|
POWER SUPPLY AGREEMENT
This POWER SUPPLY AGREEMENT (“Agreement”), is made and entered into
as of October ___, 1999, by and between PP&L, Inc., a corporation organized under
the laws of the Commonwealth of Pennsylvania, having its principal business at Two
North Ninth Street, Allentown, PA 18101-1179, hereinafter referred to as “Seller,” and
_________________, a corporation organized under the laws of _________________,
having its principal business at ______________________________, hereinafter
referred to as “Buyer,” and (individually, the “Party” and collectively, the “Parties”). The
definitions set forth in the Definitional Annex apply to this Agreement.
WHEREAS, Buyer is an Electric Power Supplier and/or an Electricity Supplier, is
not an end user of Power, and wishes to purchase Power for the purpose of supplying
its competitively-acquired retail load located within the portions of the States of New
Jersey and Delaware that are included in the PJM Control Area;
WHEREAS, Seller is authorized by FERC to engage in wholesale Power
transactions and to resell transmission rights and associated ancillary services at
market based prices; and such transactions shall be made pursuant to Seller’s FERC
Electric Tariff, Revised Volume No. 5;
WHEREAS, Seller’s offer to make Power available under this Agreement shall
expire on November 5, 1999;
NOW THEREFORE, in consideration of the mutual agreements, covenants and
conditions herein contained, and intending to be legally bound, Buyer and Seller hereby
agree as follows:ARTICLE 1MONTHLY RESERVATION
1.1 Upon execution of this Agreement, Buyer shall nominate a Capacity
Reservation for each month of the term of the Agreement. Buyer’s purchases under
this Agreement shall not exceed the applicable Capacity Reservation. Buyer’s Capacity
Obligation is its daily Accounted-For-Obligation under the Reliability Assurance
Agreement associated with Buyer’s retail load that is located within the States of New
Jersey and Delaware and the PJM Control Area. ARTICLE 2CONTRACT QUANTITY
2.1 Capacity Requirement.
(a) No later than October 29, 1999, Buyer shall nominate an amount of
Capacity required to meet its maximum forecasted Capacity Obligation (“Capacity
Requirement”). Buyer’s Capacity Requirement shall not exceed Buyer’s Capacity
Reservation.(b) By 10 a.m. on each Business Day during the term on this
Agreement, Buyer shall inform Seller of PJM’s most recent determination of Buyer’s
Capacity Obligation for each day for which PJM has transmitted such a determination to
Buyer. Seller will supply Buyer with sufficient Capacity to meet Buyer’s Capacity
Obligation at the time that such Capacity Obligation may no longer be modified under
applicable PJM rules and procedures, up to Buyer’s nominated Capacity Requirement.
If any modification of Buyer’s Capacity Obligation is transmitted to Buyer subsequent to
10 a.m. on a Business Day and Buyer’s Capacity Obligation may thereafter no longer
be modified under applicable PJM rules and procedures, Buyer will inform Seller of
such modification within one hour of receiving such modification from PJM.
(c) At Seller’s sole discretion, Seller may fulfill Buyer’s Capacity
Obligation with either Capacity Resources or Capacity Credits. At any time prior to the
use by Buyer of Capacity Credits purchased from Seller under this Agreement, Seller
may substitute Capacity from a Capacity Resource for a like quantity of Capacity
Credits. If Seller provides Buyer with Capacity from a Capacity Resource, Buyer may
not convey such Capacity to any person other than Seller without first obtaining Seller’s
written permission.
2.2 Load Following Energy. Buyer shall specify an amount of energy required
to meet its hourly retail load inside the PJM Control Area net of other sources of energy
by 10:00 a.m. (EST) one (1) Business Day prior to the day on which the Load Following
Energy is required. Seller shall supply the amount of Load Following Energy specified
by Buyer, not to exceed the full amount of energy required to meet Buyer’s hourly retail
load schedule associated with Buyer’s retail customers located within the PJM Control
Area. Seller shall supply hourly load and hourly energy supply in whole megawatts.
ARTICLE 3ENERGY IMBALANCE
3.1 Seller shall assume responsibility for and shall bear any energy imbalance
and penalty charges as a result of the failure to supply the amount of Load Following
Energy that Seller is obliged under this Agreement to provide to Buyer. Buyer shall
have responsibility for any charges resulting from mismatches between actual metered
consumption and Buyer’s hourly schedule. ARTICLE 4
DELIVERY POINTS AND RELIABILITY GUIDELINES
4.1 Delivery Point. The Delivery Point shall be the PP&L Zone.
4.2. Reliability Guidelines. Each Party agrees to adhere to accepted Good
Utility Operating Practice and specifically adhere to the applicable operating policies,
criteria and/or guidelines of the North American Electric Reliability Council (“NERC”)
and any regional or subregional requirement.ARTICLE 5TITLE
5.1 Title to, possession of, and risk of loss of Power Scheduled and received
or delivered hereunder shall transfer from Seller to Buyer at the Delivery Point. Seller
warrants that at the time of delivery Seller shall have good title to the Power sold and
delivered hereunder and the right to sell such Power to Buyer.ARTICLE 6
CONTRACT PRICE
6.1 The Contract Price shall consist of: (a) an Option Premium; (b) a monthly
charge for Capacity Reservation; and (c) a monthly charge for Load Following Energy.
(a) Option Premium. At the time of execution of this Agreement, Buyer shall
pay an Option Premium of (i) $170,000 plus (ii) $300 per megawatt month multiplied by
the largest Monthly Reservation nominated by Buyer under this Agreement.
(b) Capacity Reservation. The monthly Capacity charge shall equal the
product of Buyer’s monthly Capacity Requirement nomination multiplied by the rate for
Capacity. The rate for Capacity shall equal the Capacity Deficiency Rate plus any
additional charges to Seller attributable to the provision of Capacity under this
Agreement.
(c) Load-Following Energy. The monthly charge for load-following energy
shall equal the product of the amount of scheduled energy (including losses) multiplied
by 110% of the actual hourly PJM Locational Marginal Price at the Bus of the PJM Zone
in which the energy is delivered. ARTICLE 7
TRANSMISSION AND FIXED TRANSMISSION RIGHTS
7.1 Responsibility for Transmission. Unless otherwise agreed to or specified
in this Agreement, Seller shall pass through to Buyer all charges imposed on Seller by
any Transmitting Utility in connection with the delivery of Load Following Energy.
7.2 Fixed Transmission Rights. Except as specified in this Article, the sale of
Capacity or Capacity Credits under this Agreement confers no right to energy or Fixed
Transmission Rights (“FTRs”) associated with any Capacity Resources.
(a) When directed to do so by Seller, Buyer shall request FTRs from PJM in
connection with Capacity from Capacity Resources purchased from Seller. Unless so
directed by Seller, Buyer may not otherwise claim or request the creation of any FTRs
in connection with Capacity from Capacity Resources purchased from Seller.
(b) At any time during the term of this Agreement, at the direction of Seller,
Buyer shall revise its Resource Plan submitted to PJM and request FTRs in connection
with capacity from Capacity Resources purchased from Seller.
(c) Any direction from Seller to request FTRs from PJM shall specify the
quantity to be claimed and the transmission path (Network Resource and Network
Customer Load or Load Aggregation Zone).
(d) Upon notification from PJM that FTRs created as a result of a direction
given pursuant to this Article have been approved, Buyer shall immediately convey all
of its right title, and interest in such FTRs to Seller at no additional charge or credit.
ARTICLE 8TERM OF AGREEMENT
8.1 This Agreement shall apply to sales of Capacity and Load Following
Energy for delivery no earlier than on November 1, 1999 and no later than December
31, 1999.ARTICLE 9LIQUIDATED DAMAGES
9.1 In the event Seller fails to Schedule and to deliver the Power, where such
failure was not excused by Force Majeure or by Buyer’s failure to perform, Seller shall
pay Buyer (on the date payment would otherwise be due under this transaction) an
amount for each Mwhr of such deficiency equal to the positive difference, if any,
between: (i) the price at which Buyer is able to purchase or otherwise receive such
deficiency quantity of Power acting in a commercially reasonable manner (adjusted to
reflect difference in transmission costs, if any) minus (ii) the Contract Price; provided,
however, in no event shall such amounts include any penalties, ratcheted demand or
similar charges.
9.2 In the event Buyer fails to Schedule and to receive the Power, where such
failure was not excused by Force Majeure or by Seller’s failure to perform, Buyer shall
pay Seller (on the date payment would otherwise be due under this transaction) an
amount for each Mwhr of such deficiency equal to the positive difference, if any,
between: (i) the Contract Price reflected herein minus (ii) the price at which Seller is
able to sell or otherwise dispose of such deficiency quantity of power acting in a
commercially reasonable manner (adjusted to reflect differences in transmission costs,
if any); provided, however, in no event shall such amounts include any penalties,
ratcheted demand or similar charges.
9.3 Both Parties hereby stipulate that the payment obligations set forth above
are reasonable in light of the anticipated harm and the difficulty of estimation or
calculation of actual damages and each Party hereby waives the right to contest such
payments as an unreasonable penalty. In the event either Party fails to pay such
amounts in accordance with this Article when due, the aggrieved Party shall have the
right to: (i) suspend performance until such amounts plus interest at the Interest Rate
have been paid, and/or (ii) exercise any remedy available at law or in equity to enforce
payment of such amount plus interest at the Interest Rate. The remedy set forth herein
shall be the sole and exclusive remedy of the aggrieved Party for the failure of the other
Party to sell or purchase the Scheduled Energy and all other damages and remedies
are hereby waived.
9.4 As an alternative to the damages provisions, if the Parties mutually agree
in writing, the nonperforming Party may Schedule deliveries or receipts, as the case
may be, pursuant to such terms as the Parties agree in order to discharge some or all
of the obligation to pay damages. In the absence of such agreement, the damages
provisions of this Article shall apply.ARTICLE 10BILLING AND PAYMENT
10.1 Statements. Seller shall render to Buyer for each calendar month during
the term of this Agreement a statement or statements setting forth the total quantity of
Power the Buyer was obligated to purchase under this Agreement during the preceding
month and the amounts due to Seller from Buyer under this Agreement .
10.2 Billing and Payments. Unless otherwise informed by Seller by written
notice providing at least three (3) days notice, statements shall be submitted monthly
within ten (10) days following the last day of each month and shall be paid by each
Party on or before the later of fifteen (15) days after the date the bill is received or the
20th day of the month. Payments shall be made by Automated Clearing House
(“ACH”), wire transfer to designated bank account or other generally accepted
electronic funds transfer method as directed by Seller in Seller’s discretion. Payment
shall be deemed to have been made when Seller’s financial institution either initiates
the transfer or receives the funds. If informed by Seller by written notice of a different
statement and payment schedule, Buyer agrees to follow such schedule. Buyer will
pay all amounts set forth in statements on or before the date that such amounts are
due. Except as provided in Section 10.3, if Buyer fails to pay all of the amount of any
statement when that amount becomes due, Buyer shall pay Seller a late charge on the
unpaid balance that shall accrue on each calendar day from the due date at the Interest
Rate. Except in the case of a disputed bill, if Buyer fails to pay amounts due to Seller
by the date that such amounts are due, Seller may suspend performance pending
receipt of full payment with interest (and shall have no further duty to the Buyer as a
result of such action). Disputed bills shall be handled as stated below.
10.3 Billing Disputes. In the event any portion of any bill is in dispute, the
undisputed amount shall be paid to Seller and a detailed written explanation of the
basis for the dispute shall be submitted by Buyer within the time periods specified for
payment in Section 10.2. The Parties shall use their best efforts to attempt to resolve
such disputes on a timely basis. Upon determination of the correct billing amount, the
adjusted bill shall be paid promptly after such determination with interest at the Interest
Rate accrued in accordance with Section 10.2 and computed from the date payment is
received to the date the adjustment is made. If the Parties are unable to resolve the
dispute, either Party may exercise its available administrative or legal remedies,
including those set forth in Section 10.6 below.
10.4 Audit. Each Party or any third party representative of a Party has the right
at its sole expense and during normal working hours, to examine the records of the
other Party to the extent reasonably necessary to verify the accuracy of any statement,
charge or computation made pursuant to the provisions of this Agreement. If any such
examination reveals any inaccuracy in any statement, the necessary adjustments in
such statement and the payments thereof shall be made prior to the lapse of two years
from the rendition of such statement, and provided further that the rights set forth in the
first sentence of this Section 10.4 will survive until two years after termination of this
Agreement .
10.5 Records. Each Party shall keep such records as may be necessary to
afford the other a clear history of all deliveries or receipts of Power under this
Agreement. Records shall be maintained for a period necessary to comply with Section
10.4 and shall be made available as necessary to verify the accuracy of bills submitted
under this Agreement 10.6 Dispute Resolution.
(a) In the event of a dispute between the Parties arising under this Agreement,
the Parties will work together in good faith to resolve the dispute. If the Parties are
unable to resolve such dispute between themselves within five days after written
notification by one Party to the other of the existence of such dispute, they shall
immediately refer such matter to their internal upper management for resolution. If the
management of the Parties is unable to resolve the dispute within ten days after the
matter is brought to their level for review, either Party may bring a claim or suit in
accordance with the provisions of Section 16.6 of this Agreement, and agrees that
service of process may be made upon it in any legal proceeding relating to this
Agreement at the address indicated in Section 16.4, and hereby waives and agrees not
to assert, in a motion, as a defense or otherwise, that any such proceeding is brought in
an inconvenient forum or that the venue thereof is improper. Each Party shall pay its
own attorneys' fees and expenses, except that if the prevailing Party is required to
initiate proceedings to enforce the award or confirm judgment, the prevailing Party shall
be entitled to recover its costs and attorneys' fees associated with such action. EACH
PARTY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL.
(b) Notwithstanding the dispute procedure provided in this section 10, the
Parties have no obligation to use such dispute resolution process where the dispute
involves confidentiality or the infringement of intellectual property rights. In the event of
a breach of confidentiality or a claim of infringement under this Agreement, the Party
seeking redress shall have the right to bring a claim or suit in accordance with Section
16.6 immediately.ARTICLE 11INDEMNIFICATION
11.1 Seller’s Indemnification of Buyer. Seller hereby agrees to indemnify,
defend and hold harmless Buyer, its agents, servants and Affiliates and the respective
officers, directors, employees and representatives (collectively, “Buyer’s Indemnitees”)
of each, from and against any and all losses, claims, damages or liabilities (including
reasonable attorneys’ fees actually incurred including, without limitation, penalties or
fines imposed by government authorities) arising out of the fraud, negligence, or willful
misconduct of Seller relating to Power delivered under this Agreement until such Power
has been delivered to Buyer at the Delivery Points including, without limitation, the loss
of/or claims for loss or damage to property, except to the extent caused by the fraud,
negligence or the willful misconduct of the Buyer’s Indemnitees and provided that Seller
shall be promptly notified in writing of any such claim or suit brought against any such
Buyer Indemnitee. The foregoing notwithstanding, Seller’s obligations under this
Agreement towards any Buyer Indemnitee are conditioned upon such Buyer Indemnitee
providing such cooperation as Seller may reasonably request in connection with its
defense or settlement of the claim or suit against such Buyer Indemnitee.
11.2 Buyer’s Indemnification of Seller. Buyer hereby agrees to indemnify,
defend and hold harmless Seller, its agents, servants and Affiliates and the respective
officers, directors and employees and representatives (collectively, “Seller’s
Indemnitees”) of each, from and against any and all losses, claims, damages or
liabilities to third parties (including reasonable attorneys’ fees actually incurred
including, without limitation, penalties or fines imposed by government authorities)
arising out of the fraud, negligence, or willful misconduct of Buyer relating to Power
delivered under this Agreement after such Power has been delivered to Buyer at and
from the Delivery Points including, without limitation, the loss of/or claims for loss or
damage to property, except to the extent caused by the fraud, negligence or the willful
misconduct of the Seller’s Indemnitees and provided that Buyer shall be promptly
notified in writing of any such claim or suit brought against any such Seller Indemnitee.
The foregoing notwithstanding, Buyer's obligations under this Agreement towards any
Seller Indemnitee are conditioned upon such Seller Indemnitee providing such
cooperation as Buyer may reasonably request in connection with its defense or
settlement of the claim or suit against such Seller Indemnitee.ARTICLE 12
ASSIGNMENT AND SUCCESSION
12.1 Neither Party shall assign this Agreement or its rights hereunder without
the prior written consent of the other Party, which consent shall not be unreasonably
withheld or delayed. Upon any assignment made in compliance with this Section, this
Agreement shall inure to and be binding upon the successors and permitted assigns of
the assigning Party. Notwithstanding the foregoing, either Party may, without the need
for consent from the other Party (and as long as such Party remains fully liable
hereunder), (a) transfer, pledge, or assign this Agreement as security for any financing
with financial institutions; or (b) transfer or assign this Agreement to an Affiliate of such
Party. Nothing in this Section shall preclude any party from transferring or assigning
this Agreement to any person or entity succeeding to all or substantially all of the assets
of such Party; provided, however, that any such assignee shall agree to be bound by
the terms and conditions hereof pursuant to an agreement satisfactory to the
nonassigning Party and that all the persons obligated to fulfill the assigning Party’s
obligations under the Agreement after the assignment shall have substantially
equivalent financial capability to that of all other persons obligated to fulfill the assigning
Party's obligations under the Agreement before the assignment. References to any
Party named herein shall include such Party’s successors and permitted assigns.
ARTICLE 13LIMITATION OF LIABILITY AND FORCE MAJEURE
13.1 Force Majeure. In the event either Party is rendered unable, by an event
of Force Majeure, to carry out wholly or in part its obligations under this Agreement and
such Party gives notice and full particulars of such event of Force Majeure to the other
Party as soon as practicable after the occurrence of the event relied on, then the
obligations of the Party affected by such event of Force Majeure other than the
obligation to make payments then due or becoming due hereunder, shall be suspended
from the inception and throughout the period of continuance of any such inability so
caused, but for no longer period, and such event of Force Majeure shall, so far as and
as soon as practicable, be remedied by application of Good Utility Operating Practice;
provided however, that no provision of this Agreement shall be interpreted to require
Seller to deliver, or Buyer to receive, Power at points other than the Delivery Point(s) or
to require Buyer to accept or Seller to make delivery of any remaining amounts of
Power following resolution of the Force Majeure.
13.2 Limitation of Liability. FOR BREACH OF ANY PROVISION FOR WHICH
AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED IN THIS
AGREEMENT, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED AS
SET FORTH IN SUCH PROVISION, AND ALL OTHER DAMAGES OR REMEDIES
HEREBY ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS
EXPRESSLY PROVIDED, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE
LIMITED TO DIRECT DAMAGES ONLY AND ALL OTHER DAMAGES AND
REMEDIES ARE WAIVED. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO
THE OTHER PARTY FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE,
EXEMPLARY OR INDIRECT DAMAGES IN TORT, FOR CONTRACT OR OTHERWISE.ARTICLE 14TAXES
14.1 Allocation of and Indemnity for Taxes. The Contract Price paid hereunder
includes full reimbursement for and Seller is liable for and shall pay or cause to be paid,
or reimburse Buyer if Buyer shall have paid, all Taxes applicable to the Power sold
hereunder prior to the Delivery Point(s) (“Seller’s Taxes”). In the event Buyer is
required to remit any of Seller’s Taxes, the amount thereof shall be deducted from any
sums becoming due to Seller hereunder. Seller shall indemnify, defend and hold Buyer
harmless from any liability for all Seller’s Taxes. The Contract Price does not include
reimbursement for and the Buyer is liable for and shall pay, cause to be paid or
reimburse Seller if Seller shall have paid, all Taxes applicable for the Power sold
hereunder at and after the Delivery Point(s) (“Buyer’s Taxes”). Buyer shall indemnify,
defend and hold Seller harmless from any liability for all Buyer’s Taxes.
14.2 Automatic Tax Adjustment. If, and only if, agreed to in writing by the
Parties, an adjustment for tax changes shall apply, as appropriate, to the Contract Price
as billed under this Agreement. In such case, the Contract Price will be adjusted, as
required, by including an automatic pass-through of increases in federal, state, or local
taxes, including new environmental taxes, or tax rates applicable to the Power, based
on actual tax expense incurred by Seller.
14.3 Gross Receipts Tax. Buyer shall be responsible for collecting
Pennsylvania gross receipts tax (4.4%) from its retail customers and remitting the
required amount of gross receipts tax to the Commonwealth of Pennsylvania.
14.4 Cooperation. Both Parties shall use reasonable efforts to administer this
Agreement and implement the provisions in accordance with the intent to minimize
Taxes.ARTICLE 15DEFAULT, SECURITY AND RESPONSIBILITY
15.1 Default, Security and Responsibility Events. Except as otherwise
provided in Section 9, in the event either Party (“Defaulting Party”) (i) makes an
assignment or any general arrangement for the benefit of creditors; (ii) defaults in
payment or performance of any obligation to the other Party under this Agreement
provided that such default in payment or performance shall be deemed a default under
this Article if not cured within five (5) Business Days following written notice by the non-
defaulting Party of such default in payment or performance; (iii) files a petition or
otherwise commences, authorizes, or acquiesces in commencement of a proceeding or
cause under any bankruptcy or similar law for the protection of creditors or have such
petition filed or proceedings commenced against it; (iv) otherwise becomes bankrupt or
insolvent (however evidenced); or (v) fails to give adequate security for or assurance of
its ability to perform its further obligation under this Agreement within seventy-two (72)
hours of a reasonable request by the other Party, then the non-defaulting Party upon
written notice has the right to withhold or suspend deliveries or receipts or terminate this
Agreement pursuant to Section 15.2. Subsections (i) – (v) above shall each be
considered an “Event of Default.” 15.2 Early Termination.
(a) If an Event of Default occurs with respect to a Party at any time during the
term of this Agreement, the other Party (the “Notifying Party”) may (i) upon written
notice to the other Party, which notice shall be given no later than sixty (60) days after
the discovery of the occurrence of the Event of Default, terminate this Agreement as of
a date determined by the Notifying Party (“Early Termination Date”); (ii) withhold any
payment due under this Agreement; and/or (iii) suspend performance under this
Agreement provided, however, upon the occurrence of any Event of Default listed in
clause (i), (iii) or (iv) of Section 15.1, this Agreement shall automatically terminate,
without notice, and without any other action by either Party as if an Early Termination
Date had been declared immediately prior to such event. If an Early Termination Date
has been designated or deemed to occur, the Notifying Party shall in good faith
calculate its damages resulting from the termination of this Agreement and all ongoing
(the “Termination Payment”) as set forth below.
(b) When the Notifying Party is Seller, the Termination Payment will be the
positive difference, if any, between (i) the payments (discounted to the Early
Termination Date at a rate per annum equal to the average yield to maturity of United
States treasury obligations having a comparable maturity dates) that Seller would have
received for the remaining term of this Agreement at the agreed to quantity(ies) and
price(s) had the Agreement not been terminated; and (ii) the payments (discounted in
the same manner as set forth above), for the remaining term, as either quoted by a
bona fide third party offer or which are reasonably expected to be available in the
market under replacement contracts for this Agreement.
(c) When the Notifying Party is Buyer, the Termination Payment will be the
positive difference, if any, between (i) the payments (discounted to the Early
Termination Date at a rate per annum equal to the average yield to maturity of United
States treasury obligations having a comparable maturity dates) that Buyer would make
under replacement contracts (with the same quantities and substantially similar terms
and conditions) for the remaining term of this Agreement, as either quoted by a bona
fide third party offer or which are reasonably expected to be available in the market;
and (ii) the payments (discounted in the same manner as set forth above) that Buyer
would pay under this Agreement for its remaining term at the agreed to quantity(ies)
and price(s) had this Agreement not been terminated.
(d) To ascertain the market prices of a replacement contract, the Notifying
Party may consider, among other valuations, quotations from leading dealers in electric
energy purchase and sale contracts and other bona fide third party offers, all adjusted
for the length of the remaining term and differences in transmission costs, if any.
(e) The Notifying Party shall give the Defaulting Party written notice of the
amount of the Termination Payment along with a statement detailing the calculation of
such amount. The Defaulting Party shall pay the Termination Payment to the Notifying
Party immediately upon receipt of such notice. At the time for payment of any amount
due under this Section, each Party shall pay to the other Party all additional amounts
payable by it pursuant to this Agreement, but all such amounts shall be netted and
aggregated with any Termination Payment payable hereunder. Any Party failing to
make payment when due hereunder shall pay interest on the overdue balance from the
due date at the Interest Rate.
(f) Notwithstanding the foregoing, to the extent an Event of Default arises as
a result of the failure to Schedule, deliver or receive Power, the Termination Payment
shall equal an amount calculated in accordance with Article 9 of this Agreement.
ARTICLE 16MISCELLANEOUS
16.1 Regulatory. It is understood by the Parties that this Agreement and
performance hereunder is subject to all present and future valid and applicable laws,
orders, statutes, regulations, and the approval of the regulatory bodies (state or federal)
having jurisdiction over Buyer, Seller or this Agreement.
16.2 Authorizations. The Parties hereto represent that they have (or will have
upon the effective date of this Agreement) all appropriate authorizations necessary or
proper to consummate and carry out their obligations under this Agreement.
16.3 Monitoring and Recording. Each Party acknowledges and consents to the
monitoring and recording of all telephone conversations between its representatives
and the representatives of the other Party. Any recording of such conversations may
be introduced to prove the intent of this Agreement; provided however, that nothing of
such conversations herein shall be construed as a waiver of any objection to the
introduction of such evidence on the grounds of relevance.
16.4 Notices. Any notice, request, demand, statement, or payment provided
for in this Agreement shall be confirmed in writing, unless otherwise noted, and shall be
made as specified below; provided, however, that notices of interruption and
communications to Transmitting Utility(ies) may be provided verbally, effective
immediately and, upon request, confirmed in writing. A notice sent by facsimile
transmission shall be deemed received by the close of the Business Day on which such
notice was transmitted or such earlier time as confirmed by the receiving Party and
notice by overnight mail or courier shall be deemed to have been received two (2)
Business Days after it was sent or such earlier time as is confirmed by the receiving
Party unless it confirms a prior verbal communication in which case any such notice
shall be deemed received on the day sent. Notices shall be addressed to the Parties
as follows or to such other address as Buyer or Seller shall from time to time designate
by letter properly addressed:Buyer:GENERAL NOTICES & CORRESPONDENCE
BILLING/PAYMENT CORRESPONDENCEFax:Seller:GENERAL NOTICES & CORRESPONDENCE
BILLING/PAYMENT CORRESPONDENCEPP&L, Inc.PP&L, Inc.Two North Ninth Street
Two North Ninth StreetAllentown, PA 18101-1179Allentown, PA 18101-1179
Attn: Energy Marketing Center (GENTW15)Attn: Molly Minarik (GENN2B)PHONE:
FAX: (610) 774-6523PHONE: (610) 774-5552FAX: (610) 774-4511
16.5 Entirety. This Agreement and the Exhibits hereto constitute the entire
agreement between the Parties hereto. There are no prior or contemporaneous
agreements or representations affecting the same subject matter other than those
herein expressed. Except for those matters which, in accordance with this Agreement,
may be resolved by the Parties and documented electronically, it is further agreed that
no amendment, modification or change herein shall be enforceable, except as
specifically provided for in this Agreement, unless produced in writing and executed by
both Parties.
16.6 Governing Law and Venue. If any proceeding or action on or respecting
this Agreement is brought by one of the Parties against the other Party, including any
counterclaims and cross claims asserted in any such proceeding or action, this
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania, without regard to Conflict of Law principles. Any such
proceeding shall be brought in the Courts of the Commonwealth of Pennsylvania,
except to the extent that the FERC has exclusive jurisdiction over the subject matter of
the proceeding.
16.7 Confidentiality. Neither Party shall disclose the terms of this Agreement to
any third party absent the express written permission of the other Party except where 1)
necessary to comply with any applicable law, order, regulation or exchange rule;
provided, however, that each Party shall notify the other Party promptly upon receipt of
any request to it in any proceeding that could result in an order requiring such
disclosure and the Party subject to such request shall use reasonable efforts to prevent
or limit the disclosure; or 2) necessary to effectuate transmission of electricity subject to
this Agreement. However, nothing herein shall prevent either Party from disclosing
simple price and volume terms to a third party solely for the purpose of it being used in
conjunction with other similar information for establishing electric price indices by a
qualified independent entity provided that such information cannot be used to identify
the Parties to this Agreement. Other than the specific terms specified in this paragraph,
the provisions of this Agreement are not subject to a confidentiality obligation. The
Parties shall be entitled to all remedies available at law or in equity to enforce, or seek
relief in connection with, this confidentiality obligation; provided, however, that all
monetary damages shall be limited to actual direct damages and a breach of this
section shall not give rise to the right to suspend or terminate this Agreement.
16.8 Non-Waiver. No waiver by either Party hereto of any one or more defaults
by the other in the performance of any of the provisions of this Agreement shall be
construed as a waiver of any other default or defaults whether of a like kind or different
nature.
16.9 Severability. Except as otherwise stated herein, any provision, article or
section of this Agreement that is declared or rendered unlawful by a court of law or
regulatory agency with jurisdiction over the Parties, or deemed unlawful because of
statutory change, will not otherwise affect the lawfulness, enforceability and applicability
of the remaining provisions, articles or sections of this Agreement nor shall it affect the
obligations that arise under this Agreement.
16.10 Headings. The headings used for the Articles herein are for convenience
and reference purposes only and shall in no way affect the meaning or interpretation of
the provisions of this Agreement.
16.11 Change in Rules or Procedures; Change in Transmission Provider/ISO
Open Access Transmission Tariffs or Governing Agreements. In the event that FERC,
PJM, other Independent System Operators or transmission providers, New Jersey
EDCs, Delaware Electric Utilities, the New Jersey Board of Public Utilities or the
Delaware Public Service Commission modifies its rules or procedures pertaining to
wholesale transmission of energy, capacity, ancillary services, scheduling,
responsibilities and obligations of load serving entities, or retail access in New Jersey or
Delaware in a manner that has material adverse consequences on the economic value
of this Agreement to Seller, the Parties agree to negotiate in good faith to modify this
Agreement in a manner that restores the original economic value of this Agreement.
16.12 Electronic Data Exchange. The Parities will cooperate to establish
systems, procedures and protocols to permit the electronic exchange of financial,
supply and operating data and payments due under this Agreement. Such cooperation
shall include granting permission to PJM and other entities as appropriate and
consistent with this Agreement to provide Seller with access Buyer’s relevant operating
accounts such as PJM eSchedule and PJM eCapacity.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in
duplicate originals to be effective as of the day and year first written above.
BuyerPP&L, Inc.By: By: Name:Name:Title:Title:DEFINITIONAL ANNEX
All references to Articles, Sections, Exhibits and Annexes are to those set forth in
or appended to this Agreement. Reference to any document means such document as
amended from time to time and reference to any Party includes any permitted
successor or assignee thereof. The following definitions and any terms defined
internally in this Agreement shall apply to this Agreement and all notices and
communications made pursuant to this Agreement.
In addition to terms defined elsewhere in this Agreement, the following definitions
shall apply hereunder:
“Accounted-For Obligation” shall have the same meaning as under the Reliability
Assurance Agreement.
“Affiliate” means with respect to any person, any other person (other than an
individual) that, directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, such person. For purposes of the
foregoing definition, “control” means the direct or indirect ownership of more than five
percent (5%) of the outstanding capital stock or other equity interests having ordinary
voting power.
“Business Day” means any day on which Federal Reserve member banks in
New York, New York are open for business. A Business Day shall open at 8:00 a.m.
and close at 5:00 p.m. local time for each Party’s principal place of business.
“Capacity” means either Capacity Resources or Capacity Credits.
“Capacity Credits” shall have the same meaning as set forth in Section 2.3 of
Schedule 11 to the Operating Agreement of the PJM Interconnection, L.L.C.
“Capacity Deficiency Rate” means a charge equal to the Deficiency Rate
determined pursuant to Schedule 11 of the Reliability Assurance Agreement Among
Load Serving Entities in the PJM Control Area as amended and revised from time-to-
time. “Capacity Resources” shall have the same meaning as under the Reliability
Assurance Agreement Among Load Serving Entities in the PJM Control Area as
amended and revised from time-to-time.
“Contract Price” means the agreed price for the purchase and sale of Power
under this Agreement.
“Control Area” means an electric system or combination of electric systems to
which a common automatic generation control scheme is applied in accordance with
Good Utility Operating Practices to:
(1) match, at all times, the power output of the generators within the electric
system(s) and Power purchased from entities outside the electric
system(s), with the load within the electric system(s);
(2) maintain scheduled interchange with other Control Areas;
(3) maintain the frequency of the electric system(s) within reasonable limits;
and
(4) provide sufficient generating capacity to maintain spinning and operating
reserves.
“Electric Distribution Company (“EDC”)” shall have meaning set forth in the New
Jersey Electric Discount and Competition Act.
”Electric Power Supplier” shall have the meaning set forth in the New Jersey
Electric Discount and Competition Act.
“Electric Utility” shall have the meaning set forth in the Delaware Electric
Restructuring Act of 1999.
“Electricity Supplier” shall have the meaning set forth in the Delaware Electric
Restructuring Act of 1999.
“FERC” means the Federal Energy Regulatory Commission or any successor agency.
“Fixed Transmission Rights” or “FTRs” shall have the same meaning as set forth
in Section 1.3.5 of Schedule 1 to the Operating Agreement of the PJM Interconnection,
L.L.C.
"Force Majeure" means any cause which the Party claiming Force Majeure (the
“Claiming Party”), was unable, in the exercise of due diligence and Good Utility
Operating Practice, to avoid, did not intend, and which is beyond the control, and
without the fault or negligence, of the Claiming Party or the Claiming Party’s Power
Resources, and which renders the Claiming Party or Claiming Party’s Power Resources
unable to carry out wholly or in part its obligation under this Agreement. Force Majeure
includes, but is not restricted to: flood; earthquake; geohydrolic subsidence; tornado;
storm; fire; civil disturbance or disobedience; labor dispute; labor or material shortage;
sabotage; action or restraint by court order or public or governmental authority (so long
as the Claiming Party has not applied for or assisted in the application for, and has
opposed where and to the extent reasonable, such government action); and reductions
or interruptions in services which, in a Claiming Party’s reasonable judgment, or in the
reasonable judgment of Claiming Party’s Power Resources, are necessary to protect
generating or transmission facilities or the reliability of transmission facilities; including
the integrity, safety, reliability or operation of any interconnected electric grid or system;
and government action that results in the price at which Power may be made available
under this Agreement being fixed or established by any government authority at a level
that results in a price that may be charged under this Agreement that (i) in the case of
Seller, is lower than the Contract Price and (ii) in the case of Buyer, is higher than the
Contract Price; provided, however, that such government action does not include the
imposition of any Taxes. Nothing contained herein shall be construed to require a
Claiming Party to settle any strike or labor dispute.
“Good Utility Operating Practice” means the practices, methods and acts
engaged in or approved by a significant portion of the electric power industry during the
relevant time period, or the practices, methods and acts which, in the exercise of
reasonable judgment in light of the facts known at the time the decision was made,
could have been expected to accomplish the desired result consistent with reliability,
safety, expedition, the requirements of governmental agencies having jurisdiction and, if
appropriate or relevant under this Agreement, at the lowest reasonable cost; such term
is not intended to be limited to the optimum practice, method or act to the exclusion of
all others, but rather to constitute a spectrum of acceptable practices, methods or acts.
“Interest Rate” means the prime rate of interest published by Mellon Bank of
Philadelphia or any successor thereto plus two hundred basis points as in effect from
time to time; provided, however, that the Interest Rate shall not exceed the maximum
rate permitted by applicable law.
“Locational Marginal Price” shall have the same meaning as set forth in Section
1.19 of the Operating Agreement of the PJM Interconnection, L.L.C.
“PJM” means the PJM Interconnection, L.L.C.
“Power” means Capacity and Load Following Energy. Energy delivered as a
component of power shall be of the type commonly known as three-phases sixty-cycle
alternating current.
“Power Resources” means the sources of Power with which Seller has made
arrangements in order to provide Power under this Agreement.
“Reliability Assurance Agreement” means the Reliability Assurance Agreement
Among Load Serving Entities in the PJM Control Area as amended and revised from
time-to-time.
“Schedule” or “Scheduling” means communicating with and confirming with all
Transmitting Utilities as well as between Buyer and Seller that a particular amount of
Power is to be delivered or received and providing all such information and satisfying all
such requirements as may be necessary to cause such Parties to recognize and
confirm the delivery or receipt of the Power. All scheduling of services with
Transmitting Utility(s) and Control Area(s) shall be accomplished in compliance with the
scheduling rules of those Transmitting Utility(ies) and Control Area(s). Between Seller
and Buyer, scheduling shall be accomplished no later than sixty (60) minutes before the
start of the intended power flow or as per other rules as the Buyer and Seller may jointly
agree from time to time.
“Taxes” means all ad valorem, property, occupation, utility, gross receipts, sales
and use, excise, and other taxes or governmental charges, licenses, permits, and
assessments, other than taxes based on net income or net worth.
“Transmitting Utility” means the utility or utilities and their respective Control
Areas transmitting Power from the Power Resources to the Delivery Point(s).
“Zone” shall have the same meaning as set forth in Section 1.49a and
Attachment J of the PJM Open Access Transmission Tariff.
|