PPA North Goodhue Wind

PPA North Goodhue Wind
414 Nicollet Mall
Minneapolis, Minnesota 55401
November 20, 2009
PUBLIC DOCUMENT
TRADE SECRET DATA HAS BEEN REMOVED
Dr. Burl W. Haar
Minnesota Public Utilities Commission
121 7th Place East, Suite 350
St. Paul, MN 55101-2147
RE:
⎯ VIA ELECTRONIC FILING ⎯
PETITION FOR APPROVAL OF C-BED
POWER PURCHASE AGREEMENT WITH
GOODHUE WIND, LLC (“NORTH”)
DOCKET NO. E-002/M-09-_____
Dear Dr. Haar:
Enclosed is the Public version of our Petition requesting approval of a
Power Purchase Agreement (“PPA”) between Xcel Energy and Goodhue Wind
LLC (“Goodhue North”). A Non-Public version is sent under separate cover.
This PPA is the next of several we expect to submit that qualify as communitybased energy development (“C-BED”) projects under Minnesota law. In order to
emphasize the importance of community-based renewable energy projects in
Minnesota, Minn. Stat. § 216B.1612, Subd. 7(e) contains a streamlined process
whereby the PPA is deemed approved by the Minnesota Public Utilities
Commission (“Commission”) if no party objects within 30 days of contract
submittal. Accordingly, this petition is being filed pursuant to Minn. Stat.
§ 216B.1612 and the Commission’s September 5, 2008 Order approving our
C-BED tariff in Docket No. E-002/M-07-1527. We respectfully request the
Commission initiate its process for review.
The Petition and Attachment 1 contain information marked as trade secret and
considered sensitive by Xcel Energy and Goodhue Wind, LLC. These provisions
relate to the pricing and financial components, as well as certain other aspects of
the project. Disclosure of these provisions would have a detrimental effect by
Dr. Burl Haar
November 20, 2009
Page 2 of 2
providing potential suppliers with valuable information not otherwise readily
ascertainable and from which these persons would obtain economic value.
In compliance with Minn. Rule 7829.1300, subp. 2, the Company has served
copies of the filing on the Minnesota Office of Energy Security, the Office of
Attorney General – Residential Utilities Division, all parties on Xcel Energy's
general electric service list and our C-BED tariff docket list. If you have any
questions regarding this filing, please call me at (612) 330-2952.
Sincerely,
/s/
TIMOTHY J. EDMAN
MANAGER, REGULATORY ADMINISTRATION
Enclosures
c:
Service Lists
PUBLIC DOCUMENT
TRADE SECRET DATA HAS BEEN REMOVED
STATE OF MINNESOTA
BEFORE THE
MINNESOTA PUBLIC UTILITIES COMMISSION
David C. Boyd
J. Dennis O’Brien
Phyllis Reha
Thomas Pugh
Betsy L. Wergin
Chair
Commissioner
Commissioner
Commissioner
Commissioner
IN THE MATTER OF THE PETITION OF
NORTHERN STATES POWER COMPANY, A
MINNESOTA CORPORATION FOR
APPROVAL OF A POWER PURCHASE
AGREEMENT WITH GOODHUE WIND,
LLC
DOCKET NO. E-002/M-09-___
PETITION
INTRODUCTION
Northern States Power Company, a Minnesota Corporation (“Xcel Energy” or
“Company”), hereby petitions the Minnesota Public Utilities Commission
(“Commission”) for an Order approving a Power Purchase Agreement (the
“Agreement” or “PPA”) with Goodhue Wind, LLC ("Goodhue North" or "the
Project") for 39.0 MW of wind generation.
Goodhue Wind, LLC is a single-purpose entity created by project participants who
qualify under Minn. Stat. §216B.1612 (“C-BED Statute”). This Agreement for wind
generation with Goodhue North is the result of contract negotiations for the purchase
of energy from a C-BED project.
As permitted under Minn. Stat. 216B.1612, subd. 7(e), this PPA is approved if the
Commission receives no objections within 30 days of the filing date. A copy of the CBED PPA is included here as Attachment 1.
I. General Filing Information
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A.
Name, Address, and Telephone Number of Utility
Xcel Energy
414 Nicollet Mall
Minneapolis, Minnesota 55401
(612) 330-5500
B.
Name, Address, and Telephone Number of Utility Attorney
Matthew P. Loftus
Senior Attorney
Xcel Energy Services Inc.
414 Nicollet Mall, GO 5
Minneapolis, Minnesota 55401
(612) 215-4501
C.
Date of Filing and Date Modified Rates Take Effect
Xcel Energy submits this petition for approval on November 20, 2009. The
Company requests approval of the Agreement as of December 20, 2009 if no
objections are received by that date, or upon the date of the Commission Order in the
event the normal Commission process must be followed due to receipt of an
objection to this C-BED PPA. No change in rates would occur until construction of
the project and acceptable delivery of energy under the project begins, which is
potentially by [TRADE SECRET BEGINS: December 31, 2010. TRADE
SECRET ENDS]
D.
Statute Controlling Schedule for Processing the Filing
The Agreement is the result of negotiations under our C-BED tariff established as a
result of Minn. Stat. §216B.1612 and approved by the Commission in Docket No.
E002/M-07-1527. Specifically, Minn. Stat §216B.1612 subd. 7(e) provides that a
utility’s ratepayers have an opportunity to address PPA reasonableness, and if no
objection is made within 30 days, the contract is deemed approved.
E.
Utility Employee Responsible for Filing
Timothy J. Edman
Manager, Regulatory Administration
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Xcel Energy Services Inc.
414 Nicollet Mall, GO 7
Minneapolis, Minnesota 55401
Fax Number: 612-330-2952
II.
Description and Purpose of Filing
Xcel Energy seeks approval of the Agreement, provided as Attachment 1, 1 for wind
generation resources from Goodhue Wind, LLC, a single-purpose entity created by
the project participants. This agreement addresses the power purchase aspect of the
transaction with Goodhue North. Interconnection issues are separately negotiated. 2
A unique feature of this petition is the approval process established by statute.
Typically, the Commission has acted on wind PPAs using traditional regulatory
process whereby comment and reply periods precede Commission action. In the case
of C-BED projects, the Minnesota legislature intended rapid regulatory approval of
these types of contracts. The priority of encouraging community-based wind
development is emphasized by establishing approval after a 30-day period if no
objections are raised.
In support of this filing, Xcel Energy provides:
•
•
•
•
Background information;
Overview of the generation resources;
Summary of relevant terms of the power purchase agreements;
Proposed use of fuel and resource recovery clauses related to the purchases;
and
• Demonstration that the PPA is in the public interest, reasonable and protects
the interest of ratepayers.
A.
Background
During the 2005 session, the Minnesota legislature created a new law intended to
further facilitate wind development in the state by adopting a set of ownership criteria
and pricing guidelines supporting much greater local, regional and state involvement
Certain provisions of the Agreement have been designated "Trade Secret". We have designated more information to
be trade secret than we have in past agreements due to the ongoing negotiations with other C-BED projects.
2 As a result of the FERC functional separation rules for wholesale contracts and FERC’s determination that
transmission interconnection is a service under the Xcel Energy Open Access Transmission Tariff (“OATT,” required
by FERC Order 888), the interconnection agreement for the PPA will be separately negotiated (through MISO) and filed
with FERC.
1
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than had been realized in the past. In addition to specifically defining qualifying
ownership – examples of which include Minnesota residents, non-profit
organizations, school district and tribal councils – Minn. Stat. §216B.1612 specifies the
pricing structure may be front end-loaded for the first half of the contract term.
Under the 2005 law, the power generated by C-BED projects could be purchased by
Minnesota utilities at a rate up to 2.7 cents per kilowatt hour on a net present value
basis over a 20-year contract life.
To emphasize the importance state leaders place on additional development of
renewable energy resources, Governor Tim Pawlenty announced a state goal of 800
MW of community-based wind by 2010. The Goodhue North Project is one of
several C-BED contracts with which Xcel Energy strives to secure 500 MW of CBED resources.
By law, all Minnesota utilities were to offer a C-BED tariff for Commission approval
and in an Order dated May 3, 2006 in Docket No. E002/M-05-1887, Xcel Energy’s
C-BED tariff was approved. In 2007, the Minnesota legislature modified the C-BED
statute in a number of ways including ownership criteria and removal of the price cap,
further requiring utilities to submit by December 1, 2007 revised C-BED tariffs to the
Commission. On December 3, 2007, the Company filed for approval of revisions to
the C-BED tariff in Docket No. E002/M-07-1527 in order to conform to the 2007 CBED statutory amendments. In particular, the revised C-BED tariff clarifies the
possible ownership of a C-BED facility and removes the 2.7 cents per kWh net
present value price cap. On September 5, 2008 the Commission issued an Order
approving the revised C-BED tariff.
B.
Overview of the Generation Resources
Goodhue North is a 39.0 MW C-BED project consisting of one Minnesota limited
liability company (“LLC”). The project plans to use 26 GE 1.5 xle wind turbines.
The project will be constructed on a site located in Goodhue County in southeastern
Minnesota. The facility is expected to produce approximately [TRADE SECRET
BEGINS: 125,000 MWh of energy annually translating to an annual capacity factor of
approximately 36.6%. TRADE SECRET ENDS] Goodhue North has signed an
Interconnection Agreement with an Transmission (?) Provider (Great River Energy),
and few transmission upgrades are required (what does the IA actually say?). The
MISO queue number is H061. Goodhue North will install and operate the facilities
necessary to interconnect the project. The point of interconnection and delivery will
be Great River Energy’s 69 kV line in Goodhue Township (T-117N, R-15W) in
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Goodhue County. [TRADE SECRET BEGINS: The potential commercial operation is
December 31, 2010. TRADE SECRET ENDS] Goodhue North has begun making
arrangements for equipment and resources, and the 30-day approval process
established in statute can help the project accomplish its commercial operation date.
Goodhue North submitted its proposal for consideration in response to the January
21, 2009 Request for Proposals for C-BED projects and, based on the Company’s
evaluation of the proposals received, was determined to be competitive.
C.
Relevant Terms of the Transaction
Following is a brief description of the relevant terms of this particular PPA.
1.
Purchase Price and Term
Xcel Energy will purchase the entire output of the Project over a 20-year term of the
contract. The price in this PPA is a flat price for the entire 20 years. The PPA rates
are [TRADE SECRET BEGINS: $67.90/MWh for 20 years. TRADE SECRET
ENDS]. Energy production prior to the Commercial Operation Date (“COD”) will
be purchased by Xcel Energy at a rate of [TRADE SECRET BEGINS: $40/MWh.
TRADE SECRET ENDS]
Xcel Energy has reviewed the price stream of the above rates and using our current
cost of capital of 8.83%3 , we conclude that the contract energy payments translate
into a net present value of [TRADE SECRET BEGINS: $31.42 per MWh (or 3.142
cents/kWh) TRADE SECRET ENDS] The Goodhue North C-BED PPA is
[TRADE SECRET BEGINS: reflective of the current market and is priced at a level such
that it compares favorably to other recently bid C-BED projects. Goodhue North has a levelized
price of $67.90/MWh, and the range of bids received was $55.35/MWh - $82.27/MWh.
TRADE SECRET ENDS]
The PPA includes a provision to address any situation in which the Commission or
another governmental authority with jurisdiction determines that Goodhue North has
not maintained its eligibility with respect to the C-BED statute. In the event this
condition occurs, Xcel Energy will continue to purchase the energy at a reduced rate
of [TRADE SECRET BEGINS: $64.50/MWh (the Non-C-BED Rate) TRADE
SECRET ENDS] until seller has restored its C-BED eligibility.
3
The current cost of capital value was set in Docket E002/GR-08-1065.
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2.
Commercial Operation Date
The potential COD is [TRADE SECRET BEGINS: December 31, 2010 although
contractually, the project is allowed to become commercial at other points in 2010 without penalty. A
COD later than December 31, 2010 TRADE SECRET ENDS] or as extended for
reasons other than Force Majeure, Event of Default by NSP or delay attributable to
NSP, is considered an Event of Default on the part of Goodhue North.
3.
Security
To mitigate performance risks, the PPA includes a security provision in the amount of
[TRADE SECRET BEGINS: $75/kW or $2,925,000 TRADE SECRET ENDS]
from which Xcel Energy may draw. The security fund will be established and can be
fully funded through one of two methods – either by letter of credit within 120 days
of regulatory approval or through an escrow account with deposits being built up over
a relatively short period of time until the agreed to amount is reached. As is typical
with security funds, the Seller must replenish the fund within a short period of time
for any draws.
4.
Transmission and Curtailment
The PPA includes provisions under which Xcel Energy will pay for transmission
related curtailment due to [TRADE SECRET BEGINS: lack of available transmission
capacity, lack of transmission service, low loads conditions requiring curtailment for system stability or
transmission loading relief implemented under the Open Access Transmission Tariff. TRADE
SECRET ENDS] We have estimated a low curtailment risk for this project meaning
[TRADE SECRET BEGINS: less than five percent of the annual energy TRADE
SECRET ENDS] may possibly be curtailed. In the event the full amount of
estimated curtailment occurs, the incremental cost above the energy purchase would
be [TRADE SECRET BEGINS: about $35.00/MWh TRADE SECRET ENDS]
The value of this market-priced PPA outweighs the relatively small cost associated
with the risk of curtailment.
5.
Other Terms and Conditions
The Agreement contains numerous other terms and conditions typical in a power
purchase agreement that involves construction of new resources. These include
representations of each party about their ability to enter the transaction, force majeure
provisions, dispute resolution, listing of responsibilities, and provisions relating to
defaults and similar issues. This Agreement contains similar, although not identical
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provisions, to other wind-only PPAs previously reviewed and approved by the
Commission. Consequently, we have not provided a term-by-term review of this
Agreement to other previously . We are willing to provide any additional analysis that
the Commission, the Office of Energy Security, or the Office of the Attorney General
believes would be helpful to facilitate review of the Agreement.
D.
Fuel and Resource Recovery Clauses Related to the Purchases
The Company intends to count this C-BED purchase toward the legislative
requirements of Minn. Stat. §216B.1691 subd. 2, and upon PPA approval, costs
incurred in connection with this Agreement are recoverable consistent with Minn.
Stat. §216B.1645. Comparable to all Xcel Energy’s wind generation purchases, costs
for this purchase are priced entirely on an energy basis. As with the purchases from
other wind projects, 4 Xcel Energy is seeking approval to recover these costs pursuant
to Minn. Stat. §216B.1645 through the fuel cost charge of the fuel clause rider. This
recovery method is the same as that set forth for other wind generation projects to
satisfy the legislative requirements of Minn. Stat. §216B.2423 subd. 1 and Minn. Stat.
§216B.1691 subd. 2.
E.
Description of the Proposed Tariff
Specific tariff changes are not necessary as the existing tariff language provides for
recovery of the costs of the energy through the Company’s renewable resource
recovery clause. The proposed terms of the agreement and associated costs to
ratepayers are described in this petition.
F.
The PPA is in the Public Interest, Reasonable and Protects the
Interests of Xcel Energy Ratepayers
Minn. Stat. §216B.1612 provides the means by which the Commission is to measure
the reasonableness of C-BED projects; the Goodhue North project as described
meets these statutory requirements. Xcel Energy offers the following to support this
assertion:
1. The Minnesota legislature has clearly stated its support for locally
developed, small scale energy development through the passage of the
C-BED program. Further, the Governor has set a goal for the
4
Except for those proposed in the Windsource program, Docket No. E-002/M-01-1479.
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2.
3.
4.
5.
6.
7.
development of at least 800 MW through the C-BED program by the
year 2010;
The Minnesota legislature recently removed the statutory price cap
enacted in 2005 for C-BED projects in response to the increased
construction costs for all types of energy projects and in order not to
place C-BED projects at a competitive disadvantage;
The Goodhue North cost per MWh falls within reasonable range of
other similar C-BED projects that submitted bids this year;
The Goodhue North PPA has been structured to protect the interests of
ratepayers through various safeguards and deliver energy to them at a
reasonable cost;
Approval of the Goodhue North PPA will help satisfy the legislative
requirements for the purchase of additional wind generation resources;
The Goodhue North project will help Minnesota maintain its forward
position as a leader in wind energy development; and
Approval of the Goodhue North PPA will provide a clear signal that
widespread wind energy development is an important part of
Minnesota’s long-term energy supply.
Based upon the above, Xcel Energy requests the Commission to: (1) approve the
PPA; and (2) determine that its terms and prices are reasonable and in the interests of
its ratepayers.
III.
Effect of Change upon Xcel Energy Revenue
The PPA is expected to result in annual energy expenditures of approximately
[TRADE SECRET BEGINS: $8.49 million annually for 20 years TRADE SECRET
ENDS] starting with the COD of the project. Pursuant to Minn. Stat. §216B.1645,
the Minnesota portion of these wind energy costs will be recovered through the fuel
cost charge of the fuel clause rider. The Company proposes that the Minnesota
portion of these costs will be recovered through the automatic adjustment mechanism
of the Company’s electric rate tariffs on file with the Commission.
No net increase in revenue to Xcel Energy will result from this transaction, as the
Minnesota costs of the power purchase will equal the Minnesota revenue collected.
IV.
Miscellaneous Information
A.
Service List
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Pursuant to Minnesota Rule 7829.0700, Xcel Energy requests that the following
persons be placed on the Commission’s official service list for this matter:
Matthew P. Loftus
Senior Attorney
Xcel Energy Service Inc.
414 Nicollet Mall, GO 5
Minneapolis, Minnesota 55401
B.
SaGonna Thompson
Records Specialist
Xcel Energy Services Inc.
414 Nicollet Mall, GO 7
Minneapolis, Minnesota 55401
Service on Other Parties
Pursuant to Minnesota Rule 7829.1300, subp. 2, Xcel Energy has served a copy of this
Petition on the Office of Energy Security and the Office of the Attorney General
(Residential Utilities Division). A summary of the filing has been served on all parties
on Xcel Energy’s miscellaneous electric service list.
C.
Summary of Filing
A one-paragraph summary of the filing accompanies this Petition pursuant to
Minnesota Rule 7829.1300, subp. 1.
CONCLUSION
The PPA negotiated with Goodhue North as a result of the 2005 and 2007 C-BED
legislation will satisfy various wind mandates and help diversify and serve the growing
electric supply needs of Xcel Energy’s electric customers. The project and associated
PPA meet the requirements of Minn. Stat. §216B.1612. Therefore, approval of the
PPA is reasonable and in the public interest.
Xcel Energy requests the Commission find that 1) this Agreement is reasonable and in
the public interest, 2) this Agreement is subject only to ongoing prudence review
through the annual automatic adjustment reports, and 3) Xcel Energy may recover
from Minnesota retail customers the Minnesota jurisdictional portion of the amounts
incurred by the Company during the full term of this Agreement.
Dated: November 20, 2009
Xcel Energy,
A Minnesota corporation
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STATE OF MINNESOTA
BEFORE THE
MINNESOTA PUBLIC UTILITIES COMMISSION
Chair
Commissioner
Commissioner
Commissioner
Commissioner
David C. Boyd
J. Dennis O’Brien
Thomas Pugh
Phyllis Reha
Betsy L. Wergin
IN THE MATTER OF THE PETITION OF
NORTHERN STATES POWER COMPANY A
MINNESOTA CORPORATION FOR
APPROVAL OF A POWER PURCHASE
AGREEMENT WITH GOODHUE WIND,
LLC
DOCKET NO. E002/M-09-_____
PETITION
SUMMARY OF FILING
Please take notice that on November 20, 2009, Northern States Power Company a
Minnesota corporation filed with the Minnesota Public Utilities Commission its
petition for approval of a Power Purchase Agreement with Goodhue Wind, LLC,
resulting from the Community Based Energy Development legislation, Minn. Stat.
§216B.1612 for purchase of 39.0 MW of wind generation resources.
1
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ATTACHMENT 1
Final
RENEWABLE ENERGY PURCHASE AGREEMENT
BETWEEN
NORTHERN STATES POWER COMPANY
AND
GOODHUE WIND, LLC
39 MW GOODHUE WIND FARM NORTH
(VASA INTERCONNECTION H061)
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ATTACHMENT 1
TABLE OF CONTENTS
Page
Article 1 - Definitions and Rules of Interpretation ...................................................... 1
1.1
Rules of Construction ................................................................................ 1
1.2
Interpretation with Interconnection Agreement ..........................................2
1,3
Interpretation of Arrangements for Electric Supply to the Facility ..............
3
1.4 Definitions .................................................................................................. 3
Article 2 - Term and Termination ............................................................................... 14
Article 3 - Facility Description .................................................................................... 14
Summary Description ............................................................................... 14
3.1
3.2
Location ................................................................................................... 15
3.3 General Design of the Facility .................................................................. 15
Article 4 - Commercial Operation .............................................................................. 15
4.1
Commercial Operation ............................................................................. 15
4.2
Construction Milestones .......................................................................... 15
4.3 Site Report/Environmental Liability ..........................................................
15
4.4
Facility Contracts ..................................................................................... 10
4.5
Progress Reports ..................................................................................... 16
4.6
NSP’s Rights During Construction ...........................................................16
4.7 Conditions to Commercial Operation .......................................................17
4.8 Test Energy .............................................................................................. 18
4.9 Permits ..................................................................................................... 18
Article 5 - Delivery and Metering ................................................................................ 19
5,1
Delivery Arrangements ............................................................................ 19
5,2
Electric Metering Devices ........................................................................ 20
5.3 Adjustment for Inaccurate Meters ............................................................21
Article 6 - Conditions Precedent ................................................................................
22
6.1 NSP Conditions Precedent ...................................................................... 22
Article 7 - Sale and Purchase of Renewable Energy ................................................23
7.1
Sale and Purchase .................................................................................. 23
Committed Renewable Energy ................................................................ 23
7.2
7,3 Title and Risk of Loss ............................................................................... 24
7.4 Curtailment Production Losses ................................................................ 24
Article 8 - Payment Calculations ................................................................................ 26
8.1 Energy Payment Rate .............................................................................. 26
8.2 Non-C-BED Rate ..................................................................................... 27
Article 9 - Billing and Payment ...................................................................................
27
Billing Invoices ......................................................................................... 27
9.1
9.2
Reactive Power Service Compensation ..................................................27
9.3
Payments ................................................................................................. 27
9.4
Billing Disputes ........................................................................................ 28
Article 10 - Operations and Maintenance ..................................................................28
10.1 Facility Operation ..................................................................................... 28
10.2 Outage and Performance Reporting ........................................................28
10.3 Capacity Resource Capability Verification ...............................................29
10.4 Operating Committee and Operating Procedures ...................................
29
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ATTACHMENT 1
TABLE OF CONTENTS
(continued)
Page
10.5 Access to Facility ..................................................................................... 29
10.6 Reliability Standards ................................................................................ 29
10.7 Renewable Energy Credits ......................................................................30
10,8 Availability Reporting ............................................................................... 30
10.9 Peak Production Availability .................................................................... 30
10.10 Maintenance Schedule ............................................................................ 30
Article 11 - Security for Performance ........................................................................
30
11.1 Security Fund ........................................................................................... 30
11,2 Additional Security ................................................................................... 34
Article 12 - Default and Remedies .............................................................................35
12.1 Events of Default of Seller .......................................................................35
12,2 Facility Lender’s Right to Cure Default of Seller ......................................
38
12.3 Events of Default of NSP .........................................................................38
12.4 Damages Prior to Termination .................................................................39
12.5 Termination .............................................................................................. 40
12.6 Limitation on Damages ............................................................................41
12.7 Operation by NSP Following Event of Default of Seller ...........................
42
12.8 Specific Performance ............................................................................... 43
12.9 Remedies Cumulative ..............................................................................43
12.10 Waiver and Exclusion of Other Damages ................................................
43
12.11 Payment of Amounts Due to NSP ...........................................................44
12.12 Duty to Mitigate ........................................................................................ 44
Article 13 - Contract Administration and Notices .....................................................
44
13.1 Notices in Writing ..................................................................................... 44
13.2 Representative for Notice ........................................................................44
13.3 Authority of Representatives ....................................................................44
13.4 Operating Records ................................................................................... 45
13.5 Operating Log .......................................................................................... 45
13.6 Provision of Real Time Data ....................................................................45
13,7 Billing and Payment Records ...................................................................45
13,8 Examination of Records ........................................................................... 45
13.9 Exhibits .................................................................................................... 46
13.10 Dispute Resolution ................................................................................... 46
Article 14 - Force Majeure ...........................................................................................
46
14.1 Definition of Force Majeure ...................................................................... 46
14.2 Applicability of Force Majeure ..................................................................47
14.3 Limitations on Effect of Force Majeure ....................................................48
14.4 Delays Attributable to NSP ...................................................................... 48
Article 15 - Representations, Warranties and Covenants .......................................
49
15.1 Seller’s Representations, Warranties and Covenants .............................
49
15.2 NSP’s Representations, Warranties and Covenants ...............................
51
Article 16 - Insurance .................................................................................................. 52
16.1 Evidence of Insurance ............................................................................. 52
16.2 Term and Modification of Insurance ........................................................52
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ATTACHMENT 1
TABLE OF CONTENTS
(continued)
Page
Article 17 - Indemnity .................................................................................................. 53
17.1 Indemnification ......................................................................................... 53
17.2 Notice ....................................................................................................... 53
17.3 Indemnifying Party’s Failure to Assume ...................................................54
!7.4 Amount Owed .......................................................................................... 54
Article 18 - Legal and Regulatory Compliance .........................................................54
18,1 Compliance With Laws ............................................................................ 54
18.2 Certificates ............................................................................................... 54
Article 19 - Assignment and Other Transfer Restrictions .......................................
54
19.1 No Assignment Without Consent .............................................................54
19,2 Accommodation of Facility Lender ........................................................... 55
19.3 Change of Control .................................................................................... 55
19.4 Notice of Facility Lender Action ............................................................... 57
19.5 Transfer Without Consent is Null and Void ..............................................57
19.6 Subcontracting ......................................................................................... 57
Article 20 - Miscellaneous .......................................................................................... 57
20.1 Waiver ...................................................................................................... 57
20.2 Taxes ....................................................................................................... 57
20.3 Fines and Penalties ................................................................................. 58
20.4 Rate Changes .......................................................................................... 58
20.5 Disclaimer of Third Party Beneficiary Rights ...........................................58
20.6 Relationship of the Parties ....................................................................... 58
20.7 Equal Employment Opportunity Compliance Certification .......................
59
20,8 Survival of Obligations .............................................................................59
20.9 Severability .............................................................................................. 59
20.10 Complete Agreement; Amendments ........................................................59
20.11 Binding Effect ........................................................................................... 60
20.12 Headings .................................................................................................. 60
20.13 Counterparts ............................................................................................ 60
20.!4 Governing Law ......................................................................................... 60
20.15 Press Releases and Media Contact ........................................................60
20.16 Confidentiality ............................................................................ 60
20.17 Forward Contract ........................................................................ 62
iii
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ATTACHMENT 1
TABLE OF CONTENTS
(continued)
Page
EXHIBIT A
EXHIBIT A-1
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E
EXHIBIT F
EXHIBIT G
EXHIBIT H
EXHIBIT I
EXHIBIT J
EXHIBIT K
CONSTRUCTION MILESTONES
RENEWABLE ENERGY PAYMENT RATE
FACILITY DESCRIPTION AND SITE MAPS
NOTICE ADDRESSES
INSURANCE COVERAGE
SELLER’S REQUIRED GOVERNMENTAL AUTHORITY
PERMITS, CONSENTS, APPROVALS, LICENSES AND
AUTHORIZATIONS TO BE OBTAINED
SELLER’S DIRECT OR INDIRECT PARENT ORGANIZATIONS
FORM OF LETTER OF CREDIT
C-BED ELIGIBILITY DOCUMENTATION
GUARANTY AGREEMENT
XCEL ENERGY SERVICES INC. NOTICE OF CUSTOMER
VOLUNTARY WRITTEN CONSENT
DATA COLLECTION
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Renewable Energy Purchase Agreement
between
Goodhue Wind, LLC
And
Northern States Power Company-Minnesota
(39 MW Goodhue Wind Farm North)
This Renewable Energy Purchase Agreement (this "PPA") is made this 20th day
of October, 2009, (the "Effective Date"), by and between Goodhue Wind, LLC, with a
principal place of business at 3033 Excelsior Blvd., Ste 525, Minneapolis, MN 55416
("Seller"), and Northern States Power Company, a Minnesota corporation with
headquarters in Minneapolis, Minnesota ("NSP") for the 39 MW Goodhue Wind Farm
North. Seller and NSP are hereinafter referred to individually as a "Party" and
collectively as the "Parties."
WHEREAS, Seller desires to develop, design, construct, own and operate a
wind-energy conversion electric generating facility known as the Goodhue Wind Farm
North with an expected total name plate Capacity of approximately 39 MW, which is
further defined below as the "Facility;" and
WHEREAS, Seller intends to locate the facility in Goodhue County, Minnesota
and to interconnect the Facility with the Interconnection Provider’s System; and
WHEREAS, Seller intends to qualify as a C-BED Project as that term is defined
herein and Seller has requested that NSP enter into this PPA on the basis that Seller
and the Facility qualify for C-BED Eligibility; and
WHEREAS, Seller desires to sell and deliver to NSP at the Point of Delivery the
Renewable Energy produced by the Facility and associated Renewable Energy Credits,
and NSP desires to buy the same from Seller in accordance with the terms and
conditions set forth in this PPA.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to
the following:
Article 1 - Definitions and Rules of Interpretation
1.1 Rules of Construction. The capitalized terms listed in this Article shall
have the meanings set forth herein whenever the terms appear in this PPA, whether in
the singular or the plural or in the present or past tense. Other terms used in this PPA
but not listed in this Article shall have meanings as commonly used in the English
language and, where such words have a generally accepted meaning in Good Utility
Practice, such meaning shall apply. Words not otherwise defined herein that have well
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known and generally accepted technical or trade meanings are used herein in
accordance with such recognized meanings. In addition, the following rules of
interpretation shall apply:
(A) The masculine shall include the feminine and neuter.
(B) References to "Articles," "Sections" or "Exhibits" shall be to articles,
sections or exhibits of this PPA.
(C) The Exhibits attached hereto are incorporated in and are intended
to be a part of this PPA; provided, however, that in the event of a conflict between the
terms of any Exhibit and the terms of this PPA, the terms of this PPA shall take
precedence.
(D) This PPA was negotiated and prepared by both Parties with the
advice and participation of counsel. The Parties have agreed to the wording of this PPA
and none of the provisions hereof shall be construed against one Party on the ground
that such Party is the author of this PPA or any part hereof.
(E) The Parties shall act reasonably and in accordance with the
principles of good faith and fair dealing in the performance of this PPA. Unless
expressly provided otherwise in this PPA, (a) when this PPA requires the consent,
approval or similar action by a Party, such consent or approval shall not be
unreasonably withheld, conditioned or delayed, and (b) wherever this PPA gives a Party
a right to determine, require, specify or take similar action with respect to a matter, such
determination, requirement, specification or similar action shall be reasonable.
(F) Use of the words "include" or "including" or similar words shall be
interpreted as "include without limitation" or "including, without limitation."
(G) Use of the words "tax" or "taxes" shall be interpreted to include
taxes, fees, surcharges and the like.
1.2 Interpretation with Interconnection A,qreement. Each Party conducts its
operations (i) in a manner intended to comply with FERC Order No. 2004, Standards of
Conduct for Transmission Providers, requiring the separation of its transmission and
merchant functions. Moreover, the Parties acknowledge that NSP’s transmission
function offers transmission service on its system in a manner intended to comply with
FERC policies and requirements relating to the provision of open-access transmission
service.
The Parties recognize that Seller will enter into a separate Interconnection
Agreement with the Interconnection Provider.
(A) The Parties acknowledge and agree that the Interconnection
Agreement shall be a separate and free-standing contract and that the terms of this
PPA are not binding upon the Interconnection Provider.
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(B) Notwithstanding any other provision in this PPA, nothing in the
Interconnection Agreement shall alter or modify Seller’s or NSP’s rights, duties and
obligations under this PPA. This PPA shall not be construed to create any rights
between Seller and the Interconnection Provider.
(C) In the event that the Interconnection Provider isNSP or an Affiliate
of NSP, Seller expressly covenants that, for purposes of this PPA, the Interconnection
Provider shall be deemed to be a separate entity and separate contracting party
whether or not the Interconnection Agreement is entered into with NSP or an Affiliate of
NSP.
1.3 Interpretation of Arran,qements for Electric Supply to the Facility. This
PPA does not provide for the supply of retail power to the Facility, for purposes of
turbine unit start-up or shut-down, or for any other purpose ("House Power"). Seller
shall contract with the local utility in whose retail service territory the Facility is located
("Local Provider") for the supply of House Power.
(A) Seller’s arrangements for the supply of House Power to the Facility
shall be separate and free-standing arrangements. The terms of this PPA are not
binding upon the Local Provider. For purposes of this PPA, the Local Provider shall be
deemed to be a separate entity and separate contracting party, whether or not the Local
Provider is Company or an Affiliate of NSP.
(B) Notwithstanding any other provision in this PPA, nothing in Seller’s
arrangements for the supply of House Power to the Facility shall alter or modify Seller’s
or NSP’s rights, duties and obligations under this PPA. This PPA shall not be construed
to create any rights between Seller and the Local Provider.
(C) Subject to Seller’s right to self-generate and consume energy
concurrently generated by the Facility, Seller may obtain House Power from the Local
Provider. Seller may obtain House Power through the Interconnection Facilities to the
extent permitted by law, provided, however, that the amount of energy received by
Seller through the Interconnection Facilities shall not be offset against the amount of
Renewable Energy delivered to NSP at the Point of Delivery for purposes of computing
NSP’s obligation to purchase Renewable Energy and to receive RECs. Seller shall
arrange at its own expense with the Interconnection Provider or applicable retail service
provider to separately measure House Power received through the Interconnection
Facilities.
1.4 Definitions. The following terms shall have the meanings set forth herein:
"Abandonment" means (i) the complete relinquishment of all possession and
control of the Facility by Seller, other than a transfer permitted under this PPA, or (ii) if
prior to the Commercial Operation Date, complete cessation of the design, construction,
testing and inspection of the Facility for ninety (90) consecutive Days by Seller or
Seller’s contractors, but only if such relinquishment or cessation is not caused by or
attributable to an Event of Default of, or request by, NSP or an event of Force Majeure.
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"Affiliate" of any named person or entity means any other person or entity that
controls, is under the control of or is under common control with the named entity. The
term "control" (including the terms "controls," "under the control of" and "under common
control with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management of the policies of a person or entity, whether
through ownership interest, by contract or otherwise.
"Applicable Law" means all applicable laws, statutes, treaties, codes, ordinances,
regulations, certificates, orders, licenses and permits of any Governmental Authority,
now in effect or hereafter enacted, amendments to any of the foregoing, interpretations
of any of the foregoing by a Governmental Authority having jurisdiction and all
applicable judicial, administrative, arbitration and regulatory decrees, judgments,
injunctions, writs, orders, awards or like actions (including those relating to human
health, safety, the natural environment or otherwise).
"Applicable Permits" shall have the meaning set forth in Section 4.9.
"Available Capacity" shall have the meaning set forth in Section 7.4(B).
"Business Day" means any calendar day that is not a Saturday, a Sunday or a
NERC recognized holiday.
"Capacity" means the output potential a machine or system can produce or carry
under specified conditions. The capacity of generating equipment is generally
expressed in kilowatts or megawatts. Capacity is also referred to as "capability" in the
electric power industry and for the purposes of this PPA the terms are synonymous.
"Capacity Resource" means the amount of net generating Capacity associated
with the Facility for which Capacity credit may be obtained under applicable planning
reserve procedures and requirements. Initially, such requirements are set forth in
Module E of the TEMT and MISO Business Practices Manual for Resource Adequacy.
"C-BED Eligibility" means the satisfaction of the applicable requirements set forth
in Minnesota Statutes Section 216B.1612, Subd. 2(f), necessary for the Facility to
qualify as a C-BED Project.
"C-BED Project" is a project that satisfies all of the requirements for a
community-based wind energy development project set forth in Minnesota Statutes
Section 216B.1612.
"Change of Control" shall have the meaning set forth in Section 19.3(A).
"Close of the Business Day" means 5:00 PM on a non-holiday weekday
prevailing time for the location of the Facility.
"Commercial Operation" means the period beginning on the Commercial
Operation Date and continuing through the Term of this PPA.
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"Commercial Operation Date" or "COD" means the date that NSP provides
notification to Seller, pursuant to Section 4.7, of NSP’s declaration that all of the
Conditions specified in Section 4.7 have occurred or otherwise been satisfied.
"Commercial Operation Milestone" means the Construction Milestone for the
Commercial Operation Date. The Commercial Operation Milestone is specified in
Exhibit A as December 31, 2010.
"Commercial Operation Year" means any consecutive twelve (12) month period,
during the Term of this PPA, commencing with the Commercial Operation Date or any
of its anniversaries.
"Committed Renewable Energy" shall have the meaning set forth in Section 7.2.
"Conditions" shall have the meaning set forth in Section 4.7.
"Construction Contract" means the contract or contracts providing for the
acquisition, manufacture, delivery and installation of the generating and step-up
transformation equipment that is to be part of the Facility and the engineering,
procurement and construction of the Facility. The Construction Contract may consist of
a single engineering, procurement and construction contract, in which case such single
engineering, procurement and construction contract shall constitute the "Construction
Contract", or it may consist of a series of contracts (such as a turbine supply and
installation contract and a balance of plant contract), in which case such series of
contracts shall collectively constitute the "Construction Contract."
"Construction Milestones" means the dates set forth in Exhibit A by which Seller
agrees to achieve the corresponding results specified for such dates, including, but not
limited to, the Commercial Operation Milestone.
"Control Area" means the system of electrical generation, distribution and
transmission facilities within which generation is regulated in order to maintain
interchange schedules with other such systems.
"Day" means a calendar day.
"Delay Conditions" shall have the meaning set forth in Section 14.4.
"Delay Damages" shall have the meaning set forth in Section 12.4(A).
"Deliverability Study" means a test performed by MISO that analyzes the ability
of groups of generation in small pockets throughout the MISO footprint to operate at
their maximum capability without being "bottled up" by transmission constraints.
"Dispute" shall have the meaning set forth in Section 13.10(A).
"Dispute Notice" shall have the meaning set forth in Section 13.10(A).
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"Effective Date" shall have the meaning set forth in the introductory paragraph.
"Electric Metering Devices" means the meters, metering equipment and data
processing equipment used to measure, record or transmit data relating to the
Renewable Energy output from the Facility. Electric Metering Devices include the
metering current transformers and the metering voltage transformers.
"Eligible Renewable Energy Resource" means any resource that qualifies a
renewable energy resource eligible to be certified to receive, claim, own or use
Renewable Energy Credits pursuant to the protocols and procedures developed and
approved by the MPUC in the Midwest Renewable Energy Trading System ("M-RETS")
program, MPUC Docket No. E-999/CI-04-1616 and subsequent related proceedings.
"EMCC" or "Energy Markets Control Center" means NSP’s merchant
representatives responsible for dispatch of generating units, including the Facility.
"Emergency" means any condition or situation which in the commercially
reasonable judgment of NSP, the Interconnection Provider, MISO, or MRO (as
communicated to NSP) that (i) endangers or might endanger life or property or public
safety or (ii) affects or might affect NSP’s ability, or the ability of any participant of MRO,
or MISO, to maintain safe, adequate and continuous electric service to NSP’s or the
Interconnection Provider’s customers or the customers of any participant of MRO, or
MISO, and any emergency as defined in the Interconnection Agreement.
"Energy Resource" means the type of interconnection service which allows Seller
to connect the Facility to the transmission or distribution system, as applicable, as an
"Energy Resource" as defined by the TEMT, and be eligible to deliver the Facility’s
output using the existing firm or non-firm capacity on the transmission system on an asavailable basis.
"Environmental Contamination" means the introduction or presence of
Hazardous Materials at such levels, quantities or location, or of such form or character,
as to constitute a violation of Applicable Law, and present a material risk under
Applicable Law that the Site will not be available or usable for the purposes
contemplated by this PPA.
"ERIS" means interconnection service that allows Seller to connect the Facility
and Seller’s System to the Interconnection Provider’s System as an "Energy Resource"
as defined in the TEMT and allows the Facility to deliver the Energy and Capacity
produced by the Facility using existing firm or non-firm capacity on the transmission
system on an as-available basis.
"Event of Default" shall have the meaning set forth in Article 12.
"Facility" means Seller’s electric generating facility and Seller’s Interconnection
Facilities, as identified and described in Article 3 and Exhibit B to this PPA, including,
but not limited to, all of the following, the purpose of which is to produce electricity and
deliver such electricity to the Interconnection Point: Seller’s equipment, buildings, all of
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the generation facilities, including generators, turbines, step-up transformers, output
breakers, facilities necessary to connect to the Interconnection Point, protective and
associated equipment, improvements and other tangible assets, contract rights,
easements, rights of way, surface use agreements and other interests or rights in real
estate reasonably necessary for the construction, operation and maintenance of the
electric generating facility that produces the Renewable Energy subject to this PPA.
"Facility Debt" means the obligations of Seller to any lender pursuant to the
Financing Documents, including without limitation, principal of, premium and interest on
indebtedness, fees, expenses or penalties, amounts due upon acceleration,
prepayment or restructuring, swap or interest rate hedging breakage costs and any
claims or interest due with respect to any of the foregoing.
"Facility Lender" means, collectively, any lenders providing any Facility Debt and
any successors or assigns thereto.
"FCA" means a Facilities Construction Agreement as required by MISO pursuant
to its TEMT.
"FERC" means the Federal Energy Regulatory Commission or any successor
agency.
"Financing Documents" means the loan and credit agreements, notes, bonds,
indentures, security agreements, lease financing agreements, mortgages, deeds of
trust, interest rate exchanges, swap agreements and other documents relating to the
development, bridge, construction or permanent debt financing for the Facility, including
any credit enhancement, credit support, working capital financing or refinancing
documents, and any and all amendments, modifications or supplements to the
foregoing that may be entered into from time to time at the discretion of Seller in
connection with development, construction, ownership, leasing, operation or
maintenance of the Facility.
"Force Majeure" shall have the meaning set forth in Article 14.
"Forced Outage" means any condition at the Facility that requires immediate
removal of the Facility, or some part thereof, from service, another outage state or a
reserve shutdown state. This type of outage results from immediate
mechanical/electrical/hydraulic control system trips and operator-initiated trips in
response to Facility conditions or alarms.
"Good Utility Practices" means the practices, methods and acts (including but not
limited to the practices, methods and acts engaged in or approved by a significant
portion of the electric power wind generation industry, MRO or NERC) that, at a
particular time, in the exercise of reasonable judgment in light of the facts known or that
should reasonably have been known at the time a decision was made, would have been
expected to accomplish the desired result in a manner consistent with Applicable Law,
permits, codes, equipment manufacturer’s recommendations, reliability, safety, and
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environmental protection. With respect to the Facility, Good Utility Practices includes,
but is not limited to, taking reasonable steps to ensure that:
(A) equipment, materials, resources, supplies, and spare parts, are
available to meet the Facility’s needs;
(B) sufficient adequately trained operating personnel are available at all
times to operate and maintain the Facility properly, efficiently and in coordination with
NSP and are capable of responding to reasonably foreseeable Emergency conditions,
whether caused by events on or off the Site;
(C) preventive, routine and non-routine maintenance and repairs are
performed in accordance with turbine manufacturer’s recommendations and
specifications on a basis that ensures reliable, long-term and safe operation;
(D) appropriate monitoring and testing are performed in accordance
with turbine manufacturer’s recommendations and specifications; and
(E) equipment is not operated in a reckless manner, in violation of
manufacturer’s guidelines or in a manner unsafe to workers, the general public or the
interconnected system or contrary to Applicable Law, permits, or without regard to
defined limitations such as flood conditions, safety inspection requirements, operating
voltage, current, volt ampere reactive loading, frequency, rotational speed, polarity,
synchronization or control system limits; and
(F) equipment and components meet or exceed the standard of
durability that is generally used for electric generation operations in the region and will
function properly over the full range of ambient temperature and weather conditions
reasonably expected to occur at the Site and under both normal and Emergency
conditions.
(G) equipment is operated in accordance with turbine manufacturer’s
recommendations and specifications and applicable permits, licenses and Applicable
Laws.
"Governmental Authority" means any federal, state, local or municipal
governmental body; any governmental, quasi-governmental, regulatory or administrative
agency, commission, body or other authority exercising or entitled to exercise any
administrative, executive, judicial, legislative, policy, regulatory or taxing authority or
power; or any court or governmental tribunal.
"Guarantor" shall have the meaning set forth in Section 11.1.
"Hazardous Materials" means any substance, material, gas or particulate matter
that is regulated by any local Governmental Authority, as an environmental pollutant or
dangerous to public health, public welfare or the natural environment including
protection of non-human forms of life, land, water, groundwater and air, including any
material or substance that is (i) defined as "toxic," "polluting," "hazardous waste,"
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"hazardous material," "hazardous substance," "extremely hazardous waste," "solid
waste" or "restricted hazardous waste" under any provision of local, state or federal law;
(ii) petroleum, including any fraction, derivative or additive; (iii) asbestos;
(iv) polychlorinated biphenyls; (v) radioactive material; (vi) designated as a "hazardous
substance" pursuant to the Clean Water Act, 33 U.S.C. §1251 et seq. (33 U.S.C.
§1251); (vii) defined as a "hazardous waste" pursuant to the Resource Conservation
and Recovery Act, 42 U.S.C. §6901 et seq. (42 U.S.C. §6901); (viii) defined as a
"hazardous substance" pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. §9601 et seq. (42 U.S.C. §9601);
(ix) defined as a "chemical substance" under the Toxic Substances Control Act,
15 U.S.C. §2601 et seq. (15 U.S.C. §2601); or (x) defined as a pesticide under the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. §136 et seq.
(7 U.S.C. §136).
"House Power" shall have the meaning set forth in Section 1.3.
"Indemnified Party" shall have the meaning set forth in Section 17.1.
"Indemnifying Party" shall have the meaning set forth in Section 17.1.
"lnterconnection Agreement" means the separate agreement among Seller.
MISO and the Interconnection Provider for interconnection of the Facility to the
Interconnection Provider’s System, as such agreement may be amended from time to
time. For the avoidance of doubt, "lnterconnection Agreement" excludes any temporary
interconnection agreement or any agreement where the Transmission Provider may
limit the operational output of the Facility.
"lnterconnection Facilities" means Interconnection Provider’s lnterconnection
Facilities and Seller’s Interconnection Facilities.
" Interconnection Point" means the physical point adjacent to the existing Vasa
substation on a 69 kV transmission line at which Seller’s new 69 kV radial line from its
step-up substation will interconnect the Facility to the Interconnection Provider’s
System.
"lnterconnection Provider" means collectively (i) the entity that is responsible
under the Interconnection Agreement for providing the transmission lines,
Interconnection Provider’s Interconnection Facilities and other equipment and facilities
with which the Facility interconnects at the Interconnection Point (known under the
Interconnection Agreement as the "Transmission Owner") and (ii) MISO (known under
the Interconnection Agreement as the "Transmission Provider").
"lnterconnection Provider’s Interconnection Facilities" means the facilities
necessary to connect Interconnection Provider’s existing electric system to the
Interconnection Point, including breakers, bus work, bus relays and associated
equipment installed by the Interconnection Provider for the direct purpose of
interconnecting the Facility, along with any easements, rights of way, surface use
agreements and other interests or rights in real estate reasonably necessary for the
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construction, operation and maintenance of such facilities. Arrangements for the
installation and operation of the Interconnection Provider’s Interconnection Facilities
shall be governed by the Interconnection Agreement.
"lnterconnection Provider’s System" means the contiguously interconnected
electric transmission and sub-transmission facilities, including Interconnection Provider’s
Interconnection Facilities, over which the Interconnection Provider has rights (by
ownership or contract) to provide bulk transmission of Capacity and energy from the
Interconnection Point.
"Issuer" shall have the meaning set forth in Section 11. I(E).
"Local Provider" shall have the meaning set forth in Section 1.3.
"MISO" means the Midwest Independent System Operator, Inc., a non-profit
Delaware corporation, or successor organization.
"MPUC" means the Minnesota Public Utilities Commission or any successor
agency.
"M-RETS Program" means the Midwest Renewable Energy Trading System
program, MPUC Docket No. E-999/CI-04-1616 and subsequent related proceedings.
"MRO" means the Midwest Reliability Organization, a NERC regional electric
reliability council, or any successor organization.
"Negative Checkoff Approval" means this PPA has been approved in
conformance with Minn. Stat. § 216B.1612 as follows: (i) NSP has submitted this PPA to
the MPUC under such statute; (ii) no Person objects to this PPA within thirty (30) Days
after submission of this PPA to the MPUC, or an objection is raised but is resolved,
withdrawn or otherwise determined not to prevent approval of this PPA within such thirty
(30) days; and (iii) the MPUC fails to disapprove this PPA within such thirty (30) Days
after submission, then this PPA shall be deemed approved pursuant to Minnesota
Statutes Section 216B.1612, and no further MPUC approval shall be required.
"NERC" means the North American Electric Reliability Council or any successor
organization.
"Network Resource" means the applicable amount of capacity for the Facility that
has been designated for resource adequacy as a "Network Resource" under Module E
of the TEMT.
"New Joint Transmission Authority" means any independent service organization
or other Person that may be created or becomes operational subsequent to the date of
this PPA and that is empowered or authorized to plan, coordinate, operate, regulate or
otherwise manage any or all of the Interconnection Provider’s system, whether in place
of, or in addition to, MRO or MISO.
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"Non-C-BED Rate" means the amount set forth in Exhibit A-l, to apply as set
forth in Section 8.2.
"On-Peak Months" means the months of January, February, June, July, August,
September and December.
"Operating Committee" means one representative each from NSP and Seller
pursuant to Section 10.4.
"Operating Procedures" means those procedures developed pursuant to
Section 10.4.
"Operating Records" means all agreements associated with the Facility,
operating logs, blueprints for construction, operating manuals, all warranties on
equipment and all documents, whether in printed or electronic format, that Seller uses
or maintains for the operation of the Facility.
"Party" and "Parties" shall have the meanings set forth in the introductory
paragraph.
"Party Representative" and "Parties’ Representatives" shall have the meanings
set forth in Section 13.10(A).
"Pending Facility Transaction" shall have the meaning set forth in
Section 19.3(D).
"PFT Notice" shall have the meaning set forth in Section 19.3(D)(2).
"PI" shall have the meaning set forth in Section 13.6.
"Point of Delivery" means the electric system point at which Seller makes
available to NSP and delivers to NSP the Renewable Energy being provided by Seller
to NSP under this PPA. The Point of Delivery shall be at a location within MISO’s
operational control and specified in Exhibit B to this PPA.
"PPA" means this Renewable Energy Purchase Agreement between Seller and
NSP, including the Exhibits attached hereto.
"Production Data" shall have the meaning set forth in Section 10.2(C).
"PTCs" means federal production tax credits applicable to electricity produced
from certain renewable resources pursuant to 26 U.S.C. Section 45, as amended, or
such substantially equivalent tax credit that provides Seller (or its owners) with a tax
credit based on energy production from any portion of the Facility.
"Qualifying Owner" shall have the meaning set forth in Minnesota Statutes
Section 216B.1612, Subd. 2(c), as amended.
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"Renewable Energy" means all electric energy generated exclusively by the
Facility (which is electric energy derived from an Eligible Renewable Energy Resource)
including any and all associated Renewable Energy Credits and delivered to the Point
of Delivery as measured by the Electric Metering Devices installed pursuant to
Section 5.2. Renewable Energy shall be of a power quality of 60 cycle, three-phase
alternating current that is compliant with the Interconnection Agreement.
"Renewable Energy Credits" or "RECs" shall mean any contractual right to the
full set of non-energy attributes, including any and all credits, benefits, emissions
reductions, offsets and allowances, howsoever entitled, directly attributable to a specific
amount of capacity or electric energy generated from an Eligible Energy Resource,
including any and all environmental air quality credits, benefits, emissions reductions,
off-sets, allowances or other benefits as may be created or under any existing or future
statutory or regulatory scheme (federal, state or local) by virtue of or due to the Facility’s
actual energy production or the Facility’s energy production capability because of the
Facility’s environmental or renewable characteristics or attributes, including any
Renewable Energy Credits or similar rights arising out of or eligible for consideration in
the M-RETS Program. For the avoidance of doubt, "RECs" excludes (i) any local, state
or federal PTCs, depreciation deductions or other tax credits providing a tax benefit to
Seller based on ownership of, or energy production from, any portion of the Facility,
including any investment tax credit that may be available to Seller with respect to the
Facility, and (ii) depreciation and other tax benefits arising from ownership or operation
of the Facility unrelated to its status as a generator of renewable or environmentally
clean energy.
"Renewable Energy Payment Rate" shall have the meaning set forth in
Section 8.1.
"Replacement Energy Costs" means the costs incurred by NSP, after the
Commercial Operation Date, for the Renewable Energy that is necessary to replace that
which Seller, in accordance with this PPA, was required to have produced at the Facility
and deliver to NSP, but failed to so provide, less the sum of any payments from NSP to
Seller, under this PPA, that were eliminated as a result of such failure; provided,
however, that the net amount shall never be less than zero in any hour. Unless the
Parties mutually agree to a different bases for reimbursement, Replacement Energy
Costs shall be determined on an hourly basis and shall include only those hours where
the following calculation achieves a positive number:
Replacement Energy Costs = (A + B + C) - D, where
(i) The calculation achieves a positive number and for any hour the
calculation achieves a negative number, the number for such hour(s) shall be deemed
to be zero.
(ii) "A" is the product of the MWh for which Replacement Energy Costs are
owed and the MISO spot market price for energy delivered at the MISO LMP node
nearest to the Point of Delivery for the hour;
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(iii) "B" is the product of the actual cost of M-RETs-certified RECs and the
number of RECs equal to the number of MWh for which Replacement Energy Costs are
owed; and
(iv) "C" an amount equal to the reasonable cost of transmission to deliver
reasonably available energy to NSP in amounts equal to the number of MWh for which
Replacement Energy Costs are owed;
(v) "D" is the product of the MWh for which Replacement Energy Costs are
owed and the Renewable Energy Payment Rate.
"SCADA" means supervisory control and data acquisition.
"Scheduled Outage/Derating" means a planned interruption/reduction of the
Facility’s generation that both (i) has been coordinated in advance with NSP, with a
mutually agreed start date and duration, and (ii) is required for inspection or preventive
or corrective maintenance.
"Security Fund" means the letter of credit, guaranty, escrow fund or other
collateral that Seller is required to establish and maintain, pursuant to Section 11.1, as
security for Seller’s performance under this PPA.
"Seller’s Interconnection Facilities" means the equipment between the high side
disconnect of the step-up transformer and the lnterconnection Point, including all related
relaying protection and physical structures as well as all transmission facilities required
to access the Interconnection Provider’s System at the Interconnection Point, along with
any easements, rights of way, surface use agreements and other interests or rights in
real estate reasonably necessary for the construction, operation and maintenance of
such facilities. On the low side of the step-up transformer it includes Seller’s metering,
relays and load control equipment as provided for in the Interconnection Agreement.
This equipment is located within the Facility and is conceptually depicted in Exhibit B to
this PPA.
"Site" means the parcel of real property on which the Facility will be constructed
and located, including any easements, rights of way, surface use agreements and other
interests or rights in real estate reasonably necessary for the construction, operation
and maintenance of the Facility. The Site is more specifically described in Section 3.2
and Exhibit B to this PPA.
"Subordinated Mortgage" shall have the meaning set forth in Section 11.2(A).
"Tax Benefits" means an amount equal to: (i) the PTCs to which Seller (or its
owners) would have been entitled with respect to Renewable Energy that could have
been delivered but for a Voluntary Curtailment pursuant to Section 7.4 of this PPA; plus
(ii) a "gross up" dollar amount to take into account the federal, state and local income
tax to Seller on such payments in lieu of PTCs so that the net amount retained by
Seller, after payment of federal, state and local income taxes, is equal to the amount set
forth in clause (i) of this definition. For purposes of determining the foregoing, Seller
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shall be deemed to be subject to tax at the highest statutory corporate income tax rates
for the highest income bracket (federal, state or local, as applicable) for Seller or its
parent, as appropriate, that are in effect or scheduled to be in effect for the tax year in
which the receipt of such Tax Benefits payment is taxed. By way of example, as of the
date of this PPA, the highest marginal corporate federal income tax rate for the highest
income tax bracket is thirty-five percent (35%).
"TEMT" means the MISO Open Access Transmission Energy and Operating
Reserve Markets Tariff, as amended from time to time.
"Term" means the period of time during which this PPA shall remain in full force
and effect, and is further defined in Article 2.
"Test Energy" means that energy which is produced by the Facility, delivered to
NSP at the Point of Delivery and purchased by NSP, pursuant to Section 4.8, in order to
perform testing of the Facility prior to Commercial Operation.
"Turbine Commitment" shall have the meaning set forth in Section 6.1 (B).
"Voluntary Curtailment" shall have the meaning set forth in Section 7.4(A)(2).
"Wind Turbines" means the electric generating devices powered by the wind that
are included in the Facility.
Article 2 - Term and Termination
This PPA shall become effective as of the date of its execution, and shall remain
in full force and effect until the twentieth (20th) anniversary of the COD, subject to any
early termination or extension provisions set forth herein. Applicable provisions of this
PPA shall continue in effect after termination, including early termination, to the extent
necessary to enforce or complete the duties, obligations or responsibilities of the Parties
arising prior to termination and, as applicable, to provide for final billings and
adjustments related to the period prior to termination, repayment of any money due and
owing to either Party pursuant to this PPA, repayment of principal and interest
associated with any Security Fund and the indemnifications specified in this PPA.
Article 3 - Facility Description
3.1 Summary Description. Seller shall construct, own, operate and maintain
the Facility, and associated equipment having a designed maximum output of
approximately 39 MW. Exhibit B to this PPA provides a detailed description of the
Facility, including identification of the manufacturer, equipment and components that
make up the Facility and Seller’s schedule for procuring such Wind Turbines. The
Facility shall consist of twenty-six (26) GE 1.5 xle Wnd Turbines and associated
equipment unless Seller obtains NSP’s consent which shall not be unreasonably
withheld, conditioned or delayed to the substitution of other horizontal access Wind
Turbines with an aggregate design name plate capacity of approximately 39 MW. Within
ninety (90) days after the Effective Date, Seller shall provide a preliminary site plan that
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identifies the locations of the Wind Turbines that comprise the Facility. Seller shall use
balance of plant parts and equipment that are consistent with and support the
warranties for the Wind Turbines.
3.2 Location. The Facility shall be located on the Site and shall be identified
as Seller’s Goodhue Wind Farm North. The location of the Facility is in Belle Creek and
Vasa Townships, Goodhue County, Minnesota. A scaled map that identifies the Site,
the location of the Facility at the Site, the location of the Interconnection Point and the
location of the important ancillary facilities and Interconnection Facilities is included in
Exhibit B to this PPA.
3.3 General Desi,qn of the Facility. Seller shall construct the Facility according
to Good Utility Practices and the Interconnection Agreement. During Commercial
Operation, Seller shall maintain the Facility according to Good Utility Practices and the
Interconnection Agreement. In addition to the requirements of the Interconnection
Agreement, the Facility shall at all times:
(A) have the required panel space and 125VDC battery supplied
voltage to accommodate NSP’s metering, generator telemetering equipment and
communications equipment; and
(B) use communication circuits from the Facility to the EMCC for the
purpose of telemetering, supervisory control/data acquisition, billing and voice
communications as required by NSP.
Article 4 - Commercial Operation
4.1 Commercial Operation. Subject to one or more extensions as specifically
provided for herein, including Events of Default, delays by NSP and Force Majeure, the
Facility shall achieve the Commercial Operation Date, and shall be fully capable of
reliably producing the Renewable Energy to be provided under this PPA and delivering
such Renewable Energy to NSP at the Point of Delivery, no later than the Commercial
Operation Milestone.
4.2 Construction Milestones. In order to achieve the Commercial Operation
Date by the Commercial Operation Milestone, subject to one or more extensions as
specifically provided for herein, Seller agrees to meet the Construction Milestones set
forth in Exhibit A to this PPA.
4.3
Site Report/Environmental Liability.
(A) Seller shall conduct a Phase I environmental investigation of the
Site and shall provide NSP, on or before 60 days after Negative Checkoff Approval, with
a copy of the report summarizing the Phase 1 environmental investigation of the Site,
together with any data or information generated pursuant to such investigation. Seller
shall provide to NSP, with such report, confirmation from an environmental engineer
that the Site has been inspected for Environmental Contamination and that the Site
does not materially impair Seller’s operation of the Facility. Such report, or other written
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confirmation provided by Seller, shall include a confirmation that, based upon such
investigation and to the best of Seller’s knowledge, no conditions involving
Environmental Contamination exist at or under the Site.
(B) Seller agrees to defend, indemnity and hold NSP and its officers,
directors, employees, agents and representatives, and their respective successors and
assigns ("NSP Indemnified Parties"), harmless from and against all claims, actions,
demands, losses, liabilities, damages, judgments, penalties, injuries and expenses
("Indemnified Losses") arising from or related to any environmental liability concerning
Seller, the Facility or the Site, including but not limited to (a) any claim for personal
injury or property damage by any Person arising out of, resulting from or caused by any
violation of all Applicable Laws by Seller or concerning the Facility or the Site; (b) any
assessment, fine, penalty, lien or other imposition by any Governmental Authority; and
(c) any liability, losses or remedial costs suffered because a Governmental Authority
finds NSP to be a responsible party, owner or operator of the Facility or Site; provided
however, Seller shall not be obligated to indemnity NSP Indemnified Parties for
Indemnified Losses arising from the NSP Indemnified Parties’ intentional acts or
omission and gross negligence.
4.4 Facility Contracts. Seller shall provide to NSP, within the time frames
specified by the Construction Milestones, redacted copies of the following major
contracts that govern the design and construction of the Facility, and the ability of Seller
to deliver Renewable Energy to NSP at the Point of Delivery, a resolution of support
adopted by the county board (or applicable Tribal council) for each county/reservation
on which any portion of the C-BED Project will be located, written determination from
the Minnesota Office of Energy Security that the Facility qualifies as a C-BED Project,
redacted copies of Construction Contracts and applicable electric transmission
agreement or interconnection agreements. Upon reasonable notice and request by
NSP, Seller shall provide NSP with other Facility construction contracts and major
engineering drawings. Seller shall also provide NSP with reasonable evidence that it
has the capability to finance construction of the Facility. Information that is
commercially sensitive, confidential or proprietary may be redacted from the documents
provided to NSP. Seller shall provide sufficient information for NSP to be reasonably
assured that Seller has contracted with financially responsible vendors as part of the
Facility construction process.
4.5 Pro.qress Reports. Commencing upon the execution of this PPA, Seller
shall submit to NSP, on the first Day of each calendar month until the Commercial
Operation Date is achieved, progress reports in a form reasonably satisfactory to NSP.
These progress reports shall notity NSP of the current status of each Construction
Milestone.
4.6 NSP’s Riqhts Durin.q Construction. NSP shall have the right to monitor the
construction, start-up and testing of the Facility, and Seller shall comply with all
reasonable requests of NSP with respect to the monitoring of these events. Seller shall
cooperate in such physical inspections of the Facility as may be reasonably requested
by NSP during and after completion of construction. All persons visiting the Facility on
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behalf of NSP shall comply with all of Seller’s applicable safety and health rules and
requirements. NSP’s technical review and inspection of the Facility shall not be
construed as endorsing the design thereof nor as any warranty of safety, durability or
reliability of the Facility.
4.7 Conditions to Commercial Operation. NSP will notify Seller when the
Facility has achieved the Commercial Operation Date, which notice will be neither
unreasonably withheld nor delayed by NSP. This notification is contingent upon Seller
providing evidence reasonably acceptable to NSP of the satisfaction or occurrence of all
of the conditions set forth in this Section 4.7 ("Conditions") and shall include a
declaration by NSP to that effect, provided, however that NSP may waive one or more
of the conditions. The Parties agree that review and approval of such Conditions may
occur on an ongoing and incremental basis, pending resolution of any dispute, as such
Conditions are satisfied. The Parties shall engage an independent third party engineer
to assist the Parties in resolving any disputes under this Section. The Conditions are:
(A) Wind Turbines with an aggregate Capacity of not less than eightYfive percent (85%) of the total nameplate capacity has been installed and
interconnected to the Interconnection Facility and Seller has successfully completed
that testing of the Facility that is required by the Facility’s governmental permits, Seller’s
operating agreements, Seller’s Construction Contract and manufacturers’ warranties for
the commencement of commercial operations at the Facility;
(B) an officer of Seller familiar with the Facility has provided a list of the
Facility’s equipment, showing the make, model, serial number and designed maximum
output (nameplate Capacity) of each Wind Turbine and of the entire Facility, which total
shall not exceed 39 MW;
(C) the Facility has achieved initial synchronization with the
Interconnection Provider’s System and has demonstrated the reliability of its
communications systems and communications with the NSP’s EMCC;
(D) a certification from a professional engineer independent of Seller
has been obtained by Seller certifying the designed maximum output of each Wind
Turbine and stating that the Facility has been completed in all material respects
(excepting punch list items that do not materially and adversely affect the ability of the
Facility to operate as intended hereunder) in accordance with this PPA, provided,
however, that Seller may use the services of the same professional engineer who is
providing review of the Facility as part of the commissioning process required by a
Facility Lender;
(E) Seller has completed the following: (i) Seller is both obligated
under and in compliance with the Interconnection Agreement; (ii) the interconnection of
the Facility to the Interconnection Provider’s System has been completed in accordance
with the Interconnection Agreement and has operated at a generation level acceptable
to the Interconnection Provider; (iii) Seller has provided to NSP a complete copy of the
Interconnection Agreement, including all appendices attached thereto; (iv) Seller has
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undertaken to ensure that the Facility has been registered in the MISO network model;
and (v) the Facility has operated at a generation level acceptable to the Interconnection
Provider, without experiencing any abnormal or unsafe operating conditions on any
interconnected system
(F) Seller has made all arrangements and executed all agreements
required to deliver the Renewable Energy from the Facility to the Point of Delivery in
accordance with the provisions of this PPA;
(G) all arrangements for the supply of required electric services to the
Facility, including the supply of turbine unit start-up and shutdown power and energy,
House Power and maintenance power, have been completed by Seller separate from
this PPA, are in effect and are available for the supply of such electric services to the
Facility;
(H) the security arrangements meeting the requirements of Article 11
have been established;
(I) certificates of insurance evidencing the coverages required by
Article 16 have been obtained and submitted to NSP; and
(J) Seller has submitted to NSP a certificate of an officer of Seller
familiar with the Facility after due inquiry stating that all permits, consents, licenses,
approvals and authorizations required to be obtained by Seller from any Governmental
Authority to construct or operate the Facility in compliance with Applicable Law and this
PPA have been obtained and are in full force and effect, and that Seller is in compliance
with the terms and conditions of this PPA in all material respects.
4.8 Test Ener,qy. Seller shall coordinate the production and delivery of Test
Energy with NSP. NSP shall cooperate in a timely manner with Seller to facilitate
Seller’s testing of the Facility necessary to satisfy the Conditions set forth in Section 4.7
and shall accept delivery of Test Energy produced by the Facility that has been installed
and interconnected in accordance with the Interconnection Agreement, and shall
purchase all such Test Energy delivered to the Point of Delivery at a payment rate of
$40/MWh.
4.9 Permits. Seller shall use commercially reasonable efforts to obtain, and
shall pay for, all applicable environmental and other permits, licenses and approvals
from any Governmental Authority required under applicable law for construction,
ownership, operation and maintenance of the Facility ("Applicable Permits"). NSP shall
have the right to inspect and obtain copies of all Applicable Permits held by Seller.
Seller will notify NSP of any written notice from any Governmental Authority to revoked
or suspend any Applicable Permit.
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Article 5 - Delivery and Metering
5.1
Delivery Arran,qements.
(A) Interconnection Point shall be as specified in the tnterconnection
Agreement for the project designated as H061 in the MISO Queue, which shall be a
point within the operational authority of MISO and is subject to the TEMT.
1. Seller shall be responsible for negotiating, entering into and
performing the Interconnection Agreement with the Interconnection Provider, MISO and
any other necessary Persons for design, installation and operation of the
interconnection Facilities necessary to designate the Facility as a Network Resource (or
Energy Resource if applicable under Section 5.1 (A)(2)) and permit delivery and
transformation of the Renewable Energy and Capacity on Seller’s side of the Point of
Delivery.
2. Upon receiving the results of the MISO Deliverability Study,
Seller shall interconnect utilizing "Network Resource Interconnection Service," as
defined in the Interconnection Agreement, if it passes the Deliverability Study, but if it
fails the Deliverability Study then Seller shall interconnect utilizing "Energy Resource
Interconnection Service," as defined in the Interconnection Agreement, at no cost to
NSP.
3. Seller shall provide MISO, the Interconnection Provider and
any applicable transmission owners written permission to release transmission study
results to NSP and to release other information concerning the interconnection
(including confidential "transmission information" as that term is used in the FERC
Standards of Conduct) to NSP in the form attached hereto as Exhibit J.
4. Seller shall post and maintain any and all security for
payment and performance if, when and for so long as required under the
Interconnection Agreement and any FCA. Any material default by Seller under the
Interconnection Agreement or any FCA shall constitute a material default of this PPA.
(B) The Point of Delivery shall be the high side of the step-up
transformer at the Point of Interconnection. Seller shall be responsible for all
interconnection, electric losses, transmission and ancillary service arrangements and
costs required to deliver, on a firm transmission service basis, the Renewable Energy
and Test Energy from the Facility to NSP at the Point of Delivery.
(C) NSP shall be responsible for all electric losses, transmission and
ancillary service arrangements and costs required to deliver such energy to points
beyond the Point of Delivery. If at any time during the Term, either NSP or the entity
owning the transmission facilities at the Point of Delivery ceases to be a member of
MISO or the facilities at the Point of Delivery cease to be subject to the TEMT, then the
parties shall cooperate in good faith to amend this PPA in a manner to facilitate the
delivery of the Renewable Energy from the Point of Delivery to NSP’s customers, at no
cost to Seller and the least possible cost to NSP. NSP may elect, at NSP’s sole option,
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whether to obtain and utilize firm transmission service or non-firm transmission service
for the delivery of Renewable Energy from the Point of Delivery.
5.2
Electric Meterinq Devices.
(A) The following provisions of this Section shall govern Electric
Metering Devices except to the extent the Interconnection Agreement modifies or
otherwise conflicts with these provisions.
(B) All Electric Metering Devices used to measure the Renewable
Energy made available to NSP by Seller under this PPA and to monitor and coordinate
operation of the Facility shall be owned, installed and maintained in accordance with the
Interconnection Agreement at no cost to NSP under this PPA. If Electric Metering
Devices are not installed at the Point of Delivery, meters or meter readings will be
adjusted to reflect losses from the Electric Metering Devices to the Point of Delivery
based initially on the amount specified by the manufacturer for expected losses. The
Operating Committee may revise this loss adjustment based on actual operating
experience. Seller shall provide, or arrange with the Interconnection Provider to
provide, NSP access to all Electric Metering Devices for all purposes necessary to
perform under this PPA and shall provide NSP the reasonable opportunity to be present
at any time any Electric Metering Devices are to be inspected and tested or adjusted in
accordance with the Interconnection Agreement. Seller shall provide NSP with all
authorizations necessary to have access to the Electric Metering Devices, including
obtaining any consent or other agreement from the Interconnection Provider necessary
to allow NSP such access.
(C) Either NSP or Seller may elect to install and maintain, at its own
expense, backup metering devices ("Back-Up Metering") in addition to the Electric
Metering Devices, which installation and maintenance shall be performed in a manner
acceptable to NSP. The installing Party, at its own expense, shall inspect and test
Back-Up Metering upon installation and at least annually thereafter. The installing Party
shall provide the other Party with reasonable advance notice of, and permit a
representative of the other Party to witness and verify, such inspections and tests;
provided, however, that such Party shall not unreasonably interfere with or disrupt the
activities of the installing Party and shall comply with all applicable safety standards.
Upon request by the other Party, the installing Party shall perform additional inspections
or tests of Back-Up Metering and shall permit a qualified representative of the other
Party to inspect or witness the testing of Back-Up Metering; provided, however, that the
other Party shall not unreasonably interfere with or disrupt the activities of the installing
Party and shall comply with all applicable safety standards. The actual expense of any
such requested additional inspection or testing shall be borne by the Party requesting
the test, unless, upon such inspection or testing, Back-Up Metering is found to register
inaccurately by more than the allowable limits established in this Article 5, in which
event the expense of the requested additional inspection or testing shall be borne by the
installing Party. If requested in writing, the installing Party shall provide copies of any
inspection or testing reports to the requesting Party.
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(D) f any Electric Metering Devices, or Back-Up Metering, are found to
be defective or inaccurate, they shall be adjusted, repaired, replaced or recalibrated as
near as practicable to a condition of zero error by the Party owning such defective or
inaccurate device and at that Party’s expense.
5.3 Adiustment for Inaccurate Meters. If an Electric Metering Device, or BackUp Metering, fails to register, or if the measurement made by an Electric Metering
Device, or Back-Up Metering, is found upon testing to be inaccurate by more than one
percent (1%), an adjustment shall be made correcting all measurements by the
inaccurate or defective Electric Metering Device, or Back-Up Metering, for both the
amount of the inaccuracy and the period of the inaccuracy, in the following manner:
(A) In the event that the Electric Metering Device is found to be
defective or inaccurate, the Parties shall use Back-Up Metering, if installed, to
determine the amount of such inaccuracy; provided, however, that Back-Up Metering
has been tested and maintained in accordance with the provisions of this Article 5. If
Back-Up Metering is installed on the low side of the step-up transformer, the Back-Up
Metering data shall be adjusted for losses in the same manner as the Electric Metering
Devices. In the event that Seller did not install Back-Up metering, or Back-Up Metering
is also found to be inaccurate by more than one percent (1.0%), the Parties shall use
the SCADA data collected at each Wind Turbine in the Facility for the period of
inaccuracy, adjusted as agreed by the Parties for losses occurring between Seller and
the Point of Delivery. If such SCADA data is incomplete or unavailable, the Parties shall
estimate the amount of the necessary adjustment on the basis of deliveries of
Renewable Energy from the Facility to the Point of Delivery during periods of similar
operating conditions when the Electric Metering Device was registering accurately. The
adjustment shall be made for the period during which inaccurate measurements were
made.
(B) In the event that the Parties cannot agree on the actual period
during which the inaccurate measurements were made, the period during which the
measurements are to be adjusted shall be the shorter of (i) the last one-half (1/2) of the
period from the last previous test of the Electric Metering Device to the test that found
the Electric Metering Device to be defective or inaccurate or (ii) the one hundred eighty
(180) Days immediately preceding the test that found the Electric Metering Device to be
defective or inaccurate.
(C) To the extent that the adjustment period covers a period of
deliveries for which payment has already been made by NSP, NSP shall use the
corrected measurements as determined in accordance with this Article 5 to recompute
the amount due for the period of the inaccuracy and shall subtract the previous
payments made by NSP for this period from such re-computed amount. If the
difference is a positive number, the difference shall be paid by NSP to Seller; if the
difference is a negative number, that difference shall be paid by Seller to NSP or, at the
discretion of NSP, may take the form of an offset to payments due Seller by NSP.
Payment of such difference by the owing Party shall be made not later than thirty (30)
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Days after the owing Party receives notice of the amount due, unless NSP elects
payment via an offset.
Article 6 - Conditions Precedent
6.1
NSP Conditions Precedent.
(A)
This PPA is subject to review and approval by the MPUC.
1. NSP shall file this PPA with the MPUC for approval no later
than thirty (30) Days following execution of this PPA by NSP and Seller and shall
request Negative Checkoff Approval. If NSP fails to apply for MPUC approval within 30
days following execution of this PPA by NSP and Seller, the Condition Precedent set
forth in this Section 6.1 (A) shall be deemed satisfied.
2. If Negative Checkoff Approval does not occur for any
reason, this PPA shall be subject to such consideration and approval as may be
determined by the MPUC, and the Parties agree to use commercially reasonable efforts
to seek such approval.
3. NSP shall use commercially reasonable efforts to obtain
MPUC approval of this PPA and NSP’s purchase hereunder as being reasonable and in
the public interest subject only to ongoing prudency review of NSP’s purchase
hereunder.
4. Notwithstanding any provisions of this PPA to the contrary,
in the event (i) the MPUC fails to act on the petition for MPUC approval prior to onehundred twenty (120) days following the Effective Date of this PPA, or (ii) the MPUC
affirmatively declines to approve this PPA or approves this PPA subject to conditions
that are unacceptable to NSP in its sole discretion, then NSP shall have the right to
terminate this PPA upon written notice to Seller on or before ten (10) days after onehundred twenty (120) days following the Effective Date of this PPA, without any further
financial or other obligation to Seller. In the event NSP has not terminated this PPA in
the timeframe allowed by this paragraph, the condition in this Section 6.1(A) shall be
deemed waived.
(B) This PPA is subject to Seller providing to NSP within one-hundred
twenty (120) days following MPUC approval, a fully executed and binding commitment
from an entity with actual access to Wind Turbines sufficient to satisfy Seller’s
obligations hereunder and stating that sufficient Wind Turbines are available and will be
supplied for installation as part of the Facility (the "Turbine Commitment"). NSP shall
have the right to terminate this PPA, without any further financial or other obligation to
Seller as a result of such termination, by notice to Seller at any time within thirty (30)
Days following Seller’s failure to obtain the Turbine Commitment within such time
period.
(C) This PPA is subject to Seller satisfying or waived all conditions
precedent set forth in Section 6.2 of this PPA on or before July 31, 2010. In the event
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Seller fails to satisfy or waive such conditions precedent on or before July 31, 2010,
NSP shall have the right to terminate this PPA, by providing written notice to Seller,
provided that NSP’s notice of termination shall be valid only if delivered prior to Seller
actually satisfying or waiving all conditions precedent.
6.2
Seller Conditions Precedent.
(A) Notwithstanding any provisions of this PPA to the contrary, Seller
shall have the right, unless waived by Seller in writing, to terminate this PPA, without
any further financial or other obligation to NSP as a result of such termination, by notice
to NSP on or before July 31, 20!0, as a consequence of the occurrence of any of the
following. Absent timely notice of termination by Seller as called for in this Section
6.2(A), this contingency shall be deemed waived and this PPA shall remain in full force
and effect thereafter.
Seller fails to obtain financing for the construction and
operation of the Facility.
Seller fails to obtain an executed Interconnection
Agreement.
3.
Seller fails to obtain a Turbine Commitment.
(B) Notwithstanding any provisions of this PPA to the contrary, in the
event (i) the MPUC fails to act on the petition for MPUC approval prior to one-hundred
twenty (120) days following the Effective Date of this PPA, or (ii) the MPUC affirmatively
declines to approve this PPA or approves this PPA subject to conditions that are
unacceptable to NSP in its sole discretion, then Seller shall have the right to terminate
this PPA upon written notice to NSP on or before ten (10) days following one-hundred
twenty (120) days following the Effective Date of this PPA, without any further financial
or other obligation to NSP. In the event Seller has not terminated this PPA in the
timeframe allowed by this paragraph, the condition in this Section 6.2(B) shall be
deemed waived.
Article 7 - Sale and Purchase of Renewable Energy
7.1 Sale and Purchase. Beginning on the Commercial Operation Date, Seller
shall generate from the Facility, deliver to the Point of Delivery and sell to NSP, at the
applicable price set forth in Section 8.1, all Renewable Energy generated by the Facility.
For the avoidance of doubt, except as otherwise expressly provided for herein, this PPA
shall not be construed to constitute a "take or pay" contract and NSP shall have no
obligation to pay for any energy that has not actually been generated by the Facility,
measured by the Electric Metering Devices, and delivered to NSP at the Point of
Delivery.
7.2 Committed Renewable Ener.qy. Committed Renewable Energy of onehundred twenty-five thousand megawatt hours (125,000 MWh) of Renewable Energy
delivered to NSP in the first Commercial Operation Year. Not more than thirty (30)
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Days following the end of the first Commercial Operation Year, Seller may
revise the Committed Renewable Energy based on actual experience during the first
Commercial Operation Year and the results of a wind study performed after the date
hereof. The revised Committed Renewable Energy amount shall be applicable for
the remainder of the Term and shall not be subject to subsequent revision.
1.1
Title and Risk of Loss. As between the Parties, Seller shall be
deemed to be in control of the Renewable Energy and Test Energy output from the
Facility up to and until delivery and receipt at the Point of Delivery, and NSP shall be
deemed to be in control of such energy from and after delivery and receipt at the
Point of Delivery. Title and risk of loss related to the Renewable Energy and Test
Energy shall transfer from Seller to NSP at the Point of Delivery.
1.2
Curtailment Production Losses.
(A)
NSP shall have the right to notify Seller, by telephonic
communication from the EMCC, to curtail the delivery of Renewable Energy to NSP
from the Facility and to the Point of Delivery, and Seller shall immediately comply
with such notification. NSP may provide such notification for any reason and in its
sole discretion. The Parties further acknowledge that there may be circumstances in
which MRO, MISO, the Interconnection Provider or a New Joint Transmission
Authority will direct Seller to curtail, reduce or suspend deliveries of Renewable
Energy from the Facility in accordance with Applicable Law, the TEMT or other tariffs
or agreements.
1.
If and to the extent such curtailment in accordance
with this Section 7.4(A) is due to (i) an Emergency, (ii) Force Majeure, (iii) failure of
Seller to maintain all permits or authorizations necessary to deliver to the Point of
Delivery, or (iv) the operation of Seller's system protection equipment or any
malfunction of Seller's equipment that causes the Facility to be disconnected from
the system, such curtailments shall be deemed to be "Non-Compensable
Interruptions" and Seller shall not be entitled to any compensation for any lost
production of Renewable Energy and Test Energy.
2.
In the event that a curtailment is directed by NSP or
another Person with authority in accordance with this Section 7.4(A) or NSP refuses
or fails to accept delivery of Renewable Energy at the Point of Delivery for reasons
other than Non-Compensable Interruptions, including [Begin Trade Secret (i) lack
of available transmission capacity at the time of the curtailment, (ii) lack of
transmission service, (iii) low load conditions that require curtailment of generation
for system stability purposes, or (iv) transmission loading relief or comparable
procedures implemented under the TEMT (hereinafter a "Voluntary Curtailment"),
End Trade Secret] and the Facility was otherwise capable of providing and
delivering Renewable Energy to the Point of Delivery, then Seller shall be paid
compensation pursuant to Sections 7.4(B), (C), (D) and (E).
Upon the occurrence of a Voluntary Curtailment, Seller shall calculate the amount of
Renewable Energy that it would have produced and delivered to NSP at the Point of
Delivery but for the Voluntary Curtailment, using the manufacturer's
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power curve for the Wind Turbines (adjusted for actual operating experience at the
Facility, as necessary) and the recorded wind speed at the Facility for each hour during
the duration of the Voluntary Curtailment. For each hour during a Voluntary
Curtailment, the lost production shall be based on the actual availability of all Wind
Turbines during the hour, excluding any Wind Turbines unavailable for outages and
reflecting any other operating restrictions applicable to any Wind Turbines during the
hour (the "Available Capacity"). The Available Capacity shall be multiplied by the
product of hourly average wind resource as measured at the Site and the power curve
specified by the manufacturer for each applicable Wind Turbine and summed to equal
the lost production of the Facility for each hour or partial hour of Voluntary Curtailment.
Any actual Renewable Energy produced by the Facility and delivered to the Point of
Delivery during the applicable hour shall be subtracted from the estimated lost
production for that hour to obtain the amount in MWh of lost production experienced by
Seller for each hour or partial hour of Voluntary Curtailment. The Parties may revise the
calculation of Available Capacity and lost production based on changes in the actual
operational characteristics of the Facility and other circumstances.
1. The Parties shall use reasonable efforts to determine the
quantity of Renewable Energy that would have been produced by the Facility and
delivered to the Point of Delivery in the absence of the Voluntary Curtailment.
2. Seller shall install sufficient measuring equipment at the
Facility to collect data to reasonably determine the amount of Facility generation subject
to a Voluntary Curtailment. Seller shall install sufficient meteorological towers around
the Site or in conjunction with the Wind Turbines to provide the capability of measuring
and recording representative wind data twenty-four (24) hours per day, which wind data
shall be used to calculate any amounts due Seller under paragraph (B) above.
(C) Upon the occurrence of a Voluntary Curtailment, NSP shall be
obligated to pay Seller an amount equal to the sum of (i) the Renewable Energy
Payment Rate that Seller would have received under this PPA for the Renewable
Energy, measured in megawatt-hours, that Seller would have otherwise produced and
delivered to the Point of Delivery but for the Voluntary Curtailment, plus (ii) if the Facility
has qualified for PTCs, the amount of any Tax Benefits that Seller would have been
entitled to receive for such production had such production not been so curtailed, but
that Seller did not receive. The Tax Benefit payment shall be incorporated into the
payment calculation only to the extent PTCs would otherwise have been available to
Seller for the lost production, as demonstrated on Seller’s invoices provided pursuant to
Section 7.4(D). ).
(D) Seller shall invoice NSP for amounts due as a result of Voluntary
Curtailments together with its regular monthly invoices for the applicable month. Seller
shall include information with the invoice documenting (i) the nature and duration of the
Voluntary Curtailment, (ii) meteorological data gathered at the Site for the period during
such Voluntary Curtailment used to calculate the lost production amounts, (iii) if Tax
Benefits are included on such invoice, evidence that Seller would have otherwise been
qualified to receive such payments but for the lost production due to a Voluntary
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Curtailment, and (iv) the computation of amounts due under this Section 7.4 for the
invoiced lost production, all in a format provided by NSP. NSP shall notify Seller within
thirty (30) Days of receipt if NSP believes that the circumstances described do not
constitute a Voluntary Curtailment and the reason for that conclusion. If the Parties
cannot resolve the difference of opinion by negotiation, either Party may utilize the
dispute resolution procedures in this PPA.
(E) Seller shall install, or arrange for the Interconnection Provider to
install pursuant to the Interconnection Agreement, equipment necessary to disconnect
the Facility. Seller and NSP shall each use commercially reasonable efforts to develop
a mutually acceptable procedure for NSP to notify Seller of curtailments.
Article 8 - Payment Calculations
8.1 Enerqy Payment Rate. Except as set forth in Sections 8. I(A), 8. I(B) and
8.2, commencing on the Commercial Operation Date of the Facility, NSP shall pay
Seller for Renewable Energy delivered to NSP by Seller to the Point of Delivery in a
Commercial Operation Year up to one hundred fifteen percent (115%) of the Committed
Renewable Energy at an energy payment rate equal to the amounts set forth in
Exhibit A-1 (the "Renewable Energy Payment Rate").. In the event that the Renewable
Energy delivered by Seller to NSP at the Point of Delivery in any Commercial Operation
Year exceeds one hundred fifteen percent (115%) of the Committed Renewable
Energy, NSP shall have the option to either a) pay Seller the Renewable Energy
Payment Rate for all Renewable Energy delivered by Seller to NSP at the Point of
Delivery in excess of one hundred fifteen percent (115%) of the Committed Renewable
Energy ("Excess Renewable Energy") for such Commercial Operation Year period or b)
elect not to accept any Excess Renewable Energy. If NSP elects not to accept Excess
Renewable Energy, Seller shall have the right to sell such Excess Renewable Energy to
another buyer until the end of the applicable Commercial Operation Year and the term
of such transaction shall not be longer than the remainder of such Commercial
Operation Year after which the Parties’ obligations shall resume pursuant to this PPA.
Seller shall notify NSP upon Seller’s delivery of a quantify of Renewable Energy
hereunder that exceeds one hundred ten percent (110%) of Committed Renewable
Energy for the current Commercial Operation Year period. NSP shall elect within 10
Business Days of Seller’s notice to either accept or decline any Excess Renewable
Energy Seller may produce during the remainder of the applicable Commercial
Operation Year. By way of example only, if the total Committed Renewable Energy set
forth in Section 7.2 is 125,000 MWh. In the event Seller’s deliveries to NSP of
Committed Renewable Energy exceeds 137,500 MWh (110%) in any Commercial
Operation Year, Seller shall notify NSP of the potential for Excess Renewable Energy
during the Commercial Operation Year. Within 10 Business Days of receiving Seller’s
notice, NSP will either accept or decline any Excess Renewable Energy that may arise
during the remaining applicable Commercial Operation Year. In the event NSP does
not accept Excess Renewable Energy in accordance with this Section 8.1, NSP shall
use commercially reasonable efforts pursuant to Applicable Laws to assist Seller or
Seller’s customer with securing transmission service, which shall be at Seller’s expense.
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(A) Seller shall be compensated pursuant to Section 7.4 for any
Renewable Energy that could not be delivered to the Point of Delivery as a result of a
Voluntary Curtailment.
8.2
Non-C-BED Rate.
(A) Seller and NSP acknowledge that they are each relying upon the
confirmation from the Minnesota Office of Energy Security that the Facility qualifies as a
C-BED Project and the MPUC approval of this PPA. The determination of C-BED
Eligibility pursuant to the confirmation of the Minnesota Office of Energy Security and
the MPUC approval shall be binding upon the Parties.
(B) During any month in which Seller fails to maintain C-BED Eligibility,
as determined by the MPUC or any governmental authority with jurisdiction, Seller shall
be entitled to payment of the Non-C-BED Rate as defined in EXHIBIT A-1 for
Renewable Energy delivered to NSP until the conclusion of the month after Seller
restores C-BED Eligibility or the termination of this PPA. Notwithstanding any provision
in this PPA to the contrary, Seller’s failure to maintain C-BED Eligibility from and after
MPUC approval of this PPA shall not constitute an event of default capable of leading to
termination of this PPA by NSP. NSP’s sole remedy for failure to maintain C-BED
Eligibility shall be the adjustment to the Renewable Energy Rate set forth herein.
Article 9 - Billing and Payment
9.1 Billin,q Invoices. The monthly billing period shall be the calendar month.
No later than fifteen (15) Business Days after the end of each calendar month, Seller
shall provide to NSP, by first-class mail, an invoice for the amount due Seller by NSP for
the services provided by Seller and purchased by NSP, under this PPA, during the
previous calendar month billing period. Seller’s invoice will show all billing parameters,
rates and factors and any other data reasonably pertinent to the calculation of monthly
payments due to Seller.
9.2 Reactive Power Service Compensation. The Parties recognize that,
although Seller’s obligation to provide reactive power service from the Facility to
Interconnection Provider’s System and any compensation Seller receives for such
reactive power service are to be set forth in a free-standing agreement separate from
this PPA, the compensation that Seller receives from NSP under this PPA includes full
compensation for the fixed and variable costs associated with providing such reactive
power service. Therefore, Seller shall credit NSP monthly, as a separate line item
reduction to Seller’s invoice, for any compensation that Seller receives, apart from that
provided under this PPA, for the provision of reactive power service from the Facility
during the Term of this PPA. Such credit shall differentiate, if possible, between
compensation provided for the fixed costs of providing reactive power service and
compensation provided for the variable costs of providing reactive power service.
9.3 P_#.yments. Unless otherwise specified herein, payments due under this
PPA shall be due and payable by check or by electronic funds transfer, as designated
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by the owed Party, on or before the fifteenth (15th) Business Day following receipt of the
billing invoice. Remittances received by mail will be considered to have been paid when
due if the postmark indicates the payment was mailed on or before the fifteenth (15th)
Business Day following receipt of the billing invoice. If the amount due is not paid on or
before the due date, a late payment charge shall be applied to the unpaid balance and
shall be added to the next billing statement. Such late payment charge shall be
calculated based on an annual interest rate equal to one hundred twenty-five percent
(125%) of the LIBOR three (3) month rate published on the date of the invoice in The
Wall Street Journal (or, if The Wall Street Journal is not published on that Day, the next
succeeding date of publication). If the due date occurs on a Day that is not a Business
Day, the late payment charge shall begin to accrue on the next succeeding Business
Day.
9.4 Billin.q Disputes. Either Party may dispute invoiced amounts, but shall pay
to the other Party at least the undisputed portion of invoiced amounts on or before the
invoice due date. To resolve any billing dispute, the Parties shall use the procedures
set forth in Section 13.10. When the billing dispute is resolved, the Party owing shall
pay the amount owed within five (5) Business Days of the date of such resolution, with
late payment interest charges calculated on the amount owed in accordance with the
provisions of Section 9.3. NSP at any time may offset against any and all amounts that
may be due and owed to Seller under this PPA, any and all undisputed amounts,
including damages and other payments, that are owed by Seller to NSP pursuant to this
PPA. Undisputed and non-offset portions of amounts invoiced under this PPA shall be
paid on or before the due date or shall be subject to the late payment interest charges
set forth in Section 9.3.
Article 10 - Operations and Maintenance
10.1 Facility Operation. Seller shall comply with all Requirements of Law and
Good Utility Practice in the operation of the Facility as well as the requirements of
MISO, MRO and any New Joint Transmission Authority. Seller shall staff, control and
operate the Facility consistent at all times with Good Utility Practices and the Operating
Procedures developed pursuant to Section 10.4. Personnel capable of starting,
operating and stopping the Facility shall be continuously available either at the Facility
or capable of remotely starting, operating and stopping the Facility within ten (10)
minutes, and capable of being at the Facility with no more than sixty (60) minutes
notice. In all cases, personnel capable of starting, operating and stopping the Facility
shall be continuously reachable by phone or pager.
10.2 Outa.qe and Performance Reportin.q.
(A) Seller shall comply with all current NSP, NERC and MRO
generating unit outage reporting requirements, as they may be revised from time to
time, and as they apply to the Facility. Seller shall comply with applicable MISO
reporting requirements unit availability, turbine locations, etc. as they may be revised
from time to time.
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(B) When Forced Outages affecting more than twenty percent (20%) of
the Facility occur, Seller shall notify the EMCC of the existence, nature and expected
duration of the Forced Outage as soon as practical, but in no event later than thirty (30)
minutes after the Forced Outage occurs. Seller shall immediately inform the EMCC of
changes in the expected duration of the Forced Outage unless relieved of this obligation
by the EMCC for the duration of each Forced Outage.
(C) Commencing upon COD and continuing through the Term, Seller
shall electronically provide the energy production from the Facility in two (2) minute
intervals ("Production Data") to NSP and allow NSP to disclose publicly this Production
Data when requested.
10.3 Capacity Resource Capability Verification. Seller shall cooperate
reasonably to assist NSP in maximizing (pursuant to the terms and conditions of this
PPA) and determining the amount of Capacity Resource. Seller shall collect data and
perform tests and calculations in compliance with Module E of the TEMT and MISO
Business Practices Manual for Resource Adequacy, as they change from time to time.
All required testing shall be conducted at Seller’s expense.
10.4 Operatin,q Committee and Operating Procedures.
(A) NSP and Seller shall each appoint one representative and one
alternate representative to act in matters relating to the Parties’ performance obligations
under this PPA and to develop operating arrangements for the generation, delivery and
receipt of Renewable Energy hereunder. Such representatives shall constitute the
Operating Committee, and shall be specified as Exhibit C. The Parties shall notify each
other in writing of such appointments and any changes thereto. The Operating
Committee shall have no authority to modify the terms or conditions of this PPA.
(B) Prior to the Commercial Operation Date, the Operating Committee
shall develop mutually agreeable written Operating Procedures, which shall include
method of day-to-day communications; metering, telemetering, telecommunications and
data acquisition procedures; key personnel list for applicable NSP and Seller operating
centers; operations and maintenance scheduling and reporting; Renewable Energy
reports; unit operations log; and such other matters as may be mutually agreed upon by
the Parties.
10.5 Access to Facility. Authorized representatives of NSP shall at all
reasonable times, including weekends and nights, and with reasonable prior notice,
have access to the Facility to read meters and to perform all inspections, maintenance,
service and operational reviews in accordance with this PPA as may be appropriate to
facilitate the performance of this PPA. While at the Facility, such representatives shall
observe such reasonable safety precautions as may be required by Seller and shall
conduct themselves in a manner that will not interfere with the operation of the Facility.
10.6 Reliability Standards. Seller shall operate the Facility in a manner that
complies with all national and regional reliability standards, including standards set by,
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NERC, the FERC, MRO and the MPUC, or any successor agencies setting reliability
standards for the operation of generation facilities. To the extent that Seller or the
Facility contributes in whole or in part to actions that result in monetary penalties being
assessed to NSP by NERC or any successor agency for lack of compliance with
reliability standards, Seller shall reimburse NSP for its share of such monetary
penalties.
10.7 Renewable Enerqy Credits. The Parties acknowledge that existing
legislation creates and future legislation or regulation may create value in the
ownership, use or allocation of RECs. To the full extent allowed by such law or
regulation, NSP shall own or be entitled to claim all RECs to the extent such credits may
exist during the Term (including RECs generated in connection with Test Energy). To
the extent necessary, and at NSP’s expense, Seller shall assign to NSP all rights, title
and authority for NSP to register, own, hold and manage such credits in NSP’s own
name and to NSP’s account, including any rights associated with any renewable energy
information or tracking system that may be established with regard to monitoring,
tracking, certifying or trading such credits. Upon the request of NSP from time to time,
at no cost to Seller (i) Seller shall deliver or cause to be delivered to NSP such
attestations/certifications of all Renewable Energy Credits and (ii) Seller shall cooperate
in connection with NSP’s registration and certification of Renewable Energy Credits.
During periods when NSP elects to not receive Excess Renewable Energy pursuant to
Section 8.1, Seller shall retain any RECs associated with any Excess Renewable
Energy not delivered to NSP.
10.8 Availability Reporting. Seller shall be responsible for providing accurate
and timely updates on the current availability of the Facility to the NSP’s EMCC as
outlined in the Operating Procedures.
10.9 Peak Production Availability. During any Business Day of an On-Peak
Month, Seller, while complying with Good Utility Practices, shall use commercially
reasonable efforts to (i) maximize the amount of Renewable Energy produced by the
Facility and (ii) minimize the extent and duration of Forced Outages, provided that Seller
may comply with scheduled and unscheduled maintenance requirements of its Wind
Turbine Supply Agreement.
10.10 Maintenance Schedule. Maintenance schedule requirements shall be
communicated in the Operating Procedures.
Article 11 - Security for Performance
11.1 Security Fund.
(A) Beginning one-hundred-twenty (120) days following MPUC
approval, Seller shall establish, fund and maintain a Security Fund, pursuant to the
provisions of this Article 11, which shall be available to pay any amount due NSP
pursuant to this PPA and to provide NSP security that Seller will construct the Facility to
meet the Construction Milestones. The Security Fund shall also provide security to
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NSP to cover damages, including Replacement Energy Costs, should the Facility fail to
achieve the Commercial Operation Date or otherwise not operate in accordance with
this PPA. In the event that Seller establishes the Security Fund prior to the satisfaction
of all conditions precedent set forth in Section 6.2 of this PPA and Seller subsequently
terminates this PPA in accordance with Section 6.2 of this PPA, then NSP shall refund
all amounts placed in the Security Fund prior to such termination.
(B) The Security Fund shall be in an amount equal to $2,925,000 and
shall, subject to the mutual agreement of the Parties, be comprised either of a letter of
credit as described in Section 11.1 (E)(1), an escrow account of the entire amount as
described in Section 11.1(E)(2), a phased-in escrow account as described in
Section 11.1(E)(3), or a Guaranty as described in Section 11.1(E)(4).
(C) In the event that NSP makes a draw on the Security Fund, Seller
shall be required to replenish the Security Fund only to the extent such draw was in
respect to damages that are excluded from the damages cap as described in
Sections 12.6(A) through 12.6(F). Any required replenishment shall be made within
fifteen (15) Business Days after any draw on the Security Fund by NSP, and Seller shall
maintain the Security Fund at the required level throughout the remainder of the Term.
(D) In addition to any other remedy available to it, NSP may, before or
after termination of this PPA, draw from the Security Fund such amounts as are
necessary to recover amounts NSP is owed pursuant to this PPA, including any
damages due to NSP and any amounts for which NSP is entitled to indemnification
under this PPA. NSP may, in its sole discretion, draw all or any part of such amounts
due to it from any form of security to the extent available pursuant to this Section 11.1,
and from all such forms, and in any sequence NSP may select. Any failure to draw
upon the Security Fund or other security for any damages or other amounts due to NSP
shall not prejudice NSP’s rights to recover such damages or amounts in any other
manner.
(E) The Security Fund shall be maintained at Seller’s expense. If Seller
provides the Security Fund using one or more instruments of the types set forth in
Section 11.1(E)(1), (E)(2) or (E)(3), such Security Fund shall be established and funded
by Seller in a financial institution or company that is a major United States commercial
bank or a foreign bank with a United States branch office, with a senior unsecured bond
rating, unenhanced by third party support, equivalent to A-/A3 or better as determined
by all rating agencies that have provided such a rating (and if ratings from both
Standard & Poor’s and Moody’s Investor Services, Inc. are not available, equivalent
ratings from alternative rating sources, if any, shatl be subject to the review and
approval of NSP ("Issuer"). In addition, if such senior unsecured bond rating,
unenhanced by third party support, of Issuer is equivalent to A-/A3, Issuer must not be
on credit watch or negative outlook by any rating agency. The Security Fund shall be
acceptable to NSP and shall be in the form of one or more of the following instruments
described below. Except in the event that Seller elects to fund the Security Fund
pursuant to Section 11.1 (E)(3), in which case the escrow account authorized by Section
11.1(E)(3) shall remain in effect throughout the Term, Seller may change the form of the
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Security Fund at any time and from time to time upon reasonable prior written notice, in
any event not less than thirty (30) Days, to NSP, but the Security Fund must at all times
be comprised of one or any combination of the following:
1. Letter of Credit. An irrevocable standby letter of credit,
substantially in the form and substance of Exhibit G attached hereto, from an Issuer
acceptable to NSP. Security provided in this form shall be consistent with this PPA and
include a provision for at least thirty (30) Days advance written notice to NSP of any
non-renewal, expiration or earlier termination of the security so as to allow NSP
sufficient time to exercise its rights under said security if Seller fails to extend or replace
the security. The form of such security must meet NSP’s requirements to ensure that
claims or draw-downs can be made unilaterally by NSP in accordance with the terms of
this PPA. Such security must be issued for a minimum term of three hundred sixty
(360) Days. Seller shall cause the renewal or extension of the security for additional
consecutive terms of three hundred sixty (360) Days or more (or, if shorter, the
remainder of the Term of this PPA) no later than thirty (30) Days prior to each expiration
date of the security. If the security is not renewed or extended as required herein, NSP
shall have the right to draw immediately upon the security and to place the amounts so
drawn, at Seller’s cost and with Seller’s funds, in an interest bearing escrow account in
accordance with Section 11.1(E)(2), until and unless Seller provides a substitute form of
such security meeting the requirements of this Article 11. Security in the form of an
irrevocable standby letter of credit shall be governed by the Uniform Customs and
Practice for Documentary Credits (2007 Revision), International Chamber of Commerce
Publication No. 600 (the "UCP"), except to the extent that the terms hereof are
inconsistent with the provisions of the UCP, including Articles 14.b. and 36 of the UCP,
in which case the terms of the Letter of Credit shall govern. The following provisions
shall be included in any letter of credit provided as or as part of the Security Fund:
"With respect to Article 14.b. of the UCP, the Issuing Bank shall have a
reasonable amount of time, not to exceed three (3) banking Days following the
date of its receipt of documents from the beneficiary, to examine the documents
and determine whether to take up or refuse the documents and to inform the
beneficiary accordingly.
In the event of an Act of God, riot, civil commotion, insurrection, war or any other
cause beyond our control that interrupts our business and causes the place for
presentation of this Letter of Credit to be closed for business on the last Day for
presentation, the expiry date of this Letter of Credit will be automatically
extended without amendment to a date thirty (30) calendar Days after the place
for presentation reopens for business."
2. Escrow. United States currency, in which NSP holds a first
and exclusive perfected security interest, deposited with Issuer, either: (i) in an interest
bearing escrow account and format acceptable to NSP under which NSP is designated
as beneficiary with sole authority to withdraw cash from the account or otherwise
access the security; or (ii) held in trust by Issuer as escrow agent with instructions to
pay claims made by NSP pursuant to this PPA, such instructions to be in a form
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satisfactory to NSP. Security provided in this form shall include a requirement for
immediate notice to NSP from Issuer and Seller in the event that the sums held as
security in the account or trust do not at any time meet the required level for the
Security Fund as set forth in this Section 11.1. Funds held in the account may be
deposited in a money-market fund, short-term treasury obligations, investment-grade
commercial paper and other liquid investment-grade investments with maturities of
three (3) months or less, with all investment income thereon to be taxable to, and to
accrue for the benefit of, Seller. After the Commercial Operation Date is achieved,
annual account sweeps for recovery of interest earned by the Security Fund shall be
allowed by Seller. At such times as the balance in the escrow account exceeds the
amount of Seller’s obligation to provide security hereunder, NSP shall remit to Seller on
demand any excess in the escrow account above Seller’s obligations.
3. Phase In Escrow. Seller may elect to phase in the interest
bearing escrow account described in Section 11.1(E)(2) as follows:
(1)
Commencing no later than sixty (60) Days after MPUC
approval of this PPA, Seller shall deposit $500 per MW per
month until COD. In the event Seller does not commence a
phase-in escrow at the time required by this paragraph, then
Seller waives the right to use the phase-in escrow and shall
provide Security in accordance with Section 11.1 (A).
(2)
Commencing upon the Commercial Operation Date and for
each billing month thereafter, Seller shall deposit into the
escrow account an amount equal to $1000 per MW per
month until such time as the total escrow account equals
$2,925,000. At NSP’s sole option, such amount may be
deducted directly from Seller’s invoice for energy and
deposited directly in the escrow account.
(3)
The phase-in escrow account established for purposes of
this Section 11.1(E)(3) shall meet all of the requirements of
Section 11.1(E)(2), except that interest earned by the escrow
account shall be retained in escrow and shall be deemed to
become part of the Security Fund.
(4)
At the end of the Term any remaining balance of the escrow
account (after all deductions for any damages or other
allowed charges made by NSP) shall be released to Seller.
4. Guaranty. A Guaranty, in substantially the form and
substance attached as Exhibit I of this PPA (the "Guaranty"), from a guarantor
acceptable to NSP in its sole discretion with a senior unsecured bond rating, as to which
no unaffiliated third party enhancement or debt support is noted in the applicable rating
agency’s report, equivalent to A-/A3 or better as determined by all rating agencies that
have provided such a rating (and if ratings from both Standard & Poor’s and Moody’s
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Investor Services, Inc. are not available, equivalent ratings from alternate rating
sources, if any, shall be subject to the review and approval of NSP) (the "Guarantor").
In addition, if such senior unsecured bond rating, as to which no unaffiliated third party
enhancement or debt support is noted in the applicable rating agency’s report, of the
Guarantor is equivalent to A-/A3, the Guarantor must not be on credit watch or negative
outlook by any rating agency.
(F) NSP may reevaluate from time to time the value of any Security
posted by Seller to determine, in a commercially reasonable manner, whether (i) it
continues to satisfy the requirements in this PPA or (ii) there has been a material
adverse change in the creditworthiness of the Issuer or Guarantor such that with the
passage of time, it will no longer satisfy the requirements of this PPA. If NSP
determines, in a commercially reasonable manner, that there has been an event that
has caused, or will cause, with the passage of time, Seller’s Security to no longer satisfy
the requirements of this PPA, then NSP shall provide prompt written notice to Seller of
such event and after receipt of such notice, Seller shall be required to provide alterative
Security that satisfies the terms of this PPA.
(G) Promptly following the end of the Term and the completion of all of
Seller’s obligations under this PPA, NSP shall release the Security Fund (if applicable)
to Seller.
(H) Seller shall reimburse NSP for the incremental direct expenses
(including the reasonable fees and expenses of counsel) incurred by NSP in connection
with the preparation, negotiation, execution and/or release of any security instruments,
and other related documents, used by Seller to establish and maintain the Security
Fund pursuant to Seller’s obligations under this Section 11.1.
11.2 Additional Security.
(A) Prior to the Commercial Operation Date, Seller or NSP, as the case
may be, shall execute and record, as appropriate, separate agreements, documents or
instruments under which Seller will provide NSP, in a form reasonably acceptable to
NSP and the Facility Lender, a fully perfected subordinated security interest or
mortgage lien (collectively, the "Subordinated Mortgage") in the Facility and in any and
all real and personal property rights, contractual rights or other rights that Seller
acquires in order to construct or operate the Facility. The Subordinated Mortgage shall
be given to secure Seller’s continuing performance and any amounts that may be owed
by Seller to NSP pursuant to this PPA, including any damages excluded from the
limitation on Seller’s liability for the limited purposes set forth in Sections 12.6(A)
through (F). Seller agrees, and shall cause the Facility Lender to agree and the
Financing Documents to provide (i) that the lien of such Subordinated Mortgage shall be
subordinate to the lien of the Facility Lender and (ii) that, as long as NSP is not in
material default of its obligations under this PPA, the Facility and any party taking
possession of the Facility through the exercise of the Facility Lender’s rights and
remedies shall remain subject to the terms of this PPA (including the obligation to
reinstate the Subordinated Mortgage, subject to the terms of this Section 11.2, following
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any foreclosure by the Facility Lender) and shall assume all of Seller’s obligations
hereunder, both prospective and accrued, including the obligation to cure any thenexisting defaults capable of cure by performance or the payment of money damages.
The collateral secured by the Subordinated Mortgage shall not include the pledge,
assignment or other interest in any stock or ownership interest in Seller; provided,
however, that Seller shall not pledge or assign, or cause or permit to be pledged or
assigned, any stock or ownership interest in Seller as collateral to any party other than
the Facility Lender without the prior written consent of NSP.
(B) NSP agrees to cooperate reasonably with Seller and diligently
negotiate in good faith, at Seller’s request, to establish the form of these agreements
and to execute and deliver such agreements as reasonably necessary to enable Seller
to meet the Construction Milestones. The Parties shall confirm, define and perfect such
Subordinated Mortgage by executing, filing and recording, at the expense of Seller, the
Subordinated Mortgage. In addition, Seller agrees to execute and file such Uniform
Commercial Code financing statements and to take such further action and execute
such further instruments as shall reasonably be required by NSP to confirm and
continue the validity, priority and perfection of the Subordinated Mortgage. The granting
of the Subordinated Mortgage shall not be to the exclusion of, or be construed to limit,
the amount of any further claims, causes of action or other rights accruing to NSP by
reason of any breach or default by Seller under this PPA or the early termination of this
PPA as provided for herein. The Subordinated Mortgage shall be discharged and
released, and NSP shall take any steps reasonably required by Seller to effect and
record such discharge and release, upon the expiration of the Term of this PPA,
including any extension of the Term, and satisfaction by Seller of all obligations
hereunder. Seller shall reimburse NSP for the incremental direct expenses (including
the reasonable fees and expenses of counsel) incurred by NSP in connection with the
preparation, negotiation, execution and/or discharge and release of the Subordinated
Mortgage and any other documents evidencing the Subordinated Mortgage.
(C) The Subordinated Mortgage shall provide that if NSP acts to obtain
title to the Facility pursuant to the interests provided by Seller pursuant to
Section 11.2(A), Seller shall take all steps necessary to transfer all permits and licenses
necessary to operate the Facility to NSP and shall diligently pursue and cooperate in
these transfers.
Article 12 - Default and Remedies
12.1
Events of Default of Seller.
(A) Any of the following shall constitute an Event of Default of Seller
upon its occurrence and no cure period shall be applicable:
1.
Seller’s dissolution or liquidation
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2. Seller’s assignment of this PPA or any of Seller’s rights
hereunder for the benefit of creditors (except for an assignment to the Facility Lender as
security under the Financing Documents as permitted by this PPA);
3. Seller’s filing of a petition in voluntary bankruptcy or
insolvency or for reorganization or arrangement under the bankruptcy laws of the United
States or under any insolvency act of any state, or Seller voluntarily taking advantage of
any such law or act by answer or otherwise;
4. The sale by Seller to a third party, or diversion by Seller for
any use, of Renewable Energy committed to NSP by Seller other than in mitigation of
damages for any breach by NSP of this PPA or during periods when NSP elects to not
receive Excess Renewable Energy pursuant to Section 8.1;
5. Seller’s actual fraud, waste, tampering with NSP-owned
facilities or other material intentional misrepresentation or misconduct in connection with
this PPA or the operation of the Facility; or
(B) Any of the following shall constitute an Event of Default of Seller
upon its occurrence but shall be subject to cure within thirty (30) Days after the date of
written notice from NSP to Seller and the Facility Lender as provided for in
Sections 12.2 and 13.1; provided however, upon the Event of Default of Seller that can
only be cured by Seller’s performance to cure the Event of Default, the cure period shall
be extended beyond the thirty (30) day notice period for a maximum additional amount
of sixty (60) additional days, so long as Seller is using commercially reasonable efforts
to cure the Event of Default and provides NSP with progress reports on its efforts to
cure such Event of Default and the projected date when such Event of Default will be
cured.
1. Seller’s failure to meet any of the Construction Milestones,
except the Commercial Operation Milestone;
2. Seller’s failure to establish and maintain the funding of the
Security Fund in accordance with Article 11;
Seller’s Abandonment of construction or operation of the
Facility;
4. Seller’s failure to maintain in effect any agreements required
to deliver the Renewable Energy to the Point of Delivery, including the Interconnection
Agreement;
Seller’s failure to comply with the requirements of
Section 11.2; or
6. Seller’s failure to comply with any other material obligation
under this PPA that would result in a material adverse impact on NSP.
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(C) Seller’s failure to meet the Commercial Operation Milestone shall
constitute an Event of Default of Seller upon its occurrence but shall be subject to cure
within ninety (90) Days after the date of written notice from NSP to Seller and the
Facility Lender as provided for in Sections 12.2 and 13.1; provided, however, that Seller
shall have an additional ninety (90) Day period to achieve the Commercial Operation
Date; provided, however, that, on or before the expiration of the initial ninety (90) Day
period, an independent engineer, mutually agreed to by the Parties, retained by NSP
and paid for by Seller, provides a written opinion to NSP stating that Seller’s plan for
achieving the Commercial Operation Date is reasonably achievable within such
additional ninety (90) Day cure period. This provision would allow for a total cure period
of one hundred eighty (180) Days if all conditions of this Section 12.1 (C) are met.
Subject to the limitation on damages set forth in Section 12.6, Delay Damages under
Section !2.4(A) shall continue accruing until the occurrence of one of the following
events: (i) the Commercial Operation Date is achieved or (ii) this PPA is terminated.
(D) Any of the following shall constitute an Event of Default of Seller
upon its occurrence but shall be subject to cure within sixty (60) Days after the date of
written notice from NSP to Seller and the Facility Lender as provided for in
Sections 12.2 and 13.1; provided however, upon the Event of Default of Seller that can
only be cured by Seller’s performance to cure the Event of Default, the cure period shall
be extended beyond the sixty (60) day notice period for a maximum additional amount
of sixty (60) additional days, so long as Seller is using commercially reasonable efforts
to cure the Event of Default and provides NSP with progress reports on its efforts to
cure such Event of Default and the projected date when such Event of Default will be
cured.
1. Seller’s failure to meet the peak production availability
requirements of Section 10.9;
2.
Seller’s failure to make any payment required under this
PPA.
3.
Seller’s assignment of this PPA, any direct or indirect change
of control of Seller or Seller’s sale or transfer of its interest, or any part thereof, in the
Facility, except as permitted in accordance with Article 19;
4. Any representation or warranty made by Seller in this PPA
shall prove to have been false or misleading in any material respect when made or
ceases to remain true during the Term if such cessation would reasonably be expected
to result in a material adverse impact on NSP;
5. The filing of an involuntary case in bankruptcy or any
proceeding under any other insolvency law against Seller as debtor or its parent or any
other Affiliate that could materially impact Seller’s ability to perform its obligations
hereunder; provided, however, that Seller does not obtain a stay or dismissal of the
filing within the cure period; or
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6. Seller’s failure after the twenty-fourth (24th) full month
following the Commercial Operation Date, to deliver not less than eighty percent (80%)
of the Committed Renewable Energy from the Facility on a twelve (12) month rolling
average basis; provided, however, that to the extent such failure is attributable to the
lack of wind resource, Voluntary Curtailment, Non-Compensable Interruptions, NSP not
accepting Excess Renewable Energy pursuant to Section 8.1, or an event of Force
Majeure, the contribution of such lack of wind resource, an Event of Default by NSP
shall be imputed into the calculation of Committed Renewable Energy for the purposes
of, and only for the purposes of, establishing an Event of Default of Seller; and provided
further that the event of Force Majeure contributing, in whole or in part, to such failure of
performance is subject to the provisions of Section 14.3. If prior to the expiration of the
cure period for this Event of Default, Seller uses its best efforts to (i) remove any
impediments to increased production and (ii) attempt to increase production of
Committed Renewable Energy from the Facility to an amount in excess of eighty
percent (80%) of the Committed Renewable Energy, such Event of Default will be
suspended until the earlier of the twelve (12) month rolling average exceeding eighty
percent (80%) or the expiration of twelve (12) months from the initial notice of default.
(E) Notwithstanding any provision in this PPA to the contrary, from and
after MPUC approval of this PPA, Seller’s failure to maintain C-BED Eligibility shall not
constitute an Event of Default allowing NSP to terminate this PPA, and NSP’s sole
remedy for failure to maintain C-BED Eligibility shall be the price adjustment set forth in
Section 8.2.
(F) Notwithstanding any cure periods or extended cure periods as
provided in this Section 12.1, Seller’s failure to meet the Commercial Operation
Milestone for any reason (including Force Majeure or the excuses set forth in this
Section 12.1) shall not give rise to any change in the Renewable Energy Payment Rate,
regardless of whether such failure results in the Facility not qualifying for PTCs or other
tax incentives, grants or credits.
12.2 Facility Lender’s Riqht to Cure Default of Seller. Seller shall provide NSP
with a notice identifying the Facility Lender and providing appropriate contact
information for the Facility Lender. Following receipt of such notice, NSP shall provide
notice of any Event of Default of Seller to the Facility Lender, and NSP will accept a
cure to an Event of Default of Seller performed by the Facility Lender, so long as the
cure is accomplished within the applicable cure period set forth in this PPA.
12.3 Events of Default of NSP.
(A) Any of the following shall constitute an Event of Default of NSP
upon its occurrence and no cure period shall be applicable:
1. NSP’s dissolution or liquidation; provided, however, that
division of NSP into multiple entities and the entity that owns NSP’s assets necessary to
provide retail electric utility service to customers and has regulatory authority to seek
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rate recovery from the MPUC assumes the obligations of this PPA, shall not constitute
dissolution or liquidation;
2. NSP’s assignment of this PPA or any of its rights hereunder
for the benefit of creditors; or
3. NSP’s filing of a voluntary petition in bankruptcy or
insolvency or for reorganization or arrangement under the bankruptcy laws of the United
States or under any insolvency act of any State, or NSP voluntarily taking advantage of
any such law or act by answer or otherwise.
4. NSP’s assignment of this PPA, except as permitted in
accordance with section 19 herein.
(B) Any of the following shall constitute an Event of Default of NSP
upon its occurrence but shall be subject to cure such default within thirty (30) Days after
the date of written notice from Seller to NSP; provided however, upon the Event of
Default of Seller that can only be cured by Seller’s performance to cure the Event of
Default, the cure period shall be extended beyond the thirty (30) day notice period for a
maximum additional amount of sixty (60) additional days, so long as Seller is using
commercially reasonable efforts to cure the Event of Default and provides NSP with
progress reports on its efforts to cure such Event of Default and the projected date
when such Event of Default will be cured.
1. NSP’s failure to comply with any other material obligation
under this PPA, which would result in a material adverse impact on Seller;
2. NSP’s failure to make any payment due hereunder (subject
to NSP’s rights with respect to disputed payments under Section 9.4 and net of
outstanding damages and any other rights of offset NSP may have pursuant to this
PPA;
(C) Any of the following shall constitute an Event of Default of NSP if
NSP has failed to cure such default within sixty (60) Days after the date of written notice
from Seller to NSP; provided however, upon the Event of Default of Seller that can only
be cured by Seller’s performance to cure the Event of Default, the cure period for a
maximum additional amount of sixty (60) additional days, shall be extended beyond the
sixty (60) day notice period so long as Seller is using commercially reasonable efforts to
cure the Event of Default and provides NSP with progress reports on its efforts to cure
such Event of Default and the projected date when such Event of Default will be cured.
1. The filing of an involuntary case in bankruptcy or any
proceeding under any other insolvency law against NSP that could materially impact
NSP’s ability to perform its obligations hereunder; provided, however, that NSP does
not obtain a stay or dismissal of the filing within the cure period; or
2. Any representation or warranty made by NSP in this PPA
shall prove to have been false or misleading in any material respect when made or
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ceases to remain true during the Term if such cessation would reasonably be expected
to result in a material adverse impact on Seller.
12.4 Damaqes Prior to Termination. Upon the occurrence of an Event of
Default, and subject in each case to the limitation on damages set forth in Section 12.6,
the non-defaulting Party shall have the right to collect damages accruing prior to the
termination of this PPA from the defaulting Party as set forth below, and the payment of
any such damages accruing prior to the cure of an Event of Default shall constitute a
part of the cure.
(A)
Delay Damages.
1. If Seller fails to meet any Construction Milestone set forth in
Exhibit A, subject to extension for Force Majeure or delay attributable to NSP under
Section 14.4, Seller shall pay damages to NSP on account of such delay ("Delay
Damages") in the amounts specified below:
Delay
Delay Damages
Failure to meet any Construction
Milestone set forth in Exhibit A,
except for Commercial Operation
Milestone
$5 per MW of design
maximum output per Day
Failure to meet the Commercial
Operation Milestone set forth
in Exhibit A
$100 per MW of design
maximum output per Day
2. All Delay Damages shall begin to accrue on the Day after
the applicable missed Construction Milestone and shall continue to accrue until the
result specified for such Construction Milestone is achieved and NSP shall not terminate
this PPA so long as such Delay Damages are being paid. Delay Damages shall be
payable in lieu of actual damages accrued for the period during which Delay Damages
are assessed. All Delay Damages shall be cumulative.
3. Notwithstanding the foregoing, if Seller meets the
Commercial Operation Milestone, all Delay Damages paid by Seller to NSP based upon
a failure to meet one or more earlier Construction Milestones, less any expense
amounts incurred by NSP pursuant to Section 12.7, shall be refunded to Seller, with
payments due Seller for the first monthly billing period following the Commercial
Operation Date.
4. Seller’s failure to achieve any Construction Milestone
pursuant to this Section 12.4(A)(2) shall not result in any increased obligation or liability
to NSP under this PPA and Seller shall bear all schedule risk, including the risk of losing
eligibility for PTCs or other tax incentives, grants or credits as a result of any such
failure.
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(B)
Actual Damages. For all Events of Default described in Section
12.1 and 12.3 (other than Seller's failure to meet a Construction Milestone, for
which NSP shall be entitled to collect Delay Damages pursuant to Section
12.4(A), subject to Section 14.4), the non-defaulting Party shall, subject to the
limitation on damages set forth in this PPA, be entitled to receive from the
defaulting Party all of the damages incurred by the non-defaulting Party in
connection with such Event of Default; provided, however, that if an Event of
Default has occurred and has continued uncured for a period of three hundred
sixty-five (365) Days, the non-defaulting Party shall be required to either waive its
right to collect further damages on account of such Event of Default or elect to
terminate this PPA as provided for in Section 12.5. If Seller is the defaulting
Party, the Parties agree that the damages recoverable by NSP hereunder on
account of an Event of Default of Seller shall include Replacement Energy Costs,
but subject in all events to limitation on damages set forth herein.
1.1
Termination. Upon the occurrence of an Event of Default that has
not been cured within the applicable cure period, the non-defaulting Party shall
have the right to declare a date, which shall be between fifteen (15) and thirty
(30) Days after the notice thereof, upon which this PPA shall terminate. Neither
Party shall have the right to terminate this PPA except as provided for upon the
occurrence of an Event of Default as described above or as otherwise may be
explicitly provided for in this PPA, including if condition precedent under Section
6 are not satisfied as provided herein. If a Party’s condition precedent under
Section 6 are not satisfied as provided herein, such Party may terminate this
PPA upon written notice to the other Party and this PPA shall become null and
void and neither Party shall pay damages to the other Party. Upon the
termination of this PPA under this Section 12.5, the non-defaulting Party shall be
entitled to receive from the defaulting Party, subject to the limitation on damages
set forth in Section 12.6, all of the damages incurred by the non-defaulting Party
in connection with such termination including, if Seller is the defaulting Party, the
value of all future Replacement Energy Costs for the then remaining Term,
subject to the limitation on damages set forth herein. The non-defaulting Party
shall be required to provide written notice of an Event of Default to the defaulting
Party no later than thirty (30) days after an Event of Default, and the nondefaulting Party shall be deemed to have waived its right to terminate this PPA if
it fails to deliver such notice within such thirty (30) day notice period.
1.2
Limitation on Damages. Except as otherwise provided in this
Section 12.6 (i) Seller's aggregate financial liability to NSP for Delay Damages,
pursuant to Section 12.4(A), shall not exceed [Begin Trade Secret $2,925,000
and (ii) Seller's aggregate financial liability to NSP for Replacement Energy Costs
and other damages, excluding Delay Damages, shall not exceed $2,925,000.
End Trade Secret] If at any time during the Term, NSP incurs damages in
excess of the limitations set forth above that Seller does not agree to pay when
billed by NSP in accordance with Section 12.11, NSP shall have the right to
declare a termination of this PPA under Section 12.5. The limitations on
damages set forth in this paragraph shall not apply to damages arising out of any
of the following events:
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(A) actual fraud, waste, tampering with NSP owned facilities or other
material intentional misrepresentation or misconduct sanctioned by, or at the direction
of, Seller in connection with this PPA or the operation of the Facility;
(B) the sale by Seller to a third party, or diversion by Seller for any use,
of Renewable Energy committed to NSP under this PPA;
(C) Seller’s failure to apply any insurance proceeds to reconstruction of
the Facility following a casualty;
(D)
any claim for indemnification under Article 17;
(E)
any Environmental Contamination caused by Seller; or
(F)
the filing of an involuntary bankruptcy petition against Seller (other
than by NSP), which petition is not dismissed within sixty (60) Days of its filing, or the
filing of a voluntary petition in bankruptcy by Seller.
12.7 Operation by NSP Followinq Event of Default of Seller.
(A) Prior to any termination of this PPA due to an Event of Default of
Seller and following NSP notice under Section 12.5, NSP shall have the right, but not
the obligation, to possess, assume control of and operate the Facility as agent for Seller
(in accordance with Seller’s rights, obligations and interest under this PPA) during the
period provided for herein. Seller shall not grant any person, other than the Facility
Lender, a right to possess, assume control of and operate the Facility that is equal to or
superior to NSP’s right under this Section 12.7.
(B) NSP shall give Seller and the Facility Lender ten (10) Days notice
in advance of the contemplated exercise of NSP’s rights under this Section 12.7. Upon
such notice, Seller shall collect and have available at a convenient, central location at
the Facility all documents, contracts, books, manuals, reports and records required to
construct, operate and maintain the Facility in accordance with Good Utility Practice.
Upon such notice, NSP and its employees, contractors or designated third parties shall
have the unrestricted right to enter the Site and the Facility for the purpose of
constructing or operating the Facility. Seller hereby irrevocably appoints NSP as
Seller’s attorney-in-fact for the exclusive purpose of executing such documents and
taking such other actions as NSP may reasonably deem necessary or appropriate to
exercise NSP’s step-in rights under this Section 12.7.
(C) To the extent NSP is not fully compensated under Section 12.7(D),
NSP shall be entitled to draw upon the Security Fund immediately to cover any
expenses incurred by NSP in exercising its rights under this Section 12.7.
(D) During any period that NSP is in possession of and constructing or
operating the Facility pursuant to this Section 12.7, NSP shall perform and comply with
all of the obligations of Seller under this PPA and shall use the proceeds from the sale
of electricity generated by the Facility first, to reimburse NSP for any and all expenses
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reasonably incurred by NSP (including a return on capital at NSP’s authorized return on
equity most recently determined by the MPUC) in taking possession of and operating
the Facility and, second, to remit any remaining proceeds to Seller.
(E) During any period that NSP is in possession of and operating the
Facility, Seller shall retain legal title to and ownership of the Facility and NSP shall
assume possession, operation and control solely as agent for Seller.
1. In the event that NSP is in possession and control of the
Facility for an interim period, Seller may resume operation and NSP shall relinquish its
right to operate when Seller demonstrates to NSP’s reasonable satisfaction that it will
remove those grounds that originally gave rise to NSP’s right to operate the Facility, as
provided above, in that Seller (i) will resume operation of the Facility in accordance with
the provisions of this PPA and (ii) has cured any Events of Default of Seller that allowed
NSP to exercise its rights under this Section 12.7.
2. In the event that NSP is in possession and control of the
Facility for an interim period, the Facility Lender, or any nominee or transferee thereof,
may foreclose and take possession of and operate the Facility and NSP shall relinquish
its right to operate when the Facility Lender or any nominee or transferee thereof
requests such relinquishment.
(F) NSP’s exercise of its rights hereunder to possess and operate the
Facility shall not be deemed an assumption by NSP of any liability attributable to Seller.
If at any time after exercising its rights to take possession of and operate the Facility
NSP elects to return such possession and operation to Seller, NSP shall provide Seller
with at least fifteen (15) Days advance notice of the date NSP intends to return such
possession and operation, and upon Seller’s receipt of such notice Seller shall take all
measures necessary to resume possession and operation of the Facility on such date.
(G) In the event NSP assumes operation of the Facility under this
Section 12.7, NSP shall operate the Facility in conformance with Good Utility Practice.
12.8 Specific Performance. In addition to the other remedies specified in this
Article 12 after the Commercial Operation Date, in the event that any Event of Default of
Seller is not cured within the applicable cure period set forth herein, NSP may elect to
treat this PPA as being in full force and effect, and NSP shall have the right to specific
performance. If the breach by Seller arises from a failure by third party operating the
Facility pursuant to an operating agreement entered into with Seller, and Seller fails or
refuses to enforce its rights under the operating agreement that would result in the cure,
or partial cure, of the Event of Default, NSP’s right to specific performance shall include
the right to obtain an order compelling Seller to enforce its rights under the operating
agreement. Likewise, for any breach of this PPA by NSP, other than payment
obligations, Seller shall have the right to specific performance.
12.9 Remedies Cumulative. Subject to the exclusivity of Delay Damages
provided in Section 12.4(A) and the limitations on damages set forth in Section 12.6,
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each right or remedy of the Parties provided for in this PPA shall be cumulative of and
shall be in addition to every other right or remedy provided for in this PPA, and the
exercise, or the beginning of the exercise, by a Party of any one or more or the rights or
remedies provided for herein shall not preclude the simultaneous or later exercise by
such Party of any or all other rights or remedies provided for herein.
12.10 Waiver and Exclusion of Other Damaqes. The Parties confirm that the
express remedies and measures of damages provided in this PPA satisfy the essential
purposes hereof. If no remedy or measure of damages is expressly herein provided,
the obligor’s liability shall be limited to direct, actual damages only. Neither Party shall
be liable to the other Party for consequential, incidental, punitive, exemplary, special,
equitable or indirect damages, lost profits or other business interruption damages by
statute, in tort or contract (except to the extent expressly provided herein); provided,
however, that if either Party is held liable to a third party for such damages and the
Party held liable for such damages is entitled to indemnification therefor from the other
Party hereto, the indemnifying Party shall be liable for, and obligated to reimburse the
indemnified Party for, such damages. To the extent any damages required to be paid
hereunder are liquidated, the Parties acknowledge that the damages are difficult or
impossible to determine, that otherwise obtaining an adequate remedy is inconvenient,
and that the liquidated damages constitute a reasonable approximation of the harm or
loss.
12.11 Payment of Amounts Due to NSP. Without limiting any other provisions of
this Article 12 and at any time before or after termination of this PPA, NSP may send
Seller an invoice for such damages (including Delay Damages) or other amounts as are
due to NSP at such time from Seller under this PPA and such invoice shall be payable
in the manner, and in accordance with the applicable provisions, set forth in Article 9,
including the provision for late payment charges. NSP may withdraw funds from the
Security Fund as needed to provide payment for such invoice if the invoice is not paid
by Seller on or before the tenth (10th) Business Day following the date Seller receives
such invoice.
12.12 Duty to Mitiqate. Each Party agrees that it has a duty to mitigate damages
and covenants that it will use commercially reasonable efforts to minimize any damages
it may incur as a result of the other Party’s performance or non-performance of this
PPA.
Article 13 - Contract Administration and Notices
13.1 Notices in Writin.q. Notices required by this PPA shall be addressed to the
other Party, including the other Party’s representative on the Operating Committee, at
the addresses noted in Exhibit C as either Party updates them from time to time by
written notice to the other Party. Any notice, request, consent or other communication
required or authorized under this PPA to be given by one Party to the other Party shall
be in writing. It shall either be hand delivered or mailed, postage prepaid, to the
representative of said other Party. If mailed, the notice, request, consent or other
communication shall be simultaneously sent by facsimile or other electronic means.
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Any such notice, request, consent or other communication shall be deemed to have
been received by the Close of the Business Day on which it was hand delivered or
transmitted electronically (unless hand delivered or transmitted after such close, in
which case it shall be deemed received at the close of the next Business Day). Realtime or routine communications concerning Facility operations shall be exempt from this
Section 13.1.
13.2 Representative for Notice. Each Party shall maintain a designated
representative to receive notices. Such representative may, at the option of each Party,
be the same person as that Party’s representative or alternate representative on the
Operating Committee, or a different person. Either Party may, by written notice to the
other Party, change the representative or the address to which such notices and
communications are to be sent.
13.3 Authority of Representatives. The Parties’ representatives designated
above shall have authority to act for its respective principals in all technical matters
relating to performance of this PPA and to attempt to resolve disputes or potential
disputes. However, they, in their capacity as representatives, shall not have the
authority to amend or modify any provision of this PPA.
13.4 Operatinq Records. Seller and NSP shall each keep complete and
accurate records and all other data required by each of them for the purposes of proper
administration of this PPA, including such records as may be required by state or
federal regulatory authorities and MRO in the prescribed format.
13.5 Operatinq Lo.q. Seller shall maintain an accurate and up-to-date operating
log, in electronic format, at the Facility with records of production for each clock hour,
changes in operating status, Scheduled Outages/Deratings and Forced Outages for the
purposes of proper administration of this PPA, including such records as may be
required by state or federal regulatory authorities and MRO in the prescribed format.
13.6 Provision of Real Time Data. Seller shall provide NSP, at Seller’s
expense, with real-time turbine performance and meteorological data (see Exhibit K) for
all Wind Turbines at the Facility for the Term of this PPA, which data shall be subject to
the confidentiality provisions of Section 20.16 of this PPA. Seller shall undertake, or
authorize NSP to undertake at Seller’s expense, to install, operate and maintain a
Seller-owned Plant Information System (the "PI") at the Facility. Seller shall provide
NSP real-time access to turbine performance and meteorological data gathered from
the PI and shall ensure that real-time communications capabilities are available and
maintained for the transmission of all PI data.
13.7 Billinq and Payment Records. To facilitate payment and verification,
Seller and NSP shall keep all books and records necessary for billing and payments in
accordance with the provisions of Article 9 and grant the other Party reasonable access
to those records. All records of Seller pertaining to the operation of a Facility shall be
maintained on the premises of the Facility.
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13.8 Examination of Records.
(A) Seller and NSP may examine the financial and Operating Records
and data kept by the other Party relating to transactions under and administration of this
PPA at any time during the period such financial and Operating Records are required to
be maintained, upon request and during normal business hours.
(B) Seller shall be solely responsible for obtaining and maintaining CBED Eligibility for the Term and accepts all risk associated with the failure to maintain
C-BED Eligibility. Exhibit H to this PPA sets forth Seller’s documents and other
materials complying with the above requirements, including the required Minnesota
Office of Energy Security (or predecessor objection) Letter and an
ownership/organization chart demonstrating C-BED Eligibility. Seller shall promptly
notify NSP of any change in circumstance that results in or, in Seller’s reasonable
judgment, could result in the loss of C-BED Eligibility. NSP shall in all circumstances
have the right to rely on Seller’s information for all purposes and shall not be required to
undertake any independent measures to confirm or monitor ongoing C-BED Eligibility.
NSP shall have the right but not the obligation to seek an order from the MPUC or other
Governmental Authority with jurisdiction to determine ongoing C-BED Eligibility.
13.9 Exhibits. Either Party may change the information for their notice
addresses in Exhibit C at any time without the approval of the other Party. Exhibit A-l,
Exhibit B, Exhibit E, Exhibit F, Exhibit G, Exhibit H, Exhibit I, Exhibit J, and Exhibit K
may be changed at any time with the mutual consent of both Parties. Exhibit D may be
changed in accordance with Section 16.2(B).
13.10 Dispute Resolution.
(A) In the event of any dispute arising under this PPA (a "Dispute"),
within ten (10) Days following the delivered date of a written request by either Party (a
"Dispute Notice"), (i) each Party shall appoint a representative (individually, a "Party
Representative" and together, the "Parties’ Representatives") and (ii) the Parties’
Representatives shall meet, negotiate and attempt in good faith to resolve the Dispute
quickly, informally and inexpensively. In the event the Parties’ Representatives cannot
resolve the Dispute within thirty (30) Days after commencement of negotiations, within
ten (10) Days following any request by either Party at any time thereafter, each Party
Representative shall (i) independently prepare a written summary of the Dispute
describing the issues and claims, (ii) shall exchange its summary with the summary of
the Dispute prepared by the other Party Representative, and (iii) shall submit a copy of
both summaries to a senior officer of the Party Representative’s Party with authority to
irrevocably bind the Party to a resolution of the Dispute. Within ten (10) Business Days
after receipt of the Dispute summaries, the senior officers for both Parties shall
negotiate in good faith to resolve the Dispute. If the Parties are unable to resolve the
Dispute within fourteen (14) Days following receipt of the Dispute summaries by the
senior officers, either Party may seek available legal remedies.
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(B) Notwithstanding any provision in this PPA to the contrary, if no
Dispute Notice has been issued within twenty-four (24) months following the occurrence
of all events and the existence of all circumstances giving rise to the Dispute
(regardless of the knowledge or potential knowledge of either Party of such events and
circumstances), the Dispute and all claims related thereto shall be deemed waived and
the aggrieved Party shall thereafter be barred from proceeding thereon.
(C) Seller and NSP each hereby knowingly, voluntarily and intentionally
waive any rights they may have to a trial by jury in respect of any litigation based
hereon, or arising out of, under or in connection with this PPA or any course of conduct,
course of dealing, statements (whether oral or written) or actions of Seller and NSP
related hereto and expressly agree to have any disputes arising under or in connection
with this PPA be adjudicated by a judge of the court having jurisdiction without a jury.
Article 14 - Force Majeure
14.1
Definition of Force Maieure.
(A) The term "Force Majeure," as used in this PPA, means causes or
events beyond the reasonable control of, and without the fault or negligence of, the
Party claiming Force Majeure, which by exercise of due diligence and reasonable
foresight could not reasonably have been avoided, including, without limitation, acts of
God; sudden actions of the elements, such as floods, earthquakes, hurricanes or
tornadoes; high winds of sufficient strength or duration to materially damage a facility or
significantly impair its operation for a period of time longer than normally encountered in
similar businesses under comparable circumstances; serial manufacturing and/or
design defects in the wind turbines or other major components comprising the Facility
only only in the event and to the extent that such occurrence is established to constitute
a serie! defect under Seller’s turbine supply agreement or EPC contract; long-term
material changes in renewable energy flows across the Facility caused by climactic
change; lightning; fire; ice storms; sabotage; vandalism beyond that which could
reasonably be prevented by Seller; terrorism; war; riots; fire; explosion; blockades;
insurrection; strike; slow down or labor disruptions (even if such difficulties could be
resolved by conceding to the demands of a labor group); and actions or inactions by
any Governmental Authority taken after the date hereof (including the adoption or
change in any rule or regulation or environmental constraints lawfully imposed b such
Governmental Authority) but only if such requirements, actions or failures to act )revent
or delay performance; and inability, despite due diligence, to obtain any licenses
permits or approvals required by any Governmental Authority.
(B) The term Force Majeure does not include (i) any acts or omissions
of any third party, including any vendor, materialman, customer or supplier of Seller,
except failure of the transmission owner to complete all network upgrades (through no
fault of Seller) necessary for Seller to deliver Renewable Energy to the Point of Deliver,
unless such acts or omissions are themselves excused by reason of Force Majeure;
(ii) any full or partial curtailment in the electric output of the Facility that is caused by or
arises from a mechanical or equipment breakdown or other mishap or events or
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conditions attributable to normal wear and tear or flaws, unless such mishap is caused
by one of the following: serial defects in equipment or system program as determined
under Seller’s turbine supply agreement or epc contract; catastrophic equipment or
system failure; acts of God; sudden actions of the elements, including, but not limited to,
floods, hurricanes or tornadoes; sabotage; terrorism; war; riots; and emergency orders
issued by a Governmental Authority or (iii) changes in market conditions that affect the
cost of NSP’s or Seller’s supplies or that affect demand or price for any of NSP’s or
Seller’s products.
14.2 Applicability of Force Maieure.
(A) Neither Party shall be responsible or liable for any delay or failure in
its performance under this PPA, nor shall any delay, failure or other occurrence or event
become an Event of Default, to the extent such delay, failure, occurrence or event is
substantially caused by conditions or events of Force Majeure; provided, however, that:
1. the non-performing Party gives the other Party prompt
written notice describing the particulars of the occurrence of the Force Majeure;
2. the suspension of performance is of no greater scope and of
no longer duration than is required by the Force Majeure;
3. the non-performing Party proceeds with reasonable diligence
to remedy its inability to perform and provides weekly progress reports to the other
Party describing actions taken to end the Force Majeure; and
4. when the non-performing Party is able to resume
performance of its obligations under this PPA, that Party shall give the other Party
written notice to that effect.
(B) Except as otherwise expressly provided for in this PPA, the
existence of a condition or event of Force Majeure shall not relieve the Parties of their
obligations under this PPA (including payment obligations) to the extent that
performance of such obligations is not precluded by the condition or event of Force
Majeure.
14.3 Limitations on Effect of Force Maieure In no event will any delay or failure
of performance caused by any conditions or events of Force Majeure extend this PPA
beyond its stated Term. In the event that any delay or failure of performance caused by
conditions or events of Force Majeure continues for an uninterrupted period of three
hundred sixty-five (365) Days from its occurrence or inception, as noticed pursuant to
Section 14.2(A), the Party not claiming Force Majeure may, at any time following the
end of such three hundred sixty-five (365) Day period, terminate this PPA upon written
notice to the affected Party, without further obligation by either Party except as to costs
and balances incurred prior to the effective date of such termination. The Party not
claiming Force Majeure may, but shall not be obligated to, extend such three hundred
sixty-five (365) Day period for such additional time as it, at its sole discretion, deems
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appropriate if the affected Party is exercising due diligence in its efforts to cure the
conditions or events of Force Majeure.
14.4 Delays Attributable to NSP. Seller shall be excused from a failure to meet
any specified Construction Milestone where Seller can establish that such a failure is
solely attributable to any delay or failure by NSP in obtaining any consents or approvals
from Governmental Authorities or third parties required for NSP to perform its
obligations under this PPA (whether or not caused by any conditions or events of Force
Majeure) ("Delay Conditions"); provided, however, that in the event of such a failure, the
Construction Milestone that is not met due to the Delay Conditions, and any affected
Construction Milestones that follow, shall be extended for a period of time equal to the
period of time between (i) the Construction Milestone that is not met due to the Delay
Conditions and (ii) the Day that NSP has corrected the Delay Conditions.
(A) Seller’s failure to meet the Commercial Operation Milestone for any
reason, including Delay Conditions, Force Majeure, the acts or inaction of the
Interconnection Provider or of any third party or any Event of Default, except as
expressly provided in Section !4.4(B), shall not give rise to any damages payable by
NSP (or an increase in the price for Renewable Energy) associated with or arising from
such failure resulting in the Facility not qualifying for PTCs or other tax incentives,
grants or credits.
(B) The prohibition set forth in Section 14.4(A) shall not apply to any
situation when Seller can establish that the failure to meet the Commercial Operation
Milestone (i) actually caused the Facility not to qualify for PTCs or other tax incentives,
grants or credits and (ii) was solely caused in fact by NSP’s willful misconduct or gross
negligence in its performance of this PPA or by an Event of Default by NSP of this PPA.
Article 15 - Representations, Warranties and Covenants
15.1 Seller’s Representations, Warranties and Covenants. Seller hereby
represents and warrants as follows:
(A) Seller is a Minnesota limited liability company that meets all of the
requirements of a Qualifying Owner for a C-BED Project, duly organized, validly existing
and in good standing under the laws of the State of Minnesota. Seller is qualified to do
business in each other jurisdiction where the failure to so qualify would have a material
adverse effect on the business or financial condition of Seller; and Seller has all
requisite power and authority to conduct its business, to own its properties and to
execute, deliver and perform its obligations under this PPA.
(B) The execution, delivery and performance of Seller’s obligations
under this PPA have been duly authorized by all necessary corporate action and do not
and will not:
1. require any consent or approval by any governing body of
Seller, other than that which has been obtained and is in full force and effect (evidence
of which shall be delivered to NSP upon its request);
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2. violate any provision of law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award currently in effect having
applicability to Seller or violate any provision in any formation documents of Seller, the
violation of which could have a material adverse effect on the ability of Seller to perform
its obligations under this PPA;
3. result in a breach or constitute a default under Seller’s
formation documents or bylaws, or under any agreement relating to the management or
affairs of Seller or any indenture or loan or credit agreement, or any other agreement,
lease or instrument to which Seller is a party or by which Seller or its properties or
assets may be bound or affected, the breach or default of which could reasonably be
expected to have a material adverse effect on the ability of Seller to perform its
obligations under this PPA; or
4. result in, or require the creation or imposition of any,
mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance
of any nature (other than as may be contemplated by this PPA) upon or with respect to
any of the assets or properties of Seller now owned or hereafter acquired, the creation
or imposition of which could reasonably be expected to have a material adverse effect
on the ability of Seller to perform its obligations under this PPA.
(C) This PPA is a valid and binding obligation of Seller, subject to the
contingencies identified in Section 6.2, except as enforcement may be limited by
bankruptcy, insolvency or similar laws affecting the right of creditors generally or by
general principles of equity.
(D) The execution and performance of this PPA will not conflict with or
constitute a material breach or default under any contract or agreement of any kind to
which Seller is a party or any judgment, order, statute or regulation that is applicable to
Seller or the Facility.
(E) To the best knowledge of Seller, and except for those permits,
consents, approvals, licenses and authorizations identified in Exhibit E, which Seller
anticipates will be obtained by Seller in the ordinary course of business, all permits,
consents, approvals, licenses, authorizations or other action required by any
Governmental Authority to authorize Seller’s execution, delivery and performance of this
PPA have been duly obtained and are in full force and effect.
(F) The ownership structure of Seller satisfies all of the requirements
for C-BED Eligibility. Seller’s owners all satisfy the requirements of a C-BED Project
pursuant to Minnesota Statutes Section 216B.1612, Subd. 2(f). Exhibit H hereto
includes a description of such ownership structure, and Seller shall update Exhibit H
any time the ownership structure changes. Seller has obtained a resolution of support
adopted by the county board (or applicable Tribal council) for each county/reservation
on which any portion of the C-BED Project will be located. Exhibit H includes a copy of
such resolution.
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(G) Seller shall comply with all applicable local, state and federal laws,
regulations and ordinances, including all requirements relating to C-BED Eligibility,
equal opportunity and affirmative action requirements and all applicable federal, state
and local environmental laws and regulations presently in effect or that may be enacted
during the Term of this PPA.
(H) Seller shall disclose to NSP the extent of and, as soon as it is
known to Seller, any violation of any environmental laws or regulations arising out of the
construction or operation of the Facility, or the presence of Environmental
Contamination at the Facility or on the Site, alleged to exist by any Governmental
Authority having jurisdiction over the Site, or the existence of any past or present
enforcement, legal or regulatory action or proceeding relating to such alleged violation
or alleged presence of Environmental Contamination.
(I) Seller has made all necessary governmental filings or applications
for Renewable Energy Credit accreditation.
(J) To the full extent authorized by FERC regulations and the FERC
standards of conduct, Seller hereby authorizes NSP to contact and obtain information
concerning the Facility and Interconnection Facilities directly from the Interconnection
Provider, and to the extent necessary Seller shall provide written notice to the
Interconnection Provider confirming such authorization.
(K) Seller will cooperate with NSP to provide all information requested
by NSP or by any Governmental Authority necessary to confirm ongoing C-BED
Eligibility.
15.2 NSP’s Representations, Warranties and Covenants. NSP hereby
represents and warrants as follows:
(A) NSP is a corporation duly organized, validly existing and in good
standing under the laws of the State of Minnesota and is qualified in each other
jurisdiction where the failure to so qualify would have a material adverse effect upon the
business or financial condition of NSP; and NSP has all requisite power and authority to
conduct its business, to own its properties and to execute, deliver and perform its
obligations under this PPA.
(B) The execution, delivery and performance of NSP’s obligations
under this PPA have been duly authorized by all necessary corporate action and do not
and will not:
1. require any consent or approval of NSP’s Board of Directors,
or shareholders, other than that which has been obtained and is in full force and effect
(evidence of which shall be delivered to Seller upon its request);
2. violate any provision of law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award currently in effect having
applicability to NSP or violate any provision in any corporate documents of NSP, the
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violation of which could have a material adverse effect on the ability of NSP to perform
its obligations under this PPA;
3. result in a breach or constitute a default under NSP’s
corporate charter or bylaws, or under any agreement relating to the management or
affairs of NSP, or any indenture or loan or credit agreement, or any other agreement,
lease or instrument to which NSP is a party or by which NSP or its properties or assets
may be bound or affected, the breach or default of which could reasonably be expected
to have a material adverse effect on the ability of NSP to perform its obligations under
this PPA; or
4. result in, or require the creation or imposition of, any
mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance
of any nature (other than as may be contemplated by this PPA) upon or with respect to
any of the assets or properties of NSP now owned or hereafter acquired, the creation or
imposition of which could reasonably be expected to have a material adverse effect on
the ability of NSP to perform its obligations under this PPA.
(C) This PPA is a valid and binding obligation of NSP, subject to the
contingencies identified in Section 6.1.
(D) The execution and performance of this PPA will not conflict with or
constitute a breach or default under any contract or agreement of any kind to which
NSP is a party or any judgment, order, statute or regulation that is applicable to NSP.
(E) To the best knowledge of NSP, and except for the MPUC approvals
identified in Section 6.1, all approvals, authorizations, consents or other action required
by any Governmental Authority to authorize NSP’s execution, delivery and performance
of this PPA have been duly obtained and are in full force and effect.
Article 16 - Insurance
16.1 Evidence of Insurance. Seller shall, on or before June 1 of each
Commercial Operation Year and pursuant to the corresponding Construction Milestone,
provide NSP with two (2) copies of insurance certificates acceptable to NSP evidencing
that insurance coverages for the Facility are in compliance with the specifications for
insurance coverage set forth in Exhibit D to this PPA. Such certificates shall (a) name
NSP as an additional insured (except worker’s compensation); (b) provide that NSP
shall receive thirty (30) Days prior written notice of non-renewal, cancellation of or
significant modification to any of the corresponding policies (except that such notice
shall be ten (10) Days for non-payment of premiums); (c) provide a waiver of any rights
of subrogation against NSP and its Affiliates and their respective officers, directors,
agents, subcontractors and employees; and (d) indicate that the Commercial General
Liability policy has been endorsed as described above. All policies shall be written with
insurers that NSP, in its reasonable discretion, deems acceptable (such acceptance will
not be unreasonably withheld). All policies shall be written on an occurrence basis,
except as provided in Section 16.2. All policies shall contain an endorsement that
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Seller’s policy shall be primary in all instances regardless of like coverages, if any,
carried by NSP. Seller’s liability under this PPA is not limited to the amount of insurance
coverage required herein.
16.2 Term and Modification of Insurance.
(A) All insurance required under this PPA shall cover occurrences
during the Term and for a period of two (2) years after the Term. In the event that any
insurance as required herein is commercially available only on a "claims-made" basis,
such insurance shall provide for a retroactive date not later than the date of this PPA,
and such insurance shall be maintained by Seller, with a retroactive date not later than
the retroactive date required above, for a minimum of five (5) years after the Term.
(B) NSP shall have the right, at times NSP deems appropriate during
the Term, to request Seller to modify the insurance minimum limits specified in Exhibit D
in order to maintain reasonable coverage amounts. Seller shall make all commercially
reasonable efforts to comply with any such request.
(C) If any insurance required to be maintained by Seller hereunder
ceases to be reasonably available and commercially feasible in the commercial
insurance market, Seller shall provide written notice to NSP, accompanied by a
certificate from an independent insurance advisor of recognized national standing,
certifying that such insurance is not reasonably available and commercially feasible in
the commercial insurance market for electric generating plants of similar type,
geographic location and design. Upon receipt of such notice, Seller shall use
commercially reasonable efforts to obtain other insurance that would provide
comparable protection against the risk to be insured, and NSP shall not unreasonably
withhold its consent to modify or waive such requirement.
Article 17 - Indemnity
17.1 Indemnification. Each Party (the "Indemnifying Party") agrees to
indemnify, defend and hold harmless the other Party (the "Indemnified Party") from and
against all third party claims, demands, losses, liabilities, penalties and expenses
(including reasonable attorneys’ fees) for personal injury or death to persons and
damage to the Indemnified Party’s real property and tangible personal property or
facilities or the property of any other person or entity to the extent arising out of,
resulting from or caused by an Event of Default under this PPA, violation of any
Applicable Laws or by the negligent or tortious acts, errors or omissions of the
Indemnifying Party, its Affiliates or their respective directors, officers, employees or
agents. The indemnification of third party claims provided under this Section 17.1 is not
limited by the limitation on damages set forth in Section 12.6. Nothing in this
Section 17.1 shall enlarge or relieve Seller or NSP of any liability to the other for any
breach of this PPA. This indemnification obligation shall apply notwithstanding any
negligent or intentional acts, errors or omissions of the Indemnified Party, but the
Indemnifying Party’s liability to pay damages to the Indemnified Party shall be reduced
in proportion to the percentage by which the Indemnified Party’s negligent or intentional
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acts, errors or omissions caused the damages. Neither Party shall be indemnified for its
damages resulting from its sole negligence, intentional acts or willful misconduct.
These indemnity provisions shall not be construed to relieve any insurer of its obligation
to pay claims consistent with the provisions of a valid insurance policy.
17.2 Notice. Promptly after receipt by a Party of any claim or notice of the
commencement of any action, administrative or legal proceeding, or investigation as to
which the indemnity provided for in this Article may apply, the Indemnified Party shall
notify the Indemnifying Party in writing of such fact. The Indemnifying Party shall
assume the defense thereof with counsel designated by such Party and satisfactory to
the Indemnified Party; provided, however, that if the defendants in any such action
include both the Indemnified Party and the Indemnifying Party and the Indemnified Party
shall have reasonably concluded that there may be legal defenses available to it that
are different from or additional to, or inconsistent with, those available to the
Indemnifying Party, the Indemnified Party shall have the right to select and be
represented by separate counsel, at the Indemnifying Party’s expense, unless a liability
insurer is willing to pay such costs.
17.3 Indemnifyin.q Party’s Failure to Assume. If the Indemnifying Party fails to
assume the defense of a claim meriting indemnification, the Indemnified Party may at
the expense of the Indemnifying Party contest, settle or pay such claim; provided,
however, that settlement or full payment of any such claim may be made only following
consent of the Indemnifying Party or, absent such consent, written opinion of the
Indemnified Party’s counsel that such claim is meritorious or warrants settlement.
17.4 Amount Owed. Except as otherwise provided in this Article 17, in the
event that a Party is obligated to indemnify and hold the other Party and its successors
and assigns harmless under this Article 17, the amount owing to the Indemnified Party
will be the amount of the Indemnified Party’s actual loss net of any insurance proceeds
received by the Indemnified Party following a reasonable effort by the Indemnified Party
to obtain such insurance proceeds.
Article 18 - Legal and Regulatory Compliance
18.1 Compliance With Laws. Each Party shall at all times comply with all
Applicable Law, except for any non-compliance that, individually or in the aggregate,
could not reasonably be expected to have a material effect on the business or financial
condition of the Party or its ability to fulfill its commitments hereunder. As applicable,
each Party shall give all required notices, shall procure and maintain all necessary
governmental permits, licenses and inspections necessary for performance of this PPA
and shall pay its respective charges and fees in connection therewith.
18.2 Certificates. Each Party shall deliver or cause to be delivered to the other
Party certificates of its officers, accountants, engineers or agents as to matters as may
be reasonably requested, and shall make available, upon reasonable request,
personnel and records relating to the Facility to the extent that the requesting Party
requires the same in order to fulfill any regulatory reporting requirements, or to assist
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the requesting Party in litigation, including administrative proceedings before utility
regulatory commissions.
Article 19 - Assignment and Other Transfer Restrictions
19.1 No Assi.qnment Without Consent. Except as permitted in this Article 19,
neither Party shall assign this PPA or any portion thereof without the prior written
consent of the other Party, which consent shall not be unreasonably withheld or
delayed; provided, however, that (i) at least thirty (30) Days prior notice of any such
assignment shall be given to the other Party; (ii) any assignee shall expressly assume
the assignor’s obligations hereunder, unless otherwise agreed to by the other Party, and
no assignment, whether or not consented to, shall relieve the assignor of its obligations
hereunder in the event the assignee fails to perform, unless the other Party agrees in
writing in advance to waive the assignor’s continuing obligations pursuant to this PPA;
(iii) no such assignment shall impair any security given by Seller hereunder; (iv) before
this PPA is assigned by Seller, the assignee must first obtain such approvals as may be
required by all applicable regulatory.bodies; and (v) before this PPA is assigned by
Seller, the assignee shall demonstrate that it qualifies for C-BED Eligibility.
(A) Except as permitted in this Article 19, Seller shall not be permitted
to assign this PPA to any party having any senior unsecured bond rating, unenhanced
by third party support and not on credit watch or negative outlook, lower than BBB/Baa2
or the equivalent, or that does not otherwise meet NSP’s credit evaluation standards at
the time of any proposed assignment.
(B) Seller’s consent shall not be required for NSP to assign this PPA to
an Affiliate of NSP; provided, however, that NSP provides assurances and executes
documents commercially reasonably required by Seller and the Facility Lender
regarding NSP’s continued liability for all of NSP’s obligations under this PPA in the
event of any nonperformance on the part of such assignee. In the event that the
assignee has or obtains an investment grade senior unsecured bond rating,
unenhanced by third party support, equivalent to or better than the senior unsecured
bond rating, unenhanced by third party support, of NSP (but in no event worse than the
equivalent of BBB-) and is the owner of assets sufficient to provide retail electric
services and has rate recovery authority, then Seller agrees to relieve NSP from its
obligations under this PPA if NSP requests to be so relieved in a written notice provided
to Seller.
(C) NSP’s consent shall not be required for Seller to assign this PPA for
collateral purposes to the Facility Lender. Seller shall notify NSP, pursuant to
Sections 12.2 and 13.1, of any such assignment to the Facility Lender or affiliate of
Seller no later than thirty (30) Days after the assignment.
19.2 Accommodation of Facility Lender. To facilitate Seller’s obtaining of
financing to construct and operate the Facility, NSP shall make commercially
reasonable efforts to provide such consents to assignments, certifications,
representations, information or other documents as may be commercially reasonably
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requested by Seller or the Facility Lender in connection with the financing of the Facility;
provided, however, that in responding to any such request, NSP shall have no
obligation to provide any consent, or enter into any agreement, that materially adversely
affects any of NSP’s rights, benefits, risks or obligations under this PPA. Seller shall
reimburse, or shall cause the Facility Lender to reimburse, NSP for the incremental
direct expenses (including the reasonable fees and expenses of counsel) incurred by
NSP in the preparation, negotiation, execution or delivery of any documents requested
by Seller or the Facility Lender, and provided by NSP, pursuant to this Section 19.2.
19.3 Chanqe of Control.
(A) As a condition of approval for any contemplated change of control,
Seller shall provide reasonable assurances that after such change of control Seller or its
permitted assigns will maintain C-BED Eligibility and Seller shall reaffirm all
representations and warranties set forth in Section 15.1 as true and correct as of
completion of such change of control.
(B) Any direct or indirect change of control of (i) Seller or (ii) any
Affiliate of Seller that is a direct or indirect parent entity of Seller (except for an Ultimate
Parent Entity as defined under Section 7A of the Clayton Act, 15 U.S.C. 18a, aka the
Hart-Scott-Rodino Antitrust Improvements Act of 1976), whether voluntary or by
operation of law (a "Change of Control"), shall require the prior written consent of NSP,
which shall not be unreasonably withheld; provided, however, that notwithstanding any
other remedy, in no circumstance does NSP have the obligation to consent to any
Change of Control prior to the issuance and expiration of the PFT Notice. Any change
in ownership of Seller or of the Facility (whether by assignment of this PPA or
otherwise) shall not be undertaken unless and until Seller provides commercially
reasonable assurances that (i) after such Change of Control, Seller will maintain C-BED
Eligibility and (ii) Seller reaffirms all representations and warranties set forth in
Section 15.1 as true and correct as of completion of such Change of Control.
Notwithstanding anything to the contrary, a Change of Control shall not include:(i) a
change of control of the ultimate parent entity of Seller: (ii) the principle financing
obtained by Seller or its Affiliates on or prior to the Commercial Operation Date
sufficient to enable construction and operation of the Facility; and (iii) any "flip" of
economic and voting rights triggered in Seller’s organization documents arising from the
tax credit financing of the Facility.
(C) Seller’s direct and indirect parents (including Seller’s Ultimate
Parent Entity) as of the date of this PPA are set forth on Exhibit F hereto.
(D)
Pending Facility Transaction.
1. For purposes of this PPA, a "Pending Facility Transaction"
("PFT") means (i) any Change of Control of Seller, (ii) the issuance by Seller or any of
its Affiliates of a request for proposals or the response by Seller or any of its Affiliates to
a request for proposal) or similar process (e.g., auction) for the purchase or sale of the
Facility or any groups of assets or equity interests that includes the Facility, (iii) the
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commencement by Seller or any of its Affiliates of substantive negotiations with any
third party with respect to the sale of the Facility or any groups of assets or equity
interests that includes the Facility, or (iv) the execution by Seller or any of its Affiliates of
any letter of intent, memorandum of understanding or similar document, whether or not
legally binding, that contemplates the sale of the Facility or any groups of assets or
equity interests that includes the Facility. A "Pending Facility Transaction" does not
include (i) a Change of Control involving the Ultimate Parent Entity of Seller; (ii) any
refinance or other change in the debt or equity structure of Seller or any of its Affiliates;
(iii) the financing obtained on or prior to the Commercial Operation Date to construct
and develop the Facility; or (iv) any "flip" of economic and voting rights triggered in
Seller’s organization documents arising from the tax credit financing of the Facility.
2. Seller shall give to NSP at least thirty (30) Days’ prior written
notice of any Pending Facility Transaction (a "PFT Notice"). Any PFT Notice shall
include a fair summary of Seller’s plans with respect to the Facility in connection with
the proposed Pending Facility Transaction, to the extent then known by Seller. Seller
shall have no obligation to sell nor shall NSP have any obligation to purchase the
Facility, following any PFT Notice. Upon expiration of the PFT Notice, Seller and its
Affiliates shall be free for a period of nine (9) months thereafter to proceed with the
transaction that was subject to the PFT Notice. If Seller and its Affiliates have not
closed the proposed Pending Facility Transaction within such nine (9) month period, this
Section 19.3(C) shall again apply to any proposed Pending Facility Transaction.
3. NSP shall not be obligated to provide Seller with any
consent or other document in connection with this PPA until Seller has provided the
PFT Notice required by this Section 19.3(C).
19.4 Notice of Facility Lender Action. Within ten (10) Days following Seller’s
receipt of each written notice from the Facility Lender of default, or Facility Lender’s
intent to exercise any remedies, under the Financing Documents, Seller shall deliver a
copy of such notice to NSP.
19.5 Transfer Without Consent is Null and Void. Any sale, transfer or
assignment of any interest in the Facility or in this PPA made without fulfilling the
requirements of this PPA shall be null and void and shall constitute an Event of Default
pursuant to Article 12.
19.6 Subcontractinq. Seller may subcontract its duties or obligations under this
PPA without the prior written consent of NSP; provided, however, that no such
subcontract shall relieve Seller of any of its duties or obligations hereunder.
Article 20 - Miscellaneous
20.1 Waiver. Subject to the provisions of Section 13.10(B), the failure of either
Party to enforce or insist upon compliance with or strict performance of any of the terms
or conditions of this PPA, or to take advantage of any of its rights hereunder, shall not
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constitute a waiver or relinquishment of any such terms, conditions or rights, but the
same shall be and remain at all times in full force and effect.
20.2 Taxes.
(A)
Except as provided for in Section 20.2(B), Seller shall be solely
responsible for:
1. any and all present or future taxes and other impositions of
Governmental Authorities relating to the construction, ownership or leasing, operation or
maintenance of the Facility, or any components or appurtenances thereof, including
taxes and impositions that vary based upon the amount of power produced, the amount
or nature of fuel consumed or the nature of wastes produced by the Facility; and
2.
all ad valorem taxes relating to the Facility.
(B) The Parties shall cooperate to minimize tax exposure; however,
neither Party shall be obligated to incur any financial burden to reduce taxes for which
the other Party is responsible hereunder. All Renewable Energy delivered by Seller to
NSP hereunder shall be sales for resale, with NSP reselling such Renewable Energy.
NSP shall obtain and provide Seller with any certificates required by any Governmental
Authority, or otherwise reasonably requested by Seller to evidence that the deliveries of
Renewable Energy hereunder are sales for resale.
20.3 Fines and Penalties.
(A) Seller shall pay when due all fees, fines, penalties or costs incurred
by Seller or its agents, employees or contractors for noncompliance by Seller or its
employees or subcontractors with any provision of this PPA or any contractual
obligation, permit or Applicable Law related to this PPA, except for such fines, penalties
and costs that are being actively contested in good faith and with due diligence by Seller
and for which adequate financial reserves have been set aside to pay such fines,
penalties or costs in the event of an adverse determination.
(B) If fees, fines, penalties or costs are claimed or assessed against
NSP by any Governmental Authority due to noncompliance by Seller with this PPA, any
Applicable Law, any permit or contractual obligation or if the work of Seller or any of its
contractors or subcontractors is delayed or stopped by order of any Governmental
Authority due to Seller’s noncompliance with any Applicable Law, permit or contractual
obligation, Seller shall indemnify and hold NSP harmless against any and all losses,
liabilities, damages and claims suffered or incurred by NSP, including claims for
indemnity or contribution made by third parties against NSP, except to the extent NSP
recovers any such losses, liabilities or damages through other provisions of this PPA.
20.4 Rate Chanqes.
(A) The terms and conditions and the rates for service specified in this
PPA shall remain in effect for the term of the transaction described herein. Absent the
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Parties’ written agreement, this PPA shall not be subject to change by application of
either Party pursuant to Section 205 or 206 of the Federal Power Act.
(B) Absent the agreement of all Parties to the proposed change, the
standard of review for changes to this PPA, whether proposed by a Party, a non-party
or FERC acting sua sponte shall be the "public interest" standard of review set forth in
the United Gas Pipeline v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal
Power Commission v. Sierra Pacific Power Co., 350 U .S. 348 (1956).
20.5 Disclaimer of Third Party Beneficiary Ri.qhts. In executing this PPA, NSP
does not, nor should it be construed to, extend its credit or financial support for the
benefit of any third parties lending money to or having other transactions with Seller.
Nothing in this PPA shall be construed to create any duty to, or standard of care with
reference to, or any liability to, any person not a party to this PPA. No provision of this
PPA is intended to, nor shall it in any way, inure to the benefit of any customer or any
other Person not a Party so as to constitute any such Person a third-party beneficiary
under this PPA.
20.6 Relationship of the Parties.
(A) This PPA shall not be interpreted to create an association, joint
venture or partnership between the Parties or to impose any partnership obligation or
liability upon either Party. Except as specifically provided for in Section 12.7, neither
Party shall have any right, power or authority to enter into any agreement or undertaking
for, act on behalf of or act as an agent or representative of the other Party.
(B) Seller shall be solely liable for the payment of all wages, taxes and
other costs related to the employment of persons to perform such services, including all
federal, state and local income, social security, payroll and employment taxes and
statutorily mandated workers’ compensation coverage. None of the persons employed
by Seller shall be considered employees of NSP for any purpose, nor shall Seller
represent to any person that he or she is or shall become a NSP employee.
(C) The relationship between NSP and Seller shall be that of
contracting party to independent contractor. Accordingly, subject to the terms of this
PPA, NSP shall have no general right to prescribe the means by which Seller shall meet
its obligations under this PPA.
20.7 Equal Employment Opportunity Compliance Certification. Seller
acknowledges that as a government contractor NSP is subject to various federal laws,
executive orders and regulations regarding equal employment opportunity and
affirmative action. These laws may also be applicable to Seller as a subcontractor to
NSP. All applicable equal opportunity and affirmative action clauses shall be deemed to
be incorporated herein as required by federal laws, executive orders and regulations,
including 41 C.F.R. Section 60-1.4(a)(1-7).
20.8 Survival of Obliqations. Cancellation, expiration or earlier termination of
this PPA shall not relieve the Parties of obligations that by their nature should survive
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such cancellation, expiration or termination prior to the term of the applicable statute of
limitations, including warranties, remedies or indemnities, which obligations shall survive
for the period of the applicable statute of limitation.
20.9 Severability. In the event any of the terms, covenants or conditions of this
PPA, its Exhibits or the application of any such terms, covenants or conditions shall be
held invalid, illegal or unenforceable by any court or administrative body having
jurisdiction, all other terms, covenants and conditions of this PPA and their application
not adversely affected thereby shall remain in force and effect; provided, however, that
NSP and Seller shall negotiate in good faith to attempt to implement an equitable
adjustment in the provisions of this PPA with a view toward effecting the purposes of
this PPA by replacing the provision that is held invalid, illegal or unenforceable with a
valid provision, the economic effect of which comes as close as possible to that of the
provision that has been found to be invalid, illegal or unenforceable.
20.10 Complete Agreement; Amendments. The terms and provisions contained
in this PPA constitute the entire agreement between NSP and Seller with respect to the
Facility and shall supersede all previous communications, representations or
agreements, either verbal or written, between NSP and Seller with respect to the sale of
Renewable Energy from the Facility. Except for Seller’s right to amend Section 7.2
herein, this PPA may be amended, changed, modified or altered; provided, however,
that such amendment, change, modification or alteration shall be in writing and signed
by both Parties hereto; and provided further that the Exhibits attached hereto may be
changed according to the provisions of Section 13.9.
20.11 Bindinq Effect. This PPA, as it may be amended from time to time
pursuant to this Article, shall be binding upon and inure to the benefit of the Parties
hereto and their respective successors-in-interest, legal representatives and assigns
permitted hereunder.
20.12 Headin..q_~. Captions and headings used in this PPA are for ease of
reference only and do not constitute a part of this PPA.
20.13 Counterparts. This PPA may be executed in any number of counterparts,
and each executed counterpart shall have the same force and effect as an original
instrument.
20.14 Governin,q Law. The interpretation and performance of this PPA and each
of its provisions shall be governed and construed in accordance with the laws of the
State of Minnesota. The Parties hereby submit to the exclusive jurisdiction of the courts
of the State of Minnesota, and venue is hereby stipulated as Minneapolis, Minnesota.
20.15 Press Releases and Media Contact. Upon the request of either Party, the
Parties shall develop a mutually agreed upon joint press release to be issued as of the
Effective Date describing the location, size, type and timing of the Facility, the long-term
nature of this PPA and other relevant factual information about the relationship. In the
event during the Term, either Party is contacted by the media concerning this PPA or
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the Facility, the contacted Party shall inform the other Party of the existence of the
inquiry, any questions asked and the substance of any information provided to the
media.
20.16 Confidentiality:
(A) This PPA and all appendices and amendments shall be considered
proprietary and shall not be provided to a third party without prior written approval of the
other Party, unless a Party is required to disclose such information by law or court order
or when such information is already in the public domain. This PPA is not intended to
and does not place a restriction on any disclosure of CONFIDENTIAL INFORMATION
by a Party that it is legally required to make, except as set forth herein. In the event that
a Party is legally requested or required (by oral questions, interrogatories, requests for
information or documents; subpoena, civil investigative demand or similar process or, in
the opinion of its counsel, by federal or state securities or other statutes, regulations or
laws) to disclose any CONFIDENTIAL INFORMATION, that Party shall promptly notify
the disclosing Party, no later than five (5) days of such request or requirement and prior
to disclosure so that the disclosing Party may seek an appropriate protective order
and/or waive compliance with the terms of this Section.
1. In the event that no such protective order or other remedy is
obtained, or that the disclosing Party waives compliance with the terms of this PPA, the
receiving Party will furnish only that portion of the CONFIDENTIAL INFORMATION that
the receiving Party is advised by counsel is legally required.
2. In the event certain information must be provided pursuant to
a regulatory proceeding, the Parties shall take reasonable steps to protect the
confidentiality of proprietary information.
(B) The Parties acknowledge and agree that during the course of the
performance of their respective obligations under this PPA, either Party may need to
provide information to the other Party, which the disclosing party deems confidential,
proprietary or a trade secret.
1. All documentation and data, including but not limited to,
special techniques, methods, computer programs and software, that the disclosing
Party considers proprietary or trade secret and furnishes to the receiving Party and
wants the receiving Party to maintain confidential may be designated as proprietary or
trade secret by clear and distinct notation on each page of such documentation or by
equivalent method (collectively "Proprietary Data") and shall be treated as such by the
receiving Party. Documentation and data not so designated need not be considered by
the receiving Party to be proprietary or trade secret. The disclosing Party hereby grants
to the receiving Party authority to use Proprietary Data only for the purposes of this
PPA. The receiving Party agrees to keep such Proprietary Data confidential, to use it
only for work necessary to the performance of this PPA, and not to sell, transfer,
sublicense, disclose or otherwise make available any such Proprietary Data to others;
provided, that it may be disclosed by the receiving Party to the agents, employees,
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advisors, consultants, or potential or actual finance sources of the receiving Party,
subject to their acceptance of the obligations of confidentiality imposed hereby and for
whose violations of this requirement of confidentiality the receiving Party shall be
responsible.
2. Notwithstanding the preceding, this paragraph and the
restrictions on the receiving Party shall not apply to any data or documentation:
(1)
Which can be documented was in the public domain at the
time it was disclosed by the disclosing Party to the receiving
Party or at any time thereafter;
(2)
Which can be documented was independently developed by
the receiving Party; or
(3)
Which can be documented was known to the receiving Party
from an ultimate source other than the disclosing Party
without breach of this PPA by the receiving Party, or
(4)
Which is disclosed by a Party to its consultants or
contractors or other third parties who are in turn subject to a
confidentiality agreement with the disclosing Party to treat
the information at least with the care required by this PPA.
3. Buyer shall be entitled to disclose or use Proprietary Data in
any proceeding before a regulatory commission or agency if it is required or
advantageous to do so, in Buyer’s sole discretion and upon written notice to Seller. In
such an event, Buyer will take all reasonable actions to limit the scope of any disclosure
and shall only disclose any Proprietary Data subject to applicable rules and regulations
or agreements protecting its proprietary nature, and shall use reasonable efforts to
notify Seller in the event any person attempts to obtain such Proprietary Data from NSP
in the course of the proceeding.
20.17 Forward Contract. The Parties intend this PPA to be a "forward contract"
within the meaning of the United States Bankruptcy Code and that Seller be treated as
a "forward contract merchant" within the meaning of the United States Bankruptcy
Code.
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tN WITNESS WHEREOF, the Parties have executed this PPA as of the Effective Date.
Seller:
Goodhue Wind, k~
NSP:
Northern States P~)te~r :~rr~ny
Northe[rn ~ates-’Po\ e
MinnesNYCa Corporation
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EXHIBIT A
CONSTRUCTION MILESTONES
Construction Milestone
Results Seller Must Achieve
[See Section 11.1]
Seller shall establish the Security Fund in accordance
with Section 11.1.
Upon execution of PPA
Seller shall provide endorsement resolution from
County and has otherwise established C-BED
Eligibility
Not later than one hundred twenty (120) days
after MPUC approval
Seller shall obtain and provide NSP evidence of a firm
commitment by the manufacturer of the Wind
Turbines of a firm contractual commitment to supply
Wind Turbines to be used by the Facility
May15.2010
Seller shall have achieved closing on financing for the
Facility or provided NSP with proof of financial
capability to construct the Facility.
December 1, 2010
Seller shall provide NSP with evidence of complying
with that insurance coverage required prior to the
Commercial Operation Date.
December 31,2010
Commercial Operation Date is achieved.
(Commercial Operation Milestone)
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RENEWABLE ENERGY PAYMENT RATE
[Begin Trade Secret The Renewable Energy Payment Rate shall be
$67.90/MWh for the entire Term of this PPA . The Non-C-BED Rate shall be
$64.50 for the entire Term of this PPA. End Trade Secret]
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EXHIBIT B
FACILITY DESCRIPTION AND SITE MAPS
Goodhue
North
H061 Vasa
Interconnecti
Goodhue
South
H062
Goodhue
Legend
~ Goodhue Proje~ Area
~ ElecLineO7s
~ ElecSubs07s
4test wtg
~ Township
Goodhue Wind
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EXHIBIT C
NOTICE ADDRESSES
NSP
Notices:
Thomas A. Imbler
Vice President
Northern States Power Company
550 15th Street, Suite 1000
Denver, CO 80202
Phone: (303) 571-7414
Fax:
(303) 571-7021
Dana Echter
Manager, Renewable Purchases
Northern States Power Company
550 15th Street, Suite 1000
Denver, CO 80202
Phone: (303) 571-7714
Fax:
(303) 571-7441
Seller
Notices:
Jack Levi
Goodhue Wind Energy, LLC
c/o National Wind, LLC
3033 Excelsior Boulevard
Suite 525
St. Louis Park, MN 55416
Phone : (612) 746-6600
Fax: 888-867-0688
Daniel A. Yarano
Fredrikson & Byron, P.A.
200 south Sixth Street
Suite 4000
Minneapolis, MN 55402
Phone: (612) 492-7000
Fax: 612-492-7077
Operating Committee Representative: Operating Committee Representative:
Dana Echter
Manager, Renewable Purchases
Northern States Power Company
550 15th Street, Suite 1000
Denver, CO 80202
Phone: (303) 571-7714
Fax: (303) 571-7441
Chuck Burdick
Senior Wind Energy Developer
National Wind, LLC
3033 Excelsior Boulevard
Suite 525
Minneapolis, MN 55416
Phone (612) 746-6600
Fax: 888-867-0688
Alternate:
Alternate:
Howard Kiyota
Purchased Power Analyst
Northern States Power Company
550 15th Street, Suite 1000
Denver, CO 80202
Phone: (303) 571-7554
Fax: (303) 571-7441
Jack Levi
Co-Founder and Co-Chair
National Wind, LLC
3033 Excelsior Boulevard
Suite 525
Minneapolis, MN 55416
Phone: (612) 746-6600
Fax: 612-492-7077
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EXHIBIT D
INSURANCE COVERAGE
SPECIFICATION OF INSURANCE COVERAGE
[Begin Trade Secret
Type of Insurance
Minimum Limits of Coverage
Commercial General Liability (CGL)
$11,000,000 combined single limit
Each and commercial umbrella occurrence and the
aggregate, when applicable. If CGL insurance contains
a general aggregate limit, it shall apply separately to the
Facility.
CGL insurance shall be written on ISO occurrence form CG 00 01 01 96 (or a substitute form
providing equivalent coverage) and shall cover liability arising from premises, operations,
independent contractors, products/completed operations, contracts, property damage, personal
injury and advertising injury, and liability assumed under an insured contract (including the tort
liability of another assumed in a business contract), all with limits as specified above. CGL
insurance shall include ISO endorsement CG 24 17 (or an equivalent endorsement) which
modifies the definition of "Insured contract" to eliminate the exclusion of easement or license
agreements in connection with construction or demolition operations on or within 50 feet of a
railroad. There shall be no endorsement or modification of the CGL insurance limiting the scope
of coverage for liability arising from explosion, collapse or underground property damage.
NSP shall be included as an insured under the CGL policy, using ISO additional insured
endorsement CG 20 10 (or a substitute providing equivalent coverage), and under the
commercial umbrella insurance. The commercial umbrella insurance shall provide coverage over
the top of the CGL insurance, the Business Automobile Liability insurance and the Employers
Liability insurance.
The CGL and commercial umbrella insurance to be obtained by or on behalf of Seller shall be
endorsed as follows:
Such insurance as afforded by this policy for the benefit of NSP shall be primary
as respects any claims, losses, damages, expenses or liabilities arising out of
this PPA, and insured hereunder, and any insurance carried by NSP shall be
excess of and noncontributing with insurance afforded by this policy.
Business Automobile Liability
$1,000,000 combined single limit (each accident),
including all Owned, Non-Owned, Hired and Leased
Autos
Business Automobile Liability insurance shall be written on ISO form CA 00 01, CA 00 05, CA 00
12, CA 00 20, or a substitute form providing equivalent liability coverage. If necessary, the policy
shall be endorsed to provide contractual liability coverage equivalent to that provided in the 1990
and later editions of CA 00 01.
Workers Compensation
Statutory Requirements. Seller may comply with these
requirements through the use of a qualified selfinsurance plan.
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INSURANCE COVERAGE
Type of Insurance
Minimum Limits of Coverage
Employers Liability
$1,000,000 each accident for bodily injury by accident,
or
$1,000,000 each employee for bodily injury by disease.
Builder's Risk
Replacement value of the Facility.
Builder's Risk insurance, or an installation floater, shall include coverage for earthquake and
flood, collapse, faulty workmanship, materials and design, testing of machinery or equipment,
freezing or changes in temperature, debris removal and partial occupancy.
Environmental Impairment Liability
$5,000,000 each occurrence.
All-Risk Property insurance covering
Full replacement value of the Facility. A deductible may
physical loss or damage to the Facility be carried which
deductible shall be the absolute responsibility of Seller.
All-Risk Property insurance shall include: (i) coverage for fire, flood, wind and storm, tornado and
earthquake with respect to facilities similar in construction, location and occupancy to the Facility,
with sublimits of no less than $10,000,000 each for flood and earthquake; and (ii) Boiler and
Machinery insurance covering all objects customarily subject to such insurance, including boilers
and turbines, in an amount equal to their full replacement value.
Business Interruption insurance
Amount required to cover Seller's continuing or
increased expenses, resulting from full interruption, for a
period of twelve (12) calendar months
Business Interruption insurance shall cover loss of revenues and any increased expense to
resume operations attributable to the Facility by reason of total or partial suspension or delay of,
or interruption in, the operation of the Facility as a result of an insured peril covered under
Property insurance as set forth above, to the extent available on commercially reasonable terms
as determined by NSP, subject to a reasonable deductible which shall be the responsibility of
Seller. Notwithstanding any other provision of this PPA, Seller shall not be required to have
Business Interruption insurance until the Commercial Operation Date.
End Trade Secret]
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EXHIBIT E
SELLER’S REQUIRED GOVERNMENTAL AUTHORITY PERMITS, CONSENTS,
APPROVALS, LICENSES AND AUTHORIZATIONS TO BE OBTAINED
Site Permit from State of Minnesota
County Resolutions for Goodhue County, Minnesota
C-BED Letter of Qualifications from Office of Energy Security
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EXHIBIT F
Seller’s Direct and Indirect Parent Organizations
National Wind, LLC is the sole manager of Seller,
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EXHIBIT G
FORM OF LETTER OF CREDIT
[LETTERHEAD OF ISSUING BANK]
IRREVOCABLE STANDBY LETTER
OF CREDIT NO:
DATE OFISSUANCE:
INITIAL EXPIRATION DATE:[MUST BE AT
LEAST ONE YEAR AFTER DATE OF
ISSUANCE]
BENEFICIARY:
APPLICANT:
NORTHERN STATES POWER
COMPANY
[INSERT NAME OF SELLER UNDER THE
PPA]
ATTN:
550 15TH STREET, SUITE 1000
DENVER, CO 80202
AS THE ISSUING BANK ("ISSUER"), WE, [NAME OF ISSUING BANK], HEREBY
ESTABLISH THIS IRREVOCABLE STANDBY LETTER OF CREDIT NO.
IN
FAVOR OF THE ABOVE-NAMED BENEFICIARY ("BENEFICIARY") FOR THE
ACCOUNT OF THE ABOVE-NAMED APPLICANT ("APPLICANT") IN THE AMOUNT
U.S.
OF USD S
(.
DOLLARS).
BENEFICIARY MAY DRAW ALL OR ANY PORTION OF THIS LETTER OF CREDIT
AT ANY TIME AND FROM TIME TO TIME AND ISSUER WILL MAKE FUNDS
IMMEDIATELY AVAILABLE TO BENEFICIARY UPON PRESENTATION OF
BENEFICIARY’S DRAFT AT SIGHT IN SUBSTANTIALLY THE FORM ATTACHED
HERETO AS EXHIBIT "A" ("SIGHT DRAFT"), DRAWN ON ISSUER AND
ACCOMPANIED BY THIS LETTER OF CREDIT. ALL SIGHT DRAFTS MUST BE
SIGNED ON BEHALF OF BENEFICIARY, AND THE SIGNATOR MUST INDICATE HIS
OR HER TITLE OR OTHER OFFICIAL CAPACITY. NO OTHER DOCUMENTS WILL
BE REQUIRED TO BE PRESENTED. ISSUER WILL EFFECT PAYMENT UNDER
THIS LETTER OF CREDIT WITHIN TWO (2) BANKING DAYS AFTER
PRESENTMENTOF THE SIGHT DRAFT. PAYMENT SHALL BE MADE IN U.S.
DOLLARS WITHISSUER’S OWN FUNDS INIMMEDIATELY AVAILABLE FUNDS.
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ISSUER WILL HONOR ANY SIGHT DRAFT PRESENTED IN SUBSTANTIAL
COMPLIANCE WITH THE TERMS OF THIS LETTER OF CREDIT AT ISSUER’S
LETTERHEAD OFFICE, THE OFFICE LOCATED AT
OR ANY OTHER SERVICE OFFICE OF ISSUER ON OR BEFORE THE ABOVE
STATED EXPIRATION DATE, AS SUCH EXPIRATION DATE MAY BE EXTENDED
HEREUNDER. PARTIAL AND MULTIPLE DRAWS AND PRESENTATIONS ARE
PERMITTED ON ANY NUMBER OF OCCASIONS. FOLLOWING ANY PARTIAL
DRAW, ISSUER WILL ENDORSE THIS LETTER OF CREDIT AND ON THE SAME
DAY RETURN THE ORIGINAL TO BENEFICIARY EITHER BY HAND DELIVERY,
OVERNIGHT REGISTERED UNITED STATES MAIL OR OVERNIGHT REGISTERED
COURIER.
ISSUER ACKNOWLEDGES THAT THIS LETTER OF CREDIT IS ISSUED PURSUANT
TO THE PROVISIONS OF THAT CERTAIN RENEWABLE ENERGY PURCHASE
AGREEMENT BETWEEN THE BENEFICIARY AND THE APPLICANT DATED AS OF
20
(AS THE SAME MAY HAVE BEEN OR MAY BE
AMENDED FROM -I:IME--~O TIME, THE "PPA").
NOTWITHSTANDING ANY
REFERENCE IN THIS LETTER OF CREDIT TO THE PPA OR ANY OTHER
DOCUMENTS, INSTRUMENTS OR AGREEMENTS, OR REFERENCES IN THE PPA
TO ANY OTHER DOCUMENTS, INSTRUMENTS OR AGREEMENTS, THIS LETTER
OF CREDIT CONTAINS THE ENTIRE AGREEMENT BETWEEN BENEFICIARY AND
ISSUER RELATING TO THE OBLIGATIONS OF ISSUER HEREUNDER.
THIS LETTER OF CREDIT WILL BE AUTOMATICALLY EXTENDED WITHOUT
AMENDMENT FOR A PERIOD OF ONE (1) YEAR FROM THE EXPIRATION DATE
HEREOF, AS EXTENDED, UNLESS AT LEAST THIRTY (30) DAYS PRIOR TO THE
EXPIRATION DATE, ISSUER NOTIFIES BENEFICIARY BY REGISTERED MAIL
THAT IT ELECTS NOT TO EXTEND THIS LETTER OF CREDIT FOR SUCH
ADDITIONAL PERIOD. NOTICE OF NON-EXTENSION WILL BE GIVEN BY ISSUER
TO BENEFICIARY AT BENEFICIARY’S ADDRESS SET FORTH HEREIN OR AT
SUCH OTHER ADDRESS AS BENEFICIARY MAY DESIGNATE TO ISSUER IN
WRITING AT ISSUER’S LETTERHEAD ADDRESS.
THIS LETTER OF CREDIT IS FREELY TRANSFERABLE IN WHOLE OR IN PART,
AND THE NUMBER OF TRANSFERS IS UNLIMITED. ISSUER AGREES THAT IT
WILL EFFECT ANY TRANSFERS IMMEDIATELY UPON PRESENTATION TO
ISSUER OF THIS LETTER OF CREDIT AND A COMPLETED WRITTEN TRANSFER
REQUEST SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT "B."
SUCH TRANSFER WILL BE EFFECTED AT NO COST TO BENEFICIARY. ANY
TRANSFER FEES ASSESSED BY ISSUER WILL BE PAYABLE SOLELY BY
APPLICANT, AND THE PAYMENT OF ANY TRANSFER FEES WILL NOT BE A
CONDITION TO THE VALIDITY OR EFFECTIVENESS OF THE TRANSFER OR THIS
LETTER OF CREDIT.
ISSUER WAIVES ANY RIGHTS IT MAY HAVE, AT LAW OR OTHERWISE, TO
SUBROGATE TO ANY CLAIMS BENEFICIARY MAY HAVE AGAINST APPLICANT OR
APPLICANT MAY HAVE AGAINST BENEFICIARY.
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THIS STANDBY LETTER OF CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS
AND
PRACTICE
FOR
DOCUMENTARY
CREDITS
(2007
REVISION),
INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION
NO. 600 (THE "UCP"),
EXCEPT TO THE EXTENT THAT THE TERMS HEREOF ARE
INCONSISTENT WITH
THE PROVISIONS OF THE UCP, INCLUDING ARTICLES 14.b. AND 36 OF THE UCP,
IN WHICH CASE THE TERMS OF THIS LETTER OF CREDIT SHALL GOVERN.
WITH RESPECT TO ARTICLE 14.b OF THE UCP, ISSUER SHALL HAVE A
REASONABLE AMOUNT OF TIME, NOT TO EXCEED THREE (3) BANKING DAYS
FOLLOWING THE DATE OF ISSUER’S RECEIPT OF DOCUMENTS FROM THE
BENEFICIARIES (TO THE EXTENT REQUIRED HEREIN), TO EXAMINE THE
DOCUMENTS AND DETERMINE WHETHER TO TAKE UP OR REFUSE THE
DOCUMENTS AND TO INFORM BENEFICIARY ACCORDINGLY.
IN THE EVENT OF AN ACT OF GOD, RIOT, CIVIL COMMOTION, INSURRECTION,
WAR OR ANY OTHER CAUSE BEYOND ISSUER’S CONTROL THAT INTERRUPTS
ISSUER’S BUSINESS AND CAUSES THE PLACE FOR PRESENTATION OF THIS
LETTER OF CREDIT TO BE CLOSED FOR BUSINESS ON THE LAST DAY FOR
PRESENTATION, THE EXPIRY DATE OF THIS LETTER OF CREDIT WILL BE
AUTOMATICALLY EXTENDED WITHOUT AMENDMENT TO A DATE THIRTY (30)
CALENDAR DAYS AFTER ISSUER REOPENS FOR BUSINESS.
ISSUER:
By:
AUTHORIZED SIGNATURE
Name:
Its:
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EXHIBIT "A"
TO LETTER OF CREDIT
SIGHT DRAFT
USD $
At sight, pay to the order of [Name of Beneficiary to be inserted], the amount of
(
and 00/100ths U.S. Dollars).
Drawn under [Name of Issuer to be inserted] Standby Letter of Credit No.
Dated:
., 20
[Name of Beneficiary to be inserted]
By:
Name:
Its:
[Title or Other Official Capacity to be
inserted]
To:
[Name and Address of Issuer to be inserted]
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EXHIBIT "B"
TO LETTER OF CREDIT
FORM OF TRANSFER REQUEST
IRREVOCABLE STANDBY LETTER OF
CREDIT NO:
CURRENT BENEFICIARY:
APPLICANT:
TO: [NAME OF ISSUING BANK]
The undersigned, as the current "Beneficiary" of the above referenced Letter of Credit,
hereby requests that you reissue the Letter of Credit in favor of the transferee named
below [INSERT TRANSFEREE NAME AND ADDRESS BELOVV]:
From and after the date this transfer request is delivered to the Issuer, the transferee
shall be the "Beneficiary" under the Letter of Credit for all purposes and shall be entitled
to exercise and enjoy all of the rights, privileges and benefits thereof.
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EXHIBIT H
C-BED ELIGIBILITY DOCUMENTATION
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ATTACHMENT 1
BOARD OF COUNTY COMMISSIONERS
GOODHUE COUNTY, MINNESOTA
December 4, 2008
Moved by C/Bryant, seconded by C/Allen, and carried to approve the following resolution
acknowledging Community-Based Energy Development (C-BED) status for the Goodhue wind LLC
Wind Energy Project (Goodhue Wind):
WHEREAS, it is the policy of the State of Minnesota to foster Community-Based Energy
Development (C-BED) projects; and
WI-I~REAS, the state C-BED statute calls for County Board approval of C-BED projects - Minn.
Star. § 216B.1612, subd.2 (f) (3); and
WHEREAS, the development of.small scale wind projects in Goodhue County provides
economic opportunity for residents of the County; and ~
WHEREAS, the Goodhue Wind Energy Project is proposed for development in Goodhue and Belle
Creek Townships will be owned by a Minnesota limited liability company organized by Minnesota
Residents; and
WHEREAS. the developers understand and accept responsibility for securing all necessary
permits for development of wind turbines and towers; and
WI-IEREAS, this project calls for the development of up to 78 megawatts of wind energy to be
produced by approximately 39 2.0 MW turbines; and
WHEREAS, the projects are structured to ensure that a majority of the finimcial benefit of the
project accrues to the local owners of the project.
NOW, THEREFORE, BE IT RESOLVED, that the Goodhue County Board of Commissioners
hereby indicates its support for the development of the Goodhue Wind Energy Project as a C-BED
project, subject to the authority of said County Board to grant or deny any applications for permits or
licenses for said project as may be provided by state statute or local ordinances, roles or regulations.
State of Minnesota
County of Goodhue
Bryant
Yes X
No__
No__
Allen
Yes X
Seifert
Yes _X~ No__
Rechtzigel Yes _X___ No__
Samuelson Yes _X~ No__
I, Scott O. Ameson, duly appointed, County Administrator of the County of
Goodhue, State of Minnesota, do hereby certify that I have compared the foregoing
copy of a resolution with the original minutes of the proceedings of the Boardthof
County Commissioners, Goodhue County, Minnesota at their session held on the 4
day of December, 2008, now on file in my office, and have found the same to be a
tree and correct copy thereof.
Witness my hand and official seal at Red Wing, Minnesota, this 4~ day of
December, 2008.
~.~J ~
Scott O. Ameson
County Administrator
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EXHIBIT I
GUARANTY AGREEMENT
This GUARANTY AGREEMENT (this "Guaranty") is made as of the __ day of
,200_, by
., a corporation duly organized and existing
under the laws of the State of
., U.S.A., with its head office situated at
U.S.A., (herein called "Guarantor"), for the benefit of Northern States
Power Company, a Minnesota corporation (herein called "Beneficiary"). (Guarantor and
Beneficiary are individually referred to herein as a "Party" and collectively as the
"Parties.")
RECITALS:
a limited liability company organized
WHEREAS,
under the laws of the state of
("LLC"), a
of Guarantor,
owns a wind power electric generation facility having installed capacity of approximately
MW to be constructed on a site located
(the
"Project"); and
WHEREAS, LLC desires to sell and deliver to Beneficiary at the Point of
Delivery, and Beneficiary desires to purchase, the Renewable Energy to be generated
by the Project and associated Renewable Energy Credits; and
WHEREAS, to that end, LLC and Beneficiary have entered into that certain CBED Renewable Energy Purchase Agreement dated as of
., as
amended from time to time (the "PPA"); and
WHEREAS, this PPA requires that LLC cause to be provided a guarantee of
LLC’s payment obligations under this PPA, and Guarantor is willing to enter into this
Guaranty to satisfy the conditions of this PPA.
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the Parties hereto agree as follows:
1. Capitalized terms used but not defined herein shall have the meanings given to
them in this PPA.
2. Guarantor hereby unconditionally and irrevocably guarantees the full and prompt
payment, when due of all payment obligations of LLC under this PPA, up to and no
more than two million nine hundred twenty five thousand ($2,925,000), as primary
obligor and not merely as surety and Guarantor shall immediately upon first demand in
writing by Beneficiary pay such obligations and shall indemnify and keep indemnified
Beneficiary against any and all losses, damages, claims, costs, charges and expenses
howsoever arising from LLC’s failure to pay such obligations. Guarantor agrees to pay
all expenses, including reasonable attorneys’ fees, paid or incurred by Beneficiary in
endeavoring to collect such payment obligations, or any part thereof, and in enforcing
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this Guaranty. This Guaranty is an absolute, unconditional, direct and immediate
guaranty of payment, and not of collection.
3. The liability of Guarantor hereunder shall not be reduced or discharged by any
alteration in the relationship between Beneficiary and LLC that has been consented to
by LLC in writing (with or without the knowledge or consent of Guarantor) or by any
forbearance or indulgence by Beneficiary towards LLC or Guarantor whether as to
payment, time, performance or otherwise. Each and every right, remedy and power
hereby granted to Beneficiary or allowed to it by law or other agreement shall be
cumulative and not exclusive of any other and may be exercised by the Beneficiary from
time to time.
4. Guarantor agrees to make any payment due hereunder upon first written demand
without set-off or counterclaim and without any legal formality such as protest or notice
being necessary and waives all privileges or rights that it may have as a guarantor,
including demand, presentment, protest, notice of acceptance of this Guaranty and of
any action taken in reliance hereon, any right to require Beneficiary to claim payment or
to exhaust remedies against LLC or any other person and all other demands and
notices of any description in connection with this Guaranty, LLC’s payment obligations
or otherwise.
5. The obligations of Guarantor hereunder shall continue in full force and effect after
expiry or termination of this PPA until all of LLC’s payment obligations and liabilities
under this PPA have been fully discharged. Guarantor consents and acknowledges that
LLC and Beneficiary may modify, without Guarantor’s consent, any of the terms,
covenants or conditions contained in this PPA evidencing LLC’s payment obligations
related hereto without in any manner impairing or affecting this Guaranty or releasing
Guarantor.
6. This Guaranty shall remain in fully force and effect and be binding upon
Guarantor and its successors and permitted assigns, and shall inure to Beneficiary and
its successors and permitted assigns, until all of the payment obligations under this PPA
have been satisfied in full. The Guarantor may assign its obligations under this
Guaranty only with the prior written consent of Beneficiary. Any reasonable uncertainty
on the part of Beneficiary concerning the ability on the part of any potential assignee of
the Guarantor to carry out the Guarantor’s obligations hereunder shall be considered a
reasonable and sufficient basis for Beneficiary to withhold its consent, unless and until
the potential assignee can satisfy Beneficiary, in Beneficiary’s commercially reasonably
exercised discretion, that the assignee is capable of fully performing the obligations of
Guarantor hereunder.
7. Notwithstanding anything to the contrary above, in the event of any claim under
this Guaranty, Guarantor shall be entitled to assert any defense, set-off or counterclaim
that LLC could assert had such claim been made directly against any person under this
PPA except defenses based upon (i) lack of authority of LLC to enter into or perform its
obligations under this PPA, (ii) enforceability of this PPA or (iii) any insolvency,
bankruptcy, reorganization, arrangement, composition, liquidation, dissolution or similar
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proceeding with respect to LLC. Guarantor shall not exercise of or enforce any right of
contribution, reimbursement, recourse or subrogation available to Guarantor against
any person liable for payment of LLC’s payment obligations under this PPA unless or
until such payment obligations have been fully paid and discharged.. If any amount
shall be paid to Guarantor in violation of this provision, such amount shall be held for
the benefit of Beneficiary and shall forthwith be paid to Beneficiary to be credited and
applied to the payment obligations under this PPA, whether matured or unmatured.
8. In the event there is any dispute under this PPA that relates to a sum being
claimed under this Guaranty, which dispute is submitted to arbitration or judicial
resolution, the obligations under this Guaranty shall be suspended pending the outcome
of such arbitration or judicial resolution and Guarantor further agrees that any award
resulting from such arbitration or judicial resolution shall be conclusive and binding on it
for purposes of determining its obligation under this Guaranty.
9. This Guaranty shall be governed by and construed in accordance with the laws
of the State of Minnesota; provided, however, that any provision of such law invalidating
any provision of this Guaranty or modifying the intent of the Parties as expressed in the
terms of this Guaranty shall not apply. This Guaranty shall not be modified, amended,
revised, revoked, terminated, changed or varied in any way whatsoever, except by the
express terms of a writing duly executed by Beneficiary. The Parties hereby submit to
the non-exclusive jurisdiction of the Federal courts and the courts of the State of
Minnesota with respect to all actions brought with respect to this Guaranty, and venue is
hereby stipulated as Hennepin County, Minnesota. Each Party consents to such nonexclusive jurisdiction and waives any and all objections it might have thereto. Any
proceedings arising out of or relating to this Guaranty shall be by a judge trial without a
jury and the right to a jury trial is waived to the fullest extent permitted by applicable law.
10. All notices, requests, claims, demands and other communications shall be in
writing and shall be given (and shall be deemed to have been duly given upon receipt)
by delivery in the manner contemplated in this Guaranty, addressed as follows:
If to Guarantor:
If to Beneficiary:
c/o Xcel Energy Services Inc.
550 15th Street, Suite 1000
Denver, CO 80202
Attention: Thomas A. Imbler
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Or to such other address as either Guarantor or Beneficiary shall from time to time
specify to the other party.
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed
by its authorized representative as of the date first written above,
By:
Name:
Title:
Accepted:
NORTHERN STATES POWER COMPANY
By:
Thomas A. Imbler, Vice President, Commercial
Operations, Xcel Energy Services Inc., as
Agent for Northern States Power Company
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EXHIBIT J
XCEL ENERGY SERVICES INC,
NOTICE OF CUSTOMER VOLUNTARY WRITTEN CONSENT
The FERC Standards of Conduct Regulations 18 CFR Part 358.5(b)(4) state that
a non-affiliated transmission customer may voluntarily consent, in writing, to allow a
transmission provider to share the non-affiliated customer’s information with the
transmission provider’s marketing or energy affiliates. Such transmission provider must
post notice on the OASIS or the transmission provider’s Internet website of that consent
along with a statement that it did not provide any preferences, either operational or raterelated, in exchange for that voluntary consent.
Signature of this form by the undersigned customer serves as notice of voluntary
written consent allowing the Xcel Energy Services Inc. Wholesale Merchant Function to
engage in non-public transmission/interconnection related discussions associated with
the existing and a possible future power purchase agreement between Northern States
Power Company and the undersigned customer. Xcel Energy Services Inc. will
maintain and protect the confidentiality of all information received from Northern States
Power Company pertaining to the undersigned customer’s transmission/interconnection
facilities.
Customer:
Signed:
Print Name:
Title:
Date:
Contract or Project Name:
Please send a signed written consent letter to Northern States Power Company and a
copy to the Xcel Energy Services Inc. Wholesale Merchant Function at the addresses
listed:
Northern States Power Company
Xcel Energy Services Inc. Wholesale
Merchant Function
Mark Moeller
Transmission Account Representative
Xcel Energy Services, Inc.
250 Marquette Avenue
Suite 800
Minneapolis, Minnesota 55401
Tom McDonough
Manager, Transmission Access
Xcel Energy Services, Inc.
250 Marquette Avenue
Suite 720
Minneapolis, Minnesota 55401
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EXHIBIT K
DATA COLLECTION
The following terms and conditions shall govern Seller’s provision of data pursuant to
Section 13.6 of this PPA:
a. Seller will transmit and provide to NSP certain real-time data and other
information with regard to its generation of wind energy at its facilities (collectively, the
"Data"). The Data that Seller agrees to provide, and that NSP shall receive, for each
wind farm owned or operated by Seller includes:
Wind Farm Data Points in Order of Importance.
1.
Nine (9) data points from each wind turbine:
5.
6.
7.
8.
9.
Turbine generation (kW)
Wind Speed (mph)
Turbine Status-Availability - (or turbine status flag from which turbine
availability can be derived)
Nacelle Position* - (North Offset from true north in Degrees)
Yaw Error* (degrees relative to true north)
Wind Direction* - (degrees relative to true north)
Blade Pitch
Voltage (3 Phase)
Latitude, Longitude, Hub Height at every wind turbine.
* = need at least two of the three points.
2.
Eight (8) data points from each Meteorological Tower (MET Tower):
2.
3.
4.
5.
6.
7.
8.
Wind Speed** (mph)
Wind Direction** (degrees relative to true north)
Temperature (F)
Pressure (mb)
Air Density (kg/m^3)
Maximum Wind Gust** (mph)
Anemometer Height** (m)
Latitude, Longitude, Heights, Angle (if Applicable) of all measured met
tower data.
** = at all metered heights if available.
The Parties may amend these data requirements from time to time by mutual
agreement.
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b. NSP shall have the right to use the Data for only the purposes of managing,
improving the operations of, forecasting or modeling renewable electric energy and
such other purposes as the parties hereto may mutually agree to in writing from time to
time (collectively, the "Purposes"). The Data is owned by and shall continue to be
owned by Seller and, except as contemplated by this PPA and in order to accomplish
the Purposes, may not be sold, licensed, sub-licensed, or hypothecated, in any way
without the prior written permission of Seller.
c. The parties agree to establish a remote server connection, with NSP establishing
the connection to Seller’s servers, by which Seller will aggregate and deliver the Data
through Seller’s servers to NSP’s servers. NSP’s and Seller’s servers shall satisfy the
following specifications and process instructions:
NSP will provide Seller with the IP address of the NSP DMZ PI Server.
Seller will provide the IP address of externally resolved Seller internal PI
Server.
Seller will create an outbound flrewall rule to provide Network Address
Translation (NAT) of the internal address of their PI Server over port TCP
5450.
NSP will establish an inbound firewall rule derived from the Seller PI
Server IP address over port TCP 5450.
NSP and Seller will work together to coordinate a router to router Internet
Protocol Security (IPSec) tunnel between NSP’s data center and Seller
Datacenter.
NSP and Seller will establish a PI to PI connection over the IPSec tunnel.
The Parties may amend these specifications from time to time by mutual agreement.
d. NSP will provide reliable remote telemetry unit ("RTU") connection at the Point of
Interconnection. Seller will provide Data via Seller’s RTU to NSP’s RTU without the
need to co-locate server equipment. Seller shall provide NSP all specifications
necessary for NSP to properly receive the Data in a readable format. NSP shall make
such modifications to its system as are (i) reasonably necessary for purposes of
complying with such previously disclosed specifications and (ii) consistent with Prudent
Electric Industry Practice. Should Seller’s system specifications change, Seller shall
promptly provide NSP with the revised specifications, in writing, with sufficient lead-time
in accordance with Prudent Electric Industry Practice to permit NSP to modify its system
accordingly.
e. NSP shall, at its expense, take commercially reasonable steps to protect against
unauthorized third party access to, use and disclosure of the Data obtained by NSP
under this PPA and shall comply with the reasonable security policies of Seller with
respect to access to the Data that have been previously provided to NSP.
f. Subject to the terms of Section 13.6 of this PPA, Seller shall be responsible for
providing and compiling all Data in electronic format and on a real-time basis. Seller
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shall make such modifications to Seller’s servers, computer network, control system and
other equipment located at Seller’s wind-energy data collection facility(ies) (the
"Network") as are reasonably necessary for purposes of providing and compiling such
Data. NSP shall reimburse Seller for all reasonable, direct out-of-pocket expenses preapproved in writing by NSP and actually incurred by Seller solely in connection with any
such Network modifications, subject to Seller’s production of reasonably detailed
invoices and supporting documentation that such expenses have been incurred by
Seller solely in connection with such Network modifications. Seller shall submit invoices
to NSP within twenty-five (25) days after the end of each calendar month during which
any such expenses are incurred, specifying the amount of expenses incurred by Seller
that are subject to reimbursement by NSP under this PPA. NSP shall remit payment, in
the amounts called for by this PPA, for all such expenses within thirty (30) days after
receipt of such invoice.
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2409797v3
10/19109
4-127
CERTIFICATE OF SERVICE
I, Nancy A. Haley, hereby certify that I have this day served copies or summaries of
the foregoing document on the attached list of persons.
xx by depositing a true and correct copy thereof, properly enveloped
with postage paid in the United States Mail at Minneapolis,
Minnesota
xx electronic filing
DOCKET NO. E002/M-09-______
Dated this 20th day of November 2009
/s/ Nancy A Haley
______________________
Nancy A. Haley
Service List Name
First Name
Last Name
Email
Company Name
Address
Delivery Method
View Trade Secret
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Alan
Jenkins
[email protected]jenkinsatlaw.com
Jenkins at Law, LLC
Suite 100 2265 Roswell
Road
Paper Service
No
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Burl W.
Haar
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Byron E.
Starns
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Christopher
Anderson
[email protected]
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Christopher
Clark
[email protected] Xcel Energy
ergy.com
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
David W.
Niles
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Douglas
Larson
[email protected]
m
Dakota Electric Association 4300 220th Street W
Farmington,
MN
55024
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Eric
Swanson
[email protected]
Winthrop & Weinstine
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
James J.
Bertrand
[email protected]
om
Leonard Street &
Deinard
Suite 2300
150 South Fifth Street
Minneapolis,
MN
55402
Paper Service
No
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
James M.
Strommen
[email protected]
Kennedy & Graven,
Chartered
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis,
MN
55402
Paper Service
No
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Jeffrey A.
Daugherty
jeffreyCenterPoint Energy
[email protected]
rgy.com
800 LaSalle Ave
Minneapolis,
MN
55402
Paper Service
No
Marietta,
GA
30062
[email protected]
MN Public Utilities
Commission
Suite 350
121 7th Place East
St. Paul,
MN
551012147
Electronic Service
No
Leonard Street and
Deinard
150 South 5th Street
Suite 2300
Minneapolis,
MN
55402
Paper Service
No
Minnesota Power
30 West Superior Street
Duluth,
MN
558022093
Electronic Service
No
5th Floor
414 Nicollet Mall
Minneapolis,
MN
554011993
Paper Service
No
Suite 300
200 South Sixth Street
Minneapolis,
MN
55402
Paper Service
No
Paper Service
No
Suite 3500 225 South Sixth Paper Service
Street
No
Avant Energy Services
Minneapolis,
MN
554024629
Service List Name
First Name
Last Name
Email
Company Name
Address
Delivery Method
View Trade Secret
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
John
Lindell
[email protected]
OAG-RUD
900 BRM Tower
445 Minnesota St
St. Paul,
MN
551012130
Electronic Service
No
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Julia
Anderson
[email protected] MN Office Of The Attorney
s
General
1400 BRM Tower
445 Minnesota St
St. Paul,
MN
551012131
Electronic Service
No
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Ken
Smith
[email protected] District Energy St. Paul Inc. 76 W Kellogg Blvd
om
St. Paul,
MN
55102
Electronic Service
No
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Lisa
Veith
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Michael
Krikava
[email protected]
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Michael
Sarafolean
[email protected] Gerdau Ameristeel US, Inc. 4221 W Boy Scout Blvd Ste Paper Service
steel.com
600
Tampa,
FL
33607
No
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Pam
Marshall
[email protected]
Energy CENTS Coalition
823 7th St E
St. Paul,
MN
55106
Paper Service
No
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Richard
Savelkoul
[email protected]
Felhaber, Larson, Fenlon
& Vogt, P.A.
444 Cedar St Ste 2100
St. Paul,
MN
55101-2136
Paper Service
No
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Robert S
Lee
[email protected]
Mackall Crounse &
Moore Law Offices
1400 AT&T Tower
901 Marquette Avenue
Minneapolis,
MN
554022859
Paper Service
No
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Ron
Spangler, Jr.
[email protected]
Otter Tail Power Company
215 So. Cascade St.
PO Box 496
Fergus Falls,
MN
565380496
Electronic Service
No
2
City of St. Paul
400 City Hall and
Courthouse
15 West Kellogg Blvd.
St. Paul,
MN
55102
Paper Service
No
Briggs And Morgan, P.A.
2200 IDS Center80 South
8th Street
Minneapolis,
MN
55402
Electronic Service
No
Service List Name
First Name
Last Name
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Ron
Elwood
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
SaGonna
Thompson
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Sharon
GEN_SL_Northern States
Power Company dba Xcel
Energy-Elec_Xcel Miscl
Electric
Steven
Email
Company Name
Address
Delivery Method
View Trade Secret
Legal Services Advocacy
Project
2324 University Ave Ste
101
St. Paul,
MN
55114
Paper Service
No
414 Nicollet Mall FL 7
Electronic Service
No
Electronic Service
No
Paper Service
No
[email protected] Xcel Energy
nergy.com
Minneapolis,
MN
554011993
Ferguson
[email protected] State of MN - DOC
.us
85 7th Place E Ste 500
Saint Paul,
MN
551012198
Bosacker
City of Minneapolis
3
City Hall, Room 301M
350 South Fifth Street
Minneapolis,
MN
554151376
Service List Name
First Name
Last Name
Email
Company Name
Address
Delivery Method
View Trade Secret
OFF_SL_05-1887_1
Burl W.
Haar
[email protected]
MN Public Utilities
Commission
Suite 350
121 7th Place East
St. Paul,
MN
551012147
Electronic Service
Yes
OFF_SL_05-1887_1
Christopher
Clark
[email protected] Xcel Energy
ergy.com
5th Floor
414 Nicollet Mall
Minneapolis,
MN
554011993
Paper Service
No
OFF_SL_05-1887_1
David
Moeller
[email protected]
Minnesota Power
30 W Superior St
Duluth,
MN
558022093
Electronic Service
No
OFF_SL_05-1887_1
George
Crocker
North American Water
Office
PO Box 174
Lake Elmo,
MN
55042
Paper Service
No
OFF_SL_05-1887_1
John
Lindell
[email protected]
OAG-RUD
900 BRM Tower
445 Minnesota St
St. Paul,
MN
551012130
Electronic Service
No
OFF_SL_05-1887_1
Julia
Anderson
[email protected] MN Office Of The Attorney
s
General
1400 BRM Tower
445 Minnesota St
St. Paul,
MN
551012131
Electronic Service
No
OFF_SL_05-1887_1
Lisa
Daniels
[email protected]
Windustry
2105 First Avenue S.
Minneapolis,
MN
55404
Paper Service
No
OFF_SL_05-1887_1
Mark
Lindquist
The Minnesota Project
1026 North Washington
Street
New Ulm,
MN
56073
Paper Service
No
OFF_SL_05-1887_1
SaGonna
Thompson
414 Nicollet Mall FL 7
Electronic Service
No
Electronic Service
Yes
Electronic Service
No
[email protected] Xcel Energy
nergy.com
Minneapolis,
MN
554011993
OFF_SL_05-1887_1
Sharon
Ferguson
[email protected] State of MN - DOC
.us
85 7th Place E Ste 500
Saint Paul,
MN
551012198
OFF_SL_05-1887_1
Sherry
Gaugler
[email protected] Jeffrey C. Paulson &
Associates, Ltd.
Suite 325
7301 Ohms Lane
Edina,
MN
55439
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