ALSTON&BIRD LLP
The Atlantic Building
950 F Street, NW
Washington, DC 20004-1404
202-756-3300
Fax: 202-756-3333
www.alston.com
July 22, 2008
The Honorable Kimberly D. Bose
Secretary
Federal Energy Regulatory Commission
888 First Street, NE
Washington, DC 20426
Re: Large Generator Interconnection Agreement Among Geysers
Power Company, LLC (Calistoga Power Plant), Pacific Gas and
Electric Company, and the California Independent System
Operator Corporation
Docket No. ER08- -000
Dear Secretary Bose:
Pursuant to Section 205 of the Federal Power Act ("FPA"), 16 U.S.C.
§ 824d, Section 35.13 of the Commission's regulations, 18 C.F.R. § 35.13, and
Sections 11.2 and 11.3 of Appendix U to the California Independent System
Operator Corporation ("CAISO") Tariff ("Standard Large Generator
Interconnection Procedures" or "LGIP"), the CAISO submits for filing and
Commission acceptance an unexecuted Large Generator Interconnection
Agreement ("LGIA") among Geysers Power Company, LLC ("Geysers" or
"GPC"), Pacific Gas and Electric Company ("PG&E"), and the CAISO, concerning
Geysers' Calistoga Power Plant. 1 The CAISO requests that the Commission
accept the LGIA effective as of July 1, 2008.
i Capitalized terms not otherwise defined herein have the meanings set forth in the Master
Definitions Supplement, Appendix A to the CAISO Tariff, and in the LGIA provided in the instant
filing. The LGIA is provided as Attachment A hereto.
The Honorable Kimberly D. Bose
July 22, 2008
Page 2
I. Background
Geysers owns, as relevant here, four geothermal power plants ("Plants")
located in northern California which are Qualifying Facilities, including the
Calistoga Power Plant. 2 The Plants were interconnected with PG&E's
transmission system in the 1980s under interconnection arrangements
jurisdictional to the California Public Utilities Commission ("CPUC"), and
subsequently were interconnected with the CAISO Controlled Grid. 3 Until June
30, 2008, Geysers sold the power generated by the Plants exclusively to PG&E,
a Participating Transmission Owner, under standard offer contracts approved by
the CPUC and pursuant to the Public Utility Regulatory Policies Act. On that
date, however, the sales contracts concerning the Plants expired and accordingly
their respective CPUC-jurisdictional interconnection arrangements similarly
terminated. Starting on July 1, 2008, Geysers began selling the power from the
Plants through bilateral transactions in the CAISO wholesale markets.
Geysers, PG&E, and the CAISO agree that, due to the pending expiration
of the CPUC-jurisdictional interconnection agreements, the Plants need to be
covered under interconnection arrangements that are jurisdictional to this
Commission. However, these parties have not reached agreement on what
Commission-jurisdictional interconnection arrangements would be required
starting on July 1. PG&E and Geysers have taken the position that this
Commission, in a January 2004 decision4 approving the current PG&E-Geysers
Generator Special Facilities Agreement ("GSFA" or "Geysers Integrated GFSA")
and Generator Interconnection Agreement ("GIA") (collectively "Existing
PG&E/Geysers Interconnection Agreements"), through which PG&E provides
Commission-jurisdictional interconnection services to 15 geothermal generating
units Geysers operates in the same geothermal area in northern California in
which the Plants are also located, has already authorized PG&E to provide
Commission-jurisdictional interconnection services to the Plants in accordance
with the Existing PG&E/Geysers Interconnection Agreements. According to
PG&E and Geysers, the transition of each of the four Plants to the Existing
PG&E/Geysers Interconnection Agreements would occur upon the expiration of
their respective power sales agreements with PG&E and the associated
termination of their respective CPUC-jurisdictional interconnection arrangements.
The CAISO, on the other hand, has asserted that the provisions of the
CAISO Tariff require Commission-jurisdictional interconnection services to be
2 The other three Plants are the Aidlin Power Plant, the Bear Canyon Power Plant, and the
West Ford Flat Power Plant.
3 The CAISO Controlled Grid began operations in 1998.
4 Pacific Gas and Electric Co., Letter Order, Docket No. ER04-267-000 (Jan. 21, 2004).
The Honorable Kimberly D. Bose
July 22, 2008
Page 3
provided to the four Plants pursuant to the CAISO's LGIP and LGIA. 5 Given this
requirement, and the Commission's interconnection policies as set forth in Order
No. 2003 and its progeny, the CAISO does not agree that the Commission's
January 2004 decision accepting the Existing PG&E/Geysers Interconnection
Agreements authorizes PG&E to provide interconnection services to the four
Geysers Plants under those agreements. PG&E, Geysers, and the CAISO
continue to hold these respective views.
On June 30, 2008, PG&E filed, in Docket No. ER08-1193-000, proposed
revisions to the Existing PG&E/Geysers Interconnection Agreements in order to
include terms in those agreements regarding the Plants, to be effective July 1,
2008 ("June 30 Filing"). Also on June 30, Geysers and the CAISO executed a
letter agreement ("Letter Agreement") that included the following provisions:
While PG&E and GPC and the CAISO currently have not reached
agreement on the appropriate and required form of FERCjurisdictional interconnection agreement, the parties do recognize
the critical importance to California that the renewable baseload
power from the four [Plants] continue to be generated and delivered
to the CAISO markets and California electric consumers as of July
1 and continuously thereafter and without interruption.
Accordingly, GPC and PG&E recognize that CAISO is relying on
PG&E's provision of FERC jurisdictional interconnection service
pursuant to the revised Geysers Integrated GFSA for purposes of
enabling the [Plants] to participate fully in the CAISO markets
effective July 1, 2008 . . . GPC accordingly agrees that by such
actions the CAISO is not waiving, and is specifically reserving, its
full rights under the CAISO Tariff and Section 205 of the Federal
Power Act to oppose the use of the revised Geysers Integrated
GFSA for such purposes. On such basis, the CAISO agrees that
GPC shall be authorized as of July 1, and without any interruption,
to schedule and sell power from the four [Plants] into the CAISO
markets as provided for in this letter agreement and that such
authority shall continue until the earlier of FERC accepting for filing
PG&E's submission of the revised Geysers Integrated GFSA or the
effectiveness of an LGIA for each of the [Plants] as submitted by
the CAISO and accepted by FERC. 6
5 Appendix U to the CAISO Tariff contains the CAISO's Commission-approved LGIP, and
Appendix V contains the Commission-approved pro forma LGIA.
6 The Letter Agreement is provided for informational purposes as Attachment B hereto.
The Honorable Kimberly D. Bose
July 22, 2008
Page 4
Consistent with the Letter Agreement, the CAISO is filing today, in
separate dockets, four unexecuted LGIAs covering the Plants (including the LGIA
submitted in the instant filing), with a requested effective date of July 1, 2008.
The CAISO is also filing today a motion to intervene and protest regarding the
June 30 Filing in Docket No. ER08-1193-000 ("July 22 Protest"), and a motion to
consolidate that proceeding with the dockets that the Commission will establish
for the four LGIA filings.
II. The LGIA Included in the Instant Filing
The LGIA included in the instant filing is based on the CAISO's pro forma
LGIA, which the Commission accepted in Docket No. ER04-445, and describes
the terms of the Interconnection Service to be provided by the CAISO and PG&E.
The provisions in the body of the LGIA are substantially the same as the
provisions in the body of the pro forma LGIA, with the only differences from the
pro forma LGIA being modifications that have been made to the appendices of
the LGIA to reflect Plant-specific information. The interconnection facilities
described in the LGIA are those interconnecting the generation capacity from the
Calistoga Power Plant safely and reliably to PG&E's portion of the CAISO
Controlled Grid.
For the reasons explained in the CAISO's July 22 Protest, the
Commission should find that interconnection service to the Calistoga Power Plant
should be provided under the CAISO's LGIP and the LGIA attached to the instant
filing, rather than under PG&E's Existing PG&E/Geysers Interconnection
Agreements as modified by the June 30 Filing.
III. Effective Date and Request for Waiver
Pursuant to Section 35.11 of the Commission's regulations, 18 C.F.R. §
35.11, the CAISO respectfully requests waiver of the Commission's 60-day prior
notice requirement to permit the enclosed LGIA to become effective as of July 1,
2008.
Granting the requested effective date of July 1 for the LGIA will ensure
that there is no interruption between when the CPUC-jurisdictional
interconnection arrangements ended on June 30 and when the Commissionjurisdictional interconnection arrangements began on July 1, as described in
Section I above. Approval of the requested waiver is also consistent with the
Commission's general policy of granting waiver of the 60-day prior notice
requirement for filings that have no rate impact, 7 which is the case with the LGIA.
Moreover, the Letter Agreement (at 2) states that "GPC agrees that it will not
7 See Central Hudson Gas & Electric Corp., 60 FERC ¶ 61,106, at 61,338-39, reh'g
denied, 61 FERC ¶ 61,089 (1992).
The Honorable Kimberly D. Bose
July 22, 2008
Page 5
object to a request by the CAISO for waiver of the sixty (60) day notice
requirement with respect to the CAISO's filing of an unexecuted LGIA for each of
the [Plants]," and the CAISO's understanding is that PG&E would also not object
to this CAISO waiver request. Further, no purchasers under other rate schedules
will be affected if the Commission grants the requested effective date. 8
Therefore, good cause exists to grant the requested effective date of July 1,
2008.
IV. Expenses and Request for Waiver
No expense or cost associated with this filing has been alleged or judged
in any judicial or administrative proceeding to be illegal, duplicative, unnecessary,
or demonstratively the product of discriminatory employment practices.
The information submitted with this filing substantially complies with the
requirements of Part 35 of the Commission's regulations (18 C.F.R. Part 35)
applicable to filings of this type. The CAISO requests waiver of any applicable
requirement of Part 35, if necessary, in order to permit this filing to become
effective as proposed.
V. Attachments
In addition to this transmittal letter, the following documents support the
instant filing:
Attachment A Unexecuted LGIA among Geysers, PG&E, and the
CAISO, designated as CAISO Service Agreement No.
1138 and provided in a format that complies with the
Commission's Order No. 614 9
Attachment B Letter Agreement between Geysers and the CAISO
VI. Service
Copies of this filing have been served upon Geysers, PG&E, the California
Public Utilities Commission, and the California Energy Commission. In addition,
the filing has been served upon all CAISO Scheduling Coordinators and posted
on the CAISO Website.
8
9 Designation of Electric Rate Schedule Sheets, Order No. 614, FERC Stats. & Regs.
31,096 (2000).
See 18 C.F.R. § 35.11.
The Honorable Kimberly D. Bose
July 22, 2008
Page 6
An original and five copies of the instant filing are enclosed. Also
enclosed are two addition copies of the filing to be date-stamped and returned to
our messenger.
VII. Correspondence
The CAISO requests that all correspondence, pleadings, and other
communications concerning this filing be served upon the following:
Nancy Saracino
General Counsel
*Sidney M. Davies
Assistant General Counsel
The California Independent System
Operator Corporation
151 Blue Ravine Road
Folsom, CA 95630
Tel: (916) 351-4400
sdavies@caiso.com
* Michael Kunselman
Bradley R. Miliauskas
Alston & Bird LLP
The Atlantic Building
950 F Street, NW
Washington, DC 20004
Tel: (202) 756-3300
Fax: (202) 756-3300
michael.kunselman@alston.com
bradley.miliauskas@alston.com
* Individuals designated for service pursuant to 18 C.F.R. § 385.203(b)(3)
VIII. Conclusion
The CAISO respectfully requests that the Commission accept the
enclosed LGIA as filed, to be effective July 1, 2008.
Respectfully submitted,
Michael Kunselman
Bradley R. Miliauskas
Alston & Bird LLP
The Atlantic Building
950 F Street, NW
Washington, DC 20004
Enclosures
ATTACHMENT A
California Independent System Operator Corporation Original Service Agreement No. 1138
FERC Electric Tariff, Third Replacement Volume No. II
LARGE GENERATOR INTERCONNECTION AGREEMENT (LGIA)
AMONG
GEYSERS POWER COMPANY, LLC
(CALISTOGA POWER PLANT)
AND
PACIFIC GAS AND ELECTRIC COMPANY
AND
CALIFORNIA INDEPENDENT SYSTEM OPERATOR CORPORATION
Issued By: Anjali Sheffrin, Ph.D., Chief Economist and Director Effective: July 1, 2008
of Market & Product Development
Issued On: July 22, 2008
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS 2
ARTICLE 2. EFFECTIVE DATE, TERM AND TERMINATION
2.1 Effective Date
2.2 Term of Agreement
2.3 Termination Procedures
2.3.1 Written Notice
2.3.2 Default
2.3.3 Suspension of Work
2.3.4
2.4 Termination Costs
2.4.1
2.4.2
2.4.3
2.5 Disconnection
2.6 Survival
9
9
10
10
10
10
10
10
10
10
11
11
11
11
ARTICLE 3. REGULATORY FILINGS AND ISO TARIFF COMPLIANCE 11
3.1 Filing 11
3.2 Agreement Subject to ISO Tariff 12
3.3 Relationship Between this LGIA and the ISO Tariff 12
3.4 Relationship Between this LGIA and the QF PGA 12
ARTICLE 4. SCOPE OF SERVICE 12
4.1 Interconnection Service 12
4.2 Provision of Service 12
4.3 Performance Standards 12
4.4 No Transmission Service 13
4.5 Interconnection Customer Provided Services 13
ARTICLE 5. INTERCONNECTION FACILITIES ENGINEERING, PROCUREMENT,
AND CONSTRUCTION
5.1 Options
5.1.1 Standard Option
5.1.2 Alternate Option
5.1.3 Option to Build
5.1.4 Negotiated Option
5.2 General Conditions Applicable to Option to Build
5.3 Liquidated Damages
5.4 Power System Stabilizers
5.5 Equipment Procurement
5.5.1
5.5.2
5.5.3
13
13
13
14
14
14
15
17
18
18
18
18
18
i
5.6 Construction Commencement 18
18
19
19
19
19
19
19
19
5.6.1
5.6.2
5.6.3
5.6.4
5.7 Work Progress
5.8 Information Exchange
5.9 Limited Operation
5.10 Interconnection Customer's Interconnection Facilities
5.10.1 Large Generating Facility and Interconnection Customer's
Interconnection Facilities Specifications
5.10.2 Participating TO's and ISO's Review 20
5.10.3 Interconnection Customer's Intercon nection Facilitie
Construction 20
5.10.4 Interconnection Customer to Meet Requirements of the
Participating TO's Interconnection Handbook 21
5.11 Participating TO's Interconnection Facilities Construction 21
5.12 Access Rights 21
5.13 Lands of Other Property Owners 22
5.14 Permits 22
5.15 Early Construction of Base Case Facilities 22
5.16 Suspension 22
5.17 Taxes 23
5.17.1 Interconnection Customer Payments Not Taxable 23
5.17.2 Representations And Covenants 23
5.17.3 Indemnification for the Cost Consequences of Current Tax
Liability Imposed Upon the Participating TO 24
5.17.4 Tax Gross-Up Amount 24
5.17.5 Private Letter Ruling or Change or Clarification of Law 25
5.17.6 Subsequent Taxable Events 26
5.17.7 Contests 26
5.17.8 Refund 27
5.17.9 Taxes Other Than Income Taxes 28
5.18 Tax Status 28
5.19 Modification 29
5.19.1 General 29
5.19.2 Standards 29
5.19.3 Modification Costs 29
ARTICLE 6. TESTING AND INSPECTION
6.1 Pre-Commercial Operation Date Testing and Modifications
6.2 Post-Commercial Operation Date Testing and Modifications
6.3 Right to Observe Testing
6.4 Right to Inspect
30
30
30
30
30
20
ii
ARTICLE 7. METERING 31
7.1 General 31
7.2 Check Meters 31
7.3 Participating TO Retail Metering 31
ARTICLE 8. COMMUNICATIONS 31
8.1 Interconnection Customer Obligations 31
8.2 Remote Terminal Unit 32
8.3 No Annexation 32
ARTICLE 9. OPERATIONS 32
9.1 General 32
9.2 Control Area Notification 33
9.3 ISO and Participating TO Obligations 33
9.4 Interconnection Customer Obligations 33
9.5 Start-Up and Synchronization 34
9.6 Reactive Power 34
9.6.1 Power Factor Design Criteria 34
9.6.2 Voltage Schedules 34
9.6.2.1 Governors and Regulators 34
9.6.3 Payment for Reactive Power 35
9.7 Outages and Interruptions 35
9.7.1 Outages 35
9.7.1.1 Outage Authority and Coordination 35
9.7.1.2 Outage Schedules 36
9.7.1.3 Outage Restoration 36
9.7.2 Interruption of Service 37
9.7.2.1 37
9.7.2.2 37
9.7.2.3 37
9.7.2.4 37
9.7.2.5 37
9.7.3 Under-Frequency and Over-Frequency Conditions 38
9.7.4 System Protection and Other Control Requirements 38
9.7.4.1 System Protection Facilities 38
9.7.4.2 38
9.7.4.3 38
9.7.4.4 38
9.7.4.5 39
9.7.4.6 39
9.7.5 Requirements for Protection 39
9.7.6 Power Quality 40
9.8 Switching and Tagging Rules 40
9.9 Use of Interconnection Facilities by Third Parties 40
9.9.1 Purpose of Interconnection Facilities 40
9.9.2 Third Party Users 40
9.10 Disturbance Analysis Data Exchange 41
iii
ARTICLE 10. MAINTENANCE
10.1 Participating TO Obligations
10.2 Interconnection Customer Obligations
10.3 Coordination
10.4 Secondary Systems
10.5 Operating and Maintenance Expenses
ARTICLE 11. PERFORMANCE OBLIGATION
11.1 Interconnection Customer's Interconnection Facilities
11.2 Participating TO's Interconnection Facilities
11.3 Network Upgrades and Distribution Upgrades
11.4 Transmission Credits
11.4.1 Repayment of Amounts Advanced for Network Upgrades
11.4.2 Special Provisions for Affected Systems
11.4.3
11.5 Provision of Security
11.5.1
11.5.2
11.5.3
11.6 Interconnection Customer Compensation
11.6.1 Interconnection Customer Compensation for Actions During
Emergency Condition
ARTICLE 12. INVOICE
12.1 General
12.2 Final Invoice
12.3 Payment
12.4 Disputes
ARTICLE 13. EMERGENCIES 45
13.1 [Reserved] 45
13.2 Obligations 46
13.3 Notice 46
13.4 Immediate Action 46
13.5 ISO and Participating TO Authority 46
13.5.1 General 46
13.5.2 Reduction and Disconnection 47
13.6 Interconnection Customer Authority 47
13.7 Limited Liability 48
ARTICLE 14. REGULATORY REQUIREMENTS AND GOVERNING LAWS
14.1 Regulatory Requirements
14.2 Governing Law
14.2.1
14.2.2
14.2.3
41
41
41
41
41
41
42
42
42
42
42
42
43
43
43
44
44
44
44
44
44
44
44
45
45
48
48
48
48
48
48
iv
ARTICLE 15. NOTICES
15.1 General
15.2 Billings and Payments
15.3 Alternative Forms of Notice
15.4 Operations and Maintenance Notice
48
48
49
49
49
ARTICLE 16. FORCE MAJEURE 49
16.1 Force Majeure 49
16.1.1 49
16.1.2 49
ARTICLE 17. DEFAULT
17.1 Default
17.1.1 General
17.1.2 Right to Terminate
ARTICLE 18. INDEMNITY, CONSEQUENTIAL DAMAGES,
AND INSURANCE
18.1 Indemnity
18.1.1 Indemnified Party
18.1.2 Indemnifying Party
18.1.3 Indemnity Procedures
18.2 Consequential Damages
18.3 Insurance
18.3.1
18.3.2
18.3.3
18.3.4
18.3.5
18.3.6
18.3.7
18.3.8
18.3.9
18.3.10
18.3.11
ARTICLE 19. ASSIGNMENT 54
19.1 Assignment 54
ARTICLE 20. SEVERABILITY 54
20.1 Severability 54
50
50
50
50
50
50
50
50
51
51
52
52
52
52
52
52
53
53
53
53
53
54
ARTICLE 21. COMPARABILITY 55
21.1 Comparability 55
ARTICLE 22. CONFIDENTIALITY 55
22.1 Confidentiality 55
22.1.1 Term 55
22.1.2 Scope 55
22.1.3
22.1.4
22.1.5
22.1.6
22.1.7
22.1.8
22.1.9
22.1.10
22.1.11
Release of Confidential Information
Rights
No Warranties
Standard of Care
Order of Disclosure
Termination of Agreement
Remedies
Disclosure to FERC, its Staff, or a State
56
56
56
56
56
57
57
57
58
ARTICLE 23. ENVIRONMENTAL RELEASES 58
23.1 58
ARTICLE 24. INFORMATION REQUIREMENTS
24.1 Information Acquisition
24.2 Information Submission by Participating TO
24.3 Updated Information Submission by Interconnection Customer
24.4 Information Supplementation
ARTICLE 25. INFORMATION ACCESS AND AUDIT RIGHTS
25.1 Information Access
25.2 Reporting of Non-Force Majeure Events
25.3 Audit Rights
25.3.1
25.3.2
25.4 Audit Rights Periods
25.4.1 Audit Rights Period for Construction-Related
Accounts and Records
25.4.2 Audit Rights Period for All Other
Accounts and Records
25.5 Audit Results
25.5.1
ARTICLE 26. SUBCONTRACTORS 62
26.1 General 62
26.2 Responsibility of Principal 62
26.3 No Limitation by Insurance 63
ARTICLE 27. DISPUTES
27.1 Submission
27.2 External Arbitration Procedures
27.3 Arbitration Decisions
27.4 Costs
59
59
59
59
59
60
60
60
61
61
61
61
61
62
62
62
63
63
63
64
64
vi
ARTICLE 28. REPRESENTATIONS, WARRANTIES AND COVENANTS 64
28.1 General 64
28.1.1 Good Standing 64
28.1.2 Authority 64
28.1.3 No Conflict 65
28.1.4 Consent and Approval 65
ARTICLE 29. [RESERVED] 65
ARTICLE 30. MISCELLANEOUS
30.1 Binding Effect
30.2 Conflicts
30.3 Rules of Interpretation
30.4 Entire Agreement
30.5 No Third Party Beneficiaries
30.6 Waiver
30.7 Headings
30.8 Multiple Counterparts
30.9 Amendment
30.10 Modification by the Parties
30.11 Reservation of Rights
30.12 No Partnership
30.13 Joint and Several Obligations
Appendices 70
Appendix A Interconnection Facilities, Network Upgrades and Distribution
Upgrades
Appendix B Milestones
Appendix C Interconnection Details
Appendix D Security Arrangements Details
Appendix E Commercial Operation Date
Appendix F Addresses for Delivery of Notices and Billings
Appendix G Reliability Management System Agreement
Appendix H Interconnection Requirements for a Wind Generating Plant
65
65
65
65
66
66
66
66
66
66
67
67
68
68
vii
LARGE GENERATOR INTERCONNECTION AGREEMENT
GEYSERS POWER COMPANY, LLC
PACIFIC GAS AND ELECTRIC COMPANY
CALIFORNIA INDEPENDENT SYSTEM OPERATOR CORPORATION
THIS LARGE GENERATOR INTERCONNECTION AGREEMENT ("LGIA") is
made and entered into this day of 20 , by and among
Geysers Power Company, LLC, a limited liability company organized and existing under
the laws of the State of Delaware ("Interconnection Customer" with a Large
Generating Facility), Pacific Gas and Electric Company, a corporation organized and
existing under the laws of the State of California ("Participating TO"), and California
Independent System Operator Corporation, a California nonprofit public benefit
corporation organized and existing under the laws of the State of California ("ISO").
Interconnection Customer, Participating TO, and ISO each may be referred to as a
"Party" or collectively as the "Parties."
RECITALS
WHEREAS, ISO exercises Operational Control over the ISO Controlled Grid; and
WHEREAS, the Participating TO owns, operates, and maintains the Participating
TO's Transmission System; and
WHEREAS, Interconnection Customer intends to own, lease and/or control and
operate the Generating Facility identified as a Large Generating Facility in Appendix C to
this LGIA; and
WHEREAS, Interconnection Customer, Participating TO, and ISO have agreed to
enter into this LGIA for the purpose of interconnecting the Large Generating Facility with
the Participating TO's Transmission System;
NOW, THEREFORE, in consideration of and subject to the mutual covenants
contained herein, it is agreed:
When used in this LGIA, terms with initial capitalization that are not defined in
Article 1 shall have the meanings specified in the Article in which they are used.
1
ARTICLE 1. DEFINITIONS
Adverse System Impact shall mean the negative effects due to technical or
operational limits on conductors or equipment being exceeded that may compromise
the safety and reliability of the electric system.
Affected System shall mean an electric system other than the ISO Controlled
Grid that may be affected by the proposed interconnection, including the Participating
TO's electric system that is not part of the ISO Controlled Grid.
Affiliate shall mean, with respect to a corporation, partnership or other entity,
each such other corporation, partnership or other entity that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under common
control with, such corporation, partnership or other entity.
Applicable Laws and Regulations shall mean all duly promulgated applicable
federal, state and local laws, regulations, rules, ordinances, codes, decrees, judgments,
directives, or judicial or administrative orders, permits and other duly authorized actions
of any Governmental Authority.
Applicable Reliability Council shall mean the Western Electricity Coordinating
Council or its successor.
Applicable Reliability Standards shall mean the requirements and guidelines
of NERC, the Applicable Reliability Council, and the Control Area of the Participating
TO's Transmission System to which the Generating Facility is directly interconnected.
Base Case shall mean the base case power flow, short circuit, and stability data
bases used for the Interconnection Studies.
Breach shall mean the failure of a Party to perform or observe any material term
or condition of this LGIA.
Breaching Party shall mean a Party that is in Breach of this LGIA.
Business Day shall mean Monday through Friday, excluding federal holidays
and the day after Thanksgiving Day.
Calendar Day shall mean any day including Saturday, Sunday or a federal
holiday.
Commercial Operation shall mean the status of an Electric Generating Unit at a
Generating Facility that has commenced generating electricity for sale, excluding
electricity generated during Trial Operation.
2
Commercial Operation Date of an Electric Generating Unit shall mean the date
on which the Electric Generating Unit at the Generating Facility commences
Commercial Operation as agreed to by the applicable Participating TO and the
Interconnection Customer pursuant to Appendix E to this LGIA.
Confidential Information shall mean any confidential, proprietary or trade
secret information of a plan, specification, pattern, procedure, design, device, list,
concept, policy or compilation relating to the present or planned business of a Party,
which is designated as confidential by the Party supplying the information, whether
conveyed orally, electronically, in writing, through inspection, or otherwise, subject to
Article 22.1.2.
Control Area shall mean an electrical system or systems bounded by
interconnection metering and telemetry, capable of controlling generation to maintain its
interchange schedule with other Control Areas and contributing to frequency regulation
of the interconnection. A Control Area must be certified by the Applicable Reliability
Council.
Default shall mean the failure of a Breaching Party to cure its Breach in
accordance with Article 17 of this LGIA.
Distribution System shall mean those non-ISO-controlled transmission and
distribution facilities owned by the Participating TO.
Distribution Upgrades shall mean the additions, modifications, and upgrades to
the Participating TO's Distribution System. Distribution Upgrades do not include
Interconnection Facilities.
Effective Date shall mean the date on which this LGIA becomes effective upon
execution by the Parties subject to acceptance by FERC, or if filed unexecuted, upon
the date specified by FERC.
Electric Generating Unit shall mean an individual electric generator and its
associated plant and apparatus whose electrical output is capable of being separately
identified and metered.
Emergency Condition shall mean a condition or situation: (1) that in the
judgment of the Party making the claim is imminently likely to endanger life or property;
or (2) that, in the case of the ISO, is imminently likely (as determined in a nondiscriminatory manner) to cause a material adverse effect on the security of, or damage
to, the ISO Controlled Grid or the electric systems of others to which the ISO Controlled
Grid is directly connected; (3) that, in the case of the Participating TO, is imminently
likely (as determined in a non-discriminatory manner) to cause a material adverse effect
on the security of, or damage to, the Participating TO's Transmission System,
Participating TO's Interconnection Facilities, Distribution System, or the electric systems
of others to which the Participating TO's electric system is directly connected; or (4)
that, in the case of the Interconnection Customer, is imminently likely (as determined in
3
a non-discriminatory manner) to cause a material adverse effect on the security of, or
damage to, the Generating Facility or Interconnection Customer's Interconnection
Facilities. System restoration and black start shall be considered Emergency
Conditions; provided, that Interconnection Customer is not obligated by this LGIA to
possess black start capability.
Environmental Law shall mean Applicable Laws or Regulations relating to
pollution or protection of the environment or natural resources.
Federal Power Act shall mean the Federal Power Act, as amended, 16 U.S.C.
§§ 791a et seq.
FERC shall mean the Federal Energy Regulatory Commission or its successor.
Force Majeure shall mean any act of God, labor disturbance, act of the public
enemy, war, insurrection, riot, fire, storm or flood, explosion, breakage or accident to
machinery or equipment, any order, regulation or restriction imposed by governmental,
military or lawfully established civilian authorities, or any other cause beyond a Party's
control. A Force Majeure event does not include acts of negligence or intentional
wrongdoing by the Party claiming Force Majeure.
Generating Facility shall mean the Interconnection Customer's Electric
Generating Unit(s) used for the production of electricity identified in the Interconnection
Customer's Interconnection Request, but shall not include the Interconnection
Customer's Interconnection Facilities.
Generating Facility Capacity shall mean the net capacity of the Generating
Facility and the aggregate net capacity of the Generating Facility where it includes
multiple energy production devices.
Good Utility Practice shall mean any of the practices, methods and acts
engaged in or approved by a significant portion of the electric utility industry during the
relevant time period, or any of the practices, methods and acts which, in the exercise of
reasonable judgment in light of the facts known at the time the decision was made,
could have been expected to accomplish the desired result at a reasonable cost
consistent with good business practices, reliability, safety and expedition. Good Utility
Practice is not intended to be any one of a number of the optimum practices, methods,
or acts to the exclusion of all others, but rather to be acceptable practices, methods, or
acts generally accepted in the region.
Governmental Authority shall mean any federal, state, local or other
governmental, regulatory or administrative agency, court, commission, department,
board, or other governmental subdivision, legislature, rulemaking board, tribunal, or
other governmental authority having jurisdiction over the Parties, their respective
facilities, or the respective services they provide, and exercising or entitled to exercise
any administrative, executive, police, or taxing authority or power; provided, however,
4
that such term does not include the Interconnection Customer, ISO, Participating TO, or
any Affiliate thereof.
Hazardous Substances shall mean any chemicals, materials or substances
defined as or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "hazardous constituents," "restricted hazardous materials,"
"extremely hazardous substances," "toxic substances," "radioactive substances,"
"contaminants," "pollutants," "toxic pollutants" or words of similar meaning and
regulatory effect under any applicable Environmental Law, or any other chemical,
material or substance, exposure to which is prohibited, limited or regulated by any
applicable Environmental Law.
Initial Synchronization Date shall mean the date upon which an Electric
Generating Unit is initially synchronized and upon which Trial Operation begins.
In-Service Date shall mean the date upon which the Interconnection Customer
reasonably expects it will be ready to begin use of the Participating TO's
Interconnection Facilities to obtain back feed power.
Interconnection Customer's Interconnection Facilities shall mean all facilities
and equipment, as identified in Appendix A of this LGIA, that are located between the
Generating Facility and the Point of Change of Ownership, including any modification,
addition, or upgrades to such facilities and equipment necessary to physically and
electrically interconnect the Generating Facility to the Participating TO's Transmission
System. Interconnection Customer's Interconnection Facilities are sole use facilities.
Interconnection Facilities shall mean the Participating TO's Interconnection
Facilities and the Interconnection Customer's Interconnection Facilities. Collectively,
Interconnection Facilities include all facilities and equipment between the Generating
Facility and the Point of Interconnection, including any modification, additions or
upgrades that are necessary to physically and electrically interconnect the Generating
Facility to the Participating TO's Transmission System. Interconnection Facilities are
sole use facilities and shall not include Distribution Upgrades, Stand Alone Network
Upgrades or Network Upgrades.
Interconnection Facilities Study shall mean the study conducted or caused to
be performed by the ISO, in coordination with the applicable Participating TO(s), or a
third party consultant for the Interconnection Customer to determine a list of facilities
(including the Participating TO's Interconnection Facilities, Network Upgrades, and
Distribution Upgrades), the cost of those facilities, and the time required to interconnect
the Generating Facility with the Participating TO's Transmission System.
Interconnection Facilities Study Agreement shall mean the agreement
between the Interconnection Customer and the ISO for conducting the Interconnection
Facilities Study.
5
Interconnection Feasibility Study shall mean the preliminary evaluation
conducted or caused to be performed by the ISO, in coordination with the applicable
Participating TO(s), or a third party consultant for the Interconnection Customer of the
system impact and cost of interconnecting the Generating Facility to the Participating
TO's Transmission System.
Interconnection Handbook shall mean a handbook, developed by the
Participating TO and posted on the Participating TO's web site or otherwise made
available by the Participating TO, describing technical and operational requirements for
wholesale generators and loads connected to the Participating TO's portion of the ISO
Controlled Grid, as such handbook may be modified or superseded from time to time.
Participating TO's standards contained in the Interconnection Handbook shall be
deemed consistent with Good Utility Practice and Applicable Reliability Standards. In
the event of a conflict between the terms of this LGIA and the terms of the Participating
TO's Interconnection Handbook, the terms in this LGIA shall apply.
Interconnection Request shall mean a request, in the form of Appendix 1 to the
Standard Large Generator Interconnection Procedures, in accordance with the ISO
Tariff.
Interconnection Service shall mean the service provided by the Participating
TO and ISO associated with interconnecting the Interconnection Customer's Generating
Facility to the Participating TO's Transmission System and enabling the ISO Controlled
Grid to receive electric energy and capacity from the Generating Facility at the Point of
Interconnection, pursuant to the terms of this LGIA, the Participating TO's Transmission
Owner Tariff, and the ISO Tariff.
Interconnection Study shall mean any of the following studies: the
Interconnection Feasibility Study, the Interconnection System Impact Study, and the
Interconnection Facilities Study conducted or caused to be performed by the ISO, in
coordination with the applicable Participating TO(s), or a third party consultant for the
Interconnection Customer pursuant to the Standard Large Generator Interconnection
Procedures.
Interconnection System Impact Study shall mean the engineering study
conducted or caused to be performed by the ISO, in coordination with the applicable
Participating TO(s), or a third party consultant for the Interconnection Customer that
evaluates the impact of the proposed interconnection on the safety and reliability of the
Participating TO's Transmission System and, if applicable, an Affected System. The
study shall identify and detail the system impacts that would result if the Generating
Facility were interconnected without project modifications or system modifications,
focusing on the Adverse System Impacts identified in the Interconnection Feasibility
Study, or to study potential impacts, including but not limited to those identified in the
Scoping Meeting as described in the Standard Large Generator Interconnection
Procedures.
6
IRS shall mean the Internal Revenue Service.
ISO Controlled Grid shall mean the system of transmission lines and
associated facilities of the parties to the Transmission Control Agreement that have
been placed under the ISO's Operational Control.
ISO Tariff shall mean the ISO's tariff, as filed with FERC, and as amended or
supplemented from time to time, or any successor tariff.
Large Generating Facility shall mean a Generating Facility having a Generating
Facility Capacity of more than 20 MW.
Loss shall mean any and all damages, losses, and claims, including claims and
actions relating to injury to or death of any person or damage to property, demand,
suits, recoveries, costs and expenses, court costs, attorney fees, and all other
obligations by or to third parties.
Material Modification shall mean those modifications that have a material
impact on the cost or timing of any Interconnection Request or any other valid
interconnection request with a later queue priority date.
Metering Equipment shall mean all metering equipment installed or to be
installed for measuring the output of the Generating Facility pursuant to this LGIA at the
metering points, including but not limited to instrument transformers, MWh-meters, data
acquisition equipment, transducers, remote terminal unit, communications equipment,
phone lines, and fiber optics.
NERC shall mean the North American Electric Reliability Council or its successor
organization.
Network Upgrades shall be Participating TO's Delivery Network Upgrades and
Participating TO's Reliability Network Upgrades.
Operational Control shall mean the rights of the ISO under the Transmission
Control Agreement and the ISO Tariff to direct the parties to the Transmission Control
Agreement how to operate their transmission lines and facilities and other electric plant
affecting the reliability of those lines and facilities for the purpose of affording
comparable non-discriminatory transmission access and meeting applicable reliability
criteria.
Participating TO's Delivery Network Upgrades shall mean the additions,
modifications, and upgrades to the Participating TO's Transmission System at or
beyond the Point of Interconnection, other than Reliability Network Upgrades, identified
in the Interconnection Studies, as identified in Appendix A, to relieve constraints on the
ISO Controlled Grid.
7
Participating TO's Interconnection Facilities shall mean all facilities and
equipment owned, controlled or operated by the Participating TO from the Point of
Change of Ownership to the Point of Interconnection as identified in Appendix A to this
LGIA, including any modifications, additions or upgrades to such facilities and
equipment. Participating TO's Interconnection Facilities are sole use facilities and shall
not include Distribution Upgrades, Stand Alone Network Upgrades or Network
Upgrades.
Participating TO's Reliability Network Upgrades shall mean the additions,
modifications, and upgrades to the Participating TO's Transmission System at or
beyond the Point of Interconnection, identified in the Interconnection Studies, as
identified in Appendix A, necessary to interconnect the Large Generating Facility safely
and reliably to the Participating TO's Transmission System, which would not have been
necessary but for the interconnection of the Large Generating Facility, including
additions, modifications, and upgrades necessary to remedy short circuit or stability
problems resulting from the interconnection of the Large Generating Facility to the
Participating TO's Transmission System. Participating TO's Reliability Network
Upgrades also include, consistent with Applicable Reliability Council practice, the
Participating TO's facilities necessary to mitigate any adverse impact the Large
Generating Facility's interconnection may have on a path's Applicable Reliability
Council rating.
Participating TO's Transmission System shall mean the facilities owned and
operated by the Participating TO and that have been placed under the ISO's
Operational Control, which facilities form part of the ISO Controlled Grid.
Party or Parties shall mean the Participating TO, ISO, Interconnection
Customer or the applicable combination of the above.
Point of Change of Ownership shall mean the point, as set forth in Appendix A
to this LGIA, where the Interconnection Customer's Interconnection Facilities connect to
the Participating TO's Interconnection Facilities.
Point of Interconnection shall mean the point, as set forth in Appendix A to this
LGIA, where the Interconnection Facilities connect to the Participating TO's
Transmission System.
Qualifying Facility shall mean a qualifying cogeneration facility or qualifying
small power production facility, as defined in the Code of Federal Regulations, Title 18,
Part 292 (18 C.F.R. §292).
QF PGA shall mean a Qualifying Facility Participating Generator Agreement
specifying the special provisions for the operating relationship between a Qualifying
Facility and the ISO, a pro forma version of which is set forth in Appendix B.3 of the ISO
Tariff.
8
Reasonable Efforts shall mean, with respect to an action required to be
attempted or taken by a Party under this LGIA, efforts that are timely and consistent
with Good Utility Practice and are otherwise substantially equivalent to those a Party
would use to protect its own interests.
Scoping Meeting shall mean the meeting among representatives of the
Interconnection Customer, the Participating TO(s), other Affected Systems, and the ISO
conducted for the purpose of discussing alternative interconnection options, to
exchange information including any transmission data and earlier study evaluations that
would be reasonably expected to impact such interconnection options, to analyze such
information, and to determine the potential feasible Points of Interconnection.
Stand Alone Network Upgrades shall mean Network Upgrades that the
Interconnection Customer may construct without affecting day-to-day operations of the
ISO Controlled Grid or Affected Systems during their construction. The Participating
TO, the ISO, and the Interconnection Customer must agree as to what constitutes
Stand Alone Network Upgrades and identify them in Appendix A to this LGIA.
Standard Large Generator Interconnection Procedures (LGIP) shall mean
the ISO protocol that sets forth the interconnection procedures applicable to an
Interconnection Request pertaining to a Large Generating Facility that is included in the
ISO Tariff.
System Protection Facilities shall mean the equipment, including necessary
protection signal communications equipment, that protects (1) the Participating TO's
Transmission System, Participating TO's Interconnection Facilities, ISO Controlled Grid,
and Affected Systems from faults or other electrical disturbances occurring at the
Generating Facility and (2) the Generating Facility from faults or other electrical system
disturbances occurring on the ISO Controlled Grid, Participating TO's Interconnection
Facilities, and Affected Systems or on other delivery systems or other generating
systems to which the ISO Controlled Grid is directly connected.
Transmission Control Agreement shall mean ISO FERC Electric Tariff No. 7.
Trial Operation shall mean the period during which the Interconnection
Customer is engaged in on-site test operations and commissioning of an Electric
Generating Unit prior to Commercial Operation.
ARTICLE 2. EFFECTIVE DATE, TERM AND TERMINATION
2.1 Effective Date. This LGIA shall become effective upon execution by the Parties
subject to acceptance by FERC (if applicable), or if filed unexecuted, upon the
date specified by FERC. The ISO and Participating TO shall promptly file this
LGIA with FERC upon execution in accordance with Article 3.1, if required.
9
2.2 Term of Agreement. Subject to the provisions of Article 2.3, this LGIA shall
remain in effect for a period of ten (10) years from the Effective Date (Term
Specified in Individual Agreements to be ten (10) years or such other
longer period as the Interconnection Customer may request) and shall be
automatically renewed for each successive one-year period thereafter.
2.3 Termination Procedures.
2.3.1 Written Notice. This LGIA may be terminated by the Interconnection
Customer after giving the ISO and the Participating TO ninety (90)
Calendar Days advance written notice, or by the ISO and the Participating
TO notifying FERC after the Generating Facility permanently ceases
Commercial Operation.
2.3.2 Default. A Party may terminate this LGIA in accordance with Article 17.
2.3.3 Suspension of Work. This LGIA may be deemed terminated in
accordance with Article 5.16.
2.3.4 Notwithstanding Articles 2.3.1, 2.3.2, and 2.3.3, no termination shall
become effective until the Parties have complied with all Applicable Laws and
Regulations applicable to such termination, including the filing with FERC of a
notice of termination of this LGIA, which notice has been accepted for filing by
FERC.
2.4 Termination Costs. If this LGIA terminates pursuant to Article 2.3 above, the
Interconnection Customer shall pay all costs incurred or irrevocably committed to
be incurred in association with the Interconnection Customer's interconnection
(including any cancellation costs relating to orders or contracts for
Interconnection Facilities and equipment) and other expenses, including any
Network Upgrades and Distribution Upgrades for which the Participating TO or
ISO has incurred expenses or has irrevocably committed to incur expenses and
has not been reimbursed by the Interconnection Customer, as of the date of the
other Parties' receipt of the notice of termination, subject to the limitations set
forth in this Article 2.4. Nothing in this Article 2.4 shall limit the Parties' rights
under Article 17.
2.4.1 Notwithstanding the foregoing, in the event of termination by a Party, all
Parties shall use commercially Reasonable Efforts to mitigate the costs,
damages and charges arising as a consequence of termination. With
respect to any portion of the Participating TO's Interconnection Facilities
that have not yet been constructed or installed, the Participating TO shall
to the extent possible and with the Interconnection Customer's
authorization cancel any pending orders of, or return, any materials or
equipment for, or contracts for construction of, such facilities; provided
that in the event the Interconnection Customer elects not to authorize
such cancellation, the Interconnection Customer shall assume all payment
10
obligations with respect to such materials, equipment, and contracts, and
the Participating TO shall deliver such material and equipment, and, if
necessary, assign such contracts, to the Interconnection Customer as
soon as practicable, at the Interconnection Customer's expense. To the
extent that the Interconnection Customer has already paid the
Participating TO for any or all such costs of materials or equipment not
taken by the Interconnection Customer, the Participating TO shall
promptly refund such amounts to the Interconnection Customer, less any
costs, including penalties, incurred by the Participating TO to cancel any
pending orders of or return such materials, equipment, or contracts.
2.4.2 The Participating TO may, at its option, retain any portion of such
materials, equipment, or facilities that the Interconnection Customer
chooses not to accept delivery of, in which case the Participating TO shall
be responsible for all costs associated with procuring such materials,
equipment, or facilities.
2.4.3 With respect to any portion of the Interconnection Facilities, and any other
facilities already installed or constructed pursuant to the terms of this
LGIA, Interconnection Customer shall be responsible for all costs
associated with the removal, relocation or other disposition or retirement
of such materials, equipment, or facilities.
2.5 Disconnection. Upon termination of this LGIA, the Parties will take all
appropriate steps to disconnect the Large Generating Facility from the
Participating TO's Transmission System. All costs required to effectuate such
disconnection shall be borne by the terminating Party, unless such termination
resulted from the non-terminating Party's Default of this LGIA or such nonterminating Party otherwise is responsible for these costs under this LGIA.
2.6 Survival. This LGIA shall continue in effect after termination to the extent
necessary to provide for final billings and payments and for costs incurred
hereunder, including billings and payments pursuant to this LGIA; to permit the
determination and enforcement of liability and indemnification obligations arising
from acts or events that occurred while this LGIA was in effect; and to permit
each Party to have access to the lands of the other Parties pursuant to this LGIA
or other applicable agreements, to disconnect, remove or salvage its own
facilities and equipment.
ARTICLE 3. REGULATORY FILINGS AND ISO TARIFF COMPLIANCE
3.1 Filing. The Participating TO and the ISO shall file this LGIA (and any
amendment hereto) with the appropriate Governmental Authority(ies), if required.
The Interconnection Customer may request that any information so provided be
subject to the confidentiality provisions of Article 22. If the Interconnection
Customer has executed this LGIA, or any amendment thereto, the
11
Interconnection Customer shall reasonably cooperate with the Participating TO
and ISO with respect to such filing and to provide any information reasonably
requested by the Participating TO or ISO needed to comply with applicable
regulatory requirements.
3.2 Agreement Subject to ISO Tariff. The Interconnection Customer will comply
with all applicable provisions of the ISO Tariff, including the LGIP.
3.3 Relationship Between this LGIA and the ISO Tariff. With regard to rights and
obligations between the Participating TO and the Interconnection Customer, if
and to the extent a matter is specifically addressed by a provision of this LGIA
(including any appendices, schedules or other attachments to this LGIA), the
provisions of this LGIA shall govern. If and to the extent a provision of this LGIA
is inconsistent with the ISO Tariff and dictates rights and obligations between the
ISO and the Participating TO or the ISO and the Interconnection Customer, the
ISO Tariff shall govern.
3.4 Relationship Between this LGIA and the QF PGA. With regard to the rights
and obligations of a Qualifying Facility that has entered into a QF PGA with the
ISO and has entered into this LGIA, if and to the extent a matter is specifically
addressed by a provision of the QF PGA that is inconsistent with this LGIA, the
terms of the QF PGA shall govern.
ARTICLE 4. SCOPE OF SERVICE
4.1 Interconnection Service. Interconnection Service allows the Interconnection
Customer to connect the Large Generating Facility to the Participating TO's
Transmission System and be eligible to deliver the Large Generating Facility's
output using the available capacity of the ISO Controlled Grid. To the extent the
Interconnection Customer wants to receive Interconnection Service, the
Participating TO shall construct facilities identified in Appendices A and C that
the Participating TO is responsible to construct.
Interconnection Service does not necessarily provide the Interconnection
Customer with the capability to physically deliver the output of its Large
Generating Facility to any particular load on the ISO Controlled Grid without
incurring congestion costs. In the event of transmission constraints on the ISO
Controlled Grid, the Interconnection Customer's Large Generating Facility shall
be subject to the applicable congestion management procedures in the ISO
Tariff in the same manner as all other resources.
4.2 Provision of Service. The Participating TO and the ISO shall provide
Interconnection Service for the Large Generating Facility.
4.3 Performance Standards. Each Party shall perform all of its obligations under
this LGIA in accordance with Applicable Laws and Regulations, Applicable
12
Reliability Standards, and Good Utility Practice, and to the extent a Party is
required or prevented or limited in taking any action by such regulations and
standards, such Party shall not be deemed to be in Breach of this LGIA for its
compliance therewith. If such Party is the ISO or Participating TO, then that Party
shall amend the LGIA and submit the amendment to FERC for approval.
4.4 No Transmission Service. The execution of this LGIA does not constitute a
request for, nor the provision of, any transmission service under the ISO Tariff,
and does not convey any right to deliver electricity to any specific customer or
point of delivery.
4.5 Interconnection Customer Provided Services. The services provided by
Interconnection Customer under this LGIA are set forth in Article 9.6 and Article
13.5.1. Interconnection Customer shall be paid for such services in accordance
with Article 11.6.
ARTICLE 5. INTERCONNECTION FACILITIES ENGINEERING, PROCUREMENT,
AND CONSTRUCTION
Interconnection Facilities, Network Upgrades, and Distribution Upgrades shall be
studied, designed, and constructed pursuant to Good Utility Practice. Such studies,
design and construction shall be based on the assumed accuracy and completeness of
all technical information received by the Participating TO and the ISO from the
Interconnection Customer associated with interconnecting the Large Generating
Facility.
5.1 Options. Unless otherwise mutually agreed among the Parties, the
Interconnection Customer shall select the In-Service Date, Initial Synchronization
Date, and Commercial Operation Date; and either Standard Option or Alternate
Option set forth below for completion of the Participating TO's Interconnection
Facilities and Network Upgrades as set forth in Appendix A, Interconnection
Facilities, Network Upgrades, and Distribution Upgrades, and such dates and
selected option shall be set forth in Appendix B, Milestones.
5.1.1 Standard Option. The Participating TO shall design, procure, and
construct the Participating TO's Interconnection Facilities, Network
Upgrades, and Distribution Upgrades, using Reasonable Efforts to
complete the Participating TO's Interconnection Facilities, Network
Upgrades, and Distribution Upgrades by the dates set forth in Appendix B,
Milestones. The Participating TO shall not be required to undertake any
action which is inconsistent with its standard safety practices, its material
and equipment specifications, its design criteria and construction
procedures, its labor agreements, and Applicable Laws and Regulations.
In the event the Participating TO reasonably expects that it will not be able
to complete the Participating TO's Interconnection Facilities, Network
Upgrades, and Distribution Upgrades by the specified dates, the
13
Participating TO shall promptly provide written notice to the
Interconnection Customer and the ISO and shall undertake Reasonable
Efforts to meet the earliest dates thereafter.
5.1.2 Alternate Option. If the dates designated by the Interconnection
Customer are acceptable to the Participating TO, the Participating TO
shall so notify the Interconnection Customer within thirty (30) Calendar
Days, and shall assume responsibility for the design, procurement and
construction of the Participating TO's Interconnection Facilities by the
designated dates.
If the Participating TO subsequently fails to complete the Participating
TO's Interconnection Facilities by the In-Service Date, to the extent
necessary to provide back feed power; or fails to complete Network
Upgrades by the Initial Synchronization Date to the extent necessary to
allow for Trial Operation at full power output, unless other arrangements
are made by the Parties for such Trial Operation; or fails to complete the
Network Upgrades by the Commercial Operation Date, as such dates are
reflected in Appendix B, Milestones; the Participating TO shall pay the
Interconnection Customer liquidated damages in accordance with Article
5.3, Liquidated Damages, provided, however, the dates designated by the
Interconnection Customer shall be extended day for day for each day that
the ISO refuses to grant clearances to install equipment.
5.1.3 Option to Build. If the dates designated by the Interconnection
Customer are not acceptable to the Participating TO, the Participating TO
shall so notify the Interconnection Customer within thirty (30) Calendar
Days, and unless the Parties agree otherwise, the Interconnection
Customer shall have the option to assume responsibility for the design,
procurement and construction of the Participating TO's Interconnection
Facilities and Stand Alone Network Upgrades. If the Interconnection
Customer elects to exercise its option to assume responsibility for the
design, procurement and construction of the Participating TO's
Interconnection Facilities and Stand Alone Network Upgrades, it shall so
notify the Participating TO within thirty (30) Calendar Days of receipt of
the Participating TO's notification that the designated dates are not
acceptable to the Participating TO. The Participating TO, ISO, and
Interconnection Customer must agree as to what constitutes Stand Alone
Network Upgrades and identify such Stand Alone Network Upgrades in
Appendix A to this LGIA. Except for Stand Alone Network Upgrades, the
Interconnection Customer shall have no right to construct Network
Upgrades under this option.
5.1.4 Negotiated Option. If the Interconnection Customer elects not to
exercise its option under Article 5.1.3, Option to Build, the Interconnection
Customer shall so notify the Participating TO within thirty (30) Calendar
Days of receipt of the Participating TO's notification that the designated
14
dates are not acceptable to the Participating TO, and the Parties shall in
good faith attempt to negotiate terms and conditions (including revision of
the specified dates and liquidated damages, the provision of incentives or
the procurement and construction of a portion of the Participating TO's
Interconnection Facilities and Stand Alone Network Upgrades by the
Interconnection Customer) pursuant to which the Participating TO is
responsible for the design, procurement and construction of the
Participating TO's Interconnection Facilities and Network Upgrades. If the
Parties are unable to reach agreement on such terms and conditions, the
Participating TO shall assume responsibility for the design, procurement
and construction of the Participating TO's Interconnection Facilities and
Network Upgrades pursuant to Article 5.1.1, Standard Option.
5.2 General Conditions Applicable to Option to Build. If the Interconnection
Customer assumes responsibility for the design, procurement and construction
of the Participating TO's Interconnection Facilities and Stand Alone Network
Upgrades,
(1) the Interconnection Customer shall engineer, procure equipment, and
construct the Participating TO's Interconnection Facilities and Stand Alone
Network Upgrades (or portions thereof) using Good Utility Practice and
using standards and specifications provided in advance by the
Participating TO;
(2) The Interconnection Customer's engineering, procurement and
construction of the Participating TO's Interconnection Facilities and Stand
Alone Network Upgrades shall comply with all requirements of law to
which the Participating TO would be subject in the engineering,
procurement or construction of the Participating TO's Interconnection
Facilities and Stand Alone Network Upgrades;
(3) the Participating TO shall review, and the Interconnection Customer
shall obtain the Participating TO's approval of, the engineering design,
equipment acceptance tests, and the construction of the Participating
TO's Interconnection Facilities and Stand Alone Network Upgrades, which
approval shall not be unreasonably withheld, and the ISO may, at its
option, review the engineering design, equipment acceptance tests, and
the construction of the Participating TO's Interconnection Facilities and
Stand Alone Network Upgrades;
(4) prior to commencement of construction, the Interconnection Customer
shall provide to the Participating TO, with a copy to the ISO for
informational purposes, a schedule for construction of the Participating
TO's Interconnection Facilities and Stand Alone Network Upgrades, and
shall promptly respond to requests for information from the Participating
TO;
15
(5) at any time during construction, the Participating TO shall have the
right to gain unrestricted access to the Participating TO's Interconnection
Facilities and Stand Alone Network Upgrades and to conduct inspections
of the same;
(6) at any time during construction, should any phase of the engineering,
equipment procurement, or construction of the Participating TO's
Interconnection Facilities and Stand Alone Network Upgrades not meet
the standards and specifications provided by the Participating TO, the
Interconnection Customer shall be obligated to remedy deficiencies in that
portion of the Participating TO's Interconnection Facilities and Stand
Alone Network Upgrades;
(7) the Interconnection Customer shall indemnify the ISO and
Participating TO for claims arising from the Interconnection Customer's
construction of the Participating TO's Interconnection Facilities and Stand
Alone Network Upgrades under the terms and procedures applicable to
Article 18.1 Indemnity;
(8) The Interconnection Customer shall transfer control of the Participating
TO's Interconnection Facilities to the Participating TO and shall transfer
Operational Control of Stand Alone Network Upgrades to the ISO;
(9) Unless the Parties otherwise agree, the Interconnection Customer
shall transfer ownership of the Participating TO's Interconnection Facilities
and Stand Alone Network Upgrades to the Participating TO. As soon as
reasonably practicable, but within twelve months after completion of the
construction of the Participating TO's Interconnection Facilities and Stand
Alone Network Upgrades, the Interconnection Customer shall provide an
invoice of the final cost of the construction of the Participating TO's
Interconnection Facilities and Stand Alone Network Upgrades to the
Participating TO, which invoice shall set forth such costs in sufficient detail
to enable the Participating TO to reflect the proper costs of such facilities
in its transmission rate base and to identify the investment upon which
refunds will be provided;
(10) the Participating TO shall accept for operation and maintenance the
Participating TO's Interconnection Facilities and Stand Alone Network
Upgrades to the extent engineered, procured, and constructed in
accordance with this Article 5.2; and
(11) The Interconnection Customer's engineering, procurement and
construction of the Participating TO's Interconnection Facilities and Stand
Alone Network Upgrades shall comply with all requirements of the "Option
to Build" conditions set forth in Appendix C. Interconnection Customer
shall deliver to the Participating TO "as-built" drawings, information, and
any other documents that are reasonably required by the Participating TO
to assure that the Interconnection Facilities and Stand-Alone Network
16
Upgrades are built to the standards and specifications required by the
Participating TO.
5.3 Liquidated Damages. The actual damages to the Interconnection Customer, in
the event the Participating TO's Interconnection Facilities or Network Upgrades
are not completed by the dates designated by the Interconnection Customer and
accepted by the Participating TO pursuant to subparagraphs 5.1.2 or 5.1.4,
above, may include Interconnection Customer's fixed operation and
maintenance costs and lost opportunity costs. Such actual damages are
uncertain and impossible to determine at this time. Because of such uncertainty,
any liquidated damages paid by the Participating TO to the Interconnection
Customer in the event that the Participating TO does not complete any portion of
the Participating TO's Interconnection Facilities or Network Upgrades by the
applicable dates, shall be an amount equal to 1/2 of 1 percent per day of the
actual cost of the Participating TO's Interconnection Facilities and Network
Upgrades, in the aggregate, for which the Participating TO has assumed
responsibility to design, procure and construct.
However, in no event shall the total liquidated damages exceed 20 percent of the
actual cost of the Participating TO's Interconnection Facilities and Network
Upgrades for which the Participating TO has assumed responsibility to design,
procure, and construct. The foregoing payments will be made by the
Participating TO to the Interconnection Customer as just compensation for the
damages caused to the Interconnection Customer, which actual damages are
uncertain and impossible to determine at this time, and as reasonable liquidated
damages, but not as a penalty or a method to secure performance of this LGIA.
Liquidated damages, when the Parties agree to them, are the exclusive remedy
for the Participating TO's failure to meet its schedule.
No liquidated damages shall be paid to the Interconnection Customer if: (1) the
Interconnection Customer is not ready to commence use of the Participating
TO's Interconnection Facilities or Network Upgrades to take the delivery of power
for the Electric Generating Unit's Trial Operation or to export power from the
Electric Generating Unit on the specified dates, unless the Interconnection
Customer would have been able to commence use of the Participating TO's
Interconnection Facilities or Network Upgrades to take the delivery of power for
Electric Generating Unit's Trial Operation or to export power from the Electric
Generating Unit, but for the Participating TO's delay; (2) the Participating TO's
failure to meet the specified dates is the result of the action or inaction of the
Interconnection Customer or any other interconnection customer who has
entered into an interconnection agreement with the ISO and/or Participating TO,
action or inaction by the ISO, or any cause beyond the Participating TO's
reasonable control or reasonable ability to cure; (3) the Interconnection
Customer has assumed responsibility for the design, procurement and
construction of the Participating TO's Interconnection Facilities and Stand Alone
Network Upgrades; or (4) the Parties have otherwise agreed.
17
In no event shall the ISO have any responsibility or liability to the Interconnection
Customer for liquidated damages pursuant to the provisions of this Article 5.3.
5.4 Power System Stabilizers. The Interconnection Customer shall procure, install,
maintain and operate Power System Stabilizers in accordance with the
guidelines and procedures established by the Applicable Reliability Council and
in accordance with the provisions of Section 5.4.1 of the ISO Tariff. The ISO
reserves the right to establish reasonable minimum acceptable settings for any
installed Power System Stabilizers, subject to the design and operating
limitations of the Large Generating Facility. If the Large Generating Facility's
Power System Stabilizers are removed from service or not capable of automatic
operation, the Interconnection Customer shall immediately notify the ISO and the
Participating TO and restore the Power System Stabilizers to operation as soon
as possible and in accordance with the Reliability Management System
Agreement in Appendix G. The ISO shall have the right to order the reduction in
output or disconnection of the Large Generating Facility if the reliability of the
ISO Controlled Grid would be adversely affected as a result of improperly tuned
Power System Stabilizers. The requirements of this Article 5.4 shall not apply to
wind generators of the induction type.
5.5 Equipment Procurement. If responsibility for construction of the Participating
TO's Interconnection Facilities or Network Upgrades is to be borne by the
Participating TO, then the Participating TO shall commence design of the
Participating TO's Interconnection Facilities or Network Upgrades and procure
necessary equipment as soon as practicable after all of the following conditions
are satisfied, unless the Parties otherwise agree in writing:
5.5.1 The ISO, in coordination with the applicable Participating TO(s) has
completed the Interconnection Facilities Study pursuant to the
Interconnection Facilities Study Agreement;
5.5.2 The Participating TO has received written authorization to proceed with
design and procurement from the Interconnection Customer by the date
specified in Appendix B, Milestones; and
5.5.3 The Interconnection Customer has provided security to the Participating
TO in accordance with Article 11.5 by the dates specified in Appendix B,
Milestones.
5.6 Construction Commencement. The Participating TO shall commence
construction of the Participating TO's Interconnection Facilities and Network
Upgrades for which it is responsible as soon as practicable after the following
additional conditions are satisfied:
5.6.1 Approval of the appropriate Governmental Authority has been obtained for
any facilities requiring regulatory approval;
18
5.6.2 Necessary real property rights and rights-of-way have been obtained, to
the extent required for the construction of a discrete aspect of the
Participating TO's Interconnection Facilities and Network Upgrades;
5.6.3 The Participating TO has received written authorization to proceed with
construction from the Interconnection Customer by the date specified in
Appendix B, Milestones; and
5.6.4 The Interconnection Customer has provided payment and security to the
Participating TO in accordance with Article 11.5 by the dates specified in
Appendix B, Milestones.
5.7 Work Progress. The Parties will keep each other advised periodically as to the
progress of their respective design, procurement and construction efforts. Any
Party may, at any time, request a progress report from another Party. If, at any
time, the Interconnection Customer determines that the completion of the
Participating TO's Interconnection Facilities will not be required until after the
specified in-service date, the Interconnection Customer will provide written notice
to the Participating TO and ISO of such later date upon which the completion of
the Participating TO's Interconnection Facilities will be required.
5.8 Information Exchange. As soon as reasonably practicable after the Effective
Date, the Parties shall exchange information regarding the design and
compatibility of the Interconnection Customer's Interconnection Facilities and
Participating TO's Interconnection Facilities and compatibility of the
Interconnection Facilities with the Participating TO's Transmission System, and
shall work diligently and in good faith to make any necessary design changes.
5.9 Limited Operation. If any of the Participating TO's Interconnection Facilities or
Network Upgrades are not reasonably expected to be completed prior to the
Commercial Operation Date of the Electric Generating Unit, the Participating TO
and/or ISO, as applicable, shall, upon the request and at the expense of the
Interconnection Customer, perform operating studies on a timely basis to
determine the extent to which the Electric Generating Unit and the
Interconnection Customer's Interconnection Facilities may operate prior to the
completion of the Participating TO's Interconnection Facilities or Network
Upgrades consistent with Applicable Laws and Regulations, Applicable Reliability
Standards, Good Utility Practice, and this LGIA. The Participating TO and ISO
shall permit Interconnection Customer to operate the Electric Generating Unit
and the Interconnection Customer's Interconnection Facilities in accordance with
the results of such studies.
5.10 Interconnection Customer's Interconnection Facilities. The Interconnection
Customer shall, at its expense, design, procure, construct, own and install the
Interconnection Customer's Interconnection Facilities, as set forth in Appendix A.
19
5.10.1 Large Generating Facility and Interconnection Customer's
Interconnection Facilities Specifications. The Interconnection
Customer shall submit initial specifications for the Interconnection
Customer's Interconnection Facilities and Large Generating Facility,
including System Protection Facilities, to the Participating TO and the ISO
at least one hundred eighty (180) Calendar Days prior to the Initial
Synchronization Date; and final specifications for review and comment at
least ninety (90) Calendar Days prior to the Initial Synchronization Date.
The Participating TO and the ISO shall review such specifications
pursuant to this LGIA and the LGIP to ensure that the Interconnection
Customer's Interconnection Facilities and Large Generating Facility are
compatible with the technical specifications, operational control, safety
requirements, and any other applicable requirements of the Participating
TO and the ISO and comment on such specifications within thirty (30)
Calendar Days of the Interconnection Customer's submission. All
specifications provided hereunder shall be deemed confidential.
5.10.2 Participating TO's and ISO's Review. The Participating TO's and the
ISO's review of the Interconnection Customer's final specifications shall
not be construed as confirming, endorsing, or providing a warranty as to
the design, fitness, safety, durability or reliability of the Large Generating
Facility, or the Interconnection Customer's Interconnection Facilities.
Interconnection Customer shall make such changes to the Interconnection
Customer's Interconnection Facilities as may reasonably be required by
the Participating TO or the ISO, in accordance with Good Utility Practice,
to ensure that the Interconnection Customer's Interconnection Facilities
are compatible with the technical specifications, Operational Control, and
safety requirements of the Participating TO or the ISO.
5.10.3 Interconnection Customer's Interconnection Facilities Construction.
The Interconnection Customer's Interconnection Facilities shall be
designed and constructed in accordance with Good Utility Practice.
Within one hundred twenty (120) Calendar Days after the Commercial
Operation Date, unless the Participating TO and Interconnection
Customer agree on another mutually acceptable deadline, the
Interconnection Customer shall deliver to the Participating TO and ISO
"as-built" drawings, information and documents for the Interconnection
Customer's Interconnection Facilities and the Electric Generating Unit(s),
such as: a one-line diagram, a site plan showing the Large Generating
Facility and the Interconnection Customer's Interconnection Facilities,
plan and elevation drawings showing the layout of the Interconnection
Customer's Interconnection Facilities, a relay functional diagram, relaying
AC and DC schematic wiring diagrams and relay settings for all facilities
associated with the Interconnection Customer's step-up transformers, the
facilities connecting the Large Generating Facility to the step-up
transformers and the Interconnection Customer's Interconnection
Facilities, and the impedances (determined by factory tests) for the
20
associated step-up transformers and the Electric Generating Units. The
Interconnection Customer shall provide the Participating TO and the ISO
specifications for the excitation system, automatic voltage regulator, Large
Generating Facility control and protection settings, transformer tap
settings, and communications, if applicable. Any deviations from the relay
settings, machine specifications, and other specifications originally
submitted by the Interconnection Customer shall be assessed by the
Participating TO and the ISO pursuant to the appropriate provisions of this
LGIA and the LGIP.
5.10.4 Interconnection Customer to Meet Requirements of the Participating
TO's Interconnection Handbook. The Interconnection Customer shall
comply with the Participating TO's Interconnection Handbook.
5.11 Participating TO's Interconnection Facilities Construction. The Participating
TO's Interconnection Facilities shall be designed and constructed in accordance
with Good Utility Practice. Upon request, within one hundred twenty (120)
Calendar Days after the Commercial Operation Date, unless the Participating TO
and Interconnection Customer agree on another mutually acceptable deadline,
the Participating TO shall deliver to the Interconnection Customer and the ISO
the following "as-built" drawings, information and documents for the Participating
TO's Interconnection Facilities [include appropriate drawings and relay
diagrams].
The Participating TO will obtain control for operating and maintenance purposes
of the Participating TO's Interconnection Facilities and Stand Alone Network
Upgrades upon completion of such facilities. Pursuant to Article 5.2, the ISO will
obtain Operational Control of the Stand Alone Network Upgrades prior to the
Commercial Operation Date.
5.12 Access Rights. Upon reasonable notice and supervision by a Party, and
subject to any required or necessary regulatory approvals, a Party ("Granting
Party") shall furnish at no cost to the other Party ("Access Party") any rights of
use, licenses, rights of way and easements with respect to lands owned or
controlled by the Granting Party, its agents (if allowed under the applicable
agency agreement), or any Affiliate, that are necessary to enable the Access
Party to obtain ingress and egress to construct, operate, maintain, repair, test (or
witness testing), inspect, replace or remove facilities and equipment to: (i)
interconnect the Large Generating Facility with the Participating TO's
Transmission System; (ii) operate and maintain the Large Generating Facility,
the Interconnection Facilities and the Participating TO's Transmission System;
and (iii) disconnect or remove the Access Party's facilities and equipment upon
termination of this LGIA. In exercising such licenses, rights of way and
easements, the Access Party shall not unreasonably disrupt or interfere with
normal operation of the Granting Party's business and shall adhere to the safety
rules and procedures established in advance, as may be changed from time to
time, by the Granting Party and provided to the Access Party.
21
5.13 Lands of Other Property Owners. If any part of the Participating TO's
Interconnection Facilities and/or Network Upgrades are to be installed on
property owned by persons other than the Interconnection Customer or
Participating TO, the Participating TO shall at the Interconnection Customer's
expense use efforts, similar in nature and extent to those that it typically
undertakes on its own behalf or on behalf of its Affiliates, including use of its
eminent domain authority, and to the extent consistent with state law, to procure
from such persons any rights of use, licenses, rights of way and easements that
are necessary to construct, operate, maintain, test, inspect, replace or remove
the Participating TO's Interconnection Facilities and/or Network Upgrades upon
such property.
5.14 Permits. Participating TO and Interconnection Customer shall cooperate with
each other in good faith in obtaining all permits, licenses and authorization that
are necessary to accomplish the interconnection in compliance with Applicable
Laws and Regulations. With respect to this paragraph, the Participating TO shall
provide permitting assistance to the Interconnection Customer comparable to
that provided to the Participating TO's own, or an Affiliate's generation.
5.15 Early Construction of Base Case Facilities. The Interconnection Customer
may request the Participating TO to construct, and the Participating TO shall
construct, using Reasonable Efforts to accommodate Interconnection
Customer's In-Service Date, all or any portion of any Network Upgrades required
for Interconnection Customer to be interconnected to the Participating TO's
Transmission System which are included in the Base Case of the
Interconnection Studies for the Interconnection Customer, and which also are
required to be constructed for another interconnection customer, but where such
construction is not scheduled to be completed in time to achieve Interconnection
Customer's In-Service Date.
5.16 Suspension. The Interconnection Customer reserves the right, upon written
notice to the Participating TO and the ISO, to suspend at any time all work
associated with the construction and installation of the Participating TO's
Interconnection Facilities, Network Upgrades, and/or Distribution Upgrades
required under this LGIA with the condition that the Participating TO's electrical
system and the ISO Controlled Grid shall be left in a safe and reliable condition
in accordance with Good Utility Practice and the Participating TO's safety and
reliability criteria and the ISO's Applicable Reliability Standards. In such event,
the Interconnection Customer shall be responsible for all reasonable and
necessary costs which the Participating TO (i) has incurred pursuant to this LGIA
prior to the suspension and (ii) incurs in suspending such work, including any
costs incurred to perform such work as may be necessary to ensure the safety of
persons and property and the integrity of the Participating TO's electric system
during such suspension and, if applicable, any costs incurred in connection with
the cancellation or suspension of material, equipment and labor contracts which
the Participating TO cannot reasonably avoid; provided, however, that prior to
22
canceling or suspending any such material, equipment or labor contract, the
Participating TO shall obtain Interconnection Customer's authorization to do so.
The Participating TO shall invoice the Interconnection Customer for such costs
pursuant to Article 12 and shall use due diligence to minimize its costs. In the
event Interconnection Customer suspends work required under this LGIA
pursuant to this Article 5.16, and has not requested the Participating TO to
recommence the work or has not itself recommenced work required under this
LGIA on or before the expiration of three (3) years following commencement of
such suspension, this LGIA shall be deemed terminated. The three-year period
shall begin on the date the suspension is requested, or the date of the written
notice to the Participating TO and the ISO, if no effective date is specified.
5.17 Taxes.
5.17.1 Interconnection Customer Payments Not Taxable. The Parties intend
that all payments or property transfers made by the Interconnection
Customer to the Participating TO for the installation of the Participating
TO's Interconnection Facilities and the Network Upgrades shall be nontaxable, either as contributions to capital, or as a refundable advance, in
accordance with the Internal Revenue Code and any applicable state
income tax laws and shall not be taxable as contributions in aid of
construction or otherwise under the Internal Revenue Code and any
applicable state income tax laws.
5.17.2 Representations And Covenants. In accordance with IRS Notice 2001-
82 and IRS Notice 88-129, the Interconnection Customer represents and
covenants that (i) ownership of the electricity generated at the Large
Generating Facility will pass to another party prior to the transmission of
the electricity on the ISO Controlled Grid, (ii) for income tax purposes, the
amount of any payments and the cost of any property transferred to the
Participating TO for the Participating TO's Interconnection Facilities will be
capitalized by the Interconnection Customer as an intangible asset and
recovered using the straight-line method over a useful life of twenty (20)
years, and (iii) any portion of the Participating TO's Interconnection
Facilities that is a "dual-use intertie," within the meaning of IRS Notice 88-
129, is reasonably expected to carry only a de minimis amount of
electricity in the direction of the Large Generating Facility. For this
purpose, "de minimis amount" means no more than 5 percent of the total
power flows in both directions, calculated in accordance with the "5
percent test" set forth in IRS Notice 88-129. This is not intended to be an
exclusive list of the relevant conditions that must be met to conform to IRS
requirements for non-taxable treatment.
At the Participating TO's request, the Interconnection Customer shall
provide the Participating TO with a report from an independent engineer
confirming its representation in clause (iii), above. The Participating TO
23
represents and covenants that the cost of the Participating TO's
Interconnection Facilities paid for by the Interconnection Customer without
the possibility of refund or credit will have no net effect on the base upon
which rates are determined.
5.17.3 Indemnification for the Cost Consequence of Current Tax Liability
Imposed Upon the Participating TO. Notwithstanding Article 5.17.1, the
Interconnection Customer shall protect, indemnify and hold harmless the
Participating TO from the cost consequences of any current tax liability
imposed against the Participating TO as the result of payments or
property transfers made by the Interconnection Customer to the
Participating TO under this LGIA for Interconnection Facilities, as well as
any interest and penalties, other than interest and penalties attributable to
any delay caused by the Participating TO.
The Participating TO shall not include a gross-up for the cost
consequences of any current tax liability in the amounts it charges the
Interconnection Customer under this LGIA unless (i) the Participating TO
has determined, in good faith, that the payments or property transfers
made by the Interconnection Customer to the Participating TO should be
reported as income subject to taxation or (ii) any Governmental Authority
directs the Participating TO to report payments or property as income
subject to taxation; provided, however, that the Participating TO may
require the Interconnection Customer to provide security for
Interconnection Facilities, in a form reasonably acceptable to the
Participating TO (such as a parental guarantee or a letter of credit), in an
amount equal to the cost consequences of any current tax liability under
this Article 5.17. The Interconnection Customer shall reimburse the
Participating TO for such costs on a fully grossed-up basis, in accordance
with Article 5.17.4, within thirty (30) Calendar Days of receiving written
notification from the Participating TO of the amount due, including detail
about how the amount was calculated.
The indemnification obligation shall terminate at the earlier of (1) the
expiration of the ten year testing period and the applicable statute of
limitation, as it may be extended by the Participating TO upon request of
the IRS, to keep these years open for audit or adjustment, or (2) the
occurrence of a subsequent taxable event and the payment of any related
indemnification obligations as contemplated by this Article 5.17,
5.17.4 Tax Gross-Up Amount. The Interconnection Customer's liability for the
cost consequences of any current tax liability under this Article 5.17 shall
be calculated on a fully grossed-up basis. Except as may otherwise be
agreed to by the parties, this means that the Interconnection Customer
will pay the Participating TO, in addition to the amount paid for the
Interconnection Facilities and Network Upgrades, an amount equal to (1)
the current taxes imposed on the Participating TO ("Current Taxes") on
24
the excess of (a) the gross income realized by the Participating TO as a
result of payments or property transfers made by the Interconnection
Customer to the Participating TO under this LGIA (without regard to any
payments under this Article 5.17) (the "Gross Income Amount") over (b)
the present value of future tax deductions for depreciation that will be
available as a result of such payments or property transfers (the "Present
Value Depreciation Amount"), plus (2) an additional amount sufficient to
permit the Participating TO to receive and retain, after the payment of all
Current Taxes, an amount equal to the net amount described in clause
(1).
For this purpose, (i) Current Taxes shall be computed based on the
Participating TO's composite federal and state tax rates at the time the
payments or property transfers are received and the Participating TO will
be treated as being subject to tax at the highest marginal rates in effect at
that time (the "Current Tax Rate"), and (ii) the Present Value Depreciation
Amount shall be computed by discounting the Participating TO's
anticipated tax depreciation deductions as a result of such payments or
property transfers by the Participating TO's current weighted average cost
of capital. Thus, the formula for calculating the Interconnection
Customer's liability to the Participating TO pursuant to this Article 5.17.4
can be expressed as follows: (Current Tax Rate x (Gross Income Amount
– Present Value of Tax Depreciation))/(1-Current Tax Rate).
Interconnection Customer's estimated tax liability in the event taxes are
imposed shall be stated in Appendix A, Interconnection Facilities, Network
Upgrades and Distribution Upgrades.
5.17.5 Private Letter Ruling or Change or Clarification of Law. At the
Interconnection Customer's request and expense, the Participating TO
shall file with the IRS a request for a private letter ruling as to whether any
property transferred or sums paid, or to be paid, by the Interconnection
Customer to the Participating TO under this LGIA are subject to federal
income taxation. The Interconnection Customer will prepare the initial
draft of the request for a private letter ruling, and will certify under
penalties of perjury that all facts represented in such request are true and
accurate to the best of the Interconnection Customer's knowledge. The
Participating TO and Interconnection Customer shall cooperate in good
faith with respect to the submission of such request, provided, however,
the Interconnection Customer and the Participating TO explicitly
acknowledge (and nothing herein is intended to alter) Participating TO's
obligation under law to certify that the facts presented in the ruling request
are true, correct and complete.
The Participating TO shall keep the Interconnection Customer fully
informed of the status of such request for a private letter ruling and shall
execute either a privacy act waiver or a limited power of attorney, in a
form acceptable to the IRS, that authorizes the Interconnection Customer
25
to participate in all discussions with the IRS regarding such request for a
private letter ruling. The Participating TO shall allow the Interconnection
Customer to attend all meetings with IRS officials about the request and
shall permit the Interconnection Customer to prepare the initial drafts of
any follow-up letters in connection with the request.
5.17.6 Subsequent Taxable Events. If, within 10 years from the date on which
the relevant Participating TO's Interconnection Facilities are placed in
service, (i) the Interconnection Customer Breaches the covenants
contained in Article 5.17.2, (ii) a "disqualification event" occurs within the
meaning of IRS Notice 88-129, or (iii) this LGIA terminates and the
Participating TO retains ownership of the Interconnection Facilities and
Network Upgrades, the Interconnection Customer shall pay a tax gross-up
for the cost consequences of any current tax liability imposed on the
Participating TO, calculated using the methodology described in Article
5.17.4 and in accordance with IRS Notice 90-60.
5.17.7 Contests. In the event any Governmental Authority determines that the
Participating TO's receipt of payments or property constitutes income that
is subject to taxation, the Participating TO shall notify the Interconnection
Customer, in writing, within thirty (30) Calendar Days of receiving
notification of such determination by a Governmental Authority. Upon the
timely written request by the Interconnection Customer and at the
Interconnection Customer's sole expense, the Participating TO may
appeal, protest, seek abatement of, or otherwise oppose such
determination. Upon the Interconnection Customer's written request and
sole expense, the Participating TO may file a claim for refund with respect
to any taxes paid under this Article 5.17, whether or not it has received
such a determination. The Participating TO reserve the right to make all
decisions with regard to the prosecution of such appeal, protest,
abatement or other contest, including the selection of counsel and
compromise or settlement of the claim, but the Participating TO shall keep
the Interconnection Customer informed, shall consider in good faith
suggestions from the Interconnection Customer about the conduct of the
contest, and shall reasonably permit the Interconnection Customer or an
Interconnection Customer representative to attend contest proceedings.
The Interconnection Customer shall pay to the Participating TO on a
periodic basis, as invoiced by the Participating TO, the Participating TO's
documented reasonable costs of prosecuting such appeal, protest,
abatement or other contest, including any costs associated with obtaining
the opinion of independent tax counsel described in this Article 5.17.7.
The Participating TO may abandon any contest if the Interconnection
Customer fails to provide payment to the Participating TO within thirty (30)
Calendar Days of receiving such invoice.
26
At any time during the contest, the Participating TO may agree to a
settlement either with the Interconnection Customer's consent or, if such
consent is refused, after obtaining written advice from independent
nationally-recognized tax counsel, selected by the Participating TO, but
reasonably acceptable to the Interconnection Customer, that the
proposed settlement represents a reasonable settlement given the
hazards of litigation. The Interconnection Customer's obligation shall be
based on the amount of the settlement agreed to by the Interconnection
Customer, or if a higher amount, so much of the settlement that is
supported by the written advice from nationally-recognized tax counsel
selected under the terms of the preceding paragraph. The settlement
amount shall be calculated on a fully grossed-up basis to cover any
related cost consequences of the current tax liability. The Participating
TO may also settle any tax controversy without receiving the
Interconnection Customer's consent or any such written advice; however,
any such settlement will relieve the Interconnection Customer from any
obligation to indemnify the Participating TO for the tax at issue in the
contest (unless the failure to obtain written advice is attributable to the
Interconnection Customer's unreasonable refusal to the appointment of
independent tax counsel).
5.17.8 Refund. In the event that (a) a private letter ruling is issued to the
Participating TO which holds that any amount paid or the value of any
property transferred by the Interconnection Customer to the Participating
TO under the terms of this LGIA is not subject to federal income taxation,
(b) any legislative change or administrative announcement, notice, ruling
or other determination makes it reasonably clear to the Participating TO in
good faith that any amount paid or the value of any property transferred
by the Interconnection Customer to the Participating TO under the terms
of this LGIA is not taxable to the Participating TO, (c) any abatement,
appeal, protest, or other contest results in a determination that any
payments or transfers made by the Interconnection Customer to the
Participating TO are not subject to federal income tax, or (d) if the
Participating TO receives a refund from any taxing authority for any
overpayment of tax attributable to any payment or property transfer made
by the Interconnection Customer to the Participating TO pursuant to this
LGIA, the Participating TO shall promptly refund to the Interconnection
Customer the following:
(i) any payment made by Interconnection Customer under this
Article 5.17 for taxes that is attributable to the amount determined
to be non-taxable, together with interest thereon,
(ii) interest on any amounts paid by the Interconnection Customer
to the Participating TO for such taxes which the Participating TO
did not submit to the taxing authority, calculated in accordance with
the methodology set forth in FERC's regulations at 18 C.F.R.
27
§35.19a(a)(2)(iii) from the date payment was made by the
Interconnection Customer to the date the Participating TO refunds
such payment to the Interconnection Customer, and
(iii) with respect to any such taxes paid by the Participating TO, any
refund or credit the Participating TO receives or to which it may be
entitled from any Governmental Authority, interest (or that portion
thereof attributable to the payment described in clause (i), above)
owed to the Participating TO for such overpayment of taxes
(including any reduction in interest otherwise payable by the
Participating TO to any Governmental Authority resulting from an
offset or credit); provided, however, that the Participating TO will
remit such amount promptly to the Interconnection Customer only
after and to the extent that the Participating TO has received a tax
refund, credit or offset from any Governmental Authority for any
applicable overpayment of income tax related to the Participating
TO's Interconnection Facilities.
The intent of this provision is to leave the Parties, to the extent
practicable, in the event that no taxes are due with respect to any
payment for Interconnection Facilities and Network Upgrades hereunder,
in the same position they would have been in had no such tax payments
been made.
5.17.9 Taxes Other Than Income Taxes. Upon the timely request by the
Interconnection Customer, and at the Interconnection Customer's sole
expense, the ISO or Participating TO may appeal, protest, seek
abatement of, or otherwise contest any tax (other than federal or state
income tax) asserted or assessed against the ISO or Participating TO for
which the Interconnection Customer may be required to reimburse the
ISO or Participating TO under the terms of this LGIA. The Interconnection
Customer shall pay to the Participating TO on a periodic basis, as
invoiced by the Participating TO, the Participating TO's documented
reasonable costs of prosecuting such appeal, protest, abatement, or other
contest. The Interconnection Customer, the ISO, and the Participating TO
shall cooperate in good faith with respect to any such contest. Unless the
payment of such taxes is a prerequisite to an appeal or abatement or
cannot be deferred, no amount shall be payable by the Interconnection
Customer to the ISO or Participating TO for such taxes until they are
assessed by a final, non-appealable order by any court or agency of
competent jurisdiction. In the event that a tax payment is withheld and
ultimately due and payable after appeal, the Interconnection Customer will
be responsible for all taxes, interest and penalties, other than penalties
attributable to any delay caused by the Participating TO.
5.18 Tax Status. Each Party shall cooperate with the others to maintain the other
Parties' tax status. Nothing in this LGIA is intended to adversely affect the ISO's
28
or any Participating TO's tax exempt status with respect to the issuance of bonds
including, but not limited to, Local Furnishing Bonds.
5.19 Modification.
5.19.1 General. The Interconnection Customer or the Participating TO may
undertake modifications to its facilities, subject to the provisions of this
LGIA and the ISO Tariff. If a Party plans to undertake a modification that
reasonably may be expected to affect the other Parties' facilities, that
Party shall provide to the other Parties sufficient information regarding
such modification so that the other Parties may evaluate the potential
impact of such modification prior to commencement of the work. Such
information shall be deemed to be confidential hereunder and shall
include information concerning the timing of such modifications and
whether such modifications are expected to interrupt the flow of electricity
from the Large Generating Facility. The Party desiring to perform such
work shall provide the relevant drawings, plans, and specifications to the
other Parties at least ninety (90) Calendar Days in advance of the
commencement of the work or such shorter period upon which the Parties
may agree, which agreement shall not unreasonably be withheld,
conditioned or delayed.
In the case of Large Generating Facility modifications that do not require
the Interconnection Customer to submit an Interconnection Request, the
ISO or Participating TO shall provide, within thirty (30) Calendar Days (or
such other time as the Parties may agree), an estimate of any additional
modifications to the ISO Controlled Grid, Participating TO's
Interconnection Facilities, Network Upgrades or Distribution Upgrades
necessitated by such Interconnection Customer modification and a good
faith estimate of the costs thereof. The Participating TO and the ISO shall
determine if a Large Generating Facility modification is a Material
Modification in accordance with the LGIP.
5.19.2 Standards. Any additions, modifications, or replacements made to a
Party's facilities shall be designed, constructed and operated in
accordance with this LGIA and Good Utility Practice.
5.19.3 Modification Costs. The Interconnection Customer shall not be directly
assigned the costs of any additions, modifications, or replacements that
the Participating TO makes to the Participating TO's Interconnection
Facilities or the Participating TO's Transmission System to facilitate the
interconnection of a third party to the Participating TO's Interconnection
Facilities or the Participating TO's Transmission System, or to provide
transmission service to a third party under the ISO Tariff. The
Interconnection Customer shall be responsible for the costs of any
additions, modifications, or replacements to the Interconnection Facilities
that may be necessary to maintain or upgrade such Interconnection
29
Facilities consistent with Applicable Laws and Regulations, Applicable
Reliability Standards or Good Utility Practice.
ARTICLE 6. TESTING AND INSPECTION
6.1 Pre-Commercial Operation Date Testing and Modifications. Prior to the
Commercial Operation Date, the Participating TO shall test the Participating TO's
Interconnection Facilities, Network Upgrades, and Distribution Upgrades and the
Interconnection Customer shall test the Large Generating Facility and the
Interconnection Customer's Interconnection Facilities to ensure their safe and
reliable operation. Similar testing may be required after initial operation. Each
Party shall make any modifications to its facilities that are found to be necessary
as a result of such testing. The Interconnection Customer shall bear the cost of
all such testing and modifications. The Interconnection Customer shall not
commence initial parallel operation of an Electric Generating Unit with the
Participating TO's Transmission System until the Participating TO provides prior
written approval, which approval shall not be unreasonably withheld, for
operation of such Electric Generating Unit. The Interconnection Customer shall
generate test energy at the Large Generating Facility only if it has arranged for
the delivery of such test energy.
6.2 Post-Commercial Operation Date Testing and Modifications. Each Party
shall at its own expense perform routine inspection and testing of its facilities and
equipment in accordance with Good Utility Practice as may be necessary to
ensure the continued interconnection of the Large Generating Facility with the
Participating TO's Transmission System in a safe and reliable manner. Each
Party shall have the right, upon advance written notice, to require reasonable
additional testing of the other Party's facilities, at the requesting Party's expense,
as may be in accordance with Good Utility Practice.
6.3 Right to Observe Testing. Each Party shall notify the other Parties at least
fourteen (14) days in advance of its performance of tests of its Interconnection
Facilities or Generating Facility. The other Parties have the right, at their own
expense, to observe such testing.
6.4 Right to Inspect. Each Party shall have the right, but shall have no obligation
to: (i) observe another Party's tests and/or inspection of any of its System
Protection Facilities and other protective equipment, including Power System
Stabilizers; (ii) review the settings of another Party's System Protection Facilities
and other protective equipment; and (iii) review another Party's maintenance
records relative to the Interconnection Facilities, the System Protection Facilities
and other protective equipment. A Party may exercise these rights from time to
time as it deems necessary upon reasonable notice to the other Party. The
exercise or non-exercise by a Party of any such rights shall not be construed as
an endorsement or confirmation of any element or condition of the
Interconnection Facilities or the System Protection Facilities or other protective
30
equipment or the operation thereof, or as a warranty as to the fitness, safety,
desirability, or reliability of same. Any information that a Party obtains through
the exercise of any of its rights under this Article 6.4 shall be deemed to be
Confidential Information and treated pursuant to Article 22 of this LGIA.
ARTICLE 7. METERING
7.1 General. Each Party shall comply with the Applicable Reliability Council
requirements. The Interconnection Customer and ISO shall comply with the
provisions of the ISO Tariff regarding metering, including Section 10 and the
Metering Protocol of the ISO Tariff. Unless otherwise agreed by the Participating
TO and the Interconnection Customer, the Participating TO may install additional
Metering Equipment at the Point of Interconnection prior to any operation of any
Electric Generating Unit and shall own, operate, test and maintain such Metering
Equipment. Power flows to and from the Large Generating Facility shall be
measured at or, at the ISO's or Participating TO's option for its respective
Metering Equipment, compensated to, the Point of Interconnection. The ISO
shall provide metering quantities to the Interconnection Customer upon request
in accordance with the ISO Tariff by directly polling the ISO's meter data
acquisition system. The Interconnection Customer shall bear all reasonable
documented costs associated with the purchase, installation, operation, testing
and maintenance of the Metering Equipment.
7.2 Check Meters. The Interconnection Customer, at its option and expense, may
install and operate, on its premises and on its side of the Point of
Interconnection, one or more check meters to check the ISO-polled meters or
the Participating TO's meters. Such check meters shall be for check purposes
only and shall not be used for the measurement of power flows for purposes of
this LGIA, except in the case that no other means are available on a temporary
basis at the option of the ISO or the Participating TO. The check meters shall be
subject at all reasonable times to inspection and examination by the ISO or
Participating TO or their designees. The installation, operation and maintenance
thereof shall be performed entirely by the Interconnection Customer in
accordance with Good Utility Practice.
7.3 Participating TO Retail Metering. The Participating TO may install retail
revenue quality meters and associated equipment, pursuant to the Participating
TO's applicable retail tariffs.
ARTICLE 8. COMMUNICATIONS
8.1 Interconnection Customer Obligations. The Interconnection Customer shall
maintain satisfactory operating communications with the ISO in accordance with
the provisions of the ISO Tariff and with the Participating TO's dispatcher or
representative designated by the Participating TO. The Interconnection
Customer shall provide standard voice line, dedicated voice line and facsimile
31
communications at its Large Generating Facility control room or central dispatch
facility through use of either the public telephone system, or a voice
communications system that does not rely on the public telephone system. The
Interconnection Customer shall also provide the dedicated data circuit(s)
necessary to provide Interconnection Customer data to the ISO and Participating
TO as set forth in Appendix D, Security Arrangements Details. The data
circuit(s) shall extend from the Large Generating Facility to the location(s)
specified by the ISO and Participating TO. Any required maintenance of such
communications equipment shall be performed by the Interconnection Customer.
Operational communications shall be activated and maintained under, but not
be limited to, the following events: system paralleling or separation, scheduled
and unscheduled shutdowns, equipment clearances, and hourly and daily load
data.
8.2 Remote Terminal Unit. Prior to the Initial Synchronization Date of each Electric
Generating Unit, a Remote Terminal Unit, or equivalent data collection and
transfer equipment acceptable to the Parties, shall be installed by the
Interconnection Customer, or by the Participating TO at the Interconnection
Customer's expense, to gather accumulated and instantaneous data to be
telemetered to the location(s) designated by the ISO and by the Participating TO
through use of a dedicated point-to-point data circuit(s) as indicated in
Article 8.1.
Telemetry to the ISO shall be provided in accordance with the ISO's technical
standards for direct telemetry. For telemetry to the Participating TO, the
communication protocol for the data circuit(s) shall be specified by the
Participating TO. Instantaneous bi-directional real power and reactive power
flow and any other required information must be telemetered directly to the
location(s) specified by the Participating TO.
Each Party will promptly advise the other Parties if it detects or otherwise learns
of any metering, telemetry or communications equipment errors or malfunctions
that require the attention and/or correction by another Party. The Party owning
such equipment shall correct such error or malfunction as soon as reasonably
feasible.
8.3 No Annexation. Any and all equipment placed on the premises of a Party shall
be and remain the property of the Party providing such equipment regardless of
the mode and manner of annexation or attachment to real property, unless
otherwise mutually agreed by the Parties.
ARTICLE 9. OPERATIONS
9.1 General. Each Party shall comply with the Applicable Reliability Council
requirements, and the Interconnection Customer shall execute the Reliability
Management System Agreement of the Applicable Reliability Council attached
32
hereto as Appendix G. Each Party shall provide to the other Party all information
that may reasonably be required by the other Party to comply with Applicable
Laws and Regulations and Applicable Reliability Standards.
9.2 Control Area Notification. At least three months before Initial Synchronization
Date, the Interconnection Customer shall notify the ISO and Participating TO in
writing of the Control Area in which the Large Generating Facility intends to be
located. If the Interconnection Customer intends to locate the Large Generating
Facility in a Control Area other than the Control Area within whose electrically
metered boundaries the Large Generating Facility is located, and if permitted to
do so by the relevant transmission tariffs, all necessary arrangements, including
but not limited to those set forth in Article 7 and Article 8 of this LGIA, and
remote Control Area generator interchange agreements, if applicable, and the
appropriate measures under such agreements, shall be executed and
implemented prior to the placement of the Large Generating Facility in the other
Control Area.
9.3 ISO and Participating TO Obligations. The ISO and Participating TO shall
cause the Participating TO's Transmission System to be operated and controlled
in a safe and reliable manner and in accordance with this LGIA. The
Participating TO at the Interconnection Customer's expense shall cause the
Participating TO's Interconnection Facilities to be operated, maintained and
controlled in a safe and reliable manner and in accordance with this LGIA. The
ISO and Participating TO may provide operating instructions to the
Interconnection Customer consistent with this LGIA and Participating TO and
ISO operating protocols and procedures as they may change from time to time.
The Participating TO and ISO will consider changes to their operating protocols
and procedures proposed by the Interconnection Customer.
9.4 Interconnection Customer Obligations. The Interconnection Customer shall
at its own expense operate, maintain and control the Large Generating Facility
and the Interconnection Customer's Interconnection Facilities in a safe and
reliable manner and in accordance with this LGIA. The Interconnection
Customer shall operate the Large Generating Facility and the Interconnection
Customer's Interconnection Facilities in accordance with all applicable
requirements of the Control Area of which it is part, including such requirements
as set forth in Appendix C, Interconnection Details, of this LGIA. Appendix C,
Interconnection Details, will be modified to reflect changes to the requirements
as they may change from time to time. A Party may request that another Party
provide copies of the requirements set forth in Appendix C, Interconnection
Details, of this LGIA. The Interconnection Customer shall not commence
Commercial Operation of an Electric Generating Unit with the Participating TO's
Transmission System until the Participating TO provides prior written approval,
which approval shall not be unreasonably withheld, for operation of such Electric
Generating Unit.
33
9.5 Start-Up and Synchronization. Consistent with the Parties' mutually
acceptable procedures, the Interconnection Customer is responsible for the
proper synchronization of each Electric Generating Unit to the ISO Controlled
Grid.
9.6 Reactive Power.
9.6.1 Power Factor Design Criteria. The Interconnection Customer shall
design the Large Generating Facility to maintain a composite power
delivery at continuous rated power output at the terminals of the Electric
Generating Unit at a power factor within the range of 0.95 leading to 0.90
lagging, unless the ISO has established different requirements that apply
to all generators in the Control Area on a comparable basis. Power factor
design criteria for wind generators are provided in Appendix H of this
LGIA.
9.6.2 Voltage Schedules. Once the Interconnection Customer has
synchronized an Electric Generating Unit with the ISO Controlled Grid, the
ISO or Participating TO shall require the Interconnection Customer to
maintain a voltage schedule by operating the Electric Generating Unit to
produce or absorb reactive power within the design limitations of the
Electric Generating Unit set forth in Article 9.6.1 (Power Factor Design
Criteria). ISO's voltage schedules shall treat all sources of reactive power
in the Control Area in an equitable and not unduly discriminatory manner.
The Participating TO shall exercise Reasonable Efforts to provide the
Interconnection Customer with such schedules at least one (1) day in
advance, and the ISO or Participating TO may make changes to such
schedules as necessary to maintain the reliability of the ISO Controlled
Grid or the Participating TO's electric system. The Interconnection
Customer shall operate the Electric Generating Unit to maintain the
specified output voltage or power factor within the design limitations of the
Electric Generating Unit set forth in Article 9.6.1 (Power Factor Design
Criteria), and as may be required by the ISO to operate the Electric
Generating Unit at a specific voltage schedule within the design limitations
set forth in Article 9.6.1. If the Interconnection Customer is unable to
maintain the specified voltage or power factor, it shall promptly notify the
ISO and the Participating TO.
9.6.2.1 Governors and Regulators. Whenever an Electric
Generating Unit is operated in parallel with the ISO
Controlled Grid and the speed governors (if installed on the
Electric Generating Unit pursuant to Good Utility Practice)
and voltage regulators are capable of operation, the
Interconnection Customer shall operate the Electric
Generating Unit with its speed governors and voltage
regulators in automatic operation. If the Electric Generating
Unit's speed governors and voltage regulators are not
34
capable of such automatic operation, the Interconnection
Customer shall immediately notify the ISO and the
Participating TO and ensure that the Electric Generating Unit
operates as specified in Article 9.6.2 through manual
operation and that such Electric Generating Unit's reactive
power production or absorption (measured in MVARs) are
within the design capability of the Electric Generating Unit(s)
and steady state stability limits. The Interconnection
Customer shall restore the speed governors and voltage
regulators to automatic operation as soon as possible and in
accordance with the Reliability Management System
Agreement in Appendix G. If the Large Generating Facility's
speed governors and voltage regulators are improperly
tuned or malfunctioning, the ISO shall have the right to order
the reduction in output or disconnection of the Large
Generating Facility if the reliability of the ISO Controlled Grid
would be adversely affected. The Interconnection Customer
shall not cause its Large Generating Facility to disconnect
automatically or instantaneously from the ISO Controlled
Grid or trip any Electric Generating Unit comprising the
Large Generating Facility for an under or over frequency
condition unless the abnormal frequency condition persists
for a time period beyond the limits set forth in ANSI/IEEE
Standard C37.106, or such other standard as applied to
other generators in the Control Area on a comparable basis.
9.6.3 Payment for Reactive Power. ISO is required to pay the Interconnection
Customer for reactive power that Interconnection Customer provides or
absorbs from an Electric Generating Unit when the ISO requests the
Interconnection Customer to operate its Electric Generating Unit outside
the range specified in Article 9.6.1, provided that if the ISO pays other
generators for reactive power service within the specified range, it must
also pay the Interconnection Customer. Payments shall be pursuant to
Article 11.6 or such other agreement to which the ISO and Interconnection
Customer have otherwise agreed.
9.7 Outages and Interruptions.
9.7.1 Outages.
9.7.1.1 Outage Authority and Coordination. Each Party may in
accordance with Good Utility Practice in coordination with
the other Parties remove from service any of its respective
Interconnection Facilities or Network Upgrades that may
impact another Party's facilities as necessary to perform
maintenance or testing or to install or replace equipment.
Absent an Emergency Condition, the Party scheduling a
35
removal of such facility(ies) from service will use
Reasonable Efforts to schedule such removal on a date and
time mutually acceptable to all Parties. In all circumstances
any Party planning to remove such facility(ies) from service
shall use Reasonable Efforts to minimize the effect on the
other Parties of such removal.
9.7.1.2 Outage Schedules. The ISO shall post scheduled outages
of ISO Controlled Grid facilities in accordance with the
provisions of the ISO Tariff. The Interconnection Customer
shall submit its planned maintenance schedules for the
Large Generating Facility to the ISO in accordance with the
ISO Tariff. The Interconnection Customer shall update its
planned maintenance schedules in accordance with the ISO
Tariff. The ISO may request the Interconnection Customer
to reschedule its maintenance as necessary to maintain the
reliability of the ISO Controlled Grid in accordance with the
ISO Tariff. Such planned maintenance schedules and
updates and changes to such schedules shall be provided
by the Interconnection Customer to the Participating TO
concurrently with their submittal to the ISO. The ISO shall
compensate the Interconnection Customer for any additional
direct costs that the Interconnection Customer incurs as a
result of having to reschedule maintenance in accordance
with the ISO Tariff. The Interconnection Customer will not
be eligible to receive compensation, if during the twelve (12)
months prior to the date of the scheduled maintenance, the
Interconnection Customer had modified its schedule of
maintenance activities.
9.7.1.3 Outage Restoration. If an outage on a Party's
Interconnection Facilities or Network Upgrades adversely
affects another Party's operations or facilities, the Party that
owns or controls the facility that is out of service shall use
Reasonable Efforts to promptly restore such facility(ies) to a
normal operating condition consistent with the nature of the
outage. The Party that owns or controls the facility that is
out of service shall provide the other Parties, to the extent
such information is known, information on the nature of the
Emergency Condition, if the outage is caused by an
Emergency Condition, an estimated time of restoration, and
any corrective actions required. Initial verbal notice shall be
followed up as soon as practicable with written notice
explaining the nature of the outage, if requested by a Party,
which may be provided by e-mail or facsimile.
9.7.2 Interruption of Service. If required by Good Utility Practice to do so, the
ISO or the Participating TO may require the Interconnection Customer to
interrupt or reduce deliveries of electricity if such delivery of electricity
could adversely affect the ISO's or the Participating TO's ability to perform
such activities as are necessary to safely and reliably operate and
maintain the Participating TO's electric system or the ISO Controlled Grid.
The following provisions shall apply to any interruption or reduction
permitted under this Article 9.7.2:
9.7.2.1 The interruption or reduction shall continue only for so long
as reasonably necessary under Good Utility Practice;
9.7.2.2 Any such interruption or reduction shall be made on an
equitable, non-discriminatory basis with respect to all
generating facilities directly connected to the ISO Controlled
Grid, subject to any conditions specified in this LGIA;
9.7.2.3 When the interruption or reduction must be made under
circumstances which do not allow for advance notice, the
ISO or Participating TO, as applicable, shall notify the
Interconnection Customer by telephone as soon as
practicable of the reasons for the curtailment, interruption, or
reduction, and, if known, its expected duration. Telephone
notification shall be followed by written notification, if
requested by the Interconnection Customer, as soon as
practicable;
9.7.2.4 Except during the existence of an Emergency Condition, the
ISO or Participating TO shall notify the Interconnection
Customer in advance regarding the timing of such
interruption or reduction and further notify the
Interconnection Customer of the expected duration. The
ISO or Participating TO shall coordinate with the
Interconnection Customer using Good Utility Practice to
schedule the interruption or reduction during periods of least
impact to the Interconnection Customer, the ISO, and the
Participating TO;
9.7.2.5 The Parties shall cooperate and coordinate with each other
to the extent necessary in order to restore the Large
Generating Facility, Interconnection Facilities, the
Participating TO's Transmission System, and the ISO
Controlled Grid to their normal operating state, consistent
with system conditions and Good Utility Practice.
37
9.7.3 Under-Frequency and Over Frequency Conditions. The ISO
Controlled Grid is designed to automatically activate a load-shed program
as required by the Applicable Reliability Council in the event of an underfrequency system disturbance. The Interconnection Customer shall
implement under-frequency and over-frequency protection set points for
the Large Generating Facility as required by the Applicable Reliability
Council to ensure "ride through" capability. Large Generating Facility
response to frequency deviations of pre-determined magnitudes, both
under-frequency and over-frequency deviations, shall be studied and
coordinated with the Participating TO and ISO in accordance with Good
Utility Practice. The term "ride through" as used herein shall mean the
ability of a Generating Facility to stay connected to and synchronized with
the ISO Controlled Grid during system disturbances within a range of
under-frequency and over-frequency conditions, in accordance with Good
Utility Practice.
9.7.4 System Protection and Other Control Requirements.
9.7.4.1 System Protection Facilities. The Interconnection
Customer shall, at its expense, install, operate and maintain
System Protection Facilities as a part of the Large
Generating Facility or the Interconnection Customer's
Interconnection Facilities. The Participating TO shall install
at the Interconnection Customer's expense any System
Protection Facilities that may be required on the
Participating TO's Interconnection Facilities or the
Participating TO's Transmission System as a result of the
interconnection of the Large Generating Facility and the
Interconnection Customer's Interconnection Facilities.
9.7.4.2 The Participating TO's and Interconnection Customer's
protection facilities shall be designed and coordinated with
other systems in accordance with Applicable Reliability
Council criteria and Good Utility Practice.
9.7.4.3 The Participating TO and Interconnection Customer shall
each be responsible for protection of its facilities consistent
with Good Utility Practice.
9.7.4.4 The Participating TO's and Interconnection Customer's
protective relay design shall incorporate the necessary test
switches to perform the tests required in Article 6. The
required test switches will be placed such that they allow
operation of lockout relays while preventing breaker failure
schemes from operating and causing unnecessary breaker
operations and/or the tripping of the Interconnection
Customer's Electric Generating Units.
38
9.7.4.5 The Participating TO and Interconnection Customer will test,
operate and maintain System Protection Facilities in
accordance with Good Utility Practice and, if applicable, the
requirements of the Participating TO's Interconnection
Handbook.
9.7.4.6 Prior to the in-service date, and again prior to the
Commercial Operation Date, the Participating TO and
Interconnection Customer or their agents shall perform a
complete calibration test and functional trip test of the
System Protection Facilities. At intervals suggested by
Good Utility Practice, the standards and procedures of the
Participating TO, including, if applicable, the requirements of
the Participating TO's Interconnection Handbook, and
following any apparent malfunction of the System Protection
Facilities, each Party shall perform both calibration and
functional trip tests of its System Protection Facilities.
These tests do not require the tripping of any in-service
generation unit. These tests do, however, require that all
protective relays and lockout contacts be activated.
9.7.5 Requirements for Protection. In compliance with Good Utility Practice
and, if applicable, the requirements of the Participating TO's
Interconnection Handbook, the Interconnection Customer shall provide,
install, own, and maintain relays, circuit breakers and all other devices
necessary to remove any fault contribution of the Large Generating
Facility to any short circuit occurring on the Participating TO's
Transmission System not otherwise isolated by the Participating TO's
equipment, such that the removal of the fault contribution shall be
coordinated with the protective requirements of the Participating TO's
Transmission System. Such protective equipment shall include, without
limitation, a disconnecting device with fault current-interrupting capability
located between the Large Generating Facility and the Participating TO's
Transmission System at a site selected upon mutual agreement (not to be
unreasonably withheld, conditioned or delayed) of the Parties. The
Interconnection Customer shall be responsible for protection of the Large
Generating Facility and the Interconnection Customer's other equipment
from such conditions as negative sequence currents, over- or underfrequency, sudden load rejection, over- or under-voltage, and generator
loss-of-field. The Interconnection Customer shall be solely responsible to
disconnect the Large Generating Facility and the Interconnection
Customer's other equipment if conditions on the ISO Controlled Grid could
adversely affect the Large Generating Facility.
39
9.7.6 Power Quality. Neither the Participating TO's nor the Interconnection
Customer's facilities shall cause excessive voltage flicker nor introduce
excessive distortion to the sinusoidal voltage or current waves as defined
by ANSI Standard C84.1-1989, in accordance with IEEE Standard 519,
any applicable superseding electric industry standard, or any alternative
Applicable Reliability Council standard. In the event of a conflict between
ANSI Standard C84.1-1989, any applicable superseding electric industry
standard, or any alternative Applicable Reliability Council standard, the
alternative Applicable Reliability Council standard shall control.
9.8 Switching and Tagging Rules. Each Party shall provide the other Parties a
copy of its switching and tagging rules that are applicable to the other Parties'
activities. Such switching and tagging rules shall be developed on a nondiscriminatory basis. The Parties shall comply with applicable switching and
tagging rules, as amended from time to time, in obtaining clearances for work or
for switching operations on equipment.
9.9 Use of Interconnection Facilities by Third Parties.
9.9.1 Purpose of Interconnection Facilities. Except as may be required by
Applicable Laws and Regulations, or as otherwise agreed to among the
Parties, the Interconnection Facilities shall be constructed for the sole
purpose of interconnecting the Large Generating Facility to the
Participating TO's Transmission System and shall be used for no other
purpose.
9.9.2 Third Party Users. If required by Applicable Laws and Regulations or if
the Parties mutually agree, such agreement not to be unreasonably
withheld, to allow one or more third parties to use the Participating TO's
Interconnection Facilities, or any part thereof, the Interconnection
Customer will be entitled to compensation for the capital expenses it
incurred in connection with the Interconnection Facilities based upon the
pro rata use of the Interconnection Facilities by the Participating TO, all
third party users, and the Interconnection Customer, in accordance with
Applicable Laws and Regulations or upon some other mutually-agreed
upon methodology. In addition, cost responsibility for ongoing costs,
including operation and maintenance costs associated with the
Interconnection Facilities, will be allocated between the Interconnection
Customer and any third party users based upon the pro rata use of the
Interconnection Facilities by the Participating TO, all third party users, and
the Interconnection Customer, in accordance with Applicable Laws and
Regulations or upon some other mutually agreed upon methodology. If
the issue of such compensation or allocation cannot be resolved through
such negotiations, it shall be submitted to FERC for resolution.
40
9.10 Disturbance Analysis Data Exchange. The Parties will cooperate with one
another in the analysis of disturbances to either the Large Generating Facility or
the ISO Controlled Grid by gathering and providing access to any information
relating to any disturbance, including information from oscillography, protective
relay targets, breaker operations and sequence of events records, and any
disturbance information required by Good Utility Practice.
ARTICLE 10. MAINTENANCE
10.1 Participating TO Obligations. The Participating TO shall maintain the
Participating TO's Transmission System and the Participating TO's
Interconnection Facilities in a safe and reliable manner and in accordance with
this LGIA.
10.2 Interconnection Customer Obligations. The Interconnection Customer shall
maintain the Large Generating Facility and the Interconnection Customer's
Interconnection Facilities in a safe and reliable manner and in accordance with
this LGIA.
10.3 Coordination. The Parties shall confer regularly to coordinate the planning,
scheduling and performance of preventive and corrective maintenance on the
Large Generating Facility and the Interconnection Facilities.
10.4 Secondary Systems. The Participating TO and Interconnection Customer shall
cooperate with the other Parties in the inspection, maintenance, and testing of
control or power circuits that operate below 600 volts, AC or DC, including, but
not limited to, any hardware, control or protective devices, cables, conductors,
electric raceways, secondary equipment panels, transducers, batteries, chargers,
and voltage and current transformers that directly affect the operation of a
Party's facilities and equipment which may reasonably be expected to impact the
other Parties. Each Party shall provide advance notice to the other Parties
before undertaking any work on such circuits, especially on electrical circuits
involving circuit breaker trip and close contacts, current transformers, or potential
transformers.
10.5 Operating and Maintenance Expenses. Subject to the provisions herein
addressing the use of facilities by others, and except for operations and
maintenance expenses associated with modifications made for providing
interconnection or transmission service to a third party and such third party pays
for such expenses, the Interconnection Customer shall be responsible for all
reasonable expenses including overheads, associated with: (1) owning,
operating, maintaining, repairing, and replacing the Interconnection Customer's
Interconnection Facilities; and (2) operation, maintenance, repair and
replacement of the Participating TO's Interconnection Facilities.
41
ARTICLE 11. PERFORMANCE OBLIGATION
11.1 Interconnection Customer's Interconnection Facilities. The Interconnection
Customer shall design, procure, construct, install, own and/or control the
Interconnection Customer's Interconnection Facilities described in Appendix A at
its sole expense.
11.2 Participating TO's Interconnection Facilities. The Participating TO shall
design, procure, construct, install, own and/or control the Participating TO's
Interconnection Facilities described in Appendix A at the sole expense of the
Interconnection Customer. Unless the Participating TO elects to fund the capital
for the Participating TO's Interconnection Facilities, they shall be solely funded
by the Interconnection Customer.
11.3 Network Upgrades and Distribution Upgrades. The Participating TO shall
design, procure, construct, install, and own the Network Upgrades and
Distribution Upgrades described in Appendix A. The Interconnection Customer
shall be responsible for all costs related to Distribution Upgrades. Unless the
Participating TO elects to fund the capital for the Distribution Upgrades and
Network Upgrades, they shall be solely funded by the Interconnection Customer.
11.4 Transmission Credits. No later than thirty (30) days prior to the Commercial
Operation Date, the Interconnection Customer may make a one-time election by
written notice to the ISO and the Participating TO to receive Firm Transmission
Rights as defined in and as available under the ISO Tariff at the time of the
election in accordance with the ISO Tariff, in lieu of a refund of the cost of
Network Upgrades in accordance with Article 11.4.1.
11.4.1 Repayment of Amounts Advanced for Network Upgrades. Upon the
Commercial Operation Date, the Interconnection Customer shall be
entitled to a repayment, equal to the total amount paid to the Participating
TO for the cost of Network Upgrades. Such amount shall include any tax
gross-up or other tax-related payments associated with Network Upgrades
not refunded to the Interconnection Customer pursuant to Article 5.17.8 or
otherwise, and shall be paid to the Interconnection Customer by the
Participating TO on a dollar-for-dollar basis either through (1) direct
payments made on a levelized basis over the five-year period
commencing on the Commercial Operation Date; or (2) any alternative
payment schedule that is mutually agreeable to the Interconnection
Customer and Participating TO, provided that such amount is paid within
five (5) years from the Commercial Operation Date. Notwithstanding the
foregoing, if this LGIA terminates within five (5) years from the
Commercial Operation Date, the Participating TO's obligation to pay
refunds to the Interconnection Customer shall cease as of the date of
termination. Any repayment shall include interest calculated in
accordance with the methodology set forth in FERC's regulations at 18
C.F.R. §35.19a(a)(2)(iii) from the date of any payment for Network
42
Upgrades through the date on which the Interconnection Customer
receives a repayment of such payment. Interest shall continue to accrue
on the repayment obligation so long as this LGIA is in effect. The
Interconnection Customer may assign such repayment rights to any
person.
If the Large Generating Facility fails to achieve commercial operation, but
it or another Generating Facility is later constructed and makes use of the
Network Upgrades, the Participating TO shall at that time reimburse
Interconnection Customer for the amounts advanced for the Network
Upgrades. Before any such reimbursement can occur, the
Interconnection Customer, or the entity that ultimately constructs the
Generating Facility, if different, is responsible for identifying the entity to
which reimbursement must be made.
11.4.2 Special Provisions for Affected Systems. The Interconnection
Customer shall enter into an agreement with the owner of the Affected
System and/or other affected owners of portions of the ISO Controlled
Grid, as applicable, in accordance with the LGIP. Such agreement shall
specify the terms governing payments to be made by the Interconnection
Customer to the owner of the Affected System and/or other affected
owners of portions of the ISO Controlled Grid as well as the repayment by
the owner of the Affected System and/or other affected owners of portions
of the ISO Controlled Grid. In no event shall the Participating TO be
responsible for the repayment for any facilities that are not part of the
Participating TO's Transmission System.
11.4.3 Notwithstanding any other provision of this LGIA, nothing herein shall be
construed as relinquishing or foreclosing any rights, including but not
limited to firm transmission rights, capacity rights, transmission congestion
rights, or transmission credits, that the Interconnection Customer shall be
entitled to, now or in the future under any other agreement or tariff as a
result of, or otherwise associated with, the transmission capacity, if any,
created by the Network Upgrades, including the right to obtain cash
reimbursements or transmission credits for transmission service that is not
associated with the Large Generating Facility.
11.5 Provision of Security. At least thirty (30) Calendar Days prior to the
commencement of the procurement, installation, or construction of a discrete
portion of a Participating TO's Interconnection Facilities, Network Upgrades, or
Distribution Upgrades, the Interconnection Customer shall provide the
Participating TO, at the Interconnection Customer's option, a guarantee, a surety
bond, letter of credit or other form of security that is reasonably acceptable to the
Participating TO and is consistent with the Uniform Commercial Code of the
jurisdiction identified in Article 14.2.1. Such security for payment shall be in an
amount sufficient to cover the costs for constructing, procuring and installing the
applicable portion of the Participating TO's Interconnection Facilities, Network
43
Upgrades, or Distribution Upgrades. Such security shall be reduced on a dollarfor-dollar basis for payments made to the Participating TO for these purposes.
In addition:
11.5.1 The guarantee must be made by an entity that meets the creditworthiness
requirements of the Participating TO, and contain terms and conditions
that guarantee payment of any amount that may be due from the
Interconnection Customer, up to an agreed-to maximum amount.
11.5.2 The letter of credit must be issued by a financial institution reasonably
acceptable to the Participating TO and must specify a reasonable
expiration date.
11.5.3 The surety bond must be issued by an insurer reasonably acceptable to
the Participating TO and must specify a reasonable expiration date.
11.6 Interconnection Customer Compensation. If the ISO requests or directs the
Interconnection Customer to provide a service pursuant to Articles 9.6.3
(Payment for Reactive Power) or 13.5.1 of this LGIA, the ISO shall compensate
the Interconnection Customer in accordance with the ISO Tariff.
11.6.1 Interconnection Customer Compensation for Actions During
Emergency Condition. The ISO shall compensate the Interconnection
Customer in accordance with the ISO Tariff for its provision of real and
reactive power and other Emergency Condition services that the
Interconnection Customer provides to support the ISO Controlled Grid
during an Emergency Condition in accordance with Article 11.6.
ARTICLE 12. INVOICE
12.1 General. The Participating TO shall submit to the Interconnection Customer, on
a monthly basis, invoices of amounts due pursuant to this LGIA for the preceding
month. Each invoice shall state the month to which the invoice applies and fully
describe the services and equipment provided. The Parties may discharge
mutual debts and payment obligations due and owing to each other on the same
date through netting, in which case all amounts a Party owes to the other Party
under this LGIA, including interest payments or credits, shall be netted so that
only the net amount remaining due shall be paid by the owing Party.
Notwithstanding the foregoing, any invoices between the ISO and another Party
shall be submitted and paid in accordance with the ISO Tariff.
12.2 Final Invoice. As soon as reasonably practicable, but within twelve months after
completion of the construction of the Participating TO's Interconnection Facilities,
Network Upgrades, and Distribution Upgrades, the Participating TO shall provide
an invoice of the final cost of the construction of the Participating TO's
44
Interconnection Facilities, Network Upgrades, and Distribution Upgrades, and
shall set forth such costs in sufficient detail to enable the Interconnection
Customer to compare the actual costs with the estimates and to ascertain
deviations, if any, from the cost estimates. The Participating TO shall refund to
the Interconnection Customer any amount by which the actual payment by the
Interconnection Customer for estimated costs exceeds the actual costs of
construction within thirty (30) Calendar Days of the issuance of such final
construction invoice; or, in the event the actual costs of construction exceed the
Interconnection Customer's actual payment for estimated costs, then the
Interconnection Customer shall pay to the Participating TO any amount by which
the actual costs of construction exceed the actual payment by the
Interconnection Customer for estimated costs within thirty (30) Calendar Days of
the issuance of such final construction invoice.
12.3 Payment. Invoices shall be rendered to the Interconnection Customer at the
address specified in Appendix F. The Interconnection Customer shall pay, or
Participating TO shall refund, the amounts due within thirty (30) Calendar Days
of the Interconnection Customer's receipt of the invoice. All payments shall be
made in immediately available funds payable to the Interconnection Customer or
Participating TO, or by wire transfer to a bank named and account designated by
the invoicing Interconnection Customer or Participating TO. Payment of invoices
by any Party will not constitute a waiver of any rights or claims any Party may
have under this LGIA.
12.4 Disputes. In the event of a billing dispute between the Interconnection
Customer and the Participating TO, the Participating TO and the ISO shall
continue to provide Interconnection Service under this LGIA as long as the
Interconnection Customer: (i) continues to make all payments not in dispute; and
(ii) pays to the Participating TO or into an independent escrow account the
portion of the invoice in dispute, pending resolution of such dispute. If the
Interconnection Customer fails to meet these two requirements for continuation
of service, then the Participating TO may provide notice to the Interconnection
Customer of a Default pursuant to Article 17. Within thirty (30) Calendar Days
after the resolution of the dispute, the Party that owes money to the other Party
shall pay the amount due with interest calculated in accordance with the
methodology set forth in FERC's Regulations at 18 C.F.R. § 35.19a(a)(2)(iii).
Notwithstanding the foregoing, any billing dispute between the ISO and another
Party shall be resolved in accordance with the provisions of Article 27 of this
LGIA.
ARTICLE 13. EMERGENCIES
13.1 [Reserved]
45
13.2 Obligations. Each Party shall comply with the Emergency Condition procedures
of the ISO, NERC, the Applicable Reliability Council, Applicable Laws and
Regulations, and any emergency procedures set forth in this LGIA.
13.3 Notice. The Participating TO or the ISO shall notify the Interconnection
Customer promptly when it becomes aware of an Emergency Condition that
affects the Participating TO's Interconnection Facilities or Distribution System or
the ISO Controlled Grid, respectively, that may reasonably be expected to affect
the Interconnection Customer's operation of the Large Generating Facility or the
Interconnection Customer's Interconnection Facilities. The Interconnection
Customer shall notify the Participating TO and the ISO promptly when it
becomes aware of an Emergency Condition that affects the Large Generating
Facility or the Interconnection Customer's Interconnection Facilities that may
reasonably be expected to affect the ISO Controlled Grid or the Participating
TO's Interconnection Facilities. To the extent information is known, the
notification shall describe the Emergency Condition, the extent of the damage or
deficiency, the expected effect on the operation of the Interconnection
Customer's or Participating TO's facilities and operations, its anticipated duration
and the corrective action taken and/or to be taken. The initial notice shall be
followed as soon as practicable with written notice, if requested by a Party, which
may be provided by electronic mail or facsimile, or in the case of the ISO may be
publicly posted on the ISO's internet web site.
13.4 Immediate Action. Unless, in the Interconnection Customer's reasonable
judgment, immediate action is required, the Interconnection Customer shall
obtain the consent of the ISO and the Participating TO, such consent to not be
unreasonably withheld, prior to performing any manual switching operations at
the Large Generating Facility or the Interconnection Customer's Interconnection
Facilities in response to an Emergency Condition declared by the Participating
TO or ISO or in response to any other emergency condition.
13.5 ISO and Participating TO Authority.
13.5.1 General. The ISO and Participating TO may take whatever actions or
inactions, including issuance of dispatch instructions, with regard to the
ISO Controlled Grid or the Participating TO's Interconnection Facilities or
Distribution System they deem necessary during an Emergency Condition
in order to (i) preserve public health and safety, (ii) preserve the reliability
of the ISO Controlled Grid or the Participating TO's Interconnection
Facilities or Distribution System, and (iii) limit or prevent damage, and
(iv) expedite restoration of service.
The Participating TO and the ISO shall use Reasonable Efforts to
minimize the effect of such actions or inactions on the Large Generating
Facility or the Interconnection Customer's Interconnection Facilities. The
Participating TO or the ISO may, on the basis of technical considerations,
require the Large Generating Facility to mitigate an Emergency Condition
46
by taking actions necessary and limited in scope to remedy the
Emergency Condition, including, but not limited to, directing the
Interconnection Customer to shut-down, start-up, increase or decrease
the real or reactive power output of the Large Generating Facility;
implementing a reduction or disconnection pursuant to Article 13.5.2;
directing the Interconnection Customer to assist with black start (if
available) or restoration efforts; or altering the outage schedules of the
Large Generating Facility and the Interconnection Customer's
Interconnection Facilities. Interconnection Customer shall comply with all
of the ISO's and Participating TO's operating instructions concerning
Large Generating Facility real power and reactive power output within the
manufacturer's design limitations of the Large Generating Facility's
equipment that is in service and physically available for operation at the
time, in compliance with Applicable Laws and Regulations.
13.5.2 Reduction and Disconnection. The Participating TO or the ISO may
reduce Interconnection Service or disconnect the Large Generating
Facility or the Interconnection Customer's Interconnection Facilities when
such reduction or disconnection is necessary under Good Utility Practice
due to Emergency Conditions. These rights are separate and distinct
from any right of curtailment of the ISO pursuant to the ISO Tariff. When
the ISO or Participating TO can schedule the reduction or disconnection in
advance, the ISO or Participating TO shall notify the Interconnection
Customer of the reasons, timing and expected duration of the reduction or
disconnection. The ISO or Participating TO shall coordinate with the
Interconnection Customer using Good Utility Practice to schedule the
reduction or disconnection during periods of least impact to the
Interconnection Customer and the ISO and Participating TO. Any
reduction or disconnection shall continue only for so long as reasonably
necessary under Good Utility Practice. The Parties shall cooperate with
each other to restore the Large Generating Facility, the Interconnection
Facilities, and the ISO Controlled Grid to their normal operating state as
soon as practicable consistent with Good Utility Practice.
13.6 Interconnection Customer Authority. Consistent with Good Utility Practice,
this LGIA, and the ISO Tariff, the Interconnection Customer may take actions or
inactions with regard to the Large Generating Facility or the Interconnection
Customer's Interconnection Facilities during an Emergency Condition in order to
(i) preserve public health and safety, (ii) preserve the reliability of the Large
Generating Facility or the Interconnection Customer's Interconnection Facilities,
(iii) limit or prevent damage, and (iv) expedite restoration of service.
Interconnection Customer shall use Reasonable Efforts to minimize the effect of
such actions or inactions on the ISO Controlled Grid and the Participating TO's
Interconnection Facilities. The ISO and Participating TO shall use Reasonable
Efforts to assist Interconnection Customer in such actions.
47
13.7 Limited Liability. Except as otherwise provided in Article 11.6.1 of this LGIA, no
Party shall be liable to any other Party for any action it takes in responding to an
Emergency Condition so long as such action is made in good faith and is
consistent with Good Utility Practice.
ARTICLE 14. REGULATORY REQUIREMENTS AND GOVERNING LAW
14.1 Regulatory Requirements. Each Party's obligations under this LGIA shall be
subject to its receipt of any required approval or certificate from one or more
Governmental Authorities in the form and substance satisfactory to the applying
Party, or the Party making any required filings with, or providing notice to, such
Governmental Authorities, and the expiration of any time period associated
therewith. Each Party shall in good faith seek and use its Reasonable Efforts to
obtain such other approvals. Nothing in this LGIA shall require the
Interconnection Customer to take any action that could result in its inability to
obtain, or its loss of, status or exemption under the Federal Power Act or the
Public Utility Holding Company Act of 1935, as amended, or the Public Utility
Regulatory Policies Act of 1978.
14.2 Governing Law.
14.2.1 The validity, interpretation and performance of this LGIA and each of its
provisions shall be governed by the laws of the state where the Point of
Interconnection is located, without regard to its conflicts of law principles.
14.2.2 This LGIA is subject to all Applicable Laws and Regulations.
14.2.3 Each Party expressly reserves the right to seek changes in, appeal, or
otherwise contest any laws, orders, rules, or regulations of a
Governmental Authority.
ARTICLE 15. NOTICES
15.1 General. Unless otherwise provided in this LGIA, any notice, demand or request
required or permitted to be given by a Party to another and any instrument
required or permitted to be tendered or delivered by a Party in writing to another
shall be effective when delivered and may be so given, tendered or delivered, by
recognized national courier, or by depositing the same with the United States
Postal Service with postage prepaid, for delivery by certified or registered mail,
addressed to the Party, or personally delivered to the Party, at the address set
out in Appendix F, Addresses for Delivery of Notices and Billings.
A Party must update the information in Appendix F as information changes. A
Party may change the notice information in this LGIA by giving five (5) Business
48
Days written notice prior to the effective date of the change. Such changes shall
not constitute an amendment to this LGIA.
15.2 Billings and Payments. Billings and payments shall be sent to the addresses
set out in Appendix F.
15.3 Alternative Forms of Notice. Any notice or request required or permitted to be
given by a Party to another and not required by this LGIA to be given in writing
may be so given by telephone, facsimile or e-mail to the telephone numbers and
e-mail addresses set out in Appendix F.
15.4 Operations and Maintenance Notice. Each Party shall notify the other Parties
in writing of the identity of the person(s) that it designates as the point(s) of
contact with respect to the implementation of Articles 9 and 10.
ARTICLE 16. FORCE MAJEURE
16.1 Force Majeure.
16.1.1 Economic hardship is not considered a Force Majeure event.
16.1.2 No Party shall be considered to be in Default with respect to any
obligation hereunder, (including obligations under Article 4), other than the
obligation to pay money when due, if prevented from fulfilling such
obligation by Force Majeure. A Party unable to fulfill any obligation
hereunder (other than an obligation to pay money when due) by reason of
Force Majeure shall give notice and the full particulars of such Force
Majeure to the other Party in writing or by telephone as soon as
reasonably possible after the occurrence of the cause relied upon.
Telephone notices given pursuant to this Article shall be confirmed in
writing as soon as reasonably possible and shall specifically state full
particulars of the Force Majeure, the time and date when the Force
Majeure occurred and when the Force Majeure is reasonably expected to
cease. The Party affected shall exercise due diligence to remove such
disability with reasonable dispatch, but shall not be required to accede or
agree to any provision not satisfactory to it in order to settle and terminate
a strike or other labor disturbance.
49
ARTICLE 17. DEFAULT
17.1 Default
17.1.1 General. No Default shall exist where such failure to discharge an
obligation (other than the payment of money) is the result of Force
Majeure as defined in this LGIA or the result of an act or omission of the
other Party. Upon a Breach, the affected non-Breaching Party(ies) shall
give written notice of such Breach to the Breaching Party. Except as
provided in Article 17.1.2, the Breaching Party shall have thirty (30)
Calendar Days from receipt of the Default notice within which to cure such
Breach; provided however, if such Breach is not capable of cure within
thirty (30) Calendar Days, the Breaching Party shall commence such cure
within thirty (30) Calendar Days after notice and continuously and
diligently complete such cure within ninety (90) Calendar Days from
receipt of the Default notice; and, if cured within such time, the Breach
specified in such notice shall cease to exist.
17.1.2 Right to Terminate. If a Breach is not cured as provided in this Article, or
if a Breach is not capable of being cured within the period provided for
herein, the affected non-Breaching Party(ies) shall have the right to
declare a Default and terminate this LGIA by written notice at any time
until cure occurs, and be relieved of any further obligation hereunder and,
whether or not such Party(ies) terminates this LGIA, to recover from the
Breaching Party all amounts due hereunder, plus all other damages and
remedies to which it is entitled at law or in equity. The provisions of this
Article will survive termination of this LGIA.
ARTICLE 18. INDEMNITY, CONSEQUENTIAL DAMAGES AND INSURANCE
18.1 Indemnity. Each Party shall at all times indemnify, defend, and hold the other
Parties harmless from, any and all Losses arising out of or resulting from another
Party's action or inactions of its obligations under this LGIA on behalf of the
indemnifying Party, except in cases of gross negligence or intentional
wrongdoing by the Indemnified Party.
18.1.1 Indemnified Party. If an Indemnified Party is entitled to indemnification
under this Article 18 as a result of a claim by a third party, and the
Indemnifying Party fails, after notice and reasonable opportunity to
proceed under Article 18.1, to assume the defense of such claim, such
Indemnified Party may at the expense of the Indemnifying Party contest,
settle or consent to the entry of any judgment with respect to, or pay in
full, such claim.
18.1.2 Indemnifying Party. If an Indemnifying Party is obligated to indemnify
and hold any Indemnified Party harmless under this Article 18, the amount
50
owing to the Indemnified Party shall be the amount of such Indemnified
Party's actual Loss, net of any insurance or other recovery.
18.1.3 Indemnity Procedures. Promptly after receipt by an Indemnified Party of
any claim or notice of the commencement of any action or administrative
or legal proceeding or investigation as to which the indemnity provided for
in Article 18.1 may apply, the Indemnified Party shall notify the
Indemnifying Party of such fact. Any failure of or delay in such notification
shall not affect a Party's indemnification obligation unless such failure or
delay is materially prejudicial to the indemnifying Party.
The Indemnifying Party shall have the right to assume the defense thereof
with counsel designated by such Indemnifying Party and reasonably
satisfactory to the Indemnified Party. If the defendants in any such action
include one or more Indemnified Parties and the Indemnifying Party and if
the Indemnified Party reasonably concludes that there may be legal
defenses available to it and/or other Indemnified Parties which are
different from or additional to those available to the Indemnifying Party,
the Indemnified Party shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of
such action on its own behalf. In such instances, the Indemnifying Party
shall only be required to pay the fees and expenses of one additional
attorney to represent an Indemnified Party or Indemnified Parties having
such differing or additional legal defenses.
The Indemnified Party shall be entitled, at its expense, to participate in
any such action, suit or proceeding, the defense of which has been
assumed by the Indemnifying Party. Notwithstanding the foregoing, the
Indemnifying Party (i) shall not be entitled to assume and control the
defense of any such action, suit or proceedings if and to the extent that, in
the opinion of the Indemnified Party and its counsel, such action, suit or
proceeding involves the potential imposition of criminal liability on the
Indemnified Party, or there exists a conflict or adversity of interest
between the Indemnified Party and the Indemnifying Party, in such event
the Indemnifying Party shall pay the reasonable expenses of the
Indemnified Party, and (ii) shall not settle or consent to the entry of any
judgment in any action, suit or proceeding without the consent of the
Indemnified Party, which shall not be unreasonably withheld, conditioned
or delayed.
18.2 Consequential Damages. Other than the liquidated damages heretofore
described in Article 5.3, in no event shall any Party be liable under any provision
of this LGIA for any losses, damages, costs or expenses for any special, indirect,
incidental, consequential, or punitive damages, including but not limited to loss of
profit or revenue, loss of the use of equipment, cost of capital, cost of temporary
equipment or services, whether based in whole or in part in contract, in tort,
including negligence, strict liability, or any other theory of liability; provided,
51
however, that damages for which a Party may be liable to another Party under
another agreement will not be considered to be special, indirect, incidental, or
consequential damages hereunder.
18.3 Insurance. Each Party shall, at its own expense, maintain in force throughout
the period of this LGIA, and until released by the other Parties, the following
minimum insurance coverages, with insurers rated no less than A- (with a
minimum size rating of VII) by Bests' Insurance Guide and Key Ratings and
authorized to do business in the state where the Point of Interconnection is
located, except in the case of the ISO, the State of California:
18.3.1 Employer's Liability and Workers' Compensation Insurance providing
statutory benefits in accordance with the laws and regulations of the
state in which the Point of Interconnection is located, except in the case
of the ISO, the State of California.
18.3.2 Commercial General Liability Insurance including premises and
operations, personal injury, broad form property damage, broad form
blanket contractual liability coverage (including coverage for the
contractual indemnification) products and completed operations
coverage, coverage for explosion, collapse and underground hazards,
independent contractors coverage, coverage for pollution to the extent
normally available and punitive damages to the extent normally available
and a cross liability endorsement, with minimum limits of One Million
Dollars ($1,000,000) per occurrence/One Million Dollars ($1,000,000)
aggregate combined single limit for personal injury, bodily injury,
including death and property damage.
18.3.3 Business Automobile Liability Insurance for coverage of owned and nonowned and hired vehicles, trailers or semi-trailers designed for travel on
public roads, with a minimum, combined single limit of One Million
Dollars ($1,000,000) per occurrence for bodily injury, including death,
and property damage.
18.3.4 Excess Public Liability Insurance over and above the Employer's Liability
Commercial General Liability and Business Automobile Liability
Insurance coverage, with a minimum combined single limit of Twenty
Million Dollars ($20,000,000) per occurrence/Twenty Million Dollars
($20,000,000) aggregate.
18.3.5 The Commercial General Liability Insurance, Business Automobile
Insurance and Excess Public Liability Insurance policies shall name the
other Parties, their parents, associated and Affiliate companies and their
respective directors, officers, agents, servants and employees ("Other
Party Group") as additional insured. All policies shall contain provisions
whereby the insurers waive all rights of subrogation in accordance with
the provisions of this LGIA against the Other Party Group and provide
52
thirty (30) Calendar Days advance written notice to the Other Party
Group prior to anniversary date of cancellation or any material change in
coverage or condition.
18.3.6 The Commercial General Liability Insurance, Business Automobile
Liability Insurance and Excess Public Liability Insurance policies shall
contain provisions that specify that the policies are primary and shall
apply to such extent without consideration for other policies separately
carried and shall state that each insured is provided coverage as though
a separate policy had been issued to each, except the insurer's liability
shall not be increased beyond the amount for which the insurer would
have been liable had only one insured been covered. Each Party shall
be responsible for its respective deductibles or retentions.
18.3.7 The Commercial General Liability Insurance, Business Automobile
Liability Insurance and Excess Public Liability Insurance policies, if
written on a Claims First Made Basis, shall be maintained in full force
and effect for two (2) years after termination of this LGIA, which
coverage may be in the form of tail coverage or extended reporting
period coverage if agreed by the Parties.
18.3.8 The requirements contained herein as to the types and limits of all
insurance to be maintained by the Parties are not intended to and shall
not in any manner, limit or qualify the liabilities and obligations assumed
by the Parties under this LGIA.
18.3.9 Within ten (10) Calendar Days following execution of this LGIA, and as
soon as practicable after the end of each fiscal year or at the renewal of
the insurance policy and in any event within ninety (90) Calendar Days
thereafter, each Party shall provide certification of all insurance required
in this LGIA, executed by each insurer or by an authorized
representative of each insurer.
18.3.10 Notwithstanding the foregoing, each Party may self-insure to meet the
minimum insurance requirements of Articles 18.3.2 through 18.3.8 to the
extent it maintains a self-insurance program; provided that, such Party's
senior unsecured debt or issuer rating is BBB-, or better, as rated by
Standard & Poor's and that its self-insurance program meets the
minimum insurance requirements of Articles 18.3.2 through 18.3.8. For
any period of time that a Party's senior unsecured debt rating and issuer
rating are both unrated by Standard & Poor's or are both rated at less
than BBB- by Standard & Poor's, such Party shall comply with the
insurance requirements applicable to it under Articles 18.3.2 through
18.3.9. In the event that a Party is permitted to self-insure pursuant to
this Article 18.3.10, it shall notify the other Parties that it meets the
requirements to self-insure and that its self-insurance program meets
53
the minimum insurance requirements in a manner consistent with that
specified in Article 18.3.9.
18.3.11 The Parties agree to report to each other in writing as soon as practical
all accidents or occurrences resulting in injuries to any person, including
death, and any property damage arising out of this LGIA.
ARTICLE 19. ASSIGNMENT
19.1 Assignment. This LGIA may be assigned by a Party only with the written
consent of the other Parties; provided that a Party may assign this LGIA without
the consent of the other Parties to any Affiliate of the assigning Party with an
equal or greater credit rating and with the legal authority and operational ability to
satisfy the obligations of the assigning Party under this LGIA; and provided
further that the Interconnection Customer shall have the right to assign this LGIA,
without the consent of the ISO or Participating TO, for collateral security
purposes to aid in providing financing for the Large Generating Facility, provided
that the Interconnection Customer will promptly notify the ISO and Participating
TO of any such assignment. Any financing arrangement entered into by the
Interconnection Customer pursuant to this Article will provide that prior to or upon
the exercise of the secured party's, trustee's or mortgagee's assignment rights
pursuant to said arrangement, the secured creditor, the trustee or mortgagee will
notify the ISO and Participating TO of the date and particulars of any such
exercise of assignment right(s), including providing the ISO and Participating TO
with proof that it meets the requirements of Articles 11.5 and 18.3. Any
attempted assignment that violates this Article is void and ineffective. Any
assignment under this LGIA shall not relieve a Party of its obligations, nor shall a
Party's obligations be enlarged, in whole or in part, by reason thereof. Where
required, consent to assignment will not be unreasonably withheld, conditioned
or delayed.
ARTICLE 20. SEVERABILITY
20.1 Severability. If any provision in this LGIA is finally determined to be invalid, void
or unenforceable by any court or other Governmental Authority having
jurisdiction, such determination shall not invalidate, void or make unenforceable
any other provision, agreement or covenant of this LGIA; provided that if the
Interconnection Customer (or any third party, but only if such third party is not
acting at the direction of the Participating TO or ISO) seeks and obtains such a
final determination with respect to any provision of the Alternate Option (Article
5.1.2), or the Negotiated Option (Article 5.1.4), then none of the provisions of
Article 5.1.2 or 5.1.4 shall thereafter have any force or effect and the Parties'
rights and obligations shall be governed solely by the Standard Option (Article
5.1.1).
54
ARTICLE 21. COMPARABILITY
21.1 Comparability. The Parties will comply with all applicable comparability and
code of conduct laws, rules and regulations, as amended from time to time.
ARTICLE 22. CONFIDENTIALITY
22.1 Confidentiality. Confidential Information shall include, without limitation, all
information relating to a Party's technology, research and development, business
affairs, and pricing, and any information supplied by any of the Parties to the
other Parties prior to the execution of this LGIA.
Information is Confidential Information only if it is clearly designated or marked in
writing as confidential on the face of the document, or, if the information is
conveyed orally or by inspection, if the Party providing the information orally
informs the Parties receiving the information that the information is confidential.
If requested by any Party, the other Parties shall provide in writing, the basis for
asserting that the information referred to in this Article 22 warrants confidential
treatment, and the requesting Party may disclose such writing to the appropriate
Governmental Authority. Each Party shall be responsible for the costs
associated with affording confidential treatment to its information.
22.1.1 Term. During the term of this LGIA, and for a period of three (3) years
after the expiration or termination of this LGIA, except as otherwise
provided in this Article 22, each Party shall hold in confidence and shall
not disclose to any person Confidential Information.
22.1.2 Scope. Confidential Information shall not include information that the
receiving Party can demonstrate: (1) is generally available to the public
other than as a result of a disclosure by the receiving Party; (2) was in the
lawful possession of the receiving Party on a non-confidential basis before
receiving it from the disclosing Party; (3) was supplied to the receiving
Party without restriction by a third party, who, to the knowledge of the
receiving Party after due inquiry, was under no obligation to the disclosing
Party to keep such information confidential; (4) was independently
developed by the receiving Party without reference to Confidential
Information of the disclosing Party; (5) is, or becomes, publicly known,
through no wrongful act or omission of the receiving Party or Breach of
this LGIA; or (6) is required, in accordance with Article 22.1.7 of this LGIA,
Order of Disclosure, to be disclosed by any Governmental Authority or is
otherwise required to be disclosed by law or subpoena, or is necessary in
any legal proceeding establishing rights and obligations under this LGIA.
Information designated as Confidential Information will no longer be
55
deemed confidential if the Party that designated the information as
confidential notifies the other Parties that it no longer is confidential.
22.1.3 Release of Confidential Information. No Party shall release or disclose
Confidential Information to any other person, except to its employees,
consultants, Affiliates (limited by the Standards of Conduct requirements
set forth in Part 358 of FERC's Regulations, 18 C.F.R. 358),
subcontractors, or to parties who may be or considering providing
financing to or equity participation with the Interconnection Customer, or
to potential purchasers or assignees of the Interconnection Customer, on
a need-to-know basis in connection with this LGIA, unless such person
has first been advised of the confidentiality provisions of this Article 22
and has agreed to comply with such provisions. Notwithstanding the
foregoing, a Party providing Confidential Information to any person shall
remain primarily responsible for any release of Confidential Information in
contravention of this Article 22.
22.1.4 Rights. Each Party retains all rights, title, and interest in the Confidential
Information that each Party discloses to the other Parties. The disclosure
by each Party to the other Parties of Confidential Information shall not be
deemed a waiver by a Party or any other person or entity of the right to
protect the Confidential Information from public disclosure.
22.1.5 No Warranties. The mere fact that a Party has provided Confidential
Information does not constitute a warranty or representation as to its
accuracy or completeness. In addition, by supplying Confidential
Information, no Party obligates itself to provide any particular information
or Confidential Information to the other Parties nor to enter into any further
agreements or proceed with any other relationship or joint venture.
22.1.6 Standard of Care. Each Party shall use at least the same standard of
care to protect Confidential Information it receives as it uses to protect its
own Confidential Information from unauthorized disclosure, publication or
dissemination. Each Party may use Confidential Information solely to
fulfill its obligations to the other Parties under this LGIA or its regulatory
requirements.
22.1.7 Order of Disclosure. If a court or a Government Authority or entity with
the right, power, and apparent authority to do so requests or requires any
Party, by subpoena, oral deposition, interrogatories, requests for
production of documents, administrative order, or otherwise, to disclose
Confidential Information, that Party shall provide the other Parties with
prompt notice of such request(s) or requirement(s) so that the other
Parties may seek an appropriate protective order or waive compliance
with the terms of this LGIA. Notwithstanding the absence of a protective
order or waiver, the Party may disclose such Confidential Information
which, in the opinion of its counsel, the Party is legally compelled to
56
disclose. Each Party will use Reasonable Efforts to obtain reliable
assurance that confidential treatment will be accorded any Confidential
Information so furnished.
22.1.8 Termination of Agreement. Upon termination of this LGIA for any
reason, each Party shall, within ten (10) Calendar Days of receipt of a
written request from another Party, use Reasonable Efforts to destroy,
erase, or delete (with such destruction, erasure, and deletion certified in
writing to the other Party) or return to the other Party, without retaining
copies thereof, any and all written or electronic Confidential Information
received from the other Party.
22.1.9 Remedies. The Parties agree that monetary damages would be
inadequate to compensate a Party for another Party's Breach of its
obligations under this Article 22. Each Party accordingly agrees that the
other Parties shall be entitled to equitable relief, by way of injunction or
otherwise, if the first Party Breaches or threatens to Breach its obligations
under this Article 22, which equitable relief shall be granted without bond
or proof of damages, and the receiving Party shall not plead in defense
that there would be an adequate remedy at law. Such remedy shall not
be deemed an exclusive remedy for the Breach of this Article 22, but shall
be in addition to all other remedies available at law or in equity. The
Parties further acknowledge and agree that the covenants contained
herein are necessary for the protection of legitimate business interests
and are reasonable in scope. No Party, however, shall be liable for
indirect, incidental, or consequential or punitive damages of any nature or
kind resulting from or arising in connection with this Article 22.
22.1.10 Disclosure to FERC, its Staff, or a State. Notwithstanding anything in
this Article 22 to the contrary, and pursuant to 18 C.F.R. section 1b.20, if
FERC or its staff, during the course of an investigation or otherwise,
requests information from one of the Parties that is otherwise required to
be maintained in confidence pursuant to this LGIA, the Party shall provide
the requested information to FERC or its staff, within the time provided for
in the request for information. In providing the information to FERC or its
staff, the Party must, consistent with 18 C.F.R. section 388.112, request
that the information be treated as confidential and non-public by FERC
and its staff and that the information be withheld from public disclosure.
Parties are prohibited from notifying the other Parties to this LGIA prior to
the release of the Confidential Information to FERC or its staff. The Party
shall notify the other Parties to the LGIA when it is notified by FERC or its
staff that a request to release Confidential Information has been received
by FERC, at which time any of the Parties may respond before such
information would be made public, pursuant to 18 C.F.R. section 388.112.
Requests from a state regulatory body conducting a confidential
investigation shall be treated in a similar manner if consistent with the
applicable state rules and regulations.
57
211.11 Subject to the exception in Article 22.1.10, Confidential Information shall
not be disclosed by the other Parties to any person not employed or
retained by the other Parties, except to the extent disclosure is (i) required
by law; (ii) reasonably deemed by the disclosing Party to be required to be
disclosed in connection with a dispute between or among the Parties, or
the defense of litigation or dispute; (iii) otherwise permitted by consent of
the other Parties, such consent not to be unreasonably withheld; or (iv)
necessary to fulfill its obligations under this LGIA or as a transmission
service provider or a Control Area operator including disclosing the
Confidential Information to an RTO or ISO or to a regional or national
reliability organization. The Party asserting confidentiality shall notify the
other Parties in writing of the information it claims is confidential. Prior to
any disclosures of another Party's Confidential Information under this
subparagraph, or if any third party or Governmental Authority makes any
request or demand for any of the information described in this
subparagraph, the disclosing Party agrees to promptly notify the other
Party in writing and agrees to assert confidentiality and cooperate with the
other Party in seeking to protect the Confidential Information from public
disclosure by confidentiality agreement, protective order or other
reasonable measures.
ARTICLE 23. ENVIRONMENTAL RELEASES
23.1 Each Party shall notify the other Parties, first orally and then in writing, of the
release of any Hazardous Substances, any asbestos or lead abatement
activities, or any type of remediation activities related to the Large Generating
Facility or the Interconnection Facilities, each of which may reasonably be
expected to affect the other Parties. The notifying Party shall: (i) provide the
notice as soon as practicable, provided such Party makes a good faith effort to
provide the notice no later than twenty-four hours after such Party becomes
aware of the occurrence; and (ii) promptly furnish to the other Parties copies of
any publicly available reports filed with any Governmental Authorities addressing
such events.
58
ARTICLE 24. INFORMATION REQUIREMENTS
24.1 Information Acquisition. The Participating TO and the Interconnection
Customer shall submit specific information regarding the electrical characteristics
of their respective facilities to each other as described below and in accordance
with Applicable Reliability Standards.
24.2 Information Submission by Participating TO. The initial information
submission by the Participating TO shall occur no later than one hundred eighty
(180) Calendar Days prior to Trial Operation and shall include the Participating
TO's Transmission System information necessary to allow the Interconnection
Customer to select equipment and meet any system protection and stability
requirements, unless otherwise agreed to by the Participating TO and the
Interconnection Customer. On a monthly basis the Participating TO shall provide
the Interconnection Customer and the ISO a status report on the construction
and installation of the Participating TO's Interconnection Facilities and Network
Upgrades, including, but not limited to, the following information: (1) progress to
date; (2) a description of the activities since the last report; (3) a description of
the action items for the next period; and (4) the delivery status of equipment
ordered.
24.3 Updated Information Submission by Interconnection Customer. The
updated information submission by the Interconnection Customer, including
manufacturer information, shall occur no later than one hundred eighty (180)
Calendar Days prior to the Trial Operation. The Interconnection Customer shall
submit a completed copy of the Electric Generating Unit data requirements
contained in Appendix 1 to the LGIP. It shall also include any additional
information provided to the Participating TO and the ISO for the Interconnection
Studies. Information in this submission shall be the most current Electric
Generating Unit design or expected performance data. Information submitted for
stability models shall be compatible with the Participating TO and ISO standard
models. If there is no compatible model, the Interconnection Customer will work
with a consultant mutually agreed to by the Parties to develop and supply a
standard model and associated information.
If the Interconnection Customer's data is materially different from what was
originally provided to the Participating TO and the ISO for the Interconnection
Studies, then the Participating TO and the ISO will conduct appropriate studies
pursuant to the LGIP to determine the impact on the Participating TO's
Transmission System and affected portions of the ISO Controlled Grid based on
the actual data submitted pursuant to this Article 24.3. The Interconnection
Customer shall not begin Trial Operation until such studies are completed and all
other requirements of this LGIA are satisfied.
24.4 Information Supplementation. Prior to the Trial Operation date, the Parties
shall supplement their information submissions described above in this Article 24
with any and all "as-built" Electric Generating Unit information or "as-tested"
59
performance information that differs from the initial submissions or, alternatively,
written confirmation that no such differences exist. The Interconnection
Customer shall conduct tests on the Electric Generating Unit as required by
Good Utility Practice such as an open circuit "step voltage" test on the Electric
Generating Unit to verify proper operation of the Electric Generating Unit's
automatic voltage regulator.
Unless otherwise agreed, the test conditions shall include: (1) Electric
Generating Unit at synchronous speed; (2) automatic voltage regulator on and in
voltage control mode; and (3) a five percent (5 percent) change in Electric
Generating Unit terminal voltage initiated by a change in the voltage regulators
reference voltage. The Interconnection Customer shall provide validated test
recordings showing the responses of Electric Generating Unit terminal and field
voltages. In the event that direct recordings of these voltages is impractical,
recordings of other voltages or currents that mirror the response of the Electric
Generating Unit's terminal or field voltage are acceptable if information
necessary to translate these alternate quantities to actual Electric Generating
Unit terminal or field voltages is provided. Electric Generating Unit testing shall
be conducted and results provided to the Participating TO and the ISO for each
individual Electric Generating Unit in a station.
Subsequent to the Commercial Operation Date, the Interconnection Customer
shall provide the Participating TO and the ISO any information changes due to
equipment replacement, repair, or adjustment. The Participating TO shall
provide the Interconnection Customer any information changes due to
equipment replacement, repair or adjustment in the directly connected substation
or any adjacent Participating TO-owned substation that may affect the
Interconnection Customer's Interconnection Facilities equipment ratings,
protection or operating requirements. The Parties shall provide such information
pursuant to Article 5.19.
ARTICLE 25. INFORMATION ACCESS AND AUDIT RIGHTS
25.1 Information Access. Each Party (the "disclosing Party") shall make available to
the other Party information that is in the possession of the disclosing Party and is
necessary in order for the other Party to: (i) verify the costs incurred by the
disclosing Party for which the other Party is responsible under this LGIA; and (ii)
carry out its obligations and responsibilities under this LGIA. The Parties shall
not use such information for purposes other than those set forth in this Article
25.1 and to enforce their rights under this LGIA. Nothing in this Article 25 shall
obligate the ISO to make available to a Party any third party information in its
possession or control if making such third party information available would
violate an ISO Tariff restriction on the use or disclosure of such third party
information.
25.2 Reporting of Non-Force Majeure Events. Each Party (the "notifying Party")
shall notify the other Parties when the notifying Party becomes aware of its
60
inability to comply with the provisions of this LGIA for a reason other than a
Force Majeure event. The Parties agree to cooperate with each other and
provide necessary information regarding such inability to comply, including the
date, duration, reason for the inability to comply, and corrective actions taken or
planned to be taken with respect to such inability to comply. Notwithstanding the
foregoing, notification, cooperation or information provided under this Article shall
not entitle the Party receiving such notification to allege a cause for anticipatory
breach of this LGIA.
25.3 Audit Rights. Subject to the requirements of confidentiality under Article 22 of
this LGIA, the Parties' audit rights shall include audits of a Party's costs
pertaining to such Party's performance or satisfaction of obligations owed to the
other Party under this LGIA, calculation of invoiced amounts, the ISO's efforts to
allocate responsibility for the provision of reactive support to the ISO Controlled
Grid, the ISO's efforts to allocate responsibility for interruption or reduction of
generation on the ISO Controlled Grid, and each such Party's actions in an
Emergency Condition.
25.3.1 The Interconnection Customer and the Participating TO shall each have
the right, during normal business hours, and upon prior reasonable notice
to the other Party, to audit at its own expense the other Party's accounts
and records pertaining to either such Party's performance or either such
Party's satisfaction of obligations owed to the other Party under this LGIA.
Subject to Article 25.3.2, any audit authorized by this Article shall be
performed at the offices where such accounts and records are maintained
and shall be limited to those portions of such accounts and records that
relate to each such Party's performance and satisfaction of obligations
under this LGIA. Each such Party shall keep such accounts and records
for a period equivalent to the audit rights periods described in Article 25.4.
25.3.2 Notwithstanding anything to the contrary in Article 25.3, each Party's
rights to audit the ISO's accounts and records shall be as set forth in
Article 12 of the ISO Tariff.
25.4 Audit Rights Periods.
25.4.1 Audit Rights Period for Construction-Related Accounts and Records.
Accounts and records related to the design, engineering, procurement,
and construction of Participating TO's Interconnection Facilities, Network
Upgrades, and Distribution Upgrades constructed by the Participating TO
shall be subject to audit for a period of twenty-four months following the
Participating TO's issuance of a final invoice in accordance with Article
12.2. Accounts and records related to the design, engineering,
procurement, and construction of Participating TO's Interconnection
Facilities and/or Stand Alone Network Upgrades constructed by the
Interconnection Customer shall be subject to audit and verification by the
Participating TO and the ISO for a period of twenty-four months following
61
the Interconnection Customer's issuance of a final invoice in accordance
with Article 5.2(8).
25.4.2 Audit Rights Period for All Other Accounts and Records. Accounts
and records related to a Party's performance or satisfaction of all
obligations under this LGIA other than those described in Article 25.4.1
shall be subject to audit as follows: (i) for an audit relating to cost
obligations, the applicable audit rights period shall be twenty-four months
after the auditing Party's receipt of an invoice giving rise to such cost
obligations; and (ii) for an audit relating to all other obligations, the
applicable audit rights period shall be twenty-four months after the event
for which the audit is sought; provided that each Party's rights to audit the
ISO's accounts and records shall be as set forth in Article 12 of the ISO
Tariff.
25.5 Audit Results. If an audit by the Interconnection Customer or the Participating
TO determines that an overpayment or an underpayment has occurred with
respect to the other Party, a notice of such overpayment or underpayment shall
be given to the other Party together with those records from the audit which
support such determination. The Party that is owed payment shall render an
invoice to the other Party and such invoice shall be paid pursuant to Article 12
hereof.
25.5.1 Notwithstanding anything to the contrary in Article 25.5, the
Interconnection Customer's and Participating TO's rights to audit the
ISO's accounts and records shall be as set forth in Article 12 of the ISO
Tariff, and the ISO's process for remedying an overpayment or
underpayment shall be as set forth in the ISO Tariff.
ARTICLE 26. SUBCONTRACTORS
26.1 General. Nothing in this LGIA shall prevent a Party from utilizing the services of
any subcontractor as it deems appropriate to perform its obligations under this
LGIA; provided, however, that each Party shall require its subcontractors to
comply with all applicable terms and conditions of this LGIA in providing such
services and each Party shall remain primarily liable to the other Party for the
performance of such subcontractor.
26.2 Responsibility of Principal. The creation of any subcontract relationship shall
not relieve the hiring Party of any of its obligations under this LGIA. The hiring
Party shall be fully responsible to the other Parties for the acts or omissions of
any subcontractor the hiring Party hires as if no subcontract had been made;
provided, however, that in no event shall the ISO or Participating TO be liable for
the actions or inactions of the Interconnection Customer or its subcontractors
with respect to obligations of the Interconnection Customer under Article 5 of this
LGIA. Any applicable obligation imposed by this LGIA upon the hiring Party shall
62
be equally binding upon, and shall be construed as having application to, any
subcontractor of such Party.
26.3 No Limitation by Insurance. The obligations under this Article 26 will not be
limited in any way by any limitation of subcontractor's insurance.
ARTICLE 27. DISPUTES
All disputes arising out of or in connection with this LGIA whereby relief is sought by or
from the ISO shall be settled in accordance with the provisions of Article 13 of the ISO
Tariff, except that references to the ISO Tariff in such Article 13 of the ISO Tariff shall
be read as references to this LGIA. Disputes arising out of or in connection with this
LGIA not subject to provisions of Article 13 of the ISO Tariff shall be resolved as
follows:
27.1 Submission. In the event either Party has a dispute, or asserts a claim, that
arises out of or in connection with this LGIA or its performance, such Party (the
"disputing Party") shall provide the other Party with written notice of the dispute
or claim ("Notice of Dispute"). Such dispute or claim shall be referred to a
designated senior representative of each Party for resolution on an informal
basis as promptly as practicable after receipt of the Notice of Dispute by the
other Party. In the event the designated representatives are unable to resolve
the claim or dispute through unassisted or assisted negotiations within thirty (30)
Calendar Days of the other Party's receipt of the Notice of Dispute, such claim or
dispute may, upon mutual agreement of the Parties, be submitted to arbitration
and resolved in accordance with the arbitration procedures set forth below. In
the event the Parties do not agree to submit such claim or dispute to arbitration,
each Party may exercise whatever rights and remedies it may have in equity or
at law consistent with the terms of this LGIA.
27.2 External Arbitration Procedures. Any arbitration initiated under this LGIA shall
be conducted before a single neutral arbitrator appointed by the Parties. If the
Parties fail to agree upon a single arbitrator within ten (10) Calendar Days of the
submission of the dispute to arbitration, each Party shall choose one arbitrator
who shall sit on a three-member arbitration panel. The two arbitrators so chosen
shall within twenty (20) Calendar Days select a third arbitrator to chair the
arbitration panel. In either case, the arbitrators shall be knowledgeable in
electric utility matters, including electric transmission and bulk power issues, and
shall not have any current or past substantial business or financial relationships
with any party to the arbitration (except prior arbitration). The arbitrator(s) shall
provide each of the Parties an opportunity to be heard and, except as otherwise
provided herein, shall conduct the arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association ("Arbitration Rules") and
any applicable FERC regulations; provided, however, in the event of a conflict
between the Arbitration Rules and the terms of this Article 27, the terms of this
Article 27 shall prevail.
63
27.3 Arbitration Decisions. Unless otherwise agreed by the Parties, the arbitrator(s)
shall render a decision within ninety (90) Calendar Days of appointment and
shall notify the Parties in writing of such decision and the reasons therefor. The
arbitrator(s) shall be authorized only to interpret and apply the provisions of this
LGIA and shall have no power to modify or change any provision of this
Agreement in any manner. The decision of the arbitrator(s) shall be final and
binding upon the Parties, and judgment on the award may be entered in any
court having jurisdiction. The decision of the arbitrator(s) may be appealed
solely on the grounds that the conduct of the arbitrator(s), or the decision itself,
violated the standards set forth in the Federal Arbitration Act or the
Administrative Dispute Resolution Act. The final decision of the arbitrator(s)
must also be filed with FERC if it affects jurisdictional rates, terms and conditions
of service, Interconnection Facilities, or Network Upgrades.
27.4 Costs. Each Party shall be responsible for its own costs incurred during the
arbitration process and for the following costs, if applicable: (1) the cost of the
arbitrator chosen by the Party to sit on the three member panel and one half of
the cost of the third arbitrator chosen; or (2) one half the cost of the single
arbitrator jointly chosen by the Parties.
ARTICLE 28. REPRESENTATIONS, WARRANTIES AND COVENANTS
28.1 General. Each Party makes the following representations, warranties and
covenants:
28.1.1 Good Standing. Such Party is duly organized, validly existing and in
good standing under the laws of the state in which it is organized,
formed, or incorporated, as applicable; that it is qualified to do
business in the state or states in which the Large Generating Facility,
Interconnection Facilities and Network Upgrades owned by such Party,
as applicable, are located; and that it has the corporate power and
authority to own its properties, to carry on its business as now being
conducted and to enter into this LGIA and carry out the transactions
contemplated hereby and perform and carry out all covenants and
obligations on its part to be performed under and pursuant to this
LGIA.
28.1.2 Authority. Such Party has the right, power and authority to enter into
this LGIA, to become a Party hereto and to perform its obligations
hereunder. This LGIA is a legal, valid and binding obligation of such
Party, enforceable against such Party in accordance with its terms,
except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by general equitable principles
64
(regardless of whether enforceability is sought in a proceeding in
equity or at law).
28.1.3 No Conflict. The execution, delivery and performance of this LGIA
does not violate or conflict with the organizational or formation
documents, or bylaws or operating agreement, of such Party, or any
judgment, license, permit, order, material agreement or instrument
applicable to or binding upon such Party or any of its assets.
28.1.4 Consent and Approval. Such Party has sought or obtained, or, in
accordance with this LGIA will seek or obtain, each consent, approval,
authorization, order, or acceptance by any Governmental Authority in
connection with the execution, delivery and performance of this LGIA,
and it will provide to any Governmental Authority notice of any actions
under this LGIA that are required by Applicable Laws and Regulations.
ARTICLE 29. [RESERVED]
ARTICLE 30. MISCELLANEOUS
30.1 Binding Effect. This LGIA and the rights and obligations hereof, shall be
binding upon and shall inure to the benefit of the successors and assigns of the
Parties hereto.
30.2 Conflicts. In the event of a conflict between the body of this LGIA and any
attachment, appendices or exhibits hereto, the terms and provisions of the body
of this LGIA shall prevail and be deemed the final intent of the Parties.
30.3 Rules of Interpretation. This LGIA, unless a clear contrary intention appears,
shall be construed and interpreted as follows: (1) the singular number includes
the plural number and vice versa; (2) reference to any person includes such
person's successors and assigns but, in the case of a Party, only if such
successors and assigns are permitted by this LGIA, and reference to a person in
a particular capacity excludes such person in any other capacity or individually;
(3) reference to any agreement (including this LGIA), document, instrument or
tariff means such agreement, document, instrument, or tariff as amended or
modified and in effect from time to time in accordance with the terms thereof
and, if applicable, the terms hereof; (4) reference to any Applicable Laws and
Regulations means such Applicable Laws and Regulations as amended,
modified, codified, or reenacted, in whole or in part, and in effect from time to
time, including, if applicable, rules and regulations promulgated thereunder; (5)
unless expressly stated otherwise, reference to any Article, Section or Appendix
means such Article of this LGIA or such Appendix to this LGIA, or such Section
to the LGIP or such Appendix to the LGIP, as the case may be; (6) "hereunder",
"hereof", "herein", "hereto" and words of similar import shall be deemed
65
references to this LGIA as a whole and not to any particular Article or other
provision hereof or thereof; (7) "including" (and with correlative meaning
"include") means including without limiting the generality of any description
preceding such term; and (8) relative to the determination of any period of time,
"from" means "from and including", "to" means "to but excluding" and "through"
means "through and including".
30.4 Entire Agreement. This LGIA, including all Appendices and Schedules
attached hereto, constitutes the entire agreement among the Parties with
reference to the subject matter hereof, and supersedes all prior and
contemporaneous understandings or agreements, oral or written, between or
among the Parties with respect to the subject matter of this LGIA. There are no
other agreements, representations, warranties, or covenants which constitute
any part of the consideration for, or any condition to, any Party's compliance with
its obligations under this LGIA.
30.5 No Third Party Beneficiaries. This LGIA is not intended to and does not create
rights, remedies, or benefits of any character whatsoever in favor of any persons,
corporations, associations, or entities other than the Parties, and the obligations
herein assumed are solely for the use and benefit of the Parties, their
successors in interest and, where permitted, their assigns.
30.6 Waiver. The failure of a Party to this LGIA to insist, on any occasion, upon strict
performance of any provision of this LGIA will not be considered a waiver of any
obligation, right, or duty of, or imposed upon, such Party.
Any waiver at any time by either Party of its rights with respect to this LGIA shall
not be deemed a continuing waiver or a waiver with respect to any other failure
to comply with any other obligation, right, duty of this LGIA. Termination or
Default of this LGIA for any reason by the Interconnection Customer shall not
constitute a waiver of the Interconnection Customer's legal rights to obtain an
interconnection from the Participating TO. Any waiver of this LGIA shall, if
requested, be provided in writing.
30.7 Headings. The descriptive headings of the various Articles of this LGIA have
been inserted for convenience of reference only and are of no significance in the
interpretation or construction of this LGIA.
30.8 Multiple Counterparts. This LGIA may be executed in two or more
counterparts, each of which is deemed an original but all constitute one and the
same instrument.
30.9 Amendment. The Parties may by mutual agreement amend this LGIA by a
written instrument duly executed by all of the Parties. Such amendment shall
become effective and a part of this LGIA upon satisfaction of all Applicable Laws
and Regulations.
66
30.10 Modification by the Parties. The Parties may by mutual agreement amend the
Appendices to this LGIA by a written instrument duly executed by all of the
Parties. Such amendment shall become effective and a part of this LGIA upon
satisfaction of all Applicable Laws and Regulations.
30.11 Reservation of Rights. The ISO and Participating TO shall each have the right
to make a unilateral filing with FERC to modify this LGIA pursuant to section 205
or any other applicable provision of the Federal Power Act and FERC's rules and
regulations thereunder with respect to the following Articles of this LGIA and with
respect to any rates, terms and conditions, charges, classifications of service,
rule or regulation covered by these Articles:
Recitals, 1, 2.1, 2.2, 2.3, 2.4, 2.6, 3.1, 3.3, 4.1, 4.2, 4.4, 4.5, 5 preamble,
5.4, 5.7, 5.8, 5.9, 5.12, 5.13, 5.18, 5.19.1, 7.1, 7.2, 8, 9.1, 9.2, 9.3, 9.5,
9.6, 9.7, 9.8, 9.10, 10.3, 11.4, 12.1, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22,
23, 24.3, 24.4, 25.1, 25.2, 25.3 (excluding subparts), 25.4.2, 26, 28, 29,
30, Appendix D, Appendix F, Appendix G, and any other Article not
reserved exclusively to the Participating TO or the ISO below.
The Participating TO shall have the exclusive right to make a unilateral filing with
FERC to modify this LGIA pursuant to section 205 or any other applicable
provision of the Federal Power Act and FERC's rules and regulations thereunder
with respect to the following Articles of this LGIA and with respect to any rates,
terms and conditions, charges, classifications of service, rule or regulation
covered by these Articles:
2.5, 5.1, 5.2, 5.3, 5.5, 5.6, 5.10, 5.11, 5.14, 5.15, 5.16, 5.17, 5.19
(excluding 5.19.1), 6, 7.3, 9.4, 9.9, 10.1, 10.2, 10.4, 10.5, 11.1, 11.2, 11.3,
11.5, 12.2, 12.3, 12.4, 24.1, 24.2, 25.3.1, 25.4.1, 25.5 (excluding 25.5.1),
27 (excluding preamble), Appendix A, Appendix B, Appendix C, and
Appendix E.
The ISO shall have the exclusive right to make a unilateral filing with FERC to
modify this LGIA pursuant to section 205 or any other applicable provision of the
Federal Power Act and FERC's rules and regulations thereunder with respect to
the following Articles of this LGIA and with respect to any rates, terms and
conditions, charges, classifications of service, rule or regulation covered by these
Articles:
3.2, 4.3, 4.6, 11.6, 25.3.2, 25.5.1, and 27 preamble.
The Interconnection Customer, the ISO, and the Participating TO shall have the
right to make a unilateral filing with FERC to modify this LGIA pursuant to section
206 or any other applicable provision of the Federal Power Act and FERC's rules
and regulations thereunder; provided that each Party shall have the right to
protest any such filing by another Party and to participate fully in any proceeding
before FERC in which such modifications may be considered. Nothing in this
67
LGIA shall limit the rights of the Parties or of FERC under sections 205 or 206 of
the Federal Power Act and FERC's rules and regulations thereunder, except to
the extent that the Parties otherwise mutually agree as provided herein.
30.12 No Partnership. This LGIA shall not be interpreted or construed to create an
association, joint venture, agency relationship, or partnership among the Parties
or to impose any partnership obligation or partnership liability upon any Party.
No Party shall have any right, power or authority to enter into any agreement or
undertaking for, or act on behalf of, or to act as or be an agent or representative
of, or to otherwise bind, another Party.
30.13 Joint and Several Obligations. Except as otherwise provided in this LGIA, the
obligations of the ISO, the Participating TO, and the Interconnection Customer
are several, and are neither joint nor joint and several.
68
IN WITNESS WHEREOF, the Parties have executed this LGIA in multiple
originals, each of which shall constitute and be an original effective agreement among
the Parties.
Pacific Gas and Electric Company
By:
Title:
Date:
California Independent System Operator Corporation
By:
Title:
Date:
Geysers Power Company, LLC
By:
Title:
Date:
69
Appendices to LGIA
CAISO Note: Following appendices require additional information from the Participating TO and the
Interconnection Customer to comply fully with the CAISO Tariff.
Appendix A Interconnection Facilities, Network Upgrades and Distribution
Upgrades
Appendix B Milestones
Appendix C Interconnection Details
Appendix D Security Arrangements Details
Appendix E Commercial Operation Date
Appendix F Addresses for Delivery of Notices and Billings
Appendix G Reliability Management System Agreement
Appendix H Interconnection Requirements for a Wind Generating
Plant
70
Appendix A
To LGIA
Interconnection Facilities, Network Upgrades and Distribution Upgrades
Not applicable
Calistoga Power Plant ("Calistoga") is an existing facility already interconnected to the
ISO Controlled Grid. Prior to July 1, 2008, Calistoga was selling power to PG&E
pursuant to a grandfathered PURPA standard offer contract which expired/terminated
June 30, 2008. Pursuant to Article 25.1.2 of the ISO Tariff, Geysers Power Company
("GPC") has submitted a duly notarized affidavit, dated June 9, 2008 that the total
generating capability of Calistoga Generating Facility and the electrical characteristics
of the generating unit(s) have remained unchanged and will remain unchanged as
submitted by the in its affidavit. .
1. Interconnection Facilities:
(a) Interconnection Customer's Interconnection Facilities:
Calistoga is an existing & currently operational Generating Facility; as such, no
additional new Interconnection Customer's Interconnection Facilities are required
to make deliveries to the ISO Controlled Grid.
Calistoga will use the existing facilities designated as Interconnection Customer's
Interconnection Facilities that connect to the ISO Controlled Grid on the Geysers
#9, Lakeville 230 kV transmission line.
(b) Participating TO's Interconnection Facilities:
Calistoga is an existing & currently operational Generating Facility; as such, no
additional new Participating TO's Interconnection Facilities required.
Calistoga Power Plant will use the existing facilities designated as Participating
TO's Interconnection Facilities.
2. Network Upgrades:
(a) Stand Alone Network Upgrades:
Currently operational Generating Facility; as such, no new additional Stand
Alone Network Upgrades are required as Calistoga has operated since 1988
selling power to PG&E pursuant to a grandfathered PURPA standard offer
contract which expired on June 30, 2008. The Generating Facility is connected to
the ISO Controlled Grid whose total generation previously sold to a Participating
TO but whose generation will, as of July 1, 2008, be sold in the wholesale
market.
(b) Other Network Upgrades:
Participating TO's Reliability Network Upgrades:
No new additional facilities are required.
Calistoga is an existing qualifying facility ("QF") connected to the ISO Controlled
Grid whose total generation was sold until June 30, 2008 to a Participating TO
but whose generation will, as of July 1, 2008, be sold in the wholesale market.
Participating TO's Delivery Network Upgrades:
No new additional facilities are required.
Calistoga Power Plant is an existing QF connected to the ISO Controlled Grid
whose total generation was sold until June 30, 2008 to a Participating TO but
whose generation will, as of July 1, 2008, be sold in the wholesale market.
3. Distribution Upgrades:
No new additional Distribution Upgrade facilities are required.
The Generating Facility is an existing QF connected to the ISO Controlled Grid
whose total generation was sold until June 30, 2008 to a Participating TO but
whose generation will, as of July 1, 2008, be sold in the wholesale market.
Appendix B
To LGIA
Milestones
Calistoga is an existing and currently QF operational Generating Facility connected to
the ISO Controlled Grid whose total generation was sold until June 30, 2008 to a
Participating TO but whose generation will, as of July 1, 2008, be sold in the wholesale
market; as such, no milestones other than complying with the applicable CAISO Tariff
requirements for conversion to merchant facility are required to be satisfied.
GPC has informed the ISO that it has installed the ISO compliant revenue meters and
has its Metering Facilities certified by the ISO in June 2008.
ILIONi LINE PA knaLL POCK vk
ti
NAPA, CAUSTO,GE A, Y, EgagaNga.
f EFENtS1 (ag.3)
CEPLEAS W GOAN% P,P,
NPENt 31 (iNg.24)
PuPIENC,E.
(CNN %%CI
MC CANE PR.
(Cam .6)
Wit-TrEJ.t6).
/
-Ht L_
WEE, POND PUT P.P.
(EPX.N)
L;eysersZ- Lakeville
Eagle Reek
Substatler
Appendix C
To LGIA
Interconnection Details
Calistoga is an existing and currently operational QF Generating Facility rated at 92.1
MW (gross), based on geothermal technology connected to the ISO Controlled Grid on
the Geysers #9, Lakeville 230 kV transmission line. Calistoga is located at 10350
Socrates Mine Road, Middletown, CA 95461.
Calistoga sold until June 30, 2008 all of its electrical output to PG&E pursuant to a
PURPA standard offer power purchase agreement. Effective July 1, 2008 Calistoga
plans to participate in the ISO markets.
Its Point of Interconnection as set forth in Appendix A of the LGIA is the point where the
Interconnection Facilities connect to the Participating TO's Transmission System, which
are indicated in the one-line diagram below. The Point of Change of Ownership is
where the Interconnection Customer's Interconnection Facilities connect to the
Participating TO's Interconnection Facilities, which is also shown in the following oneline diagram.
Appendix D
To LGIA
Security Arrangements Details
Infrastructure security of ISO Controlled Grid equipment and operations and
control hardware and software is essential to ensure day-to-day ISO Controlled Grid
reliability and operational security. FERC will expect the ISO, all Participating TOs,
market participants, and Interconnection Customers interconnected to the ISO
Controlled Grid to comply with the recommendations offered by the President's Critical
Infrastructure Protection Board and, eventually, best practice recommendations from
the electric reliability authority. All public utilities will be expected to meet basic
standards for system infrastructure and operational security, including physical,
operational, and cyber-security practices.
The Interconnection Customer shall meet the requirements for security
implemented pursuant to the ISO Tariff, including the ISO's standards for information
security posted on the ISO's internet web site at the following internet address:
http://www.caiso.com/pubinfo/info-security/index.html.
The Interconnection Customer shall continue to maintain property fencing, use the
services of security personnel, surveillance camera(s) and other applicable means to
secure the facility property forming boundaries of the generating facility. In addition, the
switchyard within the plant property will remain fenced and each gate locked with the
Participating TO's substation locks.
OPERATING COMMUNICATIONS AND NOTIFICATIONS
D.1. Designated Representatives
The ISO, Participating TO and the Interconnection Customer shall provide for operating
communications through their respective designated representatives as follows:
CALIFORNIA ISO
PTO (PLEASE COMPLETE) IC (GPC)
ISO Real Time Desk/24 Hour
Desk
24-hour telephone:
(916) 351-2488
Alternate phone:
(916) 351-2489
Control Center: PG&E Fulton
Control Center
24-hour Telephone:
(707) 579-6103
Operator Name and/or Title:
Geysers Control Center
24-hour phone number:
(707) 431-6001
Alternate phone:
(707) 431-6002
Email: Geysers Shift
Managers@calpine.com
D.2. Communication with the Participating TO's Transmission System Control
Center
Interconnection Customer shall maintain operating communications with the ISO and
Participating TO's Transmission System control centers.
The operating communications shall include, but not be limited to, advising the control
center promptly, and in advance if possible, of any paralleling with or separation from
the Participating TO's Transmission System and any scheduled and unscheduled
shutdowns, equipment clearances, and changes in levels of operating voltage or power
factors.
Interconnection Customer promptly shall notify the control center of, and any changes
in, the following:
The current names and 24-hour phone numbers of the personnel
responsible for operating and maintaining the Generating Facility.
Any Emergency Condition or any request that Participating TO de-energize
a portion of the Participating TO's Transmission System under its control.
Any changes in the mechanical or electric condition of the Generating
Facility or Interconnection Facilities that may affect the reliability of either
the Generating Facility or the Participating TO's Transmission System.
Immediately upon discovery, any misoperation or inoperable condition of an
interconnection relay or circuit breaker.
Immediately upon discovery, the operation of any circuit breaker that has
operated by an interconnection relay, along with the relay targets that
caused the circuit breaker to operate.
Plans to manually parallel with or separate from the Participating TO's
Transmission System and the times of actual manual parallels and
separations. Emergency Condition separations shall be reported as soon
as possible.
D.3 Oral Communications
All oral operating communications shall be conducted through the control centers.
Interconnection Customer agrees to maintain 24-hour direct phone service so that the
control centers can give instructions to Interconnection Customer or its designated
operator.
D.4 Operating Procedures
Operating Procedures will be developed before synchronizing. Neither party is to
deviate from these. Any changes will have to be mutually agreed. These procedures
will address switching operations, voltage control, RAS functionality, outage request,
specific operating restrictions and other matters as necessary.
Appendix E
To LGIA
Commercial Operation Date
This Appendix E is a part of the LGIA.
[DATE]
Mr. Stephen Rutty
Manager of Grid Assets
California Independent System Operator Corporation
151 Blue Ravine Road
Folsom, CA 95630
Mr. Robert Kott
Manager of Model & Contract Implementation
California Independent System Operator Corporation
151 Blue Ravine Road
Folsom, CA 95630
Ms. Kristine Buccholz
Director, Electric Transmission Operations
Pacific Gas and Electric Company
77 Beale Street
P.O. Box 770000
San Francisco, CA 94177
Re: GPC's Calistoga Power Plant - 92.1 MW Electric Generating Unit -
Dear Sirs/Madam:
Geysers Power Company, LLC is the legal owner of Calistoga Power Plant, a
geothermal Generating Facility with a 92.1 MW Electric Generating Unit, located
at 10350 Socrates Mine Road, Middletown, California. Calistoga Power Plant
commenced Commercial Operation in May 1984 and sold its total net electrical
generation output of the facility to Pacific Gas and Electric Company pursuant to
a grandfathered PURPA Power Purchase Agreement ("PPA").
Effective July 1, 2008, Geysers Power Company, LLC has started to sell the
electrical output from its Calistoga Power Plant in the wholesale market, either
through participation in the ISO's markets or by selling its generation output
pursuant to bilateral agreements.
Should you have any questions regarding this notice, please contact me or Dean
Cooley at 707-431-6077.
Thank you.
Dennis J. Gilles
Senior VP, West and Geothermal
Geysers Power Company, LLC
cc: Ed Fishback
Appendix F
To LGIA
Addresses for Delivery of Notices and Billings
Notices:
ISO:
California Independent System Operator Corporation
Ms. Linda Wright
151 Blue Ravine Road
Folsom, CA 95630
Participating TO:
Pacific Gas and Electric Company
Ms. Jeannette McGee
Electric Transmission Rates
77 Beale Street
P.O. Box 770000
San Francisco, CA 94177
Interconnection Customer:
Geysers Power Company, LLC
Director, Asset Management
10350 Socrates Mine Road
Middletown, CA 95461
Billings and Payments:
Participating TO:
Pacific Gas and Electric Company
Ms. Jeannette McGee
Electric Transmission Rates
77 Beale Street, Mail code B13J
P.O. Box 770000
San Francisco, CA 94177
Interconnection Customer:
Geysers Power Company, LLC
Calpine Energy Services, Scheduling Coordinator for GPC
California ISO Settlements
717 Texas Avenue, Suite 1000
Houston, Texas 77002
ISO:
California Independent System Operator
Finance Department
Ms. Melodie Iverson
151 Blue Ravine Road
Folsom, CA 95630
Alternative Forms of Delivery of Notices (telephone, facsimile or e-mail):
ISO:
LwrightAcaiso.corn mailto:Lwright@caiso.com
efishbackAISO.com
Participating TO:
Pacific Gas and Electric Company
AKM@pge.com
JxMnApge.com
RJY1@pge.com
Interconnection Customer:
Geysers Power Company, LLC
10350 Socrates Mine Road
Middletown, CA 95461
Attn: Director, Asset Management
GevsersPPAAcalpine.com
Telephone: 707-431-6000
Facsimile: 707-431-6246
Appendix G
To LGIA
Reliability Management System Agreement
RELIABILITY MANAGEMENT SYSTEM AGREEMENT
by and between
CALIFORNIA INDEPENDENT OPERATOR SYSTEM CORPORATION
and
GEYSERS POWER COMPANY, LLC
THIS RELIABILITY MANAGEMENT SYSTEM AGREEMENT (the "Agreement"), is
entered into this _day of July, 2008, by and between California Independent Operator
System Corporation (the "Transmission Operator") and Geysers Power Company, LLC
(the "Generator").
WHEREAS, there is a need to maintain the reliability of the interconnected electric
systems encompassed by the WSCC in a restructured and competitive electric utility
industry;
WHEREAS, with the transition of the electric industry to a more competitive structure, it
is desirable to have a uniform set of electric system operating rules within the Western
Interconnection, applicable in a fair, comparable and non-discriminatory manner, with
which all market participants comply; and
WHEREAS, the members of the WSCC, including the Transmission Operator, have
determined that a contractual Reliability Management System provides a reasonable,
currently available means of maintaining such reliability.
NOW, THEREFORE, in consideration of the mutual agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Transmission Operator and the Generator agree as follows:
1. PURPOSE OF AGREEMENT
The purpose of this Agreement is to maintain the reliable operation of the Western
Interconnection through the Generator's commitment to comply with certain reliability
standards.
2. DEFINITIONS
In addition to terms defined in the beginning of this Agreement and in the Recitals
hereto, for purposes of this Agreement the following terms shall have the meanings set
forth beside them below.
Control Area means an electric system or systems, bounded by interconnection
metering and telemetry, capable of controlling generation to maintain its interchange
schedule with other Control Areas and contributing to frequency regulation of the
Western Interconnection.
FERC means the Federal Energy Regulatory Commission or a successor agency.
Member means any party to the WSCC Agreement.
Party means either the Generator or the Transmission Operator and
Parties means both of the Generator and the Transmission Operator.
Reliability Management System or RMS means the contractual reliability
management program implemented through the WSCC Reliability Criteria Agreement,
the WSCC RMS Agreement, this Agreement, and any similar contractual arrangement.
Western Interconnection means the area comprising those states and provinces, or
portions thereof, in Western Canada, Northern Mexico and the Western United States
in which Members of the WSCC operate synchronously connected transmission
systems.
Working Day means Monday through Friday except for recognized legal holidays in the
state in which any notice is received pursuant to Section 8.
WSCC means the Western Systems Coordinating Council or a successor entity.
WSCC Agreement means the Western Systems Coordinating Council Agreement
dated March 20, 1967, as such may be amended from time to time.
WSCC Reliability Criteria Agreement means the Western Systems Coordinating
Council Reliability Criteria Agreement dated June 18, 1999 among the WSCC and
certain of its member transmission operators, as such may be amended from time to
time.
WSCC RMS Agreement means an agreement between the WSCC and the
Transmission Operator requiring the Transmission Operator to comply with the reliability
criteria contained in the WSCC Reliability Criteria Agreement.
WSCC Staff means those employees of the WSCC, including personnel hired by the
WSCC on a contract basis, designated as responsible for the administration of the
RMS.
3. TERM AND TERMINATION
3.1 Term. This Agreement shall become effective [thirty (30) days after the date of
issuance of a final FERC order accepting this Agreement for filing without requiring any
changes to this Agreement unacceptable to either Party. Required changes to this
Agreement shall be deemed unacceptable to a Party only if that Party provides notice
to the other Party within fifteen (15) days of issuance of the applicable FERC order that
such order is unacceptable].
[Note: if the interconnection agreement is not FERC jurisdictional, replace bracketed
language with: [on the later of: (a) the date of execution; or (b) the effective date of the
WSCC RMS Agreement.]]
3.2 Notice of Termination of WSCC RMS Agreement. The Transmission Operator
shall give the Generator notice of any notice of termination of the WSCC RMS
Agreement by the WSCC or by the Transmission Operator within fifteen (15) days of
receipt by the WSCC or the Transmission Operator of such notice of termination.
3.3 Termination by the Generator. The Generator may terminate this Agreement as
follows:
(a) following the termination of the WSCC RMS Agreement for any reason by the
WSCC or by the Transmission Operator, provided such notice is provided within fortyfive (45) days of the termination of the WSCC RMS Agreement;
(b) following the effective date of an amendment to the requirements of the WSCC
Reliability Criteria Agreement that adversely affects the Generator, provided notice of
such termination is given within forty-five (45) days of the date of issuance of a FERC
order accepting such amendment for filing, provided further that the forty-five (45) day
period within which notice of termination is required may be extended by the Generator
for an additional forty-five (45) days if the Generator gives written notice to the
Transmission Operator of such requested extension within the initial forty-five (45) day
period; or
(c) for any reason on one year's written notice to the Transmission Operator and the
WSCC.
3.4 Termination by the Transmission Operator. The Transmission Operator may
terminate this Agreement on thirty (30) days' written notice following the termination of
the WSCC RMS Agreement for any reason by the WSCC or by the Transmission
Operator, provided such notice is provided within thirty (30) days of the termination of
the WSCC RMS Agreement.
3.5 Mutual Agreement. This Agreement may be terminated at any time by the mutual
agreement of the Transmission Operator and the Generator.
4. COMPLIANCE WITH AND AMENDMENT OF WSCC RELIABILITY CRITERIA
4.1 Compliance with Reliability Criteria. The Generator agrees to comply with the
requirements of the WSCC Reliability Criteria Agreement, including the applicable
WSCC reliability criteria contained in Section IV of Annex A thereof, and, in the event of
failure to comply, agrees to be subject to the sanctions applicable to such failure. Each
and all of the provisions of the WSCC Reliability Criteria Agreement are hereby
incorporated by reference into this Agreement as though set forth fully herein, and the
Generator shall for all purposes be considered a Participant, and shall be entitled to all
of the rights and privileges and be subject to all of the obligations of a Participant, under
and in connection with the WSCC Reliability Criteria Agreement, including but not
limited to the rights, privileges and obligations set forth in Sections 5, 6 and 10 of the
WSCC Reliability Criteria Agreement.
4.2 Modifications to WSCC Reliability Criteria Agreement. The Transmission
Operator shall notify the Generator within fifteen (15) days of the receipt of notice from
the WSCC of the initiation of any WSCC process to modify the WSCC Reliability
Criteria Agreement. The WSCC RMS Agreement specifies that such process shall
comply with the procedures, rules, and regulations then applicable to the WSCC for
modifications to reliability criteria.
4.3 Notice of Modifications to WSCC Reliability Criteria Agreement. If, following the
process specified in Section 4.2, any modification to the WSCC Reliability Criteria
Agreement is to take effect, the Transmission Operator shall provide notice to the
Generator at least forty-five (45) days before such modification is scheduled to take
effect.
4.4 Effective Date. Any modification to the WSCC Reliability Criteria Agreement shall
take effect on the date specified by FERC in an order accepting such modification for
filing.
4.5 Transfer of Control or Sale of Generation Facilities. In any sale or transfer of
control of any generation facilities subject to this Agreement, the Generator shall as a
condition of such sale or transfer require the acquiring party or transferee with respect
to the transferred facilities either to assume the obligations of the Generator with
respect to this Agreement or to enter into an agreement with the Control Area Operator
in substantially the form of this Agreement.
5. SANCTIONS
5.1 Payment of Monetary Sanctions. The Generator shall be responsible for payment
directly to the WSCC of any monetary sanction assessed against the Generator
pursuant to this Agreement and the WSCC Reliability Criteria Agreement. Any such
payment shall be made pursuant to the procedures specified in the WSCC Reliability
Criteria Agreement.
5.2 Publication. The Generator consents to the release by the WSCC of information
related to the Generator's compliance with this Agreement only in accordance with the
WSCC Reliability Criteria Agreement.
5.3 Reserved Rights. Nothing in the RMS or the WSCC Reliability Criteria Agreement
shall affect the right of the Transmission Operator, subject to any necessary regulatory
approval, to take such other measures to maintain reliability, including disconnection,
which the Transmission Operator may otherwise be entitled to take.
6. THIRD PARTIES
Except for the rights and obligations between the WSCC and Generator specified in
Sections 4 and 5, this Agreement creates contractual rights and obligations solely
between the Parties. Nothing in this Agreement shall create, as between the Parties or
with respect to the WSCC: (1) any obligation or liability whatsoever (other than as
expressly provided in this Agreement), or (2) any duty or standard of care whatsoever.
In addition, nothing in this Agreement shall create any duty, liability, or standard of care
whatsoever as to any other party. Except for the rights, as a third-party beneficiary with
respect to Sections 4 and 5, of the WSCC against Generator, no third party shall have
any rights whatsoever with respect to enforcement of any provision of this Agreement.
Transmission Operator and Generator expressly intend that the WSCC is a third-party
beneficiary to this Agreement, and the WSCC shall have the right to seek to enforce
against Generator any provisions of Sections 4 and 5, provided that specific
performance shall be the sole remedy available to the WSCC pursuant to this
Agreement, and Generator shall not be liable to the WSCC pursuant to this Agreement
for damages of any kind whatsoever (other than the payment of sanctions to the
WSCC, if so construed), whether direct, compensatory, special, indirect, consequential,
or punitive.
7. REGULATORY APPROVALS
This Agreement shall be filed with FERC by the Transmission Operator under Section
205 of the Federal Power Act. In such filing, the Transmission Operator shall request
that FERC accept this Agreement for filing without modification to become effective on
the day after the date of a FERC order accepting this Agreement for filing. [This section
shall be omitted for agreements not subject to FERC jurisdiction.]
8. NOTICES
Any notice, demand or request required or authorized by this Agreement to be given in
writing to a Party shall be delivered by hand, courier or overnight delivery service,
mailed by certified mail (return receipt requested) postage prepaid, faxed, or delivered
by mutually agreed electronic means to such Party at the following address:
Transmission Operator: California ISO
Roni L. Reese
151 Blue Ravine Rd.
Folsom, CA 95630
Phone: (916) 608-7027
Fax: (916) 608-7292
Generator: Geysers Power Company, LLC
10350 Socrates Mine Road
Middletown, CA 95461
Attn: Frank Obertance
Tel: 707-431-6004
Fax: 707-431-6248
The designation of such person and/or address may be changed at any time by either
Party upon receipt by the other of written notice. Such a notice served by mail shall be
effective upon receipt. Notice transmitted by facsimile shall be effective upon receipt if
received prior to 5:00 p.m. on a Working Day, and if not received prior to 5:00 p.m. on a
Working Day, receipt shall be effective on the next Working Day.
9. APPLICABILITY
This Agreement (including all appendices hereto and, by reference, the WSCC
Reliability Criteria Agreement) constitutes the entire understanding between the Parties
hereto with respect to the subject matter hereof, supersedes any and all previous
understandings between the Parties with respect to the subject matter hereof, and
binds and inures to the benefit of the Parties and their successors.
10. AMENDMENT
No amendment of all or any part of this Agreement shall be valid unless it is reduced to
writing and signed by both Parties hereto. The terms and conditions herein specified
shall remain in effect throughout the term and shall not be subject to change through
application to the FERC or other governmental body or authority, absent the agreement
of the Parties.
11. INTERPRETATION
Interpretation and performance of this Agreement shall be in accordance with, and shall
be controlled by, the laws of the State of California but without giving effect to the
provisions thereof relating to conflicts of law. Article and section headings are for
convenience only and shall not affect the interpretation of this Agreement. References
to articles, sections and appendices are, unless the context otherwise requires,
references to articles, sections and appendices of this Agreement.
12. PROHIBITION ON ASSIGNMENT
This Agreement may not be assigned by either Party without the consent of the other
Party, which consent shall not be unreasonably withheld; provided that the Generator
may without the consent of the WSCC assign the obligations of the Generator pursuant
to this Agreement to a transferee with respect to any obligations assumed by the
transferee by virtue of Section 4.5 of this Agreement.
13. SEVERABILITY
If one or more provisions herein shall be invalid, illegal or unenforceable in any respect,
it shall be given effect to the extent permitted by applicable law, and such invalidity,
illegality or unenforceability shall not affect the validity of the other provisions of this
Agreement.
14. COUNTERPARTS
This Agreement may be executed in counterparts and each shall have the same force
and effect as an original.
IN WITNESS WHEREOF, the Transmission Operator and the Generator have each
caused this Reliability Management System Agreement to be executed by their
respective duly authorized officers as of the date first above written.
CALIFORNIA INDEPENDENT OPERATOR SYSTEM CORPORATION
By:
Name:
Title:
Date:
GEYSERS POWER COMPANY, LLC
By:
Name: Dennis J. Gilles
Title: Senior VP, West and Geothermal
Date:
Appendix H
To LGIA
INTERCONNECTION REQUIREMENTS FOR A WIND GENERATING PLANT
(This Appendix H does not apply to CPC's Calistoga Power Plant)
Appendix H sets forth requirements and provisions specific to a wind generating plant.
All other requirements of this LGIA continue to apply to wind generating plant
interconnections.
A. Technical Standards Applicable to a Wind Generating Plant
i. Low Voltage Ride-Through (LVRT) Capability
A wind generating plant shall be able to remain online during voltage disturbances up to
the time periods and associated voltage levels set forth in the standard below. The
LVRT standard provides for a transition period standard and a post-transition period
standard.
Transition Period LVRT Standard
The transition period standard applies to wind generating plants subject to FERC Order
661 that have either: (i) interconnection agreements signed and filed with FERC, filed
with FERC in unexecuted form, or filed with FERC as non-conforming agreements
between January 1, 2006 and December 31, 2006, with a scheduled in-service date no
later than December 31, 2007, or (ii) wind generating turbines subject to a wind turbine
procurement contract executed prior to December 31, 2005, for delivery through 2007.
1. Wind generating plants are required to remain in-service during three-phase faults
with normal clearing (which is a time period of approximately 4 – 9 cycles) and
single line to ground faults with delayed clearing, and subsequent post-fault voltage
recovery to prefault voltage unless clearing the fault effectively disconnects the
generator from the system. The clearing time requirement for a three-phase fault
will be specific to the wind generating plant substation location, as determined by
and documented by the Participating TO. The maximum clearing time the wind
generating plant shall be required to withstand for a three-phase fault shall be 9
cycles at a voltage as low as 0.15 p.u., as measured at the high side of the wind
generating plant step-up transformer (i.e. the transformer that steps the voltage up
to the transmission interconnection voltage or "GSU"), after which, if the fault
remains following the location-specific normal clearing time for three-phase faults,
the wind generating plant may disconnect from the transmission system.
2. This requirement does not apply to faults that would occur between the wind
generator terminals and the high side of the GSU or to faults that would result in a
voltage lower than 0.15 per unit on the high side of the GSU serving the facility.
3. Wind generating plants may be tripped after the fault period if this action is intended
as part of a special protection system.
4. Wind generating plants may meet the LVRT requirements of this standard by the
performance of the generators or by installing additional equipment (e.g., Static VAr
Compensator, etc.) within the wind generating plant or by a combination of
generator performance and additional equipment.
5. Existing individual generator units that are, or have been, interconnected to the
network at the same location at the effective date of the Appendix H LVRT Standard
are exempt from meeting the Appendix H LVRT Standard for the remaining life of
the existing generation equipment. Existing individual generator units that are
replaced are required to meet the Appendix H LVRT Standard.
Post-transition Period LVRT Standard
All wind generating plants subject to FERC Order No. 661 and not covered by the
transition period described above must meet the following requirements:
1. Wind generating plants are required to remain in-service during three-phase faults
with normal clearing (which is a time period of approximately 4 – 9 cycles) and
single line to ground faults with delayed clearing, and subsequent post-fault voltage
recovery to prefault voltage unless clearing the fault effectively disconnects the
generator from the system. The clearing time requirement for a three-phase fault
will be specific to the wind generating plant substation location, as determined by
and documented by the Participating TO. The maximum clearing time the wind
generating plant shall be required to withstand for a three-phase fault shall be 9
cycles after which, if the fault remains following the location-specific normal clearing
time for three-phase faults, the wind generating plant may disconnect from the ISO
Controlled Grid. A wind generating plant shall remain interconnected during such a
fault on the ISO Controlled Grid for a voltage level as low as zero volts, as
measured at the high voltage side of the wind GSU.
2. This requirement does not apply to faults that would occur between the wind
generator terminals and the high side of the GSU.
3. Wind generating plants may be tripped after the fault period if this action is intended
as part of a special protection system.
4. Wind generating plants may meet the LVRT requirements of this standard by the
performance of the generators or by installing additional equipment (e.g., Static VAr
Compensator) within the wind generating plant or by a combination of generator
performance and additional equipment.
5. Existing individual generator units that are, or have been, interconnected to the ISO
Controlled Grid at the same location at the effective date of the Appendix H LVRT
Standard are exempt from meeting the Appendix H LVRT Standard for the
remaining life of the existing generation equipment. Existing individual generator
units that are replaced are required to meet the Appendix H LVRT Standard.
ii. Power Factor Design Criteria (Reactive Power)
A wind generating plant shall operate within a power factor within the range of 0.95
leading to 0.95 lagging, measured at the Point of Interconnection as defined in this
LGIA in order to maintain a specified voltage schedule, if the Interconnection System
Impact Study shows that such a requirement is necessary to ensure safety or reliability.
The power factor range standard can be met by using, for example, power electronics
designed to supply this level of reactive capability (taking into account any limitations
due to voltage level, real power output, etc.) or fixed and switched capacitors, or a
combination of the two, if agreed to by the Participating TO and ISO. The
Interconnection Customer shall not disable power factor equipment while the wind plant
is in operation. Wind plants shall also be able to provide sufficient dynamic voltage
support in lieu of the power system stabilizer and automatic voltage regulation at the
generator excitation system if the Interconnection System Impact Study shows this to
be required for system safety or reliability.
iii. Supervisory Control and Data Acquisition (SCADA) Capability
The wind plant shall provide SCADA capability to transmit data and receive instructions
from the Participating TO and ISO to protect system reliability. The Participating TO
and ISO and the wind plant Interconnection Customer shall determine what SCADA
information is essential for the proposed wind plant, taking into account the size of the
plant and its characteristics, location, and importance in maintaining generation
resource adequacy and transmission system reliability in its area.
ATTACHMENT B
GEYSERS POWER COMPANY, LLC
June 30, 2008
Mr. Jim Detmers
Vice President Operations
California Independent System Operator Corporation
151 Blue Ravine Road
Folsom, CA 95630
Dear Mr. Detmers:
Geysers Power Company, LLC ("GPC") has been working diligently with the California
Independent System Operator Corporation ("CAISO") and Pacific Gas and Electric
Company ("PG&E") to finalize the arrangements necessary for its four qualifying
facilities, known as Aidlin Power Plant, Bear Canyon Power Plant, Calistoga Power
Plant, and West Ford Flat Power Plant ("Transitioning Generators"), to be listed under
• GPC's Participating Generator Agreement ("PGA"), Schedule 1 to enable, effective July
1, 2008, GPC to start selling the electrical output from these Transitioning Generators
through bilateral transactions in the CAISO wholesale market. The four Transitioning
Generators are each connected to the CAISO Controlled Grid and each currently sell
energy to PG&E, a Participating TO, pursuant to PURPA standard offer contracts.
In preparation for this transition, GPC has installed CAISO meters and communication
circuits and reprogrammed its Data Processing Gateway ("DPG") systems to provide
data from GPC's generating facilities to the CAISO, and has submitted updates to
Schedules 1 and 3 of its PGA and Schedule 1 of its Meter Service Agreement ("MSA")
and to GPC's Master File Data. GPC has also submitted to the CAISO an Affidavit
representing for each of these four Transitioning Generators that the generating
capability and electrical characteristics of each of these four Transitioning Generators
will remain substantially unchanged. In addition, GPC has provided an Owner's notice
that the Scheduling Coordinator responsibilities for these four Transitioning Generators
will switch from PG&E to Calpine Energy Services beginning with the operating day July
1, 2008.
In other words, GPC has completely satisfied all requirements of the CAISO Tariff
necessary for GPC as of July 1, 2008 to commence scheduling and selling the power
from the four Transitioning Generators, including, but not limited to, having in effect a
PGA and a MSA, prior to July 1, 2008, with the only exception being agreement with
respect to the required form of FERC-jurisdictional interconnection arrangements.
PG&E and GPC believe that it is appropriate that PG&E provide the four Transitioning
Generators FERC-jurisdictional interconnection services pursuant to the Generator
Special Facilities Agreement they executed in September 2003 and which FERC
approved in January 2004 ("Geysers Integrated GSFA"). PG&E and GPC have
accordingly revised the Geysers Integrated GSFA to identify the Transitioning
Generators as participants. PG&E shall also accordingly submit to FERC on June 30
such revised Geysers Integrated GSFA and request authority as of July 1, 2008 to
provide FERC-jurisdictional interconnection services to the Transitioning Generators
pursuant to the Geysers Integrated GSFA
PG&E and GPC also understand that the CAISO believes Sections 25.1(d) and 25.1.2.1
of the CAISO Tariff require the CAISO and PG&E to provide FERC-jurisdictional
interconnection services to each the four Transitioning Generators through the execution
of a separate Large Generator Interconnection Agreement ("LGIA") for each
Transitioning Generator. PG&E and GPC also understand that the CAISO presently
intends to protest PG&E's submission of the revised Geysers Integrated GSFA and
concurrently file an unexecuted LGIA for each of the four Transitioning Generators.
While PG&E and GPC and the CAISO currently have not reached agreement on the
appropriate and required form of FERC-jurisdictional interconnection agreement, the
parties do recognize the critical importance to California that the renewable baseload
power from the four Transitioning Generators continue to be generated and delivered to
the CAISO markets and California electric consumers as of July 1 and continuously
thereafter and without interruption.
Accordingly, GPC and PG&E recognize that CAISO is relying on PG&E's provision of
FERC jurisdictional interconnection service pursuant to the revised Geysers Integrated
GSFA for purposes of enabling the four Transitioning Generators to participate fully in
the CAISO markets effective July 1, 2008 and in accordance with all applicable
agreements, including, but not limited to, the revised PGA and MSA. GPC accordingly
agrees that by such actions the CAISO is not waiving, and is specifically reserving, its
full rights under the CAISO Tariff and Section 205 of the Federal Power Act to oppose
the use of the revised Geysers Integrated GSFA for such purposes. On such basis, the
CAISO agrees that GPC shall thereby be authorized as of July 1, and without any
interruption, to schedule and sell power from the four Transitioning Generators into the
CAISO markets as provided for in this letter agreement and that such authority shall
continue until the earlier of FERC accepting for filing PG&E's submission of the revised
Geysers Integrated GSFA or the effectiveness of an LGIA for each of the Transitioning
Generators as submitted by the CAISO and accepted by FERC.
GPC agrees that it will not object to a request by the CAISO for waiver of the sixty (60)
day notice requirement with respect to the CAISO's filing of an unexecuted LGIA for
each of the Transitioning Generators. CAISO agrees that it will not object to PG&E's
request for a waiver of the sixty (60) day notice requirement with respect to PG&E's
June 30 submission of the revised Geysers Integrated GSFA. In the event that FERC
ultimately rules or the parties otherwise agree that PG&E must provide FERCjurisdictional interconnection services for the Transitioning Generators through separate
2
Dennis J. Gilles
Vice-President
The CAISO agrees to allow Geysers Power Company to schedule and sell power from
the four Transitioning Generators as of July 1, without interruption, and in accordance
with the s of his letter agreement.
Dated: June 2008
mers
resident Operations
Jim
Vice
LGIAs, GPC agrees to work with PG&E and the CAISO to execute the necessary LGIAs
as accepted by the FERC.
Please let me or Dean Cooley (707-431-6077) know if you need additional information
with respect to any matter discussed above.
cc: John Anders
Michael Boas
Steve Cassinelli
Steve Rutty
Brig Basho
Art McAuley (PG&E)
Alice Reid (PG&E)
3
CERTIFICATE OF SERVICE
I hereby certify that I have served the foregoing documents upon all of the
entities listed in those documents as receiving service, in accordance with the
requirements of Rule 2010 of the Commission's Rules of Practice and Procedure
(18 C.F.R. § 385.2010).
Dated at Washington, D.C. this 22 nd day of July, 2008.
Bradley R. iliauskas
