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HomeMy WebLinkAbout2010-031 Contract - BPA 09PB-13002 Rev 1 Exhibit C ~~<NT OF" ~ . (li ~~) ~1ES(ftW Department of Energy b~~: ~cxzhy W', cJleA;f10. Bonneville Power Administration P.O. Box 3621 Portland, Oregon 97208-3621 POWER SERVICES February 24, 2010 In reply refer to: PSW-6 Mr. Scott Johnson Interim Director of Electric Utilities City of Ashland 90 North Mountain Avenue Ashland, OR 97520 Dear Scott: Enclosed is an original revision to Exhibit C of the City of Ashland's (Ashland) Power Sales Agreement Contract No. 09PB-13002 (Agreement). The changes in the attached revision are necessary to capture the contract provisions relating to Ashland's Above-RHWM elections made in November 2009. Exhibit C Revision No.1 reflects Ashland's Firm Requirements Power purchase obligation at Tier 2 Rates for the first Purchase Period. Pursuant to the Agreement, this exhibit revision is unilateral and does not require a signature. The enclosed Revision No.1 to Exhibit C is Ashland's original copy to keep for its records. Please feel free to contact me at 503.230.4055, if you have any questions or concerns. Sincerely, ~5'7 / ~ Kevin S. Farleigh Account Executive Enclosures (I) Revision No.1, Exhibit C PURCHASE OBLIGATIONS Effective March 31, 2010 This revision: (1) updates section 2 to reflect Ashland's elections Tegarding service to its Above-RHWM Load for the first Purchase Period (FY 2012 - FY 2014) and for the FY 2012- 2013 Rate Period, and (2) incorporates the Exhibit C revisions fTOm Amendment No.1 to the Agreement. 1. FIRM REQUIREMENTS POWER AT TIER 1 RATES The portion of Ashland's purchase obligation that is priced at Tier 1 Rates is established in section 8.1(1) of the body of this Agreement. 2. FIRM REQUIREMENTS POWER AT TIER 2 RATES 2.1 Notice to Purchase Zero Amounts at Tier 2 Rates If Ashland elects not to pUTchase Firm Requirements Power at Tier 2 Rates for a Purchase Period, then by March 31 immediately following the corresponding Notice Deadline, BPA shall update this exhibit to indicate such election by adding an ''X'' to the applicable cell in the following table. Such election means that for the Purchase Period specified below, Ashland shall: (1) purchase zero amounts of Firm Requirements Power at Tier 2 Rates, and (2) serve all of its Above-RHWM Load that is greater than or equal to 8,760 megawatt-hours with power other than Firm Requirements Power. Ashland may serve its Above-RHWM Load that is less than 8,760 megawatt-hours with power other than Firm Requirements Power. Zero Tier 2 Purchase Period FY 2012 - FY 2014 FY 2015 - FY 2019 FY 2020 - FY 2024 FY 2025 - FY 2028 2.2 Tier 2 Load Growth Rate 2.2.1 First Election Opportunity If Ashland elects by the first Notice Deadline (November 1, 2009) to purchase Firm Requirements Power at Tier 2 Load Growth Rates starting October 1, 2011, then in its election Ashland shall elect one of the three Tier 2 Load Growth Rate options listed in section 2.2.3 of this exhibit. If Ashland elects Option 3, then Ashland shall state the amounts to be listed in the table in section 2.2.3.3 of this exhibit and Ashland's Tier 2 Short-Term Rate election pursuant to section 2.4.1 of this exhibit. BPA shall amend this exhibit by March 31, 2010, to indicate Ashland's election by adding an ''X'' to the "1" Notice Deadline" box next to the applicable option below. If Ashland does not elect to purchase Firm Requirements Power at Tier 2 Load Growth Rates by the first Notice Deadline, then Ashland shall not have the 09PB-13002, Ashland 1 of 10 right to purchase Firm Requirements Power at Tier 2 Load Growth Rates during the first PUTchase Period. 2.2.2 Second'Election Opportunity 2.2.2.1 If Ashland does not elect to purchase Finn Requirements Power at Tier 2 Load Growth Rates starting the first Purchase Period, then Ashland may purchase Firm Requirements Power at Tier 2 Load Growth Rates starting October 1, 2014, pTOvided: (1) any elections of Tier 2 Rate alternatives or additions of New Resources under this Agreement that extend beyond the initial PUTchase Period shall continue to apply for their term, and (2) the Tier 2 Load Growth Rate applicable under this election may be different than the Tier 2 Load Growth Rate that was available dUTing the first Purchase Period. 2.2.2.2 If Ashland elects by the second Notice Deadline (September 30,2011) to purchase Finn Requirements Power at Tier 2 Load Growth Rates, then in its election Ashland shall elect one of the three Tier 2 Load Growth Rate options listed in section 2.2.3 of this exhibit. In such case, Ashland shall purchase Firm Requirements Power at Tier 2 Load Growth Rates under such elected option starting October 1, 2014. 2.2.2.3 If Ashland elects Option 3, described in section 2.2.3.3 of this exhibit, then Ashland shall state the amounts to be listed in the table in section 2.2.3.3 of this exhibit and Ashland's Tier 2 Short-Term Rate election pUTsuant to section 2.4.1 of this exhibit. If Ashland has prior elections of rate alternatives or resource additions that extend beyond the first Purchase Period, then Ashland shall not have the right to elect Options 1 or 2 below. In such case, the amounts listed in the table in section 2.2.3.3 of this exhibit shall not be less than the sum of Ashland's prior elections for each year. 2.2.2.4 BPA shall amend this exhibit by March 31, 2012, to indicate Ashland's election by adding an "X" to the "2nd Notice Deadline" box next to the applicable option below. If Ashland does not elect to purchase Firm Requirements Power at Tier 2 Load Growth Rates by the second Notice Deadline, then Ashland shall not purchase Firm Requirements Power at Tier 2 Load Growth Rates for the term of this Agreement. 09PB-13002, Ashland Revision No.1, Exhibit C, Purchase Obligations 2 of 10 1" Notice Deadline 2nd Notice Deadline 1" Notice Deadline 2nd Notice Deadline 1" Notice Deadline 2nd Notice Deadline 2.2.3 Tier 2 Load Growth Rate Options 02.2.3.1 Option 1. Full Tier 2 Load Growth Rate o If Ashland elects this option, then Ashland shall purchase Firm Requirements Power at Tier 2 Load Growth Rates for all of Ashland's Above-RHWM Load. B 2.2.3.2 Option 2 - Shared Rate Plan (1) Obligation If Ashland elects this option, provided that BPA determines Ashland qualifies under the limit for the Shared Rate Plan as established in section 7 of the TRM, then Ashland shall pay rates under the Shared Rate Plan for Firm Requirements Power purchased under this AgTeement. If BPA determines Ashland does not qualify under such limit, then Ashland shall not have the right to elect this option and Ashland shall purchase Firm Requirements Power at Tier 2 Load Growth Rates undeT Option 1 as established in section 2.2.3.1 ofthis exhibit. For the second election opportunity stated in section 2.2.2 of this exhibit, availability under the limit for the Shared Rate Plan established in section 7 of the TRM shall equal such limit minus the amounts used by otheT customers who elected this Option 2 by the first Notice Deadline. (2) Terminating Participation Ashland may terminate participation in the Shared Rate Plan by providing BPA notice in writing by MaTch 31 of a Forecast Year. In such case, the change shall be effective the next Rate Period. If Ashland stops participation in the Shared Rate Plan, then Ashland shall not have the right to resume participation. Ashland shall continue to purchase Firm Requirements Power priced at Tier 2 Load Growth Rates for all of Ashland's Above-RHWM Load. D 2.2.3.3 Option 3 . Partial Tier 2 Load Growth Rate o If Ashland elects this option, then Ashland shall purchase Firm Requirements Power at Tier 2 Load Growth Rates for all of Ashland's Above-RHWM Load minus the amounts stated in the table below that Ashland elects are not subject to Tier 2 Load Growth Rates. Ashland shall establish such amounts at the time Ashland elects this option and such amounts shall not change for the term of this AgTeement. Ashland may serve such amounts with Dedicated Resources or with FiTm Requirements Power purchased at other Tier 2 Rates. BPA 09PB-13002, Ashland Revision No.1, Exhibit C, Purchase Obligations 3 of 10 shall update the table below by March 31 immediately following Ashland's election of this option. Load Amounts Not Sub'ect To Tier 2 Load Growth Rates (aMW) Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 Annual aMW Fiscal Year 2021 2022 2023 2024 2025 2026 2027 2028 Annual aMW Note: Fill in the tahle above with annual Average Megawatts rounded to three decimal places. 2.2.4 Modification to Tier 2 Load Growth Rate Election 2.2.4.1 Notice . Ashland shall have the right to stop purchasing Firm Requirements Power at Tier 2 Load Growth Rates effective the upcoming Rate Period, except for the amount established in section 2.2.4.2 of this exhibit. If Ashland chooses to modify its purchases at Tier 2 Load Growth Rates in this manner, then Ashland shall notify BPA in writing by October 31 of a Rate Case Year. 2.2.4.2 Continued Purchase Amount For the remaining teTm ofthis Agreement, Ashland shall continue to purchase at Tier 2 Load Growth Rates the amount afFirm Requirements Power that Ashland purchased at Tier 2 Load Growth Rates the year before the modification described above is effective. 2.2.4.3 Obligation to Apply Dedicated Resources If Ashland provides notice to modify its purchases at Tier 2 Load Growth Rates under section 2.2.4.1 of this exhibit, then for the remainder of the effective Purchase Period and all of the next Purchase Period, Ashland shall apply Dedicated Resources to serve all of its Above-RHWM Load that is in excess of the sum of all Tier 2 commitments. 2.2.4.4 Charges to Modify Tier 2 Load Growth Rate Purchase Ashland shall be liable for payment of any costs that apply as a result of Ashland modifying its Tier 2 Load Growth Rate purchase obligation under this section 2.2.4. Such costs shall be those that BPA: (1) is obligated to pay and will not recover from Ashland at Tier 2 Load Growth Rates as a result of the modification, and (2) is unable to recover through other transactions. BPA shall determine such costs, if any, during the 7(i) Process that follows Ashland's notice. If BPA determines that Ashland owes payment for such costs, then Ashland shall pay the entire amount to BPA in no more than 24 equal monthly amounts starting the first month of the upcoming Rate Period. In no event shall BPA make payment to Ashland as a result of Ashland modifying its Tier 2 Load Growth Rate purchase obligation undeT this section 2.2.4. 09PB-13002, Ashland Revision No.1, Exhibit C, Purchase Obligations 4 of 10 2.2.4.5 Exhibit Update By March 31 following Ashland's notice, BPA shall indicate Ashland's election to modify its Tier 2 Load Growth Rate purchase by filling in the table below. As established in section 2.2.4.2 of this exhibit, Ashland shall continue to purchase the following amounts of Firm Requirements Power at Tier 2 Load GTOwth Rates: Continuinl! Tier 2 Load Growth Rates Purchase Obli<tation Fiscal Year 2012 2013 2014 2015 2016 aMW Fiscal Year 2017 2018 2019 2020 2021 aMW Fiscal Year 2022 2023 2024 2025 2026 aMW Fiscal.Year 2027 2028 aMW Note: Fill in the table above with annual Average Megawatts, rounded to three decimal places, for each year that follows Ashland's modification be.nnnin!! with the effective year of modification 2.3 Tier 2 Vintage Rates If Ashland elects Option lor 2 in section 2.2.3 of this exhibit, then this section shall not apply. Otherwise: 2.3.1 Election Process 2.3.1.1 Right to Convert Subject to the amounts of power BPA makes available at one or more Tier 2 Vintage Rates, Ashland shall have the right to convert some or all of the amounts of Firm Requirements Power it has elected to purchase at Tier 2 Short-Term Rates, as stated in section 2.4 of this exhibit, to an equal purchase amount at Tier 2 Vintage Rates. 2.3.1.2 Statement of Intent If Ashland elects to purchase Firm Requirements Power fTOm BPA at Tier 2 Vintage Rates, then Ashland shall sign a Statement of Intent offered by BPA. "Statement ofIntent" means a statement prepared by BPA and signed by Ashland that describes the approach and cost stTUcture that will be used for a specific Tier 2 Cost Pool. If BP A establishes a Tier 2 Cost Pool for a Tier 2 Vintage Rate consistent with the Statement ofIntent, then Ashland agrees to have the portion of its Tier 2 Rate power purchase specified in the Statement ofIntent priced at that rate. IfBPA is unable to establish the Tier 2 Cost Pool for the specific TieT 2 Vintage Rate, then Ashland agrees to purchase such amount of Firm 09PB-13002, Ashland Revision No.1, Exhibit C, Purchase Obligations 50f1O Requirements Power at Tier 2 Short-Term Rates, except as . stated in section 2.3.1.5 of this exhibit. 2.3.1.3 Insufficient Availability The Statement of Intent shall include procedures to allocate between competing applications for a specific Tier 2 Cost Pool if requests exceed amounts available. 2.3.1.4 Conversion Costs Upon establishment of a TieT 2 Vintage Rate for which Ashland signed a Statement ofIntent, Ashland shall be liable for payment of any outstanding costs under Tier 2 Short- Term Rates that apply to Ashland. Such costs shall be those that BPA: (1) is obligated to pay and will not recover from Ashland under TieT 2 Short-Term Rates as a result of the conversion, and (2) is unable to recover through other transactions. BPA shall determine such costs, if any, in the fiTst 7(i) Process that establishes the applicable Tier 2 Vintage Rate. In no event shall BPA make payment to Ashland as a result of Ashland's conversion of purchase amounts at Tier 2 Short-Term Rates to purchase amounts at Tier 2 Vintage Rates. 2.3.1.5 Additional Offerings In addition to the right to convert to Tier 2 Vintage Rates established in section 2.3.1.1 of this exhibit, Ashland may have the opportunity to purchase Firm Requirements Power at Tier 2 Vintage Rates regardless of whether Ashland is purchasing at Tier 2 Short-Term Rates if: (1) BPA determines, in its sole discretion, that all requests for seTVice at TieT 2 Vintage Rates by purchasers of Firm Requirements Power at Tier 2 Short-Term Rates are able to be satisfied, and (2) BPA determines, in its sole discretion, to offer Ashland a Statement of Intent that would provide Ashland the opportunity to purchase Firm Requirements at Tier 2 Vintage Rates.' If Ashland signs a Statement of Intent offered by BPA pursuant to this section 2.3.1.5, and ifBPA is unable to establish the Tier 2 Cost Pool for the applicable Tier 2 Vintage Rate, then Ashland's current elections for seTVice to its Above-RHWM Load shall continue to apply. Except as provided in this section 2.3.1, any election by Ashland to purchase Firm Requirements Power at Tier 2 09PB-13002, Ashland Revision No.1, Exhibit C, Purchase Obligations 6 of 10 Vintage Rates shall not relieve Ashland of any obligation to purchase Firm Requirements Power at another Tier 2 Rate. 2.3.1.6 Exhibit Updates By SeptembeT 15 immediately following the establishment of a Tier 2 Vintage Rate for which Ashland signed a Statement of Intent, BPA shall amend this exhibit to show Ashland's Tier 2 Vintage Rate purchases and remove Ashland's Tier 2 Short-Term Rate purchases by the amounts purchased at the Tier 2 Vintage Rate, if Ashland is converting to the Tier 2 Vintage Rate from the Tier 2 Short-Term Rate. BPA shall insert applicable tables, terms, and conditions for each Tier 2 Vintage Rate in section 2.3.2 of this exhibit. 2.3.2 Vintage Rate Elections Ashland has no Tier 2 Vintage Rate elections at this time. 2.4 Tier 2 Short-Tenn Rate If Ashland elects Option 1 or 2 in section 2.2.3 of this exhibit, then this section shall not apply. Otherwise: 2.4.1 Short-Tenn Rate Purchases Unless Ashland elects, in section 2.1 of this exhibit, not to purchase FiTm Requirements Power at Tier 2 Rates for a given Purchase Period, by each Notice Deadline Ashland shall elect in writing either Alternative A or B below for the duration of the corresponding Purchase Period. If Ashland elects Alternative A and elects to apply Dedicated Resources to serve its Above-RHWM Load, then Ashland shall state the amounts to be listed in the table in section 2.4.1.1(2) of this exhibit. If Ashland elects Alternative B, then Ashland shall state the amounts to be listed in the table in section 2.4.1.3 of this exhibit. By March 31 immediately following each Notice Deadline, BPA shall update the tables in this section 2.4.1 to show Ashland's Tier 2 Short- Term Rate election for the corresponding Purchase Period. 2.4.1.1 Alternative A - Customer Planned Load Not Otherwise Served If Ashland elects this alternative, then Ashland shall purchase Firm Requirements Power priced at Tier 2 Short- Term Rates to serve all of Ashland's Above-RHWM Load that Ashland has not otherwise agreed to serve with: (1) Firm RequiTements Power purchased at other Tier 2 Rates, or (2) the amounts of Dedicated Resources, stated in the table below, that Ashland shall apply during the Purchase Period to serve its Above-RHWM Load. If Ashland purchases power at Tier 2 Load Growth 09PB-13002, Ashland Revision No.1, Exhibit C, Purchase Obligations 7 of 10 Rates, then these Dedicated Resource amounts shall not exceed the amounts stated in the table in section 2.2.3.3 ofthis exhibit. Purchase Period Dedicated Resource Elections Fiscal Year 2012 2013 2014 2015 2016 Election 0.000 0.000 0.000 Fiscal Year 2017 2018 2019 2020 2021 Election Fiscal Year 2022 2023 2024 2025 2026 Election Fiscal Year 2027 2028 Election Note: Insert amounts in Average Megawatts rounded to three decimal places for each year of the applicable Purchase Period. 2.4.1.2 Alternative B - Limited Amounts If Ashland elects this alternative, then Ashland shall purchase Firm Requirements Power at TieT 2 Short-Term Rates to serve Ashland's Above-RHWM Load that Ashland has not otherwise agreed to serve with Firm Requirements Power purchased at other Tier 2 Rates; provided however, that amounts purchased at Tier 2 Short-Term Rates shall not exceed the amounts (including zero amounts) stated in the table in section 2.4.1.3 of this exhibit. Ashland agrees to serve any of its Temaining Above-RHWM Load with power other than Firm Requirements Power. 2.4.1.3 Tier 2 Short-Tenn Rate Elections If Ashland elects Alternative A above, then BPA shall indicate that election by adding an "X" to the table below for each year of the applicable PUTchase Period. If Ashland elects Alternative B above, then BPA shall indicate that election by adding amounts (in AveTage Megawatts rounded to three decimal places) to the table below for each year of the applicable Purchase Period. Tier 2 Short-Term Rate Table Fiscal Year 2012 2013 2014 2015 2016 Election X X X Fiscal Year 2017 2018 2019 2020 2021 Election Fiscal Year 2022 2023 2024 2025 2026 Election Fiscal Year 2027 2028 Election 09PB-13002, Ashland Revision No.1, Exhibit C, Purchase Obligations 8 of 10 2.4.2 Right to Reduce Tier 2 Short-Term Rate Purchase Amounts 2.4.2.1 Notice If Ashland notifies BPA in writing by October 31 of a Rate Case Year, then Ashland may reduce, in equal amounts for all hours of the year, some or all of the amounts of Finn Requirements Power that Ashland is obligated to purchase at Tier 2 Short-Term Rates. The reduction may take effect in either year of the upcoming Rate Period and shall be effective for the remaining duration of the applicable Purchase Period(s). In its written notice, AShland shall state the amount of the reduction and the date the reduction. shall take effect. Ashland shall replace all Teduced Tier 2 Short-Term Rate pUTchase amounts with amounts of Dedicated Resources applied pursuant to section 3.3 of the body ofthis Agreement. 2.4.2.2 Charges to Reduce Purchase Amounts Ashland shall be liable for payment of any costs that apply as a result of Ashland reducing, under section 2.4.2.1 of this exhibit, the amounts of Firm Requirements Power that Ashland is obligated to purchase at Tier 2 Short-Tenn Rates. Such costs shall be those that BPA: (1) is obligated to pay and will not recover from Ashland under Tier 2 Short- Tenn Rates as a result of the reduction, and (2) is unable to recoveT through other transactions. BPA shall determine such costs, if any, during the 7(i) Process that follows Ashland's notice. IfBPA determines that Ashland owes payment for such costs, then Ashland shall pay the entire amount to BPA in no more than 24 equal monthly amounts starting the first month of the upcoming Rate Period. In no event shall BPA make payment to Ashland as a result of Ashland reducing the amounts of Firm Requirements Power that Ashland is obligated to pUTchase at Tier 2 Short-Term Rates. 2.4.2.3 Exhibit Updates By March 31 following Ashland's notice, BPA shall revise this exhibit and Exhibit A to show Ashland's reduced Tier 2 Short-Term Rate purchase amounts and Ashland's Dedicated Resource additions. 2.5 Amounts of Power to be Billed at Tier 2 Rates 2.5.1 Treatment for FY 2012 - FY 2013 By March 31,2010, BPA shall update the table in section 2.5.2 of this exhibit, consistent with Ashland's elections, with amounts of Finn Requirements Power which Ashland shall purchase at applicable Tier 2 Rates for the FY 2012 - FY 2013 Rate Period. 09PB-13002, Ashland Revision No.1, Exhibit C, Purchase Obligations 9 of 10 2.5.2 Amounts of Power for Subsequent Rate Periods For each Rate Period afteT the FY 2012 - FY 2013 Rate Period, BPA shall establish for the upcoming Rate Period consistent with Ashland's elections: (1) the planned annual average amounts of Firm Requirements Power which Ashland shall purchase at applicable Tier 2 Rates, and (2) any Temarketed Tier 2 Rate purchase amounts in accordance with section 10 of the body ofthis Agreement. By March 31, 2013, and by March 31 of each Rate Case YeaT thereafter, BPA shall update the table below with such amounts for each year of the upcoming Rate Period. Annual Amounts Priced at Tier 2 Rates (aMW) Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 Tier 2 Short-Term 0.000 0.000 Rate Remarketed Amounts Fiscal Year 2021 2022 2023 2024 2025 2026 2027 2028 No Tier 2 at this time Remarketed Amounts Notes: 1. List each applicable Tier 2 rate in the table above. For the first applicable Tier 2 rate replace No Tier 2 at this time with the name of the applicable Tier 2 rate. For each additional Tier 2 rate, add a new row above the Remarketed Amounts row. If Ashland elects not to purchase at Tier 2 rates, then leave No Tier 2 at this time in the table and leave the remainder of the table blank. 2. Fill in the table above with annual Averal(e Mel(awatts rounded to three decimal nlaces. 3. MONTHLY PF RATES Applicable monthly TieT 1 and Tier 2 Rates are specified in BPA Wholesale Power Rate Schedules and GRSPs. 4. REVISIONS BPA shall revise this exhibit to reflect Ashland's elections regarding service to its Above-RHWM Load and BPA's determinations relevant to this exhibit and made in accordance with this Agreement. (PSW ow: \Power\Contract \ Customer \Ashland \ 13002 \ 13002_ExhC Rev1_Final.DOC) 02116/10 09PB-13002, Ashland Revision No.1, Exhibit C, Purchase Obligations 10 of 10