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Title: |
Power Sales Agreement |
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Entities: |
Dominion Resources, Inc.; Peoples Energy Corp.; Hogan & Hartson; McGuireWoods |
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Date: |
2002 |
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Size: |
Preview shows 24KB of 295KB total |
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Price: |
$68 |
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ID: |
#421276 |
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POWER SALES AGREEMENT
Dated as of June 30, 2000
Between
Aquila Energy Marketing Corporation,
UtiliCorp United Inc.
(Buyer)
and
Elwood Energy III, LLC
(Seller)
{PAGE}
Table of Contents
{TABLE}
{S} {C}
1. DEFINITIONS AND INTERPRETATION..............................................................................1
1.1 Definitions..............................................................................................1
1.2 Interpretation..........................................................................................13
1.3 Legal Representation of Parties.........................................................................14
1.4 Titles and Headings.....................................................................................15
1.5 Order of Precedence.....................................................................................15
2. TERM AND SURVIVAL..........................................................................................15
2.1 Term....................................................................................................15
2.2 Survival................................................................................................15
3. PROJECT IMPLEMENTATION AND ACHIEVEMENT OF COMMERCIAL OPERATIONS............................................16
3.1 Development and Construction............................................................................16
3.2 Conditions to Commercial Operations.....................................................................16
3.3 Late Commercial Operations Date.........................................................................17
3.4 Commissioning and Test Power............................................................................19
4. ELECTRIC ENERGY DELIVERY, DISPATCH AND FORCED OUTAGES......................................................20
4.1 Delivery of Electric Energy.............................................................................20
4.2 Point of Sale...........................................................................................20
4.3 Dispatch Rights of Buyer................................................................................20
4.4 Incremental Energy......................................................................................23
4.5 Forced Outages..........................................................................................24
4.6 Access to Facility......................................................................................26
4.7 Delivery of Replacement Power and Substitute Power......................................................26
4.8 Emergency Conditions....................................................................................27
5. METERING; BILLING; PAYMENT.................................................................................27
5.1 Metering Electricity....................................................................................28
5.2 Adjustment for Inaccurate Meters........................................................................29
5.3 Billing.................................................................................................30
5.4 Payments................................................................................................31
5.5 Offsets.................................................................................................31
5.6 Billing Disputes........................................................................................31
6. OPERATION AND MAINTENANCE OF THE FACILITY..................................................................31
6.1 Standard of Operation...................................................................................31
6.2 Permits and Licenses....................................................................................32
6.3 Sole Remedy.............................................................................................32
6.4 Scheduled Maintenance...................................................................................32
6.5 Compressor Wash.........................................................................................33
6.6 Operating Characteristics...............................................................................33
6.7 Records.................................................................................................34
7. COMPENSATION...............................................................................................34
7.1 Capacity Charge.........................................................................................34
7.2 Energy Charge...........................................................................................36
{/TABLE}
i
{PAGE}
{TABLE}
{S} {C}
7.3 Adjustment to Actual Heat Rate for Failure to Meet Guaranteed Heat Rate.................................38
7.4 Start Up Charge.........................................................................................39
7.5 Imbalance Charges.......................................................................................39
7.6 Rates Not Subject to Review.............................................................................40
8. PERFORMANCE TESTS..........................................................................................40
8.1 Test Procedures.........................................................................................40
8.2 Buyer's Right to Retest.................................................................................40
8.3 Seller Right to Retest..................................................................................41
8.4 Conditions for Testing..................................................................................41
8.5 Scheduling of Testing...................................................................................41
9. ANCILLARY SERVICES.........................................................................................41
9.1 Availability of Ancillary Services......................................................................41
9.2 Operational Considerations..............................................................................41
9.3 Future Enhancements.....................................................................................41
10. LIMITATION OF LIABILITY AND EXCLUSIVE REMEDIES.............................................................41
10.1 CONSEQUENTIAL DAMAGES................................................................................41
10.2 SOLE REMEDIES FOR FAILURE TO DELIVER OR RELATED BREACHES.............................................42
10.3 SOLE REMEDY FOR LATE COMMERCIAL OPERATIONS...........................................................42
10.4 SOLE TERMINATION FOR DEFAULT REMEDIES................................................................42
10.5 DIRECT DAMAGES FOR OTHER BREACHES....................................................................42
11. DISAGREEMENTS..............................................................................................43
11.1 Negotiations.........................................................................................43
11.2 Arbitration..........................................................................................43
11.3 Costs................................................................................................44
11.4 Settlement Discussions...............................................................................44
11.5 Preliminary Injunctive Relief........................................................................45
11.6 Obligations to Pay Charges and Perform...............................................................45
12. ASSIGNMENT; PROJECT FINANCING; AND TRANSFER OF UNITS.......................................................45
12.1 Assignment...........................................................................................45
12.2 Transfers and Change of Control......................................................................45
12.3 Consent to Assignment to Lender......................................................................46
12.4 Potential Changes in Ownership or Control of Aquila..................................................47
12.5 Transfers Not in Accordance Herewith.................................................................47
13. DEFAULT, TERMINATION AND REMEDIES; NOTICE OF DEFAULT.......................................................47
13.1 Events of Default of Seller..........................................................................47
13.2 Buyer Default........................................................................................48
13.3 Remedies.............................................................................................49
13.4 Special Termination for Chronic Poor Availability....................................................49
14. REPRESENTATIONS AND WARRANTIES.............................................................................49
14.1 Representations and Warranties of Seller.............................................................49
14.2 Representations and Warranties of Buyer..............................................................50
15. INDEMNIFICATION............................................................................................51
16. NOTICES....................................................................................................51
17. CONFIDENTIALITY............................................................................................52
18. SECURITY...................................................................................................53
{/TABLE}
ii
{PAGE}
{TABLE}
{S} {C}
18.1 Seller Guarantees....................................................................................53
18.2 Buyer Security.......................................................................................53
19. FORCE MAJEURE..............................................................................................54
19.1 Definition...........................................................................................54
19.2 Obligations Under Force Majeure......................................................................55
19.3 Force Majeure Not Forced Outage......................................................................55
19.4 No Economic Force Majeure............................................................................55
19.5 Continued Payment Obligation.........................................................................56
19.6 Extended Force Majeure Event After Commercial Operations.............................................56
20. INTERCONNECTION AND TRANSMISSION...........................................................................57
20.1 Facilities...........................................................................................57
20.2 Transmission.........................................................................................57
21. TAXES......................................................................................................57
21.1 Applicable Taxes.....................................................................................57
21.2 Contested Taxes......................................................................................58
21.3 Other Charges........................................................................................58
22. MISCELLANEOUS PROVISIONS...................................................................................58
22.1 Non-Waiver...........................................................................................58
22.2 Relationship of Parties..............................................................................58
22.3 Successors and Assigns...............................................................................58
22.4 Governing Laws.......................................................................................58
22.5 Counterparts.........................................................................................59
22.6 Third Party Beneficiaries............................................................................59
22.7 Financial Information................................................................................59
23. APPOINTMENT OF AQUILA AS UCU'S AGENT.......................................................................59
23.1 Appointment..........................................................................................59
23.2 Presumption of Authority.............................................................................59
24. ENTIRE AGREEMENT AND AMENDMENTS............................................................................59
{/TABLE}
APPENDICES
Appendix A Design Limits and Other Dispatch Restrictions
Appendix B Testing
Appendix C Communications
Appendix D Reporting Forms
Appendix E Equivalent Availability Calculations
Appendix F Output and Heat Rate Adjustment Curve
Appendix G Non-Billable Generation
Appendix H Forms of Guarantees
Appendix I Scheduled Maintenance Outages
Appendix J Heat Rate Boundary Diagram and Site/Switchyard Map
Appendix K Not Used
Appendix L One Line Diagram
Appendix M Milestone Schedule
iii
{PAGE}
POWER SALES AGREEMENT
THIS POWER SALES AGREEMENT (including Appendices, this "Agreement")
dated as of June 30, 2000, is entered into between Aquila Energy Marketing
Corporation ("Aquila"), and UtiliCorp United Inc. ("UCU") (Aquila and UCU
referred to herein collectively as "Buyer"), and Elwood Energy III, LLC, a
Delaware limited liability company ("Seller"); Buyer and Seller are sometimes
referred to herein individually as a "Party" and collectively as the "Parties");
W I T N E S S E T H:
WHEREAS, Seller owns and operates an electric generating facility in
Elwood, Illinois and is engaged in the generation and sale of Electric Energy,
Capacity and associated Ancillary Services; and
WHEREAS, Seller is building the Facility which will be located at the
Elwood Station; and
WHEREAS, Seller anticipates the Commercial Operations Date of Units 7
and 8 of the Facility will occur on or prior to July 1, 2001; and
WHEREAS, Buyer desires to receive and purchase, and Seller desires to
deliver and sell the Electric Energy, Capacity and associated Ancillary Services
from Units 7 and 8 of the Facility and Replacement Power, pursuant to this
Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, the Parties hereto agree as follows:
1. Definitions and Interpretation.
------------------------------
1.1 Definitions. As used in this Agreement, the terms set forth
-----------
below in this Section 1 shall have the respective meanings so set forth.
"ASME" means the American Society of Mechanical Engineers.
"Actual Heat Rate" for any period shall be the Heat Rate which is
determined based upon actual performance of the Facility and the Elwood II Units
during such period and calculated by the quotient of the aggregate gas energy
consumption in Btus for Units 7 and 8 (not including gas consumed to generate
Test Energy, incremental gas consumed (at a Heat Rate above the Net Heat Rate)
to generate Incremental Energy to the extent used to offset what would otherwise
be a Forced Derating, or gas consumed during Failed Starts), and the Elwood II
Units as measured by the Station Fuel Meter divided by the Electric Energy
output (in kWh) produced by the same Units and the Elwood II Units during the
identical period as measured by the Revenue Meter.
"Affected Party" has the meaning set forth in Section 19.1.
{PAGE}
"Affiliate" means, when used with respect to any Person, any Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, the term "controlling" (and, with correlative
meanings, the terms "controlled by" and "under common control with") shall mean
the possession of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or by contract or agency or otherwise.
"Aggregate Delay LD Cap" means $ 21,215,800, less any Delay Book Out
Charges paid by Seller.
"Ancillary Services" has the meaning set forth in Section 9.
"Availability Adjustment" has the meaning set forth in Section 7.1.3.
"Available" means a state in which the Facility is capable of providing
full service, whether or not it is actually in operation or in service.
"Average Summer Partial Peak Availability" means the Equivalent
Availability during Partial Peak Hours averaged over all months of a given
Summer Period, calculated as:
1 - [(sum total of FOH + EFDH)/(sum total of Partial Peak period
hours)].
"Average Summer Super Peak Availability" means the Equivalent
Availability during Super Peak Hours averaged over all months of a given Summer
Period, calculated as:
1 - [(sum total of FOH + EFDH)/(sum total of Super Peak period hours)].
"Bankruptcy" means any case, action or proceeding under any bankruptcy,
reorganization, debt arrangement, insolvency or receivership law or any
dissolution or liquidation proceeding commenced by or against a Person and, if
such case, action or proceeding is not commenced by such Person, such case or
proceeding shall be consented to or acquiesced in by such Person or shall result
in an order for relief or shall remain undismissed for 90 days.
"Bankruptcy Event" means with respect to a Party, an assignment by such
Party for the benefit of creditors or the filing of a case in Bankruptcy or any
proceeding under any other insolvency law under which such Party is debtor in
bankruptcy.
"Base Fuel Charge" means the Fuel Index plus either 10 cents/MMBTU or
15 cents/MMBTU, as applicable under Section 7.2.5.1 or Section 7.2.5.2.
"Btu" means British thermal unit.
"Business Day" means each weekday (Monday through Friday) excluding
NERC Holidays.
"Buyer Event of Default" has the meaning specified in Section 13.2.
2
{PAGE}
"Cap Date" has the meaning specified in Section 3.3.5.
"Capacity" means the capability measured in kW of Seller to produce
Electric Energy at the Facility or deliver Replacement Power to the Point of
Delivery or the Replacement Power Delivery Point, as applicable.
"Capacity Bonus" has the meaning set forth in Section 7.1.4.
"Capacity Charge" has the meaning set forth in Section 7.1.
"Capacity Rate" has the meaning set forth in Section 7.1.2
"Capacity Rate Reduction Amount" has the meaning set forth in Section
3.3.6.
"Cap Date" has the meaning set forth in Section 3.3.5.
"Change in Law" means, after the Effective Date, the enactment,
adoption, promulgation, modification or repeal or a material modification or
change in the administrative or judicial application by any Governmental Agency
of any applicable Requirement of Law.
"ComEd" means Commonwealth Edison Company or its successors and
assigns.
"ComEd/Elwood Switchyard" means that switchyard that provides
interconnection services to the Facility as identified Appendix J.
"Commercial Operations" means that a Unit or the Facility shall have
achieved all of the conditions specified in Section 3.2.
"Commercial Operations Date" means the day on which a Unit or the
Facility achieves Commercial Operations.
"Commercial Operations Delay Period" is the period of time, if any,
between the Target COD and the Commercial Operations Date.
"Commission" or "Commissioning" as applicable, means the test and start
up process leading up to Commercial Operations.
"Compressor Wash" has the meaning set forth in Section 6.5.
"Confidential Information" has the meaning specified in Section 17.
"Contract Year" means (i) for the first Contract Year, the period
commencing on July 1, 2001 and ending on the December 31 occurring immediately
thereafter, and (ii) for all other Contract Years (other than the final Contract
Year), the calendar year, except that the final Contract Year shall be the
period from the first day of the calendar year (during which the Term will
expire) through the expiration of the Term.
3
{PAGE}
"Cover Period" means a period during which the Seller is permitted
pursuant to this Agreement to deliver or cause to be delivered Replacement Power
or Substitute Power to Buyer. Such periods shall include only the following: (i)
any time during Commercial Operations Delay Period; (ii) a Forced Outage or a
Forced Derating; (iii) a period that could reasonably be likely to result in a
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