CONFIDENTIAL Power Purchase Tolling Agreement
Table Of Contents (Continued)
Section / PagePOWER PURCHASE [TOLLING] AGREEMENT
between
SOUTHERN CALIFORNIA EDISON COMPANY
and
[Seller]
[August 14, 2006]
7/27/2006
- iv -
Power Purchase Tolling Agreement
Table Of Contents
Section / PageRECITALS 1
AGREEMENT 1
ARTICLE ONE - Purchase and Sale of Product 2
Section 1.01 Product Type 2
Section 1.02 Purchase and Sale of Product 2
Section 1.03 Generating Units 3
Section 1.04 Delivery Points 4
ARTICLE TWO - TERM; CONDITIONS PRECEDENT AND DELIVERY PERIOD 4
Section 2.01 Term 4
Section 2.02 Conditions Precedent 4
Section 2.03 Expected Initial Delivery Date 5
Section 2.04 Delivery Period 5
Section 2.05 Early Initial Delivery Date 6
Section 2.06 Delayed Initial Delivery Date 7
Section 2.07 No Liability of SCE 7
ARTICLE THREE - EVENTS OF DEFAULT; REMEDIES; TERMINATION 7
Section 3.01 Events of Default 7
Section 3.02 Seller Events of Default 8
Section 3.03 Early Termination Date 10
Section 3.04 Calculation of Termination Payment 11
Section 3.05 Notice of Payment of Termination Payment 14
Section 3.06 Disputes Regarding Termination Payment 14
Section 3.07 Setoff 15
Section 3.08 Suspension of Performance 15
Section 3.09 Limitation of Seller’s Ability to Make or Agree to Third Party Sales from the Project/Generating Units after Early Termination Date 15
Section 3.10 Effect of Termination 15
ARTICLE FOUR - TRANSMISSION 15
Section 4.01 Interconnection Studies 15
Section 4.02 Acknowledgment 16
ARTICLE FIVE - DESIGN AND CONSTRUCTION OF GENERATING UNITS 16
Section 5.01 Seller’s Obligations 16
Section 5.02 Design Review 17
Section 5.03 EPC Contractor 17
ARTICLE SIX - CONSTRUCTION PERIOD AND MILESTONES 17
Section 6.01 Milestone Schedule 17
Section 6.02 Provision of Information 18
Section 6.03 Inspection Rights 18
ARTICLE SEVEN - COMMISSIONING AND TESTING 19
Section 7.01 Testing Costs 19
Section 7.02 Commercial Operation Test 19
Section 7.03 Contract Capacity & Ancillary Services Testing 20
ARTICLE EIGHT - SELLER’S OPERATION, MAINTENANCE AND REPAIR OBLIGATIONS 20
Section 8.01 Seller’s Operation Obligations 20
Section 8.02 Seller’s Maintenance and Repair Obligations 21
ARTICLE NINE - CONTRACT CAPACITY, ASSOCIATED ENERGY AND ANCILLARY SERVICES [Standard Product] 23
Section 9.01 Compensation 23
Section 9.02 Monthly Capacity Payment 23
Section 9.04 Pro Rata Capacity Payments 23
Section 9.05 Variable O&M Charge 23
Section 9.06 Start-Up Charge 23
ARTICLE NINE - CONTRACT CAPACITY AND ASSOCIATED ENERGY [QF Product] 24
Section 9.01 Compensation 24
Section 9.02 Monthly Capacity Payment 24
Section 9.04 Pro Rata Capacity Payments 24
Section 9.05 Monthly Energy Payments 24
ARTICLE TEN - ADJUSTMENTS TO CAPACITY PAYMENT FOR UNAVAILABILITY [and HEAT RATE] 24
Section 10.01 Availability 25
Section 10.02 Other Events of Unavailability 26
Section 10.03 Exchange Quotation Price 26
Section 10.04 Heat Rate Adjustment Payment 29
Section 10.05 Gas Index Restructuring 30
ARTICLE ELEVEN - PAYMENT AND BILLING 31
Section 11.01 Billing Period 31
Section 11.02 Timeliness of Payment 31
Section 11.03 Disputes and Adjustments of Invoices 31
Section 11.04 Netting of Payments 32
Section 11.05 Payment Obligation Absent Netting 32
ARTICLE TWELVE - Mark-to-Market Calculation 32
Section 12.01 Mark-to-Market 32
ARTICLE THIRTEEN - CREDIT AND COLLATERAL 34
Section 13.01 Financial Information 34
Section 13.02 Seller’s Credit Requirements 35
Section 13.03 Administration of Performance Assurance 38
Section 13.04 Disputed Calculations 40
Section 13.05 First Priority Security Interest 41
Section 13.06 Subordinated Security Interests and Mortgage 41
ARTICLE FOURTEEN - COLLATERAL ASSIGNMENT 43
Section 14.01 Consent to Collateral Assignment 43
ARTICLE FIFTEEN - GOVERNMENTAL AND ENVIRONMENTAL CHARGES 45
Section 15.01 Governmental Charges 45
Section 15.02 Compliance with Laws and Indemnification 45
Section 15.03 Environmental Costs and Indemnification 45
Section 15.04 Greenhouse Gas Emissions Tax 45
ARTICLE SIXTEEN - FUEL MANAGER [Standard Product] 46
Section 16.01 SCE as Authorized Fuel Manager 46
Section 16.02 Transportation Contracts 46
Section 16.03 Contracted Marketer 47
Section 16.04 Natural Gas Imbalances on SoCalGas Transportation Contract 47
Section 16.05 Manner of Transporting Natural Gas 47
Section 16.06 Gas Delivery Charge 47
Section 16.07 Gas Transporter Charges and Penalties; Reimbursement 48
Section 16.08 Changes to Tariff 48
Section 16.09 Seller’s Gas Events 48
Section 16.10 Imbalance Penalties Allocation 49
Section 16.11 Shared Access and Meter Data 49
ARTICLE SIXTEEN - FUEL MANAGER [QF Product] 50
ARTICLE SEVENTEEN – TOLLING [Standard Product] 50
Section 17.01 Tolling 50
Section 17.02 Title and Risk of Loss 50
ARTICLE SEVENTEEN – TOLLING [QF Product] 50
ARTICLE EIGHTEEN - CAISO AND NON-SCE DISPATCHES [Standard Product] 50
Section 18.01 CAISO Dispatch 51
Section 18.02 Non-SCE Dispatch 51
ARTICLE EIGHTEEN – CURTAILMENT AND DISPATCHES [QF Product] 51
Section 18.01 CAISO and SCE Curtailment 51
Section 18.02 Non-Permitted Dispatch 52
ARTICLE NINETEEN - SCHEDULING COORDINATOR 52
Section 19.01 SCE Scheduling Coordinator 52
Section 19.02 Notices 52
Section 19.03 CAISO Costs and Revenues 52
Section 19.04 Scheduling and Delivery Deviation Charge 52
Section 19.05 CAISO Uninstructed Deviation Penalty 53
Section 19.06 Calculation of SDD Administrative Charge 53
Section 19.07 CAISO Sanctions 53
Section 19.08 Terminating SCE’s Designation as Scheduling Coordinator 54
ARTICLE TWENTY – DISPATCH NOTICES AND OPERATING RESTRICTIONS 54
Section 20.02 Dispatch Notices 54
Section 20.03 Start-Up Notices 55
Section 20.04 Operating Restrictions 55
Section 20.05 Daily Operating Report 55
Section 20.06 Writing Requirements 55
Section 20.07 Communication Protocols 55
ARTICLE TWENTY-ONE - METERING, COMMUNICATIONS, and TELEMETRY 56
Section 21.01 SCE Access 56
Section 21.02 Control Logic 56
Section 21.03 Delivery of Data 56
Section 21.04 Satellite Communication System 56
Section 21.05 Gas Meter 56
ARTICLE TWENTY-TWO - OUTAGES 57
Section 22.01 Planned Outages 57
Section 22.02 No Planned Outages During Summer Months 57
Section 22.03 Notice of Forced Outages 57
Section 22.04 Reports of Forced or Planned Outages 57
Section 22.05 Inspection 57
ARTICLE TWENTY-THREE - FORCE MAJEURE 58
Section 23.01 No Default for Force Majeure 58
Section 23.02 Force Majeure Claim 58
ARTICLE TWENTY-FOUR - REPRESENTATIONS, WARRANTIES AND COVENANTS 58
Section 24.01 Representations and Warranties of Both Parties 58
Section 24.02 Representations and Warranties of Seller 59
Section 24.03 Seller’s Affirmative Covenants 60
Section 24.04 Seller’s Negative Covenants 60
ARTICLE TWENTY-FIVE - LIMITATIONS 62
Section 25.01 Limitation of Remedies, Liability and Damages 62
Section 25.02 No Representation by SCE 62
ARTICLE TWENTY-SIX - RECORDS 63
Section 26.01 Performance under this Agreement 63
Section 26.02 Sarbanes-Oxley and Securities and Exchange Commission Requirements 63
Section 26.03 Other Regulatory and Governmental Requirements 65
Section 26.04 Audit Rights 65
Section 26.05 California Climate Action Registry 65
Section 26.06 QF Efficiency Monitoring Program 65
ARTICLE TWENTY-SEVEN - DISPUTES 66
Section 27.01 Informal Resolution 66
Section 27.02 Mediation 66
Section 27.03 Arbitration 66
Section 27.04 Arbitration or Mediation Prior to Release of Deed of Trust 67
Section 27.04 WAIVER OF JURY TRIAL 67
ARTICLE TWENTY-EIGHT - INDEMNIFICATION 67
Section 28.01 Seller Acts and Omissions 67
Section 28.02 Breach of Representations, Warranties, and Covenants 67
Section 28.03 Insurance 67
Section 28.04 Survival 68
ARTICLE TWENTY-NINE - CONFIDENTIALITY/REGULATORY DISCLOSURE 68
Section 29.01 Confidentiality Obligation 68
Section 29.02 Compelled Disclosures 68
Section 29.03 Disclosures to Index Publishers 69
Section 29.04 Duty to Seek Protection 69
Section 29.05 Ownership and Return of Information 69
Section 29.06 Enforcement 70
ARTICLE THIRTY - MISCELLANEOUS 70
Section 30.01 General 70
Section 30.02 Notices 70
Section 30.03 Governing Law 70
Section 30.04 Amendment 71
Section 30.05 Assignment 71
Section 30.06 Waiver 71
Section 30.07 Obligations Surviving Termination 71
Section 30.08 No Agency 71
Section 30.09 No Third Party Beneficiaries 71
Section 30.10 Entire Agreement 71
Section 30.11 Severability 71
Section 30.12 Forward Contract 72
Section 30.13 Mobile Sierra 72
Section 30.14 Multiple Originals 72
Section 30.16 Signature Clause 72
7/27/2006
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Power Purchase Tolling Agreement
Table Of Appendices (Continued)
Appendix / Title / LocationAPPENDIX A DEFINITIONS Attached to PPA
APPENDIX 1.02 Capacity and Ancillary Services [Standard Product] Excel Appendices
APPENDIX 1.02 Capacity [QF Product] Excel Appendices
APPENDIX 1.03 Generating Units Excel Appendices
APPENDIX 1.04.01 Energy DELIVERY Point Attached to PPA
APPENDIX 1.04.02 GAS INFORMATION Excel Appendices
APPENDIX 2.03 Expected INITIAL Delivery Date Excel Appendices
Appendix 6.01(A) MILESTONE SCHEDULE Attached to PPA
Appendix 6.01(B) CONSTRUCTION REPORT Attached to PPA
APPENDIX 7 Testing Protocols [Standard Product/Simple Cycle Generating Unit] Attached to PPA
APPENDIX 7 TESTING PROTOCOLS [Standard Product/Combined Cycle Generating Unit] Attached to PPA
APPENDIX 7 Testing Protocols [QF Product] Attached to PPA
APPENDIX 9.02 Monthly Capacity Payment Excel Appendices
APPENDIX 9.04 VARIABLE O&M RATE [Standard Product only] Excel Appendices
APPENDIX 9.04(A) MONTHLY ENERGY PAYMENT [QF Product only] Excel Appendices
Appendix9.04(B) TIME OF DELIVERY PERIODS AND ENERGY PAYMENT ALLOCATION FACTORS [QF Product only] Attached to PPA
APPENDIX 9.05 START-UP CHARGE [Standard Product only] Excel Appendices
APPENDIX 10.04.01 HEAT RATE INFORMATION Excel Appendices
APPENDIX 13.02.04.5 GUARANTY AGREEMENT FORM Attached to PPA
APPENDIX 13.03.02 LETTER OF CREDIT FORM Attached to PPA
APPENDIX 16.01 SoCalGas INTERCONNECTION Attached to PPA
APPENDIX 20.01 AVAILABILITY NOTICE Attached to PPA
APPENDIX 20.02 DISPATCH NOTICES Attached to PPA
APPENDIX 20.03 START-UP NOTICE Attached to PPA
APPENDIX 20.05 DAILY OPERATING REPORT Attached to PPA
APPENDIX 20.07 COMMUNICATION PROTOCOLS Attached to PPA
APPENDIX 21.03 DELIVERY OF DATA Attached to PPA
APPENDIX 22.01 PLANNED OUTAGE REPORT Attached to PPA
7/27/2006
- iv -
POWER PURCHASE [TOLLING] AGREEMENT
between
SOUTHERN CALIFORNIA EDISON COMPANY
and
[Seller]
This Power Purchase [Tolling] Agreement (“Agreement”) is made and entered into as of this ______day of ______, _____ (“Execution Date”) by SOUTHERN CALIFORNIA EDISON COMPANY, a California corporation (“SCE or “Buyer”), and [SELLER FULL NAME], a [Seller business form and state of formation] (“Seller”). SCE and Seller are sometimes referred to herein individually as a “Party” and jointly as the “Parties”. All capitalized terms used in this Agreement are used with the meanings ascribed to them in Appendix A to this Agreement.
RECITALS
This Agreement is made with reference to the following facts, among others:
A. SCE is an investor-owned electric utility serving customers in central and southern California.
B. Check only one of the following boxes and complete:
[ ] Seller [is constructing and owns a] [is refurbishing its] “Project”, consisting of one or more [type of technology, e.g. gas-fired] Generating Units (each, a “Generating Unit”) located at [address] (the “Site”); or
[ ] Seller owns a “Project,” consisting of one or more [type of technology] Generating Units located at [address] (the “Site”) and is constructing a transmission line from the Site to [interconnection location].
C. Seller wishes to sell and deliver exclusively to SCE and SCE wishes to purchase, Capacity, Energy, Resource Adequacy Benefits and other products from the Generating Units, under the conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the Parties agree as follows.
ARTICLE ONE
Purchase and Sale of Product
Section 1.01. Product Type. The Product that is the subject of this Agreement is (check one box only):
[ ] Standard Product.
[ ] QF Product.
Section 1.02. Purchase and Sale of Product. During the Delivery Period, Seller shall deliver and sell, and SCE shall purchase and receive, the Product, subject to the terms and conditions of this Agreement, including the Operating Restrictions set forth in Appendix 1.02. Seller represents, warrants, and covenants that it will deliver the Product to SCE free and clear of all liens, security interests, claims and encumbrances. Seller shall not sell, assign or otherwise transfer the Product, or any portion thereof, to any third party other than to SCE or the CAISO pursuant to this Agreement. Moreover,
[Standard Product only: Seller shall not substitute or purchase any Capacity, Energy, Ancillary Services or Resource Adequacy Benefits from any other generating resource or from the market for delivery hereunder.]
[QF Product only: Seller shall not substitute or purchase any Capacity, Energy, Environmental Attributes or Resource Adequacy Benefits from any other generating resource or from the market for delivery hereunder.]
1.02.01 Capacity. SCE shall have the exclusive right to the Contract Capacity from the Generating Units. As of the Execution Date, the Contract Capacity shall equal the aggregate of the Expected Contract Capacity of each Generating Unit as set forth in Appendix 1.02.
The actual Contract Capacity of each Generating Unit will be determined in accordance with Article Seven. In no event may any Generating Unit’s actual Contract Capacity, as determined pursuant to Article Seven, exceed that Generating Unit’s Expected Contract Capacity.
1.02.02 Energy. [Standard Product only: Except for Energy resulting from a Non-SCE Dispatch,] Seller dedicates the Net Electrical Output of each Generating Unit to SCE, and SCE shall have the exclusive rights to all Energy produced by the Generating Units, [Standard Product only: including pursuant to a forward schedule or a Supplemental Energy instruction from the CAISO].
[Standard Product only:
1.02.03 Ancillary Services. SCE shall have the exclusive rights to all Ancillary Services Capacity and Associated Ancillary Services Energy from the Generating Units, subject to the limitations set forth in Appendix 1.02.]
[QF Product only:
1.02.03 Environmental Attributes. SCE shall have the exclusive rights to all Environmental Attributes associated with the Project.]
1.02.04 Resource Adequacy Benefits. Seller grants, pledges, assigns and otherwise commits to SCE the full Capacity of each Generating Unit in order for SCE to meet its Resource Adequacy Requirement and, if applicable, local RAR under any Resource Adequacy Rulings. Seller represents, warrants and covenants to SCE that Seller (a) has not used, granted, pledged, assigned or otherwise committed, and (b) will not use, grant, pledge, assign or otherwise commit any Capacity of any Generating Unit to meet the Resource Adequacy Requirement or local RAR of, or confer Resource Adequacy Benefits upon, any entity other than SCE during the Term. The Parties shall take all actions (including amending this Agreement and complying with all current and future Tariff provisions and decisions of the CPUC and/or any other Governmental Authority that address Resource Adequacy performance obligations and penalties) and execute all documents or instruments necessary to effect the use of the Resource Adequacy Benefits of each Generating Unit for SCE’s sole benefit throughout the Term.