HomeMy WebLinkAbout04094 - SALT RIVER PROJECT NEW WEST ENERGY POWER PURCHASE SRP
Power Purchase & Sale Agreement
AGREEMENT 44094
R19501, 4-21-99
SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT
AND POWER DISTRICT
AND
CITY OF PALM SPRINGS
POWER PURCHASE AND SALE AGREEMENT
POWER PURCHASE AND SALE AGREEMENT
This Power Purchase and Sale Agreement(this "Agreement") is entered into effective as of the
21`day of April, 1999 (the "Effective Date"), by and between SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT, a political subdivision of the State of Arizona ("SRP" or
"Seller"), and CITY OF PALM SPRINGS, a California municipal corporation ("City"and/or"Buyer"). Seller
and Buyer are also referred to herein individually as a"Party"and collectively a s"Parties."
RECITALS
A. The City of Palm Springs (the"City") is a public agency aggregator of electricity to parties
within the boundaries of the City.
B. SRP is a provider of Wholesale Power.
C. New West Energy Corporation ("NWE"), is an Affiliate of SRP.
D. NWE and the City are parties to a Municipal Utility Services Agreement dated April 21,
1999, (the"MUSA") and a Retail Support Services Agreement dated as of April 21, 1999
(the"RSA"). Under the MUSA, Section 4.3, NWE has been designated to be the City's
procurement agent for wholesale electric power for the City's retail sale of power to its
residents. Under the MUSA, NWE has been designated as the City's Scheduling
Coordinator.
E. As the City's procurement agent, NWE has identified SRP as the provider of Wholesale
Power to the City. NWE has further assigned its duties as Scheduling Coordinator to
SRP.
SRP, as Seller, is ready and willing to provide Wholesale Power to the City, and the City is ready and
willing to purchase Wholesale Power from SRP on the terms and conditions contained in this Agreement.
AGREEMENT
In consideration of the mutual agreements, covenants and conditions herein contained, Seller and
Buyer hereby agree as follows:
ARTICLE 1.
DEFINITIONS
1. 1. Definitions.As used in this Agreement, the following terms shall have the respective meanings
set forth below. Certain other capitalized terms are defined where they appear in this Agreement.
"Affiliate"means any person that directly or indirectly Controls, is Controlled by, or is under common
Control with the person in question.
"Agreement"means this Power Purchase and Sales Agreement between Seller and Buyer.
"Aggregator"means an entity, including a public agency, that combines the loads of multiple end-use
customers in facilitating the sale and purchase of Power, transmission and other services on behalf of
customers, consistent with the use of the term in the California Public Utilities Code Section 331(a), the
applicable Direct Access Tariffs and ISO Tariff and/or Protocols, as they may be amended from time to
time.
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"Ancillary Services"means those services necessary to support the transmission and distribution of
Power within the boundaries of the ISO from the place of generation to Buyer's Customers' Facility while
maintaining reliable operation of the transmission system. Ancillary Services include (but are not limited to)
spinning reserves, non-spinning reserves, replacement reserves, automatic generation control, black-start
capability, voltage regulation and any other ancillary services presently or hereafter required to support the
transmission of Power within the boundaries of the ISO.
"Business Day"means a day on which Federal Reserve member banks in New York City are open for
business; and 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.
"Buyer"means the Party to this Agreement who is obligated to purchase power during the period
specified in this Agreement.
"Buyer's Customers"means those third party end-use customers located within the City's boundaries for
which NWE on behalf of the City under the MUSA and the RSA arranges for Seller to Supply Firm Full
Requirements Power consistent with the requirements for Direct Access service pursuant to the California
Public Utilities Code, CPUC decisions, the applicable Direct Access Tariffs, and the ISO Tariffs as
approved by the CPUC and FERC from time to time.
"California Power Exchange("PX')"means the entity described in Chapter 2.3 of the California Public
Utilities Code (commencing with section 330 and specifically including sections 355 and 356)that
operates a power pool for the purchase and sale of electric power in California pursuant to these laws,
CPUC decisions and Tariffs approved by the FERC.
"Claims"means all claims or actions, threatened or filed and whether groundless, false or fraudulent, that
directly or indirectly relate to the subject matter of an indemnity, and the resulting losses, damages,
expenses, attorneys' fees and court costs, whether incurred by settlement or otherwise, and whether such
claims or actions are threatened or filed prior to or after the termination of this Agreement.
"Clearing Price(`PX") means for the purposes of this agreement the hourly market price for South Path
15 as published by the California Power Exchange.
"Contract Price"means for any month during the Delivery Term, the amount due from Buyer to Seller for
their purchase and sale of Power hereunder, as more specifically set forth in Article 4.
"Contract Quantity"means the amount of Flower set forth in Article 3.
"Contract Term"means the term of this Agreement, beginning on the Effective Date and ending on the
last day of the Delivery Term.
"Control"means the possession, directly or indirectly, through one or more intermediaries, of the
following: (a) in the case of a corporation, 50% or more of the outstanding voting securities thereof; (b) in
the case of a limited liability company, partnership, limited partnership or venture, the right to 50% or more
of the distributions therefrom (including liquidating distributions); (c) in the case of a trust or estate, 50% or
more of the beneficial interest therein; (d) in the case of any other entity, 50% or more of the economic or
beneficial interest therein; or(e) in the case of any entity, the power or authority, through the ownership of
voting securities, by contract or otherwise, to direct the management, activities or policies of the entity.
"CPUC"means the California Public Utilities Commission or its successor regulatory agency with
jurisdiction over retail sales in California.
"Delivery Points"means the point(s) selected by Seller pursuant to the provisions of Section 6. 1.
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"Delivery Term"means the term for the purchase and sale of Power hereunder, asset forth in
- Section 2.2.
"Direct Access"means the provision of electric power and related services to an end-use
customer by an Electric Service Provider, or some entity other than the UDC, where the UDC
provides transmission and/or distribution services to the Buyer pursuant to applicable Tariffs.
"Direct Access Tariff("DAT')"means the Tariff or Tariffs approved by the CPUC that apply to
the transmission of Power to Buyer through the transmission and/or distribution facilities of
Transmitting Utilities, as they may be amended from time to time.
"Electric Service Provider("ESP')"means an entity, other than the UDC, including without
limitation Buyer, which provides Power and/or related services to electricity consumers pursuant
to the statutory requirements, CPUC Rules, and the UDC's Direct Access Tariff, including
Aggregators and Scheduling Coordinators.
"Facility"means the premises and all related equipment and property located downstream of the
meter used for a specific customer account as it existed when the Parties entered into this
Agreement.
"FERC"means the Federal Energy Regulatory Commission or its successor regulatory agency
with jurisdiction over power sales for resale in interstate commerce.
"Firm"means a level of service for which the only excuse for the failure by Seller to deliver
Power or for the failure by Buyer to receive Power as required under this Agreement is Force
Majeure or the other Party's failure to perform.
"Force Majeure"means an event not anticipated as of the Effective Date, which is not within the
reasonable control of the Party (or in the case of third party obligations or facilities, the third
party) claiming suspension (the "Claiming Party"), and which by the exercise of due diligence the
Claiming Party, or third party, is unable to overcome or obtain or cause to be obtained a
commercially reasonable substitute therefor. Events of Force Majeure may include, but are not
restricted to: acts of God; fire; explosion; civil disturbance; 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). Unless otherwise constituting an
event of Force Majeure as defined above, interruption by a Transmitting Utility shall not be
deemed to be Force Majeure unless (i) the Party contracting with such Transmitting Utility shall
have made arrangements with such Transmitting Utility for the firm point-to-point transmission
services, network integration transmission service, and/or similar firm transmission and/or
distribution service, as defined under the Transmitting Utility's Tariff or other applicable Tariff, of
the Power to be delivered or received hereunder and (ii) such interruption is due to an interruption
or curtailment in accordance with the Transmitting Utility's Tariff or other applicable Tariff.
"Full Requirements"means the entire electric usage requirement of Buyer's Customers'
Facilities on a continuous basis during the term of the Agreement, including variations in the
electric usage requirement as may occur during the normal course of business, but excluding the
electric usage requirements of certain Buyer's Customers during a Transition Period in which
Enron Power Marketing, Inc. will continue to provide electric Power to Buyer and excluding any
requirements precipitated by Buyer's resale of Power outside its city limits, and excluding
industrial electricity consumers whose facilities are not, as of the Effective Date of this
Agreement, located within the city limits of the City; provided, that the Parties may agree to
disregard any such exception in any particular case.
"GAAP"means Generally Accepted Accounting Principles.
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"Green Power"means Power which includes 50% or greater quantities generated from environmentally
preferable resources which meet the definition of"eligible renewables"as used in Public Utilities Code
Section 398.4(h)(1)(F).
"HE"means the hour which ends at the time stated; e.g., HE0800 means the hour which begins at 7:00
a.m. and ends at 8.00 a.m.
"Independent System Operator("ISO')"means a transmission operator, approved by the Federal
Energy Regulatory Commission to control and operate high voltage transmission facilities independently
from the UDC's local distribution facilities under a state-wide program in California, and whose
transmission facilities are required to transfer Power to the Buyer and Buyer's Customers.
"Interest Rate"means, for any date, two percent(2%) over the per annum rate of interest equal to the
prime lending rate as may from time to time be published in the Wall Street Journal under"Money Rates';
provided, the Interest Rate shall never exceed the maximum lawful rate permitted by applicable law.
"kW"means one kilowatt.
"kWh"means kilowatt hour.
"Month"means a calendar month.
"MW"means one megawatt.
"MWh"means megawatt hour.
"MUSA"means that certain Municipal Utility Services Agreement between Buyer and NWE dated April
21, 1999. as the same may be amended from time to time.
"Penalties"means any fees, liabilities, assessments or similar charges assessed by a Transmitting Utility
as a result of a Party's failure to comply with its obligations hereunder.
"Power"means electric capacity, measured in kW, and/or energy, measured in MWh.
"RSA"means that certain Retail Support Services Agreement between the City and NWE dated as of
April 21, 1999, as the same may be amended from time to time.
"SCE"means Southern California Edison Company, an investor-owned utility company operating in
southern California, or its successor in interest.
"Schedule"or "Scheduling"means the acts of Seller, Buyer and/or their designated representatives,
including each Party's Transmitting Utility, if applicable, of notifying, requesting and confirming to each
other the quantity of energy to be delivered hourly on any given day or days during the Delivery Term at a
specified Delivery Point, all pursuant to the provisions of Section 5.2.
"Scheduling Coordinator"means the person or entity responsible for Scheduling Buyer's Firm Full
Requirements for Power with any source of generation, including the PX, and arranging the necessary
transmission, ancillary and distribution services required to deliver Power to the Delivery Points consistent
with state and federal regulation.
"Service Commencement Date"means the date specified in Section 2.3.
"Supply"means the provision of electric Power to the Buyer by any lawful means including, but not
limited to, generation, purchase, sales and brokering.
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"Tariff"means a document, approved by a state or federal regulatory entity, which sets forth rates, terms
and other conditions relating to the provision and regulation of certain services.
"Transition Period"is that period of time when Enron Power Marketing, Inc. will continue to provide
electric Power to Buyer for purposes of serving Buyer's Customer through the first meter read date that
occurs after April 30, 1999 for those customers that take service from Buyer pursuant to contracts without
a fixed term and for the term of the contract for those customers that take service from Buyer pursuant to
a contract that calls for service for a fixed period of time.
"Transmitting Utility"means the utility or utilities transmitting Power, including but not limited to the
California Independent System Operator and any Utility Distribution Company, or other Third Party (not
Buyer or Seller)to or from the Delivery Points pursuant to a delivery under this Agreement.
"Utility Distribution Company"or"UDC"means the electric utility which: (1) operates an electric system
interconnected with the Buyer's Customers' Facilities at the Delivery Points; and (ii) offers transmission,
distribution and other direct access services to Buyer, thus enabling Buyer's Customers to receive Power
from an ESP.
"Wholesale Power"means power supplied and sold by Seller to Buyer for Buyer's resale to Buyer's
Customers for their consumption at Buyer's Customers' Facilities.
ARTICLE 2.
TERRA AND TERMINATION
2.1. Contract Term. Subject to the provisions of this Article and Section 16.6 regarding winding-up
arrangements, this Agreement shall become and remain in effect throughout the Contract Term,
2.2. Delivery Term. The purchase and sale of Power hereunder shall commence at the HE 0100 on
the Service Commencement Date and, unless otherwise earlier terminated pursuant to the provisions of
Article 9 herein, shall end at such time as the MUSA terminates whether such termination is due to the
expiration of the stated contract term of the MUSA, or is a termination for default, or is a termination under
any other provision of the MUSA. In any event, no interruption in purchases or sales, whether due to
Force Majeure or otherwise, shall operate to extend the Delivery Term.
2.3 Service Commencement Date. The Service Commencement Date shall be that date which NWE
first becomes responsible for actually serving Buyer's Customer pursuant to the terms of the MUSA and
RSSA.
ARTICLE 3.
QUANTITY
3.1. Contract Quantity. (a) Seller shall sell and deliver, or cause to be delivered, and Buyer shall
purchase and receive, or cause to be received, Firm Full Requirements Power that is consumed by
Buyer's Customers at their Facilities (the"Contract Quantity"); provided, that Seller shall not be obligated
to sell and deliver a Contract Quantity in excess of Buyer's Firm Full Requirements during any hour in the
Delivery Term.
(b) Buyer shall specify from time to time the amount, if any, of such Contract Quantity which must be
Green Power. Seller will cooperate with such independent verification efforts as Buyer may reasonably
request from time to time to assure itself of the environmental characteristics of such Power supplied as
Green Power. Notwithstanding the foregoing, however, Seller will not be required to sell Green Power
hereunder unless Buyer has provided Seller with at least thirty (30) days prior written notice of any request
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for, or any change in the quantity of any request for, such Green Power, and in the sole judgment of
Seller, suitable commercially practicable resources are available to satisfy Buyer's request.
(c) The Parties agree that the Contract Quantity shall not include any Power which Buyer sells to any
person located outside of Buyer's city limits (an "Extraterritorial Sale").
3.2. Deliveries. All deliveries and receipts of Power under this Agreement shall be made on a Firm
basis at the Delivery Point(s).
ARTICLE 4.
CONTRACT PRICE
4.1. Contract Price. Buyer shall pay to Seller each month during the Delivery Term a Contract Price
which shall be equal to the hourly California Power Exchange Market Price, South Path 15 (SP15), Post
Congestion, Plus$0.30 per MWh per MWh for each MWh delivered to the Delivery Points during each
respective hour during each month. For any portion of such deliveries that is Green Power Buyer shall pay
to seller each month an additional charge of$10.00 per MWh. The Contract Price shall be payable in
arrears pursuant to Article 10.
ARTICLE 5.
OPERATION; TRANSMISSION
5.1. Operating Procedures. Seller and Buyer's Scheduling Coordinator shall mutually develop
operating procedures to the extent necessary prior to the beginning of the Delivery Term. The operating
procedures will comply with those requirements imposed by the ISO, PX and/or UDC for the Scheduling
and delivery of Power, and will also include methods of day-to-day communications and any key
personnel lists necessary for the purposes of this Agreement.
5.2. Transmission. Seller shall arrange and be responsible for transmission services for the delivery
of the Contract Quantity to the Delivery Point(s) and shall Schedule or arrange for Scheduling services
with any Transmitting Utility as required to deliver the Contract Quantity at the Delivery Points. Buyer or
Buyer's Scheduling Coordinator shall arrange and be responsible for distribution service at and from the
Delivery Point(s) and shall Schedule or arrange for Scheduling services with its Transmitting Utility to
receive the Contract Quantity at the Delivery Points. Seller shall not be responsible under this Agreement
for Scheduling or any costs or Penalties relating to the distribution of the Contract Quantity after the
Delivery Points.
ARTICLE 6.
DELIVERY POINTS; OBLIGATIONS OF THE PARTIES; TITLE
6.1. Delivery Points. Seller shall Supply and sell and Buyer shall purchase and receive, or cause to
be received, the Contract Quantity at the Delivery Point(s). Subject to the requirements of Transmitting
Utilities and Buyer's Scheduling Coordinator, Seller shall have the right to select the Delivery Point(s) to be
utilized, to select quantities to be made available at each selected Delivery Point, and, upon the provision
of written notice to Buyer's Scheduling Coordinator, to change such selections.
6.2 Costs. Charges and Penalties. Seller is responsible for all applicable costs, charges and
Penalties imposed relative to the delivery of Firm Full Requirements Power up to the Contract Quantity,
including, but not limited to, Ancillary Services required by the Transmitting Utility under the ISO or other
applicable Tariff(s), up to the Delivery Points. Buyer is responsible for any costs, charges or Penalties
imposed or associated with the Contract Quantity, including, but not limited to, Ancillary Services required
by the Transmitting Utility under the ISO or other applicable Tariff(s), at and from the Delivery Points.
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6.3 Title: Risk of Loss. As between the Parties, Seller shall be deemed to be in exclusive control
(and responsible for any damages or injury caused thereby) of the Power prior to the Delivery Point(s),
and Buyer shall be deemed to be in exclusive control (and responsible for any damages or injury caused
thereby) of the Power at and from the Delivery Points. Seller warrants that it will deliver to Buyer the
Contract Quantity, free and clear of all liens, claims and encumbrances arising up to the Delivery Points.
Title to and risk of loss related to the Contract Quantity shall transfer from Seller to Buyer at the Delivery
Points.
ARTICLE 7.
REPRESENTATIONS AND WARRANTIES
7.1. Representations and Warranties. As a material inducement to entering into this Agreement,
each Party, with respect to itself, hereby represents and warrants to the other Party as of the Effective
Date as follows:
(a) it is duly organized, validly existing and in good standing under the laws of the jurisdiction
of its formation and is qualified to conduct its business in those jurisdictions necessary to perform
this Agreement
(b) this Agreement constitutes a legal, valid and binding obligation of such Party enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency, reorganization and other
laws affecting creditor's rights generally, and with regard to equitable remedies, to the discretion of
the court before which proceedings to obtain same may be pending; and
(c) there are no bankruptcy, insolvency, reorganization, receivership or other similar
arrangements or proceedings pending or being contemplated by it or to its knowledge threatened
against it.
7.2. Additional Representation and Warranty. Buyer hereby further represents and warrants to
Seller that Buyer is legally qualified to make purchases as a wholesale purchaser and is purchasing the
Power hereunder for resale, pursuant to the various limitations elsewhere expressed herein.
7.3. No Other Representations and Warranties. Each Party acknowledges that it has entered into
this agreement based solely upon the express representations and warranties set forth in this Agreement,
and no others.
ARTICLE 8.
ADDITIONAL COVENANTS
8.1. Remaking of Representations and Warranties. Each Party covenants that it will cause its
respective representations and warranties in Sections 7.1. and 7.2 to remain true and correct throughout
the Contract Term.
8.2. Financial Information.
(a) If requested by Buyer, Seller shall cause to be delivered as soon as available and within
one hundred twenty (120)days following the end of each fiscal year, a copy of the annual report
of Seller containing audited consolidated financial statements for such fiscal year certified by
independent certified public accountants.
(b) If requested by Seller, Buyer shall cause to be delivered copies of such financial
statements and related records as Seller may reasonably request.
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(c) In all cases the statements required under this Section 8.2 shall be for the most recent
accounting period and prepared in accordance with GAAP; provided, should any such statements
not be timely due to a delay in preparation or certification, such delay shall not be considered a
default so long as such Party diligently pursues the preparation, certification and delivery of the
statements.
ARTICLE 9.
EVENTS OF: DEFAULT AND REMEDIES
9A. Event of Default. An "Event of Default"shall mean, with respect to a Party alleged to have taken
or been affected by any of the actions set forth below in this Section 9.1 (the"Defaulting Party"):
(a) the failure by the Defaulting Party to make, when due, any payment required under this
Agreement if such failure is not remedied within five (5) Business Days after written notice of such
failure is given to the Defaulting Party by the other Party ("Non-Defaulting Party") and provided the
payment is not the subject of a good faith dispute as described in the billing and payment
provisions under Article 10; or
(b) any representation or warranty made by the Defaulting Party in this Agreement shall
prove to have been false or misleading in any material respect when made or ceases to remain
true during the Contract Term; or
(c) the failure by the Defaulting Party to perform any covenant set forth in this Agreement
(other than the events that are otherwise specifically covered in this Section 9.1 as a separate
Event of Default), and such failure is not excused by Force Majeure or cured within five (5)
Business Days after written notice thereof to the Defaulting Party; or
(d) the Defaulting Party shall:
(i) make an assignment or any general arrangement for the benefit of creditors;
(ii) file a petition or otherwise commence, authorize or acquiesce in the
commencement of a proceeding or cause of action under any bankruptcy or similar law
for the protection of creditors, or have such petition filed against it and such petition is not
withdrawn or dismissed for thirty (30) days after such filing;
(iii) otherwise become bankrupt or insolvent(however evidenced); or
(iv) be unable to pay its debts as they fall due.
9.2. Remedies Upon an Event of Default. If an Event of Default occurs with respect to a Defaulting
Party at any time during the Contract Term, the Non-Defaulting Party may, for so long as the Event of
Default is continuing, (i) establish a date (which date shall be between five (5) and ten (10) Business Days
after the Non-Defaulting Party delivers notice) ("Early Termination Date") on which this Agreement shall
terminate, and (ii)withhold any payments due in respect of this Agreement, and (iii) in the case of Seller
as the Non-Defaulting Party, cease making deliveries of Wholesale Power hereunder,provided, however,
upon the occurrence of any Event of Default listed in Section 9.1(d) as it may apply to any Party, 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 subject to and consistent
with the applicable Direct Access Tariff. Except for the recovery of payments due (including interest)for
power delivered and taken hereunder, each Party waives its right to (i) recover damages from the other,
and (ii) obtain any remedy of specific performance, in connection with the breach of this Agreement.
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9.3. Other Events. If a Party's activities hereunder become subject to regulation of any kind
whatsoever under any law, including but not limited to CPUC or FERC regulatory determinations to a
significantly greater or different extent than that existing on the Effective Date then either Party shall at
such time have the right to declare an Early Termination Date in accordance with the provisions hereof.
ARTICLE 10.
BILLING AND PAYMENT
10.1. Billing and Payment. Seller shall render to Buyer(by regular mail, facsimile or other acceptable
means pursuant to Article 15) for each calendar month during the Delivery Term a statement setting forth
the quantity of Wholesale Power that was sold, the total Contract Price for the month and any other
charges due Seller. On or before fifteen (15) days after receipt of Seller's statement or if such day is not a
Business Day, the immediately following Business Day, Buyer shall render, by wire transfer, the amount
set forth on such statement to the payment address provided in Exhibit A hereto. Overdue payments shall
accrue interest from and including the due date to, but excluding, the date of payment, calculated at the
Interest Rate. If Buyer, in good faith, disputes a statement, Buyer shall provide a written explanation
specifying in detail the basis for the dispute and pay the portion of such statement conceded to be correct
no later than the due date. If any amount disputed by Buyer is determined to be due to Seller, it shall be
paid within fifteen (15) days of such determination, along with interest accrued at the Interest Rate until the
date paid.
10.2. Audit. Each Party (and its representatives) 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 this Agreement. If requested, a Party
shall provide to the other Party statements evidencing the quantities of Wholesale Power delivered at the
Delivery Points or the quantities delivered and resold to Buyer's Customers. If any such examination, or
any examination performed under any agreement or Tariff between Buyer and the UDC, reveals any
inaccuracy in any statement relating to the subject matter of this Agreement, the necessary adjustments in
such statement and the payments thereof will be promptly made and shall bear interest calculated at the
Interest Rate from the date the overpayment or underpayment was made until paid; provided however,
that no adjustment for any statement or payment will be made unless objection to the accuracy thereof
was made prior to the lapse of one year from the rendition thereof, and provided furtherthat this Section
will survive any termination of this Agreement for a period of two (2) years from the date of such
termination for the purpose of such statement and payment objections; and provided further that Buyer
shall promptly inform Seller in writing of any such examination performed under any agreement or Tariff
between Buyer and the UDC.
ARTICLE 11.
ASSIGNMENT; BINDING EFFECT
11. 1. Assignment. Neither Party shall assign this Agreement or any of its rights or obligations
hereunder without the prior written consent of the other Party, which consent shall not be unreasonably
withheld or delayed. Notwithstanding the foregoing, either Party may, without the need for consent from
the other Party (and without relieving itself from liability hereunder), (a) transfer, sell, pledge, encumber or
assign this Agreement or the accounts, revenues or proceeds hereof in connection with any financing or
other financial arrangements; (b)transfer or assign this Agreement to an Affiliate of such Party; or(c)
transfer or assign this Agreement to any person or entity succeeding to all or substantially all of the assets
of such Party;provided, however, that in each such case any such assignee shall agree in writing to be
bound by the terms and conditions hereof.
11.2. Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and
their respective successors and permitted assigns. No assignment or transfer permitted hereunder shall
relieve Seller or Buyer of any of their respective obligations under this Agreement.
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ARTICLE 12.
FORCE MAJEURE AND LIMITATION OF LIABILITY
12. 1. Force Majeure. If either Party is rendered unable by Force Majeure to carry out, in whole or part,
its obligations under this Agreement and such Parry gives notice and full details of the event to the other
Party as soon as practicable after the occurrence of the event then during the pendency of such Force
Majeure but for no longer period, the obligations of the Party affected by the event(other than the
obligation to make payments then due or becoming due with respect to performance prior to the event)
shall be suspended to the extent required. The Party asserting a Force Majeure event shall also give
notice, as soon as practicable, to the other Party when the conditions allegedly giving rise to the Force
Majeure have ended and the Party is again capable of carrying out its obligations under this Agreement.
The Party affected by the Force Majeure shall remedy the Force Majeure with all reasonable dispatch;
provided, however, that this provision shall not require Seller to deliver, or Buyer to receive, Wholesale
Power at points other than the Delivery Points.
12.2. Limitation of Remedies. Liability and Damages. The Parties confirm that the express remedies
and any measures of damages provided in this Agreement satisfy the essential purposes hereof. For
breach of any provision for which an express remedy or measure of damages is herein provided, such
express remedy or measure of damages shall be the sole and exclusive remedy, the obligor's liability shall
be limited as set forth in such provision and all other remedies or damages at law or in equity are waived.
If no remedy or measure of damages is expressly herein provided, the obligor's liability shall be limited to
direct actual damages only, such direct actual damages shall be the sole and exclusive remedy and all
other remedies or damages at law or in equity are waived. Unless expressly provided in this Agreement,
neither Party shall be liable for consequential, incidental, punitive, exemplary or indirect damages, lost
profits or other business interruption damages, by statute, in tort or contract, under any indemnity
provision or otherwise. It is the intent of the parties that the limitations herein imposed on remedies and
the measure of damages be without regard to the cause or causes related thereto, including, without
limitation, the negligence of any Party, whether such negligence be sole,joint or concurrent, or active or
passive. To the extent any damages required to be paid hereunder are liquidated, the Parties
acknowledge that the damages are difficult or impossible to determine, otherwise obtaining an adequate
remedy is inconvenient and the liquidated damages constitute a reasonable approximation of the harm or
loss.
12.3. Duty to Mitigate. Each Party agrees that it has a duty to mitigate damages and covenants that it
will use commercially reasonable efforts to minimize any damages it may incur as a result of the other
Party's performance or non-performance of this Agreement.
12.4. UCC. Except as otherwise provided in this Agreement, the provisions of the Uniform Commercial
Code ("UCC") of the state whose laws shall govern this Agreement shall be deemed to apply to this
Agreement and Power shall be deemed to be a"good"for purposes of the UCC. EXCEPT AS
EXPRESSLY SET FORTH HEREIN, SELLER EXPRESSLY NEGATES ANY OTHER
REPRESENTATION OR WARRANTY, WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING,
WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY WITH RESPECT TO CONFORMITY
TO MODELS OR SAMPLES, MERCHANTABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE.
ARTICLE 13.
TAXES; STRANDED COSTS
13.1. General. Either Party, upon written request of the other, shall provide a certificate of exemption or
other reasonably satisfactory evidence of exemption if either Party is exempt from taxes, and shall use
reasonable efforts to obtain and cooperate with obtaining any exemption from or reduction of tax;
provided, that nothing in this provision shall be interpreted as restricting Buyer from exercising any lawful
authority it may have to impose a tax. Either Party with knowledge of a tax on the purchase or sale of
Wholesale Power, that may be applicable to the Wholesale Power sold hereunder shall notify the other
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Party, in advance, of the applicability of such tax and shall also notify the other Party of any proposal to
implement a new tax or apply an existing tax to the purchase, sale, delivery, or receipt of Wholesale
Power hereunder.
13.2. Applicable Taxes. Seller shall be responsible for all existing and any new sale, use, excise, ad
valorem, and any other similar taxes, imposed or levied by any federal, state or local governmental
agency on the Wholesale Power sold and delivered hereunder up to the delivery of such Wholesale Power
to the Delivery Points. Seller shall not be responsible for any existing or new sale, use, excise, ad
valorem, and any other similar taxes, imposed or levied by any federal, state or local governmental
agency on the Power sold and delivered hereunder from and after the delivery of such Wholesale Power
to the Delivery Points.
13.3. Stranded Costs. Notwithstanding any other provision in this Agreement to the contrary, in
performance of this Agreement Seller shall not be required to bear, directly or indirectly, any charges or
costs (including, without limitation, any transmission surcharges, taxes, etc.) incurred by Buyer or any
customer or supplier of Buyer or any other person, or that are assessed or levied by any person against
Seller, Buyer or any other person, in order to recoup the expenses and liabilities associated with Stranded
investments, and Buyer shall bear or otherwise provide for any and all such charges consistent with the
applicable Direct Access Tariffs.
ARTICLE 14.
CONFIDENTIALITY
14.1. Confidentiality. Each Party shall not disclose the terms of this Agreement regarding the Contract
Quantity and the Contract Price to a third person (other than the Party's and its Affiliates' employees,
lenders, counsel or accountants who have agreed to keep such terms confidential) except in order to
comply with any applicable law (including, without limitation, the public records laws of California and
Arizona), order, regulation or exchange rule; provided, each Party shall notify the other Party of any
proceeding of which it is aware which may result in disclosure.
14.2 In the case of a Party's receipt of an information request under the public records laws, the
receiving Party shall provide a written notice to the other Party, with a copy of such request, and the
receiving Party shall allow at least five (5) days for the other Party to respond, during and before which
period the receiving Party shall not provide the requested information to the persons requesting the same,
unless compelled to do so by a court with jurisdiction. If the receiving Party reasonably believes that it is
absolutely and finally compelled by law to disclose such information ("Mandatory Disclosure"), it may do
so after the expiration of the foregoing five-day period, and shall provide prompt written notice to the other
Party thereof. If the other Party, within said five-day period, requests the receiving Party to refuse to
comply with such request, and the receiving Party has not determined that it is faced with a Mandatory
Disclosure obligation, the receiving Party will so refuse and the other Party shall bear both Parties'
attorney fees and court costs, if any, incurred in connection with such other Party's attempt to prevent the
release of the requested information. Such other Party may at any time thereafter agree to disclose the
requested information, or the other Party may continue to oppose such request, at the other Party's
option.
14.3 The Party receiving a request will require compliance, by any third persons requesting such
information, with all statutory and other legal provisions concerning public access to such information. The
Parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection
with, these confidentiality obligations.
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• i
ARTICLE 15.
NOTICES
15.1. Notices. All notices, requests, statements or payments, other than communications required for
the Scheduling of Power consistent with the written operating procedures developed according to Section
5.1 of this Agreement, shall be made as specified in Exhibit A hereto. Notices required to be in writing
shall be delivered by letter, facsimile or other documentary form. Notice by facsimile or hand delivery shall
be deemed to have been received by the close of the Business Day on which it was transmitted or hand
delivered (unless transmitted or hand delivered after close in which case it shall be deemed received at
the close of the next Business Day). Notice by overnight mail or courier shall be deemed to have been
received two (2) Business Days after it was sent. A Party may change its address by providing notice of
same in accordance herewith. If notice is given by facsimile, the Party giving such notice shall also mail a
copy, as soon as practicable, to the other Party.
ARTICLE 16.
MISCELLANEOUS
16.1. Entirety: Amendments. This Agreement and the Exhibits hereto constitute the entire agreement
between the Parties. There are no prior or contemporaneous agreements or representations affecting the
same subject matter other than those herein expressed. Except for any matters which, in accordance with
the express provisions of this Agreement, may be resolved by verbal agreement between the Parties, no
amendment, modification or change herein shall be enforceable unless reduced to writing and executed
by both Parties.
16.2. Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be
governed by and construed, enforced and performed in accordance with the laws of the state of California,
without giving effect to principles of conflicts of laws; provided, however, that any matter related to the
status of SRP as a political subdivision of the State of Arizona shall be determined in accordance with the
laws of the State of Arizona.
16.3. Non-Waiver. No waiver by any Party hereto of any one or more defaults by the other Party 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.
16.4. Severability. Except as otherwise stated herein, any provision or article declared or rendered
unlawful by a court of law or regulatory agency with jurisdiction over the Parties, or deemed unlawful
because of a statutory change, will not otherwise affect the lawful obligations that arise under this
Agreement.
16.5. Headings: Exhibits. The headings used for the sections and 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. Any and all Exhibits referred to in this Agreement are, by such reference, incorporated
herein and made a part hereof for all purposes.
16.6. Winding Up Arrangements. All indemnity and audit rights shall survive the termination of this
Agreement. All obligations provided in this Agreement shall remain in effect for the purpose of complying
herewith.
16.7. No Third Party Beneficiaries. Nothing in this Agreement shall provide any benefit to any third
party or entitle any third party to any claim, cause of action, remedy or right of any kind, it being the intent
of the Parties that this Agreement shall not be;construed as a third party beneficiary contract.
16.8. Counterparts. This Agreement may be executed in several counterparts, each of which is an
original and all of which constitute one and the same instrument.
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16.9. Arbitration. Any dispute or need of interpretation arising out of this agreement shall be submitted
to binding arbitration by one arbitrator who has not previously been employed by either party, and does
not have a direct or indirect interest in either Party or the subject matter of the arbitration. Such arbitrator
shall either be as mutually agreed by the Parties within thirty (30) days after written notice from either
party requesting arbitration, or failing agreement, shall be selected under the expedited rules of the
American Arbitration Association (the"AAA"). Such arbitration shall be held in alternating locations of the
home offices of Seller and Buyer, commencing with Seller's office. The rules of the AAA shall apply to the
extent not inconsistent with the rules herein specified. Either Party may initiate arbitration by written notice
to the other Party and the arbitration shall be conducted according to the following: (a) not later than seven
(7) days prior to the hearing date set by the arbitrator each party shall submit a brief with a single proposal
for settlement, (b)the hearing shall be conducted on a confidential basis without continuance or
adjournment, (c) the arbitrator shall be limited to selecting only one of the two proposals submitted by the
Parties, (d) each Party shall divide equally the cost of the arbitrator and the hearing and each Party shall
be responsible for its own expenses and those of its counsel and representatives and (e) evidence
concerning the financial position or organizational make-up of the Parties, any offer made or the details of
any negotiation prior to arbitration and the cost to the Parties of their representatives and counsel shall not
be permissible.
16.10. Acknowledgment of Arbitration. Each Party understands that this Agreement contains an
agreement to arbitrate with respect to any dispute or need of interpretation pertaining to this Agreement.
After signing this Agreement, each Party understands that it will not be able to bring a lawsuit concerning
any dispute that may arise which is covered by the arbitration provision. Instead, each Party agrees to
submit any such dispute to an impartial arbitrator.
IN WITNESS WHEREOF, the Parties, by their respective duly authorized representatives, have executed
this Agreement effective as of the Effective Date. This Agreement shall not become effective as to either
Party unless and until executed by both Parties.
SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT
Name: ( KM1'�fo-, '1 h C 11
Title: 5UPPtj Q,,-
,4Qrro✓" ras 4, By: �/L • /LfT Le��
Name:_ JOhFN 2. M�N6c its
Title:_ :5ary.,'P. kei
P iD VEID 2,yT IcyL�.✓_..;.
No,_ L",�`/� _ CITY SPIII
AvS y By:
ATTEST: City Manager for the C y of Palm Springs
By:1 �� Y�_r_r__AI_/�✓b� ev
C1c�� 1ty Clerk Reviewed and approveFd-as to form
By: iiv�/at ---
�C�y Attorney
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At, 2o, 55�j
EXHIBIT"A"
to the
Power Purchase and Sale Agreement
NOTICES
NOTICES AND PAYMENT
SRP:
NOTICES & CORRESPONDENCE: PAYMENTS-
Salt River Project Salt River Project
Manager of Supply and Trading Special Contract Billing
6504 E. Thomas Rd. P. O. Box 29090
POB 007 Phoenix, AZ 85038-9090
Scottsdale, AZ 85251
Telephone: (602)236-3805
Facsimile: (602) 236-3873
INVOICES:
Salt River Project
Attn.: Manager, Power Accounting Services
POB 005
P. O. Box 52025
Phoenix, AZ 85072-4356
Facsimile: (602)236-4356
BUYER:
NOTICES CORRESPONDENCE & INVOICES: PAYMENTS-
City of Palm Springs New West Energy Corporation
3200 E. Tahquitz Canyon Way P. O. Box 61868
Palm Springs, CA 92263 Phoenix, AZ 85082-1868
Attn.: City Manager
Facsimile No.: (760) 323-8207
Copy to: Copy to:
New West Energy Corporation City of Palm Springs
P. O. Box 61868 3200 E. Tahquitz Canyon Way
Phoenix, AZ 85082-1868 Palm Springs, CA 92263
Facsimile No.: (602) 236-6981 Attn.: City Manager
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