Resolution No. 78671
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RESOLUTION NO. 7867
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A
WRAP CONTRACT, SERVICES AND PERFORMANCE GUARANTEES
FOR THE MALBURG GENERATING STATION, BY AND BETWEEN
THE CITY OF VERNON AND ALSTOM POWER INC.
WHEREAS, the City of Vernon is in the process of developing a
Combined Cycle Power Plant officially named the Malburg Generating
Station (the "Project") for the purpose of installing additional
generating capacity that will yield an efficient, cost-effective, and
reliable source of electric generation to the City of Vernon; and
WHEREAS, on May 23, 2001, the City Council of the City of
Vernon approved Resolution No. 7775 approving an agreement with Alstom
Power Inc. ("Alstom") for the purchase of two (2) GTX100 gas turbine
1packages; and
WHEREAS, on November 7, 2001, the City Council of the City of
Vernon approved Resolution Nos. 7865 and 7866 approving contracts with
Alstom for the purchase of .two (2) heat recovery steam generators
("HRSGs") and one (1) steam turbine unit, respectively; and
WHEREAS, the Utilities Department of the City of Vernon has
determined that the City needs to obtain additional services for the
Project and certain performance guarantees for the gas turbines, the
HRSGs and the steam turbine unit and any related equipment that will
allow the City to satisfy air quality and other applicable regulations;
land
WHEREAS, Alstom submitted proposals to Vernon dated
September 4, 2001 and September 13, 2001, as part of its proposals to
supply the HRSGs and steam turbine unit, to provide the additional
1 . k
1 services during construction of the Project and give additional
2 performance guarantees for the Project; and
3 WHEREAS, Alstom and Vernon have completed their negotiations
4 regarding the additional performance guarantees and services that will
5 be provided by Alstom for the Project; and
6 WHEREAS, the City Council wishes to approve the WRAP
7 Contract with Alstom which provides for performance of certain
8 services during construction of the Project and certain performance
9 guarantees respecting the GTX100 gas turbines, the HRSGs and the steam
10 turbine unit and/or the Project; and
11 WHEREAS, the City Council of the City of Vernon has
12 determined that, pursuant to the provisions of Subsection (a) of
13 Section 2.27 of the Vernon City Code, it is in the public interest and
14 necessity to enter into a WRAP Contract with Alstom to obtain
15 additional services during construction of the Project and additional
16 performance guarantees for the Project.
17 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
18 CITY OF VERNON AS FOLLOWS:
19 SECTION 1: The City Council of the City of Vernon hereby
20 finds and determines that the recitals contained hereinabove are true
21 and correct.
22 SECTION 2: The City Council of the City of Vernon hereby
23 approves the WRAP Contract with Alstom, a copy of which is attached
24 hereto as Exhibit "A" and made a part hereof.
25 SECTION 3: The City Council of the City of Vernon hereby
26 authorizes the Mayor and the City Clerk to execute said Contract for,
27 and on behalf of, the City of Vernon.
28 SECTION 4: The City Council of the City of Vernon hereby
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directs the City Clerk, or his designee, to send one fully executed
Contract to:
ALSTOM Power Inc.
Attn: Patricia F. Mire, Contracts Manager
10730 Telge Road
Houston, TX 77095
SECTION 5: 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 7th day of November, 2001.
ATTEST:
BRUCE V. MALKENHORST, City Clerk
EONIS C. MAL URG, Mayor
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution No.
7867, was duly adopted by the City Council of the City of Vernon at a
regular meeting of the City Council duly held on Wednesday, November 7,
2001, and thereafter was duly signed by the Mayor of the City of
Vernon.
(SEAL)
fjKU(,L V . iv1t-jL1Srlvnvn0l, 1.1 Uy 1 _Lt-_L 1.
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EXHIBIT
S
WRAP CONTRACT
Services and Performance Guarantees for the
MALBURG Generating Station
Between
THE CITY OF VERNON
And
ALSTOM Power Inc.
GENERAL
1.
..............................................................................................................................................4
2.
EFFECTIVE DATE...............................................................................................................................6
OF SERVICES.....................................................................................................6
3.
SCOPE ..............
6
DELIVERY OF THE GTX 100 GAS TURBINES
.........................................................
4.
DELAYED
7
PERFORMANCE ............. .......................................................»..............
5.
.............................................................
6.
PRICES AND PAYMENTS..»............................................................................................................11
7. EQUIPMENT SUPPLY CONTRACTS.............................................................................................12
8. DEFAULT......................................................................................................................................13
9. ASSIGNMENT.....................................................................................................................................13
14
10.
PARTIAL INVALIDITY .. ................................. ................... ».
. .11.
NON-WAIVER.....................»............................................................».......14
.........................................
......».......14
12.
AMENDMENTS ...................................................................................................................
14
13.
ENTIRE AGREEMENT ....... ........ »................................ ............................»........»...................»
14.
BENEFIT OF AGREEMENT............................................................................................................15
15.
NOTICES......................................................................................................................
........................15
16.
INDEPENDENT CONTRACTOR.............................................................................15
...............................15
17.
ALSTOM NOT AGENT ...........................
18.
CHOICE OF LAW............................................................................................«................................16
19.
FORUM SELECTION......................................................................
...............„.................................16
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20.
LIMITATION OF LIABILITY ....... .......................... .......».
Appendix 1 Scope of Services, Document 1412239-3-1X5
Appendix 2 Performance Data, Document 1412239-401X8
Appendix 3 Letter of Credit Format
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CONTRACT
THIS CONTRACT is made, entered into and executed in duplicate originals,
either copy of which may be considered and used as the original hereof for all purposes, as
of this day of November, 2001, in the City of Vernon, County of Los Angeles,
BY AND BETWEEN
AND
RECITALS
THE CITY OF VERNON
4305 Santa Fe Avenue
Vernon, CA 90058
ALSTOM Power Inc.
10730 Telge Road
Houston, TX 70095
WHEREAS, the City of Vernon ("VERNON") is interested in the development
of a Combined Cycle Power Plant (the "Project") for purposes of installing additional
generating capacity that is capable of yielding cost effective, efficient and reliable electricity
to meet its goals, while meeting Federal, State and local environmental and siting
requirements; and
WHEREAS, VERNON and ALSTOM Power Inc. ("ALSTOM") have signed a
contract on May 23, 2001 for the supply by ALSTOM of two GTX100 gas turbine packages
for the Project; and
WHEREAS, VERNON has signed a contract with ALSTOM for the supply of
one steam turbine on November 7, 2001 and contract for the supply of two HRSG boilers on
November 7, 2001 for the Project; and
WHEREAS, ALSTOM has presented a proposal to VERNON on September 4
and September 13, 2001 as part of the proposals to supply Boilers and a Steam Turbine, in
which ALSTOM is willing to perform certain services during the construction of the Combined
Cycle Power Plant ("the Plant") and to give certain performance guarantees for the Plant;
and
WHEREAS, VERNON and ALSTOM desire to set forth the terms and
conditions for the purchase of these services and for the provision of performance
guarantees.
NOW, THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS
SET FORTH HEREIN:
1. GENERAL
The Contract shall consist of the following:
The term and conditions set forth in this document
Appendix 1 Scope of Services, Document 1412239-3-1X5
Appendix 2 Performance Data, Document 1412239-401X8
Appendix 3 Letter of Credit
All Appendices are attached hereto and incorporated by reference as though fully set
forth herein. To the extent that there are any conflicts between the terms of the
Appendices and the terms and conditions set forth below, the terms and conditions set
forth herein shall prevail.
The above order of precedence shall prevail in the event that there is a conflict or
inconsistency among the documents that comprise the Contract. .
Definitions
ALSTOM shall mean ALSTOM Power Inc., a Delaware Corporation, the supplier of
the services hereunder.
AQMD shall mean the South Coast Air Quality Management District.
Business Day shall refer to normal business days at the City of Vernon, Monday
through Thursday, excluding legal holidays.
Contract shall mean all of the documents identified in Section 1.
Equipment Supply Contracts shall mean the following contracts:
(a) the equipment supply contract signed by the Parties on May 23, 2001 for delivery of
two GTX100 gas turbine packages with related services (hereinafter the "Gas Turbine
Supply Contract"; and
(b) the equipment supply contract signed on November 7, 2001 by the Parties for the
delivery of a steam turbine with related services (hereinafter the "Steam Turbine Supply
Contract'); and
(c) the equipment supply contract signed on November 7, 2001 by the Parties for the
delivery of two HRSG boilers and related services (hereinafter the "HRSG Boiler Supply
Contract')
FOB Jobsite shall mean when the conveyance has stopped next to the off-loading area.
Jobsite shall mean the location of the City of Vernon Power Plant, Station A.
Parties shall mean ALSTOM and VERNON, collectively.
Performance Tests shall mean the testing of the Plant to verify that the guaranteed
performance values for heat rate and power output are met as per Appendix "2". The
performance tests shall be binding on ALSTOM to determine compliance with the
guaranteed performance values.
Plant shall mean the Combined Cycle Power Plant to be constructed by VERNON at
Malburg Generating Station including two GTX100 gas turbine packages, one steam
turbine and two HRSG boilers supplied by ALSTOM
Prime Rate means the annual interest rate published in "The Wall Street Journal"
MONEY RATES as the "PRIME RATE"
Scope of Services shall mean the services identified in Section 3 of this Contract,
including Appendix 1.
Stability Test shall mean the 24-hour tests conducted after commissioning is completed
in accordance with the individual Equipment Supply Contracts. In addition to this,.
ALSTOM shall co-ordinate during the design phase so that the components are
r,
2.
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4.
4.1
4.2
compatible with each other and so that no limitations in the components hinder them
from operating together through the entire load range as set forth in Appendix 2.
VERNON shall mean the City of Vernon, California.
EFFECTIVE DATE
The Contract shall become effective upon signing of the Contract by both Parties.
SCOPE OF SERVICES
ALSTOM shall designate a project manager to be the single point of contact to lead
and co-ordinate the performance of this Contract and the Equipment Supply
Contracts and generally direct, monitor and expedite the activities of ALSTOM in
accordance with the provisions of the Equipment Supply Contracts. The project
manager shall be designated to receive and act upon any notice pursuant to section
15 of this Contract and the individual notice sections of the Equipment Supply
Contracts. ALSTOM shall also be required to provide the services set forth in
Appendix 1 of this Contract, which is attached hereto and incorporated by this
reference.
DELAYED DELIVERY OF THE GTX 100 GAS TURBINES
VERNON has instructed ALSTOM to delay the delivery of the two GTX100 gas turbine
packages. The Parties have agreed that ALSTOM shall deliver the GTX100 gas
turbine packages F.O.B. Jobsite on or after July 25, 2002, but no later than August
15, 2002. VERNON shall not be responsible for additional costs, except as set forth
in section 4.4 of this Contract.
As a result of ALSTOM delaying the delivery of the GTX100 gas turbine packages the
following shall apply.
a) The invoices for the last two payments of 5% each
when the two GTX100 gas
VERNON, and shall be payable within 15 days,
shall be submitted to
turbine packages are ready for shipment pursuant to the Gas Turbine Supply
Contract, and upon presentation of warehouse receipts, but not earlier than
February 1, and February 22, 2002.
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b) The risk of loss or damage to the GTX 100 gas turbine packages shall remain
with ALSTOM until delivery FOB Jobsite.
4.3 ALSTOM shall deliver the GTX100 gas turbine packages FOB Jobsite as set forth
in section 4.1 of this Contract. However, if the GTX gas turbine packages cannot
be delivered by the date stated herein, VERNON shall give ALSTOM written
notice thereof at least 90 days prior to said delivery date. VERNON shall inform
ALSTOM of the new delivery date at least 90 days in advance, otherwise the new
delivery date will be postponed by the number of days passing thereafter on a day
by day basis. The liquidated damages for delay in Article 32.1 of the Gas Turbine
Supply Contract shall solely apply in relation to the delivery date determined in
accordance with this section 4.3.
4.4 If the GTX100 gas turbine packages can not be delivered by August 15, 2002, the
Parties agree that ALSTOM will incur additional fees for services and costs
associated with the storage of the units, insurance, cancellation of transportation, and
arrangement of new transportation. Such costs shall be reimbursed by VERNON on
a monthly basis. VERNON agrees to take delivery of the GTX100 gas turbine
packages no later than February 15, 2003. The Parties further agree that the
warranty period under section 12 of the Gas Turbine Supply Contract shall be
amended to read "twenty four (24) months from Commercial Operation or Thirty six
(36) months from August 15, 2002, whichever first occurs.
5. PERFORMANCE
5.1 ALSTOM guarantees the performance of the Plant in accordance with and subject to
the conditions set out in Appendix 2 of this Contract, which is attached hereto and
incorporated by reference.
The Parties agree that, unless the Plant is not built, the performance guarantees
given in this section and Appendix 2 of this Contract shall satisfy the performance
guarantees given by ALSTOM in section 32.2 in the Gas Turbine Supply Contract
and section 1.3 of Appendix 1 "Performance Data, document X171243E, Ed. 4" of the
Gas Turbine Supply Contract. All other guarantees, including delivery, noise and
emissions shall be governed by each separate Equipment Supply Contract.
ALSTOM and VERNON agree that in the event the Plant fails to meet the guarantees
for output or heat rate as specified in Appendix 2, the actual damages that would be
suffered by VERNON would be impossible to ascertain precisely. Therefore,
ALSTOM and VERNON agree that liquidated damages will be established (if the
equipment supplied by ALSTOM and mentioned in the recitals are accepted by
VERNON) as follows:
1) Output: ALSTOM shall pay for such failure to meet the guaranteed output for
. "new and clean" Plant in lieu of all other claims or obligations for such failure, as
liquidated damages and not as a penalty, the following amount:
$ 600 per kW of power output below the guaranteed output specified in Appendix
2.
2) Heat Rate: ALSTOM shall pay for such failure to obtain the guaranteed heat rate
for "new and clean" Plant, in lieu of all other claims or obligations for such failure,
as liquidated damages and not as a penalty, the following amount:
$ 10,000 per Btu/kWh-LHV (Lower Heating Value) for the amount of heat rate
above the guaranteed heat rate specified in Appendix 2.
VERNON shall allow ALSTOM, or its agents, to witness all Performance Tests and
shall provide ALSTOM with all logs containing data and other Plant information
during the Performance Tests and used to show Plant has met output and heat rate
guarantees.
The maximum liquidated damages for heat rate due under this Section is 7.5 % of
the aggregate value of the Equipment Supply Contracts. The maximum liquidated
damages for power output due under this Section is 7.5% of the aggregate value of
the Equipment Supply Contracts.
If the Plant is unable to meet the performance represented by the maximum
liquidated damages in this Section, and ALSTOM is unable to remedy such failure
as provided for hereunder, such failure may be considered a breach of material
condition of this Contract as discussed. in Section 8.
I
If VERNON is unable to start to perform the Performance Test within three (3) months
of the completion of the last Stability Test under the Equipment Supply Contracts for
reasons within VERNON's control, then VERNON shall be deemed to have accepted
the guaranteed output and heat rate for the Plant.
If VERNON is unable to complete the Performance Test within 250 EOH (EOH being
defined in the Gas Turbine Supply Contract) from the completion of the last Stability
Test under the Equipment Supply Contracts, provisions for the impact of these
additional EOH will be made in the Performance Test procedure.
If, during commissioning and the Stability Test, EOHs are consumed due to reasons
outside of ALSTOM's control for its equipment as defined in the Equipment Supply
Contract, these EOHs will be deducted from the 250 EOH stipulated in the paragraph
above. In this context ALSTOM'S control shall mean all the activities for a standard
commissioning and Stability Test of the equipment provided for in this Contract and
the Equipment Supply Contracts.
5.3 Maximum Aggregate Liquidated Damage
The maximum aggregate liquidated damages payable under this Contract shall not
exceed 15 % of the aggregate value of the Equipment Supply Contracts.
5.4 LIABILITY FOR PERFORMANCE
ALSTOM'S sole liability in respect to performance of the Plant shall be only as
expressly stated herein.
ALSTOM shall in no event be responsible for the failure to meet guaranteed
performance as set forth above, if such failure is caused by equipment not supplied
by ALSTOM.
5.5 EMISSIONS
The Plant emissions guarantees are provided for in the HRSG Boiler Supply
Contract. The inlet emissions levels to the HRSG are provided for in the Gas
Turbine Supply Contract. If the Plant emissions'guarantees are not met, ALSTOM
1 ()
shall be responsible for determining what component supplied under the Equipment
Supply Contracts failed to meet its performance guarantee; and shall at its sole
expense make repairs to meet the performance guarantees.
6. PRICES AND PAYMENTS
6.1 Prices
The price for the delayed delivery, the Scope of Services and the performance
guarantees shall be:
One Million Three Hundred and Sixty Three Thousand Dollars (USD)
($1,363,000)
customs & duties included. Prices do not include sales, or use taxes, special
financing fees, value added taxes, special permits or licenses, or similar charges.
VERNON shall either pay any and all such applicable charges or provide ALSTOM
with acceptable exemption certificates. However, Alstom shall be responsible for any
special permits or licenses required in the delivery of all the equipment in the
Equipment Supply Contracts, FOB Jobsite.
6.2 Payment
Invoices shall be submitted to VERNON according to the following payment schedule:
15 % Down -payment, due before 12:00 p.m. (PST), November 8, 2001
20% at ex -work of the steam turbine
20% at delivery to site of the steam turbine
20% at first fire of the HRSG unit no.1
25% of the Contract value at the successful completion of the Stability Test
Invoices shall be due and payable by wire transfer within fifteen (15) days of receipt
by VERNON to.
ALSTOM Power Inc.
Bank One N.A.
ABA # 071000013
Account # 5709636
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Past due invoices shall be subject to interest charges at the Prime Rate.
6.3 Letter of Credit in Lieu of Retention
Within thirty days of execution of this Contract, and the HRSG Boiler and Steam
Turbine Supply Contracts, ALSTOM shall increase the existing letter of credit provided
to VERNON under the Gas Turbine Supply Contract to equal 10% of the total price of
this Contract and the Equipment Supply Contracts. The Letter of Credit shall be valid
until the successful testing of the Plant in accordance with Appendix 2, not to exceed
ten (10) months from the date of delivery of all the equipment pursuant to the
Equipment Supply Contracts. VERNON shall return the Letter of Credit to ALSTOM
at its expiration.
ALSTOM recognizes that VERNON has agreed to accept the Letter of Credit in lieu of
a ten percent (10%) retention of the total price of this Contract and the Equipment
Supply Contracts that VERNON would otherwise require. Therefore in the event that
ALSTOM fails to provide an acceptable letter of credit to VERNON in a timely manner,
VERNON may, after reasonable notice to ALSTOM, withhold up to ten percent (10%)
of the total price of this Contract and the Equipment Supply Contracts from any
remaining payments. Any such retention may be held by VERNON for up to (30) days
after Commercial Operation.
The parties agree that the Letter of Credit given in this section shall satisfy the Letter of
Credit requirements in the Equipment Supply Contracts. Further, the parties agree
that any payment withheld pursuant to this section shall also satisfy the withholding
requirements of the Equipment Supply Contracts.
7. EQUIPMENT SUPPLY CONTRACTS
This Contract shall only govern the delayed delivery of the GTX100 gas turbine
packages, the Scope of Services and the performance guarantees explicitly
stated herein. The Gas Turbine Supply Contract, the Steam Turbine Supply
Contract and the HRSG Boiler Supply Contract shall govern all other issues
respectively.
1 'Y
8. DEFAULT
8.1 In the event ALSTOM commits a breach of a material condition of this Contract,
VERNON shall notify ALSTOM in writing of said breach and if ALSTOM has not
cured or begun reasonable efforts to cure after fifteen (15) working days of
receipt of said notice, and fails to diligently pursue corrective action, then
VERNON shall have the right to direct costs due to VERNON's re -procurement
of the equivalent of the Equipment or services cancelled from ALSTOM.
ALSTOM shall not warrant work completed by others.
8.2 If VERNON fails to make any contractual payment to ALSTOM when due under
the provisions of this Contract, and such failure is not remedied within fifteen
(15) days of VERNON'S receipt of written notice of such default, then ALSTOM
will notify VERNON. If such failure is not remedied within seven (7) days of
VERNON's receipt of the second notice then ALSTOM may terminate this
Contract for VERNON's Default and recover all costs expended by ALSTOM
plus a reasonable amount for profit and overhead thereon.
9. ASSIGNMENT
Except as provided in this Section, ALSTOM may not directly or indirectly sell, assign,
transfer, pledge, mortgage or encumber (each, a "Transfer") any of its interest in any of
its rights or obligations under this Contract, without the prior written consent of
VERNON. Except as provided in this Section, any Transfer that is made without the
prior written consent of the other party shall be void.
Notwithstanding anything to the contrary in this Contract:
(i) VERNON may assign its rights under this Contract, without ALSTOM'S consent, to
any party that is financially able to make any remaining payments due to ALSTOM
under the Contract. If VERNON desires to assign its rights under this Contract, it
shall advise ALSTOM of such anticipated assignment, in writing. ALSTOM shall also
be entitled to request reasonable proof of the proposed assignee's financial status.
ALSTOM shall then have ten (10) days to advise VERNON of its objection to the
assignment and the basis for such objection.
1 '2
(ii) ALSTOM may assign any amounts due to it under this Contract to a special purpose
account as part of its participation in a Asset Backed Securitization Program without
notice to or the consent or approval of the other party hereto;
No such assignment by ALSTOM shall constitute an event allowing for termination of
this Contract by VERNON.
(iv) No such assignment by ALSTOM shall reduce, change or modify any right of
VERNON under this Contract.
10. PARTIAL INVALIDITY
Wherever possible, each provision hereof will be interpreted in such manner as to be
effective and valid under applicable law, but in case any one or more of the provisions
contained herein is, for any reason, held to be invalid, illegal or unenforceable in any
respect, such provision will be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the remainder of such invalid,
illegal or unenforceable provision or provisions or any other provision hereof, unless
such a construction would be unreasonable or contrary to the intent of the Parties as
expressed in this Contract.
11. NON WAIVER
The failure of either party to insist upon or enforce, in any instance, strict performance
by the other party of any provision or to exercise any right herein conferred shall not be
construed as a waiver or relinquishment to any extent of its right to assert or rely upon
any such provision or rights on any future occasion.
12. AMENDMENTS
This Contract may be modified or amended only by a written document executed by
both ALSTOM and VERNON and approved as to form by VERNON`s Counsel.
13. ENTIRE AGREEMENT
This Contract is the entire agreement of the Parties. ALSTOM represents that in
entering into this Contract, it has not relied on any previous representations or
understandings of any kind or nature.
14
14. BENEFIT OF AGREEMENT
This Contract shall bind and benefit the Parties hereto and their heirs, successors,
and permitted assigns.
15. NOTICES
Notices to the Parties, unless otherwise requested in writing, shall be sent to:
City: THE CITY OF VERNON
ATTN: Bruce V. Malkenhorst
City Administrator
4305 Santa Fe Avenue
VERNON, CA 90058-0805
ALSTOM: ALSTOM Power Inc.
ATTN: Patricia F. Mire
10730 Telge Road
Houston, TX 77095
Notices shall be deemed to have been received by the dose of Business Day two days
after the date on which it was mailed.
16. INDEPENDENT CONTRACTOR.
At all times during the term of this Contract, ALSTOM shall be an independent
contractor and shall not be an employee of VERNON. VERNON shall have the right
to control ALSTOM only insofar as the results of ALSTOM's services rendered
pursuant to this Contract; however, VERNON shall not have the right to control the
means by which ALSTOM accomplishes services rendered pursuant to the Contract
except to the extent that such services involve the use of VERNON property or
Confidential Information.
17. ALSTOM NOT AGENT
Except as VERNON may specify in writing, ALSTOM shall have no authority, express
or implied, to act on behalf of VERNON in any capacity whatsoever as an agent.
ALSTOM shall have no authority, expressed or implied, pursuant to this Contract to
bind VERNON to any obligation whatsoever.
18. CHOICE OF LAW
The rights and remedies of the parties hereunder shall be governed by the laws of the
State of California.
19. FORUM SELECTION
Any action brought relating to this Contract shall be brought .and held exclusively in a
State Court in the County of Los Angeles, California.
20. LIMITATION OF LIABILITY
20.1 ALSTOM and ALSTOM'S Affiliated Companies' aggregate liability for all claims of any
kind, whether based on contract, warranty, tort (including negligence) strict liability or
otherwise, for all losses or damages arising out of, connected with or resulting from this
Contract, its performance or breach (including indemnity, warranty) shall not exceed the
price of this Contract upon which such liability is based, with the exception of liquidated
damages for failure to reach heat rate and output as set out in Section 5 of this
Contract.
For the purpose of this section, the liquidated damages shall be deemed to be
distributed among the Equipment Supply Contracts pro rata to their respective contract
value. The liquidated damages for heat rate and output allocated to each of the
Equipment Supply Contracts shall be a claim under the "Limitation of Liability" section of
the applicable Equipment Supply Contract.
20.2 EXCEPT FOR ANY LIQUIDATED DAMAGES SPECIFICALLY PROVIDED IN THIS
CONTRACT, IN NO EVENT, WHETHER AS A RESULT OF BREACH OF
CONTRACT, WARRANTY, INDEMNITY, TORT (INCLUDING NEGLIGENCE), STRICT
LIABILITY OR OTHERWISE, SHALL VERNON, OR THEIR AFFILIATES, OR ALSTOM
OR ALSTOM'S AFFILIATED COMPANIES BE LIABLE FOR INDIRECT, SPECIAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO
LOSS OF PROFITS OR REVENUE; LOSS OF DATA; LOSS OF USE OF
EQUIPMENT; COST OF CAPITAL; COST OF SUBSTITUTE EQUIPMENT (EXCEPT
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COST OF SUBSTITUTE EQUIPMENT REQUIRED TO BE OBTAINED DUE TO
ALSTOM'S DEFAULT UNDER SECTION 8), SERVICES OR FACILITIES; DOWNTIME
COSTS; COST OF REPLACEMENT STEAM OR ELECTRIC POWER OR CLAIMS OF
THIRD PARTIES OR CUSTOMERS FOR SERVICE INTERRUPTIONS.
IN WITNESS WHEREOF, the parties have caused this Contract to be executed by and
through their authorized officers on the date, month and year first written above.
ATTEST:
Bruce V. Malkenhorst, City Clerk
APPROVED AS TO FORM:
Lam- ---
'�.j � (1�1!�
Eduardo Olivo, City Attorney
WITNESS:
Patricia F. Mire, Contracts Manager
CITY OF VERNON
By:
Leonis C. Malburg, Mayor
ALSTOM Power Inc.
Industrial Turbines
Allan W. Bartholomew, President
17
EXHIBIT
0
LSTOMProject: City of Vernon Sep, 2001 1412239-3-1X6
Performance and Coordination
Scope of Services J.R.. / GPA Page 1 (6)
Scope of Services
LIST OF CONTENTS PAGE
IGENERAL REMARKS...........................................................................................2
2 SCOPE OF SERVICES ......................................... ................................................................................2
2.1 Overall Combined Cycle Plant Performance............................................................................2
2.2 Coordinated ALSTOM Power Single Point Project Manager...................................................4
2.3 Postphoned delivery of the GTX100 gas turbines...................................................................... S
Transport, storage and related insurances for temporary storage of the two GTX100 gas turbine
packages, according to Section 4 of this contract............................................................................... S
3 PURCHASER'S OBLIGATIONS .....................................................................................5
3.1 Scope.......................................................................................................................................... S
A:\1412239-3-1X6 Scope of Services.doc
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LST�}� Project: City of Vernon Sep, 2001 1412239-3-1X6
Performance and Coordination
Scope of Services J.R.. / GPA Page 2 (6)
1 General remarks
This document covers the certain services to be provided by ALSTOM Power to City of
Vernon under the Wrap Contract.
Generally the services to be provided by ALSTOM, in addition to what is included in the
Equipment Supply Contracts can be divided into three different categories;
- Overall Combined Cycle Plant Performance
- Engineering Support for Permitting
- Co-ordinated ALSTOM Single Point Project Manager
These are further outlined in detail as follows.
2 Scope of services
2.1 Overall Combined Cycle Plant Performance
• Provide combined cycle heat & mass balances for the ALSTOM
internal needs as well as according to what is required by and
agreed upon with Vernon. Basically, the information is already
given in conjunction with the permitting documentation, only
minor additions and adjustment shall be needed.
• Provide gas turbine, steam turbine and HRSG performance data
according to ALSTOM internal needs as well as to what is
required and agreed upon with Vernon.
• Provide the engineering to ensure the proper interface of the gas
turbine and the HRSG terminal point, and other ALSTOM
can
internal terminal points that may exist.
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• As required, provide correction curves for the combined cycle
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• Participate in preparation, execution and evaluation of the
combined cycle performance testing. The initial Performance
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Tests to be conducted are the responsibility of VERNON.
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JA:\1412239-3-1X6
scope of Services.doc
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ALSTOM
Project: City of Vernon Sep, 2001 1412239-3-1X6
Performance and Coordination
Scope of Services J.R.. / GPA Page 3 (6)
Alstom shall provide a draft procedure for the Performance
Tests for ALSTOM's Scope of Work pursuant to ASME PTC
46. VERNON will prepare the Performance Tests for the
balance of the Plant. VERNON and ALSTOM shall mutually
agree on the final combined test procedure. (Regarding
Performance Test, please refer to Section 5 of the Wrap
Contract)
2.2 Engineering support for permitting
ALSTOM will provide Vernon with engineering support for the
permitting, including:
• GTX100 emission and performance characteristics for start-up,
normal operation, minimum load case as defined in heat balance
1412239-402X5, sheet 9 and shut -down
• HRSG emission and performance characteristic for start-up,
normal operation, minimum load case as defined in heat balance
1412239-402X5, sheet 9 and shut -down.
• Steam turbine characteristics (as required)
• Integrated combined cycle performance characteristics, (though
limited to what is directly related to the ALSTOM Power
supplied equipment)
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ALSTOM
Project: City of Vernon Sep, 2001 1412239-3-1X6
A Performance and Coordination
Scope of Services J.R.. / GPA Page 4 (6)
2.3 Co-ordinated ALSTOM Single Point Project Manager
(a) lead and co-ordinate the performance of the four
ALSTOM Power Contracts and generally direct,
monitor and expedite the activities of the parties in
accordance with the' provisions of the individual
Contracts;
(b) prepare, issue, update on a monthly basis and monitor
the execution of the general time schedule compiled
from the individual time schedules of ALSTOM
Power in compliance with the individual Contract
Time Schedules;
(c) co-ordinate the preparation, submission and
negotiation of any variation or any amendment or
supplement to the individual Contracts;
(d) receive, issue, distribute and co-ordinate all
communications with Vernon and obtain ALSTOM
Power signatures for all related documentation
requiring signature, in reliance on the individual
contracts;
(f) co-ordinate the preparation, . submission and
negotiation of any notices, notifications or claims to
Vernon in connection with the individual Contracts;
(g) convene and keep records of meetings of Vernon and
ALSTOM Power;
(h) establish the format and co-ordinate the preparation
and administration of all project procedures;
(i) transmit to Vernon all invoices submitted by ALSTOM
Power in accordance with the Contracts and distribute
to the ALSTOM Power parties without delay all
monies received from Vernon on account of such
invoices, in accordance with the relevant project
procedures.
AA1412239-3-1X6 Scope of Senrices.doc 4. �.
LSTO Project: City of Vernon Sep, 2001 1412239-3-1X6
Performance and Coordination
Scope of Services J.R.. / GPA Page 5 (6)
2.4 Postponed delivery of the GTX100 gas turbines
ALSTOM will take responsibility for the transportation, storage and related insurances for
the temporary storage of the two GTX 100 gas turbine packages, according to Section 4 of
this contract. The warranty period will be modified to correspond to the revised delivery
schedule.
2.5 Engineering information
ALSTOM will provide load restriction information on all external piping terminal points
for the HRSGs and the STG
3 Purchaser's obligations
3.1 Scope
The ALSTOM Power scope is limited to what is listed above. All. other equipment and
services required for the complete plant will be the responsibility of the purchaser. The list
below highlights some of the purchaser's obligations. The list includes, but is not limited to,
the following:
• Engineering, purchase and construction of all equipment not included in ALSTOM
Power scope of supply, as defined in the Equipment Supply Contracts.
• Layout, engineering and integration of the total power plant, including the ALSTOM
Power equipment as defined in the Equipment Supply Contracts.
• Site management, including planning of all site activities, during erection and
commissioning period. ALSTOM Power will only provide Technical Advisory for each
piece of equipment according to what is agreed upon in the Equipment Supply
Contracts.
3
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• Overall coordinated (integrated) control system for the entire combined cycle plant. The
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ALSTOM Power equipment is provided with local control exclusively according to
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what is included in the Equipment Supply Contracts.
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• Dynamic analysis of the plant, including start-up, stop, emergency shut -down, load
changes and continous operation. ALSTOM takes responsibility only for the dynamic
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scope of Services.doc
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A/� ������ Project: City of Vernon. Sep, 2001 1412239-3-1X6
Performance and Coordination
Scope of Services J.R.. / GPA Page 6 (6)
characteristics of each major equipment, as included in the Equipment Supply
Contracts.
• Co-ordination with the Grid Utility during commissioning and test periods
AA1412239-3-1X6 Scope of Services.doc A A
EXHIBIT
Wj
ALSTOM Performance Guarantee Data Sep. 01 1412239-401X8
City of Vernon Edition 8 (std no)
KAX100-2C / Pagel (5)
Contents
Page
1 Performance Guarantees...................................................................................2
1.1 Introduction...........................................................................................2
1.2 Set description......................................................................................2
1.3 Performance guarantee values...............................................................2
1.4 Conditions for performance guarantee values.......................................3
1.4.1 Ambient.....................................................................................3
1.4.2 Operational................................................................................3
1.4.3 Fuel specification......................................................................4
1.4.4 Standards...................................................................................4
1.5 Comparison of test result with performance guarantee value...............4
2 Appendices........................................................................................................5
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ALSTOM Performance Guarantee Data Sep. 01 1412239-401X8
City of Vernon Edition 8 (std no)
KAX100-2C / Page 2 (5)
1 Performance Guarantees
1.1 Introduction
This document describes the thermal performance data given for the City of Vernon
Combined Cycle Plant, based on two (2) ALSTOM Power GTX100 gas turbines.
1.2 Set description
Gas Turbine 2 x ALSTOM Power GTX100
Combustion Chamber AEV Combustion chamber for natural gas
Steam Turbine 1 x ALSTOM Power MP24
HRSG 2 HRSG units, including duct firing and SCR
1.3 Performance guarantee values
Table 1.
Guaranteed property
Case 75 F
with duct Grin
Net electric output Pa kW
136 000
Net electric heatrate HR. Btu/kWh
7 065
kJ/kWh
7 455
Definitions
Pia = P. ` P.x
HR _ QF • 3600
(Pc — P..)
P, Electric output measured at generator terminals (M)
Paux = Auxiliary power for equipment in Alstom Power's scope of supply, which is
continuously in operation to run the plant at steady state condition (M).
QF =Fired heat in GT's and HRSG's duct burners based on heat content (LHV) (kJ/s)
CAMy DocumentsTrojects\City of Vemon\Rev proposal extension equip\Finaf contract draft\1412239-40M.doc n
ALSTOM Performance Guarantee Data Sep. 01 1412239-401X8
City of Vernon Edition 8 (Std no)
KAX100-2C / Page 3 (5)
1.4 Conditions for performance guarantee values
The guarantee values will be reached under the following reference conditions. The measured
result from the acceptance test must be corrected to these conditions.
1.4.1 Ambient
Ambient temperature (design)
OF
75
Elevation
ft
182.32
Ambient pressure (design)
psia
14.60
Relative air humidity
%
50
1.4.2 Operational
Power load
%
100
Frequency
Hz
60
Power factor'
0.90
Generator voltage
kV
13.8
Fuel
See 1.4.3
Minimum fuel pressure
psia
392
Evaporative cooling water flow
lb/s
1.5 + blow down
Max pressure drop HP steam to STpsi
40
Max pressure drop LP steam to ST psi
4.6
Condenser pressure
"Hg
3.485
Condensate pressure
psia
100
Condensate temperature
OF
120
Gas turbine, air filters and BRSG shall be in new and clean condition
- Evaporative cooler in operation
- Water for the evaporative cooler shall have a quality according to specification
X220441E
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- The plant shall be operated in continuous steady state load
- Performance test to be conducted not later than three months after first
synchronisation
- Properties of water and steam in SI-units, Springer Verlag is used as water/steam
2
table
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At generator terminals. Calculated by adding reactive and active power to for all generators.
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Additional water needed to maintain water chemistry. Depends on the water chemistry of the city water.
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DocumentsTrojects\City of vemon\Rev proposal extension equiffinal contract draft\1412239-401XB.doc
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/'/
Performance Guarantee Data Sep. 01 1412239-401X8
ALST)M
City of Vernon Edition 8 (std no)
KAX100-2C / Page 4 (5)
Max pressure drop for steam ST refers to the pressure drop in piping between HRSG
and ST, i.e. from delivery limit to delivery limit.
1.4.3 Fuel specification
Fuel
Component Formula
Composition
Component
(Weight-%.)
Methane
CH4
95.52
95.836
Ethane
C2H6
2.10
2.107
Propane
C3H8
0.00
0.000
I -Butane
I-C4Hlo
0.04
0.040
N-Butane
N-C4Hlo
0.06
0.060
I -Pentane
I-05H12
0.01
0.010
N-Pentane
N-05H12
0.01
0.010
Hexane
C6H14
0.02
0.020
Carbon Dioxide
CO2
1.25
1.254
Nitrogen
N2
0.66
0.662
Total
99.67
100.00
Heat content
49 011
kJ/kg (LHV)
21071
Btu/lb (LHV)
LHV = Lower Heating
Value3
The fuels must fulfil the requirements in ALSTOM Power fuel specifications
"GTX100 Gaseous Fuels, Survey and Requirements" GTI X241010E Edition 2.
The determination of the lower heating value for liquid fuel is based on ASTM D 4868-90.
1.4.4 Standards'
The performance test of the plant will in general be based on the following standards:
Combined cycle PTC 46
m
1.5 Comparison of test result with performance guarantee value
Measured values must be corrected for site conditions deviating from the reference conditions.
Measured values will be corrected with. correction curves and equations to the guarantee
m conditions according to the correction procedure.
a
s The determination of the lower heating value is based on ISO 6976:1995 "Natural gas - Calculation of
3
calorific values, density, relative density and Wobbe index from composition". Reference values for LHV is
for combustion 25 °C, for metering 1.01325 bara/ 0 °C and valid for dry gas.
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VS J C:\My Documents\Projects\City of Vemon\Rev proposal extension equip\Final contract draft\1412239 401X8.doc
cQ
ALSTOM Performance Guarantee Data Sep. 01 1412239-401X8
City of Vernon Edition 8 (std no)
KAX100-2C / Page 5 (5)
The guarantee for power output is considered fulfilled when the guaranteed value is
exceeded by the corrected value considering the determined test uncertainty of the
corrected test result.
The guarantee for heat rate is considered fulfilled when the guaranteed value is higher than
the corrected value considering the determined test uncertainty of the corrected test result.
The procedure to determine the test uncertainties must be agreed upon.
Pnetcorr x ( 1+ YP ) > Pguar
HRnetcorr x ( 1— Yd "' HRguar
Pnetcorr = Corrected measured net power output
Hrnetcorr = Corrected measured net heat rate
Pguar = Guaranteed power output
HRguaz. = Guaranteed heat rate
YP = Determined test uncertainty power output
Yn = Determined test uncertainty heat rate
2 Appendices
Plant heat balances with nominal performance can be found in 1412239-402X5. The
following cases are included:
• 75 OF, maximum duct firing (guarantee case with nominal performance)
• 75 OF, moderate duct firing (used as design case for condenser)
• 75 OF, maximum duct firing without adjusting power factor between Grs and ST
• 75 OF, no duct firing
9 92 OF, no duct firing
• 92 OF, maximum duct firing
a
• 38 OF, no duct firing
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• 38 OF, maximum duct firing
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• 75 OF, 1 gas turbine in operation at 60 % load
lm
A summary of Predicted Vendor Data can be found in 1412239-403X1.
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DocumentsTrojectACity of vemon\Rev proposal extension equipTinai contract draft\1412239-401X8.doc
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A LSTOM Predicted Vendor Data Oct. 2001
1412239-403X 1
City of Vernon Edition 1
KAX100-2C / Paged (3)
CITY OF VERNON MALBURG GENERATING STATION PROJECT
SUMMARY OF PREDICTED VENDOR DATA
The following information is the required predicted Vendor Data
1-11nr /Orvd"irTnrn ♦i C'TllAif 1Dn1XTV1D
Performance
Predicted
performance
at guarantee
point
Max Fire
Low Fire
Max
Amb.
Min Amb.
Min
System
Load,
1*CTG at
60 % load
Dry Bulb Temperature, °F
75
75
92
38
75
Wet Bulb Temperature, °F
62
62
73
33
62
Air Inlet After Evaporative Cooler, °F
64
64
76
38
64
CTG evaporator water flow lb/hr
2400
2400
3600
0
1700
Alstom Predicted Flows, lb/hr
1,004,050
1,004,050
977,000
1054,000
700,000
CGT Exhaust Temperature, F
1024
1024
1032
1009
1112
Gross CTG Generation MW, both
84.33
84.33
80.68
90.63
25.30
Gross STG Generation MW
55.04
41.71
49.95
39.86
15.00
Total Gross Generation
139.40
126.04
130.63
130.49
40.3
Alstom Aux Power MW
1.280
1.07
1.14
1.06
0.56
CTG Fuel Flow MBtu/hr total; LHV
810
810
785
857
287
CTG Power Factor
0.85
0.9
0.9
0.9
0.9
CTG Mva
99.2
93.7
89.6
100.7
28.11
CGT Exhaust Analysis, % vol.
Nitrogen & Argon
75.0
75.0
74.4
76.07
75.0
Oxygen
13.25
13.25
13.15
13.44
13.13
Carbon Dioxide
3.371
3.371
3.347
3.418
3.42
Water
8.40
8.40
9.09
7.07
8.50
CGT Exhaust Constituents, lb/hr, CTG
NOx as NO2
35.8
35.8
34.7
37.9
28.9
CO
5.9
5.9
5.8
6.3
4.2
VOC
0.7
0.7
0.7
0.7
0.5
PM 10
2.5
2.5
2.5
2.5
2.5
V ra.asaaa a ua vaaav
Throttle flow, uncontrolled
390,000
279,300
346,000
264,000
105,900
Steam poessure
1291
943
1161
893
595
Steam Temperature
944
967
968
968
970
Admission Steam flow, Uncontrolled
Admission Stearn press
33,100
149
46,400
117
36,800
137
50,900
113
16,100
44
Admission Steam Temp
396
381
390
379
324
Condenser Exhaust Pressure, " H
3.48
2.5
3.6
2.36
1.12
Steam Exhaust Temperature,
120
109
122
107
82
1 The min. steam turbine load is approx. 15 % of full load, i.e. approx. 8 MW.
A LSTC M Predicted Vendor Data Oct. 2001
1412239-403X 1
City of Vernon Edition 1
KAX100-2C / Page 2 (3)
Condensate outlet flow, lb/hr
424,000
325,700
382,800
314,900
122,000
Heat Rejection 2, Btu/lb
985.0
994.0
994.1
995.0
1003
Condenser Heat Duty, MBtu/hr
380
299
346
290
116
STG Power Factor
0.95
0.9
0.9
0.9
0.9
STG Mva
157.9
46.3
1 55.5
144.3
1 16.7
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A JLA%X7 V
Performance
Predicted
Max
Min
Min
performance
Low Fire
Amb.
Amb.
System
at guarantee
Load,
point
1 *CTG at
Max Fire
60 % load
Steam Conditions leaving Each
HRSG
HP Steam Conditions
Flow, lb/hr
195,200
139,600
173,000
132,000
105,900
Design Flow, lb/hr
N/A
NIA
N/A
N/A
NIA
Pressure, psia
1331
977
1197
921
595
Maximum Design Pressure, MAWP
Sl 3
Temperature, F
946
969
970
970
970
Maximum Design Temperature'
IP Steam Conditions
Flow, lb/hr, total
17,150
23,220
18,530
25,450
16,900
Design Flow, lb/hr
N/A
N/A
N/A
N/A
N/A
Pressure, psia
154
121
141
117
45
Maximum Design Pressure, psi
Temperature, F
390
382
392
380
324
Maximum Design Temperature
Deaerator Heating Water Flow,
79,400
65,200
79,370
61,320
39,680
lb/hr, (common DA)
Pressure, psia
17.5
17.5
17.5
17.5
17.5
Temperature, OF
221
221
221
221
221
HRSG Blowdown Rate, %
0
0
0
0
0
Feedwater to DA lb/hr
423,500
325,700
382,800
314,900
122,000
Feedwater temp to DA, T
120
109
122
107
82
Feedwater to each HRSG IP/HP
252,000
195.500
231,200
188,100-
162,600
Gas Side Pressure Loss, in. w .
13
12.4
12.2
13.6
5.8
Stack Gas Temperature, F, (estimated)
213
224
217
228
186
Estimated Duct Fuel Flow, Mbtu/hr
73.3
11.3
51.1
0
0
each
2 We understand that this is the enthalpy at the steam turbine outlet.
3 Not available today. Deliverable week 8 after contract.
A LSTOM Predicted Vendor Data Oct. 2001
1412239403X1
City of Vernon Edition 1
KAX100-2C / Page 3 (3)
Total Fuel Flow, MBtu/hr
956
833
887
857
287
Total HRSG STACK Emissions lb/hr
NOx as NO2
7.7
6.7
7.1
6.9
2.3
CO
4.7
4.0
4.3
4.2
1.4
VOC
1 1.6
1.3
1.5
1 1.5
0.5
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12
12
12
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EXHIBIT
DRAFT FORM OF IRREVOCABLE LETTER OF CREDIT
(To be typed on Bank Letterhead)
City of Vernon
4305 Santa Fe Avenue
Vernon, California 90058
We hereby issue in your favor this Irrevocable Standby Letter of Credit United States Dollars, which
($
is available by payment against your written demand, addressed to Citibank, in care of our
servicer, Citicorp North America, Inc., 3800 Citibank Center, Bldg. F, 18` floor, attn: Standby
Letter of Credit Dept., Tampa, Florida 33610, bearing the clause "Drawn under Standby Letter
of Credit Number# issued by Citibank.
Any written demand for payment must be accompanied by your dated certificate, signed by an
authorized officer of the City of Vernon ("City"), stating that the City has the right to make
demand for payment in accordance with the contract dated
between Alstom
Power, Inc. ("ALLSTOM" and the City regarding the City of Vernon Power Plant Station A, and
that ALSTOM is in default of its obligations under the Contract, that demand has been made by
the City to Alstom to fulfill its obligations and Alstom has failed to correct such default within 10
days from the date such notice was delivered to Alstom.
We shall then honor your demand without inquiring whether you have the right as between you
and our Customer, ALSTOM, to make such demand and without acknowledging any claim of
our Customer, ALSTOM.
This Letter of Credit will continue to (Date,_ and will expire on that date and you may call
for payment of the full outstanding amount under this Letter of Credit at any time up to the close
of business on that date. It is a condition of this Letter of Credit that it shall be deemed to be
automatically extended for one year from the present or any future expiration date hereof,
unless at least ninety (90) days prior to any such date, we shall notify you in writing by
Registered Mail that we elect not to consider this Letter of Credit renewed for any such
additional period. In the event of a notification of non -renewal, the City may demand the full or
any portion of this credit provided the Customer, ALSTOM, has not provided the City with full
alternate financial assurance satisfactory to the City at least 10 days prior to the expiration of
this Letter of Credit.
It is understood that the amount of this credit may reduced from time to time as ALSTOM'S
obligations pursuant to the aforementioned Agreement are discharged, such reduction shall be
effected upon receipt of your written notice delivered to this office.
Written demands for the full amount or any portion or portions thereof must be presented to us
along with this original Credit Instrument.
This Letter of.Credit is subject to and governed by the laws of the State of California, except
rCalifomia's choice of law rules.
A
5.2 The initial Performance Tests to be conducted are the responsibility of VERNON. The
Performance Test shall be conducted as soon as possible after the last completed
Stability Test as required by the individual Equipment Supply Contracts.
If the Plant fails to satisfy any of the guarantees as specified in Section 1.3 of
Appendix "2", ALSTOM at its sole cost and expense shall promptly commence
corrective measures to remedy such defects or deficiencies in the equipment
supplied by ALSTOM pursuant to the individual Equipment Supply Contracts and
rerun the Performance Tests. If ALSTOM fails to meet the guarantees, then ALSTOM
shall be given at least five opportunities at mutually agreeable times within ninety (90)
days after completion of the Performance Tests, at ALSTOM's sole cost and
expense, to commence and complete corrective measures to remedy its failure to
meet the guaranteed output and guaranteed heat rate in Appendix 2 with the Plant
and rerun the Performance Tests; or pay liquidated damages provided for in this
Section.
If ALSTOM fails to meet the guarantees and demonstrates a level of electrical output
representing less then 95% of the guarantee value level or a level of heat rate
representing more then 105% of the guarantee value then ALSTOM shall, if
requested by VERNON, make a good faith effort, on at least five agreeable times, for
a period of 180 days after completion of the Performance Tests, at ALSTOM's sole
cost and expense, to commence and complete corrective measures to remedy its
failure to meet the guaranteed output and guaranteed heat rate with the Plant and
rerun the Performance Tests.
ALSTOM agrees to schedule its corrective measures to meet guaranteed
performance as VERNON's dispatch schedule dictates. VERNON agrees to work
with ALSTOM to schedule the length of outages required by ALSTOM for corrective
measures and in order to rerun the Performance Tests. Nothing in this paragraph
shall modify ALSTOM's obligation of meeting the guarantees specified in this
Section.
If, after taking the measures set forth above, ALSTOM is unable to remedy its failure,
to meet the guaranteed output and guaranteed heat rate as set out in Appendix 2,
ALSTOM shall be required to pay the liquidated damages provided for in this Section.
Q
SUPPORTING
DOCUMENTS
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) 826-1438
CITY HALL
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (323) 583-8811
December 3, 2001
Alstom Power Inc.
Attn: Patricia F. Mire, Contracts Manager
10730 Telge Road
Houston, TX 77095
Re: HRSG, Steam Turbine, and WRAP Contracts
Dear Ms. Mire:
EDUARDO OLIVO
City Attorney
FAX: (562) 927-8722
KEVIN WILSON
Director of Community Services & Water
FAX: (323) 826-1435
KENNETH J. DeDARIO
Director of Municipal Utilities
FAX: (323) 826-1425
STEVEN E. PARKER
Fire Chief
FAX: (323) 826-1407
BRUCE W. OLSON
Police Chief
FAX: (323)826-1481
The insurance requirement has been met. Transmitted herewith is a
duplicate original copy of each one of the above referenced contracts
approved by the Vernon City Council on November 7, 2001.
If you have any questions regarding this matter, please call Mr.
Kenneth DeDario at 323/583-8811 ext. 211.
Very truly yours,
CITY OF VERNON
*rioria J. Or co
Chief Deputy City Clerk
GJO:ng
CC: Kenneth DeDario
Resolution Nos. 7865, 7866,
Agreement File Nos. 01-074, 01-075, 01-073