UC Toll SCE as SC FM outside SoCalGas
MASTER POWER PURCHASE AND SALE AGREEMENT
CONFIRMATION LETTER
BETWEEN
[COUNTERPARTY]
AND
SOUTHERN CALIFORNIA EDISON COMPANY
This confirmation letter and the appendices attached hereto and incorporated herein (“Confirmation”) confirms the Transaction between [Counterparty] (“Seller”) and Southern California Edison Company (“Buyer” or “SCE”) dated as of [Date] (“Confirmation Effective Date”) regarding the sale and purchase of the Product, as such term is defined below in Section 5.1, in accordance with and subject to the terms and provisions of this Confirmation, the EEI Master Power Purchase & Sale Agreement, along with the Cover Sheet, any amendments and annexes thereto between Seller and SCE dated as of [Date] (“Master Agreement”), and Paragraph 10 of the EEI Collateral Annex to the Master Agreement (Paragraph 10 and the Collateral Annex are both referred to herein as the “Collateral Annex”) (the Master Agreement and the Collateral Annex shall be collectively referred to as the “EEI Agreement”). The EEI Agreement and this Confirmation shall be collectively referred to herein as the “Agreement.” Capitalized terms used but not defined in this Confirmation shall have the meanings ascribed to them in the EEI Agreement, or the Tariff. If any term in this Confirmation conflicts with the Tariff, the definition set forth in this Confirmation shall supersede.
transaction definitions
1.1Seller
[Counterparty].
1.2Buyer
SCE.
1.3Term
The “Term” of this Transaction shall commence upon the Confirmation Effective Date and shall continueuntil the later of (a) the expiration of the Delivery Period or (b) the date the Parties’ obligations under this Agreement have been satisfied.
1.4Delivery Period
The Delivery Period shall be as set forth in Appendix 1.4 unless terminated earlier in accordance with the terms of this Agreement.
1.5Product
Capacity, Energy, Ancillary Services, Resource Adequacy Benefits, and any other product derived from or associated with each Generating Unit (collectively, the “Product”). During the Delivery Period, Seller shall sell and deliver, and SCE shall purchase and receive, this Product, subject to the terms and conditions of this Confirmation. 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 substitute or purchase any Capacity, Energy, Ancillary Services, or Resource Adequacy Benefits from any other generating resource or from the market for delivery hereunder.
1.6Energy Delivery Point
The Energy Delivery Point shall be as described and set forth in the single-line diagram of grid interconnection attached hereto as Appendix 1.5. Except as set forth elsewhere in this Confirmation, including Article 7, Seller shall be responsible for all charges and penalties associated with the operation of the Generating Units and transmission of Energy up to and including the Energy Delivery Point, and SCE shall be responsible for all charges and penalties associated with receiving and transmitting Energy from the Energy Delivery Point. Title, possession, and risk of loss related to Energy shall transfer from Seller to SCE at the Energy Delivery Point. Notwithstanding the above, Seller acknowledges and agrees that any other agreement between it and SCE, including any interconnection agreement, is separate and apart from this Agreement such that no other agreement shall modify or add to the Parties’ obligations under the Agreement, and that no Party’s breach under such other agreement shall excuse a Party’s nonperformance under the Agreement.The Energy Delivery Point specified herein is the Product’s “Delivery Point” for this Transaction for purposes of the Master Agreement.
1.7Gas Delivery Point
The Gas Delivery Point shall be: (as described and set forth in the single-line diagram of gas interconnection attached hereto as Appendix 1.7)
(a)[__] identify the interconnection between the Generating Units and their meter with the system of the following gas transporter (“Connecting Transporter”):
______
(b)[__] identify the interconnection between the following gas transporters
______
1.8Generating Units
Each Generating Unit is set forth in Section A and Section B of Appendix 1.8.
ARTICLE 2
Purchase and sale of PRODUCT
2.1Exclusivity
During the Delivery Period, SCE shall have the exclusive right to the Contract Capacity, Net Electrical Output, and Resource Adequacy Benefits purchased by SCE hereunder, and all benefits derived therefrom, including the exclusive right to use, market, or sell the Product purchased hereunder and the right to all revenues generated from the use, sale, or marketing of such Product. If Seller sells, assigns, or otherwise transfers, or commits to sell, assign, or otherwise transfer, that Product, or any portion thereof, or any benefits derived therefrom, to any party other than SCE, it shall constitute an Event of Default as to Seller under Section 5.1 of the Master Agreement.
2.2Ownership
Seller shall maintain ownership of, and demonstrable exclusive rights to, the Generating Units throughout the Term.
2.3Energy
During the Delivery Period, Seller dedicates the Net Electrical Output of each Generating Unit to SCE.
2.4Contract Capacity
During the Delivery Period, SCE shall have the exclusive right to the Contract Capacity from the Generating Units. The Quantity of Contract Capacity is set forth in Appendix 2.4.
2.5Resource 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 (“RAR”) 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 RAR or local RAR of, or confer Resource Adequacy Benefits upon, any entity other than SCE during the Delivery Period. 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 Delivery Period.
ARTICLE 3
compensation and availability
3.1Compensation
(a)Monthly Capacity Payment: In accordance with the terms of Article Six of the Master Agreement, for each Generating UnitSCE shall make to Seller the Monthly Capacity Payment, payable in arrears. The Monthly Capacity Payment for each month of the Delivery Period is set forth in Appendix 3.1(a), and is subject to reduction in accordance with Section3.2, Section 3.3, and Section 3.4 of this Confirmation whereby SCE would then make the Reduced Monthly Capacity Payment in lieu of the Monthly Capacity Payment.
(b)Variable O&M Payment: SCE shall pay Seller a Variable O&M Payment, calculated as follows:
Variable O&M Paymentm = Variable O&M Chargeyx Qualifying Delivered Energy
where:
Variable O&M Chargey is set forth in Appendix 3.1(b)
m = the relevant month within the Delivery Period being calculated
y = the Contract Year corresponding to month “m”
h = the number of hours in month “m”
i = the Settlement Interval in month “m”
(c)Start-Up Charge: SCE shall provide the natural gas required for Start-Ups (“Start-Up Fuel”) as specified in Appendix 3.1(c). SCE shall also pay Seller the Start-Up Charge set forth in Appendix3.1(c) for each Start-Up. All Energy produced prior to the Generating Unit achieving a Start-Up during the respective start-up cycle shall be for SCE’s account;
(i)If SCE aborts a start-up before the Generating Unit achieves full Start-Up, then SCE shall provide any natural gas consumed by the Generating Unit in connection with such aborted start-up, up to the applicable quantity of the Start-Up Fuel.
(ii)If the Generating Unit is unable to generate or deliver Energy to the Energy Delivery Point after a Start-Up, but before the next scheduled shutdown of the Generating Unit for any reason other than a Force Majeure, SCE is not responsible for any charges under this Section 3.1(c) for the next Start-Up.
3.2Availability
(a)Capacity Payment Reduction. Subject to the provisions of Section 3.3 of this Confirmation, if, regardless of cause (including by reason of Force Majeure affecting Seller, Forced Outage or Planned Outage), (i) the Available Capacity of a Generating Unit is less than the applicable Contract Capacity in any Settlement Interval in a month during the Delivery Period, or (ii) Qualifying Delivered Energy from such Generating Unit is less than the Performance Tolerance Band Lower Limit in any Settlement Interval in a month during the Delivery Period, then the Capacity Payment Reduction for the Generating Unit for that month will be calculated as follows:
(i)For each Settlement Interval in the month, the “Price-Weighted Capacity Availability” is calculated as follows:
Price-Weighted Capacity Availabilityi = (MCPh(i) x Capacity Availabilityi) / MCPavg(m)
where:
i = the Settlement Interval in month “m”
MCP =the Day-Ahead Market price for the Existing Zone Generation Trading Hub as published by CAISO on OASIS for the Existing Zone of SP15for the Settlement Interval.
h(i) = the Trading Hour corresponding to Settlement Interval (“i”) being calculated
avg(m) = the simple average over all Settlement Intervals in month (“m”)
For purposes of such calculation, Capacity Availability for any Settlement Interval shall not exceed the applicable Contract Capacity.
(ii)Using the Price-Weighted Capacity Availability calculation above, the “Price-Weighted Monthly Capacity Availability” for month “m” is calculated as follows:
Price-Weighted Monthly Capacity Availabilitym =Price-Weighted Capacity Availabilityi
where:
n = the number of Settlement Intervals in month “m”
i = the Settlement Interval in month “m”
(iii)Using the Price-Weighted Monthly Capacity Availability calculation above, the “Capacity Price Adjustment Factor” for month “m” is calculated as follows:
Capacity Price Adjustment Factorm=Price-Weighted Monthly Capacity Availabilitym/(Qxn)
where:
Q = the Contract Capacity
n = the number of Settlement Intervals in month “m”
(iv)Finally, using the Capacity Price Adjustment Factor calculation above, the “Capacity Payment Reduction” for month “m” for the respective Turbine Configuration is calculated as follows:
Capacity Payment Reductionm.CCGT or BOILER = (0.85 x Monthly Capacity Payment) –
(0.85 x Monthly Capacity Payment x Capacity Price Adjustment Factor)
or
Capacity Payment Reductionm.CT= (0.50 x Monthly Capacity Payment) –
(0.50 x Monthly Capacity Payment x Capacity Price Adjustment Factor)
(b)A/S Capacity Payment Reduction: If, regardless of cause (including by reason of Force Majeure, Forced Outage or Planned Outage,and subject to the provisions of Section 3.3), the A/S Availability of a Generating Unit is less than any of the Ancillary Services Capacity quantities specified in Section G of Appendix 1.4 in any Settlement Interval of a month, then the A/S Capacity Payment Reduction for the Generating Unit for that month will be calculated as follows:
(i)The “Monthly Available A/S Capacity” for month “m” is calculated as follows:
Monthly Available A/S Capacitym = A/S Availabilitym
(ii)Using the Monthly Available A/S Capacity calculation above, the “A/S Price Adjustment Factor” for month “m” is calculated as follows:
A/S Price Adjustment Factorm = Monthly Available A/SCapacitym/ (Ancillary Service Capacityxn)
where:
Ancillary Service Capacity is set forth in Section G of Appendix 1.4
(iii)Using the A/S Price Adjustment Factor calculation above, the “A/S Capacity Payment Reduction” for month “m” for the respective Turbine Configuration is calculated as follows:
A/S Capacity Payment Reductionm,CCGT or BOILER = (0.15 x Monthly Capacity Payment) – (0.85 x Monthly Capacity Payment x A/S Price Adjustment Factor)
or
A/S Capacity Payment Reductionm,CT = (0.50 x Monthly Capacity Payment) –
(0.50 x Monthly Capacity Payment x A/S Price Adjustment Factor)
For purposes of these calculations, Available A/S Capacity for any Settlement Interval shall not exceed the applicable Ancillary Services Capacity quantities specified in Section G of Appendix 1.4.
(c)Reduced Monthly Capacity Payment: The “Reduced Monthly Capacity Payment” shall be equal to the Monthly Capacity Payment less the sum of the Capacity Payment Reduction and the A/S Capacity Payment Reduction.
3.3Other Events Affecting Availability
(a)If either (i) Seller fails to take any action necessary to make the Product deliverable or otherwise available to SCE at the Energy Delivery Point, including maintenance, repair, or replacement of equipment in Seller’s possession or control that must be used for SCE to take delivery of the Product at, or transmit the Product from the Energy Delivery Point, or (ii) such equipment fails for any reason including by reason of Force Majeure or any Outage, then, to the extent SCE is unable to take delivery of the Product at, or to transmit from the Energy Delivery Point by reason of such failures, the Generating Unit shall be deemed to be unavailable in the amount of the Contract Capacity that is not available to SCE and the Monthly Capacity Payment shall be reduced in accordance with this Article 3.
(b)If either (i) Seller fails to take any action within its control that is necessary to deliver natural gas to the Generating Unit, including maintenance, repair or replacement of equipment in Seller’s possession or control that must be used to deliver gas to the Generating Unit, or (ii) such equipment fails for any reason, including by reason of Force Majeure or any Outage, then, to the extent natural gas is unable to be delivered to the Generating Unit by reason of such failures, the Generating Unit shall be deemed to be unavailable in the amount of the Contract Capacity that is not available to SCE and the Monthly Capacity Payment shall be reduced in accordance with this Article 3.
(c)If the either Gas Transportation Contract does not provide for Firm Transportation Servicefor all Settlement Intervals within the Delivery Period, or (ii) Seller does not fulfill all its obligations set forth in Section 5.1(c) of this Confirmation, the Generating Unit shall be deemed to be unavailable in the amount of Contract Capacity that is not available to SCE for the Settlement Intervals during which service under the Gas Transportation Contract is interrupted or curtailed, and the Monthly Capacity Payment shall be reduced in accordance with this Article 3.
(d)If the Transportation Contract, the IFA, the PGA, or the MSA are not in effect at any time during the Delivery Period, the Generating Unit shall be deemed to be unavailable for the Settlement Intervals during which such agreement or agreements are ineffective, and the Monthly Capacity Payment shall be reduced in accordance with this Article 3.
(e)Notwithstanding Section 8.3 of this Confirmation, if Seller starts-up or operates any Generating Unit other than (i) as dispatched by SCE or the CAISO or (ii) pursuant to a Non-SCE Dispatch, the Generating Unit shall be deemed to be unavailable in the amount of the Contract Capacity that is not available to SCE, and the Monthly Capacity Payment shall be reduced in accordance with this Article 3.
(f)In the event of a failure by Seller to deliver the Product to the Energy Delivery Point, Article Four of the Master Agreement shall not apply.
3.4Exchange Quotation Price
If the MCP ceases to be available for any hour in the Delivery Period, then the Exchange Quotation Price will be used in lieu of the MCP. The Exchange Quotation Price for each hour shall be an average of the On-Peak Period index price or Off-Peak Period index price, as applicable,as reported in the following two daily publications, unless a substitute publication and/or index is mutually agreed to by the Parties: (1) Platts Megawatt Daily, and (2) the Intercontinental Exchange, Inc. Day Ahead Index (“ICE”). The Exchange Quotation Price shall be determined by calculating a simple average of the index prices for SP15 for the On-Peak Period and the Off-Peak Period for each day appearing in such daily publications (“Period Average”). This average price shall be the Exchange Quotation Price for each hour of the On-Peak Period or Off-Peak Period. The Period Average price shall be rounded to the nearest hundredth place (i.e., two (2) decimal places).
If one publication does not report an On-Peak Period index price or an Off-Peak Period index price for SP15, the index price reported by the remaining publication will be used. If neither publication reports an index price for SP15, the Period Average for the missing day will be determined using ICE for Palo Verde (“PV”) and the difference spread between its PV index and SP15 index as reported for the days immediately preceding and the day immediately following the day with the missing SP15 price.
The substitute index price shall be determined from the following formula:
P = g - s = g – [(d - c + f - e) ÷ 2]
where:
P =the substitute index price;
g =the PV index price for the day for which the SP15 index price is missing;
s =the calculated spread between PV and SP15 indices for the day where the SP15 index price is missing;
d =the PV index price for the day preceding the day for which the SP15 index price is missing;
c =the SP15 index price for such preceding day;
f =the PV index price for the day immediately following the day for which the SP15 index price is missing; and
e =the SP15 index price for such following day.
If ICEdoes not publish a price for PV, then PlattsMegawatt Daily PV price shall be used. If neither of the referenced publications reports an index price for both PV and SP15 for one (1) day, the index prices for the On-Peak Period and Off-Peak Period will be the average index price for that period from the day immediately preceding (except that the Saturday price will be used for this calculation if the On-Peak Period price for Monday is not reported) and the day immediately following the missing day(s). If no publication reports an index price for SP15 for more than three (3) consecutive days and if the index is required in order to calculate the Price-Weighted Capacity Availability, the Parties shall negotiate in good faith to establish a substitute index or price.