Resolution No. 73801 RESOLUTION NO. 7380
2
A RESOLUTION OF THE CITY COUNCIL OF
3 THE CITY OF VERNON APPROVING AND
AUTHORIZING THE EXECUTION OF A
4 REVISED WESTERN SYSTEMS POWER POOL
AGREEMENT WITH VARIOUS PUBLIC AND
5 PRIVATE ENTITIES DATED JUNE 1, 1999
6
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8 WHEREAS, on February 14, 1994, the City Council of the
9 City of Vernon adopted Resolution No. 6388, which approved the
10 Western Systems Power Pool ("WSPP") Agreement and authorized the
11 Mayor and City Clerk to execute said Agreement for, and on behalf
12 of, the City of Vernon; and
13 WHEREAS, the City Council of the City of Vernon adopted
14 Resolution No. 6914 on February 4, 1997, which approved and
15 authorized the execution of an Amendment to the WSPP Agreement to
16 conform to an order of the Federal Energy Regulatory Commission
17 ("FERC"); and
18 WHEREAS, the WSPP, on behalf of its members, has filed
19 a substantially revised Agreement with the FERC, dated as of June
20 1, 1999, intended to update its terms to better ensure commercial
21 enforceability and reflect common commercial practices in
22 response to changes in the electric selling and trading markets;
23 and
24 WHEREAS, the FERC voted out an order on June 16, 1999,
25 accepting the revisions to the WSPP Agreement without
26 modification to take effect as of June 1, 1999.
27 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
28 THE CITY OF VERNON AS FOLLOWS:
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SECTION 1: The City Council of the City of Vernon does
hereby find and determine that the recitals contained hereinabove
are true and correct.
SECTION 2: The City Council of the City of Vernon
hereby approves the Western Systems Power Pool Agreement, as
revised and dated as of June 1, 1999, a copy of which has been
presented to the City Council concurrently with this resolution,
and the City Council hereby orders said Agreement to be received
and filed by the City Clerk.
SECTION 3: The City Council of the City of Vernon
hereby authorizes the Mayor and the City Clerk to execute said
Agreement for, and on behalf of, the City of Vernon.
SECTION 4: The City Clerk of the City of Vernon shall
certify to the passage of this resolution and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 20th day of July, 1999.
LEONIS C. MA URG, M or
ATTEST:
BRUCE V. MALKENHORST, City Clerk
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STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES )
ss
I, BRUCE V. MALKENHORST, City Clerk of the City of
Vernon, do hereby certify that the foregoing Resolution, being
Resolution No. 7380, was duly adopted by the City Council of the
City of Vernon at a regular meeting of the City Council duly held
on Tuesday, July 20, 1999, and thereafter was duly signed by the
Mayor of the City of Vernon.
(SEAL)
BRUCE V. MALKENHORST, City Clerk
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CITY COUNCIL
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro-Tem
Wm. 'BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL McCORMICK
Councilman
BRUCE V. MALKENHORST
City Administrator / City Clerk
FAX (323) 581-7924
City Council
City of Vernon
Honorable Members:
CD B. BREARLEY
City Attorney
FAX: (626) 330-5818
KEVIN WILSON
j ector of Community Services & Water
FAX: (323) 588-2761
O✓ I V A` KENNETH J. DeDARIO
p Q� Director of Municipal Utilities
�1N FAX: (323) 583-1983
CITY HALL
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (323) 583-8811
July 13, 1999
DAVE TELFORD
Fire Chief
FAX: (323) 581-1385
BRUCE W. OLSON
Police Chief
FAX: (323) 583-5236
Revisions to the Western Systems Power Pool ("WSPP") Agreement have
been made by the WSPP and approved by the Federal Energy Regulatory
Commission on June 6, 1999, effective June 1, 1999. The revisions
empower the City Administrator or his designee(s) (per previous City
Council authority) to undertake transactions not identified in the
original "WSPP" agreement. The transactions could be long-term power
sales contracts, execution of confirmation agreements and other power
sales transactions. The revisions provide that actions of this sort by
said designees are considered authorized by the City, thus,
transactions are enforceable even if a designee is acting in conflict
with approved City policies. If the city chooses to not accept these
revisions then participation in the WSPP is no longer available to the
City. This matter has been reviewed by Eric Fresch, Legal Counsel and
submitted herewith is an attachment which outlines the changes made to
the agreement.
It is hereby recommended that the revisions to the "WSPP" agreement be
approved and that the City Administrator and/or his designee are
authorized to act on behalf of the city and bind it to transactions
under the `WSPP" agreement.
Very truly yours,
Bruce V. Malkenhorst
City Clerk
/gj o
I.
GREGORY GRADY
JAMES T. McMANUS
ALAN J. STATMAN
JEFFREY D. KOMAROW
ROBERT H. BENNA
DOUGLAS O. WAIKART
MICHAEL E. SMALL
MICHAEL J. THOMPSON
JOSEPH S. KOURY
JEFFREY G. DISCIULLO
ARNOLD B. POOGORSKY
BARRY S. SPECTOR
ROBERT H. LAMB'
KENNETH S. KAUFMAN -
PAUL M. FLYNN
SCOTT M. DuBOFF
SACNE B. CROCKER
CARRIE L. BUMGARNER
DAVID S. BERMAN
WENDY N. REED'
LAW OFFICES
WRIGHT & TALISMAN, P.C.
SUITE 600
1200 G STREET, N.W.
WASHINGTON, D.C. 20005-3802
(202) 393-1200
TELEFAX (202) 393-1240
INTERNET: MAIL@.WRIGHTLAW.COM
December 4, 1998
Mr. David P. Boergers
Secretary
Federal Energy Regulatory Commission
888 First Street, N.E.
Washington, D.C. 20426
RE: Western Systems Power Pool,
Docket No. ER91-195-004
Dear Mr. Boergers:
COUNSEL
HAROLD L. TALISMAN
HARRY S. LITTMAN (1906-61)
DALE A. WRIGHT (1927-89)
*ADMITTED IN OTHER THAN D.C.
On October 30, 1998, this office, acting on behalf of the Western Systems Power
Pool ("WSPP"), filed the most recent quarterly information for WSPP's public utility
members as required by the Commission's June 1, 1992 order in this proceeding.'
However, at the time of that filing, a number of parties either filed incomplete information
or failed to file the required information. Having received this information from certain of
these parties, we are forwarding that information to the Commission. Specifically, we are
forwarding information for: Amoco Energy Trading Corp., Aquila Power Corp., Calpine
Power Marketing, Inc., Carolina Power & Light Co., CMS Marketing, Services and
Trading, Entergy Power, Inc., Idaho Power Co., Kansas City Power & Light Co., KN
Marketing, Inc., MidCon Power Services, PG&E Energy Services, Southern California
Edison Co., Statoil Energy Trading Inc., Puget Sound Energy, and Vastar Power.
The purpose of this filing is to provide the above data to be added to the quarterly
filing made on October 30, 1998. Accordingly, enclosed are an original and six copies of
59 FERC ¶ 61,249 (1992).
Mr. David P. Boergers, Secretary
December 4, 1998
Page 2
which may be publicly disclosed and one copy of the reports for which privileged treatment is
required. As fully detailed in the cover letter accompanying the October 30, 1998 quarterly
filing, WSPP requests that the Commission provide privileged treatment to the confidential
reports. All information pertaining to the request for privileged treatment, as required by 18
C.F.R. § 388.112, was included in the cover letter accompanying the October 30, 1998
quarterly filing. A Form of Notice is included to reflect the filing of this additional information.2
Respectfully submitted,
avid . Berman
Attorney for the
Western Systems Power Pool
Enclosures
cc: Service List (w/o enc.)
KAWSM1002-006-147
2 The Notice of Filing is also being provided on diskette in WordPerfect 6.1 format.
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Western Systems Power Pool ) Docket No. ER91-195-004
NOTICE OF INFORMATIONAL FILING
Take notice that on December 4, 1998, the Western Systems Power Pool
(WSPP) filed certain information to update its October 30, 1998, quarterly filing. This data is
required by Ordering Paragraph (D) of the Commission's June 27, 1991 Order (55 FERC ¶
61,495) and Ordering Paragraph (C) of the Commission's June 1, 1992 Order On Rehearing
Denying Request Not To Submit Information, And Granting In Part And Denying In Part
Privileged Treatment. Pursuant to 18 C.F.R. § 385.211, WSPP has requested privileged
treatment for some of the information filed consistent with the June 1, 1992 order. Copies of
WSPP's informational filing are on file with the Commission, and the non -privileged portions
are available for public inspection.
David P. Boergers
Secretary
SUPPORTING
DOCUMENTS
�s F
Western Systems Power Pool
Agreement
(Eff. as of June 1, 1999)
4
TABLE OF CONTENTS
SECTION
TITLE
PAGE
1.
PARTIES
1
2.
RECITALS
1
3.
AGREEMENT
2
4.
DEFINITIONS
2
5.
TERM AND TERMINATION
7
6.
SERVICE SCHEDULES AND WSPP DEFAULT
TRANSMISSION TARIFF
9
7.
HUB AND OPERATING AGENT
10
8.
ORGANIZATION AND ADMINISTRATION
13
9.
PAYMENTS
17
10.
UNCONTROLLABLE FORCES
19
11.
WAIVERS
22
12.
NOTICES
22
13.
APPROVALS
22
14.
TRANSFER OF INTEREST IN AGREEMENT
25
15.
SEVERABILITY
26
16.
MEMBERSHIP
26
17.
RELATIONSHIP OF PARTIES
27
18.
NO DEDICATION OF FACILITIES
28
19.
NO RETAIL SERVICES
28
20.
THIRD PARTY BENEFICIARIES
28
21.
LIABILITY AND DAMAGES
29
(continued)
SECTION
TITLE
PAGE
22.
DEFAULT OF TRANSACTIONS UNDER THIS AGREEMENT
AND CONFIRMATION AGREEMENTS
33
22A.
DEFAULT IN PAYMENT OF WSPP OPERATING COSTS
41
23.
OTHER AGREEMENTS
43
24.
GOVERNING LAW
44
25.
JUDGMENTS AND DETERMINATIONS
44
26.
COMPLETE AGREEMENT
45
27.
CREDITWORTHINESS
45
28.
NETTING AND SET-OFF
47
29.
TAXES
48
30.
CONFIDENTIALITY
49
31.
TRANSMISSION TARIFF
51
32.
TRANSACTION SPECIFIC TERMS AND ORAL
AGREEMENTS
51
33.
PERFORMANCE, TITLE, AND WARRANTIES FOR
TRANSACTIONS UNDER SERVICE SCHEDULES
54
34.
DISPUTE RESOLUTION
55
35.
FORWARD CONTRACTS
57
36.
ADDITIONAL REPRESENTATIONS AND WARRANTIES
58
37.
EXECUTION BY COUNTERPARTS
59
38.
WITNESS
59
EXHIBIT A:
NETTING
EXHIBIT B:FORM
OF COUNTERPARTY GUARANTEE AGREEMENT
EXHIBIT C:SAMPLE
FORM FOR CONFIRMATION
SERVICE SCHEDULES
A.
ECONOMY ENERGY SERVICE
A-1
SECTION
TABLE OF CONTENTS
(continued)
TITLE
B. UNIT COMMITMENT SERVICE
C. FIRM SYSTEM CAPACITY/ENERGY SALE OR
EXCHANGE SERVICE C-1
1.
2.
PARTIES:
The Parties to this Western Systems Power Pool Agreement
(hereinafter referred to as "Agreement") are those entities
that have executed this Agreement, hereinafter sometimes
referred to individually as "Party" and collectively as
"Parties," but excluding any such entity that withdraws its
participation in the Agreement.
RECITALS:
2.1 The WSPP experiment has been successfully concluded.
Its main purpose was to determine the feasibility of a
marketing arrangement which would increase the
efficiency of interconnected power system operations
above that already being accomplished with existing
agreements through increased market knowledge and market
pricing of commodities.
2.2 The Parties now desire to proceed with a similar
marketing arrangement on a long term basis for
prescheduled and real-time coordinated short-term power
transactions, such as economy energy transactions, unit
commitment service, firm system capacity/energy sales or
exchanges. Accordingly, this Agreement, together with
any applicable Confirmation Agreement, sets forth the
terms and conditions to implement these services within
any applicable rate ceilings set forth in the Service
Schedules in conformance with FERC orders where
applicable.
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3.
4.
2.3 Each Party meets the membership requirements set out in
Section 16.
2.4 The Parties are willing to utilize their respective
electric generation and transmission systems or
contractual rights thereto to the extent of their
respective obligations which are set forth in this
Agreement.
AGREEMENT:
In consideration of the mutual covenants and promises herein
set forth, the Parties agree as follows:
DEFINITIONS:
The following terms, when used herein with initial
capitalization, whether in the singular or in the plural,
shall have the meanings specified:
4.1 Agreement: This Western Systems Power Pool Agreement,
including the Service Schedules and Exhibits attached
hereto, as amended; provided, however, that Confirmation
Agreements are not included within this definition.
4.1a Business Day(s): Any day other than a Saturday or
Sunday or -a national (United States or Canadian,
whichevgr is applicable) holiday. United States holidays
shall be holidays observed by Federal Reserve member
banks in New York City. Where both the Seller and the
Purchaser have their principal place of business in the
United States, Canadian holidays shall not apply.
Similarly, where both the Seller and the Purchaser have
MM
their principal place of business in Canada, United
States holidays shall not apply. In situations where
one Party has its principal place of business within the
United States and the other Party's principal place of
business is within Canada, both United States and
Canadian holidays shall be observed.
4.1b Confirmation Agreement(s) : Any oral agreement or
written documentation for transactions under the Service
Schedules which sets forth terms and conditions for
transactions that are in addition to, substitute, or
modify those set forth in the Agreement. A sample
written confirmation document is included as Exhibit C.
Section 32 of this Agreement provides for such
Confirmation Agreements.
4.1c Contract Price: The price agreed to between the Seller
and the Purchaser for a transaction under the Agreement
and any Confirmation Agreement.
4.1d Contract 4uantity: The amount of electric energy and/or
capacity to be supplied for a transaction under a
Service Schedule as agreed to through any Confirmation
Agreement.
4.2 Control Area: Shall mean an electric system capable of
regulating its generation in order to maintain its
interchange schedule with other electric systems and to
contribute its frequency bias obligation to the
interconnection as specified in the North American
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t a
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Electric Reliability Council (NERC) operating
Guidelines.
4.3 Economy Energy Service: Non -firm energy transaction
whereby the Seller has agreed to sell or exchange and
the Purchaser has agreed to buy or exchange energy that
is subject to immediate interruption upon notification,
in accordance with the Agreement, including Service
Schedule A, and any applicable Confirmation Agreement.
4.4 Electric Utility: An entity or lawful association which
(i) is a public utility, Independent Power Producer, or
Power Marketer regulated under applicable state law or
the Federal Power Act, or (ii) is exempted from such
regulation under the Federal Power Act because it is the
United States, a State or any political subdivision
thereof or an agency of any of the foregoing, or a Rural
Utilities Service cooperative, or (iii) is a public
utility, Independent Power Producer, or Power Marketer
located in Canada or Mexico that is similarly regulated.
4.5 Executive Committee: That committee established
pursuant to Section 8 of this Agreement.
4.6 FERC: The Federal Energy Regulatory Commission or its
regulatory successor.
4.7 Firm System Capacity/Energy Sale or Exchange Service:
Firm capacity and/or energy transaction whereby the
Seller has agreed to sell or exchange and the Purchaser
has agreed to buy or exchange for a specified period
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available capacity with or without associated energy in
accordance with the Agreement, including Service
Schedule C, and any applicable Confirmation Agreement.
4.8 Imo: An electronic communication center that functions
as a central point to electronically receive and
assemble data for offers to buy or sell power or
transmission service from each Party and make that data
electronically available concurrently to all Parties.
4.9 Incremental Cost: The forecasted expense incurred by
the Seller in providing an additional increment of
energy or capacity during a given hour.
4.10 Independent Power Producer: An entity which is a non-
traditional public utility that produces and sells
electricity but which does not have a retail service
franchise.
4.11 Interconnected Transmission System: The total of all
transmission facilities owned or operated by the
Parties, including transmission facilities over which
Parties have scheduling rights.
4.12 Operating Agent: Arizona Public Service Company, or its
successor as may be designated by the Executive
Committee.
4.13 Operating Committee: That committee established
pursuant to Section 8 of this Agreement.
4.14 Power Marketer: An entity which buys, sells, and takes
title to electric energy, transmission and/or other
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services from traditional utilities and other suppliers.
4.15 Purchaser: Any Party which agrees to buy or receive
from one or more of the other Parties any service
pursuant to the Agreement under any Service Schedule and
any applicable Confirmation Agreement.
4.16 Qualifying Facility: A facility which is a qualifying
small power production facility or a qualifying
cogeneration facility as these terms are defined in
Federal Power Act Sections 3 (17) (A) , 3 (17) (C) , 3 (18) (A) ,
and 3(18)(B); which meets the requirements set forth in
18 C.F.R. §§ 292.203-292.209; or a facility in Canada or
Mexico that complies with similar requirements.
4.16a Replacement Price: The price at which the Purchaser,
acting in a commercially reasonable manner, effects a
purchase of substitute electric energy in place of the
electric energy not delivered by the Seller or, absent
such a purchase, the market price for such quantity of
electric energy, as determined by the Purchaser in a
commercially reasonable manner, at the delivery point
(agreed upon by the Seller and the Purchaser for the
transaction).
4.16b Sales Price: The price at which the Seller, acting in a
commercially reasonable manner, effects a resale of the
electric energy not received by the Purchaser or, absent
such a resale, the market price for such quantity of
electric energy at the delivery point (agreed upon by
S�
the Seller and the Purchaser), as determined by the
Seller in a commercially reasonable manner.
4.17 Seller: Any Party which agrees to sell or provide to
one or more of the other Parties any service pursuant to
the Agreement under any Service Schedule and any
applicable Confirmation Agreement.
4.18 Service Schedule: A schedule of services established
pursuant to Section 6 of this Agreement.
4.19 Uncontrollable Forces: As defined in Section 10 of this
Agreement or in a Confirmation Agreement.
4.20 Unit Commitment Service: Capacity and associated
scheduled energy transaction whereby the Seller has
agreed to sell and the Purchaser has agreed to buy
capacity and associated scheduled energy from a
specified unit(s) for a specified period, in accordance
with the Agreement, including Service Schedule B, and
any applicable Confirmation Agreement.
4.20a WSPp: The Western Systems Power Pool.
4.20b WSPP Default Transmission Tariff: The transmission
tariff filed on behalf of WSPP Members with FERC as it
may be amended from time to time.
5. TERM AND TERMINATION:
5.1 This Agreement shall become effective as of July 27,
1991 when acceptance or approvals required under Section
13.2 of this Agreement with respect to those Parties
that are subject to FERC jurisdiction have been
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obtained; provided, however, that this Agreement shall
not become effective as to any Party in the event the
pre -grant of termination requested under Section 13.3 is
not allowed by FERC, absent that Party Is consent; and
provided, further, that this Agreement shall not become
effective as to any Party if any terms, 'conditions or
requirements imposed by FERC are found unacceptable by
that Party. This Agreement shall continue in effect for
a period of ten (10) years from said effective date and
thereafter on a year to year basis until terminated by
the Parties; provided, however, that any Party may
withdraw its participation at any time after the
effective date of this Agreement on thirty (30) days
prior written notice to all other Parties.
5.2 As of the effective date of any withdrawal, the
withdrawing Party shall have no further rights or
obligations under this Agreement except the right to
collect money or receive service owed to it for
transactions under any Service Schedule and the
obligation to pay such amounts due to another Party and
to complete any transactions agreed to under any Service
Schedule as of said date. No Party shall oppose, before
any court or regulatory agencies having jurisdiction,
any other Party's withdrawal as provided in this
Section.
5.3 Except as provided for in Section 5.2, after
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termination, or withdrawal with respect to the
withdrawing Party, all rights to services provided under
this Agreement or any tariff or rate schedule which
results from or incorporates this Agreement shall cease,
and no Party shall claim or assert any continuing right
to such services under this Agreement. Except as
provided for in Section 5.2, no Party shall be required
to provide services based in whole or in part on the
existence of this Agreement or on the provision of
services under this Agreement beyond the termination
date, or date of withdrawal with respect to the
withdrawing Party.
6. SERVICE SCHEDULES AND WSPP DEFAULT TRANSMISSION TARIFF:
6.1 The Parties contemplate that they may, from time to
time, add or remove Service Schedules under this
Agreement. The attached Service Schedules A through C
for Economy Energy Service, Unit Commitment Service, and
Firm System Capacity/Energy Sale or Exchange Service are
hereby approved and made a part of this Agreement.
Nothing contained herein shall be construed as affecting
in any way the right of the Parties to jointly make
application to FERC for a change in the rates and
charges, classification, service, terms, or conditions
affecting WSPP transactions under Section 205 of the
Federal Power Act and pursuant to FERC rules and
regulations promulgated thereunder. Subject to the
provisions of Section 13, future Service Schedules, if
any, shall be adopted only by amendment of this
Agreement and shall be attached hereto and become a part -
of this Agreement.
6.2 [REBERVED]
6.3 When the WSPP Default Transmission Tariff applies as
specified in the preamble to such Default Transmission
Tariff, Transmission Service under it shall be available
both to Parties and nonParties under this Agreement;
provided, however, each Party or nonParty must be an
eligible customer under the WSPP Default Transmission
Tariff in order to receive service.
7. HUB AND OPERATING AGENT:
7.1 The Operating Agent shall act for itself and as agent
for the Parties to carry out its designated
responsibilities under this Agreement.
7.2 The Operating Agent shall, as directed by the Operating
Committee pursuant to Section 8.2.4, and on behalf of
the Parties, either (i) purchase or lease, and install
or have installed, operate and maintain the necessary
equipment to operate the Hub or (ii) contract for Hub
services.
7.3 The Operating Agent's estimated total costs to be
incurred under Section 7.2 shall be subject to review by
the Operating Committee and approval by the Executive
Committee.
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7.4 At least sixty (60) days prior to each calendar year
that this Agreement is in effect, the Operating Agent
shall prepare a budget for said year of operation under
this Agreement and shall submit same to the Operating
Committee for review, and to the Executive Committee for
approval. Subsequent budget revisions shall be submitted
to the Operating Committee for review and to the
Executive Committee for approval.
7.5 The Operating Agent shall perform other administrative
tasks necessary to implement this Agreement as directed
by the Executive Committee.
7.6 Except as provided in Section 7.7, all Parties shall
share equally in all costs of the Operating Agent
incurred under this Agreement, including but not limited
to initial FERC filing fees and any reasonable legal
fees.
7.7 Each Party, in coordination with the Operating Agent,
shall at its own expense acquire, install, operate, and
maintain all necessary software and hardware on its
system and the necessary communications link to the Hub
to conduct transactions under this Agreement.
7.8 The Operating Agent shall bill the Parties for costs
incurred under this Agreement on an estimated basis
reasonably in advance of when due, and such billings
shall be paid by the Parties when due. Such billings
shall be adjusted in the following month(s) to reflect
Mac
recorded costs. Billing and payment of the Operating
Agent's costs shall otherwise be implemented in
accordance with the provisions of Section 9.
7.9 The Operating Agent, at reasonable times and places,
shall make available its records and documentation
supporting costs for bills rendered under this Agreement
for the inspection of any Party for a period of time not
to exceed two (2) years from the time such bills were
rendered.
7.9.1A Party requesting review of the Operating Agent's
records shall give the Operating Agent
sufficient notice of its intent, but in no
event less than thirty (30) days.
7.9.2 The requesting Party may perform this review using
personnel from its own staff or designate a
certified public accounting firm for the
purpose of this review.
7.9.3 A11 costs incurred to perform this review shall be
at the requesting Party's own expense.
7.9.4 The Party performing the review shall not
voluntarily release the Operating Agent's
records or disclose any information contained
therein to any third party unless the written
consent of the Operating Agent and the
Executive Committee has been obtained.
7.10 Upon the termination of this Agreement, unless otherwise
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directed by the Executive Committee, the Operating Agent
shall either dispose of any Hub equipment which it has
purchased, or have the right of first refusal to
purchase such equipment at original cost less
depreciation, and shall apply any net proceeds from the
sale of the Hub equipment against its costs incurred
under this Agreement. The Operating Agent shall refund
any excess proceeds equally to the Parties.
8. ORGANIZATION AND ADMINISTRATION:
As a means of securing effective and timely cooperation within
the activities hereunder and as a means of dealing on a prompt
and orderly basis with various problems which may arise in
connection with system coordination and operation under
changing conditions, the Parties hereby establish an Executive
Committee and an Operating Committee.
8.1 Executive Committee:
The Executive Committee shall consist of one
representative and an alternate from each Party
designated pursuant to Section 8.5 herein. The
responsibilities of the Executive Committee are as
follows:
8.1.iTo establish sub -committees as it may from time to
time deem necessary.
8.1.2 To review at least annually the service activities
hereunder to ensure that such activities are
consistent with the spirit and intent of this
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h
Agreement.
8.1.3 To review any unresolved issues which may arise
hereunder and endeavor to resolve the issues.
8.1.4To review and approve the Operating Agent's annual
budget under this Agreement, and any revision
thereto, within thirty (30) days of
recommendation by the Operating Committee.
8.1.5To establish and approve any additional budgets
under this Agreement as may be deemed
necessary.
8.1.6To review and recommend to the Parties for approval
any additions or amendments to this Agreement,
including Service Schedules.
8.1.7To review and act on the application of an entity
to become a Party to this Agreement.
8.1.8 To designate a successor to the Operating Agent, if
necessary.
8.1.9 To do such other things and carry out such duties
as specifically required or authorized by this
Agreement; provided, however, that the
Executive Committee shall have no authority to
amend this Agreement.
8.1.10 To notify any Party of the rescission of its
interest in this Agreement due to its failure
to continue to meet the requirements of
Section 16.1.
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8.1.11 To arrange for legal representation for filing this
Agreement (and any subsequent amendments) with
FERC and supporting the Agreement (or
amendments) in any FERC proceeding, and for
other purposes as required.
8.2 Operating Committee:
The Operating Committee shall consist of one
representative and an alternate from each Party
designated pursuant to Section 8.5. The
responsibilities of the Operating Committee are as
follows:
8.2.1To establish, review, approve, or modify procedures
and standard practices, consistent with the
provisions hereof, for the guidance of load
dispatchers and other operating employees in
the Parties' electric systems as to matters
affecting transactions under this Agreement.
8.2.2 To submit to the Executive Committee any proposed
new or revised Service Schedules.
8.2.3 To establish, review, approve, or modify any
scheduling or operating procedures required in
connection with transactions under this
Agreement.
8.2.4 To direct the Operating Agent in matters governed
by this Agreement.
8.2.5To review and make recommendations to the Executive
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Committee for approval of the Operating
Agent's annual budget under this Agreement,
including any proposed revisions thereto,
within thirty (30) days of receipt from the
Operating Agent.
8.2.6To review and recommend as necessary the types and
arrangement of equipment for intersystem
communication facilities to enhance
transactions and benefits under this
Agreement.
8.2.7 To review the Operating Agent's estimated total
costs of providing, having provided or
contracting for a Hub.
8.2.8To review new member applications for membership to
this Agreement and make recommendations on
said applications to the Executive Committee.
8.2.9 To do such other things and carry out such duties
as specifically required or authorized by this
Agreement or as directed by the Executive
Committee; provided, however, that the
Operating Committee shall have no authority to
amend this Agreement.
8.3 All matters which require Operating Committee or
Executive Committee approval as provided in this
Agreement shall be by no less than ninety percent (90%)
affirmative agreement of the committee members present.
Mr-C
8.4 Unless otherwise agreed by all committee members, the
chairperson of each committee shall provide the other
Parties at least ten (10) Business Days advance
notification of all committee meetings, including an
agenda of matters to be discussed and voted on at the
meeting. All material issues to be submitted to a vote
of the committee shall appear on the agenda. Prior, to
the selection of a chairperson the Operating Agent shall
provide such advance notice for the initial meeting of
each committee.
8.5 Each Party shall give written notice to the other
Parties of the name of its designated representative and
alternate representative (to act in the absence of the
designated representative) on each committee within
thirty (30) days after the execution of this Agreement.
Notice of any change of representative or alternate
representative shall be given by written notice to the
other Parties. Each Party's designated representative
shall be authorized to act on its behalf with respect to
those committee responsibilities provided herein.
8.6 Each committee shall meet as necessary or at the request
of any Party.
8.7 Each committee shall elect a chairperson and other
officers at its first meeting.
9. PAYMENTS:
9.1 The accounting and billing period for transactions under
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Service Schedules to this Agreement shall be one (1)
calendar month, unless otherwise specified in a Service
Schedule agreed to through a Confirmation Agreement.
Bills sent to any Party shall be sent to the appropriate
billing address as set forth on the WSPP homepage or as
otherwise specified by such Party.
9.2 Payments for amounts billed under Service Schedules
hereto shall be paid so that such payments are received
by the Party to be paid on the 20th day of the invoicing
month or the tenth (10) day after receipt of the bill,
whichever is later, unless the date is changed through a
Confirmation Agreement. Payment shall be made at the
location designated by the Party to which payment is
due. Payment shall be considered received when payment
is received by the Party to which Payment is due at the
location designated by that Party. If the due date
falls on a non -Business Day of either Party, then the
payment shall be due on the next following Business Day.
9.3 Amounts not paid on or before the due date shall be
payable with interest accrued at the rate of one percent
(1t) per month, or the maximum interest rate permitted
by law, if any, whichever is less, prorated by days from
the due date to the date of payment unless and until the
Executive Committee shall determine another rate or
unless the Parties to a transaction agree to a different
rate applicable to that transaction.
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i
9.4 In case any portion of any bill is in dispute, the
entire bill shall be paid when due. Any excess amount
of bills which, through inadvertent errors or as a
result of a dispute, may have been overpaid shall be
returned by the owing Party upon determination of the
correct amount, with interest accrued at the rate of one
percent (1%) per month, or the maximum interest rate
permitted by law, if any, whichever is less, prorated by
days from the date of overpayment to the date of refund
unless and until the Executive Committee shall determine
another rate or unless the Parties to a transaction
agree to a different rate applicable to that
transaction.
10. UNCONTROLLABLE FORCES:
No Party shall be considered to be in breach of this Agreement
or any applicable Confirmation Agreement to the extent that a
failure to perform its obligations under this Agreement or any
such Confirmation Agreement shall be due to an Uncontrollable
Force. The term "Uncontrollable Force" means any cause beyond
the control of the Party affected, including but not
restricted to flood, drought, earthquake, storm, fire,
lightning, epidemic, war, riot, civil disturbance or
disobedience, labor dispute, labor or material shortage,
sabotage, restraint by court order or public authority, and
action or nonaction by, or failure to obtain the necessary
authorizations or approvals from, any governmental agency or
-19-
authority which by exercise of due diligence such Party could
not reasonably have been expected to avoid and to the extent.
which by exercise of due diligence it has been unable to
overcome. No Party shall, however, be relieved of liability
for failure of performance to the extent that such failure is
due to causes arising out of its own negligence or due to
removable or remediable causes which it fails to remove or
remedy within a reasonable time period. Nothing contained
herein shall be construed to require a Party to settle any
strike or labor dispute in which it may be involved. Any
Party rendered unable to fulfill any of its obligations by
reason of an Uncontrollable Force shall give prompt notice of
such fact and shall exercise due diligence to remove such
inability within a reasonable time period. If oral notice is
provided, it shall be promptly followed by written notice.
Notwithstanding the "due diligence" obligations or
obligations to remove or remedy the causes set forth in the
foregoing paragraph (which do not apply to this paragraph
except as specified below), where the entity providing
transmission services for transactions under any Service
Schedule interrupts such transmission service, the
interruption in transmission service shall be considered an
Uncontrollable Force under this Section 10 only in the
following two sets of circumstances:
(1) An interruption in transmission service shall be
considered an Uncontrollable Force if (a) the Parties
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agreed on a transmission path for that transaction at
the time the transaction under this Agreement was
entered into by the Parties' thereto, (b) firm
transmission involving that transmission path was
obtained pursuant to a transmission tariff or contract
to effectuate the transaction under the applicable
Service Schedule, and (c) the entity providing
transmission service curtailed or interrupted such firm
transmission pursuant to the applicable transmission
tariff or contract;
(2) if the Parties did not agree on the transmission path
for a transaction at the time the transaction was
entered into, an interruption in transmission service
shall be considered an Uncontrollable Force only if (a)
the Party contracting for transmission services shall
have made arrangements with the entity providing
transmission service for firm transmission to effectuate
the transaction under the applicable Service Schedule,
(b) the entity providing transmission service curtailed
or interrupted such transmission service due to an event
of Uncontrollable Forces or provision of like effect,
and (c) the Party which contracted for such firm
transmission services could not obtain alternate energy
at the delivery point, alternate transmission services,
or alternate means of delivering energy after exercising
due diligence.
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No Party shall be relieved by operation of this
Section 10 of any liability to pay for power delivered
to the Purchaser or to make payments then due or which
the Party is obligated to make with respect to
performance which occurred prior to the Uncontrollable
Force. This Section 10 may be modified by agreement of
the Parties to a transaction as reflected in the
applicable Confirmation Agreement.
11. WAIVERS:
Any waiver at any time by any Party of its rights with respect
to a default under this Agreement or any Confirmation
Agreements, or any other matter under this Agreement, shall
not be deemed a waiver with respect to any subsequent default
of the same or any other matter.
12. NOTICES:
12.1 Except for the oral notice provided for in Section 10 of
this Agreement, any formal notice, demand or request
provided for in this Agreement shall be in writing and
shall be deemed properly served, given or made if
delivered in person, or sent by either registered or
certified mail, postage prepaid, or prepaid telegram or
fax or other means agreed to by the Parties.
12.2 RESERVED
12.3 Notices and requests of a routine nature applicable to
delivery or receipt of power or energy or operation of
facilities shall be given in such manner as the
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committees from time to time or the Parties to a
transaction shall prescribe.
13. APPROVALS:
13.1 This Agreement is subject to valid laws, orders, rules
and regulations of duly constituted authorities having
jurisdiction. Nothing contained in this Agreement shall
give FERC jurisdiction over those Parties not otherwise
subject to such jurisdiction or be construed as a grant
of jurisdiction over any Party by any state or federal
agency not otherwise having jurisdiction by law.
13.2 This Agreement, including any Service Schedule hereto,
shall become effective as to any Party when it is
accepted for filing by FERC, without changes or
conditions unacceptable to such Party, for application
to the Parties subject to FERC jurisdiction under the
Federal Power Act; provided, however, that nothing in
this Agreement is intended to restrict the authority of
the Bonneville Power Administration (BPA) pursuant to
applicable statutory authority to use its existing
wholesale power and transmission rates or to adopt new
rates, rate schedules, or general rate schedule
provisions for application under this Agreement and
obtain interim or final approval of those rates from
FERC pursuant to Section 7 of the Pacific Northwest
Electric Power Planning and Conservation Act, 16 U.S.C.
Sec. 839e, provided such rates do not exceed the maximum
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rates in the applicable Service Schedule and are
consistent with the terms and conditions of said Service
Schedule. If, upon filing of this Agreement by Parties
subject to FERC jurisdiction under the Federal Power
Act, FERC orders a hearing to determine whether this
Agreement or a Service Schedule under this Agreement is
just and reasonable under the Federal Power Act, the
Agreement or Service Schedule shall not become effective
until the date when an order issued by FERC, determining
this Agreement or the Service Schedule to be just and
reasonable without changes or new conditions
unacceptable to the Parties, is no longer subject to
judicial review. Any changes or conditions imposed by
any agency or court, including FERC ordering a hearing,
shall be cause for immediate withdrawal by any
nonconsenting Party.
13.3 The Parties subject to FERC jurisdiction under the
Federal Power Act shall have the right to terminate
their participation in this Agreement, and any rate
schedule or services included herein, pursuant to the
terms of Section 5 of this Agreement and without the
necessity of further filing with or approval by FERC.
13.4 Any amendment or change in maximum rates specified in
the Service Schedules shall not become effective with
regard to any Party that is subject to FERC jurisdiction
under the Federal Power Act until it is accepted for
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}
filing or confirmed and approved by FERC as specified in
and subject to the conditions of Section 13.2.
13.5 Nothing contained in this Agreement shall be construed
to establish any precedent for any other agreement or to
grant any rights to or impose any obligations on any
Party beyond the scope and term of this Agreement.
14. TRANSFER OF INTEREST IN AGREEMENT
No Party shall voluntarily transfer its membership under this
Agreement without the written consent and approval of all
other Parties except to a successor in operation of the
applicable properties of such Party. With regard to the
transfer of the rights and obligations of any Party associated
with transactions under the Service Schedules, neither Party
may assign such rights or obligations unless (a) the other
Party provides its prior written consent which shall not be
unreasonably withheld; or (b) the assignment is to a successor
in operation whose creditworthiness is comparable to or higher
than that of the assigning Party. Any successor or assignee
of the rights of any Party, whether by voluntary transfer,
judicial or foreclosure sale or otherwise, shall be subject to
all the provisions and conditions of this Agreement and
Confirmation Agreements (where applicable) to the same extent
as though such successor or assignee were the original Party
under this Agreement or the Confirmation Agreements, and no
assignment or transfer of any rights under this Agreement or
any Confirmation Agreement shall be effective unless and until
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the assignee or transferee agrees in writing to assume all of
the obligations of the assignor or transferor and to be bound
by all of the provisions and conditions of this Agreement and
any Confirmation Agreement (where applicable). The execution
of a mortgage or trust deed or a judicial or foreclosure sale
made thereunder shall not be deemed a voluntary transfer
within the meaning of this Section 14.
15. SEVERABILITY:
In the event that any of the terms, covenants or conditions of
this Agreement or any Confirmation Agreement, or the
application of any such term, covenant or condition, shall be
held invalid as to any person or circumstance by any court,
regulatory agency, or other regulatory body having
jurisdiction, all other terms, covenants or conditions of this
Agreement and the Confirmation Agreement and their application
shall not be affected thereby, but shall remain in force and
effect unless a court, regulatory agency, or other regulatory
body holds that the provisions are not separable from all
other provisions of this Agreement or such Confirmation
Agreement.
16. MEMBERSHIP:
16.1 Any Electric Utility or Qualifying Facility may become a
Party to this Agreement. The Executive Committee shall
notify such Electric Utility or Qualifying Facility of
its decision within sixty (60) days of a request to
become a Party to this Agreement, and any acceptable
-26-
entity shall become a Party hereto by the execution of
this Agreement or a counterpart hereof, payment of costs
pursuant to Section 16.4, and concluding any necessary
acceptance or approval referred to in Section 13. Any
such Party, if it is subject to the ratemaking
jurisdiction of FERC, shall be responsible for any FERC
filing necessary for it to implement its performance
under this Agreement.
16.2 Each Party shall continue to meet the requirements of
Section 16.1 in order to remain a Party to this
Agreement
16.3 Being a Party to this Agreement shall not serve as a
substitute for contractual arrangements that may be
needed between any Party which operates a Control Area
and any other Party which operates within that Control
Area.
16.4 Any entity that becomes a Party to this Agreement which
was not a party to the experimental Western Systems
Power Pool Agreement shall pay a one time fee of $25,000
under this Agreement in recognition of prior efforts and
costs incurred by the parties to the experimental
Western Systems Power Pool Agreement, which efforts
greatly facilitated development of this Agreement. Such
fee shall be credited to future costs of the Operating
Agent incurred hereunder.
17. RELATIONSHIP OF PARTIES:
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17.1 Nothing contained herein or in any Confirmation
Agreement shall be construed to create an association,
joint venture, trust, or partnership, or impose a trust
or partnership covenant, obligation, or liability -on or
with regard to any one or more of the
Parties. Each Party shall be individually responsible
for its own covenants, obligations, and liabilities
under this Agreement and under any applicable
Confirmation Agreement.
17.2 All rights of the Parties are several, not joint. No
Party shall be under the control of or shall be deemed
to control another Party. Except as expressly provided
in this Agreement, no Party shall have a right or power
to bind another Party without its express written
consent.
18. NO DEDICATION OF FACILITIES:
Any undertaking by one Party to another Party under any
provision of this Agreement shall not constitute the
dedication of the electric system or any portion thereof of
the undertaking Party to the public or to the other Party, and
it is understood and agreed that any such undertaking under
any provision of this Agreement by a Party shall cease upon
the termination of such Party's obligations under this
Agreement.
19. NO RETAIL SERVICES.
Nothing contained in this Agreement shall grant any rights to
Q►-1=
or obligate any Party to provide any services hereunder
directly to or for retail customers of any Party.
20. THIRD PARTY BENEFICIARIES:
This Agreement shall not be construed to create rights, in, or
to grant remedies to, any third party as a beneficiary of this
Agreement or of .any duty, obligation or undertaking
established herein except as provided for in Section 14.
21. LIABILITY AND DAMAGES:
21.1 Except as specifically provided elsewhere in the
Agreement, no Party or its directors, members of its
governing bodies, officers or employees shall be liable
to any other Party or Parties for any loss or damage to
property, loss of earnings or revenues, personal injury,
or any other direct, indirect, or consequential damages
or injury, or punitive damages, which may occur or
result from the performance or non-performance of this
Agreement (including any applicable Confirmation
Agreement), including any negligence arising hereunder,
unless actions or claims and resulting liability,
Judgments and costs were caused by or resulted from an
action taken or not taken by a Party or Parties at the
direction of its or their directors, members of its or
their governing bodies, officers or employees with
management or administrative responsibility affecting
its or their performance under this Agreement or any
Confirmation Agreement, which is knowingly or
-29-
intentionally taken or not taken with conscious
indifference to the consequences thereof or with intent
that injury or damage would result or would probably
result therefrom.
21.2 [RESERVED]
21.3 Unless the Parties otherwise agree to a different
damages provision through a Confirmation Agreement, the
following damages provision shall apply to transactions
under Service Schedules B and C. For transactions under
Service Schedule A, this damages provision or some other
damages provision will apply only if such a damages
provision is agreed to through a Confirmation Agreement.
The damages under this Section 21.3 apply to a Party's
failure to deliver or receive electric power or energy
in violation of the terms of the Agreement and any
Confirmation Agreement. The Contract Quantity and
Contract Price referred to in this Section 21.3 are part
of the agreement between the Parties for which damages
are being calculated under this Section.
(a) If either Party fails to deliver or receive, as the
case may be, the quantities of electric power or
energy due under the Agreement and any Confirmation
Agreement (thereby becoming a "Non -Performing
Party" for the purposes of this Section 21.3), the
other party (the "Performing Party") shall be
entitled to receive from the Non -Performing Party
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an amount calculated as follows (unless performance
is excused by Uncontrollable Forces as provided in
Section 10 or by the Performing Party):
(1) If the amount the Purchaser scheduled or
received in any hour is less than the
applicable hourly Contract Quantity, then the
Purchaser shall be liable for (a) the product
of the amount (whether positive or negative),
if any, by which the Contract Price differed
from the Sales Price (Contract Price - Sales
Price) and the amount by which the quantity
received by the Purchaser was less than the
hourly Contract Quantity; plus (b) the amount
of transmission charge(s), if any, for firm
transmission service upstream of the delivery
point, which the Seller incurred to achieve
the Sales Price, less the reduction, if any,
in transmission charge(s) achieved as a result
of the reduction in the Purchaser's schedule
or receipt of electric energy (based on
Seller's reasonable commercial efforts to
achieve such reduction). If the total amounts
for all hours calculated under this paragraph
(1) are negative, then neither the Purchaser
nor the Seller shall pay any amount under this
Section 21.3 (a) (1) .
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(2) If the amount the Seller scheduled or
delivered in any hour is less than the
applicable hourly Contract Quantity, then the
Seller shall be liable for (a) the product of
the amount (whether positive or negative), if
any, by which the Replacement Price differed
from the Contract Price (Replacement Price -
Contract Price) and the amount by which the
quantity delivered by the Seller was less than
the hourly Contract Quantity; plus (b) the
amount of transmission charge(s), if any, for
firm transmission service downstream of the
delivery point, which the Purchaser incurred
to achieve the Replacement Price, less the
reduction, if any, in transmission charge(s)
achieved as a result of the reduction in the
Seller's schedule or delivery (based on
Purchaser's reasonable commercial effort to
achieve such reduction). If the total amounts
for all hours calculated under this paragraph
(2) are negative, then neither the Purchaser
nor the Seller shall pay any amount under this
Section 21.3(a)(2).
(3) The Non -Performing Party shall pay any amount
due from it under this section within the
billing period as specified in Section 9 of
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this Agreement or agreed to in the applicable
Confirmation Agreement if the Parties agreed
to revise the billing period in Section 9.
(b) The Parties agree that the amounts recoverable
under this section are a reasonable estimate of
loss and not a penalty, and represent the sole and
exclusive remedy for the Performing Party. Such
amounts are payable for the loss of bargain and the
loss of protection against future risks.
(c) Each Party agrees that it has a duty to mitigate
damages and convenants 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.
(d) In the event the Non -Performing Party disputes the
calculation of the damages under this Section 21.3,
the Non -Performing Party shall pay the full amount
of the damages as required by Section 9 of this
Agreement to the Performing Party. After informal
dispute resolution as required by Section 34.1, any
remaining dispute involving the calculation of the
damages shall be referred to binding dispute
resolution as provided by Section 34.2 of this
Agreement. If resolution or agreement results in
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refunds or the need for refunds to the Non -
Performing Party, such refunds shall be calculated
in accordance with Section 9.4 of this Agreement.
22. DEFAULT OF TRANSACTIONS UNDER THIS AGREEMENT AND CONFIRMATION
AGREEMENTS
22.1 EVENTS OF DEFAULT
An "Event of Default" shall mean with respect to a
Party ("Defaulting Party"):
(a) the failure by the Defaulting Party to make, when
due, any payment required pursuant to this
Agreement or Confirmation Agreement if such failure
is not remedied within two (2) Business Days after
written notice of such failure is given to the
Defaulting Party by the other Party ("the Non -
Defaulting Party"). The Non -Defaulting Party shall
provide the notice by facsimile to the designated
contact person for the Defaulting Party and also
shall send the notice by overnight delivery to such
contact person; or
(b) the failure by the Defaulting Party to provide
clear and good title as required by Section 33.3,
or to have made accurate representations and
warranties as required by Section 36 and such
failure is not cured within five (5) Business Days
after written notice thereof to the Defaulting
Party; or
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(c) The institution, with respect to the Defaulting
Party, by the Defaulting Party or by another person
or entity of a bankruptcy, reorganization,
moratorium, liquidation or similar insolvency
proceeding or other relief under any bankruptcy or
insolvency law affecting creditor's rights or a
petition is presented or instituted for its
winding -up or liquidation; or
(d) The failure by the Defaulting Party to provide
adequate assurances of its ability to perform all
of its outstanding material obligations to the Non
Defaulting Party under the Agreement or
Confirmation Agreement pursuant to Section 27 of
this Agreement or any substitute or modified
provision in the Confirmation Agreement.
22.2 REMEDIES FOR EVENTS OF DEFAULT
If an Event of Default occurs, the Non -Defaulting
Party shall possess the right to terminate all
transactions between the Parties under this
Agreement upon written notice (by facsimile or
other reasonable means) to the Defaulting
Party, such notice of termination to be
effective immediately upon receipt. If the
Non -Defaulting Party fails to exercise this
right of termination within thirty (30) days
following the time when the Event of Default
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becomes known (or more than thirty days if the
Non -Defaulting and Defaulting Parties agree to
an extension), then such right of termination
shall no longer be available to the Non
Defaulting Party as a remedy for the Events)
of Default. The Non -Defaulting Party
terminating transactions) under this Section
22.2 may do so without making a filing at
FERC. Upon termination, the Non -Defaulting
Party shall liquidate all transactions as soon
as practicable, provided that in no event will
the Non -Defaulting Party be allowed to'
liquidate Service Schedule A transactions.
The payment associated with termination
("Termination Payment") shall be calculated in
accordance with this Section 22.2 and Section
22.3. The Termination Payment shall be the
sole and exclusive remedy for the Non
Defaulting Party for each terminated
transaction ("Terminated Transaction") for the
time period beginning at the time notice of
termination under this Section 22 is received.
Prior to receipt of such notice of
termination by the Defaulting Party, the Non -
Defaulting Party may exercise any remedies
available to it under Section 21.3 of this
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Agreement or Confirmation Agreement(s), and
any other remedies available to it at law or
otherwise.
Upon termination, the Non -Defaulting Party may
withhold any payments it owes the Defaulting Party for
any obligations incurred prior to termination under this
Agreement or Confirmation Agreement(s) until the
Defaulting Party pays the Termination Payment to the
Non -Defaulting Party. The Non -Defaulting Party shall
possess the right to set-off the amount due it under
this Section 22 by any such payments due the Defaulting
Party as provided in Section 22.3(d).
22.3 LIQUIDATION CALCULATION OPTIONS
The Non -Defaulting Party shall calculate the
Termination Payment as follows:
(a) The Gains and Losses shall be determined by
comparing the value of the remaining term,
transaction quantities, and transaction prices
under each Terminated Transaction had it not been
terminated to the equivalent quantities and
relevant market prices for the remaining term
either quoted by a bona fide third -party offer or
which are reasonably expected to be available in
the market under a replacement contract for each
Terminated Transaction. To ascertain the market
prices of a replacement contract, the Non-
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Defaulting Party may consider, among other
valuations, quotations from leading dealers in
energy contracts, any or all of the settlement
prices of the NYMEX power futures contracts and
other bona fide third party offers, all adjusted
for the length of the remaining term and
differences in transmission. It is expressly
agreed that the Non -Defaulting Party shall not be
required to enter into replacement transactions in
order to determine the Termination Payment.
(b) The Gains and Losses calculated under paragraph (a)
shall be discounted to present value using the
Present Value Rate as of the time of termination
(to take account to the period between the time
notice of termination was effective and when such
amount would have otherwise been due pursuant to
the relevant transaction). The "Present Value
Rate" shall mean the sum of 0.50% plus the yield
reported on page "USD" of the Bloomberg Financial
Markets Services Screen (or, if not available, any
ether nationally recognized trading screen
reporting on-line intraday trading in United States
government securities) at 11:00 a.m. (New York
City, New York time) for the United States
government securities having a maturity that
matches the average remaining term of the
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Terminated Transactions; and
(c) The Non -Defaulting Party shall set off or
aggregate, as appropriate, the Gains and Losses (as
calculated in Section 22.3(a)) and Costs and notify
the Defaulting Party. If the Non -Defaulting
Party's aggregate Losses and Costs exceed its
aggregate Gains, the Defaulting Party shall, within
three (3) Business Days of receipt of such notice,
pay the Termination Payment to the Non -Defaulting
Party, which• amount shall bear interest at the
Present Value rate from the time notice of
termination was received until paid. If the Non -
Defaulting . Party's aggregate Gains exceed its
aggregate Losses and Costs, the Non -Defaulting
Party, after any set-off as provided in paragraph
(d), shall pay the remaining amount to the
Defaulting Party within three (3) Business Days of
the date notice of termination was received
including interest at the Present Value from the
time notice of termination was received until the
Defaulting Party receives payment.
(d) The Non -Defaulting Party shall aggregate or set
off, as appropriate, at its election, any or all
other amounts owing between the Parties (discounted
at the Present Value Rate) under this.Agreement and
any Confirmation Agreements against the
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Termination Payment so that, all such amounts are
aggregated and/or netted to a single liquidated
amount. The net amount due from any such
liquidation shall be paid within three (3) Business
Days following the date notice of termination is
received.
If the Defaulting Party disagrees with the
calculation of the Termination Payment, the calculation
issue shall be submitted to informal dispute resolution
as provided in Section 34.1 of this Agreement and
thereafter binding dispute resolution pursuant to
Section 34.2 if the informal dispute resolution does not
succeed in resolving the dispute. Pending resolution of
the dispute, the Defaulting Party shall pay the full
amount of the Termination Payment calculated by the Non -
Defaulting Party within three (3) Business Days of
receipt of notice as set forth in Section 33.2(c)
subject to the Non -Defaulting Party refunding, with
interest, pursuant to Section 9.4, any amounts
determined to have been overpaid.
For purposes of this Section 22.3:
(i) "Gains" means the economic benefit (exclusive of
Costs), if any, resulting from the termination of
the Terminated Transactions, determined in a
commercially reasonable manner as calculated in
accordance with this Section 22.3;
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"Losses" means the economic loss (exclusive of
Costs), if any, resulting from the termination of
the Terminated Transactions, determined in a
commercially reasonable manner as calculated in
accordance with this Section 22.3;
"Costs" means brokerage fees, commissions and other
similar transaction costs and expenses reasonably
incurred in terminating any specifically related
arrangements which replace a Terminated
Transaction, transmission and ancillary service
costs associated with Terminated Transactions, and
reasonable attorneys' fees, if any, incurred in
connection with the Non -Defaulting Party enforcing
its rights with regard to the Terminated
Transactions. The Non -Defaulting Party shall use
reasonable efforts to mitigate or eliminate these
Costs.
(iv) In no event, however, shall a Party's Gains, Losses
or Costs include any penalties or similar charges
imposed by the Non -Defaulting Party.
22.4 MODIFICATION
The Parties may agree to modify this Section 22 as
reflected in the applicable Confirmation Agreement.
22A. DEFAULT IN PAYMENT OF WSPP OPERATING COSTS:
22A.1A Party shall be deemed to be in default in payment
of its share of WSPP operating costs pursuant
-41-
to Section 7 of this Agreement, if any, when
payment is not received within ten (10) days
after receipt of written notice. A default by
any Party in such payment obligations shall be
cured by payment of all overdue amounts
together with interest accrued at the rate of
one percent (it) per month, or the maximum
interest rate permitted by law, if any,
whichever is less, prorated by days from the
due date to the date the payment curing the
default is made unless and until the Executive
Committee shall determine another rate.
22A.2 A defaulting Party, which is in default under
Section 22.A1, shall be liable for all costs,
including costs of collection and reasonable
attorney fees, plus interest as provided in
Section 22.A1 hereof.
22A.3 The rights under this Agreement of a Party which is
in default of its obligation to pay operating
costs under this Agreement for a period of
three (3) months or more may be revoked by a
vote of the non -defaulting Parties'
representatives on the Executive Committee
consistent with Section 8.3. The defaulting
Party's rights shall not be revoked, however,
unless said Party has received at least thirty
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(30) days written notice of the non -defaulting
Parties' intent to revoke such rights. Said
notice shall state the date on which the
revocation of rights shall become effective if
the default is not cured and shall state all
actions which must be taken or amounts which
must be paid to cure the default. This
provision allowing the non -defaulting Parties
to revoke such rights is in addition to any
other remedies provided in this Agreement or
at law and shall in no way limit the non -
defaulting Parties' ability to seek judicial
enforcement of the defaulting Party's
obligations to pay its share of the operating
costs under this Agreement. Upon the
effective date of such revocation of rights,
the defaulting party shall not be allowed to
enter into any new transactions under this
Agreement. The defaulting party under the
Agreement or any Confirmation Agreements shall
be required to carry out all obligations that
existed prior to the effective date of such
revocation. If a defaulting Party's rights
under this Agreement have been revoked, the
Executive Committee may restore that Party's
rights upon the defaulting Party paying all
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23.
24.
amounts due and owing under this Agreement.
22A.4Upon revocation of the rights of a defaulting Party
under this Agreement, Operating Agent costs
hereunder shall be equally shared among the
remaining Parties. Cost allocation
adjustments shall be retroactive to the date
of the default.
OTHER AGREEMENTS:
No provision of this Agreement shall preclude any Party from
entering into other agreements or conducting transactions
under existing agreements with other Parties or third parties.
This Agreement shall not be deemed to modify or change any
rights or obligations under any prior contracts or agreements
between or among any of the Parties.
GOVERNING LAW:
This Agreement and any Confirmation Agreement shall be
governed by and construed in accordance with the laws of the
State of Utah, without regard to the conflicts of laws rules
thereof. The foregoing notwithstanding, (1) if both the
Seller and Purchaser are organized under the laws of Canada,
then the laws of the province of the Seller shall govern, or
(2) if the Seller is an agency of or part of the United States
Government, then the laws of the United States of America
shall govern. This Section 24 may be modified by the Parties
to the transaction as reflected in the applicable Confirmation
Agreement.
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25. JUDGMENTS AND DETERMINATIONS:
Whenever it is provided in this Agreement that a Party shall
be the sole judge of whether, to what extent, or under what
conditions it will provide a given service, its exercise of
its judgment shall be final and not subject to challenge.
Whenever it is provided that (i) a service under a given
transaction may be curtailed under certain conditions or
circumstances, the existence of which are determined by or in
the judgment of a Party, or (ii) the existence of
qualifications for membership shall be determined by the
Executive Committee pursuant to Section 16, that Party's or
the Executive Committee's determination or exercise of
judgment shall be final and not subject to challenge if it is
made in good faith and not made arbitrarily or capriciously.
26. COMPLETE AGREEMENT:
This Agreement and any subsequent amendments, including the
Service Schedules and Exhibits incorporated herein, and any
Confirmation Agreement, shall constitute the full and complete
agreement of the Parties with respect to the subject matter
hereof, and all prior or contemporaneous representations,
statements, negotiations, understandings and inducements are
fully merged and incorporated in this Agreement.
27. CREDITWORTHINESS:
Should a Party's creditworthiness, financial responsibility,
or performance viability become unsatisfactory to the other
Party in such other Party's reasonably exercised discretion
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with regard to any transaction pursuant to this Agreement and
any Confirmation Agreement (after the transaction is agreed to
or begins), the dissatisfied Party (the "First Party") may
require the other Party (the "Second Party") to provide, at
the Second Party's option (but subject to the First Party's
acceptance based upon reasonably exercised discretion), either
(1) the posting of a letter of credit, (2) a cash prepayment,
(3) the posting of other acceptable collateral or security by
the Second Party, (4) a guarantee agreement executed by a
creditworthy entity; or (5) some other mutually agreeable
method of satisfying the First Party. The Second Party's
obligations under this Section 27 shall be limited to a
reasonable estimate of the damages to the First Party
(consistent with Section 21.3 of this Agreement) if the Second
Party were to fail to perform its obligations. Events which
may trigger the First Party questioning the Second Party's
creditworthiness, financial responsibility, or performance
viability include, but are not limited to, the following:
(1) The First Party has knowledge that the Second Party (or
its Guarantor if applicable) are failing to perform or
defaulting under other contracts.
(2) The Second Party has exceeded any credit or trading
limit set out in the Confirmation Agreement or other
agreement between the Parties.
(3) The Second Party or its Guarantor has debt which is
rated as investment grade and that debt falls below the
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investment grade rating by at least one rating agency or
is below investment grade and the rating of that debt is
downgraded further by at least one rating agency.
(4) Other material adverse changes in the Second Party's
financial condition occur.
(5) Substantial changes in market prices which materially
and adversely impact the Second Party's ability to
perform under this Agreement or any Confirmation
Agreement occur.
If the Second Party fails to provide such reasonably
satisfactory assurances of its ability to perform a
transaction hereunder within three (3) Business Days of demand
therefore, that will be considered an Event of Default under
Section 22 of this Agreement and the First Party shall have
the right to exercise any of the remedies provided for under
that section 22. This Section 27 may be modified by agreement
of the Parties as reflected in the applicable Confirmation
Agreement. Nothing contained in this Section 27 shall affect
any credit agreement or arrangement, if any, between the
Parties.
28. NETTING AND SET-OFF:
28.1 If the Purchaser and the Seller are each required to pay
an amount to each other in the same calendar month for
transactions under this Agreement, then such amounts
with respect to each Party may be aggregated and the
Parties may discharge their obligations to pay through
QYL
netting of the respective amounts due, in which case the
Party, if any, owing the greater aggregate amount may
pay to the other Party the difference between the
amounts owed. Each Party reserves to itself all rights,
set -offs, counterclaims, and other remedies and defenses
(to the extent not expressly herein waived or denied)
which such Party has or may be entitled to arising from
or out of this Agreement and any applicable Confirmation
Agreements. All outstanding transactions and the
obligations to make payments under this Agreement, any
Confirmation Agreement, or any other agreement between
the Parties may be offset against each other, set off,
or recouped therefrom.
28.2 Parties shall net payments (associated with transactions
under this Agreement and Confirmation Agreement) in
accordance with Exhibit A, if such Parties have executed
the form attached as Exhibit A. Parties that have
executed Exhibit A shall provide a signed copy of
Exhibit A to the Parties under this Agreement and
indicate on the WSPP Homepage that they have so executed
Exhibit A (once the WSPP Homepage possesses the
necessary capability). If a Party executed Exhibit A,
that Party may withdraw its agreement to net by
providing thirty (30) days notice to all Parties that it
is withdrawing its agreement to net. If a Party
indicated its election to net payments on the WSPP
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Homepage and that Party desires to withdraw its
agreement to net, that Party shall provide 30 days
notice on the WSPP Homepage of the change in its
election to net and such action shall be sufficient to
satisfy the notice requirement of the preceding
sentence. Any such changes in netting status shall
apply beginning 30 days after notice is provided and
only shall apply to transactions agreed to beginning on
or after the date the change in netting status becomes
effective.
28.3 The Parties may by separate agreement either through a
Confirmation Agreement or some other agreement set out
specific terms relating to the implementation of the
netting and/or set-off in addition to or in lieu of
Exhibit A.
29. TAXES:
The Contract Price for all transactions under the Service
Schedules shall include full reimbursement for, and the Seller
is liable for and shall pay, or cause to be paid, or reimburse
the Purchaser for if the Purchaser has paid, all taxes
applicable to a transaction that arise prior to the delivery
point. If the Purchaser is required to remit such tax, the
amount shall be deducted from any sums due to the Seller. The
Seller shall indemnify, defend, and hold harmless the
Purchaser from any claims for such taxes. The Contract Price
does not include reimbursement for, and the Purchaser is
-49-
liable for and shall pay, cause to be paid, or reimburse the
Seller for if the Seller has paid, all taxes applicable to a
transaction arising at and from the delivery point, including
any taxes imposed or collected by a taxing authority with
jurisdiction over the Purchaser. The Purchaser shall
indemnify, defend, and hold harmless the Seller from any
claims for such taxes. Either Party, upon written request of
the other Party, 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 the other Party in obtaining any
exemption from or reduction of any tax. Taxes are any amounts
imposed by a taxing authority associated with the transaction.
This Section 29 may be modified by agreement of the Parties
to the transaction as reflected in the applicable Confirmation
Agreement.
30. CONFIDENTIALITY:
The terms of any transaction under the Service Schedules or
any other information exchanged by the Purchaser and Seller
relating to the transaction shall not be disclosed to any
person not employed or retained by the Purchaser or the Seller
or their affiliates, except to the extent disclosure is (1)
required by law, (2) reasonably deemed by the disclosing Party
to be required to be disclosed in connection with a dispute
between or among the Parties, or the defense of any litigation
or dispute, (3) otherwise permitted by consent of the other
-50-
Party, which consent shall not be unreasonably withheld, (4)
required to be made in connection with regulatory proceedings
(including proceedings relating to FERC, the United States
Securities and Exchange Commission or any other federal, state
or provincial regulatory agency); (5) required to comply with
North American Electric Reliability Organization, regional
reliability council, or successor organization requirements;
or (6) necessary to obtain transmission service. In the event
disclosure is made pursuant to this provision, the Parties
shall use reasonable efforts to minimize the scope of any
disclosure and have the recipients maintain the
confidentiality of any documents or confidential information
covered by this provision, including, if appropriate, seeking
a protective order or similar mechanism in connection with any
disclosure. This provision shall not apply to any information
that was or is hereafter in the public domain (except as a
result of a breach of this provision). The Parties may agree
to amend the terms of this Section 30 through a separate
agreement addressing confidentiality.
31. TRANSMISSION TARIFF:
Pursuant to FERC Order No. 888, issued on April 24, 1996, and
FERC orders where applicable, the WSPP Default Transmission
Tariff has been filed and has become effective. The Parties
agree to be bound by the terms of that Tariff for so long as
they are Western Systems Power Pool members.
32. TRANSACTION SPECIFIC TERMS AND ORAL AGREEMENTS:
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32.1 The Parties' agreement to transaction specific terms
which constitute the Confirmation Agreement shall be
made by one of the following methods: (1) provision of
pertinent information through written Confirmation
Agreements (see Exhibit C for a sample); or (2) oral
conversation, provided that such oral conversation is
recorded electronically. Written confirmation shall be
required for all transactions of one week or more. Upon
request of the Purchaser or at the election of the
Seller, the Seller shall provide written confirmation
which must be received by the Purchaser within five
Business Days of the date of the agreement or request.
The Purchaser shall have five Business Days from date of
receipt to respond to the confirmation. If the
Purchaser does not respond within that time period, the
Seller's written confirmation shall be considered as
accepted and final. If the Seller fails to provide any
required written confirmation within five Business Days,
as described above, then the Purchaser may submit a
written confirmation to the Seller. The Purchaser shall
submit such written confirmation within five Business
Days after the deadline for submitting a written
confirmation applicable to the Seller as set forth above
has expired. If the Seller fails to respond to
Purchaser's confirmation within five Business Days, then
the Purchaser's written confirmation shall be considered
-52-
as accepted and final. Notwithstanding the foregoing,
any failure of the Seller or the Purchaser to provide
written confirmation of the transaction shall not
invalidate any oral agreement of the Parties.
32.2 The Parties agree not to contest, or assert any defense
with respect to, the validity or enforceability of any
agreement to the terms concerning a specific
transaction(s), on the basis that documentation of such
terms fails to comply with the requirements of any
statute that agreements be written or signed. Each
Party consents to the recording by the other Party,
without any further notice, of telephone conversations
between representatives of the Parties, which contain
agreements to or discussion concerning the terms of a
specific transaction(s). All such recordings may be
introduced and admitted into evidence for the purpose of
proving agreements to terms, and any objection to such
introduction or admission for such purpose is hereby
expressly waived. The terms documented hereunder,
whether
stated in a written
document
or a recording, are
intended
by the Parties as
a final
expression of their
agreement with respect to such terms as are included
therein and may not be contradicted by evidence of any
prior agreement, but may be supplemented by course of
dealing, performance, usage of trade and evidence of
consistent additional mutually agreed -upon terms.
-53-
32.3 For individual transactions under the Service Schedules,
the Agreement as it may be modified or supplemented by a
Confirmation Agreement shall bind the Parties and govern
the transactions; provided, however, if the Parties to a
transaction do not reach agreement on such modification
or change to a term of the Agreement, or the
Confirmation Agreement is not considered accepted and
final pursuant to Section 32.1, then the term or terms
of the Agreement, which the Parties could not reach
agreement to modify or change or which are not
considered modified pursuant to Section 32.1, shall
apply to that transaction. In the event of a conflict
between a binding and effective Confirmation Agreement
and this Agreement, the Confirmation Agreement shall
govern so long as the modifications or changes to the
Agreement adopted in the Confirmation Agreement are to
provisions in the Agreement that Parties are provided
the explicit authority to modify or change.
32.4 The Seller shall not be required to file written
confirmations with FERC.
33. PERFORMANCE, TITLE, AND WARRANTIES FOR TRANSACTIONS UNDER
SERVICE SCHEDULES
33.1 Performance
33.1.1 The Seller shall deliver to the delivery
point(s) as agreed to in the applicable
Confirmation Agreement and sell to the
-54-
Purchaser in accordance with the terms of the
Agreement and such Confirmation Agreement.
33.1.2 The Purchaser shall receive and purchase the
Contract Quantity, as agreed to by the Parties
in the applicable Confirmation Agreement, at
the delivery point(s) and purchase from the
Seller in accordance with the terms of the
Agreement and such Confirmation Agreement.
33.2 Title and Risk of Loss
Title to and risk of loss of the electric energy shall
pass from the Seller to the Purchaser at the delivery point
agreed to in the Confirmation Agreement; provided, however,
with regard to federal agencies or parts of the United States
Government, title to and risk of loss shall pass to Purchaser
to the extent permitted by and consistent with applicable law.
33.3 Warranties
The Seller warrants that it will transfer to the
Purchaser good title to the electric energy sold under the
Agreement and any Confirmation Agreement, free and clear of
all liens, claims, and encumbrances arising or attaching prior
to the delivery point and that Seller's sale is in compliance
with all applicable laws and regulations. THE SELLER HEREBY
DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.
34. DISPUTE RESOLUTION
34.1 INFORMAL DISPUTE RESOLUTION
-55-
Before binding dispute resolution or any other form of
litigation may proceed, any dispute between the Parties to a
transaction under this Agreement first shall be referred to
nonbinding mediation. The Parties shall attempt to agree upon
a mediator from a list of ten (10) candidates provided by the
Chairman of the WSPP Operating Committee or his or her
designee. If the Parties are unable to agree, then the
Chairman or the designee shall appoint a mediator for the
dispute. Neither the mediator nor the person involved on
behalf of the WSPP in developing a list of mediators for the
Parties to choose from or in selecting the mediator (if the
Parties are unable to do so) shall possess a direct or
indirect interest in either Party or the subject matter of the
mediation. The WSPP shall establish procedures for the
appointment of mediators and the conduct of mediation and
those procedures shall apply to the mediation.
34.2 BINDING DISPUTE RESOLUTION
The. Parties to a dispute may elect binding dispute
resolution using the following process unless binding
arbitration of certain disputes is required under this
Agreement in which event the Parties shall use the process set
forth in this Section 34.2 to resolve such disputes, unless
the Parties otherwise agree:
(a) WSPP Dispute Resolution: The Parties may
initiate binding dispute resolution under WSPP
procedures by notifying the Chairman of the WSPP
-56
Operating Committee or his or her designee. The
Chairman or his or her designee shall provide the
Parties with a list of ten (10) eligible arbitrators.
Within ten (10) days of receiving the list, the Parties
shall agree on a single arbitrator from the list to
conduct the arbitration, or notify the Chairman of the
Operating Committee or the designee of their inability
to reach agreement. If notified of the Parties
inability to reach agreement, then the Chairman or the
designee shall choose the arbitrator from the list
within five (5) days. Neither the arbitrator nor the
person involved on behalf of the WSPP in developing a
list of arbitrators for the Parties to choose from or in
selecting the arbitrator (if the Parties are unable to
do so) shall possess a direct or indirect interest in
either Party or the subject matter of the arbitration.
The Procedures to be used for this arbitration shall
follow the arbitration procedures which shall be
developed and maintained by the WSPP and the procedures
will be generally consistent with the commercial
arbitration rules of the American Arbitration
Association though not involving the Association.
If the Parties agree to binding dispute resolution under
this Section 34.2, each Party understands that it will not be
able to bring a lawsuit concerning any dispute that may arise
which is covered by this arbitration provision.
-57-
Notwithstanding the foregoing, nothing herein is intended to
waive any provision of the Federal Arbitration Act, 9 U.S.C. §
1, et. sea., or any right under state statute or common law to
challenge an arbitration award or to prevent any action to
enforce any arbitration award.
34.3 COSTS
Each Party shall be responsible for its own costs
and those of its counsel and representatives. The
Parties shall equally divide the costs of the arbitrator
or mediator and the hearing.
34.4 CONFIDENTIALITY
Any arbitration or mediation under this Section 34
shall be conducted on a confidential basis and not
disclosed, including any documents or results which
shall be considered confidential, unless the Parties
otherwise agree or such disclosure is required by law.
34.5 MODIFICATION
The Parties may modify, eliminate, or replace
Sections 34.2, 34.3 and/or 34.4 of this Agreement as
reflected and agreed to in a Confirmation Agreement.
35. FORWARD CONTRACTS
The Parties acknowledge and agree that all transactions under
the Agreement and Confirmation Agreement(s) are forward
contracts and that the Parties are forward contract merchants,
as those terms
are used in
the United States
Bankruptcy
Code.
The Parties
acknowledge
and agree that
all of
their
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transactions, together with this Agreement and the related
Confirmation Agreement(s) form a single, integrated agreement,
and agreements and transactions are entered into in reliance
on the fact that the agreements and each transaction form a
single agreement between the Parties.
36. ADDITIONAL REPRESENTATIONS AND WARRANTIES
Each Party warrants and represents to the other(s) that
it possesses the necessary corporate, governmental and legal
authority, right and power to enter into and agree to the
applicable Confirmation Agreement for a transaction or
transactions and to perform each and every duty imposed, and
that the Parties' agreement to buy and sell power under this
Agreement and the Confirmation Agreement represents a
contract. Each Party also warrants and represents to the
other(s) that each of its representatives executing or
agreeing through a Confirmation Agreement to a transaction
under this Agreement is authorized to act on its behalf.
Each Party further warrants and represents that entering
into and performing this Agreement and any applicable
Confirmation Agreement does not violate or conflict with its
Charter, By-laws or comparable constituent document, any law
applicable to it, any order or judgment of any court or other
agency of government applicable to it or any agreement to
which it is a party and that this Agreement and applicable
Confirmation Agreement(s), constitute a legal, valid and
binding obligation enforceable against such Party in
-59-
accordance with the terms of such agreements.
Each Party also represents that it is solvent and that
on each delivery this representation shall be deemed renewed
unless notice to the contrary is given in writing by the
Purchaser to the Seller before delivery.
37. EXECUTION BY COUNTERPARTS:
This Agreement may be executed in any number of counterparts,
and upon execution by all Parties, each executed counterpart
shall have the same force and effect as an original instrument
and as if all Parties had signed the same instrument. Any
signature page of this Agreement may be detached from any
counterpart of this Agreement without impairing the legal
effect of any signatures thereon, and may be attached to
another counterpart of this Agreement identical in form hereto
but having attached to it one or more signature pages.
38. WITNESS:
IN WITNESS WHEREOF, the Parties have caused this Agreement to
be executed by their duly authorized representative as of the
27th day
of July,
1991 (or
as of
the date of execution of this
Agreement
by each
Party's
duly
authorized representation, in
the case of any Party that becomes a signatory to this
Agreement subsequent to July 27, 1991).
By
onis C. Malb rg, May r
Attest: Approved as to Form:
Bruce V. Malkenhorst, City Clerk Eric T. Fresch, Legal Counsel
Q-TIM
EXHIBIT A
NETTING
Each Party that executes this Exhibit A to the Agreement
agrees to net payments for transactions under WSPP Service Schedule
A, B, and C with any other Party or Parties which also have agreed
to net payments by executing a copy of this Exhibit A. The Party
executing this Exhibit A shall indicate below when it desires that
its agreement to net becomes effective. A Party agreeing to net
under this Exhibit A shall comply with the provisions of Section
28.2 of the Agreement. Defined terms used herein are as defined in
the WSPP Agreement. Netting shall be done in accordance with the
following provision:
If the Purchaser and Seller are each required
to pay an amount on the payment due date in
the same month for transactions under the
Agreement or Confirmation Agreement, then such
amounts with respect to each Party will be
aggregated and the Parties will discharge
their obligations to pay through netting, in
which case the Party owing the greater
aggregate amount will pay to the other party
the difference between the amounts owed
consistent with the payment times in Section
9.2 of the Agreement, unless the Parties have
otherwise agreed to a different payment time
as allowed by the Agreement. Each Party
reserves to itself all rights, set -offs,
counterclaims and other remedies and/or
defenses to which it is or may be entitled,
arising from or out of the Agreement. All
outstanding payments between the Parties which
are to be netted pursuant to this Exhibit A
for transactions under WSPP Service Schedule
A, B, and C shall be offset against each other
or set off or recouped therefrom.
Name of Authorized Representative
Name of WSPP Member
Signature of Authorized
Representative
Effective Date for Netting
Date of Execution
[WSPP Sample Form — Parties are free to use this or disregard it.]
FORM OF COUNTERPARTY GUARANTEE AGREEMENT
This Guarantee Agreement (this "Guarantee"), dated, as of ( 1,
199r 1, is made and entered into by f 1, a [ 1 corporation
{"Guarantor").
WITNESSETH:
WHEREAS, f . 1 (the "Company") may enter into
transactions involving power sales under the Western Systems Power Pool ("WSPP
Agreement") and related confirmation agreements' (collectively "Agreements') with
[Company Name] ("Guaranteed Party'; and
WHEREAS, Guarantor will directly or indirectly benefit from the Agreements.
NOW THEREFORE, in consideration of the Guaranteed Party agreeing to
conduct business with Company, Guarantor hereby covenants and agrees as follows:
1. GUARANTY. Subject to the provisions hereof, Guarantor hereby
irrevocably and unconditionally guarantees the timely payment when due of the
obligations of Company (the "Obligations"). to the Guaranteed Party in accordance with
the Agreements. If Company fails to pay any. Obligations, Guarantor shall promptly pay
to the Guaranteed Party no later than the next Business Day (as defined in the WSPP
Agreement), after notification, the amount due in the same currency and manner provided
for in the Agreements. This Guarantee shall constitute a guarantee of payment and not of
collection. Guarantor shall have no right of subrogation with respect to any payments it
makes under this Guarantee until all of the Obligations of Company to the Guaranteed
Party are paid in full. The liability of Guarantor under the Guarantee shall be subject to
the following:
(a) Guarantor's liability hereunder shall be and is specifically limited
to payments expressly required to be made in accordance with the Agreements (even if
such payments are deemed to be damages) and, except to the extent specifically provided
in the Agreements, in no event shall Guarantor be subject hereunder to consequential,
exemplary, equitable, loss of profits, punitive, tort, or any other even if such fees together
with the payments exceed the cap in Section 1(b), damages, costs, except that Guarantor
shall be required to pay reasonable attorney fees.
(b) The aggregate liability of the Guarantor shall not exceed [_�
Million U.S. Dollars [ 1•
2. DEMANDS AND NOTICE. If Company fails or refuses to pay any
Obligations, the Guaranteed Party may make a demand upon Guarantor (hereinafter
referred to as a "Payment Demand"). A Payment Demand shall be in writing and shall
reasonably and briefly specify in what manner and what amount Company has failed to
pay and an explanation of why such payment is due, with a specific statement that the
Guaranteed Party is calling upon Guarantor to pay under this Guarantee. A Payment
Demand satisfying the foregoing requirements shall be deemed sufficient notice to
Guarantor that it must pay the Obligations. A single written Payment Demand shall be
effective as to any specific default during the continuance of such default, until Company
or Guarantor has cured such default, and additional Payment Demands concerning such
default shall not be required until such default is cured.
3. REPRESENTATIONS AND WARRANTIES. Guarantor represents and
warrants that:
(a) it is a corporation duly organized and validly existing under the
laws of the State of f 1 and has the corporate power and authority to
execute, deliver and carry out the terms and provisions of this Guarantee;
(b) no authorization, approval, consent or order of, or registration or
filing with, any court or other governmental body having jurisdiction over Guarantor is
required on the part of Guarantor for the execution and delivery of this Guarantee; and
(c) this Guarantee constitutes a valid and legally binding agreement of
Guarantor enforceable against Guarantor in accordance with its terms, except as the
enforceability of this Guarantee may be limited by the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and by general principles of equity.
4. EFFECT OF BANKRUPTCY BY COMPANY. The Guarantor's
obligation to pay under this Guarantee shall not be affected in any way by the institution
with respect to the Company of a bankruptcy, reorganization, moratorium or similar
insolvency proceeding or other relief under any bankruptcy or insolvency law affecting
creditor's rights or a petition for the Company's winding -up or liquidation.
5. AMENDMENT. No term or provision of this Guarantee shall be
amended, modified, altered, waived, or supplemented except in a writing signed by the
Guarantor and Guaranteed Party hereto.
6. WAIVERS. Guarantor hereby waives (a) notice of acceptance of this
Guarantee; (b) presentment and demand concerning the liabilities of Guarantor, except as
expressly hereinabove set forth; and (c) any right to require that any action or proceeding
be brought against Company or any other person, or except as expressly hereinabove set
forth, to require that the Guaranteed Party seek enforcement of any performance against
Company or any other person, prior to any action against Guarantor under the terms
hereof.
Except as to applicable statutes of limitation, no delay of the Guaranteed Party in
the exercise of, or failure to exercise, any rights hereunder shall operate as a waiver of
such rights, a waiver of any other rights or a release of Guarantor from any obligations
hereunder.
Guarantor consents to the renewal, compromise, extension, acceleration or other
changes in the time of payment of or other changes in the terms of the Obligations, or any
part thereof or any changes or modifications to the terms of the Agreements.
Guarantor may terminate this Guarantee by providing written notice of such
termination to the Guaranteed Party and upon the effectiveness of such termination,
Guarantor shall have no further liability hereunder, except as provided in the last sentence
of this paragraph. No such termination shall be effective until fifteen (15) Business Days
after receipt by the Guaranteed Party of such termination notice. No such termination
shall affect Guarantor's liability with respect to any obligations arising under any
transaction entered into prior to the time the termination is effective, which transaction
shall remain guaranteed pursuant to the terms of this Guarantee.
7. ASSIGNMENT. The Guarantor shall not assign this Guarantee without
the express written consent of the Guaranteed Party. The Guaranteed Party shall be
entitled to assign its rights under this Agreement in its sole discretion.
8. NOTICE. . Any Payment Demand, to the Guaranteed Party or the
Guarantor notice, request, instruction, correspondence or other document to be given
hereunder by any party to another (herein collectively called "Notice") shall be in writing
and delivered personally or mailed by certified mail, postage prepaid and return receipt
requested, or by telegram or telecopier, as follows:
To [Name of Guaranteed Party]
To Guarantor:
Attn:
Fax No.. �)
Attn:
Fax No.. L�
Notice given by personal delivery or mail shall be effective upon actual receipt.
Notice given by telegram or telecopier shall be effective upon actual receipt if received
during the recipient's normal business hours, or at the beginning of the recipient's next
business day after receipt if not received during the recipient's normal business hours.
All Notices by telegram or telecopier shall be confirmed promptly after transmission in
writing by certified mail or personal delivery. Any party may change any address to
which Notice is to be given to it by giving notice as provided above of such change of
address.
"8. MISCELLANEOUS. THIS GUARANTEE SHALL IN ALL RESPECTS
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF [State], WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS. This Guarantee shall be binding upon Guarantor, its successors and assigns and
inure to the benefit of and be enforceable by the Guaranteed Party, its successors and
assigns. The Guarantee embodies the entire agreement and understanding between
Guarantor and the Guaranteed Party and supersedes all prior agreements and
understandings relating to the subject matter hereof. The headings in this Guarantee are
for purposes of reference only, and shall not affect the meaning hereof. This Guarantee
may be executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument.
EXECUTED as of the day and year first above written.
[ I
By:
Name:
Title:
wspp\1003-369-147
EXHIBIT C
SAMPLE PORN FOR CONFIRMATION
1. Transaction Specific Agreements
The undersigned Parties agree to sell and purchase
electric energy pursuant to the WSPP Agreement as it is
supplemented and modified below:
(a) Seller:
(b) Purchaser:
(c) Period of Delivery: From _�� To
(d) Schedule (Days and Hours):
(e) Delivery Rate:
(f) Delivery Point(s):
(g) Type of Service (Check as Applicable)
Service Schedule A
Service Schedule B
Service Schedule C(Cl)
Service Schedule C(C2)
(h) Contract Quantity: Total MWhrs.
(i) Contract Price:
(j) Transmission Path for the Transaction (If Applicable):
(k) Date of Agreement if different:
(1) Special Terms and Exceptions:
See Attachment A
(Special Terms and Exceptions shall be shown on an Attachment to
this Confirmation.]
Name of Trader for Purchaser Name of Trader for Seller
Authorized Signature Authorized Signature
for Purchaser for Seller
Date
Date
SERVICE SCHEDULE A
ECONOMY ENERGY SERVICE
A-1 PARTIES:
This Service Schedule is agreed upon as a part of this
Agreement by the Parties.
A-2 PURPOSE:
The purpose of this Service Schedule is to define additional
specific procedures, terms and conditions for requesting and
providing Economy Energy Service.
A-3 SCHEDULING AND DELIVERY:
A-3.1A Party may schedule Economy Energy Service from another
Party by mutual agreement; provided, however, that
each Party shall be the sole judge as to the extent
to and the conditions under which it is willing to
provide or receive such service hereunder
consistent with statutory requirements and
contractual commitments including the Agreement and
any applicable Confirmation Agreement.
A-3.2Scheduling of Economy Energy Service hereunder shall be
a responsibility of the Parties involved.
A-3.3 Each Seller/Purchaser may prepare a daily estimate of
the amount of Economy Energy Service that it is
willing and able to sell/buy each hour and the
associated hourly sale/purchase price for the next
Business Day, plus the weekend and holidays, and
communicate this information to all other Parties
via the Hub.
A-3.4 Purchasers shall arrange purchases directly with
UM]
Sellers, and shall be responsible for transmission
arrangements.
A-3.5Unless otherwise mutually agreed between the Purchaser
and the Seller, all Economy Energy Service
transactions shall be pre -scheduled, and billings
shall be based on amounts and prices agreed to in
advance by schedulers, subject to Paragraph A-3.6
and subject to change by mutual agreement between
dispatchers or schedulers due to system changes.
A-3.6 Price shall be as mutually agreed in advance between the
Purchaser and the Seller. Except as provided for
in Section A-3.9, the price shall not exceed the
Seller's forecasted Incremental Cost plus up to:
$7.32/kW/ month; $1.68/kW/week; 33.784:/kW/day;
14.07 mills/kWh; or 21.11 mills/kWh for service of
sixteen (16) hours or less per day. The hourly
rate is capped at the Seller's forecasted
Incremental Cost plus 33.78(,4/kW/ day. The total
demand charge revenues in any consecutive seven-day
period shall not exceed the product of the weekly
rate and the highest demand experienced on any day
in the seven-day period. In lieu of payment, such
Parties may mutually agree to exchange economy
energy at a ratio not to exceed that ratio provided
for in Section C-3.6 of Service Schedule C. The
Seller's forecasted Incremental Cost discussed
above also may include any transmission and/or
A-2
ancillary service costs associated with the sale,
including the cost of any transmission and/or
ancillary services that the Seller must take on its
own system. Any such transmission and/or ancillary
services charges shall be separately identified by
the Seller to the Purchaser for transactions under
this Schedule including the exchange of economy
energy. The transmission and ancillary service
rate ceilings shall be available through the WSPP's
Hub or homepage. Any such transmission services
(and ancillary service provided in conjunction with
such transmission service) by Seller shall be
provided pursuant to any applicable transmission
tariff or agreement, and the rates therefore shall
be consistent with such tariff or agreement.
A-3.7 Data exchange and scheduling guidelines shall be
established by the Operating Committee.
A-3.8Unless otherwise agreed, the Purchaser shall be
responsible for maintaining operating reserve
requirements as back-up for Economy Energy Service
purchased and the Seller shall not be required to
maintain such operating reserve.
A-3.9The rate caps specified in Section A-3.6 shall not apply
in the following two circumstances:
(1) where the Seller is a FERC regulated public
utility and that Seller has been authorized to
sell power like that provided for under this
A-3
Service Schedule at market -based rates; or
(2) where the Seller is not a FERC regulated
public utility.
A Party is a FERC regulated public utility if it is
a "public utility" as defined in Section 201(e) of
the Federal Power Act, 16 U.S.C. § 824(e).
A.3.10 Each Party that is a FERC regulated public utility
as defined above shall file the Confirmation
Agreement with FERC for each transaction under this
Service Schedule with a term in excess of one year
no later than 30 days after service begins if that
Party would have been required to file such
Confirmation Agreements or similar agreements with
FERC under an applicable FERC accepted market based
rate schedule.
A-4
SERVICE SCHEDULE B
UNIT COMMITMENT.' SERVICE
B-1 PARTIES:
This Service Schedule is agreed upon as part of this Agreement
by the Parties.
B-2 PURPOSE:
The purpose of this Service Schedule is to define additional
specific procedures, terms, and conditions for requesting and
providing Unit Commitment Service.
B-3 OBLIGATION AND SCHEDULING:
B-3.1A Party may schedule Unit Commitment Service from
another Party by mutual agreement; provided,
however, that each Party shall be the sole judge as
to the extent to and the conditions under which it
is willing to provide or receive such service
hereunder consistent with statutory requirements
and contractual commitments including the Agreement
and any applicable Confirmation Agreement. Once
an agreement is reached, then the obligation for
Unit Commitment Service becomes a firm commitment,
for both Parties, for the agreed capacity and
terms.
B-3.2Unless otherwise mutually agreed by the Parties involved
in a Unit Commitment Service transaction, the terms
set forth in this Service Schedule B shall govern
such transaction.
B-3.3Unless otherwise agreed between the Purchaser and the
Seller, all transactions shall be prescheduled,
subject to any conditions agreed to by schedulers,
for a specified unit for a specified period of
time.
B-3.4 Purchasers shall arrange purchases directly with
Sellers, and shall be responsible for transmission
arrangements.
B-3.5 Price shall be as mutually agreed in advance between the
Purchaser and the Seller. Except as provided for
in Section B-3.10, the price shall not exceed the
Seller's forecasted Incremental Cost plus up to:
$7.32/kW/month; $1.68/kW/week; 33.78C/kW/day; 14.07
mills/kWh; or 21.11 mills/kWh for service of
sixteen (16) hours or less per day. The hourly
rate is capped at the Seller's forecasted
Incremental Cost plus 33.780/kW/day. The total
demand charge revenues in any consecutive seven-day
period shall not exceed the product of the weekly
rate and the highest demand experienced on any day
in the seven-day period. The Seller's forecasted
Incremental Cost discussed above also may include
any transmission and/or ancillary service costs
associated with the sale, including the cost of any
transmission and/or ancillary services that the
Seller must take on its own system. Any such
transmission and/or ancillary service charges shall
be separately identified by the Seller to the
Purchaser. The transmission and ancillary service
rate ceilings shall be available through the WSPP's
Hub or homepage.
B-3.6Start-up costs and no-load costs if included by the
Seller shall be stated separately in the price.
B-3.7 Data exchange and scheduling guidelines shall be
established by the Operating Committee.
B-3.8Energy schedules for the Purchaser's share of a unit may
be modified by the Purchaser with not less than a
thirty (30) minute notice before the hour in which
the change is to take place, unless otherwise
mutually agreed or unforeseen system operating
conditions occur.
B-3.9Unit Commitment Service is intended to have assured
availability; however, scheduled energy deliveries
may be interrupted or curtailed as follows:
(a) By the Seller by giving proper recall notice to the
Purchaser if the Seller and the Purchaser have
mutually agreed to recall provisions,
(b) By the Seller when all or a portion of the output
of the unit is unavailable, by an amount in
proportion to the amount of the reduction in the
output of the unit, unless otherwise agreed by the
schedulers,
(c) By the Seller to prevent system separation during
an emergency, provided the Seller has exercised all
B-3
prudent operating alternatives prior to the
interruption or curtailment,
(d) Where applicable, by the Seller to meet its public
utility or statutory obligations to its customers,
or
(e) By either the Seller or the Purchaser due to the
unavailability of transmission capacity necessary
for the delivery of scheduled energy.
B-3.10 The rate caps specified in Section B-3.5 shall not apply
in the following two circumstance:
(1) where the Seller is a FERC regulated public utility
and that Seller has been authorized to sell power
like that provided for under this Service Schedule
at market -based rates; or
(2) where the Seller is not a FERC regulated public
utility.
A Party is a FERC regulated public utility if it is a
"Public utility" as defined in Section 201(e) of the
Federal Power Act, 16 U.S.C. § 824(e).
B.3.11 Each Party that is a FERC regulated public utility as
defined above shall file the Confirmation Agreement with
FERC for each transaction under this Service Schedule
with a term in excess of one year no later than 30 days
after service, begins if that Party would have been
required to file such Confirmation Agreements or similar
agreements with FERC under an applicable FERC accepted
market based rate schedule.
MI
t
B-4 BILLING AND PAYMENT PROVISIONS:
B-4.1Except as provided in Sections B-4.2 and B-5, billing
for Unit Commitment Service shall be computed based
upon the agreed upon prices.
B-4.2 In the event the Seller requests recall of Unit
Commitment Service in a shorter time frame than was
mutually agreed pursuant to Section B-3.9(a) and
the Purchaser agrees to allow such recall, the
Purchaser shall be relieved of any obligation to
pay start-up costs.
B-5 TERMINATION PROVISION:
In the event Unit Commitment Service is curtailed or
interrupted except as provided in Section B-3.9(a), the
Purchaser shall have the option to cancel the Unit Commitment
Service at any time by paying the Seller for (i) all energy
deliveries scheduled up to the notice of termination and (ii)
all separately stated start-up and no-load costs.
B-5
SERVICE SCHEDULE C
FIRM SYSTEM CAPACITYZENERGY SALE OR EXCHANGE SERVICE
C-1 PARTIES:
This Service Schedule is agreed upon as a part of this
Agreement by the Parties.
C-2 PURPOSE:
The purpose of this Service Schedule is to define additional
specific procedures, terms, and conditions for requesting and
providing Firm System Capacity/Energy Sale or Exchange
Service.
C-3 SCHEDULING AND DELIVERY:
C-3.1A Party may schedule Firm System Capacity/Energy Sale or
Exchange Service from another Party by mutual
agreement; provided, however, that each Party shall
be the sole judge as to the extent to and the
conditions under which it is willing to provide or
receive such service hereunder consistent with
statutory requirements and contractual commitments
including the Agreement and any applicable
Confirmation Agreement. Once an agreement is
reached, then the obligation for Firm System
Capacity/Energy Sale or Exchange Service becomes a
firm commitment, for both Parties, for the agreed
service and terms.
C-3.2 Unless otherwise agreed between the Purchaser and the
Seller, all transactions shall be prescheduled,
subject to any conditions agreed to by schedulers.
C-1
I : i
C-3.3 Firm system capacity transactions shall include buying,
selling, or exchanging capacity between Parties
with or without associated energy. Firm capacity
is deemed a capacity sale from the Seller's
resources and backed by the Seller's capacity
reserves.
C-3.4 Firm energy transactions shall include buying, selling,
or exchanging firm energy between Parties. Subject
to mutual agreement, firm energy is deemed a
quantity of energy the Seller has agreed to sell
and deliver and the Purchaser has agreed to buy
within a specified time period.
C-3.5 Purchasers shall arrange purchases I directly with
Sellers, and shall be responsible for transmission
arrangements.
C-3.6Price and recall time shall be as mutually agreed in
advance between the Purchaser and the Seller for
capacity and energy. Except as provided for in
Section C-3.11, the price shall not exceed the
Seller's forecasted Incremental Cost plus up to:
$7.32/kW/month; $1.68/kW/week; 33.784-,/kW/day; 14.07
mills/kWh; or 21.11 mills/kWh for service of
sixteen (16) hours or less per day. The hourly
rate is capped at the Seller's forecasted
Incremental Cost plus 33.78G/kW/day. The total
demand charge revenues in any consecutive seven-day
period shall not exceed the product of the weekly
C-2
rate and the highest demand experienced on any day
in the seven-day period. Exchange ratios among
such Parties shall be as mutually agreed between
the Purchaser and the Seller, but shall not exceed
the ratio of 1.5 to 1.0. The Seller's forecasted
Incremental Cost discussed above also may include
any transmission and/or ancillary service costs
associated with the sale, including the cost of any
transmission and/or ancillary services that the
Seller must take on its own system. Any such
transmission and/or ancillary service charges shall
be separately identified by the Seller to the
Purchaser for transactions under this Schedule
including exchanges. The transmission and
ancillary service rate ceiling shall be available
through the WSPP's Hub or homepage. Any such
transmission service (and ancillary services
provided in conjunction with such transmission
service) by Seller shall be provided pursuant to
any applicable transmission tariff or agreement,
and the rates therefore shall be consistent with
such tariff or agreement.
C-3.7 Data exchange and scheduling guidelines shall be
established by the Operating Committee.
C-3.8Operating procedures for Firm System Capacity/Energy
Sale or Exchange Service shall be determined by the
Operating Committee.
C-3
C-3.9 Firm capacity shall be capacity which is interruptible
by the Seller only under any of the following
conditions: (a) Within the recall time mutually
agreed to by the Seller and the Purchaser, (b) To
prevent system separation during an emergency;
provided, however, that the Seller has exercised
all prudent operating alternatives prior to the
interruption or curtailment, or (c) Where
applicable, to meet its public utility or statutory
obligations to its customers.
C-3.10 A Party supplying firm energy shall use reasonable
efforts to supply scheduled energy including
purchasing available energy from other utilities;
provided, however, a Party's failure to provide
such firm energy shall be subject to any applicable
damages provision provided for in this Agreement or
a Confirmation Agreement.
C-3.11 The rate caps specified in Section C-3.6 shall not
apply in the following two circumstances:
(1) where the Seller is a FERC regulated public
utility and that Seller has been authorized to
sell power like that provided for under this
Service Schedule at market -based rates; or
(2) where the Seller is not a FERC regulated
public utility.
A Party is a FERC regulated public utility if it is a
"public utility" as defined in Section 201(e) of the
C-4
Federal Power Act, 16 U.S.C. § 824(e).
C.3.12 Each Party that is a FERC regulated public utility as
defined above shall file the Confirmation Agreement with
FERC for each transaction under this Service Schedule
with a term in excess of one year no later than 30 days
after service begins if that Party would have been
required to file such Confirmation Agreements or similar
agreements with FERC under an applicable FERC accepted
market based rate schedule.
wspp\1003-153.RV3.
C-5