Florida Public Service Commission native order document 01118-2024

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FILED 3/12/2024 DOCUMENT NO. 01118-2024 FPSC - COMMISSION CLERK
BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION
In re: Petition for approval of revised purchased power agreement with Pasco County, by Tampa Electric Company.
DOCKET NO. 20230129-EI ORDER NO. PSC-2024-0064-PAA-EI ISSUED: March 12, 2024
The following Commissioners participated in the disposition of this matter:
MIKE LA ROSA, Chairman ART GRAHAM GARY F. CLARK ANDREW GILES FAY GABRIELLA PASSIDOMO
NOTICE OF PROPOSED AGENCY ACTION ORDER APPROVING TAMPA ELECTRIC COMPANY'S PETITION OF REVISED PURCHASE POWER AGREEMENT WITH PASCO COUNTY
BY THE COMMISSION:
NOTICE is hereby given by the Florida Public Service Commission that the action discussed herein is preliminary in nature and will become final unless a person whose interests are substantially affected files a petition for a formal proceeding, pursuant to Rule 25-22.029, Florida Administrative Code (F.A.C.).
Background
On April 4, 2023, the Florida Public Service Commission (Commission) approved Tampa Electric Company's (TECO or Company) Purchase Power Agreement (PPA or Contract) for the Pasco County (Pasco) Waste-To-Energy Facility (WTE Facility), with restrictions on TECO's cost recovery for transmission costs and renewable energy credits (RECs).1 The PPA was based on Pasco owning and operating a WTE Facility, located in Spring Hill, Florida. Pasco's WTE Facility is within Duke Energy Florida, LLC's (DEF's) service territory and would require access to DEF's transmission capacity to deliver electricity to TECO. The transmission costs disallowed for cost recovery were related to a contract provision that could have shifted some of transmission costs from Pasco to TECO above a set threshold. The REC costs were not approved for cost recovery at that time, but TECO could still purchase them, provided it demonstrated the need for any purchases in a future proceeding. After our decision, the PPA was canceled by both parties, pursuant to the terms of the PPA, because cost recovery of all terms was not granted.
1See Order No. PSC-2023-0132-PAA-EI, issued April 18, 2023, in Docket No. 20220186-EI, In re: Petition for approval of purchase power agreement between Tampa Electric Company and Pasco County.

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On November 17, 2023, TECO filed a petition for approval of a negotiated PPA for the
purchase of firm capacity and energy with Pasco. A copy of the PPA is attached (Attachment A).
Pasco proposes to sell 18 megawatts (MW) of firm capacity and energy for ten years, from
January 1, 2025, through December 31, 2034. Unlike the prior PPA, this PPA does not contain a
transmission cost sharing threshold, and includes RECs as part of the initial energy purchase.
We have jurisdiction over this matter pursuant to Sections 366.051, 366.81, and 366.91,
Florida Statutes (F.S.).
Review and Decision
Pasco proposes to sell 18 MW of firm capacity and energy from its WTE Facility to
TECO for ten years from January 1, 2025, through December 31, 2034. The WTE Facility uses
municipal solid waste as its primary fuel, a source of renewable energy pursuant to Section
366.91(2)(b), F.S. The price structure in the Contract has no capacity payment, but an “all-in”
confidential dollars per megawatt-hour (MWh) energy rate payment that escalates annually.
Rule 25-17.0832(3), Florida Administrative Code (F.A.C.), states that in reviewing negotiated
firm capacity and energy contracts for the purposes of cost recovery, we shall consider factors
relating to the contract that would impact the utility’s customers, including: need for power by
the purchasing utility and/or Florida utilities statewide, the cost-effectiveness of the contract,
security provisions for early payment, and performance guarantees associated with the facility.
These factors are evaluated below.
Need For Power
Based on TECO’s 2023 Ten-Year Site Plan (TYSP), the next planned capacity addition
that could be avoided is an 18.7 MW natural gas-fired reciprocating engine with an in-service
date of January 2030. Therefore, the PPA’s firm capacity of 18 MW would help avoid or defer
the construction of future generation for the duration of the PPA until 2035. In addition to firm
capacity, the PPA would improve the Company’s fuel diversity by increasing the contribution of
renewable resources. TECO is forecast to rely upon natural gas for up to 82.8 percent of its
energy during the Contract period, according to its 2023 TYSP. Therefore, we find the proposed
PPA will enhance TECO’s system reliability and increase its fuel diversity.

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Cost-Effectiveness
Rule 25-17.0832(3)(b), F.A.C., states in part that we should consider whether the
cumulative present worth of a payment to the Qualifying Facility (QF) is not greater than the
cumulative present worth of purchasing utility’s avoided cost of capacity and energy. This cost-
effectiveness evaluation was based on the differential between TECO’s internal system costs
versus the proposed payments under the PPA in two scenarios, with and without the PPA. In
response to our data request, TECO provided its cost-effectiveness analysis that estimated the net
cumulative benefits of the PPA at $7.3 million on an NPV basis. 2 System savings are primarily
associated with reduced fuel and fuel transportation costs, in addition to some deferred
generation costs. Using the base fuel and emission price forecasts, the PPA is anticipated to be
cost-effective on a cumulative basis for every year of the period, starting with the first year. The
Company also performed high and low fuel sensitivities, in which the PPA was also cost-
effective on a cumulative NPV basis over the term of the Contract. In addition, TECO will
receive any Renewable Energy Credits (RECs) generated by the WTE Facility from its
associated energy at no cost. In response to our data request, TECO states if it sells any of the
RECs it will pass on any revenue to ratepayers.3 These potential revenues are not included in the
economic evaluation of the PPA.
The PPA includes fixed energy rate payment, and therefore the rates are not allowed to
float with changes to TECO’s system fuel cost. This allocates the risk of fuel price fluctuation
from the Pasco WTE Facility to TECO’s ratepayers. For example, if fuel costs do not escalate as
quickly as projected in the cost-effectiveness analyses, it may result in a loss to customers.
Conversely, if fuel costs escalate faster, customers would see an increased benefit. Regardless,
TECO would remain obligated to pay the contracted rate and may seek to recover the costs from
the ratepayers through the Fuel Clause, subject to our review. In Order No. PSC-11-0439-PAA-
EQ, we expressed concerns regarding fixed price contracts and noted that utilities are responsible
for including terms and conditions that minimize risk to the company’s general body of
ratepayers, and encouraged utilities to strive to avoid fixed price contracts.4
Security Capacity Payment
Rule 25-18.032(3)(c), F.A.C., requires us to consider security factors relating to the
contract for early capacity payments. Security guarantees included in the contract are provisions
to ensure repayment of firm capacity and energy payment in the event that the QF fails to deliver
firm capacity and energy to adhere to the terms and conditions of the contract. The Contract
begins in the year 2025, and the avoided unit is scheduled to be in-service in 2030. If the QF
defaults during this time, the Contract includes a termination security table for determining
compensation to TECO. We reviewed the security terms and conditions contained in the
negotiated Contract and found them adequate to protect ratepayers.
2Document No. 00219-2024, filed on January 18, 2024, in Docket No. 20230129-EI.
3Document No. 00219-2024, filed on January 18, 2024, in Docket No. 20230129-EI.
4See Order No. PSC-11-0439-PAA-EQ, issued October 11, 2011, in Docket No. 20110090-EQ, In re: Petition for
Approving Negotiated Power Purchase Agreement between Progress Energy Florida, Inc. and U.S. Ecogen Polk,
LLC.

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Performance Guarantees
Rule 25-17.0832(3)(d), F.A.C., requires us to consider whether the utility’s ratepayers
will be protected by the contract’s terms. Performance guarantees, as included in this contract,
detail how the QF is to operate and require financial penalties or other remedies should it fail to
do so within the contract’s terms and conditions. The protections include a lower energy rate if
Pasco does not provide a monthly energy availability of at least 92 percent. Also, if the Pasco
WTE Facility has availability of less than 70 percent for any 6 months in a calendar year during
the Contract, this failure will be considered default, which means that TECO can recover the cost
of obtaining replacement power from Pasco. We reviewed the performance guarantees contained
in the negotiated Contract and found them adequate to protect ratepayers.
Other Considerations
The proposed PPA includes additional risks relating to transmission costs. In a typical
purchase power contract, the QF is assumed to be responsible for transmission-related costs. For
example, in TECO’s current Standard Offer Contract, the QF is solely responsible for all costs to
provide transmission to the interconnection point with the Company. 5 As the Pasco WTE Facility
is located in DEF’s service territory, the Seller requires the use of a part of DEF’s transmission
capacity to deliver energy to the delivery point with TECO. Normally, Pasco would request this
service and pay DEF for the transmission service, due to being the QF pursuant to Rule 25-
17.0889, F.A.C. However, in this case, Section 5 of the PPA makes TECO responsible for
requesting and securing the required transmission service from DEF, and for paying transmission
capacity fees based on DEF’s Open Access Transmission Tariff (OATT). TECO’s monthly
payments to Pasco would then be reduced by the amount of the transmission capacity fees paid
to DEF. This contractual mechanism appears to have a net zero effect on ratepayers.
In 	addition, 	Section 	5 	of 	the 	PPA 	also 	makes 	TECO 	responsible 	for 	potential
transmission studies and possible upgrades, if needed, to secure DEF’s transmission capacity for
Pasco’s WTE Facility. TECO has stated, consistent with Order No. PSC- 2023-0132-PAA-EI,
that it will not seek cost recovery of any transmission costs related to transmission studies or
potential upgrades.
Conclusion
Based on our review, the negotiated PPA improves TECO’s fuel diversity with the
addition of renewable energy and is cost-effective based on current forecasts, saving a projected
$7.3 million in NPV, with savings beginning the first year of the PPA. The Contract has
adequate security and performance guarantees to protect ratepayers in the event of a default or
non-performance by Pasco. In addition, consistent with Order No. PSC-2023-0132-PAA-EI, the
Company will not seek cost recovery for any transmission studies or upgrades.
5See Order No. PSC-2023-0179-PAA-EQ, issued June 21, 2023, in Docket No. 20230041-EQ, In re: Petition for
approval of revisions to standard offer contracts and rate schedule COG-2, by Tampa Electric Company.

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PAGES
Based on the foregoing, it is
ORDERED that the negotiated Purchased Power Agreement improves Tampa Electric
Company's fuel diversity with the addition of renewable energy and is cost-effective based on
current forecasts, saving a projected $7.3 million in Net Present Value (NPV), with savings
beginning the first year of the Purchase Power Agreement. The Contract has adequate security
and performance guarantees to protect ratepayers in the event of a default or non-performance by
Pasco. 	In 	addition, 	consistent 	with 	Order 	No. 	PSC-2023-0132-PAA-EI, 	Tampa 	Electric
Company will not seek cost recovery for any transmission studies or upgrades. It is further
ORDERED that the provisions of this Order, issued as proposed agency action, shall
become final and effective upon the issuance of a Consummating Order unless an appropriate
petition, in the form provided by Rule 28-106.20 I, Florida Adm inistrative Code, is received by
the Commission Clerk, 2540 Shumard Oak Boulevard, Tallahassee, Florida 32399-0850, by the
close of business on the date set forth in the ''Notice of Further Proceedings" attached hereto. lt
is further
JOI
ORDERED that in the event this Order becomes final, this docket shall be c losed.
By O RDER of the Florida Public Service Commission this 12th day of March, 2024.
Florida Pu 	ic Service Commission
2540 Shumard Oak Boulevard
Tallahassee, Florida 32399
(850) 413-6770
www .flor id apsc.com
Copies furnished: 	A copy of this document is
provided to the parties of record at the time of
issuance and, if applicable, interested persons.

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NOTICE OF FURTHER PROCEEDINGS OR JUDICIAL REVIEW
The Florida Public Service Commission is required by Section 120.569(1), Florida
Statutes, to notify parties of any administrative hearing or judicial review of Commission orders
that is available under Sections 120.57 or 120.68, Florida Statutes, as well as the procedures and
time limits that apply. This notice should not be construed to mean all requests for an
administrative hearing or judicial review will be granted or result in the relief sought.
The action proposed herein is preliminary in nature. Any person whose substantial
interests are affected by the action proposed by this order may file a petition for a formal
proceeding, in the form provided by Rule 28-106.201, Florida Administrative Code. This petition
must be received by the Office of Commission Clerk, at 2540 Shumard Oak Boulevard,
Tallahassee, Florida 32399-0850, by the close of business on April 2, 2024. If such a petition is
filed, mediation may be available on a case-by-case basis. If mediation is conducted, it does not
affect a substantially interested person's right to a hearing. In the absence of such a petition, this
order shall become effective and final upon the issuance of a Consummating Order.
Any objection or protest filed in this docket before the issuance date of this order is
considered abandoned unless it satisfies the foregoing conditions and is renewed within the
specified protest period.
Any party adversely affected by the Commission's final action in this matter may request:
(1) reconsideration of the decision by filing a motion for reconsideration with the Office of
Commission Clerk, within fifteen (15) days of the issuance of this order in the form prescribed
by Rule 25-22.060, Florida Administrative Code; or (2) judicial review by the Florida Supreme
Court in the case of an electric, gas or telephone utility or the First District Court of Appeal in
the case of a water or wastewater utility by filing a notice of appeal with the Office of
Commission Clerk and filing a copy of the notice of appeal and the filing fee with the
appropriate court. This filing must be completed within thirty (30) days after the issuance of this
order, pursuant to Rule 9.110, Florida Rules of Appellate Procedure. The notice of appeal must
be in the form specified in Rule 9.900(a), Florida Rules of Appellate Procedure.

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EXECUTION VERSION
(f) CEP Event of Default: "CEP Event of Default" shall have the meaning set forth in Section 13(a).
(g) CEP Termination Payment: "CEP Termination Payment" has the meaning set forth in Section 13(c)(iii).
(h) Company: "Company" has the meaning set forth in the preamble.
(i) Company Event of Default: "Company Event of Default" shall have the meaning set forth in Section 13(b).
(i) Company Termination Payment: "Company Termination Payment" has the meaning set forth in Section 13(c)(ii).
(k) Contract: "Contract" shall have the meaning set forth in the preamble.
(I) Contract Price: "Contract Price" shall have the meaning set forth in Exhibit 1.
(m) Contract Year: "Contract Year" shall mean any calendar year during the Term and with respect to the first and last "Contract Year" such partial calendar year.
(n) Contracted Capacity: "Contracted Capacity" shall mean eighteen (18) MW that the CEP commits to reserve, make available and supply to the Company from its Facility on a firm, first call, subordinate-to-no-other-entity-or-party, must-take basis, and for which the Company commits to pay the CEP.
(0) Delivery Point: "Delivery Point" shall mean the point on the Company's transmission system at the interface with the Transmission Service Provider's transmission system at which the CEP shall deliver Contracted Capacity and Associated Energy via the Transmission Service Provider pursuant to a Transmission Service Agreement that shall be secured by Company as provided herein.
(p) Delivery Period: "Delivery Period" shall have the meaning in Section 2.
(q) Designated Avoided Unit: "Designated Avoided Unit" shall mean the generating unit identified in the Appendix C, with effective date June 13, 2023, to the Company's Retail Tariff Schedule COG-2 as the Company's avoided unit, selected by CEP as the unit CEP wishes to help avoid, or defer, the cost of which is incorporated in both the pricing under this negotiated agreement and the termination payment amounts set forth in Exhibit II.
(r) Eastern Prevailing Time: "Eastern Prevailing Time" or "EPT" shall mean the time in effect in the Eastern Time Zone of the United States of America, whether Eastern Standard Time or Eastern Daylight Time.
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EXECUTION VERSION
(s) Effective Date: "Effective Date" has the meaning set forth in the preamble.
(t) Environmental Attributes: "Environmental Attributes" means the beneficial environmental attributes related to the Contracted Capacity and Associated Energy that would provide value or benefit, but will not create liability or detriment, which would include the beneficial attributes from (i) any and all fuel-related, emissions-related, air quality-related or other environmental- related aspects, claims, characteristics, benefits, credits, including RECs, reductions, offsets, savings, allowances, efficiencies, certificates, tags, attributes, demand reductions or similar products or rights (including all of those relating to greenhouse gases and all green certificates, green tags, renewable certificates and renewable energy credits, CO2 credits, emissions reduction credits and all those that otherwise arise or result from the generation of energy from the Facility, and all those arising or resulting from the existence of the Facility) (1) howsoever titled and whether known or unknown, (2) whether existing as of the execution date or at any time during the Term, and (3) whether such Environmental Attributes have been certified or verified under any renewable standard, including all those that could qualify or do qualify for application toward compliance with any local, state, federal green pricing program, renewable energy program, carbon reduction or greenhouse gas reduction initiative, electricity savings program, or other environmental program, incentive, mandate or objective, in each case whether voluntary or mandatory, and (ii) any environmental benefit Company otherwise would have realized from or related to the Contracted Capacity and Associated Energy if Company rather than CEP had constructed, owned or operated the Facility. Environmental Attributes do not include production, energy, or investment tax credits.
(u) Facility: "Facility" shall mean the Pasco Solid Waste Resource Recovery Facility located in Pasco County, Florida, with the current physical address of 14230 Hays Road, Spring Hill, Florida.
(v) FERC: "FERC" shall mean the Federal Energy Regulatory Commission or any similar or successor governmental body exercising the same or equivalent jurisdiction.
(w) FIN 46R: "FIN 46R" shall have the meaning set forth in Section 14(g).
(x) Force Majeure: Force Majeure shall have the meaning set forth in Section 14(d).
(y) FPSC: "FPSC" shall mean the Florida Public Service Commission or any similar or successor governmental body exercising the same or equivalent jurisdiction.
(z) Interconnection Agreement: "Interconnection Agreement" shall mean the agreement and associated documents by and among CEP and the
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EXECUTION VERSION
(ii) Performance Security: "Performance Security" shall have the meaning set forth in Section 8.
(jj) Planned Maintenance: "Planned Maintenance" shall mean any scheduled or planned maintenance of the Facility, and the production of Associated Energy from the Facility, that would lead to an outage of the Facility and shall be scheduled in accordance with Section 10.
(kk Product: "Product" shall mean the Contracted Capacity, Associated Energy, any other ancillary services required for delivery, and Environmental Attributes associated with the Contracted Capacity and Associated Energy purchased hereunder.
(II) Qualifying Facility: "Qualifying Facility" shall mean a cogeneration facility, or small power production facility, that satisfies the definition of, and qualifies as, a Qualifying Facility in accordance with the provisions of Subpart B of Subchapter K, Part 292 of Chapter I, Title 18, Code of Federal Regulations (C.F.R.), promulgated by the FERC, as the same may be amended from time to time, and must be "new capacity" pursuant to the Public Utilities Regulatory Policies Act of 1978 (PURPA), construction of which began on or after November 9, 1978.
(mm) Renewable Energy Credits or RECs: "Renewable Energy Credits" or "RECs" means any and all credits, including any emissions reduction credits, such as CO2 emission reduction credits, for renewable energy that could qualify or does qualify for application toward compliance with any local, state, federal or international renewable energy portfolio standard, green pricing program or other renewable energy or environmental mandate or objective at any time during the Term.
(nn) Renewable Generating Facility: "Renewable Generating Facility" shall mean a generating facility that satisfies the definition of, and qualifies as, a renewable generating facility in accordance with the provisions of Section 366.91, Florida Statutes, and Rule 25-17.210 (1), F.A.C.
(00) Replacement Cost: "Replacement Cost" means (a) with respect
to Company, the costs incurred by Company, acting in a commercially reasonable manner, to purchase at the Delivery Point a replacement for the Product over the remainder of the Delivery Period, plus the costs incurred by Company in purchasing such substitute Product and any additional transmission charges reasonably incurred at the Delivery Point or any other Company transmission system interface; provided, that if no replacement is obtained, then the termination payment amount set forth on Exhibit Il for such Contract Year will be utilized for this calculation; and also including the full cost of the Third-Party Transmission Services Company has reserved for the remainder of the Delivery Period; and (b) with respect to CEP, the costs incurred by CEP, acting in a commercially reasonable manner, to sell at the
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EXECUTION VERSION
Delivery Point the Product over the remainder of the Delivery Period, plus the costs incurred by CEP in entering into an arrangement with a substitute purchaser and any additional transmission charges reasonably incurred at the Interconnection Point or any other Transmission Service Provider transmission system interface; provided, if no replacement is obtained, then the Transmission Service Provider "as-available" energy price will be utilized for this calculation. In either event, the Party making the determination will provide reasonable evidence to the other Party of the Replacement Cost determined hereunder. In the event the Transmission Service Provider "as- available" energy price is utilized, the calculation shall be the net present value for all future years.
(pp) Sales Price: "Sales Price" means the price at which CEP, acting in a commercially reasonable manner, resells from the Facility Contracted Capacity and Associated Energy not received by Company; provided, if no replacement is obtained, then the Transmission Service Provider "as- available" energy price will be utilized for this calculation. In any event, CEP shall provide reasonable evidence of the Sales Price as so determined hereunder.
(qq) SEC: "SEC" shall have the meaning set forth in Section 14(g).
(rr) Term: "Term" shall have the meaning set forth in Section 2.
(ss) Third-Party Transmission Services: "Third-Party Transmission Services" shall mean the firm transmission service(s) and ancillary services required to deliver Contracted Capacity and Associated Energy from the Facility (Interconnection Point) to the Company's transmission system (Delivery Point).
(tt) Transmission Service Agreement: "Transmission Service Agreement" shall mean the contract by which Company shall obtain Third-Party Transmission Services from Transmission Service Provider to transmit Associated Energy from the Facility to the Company's transmission system at the Delivery Point.
(uu) Transmission Service Provider: "Transmission Service Provider" means the owner of the transmission system related to the Facility (and interconnection provider under the Interconnection Agreement) and counterparty to the Transmission Service Agreement, which as of the date of this Contract is Duke Energy Florida, but would include any successor thereto by name change, operation or law or otherwise permitted.
(vv) TSP Disconnect Event: "TSP Disconnect Event" shall mean any event in which the Transmission Service Provider requires CEP to disconnect the Facility from its transmission system.
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EXECUTION VERSION
2. Term: This Contract shall commence immediately upon its execution by the Parties and shall terminate at 12:00 A.M. on January 1, 2035 ("Term"). The delivery of Contracted Capacity and Associated Energy shall be from 12:00 A.M. January 1, 2025, through 11:59 P.M. December 31, 2034 ("Delivery Period"). The beginning of the Term and effectiveness of this Contract is subject to Company receiving unconditional approval from the FPSC, FERC and any other governmental entity necessary to approve this Contract and that pursuant to any such approvals Company shall not be disallowed from, and shall have full allowance for, recovering all costs associated with this Contract and the payments by Company hereunder.
3. Company's Capacity and Energy Purchase Commitment: The Company agrees to purchase all Contracted Capacity and Associated Energy, excluding Non- Dispatched Energy, generated at the Facility and provided to the Company at the Delivery Point by the CEP pursuant to this Contract, excluding the amount of capacity and energy consumed by the Facility's station service equipment (such as generator auxiliaries, emissions control and monitoring equipment, fuel handling equipment, etc.) and all transmission system losses incurred by the CEP to effect delivery of Contracted Capacity and Associated Energy to the Delivery Point, except as otherwise provided herein. The Parties agree that the sale of Contracted Capacity and Associated Energy includes the sale and transfer of all Environmental Attributes associated therewith at no cost. If Company fails to receive Associated Energy at the Delivery Point (other than an event excused hereunder, including Force Majeure), then Company shall pay to CEP on the date payment would otherwise be due in respect of the month in which such failure occurred, an amount for such deficiency equal to the positive difference, if any, obtained by subtracting the Sales Price from the Contract Price. For clarity, the amount of Contracted Capacity and Associated Energy will be metered at the Delivery Point.
4. Non-Dispatched Capacity and Non-Dispatched Energy Restriction: To the extent that there is Non-Dispatched Capacity and Non-Dispatched Energy during a given hour, such Non-Dispatched Capacity and Non-Dispatched Energy may be sold as "as-available" energy by CEP to third parties.
5. Responsibilities for Interconnection Service, Third-Party Transmission Service and Company Transmission Service: It is the responsibility of the CEP to request and secure the required interconnection service from the Transmission Service Provider that serves the CEP's Facility, and CEP shall be responsible to arrange and pay to interconnect the Facility to the Transmission Service Provider and any other interconnection costs related to the Facility, including any telemetering equipment needed to account for the dynamic scheduling of Associated Energy from the Facility (which shall be the sole cost and expense of CEP). Since the Facility is not located within the Company's transmission system, Company shall request and secure the required Third-Party Transmission Service(s) required to deliver Contracted Capacity and Associated Energy to the Company's transmission system; provided that the Transmission Service Agreement costs associated with such Third-Party Transmission Service shall be passed through to CEP and reduce the payments otherwise due by Company
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EXECUTION VERSION
hereunder. With respect to the Transmission Service Agreement, it is the responsibility of Company to: (i) satisfy the Transmission Service Provider's Open Access Transmission Tariff requirements and/or all non-FERC jurisdictional transmission service agreements required to deliver Contracted Capacity and Associated Energy to the Company, as applicable; and (ii) request and purchase all required firm Third-Party Transmission Services in a timely manner to satisfy the provisions of this Contract. The transmission reservation will be for a capacity at the Interconnection Point to account for line losses and allows for receipt of Contracted Capacity to Company at the Delivery Point.
More specifically with respect to the Transmission Service Agreement, if Transmission Service Provider requires a transmission study prior to confirming the transmission reservation under the Transmission Service Agreement, Company (at its own expense and without passing through to CEP) will pay for such study. If such study identifies unexpected costs, such as transmission and/or distribution system upgrades (or other affected system costs) required to facilitate the delivery of energy under this Contract, Company shall, in its sole discretion, have the option to (a) pay such costs for its own account (without passing through to CEP); or (b) terminate this Contract; provided, that CEP shall have the right to pay for such additional costs in order to not have the Contract terminate, with the acceptable means by which the CEP will pay for such costs to be determined by the Parties. If the Contract is so terminated, neither Party will have any further obligations hereunder.
6.
Payment and Billing:
(a) The calendar month shall be the standard period for all payments under this Contract (other than any CEP Termination Payment or Company Termination Payment, as applicable). As soon as practicable after the end of each month, Company will render to the CEP a purchase statement for the payment obligations, if any, incurred hereunder during the preceding month. The Company agrees to pay the CEP for Product delivered to the Company at the Delivery Point at the rates set forth on Exhibit I, which payments shall be fixed for the applicable Contract Years and not subject to escalation (as set forth in the purchase statement provided by Company to CEP pursuant to this Section 6).
(b) All purchase statements under this Contract shall be due and payable in accordance with each Party's purchase statement instructions (e.g., wiring instructions) on or before the later of the twentieth (20th) day of each month, or tenth (10th) day after receipt of the purchase statement or, if such day is not a business day, then on the next business day. Each Party will make payments by electronic funds transfer, or by other mutually agreeable method(s), to the account designated by the other Party. Any amounts not paid by the due date will be deemed delinquent and will accrue interest at the Interest Rate, such interest to be calculated from and including the due date to but excluding the date the delinquent amount is paid in full.
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EXECUTION VERSION
December and 92.0% available during the months of March, April, May and November ("Availability Guarantee"). During the Delivery Period, the ("Availability Adjustment") shall be calculated for each month and rounded to the nearest 0.1% as follows:
AA = (AG - AED/EED) * 2 * AEP
WHERE:
AA = Availability Adjustment
AG Availability Guarantee applicable to such month
AED = Actual Energy Delivered from the Facility to the Delivery Point
EED = the maximum Expected Energy Delivered, calculated as Contracted Capacity multiplied by the total hours in the applicable month (less any Non-Dispatched Energy in such month and less any MWh not produced due to Planned Maintenance or Force Majeure)
AEP = Associated Energy Payment, which is the unadjusted Contract Price
The Availability Adjustment multiplied by the applicable Associated Energy will be included as a reduction in the purchase statement from Company to CEP as set forth in Section 6. If the above calculation leads to a negative number, then the Availability Adjustment shall be zero. Illustrative examples of these calculations are set forth on Exhibit I.
(b) At any time during the Term of this Contract that CEP is unable to deliver energy from the Facility, and such event is not due to Planned Maintenance or Force Majeure, CEP, in its discretion, may deliver replacement energy to Company from a third-party source as a replacement for the Product contemplated under this Contract; provided, however in such instance, the replacement energy must be generated by a Renewable Generating Facility. In this event, CEP shall be responsible for: (i) arranging delivery from such third-party source to the Delivery Point; and (ii) all associated transmission charges, line losses, service charges, and other applicable fees and costs necessary for the delivery of all or any of the replacement energy from the third-party source. Delivered third-party energy must include the identical Environmental Attributes as energy provided from the Facility, and Company must receive ownership of the identical Environmental Attributes the same as if Company had received the Associated Energy from the Facility.
8. Performance Security Guarantees: The Parties require certain security guarantees from each other to ensure performance under this Contract in order to protect their respective interests in the event the other Party fails to comply with the terms in this Contract, which shall be in form and substance as described herein. In any Contract Year, if (i) with respect to Company, Company does not maintain a minimum Moody's senior unsecured investment credit rating of Baa3 and a
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minimum Standard & Poor's senior unsecured investment credit rating of BBB-, or (ii) with respect to CEP, CEP does not maintain a minimum Moody's senior unsecured investment credit rating of Baa3 and a minimum Standard & Poor's senior unsecured investment credit rating of BBB-, that Party shall provide security, whether in the form of cash, letter of credit, security bond, or other form of collateral acceptable to the other Party, which shall equal the transmission charges under the Transmission Service Agreement for the lesser of the following twelve (12) month period or remainder of the Term (the "Performance Security").
9. Reserved.
10. Production and Maintenance Schedule: During the Term, the CEP agrees to the following:
(a) The CEP shall provide the Company in writing prior to June 1st of each calendar year an estimate of the amount of electricity to be generated by the Facility and delivered to the Company for each month of the following calendar year, including a tentative schedule of the time, duration and magnitude of any Planned Maintenance of the Facility or reductions to the amount of Contracted Capacity that the CEP can make available at the Delivery Point. CEP shall use commercially reasonable efforts to schedule Planned Maintenance during the months of March, April, May, October and November. CEP shall notify the Company ninety (90) days prior to any Planned Maintenance of the Facility to confirm such schedule, and CEP agrees to use commercially reasonable efforts to comply with such schedule. CEP shall promptly notify the Company of any changes to the Planned Maintenance schedule, subject to the restrictions provided in subsection (b) below.
(b) During the Delivery Period, the Facility may have up to one (1) major turbine overhaul outage for its currently operating turbine (such outage anticipated to be in 2028); it being understood between the Parties that such outage is on an anticipated seven (7) year schedule. CEP will use all commercially reasonable efforts to comply with this schedule; however, the Parties acknowledge such schedule is subject to change. Such outage will be included in the Planned Maintenance scheduling set forth in subsection (a) above. The calculation of EED for availability in Section 7 will be reduced by the actual amount of Planned Maintenance (i) up to sixty-five (65) days in all years without a major turbine overhaul outage; and (ii) up to seventy-five (75) days of Planned Maintenance during the year in which a major turbine overhaul outage is conducted, which shall be applied in the month in which the Planned Maintenance occurs; provided, that if the Planned Maintenance exceeds the days provided above, such additional days shall not reduce EED as provided herein.
(c) By July 1st of each calendar year, the Company shall notify the CEP in writing whether the requested scheduled maintenance period(s) for the Facility per
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(xi) made any representation, warranty, or covenant hereunder that proves to be incorrect in any material respect when made, unless the CEP promptly commences and diligently pursues action to cause such representation, warranty, or covenant to become true in all material respects and does so within thirty (30) days after written notice thereof has been given to CEP by Company (unless such cure is not capable of being effected within such thirty (30) day period, in which case CEP will have an additional thirty (30) day period in which to perform such cure) and such cure removes any material adverse effect on Company of such representation, warranty, or covenant having been incorrect.
(xii) fails to perform or comply with any other material term or condition of this Contract, other than those listed above, which failure continues for thirty (30) days after written notice from Company.
(b) The Company shall be in default ("Company Event of Default") under this Contract if it:
(i) fails to pay CEP any undisputed amount payable by Company to CEP pursuant to this Contract by the due date, and Company fails to cure such failure to pay within forty-five (45) days after receipt of written demand from CEP.
(ii) fails to perform or comply with any other material term or condition of this Contract, other than as provided in Section 13(b)(i) above which failure continues for thirty (30) days after written notice from CEP.
(c) Default Remedy:
(1) If Company has the right to terminate this Contract due to a CEP Event of Default, the following shall apply:
(i) If CEP defaults pursuant to Section 13(a)(viii) of this Contract, after receipt of such notice of termination from Company, CEP shall have the right to an additional cure period of three (3) consecutive months (including the month in which the notice is given) following such notice to cause the Facility to meet at least seventy percent (70%) availability over such three (3) month period; provided, if CEP fails to achieve such result, CEP shall have an additional ninety (90) days to secure a replacement of the Product to be delivered pursuant to the terms of this Contract at the Delivery Point for the remainder of the Delivery Period. The terms and conditions of such replacement Product shall be the
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same as provided herein and subject to the approval of Company.
(ii) If CEP does not choose or fails to cure pursuant to subsection (i) above, Company will be entitled to immediately terminate this Contract and recover from CEP all amounts then owed by CEP to Company under this Contract and recover from CEP the Company's Replacement Cost less the value of this Contract to Company over the remainder of the Delivery Period (determined in a commercially reasonable manner) ("Company Termination Payment"). Any purchase statement that includes such Company Termination Payment shall include a written statement explaining in reasonable detail the calculation of such amount.
(iii) If CEP terminates this Contract due to a Company Event of Default, CEP will be entitled to recover from Company all amounts then owed by Company to CEP under this Contract and recover from Company the positive difference, if any, between the value of this Contract to CEP over the remainder of the Delivery Period (determined in a commercially reasonable manner) and the CEP Replacement Cost (the "CEP Termination Payment"). Any purchase statement that includes such CEP Termination Payment shall include a written statement explaining in reasonable detail the calculation of such amount.
14. General Provisions:
(a) Permits: The CEP hereby agrees to seek to obtain any and all governmental permits, certifications, or other authority the CEP is required to obtain as a prerequisite to engaging in the activities provided for in this Contract. The Company hereby agrees to seek to obtain any and all governmental permits, certifications or other authority the Company is required to obtain as a prerequisite to engaging in the activities described in this Contract.
(b) Indemnification: The Company and the CEP shall each be responsible for its own facilities in ensuring adequate safeguards for other Company customers, the Company and CEP personnel and equipment, and for the protection of its own generating system. To the extent permitted by law, the Company and the CEP shall each indemnify and save the other harmless from any and all claims, demands, costs, or expense for loss, damage, or injury to persons or property of the other caused by, arising out of, or resulting from:
(i) any act or omission by a Party or that Party's contractors, agents, servants and employees in connection with the installation or operation of that Party's generation system or the operation thereof in connection with the other Party's system; and
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(ii) any defect in, failure of, or fault related to a Party's generation system; and
(iii) the negligence of a Party or negligence of that Party's contractors, agents, servants and employees.
(c) Insurance: On or before the Effective Date, the CEP shall deliver to the Company proof of all insurance CEP maintains on the Facility per its operating agreements, which insurance shall be adequate for the operation and maintenance of the Facility. If reasonably requested after the Effective Date, CEP shall deliver such proof of insurance as soon as reasonably practicable. CEP shall pay all premiums and other charges due on said policies and keep its policies in full force and effect during the Term.
(d) Force Majeure: If either Party shall be unable, by reason of Force Majeure, to carry out its obligations under this Contract, either wholly or in part, the Party so failing shall give written notice and full particulars of such cause or causes to the other Party as soon as possible after the occurrence of any such cause; and such obligations shall be suspended during the continuance of such hindrance, which, however, shall be remedied with all possible dispatch. The term ("Force Majeure") shall be taken to mean all acts of God, strikes, lockouts or other industrial disturbances at the manufacturing site of the major equipment components or the construction site, wars, blockades, insurrections, riots, arrests and restraints of rules and people, pandemics, explosions, fires, floods, lightning, wind, perils of the sea, accidents to equipment or machinery or similar occurrences, and shall specifically include a TSP Disconnect Event and any interruption or curtailment of firm transmission service by Transmission Service Provider to the Delivery Point; provided, however that no occurrence may be claimed to be a Force Majeure occurrence if it is caused by the negligence or lack of due diligence on the part of the Party attempting to make such claim and specifically does not inciude interruption in fuel supply (but does include interruption of fuel transportation); provided, however, Force Majeure shall include an interruption in fuel supply that is due to a transportation failure by a third party that would otherwise constitute a Force Majeure (and such failure could not be prevented or mitigated by the commercially reasonable actions of CEP or said third party). The CEP agrees to pay the costs necessary to reactivate the Facility and/or the interconnection with the Transmission Service Provider system if the same are rendered inoperable due to actions of the CEP, its agents, or Force Majeure events affecting the Facility or the interconnection with Transmission Service Provider. If CEP is the claiming party, Force Majeure does not include any action taken by CEP in its governmental capacity.
(e) Representations, Warranties, and Covenants of the CEP:
The CEP represents and warrants that as of the date this Contract is executed:
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specific performance or recovery of property, (d) attachment of assets, or (e) execution or enforcement of any judgment.
In addition, CEP warrants continuing throughout the Term as follows: (i) entry into and performance of this Contract by CEP are for a proper public purpose within the meaning of any applicable law, (ii) the Term does not extend beyond any applicable limitation imposed by any applicable law, and (iii) CEP's obligations to make payments hereunder are unsubordinated obligations and such payments are otherwise not subject to any prior claim under any and all bond ordinances or indentures to which it is a party, all other relevant constitutional, organic or other governing documents and applicable law and are available without limitation or deduction to satisfy all CEP's obligations hereunder.
(iv) Governmental Approvals: Except as expressly contemplated herein, neither the execution and delivery by the CEP of this Contract, nor the consummation by the CEP of any of the transactions contemplated thereby, requires the consent or approval of, the giving of notice to, the registration with, the recording or filing of any document with, or the taking of any other action in respect of governmental authority, except in respect of permits (a) which have already been obtained and are in full force and effect or (b) are not yet required (and with respect to which the CEP has no reason to believe that the same will not be readily obtainable in the ordinary course of business upon due application therefore).
(v) No Proceedings: There are no actions, suits, proceedings or investigations pending or, to the knowledge of the CEP, threatened against it at law or in equity before any court or tribunal of the United States or any other jurisdiction which individually or in the aggregate could result in any materially adverse effect on the CEP's business, properties, or assets or its condition, financial or otherwise, or in any impairment of its ability to perform its obligations under this Contract. The CEP has no knowledge of a violation or default with respect to any law which could result in any such materially adverse effect or impairment. CEP is not bankrupt and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming bankrupt.
(f) Assignment: The Company and the CEP shall have the right to assign its benefits under this Contract, but the CEP shall not have the right to assign its obligations and duties without the Company's prior written consent and such consent shall not be unreasonably withheld.
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federal court, then venue for that action shall be in the United States District Court for the Middle District of Florida, Tampa Division.
(j) Waiver of Jury Trial: Each Party waives, to the fullest extent permitted by applicable law, any and all rights it may have to a trial by jury in respect of any suit, action or proceeding relating to this Contract or any credit support document. Each Party (i) certifies that no representative, agent or attorney of the other Party or any credit support provider has represented, expressly or otherwise, that such other Party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other Party have been induced to enter into this Contract and provide for any credit support document, as applicable, by, among other things, the mutual waivers and certifications in this Section.
(k) Severability: If any part of this Contract, for any reason, be declared invalid, or unenforceable by a court or public authority of appropriate jurisdiction, then such decision shall not affect the validity of the remainder of this Contract, which remainder shall remain in force and effect as if this Contract had been executed without the invalid or unenforceable portion and provided, further, that if any such event occurs, the Parties shall use their best efforts to reform this Contract in order to give effect to the original intention of the Parties.
(1) Complete Contract and Amendments: All previous communications or agreements between the Parties, whether verbal or written, with reference to the subject matter of this Contract are hereby abrogated. No amendment or modification to this Contract shall be binding unless it shall be set forth in writing and duly executed by both Parties to this Contract.
(m) Survival of Contract: This Contract, as it may be amended from time to time, shall be binding and inure to the benefit of the Parties' respective successors-in-interest and legal representatives.
(n) Record Retention: The CEP agrees to retain for a period of five (5) years from the date of termination hereof all records relating to the performance of its obligations hereunder, and to cause all CEP entities to retain for the same period all such records.
(0) No Waiver: No waiver of any of the terms and conditions of this Contract shall be effective unless in writing and signed by the Party against whom such waiver is sought to be enforced. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given. The failure of a Party to insist, in any instance, on the strict performance of any of the terms and conditions hereof shall not be construed as a waiver of such Party's right in the future to insist on such strict performance.
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(p) Set-off: The Company may at any time, but shall be under no obligation to, set off any and all sums due from the CEP against sums due to the CEP hereunder.
(q) Assistance With the Company FIN 46R Compliance: Accounting rules set forth in Financial Accounting Standards Board Interpretation No. 46 (Revised December 2003) ("FIN 46R"), as well as future amendments and interpretations of those rules, may require the Company to evaluate whether the CEP must be consolidated, as a variable interest entity (as defined in FIN 46R), in the financial statements of the Company. The CEP agrees to fully cooperate with the Company and make available to the Company all financial data and other information, as deemed necessary by the Company, to perform that evaluation on a timely basis at inception of this Contract and periodically as required by FIN 46R. If the result of the evaluation under FIN 46R indicates that the CEP must be consolidated in the financial statements of the Company, the CEP agrees to provide financial statements, together with other required information, as determined by the Company, for inclusion in disclosures contained in the footnotes to the financial statements and in the Company's required filings with the Securities and Exchange Commission ("SEC"). The CEP shall provide this information to the Company in a timeframe consistent with the Company's earnings release and SEC filing schedules, to be determined at the Company's discretion. The CEP also agrees to fully cooperate with the Company and the Company's independent auditors in completing an assessment of the CEP's internal controls as required by the Sarbanes-Oxley Act of 2002 and in performing any audit procedures necessary for the independent auditors to issue their opinion on the consolidated financial statements of the Company.
(r) To the extent allowed by law, neither Party shall disclose the price terms of this Contract to a third party (other than the Party's employees, lenders, counsel, accountants or advisors who have a need to know such information and have agreed to keep such terms confidential) except in order to comply with any applicable law, regulation, or any exchange, control area or independent system operator rule or in connection with any court or regulatory proceeding; provided, however, each Party shall, to the extent practicable and legal, use reasonable efforts to prevent or limit the disclosure. Any Party who receives a request for production of documents related to the price terms of this Contract shall provide notice to the other Party at least ten (10) days prior to producing the information unless production of the documents is required in less than ten (10) days, in which case the Party from whom production is sought shall provide notice to the other Party as soon as is reasonably possible following the Party's receipt of a request for production of documents. The purpose of this notice requirement is to afford each Party an adequate opportunity to undertake steps necessary to protect the confidentiality of the information as provided under Florida Statutes. The Party opposing disclosure shall bear all costs in any proceedings seeking to protect the confidentiality of the
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Title:

By:

Name:

Title: