Exhibit 10.4
SECOND AMENDMENT AGREEMENT
This Second Amendment Agreement is made this ______ day of April, 1999,
by and between Grays Ferry Cogeneration Partnership, a partnership
("SELLER"), and PECO Energy Company ("PECO ENERGY") (collectively, the
"PARTIES").
BACKGROUND
SELLER and PECO ENERGY are parties to an Agreement for Purchase of
Electric Output dated July 28, 1992 ("Original Agreement"), pursuant to which
SELLER agreed to sell, and PECO ENERGY agreed to purchase, the NET ELECTRIC
OUTPUT to be generated by SELLER from a cogeneration facility ("FACILITY") to
be constructed by SELLER.
By an Amendment Agreement signed January 31, 1994, SELLER and PECO
ENERGY amended the Original Agreement to reflect SELLER's desire to construct
the FACILITY in two phases. Thus, the Original Agreement was substituted with
(1) an Agreement for Purchase of Electric Output (Phase I) from SELLER's
cogeneration FACILITY up to 31 megawatts, and (2) an Agreement for Purchase of
Electric Output (Phase II) from SELLER's cogeneration FACILITY up to 119
megawatts ("Revised Agreements").
In addition, SELLER and PECO ENERGY entered into two Contingent
Capacity Purchase Addendums to the Agreements for Purchase of Electric Output
(for Phase I and Phase II) dated as of September 17, 1993 ("Capacity
Addendums"). Under these Capacity Addendums, SELLER agreed to sell, and PECO
ENERGY agreed to purchase, electric capacity from the 31 megawatt and 119
megawatt FACILITIES under certain circumstances.
In early 1998, a dispute arose between the PARTIES concerning the
payments to be made by PECO ENERGY under the Revised Agreements and the
Capacity Addendums. A lawsuit was filed in the Philadelphia Court of Common
Pleas at April Term, 1998 No. 544 against PECO ENERGY and Adwin (Schuylkill)
Cogeneration, Inc. by SELLER and the following entities: Trigen-Schuylkill
Cogeneration, Inc. and NRGG (Schuylkill) Cogeneration, Inc., two of the
partners of SELLER, and Trigen-Philadelphia Energy Corporation (the "Grays
Ferry action"). The Chase Manhattan Bank ("CHASE") and Westinghouse Power
Generation, a Division of CBS Corporation ("WESTINGHOUSE"), provided
financing to SELLER for construction of the FACILITY. CHASE intervened as a
plaintiff in the Grays Ferry action, and WESTINGHOUSE filed a separate action
against PECO ENERGY at May Term, 1998 No. 3454, which was consolidated with
the Grays Ferry action (the consolidated actions are referred to as "the
LITIGATION").
The PARTIES have now reached an amicable resolution of their disputes
and have entered into an agreement to settle the LITIGATION, as provided in
the Final Settlement Decree and Order. As a term of the settlement of the
LITIGATION, the PARTIES have agreed to amend the Revised Agreements and
Capacity Addendums as follows and CHASE and WESTINGHOUSE have consented to
the PARTIES' amendment of the Revised Agreements and Capacity Addendums.
All capitalized terms not defined herein shall have the meanings
ascribed to them in the Revised Agreements and the Capacity Addendums
NOW, THEREFORE, in consideration of the above, and intending to be
legally bound hereby, the PARTIES agree that the Revised Agreements and
Capacity Addendums are hereby amended as follows:
1. Section 4.1 AMOUNT PURCHASED of the Agreement for Purchase of
Electric Output (Phase I) is deleted in its entirety and replaced
with the following language:
4.1 AMOUNT PURCHASED. Commencing on the DATE OF INITIAL
OPERATION, and thereafter during the term of the AGREEMENT,
SELLER shall sell and deliver to PECO ENERGY exclusively, and
PECO ENERGY shall purchase and accept delivery of, the
PROJECT's NET ELECTRIC OUTPUT. Subject to Section 3.1
AVAILABILITY of the Capacity Addendum, as amended, PECO ENERGY
has the exclusive right to purchase all of the NET ELECTRIC
OUTPUT of the FACILITY throughout the term of this AGREEMENT;
provided, however, that PECO ENERGY shall not be required to
purchase or accept delivery of NET ELECTRIC OUTPUT from the
PROJECT in excess of the lesser of (a) 31 megawatts or (b) the
amount of electric output for which the FERC has certified the
FACILITY as a QUALIFYING FACILITY. SELLER shall notify the
person designated by PECO ENERGY by 10:00 a.m. at least one
business day prior to delivering NET ELECTRIC OUTPUT in excess
of 150 megawatts per hour (31 megawatts per hour per Phase I,
119 megawatts per hour per Phase II), and PECO ENERGY will
purchase and accept such NET ELECTRIC OUTPUT from SELLER
unless PECO ENERGY notifies SELLER by 12:00 p.m. noon at least
one business day prior to delivery that it will not purchase
and accept such NET ELECTRIC OUTPUT, in which case SELLER
shall have the right to sell such NET ELECTRIC OUTPUT in
excess of 150 megawatts per hour to third parties. Should PECO
ENERGY elect to accept NET ELECTRIC OUTPUT in excess of 150
megawatts per hour, SELLER has no obligation to provide such
excess electric output in the amount identified during each
hour of the period for which PECO ENERGY has agreed to accept
the excess energy.
Section 4.1 AMOUNT PURCHASED of the Agreement for Purchase of
Electric Output (Phase II) is deleted in its entirety and replaced
with the following language:
4.1 AMOUNT PURCHASED. Commencing on the DATE OF INITIAL
OPERATION, and thereafter during the term of the AGREEMENT,
SELLER shall sell and deliver to PECO ENERGY exclusively, and
PECO ENERGY shall purchase and accept delivery of, the
PROJECT's NET ELECTRIC OUTPUT. Subject to Section 3.1
AVAILABILITY of the Capacity
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Addendum, as amended, PECO ENERGY has the exclusive right to
purchase all of the NET ELECTRIC OUTPUT of the FACILITY
throughout the term of this AGREEMENT; provided, however, that
PECO ENERGY shall not be required to purchase or accept
delivery of NET ELECTRIC OUTPUT from the PROJECT in excess of
the lesser of (a) 119 megawatts or (b) the amount of electric
output for which the FERC has certified the FACILITY as a
QUALIFYING FACILITY. SELLER shall notify the person designated
by PECO ENERGY by 10:00 a.m. at least one business day prior
to delivering NET ELECTRIC OUTPUT in excess of 150 megawatts
per hour (31 megawatts per hour per Phase I, 119 megawatts
per hour per Phase II), and PECO ENERGY will purchase and
accept such NET ELECTRIC OUTPUT from SELLER unless PECO ENERGY
notifies SELLER by 12:00 p.m. noon at least one business day
prior to delivery that it will not purchase and accept such
NET ELECTRIC OUTPUT, in which case SELLER shall have the right
to sell such NET ELECTRIC OUTPUT in excess of 150 megawatts
per hour to third parties. Should PECO ENERGY elect to accept
NET ELECTRIC OUTPUT in excess of 150 megawatts per hour,
SELLER has no obligation to provide such excess electric
output in the amount identified during each hour of the period
for which PECO ENERGY has agreed to accept the excess energy.
2. Section 4.3(c) of both Revised Agreements is deleted in its
entirety and replaced with the following language:
"(c) Commencing after the FINAL PROJECTION DATE of December
31, 2000 and through December 31, 2004, the Output Purchase
Payment shall be ninety-eight percent (98%) of the PJM VALUE."
A new Section 4.3(d) is added to both Revised Agreements after the
revised Section 4.3(c) as follows:
"(d) Commencing on January 1, 2005 and through December 31,
2017, the remaining term of the AGREEMENT, the Output Purchase
Payment shall be eighty-seven percent (87%) of the PJM VALUE."
3. A new Section 4.3(e) is added to both Revised Agreements after the
new Section 4.3(d) as follows:
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"(e) Notwithstanding the other provisions of this Section,
payment for NET ELECTRIC OUTPUT in excess of 150 megawatts per
hour from the combined Phase I and Phase II FACILITY shall be at
the PJM VALUE, unless SELLER fails to provide PECO ENERGY with
the notice required by Section 4.1 in which case payment for
NET ELECTRIC OUTPUT in excess of 150 megawatts per hour shall
be ninety-eight percent (98%) of the PJM VALUE through
December 31, 2004, and eighty-seven percent (87%) of the
PJM VALUE through December 31, 2017."
4. The following language is added to the end of Section 3.1
AVAILABILITY of both of the Capacity Addendums:
"SELLER shall be entitled to sell to third parties any
capacity from the FACILITY in excess of the NOMINATED
CAPACITY of 150 megawatts."
5. Line 10 of Section 6.9 DISPATCH of both Capacity Addendums is
revised as follows:
"twenty (20)" shall be deleted and replaced with "fifty (50)", so
that the third sentence of Section 6.9 DISPATCH as revised,
reads in its entirety: "The scheduling of DISPATCH PERIODS shall
be at the sole discretion of PECO, except that (A) a DISPATCH
PERIOD shall not exceed sixteen (16) hours in duration and (B)
PECO shall not schedule more than fifty (50) DISPATCH PERIODS
in a CALENDAR YEAR."
6. Other than the amendments stated above, the Revised Agreements and
the Capacity Addendums shall remain unchanged.
7. This Second Amendment Agreement may be executed in counterparts
each of which shall constitute an original and all of which
together shall constitute one Agreement.
This Second Amendment Agreement shall become effective upon its
execution by authorized representatives of the PARTIES, CHASE and WESTINGHOUSE,
and upon the entry of the Final Settlement Decree and Order by the Court in
the LITIGATION.
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IN WITNESS WHEREOF the PARTIES have caused this Second Amendment
Agreement to be executed as of the day and year first above written.
PECO ENERGY COMPANY
Attest: /s/ [ILLEGIBLE] By: /s/ Michael J. Egan
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Secretary MICHAEL J. EGAN, SENIOR VICE
PRESIDENT-FINANCE AND CHIEF
FINANCIAL OFFICER
GRAYS FERRY COGENERATION
PARTNERSHIP
By Trigen-Schuylkill Cogeneration,
Inc., its Managing General Partner
Attest: By: /s/ [ILLEGIBLE]
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Secretary President
CONSENTED TO:
THE CHASE MANHATTAN BANK
Attest: /s/ Deborah [ILLEGIBLE] By: /s/ Cathryn A. Greene 4/27/99
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Assistant Treasurer Cathryn A. Greene
CONSENTED TO:
WESTINGHOUSE POWER GENERATION
Attest: By:
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Secretary
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