are such, as determined by the contracting officer, that a
lower power factor will be mutually advantageous to the Contractor and to
the United States.
O. Cooperation of Contracting Parties.
(a) If, in the maintenance of their respective power systems end/or
electrical equipment and the utilization thereof for the purposes of this
contract, it becomes necessary by reason of any emergency or extraordinary
condition for either party to request the other to furnish personnel,
materials, tools, and equipment For the accomplishment thereof, the party
so requested shall cooperate with the other and render such assistance as
the party so requested may determine to be available. The party making
such request, upon receipt of properly itemized bills from the other
party, shall reimburse the party rendering such assistance for all costs
properly and reasonably incurred by it in such performance, including not
to exceed fifteen percent (15%) thereof for administrative and general
expenses, such costs to be determined on the basis of current charges or
rates used in its own operations by the party rendering assistance.
2
GENERAL POWER CONTRACT PROVISIONS
(b) This contract shall be subject to all the provisions and
conditions of the Act of Congress entitled the Work Hours Act of 1962,
approved August 13, 1962 (76 Stat. 357), which establishes standards for
hours of work and overtime pay of laborers and mechanics employed on work
done under contract for, or with the financial aid of, the United States,
the same as if that Act had been specifically set forth herein.
P. Provisions Relative to Employment
(1) During the performance of this contract, the Contractor agrees as
follows:
(a) The Contractor will not discriminate against any employee or
applicant for employment because of race, color, religion,
sex, or national origin. The Contractor will take affirmative
action to ensure that applicants are employed, and that
employees are treated during employment, without regard to
their race, color, religion, sex, or national origin. Such
action shall include, but not be limited to, the following:
Employment, upgrading, demotion, or transfer; recruitment or
recruitment advertising; layoff or termination; rates of pay
or other forms of compensation; and selection for training,
including apprenticeship. The Contractor agrees to post in
conspicuous places, available to employees and applicants for
employment, notices to be provided by the Contracting Officer
setting forth the provisions of this Equal Opportunity clause.
(b) The Contractor will, in all solicitations or advertisements
for employees placed by or on behalf of the Contractor, state
that all qualified applicants will receive consideration for
employment without regard to race, color, religion, sex, or
national origin.
(c) The Contractor will send to each labor union or representative
of workers with which he has a collective bargaining agreement
or other contract or understanding, a notice, to be provided
by the agency Contracting Officer, advising the labor union or
workers' representative of the Contractor's commitments under
this Equal Opportunity clause, and shall post copies of the
notice in conspicuous places available to employees and
applicants for employment.
(d) The Contractor will comply with all provisions of Executive
Order No. 11246 of September 24, 1965, and of the rules,
regulations, and relevant orders of the Secretary of Labor.
(e) The Contractor will furnish all information and reports
required by Executive Order No. 11246 of September 24, 1965,
and by the rules, regulations, and orders of the Secretary of
Labor, or pursuant thereto, and will permit access to his
books, records, and accounts by the contracting agency and the
Secretary of Labor for purposes of investigation to ascertain
compliance with such rules, regulations, and orders.
(f) In the event of the Contractor's noncompliance with the Equal
Opportunity clause of this contract or with any of the said
rules, regulations, or orders, this contract may be canceled,
terminated, or suspended, in whole or in part, and the
Contractor may be declared ineligible for further Government
contracts in accordance with procedures authorized in
Executive Order No. 11246 of September 24, 1965, and such
other sanctions' may be imposed and remedies invoked as
provided in Executive Order No. 11246 of September 24, 1965,
or by rule, regulation, or order of the Secretary of Labor, or
as otherwise provided by law.
(g) The Contractor will include the provisions of paragraphs (a)
through (g) in every subcontract or purchase order unless
exempted by rules, regulations, or orders of the Secretary of
Labor issued pursuant to Section 204 of Executive Order No.
11246 of September 24, 1965, so that such provisions will be
binding upon each subcontractor or vendor. The Contractor will
take such action with respect to any subcontract or purchase
order as the contracting agency may direct as a means of
enforcing such provisions, including sanctions for
noncompliance: Provided, however, That in the event the
Contractor becomes involved in, or is threatened with,
litigation with a subcontractor or vendor as a result of such
direction by the contracting agency, the Contractor may
request the United States to enter into such litigation to
protect the interests of the United States.
(2) In the performance of any part of the work contemplated by this
contract, the Contractor shall not employ any person undergoing
sentence of imprisonment at hard labor.
Q. Transfer of Interest in Contract by Contractor
No voluntary transfer of this contract or of the rights of the
Contractor hereunder shall be made without the written approval of the
Secretary of the Interior; Provided, That if the Contractor operates a
project financed in whole or in part by the Rural Electrification
Administration, the Contractor may transfer or assign its interest in the
contract to the Rural Electrification Administration or any other
department or agency of the Federal Government without such written
approval; Provided further, That any successor to or assignee of the
rights of the Contractor, whether by voluntary transfer, judicial sale,
foreclosure sale, or otherwise, shall be subject to all the provisions and
conditions of this contract to the same extent as though such successor or
assignee were the original Contractor hereunder; and, Provided further,
That the execution of a mortgage or trust deed, or judicial or foreclosure
sales made thereunder, shall not be deemed voluntary transfers within the
meaning of this article.
3
GENERAL POWER CONTRACT PROVISION
R. License to the Contractor.
The United States hereby grants the Contractor a license to
construct, install, operate, maintain, replace, or repair, either or all,
upon property of the United States under the administrative control and
jurisdiction of the Bureau of Reclamation such facilities as in the
opinion of the contracting officer are necessary or desirable for the
purposes of this contract. Said license shall remain in effect during the
term of this contract and shall expire coincidently therewith. Any
facilities so installed by the Contractor pursuant hereto shall be and
remain the property of the Contractor, notwithstanding that the same may
have been affixed to the promises, and the Contractor shall have a
reasonable times after the expiration of said license in which to remove
its facilities so installed.
S. License to the United States.
The Contractor, upon request from time to time by the contracting
officer, will grant to the United States a license or licenses to
construct, install, operate, maintain, replace, or repair, either or all,
upon the property of the Contractor such facilities as in the opinion of
the Contractor are necessary or desirable for the purposes of this
contract. The license or licenses so granted shall be in form and of legal
sufficiency acceptable to the contracting officer, shall be and remain in
effect during the term of this contract, and shall expire coincidently
therewith. Any facilities so installed by the United States pursuant to
said license or licenses shall be and remain the property of the United
States, notwithstanding that the same may have been affixed to the
promises, and the United States shall have a reasonable times after the
expiration of said license or licenses in which to remove the facilities
so installed.
T. Waivers.
Any waiver at any time by either party hereto of its rights with
respect to a default or any other matter arising in connection with this
contract shall not be deemed to be a waiver with respect to any subsequent
default or matter.
U. Notices.
Any notice, deemed or request required or authorized by this
contract shall be deemed properly given if mailed, postage prepaid, to the
contracting officer at the address shown on the signature page hereof, on
behalf of the United States, except where otherwise herein specifically
provided, and to the officer signing for the Contractor at the address
shown on the signature page hereof, on behalf of the Contractor. The
designation of the person to be notified or the address of such person may
be changed at any time by similar notice.
V. Contingent Upon Appropriations.
Where the operations of this contract extend beyond the current
fiscal year, the contract is made contingent upon Congress making the
necessary appropriation for expenditures hereunder after such current year
shall have expired. In such appropriation as may be all liability due to
the failure of Congress to make such appropriation.
W. Officials Not to Benefit.
No Member of or Delegate to Congress or Resident Commissioner shall
be admitted to any share or part of this contract or to any benefit that
may arise herefrom, but this restriction shall not be construed to extend
to this contract if made with a corporation or company for its general
benefit.
X. Covenant Against Contingent Fees.
The Contractor warrants that no person or selling agency has been
employed or retained to solicit or secure this contract upon an agreement
or understanding for a commission, percentage, brokerage, or contingent
fee, excepting bona fide employee or bona fide established commercial or
selling agencies maintained by the Contractor for the purpose of securing
business. For branch or violation of this warranty the United States shall
have the right to annual this contract without liability or in its
discretion to deduct from the contract price or consideration the full
amount of such commission, percentage, brokerage, or contingent fee.
Y. Assignment of Industrial Contract by the United States.
When the Contractor hereunder is denominated an industrial customer,
the United States may transfer and assign this contract at any time
without the consent of the Contractor to any utility engaged in the
business of distributing electric power and energy purchased at wholesale
from the United States if such assignee agrees to take over and assume all
the rights, duties, and obligations of the United States under this
contract. Whenever a transfer or assignment of this contract is made by
the United States to a utility pursuant hereto, such transfer or
assignment shall be and constitute a novation and thereafter the United
States shall be relieved of all liability under said contract and under
said assignment and the Contractor shall look solely to the assignee for
performance of this contract.
Z. Contract Subject to Colorado River Compact.
Where the energy sold hereunder is generated from waters of the
Colorado River system, this contract is made upon the express condition
and with the express covenant that all rights hereunder shall be subject
to and controlled by the Colorado River Compact approved by section 13(a)
of the Boulder Canyon Project Act of December 21, 1928, (45 Stat. 1057)
and the parties hereto shall observe and be subject to and controlled by
said Colorado River Compact in the construction, management, and operation
of the dams, reservoirs, and powerplants from which electrical energy is
to be furnished by the United States to the Contractor hereunder, and in
the storage, diversion, delivery, and use of water for the generation of
electrical energy to be delivered by the United States to the Contractor
hereunder.
4
GENERAL POWER CONTRACT PROVISIONS
THE FOLLOWING PROVISIONS ARE APPLICABLE ONLY WHEN THE ELECTRIC SERVICE
TO BE FURNISHED ARTICLE PROVIDES THAT SERVICE WILL BE FURNISHED OVER THE
FACILITIES OF A THIRD PARTY:
AA. Existence of Transmission Service Contract.
In search as the electric service hereunder is to be supplied over
facilities not owned by the United States, the obligation of the United
States to furnish electric service hereunder shall at all times be subject
to and contingent upon the existence of a transmission service contract
granting the United States the right to use such facilities not owned by it
as are necessary to the rendering of electric service hereunder; Provided,
That, if the United States acquires or constructs facilities which would
enable it to furnish direct service to the contractor, the United States, at
its option, may furnish the electric service hereunder over its own
facilities.
BB. Conditions of Transmission Service.
Anything to the contrary in this contract notwithstanding, when the
electric service under this contract is furnished by the United States over
the facilities of other by virtue of a transmission service arrangement,
the electric power and energy will be furnished at the voltage available and
under the conditions which exist from time to time on the transmission
system over which the service is supplied. The United States will
endeavor to inform the Contractor from time to time of any changes
contemplated on the system over which the service is supplied but the costs
of any changes made necessary in the Contractor's system because of changes
or conditions on the system over which the service is supplied shall not be
a charge against or a liability of the United States; Provided, That if the
Contractor, because of changes or conditions on the system over which
service hereunder is supplied, is subjected to the necessity of making
changes on its system at its own expense in order to continue receiving
service hereunder, then the Contractor may terminate this contract on not
less than sixty (60) days' written notice given to the United States at any
time prior to the making of said changes on its system, but not thereafter;
Provided further. That if the electric service requirements of the
Contractor, to the extent that the United States is obligated or determines
that it can become obligated to furnish such requirements, are not being met
or the United States advises the Contractor cannot be met because of
an insufficiency of capacity available to the United States under its
transmission service arrangement in the facilities of others over which
service hereunder is supplied, than the contractor may terminate this
contract on not less than sixty (60) days' written notice given to the
United States at any time prior to the time that the United States advises
the Contractor that the needed capacity is available, but not thereafter.
THE FOLLOWING PROVISIONS ARE APPLICABLE ONLY WHEN SERVICE IS RENDERED
TO CONTRACTORS UNDER A "SCHEDULE OF RATES FOR WHOLESALE POWER SERVICE TO
CUSTOMERS HAVING THEIR OWN GENERATING FACILITIES."
CC. Purchase of System Energy Requirements.
The Contractor agrees that it will, to the extent of the availability
of secondary energy contracted for hereunder, purchase its system energy
requirements in lieu of operating its own generating equipment except that
this provision shall not be construed to prohibit the Contractor's use of
by-product power and energy.
DD. Withdrawal of SecondaryEnergy.
The United States shall have the right, upon not less than 24 hours'
advance notice from the contracting officer to the Contractor, to withdraw
secondary energy by reducing, in whole or in part, the contract rate of
delivery for secondary energy provided for herein for such period or period
of time as the contracting officer deem necessary or advisable. The
United States also shall have the right, upon not less than 90 days, advance
written notice from the contracting officer to the Contractor, to terminate
the obligation of the United States hereunder to deliver secondary energy.
The maximum rate of delivery shall be appropriately adjusted to conform to
changes under this section in the contract rate of delivery for secondary
energy as of the effective dates thereof.
EE. Contractor's Capacity.
The Contractor's capacity as referred to herein is defined to be the
sustained load carrying ability of the Contractor's electric generating
plants, whether owned or leased, at system load factor, less station use, as
limited by transmission and substation facilities. The Contractor's
capacity, insofar as practicable, will be initially determined by a test
jointly conducted by the parties hereto immediately prior to initial
service hereunder. Therefore, the Contractor's capacity shall be
redetermined from time to time upon the request of the contracting officer
by additional jointly conducted tests to the extent practicable, but such
tests shall not be required more frequently than once in each 12 months
unless a permanent changed condition is known to exist. When tests are
impracticable, the capacities shall be determined by the contracting officer
from the best information available.
FF. Adjustments for Curtailments to service.
Adjustments for curtailments to service for periods of one (1) hour or
longer in duration each because of conditions on the power system of the
United States, which system for the purpose of such adjustments hereunder
shall include transmission facilities utilized but not owned by the United
States, shall be made in the following manner in lieu of the procedure set
out in Article K hereof:
(1) Energy Charge and Monthly Minimum Bill Adjustment:
The total number of hours of curtailed service in any billing
period shall be determined by adding (1) the sum of the hours of
interrupted service to (2) the product of: the number of hours of
reduced service multiplied by the percentage of said reduction below
the lesser of (a) the maximum rate of delivery then in effect, or (b)
the obligation of the United States to deliver firm power and energy
and/or secondary energy as established under the operating agreement
entered into pursuant to the Auxiliary Power Service article hereof, or
(c) the rate
5
GENERAL POWER CONTRACT PROVISIONS
of delivery required by the Contractor at the time of such
reduction. The kilowatt-hour blocks of the energy charge and the
monthly minimum bill shall each be proportionately adjusted in the
ratio that the total number of hours of such curtailed service as
herein determined bears to the total number of hours in the billing
period involved.
(2) Demand or Capacity Charge and Minimum Annual Capacity Charge
Adjustment:
The total number of hours of curtailed service in any billing
period shall be determined by adding (1) the sum of the number of
hours of interrupted service to (2) the product of: the number of
hours of reduced service multiplied by the percentage of said
reduction below the lesser of (a) the contract rate of delivery for
firm power, or (b) the obligation of the United States to deliver
firm power and energy as established under the operating agreement
entered into pursuant to the Auxiliary Power Service article hereof,
or (c) the rate of delivery required by the Contractor at the time
of such reduction. The demand or capacity charge and the minimum
annual capacity charge shall each be proportionately adjusted in the
ratio that the total number of hours of such curtailed service as
herein determined bears to the total number of hours in the billing
period involved.
The Contractor shall make written claim, within thirty (30) days after
receiving the monthly bill for adjustment on account of any curtailment to
service as specified in subsections (1) and (2) of this article for
periods of one (1) hour or longer in duration each, alledged to have
occurred and which is not reflected in such bill. Failure to make such
written claim, within said thirty (30) day period, shall constitute a
waiver thereof. All curtailments to service, which are due to conditions
on the power system of the United States, shall be subject to the
provisions of this article and the Contractor shall be limited in its
remedy therefor to the relief granted by this article; Provided. That
withdrawal of power and energy under contract provisions shall not be
deemed curtailments to service.
THE FOLLOWING PROVISION IS APPLICABLE ONLY WHEN ELECTRIC SERVICE
INVOLVES MULTIPLE POINTS OF DELIVERY FROM BOTH DIRECT AND WHEELED POINTS:
GG. Multiple Points of Delivery Involving Direct and Wheeled Deliveries
The United States has provided line and substation capacity under
the terms of this contract for the purpose of delivering electric service
directly to the Contractor at specific points of delivery. It also has
agreed to absorb wheeling allowances and/or discounts up to a specified
maximum amount for deliveries of power over other system(s). In the event
the Contractor shifts any of its loads served hereunder from direct
delivery to wheeled delivery, the United States will not absorb the
wheeling costs on such shifted load until the unused capacity, as
determined solely by the contracting officer, available at the direct
delivery point(s) affected is fully utilized.
6
SALT RIVER PROJECT
RESOLUTION
WHEREAS, the Board of Directors of the Salt River Project Agricultural
Improvement and Power District (herein called "Salt River Project") has
determined that it is in Salt River Project's best interest to enter into
various contracts relating to the construction, operation and maintenance of the
proposed Navajo Project consisting of three 750 MW (nameplate rating) coal-fired
steam electric generating units (herein called "Navajo Generating Station"),
located on the Navajo Indian Reservation near Page, Arizona, and the related 500
KV transmission system (herein called "Navajo transmission system"), with
ownership interests in the Navajo Generating Station to be as follows:
Arizona Public Service Co. (Arizona) 14.0%
City of Los Angeles, Department of
Water and Power (Los Angeles) 21.2%
Nevada Power Company (Nevada) 11.3%
Salt River Project Agricultural
Improvement and Power District
(Salt River Project) 46.0%
Tucson Gas and Electric Company
(Tucson) 7.5%
all of said entities referred to herein as the "Co-Owners," and
WHEREAS, Salt River Project shall own 21.7% of the Navajo Generating Station
for its own use and benefit and shall own and hold the remaining 24.3% of its
ownership interest in the Navajo Generating Station for the use and benefit of
the United States, Department of Interior, Bureau of Reclamation for the United
States' use to provide power and energy for Central Arizona Project pumping (the
"United States" and the above listed companies being herein collectively called
"Participants"), and
WHEREAS, the following described Agreements have been reviewed on this day with
this Board and this Board has determined that it is in the best interest of Salt
River Project to enter into said Agreements to effectuate the construction,
operation and maintenance of the Navajo Project;
NOW, THEREFORE, BE IT HEREBY RESOLVED, That the Board of Directors of Salt River
Project has and does hereby approve the Navajo Project Participation Agreement
among the Participants, and has and does hereby empower and direct that the
President or Vice President, and the
SALT RIVER PROJECT
Secretary or Assistant Secretary, make, execute and deliver said
Participation Agreement for, and on behalf of, the Salt River Project with such
minor changes or omissions therein as management may make in the premises, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve the Indenture of Lease for Navajo Units 1, 2 and 3,
and has and does hereby empower and direct that the President or Vice President,
and the Secretary or Assistant Secretary, make, execute, acknowledge and deliver
said Indenture of Lease for Navajo Units 1, 2 and 3 for and on behalf of the
Salt River Project with such minor changes or omissions therein as management
may make in the premises, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve that certain Federal Rights of Way, granted in
conformity with the Act of February 15, 1901, between the Secretary of Interior
and the Co-Owners as Grantees, and does hereby authorize, empower and direct
that the President or Vice President, and the Secretary or Assistant Secretary,
make, execute, acknowledge and deliver said Federal Rights of Way for, and on
behalf of Salt River Project with such minor changes or omissions therein as
management may make in the premises, and this Board of Directors also
authorizes, empowers and directs its officers and management to make and file an
Application for Grant of Rights of Way under the Act of February 15, 1901, 31
Stat. 790, 43 U.S.C., Section 959, underlying any or all Project land rights,
and to take and perform all necessary acts in making and filing such
Application, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve that certain Federal Rights of Way and Easements,
granted in conformity of February 5, 1948, by and between the Secretary of
Interior and Salt River Project and the other Co-Owners as Grantees and does
hereby authorize, empower and direct that the President or Vice President, and
the Secretary or Assistant Secretary, make, execute, acknowledge and deliver
said Federal Rights of Way and Easements for, and on behalf of, the Salt River
Project with such minor changes and omissions therein as management may make in
the premises, and does hereby authorize, empower and direct its officers and
management to make and file an Application for the Grant of Rights of Way and
Easements under the Act of February 5, 1948, 62 Stat. 17, 25 U.S.C. Section 323,
underlying any or all Project land rights, and to take and perform all necessary
acts in making and filing such Application, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve the Memorandum of Agreement
SALT RIVER PROJECT
providing for execution of Navajo Station Coal Supply Agreement among it, the
other Co-Owners and Peabody Coal Company together with the Letter Agreement
relating thereto which sets forth additional understandings and agreements
concerning the Navajo Station Coal Supply Agreement, and has and does hereby
authorize, empower and direct that the President or Vice President, and the
Secretary or Assistant Secretary, make, execute, acknowledge and deliver said
Memorandum of Agreement and said Letter of Understanding for and on behalf of
the Salt River Project with such minor changes and omissions therein as
management may make in the premises, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve that certain Power Coordination Contract between the
Co-Owners and the United States and has and does hereby authorize, empower and
direct that the President or Vice President, and the Secretary or Assistant
Secretary, make, execute and deliver said Power Coordination Contract for and on
behalf of the Salt River Project with such minor changes and omissions therein
as management may make in the premises, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve the Principles of Inter connected Operation for
the Navajo Project between the Co-Owners, the United States and the Southern
California Edison Company (whether or not said Southern California Edison
Company is party thereto), and does hereby authorize, empower and direct that
the President or Vice President, and the Secretary or Assistant Secretary make,
execute and deliver said Principles of Interconnected Operation for and on
behalf of the Salt River Project with such minor changes and omissions therein
as management may make in the premises, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve that certain Contract for Interim Use of United
States Entitlement in the Navajo Project (herein called "Layoff Contract")
between it and the United States and does hereby authorize, empower and direct
that the President or Vice President, and the Secretary or Assistant Secretary,
make, execute and deliver said Layoff Contract for and on behalf of the Salt
River Project with such minor changes and omissions therein as management may
make in the premises, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve that certain Memorandum Transmission Agreement
between it, the other Participants, and the Southern California Edison Company,
and has and does hereby authorize, empower and direct that the President or Vice
President, and the Secretary or Assistant Secretary, make, execute and deliver
said
SALT RIVER PROJECT
Memorandum Transmission Agreement for and on behalf of the Salt River Project
with such minor changes and omissions therein as management may make in the
premises, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve that certain Agreement for Delivery of the United
States Power and Energy for the McCullough Substation to the Mead Substation
between it, the United States and the other Eldorado System Co-Owners (whether
or not such entities become parties thereto), and has and does hereby authorize,
empower and direct that the President or Vice President, and the Secretary or
Assistant Secretary, make, execute and deliver said Agreement for and on behalf
of the Salt River Project with such minor changes and omissions therein as
management may make in the premises, and
BE IT HEREBY FURTHER RESOLVED that the Board of Directors of Salt River Project
has and does hereby approve that certain Spinning Reserve pooling Agreement
between it, and the other Participants, excepting the City of Los Angeles,
Department of Water and Power (whether or not all such other Participants become
parties thereto), and has and does hereby authorize, empower and direct that the
President or Vice President, and the Secretary or Assistant Secretary, make,
execute and deliver said Spinning Reserve Fueling Agreement for and on behalf of
the Salt River Project with such minor changes and omissions therein as
management may make in the premises.
CERTIFICATE
I,F.E, Smith, the duly appointed, qualified and acting Secretary of the Salt
River Project Agricultural Improvement and Power District, HEREBY CERTIFY that
the foregoing is a true and complete copy of a resolution adopted by the Board
of Directors of said District at a special meeting thereof duly held on the 25th
day of August 1969, at which meeting a quorum was present and voted.
WITNESS my hand and seal of Salt River Project Agricultural Improvement and
Power District this 19th day of November 1969.
/s/ F. E. Smith
--------------------------
F. E. Smith, Secretary
CERTIFICATE
I, Samuel P. Cowley, certify that I am the Secretary of the Nevada power
Company, a corporation named herein; that Harry Allen who signed the above
contract on behalf of said corporation was then its President that said
contract was duly signed for and in behalf of said corporation by authority of
its governing body and is within the scope of its corporate powers.
/s/ Samuel P. Cowley
---------------------------
Samuel P. Cowley, Secretary
TUCSON GAS & ELECTRIC COMPANY
Certified Copy of Resolutions
Adopted by the Board of Directors
RESOLVED, that the proper officers of the Company be, and they
hereby are authorized to enter into a Participation Agreement between the United
States of America, Arizona Public Service Company, Department of Water and Power
of the City of Los Angeles, Nevada Power Company, Salt River Project
Agricultural Improvement and Power District and Tucson Gas & Electric Company
for the ownership of the Navajo Project wherein Tucson Gas & Electric Company
shall own an undivided 7-1/2% Interest in the Navajo Generating Station and
varying percentage interests in the transmission system. The Agreement shall be
substantially in the form of the draft filed with the Secretary of the Company
marked "Filed September 23, 1969 with the Secretary of Tucson Gas & Electric
Company", and be it
FURTHER RESOLVED, that the proper officers of the Company be, and
they hereby are further authorized to execute and enter into on behalf of the
Company the necessary Project Agreements contemplated by said Participation
Agreement, and such other documents reasonably required to implement said
Participation Agreement and Project Agreements.
* * * * * * * * * * * * * *
I, P. L. ABBOTT, Secretary of TUCSON GAS & ELECTRIC COMPANY
(herein after called the "Company"), DO HEREBY CERTIFY that the above and
foregoing is a true and complete copy of resolutions duly adopted by the Board
of Directors at the Regular Monthly Meeting held on the 23rd day of September,
1969, at which meeting a quorum was present and acted thereon; and
I DO FURTHER CERTIFY that said resolution is in full force and
effect on the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal
of the Company this 29th day of September, 1969.
/s/ P.L. Abbott
----------------------
Secretary
CERTIFICATE
I, GERALD J. GRIFFIN, certify that I am an Assistant Secretary of ARIZONA
PUBLIC SERVICE COMPANY, the corporation named herein; that M. C. TITUS, who
signed the above contract on behalf of said Corporation was then its Executive
Vice President; that said contract was duly signed for and in behalf of said
Corporation by authority of its governing body and is within the scope of its
corporate powers.
/s/ Gerald J. Griffin
-------------------------
Assistant Secretary
(SEAL)
RESOLUTION NO. 416
BE IT RESOLVED by the Board of Water and Power Commissioners of The
City of Los Angeles that the President and the Secretary of this Board be and
they are hereby authorized to execute, on behalf of this Board, certain
agreements relating to the construction, ownership, operation and maintenance of
facilities for the generation of electrical power and energy and related
facilities, including fuel supply, copies of which agreements are on file with
the Secretary of this Board and which are identified as follows, that is:
Agreement Title DWP Number
--------------- ----------
Navajo Project Participation Agreement 10334
Memorandum of Agreement Providing for
Execution of Navajo Station Coal
Supply Agreement 10335
Letter Agreement 10336
Application for Federal Rights-of-Way
and Easements 10337
Application and Grant of Rights-of-
Way and Easements (25 U.S.C. Section 323) 10338
United States, Department of the Interior,
Power Coordination Contract 10339
Interim Arrangement for Interconnected
Operations 10340
Contract with Department of Water and
Power of The City of Los Angeles for
Interim Sale of United States
Entitlement of Navajo Project 10341
Memorandum Transmission Agreement 10342
Victorville-Lugo Interconnection
Agreement 10343
Agreement Title (Continued) DWP Number
--------------- ----------
Indenture of Lease 10344
Letter Agreement 10350
I HEREBY CERTIFY that the foregoing is a full, true and correct copy
of a resolution adopted by the Board of Water and Power Commissioners of The
City of Los Angeles at its meeting held NOV 20 1969
/s/ Mary J. Born
---------------------
Secretary
ORDINANCE NO. 139,629
AN ORDINANCE APPROVING AGREEMENTS RELATING TO PARTICIPATION BY THE DEPARTMENT OF
WATER AND POWER IN THE NAVAJO PROJECT
THE PEOPLE OF THE CITY OF LOS ANGELES
DO ORDAIN AS FOLLOWS:
Section 1. That the Board of Water and Power Commissioners of The City of
Los Angeles be and it is hereby authorized in its discretion, to execute and
enter into the following agreements, substantially in the form of those which
are on file with the City Clerk and identified below, relating to the
transmission and use of electrical power and energy associated with the Navajo
Project:
AGREEMENT TITLE DWP NUMBER
Interim Arrangement for Interconnected Operations 10310
Contract with Department of Water and Power of The City of Los
Angeles for Interim Sale of United States Entitlement of Navajo Project 10341
Memorandum Transmission Agreement 10342
Victorville-Lugo Interconnection Agreement 10343
[ILLEGIBLE] Agreement 10350
Sec. 2. The City Clerk shall certify to the passage of this ordinance and
cause the same to be published in some daily newspaper printed and published in
the City of Los Angeles.
I hereby certify that the foregoing ordinance was introduced at the
meeting of the Council of the City of Los Angeles of November 10, 1969 and was
passed at its meeting of November 17, 1969.
REX E. LAYTON, City Clerk,
By M. B. Wilson, Deputy.
Approved November 18, 1969.
File No. 147173 Sup #1 SAM YORTY, Mayor.
(E54726) Nov 19 1t
CERTIFICATION
STATE OF CALIFORNIA, )
) ss.
COUNTY OF LOS ANGELES, )
I, REX E. LAYTON, City Clerk of the City of Los Angeles and ex-officio
Clerk of the City Council of the City of Los Angeles, do hereby certify and
attest the foregoing to be a full, true and correct copy of the original
Ordinance No. 139,629 of the City of Los Angeles, on file in my office, and that
I have carefully compared the same with the original.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed the Seal of the City of Los Angeles, this 19th
day of November, 1969
/s/ Rex E. Layton
-------------------------------------
City Clerk of the City of Los Angeles
By /s/ Authorized Signatory
------------------------------------
Deputy
Form Clerk 22-5M-11-68 (R)
ORDINANCE NO. 139,630
AN ORDINANCE APPROVING AGREEMENTS RELATING TO PARTICIPATION BY THE DEPARTMENT OF
WATER AND POWER IN THE NAVAJO PROJECT
THE PEOPLE OF THE CITY OF LOS ANGELES
DO ORDAIN AS FOLLOWS:
Section 1. That the Board of Water and Power Commissioners of The City of
Los Angeles be and it is hereby authorised in its directors, to execute
and enter into the following agreements, substantially in the form of those
which are on file with the City Clerk and identified below, relating to
the construction, ownership, operation and maintenance of facilities for
generation of electrical power and energy and related facilities, including
fuel supply:
AGREEMENT TITLE DWP NUMBER
Navajo Project Participation Agreement 10384
Memorandum of Agreement Providing for Execution of Navajo
Station Coal Supply Agreement
Letter Agreement
Application for Federal Rights-of-Way and Easements 10337
Grant of Federal Rights-of-Way and Easements 10338
United States Department of the Interior, Power
Coordination Contract 10339
Indenture of Lease 10344
Sec. 2. The City Clerk shall certify to the passage of this ordinance and
cause the same to be published in some daily newspaper printed and published in
the City of Los Angeles.
I hereby certify that the foregoing [ILLEGIBLE] was introduced at the
meeting of the Council of the City of Los Angeles of November 10, 1969
and was passed at its meeting of November 17, 1969.
REX E. LAYTON, City Clerk,
By M.B. Wilson, Deputy.
Approved November 18, 1969.
File No. [ILLEGIBLE] SAM YORTY Mayor.
(E54727) NOV 19 IT
CERTIFICATION
STATE OF CALIFORNIA, } ss.
COUNTY OF LOS ANGELES,
I, REX E. LAYTON, City Clerk of the City of Los Angeles and ex-officio
Clerk of the City Council of the City of Los Angeles, do hereby certify and
attest the foregoing to be a full, true and correct copy of the original
Ordinance No. 139,630 of the City of Los Angeles, on file in my office, and that
I have carefully compared the same with the original.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the Seal of the City of Los Angeles, this 19th day
of November, 1969
REX E. LAYTON
City Clerk of the City of Los Angeles
By /s/ Authorized Signatory
------------------------
Deputy
Form Clerk 22-5M-11-68 (R)
RESOLUTION OF THE BOARD OF DIRECTORS
OF SOUTHERN CALIFORNIA EDISON COMPANY
ADOPTED NOVEMBER 20, 1969
RE: RATIFICATION OF EXECUTION OF
CONTRACTS WITH THE UNITED
STATES DEPARTMENT OF INTERIOR,
BUREAU OF RECLAMATION, AND OTHER
PARTICIPANTS IN THE NAVAJO
PROJECT, CONCERNING THE NAVAJO
PROJECT AND RELATED MATTERS
WHEREAS, this corporation has executed a contract with the United
States of America, providing for the interim purchase of a portion of the United
States' entitlement to capacity and energy in the Navajo Project, which portion
shall amount to approximately 336 mw of capacity and associated energy from
Units 1, 2 and 3 of the Navajo Generating Station, and will provide for the
right to use part of the entitlement of the United States in the Navajo Project
transmission system for the purpose of delivering such portion of capacity and
associated energy from the Navajo Generating Station to this corporation's
points of delivery at Moenkopi Switchyard in Arizona, and the Eldorado
Substation in Nevada; and
WHEREAS, a copy of said contract, entitled Contract With Southern
California Edison Company For Interim Sale Of United States' Entitlement Of
Navajo Project and bearing the designation Contract No. 14-06-300-2135, has been
presented to this meeting; and
WHEREAS, this corporation has executed a contract with the United
States of America, Arizona Public Service Company, Department of water and power
of the City Los Angeles,
Nevada Power Company, Salt River Project Agricultural Improvement and Power
District, and Tucson Gas and Electric Company, providing certain principles
related to the interconnection of the Navajo Project transmission system with
the Edison-Arizona 500-kv transmission system at Moenkopi Switchyard, and for
the parallel operation of the Moenkopi-Eldorado 500 kv line and the proposed
Navajo-McCullough 500-kv line, and certain related matters, all of which
principles are to be incorporated in a more definitive and complete agreement to
be executed at a later time; and
WHEREAS, a copy of said contract, entitled Memorandum Transmission
Agreement between Participants in the Navajo Project and Southern California
Edison Company, dated September 30, 1969, and bearing the designation Contract
No. 14-06-30-2140, has been presented to this meeting, and
WHEREAS, this corporation has executed a letter agreement with
Arizona Public Service Company, Department of Water and Power of the City of Los
Angeles, Nevada Power Company, Salt River Project Agricultural Improvement and
Power District, Tucson Gas and Electric Company, and The United States of
America, adopting certain principles for the interconnected operations of the
respective electric systems of the parties, including establishment of
principles with respect to forecast capacity resources margin, spinning reserve
capacity, emergency service, interruptible load as a substitute for spinning
reserve capacity and system operations, all of which principles are to be
incorporated in a more definitive and complete
-2-
agreement to be executed at a later time; and
WHEREAS, a copy of said principles, entitled Principles of
Interconnected Operation For The Navajo Interconnection Agreement, September 30,
1969, together with a covering execution letter agreement entitled Interim
Arrangement For Interconnected Operations, dated September 30, 1969, and bearing
the designation Contract No. 14-06-300-2139, has been presented to this meeting
and;
WHEREAS, execution of said three documents has not been completed by
all the other parties thereto.
NOW, THEREFORE, BE IT RESOLVED that the execution and delivery of
the aforesaid three documents by and on behalf of this corporation is hereby
ratified, confirmed and approved;
BE IT FURTHER RESOLVED, that the Chairman of the Board, the
President, a Senior Vice President, a Vice President of this corporation, and
any of them, is authorized hereby to execute and deliver in the name of and on
behalf of this corporation, the definitive Navajo Interconnection Agreement and
the definitive Transmission Agreement hereinabove described.
BE IT FURTHER RESOLVED, that the Secretary of this corporation is
hereby directed to mark appropriately for Identification and to file with the
records of this corporation the aforesaid copies of said documents presented to
this meeting.
-3-
I, C. D. LESTER, Secretary of SOUTHERN CALIFORNIA EDISON COMPANY, do
hereby certify that the foregoing is a full, true, and correct copy of a
resolution of the Board of Directors of said corporation, adopted at a meeting
of said Board of Directors duly held on November 20, 1969.
WITNESS my hand and the seal of said corporation this 20th day of
November, 1969.
/s/ C.D.LESTER
----------------------------------
SECRETARY
SOUTHERN CALIFORNIA EDISON COMPANY
COORDINATING COMMITTEE AGREEMENT
No. 1
SUBJECT: All Risk Insurance for Navajo-Mohave SO2 Removal
Pilot Plant
The Coordinating Committee hereby directs the Navajo Generating Station Project
Manager not to maintain all risk insurance insofar as the Navajo-Mohave S02
Removal Research Pilot Plant is concerned.
Section 21.1 of the Navajo Project Participation Agreement, as amended, provides
that during the construction stage each Project Manager shall procure or cause
to be procured and maintain in force certain insurance coverages, including all
risk insurance.
The Generating Station Project Manager contemplates entering into an agreement
with Southern California Edison Company (Edison) , as "project manager" and
"operating agent" for the Mohave Project, pursuant to which Edison as "program
manager" will provide for the design, engineering, construction and testing of
an S02 removal pilot plant on behalf of the Navajo Project Participants and the
Mohave Project Participants.
The pilot plant, to be constructed at the Mohave Plant Site, will be included
within the existing Mohave Project insurance program. The applicable Mohave
Project policy providing the all risk insurance coverage referred to in Section
21.1 of the Participation Agreement, as amended, for damage to the pilot plant,
carries a deductible of
$200,000.00. Engineering and insurance personnel of the "program manager" have
concluded the total potential loss upon the occurrence of any single event, in
their opinion, as reflected in Attachment A hereto, does not exceed the Edison
physical damage insurance deductible of $200,000.00. Therefore, any dollars paid
toward premiums would be wasted as there is no foreseeable loss of that
magnitude.
Notwithstanding this decision all contractors of the "program manager"
performing work on the pilot plant will be required to maintain all risk
coverages for any portion of work to be performed by them on the pilot plant.
Approved as of the 31 day of September, 1971.
SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT
By /s/ Authorized Signatory
-------------------------------------
Coordinating Committee Representative
ARIZONA PUBLIC SERVICE COMPANY
By /s/ Authorized Signatory
-------------------------------------
Coordinating Committee Representative
TUCSON GAS & ELECTRIC COMPANY
By /s/ Authorized Signatory
-------------------------------------
Coordinating Committee Representative
DEPARTMENT OF WATER AND POWER
OF THE CITY OF LOS ANGELES
By /s/ Authorized Signatory
----------------------------------------
Coordinating Committee Representative
NEVADA POWER COMPANY
By /s/ Authorized Signatory
----------------------------------------
Coordinating Committee Representative
UNITED STATES OF AMERICA
By /s/ Authorized Signatory
----------------------------------------
Coordinating Committee Representative
AMENDMENT AND SUPPLEMENT #1
TO
NAVAJO PROJECT
PARTICIPATION AGREEMENT
1. PARTIES: The parties to this amendatory and supplemental agreement are:
THE UNITED STATES OF AMERICA, hereinafter referred to as the "United
States", acting through the Secretary of the Interior; ARIZONA PUBLIC
SERVICE COMPANY, an Arizona corporation, hereinafter referred to as
"Arizona"; DEPARTMENT OF WATER AND POWER OF THE CITY OF LOS ANGELES, a
department organized and existing under the Charter of the City of Los
Angeles, a municipal corporation of the State of California, hereinafter
referred to as "Los Angeles"; NEVADA POWER COMPANY, a Nevada corporation,
hereinafter referred to as "Nevada"; SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT, an agricultural improvement district
organized and existing under the laws of the State of Arizona, hereinafter
referred to as "Salt River Project"; and TUCSON GAS & ELECTRIC COMPANY, an
Arizona corporation, hereinafter referred to as "Tucson".
2. RECITALS: This amendatory and supplemental agreement is made with
reference to the following facts, among others:
2.1 By the Colorado River Basin Project Act (82 Stat. 885) the
Congress of the United States authorized the construction, operation and
maintenance of the Central Arizona Project. Pursuant to Section 303 of
said Act, the Secretary is authorized to enter into agreements with
- 1 -
non-Federal interests proposing to construct thermal generating
powerplants whereby the United States shall acquire the right to such
portions of their capacity, including delivery of power and energy over
appurtenant transmission facilities to mutually agreed upon delivery
points, as he determines is required in connection with the operation of
the Central Arizona Project.
2.2 The Secretary has determined that the acquisition of a right to
a portion of the capacity of the Navajo Project is the most feasible plan
for supplying the power requirements of the Central Arizona Project and
augmenting the Lower Colorado River Basin Development Fund.
2.3 As of September 30, 1969, the parties entered into a
Participation Agreement, to establish certain terms, covenants and
conditions relating to participation in the construction, operation and
maintenance of the Navajo Project in accordance with the provisions of the
Participation Agreement and the other Project Agreements.
2.4 The parties desire, by this Amendment and Supplement #1 to
Navajo Project Participation Agreement, to amend and supplement certain
terms, covenants and conditions in the Participation Agreement relating to
the Navajo Project.
3. AGREEMENT: In consideration of the mutual covenants herein, the parties
agree as follows:
4. DEFINITIONS: The following terms, when used herein, shall
- 2 -
have the meanings specified:
4.1 AMENDMENT AND SUPPLEMENT #1 TO NAVAJO PROJECT PARTICIPATION
AGREEMENT. This agreement.
5. Section 4 of the Participation Agreement is amended and supplemented by
the addition of the following definitions:
"4.25 RAIL LOADING SITE: The site for the conveyor termination and
rail loading facilities, related facilities and equipment and coal storage
as described on Exhibit 3 to the Navajo Plant Site lease."
"4.26 RAILROAD: The railroad described in Exhibit A-1 hereto."
6. Section 18 of the Participation Agreement is amended and supplemented by
the addition of the following section:
"18.7 The 11.3% undivided ownership interest of Nevada in the
Railroad may be transferred to Arizona by Nevada and subsequently
transferred to Nevada by Arizona, pursuant to any agreement between
Arizona and Nevada presently or hereafter existing, without the prior
written consent of any other Participant; provided, however, that in each
instance the transferee shall (i) notify each of the other Participants in
writing of such transfer, (ii) furnish to each Participant evidence of
such transfer, and (iii) assume and agree to fully perform and discharge
all of the obligations created by the Project Agreements which arise out
of said 11.3% undivided ownership interest in the Railroad. Appropriate
amendments to the Project Agreements will be adopted
- 3 -
recognizing any such transfer."
7. The Participation Agreement is supplemented by the addition of the
following section:
"49. COMPLIANCE WITH UPPER COLORADO RIVER BASIN COMPACT:
49.1 The Department of the Interior is the federal
department responsible for administering the terms of the
Water Service Contract dated January 17, 1969, Contract No.
14-06-400-5033. The Department of the Interior also has been
directed by P.L. 90-537 to comply with the terms of the
Colorado River Compact dated November 24, 1922 and the Upper
Colorado River Basin Compact dated October 11, 1948. In
compliance with that responsibility and those directives, the
Secretary of the Interior hereby agrees to take any and all
actions within the power and authority of the Department of
the Interior which are necessary and required to prevent total
depletions chargeable to the State of Arizona under the Upper
Colorado River Basin Compact resulting from consumptive use of
water from the Upper Colorado River System in the State of
Arizona as measured at Lee Ferry in the manner provided for in
Article VI of the Upper Colorado River Basin Compact from
exceeding the 50,000 acre feet apportioned to the State of
Arizona by the Upper
- 4 -
Colorado River Basin Compact.
The Secretary of the Interior further agrees to make the
reports required by Section 601 (b) (1) of P.L. 90-537 as
they pertain to Arizona's Upper Basin uses annually rather
than every five years. Within fifteen days following the
completion of said reports, the Secretary of the Interior
shall furnish copies of such reports to the Co-Tenants, the
Navajo Tribe, each of the Upper Basin States, and the Upper
Colorado River Commission.
It is the intention of the parties to this contract that
each of the Upper Basin States shall be a third party
beneficiary of the terms and conditions of this Section 49."
8. Exhibit A-1 to the Participation Agreement is amended and supplemented by
the addition of the following:
"VIII. Railroad right-of-way and railroad approximately 80 miles in
length extending from the Rail Loading Site into the Navajo Plant
Site, engines, coal cars, related facilities and equipment.
9. Except as modified by this Amendment and Supplement #1 to Navajo Project
Participation Agreement, the Navajo Project Participation Agreement dated
as of September 30, 1969, shall remain in full force and effect in
accordance with its terms.
- 5 -
IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Supplement #1 to Navajo Project Participation Agreement to be executed as of the
16th day of January, 1970.
UNITED STATES OF AMERICA
By /s/ Authorized Signatory
----------------------------------------
ARIZONA PUBLIC SERVICE COMPANY
By /s/ Keith L. Turkey
----------------------------------------
Executive Vice President
[SEAL]
ATTEST:
/s/ Authorized Signatory
- -------------------------
Assistant Secretary
DEPARTMENT OF WATER AND POWER
OF THE CITY OF LOS ANGELES
by
BOARD OF WATER AND POWER COMMISSIONERS
[SEAL]
By /s/ Mary J. Born By /s/ John W. Luhring
---------------------- ---------------------------------------
SECRETARY PRESIDENT
NEVADA POWER COMPANY
By /s/ Harry Allen
----------------------------------------
ATTEST:
/s/ Authorized Signatory
- -------------------------
SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT
By /s/ N. Clifford Dobson
----------------------------------------
President
[SEAL]
ATTEST AND COUNTERSIGN:
/s/ F.E. Smith
- -----------------------
Secretary
[STAMP] [STAMP]
- 6 -
TUCSON GAS & ELECTRIC COMPANY
By /s/ H. R. Catlin
----------------------------------------
SENIOR VICE PRESIDENT
[SEAL]
ATTEST:
/s/ Authorized Signatory
- ----------------------
ASSISTANT SECRETARY
)
)ss
)
On this the 9th day of July, 1970, before me, the undersigned officer,
personally appeared James R. Smith, of the United States of America, known to
me to be the person described in the foregoing instrument, and acknowledged
that he executed the same in the capacity therein stated and for the purposes
therein contained.
In witness whereof I hereunto set my hand and official seal.
[SEAL]
My Commission expires /s/ Harold L. Carlson
November 14, 1973 ----------------------------------------
Notary Public
State of Arizona )
)ss
County of Maricopa )
On this the 11th day of June, 1970, before me, the undersigned officer,
personally appeared KEITH L TURLEY, who acknowledged himself to be the Executive
Vice President of ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation, and
that he, as such Executive Vice President, being authorized so to do, executed
the foregoing instrument for the purposes therein contained, by signing the name
of the corporation by himself as
- 7 -
Executive Vice President.
In witness whereof I hereunto set my hand and official seal
[SEAL]
/s/ Authorized Signatory
-----------------------------------
Notary Public
My commission expires:
March 30, 1973
State of California )
) ss
County of Los Angeles )
On this, the 20 day of August, 1970, before me, the undersigned officer,
personally appeared JOHN W. LUHRING and Mary J. Born, the PRESIDENT and
SECRETARY, respectively, Board of Water & Power Commissioners of the DEPARTMENT
OF WATER AND POWER OF THE CITY OF LOS ANGELES, a department organized and
existing under the Charter of the City of Los Angeles, a municipal corporation
of the State of California, known to me to be the persons described in the
foregoing instrument, and acknowledged that they executed the same in the
capacity therein stated and for the purposes therein contained.
In witness whereof I hereunto set my hand and official seal.
/s/ Linda L. Newman
----------------------------------------
Notary Public
My commission expires: [STAMP]
- ---------------------------
- 8 -
State of Nevada )
) ss
County of Clark )
On this the 12th day of June, 1970, before me, the undersigned officer,
personally appeared Harry Allen, known to me to be the President of NEVADA POWER
COMPANY, a Nevada corporation, and that he, as such President, being authorized
so to do, executed the foregoing instrument for the purposes therein contained,
by signing the name of the corporation by himself as President.
In witness whereof, I hereunto set my hand and official seal.
MYRTICE L. CARROLL
/s/ MYRTICE L. CARROLL
----------------------------------------
Notary Public
My commission expires: [STAMP]
______________________
State of Arizona )
)ss
County of Maricopa )
On this the 11th day of June, 1970, before me, the undersigned officer,
personally appeared N. CLIFFORD DOBSON and F.E. SMITH, The PRESIDENT and
SECRETARY, respectively, of SALT RIVER PROJECT. AGRICULTURAL IMPROVEMENT AND
POWER DISTRICT, an Arizona agricultural improvement district, known to me to be
the persons described in the foregoing instrument, and acknowledged that
- 9 -
they executed the same in the capacity therein stated and for the purposes
therein contained.
In witness whereof I hereunto set my hand and official seal.
/s/ [ILLEGIBLE]
------------------------------------------
Notary Public
My commission expires:
My Commission Expires May 3, 1971
State of Arizona )
)ss
County of Pima )
On this the 11th day of June, 1970, before me the undersigned officer,
personally appeared H. R. Catlin who acknowledged himself to be the SENIOR VICE
PRESIDENT of TUCSON GAS & ELECTRIC COMPANY, an Arizona corporation, and that he,
as such SENIOR VICE PRESIDENT, being authorized so to do, executed the
foregoing instrument for the purposes therein contained, by signing the name of
the corporation by himself as SENIOR VICE PRESIDENT.
/s/ Diane Howland
------------------------------------------
Notary Public
[SEAL]
My commission expires:
My Commission Expires Dec. 8, 1972
- 10 -
CERTIFIED COPY OF RESOLUTION
I, GERALD J. GRIFFIN, Assistant Secretary of ARIZONA PUBLIC SERVICE
COMPANY, an Arizona corporation, HEREBY CERTIFY that, at a meeting of the Board
of Directors of said Company, duly convened and held on August 21, 1969, at
which a quorum was present and acting throughout, the following resolution was
adopted and is now in full force and effect:
RESOLVED, that the Board of Directors approves and ratifies the
action of the officers in negotiating and carrying forward the proposal
for the participation by the Company, along with others, in the so-called
Navajo Project, involving the construction near Page, Arizona, of three
generating units (presently estimated at 750 MW nameplate), with ownership
being held as tenants in common in the following respective undivided
interests:
Arizona Public Service Company 14.0%
Tucson Gas & Electric Company 7.5%
City of Los Angeles 21.2%
Nevada Power Company 11.3%
Salt River Project Agricultural Improvement
and Power District
(For ITSELF) 21.7%
(As Agent for U.S.B.R.) 24.3%
the said Project to include certain transmission facilities to be located
in Arizona, with APS to be the Project Manager and Operating Agent for
said facilities, which are to be owned by APS and others as joint tenants
in various percentages related to projected use, these facilities
including a 500 kv line from the switchyard of the Navajo Plant near Page
to the Moenkopi Switching Station and from there to the Westwing
switchyard year Phoenix, and with another 500 kv line extending directly
from the Navajo switchyard to Westwing, together with various related
interconnections and switching facilities; and
FURTHER RESOLVED, that in connection with the Navajo Project, the
appropriate officers of the Company be, and they are hereby authorized to
negotiate and to execute and effectuate the necessary instruments and
agreements, including among others, the following:
(1) Participation Agreement
(2) Coordination Agreement
(3) Interconnection Agreement
(4) Plant Site Lease
(5) Fuel Supply and Transportation Agreement
(6) Co-Tenancy Agreement
(7) Moenkopi Agreement
(8) Amendment to Navajo Wholesale Power Agreement
(9) Plant Construction Agreement
(10) Plant Operating Agreement
(11) Transmission Construction Agreement
(12) Transmission Operating Agreement
(13) Applications for Various Rights-of-Way and Easements
(14) Layoff Agreement
and
FURTHER RESOLVED, that the appropriate officers of the Company are
authorized to take such actions and to execute such further agreements,
instruments, applications, certificates, contracts or other documents as
may be necessary or appropriate in connection with the foregoing to
complete and effectuate the Company's proposed participation in the Navajo
Project.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of said
corporation this 26th day of August, 1970.
/s/ Gerald J. Griffin
------------------------------------------
Assistant Secretary
-2-
RESOLUTION NO. 132
BE IT RESOLVED that upon approval by ordinance by the City Council of The
City of Los Angeles of the Amendment and Supplement #1 to Navajo Project
Participation Agreement (DWP No. 10334), the President or Vice President of the
Board, or the General Manager and Chief Engineer or the Assistant General
Manager and Chief Engineer of the Department of Water and Power, and the
Secretary or Assistant Secretary of the Board be and they are hereby authorized
and directed to execute said Amendment and Supplement #1 to Navajo Project
Participation Agreement (DWP No. 10334) on behalf of this Department upon
publication of the Ordinance.
I HEREBY CERTIFY that the foregoing is a full, true and correct copy of a
resolution adopted by the Board of Water and Power Commissioners of The City of
Los Angeles at its meeting held Aug 20 1970
/s/ Mary J. Born
----------------
Secretary
ORDINANCE NO. 119,849
CERTIFICATION
STATE OF CALIFORNIA,
} ss.
COUNTY OF LOS ANGELES,
I, REX E. LAYTON, City Clerk of the City of Los Angeles and ex-officio
Clerk of the City Council of the City of Los Angeles, do hereby certify and
attest the foregoing to be a full, true and correct copy of the original
Ordinance No. 140,840, passed by the City Council of Los Angeles at its meeting
of August 18, 1970, on file in my office, and that I have carefully compared the
same with the original.
In Witness Whereof, I have hereunto set my hand and
affixed the Seal of the City of Los Angles, this 20th
day of August, 1970
/s/ REX E. LAYTON
City clerk or the City of Los Angeles
/s/ Lee C. Gable
By -------------------------------------
Deputy
CERTIFICATION
I, the undersigned, being the duly elected Secretary of Nevada Power
Company, certify and declare that the following are true and correct copies of
resolutions adopted by the Board of Directors at its meeting held September 19,
1969 and by the Executive Committee at its meeting held October 23, 1969,
respectively:
RESOLVED: That the Executive Committee shall have the authority to
authorize the signing of any and all contracts necessary to proceed with
the Company's participation in the Navajo Project.
RESOLVED: That the officers of the Company are hereby authorized to sign
all contracts necessary to proceed with the Company's proposed
participation in the Navajo Project, to take the necessary action to
qualify to do business in the State of Arizona and to take any other steps
necessary or incidental thereto.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate
seal of the corporation this 26th day of August, 1970.
/s/ Samuel P. Cowley
--------------------------------
Samuel P. Cowley, Secretary
[SEAL]
RESOLUTION
WHEREAS, the Salt River Project Agricultural Improvement and Power
District (Salt River Project) entered into a Participation Agreement dated
September 30, 1969, to construct the Navajo Generating Project, and
WHEREAS, it is in the interest of the Salt River Project to amend and
supplement said Participation Agreement to include necessary conditions
for the efficient and successful construction and operation of said Navajo
Project through an Amendment and Supplement No. 1;
NOW, THEREFORE, BE IT RESOLVED, That this Board hereby approves, ratifies
and confirms entering into such Amendment and Supplement No. 1 and hereby
directs, empowers, ratifies and confirms the execution and delivery of
such document on behalf of the Salt River Project Agricultural Improvement
and Power District by its President or Vice President and Secretary or
Assistant Secretary.
CERTIFICATE
I, F. E. Smith, the duly appointed, qualified and acting Secretary of the
Salt River Project Agricultural Improvement and Power District, HEREBY
CERTIFY that the foregoing is a true and complete copy of a resolution
adopted by the Board of Directors Of said District at a meeting thereof
duly held on the 6th day of July 1970, at which meeting a quorum was
present and voted.
WITNESS my hand and seal of Salt River Project Agricultural Improvement
and Power District this 26th day of August 1970.
/s/ F.E. Smith
----------------------
F. E. Smith, Secretary
TUCSON GAS & ELECTRIC COMPANY
Certified Copy of Resolutions
Adopted by the Board of Directors
RESOLVED, that the proper officers of the Company be, and they hereby are
authorized to enter into a Participation Agreement between the United States of
America, Arizona Public Service Company, Department of Water and Power of the
City of Los Angeles, Nevada Power Company, Salt River Project Agricultural
Improvement and Power District and Tucson Gas & Electric Company for the
ownership of the Navajo Project wherein Tucson Gas & Electric Company shall own
an undivided 7-1/2% interest in the Navajo Generating Station and varying
percentage interests in the transmission system. The Agreement shall be
substantially in the form of the draft filed with the Secretary of the Company
marked "Filed September 23, 1969 with the Secretary of Tucson Gas & Electric
Company, and be it
FURTHER RESOLVED, that the proper officers of the Company be, and they
hereby are further authorized to execute and enter into on behalf of the Company
the necessary Project Agreements contemplated by said Participation Agreement,
and such other documents reasonably required to implement said Participation
Agreement and Project Agreements.
* * * * * * * * * * * * *
I, P. L. ABBOTT, Secretary of TUCSON GAS & ELECTRIC COMPANY (hereinafter
called the "Company"), DO HEREBY CERTIFY that the above and foregoing is a true
and complete copy of resolutions duly adopted by the Board of Directors at the
Regular Monthly Meeting held on the 23rd day of September, 1969, at which
meeting a quorum was present and acted thereon; and
I DO FURTHER CERTIFY that said resolution is in full force and effect on
the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of
the Company this 20th day of August, 1970.
/s/ Authorized Signatory
------------------------
Secretary