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Home My WebLink About5.389 Original Contract J ..~ '& 5. ~g9 POWER PURCHASE AGREEMENT FOR SMALL POWER GENERATOR FACILITY THIS AGREEMENT, between Pacific Rim Port Angeles Thermal Generating Project (hereinafter "Pacific Rim") and the City of Port Angeles, a municipal corporation of the State of Washington, sets forth the following recitals: A. Pacific Rim intends to own and operate an electric power generation facility using fuels derived from methane gas created by decomposition inside the landfill which is owned and operated by the City of Port Angeles. Pacific Rim desires to operate such generation in parallel with Port Angeles City Light's system and to sell all of the power produced to Port Angeles City Light. Port Angeles City Light will have no direct financial involvement in the investment, construction, operation or maintenance of Pacific Rim's generation equipment or switching and electrical distribution equipment, which will be located at the Port Angeles City Landfill at a location mutually agreed upon by Pacific Rim, Port Angeles Public Works Department and Port Angeles City Light. The generation facility will be ready to produce and deliver power for sale on or about November 1, 1996. B. Pacific Rim's generation equipment is multiple small industrial generators consisting of Ford 460 industrial engines modified to burn landfill gas. Port Angeles City Light is willing to permit Pacific Rim to operate its generation facility in parallel with Port Angeles City Light's system under certain condi- tions as set forth below for the purposes of delivering power to Port Angeles City Light. A schematic design of the facility's in- terconnection with City Light's system is attached as Exhibit "A". C. The Public Works Department of the City of Port Angeles is willing to provide to Pacific Rim methane gas produced by the decomposition of materials contained within its landfill in exchange for the paYment of a royalty of ten percent (10%) of gross revenues collected by Pacific Rim from Port Angeles City Light for the power sold pursuant to this agreement, which royalty will be paid directly by Port Angeles City Light to the Public Works Department. Port Angeles City Light, in turn, is willing to purchase the energy delivered by Pacific Rim at the rates as set forth in Exhibit "B", or amendments thereto. NOW, THEREFORE, the City of Port Angeles and Pacific Rim agree to the following: 1. Pacific Rim and the City of Port Angeles Public Works Department agree to interconnect their facilities to allow Pacific Rim to tap the City'S gas collection system and to use the methane gas to power Pacific Rim's generators. Port Angeles City Light , '. agrees to allow Pacific Rim to interconnect its generation facilities to City Light's distribution facilities and to purchase such delivered electric energy at the rates as set forth in Exhibit IIBII. 2. Pacific Rim will begin construction within 120 days of the signing of this agreement and complete its construction activi- ties within 245 days. Pacific Rim will use its best efforts to complete construction in accordance with the above schedule and will report the status ~f .its progress by the fifteenth day of each calendar month once construction has started. 3. Pacific Rim shall supply a meter base to specifications provided by City Light. City Light shall supply and maintain the meter. 4. Pacific Rim shall be fully responsible for the costs and performance of designing, installing, owning, operating and maintaining Pacific Rim's: a. generating facilities in accordance with the requirements of all applicable laws, rules, codes and regulations, and the directives of governmental agencies having jurisdiction; b. control and protective devices as required by Port Angeles City Light for the safe parallel operation of Pacific Rim's generation facility with Port Angeles City Light's system; c. interconnection facilities as may be required to deliver power from Pacific Rim I s generation facilities to the interconnection with Port Angeles City Light's system; d. provide an outside lockable disconnect, which Port Angeles City Light can open and tag open when its crews are working on power lines. 5. In the event that Pacific Rim's generation creates operational problems for City Light's system such as harmonics, voltage fluctuations or the like, Pacific Rim will correct that problem or shut down its system in a timely manner. 6. In the event that it becomes necessary to install any special or additional interconnection facj.lities, including control or protective devices, time of delivery metering, and reinforcement of City Light's system to receive or to continue to receive power delivered under this agreement, Pacific Rim shall pay costs asso- ciated with the installation of such facilities, or said agreement may be terminated at the option of Port Angeles City Light. 7. Pacific Rim shall submit equipment specifications and detailed plans to Port Angeles City Light for the installation of its interconnection facilities, control and protective devices, and - 2 - . ~. . ''-' facilities to accommodate Port Angeles City Light's meters for review and advance written approval prior to actual installation. 8. Pacific Rim agrees to not operate its generator parallel with Port Angeles City Light's system until the installation has been inspected by authorized Port Angeles City Light representa- tives and final written approval is received from Port Angeles City Light to commence parallel operations. ,9. Port Angeles. <;i ty Light's approval described agreement shall not bet construed as any warranty of durability or reliability of Pacific Rim's generation facilities or its control or protective devices. in this safety, service 10. Port Angeles City Light shall have the right: a. to enter Pacific Rim's premises at any time for the inspection of Pacific Rim's protective devices and for reading and testing of meters; b. to enter Pacific Rim's premises at reasonable times to disconnect the interconnection for purposes of maintenance; and c. to enter Pacific Rim's premises at any time and to disconnect without notice the interconnection facilities if, in the opinion of Port Angeles City Light, a hazardous condition exists and such immediate action is necessary to protect persons, or the facilities of Port Angeles City Light, or other customer's facilities from damage or interference caused by Pacific Rim's generator or the lack of properly operating protective devices. 11. The City of Port Angeles Public Works Department shall have the right: a. to select site location for placement of Pacific Rim facilities and equipment at the landfill; and b. to control ingress and egress through the landfill property; and, c. to enter Pacific Rim's facilities at any time for inspection and/or to disconnect the tap on the gas flume to respond to any condition that is hazardous in the opinion of the Port Angeles Public Works Department. 12. Pacific Rim agrees to make no change to its generation facility, protective devices or gas collection equipment without prior written consent of the City of Port Angeles Public Works Department and Port Angeles City Light. 13. The City of Port Angeles and Port Angeles City Light shall not be liable for any loss or damage to property or bodily injuries to or death of persons, whether suffered by Pacific Rim, - 3 - . r., . . I ~l its agents or employees, or by any third person, persons or corporations, resulting from the location, use, or operation of electrical or other equipment located on City of Port Angeles property, or from methane gas or electrical energy present therein or escaping therefrom. 14. Pacific Rim shall indemnify the City of Port Angeles and Port Angeles City Light, its officers, agents and employees, against any loss, damages to persons or property, bodily injury or death of any person or p~rsons, including but not limited to the employees of the City of~Port Angeles, its customers, or any third party, resulting from or arising out of or in any way connected with the installation, inspection, maintenance, testing, use and operation of the generation facility. 15. It is further specifically and expressly understood that the indemnification provided herein constitutes Pacific Rim's waiver of immunity under Industrial Insurance, Title 51 RCW, solely for the purpose of this indemnification. This waiver has been mutually negotiated by the parties. The provisions of this section shall survive the expiration or termination of this agreement. 16. Pacific Rim shall obtain, at its own expense, prior to the actual interconnected operation of the generation facility, insurance policies from companies licensed to do business in the State of Washington which meet or exceed the following require- ments: a. Property. Property damage insurance which covers the entire project on an "all risk" basis, including coverage against earthquake, flood, fire, lightening and explosion, in any amount not less than the full replacement cost of the project. b. Liability. Broad form commercial liability insurance providing coverage for bodily injury, death, personal injury and property damage in an amount not less than one million dollars ($1,000,000) combined single limit for each occurrence and two million dollars ($2,000,000) general aggregate. c. Automobile. Comprehensive automobile liability coverage in an amount not less than one million dollars ($1,000,000) combined single limit per accident. d. Employer's Liability. Employer's liability insurance in accordance with the applicable laws of the State of Washington as set forth in the Washington Industrial Insurance Act. 17. This agreement may not be assigned by Pacific Rim to another party except with the written consent of the City of Port Angeles Public Works Department and Port Angeles City Light. - 4 - . ~ ~ . ~. J \ ....~ 18. This agreement shall be governed by the laws of the State of Washington. Jurisdiction and venue of any action arising from this contract shall be exclusively in the Superior Court in and for Clallam County. 19. It is contemplated by the parties hereto that the land- fill will generate sufficient methane gas for generation of electricity until approximately 2005, by which time the gas produced will have declined to a point where it is not economically viable to carryon generat1on, at which time the project will be discontinued and removed -"completely to the satisfaction of the Port Angeles Public Works Department and Port Angeles City Light at Pacific Rim's expense. 20. Amendments to any of the terms or conditions of this contract or to the rates as set forth in Exhibit liB" is based upon City Light's avoided cost of resources and may be changed by City Light upon 30 days written notice. 21. In the event that either party materially breaches the terms or conditions of this contract, the non-breaching party reserves the right to withhold paYments or services until correc- tive action has been taken or completed. However, the party shall not exercise this right until it has given written notice of such material breach to the breaching party, and ten days have passed since the receipt of such notice. This option is in addition to and not in lieu of the parties' right to terminate this contract or any other right which state law offers for breach of contract. If either party shall materially breach any of the covenants undertaken herein or any of the duties imposed upon it by this contract, such material breach shall entitle the other party to terminate this contract, provided that the party desiring to terminate for such cause shall give the offending party at least 20 days written notice, specifying the breach complained of, and if at the end of such time, the party notified has not removed the cause of complaint or remedied the purported violation, then the termina- tion of this contract shall be deemed complete. CITY OF PORT ANGELES Dated: frY" -~ ,'/Jr-...f- It/ /t6/C;g' By ~,,-J(~4J- ~ Mayo_ Dated: ld - <I - q!'. " . ' Approved as to Form: 1\ /: l~~~ Dennis C. Dickson, Sr. Assistant City Attorney SPGF PPA c - 5 -