MINISTRY OF ENERGY[1]
STANDARDIZED POWER PURCHASE AGREEMENT FOR PURCHASE OF CAPACITY AND ASSOCIATED ELECTRIC ENERGY TO THE ISOLATED MINI-GRID NAMELY,
[______]
BETWEEN
[______] THE BUYER
AND
[______] THE SELLER
Page 1 of 26
Contents
ARTICLE 1. DEFINITIONS
ARTICLE 2. DELIVERY, SALE, AND PURCHASE OF THE BUYER'S ENTITLEMENT
ARTICLE 3: TERM; DEFAULT; TERMINATION; MILESTONE
ARTICLE 4. INTERCONNECTION; METERING; OPERATION
ARTICLE 5. BILLING AND PAYMENT
ARTICLE 6. FORCE MAJEURE
ARTICLE 7. RELATIONSHIP OF PARTIES; LIMITATION OF LIABILITY; INDEMNIFICATION
ARTICLE 8: DISPUTE RESOLUTION
ARTICLE 9: DELEGATION AND ASSIGNMENT; RESTRUCTURING
ARTICLE 10: REPRESENTATIONS AND WARRANTIES
ARTICLE 11: MISCELLANEOUS
APPENDIX A: TARIFFS FOR DELIVERY OF THE BUYER’S ENTITLEMENT
APPENDIX B: DESCRIPTION OF THE SELLER'S FACILITY
APPENDIX C: GRID INTERCONNECTION REQUIREMENTS
Page 1 of 26
STANDARDIZED POWER PURCHASE AGREEMENT FOR PURCHASE OF CAPACITY AND ASSOCIATED ELECTRIC ENERGY
BETWEEN
______(The Buyer) and
______(The Seller)
to serve
______(The Isolated Mini-grid)
This Standardized Power Purchase Agreement for the Purchase of Capacity and Associated Electric Energy (hereinafter“this AGREEMENT") is entered into on the date signed below, by and between ______, a body corporate, duly constituted under……………….Act, Cap ….of the laws of the Republic of….…………, whose address is Post Office Box Number……………….and having its head office at______, ______, in the said Republic, (hereinafter referred to as "the Buyer" ), and ______,a company incorporated under the Companies Act, Cap……of the laws of ….……….whose address is Post office Box Number………..and having its registered office at ______, ______, in the said Republic , the owner of the Small Power Project identified herein and described in Appendix B of this AGREEMENT (hereinafter referred to as "the Seller").
WHEREAS, it is the policy of the Government to encourage private sector Small Power Project development and production of power;
WHEREAS, it is the responsibility of the Ministry of ……………………..in administering the National Energy Policy to facilitate Small Power Project development and power sale;
WHEREAS, the Regulator has been empowered by the …………Act, Cap ………of the laws of …., (the Act), to approve power sale terms and tariffs, and has approved the form of this AGREEMENT for Small Power Project sales of power;
WHEREAS, the Buyer has requirements to obtain additional electric capacity and associated electric energy, and has available transmission capacity to accept and utilize such capacity and associated energy;
WHEREAS, such capacity and associated electric energy can be supplied to the Buyer by the Seller, subject to the warranties and representations in this AGREEMENT;
WHEREAS, the Seller has submitted to the Buyer, a proposal for sale of capacity and/or associated electric energy from a Small Power Project facility;
WHEREAS, the Seller's Small Power Project and tender for sale to the Buyer of capacity and/or associated electric energy qualifies as eligible under the…………………..,…. and under which the Buyer is authorized by the Regulator to enter into binding agreements with owners or operators of Small Power Projects;
WHEREAS, the Seller and the Buyer are duly constituted and validly existing under the laws of the Government of……………….., each possesses all requisite corporate and legal authority to execute this AGREEMENT, and each is permitted by applicable laws and regulations to sell or purchase independently produced power;
WHEREAS, the Seller wishes to deliver and sell, and the Buyer wishes to purchase and to accept delivery of, the offered capacity and/or associated electric energy to be produced by the Seller from the Facility described in Appendix B, pursuant to the terms and subject to the conditions as set forth in this AGREEMENT; and
WHEREAS, the offered capacity and/or associated electrical energy shall not to exceed the maximum dependable load-carrying ability of the Facility exclusive of energy required for Facility use.
NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, the sufficiency of which are stipulated by the Parties, the Seller and the Buyer hereby agree as follows.
ARTICLE 1. DEFINITIONS
When used with initial capitalizations, whether in the singular or in the plural, the following terms shall have the following meanings:
(a) Agreement: This document, including all Appendices, and all documents, laws, regulations, or standards incorporated by express reference herein, as such may be amended from time to time.
(b) Appendix A: The standardized tariffs for purchase and sale of capacity and/or associated electric energy applicable to this AGREEMENT.
(c) Appendix B: Description of the Seller's Facility.
(d) Appendix C: Grid Interconnection Requirements.
(e) Commencement Date of Operation: The first day of the succeeding month following (1) the day on which the Seller notifies the Buyer that power deliveries can commence consistent with the terms of this AGREEMENT, or (2) the day on which the Seller commences deliveries of electric energy to any purchaser consistent with applicable law, including but not limited to, the Buyer.
(f) Contract Year: The twelve month period beginning with the Commencement Operation and each succeeding twelve month period.
(g) Date of Interconnection of the Isolated Mini-grid to the Main-grid: The date on which an Isolated Mini-grid and the Main-grid are connected or remain connected to each other, causing unhindered flow of electricity from the Main-grid to the Isolated Mini-grid, to satisfy the requirements of electrical capacity and energy of the customers served by the Isolated Mini-grid, provided the Seller’s Incremental Capacity required by the Isolated Mini-grid is not greater than zero.
(h) Delivery Point: The point where the Buyer's or a separate transmission company’s transmission or distribution system contracted by the Buyer connects with the power output of the Facility, and where the Seller's metering of power output initially takes place including those protection, metering, electric line(s), and other facilities required, in the opinion of the transmission provider, to connect the electric systems of the Buyer and the Seller. The terms “Delivery Point” and “Point of Supply” may be used interchangeably.
(i) Due Date: Thirty (30) days after the last day of each month during the term of this AGREEMENT.
(j) Emergency: A condition or situation which is likely to result in disruption of service to the Buyer's customers, is likely to cause a major fault in the Buyer's or another transmission system directly connected to the Facility, or is likely to endanger life or property.
(k) Event of Default: An event as defined in Article 3(b).
(l) Facility: All of the Seller's electrical prime movers and generators, together with all protective and other associated or auxiliary equipment of the Seller, and rights to own or use land associated with the electrical prime movers and generators, necessary to produce capacity and/or associated electric energy pursuant to this AGREEMENT.
(m) Good Utility Practice: Those practices, methods and acts with regard to adequate materials, resources, supplies, fuel, personnel, maintenance, repairs, monitoring, testing, and operation in the international utility industry at a particular time, in the exercise of reasonable judgment based on the facts known or that should have been known at the time of a decision, that would have been expected to accomplish the desired result in a manner consistent with law, regulations, codes, equipment manufacturers' recommendations, safety, law, environmental protection, economy and expedition.
(n)Interconnection Guidelines: The interconnection standards and requirements on grid connection relevant to a Small Power Project facility interconnection to the Buyer or other transmission or distribution grid into which the Facility interconnects, as stated in Appendix C
(o) Interconnection Point: The point where the Seller's Facility electric output line or electric system feeds into the electric transmission system to which it delivers power, whether owned by the Buyer or another.
(p) Isolated Mini-grid: An electricity transmission and distribution network physically isolated from the Main-grid on the date of this AGREEMENT
(q) Lender: Any person or entity, or any agent of or trustee for such person or entity, providing construction or permanent debt and/or equity financing and/or refinancing and/or credit support of any portion of the development, construction or operation of the Facility, as has been designated by notice to from time to time by the Seller to the Buyer pursuant to Article 9(a).
(r) Main-grid: The interconnected electricity transmission network of…………………., to which the largest cumulative capacity of electricity generating facilities are connected.
(s) Must Take Facility: A Must Take Facility shall mean a Facility where the Buyer must take and purchase all of the net electric energy output, not exceeding the dependable annual capacity, to be generated by the Facility and delivered and sold to the Buyer, subject only to such necessary directions or protocols as may be issued by the Buyer for the protection of its electric system.
(t)Party or Parties: the Seller or the Buyer, or both, and their successors in interest to any or all of the rights and obligations hereunder.
(u) Prime Rate: That rate as announced by the Bank of………………………….during the relevant period.
(v) Regulator: The competent Agency of the Government for electricity generation established under the provisions section…………………. of the Act.
(w) Seller’s Incremental Capacity required by the Isolated Mini-grid: The difference between (i) the maximum demand for electricity by customers served by the Isolated Mini-grid and (ii) the maximum dependable capacity of the transmission interconnection between the Main-grid and the Isolated Mini-grid, plus the cumulative delivered capacity of all the Small Power Projects serving the same Isolated Mini-grid whose Commencement Date of Operation was prior to that of the Seller.
(x) Scheduled Outage: An outage at the Facility which is scheduled in advance for the purpose of performing maintenance on the Facility.
(y) Small Power Project: A project of any installed capacity that generates electric energy and sells pursuant to this AGREEMENT up to ten (10) MW of such output, or is otherwise deemed eligible for executing this AGREEMENT.
(z) The Buyer's Entitlement: The Facility's electric energy, not to exceed the maximum dependable load-carrying ability of the Facility exclusive of energy required for Facility use, expressed in kilowatt, agreed herein to be committed herein by the Seller for sale and delivery to the Buyer, as set forth in Appendix B.
(aa) The Government: means the Government of the Republic of ………………………………………
(ab) Unscheduled Outage: An outage at the Facility which is not a Scheduled Outage.
ARTICLE 2. DELIVERY, SALE, AND PURCHASE OF THE BUYER'S ENTITLEMENT
(a) Delivery of Entitlement. Upon the Commencement Date of Operation and thereafter the Seller agrees to deliver and sell to the Buyer for the term of this AGREEMENT as specified in Article 3 and at the price as specified in Article 5, the Buyer's Entitlement.
(b) Acceptance and Purchase of Entitlement. Upon the Commencement Date of Operation and thereafter, the Buyer agrees and covenants to purchase for the term of this AGREEMENT as specified in Article 3 and at the price as specified in Article 5, the Buyer's Entitlement when delivered by the Seller.
(c) Environmental Attributes. Any environmental attributes recognized under any international, national or other laws or regulations, associated with the ownership or generation of power from the Facility, including but not limited to carbon credits or attributes created pursuant to the Kyoto Protocol or any successor laws, are not included in the Buyer’s Entitlement to be transferred to the Buyer and shall remain the property, and under the control, of the Seller.
(d) Operation of Facility. The Seller agrees to operate the Facility to the maximum extent feasible consistent with the recommendations of equipment manufactures and Good Utility Practice. The Buyer shall not assert the Seller's liability for, and the Seller shall not be liable to the Buyer for, any direct damages resulting from the Seller's inadvertent or accidental failure to deliver the Buyer's Entitlement, unless the Seller is grossly negligent. Unless specifically allowed pursuant to this AGREEMENT, where without the Buyer's prior written approval the Seller deliberately reduces the Buyer's Entitlement for the purpose of selling or attempting to sell capacity and associated electric energy to any third party, or for the purpose of producing any other form of energy capable of being produced at the Facility in lieu of the Buyer’s Entitlement, said limitation of the Seller's liability shall not apply.
(e) Forecasts. Prior to the Commencement Date of Operation and thereafter on or before each subsequent Contract Year, the Seller shall furnish to the Buyer, and to the separate operator of the transmission system(s) into which the Facility is interconnected, if any, an annual forecast of its anticipated operations that includes the following: (1) anticipated monthly generation availability, and (2) Scheduled Outages for each year; provided, however, the Seller shall have no liability to the Buyer and shall be subject to no liability, reduced payment, or penalty in the event that the actual amount of capacity and associated electric energy delivered to the Buyer, or the times of said delivery, differ from the amounts or times shown in said forecasts. Notwithstanding this provision, the Seller may not divert the Buyer's Entitlement without the prior written consent of the Buyer. The Seller shall revise its Scheduled Outages and notify the Buyer if such plans change.
(f) Scheduled Outages. The Seller shall attempt to coordinate any Scheduled Outage, subject to Good Utility Practice, with the Buyer's reasonable written request. The Seller shall notify the Buyer one month in advance of Scheduled Outages, including a non-binding estimate of expected length of each outage, and as soon as possible, of any Unscheduled Outages, including a non-binding estimate of expected length of each outage.
(g) Transmission System Operation. If the Buyer owns or operates the transmission grid into which the Facility is interconnected, the Buyer shall operate and maintain its transmission system and the Facility interconnection in accordance with Good Utility Practice so as to permit the delivery to the Buyer's system of the Buyer's Entitlement; in addition, the Buyer shall work with the Seller to balance load and support voltage on the transmission and distribution system so as to maximize the ability of the transmission system to accept and transmit the Buyer’s Entitlement whether or not the Buyer owns or operates the transmission grid into which the Facility is connected.
(h) Interruption of Acceptance and Purchase. Notwithstanding that the Seller's Facility is a Must Take Facility, the Buyer shall not be obligated to purchase or take delivery of the Buyer's Entitlement if the Facility is not operated and maintained in a manner consistent with Good Utility Practice in accordance with Article 4. The Buyer may interrupt, reduce or cease to purchase and accept delivery of all or a portion of the Buyer's Entitlement, to the extent that such interruption, reduction or cessation is necessary, under Good Utility Practice, in order for the Buyer to install equipment, make repairs, replacements, investigations or inspections of the Buyer's system. Notwithstanding that the Seller's Facility is a Must Take Facility, whenever the Buyer's system or the systems with which it is directly interconnected experience an Emergency, or whenever it is necessary to aid in the restoration of service on the Buyer's system or on the systems with which it is directly or indirectly interconnected, the Buyer may, in its sole discretion, curtail or interrupt the taking of all or a portion of the Buyer's Entitlement or any electric energy hereunder, provided such curtailment or interruption shall continue only for so long as it is reasonably and minimally necessary under Good Utility Practice.
(i) Interruption of Delivery. The Seller may interrupt, reduce or cease to deliver the Buyer's Entitlement only to the extent that the Seller reasonably determines that such interruption, reduction, or cessation is necessary in order to install equipment in, make repairs, replacements, investigations and inspections of, or perform maintenance on the Facility which directly affect, the delivery of the Buyer's Entitlement. The Seller shall, prior to initiating any interruption, reduction or refusal to deliver the Buyer's Entitlement, use its best efforts to provide the Buyer, and the transmission system operator if different than the Buyer, a minimum of twenty-four (24) hours advance notice, such notice to include an explanation of the cause of the interruption, and an estimate of the start and duration of the interruption.
(j) Coordination. Because the Seller's Facility is a Must Take Facility, the Buyer shall use its best efforts to coordinate and to minimize any periods of interruption, reduction, cessation, or curtailment of acceptance of capacity or electric energy from the Seller as provided for in this Article with the periods of previous Scheduled Outage at the Facility. Prior to initiating any interruption, reduction or cessation of the Buyer's Entitlement, the Buyer shall use its best efforts to provide the Seller with a minimum of twenty-four (24) hours advance notice, such notice to include an explanation of the cause of the interruption, and an estimate of the start and duration of the interruption.