HomeMy WebLinkAbout12 Western Geopower Geothermal Power plant Agenda Item #
TRUCKEE DONNER
Memorandum
To: Board of Directors
From: Stephen Hollabaugh — Assistant General Manager
Date: February 1, 2008
Subject: Consideration of a Third Phase Agreement with NCPA for the Western
GeoPower Incorporated geothermal power plant.
1. WHY THIS MATTER IS BEFORE THE BOARD
Mission Statement Objective:
2. Provide an adequate, reliable and high quality electric supply and distribution system
to meet current and future needs.
5. Manage the District in an environmentally sound manner.
Goals:
2.5 Procure and contract for low cost electric power supplies to reliably meet current and
future loads.
5.1 District will seek power supply from an energy resource mix that satisfies its
Renewable Portfolio Standard.
5.5 District will conduct its business in an environmentally lawful manner.
2. BACKGROUND
The Western GeoPower Incorporated (WGI) plans to develop a new geothermal power
plant at the Geysers by 2010-11 with an expected capacity of 25-35 MW. WGI advised
NCPA approximately a month ago that it was interested in entering into a Power Purchase
Agreement (PPA) with NCPA. NCPA held a special Commission meeting on December
19, 2007, at which NCPA discussed the WGI project, sought members' advice, and the
Commission authorized the General Manager to proceed with formal negotiations with
WGI.
The NCPA General Manager and staff has negotiated with WGI and brought the PPA to
the January 25th NCPA commission meeting where it was approved. The basic terms of
the Agreement are: (1) a take-and-pay form of contract; (2) at a negotiated price and
terms, and (3) NCPA would own all the energy, capacity and environmental attributes of
the facility.
Page 1 of 2
NCPA staff at the same time developed a Third Phase Agreement for the members to
participate in this project. This Agreement is attached. The basis for this Agreement was
the Market Power Purchase Agreement currently being used by some of the NCPA
members.
3. NEW INFORMATION
Both of these Agreements (PPA and Third Phase) were discussed at the January 25tt'
NCPA Commission meeting and passed by the Commission. This authorization was
subject to participating members approving the Third Phase Agreement. The basic terms
of the Third Phase Agreement are: (1) a take-and-pay form of contract for 20 years; (2)
Participants will purchase the project output at a price of ($98.00) per megawatt hour; (3)
Truckee Donner PUD's proposed percentage share is projected to be 1.5% which equates
to approximately 0.38 MW at a plant output of 25MW.
Steve Gross, District General Counsel has reviewed the Third Phase Agreement.
RECOMMENDATION:
Staff recommends the Board approve the Third Phase Agreement and authorize the Board
President to sign and make any and all non-substantive changed as deemed necessary
per the advice of the General Counsel.
Stephen Hollabaugh, sst General Manager Michael Holley, General Manager
Page 2 of 2
THIRD PHASE AGREEMENT
FOR
WESTERN GEOPOWER INCORPORATED
RENEWABLE ENERGY POWER PURCHASE AGREEMENT
1
THIRD PMSE AGREE\LENT
FOR THE\\-F.STI'.RN GEOPO\CFR,INCORPORATED RFNEWABLE POWER PC RCI I.\SE .\GREENIFIX I'
TABLE OF CONTENTS
Section............................................................................................Page
RECITALS............................................................................3
1. Definitions..........................................................................4
2. Effectiveness of Agreement...................................................10
3. Delivery of Electricity/Allocation of Resource Adequacy..............
Capacity and Environmental Attributes...................................11
4. Cooperation and Further Assurances......................................11
5. Payment Obligations, Security Account, Invoicing.......................12
6. Administration of Agreement................................................16
7. Transfer of Rights by Participants...........................................18
8. Withdrawal of Participants...................................................18
9. Term and Termination.........................................................18
10. Default and Remedies..........................................................19
11. Miscellaneous....................................................................23
EXHIBIT A
EXHIBIT B
2
THIRD PHASE AGREEMENT
FOR THE WESTERN C,FOPO\`(T:R, INCORPORATED RF,\ \X-\BI,F{ PO\XER PURCFL\SF. \GRFF\IENT
This Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power
Purchase Agreement is between the Northern California Power Agency, a joint powers agency
of the State of California ("NCPA") and those of its Members who execute this Agreement
("Participants"). NCPA and the Participants are referred to herein individually as a "Party"
and collectively as the "Parties".
RECITALS
A. WHEREAS, NCPA and the Participants are interested in purchasing additional
renewable electric capacity and energy for the benefit of the Participants' customers:
B. WHEREAS, The Participants desire that NCPA negotiate and enter into a
renewable power purchase agreement with the Western GeoPower Incorporated for twenty (20)
years, with four(4) five-year options to extend the term, for a total of forty (40) years; and
C. WHEREAS, NCPA has executed a power purchase agreement with Western
GeoPower Incorporated to purchase the entire expected Project Output from a new Western
GeoPower geothermal project ("Project") located in the Geysers Geothermal Field located in
Mayacamas Mountains of Sonoma and Lake Counties in the State of California; and
D. WHEREAS, NCPA, on behalf of the Participants, will purchase the Project
output of for at a fixed price not to exceed ninety-eight dollars ($98.00) per megawatt hour for
the initial term of twenty (20) years, and will purchase the Project output for a predetermined
price for the additional terms as set forth in this Agreement; and
E. WHEREAS, NCPA and the Participants wish to enter into this Agreement to
provide all means necessary for NCPA to fulfill obligations incurred on behalf of NCPA and the
Participants pursuant to the Power Purchase Agreement and to enable and obligate the
Participants to take delivery of and pay for such electricity and to pay NCPA for the costs of
undertaking the foregoing activities; and
3
'THIRD PHASE AGREEMENT
FOR THF:\CF`'I'F:RN GEOPO\\F.R,TNCORPOR_\T'ED RFNE\X \BLF PO\C'FR PI:RCFl�SF: \GRFE\IFNT
1.1.4 "Budget Year" means the NCPA fiscal year; currently the twelve
month period beginning July 1 and ending on the next following June 30.
1.1.5 "Business Day" means any day except a Saturday, Sunday, or a
Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close at 5:00 p.m.
local time.
1.1.6 "Capacity Attributes" means any current or future defined
characteristic, certificate, tag, credit, or ancillary service attribute, whether general in nature or
specific as to the location or any other attribute of the Project, intended to value any aspect of
the capacity of the Project to produce Energy or ancillary services, including, but not limited to,
any accounting construct so that the full Contract Capacity of the Project may be counted
toward a Resource Adequacy Requirement or any other measure by the CPUC, the CAISO, the
FERC, or any other entity invested with the authority under federal or state law, to require
Buyer to procure, or to procure at Buyer's expense, Resource Adequacy or other such products.
1.1.7 "Claims" has the meaning set forth in Section 11.2.
1.1.8 "Commission" means the NCPA Commission.
1.1.9 Not Applicable under this Agreement.
1.1.10 "Constitutive Documents" means, with respect to NCPA, the
Joint Powers Agreement and any resolutions or bylaws adopted thereunder, and with respect to
each Participant, the California Government Code and other statutory provisions applicable to
such Participant, any applicable agreements, charters, contracts or other documents concerning
the formation, operation or decision making of such Participant, including, if applicable, its City
Charter, and any codes, ordinances, bylaws, and resolutions adopted by such Participant's
governing body.
1.1.11 Not applicable under this Agreement.
5
THIRD Pf L1SE AGREFIMENT
FOR Tf{E\XTSTERN GEOPOWER,INCORPORATED RENEWABLE POW R PIIRCfIASE AGREEJfENT
projects and other financial incentives in the form of credits, reductions, or allowances
associated with the project that are applicable to a state or federal income taxation obligation:
(3) fuel-related subsidies or "tipping fees" that may be paid to Seller to accept certain fuels, or
local subsidies received by the generator for the destruction of particular pre-existing pollutants
or the promotion of local environmental benefits; or (4) emission reduction credits encumbered
or used by the Unit(s) for compliance with local, state, or federal operating and/or air quality
permits.
1.1.17 "Event of Default" has the meaning set forth in Section 5.5.3 and
Section 10.1.
1.1.18 "Joint Powers Agreement" means that certain Northern
California Power Agency Joint Power Agreement first made July 19, 1968 and revised as of
April 1, 1973, establishing NCPA, as the same may be amended from time to time.
1.1.19 "Member" means any Member of NCPA or Associate Member
of NCPA.
1.1.20 "MW" means megawatt.
1.1.21 "MWh" means megawatt hour.
1.1.22 "NCPA" has the meaning set forth in the preamble hereto.
1.1.23 "Participation Percentages" has the meaning, with respect to
each Project Participant, the percentage of the total capacity of the Project, and the energy
associated with such capacity, to which such Participant is entitled pursuant to the terms of this
Agreement. The project Participation Percentages for each Project participant shall be in the
percentage set forth in Exhibit B attached hereto and incorporated herein. Exhibit B shall be
amended from time to time in accordance with this Agreement.
7
TIIIRD PHASE AGREEMENT
FOR THE�NFSTER\ GEOPOWER,INCORPOR_1TED RENEWABLE: POKER PUROLISE.kGREE:\IENT
1.1.31 "Revenues" means, with respect to each Participant with the
exception of BART, all income, rents, rates, fees, charges, and other moneys derived by the
Participant from the ownership or operation of its Electric System, including, without limiting
the generality of the foregoing, (a) all income, rents, rates, fees, charges or other moneys derived
from the sale, furnishing and supplying of electric capacity and energy and other services,
facilities, and commodities sold, furnished, or supplied through the facilities of its Electric
System, (b) the earnings on and income derived from the investment of such income, rents,
rates, fees, charges or other moneys to the extent that the use of such earnings and income is
limited by or pursuant to law to its Electric System and (c) the proceeds derived by the
Participant directly or indirectly from the sale, lease or other disposition of all or a part of the
Electric System, but the term Revenues shall not include (i) customers' deposits or any other
deposits subject to refund until such deposits have become the property of the Participant or (ii)
contributions from customers for the payment of costs of construction of facilities to serve them.
In regards to BART, Revenues means, all income, rents, rates, fees, charges, grants, fares or
tariffs, subventions and other moneys derived by the Participant from its operation including,
without limiting the generality of the foregoing, (i) the earnings on and income derived from
the investment of such income, rents, rates, fees, charges grants, fares or tariffs, subventions or
other moneys and (ii) the proceeds derived by the Participant directly or indirectly from the
sale, lease or other disposition of all or a part of its assets, but the term Revenues shall not
include any moneys derived from sources the use of which is limited by law to expenditures
other than operating expenses.
1.1.32 "Scheduling Protocols" means the applicable provisions of the
Scheduling Coordinator Program Agreement and any other contractual or other arrangements
between NCPA and the relevant Participant concerning the scheduling, delivery and metering
of the PPA.
9
THIRD PEi_-�SE AGREEMENT
FORTI IE%XESTERN GF.OPOWER.INCORPORITED REINEWABLE POVER PURCILASE AGREF.\LENT
Section 3. Delivery of Electricity / Allocation of Resource Adequacy Capacity and
Environmental Attributes. By executing this Agreement, each Participant acknowledges and
agrees to be bound by the take or pay process contained in or referenced herein. Any electricity
delivered to NCPA under the PPA attached as Exhibit A shall be delivered to each Participant
in proportion to such Participant's Participation Percentage and each Participant shall accept
and pay for its relevant percentage of such electricity. To the extent Participant is unable to
accept such deliveries in full, NCPA shall dispose of such surplus in its discretion, in such a
manner to maximize Participant value. Notwithstanding the above, NCPA may allocate and
pool capacity and energy procured through the PPA among the Participants in such
percentages as NCPA may, in its reasonable discretion, determine are necessary, desirable, or
appropriate. Such electricity shall be scheduled for the Participants in accordance with the
Scheduling Protocols. Resource Adequacy Capacity and Environmental Attributes obtained by
NCPA as a result of performance under this Agreement shall likewise be allocated to the
Participants by their Participation Percentage.
3.1 Payments to Counterparty. NCPA shall pay all costs incurred hereunder
using operating or Security Account funds, paid to NCPA in accordance with Section 5, or such
other sources as may be agreed upon in writing by the Parties from time to time.
Section 4. Cooperation and Further Assurances Each of the Parties agree to provide such
information, execute and deliver any instruments and documents and to take such other actions
as may be necessary or reasonably requested by any other Party which are not inconsistent with
the provisions of this Agreement and which do not involve the assumption of obligations other
than those provided for in this Agreement, in order to give full effect to this Agreement and to
carry out the intent of this Agreement. Further, the Parties agree to cooperate and act in good
faith in connection with obtaining any credit support required in order to procure electricity
from an Eligible Contract Purchase, including with respect to negotiating and executing any
agreements to implement any credit support arrangements.
11
TF"IIRD PHASE.XGREEMEN I'
FOR TEIF.\XT',STFP.R\ GEOPOW-FR, 1\CORPOR.\'11-D RF,NTAX \BL1-. POWER PURGE-C-\SF AGREE\IF\T'
balance in the Security Account is less than ninety percent(90%) of the amount required herein,
NCPA shall add such amount as soon as practicable to such Participant's next invoice. Credits
or additions shall not be made to Participants who satisfy these Security Account requirements
in whole through the use of a letter of credit, provided that the amount of the letter of credit
shall be adjusted in a like manner to assure an amount equal to the highest three (3) months of
estimated Project Costs.
5.3.3 Use of Security Account Funds. NCPA may use any and all
funds deposited into the Security Account to pay any costs it incurs hereunder, including
making payments to counterparty under the PPA. NCPA may use any and all funds without
regard to any individual Participant's balance in the Security Account or proportionate share of
Project Costs and irrespective of whether NCPA has issued an invoice for such costs to the
Participants or whether a Participant has made timely payments of invoices. Should Participant
have satisfied its Security Account requirements in whole or part through a letter of credit,
NCPA may draw on such letter of credit to satisfy Participant's obligations hereunder.
5.3.4 Emergency Additions. In the event that the funds are
withdrawn pursuant to section 5.3.3, or if the Security Account is insufficient to allow payment
of an invoice, demand, request for further assurances by Third Parties, or Claims, NCPA shall
notify all Participants and then prepare and send a special or emergency assessment to the
Participants. Each Participant shall pay to NCPA such assessment when and if assessed by
NCPA within two (2) Business Days of the invoice date of the assessment or consent to and
direct NCPA to draw on any existing Letter of Credit Participant has established for such
purposes.
5.3.5 Accounting and Interest. NCPA shall maintain a detailed
accounting of each Participant's deposits into and shares of withdrawals from the Security
Account. Interest earned on the Security Account shall be proportionately credited to the
Participants in accordance with their Security Account Balances. Any losses in the Security
13
THIRD PfLkSE AGREE_\IE\T
FORTHE\NT:STERN (;EOPOVT--R, INCORPORATED RENE\N---\BI.F: POVER.Pt RCHASE AGRF?EME\T
5.4.2 Pavment of Invoices. All invoices delivered by NCPA
hereunder are due and payable on the date indicated on such invoice, provided, however, that
any amount due on a day other than a Business Day may be paid on the following Business
Day. NCPA may apply a Participant's share of the Security Account to the payment of all or
any portion of an invoice issued to such Participant, provided that application of such funds
from the Security Account shall not relieve the Participant from any late payment charges
pursuant to Section 5.4.3. To the extent that NCPA applies funds from the Security Account to
pay an amount due under an invoice, following receipt of payment of such invoice by the
relevant Participant, NCPA shall deposit the relevant portion of the payment into the Security
Account and credit such deposit to such Participant.
5.4.3 Late Payments. Any amount due and not paid by a Participant
in accordance with Section 5.4.2 shall bear interest computed on a daily basis until paid at the
lesser of (i) the per annum prime rate (or reference rate) of the Bank of America NT&SA then in
effect, plus two percent(2%) or (ii) the maximum rate permitted by law.
5.5 Settlement Data and Examination of Books and Records.
5.5.1 Settlement Data. NCPA will make metering and settlement data
available to the Participants. Procedures and formats for the provision of such data will be as
established by the Participants and NCPA from time to time.
5.5.2 Examination of Books and Records. Any Participant to this
Agreement shall have the right to examine the books and records created and maintained by
NCPA pursuant to this Agreement at any reasonable, mutually agreed upon time.
5.5.3 Revenue Covenant. Any failure of a Participant to meet its
obligations hereunder or to cure such failure in a timely manner shall constitute a Default and
the Defaulting Party shall be subject to such remedies of NCPA as provided for herein. Each
Participant covenants and agrees (i) to continue to pay or advance to NCPA, from its electric
15
TI IIRD Pf IASE:kGIU:L:\II\T
FOR TLIE WESTERN GEOPO\\ER,INCORPORATED RI':NE\l'_ABLF, I)MNER PURCI LASE AGREEMENT
6.2 Action by Participating Members.
(a) Forum: Whenever any action anticipated by this
Agreement is required to be taken by the Participating Members, such actions shall be taken at a
regular or special meeting of the NCPA Commission but shall be participated in only by those
Commissioners, or their designated alternates, who are Participants.
(b) Quorum: A quorum at NCPA Commission meetings for
purposes of acting upon matters relating to this.Agreement shall consist of Commissioners, or
their designated alternates representing at least two Participants having a combined majority
interest based upon Participation Percentages.
(c) Voting: Each Participant shall have the right to cast one
vote with respect to matters pertaining to this Agreement, with a majority vote of the
Participating Members required for action subject to the following exceptions:
(i) Upon request of any Participant representative, the voting
on an issue related to this Agreement shall be by Participation Percentage with a 65% or more
favorable vote necessary to carry the action. The 65% required by the preceding sentence shall
be reduced by the amount that the Participation Percentage of any Participant exceeds 35%, but
shall not be reduced below a majority in interest.
(ii) After any decision related to this Agreement is taken by
the affirmative vote of less than 65% of the Program Participants, the action can be reviewed
and revised if a Participant gives notice of intention to seek such review and revision to NCPA
and each of the other Participants within ten (10) days following the date on which such action
was taken. Upon receipt of such a request for reconsideration, the Chairman of the Commission
shall agendize the matter for reconsideration at the next regular meeting of the Commission or
at a special meeting if the circumstances so warrant. The action shall be upheld upon the
affirmative vote of authorized representatives the Participants. Any action taken upon
reconsideration shall be final.
17
THIRD Pf L\SE_AGREE\IEM'
FOR THE WESTERN GEOPOVER,INCORPORATED RL:NL W.�BLE POWER PURCI I.-\'�E :1GREI \ff:\I'
who have executed the Agreement, the Participating Percentages of such member or members
shall be spread among those Participants in proportion to their Participation Percentages. This
Agreement shall be coterminous with the PPA contained in Exhibit A.
Section 10. Default and Remedies
10.1 Events of Default. An Event of Default under this Agreement shall exist
with respect to a Party ("Defaulting Party") upon the occurrence of any one or more of the
following:
(i) if any Party fails to make any payment or to provide assurances as
required of NCPA under this Agreement when due hereunder two (2) Business Days after
receipt of notice given by NCPA of such non-payment; or
(ii) the failure of the Defaulting Party to perform any other covenant
or obligation under this Agreement where such failure is not cured within ten (10) calendar
days following receipt of a notice from NCPA demanding cure (provided that this shall not
apply to any failure to make payments (which is covered by Section 10.1 (i)); or
(iii) if any representation or warranty of the Defaulting Party material
to the transactions contemplated hereby shall prove to have been incorrect in any material
respect when made and the Defaulting Party does not cure the facts underlying such incorrect
representation or warranty so that the representation or warranty becomes true and correct
within ten (10) calendar days of the date of receipt of notice from any other Party demanding
cure; or
(iv) if a Participant is in default or in breach of any of its covenants
under any other agreement with NCPA and such default or breach is not cured within the time
periods specified in such agreement; or
(v) the failure of NCPA to perform any covenant or obligation under
this Agreement following a ten (10) calendar day notice to cure by any non-defaulting Member.
19
THIRD PFI_\SE_\GRLF.\LENT
FOR THE WESTER\ GEOPO\\"FR, [NCORPORATEi) RENF\VAB[,F PO\\I} R PCRCF[.\SF: NGR[•:E\IFVF
10.4.2 Sale/Transfer of Participants Account Upon Default. Upon any
default of a Participant caused by the failure of such Participant to pay any sums due, and
provided that such default is not cured in a timely manner then NCPA shall use its best efforts
to sell and transfer for the defaulting Participant's account all or a portion of the Participant's
capacity and/or energy and/or Environmental Attributes for the remainder of the term of this
Agreement. Notwithstanding that all or any portion of the Participant's capacity is so sold or
transferred, the Participant shall remain liable for all of its obligations hereunder unless released
therefrom by NCPA upon assumption by a transferee or assignee.
10.4.3 Remedies of Participants. Upon the occurrence of an Event of
Default, and following the applicable cure periods, where NCPA is the Defaulting Party, the
Participant may, without limiting their other rights or remedies available under this Agreement,
at law or in equity, and without constituting or resulting in a waiver, release or estoppels of any
right, action or cause of action the Participants may have against NCPA, terminate this
Agreement in whole, subject to the provisions of Section10.5.4.
10.4.4 Special Covenants Regarding Security Account. In the event
that a Participant's balance of the Security Account is insufficient to cover all invoices for costs
incurred under this Agreement sent to such Participant, then, without limiting NCPA's other
rights or remedies available under this Agreement, at law or inequity, such Participant shall
cooperate in good faith with NCPA and shall cure the default as rapidly as possible, on an
emergency basis, taking all such action as is necessary, including, but not limited to, raising
rates and charges to its customers to increase its Revenues to replenish its share of the Security
Account as provided herein, drawing on its cash-on-hand and lines of credit, obtaining further
assurances by way of credit support and letters of credit, and taking all such other action as will
cure the default with all due haste.
21
THIRD PHASE_1GRFJ-.MENT
FOR THE VT-STERN GEOPOWER,INCORPORATED RENEWABLE. POWER PCRCILISE AGREEMENT
10.5.4 Termination by Participants. If this Agreement is terminated by
all Participants in accordance with Section 10.4.3, or by unanimous consent of all of the Parties
hereto, then the Participants shall pay to NCPA all previously unpaid costs and obligations
incurred as of the date of such termination„ and following such termination, the Participants
shall cooperate and act in good faith to negotiate and agree upon the method of allocating
among the Participants in proportion to their respective Participation Percentages the costs and
benefits of the PPA and any financing agreements or commitments and any matters pertaining
to the administration, management, control, operation and maintenance of the PPA. NCPA
shall reasonably cooperate with the Participants in connection with implementing the foregoing
and the Participants shall indemnify NCPA for any costs and obligations incurred in connection
therewith, including reasonable attorney fees, fees and expenses of other experts, including
auditors and accountants and other reasonable and necessary costs. If the parties are unable to
reach agreement as to the foregoing, then the parties agree to submit the matter to mediation
with a mutually agreed upon mediator. If the parties are still unable to reach agreement
following mediation, then the matter shall be submitted to binding arbitration subject to the
rules of the American Arbitration Association, the costs of such arbitration being borne
proportionally among the Participants.
Section 11. Miscellaneous
11.1 Confidentiality. The Participants and NCPA will keep confidential all
confidential or trade secret information made available to them in connection with this
Agreement, to the extent possible, consistent with applicable laws, including the California
Public Records Act. It shall be the responsibility of the holder of the claim of confidentiality or
trade secret to defend at its expense against any request that such information be disclosed.
Confidential or trade secret information shall be marked or expressly identified as such.
11.2 Indemnification and Hold Harmless. Subject to the provisions of Section
11.4, each Participant agrees to indemnify, defend and hold harmless NCPA and its Members,
23
THIRD PHASE AGREEMENT
FOR Tf IF\\ES'I I I-N GFOPO\\FR, INCORPOR.1'I-FI) RE\F:\\ \RI.F PO\\l-�R PU RC E t ASF .\(;RF-E\IFN"I-
including their respective governing officials, officers, agents, and employees, from and against
any and all claims, suits, losses, costs, damages, expenses and liability of any kind or nature,
including reasonable attorneys' fees and the costs of litigation, including experts ("Claims"), to
the extent caused by any acts, omissions,breach of contract, negligence (active or passive), gross
negligence, recklessness, or willful misconduct of a Participant, its governing officials, officers,
employees, subcontractors or agents, to the maximum extent permitted by law.
11.3 Several Liabilities. No Participant shall be liable under this Agreement
for the obligations of any other Participant, and each Participant shall be solely responsible and
liable for performance of its obligations under this Agreement, except as otherwise provided for
herein, and the obligation of each Participant under this Agreement is a several obligation and
not a joint obligation with those of the other Participants.
11.4 No Consequential Damages. FOR ANY BREACH OF ANY PROVISION
OF THIS AGREEMENT FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES
IS PROVIDED IN THIS AGREEMENT, THE LIABILITY OF THE DEFAULTING PARTY
SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER DAMAGES
OR REMEDIES ARE HEREBY WAIVED. IF NO REMEDY OR MEASURE OF DAMAGE IS
EXPRESSLY PROVIDED, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE
LIMITED TO ACTUAL DAMAGES ONLY AND ALL OTHER DAMAGES AND REMEDIES
ARE HEREBY WAIVED. IN NO EVENT SHALL NCPA OR ANY PARTICIPANT OR THEIR
RESPECTIVE SUCCESSORS, ASSIGNS, REPRESENTATIVES, DIRECTORS, OFFICERS,
AGENTS, OR EMPLOYEES BE LIABLE FOR ANY LOST PROFITS, CONSEQUENTIAL,
SPECIAL, EXEMPLARY, INDIRECT, PUNITIVE OR INCIDENTAL LOSSES OR DAMAGES,
INCLUDING LOSS OF USE, LOSS OF GOODWILL, LOST REVENUES, LOSS OF PROFIT OR
LOSS OF CONTRACTS EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES, AND NCPA AND EACH PARTICIPANT EACH HEREBY WAIVES
24
TFIIRD PHASE AGREL-NIE\T
FOR THE WESTERN GI-:OPOVTIR,INCORPORATED RF\F\X"ABLE POVER Pt;RCFi_ySE .AGREE'M NT
SUCH CLAIMS AND RELEASES EACH OTHER AND EACH OF SUCH PERSONS FROM
ANY SUCH LIABILITY.
The Parties acknowledge that California Civil Code section 1542 provides that: "A general
release does not extend to claims which the creditor does not know or suspect to exist in his or
her favor at the time of executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor." The Parties waive the provisions of
section 1542, or other similar provisions of law, and intend that the waiver and release provided
by this section of this Agreement shall be fully enforceable despite its reference to future or
unknown claims.
11.5 Amendments. Except where this Agreement specifically provides
otherwise, this Agreement may be amended only by written instrument executed by the Parties
with the same formality as this Agreement.
11.6 Severability. In the event that any of the terms, covenants or conditions
of this Agreement or the application of any such term, covenant or condition, shall be held
invalid as to any person or circumstance by any court having jurisdiction, all other terms,
covenants or conditions of this Agreement and their application shall not be affected thereby,
but shall remain in force and effect unless the court holds that such provisions are not severable
from all other provisions of this Agreement.
11.7 Governing Law. This Agreement shall be interpreted, governed by, and
construed under the laws of the State of California.
11.8 Headings. All indices, titles, subject headings, section titles and similar
items are provided for the purpose of convenience and are not intended to be inclusive,
definitive, or affect the meaning of the contents of this Agreement or the scope thereof.
11.9 Notices. Any notice, demand or request required or authorized by this
Agreement to be given to any party shall be in writing, and shall either be personally delivered
25
TI IIRD PTL\SE AGREEMENT
FOR THE WTS TERN GEOPO\\ER,INCORPOR\TED RE\E\C ABJ-F PO\\ER PURCHASE -�GREENfFN T
assets of the PPA as per the voting procedures of this Agreement outlined in Section 6.
Participation in any such purchase shall be in accordance with the then existing Participation
Percentages, unless such Participation Percentages are otherwise agreed upon by the
Participants.
11.14 List of Exhibits. The Exhibits referenced herein shall be denoted as
follows:
Exhibit A- RENEWABLE POWER PURCHASE AGREEMENT between NORTHERN
CALIFORNIA POWER AGENCY and WESTERN GEOPOWER
INCORPORATED
Exhibit B - PARTICIPATION PERCENTAGES
27
Tf11RD PILISE AGREEMENT
FOR THE WE-'STFRN GF.OPO\XER, INCORPOUTED RENEWABLE POWER PL:RCHASE \GREENIFNT
CITY OF BIGGS CITY OF GRIDLEY
[Address] [Address]
[City, State, Zip] [City, State, Zip]
[Telephone] [Telephone]
[Facsimile] [Facsimile]
By: By:
Title: Title:
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29
THIRD PH-\SE AGREE\IE\T
FOR THE\\ESTER\ GEOPO\\ER,INCORPORATED RENEW.\BLF. PO\\ER PURCHASE AGREEMENT
TRUCKEE DONNER PUBLIC CITY OF UKIAH
UTILITY DISTRICT
[Address] [Address]
[City, State, Zip] [City, State, Zip]
[Telephone] [Telephone]
[Facsimile] [Facsimile]
By: By:
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Date: Date:
Approved as to form: Approved as to form:
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Its: Attorney Its: Attorney
Date: Date:
31
THIRD PHASE AGREEMENT
FOR THE WT-STERN GEOPOWER_I\CORPOR_ATED RENEWABLE PO\X"LR PL"RU1ASE AGREE-IENT
Exhibit A
RENEWABLE ENERGY POWER PURCHSE AGREEMENT
BETWEEN
NORTHERN CALIFORNIA POWER AGENCY
AND
WESTERN GEOPOWER, INC.
1
f
rE
f 180 Cirby Way,Roseville,CA 95678
PA phone (916)781-3636
j fax (916)783-7693
93
<'NORTHERN CALIFORNIA POWER AGENCY web www.ncpa.com
i'
Commission Staff Report AGENDA ITEM NO.: ;
Date: January 25, 2008
To: NCPA Commission
Subject: Western GeoPower Incorporated Power Plant Project
Background
The Western GeoPower Incorporated (WGI) plans to develop a new geothermal power plant at
the Geysers by 2010-11 with an expected capacity of 25-35 MW. WGI advised NCPA
approximately a month ago that it was interested in entering into a Power Purchase Agreement
(PPA) with us. NCPA held a special meeting of the Commission on December 19, 2007, at
which we discussed the WGI project, sought members' advice, and the Commission authorized
the General Manager to proceed with formal negotiations with WGI.
The General Manager and staff has negotiated with WGI and is approaching an agreement for a
PPA. We are attempting to have the substance of the Agreement completed to bring to the
Commission at this meeting. The basic terms of the Agreement are: (1) a take-and-pay.form ;of
contract; (2) at a negotiated price and terms, and (3) NCPA would own all of the energy;
capacity, and environmental attributes of the facility. The basis for the PPA is the NGPP (Green
Power Pool). A final PPA inclusive of the agreed upon terms and conditions is attached to this
report.
Staff at the same time developed a Third Phase Agreement for the members to participate in
this project. This Agreement is attached. The basis for this Agreement was the Market Power
Purchase Agreement currently being used by some of the members.
Both of these Agreements were discussed with the Utility Directors on January 10, 2008.
Fiscal Impact
Under the proposed `take-and-pay' PPA, and because the project is not expected to be
operational until 2010/2011 time period, there is no fiscal impact until the members start
receiving energy from the project. Prior to the expected operational date, staff will develop a
budget for approval by the participants covering the expected cost. This budget may augment
the current budget (FY 08) and will be included in the FY-09 budget.
Recommendation
Staff recommends that the Commission approve the attached Resolution which includes
approval of the Third Phase Agreement and the PPA as negotiated with WGI, if available,
subject to participating members approving the Third Phase Agreement. Staff further
recommends that it authorize the General Manager to make any and all non-substantive
changes to the Third Phase Agreement and PPA as deemed appropriate by the General
Counsel.
SR: 112:8
RESOLUTION 08-07
RESOLUTION OF THE COMMISSION OF THE NORTHERN CALIFORNIA POWER AGENCY APPROVING
THE THIRD PHASE AGREEMENT FOR THE PURCHASE OF
GEOTHERMAL POWER FROM WESTERN GEOPOWER INCORPORATED
AND THE RENEWABLE ENERGY POWER PURCHASE AGREEMENT BETWEEN
NORTHERN CALIFORNIA POWER AGENCY AND WESTERN GEOPOWER INCORPORATED
WHEREAS, NCPA and the Participants are interested in purchasing additional renewable electric
capacity and energy for the benefit of the Participants' customers:
WHEREAS, The Participants desire that NCPA negotiate and enter into a renewable Power
Purchase Agreement (PPA) with Western GeoPower Incorporated (WGI)for twenty (20) years; and
WHEREAS, NCPA has executed a PPA with WGI to purchase the entire expected Project Output
from a new Western GeoPower geothermal project ("Project") located in the Geysers Geothermal Field
located in the Mayacamas Mountains of Sonoma and Lake Counties in the State of California; and
WHEREAS, NCPA, on behalf of the Participants, will purchase the project output for a price of
ninety-eight dollars ($98.00) per megawatt hour; in accordance with the PPA between NCPA and WGI; and
WHEREAS, NCPA and the Participants wish to enter into this Agreement to provide all means
necessary for NCPA to fulfill obligations incurred on behalf of NCPA and the Participants pursuant to the
PPA and to enable and obligate the Participants to take delivery of and pay for such electricity and to pay
NCPA for the costs of undertaking the foregoing activities.
NOW, THEREFORE, BE IT RESOLVED, by the Commission of the Northern California Power
Agency as follows:
1. Approve the Agreement entitled "Third Phase Agreement for the Western GeoPower
Incorporated Renewable Energy PPA" dated January 2008, is subject to minor and non-substantive changes
made as per the advice of the General Counsel
2. The Commission approves the Renewable Energy Power Purchase Agreement between
Northern California Power Agency'and WGI(subject to participating members approving the Third Phase
Agreement in item 1), including any and all non-substantive changes made to document as per the advice of -
the General Counsel
PASSED, ADOPTED and APPROVED this 25th day of January, 2008 by the following vote on roll
call:
Vote Abstained Absent
Alameda
BART
Biggs
Gridley
Healdsburg
Lodi
Lompoc
Palo Alto
Port of Oakland
Redding
Roseville
Santa Clara
Truckee Donner
Turlock
Ukiah
Plumas-Sierra
PATRICK KOLSTAD ATTEST: DENISE DOW
CHAIRMAN ASSISTANT SECRETARY