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Resolution - Agreement with Electric provider• A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY APPOINTING AUTHORIZED REPRESENTATIVES TO EXECUTE A SUPPLY AGREEMENT WITH A RETAIL ELECTRIC PROVIDER; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. ************************************************************************************* BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY: Section 1: The following officers, officials or employees of the Baytown Area Water Authority are hereby designated as "Authorized Representatives," with full power and authority to execute a supply agreement with a retail electric provider. Signature: Printed Name: Gary Jackson Title: General Manager Tele: (281) 420-6501 Fax: (281) 420-5891 E-mail: gmjackson@baytown.org Signature: Printed Name: Fred Pack Title: Plant Manager Tele: (281) 420-5978 Fax: (281) 420-5322 E-mail: flpack@baytown.org Section 2: This resolution shall take effect immediately from and after its passage by the Board of Directors of the Baytown Area Water Authority. INTRODUCED, READ and PASSED, by the affirmative vote of the Board of Directors of the Baytown Area Water Authority this the 5th day of November, 2003.. ; % ROBERT L. GILLETTE, President ATTEST: W. SMITH, Assistant Secretary APPROVED AS TO FORM: ACIO RAMIREZ, SR., 1- ral Counsel F:\Karen\Files\BAWA\Resolution\Representati ectricUtilities.doc • A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AUTHORIZING AN ELECTRIC SALES AGREEMENT WITH TEXAS GENERAL LAND OFFICE; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. ********************************************************************************* BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY: Section 1: That the Board of Directors of the Baytown Area Water Authority hereby authorizes the General Manager to execute an Electric Sales Agreement with Texas General Land Office. A copy of said agreement is attached hereto,marked Exhibit"A,"and made a part hereof for all intents and purposes. Section 2: This resolution shall take effect immediately from and after its passage by the Board of Directors of the Baytown Area Water Authority. INTRODUCED,READ and PASSED,by the affirmative vote of the Board of Directors of the Baytown Area Water Authority this the 5th day of November, 2003. R BERT L. GILLETTE, President ATTEST: Y . SMITH, Assistant Secretary APPROVED AS TO FORM: ACIO RAMIREZ, SR& eneral Counsel • F:\Karen\Files\BA WA\Resolution\GLOResolution.doc • • TEXAS GENERAL LAND OFFICE ELECTRIC SALES AGREEMENT CUSTOMER: Baytown Area Water Authority 7425 Thompson Road Baytown, Texas 77521 Tel: 281-426-3517 Fax: 281-426-3519 E-mail: tvdoughty@baytown.org SELLER: Texas General Land Office Stephen F. Austin Building 1700 North Congress Avenue Austin, Texas 78701-1495 Tel: 512-463-1871 Fax: 512-475-1543 E-mail: jean.beckett(a,glo.state.tx.us The Electric Sales Agreement, the General Terms And Conditions and all attachments thereof constitute the entire "Agreement" between the parties with respect to the subject matter covered therein and supersedes all prior communications, representations or agreements, verbal or written. No party has made any representations or promised to do any act not contained in this Agreement. Except as expressly provided for herein, this Agreement cannot be modified or amended except in writing signed by both parties. When used with initial capitalization, whether in the singular or the plural, such capitalized terms used in the Agreement shall have the meanings set forth in the Electric Sales Agreement, General Terms and Conditions or attachments thereto. FACILITIES: Customer's Facilities served pursuant to this Agreement are set out on Appendix A, attached hereto. POWER SALES: Customer agrees to purchase and Seller agrees to sell all of Customer's electricity requirements for the facilities listed on Appendix A during the Term stated below. TERM: This Agreement shall become effective on the date it is signed by the Texas Land Commissioner (the "Effective Date"). The Term shall commence on the Switch Date, or, if a switch is not required, on the first meter read on or after January 01, 2004, and shall expire, unless earlier terminated, on the first meter read date after December 31, 2006 for each Facility. This Agreement may be terminated at any time prior to expiration of the Term in the circumstances specified in, and subject to the terms and conditions in the Default and State Funding provisions of the General Terms and Conditions. Upon expiration of this Agreement, if Customer is not switched to a new REP effective upon the end of the Term, then Seller may either, (i) continue to schedule Energy, or cause Energy to be scheduled, as required hereunder at a revised Contract Price based on considerations such as publicly available market information at that time, Seller's supply costs, and Customer's load, or, (ii) to the extent allowed by Law, switch Customer to POLR service. {00007862.5 / 02-0295-8120} 1 GLO NonISD Total Power Model 50 UB Baytown Area Water Authority 103003 CONTRACT CHARGE: For all power deliveries under this contract during the Term, Customer shall pay Seller the Contract Charge described in Appendix B. THE GENERAL TERMS AND CONDITIONS ARE INCORPORATED AS PART OF THIS AGREEMENT. THE PERSON SIGNING THIS AGREEMENT ON BEHALF OF THE CUSTOMER CERTIFIES THAT HE OR SHE IS AUTHORIZED TO LEGALLY OBLIGATE THE CUSTOMER. TEXAS GENERAL LAND OFFICE BAYTOWN AREA WATER AUTHORITY SELLER: CUSTOMER: By: By: Larry L. Laine Name: Title: Chief Clerk/Deputy Land Commissioner Title: Date: Date: SA DIV GC THE PERSON SIGNING THIS AGREEMENT ON BEHALF OF SOLUTIONS CERTIFIES THAT HE OR SHE IS AUTHORIZED TO LEGALLY OBLIGATE SOLUTIONS. Solutions is a signatory to this Agreement for purposes of acknowledging its obligations to accept assignment as provided in the General Terms and Conditions. SOLUTIONS: RELIANT ENERGY SOLUTIONS, LLC By: Name: David Roylance Title: Vice President Date: Attested to by: Name: Title: Secretary {00007862.5 / 02-0295-8120) 2 GLO NonISD Total Power Model 50 UB Baytown Area Water Authority 103003 • • GENERAL TERMS AND CONDITIONS FOR TEXAS GENERAL LAND OFFICE ELECTRIC SALES AGREEMENT Definitions: "Costs" shall mean, with respect to a Party, brokerage fees, commissions and other similar transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace this Agreement and attorneys' fees, if any, incurred in connection with enforcing its rights under this Agreement. "Default Service" means the bundled electric service provided by POLR to Customer if Customer fails to obtain energy from a REP, including Solutions. "Electric Sales Agreement" means the Electric Sales Agreement component of this Agreement. "Force Majeure" means any event or circumstance which, in the exercise of due diligence, is beyond the reasonable control of the Party claiming excuse, and which partially or entirely prevents that Party's performance of its obligations, and shall include acts of God; strikes, lockouts or other industrial disturbances or labor disputes; acts of public enemy, terrorism, wars, blockades, insurrections, civil disturbances and riots, and epidemics; landslides, lightning, earthquakes, fires, storms, hurricanes and threats of hurricanes, floods and washouts; arrests, orders, requests, directives, restraints and requirements of the government and governmental agencies, either federal or state, civil and military (but excluding, with respect to obligations of Seller, any such directive, restraint or requirement imposed by Seller); failure of necessary transmission or distribution facilities that prevents the delivery of electricity hereunder; failure of the Host Utility to deliver electricity, demonstrable outages of computer control equipment and/or databases and telecommunication equipment necessary for transmission or receipt of electronic control signals but only to the extent such outage prevents the delivery of electricity; reductions or interruptions in service as a result of emergency conditions which are necessary to protect generating or transmission facilities or the reliability of transmission facilities, and other causes of a similar nature not reasonably within the control of the Party claiming suspension. "Host Utility" shall mean your electric utility, which owns the power lines and equipment and delivers electricity to the facilities listed on the attached Appendix A. "ISO" means the applicable independent system operator whose duties shall be as set forth by law and implemented by effective regulation. "kilowatt hour" (kWh) shall mean one thousand watts of electric energy or electricity used in one hour. "Losses" means, with respect to a Party, an amount equal to the present value of the economic loss (exclusive of Costs), if any, to such Party resulting from the termination of this Agreement determined as provided in clauses (b) and (c) of "Remedies Upon an Event of Default" in the General Terms and Conditions. "Party" shall mean either Seller or Customer. {00007862.5 / 02-0295-8120} 3 GLO NonISD Total Power Model 50 UB Baytown Area Water Authority 103003 "Parties" shall mean Seller and Customer. "PUC" shall mean the Public Utility Commission of Texas. "PUC Tariff" shall mean the tariff for the Host Utility filed pursuant to PUC Subst. Rules Sect. 25.431 and approved by the PUC on May 18, 2001 or a successor tariff thereto. "PURA" means the Texas Public Utility Regulatory Act, as amended. "REP" or "Retail Electric Provider" means a seller of electricity that is permitted to lawfully sell and schedule delivery, or cause to be scheduled for delivery, of electricity to electric customers located in the State of Texas under PURA after the Choice Date. "Seller" shall mean the Texas General Land Office acting through its representative, Reliant Energy Solutions, LLC. and is sometimes referred to herein as "we" "us" and "our". "Switch Date" means the date that all actions have been taken by the Host Utility and/or ERCOT for Seller to sell and schedule delivery, or cause delivery to be scheduled, of Energy to Customer with respect to each Customer Facility and for Customer to purchase and receive, or cause to be received, such Energy from Seller for such Facilities, including, fully switching Customer to Seller by ERCOT. Scope: Subject to the provisions of this Agreement and any applicable PUC Tariffs, we agree to sell and you agree to purchase your electricity requirements for the Facilities during the term of this Agreement. You hereby authorize Seller to (i) obtain your electricity usage data, payment and credit history from Host Utility, (ii) make nominations to enable us to deliver your electricity, (iii) execute required documents on your behalf necessary to commence service under this Agreement and (iv) perform such other tasks as are necessary to provide your electricity pursuant to this Agreement. Payment: Seller shall directly bill Customer on a monthly basis for its electric service in accordance with the Agreement, utilizing the Host Utility's billing cycle. As soon as practicable after the end of each billing cycle, Seller shall render to Customer a statement setting forth the total number of kWh (rounded to the nearest whole kWh) delivered to Customer during the most recently completed billing cycle. Payment shall be due within thirty (30) days of Seller's statement in accordance with payment instructions set forth in such statement. If Customer should fail to remit the full amount payable when due, interest of one percent (1 %) per month of the outstanding balance will be assessed. If Customer, in good faith, disputes any amount on any statement, Customer will pay to Seller the greater of (a) the undisputed amount, and (b) the amount of the prior month's statement, which latter amount shall not exceed the total amount of the current disputed invoice. Seller promptly shall provide supporting documentation and such other information as Customer may reasonably request for purposes of verifying the disputed amount. Any disputed and withheld amounts, if determined to have been billed properly, will be paid by Customer to Seller promptly together with interest from the original due date at the rate of one percent (1 %) per month. Any amounts improperly billed and collected from Customer shall be credited to Customer against its next bill, together with interest at the rate of one percent (1%) per month. {00007862.5 / 02-0295-8120} 4 GLO NonISD Total Power Model 50 UB Baytown Area Water Authority 103003 • • Metering: Metering of electricity consumed by Customer shall be performed by the Host Utility pursuant to the Host Utility's Tariff. Contract Performance; Representations: Except for the payment of money due hereunder, the Parties' performance of their respective obligations in this Agreement shall be excused for Force Majeure events that prevent such Party's performance. The Party experiencing difficulty due to a Force Majeure event shall promptly notify the other Party, attempt to cure the Force Majeure event with all due diligence and exercise reasonable efforts to mitigate or limit the adverse effects of such Force Majeure event. You represent that all information supplied to us is correct and that you are (i) validly existing, (ii) financially able to continue in business, (iii) unaware of any situation which would alter your financial abilities and have not filed, planned to file or have had filed any bankruptcy proceeding and (iv) authorized to enter into this Agreement. Any portion of this Agreement that may be deemed to be unenforceable or illegal shall not affect the enforceability or legality of the remaining terms and conditions. Seller represents that the electricity being sold to you shall have been delivered to the Host Utility in accordance with applicable law. The foregoing is in lieu of all warranties, expressed or implied, in fact or by law with respect to the electricity delivered hereunder, including but not limited to any warranty as to the merchantability of the electricity or the fitness of the electricity for any particular use or purpose. THIS DOCUMENT REPRESENTS THE ENTIRE AGREEMENT BETWEEN THE PARTIES. THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS EXCLUDING ANY CONFLICT OF LAW RULES THAT WOULD REQUIRE REFERENCE TO THE LAWS OF ANOTHER JURISDICTION. VENUE OF ANY SUIT BROUGHT FOR BREACH OF THIS AGREEMENT IS FIXED IN ANY COURT OF COMPETENT JURISDICTION IN TRAVIS COUNTY, TEXAS; PROVIDED, HOWEVER, THE FOREGOING SHALL NOT BE CONSTRUED AS A WAIVER OF SOVEREIGN IMMUNITY BY SELLER. Liabilities: Seller acknowledges the importance to Customer of a consistent supply of electricity to its Facilities, and Seller will employ all resources reasonably available to it on a commercial basis to provide a consistent supply of electricity, subject to the other terms and conditions of this Agreement. Notwithstanding, Customer acknowledges that Seller exercises no independent control over Host Utility's facilities necessary for delivery of electricity, and Customer recognizes that Seller will have no liability or responsibility for service interruptions, fluctuations, termination or deterioration in the generation of electricity or its transmission or deterioration of service caused by any factor beyond Seller's control, including but not limited to failure of the Host Utility's transmission and/or distribution system that delivers electricity to Customer. LIABILITIES NOT EXCUSED BY REASON OF FORCE MAJEURE OR OTHERWISE SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES. NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY NOR INDIRECT DAMAGES. THERE ARE NO THIRD PARTY BENEFICIARIES TO THIS AGREEMENT. Credit: This Agreement is subject to credit approval by us throughout the Term. You agree to cooperate with us in establishing your creditworthiness, including the disclosure of your billing and payment history with your Host Utility. {00007862.5 / 02-0295-8120) 5 GLO NonISD Total Power Model 50 UB Baytown Area Water Authority 103003 Default: A "Default" shall have occurred if: (i) either Seller or Customer fails to perform any material term or condition of this Agreement, provided that such failure is not caused by a Force Majeure event or cured within thirty (30) days of written notice by the other Party or within another period as may be mutually agreed upon by Seller and Customer, or (ii) Customer voluntarily or involuntarily becomes bankrupt or is forced into bankruptcy. Remedies Upon an Event of Default: (a) In the event of default under this Agreement by Seller or Customer, the other Party may (i) terminate this Agreement ("Termination"), (ii) suspend performance and, to the extent allowed by law, drop Customer to Default Service, or withhold any payments due, and/or (iii) to the extent allowed by law, disconnect, or cause to be disconnected, Customer's facilities from electric service. Termination will be effective upon the earlier of the date of notice of termination or such other date as may be required under law or Host Utility procedures for switching electric suppliers ("Termination Date"). In the event Seller terminates this Agreement due to Customer's default, Customer assumes all obligations to arrange for its electric supply. Upon termination, the non -defaulting Party shall in good faith calculate its actual damages resulting from the termination of this Agreement, in the manner set forth below. (b) If the defaulting Party is Customer, the damages of GLO shall be equal to the sum of the Costs plus the Losses, if any, determined by subtracting (i) the present value of a replacement contract calculated by using the equivalent quantities of energy and delivery points and relevant market prices for the remaining period of the Term either quoted by a bona fide third -party offer or which are reasonably expected to be available in the market under a replacement contract for this Agreement (the "Replacement Contract") from (ii) the present value of this Agreement calculated by using the remaining period of the Term, Customer's Energy Requirements (based on Customer's Benchmark Quantity, as defined in Appendix B, for each of the Customer's facilities) had it not been terminated (the "Terminated Agreement"). (c) If the defaulting party is GLO, the damages of Customer shall be equal to the sum of the Costs plus the Losses, if any, determined by subtracting the present value of the Terminated Agreement from the present value of the Replacement Contract. (d) To ascertain the market prices of a Replacement Contract, the non -defaulting Party may consider, among other valuations, any or all of the settlement prices of NYMEX futures contracts, quotations from leading dealers in energy swap contracts and other bona fide third party offers, all adjusted for the remaining period of the initial term or any renewal terms, as applicable, and differences in transmission. Present value shall be discounted at the US$ Utility BBB2 rate which corresponds to the time period closest to the remaining period of the Term plus 1 percent. It is expressly agreed that a Party shall not be required to enter into a Replacement Contract in order to determine the Termination Payment (as hereafter defined). The non -defaulting Party shall aggregate such Losses and Costs with respect to this Agreement (determined as set forth above) into a single net amount and notify the defaulting Party. If the non -defaulting Party's aggregate Losses and Costs exceed its aggregate gains, the defaulting Party shall, within 30 Business Days of receipt of such notice, pay (as liquidated damages for default hereunder and not as a penalty) the net amount (the "Termination Payment") to the non -defaulting Party, which amount shall bear interest at the rate of one percent (1%) per month from the Termination Date until, but excluding, the date paid. If the non -defaulting Party's aggregate gains exceed its aggregate Losses and Costs, if any, resulting from the termination of this Agreement, the amount of the Termination Payment shall be zero ($0). If the defaulting Party disagrees with the calculation of the Termination Payment, the issue shall be submitted to mediation in accordance with the procedures set forth in these General Terms and Conditions, and the resulting Termination Payment shall be due and payable within 3 Business Days after the resolution of the dispute. {00007862.5 / 02-0295-8120} 6 GLO NonISD Total Power Model 50 UB Baytown Area Water Authority 103003 Assignment to Solutions: Notwithstanding anything to the contrary in this Agreement, if, subsequent to the date of this Agreement, Seller (1) is prohibited by law from selling electricity to Customer, or (2) is in Default under this Agreement, Seller, Customer and Solutions agree that Solutions will sell electricity directly to Customer at the same Contract Price and upon the terms and conditions contained in Solutions' then standard contract for electricity sales, for the remainder of the Term of this Agreement. In this event, Customer shall have incurred no actual damages. Representations of GLO: GLO represents as part of this Agreement that, (1) the services specified above are necessary and essential and are properly within the statutory functions and programs of GLO, (2) the proposed arrangements serve the interest of efficient and economical administration of GLO, and (3) the services, supplies or materials contracted for are not required by TX. CONST. Art. XVI, § 21 to be supplied under contract to the lowest responsible bidder. GLO further represents that it has authority to enter into this Agreement by virtue of the authority granted in TEX. NAT. RES. CODE §52.133 and TEX. UTIL. CODE §35.101 et seq., and that it has reviewed and approved this Agreement pursuant to 31.401, TEX. NAT. RES. CODE and 31 TEX. ADMIN. CODE §8.1 et. seq.. Confidentiality: This Agreement and its terms are confidential except to the extent disclosure is necessary for its implementation or disclosure is otherwise required by law. Notices: Notices and invoices under this Agreement shall be hand delivered or transmitted by the U. S. Mail to the addresses contained in the Electric Sales Agreement. Miscellaneous: At the request of Seller, Customer shall cooperate in obtaining from Host Utility and supplying to Seller the following information: (a) recent and past electric usage including energy and demand, (b) meter readings and data, (c) types of service including rate schedule/tariff, and (d) responses to questions. Seller shall have the right to use Customer's name in customer lists, and any other such literature but shall not disclose any details of this Agreement. Customer shall obtain and maintain any approvals or authorizations Customer may need. Dispute Resolution: If a dispute arises that cannot be resolved to the satisfaction of the Parties, either Party may notify the other Party in writing of the dispute. If the Parties are unable to satisfactorily resolve the dispute within fourteen days of the written notification, Seller may require the issue(s) be mediated. In such event, Seller shall so notify Customer and furnish Customer with the names of three mediators acceptable to Seller. Within ten (10) days of such notice, Customer shall select a mediator from the list provided by Seller and notify Seller. The mediation shall occur within thirty (30) days of such notification. Prior to the mediation, each Party will provide the mediator with a statement of issues to be mediated, along with any other information/releases required by the mediator. Cost of the mediator shall be borne equally by the Parties. Any dispute resolution shall be conducted in accordance with the provisions the Governmental Dispute Resolution Act, TEX. GOV'T CODE § 2009.001 (1999). Prior State Employment: Customer certifies no employee of Customer that has been an employee of GLO within the past year has been or will be materially involved in either the negotiation of or the activities contemplated by this Agreement. State Funding: This Agreement shall not be construed as creating any debt on behalf of the State of Texas and/or GLO in violation of TX. CONST. Art. III, § 49. In compliance with TX CONST. Art VIII, {00007862.5 / 02-0295-8120) 7 GLO NonISD Total Power Model 50 UB Baytown Area Water Authority 103003 • • § 6, it is understood that all obligations of the State hereunder are subject to the availability of State funds. If such funds are not appropriated or become unavailable, this Agreement may be terminated. In that event, the Parties shall be discharged from further obligations, subject to the equitable settlement of their respective interests accrued up to the date of termination. Documentation of Amendments: Except for matters that pursuant to express provisions hereof may be conducted by oral agreement between the Parties, no amendment, modification, or change shall be enforceable unless reduced to writing and executed by the Parties; provided, the Parties agree that amendments to add or delete Facilities may be implemented as follows. Amendments to Appendix A may be formed and effectuated pursuant to an email transmission from Customer to Seller requesting that a Facility be added or deleted and attaching the addition/deletion form to be provided by Seller (the "Email Request") and Seller accepting the Email Request in a responsive email transmission attaching amended Appendix A (the "Email Confirmation"). The Parties shall be legally bound by the amended Appendix A from the time Seller transmits them to Customer, and if Seller does not transmit same, no amendment by email transmission shall be binding upon the Parties. The Email Request and Email Confirmation are adopted by the Parties as the means by which the Parties' amendment of Appendix A may be reduced to writing and the Parties agree not to contest or assert a defense to the validity or enforceability of such amendment entered into in accordance herewith. Each Party represents that each of its representatives charged with implementing the foregoing has authority to effectuate the foregoing amendment type by email transmission. {00007862.5 / 02-0295-81201 8 GLO NonISD Total Power Model 50 UB Baytown Area Water Authority 103003 • • ELECTRIC SALES AGREEMENT APPENDIX A List of facilities by Electric Service Identifier (ESI ID) Service •SA Account Street Address SA City SA State SA Zip Code Host Utility ESI ID Commence- ment Date Expiration Date 1 Baytown Water Authority 7425 THOMPSON BAYTOWN TX 77521 CPE 1008901000158720011100 01/01/04 12/31/06 {00007862.5 / 02-0295-8120} 9 GLO Non1SD Total Power Model 50 UB Baytown Area Water Authority 103003 • Benchmark Quantity (kWh) 01 /01 /2004-01/31 /2004 02/01/2004-02/29/2004 03/01/2004-03/31/2004 04/01/2004-04/30/2004 05/01/2004-05/31/2004 06/01/2004-06/30/2004 07/01 /2004-07/31 /2004 08/01 /2004-08/31 /2004 09/01 /2004-09/3 0/2004 10/01 /2004-10/31 /2004 11/01/2004-11/30/2004 12/01 /2004-12/31 /2004 01 /01 /2005-01 /31 /200 5 02/01/2005-02/28/2005 03/01/2005-03/31/2005 04/01/2005-04/30/2005 05/01/2005-05/31/2005 06/01/2005-06/30/2005 07/01/2005-07/31/2005 08/01/2005-08/31/2005 09/01/2005-09/30/2005 10/01 /2005-10/31 /2005 11 /01 /2005-11 /30/2005 12/01/2005-12/31/2005 01/01/2006-01/31/2006 02/01/2006-02/28/2006 03/01/2006-03/31/2006 04/01/2006-04/30/2006 05/01/2006-05/31/2006 06/01/2006-06/30/2006 07/01 /2006-07/31 /2006 08/01 /2006-08/31 /2006 09/01/2006-09/30/2006 10/01/2006-10/31/2006 {00007862.5 / 02-0295-8120 } 10 GLO NonISD Total Power Model 50 UB Baytown Area Water Authority 103003 Appendix A (Cont.) 548,985 kWh 499,132 kWh 537,255 kWh 519,397 kWh 648,196 kWh 569,901 kWh 561,299 kWh 620,046 kWh 544,950 kWh 541,206 kWh 526,209 kWh 524,939 kWh 552,472 kWh 481,002 kWh 537,705 kWh 520,077 kWh 651,742 kWh 570,096 kWh 561,201 kWh 624,199 kWh 544,251 kWh 538,494 kWh 523,842 kWh 531,635 kWh 552,153 kWh 482,187 kWh 535,707 kWh 520,826 kWh 627,004 kWh 578,199 kWh 562,646 kWh 622,607 kWh 543,597 kWh 537,169 kWh • • 11 /01 /2 006-11 /3 0/2 006 12/01 /2006-12/31 /2006 522,378 kWh 529,716 kWh Settlement Periods Settlement Period 1 02/01/2004-12/31/2004 Settlement Period 2 01/01/2005-12/31/2005 Settlement Period 3 01/01/2006-12/31/2006 Maximum Peak kW Demand 01 /01 /2006-12/31 /2006 01 /01 /2005 -12/31 /2005 01 /01 /2004-12/31 /2004 1,486 kW 1,415 kW 1,348 kW {00007862.5 / 02-0295-8120} 11 GLO NonISD Total Power Model 50 UB Baytown Area Water Authority 103003 • • APPENDIX B TOTAL POWER 2.0 — MODEL 50 UNBUNDLED Seller shall invoice each of the Facilities on a monthly basis. Invoices shall consist of the following components: 1. Contract Charge; plus 2. Settlement Charge (if any); 3. Discretionary Service Fees (if any); 4. Transmission and Distribution Charges; 5. Competition Charges (whether positive or negative); 6. Other charges expressly authorized in this Agreement. The "Contract Charge" is the amount in $US, determined by calculating the product of the Actual Consumption at the Facility and the Contract Price. The "Contract Price" equals $ per kWh consumed at the Customer Facility and includes energy charges, capacity, fuel, Ancillary Charges, and ISO fees; provided, however, that there is no Material Change. The "Settlement Charge" is the amount in $US, determined by calculating the sum of the following items: 1. Excess Energy Adjustment (Settlement Period); plus 2. Energy Deficiency Adjustment (Settlement Period). Customer covenants that it shall promptly notify Seller of any event or circumstance that is likely to cause a significant change to the load at any Customer Facility(s) (a "Notice of Load Change"), including Customer's plans for new construction, facility replacement or equipment modification, planned closures, applications for new construction permits, or new environmental limits. In the event of a Material Change or the receipt by Seller of a Notice of Load Change, Seller and Customer will enter into good faith negotiations to amend the Benchmark Quantity and Contract Price of this Agreement to reflect the incremental effect of the Material Change or the incremental effect of the event or circumstance identified in the Notice of Load Change. If the Parties agree, then Customer's Benchmark Quantity and Contract Price shall be adjusted in accordance with that agreement, and all other terms and conditions of this Agreement shall remain in place and continue to apply to the remaining Facilities. If the Parties are unable to agree within 90 days after the occurrence or determination of an event of Material Change or the receipt by Seller of a Notice of Load Change, the matter shall be submitted for Dispute Resolution in accordance with the terms and procedures set forth in this Agreement. ADDITIONAL CAPITALIZED TERMS NOT DEFINED "Actual Consumption" means the Energy measured or reported by the Host Utility or estimated by Seller for the Customer Facility for a month for scalar meters and for each hour for IDR meters. "Ancillary Charges" means, for each Customer Facility, all charges assessed by ERCOT for services necessary to maintain reliable operation of the transmission system in order to support the transmission of Energy from the source of generation to the points of demand. "Competition Charges" means, for each Customer Facility, any or all of the following charges: competition transition charges; transition charges as defined in the PURA; excess mitigation credits; and/or substantially similar charges associated with, or resulting from, the opening of the electric market in the State of Texas to REPs, including the recovery of stranded costs as defined by the PURA and increases in transmission and distribution rates charged by the Host Utility that result from, or are otherwise attributable to, the redirection of depreciation expenses. "Discretionary Service Fees" means all non -routine deposits, connection fees, metering charges, installation costs for equipment to maintain a Power Factor of not less than 95% lagging at each Customer Facility meter, assessments by the Host Utility in respect of any Power Factor at any Customer Facility meter, or any similar amounts that are assessed by and payable to the Host Utility related to the purchase and installation of meters and associated {00007862.5 / 02-0295-8120} 12 GLO NonISD Total Power Model 50 UB Baytown Area Water Authority 103003 • • equipment and the Customer's use of such equipment to establish or maintain electric service at a Customer Facility or to maintain Host Utility system requirements, or other charges for equipment or services requested by Customer or required by the Host Utility. "Energy Deficiency" means the deficit in Customer's aggregated Actual Consumption for all Facilities for the previous Settlement Period as measured against the Settlement Period Benchmark Quantity. Energy Deficiency is calculated by subtracting the aggregated Actual Consumption for a Settlement Period from 90% of the Settlement Period Benchmark Quantity for that period. If the calculation results in a negative number, the Energy Deficiency shall be zero. "Energy Deficiency Adjustment" means the charge or credit calculated each Settlement Period for the Energy Deficiency. The Energy Deficiency Adjustment equals Energy Deficiency multiplied by (the Contract Price minus the average of the Market Clearing Prices of Energy for each Market Day in the Settlement Period, weighted by the proportion of Actual Consumption occurring in each ERCOT congestion zone during the Settlement Period). If the result is a positive number, then the Energy Deficiency Adjustment will be a charge to Customer; if the result is a negative number, then the Energy Deficiency Adjustment will be a credit to Customer. The Energy Deficiency Adjustment is calculated following the Settlement Period in which the Energy was consumed and allocated on a pro- rata basis for each Customer Facility. The allocation will be based on Actual Consumption, with the numerator being the Actual Consumption for an individual Customer Facility and the denominator being the aggregate Actual Consumption for all Facilities. "Excess Energy" means the excess in Customer's aggregated total Actual Consumption for all Facilities for the previous Settlement Period as measured against the Settlement Period Benchmark Quantity. Excess Energy is calculated by subtracting 110% of the Settlement Period Benchmark Quantity from the aggregated Actual Consumption for the Settlement Period. If the calculation results in a negative number, the Excess Energy shall be zero. "Excess Energy Adjustment" means the charge or credit calculated each Settlement Period for the Excess Energy. The Excess Energy Adjustment equals Excess Energy multiplied by (the average of the On -Peak Market Prices for each Market Day in the Settlement Period, weighted by the proportion of Actual Consumption occurring in each ERCOT congestion zone during the Settlement Period, minus the Contract Price). If the result is a positive number, then the Excess Energy Adjustment will be a charge to Customer; if the result is a negative number, then the Excess Energy Adjustment will be a credit to Customer. The Excess Energy Adjustment is calculated following the Settlement Period in which the Energy was consumed and allocated on a prorata basis for each Customer Facility. The allocation will be based on Actual Consumption, with the numerator being the Actual Consumption for an individual Customer Facility and the denominator being the aggregate Actual Consumption for all Facilities. "Market Clearing Price of Energy (MCPE)" means the ERCOT market clearing price of Energy for a 15-minute ERCOT settlement interval associated with an ERCOT congestion zone. "Market Day" means Monday through Friday excluding ERCOT holidays. "Material Change" means (a) for any two consecutive months Customer's metered consumption for each month is less than 75% of the Benchmark Quantity or is greater than 125% of the Benchmark Quantity, or (b) for any two consecutive months Customer's Monthly Demand exceeds the Maximum Peak kW Demand. "Maximum Peak kW Demand" means 105% of the expected and agreed upon highest kW for the aggregate load of all Facilities under this Agreement. The Maximum Peak kW Demand is specified in the Exhibit including Benchmark Quantity. "Monthly Demand" means the highest KW for any 60-minute interval in a month determined from the aggregate load of all Facilities. "On -Peak Market Price" means the Market Clearing Price of Energy for hours ending 0700 through 2200. 100007862.5 / 02-0295-8120} 13 GLO NonISD Total Power Model 50 UB Baytown Area Water Authority 103003 "Settlement Period" means the period(s) of time that Seller and Customer agree to measure Actual Consumption and compare to Benchmark Quantity to effect settlement, as more specifically described in the Exhibit including Benchmark Quantity. "Settlement Period Benchmark Quantity" means the sum of the Benchmark Quantities specified for each Settlement Period for the aggregate of all Facilities. The Benchmark Quantities may be subject to change in the event of a Material Change. "Transmission and Distribution Charges" means, for each Customer Facility, all transmission and distribution charges and other cost recovery charges and fees outlined in the Host Utility's tariff and billed to Seller for Host Utility's services to deliver Energy to the applicable Customer Facility; provided, such charges and fees will not include any Competition Charges. {00007862.5 / 02-0295-8120} 14 GLO NonISD Total Power Model 50 UB Baytown Area Water Authority 103003