2549 ORDINANCE NO.
AN ORDINANCE APPROVING AND AUTHORIZING THE MAYOR AND CITY
CLERK TO ENTER INTO. AN AGREEMENT FOR THE PURCHASE AND
SALE OF ENERGY, CAPACITY AND ANCILLARY SERVICES FOR THE
CITY OF WEST MEMPHIS, DECLARING AN EMERGENCY, AND FOR
OTHER PURPOSES. .
WHEREAS, the:current power supply agreement with NRG Power Marketing,,LLC will
terminate on May 31,2021;and
WHEREAS,Arkansas law, codified at A.C.A. §14758-303(b)(2)(13)allows City Council to waive
traditional bidding in favor of a better procurement process in exceptional situations where traditional
bidding is deemed not feasible or practical; and
WHEREAS, the purchase and sale of wholesale energy, capacity and ancillary services for the
City of West Memphis ("City") and its citizens is an'exceptional event and procurement through
traditional bidding processes have been proven to render suboptimal results;and
WHEREAS; the West Memphis Utility Commission (WMUC) issued a request for proposals
("RFP")to.purchase-and sell wholesale energy,capacity and ancillary services for the City;and
WHEREAS, WMUC received 25 proposal alternatives from 5 different reputable wholesale
power suppliers which were evaluated by staff, as well as external-engineering consultants and.legal
counsel,who determined and recommended to WMUC that the most advantageous proposal to the City is
reflected in the contract attached hereto as Exhibit A;and
WHEREAS,WMUC recommends to the City Council to approve the.contract attached hereto as
Exhibit A;and
WHEREAS,Arkansas law codified at A.C.A. 14,203-115(b)allows for cities to enter wholesale
power contracts that are payable by and from the rates collected by the City's electric utility; and include
covenants that rates will be adequate to meet the City's obligations under the contract,to wit:
{
"For so long as any contract for the purchase of electric power and energy is in effect,the
rates; fees, and charges for electric power and! energy charged and collected by a
municipality inay.be fixed to provide sufficient revenues to secure payments of amounts
due under the contract and to comply with the terms of the contract.Any contract shall be
approved by ordinance of the governing body of the purchasing municipality, and the
ordinance shall be published one (1) time in a newspaper of general circulation in the
municipality. Any contest of the ordinance shall be barred at.the end of.thirty (30).days
aft er.the ordinance is published." A.C.A. §14-203-115(b).
and
WHEREAS,the City Council hereby finds that:
• the procurement of wholesale power and wholesale power services is an,infrequent and
exceptional event where traditional bidding'is impractical and results in suboptimal terms
and pricing;
• the purchase and sale of wholesale energy, capacity and ancillary services through a
competitive RFP is sound, reasonable, and it preferable procurement method for the City;
and
• execution of the contract-attached hereto as Exhibit A is in the best.interest of the City and
its citizens.
NOW,THEREFORE,BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
WEST MEMPHIS,ARKANSAS:
SECTION 1. That.the Power.Supply:Agreement.attached.hereto and.incorporated herein as
Exhibit A is hereby approved: The Mayor and the.City Clerk are hereby authorized to execute the Power
Supply Agreement on behalf of the City. Further, the Mayor is also hereby authorized to approve any
modifications,amendments or changes that may be necessary in the ongoing process of finalization of the
contract terms.
SECTION 2.' That traditional bidding is impractical and unlikely to produce, the most
advantageous power supply agreement for the City of West Memphis. Thus,traditional bidding is hereby
waived in lieu of the competitive request for proposal and evaluation process that was used to procure the
contract attached hereto as Exhibit A.
SECTION 3. That this Ordinance is passed in;full accordance and compliance with Title 14
Chapter 203 of the Arkansas Code Annotated, codified at A.C.A; §,14-203-101, et seq.',-and accordingly
is to be published one.(1) time in a newspaper of general circulation in the municipality. By law, any
contest of the ordinance shall be barred at the end of thirty (30) days after the Ordinance is published, in
accordance with Ark.Code Ann. $14-203-115(b).
SECTION 4. EMERGENCY CLAUSE.That itis found and determined by the City Council of
the City of West Memphis, Arkansas, that energy prices are currently favorable to the City and-that time
is of the essence to finalize this-Agreement prior to the expiration of the current power.supply agreement
and that an emergency is declared to exist and this Ordinance being immediately necessary for the
preservation of the public peace, health and safety of the pppulation and therefore this Ordinance shall be
.. in full force and effect from and after its passage and approval.
PASSED-AND APPROVED thisOL/day,of May;2020.
MARCO MCCLENDON,MAYOR
ATTES
�-y
L.rsC/
CITY CLERK
SPONSORED BY:
r
4
t
POWER SUPPLY AGREEMENT
(Five Year Energy /,Three Year Capacity)
Table of Contents
Article1. DEFINITIONS......................................................................................................................4
.Article 2. BASIC UNDERSTANDINGS............................................................................................14
Article 3. TERM AND COMMENCEMENT OF SERVICES AND CONTRACT PRICE.........15
3.1 Term..........................................................................................................................................15
3.2 RESERVED..............................................................................................................................15
3.3 Contract Price...............................................................................................................:...........15
3.4 Pass-Through Amounts.............................................................................................................16
3.5 Energy Billing Determinants....................................................................................................16
3.6 Payment for Buyer's Energy.....................................................................................................16
3.7 Metering....................................................................................................................................16
Article 4. BUYER AND SELLER OBLIGATIONS.........................................................................17
4.1. General Obligations..................................................................................................................17
4.2 Buyer's Energy..........................................................................................................................19
4.3 Scheduling Agent.................................................
4.4 Resource Adequacy Requirements...........................................................................................19
4.5 Losses........................................................................................................................................20
4.6 ARR Entitlements and Related Activities..............................................:..................................20
4.7 Transmission.............................................................................................................................20
4.8 Congestion Management..........................................................................................................21
4.9 Local Balancing Authority........................................................................................................21
4.10 Buyer Resource Outages,Derates or Retirements....................................................................21
4.11 Force Majeure...........................................................................................................................22
4.12 Prospective Significant Load....................................................................................................22
4.13 Operating Committee................................................................................................................23
4.14 Rate Covenant...........................................................................................................................23
4.15 Renewable Energy Requirements.............................................................................................23
4.16 RESERVED..............................................................................................................................23
4.17 Behind-the-Meter Generation...................................................................................................23
Article 5. EVENTS OF DEFAULT AND REMEDIES................................................................24
5.1 Events of Default......................................................................................................................24
5.2 Declaration of an Early Termination Event and Calculation of Settlement Amount................25
5.3 Calculation of Termination Payment....................................................................:...................25
5.4 Notice and Payment of Termination Payment..........................................................................25
[2]
5.5 Disputes with Respect to Termination Payment ......................................................................26
5.6 Suspension of Performance.......................................................................................................26
5.7 Setoff..........................................................................................................................................26
5.8 Credit Terms and Performance Assurance Rights....................................................................27
5.9 Letter of Credit Expiration Event.............................................................................................29
Article 6. PAYMENT AND NETTING.............................................................................................30
6.1 Billing Period............................................................................................................................30
6.2 Timeliness of Payment..............................................................................................................30
6.3 Disputes and Adjustments of Invoices......................................................................................30
6.4 Disputes with MISO .................................................................................................................31
6.5 Netting of Payments..................................................................................................................31
6.6 Taxes.........................................................................................................................................31
6.7 Audit Rights..............................................................................................................................32
6.8 Billing Period Post-Term..........................................................................................................32
Article 7. MISCELLANEOUS ...........................................................................................................32
7.1 Representations and Warranties................................................................................................32
7.2 Representations and Warranties Specific to Buyer...................................................................33
7.3 Public Authority.Disclaimers of Sovereign Immunity............................................................34
7.4 Load Aggregation;Retail Choice.............................................................................................35
7.5 Title/Indemnity.........................................................................................................................35
7.6 Limitation on Consequential,Incidental and Indirect Damages...............................................35
7.7 Assignment...............................................................................................................................36
7.8 Disputes/Governing Law..........................................................................................................36
7.9 Notices......................................................................................................................................36
7.10 Waiver.......................................................................................................................................37
7.11 No Third-Party Beneficiaries....................................................................................................37
7.12 Severability...............................................................................................................................37
7.13 General......................................................................................................................................37
7.14 Audit.........................................................................................................................................37
7.15 Confidentiality..........................................................................................................................38
7.16 Mobile Sierra Standard for Contract Modifications .................................................................38
7.17 Change in Law..........................................................................................................................39
7.18 Change in Regional Territory...................................................................................................39
7.19 Forward Contracts:No Utility..................................................................................................40
[3]
POWER SUPPLY AGREEMENT
This Power Supply Agreement ("Agreement") is dated as of May 21, 2020 by and
between NextEra Energy Marketing, LLC ("Seller"), a Delaware limited liability company, and
the City of West Memphis, Arkansas, a political subdivision of the State of Arkansas ('Buyer").
Buyer and Seller shall be referred to individually herein as a "Party" and collectively herein as
the "Parties."
WHEREAS, Seller and Buyer desire to enter into a Power Supply Agreement for a
Delivery Term of June 1, 2021 through May 31, 2026, which provides for the sale by Seller of
Capacity, Energy and certain Ancillary Services to Buyer in accordance with the terms and
conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Seller and Buyer agree to the foregoing and as follows:
Article 1. DEFINITIONS
For purposes of this Agreement, the following definitions shall apply unless the context clearly
indicates otherwise. All capitalized Terms used in this Agreement that are not defined in this
Article 1 or set forth elsewhere herein, including the.Exhibits hereto, shall have the meaning set
forth in the MISO tariff. Words, phrases or expressions used in this Agreement, which are not
capitalized Terms or otherwise defined herein, and which have an accepted meaning in the
custom and usage of the business of buying, selling, generating, delivering, and transmitting
electrical Capacity, Energy and Ancillary Services, or have an accepted meaning according to
NERC or SERC shall have that meaning.On the effective date of this Agreement,where conflicts
exist between words in the Agreement and words in the MISO Tariff with respect to MISO
products that are also defined below,the MISO Tariff provisions will control.
Affected Party-has the meaning set forth in Section 7.17.
Affiliate - means, with respect to any person, any other person (other than an individual) that,
directly or indirectly,through one or more intermediaries,controls,or is controlled by, or is under
common control with, such person. For this purpose, "control" means the direct or indirect
ownership of fifty percent(50%)or more of the outstanding capital stock or other equity interests
having ordinary voting power.
Ancillary Services - means those services that are necessary to support Capacity and the
transmission of Energy from resources to loads while maintaining reliable operation of the
transmission system., including but not limited to Regulating Reserve and Contingency Reserve.
Asset Owner - means an entity identified by a Market Participant through the Transmission .
Provider registration process that is eligible'to be represented by the Market Participant in Market
Activities, including generation, load, and FTR assets.
[4]
Assurance Notice-has the meaning set forth in Section 5.8.3.
Auction Revenue Rights or ARR- means a Market Participant's share of the revenue generated
from the FTR annual auction in MISO.
Balancing Authority-means the responsible entity that integrates Resource plans ahead of time,
maintains load-generation balance within a Balancing Authority Area and supports the Eastern
Interconnection frequency in real time. For the purposes of this Agreement, the Balancing
Authority is MISO.
Balancing Authority Area - means an electric power system or combination of electric power
systems bounded by interconnection metering and telemetering to which a common generation
control scheme is applied within the Balancing Authority in order to: (i)match the power output
of the Generation Resources within the electric power system(s) and Energy delivered from or to
entities outside the electric power system(s), with the demand (including losses) within the
electric power system(s); (ii) maintain scheduled Interchange with other Balancing Authority
Areas,within the limits of Good Utility Practice;and/or(iii)maintain the frequency of the electric
power system(s)within reasonable limits in accordance with Good Utility Practice and applicable
reliability standards.
Bankrupt-means with respect to any entity, such entity(1) is dissolved (other than pursuant to a
consolidation, amalgamation or merger); (2) becomes insolvent or is unable to pay its debts or
fails or admits in writing its inability generally to pay its debts as they become due; (3) makes a
general assignment, management or composition with or for the benefit of its creditors; (4)
institutes or has instituted against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law
affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the
case of any such proceeding or petition instituted or presented against it, such proceeding or
petition(A)results in a judgment of insolvency or bankruptcy or the entry of an order for relief
or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged,
stayed or restrained in each case within 45 Days of the institution or presentation thereof; (5)
has a resolution passed for its winding-up, official management or liquidation (other than
pursuant to a consolidation, amalgamation or merger); (6)(A) seeks or becomes subject to the
appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian
or other similar official for it or for all or substantially all its assets or(B) in the case of a Buyer,
(i) there shall be appointed or designated with respect to it, an entity such as an organization,.
board,commission, authority, agency or body to monitor,review, oversee,recommend or declare
a financial emergency or similar state of financial distress with respect to it or(ii) there shall be
declared or introduced or proposed for consideration by it or by any legislative or regulatory body
with competent jurisdiction over it,the existence of a state of financial emergency or similar state
if financial distress in respect of it; (7) has a secured party take possession of all or substantially
all its assets or has a distress, execution, attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed or restrained, in each case
within 60 Days thereafter; (8) causes or is subject to any event with respect to it which,under the
applicable laws of any jurisdiction, has an analogous effect to any of the events specified in
[5]
clauses (1)to (7) (inclusive); or(9)takes any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the foregoing acts.
Behind-the-Meter Facility - means any electric generating facility, equipment, apparatus or
project that is installed at or on Buyer's side of Buyer's metered points of connection with the
transmission or distribution systems; provided that Behind-the-Meter Facility shall not include
any electric generating facility installed by any retail customer of Buyer.
Beneficiary- shall have the meaning set forth in Section. 5.9.
Billing Agent-means an entity designated by a Market Participant as the entity to receive from,
or forward payment to, the Transmission Provider on the Market Participant' s Settlement
Statements.
Business Day - shall mean any day, other than Saturday, Sunday or legal holiday, in which the
Federal Reserve Banks in New York, NY are open for business, commencing at 8:00 a.m. EPT
and ending at 5:00 p.m. EPT.
Buffer- shall have the meaning set forth in the Preamble.
Buyer's Energy - shall mean 32 MW per hour, as submitted by Buyer to Seller via the Buyer's
Energy Schedule.
Buyer's Energy Schedule - means the Financial Schedule (as defined by MISO) submitted by
Buyer to Seller that includes the volumes of Buyer's Energy for the applicable period, as further
described in Section 4.2.
Buyer's Resources -means the Jointly Owned Units, as described in Exhibit 3.
Calculating Party-has the meaning set forth in Section 7.17.
Capacity - shall mean Unforced Capacity, measured by Zonal Resource Credits ("ZRCs"), as
such terms are defined in the applicable Rules enacted by MISO, or any other form of capacity
rights that may be counted towards the resource adequacy or capacity obligation of a load serving
entity, as determined by MISO. For the avoidance of doubt, one ZRC shall represent one
megawatt of Unforced Capacity.
Capacity Net Quantity — means, for each Planning,Year, the amount of Capacity required to
satisfy the Resource Adequacy Requirements associated with Buyer's Total Load pursuant to
MISO tariff, minus 32 MW.
Change in Law - means that applicable Law or Rules are amended, modified, nullified,
suspended, repealed, found unconstitutional or unlawful, or changed or affected in any respect
by any Law or Rule of any Governmental Authority, including, without limitation, any
interpretation thereof by any Governmental Authority after the Execution Date. Notwithstanding
[6]
the foregoing, any action by any Governmental Auth rity that requires or otherwise results in a
derate or retirement of any Buyer Resource shall not be a Change in Law under this Agreement.
Claiming Party-has the meaning set forth in Section 4.11.
Contingency Reserve - means Spinning Reserve and Supplemental Reserve provided by
resources made available by MISO to use in the event of a system contingency as further defined
in Schedule 5 and Schedule 6 of the MISO tariff.
Contract Price - is specified in Section 3.3 hereof.
Credit Ratiniz - means with respect to any entity, on any date of determination, the respective
ratings then assigned to such entity's unsecured,senior long-Term debt or deposit obligations(not
supported by third party credit enhancement) by S&P, Moody's, Fitch or other specified rating
agency or agencies. A standing guaranty in favor of NextEra Energy Capital Holdings, Inc. shall
not be considered to constitute"third party credit enhancement" for purposes of this definition.
Day-Ahead LMP - means the LMP as determined in the Day-Ahead Energy and Operating
Reserve Market of MISO.
Defaulting Party- shall have the meaning set forth in'Section S.I.
Delivery Point — means (i) with respect to Energy and Ancillary Services for which Seller is
responsible under Exhibit 1, the LZ CPNode, and (ii) with respect to Capacity, MISO Local
Resource Zone 8; provided that if the boundaries of Local Resource Zone 8 change after the
Execution Date, Seller shall deliver Capacity into the Local Resource Zone that includes Buyer's
Service Territory. As of the Execution Date,the"Elemental Pricing Nodes"identified in Exhibit
2 comprise the Delivery Point for Energy and Ancillary Services, modified from time to time, at
which the Buyer's transmission and distribution system interconnects to the Entergy transmission
and distribution system
Delivery Term — means (i) with respect to Energy and Ancillary Services for which Seller is
responsible under Exhibit 1, Hour Ending (HE) 0100 on the Effective Date through HE 2400
May 31, 2026, both EPT, and (ii) with respect to Capacity, the Effective Date through May 31,
2024, inclusive. If not expressly stated as the"Delivery Term for Energy"or the"Delivery Term
for Capacity,"the term"Delivery Term"as used herein shall mean the Delivery Term for Energy
as referenced in subpart(i)of this definition.
EAL- means Entergy Arkansas, LLC, or its successor.
Early Termination Date- shall have the meaning set forth in Section 5.2.
Effective Date -means June 1, 2021.
Emission Related Fees - shall mean any and all payments, credits, or allowances or payments of
any taxes associated with the consumption or combustion of fuel by Buyer's and Seller's
[7]
Resources. Emission Related Fees shall include, but shall not be limited to, payments associated
with emissions of carbon dioxide, nitrogen oxide, and sulfur dioxide.
Ener - means electric energy measured in MWhs'with characteristics including three-phase
and alternating 60 Hz current.
EnergyBling Determinants -has the meaning set forth in Section 3.5.
Energy Requirements - shall have the meaning set forth in Section 3.5.
Entergy-means Entergy Services, LLC, or its successor.
EPT-means Eastern Prevailing Time in Carmel, Indiana.
Event of Default- shall have the meaning set forth in Section 5.1.
Execution Date - means the date on which the last Party signs this Agreement, as evidenced on
the signature page hereof.
FERC -means Federal Energy Regulatory Commission or its successor.
Financial Transmission Right or FTR - means a financial instrument that entitles the holder to
receive compensation for or requires the holder to pay certain congestion related transmission
charges that arise when the Transmission System is congested and differences in LMPs result
from the redispatch of resources out of economic merit order to relieve that congestion.
Fitch-means the Fitch Ratings, Inc., or its successor.
Force Majeure-has the meaning set forth in Section 4.11.
Four-Damage Contract Amount-means the amount that would be owed to Seller under this
Agreement for four (4) consecutive days, with each of the four (4) days being calculated by
multiplying the Contract Price by the 24-hour average meter reading (in MWh) for the
immediately preceding 7-day period.
Gains - means, with respect to any Party, an amount equal to the present value of the economic
benefit to it, if any (exclusive of Termination Costs), resulting from the termination of this
Agreement, determined in a commercially reasonable manner.
Good Utility Practice -means any of the practices, methods, and acts engaged in or approved by
a significant portion of the electric utility industry during the relevant time period, or any of the
practices, methods and acts which, in the exercise of reasonable judgment in light of the facts
known at the time the decision was made, could have been expected to accomplish the desired
result at a reasonable cost consistent with good business practices, reliability, safety and
expedition. Good Utility Practice is not intended to be limited to be optimum practice,method or
act to the exclusion of all others, but rather to be a range of acceptable practices, methods or acts
[8]
which could have been expected to accomplish the d sired result at a reasonable cost consistent
with reliability, safety, and expedition. Good Utility Practice includes due regard for, among
other things, the requirements of Governmental Authorities of competent jurisdiction, voluntary
agencies such as NERC and any successor organization, regional reliability standards and local
reliability practices.
Governmental Authority-means any federal,state,local,municipal or other governmental entity,
authority or agency, instrumentality, department, board, court, tribunal, RTO, ISO, regulatory
commission, or other body, whether legislative,judicial or executive (or a combination thereof),
having jurisdiction to impose obligations upon either Party or decide issues between the Parties
under this Agreement.Notwithstanding the foregoing,the City of West Memphis,Arkansas shall
not be deemed a Governmental Authority for purposes of this Agreement.
Guarantor-means as to Seller,NextEra Energy Capital Holdings, Inc., or its lawful successor or
assign, or such other entity in lieu thereof acceptable to Buyer in the exercise of its reasonable
discretion, which has provided a Guaranty to the Buyer.
Guaran - means a guaranty of payment and not performance, issued by a Guarantor
substantially in the form of Exhibit 7 hereto.
Interest Rate - means, for any date, two percent over the per annum rate of interest equal to the
prime lending rate as may from time to time be published in The Wall Street Journal under
"Money Rates"; provided, the Interest Rate shall never exceed the maximum lawful rate
permitted by applicable law.
ISO - shall mean an independent system operator or its successor approved by FERC, which
covers a geographic area which includes all or part of the Total Load.
Jointly Owned Units or JOU - shall mean Buyer's ownership share in the Independence Steam
Electric Station, Unit 1 and Unit 2, and the White Bluff Steam Electric Station, Unit 1 and Unit
2 which will be based on Buyer's ownership share of one percent(1%)multiplied by the total net
maximum dependable capacity rating of the Independence Steam Electric Station and White
Bluff Steam Electric Station as determined by tests performed by EAL and Buyer from time to
time. The Jointly Owned Units are coal fueled units that are jointly owned by Buyer and other
electric utilities and operated by EAL or others.
Law - means any applicable statute, law (including common law), ordinance, rule, regulation,
ruling, order, writ, injunction, judgment, decree, directive, policy, procedure, or other legal or
regulatory determination or interpretation by a Governmental Authority of competent
jurisdiction.
Letter of Credit - means one or more irrevocable, unconditional, non-assignable, payable-on-
demand standby letters of credit accessible to a Party, issued for a period of not less than ninety
days by a financial institution having a Credit Rating of at least (a) "A-" by S&P and by Fitch
and "A3" by Moody's, if such-entity is rated by all of S&P, Fitch and Moody's or (b) "A-" by
S&P, A-by Fitch or "A3" by Moody's, if such entity is rated by one or more of S&P, Fitch and
191
Moody's but not all three. Costs of a Letter of Cred t shall be borne by the applicant for such
Letter of Credit.
Letter of Credit Default- means the occurrence of any of the following events:
(a)the issuer of such Letter of Credit shall fail to maintain Credit Ratings' levels referenced
in the definition of"Letter of Credit"; or
(b)the.issuer of the Letter of Credit shall fail to comply with or perform its obligations under
such Letter of Credit if such failure shall be continuing after the lapse of any applicable grace
period therein; or
(c)the issuer of such Letter of Credit disaffirms, disclaims,repudiates,rejects in whole or in
part, or challenges the validity of, such Letter of Credit; or
(d) the Letter of Credit expires or terminates or ceases to be in full force and effect at any
time during the time period required under this Agreement, provided that any Termination
of the Letter of Credit is not the result of a total draw on the Letter of Credit by the
Beneficiary, as a result of a Letter of Credit Expiration Event; and the Party that would be
the Defaulting Party fails to replace the affected Letter of Credit with cash collateral or with
an alternative Letter of Credit in form and amount acceptable to the other Party within five
(5)Business Days (as to item (a) of this definition) or within three (3)Business Days (as to
items (b), (c) or (d) of this definition) of receiving written notice of the occurrence of an
event described in item (a)-(d) of this definition)from such other Party.
Letter of Credit Expiration Event - means that thirty (30) days prior to the expiration or
termination date of a posted Letter of Credit, such Letter of Credit is not extended with respect
to its Term or replaced with a Letter of Credit which has a period of more than thirty (30) days
until its expiration or termination date, and is for an amount at least equal to the amount required
to be posted by the applicable Party under this Agreement.
LMP -.means Locational Marginal Pricing, the market clearing price for Energy at a given
Commercial Pricing Node in the Transmission Provider Region which shall be equivalent to the
marginal cost of serving demand at the Commercial Pricing Node while meeting Zonal and
Market- Wide Operating Reserve Requirements, and includes the components of Energy, MLC,
and MCC pursuant to the MISO tariff.
Local Resource Zone-means a geographic area as defined by MISO that distinguishes Planning
Resource deliverability.
LTTR-means ARRs allocated in Stage IA of the Annual ARR Allocation process.LTTRs carry
annual rollover rights lasting ten (10)years or more.
LZ CPNode-means the EAI.WMULDLD CPNode in MISO.
[10]
Marginal Congestion Component or MCC - meas the component of LMP which is the
transmission congestion charge reflecting the cost of dispatching Resources available to the
Transmission Provider such that transmission constraints are respected, as measured between the
location and the reference bus.
Marginal Losses Component or MLC - means the component of the LMP at each Commercial
Node accounting for the cost of Marginal Losses, as measured between the Commercial Pricing
Node and the reference bus.
Market Participant or MP-means the entity financially responsible for settling Capacity,Energy,
Operating Reserves, and/or Transmission charges and credits with MISO, as further defined in
the MISO tariff.
Meter Data Management Agent or MDMA-means an entity designated by the Market Participant
that provides meter data, at each Commercial Pricing Node for which it is designated, to the
Transmission Provider on a Market Participant's behalf.
MISO-means the Midcontinent Independent System Operator, an Independent System Operator
(ISO) and the Regional Transmission Organization (RTO) that provides open-access
transmission service, monitors the high voltage transmission system, and facilitates the
centralized dispatch of resources within a market construct, throughout the Midwest United
States.
MISO Tariff - means the MISO Open Access Transmission, Energy and Operating Reserve
Markets Tariff administered by MISO, as amended,modified or supplemented from time to time.
Module E Capacity Tracking Tool or MECT-means the electronic tool used by the Transmission
Provider and Market Participants to track and analyze compliance with RAR obligations,
including, but not limited to designating and transferring ZRCs.
Moody's -means Moody's Investor Services, Inc., or its successor.
NERC -North American Electric Reliability Corporation or its successor.
NITS -means Network Integration Transmission Service provided by MISO or_any other entity
transmitting or transporting the Energy on behalf of Buyer or Seller to the Delivery Point for
Energy.
NITS Agreement- means the agreement, as amended from time to time, entered into by Market
Participant to secure Transmission Service from designated Network Resources to the Delivery
Point for Energy as the NITS Transmission Customer under the MISO Tariff.
Network Operating Agreement - means an executed agreement between MISO and a Market
Participant that contains the terms and conditions under which the Market Participant (or Asset
Owner as direct owner/operator) shall operate its facilities and the technical and operational
[11]
matters associated with the implementation of Netw Irk Integration Transmission Service under
Module B of the MISO Tariff.
Network Resource -means any designated generation or portion thereof, that is owned or leased
by a Transmission customer, or whose output is under contract to a Transmission customer, and
that is designated under the Network Integration Transmission Service provisions of the MISO
tariff.
New MISO Charge - means any new tariff charge assessed on Seller by MISO with respect to .
Total Load for which MISO obtains FERC acceptance or approval after the Execution Date, as
evidenced by one or more regulatory filings with, and acceptance of the same by, the FERC.
Non-Defaulting Party- shall have the meaning set forth in Section 5.2.
Operating Day- means the hours between HE 1 and HE 24 EPT.
Operating Committee - means a committee composed of one member appointed by Seller and
one member appointed by Buyer responsible for coordinating the rights and responsibilities of
each Party as set forth in this Agreement.
Pass-Through Amounts - shall have the meaning set forth in Section 3.4.
Performance Assurance-with respect to either Party,means collateral in the form of either cash,
Letter(s) of Credit, or other security acceptable to the Requesting Party, and additionally, with
respect to Seller, a Guaranty in form and amount acceptable to the Buyer or the increase in the
amount of an issued Guaranty in amount acceptable to the Buyer.
Planning Reserve Marginquirement or PRMR-means the amount of ZRCs required of each
LSE with Coincident Peak Demand in a Local Resource Zone to meet the LSE's Resource
Adequacy Requirements.
Planning Resource Auction (PRA) - means the annual auction that is conducted by MISO to
determine the ACP and the cleared ZRC offers for each Local Resource Zone for the applicable
Planning Year.
Planning ear-means the period of time from June 1 st of one year to May 31 st of the following
year that is used for developing and implementing resource plans in MISO.
Posting Party - shall mean with respect to each Party, the Party providing, or causing to be
provided, Performance Assurance under this Agreement to the other Party.
Prospective Significant Load - shall have the meaning set forth in Section 4.12.
Real-Time LMP-means the LMP as determined in the Real-Time Energy and Operating Reserve
Market of MISO.
[12]
Regulating Reserve -means an ancillary service in w�'ich Capacity is held in reserve to meet the
frequency response changes in the MISO Balancing Authority in accordance with applicable
Reliability Standards.
Requesting Party-shall have the meaning set forth in Section 5.8.3.
Resource Adequacy Requirements or RAR - means the planning reserve procedures and
requirements in Module E of the MISO Tariff and the Business Practices Manual for Resource
Adequacy that ensure there are adequate Planning Resources available to enable load serving
entities to reliably serve load.
RTO - means a FERC-approved regional transmission entity or its successor, which covers a
geographic area which includes all or part of the Total Load.
Rules - means requirements, tariffs, rules, orders, regulations, and procedures authorized or
established by the applicable Governmental Authority that may affect the Parties' obligations in
this Agreement, as amended, restated, and superseded from time to time.
S&P - means the Standard & Poor's Rating Group (a division of McGraw-Hill, Inc.) or its
successor.
Scheduling Agent - means an entity designated by a Market Participant that has the authority to
conduct business in the Transmission Provider Region on behalf of the Market Participant.
Service Territory - means, with respect to Buyer, the geographic territory within which Buyer
has a right under applicable Law to provide retail electric services.
Settlement Amount - means, with respect to a Party, such Party's Termination Losses or Gains,
as applicable, and, if the Party is the Non-Defaulting Party, that Party's Termination Costs,
expressed in U.S.Dollars,which such Party incurs as a result of the liquidation of this Agreement
pursuant to Section 5.2.
Spinning Reserve - means Contingency Reserve synchronized to the Transmission System that
can be converted to Energy upon instruction by MISO.
Supplemental Reserve-means Contingency Reserve that is not considered Spinning Reserve that
can be converted to Energy upon instruction by MISO.
Swap - means a "swap" as defined in Section la(47) of the U.S. Commodity Exchange Act, as
amended, 7 USC Section 1, et seq. and any Commodity Futures Trading Commission rules,
regulations,orders,supplementary information,guidance,questions and answers,staff letters and
interpretations published or issued thereunder, in each applicable case as amended.
Termination Costs - means, with respect to the Non-Defaulting Party, brokerage fees,
commissions, and other similar third-party transaction costs and expenses reasonably incurred by
the Non-Defaulting Party either in Terminating any arrangement pursuant to which it has hedged
[13]
its obligations or entering into new arrangements which replace this Agreement. Termination
Costs include all reasonable professional service fees and expenses,including without limitation,
reasonable attorneys' fees, incurred by the Non-Defaulting Party in connection with the
Termination of this Agreement.
Termination Losses - means, with respect to any Party, an amount equal to the present value of
the economic loss to it, if any (exclusive of Termination Costs), resulting from Termination of
this Agreement, determined in a commercially reasonable manner.
Termination Payment- shall have the meaning set forth in Section 5.3.
Total Load-means the hourly metered Energy at the Delivery Point for Energy and shall include
the electric load of all classes of customers served by Buyer in Buyer's Service Territory, as such
load exists on the Execution Date and as such load may increase or decrease (i) commensurate
with Buyer's customers' needs and/or (ii) due to de minimis geographic changes in Buyer's
Service Territory;provided that Total Load shall exclude the load associated with any Prospective
Significant Load. Seller shall not be responsible for any increase in Total Load resulting from
changes in Buyer's Service Territory that occur as a result of a merger or consolidation with, or
acquisition of, or as a result of a territory swap with another entity.
Transmission Provider-means the MISO or any successor organization.
Transmission Services - means NITS, including applicable Ancillary Services as defined in this
Article 1.
Unforced Capacity or UCAP- means the amount of Capacity in MW assigned by MISO to a
Planning Resource (as defined by MISO) after accounting for its forced outage rate or historic
availability.
Utility Special Entity No-Action Letter-means Staff No-Action Relief Revised Relief from the
De Minimis Threshold for Certain Swaps with Utility Special Entities, Division of Swap Dealer
and Intermediary Oversight, CFTC Letter No. 14-34,(Mar. 21, 2014).
Zonal Resource Credit or ZRC - means one (1) MW unit of Planning Resource which has been
converted from a MW of Unforced Capacity to a credit in the Module E Capacity Tracking Tool,
which is eligible to be offered by a Market Participant into the Planning Resource Auction, to be
sold bilaterally, and/or to be submitted through a Fixed Resource Adequacy Plan.
Article 2. BASIC UNDERSTANDINGS
Buyer,and Seller agree that this Agreement provides for services in MISO as of the Effective
Date until the end of the Delivery Term. Services provided in this Agreement establish the
settlement of activities of Buyer and Seller in MISO as follows:
(a) the procurement of Energy to meet the Total Load of Buyer at the LZ CPNode for the
Delivery Term for Energy;
[14].
(b) the purchase of Buyer's Energy as scheduled by Buyer to Seller on a daily basis for the
Delivery Term for Energy;
(c) the procurement of Capacity via Zonal Resource Credits in an amount equal to the
Capacity Net Quantity for the Delivery Term for Capacity;
(d) the procurement of certain Ancillary Services, identified in Exhibit 1, to meet the
requirements of Buyer's Total Load at the LZ CPNode,for the Delivery Term for Energy;
(e) the designation of Seller as Billing Agent, Scheduling Agent and Meter Data Management
Agent, and the registered Market Participant for Energy and Operating Reserve Market
functions for Buyer in MISO as set forth herein for the Delivery Term for Energy;
(f) the registration, receipt and management of ARR and FTR from MISO to the Parties for
the Delivery Term for Energy.
Article 3. TERM AND COMMENCEMENT OF SERVICES AND CONTRACT
PRICE
3.1 Term
The Term of this Agreement shall begin on the Effective Date and end at the conclusion of the
Delivery Term. Completion of the Delivery Term shall not affect or excuse the performance of
either Party under any provision of this Agreement that by its terms survives the Delivery Term,
or the fulfillment of any obligation arising from acts or events that occurred while this Agreement
was in effect, including but not limited to,the obligation to pay any amounts due from one Party
to the other.
3.2 RESERVED
3.3 Contract Price
For Capacity, Energy, Ancillary Services for which Seller is responsible under Exhibit 1, and
services as Scheduling Agent, MDMA and Billing Agent, Buyer shall pay, during the Delivery
Term for Energy, the Contract Price as set forth in the table below, multiplied by the Energy
Billing Determinants, as defined in Section 3.5 of this Agreement. A sample bill is shown in
Exhibit 4.
Delivery Term Contract Price
$1Mwh
June 1,2021 through May 31.2026 $32.08
[15]
3.4 Pass-Through Amounts
In addition to the amount calculated under Section 3.3 above, each Month, Seller shall pass
through to Buyer, and Buyer shall be fully responsible for, (A) all charges assessed (and credits
distributed)by MISO with respect to Total Load for which Seller is not responsible under Exhibit
1, including without limitation Transmission Service charges (if any), Ancillary Service charges
allocated to Buyer under Exhibit 1, any Zonal Deliverability Benefits (as defined by MISO)
distributed by MISO to Seller on behalf of Buyer; (B) any taxes for which Buyer is responsible
under Section 7.6; (C) any New MISO Charge(s) appropriately assigned to Buyer as agreed by
Seller and Buyer; (D) any revenues received by Seller and payments made by Seller for Excess
Capacity and Deficient Capacity,respectively, under Section 4.4(b); and (E) any amounts agreed
to by the Parties under Section 4.10 and Section 4.15 (collectively, "Pass-Through Amounts").
3.5 Energy Billing Determinants
On an hourly basis, the Seller will record the meter readings at the Delivery Point for Energy.
The hourly meter readings will be summed by month. The sum of the hourly meter readings (in
MWh) at the Delivery Point for Energy shall be the monthly "Energy Requirements." The
"Energy Billing Determinants"for a given calendar month shall be the Energy Requirements for
such month multiplied by a factor of(1.0055)to account for transformer losses.
3.6 Payment for Buyer's Energy
Buyer shall sell to Seller, each hour during the Delivery Term for Energy, Buyer's Energy on a
firm basis. Seller shall pay Buyer (through a monthly credit to Buyer's invoice) a fixed price of
$26.68 per MWh multiplied-by sum of Buyer's Energy each month. Buyer shall submit a day-
ahead Financial Schedule, as defined by MISO, to transfer Buyer's Energy for each hour from
Buyer to Seller, and Seller shall confirm Buyer's submission, in accordance with applicable
Rules. Buyer's submissions shall be on a monthly basis or otherwise as required by applicable
Rules. For the avoidance of doubt, Buyer's obligation to schedule and deliver Buyer's Energy
to Seller is independent from the actual generation of Buyer's Resources.
3.7 Metering
Buyer shall own and operate, or ensure access to, any existing or additional meters or SCADA
systems necessary to provide load data to Seller. Buyer agrees to maintain these meters/systems
in accordance Good Utility Practice and to allow Seller, or an affiliate of Seller, to verify the
quality of the meters/systems. Seller shall be responsible for all communications to existing and
any required additional metering. In case of questions as to the accuracy of the metering
instruments, either Party shall have the right at any time upon giving reasonable notice to the
other Party to have such instruments tested and if necessary re-calibrated, with both Parties
represented at the test and re-calibration. Any meter tested and found to register within one-half
of one percent (0.5%) of the recognized comparative standard shall be considered correct and
accurate. If the test shows that any of the instruments are inaccurate, proper allowance as shown
by the test to be necessary shall be made to the Party entitled thereto but not for a period longer
than sixty(60) days. If the meters fail to register at any time during the month the Capacity and
[16]
Energy delivered during such month shall be estimated upon the basis of the best available data
considering the actual Capacity and Energy delivered!under substantially similar conditions.
Article 4. BUYER AND SELLER OBLIGATIONS
4.1. General Obli ate ions
(a) Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, during the
Delivery Term for Energy(i)all Energy required to meet Total Load and(ii)all Ancillary
Services for which Seller is responsible under Exhibit 1, as required to meet Buyer's
obligations with respect to Total Load, and during the Delivery Term for Capacity,
Capacity in an amount equal to the Capacity Net Quantity for each Planning Year. Buyer
shall pay Seller the Contract Price for all such Energy, Ancillary Services and Capacity,
plus any pass-through amounts in accordance with Section 3.4.
(b) Seller shall register and maintain its status as a Market Participant with MISO for Energy
and Operating Reserve Market functions for the duration of the Delivery Term. Buyer
shall register and maintain its status as a Market Participant with MISO for certain
Transmission-related functions for the duration of the Delivery Term. Seller shall be the
registered MP on behalf of Buyer for Energy and Operating Reserve Market functions
during the Delivery Term. In the event Buyer registers as a Market Participant for Energy
and Operating Reserve Market functions with MISO prior to the end of the Delivery
Term, Buyer and Seller shall coordinate with MISO to transfer Buyer's rights and
responsibilities (as represented as an Asset Owner in Seller's MP account) from Seller's
MP account to Buyer's MP account, including, without limitation, any of Buyer's
Transmission Services, ARR, FTR and Zonal Resource Credits. Notwithstanding the
forgoing, under no circumstance shall Buyer's MP status adversely affect Seller's rights
and obligations as set forth in this Agreement, including but not limited to (i) Seller's
access to Buyer's MP account with MISO,(ii)Seller's ability to perform Scheduling Agent
functions and related functions on behalf of Buyer, and (iii) Seller's ability to invoice
Buyer as set forth in Exhibit 1.
(c) Seller shall be the designated Scheduling Agent for all Buyer activities in MISO, other
than scheduling of Buyer's Energy, for the duration of the Delivery Term. Buyer shall
coordinate with Seller in registering Seller as Scheduling Agent on behalf of Buyer.
(d) Seller shall be the designated Billing Agent for all Buyer activities in MISO, other than
settlements relating to Buyer's Resources, for the duration of the Delivery Term.
(e) Seller shall be the designated MDMA on behalf of Buyer.
(f) Seller, as agent for Buyer, shall coordinate with Buyer in maintaining Buyer's
Transmission Service pursuant to the terms and conditions of the MISO Tariff.Buyer, as
MP for certain Transmission-related functions, shall directly receive Transmission
,Service invoices from MISO. If requested by Buyer, Seller shall also assist Buyer with
requesting new Transmission Services as required to transmit Buyer's future resources.
All costs associated with requesting, obtaining and maintaining such Transmission
[17]
Services shall be paid by Buyer, including any required advanced costs and expenses,
except as provided in Section 4.7. Upon expiration or Termination of this Agreement,
Buyer and Seller shall coordinate with MISO to transition Buyer's assets pursuant to
Section 4.1(k).
(g) Buyer shall provide Seller with all relevant data and information, as permitted by
applicable law and Buyer's agreements with EAL, to the full extent necessary or
appropriate to enable Seller to provide the services in this Agreement. To assist Seller
with forecasting and planning during the Delivery Term, if Buyer anticipates significant
changes to Buyer's Total Load, whether such changes are relating to an increase or
decrease to energy usage, Buyer will promptly notify Seller of such prospective changes.
(h) Each party shall be responsible for Emissions Related Fees for their respective resources
(Buyer's Resources and all other resources for Seller).
(i) Seller shall be responsible for the procurement of Ancillary Services at the LZ CPNode,
identified in Exhibit 1, to meet the requirements of Buyer in MISO. Seller shall settle
directly with MISO for such charges.
(j) At least 90 days prior to the Effective Date, Seller shall provide a read-only OATT digital
certificate ("Digital Certificate") to Buyer for purposes of Buyer obtaining MISO
settlement information from the MISO portal specific to Buyer as an Asset Owner in
MISO, including with respect to, without limitation, Buyer's Transmission Services,
ARR, FTR and Zonal Resource Credits. Buyer shall not copy or distribute the Digital
Certificate, or otherwise provide access to any third party to the information residing in
the MISO portal specific to Buyer as an Asset;Owner in MISO;provided that Buyer shall
have the right to distribute such information(received from the MISO portal using Buyer's
Digital Certificate)pursuant to the Confidentiality provisions of this Agreement.
(k) At least 90 days prior to the end of the Delivery Term for Energy or the Delivery Term
for Capacity, as applicable, the Parties shall coordinate with MISO to transfer Buyer's
rights and responsibilities(as represented as an Asset Owner in Seller's MP account)from
Seller's MP account to Buyer's MP account, including,without limitation, any of Buyer's
Transmission Services, ARR, FTR and Zonal Resource Credits from the applicable MP
account for the period following such Delivery Term. The Parties shall also submit to
MISO, subject to MISO's tariff, any changes in the commercial model as a result of the
pending expiration of such Delivery Term.
(1) If at any time during the Delivery Term this Agreement, any obligation of either Party
under this Agreement or any portion thereof is determined to be a Swap, Buyer shall be
deemed to have represented to Seller immediately prior to Buyer and Seller's entry into
such Swap that (i) Buyer is a "utility special entity" at such time and (ii) that such Swap
is a "utility operations-related swap" (as each such Term is defined in the Utility Special
Entity No-Action Letter).
118]
4.2 Buyer's Energy
Buyer shall submit to Seller day ahead Financial Schedules for Buyer's Energy as described in
.Section 3.6.
4.3 Scheduling Agent
Seller, as Scheduling Agent on behalf of Buyer, shall submit Demand Bids for Energy at the LZ
CPNode. Seller shall day ahead forecast the Total Load for the applicable period and submit
Demand Bids to purchase Energy at the LZ CPNode. Seller, in its sole discretion,shall determine
the day ahead hourly.volumes of Energy to submit Demand Bids to MISO. Seller shall not submit
Resource Offers on behalf of Buyer unless authorized by Buyer in writing.
4.4 Resource Adequacy Requirements
(a) Seller shall provide Capacity in an amount equal to the Capacity Net Quantity for each
Planning Year. Seller shall be financially responsible for the costs of acquiring Zonal
Resource Credits on behalf of Buyer, in an amount equal to the Capacity Net Quantity.
The Capacity Net Quantity for each Planning Year,measured in ZRCs,will be established
in accordance with Section 3.1 of MISO's Resource Adequacy Business Practices Manual
("MISO RA Manual"). Each November 1 (or otherwise by the deadline established by
MISO), Seller will submit to MISO, for the upcoming Planning Year: (i) the Coincident
Peak Demand forecast for the Entergy Arkansas, LLC Local Balancing Area ("EES
LBA"),(ii)the Transmission Loss Percentage for the EES LBA,as such terms are defined
in the MISO RA Manual, and(ii)the Planning Reserve Margin Requirement in Unforced
Capacity for the MISO region. As of the Execution Date, Seller estimates that the
Capacity Net Quantity for Planning Year 2021 is 61 MW.
(b) If, for any Planning Year, the UCAP of Buyer's Resources is greater than 32 MW (the
amount of such incremental excess Capacity,"Excess Capacity"),Seller,as Buyer's agent
and at Buyer's direction,will sell the Excess Capacity into the Planning Resource Auction
or to third parties in bilateral transactions between Buyer and such third parties, and will
pass through to Buyer all amounts received by Seller for such Capacity as Pass-Through
Amounts. If, for any Planning Year,the UCAP of Buyer's Resources is less than 32 MW
(the amount of such incremental deficient Capacity, "Deficient Capacity"), Seller, as
Buyer's agent and at Buyer's direction, will purchase Capacity in an amount equal to the
Deficient Capacity from the Planning Resource Auction or from third parties in bilateral
transactions between Buyer and such third parties, and will pass through to Buyer all
amounts paid by Seller for such Capacity as Pass-Through Amounts.
(c) With respect to the period commencing upon expiration of the Delivery Term for
Capacity, and ending May 31, 2026 (such period, the "Capacity Gap Period"), if Buyer
wishes to purchase Capacity from Seller to meet Buyer's Resource Adequacy Obligations
Buyer may request price quotes from Seller for such Capacity, delivered at the Delivery
Point for Capacity. Seller will use commercially reasonable efforts to provide two or
more such price quotes sourced from third-parties, and will have the right to match the
.lowest such quote (such right to present a matching sale price, a "Matching Capacity
[19]
Offer"). If Buyer elects to purchase such Capacity from Seller (at either a third-party
offer price or at Seller's Matching Capacity Offer), the Parties shall promptly amend this
Agreement to incorporate the agreed-upon Capacity terms for the Capacity Gap Period.
4.5 Losses
(a) Buyer shall pay for the MLC for Buyer's Energy during the Delivery Term. Seller shall
pay for the MLC for Buyer's Load during the Delivery Term (excluding with respect to
MLC for any Prospective Significant Load supply not provided by Seller).
(b) Pursuant to Section 4.1(f), Buyer shall be responsible for all Transmission Service costs,
including costs of losses (if any) as determined by the relevant Transmission Owner(s),
Wholesale Distribution Service tariff(s), and MISO.
(c) Seller, as necessary, shall gross up all meter readings to represent the high side values in
reporting meter data to MISO in its role as MDMA on behalf of Buyer. Seller shall
multiply the hourly meter readings iri MWh for the Delivery Point for Energy by a factor
of(1.0055) to account for transformation losses. The Parties agree this methodology is
consistent in providing final meter values for (i) meter data reporting and (ii)
determination of the Energy Billing Determinants.
4.6 ARR Entitlements and Related Activities
(a) Buyer, as a network customer of MISO, is entitled to receive certain ARR entitlements
pursuant to the MISO tariff. Subject to the timelines provided by MISO, Seller shall
coordinate with Buyer on the registration and nomination of such ARR for each Planning
Year.Unless otherwise instructed by Buyer, by no later than two (2)Business Days prior
to the effective deadline established by MISO for the relevant Planning Year, Seller shall
register and nominate all eligible ARR during the relevant period.
(b) Subject to the immediately preceding section, unless otherwise instructed by Buyer no
less than five(5)business days prior to the MISO deadline for submittal, Seller shall self-
schedule all ARR sourced from Buyers Resources to convert to FTR on behalf of Buyer
in the MISO Annual Auction.
(c) As of the Execution Date, Buyer owns the ARR entitlements as set forth in Exhibit 2.
Any rights, obligations, credits, and charges as a result of the ARR entitlements and
subsequent FTR Auction shall be the responsibility of Buyer.
4.7 Transmission
Buyer, as MP for Transmission-related functions, shall procure and maintain its NITS from
Buyer's Resources to Buyer's LZ CPNode. Seller, in its sole discretion and in coordination with
Buyer, may procure and maintain Transmission Services for purposes of meeting its obligations
in this Agreement. Any costs incurred by Buyer as a result of Seller's procurement of Schedules
7 and/or Schedules.8 of the MISO tariff which lists the LZ CPNode as the Point of Delivery for
such service shall be passed through to Seller.Buyer shall be responsible for all other costs billed
[20]
by MISO for transmission and transmission-related services, except as set forth in this
Agreement.
4.8 Congestion Management
Buyer shall be responsible for the costs and credits of congestion as calculated by MISO for
Buyer's Energy at the LZ CPNode. Seller shall be responsible for the costs and credits of
congestion as calculated by MISO for Buyer's Total Load at Buyer LZ CPNode (excluding with
respect to congestion from any Prospective Significant Load supply not provided by Seller).
4.9 Local Balancing Authority
(a) Prior to the Execution Date of this Agreement, Buyer executed a Local Balancing
Authority Agreement with Entergy Arkansas,'LLC. EAL shall be the LBA provider to
Buyer for the Delivery Term. Seller shall coordinate with EAL as the LBA provider as
necessary to meet Seller's obligations in this Agreement. Seller shall not be responsible
for any LBA (or Balancing Authority) Reliability Standards under this Agreement,
including any fines, fees, expenses, or costs relating to the operation of an LBA except in
the case of Seller's gross negligence or willful misconduct (collectively, "LBA Costs"),
and Buyer shall reimburse Seller for any and all such LBA Costs incurred by Seller.
(b) During the Delivery Term, Seller shall provide load forecast data to MISO, as required
by the MISO tariff. Buyer shall provide its annual 10-year load forecast to Seller at least
15 days prior to MISO's submittal deadline for such information.
(c) During the Delivery Term, Seller shall act to assist Buyer with compliance to avoid any
noncompliance with the applicable NERC and SERC reliability standards, or any other
applicable law,rule or regulation,provided however,that Seller shall not be liable for any
actions or inactions of Buyer, Buyer's Resources, EAL as the LBA provider, or MISO as
the Transmission Provider and Balancing Authority.
4.10 Buyer Resource Outages, Derates or Retirements
In the event that Buyer experiences an outage or derate at either Buyer Resource, or a Buyer
Resource is otherwise retired, and wishes to purchase replacement Energy to cover its obligation
to deliver Buyer's Energy to Seller during the expected outage period or otherwise as a result of
such derate or retirement, Buyer may request price quotes from Seller and/or directly from third
parties for such replacement Energy,delivered at the Delivery Point for Energy. If Buyer requests
price quotes from Seller, Seller will use commercially reasonable efforts to provide two or more
such price quotes sourced from third-parties, and will have the right to match the lowest such
quote (such right to present a matching sale price, a``Matching Replacement Energy Offer"). If
Buyer elects to purchase such replacement Energy from Seller(at either a third-party offer price
or at Seller's Matching Replacement Energy Offer), Seller will adjust the applicable monthly
payment amounts under this Agreement as required to account for Buyer's purchase of such
replacement Energy from Seller, which amounts shall be Pass-Through Amounts.
[21]
4.11 Force Majeure
To the extent either Party is prevented by Force Majeure from carrying out, in whole or in part,
its obligations under this Agreement and such Party ("Claiming Party") gives written notice and
details of the Force Majeure to the other Party as soon as practicable,then,unless this Agreement
provides otherwise, the Claiming Party shall be excused from the performance of its obligations
(other than the obligation to make payments then due or becoming due with respect to
performance prior to the Force Majeure). The Claiming Party shall remedy the Force Majeure
with all reasonable dispatch. The non-Claiming Party shall not be required to perform or resume
performance of its obligations to the Claiming Party during the suspension of the obligations of
the Claiming Party excused by Force Majeure.
For purposes of this Agreement, "Force Majeure" means any cause, event, condition or
circumstance beyond a Party's reasonable control, including, without limitation, actions of a
Governmental Authority, storm, flood, lightning, drought, earthquake, fire, explosion, civil
disturbance, labor dispute,act of God or public enemy. Interruption by a transmitting utility shall
not be deemed to be a Force Majeure unless such an interruption is due to an event of Force
Majeure or implementation of curtailment procedures as set forth in the transmitting utilities tariff
or as directed by NERC or any successor organization.A cause, event,condition or circumstance
that (i) affects the cost of generating Energy at any particular electric generating facility or the
cost of transmitting such Energy to the Delivery Point for Energy, or (ii) merely causes an
economic hardship to either Party, shall not be deemed a Force Majeure.
No Party shall be relieved of its obligations to perform if such failure is due to causes arising out
of its own negligence or due to removable or remediable causes which it fails to remove or
remedy within a reasonable time period.
4.12 Prospective Significant Load
Any new retail customer of Buyer, or new load of an existing customer,taking retail service from
Buyer after the Execution Date, whose peak load in any single hour is 3.5 MW or greater (at a
single meter point or multiple meter points) shall be a "Prospective Significant Load" for
purposes of this Agreement. To the extent Buyer becomes aware of a Prospective Significant
Load, Buyer shall inform Seller in writing as soon as practicable.Buyer and Seller shall mutually
agree upon a pricing structure to provide Capacity, Energy, and Ancillary Services to Buyer for
such Prospective Significant Load and the Parties will negotiate in good faith an amendment or
similar language to provide service to Buyer for such Prospective Significant Load under this
Agreement. If Buyer and Seller do not agree on terms and conditions (including pricing) to
provide Capacity, Energy, and Ancillary Services to such Prospective Significant Load, Buyer
shall have the right to secure third party supply for such Prospective Significant Load and Seller
shall assist Buyer in scheduling such supply to serve the Prospective Significant Load. Any
Prospective Significant Load secured by Buyer and'supplied by Seller pursuant to this Section
4.12 will be considered as part of Total Load. Notwithstanding the foregoing, this Section 4.12
shall not apply to the following planned retail load that were disclosed to Seller prior to the
Execution Date: "Southland-Gaming and Racing", a casino which has a planned incremental peak
Demand of approximately 4 megawatts with an estimated 70%load factor and expected to be on-
[22]
line by the end of the first quarter of calendar ye r 2021. The name used to identify the
abovementioned.planned retail load may or may not reflect the identity of the eventual owner of
the facilities.
4.13 Operating Committee
Buyer and Seller will form the Operating Committee within forty-five days following the
Effective Date. The purpose of the Operating Committee is to facilitate the efficient coordination
and communication of the rights and responsibilities of each Party as set forth in this Agreement.
The Operating Committee may adopt such rules as its members unanimously determine are
necessary or appropriate for the operation of the Operating Committee and shall meet at least one
time per year and from time to time as it deems necessary; provided, however, that for the
avoidance of doubt, any such rules shall not be deemed to be an amendment or modification to
this Agreement.
4.14 Rate Covenant
Buyer shall fix the rates, fees and charges for electric power and energy which Buyer will charge
and collect from its constituents to provide sufficient revenues ("Electric Revenues") to satisfy
Buyer's obligations under this Agreement.
4.15 Renewable Energy Requirements
If new laws,rules or regulations are enacted after the Execution Date that require Buyer to supply
a certain portion or percentage of Buyer's load with renewable energy(any such new mandate, a
"Renewable Portfolio Standard"), Buyer may request price quotes from Seller, and/or directly
from third parties,for eligible renewable energy,renewable energy credits or other environmental
attributes sufficient to satisfy the Renewable Portfolio Standard and Buyer's obligations
thereunder(such products, collectively,the"RPS Product"). If Buyer requests price quotes from
Seller, Seller will use commercially reasonable efforts to provide two or more such price quotes
sourced from third-parties, and will have the right to match the lowest such quote (such right to
present a matching sale price, a"Matching RPS Product Offer"). If Buyer elects to purchase the
RPS Product from Seller (at either a third-party offer price or at Seller's Matching RPS Product
Offer), Seller will adjust the applicable monthly payment amounts under this Agreement as
required to account for Buyer's purchase of such RPS Product from Seller, which amounts shall
be Pass-Through Amounts.
4.16 RESERVED
4.17 Behind-the-Meter Generation
If,at any time after the Execution Date,any Behind-the-Meter Facility is installed within Buyer's
Service Territory ("New Behind-the-Meter Facility"), Buyer shall provide Seller written notice
of such New Behind-the-Meter Facility at least sixty(60) days prior to the effective date of such
installation. Buyer shall install and maintain meter(s) at the New Behind-the-Meter Facility
site to allow for hourly metered readings of New Behind-the-Meter Facility output(such meter(s),
[23]
the "Facility Site Meter(s)" and such readings for each hour, "Hourly Meter Data"). If, in any
calendar year during the Delivery Term (or partial year, in the case of the first and last years of
the Delivery Term), the energy production from New Behind-the-Meter Facilities reduces the
Total Load that Seller would otherwise have sold to Buyer by 10 percent (10%) or more during
such period (the amount, in MWh, by which such reduction in Total Load exceeds 10 percent
(10%), the "Deficient Annual Load"), then one Party shall pay the other an Annual Deficient
Load Adjustment, as calculated below. The Annual Deficient Load Adjustment will be added or
subtracted, as applicable, to the first monthly payment amount after Seller has calculated such
adjustment. An illustrative example of the Annual Deficient Load Adjustment calculation is
attached hereto as Exhibit 8.
No later than 10 days after the end of each calendar quarter,Buyer shall deliver to Seller, for each
New Behind-the-Meter Facility,the Hourly Meter Data for such New Behind-the-Meter Facility
for the prior calendar quarter(or portion of calendar quarter, if applicable).
For purposes of this Section 4.17, "Annual Deficient Load Adjustment" equals, for the relevant
calendar year(or portion thereof),the product of(i)the Deficient Annual Load multiplied by(ii)
(the Contract Price minus the Load-Weighted Average Day-Ahead LMP at the Delivery Point
for Energy). If the Annual Deficient Load Adjustment is positive, Buyer shall pay Seller the
Annual Deficient Load Adjustment, and if the Annual Deficient Load Adjustment is negative,
Seller shall pay Buyer the absolute value of the Annual Deficient Load Adjustment.
"Load-Weighted Average Day-Ahead LMP" means, with respect to the Deficient Annual Load
(MWh), the Hourly Generation Quantity for each hour multiplied by the Day-Ahead LMP at the
Delivery Point for such hour, divided by the sum of Hourly Generation Quantities(MWh)for the
relevant calendar year(or portion thereof).
"Hourly Generation Quantity" means, with respect to any New Behind-the-Meter Facility, the
hourly electrical output of such facility(MWh), measured at the Facility Site Meter(s).
Article 5. EVENTS OF DEFAULT AND REMEDIES
5.1 Events of Default
An 'Event of Default" shall mean with respect to a Party, if any("Defaulting Party"):
(a) the failure by the Defaulting Party to make, when due, any payment or perform any
material obligation required under this Agreement, or any other agreement between the
Parties,provided such failure is not remedied within three(3)Business Days after written
notice of such failure is given to the Defaulting Party,
(b) any representation or warranty made by the Defaulting Party herein shall prove to have
been false or misleading in any material respect when made or deemed to be repeated,
(c) the failure by the Defaulting Party to perform any material covenant set forth in this
Agreement and such failure is not cured within three (3) Business Days after written
notice thereof to the Defaulting Party,
[241
(d) the Defaulting Party becomes Bankrupt,
(e) the occurrence of a Letter of Credit Default, or
(f) such party consolidates or amalgamates with, or merges with or into, or transfers all or
substantially all of its assets to, another entity and, at the time of such consolidation,
amalgamation,merger or transfer, resulting, surviving or transferee entity fails to assume
all of the obligations of such Party under this Agreement to which it or its predecessor
was a party by operation of law or pursuant to an agreement reasonably satisfactory to the
other Party.
5.2 Declaration of an Early Termination Event and Calculation of Settlement Amount
If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing,
the other Party(the "Non-Defaulting Party") shall have the right(i)to designate a day,no earlier
than the day such notice is effective and no later than twenty (20) days after such notice is
effective, as an early Termination date ("Early Termination Date") to accelerate all amounts
owing between the Parties and to liquidate and Terminate this Agreement; (ii) withhold any
payments due to the Defaulting Party under this Agreement; and (iii) suspend performance. The
Non-Defaulting Party shall calculate,in a commercially reasonable manner,a Settlement Amount
for the Agreement as of the Early Termination Date.
5.3 Calculation of Termination Payment
The Non-Defaulting Party shall calculate a single, liquidated payment (the "Termination
Payment"). In calculating the Termination Payment, the quantities to be used shall be the actual
Total Load from the comparable period in the most recent 12 months. The Termination Payment
shall be calculated by netting together:
(a) the Settlement Amount calculated to be due to the Non-Defaulting Party;
(b) any or all other amounts due from the Defaulting Party under this Agreement, and
(c) any or all other amounts due to the Defaulting Party under this Agreement.
The Non-Defaulting Party may, at its sole election, apply any Performance Assurance or other
form of security then available to the Non-Defaulting Party against any Termination Payment
owed by the Defaulting Party to the Non-Defaulting Party.
The Termination Payment shall be due to or due from the Non-Defaulting Party as appropriate.
For purposes of clarity, the Non-Defaulting Party will not be liable for any disruption of the
Defaulting Party's normal operations arising out of any suspension or Termination of this
Agreement, or for any costs or expenses related thereto, to the extent such suspension or
Termination was carried out in accordance with the terms hereof.
5.4 Notice and Payment of Termination Payment
[25]
As soon as practicable after the calculation of a Termination Payment,the Non-Defaulting Party
shall notify the Defaulting Party of the amount of the Termination Payment and whether the
Termination Payment is due to or due from the Non-Defaulting Party. The notice shall include a
written statement explaining in reasonable detail the calculation of such amount.The Termination
Payment shall be paid by the Party that owes it within fifteen(15)Business Days after such notice
is effective (for the avoidance of doubt, notwithstanding Section 5.2(ii) above). This payment
obligation (and the right of the Party to whom the Termination Payment is due to enforce such
payment obligation) shall survive the Termination of this Agreement.
5.5 Disputes with Respect to Termination Payment
If the Defaulting Party in good faith disputes the Non-Defaulting Party's calculation of the
Termination Payment, in whole or in part, the Defaulting Party shall, within ten (10) Business
Days of receipt of Non-Defaulting Party's calculation of the Termination Payment,provide to the
Non-Defaulting Party a detailed written explanation of the basis for such dispute. If the
Termination Payment is due from the Defaulting Party, and the Defaulting Party withholds such
Termination Payment pending the resolution of such dispute, the Defaulting Party shall first
transfer Performance Assurance to the Non-Defaulting Party in an amount equal to the
Termination Payment, net of any amounts of Performance Assurance already provided to the
Non-Defaulting Party. Upon resolution of the dispute, any required Termination Payment shall
be made within ten (10) days of such resolution along with interest accrued at the lower of(i)the
Interest Rate; or (ii) the highest lawful interest rate from and including the due date of the
Termination Payment to but excluding the date paid.
5.6 Suspension of Performance
Notwithstanding any other provision of this Agreement, if an Event of Default shall have
occurred and be continuing, the Non-Defaulting Party, upon written notice to the Defaulting
Party, shall have the right (i) to suspend performance under this Agreement and (ii) to exercise
any remedy available at law or in equity, subject to the limitations set forth in this Agreement.
5.7 Setoff
Upon the designation of an Early Termination Date,the Non-Defaulting Party may, at its option
and in its discretion, setoff against any amounts owed to the Defaulting Party by the Non-
Defaulting Party under this Agreement. The obligations of each Party under this Agreement in
respect of such amounts shall be deemed satisfied and discharged to the extent of any such setoff
exercised by the Non-Defaulting Party. The Non-Defaulting Party will give the Defaulting Party
notice of any setoff effected under this Section as soon as practicable after the setoff is affected
provided that failure to give such notice shall not affect the validity of the setoff. For purposes
of this Section, "owed" shall mean any amounts owed or otherwise accrued and payable
(regardless of whether such amounts have been or could be invoiced)as of the Early Termination
Date. If an obligation is unascertained,the Non-Defaulting Party may in good faith estimate that
obligation and setoff in respect of the estimate, subject to the relevant Party accounting to the
other when the obligation is ascertained. No setoff under this Section shall create a charge or
other security interest except as may be provided under applicable Law. This setoff provision is
[26]
without prejudice and in addition to any right of setoffs netting, off-set, combination of accounts,
counterclaim, lien or other right to which any Party is fat any time otherwise entitled(whether by
operation of Law, contract or otherwise). Each Party represents and acknowledges that the rights
set forth in this Section are an integral part of the Agreement and that without such rights the
Parties would not be willing to enter into this Agreement. Notwithstanding anything to the
contrary in this Agreement, provided that the Non-Defaulting Party has provided the written
statement of calculation required under Section 5.4, any Termination Payment payable by the
Non-Defaulting Party to the Defaulting Party shall not be due until the Non-Defaulting Party
receives written confirmation from the Defaulting Party that the calculation of the Termination
Payment is to the best of the Defaulting Party's knowledge accurate and constitutes payment in
full by the Non-Defaulting Party for the Termination Payment (and for the avoidance of doubt,
the foregoing shall not in any way be deemed to be a waiver of the Defaulting Party's rights to
such Termination Payment), or the amount of such payment is otherwise determined by a court
of competent jurisdiction to be owing.
5.8 Credit Terms and Performance Assurance Rights
5.8.1 Financial Information
(a) If requested by Buyer (if such financial statement or report is not then available on
www.sec.gov/edgar/searchedgar/companysearch.html or the corporate website of
Seller's Guarantor), Seller will deliver (i) within one hundred twenty (120) Days
following the end of each fiscal year, a copy of the annual report of Seller's Guarantor
containing audited consolidated financial statements for such fiscal year and (ii)
within sixty (60) days after the end of each of its first three fiscal quarters of each
fiscal year, a copy of the quarterly report of Seller's Guarantor containing unaudited
consolidated financial statements for such fiscal quarter. In all cases the statements
will be for the most recent accounting period and prepared in accordance with GAAP;
provided, however, that should any such statements or reports not be available on a
timely basis due to a delay in preparation or certification, such delay will not be an
Event of Default so long as such Party diligently pursues the preparation,certification
and delivery of the statements.
(b) Buyer shall deliver to Seller (i) within the earlier of (x) thirty (30) days of such
publication becoming available for distribution,or(y)two hundred seventy(270)days
following the end of a fiscal year, a copy of the audited consolidated Comprehensive
Annual Financial Report of the City of West Memphis, Arkansas and the audited
consolidated financial statements of the City of West Memphis and (ii)within thirty
(30) days after the end of each month, a copy of the City of West Memphis' monthly
report for the electric department for the immediately preceding month. In all cases,
the statements shall be for the most recent accounting period and prepared in
accordance with applicable accounting principles;provided,however,that should any
such statements not be available on a timely basis due to a delay in preparation or
certification, such delay shall not be an Event of Default so long as such Party
diligently pursues the preparation, certification and delivery of the statements. _
[27]
5.8.2 Initial Performance Assurances
Within sixty (60) days after the Execution Date, Seller shall provide the Guaranty. The
Guaranty shall serve as Seller's initial Performance Assurance.Buyer shall not be required
to provide any initial Performance Assurance to Seller under this Section 5.8.2.
Notwithstanding the foregoing,either Party may be required to issue Performance Assurance
to the other Party as and to the extent specified in Section 5.8.3.
5.8.3 Performance Assurance following Assurance Notice regarding a Material
Impairment
In addition to the Performance Assurance delivery and maintenance obligations of Buyer and
Seller, if any, stated in the foregoing Section 5.8.2., following provision of the referenced
initial Performance Assurance, and not as a substitute therefor, if either Party(such Party,the
"Requesting Party")has reasonable grounds subsequent to the Execution Date to believe that
(i) the other Party's creditworthiness (in the case of Seller, determined in relation to its
Guarantor, and as to each Party, taking into account any Performance Assurances already at
such time provided by such Party and/or such Party's Guarantor,if any)or(ii)the other Party's
ability to perform under this Agreement has deteriorated following the Execution Date so as
to have become materially impaired ("Material Impairment") , the Requesting Party will
provide the Posting Party with written notice ("Assurance Notice") requesting Performance
Assurance in an amount determined by the Requesting Party in a commercially reasonable
manner (not to exceed, however, the Termination Payment that would be owing to the
Requesting Party hereunder at the time of such Assurance Notice as if this Agreement were
Terminated and Requesting Party was the Non-Defaulting Party). If the Posting Party is
Seller, Seller shall have three(3)Business Days from Seller's receipt of an Assurance Notice
to cure Buyer's claim of Material Impairment or to provide adequate Performance Assurance.
If the Posting Party is Buyer, Seller shall notify Buyer of the amount of the Four-Day Average
Contract Amount in its Assurance Notice, and Buyer shall have six (6) Business Days from
Buyer's receipt of an Assurance Notice to cure Seller's claim of Material Impairment or to
provide adequate Performance Assurance; provided that Buyer shall first remit to Seller,
within one (1) Business Day after Buyer's receipt of an Assurance Notice, a cash amount
equal to the Four-Day Average Contract Amount. Seller shall return the Four-Day Average
Contract Amount (with interest at the Interest Rate) to Buyer upon Buyer's cure of the
Material Impairment (as determined in the commercially reasonable judgment of Seller) or
Buyer's provision of adequate Performance Assurance. In the event that the Posting Party
fails to comply with the Terms of this Section 5.8.3,then the Requesting Party may at its sole
election declare an Event of Default under Section 5.1(a) (without the further notice and cure
referenced in that Section 5.1 (a)), and the Requesting Party will be entitled to pursue the
remedies set forth in this Article 5. If the Posting Party subsequently cures the claim of
unsatisfactory creditworthiness or ability to perform to the Requesting Party's reasonable
satisfaction,then the Requesting Party shall promptly return any such Performance Assurance
posted pursuant to this Section 5.8.3.to the Posting Party.
[28]
5.8.4 Grant of Security Interest
To secure its obligations under this Agreement and to the extent collateral is held by a Party
as Performance Assurance hereunder, each Party(when a Posting Party)hereby grants to the
other Party (the Requesting Party) a present and continuing security interest in, and lien on
(and right of setoff against), and assignment of, all cash collateral and cash equivalent
collateral and any and all proceeds resulting therefrom or the liquidation thereof, whether
now or hereafter held by, on behalf of, or for the benefit of, such Requesting Party.
5.8.5 Remedies as to Performance Assurance
Upon or any time after the occurrence and during the continuation of an Event of Default or
an Early Termination Date, the Non-Defaulting Party may do any one or more of the
following: (i) exercise any of the rights and remedies of a secured party with respect to all
Performance Assurance, including any such rights and remedies under law then in effect; (ii)
exercise its rights of setoff against any and all property of the Defaulting Party in the
possession of the Non-Defaulting Party or its agent; (iii) draw on any outstanding Letter of
Credit issued for its benefit; and (iv) liquidate all Performance Assurance then held by or for
the benefit of the Requesting Party free from any claim or right of any nature whatsoever of
the Defaulting Party, including any equity or right of purchase or redemption by the
Defaulting Party.The Requesting Party will apply the proceeds of the collateral realized upon
the exercise of any such rights or remedies to reduce the Posting Party's obligations under the
Agreement(the Posting Party remaining liable forany amounts owing to the Requesting Party
after such application), subject to the Requesting Party's obligation to return any surplus
proceeds remaining after such obligations are satisfied in full.
5.9 Letter of Credit Expiration Event
In the event of a Letter of Credit Expiration Event, the beneficiary of the Letter of Credit (the
"Beneficiary") shall have the express right to draw the entire amount of the applicable Letter of
Credit in cash, and such amount of cash shall remain in the Beneficiary's possession in a
segregated account until such time as the Letter of Credit Expiration Event is cured by the Posting
Party through the issuance of a replacement Letter of Credit in an amount and for a term as
required under this Agreement, or until such time as the Posting Party satisfies all of its payment
and performance obligations under this Agreement. The Parties expressly agree that any interest
earned on the funds held in such segregated account shall be the property of the Posting Party,
and the Beneficiary shall have no rights or claims upon such interest earned, except as provided
in the next sentence. The Beneficiary shall have the right to apply any cash-(and any interest
thereon) in its possession as the result of a Letter of Credit Expiration Event to satisfy any bill or
invoice under this Agreement submitted to the Posting Party by the Beneficiary in good faith
which remains unpaid and undisputed after the allowable payment period.
[29]
Article 6. PAYMENT AND NETTING
6.1 Billiniz Period
As soon as practicable after the end of each month, Seller will render to the Buyer an invoice for
the payment obligations (and Buyer can render to Seller an invoice for Seller payment
obligations, if any) incurred hereunder,during the preceding month. The invoice shall show in
sufficient detail the total amount due and payable for the previous month and shall be
substantially in the form of Exhibit 4 hereto.
6.2 Timeliness of Payment
All respective invoices under this Agreement shall be due and payable in accordance with each
Party's invoice instructions on or before the later of the twentieth (20th) day of each month, or
tenth(10th)day after receipt of the invoice 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.
6.3 Disputes and Adjustments of Invoices
(a) Disputes of Party Invoices.A Party may, in good faith, dispute the correctness of another
Party's invoice,or any adjustment to any invoice,rendered under this Agreement or adjust
any invoice for any arithmetic or computational error or adjustment to an invoice
rendered. In the event an invoice or portion thereof, or any other claim or adjustment
arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be
required to be made when due, with notice of the objection given to the other Party. Any
invoice dispute or invoice adjustment shall be in writing and shall state the basis for the
dispute or adjustment. Payment of the disputed amount shall not be required until the
dispute is resolved. Upon resolution of the dispute, any required payment shall be made
within five(5)Business Days of such resolution along with interest accrued at the Interest
Rate from and including the due date to but excluding_ the date paid. Inadvertent
overpayments shall be returned upon request or deducted by the Party receiving such
overpayment from subsequent payments, with interest accrued at the Interest Rate from
and including the date of such overpayment to but excluding the date repaid or deducted
by the Party receiving such overpayment. If an invoice is not rendered within twelve(12)
months after the close of the month during which performance occurred, the right to
payment for such performance is waived, except as provided in Section 6.8.
(b) Disputes of MISO Charges. Notwithstanding Section 6.3(a), if Buyer, in good faith,
disputes the correctness of any MISO charges or costs invoiced under this Agreement,
then Buyer shall pay the disputed MISO charges to Seller under protest. Following
resolution of the dispute, if Buyer is due reimbursement by Seller, the reimbursement to
Buyer shall be paid by Seller within five(5)Business Days of such resolution along with
[30]
interest accrued at the Interest Rate from and including the date such amount was paid by
Buyer, but excluding the date of the reimbursement paid by Seller.
6.4 Disputes with MISO
To the extent that a settlement statement from MISO may be disputed by Seller functioning as
Market Participant or other agent for Buyer, then, to the extent any such dispute affects Buyer
only, Seller shall (i) transmit to MISO any dispute of Buyer regarding the settlement statement,
(ii)notify Buyer, as applicable and keep Buyer reasonably apprised of MISO's response to such
dispute, (iii)not settle any such dispute without Buyer's direction and consent, and (iv) facilitate
Buyer's directly pursuing of such dispute with MISO.
6.5 Paments
The Parties hereby agree that they shall discharge mutual debts and payment obligations due and
owing to each other on the same date pursuant to this Agreement through netting, in which case
all amounts owed by each Party to the other Party for the purchase and sale of capacity, energy
and Ancillary Services during the monthly billing period under this Agreement, including any
related damages calculated pursuant to this Agreement, interest, and payments or credits, shall
be netted so that only the excess amount remaining due shall be paid by the Party who owes such
amount.
6.6 Taxes
Seller shall be obligated to pay all present and future taxes, fees and levies assessed with respect
to(i)the Energy and Ancillary Services for which Seller is responsible under Exhibit 1 for which
the taxable incident occurs prior to the Delivery Point for Energy, and (ii) the Capacity Net
Quantity for which the taxable incident occurs prior to the Delivery Point for Capacity. If Buyer
is required by law to remit such taxes to the applicable government authority on behalf of Seller,
Buyer shall remit the payment as appropriate and deduct the amount paid on Seller's behalf from
payments due to Seller under this Agreement. Buyer shall be obligated to pay all present and
future taxes,fees and levies related to such Energy,Ancillary Services and Capacity Net Quantity
for which the taxable incident occurs at or after the Delivery Point for Energy and the Delivery
Point for Capacity, respectively. If Seller is required by law to remit such taxes to the applicable
government authority on behalf of Buyer, Seller shall remit the payment as appropriate and add
the amount paid on Buyer's behalf to payments due fiom Buyer under this Agreement.
Buyer shall be obligated to pay all present and future taxes, fees and levies assessed with respect
to Buyer's Energy for which the taxable incident occurs prior to the Delivery Point for Energy.
If Seller is required by law to remit such taxes to the applicable government authority on behalf
of Buyer, Seller shall remit the payment as appropriate and add the amount paid on Buyer's behalf
to payments due from Buyer under this Agreement. Seller shall be obligated to pay all present
and future taxes, fees and levies related to Buyer's Energy for which the taxable incident occurs
at or after the Delivery Point for Energy. If Buyer is required by law to remit such taxes to the
applicable government authority on behalf of Seller,Buyer shall remit the payment as appropriate
and deduct the amount paid on Seller's behalf from payments due to Seller under this Agreement.
[31]
6.7 Audit Rights
Any payment made by the Buyer pursuant to this Agreement shall not constitute a waiver of any
right of the Buyer to question or contest the accuracy of any charge, or to request and receive
from Seller sufficient data to audit any charge concerning which the Buyer has a question or
which is or may be contested, provided, however, that the Buyer must initiate any audit or data
request no more than 12 months after the due date of any such bill or charge.
6.8 Billing Period Post-Term
Following the expiration of this Agreement, Seller shall continue to provide monthly statements
of settlements to Buyer.The monthly statements of settlements shall include changes to all MISO
charges and credits that were previously invoiced by Seller to Buyer during the Delivery Term
as well as any new MISO charges and credits. The parties acknowledge that MISO's settlements
process allows MISO to true-up and recalculate charges for up to 105 days following the
Operating Day in which such credits and charges occurred. For any period in which the change
in settlements results in a charge to Seller, Buyer shall pay Seller the net charge pursuant to the
invoicing provisions of this Agreement. For any period in which the change in settlements results
in a credit to Seller, Seller shall pay Buyer the net credit under the same timing as required by
Buyer pursuant to the invoicing provisions of this Agreement. The monthly statement of
settlements shall only include charges and credits for the period in which the Delivery Term was
in effect, and shall not include any additional charges or credits incurred by Buyer or Seller
following the expiration(or Termination)of the Delivery Term, unless otherwise provided in the
Agreement. The Parties agree that this Section 6.8 shall survive the Termination of this
Agreement as necessary to complete any MISO charges and credits permitted by the MISO
Tariff;provided,however,that the parties agree such settlements process shall not exceed six (6)
months from Termination of this Agreement,except for settlements that are the subject of dispute
or regulatory proceedings.
Article 7. MISCELLANEOUS
7.1 Representations and Warranties
On the Execution Date and during the Delivery Term, each Party represents and warrants to the
other Party that:
(a) it is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its formation;
(b) it has all regulatory authorizations necessary for it to legally perform its obligations under
this Agreement;
(c) the execution, delivery and performance of this Agreement is within its powers, has been
duly authorized by all necessary action and does not violate any of the terms and
conditions in its governing documents, any contracts to which it is a party or any law,
rule, regulation, order or the like applicable to it;
[32]
(d) this Agreement constitutes its legally valid anh binding obligation enforceable against it
in accordance with its Terms; subject to any equitable defenses;
(e) it 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) there is not pending or, to its knowledge, threatened against it or any of its affiliates any
legal proceedings that could materially adversely affect its ability to perform its
obligations under this Agreement;
(g) no Event of Default with respect to it has occurred and is continuing and no such event or
circumstance would occur as a result of its entering into or performing its obligations
under this Agreement;
(h) it is acting for its own account, has made its own independent decision to enter into this
Agreement and as to whether this Agreement is appropriate or proper for it based upon
its own judgment, is not relying upon the advice or recommendations of the other Party
in so doing, and is capable of assessing the merits of and understanding, and understands
and accepts, the terms, conditions and risks of this Agreement;
(i) it is a "forward contract merchant" within the meaning of the United States Bankruptcy
Code; and
(j) it has entered into this Agreement in connection with the conduct of its business and it
has the capacity or ability to make or take delivery of all capacity, energy and Ancillary
Services referenced to herein to which it is a Party.
7.2 Representations and Warranties Specific to Buyer
Buyer, as a governmental entity represents and warrants to Seller on the Execution Date and
during the Delivery Term as follows:
(a) all acts necessary to the valid execution, delivery and performance of this Agreement,
including without limitation, competitive bidding, public notice, election, prior
appropriation or other required procedures has or will be taken and performed as required
under applicable law;
(b) all persons making up the governing body of Buyer are the duly elected or appointed
incumbents in their positions and hold such positions in good standing in accordance with
applicable law;
(c) entry into and performance of this Agreement by Buyer is for a proper public purpose
within the meaning of the applicable law;
(d) the Delivery Term of this Agreement does not extend beyond any applicable limitation
imposed by relevant constitutional, organic or other governing documents and applicable
law;
[33]
(e) the Buyer's obligations to make payments herender are payable from Electric Revenues
(as defined in Section 4.14)and are unsubordipated obligations and such payments are(i)
operating and maintenance costs (or similar designation) which enjoy first priority of
payment at all times under any and all bond ordinances or indentures to which it is a party,
and all other relevant constitutional,organic or other governing documents and applicable
law or (ii) otherwise not subject to any prior claim under any and all bond ordinances or
indentures to which it is a party, and all other relevant constitutional, organic or other
governing documents and applicable law and are available without limitation or deduction
to satisfy all of Buyer's obligations hereunder;
(f) entry into and performance of this Agreement by Buyer will not adversely affect the
exclusion from gross income for federal income tax purposes of interest on any obligation
of Buyer otherwise entitled to such exclusion;
(g) obligations to make payments hereunder do not constitute any kind of indebtedness of
Buyer or create any kind of lien on, or security interest in, any property or revenues of
Buyer which, in either case, is proscribed by any provision of any relevant constitutional,
organic or other governing documents and applicable law, any order or judgment of any
court or other agency of government applicable to it or its assets, or any contractual
restriction binding on or affecting it or any of its assets;
(h) that its city council, board of directors or such other governing body has duly authorized
and ratified Buyer's execution, delivery and performance of this Agreement, and
that Buyer has provided Seller with true, correct and complete copies of the relevant
resolutions of Buyer's governing body;
(i) the West Memphis Utility Commission is an agency of the City of West Memphis under
the laws of-the State of Arkansas. The City of West Memphis operates the electric,water
and wastewater systems for West Memphis through its West Memphis Utility
Commission. For all issues arising under this Agreement (except for its formal
Amendment), West Memphis Utility Commission is the designated representative of
Buyer;
(j) as of the Execution Date, Buyer has disclosed any knowledge of possible Qualifying
Facility resources seeking to impose a put obligation in Buyer's Service Territory(and for
such purposes "Qualifying Facility" means a qualifying small power production facility
or qualifying cogeneration facility as defined under Section 20 I of the Public Utility
Regulatory Policies Act of 1978 (PURPA) and the FERC's implementing regulations
thereunder); and
(k) there is no electric customer in Buyer's service territory that has been permitted to
determine their retail supplier of electric energy.
7.3 Public Authority. Disclaimers of Sovereign Immunity
(a) Buyer shall provide Seller on the Execution Date in connection with its execution of this
Agreement with: (i)certified copies of all ordinances,resolutions,public notices and other
[34]
documents evidencing the necessary authorizations with respect to the execution,delivery
and performance by Buyer of this Agreement and(ii)an opinion of outside legal counsel
for Buyer, in form and substance reasonably satisfactory to Seller,regarding the validity,
binding effect and enforceability of this Agreement against Buyer in accordance with all
relevant constitutional, organic or other governing documents and applicable law.
(b) Buyer warrants and covenants that with respect to its contractual obligations hereunder
and performance thereto, to the extent permitted by Law, it will not claim immunity on
the grounds of. (i) sovereignty or similar grounds with respect to itself or its revenues or
assets from suit, (ii) jurisdiction, (iii) relief by way of injunction, order for specific
performance or recovery of property, or(iv) execution or enforcement of any judgment.
7.4 Load Aggregation;Retail Choice
Buyer warrants and covenants that it is not currently and will not during the Delivery Term for
Energy act as a load aggregator. During the Delivery Term for Energy, Buyer warrants and
covenants that it shall not participate in any form of retail customer choice that could affect the
amount of Total Load supplied under this Agreement, unless such participation is mandated by
applicable Law. The Parties agree that if Buyer is required to participate in any form of retail
customer choice that could affect the amount of Total Load supplied under this Agreement, such
mandate shall be deemed a Change in Law for purposes of Section 7.17.
7.5 Title/Indemnity
Title to and risk of loss related to(i)Energy and Ancillary Services for which Seller is responsible
under Exhibit 1 shall transfer from Seller to Buyer at the Delivery Point for Energy, (ii) the
Capacity Net Quantity shall transfer from Seller to Buyer at the Delivery Point for Capacity, and
(iii)Buyer's Energy shall transfer from Buyer to Seller at the Delivery Point for Energy. To the
extent permitted under applicable law, each Party shall indemnify, defend and hold harmless the
other Party from and against any third party claims or actions, threatened or filed and whether
groundless,false,fraudulent,or otherwise that directly or indirectly arise from or out of any event,
circumstance, act or incident first occurring or existing during the period when control and title
to Capacity, Energy, Ancillary Services and Buyer's Energy is vested in such Party as provided
in this Section.
7.6 Limitation on Consequential, Incidental and Indirect Damages
THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE
PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES
PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF.
FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE
OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES
SHALL BE THE SOLE AND EXCLUSIVE REMEDY, A PARTY'S LIABILITY SHALL BE
LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR
DAMAGES AT LAW OR IN EQUITY, INCLUDING CLAIMS FOR SPECIFIC
PERFORMANCE, ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS
[35]
EXPRESSLY PROVIDED, A PARTY'S LIABILI'1r Y SHALL BE LIMITED TO DIRECT
ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE
AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR
IN EQUITY ARE WAIVED. WITHOUT LIMITING A PARTY'S ABILITY TO COLLECT A
TERMINATION PAYMENT TO WHICH IT IS ENTITLED UNDER THIS AGREEMENT,
NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL,
PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER
BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT. IT IS
THE INTENT OF THE PARTIES THAT THE LIMITATIONS IMPOSED ON REMEDIES
AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR
CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY,
WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR
PASSIVE.
7.7 Assignment
Neither Party shall assign this Agreement or its rights hereunder without the prior written consent
of the other Party, which consent may not be unreasonably withheld by either Party; provided,
however, either Party may, without the consent of the other Party (and without relieving itself
from liability hereunder), (i)transfer, sell, pledge, encumber or assign the accounts, revenues
or proceeds hereof in connection with any financing or other financial arrangements, (ii)transfer
or assign this Agreement to an affiliate of such Party which affiliate's creditworthiness is equal
to or higher than that of such Party as of the Execution Date, or (iii) transfer or assign this
Agreement to any person or entity succeeding to all or substantially all of the assets whose
creditworthiness is equal to or higher than that of such Party as of the Execution Date; provided,
however, that in each such case, any such assignee shall agree in writing to be bound by the
Terms and conditions hereof and so long as the transferring Party delivers such tax and
enforceability assurance as the non-transferring Party may reasonably request.
7.8 Disputes/Governing Law
Any dispute between the Parties under this Agreement shall be referred to representatives of
Buyer and Seller designated by the Parties for resolution on an informal basis as promptly as
practicable. In the event the designated representatives are unable to resolve the dispute within
thirty days, or such other period as the Parties may jointly,agree upon, the Parties are free to
exercise any and all rights and remedies. THIS AGREEMENT AND THE RIGHTS AND
DUTIES OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF ARKANSAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
7.9 Notices
All notices, requests, statements or payments shall be made as specified below. Notices (other
than scheduling requests) shall, unless otherwise specified herein, be in writing and may be
delivered by any method of delivery that allows for confirmation of delivery (which all notices
[36]
shall provide), including United States mail, overnight courier service, facsimile or via electronic
mail. Notice by facsimile or hand delivery shall be effective at the close of business on the day
actually received, if received during business hours on a Business Day, and otherwise shall be
effective at the close of business on the next Business Day. Notice by overnight United States
mail or courier shall be effective on the next Business Day after it was sent.A Party may change
its addresses by providing notice in accordance herewith.Notices and other communications shall
be addressed as set forth on Exhibit 6.
7.10 Waiver
No delay or omission by a Party in the exercise of any right under this Agreement will be taken,
construed, or considered as a waiver or relinquishment thereof, and any such right may be
exercised from time to time and as often as may be deemed expedient. If any of the Terms and
conditions herein are breached and thereafter waived by a Party, such waiver is limited to the
particular breach so waived and is not deemed to waive any other breach hereunder.
7.11 No Third-Party Beneficiaries
This Agreement is not intended to and will not create rights or obligations of any character
whatsoever in favor of, or binding upon, any Person other than the Parties to this Agreement
(excepting, with respect to the City of West Memphis), and the obligations herein assumed are
solely binding on, and for the use and benefit of, the Parties to this Agreement, their successors
in interest, or their respective permitted assigns.
7.12 Severability
If any provision or provisions of this Agreement will be held to be invalid, illegal or
unenforceable, the validity, legality or enforceability.of the remaining provisions hereof will not
in any way be affected or impaired thereby.
7.13 General
This Agreement (including the exhibits, schedules and any written supplements hereto),
constitute the entire agreement between the Parties relating to the subject matter, and supersedes
all prior agreements and understandings, both written and oral, among the Parties or any of them,
with respect to the subject matter hereof. This Agreement shall be considered for all purposes as
prepared through the joint efforts of the parties and shall not be construed against one party or
the other as a result of the preparation, substitution, submission or other event of negotiation,
drafting or execution hereof. Except to the extent herein provided for, no amendment or
modification to this Agreement shall be enforceable unless reduced to writing and executed by
both Parties.
7.14 Audit
Each Party has the right, at its sole expense and during normal working hours, to examine the
records of the other Party to the extent reasonably necessary to verify the accuracy of any
[37]
statement, charges or computation made pursuant to this Agreement. If requested, a Party shall
provide to the other Party statements evidencing the quantity delivered at the Delivery Point for
Energy. If any such examination reveals any inaccuracy in any statement, the necessary
adjustments in such statement and the payments thereof will be made promptly and shall bear
interest calculated at the Interest Rate from the date the overpayment or underpayment was made
until paid; provided, however, that no adjustment for any statement or payment will be made
unless objection to the accuracy thereof was made prior to the lapse of twelve (12)months from
the rendition thereof, and thereafter any objection shall be deemed waived.
7.15 Confidentiality
Except as and when required to be disclosed under the Arkansas Freedom of Information Act,
neither Party shall disclose the Terms or conditions of a Transaction under'this Agreement to a
third Party (other than the Party's and such Party's Affiliates' employees, officers, lenders,
counsel, auditors, 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,Balancing Area or independent system operator rule or in connection
with any court or regulatory proceeding; provided, however, each Party shall, to the extent
practicable, use reasonable efforts to prevent or limit the disclosure. The Parties shall be entitled
to all remedies available at law or in equity to enforce, or seek relief in connection with, this
confidentiality obligation. Notwithstanding any restrictions on disclosure to the contrary in this
Agreement or in any non-disclosure, confidentiality or similar agreement between the Parties,
each Party consents to the disclosure of information (including, without limitation, its identity
(by name, identifier or otherwise)) to the extent necessary or appropriate to comply with rules,
regulations, orders, supplementary information, guidance, and the like published or issued by the
CFTC and/or under applicable law, and to the persons or entities contemplated therein or thereby
(including, without limitation, to a SDR and relevant regulators).
7.16 Mobile Sierra Standard for Contract Modifications
(a) Absent the agreement of all parties to the proposed change, the standard of review for
changes to this contract proposed by a Party will be the "public interest" application of
the "just and reasonable" standard of review set forth in United Gas Pipe Line Co. v.
Mobile Gas Service Corp., 350 U.S.332(1956)and Federal Power Commission v. Sierra
Pacific Power Co., 350 U.S. 348 (1956) and clarified by Morgan Stanley Capital Group,
Inc. v. Public Util. Dist. No. I of Snohomish, 554 U.S. 527(2008)and further clarified by
NRG Power Marketing LLC v. Maine Pub. Util. Comm'n, 558 U.S. 165 (2010) (and as
may be further clarified under applicable law, commonly known as the " Mobile-Sierra
doctrine"). The Parties to the Agreement intend and agree that to the maximum extent
possible,the standard of review stated immediately above will also be applicable to FERC
acting sua sponte and to the Parties'respective Affiliates.The standard of review for non-
parties will be the most stringent standard permissible under applicable law.
(b) In addition, and notwithstanding the foregoing subsection 7.16(a), to the fullest extent
permitted by applicable law, each Party, for itself and its successors and assigns, hereby
expressly and irrevocably waives any rights it can or may have, now or in the future,
whether under§§205 and/or 206 of the Federal Power Act or otherwise,to seek to obtain
[38]
from FERC by any means, directly or indirectly (through complaint, investigation or
otherwise), and each hereby covenants and agrees not at any time to seek to so obtain, an
order from FERC changing any section of this Agreement specifying the rate, charge,
classification, or other Term or condition agreed to by the Parties, it being the express
intent of the Parties that, to the fullest extent permitted by applicable law, neither Party
shall unilaterally seek to obtain from FERC any relief changing the rate, charge,
classification, or other Term or condition of this Agreement, notwithstanding any
subsequent changes in applicable law or market conditions that may occur. In the event it
were to be determined that applicable law precludes the Parties from waiving their rights
to seek changes from FERC to their market-based power sales contracts (including
entering into covenants not to do so)then this subsection 7.16(b)shall not apply,provided
that, consistent with the foregoing subsection 7.16(a), neither Party shall seek any such
changes except solely under the "public interest" application of the "just and reasonable"
standard of review and otherwise as set forth in the foregoing section 7.16(a).
7.17 Change in Law
In the event of a Change in Law that (i) has a material adverse effect upon a Party's ability to
perform its obligations under, or to realize the material, direct economic benefits of, this
Agreement; or(ii)renders the performance of a Party's obligations under this Agreement illegal
or unenforceable,then the Parties shall negotiate an amendment of this Agreement, in good faith
and using commercially reasonable efforts,to reallocate the responsibilities to reflect the benefits
and burdens of this Agreement consistent with the Parties intentions as of the Execution Date. If
the Parties fail to agree on such an amendment using commercially reasonable efforts, then the
Party affected by such Change in Law(the "Affected Party")may terminate this Agreement upon
at least one hundred and eighty(180) days prior written notice to the other Party (or, in the case
of illegality of material performance obligations hereunder, such shorter notice period as may be
necessary). In the case of a termination under this Section 7.17,the other Party(the "Calculating
Party") will calculate its Termination Payment as set forth in Section 5.2 as if it was the Non-
Defaulting Party (without implying that an Event of Default has occurred as to the Affected
Party), as of the Effective Date of such termination. The Termination Payment will be due to or
due from the Calculating Party, as appropriate, such payments to be calculated and paid as set
forth in Sections 5.3 and 5.4.
7.18 Change in Regional TerrijM
In the event of a change in the operation or organizational structure of the regional territory which
includes the Total Load (including implementation of an ISO, RTO, or realignment of the
transmission system) and such change is anticipated to materially adversely affect either Party's
ability to perform its obligations hereunder, the Operating Committee shall convene within
fifteen (15) days of written notification from either Party to evaluate appropriate action.
Considering the recommendations of the Operating Committee, if any, both Parties shall
negotiate in good faith an amendment to this Agreement or take other appropriate action(s) the
effect of which will be to preserve and/or restore the respective Parties, as closely as possible,to
the same business and economic positions that existed prior to such change.
[39]
7.19 Forward Contracts:No Utility
This Agreement and all purchase and sale transaction(s) hereunder are intended to constitute
"forward contracts" within the meaning of the United States Bankruptcy Code (the "Code"), and
any services under this Agreement are a material part of such transaction(s) such that the Parties
would not have entered into this Agreement otherwise apart from those transaction(s); and Buyer
agrees that Seller is not a "utility" as such Terms used in 11 U.S.C. Section 366, and Buyer agrees
to waive and not to assert the applicability of the provisions of 11 U.S.C. Section 366 in any
bankruptcy proceeding involving Buyer, and further agrees that Seller is not a provider of last
resort.
IN WITNESS WHEREOF,the Parties hereto have caused this Agreement to be executed on the
date first written above.
FOR SELLER:
By:
Name: Michael Toal
Title: Vice President LEGA` CR.��r
FOR BUYER:
By:
Name: AA.-ea /t ,e lecot"
Title:
A ST:
VAU
City Clerk
[40]
EXHIBIT
Settlement of MISO Charges and Credits
The Parties agree to settle the MISO credits and charges in accordance with the Settlements Matrix
attached hereto and incorporated into this Exhibit 1. To the extent not addressed in the Settlements
Matrix, Seller shall pass through any additional credits and charges as settled with MISO to Buyer.
In the event the settlements in the Settlements Matrix are modified by MISO during the Delivery
Term, Seller shall use reasonable efforts to isolate, distinguish and pass through all credits and
charges that are specific to Buyer, including but not limited to Buyer as (i)Asset Owner, (ii) LSE
within EAL LBA and MISO BA, (iii) user of transmission service, and(iv) generation owner.
CONFIDENTIAL 41 EXECUTION VERSION
MISO Charge Types I SELLER BUYER Not Applicable at
RESPONSIBILITY RESPONSIBILITY this time
DA ADMIN Day-Ahead Market Administration Amount I x
DA—ASM—REG Day-Ahead Regulation Amount N/A
DA-ASM—SPIN Day-Ahead Spinning Reserve Amount N/A
DA ASM SUPP Day-Ahead Supplemental Reserve Amount N/A
DA ASSET EN Day-Ahead Asset Energy Amount x
DA FIN_CG Day-Ahead Financial Schedule Congestion Amount N/A
DA FIN_LS Day-Ahead Financial Schedule Loss Amount N/A
DA GFACO RBT CG Day-Ahead Congestion Rebate on Carved-Out N/A
Grandfathered Agreements
DA GFACO RBT LS Day-Ahead Lasses Rebate on Carved-Out Grandfathered N/A
Agreements
Day-Ahead Congestion Rebate on Option B
DA GFAOB RBT CG N/A
Grandfathered Agreements
DA GFAOB_RBT LS Day-Ahead Losses Rebate on Option B Grandfathered N/A
Agreements
DA NASSET EN Day-Ahead Non-Asset Energy Amount x
DA RSG DIST Day-Ahead Revenue Sufficiency Guarantee Distribution x
Amount
DA RSG MWP Day-Ahead Revenue Sufficiency Guarantee Make Whole N/A
Payment Amount
DA SCHD 24 ALC Day-Ahead Schedule 24 Allocation Amount x
DA VIRT EN Day-Ahead Virtual Energy Amount N/A
FTR ADMIN Financial Transmission Rights Hourly Allocation Amount x
FTR ARR ARR TXN Auction Revenue Rights Transaction Amount x
FTR ARR FTR TXN Financial Transmission Rights Annual Transaction x
Amount
FTR ARR INF_UPL Auction Revenue Rights Infeasible Uplift Amount x
FTR ARR STG2_DIST Auction Revenue Rights Stage 2 Distribution Amount x
FTR FFG Financial Transmission Rights Full Funding Guarantee x
Amount
FTR GUL Financial Transmission Rights Guarantee Uplift Amount x
FTR HR ALC Financial Transmission Rights Hourly Allocation Amount x
FTR M N ALC Financial Transmission Rights Monthly Allocation Amount x
FTR MO TXN Financial Transmission Rights Transaction Amount x
FTR TXN x
FTR YR ALC Financial Transmission Rights Yearly Allocation Amount x
RT ADMIN ReakTime Market Administration Amount x
RT ASM CRDFC Real-Time Contingency Reserve Deployment Failure N/A
Charge Amount
RT ASM_EXE Real-Time Excessive Energy Amount N/A
RT ASM EXE DFE-DEP Real-Time Excessive Deficient Energy Deployment N/A
Charge Amount
RT ASM NRGA N/A
RT ASM NXE Real-Time Non-Excessive Energy Amount N/A
RT ASM—REG Day-Ahead Regulation Amount N/A
RT ASM REG DIST Real-Time Regulation Cost Distribution Amount x
RT ASM_SPIN Real-Time Spinning Reserve Amount N/A
RT ASM—SPIN—DIST Real-Time Spinning Reserve Cost Distribution Amount x
RT ASM SUPP Real-Time Supplemental Reserve Amount N/A
RT ASM SUPP_DIST Real-Time Supplemental Reserve Cost Distribution x
Amount
RT ASSET EN Real-Time Asset Energy Amount x
RT DRR UPL Real-Time Demand Response Uplift N/A
RT FIN CG Real-Time Financial Schedule Congestion Amount N/A
RT FIN LS Real-Time Financial Schedule Loss Amount N/A
CONFIDENTIAL 42 EXECUTION VERSION
EXHIBIT 1 (continued)
RT GFACO RBT CG Real-Time Congestion Rebate on Carve-Out N/A
Grandfathered Agreements
RT GFACO RBT LS Real-Time Losses Rebate on Carved-Out N/A
— — Grandfathered Agreements
RT—LOSS—DIST Real-Time Distribution of Losses Amount x
RT MISC Real-Time Miscellaneous Amount x
RT NASSET EN Real-Time Non-Asset Energy Amount x
RT_M_DIST Real-Time Net Inadvertent Distribution x
RT PV MWP Real-Time Price Volatility Make-Whole Payment N/A
Amount
RT—RAA Real-Time Resource Adequacy Auction Amount x
RT_RNU Real-Time Revenue Neutrality Uplift Amount x
RT RSG DISTI Real-Time Revenue Sufficiency Guarantee First Pass x
Distribution Amount
RT—RSG M WP Real-Time Revenue Sufficiency Guarantee Make N/A
— Whole Pa ent Amount
RT SCHD 24 ALC Real-Time Schedule 24 Allocation Amount x
RT SCHD 24 DIST Real-Time Schedule 24 Distribution Amount N/A
RT UD N/A
RT_VIRT_EN Real-Time Virtual Energy Amount N/A
.................................._............. ............................_. . 1....................................................._.... _........_..................._.........................._..............................................
'Tariff Schedules I
M ISO Charge Types SELLER BUYER Not Applicable at
RESPONSIBILITY RESPONSIBILITY this time
Schedule 1 Scheduling System Control and Dispatch Service x
Schedule 2 Reactive Supply and Voltage Control/Generation x
Sources Service
Schedule 7 Long-Term Firm and Short-Term Point-To-Point NA
Transmission Service
Schedule 8 Non-Firm Point to Point Transmission Service NA
Schedule 9 Network Integration Transmission Service x
Schedule 10 ISO Cost Recovery Adder x
Schedule 10-FERC FERC Annual Charges Recover x
Schedule 11 Wholesale Distribution Service x
Schedule 12 Gross Receipts Tax Adder NA
Schedule 23 Recovery of Schedule 10 and Schedule 17 Costs NA
From Certain GFAs
Schedule 26 Network Upgrade Charge From Transmission x
E)pansion Plan
Schedule 26A Multi-Value Project Usage Rale x
Schedule 26C Cost Recovery for MISO Transmission Owner TMEPS x
Schedule 26D Cost Recovery for PJM Transmission Owner TMEPS x
Schedule 33 Blackstart Service x
Schedule 35 HVDC Agreement Cost Recovery Fee x
Schedule 41 Charge to Recover Costs of Entergy Storm x
Securitization Charges
Schedule 42A Charge to Recover Accrued and Paid Interest x
Associated with Prepayments
Schedule 42B Credit Associated with AFUDC x
Schedule 45 Cost Recovery of NERC Recommendation or Essential x
Action
CONFIDENTIAL 43 EXECUTION VERSION
EXHIBIT 2
1
MISO Elemental Pricing Nodes
* Delivery Metering
Point Voltage Transformer Substation Voltage
Name k MVA Rating Owner (kV) Location
NE 1/4,NW'/4
1 Polk 1 161 30/40/50 WMUC 13.8 Section 18, T6N, R9E
Crittenden County
NE 1/4,NW 1/4
2 Polk 2 161 30/40/50 WMUC 13.8 Section 18,T6N, R9E
Crittenden County
SE 1/4, SE 1/4
3 Lehi 2 13.8 30 EAL 13.8 Section 10, T6N, R8E
Crittenden County
NW '/4,NW '/4
4 Dover 13.8 30 EAL 13.8 Section 7, T6N,R9E
Crittenden County
SW'/4, SE 1/4
5 Gateway 13.8 15 EAL 13.8 Section 10, T6N, R9E
Crittenden County
Elemental Pricing Nodes Making Up Delivery Point
Seller's Delivery Point for Energy and Ancillary Services is Buyer's LZ CPNode within
MISO. Buyer's LZ CPNode consists of certain Elemental Pricing Nodes("EPNodes")which may
be modified by MISO during the Delivery Term. The table above accurately reflects Buyer's
EPNodes that comprise the Buyer's LZ CPNode/Delivery Point as of the Execution Date. If
Buyer's LZ CPNode/Delivery Point within MISO is modified to add or subtract EPNodes, the
Operating Committee described in Section 4.13 shall be authorized and required to amend the table
above to accurately reflect all EPNodes comprising Buyer's LZ CPNode/Delivery Point without
additional approval or ratification by either Party.
Exhibit 2 continued next page
CONFIDENTIAL 44 EXECUTION VERSION
Annual Revenue Rights
1
Annual Revenue Rights of Buyer as of the Execution Date:
Buyer ARR Entitlements in MISO (effective as of Planning Year 2020-2021):
Sink CPNode MW(ON-PEAK MW(OFF-PEAK
Source CPNode
EAI.INDEPENDI EAI.WMULD_LAZ 8.4 8.4
EAI.INDEPEND2 EAI.WMULD LAZ 8.4 8.4
EAI.WH BLUFFI EAI.WMULD LAZ 8.2 8.2
EAI.WH_BLUFF2 EAI.WMULD_LAZ 8.4 8.4
LAGN.BCIT 3 EAI.WMULD LAZ 3 3
LAGN.BC 1 T 4 EAI.WMULD LAZ 3 3
LAGN.BC2 1 EAI.WMULD_LAZ 4 4
LAGN.BC2 2 EAI.WMULD LAZ 3 3
LAGN.BC2 3 EAI.WMULD LAZ 3 3
LAGN.BCI 1 EAI.WMULD_LAZ 2 2
LAGN.BCI_2 EAI.WMULD LAZ 2 2
LAGN.BYCT1 EALWMULD LAZ 2.5 2.5
LAGN.BYCT2 EAI.WMULD LAZ 2.5 2.5
LAGN.BYCT3 EAI.WMULD LAZ 2.5 2.5
LAGN.BYCT4 EAI.WMULD LAZ 2.5 2.5
LAGN.CTW1 EAI.WMULD LAZ 15 15
LAGN.CTW2 EAI.WMULD_LAZ 15 15
LAGN.CTW3 EAI.WMULD LAZ 15 15
LAGN.CTW4 EAI.WMULD_LAZ 15 15
LAGN.STET1 EAI.WMULD_LAZ 1.4 1.4
LAGN.STET10 EAI.WMULD LAZ 0.9 0.9
LAGN.STET2 EAI.WMULD_LAZ 1.2 1.2
LAGN.STET3 EAI.WMULD_1.AZ 1.2 1.2
LAGN.STET4 EAI.WMULD LAZ 1.4 1.4
LAGN.STET6 EAI.WMULD_LAZ 1 1
LAGN.STET7 EAI.WMULD_LAZ 1 1
LAGN.STET8 EAI.WMULD LAZ 1 1
LAGN.STET9 EAI.WMULD LAZ 0.9 0.9
CONFIDENTIAL 4 5 EXECUTION VERSION
EXHIBIT 3
BUYER'S RESOURCES
a. White Bluff Electric Station, Unit 1
1% (approximately 8.15 MW) undivided ownership share in the 815 MW coal fueled resource
jointly owned with Entergy Arkansas, Inc. and others located in Jefferson County, Arkansas
and operated by Entergy Arkansas, Inc.
b. White Bluff Steam Electric Station, Unit 2
1% (approximately 8.44 MW) undivided ownership share in the 844 MW coal fueled
resource jointly owned"with Entergy Arkansas, Inc. and others located in Jefferson County,
Arkansas and operated by Entergy Arkansas, Inc.
c.Independence Steam Electric Station. Unit 1
1% (approximately 8.36 MW) undivided ownership share in the 836 MW coal fueled
resource jointly owned with Entergy Arkansas,Inc.and others located in Independence
County, Arkansas and operated by Entergy Arkansas,Inc.
d.Independence Steam Electric Station. Unit 2
1% (approximately 8.42 MW)undivided ownership share in the 842 MW coal fueled
resource jointly owned with Entergy Arkansas,Inc.and others located in Independence
County, Arkansas and operated by Entergy Arkansas,Inc.
CONFIDENTIAL 46 EXECUTION VERSION
EXHIBIT 1
SAMPLE BILL
Date:
ENERGY
Period
MARKETING ry Amount: 1,381,907.56
Due Date:
NextEra Energy Marketing,LLC
Tax ID#xx-xxxxxxx
700 Universe Blvd
Juno Beach,FL 33408
INVOICE TQV- SUMMARY
City of West Memphis
604 E Cooper Ave Current Month Charges 1,381,907.56
West Memphis,AR 72301 Resettlement Charges
Total Due to NextEra 1,381,907.56
tpedersen@citvwm.com
Phone:870-735-3355
DETAILS
Volume Fixed Price
Total Load 1,224,170.00 MWh 37,900.00 32.30 $/MWh
Buyers Energy (635,197.44) MWh (23,808.00) 26.68 $/MWh
Finacial Schedule Settlement 499,968.00 MWh 23,808.00 21.00 $/MWh
Tariff Based Transmission and Ancillary Charge 292,967.00
Previous Month True-Up -
Monthly InwiceTotal _ _ _ 1,361,907.56_;
Please remit the above amount to:
Wire Instructions: ACH Instructions:
Account Name: Nextera Energy Marketing,LLC Nextera Energy Marketing,LLC
Wire Bank: Bank of America Bank of America
Account#: xxxxxxxxxx xxxxxxxxxx
ABA M xxxxxxxxx xxxxxxxxx
CONFIDENTIAL 47 EXECUTIONVERSION
EXHIBIT 6
i
NOTICES
For City of West Memphis:
Mr. Todd Pedersen
West Memphis Utilities
604 East Cooper
P.O.Box 1868
West Memphis,Arkansas 72303
Phone: 870-702-5110
E-Mail: tpedersen@citywm.com
Fax: 870-732-7623
Mr.Ward Wimbish
604 East Cooper
P.O.Box 1868
West Memphis,Arkansas 72303
Phone: 870-702-5103
Email: wwimbishrcitvwm.com
Fax: 870-732-7623
For NextEra Energy Marketing,LLC:
Attn: Contracts/Legal Department
Phone: n/a
Facsimile: (561)625-7504
Duns: 05-448-1341
Federal Tax ID Number: 65-0851428
Invoices:
Attn:Manager,NEM Accounting
Phone: 561-304-5830
Facsimile: 561-625-7651
michael.eol ler(@mee.coin
Power-Settlements.SharedMai lbox(Anee.com
Scheduling:
Attn: Scheduling Desk
Phone: (561)625-7100
Facsimile: (561)625-7604
CONFIDENTIAL 49 EXECUTION VERSION
Payments:
Attn: Manager,NEM Accounting
Phone: 561-304-5830
Facsimile: 561-625-7663
michael.col leronee.com
.Po«ver-Settlements.SharedMailbox(unee.com
Wire Transfer Only:
Pay: Bank of America
For the Account of. NextEra Energy Marketing,
LLC
Account No.: 3751227650
Fed.ABA No.: 0260-0959-3
ACH Transfer Only:
Pay: Bank of America
For the Account of. NextEra Energy Marketing,
LLC
Account No.: 3751227650
Fed.ABA No.: 1110-0001-2
Credit and Collections:
Attn: Credit Manager
Phone: (561)304-5143
Facsimile:
Email: DL-CREDIT-undertiNTiting-teamLa�fpl.com
With additional Notices of an Event of Default or Potential Event of Default to:
Attn: Contracts/Legal Department
Phone: n/a
Facsimile: (561)625-7504
CONFIDENTIAL 50 EXECUTION VERSION
EXHIBIT 7
FORM OF GUARANTY
THIS GUARANTY(this "Guaranty"), dated as of (the"Effective Date"), is made
by NEXTERA ENERGY CAPITAL HOLDINGS, INC. ("Guarantor"), in favor of[INSERT
COUNTERPARTY'SNAMEINALL CAPS] ("Counterparty").
RECITALS:
WHEREAS, Counterparty and Guarantor's indirect, wholly-owned subsidiary NEXTERA
ENERGY MARKETING, LLC ("Obligor") have entered into, or concurrently herewith are
entering into, that certain[Insert Name ofAgreementl[dated/made/entered into/effective as ofJ
20_(the"Agreement"); and
WHEREAS, Guarantor will directly or indirectly benefit from the Agreement between Obligor
and Counterparty.
NOW THEREFORE, in consideration of the foregoing premises and as an inducement for
Counterparty's execution, delivery and performance of the Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Guarantor
hereby agrees for the benefit of Counterparty as follows:
1. GUARANTY. Subject to the terms and provisions hereof, Guarantor hereby absolutely
and irrevocably guarantees the timely payment when due of all obligations owing by Obligor to
Counterparty arising pursuant to the Agreement on or after the Effective Date (the
"Obligations"). This Guaranty shall constitute a guarantee of payment and not of collection.
The liability of Guarantor under this Guaranty shall be subject to the following limitations:
(a) Notwithstanding anything herein or in the Agreement to the contrary, the maximum
aggregate obligation and liability of Guarantor under this Guaranty, and the maximum
recovery from Guarantor under this Guaranty, shall in no event exceed Seven Million
U.S.Dollars (U.S. $7,000,000) (the"Maximum Recovery Amount").
(b) The obligation and liability of Guarantor under this Guaranty is specifically limited to
payments expressly required to be made under the Agreement, as well as costs of
collection and enforcement of this Guaranty (including attorney's fees) to the extent
reasonably and actually incurred by the Counterparty (subject in all instances, to the
limitations imposed by the Maximum Recovery Amount as specified in Section 1(a)
above). In no event, however, shall Guarantor be liable for or obligated to pay any
consequential, indirect, incidental, lost profit, special, exemplary, punitive, equitable or
tort damages.
2. DEMANDS AND PAYMENT.
(a) If Obligor fails to pay any Obligation to Counterparty when such Obligation is due and
owing under the Agreement (an "Overdue Obligation"), Counterparty may present a
CONFIDENTIAL 51 EXECUTION VERS ION
written demand to Guarantor calling for Guarantor's payment of such Overdue Obligation
pursuant to this Guaranty(a"Payment Demand").
(b) Guarantor's obligation hereunder to pay any particular Overdue Obligation(s) to
Counterparty is conditioned upon Guarantor's receipt of a Payment Demand from
Counterparty satisfying the following requirements: (i) such Payment Demand must
identify the specific Overdue Obligation(s) covered by such demand, the specific date(s)
upon which such Overdue Obligation(s) became due and owing under the Agreement,
and the specific provision(s) of the Agreement pursuant to which such Overdue
Obligation(s) became due and owing; (ii) such Payment Demand must be delivered to
Guarantor in accordance with Section 9 below; and (iii) the specific Overdue
Obligation(s) addressed by such Payment Demand must remain due and unpaid at the
time of such delivery to Guarantor.
(c) After issuing a Payment Demand in accordance with the requirements specified in
Section 2(b)above,Counterparty shall not be required to issue any further notices or make
any further demands with respect to the Overdue Obligation(s) specified in that Payment
Demand, and Guarantor shall be required to make payment with respect to the Overdue
Obligation(s) specified in that Payment Demand within five (5) Business Days after
Guarantor receives such demand. As used herein, the term "Business Day" shall mean
all weekdays (i.e., Monday through Friday) other than any weekdays during which
commercial banks or financial institutions are authorized to be closed to the public in the
State of Florida or the State of New York.
3. REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants that:
(a) it is a corporation duly organized and validly existing under the laws of the State of
Florida and has the corporate power and authority to execute, deliver and carry out the
terms and provisions of the Guaranty;
(b) no authorization, approval, consent or order of, or registration or filing with, any court or
other governmental body having jurisdiction over Guarantor is required on the part of
Guarantor for the execution and delivery of this Guaranty; and
(c) this Guaranty constitutes a valid and legally binding agreement of Guarantor,enforceable
against Guarantor in accordance with the terms hereof,except as the enforceability thereof
may be limited by the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors'rights generally and by general principles
of equity.
4. RESERVATION OF CERTAIN DEFENSES. Without limiting Guarantor's own
defenses and rights hereunder, Guarantor reserves to itself all rights, setoffs, counterclaims and
other defenses to which Obligor is or may be entitled arising from or out of the Agreement,except
for defenses(if any)based upon the bankruptcy, insolvency, dissolution or liquidation of Obligor
or any lack of power or authority of Obligor to enter into and/or perform the Agreement.
CONFIDENTIAL 52 EXECUTION V ERSI ON
5. AMENDMENT OF GUARANTY. No term or provision of this Guaranty shall be
amended,modified, altered,waived or supplemented except in a writing signed by Guarantor and
Counterparty.
6. WAIVERS AND CONSENTS. Subject to and in accordance with the terms and
provisions of this Guaranty:
(a) Except as required in Section 2 above, Guarantor hereby waives (i) notice of acceptance
of this Guaranty; (ii)presentment and demand concerning the liabilities of Guarantor;and
(iii) any right to require that any action or proceeding be brought against Obligor or any
other person,or to require that Counterparty seek enforcement of any performance against
Obligor or any other person,prior to any action against Guarantor under the terms hereof.
(b) No delay by Counterparty in the exercise of(or failure by Counterparty to exercise) any
rights hereunder shall operate as a waiver of such rights, a waiver of any other rights or a
release of Guarantor from its obligations hereunder (with the understanding, however,
that the foregoing shall not be deemed to constitute a waiver by Guarantor of any rights
or defenses which Guarantor may at any time have pursuant to or in connection with any
applicable statutes of limitation).
(c) Without notice to or the consent of Guarantor, and without impairing or releasing
Guarantor's obligations under this Guaranty, Counterparty may: (i) change the manner,
place or terms for payment of all or any of the Obligations(including renewals,extensions
or other alterations of the Obligations); (ii) release any person (other than Obligor or
Guarantor) from liability for payment of all or any of the Obligations; or (iii) receive,
substitute, surrender, exchange or release any collateral or other security for any or all of
the Obligations.
7. REINSTATEMENT. Guarantor agrees that this Guaranty shall continue to be effective
or shall be reinstated, as the case may be, if all or any part of any payment made hereunder is at
any time avoided or rescinded or must otherwise be restored or repaid by Counterparty as a result
of the bankruptcy or insolvency of Obligor, all as though such payments had not been made.
8. TERMINATION. Guarantor may terminate this Guaranty by providing a written
termination notice to Counterparty specifying the date upon which such termination will take
effect (provide d that no such termination shall take effect prior to 5:00 p.m. (Eastern Prevailing
Time) on the fifth (5th) Business Day after the termination notice has been delivered to
Counterparty in accordance with Section 9 hereof). Upon the effectiveness of such termination,
Guarantor shall have no further liability hereunder, except as may pertain pursuant to the last
sentence of this paragraph. No such termination shall affect Guarantor's liability with respect to
any Obligation incurred prior to the time such termination is effective, which Obligation shall
remain subject to this Guaranty.
Unless terminated earlier,this Guaranty and the Guarantor's obligations hereunder will terminate
automatically and immediately at 11:59:59 Eastern Prevailing Time [ , 20_]; provided,
however,that no such termination shall affect Guarantor's liability with respect to any Obligation
incurred prior to the time the termination is effective, which Obligation shall remain subject to
this Guaranty.
CONFIDENTIAL 53 EXECUTION VERSION
9. NOTICE. Any Payment Demand, notice, request, instruction, correspondence or other
document to be given hereunder (herein collectively called "Notice") by Counterparty to
Guarantor, or by Guarantor to Counterparty, as applicable, shall be in writing and may be
delivered either by (i) U.S. certified mail with postage prepaid and return receipt requested, or
(ii) recognized nationwide courier service with delivery receipt requested, in either case to be
delivered to the following address (or to such other U.S. address as may be specified via Notice
provided by Guarantor or Counterparty, as applicable, to the other in accordance with the
requirements of this Section 9):
TO GUARANTOR: * TO COUNTERPARTY.•
NEXTERA ENERGY CAPITAL
HOLDINGS, INC.
700 Universe Blvd.
Juno Beach, Florida 33408 Attn:
Attn: Treasurer
[Tel: (561) 694-6204 -- for use in [Tel: ( j -_ -- for use in
connection with courier deliveries] connection with courier deliveries]
* (NOTE: Copies of any Notices to Guarantor under this Guaranty shall also be
sent via facsimile to ATTN.- Contracts Group, Legal, Fax No. (561) 625-7504 and
ATTN: Credit Department, Fax No. (561) 625-7642. However, such facsimile
transmissions shall not be deemed effective for delivery purposes under this
Guaranty.)
Any Notice given in accordance with this Section 9 will (i) if delivered during the recipient's
normal business hours on any given Business Day, be deemed received by the designated
recipient on such date, and (ii) if not delivered during the recipient's normal business hours on
any given Business Day, be deemed received by the designated recipient at the start of the
recipient's normal business hours on the next Business Day after such delivery.
10. MISCELLANEOUS.
(a) This Guaranty shall in all respects be governed by, and construed in accordance with, the
law of the State of New York,without regard to principles of conflicts of laws thereunder
(other than Sections 5-1401 and 5-1402 of the New York General Obligations Law).
(b) This Guaranty shall be binding upon Guarantor and its successors and permitted assigns
and inure to the benefit of and be enforceable by Counterparty and its successors and
permitted assigns. Guarantor may not assign this Guaranty in part or in whole without
the prior written consent of Counterparty. Counterparty may not assign its rights or
benefits under this Guaranty in part or in whole without the prior written consent of
Guarantor.
CONFIDENTIAL 54 EXECUTION VERSION
(c) This Guaranty embodies the entire agreement land understanding between Guarantor and
Counterparty and supersedes all prior agreements and understandings relating to the
subject matter hereof.
(d) The headings in this Guaranty are for purposes of reference only, and shall not affect the
meaning hereof. Words importing the singular number hereunder shall include the plural
number and vice versa, and any pronouns used herein shall be deemed to cover all
genders. The term "person" as used herein means any individual, corporation,
partnership, joint venture, limited liability company, association, joint-stock company,
trust, unincorporated association, or government (or any agency or political subdivision
thereof).
(e) Wherever possible, any provision in this Guaranty which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any one jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
(f) Counterparty(by its acceptance of this Guaranty)and Guarantor each hereby irrevocably:
(i) consents and submits to the exclusive jurisdiction of the federal district courts sitting
in Arkansas, or if those courts do not have subject matter jurisdiction, to the exclusive
jurisdiction of the Arkansas Supreme Court for the purposes of any suit, action or other
proceeding arising out of this Guaranty or the subject matter hereof or any of the
transactions contemplated hereby brought by Counterparty, Guarantor or their respective
successors or assigns; and (ii) waives (to the fullest extent permitted by applicable law)
and agrees not to assert any claim that it is not personally subject to the jurisdiction of the
above-named courts, that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that this Guaranty
or the subject matter hereof may not be enforced in or by such court.
(g) COUNTERPARTY (BY ITS ACCEPTANCE OF THIS GUARANTY) AND
GUARANTOR EACH HEREBY IRREVOCABLY, INTENTIONALLY AND
VOLUNTARILY WAIVES THE RIGHT TO TRIAL BY JURY WITH RESPECT TO
ANY LEGAL PROCEEDING BASED ON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH, THIS GUARANTY OR THE AGREEMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN)OR ACTIONS OF ANY PERSON RELATING HERETO OR
THERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO
GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY.
(h) Delivery of an executed signature page of this Guaranty, and any subsequent
amendment(s), by facsimile transmission or other electronic transmission (e.g. "pdf' or
"tif") shall be effective as delivery of a manually executed signature page hereof.
CONFIDENTIAL 55 EXECUTION VERSION
IN WITNESS WHEREOF,the Guarantor has executed this.Guaranty on , 20_,
but it is effective as of the Effective Date.
NEXTERA ENERGY CAPITAL HOLDINGS,
INC.
By:
Name:
Title:
CONFIDENTIAL 56 EXECUTION VERSION
EXHIBIT 8
ANNUAL DEFICIENT LOAD ADJUSTMENT CALCULATION
2018 Behind-the-Meter Generation Summary(Illustration Purposes Only)
Sum of Hourly Load-Weighted
Generation %of Total Allowable Deficient Annual Average Day- Contract Deficient Load
Load MWh Quantity Load Amount Load Ahead LMP Price Adjustment
Q1 89,955 10,456 12% 10% 1,460
Q2 100,280 15,305 15% 10% 5,277
Q3 117,286 13,893 12% 10% 2,165
Q4 88,671 10,349 12% 10% 1,482
Annual Deficient Load
Adjustment 396,193 50,003 13% 10% 10,384 $33.81 $31.48 -$24,241
Deficient Annual Load=Sum of Hourly Generation Quantity-(Load MWh*Allowable Amount)
Load-Weighted Average Day-Ahead LMP=Hourly Generation Quantity*Day-Ahead LMP at the Delivery Point/Sum of Hourly
Generation Quantity for the calendar year
Deficient Load Adjustment=Deficient Annual Load*(Contract Price-Load-Weighted Average Day-Ahead LMP)
CONFIDENTIAL 57 EXECUTION VERSION
nFi4orvr
COIVSUL.TINGcLc
Power Industry Planners•Analysts•Advisors.
CityMemphis,of West Arkansas
------Status Report - Request for Power Supply Proposals
May 13, 2020
I -
I
..
' �' .•.;. .. ',. .r�,-..a=a:�;,e:L`-,..«-�.�g<__8 ,,sem;r• ,`:�,�
Status Report - Request for Power Supply Proposals
RFP Process
➢ May 31,. 2021 - Existing Agreement with NRG Power Marketing LLC (NRG)
terminates
➢ August 19, 2019 - West Memphis issued Request for Proposals to 9 Proposers
➢ RFP Requested Proposers to Supply West Memphis' capacity and energy
requirements and to provide other required services beginning June 1,
2021
➢ October 111, 2019
➢ 5 Proposers responded to the RFP,
➢ Several Proposers provided more than one proposal — total of 25 proposal
alternatives
sf7FR0
NT - Stafus Report—Request for Power Supply`Pro_posals - <Y7
-
%�,m_o-renoz�_..naipV�aavim. ) ' ' Y,a `-''m•. ; `'(� .,ell., ,-.y
Status Report — Request for Power Supply Proposals
Evaluations of Proposals
➢ Economic evaluations included costs and revenues for the following:
➢ Energy costs at proposed PPA prices
➢ Market energy purchases if needed to serve load (if not fully supplied under
proposed PPA) -- -
➢ Market capacity purchases if needed to meet MISO capacity obligations (if not
fully supplied under the proposed PPA)
➢ Net revenue from energy sales made by West Memphis under the proposed PPA
➢ Net sales revenue from West Memphis owned resources
'nFRONT 'E ,
Status Report Request for P., pp,y., p _ _ _---
Il�.C9*6U lNT ower-Su f Pro osals-
C: LgVf R .Ana ti.A:lNims .. e f f fi.�.; ,�.-A vy.-- ,.r.r..._e.-.` ,.=:-t-_••. `� _ _
Status Report — Request for Power Supply Proposals
Conclusion
➢ Execute New Agreement with NextEra Energy Marketing LLC (NextEra)
➢ NextEra was lowest cost proposer
➢ Summary of major changes — NextEra proposal compared to Existing Agreement
with NRG
➢
5-year term (June 1, 2021 through May 3:1,. 2026)
➢ Existing Agreement with NRG was for a 4-year term
➢ NextEra proposal based on purchase of constant amount of energy around
the clock
➢ Existing Agreement with NRG based on hourly scheduling
7
/''FRONT -;:Status Report.-Request for Power. Supply Proposals-.-
CONSULTING w