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Registration No. 333-91391
As filed with the Securities and Exchange Commission on February [__], 2000
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 3
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AES IRONWOOD, L.L.C.
(Exact name of registrant as specified in its charter)
DELAWARE 4930 54-145-7537
(State of incorporation (Primary Standard Industrial (I.R.S. Employer
or organization) Classification Code Number) Identification Number)
305 PRESCOTT ROAD WILLIAM LURASCHI
LEBANON, PA 17042 AES IRONWOOD, L.L.C.
(717) 228-1328 1001 NORTH 19TH STREET, SUITE 2000
(Address, including zip code, and ARLINGTON, VA 22209
telephone number, including area (703) 522-1315
code, of registrant's principal (Name, address, including zip code,
executive offices) and telephone number, including
area code, of agent for service)
It is respectfully requested that the Commission send copies of all notices,
orders and communications to:
MICHAEL B. BARR
HUNTON & WILLIAMS
1900 K STREET, NW
WASHINGTON, DC 20006
(202) 955-1500
(202) 778-2201 (FAX)
Approximate date of commencement of proposed sale to the public: As soon
as practicable following the effectiveness of this Registration Statement.
If the Securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier
registration statement for the same offering. [ ] ________
If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier registration
statement for the same offering. [ ] ________
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The registrant hereby amends this Registration Statement on the date or
dates as may be necessary to delay its effective date until the registrant must
file a further amendment which specifically states that this Registration
Statement will thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement will become
effective on the date as the Commission, acting pursuant to Section 8(a), may
determine.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
COMPANY MAY NOT EXCHANGE THE BONDS UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THE NEW BONDS AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THE
NEW BONDS IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED FEBRUARY __, 2000
PROSPECTUS
$308,500,000
AES IRONWOOD, L.L.C.
Offer to Exchange All Outstanding
8.857% Senior Secured Bonds due 2025
For 8.857% Senior Secured Exchange Bonds due 2025
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THE NEW BONDS:
o Interest Payments: Interest on the bonds will be payable every three
months, on February 28, May 31, August 31 and November 30 of each year,
beginning August 31, 1999.
o Security: The new bonds will rank equally with all of our other senior
debt secured by a lien on and security interest in shared collateral,
which consists of substantially all of our assets. In addition, the
indenture accounts, the debt service reserve account and the debt
service reserve letter of credit, other than to the extent the
provider's right to specific proceeds under the debt service reserve
letter of credit, are separate collateral solely for the benefit of the
holders of the new bonds.
o Ranking: The new bonds rank equally in right of payment with all other
present and future senior debt and senior in right of payment to all
subordinated debt.
o Listing: The new bonds will not be listed on any securities exchange or
NASDAQ.
THE EXCHANGE OFFER:
o Expiration: 5:00 p.m. New York City time on ______, 2000, unless
otherwise extended.
o Tendered Bonds: All old bonds that are validly tendered and not validly
withdrawn at the expiration of the exchange offer will be exchanged for
an equal principal amount of new bonds that are registered under the
Securities Act of 1933.
o Tax Consequences: The exchange of old bonds for new bonds will not be a
taxable event for U.S. federal income tax purposes.
o We are not making this exchange offer in any state or jurisdiction
where it is not permitted.
YOU SHOULD CAREFULLY CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 17 OF THIS
PROSPECTUS BEFORE PARTICIPATING IN THE EXCHANGE OFFER OR INVESTING IN THE NEW
BONDS ISSUED IN THE EXCHANGE OFFER.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is ____________, 2000.
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TABLE OF CONTENTS
Page Page
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PROSPECTUS SUMMARY.................1 CERTAIN RELATIONSHIPS AND RELATED
SUMMARY OF THE TERMS OF THE NEW TRANSACTIONS......................42
BONDS .............................1 SUMMARY OF PRINCIPAL PROJECT
SUMMARY OF THE EXCHANGE OFFER......6 CONTRACTS.........................43
SUMMARY OF RISK FACTORS...........11 ROLE OF THE INDEPENDENT ENGINEER..70
SUMMARY OF INDEPENDENT ENGINEER'S DESCRIPTION OF THE NEW BONDS......72
REPORT............................12 SUMMARY OF PRINCIPAL FINANCING
SUMMARY OF INDEPENDENT POWER DOCUMENTS.........................80
CONSULTANT'S REPORT...............15 PLAN OF DISTRIBUTION.............107
SUMMARY OF SIGNIFICANT PROJECT UNITED STATES FEDERAL INCOME TAX
CONTRACTS.........................16 CONSIDERATIONS...................107
RISK FACTORS......................17 LEGAL MATTERS....................107
USE OF PROCEEDS...................24 EXPERTS..........................108
CAPITALIZATION....................25 WHERE YOU CAN FIND MORE
CALCULATION OF EARNINGS TO FIXED INFORMATION......................108
CHARGES DEFICIENCY................25 INDEX TO FINANCIAL STATEMENTS....F-1
THE EXCHANGE OFFER................26 ANNEX A: GLOSSARY OF TECHNICAL
SELECTED FINANCIAL DATA...........35 TERMS............................A-1
MANAGEMENT'S DISCUSSION AND ANNEX B: INDEPENDENT ENGINEER'S
ANALYSIS OF FINANCIAL CONDITION REPORT...........................B-1
AND RESULTS OF OPERATIONS.........36 ANNEX C: INDEPENDENT POWER
OUR BUSINESS......................38 CONSULTANT'S REPORT..............C-1
OUR MANAGEMENT....................40
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This prospectus is part of a registration statement we filed with the
Securities and Exchange Commission. You should rely only on the information or
representations provided in this prospectus. We have not authorized any person
to provide information other than that provided in this prospectus. We are not
making an offer of these securities in any jurisdiction where the offer is not
permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front page of this
prospectus.
Each broker-dealer that receives new bonds for its own account under the
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of the new bonds. The letter of transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
This prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of new bonds received in
exchange for old bonds where the old bonds were acquired by the broker-dealer as
a result of market-making activities or other trading activities. We have agreed
that, starting on the expiration date of the exchange offer and ending on the
close of business 270 days after the expiration date, we will make this
prospectus available to any broker-dealer for use in connection with any resale.
See "PLAN OF DISTRIBUTION."
UK SELLING RESTRICTIONS
The new bonds may not be offered or sold in or into the United Kingdom
except to persons whose ordinary activities involve acquiring, holding, managing
or disposing of investments, as principal or agent, for the purposes of their
businesses, or in other circumstances that do not constitute an offer to the
public in the United Kingdom for the purposes of the Public Offers of Securities
Regulations 1995 or the Financial Services Act 1986, and this prospectus may
only be issued or passed on to persons in the United Kingdom if the persons are
of a kind described in article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 or if the persons are
persons to whom this prospectus may otherwise lawfully be issued or passed on.
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PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus but does
not contain all of the information that is important to you. To understand all
of the terms of the exchange offer and to attain a more complete understanding
of our business and financial situation, you should read carefully this entire
prospectus. For an explanation of specific technical terms used in this
prospectus, please read "ANNEX A: GLOSSARY OF TECHNICAL TERMS."
SUMMARY OF THE TERMS OF THE NEW BONDS
The exchange offer relates to the exchange of up to $308,500,000 principal
amount of new bonds for an equal principal amount of old bonds. The form and
terms of the new bonds are substantially identical to the form and terms of the
old bonds, except the new bonds will be registered under the Securities Act.
Therefore, the new bonds will not bear legends restricting their transfer. The
new bonds will evidence the same debt as the old bonds, which they replace, and
both the old bonds and the new bonds are governed by the same indenture.
Issuer: AES Ironwood, L.L.C.
Securities Offered: $308,500,000 aggregate principal amount of
8.857% Exchange Senior Secured Bonds due 2025.
Interest: We will pay interest on the bonds every three months, on
each February 28, May 31, August 31 and November 30,
beginning on the first payment date after the last date
to which interest has been paid.
Final Maturity Date: November 30, 2025.
Principal Repayment: We will pay principal on the new bonds in
installments quarterly on each February 28, May 31,
August 31 and November 30, commencing February 28, 2002
to the registered owners on the immediately preceding
record date as described under "DESCRIPTION OF THE NEW
BONDS--Payment of Interest and Principal."
Ratings: The new bonds are expected to be rated "BBB-" from
Standard & Poor's Rating Group and "Baa3" from Moody's
Investors Services, Inc., the same ratings borne by the
old bonds. See "DESCRIPTION OF THE NEW BONDS--Ratings."
Summary of
Coverage Ratios: You will find projected coverage ratios with respect to
the bonds in the projections included in the independent
engineer's report, which we have attached as Annex B,
and these ratios are subject to the qualifications,
limitations and exclusions described in the independent
engineer's report. The following ratios reflect the base
case assumptions described in the independent engineer's
report.
Post-Power
During Power Purchase
Full Term Purchase Agreement
of the Bonds Agreement Term Period
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Debt Service Coverage
Minimum............. 1.45 1.45 5.77
Average............. 2.30 1.46 5.81
Interest Coverage
Minimum............. 1.58 1.58 18.45
Average............. 11.13 2.59 47.03
As described in the independent engineer's report, these
projections are subject to risks, uncertainties and
other factors which could cause actual results to differ
materially from those stated. We cannot assure that
these projected coverage ratios will be achieved. See
"ANNEX B: INDEPENDENT ENGINEER'S REPORT" and "RISK
FACTORS."
Optional Redemption: We may redeem any of the new bonds, in whole or in part,
at any time at a redemption price equal to:
o 100% of the principal amount; plus
o accrued interest; plus
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o a make-whole premium calculated using a discount
rate equal to the interest rate on comparable U.S.
Treasury securities plus 50 basis points.
Mandatory
Redemption: We must redeem all of the new bonds, in whole or in
part, at a redemption price equal to 100% of the
principal amount plus accrued interest if:
o we receive casualty proceeds, eminent domain
proceeds or specific performance liquidated
damages from Siemens Westinghouse under the
construction agreement; and
o in each case, specified additional conditions are
satisfied.
We must redeem all of the new bonds, in whole or in
part, at a redemption price equal to 100% of the
principal amount plus accrued interest if we receive
proceeds under the guaranty provided by The Williams
Companies, Inc. because we terminated the power purchase
agreement as a result of an event of default by Williams
Energy. See "DESCRIPTION OF THE NEW BONDS--Mandatory
Redemption."
Resale of the New
Bonds: We believe that beneficial interests in the new bonds
may be offered for resale, resold and otherwise
transferred by most owners of the new bonds without
further compliance with the registration and prospectus
delivery requirements of the Securities Act so long as:
o you are acquiring the new bonds in the ordinary
course of your business;
o you are not participating, and have no arrangement
or understanding with any person to participate,
in the distribution of the new bonds; and
o you are not an insider or a related party of ours.
This belief is based upon existing interpretations of
the staff of the SEC's Division of Corporation Finance
described in several no-action letters issued to third
parties unrelated to us and subject to important
restrictions described in "THE EXCHANGE OFFER--Purpose
and Effect of the Exchange Offer." We do not intend to
seek our own no-action letter. If our belief is wrong
and you transfer a new bond without delivering a
prospectus meeting the requirements of the Securities
Act or without an exemption from the requirements, you
may incur liability under the Securities Act. We do not
and will not assume or indemnify you against this
liability. There can be no assurance that the staff of
the SEC's Division of Corporation Finance would make a
similar determination about the new bonds as it has in
no-action letters about exchanges of the securities of
other companies.
Only broker-dealers that acquired the old bonds as a
result of market-making or other trading activities may
participate in the exchange offer. Each broker-dealer
that receives new bonds for its own account in the
exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of those new
bonds. This prospectus, as it may be amended or
supplemented from time to time, may be used by a
broker-dealer in connection with those resales.
Broker-dealers that acquired old bonds directly from us
may not rely on the interpretations of the SEC referred
to above. Accordingly, in order to sell their bonds,
broker-dealers that acquired old bonds directly from us
must comply with the registration and prospectus
delivery requirements, including being named as a
selling security holder in any resale prospectus.
Old bonds that are not tendered for exchange will
continue to be subject to existing transfer restrictions
and will not have registration rights. Therefore, the
market for secondary resales of any old bonds that are
not tendered for exchange is likely to be minimal.
Equity Contributions: We have entered into an equity subscription agreement
with AES Ironwood, Inc. under which AES Ironwood, Inc.
agreed to contribute up to $50,149,285 in equity to us
to fund project costs. AES Ironwood, Inc.'s obligation
under the equity subscription agreement will be
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supported by an acceptable letter of credit or an
acceptable bond. AES Ironwood, Inc. will fund amounts
available under the equity subscription agreement when
all funds in the construction account have been used or
during the continuation of an event of default under the
indenture, whichever occurs first. We have the option of
treating a portion or all of the equity contribution as
affiliate subordinated debt. Subject to the conditions
described in the equity subscription agreement and the
collateral agency agreement, including achievement of
final completion of our facility, funding of all
required amounts and deposits under the collateral
agency agreement and absence of any default, any equity
which remains committed under the equity subscription
agreement but unfunded after the commercial operation
date may be canceled. The commercial operation date is
the date initial startup testing at our facility has
been successfully completed and all necessary approvals,
permits, and authorizations have been obtained to allow
us to begin selling energy and capacity.
Ranking: Other than the bonds, which have an aggregate principal
balance of $308.5 million, we do not have any
outstanding long-term debt. The new bonds will:
o rank equally in right of payment with all future
senior secured debt; and
o rank senior in right of payment to all subordinated
debt.
Any debt incurred under the debt service reserve
letter of credit or the construction period letter of
credit will rank equally in right of payment with the
new bonds. There are currently no drawings
outstanding under those letters of credit.
Collateral: The new bonds will rank equally with all of our other
senior debt by a lien on and security interest in the
collateral.
o The indenture accounts, the debt service reserve
account and the debt service reserve letter of
credit, other than to the extent of the letter of
credit provider's right to specific proceeds, will
constitute separate collateral solely for the
benefit of the holders of the bonds.
o The collateral for the benefit of holders of
senior debt, including holders of the new bonds,
will include:
o all of our revenues;
o the project accounts, other than the debt
service reserve account;
o all of our real and personal property;
o proceeds of insurance, condemnation and
liquidated damages payments, if any;
o all project contracts;
o all ownership interests in our company; and
o the equity contribution and all rights under
the equity subscription agreement.
Limited Recourse: All obligations in connection with the new bonds will be
solely our obligations. The bondholders will have no
claim against or recourse to the holders of our
ownership interests or any of our affiliates or any of
their incorporators, stockholders, directors, officers
or employees for the repayment of the new bonds, except
to the extent of their obligations under the transaction
documents, including the equity contribution and the
pledge of AES Ironwood, Inc.'s ownership interests in
our company.
Debt Service
Reserve Account: We will be required to fund or provide for the funding
of a debt service reserve account on the commercial
operation date, the guaranteed completion date or
December 31, 2002, whichever occurs first, in an amount
sufficient to pay principal and interest due on the
bonds on the next two payment dates plus, if we provide
a letter of credit in lieu of funding the debt service
reserve account, six months of interest on the maximum
amount of the letter of credit. We anticipate satisfying
this requirement by providing a letter of credit issued
by Dresdner Bank AG, New York Branch or another
financial institution rated at least "A" by Standard &
Poor's and "A2" by Moody's.
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Change in Control: While the new bonds are outstanding, the indenture
requires The AES Corporation to maintain directly or
indirectly at least 51% of both of the voting and
economic interests in our company. If The AES
Corporation desires to reduce its voting or economic
interest in AES Ironwood, L.L.C. below 51%, either we
must receive confirmation of the initial ratings of the
bonds or the holders of at least two-thirds in aggregate
principal amount of the bonds must approve the change in
ownership.
Other Principal
Covenants: The indenture contains limitations on, among other
actions:
o incurring additional indebtedness;
o granting liens on our property;
o distributing equity and paying subordinated
indebtedness issued by our affiliates;
o entering into transactions with our affiliates;
o amending, terminating or assigning of project
contracts; and
o fundamental changes or disposition of assets.
See "SUMMARY OF PRINCIPAL FINANCING
DOCUMENTS--Indenture--Negative Covenants."
Form, Denomination and
Registration of Bonds: New bonds will be issued in fully registered form
without coupons in denominations of U.S.$100,000 and any
integral multiple of US$1,000 in excess thereof and will
be represented by one or more global bonds, each
registered in the name of a nominee of DTC. Beneficial
interests in the global bonds will be shown on, and
transfers of the beneficial interests will be effected
only through, the book-entry records maintained by DTC
and its direct and indirect participants, including the
Euroclear Systems and Cedel Bank.
Governing Law: The new bonds, the indenture and the other principal
financing documents, other than the mortgage, are
governed by the laws of the State of New York. The
mortgage is governed by the laws of the Commonwealth of
Pennsylvania.
Intercreditor
Arrangements: The collateral agency agreement requires the vote of
senior creditors holding at least one-third of our debt
to direct specified actions of the collateral agent. The
collateral agent, who is appointed by the senior
creditors to act on their behalf, may be directed to
exercise its rights to seek immediate repayment of the
bonds or its other rights under the collateral agency
agreement following:
o an event of default under the debt service reserve
letter of credit and reimbursement agreement under
which the letter of credit provider will provide
to us the letter of credit to fund the debt
service reserve account;
o an event of default under the construction period
letter of credit and reimbursement agreement,
under which the letter of credit provider has
provided to us the letter of credit if the
commercial operation date is not achieved;
o an event of default under the indenture; or
o a bankruptcy event with respect to us. The bonds
will represent approximately 95%, without giving
effect to any construction period letter of
credit, of the combined credit exposure, and, in
respect of matters voted on by the senior
creditors, the trustee under the indenture will
vote all bonds according to the votes of a
majority of bondholders voting. See "SUMMARY OF
PRINCIPAL FINANCING DOCUMENTS--Collateral Agency
Agreement."
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Accounts and
Flows of Funds: Following the commercial operation date, project
revenues will be deposited in accounts established under
the financing documents and held by the trustee and the
collateral agent. In most circumstances, operating
revenues will be applied in the following order:
o operating and maintenance costs, including any
working capital loans;
o fees, costs and expenses of the trustee,
collateral agent, debt service reserve letter of
credit provider and any construction period letter
of credit provider;
o interest payments on the bonds, debt service
reserve letter of credit loans and any
construction period letter of credit loans;
o principal payments on the bonds and any
construction period letter of credit loans;
o replenishment of the debt service reserve account
and principal payments on debt service reserve
letter of credit loans;
o required deposits in the major maintenance reserve
account;
o non-dispatch payments to Williams Energy;
o fuel conversion volume rebate payments to Williams
Energy;
o subordinated bonuses to Siemens Westinghouse, if
any;
o repayment of third-party subordinated debt; and
o subject to the restricted payments test, permitted
distributions to persons holding ownership
interests in our company.
Under circumstances involving a termination or
non-renewal of the debt service reserve letter of credit
or specified delays in repayment of the principal amount
of debt service reserve letter of credit loans,
principal repayments of drawings on the debt service
reserve letter of credit will be made at the same
priority as principal on the new bonds. Under certain
circumstances, if no default or event of default under
the indenture is continuing, we may from time to time
withdraw funds then deposited in specified accounts
established under the financing documents so long as we
provide to the collateral agent acceptable credit
support to ensure repayment of the withdrawn funds. See
"SUMMARY OF PRINCIPAL FINANCING DOCUMENTS--Collateral
Agency Agreement--Payments During Operating Period" and
"--Advances."
Independent Engineer: Stone & Webster Management Consultants, Inc., as the
independent engineer, is responsible for confirming the
reasonableness of specific statements and projections
made in specified certificates required to be provided,
including with respect to:
o satisfaction of specific requirements under the
construction agreement;
o the cost of and occurrence of the completion of
rebuilding, repairing or restoring our facility
following an event of loss or event of eminent
domain;
o under specified circumstances, the calculation of
debt service coverage ratios and the consistency
of assumptions made in connection therewith;
o whether any termination, amendment or modification
of any project contract would reasonably be
expected to have a material adverse effect; and
o specified tests required for the issuance of
additional debt.
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SUMMARY OF THE EXCHANGE OFFER
We summarize the terms of the exchange offer below. You should read the
discussion under the heading "THE EXCHANGE OFFER" beginning on page 26 for
further information regarding the exchange offer and resale of the new bonds.
The Exchange Offer: We are offering to exchange up to $308,500,000 aggregate
principal amount of new bonds, which have been
registered under the Securities Act, for up to
$308,500,000 aggregate principal amount of old bonds,
which we issued on June 25, 1999 in a private offering.
In order for your old bonds to be exchanged, you must
properly tender them prior to the expiration of the
exchange offer. All old bonds that are validly tendered
and not validly withdrawn will be exchanged. We will
issue new bonds on or promptly after the expiration of
the exchange offer. Old bonds may be exchanged for new
bonds only in integral multiples of $1,000.
Registration Rights
Agreement: We sold the old bonds on June 25, 1999 to the initial
purchasers of the old bonds. Simultaneously with that
sale we signed a registration rights agreement with the
initial purchasers which requires us to conduct this
exchange offer.
You have the right pursuant to the registration rights
agreement to exchange your old bonds for new bonds with
substantially identical terms. This exchange offer is
intended to satisfy this right. After the exchange offer
is complete, you will no longer be entitled to any
exchange or registration rights with respect to old
bonds you do not tender for exchange.
Consequences of Failure
to Exchange Your
Old Bonds: If you do not exchange your old bonds for new bonds
pursuant to the exchange offer, you will continue to be
subject to the restrictions on transfer provided in the
old bonds and the indenture. In general, the old bonds
may not be offered or sold unless registered under the
Securities Act, except pursuant to an exemption from, or
in a transaction not subject to, the Securities Act and
applicable state securities laws. We do not currently
plan to register the old bonds under the Securities Act.
To the extent that old bonds are tendered and accepted
in the exchange offer, the trading market for untendered
old bonds and tendered but unaccepted old bonds will be
adversely affected.
Expiration Date: The exchange offer will expire at 5:00 p.m., New York
City time, on ______, 2000, or a later date and time to
which we may extend it, in which case the term
"expiration date" will mean the latest date and time to
which the exchange offer is extended. Notwithstanding
the preceding sentence, we will not extend the
expiration date beyond ____________, 2000.
Withdrawal of Tenders: You may withdraw your tender of old bonds at any time
prior to the expiration date by delivering written
notice of your withdrawal to the exchange agent in
accordance with the withdrawal procedures described in
this prospectus. We will return to you, without charge,
promptly after the expiration or termination of the
exchange offer any old bonds that you tendered but that
were not accepted for exchange. The new bonds will be
issued on or promptly after the expiration date.
Conditions to
the Exchange Offer: We will not be required to accept old bonds for exchange
if the exchange offer would violate applicable law or
any legal action has been instituted or threatened that
would impair our ability to proceed with the exchange
offer. The exchange offer is not conditioned upon any
minimum aggregate principal amount of old bonds being
tendered. We reserve the right to terminate the exchange
offer if certain specified conditions have not been
satisfied and to waive any condition or otherwise amend
the terms of the exchange offer in any respect. Please
read the section "THE EXCHANGE OFFER--Conditions to the
Exchange Offer" on page 29 for more information
regarding the conditions to the exchange offer.
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Procedures for
Tendering Old
Bonds and
Representations: If your old bonds are held through The Depository Trust
Company and you wish to participate in the exchange
offer, you may do so through one of the following
methods:
o Delivery of a Letter of Transmittal. You must
complete and sign a letter of transmittal in
accordance with the instructions contained in the
letter of transmittal and forward the letter of
transmittal by mail, facsimile transmission or
hand delivery, together with any other required
documents, to the exchange agent, either with the
old bonds to be tendered or in compliance with the
specified procedures for guaranteed delivery of
the old bonds; or
o Automated Tender Offer Program of The Depository
Trust Company. If you tender under this program,
you will agree to be bound by the letter of
transmittal that we are providing with this
prospectus as though you had signed the letter of
transmittal.
Under both methods, by signing or agreeing to be bound
by the letter of transmittal, you will represent to us
that, among other things:
o any new bonds that you receive are being acquired
in the ordinary course of your business;
o you have no arrangement or understanding with any
person or entity to participate in any
distribution of the new bonds;
o you are not engaged in and do not intend to engage
in any distribution of the new bonds;
o if you are a broker-dealer that will receive new
bonds for your own account in exchange for old
bonds, you acquired those bonds as a result of
market-making activities or other trading
activities and you will deliver a prospectus, as
required by law, in connection with any resale of
the new bonds; and
o you are not our "affiliate," as defined in Rule
405 of the Securities Act.
Please do not send your letter of transmittal or
certificates representing your old bonds to us. Those
documents should only be sent to the exchange agent.
Questions regarding how to tender and requests for
information should be directed to the exchange agent.
Special Procedures for
Beneficial Owners: If you own a beneficial interest in old bonds that are
registered in the name of a broker, dealer, commercial
bank, trust company or other nominee, and you wish to
tender the old bonds in the exchange offer, you should
contact the registered holder promptly and instruct the
registered holder to tender on your behalf.
Consequences of Not
Complying with
Exchange Offer
Procedures: You are responsible for complying with all exchange
offer procedures. You will only receive new bonds in
exchange for your old bonds if, prior to the expiration
date, you deliver to the exchange agent (1) the letter
of transmittal, properly completed and duly executed,
(2) any other documents or signature guarantees required
by the letter of transmittal certificates for the old
bonds or a book-entry confirmation of a book-entry
transfer of the old and (3) bonds into the exchange
agent's account at DTC.
Any old bonds you hold and do not tender, or which you
tender but which are not accepted for exchange, will
remain outstanding. You will not have any appraisal or
dissenters' rights in connection with the exchange
offer.
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You should allow sufficient time to ensure that the
exchange agent receives all required documents before
the expiration of the exchange offer. Neither we nor the
exchange agent has any duty to inform you of defects or
irregularities with respect to your tender of old bonds
for exchange.
Guaranteed Delivery
Procedures: If you wish to tender your old bonds and cannot comply,
prior to the expiration date, with the applicable
procedures for tendering old bonds described above and
under "THE EXCHANGE OFFER--Procedures for Tendering",
you must tender your old bonds according to the
guaranteed delivery procedures described in "THE
EXCHANGE OFFER--Guaranteed Delivery Procedures"
beginning on page 31.
U.S. Federal Income
Tax Consideration: The exchange of old bonds for new bonds in the exchange
offer will not be a taxable event for U.S. federal
income tax purposes. Please read "UNITED STATES FEDERAL
INCOME TAX CONSIDERATIONS" on page 107.
Use of Proceeds: We will not receive any cash proceeds from the issuance
of new bonds. We intend to use the net proceeds from the
sale of the old bonds, together with an approximately
$50 million equity contribution, to:
o fund the engineering, procurement, construction,
testing and commissioning of our facility;
o pay legal, accounting and other related fees and
expenses in connection with the financing and
development of our project; and
o pay project costs, including interest on the
bonds.
The Exchange Agent
We have appointed The Bank of New York as exchange agent for the exchange
offer. You should direct questions and requests for assistance, requests for
additional copies of this prospectus or of the letter of transmittal and
requests for the notice of guaranteed delivery to the exchange agent addressed
as follows: The Bank of New York, 101 Barclay Street, 7E, New York, New York
10286; (212) 815-5988. Eligible institutions may make requests by facsimile at
(212) 815-6339.
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AES Ironwood, L.L.C.
AES Ironwood, L.L.C was formed to develop, construct, own, operate and
maintain a gas-fired electric generating power plant in Lebanon County,
Pennsylvania. We are in the developmental stage and currently have no operating
revenues. All of the equity interests in our company are owned by AES Ironwood,
Inc., a wholly-owned subsidiary of The AES Corporation. The AES Corporation will
provide funds to AES Ironwood, Inc. so that AES Ironwood, Inc. can make an
equity contribution to us to fund project costs. AES Ironwood, Inc. currently
has no operations outside of its activities in connection with our project and
does not anticipate undertaking any operations not associated with our project.
AES Ironwood, Inc. has no assets other than its membership interests in us and
AES Prescott, L.L.C., which will provide development, construction management
and operations and maintenance services to us. AES Prescott has no operations
outside of its activities in connection with our project. The AES Corporation
will supply AES Prescott with personnel and services necessary to carry out its
obligations to us. The AES Corporation is a public company and is subject to the
informational requirements of the Securities Exchange Act of 1934 and, in
accordance therewith, files reports, proxy statements and other information,
including financial reports, with the SEC. See "WHERE YOU CAN FIND MORE
INFORMATION."
The following organizational chart illustrates the relationship among our
company, AES Ironwood, Inc., AES Prescott and The AES Corporation:
The AES Corporation
|
|
|
AES Ironwood, Inc.
|
|
----------------------------------
| |
| |
AES Ironwood, L.L.C. AES Prescott, L.L.C.
Our Facility
Our facility, which is still under construction, consists of a 705
megawatt (net) gas-fired combined cycle electric generating facility with
oil-firing capability. We expect our facility to become operational by
approximately June 30, 2001. We will not receive any revenues from the power
purchase agreement or otherwise before our facility becomes operational, at
which time we will begin to receive revenues under the power purchase agreement.
We will sell all of our facility's capacity, and provide fuel conversion and
ancillary services, to Williams Energy under a long-term power purchase
agreement. After the expiration of the 20-year term of the power purchase
agreement, we will enter into other power purchase agreements or operate our
facility as a merchant plant (i.e., an electric generation facility with no
dedicated long-term power purchase agreement).
Our facility will be located in South Lebanon Township, Lebanon County,
Pennsylvania on property owned by us. Our facility will be designed, engineered,
procured and constructed for us by Siemens Westinghouse Power
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Corporation under a fixed-price construction agreement. Among other components,
our facility will use two Siemens Westinghouse model 501G combustion turbines
with hydrogen-cooled generators, two unfired heat recovery steam generators and
one multicylinder steam turbine with a hydrogen-cooled generator. Siemens
Westinghouse will provide us with specific combustion turbine maintenance
services and spare parts for an initial term of between eight and 10 years,
depending on the timing of scheduled outages, under a maintenance services
agreement. Under the power purchase agreement, Williams Energy or its affiliates
will supply fuel necessary to allow us to provide capacity, fuel conversion and
ancillary services to Williams Energy. AES Prescott, the operator, will provide
development, construction management and operations and maintenance services for
our facility under an operations agreement. We will provide installation,
operation and maintenance of facilities necessary to interconnect our facility
to the transmission system of Metropolitan Edison Company, under an
interconnection agreement.
-------------------
AES Ironwood, L.L.C. is a Delaware limited liability company with
principal executive offices located at 305 Prescott Road, Lebanon,
Pennsylvania 17042. Our telephone number is (717) 228-1328.
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SUMMARY OF RISK FACTORS
You should read the "Risk Factors" section of this prospectus as well as
the other cautionary statements contained in this prospectus before tendering
your old bonds for new bonds or making an investment in the new bonds. The
following is a summary of the risks that are discussed in detail in this
prospectus:
Our cash flow and our ability to service the bonds will be adversely impacted
if:
o the commercial operations of our facility are significantly delayed or
are otherwise unable to general sufficient cash flow;
o the financial condition of parties that we depend on deteriorates and
cannot be replaced or they breach their obligations to us;
o we encounter significant construction delays and any liquidated
damages, contingency funds, or insurance proceeds available to us are
likely to be insufficient to cover our financial needs;
o the insurance we have obtained is inadequate in the event of a total
loss or taking of our facility;
o unexpected events increase our expenses or reduce our projected
revenues once we are operational;
o compliance with environmental and other regulatory matters cause
significant delays or expenses; and
o we incur additional indebtedness as permitted under the indenture or
make drawings under letters of credit.
In the event of a default, you may have limited or no recourse because:
o we are the sole legally responsible party in the event that the
proceeds from the bonds, the equity contribution and the liquidation of
the collateral are exhausted; and
o the collateral agency agreement contains provisions that may limit the
remedies that could be exercised in respect of the events of default,
other than a bankruptcy event of default, unless and until the required
senior parties have directed the collateral agent to do so.
The success of our project and future operations may be impaired because:
o the combustion turbine to be used in our facility has no significant
operating experience, and we may incur problems relating to start-up,
commissioning and performance; and
o following the expiration of the power purchase agreement, our facility
is expected to become a merchant facility and we don't know if we will
be able to find adequate purchasers or otherwise compete effectively in
the merchant market.
Undue reliance should not be placed on projections and forward-looking
statements because:
o projections and their underlying assumptions are subject to significant
uncertainties and actual results often differ, perhaps materially, from
those projected; and
o forward-looking statements are based on current expectations and our
knowledge of facts as of the date of this prospectus and are subject to
various risks and uncertainties that are outside of our control.
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SUMMARY OF INDEPENDENT ENGINEER'S REPORT
Stone & Webster, with the assistance of Stone & Webster Engineering
Corporation, has prepared the independent engineer's report concerning specific
technical, environmental and economic aspects of our facility. We have attached
the independent engineer's report as Annex B to this prospectus. The independent
engineer's report includes, among other things, a conceptual design review of
our facility, a review of the significant project contracts and a review of
financial projections, including annual revenues, expenses and debt service
coverage for our facility during the period the bonds are scheduled to remain
outstanding. We retained Stone & Webster to prepare the independent engineer's
report because it is a leading consulting engineering firm which devotes a
substantial portion of its resources to providing services related to the
technical, environmental and economic aspects of power projects. Neither we, nor
any of our affiliates, is affiliated with Stone & Webster. We do not intend to
update the economic projections in the independent engineer's report from June
18, 1999, the date it was prepared.
For purposes of reviewing the projected operating results, Stone & Webster
relied on specific assumptions regarding material contingencies and other
matters that are not within our control or that of Stone & Webster or any other
person. Each of these assumptions is described in the independent engineer's
report. These assumptions are inherently subject to significant uncertainties,
and actual results will differ, perhaps materially, from those projected. See
"RISK FACTORS."
Subject to the information contained, and the assumptions and
qualifications made, in Stone & Webster's report, Stone & Webster expressed the
following opinions:
1. The facility design, as specified in the construction agreement, is
in accordance with standard industry practice. Siemens Westinghouse possesses
the organization and personnel to execute its obligations under the construction
agreement and the maintenance services agreement, and is familiar with the
construction and maintenance of large electrical generation facilities. Our
project construction schedule proposed by Siemens Westinghouse is achievable and
is consistent with the terms of the power purchase agreement.
2. Stone & Webster views the 501G combustion turbine as an advancement
in high-temperature advanced technology combustion turbines for Siemens
Westinghouse and is typical of the normal design evolution for manufacturers.
Many of the design concepts incorporated in the 501G are rooted firmly in the
501 series and are complemented by improvements which have been tested in the
501F series or predicted by extensive modeling or full scale testing. The first
501G unit is expected to begin commercial operation later in 1999. The various
501G components and designs have been individually shop tested and computer
analyzed. Siemens Westinghouse's 501G is gaining commercial acceptance as
demonstrated by the fact that 17 of Siemens Westinghouse's 501Gs have been sold
to date in the United States.
3. The combustion turbines for our project are scheduled to become the
third and fourth 501Gs in operation. As a result, our project will benefit from
approximately 25 months of facility start-up, extensive testing and operating
experience of the first installation of 501Gs (McIntosh Project) and
approximately nine months of operating experience from the second installation
of 501Gs (Millenium Project). Because the 501G has no commercial operating
experience, the initial unit availability of the 501G may be lower in the early
years of operation than is the case with combustion turbine units currently in
operation that use mature technology. Lower initial unit availability has been
reflected in the base case and a sensitivity case has been included in the
projected operating results utilizing lower availability than that described in
the base case.
4. A sustained period of commercial operation at full load conditions
followed by an inspection of the combustion turbine is necessary to predict with
any certainty the types of start-up and operational problems, if any, that the
501G may encounter. However, our project will benefit from the start-up testing
and inspection programs implemented by Siemens Westinghouse at the McIntosh and
Millenium units. Siemens Westinghouse has also invested in, and has stated that
it will make available to our project, a complete set of risk parts for the
entire combustion turbine gas path. In addition, under the maintenance services
agreement, Siemens Westinghouse will provide combustion turbine spare parts to
our project. This full set of gas path risk parts to be made available by
Siemens Westinghouse and the maintenance services agreement long term spare
parts program will minimize the duration of any unscheduled combustion
turbine-related outages that require the replacement of parts by having the most
commonly replaced parts readily available. In addition, Siemens Westinghouse has
the resources and capabilities to resolve any problem that may arise with the
501Gs.
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5. The steam turbine and electrical generator designs are acceptable
and in accordance with standard industry practice.
6. If designed and constructed in accordance with the construction
agreement and operated and maintained in accordance with the maintenance
services agreement and the operations agreement, our facility should be capable
of meeting the net output contract requirements specified in our projected
operating results.
7. The liquidated damages provisions of the construction agreement are
reasonable. The one-year warranty period is acceptable based on the commercial
terms of the construction agreement in conjunction with the one-year warranty in
the maintenance services agreement. These two agreements, although independent,
are complementary and afford our project a greater degree of protection than is
available from the construction agreement alone. Under both agreements, Siemens
Westinghouse is obligated to notify AES Ironwood, L.L.C. of any engineering or
design defects that may be manifested in any of Siemens Westinghouse's fleet of
501Gs. In addition, the risk of a component failure occurring after the one year
construction agreement warranty is mitigated because the projected operating
results indicate our project will have adequate revenues to insure the purchase
of components that can be reasonably assumed to require replacement. Component
failures associated with casualty events are generally covered by insurance
policies. The performance testing plan, as specified in the construction
agreement, is acceptable, customary and should adequately demonstrate our
project's performance.
8. Williams Energy possesses the organization and personnel to execute
its obligations under the power purchase agreement and is familiar with the
provision of fuel to, and purchase of electricity from, large electrical
generation facilities.
9. Williams Energy has executed specific agreements with Texas Eastern
Transmission Corporation to provide natural gas delivery services to AES
Ironwood, L.L.C. These agreements require Texas Eastern to construct, own and
operate an approximate three-mile pipeline from its mainline to our facility.
Stone & Webster has not, however, independently verified the design of the
natural gas pipeline which will interconnect our facility to the interstate gas
pipeline that will serve our facility nor its proposed construction schedule.
10. Our facility can feasibly be electrically integrated into the
Pennsylvania/New Jersey/Maryland (or "PJM") power pool market, and no known
transmission limitations will inhibit the feasible evacuation of our facility's
full net capacity both under summer and winter conditions.
11. Stone & Webster will independently verify the design of the make-up
water supply pipeline when it becomes available. The proposed pipeline
construction schedule appears reasonable and achievable. Stone & Webster does
not know of any reason why the City of Lebanon Authority should be unable to
perform its obligations under the effluent supply agreement.
12. AES Prescott, as an affiliate of The AES Corporation and with the
assistance of Siemens Westinghouse under the terms of the maintenance services
agreement, should be capable of operating and maintaining our facility in
accordance with standard industry practices.
13. The technical requirements described in the project contracts are
comprehensive, reasonable and achievable as well as consistent within and
between the various documents.
14. The Phase I environmental site assessments conducted by an
independent environmental consultant which indicated no significant
environmental issues were performed in accordance with standard industry
practice and their results appear reasonable.
15. A majority of our project's required permits have been acquired and
our project's permit acquisition plan for those permits not yet required is
reasonable.
16. AES Ironwood, L.L.C. has received a determination that our facility
is an exempt wholesale generator under the applicable rules of the Federal
Energy Regulatory Commission.
17. Assuming our facility is constructed, operated and maintained in
accordance with the terms of the construction agreement, the power purchase
agreement, the operations agreement and the maintenance services agreement, then
it is reasonable to assume that our facility will be able to operate in a manner
consistent with applicable permit limits for a period at least equal to the term
of the bonds.
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18. The construction agreement price is competitive relative to similar
facilities and our project's proposed operating and maintenance expenses are
consistent with other comparable projects.
19. The technical assumptions utilized in the independent power
consultant's report by Hagler Bailly are reasonable.
20. Stone & Webster reviewed the technical and commercial assumptions
and the calculation methodology of our project's financial pro forma model. The
technical assumptions assumed in the projected operating results are reasonable
and are consistent with the project contracts. The financial pro forma model
fairly presents, in Stone & Webster's judgment, projected revenues and projected
expenses under the base case assumptions. Therefore, the projected operating
results are a reasonable forecast of AES Ironwood, L.L.C.'s financial results
under the base case assumptions.
21. The principal amount of the bonds, when combined with the equity
contributions and interest earned during the construction period, should be
sufficient to pay the costs of constructing our project and interest on the
bonds through the end of the construction period.
22. The projected revenues from the sale of capacity are more than
adequate to pay the annual operating and maintenance expenses, including
provisions for major maintenance, other operating expenses and debt service
based on Stone & Webster's studies and analyses of our project and the
assumptions described in the independent engineer's report. The average and
minimum debt service coverage ratios for the full term of the bonds are 2.30x
and 1.45x, respectively. The average and minimum debt service coverage ratios
during the term of the power purchase agreement are 1.46x and 1.45x,
respectively. The average and minimum debt service coverage ratios during the
post-power purchase agreement period for the debt are 5.81x and 5.77x,
respectively.
23. Assuming deficiencies of up to 6% for heat rate and 5% for capacity,
the average debt service coverage ratios, over the term of the bonds, after
payment of liquidated damages due to a failure to achieve heat rate and capacity
guarantees, are projected to remain approximately the same as the debt service
coverage ratios in the base case.
The independent engineer's report should be read by all prospective
investors in its entirety. Stone & Webster is subject to the informational
requirements of the Exchange Act, and in accordance therewith, files reports,
proxy statements and other information with SEC. See "WHERE YOU CAN FIND MORE
INFORMATION."
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SUMMARY OF INDEPENDENT POWER CONSULTANT'S REPORT
Hagler Bailly Consulting, Inc. has prepared the independent power
consultant's report, which we have attached as Annex C to this prospectus. We
have retained Hagler Bailly to forecast our facility's use and future electric
energy prices because it is an independent consulting firm which provides
various energy-related consulting services, including services related to the
marketing and fuel supply aspects of power projects. Neither we, nor any of our
affiliates, is affiliated with Hagler Bailly.
Hagler Bailly's report includes, among other things,
o a forecast of our facility's utilization during the period after the
end of the power purchase agreement term and
o a forecast of electric energy prices during the power purchase
agreement term and electric energy and capacity prices during the
period after the end of the power purchase agreement term.
Subject to the information contained, and the assumptions and other
limitations stated, in Hagler Bailly's report, including the qualifications
described in the forward of the report, Hagler Bailly has expressed the
following opinions, among others:
1. Our facility's dispatch position on the supply curve will be highly
competitive and well below the highest priced baseload coal plant during the
period after the end of the power purchase agreement term, and during the term
of the power purchase agreement, due to our facility's high efficiency, low
production costs and the influence of demand growth in conjunction with unit
retirements.
2. Our facility is expected to have an average capacity factor of 90.7%
during the period after the end of the power purchase agreement term. The
addition of new, more efficient gas-fired power generation facilities in PJM
power pool market over time is not expected to affect our facility's dispatch.
3. Even using the price assumptions contained in the independent
engineer's report, our facility's average capacity factor remains significantly
high at 89.6% during the period after the end of the power purchase agreement
term.
4. During the term of the power purchase agreement, the economics of
our project are not sensitive to fuel prices because the costs of fuel are the
responsibility of Williams Energy under the power purchase agreement's fuel
tolling provisions.
Hagler Bailly's report, including the qualifications described in the
forward of the report, should be read by all bondholders in its entirety. We do
not intend to update the facility utilization and energy price forecast, except
to the extent required under the indenture. See "SUMMARY OF PRINCIPAL FINANCING
DOCUMENTS--Indenture--Affirmative Covenants." Hagler Bailly is subject to the
informational requirements of the Exchange Act, and in accordance therewith,
files reports, proxy statements and other information with the SEC. See "WHERE
YOU CAN FIND MORE INFORMATION."
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SUMMARY OF SIGNIFICANT PROJECT CONTRACTS
Power Purchase Agreement and Related Guaranty
Under the terms of the power purchase agreement, we will, for a term of 20
years beginning on the commercial operation date of our facility, which is the
date initial startup testing at the facility has been successfully completed and
all necessary approvals, permits, and authorizations have been obtained, sell
all of our facility's net electrical output and provide fuel conversion and
ancillary services to Williams Energy. Williams Energy is obligated to pay us
for our facility's net capacity, which payments are expected to be adequate to
cover our debt service and our fixed operation and maintenance costs and, at the
same time, provide us a return on equity. Net capacity is the maximum amount of
electricity generated by our facility minus the electricity used at our
facility. Williams Energy will be obligated to pay us whether or not it requires
our facility to generate energy and even if it is unable to take any energy, so
long as our facility is available for operation. Williams Energy is also
obligated to supply us with all of the fuel necessary to provide net capacity,
ancillary services and fuel conversion services to it. Fuel conversion services
consist of the combustion of natural gas and fuel oil in order to generate
electric energy. Ancillary services consist of services necessary to support the
transmission of capacity and energy.
The Williams Companies, Inc. will provide us with a guaranty of Williams
Energy's payment obligations to us under the power purchase agreement and to pay
damages if Williams Energy fails to pay us. The Williams Companies, Inc.'s
payment obligations under the guaranty are capped at an amount equal to 125% of
the sum of the principal amount of the new bonds plus the maximum debt service
reserve account required balance. The Williams Companies, Inc. files quarterly
and annual audited reports with the Commission under the 1934 Exchange Act,
which are publicly available; Williams Energy does not issue separate audited
financial statements. As security for our obligations under the power purchase
agreement, we are required to provide to Williams Energy either a guaranty from
The AES Corporation or a letter of credit in the amount of $30 million. To
satisfy our obligation, we have provided to Williams Energy a letter of credit
which will terminate when our facility begins commercial operation. See "SUMMARY
OF PRINCIPAL FINANCING DOCUMENTS--Construction Period Letter of Credit and
Reimbursement Agreement."
Construction Agreement and Related Guaranty
Under a construction agreement, Siemens Westinghouse will design,
engineer, procure and construct our facility so that it will be complete and
ready to operate. Siemens Westinghouse is wholly owned by Siemens Corporation
which is, in turn, wholly owned by Siemens A.G. Siemens Westinghouse's
obligations under the construction agreement will be guaranteed by Siemens
Corporation. The contract price payable to Siemens Westinghouse is $214,950,000,
which is to be paid in installments in accordance with the payment and milestone
schedule included in the construction agreement. The contract price may be
adjusted as described in the construction agreement, including as a result of
unexpected or uncontrollable events or modifications to the scope of work to be
provided by Siemens Westinghouse. Siemens Westinghouse has guaranteed that our
facility will be mechanically complete and specific performance requirements
will be satisfied so that our facility will be commercially operational by the
date which is approximately 23-1/2 months after we have given it full notice to
proceed, which we did on June 8, 1999. If our facility does not satisfy the
applicable completion requirements by the date guaranteed by Siemens
Westinghouse and the failure to satisfy the applicable completion requirements
is not excused in accordance with the terms of the construction agreement,
Siemens Westinghouse will be obligated to pay us delay liquidated damages in the
amounts specified in the construction agreement. Siemens Westinghouse has
guaranteed specific availability levels for our facility and if those levels are
not demonstrated during a 45-day period before final acceptance of our facility
by us, we may withhold specified payments to Siemens Westinghouse. Siemens
Westinghouse has also guaranteed that during performance testing, our facility
will generate a specified amount of electrical energy and meet specified thermal
efficiency rates when using natural gas and fuel oil. If Siemens Westinghouse
cannot meet these testing requirements it will be required to pay us performance
liquidated damages in the amounts specified in the construction agreement. The
total liability of Siemens Westinghouse for delays in completion, together with
its liability for any performance shortfalls, is limited in the aggregate to an
amount equal to 45% of the contract price. The construction agreement also
contains a sub-limit on Siemens Westinghouse's liability for delays in
completion of our facility in an amount equal to 20% of the contract price. The
total aggregate cap on liability of Siemens Westinghouse under the construction
agreement, including liquidated damages, but excluding specified indemnity
obligations, is limited to an amount not to exceed the contract price, as
adjusted.
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RISK FACTORS
Before tendering your old bonds for new bonds or investing in the new
bonds, you should be aware that there are various risks involved in your
investment. We have discussed below the material risks that you should consider
in making your investment decision. You should consider carefully these risk
factors, together with all of the other information included in this prospectus.
If the commercial operations of our facility are significantly delayed, or are
otherwise unable to generate sufficient cash flow, we may not be able to pay our
operating expenses or service the bonds.
Construction of our facility currently is scheduled to be completed within
23-1/2 months from the date Siemens Westinghouse receives from us a full notice
to proceed under the construction agreement. We gave full notice on June 8,
1999. We will not receive any material revenues unless and until our facility
achieves commercial operation. Once our facility commences operation, principal
and interest on the bonds will be payable principally from revenues received by
us under the power purchase agreement. Operation and maintenance expenses of our
facility generally are payable before payment of debt service with respect to
the bonds. No representation or assurance can be made that our facility will be
successfully constructed or that, if our facility is successfully constructed,
revenues will be sufficient to pay the operation and maintenance expenses of our
facility and principal of and interest on the bonds. We have no assets other
than our facility, the project contracts and other assets and contract rights
related to our facility. Once our equity contribution is made to fund project
construction costs, our debt to capitalization ratio will be .8638 to 1.
Until our facility commences operation, debt service on the bonds will be
payable solely from funds on deposit in the construction account, which deposit
was made with a portion of the net proceeds from the issuance of the old bonds,
any investment earnings, specific contingency and other funds held under the
collateral agency agreement and the indenture, insurance proceeds, if any, and
liquidated damages payable under the construction agreement. The construction
interest account under the indenture will contain an amount sufficient to pay
interest on the bonds only through 45 days following the guaranteed provisional
acceptance date under the construction agreement, without giving effect to any
extensions. Thus, if there is a prolonged delay beyond the guaranteed
provisional acceptance date in our facility's attaining commercial operation, we
cannot assure that sufficient sources of funds will be available to make
payments of principal of, premium, if any, and interest on the bonds.
During the term of the power purchase agreement, our ability to make
payments of principal of, premium, if any, and interest on the bonds will be
substantially a function of (1) the ability of our facility to operate at levels
which provide sufficient revenues from sales to Williams Energy after the
payment of all operation and maintenance expenses and specific other expenses
paid prior to debt service and (2) the ability of Williams Energy to make
required payments under the power purchase agreement. Fixed payments under the
power purchase agreement may be reduced significantly or eliminated during
periods when our facility's availability fails to meet required levels under the
power purchase agreement. With specific exceptions, fixed payments will not be
made by Williams Energy during unexpected or uncontrollable events which prevent
our facility from operating. Following the expiration of the term of the power
purchase agreement, our ability to make payments of principal of, premium, if
any, and interest on the bonds will be substantially a function of:
o our ability to find purchasers of electric generating capacity and
energy from our facility;
o the availability of adequate market prices for capacity, energy and
ancillary services;
o our ability to procure sufficient quantities of fuel at competitive
prices; and
o the ability of our facility to operate at levels which provide
sufficient revenues from the sale of electric generating capacity,
energy and ancillary services to power purchasers after the payment of
all operation and maintenance expenses and certain other expenses paid
prior to service.
In the event that we exhaust the proceeds from the bonds, the equity
contribution and the liquidation of the collateral, the holders of the bonds
will have limited or no recourse in the event of a default.
Because we are a special-purpose company, our ability to make payments of
principal of, any premium, and interest on the bonds will be entirely dependent
on the performance of our obligations under the project contracts and financing
documents. Our obligations under the financing documents will be obligations
solely of ours, secured solely by the collateral. If we default in our
obligations under the financing documents, we cannot assure that realization on
the collateral would provide sufficient funds to repay all amounts due on the
bonds.
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None of the owners of the ownership interests in our company nor any
affiliate, incorporator, stockholder, partner, officer, director or employee of
ours, will guarantee the payment of the bonds or has any obligation with respect
to the payment of the bonds. The collateral includes a pledge of AES Ironwood,
Inc.'s ownership interests in AES Ironwood, L.L.C., and under the equity
subscription agreement, AES Ironwood, Inc. has agreed to contribute in the
aggregate up to $50,149,285 to us to fund project costs. However, neither AES
Ironwood, Inc. nor any of its affiliates has any obligation to contribute sums
in excess of the amount required to be advanced under the equity subscription
agreement. If the proceeds of the bonds and the equity contribution required
under the equity subscription agreement are insufficient to fund the successful
development, construction, start-up and testing of our facility, we may not have
other sources of funds available to complete our facility.
The bonds will be secured by liens on substantially all of our assets
related to our facility, including all of the project contracts. If a default
occurs under the indenture or other financing documents, we cannot assure that
an exercise of remedies, including foreclosing on the assets in a judicial
proceeding, would provide sufficient funds to repay all amounts due on the
bonds. As result of specific provisions of the documents under which we obtained
our rights in and to the facility site, it is unlikely that the real estate
comprising a portion of the collateral could be used for any purpose other than
an electric generating facility.
If the parties that we depend on breach their obligations to us, our cash flow
and ability to service the bonds will be impaired.
During the term of the power purchase agreement, we will be dependent on
Williams Energy for revenues from sales of capacity, ancillary services and
energy from our facility and on Williams Energy and its affiliates for fuel
supply and transportation. We are dependent on Metropolitan Edison for
connection of our facility to the electric transmission grid, as well as on
other third-party sources of goods and services which constitute the principal
inputs to our facility's operations. Any material breach by any of these parties
of their obligations under the project contracts will adversely affect our cash
flows and will impair our ability to make payments of principal of and interest
on the bonds.
The other parties to the project contracts have the right to terminate
and/or withhold payments or performance under the contracts if specific events
occur. If a project contract were to be terminated due to nonperformance by us
or by the other party to the contract, our ability to enter into a substitute
agreement having substantially equivalent terms and conditions is uncertain.
If Williams Energy's financial condition deteriorates or it breaches its
obligations to us and cannot be adequately replaced, we may not be able to
service the bonds.
Williams Energy currently is our sole customer for purchases of capacity,
ancillary services and energy. Williams Energy's payments under the power
purchase agreement are expected to provide all of our revenues during the term
of the power purchase agreement. It is uncertain whether we would be able to
find another purchaser on similar terms for our facility's output if Williams
Energy were not performing under the power purchase agreement. If another
purchaser or purchasers could be found, we cannot assure that the price paid by
that purchaser or purchasers would be sufficient to enable us to make payments
in respect of the bonds. Any material failure by Williams Energy to make
capacity and fuel conversion payments under the power purchase agreement will
therefore have a material adverse effect on revenues and our ability to make
payments in respect of the bonds.
The ability of Williams Energy to meet its obligations under the power
purchase agreement will be dependent on Williams Energy's financial condition
generally, and Williams Energy's financial condition will in part be dependent
upon its ability to sell our facility's capacity and electric energy at adequate
prices.
As we have described in this prospectus, The Williams Companies, Inc. will
provide to us a guaranty of Williams Energy's obligations under the power
purchase agreement to make fixed payments and to pay damages if Williams Energy
fails to make the fixed payments. The Williams Companies, Inc.'s obligations
under that guaranty are capped at an amount equal to 125% of the sum of (x) the
principal amount of the bonds plus (y) the maximum debt service reserve account
required balance.
If we encounter significant construction delays, any liquidated damages,
contingency funds, or insurance proceeds may be insufficient to service the
bonds.
As with any major construction undertaking, completion of our facility
could be delayed or prevented, or cost overruns could be incurred, as a result
of numerous factors, including shortages of material, labor disputes, weather
interferences, difficulties in obtaining necessary permits or in meeting permit
conditions or unforeseen engineering,
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environmental or geological problems. We cannot assure that any available
liquidated damages or contingency funds or the proceeds of any insurance and
warranties would be sufficient to pay for any significant cost overruns or
redeem a sufficient principal amount of the bonds so that projected debt service
coverage ratios can be achieved or maintained. In particular, we are required to
pay principal of any premium, and interest on the bonds without regard to any
unexpected or uncontrollable events under the construction agreement.
If as a result of unexpected or uncontrollable events specified in the
construction agreement or specified acts or omissions by us, completion of our
facility is delayed or prevented, or our facility cannot achieve operation in
accordance with design specifications and performance guarantees, Siemens
Westinghouse will not be obligated to pay liquidated damages. Under these
circumstances, no proceeds of insurance may be available to us or any proceeds
that are available may not be sufficient to pay our debt service or increased
costs. Generally, Siemens Westinghouse will not be obligated to pay liquidated
damages for events or circumstances that adversely affect its ability to perform
its obligations under the construction agreement to the extent that the events
or circumstances are beyond its reasonable control and are not caused by its or
its subcontractors' negligence or lack of due diligence and could not have been
avoided by the use of its reasonable efforts. In addition, the date for
achievement of provisional acceptance and the guaranteed provisional acceptance
under the construction agreement could be subject to adjustment as a result of
unexpected or uncontrollable events.
The power purchase agreement requires that the commercial operation date
occur by no later than June 30, 2001, which may be extended under the terms of
the power purchase agreement to no later than December 31, 2002. Our project
capital budget includes adequate funds for the payment of amounts that may be
required to extend the commercial operation under the power purchase agreement.
If the commercial operation date fails to occur by that date, as so extended,
Williams Energy may terminate the power purchase agreement.
Under the construction agreement, we are responsible for a number of
matters in connection with the construction, completion and start-up of our
facility. While we believe that we have made adequate arrangements to assure
timely performance of our responsibilities, we are relying on other parties to
enable us to perform our responsibilities under the construction agreement and
we cannot be certain that the other parties will meet their obligations under
their contracts. See "SUMMARY OF PRINCIPAL PROJECT CONTRACTS--Construction
Agreement."
Because the facility has not yet been constructed and our company has no
operating history, various unexpected events may increase our expenses or reduce
our revenues and impair our ability to service the bonds.
Because our facility has not yet been constructed, it has no operating
history. Operation of our facility could be affected by many factors, including
start-up problems, the breakdown or failure of equipment or processes, the
performance of our facility below expected levels of output or efficiency,
failure to operate at design specifications, labor disputes, changes in law,
failure to obtain necessary permits or to meet permit conditions, government
exercise of eminent domain power or similar events and catastrophic events
including fires, explosions, earthquakes and droughts. The occurrence of these
events could significantly reduce or eliminate revenues or significantly
increase the expenses of our facility, thereby jeopardizing our ability to make
payments on the bonds. In addition, the liability of AES Prescott for failure to
perform under the operations agreement is subject to specific limitations and
AES Prescott is not required to post a performance bond. The proceeds of any
available insurance and limited warranties may not be adequate to cover our lost
revenues or increased costs. See "SUMMARY OF PRINCIPAL PROJECT CONTRACTS--Power
Purchase Agreement" and "--Operations Agreement."
Because the combustion turbines to be used in our facility have no significant
operating experience, our project may incur problems relating to start-up,
commissioning and performance.
The Siemens Westinghouse 501G combustion turbines to be used in our
facility are the manufacturer's latest development in combustion turbines whose
fundamental design basis is based upon the Siemens Westinghouse 501 series.
However, the 501G combustion turbine currently has no significant operating
experience and may have unit availability lower than combustion turbine units
using mature technologies. Thus, we cannot assure that our project will not
incur problems relating to start-up, commissioning and performance that could
jeopardize the achievement of Provisional Acceptance, timely commencement of
commercial operations of our facility or the performance of our facility during
its commercial operation. For a discussion of the 501G technology and related
risks, see "ANNEX B: INDEPENDENT ENGINEER'S REPORT--Facility Design."
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Following the expiration of the power purchase agreement, our facility is
expected to become a merchant facility and we cannot assure that we will be able
to find adequate purchasers or otherwise compete effectively in the merchant
market.
At the end of the term of the power purchase agreement, at which time
27.1% of the bonds are expected to remain outstanding, our facility is expected
to become a merchant facility, i.e., an electric generation facility with no
dedicated long-term power purchase agreement, and Williams Energy's obligation
to provide fuel will cease. If the power purchase agreement is terminated prior
to its stated term as a result of an event of default or otherwise, our facility
could enter a merchant phase sooner than the anticipated termination date of the
power purchase agreement. Given the uncertainty regarding the performance of our
facility, future environmental regulation, competition from other generating
facilities, including possibly some owned by The AES Corporation and its
affiliates, fuel prices and other market conditions that may prevail in the
future in the PJM power pool market, we cannot assure that we will be able to
find purchasers or otherwise compete effectively in the merchant market.
Also, there are current legal and regulatory limitations on our ability to
operate our facility on a merchant basis. Our rate schedule when filed with FERC
will be limited to sales to Williams Energy. Under current law, before we could
engage in sales to any other entities, we will be required to seek additional
market-based rate authority from FERC. Although we do not currently anticipate
that we would encounter material difficulty in obtaining this additional
market-based rate authority, we cannot assure that FERC will grant this
authority. In addition, our status as an exempt wholesale generator under
federal law prohibits us from making retail sales of electricity in the United
States. We currently anticipate that electric energy generated by our facility
will be sold primarily in the wholesale market both during the term of the power
purchase agreement and after our facility becomes a merchant plant.
Nevertheless, if we were to desire to participate directly in the retail
electric market when that market develops, we would be precluded from doing so
absent a change in federal law. Under current federal law, however, we would not
be precluded from making sales to a power marketer, including an affiliate,
which could in turn make retail sales.
Compliance with environmental and other regulatory matters could cause
significant delays and expenses that may impair our ability to service the
bonds.
General
We are subject to a number of statutory and regulatory standards and
required approvals relating to energy, labor and environmental laws. Although
the necessary environmental permits for the commencement of construction of our
facility have been obtained, we are required to comply with the terms of our
environmental permits and to obtain other permits for the construction and
operation of our facility. Several of our permits have not yet been obtained,
and some cannot be obtained until our facility has commenced operation. Under
specific circumstances, delay in receipt of or failure to obtain the permits
could delay completion of the construction of our facility or prevent the
operation of our facility.
Some permits that have been obtained by us in connection with our facility
will require amendment prior to commercial operation of our facility and others
will require renewal or reissuance during the life of our facility. While we
have no reason to believe that the permits cannot be amended or will not be
renewed or reissued, our inability to amend, renew or obtain reissuance of these
permits in the future could cause the suspension of construction or operation of
our facility.
The permits that have been obtained and that will be obtained contain
ongoing requirements. Failure to satisfy and maintain any permit conditions or
other applicable requirements could delay or prevent completion of the
construction of our facility, prevent the operation of our facility and/or
result in additional costs. If our facility attains commercial operation, we
cannot assure that our facility will operate within the limits established by
the permits or approvals. See "OUR BUSINESS--Permits and Regulatory Approvals"
and "ANNEX B: INDEPENDENT ENGINEER'S REPORT--Environmental and Permitting."
Energy Regulatory Matters
We believe that we have obtained all material energy-related federal,
state and local approvals required as of the date of this prospectus to
construct and operate our facility. Although not currently required, additional
regulatory approvals, including renewals, extensions, transfers, assignments,
reissuances or similar actions, may be required in the future due to a change in
laws and regulations, a change in our power purchasers or for other reasons. We
cannot assure that we will be able to (1) obtain all required regulatory
approvals that we do not yet have or that we may require in the future, (2)
obtain any necessary modifications to existing regulatory approvals or (3)
maintain required regulatory
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approvals. Delay in obtaining or failure to obtain and maintain in full force
and effect any regulatory approvals, or amendments, or delay or failure to
satisfy any conditions or applicable requirements, could prevent operation of
our facility or sales to third parties, or could result in additional costs to
us. Our business also could be materially and adversely affected as a result of
statutory or regulatory changes or judicial or administrative interpretations of
existing laws and regulations that impose more comprehensive or stringent
requirements on us.
The insurance we have obtained may be inadequate in the event of a total loss or
taking of our facility, and we cannot assure that the insurance proceeds we
receive will be sufficient to satisfy all of our indebtedness.
We are obligated under the financing documents and other project contracts
to obtain and keep in force comprehensive insurance with respect to our
facility, including general liability insurance and machinery coverage, business
interruption insurance, delay in start-up insurance and all-risk property damage
insurance, including, among other things, damage caused by fire, floods or
hurricanes. We cannot assure that the insurance coverage will be available in
the future at commercially reasonable costs or that the amounts for which we are
insured or amounts which we receive under insurance coverage will cover all
losses. If there is a total loss or taking of our facility, we cannot assure
that the insurance proceeds we receive will be sufficient to satisfy all our
indebtedness, including the redemption of the bonds as required under the
indenture. See "SUMMARY OF PRINCIPAL FINANCING DOCUMENTS--Indenture."
The incurrence of additional indebtedness may impair our ability to service the
bonds.
We may issue additional bonds and we may incur additional indebtedness at
any time or from time to time, in accordance with the terms of the indenture.
Any additional bonds will, and any additional senior debt, may rank equally with
all our senior secured indebtedness. The issuance of additional bonds, other
than for refinancing purposes, or additional senior debt would create additional
claims against the collateral under the security documents and could result in a
reduction in debt service coverage ratios and cash available to make payments of
principal of and interest on the bonds. See "SUMMARY OF PRINCIPAL FINANCING
DOCUMENTS--Indenture."
Subject to limitations described in the indenture, we are permitted to
incur subordinated debt, which may be secured by a junior lien on the
collateral, for purposes allowed under the indenture. Although subordinated debt
would be subject to limitations contained in the collateral agency agreement
concerning the ability of the holders of subordinated debt to declare defaults,
exercise remedies or institute specified legal proceedings, the incurrence of
subordinated debt would increase our leverage and the total debt service payable
by us. In addition, the holders of subordinated debt may be our secured
creditors and therefore have the rights available to secured creditors under
federal and state law.
Drawings under letters of credit may increase payments of debt service on senior
debt.
Drawings under the debt service reserve letter of credit will be converted
into debt service reserve letter of credit loans which will mature five years
after the date of the loans. Interest on debt service reserve letter of credit
loans is payable at the same level in the flow of funds as payments of interest
on other senior debt, including the bonds. Principal on debt service reserve
letter of credit loans is generally payable out of available cash flow after the
payment of principal on the bonds. In specific circumstances, however, principal
payments on any drawings under the debt service reserve letter of credit will be
made at the same level in the flow of funds as payments of principal on the
bonds.
If the construction period letter of credit is issued and our facility is
not completed within the time period specified in the power purchase agreement,
as may be extended, Williams Energy may draw on the construction period letter
of credit. Drawings under the construction period letter of credit will be
converted into construction period letter of credit loans under any construction
period letter of credit reimbursement agreement that will mature in 10 years
from the conversion. Principal of and interest on any construction period letter
of credit loans under the construction period letter of credit reimbursement
agreement will be made at the same respective levels in the flow of funds as
payments of principal and of interest on the bonds.
Thus, drawings on the construction period letter of credit and, in
specific circumstances, drawings under the debt service reserve letter of
credit, will increase payments of debt service on senior debt. We cannot assure
that our revenues from sales of capacity and fuel conversion services under the
power purchase agreement or otherwise would be sufficient to cover the increases
in debt service payments. The lenders under the debt service reserve letter of
credit reimbursement agreement and the construction period letter of credit
reimbursement agreement will rank equally with the bonds by a lien on and
security interest in the collateral.
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The collateral agency agreement contains provisions that may limit the remedies
that could be exercised in respect of the event of default, other than a
bankruptcy event of default, unless and until the required senior parties have
directed the collateral agent to do so.
We have entered into a collateral agency agreement with our senior
creditors designating the collateral agent as the agent for each of the senior
creditors. The collateral agency agreement requires the affirmative vote of
senior creditors holding at least a majority of the outstanding combined
exposure to direct specific actions of the collateral agent, including the
exercise of remedies following a trigger event. Because the affirmative vote of
these required senior creditors is required before the collateral agent can
exercise remedies under the collateral agency agreement and the other security
documents following most events of default, if an event of default under the
indenture were to occur, no remedies could be exercised in respect of the event
of default, other than a bankruptcy event of default, unless and until the
required senior creditors have directed the collateral agent to do so. If the
holders of the bonds do not constitute holders of at least a majority of the
outstanding combined exposure, the trustee and the holders of the bonds may not
be able to direct the collateral agent to exercise remedies in respect of an
event of default under the indenture without the affirmative vote of other
senior creditors. In addition, under the terms of the other financing documents,
we may not terminate, amend or otherwise modify any provision of the indenture,
any other security document or any subordinated loan agreement, if the
termination, amendment or modification could, in the reasonable opinion of the
creditors who are parties to the other financing documents, reasonably be
expected to have a material adverse effect on the rights and benefits of the
creditors. See "SUMMARY OF PRINCIPAL FINANCING DOCUMENTS--Collateral Agency
Agreement."
Projections and the assumptions underlying those projections used in the
projections are inherently subject to significant uncertainties and actual
results may differ, perhaps materially, from those projected and should not be
unduly relied upon.
The financing of our facility has been structured on the basis of
assumptions and projections with respect to our facility's potential revenue
generating capacity and associated costs over the term of the bonds. Stone &
Webster, as independent engineer, has evaluated the technical, environmental and
economic aspects of our project. Stone & Webster's report contains a discussion
of the many assumptions utilized in preparing these projections. Investors
should review Stone & Webster's report in its entirety.
Projections of future operations and the economic results of those
operations included in Stone & Webster's report have been prepared by us and
reviewed by Stone & Webster on the basis of present knowledge and assumptions
which we and Stone & Webster believe to be reasonable. Our independent auditors
have not examined, reviewed or compiled the projections and, accordingly, do not
express an opinion or any other form of assurance with respect to them. After
the issuance of the bonds, neither we nor Stone & Webster will provide the
holders of the bonds with revised projections or any report of the differences
between the projections and actual operating results later achieved by our
project.
For purposes of preparing the projections, assumptions were made, of
necessity, with respect to completion of construction, availability and
performance of our facility, dispatch levels, capital expenditures, operation
and maintenance expenditures, the revenues that we will receive for capacity and
electric energy, the availability of fuel, our tax treatment, general business
and economic conditions and several other material contingencies and other
matters that are not within our control and the outcome of which cannot be
predicted by us, Stone & Webster, or any other person with any certainty of
accuracy. These assumptions and the other assumptions used in the projections
are inherently subject to significant uncertainties and actual results will
differ, perhaps materially, from those projected. Accordingly, the projections
do not necessarily indicate current values or future performance and neither we,
Stone & Webster, nor any other person assumes any responsibility for their
accuracy. Therefore, no representation is made or intended, and none should be
inferred with respect to the likely existence of any particular future set of
facts or circumstances. If actual results are materially less favorable than
those shown or if the assumptions used in formulating the projections prove to
be incorrect, our ability to make payments of principal of, premium, if any, and
interest on the bonds may be adversely affected.
Cautionary note regarding forward-looking statements.
This prospectus includes forward-looking statements. We have based these
forward-looking statements on our current expectations and projections about
future events based upon our knowledge of facts as of the date of this
prospectus and our assumptions about future events. These forward-looking
statements are subject to various risks and
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uncertainties that may be outside of our control, including the factors
discussed in the "RISK FACTORS" section beginning on page 17.
We use words like "anticipate," "estimate," "project," "plan," "expect" and
similar expressions to help identify forward-looking statements in this
prospectus.
In light of these uncertainties and assumptions, the actual events or
results may be very different from those expressed or implied in the
forward-looking statements in this prospectus or may not occur. We have no
obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.
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USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the new bonds.
In consideration for issuing the new bonds, we will receive in exchange a like
principal amount of old bonds. The old bonds surrendered in exchange for the new
bonds will be retired and canceled and cannot be reissued. Accordingly, issuance
of the new bonds will not change our capitalization. We intend to use the net
proceeds from the sale of the old bonds, together with an approximately $50
million equity contribution, approximately as follows:
(thousands)
Construction Costs....................... $238,000
Other Hard (Construction-Related) Costs.. $13,944
Legal, Accounting, Consulting and Other
Development and Construction Costs..... $21,345
Initial Working Capital.................. $1,800
Net Interest During Construction......... $51,141
Start-up and Other Soft Costs............ $15,419
Company's Contingency.................... $17,000
TOTAL USES OF FUNDS................ $358,649
=======
As of January 31, 2000:
o the following line items have been paid in their entirety:
- Legal, Accounting, Consulting and Other Development and Construction
Costs;
o the following line items have been partially paid as follows (in
thousands):
- Construction Costs - $210,700,
- Other Hard (Construction-Related) Costs - $2,000,
- Net Interest During Construction - $16,400 and
- Start-up and Other Soft Costs - $8,600;
o the following line items have not been used:
- Initial Working Capital and
- Company's Contingency.
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CAPITALIZATION
The following table sets forth our capitalization as of December 31, 1999.
The following information should be read in conjunction with the consolidated
financial statements and related notes thereto and the other financial
information contained elsewhere in this prospectus. See "SELECTED FINANCIAL
DATA" and "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS."
Long-Term Debt:
(thousands)
Long Term Bonds.................... $308,500
=======
Funds available from the issuance of the old bonds will be drawn from time
to time to fund construction of our facility. Once the available old bond
proceeds have been used, AES Ironwood, Inc. agrees to fund up to approximately
$50.1 million of project costs to be contributed to us pursuant to the equity
subscription agreement.
CALCULATION OF EARNINGS TO FIXED CHARGES DEFICIENCY
EARNINGS December 31, 1999
(thousands)
Pretax Income...................... $(2,641)
Fixed Charges...................... 14,237
Capitalized Interest............... (8,438)
--------
Net Total.......................... $ 3,158
========
FIXED CHARGES
Interest Expense................... $ 5,755
Capitalized Interest............... 8,438
Other.............................. 44
--------
Total.............................. $14,237
========
The dollar amount of the deficiency of earnings to fixed charges is:
($11,079) (in thousands).
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THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
In connection with the issuance of the old bonds, we entered into a
registration rights agreement. Under the registration rights agreement, we
agreed to:
o prepare and file a registration statement with the SEC for an exchange
of the new bonds for the old bonds under the Securities Act;
o use our reasonable efforts to cause the registration statement to
become effective within 180 days following the original issuance of the
old bonds;
o keep the exchange offer open for acceptance for a period of not less
than 30 days, or longer, if required by law, after the date the
registration statement is declared effective by the SEC; and
o accept for exchange all old bonds validly tendered by and not withdrawn
in accordance with the terms of the exchange offer registration
statement.
As soon as practicable after the exchange offer registration statement
becomes effective, we will offer the holders of old bonds who are not prohibited
by any law or policy of the SEC from participating in this exchange offer the
opportunity to exchange their old bonds for new bonds registered under the
Securities Act that are substantially identical to the old bonds, except that
the new bonds will not contain terms with respect to transfer restrictions,
registration rights and additional interest.
Under limited circumstances, we will use our reasonable best efforts to
cause the SEC to declare effective a shelf registration statement with respect
to the resale of the old bonds and keep the statement effective for up to two
years after the effective date of the shelf registration statement. These
circumstances include:
o if any changes in law or their interpretations by the staff of the SEC
do not permit us to effect the exchange offer as contemplated by the
registration rights agreement;
o if the exchange offer is not consummated within 220 days after June 25,
1999, or by January 31, 2000;
o if any of Lehman Brothers, Morgan Stanley Dean Witter or Dresdner
Kleinwort Benson North America, as initial purchasers of the old bonds,
so requests with respect to old bonds held by it following consummation
of the exchange offer; and
o if any holder of the old bonds notifies us that it is not permitted to
participate in the exchange offer or has participated in the exchange
offer and has received new bonds that are not freely tradeable.
Interest in addition to the interest otherwise due will accrue on the
bonds at a rate of 0.5% per annum if the exchange offer is not consummated or
the shelf registration statement is not declared effective by the SEC on or
prior to 220 days after June 25, 1999, or by January 31, 2000. Any additional
interest will accrue on the old bonds from and including the date on which the
circumstances giving rise to the additional interest will occur to but excluding
the date on which all the circumstances have been cured. Any additional interest
will be payable on the bond payment dates.
To exchange your old bonds for transferable new bonds in the exchange
offer, you will be required to make the following representations:
o any new bonds that you receive will be acquired in the ordinary course
of your business;
o you have no arrangement or understanding with any person or entity to
participate in the distribution of the new bonds;
o you are not our "affiliate," as defined in Rule 405 of the Securities
Act;
o you are not a broker-dealer, and you are not engaged in and do not
intend to engage in the distribution of the new bonds; and
o if you are a broker-dealer that will receive new bonds for your own
account in exchange for old bonds, you acquired those bonds as a result
of market-making activities or other trading activities and you will
deliver a prospectus, as required by law, in connection with any resale
of the new bonds.
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In addition, if we are required to file a shelf registration statement, we
may require you to deliver information to be used in connection with the shelf
registration statement in order to have your bonds included in the shelf
registration statement. A holder who sells old bonds under the shelf
registration statement generally will be required to be named as a selling
security holder in the related prospectus and to deliver a prospectus to
purchasers. The holder will also be subject to the civil liability provisions
under the Securities Act in connection with the sale of old bonds under the
shelf registration statement and will be bound by the provisions of the
registration rights agreement that are applicable to the holder, including
indemnification obligations.
The description of the registration rights agreement contained in this
section is a summary only. For more information, you may review the provisions
of the registration rights agreement that we filed with the SEC as an exhibit to
the registration statement of which this prospectus is a part.
Resale of New Bonds
Based on the interpretations of the SEC staff in no-action letters issued
to third parties, we believe that new bonds issued under the exchange offer may
be offered for resale, resold and otherwise transferred by you as the holder of
the new bonds without compliance with the registration and prospectus delivery
provisions of the Securities Act, if:
o you are not our "affiliate" within the meaning of Rule 405 under the
Securities Act;
o the new bonds are acquired in the ordinary course of your business; and
o you do not intend to participate in any distribution of the new bonds.
Broker-dealers that acquired old bonds directly from us may not rely on
the interpretations of the SEC described above. Accordingly, in order to sell
their bonds, broker-dealers that acquired old bonds directly from us must comply
with the registration and prospectus delivery requirements, including being
named as a selling security holder in any resale prospectus. If you are a
broker-dealer that will receive new bonds for your own account in exchange for
old bonds, you acquired those bonds as a result of market-making activities or
other trading activities and you will deliver a prospectus, as required by law,
in connection with any resale of the new bonds. Only broker-dealers that
acquired old bonds as a result of market-making or other trading activities may
participate in the exchange offer.
If you do not satisfy the above conditions, you
o cannot rely on the interpretations by the SEC staff; and
o must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with a secondary resale
transaction.
We do not intend to seek our own no-action letter, and there can be no
assurance that the SEC staff would make a similar determination with respect to
the new bonds as it has in prior no-action letters issued to other parties. In
November 1998, the SEC proposed certain changes to the regulatory structure for
offerings registered under the Securities Act. The SEC has stated that, if these
proposals are adopted, the SEC staff will repeal its interpretations described
in prior no-action letters. We cannot predict whether these proposals will be
adopted or, if they are adopted, when and in what form they will be adopted.
If an exemption from registration is not available, any bondholder
intending to distribute new bonds should be covered by an effective registration
statement under the Securities Act containing the selling bondholder's
information required by Item 507 of Regulation S-K under the Securities Act.
This prospectus may be used for an offer to resell, resale or other retransfer
of new bonds only as specifically described in this prospectus. Please read the
section captioned "PLAN OF DISTRIBUTION" for more details regarding the transfer
of new bonds.
Terms of the Exchange Offer
Upon the terms and subject to the conditions described in this prospectus
and in the letter of transmittal, we will accept for exchange any old bonds
properly tendered and not withdrawn prior to the expiration date. We will issue
new bonds in principal amount equal to the principal amount of old bonds
surrendered under the exchange offer. Old bonds may be tendered for new bonds
only in integral multiples of $1,000.
The exchange offer is not conditioned upon any minimum aggregate principal
amount of old bonds being tendered for exchange.
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As of the date of this prospectus, $308,500,000 aggregate principal amount
of the old bonds are outstanding. This prospectus and the letter of transmittal
are being sent to all registered holders of old bonds. There will be no fixed
record date for determining registered holders of old bonds entitled to
participate in the exchange offer.
We intend to conduct the exchange offer in accordance with the provisions
of the registration rights agreement, the applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations of the SEC.
Old bonds that are not tendered for exchange in the exchange offer will remain
outstanding and continue to accrue interest and will be entitled to the rights
and benefits the holders have under the indenture relating to the bonds and the
registration rights agreement.
We will be deemed to have accepted for exchange properly tendered old
bonds when we have given oral or written notice of the acceptance to the
exchange agent and complied with the applicable provisions of the registration
rights agreement. The exchange agent will act as agent for the tendering holders
for the purposes of receiving the new bonds from us.
If you tender old bonds in the exchange offer, you will not be required to
pay brokerage commissions or fees or, subject to the instructions in the letter
of transmittal, transfer taxes with respect to the exchange of old bonds. We
will pay all charges and expenses, other than applicable taxes described below,
in connecting with the exchange offer. It is important that you read the section
labeled "--Fees and Expenses" for more details regarding fees and expenses
incurred in the exchange offer.
We will return any old bonds that we do not accept for exchange for any
reason without expense to their tendering holder as promptly as practicable
after the expiration or termination of the exchange offer.
Neither we nor our board of directors makes any recommendation to holders
of the old bonds as to whether to tender or refrain from tendering all or any
portion of their old bonds in the exchange offer. In addition, no one has been
authorized to make any recommendation to holders of the old bonds. Holders of
the old bonds must make their own decision whether to tender pursuant to the
exchange offer, and, if so, the aggregate amount of old bonds to tender after
reading this prospectus and the letter of transmittal and consulting with their
advisers, if any, based on their financial position and requirements.
Expiration Date
The exchange offer will expire at 5:00 p.m., New York City time ________,
2000, unless, in our sole discretion, we extend it. Notwithstanding the
preceding, we will not extend the expiration date beyond __________________,
2000.
Extensions, Delays in Acceptance, Termination or Amendment
We expressly reserve the right, at any time or various times, to extend
the period of time during which the exchange offer is open. We may delay
acceptance of any old bonds by giving oral or written notice of the extension to
their holders. During any extensions, all old bonds previously tendered will
remain subject to the exchange offer, and we may accept them for exchange.
In order to extend the exchange offer, we will notify the exchange agent
orally or in writing of any extension. We will notify the registered holders of
old bonds of the extension no later than 9:00 a.m., New York City time, on the
business day after the previously scheduled expiration date.
If any of the conditions described below under "--Conditions to the
Exchange Offer" have not been satisfied, we reserve the right, in our sole
discretion:
o to delay accepting for exchange any old bonds;
o to extend the exchange offer; or
o to terminate the exchange offer
by giving oral or written notice of the delay, extension or termination to the
exchange agent. Subject to the terms of the registration rights agreement, we
also reserve the right to amend the terms of the exchange offer in any manner.
Any delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice to the registered
holders of old bonds. If we amend the exchange offer in a manner that we
determine to constitute a material change, we will promptly file a
post-effective amendment to the registration statement
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and disclose the amendment by means of a prospectus supplement when the
post-effective amendment has been declared effective by the SEC. The supplement
will be distributed to the registered holders of the old bonds. Depending upon
the significance of the amendment and the manner of disclosure to the registered
holders, we will extend the exchange offer if the exchange offer would otherwise
expire during any period of delay.
Conditions to the Exchange Offer
Despite any other term of the exchange offer, we will not be required to
accept for exchange, or exchange any new bonds for, any old bonds, and we may
terminate the exchange offer as provided in this prospectus before accepting any
old bonds for exchange, if in our reasonable judgment:
o the exchange offer, or the making of any exchange by a holder of old
bonds, would violate applicable law or any applicable interpretation of
the staff of the SEC; or
o any action or proceeding has been instituted or threatened in any court
or by or before any governmental agency with respect to the exchange
offer that, in our judgment, would reasonably be expected to impair our
ability to proceed with the exchange offer.
In addition, we will not be obligated to accept for exchange the old bonds
of any holder that has not made to us the representations described under
"--Purpose and Effect of the Exchange Offer," "--Procedures for Tendering" and
"PLAN OF DISTRIBUTION" and any other representations as may be reasonably
necessary under applicable SEC rules, regulations or interpretations to make
available to us an appropriate form for registration of the new bonds under the
Securities Act.
We expressly reserve the right to amend or terminate the exchange offer
and to reject for exchange any old bonds not previously accepted for exchange,
upon the occurrence of any of the conditions to the exchange offer specified
above. We will give oral or written notice of any extension, amendment,
non-acceptance or termination to the registered holders of the old bonds as
promptly as practicable.
These conditions are for our sole benefit and we may assert them in whole
or in part at any time or at various times in our sole discretion. If we fail at
any time to exercise any of these rights, this failure will not mean that we
have waived our rights. Each right will be deemed an ongoing right that we may
assert at any time or at various times. If any waiver or amendment constitutes a
material change to the exchange offer, we will promptly disclose the waiver or
amendment by means of a prospectus supplement that will be distributed to the
registered holders of the old bonds. In this case, we will extend the exchange
offer to the extent required by the Exchange Act to provide holders of old bonds
the opportunity to effectively consider the additional information and to factor
this information into their investment decision.
In addition, we will not accept for exchange any old bonds tendered, and
will not issue new bonds in exchange for any old bonds, if at the time any stop
order has been threatened or is in effect with respect to the registration
statement of which this prospectus constitutes a part or the qualification of
the indenture relating to the bonds under the Trust Indenture Act of 1939.
Procedures for Tendering
How to Tender Generally
Only a holder of old bonds may tender the old bonds in the exchange offer.
To tender in the exchange offer, a holder must:
o complete, sign and date the letter of transmittal, or a facsimile of
the letter of transmittal;
o have the signature on the letter of transmittal guaranteed if the
letter of transmittal so requires; and
o mail or deliver the letter of transmittal or facsimile to the exchange
agent prior to the expiration date; or
o comply with the automated tender offer program procedures of DTC,
described below.
In addition, either:
o the exchange agent must receive, prior to the expiration date, a timely
confirmation of book-entry transfer of the old bonds into the exchange
agent's account at DTC according to the procedure for book-entry
transfer described below or a properly transmitted agent's message; or
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o the holder must comply with the guaranteed delivery procedures
described below.
To be tendered effectively, the exchange agent must receive any physical
delivery of the letter of transmittal and other required documents at its
address provided above under "SUMMARY OF THE EXCHANGE OFFER--The Exchange Agent"
prior to the expiration date.
The tender by a holder that is not withdrawn prior to the expiration date
will constitute an agreement between the holder and us in accordance with the
terms and subject to the conditions described in this prospectus and in the
letter of transmittal.
The method of delivery of the letter of transmittal and all other required
documents to the exchange agent is at your election and risk. Rather than mail
these items, we recommend that you use an overnight or hand delivery service. In
all cases, you should allow sufficient time to assure delivery to the exchange
agent before the expiration date. You should not send the letter of transmittal
to us. You may request your brokers, dealers, commercial banks, trust companies
or other nominees to effect the above transactions for you.
How to Tender if You Are a Beneficial Owner
If you beneficially own old bonds that are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and you wish to
tender those bonds, you should contact the registered holder promptly and
instruct it to tender on your behalf.
Signatures and Signature Guarantees
You must have signatures on a letter of transmittal or a notice of
withdrawal, as described below, guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States, or an "eligible guarantor institution"
within the meaning of Rule 17Ad-15 under the Exchange Act, that is a member of
one of the recognized signature guarantee programs identified in the letter of
transmittal, unless the old bonds are tendered:
o by a registered holder who has not completed the box entitled "SPECIAL
ISSUANCE INSTRUCTIONS" or "SPECIAL DELIVERY INSTRUCTIONS" on the letter
of transmittal; or
o for the account of a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondence in
the United States, or an eligible guarantor institution.
If the letter of transmittal or any bonds or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, those
persons should so indicate when signing. Unless waived by us, they should also
submit evidence satisfactory to us of their authority to deliver the letter of
transmittal.
Tendering Through DTC's Automated Tender Offer Program
The exchange agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may use DTC's automated tender offer
program to tender. Participants in the program may, instead of physically
completing and signing the letter of transmittal and delivering it to the
exchange agent, transmit their acceptance of the exchange offer electronically.
They may do so by causing DTC to transfer the old bonds to the exchange agent in
accordance with its procedures for transfer. DTC will then send an agent's
message to the exchange agent.
The term "agent's message" means a message transmitted by DTC, received by
the exchange agent and forming part of the book-entry confirmation, to the
effect that:
o DTC has received an express acknowledgment from a participant in its
automated tender offer program that is tendering old bonds that are the
subject of the book-entry confirmation;
o the participant has received and agrees to be bound by the terms of the
letter of transmittal or, in the case of an agent's message relating to
guaranteed delivery, that the participant has received and agrees to be
bound by the applicable notice of guaranteed delivery; and
o the agreement may be enforced against the participant.
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Determinations Under the Exchange Offer
We will determine in our sole discretion all questions as to the validity,
form, eligibility, time of receipt, acceptance of tendered old bonds and
withdrawal of tendered old bonds. Our determination will be final and binding on
all parties. We reserve the absolute right to reject any old bonds not properly
tendered or any old bonds our acceptance of which would, in the opinion of our
counsel, be unlawful. We also reserve the right to waive any defect,
irregularities or conditions of tender as to particular old bonds. Our
interpretation of the terms and conditions of the exchange offer, including the
instructions in the letter of transmittal, will be final and binding on all
parties. Unless waived, all defects or irregularities in connection with tenders
of old bonds must be cured within the time as we will determine. Although we
intend to notify holders of defects or irregularities with respect to tenders of
old bonds, neither we, the exchange agent nor any other person will incur any
liability for failure to give the notification. Tenders of old bonds will not be
deemed made until the defects or irregularities have been cured or waived. Any
old bonds received by the exchange agent that are not properly tendered and as
to which the defects or irregularities have not been cured or waived will be
returned to the tendering holder, unless otherwise provided in the letter of
transmittal, as soon as practicable following the expiration date.
When We Will Issue New Bonds
In all cases, we will issue new bonds for old bonds that we have accepted
for exchange under the exchange offer only after the exchange agent timely
receives:
o old bonds or a timely book-entry confirmation of the old bonds into the
exchange agent's account at DTC; and
o a properly completed and duly executed letter of transmittal and all
other required documents or a properly transmitted agent's message.
Return of Old Bonds Not Accepted or Excepted
If we do not accept any tendered old bonds for exchange for any reason
described in the terms and conditions of the exchange offer or if old bonds are
submitted for a greater principal amount than the holder desires to exchange,
the unaccepted or non-exchanged old bonds will be returned without expense to
their tendering holder. In the case of old bonds tendered by book-entry transfer
into the exchange agent's account at DTC according to the procedures described
below, the non-exchanged old bonds will be credited to an account maintained
with DTC. These actions will occur as promptly as practicable after the
expiration or termination of the exchange offer.
Your Representation to Us
By signing or agreeing to be bound by the letter of transmittal, you will
represent to us that, among other things:
o any new bonds that you receive are being acquired in the ordinary
course of your business;
o you have no arrangement or understanding with any person or entity to
participate in any distribution of the new bonds;
o you are not engaged in and do not intend to engage in any distribution
of the new bonds;
o if you are a broker-dealer that will receive new bonds for your own
account in exchange for old bonds, you acquired those bonds as a result
of market-making activities or other trading activities and you will
deliver a prospectus, as required by law, in connection with any resale
of the new bonds; and
o you are not our "affiliate," as defined in Rule 405 of the Securities
Act.
Book-Entry Transfer
The exchange agent will establish an account with respect to the old bonds
at DTC for purposes of the exchange offer promptly after the date of this
prospectus. Any financial institution participating in DTC's system may make
book-entry delivery of old bonds by causing DTC to transfer the old bonds into
the exchange agent's account at DTC in accordance with DTC's procedures for
transfer.
Guaranteed Delivery Procedures
If you wish to tender your old bonds but you cannot deliver the letter of
transmittal or any other required documents to the exchange agent or comply with
the applicable procedures under DTC's automated tender offer program prior to
the expiration date, you may still tender if:
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o the tender is made through a member firm of a registered national
securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States, or an eligible guarantor
institution;
o prior to the expiration date, the exchange agent receives from the
member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., commercial bank or
trust company having an office or correspondent in the United States,
or eligible guarantor institution either a properly completed and duly
executed notice of guaranteed delivery by facsimile transmission, mail
or hand delivery or a properly transmitted agent's message and notice
of guaranteed delivery:
o setting forth your name and address, the registered number(s) of
your old bonds and the principal amount of old bonds tendered;
o stating that the tender is being made thereby; and
o guaranteeing that, within three New York Stock Exchange trading days
after the expiration date, the letter of transmittal or facsimile
thereof, together with the old bonds or a book-entry confirmation,
and any other documents required by the letter of transmittal will
be deposited by the eligible guarantor institution with the exchange
agent;
and
o the exchange agent receives the properly completed and executed letter
of transmittal or facsimile thereof, as well as a book-entry
confirmation, and all other documents required by the letter of
transmittal, within three New York Stock Exchange trading days after
the expiration date.
Upon request to the exchange agent, a notice of guaranteed delivery will
be sent you if you wish to tender your old bonds according to the guaranteed
delivery procedures described above.
Withdrawal of Tenders
Except as otherwise provided in this prospectus, you may withdraw your
tender at any time prior to the expiration date.
For a withdrawal to be effective:
o the exchange agent must receive a written notice of withdrawal at one
of the addressees listed under "SUMMARY OF THE EXCHANGE OFFER--The
Exchange Agent," or
o you must comply with the appropriate procedures of DTC's automated
tender offer program system.
Any notice of withdrawal must:
o specify the name of the person who tendered the old bonds to be
withdrawn; and
o identify the old bonds to be withdrawn, including the principal amount
of the old bonds.
If old bonds have been tendered under the procedure for book-entry
transfer described above, any notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawn old bonds and
otherwise comply with the procedures of DTC.
We will determine all questions as to the validity, form, eligibility and
time of receipt of notice of withdrawal, and our determination will be final and
binding on all parties. We will deem any old bonds so withdrawn not to have been
validly tendered for exchange for purposes of the exchange offer.
Any old bonds that have been tendered for exchange but that are not
exchanged for any reason will be credited to an account maintained with DTC for
the old bonds. This crediting will take place as soon as practicable after
withdrawal, rejection of tender or termination of the exchange offer. You may
retender properly withdrawn old bonds by following one of the procedures
described under "--Procedures for Tendering" above at any time on or prior to
the expiration date.
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Exchange Agent
The Bank of New York has been appointed exchange agent of the exchange
offer. Questions and requests for assistance and requests for additional copies
of this prospectus or of the letter of transmittal should be directed to the
exchange agent addressed as follows:
By Registered Mail or Certified Mail By Overnight Courier
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street, 7E
New York, NY 10286 New York, NY 10286
Attention: Terence Rawlins Attention: Terence Rawlins
By Telephone By Facsimile
(212) 815-5988 (212) 815-6339
Fees and Expenses
We will bear the expenses of soliciting tenders. The principal
solicitation is being made by mail; however, we may make additional solicitation
by telegraph, telephone or in person by our officers and regular employees and
those of our affiliates.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to broker-dealers or other soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and reimburse it for its related
reasonable out-of-pocket expenses.
We will pay the cash expenses to be incurred in connection with the
exchange offer. They include:
o SEC registration fees;
o fees and expenses of the exchange agent and trustee;
o accounting and legal fees and printing costs; and
o related fees and expenses.
Transfer Taxes
We will pay all transfer taxes, if any, applicable to the exchange of old
bonds under the exchange offer. The tendering holder, however, will be required
to pay any transfer taxes, whether imposed on the registered holder or any other
person, if:
o certificates representing old bonds for principal amounts not tendered
or accepted for exchange are to be delivered to, or are to be issued in
the name of, any person other than the registered holder of old bonds
tendered;
o tendered old bonds are registered in the name of any person other than
the person signing the letter of transmittal; or
o a transfer tax is imposed for any reason other than the exchange of old
bonds under the exchange offer.
If satisfactory evidence of payment of any transfer taxes payable by a bond
holder is not submitted with the letter of transmittal, the amount of the
transfer taxes will be billed directly to that tendering holder.
Consequences of Failure to Exchange
If you do not exchange your old bonds for new bonds under the exchange
offer, you will remain subject to the existing restrictions on transfer of the
old bonds, and the market for secondary resales is likely to be minimal. In
general, you may not offer or sell the old bonds unless they are registered
under the Securities Act, or if the offer or sale is exempt from registration
under the Securities Act and applicable state securities laws. Except as
required by the registration rights agreement, we do not intend to register the
old bonds under the Securities Act. Unless they are broker-dealers selling under
certain circumstances, holders of old bonds will no longer have any rights under
the registration rights agreement. Broker-dealers that are not eligible to
participate in the exchange offer may have additional rights under the
registration rights agreement to facilitate the sale of their old bonds.
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Accounting Treatment
We will record the new bonds in our accounting records at the same
carrying value as the old bonds, which is the aggregate principal amount of the
old bonds, as reflected in our accounting records on the date of exchange.
Accordingly, we will not recognize any gain or loss for accounting purposes in
connection with the exchange offer. Participation in the exchange offer is
voluntary, and you should carefully consider whether to accept. You are urged to
consult your financial and tax advisors in making your own decision on what
action to take.
Further Bond Acquisition
We may in the future seek to acquire untendered old bonds in open market
or privately negotiated transactions, through subsequent exchange offers or
otherwise. We have no present plans to acquire any old bonds that are not
tendered in the exchange offer or to file a registration statement to permit
resales of any untendered old bonds.
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SELECTED FINANCIAL DATA
Our selected financial data is presented below and consists of our summary
balance sheet information as of December 31, 1999, which should be read in
conjunction with "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS" and with our financial statements appearing elsewhere
in this prospectus. We began construction of our facility in June 1999 and,
since we are in the development stage, we currently have no operating revenues.
All construction costs and all project development costs have been capitalized
and will continue to be capitalized until the commencement of commercial
operation of our facility. Accordingly, only balance sheet data is presented and
no ratio of earnings to fixed charges has been computed since it would not be
meaningful. The balance sheet information as of December 31, 1999 and the
statement of operations for the period ended December 31, 1999 have been derived
from our financial statements which have been audited by Deloitte & Touche LLP,
independent public accountants, whose report appears elsewhere in this
prospectus.
AES Ironwood, L.L.C.
(Development Stage Enterprise)
As of and for the period ended December 31, 1999
(thousands)
Assets
Current Assets $23,638
Investments Held by Trustee (1) 68,145
Land 528
Construction in Progress 244,563
Deferred Financing Costs 2,447
Certificate of Deposit 385
Other Assets 317
------
Total Assets $340,023
=======
Liabilities & Member's Deficit
Current Liabilities $23,928
Bond Financing 308,500
Other Long-Term Liabilities 10,236
Member's Deficit (2,641)
Total Liabilities & Member's Deficit $340,023
=======
Operating Expenses:
General and Administrative Expenses $ 169
---
Net Operating loss $ 169
---
Interest Income 3,283
Interest Expense (5,755)
NET LOSS $(2,641)
======
Cash Paid for Construction
in Progress Since Inception $212,526
=======
- ------------------------
(1) This amount consists of funds held pending expenditure by us for
construction of our facility, interest payments to bondholders during the
construction period, and investment earnings thereon.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
General
We were formed on October 30, 1998 to develop, construct, own, operate and
maintain our facility. We were dormant until June 25, 1999, the date of the sale
of the old bonds. We are in the development stage and have no operating
revenues. We obtained $308,500,000 of project funding from the sale of the old
bonds. The total cost of the construction of our facility is estimated to be
approximately $359 million, which will be financed by the proceeds from the sale
of the old bonds and the equity contribution described below.
Our facility is still under construction and we expect it to be completed
and operational by approximately June 30, 2001.
Equity Contributions
Under the equity subscription agreement, AES Ironwood, Inc. is obligated
to contribute up to approximately $50.1 million to us to fund project costs. AES
Ironwood, Inc.'s obligation to make the contributions is, and will be, supported
by an acceptable letter of credit or an acceptable bond.
Results of Operations
For the period from June 25, 1999 (inception) through December 31, 1999,
costs in the amount of $244,563,000 pertaining to the cost of the construction
of our facility have been capitalized as Construction Work in Progress and are
included as assets on the balance sheet. Interest capitalized during this period
was approximately $8.4 million. The cost of purchasing land for construction of
our facility has been separately identified on the balance sheet.
From June 25, 1999 through December 31, 1999, general and administrative
costs of $169,000 were incurred. These costs did not directly relate to
construction and are included as expenses in the Statement of Operations.
A portion of the proceeds from the sale of the old bonds have not yet been
expended on construction and were invested by the trustee. The interest income
earned on these invested funds is included in the Statement of Operations.
The interest expense incurred on the portion of the old bond proceeds
expended during the construction period is capitalized to Construction in
Progress and is included on the balance sheet. Interest expense incurred on the
old bond proceeds not spent on construction of our facility are included as
interest expense in the Statement of Operations.
For the period from June 25, 1999 through December 31, 1999,
non-capitalizable costs plus interest expense and less interest income resulted
in a net loss on the December 31, 1999 Statement of Operations of approximately
$2.6 million. The results of operations may not be comparable with the results
of operations during future periods, especially when our facility begins
commercial operations in 2001.
Liquidity and Capital Resources
We believe that the net proceeds from the sale of the old bonds, together
with the equity contribution, will be sufficient to (1) fund the engineering,
procurement, construction, testing and commissioning of our facility until it is
placed in commercial operation, (2) pay certain fees and expenses in connection
with the financing and development of our project and (3) pay project costs,
including interest on the bonds. After our facility is placed in commercial
operation, we will depend on our revenues under the power purchase agreement,
and after the power purchase agreement expires, we will depend on market sales
of electricity.
In order to provide liquidity in the event of cash flow shortfalls, the
debt service reserve account will contain an amount equal to the debt service
reserve account required balance through cash funding, issuance of the debt
service reserve letter of credit or a combination of the two.
As of December 31, 1999, apart from commitments totalling $238,000,000
arising from the construction of our facility, we have committed to two
additional capital expenditures totaling $5.7 million. One is for a pipeline for
$2.5 million and the other is for a pumping station for $3.2 million. We expect
to pay these amounts in fiscal year 2000. These amounts are expected to be paid
out of the proceeds from the sale of the old bonds and the equity contribution.
Business Strategy and Outlook
Our overall business strategy is to market and sell all of its net
capacity, fuel conversion and ancillary services to Williams Energy during the
term of the power purchase agreement. After expiration of the power purchase
agreement,
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we anticipate selling our facility's capacity, ancillary services and energy
under a power purchase agreement or into the PJM power pool market. We intend to
cause our facility to be managed, operated and maintained in compliance with the
project contracts and all applicable legal requirements.
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OUR BUSINESS
General
We are a Delaware limited liability company formed to develop, construct,
own, operate and maintain our project and manage the production of electric
generating capacity, ancillary services and energy at our facility. After the
commercial operation date, our sole business will be the ownership and operation
of our project. We own the land on which our facility will be located. Our
facility will be designed, engineered, procured and constructed for us by
Siemens Westinghouse Power Corporation on a fixed-price, turnkey basis under the
construction agreement. Siemens Westinghouse will provide combustion turbine
maintenance services and spare parts with respect to our facility for an initial
term of between eight and 10 years, depending on the timing of scheduled
outages, under the maintenance services agreement. AES Prescott, a wholly-owned
subsidiary of The AES Corporation, will provide development, construction
management and operations and maintenance services for the project under the
operations agreement.
We have entered into a power purchase agreement for a term of 20 years
under which Williams Energy has committed to purchase all of the net capacity,
fuel conversion and ancillary services of our facility. Net capacity is the
maximum amount of electricity generated by our facility net of electricity used
at our facility. Fuel conversion services consist of the combustion of natural
gas and fuel oil in order to generate electric energy. Ancillary services
consist of services necessary to support the transmission of capacity and
energy. Williams Energy is obligated to supply us with all natural gas and/or
fuel oil necessary to provide net capacity, fuel conversion services and
ancillary services under the power purchase agreement. We anticipate that during
the term of the power purchase agreement substantially all of our revenues will
be derived from payments made under the power purchase agreement.
Our Property
Since we are a development stage company, our principal property is the
land for the facility site, which we own. The facility site is located in South
Lebanon Township, Lebanon County, Pennsylvania on an approximately 35-acre
parcel of land. We have access, utility, drainage and construction easements
across neighboring property. We are able to use these easements as long as there
is no default under the agreements with the owner of the adjacent property and
we are using the facility site for a power plant. We intend to construct a
railspur to facilitate the transportation of heavy equipment to the facility
site, but will not maintain rights in the railspur after construction has been
completed. We have title insurance in connection with our property rights.
Under the indenture and the other related financing documents, our rights
and interests in our property rights are encumbered by mortgages, security
agreements, collateral assignments and pledges for the benefit of the
bondholders and other senior creditors.
For a description of our facility, see "PROSPECTUS SUMMARY--Our Facility."
Competition
Under the power purchase agreement, Williams Energy will be required to
purchase all of our facility's capacity and energy. Therefore, during the term
of the power purchase agreement, competition from other capacity and energy
providers will only become an issue if Williams Energy breaches its agreement
and ceases to purchase our capacity and energy or the power purchase agreement
is otherwise terminated or not performed in accordance with its terms. Following
the term of the power purchase agreement, we anticipate selling our facility's
net capacity, ancillary services and energy under a power purchase agreement or
into the PJM power pool market. At that time, we will face competition from
other generating facilities selling into the PJM power pool market including,
possibly, other facilities owned by The AES Corporation or its affiliates.
Employees
Other than the officers listed under "OUR MANAGEMENT--Management", we have
no employees and do not anticipate having any employees in the future. Under the
operations agreement, AES Prescott will manage the development and construction
of and will operate and maintain our facility. The direct labor personnel and
the plant operations management will be employees of The AES Corporation
provided to AES Prescott under the services agreement.
Insurance
As owner of our facility, we will maintain a comprehensive insurance
program as required under the indenture and underwritten by recognized insurance
companies. Among other insurance policies, we will maintain commercial
38
<PAGE>
general liability insurance, permanent property insurance for full replacement
value of our facility and business interruption insurance covering at least 12
months of debt service and fixed operation and maintenance expenses. We have
obtained title insurance in an amount equal to the principal amount of the
bonds.
AES Prescott, as operator of our facility, will maintain, among other
insurance policies, workers' compensation insurance, or evidence of
self-insurance, if required, and comprehensive automobile bodily injury and
property damage liability insurance.
Legal Proceedings
We are not party to any legal proceedings.
Permits and Regulatory Approvals
AES Prescott, as operator of our facility, and AES Ironwood, L.L.C., as
owner of our facility, must comply with numerous federal, state and local
regulatory requirements including environmental requirements in the operation of
our facility. The material regulatory permits and authorizations that we must
obtain for construction and operation are described in the independent
engineer's report, which is attached as Annex B to this prospectus.
On March 31, 1999, we received a certification from FERC that we are an
Exempt Wholesale Generator. Certification as an exempt Wholesale Generator
exempts us from regulation under the Public Utility Holding Company Act of 1935.
We will maintain this status so long as we continue to make only wholesale sales
of electricity, which we intend to do. Prior to commercial operation, we will be
required to file the power purchase agreement with FERC and obtain approval for
the rates contained therein. We anticipate filing with FERC and obtaining the
approval prior to the end of 2000. We may also need to obtain FERC approval for
sales of electricity at market-based rates after the power purchase agreement is
no longer in effect.
On March 29, 1999, we received our Prevention of Significant Deterioration
Permit, or "air permit", from the Pennsylvania Department of Environmental
Protection. The appeal period in respect of the air permit expired on May 3,
1999 and no appeal was filed. The air permit requires that our facility be
constructed in a manner that will allow it to meet specified limitations on
emissions of air pollutants. Under the construction agreement, Siemens
Westinghouse is required to construct our facility to meet these requirements.
We are subject to a number of statutory and regulatory standards and
required approvals relating to energy, labor and environmental laws. Although
the necessary environmental permits for the commencement of construction of our
facility have been obtained, we are required to comply with the terms of our
environmental permits and to obtain other permits for the construction and
operation of our facility. Several of the permits have not yet been obtained,
and some cannot be obtained until operation of our facility has commenced. Under
specific circumstances, delay in receipt of or failure to obtain the permits
could delay completion of the construction of our facility or prevent the
operation of our facility.
Some permits that we have obtained in connection with our facility will
require amendment prior to commercial operation of our facility and others will
require renewal or reissuance during the life of our facility. While we have no
reason to believe that the permits cannot be amended or will not be renewed or
reissued, our inability to amend, renew or obtain reissuance of these permits in
the future could cause the suspension of construction or operation of our
facility.
The permits that have been obtained and that will be obtained contain
ongoing requirements. Failure to satisfy and maintain any the permit conditions
or other applicable requirements could delay or prevent completion of the
construction of our facility, prevent the operation of our facility and/or
result in additional costs. See "ANNEX B: INDEPENDENT ENGINEER'S
REPORT--Environmental and Permitting."
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OUR MANAGEMENT
Management
We are a Delaware limited liability company and have no employees other
than our officers. Our officers receive no compensation for their services to us
or for any transaction between us and any of our affiliates. We are managed by
our Board of Directors under the terms of our Limited Liability Company
Agreement, dated as of November 1, 1998. The following table sets forth the
names, ages and positions of our directors and executive officers and their
positions with us. Our directors are elected annually and each elected director
holds office until the director's successor is elected and qualified or the
director resigns or is removed. Our officers are elected from time to time by
vote of the Board of Directors.
Name Age Position(s)
- ---- --- -----------
John Ruggirello...............49 President
Barry Sharp...................40 Director, Vice President and
Chief Financial Officer
William Luraschi..............36 Vice President and Secretary
Patricia Rollin...............38 Vice President
Stephen Dahm..................54 Vice President
Kevin Polchow.................38 Vice President
Bart Rossi....................51 Vice President
William Hoagland..............39 Treasurer
Maureen Shearer...............36 Assistant Secretary
Dennis Bakke..................54 Director
Roger Naill...................52 Director
John Ruggirello, 49, has served as President of AES Ironwood, L.L.C.
since November 1998. He is Senior Vice President of The AES Corporation.
Mr. Ruggirello also serves as the President of AES Enterprise, a business
development and plant operations division serving the Mid-Atlantic United
States since 1994. Prior to his current position, Mr. Ruggirello was plant
manager of AES Beaver Valley. Mr. Ruggirello spends approximately 20% of
his time in his capacity as Senior Vice President of The AES Corporation.
Barry Sharp, 40, has served as Director, Vice President and Chief
Financial Officer of AES Ironwood, L.L.C. since November 1998. He is currently
Senior Vice President and Chief Financial Officer of The AES Corporation. He
joined The AES Corporation as Director of Finance and Administration in 1986.
Prior to The AES Corporation, he held various positions with Arthur Anderson &
Company and Marriott. Mr. Sharp spends approximately 95% of his time in his
capacity as Senior Vice President and Chief Financial Officer of The AES
Corporation.
William Luraschi, 36, has served as Vice President of AES Ironwood, L.L.C.
since November 1998. He is currently Vice President, Secretary and General
Counsel of The AES Corporation. He joined The AES Corporation as General Counsel
in 1995. Prior to joining The AES Corporation, he was an attorney at the law
offices of Chadbourne and Parke. Mr. Luraschi spends approximately 95%of his
time in his capacity as Vice President, Secretary and General Counsel of The AES
Corporation.
Patricia Rollin, 38, has served as Vice President of AES Ironwood, L.L.C.
since November 1998. She is also a Vice President of AES Enterprise. She served
as Director of Investor Relations of The AES Corporation from 1994 through 1995.
She joined The AES Corporation Corporate Strategic Planning in 1984.
Stephen Dahm, 54, has served as Vice President of AES Ironwood,
L.L.C. since November 1998. He is a Project Director of AES Ironwood,
L.L.C. Prior to joining AES Ironwood, L.L.C., he served as Vice President
and Project Director for AES Lal Pir and PakGen. Mr. Dahm joined The AES
Corporation in 1994 after 18 years with Bechtel.
Kevin Polchow, 38, has served as Vice President of AES Ironwood, L.L.C.
since November 1998. Mr. Polchow is currently the Tax Director of The AES
Corporation. He assumed that position in 1994. Prior to joining The AES
Corporation, Mr. Polchow served as a Senior Manager at Deloitte & Touche LLP.
Bart Rossi, 51, has served as Vice President of AES Ironwood, L.L.C.
since November 1998. Mr. Rossi is currently a Project Engineering Director at
The AES Corporation. He assumed that position in 1996. Prior to joining The
AES Corporation, Mr. Rossi served as a Chief Engineer for Ebasco Services,
Inc.
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William Hoagland, 39, has served as Vice President of AES Ironwood,
L.L.C. since November 1998. Mr. Hoagland is currently Director of Finance
and Administration of The AES Corporation and has held that position since
1994. Prior to joining The AES Corporation, Mr. Hoagland was an auditor at
Deloitte & Touche LLP.
Maureen B. Shearer, 36, has served as Secretary of AES Ironwood, L.L.C.
since November 1998. She is currently Corporate Paralegal of The AES
Corporation and has held that position since 1995. She joined The AES
Corporation as an Executive Assistant in 1989. Prior to joining The AES
Corporation, Ms. Shearer served active duty with the U.S. Coast Guard.
Dennis Bakke, 54, has served as Director of AES Ironwood, L.L.C. since
November 1998. He is currently the President and CEO of The AES Corporation. He
assumed this position in 1994. He became the President and Chief Operating
Officer of The AES Corporation in 1987 and served as Executive Vice President
from 1981 to 1987. Mr. Bakke spends approximately 95% of his time in his
capacity as President and CEO of The AES Corporation.
Roger F. Naill, 52, has served as Director of AES Ironwood, L.L.C.
since November 1998. He is Senior Vice President of The AES Corporation and
heads The AES Corporation Corporate Strategic Planning Group. He assumed
that position in 1981. Mr. Naill spends approximately 95% of his time in his
capacity as Senior Vice President of The AES Corporation.
Each of the officers and directors listed above is currently an officer,
director or employee of The AES Corporation or an affiliate of The AES
Corporation and receives compensation from The AES Corporation or the affiliate.
We are not a party to any agreement with The AES Corporation or its affiliates
governing the compensation paid to our officers, directors or employees. These
persons are paid by The AES Corporation or its affiliates, as applicable, in the
normal course of their employment with the relevant party. No cash or non-cash
compensation is currently proposed to be paid in the current calendar year by
AES Ironwood, L.L.C. to any of the officers and directors listed above.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain Affiliations
We, AES Ironwood, Inc. and AES Prescott are each wholly-owned indirect
subsidiaries of The AES Corporation. The AES Corporation has agreed to provide
AES Ironwood, Inc. sufficient funds for AES Ironwood, Inc. to contribute up to
$50,149,285 to us to fund project costs under an equity subscription agreement.
Other than the equity subscription agreement, the only other business we intend
to transact with any of our affiliates is an operations agreement with AES
Prescott.
Other Relationships and Related Transactions
The AES Corporation. The AES Corporation is a leading global power company
committed to supplying electricity in a socially responsible way. The AES
Corporation currently has assets in excess of $10 billion and employs
approximately 44,500 people around the world. Under a services agreement, The
AES Corporation will supply to AES Prescott all of the personnel and services
necessary for AES Prescott to comply with its obligations under the operations
agreement.
AES Ironwood, Inc. AES Ironwood, Inc. is a Delaware corporation and a
wholly-owned subsidiary of The AES Corporation. AES Ironwood, Inc. currently
has no operations outside of its activities in connection with our project
and does not anticipate undertaking any operations not associated with our
project. AES Ironwood, Inc. owns all of the ownership interests in our
company and AES Prescott and, under the pledge agreement, AES Ironwood, Inc.
has pledged to the collateral agent all of its ownership interests in our
company.
AES Prescott, L.L.C.. AES Prescott is a Delaware limited liability company
and wholly-owned subsidiary of AES Ironwood, Inc. and was established on October
30, 1998. We have entered into the operations agreement with AES Prescott under
which AES Prescott will manage the development and construction of and will
operate and maintain our facility. Minimum amounts payable under the operations
agreement during the construction period are $125,000 per month. Once commercial
operation is achieved, payments for operation management services will be
approximately $400,000 per quarter. The direct labor personnel and the plant
operations management will be provided to AES Prescott by The AES Corporation
under the services agreement entered into by AES Prescott and The AES
Corporation.
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SUMMARY OF PRINCIPAL PROJECT CONTRACTS
The following chart sets forth the parties to our project contracts and
each contract is described in more detail below:
<TABLE>
<S> <C> <C>
- -----------------------|
Guaranty |
|
- -----------------------|------|
The Williams Companies,| |
Inc. | |
- -----------------------| |
| |
| |
- -----------------------| | |--------------------------
Power Purchase | | | Operations Agreement
Agreement | | |
- -----------------------|----| | |----|--------------------------
Williams Energy | | | | | AES Prescott, L.L.C.
Marketing & Trading | | | | |
Company | | | | |--------------------------
- -----------------------| | | |
|----------------------|
| AES Ironwood, |
- -----------------------| | L.L.C. | |--------------------------
Construction Contract |---|----------------------|--| Interconnection Agreement
| | | | |
- -----------------------| | | | |--------------------------
Siemens Westinghouse | | | | | Metropolitan Edison
Power Corporation | | | | | Company
- -----------------------| | | | |--------------------------
| | | |
| | | |
- -----------------------| | | | |--------------------------
Maintenance Services | | | | | Effluent Supply Agreement
Agreement | | | | |
- -----------------------|----| | |----|--------------------------
Siemens Westinghouse | | | | City of Lebanon Authority
Power Corporation | | | |
- -----------------------| | | |--------------------------
| | |
| | |
- -----------------------| | | |--------------------------
Guaranty | | | | Real Estate Agreements
| | | |
- -----------------------|------| |----|--------------------------
Siemens Corporation | | Pennsy Supply, Inc.
| |
- -----------------------| |--------------------------
</TABLE>
The following summaries contain the material terms of the principal
project contracts. All capitalized terms used in the following summaries and not
otherwise defined in this prospectus have the meanings given to them in Annex A
to this prospectus.
Power Purchase Agreement
We have entered into an Amended and Restated Power Purchase Agreement,
dated as of February 5, 1999, with Williams Energy for the sale to Williams
Energy of all of the electric energy and capacity produced by our facility as
well as ancillary services and fuel conversion services.
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Term
The term of the power purchase agreement extends for 20 years after the
first contract anniversary date, which is the last day in the month in which the
commercial operation date occurs. The commercial operation date occurs when
o the Initial Start-Up Testing of our facility has been
successfully completed,
o we have received all approvals from PJM Interconnection,
L.L.C., which is the independent system operator that operates
the Transmission System to which our facility will
interconnect, and
o we have obtained all required permits and authorizations for
operation of our facility.
If the commercial operation date has not occurred by June 30, 2001 for
any reason, including the continued existence of or delay caused by a force
majeure event affecting us, other than any delay caused by any act or failure to
act by Williams Energy or any of its affiliates where the action is required
under the power purchase agreement, Williams Energy will have the right to
terminate the power purchase agreement. We, however, can extend the commercial
operation date to December 31, 2001 (1) if we provide an opinion from a
third-party engineer that the commercial operation date will occur no later than
December 31, 2001 (the "Free Extension Option"), or (2) by giving Williams
Energy written notice of such extension no later than April 30, 2001, and paying
to Williams Energy a specified amount (for which we believe we have made
adequate provisions in the project budget) by no later than June 30, 2001 (the
"First Paid Extension Option").
If we qualify for the Free Extension Option or elect the First Paid
Extension Option, if the commercial operation date has not occurred by the Final
CO Date for any reason, other than as a result of a delay in exercising an
interconnection agreement or any act or failure to act by Williams Energy or any
of its affiliates, where the action is required under the power purchase
agreement, Williams Energy will have the right to terminate the power purchase
agreement. We, however, can extend the Final CO Date to and including December
31, 2002 by giving Williams Energy written notice of the estimated extension
required no later than October 31, 2001 and paying to Williams Energy certain
specified amounts for each day of such extension (the "Second Paid Extension
Option").
If we elect the Second Paid Extension Option and the commercial
operation date does not occur by December 31, 2002 for any reason whatsoever,
including the continued existence of or delay caused by a force majeure event
affecting us, other than as a result of a delay in exercising an interconnection
agreement or any act or failure to act by Williams Energy or any of its
affiliates where the action is required under the power purchase agreement,
Williams Energy will have the absolute right to terminate the power purchase
agreement.
Purchase and Sale of Capacity and Services
During the term, commencing with the commercial operation date, we must
sell and make available to Williams Energy on an exclusive basis, and Williams
Energy must purchase and pay for, our facility's net capacity and ability to
generate electric energy.
In addition, during the term, commencing with the commercial operation
date, we must perform for Williams Energy on an exclusive basis, and Williams
Energy must purchase and pay for, fuel conversion services, which consist of the
generation of electric energy from fuel provided by Williams Energy.
Fuel Conversion and Other Services
As instructed by us, Williams Energy must deliver or cause to be
delivered to us at the Gas Delivery Point and Oil Delivery Point on an exclusive
basis all quantities of natural gas and fuel oil, respectively, as we required:
o to generate Net Electric Energy and/or ancillary services,
o to perform Start-Ups,
o to perform Shutdowns, and
o to operate our facility during any period other than a
Start-Up, Shutdown or Dispatch Period for any reason.
Williams Energy will be responsible for the construction of all Gas
Interconnection Facilities. If the Gas Interconnection Facilities have not been
constructed and/or Williams Energy is unable for any reason to deliver natural
gas to our facility by the date that our facility would otherwise be prepared to
begin Initial Start-Up Testing, and but for the failure to provide the natural
gas our facility is otherwise ready, or would otherwise have been ready, to
begin the
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testing, then Williams Energy must commence making payments to us for each day
of delay beginning on the Start-Up Testing Date and continuing until the date
that natural gas is delivered to our facility for Initial Start-Up Testing, in
an amount for each day of delay which is equal to one-thirtieth of the
applicable total fixed payment. Upon the expiration of the power purchase
agreement or any termination of the power purchase agreement as the result of
Williams Energy's default, we will have the right to purchase the Gas
Interconnection Facilities from Williams Energy, or if Williams Energy does not
own the Gas Interconnection Facilities, Williams Energy must assign to us all of
its rights to transportation services using the Gas Interconnection Facilities.
Williams Energy will be responsible for the cost of procurement and
installation of the Oil Metering Equipment. Williams Energy will be solely
responsible for all costs and expenses related to the supply and transportation
of natural gas and fuel oil to the Gas Delivery Point and Oil Delivery Point,
respectively. We will be responsible for all costs and expenses related to the
transportation of natural gas and fuel oil at and from the Gas Delivery Point
and Oil Delivery Point to our facility. At our request, instead of delivering
fuel oil to the applicable Oil Delivery Point, Williams Energy must deliver or
cause to be delivered the quantities of fuel oil as requested to any off-site
storage facility approved by Williams Energy and delivery to that site will be
deemed delivery to the Oil Delivery Point. We will be responsible for all costs
and expenses related to the transportation of the fuel oil from the off-site
storage facility to our facility.
We will be responsible for the installation, operation and maintenance
at the facility site, at our sole cost and expense, of fuel oil storage tank(s)
capable of storing a volume of usable fuel oil sufficient to operate our
facility at maximum facility capacity output for two continuous days. We will
not be obligated to operate our facility on fuel oil for more than an operating
hour equivalent that is consistent with our air permit.
Pricing and Payments
For each month of the term after the commercial operation date,
Williams Energy must pay us for our facility's net capacity, successful
Start-Ups and associated Shutdowns, other services and fuel conversion services
at the applicable rates described in the power purchase agreement. Each monthly
payment by Williams Energy will consist of a total fixed payment, a fuel
conversion payment and a start-up payment. The total fixed payment, which is
payable regardless of facility dispatch by Williams Energy but is subject to
adjustment based on facility availability, is calculated by multiplying a fixed
capacity rate for each contract year by our facility's net capacity in the
billing month and is anticipated to be sufficient to cover our debt service and
fixed operating and maintenance costs and to provide us a return on equity. The
fuel conversion payment is intended to cover our variable operating and
maintenance costs and escalates annually based on an escalation index described
in the power purchase agreement. In addition, we may receive heat rate bonuses
or be required to pay heat rate penalties.
Prior to the commercial operation date, and during specific facility
tests thereafter, we will purchase natural gas from Williams Energy. Williams
Energy will sell to us the natural gas at prices specified in the power purchase
agreement, and we will sell to Williams Energy at the Electric Delivery Point
any Net Electric Energy produced during those periods at 90% of the Energy
Market Clearing Price.
Williams Energy will be entitled to an annual fuel conversion volume
rebate if its dispatch of our facility exceeds specified levels and specified
monthly non-dispatch payments if, under specific circumstances, our facility is
not available for dispatch. All fuel conversion volume rebate payments and
non-dispatch payments must be made to Williams Energy after debt service and
specified other payments but prior to any distribution to holders of the equity
interests in our company. Fuel conversion volume rebate payments must be paid to
Williams Energy within 30 days after the end of the contract year in which the
payments have been earned and non-dispatch payments must be paid to Williams
Energy within 20 days after the end of the month on which a payment obligation
arises. Fuel conversion volume rebate payments and any non-dispatch payments
owed to Williams Energy and not paid when due must be paid, together with
interest, when funds become available to us at the priority level described
above.
Project Development
Our facility will be located at the facility site. If we are unable to
obtain all required permits and approvals for the site within one year after the
execution date of the power purchase agreement, however, the parties must in
good faith seek to identify a mutually agreeable alternative site within the PJM
power pool market to be acquired by us as a location for our facility.
Furthermore, if the alternate site is not agreed to by the parties within an
additional one-year period, the power purchase agreement will terminate with no
further liability to either party.
We must provide to Williams Energy within 10 days after the completion
of Initial Start-Up Testing, pertinent written data substantiating our
facility's capability to provide net capacity.
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<PAGE>
We must, at our own cost and expense, obtain as and when required all
approvals, permits, licenses and other authorizations from governmental
authorities as may be required to construct, operate and maintain our facility,
the Interconnection Facilities and Protective Gas Apparatus and to perform our
obligations under the power purchase agreement, and during the term, we must
obtain all additional governmental approvals, permits, licenses and
authorizations as may be required with respect to our facility as soon as
practicable.
Initial Start-Up Testing; Commercial Operation
We must provide to Williams Energy (1) written notice, at least 30 days
in advance, of the expected commercial operation date and (2) a copy of the
notice of commercial operation within five days after the commercial operation
date. Williams Energy will have the right to be present at Initial Start-Up
Testing of our facility.
Interconnection and Metering Equipment
At our sole cost and expense, we will own and design, construct,
install and maintain, or be responsible for the design, construction,
installation and maintenance of our facility, the Interconnection Facilities and
Protective Gas Apparatus needed to generate and deliver Net Electric Energy
and/or ancillary services to the Electric Delivery Point in order to fulfill our
obligations under the power purchase agreement, including all Interconnection
Facilities and Protective Gas Apparatus that may be located at any switchyard
and/or substation to be built at our facility. Our facility, the Interconnection
Facilities and Protective Gas Apparatus must be designed, constructed and
completed in a good and workmanlike manner and in accordance with accepted
electrical practices, with respect to our facility and Interconnection
Facilities, or in accordance with standard gas industry practices, with respect
to Protective Gas Apparatus, so that the expected useful life of our facility,
the Interconnection Facilities and Protective Gas Apparatus will be not less
than the term of the power purchase agreement.
We will be solely responsible for the negotiation and execution of the
interconnection agreement with Metropolitan Edison under which Metropolitan
Edison will own and be responsible for the Electric Metering Equipment and the
design, installation, construction and maintenance of the electrical facilities
and protective apparatus, including any transmission equipment and related
facilities, necessary to interconnect Metropolitan Edison's electrical system
with our facility at the Electric Delivery Point. Williams Energy must reimburse
us for the reasonable Metropolitan Edison costs (i.e., transmission facility
upgrades, Metropolitan Edison protective apparatus and other equipment,
Metropolitan Edison electric meters, and Metropolitan Edison costs for PJM and
other required interconnection-related studies) incurred, or to be reimbursed,
by us under the interconnection agreement up to a maximum amount which is in
excess of the costs anticipated to be incurred by us under the interconnection
agreement.
Williams Energy will be responsible for the installation, maintenance
and testing of the Gas Metering Equipment, to the extent not otherwise
installed, maintained and tested by the supplier of gas transportation services,
and Oil Metering Equipment, as reasonably approved by us.
All Electric Metering Equipment, Gas Metering Equipment and Oil
Metering Equipment, whether owned by us or by a third party, must be operated,
maintained and tested in accordance with accepted electrical practices, in the
case of the Electric Metering Equipment, and in accordance with applicable
industry standards, in the case of the Gas Metering Equipment and Oil Metering
Equipment.
Operation; Dispatch
Our facility, the Interconnection Facilities and the Protective Gas
Apparatus must be operated in accordance with accepted electrical practices and
applicable requirements and guidelines reasonably adopted by Metropolitan Edison
from time to time and applied consistently to Metropolitan Edison's electric
generating facilities, with respect to our facility and Interconnection
Facilities, or in accordance with standard gas industry practices, with respect
to Protective Gas Apparatus. If a conflict between the terms and conditions of
the power purchase agreement and Metropolitan Edison requirements, Metropolitan
Edison requirements will control.
We must operate our facility in parallel with Metropolitan Edison's
electrical system with governor control and the Net Electric Energy to be
delivered by us under the power purchase agreement must be three-phase, 60
hertz, alternating current at a nominal voltage acceptable to Metropolitan
Edison at the Electric Delivery Point, must not adversely affect the voltage,
frequency, waveshape or Power Factor of power at the Electric Delivery Point and
must be delivered to the Electric Delivery Point in a manner acceptable to
Metropolitan Edison.
The power purchase agreement acknowledges that Metropolitan Edison has
the right to require us to disconnect our facility from Metropolitan Edison's
electrical system, or otherwise curtail, interrupt or reduce deliveries of Net
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<PAGE>
Electric Energy, for specific safety or emergency reasons. If our facility has
been disconnected for these reasons, Williams Energy will continue to be
obligated to make total fixed payments for at least 24 hours after the
occurrence of the disconnection of our facility by Metropolitan Edison.
We must use commercially reasonable efforts to promptly correct any
condition at our facility which necessitates the disconnection of our facility
from Metropolitan Edison's electrical system or the reduction, curtailment or
interruption of electrical output of our facility.
Williams Energy will have the exclusive right to schedule the operation
of our facility or a unit in accordance with the provisions of the power
purchase agreement so long as the scheduling is consistent with the design
limitations of our facility, applicable law, regulations and permits, and
manufacturers' reasonable recommendations for operating limits with respect to
our facility and major components.
During Initial Start-Up Testing and up to two times each year
thereafter, we must demonstrate, in accordance with the then-applicable criteria
of PJM, applicable generally to independent power and Metropolitan Edison
generating facilities in PJM of similar technology, the capability of our
facility to produce and maintain, as required for the demonstration, our
facility's net capacity.
Maintenance
At all times during the term of the power purchase agreement, we must,
at our sole cost and expense, maintain our facility, the Protective Gas
Apparatus, and, consistent with the terms of the interconnection agreement, the
Interconnection Facilities. Maintenance must be performed in accordance with
accepted electrical practices, with respect to our facility and Interconnection
Facilities, or in accordance with standard gas industry practices, with respect
to Protective Gas Apparatus, and manufacturers' recommended maintenance
procedures and in accordance with the maintenance provisions of the power
purchase agreement.
Metering, Billing, Payment and Taxes
Net Electric Energy delivered by us to Williams Energy must be metered
at the Electric Delivery Point, using Metropolitan Edison's Electric Metering
Equipment on an hour-by-hour basis, or any shorter intervals as may be necessary
to implement the power purchase agreement, are technically feasible using the
metering equipment, and are agreed to by Metropolitan Edison.
We must provide to Williams Energy a monthly statement using
Metropolitan Edison's meters, or back-up Electric Metering Equipment installed
by us if Metropolitan Edison's electric meters are not functional. The statement
must describe the amount of Net Electric Energy delivered by us to Williams
Energy in each hour and the computation of the amount due from Williams Energy
to us and any other amounts as may then be due and payable by Williams Energy to
us. Williams Energy must pay us the net amount shown to be due to us on the
monthly statement.
Except as otherwise specified in the power purchase agreement, each
party will have the right to set off against any and all amounts owed by it
under the power purchase agreement past due amounts owed to it under the power
purchase agreement by the other party.
The payments by Williams Energy to us do not include reimbursement for,
and Williams Energy is liable for and must pay, cause to be paid, or reimburse
us if we have paid, all taxes imposed on or with respect to natural gas or fuel
oil or the use or consumption or transportation, other than any of the taxes for
which we are liable as described in the following paragraph or on Net Electric
Energy or the use and consumption thereof after the Electric Delivery Point.
Williams Energy must indemnify, defend and hold us harmless from any liability
for these taxes.
Except as provided in the previous paragraph and except for specified
taxes that may be imposed in the future, the payments by Williams Energy to us
include full reimbursement for, and we will be liable for and must pay, or cause
to be paid, or reimburse Williams Energy if Williams Energy has paid, all taxes.
If Williams Energy is required to remit any tax for which we are responsible,
the amount must be deducted from any sums due to us. We must indemnify, defend
and hold harmless Williams Energy from any liability for these taxes.
Dispute Resolution
If the parties are in dispute with respect to specified matters
relating to the term, Gas Interconnection Facilities, maintenance and billing
and metering, and they do not resolve the dispute within seven days of notifying
the other party in writing of the existence of the dispute, a committee
consisting of two officers of each party must meet and attempt in good faith to
resolve the dispute. If the committee does not resolve the dispute within seven
days following their initial
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<PAGE>
meeting, then a single third-party engineer must be designated to consider and
decide the issues raised by the dispute unless both parties determine that
further discussions by the committee are merited. The selection of the
third-party engineer must be made from the list of engineers described in the
power purchase agreement.
Each party must designate in writing to the other party from time to
time a representative who must be authorized to resolve any dispute relating to
the subject matter of the power purchase agreement not referred to in the
preceding paragraph.
If any dispute is not resolved between the parties within 30 days from
the date on which a party provided to the other party a written notice of the
dispute, then the dispute must be settled exclusively and finally by arbitration
in accordance with the procedures described in the power purchase agreement,
except for disputes described in the second preceding paragraph.
The dispute resolution provisions of the power purchase agreement will
survive the termination or expiration of the power purchase agreement.
Insurance
We must keep our facility continuously insured against loss or damage
in the amounts and for the risks that property of similar character is usually
so insured by entities owning and operating like properties.
We and the operator of our facility must each procure or cause to be
procured and must maintain in effect continuously during the term of the power
purchase agreement minimum insurance coverage for our facility: workers'
compensation; employer's liability; commercial general liability; bodily injury;
property damage; blanket contractual; underground, explosion and collapse
hazard; products and completed operations hazard; broad form property damage;
personal injury; automobile liability, bodily injury and property damage; and
commercial umbrella liability.
We must procure and maintain in effect continuously during the term of
the power purchase agreement, "all risk" property insurance in sufficient
amounts to cover and otherwise insure for the full replacement cost of our
facility and business interruption insurance covering 100% of our continuing
fixed operating expenses and debt service for a period of at least 12 months
arising from any loss insured against by our "all risk" property insurance.
Force Majeure
A party will be excused from performing its obligations under the power
purchase agreement and will not be liable in damages or otherwise to the other
party if and to the extent the party declares that it is unable to perform or is
prevented from performing an obligation under the power purchase agreement by a
force majeure condition, except for any obligations and/or liabilities under the
power purchase agreement to pay money, which will not be excused, and except to
the extent an obligation accrues prior to the occurrence or existence of a force
majeure condition so long as:
o the party declaring its inability to perform by virtue of
force majeure, as promptly as practicable after the occurrence
of the force majeure condition, but in no event more than five
days later, gives the other party written notice describing,
in detail, the nature, extent and expected duration of the
force majeure condition;
o the suspension of performance is of no greater scope and of no
longer duration than is reasonably required by the force
majeure condition;
o the party declaring force majeure uses all commercially
reasonable efforts to remedy its inability to perform; and
o once the party declaring force majeure is able to resume
performance of its obligations excused as a result of the
force majeure condition, it promptly gives written notice to
the other party.
Irrespective of whether the force majeure condition is declared by
Williams Energy or us, the time period of a force majeure will be excluded from
the calculation of all payments under the power purchase agreement and Williams
Energy must be under no obligation to pay us any of the payments described in
the power purchase agreement. If Williams Energy declares a force majeure,
however, it must, subject to its right to terminate the power purchase agreement
if the force majeure has not been fully corrected or alleviated within 18 months
of the declaration, continue to pay us only the applicable monthly total fixed
payment as described in the power purchase agreement until the earlier of (1)
the termination of the force majeure condition or (2) the termination of the
power purchase agreement. Furthermore, if we declare a force majeure due to an
action or inaction of Metropolitan Edison that prevents us from delivering Net
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Electric Energy to the Electric Delivery Point, Williams Energy must continue to
pay the applicable portion of the total fixed payment for the first 24 hours of
the period.
Notwithstanding anything to the contrary contained in the power
purchase agreement, except as may expressly be provided in the power purchase
agreement, the term force majeure will not include the following nor will the
following excuse a party's performance:
o The failure to complete our facility by or to achieve the
commercial operation date as extended under the power purchase
agreement, which failure is caused by, arises out of or
results from the acts or omissions of us, and/or from the acts
or omissions of any third party, unless, and then only to the
extent that, any acts or omissions of the third party (1)
would itself be excused under the power purchase agreement by
virtue of a force majeure condition, or (2) is the result of a
failure of Williams Energy to provide fuel to our facility
under the power purchase agreement;
o Any reduction, curtailment or interruption of generation or
operation of our facility, or of the ability of Williams
Energy to accept or transmit Net Electric Energy, whether in
whole or in part, which reduction, curtailment or interruption
is caused by or arises from the acts or omissions of any third
party providing services or supplies to the party claiming
force majeure, including any vendor or supplier to either
party of materials, equipment, supplies or services, or any
inability of Metropolitan Edison to deliver Net Electric
Energy to Williams Energy, unless, and then only to the extent
that, any acts or omissions would itself be excused under the
power purchase agreement as a force majeure;
o Any outage, whether or not due to the fault or negligence of
us, of our facility attributable to a defect or inadequacy in
the manufacture, design or installation of our facility that
prevents, curtails, interrupts or reduces the ability of our
facility to generate Net Electric Energy or the ability of us
to perform our obligations under the power purchase agreement;
or
o To the extent that the party claiming force majeure failed to
prevent or remedy the force majeure condition by taking all
commercially reasonable acts, short of litigation if the
remedy requires litigation, and, except as otherwise provided
in the power purchase agreement, failed to resume performance
under the power purchase agreement with reasonable dispatch
after the termination of the force majeure condition; or
o To the extent that the claiming party's failure to perform was
caused by lack of funds; or
o To the extent Williams Energy is unable to perform due to a
shortage of natural gas or fuel oil supply not caused by an
event of force majeure; or
o Because of an increase or decrease in the market price of
electric energy/capacity, natural gas or fuel oil, or because
it is uneconomic for the party to perform its obligations
under the power purchase agreement.
Neither party will be required to settle any strike, walkout, lockout
or other labor dispute on terms which, in the sole judgment of the party
involved in the dispute, are contrary to its interest.
Williams Energy will have the right to terminate the power purchase
agreement if a force majeure has been declared by us and the effect of the force
majeure has not been fully corrected or alleviated within 18 months after the
date the force majeure was declared. Williams Energy, however, will not have the
right to terminate the power purchase agreement if (1) the force majeure was
caused by Williams Energy or (2) the force majeure event does not prevent or
materially limit Williams Energy's ability to sell our facility's net capacity
into or through the PJM power pool market or to a third party.
Events of Default; Termination; Remedies
The following will constitute events of default under the power
purchase agreement:
o breach of any term or condition of the power purchase
agreement, including, but not limited to, (1) any failure to
maintain or to renew any security, (2) any breach of a
representation, warranty or covenant or (3) failure of either
party to make a required payment to the other party;
o our facility is not available to provide fuel conversion
services to Williams Energy during any period of 180
consecutive days after the commercial operation date, except
as may be excused by force majeure or the absence of available
natural gas, or if the non-availability is caused by act or
failure by Williams Energy where the action is required by the
power purchase agreement;
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o we sell or supply Net Electric Energy, ancillary services or
capacity from our facility, or agree to do the same, to any
person or entity other than Williams Energy, without the prior
approval of Williams Energy;
o failure by us for 30 consecutive days to perform regular and
required maintenance, testing or inspection of the
Interconnection Facilities, our facility and/or other electric
equipment and facilities;
o failure by us for 30 consecutive days to correct or resolve a
material violation of any code, regulation and/or statute
applicable to the construction, installation, operation or
maintenance of our facility, the Interconnection Facilities,
Protective Gas Apparatus or any other electric equipment and
facilities required to be constructed and operated under the
power purchase agreement when the violation impairs our
continued ability to perform under the power purchase
agreement;
o involuntary bankruptcy or insolvency of either party and
continues for more than 60 days;
o voluntary bankruptcy or insolvency by either party;
o any modifications, alterations or other changes to our
facility by or on behalf of us which prevent us from
fulfilling, or materially diminishes our ability to fulfill,
our obligations, duties, rights and responsibilities under the
power purchase agreement and which after reasonable notice and
opportunity to cure, are not corrected;
o there will be outstanding for more than 60 days any
unsatisfied final, non-appealable judgment against us in an
amount exceeding $500,000, unless the existence of the
unsatisfied judgment does not materially affect our ability to
perform our obligations under the power purchase agreement;
and
o (1) The AES Corporation will cease to own, directly or
indirectly, beneficially and of record, at least 50 percent of
the equity interests in our company or will cease to possess
the power to direct or cause the direction of our management
or policies or (2) any person or an affiliate, other than The
AES Corporation or an affiliate, authorized to act as a power
marketer by FERC will own, directly or indirectly,
beneficially or of record, any of the equity interests in our
company.
Upon the occurrence of any event of default, other than an event of
default for voluntary bankruptcy or insolvency, for which no notice will be
required or opportunity to cure permitted, the party not in default, to the
extent the party has actual knowledge of the occurrence of the event of default,
must give prompt written notice of the default to the defaulting party. The
notice must describe, in reasonable detail, the nature of the default and, where
known and applicable, the steps necessary to cure the default. The defaulting
party must have 30 days, but only two business days in the case of a default for
failure to make a requested payment to the non-defaulting party under the power
purchase agreement, following receipt of the notice either to cure the default
or commence in good faith all the steps as are necessary and appropriate to cure
the default if the default cannot be completely cured within the 30-day period.
If the defaulting party fails to cure the default or take the steps as
provided under the preceding paragraph, and immediately upon the occurrence of
any event of default for voluntary bankruptcy or insolvency, the power purchase
agreement may be terminated by the non-defaulting party, without any liability
or responsibility whatsoever, by written notice to the party in default. The
non-defaulting party may exercise all the rights and remedies as are available
to it to recover damages caused by the default.
Security
We agreed to compensate Williams Energy for any actual damages it
suffers or incurs as the result of its reliance upon the delivery of our
facility's net capacity, ancillary services and fuel conversion services, to the
extent the damages cannot be mitigated fully. We further agreed that the damages
Williams Energy may suffer under these circumstances will be any and all
reasonable costs incurred by Williams Energy in excess of costs that would have
been incurred had the commercial operation date occurred on or before June 30,
2001, as the date may be extended under the power purchase agreement.
As required by the power purchase agreement, we have provided to
Williams Energy a guaranty of our performance and payment obligations under the
power purchase agreement from The AES Corporation in the amount of $30 million,
which guaranty must terminate on the commercial operation date. At any time that
The AES Corporation's senior unsecured debt is no longer rated investment grade
by Standard & Poor's or Moody's, or at any time at our option, we must provide
the financial security for the guaranty amount as specified in the following
paragraph. Upon the provision of the guaranty or other financial security
referred to in this paragraph, the guaranty provided by The AES Corporation
under the provisions of the original power purchase agreement must be canceled
and returned to us.
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We must provide to Williams Energy, within 30 days after a reduction in
the unsecured debt rating of The AES Corporation as described above, or at any
time if payment is so secured at our option, security in the form of a single
letter of credit, satisfactory to Williams Energy in form and substance, upon
which Williams Energy may draw if our facility does not achieve the commercial
operation date by the date specified in the power purchase agreement, as the
date may be extended. If the security contains an expiration date, either
express or implied, we must renew the security not later than 30 days prior to
the expiration date and must contemporaneously provide written notice of the
renewal to Williams Energy. If we fail to renew the security as described above,
Williams Energy is entitled to demand and receive payment thereunder on or after
three days after written notice of the failure is provided to us, and in the
event the amount so drawn must be deposited in an interest bearing escrow
account and must be returned to us at the commercial operation date unless
otherwise drawn on by Williams Energy in satisfaction of our obligations under
the preceding security provisions. The requirement for the security must
terminate upon the commercial operation date.
Williams Energy has provided to us a guarantee, issued by The Williams
Companies, Inc., of Williams Energy's performance and payment obligations under
the power purchase. If The Williams Companies, Inc. is no longer rated
investment grade, however, the guarantee must, within 30 days after the loss of
the rating, be replaced by a guarantee from another affiliate of Williams Energy
that is rated investment grade or by other security acceptable to us, including
a letter of credit which meets the requirements of the power purchase agreement.
Assignment
Generally, neither the power purchase agreement nor any rights, duties,
interests or obligations thereunder may be assigned, transferred, pledged or
otherwise encumbered or disposed of, by operation of law or otherwise without
the prior written consent of the other party.
We agreed that we will not sell, transfer, assign, lease or otherwise
dispose of our facility or any substantial portion thereof or interest therein
necessary to perform our obligations under the power purchase agreement to any
person that is a FERC-authorized power marketer or an affiliate without the
prior written consent of Williams Energy, which consent must not be unreasonably
withheld.
Construction Agreement
We, as assignee of AES Ironwood, Inc., have entered into an Agreement
for Engineering, Procurement and Construction Services, dated as of September
23, 1998, as amended, with Siemens Westinghouse for Siemens Westinghouse to
perform services in connection with the design, engineering, procurement, site
preparation and clearing, civil works, construction, start-up, training and
testing and to provide all materials and equipment (excluding operational spare
parts), machinery, tools, construction fuels, chemicals and utilities, labor,
transportation, administration and other services and items (collectively and
separately, the "Services") for our facility.
Siemens Westinghouse's Services and Other Obligations
Siemens Westinghouse must complete our project by performing or causing
to be performed all of the Services. The Services will include: engineering and
design; construction and construction management; providing design documents,
instruction manuals, a project procedures manual and quality assurance plan;
procurement of all materials, equipment and supplies and all contractor and
subcontractor labor and manufacturing and related services; providing a spare
parts list; providing all labor and personnel; obtaining some applicable permits
and providing information to assist us in obtaining other applicable permits;
performing inspection, expediting, quality surveillance and traffic services;
transporting, shipping, receiving and marshalling all materials, equipment and
supplies and other items; providing storage for all materials, supplies and
equipment and procurement or disposal of all soil and gravel (including
remediation and disposal of specific hazardous materials); providing for design,
construction and installation of Electrical Interconnection Facilities
(including Electric Metering Equipment, automatic regulation equipment,
Protective Apparatus and control system equipment) and reviewing other
Metropolitan Edison interconnections to our facility (including gas and water
pipelines); performing Performance Tests and Power Purchase Agreement Output
Tests; providing for start-up and initial operation functions; providing
specified spare parts, waste disposal services, chemicals, consumables and
utilities.
The Services will also include: training our personnel prior to
Provisional Acceptance; providing us and our designee with access to the
facility site; obtaining additional necessary real estate rights; clean-up and
waste disposal (including hazardous materials brought to the facility site by
Siemens Westinghouse or the subcontractors); submitting a construction schedule
and progress reports; payment of contractor taxes; employee identification and
security arrangements; protecting adjoining utilities and public and private
lands from damage; paying appropriate royalties and license fees; providing
final releases and waivers to us; posting collateral or providing other
assurances if major
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subcontractors fail to furnish final waivers; maintaining labor relations and
project labor agreements; providing further assurances; coordinating with other
contractors; and causing Siemens Corporation to execute and deliver the related
guaranty.
Construction and Start-Up
Except for specific Services the performance of which has already
commenced, Siemens Westinghouse must commence performance of the Services on the
date specified in our notice to proceed. Siemens Westinghouse must perform the
Services in accordance with prudent utility practices, generally accepted
standards of professional care, skill, diligence and competence applicable to
engineering, construction and project management practices, all applicable laws,
all applicable permits, the real estate rights, the quality assurance plan,
Metropolitan Edison electrical interconnection requirements, the environmental
requirements and safety precautions described in the construction agreement, and
all of the requirements necessary to maintain the warranties granted by the
subcontractors under the construction agreement. Siemens Westinghouse must
perform the Services in accordance with our construction schedule and must cause
o each Construction Progress Milestone to be achieved on or
prior to the applicable Construction Progress Milestone Date,
o either Provisional Acceptance or Interim Acceptance of our
facility to occur on or prior to the Guaranteed Provisional
Acceptance Date and
o Final Acceptance of our facility to occur on or before the
Guaranteed Final Acceptance Date.
Siemens Westinghouse must perform the Services so that our facility,
when operated in accordance with the instruction manual and the Power Purchase
Agreement Operating Requirements, regardless of whether our facility is operated
at 705 megawatts or at a different output, on natural gas and on fuel oil,
respectively, as of Provisional Acceptance, Interim Acceptance and Final
Acceptance, will comply with all applicable laws and applicable permits,
Metropolitan Edison electrical interconnection requirements and the Guaranteed
Emissions Limits in accordance with the Completed Performance Test requirements.
Contract Price and Payment
The adjusted contract price, including base Scope Changes through the
date of the construction agreement, is $238 million and commencing on the
construction commencement date is to be paid in installments in accordance with
the Payment and Milestone Schedule. The contract price may be adjusted as a
result of Scope Changes. We must make scheduled payments to Siemens Westinghouse
upon receipt of Siemens Westinghouse's payment request unless the independent
engineer fails to confirm the matters certified to by Siemens Westinghouse in
the request, in which case we may defer the scheduled payments until the
condition is satisfied. We must withhold from each scheduled payment 5%, other
than our project completion payment, of the payment until after Final
Acceptance. At Final Acceptance, we must pay all Retainage except for $1,000,000
and 150% of the cost of completing all Punch List items. We must pay our project
completion payment, including all remaining Retainage within 30 days after
Project Completion. Upon the termination of the construction agreement, Siemens
Westinghouse will be entitled to a termination payment equal to the scheduled
payments due and owing, Retainage and termination costs incurred by Siemens
Westinghouse and subcontractors. We are not obligated to make any payment to
Siemens Westinghouse at any time Siemens Westinghouse is in material breach of
the construction agreement, unless Siemens Westinghouse is diligently pursuing a
cure. All payments are subject to release of claims.
Our Required Services
Our responsibilities include: designating a representative for our
project; furnishing Siemens Westinghouse access to the facility site; securing
specified applicable permits and real estate rights; providing specified
start-up personnel; furnishing water, water delivery facilities, specified spare
parts, water disposal services and consumables; providing permanent utilities
for the start-up, testing and operation of our facility; providing fuel supply
arrangements; providing electrical interconnection facilities arrangements;
furnishing approvals; administering third-party contracts; causing The AES
Corporation to provide a pre-financial closing guaranty.
If we fail to meet any of our obligations under the construction
agreement, then, to the extent that Siemens Westinghouse was reasonably delayed
in the performance of the Services as a direct result thereof, an equitable
adjustment to one or more of the contract price, the Guaranteed Completion
Dates, the Construction Progress Milestone Dates, the Payment and Milestone
Schedule and our construction schedule, and, as appropriate, the other
provisions of
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the construction agreement that may be affected thereby, will be made by
agreement between us and Siemens Westinghouse.
Completion and Acceptance of our Project
Mechanical Completion
Mechanical Completion will be achieved when:
o All equipment and facilities necessary for the full, safe and
reliable operation of our facility have been properly
constructed, installed, insulated and protected where
required, and correctly adjusted, and can be safely used for
their intended purposes in accordance with the instruction
manual and all applicable laws and applicable permits;
o The tests required for Mechanical Completion that are
identified in the construction agreement have been
successfully completed;
o Our facility is fully and properly interconnected and
synchronized with the electrical system of Metropolitan Edison
in accordance with Metropolitan Edison electrical
interconnection requirements, and all features and equipment
of our facility are capable of operating simultaneously; and
o The complete performance by Siemens Westinghouse of all the
Services relating to our facility under the construction
agreement, except for any remaining Punch List items,
Performance Tests, Power Purchase Agreement Output Tests and
Reliability Run, in compliance with the standards of
performance described in the construction agreement, so that
our facility meets all of the applicable requirements
described in the construction agreement but excluding the
achievement of the Guaranteed Emission Limits and the
Performance Guarantees.
When Siemens Westinghouse believes that it has achieved Mechanical
Completion, it must deliver to us the Notice of Mechanical Completion. Within 10
days of receipt of the Notice of Mechanical Completion, if it is satisfied that
the Mechanical Completion requirements have been met, we must deliver to Siemens
Westinghouse a Mechanical Completion Certificate. If reasonable cause exists for
doing so, we must notify Siemens Westinghouse in writing that Mechanical
Completion has not been achieved, stating the reasons therefor. If Mechanical
Completion has not been achieved as so determined by us, Siemens Westinghouse
must promptly do so or perform the additional Services that will achieve
Mechanical Completion of our facility and must issue to us another Notice of
Mechanical Completion. The procedure must be repeated as necessary until
Mechanical Completion of our facility has been achieved.
Performance Tests and Power Purchase Agreement Output Tests
Once Mechanical Completion has been achieved, Siemens Westinghouse must
perform the Performance Tests and Power Purchase Agreement Output Tests in
accordance with criteria described in the construction agreement. Siemens
Westinghouse must give us notice of the Performance Tests and Power Purchase
Agreement Output Tests. We must arrange for the disposition of output during
start-up and testing. Siemens Westinghouse may declare the Performance Test or
the Power Purchase Agreement Output Test to be a Completed Performance Test or a
Completed Power Purchase Agreement Output Test, respectively, if during the
tests the operation of our facility complies with applicable laws, applicable
permits, Guaranteed Emissions Limits and other required standards.
Provisional Acceptance
Provisional Acceptance will be achieved when:
o Siemens Westinghouse has concluded a Completed Performance
Test in which our facility, while operating on natural gas,
demonstrates during a minimum of two 2-hour tests an average
net electrical output and a net heat rate of 95% (or higher)
of the natural gas-based Electrical Output Guarantee and 108%
(or lower) of the natural gas-based Heat Rate Guarantee;
o Siemens Westinghouse has concluded a Completed Power Purchase
Agreement Output Test in which our facility demonstrates (1) a
level of achievement of 95% (or higher) of the natural
gas-based Electrical Output Guarantee, while operating on
natural gas, and (2) to our reasonable satisfaction, the other
capabilities required to be demonstrated under the
construction agreement; and
o Our facility has achieved, and continues to satisfy, the
requirements of Mechanical Completion.
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When Siemens Westinghouse believes that it has achieved Provisional
Acceptance of our facility, it must deliver to us a Notice of Provisional
Acceptance. If we are satisfied that the Provisional Acceptance requirements
have been met, we must deliver to Siemens Westinghouse a Provisional Acceptance
Certificate. If reasonable cause exists for doing so, we must notify Siemens
Westinghouse in writing that Provisional Acceptance of our facility has not been
achieved, stating the reasons therefor. If we determine that Provisional
Acceptance of our facility has not been achieved, Siemens Westinghouse must
promptly do so or perform the additional Services as will achieve Provisional
Acceptance and, if Siemens Westinghouse believes that Provisional Acceptance of
our facility has been achieved, must issue to us another Notice of Provisional
Acceptance. Unless Interim Acceptance or Final Acceptance of our facility has
previously occurred, the procedure must be repeated as necessary until
Provisional Acceptance of our facility has been achieved. Upon the earliest to
occur of Provisional Acceptance, Interim Acceptance and Final Acceptance of our
facility, we must take possession and control our facility and will thereafter
be solely responsible for its operation and maintenance. After we take
possession and control of our facility, Siemens Westinghouse must have
reasonable access to our facility to complete the Services.
Interim Acceptance
Interim Acceptance will be achieved when:
o Siemens Westinghouse has concluded a Completed Performance
Test in which our facility, while operating on natural gas,
demonstrates during the Performance Test an average net
electrical output and a net heat rate (each as measured and
corrected to the design operating conditions, all in
accordance with the procedures described in the construction
agreement) of 95% (or higher) of the natural gas-based
Electrical Output Guarantee (but in no event lower than the
percentage of the natural gas-based Electrical Output
Guarantee demonstrated by the applicable Completed Performance
Test and Completed Power Purchase Agreement Output Test at
Provisional Acceptance, if applicable) and 104% (or lower) of
the natural gas-based Heat Rate Guarantee;
o If neither Provisional Acceptance nor Interim Acceptance of
our facility has occurred, Siemens Westinghouse has completed
a Completed Power Purchase Agreement Output Test in accordance
with the construction agreement to be concluded in which our
facility demonstrates (1) a level of achievement of 95% (or
higher) of the natural gas-based Electrical Output Guarantee,
while operating on natural gas, and (2) to Metropolitan
Edison's reasonable satisfaction, the other capabilities
required to be so demonstrated under the construction
agreement;
o Our facility has achieved, and continues to satisfy the
requirements for the achievement of, Mechanical Completion;
and
o Siemens Westinghouse has completed performance of the Services
except for (1) Punch List items and (2) Services that are
required by the terms of the construction agreement to be
completed after the achievement of Interim Acceptance.
When Siemens Westinghouse believes that it has achieved Interim
Acceptance of our facility, it must deliver to us a Notice of Interim
Acceptance. If we are satisfied that the Interim Acceptance requirements have
been met, we must deliver to Siemens Westinghouse an Interim Acceptance
Certificate. If reasonable cause exists for doing so, we must notify Siemens
Westinghouse in writing that Interim Acceptance of our facility has not been
achieved, stating the reasons therefor. If we determine that Interim Acceptance
has not been achieved, Siemens Westinghouse must promptly take the action or
perform the additional Services as will achieve Interim Acceptance and, if
Siemens Westinghouse believes that Interim Acceptance of our facility has been
achieved, must issue to us another Notice of Interim Acceptance. Unless Final
Acceptance of our facility must have previously occurred, the procedure must be
repeated as necessary until Interim Acceptance of our facility has been
achieved.
Final Acceptance
Final Acceptance will be achieved when:
o Siemens Westinghouse has concluded a Completed Performance
Test in which our facility, while operating separately on
natural gas and on fuel oil, demonstrates during the
Performance Test an average net electrical output and a net
heat rate of 100% (or higher) of each of the corresponding
natural gas-based and fuel oil-based Electrical Output
Guarantees and 100% (or lower) of each of the corresponding
natural gas-based and fuel oil-based Heat Rate Guarantees;
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o If neither Provisional Acceptance nor Interim Acceptance of
our facility has occurred or if we have requested that a new
Completed Power Purchase Agreement Output Test be conducted in
connection with Final Acceptance of our facility, Siemens
Westinghouse has concluded a Completed Power Purchase
Agreement Output Test in which our facility demonstrates (1) a
level of achievement of 100% (or higher) of the natural
gas-based Electrical Output Guarantee, while operating on
natural gas, and (2) to Metropolitan Edison's reasonable
satisfaction, the other capabilities required to be so
demonstrated under the construction agreement;
o our facility has achieved, and continues to satisfy the
requirements for the achievement of, Mechanical Completion;
o the Reliability Guarantee has been achieved under the
construction agreement; and
o Siemens Westinghouse has completed performance of the Services
except for (1) Punch List items and (2) Services that are
required by the terms of the construction agreement to be
completed after the achievement of Final Acceptance, such as
Siemens Westinghouse's warranty obligations.
The Reliability Guarantee will have been achieved if and only if our
facility demonstrates an average equivalent availability of not less than 92%
while operating over a period of at least 45 consecutive days in accordance with
applicable laws, applicable permits, Metropolitan Edison electrical
interconnection requirements, the Power Purchase Agreement Operating
Requirements, the Guaranteed Emissions Limits, the instruction manual and the
power purchase agreement.
When Siemens Westinghouse believes that it has achieved Final
Acceptance of our facility, it must deliver to us a Notice of Final Acceptance.
If we are satisfied that the Final Acceptance requirements have been met, we
must deliver to Siemens Westinghouse a Final Acceptance Certificate. If
reasonable cause exists for doing so, we must notify Siemens Westinghouse in
writing that Final Acceptance has not been achieved, stating the reasons
therefor. If we determine that Final Acceptance has not been achieved, Siemens
Westinghouse must promptly do so or perform the additional Services as will
achieve Final Acceptance and must issue to us another Notice of Final
Acceptance. The procedure must be repeated as necessary until Final Acceptance
has been achieved or deemed to have occurred.
At any time, by giving notice to Siemens Westinghouse, we, in our sole
discretion may elect to effect Final Acceptance, in which case Final Acceptance
will be deemed effective as of the date of the notice, and Siemens Westinghouse
will have no liability to us for any amounts thereafter arising as Performance
Guarantee Payments, other than any Interim Period rebates that arose prior to
the election by us, for failure of our facility to achieve any or all of the
applicable Performance Guarantees.
At any time after Provisional Acceptance or Interim Acceptance of our
facility has been achieved, Siemens Westinghouse may, after exhausting all
reasonable repair and replacement alternatives in order to achieve the
applicable Performance Guarantees for Final Acceptance, so long as the
Reliability Guarantee will have been achieved, give to us notice of its
intention to elect to declare Final Acceptance. In that event, Siemens
Westinghouse may elect to use the results of the most recent eligible Completed
Performance Test for the purpose of determining our facility's level of
achievement of the Performance Guarantees. Final Acceptance will be deemed
effective as of the last to occur of (1) the date of our receipt of the
declaration and report of the final Completed Performance Test, or, as
applicable, the most recent Completed Performance Test, (2) the date of our
receipt of the declaration and report of any additional Completed Power Purchase
Agreement Output Test required by us in connection with Final Acceptance and (3)
the effective date of the achievement of the Reliability Guarantee.
If on or before the Guaranteed Final Acceptance Date (1) our facility
has achieved either Provisional Acceptance or Interim Acceptance, (2) the most
recent Completed Performance Test has satisfied the relevant provisions of the
construction agreement and (3) the Reliability Guarantee has been achieved, then
Final Acceptance of our facility will be deemed to occur on the Guaranteed Final
Acceptance Date. If (1) on or before the Guaranteed Final Acceptance Date, our
facility has achieved at least Provisional Acceptance or Interim Acceptance and
has achieved all other requirements for Final Acceptance except for the
Reliability Guarantee and (2) within 90 days after the Guaranteed Final
Acceptance Date, the Reliability Guarantee has been achieved and all other
requirements for Final Acceptance continue to be satisfied at that time, then
Final Acceptance of our facility will be deemed to occur on the date on which
the Reliability Guarantee is achieved.
Project Completion
Project Completion will be achieved under the construction agreement
when:
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o Final Acceptance of our facility will have occurred and the
Performance Guarantees with respect to our facility will have
been achieved, or in lieu of achievement of the Performance
Guarantees, applicable rebates under the construction
agreement will have been paid, we will have elected Final
Acceptance;
o The Reliability Guarantee will have been achieved;
o Siemens Westinghouse will have demonstrated during the
Completed Performance Test that the operation of our facility
does not exceed the Guaranteed Emissions Limits;
o The requirements for achieving Mechanical Completion of our
facility will continue to be met;
o The Punch List items will have been completed in accordance
with the construction agreement; and
o Siemens Westinghouse will have performed all of the Services,
other than those Services, such as Siemens Westinghouse's
warranty obligations, which by their nature are intended to be
performed after Project Completion.
When Siemens Westinghouse believes that it has achieved Project
Completion, it must deliver to us a Notice of Project Completion. If we are
satisfied that the Final Acceptance requirements have been met, we must deliver
to Siemens Westinghouse a Project Completion Certificate. If reasonable cause
exists for doing so, we must notify Siemens Westinghouse in writing that Project
Completion has not been achieved, stating the reasons therefor. If our Project
Completion has not been achieved as so determined by us, Siemens Westinghouse
must promptly take do so or perform the additional Services as will achieve
Project Completion and must issue to us another Notice of Project Completion.
The procedure must be repeated as necessary until Project Completion is
achieved.
Siemens Westinghouse will be obligated to achieve Project Completion
within 180 days after Final Acceptance of our facility. If Siemens Westinghouse
does not achieve our Project Completion on or before our Project Completion
Deadline or if we determine that Siemens Westinghouse is not proceeding with all
due diligence to complete the Services in order to achieve Project Completion by
the deadline, we may retain another contractor to complete the work at
contractor's expense.
Price Rebate for Failure to Meet Guarantees
Completion Dates
Siemens Westinghouse guarantees that (1) at least one of Provisional
Acceptance, Interim Acceptance or Final Acceptance of our facility will be
achieved on or before the Guaranteed Provisional Acceptance Date and (2) Final
Acceptance of our facility will be achieved on or before the Guaranteed Final
Acceptance Date.
If none of Provisional Acceptance, Interim Acceptance or Final
Acceptance of our facility occurs by the date that is 45 days after the
Guaranteed Provisional Acceptance Date, Siemens Westinghouse must pay us
$110,000 per day for each day Provisional Acceptance, Interim Acceptance or
Final Acceptance is later than the Guaranteed Provisional Acceptance Date, but
in no event will the aggregate amount of the payments be greater than the Delay
LD SubCap.
If none of Provisional Acceptance, Interim Acceptance and Final
Acceptance of our facility occurs on or before the date that is 40 days after
the Guaranteed Provisional Acceptance Date, Siemens Westinghouse must, on the
date, submit for approval by us and the independent engineer a Plan to
accelerate the performance of the Services as necessary in order to achieve (1)
at least one of Provisional Acceptance, Interim Acceptance and Final Acceptance
of our facility by the date that is 12 months after the Guaranteed Provisional
Acceptance Date and (2) Final Acceptance of our facility by the Guaranteed Final
Acceptance Date. If the Plan is not approved by us and the independent engineer,
Siemens Westinghouse must revise the Plan and resubmit a revised Plan for
approval by us and the independent engineer.
If Provisional Acceptance, Interim Acceptance and Final Acceptance,
whichever is the earlier to occur, of our facility occurs prior to the
Guaranteed Provisional Acceptance Date, we must pay Siemens Westinghouse $50,000
per day as an early completion bonus, for each day by which Provisional
Acceptance, Interim Acceptance and Final Acceptance precedes the Guaranteed
Provisional Acceptance Date, but in no event will the aggregate amount of the
bonus exceed $3,000,000.
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Performance Guarantees
Electrical Output
If the average net electrical output of our facility at Provisional
Acceptance or Interim Acceptance, whichever is the earlier to occur, is less
than the natural gas-based Electrical Output Guarantee, then Siemens
Westinghouse must pay us, as a rebate, for each day during the Interim Period,
an amount equal to $0.22 per day for each kilowatt by which the average net
electrical output is less than the natural gas-based Electrical Output
Guarantee.
Upon Final Acceptance, if (1) the average net electrical output of our
facility during the natural gas-fired portion of the Completed Performance Test
is less than the natural gas-based Electrical Output Guarantee, then we must pay
Siemens Westinghouse, as a rebate, an amount equal to $550 for each kilowatt by
which the average net electrical output is less than the natural gas-based
Electrical Output Guarantee and (2) the fuel oil-based portion of the Completed
Performance Test is less than the fuel oil-based Electrical Output Guarantee,
then Siemens Westinghouse must pay us, as a rebate, an amount equal to $30 for
each kilowatt by which the average net electrical output is less than the fuel
oil-based Electrical Output Guarantee.
Upon Final Acceptance, if the average net electrical output of our
facility during the natural gas-fired portion of the Completed Performance Test
is greater than the natural gas-based Electrical Output Guarantee, then Siemens
Westinghouse must pay us as a bonus, an amount equal to 50% of the net
incremental revenues received by us during the period of the first three years
following the commercial operation date as a result of (1) any power purchase
agreement concluded with a utility whereby the utility purchases the excess
output, (2) any short-term sales of the excess output, and (3) any spot sales of
the excess output, in each of the cases (1) through (3) above after subtracting
all incremental costs and taxes associated with the excess output, so long as
the aggregate amount of any bonus does not in any event exceed $275 per kilowatt
of excess capacity.
Heat Rate Guarantees
If the average net heat rate of our facility at Provisional Acceptance
and/or Interim Acceptance, if having occurred before Final Acceptance, exceeds
the natural gas-based Heat Rate Guarantee, then Siemens Westinghouse must pay
us, as a rebate, for each day during the Interim Period, an amount equal to $44
per day for each BTU/KwH by which the measured net heat rate is greater than the
natural gas-based Heat Rate Guarantee.
Upon Final Acceptance, if the net heat rate of our facility during (1)
the natural gas-fired portion of the Completed Performance Test exceeds the
natural gas-based Heat Rate Guarantee, then Siemens Westinghouse must pay us, as
a rebate, an amount equal to $162,300 for each BTU/KwH by which the measured
heat rate is greater than the natural gas-based Heat Rate Guarantee, and (2) the
fuel oil-fired portion of the Completed Performance Test exceeds the natural
gas-based Heat Rate Guarantee, then Siemens Westinghouse must pay us, as a
rebate, an amount equal to $17,000 for each BTU/KwH by which the measured heat
rate is greater than the fuel oil-based Heat Rate Guarantee.
Upon Final Acceptance, if the average net heat rate during the natural
gas-fired portion of the Completed Performance Test is less than the natural
gas-based Heat Rate Guarantee, then we must pay Siemens Westinghouse, as a
bonus, an amount equal to $40,000 for each BTU/KwH by which the measured heat
rate is less that the natural gas-based Heat Rate Guarantee so long as that the
aggregate amount of any bonus does not in any event exceed $3,000,000.
Liability and Damages
Limitation of Liability
In no event will Siemens Westinghouse's liability exceed (1) the Delay
LD SubCap and (2) the Total LD SubCap.
Consequential Damages
Neither party nor any of its contractors, subcontractors or other
agents providing equipment, material or services for our project will be liable
for any indirect, incidental, special or consequential loss or damage of any
type.
Aggregate Liability of Contractor
The total aggregate liability of Siemens Westinghouse and any of its
subcontractors; including liabilities covered by the Delay LD SubCap and the
Total LD SubCap, to us will not in any event exceed an amount equal to the
contract price so long as the limitation of liability will not apply to
obligations to remove liens or to make indemnification payments.
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Warranties and Guarantees
Siemens Westinghouse warrants and guarantees that during the applicable
warranty period
o all machinery, equipment, materials, systems, supplies and
other items comprising our project must be new and of
first-rate quality which satisfies Metropolitan Edison-grade
standards and in accordance with prudent utility practices and
the specifications described in the construction agreement,
suitable for the use in generating electric energy and
capacity under the climatic and normal operating conditions
and free from defective workmanship or materials,
o it will perform all of its design, construction, engineering
and other Services in accordance with the construction
agreement,
o our project and its components must be free from all defects
caused by errors or omissions in engineering and design, as
determined by reference to prudent utility practices, and must
comply with all applicable laws, all applicable permits,
Metropolitan Edison electrical interconnection requirements,
the Power Purchase Agreement Operating Requirements and the
Guaranteed Emissions Limits and
o the completed project must perform its intended functions of
generating electric energy and capacity as a complete,
integrated operating system as contemplated in the
construction agreement. If we notify Siemens Westinghouse
within 30 days after the expiration of the applicable warranty
period of any defects or deficiencies discovered during the
applicable warranty period, Siemens Westinghouse must promptly
reperform any of the services at its own expense to correct
any errors omissions, defect or deficiencies and, in the case
of defective or otherwise deficient machinery, equipment,
materials, systems supplies or other items, replace or repair
the same at its own expense. Siemens Westinghouse warrants and
guarantees that, to the extent we have made all payments then
due to Siemens Westinghouse, title to our facility and all
work, materials, supplies and equipment must pass to us free
and clear of all liens, other than any permitted liens. Other
than the warranties and guarantees provided in the
construction agreement there are no other warranties of any
kind, whether statutory, express or implied relating to the
Services.
During the applicable warranty period, Siemens Westinghouse must
promptly notify us of any engineering and design defects which are manifested in
any of Siemens Westinghouse's fleet of 501G combustion turbines under
construction, start-up or testing or in operation during the warranty period and
which could reasonably be expected to be common to the fleet or this facility.
Upon the notification from Siemens Westinghouse of a fleet-wide or common defect
and otherwise upon notification from us no later than 30 days after the
expiration of the applicable warranty period of any defects or deficiencies in
our project or any component, we must, subject to the provisions of the
construction agreement, make our facility or the subject Equipment available to
Siemens Westinghouse for Siemens Westinghouse to re-perform, replace or, at its
option, repair the same at its expense so that it is in compliance with the
standards warranted and guaranteed, all in accordance with the construction
agreement.
Force Majeure
Force Majeure Event
A force majeure event means any act or event that prevents the affected
party from performing its obligations, other than the payment of money, under
the construction agreement or complying with any conditions required to be
complied with under the construction agreement if the act or event is beyond the
reasonable control of and not the fault of the affected party and the party has
been unable by the exercise of due diligence to overcome or mitigate the effects
of the act or event. Force majeure events include, but are not limited to, acts
of declared or undeclared war, sabotage, landslides, revolution, terrorism,
flood, tidal wave, hurricane, lightning, earthquake, fire, explosion, civil
disturbance, insurrection or riot, act of God or the public enemy, action
(including unreasonable delay or failure to act) of a court or public authority,
or strikes or other labor disputes of a regional or national character that are
not limited to only the employees of Siemens Westinghouse or its subcontractors
and that are not due to the breach of a labor contract or applicable law by the
party claiming force majeure or any of its subcontractors. Force majeure events
do not include (1) strikes, work stoppages and labor disputes or unrest of any
kind that involve only employees of Siemens Westinghouse or any subcontractors,
except as expressly provided in the preceding sentence, (2) late delivery of
materials or equipment, except to the extent caused by a force majeure event and
(3) economic hardship.
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Excused Performance
If either party is rendered wholly or partly unable to perform its
obligations because of a force majeure event, that party will be excused from
whatever performance is affected by the force majeure event to the extent so
affected so long as:
o the non-performing party gives the other party prompt notice
describing the particulars of the occurrence;
o the suspension of performance is of no greater scope and of no
longer duration than is reasonably required by the force
majeure event;
o the non-performing party exercises all reasonable efforts to
mitigate or limit damages to the other party;
o the non-performing party uses its best efforts to continue to
perform its obligations under the construction agreement and
to correct or cure the event or condition excusing
performance; and
o when the non-performing party is able to resume performance of
its obligations, that party must give the other party written
notice to that effect and must promptly resume performance
under the construction agreement.
Scope Changes
Scope Changes
We may order Scope Changes to the Services, in which event one or more
of the contract price, the Construction Progress Milestone Dates, the Guaranteed
Completion Dates, the Payment and Milestone Schedule, our construction schedule
and the Performance Guarantees will be adjusted accordingly, if necessary. All
Scope Changes must be authorized by a Scope Change Order and only we or our
representative may issue Scope Change Orders.
As soon as Siemens Westinghouse becomes aware of any circumstances
which it has reason to believe may necessitate a Scope Change, Siemens
Westinghouse must issue to us a Scope Change Order Notice at its expense. If we
desire to make a Scope Change, in response to a Scope Change Order Notice or
otherwise, we must submit a Scope Change Order Request to Siemens Westinghouse.
Siemens Westinghouse must promptly review the Scope Change Order Request and
notify us in writing of the options for implementing the proposed Scope Change
and the effect, if any, each option would have on the contract price, the
Guaranteed Completion Dates, the Construction Progress Milestone Dates, the
Payment and Milestone Schedule, our construction schedule and the Performance
Guarantees.
No Scope Change Order will be issued and no adjustment of the contract
price, the Guaranteed Completion Dates, the Construction Progress Milestone
Dates, the Payment and Milestone Schedule, our construction schedule or the
Performance Guarantees will be made in connection with any correction of errors,
omission, deficiencies, or improper or defective work on the part of Siemens
Westinghouse or any subcontractors in the performance of the Services. Changes
due to changes in applicable laws or applicable permits occurring after the date
of the construction agreement must be treated as Scope Changes.
Effect of Force Majeure Event
If and to the extent that any force majeure events affect Siemens
Westinghouse's ability to meet the Guaranteed Completion Dates, or the
Construction Progress Milestone Dates, an equitable adjustment in one or more of
the dates, the Payment and Milestone Schedule and our construction schedule must
be made by agreement between us and Siemens Westinghouse. No adjustment to the
Performance Guarantees and, except as otherwise expressly described below, the
contract price must be made as a result of a force majeure event. If Siemens
Westinghouse is delayed in the performance of the Services by a force majeure
event, then:
o to the extent that the delay(s) are, in the aggregate, six
months or less, Siemens Westinghouse must absorb all of its
costs and expenses resulting from the delay(s); and
o to the extent that the delay(s) are, in the aggregate, more
than six months, Siemens Westinghouse must be reimbursed by us
for those incremental costs and expenses resulting from the
delay(s) which are incurred by Siemens Westinghouse after the
six-month period.
Price Change
An increase or decrease in the contract price, if any, resulting from a
Scope Change requested by us or made under the construction agreement must be
determined, upon the mutual agreement of the parties.
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Continued Performance Pending Resolution of Disputes
If a dispute regarding the amount of any increase or decrease in
Siemens Westinghouse's costs with respect to a Scope Change, Siemens
Westinghouse must proceed with the performance of the Scope Change promptly
following our execution of the corresponding Scope Change Order.
If hazardous materials were not identified in an environmental site
assessment report delivered by us to Siemens Westinghouse prior to the
construction commencement date and were not brought onto the facility site by
Siemens Westinghouse or any of its subcontractors, then Siemens Westinghouse
will be entitled to a Scope Change under the construction agreement.
Insurance
General
Siemens Westinghouse must provide and maintain the following types of
insurance at all times while it or any subcontractor is performing the Services:
workers' compensation insurance and employers' liability insurance; commercial
general liability insurance; business automobile liability insurance; commercial
umbrella and/or excess insurance; "all-risk" builder's risk insurance; and ocean
marine cargo insurance. Before permitting any of its subcontractors to perform
any Services at the facility site, Siemens Westinghouse must obtain a
certificate of insurance from each subcontractor evidencing that each
subcontractor has obtained insurance in the amounts and against the risks as is
consistent with Siemens Westinghouse's customary practices for the types of
subcontracts for projects of similar type and capacity to our project. All
insurance policies supplied by Siemens Westinghouse must include a waiver of any
right of subrogation of the insurers and of any right of the insurers to any
set-off, counterclaim or deduction.
Cost of Premiums
Construction Insurance: Siemens Westinghouse must bear responsibility
for payment of all premiums for insurance coverage required to be provided by
Siemens Westinghouse.
Operating Insurance: we will be responsible for obtaining, on the terms
and conditions as we and our financing parties reasonably deem to be
appropriate, "all-risk" property insurance, including "business interruption"
coverage, for our facility for the period commencing with the first to occur of
Provisional Acceptance, Interim Acceptance and Final Acceptance.
Risk of Loss
With respect to our facility, until the Risk Transfer Date, Siemens
Westinghouse must bear the risk of loss and full responsibility for the costs of
replacement, repair or reconstruction resulting from any damage to or
destruction of our facility or any materials, equipment, tools and supplies,
which are purchased for permanent installation in or for use during construction
of our facility.
After the Risk Transfer Date with respect to our facility, we must bear
all risk of loss and full responsibility for repair, replacement or
reconstruction with respect to any loss, damage or destruction to our facility
which occurs after the Risk Transfer Date.
Termination
Termination for Company's Convenience
We may for its convenience terminate any part of the Services or all
remaining Services at any time upon 30 days' prior written notice to Siemens
Westinghouse specifying the part of the Services to be terminated and the
effective date of termination. We may elect to suspend completion of all or any
part of the Services upon 10 days' prior written notice to Siemens Westinghouse
or, in emergency situations upon prior notice as circumstances permit.
Termination by Contractor
If we fail to pay to Siemens Westinghouse any payment and our failure
continues for 20 days, then (1) Siemens Westinghouse may suspend its performance
of the Services upon 10 days' prior written notice to us, which suspension may
continue until the time as the payment, plus accrued interest, is paid to
Siemens Westinghouse, and/or (2) if the payment has not been made prior to the
commencement of a suspension by Siemens Westinghouse under clause (1) above,
Siemens Westinghouse may terminate the construction agreement upon 60 days'
prior written notice to us so long as the termination does not become effective
if the payment, plus accrued interest, is made to Siemens Westinghouse
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prior to the end of the notice period. In the event of a suspension, an
equitable adjustment to one or more of the contract price, the Guaranteed
Completion Dates, the Construction Progress Milestone Dates, the Payment and
Milestone Schedule and our construction schedule, and, as appropriate, the other
provisions of the construction agreement that may be affected thereby, must be
made by agreement between us and Siemens Westinghouse. If we have suspended
completion of all or any part of the Services in accordance with the
construction agreement for a period in excess of two years in the aggregate,
Siemens Westinghouse may, at its option, at any time thereafter so long as the
suspension continues, give written notice to Company that Siemens Westinghouse
desires to terminate the suspended Services. Unless we order Siemens
Westinghouse to resume performance of the suspended services within 10 days of
the receipt of the notice from Siemens Westinghouse, the suspended Services will
be deemed to have been terminated by us for its convenience. If the occurrence
of one or more force majeure events prevents Siemens Westinghouse from
performing the Services for a period of 365 consecutive days, Siemens
Westinghouse may, at its option, give written notice to us of its desire to
terminate the construction agreement.
Consequences of Termination
o Upon any termination, we may, unless the termination is
pursuant to any default Siemens Westinghouse will be paid all
amounts due and owing to it under the construction agreement
and it is not deemed to constitute a waiver by Siemens
Westinghouse of any rights to payment it may have as a result
of a non-default related termination in the event of a
termination pursuant to a default, at its option elect to have
itself, or its designee, which may include any other affiliate
of The AES Corporation or any third-party purchaser, (1)
assume responsibility for and take title to and possession of
our project and any or all work, materials or equipment
remaining at the facility site and (2) succeed automatically,
without the necessity of any further action by Siemens
Westinghouse, to the interests of Siemens Westinghouse in any
or all items procured by Siemens Westinghouse for our project
and in any and all contracts and subcontracts entered into
between Siemens Westinghouse and any subcontractor with
respect to the equipment specified in the construction
agreement with respect to any or all other subcontractors
selected by us which are materially necessary to the timely
completion of our project, Siemens Westinghouse must use all
reasonable efforts to enable us, or our designee, to succeed
to Siemens Westinghouse's interests thereunder.
o If any termination occurs, we may, without prejudice to any
other right or remedy it may have, at its option, finish the
Services by whatever method we may deem expedient.
Default and Remedies
Contractor's Default
Siemens Westinghouse's events of default include: voluntary bankruptcy
or insolvency; involuntary bankruptcy or insolvency; materially adverse
misleading or false representation or warranty; improper assignment; failure to
maintain required insurance; failure to comply with applicable laws or
applicable permits; cessation or abandonment of the performance of Services;
termination or repudiation of, or default under the related guaranty; failure to
supply sufficient skilled workers or suitable material or equipment; failure to
make payment when due for labor, equipment or materials; non-occurrence of
Provisional Acceptance, Interim Acceptance, Final Acceptance and Construction
Progress Milestones; and failure to remedy non-performance or non-observance of
any provision in the construction agreement.
Company's Rights and Remedies
If Siemens Westinghouse is in default of its obligations, We will have any
or all of the following rights and remedies, in addition to any other rights and
remedies that may be available to us under the construction agreement or at law
or in equity, and Siemens Westinghouse will have the following obligations:
o We may, without prejudice to any other right or remedy we may
have under the construction agreement or at law or in equity,
terminate the construction agreement in whole or in part
immediately upon delivery of notice to Siemens Westinghouse.
In case of partial termination, the parties must mutually
agree upon a Scope Change Order to make equitable adjustments,
including the reduction and/or deletion of obligations of the
parties commensurate with the reduced scope Siemens
Westinghouse must have after taking into account the partial
termination, to one or more of the Guaranteed Completion
Dates, the Construction Progress Milestone Dates, the contract
price, the Payment and Milestone Schedule, our construction
schedule, the Performance Guarantees and the other provisions
of the construction agreement which may be affected thereby,
as appropriate. If the parties are unable to reach mutual
agreement as to the Scope Change Order and the dispute
resolution procedures described in the construction agreement
are invoked, the procedures must give due
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consideration to customary terms and conditions under which
Siemens Westinghouse has entered subcontracts with third party
prime contractors covering services substantially similar to
those Services which are not being terminated.
o If requested by us, Siemens Westinghouse must withdraw from
the facility site, must assign to us its subcontracts, to the
extent permitted therein, as we may request, and must remove
the materials, equipment, tools and instruments used by, and
any debris and waste materials generated by, Siemens
Westinghouse in the performance of the Services as we may
direct, and we, without incurring any liability to Siemens
Westinghouse (other than the obligation to return to Siemens
Westinghouse at the completion of our project the materials
that are not consumed or incorporated into our project, solely
on an "as is, where is" basis without any representation or
warranty of any kind whatsoever) may take possession of any
and all designs, drawings, materials, equipment, tools,
instruments, purchase orders, schedules and facilities of
Siemens Westinghouse at the facility site that we deem
necessary to complete the Services.
Assignment
Consent Required
Generally, neither we nor Siemens Westinghouse will have any right to
assign or delegate any of their respective rights or obligations under the
construction agreement either voluntarily or involuntarily or by operation of
law.
Maintenance Services Agreement
We, as assignee of AES Ironwood, Inc., have entered into the
Maintenance Program Parts, Shop Repairs and Scheduled Outage TFA Services
Contract, dated as of September 23, 1998, with Siemens Westinghouse by which
Siemens Westinghouse will provide us with, among other things, combustion
turbine parts, shop repairs and scheduled outage technical field assistance
services.
The maintenance services agreement became effective on the date of
execution and unless terminated early, must terminate upon completion of shop
repairs performed by Siemens Westinghouse following the eighth Scheduled Outage
of the applicable Combustion Turbine or 10 years from initial synchronization of
the applicable combustion turbine, whichever occurs first.
Scope of Work
During the term of the maintenance services agreement, and in
accordance with the Scheduled Outage plan, Siemens Westinghouse is required to
do the following:
o deliver the type and quantity of New Program Parts for
installation of the Combustion Turbine;
o repair/refurbish Program Parts and equipment for the
Combustion Turbine;
o provide Miscellaneous Hardware;
o provide us with material safety data sheets for all hazardous
materials Siemens Westinghouse intends to bring/use on the
facility site;
o provide the services of a maintenance program engineer to
manage the Combustion Turbine maintenance program; and
o provide TFA Services.
We are responsible for, among other things:
o storing and maintaining parts, materials and tools to be used
in or on the Combustion Turbine;
o maintaining and operating the Combustion Turbine consistently
with the warranty conditions;
o ensuring that its operator and maintenance personnel are
properly trained;
o transporting Program Parts in need of repair/refurbish; and
o providing Siemens Westinghouse, on a monthly basis, with the
required Equivalent Starts and EBHs.
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We and Siemens Westinghouse will jointly develop the Scheduled Outage
plan. The Scheduled Outage plan will be consistent with the terms and conditions
of the power purchase agreement.
Early Replacement
If it is determined that due to normal wear and tear a Program Part(s)
for the Combustion Turbine has failed or will not last until the next Scheduled
Outage, and the part has to be repaired before the scheduled replacement period,
Siemens Westinghouse will replace the Program Part by moving up a New Program
Part which is otherwise scheduled to be delivered at a later date. The contract
price for the replacement will not be affected if the replacement date is less
than or equal to one year earlier than the Scheduled Outage during which the
Program Part was scheduled to be replaced. If the actual replacement date for a
Program Part is more than one year earlier than the Scheduled Outage at which
point the Program Part was scheduled to be replaced, the early replacement will
result in an adjustment to the Payment Schedule. Siemens Westinghouse has the
final decision with regard to the replacement or refurbishment associated with
any Program Part. If we dispute Siemens Westinghouse's decision, we may seek to
resolve the dispute in accordance with the dispute resolution procedures
discussed below.
Parts Life Credit
After applicable warranty periods described in the maintenance services
agreement and the construction agreement, Siemens Westinghouse will provide a
parts life credit if a Program Part requires replacement due to normal wear and
tear prior to meeting its expected useful life. Siemens Westinghouse has the
final decision with regard to actual parts life and the degree of repair or
refurbishment associated with any Program Parts. The parts life credit will be
calculated in terms of EBHs and Equivalent Starts. The price of the replacement
part will be adjusted for inflation. If we dispute Siemens Westinghouse's
decision, we may seek to resolve the dispute in accordance with the dispute
resolution procedures discussed below.
Contract Price and Payment Terms
Siemens Westinghouse will invoice us monthly and payments are then due
within 25 days. The fees assessed by Siemens Westinghouse will be based on the
number of EBHs accumulated by the applicable Combustion Turbine as adjusted for
inflation. The contract price will be the aggregate number of fees as adjusted
plus any additional payment amount mutually agreed to by the parties under a
Change Order.
Unscheduled Outages and Unscheduled Outage Work
If during the term of the maintenance services agreement an Unscheduled
Outage occurs resulting from (1) the non-conformity of New Program Parts; (2)
the failing of a Shop Repair; (3) a Program Part requiring replacement due to
normal wear and tear prior to achieving its expected life in terms of EBHs or
Equivalent Starts; or (4) the failure of a Service, performed by Siemens
Westinghouse, we must hire Siemens Westinghouse, to the extent not supplied by
Siemens Westinghouse as a warranty remedy under Siemens Westinghouse's
warranties under the maintenance services agreement to supply any additional
parts, Miscellaneous Hardware, Shop Repairs and TFA Services under a Change
Order. We will be entitled to any applicable parts life credit with respect to
Program Parts as well as a discount for TFA Services. If the Unscheduled Outage
occurs within a specified number of EBHs of a Scheduled Outage and it was
anticipated that the additional parts, Miscellaneous Hardware, Shop Repairs and
TFA Services to be used in the Unscheduled Outage were to be used during the
upcoming Scheduled Outage, the upcoming Scheduled Outage must be moved up in
time to become the Unscheduled Outage/moved-up Scheduled Outage. We will not be
required to pay any additional money for the Program Parts, Miscellaneous
Hardware, Shop Repairs and TFA Services.
If any Program Parts are delivered by Siemens Westinghouse within 15
days of receipt of the Change Order, we will pay to Siemens Westinghouse the
price for the Program Part described in the maintenance services agreement plus
a specified percentage. Any Program Part delivered after 30 days of the Change
Order will cost us the price described in the maintenance services agreement
minus a specified percentage.
Changes in Operating Restrictions
The maintenance services agreement requires that each Combustion
Turbine will be operated in accordance with the requirements of the power
purchase agreement and prudent utility practices, with 8,000 EBH/year and 100
Equivalent Starts per year by using natural gas fuel or liquid fuel and water.
Should the actual operations differ from these operating parameters which causes
a Scheduled Outage to be planned/performed earlier or later than as expected,
then, under a Change Order, an adjustment in the scope, schedule, and price must
be made.
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Warranties
Siemens Westinghouse warrants that the New Program Parts, Miscellaneous
Hardware and any Shop Repairs must conform to standards of design, materials and
workmanship consistent with generally accepted practices of the electric utility
industry. The warranty period with respect to Program Parts, Hardware and Shop
Repair is until the earlier of one year from the date of installation of the
original Program Part or Hardware, a specific number of starts or fired hours
after installation of the Program Parts and Hardware, or three years from the
date of delivery of the original Program Part, Hardware, and in the case of Shop
Repair, three years from completion of the work. Warranties on the Program Parts
and Hardware must not expire more than one year after the conclusion of the
maintenance services agreement. Siemens Westinghouse will repair or replace any
Program Part or Hardware, at its cost, if notified of any failure or
non-conformity of the Program Part or Hardware during the warranty period.
Siemens Westinghouse also warrants that the Services of its personnel
and technical information transmitted will be competent and consistent with
prudent utility practices and the Services will comply in all material respects
with laws and will be free from defects in workmanship for a period of one year
from the date of completion of that item of Services. The warranties on the
Services must expire no later than one year after the termination or end of the
term of the maintenance services agreement.
In addition, Siemens Westinghouse warrants any Program Part removed
during a Scheduled Outage and delivered by us to the designated facility for
repair will be repaired and delivered by Siemens Westinghouse within 26 weeks.
If Siemens Westinghouse does not deliver the Program Part within this time frame
or does not provide a New Program Part in lieu of the Program Part being Shop
Repaired and an outage occurs which requires the a Program Part, Siemens
Westinghouse will pay us liquidated damages for each day the Program Part is not
repaired and delivered the aggregate of which liquidated damage payments must
not exceed a maximum annual cap. If upon reaching the maximum cap on aggregate
liquidated damages, Siemens Westinghouse still has not repaired and delivered
the Program Part, we may elect to terminate the maintenance services agreement
because Siemens Westinghouse will be considered to have failed to perform its
material obligations.
Except for the express warranties described in the maintenance services
agreement, Siemens Westinghouse makes no other warranties or representations of
any kind. No implied statutory warranty of merchantibility or fitness for a
particular purpose applies.
The warranties provided by Siemens Westinghouse are conditioned upon
(1) our receipt, handling, storage, operation and maintenance of our project,
including any Program Parts and Miscellaneous Hardware, being done in accordance
with the terms of the Combustion Turbine instruction manuals; (2) operation of
the Combustion Turbine in accordance with the terms of the maintenance services
agreement; (3) repair of accidental damage done consistently with the equipment
manufacturer's recommendations; (4) us providing Siemens Westinghouse with
access to the facility site to perform its services under the maintenance
services agreement; and (5) hiring Siemens Westinghouse to provide TFA Services,
Program Parts, Shop Repairs and Miscellaneous Hardware required to dissemble,
repair and reassemble the Combustion Turbine.
Insurance
Siemens Westinghouse must maintain in full force and effect during the
term of the maintenance services agreement the following required insurance
coverage: commercial general liability, workers' compensation, umbrella excess
liability and business automobile liability. All the policies of workers'
compensation must provide a waiver of subrogation rights against us.
We must maintain in full force and effect during the term of the
maintenance services agreement the following required insurance coverage:
property insurance, commercial general liability, workers' compensation,
umbrella excess liability and business automobile liability insurance. The
policies of property insurance and workers' compensation must include waivers of
subrogation rights against Siemens Westinghouse.
Termination
We may terminate the maintenance services agreement if:
o specific bankruptcy events affecting Siemens Westinghouse
occur;
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o Siemens Westinghouse fails to perform or observe in any
material respect any provision in the maintenance services
agreement and fails to (1) promptly commence to cure and
diligently pursue the cure of the failure or (2) remedy the
failure within 45 days after Siemens Westinghouse receives
written notice of the failure;
o we terminate the construction agreement due to the
contractor's default thereunder or due to our inability to
obtain construction financing or environmental operating
permits; or
o the contractor terminates the construction agreement for any
reason other than our default thereunder.
Notwithstanding the preceding, we may terminate the maintenance
services agreement at any time for its convenience following the completion of
the first major outage of both Combustion Turbines. In addition, the maintenance
services agreement will automatically terminate if:
o We terminate the construction agreement for reasons other than
(1) the default of the contractor and (2) our inability to
obtain permits for our project or
o the contractor terminates the construction agreement for our
default thereunder. If the termination occurs, Siemens
Westinghouse must discontinue any work or services being
performed and continue to protect our property. Siemens
Westinghouse must transfer title to and deliver any New
Program Parts and Miscellaneous Hardware already purchased by
us. We must pay Siemens Westinghouse those amounts owed at the
time of termination.
Limitation of Liability
We agreed that the remedies provided in the maintenance services
agreement are exclusive and that under no circumstances must the total aggregate
liability of Siemens Westinghouse during a given year exceed 100% of the
contract price payable to Siemens Westinghouse for that given year under the
maintenance services agreement. We further agreed that under no circumstances
must the total aggregate liability of Siemens Westinghouse for liquidated
damages during a given year exceed a specified percentage of the contract price
payable to Siemens Westinghouse for that given year under the maintenance
services agreement. We further agreed that under no circumstances must the total
aggregate liability of Siemens Westinghouse exceed a specified percentage of the
contract price payable to Siemens Westinghouse under the maintenance services
agreement.
Force Majeure
Neither party will be liable for failure to perform any obligation or
delay in performance, excluding payment, to the extent the failure or delay is
caused by any act or event beyond the reasonable control of the affected party
or Siemens Westinghouse's suppliers so long as the act or event is not the fault
or the result of negligence of the affected party and the party has been unable
by exercise of reasonable diligence to overcome or mitigate the effects of the
act or event. Force majeure includes: any act of God; act of civil or military
authority; act of war whether declared or undeclared; act (including delay,
failure to act, or priority) of any governmental authority; civil disturbance;
insurrection or riot; sabotage; fire; inclement weather conditions; earthquake;
flood; strikes, work stoppages or other labor difficulties of a regional or
national character which are not limited to only the employees of Siemens
Westinghouse or its subcontractors or suppliers and which are not due to the
breach of an applicable labor contract by the party claiming force majeure;
embargo; fuel or energy shortage; delay or accident in shipping or
transportation to the extent attributable to another force majeure; changes in
laws which substantially prevents a party from complying with its obligations in
conformity with its requirements under the maintenance services agreement or
failure or delay beyond its reasonable control in obtaining necessary
manufacturing facilities, labor, or materials from usual sources to the extent
attributable to another force majeure; or failure of any principal contractor to
provide equipment to the extent attributable to another force majeure. Force
majeure does not include: (1) economic hardship, (2) changes in market
conditions or (3) except due to an event of force majeure, late delivery of
Program Parts or other Equipment.
If a delay in performance is excusable due to a force majeure, the date
of delivery or time for performance of the work will be extended by a period of
time reasonably necessary to overcome the effect of the force majeure and if the
force majeure lasts for a period longer than 30 days and the delay directly
increases Siemens Westinghouse's costs or expenses, we, after reviewing Siemens
Westinghouse's additional direct costs and expenses, will reimburse Siemens
Westinghouse for its reasonable additional direct costs and expenses incurred
after 30 days from the beginning of the force majeure resulting from the delay.
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Interconnection Agreement
We have entered into a Generation Facility Transmission Interconnection
Agreement, dated as of March 23, 1999, with Metropolitan Edison for the
installation, operation and maintenance of the facilities necessary to
interconnect our facility to the transmission system of Metropolitan Edison.
Under the interconnection agreement, we and Metropolitan Edison will construct,
own, operate and maintain the Interconnection Facilities. We will be responsible
for all of the costs of construction, operation and maintenance of the
Interconnection Facilities, including those owned by Metropolitan Edison.
Scope
The interconnection agreement will become effective on the effective
date established by FERC and will continue in full force and effect until a
mutually agreeable termination date not to exceed the retirement date for our
facility.
Metropolitan Edison's Obligations
Metropolitan Edison will install, own, operate and maintain, at our
cost and expense, a portion of the Interconnection Facilities, including, but
not limited to specific substation protective relaying equipment and a 230 kV
power circuit breaker. The facilities to be installed by Metropolitan Edison,
together with the facilities to be installed by us, are those necessary to allow
the interconnection of our facility with the transmission system of Metropolitan
Edison.
Metropolitan Edison is to complete the installation of the facilities
necessary to permit us to energize the switch yard and to begin commissioning of
our facility by June 30, 2000. If those facilities are completed prior to June
30, 2000, Metropolitan Edison will be paid an early completion bonus of $5,000
for each day of early completion up to and including 30 days (May 31, 2000). If
those facilities are completed after June 30, 2000, Metropolitan Edison will pay
delay damages of $5,000 for each day of delay up to and including 42 days
(August 11, 2000). We will also have the ability to take over the completion of
these facilities if it becomes apparent that Metropolitan Edison will not be
able to complete them within the 42-day period, Metropolitan Edison has not
proposed a reasonable recovery plan, and we can demonstrate that we are able to
complete the facilities more quickly than Metropolitan Edison.
Metropolitan Edison is to complete the installation of its portion of
the Interconnection Facilities and specific transmission system reinforcements
necessary to permit the dispatch of the full output of our facility by August
31, 2000.
Company's Obligations
We will install, own, operate and maintain a portion of the
Interconnection Facilities, including, but not limited to, a 230 kV switchyard,
including generator step up transformers, instrument transformers, revenue
metering, power circuit breakers, control and protective relay panels,
supervisory control and data acquisition equipment, and protective relaying
equipment.
We will reimburse Metropolitan Edison for its actual costs of
installing the Interconnection Facilities. Our payments to Metropolitan Edison
consist of an advance payment of $500,000 on the execution date of the
interconnection agreement, another payment of $40,000 within 30 days of the
execution date of the interconnection agreement (for work undertaken by
Metropolitan Edison prior to December 17, 1998), a payment of $1,000,000 at
financial closing and monthly invoices for the work performed.
We are obligated to modify our portion of the Interconnection
Facilities as may be required to conform to changes in good utility practice or
as required by PJM.
We are obligated to keep our facility insured against loss or damage in
accordance with the minimum coverages specified in the interconnection
agreement.
Operation and Maintenance of Interconnection Facilities
The parties are obligated to operate and maintain their respective
portions of the Interconnection Facilities in accordance with good utility
practices and the requirements and guidelines of PJM and Metropolitan Edison.
Metropolitan Edison will have the right to disconnect our facility from
its Transmission System and/or curtail, interrupt or reduce the output of our
facility when operation of our facility or the Interconnection Facilities
adversely affects the quality of service rendered by Metropolitan Edison or
interferes with the safe and reliable operation of its Transmission System or
the regional transmission system. Metropolitan Edison, however, is obligated to
use reasonable efforts to minimize any disconnection, curtailment, interruption
or reduction in output.
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In accordance with good utility practice, Metropolitan Edison may
remove the Interconnection Facilities from service as necessary to perform
maintenance or testing or to install or replace equipment on the Interconnection
Facilities or the Transmission System. Metropolitan Edison is obligated to use
due diligence to restore the Interconnection Facilities to service as promptly
as practicable.
In addition, if we fail to operate, maintain, administer, or insure our
facility or its portion of the Interconnection Facilities, Metropolitan Edison
may, following 30 days' notice and opportunity to cure the failure, disconnect
our facility from the Transmission System.
Force Majeure
If either party is delayed in or prevented from performing or carrying
out its obligations under the interconnection agreement by reason of force
majeure, the party will not be liable to the other party for or on account of
any loss, damage, injury or expense resulting from or arising out of the delay
or prevention so long as the party encountering the delay or prevention uses due
diligence to remove the cause or causes thereof.
Default
The events of default under the interconnection agreement are:
o breach of a material term or condition and uncured failure to
provide a required schedule, report or notice;
o failure or refusal of a party to permit the representatives
of the other party access to maintenance records, or its
Interconnection Facilities or Protective Apparatus;
o appointment by a court of a receiver or liquidator or trustee
that is not discharged within 60 days, issuance by a court of
a decree adjudicating a party as bankrupt or insolvent or
sequestering a substantial part of its property that has not
been discharged within 60 days after its entry, or filing of a
petition to declare a party bankrupt or to reorganize a party
under the Federal Bankruptcy Code or similar state statute
that has not been dismissed within 60 days;
o voluntary filing by a party of a petition in bankruptcy or
consent to the filing of a bankruptcy or reorganization
petition, an assignment for the benefit of creditors, an
admission by a party in writing of its inability to pay its
debts as they come due, or consent to the appointment of a
receiver, trustee, or liquidator of a party or any part of its
property; and
o failure to provide the other party with reasonable written
assurance of the party's ability to perform any of the
material duties and responsibilities under the interconnection
agreement within 60 days of a reasonable request for the
assurance.
Upon an event of default, the non-defaulting party may give notice of
the event of default to the defaulting party. The defaulting party will have 60
days following the receipt of the notice to cure the default or to commence in
good faith the steps necessary to cure a default that cannot be cured within
that 60-day period. If the defaulting party fails to cure its default within 60
days or fails to take the steps necessary to cure a default that cannot be cured
within a 60-day period, the non-defaulting party will have the right to
terminate the interconnection agreement.
Metropolitan Edison will have the right to operate and/or to purchase
specific equipment, facilities and appurtenances from us that are necessary for
Metropolitan Edison to operate and maintain its Transmission System if (1) we
commence bankruptcy proceedings or petitions for the appointment of a trustee or
other custodian, liquidator, or receiver, (2) a court issues a decree for relief
of us or appoints a trustee or other custodian, liquidator, or receiver for us
or a substantial part of our assets and the decree is not dismissed within 60
days or (3) we cease operation for 30 consecutive days without having an
assignee, successor, or transferee in place.
Operations Agreement
We have entered into a Development and Operations Services Agreement,
dated as of June 1, 1999, with AES Prescott by which AES Prescott will provide
development and construction management services and, after the commercial
operation date, operating and maintenance services for our facility for a period
of 27 years. Under the operations agreement, AES Prescott will be responsible
for, among other things, preparing plans and budgets related to start-up and
commercial operation of our facility, providing qualified operating personnel,
making repairs, purchasing consumables and spare parts (not otherwise provided
under the maintenance services agreement) and providing other services as needed
according to industry standards. AES Prescott will be compensated for the
services on a cost plus
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fixed-fee basis. Under the services agreement between AES Prescott and The AES
Corporation, The AES Corporation will provide to AES Prescott all of the
personnel and services necessary for AES Prescott to comply with its obligations
under the operations agreement.
Effluent Supply Agreement
We, as assignee of AES Ironwood, Inc., have entered into an Effluent
Supply Agreement, dated as of March 3, 1998, with the City of Lebanon Authority,
by which City of Lebanon Authority will provide effluent to be used by us at the
electric generating facility to be constructed in South Lebanon Township,
Pennsylvania.
Supply of Effluent
Effluent Supply
Subsequent to completion of the pipeline connecting our facility with
the wastewater treatment facility owned and operated by City of Lebanon
Authority and throughout the term of the effluent supply agreement, City of
Lebanon Authority must make available to us a supply of effluent not less than
2,160,000 gallons per day. In the event of a shortfall, we may elect to accept
potable water from City of Lebanon Authority in accordance with the effluent
supply agreement.
We will not be obligated to purchase any minimum amount of effluent and
will be entitled to seek and obtain water from other available sources. City of
Lebanon Authority must use its best efforts to comply with requests by us for
excess effluent, which must not exceed (1) 4,600,000 gallons per day or (2)
1,679,000,000 gallons per calendar year. In addition, City of Lebanon Authority
must use its best efforts to meet our minimum effluent requirements.
Compensation
We will pay City of Lebanon Authority monthly for all effluent
delivered to the point of delivery during the prior month. The base rate for
effluent supplied will be: (1) for 0-2,160,000 gallons per day, $0.29 per
thousand gallons and (2) for 2,160,000 or greater gallons per day, $0.21 per
thousand gallons, which rates will be subject to annual adjustments for
inflation.
Pipeline and Real Estate Rights
Concerning the Pipeline
We will be solely responsible, at its cost and expense, for
constructing and installing the pipeline.
We and City of Lebanon Authority must cooperate in good faith to obtain
the necessary real estate rights for constructing, operating, maintaining and
accessing the pipeline.
Operation and Maintenance
The City of Lebanon Authority must operate and maintain the pipeline in
accordance with the effluent supply agreement, and as compensation, we must pay
to City of Lebanon Authority $18,250 per year, which amount will be subject to
annual adjustment for inflation.
Capital Improvements
The effluent supply agreement provides for capital improvements.
Potable Water
The City of Lebanon Authority must make available to us on a continuous
basis a potable water supply of not less than 50 gallons per minute. We will not
be obligated to purchase a minimum amount of potable water, but must pay the
City of Lebanon Authority for potable water accepted at the potable delivery
point at the rate applicable to us described in City of Lebanon Authority's
applicable rate schedule.
Force Majeure
If either party is unable to carry out any obligation under the
effluent supply agreement due to force majeure, the effluent supply agreement
must remain in effect, but the obligation will be suspended for the period
necessary as a result of the force majeure so long as: (1) the non-performing
party gives the other party written notice not later than 48 hours after the
occurrence of the force majeure describing the particulars of the force majeure;
(2) the suspension of performance is of no greater scope and of longer duration
than is required by the force majeure; and (3) the non-
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performing party uses its best efforts to remedy its inability to perform.
Notwithstanding the preceding, the settlement of strikes, lockouts, and other
labor disputes will be entirely within the discretion of the affected party, and
the party will not be required to settle any strike, lockout or other labor
dispute on terms which it deems inadvisable.
Term
The term of the effluent supply agreement will be 25 years unless
terminated early as a result of (1) our inability to obtain financing for our
project; (2) our inability to obtain necessary approvals to construct and
operate our project; (3) failure by us to deliver the commencement notice by
December 31, 2004, or (4) the occurrence of any event of default.
Early Termination for Event of Default
A party may terminate the effluent supply agreement (1) upon a
bankruptcy event of the other party or (2) if the other party fails to perform
or observe any of its material obligations under the effluent supply agreement
within the time contemplated by the effluent supply agreement and the failure
continues for a period of time greater than 30 days from the defaulting party.
Pennsy Supply Agreements
We, as assignee of AES Ironwood, Inc., have entered into an Agreement
Relating to Real Estate, dated as of October 22, 1998, with Pennsy Supply, Inc.
under which Pennsy Supply has agreed to grant to us specific easements and the
right to pump water from Pennsy Supply-owned property. The easements, which are
primarily for access and utility purposes, would run from property owned by us,
on which it will develop and construct its electric generating facility, across
property owned by Pennsy Supply and require that our property be used as a power
plant. Pennsy Supply has also agreed to grant to us easements with respect to
storm-water facilities and construction of a rail spur. Pennsy Supply will make
water available to us during construction and testing of our facility and for as
long as we operate our facility. We will bear all costs and expenses with
respect to water-pumping. In consideration for the easements and the
water-pumping rights, we have agreed to convey to Pennsy Supply title to a
parcel of land adjacent to the property owned by us.
We have also entered into an Easement and Right of Access Agreement,
dated as of April 15, 1999, with Pennsy Supply under which Pennsy Supply has
granted us the rights and easements referred to in the prior paragraph as well
as specific other rights and easements required by us for the construction and
operation of our facility.
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ROLE OF THE INDEPENDENT ENGINEER
Stone & Webster will initially serve as the independent engineer in
accordance with the indenture.
Under a consulting services agreement with us, and in accordance with
the indenture, the independent engineer is responsible for confirming the
reasonableness of statements and projections made in specified certificates
required to be provided, including with respect to
o satisfaction of certain requirements under the construction
agreement;
o the cost of and occurrence of the completion of rebuilding,
repairing or restoring of our facility following an event of
loss;
o under specified circumstances, the calculation of debt service
coverage ratios and the consistency of assumptions made in
connection with the calculations;
o whether any termination, amendment or modification of any
project contract would reasonably be expected to have a
material adverse effect; and
o specified tests required for the issuance of additional debt.
The trustee may remove the independent engineer if at any time the
independent engineer becomes incapable of acting or is, or is reasonably likely
to be, adjudged bankrupt or insolvent or a receiver is appointed for, or any
public officer takes charge or control of, the independent engineer or its
property or its affairs for the purpose of rehabilitation, conservation or
liquidation, and must appoint a successor independent engineer. Within 30 days
of receipt by the trustee of a written notification from us to the effect that
the independent engineer has failed to carry out its obligations in a timely
manner, and in other circumstances, the trustee must remove the independent
engineer and appoint a successor independent engineer from those engineers then
listed on a schedule to the indenture. We will pay for all services performed by
the independent engineer and its reasonable costs and expenses related to the
services.
If we and the independent engineer are in dispute in respect of a
notice, plan, report, certificate or budget and we are unable to resolve the
dispute within seven days of the independent engineer expressing its
disagreement with the notice, plan, report, certificate or budget, a single
independent third-party engineer will be designated to consider and decide the
issues raised by the dispute. The selection of the third-party engineer will be
made from the list of engineers described below. We must designate the
third-party engineer from the list not later than the third day following the
expiration of the seven-day period described above and the designation will
become effective in three days. Within three days of the designation of a
third-party engineer, we and the independent engineer will submit to the
third-party engineer a notice setting forth in detail the person's position in
respect of the issues in dispute. The notice will include supporting
documentation, if appropriate.
The third-party engineer must complete all proceedings and issue his
decision with regard to the issues in dispute as promptly as reasonably
possible, but in any event within 10 days of the date on which he is designated
as third-party engineer, unless the third-party engineer reasonably determines
that additional time is required in order to give adequate consideration to the
issues raised. In that case the third-party engineer must state in writing his
reasons for believing that additional time is needed and must specify the
additional period required, which period must not exceed 10 days without our
agreement.
If the third-party engineer determines that the position described in
the independent engineer's notice is correct, it must so state and must state
the corrective actions to be taken by us. In that case, we must promptly take
the corrective actions. We must thereafter bear all costs which may arise from
actions taken under the third-party engineer's decision. If the third-party
engineer determines that the position described in the independent engineer's
notice is not correct, it must so state and must state the appropriate actions
to be taken by us. In that case, we must take the appropriate actions and for
purposes of the indenture, the independent engineer and the trustee will be
deemed to have approved, confirmed, concurred in or consented to the notice,
plan, report, certificate or budget in dispute. The decision of the third-party
engineer will be final and non-appealable. We will bear all reasonable costs
incurred by the third-party engineer in connection with this dispute resolution
mechanism.
The third-party engineer will be chosen from the list of qualified
engineers described in a schedule to the indenture. The list will also be used
by the trustee to choose a successor independent engineer. At any time either we
or the trustee may remove a particular engineer from the list by obtaining the
other person's reasonable consent to the
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removal. However, neither we nor the trustee may remove a name or names from the
list if the removal would leave the list without at least two names, unless, at
the same time, we and the trustee reasonably agree to the addition of one or
more names to the list. During January of each year, we and the independent
engineer will review the current list of third-party engineers and give notice
to the trustee of any proposed additions to the list and any intended deletions.
Intended deletions will automatically become effective 30 days after the trustee
received notice unless the trustee makes a written objection within 30 days and
so long as the deletions do not leave the list fewer than two names. Proposed
additions to the list will automatically become effective 30 days after the
trustee received notice unless the trustee makes a written objection within 30
days. We may add a new name or names to the list of third-party engineers at any
time so long as no person will be added to the list or authorized to act as
third-party engineer unless the person is a competent firm of professional
engineers or consultants with a national reputation.
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DESCRIPTION OF THE NEW BONDS
General
We will issue new bonds under the indenture, dated as of June 25, 1999,
between us and the trustee. This is the same indenture under which the old bonds
were issued. We summarize below certain provisions of the indenture, but do not
restate the indenture in its entirety. We urge you to read the indenture because
it, and not this description, defines your rights as a holder of the notes.
Copies of the indenture and the other financing documents are available for
inspection during normal business hours at the offices of the trustee. The new
bonds will be issued in fully registered form without coupons and in
denominations of $100,000 and any integral multiple of $1,000 in excess thereof.
The indenture permits us to issue new bonds and any future senior
secured indebtedness under a supplemental indenture as may be authorized from
time to time in accordance with the indenture. We may also issue, subject to the
indenture, any other series of debt issued under the indenture through a
supplemental indenture on terms we established. See "SUMMARY OF PRINCIPAL
FINANCING DOCUMENTS--Indenture--Supplemental Indentures."
The new bonds will be direct obligations of ours and will be secured by
the collateral to the same extent as the old bonds.
Principal Amount, Interest Rate and Stated Maturity
We will issue the new bonds in the aggregate principal amount of
$308,500,000. The new bonds will bear interest at the rate per annum described
on the cover of this prospectus and have a final maturity date of November 30,
2025.
Payment of Interest and Principal
We will pay interest on the bonds every three months, on each February
28, May 31, August 31 and November 30, commencing August 31, 1999, to the
registered owners on the immediately preceding record date, as that information
appears on our books and records.
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We will pay principal on the new bonds in installments semiannually on
each February 28, May 31, August 31 and November 30, commencing February 28,
2002, to the registered owners on the immediately preceding record date as
follows:
PERCENTAGE OF ORIGINAL PRINCIPAL AMOUNT PAYABLE
YEAR FEBRUARY 28 MAY 31 AUGUST 31 NOVEMBER 30 ANNUAL TOTAL
- ---- ----------- ------ --------- ----------- ------------
2002 0.1600% 0.1600% 0.1600% 0.1600% 0.6400%
2003 0.3850% 0.3850% 0.3850% 0.3850% 1.5400%
2004 0.5150% 0.5150% 0.5150% 0.5150% 2.0600%
2005 0.5700% 0.5700% 0.5700% 0.5700% 2.2800%
2006 0.5800% 0.5800% 0.5800% 0.5800% 2.3200%
2007 0.7400% 0.7400% 0.7400% 0.7400% 2.9600%
2008 0.9200% 0.9200% 0.9200% 0.9200% 3.6800%
2009 0.7800% 0.7800% 0.7800% 0.7800% 3.1200%
2010 0.8150% 0.8150% 0.8150% 0.8150% 3.2600%
2011 1.0300% 1.0300% 1.0300% 1.0300% 4.1200%
2012 0.7600% 0.7600% 0.7600% 0.7600% 3.0400%
2013 0.9600% 0.9600% 0.9600% 0.9600% 3.8400%
2014 1.2900% 1.2900% 1.2900% 1.2900% 5.1600%
2015 1.2400% 1.2400% 1.2400% 1.2400% 4.9600%
2016 1.3550% 1.3550% 1.3550% 1.3550% 5.4200%
2017 1.4650% 1.4650% 1.4650% 1.4650% 5.8600%
2018 1.0100% 1.0100% 1.0100% 1.0100% 4.0400%
2019 1.2050% 1.2050% 1.2050% 1.2050% 4.8200%
2020 1.6250% 1.6250% 1.6250% 1.6250% 6.5000%
2021 1.6500% 1.6500% 1.2000% 1.2000% 5.7000%
2022 1.3900% 1.3900% 1.3900% 1.3900% 5.5600%
2023 1.5000% 1.5000% 1.5000% 1.5000% 6.0000%
2024 1.5500% 1.5500% 1.5500% 1.5500% 6.2000%
2025 1.7300% 1.7300% 1.7300% 1.7300% 6.9200%
=======
100%
At our direction the trustee must round principal amounts to be
redeemed to the nearest $1,000.
Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months and, for any period shorter than a full month, on the basis
of the actual number of days elapsed. Interest on the new bonds will accrue from
the most recent date to which interest has been paid on the old bonds.
Payment and Paying Agents
Principal, make-whole premium, if any, and interest in respect of the
new bonds will be payable at the office of the paying agent in the County of New
York, The City of New York. The trustee will serve as the principal paying agent
and transfer agent. The new bonds may be presented for payment of principal at
the office of any paying agent. Payments in respect of principal of the new
bonds will be made only against surrender of the new bonds. Payment in respect
of interest on any interest payment date with respect to any new bond will be
made to the person in whose name the new bond is registered on February 1, May
1, August 1 and November 1, each date a "regular record date", as the case may
be, immediately preceding the interest payment date, except that interest
payable at maturity will be payable to the person to whom the principal of the
new bond is paid. All payments of principal and interest with respect to
certificated new bonds, if any, will be made by dollar check drawn on a bank in
The City of New York or, for bondholders of at least U.S.$1,000,000 in aggregate
principal amount of bonds, by wire transfer to a dollar account maintained by
the payee with a bank in The City of New York so long as a written request from
the bondholder to that effect designating the account is received by the trustee
or the paying agent no later than the regular record date immediately preceding
the interest payment date. Unless the designation is revoked, any designation
made by the
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bondholder with respect to the certificated bonds will remain in effect with
respect to any future payments with respect to the certificated bonds payable to
the bondholder. Payments with respect to global bonds will be made to DTC or its
nominee, as bondholder, under DTC's rules, regulations and procedures.
If any payment in respect of a new bond is due on a day that is, at any
place of payment, not a business day, the bondholder will not be entitled to
payment of the amount due until the next succeeding business day at the place of
payment and will not be entitled to any further interest or other payment in
respect of any delay.
The indenture provides that any money paid by us to the trustee for any
payment with respect to the new bonds that remains unclaimed for two years will
be repaid to us, and thereafter the bondholder will look only to us for payments
thereof as an unsecured creditor, and we will not be liable to pay any taxes or
other duties in connection with the payment. Unless otherwise provided by
applicable law, the right to receive payment of principal and interest on any
new bond, whether at maturity, redemption or otherwise, will become void at the
end of five years from the relevant date thereof, or the shorter period as may
be prescribed by applicable law.
Subject to specific limitations described in the indenture, we reserve
the right at any time to vary or terminate the appointment of the securities
registrar or any paying agent or transfer agent with or without cause, upon
giving 30 days' written notice to the securities registrar, the paying agent or
transfer agent, as the case may be, and the trustee, and to appoint another
securities registrar or additional or other paying agents or transfer agents and
to approve any change in the specified offices through which any paying agent or
transfer agent acts so long as we will at all times maintain a securities
registrar, paying agent and transfer agent in the County of New York, The City
of New York.
Optional Redemption
We may redeem all of the new bonds of each series, in whole or in part,
at our option at any time, at a redemption price equal to the outstanding
principal amount plus accrued and unpaid interest to the redemption date,
together with the applicable make-whole premium.
Mandatory Redemption
Event of Loss and Event of Eminent Domain
If either an event of loss or an event of eminent domain occurs, as
soon as reasonably practicable but no later than the date of receipt by us or
the collateral agent of casualty proceeds or eminent domain proceeds, as the
case may be, we must make a reasonable good faith determination as to whether
(1) our facility or any portion can be rebuilt, repaired or restored to permit
operation on a commercially feasible basis and (2) the casualty proceeds or the
eminent domain proceeds, as the case may be, together with any other amounts
that are available to us for the rebuilding, repair or restoration are
sufficient to permit the rebuilding, repair or restoration of our facility or a
portion thereof. Our determination must be evidenced by a certificate as to
redemption filed with the collateral agent which, if we determine that our
facility or a portion thereof can be rebuilt, repaired or restored to permit
operation on a commercially feasible basis and that the casualty proceeds or the
eminent domain proceeds, as the case may be, together with any other amounts
that are available to us for the rebuilding, repair or restoration, are
sufficient, must also describe a reasonable good faith estimate by us of the
total cost of the rebuilding, repair or restoration. We must deliver to the
collateral agent at the time it delivers the certificate as to redemption a
certificate of the independent engineer, dated the date of the certificate as to
redemption, confirming that, based upon reasonable investigation and review of
the determination made by us, the independent engineer believes the
determination and the estimate of the total cost, if any, described in the
certificate as to redemption to be reasonable.
We must redeem all of the new bonds upon an event of loss or an event
of eminent domain:
o in whole, at a redemption price equal to 100% of the principal
amount together with any accrued and unpaid interest through
the redemption date, within 90 days after receipt by the
trustee of casualty proceeds or eminent domain proceeds if our
facility is substantially destroyed and cannot be rebuilt,
repaired or restored to permit operation on a commercially
feasible basis or an event of eminent domain has occurred and
our facility cannot be operated on a commercially feasible
basis, as the case may be. Our obligation to redeem the bonds
upon an event of loss or an event of eminent domain under the
preceding circumstances is not limited to the casualty
proceeds or eminent domain proceeds actually received; or
o in part, at a redemption price equal to 100% of the principal
amount together with any accrued and unpaid interest through
the redemption date, within 90 days after receipt by the
trustee of casualty proceeds or eminent domain proceeds if a
portion of our facility is destroyed or taken but our facility
can be rebuilt, repaired or
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restored to permit operation on a commercially feasible basis.
The aggregate amount of the new bonds to be redeemed under
this paragraph will equal the amount received by the trustee
in accordance with the applicable provision of the collateral
agency agreement. The new bonds, however, must not be subject
to mandatory redemption when the proceeds not used for
rebuilding, repair or restoration do not exceed $5 million and
we certify to the trustee, which certification is confirmed by
the independent engineer, that (1) the proceeds are not needed
for rebuilding, repair or restoration of our facility or (2)
not using the proceeds for the rebuilding, repair or
restoration of our facility would not reasonably be expected
to result in a material adverse effect.
Any eminent domain proceeds and casualty proceeds received by the
trustee under the two preceding paragraphs must be deposited in the redemption
subaccount.
Upon Receipt of Performance Liquidated Damages Under the Construction
Agreement
If we receive performance liquidated damages under the construction
agreement, we must, as soon as reasonably practicable, make a reasonable good
faith determination as to whether:
o it is technically feasible to modify, repair or replace any
portion of our facility in order to remedy the circumstances
giving rise to the obligation of Siemens Westinghouse to pay
the performance liquidated damages;
o the performance liquidated damages, together with any other
amounts that are available to us for the modification, repair
or replacement, are sufficient to permit the modification,
repair or replacement, including the making of all required
payments of interest and principal on our indebtedness during
the modification, repair or replacement;
o the projected average senior debt service coverage ratio,
after giving effect to the modification, repair or replacement
and the application of the performance liquidated damages to
accomplish the same, during the power purchase agreement term
(taken as one period) and the post-power purchase agreement
period (taken as one period) would be equal to or greater than
the projected average senior debt service coverage ratio
described in the base case projections for each period
included in this prospectus; and
o the projected minimum senior debt service coverage ratio,
after giving effect to the modification, repair or replacement
and the application of the performance liquidated damages to
accomplish the same, during the power purchase agreement term
and the post-power purchase agreement period would be equal to
or greater than the projected minimum senior debt service
coverage ratio described in the base case projections for each
period included in this prospectus.
Our determination must be evidenced by an officer's certificate, together with
supporting detail as the collateral agent or the independent engineer may
reasonably request, filed with the collateral agent which, if we determine that
the portion of our facility can be modified, repaired or replaced and that the
other statements described above are true, must also describe our reasonable
good faith estimate of the total cost of the modification, repair or
replacement. We must deliver to the collateral agent at the time we deliver the
officer's certificate referred to above a certificate of the independent
engineer, dated the date of the officer's certificate, stating that, based upon
reasonable investigation and review of the determinations, assumptions,
conclusions and estimates of costs made by us, the independent engineer believes
the determinations, assumptions, conclusions and estimates of costs described in
the officer's certificate are reasonable.
If the requirements of the preceding paragraph are satisfied, the
collateral agent must apply the amounts received from Siemens Westinghouse to
the payment, or reimbursement to the extent the same have been paid or satisfied
by us, of the costs of modification, repair and replacement of that portion of
our facility that requires modification, repair or replacement in order to
remedy the circumstances giving rise to the obligation of Siemens Westinghouse
to pay the performance liquidated damages. Upon receipt of an officer's
certificate from us, confirmed by the independent engineer, certifying that
o all modifications, repairs or replacements of that portion of
our facility that requires modification, repair or replacement
in order to remedy the circumstances giving rise to the
obligation of Siemens Westinghouse to pay performance
liquidated damages have been completed and
o the projected debt service coverage ratio tests referred to in
the immediately preceding paragraph continue to be met,
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the collateral agent must transfer all remaining proceeds of the performance
liquidated damages to us or to whomever we in writing direct.
If the requirements of the preceding paragraph are not satisfied, then
we must redeem the new bonds.
Any performance liquidated damages under the construction agreement
received by the trustee under the preceding paragraph must be deposited in the
redemption subaccount.
Upon Receipt of Proceeds Under the Guaranty by The Williams Companies, Inc.
If the power purchase agreement is terminated as a result of an event
of default by Williams Energy and we receive proceeds under the guaranty
provided by The Williams Companies, Inc. in respect thereof, we must redeem the
new bonds, in whole or in part, at a redemption price equal to 100% of the
principal amount together with any accrued and unpaid interest to the redemption
date, as soon as reasonably practicable, but in any event within 90 days of the
receipt of the proceeds. After the payment of specific administrative fees, the
aggregate amount of the new bonds to be redeemed under this paragraph, including
accrued and unpaid interest, will equal an amount which is equal to the amount
paid under the guaranty provided by The Williams Companies, Inc. multiplied by a
fraction the numerator of which is the then outstanding principal amount of the
new bonds and accrued and unpaid interest and the denominator of which is the
principal of and accrued and unpaid interest on all senior debt including the
new bonds.
Ratings
The new bonds are expected to be rated "BBB-" by Standard & Poor's and
"Baa3" by Moody's. The ratings reflect only the views of the rating agencies at
the time the rating is issued, and any explanation of the significance of the
ratings may only be obtained from the rating agency. There is no assurance that
the ratings will remain in effect for any given period of time or that the
ratings will not be lowered, suspended or withdrawn entirely by the rating
agency, if, in the rating agency's judgment, circumstances so warrant. Any
lowering, suspension or withdrawal of any rating may have an adverse effect on
the market price or marketability of the new bonds.
Book-Entry, Delivery and Form
The new bonds will initially be represented by one or more permanent
global bonds in definitive, fully registered book-entry form that will be
registered in the name of Cede & Co., the global bond holder, as nominee of DTC.
The global bonds will be deposited on behalf of the acquirors of the new bonds
represented thereby with a custodian for DTC for credit to the respective
accounts of the acquirors or to the other accounts as they may direct at DTC.
See "THE EXCHANGE OFFER--Procedures for Tendering--Book-Entry Transfer."
The Global Bonds
We expect that under procedures established by DTC:
o upon deposit of the global bonds with DTC or its custodian,
DTC will credit on its internal system portions of the global
bonds that must be comprised of the corresponding respective
amounts of the global bonds to the respective accounts of
persons who have accounts with the depositary; and
o ownership of the bonds will be shown on, and the transfer of
ownership thereof will be effected only through, records
maintained by DTC or its nominee, with respect to interests of
persons, or "participants," who have accounts with DTC , and
the records of participants, with respect to interests of
persons other than participants.
So long as DTC or its nominee is the registered owner or holder of any
of the bonds, DTC or the nominee will be considered the sole owner or holder of
the bonds represented by the global bonds for all purposes under the indenture
and under the bonds represented thereby. No beneficial owner of an interest in
the global bonds will be able to transfer the interest except in accordance with
the applicable procedures of DTC in addition to those provided for under the
indenture.
Payments on the bonds represented by the global bonds will be made to
DTC or its nominee, as the case may be, as the registered owner of the global
bonds. Neither we, the trustee nor any paying agent under the indenture will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in the global
bonds or for maintaining, supervising or reviewing any records relating to the
beneficial ownership interest.
We expect that DTC or its nominee, upon receipt of any payment on the
bonds represented by the global bonds, will credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the
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global bonds as shown in the records of DTC or its nominee. We also expect that
payments by participants to owners of beneficial interests in the global bonds
held through the participants will be governed by standing instructions and
customary practice as is now the case with securities held for the accounts of
customers registered in the names of nominees for the customers. The payment
will be the responsibility of the participants.
Transfers between participants in DTC will be effected in accordance
with DTC rules and will be settled in immediately available funds.
DTC has advised us that it will take any action permitted to be taken
by a holder of bonds, including the presentation of bonds for exchange as
described below, only at the direction of one or more participants to whose
account the DTC interests in the global bonds are credited and only in respect
of the aggregate principal amount as to which the participant or participants
has or have given the direction. However, if there is an event of default under
the indenture, DTC will exchange the global bonds for certificated securities
that it will distribute to its participants.
DTC has advised us as follows:
o DTC is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning
of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency"
registered under the provisions of Section 17A of the Exchange
Act;
o DTC holds securities that its participants deposit with DTC
and facilitates the settlement among participants of
securities transactions, the as transfers and pledges, in
deposited securities through electronic computerized
book-entry changes in participants' accounts, thereby
eliminating the need for physical movement of securities
certificates;
o Direct participants include securities brokers and dealers,
banks, trust companies, clearing corporations and other
organizations;
o DTC is owned by a number of its participants and by the New
York Stock Exchange, Inc., the American Stock Exchange, Inc.
and the National Association of Securities Dealers, Inc.;
o Access to the DTC system is also available to others the as
securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a
direct participant, either directly or indirectly; and
o The rules applicable to DTC and its participants are on file
with the SEC.
Although DTC is expected to follow these procedures in order to
facilitate transfers of interests in the global bonds among participants of DTC,
it is under no obligation to perform the procedures, and the procedures may be
discontinued at any time. Neither we nor the trustee will have any
responsibility for the performance by DTC or its direct or indirect participants
of their respective obligations under the rules and procedures governing their
operations.
Certificated Securities
As of the date of this prospectus, all of the interests in old bonds
are in book-entry form. It is not expected that any old bonds will be in
registered certificated form at the time of the exchange. It is expected that
all old bonds before the exchange, and all bonds outstanding after the exchange,
will be represented by global certificates for bonds in bearer form held by The
Bank of New York as depositary and that DTC will have a book-entry interest in
those bonds. Beneficial interests in those bonds will be held through
participants in DTC acting as securities intermediaries. Therefore, references
in this section to bonds are references to beneficial interests in the bonds in
book-entry form except where the discussion is explicitly about certificated
bonds, and references to owners are to owners of those beneficial interests.
Interests in the global bonds will be exchanged for certificated
securities if:
o DTC or any successor depositary notifies us that it is
unwilling or unable to continue as depositary for the global
bonds, or DTC ceases to become a "clearing agency" registered
under the Exchange Act, and a successor depositary is not
appointed by us within 90 days;
o an event of default has occurred and is continuing with
respect to the bonds and the registrar has received a request
from DTC or any successor depository to issue certificated
securities within 30 days of the request; or
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o we determine not to have the bonds represented by global
bonds.
Upon the occurrence of any of the events described in the preceding
sentence, we will cause the appropriate certificates securities to be delivered.
Neither we nor the trustee will be liable for any delay by DTC or any successor
depository or its nominee in identifying the beneficial owners of the related
bonds. Each person may conclusively rely on instructions from DTC or any
successor depository or the nominee for all purposes, including the registration
and delivery and the respective principal amounts, of the new bonds to be
issued.
Owners of old bonds should instruct the brokers, dealers, commercial
banks or trust companies with whom they have securities accounts or their
nominees to tender for them. Exchanges by owners will be represented by an
exchange of global certificates for old bonds held by the depositary for global
certificates for new bonds. If fewer than all old bonds are tendered for
exchange, the depositary will hold separate global certificates for bonds
representing the appropriate aggregate amounts of remaining old bonds and of new
bonds.
Same-Day Settlement and Payment
The indenture requires that payments in respect of the bonds
represented by the global bonds, including principal, premium, if any, and
interest, be made by wire transfer of immediately available funds to the
accounts specified by the global bond holder. With respect to certificated
bonds, if any, we will make all payments of principal, premium, if any, and
interest by wire transfer of immediately available funds to the accounts
specified by the holders thereof or, if no account is specified, by mailing a
check to each holder's registered address. Secondary trading in long-term bonds
and debentures of corporate issues is generally settled in clearinghouse or
next-day funds. In contrast, bonds represented by the global bonds are expected
to be eligible to trade in the PORTAL market and to trade in DTC's Same-Day
Funds Settlement System, and any permitted secondary market trading activity in
the bonds will, therefore, be required by DTC to be settled in immediately
available funds. We expect that secondary trading in the certificated bonds will
also be settled in immediately available funds.
Because of time zone differences, the securities account of a Euroclear
or Cedel participant purchasing an interest in global bonds from a participant
in DTC will be credited, and any crediting will be reported to the relevant
Euroclear or Cedel participant, during the securities settlement processing day,
which must be a business day for Euroclear or Cedel, immediately following the
settlement date of DTC. DTC has advised us that cash received in Euroclear or
Cedel as a result of sales of interests in a global bond by or through a
Euroclear or Cedel participant to a participant in DTC will be received with
value on the settlement date of DTC but will be available in the relevant
Euroclear or Cedel cash account only as of the business day for Euroclear or
Cedel following DTC's settlement date.
Year 2000
DTC management is aware that some computer applications, systems, and
the like for processing data that are dependent upon calendar dates, including
dates before, on, and after January 1, 2000, may encounter "Year 2000 problems."
DTC has informed its participants and other members of the financial community
that it has developed and is implementing a program so that its systems, as the
same relate to the timely payment of distributions, including principal and
income payments, to securityholders, book-entry deliveries, and settlement of
trades within DTC, continue to function appropriately. This program includes a
technical assessment and a remediation plan, each of which is complete.
Additionally, DTC's plan includes a testing phase which is expected to be
completed within approximate time frames.
However, DTC's ability to perform property its services is also
dependent upon other parties, including but not limited to issuers and their
agents, as well as third-party vendors from whom DTC licenses software and
hardware, and third-party vendors on whom DTC relies for information or the
provision of services, including, telecommunication and electrical utility
service providers, among others. DTC has informed the financial community that
it is contacting, and will continue to contact, third-party vendors from whom
DTC acquires services to: (1) impress upon them the importance of the services
being Year 2000 compliant and (2) determine the extent of their efforts for Year
2000 remediation, and as appropriate, testing, of their services. In addition,
DTC is in the process of developing the contingency plans as it deems
appropriate.
Limited Recourse Nature of the New Bonds
All obligations in connection with the new bonds are solely of our
obligations. The bondholders must have recourse only to us and the collateral
for repayment of the new bonds. No holder of ownership interests in our company
or any other affiliate of ours or any of their respective incorporators,
stockholders, directors, officers or employees has or will guarantee the payment
of the new bonds. The bondholders must have no claim against or recourse to the
holders of
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the ownership interests in our company or any other affiliate of ours or their
respective incorporators, stockholders, directors, officers or employees by
operation of law or otherwise for the repayment of the new bonds.
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SUMMARY OF PRINCIPAL FINANCING DOCUMENTS
The following summaries contain the material terms of the principal
financing documents. All capitalized terms used in the following and not
otherwise defined in this prospectus have the meanings given to them in Annex A
to this prospectus.
Indenture
Accounts
Indenture Accounts
The following accounts have been established by the trustee: the bond
payment account, including the interest payment subaccount, the principal
payment subaccount and the redemption subaccount, and the construction interest
account. All amounts from time to time held in each indenture account must be
held in the name of the trustee subject to the lien and security interest
granted under the indenture and in the custody of the depositary bank on behalf
of the trustee.
Bond Payment Account
The trustee must deposit (1) all funds received by it for the payment
of interest on the bonds into the interest payment subaccount of the bond
payment account for disbursement in accordance with the indenture and (2) all
funds received by it for the payment of principal on the bonds, including any
funds transferred from the redemption subaccount of the bond payment account,
into the principal payment subaccount of the bond payment account for
disbursement in accordance with the indenture.
Construction Interest Account
The trustee must deposit all funds received by it for the payment of
interest on the bonds from and including the date of original issuance of the
bonds then outstanding to and through the commercial operation date into the
construction interest account. The trustee will disburse from the construction
interest account the amount required to pay interest on the bonds when due,
whether on an interest payment date or upon call for redemption or by
acceleration or otherwise. On the commercial operation date and upon our
delivery to the collateral agent and the trustee of a commercial operation
certificate, the trustee must transfer all funds remaining in the construction
interest account to the bond payment account for deposit in the interest payment
subaccount.
Interest Payment Subaccount, Principal Payment Subaccount and Redemption
Subaccount
o The trustee is authorized and directed to disburse from the interest
payment subaccount, the amount required to pay interest on the bonds when due,
whether on an interest payment date or upon call for redemption or by
acceleration or otherwise.
o The trustee is authorized and directed to disburse from the principal
payment subaccount, the amount required to pay principal on the bonds when due,
whether on a principal payment date or upon call for redemption or by
acceleration or otherwise.
o The trustee is authorized and directed to disburse funds from the
redemption subaccount, when amounts on deposit therein equal or exceed
$5,000,000, for the redemption of bonds in accordance with the indenture. The
preceding notwithstanding, the trustee must transfer funds remaining in the
redemption subaccount for more than one year and not applied to the redemption
of bonds under the indenture to the principal payment subaccount for application
by the trustee in accordance with the indenture.
Affirmative Covenants
We have made the following affirmative covenants in the indenture:
Payment of Principal, Premium, if any, and Interest
We must punctually pay, or cause to be paid, the principal of, any
premium, and interest on, and all other amounts payable in respect of, the bonds
in accordance with their terms and the terms of the indenture and of the related
series supplemental indenture.
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Reporting Requirements
We must furnish to the senior creditors:
(1) as soon as practicable and in any event within 60 days after the
end of the first, second and third quarterly accounting periods of each fiscal
year, commencing with the quarter ending September 30, 1999, an unaudited
balance sheet as of the last day of the quarterly period and the related
statements of income and cash flows, and reports of all dividends and other
distributions paid to owners during the quarterly period prepared in accordance
with GAAP and, in the case of second and third quarterly periods, for the
portion of the fiscal year ending with the last day of the quarterly period;
(2) as soon as practicable and in any event within 120 days after the
end of each fiscal year, commencing with the fiscal year ended December 31,
1999, a balance sheet as of the end of the year and the related statements of
income and cash flow during the year;
(3) at the time of the delivery of the financial statements provided
for in clauses (1) and (2) above, an officer's certificate to the effect that,
to the best of the officer's knowledge, (a) we are in compliance with all of our
material obligations under the terms of the transaction documents the
non-performance of which has resulted or could reasonably be expected to result
in a material adverse effect and (b) to the best of the officer's knowledge, no
default or event of default has occurred and is continuing to occur or, if any
default or event of default has occurred and is continuing to occur, specifying
the extent of the default and what action we are taking or propose to take; and
(4) each of the following items:
o written notice of the occurrence of any event or condition which
constitutes an event of default and an officer's certificate, setting forth the
details of the default or condition and the action which we are taking or
propose to take promptly after we obtain actual knowledge of the occurrence;
o written notice of the occurrence of any event of eminent domain or
any event of loss and an officer's certificate, setting forth the details and
the action which we are taking or propose to take promptly after we obtain
actual knowledge of the occurrence; and
o until the occurrence of the commercial operation date, within 45 days
after the end of each fiscal quarter, starting with our quarter ending September
30, 1999, a quarterly construction report describing the progress of our
facility's construction and expenditure of funds;
(5) we must furnish or cause to be furnished to the senior creditors no
later than six months prior to the expiration of the term of the power purchase
agreement an independent forecast prepared by an independent consultant which
sets forth projections of (a) electricity prices for the PJM power pool market
(or if the market no longer exists at the time, any successor market or
substitute market as determined in good faith by us which approximates, to the
extent practicable, the region) and (b) gas prices on a delivered basis to our
facility, in each case on at least an annual basis through the final maturity
date for the bonds. We, however, should not be required to provide the
independent forecast if:
o we enter into a replacement power purchase agreement,
effective as of the expiration of the power purchase agreement
and extending to at least the final maturity date for the
bonds,
o the projected senior debt service coverage ratio through the
final maturity date for the bonds, based on the provisions of
the replacement power purchase agreement are greater than 2.0
to 1 and
o the senior unsecured long term debt of the power purchaser(s)
under the agreement(s) is rated at least investment grade;
(6) upon the request of any bondholder, or the trustee on behalf of a
holder of a beneficial interest in the bonds, we must furnish the information
specified in paragraph (d)(4) of Rule 144A to the bondholder, and holders of
beneficial interests in the bonds, to a prospective purchaser of the bonds, and
prospective purchasers of beneficial interests in the bonds, who is a Qualified
Institutional Buyer or Institutional Accredited Investor or to the trustee for
delivery to the bondholder or prospective purchaser of the bonds, as the case
may be, unless, at the time of the request, we are subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act;
(7) all information provided to the senior creditors under clauses (1),
(2), (3) and (4) above must also be provided by the trustee (a) to the
bondholders and (b) to holders of beneficial interests in the bonds or
prospective
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purchasers of the bonds or beneficial interests in the bonds upon written
request to the trustee, which may be a single continuing request. We must
furnish the trustee, upon its request, with sufficient copies of all the
information to accommodate the requests of the holders of beneficial interests
in the bonds; and
(8) the information specified in paragraphs (1), (2), (3), (4) and (5)
above must be provided to each rating agency concurrently with its delivery to
the senior creditors.
Insurance Report
Insurance
We must maintain or cause to be maintained in accordance with the terms
of the indenture the following insurance coverages: (1) during construction of
our facility, builder's risk, delayed start-up, comprehensive general liability,
workers' compensation and employer's liability, automobile liability and
umbrella liability; and (2) subsequent to transfer of care, custody and control
of the facility to us, all risk property and boiler and machinery insurance,
business interruption, comprehensive general liability, workers' compensation
and employer's liability, automobile liability and umbrella liability. All
policies of insurance except workers' compensation and automobile liability
policies must name the collateral agent and Williams Energy as additional
insureds. If at any time any of the required insurance is no longer be available
on commercially reasonable terms, as confirmed by the independent insurance
adviser, we must procure substitute insurance coverage reasonably satisfactory
to the independent insurance advisor that is the most equivalent to the required
coverage and that is available on commercially reasonable terms.
Maintenance of Existence, Liens and Governmental Approvals
We must at all times:
o preserve and maintain in full force and effect (1) its existence as a
limited liability company and its good standing under the laws of the State of
Delaware and (2) its qualification to do business in each other jurisdiction in
which the character of the properties owned or leased by it or in which the
transaction of its business as conducted or proposed to be conducted makes the
qualification necessary;
o obtain and maintain in full force and effect all governmental
approvals, including maintaining compliance with environmental laws, and other
consents and approvals required at any time in connection with the construction,
maintenance, ownership or operation of our facility;
o preserve and maintain good and marketable title to its properties and
assets, subject to no liens other than permitted liens; and
o preserve and maintain liens of the senior creditors on the
collateral.
Operating and Maintenance
We must, or must cause the operator to, use, maintain and operate our
facility and the facility site in compliance with generally accepted prudent
operating and maintenance practices and the material provisions of all relevant
project contracts.
Compliance with Applicable Laws
We must comply with, and must ensure that our facility is constructed
and operated in compliance with, and must make alterations to our facility and
the facility site as may be required for compliance with, all applicable laws,
environmental laws and governmental approvals, except where noncompliance would
not reasonably be expected to result in a material adverse effect.
Project Contracts; Guaranty by The Williams Companies, Inc.; Operation of our
Facility
We must (1) perform and observe in all material respects our covenants
and agreements contained in any of our project contracts, (2) enforce, defend
and protect all of our rights contained in any of our project contracts and (3)
take all reasonable and necessary actions to prevent the termination or
cancellation of any of our project contracts, except in case of (1) and (2)
above, where the non-performance could not reasonably be expected to have a
material adverse effect.
We (1) will fully enforce our rights under the guaranty provided by The
Williams Companies, Inc. and the power purchase agreement with respect to
substitute security under the circumstances provided for therein and (2) will
not, without the consent of bondholders holding a majority in outstanding
principal amount of the bonds, make a demand
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for or take any legal action under the guaranty provided by The Williams
Companies, Inc. if, as a result of payments made under the demand or legal
action by us, the aggregate amount available under the guaranty provided by The
Williams Companies, Inc. would be less than or equal to the principal amount of
the then outstanding senior debt, including the undrawn portions of the maximum
amounts of any debt service reserve letter of credit or construction period
letter of credit. We will (1) upon any payment event of default or other event
of default under the power purchase agreement, exercise our rights to terminate
the power purchase agreement in accordance with its terms, (2) if of any
termination of the power purchase agreement, fully enforce its rights under the
guaranty provided by The Williams Companies, Inc. and (3) use any amounts
obtained under the guaranty provided by The Williams Companies, Inc. to redeem
the bonds in accordance with the indenture and to pay principal and interest on
our other senior debt in accordance with the financing documents and in each
case in accordance with the collateral agency agreement.
We will (1) exercise all of our rights under the operations agreement
to terminate the agreement if (a) a bankruptcy event in respect of the operator
has occurred and is continuing and (b) the operator has failed to perform any
material obligation under the operations agreement and (2) exercise our rights
under the operations agreement to cause the operator to terminate the services
agreement under the terms of that agreement if (a) a bankruptcy event in respect
of The AES Corporation has occurred and is continuing and (b) The AES
Corporation has failed to perform any material obligation under the services
agreement.
Annual Budget
Not less than 30 days prior to (1) the anticipated commercial operation
date, and thereafter (2) the commencement of each fiscal year, we must provide
to the senior creditors and the rating agencies an annual budget. The first
annual budget must cover the period from the commercial operation date through
the end of the fiscal year in which the commercial operation date occurs, and if
the period consists of less than six months, for the immediately succeeding
fiscal year. Each annual budget must specify the estimated sales of capacity and
energy under the power purchase agreement and any replacement power purchase
agreement and all other sales of capacity and energy, the estimated rates and
revenues for each category of the sales, all operating and maintenance costs, a
manpower forecast, a periodic inspection, maintenance and repair schedule, a
description of all required capital expenditures and the underlying operating
assumption and implementation plans for the fiscal year covered by the annual
budget. We must operate and maintain our facility, or cause our facility to be
operated and maintained, in accordance with the annual budget other than
deviations resulting from operating requirements under our project contracts or
prudent operating and maintenance practices.
Insurance Report
Within 30 days after the end of each fiscal year, we must submit to the
senior creditors and each rating agency that currently is rating any of the
bonds then outstanding a certificate (1) listing all insurance being carried by,
or on behalf of, us under the indenture and (2) certifying that all insurance
policies required to be maintained under our project contracts and the indenture
are in full force and effect and all premiums therefor have been fully paid.
Inspection
The senior creditors will have the right, upon reasonable advance
written notice, to inspect our facility and the facility site from time to time
so long as we have the right to specify reasonable dates and times for any the
inspection in order to avoid any material interference with operation of our
facility.
Construction of our Facility
We must cause the construction of our facility to be prosecuted and
completed with diligence and continuity, except for interruptions provided for
in the construction agreement or due to events of force majeure, which events of
force majeure we must use our best efforts to mitigate, in a good and
workmanlike manner and in accordance with sound, generally accepted building and
engineering practices, all material applicable governmental requirements and the
construction agreement. We must at all times cause a complete set of the current
and, when available, as-built plans, and all supplements, relating to our
facility to be maintained on the facility site or Siemens Westinghouse's offices
and available for inspection by thereto independent engineer.
Contractor Performance Tests; Final Acceptance
The independent engineer will have the right to witness and verify the
performance tests required by the construction agreement. We must not, without
the prior written confirmation by the independent engineer, either
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(1) grant the Final Acceptance Certificate to Siemens Westinghouse under the
construction agreement or (2) elect to effect Final Acceptance under the
construction agreement.
Casualty Proceeds; Eminent Domain Proceeds
We must cause all casualty proceeds and eminent domain proceeds to be
deposited in the restoration account under the collateral agency agreement.
Payment of Taxes and Impositions
We will pay or cause to be paid, before any fine, interest or penalty
is imposed, all impositions. If, under any applicable law, any impositions may
at our option be paid in installments whether or not interest accrues on the
unpaid balance, we will have the right to exercise the option and to pay or
cause to be paid the impositions and any accrued interest in installments as
they fall due and before any fine, penalty, further interest or cost may be
added so long as no event of default then exists.
We will pay all taxes and other governmental charges (including stamp
taxes) assessed by any governmental authorities and imposed on the collateral
agent, its successors or assignees, by reason of the collateral agent's
ownership of the mortgage or the other security documents or payable by either
us or the collateral agent upon any modification, amendment, extension and/or
consolidation. We will also pay any tax imposed directly or indirectly on the
mortgage in lieu of a tax on the mortgaged property or any part thereof, whether
by reason of (1) the passage after the date of the mortgage of any law of the
Commonwealth of Pennsylvania deducting from the value of real property for the
purposes of taxation any lien, (2) any change in the laws for the taxation of
mortgages or debts secured by mortgages for state or local purposes, (3) a
change in the means of collection of any the tax or (4) any tax, now or
hereafter assessed against the mortgage or assessed against, or withheld from,
any payments made by us under the indenture.
We will not claim or demand or be entitled to any credit or credits for
the payment of any Impositions, and no deduction must otherwise be made or
claimed from the taxable value of the mortgaged property, or any part thereof,
by reason of the mortgage.
Preservation of Lien of Mortgage
We will (1) preserve our right, title and interest in and to the
mortgaged property and will warrant and defend the same against any and all
claims and demands whatsoever, (2) continue to have full power and lawful
authority to encumber and convey the mortgaged property as provided in the
mortgage and (3) maintain and preserve the priority of the lien of the mortgage
until all of the obligations under the financing documents are paid and
performed in full.
Negative Covenants
We will make the following negative covenants:
Limitations on Additional Indebtedness
We must not create or incur or suffer to exist any indebtedness or
lease obligations except for:
o the bonds;
o indebtedness incurred under the debt service reserve letter of
credit and reimbursement agreement or any construction period
letter of credit and reimbursement agreement;
o letters of credit and other financial obligations arising
under our project contracts;
o subordinated debt of affiliates;
o purchase money obligations incurred to finance specific items
of equipment that do not comprise an integral part of our
project that extend only to the equipment being financed and
that do not in the aggregate have annual debt service or lease
obligations exceeding $5 million;
o trade accounts payable, other than for borrowed money,
arising, and accrued expenses incurred, in the ordinary course
of business so long as the trade accounts payable are payable
within 90 days of the date the respective goods are delivered
or the respective services are rendered;
o obligations in respect of surety bonds or similar instruments
in an aggregate amount not exceeding $5 million outstanding at
any one time;
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o any lines of credit for working capital purposes in the
maximum amount of $5 million;
o senior debt used for an expansion of our facility; however, we
may issue senior debt if (1) (a) the projected average senior
debt service coverage ratio, after giving effect to the senior
debt, is at least 1.50 to 1.0 through the end of the power
purchase agreement term (taken as one period) and at least
2.50 to 1.0 during the post-power purchase agreement period
(taken as one period) and (b) the projected minimum senior
debt service coverage ratio, after giving effect to the senior
debt, is at least 1.30 to 1.0 through the end of the power
purchase agreement term and at least 2.15 to 1.0 during the
post-power purchase agreement period; (2) we provide a ratings
reaffirmation from each of the rating agencies; and (3) the
trustee does not, within 60 days of notice to holders of the
bonds setting forth a summary of the terms of the senior debt
and a description of the facilities to be constructed with the
proceeds of the senior debt, receive an instruction from
persons holding a majority in principal amount of the bonds
not to permit the issuance of the senior debt; and
o senior debt or subordinated debt, from persons who are not our
affiliates, for required modifications to our facility and
optional modifications to our facility; however, we may issue
(1) senior debt on a parity basis with the bonds only for
required modifications to our facility and only if (a) the
projected average senior debt service coverage ratio, after
giving effect to the senior debt, is at least 1.30 to 1.0
through the end of the power purchase agreement term (taken as
one period) and at least 2.0 to 1.0 during the post-power
purchase agreement period (taken as one period) or (b) we
provide a ratings reaffirmation from each of the rating
agencies; (2) subordinated debt for required modifications to
our facility only if (x) the projected average total debt
service coverage ratio, after taking into account the
subordinated debt, is at least 1.20 to 1.0 through the end of
the power purchase agreement term (taken as one period) and at
least 1.65 to 1.0 during the post-power purchase agreement
period (taken as one period) and (B) the projected minimum
total debt service coverage ratio, after giving effect to the
subordinated debt, is at least 1.1 to 1.0 through the power
purchase agreement term and at least 1.35 to 1.0 during the
post-power purchase agreement period, or (2) we provide a
ratings reaffirmation from each of the rating agencies; or (3)
subordinated debt for optional modifications to our facility
only if we provide a ratings reaffirmation from each of the
rating agencies. In the case of clauses (2) and (3) of the
preceding proviso, the final maturity date of the subordinated
debt must not be earlier than the final maturity date for the
bonds and the average life of the subordinated debt must be no
shorter than the average remaining life of the bonds.
Restricted Payments
We must not make any payments restricted under the indenture unless the
distribution conditions described in the collateral agency agreement have been
satisfied. See "SUMMARY OF PRINCIPAL FINANCING DOCUMENTS--Collateral Agency
Agreement--Distribution Account."
Prohibition of Change in Control
We must not engage in, or permit to occur, any change in control, where
change in control means any failure by The AES Corporation, at all times while
bonds are outstanding, to maintain directly or indirectly at least a 51% voting
and economic interest in our company, unless prior to giving effect to the
reduction in the voting or economic interest of The AES Corporation in our
company either (1) each of the rating agencies provides a ratings reaffirmation
to the trustee or (2) the reduction in The AES Corporation's voting or economic
interest has been approved by bondholders holding at least 66-2/3% in aggregate
principal amount of the bonds.
Nature of Business
We must not engage in any business other than the development,
financing, construction and operation and maintenance of our facility as
contemplated by our project contracts.
Amendments to Project Contracts
We must not, except as otherwise expressly described in the financing
documents, terminate, amend or modify, other than immaterial amendments or
modifications as certified by us, any of our project contracts to which we are a
party, or consent to any assignment by another party, unless (1) we certify to
the senior creditors that the termination, amendment, modification or assignment
is not reasonably expected to result in a material adverse effect and the
termination, amendment, modification or assignment is not reasonably expected to
materially increase the likelihood of the occurrence of a future material
adverse effect and (2) the independent engineer does not within 10 business days
of receipt of the certificate disagree in writing to the certification provided
under clause (1). We, however, shall not:
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o amend or modify the power purchase agreement unless in
addition to the requirements of clauses (1) and (2) above, we
certify that the amendment or modification would not cause our
net operating revenues to decrease by more than 5% and the
certification is confirmed by the independent engineer,
o except as otherwise expressly described in the financing
documents, terminate the power purchase agreement or consent
to any release of, assignment by or change in the identity of
Williams Energy unless (1) within 90 days of the termination
or consent resulting from an event of default by Williams
Energy under the power purchase agreement, or prior to any the
termination or consent or for any other reason we (a) enter
into a replacement power purchase agreement or (b) provide the
senior creditors and each of the rating agencies with a power
marketing plan and (2) we provide to the trustee and the
collateral agent a ratings reaffirmation from each rating
agency within the 90-day period or prior to the termination or
consent, as the case may be, or
o release or modify in any way the guaranty provided by The
Williams Companies, Inc. unless we obtain substitute security
therefor under the power purchase agreement.
Prohibition on Fundamental Changes and Disposition of Assets
We must not enter into any transaction of merger or consolidation,
change our form of organization or our business, liquidate or dissolve
ourselves, or suffer any liquidation or dissolution, except as permitted in the
indenture. We must not amend its governing instruments except where the
amendment could not reasonably be expected to result in a material adverse
effect. We must not purchase or otherwise acquire all or substantially all of
the assets of any other person unless we may maintain ownership interests in
subsidiaries if the subsidiaries are involved in operation, maintenance or fuel
supply for our facility. In addition, except as contemplated by our project
contracts or permitted under the indenture, or as authorized by the first and
second provisos below, we must not sell, lease (as lessor) or transfer (as
transferor) any property or assets material to the operation of our facility
except in the ordinary course of business to the extent that the property is
worn out or is no longer useful or necessary in connection with the operation of
our facility. Furthermore, we:
o must not sell, lease or transfer any of the property or assets
without the written approval of the collateral agent, if the
aggregate fair market value of all sales, leases and transfers
in the current fiscal year exceeds $5 million; and
o may loan useful spare parts to other electric power generating
facilities owned by an affiliate of ours without prior
approval of the trustee or the collateral agent on the
conditions that, with respect to any spare part whose value is
in excess of $50,000, (1) at the time of the loan the
recipient of the spare part enters into an enforceable
obligation to replace the spare part in kind, or to pay to us
an amount equal to the replacement value of the spare part,
within 30 days of our demand for the same and (2) we certify
to the collateral agent that the spare part is not be
necessary for a planned outage or for scheduled maintenance of
our facility prior to being replaced, and the certificate is
confirmed by the independent engineer.
Liens
We must not create or suffer to exist or permit any lien upon or with
respect to any of our properties, other than permitted liens.
Transactions with Affiliates
We must not enter into any transactions with our affiliates other than
(1) the operations agreement and the equity subscription agreement and (2)
transactions in the ordinary course of business on fair and reasonable terms as
favorable to us as we would obtain in an arm's length transaction with an
unaffiliated third party.
Change Orders
We must not initiate or approve any change order under the construction
agreement that individually exceeds $5,000,000 or when aggregated with all other
change orders exceeds $10,000,000, unless we certify in writing to the
collateral agent that (1) the change order is technically feasible, (2) the
change order is not reasonably expected to materially and adversely affect the
operation or reliability of our facility, (3) the implementation of the change
order is not reasonably expected to cause the commercial operation date to occur
after December 31, 2002 and (4) adequate funds are available to us to fund the
change orders and other project costs through the commercial operation date, and
the certification is confirmed by the independent engineer.
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Events of Default
Events of default under the indenture will include the following:
o We fail to pay any principal, interest or any premium including any
make-whole premium, on a bond when the same becomes due and payable, whether
when it is scheduled to mature or upon any required prepayment or by
acceleration or otherwise and the failure continues for 10 or more days; or
o Any representation or warranty made by us in the indenture proves to
have been false or misleading in any respect when made, confirmed or furnished
and the inaccuracy has resulted or is reasonably expected to result in a
material adverse effect on us and the circumstances surrounding the
misrepresentation continues uncured for 30 or more days from its discovery;
however, if we commence efforts to cure the factual situation resulting in the
misrepresentation within the 30-day period, we may continue to effect the cure
of the misrepresentation, and the misrepresentation will not be deemed to be an
event of default, for an additional 60 days so long as an authorized
representative of ours certifies that no other event of default has occurred and
is continuing and we are diligently pursuing the cure; or
o We fail to maintain insurance in accordance with the indenture; or
o We fail to perform or observe covenants or agreements in the
indenture with respect to the following: maintenance of existence and
governmental approvals; nature of business; compliance with applicable laws;
amendments to project contracts; prohibition on fundamental changes and
disposition of assets; liens; indebtedness; or restricted payments; and any
failure continues uncured for more than 30 days after we have actual knowledge
of the failure; or
o A change in control occurs; or
o We fail to perform or observe any of our covenants or agreements
contained in any other provision of the indenture not discussed above and the
failure continues uncured for more than 30 days after we have actual knowledge
of the failure; however, if we commence efforts to cure the default within the
30-day period and are diligently attempting to cure the default, and certifies
to the trustee the steps it is taking, we may continue to effect the cure of the
default, and the default will not be deemed an event of default, for an
additional 60 days so long as we certify that no other event of default has
occurred and is continuing and we are diligently pursuing the cure; or
o We or, so long as The AES Corporation has any outstanding obligations
under any acceptable credit support, The AES Corporation or, so long as AES
Ironwood, Inc. has any outstanding obligations under the equity subscription
agreement, AES Ironwood, Inc. (1) apply for or consent to the appointment of, or
the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or substantially all of its property, (2) admit in writing its
inability, or be generally unable, to pay its debts as the debts become due, (3)
make a general assignment of the benefit of its creditors, (4) commence a
voluntary case under the Bankruptcy Code, (5) file a petition seeking to take
advantage of any law relating to bankruptcy, insolvency, reorganization,
winding-up or the composition or readjustment of debts, (6) fail to controvert
in a timely and appropriate manner, or acquiesce in writing to, any petition
filed against the person in an involuntary case under the Bankruptcy Code or (7)
take any corporate or other action for the purpose of effecting any of the
preceding; or
o A proceeding or case is commenced without our application or consent
or, so long as The AES Corporation has any obligations under any acceptable
credit support, The AES Corporation or, so long as AES Ironwood, Inc. has any
outstanding obligations under the equity subscription agreement, AES Ironwood,
Inc., in any court of competent jurisdiction, seeking (1) its liquidation,
reorganization, dissolution, winding-up or the composition or readjustment of
debts, (2) the appointment of a trustee, receiver, custodian, liquidator or the
like of the person under any law relating to bankruptcy, insolvency,
reorganization, winding-up or the composition or adjustment of debts, and the
proceeding or case continues undismissed, or any order, judgment or decree
approving or ordering any of the preceding is entered and continues unstayed and
in effect, for a period of 90 or more consecutive days, or (3) any order for
relief against the person is entered in an involuntary case under the Bankruptcy
Code (each event described in this paragraph and in the preceding clause
referred to as a "bankruptcy event"); or
o A final and non-appealable judgment or judgments for the payment of
money of more than $15,000,000 is rendered against us, and the same remain
unpaid or unstayed for a period of more than 60 or more consecutive days from
the date it is entered; or
o An "event of default" has occurred and is continuing under the debt
service reserve letter of credit and reimbursement agreement, the construction
period letter of credit and reimbursement agreement or any other
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indebtedness of ours the holder of which, or an agent or trustee therefor, is a
party to the collateral agency agreement, other than indebtedness incurred under
the indenture, or an "event of default" has occurred and is continuing in
respect of any other indebtedness of ours of more than $15,000,000; or
o With respect to any project contract: (1) the project contract is
declared unenforceable by a governmental authority, (2) any other party denies
it has a material obligation under the project contract or (3) any other party
defaults in respect of its obligations under the project contract, and in the
case of each event described in clause (1), (2) or (3), the event would be
likely to result in a material adverse effect; however, none of the events will
be an event of default under the indenture if within 180 days (90 days in
respect of the power purchase agreement or the construction agreement) from the
occurrence of the event (a) the other party resumes performance or enters into
an alternative agreement with us or (b) we enter into a replacement contract or
contracts with another party or parties which (A) contain, as certified by us,
substantially equivalent terms and conditions or, if the terms and conditions
are no longer available on a commercially reasonable basis, the terms and
conditions then available on a commercially reasonable basis and (B) either (1)
we provide to the trustee and the collateral agent a ratings reaffirmation from
each rating agency or (2) we certify that we would, after giving effect to the
alternative agreement, maintain a projected minimum senior debt service coverage
ratio in any year during the remaining term of the bonds equal to or greater
than the lesser of (x) the projected minimum annual senior debt service coverage
ratio which would have been in effect had performance under the original project
contract continued and (y) 1.25 to 1.0 or (c) in the case of the power purchase
agreement, we deliver to the trustee and collateral agent a power marketing plan
and obtains a ratings reaffirmation from each rating agency; or
o Any grant of a lien contained in the security documents ceases to be
effective to grant a perfected lien to the trustee or the collateral agent on a
material portion of the collateral described in the security documents with the
priority purported to be created thereby; however, we must have 10 days from
actual knowledge to cure the cessation; or
o The construction of our facility is permanently abandoned; or
o AES Ironwood, Inc. fails to perform or breaches any of its payment
obligations under the equity subscription agreement and the failure or breach
continues for 10 business days or more; or
o Any acceptable credit provider fails to perform or breaches any of
its payment obligations under any acceptable credit support and the failure or
breach continues for 10 business days or more.
Remedies upon Default
(1) If one or more events of default has occurred and is continuing,
then:
o in the case of a bankruptcy event, the entire principal amount of the
bonds then outstanding, all interest accrued and not paid thereon, and any
premiums payable under the bonds and the indenture will automatically become due
and payable without presentment, demand, protest or notice of any kind, all of
which are waived; or
o in the case of any other event of default, the trustee may, and upon
written direction of the bondholders holding not less than one-third of the
aggregate principal amount of outstanding bonds, the trustee will, by notice to
us, declare the entire principal amount of the bonds, all accrued and unpaid
interest, and any premium payable under the bonds and the indenture to be due
and payable, and the same will become due and payable without presentment,
demand, protest or further notice of any kind, all of which are waived; or
o the trustee will, if the required bondholders request in writing to
the trustee, direct the collateral agent, to the extent permitted under the
collateral agency agreement, to take possession of all the collateral and, under
the collateral agency agreement, to sell the collateral, as and to the extent
permitted under the collateral agency agreement;
(2) If an event of default occurs and is continuing and is known to the
trustee, the trustee will mail to each bondholder a notice of the event of
default within 30 days after its occurrence. Except in the case of an event of
default in payment of principal of or interest on any bond, the trustee may
withhold the notice to the bondholders if a committee of its trust officers in
good faith determines that withholding the notice is in the interest of the
bondholders;
(3) At any time after the principal of the bonds become due and payable
upon a declared, but not an automatic, acceleration as provided in the
indenture, and before any judgment or decree for the payment of all or any
portion of the money so due, is entered, the bondholders of not less than a
majority in aggregate principal amount of the bonds then outstanding, by written
notice to us and the trustee, may rescind and annul the declaration and its
consequences if:
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o there has been paid to or deposited with the trustee a sum sufficient
to pay
(a) all overdue installments of interest on the bonds,
(b) the principal of and any premium on any bonds that have become
due otherwise than by the declaration of acceleration and
interest at the respective rates provided in the bonds for
late payments of principal or premium,
(c) to the extent that payment of the interest is lawful, interest
upon overdue installments of interest at the respective rates
provided in the bonds for late payments of interest, and
(d) all sums paid or advanced by the trustee under the indenture
and the reasonable compensation, expenses, disbursements, and
advances of the trustee, its agents and counsel, and
o all events of default, other than the non-payment of the principal of
the bonds that has become due solely by the acceleration, have been cured or
waived as provided in the indenture;
No rescission will affect any subsequent default or impair any right consequent.
Except as otherwise specifically provided in the indenture, the holders
of a majority in principal amount of the bonds will have the right to direct the
time, place and method of conducting any proceeding for any remedy available to
the trustee or exercising any power conferred on the trustee; so long as (1) the
direction does not conflict with any law or the indenture or the collateral
agency agreement and (2) the trustee may take any other action deemed proper by
the trustee which is not inconsistent with the direction.
All rights and remedies available to the bondholders, or to the trustee
with respect to the collateral, or otherwise under the security documents, are
subject to the collateral agency agreement, including the ability to enforce any
remedy and the limitations on the trustee's ability to vote the interests
represented by the bonds.
Affiliate Cure Rights
Any affiliate of ours will, at its option, have the right, but not the
obligation, to cure any events of default for which cures are applicable.
Trustee
The Bank of New York, as successor to IBJ Whitehall Bank & Trust
Company, will act as the trustee under the indenture. The indenture provides
that the trustee will not be liable in connection with the performance of its
duties thereunder, except for its own gross negligence, bad faith or willful
misconduct. The trustee may become the owner of any bonds, with the same rights
it would have if it were not the trustee, and may carry any monies held by the
trustee on deposit with itself and will not have any liability for interest upon
any the monies.
The trustee may resign at any time and be discharged from its duties
and obligations under the indenture by giving written notice to us and upon
appointment and acceptance of a successor. The trustee may be removed at any
time by the holders of not less than a majority in principal amount of then
outstanding bonds. We or any holder who has been a bona fide holder of a
security for at least six months may remove the trustee if (1) the trustee fails
to comply with the provisions of the indenture regarding conflicting interests,
(2) the trustee ceases to be eligible as required under the indenture and fails
to resign after written request, (3) the trustee becomes bankrupt or insolvent
or (4) the trustee fails to carry out its obligations in a timely manner.
Notwithstanding the preceding, no resignation or removal of the trustee and no
appointment of a successor trustee will become effective until the acceptance of
appointment by the successor trustee.
Except during the continuance of an event of default under the
indenture, the trustee will perform only the duties as are specifically
described in the indenture. During the existence of an event of default, the
trustee will exercise the of the rights and powers vested in it by the
indenture, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
the person's own affairs.
The indenture contains limitations on our rights to obtain payments of
claims in specific cases or to realize on specific property received by us in
respect of any claim as security or otherwise. The trustee is permitted to
engage in other transactions with us; however, if it acquires any "conflicting
interest", as defined in the indenture, it must eliminate the conflict or resign
as trustee under the indenture.
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Supplemental Indentures
Supplemental Indentures and Amendments without the Consent of Bondholders
Without the consent of the bondholders, we and the trustee, at any time
and from time to time, may enter into one or more supplemental indentures in
form reasonably satisfactory to the trustee and may amend any of the other
financing documents, for any of the following purposes:
o to establish the form and terms of bonds of any series
permitted by the indenture;
o to evidence the succession of another entity to us and the
assumption by any successor of our covenants under the bonds
and the indenture;
o to evidence the succession of a new trustee or a co-trustee or
separate trustee under the indenture;
o to add to the covenants of us, for the benefit of the
bondholders, or to surrender any right or power conferred upon
us under the indenture;
o to convey, transfer and assign to the trustee, and to subject
to the lien of the indenture, additional properties or assets
and to correct or amplify the description of any property at
any time subject to the lien of the indenture or to assure,
convey and confirm unto the trustee any property subject or
required to be subject to the lien of the indenture;
o to facilitate the issuance of bonds in uncertificated form;
o to change or eliminate any provision of the indenture;
however, if the change or elimination would adversely affect
the interests of the holders of any bonds of any series, the
change or elimination will become effective with respect to
the series only when no bond of the series remains
outstanding;
o to comply with changes in applicable law; however, no
amendment or supplement must result in a material adverse
effect or otherwise adversely affect the interests of the
holders of any bonds in any material respect;
o to make any changes required by Standard & Poor's or Moody's
or any other nationally recognized securities rating agency as
a condition to the issuance or maintenance of the then current
rating on the bonds or any series thereof so long as any
change does not result in a material adverse effect or
otherwise adversely affect the interests of the holders of any
bonds in any material respect; or
o to cure any ambiguity, to correct or supplement any provision
of the indenture that may be defective or inconsistent with
any other provision of the indenture, or to make any other
provisions with respect to matters or questions arising under
the indenture so long as the action does not adversely affect
the interest of the bondholders of any series in any material
respect.
Supplemental Indentures with the Consent of Bondholders
With the consent of the bondholders of not less than a majority in
aggregate principal amount of outstanding bonds of all series, we and the
trustee may, and the trustee must, enter into one or more supplemental
indentures for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of, the indenture. No supplemental
indenture, however, may, without the consent of each bondholder directly
affected thereby: (1) change the stated maturity of any bond (or, if the
principal is payable in installments, the stated maturity of the installment),
or of any payment of interest, or the dates or circumstances of payment of any
premium on any bond, or change the principal amount or the interest or any
premium payable upon redemption, or change the place of payment where, or the
currency in which, any bond or any premium or the interest is payable, or impair
the right to institute suit for the enforcement of the payment of principal or
interest on or after the stated maturity (or, in the case of redemption, on or
after the redemption date) or the payment of premium, if any, on or after the
date the premium becomes due and payable; or (2) except for permitted liens,
permit the creation of any lien prior to or, equally with the lien of any of the
security documents with respect to any of the collateral, or terminate the lien
on any collateral or deprive any bondholder of the security afforded by the lien
of the indenture; or (3) reduce the percentage in principal amount of the bonds
then outstanding, the consent of whose bondholders is required for any
supplemental indenture, or the consent of whose bondholders is required for any
waiver provided for in the indenture, or reduce the requirements for quorum or
voting; or (4) modify specified provisions of the indenture relating to remedies
following an event of default, except to increase the percentage of the
principal amount of the bonds required to waive past defaults.
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Satisfaction and Discharge
We may terminate the indenture by delivering all bonds then outstanding
to the trustee for cancellation and by paying all sums payable under the
indenture and by effecting delivery of officer's certificates and an opinion of
counsel stating that all conditions precedent have been satisfied.
In addition to the preceding, bonds then outstanding will, prior to the
stated maturity, be deemed to be paid, and our indebtedness will be deemed to be
satisfied and discharged, at any time all the conditions described below have
been satisfied:
o We have irrevocably deposited with the trustee, in trust, monies or
permitted investments in an amount sufficient to pay when due, without
reinvestment, the principal of and any premium and interest due and to become
due on the bonds then outstanding on or prior to the stated maturity of the
final installments of principal or upon redemption or prepayment;
o We have delivered to the trustee an order stating that monies
deposited with the trustee or in permitted investments must be held by the
trustee, in trust, as provided in the indenture;
o in the case of redemption or prepayment of the bonds then
outstanding, the notice necessary for the validity of the redemption or
prepayment has been given, or irrevocable authority must have been given by us
to the trustee to give the notice; and
o there has been delivered to the trustee an opinion of counsel to the
effect that as a result of a change in applicable law after the date of the
indenture the satisfaction and discharge of the indebtedness with respect to the
bonds then outstanding will not be deemed to be, or result in, a taxable event
with respect to holders of bonds then outstanding for purposes of United States
Federal income taxation unless the trustee has received documentary evidence
that the bondholders either are not subject to, or are exempt from, United
States Federal income taxation.
Collateral Agency Agreement
Project Accounts
The following trust accounts will be established and created with and
in the name of the collateral agent: construction account; revenue account;
operating and maintenance account; debt service reserve account; debt service
reserve letter of credit reimbursement fund; construction period letter of
credit reimbursement fund; restoration account; major maintenance reserve
account; fuel conversion volume rebate account; subordinated debt account; and
distribution account.
Collection of Project Revenues
We must arrange for the direct payment to the collateral agent of all
project revenues, and to the extent any the project revenues are at any time
received by us prior to the commercial operation date, we must hold all revenues
and other amounts in trust for the collateral agent and must transfer to the
collateral agent for deposit of the project revenues in the construction account
in each case as soon as reasonably practical but no later than three business
days after receipt, duly endorsed, if necessary, to the collateral agent.
Advances
Notwithstanding any other provision of the collateral agency agreement
to the contrary, we may withdraw funds on deposit in or credited to any of the
project accounts other than the construction account and the debt service
reserve account (the a withdrawal, an "advance"). At the time of the making of
the advance, however, no default or event of default has occurred and be
continuing and our obligations to repay the advances must be supported by
acceptable credit support. We must repay immediately or cause to be repaid any
advances to the extent that the funds on deposit in the project accounts other
than the construction account and the debt service reserve account are
insufficient to make the necessary withdrawals and transfers. In addition, we
must cause to be repaid immediately the aggregate amount of all advances upon
the occurrence of:
o a default in the payment of principal of, any premium, or interest on
the bonds or under the debt service reserve letter of credit and reimbursement
agreement, the construction period letter of credit and reimbursement agreement
or any working capital facility,
o any event of default,
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o any default by an acceptable credit provider in respect of its
obligations under its acceptable credit support or
o our failure to provide, within five business days, acceptable credit
support in respect of its obligations to repay advances upon the failure of the
acceptable credit provider to meet the requirements of the definition thereof.
Any amounts so repaid must be allocated to and deposited in the project accounts
other than the construction account and the debt service reserve account to
which the repayment is required to be made as directed by us in an officer's
certificate.
Construction Account
On the date of original issuance of the old bonds, the net proceeds of
the sale of the old bonds received by us were transferred to the collateral
agent for deposit in the construction account.
On that date, the collateral agent applied the amounts in the
construction account to the payment, or reimbursement, to the extent the same
had been paid or satisfied by us, of project costs. Each requisition after that
date must be submitted to the collateral agent no less than three business days
in advance of the drawing date and must include the following:
(1) a certification that the proceeds will be used solely to pay
project costs in accordance with the indenture;
(2) a certification that work performed to date has been satisfactorily
performed in a good and workmanlike manner and according to the construction
agreement;
(3) a statement that undisbursed funds in the construction account,
together with funds available under the equity subscription agreement and other
available sources of funds, are reasonably expected to be sufficient to complete
our facility by December 31, 2002;
(4) a statement that no default or event of default under the
indenture, the debt service reserve letter of credit and reimbursement
agreement, the construction period letter of credit and reimbursement agreement
or any working capital facility has occurred and is continuing;
(5) a statement that all proceeds of prior requisitions have been
expended or applied under the provisions of the financing documents and that the
items for which amounts are requested in the subject requisition have not been
the basis for a previous requisition;
(6) a certification that required insurance, material governmental
approvals and necessary project contracts are in full force and effect; and
(7) a certification that specified representations described in the
indenture are true and correct in all material respects.
If we cannot satisfy the requirements of clauses (1) or (5) of the
preceding paragraph, the collateral agent can not release funds from the
construction account in respect of the requisition until the clauses are
satisfied. If we cannot satisfy clauses (2), (3), (4), (6) or (7) of the
preceding paragraph, but the collateral agent receives a requisition signed by
us, the contents of which must be confirmed by the independent engineer:
o specifying and identifying the failure, and the causes for the
failure, to satisfy the requirements of the clauses (2), (3), (4), (6) or (7) of
the preceding paragraph and
o certifying that (i) the requirements of clauses (1) and (5) of the
preceding paragraph are satisfied, (ii) there exists no bankruptcy event in
respect of us or AES Ironwood, Inc. and (iii) each of the construction
agreement, the power purchase agreement, required insurance policies and
material governmental approvals needed for construction of our facility is in
full force and effect, then the collateral agent must disburse funds in
accordance with the requisition.
Within 15 days of receipt of the requisition, the collateral agent must
give notice to the senior creditors describing the failure and specifying that,
unless the required senior creditors give notice to the collateral agent of
their objection to payment of further requisitions containing any the specified
failures, the collateral agent will continue to make payment of the requisitions
from available funds in the construction account, unless the collateral agent
has received, by the second business day prior to the time of payment of the
requisition, notice of objection from the required senior creditors.
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Notwithstanding the preceding, the collateral agent will not release funds
from the construction account in respect of a requisition if a Trigger Event has
occurred and be continuing until the collateral agent determines that the
Trigger Event is no longer continuing or the required senior creditors give
instructions to the collateral agent as to application of funds.
Payments on Commercial Operation Date
Not later than 10 days after receipt by the collateral agent of a
certificate from us, the contents of which must be confirmed in writing by the
independent engineer, certifying, among other things, that (1) all conditions to
the commencement of commercial operation under the power purchase agreement have
been satisfied, (2) the construction period letter of credit has been terminated
or drawn, (3) all permits then required have been obtained and (4) no default is
continuing, the collateral agent must, after retaining in the construction
account the amount, if any, specified by us as necessary to pay project costs
which are not then due and payable, transfer all remaining funds in the
construction account, plus any amounts available under and under the equity
subscription agreement to the extent necessary to fund first through fifth
below, by wire transfer to the following accounts and recipients in the
following order of priority:
first, to the operating and maintenance account, an amount to the
extent available, as specified by us but in any event, no less than one-month's
non-fuel operating and maintenance costs;
second, to the bond payment account, an amount, to the extent
available, as specified by us for funding of the interest payment subaccount and
principal payment subaccount;
third, to the debt service reserve account, an amount as specified by
us equal to the debt service reserve account required balance to the extent not
already funded or provided through a debt service reserve letter of credit;
fourth, if applicable, to the construction period letter of credit
provider, an amount equal to the principal of and interest on any construction
period letter of credit loans outstanding on the commercial operation date;
fifth, to the major maintenance reserve account, an amount as specified
by us equal to any initial deposit required therein; and
sixth, to the revenue account, any remaining amounts.
Payments During Operating Period
After the transfer specified in the above paragraphs regarding payments
on the commercial operation date and upon receipt by the collateral agent of,
not less than three business days prior to the date of the proposed transfer, an
officer's certificate detailing the amounts to be paid, the collateral agent
must transfer all remaining funds in the revenue account by wire transfer in the
following order of priority:
first, as and when required, (1) to any working capital provider, an
amount certified by us as the amount, if any, then payable under any working
capital facility; and (2) as and when requested, to the operating and
maintenance account, the amount certified by us as necessary for payment of
operating and maintenance costs;
second, on a monthly basis, (1) to the trustee and the collateral
agent, any amounts certified by us as the amounts then due and payable in
respect of trustee claims and collateral agent claims, respectively; (2) to any
debt service reserve letter of credit provider, any amounts certified by us as
the amounts then due and payable in respect of debt service reserve letter of
credit provider claims; and (3) to any construction period letter of credit
provider, any amounts certified by us as the amounts then due and payable in
respect of construction period letter of credit provider claims; however, if
funds in the revenue account are insufficient on any date to make the payments
specified in this paragraph second, distribution of funds must be made ratably
to the specified recipients;
third, on a monthly basis, (1) to the trustee, for deposit in the
interest payment subaccount, an amount equal to one-third of the interest
becoming due on the bonds on the next succeeding bond payment date; (2) to the
debt service reserve letter of credit reimbursement fund, (a) an amount equal to
one-third of the interest becoming due on any debt service reserve letter of
credit loan on the next succeeding bond payment date, plus one-third of any fees
becoming due under the debt service reserve letter of credit and reimbursement
agreement on the next succeeding bond payment date, (b) an amount equal to
one-third of the interest becoming due on any debt service reserve bond on the
next succeeding bond payment date and (c) an amount equal to one-third of the
interest becoming due on any debt service reserve letter of credit term loan on
the next succeeding bond payment date; and (3) to the construction period letter
of credit reimbursement fund, an amount equal to one-third of the interest
becoming due on any construction period letter of credit loan on the next
succeeding bond payment date, plus one-third of any fees becoming due under the
construction period
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letter of credit and reimbursement agreement on the next succeeding bond payment
date; however, if funds in the revenue account are insufficient on any date to
make the payments specified in this paragraph third, distribution of funds must
be made ratably to the specified recipients;
fourth, on a monthly basis, (1) to the trustee, for deposit in the
principal payment subaccount, an amount equal to one-third of the principal
becoming due on the bonds on the next succeeding bond payment date; (2) to the
debt service reserve letter of credit reimbursement fund, (a) an amount equal to
one-third of the principal becoming due on any debt service reserve bond on the
next succeeding bond payment date, and (b) an amount equal to one-third of the
principal becoming due on any debt service reserve letter of credit term loan on
the next bond payment date; and (3) to the construction period letter of credit
reimbursement fund, an amount equal to one-third of the principal becoming due
on any construction period letter of credit loan on the next succeeding bond
payment date; however, if funds in the revenue account are insufficient on any
date to make the payments specified in this paragraph fourth, distribution of
funds must be made ratably to the specified recipients;
fifth, on a monthly basis, (1) to the debt service reserve letter of
credit provider, an amount equal to the outstanding principal amount of any debt
service reserve letter of credit loans that have not been converted to debt
service reserve term loans or debt service reserve bonds, and (2) to the
collateral agent for deposit in the debt service reserve account, an amount
necessary to fund the debt service reserve account up to the debt service
reserve account required balance, taking into account any amounts remaining
available to be drawn under the debt service reserve letter of credit; however,
if amounts available for drawing under the debt service reserve letter of credit
are not being reinstated to the full extent of payments made to the debt service
reserve letter of credit provider and funds in the revenue account are
insufficient on any date to make the payments specified in this paragraph fifth,
distribution of funds must be made ratably to the specified recipients;
sixth, on a monthly basis, to the major maintenance reserve account,
amounts necessary to cause the balance to be equal to the minimum balance
required at that time under the annual budget;
seventh, on a monthly basis, to us for payment to Williams Energy, the
amount, if any, certified by us as required to make any non-dispatch payments,
as defined in the power purchase agreement, to Williams Energy under the power
purchase agreement;
eighth, on a monthly basis, to the fuel conversion volume rebate
account, an amount equal to one-twelfth of the amount specified by us that would
be owed to Williams Energy at the end of the then current fiscal year under the
power purchase agreement;
ninth, on a monthly basis, if any subordinated debt is outstanding, to
the subordinated debt account, (x) an amount equal to one-third or one-sixth,
depending on the interest payment schedule of the subordinated debt, of the
interest becoming due on the subordinated debt on the next succeeding interest
payment date for the subordinated debt, plus (y) one-third or one-sixth,
depending on the amortization schedule of the subordinated debt, of the
principal becoming due on the subordinated debt on the next applicable principal
payment date;
tenth, on a monthly basis, to Siemens Westinghouse, an amount equal to
any subordinated bonuses payable to Siemens Westinghouse under the construction
agreement; and
eleventh, on a monthly basis, to the distribution account, any
remaining amounts for payment of distributions to holders of ownership
interests, including any payment in respect of principal or interest then due on
affiliate subordinated debt so long as the distribution conditions described in
the collateral agency agreement are satisfied.
When making the transfers specified above, each transfer will be
adjusted as necessary, taking into account investment gains or losses in the
project account or indenture account and further adjusting the transfers by the
amount of any prior over-fundings or any prior shortfalls in the project account
or indenture account, to ensure that the aggregate amounts so transferred to the
project accounts or indenture accounts are sufficient to pay the amount due and
payable from the project accounts and indenture accounts on the applicable
payment date.
Debt Service Reserve Account
The collateral agent must hold the debt service reserve letter of
credit as security agent for the trustee and the debt service reserve letter of
credit provider to the extent of its interest therein. Upon the occurrence of
the commercial operation date, the debt service reserve account must be funded,
if necessary, from monies available in the construction account for the relevant
purpose in an amount up to the debt service reserve account required balance.
Subsequent to the commercial operation date, the debt service reserve account
must be funded, if necessary, from monies transferred from
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the revenue account. When determining (1) the amount, if any, required to be
deposited into the debt service reserve account from time to time or (2) whether
the debt service reserve account has deposited therein the debt service reserve
account required balance, amounts on deposit in the debt service reserve account
must be aggregated with the amount available to be drawn under the debt service
reserve letter of credit.
When there are insufficient monies in the bond payment account on any
bond payment date to pay the interest or principal then due on the bonds, the
collateral agent must, in the following order of priority: first, withdraw
monies on deposit in the debt service reserve account; and second, draw on the
debt service reserve letter of credit in accordance with the terms and
provisions up to the amount available for the purpose thereunder, in each case,
to the extent necessary to make the interest or principal payment on the bonds
and transfer the monies to the trustee for deposit in the bond payment account
for application against the payment.
If the collateral agent receives a written notice from us stating that
there has been a reduction in the long-term debt rating of the debt service
reserve letter of credit provider below the required rating, or if a responsible
officer of the collateral agent otherwise becomes aware of the reduction, and
the debt service reserve letter of credit has not been replaced within the time
period specified therefor, the collateral agent must draw on the debt service
reserve letter of credit in the amount necessary to fund the debt service
reserve account up to the debt service reserve account required balance.
If the collateral agent receives a notice from the debt service reserve
letter of credit provider stating that the debt service reserve letter of credit
provider must terminate the debt service reserve letter of credit on the date
specified in the notice, the collateral agent must, within three business days
of receipt of the notice, draw on the debt service reserve letter of credit in
an amount equal to the amount necessary to fund the debt service reserve account
up to the debt service reserve account required balance and the debt service
reserve letter of credit must automatically terminate.
If a Trigger Event has occurred and is continuing and the collateral
agent has received the written request of the required senior creditors
contained in senior creditor certificates and the notice has not been rescinded,
then the collateral agent, upon receipt of an officer's certificate of setting
forth the debt service reserve account required balance, must draw on the debt
service reserve letter of credit in an amount equal to the amount necessary to
fund the debt service reserve account up to the debt service reserve account
required balance, and the debt service reserve letter of credit will
automatically terminate.
If, subsequent to the commercial operation date, monies transferred to
the debt service reserve letter of credit provider under clause third under
"--Payments During Operating Period" above are insufficient to repay the
interest on any debt service reserve letter of credit loans due or becoming due
on the first day of the month, the collateral agent, upon receipt of a
certificate of an authorized officer of the debt service reserve letter of
credit provider notifying the collateral agent of the existence, and setting
forth the amount, of the shortfall, within two business days of receipt of the
certificate must draw on the debt service reserve letter of credit in an amount
equal to the amount of the shortfall and transfer the amount to the debt service
reserve letter of credit provider in payment, in whole or part, of the interest
on the debt service reserve letter of credit loans. Notwithstanding the
preceding, in no event must any draw on the debt service reserve letter of
credit described in this paragraph individually or in the aggregate with all
other the draws, less any draws previously reimbursed, exceed six months of
interest on the maximum stated amount of the debt service reserve letter of
credit.
Unless the debt service reserve letter of credit is not extended or
replaced or unless there has been an event of default under the debt service
reserve letter of credit as described under "SUMMARY OF PRINCIPAL FINANCING
DOCUMENTS--Debt Service Reserve Letter of Credit and Reimbursement Agreement,"
amounts available for drawing under the debt service reserve letter of credit
must be reinstated immediately to the extent of any reimbursement of principal
of debt service reserve letter of credit loans, but not debt service reserve
bonds or debt service reserve letter of credit term loans.
If we and the debt service reserve letter of credit provider agree to
issue or reinstate the debt service reserve letter of credit in an amount that,
when aggregated with cash on deposit in the debt service reserve account would
exceed the debt service reserve account required balance, the collateral agent
must, within two business days of receipt by the collateral agent of (1) the
reissued or reinstated debt service reserve letter of credit, and (2) an
officer's certificate of, transfer an amount equal to the excess amount to the
revenue account for application in accordance with the applicable provisions of
the collateral agency agreement so long as the amount of the debt service
reserve letter of credit may not exceed the debt service reserve account
required balance.
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Distribution Account
The distribution account must be funded from funds transferred from the
revenue accounts in accordance with the collateral agency agreement. On any date
on which the conditions described below are satisfied, funds on deposit in or
credited to the distribution account may be distributed to, or as directed by,
us for the payment of affiliate subordinated debt, the making of distributions
to the holders of ownership interests in our company or any other lawful
purpose, upon receipt by the collateral agent of an officer's certificate of
requesting a distribution and certifying that:
(1) all of our project accounts and the bond payment account must be
funded to their required levels;
(2) no (a) default or event of default under the indenture, (b) default
or event of default under the debt service reserve letter of credit and
reimbursement agreement, (c) default or event of default under any construction
period letter of credit and reimbursement agreement or (d) default under any
working capital arrangements, if any, has occurred and is continuing;
(3) the commercial operation date has occurred and at least one
complete fiscal quarter thereafter has elapsed;
(4) if the requested distribution is to be made during the power
purchase agreement term, (a) the senior debt service coverage ratio for the
preceding four fiscal quarters, (or with respect to any date prior to the first
anniversary of the commercial operation date, for the number of complete fiscal
quarters since the commercial operation date), measured as one period, is
greater than or equal to 1.2 to 1 and (b) based on projections prepared by us on
a reasonable basis, the projected senior debt service coverage ratio for the
succeeding four fiscal quarters (including the quarter in which the distribution
is to be made) (or, with respect to any date within the 12-month period prior to
the end of the power purchase agreement term, the number of complete fiscal
quarters, if any, until the end of the power purchase agreement term) is
projected to be greater than or equal to 1.2 to 1; and
(5) if the requested distribution is to be made on or after the date
which is six months prior to the end of the power purchase agreement term, (a)
the senior debt service coverage ratio for the preceding four fiscal quarters
(or, with respect to any date within the first 12 months of the post-power
purchase agreement period, the number of complete fiscal quarters, if any, since
the start of the post-power purchase agreement period) measured as one period,
is greater than or equal to 1.70 to 1.0 (or 1.2 to 1.0 with respect to the
period occurring prior to the end of the power purchase agreement term) and (b)
based on projections prepared by us on a reasonable basis, the projected senior
debt service coverage ratio for the succeeding eight fiscal quarters (including
the fiscal quarter in which the distribution is to be made) or, with respect to
any date within the 24-month period prior to the final maturity date for the
bonds, the number of complete fiscal quarters, if any, until the final maturity
date for the bonds, in each case measured as one period, is projected to be
greater than or equal to 1.70 to 1 (or 1.2 to 1 with respect to the period
occurring prior to the end of the power purchase agreement term), each as
certified by an authorized officer; however,
o if distributions are blocked because we fail to satisfy the
conditions of clause (5)(b) above, then in lieu of the
coverage ratio test described in the clause, the projected
senior debt service coverage ratio through the final maturity
date for the bonds, measured as one period, must be 1.70 to 1
in order to satisfy clause (5)(b) in respect of amounts then
on deposit in the distribution account;
o for purposes of calculating the projected senior debt service
coverage ratios in clauses (5)(b) above, we must use (A) for
electricity prices, either (x) the electricity prices
forecasted in the most recent independent forecast furnished
to the trustee, in each case, during the relevant period of
calculation, or (y) if and to the extent that electricity
sales during the relevant period of calculation are made under
one or more power sales agreements at prices other than prices
which are by their terms market prices, the electricity prices
under the power sales agreements and (B) for gas prices,
either (x) the gas prices forecasted in the most recent
independent forecast furnished to the trustee, in each case,
during the relevant period of calculation, or (y) if and to
the extent that gas purchases during the relevant period of
calculation are made under one or more gas purchase agreements
at prices other than prices which are by their terms market
prices, the gas prices under the gas purchase agreements;
o if, and to the extent that, (A) at least 75% of our facility's
net capacity is subject to one or more power sales agreements
on terms, other than pricing, substantially similar to the
power purchase agreement, but excluding the provision for gas
to be supplied for fuel conversion services by Williams
Energy, or on commercially reasonable terms (other than
pricing) typical of power sales agreements entered into at the
time for the same term, in each case with a term of not less
than one year during the relevant period
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of calculation, and (B) at least 75% of the gas supply for our
facility is subject to one or more gas supply agreements on
commercially reasonable terms (other than pricing) typical of
gas supply agreements entered into at the time for the same
term, in each case with a term of not less than one year
during the relevant period of calculation (compliance with the
requirements to be certified by us), then clause (5) above
will be deemed satisfied, if the senior debt service coverage
ratio and the projected senior debt service coverage ratio
referred to in the clause (5) are each equal to or greater
than 1.30 to 1 for the portions of the time periods referred
to in the clause (5) in which the agreements were or are to be
in effect, as certified by us; and
o if amounts on deposit in or credited to the revenue account
are insufficient to make the transfers described in priorities
first through sixth above under "Payments During Operating
Period," amounts on deposit in or credited to the distribution
account will be transferred to the revenue account to the
extent necessary and applied in accordance with the collateral
agency agreement.
Restoration Account
All casualty proceeds and eminent domain proceeds must be deposited
into the restoration account. Subject to the provisions described below, the
collateral agent must apply the amounts in the restoration account to the
payment, or reimbursement to the extent the same have been paid or satisfied by
us, of the costs of rebuilding, repair and restoration of our facility or any
part that has been affected by an event of loss or an event of eminent domain.
The collateral agent is authorized to disburse from the restoration
account the amount required to be paid for the repair or replacement of our
facility or any part as specified in the preceding paragraph. The collateral
agent is authorized and directed to issue its checks or transfer funds
electronically for each disbursement from the restoration account, upon receipt
of a restoration certificate signed by our authorized representative, and
approved by the independent engineer. No approval of the independent engineer,
however, will be required if less than $5,000,000 is requested under the
requisition or requisitions in any one fiscal year. The collateral agent will be
entitled to rely on all certifications and statements in the restoration
certificate. The collateral agent must keep and maintain adequate records
pertaining to the restoration account and all disbursements therefrom and must
file an accounting with us and the independent engineer within three months
following the last business day of each fiscal year.
If an event of loss or an event of eminent domain occurs with respect
to any collateral, we must (1) diligently pursue all our rights to compensation
against any person with respect to the event of loss or event of eminent domain,
(2) in our reasonable judgment compromise or settle any claim against any person
with respect to the event of loss or event of eminent domain and (3) hold all
amounts of casualty proceeds or eminent domain proceeds, including instruments,
received in respect of any event of loss or event of eminent domain, after
deducting all reasonable expenses incurred by it in litigating, arbitrating,
compromising or settling any claims, in trust for the benefit of the collateral
agent segregated from other funds of ours and will promptly transfer to the
collateral agent for deposit in the restoration account the casualty proceeds or
eminent domain proceeds.
If either an event of loss or an event of eminent domain occurs, as
soon as reasonably practicable but no later than the date of receipt by us or
the collateral agent of eminent domain proceeds or casualty proceeds, as the
case may be, we must make a reasonable good faith determination as to whether
(1) our facility or any portion can be rebuilt, repaired or restored to permit
operation of our facility or a portion on a commercially feasible basis and (2)
the casualty proceeds or the eminent domain proceeds, as the case may be,
together with any other amounts that are available to us for the rebuilding,
repair or restoration, are sufficient to permit the rebuilding, repair or
restoration of our facility or a portion thereof, including the making of all
required payments of interest and principal on our indebtedness during the
rebuilding, repair or restoration. Our determination must be evidenced by a
certificate as to redemption filed with the collateral agent which, if we
determines that our facility or a portion can be rebuilt, repaired or restored
to permit operation on a commercially feasible basis and that the casualty
proceeds or the eminent domain proceeds, as the case may be, together with any
other amounts that are available to us for the rebuilding, repair or
restoration, are sufficient, must also describe a reasonable good faith estimate
by us of the total cost of the rebuilding, repair or restoration. We must
deliver to the collateral agent at the time we deliver the certificate as to
redemption, a certificate of the independent engineer, dated the date of the
certificate as to redemption, stating that, based upon reasonable investigation
and review of the determination made by us, the independent engineer believes
the determination and the estimate of the total cost described in the
certificate as to redemption to be reasonable.
If, following an event of loss or event of eminent domain, the
determination is made that our facility cannot be rebuilt, repaired or restored
to permit operation on a commercially feasible basis or that the casualty
proceeds or the
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eminent domain proceeds, together with any other amounts that are available to
us for the rebuilding, repair or restoration, are not sufficient to permit the
rebuilding, repair or restoration, all of the casualty proceeds or the eminent
domain proceeds, as the case may be, must be distributed as provided below.
If, following an event of loss or event of eminent domain, the
determination is made that the entire facility can be rebuilt, repaired or
restored to permit operation on a commercially feasible basis and that the
casualty proceeds or the eminent domain proceeds, together with any other
amounts that are available to us for the rebuilding, repair or restoration, are
sufficient to permit the rebuilding, repair or restoration, all of the casualty
proceeds or the eminent domain proceeds, as the case may be, together with the
other amounts as are available to us for the rebuilding, repair or restoration,
must be deposited in the restoration account and applied as provided below.
If, following an event of loss or event of eminent domain, the
determination is made that a portion of our facility can be rebuilt, repaired or
restored to permit operation on a commercially feasible basis and that the
casualty proceeds or the eminent domain proceeds, together with any other
amounts that are available to us for the rebuilding, repair or restoration, are
sufficient to permit the rebuilding, repair or restoration, (1) an amount equal
to the estimate of the total cost of the rebuilding, repair or restoration
described in the certificate as to redemption filed with the collateral agent
must be deposited in the restoration account and applied as provided below, and
(2) the amount, if any, by which all of the casualty proceeds or the eminent
domain proceeds, as the case may be, exceed the estimate of the total cost must
be distributed as provided below.
If we receive casualty proceeds or eminent domain proceeds, as the case
may be, from an event of loss or an event of eminent domain that do not exceed
in the aggregate $5,000,000 during any fiscal year, we will not have to make the
good faith determination referred to above and the casualty proceeds or the
eminent domain proceeds, as the case may be, must be deposited in the
restoration account and applied for the rebuilding, repair or restoration of our
facility without any approval of the independent engineer.
Application of Casualty and Eminent Domain Proceeds and Buy-Down Amounts
If the determination is made that all or a portion of our facility is
incapable of being rebuilt, repaired or restored to permit operation on a
commercially feasible basis, all casualty proceeds or eminent domain proceeds
received by the collateral agent and not deposited in the restoration account
must be distributed by the collateral agent within five business days of receipt
in the following order of priorities:
first, to the collateral agent, the debt service reserve letter of
credit provider, the construction period letter of credit provider and the
trustee, ratably, in an amount equal to the amounts owed in respect of the
collateral agent claims, the trustee claims, the debt service reserve letter of
credit provider claims and the construction period letter of credit provider
claims, respectively, due and payable as of the date of the distribution;
second, to the senior creditors, ratably, an amount equal to the unpaid
amount of all financing liabilities owed to the senior creditors, including the
amount required to be applied to a mandatory redemption of the bonds under the
indenture;
third, to the subordinated debt providers, ratably, an amount equal to
the unpaid amount owed to the subordinated debt providers by us under any
subordinated loan agreement; and
fourth, to us or our successors or assigns or to whomever may be
lawfully entitled to receive the same or as a court of competent jurisdiction
may direct, any surplus then remaining from the proceeds.
At the time the collateral agent is to make a distribution under clause
second in the immediately preceding paragraph, the collateral agent must
deposit, with the same priority as that distribution, ratably into two separate
trust account to be maintained by the collateral agent as follows:
o in the first account, an amount up to the amount equal to the maximum
amount available to be drawn under the debt service reserve letter of credit,
and not represented by a debt service reserve letter of credit loan, debt
service reserve letter of credit term loan or debt service reserve bond, and
o in the second account, an amount up to the amount available to be
drawn under any construction period letter of credit, and not represented by a
construction period letter of credit loan; however, if funds available are
insufficient to make all payments required under clause second of the preceding
paragraph and the required deposits provided for in this sentence, distribution
of funds must be made ratably to the specified recipients. The collateral agent
must hold the funds in the separate accounts until receipt of a written notice
or notices from the debt service reserve letter
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of credit provider and/or the construction period letter of credit provider, as
the case may be, to the effect that either (1) a drawing has been made on its
letter of credit or (2) its letter of credit has expired or terminated without a
drawing being made thereunder. Upon receipt of a notice or notices specified in
clause (1) of the preceding sentence, the collateral agent must distribute to
the debt service reserve letter of credit provider and/or the construction
period letter of credit provider, as the case may be, that proportionate share
of the amount in the relevant separate account referred to above, equal to the
drawing's proportionate share of the letter of credit collateralized by the
account. Upon receipt of a notice or notices specified in clause (2) of the
second preceding sentence, the collateral agent must distribute from the
relevant separate account, in accordance with clauses second, third and fourth
above and without regard to this paragraph, to the appropriate persons an amount
equal to the amount in the separate account.
All amounts received by us from Siemens Westinghouse as performance
liquidated damages under the construction agreement must be deposited into a
separate account maintained by the depositary bank on behalf of the collateral
agent. If the requisite officer's certificate is delivered, the collateral agent
is authorized to disburse from the separate account the amount required to be
paid for the modification, repair or replacement of that portion of our facility
that requires modification, repair or replacement in order to remedy the
circumstances giving rise to the obligation of Siemens Westinghouse under the
construction agreement to pay the amounts received by us from Siemens
Westinghouse as performance liquidated damages under the construction agreement.
As soon as reasonably practicable following our receipt or the
collateral agent's receipt of amounts received by us from Siemens Westinghouse
as performance liquidated damages under the construction agreement, we will make
a reasonable good faith determination as to whether:
o it is technically feasible to modify, repair or replace that portion
of our facility that requires modification, repair or replacement in order to
remedy the circumstances giving rise to the obligation of Siemens Westinghouse
under the construction agreement to pay the amounts received by us from Siemens
Westinghouse as performance liquidated damages under the construction agreement,
o the amounts received by us from Siemens Westinghouse as performance
liquidated damages under the construction agreement, together with any other
amounts that are available to us for the modification, repair or replacement,
are sufficient to permit the modification, repair or replacement, including the
making of all required payments of interest and principal on our indebtedness
during the modification, repair or replacement,
o the projected average senior debt service coverage ratio, after
giving effect to the modification, repair or replacement and the application of
the amounts received by us from Siemens Westinghouse as performance liquidated
damages under the construction agreement to accomplish the same, during the
power purchase agreement term (taken as one period) and the post-power purchase
agreement period (taken as one period) is equal to or greater than the projected
average senior debt service coverage ratio described in the base case
projections for each the period described in this prospectus and
o the projected minimum senior debt service coverage ratio, after
giving effect to the modification, repair or replacement and the application of
the amounts received by us from Siemens Westinghouse as performance liquidated
damages under the construction agreement to accomplish the same, during the
power purchase agreement term and the post-power purchase agreement period is
equal to or greater than the projected minimum senior debt service coverage
ratio for each the period described in the base case projections described in
this prospectus.
Upon receipt of an officer's certificate, confirmed by the independent
engineer, certifying that all modifications, repairs or replacements of that
portion of our facility that requires modification, repair or replacement in
order to remedy the circumstances giving rise to the obligation of Siemens
Westinghouse under the construction agreement to pay amounts received by us from
Siemens Westinghouse as performance liquidated damages under the construction
agreement have been completed, the collateral agent must transfer all funds
remaining in the separate account first, to the accounts as are specified in the
collateral agency agreement and second, to us or to whomsoever we direct.
If we cannot provide the officer's certificate to permit the
application of amounts received by us from Siemens Westinghouse as performance
liquidated damages under the construction agreement toward the modification,
repair or replacement of that portion of our facility or the independent
engineer fails to confirm the officer's certificate, the collateral agent must
distribute all amounts received by us from Siemens Westinghouse as performance
liquidated damages under the construction agreement ratably, based on the amount
owing to the specified recipient, to (1) the trustee in respect of the amount of
the bonds then outstanding for redemption of bonds in accordance with the
indenture, (2) the debt service reserve letter of credit provider in respect of
the outstanding amount of debt service reserve loans and
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(3) the construction period letter of credit provider in respect of the
outstanding amount of any construction period letter of credit loan.
At the time the collateral agent is to make a distribution under the
immediately preceding paragraph, the collateral agent must deposit into two
separate trust accounts to be maintained by the collateral agent as follows:
o in the first account, an amount up to the amount available to be
drawn under the debt service reserve letter of credit, and not represented by a
debt service reserve letter of credit loan, a debt service reserve term loan or
debt service reserve bond, and
o in the second account an amount up to the amount available to be
drawn under any construction period letter of credit, and not represented by a
construction period letter of credit loan; however, if funds available are
insufficient to make all payments required under clause second of the first
paragraph of this section and the required deposits provided for in this
sentence, distribution of funds must be made ratably to the specified
recipients. The collateral agent must hold the funds in the separate account
until receipt of a written notice or notices from the debt service reserve
letter of credit provider and/or the construction period letter of credit
provider, as the case may be to the effect that either (1) a drawing has been
made on the letter of credit or (2) the letter of credit has expired or
terminated without a drawing being made thereunder. Upon receipt of a notice or
notices specified in clause (1) in the preceding sentence, the collateral agent
must distribute to the debt service reserve letter of credit provider and/or
construction period letter of credit provider, as the case may be, that
proportionate share of the amount in the relevant separate account referred to
above, equal to the drawing's proportionate share of the letter of credit
collateralized by the account. Upon receipt of a notice or notices specified in
clause (2) in the second preceding sentence, the collateral agent must
distribute from the relevant separate account to the appropriate persons an
amount equal to the amount in the separate account.
Exercise of Rights Under Security Documents
The collateral agency agreement provides, among other things, that:
o if a Trigger Event has occurred and is continuing, and only in that
event, upon the written request of the required senior creditors contained in
senior creditor certificates, the collateral agent, on behalf of the trustee,
the debt service reserve letter of credit provider, the construction period
letter of credit provider and any other senior creditor that is a party to the
collateral agency agreement, will be permitted to take any and all actions and
to exercise any and all rights, remedies and options which it may have under the
security documents or the collateral agency agreement; however, if the
underlying event which caused the Trigger Event is a bankruptcy event in respect
of us of which the collateral agent has received written notice, no written
request of the required senior creditors will be required in order to permit the
collateral agent following the Trigger Event to take any and all actions and to
exercise any and all rights, remedies and options which it may have under the
security documents or the collateral agency agreement;
o the senior creditors will give each other and the collateral agent
written notice of the occurrence of an event of default and of a Trigger Event
as soon as practicable after the occurrence;
o the senior creditors acknowledge and agree that all funds held by the
trustee in the indenture accounts are held for the benefit of the bondholders;
o the senior creditors acknowledge and agree that all funds held in the
debt service reserve account by the collateral agent is held for the benefit of
the trustee on behalf of the bondholders;
o no senior creditor and no class or classes of senior creditors will
have any right (1) to direct the collateral agent to take any action in respect
of the collateral other than in accordance with the collateral agency agreement
or (2) to take any action with respect to the collateral either independently of
the collateral agent or other than to direct the collateral agent in writing to
take action in accordance with the collateral agency agreement; and
o the senior creditors acknowledge and agree that if (1) there is an
event of default under the indenture and the event of default is not caused
directly or indirectly by a default or event of default under the power purchase
agreement and (2) they direct the collateral agent to accelerate the bonds, the
collateral agent will be obligated to provide Williams Energy the opportunity
for 90 days to purchase our facility for an amount equal to the greater of (x)
the fair market value of our facility and (y) all financing liabilities due and
owing to the senior creditors and any subordinated debt provider, and if
Williams Energy offers to purchase our facility for the amount within the
period, the collateral agent must take the actions as required to consummate the
sale as directed by the required senior creditors in senior creditor
certificates.
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In giving directions and otherwise exercising rights under the security
documents and the collateral agency agreement, the trustee must vote, or
otherwise represent, that portion of the combined credit exposure represented by
all bonds then outstanding according to the votes of a majority of the principal
amount of bonds held by responding bondholders. The trustee must not make
requests, give directions or vote on a proportional basis.
Application of Foreclosure Proceeds
Following the receipt of proceeds under the guaranty provided by The
Williams Companies, Inc. as a result of a termination of the power purchase
agreement or a foreclosure or other exercise of remedies following a Trigger
Event, the proceeds of any sale, disposition or other realization by the
collateral agent or by a senior creditor upon the collateral under the security
documents must be distributed in the following order of priorities:
first, to the collateral agent, the trustee, the debt service reserve
letter of credit provider and the construction period letter of credit provider,
ratably, all administrative fees, costs and expenses owed to the parties under
the financing documents;
second, to the senior creditors, ratably, based on the amount owing to
the specified recipients, an amount equal to the unpaid amount of all financing
liabilities owed to or required to be deposited for the account of the senior
creditors by us;
third, to any subordinated debt providers, ratably, an amount equal to
the unpaid obligations owed to or required to be deposited for the account of
the subordinated debt providers by us under any subordinated loan agreement; and
fourth, to us or to whomever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct, any surplus remaining
after giving effect to clauses first, second and third above.
Subordination Provisions
Any subordinated debt must be subordinate and subject in right of
payment to the prior payment of all senior debt. Unless and until all senior
debt, whether of principal of and interest and premium or prepayment or
liquidation penalty on the senior debt and fees and expenses incurred with
enforcement of the same, has been paid in full in cash, (1) no payment on
account of any subordinated debt can be made to any subordinated debt provider
by us or by the collateral agent or the depositary bank on behalf of us and (2)
no subordinated debt provider can ask, demand, sue for, take or receive from us,
by set-off or any other manner, or seek any other remedy allowed at law or in
equity against us for breach of our obligations under any instrument
representing subordinated debt.
Upon any insolvency, bankruptcy or similar proceeding relating to us or
our creditors, or any liquidation, dissolution or other winding-up, or any
assignment for the benefit of creditors or any other marshaling of our assets
and liabilities, the senior creditors will be entitled to receive payment in
full in cash of all amounts due or to become due on or in respect of all senior
debt, or provision will be made for the payment, before any subordinated debt
provider is entitled to receive any payment with respect to subordinated debt.
Subject to the payment in full in cash of all senior debt, the
subordinated debt providers will be subrogated to the rights of the senior
creditors to receive payments and distributions of cash, property and securities
applicable to the senior debt until the subordinated debt is paid in full in
cash.
Debt Service Reserve Letter of Credit and Reimbursement Agreement
Dresdner Bank AG, New York Branch, under a debt service reserve letter
of credit and reimbursement agreement, has agreed to provide the debt service
reserve letter of credit for use by us in connection with our project. The
financing documents require that the debt service reserve account be funded in
an amount equal to the debt service reserve account required balance on or
before the anticipated commercial operation date. Accordingly, we have entered
into the debt service reserve letter of credit and reimbursement agreement in
order to satisfy this obligation.
The debt service reserve letter of credit provider will issue the debt
service reserve letter of credit on or before the earlier of (1) the commercial
operation date, (2) the guaranteed completion date or (3) December 31, 2002 for
our account in an amount up to $17,529,452, the maximum stated amount, to be
held by the collateral agent to serve as a debt service reserve facility for our
project. There will be no condition precedent to the debt service reserve letter
of credit provider's obligation to issue the debt service reserve letter of
credit, other than the occurrence of the earliest of the dates specified in the
first sentence of the following paragraph.
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The collateral agent will have the right to make drawings on the debt
service reserve letter of credit beginning on the earliest of (1) the commercial
operation date, (2) the Guaranteed Completion Date and (3) December 31, 2002.
The collateral agent may make drawings under the debt service reserve letter of
credit upon the occurrence of the following events: (1) there being insufficient
monies in the bond payment account on any interest payment date or principal
payment date to pay interest or principal then due, after application of funds
from the debt service reserve account; (2) upon receipt of a notice from us that
the long-term debt rating of the debt service reserve letter of credit provider
is less than "A" as determined by Standard & Poor's or "A2" as determined by
Moody's and the debt service reserve letter of credit has not been replaced
within the time period specified therein; (3) if a Trigger Event under the
collateral agency agreement has occurred and is continuing; (4) upon receipt of
a notice from the debt service reserve letter of credit provider on the day 45
days prior to its stated expiration date that the debt service reserve letter of
credit will not be extended or replaced by the close of business; and (5) if,
subsequent to the commercial operation date, moneys transferred to the debt
service reserve letter of credit provider from the revenue account are
insufficient to repay the interest on any debt service reserve letter of credit
loans. The collateral agent will apply the proceeds of each drawing: (a) in the
case of clauses (1) and (5) of the preceding sentence, to payment of the
relevant obligation and (b) in the case of clauses (2), (3) and (4) of the
preceding sentence, to the debt service reserve account until there is deposited
therein an aggregate amount equal to the debt service reserve account required
balance.
Subject to the conditions of drawing, the debt service reserve letter
of credit will, unless extended, mature, expire or terminate on the earlier of
(1) five years from the date of issuance of the debt service reserve letter of
credit and (2) the occurrence of an event of default under the debt service
reserve letter of credit. The debt service reserve letter of credit, however,
may not be terminated upon the occurrence of an event of default under the debt
service reserve letter of credit without the debt service reserve letter of
credit provider first giving the collateral agent and the trustee written notice
at least 60 days prior to the termination during which period the collateral
agent is entitled to draw on the debt service reserve letter of credit as
described above under "--Collateral Agency Agreement--Debt Service Reserve
Account." The debt service reserve letter of credit provider must also provide a
copy of the written notice to us at the time the notice is given to the
collateral agent and the trustee.
We will have the right to terminate or reduce the debt service reserve
letter of credit upon the receipt by the debt service reserve letter of credit
provider of notice from the trustee consenting to the termination or reduction.
The debt service reserve letter of credit is subject to renewal for
additional periods of one or more years at the sole discretion of the agent
under the debt service reserve letter of credit and reimbursement agreement.
The amount available for drawing under the debt service reserve letter
of credit will be reduced upon (1) making draws thereunder, (2) the reduction of
the debt service reserve account required balance and (3) certain deposits of
cash in the debt service reserve account.
Debt Service Reserve Letter of Credit Loans
Each drawing on the debt service reserve letter of credit will
constitute the making of a loan to us by the debt service reserve letter of
credit provider. We must pay interest on the unpaid principal amount of each
outstanding debt service reserve letter of credit loan from the date the debt
service reserve letter of credit loan is made until the principal amount has
been repaid in full at a rate per annum equal, at our option, to either (1) the
adjusted base rate plus 1% or (2) the Eurodollar rate plus the applicable
margin. The adjusted base rate will equal the higher of (1) the federal funds
rate plus 50 basis points and (2) the rate of interest officially announced or
published by the debt service reserve letter of credit provider as its "prime"
or "reference" rate. The Eurodollar rate will be determined by reference to the
offered rates that appear on Telerate page 3750 for deposits in dollars two
London banking days prior to the date on which the rate is to become applicable
to a debt service reserve letter of credit loan.
Each debt service reserve letter of credit loan will be evidenced by a
note in favor of the debt service reserve letter of credit provider. We must pay
the interest on any debt service reserve letter of credit loan out of cash
available in the revenue account at the same level in the flow of funds as
interest on other senior debt and must repay the principal amount of any debt
service reserve letter of credit loans out of cash available in the revenue
account after payment of debt service on all senior debt other than principal of
debt service reserve letter of credit loans. Each debt service reserve letter of
credit loan will mature five years after the date the debt service reserve
letter of credit loan is made.
Unless the debt service reserve letter of credit is not extended or
replaced or unless there has been an event of default under the debt service
reserve letter of credit as described under "--Debt Service Reserve Letter of
Credit and Reimbursement Agreement," amounts available for drawing under the
debt service reserve letter of credit must be
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reinstated immediately to the extent of any reimbursement of principal of debt
service reserve letter of credit loans, but not debt service reserve bonds or
debt service reserve letter of credit term loans.
Non-Renewal of Debt Service Reserve Letter of Credit
If the debt service reserve letter of credit is not extended or
replaced at least 45 days prior to its termination date, or the credit rating of
the debt service reserve letter of credit provider is less than the required
rating and we do not within 45 days replace the debt service reserve letter of
credit with a letter of credit issued by a financial institution which meets the
required rating, the collateral agent will draw on the debt service reserve
letter of credit, the drawing due to non-extension or non-replacement of the
debt service reserve letter of credit, a "debt service reserve letter of credit
term loan", in an amount equal to the lesser of (1) the amount available to be
drawn under the letter of credit and (2) the difference between (x) the debt
service reserve account required balance and (y) amounts then on deposit in the
debt service reserve account, and will deposit the drawing into the debt service
reserve account. A debt service reserve letter of credit term loan will amortize
under a "mortgage-style" amortization schedule and the maturity date of any debt
service reserve letter of credit term loan will be 10 years after the date the
loan is made. Interest on and principal of any debt service reserve letter of
credit term loan will be paid, respectively, at the same levels as interest on
and principal of the bonds.
Conversion into Debt Service Reserve Bonds
If by the date 30 months after the making of a debt service reserve
letter of credit loan, we have failed to repay at least 50% of the original
amount of the debt service reserve letter of credit loan, or if by the maturity
date of the debt service reserve letter of credit loan we have failed to repay
the debt service reserve letter of credit loan in full, then from and after the
applicable date, the debt service reserve letter of credit loan may, at the
option of the debt service reserve letter of credit provider, be converted into
a new security, a debt service reserve bond, having a principal amount equal to
the remaining principal amount of the debt service reserve letter of credit loan
so converted. Each debt service reserve bond must be amortized on the same
amortization schedule as the bonds and mature on the same maturity date as the
bonds. Interest on and principal of any debt service reserve bond will be paid,
respectively, at the same levels as interest on and principal of the bonds.
Covenants
The covenants contained in the indenture will be incorporated by
reference, with appropriate substitution of parties, in the debt service reserve
letter of credit and reimbursement agreement as if described in full in the debt
service reserve letter of credit and reimbursement agreement.
Debt Service Reserve Letter of Credit Events of Default
Each of the following will be an event of default under the debt
service reserve letter of credit and reimbursement agreement: (1) any amount due
under the debt service reserve letter of credit and reimbursement agreement or
any debt service reserve letter of credit note is not paid in full within 15
days after the due date ; (2) an "event of default" under the indenture has
occurred and is continuing or (3) an "event of default" under the construction
period letter of credit and reimbursement agreement has occurred and is
continuing.
Remedies
Upon the occurrence and during the continuation of an event of default
under the debt service reserve letter of credit, at the request of the banks
holding 66-2/3% or more of the debt service reserve letter of credit commitment,
the debt service reserve letter of credit provider may (1) after notice as
required in the financing documents, terminate the debt service reserve letter
of credit, (2) declare all amounts owing under the debt service reserve letter
of credit and reimbursement agreement and any debt service reserve letter of
credit note to be forthwith due and payable, including amounts not yet advanced
under the debt service reserve letter of credit, which will upon being so
advanced be and become immediately due and payable, whereupon the obligations
will become and be due and payable, without presentment, demand or protest; (3)
terminate our ability to cause the reinstatement of the stated amount through
the reimbursement of drawings; and (4) terminate our ability of to continue any
debt service reserve letter of credit loans as, or to convert debt service
reserve letter of credit loans to, Eurodollar rate loans so long as the debt
service reserve letter of credit provider does not have the right to exercise
any other remedies except in accordance with the provisions of the collateral
agency agreement.
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Construction Period Letter of Credit and Reimbursement Agreement
Dresdner Bank AG, New York Branch, under a construction period letter
of credit and reimbursement agreement, issued the construction period letter of
credit for our account in the amount of $30,000,000 and in favor of Williams
Energy. Williams Energy may make drawings under the construction period letter
of credit if our facility has not achieved the commercial operation date by the
date specified in the power purchase agreement, as the date may be extended in
accordance with the provisions of the power purchase agreement.
Subject to the conditions of drawing, the construction period letter of
credit will mature, expire or terminate on the earliest to occur of (1) the date
on which the construction period letter of credit provider receives notice from
Williams Energy that the commercial operation date has occurred; (2) four years
from the date of issuance of the construction period letter of credit; and (3)
the occurrence of an event of default under the construction period letter of
credit. The construction period letter of credit; however, will not be
terminated upon the occurrence of an event of default under the construction
period letter of credit without the construction period letter of credit
provider first giving the collateral agent and Williams Energy written notice at
least 45 days prior to the termination. The construction period letter of credit
provider must also provide a copy of the written notice to us at the time the
notice is given to the collateral agent and Williams Energy.
We will have the right to terminate or reduce the construction period
letter of credit upon the receipt by the construction period letter of credit
provider of notice from Williams Energy consenting to the termination or
reduction. The amount available for drawing under the construction period letter
of credit will be reduced upon making draws thereunder.
Construction Period Letter of Credit Loans
Each drawing on the construction period letter of credit will
constitute the making by the construction period letter of credit provider of a
loan. We must pay interest on the unpaid principal amount of each outstanding
construction period letter of credit loan from the date the construction period
letter of credit loan is made until the principal amount has been repaid in full
at a rate per annum equal, at our option of, to either (1) the adjusted base
rate plus the applicable margin or (2) the Eurodollar rate plus the applicable
margin. The adjusted base rate will equal the higher of (1) the federal funds
rate plus 0.50% and (2) the rate of interest officially announced or published
by the construction period letter of credit provider as its "prime" or
"reference" rate. The Eurodollar rate will be determined by reference to the
offered rates that appear on Telerate page 3750 for deposits in dollars two
London banking days prior to the date on which the rate is to become applicable
to a construction period letter of credit loan.
The construction period letter of credit loan will be evidenced by a
note in favor of the construction period letter of credit provider. We must pay
the interest on and repay the principal amount, based on mortgage-style
amortizations, of any construction period letter of credit loan out of cash
available in the revenue account at the same level as interest on and the
principal of the bonds. Each construction period letter of credit loan will
mature 10 years after the date the construction period letter of credit loan is
made.
Covenants
The covenants contained in the indenture will be incorporated by
reference, with appropriate substitution of parties, in the construction period
letter of credit and reimbursement agreement as if described in full in the
construction period letter of credit and reimbursement agreement.
Construction Period Letter of Credit Events of Default
Each of the following will be an event of default under the
construction period letter of credit and reimbursement agreement: (1) any amount
due under the construction period letter of credit and reimbursement agreement
or any construction period letter of credit note is not paid in full within 15
days after the due date; (2) an "event of default" under the indenture has
occurred and is continuing; and (3) an "event of default" under the debt service
reserve letter of credit and reimbursement agreement has occurred and is
continuing.
Remedies
Upon the occurrence and during the continuation of an event of default
under the construction period letter of credit, at the request of the banks
holding 2/3 or more of the construction period letter of credit commitment, the
construction period letter of credit provider may (1) terminate the construction
period letter of credit, (2) declare all amounts owing under the construction
period letter of credit and reimbursement agreement and any construction period
104
<PAGE>
letter of credit note to be forthwith due and payable, including amounts not yet
advanced under the construction period letter of credit, which will upon being
so advanced be and become immediately due and payable, whereupon the obligations
will become and be due and payable, without presentment, demand or protest and
(3) terminate our ability to continue construction period letter of credit loans
as or to convert construction period letter of credit loans to Eurodollar rate
loans so long as the construction period letter of credit provider does not have
the right to exercise any other remedies except in accordance with the
provisions of the collateral agency agreement.
Equity Subscription Agreement
Under an equity subscription agreement entered into by and among us,
AES Ironwood, Inc. and the collateral agent, AES Ironwood, Inc. has agreed to
contribute equity, or make or cause to be made subordinated loans, to us from
time to time during the construction period (each loan, an "equity
contribution") at the request of the collateral agent, if the amounts then on
deposit in the construction account are insufficient to make the transfers
required to pay project costs as specified in the collateral agency agreement.
The obligation of AES Ironwood, Inc. to make equity contributions is supported
by bonds issued by an insurance company. The AES Corporation is obligated to
repay the insurance company any amounts drawn under the bonds. If AES Ironwood,
Inc. fails to pay any amounts due under the equity subscription agreement, the
collateral agent can draw on these insurance company bonds for payment of the
necessary amount. AES Ironwood, Inc.'s obligation to make equity contributions
will commence when all proceeds of the offering of the old bonds have been
utilized but will not at any time exceed, in the aggregate, $50,149,285. All
equity contributions will be deposited in the construction account and applied
as described under "--Collateral Agency Agreement--Construction Account."
The equity subscription agreement also provides that upon the
occurrence of an event of default under the indenture, AES Ironwood, Inc. will
be obligated to make an equity contribution to us in an amount equal to
$50,149,285 less the aggregate of all equity contributions previously deposited
into the construction account. Any equity contribution following an event of
default will be deposited in the construction account and may be used to prepay
bonds and other outstanding senior permitted indebtedness in accordance with the
terms of the collateral agency agreement.
Subject to specified conditions under the equity subscription
agreement, any "excess" equity which remains committed but unfunded at Final
Acceptance may be canceled. Conditions to the cancellation of the "excess"
equity commitments include (1) the absence of any default or event of default
under the indenture or any other financing document, (2) achievement of final
completion, (3) the occurrence of the commercial operation date and (4) funding
of all accounts, including the debt service reserve account, under, and to the
extent required by, the indenture and the collateral agency agreement.
Consents to Assignments
In connection with the collateral assignment of all contract rights
held by us, including rights under our project contracts, the collateral agent
will receive an executed consent to assignment from third parties party to the
project contracts. In each consent, the applicable third party will, in respect
of our project contracts to which it is a party, among other matters, (1)
consent to the collateral assignment to the collateral agent on behalf of the
senior creditors, (2) agree to pay all amounts, if any, receivable by us
thereunder directly into the revenue account created under the collateral agency
agreement, (3) agree to matters concerning the exercise of remedies by the
collateral agent upon an event of default under the collateral agency agreement
and (4) agree to the exercise by the senior creditors of specific cure rights
with respect to our project contracts.
Mortgage
We, as mortgagor, will enter into the mortgage and will mortgage and
grant a security interest to the collateral agent for the benefit of the senior
creditors all of our rights, titles and interests in and to all real property
interests, including fee interests, easement interests and leasehold interests,
if any, to the facility site, our facility and any easements and all fixtures,
equipment and improvements, all accounts, subject to the terms of the indenture,
and personal property now owned or hereafter acquired. our rights in any leases
affecting the real property, including rights to receive income, will be
assigned by us to the collateral agent under the assignment of leases and
income.
The events of default under the mortgage incorporate by reference those
provided in the indenture. Under the terms of the mortgage, the collateral agent
may, upon the occurrence and during the continuance of an event of default and
satisfaction of conditions contained in the collateral agency agreement, take
possession of all collateral covered by the mortgage.
105
<PAGE>
Proceeds from the exercise of remedies under the mortgage will be
applied in accordance with the security documents and the collateral agency
agreement.
Security Agreement
We will enter into the security agreement with the collateral agent for
the benefit of the senior creditors providing for the granting of a security
interest in all of our personal property interests including, but not limited
to, all contract rights, equipment, receivables, accounts, insurance proceeds,
eminent domain proceeds, rights under any governmental approval, to the extent
permitted by applicable law, and patents and trademarks, including all proceeds
and all documents evidencing all monies and investment therein. Upon the
occurrence of a Trigger Event under the collateral agency agreement, remedies
may be exercised under the security agreement.
Under the terms of the security agreement, the collateral agent may,
upon the occurrence and during the continuance of an event of default and
satisfaction of conditions contained in the collateral agency agreement, take
possession of all of the collateral covered by the security agreement.
Proceeds from the exercise of remedies under the security agreement
will be applied in accordance with the security documents.
Pledge Agreement
Under the pledge agreement to be entered into by AES Ironwood, Inc. in
favor of the collateral agent, AES Ironwood, Inc. will pledge to the collateral
agent, acting on behalf of the senior creditors, all of its ownership interests
in our company, and all rights under or derived therefrom, currently owned or
later acquired and all distributions, cash, instruments and other property and
proceeds, and all rights associated therewith, from time to time receivable or
otherwise distributable with respect to or in exchange for the ownership
interests.
106
<PAGE>
PLAN OF DISTRIBUTION
Except as described below, a broker-dealer may not participate in the
exchange offer in connection with a distribution of the new bonds. Each
broker-dealer that receives new bonds for its own account under the exchange
offer must acknowledge that it will deliver a prospectus in connection with any
resale of the new bonds. Based on SEC staff interpretations, a broker-dealer
could use this prospectus, as it may be amended or supplemented from time to
time, in connection with resales of new bonds received in the exchange offer
where the beneficial interests in old bonds for which they were exchanged were
acquired as a result of market-making activities or other trading activities. We
have agreed that for a period not to exceed 270 days to make this prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any resale. In addition, until 120 days after the consummation of the
exchange offer, all dealers effecting transactions in the new bonds may be
required to deliver a prospectus.
The information described above concerning SEC staff interpretations is
not intended to constitute legal advice, and broker-dealers should consult their
own legal advisors with respect to these matters.
We will not receive any proceeds from the exchange offer or any sale of
new bonds by broker-dealers. New bonds received by broker-dealers for their own
account under the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the new bonds or a combination of those methods of
resale, at market prices prevailing at the time of resale, at the time of
resale, at prices related to those prevailing market prices or negotiated
prices. Any resale may be made directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from any broker-dealer and/or the purchasers of any new bonds. Any
broker-dealer that resells new bonds that were received by it for its own
account under the exchange offer and any broker or dealer that participates in a
distribution of the new bonds may be deemed to be an "underwriter" within the
meaning of the Securities Act and any profit on any resale of new bonds and any
commissions or concessions received by any of those persons may be deemed to be
underwriting compensation under the Securities Act. Any broker or dealer
registered under the Exchange Act who holds old bonds that were acquired for its
own account as a result of market-making activities or other trading activities,
other than old bonds acquired directly from us, may exchange those old bonds
under the exchange offer; however, that broker or dealer may be deemed to be an
"underwriter" within the meaning of the Securities Act and must, therefore,
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of the new bonds received by the broker or dealer in
the exchange offer. This prospectus delivery requirement may be satisfied by the
delivery by that broker or dealer of this prospectus. The letter of transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
We have agreed to pay the expenses of registration of the new bonds and
will indemnify the holders of the new bonds, including any broker-dealers,
against certain liabilities, including liabilities under the Securities Act.
Prior to the exchange offer, there has been no public market for the
old bonds. We do not intend to apply for listing of the new bonds on any
securities exchange. There can be no assurance that an active market for the new
bonds will develop. To the extent that a market for the new bonds develops, the
market value of the new bonds will depend on market conditions (including yields
on alternative investments general economic conditions), our financial condition
and other conditions. Those conditions might cause the new bonds, to the extent
that they are actively traded, to trade at a significant discount from face
value. We have not entered into any arrangement or understanding with any person
to distribute the new bonds to be received in the exchange offer.
We have not agreed to compensate broker-dealers who effect the exchange
of old bonds on behalf of holders.
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
Because the new bonds will be identical to the old bonds in all
relevant economic respects, the exchange of the old bonds for the new bonds will
not be treated as an exchange for United States federal income tax purposes.
Consequently, there will be no United States federal income tax consequences to
the exchange, and holders of the new bonds will continue to account for the
bonds for federal income tax purposes as if the exchange had not taken place.
LEGAL MATTERS
The validity of the new bonds will be passed upon for us by Hunton &
Williams, New York, New York.
107
<PAGE>
EXPERTS
The independent engineer's report included as Annex B to this
prospectus has been prepared by Stone & Webster and is included herein in
reliance upon the authority of the firm and its affiliates as experts in the
review of the design, construction and operation of electric generating
facilities. The independent power consultant's report included as Annex C to
this prospectus has been prepared by Hagler Bailly and is included herein in
reliance upon the authority of the firm as experts in the analysis of power
markets, including future market demand, future market prices for electric
energy and capacity and related matters, for electric generating facilities.
This document has been prepared by the management of our company and
includes financial statements audited by Deloitte & Touche LLP as stated in
their independent auditors' report accompanying those financial statements.
These financial statements are included in this prospectus in reliance upon the
independent auditors' report of the firm given upon their authority as experts
in accounting and auditing. The management of our company is responsible for the
accuracy and completeness of this document, including the "Prospective Financial
Information" appearing in Annex B, and Deloitte & Touche LLP makes no warranty
as to any of the information contained herein, and no representations except as
contained in its independent auditors' report.
WHERE YOU CAN FIND MORE INFORMATION
Upon consummation of the exchange offer, we will be subject to the
informational requirements of the Exchange Act and will file reports and other
information with the SEC. Reports and other information filed by us with the SEC
can be inspected without charge and copied, upon payment of prescribed rates, at
the public reference facilities maintained by the SEC located at Room 1024, 450
Fifth Street, NW, Washington, DC 20549, and at the regional offices of the SEC
located at 7 World Trade Center, 13th Floor, New York, New York 10048 and the
Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of the material and any part will also be available by mail
from the Public Reference Section of the SEC, located at 450 Fifth Street, NW,
Washington, DC 20549, at prescribed rates.
The AES Corporation and The Williams Companies, Inc. are subject to the
informational requirements of the Exchange Act and, in accordance, file reports,
proxy statements and other information, including financial statements, with the
SEC. The reports, proxy statements and other information may be inspected
without charge and copied, upon payment of prescribed rates, at the offices of
the SEC located at Room 1024, 450 Fifth Street, NW, Washington, DC 20549, and at
the regional offices of the SEC located at 7 World Trade Center, 13th Floor, New
York, New York 10048 and the Northwest Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of the material and any part
will also be available by mail from the Public Reference Section of the SEC,
located at 450 Fifth Street, NW, Washington, DC 20549.
The SEC also maintains a Website that contains reports and other
information regarding registrants that file electronically with the SEC. The
address of that site is (http:\\www.sec.gov).
108
<PAGE>
AES IRONWOOD, L.L.C.
(A Development Stage Enterprise, An Indirect Wholly Owned
Subsidiary of The AES Corporation, Inc.)
Index to Financial Statements for the Period
from June 25 through December 31, 1999
Page
Independent Auditors' Report.................................................F-2
Balance Sheet................................................................F-3
Statement of Operations......................................................F-4
Statement of Changes in Member's Deficit.....................................F-5
Statement of Cash Flows......................................................F-6
Notes to Financial Statements................................................F-7
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Member of
AES Ironwood, L.L.C.:
We have audited the accompanying balance sheet of AES Ironwood, L.L.C. (an
indirect wholly owned subsidiary of The AES Corporation, Inc. and a development
stage enterprise) (the Company) as of December 31, 1999, and the related
statements of operations, changes in member's deficit and cash flows for the
period from June 25, 1999 (inception) through December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of AES Ironwood, L.L.C., as of December 31,
1999, and the results of its operations and its cash flows for the period from
June 25, 1999 (inception) through December 31, 1999, in conformity with
generally accepted accounting principles.
/s/ Deloitte & Touche LLP
McLean, Virginia
January 31, 2000
F-2
<PAGE>
AES IRONWOOD, L.L.C. (A Development Stage Enterprise)
BALANCE SHEET
DECEMBER 31, 1999
(In Thousands)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash $ 633
Interest receivable 437
Investments held by trustee - at cost, which approximates market value 22,568
----------
Total current assets 23,638
LAND 528
CONSTRUCTION IN PROGRESS 244,563
CERTIFICATE OF DEPOSIT 385
DEFERRED FINANCING COSTS - Net of accumulated amortization of $44 2,447
INVESTMENTS HELD BY TRUSTEE - at cost, which approximates market value 68,145
OTHER ASSETS 317
----------
TOTAL ASSETS $ 340,023
==========
LIABILITIES AND MEMBER'S DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 20,139
Accrued interest 2,429
Payable to affiliates 918
Payable to parent 442
----------
Total current liabilities 23,928
RETENTION PAYABLE 10,236
BONDS PAYABLE 308,500
----------
Total liabilities 342,664
----------
COMMITMENTS (Notes 4, 5, 6, and 7)
MEMBER'S DEFICIT:
Common stock, $1 par value - 10 shares authorized, none issued or outstanding --
Accumulated deficit (2,641)
-----------
Total member's deficit (2,641)
-----------
TOTAL LIABILITIES AND MEMBER'S DEFICIT $ 340,023
==========
</TABLE>
See notes to financial statements.
F-3
<PAGE>
AES IRONWOOD, L.L.C. (A Development Stage Enterprise)
STATEMENT OF OPERATIONS
PERIOD FROM JUNE 25, 1999 (INCEPTION) THROUGH DECEMBER 31, 1999
(In Thousands)
- --------------------------------------------------------------------------------
OPERATING EXPENSES:
General and administrative costs $ (169)
----------
Operating loss (169)
OTHER INCOME/EXPENSE:
Interest income 3,283
Interest expense (5,755)
----------
NET LOSS $ (2,641)
==========
See notes to financial statements.
F-4
<PAGE>
AES IRONWOOD, L.L.C. (A Development Stage Enterprise)
STATEMENT OF CHANGES IN MEMBER'S DEFICIT
PERIOD FROM JUNE 25, 1999 (INCEPTION) THROUGH DECEMBER 31, 1999
(In Thousands)
- --------------------------------------------------------------------------------
Common
Stock Accumulated
--------------- ------------------
Shares Amount Deficit Total
------ ------ ------- -------
BALANCE, JUNE 25, 1999 -- $ -- $ -- $ --
Net loss -- -- (2,641) (2,641)
------ ------ ------- -------
BALANCE, DECEMBER 31, 1999 -- $ -- $(2,641) $(2,641)
====== ====== ======= =======
See notes to financial statements.
F-5
<PAGE>
AES IRONWOOD, L.L.C. (A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JUNE 25, 1999 (INCEPTION) THROUGH DECEMBER 31, 1999
(In Thousands)
- -------------------------------------------------------------------------------
OPERATING ACTIVITIES
Net loss $ (2,641)
Amortization of deferred financing costs 44
Change in:
Interest receivable (437)
Accrued interest 1,742
---------
Net cash used in operating activities (1,292)
INVESTING ACTIVITIES:
Payments for construction in progress (212,526)
Payments for land (528)
Payments to debt service reserve (90,713)
Purchase of other assets (317)
Net cash used in investing activities (304,084)
---------
FINANCING ACTIVITIES:
Proceeds from project debt issuance 308,500
Payments for deferred financing costs (2,491)
---------
Net cash provided by financing activities 306,009
---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 633
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD --
---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 633
=========
SUPPLEMENTAL DISCLOSURE:
Interest paid $ 11,764
=========
See notes to financial statements.
F-6
<PAGE>
AES IRONWOOD, L.L.C. (A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD FROM JUNE 25, 1999 (INCEPTION) THROUGH DECEMBER 31, 1999
- --------------------------------------------------------------------------------
1. ORGANIZATION
AES, Ironwood, L.L.C. (the Company) was incorporated on October 30,
1998, in the state of Delaware, to develop, construct, and operate a
705-megawatt (MW) gas-fired, combined cycle electric generating
facility in South Lebanon Township, Pennsylvania (the Plant). The
Company was considered dormant until June 25, 1999, at which time the
project financing and certain related agreements were consummated
(hereinafter, inception). The Plant, currently under construction, will
consist of two Westinghouse 501 G combustion turbines, two heat
recovery steam generators, and one steam turbine. The Plant will
produce and sell electricity, as well as provide fuel conversion and
ancillary services, solely to Williams Energy Marketing and Trading
Company (Williams) under a power purchase agreement (the PPA) with a
term of 20 years that will commence on the Plant's anticipated
commercial operation date, June 30, 2001 (see Note 5).
The Company is in the development stage and is not expected to generate
any operating revenues until the Plant achieves commercial operations.
As with any new business venture of this size and nature, operation of
the Plant could be affected by many factors. Management of the Company
believes that the assets of the Company are realizable.
The Company is a wholly owned subsidiary of AES Ironwood, Inc.
(Ironwood), which is a wholly owned subsidiary of The AES Corporation
(AES). Ironwood has no assets other than its ownership interests in the
Company and AES Prescott, L.L.C. (see Note 7). It has no operations and
is not expected to have any operations. Its only income will be from
distributions it receives from the Company and AES Prescott, L.L.C,
once the Company achieves commercial operation. The equity that
Ironwood is to provide to the Company will be provided to Ironwood by
AES, which owns all of the stock of Ironwood. AES files quarterly and
annual audited reports with the Securities and Exchange Commission
under the 1934 Exchange Act, which are publicly available. Ironwood's
equity contribution obligations are required to be supported by either
an insurance bond or letter of credit. Currently those obligations are
supported by an insurance bond issued to the collateral agent (see Note
6).
On June 25, 1999, the Company issued $308.5 million in senior secured
bonds (see Note 4) for the purpose of providing financing for the
construction of the Plant and to fund, through the construction period,
interest payments to the bondholders.
Pursuant to an Equity Subscription Agreement, Ironwood has agreed to
contribute up to approximately $50.1 million to the Company to fund
construction after the bond proceeds have been fully utilized (see Note
4).
2. SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents - The Company considers unrestricted cash on
hand, deposits in banks, and investments with original maturities of
three months or less to be cash and cash equivalents for the purpose of
the statement of cash flows.
F-7
<PAGE>
Investments Held by Trustee - The Company is required to maintain a
construction funding account for the payment of certain qualifying
construction costs and a construction interest account from which
quarterly interest payments are to be made. As of December 31, 1999,
these amounts were fully invested in money market accounts. The
balances in the construction funding account and the construction
interest account were approximately $50 million and $40 million,
respectively, as of December 31, 1999.
Construction in Progress - Costs incurred in developing the Plant,
including progress payments, engineering costs, management and
development fees, interest, and other costs related to construction are
capitalized. Total interest capitalized on the project financing debt
was approximately $8.4 million, as of December 31, 1999. Certain costs
related to construction activities were paid by AES prior to the
issuance of the bonds. These amounts include approximately $105.4
million of construction progress payments and $20.1 million in other
incurred costs. These costs are reflected within construction in
progress, and were reimbursed to AES out of the bond proceeds.
Other Assets - Pursuant to the provisions of 25 Pa. Code Section 127,
Subchapter E, New Source Review, the Company must secure nitrogen oxide
(NOX) Emission Reduction Credits (ERCs) in the amount of 509 tons per
year and volatile organic compound ERCs in the amount of 179 tons
per year prior to the commencement of commercial operations. As of
December 31, 1999, the Company had purchased a portion of the NOX ERCs
which are reported as Other Assets and will be expensed when used upon
commencement of commercial operations.
Deferred Financing Costs - Financing costs are deferred and are being
amortized using the straight-line method over the expected period for
which the financing was obtained, which does not differ materially from
the effective interest method of amortization.
Accounts Payable and Contract Retention Payable - Amounts currently
payable for construction billings and those amounts billed by Siemens
Westinghouse Power Corporation (the Contractor) in accordance with the
engineering, procurement and construction contract (the EPC) but
retained by the Company until construction is complete are included in
accounts payable and contract retention payable, respectively. These
liabilities are expected to be paid from investment balances (bond
proceeds) or equity funding from Ironwood.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires the
Company to make estimates and assumptions that affect reported amounts
of assets and liabilities and disclosures of contingent assets and
liabilities as of the date of the financial statements, as well as the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Income Taxes - The Company is a limited liability corporation and is
treated as a partnership for tax purposes. Therefore, it does not pay
income taxes, and no provision for income taxes has been reflected in
the accompanying financial statements.
Comprehensive Income - In 1999, the Company adopted Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income
(SFAS 130) which establishes rules for the reporting of comprehensive
income and its components. The adoption of SFAS 130 had no impact on
the Company's financial statements as the Company had no items of other
comprehensive income.
Start-Up Costs - In 1999 the Company adopted AICPA Statement of
Position (SOP) 98-5, Reporting on the Costs of Start-Up Activities,
which requires that start-up and organizational costs be expensed as
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<PAGE>
incurred. As such, no costs to which the Statement applies have been
capitalized in the accompanying balance sheet.
Fiscal Year-End - The Company's fiscal year ends on December 31.
3. NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, Statement of Financial Accounting Standards No. 133,
Accounting for Derivative Instruments and Hedging Activities (SFAS
133), which established standards for the accounting and reporting of
derivative financial instruments and hedging activities, was issued. As
amended by SFAS 137, the standard will be adopted by the Company during
fiscal year 2001. The Company is currently evaluating the impact of
such adoption.
4. BONDS PAYABLE
On June 25, 1999, the Company issued $308.5 million of 8.857% senior
secured bonds due 2025 (the Bonds) to qualified institutional buyers
and/or institutional accredited investors, pursuant to a transaction
exempt from registration under the Securities and Exchange Act of 1933
(the Act) in accordance with Rule 144A of the Act. The net proceeds of
the bonds (after deferred financing costs), approximately $306 million,
are to be used to fund the construction of the Plant and, during the
construction period, for interest payments to bondholders.
Interest on the Bonds is payable quarterly in arrears, commencing on
February 28, 2002. The final maturity date for the Bonds is November
30, 2025.
Principal & Interest Repayment Schedule (in thousands):
Year and Interest Principal
2000 $ 27,324
2001 27,324
2002 29,233
2003 31,742
2004 32,780
2005-2025 617,500
---------
Total Payments 765,903
Less Interest portion (457,403)
---------
Principal $ 308,500
=========
Future Maturities of Debt - Scheduled principal maturities of the bonds
at December 31, 1999, are (in thousands):
2000 $ --
2001 --
2002 1,974
2003 4,751
2004 and thereafter 301,775
--------
TOTAL $308,500
========
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<PAGE>
Optional Redemption - The Bonds are subject to optional redemption, in
whole or in part, at any time at a redemption price equal to 100% of
the principal amount plus accrued interest, together with a premium
calculated using a discount rate equal to the interest rate on
comparable U.S. Treasury securities plus 50 basis points.
Mandatory Redemption - The Bonds are subject to mandatory redemption,
in whole or in part, at a redemption price equivalent to 100% of the
principal amount plus accrued interest under certain situations
pursuant to receiving insurance proceeds or liquidated damages from
failure under the EPC with the Contractor or in certain instances in
which payments are received under the PPA with Williams under the event
of default, at which time the Company has terminated the PPA.
Registration Rights - The Company was obligated to register the Bonds
under the Act with the Securities and Exchange Commission within 220
days of the initial sale of the Bonds. The registration was not
completed within the required time frame. As a result, effective
January 30, 2000, the interest rate payable on the Bonds, previously
fixed at 8.875%, increased by 50 basis points.
Collateral for the Bonds consists of the Plant and related facilities,
all agreements relating to the operation of the project, the bank and
investment accounts of the Company, and all ownership interests in the
Company, as prescribed under the trust indenture (the Indenture). The
Company is also bound by a collateral agency agreement (the Collateral
Agency Agreement) and an equity subscription agreement (the Equity
Subscription Agreement).
Indenture - The Indenture contains limitations on the Company incurring
additional indebtedness, granting liens on the Company's property,
distributing equity and paying subordinated indebtedness issued by
affiliates of the Company, entering into transactions with affiliates,
amending, terminating or assigning any of the Company's contracts and
fundamental changes or disposition of assets.
Collateral Agency Agreement - The Collateral Agency Agreement requires
the Company to fund or provide the funding for a debt service reserve
fund, which is expected to commence on June 30, 2001. The amount
required for funding the debt service reserve fund is equal to six
months scheduled payments of principal and interest on the bonds.
Equity Subscription Agreement - The Company, along with Ironwood, has
entered into an Equity Subscription Agreement, pursuant to which
Ironwood has agreed to contribute up to approximately $50.1 million to
the Company to fund project costs. This amount is secured by an
acceptable bond issued by Ironwood. Ironwood will fund these amounts as
they come due upon the earlier of (a) expenditure of all funds that
have been established for construction or (b) the occurrence and during
the continuation of an event of default, as defined under the
Indenture. A portion of this equity requirement may be made in the form
of affiliate debt, between Ironwood and the Company, which is
subordinate to the Bonds.
Covenants - The Indenture, Collateral Agency Agreement, and Equity
Subscription Agreement contain specific covenants and requirements to
be met by the Company.
5. POWER PURCHASE AGREEMENT
The Company and Williams have entered into a PPA for the sale of all
electric energy and capacity produced by the Plant, as well as
ancillary services and fuel conversion services. The term of the PPA is
20 years, commencing when the construction of the Plant is complete and
the Plant is commercially viable to produce electricity and related
capacity, as well as to provide ancillary and fuel conversion services.
Payment obligations to the Company are guaranteed by The Williams
Companies, Inc.
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<PAGE>
Such payment obligations under the guarantee are capped at an amount
equal to 125% of the sum of the principal amounts of the bonds plus the
maximum debt service reserve account required balance. The Company has
provided Williams a guaranty issued by AES of specific payment
obligations should the Plant not achieve commercial operation by June
30, 2001. AES's liability under the guaranty is capped at $30 million.
The Company has the option, and may be required under specific
conditions described in the PPA, to replace the guaranty issued by AES
with a letter of credit issued by a commercial bank. In such case, the
repayment obligations with respect to drawings under the letter of
credit are to be a senior debt obligation of the Company.
Fuel Conversion and Other Services - As instructed by the Company,
Williams has the obligation to deliver, on an exclusive basis, all
quantities of natural gas and fuel oil required by the Plant to
generate electricity or ancillary services, to start-up or shut-down
the plant, and to operate the Plant during any period other than a
start-up, shut-down, or required dispatch by Williams for any reason.
6. COMMITMENTS AND CONTINGENCIES
EPC - The Company has entered into a fixed-price turnkey agreement with
the Contractor for the design, engineering, procurement and
construction of the Plant. The Contractor will provide the Company with
specific combustion turbine maintenance services and spare parts for an
initial term of between eight and ten years under a maintenance service
agreement. As of December 31, 1999, the Company was liable to the
Contractor for a retention payment as part of the total contract price
due at the completion of the contract for approximately $10.2 million.
Water Supply - The Company has entered into a contract with the City of
Lebanon Authority (the Authority) for the purchase of 50 percent of the
water use of the Plant. The contract has a term of 25 years. Costs
associated with the use of water by the Plant under this contract are
based on gallons used per day at prices specified under the contract
terms. The Company has also entered into an agreement with Pennsy
Supply, Inc. which will provide the remaining 50 percent of
the water use of the Plant.
Interconnection Agreement - The Company has entered into an
interconnection agreement with GPU Energy (GPU) to transmit the
electricity generated by the Plant to the transmission grid so that it
may be sold as prescribed under the Company's PPA. The agreement is in
effect for the life of the Plant, yet may be terminated by mutual
consent of both GPU and the Company under certain circumstances as
detailed in the agreement. Costs associated with the agreement are
based on electricity transmitted via GPU at a variable price, the PJM
(Pennsylvania/New Jersey/Maryland) Tariff, as charged by GPU to the
Company, which is comprised of both service cost and asset recovery
cost, as determined by GPU and approved by the Federal Energy
Regulatory Committee (FERC).
Water Supply Pipeline - The Company has entered into two agreements in
relation to the construction of the water supply pipeline. The
first agreement is between the Company and G.L. Marks Contracting,
Inc., for the construction of the water pipeline for approximately $2.5
million. The second agreement is between the Company and Conewago
Enterprises, Inc., for the construction of the pumping station, at an
estimated cost of approximately $3.2 million.
Letter of Credit - The Company also has a letter of credit agreement
outstanding to fund the construction of an access road to the plant
during construction. In connection with this letter of credit, the
Company has made a collateral deposit into a certificate of deposit
account of approximately $385,000, which equals the amount available
under this agreement.
F-11
<PAGE>
Surety Bond Agreement - Ironwood has a surety bond agreement for $50.1
million in relation to its equity subscription agreement. Annual
commitment fees will be assessed based on the amount outstanding during
the year.
7. RELATED PARTY TRANSACTIONS
Effective June 1999, the Company entered into a 27-year development and
construction management agreement with AES Prescott, L.L.C. (Prescott),
another wholly owned subsidiary of Ironwood, to provide certain support
services required by the Company for the development and construction
of the Plant. Under this agreement Prescott will also provide
operations management services for the Plant once commercial operation
is attained. Minimum amounts payable under the contract during the
construction period are $120,000 per month. Once commercial operation
is achieved, payments for operations management services will be
approximately $400,000 per quarter.
During the construction period, the construction management fees will
be paid to Prescott from the investment balances or from equity
funding. Through December 31, 1999, $875,000 in construction management
fees were incurred, were charged to construction in progress, and are
payable to Prescott.
8. FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of the Company's financial instruments have
been determined using available market information. The estimates are
not necessarily indicative of the amounts the Company could realize in
a current market exchange. The use of different market assumptions
and/or estimation methodologies may have a material effect on the
estimated fair value amounts.
The fair value of the Company's restricted investments approximates
their carrying value. The estimated fair value of the Bonds as of
December 31, 1999, based on quoted market prices of similarly rated
bonds with similar maturities, does not differ materially from their
carrying value.
9. SEGMENT INFORMATION
Under the provisions of Statement of Financial Accounting Standards No.
131, Disclosure About Segments of an Enterprise and Related
Information, the Company's business is expected to be operated as one
reportable segment, with operating income or loss being the measure of
performance evaluated by the chief operating decision maker. As
described in Notes 1 and 5, the Company's primary customer will be
Williams, which is expected to provide all of the revenues of the
Company during the term of the PPA.
* * * * * *
F-12
<PAGE>
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ANNEX A
GLOSSARY OF TECHNICAL TERMS
- --------------------------------------------------------------------------------
<PAGE>
I. GLOSSARY OF TECHNICAL TERMS
The following terms will have the following meanings and the meanings
are equally applicable to both the singular and plural forms of the terms
defined. Any term defined below by reference to any agreement or instrument will
have the meaning whether or not the agreement or instrument is in effect. Unless
otherwise specified, any agreement or instrument defined or referred to below
will include any amendments, modifications and supplements and waivers made in
accordance with the terms of the agreement or instrument. Any reference to a
person includes the successors and permitted assigns of that person.
"Change Order" means a written change order by either us or Siemens
Westinghouse, acceptable to the other party, requesting changes within the scope
of the maintenance services agreement.
"Combustion Turbine" means one of our facility's two 501G combustion
turbines furnished by Siemens Westinghouse under the construction agreement or
any replacement 501G combustion turbine furnished by Siemens Westinghouse or one
of its affiliates under the construction agreement.
"Completed Power Purchase Agreement Output Test" means, with respect to
our facility, any Power Purchase Agreement Output Test established as a
Completed Power Purchase Agreement Output Test in accordance with the
construction agreement.
"Completed Performance Tests" means, with respect to our facility, any
Performance Test established as a Completed Performance Test in accordance with
the provisions of the construction agreement.
"Construction Progress Milestone Dates" means the dates, as specified
in the construction agreement, by which the Construction Progress Milestones are
required to have been fully completed in accordance with the standards of
performance described in the construction agreement.
"Construction Progress Milestones" means the construction progress
milestones specified in the construction agreement.
"Delay LD SubCap" means the sub-limit on Siemens Westinghouse's
liability under the construction agreement for delays in completion of our
facility, the aggregate amount of which is equal to 20% of the contract price.
"Dispatch Period" means a period of time during which the Williams
Energy has requested delivery of Net Electric Energy and/or the provision of
ancillary services under the power purchase agreement starting with a beginning
requested dispatch hour and concluding with an ending requested dispatch hour. A
Dispatch Period may continue for more than one calendar day.
"EBH" means the calculated result of equivalent base load hours
incurred by the Combustion Turbines as determined in accordance with the
maintenance services agreement.
"Electric Delivery Point" means the physical point at which Net
Electric Energy and/or ancillary services are delivered and measured.
"Electric Metering Equipment" means the electric meters and associated
equipment, including metering transformers and meters for measuring
kilowatt-hours and reactive volt-ampere hours, owned by Metropolitan Edison,
which will be operated and maintained in accordance with the interconnection
agreement and which will be utilized in determining the amount of Net Electric
Energy and/or ancillary services delivered by us to the Electric Delivery Point
under the power purchase agreement.
"Electrical Output Guarantee" means the guarantee by Siemens
Westinghouse to us that, with respect to the Completed Performance Test, if
Provisional Acceptance or Interim Acceptance occurs prior to Final Acceptance,
at the earlier to occur of Provisional Acceptance or Interim Acceptance, the
average net electrical output of our facility during the Completed Performance
Test will be greater than or equal to the applicable electrical output guarantee
as described in the Warranty Data Sheet.
"Equipment" means all of the materials, apparatus, structures, tools,
supplies or other goods provided by Siemens Westinghouse or any subcontractor
which are incorporated into our facility or provided by Siemens Westinghouse as
part of the Services and retained by us after Final Acceptance in accordance
with the construction agreement.
"Equivalent Starts" means the calculated result of equivalent starts
determined in accordance with the maintenance
services agreement.
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"Final Acceptance Certificate" will mean the certificate submitted by
us to Siemens Westinghouse stating that the final Acceptance requirements under
the construction agreement have been satisfied.
"Final Acceptance" means the achievement or deemed achievement of our
facility's performance under the construction agreement.
"Final CO Date" means December 31, 2001.
"First Paid Extension Option" means our option to extend the commercial
operation date to December 31, 2001, by giving Williams Energy written notice of
the extension no later than April 30, 2001, and paying to Williams Energy a
specified amount by no later than June 30, 2001.
"Free Extension Option" means our option to extend the commercial
operation date to December 31, 2001, if we provide an opinion to Williams Energy
from a third-party engineer that the commercial operation date will occur no
later than December 31, 2001.
"Gas Interconnection Facilities" means the interconnection and delivery
facilities necessary for delivery of natural gas (including the Gas Metering
Equipment, but excluding compressors).
"Gas Metering Equipment" means gas meters and associated equipment
utilized in determining the amount of natural gas delivered to us by the
Williams Energy under the power purchase agreement, and the amount of natural
gas consumed by our facility.
"Guaranteed Completion Date" means the date which is 24 months after
the delivery by us to Siemens Westinghouse of the notice to proceed under the
construction agreement.
"Guaranteed Emissions Limits" means the standards for emission by our
facility of all gaseous, particulate, liquid and noise pollutants as described
in the Warranty Data Sheet and the other or more stringent standards (if any)
under all applicable laws and applicable permits.
"Guaranteed Final Acceptance Date" means twelve (12) months after the
Guaranteed Provisional Acceptance Date, unless on or before the end of the
twelve (12) month period (1) our facility has achieved Interim Acceptance or (2)
our facility has achieved Provisional Acceptance and Siemens Westinghouse will
have submitted a Plan to us and the independent engineer that demonstrates to
our reasonable satisfaction and to that of the independent engineer that Siemens
Westinghouse will achieve Interim Acceptance of our facility on or before the
date that is twenty-four (24) months after the Guaranteed Provisional Acceptance
Date, in either of which cases the Guaranteed Final Acceptance Date will be
twenty-four (24) months after the Guaranteed Provisional Acceptance Date and in
any case which date is subject to adjustment as expressly provided in the
construction agreement.
"Guaranteed Provisional Acceptance Date" means February 28, 2001, which
date is subject to adjustment as expressly provided in the construction
agreement.
"Heat Rate Guarantee" means the guarantee by Siemens Westinghouse to us
that if Provisional Acceptance and/or Interim Acceptance occurs prior to Final
Acceptance, at the Provisional Acceptance and Interim Acceptance of our
facility, the net heat rate of our facility during the Completed Performance
Test, calculated in BTUs per kilowatt-hour, will be equal to or less than the
applicable heat rate guarantee as described in the Warranty Data Sheet.
"Initial Start-Up Testing" means the operation and testing of our
facility prior to the commercial operation date, including performance tests, to
determine, among other things, the operating characteristics of our facility,
our facility's capacity and our facility's ability to meet our obligations under
the power purchase agreement.
"Interconnection Facilities" means all structures, facilities,
equipment, auxiliary equipment, devices and apparatus including the Protective
Apparatus directly or indirectly required and installed to interconnect and
deliver Net Electric Energy and ancillary services from our facility to the
Electric Delivery Point including electric transmission and/or distribution
lines, transformation, switching, Electric Metering Equipment, any other
metering equipment, communications, and safety equipment, including equipment
required to protect (1) the Metropolitan Edison's electrical system and its
customers from faults occurring at our facility and (2) our facility from faults
occurring on Metropolitan Edison's electrical system or on the electrical
systems of others to which the Metropolitan Edison's electrical system is
directly or indirectly connected.
"Interim Acceptance Certificate" will mean the certificate submitted by
us to Siemens Westinghouse stating that the Interim Acceptance requirements
under the construction agreement have been satisfied.
"Interim Acceptance" means the achievement of performance of the
"Services" under the construction agreement.
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<PAGE>
"Interim Period" means the period of time, if any, commencing with the
earlier to occur of Provisional Acceptance or Interim Acceptance of our facility
and ending at Final Acceptance.
"Mechanical Completion Certificate" means the certificate submitted by
us to Siemens Westinghouse stating that the Mechanical Completion requirements
under the construction agreement have been satisfied.
"Mechanical Completion" means the mechanical completion of our facility
under the provisions of the construction agreement.
"Miscellaneous Hardware" means miscellaneous hardware items including
but not limited to pins, springs, studs, gaskets, tie wires, fasteners, screws,
washers, nuts, bolts which are required to roll out and roll in the Program
Parts which is supplied by Siemens Westinghouse under the maintenance services
agreement or in accordance with a Change Order.
"Net Electric Energy" means the gross amount of electric energy
generated by our facility at the direction of the Williams Energy, less station
service requirements and any transformation and transmission line losses to the
Electric Delivery Point, and delivered by us to the Metropolitan Edison's
electric system at the Electric Delivery Point.
"New Program Parts" means the Program Part(s) which are supplied by
Siemens Westinghouse under maintenance services agreement, when they are new and
unused.
"Notice of Final Acceptance" means the notice delivered by Siemens
Westinghouse to us stating that it believes that it has achieved Final
Acceptance of our facility.
"Notice of Interim Acceptance" means the notice delivered by Siemens
Westinghouse to us stating that it believes that it has achieved Interim
Acceptance of our facility.
"Notice of Mechanical Completion" means the notice delivered by Siemens
Westinghouse to us stating that it believes that it has achieved Mechanical
Completion of our facility.
"Notice of Project Completion" means the notice delivered by Siemens
Westinghouse to us stating that the Project Completion requirements under the
construction agreement have been satisfied.
"Notice of Provisional Acceptance" will mean the notice delivered by
Siemens Westinghouse to us stating it has achieved Provisional Acceptance of the
Facility.
"Notice of Reliability Guarantee Achievement" will mean the notice
delivered by Siemens Westinghouse to us stating it has achieved the Reliability
Guarantee.
"Oil Delivery Point" means the physical point at which fuel oil is
delivered and measured.
"Oil Metering Equipment" means the oil meters and associated equipment
utilized in determining the amount of fuel oil delivered to us by Williams
Energy and the amount of fuel oil consumed by our facility.
"Payment and Milestone Schedule" means the schedule of payments and
milestones as described in the construction agreement.
"Performance Guarantee" means the guarantee by Siemens Westinghouse to
us that (1) our facility will be capable of achieving all the applicable
performance specifications referred to in the construction agreement during a
Completed Performance Test at the earlier to occur of Provisional Acceptance or
Interim Acceptance of our facility and (2) our facility will be capable of
achieving all the applicable performance specifications referred to in the
construction agreement during a Completed Performance Test at Final Acceptance
of our facility.
"Performance Guarantee Payments" means the payments by Siemens
Westinghouse to us as rebates if (1) our facility fails to achieve the natural
gas-based Heat Rate Guarantee during the period, if any, commencing with the
earlier to occur of Provisional Acceptance and Interim Acceptance of our
facility and continuing until Final Acceptance of our facility, (2) our facility
fails to achieve the natural gas-based Electrical Output Guarantee during the
period, if any, commencing with the earlier to occur of Provisional Acceptance
and Interim Acceptance and continuing until Final Acceptance of the Facility, or
(3) our facility fails to achieve any of the applicable natural gas-based and
fuel oil-based Performance Guarantees at Final Acceptance of our facility, as
the case may be.
"Performance Tests" means the operation of our facility by or on behalf
of Siemens Westinghouse in accordance with the provisions of the construction
agreement and in accordance with applicable laws, applicable permits, the
electrical interconnection requirements and the Power Purchase Agreement
Operating Requirements, for the purpose of determining the compliance with the
Guaranteed Emissions Limits and the level of achievement of the Performance
Guarantees.
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<PAGE>
"Plan" will mean a written plan prepared by Siemens Westinghouse to
accelerate the performance of the Services as necessary in order to achieve
Final Acceptance of our facility no later than the Guaranteed Final Acceptance
Date.
"Power Factor" means the ratio of real power expressed in watts to
apparent power, expressed in volt- amperes.
"Power Purchase Agreement Operating Requirements" means those
procedures and requirements relating to the operation and maintenance of our
facility described in the power purchase agreement.
"Power Purchase Agreement Output Tests" means the operation of our
facility by or on behalf of Siemens Westinghouse in accordance with the
construction agreement and in accordance with applicable laws, applicable
permits, the electrical interconnection requirements and the Power Purchase
Agreement Operating Requirements for the purpose of determining the level
achievement of Electrical Output Guarantee.
"Program Part(s)" means the number and type of part(s) of the
Combustion Turbine that are listed in the maintenance services agreement.
"Project Completion Certificate" means the certificate delivered by us
to Siemens Westinghouse stating that the Project Completion requirements under
the construction agreement have been satisfied.
"Project Completion Deadline" means one hundred eighty (180) days after
Final Acceptance of our facility.
"Project Completion Payment" means will have the meaning described in
Section 4.7.4 hereof.
"Project Completion" means the acceptance by us of the completed
project from Siemens Westinghouse in accordance with the construction agreement.
"Protective Apparatus" means the equipment and apparatus on our side of
the Electric Delivery Point, including, but not limited to, protective relays,
circuit breakers, necessary or appropriate to isolate our facility from
Metropolitan Edison's electrical system consistent with accepted electrical
practices.
"Protective Gas Apparatus" means the equipment and apparatus on our
side of the Gas Delivery Point necessary to maintain the safety of our facility
consistent with standard gas industry practices.
"Provisional Acceptance" means the achievement of performance pursuant
to the provisions of the construction agreement.
"Provisional Acceptance Certificate" means the certificate delivered by
us to Siemens Westinghouse stating that the Provisional Acceptance requirements
under the construction agreement have been satisfied.
"Punch List" means the list prepared by us with the full cooperation of
Siemens Westinghouse, which list will describe all items of work which remain to
be performed in order to ensure that our facility fully complies with all of the
standards and requirements described in the construction agreement.
"Reliability Guarantee" means the guarantee by Siemens Westinghouse to
us that, in no event later than the occurrence of Final Acceptance of our
facility, our facility will have successfully completed the Reliability Run.
"Reliability Run" means the operation of our facility for forty-five
(45) consecutive days in accordance with applicable laws, applicable permits,
the Guaranteed Emissions Limits, the instruction manual, the electrical
interconnection requirements, the Power Purchase Agreement Operating
Requirements and the construction agreement.
"Retainage" means an amount equal to 5% of each of our scheduled
payments, other than our project completion payment, to Siemens Westinghouse
under the construction agreement, which we may withhold until after Final
Acceptance if the independent engineer fails to confirm the matters certified to
by Siemens Westinghouse in its payment request.
"Risk Transfer Date" means the earlier to occur of (1) delivery by us
of the Provisional Acceptance Certificate the Interim Acceptance Certificate in
the Final Acceptance Certificate or (2) the earlier transfer of our facility to
us upon termination of the Construction Agreement.
"Scheduled Outage" means a planned outage of the applicable Combustion
Turbine, scheduled by us and Siemens Westinghouse, during which the applicable
TFA Services described in the maintenance services agreement will be performed.
A Scheduled Outage will commence when the Combustion Turbine breaker is opened
and will end when Siemens Westinghouse has completed its applicable TFA Services
for the given Scheduled Outage and Siemens Westinghouse has submitted to us
written notice of completion and we have concurred.
A-4
<PAGE>
"Scope Change Order Notice" means a written notice to us issued by
Siemens Westinghouse indicating that we believes a Scope Change Order is
required in connection with the performance of the Services.
"Scope Change Order Request" means a written notice proposal issued and
signed by us requesting a Scope Change, submitted to Siemens Westinghouse by us
pursuant to the construction agreement.
"Scope Change Order" means a written order to Siemens Westinghouse
issued and signed by us authorizing a Scope Change and, if appropriate, an
adjustment in one or more of the contract price, the Guaranteed Completion
Dates, the Payment and Milestone Schedule, the Construction Progress Milestone
Dates, the Project Schedule and the Performance Guarantees or any other
amendment of the terms and conditions of the construction agreement.
"Scope Changes" means any material addition to, deletion from,
suspension of or other modification to our facility or to the quality, function
or intent of our facility, including any addition, deletion, suspension or other
modification which requires a change in one or more of the contract price, the
Guaranteed Completion Dates, the Payment and Milestone Schedule, the
Construction Progress Milestone Dates, the Project Schedule and the Performance
Guarantees.
"Second Paid Extension Option" means our option to extend the Final CO
Date to and including December 31, 2002 by giving Williams Energy written notice
of the estimated extension required no later than October 31, 2001 and paying to
Williams Energy specific amounts for each day of the extension.
"Services" means the services provided by Siemens Westinghouse under
the construction agreement.
"Shop Repair" means shop repair/refurbishment work performed by Siemens
Westinghouse on Program Parts at its manufacturing plant, its services facility
or a suitable facility selected by Siemens Westinghouse.
"Shutdowns" means an actual shutdown of a unit of our facility, as
evidenced by the opening of its Combustion Turbine's breaker, or our facility,
as evidenced by the opening of all of its breakers, immediately following the
ending requested dispatch hour of a Dispatch Period or pursuant to an early
shutdown notice.
"Start-Up Testing Date" means the date our facility would be prepared
to begin Initial Start-Up Testing.
"Start-Ups" means a successful Start-Up of our facility or a unit
necessary to comply with the schedule or request by Williams Energy for a
Dispatch Period for our facility immediately preceding a beginning requested
dispatch hour.
"TFA Services" means the advise and consultation given to our personnel
by a field service representative of Siemens Westinghouse under the maintenance
activities performed by others at the facility site and (2) any of Siemens
Westinghouse's recommended quality assurance procedures for activities performed
at the facility site so long as TFA Services do not include management
supervision or regulation of our personnel, agents or contractors.
"Total LD SubCap" means the limitation Siemens Westinghouse's total
liability for delays in completion together with its liability for any
performance shortfalls, the aggregate amount of which is equal to 45% of the
contract price.
"Transmission System" means the electric transmission facilities amend,
controlled operated by Metropolitan Edison.
"Trigger Event" means (1) an "event of default" under the Indenture and
an acceleration of the indebtedness issued thereunder; (2) an "event of default"
under the debt service reserve letter of credit and reimbursement agreement and
an acceleration of the indebtedness incurred by us thereunder; (3) an "event of
default" under the construction period letter of credit and reimbursement
agreement and an acceleration of the indebtedness incurred by us thereunder; (4)
an "event of default" or the equivalent under any working capital facility and
an acceleration of the indebtedness incurred by us thereunder; or (5) a
bankruptcy event in respect of us and the expiration of the shortest applicable
grace period.
A-5
<PAGE>
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ANNEX B
INDEPENDENT ENGINEER'S REPORT
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<PAGE>
[GRAPHIC OMITTED]
Stone & Webster
Management Consultants, Inc.
- --------------------------------------------------------------------------------
Independent Technical Consultant's Report
on the
AES Ironwood, L.L.C.. Power Project
June 18, 1999
Prepared by
Stone & Webster Management Consultants, Inc.
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LEGAL NOTICE
This report was prepared by Stone & Webster Management Consultants, Inc. with
the assistance of its affiliated company, Stone & Webster Engineering
Corporation, together hereafter referred to as Stone & Webster, expressly for
Lehman Brothers Inc. ("Lehman Brothers"). Neither Stone & Webster, Lehman
Brothers, nor any person acting on their behalf: (a) makes any warranty, express
or implied, with respect to the use of any information or methods disclosed in
this report; or (b) assumes any liability with respect to the use of any
information or methods disclosed in this report.
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Table of Contents
<TABLE>
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1. Executive Summary.............................................................................5
1.1 PROJECT DESCRIPTION...........................................................................6
1.2 CONCLUSIONS...................................................................................7
2. Scope of Work................................................................................12
3. Facility Design..............................................................................13
3.1 FACILITY DESCRIPTION.........................................................................13
3.2 SITE LOCATION AND DESCRIPTION................................................................13
3.3 COMBUSTION TURBINE GENERATOR.................................................................14
3.4 HEAT RECOVERY STEAM GENERATOR................................................................20
3.5 STEAM TURBINE................................................................................20
3.6 ELECTRIC GENERATOR...........................................................................21
3.7 BALANCE OF PLANT SYSTEMS.....................................................................21
3.8 FUEL SYSTEMS.................................................................................26
3.9 ELECTRICAL SYSTEMS...........................................................................28
3.10 SWITCHYARD...................................................................................28
3.11 INSTRUMENT AND CONTROL SYSTEMS...............................................................29
3.12 CIVIL AND STRUCTURAL DESIGN..................................................................29
3.13 INTERCONNECTIONS.............................................................................32
4. Environmental and Permitting.................................................................36
4.1 ENVIRONMENTAL SITE ASSESSMENT................................................................36
4.2 PERMITTING...................................................................................36
5. Project Agreements...........................................................................40
5.1 POWER PURCHASE AGREEMENT.....................................................................40
5.2 INTERCONNECTION AGREEMENT....................................................................43
5.3 ENGINEERING, PROCUREMENT, AND CONSTRUCTION SERVICES..........................................43
5.4 MANAGEMENT AND OPERATIONS AGREEMENT..........................................................48
5.5 SERVICES AGREEMENT...........................................................................49
5.6 EFFLUENT SUPPLY AGREEMENT....................................................................49
5.7 AGREEMENT RELATING TO REAL ESTATE............................................................50
5.8 MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE TFA SERVICES CONTRACT...........50
6. Principal Project Participants...............................................................52
6.1 AES IRONWOOD, LLC............................................................................52
6.2 AES PRESCOTT, LLC............................................................................52
6.3 WILLIAMS ENERGY MARKETING & TRADING COMPANY..................................................52
6.4 SIEMENS WESTINGHOUSE POWER CORPORATION.......................................................53
</TABLE>
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<TABLE>
<S> <C>
7. Assessment of Projected Operating Results....................................................54
7.1 OVERVIEW.....................................................................................54
7.2 PRINCIPAL CONSIDERATIONS AND ASSUMPTIONS.....................................................54
7.3 PROJECT COST.................................................................................56
7.4 POWER PRODUCTION.............................................................................57
7.5 REVENUES.....................................................................................58
7.6 OPERATING EXPENSES...........................................................................59
7.7 FINANCING ASSUMPTIONS........................................................................61
7.8 PROJECTED OPERATING RESULTS..................................................................62
7.9 SENSITIVITY ANALYSES.........................................................................62
7.10 LIQUIDATED DAMAGES ANALYSES..................................................................65
</TABLE>
Exhibit I
Base Case
Increased O&M Sensitivity (Case #1)
Increased Heat Rate Sensitivity (Case #2)
Decreased Availability Sensitivity (Case #3)
Hagler Bailey High Gas Price Sensitivity (Case #4)
Hagler Bailly Low Demand Growth Sensitivity (Case #5)
Exhibit II
Document Log
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1. Executive Summary
Stone & Webster Management Consultants, Inc. is pleased to provide this report
(the "Report") which summarizes our independent technical review (the "Review")
of the proposed AES Ironwood Project (the "Project"). The Project will consist
of a nominal 705 megawatt ("MW") net combined cycle electric generating facility
(the "Facility") to be located in South Lebanon Township, Pennsylvania and the
associated Project documents and agreements.
The Review was conducted by Stone & Webster Management Consultants, Inc. with
the assistance of Stone & Webster Engineering Corporation (collectively, "Stone
& Webster"). The Review was conducted by Stone & Webster for the purpose of
producing this Report on behalf of Lehman Brothers as Initial Purchaser of
certain bonds (the "Bonds") to be issued by AES Ironwood, LLC ("AES Ironwood"),
pursuant to Rule 144A under the Securities Act of 1933, as amended, to finance
the construction and initial start-up and testing of the Facility. The Bonds are
to be offered in the United States to qualified institutional buyers and
institutional accredited investors and in offshore transactions complying with
Regulation S under the Securities Act of 1933 as amended.
The scope of the Review included the conceptual design and interfaces of the
Project; the proposed Siemens Westinghouse Power Corporation ("SWPC") 501G
combustion turbine technology; the projected performance of the Project; the
Phase I site assessments for the Project; the issued permits for the Project;
the technical assumptions utilized in the Pennsylvania/New Jersey/Maryland
("PJM") Market Study prepared by Hagler-Bailly Consulting Inc. ("Hagler Bailly")
and dated June 1, 1999; and the Project's projected operating results through
validation of the Project pro forma and verification of the model results (the
"Projected Operating Results").
Stone & Webster also reviewed the principal contracts and agreements associated
with the Project. These included the Power Purchase Agreement dated February 5,
1999 ("PPA"), the Generation Facility Transmission Interconnection Agreement
with Metropolitan Edison Company ("MET-ED") dated March 23, 1999
("Interconnection Agreement"), the Engineering, Procurement and Construction
Services Agreement dated September 23, 1998 as amended ("EPC Contract"), the
Effluent Supply Agreement dated March 3, 1998 ("ESA"), the Maintenance Program
Parts, Shop Repairs and Scheduled Outage TFA Services Contract dated September
23, 1998 ("Maintenance Services Agreement") and the Agreement Relating to Real
Estate dated October 22, 1998 (collectively the "Project Agreements"). Stone &
Webster reviewed the Project Agreements from a technical and economic standpoint
to assess the adequacy, compatibility, and reasonableness of their terms and
conditions. Stone & Webster made no determination as to the validity and
enforceability of the Project documents and permits. However, for the purposes
of this Report, we have assumed the Project Agreements and contracts will be
fully enforceable in accordance with their respective terms and that all parties
will comply with the provisions of their
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respective agreements. Stone & Webster also conducted a site visit on October
21, 1998 and made general field observations, specifically the existing above
ground condition of the site.
1.1 Project Description
The Project is being developed and will be owned, operated, and maintained by
AES Ironwood. AES Ironwood is a limited liability company, organized and
existing under the laws of Delaware. AES Ironwood was formed to develop,
construct, own, and operate the Project. AES Ironwood is a special purpose
project company and a wholly owned subsidiary of AES Ironwood Inc. AES Ironwood
Inc. is a wholly owned subsidiary of The AES Corporation ("AES"). AES, which was
founded in 1981, is one of the world's largest global power companies and owns
or has an interest in 97 electric generating plants totaling over 26,000 MW in
18 countries. AES also distributes power in Brazil, El Salvador and Argentina,
and heat in Kazakhstan. AES operates gas-fired, oil-fired, hydropower and solid
fuel plants and employs approximately 40,000 people around the world. As of
December 31, 1998, AES had assets worth $10.8 billion. AES Prescott, L.L.C,
("AES Prescott"), a Delaware limited liability company and a wholly owned
subsidiary of AES Ironwood, Inc., will manage the development and construction
of the Project pursuant to a development and construction management agreement
between AES Prescott and AES Ironwood.
The Facility will have a nominal 705 MW designed electric generating capacity
and will be comprised of the following major equipment: two SWPC model 501G
combustion turbines (the "501G") with hydrogen cooled generators, two unfired,
three pressure level reheat heat recovery steam generators ("HRSGs"), one
multicylinder reheat condensing steam turbine with hydrogen cooled generator,
one water cooled condenser using a forced draft cooling tower, one integrated
control system, and a 230 kV switchyard. The combustion turbines, the steam
turbine, and their associated generators will be located indoors. The two HRSGs
and associated auxiliary equipment will be located outdoors.
The Facility will be designed for base load and/or cyclic operation capable of
startup and shutdown on a dispatchable basis. The combustion turbines will
primarily burn natural gas supplied by way of a pipeline with provisions to burn
Jet A ("fuel oil") as a backup fuel. Each combustion turbine will be coupled
with a three pressure level reheat HRSG that will generate steam to operate the
steam turbine. Electrical generators connected to the two combustion turbines
and the steam turbine will be connected to the switchyard through individual
generator step up transformers. These transformers will raise the generated
voltage to 230 kV for connection into the PJM interconnected electrical system.
The Facility will be designed as a zero liquid discharge facility with its raw
water supply requirements coming from two sources: the adjacent Pennsy Supply,
Inc. quarry and the City of Lebanon Wastewater Treatment Plant ("WWTP") by way
of an approximately 6.5 mile effluent ("makeup water") pipeline. Potable water
will also be supplied by the City of Lebanon Authority (the "Authority").
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Stone & Webster reviewed the TRC Environmental Corporation ("TRC") Phase 1
Environmental Site Assessment Reports performed for the site consisting of the
Martin property and the RESCO Products property. The assessment for the Martin
property revealed no evidence of recognized concerns to the subject property.
The only environmental condition identified for the RESCO Products property is
the presence of asbestos in two roofing materials: the tar coating of the Butler
Building/add-on roof and the roof tar paper of a small attached shed at the rear
of the Butler Building. Stone & Webster agrees with TRC's opinion that removal
of these structures and the asbestos is not considered a major environmental
issue.
Electrical power produced by the Project will be sold to Williams Energy
Marketing & Trading Company ("Williams") under the terms of a 20 year PPA. The
PPA calls for Williams to purchase Facility capacity, ancillary services, and
fuel conversion services pursuant to the terms of the PPA. In addition, the PPA
provides for the supply and transport of the natural gas and fuel oil to the
Facility by Williams. The natural gas will be supplied by way of a pipeline to
the site boundary. The fuel oil will be supplied by truck. A two-day fuel oil
supply will be stored in the Facility's fuel oil storage tank.
Following expiration of the 20-year term of the PPA, the Facility will be
operated as a merchant power plant. AES Ironwood will be responsible for the
procurement of fuel and will sell its output directly into the PJM power pool
(or pursuant to bilateral contracts).
Under the terms of the EPC Contract, SWPC, a wholly owned subsidiary of Siemens
Corporation, will act as the primary Contractor and will be responsible for the
engineering, procurement, and construction of the Project on a turnkey, lump-sum
basis. All of SWPC's obligations under the EPC Contract are unconditionally
guaranteed by Siemens Corporation. Siemens Corporation is a wholly owned
subsidiary of Siemens AG and is the entity through which Siemens AG conducts all
of its U.S. business.
The Provisional Notice to Proceed ("PNTP") was provided to SWPC on September 23,
1998 and several milestones have been achieved to date by SWPC. The full Notice
to Proceed ("NTP") will occur at or before financial closing of AES Ironwood.
The Project Guaranteed Provisional Acceptance date is 23 months and two weeks
following NTP.
AES personnel will operate the Facility pursuant to a Management and Operations
Services Agreement ("Operations Agreement") between AES Prescott and AES
Ironwood. The Project will purchase combustion turbine parts, shop repairs, and
scheduled outage services from SWPC.
1.2 Conclusions
Set forth below are the principal findings and conclusions which Stone & Webster
has reached regarding the Project. For a complete understanding of the
estimates, assumptions, and
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calculations upon which these findings and conclusions are based, this Report
should be read in its entirety.
1. The Facility design, as specified in the EPC Contract, is in accordance
with standard industry practice. SWPC possesses the organization and
personnel to execute its obligations under the EPC Contract and the
Maintenance Services Agreement, and is familiar with the construction and
maintenance of large electrical generation facilities. The Project
construction schedule proposed by SWPC is achievable and is consistent
with the terms of the PPA.
2. Stone & Webster views the SWPC 501G combustion turbine as an
advancement in high-temperature advanced technology combustion turbines
for SWPC and is typical of the normal design evolution for manufacturers.
Many of the design concepts incorporated in the 501G are rooted firmly in
the 501 series and are complemented by improvements which have been
tested in the 501F series or predicted by extensive modeling or full
scale testing. The first 501G unit is expected to begin commercial
operation later in 1999. The various 501G components and designs have
been individually shop tested and computer analyzed. SWPC's 501G is
gaining commercial acceptance as demonstrated by the fact that 17 of
SWPC's 501Gs have been sold to date in the United States.
3. The combustion turbines for the Project are scheduled to become the
third and fourth 501Gs in operation. As a result the Project will benefit
from approximately 25 months of facility startup, extensive testing, and
operating experience of the first installation of 501Gs (McIntosh
Project) and approximately nine months of such experience from the second
installation of 501Gs (Millenium Project). Because the 501G has no
commercial operating experience, the initial unit availability of the
501G may be lower in the early years of operation than is the case with
combustion turbine units currently in operation that use mature
technology. Lower initial unit availability has been reflected as in the
Base Case and a sensitivity case has been included in the Projected
Operating Results utilizing lower availability than that set forth in the
Base Case.
4. A sustained period of commercial operation at full load conditions
followed by an inspection of the combustion turbine is necessary to
predict with any certainty the types of startup and operational problems,
if any, that the 501G may encounter. However, the Project will benefit
from the startup testing and inspection programs implemented by SWPC at
the McIntosh and Millenium units. SWPC has also invested in and has
stated that it will make available to the Project a complete set of risk
parts for the entire combustion turbine gas path. In addition, under the
Maintenance Services Agreement SWPC will provide combustion turbine spare
parts to the Project. This full set of gas path risk parts to be made
available by SWPC and the Maintenance Services Agreement long term spare
parts program will minimize the duration of any unscheduled combustion
turbine-related outages that require the replacement of parts by having
the most commonly replaced parts
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readily available. In addition, SWPC has the resources and capabilities
to resolve any problem that may arise with the 501Gs.
5. The steam turbine and electrical generator designs are acceptable and in
accordance with standard industry practice.
6. If designed and constructed in accordance with the EPC Contract and
operated and maintained in accordance with the Maintenance Services
Agreement and the Operations Agreement, the Facility should be capable of
meeting the net output contract requirements specified in the Projected
Operating Results.
7. The liquidated damages provisions of the EPC Contract are reasonable.
The one year warranty period is acceptable based on the commercial terms
of the EPC Contract in conjunction with the one year warranty in the
Maintenance Services Agreement. These two agreements, although
independent, are complementary and afford the Project a greater degree of
protection than is available from the EPC Contract alone. Under both
agreements, SWPC is obligated to notify AES Ironwood of any engineering
or design defects that may be manifested in any of SWPC's fleet of 501Gs.
In addition, the risk of a component failure occurring after the one year
EPC Contract warranty is mitigated because the Projected Operating
Results indicate the Project will have adequate revenues to insure the
purchase of components that can be reasonably assumed to require
replacement. Component failures associated with casualty events are
generally covered by insurance policies. The Performance Testing Plan, as
specified in the EPC Contract, is acceptable, customary, and should
adequately demonstrate the Project's performance.
8. Williams possesses the organization and personnel to execute its
obligations under the PPA, and is familiar with the provision of fuel to,
and purchase of electricity from, large electrical generation facilities.
9. Williams has executed certain agreements with Texas Eastern Transmission
Corporation ("TETCO") to provide natural gas delivery services to AES
Ironwood. These agreements require TETCO to construct own and operate an
approximate three-mile pipeline from the TETCO mainline to the Facility.
Stone & Webster, however, has not independently verified the design of
the natural gas pipeline which will interconnect the Facility to the
interstate gas pipeline that will serve the Facility nor its proposed
construction schedule.
10. The Facility can feasibly be electrically integrated into the PJM system,
and no known transmission limitations will inhibit the feasible
evacuation of the Facility's full net capacity both under summer and
winter conditions.
11. Stone & Webster will independently verify the design of the make-up water
supply pipeline when it becomes available. The proposed pipeline
construction schedule appears reasonable and achievable. Stone & Webster
does not know of any reason why the City of Lebanon Authority should be
unable to perform its obligations under the ESA.
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12. AES Prescott, as an affiliate of AES and with the assistance of SWPC
under the terms of the Maintenance Services Agreement, should be capable
of operating and maintaining the Facility in accordance with standard
industry practices.
13. The technical requirements described in the Project Agreements are
comprehensive, reasonable, and achievable as well as consistent within
and between the various documents.
14. The Phase I environmental site assessments conducted by TRC which
indicated no significant environmental issues were performed in
accordance with standard industry practice and their results appear
reasonable.
15. A majority of the Project's required permits have been acquired and the
Project's permit acquisition plan for those permits not yet required is
reasonable.
16. AES Ironwood has received a determination that the Facility is an Exempt
Wholesale Generator ("EWG") under the applicable rules of Federal Energy
Regulatory Commission ("FERC").
17. Assuming the Facility is constructed, operated, and maintained in
accordance with the terms of the EPC Contract, PPA, the Operations
Agreement, and the Maintenance Services Agreement then it is reasonable
to assume that the Facility will be able to operate in a manner
consistent with applicable permit limits for a period at least equal to
the term of the Bonds.
18. The Project's EPC Contract price is competitive relative to similar
facilities and the Project's proposed operating and maintenance expenses
are consistent with other comparable projects.
19. The technical assumptions utilized in the Hagler Bailly PJM Market Study
Analysis are reasonable.
20. Stone & Webster reviewed the technical and commercial assumptions and the
calculation methodology of the Project financial pro forma model. The
technical assumptions assumed in the Projected Operating Results are
reasonable and are consistent with the Project Agreements. The financial
pro forma model fairly presents, in our judgment, projected revenues and
projected expenses under the Base Case Assumptions. Therefore, the
Projected Operating Results are a reasonable forecast of the Company's
financial results under the Base Case Assumptions.
21. The principal amount of the Bonds, when combined with the equity
contributions and interest earned during the construction period, should
be sufficient to pay the costs of constructing the project and interest
on the Bonds through the end of the construction period.
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22. The projected revenues from the sale of capacity are more than adequate
to pay the annual operating and maintenance expenses (including
provisions for major maintenance), other operating expenses, and debt
service based on Stone & Webster's studies and analyses of the Project
and the assumptions set forth in this Report. The average and minimum
debt service coverage ratios ("DSCR's") for the full term of the Bonds
are 2.30x and 1.45x, respectively. The average and minimum DSCRs during
the PPA period are 1.46x and 1.45x, respectively. The average and minimum
DSCRs during the merchant period for the debt are 5.81x and 5.77x,
respectively.
23. Assuming deficiencies of up to 6% for heat rate and 5% for capacity, the
average DSCRs over the term of the Bonds, after payment of the liquidated
damages due to a failure to achieve heat rate and capacity guarantees,
are projected to remain approximately the same as the DSCRs in the Base
Case.
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2. Scope of Work
Stone & Webster was retained to perform a review of the Project in accordance
with a September 30, 1998 agreement with AES Ironwood, Inc. The review was
conducted by Stone & Webster for the purpose of producing this Report on behalf
of Lehman Brothers as Initial Purchaser of certain Rule 144A bonds to be offered
in the United States by AES Ironwood pursuant to rule 144A under the Securities
Act of 1933 as amended to finance the construction and initial start-up and
testing of the Facility, which bonds are to be issued to qualified institutional
buyers and institutional accredited investors and in offshore transactions
complying with Regulation S under the Securities Act of 1933. The scope of the
Review included the following:
o SWPC 501G combustion turbine proposed as the technology basis of the
Project
o Projected performance of the Project
o Projected Operating & Maintenance ("O&M") expenses
o Conceptual design and interfaces of the Project
o Project Phase I site assessments
o Issued permits for the Project
o Technical assumptions utilized in the PJM market study of June 1,
1999, prepared by Hagler Bailly
o Projected operating results in the Project financial pro forma model
Stone & Webster also reviewed the PPA, the Interconnection Agreement, the EPC
Contract, the ESA, the Maintenance Services Agreement, and the Agreement
Relating to Real Estate from a technical and economic standpoint to assess the
adequacy and reasonableness of their terms and conditions. Stone & Webster has
made no determination as to the validity and enforceability of the Project
Agreements. However, for the purposes of this Report, we have assumed the
Project Agreements will be fully enforceable in accordance with their respective
terms and that all parties will comply with the provisions of their respective
agreements.
Stone & Webster conducted a site visit on October 21, 1998 and made general
field observations, specifically the existing above ground condition of the
site. During the review, Stone & Webster reviewed Project information and
interviewed representatives of both AES and SWPC to verify the adequacy of the
Facility design and reasonableness of the technical assumptions.
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3. Facility Design
Stone & Webster reviewed the design of the Facility and its major components and
interface designs, as specified in Appendix A of the EPC Contract. In general,
Stone & Webster is of the opinion that the Facility design, as specified in the
EPC Contract, is in accordance with standard industry practice and that, if
designed and constructed in accordance with the EPC Contract and operated and
maintained within standard industry practices, the Facility should be capable of
meeting the net output contract requirements specified in the Projected
Operating Results.
3.1 Facility Description
The Facility is designed to have a nominal 705 MW (net) electric generating
capacity and will consist of the following major equipment: two SWPC model 501G
combustion turbines with hydrogen cooled generators, two unfired, three pressure
level reheat HRSGs, one SWPC multi-cylinder reheat condensing steam turbine with
hydrogen-cooled generator, one water cooled condenser using a forced draft
cooling tower, one integrated control system, and a 230 kV switchyard. The
combustion turbines, the steam turbine, and their associated generators will be
located indoors. The two HRSGs and associated auxiliary equipment will be
located outdoors.
The Facility will be configured as a 2 x 1 combined cycle facility designed for
base load and/or cyclic operation capable of startup and shutdown on a
dispatchable basis. The Facility can be operated at various part load conditions
and with one combustion turbine out of service.
3.2 Site Location and Description
The Project site is located in South Lebanon Township approximately one mile
east of the City of Lebanon, adjacent to the Pennsy Supply, Inc. quarry, south
of Route 422 and west of Prescott Road. The site is actively farmed and there
are no wetland resource areas on the site. The site is approximately 35 acres of
industrially zoned land and is landlocked and relatively flat. It is surrounded
by Pennsy Supply quarry tailing piles to the east and north, active quarry pits
to the west and the Conrail mainline to the south. Access to the site will be by
way of a driveway to be constructed by SWPC on Prescott Road, which is a State
Highway that runs north to south. A 50-foot easement has been obtained by AES
Ironwood from Prescott Road across the former Resco Products property that is
parallel to the Conrail tracks. A railspur for the transportation of heavy
equipment to the site will be constructed by the Project to facilitate the
delivery of heavy equipment to the site in this easement.
The October 21, 1998 site visit noted above, which also included a visit to the
WWTP, combined with a review of Project documents provided by AES formed the
basis for our opinion regarding the site. In particular, Stone & Webster relied
on the geotechnical reports prepared by Schnabel in September and October of
1998.
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3.3 Combustion Turbine Generator
The 501G is the latest product offering from SWPC in the design evolution of the
(formerly Westinghouse) 501 series combustion turbine generator. The 501G
combines the latest advancements in SWPC's low NOx combustion technology,
compressor design, blade designs and cooling schemes, with proven fundamental
design concepts of the SWPC 501 series such as two-bearing single-shaft
construction, cold end drive, horizontally split casings, and axial exhaust. The
resulting combustion turbine is an advanced design, more powerful,
high-temperature, highly efficient, low emission producing derivative of the 501
series that is based on design concepts that have evolved with the development
of the 501 series combustion turbines. The result is a derivative that is based
on demonstrated concepts of the 501 series and improvements in design, high
temperature metallurgy, efficiency and lower emissions.
While many of the fundamental design concepts of the 501F combustion turbine
remain unchanged in the 501G, some new component designs are utilized in the
501G combustion turbine. The most significant changes are the introduction of a
steam cooled transition piece and a redesign of the first row turbine blades.
SWPC reports that the design concepts and design criteria as well as some of the
design codes used in the 501G design are the same as in the 501F and that to
produce state-of-the-art compressor and turbine designs, additional aero
industry engine-derived computer codes were used in the 501G design. These codes
were verified against test rig and combustion turbine test results, including
501F shop test results.
Stone & Webster views the 501G combustion turbine as an advancement in
high-temperature advanced technology combustion turbines for SWPC and is typical
of the normal design evolution for manufacturers. Many of the design concepts
are rooted firmly in the 501 series and are complemented by improvements which
have been tested in the 501F series with further refinements predicted from
extensive modeling or full scale testing. Although we note that the combustion
turbine does not have any commercial operating experience as an assembled unit,
the Project will benefit from the testing and monitoring of other 501G units
scheduled to begin commercial operation well before the Project's scheduled
commercial operation date.
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SWPC provided Stone & Webster with a listing of seventeen customers that have
committed to purchasing the 501G. This listing is provided in the following
table:
<TABLE>
<CAPTION>
=======================================================================================================================
501G Customer Listing
=======================================================================================================================
Anticipated Commercial
Number of Units Name of Plant Owner Operation Date
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 McIntosh #5 City of Lakeland, Florida 7/10/99
- -----------------------------------------------------------------------------------------------------------------------
1 Millenium Millenium Power Partners 8/20/00
(U.S. Generating Company)
- -----------------------------------------------------------------------------------------------------------------------
2 AES Ironwood AES Ironwood 5/15/01
- -----------------------------------------------------------------------------------------------------------------------
2 Magic Valley Calpine Corporation 4/01/01
- -----------------------------------------------------------------------------------------------------------------------
11 Letters of Intent Confidential Clients Various
=======================================================================================================================
</TABLE>
The combustion turbines for the Project are currently scheduled to become the
third and fourth 501G combustion turbines in operation. An extensive testing
program for the McIntosh #5 unit began operation in April of 1999. This testing
program will include testing of the engine performance, emissions, thermal and
mechanical performance of components, and other key performance parameters with
over 2000 engine instruments. The engine will then be inspected and engine
instrumentation will be removed prior to commercial operation which will begin
in July of 1999 to satisfy summer peak power needs. This will provide
approximately 25 months of facility start up, extensive testing, and operating
experience prior to AES Ironwood's anticipated COD.
SWPC provided Stone & Webster with an overview of the test instrumentation that
will be utilized at the McIntosh Project. The operations monitoring will employ
1200 temperature, 500 pressure, and 200 strain gauges, which will monitor key
areas of the turbine. The test plan is focused on thermal and performance data
including emissions data, combustion mapping, and thermal paint testing. The
McIntosh #5 program will also include scheduled inspections after the first 200
and 400 equivalent starts to observe the durability of the unit in simple cycle
in cyclic operation. SWPC indicates that it has developed detailed risk
mitigation plans to implement the results of the McIntosh testing program,
including how to best utilize the lessons learned during this testing into the
AES Ironwood and other 501G units. The extensive testing program at the McIntosh
unit should reduce technical risks for the Project because it will provide an
opportunity to validate the 501G design through both testing and actual
operating experience prior to operating the Project's 501G units.
In addition, U. S. Generating Company's Millenium plant, a 1x1 501G combined
cycle unit is scheduled to go into base load operation in mid-2000. As a result,
there will also be approximately nine months of start-up testing amid base load
operation at that unit prior to Ironwood's scheduled COD.
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Because the 501G combustion turbine has no commercial operating experience,
initial unit availability of the 501G may be lower in the early years of
operation than the availability of units, which use more mature technologies.
While SWPC's 501F combustion turbine has reportedly experienced availability
factors greater than 90%, Stone & Webster believes that conservative
availability assumptions should be used for early operation of the 501G. Thus,
we have assumed a conservative availability factor (85%) in the Project
financial pro forma model sensitivity case for the first two years of commercial
operation.
3.3.1 Compressor Section
The purpose of the compressor section of the combustion turbine is to produce
sufficient volumes of pressurized air to support combustion at the combustors,
provide cooling air to various components, and to generate rotational energy by
increasing mass-flow through the turbine section.
The compressor section for the 501G is composed of a 16-stage axial flow design
with a pressure ratio of approximately 19.5:1. The compressor includes
inter-stage bleeds for starting and component cooling in various down-stream
locations. While the compressor design is new, it has conventional variable
inlet guide vanes for improved low-speed surge characteristics and part load
performance. The new design also maintains the use of the inner shroud sealing
system and abradable seals currently in use on the model 501F combustion
turbines.
SWPC developed the new compressor for the 501G using three-dimensional flow
field computer codes through a licensing agreement with Rolls Royce. The new
compressor was designed with the same number of stages as in the 501F
predecessor combustion turbine, but has increased the final pressure ratio and
flow by approximately 25%. To accommodate the increase in flow, SWPC has
increased the mean diameter of the compressor stages. All rotor blades have the
same root design that were used on the 501F, which allows the blades to be
removed with the rotor in place (with the covers off) and should aid in the
maintenance of the machine.
Additionally, the rear stages of the new 501G compressor have larger diameters
than the 501F, which SWPC represents helps balance spindle thrust. The sixteen
stages of compressor blades are fabricated in two 180 degree diaphragms, same as
for the 501F, to facilitate field removal. While the new compressor design does
not have any commercial operating experience, SWPC has undertaken extensive
full-scale testing of the new compressor and the results have met SWPC's
performance expectations and demonstrated the mechanical integrity of the
compressor in a full scale testing environment.
The full scale W501ATS compressor, which is the 501G compressor with four stages
added at the rear, was extensively tested to verify its operational
characteristics, aerodynamic performance and mechanical integrity. The
compressor was instrumented with more than 500 individual sensors. The test
program included starting characteristics optimization, variable stator
optimization,
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design point performance optimization, compressor map definition, blade
vibration and diaphragm strain gauge measurements. The test results confirmed
aerodynamic performance and mechanical predictions. Test results on selected
blades and diaphragms showed excellent correlation of vibration characteristics
between prediction and measurement.
3.3.2 Combustor Section
The combustor section of the combustion turbine mixes and burns the supplied
fuel and compressed air (from the compressor discharge) and produces hot gases
used to rotate the downstream turbine. The combustion system consists of 16
individual combustor "cans" that are mounted circumferentially around the
combustion turbine. The combustors are of the dry low NOx ("DLN") type, have
dual fuel capability, and incorporate recent design changes to eliminate the
coking problems of the 501F when firing oil. This is accomplished through the
use of dual direction water purging and a design change that incorporates an oil
piping configuration that eliminates any trapped oil in the combustor.
Additional design modifications to the dual fuel nozzles or "rockets" improve
flame temperature consistency, thereby eliminating local hot spots within the
flame region.
The latest DLN combustor is a modified version of previous DLN combustors. SWPC
reports that the new combustor has reportedly undergone successful lab tests at
the high pressure facilities located in the Arnold Engineering Development
Center of the U.S. Air Force, in Tullahoma, Tennessee, and SWPC has similar
(though not identical) DLN combustors installed at several locations.
The DLN combustion system and the selective catalytic reduction ("SCR") system
in the HRSG both act to reduce NOx emissions, which are a byproduct of the
combustion process. The system is designed to achieve 4 ppmvd on natural gas and
10 ppmvd on fuel oil, both at 15% O2 at the exhaust stack of the HRSG under base
load conditions.
Another design improvement is the addition of supplementary gas injectors in the
"top hat" section for use while firing in the gaseous fueled mode. According to
SWPC, the "top hat" section promotes better fuel-air mixing and more homogeneous
fuel-air ratios, leading to lower NOx and CO emissions with improved combustor
stability.
The length of the 501G combustor is reduced from its predecessor, the 501F. The
air-cooled aft section of the 501F combustor has been eliminated and
incorporated into a new steam cooled transition piece. This provides two
advantages: steam-cooled transition walls operate cooler than air-cooled walls;
and the air formerly used for cooling is now routed to the head end of the
combustor to make it run leaner while increasing mass flow, output and
efficiency. The new steam cooled transition piece of the 501G is made of Inconel
617 material, and is a significant change from the 501F combustion turbine. The
transition piece is also provided with cooling passages around the
circumference, and in passages on each side of weld seams. The steam
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cooled transition piece receives steam from the intermediate pressure ("IP")
section of the three-pressure HRSG. The transition piece is over-cooled by
approximately 25% at part loads to accommodate an increase in cooling
requirements during a large load increase. The IP boiler is designed for a
capacity 30% greater than the maximum expected transition-cooling requirements.
This conservative design capacity should provide adequate margin to ensure the
security of the steam flow to the transition piece during transient load
conditions. During normal operation at base load (non-transient conditions), the
excess capacity is dumped by way of a control valve to the cold reheat system.
In order to provide even cooling over the length of the transition piece, SWPC
supplies both ends of the transition with steam and collects the heated (hotter)
steam near the center of the transition piece in a collection ring.
The burner outlet temperature of the 501G is approximately the same as the 501F
combustion turbine, but the rotor inlet temperature ("RIT") is approximately
140(degrees)F higher. This increase in rotor inlet temperature is accomplished
through the use of the aforementioned steam cooled transition piece and
improvements in turbine material and cooling improvements, which will be
discussed later in this section.
3.3.3 Turbine Section
The turbine section of the combustion turbine produces the rotational energy
required to drive the compressor and generate electrical power. This is
accomplished in the 501G combustion turbine with approximately 15% fewer turbine
parts than in the 501F.
The 501G combustion turbine has a four-stage turbine section, which incorporates
improved cooling throughout and uses its directional solidified ("DS") blades in
rotating rows one and two. The aerodynamic airfoil shapes were optimized using a
three-dimensional flow analysis.
SWPC has incorporated a series of improvements for the cooling of blades and
vanes in the turbine section which include: use of turbulators; serpentine
cooling passages; shaped film cooling holes; and a more extensive use of an
improved thermal barrier coating application.
The Row 1 vane cooling design is an enhancement of the 501F design, using three
impingement inserts in combination with an array of film-cooling holes and
trailing edge pin-fin system. All three cavities take direct compressor
discharge air to maximize the available pressure head. "Shower Head" cooling is
used at the leading edge of the row one vane, while film cooling is used at
selected pressure and suction side locations which limits vane wall thermal
gradients and external surface temperatures. SWPC represents that the low cycle
fatigue design criteria is satisfied by the control of wall gradients. The Row 2
vane cooling uses twin impingement inserts with film-cooling holes and trailing
edge pin-fin system. Row 3 vanes are convection-cooled by the admission of
cooling air into the airfoil's three-cavity multipass center. Row 4 vanes are
not internally cooled. The metal temperatures of the 501G airfoils are greater
than those of the 501F
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combustion turbine. However, according to SWPC improvements in cooling designs
help maintain metal temperatures safely below metal temperature limits.
The first and second stage blades are manufactured from DS material, and are
cooled by a combination of convection techniques by way of multipass serpentine
passages and trailing edge cooling air ejection. While the DS blades used in
Rows 1 and 2 represent SWPC's first commercial use of this material, this
technology is not new. Rolls Royce, the manufacturer of the SWPC DS blades, has
successfully manufactured DS blades for use in several other manufacturer's
combustion turbines.
Similar to the analysis of the compressor blades and vanes, the design of the
turbine blades and vanes uses three-dimensional flow analysis developed by Rolls
Royce for the development and verification of the aerodynamic airfoil shapes.
3.3.4 Risk Mitigation
SWPC has followed a conservative design process for the 501G combustion turbine,
executed a risk analysis as part of a plan designed to ensure mechanical
integrity, and has invested in a complete set of "risk parts" for the combustion
turbine's entire gas path. This set of "risk parts" alone amounts to an
investment by SWPC of over $10,000,000. This set of risk parts is in addition to
the long-term spare parts program that is included pursuant to the Maintenance
Services Agreement. The risk parts include the compressor blades and diaphragms,
the turbine blades and vane segments, and the combustor system (nozzles,
baskets, and transitions). This investment is significant not only in monetary
terms, but also in terms of unit availability and manufacturer commitment. The
full set of gas path risk parts made available by SWPC and the Maintenance
Services Agreement long term spare parts program will minimize the duration of
any unscheduled combustion turbine-related outages that require the replacement
of parts by having the most commonly replaced parts readily available.
SWPC's risk mitigation program for the 501G Program goes beyond what is
typically utilized during the introduction of a manufacturer's latest model
design. It is strongly supported by a dedicated manufacturing team with stated
component procurement plans, an established parts supply chain, and a proactive
monitoring program designed to quickly incorporate design changes into the parts
inventory program.
3.3.5 CTG Conclusions
A sustained period of operation at full load conditions followed by an
inspection of the combustion turbines is necessary to predict with any certainty
the types of startup and operational problems, if any, that may be encountered
with the 501Gs. However, SWPC has made significant financial and organizational
investments in the 501G technology. Stone & Webster
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believes that SWPC has the resources and capabilities to resolve any problems
that may arise with the 501G.
Because the 501G combustion turbine has no commercial operating experience
initial unit availability of the 501G may be lower in the early years of
operation than the availability of units using mature technologies. While SWPC's
501F combustion turbine has reportedly experienced availability factors greater
than 90%, Stone & Webster believes that conservative availability assumptions
should be used for early operation of the 501G. It is not uncommon in the
industry for new combustion turbines to experience availability factors during
the first years of operation in the mid-eighty percent range. Thus, we have
assumed a conservative availability factor (85%) in the Project financial pro
forma model sensitivity case for the first two years of commercial operation.
3.4 Heat Recovery Steam Generator
Stone & Webster reviewed the functional specification and scope of supply
provided in the EPC Contract and understands that Hangjung has been selected as
the HRSG vendor and that the detailed design specifications will be reviewed by
Stone & Webster. The scope of supply for the HRSG includes the HRSG internals,
ducting, and insulation, the stack, the SCR, the ammonia storage system, the
continuous emissions monitoring system ("CEMS"), and the associated piping,
valves and instrumentation. The CEMS scope includes oxygen, CO, and NOx
analyzers.
The functional specification describes the two HRSG's as being of the horizontal
gas path (vertical tubes), natural water circulation, three pressure level,
reheat type. Each HRSG will have high pressure ("HP"), IP, and low pressure
("LP") superheaters, reheaters, economizers, and evaporator sections. Each HRSG
will be equipped with an SCR system to reduce the stack NOx emission levels and
a spool piece for the possible future addition of a CO catalyst. The HRSGs will
have no duct firing capability. The HRSGs will be designed in accordance with
the ASME Code Section I for pressure parts and ANSI/ASME B31.1 for power piping.
Stone & Webster is of the opinion that HRSG scope description is suitable for
the Project and in accordance with standard industry practice.
3.5 Steam Turbine
The steam turbine will be a model 2F32 two case tandem compound design with a
side exhaust double flow low pressure element. The steam turbine will be
directly connected by rigid coupling to a hydrogen inner-cooled generator, which
produces electrical power.
The steam turbine will consist of a primary turbine inlet, combined HP/IP
turbine, and the double flow LP turbine. The two primary steam supply sources to
the turbine are main and reheat steam. The steam flow to the turbine is
controlled by the main steam and reheat steam inlet valves. The
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HP/IP turbine receives steam from the main steam and reheat steam supply and
converts it to rotational power to drive the generator. The LP turbine receives
steam from the IP exhaust by way of the crossover piping and converts it to
rotational power to drive the generator. The last stage blade design is a model
72R. This design has a 32.1 inch vane section and a 63.4 square foot exhaust
annulus area.
With respect to operational experience, SWPC provided a sample list showing four
existing units of similar configuration but with different loadings or ratings.
SWPC reports an exhaust flow rate of 1,398,070 lb/hr, which leads Stone &
Webster to believe that the exhaust velocity would approach 786 ft/sec. This
rate is within SWPC's experience and is considered by Stone & Webster to be
acceptable. Stone & Webster is of the opinion that the steam turbine design is
acceptable and in accordance with standard industry practice.
3.6 Electric Generator
The three electric generators are designated by SWPC as model 2-97x134. The
generators will be hydrogen inner-cooled synchronous 3600 rpm, 60 Hz machines
rated at 288,000 kVA at 16 kV. The generators will be designed for a leading
power factor of 0.95 and a 0.90 lagging power factor at the generator terminals
at 60 psig hydrogen gas pressure. The generators will have Class F insulation
with Class B temperature rise for both the stator and the rotor. The generators
will have a short circuit ratio of 0.53 at nominal capacity and are to be
fabricated in accordance with ANSI standards C50.10, C50.13, and C50.14, as
appropriate.
Despite the fact that the generator, as described in the EPC Contract, utilizes
a design with little operating experience, it appears to be sized properly. The
proposed generator was first utilized on the Hines Energy Project for Florida
Power Corp. (2 x 2 x 1 - combined cycle) and is expected to begin commissioning
in early 1999. According to SWPC, thirteen generators of this design have been
sold. The generator design (2-97x135) from which the proposed generator was
developed was first introduced in 1958 and was offered until 1975. A total of 26
units were sold ranging from 200 MVA to 270 MVA. Stone & Webster is of the
opinion that the generator design is acceptable and in accordance with standard
industry practice.
3.7 Balance of Plant Systems
Stone & Webster reviewed the general configuration of the Facility balance of
plant ("BOP") systems identified in this section. These systems although
important do not generally take on as high a degree of risk significance as the
main power island, which consists of the combustion turbines, HRSGs, and the
steam turbine. Stone & Webster's BOP system review focused on ensuring that the
specific system designs were consistent with standard industry practice.
As is typical of a project at this phase in design, the detailed system and
component technical information that is developed during the detailed design
phase and is required to independently verify a system's capabilities was not
available for Stone & Webster's review. The conceptual
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description of the BOP systems and Stone & Webster's opinions are described in
the following sections.
In general, Stone & Webster is of the opinion that the BOP systems described
below are consistent with standard industry practice and any individual issues
identified during our review are presented in their respective sections. AES
Ironwood has informed us that after the individual system and component vendors
have been selected and the individual system designs and component
specifications are available, the Project will conduct a detailed BOP design
review to ensure compliance.
3.7.1 Condensate and Feedwater System
The condensate and feedwater systems are auxiliary systems supporting the HRSG.
Condensate is collected in the hotwell of the condenser and pumped by two of
three 50% capacity pumps to the suction side of the feedwater pumps. Each HRSG
is equipped with one 100% capacity feedwater pump that delivers feedwater to the
HRSG. The feedwater pumps will be either split-case or segmented ring section
design. The pump is electric motor driven and is located adjacent to the HRSG. A
demineralized condensate water storage tank is provided to allow for 12 hours of
base load operation.
The condenser will have titanium tubes and will consist of two segregate shells
with the hotwells connected by an equilibrium line. The condenser will be
designed to accommodate the exhaust from the steam turbine plus the
miscellaneous drains from the steam system and to allow for 100% steam bypass of
the steam turbine.
The single feedwater pumping system configuration proposed for the Project is
becoming widely used in combined cycle plants, as the cost of the
reconfiguration generally outweighs the assumed benefit. Stone & Webster has
been informed that the single pump configuration is part of the SWPC reference
plant design. The current configuration is such that the failure of either of
the feedwater pumps will result in shutting down the corresponding combustion
turbine, its associated HRSG, and the power loss associated with losing
approximately half of the steam input to the steam turbine. Stone & Webster has
recommended increased feedwater pump redundancy. As a result, the Project has
committed to carrying one complete spare pump, including casing in store plus
normal spares. This will reduce the equipment outage and downtime associated
with a feedpump failure.
3.7.2 Cycle Makeup System
The cycle makeup system supplies and stores demineralized water for makeup to
the HRSG and also supplies water for the combustion turbine water injection and
water washing. The system consists of one condensate storage tank, two 100%
capacity cycle makeup pumps designed for normal makeup to the cycle when water
is not being injected into the combustion turbine, and one
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100% capacity pump designed to handle makeup to the unit including water
injection to the combustion turbine.
The water supply to the system is provided from the cycle makeup treatment
system. The demineralized water from the mixed bed exchangers discharges to the
condensate storage tank. Two 100% capacity cycle makeup pumps are provided for
normal system operations without water injection to the combustion turbine. The
cycle makeup pumps take suction from the condensate storage tank. An automatic
recirculation control valve is provided for each cycle makeup pump for minimum
flow recirculation to prevent overheating and cavitating the pumps during
startup and low flow operation.
The system is designed to provide makeup water under all normal operating
conditions. The two 100% cycle makeup pumps are sized to provide adequate flow
and pressure for normal system operations. The single 100% capacity cycle makeup
pump is designed to provide adequate water flow and pressure. The intention is
to use the pump during combustion turbine water injection operation.
3.7.3 Condenser Air Removal System
The condenser air removal system evacuates the condenser steam space of
noncondensable gases during steam turbine generator operation and rapidly
reduces the condenser pressure from atmospheric pressure during plant startup.
The vacuum breaker valve allows air to enter the condenser to reduce the coast
down time of the steam turbine generator after shutdown. The system will consist
of two stage, twin element steam jet air ejectors with inter and after
condensers for holding operation, a hogging steam jet air ejector for startup,
and one vacuum breaker valve.
3.7.4 Raw Water System
The Facility raw water requirements will be supplied from the Pennsy Supply
quarry pits located adjacent to the site and the WWTP located approximately 6.5
miles west of the site. A waterline and pumping equipment will be constructed as
part of the EPC Contract will transport the raw water from the Pennsy Supply
quarry pits. The WWTP supply will be transported by way of a pumping station and
an 18-inch diameter pipeline.
The raw water system provides water for cooling tower makeup, cycle makeup,
evaporative cooler supply, fire water and miscellaneous plant services such as
washdown. The raw water system consists of the following major components:
quarry water supply, WWTP water supply, two 100% (1500 gpm each) raw water
forwarding pumps, raw water/fire water storage tank, and the associated piping,
valves, and instrumentation.
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3.7.5 Circulating Water System
The circulating water system will consist of two 50% capacity circulating water
pumps, a double shell water-cooled condenser, and a direct contact, mechanical
draft cooling tower. Water from the cooling tower basin will be pumped by the
circulating water pumps to the condenser and then to the cooling tower in a
single pressurized piping circuit. The heated cooling water will be cooled in a
mechanical draft, direct contact cooling tower. The underground circulating
water piping will be welded steel pipe with an internal epoxy coating and an
external asphalt blanket and the above ground piping will be uncoated carbon
steel.
The circulating water pumps will be designed in accordance with requirements of
the Hydraulic Institute Standards, and the condenser will be designed in
accordance with the requirements of the Heat Exchange Institute Standards for
Steam Surface Condensers. The design capacity of each circulating water pump
will be based on 50% of the circulating water flow at the contract plant
performance guarantee points, rounded to the next higher 1000 gpm.
The cooling tower will be a wood frame, counterflow mechanical draft cooling
tower constructed on top of the concrete cooling tower basin or at SWPC's option
a concrete tower structure may be used. Each of the two pumps takes suction from
the cooling tower basin and discharges into a common circulating water header.
This main header is divided into smaller headers, which feed the condenser and
auxiliary cooling water system. The heated discharge from each header is
recombined and the heated water is returned to the cooling tower. At the cooling
tower, the return line is divided into equally sized lines, each of which
services one cooling tower cell. The circulating water pump pit will be located
at the end of the basin. A trash rack, removable for cleaning, will be located
upstream of the circulating water pump pit to protect the circulating water
pumps from debris in the cooling tower basin. The tower also includes a fire
protection system and a lightning protection system.
3.7.6 Auxiliary Cooling Water System
The auxiliary closed loop cooling water system will supply cooling water for
various equipment heat exchangers. The system will consist of two 100% capacity
auxiliary cooling pumps, two plate and frame type closed cooling water heat
exchangers, and the associated piping, valves, piping and instrumentation.
The auxiliary cooling water pumps supply water to the Facility's various cooling
loads. The heated cooling water flows to the closed cooling water heat
exchanger, which is cooled by circulating water from the open loop. The loop is
completed as the cooled water flows to the suction of the auxiliary cooling
pumps.
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3.7.7 Fire Protection Systems
Fire protection is provided by a ring header, hydrants and hose stations
supplied from the raw/fire water tank. The fire protection system gives a visual
indication of actuation at the local control panel. There are two independent
systems. An automatically actuated dry chemical type system is provided for the
exhaust bearing area of the turbine. The system consists of temperature sensing
devices, spray nozzles, dry chemical tank, and interconnecting piping and
wiring. In accordance with the U.S. National Fire Protection Agency ("NFPA")
standards there is an FM-200 based fire protection system for total flooding
protection of the turbine enclosure and the electrical and control units. .
3.7.8 Wastewater System
The Facility wastewater system will be designed as a zero discharge system
("ZDS") to eliminate liquid waste streams. All treated wastewater to the
Facility will be discharged as cooling tower evaporation or vapor through
Facility vents. The solids, in the waste water or introduced as chemical
additives, will be removed by the system which will first concentrate the waste
and then produce a chemical precipitate which is filtered to dryness for
ultimate disposal in a landfill. AES Ironwood represents that the sludge, which
has a high proportion of calcium carbonate, has commercial use as feed stock for
FGD systems. AES Ironwood is currently negotiating a commercial agreement to
sell the sludge and avoid landfilling.
Stone & Webster understands that the Project is still evaluating options for the
design of the ZDS and that SWPC has offered the Project alternative ZDS systems.
The maximum requirements for the ZDS system will be experienced when the
Facility is operating at full load on fuel oil during the winter months. The
alternatives being evaluated depend on whether the proposed design is based on
normal gas operations or on oil operation. If the Project accepts the gas
option, then it will be responsible for obtaining portable demineralizer
trailers to meet the oil fired case requirements. The Project is examining
proposals for portable demineralizers with second pass RO units. These proposals
would ensure at least 100 hours operation per demineralizer trailer between
regenerations. The Project expects to resolve this issue in early 1999. The
Project has been advised by SWPC that the net power guarantee includes the net
parasitic load for the ZDS. AES Ironwood represents that once a system design
has been selected, it will be reviewed to ensure operational conformance.
Stone & Webster also understands that SWPC has proposed the use of one 100%
brine concentrator and one 100% crystalizer. The vendor selection of these two
key components should emphasize equipment reliability due to the lack of
redundancy in this key system.
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3.7.9 Compressed Air System
The compressed air system will supply compressed air at the required capacity
and pressure for service air and instrument air requirements. The instrument air
system supplies dry instrument quality air at the required pressure and capacity
to all pneumatic controls, transmitters, instruments, and valve operators. The
system will consist of two 100% capacity, air cooled, motor driven air
compressors, one service air receiver, one instrument air receiver, and two 100%
skid mounted refrigeration type air dryers, with electric motor driver and two
coalescing filters for each dryer. The instrument air will be designed to
conform to the Instrument Society of America ("ISA") Quality Standards for
Instrument Air. During normal operation, either air compressor can provide
compressed air to the system.
3.7.10 Compressed Gas Storage System
The compressed gas storage system will consist of the hydrogen gas system, the
carbon dioxide system, and the nitrogen system. The hydrogen system supplies
hydrogen gas to the hydrogen cooled generators. The carbon dioxide system stores
and transfers carbon dioxide gas to the generator cooling and purge systems for
generator purging. The nitrogen system supplies nitrogen for inerting the HRSGs
and main cycle piping during an extended outage. The compressed gas system will
consist of a hydrogen tube trailer, hydrogen valve manifold, carbon dioxide
valve manifold, a nitrogen valve manifold, and the associated piping and
instrumentation.
3.7.11 Ammonia Storage and Forwarding System
The ammonia storage and forwarding system will store and supply ammonia for the
SCR. The system will consist of two 10,000 gallon aqueous ammonia storage tanks,
one for each HRSG, that provide approximately a seven day supply of ammonia, two
ammonia forwarding pumps, an ammonia injection skid, and associated piping and
instrumentation.
3.8 Fuel Systems
The Facility will be designed with natural gas fuel as the primary fuel for the
combustion turbines with fuel oil as the backup fuel supply. It is projected
that the Facility will operate a majority of the time on natural gas but may
operate up to 31 days per year on fuel oil pursuant to the terms of the PPA. The
Project pro forma financial model assumes 12 days operation on fuel oil during
the PPA period based on estimates by CC Pace, the Project's independent fuel
consultant. The PPA incorporates the natural gas and fuel oil specifications
consistent with EPC Contract specifications.
With respect to natural gas pressure, the EPC Contract assumes that the natural
gas line is able to supply a minimum of 450 psig at the Facility boundary. The
PPA defines natural gas as being at
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a pressure equal to the pressure on the Texas Eastern pipeline, data from the
pipeline demonstrates that the pressure is generally in excess of 700 psig.
3.8.1 Fuel Gas System
The fuel gas system receives natural gas supplied from the natural gas supply
pipeline at the Facility boundary and transports it to the combustion turbines.
The system will consist of the fuel gas filter separators provided locally at
each combustion turbine, fuel gas heater, knock out drums, and associated piping
and instrumentation.
Natural gas will be supplied to the system by a natural gas pipeline to a single
connection located at the Facility boundary. A shutoff valve and duplex strainer
will be provided in the gas supply piping. Individual fuel gas heaters will be
provided for heating the fuel gas supply to the respective combustion turbines.
Natural gas fuel will be heated using IP feedwater to approximately
440(degrees)F. A liquid separator/leak detector will be installed downstream of
the fuel gas heater to detect any water in the gas supply resulting from a
leaking fuel gas preheater. On detection of fuel gas heater leakage, the
isolation valves will close and a bypass valve will open automatically to
isolate and bypass the fuel gas heater. Control valves provided with the
combustion turbine packages will regulate gas pressure to the combustion turbine
fuel nozzles. A valving arrangement will provide positive isolation of the fuel
supply system at the combustion turbine. The fuel gas supply pressure required
for the combustion turbines will be at least 650 psig at the combustion turbine
connection. If required, the combustion turbines can be switched over from
natural gas to fuel oil online without shutting down the Facility.
3.8.2 Fuel Oil System
The fuel oil system receives, stores, and transports fuel oil for operating the
combustion turbines. The fuel oil system consists of one 2,300,000 gallon fixed
roof fuel oil storage tank on a ring wall foundation, a fuel oil tank truck
unloading area, a fuel oil truck unloading skid, air eliminators, and
accessories including flame arrestor with conservation vent, fuel oil metering
skid, and a lined berm containment.
Fuel oil will be delivered to the site by truck and unloaded at the unloading
station to the fuel oil storage tank. Duplex fuel oil strainers will be provided
at the inlet to the unloading station. An air eliminator and flow totalizing
meter will be provided at the discharge of the unloading station to verify fuel
oil deliveries. The fuel oil storage tank will be a cone roof, double wall with
double bottom carbon steel tank on a ring wall foundation. The fuel oil storage
tank will be constructed in accordance with American Petroleum Institute ("API")
Standard 650.
Fuel oil will be supplied to the fuel oil forwarding pumps from the fuel oil
storage tank. The fuel oil forwarding system will be equipped with two 100%
capacity forwarding pumps. Fuel oil pressure and flow to the combustion turbines
will be controlled by a recirculation valve in the
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combustion turbine fuel oil skid which will control the fuel oil supply pressure
by recirculating fuel back to the fuel oil storage tank.
3.9 Electrical Systems
Stone & Webster reviewed the general configuration of the Facility electrical
systems identified in this section. Stone & Webster's electrical system review
focused on ensuring that the individual system designs were consistent with
standard industry practice. As is typical of a project at this phase of design,
the detailed system and component technical information that is developed during
the detailed design phase and is required to independently verify a systems
capabilities was not available for Stone & Webster's review. The conceptual
description of the electrical systems as well as Stone & Webster findings are
provided in the following sections.
In general, Stone & Webster is of the opinion that the electrical systems
described below are consistent with standard industry practice. AES Ironwood has
stated that when the individual system and component vendors have been selected
and the individual system designs and component specifications are available, a
design review will be conducted by the Project to ensure compliance.
3.9.1 Normal Station Service Power
Two station auxiliary transformers will provide power from the switchyard to the
Facility auxiliary loads. Station auxiliary transformers step down the voltage
from 230 kV to 6.9 kV to 480 V and lower voltage levels suitable for equipment
needs. A medium voltage switchgear bus will supply power to medium voltage
motors, and medium to low voltage transformers. These transformers feed low
voltage switchgear, motor control centers, and other loads.
3.9.2 Emergency Power
Emergency power systems also exist to assist Facility operations. The emergency
systems include uninterruptible power supplies and direct current ("DC") power.
Uninterruptible power and DC/battery power are provided for equipment that must
operate under all conditions, such as lube oil pumps and turning gear to ensure
a proper cool down process of the turbines during an emergency trip. The
Facility does not have black start capability. Startup of the Facility is by way
of electrical backfeed through the station auxiliary transformer off the 230 kV
utility grid system.
3.10 Switchyard
Electrical power generated through the combustion turbine and steam turbine
generators at 16 kV is transformed to 230 kV for delivery to the switchyard. The
Facility will electrically interconnect with the PJM electrical system through
an existing MET-ED 230 kV transmission line located
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approximately 0.25 mile to the west of the Facility which will tie into the
Facility's switchyard.
Three main transformers will be provided for this service. The combustion
turbine generators and the steam turbine generator will be connected to its own
two winding, oil filled step up transformer which increases the voltage from the
generator terminals to the interconnecting voltage at the high side terminals.
Synchronization and protection of the combustion turbine generator and the steam
turbine generator are achieved by power circuit breakers in the switchyard.
These circuit breakers isolate the power generating station from the
interconnecting system. The combustion turbine generators and steam turbine
generator will be connected to their step-up transformers by an isolated phase
bus duct.
The switchyard will have a 230 kV conventional, outdoor, open air, radial design
featuring a provision for two outgoing transmission lines. The switchyard will
extend from the high voltage terminals of the generator step-up transformers and
station auxiliary transformers to the interface with MET-ED's two outgoing
transmission circuits. The transmission line protective relays and the remote
terminal units ("RTUs") that will interface with the Transmission/Distribution
Control Center and the Energy Control Center will be provided by MET-ED. This
equipment will be installed in the switchyard control building.
The EPC Contract states that optional switchyard arrangements, metering, and
protective relaying schemes can be provided and that SWPC will work with the
Project and MET-ED to establish the specific requirements for the switchyard and
Facility interfaces with MET-ED. The switchyard requirements will also be
further defined as part of the Project Interconnection Agreement, which is
currently under negotiation between AES Ironwood and GPU Energy, Inc. ("GPU").
3.11 Instrument and Control Systems
Stone & Webster understands that the original Project instrument and control
system design was based on the Westinghouse Distributed Processing Family
("WDPF") Control System. Since the Westinghouse Power Generation acquisition by
Siemens, SWPC now utilizes and would prefer to provide to the Facility a Siemens
Control System. Stone & Webster believes that either of these two systems would
be acceptable and in accordance with standard industry practice.
3.12 Civil and Structural Design
The Project's civil and structural design parameters have been appropriately
specified in accordance with the geotechnical investigations conducted on-site
to date, as well as applicable engineering codes and standards relating to the
type of construction proposed at the site. It is noted that SWPC has accepted
the risk of any additional foundation requirements as necessary based on a
detailed geotechnical investigation to be performed during the detailed design
phase of the Project. The structural design criteria outlined in the EPC
Contract appear adequate to comply with the Project requirements. The materials
of construction specified in the building
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finish schedule are appropriate for the intended application. The minimum
required strength of materials, stipulated in the design criteria, are
consistent with industry standards. The established loadings and maximum design
conditions comply with the referenced codes, site development requirements and
foundation design criteria. Stone & Webster are of the opinion that the
structural design is reasonable and adequate for operation of the Facility as
contemplated in the Project Agreements.
3.12.1 Geotechnical Evaluation
The bedrock units beneath the site are dolomite and limestone. Sinkhole
development has been identified near the site area. Laboratory testing was
performed to classify the soils. The geotechnical investigation indicated that
the subsurface soils are very soft to very stiff residual soils, which are
overly poor to moderate quality dolomite bedrock. The residual soils are
classified as high plasticity sandy clays and silts. The thickness of the
residual soil varies; however, the soil deposit is generally about 20 feet deep
in the site area. The exploration borings and resistivity surveys indicate that
the underlying bedrock is highly variable in quality and depth. The bedrock
surface is expected to be quite variable and have high points, due to the
weathering characteristics of the carbonate bedrock units. Exploration borings
and probe holes were drilled in suspect solution areas that were identified by
the resistivity survey. No large underground solution cavities or clay filled
features were identified to the depths explored at the location of critical
structures.
Blasting operations at the Pennsy Supply quarry adjacent to the site can be
performed within 25 feet of the property line. Pennsylvania law limits the
blasting. In addition under the EPC Contract, SWPC acknowledges that prior to
the execution of the EPC Contract SWPC has made a complete and careful
examination of the nature and character of the soils and terrain of the site
that might affect SWPC's ability to construct the Facility.
Stone & Webster believes that the exploration and testing programs were
conducted in accordance with good engineering practice and were appropriate for
the planned Facility and anticipated site conditions. Stone & Webster is of the
opinion that the Project site is suitable for the Facility provided that the
site construction is performed incorporating the recommendations of the Schnabel
Report of September 1998. These recommendations are discussed in Section 3.12.5
of this report.
3.12.2 Groundwater
Groundwater was not encountered during the drilling at the test boring
locations. Based on these observations, the groundwater level is believed to be
below the depth of the excavations proposed for this Project. Groundwater is
present at a depth below the site and dewatering operations at the adjacent
Penney Supply quarry presently controls the level.
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3.12.3 Water Supply
Stone & Webster reviewed a number of documents in its evaluation of the
availability of raw water to the Project including: the approvals from the
Susquehanna and Delaware River Basin Commission, the Final Hydrologic Analysis,
Availability of Groundwater from the Pennsy Supply Quarry, Proposed Ironwood
Power Plant, Lebanon, Pennsylvania by Schnabel Engineering Associates, February
26, 1998, and the Application for Water Withdrawal for AES Ironwood Power Plant,
Submitted to the Delaware River Basin Commission and the Susquehanna River
Basin, by TRC Environmental Corporation, April, 1998.
The make-up water supply for the Project will be obtained from the WWTP and from
the current dewatering operations at the adjacent Pennsy Supply quarry. Under
normal operating conditions, 1.44 MGD of water from the WWTP will be pumped to
the Facility through a pipeline. The remaining 2.16 MGD of water required by the
Facility will be obtained from the quarry dewatering operations. When the
Facility is operating on fuel oil, 2.16 MGD of water may be diverted from the
WWTP and the remainder 2.16 MGD will be obtained from the quarry dewatering
operations.
A review of documents provided to Stone & Webster indicates that an adequate
make-up water supply is available to meet the Facility generation demands. The
split for providing make-up water from both the WWTP and the Pennsy quarry
satisfies the river basin commissions environmental requirements. Approval has
been obtained from the Delaware River Basin Commission on April 24, 1998 and the
Susquehanna River Basin Commission on June 9, 1998 for this proposed make-up
water supply approach.
Should quarry operations cease in the future or supply from the WWTP need
adjustment, an adequate make-up water supply could be obtained from groundwater
sources at or near the site or pumped from a flooded quarry. New agreements with
the commissions would have to be worked out at that time and are considered by
Stone & Webster to be attainable, if they are required.
3.12.4 Site Grading and Drainage System
The site grading and drainage system will be designed to comply with all
applicable federal, regional, and local regulations. Topographic modifications
to the site area may be required to provide positive overall drainage. Surface
drainage onsite will consist of overland and open channel flow. Channels and
ditches will generally be trapezoidal in cross section, of sufficient width to
facilitate easy cleaning, and mildly sloping so that erosion is prevented. The
storm drainage system will be designed for a rainfall intensity of five inches
per hour. Site specific drainage facilities will be designed for the flow
resulting from a 25 year rainfall or regional and local code requirements,
whichever is greater. The Facility main complex area will be moderately graded
for effective drainage.
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3.12.5 Foundations
The site is considered suitable for development of the Project. The proposed
structures can be placed on mat or spread foundations. Recommendations are
provided in the Schnabel Report for deep and shallow foundation systems. The
Schnabel Report recommends that foundations for the larger, heavier structures
be supported on compacted dense graded crushed stone structural fill. All
residual soil and boulders should be removed beneath the foundation area.
Placement of the structural fill will start at the contact with the weathered
bedrock or very hard residual soil. An allowable bearing pressure of 10,000 psf
is expected for structures supported in this manner. Adequate quantities of
quality structural fill materials are available from the rock quarries in the
vicinity of the site.
The support buildings and other lightly loaded structures can be supported on
spread foundations on suitable stiff to hard natural soils or compacted fill,
using an allowable bearing pressure of at least 2,000 psf. The above ground
storage tanks can be supported on the stiff to hard residual soils, weathered
rock, or structural fill.
The exploration program indicates that some rock excavation may be required for
installation of the circulating water lines. The Schnabel Report also includes
recommendations for site preparation and inspections that should be performed
beneath critical structures to preclude development over an area of potential
solution activity. Subsequent to the date of the Schnabel Report, SWPC obtained
additional data on quarry blasting operations and has indicated that it is
revising its foundation design criteria to reflect that additional data.
3.12.6 Stack
The common stack height will be 175 feet and is to be constructed in accordance
with ASME/ANSI standards and will be made from carbon steel. The location of
test ports and sampling platform will meet USEPA siting criteria of 40 CFR 60.
3.13 Interconnections
3.13.1 Fuel Interconnection
The natural gas fuel supply to the Facility will be transported by way of a
pipeline that will be designed to supply a minimum of 700 psig at the Facility
boundary as discussed in Section 3.8 of this Report. Fuel will be supplied to
the Facility by Williams in accordance with the PPA as discussed in Section 5 of
this Report. Williams is responsible for the construction of all gas
interconnection and delivery facilities necessary for delivery of natural gas.
Pipeline permitting, design, and construction is also the responsibility of
Williams. The fuel oil will be supplied by truck, and a two-day supply will be
stored in the Facility's fuel oil storage tank.
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<PAGE>
Williams has executed certain agreements with TETCO to provide natural gas
delivery services to the Facility. These agreements require TETCO to construct
own and operate an approximate three-mile pipeline from the TETCO mainline to
the Facility. Under these agreements, TETCO is required to have the lateral
completed by September 1, 2000. Stone & Webster has not independently verified
the design of the pipeline, however we know of no reason why Williams should be
unable to perform its obligations under the PPA.
3.13.2 Electrical Interconnection
The Project electrical interconnection design was previously discussed in the
Switchyard Section of this Report. In addition, Stone & Webster reviewed
available information to assess the general feasibility (from an electrical
standpoint) of integrating the Project into the PJM power transmission system.
The review focused on assessing whether there were additional steady-state
transmission constraints, which could be attributed to the Project. The review
relied primarily on information in the public domain provided by the
Mid-Atlantic Area Council ("MAAC") reliability council of the North American
Electric Reliability Council ("NERC") in filings before the FERC. The MAAC
region consists of 15 full time members and 31 associate members serving over 22
million people in a 48,700 square-mile area. The region includes all of Delaware
and the District of Columbia, major portions of Pennsylvania, New Jersey, and
Maryland, and a small part of Virginia. All utilities in the PJM system are a
part of MAAC. In particular, the following information, submitted to the FERC as
part of the 1998 Form 715 filing, was reviewed:
o Transmission planning reliability criteria of the MAAC region
(Part 4 of Form 715)
o Transmission planning assessment practices of MAAC (Part 5 of Form
715)
o Evaluation of transmission system performance of the MAAC system
(Part 6 of Form 715)
o Transmission planning reliability criteria of the GPU utilities
(Part 4 of Form 715)
o Transmission planning assessment practices of the GPU utilities
(Part 5 of Form 715)
o Evaluation of transmission system performance of the GPU utility
system (Part 6 of Form 715)
o Load flow simulations of the MAAC system for the following
conditions: (1) 1998 summer, (2) 1998/99 winter, (3) 1999 summer,
(4) 1999/2000 winter, (5) 2002 summer, (6) 2002/03 winter, (7)
2007 summer
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<PAGE>
Stone & Webster also reviewed a report titled "Reliability Assessment
1998-2007", prepared by NERC and dated September, 1998, and a letter report from
GPU to AES Ironwood dated February 4, 1999, regarding the results of system
studies (the "System Study Report").
The Project was modeled by GPU in the planning of its transmission system for
the period 1998-2007 and simulated in all load flow cases for years 2002 and
beyond, but not before, since: (1) FERC Form 715 instructions explicitly
indicate that load flow cases that are submitted as part of the filing should be
those "regularly used by the utility in its own planning", and (2) the Project
is scheduled to come on-line in 2001. Thus, 2002 is the first year in which the
Project appears in the simulations.
The Project is modeled in the load flow cases as three separate generators (at
buses 1736 "AES-GEN1", 1737 "AES-GEN2", and 1738 "AES-GEN3", all at 230 kV).
These buses are in turn connected to the Prescott 230 kV bus, and from there to
the South Lebanon and Jonestown 230 kV buses (1163 and 1175, respectively). In
all cases (i.e., summer and winter), each unit is modeled as generating 212 MW,
for a combined production of 636 MW. The generators are in area 27 of the load
flow (area "MET-ED"), which in year 2002 exports about 246 MW.
GPU has represented that it has confirmed that the transmission system will
accept the Facility output of up to 662 MW (summer) and 797 MW (winter).
Based on this representation, Stone & Webster is of the opinion that the Project
can be feasibly integrated into the PJM system and that no known transmission
limitations will inhibit the feasible evacuation of the Project's full net
capacity both under summer and winter conditions.
3.13.3 Water Interconnection
The Project has agreements in place to draw water for cooling the Facility from
two independent sources. The Pennsy Supply quarry, located directly adjacent to
the Project site on Prescott Road, and an agreement with the City of Lebanon
Authority to use treated effluent water from their facility, located on Ridge
View Road. Access to both water sources will be designed and constructed to
serve the full Facility needs from either or both sources. An approximately 6.5
mile pipeline will be designed and constructed to transport the water from the
WWTP to the Facility.
In order to construct the pipeline, which will be owned and operated by the
Authority, Rights-of-Way ("ROW") must be acquired from eleven landowners. The
ROWs provide the Project with the permission to utilize the various landowners'
property to construct the pipeline beneath the surface of the property. Most of
the ROWs are represented to be within an already-existing utility easement.
Gannett Fleming, Inc. has surveyed all the properties and the Project has
secured ten of the eleven ROWs. The last ROW is expected to be secured in June
1999.
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<PAGE>
Applications for the road crossings, county occupancy permits, and railroad
crossings have been submitted and are currently awaiting approval.
Stone & Webster will independently verify the design of the pipeline when it
becomes available. The proposed construction schedule appears to be reasonable
and achievable. We do not know of any reason why the Authority should be unable
to perform its obligations under the ESA.
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<PAGE>
4. Environmental and Permitting
4.1 Environmental Site Assessment
Stone & Webster reviewed the Environmental Site Assessment of Martin/Ziegler
Property and the Environmental Site Assessment and Preliminary Asbestos Survey
of RESCO Products Property by TRC Environmental Corporation, of March 1998 and
April 1998. The assessment for the Martin property revealed no evidence of
recognized concerns to the subject property. The only environmental condition
identified for the RESCO Products property is the presence of asbestos in two
roofing materials; the tar coating of the Butler Building/add-on roof and the
roof tar paper of a small attached shed at the rear of the Butler Building.
Removal of these structures and the asbestos is not considered to be a major
environmental issue. Both property locations may have radon presence in
groundwater that might be obtained from wells. Radon is characteristic of the
geologic units in the area for groundwater wells.
The past and present land use of these properties and the adjacent properties
are not anticipated to create any conditions that would result in a major
environmental concern. Groundwater beneath the Project site area drains into the
adjacent quarry and is presently pumped to surface drains. No contamination has
been identified within this groundwater regime.
Stone & Webster is of the opinion that the assessments reviewed were performed
in accordance with standard industry practice and their results appear
reasonable.
4.2 Permitting
The EPC Contract (Appendix F) sets forth a list of applicable permits and
approvals that are required by federal, state, and local agencies. This list
also identifies who is responsible for obtaining the permit or approval. The
Project has represented that this list is comprehensive and that no other
permits other than possibly some ministerial permits are required for the
construction and operation of the Project.
SWPC and AES Ironwood are individually or jointly responsible for obtaining the
permits and authorizations described in the following table. Stone & Webster has
relied upon the Project to confirm that all necessary permits or authorizations
have been identified and that the permits have either been obtained or will be
granted in a timely manner without adversely affecting the Project's schedule.
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<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
Applicable Permits and Approvals
====================================================================================================================
Agency Applicable Permits Status
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Federal Energy Regulatory Exempt Wholesale Generator Issued March 29, 1999
Commission Certification
- --------------------------------------------------------------------------------------------------------------------
PaDEP PSD/State Air Permit Final March 29, 1999
- --------------------------------------------------------------------------------------------------------------------
U.S. Dept. of Energy, Office Fuel Use Act Certification Approved
of Fossil Energy
- --------------------------------------------------------------------------------------------------------------------
PaDOT Roadway Access Permits from Approved
Prescott Road to site
- --------------------------------------------------------------------------------------------------------------------
PaDEP NPDES, PAG-2 Approved
- --------------------------------------------------------------------------------------------------------------------
PaDEP NPDES General Permits #4, # 4 #5 Approved
#7
- --------------------------------------------------------------------------------------------------------------------
PaDEP NPDES Part 1 Construction Approved
- --------------------------------------------------------------------------------------------------------------------
Pa Dept of Labor and Industry Onsite Oil Storage Tank Part of
(1) Permission to construct SWPC Construction Permit
(2) Permit for construction
- --------------------------------------------------------------------------------------------------------------------
Delaware River Basin Water Use Approval as per Section Approved
3.8 of DRDC regulations
- --------------------------------------------------------------------------------------------------------------------
Susquehanna River Basin Water Use Approval Approved
Commission
- --------------------------------------------------------------------------------------------------------------------
Lebanon County Soil Erosion and Sediment Control Approved
Conservation District Approval
- --------------------------------------------------------------------------------------------------------------------
Conrail/Norfolk Southern Railroad Crossing Approval and Approval Agreements Pending
Railspur Construction
- --------------------------------------------------------------------------------------------------------------------
Lebanon Zoning Hearing Stack Height Variance Approval for Approved
Board Power Plant
- --------------------------------------------------------------------------------------------------------------------
South Lebanon Board of Land Development Approval for Approved
Supervisors Power Plant
- --------------------------------------------------------------------------------------------------------------------
South Lebanon Board of Subdivision Approval for Access Approved
Supervisors Road
- --------------------------------------------------------------------------------------------------------------------
South Lebanon Onsite septic approval for sanitary Conceptually Approved
Township/Lebanon County discharge
- --------------------------------------------------------------------------------------------------------------------
City of Lebanon Authority Agreement for Supply of treated Approved
effluent and construction, operation
and maintenance of pipeline
- --------------------------------------------------------------------------------------------------------------------
Lebanon County Building Permit To be acquired prior to construction
Planning Department
- --------------------------------------------------------------------------------------------------------------------
Federal Aviation Notice of Alteration or Proposed Approved
Administration Construction for AES Ironwood
Facility Stack
====================================================================================================================
</TABLE>
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<PAGE>
Stone & Webster is of the opinion that the permits and authorizations that have
been granted are consistent with the Project's present phase of development.
Stone & Webster has reviewed the permits and approvals identified in this
section. Stone & Webster is of the opinion that if this facility is constructed,
operated and maintained in accordance with the terms of the EPC Contract, PPA,
and the Maintenance Services Agreement, and if the natural gas and fuel oil
provided by Williams are within the quality limits specified in the EPC
Contract, then it is reasonable to assume that the Project should satisfy the
permit limitations of the issued permits and have a useful life beyond the final
maturity date of the Bonds.
Stone & Webster notes that the quantity of ammonia to be stored on site (two
10,000 gallon tanks of aqueous ammonia) is sufficient to subject this Facility
to the risk management and reporting programs administered by the EPA and OSHA.
However, compliance with these programs should not have any effect on either
project cost or schedule.
4.2.1 Prevention of Significant Deterioration Permit
The Project submitted the Prevention of Significant Deterioration Permit ("PSD")
air permit application forms to the Pennsylvania Department of Environmental
Protection ("PaDEP") in May 1998 as part of the Plan Approval Application for
the AES Ironwood Facility (the "Plan Approval Application"). The application was
deemed complete in August 1998, a draft PSD Air Permit was issued on December
23, 1998 and a public hearing was held on February 18, 1999. The final PSD Air
Permit was issued to AES Ironwood on March 29, 1999.
The application form sets forth atmospheric emissions limits for NOx, CO, and
volatile organic compounds ("VOC") which are consistent with or above the EPC
Contract emissions warranties. With respect to VOC and particulate matter
("PM"), the permitted emissions will be based upon stack test results and/or
vendor guarantees. Emissions of SO2 will be determined by fuel sulfur sampling
and mass balance calculations.
The Plan Approval Application includes a summary of proposed permit limits.
Stone & Webster reviewed the Pennsylvania modified Chapter 139 PM sampling
protocol report of 1998 which reports only the "front-end" portion of the
sampling train emissions. AES Ironwood's environmental consultant also advised
Stone & Webster that the calculated permit limits for ammonia salts (from the
SCR) are to be included in the total emissions of PM. These amounts are
reflected in the emission tables provided to TRC by SWPC for the 501G emissions.
We believe that this is a conservative approach to estimating the emissions as
measured under the current Pennsylvania PM sampling protocol as represented by
AES Ironwood's environmental consultant.
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<PAGE>
Although the manufacturer for the SCR system has yet to be selected, Stone &
Webster has reviewed the design criteria for the SCR system, discussed the
emissions testing performed on the 501G combustor nozzles with SWPC, and
analyzed the similarities in the turbine firing temperatures of the 501F and
501G gas turbines. Based on these actions coupled with our knowledge of the 501F
gas turbine, Stone & Webster believes that the 501G will be able to achieve and
maintain compliance with the Project's Air Permit during full load operation.
The PSD Permit expires on June 30, 2002, by which time AES needs to have
completed construction, start-up, commissioning, environmental testing and
performance testing, and begun commercial operation. During this period of time,
AES is required to compile its initial emissions testing report and submit an
application to the PaDEP for an "operating" permit. In addition, Condition 3.c
of the PSD Permit authorizes "temporary" operation for a period of 180 days from
the date of "commencement of operation". This 180-day period should be
sufficient for start-up, commissioning, environmental testing, performance
testing and operating permit application compilation and submittal.
4.2.2 Exempt Wholesale Generator Status
AES Ironwood filed for certification of the Facility as an EWG under the
applicable rules of the FERC on February 24, 1999. AES Ironwood has received a
determination that the Facility is an EWG under the applicable rules of FERC.
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<PAGE>
5. Project Agreements
Stone & Webster reviewed the primary contracts and agreements associated with
the Project. These included the PPA, the EPC Contract, the ESA, and the
Maintenance Services Agreement. Stone & Webster reviewed the agreements from a
technical and economic standpoint to assess the adequacy and reasonableness of
their terms and conditions. Legal, financial, and other important aspects of the
agreements associated with the project were not considered under this review.
This Report describes only portions of the Project Agreements as needed for the
discussion of the Facility's related issues. A complete description or legal
evaluation of the contracts and documents related to the Facility is beyond the
scope of this report, and Stone & Webster is not providing legal counsel
opinions regarding the legal interpretation of any contract language. Adherence
to industry standards and good engineering practice was assessed where
appropriate. Provided below is a summary of our findings for each of the
reviewed agreements.
5.1 Power Purchase Agreement
Stone & Webster reviewed the PPA. Certain of the provisions of the PPA are
discussed below. For a summary of the material terms of the PPA, reference is
made to "Description of Project Contracts - Power Purchase Agreement" in the
Offering Memorandum of AES Ironwood with respect to the Bonds to which the
Report is appended (the "Offering Circular").
5.1.1 Term
The term of the PPA is for a period of 20 years after the Contract Anniversary
Date that is the last day of the month in which the Commercial Operation Date
("COD") occurs. If the COD has not occurred prior to June 30, 2001, subject to
the extension as described below except for a Force Majeure or a delay caused by
Williams, Williams has the right to terminate the PPA without liability or
responsibility unless AES Ironwood has either:
o Demonstrated to Williams that the COD will occur no later than
December 31, 2001, or
o Was unable to execute an Interconnection Agreement with GPU. to
maintain the Facility construction schedule ("Interconnect Delay")
In these cases AES Ironwood has the right to extend the COD to December 31, 2001
("Free Extension Option"). In the event the above described conditions are not
met then AES Ironwood has the right to extend the COD to and including December
31, 2001, by giving Williams a written notice of extension no later than April
30, 2001 and paying Williams a specified amount no later than June 30, 2001.
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<PAGE>
In the event AES Ironwood qualifies and elects the Free Extension Option but the
COD does not occur by December 31, 2001 then AES Ironwood can elect to:
o extend the COD up to and including December 31, 2002 by making
certain daily payments, and
o pay Williams an amount equal to the lesser of:
actual damages Williams suffers or incurs after December 31,
2001, or up to a specified cap
In the event AES Ironwood qualifies for the Free Extension Option or elects the
First Paid Extension Option and the COD has not occurred prior to December 31,
2001, except for a delay caused by Williams, a Force Majeure delay, or an
Interconnect Delay then Williams has the right to terminate the PPA without
liability or responsibility, provided that AES Ironwood has the right to extend
the final COD to December 31, 2002, by giving Williams written notice of the
extension no later than October 31, 2001, and making Williams certain daily
payments.
In the event AES Ironwood elects the Second Paid Extension Option and the COD
does not occur by December 31, 2002 for any reason except as a result of an
Interconnect Delay, Force Majeure, or a delay caused by Williams, then Williams
has the absolute right to terminate the PPA without liability or responsibility.
The Provisional NTP was provided to SWPC on September 23, 1998 and several
milestones have been achieved to date by SWPC. The Full NTP will occur on or
about June 1, 1999. Pursuant to the terms of the PPA, AES Ironwood has the
option to extend the COD to December 31, 2001 by paying Williams a specified
amount if there is a delay in the June 30, 2001 COD. The Delay in Financial
Closing/SWPC Continued Performance Agreement between SWPC and AES Ironwood
extends the date by which the Commencement Date must occur to June 1, 1999. Not
withstanding the above stated provisions SWPC agreed in a letter to AES Ironwood
dated May 12, 1999 to not exercise its right to suspend its performance of
services between June 1, 1999 and June 21, 1999. The Guaranteed Provisional
Acceptance Date is 23 months and two weeks following full NTP.
Based on the EPC Contract, if SWPC fails to achieve the Provisional, Interim, or
Final a specified amount per day. If Provisional, Interim, or Final Acceptance
occurs six months after the Guaranteed Provisional Acceptance Date, AES Ironwood
would receive liquidated damages, which amount, together with contingencies and
prefunded IDC, is sufficient to cover the amounts AES Ironwood would be required
to pay Williams to extend the COD to December 31, 2001, plus approximately 190
days in debt service after the Guaranteed Provisional Acceptance Date beyond
December 31, 1999. Based on the EPC Contract, the total liquidated damages
associated with a delay in the Guaranteed Provisional Acceptance Date is a
maximum of 20% of the contract price. If the COD is delayed to December 31,
2002, AES Ironwood would receive liquidated damages,
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<PAGE>
which amount, together with contingencies and prefunded IDC, is sufficient to
cover the additional payments to Williams plus approximately one year in debt
service after the Guaranteed Provisional Acceptance Date.
5.1.2 Fuel Conversion and Associated Services
Williams is obligated to supply and transport the fuel (natural gas and fuel
oil) to generate net electric energy, perform start-ups and shutdowns, and
operate the Facility during any period other that during a dispatch period.
Williams is responsible for all costs and expenses related to the supply and
transportation of the natural gas and fuel oil to the fuel delivery point(s).
AES Ironwood is responsible for all costs and expenses related to the supply and
transportation of the natural gas and fuel oil from the fuel delivery point(s)
to the Facility. AES Ironwood is required to provide fuel oil storage capacity
sufficient to operate the plant at full output for at least 2 days. If AES
Ironwood elects to use offsite fuel oil storage, then AES Ironwood is
responsible for arranging transportation to the Facility from that remote
location. AES Ironwood is not obligated to operate the Facility on fuel oil for
more than 31 days or 744 hours per year.
Williams is responsible for the construction of the Gas Interconnection
Facilities. In the event that the Gas Interconnection Facilities have not been
constructed or Williams is unable to deliver gas to the Facility to support the
initial start-up testing, Williams will pay AES Ironwood certain specified
amounts for each day of the delay from the date on which the Facility would
otherwise (but for the absence of gas) be ready for start-up testing until the
gas is delivered to the site.
5.1.3 PPA Payments
Williams will pay AES Ironwood for facility capacity, fuel conversion services,
and ancillary services. Each monthly billing payment is the sum of the total
fixed payment, fuel conversion payment, and the start-up payment. For each month
of the PPA term Williams is responsible to pay AES Ironwood for the fixed
payments for facility capacity, fuel conversion services and ancillary services
at the rates specified in Appendix 1 of the PPA. The PPA also includes certain
heat rate bonus and penalty payments, startup cost payments and penalties
payable by AES Ironwood for failure to be available for dispatch under certain
conditions.
5.1.4 Interconnection and Metering Equipment
AES Ironwood at its cost and expense will design, construct, install, own, and
maintain the Interconnection Facilities and Protective Gas Apparatus needed to
deliver the net electric energy to the electricity delivery point. AES Ironwood
is also responsible for the negotiation and execution of an Interconnection
Agreement with the host utility. The host utility will own and be responsible
for the design, installation, construction, and maintenance of the electric
metering equipment and any transmission equipment and related facilities
necessary to interconnect with
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<PAGE>
the host utility at the electric delivery point. Williams is required to
reimburse AES Ironwood up to a specified amount for reasonable costs incurred by
the host utility under the Interconnection Agreement. Williams is responsible
for installing, maintaining, calibrating, and testing the gas and oil metering
equipment. Net electric energy will be metered on an hour-by hour basis at the
metering point. Williams will pay to AES Ironwood the net amount shown on the
monthly statement within 30 days following the end of the applicable billing
month.
5.2 Interconnection Agreement
Stone & Webster reviewed the Interconnection Agreement by and between MET-ED
d/b/a GPU and AES Ironwood. Certain provisions of the Interconnection Agreement
are discussed below. For a summary of the material terms of the agreement,
reference is made to "Description of Project Contracts - Interconnection
Agreement" in the Offering Circular.
In general, Stone & Webster found that the Interconnection Agreement is
comparable to other similar agreements with which Stone & Webster is familiar.
In addition, the technical requirements for operating the transmission
interconnection (Appendix C of the Agreement) and system protection and control
(Appendix D), and for the installation of the interconnection (Appendix E)
appears to be reasonable.
5.3 Engineering, Procurement, and Construction Services
Stone & Webster reviewed the executed EPC Contract between AES Ironwood and
SWPC. Certain provisions of the EPC Contract are discussed below. For a summary
of the material terms of the agreement, reference is made to "Description of
Project Contracts - EPC Agreement" in the Offering Circular.
The EPC Contract is for a 705 MW combined cycle facility to be located in South
Lebanon Township near Lebanon, Pennsylvania. SWPC will provide a Facility which
is intended to have at least a 25-year useful life (when operated and maintained
in accordance with the Instruction Manual, the PPA, and the manufacturers'
recommendations. We believe the EPC Contract scope adequately describes the
services to be performed and is technically complete. SWPC's scope of services
is presented in detail in Appendix A of the EPC Contract. Our assessment of
SWPC's scope of services and the technical descriptions are presented in Chapter
3 of this report. This price includes agreed to and estimated price changes for
scope changes agreed to by AES Ironwood through the date of this Report, but
does not include certain scope changes currently under discussion, the price of
which are included in "Other Hard Costs" as described in Section 7.3. The total
current contract price is $238.0 million.
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5.3.1 SWPC Responsibilities
SWPC's responsibilities under the EPC Contract include the design, engineering,
procurement, and construction of the facility; startup, training, and testing;
and the supply of all machinery, equipment (excluding operational spare parts),
tools, construction fuels, chemicals, etc. to complete the Project. SWPC will be
responsible for all tasks necessary to complete the Project other than those
specifically assigned to AES Ironwood in Appendix A. SWPC will also prepare a
Quality Assurance Plan (Appendix K). SWPC will use this plan to ensure that the
construction and engineering methods and standards required are adhered to or
achieved. SWPC will develop a list of recommended operational spare parts and a
price list. This will be delivered to AES Ironwood at least 12 months prior to
the scheduled date for PA.
SWPC also has certain obligations with respect to labor and personnel,
permitting and permitting support, inspection and expediting, personnel
training, cleanup and waste disposal, security, coordination with other
contractors, and management and supervision of its subcontractors. Stone &
Webster believes that these areas of contractor responsibility have been
addressed adequately in the EPC Contract. SWPC is required to coordinate its
functions with other contractors involved with the Project. SWPC is also
required to arrange for construction-period water supply facilities, but the EPC
Contract does not address the disposal of construction-period sanitary waste
disposal.
SWPC will provide training to AES Prescott's operation staff. Beginning six
months prior to the Project Guaranteed Provisional Acceptance Date, SWPC will
provide on-site classroom training for AES Prescott's O&M staff. The training
curriculum is more completely described in Appendix A of the EPC Contract. In
addition to SWPC's own training it will also coordinate any Subcontractor
training sessions in a manner sufficient to provide the personnel with an
adequate understanding of the O&M aspects of each dimension of the Project as an
integrated whole. Stone & Webster agrees with this overall approach to preparing
and training the O&M staff.
Within 60 days of the Guaranteed Provisional Acceptance Date, SWPC will submit
to AES Ironwood a detailed electronic construction schedule consistent with the
schedule outlined in Appendix C of the EPC Contract. As soon as practical but no
later than 120 days after the Guaranteed Provisional Acceptance Date, SWPC will
provide AES Ironwood with a critical path method ("CPM") schedule for the
Project including activity duration for each major component of the Services
provided by SWPC.
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5.3.2 AES Ironwood Responsibilities
AES Ironwood is responsible for certain services associated with the EPC
Contract. These activities relate to: the appointment of an Owner's
representative; acquisition of the Facility site and access for SWPC;
acquisition of all applicable permits and real estate rights for the facility;
providing startup personnel; arranging for certain construction utilities (waste
disposal after the risk transfer date), fuel, and electrical interconnection
facilities on the utility side. These responsibilities are reasonable and
customary for this type of transaction.
5.3.3 Construction Schedule
AES Ironwood issued a Provisional Notice to Proceed as of September 23, 1998,
which required SWPC to begin the Services, including a full release of the
engineering, manufacturing, and procurement of the equipment on the date
specified. AES Ironwood is obligated to pay SWPC for all pre-Commencement Date
Services actually performed.
Stone & Webster reviewed the sequencing of events necessary to achieve Final
Acceptance of the Project and the criteria of each milestone. We believe that
the milestone criteria are technically reasonable. The significant milestones
are Mechanical Completion, Provisional Acceptance, Interim Acceptance, Final
Acceptance, and Project Completion. The Performance Tests and the PPA Output
Tests are conducted after Mechanical Completion in order to meet Provisional
Acceptance. The Reliability Run is required in order to meet Final Acceptance.
Project Completion occurs after Final Acceptance.
Interim Acceptance ("IA") is a milestone more specific to this agreement. IA
occurs when the gas-based electrical output and heat rate guarantee is not less
than those levels demonstrated during the completed performance test at
Provisional Acceptance.
5.3.4 Contract Price and Payment Schedule
The contract price (as adjusted for scope changes) will be paid out to SWPC in
installments over the construction schedule. The payments began with Provisional
Notice to Proceed and continue through construction according to the Payment and
Milestone Schedule (Appendix B). Retainage in the amount of 5% is withheld from
each scheduled payment except for the project completion payment. Stone &
Webster generally experiences retainage in the order of 5-10% of the contract
price. Upon achieving Final Acceptance of the Facility and the receipt of
documentation that all requirements have been satisfied, all the retainage may
be paid to the Contractor, except that AES Ironwood can hold back an amount
equal to $1 million and 150% of the punch list. Within 30 days after the Project
Completion all remaining retainage will be paid to SWPC.
AES Ironwood may deduct and set-off against any part of the balance due or to
become due from SWPC to AES Ironwood in connection with this agreement. If this
set-off amount is later
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determined not to have been due from SWPC, then SWPC will be entitled to
interest on the set-off amount. The EPC Contract allows for change orders that
may be initiated by AES Ironwood or SWPC. The change order protocol allows for
adjustments to both pricing and schedule. The protocol utilized in this EPC
Contract is similar to other contracts with which we are familiar and is
technically acceptable.
5.3.5 Performance Testing Plans
To demonstrate Final Acceptance, SWPC must demonstrate 100% of the gas-based and
fuel oil-based electrical output and heat rate guarantees during the performance
test, or demonstrate in a completed PPA output test the achievement of 100% of
the gas-based electrical output guarantee and satisfy AES Ironwood that the
capabilities outlined in Part B of Appendix B are achieved. In addition,
Mechanical Completion must be satisfied and the Reliability Guarantee achieved.
Also, the reliability run must be completed no later than the occurrence of
Final Acceptance of the Facility.
Stone & Webster reviewed the performance testing plan. The performance tests
will be performed in accordance with PTC-46, the test code for overall plant
performance testing. A plant specific performance test procedure will be written
by SWPC and submitted to AES Ironwood 90 days prior to the test. Stone & Webster
believes that the performance testing plan as specified in the EPC Contract
Appendix D is acceptable, customary, and should adequately demonstrate the
Project's performance.
AES Ironwood can elect Final Acceptance. In this scenario, SWPC has no liability
to AES Ironwood for any performance guarantee payments arising thereafter for
failure of the Facility to achieve any or all of the performance guarantees
applicable. SWPC can elect Final Acceptance. In this case SWPC must have
completed a performance test which demonstrates at least a level of 95% of the
gas-based and fuel oil-based electrical output and 108% of the gas-based and
fuel oil-based heat rate. SWPC is then obligated to pay all of the performance
guarantee payments as determined by the final or most recent completed
performance test. SWPC also must pay any Provisional Acceptance late completion
payments required.
5.3.6 Performance Guarantees
SWPC is required to design and construct the Facility to achieve certain
guaranteed performance levels in regards to capacity, heat rate, and
reliability.
The Performance Guarantees are designed to ensure that the Project's performance
meets or exceeds the minimum operating parameters of the PPA.
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5.3.7 Warranty Period
The EPC Contract provides a warranty for all machinery, engineering and design,
and for situations involving corrections, additions, repairs or replacements.
With respect to all machinery, equipment, materials, systems, supplies and other
items comprising the Project, the warranty period is the earlier to occur of (i)
12 months following the first to occur of Provisional Acceptance, Interim
Acceptance and Final Acceptance and (ii) with respect to the machinery,
equipment, materials, systems, supplies and other items comprising each unit,
the date on which such unit has operated for 8,000 equivalent operating hours
following the first to occur of Provisional Acceptance, Interim Acceptance, and
Final Acceptance.
With respect to the engineering and design of the Project and its components, 12
months following the first to occur of Provisional Acceptance, Interim
Acceptance and Final Acceptance; and in the case of any correction, addition,
repair or replacement to any machinery, equipment, materials, systems, supplies
or other items, including without limitation the engineering or design thereof,
during any existing warranty period, with respect to such machinery, equipment,
materials, systems, supplies or other items, twelve months after the date of
such correction, addition, repair or replacement, but in no event later than 24
months after the originally scheduled expiration date of the applicable initial
warranty period.
In addition, the EPC Contract states that SWPC warrants and guarantees that the
design of the Facility is based on a useful life design objective for a period
not less than 25 years from the COD.
Stone & Webster is of the opinion that the warranty period is acceptable based
on the commercial terms of the EPC Contract in conjunction with the Maintenance
Services Agreement. These two agreements, although independent, are
complementary and afford the Project a greater degree of protection that is
available from the EPC Contract alone. The risk posed by the possibility of a
component failure that occurs after the expiration of the one year EPC Contract
warranty has been mitigated because the revenues presented in the Projected
Operating Results are sufficient to allow the purchase of replacement
components. Component failures associated with catastrophic failures are
generally covered by insurance policies.
5.3.8 Liquidated Damages
If there is a shortfall in either electrical output or heat rate SWPC will pay
AES Ironwood rebates for failure to meet both interim and final performance
requirements. SWPC guarantees to AES Ironwood to demonstrate a performance level
equivalent to the performance guarantees at least by Final Acceptance. SWPC
agrees to pay a specified amount per kilowatt for each kilowatt less than the
gas-based electrical output guarantee and a specified amount per kilowatt for
each kilowatt less than the fuel oil-based output guarantee, as of Final
Acceptance. The output rebate
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for the gas-based operation is sufficient to motivate SWPC to meet their
gas-based electrical output guarantee.
SWPC will pay to AES Ironwood specified rebate amounts for each Btu/kWh that the
heat rate exceeds the heat rate guarantees for gas and Jet A fuel, including
interim rebates for heat rate while firing gas during the period from interim
acceptance until Final Acceptance. The heat rate rebates are sufficient to
motivate SWPC to meet their heat rate guarantees.
SWPC guarantees that at least one of the Provisional Acceptance, Interim
Acceptance, or Final Acceptance will occur on or before the Guaranteed
Provisional Acceptance Date, and that Final Acceptance will occur on or before
the Guaranteed Final Acceptance Date. If SWPC fails to achieve the Provisional,
Interim or Final Acceptance by the Guaranteed Provisional Acceptance Date, then
SWPC will pay AES Ironwood a specified dollar amount per day. If SWPC does not
achieve Provisional, Interim, or Final Acceptance within 40 days of the
Guaranteed Provisional Acceptance Date, then SWPC must provide an acceptable
plan to achieve acceptance within 12 months after the Guaranteed Provisional
Acceptance Date and the Final Acceptance of the Facility by the Guaranteed Final
Acceptance Date. The Provisional Acceptance Late Completion Payments cannot
exceed 20% of the contract price. If Final Acceptance does not occur on or
before the Guaranteed Final Acceptance Date, the Provisional Acceptance Late
Completion Payments, together with contingencies and prefunded IDC, will be
sufficient to cover the Williams payment plus debt service commitment for
approximately one year after the Guaranteed Provisional Acceptance Date.
The total aggregate Performance Guarantee Payment is equal to the lesser of the
aggregate total of the Performance Guarantee Payments or the total liquidated
damages subcap less all Provisional Acceptance Late Completion Payments. The
total liquidated damages subcap, including the Performance Guarantee Payment and
all Provisional Acceptance Late Completion Payments, cannot exceed 45% of the
contract price.
Stone & Webster believes, based on its review, that the liquidated damages
provisions are sufficient to motivate SWPC to meet their contractual
obligations.
5.4 Management and Operations Agreement
Stone & Webster reviewed the Operations Agreement and Services Agreement between
AES Ironwood and AES Prescott. Certain provisions of the agreement are discussed
below. For a summary of the material terms of the agreement, reference is made
to "Description of the Project Contracts - Operations Agreement" in the Offering
Circular.
Under the Operations Agreement AES Prescott is obligated to supply personnel and
support services required by AES Ironwood to supervise the development and
construction of the Project until the COD and to maintain and operate the
Facility following the COD through the remaining
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term of the agreement. The agreement commences on the execution date and
terminates the last day of the month in the 27th anniversary of the execution
date.
Stone & Webster is of the opinion that the Operations Agreement is reasonable
and believes that each Party is capable of fulfilling all of its obligations
therein.
5.5 Services Agreement
Stone & Webster reviewed the Services Agreement between AES and AES Prescott.
Certain provisions of the agreement are discussed below. For a summary of the
material terms of the agreement, reference is made to "Description of the
Project Contracts - Services Agreement" in the Offering Circular.
AES will provide certain personnel and support services to AES Prescott in order
for AES Prescott to perform its obligations under the Services Agreement. The
Services Agreement commences on the execution date and terminates the last day
of the month in the 27th anniversary of the execution date.
Stone & Webster is of the opinion that the Services Agreement is reasonable and
believes that each Party is capable of fulfilling all of its obligations
therein.
5.6 Effluent Supply Agreement
Stone & Webster reviewed the ESA between AES Ironwood and the City of Lebanon
Authority. Certain provisions of the agreement are discussed below. For a
summary of the material terms of the agreement, reference is made to
"Description of the Project Contracts - Effluent Supply Agreement" in the
Offering Circular.
The agreement was executed on March 3, 1998. The City of Lebanon Authority
operates a publicly owned wastewater treatment facility for the handling,
treatment, and disposal of wastewater, which meets applicable governmental
requirements. The City of Lebanon Authority is willing to provide this treated
effluent to the Project for use at the Facility. The term of this Agreement is
25 years with no more than four successive five-year extensions. The makeup
water will be delivered to the Project by way of a nominal 6.5 mile pipeline
with pumphouse and ancillary facilities. The pipeline is about 18 inches in
diameter and is designed for a capacity of 3,000 gallons per minute. The point
of delivery is located at or inside the Project property. In addition to the
treated effluent the City of Lebanon Authority will also supply potable water to
the Project.
Stone & Webster is of the opinion that the ESA is technically reasonable and
believes that each Party is capable of fulfilling all of its obligations
therein.
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5.7 Agreement Relating to Real Estate
Stone & Webster reviewed the Agreement Related to Real Estate between AES
Ironwood and Pennsy Supply, Inc. ("Pennsy"), dated October 22, 1998. Certain
provisions of the agreement are discussed below. For a summary of the material
terms of the agreement, reference is made to "Description of Project Contracts
Agreement Relating to Real Estate" in the Offering Circular.
AES is the equitable owner of the 35-acre property on which it intends to build
the Project. Pennsy currently owns tracts of land that border the AES property.
The agreement addresses certain real estate transfer, access and easement
agreements, and water pumping arrangements.
Additionally, the agreement confers preferred vendor status upon Pennsy for the
supply of certain construction materials to AES Ironwood. Responsibilities of
the parties regarding applications and permits including associated fees and
costs of construction and maintenance are delineated in the agreement and appear
reasonable. Based on other real estate agreements evaluated by Stone & Webster,
the terms of this agreement appear reasonable.
5.8 Maintenance Program Parts, Shop Repairs and Scheduled Outage
TFA Services Contract
Stone & Webster reviewed the executed Maintenance Services Agreement between AES
Ironwood and SWPC for the Project. Certain provisions of the agreement are
discussed below. For a summary of the material terms of the agreement, reference
is made to "Description of Project Contracts - Maintenance Program Parts, Shop
Repairs and Scheduled Outage TFA Services Contract" in the Offering Circular.
SWPC agrees to provide the parts and technical advice required to conduct the
major maintenance for the combustion turbines. SWPC provides a warranty for its
parts and the advice it provides in exchange for a fee paid by AES Ironwood.
Under the terms of the Maintenance Services Agreement, all major maintenance and
parts are to be provided by SWPC, even if the particular item is not covered by
the original equipment warranty or some provision of this services agreement.
The Maintenance Services Agreement obligates SWPC to notify AES Ironwood of any
engineering or design defects that develop in the 501G fleet and provide
remedial action.
The Maintenance Services Agreement provides combustion turbine major maintenance
(including all scheduled outages) and spare parts for this Project in a
reasonable manner for approximately the initial eight years of operation. This
service provided by an a affiliate of the combustion turbine supplier reduces
the risk of using improper parts or maintenance being conducted improperly on
the combustion turbines due to the close involvement of the original equipment
manufacturer's trained personnel. The Maintenance Services Agreement provides
risk mitigation by providing a warranty on parts provided as part of the
Agreement. The warranty period ends
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with the earlier of one year from date of installation of the part, 8000
equivalent base hours of operation, or 100 starts of the combustion turbine. The
Maintenance Services Agreement levelizes the major maintenance parts costs and
indexes costs to the type of combustion turbine operation in a reasonable and
consistent fashion. Under the agreement, AES Ironwood is responsible for labor
and supervision of labor for the major maintenance activities and the normal and
routine maintenance for the combustion turbines. These costs are included in the
operation and maintenance budget and accounted for in the Project's Projected
Operating Results. The Maintenance Services Agreement also obligates SWPC to
notify AES Ironwood of any engineering or design defects that develop in the
501G fleet and to provide remedial action. SWPC's scope of supply requirements
under the Maintenance Services Agreement are reasonable and consistent with
standard industry practice.
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6. Principal Project Participants
Stone & Webster reviewed the major Project participants and believe each should
be capable of fulfilling their obligations to one another as specified in the
various contracts and agreements of the Project.
6.1 AES Ironwood, LLC
AES Ironwood is a limited liability company, organized and existing under the
laws of Delaware. AES Ironwood was formed to develop, own, and operate the
Project. AES Ironwood is a special purpose project company and a subsidiary of
AES Ironwood, Inc.. AES Ironwood Inc. is a wholly owned subsidiary of The AES
Corporation ("AES"). AES is one of the world's largest global power companies
owning or having an interest in 97 plants totaling over 26,000 MW in 16
countries.
AES was founded in 1981 and has 18 years of experience developing and operating
large, complex power generating facilities. AES also distributes power in
Brazil, El Salvador and Argentina and heat in Kazakhstan. AES operates
gas-fired, oil-fired, hydropower, and solid-fuel plants, and employs
approximately 40,000 people around the world. AES currently owns assets worth in
excess of $10 billion. AES end-of-year 1998 revenue was $2.5 billion with a net
income of $308 million.
Stone & Webster believes that AES Ironwood, as an affiliate of AES and with the
assistance of SWPC under the terms of the Maintenance Services Agreement, should
be capable of operating and maintaining the Facility in accordance with standard
industry practices.
6.2 AES Prescott, LLC
AES Prescott is a Delaware limited liability company and a wholly owned
subsidiary of AES Ironwood, Inc. AES Prescott will manage the development and
construction of the Project pursuant to a development and construction
management agreement between AES Prescott and AES Ironwood. Stone & Webster
believes that AES Prescott, as an affiliate of AES, should be capable of
managing the development and construction of the Project.
6.3 Williams Energy Marketing & Trading Company
Williams is the Project's power purchaser and fuel supplier. Williams is a
corporation organized and existing under the laws of the State of Delaware and
is a wholly owned subsidiary of the Williams Companies. The Williams Companies,
through its subsidiaries, is engaged in the transportation and sale of natural
gas and petroleum products, and is engaged in energy commodity trading and
marketing. For the nine months ended September 1998, revenues were $5.64 billion
with a net income of $160 million.
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Stone & Webster believes that Williams possesses the organization and personnel
to execute its obligations under the PPA, and is familiar with the provision of
fuel and purchase of electricity from large electrical generation facilities.
6.4 Siemens Westinghouse Power Corporation
SWPC is the Project's EPC contractor. SWPC is a newly formed Delaware
corporation that was formed in 1998 when Siemens Corporation acquired the
Westinghouse Power Generation business from the CBS Corporation in August 1998.
SWPC, headquartered in Orlando, Florida, is the regional business division for
the Americas and operates engineering and manufacturing centers in North
America.
Siemens Corporation owns all of the SWPC stock and is an industry leader in
telecommunications; energy and power; transportation; information systems and
other products. For the first nine months of fiscal year 1997/1998 Siemens' U.S.
businesses, with more than 55,000 employees, recorded sales of $7.0 billion.
Siemens AG, based in Berlin and Munich, owns all of the Siemens Corporation
stock and is one of the world's largest electrical engineering and electronics
companies and employs over 400,000 people worldwide in more than 190 countries.
Stone & Webster believes that SWPC possesses the organization and personnel to
execute its obligations under the EPC Contract, and is familiar with the
construction of large electrical generation facilities. Stone & Webster also
believes SWPC considers the 501G technology advancement as being extremely
important to its continued participation in the advanced combustion turbine
market and therefore will ensure that the initial project installations are
closely supported.
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7. Assessment of Projected Operating Results
7.1 Overview
The Projected Operating Results consist of a pro forma financial model for AES
Ironwood (the "Base Case"). Stone & Webster has reviewed the assumptions, data,
and the calculations necessary to support the cash flow projections of cash flow
available for debt service. Stone & Webster has verified that the underlying
model assumptions are consistent with the expected performance and the
commercial terms of the Project Agreements. Stone & Webster has validated key
calculations to ensure that the resulting revenues, expenses, cash flow, and
DSCRs were correctly calculated. Stone & Webster has reviewed the Projected
Operating Results and compared them to data provided in the Project Agreements,
data provided to Stone & Webster and power industry public information. Stone &
Webster has not reviewed the tax and depreciation assumptions, which were
provided by AES Ironwood, and financing assumptions, including the amortization
schedule and interest rates, which were provided by Lehman Brothers.
Lastly, Stone & Webster performed several sensitivities to determine the impact
of certain variables on the DSCRs. The Projected Operating Results for the Base
Case and the sensitivity cases are included in Exhibit I of this Report. The
Projected Operating Results are calculated in nominal dollars based on an
assumed inflation rate of 3% per annum.
7.2 Principal Considerations and Assumptions
In preparing this Report and the conclusions contained herein, Stone & Webster
has made certain assumptions with respect to the conditions, which may exist, or
events, which may occur in the future. While Stone & Webster believes these
assumptions to be reasonable for the purpose of this Report, they are dependent
on future events, and actual conditions may differ from those assumed. In
addition, Stone & Webster has used and relied on information provided to us by
sources that we believe to be reliable. Stone & Webster believes that the use of
this information and assumptions is reasonable for the purposes of our Report.
However, some assumptions may vary significantly due to unanticipated events and
circumstances. To the extent that actual future conditions may differ from those
assumed in this Report, or provided to us by others, the actual results will
vary from those forecast. This Report summarizes our work up to the date of the
Report and changes in conditions occurring or that became known after such date
could affect the Projected Operating Results.
The principal considerations and assumptions related to the Projected Operating
Results are listed below:
1. Stone & Webster has assumed that the Project will be designed and
built in accordance with the design specifications and the construction
schedule dictated in the EPC contract.
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2. The electricity market energy and capacity price projections, which
are relevant during the post PPA period were prepared by Hagler Bailly
for Lehman Brothers, in its capacity as Initial Purchaser, using a market
simulation model. Stone & Webster reviewed the technical inputs to the
Hagler Bailly model and found them to be reasonable. Stone & Webster did
not independently verify the methodology used by Hagler Bailly to develop
the energy or capacity price forecasts nor verify the accuracy of the
forecasts.
3. Stone & Webster has made no determination as to the validity and
enforceability of any contract, agreement, rule, or regulation as
applicable to the Facility and its operations. For the purposes of this
Report, Stone & Webster has assumed that all contracts, agreements,
rules, or regulations will be valid and fully enforceable in accordance
with the terms and that all parties will comply with the provisions of
their respective agreements.
4. Williams will arrange for the procurement and delivery of the fuel to
the Facility and will purchase all available capacity, ancillary
services, and energy from AES Ironwood in accordance with the PPA.
5. Stone & Webster has reviewed the capital and O&M budgets for AES
Ironwood. We have assumed that the Facility will operate and be
maintained in accordance with the Operations Agreement, O&M and capital
budgets, standard industry practice, and in a safe and environmentally
responsible manner.
6. Stone & Webster has assumed for purposes of the Projected Operating
Results that AES Ironwood will operate the Facility pursuant to the PPA
through the end of the first quarter of 2021 and as a merchant plant for
the term of the Bonds.
7. Stone & Webster has assumed that the maintenance will be performed by
AES Prescott in accordance with the Operations Agreement and by SWPC in
accordance with the Maintenance Services Agreement.
8. The natural gas and fuel oil prices are inputs to the Hagler Bailly
model. Stone & Webster reviewed the fuel price forecasts provided by the
independent fuel consultant, CC Pace. It is assumed that the fuel will be
available in sufficient quantities and at the prices forecasted for the
period covered in the Projected Operating Results.
9. Stone & Webster has assumed that all licenses, permits, and approvals
required to construct and operate the Project which have not been
obtained will be obtained in a timely basis and any changes that may be
required to any permits will not materially affect the design, operation,
cost, or maintenance of the Project.
10. Stone & Webster has assumed that AES Ironwood will be able to
purchase emission allowances, to the extent any are required, on an as
needed basis to comply with the emission limits. We have assumed that
emission offsets will be available for purchase at the prices forecasted
in the Projected Operating Results. Stone & Webster has not evaluated the
feasibility or cost of AES Ironwood implementing alternate strategies for
complying with its emission limits.
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11. Stone & Webster has not evaluated the non-operating expenses
projected by AES Ironwood including property and capital franchise taxes,
insurance, and general and administrative expenses.
7.3 Project Cost
Stone & Webster evaluated AES Ironwood's estimate for the total Project costs
included in the pro forma financial model. The Projected Operating Results Base
Case total Project construction costs are estimated to be $342 million
(excluding contingency) or approximately $485/kW (net) in the pro forma
financial model. The breakdown of the total Project costs is provided in the
following table:
<TABLE>
<CAPTION>
========================================================================
Total Project Costs
($ million)
========================================================================
<S> <C>
EPC Contract $238.00
Other Hard (Construction-Related) Costs 13.94
Other Development and Construction Costs 21.35
Initial Working Capital 1.80
Net Interest During Construction 51.14
Start-up and Other Soft Costs 15.42
Company's Contingency 17.00
------------------------------------------------------------------------
Total Project Costs $358.65
========================================================================
</TABLE>
Stone & Webster evaluated the Project's lump sum fixed price for the EPC
Contract of $238.0 million (including adjustments), which is equivalent to
approximately $338/kW (net). The EPC Contract price is very competitive relative
to similar facilities.
The non-EPC portion of the total Project cost includes construction management
costs, start-up costs, insurance, financing costs including IDC as well as
lenders, legal, and consultants fees, and working capital. The subtotal of the
non-EPC portion of the total Project cost, excluding contingency, equals $104
million, or 29% of the total Project costs, which is within the range of other
similar projects.
The Project development costs represent slightly less than 5% of the total
Project cost, which is reasonable for a project of this type. The Base Case
assumes $1.8 million for the initial working capital, which is equivalent to 45
days of non-fuel O&M expenses. The financial model assumes
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a 4.7% contingency in the total Project cost, which based on our experience, is
typical of similar projects.
The financial model currently has $1.85 million in its capital budget for the
initial spare parts. AES Ironwood intends to designate those operational spare
parts approximately one year before commercial operations. In addition, there
are $5.4 million worth of combustion turbine maintenance spares imbedded in the
Maintenance Service Agreement, which will be available during the first 8000
EBH. SWPC has committed to stock one complete set of hot gas path parts for
every four combustion turbines sold.
7.4 Power Production
Stone & Webster evaluated the technical assumptions associated with the
performance of the Project for electricity production. The Base Case assumes a
705 MW net Facility capacity at site conditions, a 92.5% average availability
factor ("AF"), and 88.1% average capacity factor over the 26-year term of the
Bond issue. AF is defined as the total hours in a year (i.e., 8760) minus
planned maintenance hours and forced outage hours. Capacity factor is defined as
the actual hours of operation (i.e., dispatched) over the year.
The Base Case assumes that the Facility will continue to operate as a merchant
facility after the expiration of the 20-year PPA. Under the merchant operation
the Facility capacity is assumed to operate at a degraded net full load Facility
capacity at site conditions ranging from 698 MW while operating on natural gas
to 621 MW while operating on fuel oil.
7.4.1 Power Plant Availability
Power plant availability is a function of many variables, including design and
construction quality, operation and maintenance practices, and fuel quality. In
order to be conservative, the Base Case assumes a lower AF in years one and two
than in subsequent years. AES Ironwood projects the AF to be 90.4% in the first
two years and an average of 92.7% in subsequent years.
7.4.2 Capacity Factor
The Facility capacity factor is based on Hagler Bailley's economic dispatch of
AES Ironwood within the context of its PJM market study. Stone & Webster did not
independently verify the methodology that Hagler Bailly used to develop the
capacity factor nor verify the accuracy of the forecast. Hagler Bailly projected
for the Base Case that the AES Ironwood will have an average capacity factor of
88.1% during the term of the PPA and the post PPA period.
B-57
<PAGE>
7.4.3 Capacity
The Base Case Projected Operating Results are based on the net Facility capacity
operating on natural gas at site conditions adjusted to 92(degrees)F and
including degradation. The Base Case model assumes a 4% degradation factor for
output over the six-year maintenance cycle, which is standard for similar
facilities. Stone & Webster considers the assumed degradation to be within the
range of expected degradation for such power generation facilities.
7.5 Revenues
Williams is obligated for a period of 20 years from the COD to purchase the
Facility capacity, approximately 655 MW +/-10% (summer capacity) at 92(degrees)F
when firing on natural gas pursuant to the PPA. Williams will pay AES Ironwood
for the Facility capacity, fuel conversion services, and ancillary services
provided under the PPA. The Project revenues are calculated based on the pricing
and payment structure defined in Appendix 1 of the PPA. The revenues for the
first full calendar year (Year 2002) are $60.2 million.
The Total Fixed Payment is based on a Fixed Capacity Rate, which has a set
schedule for the 20-year term of the PPA. If the Project Equivalent Availability
Factor ("EAF") as defined in Appendix 1 to the PPA is greater than 85%, there is
an Annual Availability Energy Adjustment ("AAEA") payable to AES Ironwood. The
Annual Availability Capacity Adjustment ("AACA") will be calculated as a credit
to Williams each year based on the EAF if the EAF is lower than 85%. For the
Base Case there is no AACA projected for the 20-year term of the PPA. The AAEA
and AACA are paid in the first quarter of the operating year following the end
of the previous year.
Williams provides fuel to the Project for conversion into energy. Consequently,
the Project is not responsible for the cost of fuel. Rather Williams pays a fee
to AES Ironwood to convert the fuel into energy. The Fuel Conversion Rates are
escalated annually at the Gross Domestic Product Implicit Price Deflator
("GDPIPD"). The Base Case assumes a GDPIPD of 3%.
In addition to the fuel conversion revenue, Williams is required to pay AES
Ironwood an energy efficiency bonus or penalty ("HRB/HRP"). The energy
efficiency bonus or penalty is based on the difference between the Heat Rate
Target ("HRT") while operating on natural gas and the actual Facility Heat Rate
("FHR"), net electric energy delivered, and the natural gas price index.
The Base Case assumes a 2% degradation factor for heat rate over the six-year
maintenance cycle, which is standard for similar facilities. Stone & Webster
considers the assumed degradation to be within the range of expected degradation
for such power generation facilities. After 20 years from COD at the end of the
PPA term, the Base Case assumes that the Project net capacity and energy will be
sold into the PJM system for a period through and beyond the maturity of the
Bonds. Hagler Bailly estimated the Base Case first merchant operating year
B-58
<PAGE>
(2021) AES Ironwood plant-specific energy and capacity market price projections
in 1996 dollars at $27.16/MWh and $5.38/MWh, respectively. The total operating
revenue for the first full merchant calendar year (Year 2022) is $379 million,
which includes AAEA revenues earned in the final operating year of the PPA term.
7.6 Operating Expenses
The estimated Project expenses during the PPA period consist of non-fuel fixed
and variable expenses. The natural gas and fuel oil will be supplied and
transported to the Project under the terms established in the PPA. During the
PPA period, Williams will arrange for the procurement and delivery of the
natural gas and fuel oil to the applicable Facility fuel delivery point. After
the PPA period, AES Ironwood will be responsible for the procurement and
delivery of all the fuel to the Facility.
In the pro forma, the estimated O&M expenses are in nominal dollars reflecting
an assumed 3% inflation per year. The first full calendar year (Year 2002) fixed
and variable non-fuel O&M expenses, which total $17.2 million, and are detailed
in the following table.
<TABLE>
<CAPTION>
===========================================================================
Estimated Non-Fuel O&M Expenses
(2002 $ ,000)
===========================================================================
<S> <C>
Fixed O&M $13.2
Variable O&M 2.1
Administration 0.3
Operating Insurance 0.6
Property Taxes 0.9
---------------------------------------------------------------------------
Total Non-Fuel O&M Expenses $17.2
===========================================================================
</TABLE>
Stone & Webster reviewed the O&M assumptions utilized in the Projected Operating
Results. The information reviewed included assumptions and forecasts for unit
performance; staffing functions and levels; annual O&M budget summary; and unit
overhaul plans and schedules. Stone & Webster compared the information with its
experience with plants of similar configuration and Utility Data Institute cost
and staffing information for similar plants. Stone & Webster considers these
Project assumptions to be reasonable and comparable to other facilities of
similar design.
B-59
<PAGE>
7.6.1 Maintenance Schedule
All maintenance work and spare parts replacement for the combustion turbine
during the first eight years of the Facility operations will be provided by SWPC
through the Maintenance Services Agreement and thereafter will be the
responsibility of AES Ironwood. The O&M schedule and budget assumes that each
combustion turbine accumulates 8000 EBH each year. SWPC's recommended frequency
for annual inspections, hot gas path inspections, and major overhauls are being
used. In addition, AES Ironwood has included in the schedule and budget a "cover
lift" for every hot gas path inspection in order to restore any performance
degradation experienced since the previous major overhaul. Stone & Webster
believes that AES Ironwood's planned overhaul and maintenance schedule is
reasonable and adequate to support its operational and business objectives.
7.6.2 Operations and Maintenance Budget
Stone & Webster reviewed the non-fuel fixed, variable, and major maintenance
expenses in the Projected Operating Results. Stone & Webster believes that the
O&M budget is sufficient to support the planned staffing level, the maintenance
and overhaul schedule, and the project's performance and business objectives.
7.6.3 O&M Staffing Levels
AES Ironwood's planned functional positions and staffing levels were reviewed
and are considered satisfactory to operate and maintain the Facility safely in
accordance with the operational and regulatory requirements. The staffing levels
compare favorably with and are typical of those found in similarly configured
plants that Stone & Webster has reviewed. Our review also included the resume of
the proposed Project Plant Manager, who appears to have relevant experience in
similar plants and has previously demonstrated the requisite skills to perform
satisfactorily for AES Ironwood. Stone & Webster believes that the staffing
levels are adequate to support AES Ironwood's operational and business
objectives.
7.6.4 Emission Compliance Costs
The Projected Operating Results include an emission compliance limit cost. AES
Ironwood will be required to purchase allowances equal to one ton per year for
all SO2 emitted from the Facility and for all NOx emitted from the Facility
during the summer ozone season (defined as May through September). The Base Case
assumes that the Project will need approximately 150 tons of NOx allowances per
year at the current market value of $2,200 per ton for a vintage 2001 allowance.
The Project has already secured NOx allowances for the first two years of
operation and has capitalized these costs. NOx allowance costs in the year 2003
are projected to be $0.4 million. The Base Case assumes that the Project will
need approximately 198 tons of SO2 allowances per year, commencing at COD in
year 2001, at the current market value of $200 per
B-60
<PAGE>
ton. The SO2 allowance cost for 2001 is $0.02 million. Both the NOx and SO2
allowance costs are projected to increase at 3% per annum.
7.6.5 Fuel Expense
In operating year 21, the term of the PPA will end and AES Ironwood will be
responsible for providing the fuel for the Facility to operate as a merchant
plant. The Base Case assumes that the fuel will be purchased at the price
stipulated in the CC Pace Fuel Forecast. The delivered natural gas price will
start at $2.44/mmBtu in real 1996$'s in year 2001 and increases to $2.64/mmBtu
in real 1996$'s in the first merchant operating year, 2021. Per the terms of the
PPA, Williams will supply Jet A fuel oil to the Facility throughout the 20-year
PPA. Following the PPA period, the Facility will purchase No. 2 fuel oil. The
No. 2 fuel oil price is projected by CC Pace to be $3.69/mmBtu in 1996$ in 2021.
The fuel expense assumed during the post PPA period is based on the Facility
heat rate at ISO conditions, the Facility capacity factor, and the unit cost of
fuel. The fuel expense for the first full calendar year of merchant operation is
$219.2 million. When AES Ironwood becomes a merchant plant, the fuel expense
will be the single largest expense.
The CC Pace Fuel Forecast is given in 1998$'s. The Hagler Bailly report assumes
that the fuel expenses are in 1996$'s and are escalated at 2.5%. The unit fuel
costs used in the CC Pace Fuel Forecast are shown in the following table.
<TABLE>
<CAPTION>
==========================================================================================
Fuel Price Forecast
==========================================================================================
Delivered Natural Gas Delivered No. 2 Fuel Oil
Year ($1996/mmBtu) ($1996/mmBtu)
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2021 2.64 3.69
2022 2.65 3.69
2023 2.67 3.69
2024 2.68 3.69
2025 2.69 3.69
==========================================================================================
</TABLE>
The CC Pace Fuel Forecast for the PJM area is consistent with Stone & Webster's
forecasts for fuels.
7.7 Financing Assumptions
Lehman Brothers provided the financing assumptions for the $358.65 million
Project cost. The source of funds will consist of $50.15 million in equity and
$308.5 million. The capital cost items are allocated monthly during the
construction period to calculate releases of Bond proceeds and interest during
construction ("IDC"). The combined annual debt service (principal plus
B-61
<PAGE>
interest, annual administrative and LOC fees) during the post construction
period ranges from a low of $16.3 million in 2001 to a high of $35.4 million in
2008.
7.8 Projected Operating Results
The Projected Operating Results are shown in Exhibit I of this Report. On the
basis of our studies and analyses of the Project, the Project Agreements and the
assumptions set forth in this Report, the projected revenues from the sale of
fuel conversion services, capacity, and ancillary services are more than
adequate to pay the annual O&M expenses (including provisions for major
maintenance), other operating expenses, and debt service.
The Base Case indicate the following DSCRs:
<TABLE>
<CAPTION>
==================================================================================
Base Case
Debt Service Coverage
==================================================================================
Minimum Average
----------------------------------------------------------------------------------
<S> <C> <C>
PPA Period
----------------------------------------------------------------------------------
1.45x 1.46x
----------------------------------------------------------------------------------
Post PPA Term
----------------------------------------------------------------------------------
5.77x 5.81x
----------------------------------------------------------------------------------
Full Term of the Bonds
----------------------------------------------------------------------------------
1.45x 2.30x
==================================================================================
</TABLE>
7.9 Sensitivity Analyses
Due to uncertainties necessarily inherent in relying on assumptions and
projections, it should be anticipated that actual operating results would
differ, perhaps, materially, from those assumed and described herein. In order
to demonstrate the impact of certain circumstances on the Projected Operating
Results, certain sensitivity analyses have been developed by Stone & Webster. It
should be noted that other examples could have been considered, and those
presented are not intended to reflect the full extent of possible impacts on the
Project.
Stone & Webster performed several sensitivity analyses using the pro forma
financial model by varying the following Project specific key input parameters
including power plant availability, heat rate degradation factors, and O&M
costs.
7.9.1 Project Sensitivities
The three Project sensitivities include increasing the Base Case O&M costs,
increasing the Base Case heat rate, and decreasing the Base Case AF.
B-62
<PAGE>
Operation and Maintenance Cost Sensitivity - The Base Case O&M costs were
increased by 15%. The resulting average and minimum DSCRs for the PPA term, the
post PPA term, and the full term of the Bonds are summarized in the following
table.
<TABLE>
<CAPTION>
==================================================================================
Sensitivity Case 1
Operation and Maintenance
Debt Service Coverage Ratios
==================================================================================
Minimum Average
----------------------------------------------------------------------------------
<S> <C> <C>
PPA Term
----------------------------------------------------------------------------------
1.29x 1.38x
----------------------------------------------------------------------------------
Post PPA Term
----------------------------------------------------------------------------------
5.58x 5.64x
----------------------------------------------------------------------------------
Full Term of the Bonds
----------------------------------------------------------------------------------
1.29x 2.20x
==================================================================================
</TABLE>
Heat Rate Degradation Factors - To test the sensitivity of the Projected
Operating Results to heat rate, Stone & Webster increased the Base Case heat
rate by 5% (ignoring liquidated damages "by-downs'). The resulting average and
minimum DSCRs for the PPA term, the full term, and the post PPA term are
summarized in the following table.
<TABLE>
<CAPTION>
==================================================================================
Sensitivity Case 2
Heat Rate Degradation
Debt Service Coverage Ratios
==================================================================================
Minimum Average
----------------------------------------------------------------------------------
<S> <C> <C>
PPA Term
----------------------------------------------------------------------------------
1.11x 1.24x
----------------------------------------------------------------------------------
Post PPA Term
----------------------------------------------------------------------------------
5.26x 5.29x
----------------------------------------------------------------------------------
Full Term of the Bonds
----------------------------------------------------------------------------------
1.11x 2.02x
==================================================================================
</TABLE>
Availability Factor Sensitivity - To test the pro forma sensitivity the Base
Case AF assumption was changed. The Base Case AF is 90.4% for the first two
years and ranges from 89.2% to 93.7% for the remaining life of the Facility. Due
to the evolutionary nature of the 501G gas turbine design Stone & Webster took a
more conservative approach and estimated the Facility AF to be approximately 85%
in the first two years and to increase to 90% in the remaining years of the term
of the Bonds. The resulting average and minimum DSCRs for the PPA term, the full
term, and the post PPA term are summarized in the following table.
B-63
<PAGE>
<TABLE>
<CAPTION>
==================================================================================
Sensitivity Case 3
Availability Factor
Debt Service Coverage Ratios
==================================================================================
Minimum Average
-----------------------------------------------------------------------------------
<S> <C> <C>
PPA Term
-----------------------------------------------------------------------------------
1.41x 1.43x
-----------------------------------------------------------------------------------
Post PPA Term
-----------------------------------------------------------------------------------
5.70x 5.73x
-----------------------------------------------------------------------------------
Full Term of the Bond
-----------------------------------------------------------------------------------
1.41x 2.26x
==================================================================================
</TABLE>
7.9.2 Hagler Bailly Sensitivities
In addition, sensitivity of the Project results was assessed for the two
downside alternatives, Low Demand Growth Case and a High Gas Price Case. The
High Gas Price and Low Demand Growth scenarios were taken from the Hagler Bailly
forecasts. Stone & Webster applied the two Hagler Bailly "macroeconomic"
downside sensitivities to the Base Case.
High Gas Price - The natural gas prices were uniformly increased by $0.50 per
mmBtu (in 1996$) above the CC Pace forecast levels. The resulting average and
minimum DSCRs for the post PPA term are summarized in the following table.
<TABLE>
<CAPTION>
=====================================================================================
Sensitivity Case 4 - High Gas Price
Debt Service Coverage Ratios
=====================================================================================
Minimum Average
-------------------------------------------------------------------------------------
<S> <C> <C>
Post PPA Term
-------------------------------------------------------------------------------------
4.98x 5.13x
=====================================================================================
</TABLE>
B-64
<PAGE>
Low Demand Growth - The demand growth rates were reduced by a third, compared to
the Base Case, for the period 2017 through 2025. In this case the peak and total
demand grew at only 0.50% and 1.00% per annum, respectively beginning in 2017,
while new capacity building remained per the Hagler Bailly base case. The
resulting average and minimum DSCRs for the post PPA term are summarized in the
following table.
<TABLE>
<CAPTION>
=====================================================================================
Sensitivity Case 5 - Low Demand Growth
Debt Service Coverage Ratios
=====================================================================================
Minimum Average
-------------------------------------------------------------------------------------
<S> <C> <C>
Post PPA Term
-------------------------------------------------------------------------------------
4.70x 4.93x
=====================================================================================
</TABLE>
7.10 Liquidated Damages Analyses
Stone & Webster reviewed the impact on the average DSCRs if SWPC fails to pass
certain performance tests and there is a long-term performance deficiency over
the term of the Bonds. It was assumed that the performance liquidated damages
paid to AES Ironwood by SWPC would be used to buy down the Bonds on a pro rata
basis. The analysis was performed to demonstrate that the liquidated damages for
the guaranteed net electrical output and guaranteed net heat rate are sufficient
to maintain the DSCRs at the same level as projected in the Base Case.
It is projected that the average DSCRs over the term of the Bonds, after payment
of the liquidated damages due to a failure to achieve the guaranteed net
electrical output and the guaranteed net heat rate, will generally remain at the
same level as the average DSCRs in the Base Case for deficiencies up to
approximately 5% in net electrical output and 6% in net heat rate.
SWPC is required to pay liquidated damages for a delay in the Facility
completion. SWPC will pay AES Ironwood $110,000 for each day after the required
Facility completion date that the Facility completion is not achieved. The
liquidated damages for a delay in the Facility completion cannot exceed 20% of
the contract price. Such payment, together with contingencies and prefunded IDC,
will be sufficient to cover the Williams payment plus debt service commitment
for approximately one year after the Guaranteed Provisional Acceptance Date.
B-65
<PAGE>
Exhibit I
Base Case
Increased O&M Sensitivity (Case #1)
Increased Heat Rate Sensitivity (Case #2)
Decreased Availability Sensitivity (Case #3)
Hagler Bailey High Gas Price Sensitivity (Case #4)
Hagler Bailly Low Demand Growth Sensitivity (Case #5)
B-66
<PAGE>
Confidential
Exhibit I
AES Ironwood Projected Operating Results
Base Case
<TABLE>
<CAPTION>
PPA Period
------------------------------------------------------------------------------------
Year Ending December 31, 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues 35.1 60.2 60.4 63.4 65.4 65.0 68.0 70.1 64.1 63.1 65.5
Merchant Revenues - - - - - - - - - - -
------------------------------------------------------------------------------------
Total Operating Revenues 35.1 60.2 60.4 63.4 65.4 65.0 68.0 70.1 64.1 63.1 65.5
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Interest Earned on Accounts ($million) 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.2 0.3 0.5
------------------------------------------------------------------------------------
Operating Expenses ($million)
Fuel - - - - - - - - - - -
Fixed O&M 7.0 13.2 9.5 10.6 12.3 9.8 11.5 13.4 11.2 10.6 10.6
Variable O&M 1.3 2.1 2.2 2.3 2.4 5.2 4.5 2.7 2.7 2.8 3.0
Administration 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4
Insurance - 0.6 1.1 1.1 1.2 1.2 1.2 1.3 1.3 1.3 1.4
Property Taxes 0.5 0.9 0.9 1.0 1.0 1.0 1.1 1.1 1.1 1.2 1.2
Local Taxes 0.0 0.0 0.1 0.1 0.1 0.1 0.2 0.2 0.3 0.3 0.3
------------------------------------------------------------------------------------
Total Operating Expenses 8.9 17.2 14.1 15.4 17.3 17.7 18.9 19.0 16.9 16.6 16.8
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Cash Flow Available for Debt Service ($million) 26.3 43.2 46.6 48.2 48.3 47.5 49.4 51.4 47.4 46.8 49.2
------------------------------------------------------------------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 308.5 306.5 301.8 295.4 288.4 281.2 272.1 260.7 251.1 241.1 228.4
Principal and Interest 15.9 29.2 31.7 32.9 33.0 32.5 33.7 35.1 32.4 32.0 33.6
LOC & Administrative Fees 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
------------------------------------------------------------------------------------
Total Debt Service 16.3 29.6 32.0 33.2 33.3 32.8 34.0 35.4 32.7 32.3 33.9
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Annual Debt Service Coverage 1.61x 1.46x 1.45x 1.45x 1.45x 1.45x 1.45x 1.45x 1.45x 1.45x 1.45x
------------------------------------------------------------------------------------
<CAPTION>
PPA Period
---------------------------------------------------------------------------
Year Ending December 31, 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021*
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues 65.6 67.3 67.1 64.8 66.2 65.8 63.0 64.4 64.6 27.5
Merchant Revenues - - - - - - - - - 215.3
---------------------------------------------------------------------------
Total Operating Revenues 65.6 67.3 67.1 64.8 66.2 65.8 63.0 64.4 64.6 242.8
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Interest Earned on Accounts ($million) 0.3 0.3 0.4 0.2 0.3 0.5 0.3 0.3 0.4 0.2
---------------------------------------------------------------------------
Operating Expenses ($million)
Fuel - - - - - - - - - 123.4
Fixed O&M 13.3 13.5 11.5 11.7 12.8 12.6 15.7 16.1 13.7 13.6
Variable O&M 6.3 5.5 3.3 3.3 3.5 3.6 7.6 6.6 4.0 4.1
Administration 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5
Insurance 1.4 1.5 1.5 1.6 1.6 1.7 1.7 1.8 1.8 1.9
Property Taxes 1.2 1.3 1.3 1.3 1.4 1.4 1.5 1.5 1.5 1.6
Local Taxes 0.2 0.2 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.9
---------------------------------------------------------------------------
Total Operating Expenses 22.9 22.3 18.2 18.7 20.1 20.1 27.3 26.9 22.0 146.0
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Cash Flow Available for Debt Service ($million) 43.0 45.3 49.3 46.4 46.4 46.2 36.0 37.8 43.0 97.1
---------------------------------------------------------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 219.0 207.1 191.2 175.9 159.2 141.1 128.6 113.8 93.7 76.1
Principal and Interest 29.3 30.8 33.7 31.7 31.7 31.6 24.5 25.8 29.5 25.2
LOC & Administrative Fees 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.3 0.3 0.2
---------------------------------------------------------------------------
Total Debt Service 29.6 31.1 34.0 32.0 32.0 31.9 24.8 26.0 29.7 25.5
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Annual Debt Service Coverage 1.45x 1.45x 1.45x 1.45x 1.45x 1.45x 1.45x 1.45x 1.45x 3.81x
---------------------------------------------------------------------------
<CAPTION>
=============================
Post PPA Period
-----------------------------
Year Ending December 31, 2022 2023 2024 2025
-----------------------------
<S> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues - - - -
Merchant Revenues 378.9 389.7 391.5 416.2
-----------------------------
Total Operating Revenues 378.9 389.7 391.5 416.2
-----------------------------
-----------------------------
Interest Earned on Accounts ($million) 0.3 0.6 0.3 0.2
-----------------------------
Operating Expenses ($million)
Fuel 219.2 228.8 226.8 238.4
Fixed O&M 13.3 14.9 19.3 18.7
Variable O&M 4.2 4.4 9.1 7.9
Administration 0.5 0.5 0.5 0.6
Insurance 1.9 2.0 2.0 2.1
Property Taxes 1.6 1.7 1.7 1.8
Local Taxes 1.6 2.3 3.0 3.8
-----------------------------
Total Operating Expenses 242.4 254.6 262.4 273.2
-----------------------------
-----------------------------
Cash Flow Available for Debt Service ($million) 136.8 135.7 129.4 143.3
-----------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 59.0 40.5 21.3 0.0
Principal and Interest 23.3 23.1 22.1 22.5
LOC & Administrative Fees 0.2 0.2 0.2 0.2
-----------------------------
Total Debt Service 23.6 23.3 22.3 22.7
-----------------------------
-----------------------------
Annual Debt Service Coverage 5.81x 5.81x 5.80x 5.77x
=============================
</TABLE>
* The first five months of 2021 include PPA cash flow and the last seven months
of 2021 include Post PPA cash flow. The resulting blended DSCR is 3.81.
Average Debt Coverage During PPA 1.46x
Minimum Debt Coverage During PPA 1.45x
Average Debt Coverage Post PPA 5.81x
Minimum Debt Coverage Post PPA 5.77x
Average Debt Coverage During 2.30x
Bond Term
B - 67
<PAGE>
Confidential
Exhibit I
AES Ironwood Projected Operating Results
Increased O&M Sensitivity (Case #1)
<TABLE>
<CAPTION>
PPA Period
------------------------------------------------------------------------------------
Year Ending December 31, 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues 35.1 60.2 60.4 63.4 65.4 65.0 68.0 70.1 64.1 63.1 65.5
Merchant Revenues - - - - - - - - - - -
------------------------------------------------------------------------------------
Total Operating Revenues 35.1 60.2 60.4 63.4 65.4 65.0 68.0 70.1 64.1 63.1 65.5
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Interest Earned on Accounts ($million) 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.2 0.3 0.5
------------------------------------------------------------------------------------
Operating Expenses ($million)
Fuel - - - - - - - - - - -
Fixed O&M 7.4 13.9 9.7 11.0 13.1 10.3 12.1 14.2 12.5 12.2 12.2
Variable O&M 1.4 2.5 2.5 2.7 2.8 6.0 5.2 3.1 3.1 3.2 3.4
Administration 0.2 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Insurance - 0.7 1.3 1.3 1.3 1.4 1.4 1.5 1.5 1.5 1.6
Property Taxes 0.6 1.0 1.1 1.1 1.1 1.2 1.2 1.2 1.3 1.3 1.4
Local Taxes 0.0 0.0 0.1 0.1 0.1 0.1 0.2 0.2 0.3 0.3 0.3
------------------------------------------------------------------------------------
Total Operating Expenses 9.6 18.5 14.9 16.5 18.8 19.3 20.5 20.6 19.0 19.0 19.2
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Cash Flow Available for Debt Service ($million) 25.7 41.9 45.7 47.1 46.8 45.9 47.7 49.8 45.3 44.5 46.8
------------------------------------------------------------------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 308.5 306.5 301.8 295.4 288.4 281.2 272.1 260.7 251.1 241.1 228.4
Principal and Interest 15.9 29.2 31.7 32.9 33.0 32.5 33.7 35.1 32.4 32.0 33.6
LOC & Administrative Fees 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
------------------------------------------------------------------------------------
Total Debt Service 16.3 29.6 32.0 33.2 33.3 32.8 34.0 35.4 32.7 32.3 33.9
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Annual Debt Service Coverage 1.57x 1.42x 1.43x 1.42x 1.41x 1.40x 1.40x 1.41x 1.39x 1.38x 1.38x
------------------------------------------------------------------------------------
<CAPTION>
PPA Period
----------------------------------------------------------------------------
Year Ending December 31, 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021*
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues 65.6 67.3 67.1 64.8 66.2 65.8 63.0 64.4 64.6 27.5
Merchant Revenues - - - - - - - - - 215.3
----------------------------------------------------------------------------
Total Operating Revenues 65.6 67.3 67.1 64.8 66.2 65.8 63.0 64.4 64.6 242.8
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Interest Earned on Accounts ($million) 0.3 0.3 0.4 0.3 0.3 0.6 0.3 0.3 0.5 0.3
----------------------------------------------------------------------------
Operating Expenses ($million)
Fuel - - - - - - - - - 123.4
Fixed O&M 15.3 15.4 13.2 13.5 14.7 14.5 18.1 18.5 15.8 15.8
Variable O&M 7.3 6.3 3.7 3.8 4.0 4.2 8.7 7.6 4.6 4.7
Administration 0.4 0.4 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.6
Insurance 1.6 1.7 1.7 1.8 1.8 1.9 2.0 2.0 2.1 2.1
Property Taxes 1.4 1.4 1.5 1.5 1.6 1.6 1.7 1.7 1.8 1.8
Local Taxes 0.2 0.2 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.9
----------------------------------------------------------------------------
Total Operating Expenses 26.3 25.5 20.9 21.5 23.0 23.1 31.4 30.7 25.2 149.3
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash Flow Available for Debt Service ($million) 39.6 42.0 46.6 43.6 43.5 43.4 32.0 33.9 39.8 93.7
----------------------------------------------------------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 219.0 207.1 191.2 175.9 159.2 141.1 128.6 113.8 93.7 76.1
Principal and Interest 29.3 30.8 33.7 31.7 31.7 31.6 24.5 25.8 29.5 25.2
LOC & Administrative Fees 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.3 0.3 0.2
----------------------------------------------------------------------------
Total Debt Service 29.6 31.1 34.0 32.0 32.0 31.9 24.8 26.0 29.7 25.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Annual Debt Service Coverage 1.34x 1.35x 1.37x 1.36x 1.36x 1.36x 1.29x 1.30x 1.34x 3.68x
----------------------------------------------------------------------------
<CAPTION>
=============================
Post PPA Period
-----------------------------
Year Ending December 31, 2022 2023 2024 2025
-----------------------------
<S> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues - - - -
Merchant Revenues 378.9 389.7 391.5 416.2
-----------------------------
Total Operating Revenues 378.9 389.7 391.5 416.2
-----------------------------
-----------------------------
Interest Earned on Accounts ($million) 0.3 0.6 0.4 0.2
-----------------------------
Operating Expenses ($million)
Fuel 219.2 228.8 226.8 238.4
Fixed O&M 15.5 17.1 22.2 21.4
Variable O&M 4.9 5.0 10.5 9.1
Administration 0.6 0.6 0.6 0.6
Insurance 2.2 2.3 2.3 2.4
Property Taxes 1.9 1.9 2.0 2.1
Local Taxes 1.6 2.3 3.0 3.8
-----------------------------
Total Operating Expenses 245.9 258.1 267.3 277.8
-----------------------------
-----------------------------
Cash Flow Available for Debt Service ($million) 133.4 132.2 124.5 138.6
-----------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 59.0 40.5 21.3 0.0
Principal and Interest 23.3 23.1 22.1 22.5
LOC & Administrative Fees 0.2 0.2 0.2 0.2
-----------------------------
Total Debt Service 23.6 23.3 22.3 22.7
-----------------------------
-----------------------------
Annual Debt Service Coverage 5.66x 5.67x 5.58x 5.59x
=============================
</TABLE>
* The first five months of 2021 include PPA cash flow and the last seven months
of 2021 include Post PPA cash flow. The resulting blended DSCR is 3.68.
Average Debt Coverage During PPA 1.38x
Minimum Debt Coverage During PPA 1.29x
Average Debt Coverage Post PPA 5.64x
Minimum Debt Coverage Post PPA 5.58x
Average Debt Coverage During 2.20x
Bond Term
B - 68
<PAGE>
Confidential
Exhibit I
AES Ironwood Projected Operating Results
Increased Heat Rate Sensitivity (Case #2)
<TABLE>
<CAPTION>
PPA Period
------------------------------------------------------------------------------------
Year Ending December 31, 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues 32.3 55.4 55.5 58.2 59.9 59.6 62.2 64.0 58.0 56.6 58.6
Merchant Revenues - - - - - - - - - - -
------------------------------------------------------------------------------------
Total Operating Revenues 32.3 55.4 55.5 58.2 59.9 59.6 62.2 64.0 58.0 56.6 58.6
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Interest Earned on Accounts ($million) 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.2 0.3 0.5
------------------------------------------------------------------------------------
Operating Expenses ($million)
Fuel - - - - - - - - - - -
Fixed O&M 5.6 12.3 9.4 10.5 12.2 9.8 11.4 13.2 11.2 10.5 10.4
Variable O&M 1.3 2.1 2.2 2.3 2.4 5.2 4.5 2.7 2.7 2.8 3.0
Administration 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4
Insurance - 0.6 1.1 1.1 1.2 1.2 1.2 1.3 1.3 1.3 1.4
Property Taxes 0.5 0.9 0.9 1.0 1.0 1.0 1.1 1.1 1.1 1.2 1.2
Local Taxes 0.0 0.0 0.1 0.1 0.1 0.1 0.2 0.2 0.3 0.3 0.3
------------------------------------------------------------------------------------
Total Operating Expenses 7.6 16.3 14.0 15.3 17.2 17.7 18.7 18.8 16.9 16.4 16.6
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Cash Flow Available for Debt Service ($million) 24.9 39.3 41.7 43.1 42.9 42.0 43.7 45.4 41.3 40.5 42.5
------------------------------------------------------------------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 308.5 306.5 301.8 295.4 288.4 281.2 272.1 260.7 251.1 241.1 228.4
Principal and Interest 15.9 29.2 31.7 32.9 33.0 32.5 33.7 35.1 32.4 32.0 33.6
LOC & Administrative Fees 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
------------------------------------------------------------------------------------
Total Debt Service 16.3 29.6 32.0 33.2 33.3 32.8 34.0 35.4 32.7 32.3 33.9
------------------------------------------------------------------------------------
Annual Debt Service Coverage 1.53x 1.33x 1.30x 1.30x 1.29x 1.28x 1.28x 1.28x 1.26x 1.26x 1.25x
------------------------------------------------------------------------------------
<CAPTION>
PPA Period
----------------------------------------------------------------------------
Year Ending December 31, 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021*
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues 58.6 60.0 59.4 57.0 57.8 57.2 54.4 55.3 54.9 23.5
Merchant Revenues - - - - - - - - - 215.3
----------------------------------------------------------------------------
Total Operating Revenues 58.6 60.0 59.4 57.0 57.8 57.2 54.4 55.3 54.9 238.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Interest Earned on Accounts ($million) 0.3 0.3 0.4 0.2 0.3 0.5 0.3 0.3 0.4 0.2
----------------------------------------------------------------------------
Operating Expenses ($million)
Fuel - - - - - - - - - 129.6
Fixed O&M 13.3 13.3 11.3 11.6 12.6 12.5 15.7 15.9 13.5 16.3
Variable O&M 6.3 5.5 3.3 3.3 3.5 3.6 7.6 6.6 4.0 4.1
Administration 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5
Insurance 1.4 1.5 1.5 1.6 1.6 1.7 1.7 1.8 1.8 1.9
Property Taxes 1.2 1.3 1.3 1.3 1.4 1.4 1.5 1.5 1.5 1.6
Local Taxes 0.2 0.2 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.9
----------------------------------------------------------------------------
Total Operating Expenses 22.9 22.1 18.0 18.6 19.9 20.0 27.3 26.6 21.7 154.8
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash Flow Available for Debt Service ($million) 36.1 38.2 41.8 38.6 38.3 37.7 27.4 29.0 33.6 84.1
----------------------------------------------------------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 219.0 207.1 191.2 175.9 159.2 141.1 128.6 113.8 93.7 76.1
Principal and Interest 29.3 30.8 33.7 31.7 31.7 31.6 24.5 25.8 29.5 25.2
LOC & Administrative Fees 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.3 0.3 0.2
----------------------------------------------------------------------------
Total Debt Service 29.6 31.1 34.0 32.0 32.0 31.9 24.8 26.0 29.7 25.5
----------------------------------------------------------------------------
Annual Debt Service Coverage 1.22x 1.23x 1.23x 1.21x 1.20x 1.18x 1.11x 1.11x 1.13x 3.30x
----------------------------------------------------------------------------
<CAPTION>
=============================
Post PPA Period
-----------------------------
Year Ending December 31, 2022 2023 2024 2025
-----------------------------
<S> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues - - - -
Merchant Revenues 378.9 389.7 391.5 416.2
-----------------------------
Total Operating Revenues 378.9 389.7 391.5 416.2
-----------------------------
-----------------------------
Interest Earned on Accounts ($million) 0.3 0.6 0.3 0.2
-----------------------------
Operating Expenses ($million)
Fuel 230.2 240.2 238.1 250.3
Fixed O&M 15.3 14.9 19.3 18.7
Variable O&M 4.2 4.4 9.1 7.9
Administration 0.5 0.5 0.5 0.6
Insurance 1.9 2.0 2.0 2.1
Property Taxes 1.6 1.7 1.7 1.8
Local Taxes 1.6 2.3 3.0 3.8
-----------------------------
Total Operating Expenses 255.3 266.0 273.8 285.1
-----------------------------
-----------------------------
Cash Flow Available for Debt Service ($million) 123.8 124.2 118.1 131.3
-----------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 59.0 40.5 21.3 0.0
Principal and Interest 23.3 23.1 22.1 22.5
LOC & Administrative Fees 0.2 0.2 0.2 0.2
-----------------------------
Total Debt Service 23.6 23.3 22.3 22.7
-----------------------------
Annual Debt Service Coverage 5.26x 5.32x 5.29x 5.29x
=============================
</TABLE>
* The first five months of 2021 include PPA cash flow and the last seven months
of 2021 include Post PPA cash flow. The resulting blended DSCR is 3.30.
Average Debt Coverage During PPA 1.24x
Minimum Debt Coverage During PPA 1.11x
Average Debt Coverage Post PPA 5.29x
Minimum Debt Coverage Post PPA 5.26x
Average Debt Coverage During 2.02x
Bond Term
B - 69
<PAGE>
Confidential
Exhibit I
AES Ironwood Projected Operating Results
Decreased Availability Sensitivity (Case #3)
<TABLE>
<CAPTION>
PPA Period
------------------------------------------------------------------------------------
Year Ending December 31, 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues 35.1 59.9 59.9 62.8 64.6 64.2 67.3 69.3 63.2 62.3 64.7
Merchant Revenues - - - - - - - - - - -
------------------------------------------------------------------------------------
Total Operating Revenues 35.1 59.9 59.9 62.8 64.6 64.2 67.3 69.3 63.2 62.3 64.7
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Interest Earned on Accounts ($million) 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.2 0.3 0.5
------------------------------------------------------------------------------------
Operating Expenses ($million)
Fuel - - - - - - - - - - -
Fixed O&M 7.0 13.1 9.4 10.7 12.3 9.8 11.6 13.4 11.2 10.6 10.6
Variable O&M 1.3 2.1 2.2 2.3 2.4 5.2 4.5 2.7 2.7 2.8 3.0
Administration 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4
Insurance - 0.6 1.1 1.1 1.2 1.2 1.2 1.3 1.3 1.3 1.4
Property Taxes 0.5 0.9 0.9 1.0 1.0 1.0 1.1 1.1 1.1 1.2 1.2
Local Taxes 0.0 0.0 0.1 0.1 0.1 0.1 0.2 0.2 0.3 0.3 0.3
------------------------------------------------------------------------------------
Total Operating Expenses 8.9 17.1 13.9 15.5 17.3 17.7 18.9 19.0 16.9 16.6 16.8
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Cash Flow Available for Debt Service ($million) 26.3 43.0 46.1 47.5 47.5 46.7 48.6 50.6 46.6 46.0 48.3
------------------------------------------------------------------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 308.5 306.5 301.8 295.4 288.4 281.2 272.1 260.7 251.1 241.1 228.4
Principal and Interest 15.9 29.2 31.7 32.9 33.0 32.5 33.7 35.1 32.4 32.0 33.6
LOC & Administrative Fees 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
------------------------------------------------------------------------------------
Total Debt Service 16.3 29.6 32.0 33.2 33.3 32.8 34.0 35.4 32.7 32.3 33.9
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Annual Debt Service Coverage 1.61x 1.45x 1.44x 1.43x 1.43x 1.43x 1.43x 1.43x 1.42x 1.43x 1.42x
------------------------------------------------------------------------------------
<CAPTION>
PPA Period
----------------------------------------------------------------------------
Year Ending December 31, 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021*
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues 64.6 66.4 66.2 63.8 65.2 64.8 61.8 63.3 63.4 26.4
Merchant Revenues - - - - - - - - - 213.7
----------------------------------------------------------------------------
Total Operating Revenues 64.6 66.4 66.2 63.8 65.2 64.8 61.8 63.3 63.4 240.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Interest Earned on Accounts ($million) 0.3 0.3 0.4 0.2 0.3 0.5 0.3 0.3 0.4 0.2
----------------------------------------------------------------------------
Operating Expenses ($million)
Fuel - - - - - - - - - 122.4
Fixed O&M 13.2 13.5 11.5 11.6 12.9 12.5 15.6 16.2 13.7 13.6
Variable O&M 6.3 5.5 3.3 3.3 3.5 3.6 7.6 6.6 4.0 4.1
Administration 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5
Insurance 1.4 1.5 1.5 1.6 1.6 1.7 1.7 1.8 1.8 1.9
Property Taxes 1.2 1.3 1.3 1.3 1.4 1.4 1.5 1.5 1.5 1.6
Local Taxes 0.2 0.2 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.9
----------------------------------------------------------------------------
Total Operating Expenses 22.8 22.3 18.2 18.6 20.2 20.1 27.2 26.9 22.0 144.9
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash Flow Available for Debt Service ($million) 42.1 44.3 48.4 45.4 45.4 45.2 34.9 36.7 41.9 95.4
----------------------------------------------------------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 219.0 207.1 191.2 175.9 159.2 141.1 128.6 113.8 93.7 76.1
Principal and Interest 29.3 30.8 33.7 31.7 31.7 31.6 24.5 25.8 29.5 25.2
LOC & Administrative Fees 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.3 0.3 0.2
----------------------------------------------------------------------------
Total Debt Service 29.6 31.1 34.0 32.0 32.0 31.9 24.8 26.0 29.7 25.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Annual Debt Service Coverage 1.42x 1.42x 1.42x 1.42x 1.42x 1.42x 1.41x 1.41x 1.41x 3.74x
----------------------------------------------------------------------------
<CAPTION>
=============================
Post PPA Period
-----------------------------
Year Ending December 31, 2022 2023 2024 2025
-----------------------------
<S> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues (0.1) - - -
Merchant Revenues 373.5 381.8 387.8 411.3
-----------------------------
Total Operating Revenues 373.4 381.8 387.8 411.3
-----------------------------
-----------------------------
Interest Earned on Accounts ($million) 0.3 0.6 0.3 0.2
-----------------------------
Operating Expenses ($million)
Fuel 215.8 223.4 224.2 235.1
Fixed O&M 13.7 14.9 19.3 18.7
Variable O&M 4.2 4.3 9.0 7.8
Administration 0.5 0.5 0.5 0.6
Insurance 1.9 2.0 2.0 2.1
Property Taxes 1.6 1.7 1.7 1.8
Local Taxes 1.6 2.3 3.0 3.8
-----------------------------
Total Operating Expenses 239.4 249.0 259.8 269.8
-----------------------------
-----------------------------
Cash Flow Available for Debt Service ($million) 134.3 133.3 128.3 141.7
-----------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 59.0 40.5 21.3 0.0
Principal and Interest 23.3 23.1 22.1 22.5
LOC & Administrative Fees 0.2 0.2 0.2 0.2
-----------------------------
Total Debt Service 23.6 23.3 22.3 22.7
-----------------------------
-----------------------------
Annual Debt Service Coverage 5.70x 5.71x 5.75x 5.71x
=============================
</TABLE>
* The first five months of 2021 include PPA cash flow and the last seven months
of 2021 include Post PPA cash flow. The resulting blended DSCR is 3.74.
Average Debt Coverage During PPA 1.43x
Minimum Debt Coverage During PPA 1.41x
Average Debt Coverage Post PPA 5.73x
Minimum Debt Coverage Post PPA 5.70x
Average Debt Coverage During 2.26x
Bond Term
B - 70
<PAGE>
Confidential
Exhibit I
AES Ironwood Projected Operating Results
Hagler Bailly High Gas Price Sensitivity (Case #4)
<TABLE>
<CAPTION>
PPA Period
------------------------------------------------------------------------------------
Year Ending December 31, 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues 34.8 59.4 59.6 62.5 64.3 63.9 67.0 68.8 62.6 61.8 64.3
Merchant Revenues - - - - - - - - - - -
------------------------------------------------------------------------------------
Total Operating Revenues 34.8 59.4 59.6 62.5 64.3 63.9 67.0 68.8 62.6 61.8 64.3
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Interest Earned on Accounts ($million) 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.2 0.3 0.5
------------------------------------------------------------------------------------
Operating Expenses ($million)
Fuel - - - - - - - - - - -
Fixed O&M 7.0 13.1 9.4 10.6 12.2 9.8 11.6 13.3 11.1 10.7 10.6
Variable O&M 1.2 2.0 2.1 2.2 2.3 5.1 4.4 2.5 2.5 2.7 2.8
Administration 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4
Insurance - 0.6 1.1 1.1 1.2 1.2 1.2 1.3 1.3 1.3 1.4
Property Taxes 0.5 0.9 0.9 1.0 1.0 1.0 1.1 1.1 1.1 1.2 1.2
Local Taxes 0.0 0.0 0.1 0.1 0.1 0.1 0.2 0.2 0.3 0.3 0.3
------------------------------------------------------------------------------------
Total Operating Expenses 8.9 17.0 13.8 15.3 17.1 17.5 18.8 18.8 16.6 16.4 16.6
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Cash Flow Available for Debt Service ($million) 26.0 42.6 45.9 47.4 47.4 46.6 48.4 50.4 46.2 45.7 48.1
------------------------------------------------------------------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 308.5 306.5 301.8 295.4 288.4 281.2 272.1 260.7 251.1 241.1 228.4
Principal and Interest 15.9 29.2 31.7 32.9 33.0 32.5 33.7 35.1 32.4 32.0 33.6
LOC & Administrative Fees 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
------------------------------------------------------------------------------------
Total Debt Service 16.3 29.6 32.0 33.2 33.3 32.8 34.0 35.4 32.7 32.3 33.9
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Annual Debt Service Coverage 1.60x 1.44x 1.43x 1.43x 1.43x 1.42x 1.42x 1.42x 1.41x 1.42x 1.42x
------------------------------------------------------------------------------------
<CAPTION>
PPA Period
----------------------------------------------------------------------------
Year Ending December 31, 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021*
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues 64.2 66.2 66.0 63.6 65.3 65.1 61.9 63.4 63.7 26.7
Merchant Revenues - - - - - - - - - 225.7
----------------------------------------------------------------------------
Total Operating Revenues 64.2 66.2 66.0 63.6 65.3 65.1 61.9 63.4 63.7 252.3
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Interest Earned on Accounts ($million) 0.3 0.3 0.4 0.2 0.3 0.5 0.3 0.3 0.4 0.2
----------------------------------------------------------------------------
Operating Expenses ($million)
Fuel - - - - - - - - - 141.6
Fixed O&M 13.2 13.5 11.4 11.6 12.9 12.6 15.6 16.2 13.8 13.5
Variable O&M 6.2 5.3 3.1 3.2 3.4 3.5 7.5 6.5 3.9 4.0
Administration 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5
Insurance 1.4 1.5 1.5 1.6 1.6 1.7 1.7 1.8 1.8 1.9
Property Taxes 1.2 1.3 1.3 1.3 1.4 1.4 1.5 1.5 1.5 1.6
Local Taxes 0.2 0.2 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.9
----------------------------------------------------------------------------
Total Operating Expenses 22.6 22.3 18.1 18.4 20.1 20.0 27.1 26.8 22.0 163.9
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash Flow Available for Debt Service ($million) 41.9 44.2 48.4 45.4 45.5 45.6 35.2 36.8 42.2 88.6
----------------------------------------------------------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 219.0 207.1 191.2 175.9 159.2 141.1 128.6 113.8 93.7 76.1
Principal and Interest 29.3 30.8 33.7 31.7 31.7 31.6 24.5 25.8 29.5 25.2
LOC & Administrative Fees 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.3 0.3 0.2
----------------------------------------------------------------------------
Total Debt Service 29.6 31.1 34.0 32.0 32.0 31.9 24.8 26.0 29.7 25.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Annual Debt Service Coverage 1.42x 1.42x 1.42x 1.42x 1.42x 1.43x 1.42x 1.41x 1.42x 3.48x
----------------------------------------------------------------------------
<CAPTION>
=============================
Post PPA Period
-----------------------------
Year Ending December 31, 2022 2023 2024 2025
-----------------------------
<S> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues - - - -
Merchant Revenues 398.8 407.0 405.7 432.2
-----------------------------
Total Operating Revenues 398.8 407.0 405.7 432.2
-----------------------------
-----------------------------
Interest Earned on Accounts ($million) 0.3 0.6 0.3 0.2
-----------------------------
Operating Expenses ($million)
Fuel 251.5 261.6 259.5 273.5
Fixed O&M 13.7 14.9 19.3 18.7
Variable O&M 4.2 4.3 9.0 7.9
Administration 0.5 0.5 0.5 0.6
Insurance 1.9 2.0 2.0 2.1
Property Taxes 1.6 1.7 1.7 1.8
Local Taxes 1.6 2.3 3.0 3.8
-----------------------------
Total Operating Expenses 275.0 287.3 295.1 308.2
-----------------------------
-----------------------------
Cash Flow Available for Debt Service ($million) 124.2 120.3 110.9 124.2
-----------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 59.0 40.5 21.3 0.0
Principal and Interest 23.3 23.1 22.1 22.5
LOC & Administrative Fees 0.2 0.2 0.2 0.2
-----------------------------
Total Debt Service 23.6 23.3 22.3 22.7
-----------------------------
-----------------------------
Annual Debt Service Coverage 5.27x 5.15x 4.98x 5.00x
=============================
</TABLE>
* The first five months of 2021 include PPA cash flow and the last seven months
of 2021 include Post PPA cash flow. The resulting blended DSCR is 3.48.
Average Debt Coverage During PPA 1.43x
Minimum Debt Coverage During PPA 1.41x
Average Debt Coverage Post PPA 5.13x
Minimum Debt Coverage Post PPA 4.98x
Average Debt Coverage During 2.14x
Bond Term
B - 71
<PAGE>
Confidential
Exhibit I
AES Ironwood Projected Operating Results
Hagler Bailly Low Demand Growth Sensitivity (Case #5)
<TABLE>
<CAPTION>
PPA Period
------------------------------------------------------------------------------------
Year Ending December 31, 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues 35.1 60.2 60.4 63.4 65.4 65.0 68.0 70.1 64.1 63.1 65.5
Merchant Revenues - - - - - - - - - - -
------------------------------------------------------------------------------------
Total Operating Revenues 35.1 60.2 60.4 63.4 65.4 65.0 68.0 70.1 64.1 63.1 65.5
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Interest Earned on Accounts ($million) 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.2 0.3 0.5
------------------------------------------------------------------------------------
Operating Expenses ($million)
Fuel - - - - - - - - - - -
Fixed O&M 7.0 13.2 9.5 10.6 12.3 9.8 11.5 13.4 11.2 10.6 10.6
Variable O&M 1.3 2.1 2.2 2.3 2.4 5.2 4.5 2.7 2.7 2.8 3.0
Administration 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4
Insurance - 0.6 1.1 1.1 1.2 1.2 1.2 1.3 1.3 1.3 1.4
Property Taxes 0.5 0.9 0.9 1.0 1.0 1.0 1.1 1.1 1.1 1.2 1.2
Local Taxes 0.0 0.0 0.1 0.1 0.1 0.1 0.2 0.2 0.3 0.3 0.3
------------------------------------------------------------------------------------
Total Operating Expenses 8.9 17.2 14.1 15.4 17.3 17.7 18.9 19.0 16.9 16.6 16.8
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Cash Flow Available for Debt Service ($million) 26.3 43.2 46.6 48.2 48.3 47.5 49.4 51.4 47.4 46.8 49.2
------------------------------------------------------------------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 308.5 306.5 301.8 295.4 288.4 281.2 272.1 260.7 251.1 241.1 228.4
Principal and Interest 15.9 29.2 31.7 32.9 33.0 32.5 33.7 35.1 32.4 32.0 33.6
LOC & Administrative Fees 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
------------------------------------------------------------------------------------
Total Debt Service 16.3 29.6 32.0 33.2 33.3 32.8 34.0 35.4 32.7 32.3 33.9
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Annual Debt Service Coverage 1.61x 1.46x 1.45x 1.45x 1.45x 1.45x 1.45x 1.45x 1.45x 1.45x 1.45x
------------------------------------------------------------------------------------
<CAPTION>
PPA Period
----------------------------------------------------------------------------
Year Ending December 31, 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021*
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues 65.6 67.3 67.1 64.8 66.2 65.8 62.8 64.2 64.3 27.3
Merchant Revenues - - - - - - - - - 203.5
----------------------------------------------------------------------------
Total Operating Revenues 65.6 67.3 67.1 64.8 66.2 65.8 62.8 64.2 64.3 230.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Interest Earned on Accounts ($million) 0.3 0.3 0.4 0.2 0.3 0.5 0.3 0.3 0.4 0.2
----------------------------------------------------------------------------
Operating Expenses ($million)
Fuel - - - - - - - - - 122.8
Fixed O&M 13.3 13.5 11.5 11.7 12.8 12.6 15.6 16.1 13.7 13.6
Variable O&M 6.3 5.5 3.3 3.3 3.5 3.6 7.6 6.6 4.0 4.1
Administration 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5
Insurance 1.4 1.5 1.5 1.6 1.6 1.7 1.7 1.8 1.8 1.9
Property Taxes 1.2 1.3 1.3 1.3 1.4 1.4 1.5 1.5 1.5 1.6
Local Taxes 0.2 0.2 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.9
----------------------------------------------------------------------------
Total Operating Expenses 22.9 22.3 18.2 18.7 20.1 20.1 27.2 26.8 22.0 145.3
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash Flow Available for Debt Service ($million) 43.0 45.3 49.3 46.4 46.4 46.2 35.9 37.6 42.8 85.7
----------------------------------------------------------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 219.0 207.1 191.2 175.9 159.2 141.1 128.6 113.8 93.7 76.1
Principal and Interest 29.3 30.8 33.7 31.7 31.7 31.6 24.5 25.8 29.5 25.2
LOC & Administrative Fees 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.3 0.3 0.2
----------------------------------------------------------------------------
Total Debt Service 29.6 31.1 34.0 32.0 32.0 31.9 24.8 26.0 29.7 25.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Annual Debt Service Coverage 1.45x 1.45x 1.45x 1.45x 1.45x 1.45x 1.45x 1.44x 1.44x 3.36x
----------------------------------------------------------------------------
<CAPTION>
=============================
Post PPA Period
-----------------------------
Year Ending December 31, 2022 2023 2024 2025
-----------------------------
<S> <C> <C> <C> <C>
Net Operating Revenues ($million)
PPA Revenues - - - -
Merchant Revenues 359.0 370.1 367.6 385.8
-----------------------------
Total Operating Revenues 359.0 370.1 367.6 385.8
-----------------------------
-----------------------------
Interest Earned on Accounts ($million) 0.3 0.6 0.3 0.2
-----------------------------
Operating Expenses ($million)
Fuel 217.6 226.3 224.1 234.7
Fixed O&M 13.5 14.9 19.3 18.7
Variable O&M 4.2 4.3 9.0 7.8
Administration 0.5 0.5 0.5 0.6
Insurance 1.9 2.0 2.0 2.1
Property Taxes 1.6 1.7 1.7 1.8
Local Taxes 1.6 2.3 3.0 3.8
-----------------------------
Total Operating Expenses 240.9 252.0 259.7 269.4
-----------------------------
-----------------------------
Cash Flow Available for Debt Service ($million) 118.4 118.6 108.3 116.6
-----------------------------
Annual Debt Service ($million)
Facility Bonds
B-O-Y Balance Outstanding 59.0 40.5 21.3 0.0
Principal and Interest 23.3 23.1 22.1 22.5
LOC & Administrative Fees 0.2 0.2 0.2 0.2
-----------------------------
Total Debt Service 23.6 23.3 22.3 22.7
-----------------------------
-----------------------------
Annual Debt Service Coverage 5.03x 5.08x 4.86x 4.70x
=============================
</TABLE>
* The first five months of 2021 include PPA cash flow and the last seven months
of 2021 include Post PPA cash flow. The resulting blended DSCR is 3.36.
Average Debt Coverage During PPA 1.46x
Minimum Debt Coverage During PPA 1.44x
Average Debt Coverage Post PPA 4.93x
Minimum Debt Coverage Post PPA 4.70x
Average Debt Coverage During 2.13x
Bond Term
B - 72
<PAGE>
[GRAPHIC OMITTED]
Stone & Webster AES Ironwood Project
Management Consultants, Inc. Independent Technical Review
- --------------------------------------------------------------------------------
Exhibit II
Document Log
B - 73
<PAGE>
[GRAPHIC OMITTED]
Stone & Webster AES Ironwood Project
Management Consultants, Inc. Independent Technical Review
- --------------------------------------------------------------------------------
Exhibit II
Document Log
- --------------------------------------------------------------------------------
No. Reference
- --------------------------------------------------------------------------------
1. Draft property lease between Consolidated Rail Corporation and AES
Ironwood
- --------------------------------------------------------------------------------
2. Draft Sidetrack Agreement between Consolidated Rail Corporation and AES
Ironwood
- --------------------------------------------------------------------------------
3. Draft Rail Corporation License Agreement for Undergrade Watermain
Occupation
- --------------------------------------------------------------------------------
4. Agreement relating to real estate dated October 22, 1998
- --------------------------------------------------------------------------------
5. EWG Application
- --------------------------------------------------------------------------------
6. Effluent Supply Agreement
- --------------------------------------------------------------------------------
7. Amended and Restated Operating Agreement of PJM Interconnection, LLC
dated June 2, 1997
- --------------------------------------------------------------------------------
8. Maintenance Program Parts, Shop Repairs and Scheduled Outage TFA
Services Contract last revised November 19, 1998
- --------------------------------------------------------------------------------
9. Draft Generation Facility Transmission Interconnection Agreement
between Metropolitan Edison Company d/b/a AES Ironwood LLC
- --------------------------------------------------------------------------------
10. Amended and Restated Power Purchase Agreement by and between AES
Ironwood LLC and Williams Energy Marketing & Trading Company
- --------------------------------------------------------------------------------
11. Agreement for Engineering, Procurement and Construction Services
between AES Ironwood, Inc. ("Owner") and Siemens Westinghouse Power
Corporation dated September 23, 1998
- --------------------------------------------------------------------------------
12. Report on MHI 501G for KEPCO Ilijan Power Project
- --------------------------------------------------------------------------------
13. Draft report on MHI 501G Combustion Turbine Generator dated December
14, 1998
- --------------------------------------------------------------------------------
14. Hagler Bailly Report prepared for Lehman Brothers on the Projected
Competitiveness of the Ironwood Power Project in the PJM Market dated
February 1999 and draft report dated October 1998
- --------------------------------------------------------------------------------
15. Agreement for Engineering, Procurement and Construction Services
- --------------------------------------------------------------------------------
16. EPC Appendix A
- --------------------------------------------------------------------------------
17. Effluent Supply Agreement with City of Lebanon Authority
- --------------------------------------------------------------------------------
18. Maintenance Program Parts, Shop Repairs and Scheduled Outage TFA
Services Contract
- --------------------------------------------------------------------------------
19. SWPC Engineering Flow Schematics Drawings F8210010-F8210480-10/01/98
- --------------------------------------------------------------------------------
20. NPDES Permit # PAR-10-P082
- --------------------------------------------------------------------------------
21. Letter dated November 18, 1998 from K. Friederich Updergrafe to Ian
Miller re POTW Water Supply Pipeline and Pumping Station
- --------------------------------------------------------------------------------
22. Fax to Debra Richert dated April 22, 1999 from Alicia Sinn re the final
plan approval for the Ironwood facility issued by PaDEP on 3/29/99
- --------------------------------------------------------------------------------
23. Copy of letter to Patricia Rollin dated February 3, 1999 concerning the
Delay in Financial Closing
- --------------------------------------------------------------------------------
24. Letter to John Garvey from Jeffrey Jacobsohn dated November 16, 1998 re
the Facility Emission Rates for PSD Application
- --------------------------------------------------------------------------------
25. Memo to John Garvey from Bart Rossi dated November 25, 1998 regarding
the AES Ironwood Emissions Data
- --------------------------------------------------------------------------------
26. Specification For A Heat Recovery Steam Generator for the AES Ironwood
Project received by SWMCI in Boston on February 24, 1999
- --------------------------------------------------------------------------------
27. Williams Fuel Plan for AES Ironwood fax dated February 5, 1999
- --------------------------------------------------------------------------------
28. Fax to John Garvey from Ian Miller dated March 12, 1999 regarding the
Gas Pressure and Compressors
- --------------------------------------------------------------------------------
29. Fax copy of the PJM Regional Fuel Forecast 1998 - 2031 for AES Ironwood
dated January 19, 1999
- --------------------------------------------------------------------------------
B - 74
<PAGE>
[GRAPHIC OMITTED]
Stone & Webster AES Ironwood Project
Management Consultants, Inc. Independent Technical Review
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
30. Draft Evaluation Report of Oil Combustion profile for AES Ironwood
Prepared for AES Corporation by CC Pace Resources dated February 25,
1999
- --------------------------------------------------------------------------------
31. Letter to Bart Rossi from Jeffrey Jacobsohn regarding Stone & Webster's
questions dated March 2, 1999 received by fax
- --------------------------------------------------------------------------------
32. Letter to Bart Rossi from Jeffrey Jacobsohn regarding Combustion
Turbine degradation dated March 1, 1999 received by fax
- --------------------------------------------------------------------------------
33. Fax from Gary Dzikowski to Ian Miller regarding DLN Combustors dated
February 16, 1999
- --------------------------------------------------------------------------------
34. Fax from Jeffrey Jacobsohn to Bart Rossi regarding the Revised Warranty
Data sheet dated February 12, 1999 received by Fax
- --------------------------------------------------------------------------------
35. Letter to Steve Dahm from Jeffrey M. Jacobsohn dated January 29, 1999
regarding Information for Financial Closing received by Fax
- --------------------------------------------------------------------------------
36. Faxed memo dated January 19, 1999 from Siemens Westinghouse concerning
Stone & Webster Issues
- --------------------------------------------------------------------------------
37. Faxed memo dated January 21, 1999 from Gary Dzikowski at Siemens
Westinghouse to Ian Miller concerning Fleet Risk Management Spares
received by Fax
- --------------------------------------------------------------------------------
38. Letter dated December 11, 1998 to John Garvey from Jeffrey M. Jacobsohn
regarding Degradation of the Combustion Turbine
- --------------------------------------------------------------------------------
39. Fax memo to John Garvey from Jeff Jacobsohn dated December 2, 1998
regarding the revised Heat Balance information
- --------------------------------------------------------------------------------
40. Letter dated November 16, 1998 to John Garvey from Jeffrey Jacobsohn
regarding the Facility Emission Rates for PSD Application
- --------------------------------------------------------------------------------
41. Letter dated November 12, 1998 to John Garvey from Jeffrey Jacobsohn
regarding Additional Responses to Various S&W information requests
- --------------------------------------------------------------------------------
42. Letter dated November 4, 1998 to John Garvey from Jeffrey Jacobsohn
regarding Responses to S&W AES Ironwood Additional Information Requests
from S&W dated November 3, 1998
- --------------------------------------------------------------------------------
43. Letter received from Jeffrey M. Jacobsohn in response to a S&W fax
dated October 29, 1998 regarding water balances
- --------------------------------------------------------------------------------
44. Letter to John Garvey dated November 3, 1998 from Jeffrey Jacobsohn
regarding Responses to S&W Request for Additional Information on a
letter and fax dated October 29, 1998
- --------------------------------------------------------------------------------
45. Letter to John Garvey dated November 5, 1998 in response to our letter
for IE Information in our letter dated October 28, 1998
- --------------------------------------------------------------------------------
46. Letter to John Garvey in response to our Letter Dated October 26, 1998
for additional information regarding Technical Questions
- --------------------------------------------------------------------------------
47. Letter to Robert Golden dated December 7, 1998 with a copy to John
Garvey enclosing one set each of the approved Land Development Plan for
Prescott Road
- --------------------------------------------------------------------------------
48. Fax to John Garvey from Eileen Cates transmitting the Outstanding
Issues dated January 29, 1999
- --------------------------------------------------------------------------------
49. Memo from Gary Dzikowski to Ian Miller dated January 14, 1999 providing
responses to questions concerning the HRSG Spec
- --------------------------------------------------------------------------------
50. Memo from Ian Miller to Gary Dzikowski dated December 14, 1998
regarding ZDS and demin water.
- --------------------------------------------------------------------------------
51. Letter from Patricia Rollin to GPU Energy dated January 11, 1999
concerning the AES Ironwood Interconnection
- --------------------------------------------------------------------------------
52. Letter to Patricia Rollin from GPU Energy referring to the letter of
January 11, 1999 concerning the AES Ironwood Interconnection
- --------------------------------------------------------------------------------
53. Letter to Steve Dahm from Jeffrey Jacobsohn regarding the minutes of
January 21, 1999 meeting
- --------------------------------------------------------------------------------
54. Letter dated January 26, 1999 to Ian Miller from GPU regarding the
Preliminary Interconnection facilities Cost
- --------------------------------------------------------------------------------
B - 75
<PAGE>
[GRAPHIC OMITTED]
Stone & Webster AES Ironwood Project
Management Consultants, Inc. Independent Technical Review
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
55. Letter dated March 3, 1999 to John Garvey from Anthony P. Letizia at
TRC regarding the confirmation of Revised Pennsylvania Title 25 Chapter
139
- --------------------------------------------------------------------------------
56. Letter to Ian Miller dated October 7, 1998 from the Lebanon County
Conservation District concerning the General Permit Issuance, NPDES
Permit #: PAR-10-PO82
- --------------------------------------------------------------------------------
57. Fax copy of the Petition for an interpretation and variance dated
February 11, 1998
- --------------------------------------------------------------------------------
58. Letter to Buck Applewhite & John Garvey dated September 30, 1998 from
Eileen Cates dated September 30, 1998 concerning the technical
information that will be used for this report
- --------------------------------------------------------------------------------
59. Copy of a fax listing the required permits and approvals for AES
Ironwood dated November 6, 1998
- -------------------------------------------------------------------------------
60. Letter from Paula B. Ballaron to Patricia L. Rollin from the
Susquehanna River Basin Commission approving the project
- --------------------------------------------------------------------------------
61. Notice of Commission Action Docket NoD-97-45 for the Surface Water
Withdrawal/Importation
- --------------------------------------------------------------------------------
62. Letter received by fax dated April 22, 1999 from the United States
Environmental Protection Agency regarding the review of the draft plan
approval for AES Ironwood
- --------------------------------------------------------------------------------
63. Letter received dated April 7, 1999 between Jeffrey Jacobsohn and
Patrician Rollin regarding AES Ironwood Payment Schedule Revision I
Letter Agreement
- --------------------------------------------------------------------------------
64. Letter received dated March 31, 1999 between Jeffrey Jacobsohn and
Patricia Rollin regarding AES Ironwood Financial Closing Later than
March 31, 1999 Continued Performance Letter Agreement
- --------------------------------------------------------------------------------
65. Letter dated March 24, 1999 to Bart Rossi from Jeffrey M. Jacobsohn re
CO Catalyst Emissions Warrantly
- --------------------------------------------------------------------------------
66. Letter dated April 22, 1999 to Patricia Rollin from Jeffrey M.
Jacobsohn re Gas Specifications Clarification Letter
- --------------------------------------------------------------------------------
67. Letter dated May 12, 1999 to Patricia Rollin from Jeffrey Jacobsohn re
Delay in Commencement Date after June 1, 1999
- --------------------------------------------------------------------------------
68. Letter dated May 19, 1999 to Patricia Rollin from Philip Scalzo re
Williams executed certain agreements with Texas Eastern Transmission
Corporation
- --------------------------------------------------------------------------------
69. Memo from Jeffrey Jacobsohn of SWPC to Patty Rollin of AES concerning
the estimated performance impact of the gas compressor deletion
- --------------------------------------------------------------------------------
B - 76
<PAGE>
------------------------------------------------------------
ANNEX C
INDEPENDENT POWER
CONSULTANT'S REPORT
------------------------------------------------------------
<PAGE>
PROJECTED COMPETITIVENESS
OF THE IRONWOOD POWER PLANT
IN THE PJM MARKET
Privileged and Confidential
Prepared for:
Lehman Brothers
3 World Financial Center
New York, NY 10285-1600
Prepared by:
Hagler Bailly Consulting, Inc.
1776 Eye Street, NW
Suite 500
Washington, DC 20006
(202) 223-6665
Contact:
Alan L. Madian
June 1, 1999
C-1
- ---------------------------------Hagler Bailly---------------------------------
Privileged and Confidential
<PAGE>
- --------------------------------------------------------------------------------
CONTENTS
<TABLE>
<S> <C>
Foreword ................................................................................................6
Executive Summary
S.1 The Project.....................................................................................7
S.2 PJM Market Structure............................................................................7
S.2.1 Procedure..............................................................................8
S.3 Key Base Case Assumptions and Sensitivity Cases.................................................9
S.4 Forecasted Results.............................................................................11
S.5 Conclusions....................................................................................17
Chapter 1 Introduction
1.1 Background.....................................................................................18
1.2 Organization of the Report.....................................................................18
Chapter 2 Ironwood Project
2.1 The Ironwood Project...........................................................................20
Chapter 3 Proposed Market Structure In PJM
3.1 Background.....................................................................................22
3.2 The PJM Market.................................................................................23
3.2.1 The Spot Energy Market................................................................23
3.2.2 Installed Capacity Market.............................................................25
Chapter 4 Approach To Market Price Forecasting
4.1 Introduction...................................................................................27
4.2 Issues in Predicting Market Prices.............................................................27
4.2.1 Issues in the Capacity Markets........................................................27
4.2.2 Ancillary Services....................................................................29
4.3 Approach to Market Price Forecasting...........................................................30
4.3.1 Market Characteristics................................................................31
4.3.2 Predicting Energy Prices and Dispatch.................................................31
4.3.3 Predicting Capacity Prices: The Capacity Market Simulation Model......................32
4.3.4 Market Entry and Exit.................................................................33
</TABLE>
C-2
- ---------------------------------Hagler Bailly---------------------------------
Privileged and Confidential
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Chapter 5 Market Price Forecasting: Assumptions and Assumption Development
5.1 Introduction...................................................................................35
5.2 Production Cost Model Input Assumptions........................................................35
5.2.1 Existing Generation Units.............................................................37
5.2.2 Load Growth...........................................................................40
5.2.3 Fuel Prices...........................................................................42
5.2.4 Energy Import/Export Forecast.........................................................44
5.2.5 Transmission Constraints..............................................................45
5.3 Capacity Market Simulation: Model Input Assumptions...........................................46
5.3.1 Existing Units Going-Forward Costs....................................................46
5.3.2 New Generating Capacity...............................................................47
Chapter 6 Market Price Forecasts
6.1 Introduction...................................................................................49
6.2 PJM Capacity and Energy Price Forecasts........................................................49
6.2.1 Base Case.............................................................................49
6.3 Implications for AES Ironwood..................................................................56
Chapter 7 Conclusions....................................................................................62
</TABLE>
C-3
- ---------------------------------Hagler Bailly---------------------------------
Privileged and Confidential
<PAGE>
- --------------------------------------------------------------------------------
TABLES
<TABLE>
<S> <C>
Executive Summary
S.1 Delivered Fuel Prices (1996 $/MMBtu)...........................................................10
S.2 PJM All-In Average (Energy + Capacity) Prices (1996 $).........................................12
Chapter 5 Market Price Forecasting: Assumptions and Assumption Development
5.1 Variable Operating Costs (1996 $ per MWh)......................................................38
5.2 Nuclear Unit Retirement Dates..................................................................40
5.3 Delivered Fuel Prices (1996 $/MMBtu)...........................................................42
5.4 Imports and Exports (1996 $ per MWh)...........................................................45
5.5 Emergency Imports..............................................................................45
5.6 New Generating Unit Characteristics (1996 $)...................................................48
Chapter 6 Market Price Forecasts
6.1 PJM Capacity Additions and Retirements.........................................................51
6.2 PJM Unweighted Average Energy Prices (1996 $/MWh)..............................................53
6.3 PJM Capacity Prices (1996 $/kW-yr).............................................................54
6.4 PJM All-In Average (Energy + Capacity) Prices (1996 $).........................................55
</TABLE>
C-4
- ---------------------------------Hagler Bailly---------------------------------
Privileged and Confidential
<PAGE>
- --------------------------------------------------------------------------------
FIGURES
<TABLE>
<S> <C>
Executive Summary
S.1 PJM Unweighted Average Energy Prices 1996 $....................................................13
S.2 AES Ironwood Capacity Factors..................................................................14
S.3 PJM Supply Curves (1996 $/MWh).................................................................15
Chapter 4 Approach to Market Price Forecasting
4.1 Approach to Developing Capacity and Energy Prices..............................................30
4.2 Example Supply and Demand Curve................................................................33
Chapter 5 Market Price Forecasting: Assumptions and Assumption Development
5.1 Forecast of Allowance Prices (1996 $ per Ton)..................................................39
5.2 Cumulative Demand Growth in PJM................................................................41
5.3 Delivered Natural Gas Prices 1996 $............................................................43
5.4 PJM Generation Weighted Average Delivered Coal Prices 1996 $...................................44
Chapter 6 Market Price Forecasts
6.1 PJM Unweighted Average Energy Prices 1996 $....................................................52
6.2 AES Ironwood Capacity Factors..................................................................56
6.3 Ironwood's Energy Revenue vs. PJM's Time-Weighted Average
Energy Price 1996 $ ...........................................................................58
6.4 PJM Supply Curves (1996 $/MWh)..............................................................59-61
</TABLE>
C-5
- ---------------------------------Hagler Bailly---------------------------------
Privileged and Confidential
<PAGE>
- --------------------------------------------------------------------------------
FOREWORD
This report presents Hagler Bailly's analysis of the market for power in the
Pennsylvania, New Jersey, Maryland (PJM) power pool.
i. Some information in the report is necessarily based on predications and
estimates of future events and behaviors.
ii. Such predictions or estimates may differ from that which other experts
specializing in the electricity industry might present.
iii. The provision of a report by Hagler Bailly does not obviate the need
for potential investors to make further appropriate inquiries as to the
accuracy of the information included therein, or to undertake an
analysis of its own.
iv. This report is not intended to be a complete and exhaustive analysis of
the subject issues and therefore will not consider some factors that
are important to a potential investor's decision-making.
v. Hagler Bailly and its employees cannot accept liability for loss
suffered in consequence of reliance on the report. Nothing in our
report should be taken as a promise or guarantee as to the occurrence
of any future events.
FOREWORD o C-6
- ---------------------------------Hagler Bailly---------------------------------
Privileged and Confidential
<PAGE>
- --------------------------------------------------------------------------------
EXECUTIVE SUMMARY
Hagler Bailly Consulting, Inc. (Hagler Bailly) was retained by AES Ironwood,
Inc., on behalf of, and to prepare this report solely for, Lehman Brothers, as
Initial Purchaser of certain Rule 144A bonds to be offered by AES Ironwood, LLC
to finance the construction, initial start-up and testing of the Ironwood
facility. We have been retained to independently forecast future market prices
for electric capacity and energy in the Pennsylvania, New Jersey, Maryland (PJM)
power pool and to assess the competitive position of the AES Ironwood Facility
in PJM during the term of the bonds. This document presents the results of our
analysis.
S.1 THE PROJECT
AES Ironwood, LLC ("AES Ironwood"), a wholly owned subsidiary of the AES
Corporation ("AES"), proposes to build and operate a 705 MW (net) gas
combined-cycle power station ("the Project"). The AES Ironwood power station
will employ Siemens Westinghouse 5O1G technology and will be fueled primarily by
natural gas. The facility will sell its entire output to the Williams Energy
Marketing and Trading Company under a fixed price 20 year power purchase
agreement ("PPA") and will operate as a merchant plant (or under bilateral
contracts) from the expiration of the PPA. The facility will be located in South
Lebanon Township, Pennsylvania in the Central region of the Pennsylvania, New
Jersey, Maryland (PJM) power pool.
S.2 PJM MARKET STRUCTURE
The PJM market may be characterized on the supply side as competitive except for
the limited hours when transmission is constrained. New capacity is expected to
be composed predominantly of gas-fueled combined cycle units, though simple
cycle combustion turbines ("peakers") will be added, especially in areas with
substantial base load capacity.
We have modeled the future PJM market with both an energy market and a capacity
market. This is not to say that a separate capacity market will necessarily
continue well into the future. However, in the absence of a separate installed
capacity market, an at least equivalent revenue increase would be required in
the energy or ancillary services market to maintain reserve margins at levels
prospectively thought to be essential by system operators and regulators.
FOREWORD o C-7
- ---------------------------------Hagler Bailly---------------------------------
Privileged and Confidential
<PAGE>
We have assumed that energy market participants will base dispatch and payment
in the PJM market upon competitive energy bidding and that the bidding will
shortly cease to be cost-based for investor owned utilities (IOUs), as is
currently required by regulation.
The PJM Independent System Operator (ISO), which became operational at the
beginning of 1998, has set reserve generation capacity requirements on all
load-serving entities (LSEs). These reserve requirements require that
load-serving entities that are short of capacity acquire it from others. The PJM
ISO has established a capacity market to facilitate capacity provision but
bilateral arrangements are also accommodated.
Transmission constraints within PJM play a modest role in the operation of the
PJM market. There are three defined regions within PJM, West, Central, and East
(see Maps 5-1 and 5-2). Each of the historic utilities functions as a control
area. Nodal pricing (i.e., pricing that reflects location-specific factors, such
as transmission constraints) has been implemented recently. The direction of
power flow within PJM is generally from the west, which has a preponderance of
the pool's lower-cost coal units, to the east. Transmission capacity is not
expected to expand significantly within PJM, but no additional important
constraints are forecast.
S.2.1 Procedure
In our analysis, we have used the RealTime(TM) model to simulate future market
conditions and operation. RealTime(TM), a chronological production cost model,
was used to estimate energy prices and revenues through the year 2025. In each
hour the model schedules the units in a least-cost manner based upon fuel cost,
start-up cost, emission cost, and variable O&M cost. The hourly marginal cost is
determined by the cost of the least-expensive unit available to follow
increasing load, which becomes the market price for that hour. Given that
production cost modeling is inherently cost-based, conservative adjustments were
made to the model to account for expected upward pressure on price resulting
from the evolving bid-based system and market power phenomena./1
PowerWorld(TM), a load flow model, was used to determine if Ironwood would
impose additional burdens on the PJM transmission system and if the plant's
location would lead to its being dispatched less than anticipated due to
transmission constraints. The model was also used to assess whether Ironwood
could expect to receive higher revenues due to contributions to voltage support
or for transmission constraint-reducing flows.
To address capacity revenue requirements, Hagler Bailly utilized a model that
calculates the additional revenue, above that earned from energy sales, needed
to meet the revenue requirement
- ----------
1 Market power occurs when strategic behavior is possible. This can
occur, for example, when a single plant bids just under the price of
the next highest cost plant in the stack, or when operators of multiple
plants withdraw one or more in order to increase the total revenue they
will receive from those that remain on. Market power can be the result
of collusion, but collusion is not necessary for market power to be
present.
FOREWORD o C-8
- ---------------------------------Hagler Bailly---------------------------------
Privileged and Confidential
<PAGE>
of the marginal plant entering the market. Plants at the end of their useful
lives, and those that do not recover their going-forward costs are retired.
Based on that model, we have estimated capacity payments necessary to maintain
an installed capacity margin of approximately 18 percent including the PJM
authorized curtailable load margin. The revenue requirement of a new plant
equals the net revenue needed to cover operating costs, taxes, interest and
payment of a target return on equity.
The results from these models provide the basis for the evaluation of the
competitiveness of the Ironwood plant during and after the PPA period, including
the determination of the PJM market revenues to AES Ironwood under merchant
operation.
S.3 KEY BASE CASE ASSUMPTIONS AND SENSITIVITY CASES
The key assumptions that drive the results in this analysis include demand
growth, fuel prices, capacity additions and reserve margin requirements, and the
retirement of nuclear stations. Assumptions were developed for a Base Case and
two downside sensitivities, a Low Demand Growth Case and a High Gas Price Case.
The Base Case represents the most probable market scenario and consequently what
Hagler Bailly believes to be the most likely performance forecast and
competitive position for Ironwood. The sensitivity cases are intended to test
the Project under significantly more adverse circumstances.
Demand
Our load forecast is based upon the actual 1995 PJM hourly load profile. Hagler
Bailly has forecast that PJM peak demand (load) will grow at 1.00% annually
through 2009 and at 0.75% thereafter. Annual energy growth has been forecast at
1.50% through 2002, at 2.00% from 2003 to 2009, and at 1.50% thereafter.
Fuel prices
CC Pace Consulting, LLC ("CC Pace") provided our fossil fuel price forecasts.
Coal price projections were assessed on a plant by plant basis, while gas and
oil were based upon regional zones. Table S-1 summarizes the fuel price
forecasts used in the Base Case.
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Table S-1
Delivered Fuel Prices (1996$/MMBtu)/1
<TABLE>
<CAPTION>
Average
Annual %
Fuel 1998 2005 2010 2020 2025 Change/4
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Natural Gas - PJM East/2 $2.57 $2.48 $2.52 $2.63 $2.69 0.17%
- -------------------------------------------------------------------------------------------
Natural Gas - PJM West $2.47 $2.38 $2.43 $2.53 $2.60 0.18%
- -------------------------------------------------------------------------------------------
Residual #6 $2.10 $2.41 $2.41 $2.41 $2.41 0.51%
- -------------------------------------------------------------------------------------------
Distillate #2 $3.20 $3.69 $3.69 $3.69 $3.69 0.53%
- -------------------------------------------------------------------------------------------
Jet A $3.40 $3.89 $3.89 $3.89 $3.89 0.50%
- -------------------------------------------------------------------------------------------
Coal/3 $1.36 $1.15 $1.09 $1.03 $1.04 -1.00%
- -------------------------------------------------------------------------------------------
</TABLE>
1 Fuel price estimates are left in real 1996$s to maintain consistency with a
proprietary Hagler Bailly RealTime(TM) database.
2 Ironwood is forecast to use PJM East natural gas. The Henry Hub to PJM East
basis (transportation) differential is approximately $0.52 per MMBtu.
3 Coal prices were provided on a plant specific basis. Average prices represent
the average for all the coal consumed in a given year. The 1998 price is for
the period Oct. 1997 - Sept. 1998.
4 Calculated from 1998 to 2025.
Capacity Additions
It is our belief that PJM will continue to impose a required reserve margin with
a target of 18%. Actual reserve levels will not remain constant but instead will
fluctuate around this value. We anticipate net capacity additions of 13,221 MW
between 1999 and 2025. All of the new capacity is gas-fired combustion turbines
(CT) or combined cycle (CC) units.
Nuclear Retirements
The retirement dates for PJM nuclear units are based on the expiration dates of
current operating licenses, with the exceptions of Oyster Creek 1, which GPU
Energy ("GPU") intends to retire toward the end of 2000, and Salem-2, which we
retire at the end of 2002.
Sensitivity Assumptions
As noted above, we considered two sensitivity cases:
o In the Low Demand Growth Case, the growth rates are reduced by a third,
compared to the Base Case, for the period 2017 through 2025. In this
case peak and total demand grow at only 0.50% and 1.00% per annum,
respectively, beginning in 2017.
o In the High Natural Gas Price Case, natural gas prices are uniformly
$0.50 per MMBtu (in 1996 $) above the CC Pace forecast levels.
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Except as noted above, the assumptions underlying all three cases are identical.
S.4 FORECASTED RESULTS
Hagler Bailly used the RealTime(TM) production cost model and other analytical
tools to forecast energy and capacity prices for PJM. The resulting PJM "all-in"
price (i.e., capacity price plus energy price) forecast for the Base Case is
$27.70/MWh in 2002, $27.96/MWh in 2012, and $29.98/MWh in 2022 (all in constant
1996 dollars/2). Table S-2 (on the next page) summarizes the price forecasts.
Forecasted energy prices for PJM are shown in Figure S-1. In the Base Case,
energy market prices show a steady, slow price growth throughout the study
period. Prices (time-weighted) begin at $22.05 per MWh in 2001 and gradually
increase to $25.86 by 2025. In the High Gas Price Case, energy prices are
approximately $.60 to $1.20 per MWh above the Base Case throughout the forecast
period. In the Low Demand Growth Case, the impact of the reduction in demand
growth in 2017 can be clearly seen as a break in the price trend. By the end of
the forecast period the Low Demand Growth Case prices are about $2.00 per MWh
below the Base Case./3
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2 Fuel price estimates are left in real 1996$s to maintain consistency
with a proprietary Hagler Bailly RealTime(TM) database.
3 Note that while energy prices in the Low Demand Growth Case are below
the Base Case, this is due to prices remaining essentially flat in real
terms rather than significantly declining. This flat trend in real
prices is maintained although the Low Demand Growth Case assumes no
adjustment to the schedule of capacity additions and retirements in
reaction to the decline in demand growth.
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Table S-2
PJM West/Central Average
All-In Prices
(1996 $)/1
Low Demand
Base Case High Gas Case Growth Case
2001 $27.28 $28.25 $27.28
2002 $27.70 $28.59 $27.70
2003 $26.66 $27.28 $26.66
2004 $27.65 $28.32 $27.65
2005 $26.90 $27.84 $26.90
2006 $27.21 $28.24 $27.21
2007 $27.36 $28.24 $27.36
2008 $27.96 $28.67 $27.96
2009 $27.77 $28.43 $27.77
2010 $28.02 $28.89 $28.02
2011 $28.33 $29.18 $28.33
2012 $27.96 $29.18 $27.96
2013 $28.51 $29.38 $28.51
2014 $28.81 $29.81 $28.81
2015 $28.89 $30.08 $28.89
2016 $29.54 $30.40 $29.54
2017 $29.55 $30.39 $29.11
2018 $29.70 $30.36 $29.27
2019 $29.67 $30.98 $29.05
2020 $29.41 $30.56 $28.87
2021 $30.70 $31.79 $29.08
2022 $29.98 $31.17 $28.91
2023 $30.50 $30.94 $29.29
2024 $30.68 $31.40 $28.76
2025 $31.09 $31.70 $29.05
1 All-In prices include energy and capacity payments. Assumes a 100% capacity
factor in calculating the capacity price per MWh. This assumption has the
effect of understating the capacity price; for capacity factors below 100%
the capacity payment per MWh increases. Fuel price estimates are left in real
1996$s to maintain consistency with a proprietary Hagler Bailly RealTime(TM)
database.
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Figure S-1
PJM West/Central Average Energy Prices
1996$
[GRAPHIC OMITTED]
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The expected operating regime of the Ironwood plant over the 25-year time frame
is indicated by the trend in capacity factor (see Figure S-2)./4 The figure
illustrates the consistent growth in utilization experienced by the Project in
the Base Case.
Figures S-2
AES Ironwood Capacity Factors
[GRAPHIC OMITTED]
The average annual capacity factor is also shown in Figure S-2 for the
sensitivity cases. In both downside cases the model forecasts that Ironwood's
capacity utilization decreases somewhat from the Base Case. Nevertheless,
Ironwood's position in the stack, in terms of costs, is expected to allow it to
effectively compete with other PJM power generators. In the High Gas Price Case,
by the end of the forecast period the utilization of the plant is virtually the
same as in the Base Case. In the Low Demand Growth Case, utilization during the
merchant tail (i.e., the period beginning in the second quarter of 2021 when the
Williams PPA will expire and the plant will find new buyers for its output) is
also very similar to the Base Case. What the analysis
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4 Capacity factor is a measure of plant utilization. It is the ratio of
actual plant output in MWh to the theoretical maximum output that would
result from running the plant at full load every hour of the year
(i.e., 8760 hours). The sawtooth pattern in the graph reflects major
(every sixth year) and minor (every third year) planned maintenance
outages.
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indicates is that the growth in demand, combined with unit retirements, creates
a "floor" that provides stabile economics for the Project during the merchant
period.
Figure S-3 illustrates the position of Ironwood in the PJM supply curve in 2002,
2012, 2022 for the Base Case. The figure illustrates that Ironwood is
positioned, in all years, well below the highest cost coal unit. These results
are consistent with the high utilization of the plant shown in Figure S-2./5
Figure S-3
PJM Supply Curves (1996 $/MWh)
2002
[GRAPHIC OMITTED]
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5 Units positioned below the lowest cost coal unit include nuclear and
hydro. Units positioned above the highest cost coal unit include oil
and gas-fired steam units and combustion turbines and other peakers.
Note that the supply curves exclude emergency power. Emergency power is
incorporated within the RealTime(TM) model in the estimation of energy
prices.
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Figure S-3 (cont'd)
PJM Supply Curves (1996 $/MWh)
2012
[GRAPHIC OMITTED]
2022
[GRAPHIC OMITTED]
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S.5 CONCLUSIONS
Based on our analysis, we believe that the facility's dispatch position on the
supply curve will be highly competitive and well below the highest priced
baseload coal plant during the post-PPA period (and during the term of the power
purchase agreement) due to the facility's high efficiency, low production costs,
and the influence of demand growth in conjunction with unit retirements.
The facility is expected to have an average capacity factor of 90.7% during the
post-PPA period. The addition of new, more efficient gas-fired power generation
facilities in PJM over time will not adversely affect the facility's dispatch.
Even in the two macroeconomic "downside sensitivity" cases of low demand growth
and high gas prices, the Facility's average capacity factor remains
significantly high at 89.6% during the post-PPA period.
During the term of the power purchase agreement, the economics of the Project
are not sensitive to fuel prices because the costs of fuel are the
responsibility of the power purchaser under the power purchase agreement's fuel
tolling provisions.
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CHAPTER 1
INTRODUCTION
1.1 BACKGROUND
Hagler Bailly Consulting, Inc. (Hagler Bailly) was retained by AES Ironwood on
behalf of, and to prepare this report solely for Lehman Brothers as Initial
Purchaser of certain Rule 144A bonds to be offered by AES Ironwood, LLC to
finance the construction, start-up and initial testing of the Ironwood Facility.
We have been retained to independently assess the competitiveness of the planned
AES Ironwood power plant given forecast market prices for electric energy and
capacity in the Pennsylvania, New Jersey, Maryland (PJM) power pool. This
document presents the results of our analysis.
The Northeast power markets are undergoing profound change. Many of the
vertically integrated utilities are divesting their generation assets, and tight
pools (such as the New England Power Pool (NEPOOL), New York Power Pool ( NYPP)
and PJM) are changing as well. Historically, these pools were formed to obtain
the benefits of economic dispatch and coordinated planning. The tight pools are
being replaced by independent system operators (ISOs) with responsibility for
both system operations and market operations. Through the creation of the new
market institutions, the market participants intend to create a liquid and
vibrant market where buyers and sellers of generation services will be able to
transact business efficiently.
It is in this evolving environment that the competitive assessment presented in
this report is made. There is little doubt that forward-price forecasting is
more challenging in a changing market. Our approach is to examine the
fundamental economic prospects of AES Ironwood in the context of the planned and
forecast market.
1.2 ORGANIZATION OF THE REPORT
The remainder of this report is organized as follows:
o Chapter 2 describes the Ironwood project.
o Chapter 3 describes the proposed structure of the markets in PJM.
o Chapter 4 presents our approach to developing forward-price forecasts
for generation services.
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o Chapter 5 discusses the development of assumptions and data to describe
the PJM marketplace.
o Chapter 6 presents market price forecasts for a base case and two
downside sensitivity cases.
o Chapter 7 presents our conclusions.
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CHAPTER 2
THE IRONWOOD PROJECT
2.1 THE IRONWOOD PROJECT
AES Ironwood, LLC proposes to build and operate a 705 MW (net) power plant
("Ironwood") in south Lebanon Township, Pennsylvania. South Lebanon is in the
central region of PJM. The PJM ISO will operate this region's energy market and
transmission system. Ironwood will be a combined cycle power plant using Siemens
Westinghouse 501G technology.
The entire output of Ironwood will be sold to the Williams Energy Marketing and
Trading Company under a 20 year, fixed price power purchase agreement ("PPA").
It is assumed that the Ironwood facility will operate as a merchant power plant
and sell directly into the PJM market upon expiration of the PPA.
AES Ironwood expects seasonal maximum generating capacities of at least 788 MW
in winter, 705 MW in spring and fall, and 655 MW in summer. The power purchase
agreement envisages that in ordinary circumstances Ironwood will be dispatched
at 100% of available. The economics of AES Ironwood assure a high frequency of
commitment and operation at high capacity factors.
Ironwood has a ramp rate of 10 MW/minute. It is considered to have a minimum
uptime of eight hours and no minimum downtime.
A fuel conversion payment of $1.86/MWh (1996 $) is payable to the Ironwood plant
under the PPA. Ironwood's projected actual variable O&M cost is $1.71/MWh (1996
$).
Ironwood is modeled as a dual-fuel plant, generally burning natural gas but
consuming fuel oil during 25 of the highest load days of the winter./6 Since the
RealTime(TM) production cost model employed for this study must be given
specific time periods for each fuel type, we have chosen the high-load winter
days as those most likely to have tight gas supply, necessitating the use of
fuel oil to optimize economics. The plant's forced outage rate is conservatively
assumed to be 10.0% during the first year, 8.0% during the second year, and 5.0%
per year thereafter.
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6 The PPA requires Ironwood to use Jet A during fuel oil operation. Once
the plant enters merchant operation in 2021, the model assumes the
alternative fuel will be distillate fuel oil. Also note that the PPA
permits up to 31 days of annual operation on fuel oil.
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The PPA target heat rate (contractual heat) while operating on natural gas is
higher than Ironwood's heat rate under its EPC contract.
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CHAPTER 3
THE PROPOSED MARKET STRUCTURE IN PJM
One of the key factors that affect prices is the structure and institutions of
the market. This chapter describes the expected structure of generator services
for PJM.
There are a variety of power market models that are currently being considered,
and the PJM market may evolve over time to a structure that differs from that
described here. In addition, revenue and cost streams can be significantly
affected by arrangements made between the owners of generation assets and the
buyer of the plant's generation and capacity. Hagler Bailly's assessment of the
PJM market over the near to mid-term is intended to establish the context for
considering the range of variables relevant to the modeled performance of
Ironwood. In all cases, the description of the PJM market represents the most
recent intelligence, research and expert judgment of Hagler Bailly.
3.1 BACKGROUND
The PJM power pool was one of the first centrally dispatched power pools in the
United States and is one of the largest in the world. Along with other "tight
pools," the PJM power pool demonstrated that centralized dispatch and reserve
sharing among a large number of utilities could result in increased reliability
and provide cost savings for all of the participants.
As policy has shifted toward introducing greater competition in the electric
industry, tight pools such as the PJM power pool have been encouraged by the
Federal Energy Regulatory Commission (FERC) to transform themselves into
Independent System Operators. In its Open Access Rule,/7 FERC ordered public
utilities that are members of tight pools to file an open access transmission
tariff and to open membership in the pool on a nondiscriminatory basis.
In response to the FERC order, the members of the PJM power pool developed a
restructuring proposal and a pool-wide open access tariff. This restructuring
proposal created an ISO to operate the regional bulk power system, maintain
system reliability, administer specified electricity markets, and facilitate
open access to the regional transmission system under the PJM tariff. The PJM
electricity market uses market pricing for generation services, thereby
facilitating the development of a more efficient and more competitive wholesale
electricity market.
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7 Order No. 888, FERC Stats. & Regs. Paragraph 31,036 at 31,726-27.
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PJM was the first power pool to have its open access transmission tariff
approved by FERC. The PJM bid-based energy market was initiated on April 1,
1997. PJM Interconnection, LLC was certified as an ISO by FERC on November 25,
1997. Locational marginal pricing took effect on April 1, 1998. An installed
capacity (daily capacity) market was launched on October 15, 1998.
As PJM shifts to a more competitive environment, many additional changes are
expected. In order to assess Ironwood's competitive position, a number of
critical factors were addressed. Chief among these are the market structure and
rules which define the way in which plant owners will bid and be compensated for
the energy and generation capacity that they provide to the market. Assumptions
about these market conditions were used to determine unit utilization, energy
prices and capacity prices.
3.2 THE PJM MARKET
The wholesale market structure includes the following markets for the services
of generators:
o Spot energy market
o Installed capacity market
Note that ancillary services do not currently have separate bid-based markets,
although such markets are under consideration, as recommended by FERC. Payments
for providing regulation are grounded in cost-based formulas. Payments for
providing operating reserves are included in an energy market daily
reconciliation.
3.2.1 The Spot Energy Market
The ISO runs the spot energy market. The closing time for submitting bids to the
ISO is noon for the energy markets the following day (for example, noon on
Tuesday for bids on energy to be generated on Wednesday). A bid to supply
generation consists of an incremental energy bid curve. For each generation
level, the curve represents the minimum price a bidder is willing to accept to
be dispatched at that generation level. The bid curve is specified by up to 10
price-quantity pairs. The same curve is used for all 24 hours of dispatch.
Bidders also specify operating constraints on their units (minimum up time,
minimum down time, ramp rates) as well as start-up costs and no-load costs.
The ISO determines location-specific market-clearing energy prices for each
hour. Prices are in dollars per megawatt-hour (MWh). Prices are based on bids
for generation, actual loads, and scheduled bilateral transactions. The ISO
constructs a commitment based upon day-ahead bids. Real-time dispatch is
conducted by the ISO by sending price signals to those generators on the margin.
These marginal generators then respond by ramping up or ramping down. The ISO
can also command units to change their output.
Settlement prices are currently calculated after the fact using dispatch data.
PJM has acquired a new energy management system that is to include a security
constrained unit commitment and
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dispatch module. At the time that this system is implemented, the current
procedures for calculating energy prices will be replaced with calculations from
the security constrained dispatch model.
The location-specific market-clearing prices include any charges for
transmission congestion. (The ISO intends in the future to also include charges
for transmission losses.) Congestion occurs when the transmission system becomes
constrained, and some generating capacity is dispatched while other generating
capacity with lower bids is not dispatched. The result is that the
market-clearing prices may differ from location to location. The locational
market-clearing prices ("locational marginal prices" in the jargon of the PJM
ISO) capture any costs associated with the out-of-order dispatch.
Important features of the spot energy market include the following:
o Only the incremental energy bid curve is used in determining the
market-clearing prices.
o Generators that do not recover their start-up and minimum load costs
over the course of a day's operations are compensated for the shortfall
in net revenue ("negative cycle costs") with payments which ensure that
a plant does not lose money by being required to operate by the PJM
ISO./8
o Aside from some interruptible load and exports, bidding is only allowed
by generation resources.
o Bilateral transactions are not subject to the market-clearing prices.
However, they are subject to the same charges for transmission
congestion included in the market-clearing prices.
o Fixed transmission rights (FTRs) allow generators, load-serving
entities, and others to hedge the costs associated with transmission
congestion. An FTR has a financial analogue (transmission congestion
credit or TCC) which is a financial right entitling holders of FTRs to
the congestion charges associated with the difference in prices from a
point of power injection to a point of delivery. When one obtains an
FTR, one also acquires a TCC. TCCs thus may be used to offset the costs
of transmission congestion. FTR's are obtained through two means:
subscription to network service, where FTR's are assigned to the load
based upon the location of the capacity resource and the load, or
through purchase of firm point-to-point transmission service. In
addition, PJM has petitioned the FERC for authority to conduct a
periodic auction of uncommitted FTRs, and a secondary market for these
rights is expected to develop.
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8 In any 24-hour period beginning at midnight, a generator may not lose
money as a result of being dispatched by the ISO. If a generator does
not recover its costs through market payments, then the amount of the
operating loss is paid to the generator by the ISO. This means that a
generator can not lose money from operating on any given day.
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o Investor-owned utilities do not currently have FERC authorization for
market-based pricing. Unless utility participants have authority for
market-based pricing, their bids are capped at cost.
3.2.2 Installed Capacity Market
PJM has imposed generation capacity reserve requirements on all LSEs. These
requirements are expected to lead to an active capacity market. LSEs are defined
as entities providing electricity services to end-use customers under state law.
The PJM conducts an annual reliability study to determine the PJM Reserve
Requirement, defined as the level of installed reserves needed for PJM to meet
the installed generating capability requirements established within the control
area. Historically, the required reserve margin has been decreasing due mainly
to reductions in forced outage hours, and has averaged 18% to 20% over the past
five years./9
To ensure that sufficient capacity is available in the market to meet
reliability standards, PJM requires load-serving entities to own or contract
with physical generation capacity to cover their peak demand. Important features
of the installed capacity market include the following:
o There are two capacity obligations. A load-serving entity's installed
capacity obligation is determined two years in advance by PJM, based on
forecast conditions. This obligation remains in place, and is known as
the "planned-for" obligation. The planned-for obligation is then
adjusted for actual conditions; this adjusted obligation is known as
the "accounted-for" obligation. Capacity acquired in the installed
capacity market satisfies the "accounted-for" obligation.
o The amount of capacity each generator can supply is determined by a
12-month rolling average of availability, calculated two months in
advance of the period for which the capacity is supplied.
o There is a day-ahead installed capacity market, and monthly markets
extending 12 months into the future.
o Each installed capacity market has a single market-clearing price for
each day the market is in operation.
o Capacity may be acquired by a load-serving entity through bilateral
transactions with generators or other load-serving entities. PJM
operates a bulletin board to facilitate bilateral transactions.
If a load-serving entity fails to meet its capacity requirement, a penalty is
assessed.
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9 "1997 MAAC Reliability Assessment," June 1998, Final Report, Prepared
by PJM Interconnection, L.L.C., System Coordination Division.
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Current projections of committed new generating capacity within PJM are
insufficient to meet a reserve requirement of nearly 20% after the year 2000.
The focus of capacity planning has shifted from large, base load coal-fired
generation projects to combustion turbines and combined-cycle plants, which can
be planned and constructed in relatively short periods. However, based on
forecast reserve margins, PJM will require new capacity on line by the 2000
planning period./10
Additional elements of the evolving market for capacity in PJM are described in
the next chapter of this report.
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10 It should be noted that most LSE's in PJM have discontinued reporting
planned capacity additions so as to avoid divulging information related
to strategic business plans to competitors within the system. In spite
of this understanding, it is apparent that maintenance of historical
levels of reserve capacity may not be economically viable. The apparent
shortage of reserve capacity supports our projection that even with an
active capacity market reduced reserve margins are likely.
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CHAPTER 4
APPROACH TO MARKET PRICE FORECASTING
4.1 INTRODUCTION
This chapter discusses our approach to forecasting forward prices for the
services of generation units. The first section discusses general issues related
to the capacity and ancillary services markets. The second section describes the
specific approach employed in this analysis to develop the energy and capacity
price forecasts.
4.2 ISSUES IN PREDICTING MARKET PRICES
By far the most important element of the power market is the energy market,
which will account for the vast majority of revenue. Although there is the
possibility that generators can capture margins in all markets within the PJM
pool, some of these other markets are much more difficult to assess. The
following section of the report discusses issues involved in evaluating the
value of capacity and ancillary services.
4.2.1 Issues in the Capacity Markets
What Is the Purpose of a Capacity Market?
The Northeast markets, i.e., PJM, NYPP and NEPOOL, have all incorporated a
market for capacity as one of the key elements of the new wholesale market
design. In all three of these pools, load-serving entities have an
administrative obligation to purchase, own or control capacity. The capacity
market provides a mechanism for covering any shortfalls in the positions of load
serving entities with respect to their administrative obligations to the pool.
These three pools represent a departure from how other restructured markets have
dealt with the issue of capacity. In other markets that include some
compensation for capacity, notably the England and Wales pool, capacity payments
are determined administratively and are collected through an "uplift" charge
(basically a surcharge) that is added by the pool administrator to the
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price of power from the pool. The PJM, NYPP and NEPOOL markets, to our
knowledge, are the first markets to attempt to institute a bid market for
capacity./11
What is the purpose of capacity compensation? Capacity payments have been
included in the market designs for several purposes:
o Capacity payments can serve as a mechanism to encourage investment in
new generation capacity. This was the predominant rationale for
including capacity payments in the England and Wales pool. The premise
is that a competitive energy market (one that tends to force energy
prices to marginal cost) provides inadequate margins to assure the
construction of sufficient new capacity.
o Some regulators and market designers believe that a capacity payment
will reduce price volatility in the energy market. The premise is that
a fixed capacity payment provides base compensation, the result of
which is to reduce the volatility in energy prices. If revenue
expectations are constant, reduced volatility will reduce risk and
financing costs.
o In the case of PJM, NYPP and NEPOOL the rationale for a bid market in
capacity is due, in part, to gaming that occurred in the England and
Wales pool. There, generators strategically declared their capacity
unavailable in order to raise capacity payments. The designers of the
U.S. capacity markets thought, in part, that a bid market for capacity
might reduce the opportunities for gaming./12
However, many restructured electricity markets have not included a capacity
market or a capacity payment. In fact, California, Norway, New South Wales, and
Victoria all have foregone the option of including a capacity component in the
exchange.
Capacity Revenues Must Be Included in Market Projections
Market institutions evolve and change over time. Given that many debate whether
or not a capacity payment should be a part of the market institutions, is the
revenue we include from capacity prices at risk?
We believe not. Experience in existing energy markets shows that the energy
prices arising from the production cost model (discussed below) understate the
revenue that generators will earn
- ----------
11 Regulated electricity markets, including PJM, have provided capacity
compensation. With deregulation, many continue to do so. What is unique
is not the compensation but the effort to establish a bid market.
12 To be specific, capacity payments in the England and Wales pool are
determined on a day-ahead basis by calculating the loss of load
probability (LOLP, which depends on projected load and capacity). The
LOLP is then multiplied by a value of lost load, which was
administratively determined and escalates over time. Significant gaming
occurred in the pool where generators would declare their capacity not
to be available for the next day, thus increasing the LOLP and the
resulting capacity payment, then declare their capacity available the
next day to capture the inflated capacity payment.
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from the energy market. Using a production cost model presumes that energy
prices are driven to short-run marginal cost. The result of this assumption is
that a significant number of generators (most particularly the peaking and
cycling facilities) earn insufficient margins from the energy market to cover
all of their going-forward costs. If no other payments were provided, rather
then incur these losses or retire, these generators would increase their
start-up bids in all hours in which they expected to be dispatched to at least
recover their going-forward costs. The results of this bidding behavior would be
expected to have results very similar to the method we used in projecting
capacity prices from a bid market.
There are a number of ways that these capacity revenues might be recovered.
o First, the installed capacity markets, although unproven, may function
well into the future.
o Second, the installed capacity market could be replaced by an operating
capacity market, which would have different pricing to cover going
forward costs.
o Third, the capacity markets could be replaced with an administrative
market institution such as those found in the U.K. or Argentina.
o Fourth, even if the capacity market were to disappear, generators would
recover any shortfall in their going-forward costs by increasing their
bid prices in the energy market above marginal cost when market
conditions allow. If they could not do so they would exit the market
and prices would need to increase to attract sufficient new entry to
maintain any required capacity margin.
o Fifth, there is a robust bilateral market that currently exists for
capacity that is likely to persist in any new market structure.
How Do We Model Capacity Payments?
Regardless of the ultimate form of capacity markets, we assess prices by
determining the economic worth of capacity. In our analysis, we model what the
market is willing to pay to retain plant (that might otherwise leave the market)
for reliability services. Specifically, our approach is based on a partial
equilibrium analysis that assessed returns from the energy and capacity markets
and dynamically simulated entry and exit decisions. For these reasons, we
believe that the capacity prices reflect returns that will be sustained by the
market.
Our approach to constructing capacity payments is described in more detail later
in this chapter.
4.2.2 Ancillary Services
The PJM ISO provides for revenues for ancillary services. There are,
potentially, material revenues and margins that could be attributed to these
markets. However, it is extremely difficult to predict what the forward price
curve might be in these markets, since they do not yet
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exist in PJM and there is so little experience with bid-based systems for
ancillary services elsewhere. Hence, our price, revenue, and margin projections
have assumed that the going forward costs of the marginal unit would be covered
and that there would be no contribution from ancillary services markets that
would increase the margins of the marginal unit.
4.3 APPROACH TO MARKET PRICE FORECASTING
Figure 4-1 provides a graphical view of Hagler Bailly's process for producing
forward-price forecasts. The process begins with a definition of the
characteristics of the market, including the electric generating units currently
in operation, their production efficiencies (including heat rate curves), a
projection of plant additions (based in part on announcements and in part on an
equilibrium evaluation of market price signals), consumer demand and load, and
fuel prices.
Figure 4-1
Approach to Developing Capacity and Energy Prices
[GRAPHIC OMITTED]
Using these data, energy prices are projected through a comprehensive simulation
which sets energy price to the short run marginal cost, which also yields
estimates of how much each generating unit produces in the market. Capacity
prices are then projected based on our simulation of the capacity market. Next,
total returns to each generating unit are calculated and used to assess whether
market entry and exit occurs. Iteration between these three phases takes place
until stability is achieved in the energy and capacity price forecast.
Thus, this process develops prices based on a dynamic examination of market
entry and exit (including retirement) decisions made by the supply-side actors
in the market.
The following sections briefly discuss Hagler Bailly's approach to each of these
steps.
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4.3.1 Market Characteristics
The first step is to ensure that we understand sufficiently the nature and
parameters of the market and the generation assets that participate in that
market. Hagler Bailly uses a variety of data sources to characterize the market.
These include:
o Data identifying the generating units, consumer demand and load, and
production capacities of existing plants. This included data from
public sources and data extracted from Hagler Bailly's proprietary Ramp
Up(TM) database.
o Fuel price forecasts.
o Planned additions, which are developed based on announced plans of
developers (tracked in the Hagler Bailly IPP Database) and utilities
(contained in planning council reports), weighted by our assessment of
how much capacity will actually be built in the early stages of the
analysis time horizon. Capacity additions subsequent to 2001 are tested
in the entry and exit logic.
o Retirements of nuclear plants. We review the experience of nuclear
power plant operators (tracked in the Hagler Bailly Operating Plant
Experience Code database) to identify the plants most likely to be
retired before the end of their operating license and to estimate early
retirement dates.
4.3.2 Predicting Energy Prices and Dispatch
Hagler Bailly used the RealTime(TM) production cost model to develop the PJM
wholesale market price of energy, plant operating costs, and projected dispatch
on an hourly basis for the years 2001-2025./13 RealTime(TM) incorporates unit
characteristics (e.g., heat rates, minimum and maximum capacities, ramp rate,
and fuel type), fuel costs, emissions, hourly load, imports from (exports to)
adjoining power pools and many other factors in its calculations.
Since RealTime(TM) is an hourly chronological production cost model, it
addresses each hour before moving on to the next hour. Thus, in every hour each
unit has a generation level (MW) and a cost associated with that generation. A
chronological model such as RealTime(TM) more closely simulates reality and its
uncertainties than do non-chronological models.
RealTime(TM) output includes revenue, fuel costs, emission costs, other variable
costs, profit, generation level (and capacity factor), hours connected to the
grid, forced outages, number of hot
- ----------
13 Hagler Bailly has used RealTime(TM) to project market clearing prices
and unit operations in PJM for asset valuations, regulatory
proceedings, and the evaluation of potential merchant plant projects
for a number of clients. Hagler Bailly has also used RealTime(TM)
elsewhere in the country to model prospective production costs.
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and cold starts, and average and load-weighted marginal costs. In addition,
other reports are provided for every fossil, nuclear, and hydroelectric unit in
PJM.
An additional element of the dispatch analysis considered the impact of
transmission system characteristics and constraints. PowerWorld(TM), a load flow
model, was used to determine if Ironwood would impose additional burdens on the
PJM transmission system and if the plant's location would lead to its being
dispatched less than anticipated due to transmission constraints. We also used
the model to assess whether Ironwood could expect to receive higher revenues due
to contributions to voltage support or for transmission constraint-reducing
flows. The analysis showed that the plant's location would ease transmission
constraints from west to east, the predominant direction of flow, within PJM
Central. However, the value of this contribution is too small to measure at
present. In the future, if a nodal pricing regime is retained (i.e.,
location-specific pricing that reflects such factors as transmission
congestion), some revenue may be available for transmission congestion relief;
none is included in our results.
From the energy price analysis, Hagler Bailly determines the energy margin
(price minus variable cost) attributable to each generating unit in the market.
These margins, along with estimates of "going-forward costs," (fixed costs, such
as fixed O&M, property taxes, administrative and general expenses, employee
benefits, and incremental capital expenditures) are used in the Capacity Market
Simulation model to predict capacity prices.
4.3.3 Predicting Capacity Prices: The Capacity Market Simulation Model
Capacity payments are a mechanism for supporting an appropriate amount and mix
of capacity in the system. There are two reasons for including a capacity
payment in a forward-price analysis. First, if generators bid their short-run
marginal costs into an energy market, only inframarginal plants (those not on
the margin) earn a contribution toward their going-forward fixed costs. Plants
at the top of the supply curve receive little, if any, contribution toward their
going-forward costs. In addition, some of the baseload and cycling plants that
are not at the top of the supply curve but have high going-forward costs may not
earn a sufficient operating margin from the energy market alone to cover all of
those costs.
We predict capacity prices using our proprietary Capacity Market Simulation
Model. This model presumes that the market will retain a sufficient amount of
capacity to meet economic reliability targets. In other words, we simulate the
capacity market as consisting of a supply curve and a demand curve for
reliability (or capacity) services. We assume that the organized capacity market
is a competitive market, and that the market-clearing price for capacity is
determined by the intersection of the supply and demand curves. We construct
supply and demand curves for each year of the simulation time horizon.
The supply curve is calculated from the going-forward costs of each generating
unit. The net of going-forward costs and energy market margins, expressed on a
per-kilowatt basis, represents the minimum amount a generating unit needs to go
forward. Ranking these net costs in ascending order produces a supply curve for
capacity.
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Next, the demand curve is estimated. The demand curve is estimated by
representing the capacity associated with a target reliability level. The demand
curve is a vertical line derived using a target reserve margin or target level
of installed capacity.
Finally, the intersection of the demand curve and the supply curve represents
the capacity payment that the market would support in that year. The capacity
price forecast is the capacity payment derived for each year of the study
period. An example supply and demand curve is shown in Figure 4-2.
For the purposes of the AES Ironwood study, Hagler Bailly applied the results of
its most recent capacity valuation studies of the PJM market. The estimated
annual capacity values average $45.19/kW-year (1996 $) for the forecast
period./14 (The annual values are shown in Chapter 6 of the report.)
Figure 4-2
Example Supply and Demand Curve
[GRAPHIC OMITTED]
4.3.4 Market Entry and Exit
It is necessary to assess the feasibility and timing of new capacity additions
as well as the exit of uneconomic existing capacity. Hagler Bailly's proprietary
modeling approach serves two purposes:
- ----------
14 Additional revenues may be available in the future to generators that
provide operating capacity services and other ancillary services, such
as black-start capability. Such revenues are not considered in this
analysis.
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o First, it identifies generating units that are not able to cover their
going-forward costs in the energy market and are therefore at risk of
abandoning the market.
o Second, it provides a rational method for ascertaining the amount,
timing, and type of capacity additions.
Hagler Bailly's approach uses a financial model to assess the decision to add
new capacity and to retire existing capacity. The approach to plant additions is
based on a set of generic plant characteristics, financing assumptions, and
economic parameters, and is an iterative process performed simultaneously with
the development of the energy price forecast and the capacity price forecast.
The methodology assesses the validity of annual capacity additions based on a
Discounted Cash Flow (DCF) model using net energy revenues determined in the
production cost model simulations, and capacity revenues determined from our
Capacity Market Simulation approach. For each increment of new capacity, a "Go"
or "No Go" decision is made based on the resulting financials. In addition,
economic retirement decisions are made at each step in the iterative process
based on the specific financial and operating characteristics of each existing
plant.
The iterative process begins with the addition of new capacity. A production
cost run is executed to determine energy prices, dispatch, and operating costs.
The Capacity Market Simulation is then performed. Financial results for the
energy and capacity markets are combined in the financial model to determine
whether the new unit is a "Go" or "No Go." If the new unit is a "Go," another
new unit is added, and the process repeated. This occurs until the next new unit
returns a "No Go."
Retirements are determined after new units are added. A financial analysis of
each unit is performed, combining the results of the energy and capacity
markets. If the cumulative operating profit (loss) for an existing unit were
negative for any five-year period, it was retired at the end of the third year
of consecutive operating loss. Although the decision criterion was somewhat
subjective, it was interpreted conservatively. Thus, if a unit lost money for
two years, was in the black over the third year, and then lost money for two
more years, the unit was maintained online.
If units were retired, the iterative process would begin again with the addition
of new capacity. In this way, the introduction of new units influences the
retirement of existing units, and the retirement of existing units enables the
introduction of new units. Since the addition of new units is "lumpy," the
iteration generally stops with new generators earning a small increment above
their cost of debt and equity. The addition of one more new unit would then push
many of the previous additions into losses. This approach reflects a game
theoretic concept of a market equilibrium.
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CHAPTER 5
MARKET PRICE FORECASTING:
ASSUMPTIONS AND ASSUMPTION DEVELOPMENT
5.1 INTRODUCTION
This section of the report describes the key assumptions used in the development
of the PJM capacity and energy market price forecasts and the related models.
The assumptions are presented in two sections. The first section describes the
inputs to the RealTime(TM) production cost model, including: (1) the
characteristics of the existing generating units (thermal, hydro, nuclear), (2)
the demand and energy forecasts, (3) fuel prices, (4) the modeling of
electricity imports/exports in the regions, and (5) intra-PJM transmission
constraints. The second section describes the inputs to the Capacity Market
Simulation Model.
5.2 PRODUCTION COST MODEL INPUT ASSUMPTIONS
As discussed above, to simulate the hourly market-clearing price of energy we
use the RealTime(TM) production-costing model. RealTime(TM) allows the
characterization of multiple transmission areas within a power pool.
Transmission areas for PJM are defined as "PJM-East" and "PJM-Central/West"
(see Map 5-1, below).
Map 5-1
PJM Regions
[GRAPHIC OMITTED]
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Imports and exports are modeled as contracts involving the East Central Area
Reliability Council (ECAR) and the New York Power Pool (NYPP). Map 5-2
illustrates the location of PJM, NYPP, ECAR and other adjacent power pools.
Map 5-2
Eastern Power Pools
[GRAPHIC OMITTED]
Each of the PJM region's major generating units is represented individually in
the production-costing model using unit-specific cost and operating
characteristics. The RealTime(TM) model is used to perform an hour-by-hour
chronological simulation of the commitment and dispatch of generation resources.
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5.2.1 Existing Generating Units
Fossil Units
Each fossil generating unit is characterized using the following parameters:
o Summer and winter net capability
o Heat-rate curve
o Operating characteristics
|_| Minimum capacity
|_| Ramp rate
|_| Minimum uptime
|_| Minimum downtime
o Forced outage rate
o Scheduled maintenance outage rate
o Variable operation and maintenance cost
o Emission costs
o Start fuel.
Units that operate on more than one fuel have characteristics specified for each
fuel. The development of these parameters is discussed below.
Summer and Winter Capabilities. Summer and winter capability values were
obtained from the 1997 Mid-Atlantic Area Council (MAAC) Regional Reliability
Council, EIA-411 Report. (MAAC is contiguous with PJM.)
Heat-Rate Curves for Fossil Units. Heat rate estimates were derived primarily
from Hagler Bailly's Ramp Up(TM) generation database and analysis system. Ramp
Up(TM) contains estimates of unit heat rates based on actual hourly unit
performance, as reported to the U.S. Environmental Protection Agency as part of
the Continuous Emission Monitoring (CEM) program. Where the CEM data was not
available, heat rate curves were estimated, using a proprietary Hagler Bailly
methodology, from the full load heat rates reported to the federal Energy
Information Administration (EIA) on EIA Form 860.
Operating Characteristics. The operating characteristics (minimum capacity, ramp
rate, minimum uptime, minimum downtime, forced and scheduled outage rates) are
derived from Hagler Bailly proprietary databases.
Variable Operation and Maintenance Costs. In RealTime(TM), nonfuel variable O&M
cost, hereafter referred to simply as variable O&M, is treated as if it is
directly proportional to the generation level of each unit. Variable O&M is a
problematic category because, in the short run, the truly variable portion
represents only a small part of total variable O&M costs, as traditionally
reported.
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The variable O&M costs in RealTime are derived from FERC Form 1 data. The model
assumptions are shown below in Table 5-1.
- -------------------------------------------------------------------------------
Table 5-1
Variable Operating Costs (1996 $ per MWh)/15
- -------------------------------------------------------------------------------
Existing Oil, Gas, and Refuse $2.00/MWh
- -------------------------------------------------------------------------------
Coal - Not Scrubbed $3.00/MWh
- -------------------------------------------------------------------------------
Coal - Scrubbed $4.00/MWh
- -------------------------------------------------------------------------------
New CC $1.71
- -------------------------------------------------------------------------------
New CT $3.02
- -------------------------------------------------------------------------------
Sulfur Dioxide Emission Costs. The Clean Air Act Amendments of 1990 (CAAA)
provided for tightened restrictions on the emission of sulfur dioxide (SO2) by
fossil-fired generating stations, with the primary impact falling on coal
plants. In a departure from traditional command-type regulation, the CAAA
established a mechanism by which utilities could buy and sell rights to emit
SO2. This SO2 "allowance" system accordingly establishes a value or cost to a
utility, depending on whether it needs to purchase allowances or, if it emitting
less SO2 than it is authorized per the CAAA, it has excess allowances that it
can sell or bank for future use. Each allowance represents the right to emit one
ton of SO2.
The assumptions related to SO2 costs were based upon forward price forecasts
developed by Putnam, Hayes & Bartlett, Inc. (PHB). For the purposes of our
modeling, we assumed that SO2 emission costs were equal to the number of tons of
SO2 emitted multiplied by the price of allowances in a given year. The resulting
cost was added to the variable cost of each generating unit and included in the
development of the energy price forecast.
SO2 allowances are currently priced at about $190 per ton (1996 $). PHB
forecasts allowance prices escalating to $200 by 2001, and then gradually
ramping up to $400 by 2010, after which prices are flat in real terms (see
Figure 5-1).
Development of NOx Control Costs and Emission Rates
Because of the persistence of a widespread ozone nonattainment problem and the
recognition of NOx emissions as the primary precursor pollutant, EPA has
recently proposed the State Implementation Plan (SIP) Call. The SIP Call seeks a
70% percent reduction in NOx emissions from large NOx point sources (i.e., power
plants and industrial boilers) in 22 states starting in 2003. Despite these
large proposed reductions in NOx emissions, modeling of ozone
- ---------
15 Note: for modeling purposes all operating costs for nuclear, hydro and
pumped storage units are assumed to be fixed.
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concentrations suggests that many areas east of the Mississippi will be in
non-attainment of the 8-hour ozone standard. In order to avoid strict federal
penalties for ozone nonattainment, states will need to obtain further reductions
in NOx emissions. This will result in a continuous reduction in the number of
NOx allowances that are available, which will maintain NOx allowance prices
beyond 2020. The forecast SO2 and NOx price curves are shown below in Figure
5-1.
Figure 5-1
Forecast Of Allowance Prices
(1996$ per Ton)
[GRAPHIC OMITTED]
The forward price curve for NOx emissions begins in 2001 at a price for
summer/16 NOx allowances of $2,150/ton (1996 $). The price of NOx allowances
jumps to $2,500/ton for the first summer of SIP Call regulations in 2003,
reaches $2,900 by 2005, and remains at this level through 2025./17
Hydroelectric Units
The hydroelectric plants in the region are modeled individually, with the
exception of small plants, which are consolidated by utility and categorized as
peaking or baseload. Similar to the
- ----------
16 The summer NOx period is May 1 through September 30.
17 Source of NOx Allowance Prices: PHB Hagler Bailly estimate
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thermal units, the maximum capacity for each unit was taken from sources cited
above for summer and winter capabilities.
Nuclear Units
Table 5-2 lists the shutdown dates for all PJM nuclear units that retire during
the forecast period. The retirement dates are based on the expiration dates of
current operating licenses, with the exceptions of Oyster Creek 1, which GPU
intends to retire at the end of 2000, and Salem-2, which we retire at the end of
2002.
- --------------------------------------------------------------------------------
Table 5-2
Nuclear Unit Retirement Dates
- --------------------------------------------------------------------------------
Unit Retirement Summer Capacity Cumulative Retired
Date (MW) Capacity (MW)
- --------------------------------------------------------------------------------
Oyster Creek-1 10/01/00 619 619
- --------------------------------------------------------------------------------
Salem-2 12/31/02 1,106 1725
- --------------------------------------------------------------------------------
Peach Bottom-2 12/31/14 1,093 2818
- --------------------------------------------------------------------------------
Calvert Cliff-1 12/31/15 840 3658
- --------------------------------------------------------------------------------
Peach Bottom-3 12/31/15 1,093 4751
- --------------------------------------------------------------------------------
T.M. Island-1 12/31/15 786 5537
- --------------------------------------------------------------------------------
Calvert Cliff-2 12/31/17 840 6377
- --------------------------------------------------------------------------------
Salem-1 12/31/17 1,106 7483
- --------------------------------------------------------------------------------
Hope Creek-1 12/31/21 1,031 8514
- --------------------------------------------------------------------------------
Susquehanna 1 12/31/23 1,090 9604
- --------------------------------------------------------------------------------
5.2.2 Load Growth
Our load growth assumptions have an important effect upon the analysis of the
market. With the output of generating plants and imports and exports held
constant, higher load means higher energy prices since units higher in the stack
will be dispatched to cover demand. Load, or demand, growth assessments focus on
aggregate, or total, demand and on load shape, which directly affect forecasts
of peak demand. Changes in the load shape (e.g., peak shaving) may reduce the
energy revenues despite higher aggregate demand. PJM load growth on average is
generally expected to increase at between 1.5% and 2% per annum, with peak loads
growing more slowly to reflect primarily industrial load shifting toward the
less expensive hours of the day.
In the present study, we utilized the actual hourly load variation pattern of
1995. We escalated the total load and peak load at different rates to reflect
our expectation that industrial and commercial peak loads will be shifted in the
future as time-of-day pricing and metering are extended.
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The estimation of load growth through the next two decades is an important input
to the analysis. Hagler Bailly has done extensive work on the subject of demand
forecasting, and has selected load growth rates that are most probable given
this research and analysis. The years 2002-2009 are assigned a higher load
growth rate to reflect increased energy use as utilities finish collecting
stranded costs, making power less expensive. In the present study, the Base Case
assumptions forecast annual demand escalation at the following rates:
o to 2002: 1.5% per annum
o 2003 to 2009: 2.0% per annum
o 2010 to 2025: 1.5% per annum
Our peak load escalation rates are as follows:
o to 2009: 1.00% per annum
o 2010 to 2025: 0.75% per annum
We also tested the economics of Ironwood for a Low Demand Growth Case. In this
scenario both annual average and peak load growth rates for each year after 2016
are reduced by one-third, with no concomitant adjustment to the schedule of
capacity additions or retirements. This encompasses the last four years of the
PPA period and the merchant tail. Figure 5-2 illustrates the growth in average
and peak load under the Base and Low Demand Growth Cases.
Figure 5-2
Cumulative Demand Growth in PJM
[GRAPHIC OMITTED]
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5.2.3 Fuel Prices
Fossil fuel prices for this study were provided and documented by CC Pace. The
forecast for all fossil fuels is shown in Table 5-3, and summary graphs
illustrating the natural gas and coal price forecasts are presented in Figures
5-3 and 5-4.
Note that Figure 5-3 illustrates the natural gas Base Case values and the High
Gas Price Case constructed by Hagler Bailly (a uniform $0.50 per MMBtu increase
in the gas price for each year). Because the plant is gas-fired, the High Gas
Price Case represents the "downside" fuel price sensitivity.
The coal prices shown are the PJM-average delivered price for each year. The
model runs are based on individually determined coal prices for each plant, and
reflect such factors as the specific transportation costs and sulfur content
requirements of each station.
Table 5-3
Delivered Fuel Prices (1996$/MMBtu)/1
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Average
Annual %
Fuel 1998 2005 2010 2020 2025 Change/4
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Natural Gas - PJM East/2 $2.57 $2.48 $2.52 $2.63 $2.69 0.17%
- -----------------------------------------------------------------------------------------------
Natural Gas - PJM West $2.47 $2.38 $2.43 $2.53 $2.60 0.18%
- -----------------------------------------------------------------------------------------------
Residual #6 $2.10 $2.41 $2.41 $2.41 $2.41 0.51%
- -----------------------------------------------------------------------------------------------
Distillate #2 $3.20 $3.69 $3.69 $3.69 $3.69 0.53%
- -----------------------------------------------------------------------------------------------
Jet A $3.40 $3.89 $3.89 $3.89 $3.89 0.50%
- -----------------------------------------------------------------------------------------------
Coal/3 $1.36 $1.15 $1.09 $1.03 $1.04 -1.00%
- -----------------------------------------------------------------------------------------------
1 Fuel price estimates are left in real 1996$s to maintain consistency with a
proprietary Hagler Bailly RealTime(TM) database.
2 Ironwood is forecast to use PJM East natural gas. The Henry Hub to PJM East basis
(transportation) differential is approximately $0.52 per MMBtu.
3 Coal prices were provided on a plant specific basis. Average prices represent the
average for all the coal consumed in a given year. The 1998 price is for the period
Oct. 1997 - Sept. 1998.
4 Calculated from 1998 to 2025.
</TABLE>
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Figure 5-3
Delivered Natural Gas Prices 1996$
[GRAPHIC OMITTED]
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Figure 5-4
PJM Generation Weighted Average Coal Prices 1996$
[GRAPHIC OMITTED]
5.2.4 Energy Import/Export Forecast
In RealTime(TM), we have modeled two electric energy imports into PJM and one
export. The imports are from ECAR and Ohio Edison-Potomac Electric Power Company
(OE-PEPCo), with maximum hourly capacities of, respectively, 4300 and 450 MW.
The export is into NYPP (maximum hourly capacity of 1000 MW). These imports and
exports are utilized when they are economical; electrical energy is imported
when the import price is less than the cost of generating that unit of energy
within PJM, and energy is exported when the price is greater than the cost of
PJM generation. All imports and exports remain in place throughout the model run
with the exception of the OE-PEPCo import, which expires at the end of 2005.
Table 5-4 displays the properties of the two imports and the export.
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<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Table 5-4
Imports and Exports (1996 $ per MWh)
- ------------------------------------------------------------------------------------------------------------------
On-Peak
Location Price in Off-Peak Annual Price Maximum Hourly Minimum
Import/Export within PJM 2001 Price in 2001 Escalation Capacity (MW) Take (MW)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ECAR Import/18 West & Central 20.75 15.25 See Note 4,300 10
- ------------------------------------------------------------------------------------------------------------------
OE-PEPCO Import West & Central 11.94 11.94 3.0% 450 10
- ------------------------------------------------------------------------------------------------------------------
NYPP Export East 22.04 15.79 1.0% 1,000 10
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
Emergency power purchase contracts were modeled on an economy basis using
experience Hagler Bailly has gained in the course of several market studies and
the pricing observed during the past year. Given recent market pricing during
high demand periods, the assumed pricing of the emergency power purchase
contracts is conservative. In all years of the study, the PJM market is assumed
to be able to purchase the following amounts of power for each of the two PJM
regions at the prices shown in Table 5-5. Emergency power is imported from
neighboring control areas using transmission capacity reserved for such purposes
(as provided by the capacity benefit margin).
- --------------------------------------------------------------------------------
Table 5-5
Emergency Imports
- --------------------------------------------------------------------------------
Quantity Available Price (Real 1996 $)
- --------------------------------------------------------------------------------
500 MW $100.00
- --------------------------------------------------------------------------------
500 MW $150.00
- --------------------------------------------------------------------------------
200 MW $250.00
- --------------------------------------------------------------------------------
Additional MW $300.00
- --------------------------------------------------------------------------------
5.2.5 Transmission Constraints
The PJM Central-East interface has transfer capability estimated variously at
between 4,700 and 5,300 MW located near the New Jersey-Pennsylvania border.
Historically, as a consequence of this constraint a price differential exists
between the two sides of the interface about 10% of the time. RealTime(TM)
models transmission flows based on forecast price differentials resulting from
local demand and prices. This PJM East constraint generally becomes binding in
times of moderate to high demand, but not at times of peak demand. The reason
for this is that
- ----------
18 Note: ECAR import price trajectory approximates PJM trends.
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significantly greater base-load and intermediate capacity is located in the West
and Central regions relative to the East. The East, in contrast, contains a
significant quantity of peaking capacity. Thus, as load increases more energy is
transmitted from Central to East until the constraint is reached. However, as
load levels continue to increase to peak levels, many peaking units in the East
are dispatched, lowering transmission demand. This means that plants located in
the West and Central regions receive slightly lower market prices than would be
the case if PJM were simply a single unconstrained pool.
PJM does not expect major new transmission lines to be constructed during the
study period. We have adopted this expectation.
5.3 CAPACITY MARKET SIMULATION MODEL INPUT ASSUMPTIONS
5.3.1 Existing Units Going-Forward Costs
For fossil units, annual fixed O&M costs are determined using FERC data from
1994-1996. For each year, total annual nonfuel production costs are identified.
The fossil fuel experts within Hagler Bailly assume that a reasonable proxy for
attributing nonfuel production costs to fixed and variable components is to
attribute 30% of total nonfuel costs to fixed costs, and the remainder to
variable costs. These fixed costs, in dollars, are then divided by net
capability to arrive at a cost in units of $/kW. These costs are then averaged
across years to determine an annual fixed production cost in $/kW. No
discounting is done to account for inflation, because inflation is a very small
component of the year-to-year variability for the three-year time period.
For steam units, the following adjustments are made. An increment of $4/kW for
annual G&A is added./19 Costs for employee benefits are assumed to be 50% of
total salaries reported in FERC Form 402, lines 18 and 28. Incremental capital
expenditures are assumed to be 20% of total fixed costs. These costs, which are
an important component of going-forward costs, are not reported in the FERC
production accounts.
While some FERC cost data is available at the generating unit level, most of
these data are available only at the power plant or station level. For
generating units lacking FERC data at the generating unit level, total station
annual nonfuel costs are attributed to generating units in proportion to
generating unit capacity. Since fixed production costs are calculated in units
of $/kW, this means that all generating units at a station have the same fixed
production costs per kW, unless production costs for a generating unit are
individually reported in the FERC data.
- ----------
19 An increment for annual G&A is only included for the steam units and
not the remaining units since the steam units are the units that are
more likely to have G&A costs that are not reflected in the FERC fixed
O&M accounts.
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For units not reported in the FERC data, an average value by unit type was
calculated from those units that do report FERC data. Combustion turbines and
gas turbines that were not listed in the FERC data were attributed annual fixed
production costs of $14.50/kW. Combined cycles were assigned a value of
$13.50/kW and steam units a value of $30.50/kW.
Property tax data for each unit was derived by applying a mill rate to an
assumed market value. We assumed a value for generating capacity of $400/kW.
Mill rates were assumed to vary by state and yield values averaging $9.50/kW.
5.3.2 New Generating Capacity
Projected unit characteristics for future combined cycle units (CCs) are based
upon Hagler Bailly estimates. These estimates were confirmed in conversations
with industry sources. These units were assigned seasonal maximum capacities of
788 MW, 705 MW, and 655 MW during the winter, spring/fall, and summer,
respectively. These units ramp up at 10 MW/minute, burn pipeline gas, and have a
variable O&M cost of $1.71/ MWh (1996 $). Their minimum uptime is eight hours
and they have no minimum downtime.
Unlike existing stock (those currently operating) in the model, future CCs are
assigned hot and cold start-up costs expressed in MMBtu. A cold start is defined
as a start after eight or more hours not in operation and has an average cost of
6,172 MMBtu per unit. A hot start is a start after less than eight hours of
inactivity, and its average cost is 2,482 MMBtu per unit.
Heat rates for CCs improve with time (i.e., newer units have superior technology
and performance to earlier units). Table 5-6 shows the heat rates and other key
characteristics of the generic combustion turbines (CTs) and CCs used in the
model.
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- --------------------------------------------------------------------------------
Table 5-6
New Generating Unit Characteristics (1996 $)
- --------------------------------------------------------------------------------
CC CT
- --------------------------------------------------------------------------------
Summer Net Capacity (MW) 655 MW/1 345 MW
- --------------------------------------------------------------------------------
Total Capital Cost $464 $279
($/kW)
- --------------------------------------------------------------------------------
Heat Rate (Btu/kWh, for Units installed 2001-06: 6768
full load summer Units installed 2007-13: 6339 10,400
operation) Units installed 2014-25: 6235
- --------------------------------------------------------------------------------
Variable O&M ($/MWh) $1.71 $3.02
- --------------------------------------------------------------------------------
Fixed O&M ($/kW Year) $9.75 $5.11
- --------------------------------------------------------------------------------
1 The 655 MW (summer capacity) is equivalent to 705 MW average capacity.
Information on fixed costs, depreciation, and taxes is also developed and
incorporated within the DCF analysis to determine the economic viability of the
new unit additions. Environmental costs and overhaul expenses are not included
due to expectations that such expenses would be minimal in early years of
operation. Key economic and financial assumptions include the following:
o Property taxes are assumed to be 1% of the initial capital costs.
Property taxes are escalated over time at the Projected inflation rate.
o Depreciation of the initial all-in cost of the new additions are based
on a standard 20-year MACRS (150% DB) with mid-year convention.
o General inflation is assumed at 2.5%.
o Minimum after-tax return of 13.5%.
o Income tax rate is assumed to be 35% federal and 7% state.
o Financing assumptions of 60% debt, 40% equity.
o Debt interest rate of 8%.
o Debt terms are 20 years for combined cycle units with mortgage-style
amortization.
o Debt terms are 15 years for combustion turbine units.
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- --------------------------------------------------------------------------------
CHAPTER 6
MARKET PRICE FORECASTS
6.1 INTRODUCTION
This chapter presents the market price forecasts resulting from our analysis,
and our assessment of Ironwood's dispatch given these forecasts. Three cases
were developed:
o "Base Case," which reflects our best assessment of future market
conditions.
o "High Gas Price Case," a downside sensitivity that tests the effect of
higher prices for gas through a uniform increase of $.50/MMBtu relative
to the Base Case in all years, while leaving all other fuel prices
unchanged.
o "Low Demand Growth Case," a downside sensitivity that tests the effect
of a one-third reduction in PJM average and peak demand growth rates
for each year beginning in 2017. This encompasses the last four years
of the PPA term and each year in the post-PPA period. While demand
growth is reduced, this case includes no corresponding adjustment to
the schedule of capacity retirements and additions.
All three cases use the same schedule of unit additions and retirements. In the
Low Demand Growth Case this conservative assumption has the effect of
overstating the likely reserve margins and exaggerating the downward impact on
energy prices.
The remainder of this chapter of the report is organized as follows:
o Section 6.2 presents our forecasts of power prices in PJM.
o Section 6.3 presents our forecasts of capacity factors and of
Ironwood's competitive position.
6.2 PJM CAPACITY AND ENERGY PRICE FORECASTS
6.2.1 Base Case
The pressing need for capacity in the PJM market is reflected in Table 6-1,
which summarizes PJM market entry and exit. During the study period, 14,744 MW
of capacity is retired and 27,965 MW of new combined cycle (CC) and combustion
turbine (CT) capacity is added, for a
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net increase of 13,221 MW (a 25% increase, compared to current installed
capacity of 52,521 MW). These additions provide for an average reserve margin of
18.1% for the study period./20
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Table 6-1
PJM Capacity Additions and Retirements
(MW)
- -----------------------------------------------------------------------------------------------------------------------
Net
Total Capacity Cumulative Reserve
Year CC CT Additions Retirements Cumulative Net Capacity Margin
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2001 655 - 655 (198) 457 457 17.8%
- -----------------------------------------------------------------------------------------------------------------------
2002 - 240 240 - 240 697 17.1%
- -----------------------------------------------------------------------------------------------------------------------
2003 1,310 1,380 2,690 (2,264) 426 1,123 16.7%
- -----------------------------------------------------------------------------------------------------------------------
2004 1,310 1,035 2,345 (1,791) 554 1,677 16.6%
- -----------------------------------------------------------------------------------------------------------------------
2005 1,310 690 2,000 (1,131) 869 2,546 17.1%
- -----------------------------------------------------------------------------------------------------------------------
2006 - 690 690 - 690 3,236 17.2%
- -----------------------------------------------------------------------------------------------------------------------
2007 1,310 - 1,310 - 1,310 4,546 18.4%
- -----------------------------------------------------------------------------------------------------------------------
2008 655 - 655 - 655 5,201 18.8%
- -----------------------------------------------------------------------------------------------------------------------
2009 - 690 690 - 690 5,891 18.9%
- -----------------------------------------------------------------------------------------------------------------------
2010 655 690 1,345 (835) 510 6,401 19.0%
- -----------------------------------------------------------------------------------------------------------------------
2011 - 345 345 - 345 6,746 18.7%
- -----------------------------------------------------------------------------------------------------------------------
2012 - 345 345 - 345 7,091 18.5%
- -----------------------------------------------------------------------------------------------------------------------
2013 655 - 655 - 655 7,746 18.7%
- -----------------------------------------------------------------------------------------------------------------------
2014 - 345 345 - 345 8,091 18.5%
- -----------------------------------------------------------------------------------------------------------------------
2015 1,310 345 1,655 (1,093) 562 8,653 18.6%
- -----------------------------------------------------------------------------------------------------------------------
2016 1,310 1,725 3,035 (2,719) 316 8,969 18.3%
- -----------------------------------------------------------------------------------------------------------------------
2017 - 690 690 - 690 9,659 18.6%
- -----------------------------------------------------------------------------------------------------------------------
2018 1,310 1,035 2,345 (1,946) 399 10,058 18.4%
- -----------------------------------------------------------------------------------------------------------------------
2019 655 - 655 - 655 10,713 18.6%
- -----------------------------------------------------------------------------------------------------------------------
2020 655 - 655 - 655 11,368 18.8%
- -----------------------------------------------------------------------------------------------------------------------
2021 - 345 345 (571) (226) 11,142 17.6%
- -----------------------------------------------------------------------------------------------------------------------
2022 1,310 - 1,310 (1,106) 204 11,346 17.8%
- -----------------------------------------------------------------------------------------------------------------------
2023 655 - 655 - 655 12,001 18.0%
- -----------------------------------------------------------------------------------------------------------------------
2024 1,310 345 1,655 (1,090) 565 12,566 17.9%
- -----------------------------------------------------------------------------------------------------------------------
2025 655 - 655 - 655 13,221 18.1%
- -----------------------------------------------------------------------------------------------------------------------
TOTAL 17,030 10,935 27,965 (14,744) 13,221 Avg. reserve 18.1%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
20 Due to the abundance of inexpensive coal fired generation capacity in
PJM-West, there are no economic additions or retirements in this
region. All the additions in PJM are in the East and Central regions.
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The introduction of this substantial new capacity helps to explain why the PJM
market is characterized by relatively low energy prices and relatively high
capacity prices. When many of the nuclear units are retired, they are
immediately replaced in the model by new CC and CT units to meet system
reliability requirements. These units, like the nuclear plants, have relatively
low variable costs, which perpetuates low prices in the energy market. The going
forward costs of these units, coupled with the relatively low energy market
prices, require additional revenues from the capacity market. This keeps
capacity prices high throughout the study period. By the end of 2005, 5384 MW of
uneconomic generation is retired in PJM. At the same time the system adds 7930
MW of new capacity. This new capacity, composed of both CC and CT units,
replaces the retired nuclear units. New generating capacity is added in every
year of the study period, in order to meet the growing demand for power in the
region.
At the outset of the forecast period coal generation is at the margin for over
half the hours in a year. Over time, as gas-fired units are constructed to meet
load growth and nuclear units are retired (which has the effect of increasing
the base load utilization of coal), gas-fired units become the marginal source
of power for almost a third of the hours. Since Ironwood's costs are lower than
many coal units, Ironwood is "inframarginal" in the vast majority of hours; that
is, its costs are below the costs of the marginal unit.
In the Base Case, energy market prices show a steady, slow price growth
throughout the study period. Energy prices begin at $22.05 (1996 $s/21) per MWh
in 2001 and gradually increase to $25.86 by 2025 (See Figure 6-1 and Table 6-2).
In the High Gas Price Case, energy prices are approximately $.60 to $1.20 per
MWh above the Base Case throughout the forecast period. This sensitivity
represents the "downside" fuel case because of the increase in Ironwood's fuel
costs. In the Low Demand Growth Case, the impact of the reduction in demand
growth in 2017 can be clearly seen as a break in the price trend. By the end of
the forecast period the Low Demand Growth Case prices are about $2.00 per MWh
below the Base Case./22
- -----------
21 Fuel price estimates are left in real 1996$s to maintain consistency
with a proprietary Hagler Bailly RealTime(TM) database.
22 Note that while energy prices in the Low Demand Growth Case are below
the Base Case, this is due to prices remaining essentially flat in real
terms rather than significantly declining. This flat trend in real
prices is maintained although the Low Demand Growth Case assumes no
adjustment to the schedule of capacity additions or retirements in
reaction to the decline in demand growth.
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Figure 6-1
PJM West/Central Average Energy Prices
1996$
[GRAPHIC OMITTED]
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Table 6-2
PJM Average Energy Prices
(1996 $/MWh)
High Gas Low Demand
Base Case Price Case Growth Case
- --------------------------------------------------------------------------------
2001 $22.05 $23.02 $22.05
2002 $22.47 $23.36 $22.47
2003 $21.43 $22.05 $21.43
2004 $22.42 $23.09 $22.42
2005 $21.88 $22.82 $21.88
2006 $22.15 $23.18 $22.15
2007 $22.32 $23.20 $22.32
2008 $22.85 $23.56 $22.85
2009 $23.02 $23.68 $23.02
2010 $22.98 $23.85 $22.98
2011 $23.44 $24.29 $23.44
2012 $22.77 $23.99 $22.77
2013 $23.28 $24.15 $23.28
2014 $23.58 $24.58 $23.58
2015 $23.66 $24.85 $23.66
2016 $24.31 $25.17 $24.31
2017 $24.32 $25.16 $23.88
2018 $24.51 $25.17 $24.08
2019 $24.44 $25.75 $23.82
2020 $24.18 $25.33 $23.64
2021 $25.47 $26.56 $23.85
2022 $24.75 $25.94 $23.68
2023 $25.27 $25.71 $24.06
2024 $25.45 $26.17 $23.53
2025 $25.86 $26.47 $23.82
Table 6-3 presents the annual forecast of capacity values used in the study,
expressed in 1996 dollars per kW-year. Since it can be difficult to separately
assess the effects of capacity and energy prices, we also present in Table 6-4
an "all-in" price forecast that combines energy and capacity prices (calculated
using a 100% load factor). The forecasted all-in price for the Base Case is
$27.70/MWh in 2002, $27.96/MWh in 2012, and $29.98/MWh in 2022 (all in constant
1996 dollars).
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Table 6-3
PJM Capacity Prices
(1996 $/kW-yr)
All Cases
---------------------------------
2001 $45.84
2002 $45.84
2003 $45.84
2004 $45.84
2005 $44.01
2006 $44.34
2007 $44.17
2008 $44.74
2009 $41.65
2010 $44.13
2011 $42.80
2012 $45.49
2013 $45.84
2014 $45.84
2015 $45.84
2016 $45.84
2017 $45.84
2018 $45.46
2019 $45.84
2020 $45.84
2021 $45.78
2022 $45.78
2023 $45.78
2024 $45.78
2025 $45.78
We have used the Base Case capacity values throughout. We do so since the High
Gas Case does not affect capacity requirements and the reduced energy margins
would, all else equal, increase the revenue required for new capacity. With the
Low Demand Growth Case we do not believe that the posited capacity would
actually enter the market. As capacity became overbuilt, new entrants would
delay or cancel their projects. Over some period, the supply and demand for
capacity would return to equilibrium and might go beyond equilibrium to
shortage. The posited continual overbuild is not plausible for more than a brief
period. Thus we consider this
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sensitivity analysis to be a useful stress test for energy prices, but not a
credible capacity scenario.
Table 6-4
PJM West/Central Average
All-In Prices
(1996 $)/1
Low Demand
Base Case High Gas Case Growth Case
- --------------------------------------------------------------------------------
2001 $27.28 $28.25 $27.28
2002 $27.70 $28.59 $27.70
2003 $26.66 $27.28 $26.66
2004 $27.65 $28.32 $27.65
2005 $26.90 $27.84 $26.90
2006 $27.21 $28.24 $27.21
2007 $27.36 $28.24 $27.36
2008 $27.96 $28.67 $27.96
2009 $27.77 $28.43 $27.77
2010 $28.02 $28.89 $28.02
2011 $28.33 $29.18 $28.33
2012 $27.96 $29.18 $27.96
2013 $28.51 $29.38 $28.51
2014 $28.81 $29.81 $28.81
2015 $28.89 $30.08 $28.89
2016 $29.54 $30.40 $29.54
2017 $29.55 $30.39 $29.11
2018 $29.70 $30.36 $29.27
2019 $29.67 $30.98 $29.05
2020 $29.41 $30.56 $28.87
2021 $30.70 $31.79 $29.08
2022 $29.98 $31.17 $28.91
2023 $30.50 $30.94 $29.29
2024 $30.68 $31.40 $28.76
2025 $31.09 $31.70 $29.05
1 Assumes a 100% capacity factor in calculating the capacity price per
MWh. This assumption has the effect of understating the capacity price;
for capacity factors below 100% the capacity payment per MWh increases.
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6.3 IMPLICATIONS FOR AES IRONWOOD
In this section, we discuss capacity factors (CF)/23, energy prices, and
dispatch for Ironwood under the three cases. As shown in Figure 6-2, in the Base
Case the CF gradually rises from the 85% range to over 90% by 2019. This
improvement in utilization reflects an assumed decreased forced outage rate over
time (this is a typical pattern as units move past the "break-in" period), and
increasing demand for power in PJM in conjunction with unit retirements. During
the early years of operation we would expect Ironwood to be backed-down during
low load periods, such as some Spring and Fall weekends and some evening
periods. As load increases the number of backdown periods declines and operation
of the plant is more continuous.
Figure 6-2
AES Ironwood Capacity Factors
[GRAPHIC OMITTED]
- ----------
23 The capacity factor represents how fully used the plant is in a
specific year. It is the ratio of total MWh produced to the total MWh
the plant could have produced if fully utilized every hour of the year
(i.e., 8760 hours).
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The sawtooth pattern in the figure reflects the impact of maintenance outages.
Major maintenance outages take place every six years with less significant
outages at three-year intervals.
Even in the Low Demand Growth Case the capacity factors remain above 90% during
three of the first four years of the merchant tail. In the High Gas Price Case
dispatch is degraded and the capacity factors are under 85% for the early years
of operation. However, as PJM load grows the dispatch of the plant steadily
improves and by the merchant tail is closely tracking the Base Case. In short,
demand growth combined with unit retirements creates a "floor" that stabilizes
the utilization of the Project during the merchant tail.
Simultaneous with its high utilization, the Ironwood plant achieves an average
energy price for its power that is higher than the time weighted PJM market
price for energy (a result shown in Figure 6-3 for the Base Case). AES Ironwood
will receive this higher energy price during the merchant period. (The
discussion that follows deals only with energy prices and does not cover
capacity revenues, which are discussed above.) The reasons the Ironwood plant
receives higher than average energy prices are (i) the plant is not dispatched
in the lowest price hours; (ii) the plant's planned outages are scheduled during
low price periods; iii) ramping from and to shutdown occurs predominantly in low
priced hours; and (iv) compensation is received for negative cycle costs./24
Excluding the lowest priced hours and including reimbursement for the negative
cycle costs raises the average price received by the plant above the PJM
average.
- ----------
24 Negative cycle costs are costs incurred in excess of revenues at times
when a unit is dispatched by the ISO to provide spinning reserve,
transmission system support, or some other service, or is kept on due
to minimum up-time or other constraints or ISO decisions. PJM rules
currently provide for make-whole payments to compensate generators for
negative cycle costs, and this procedure is expected to continue.
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Figure 6-3
Ironwood's Energy Revenue vs PJM's
Average Energy Price 1996$
Base Case
[GRAPHIC OMITTED]
The plant's economics are such that it is inframarginal to (less expensive than)
much coal generation and most other capacity in PJM. Figure 6-4 shows Ironwood's
position on the PJM supply curve for 2002, 2012, and 2022. As new, more
efficient capacity is added over time, Ironwood moves up the supply curve;
however, at the same time the curve is elongated as demand increases. The
overall effect is that Ironwood remains at a favorable point on the supply curve
throughout the study period. The figure illustrates that Ironwood is positioned,
in all years, well below the highest cost coal unit./25 These results are
consistent with the high utilization of the plant shown in Figure 6-2.
- ----------
25 Units positioned below the lowest cost coal unit include nuclear and
hydro. Units positioned above the highest cost coal unit include oil
and gas-fired steam units and combustion turbines and other peakers.
Note that the supply curves exclude emergency power. Emergency power is
incorporated within the RealTime(TM) model in the estimation of energy
prices.
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Figure 6-4
PJM Supply Curves (1996 $/MWh)
2002
[OBJECT OMITTED]
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Figure 6-4 (cont.)
PJM Supply Curves (1996 $/MWh)
2012
[OBJECT OMITTED]
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2022
[OBJECT OMITTED]
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- --------------------------------------------------------------------------------
CHAPTER 7
Conclusions
Based on our analysis, we believe that the facility's dispatch position on the
supply curve will be highly competitive and well below the highest priced
baseload coal plant during the post-PPA period (and during the term of the power
purchase agreement) due to the facility's high efficiency, low production costs,
and the influence of demand growth in conjunction with unit retirements.
The facility is expected to have an average capacity factor of 90.7% during the
post-PPA period. The addition of new, more efficient gas-fired power generation
facilities in PJM over time will not adversely affect the facility's dispatch.
Even in the two macroeconomic "downside sensitivity" cases of low demand growth
and high gas prices, the Facility's average capacity factor remains
significantly high at 89.6% during the post-PPA period.
During the term of the power purchase agreement, the economics of the Project
are not sensitive to fuel prices because the costs of fuel are the
responsibility of the power purchaser under the power purchase agreement's fuel
tolling provisions.
In summary, the economics of Ironwood appear to be robust. We cannot, of course,
account for all possible circumstances in the energy and fuel markets. What this
study does indicate is that given the operating parameters, costs, and other
modeling assumptions, and for a range of scenarios which provide a significant
test to the economics of the Project, the AES Ironwood project is financially
viable.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers
Section 18-108 of the Delaware Limited Liability Company Act provides
that subject to the standards and restrictions, if any, as are described in its
limited liability company agreement, a limited liability company may, and will
have the power to, indemnify and hold harmless any member or manager or other
person from and against any and all claims and demands whatsoever.
Section 4.2 of our Limited Liability Company Agreement provides that we
will indemnify to the fullest extent permitted by the laws of the State of
Delaware, as from time to time in effect, the Directors and Officers of our
company.
Item 21. Exhibits and Financial Statement Schedules
Exhibit
Number Description
3* Amended and Restated Limited Liability Company Agreement, dated as of
October 4, 1999, by AES Ironwood, L.L.C.
4.1* Indenture and the First Supplemental Indenture, dated as of June 1,
1999, by and among AES Ironwood, L.L.C., the Trustee and the Depositary
Bank.
4.2* Collateral Agency and Intercreditor Agreement, dated as of June 1,
1999, by and among AES Ironwood, L.L.C., the Trustee, the Collateral
Agent, the Debt Service Reserve Letter of Credit Provider, the
Construction Period Letter of Credit Provider and the Depositary Bank.
4.3* Debt Service Reserve Letter of Credit and Reimbursement Agreement,
dated as of June 1, 1999, by and among AES Ironwood, L.L.C., the Debt
Service Reserve Letter of Credit Provider and the Banks named therein.
4.4* Construction Period Letter of Credit and the Reimbursement Agreement,
dated as of June 1, 1999, by and among AES Ironwood, L.L.C., the
Construction Period Letter of Credit Provider and the Banks named
therein.
4.5* Global Bonds, dated June 25, 1999, evidencing 8.857% Senior Secured
Bonds of AES Ironwood, L.L.C. due 2025 in the principal amount of
$308,500,000.
4.6* Equity Subscription Agreement, dated as of June 1, 1999, by and among
AES Ironwood, L.L.C., AES Ironwood, Inc. and the Collateral Agent.
4.7* Security Agreement, dated as of June 1, 1999, by and between AES
Ironwood, L.L.C. and the Collateral Agent.
4.8* Pledge and Security Agreement, dated as of June 1, 1999, by and between
AES Ironwood, Inc. and the Collateral Agent.
4.9* Consent to Assignment, dated as of June 1, 1999, by and between
Williams Energy and the Collateral Agent, and consented to by AES
Ironwood, L.L.C.
4.10* Consent to Assignment, dated as of June 1, 1999, by and between The
Williams Companies, Inc. and AES Ironwood, L.L.C., and consented to by
AES Ironwood, L.L.C.
II-1
<PAGE>
4.11* Consent to Assignment, dated as of June 1, 1999, by and between Siemens
Westinghouse and the Collateral Agent, and consented to by AES
Ironwood, L.L.C. (with respect to the Construction Agreement).
4.12* Consent to Assignment, dated as of June 1, 1999, by and between Siemens
Westinghouse and the Collateral Agent and consented to by AES Ironwood,
L.L.C. (with respect to the Maintenance Services Agreement).
4.13* Consent to Assignment, dated as of June 1, 1999, by and between Siemens
Corporation and the Collateral Agent, and consented to by AES Ironwood,
L.L.C.
4.14* Consent to Assignment, dated as of June 1, 1999, by and between AES
Prescott and the Collateral Agent, and consented to by AES Ironwood,
L.L.C.
4.15* Consent to Assignment, dated as of June 1, 1999, by and between
Metropolitan Edison d/b/a GPU Energy and the Collateral Agent, and
consented to by AES Ironwood, L.L.C.
4.16* Consent to Assignment, dated as of June 1, 1999, by and between City of
Lebanon Authority and the Collateral Agent, and consented to by AES
Ironwood, L.L.C.
4.17* Consent to Assignment, dated as of June 1, 1999, by and between Pennsy
Supply and the Collateral Agent, and consented to by AES Ironwood,
L.L.C.
4.18* Assignment and Assumption Agreement, dated June 25, 1999, by and
between AES Ironwood, Inc. and AES Ironwood, L.L.C. (with respect to
the Construction Agreement).
4.19* Assignment and Assumption Agreement, dated June 25, 1999, by and
between AES Ironwood, Inc. and AES Ironwood, L.L.C. (with respect to
the Maintenance Services Agreement).
5** Opinion of Hunton & Williams regarding Legality.
10.1* Guaranty, dated as of February 5, 1999, by and between The Williams
Companies, Inc. and AES Ironwood, L.L.C.
10.2+ Amended and Restated Power Purchase Agreement, dated as of February 5,
1999, and Amendment No. 1 to Amended and Restated Power Purchase
Agreement, dated as of June 18, 1999, between AES Ironwood, L.L.C. and
Williams Energy. (Portions of this exhibit have been omitted pursuant
to a request for confidential treatment.)
10.3+ Engineering, Procurement and Construction Services Agreement, dated as
of September 23, 1998 (the "Construction Agreement"), as amended, by
and between AES Ironwood, L.L.C. and Siemens Westinghouse. (Portions of
this exhibit have been omitted pursuant to a request for confidential
treatment.)
10.4* Guaranty, dated as of September 23, 1998, by and between Siemens
Corporation and AES Ironwood, L.L.C.
10.5+ Maintenance Program Parts, Shop Repairs and Scheduled Outage TFA
Services Contract, dated as of September 23, 1998, and Amendment No. 1
to Maintenance Program Parts, Shop Repairs and Scheduled Outage TFA
Services Contract, dated as of January 13, 1999 (the "Maintenance
Services Agreement"), by and between AES Ironwood, L.L.C. and Siemens
Westinghouse. (Portions of this exhibit have been omitted pursuant to a
request for confidential treatment.)
10.6* Development and Operations Services Agreement, dated as of June 1,
1999, by and between AES Ironwood, L.L.C. and AES Prescott.
II-2
<PAGE>
10.7* Effluent Supply Agreement, dated as of March 3, 1998, by and between
AES Ironwood, L.L.C. and City of Lebanon Authority.
10.8* Generation Facility Transmission Interconnection Agreement, dated as of
March 23, 1999, by and between AES Ironwood, L.L.C. and Metropolitan
Edison d/b/a GPU Energy.
10.9** Agreement Relating to Real Estate, dated as of October 23, 1998, by and
between AES Ironwood, L.L.C. and Pennsy Supply.
10.10** Easements and Right of Access Agreement, dated as of April 15, 1999, by
and between AES Ironwood, L.L.C. and Pennsy Supply.
23.1* Consent of Stone & Webster.
23.2* Consent of Hagler Bailly.
23.3** Consent of Hunton & Williams (contained in Exhibit 5).
23.4+ Consent of Deloitte & Touche LLP.
24* Power-of-Attorney
25* Statement of Eligibility and Qualification on Form T-1 of The Bank of
New York, as successor Trustee under the Indenture.
27* Financial Data Schedule.
99.1* Form of Letter of Transmittal.
99.2* Form of Letter to Clients.
99.3* Form of Letter to Registered Holders and DTC Participants.
99.4* Form of Notice of Guaranteed Delivery.
- -----------------------
+ Filed herewith.
* Previously filed as an Exhibit to AES Ironwood, L.L.C.'s Registration
Statement on Form S-4 (File No. 333- 91391).
** Previously filed as an Exhibit to Amendment No. 1 to AES Ironwood,
L.L.C.'s Registration Statement on Form S-4 (File No. 333-91391).
Item 22. Undertakings
A. The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information described in the registration statement.
Notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the
total dollar value of the securities offered would
not exceed that which was registered) and any
deviation
II-3
<PAGE>
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the
maximum aggregate offering price described in the
"Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
this Registration Statement or any material change to
the information in this Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each the post-effective amendment will
be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of the securities
at that time will be deemed to be the initial bona fide
offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
B. The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
C. The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of
the request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in the documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
D. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission the indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against the liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by the director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether the
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of the issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant has duly caused this amendment to the registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Lebanon, and State of Pennsylvania, on February 28, 2000.
AES IRONWOOD, L.L.C.
By: /s/ John Ruggirello
--------------------
John Ruggirello
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ John Ruggirello President
- --------------------------------
John Ruggirello February 28, 2000
/s/ Barry Sharp Vice President and
- -------------------------------- Chief Financial Officer
Barry Sharp (and principal accounting,
officer) and Director February 28, 2000
/s/ Dennis Bakke Director February 28, 2000
- --------------------------------
Dennis Bakke
/s/ Roger Naill Director February 28, 2000
- --------------------------------
Roger Naill
</TABLE>
<PAGE>
EXHIBIT 10.2
An asterisk ([*]) indicates that confidential information has been
omitted and filed separately with the Securities and Exchange Commission as part
of a Confidential
Treatment Request.
AMENDED AND RESTATED
POWER PURCHASE AGREEMENT
BY AND BETWEEN
AES IRONWOOD, L.L.C.
AND
WILLIAMS ENERGY MARKETING & TRADING COMPANY
Dated: February 5, 1999
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS..........................................................2
SECTION 1.1.................................................................2
ARTICLE II TERM...............................................................13
SECTION 2.1................................................................13
SECTION 2.2................................................................13
ARTICLE III PURCHASE AND SALE OF CAPACITY AND SERVICES........................15
SECTION 3.1................................................................15
SECTION 3.2................................................................15
SECTION 3.3................................................................16
ARTICLE IV FUEL CONVERSION AND OTHER SERVICES.................................16
SECTION 4.1................................................................16
SECTION 4.2................................................................16
SECTION 4.3................................................................17
SECTION 4.4................................................................17
SECTION 4.5................................................................17
SECTION 4.6................................................................18
SECTION 4.7................................................................18
ARTICLE V PRICING.............................................................18
SECTION 5.1................................................................18
SECTION 5.2................................................................19
ARTICLE VI PROJECT DEVELOPMENT................................................19
SECTION 6.1................................................................19
SECTION 6.2................................................................19
SECTION 6.3................................................................19
SECTION 6.4................................................................20
ARTICLE VII INITIAL START-UP TESTING; COMMERCIAL OPERATION....................20
SECTION 7.1................................................................20
SECTION 7.2................................................................20
ARTICLE VIII INTERCONNECTION AND METERING EQUIPMENT...........................21
SECTION 8.1................................................................21
SECTION 8.2................................................................21
SECTION 8.3................................................................22
SECTION 8.4................................................................22
SECTION 8.5................................................................22
ARTICLE IX OPERATION; DISPATCH................................................23
SECTION 9.1................................................................23
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TABLE OF CONTENTS
Page
----
SECTION 9.2................................................................23
SECTION 9.3................................................................23
SECTION 9.4................................................................24
SECTION 9.5................................................................24
SECTION 9.6................................................................25
SECTION 9.7................................................................26
SECTION 9.8................................................................26
SECTION 9.9................................................................26
ARTICLE X MAINTENANCE.........................................................26
SECTION 10.1...............................................................26
SECTION 10.2...............................................................27
SECTION 10.3...............................................................27
SECTION 10.4...............................................................27
SECTION 10.5...............................................................28
ARTICLE XI METERING, BILLING, PAYMENT AND TAXES...............................29
SECTION 11.1...............................................................29
SECTION 11.2...............................................................29
SECTION 11.3...............................................................31
SECTION 11.4...............................................................32
SECTION 11.5...............................................................32
SECTION 11.6...............................................................32
SECTION 11.7...............................................................33
SECTION 11.8...............................................................33
ARTICLE XII DISPUTE RESOLUTION................................................34
SECTION 12.1...............................................................34
SECTION 12.2...............................................................36
SECTION 12.3...............................................................36
SECTION 12.4...............................................................38
ARTICLE XIII REPRESENTATIONS, WARRANTIES AND COVENANTS........................38
SECTION 13.1...............................................................38
SECTION 13.2...............................................................39
ARTICLE XIV LIABILITY; DEDICATION.............................................39
SECTION 14.1...............................................................39
SECTION 14.2...............................................................39
SECTION 14.3...............................................................40
ARTICLE XV INDEMNITY..........................................................40
SECTION 15.1...............................................................40
SECTION 15.2...............................................................41
SECTION 15.3...............................................................41
SECTION 15.4...............................................................41
ii
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE XVI INSURANCE.........................................................42
SECTION 16.1...............................................................42
SECTION 16.2...............................................................42
SECTION 16.3...............................................................43
SECTION 16.4...............................................................43
SECTION 16.5...............................................................43
SECTION 16.6...............................................................44
SECTION 16.7...............................................................44
SECTION 16.8...............................................................44
ARTICLE XVII FORCE MAJEURE....................................................45
SECTION 17.1...............................................................45
SECTION 17.2...............................................................46
SECTION 17.3...............................................................47
SECTION 17.4...............................................................47
ARTICLE XVIII EVENTS OF DEFAULT; TERMINATION; REMEDIES........................47
SECTION 18.1...............................................................47
SECTION 18.2...............................................................49
ARTICLE XIX SECURITY..........................................................50
SECTION 19.1...............................................................50
SECTION 19.2...............................................................50
SECTION 19.3...............................................................51
ARTICLE XX SEVERAL OBLIGATIONS................................................52
SECTION 20.1...............................................................52
ARTICLE XXI WAIVER............................................................52
SECTION 21.1...............................................................52
ARTICLE XXII ASSIGNMENT.......................................................53
SECTION 22.1...............................................................53
SECTION 22.2...............................................................53
SECTION 22.3...............................................................54
SECTION 22.4...............................................................54
SECTION 22.5...............................................................54
ARTICLE XXIII NOTICES.........................................................54
SECTION 23.1...............................................................54
SECTION 23.2...............................................................55
ARTICLE XXIV GRATUITIES.......................................................55
SECTION 24.1...............................................................55
ARTICLE XXV CAPTIONS..........................................................55
iii
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Page
----
SECTION 25.1...............................................................55
ARTICLE XXVI CHOICE OF LAWS...................................................56
SECTION 26.1...............................................................56
ARTICLE XXVII MISCELLANEOUS PROVISIONS........................................56
SECTION 27.1...............................................................56
SECTION 27.2...............................................................57
SECTION 27.3...............................................................57
SECTION 27.4...............................................................57
SECTION 27.5...............................................................57
SECTION 27.6...............................................................57
ARTICLE XXVIII SUCCESSORS AND ASSIGNS.........................................58
SECTION 28.1...............................................................58
ARTICLE XXIX COUNTERPARTS.....................................................58
SECTION 29.1...............................................................58
ARTICLE XXX ENTIRE AGREEMENT; SEVERABILITY; AMENDMENT.........................58
SECTION 30.1...............................................................58
SECTION 30.2...............................................................59
SECTION 30.3...............................................................59
iv
<PAGE>
TABLE OF APPENDICES
1. Pricing
2. Confidentiality Letter
3. Exempt Wholesale Generator Certification
4. A. Preliminary single-line diagram showing Gas and Oil Delivery
Points
B. Preliminary single-line diagram showing Electric Delivery Point
5. Form of Guaranty of The AES Corporation
6. Form of Guaranty of Williams Holdings of Delaware, Inc.
7. List of Third Party Engineers
8. Fuel Oil Specifications
i
<PAGE>
AMENDED AND RESTATED
POWER PURCHASE AGREEMENT
THIS AMENDED AND RESTATED POWER PURCHASE AGREEMENT (together with the
Appendices hereto, this "Agreement"), dated as of February 5, 1999, by and
between AES Ironwood, L.L.C., a Delaware limited liability company ("Seller"),
and Williams Energy Marketing & Trading Company, a corporation organized and
existing under the laws of the State of Delaware ("Williams"), (Seller and
Williams hereinafter referred to individually as a "Party" and collectively as
the "Parties").
WITNESSETH:
WHEREAS, Williams is engaged in the purchase and resale of electric
energy, capacity and ancillary services; and
WHEREAS, Seller will own, operate and maintain the Facility (as
hereinafter defined) to be located at the Site (as hereinafter defined); and
WHEREAS, Seller proposes to qualify the Facility as an Exempt Wholesale
Generator ("EWG") under the applicable rules of the Federal Energy Regulatory
Commission ("FERC"); and
WHEREAS, Williams intends to deliver fuel to the Facility in accordance
with this Agreement; and
WHEREAS, Seller desires to sell and Williams desires to purchase
Facility Capacity (as hereinafter defined), Ancillary Services (as hereinafter
defined) and Fuel Conversion Services (as hereinafter defined) under the terms
and conditions hereinafter set forth; and
WHEREAS, on July 31, 1997, the Parties entered into a Power Purchase
Agreement with respect to the purchase by Williams' predecessor in interest,
Williams Energy Service Company, of certain capacity, fuel conversion services
and excess energy from the Facility (the "Original PPA") not purchased from the
Facility by GPU (as hereinafter defined) pursuant to the terms of the GPU PPA's
(as hereinafter defined); and
WHEREAS, on October 24, 1997, the Parties entered into Amendment No. 1
to the Original PPA ("Amendment No. 1"); and
WHEREAS, on November 21, 1997, the Parties entered into a letter
agreement (the "Letter Agreement") concerning certain revisions to be made to
the Original PPA as amended by Amendment No. 1; and
1
<PAGE>
WHEREAS, on December 15, 1998, the Parties entered into a subsequent
letter agreement ("Second Letter Agreement") concerning the desire of the
Parties to amend and restate the Original PPA in the event that the GPU PPA's
were terminated; and
WHEREAS, the GPU PPA's have been terminated and the Parties desire to
amend and restate the Original PPA in order to incorporate certain of the
revisions made by Amendment No. 1, the Letter Agreement and the Second Letter
Agreement and certain other revisions mutually agreed to by the Parties.
NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth below, the Parties hereto, intending to be legally bound, hereby
covenant, promise and agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1
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 I shall have the definitions
contained elsewhere herein, including the Appendices hereto.
"Accepted Electrical Practices" - those 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 exercise of reasonable judgment in light of the facts known at the
time a decision is made, that could have been expected to accomplish a desired
result at reasonable cost consistent with good business practices, reliability,
safety and expedition. Accepted Electrical Practices are not intended to be
limited to the optimum practices, methods or acts to the exclusion of others,
but rather to those practices, methods and acts generally accepted or approved
by a significant portion of the electric utility industry in the relevant
region, during the relevant time period, as described in the immediately
preceding sentence.
"Affiliate" - with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise.
2
<PAGE>
"Allocated Shutdown Duration" - the length of time immediately
following an Ending Requested Dispatch Hour agreed to between the Parties as the
expected duration under normal Facility conditions for the Facility to achieve
Shutdown conditions following a Facility Dispatch Period. Such period of time
will be set initially based on equipment manufacturer's guidelines, which shall
be provided by Seller to Williams promptly after receipt by Seller of such
guidelines from the manufacturer but in any event no later than the Commercial
Operation Date, and revised by the Parties after the first Contract Year to
reflect actual operating experience.
"Allocated Start-Up Duration" - the time period required by Seller to
permit a Cold Start, Warm Start or Hot Start of the Facility as Scheduled for a
Dispatch Period under normal Facility equipment conditions. Such period of time
will be set initially based on equipment manufacturer's guidelines, which shall
be provided by Seller to Williams promptly after receipt by Seller of such
guidelines from the manufacturer but in any event no later than the Commercial
Operation Date, and revised by the Parties after the first Contract Year to
reflect actual operating experience.
"Ancillary Services" - those services which the Facility is capable of
providing that are defined or described as "Ancillary Services" in the PJM Open
Access Transmission Tariff then currently in effect and on file at FERC or, in
the event such PJM tariff does not exist, then those services to the extent
commonly sold or saleable (or used or usable) in the electric power generation
or transmission industry within the PJM market from time to time.
"Anticipated Commercial Operation Date" - has the meaning given such
term in Section 2.2.
"Automatic Regulation" - the capability of a Unit to increase or
decrease automatically the megawatt output from a set point in response to a
control signal from a remote operations center.
"Beginning Requested Dispatch Hour" - the first clock hour during which
the Facility is Scheduled to deliver Net Electric Energy and/or Ancillary
Services during a Dispatch
Period.
"Billing Month" - except for the first such month under this Agreement,
one-twelfth (1/12) of a year, or the period of approximately thirty (30) Days
between two (2) regular consecutive readings of the Host Utility's electric
meter or meters, but not less than twenty-six (26) Days and not more than
thirty-five (35) Days.
"Btu" - the quantity of heat required to raise the temperature of one
pound of water one degree Fahrenheit at or near its point of maximum density
(39.1 degrees Fahrenheit).
"Business Day" - any Day on which Federal Reserve member banks in New
York, New York are open for business.
3
<PAGE>
"Cold Start" - a start of a Unit in Combined Cycle Mode given that all
of the breakers of that Unit's combustion turbine generator have been open for
at least the previous [*] hours.
"Combined Cycle Mode" - the simultaneous operation of a combustion
turbine(s), heat recovery steam generator(s) and steam turbine for the purpose
of producing Net Electric Energy.
"Commercial Operation Date" - the Day on which (i) the Initial Start-Up
Testing of the Facility has been successfully completed to the satisfaction of
Seller and Williams has received written notice thereof from Seller, (ii) Seller
has received all approvals, to the extent any are required, from PJM in order to
sell capacity into or through the PJM market, and (iii) Seller has obtained all
required permits and authorizations for operation of the Facility.
"Contract Anniversary Date" - the last Day of the month in which the
Commercial Operation Date occurs and each succeeding anniversary of such Day
throughout the Term of this Agreement.
"Contract Year" - the twelve months ending on the Contract Anniversary
Date of each year except for the first Contract Year which shall also include
any portion of the month between the Commercial Operation Date and the end of
the month in which the Commercial Operation Date occurs.
"Day" - a period of twenty-four (24) consecutive hours, beginning at
12:01 a.m. local time.
"Dispatch" - the act of directing a Unit or the Facility to generate
Net Electric Energy and/or Ancillary Services.
"Dispatch Notice" - a notice delivered to Seller by or on behalf of
Williams directing the Dispatch of the Facility for a specific Dispatch Period
and effective until the delivery of a subsequent Dispatch Notice in a form to be
agreed to by the Parties no later than twelve (12) months after the Execution
Date, provided that when such notice is given telephonically it shall be
promptly confirmed in writing by facsimile or electronic transmission.
"Dispatch Operation" - the operation of the Facility at the direction
of Williams.
"Dispatch Period" - a period of time during which Williams has
requested delivery of Net Electric Energy and/or the provision of Ancillary
Services starting with a Beginning Requested Dispatch Hour and concluding with
an Ending Requested Dispatch Hour. A Dispatch Period may continue for more than
one calendar Day.
"Early Shutdown Notice" - a notice provided by Williams to Seller
during a Dispatch Period requesting an earlier Ending Requested Dispatch Hour of
a Unit or the Facility than that
4
<PAGE>
specified in the Dispatch Notice which commenced such Dispatch Period, provided
that such earlier Ending Requested Dispatch Hour shall not be any sooner than
one (1) hour after receipt by Seller of such Early Shutdown Notice.
"Electric Delivery Point" - the physical point set forth on Appendix
4.B at which Net Electric Energy and/or Ancillary Services are delivered and
measured.
"Electric Metering Equipment" - electric meters and associated
equipment, which shall be owned by the Host Utility and operated and maintained
in accordance with the Interconnection Agreement, including, without limitation,
metering transformers and meters for measuring kilowatt-hours and reactive
volt-ampere hours, utilized in determining the amount of Net Electric Energy
and/or Ancillary Services delivered by Seller to the Electric Delivery Point
under this Agreement.
"Emergency(ies)" - a condition(s) or situation(s) which the Host
Utility, PJM or Seller reasonably deems imminently likely to endanger life or
property including the Facility; or imminently likely to impair or adversely
affect, the Host Utility's electrical system or the electrical systems of others
to which the Host Utility's electrical system is directly or indirectly
connected. Such a condition or situation may include, but is not limited to, a
forced outage of the Host Utility's electrical system, potential overloading of
the Host Utility's transmission and/or distribution circuits, unusual operating
conditions on either the Host Utility's or Seller's electrical system or
conditions such that the Host Utility is unable to accept Net Electric Energy
from the Facility without jeopardizing the Facility, the Host Utility's
electrical system or the electrical systems of others to which the Host
Utility's electrical system is directly or indirectly connected.
"Ending Requested Dispatch Hour" - the last clock hour during which the
Facility is Scheduled to deliver Net Electric Energy or Ancillary Services
during a Dispatch Period.
"Energy Market Clearing Price" - the hourly clearing price (exclusive
of capacity) for sales to the PJM energy market at the Electric Delivery Point;
provided that in the event PJM ceases to provide an independent value for
installed capacity, an adjustment will be made by the Parties to maintain, to
the extent possible, the original value of this Agreement to both Williams and
Seller.
"Environmental Law" - any applicable federal, state, local or other
governmental legal requirement governing or relating to (i) the environment,
(ii) releases or threatened releases of Hazardous Materials including, without
limitation, investigations, monitoring and abatement of such releases, and (iii)
the manufacture, handling, transport, use, treatment, storage or disposal of
Hazardous Materials or materials containing Hazardous Materials.
"Execution Date" - the date set forth in the preamble to this
Agreement.
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"Expansion Capacity" - has the meaning given such term in
Section 3.1.
"Facility" - the combined cycle electric generating facility with a
design electric generating capacity of approximately 655 MW (+/- 10%) at
92(degree) F when firing on Natural Gas and approximately 604 MW (+/- 10%) at
92(degree) F when firing on Fuel Oil and consisting of two (2) 501G combustion
turbines, two (2) heat recovery steam generators and one (1) steam turbine, with
evaporative cooling on the inlet air flow, together with all of the parts,
instruments, appurtenances, accessories and other property that may be installed
in or attached to or otherwise become part of such facility.
"Facility Capacity" - the actual total net MW capability of the
Facility measured at the Electric Delivery Point (excluding the incremental
capacity associated with power augmentation in the event that power augmentation
is implemented at the Facility pursuant to Section 3.3 of this Agreement) when
operating on Natural Gas in Combined Cycle Mode at 92(degree) Fahrenheit ambient
air temperature as established during Initial Start-Up Testing of the Facility
and as demonstrated pursuant to Section 9.6 and as adjusted accordingly.
"FERC" - the Federal Energy Regulatory Commission or any successor
agency thereto.
"Final CO Date" - has the meaning given such term in Section 2.2(c).
"First Paid Extension Option" - has the meaning given such term in
Section 2.2(a).
"Force Majeure" - an event or occurrence beyond the reasonable control
of and without the fault or negligence of the Party claiming Force Majeure,
including, but not limited to, acts of God, strike, flood, earthquake, storm,
fire, lightning, epidemic, war, riot, civil disturbance, freezing of pipelines,
sabotage, acts of the public enemy, explosion, the inability of Seller to obtain
from GPU Energy, Inc., or its appropriate Affiliate, the Interconnection
Agreement, the inability of Williams to obtain from a transporter a commercially
reasonable gas transportation agreement or, in the event that no such agreement
can be obtained by Williams, to obtain necessary approvals, permits or
authorizations for Williams or an Affiliate to construct the required Gas
Facilities, change in law or applicable regulation subsequent to the date hereof
and action, delay or inaction by any federal, state or local legislative,
executive, administrative or judicial agency or body, including without
limitation any failure to issue, or delay in issuance of, any required permit or
authorization, which, in any of the foregoing cases, by exercise of due
diligence such Party could not reasonably have been expected to avoid, and which
wholly or in substantial part prevents such Party from performing an obligation
under this Agreement.
"Forced Outage" - a "Generator Forced Outage" as defined in the PJM
Agreement. Forced Outages include:
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o "Total Forced Outage" - during periods other than Planned
Outages or Maintenance Outages, the Facility is unable to
engage in Dispatch Operation, or the Facility is declared by
Seller to be in a Total Forced Outage for what would otherwise
be a Partial Forced Outage.
o "Partial Forced Outage" - during periods other than Planned
Outages or Maintenance Outages, the Facility is partially able
to engage in Dispatch Operation, and has not been declared by
Seller to be in a Total Forced Outage.
"Free Extension Option" - has the meaning given such term in Section
2.2(a).
"Fuel Conversion Services" - Seller's operation of the Facility in
Combined Cycle Mode to combust Natural Gas and/or Fuel Oil in order to generate
Net Electric Energy and/or Ancillary Services.
"Fuel Conversion Volume Rebate" - has the meaning given such term in
Section 11.3(a).
"Fuel Delivery Points" - the Gas Delivery Point and Oil Delivery Point,
collectively.
"Fuel Oil" - fuel oil meeting the "Jet A" quality specifications set
forth in Appendix 8.
"Fuel Plan" - the plan delivered by Williams to Seller in accordance
with paragraph C. of the Second Letter Agreement.
"Fully Available" - any time the Facility is not in a Forced Outage,
Maintenance Outage or Planned Outage.
"Gas Delivery Point" - each of the physical point(s) identified on
Appendix 4.A at which Natural Gas is delivered and measured.
"Gas Interconnection Facilities" - has the meaning given such term in
Section 4.2.
"Gas Metering Equipment" - gas meters and associated equipment utilized
in determining (i) the amount of Natural Gas delivered to Seller by Williams
under this Agreement, and (ii) the amount of Natural Gas consumed by the
Facility.
"GDPIPD" - the annual Gross Domestic Product Implicit Price Deflator as
reported by the United States Department of Commerce, Bureau of Economic
Analysis monthly in the Survey of Current Business (Index base 1992 = 100).
"GPU" - Metropolitan Edison Company, Pennsylvania Electric Company and
Jersey Central Power and Light Company, collectively doing business as GPU
Energy, Inc., and their Affiliates.
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"GPU PPA's" - the power purchase agreements dated February 3, 1997 by
and between Seller or its Affiliates and GPU, as filed at the PAPUC on June 16,
1997.
"Guaranty Amount" - has the meaning given such term in Section 19.2.
"Hazardous Materials" - (i) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing polychlorinated biphenyls ("PCBs") and any other
chemicals, materials or substances which are now or hereafter become defined as
or included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous wastes", "restricted hazardous
wastes", "toxic substances" or "toxic pollutants" under, or are regulated or
become regulated as such by Environmental Laws, including but not limited to the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. ss. 9601 et seq.); the Hazardous Material Transportation
Act, as amended (42 U.S.C ss. 1801 et seq.); the Resource Conservation and
Recovery Act, as amended (42 U.S.C. ss. 6901 et seq.); the Toxic Substances
Control Act, as amended (15 U.S.C. ss. 2601); the Clean Air Act, as amended (42
U.S.C ss. 7401 et seq.); the Federal Water Pollution Control Act, as amended (33
U.S.C. ss. 1251 et seq.); or in the regulations promulgated pursuant to said
laws.
"Heat Rate" - the amount of energy expressed in Btu's per net kWh in
higher heating value ("HHV").
"Heat Rate Target" - [*] Btu per kWh (HHV) while operating on Natural
Gas in Combined Cycle Mode at Temperature Adjusted Facility Capacity.
"HHV" - higher heating value.
"Holdings" - has the meaning given such term in Section 19.3.
"Host Utility" - the owner of the electrical system to which the
Facility is interconnected by the Interconnection Facilities.
"Hot Start" - a start of a Unit in Combined Cycle Mode given that all
of the breakers of that Unit's combustion turbine generator have been open for
no more than eight (8) hours.
"Imbalance Charges" - has the meaning given such term in Section V.E.
of Appendix 1.
"Initial Start-Up Testing" - Seller's operation and testing of the
Facility prior to the Commercial Operation Date, including performance tests, to
determine, among other things, the operating characteristics of the Facility,
the Facility Capacity and the Facility's ability to meet
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Seller's obligations pursuant to this Agreement; provided that any transmission
costs associated with Initial Start-Up Testing shall be paid by Seller.
"Interconnect Delay" - has the meaning given such term in Section
2.2(a).
"Interconnection Agreement" - has the meaning given such term in
Section 8.2.
"Interconnection Facilities" - all structures, facilities, equipment,
auxiliary equipment, devices and apparatus including the Protective Apparatus
directly or indirectly required and installed to interconnect and deliver Net
Electric Energy and Ancillary Services from the Facility to the Electric
Delivery Point including, but not limited to, electric transmission and/or
distribution lines, transformation, switching, Electric Metering Equipment, any
other metering equipment, communications, and safety equipment, including, but
not limited to, equipment required to protect (i) the Host Utility's electrical
system and its customers from faults occurring at the Facility, and (ii) the
Facility from faults occurring on the Host Utility's electrical system or on the
electrical systems of others to which the Host Utility's electrical system is
directly or indirectly connected.
"Investment Grade" - means a rating in one of the four highest
categories (without regard to subcategories within such rating categories) by
Standard & Poor's or Moody's.
"kW" - kilowatt.
"kWh" - kilowatt-hour.
"Late Payment Interest Rate" - shall mean the Prime Rate plus one (1)
percent per annum.
"Lender" - any financial institution, Person, bondholder or noteholder
which provides debt or equity capital, loans, credit or credit support, acts as
counterparty on any interest rate or currency hedging arrangements or provides
other financing to Seller in respect of the acquisition, ownership,
construction, operation or maintenance of the Facility; such term also includes
any such financial institution, Person, bondholder or noteholder which acts in
the capacity of "Lender" in connection with any refinancing by Seller of its
then outstanding debt obligation.
"Loss" - has the meaning given such term in Section 15.1.
"Maintenance Outage" - a "Generator Maintenance Outage" as defined in
the PJM Agreement.
"Major Maintenance Reserve Account" - has the meaning given such term
in Section 11.3(b).
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"Moody's" - Moody's Investors Services, Inc., and its successors.
"MW" - megawatt.
"MWh" - megawatt-hour.
"Natural Gas" - merchantable natural gas that meets the quality
specifications set forth in the applicable transporter's tariff or, if
applicable, the applicable transportation agreement entered into by Williams and
a transporter for the purpose of effecting deliveries of Natural Gas pursuant to
this Agreement; provided that Williams shall use its commercially reasonable
efforts to cause the transporter to deliver Natural Gas to the Gas Delivery
Point at a pressure equal to the pressure on the Texas Eastern pipeline
provided, however, that Williams shall not have the obligation to install, or
pay for installation of, any compressors to ensure such pressure.
"Net Electric Energy" - the gross amount of electric energy generated
by the Facility at Williams' direction, less station service requirements and
any transformation and transmission line losses to the Electric Delivery Point
and delivered by Seller to the Host Utility's electric system at the Electric
Delivery Point.
"New Taxes" - means (i) any Taxes or modifications therein enacted and
effective after the Execution Date, including, without limitation, that portion
of any Taxes or New Taxes that constitutes an increase in the rate thereof (but
excluding an increase in the value of the base upon or from which computed), or
(ii) any law, order, rule or regulation, or interpretation thereof, enacted and
effective after the Execution Date resulting in application of any Taxes to a
new or different class of Persons.
"Non-Dispatch Payment" - has the meaning given such term in Section
11.3(a).
"Oil Delivery Point" - the physical point identified on Appendix 4.A.
at which Fuel Oil is delivered and measured.
"Oil Metering Equipment" - oil meters and associated equipment utilized
in determining (i) the amount of Fuel Oil delivered to Seller by Williams under
this Agreement, and (ii) the amount of Fuel Oil consumed by the Facility.
"Operating Hour" - a clock hour (or part thereof) within a Dispatch
Period during which the Facility is providing Net Electric Energy and/or
Ancillary Services.
"PA Information" - has the meaning given such term in Section 3.3.
"PAPUC" - the Pennsylvania Public Utility Commission or any successor
agency thereto.
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"Partially Available" - has the meaning given such term in Section V.D.
of Appendix 1.
"Person" - any individual, corporation, limited liability company,
partnership, limited partnership, trust, association or other entity.
"PJM" - the PJM Interconnection, L.L.C., acting in accordance with the
PJM Agreement or the applicable successor entity.
"PJM Agreement" - that certain Amended and Restated Operating Agreement
of PJM Interconnection, L.L.C., dated as of June 2, 1997, and applicable PJM
operating policies, as further amended, revised or superseded from time to time.
"Planned Outage" - a "Generator Planned Outage" as defined in the PJM
Agreement.
"Position Notice" - has the meaning given such term in Section 12.1(a).
"Power Factor" - the ratio of real power expressed in watts to apparent
power expressed in volt-amperes.
"Prime Rate" - the prime commercial lending rate announced by Citibank,
N.A., as in effect from time to time.
"Protective Apparatus" - such equipment and apparatus on Seller's side
of the Electric Delivery Point, including, but not limited to, protective
relays, circuit breakers and the like, necessary or appropriate to isolate the
Facility from the Host Utility's electrical system consistent with Accepted
Electrical Practices.
"Protective Gas Apparatus" - such equipment and apparatus on Seller's
side of the Gas Delivery Point necessary to maintain the safety of the Facility
consistent with standard gas industry practices.
"Rating Agency" - Standard & Poor's, Moody's and each other credit
rating agency from which Seller seeks to obtain a rating on the debt it acquires
to finance the construction of the Facility.
"Schedule or Scheduled" - the act of Williams, Seller and the Host
Utility notifying, requesting and confirming to each other the quantity of
Ancillary Services and/or Net Electric Energy to be delivered hereunder in any
given hour.
"Second Paid Extension Option" - has the meaning given such term in
Section 2.2(c).
"Shutdown" - an actual shutdown of a Unit, as evidenced by the opening
of its combustion turbine's breaker, or the Facility, as evidenced by the
opening of all of its breakers, immediately
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following the Ending Requested Dispatch Hour of a Dispatch Period or pursuant to
an Early Shutdown Notice.
"Site" - the location of the Facility in South Lebanon Township,
Lebanon County, Pennsylvania.
"Standard & Poor's" - Standard & Poor's Rating Group, a division of the
McGraw-Hill Companies, Inc., and its successors.
"Start-Up" - a Successful Start-Up of the Facility or a Unit necessary
to comply with the Schedule or request by Williams for a Dispatch Period for the
Facility immediately preceding a Beginning Requested Dispatch Hour.
"Start-Up Notification Lead Time" - means at least [*].
"Start-Up Testing Date" - has the meaning given such term in Section
4.2.
"Successful Start-Up" - a Facility or Unit Start-Up at Williams
direction that results in the [*] for a period of time equal to the [*]
whichever is less.
"Taxes" - means any or all federal, state and/or local, municipal, ad
valorem, property, occupation, severance, generation, first use, conversion, Btu
or power, transmission, utility, gross receipts, privilege, sales, use,
consumption, excise, lease, transaction, and other taxes, governmental charges,
license fees, permit fees, assessments, or increases in or interest on or
penalties relating to any of the foregoing, other than taxes based on net income
or net worth.
"Temperature Adjusted Facility Capacity" - the capacity of the Facility
to generate Net Electric Energy at any particular temperature measured at the
gas turbine inlet between -20 and 100 degrees Fahrenheit corresponding to the
Facility Capacity, and reflecting the effect of temperature on both the Facility
Capacity while in Combined Cycle Mode and the air/gas flow into the combustion
turbine.
"Temperature Adjusted Unit Capacity" - the capacity of a Unit to
generate Net Electric Energy at any particular temperature measured at the gas
turbine inlet between -20 and 100 degrees Fahrenheit corresponding to 47.8
percent of Facility Capacity and reflecting the effect of temperature on both
the Unit Capacity while in Combined Cycle Mode and the air/gas flow into the
combustion turbine.
"Term" - the term of this Agreement commencing on the Execution Date
and continuing for a period of twenty (20) Contract Years after the first
Contract Anniversary Date.
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"Third Party Engineer" - has the meaning given such term in Section
12.1.
"Total Fixed Payment" - has the meaning given such term in Appendix 1.
"Unit" - a single independent combined cycle train, consisting of a
combustion turbine, heat recovery steam generator, and steam turbine generator
operating at partial load (approximately one-half of such generator's electrical
output capability), together with associated equipment.
"Var Support" - the capability of the Facility measured at the Electric
Delivery Point to vary the phase angle of the generators' output and voltage
between a Power Factor of 0.9 leading and a Power Factor of 0.9 lagging, at the
Facility Capacity and as may be more fully described in the Interconnection
Agreement between Seller and the Host Utility.
"Variable O&M Charge" - a charge assessed for each MWh of Net Electric
Energy delivered, as more fully described in Appendix 1.
"Warm Start" - the start of a Unit in Combined Cycle Mode given that
all of the breakers of that Unit's combustion turbine generator have been open
for more than eight (8) hours but less than [*].
ARTICLE II
TERM
SECTION 2.1
The Term of this Agreement shall commence on the Execution Date and
shall continue for a period of twenty (20) Contract Years after the first
Contract Anniversary Date.
SECTION 2.2
(a) Seller shall cause the Commercial Operation Date to occur no later
than June 30, 2001 (the "Anticipated Commercial Operation Date"). If the
Commercial Operation Date has not occurred by June 30, 2001, for any reason
whatsoever, including without limitation the continued existence of, or delay
caused by, a Force Majeure event affecting Seller (other than any delay caused
by a failure by Williams to provide Natural Gas to the Facility pursuant to
Article IV hereunder or by any other act or failure to act by Williams or an
Affiliate of Williams, where such action is required under this Agreement),
Williams shall (notwithstanding anything in this Agreement or otherwise to the
contrary except this Section 2.2(a)) have the absolute right to terminate this
Agreement upon written notice to Seller without any liability or responsibility,
unless Seller shall have demonstrated to Williams' reasonable satisfaction, by
providing an
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opinion to such effect from a third party engineer chosen by Seller from the
list set forth in Appendix 7 to this Agreement, that the Commercial Operation
Date will occur no later than December 31, 2001 or, but for Seller's inability
to execute an Interconnection Agreement with the Host Utility by the date
required to maintain the Facility construction schedule, despite Seller's good
faith commercially reasonable efforts to obtain such agreement (any such delay,
an "Interconnect Delay"), that the Commercial Operation Date would be achieved
by December 31, 2001, in which case Seller's obligation to cause the Commercial
Operation Date to occur shall be extended to December 31, 2001 (the "Free
Extension Option"). In the event the conditions in the preceding sentence are
not satisfied by Seller, Seller shall have the right to extend the Commercial
Operation Date to and including December 31, 2001, by giving Williams written
notice of such extension no later than April 30, 2001, and paying to Williams
the amount of [*] no later than June 30, 2001 (the "First Paid Extension
Option").
(b) In the event Seller qualifies for and elects the Free Extension
Option but the Commercial Operation Date is not achieved by December 31, 2001,
(i) Seller may elect to extend the Commercial Operation Date up to and including
December 31, 2002 by paying Williams the amounts, and in accordance with the
procedures, specified in Section 2.2(c) and (ii) Seller shall pay to Williams
an amount equal to the lesser of (x) [*].
(c) In the event Seller qualifies for the Free Extension Option or
elects the First Paid Extension Option, if the Commercial Operation Date has not
occurred by December 31, 2001, (the "Final CO Date") for any reason whatsoever
(other than as a result of an Interconnect Delay or any act or failure to act by
Williams or an Affiliate of Williams, where such action is required under this
Agreement), including without limitation the continued existence of or delay
caused by a Force Majeure event affecting Seller, Williams shall
(notwithstanding anything contained in this Agreement or otherwise to the
contrary) have the absolute right to terminate this Agreement upon written
notice to Seller without any liability or responsibility, provided, however,
that notwithstanding the preceding provisions of this sentence, Seller shall
have the right to extend the Final CO Date to and including December 31, 2002 by
giving Williams written notice of the estimated extension required no later than
October 31, 2001 and paying to Williams the amount of [*]/Day for each of the
first 60 Days beyond December 31, 2001, [*]/Day for each Day of delay between
and including 61 and 120 Days after December 31, 2001; and [*]/Day for each Day
of delay between and including 121 and 360 Days after December 31, 2001 (the
"Second Paid Extension Option"). At the end of each month during such extension
period Seller
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shall calculate the amounts owed to Williams under the terms of this Section
2.2(c) for such month and shall pay such amounts to Williams within ten (10)
Days after the end of such month.
(d) In the event that Seller elects the Second Paid Extension Option
and the Commercial Operation Date does not occur by December 31, 2002 for any
reason whatsoever (other than as a result of an Interconnect Delay or any act or
failure to act by Williams or an Affiliate of Williams, where such action is
required under this Agreement), including without limitation the continued
existence of or delay caused by a Force Majeure event affecting Seller, Williams
shall (notwithstanding anything contained in this Agreement or otherwise to the
contrary) have the absolute right to terminate this Agreement upon five (5) Days
written notice to Seller without any liability or responsibility.
ARTICLE III
PURCHASE AND SALE OF CAPACITY AND SERVICES
SECTION 3.1
Subject to the terms and conditions set forth in this Agreement, during
the Term, commencing with the Commercial Operation Date, Seller shall sell and
make available to Williams on an exclusive basis, and Williams shall purchase
and pay for, the Facility Capacity and Ancillary Services. In the event that it
is demonstrated during Initial Start-Up Testing, or a subsequent demonstration
of capacity for PJM purposes, that the capacity of the Facility is greater than
720 MW (excluding any power augmentation requested by Williams), this Agreement
and Appendix 1 to this Agreement shall be amended to reflect the sale of such
additional capacity to Williams as mutually agreed to by the Parties. In the
event Seller increases the amount of capacity located on the Site, but such
additional capacity is not part of the Facility (the "Expansion Capacity"),
Seller agrees to negotiate a separate purchase agreement for such Expansion
Capacity with Williams. In the event Seller and Williams cannot mutually agree
to the terms and conditions of such separate purchase agreement within one
hundred twenty (120) Days of Seller's notifying Williams of its intent to
construct such Expansion Capacity, Seller shall have the right to sell such
Expansion Capacity to a third party or parties including into the PJM market.
SECTION 3.2
Subject to the terms and conditions set forth in this Agreement, during
the Term, commencing with the Commercial Operation Date, Seller shall perform
for Williams on an exclusive basis, and Williams shall purchase and pay for,
Fuel Conversion Services.
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SECTION 3.3
Within fifteen (15) Days after the Execution Date, Seller shall deliver
to Williams information with respect to the payments required by Seller
associated with power augmentation (the "PA Information"). At the request of
Williams made by written notice to Seller no later than seven (7) Days after
Seller's delivery to Williams of the PA Information, which notice shall specify
Williams' agreement to such payments, Seller shall exercise its option with its
construction contractor to modify the Facility as necessary to provide for power
augmentation of between [*], provided that Seller's obligations to make such
modifications shall be subject to receipt of all necessary permits and
approvals, including modification of existing Facility air and water permits,
which Seller shall use its commercially reasonable efforts to obtain.
ARTICLE IV
FUEL CONVERSION AND OTHER SERVICES
SECTION 4.1
As instructed by Seller, Williams shall deliver or cause to be
delivered to Seller at the Gas Delivery Point and Oil Delivery Point on an
exclusive basis all quantities of Natural Gas and Fuel Oil, respectively, as
required by Seller (i) to generate Net Electric Energy and/or Ancillary
Services, (ii) to perform Start-Ups, (iii) to perform Shutdowns, and (iv) to
operate the Facility during any period other than a Start-Up, Shutdown or
Dispatch Period for any reason. Williams shall at all times retain title to all
quantities of Natural Gas and Fuel Oil delivered pursuant to clauses (i) - (iii)
of this Section 4.1, and title to Natural Gas and Fuel Oil delivered pursuant to
clause (iv) of this Section 4.1 shall transfer to Seller at the Gas Delivery
Point and Oil Delivery Point, respectively.
SECTION 4.2
Williams shall be responsible for the construction of all Natural Gas
interconnection and delivery facilities necessary for delivery of Natural Gas up
to and including the Gas Delivery Point (including the Gas Metering Equipment
but excluding compressors ("Gas Interconnection Facilities") and shall use all
commercially reasonable efforts to expeditiously construct or contract for the
expeditious construction of such Gas Interconnection Facilities in order to make
Natural Gas available to Seller at the Gas Delivery Point no later than
two-hundred eighty (280) Days prior to the Anticipated Commercial Operation
Date. In the event that such Gas Interconnection Facilities have not been
constructed and/or Williams is unable for any reason to deliver Natural Gas to
the Facility by the date that the Facility would otherwise be prepared to
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begin Initial Start-Up Testing (the "Start-Up Testing Date"), and but for the
failure to provide such Natural Gas the Facility is otherwise ready, or would
otherwise have been ready, to begin such testing (as reasonably determined by a
Third Party Engineer chosen in accordance with the provisions of this
Agreement), then Williams shall commence making payments to Seller during each
Day of such delay beginning on the Start-Up Testing Date and continuing until
the date that Natural Gas is delivered to the Facility for Initial Start-Up
Testing, in an amount equal to one-thirtieth of the applicable Total Fixed
Payment (assuming a Facility Capacity of 655 MW). Upon the expiration of this
Agreement or any termination of this Agreement as the result of a Williams'
event of default thereunder, Seller shall have the right to purchase the Gas
Interconnection Facilities from Williams, free and clear of all liens and
encumbrances, for an amount equal to the depreciated net book value of such Gas
Interconnection Facilities, or in the event that Williams does not own such Gas
Interconnection Facilities, Williams shall assign to Seller all of its rights to
transportation services using such Gas Interconnection Facilities, free and
clear of any obligations of Williams to the transportation services provider
incurred or arising prior to the date of such assignment.
SECTION 4.3
Williams shall be responsible for the cost of procurement and
installation of the Oil Metering Equipment. Except as provided in Section 4.4,
Williams shall be solely responsible for all costs and expenses related to the
supply and transportation of Natural Gas and Fuel Oil to the Gas Delivery Point
and Oil Delivery Point, respectively. Except as provided in Section 4.4, Seller
shall be responsible for all costs and expenses related to the transportation of
Natural Gas and Fuel Oil at and from the Gas Delivery Point and Oil Delivery
Point to the Facility.
SECTION 4.4
At the request of Seller, instead of delivering Fuel Oil to the
applicable Oil Delivery Point, Williams shall deliver or cause to be delivered
such quantities of Fuel Oil as requested by Seller to any off-site storage
facility approved by Williams and delivery thereto shall be deemed delivery to
the Oil Delivery Point. Williams shall be responsible for all costs and expenses
related to the delivery of Fuel Oil to the off-site storage facility. Seller
shall be responsible for all costs and expenses related to the transportation of
such delivered Fuel Oil from the off-site storage facility to the Facility.
SECTION 4.5
Seller shall be responsible for the installation, operation and
maintenance at the Site, at Seller's sole cost and expense, of Fuel Oil storage
tank(s) with reasonable offloading capability to be mutually agreed to by the
Parties (to the extent consistent with Seller's environmental and other permits)
and capable of storing a volume of usable Fuel Oil sufficient to operate the
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Facility at maximum Facility Capacity output for two (2) continuous Days;
provided that Williams shall be responsible for the cost of maintenance of the
Fuel Oil inventory in such tank(s), including the cost of all necessary fuel
additives. Seller shall periodically test such tank(s) and notify Williams when
any action is necessary to maintain Fuel Oil in the storage tank(s) in
compliance with the specifications set forth in Appendix 8 to this Agreement.
Seller shall be reimbursed by Williams for Seller's reasonable costs and
expenses incurred pursuant to the immediately preceding sentence.
SECTION 4.6
Seller shall not be obligated to operate the Facility on Fuel Oil for
more than the Operating Hour equivalent of thirty-one (31) Days per year.
SECTION 4.7
Seller agrees to provide reasonable access to the Site to Williams
and/or its contractors and gas transportation providers for the purpose of their
construction of the Gas Interconnection Facilities and to take such other action
as may be reasonable necessary for such facilities to be constructed and
connected to the Facility.
ARTICLE V
PRICING
SECTION 5.1
Beginning with the date of initial delivery of Net Electric Energy from
Seller to Williams and up to the Commercial Operation Date, and during any
period when there is a demonstration of Facility Capacity pursuant to Section
9.6 hereof during a period other than a Dispatch Period, or any other Facility
test operation during a period other than a Dispatch Period, Williams will sell
to Seller the Natural Gas delivered pursuant to Section 4.1(iv) [*] and Seller
will sell at the Electric Delivery Point any available Net Electric Energy to
Williams at ninety (90) percent of the Energy Market Clearing Price.
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SECTION 5.2
For each month of the Term after the Commercial Operation Date,
Williams shall pay Seller for Facility Capacity, Ancillary Services and Fuel
Conversion Services at the applicable rates set forth in Appendix 1 to this
Agreement.
ARTICLE VI
PROJECT DEVELOPMENT
SECTION 6.1
The Facility shall be located at the Site, provided that in the event
Seller is unable to obtain all required permits and approvals for such Site
within one (1) year after the Execution Date, the Parties shall in good faith
seek to identify a mutually agreeable alternative site within the PJM region to
be acquired by Seller as a location for the Facility and provided further that
if such alternate site is not agreed to by the Parties within an additional one
(1) year period, this Agreement will terminate with no further liability to
either Party.
SECTION 6.2
Seller shall furnish to Williams, for information purposes only,
updated quarterly (on a calendar year basis) schedules and status reports
showing and describing the progress of the engineering, permitting, purchasing
and construction of the Facility. The receipt and/or review by Williams of any
such schedules submitted by Seller shall not be asserted or construed by Seller
at any time to be (i) Williams' endorsement or approval of the schedules, (ii)
Williams' endorsement or approval of the design of the Facility or its
appurtenant equipment (iii) Williams' assumption of any responsibility for the
Facility or its appurtenant equipment and/or (iv) any waiver of any obligation
of Seller under this Agreement. Williams shall furnish Seller with updated
quarterly (on a calendar year basis) schedule and station reports showing and
describing the progress of the engineering, permitting and construction of the
Gas Interconnection Facilities. The updated schedules and reports provided by
the Parties pursuant to this Section 6.2 shall include, in reasonably sufficient
detail, explanations of any delays in meeting scheduled dates for commencement
or completion of any listed item.
SECTION 6.3
Seller shall provide to Williams not later than ten (10) Days after the
completion of Initial Start-Up Testing, pertinent written data substantiating
the Facility's capability to provide Facility Capacity. Seller shall provide to
Williams no later than thirty (30) Days prior to the Commercial Operation Date
written data based on design calculations depicting the Facility's Temperature
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Adjusted Facility Capacity and Temperature Adjusted Unit Capacity as a function
of temperature between -20 and 100 degrees Fahrenheit, to the extent such
information is reasonably available from the Facility equipment manufacturer for
such range. Such written data shall be adjusted by the Parties, as necessary,
based upon actual performance of the Facility during normal operations
subsequent to the Commercial Operation Date.
SECTION 6.4
Seller shall, at its own cost and expense, obtain as and when required
all approvals, permits, licenses and other authorizations from governmental
authorities as may be required for it to construct, operate and maintain the
Facility, the Interconnection Facilities and Protective Gas Apparatus and to
perform its obligations hereunder and, during the term hereof, Seller shall
obtain all such additional governmental approvals, permits, licenses and
authorizations as may be required with respect to the Facility as soon as
practicable.
ARTICLE VII
INITIAL START-UP TESTING; COMMERCIAL OPERATION
SECTION 7.1
Seller shall provide to Williams (i) written notice, at least thirty
(30) Days in advance, of the expected Commercial Operation Date, and (ii) a copy
of the notice of Commercial Operation within five (5) Days after the Commercial
Operation Date. Williams shall have the right to be present at Initial Start-Up
Testing of the Facility.
SECTION 7.2
The receipt and/or review by Williams of any plans or specifications
submitted by Seller under this Agreement shall not be asserted or construed by
Seller at any time to be (i) Williams' endorsement or approval of the design of
the Facility or its appurtenant equipment, (ii) Williams' assumption of any
responsibility for the Facility or its appurtenant equipment and/or (iii) any
waiver of any obligation of Seller under this Agreement.
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ARTICLE VIII
INTERCONNECTION AND METERING EQUIPMENT
SECTION 8.1
At its sole cost and expense, Seller shall own and design, construct,
install and maintain, or be responsible for the design, construction,
installation and maintenance of the Facility, the Interconnection Facilities and
Protective Gas Apparatus needed to generate and deliver Net Electric Energy
and/or Ancillary Services to the Electric Delivery Point in order to fulfill its
obligations as specified herein, including all Interconnection Facilities and
Protective Gas Apparatus that may be located at any switchyard and/or substation
to be built at the Facility. Not later than ninety (90) Days after the Execution
Date, Seller shall prepare and submit to Williams a preliminary one-line
interconnection diagram depicting the Electric Delivery Point, which diagram
shall be incorporated by reference herein as Appendix 4.B. The Facility,
Interconnection Facilities and Protective Gas Apparatus shall be designed,
constructed and completed in a good and workmanlike manner and in accordance
with Accepted Electrical Practices (with respect to the Facility and
Interconnection Facilities) or in accordance with standard gas industry
practices (with respect to Protective Gas Apparatus), such that the expected
useful life of the Facility, the Interconnection Facilities and Protective Gas
Apparatus shall be not less than the Term of this Agreement.
SECTION 8.2
Seller shall be solely responsible for the negotiation and execution of
an interconnection agreement with the Host Utility (the "Interconnection
Agreement") pursuant to which the Host Utility will own and be responsible for
the Electric Metering Equipment and the design, installation, construction and
maintenance of the electrical facilities and protective apparatus, including any
transmission equipment and related facilities, necessary to interconnect the
Host Utility's electrical system with the Facility at the Electric Delivery
Point. Seller shall provide Williams with a copy of the Interconnection
Agreement no later than thirty (30) Days after the execution of such agreement
with the Host Utility. Williams shall reimburse Seller for the reasonable Host
Utility costs (i.e., transmission facility upgrades, Host Utility protective
apparatus and other equipment, Host Utility electric meters, and Host Utility
costs for PJM and other required interconnection related studies) incurred, or
to be reimbursed, by Seller under the Interconnection Agreement up to a maximum
amount of [*]; provided that Seller shall use its commercially reasonable
efforts to limit its cost reimbursement obligations under the Interconnection
Agreement to the lowest feasible levels. Seller shall use commercially
reasonable efforts to include in such Interconnection Agreement provisions
allowing Seller and Williams to receive electronic signals from the Electric
Metering Equipment.
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In the event that Seller is not able to include such provisions in the
Interconnection Agreement, Seller shall install back-up electric meters with
such capability and Williams shall reimburse Seller for the reasonable costs of
such meters.
SECTION 8.3
Williams shall be responsible for the installation, maintenance and
testing of the Gas Metering Equipment (to the extent not otherwise installed,
maintained and tested by the supplier of gas transportation services) and Oil
Metering Equipment, as reasonably approved by Seller. Williams and Seller shall
have the right to receive electronic signals from each such meters to the extent
commercially feasible.
SECTION 8.4
All Electric Metering Equipment, Gas Metering Equipment and Oil
Metering Equipment, whether owned by Seller or by a third party, shall be
operated, maintained and tested in accordance with Accepted Electrical
Practices, in the case of the Electric Metering Equipment, and in accordance
with applicable industry standards, in the case of the Gas Metering Equipment
and Oil Metering Equipment.
SECTION 8.5
Williams at its sole cost and expense shall inspect and calibrate, or
cause to be inspected and calibrated, all Gas Metering Equipment and Oil
Metering Equipment periodically, but not less frequently than annually. In
addition, either Party from time to time with reasonable advance notice to the
other Party may request that the Gas Metering Equipment and/or Oil Metering
Equipment be tested. When any test shall show a measurement error of more than
(i) in the case of Gas Metering Equipment, two percent (2%) or such lower
percentage as may be established by applicable tariff, or (ii) in the case of
Oil Metering Equipment, two percent (2%), correction shall be made for the
period during which the measurement instruments were in error, first, by using
the registration of Seller's check meter, if installed and registering
accurately; if no check meter is installed and registering accurately, or if the
period cannot be ascertained, correction shall be made for one-half (1/2) of the
period elapsed since the date of the last test of such meter; and such meter
shall be adjusted immediately to measure accurately. In the event that any test
requested by a Party pursuant to the second sentence of this Section 8.5 shows a
measurement error as set forth above, the owner of the tested equipment shall
pay for such test and calibration. In the event that no such error is shown, the
Party requesting such test shall pay for such test.
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ARTICLE IX
OPERATION; DISPATCH
SECTION 9.1
The Facility, the Interconnection Facilities and the Protective Gas
Apparatus shall be operated in accordance with Accepted Electrical Practices and
applicable requirements and guidelines reasonably adopted by the Host Utility
from time to time and applied consistently to the Host Utility's electric
generating facilities (with respect to the Facility and Interconnection
Facilities) or in accordance with standard gas industry practices (with respect
to Protective Gas Apparatus). In the event of a conflict between the terms and
conditions of this Agreement and Host Utility requirements, the Host Utility
requirements shall control.
SECTION 9.2
Seller shall operate the Facility in parallel with the Host Utility's
electrical system with governor control and the Net Electric Energy to be
delivered by Seller under this Agreement shall be three-phase, 60 hertz,
alternating current at a nominal voltage acceptable to the Host Utility at the
Electric Delivery Point, shall not adversely affect the voltage, frequency,
waveshape or Power Factor of power at the Electric Delivery Point and shall be
delivered to the Electric Delivery Point in a manner acceptable to the Host
Utility.
SECTION 9.3
(a) Notwithstanding anything contained in this Agreement to the
contrary, the Host Utility shall have the right to require Seller to disconnect
the Facility from the Host Utility's electrical system (or otherwise curtail,
interrupt or reduce deliveries of Net Electric Energy) whenever the Host Utility
reasonably determines that such a disconnection, curtailment, interruption or
reduction is necessary to facilitate construction, installation, maintenance,
repair, replacement or inspection of any of the Host Utility's or Seller's
facilities or equipment; to maintain the safety and reliability of the Host
Utility's electrical system; or due to Emergencies, Forced Outages, potential
overloading of the Host Utility's transmission and/or distribution circuits or
Force Majeure. When the Host Utility disconnects the Facility for any of the
reasons described above, Williams shall not be responsible for any costs
incurred by Seller due to such disconnection. Notwithstanding any other
provision of this Agreement to the contrary, Williams shall, in the event the
Facility has been disconnected for any of the reasons described above, continue
to be obligated to make Total Fixed Payments pursuant to Appendix 1 of this
Agreement (assuming that the Facility Capacity would have been the same during
such period as it was during the last Dispatch Period prior to such
disconnection in which the entire Facility was
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Dispatched unless immediately prior to such disconnection the Facility
was in a Partial or Total Forced Outage in which event the Facility Capacity
for purposes of this provision shall reflect such outage) until the later of (a)
twenty-four (24) hours after the occurrence of such disconnection of the
Facility by the Host Utility or (b) for so long as Williams is, or could be,
able to sell such Facility Capacity into the PJM market or through PJM to a
third party, but in the case of this clause (b) Williams shall only be required
to pay Seller the amount PJM does, or would be willing to, pay Williams for such
Facility Capacity, or to the extent Williams can demonstrate to Seller's
reasonable satisfaction receipt by a third party of a lessor amount for such
Facility Capacity, then such lessor amount; provided, however, that a failure
of Williams (or a purchaser of the Facility Capacity from Williams) to have or
to maintain any transmission service necessary for the Facility Capacity to be
sold into or through PJM or a third party shall not limit Williams' obligations
to make Total Fixed Payments under this Agreement.
(b) Seller shall use commercially reasonable efforts to correct
promptly any condition at the Facility which necessitates the disconnection of
the Facility from the Host Utility's electrical system or the reduction,
curtailment or interruption of electrical output of the Facility.
SECTION 9.4
(a) When Dispatched by Williams, Seller shall operate the Facility and
each Unit with Automatic Regulation equipment in service.
(b) Seller shall provide to Williams response rates greater than the 5
MW/minute minimum criteria for Automatic Regulation, when such faster response
rates are within the equipment supplier's operating guidelines and the Facility
control systems are technically sufficient for such faster response rates.
(c) Automatic Regulation limits for the Facility shall be established
during Initial Start-Up Testing and shall be consistent with manufacturer's
recommendations.
SECTION 9.5
(a) Williams shall at all times have the exclusive right to utilize the
Net Electric Energy and Ancillary Services associated with the Temperature
Adjusted Facility Capacity, subject to the terms and conditions specified
herein.
(b) Williams shall have the exclusive right to Schedule the operation
of the Facility or a Unit in accordance with the provisions of this Agreement;
provided, however, that such scheduling shall be consistent with the design
limitations of the Facility, applicable law, regulations and permits, and
manufacturers' reasonable recommendations for operating limits with respect to
the Facility and major components thereof.
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(c) Williams, in the absence of an Emergency, shall not Schedule a
Dispatch Period of less than eight (8) hours unless the Facility was operated
(or was requested to so operate) within the twelve (12) hours prior to the
requested Dispatch Period.
(d) When a Dispatch Period will involve a Start-Up of the Facility,
Williams shall provide Seller, in the absence of an Emergency, with at least the
advance notice of a Dispatch Period consistent with the Start-Up Notification
Lead Time and such Dispatch Period shall begin after the applicable Allocated
Start-Up Duration. When a Dispatch Period, including revisions to a previously
Scheduled Dispatch Period, does not involve a Start-Up of the Facility,
Williams, in the absence of an Emergency, shall provide Seller, with at least
sixty (60) minutes advance notice of such Dispatch Period or revised Dispatch
Period.
(e) At any time the Facility or a Unit is in a Dispatch Period, the
Facility or such Unit shall be run at Temperature Adjusted Facility Capacity or
Temperature Adjusted Unit Capacity as the case may be, and Williams shall take
all of the Net Electric Energy, provided that the Host Utility is capable of
accepting such Net Electric Energy.
(f) Seller shall no later than [*] after Seller's receipt of a Dispatch
Notice notify Williams of the Facility's expected availability during the
Dispatch Period identified in such Dispatch Notice. To the extent Seller does
not notify Williams within such [*] period, the Facility shall be deemed Fully
Available.
SECTION 9.6
During Initial Start-Up Testing and up to two times each year
thereafter, Seller shall demonstrate, in accordance with the then-applicable
criteria of PJM (or the most recent such criteria if current PJM criteria no
longer exist), applicable generally to independent power and utility generating
facilities in PJM of similar technology, the capability of the Facility to
produce and maintain, as required for such demonstration, the Facility Capacity.
The demonstration of Facility Capacity shall be scheduled by Seller and
consistent with PJM requirements. Seller shall be responsible for all costs it
incurs in connection with the demonstration of Facility Capacity; provided,
however, that Seller shall have no obligation to obtain or maintain any
transmission service beyond the Electric Delivery Point that may be required for
such demonstration of Facility Capacity, such transmission service being the
sole responsibility of Williams for purposes of this Agreement.
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SECTION 9.7
Williams shall have no right to require operation of the Facility
except in Combined Cycle Mode, unless otherwise mutually agreed to by the
Parties.
SECTION 9.8
The Facility shall be capable of being Scheduled for operation on
either Natural Gas or Fuel Oil and if the Facility is capable of switching fuel
during a Dispatch Period Williams may in its discretion (subject to the
availability of such fuel from Williams) direct Seller to switch such fuel.
Seller shall be responsible for licensing and permitting the Facility to allow
it to operate on Fuel Oil for at least the Operating Hour equivalent of [*] Days
per Contract Year with the total output equivalent to twenty-four (24) hour per
Day operation at Facility Capacity unless these standards cannot be satisfied in
a commercially reasonable manner or Seller's permits as issued do not allow such
operation.
SECTION 9.9
In the event Seller or an Affiliate does not directly operate the
Facility, Seller shall, prior to the Commercial Operation Date, enter into, and
during the Term hereof shall maintain in effect, an agreement with a reputable
firm or firms providing for the operation and maintenance of the Facility
pursuant to the terms and conditions of this Agreement at all times during the
Term of this Agreement. The choice of such firm by Seller shall be subject to
the prior review and acceptance by Williams which acceptance shall not be
unreasonably withheld or delayed; provided that it shall not be unreasonable for
Williams to withhold such acceptance if such operator is a FERC authorized power
marketer or an Affiliate of such an entity. Seller shall provide Williams with a
copy of such agreement and all amendments and supplements thereto promptly after
execution thereof.
ARTICLE X
MAINTENANCE
SECTION 10.1
(a) At all times during the Term of this Agreement, Seller shall, at
its sole cost and expense, maintain the Facility, the Protective Gas Apparatus,
and, consistent with the terms of the Interconnection Agreement, the
Interconnection Facilities. Said maintenance shall be performed in accordance
with Accepted Electrical Practices (with respect to the Facility and
Interconnection Facilities) and with standard gas industry practices (with
respect to Protective Gas Apparatus) and manufacturers' recommended maintenance
procedures.
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SECTION 10.2
Seller shall furnish to Williams, in writing, by no later than each
February 15 following the Commercial Operation Date, a certificate together with
supporting documentation demonstrating that Seller has performed or caused to be
performed during the prior year all (i) manufacturer-recommended maintenance and
testing of the Interconnection Facilities and Protective Gas Apparatus and (ii)
maintenance of the Facility necessary for conformance with Accepted Electrical
Practices. Seller shall provide Williams with at least thirty (30) Days prior
written notice of any test of the Interconnection Facilities and Protective Gas
Apparatus and, to extent consistent with the terms of the Interconnection
Agreement, Williams personnel or its representatives may observe such testing.
SECTION 10.3
(a) Seller shall keep and maintain accurate and complete records for
the Facility, including such information regarding operation and maintenance of
the Facility and all associated equipment as is appropriate and consistent with
Accepted Electrical Practices and standard gas industry practices. Seller shall
make such records available to Williams for inspection and copying from time to
time as Williams may reasonably request.
(b) Seller shall maintain and classify outage statistics for the
Facility in accordance with outage classification procedures adopted by PJM and
shall supply such statistics to Williams upon Williams' reasonable request.
SECTION 10.4
(a) Williams shall furnish to Seller by the date which is three (3)
months prior to the Anticipated Commercial Operation Date and by November 1 of
each year following the Commercial Operation Date a forecast of the Dispatch of
the Facility for the following three (3) calendar years in order to provide
Seller with planning information to support Seller's scheduling of Planned
Outages. Williams shall provide updates to the forecast in a timely manner if
Williams' expectations of Facility Dispatch are revised.
(b) Seller shall furnish Williams with an annual forecast no later than
December 15 of each year, or such other time as may be necessary to be
consistent with regional reliability planning procedures, setting forth the
expected dates and anticipated duration of each Planned Outage for the
succeeding thirty-six (36) months. Seller and Williams shall mutually agree on
the scheduling of all Planned Outages. Any requested revision to a schedule for
a previously approved Planned Outage or a need for a Planned Outage which arises
after a submission of the most recent annual forecast shall be submitted by
either Party to the other as soon as reasonably practicable, but in no event
less than [*] in advance of the Planned Outage, provided however, that the [*}
advance notice requirement for the request shall be waived if the Facility
becomes
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unavailable due to a Force Majeure event within the [*] immediately preceding
the Planned Outage. The non-requesting Party shall approve or reject said
request within ten (10) Days of its receipt and, if it rejects said request
shall propose an alternate schedule with dates as close in time as practicable
to the dates originally proposed. Except as set forth in the last sentence of
this Section 10.4(b), neither Party shall unreasonably withhold or delay its
approval of any requested revision(s) to the previously established Planned
Outage schedule. Any reasonable costs associated with a change requested by
Williams to the previously established Planned Outage schedule shall be agreed
to and allocated by the Parties at the time of Seller's consideration of
Williams' requested change. Planned major maintenance shall normally be
scheduled as a Planned Outage. Williams shall have no right to require Seller to
change the time of a previously scheduled Planned Outage if, in the reasonable
judgment of Seller, said change is imminently likely to cause significant
physical damage to the Facility and/or appurtenant equipment.
(c) Seller shall notify Williams of Seller's intent to remove the
Facility from service for maintenance and its intent to return the Facility to
service following the completion of maintenance. Seller shall coordinate the
scheduling of all Maintenance Outages with Williams.
(d) Seller shall also notify Williams as soon as possible concerning
the cause and anticipated duration of any Maintenance Outage or Forced Outage.
SECTION 10.5
Seller shall have full and complete responsibility for and control over
maintenance of the Facility, the Interconnection Facilities and Protective Gas
Apparatus except for the Parties' rights to test Electric Metering Equipment,
Gas Metering Equipment and Oil Metering Equipment.
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ARTICLE XI
METERING, BILLING, PAYMENT AND TAXES
SECTION 11.1
Net Electric Energy delivered by Seller to Williams shall be metered at
the Electric Delivery Point, using the Host Utility's Electric Metering
Equipment on an hour-by-hour basis, or such shorter intervals as may be
necessary to implement this Agreement, are technically feasible using such
metering equipment, and are agreed to by the Host Utility. It is the assumption
of the Parties that the Host Utility will agree to own the electric meters at
the Electric Delivery Point and to provide the necessary metering services. In
the event the Host Utility elects not to do so, the Parties will amend this
Agreement to reflect that Williams shall own the electric meters at the Electric
Delivery Point and shall provide the necessary metering services, provided,
however, that Seller shall have the right to install check meters for auditing
purposes.
SECTION 11.2
(a) Seller shall provide to Williams a monthly statement using the Host
Utility's meters, or back-up Electric Metering Equipment installed by Seller in
the event that the Host Utility's electric meters are not functional, not later
than thirty (30) calendar Days after the end of each Billing Month, unless such
thirtieth (30th) Day is not a Business Day. If such thirtieth (30th) Day is not
a Business Day, Seller shall provide the statement on the next succeeding
Business Day. Such statement shall set forth the amount of Net Electric Energy
delivered by Seller to Williams in each hour and Seller's computation of the
amount due from Williams to Seller and such other amounts as may then be due and
payable by Williams to Seller hereunder. Williams shall pay Seller the net
amount shown to be due to Seller on the monthly statement by wire transfer to an
account specified by Seller not later than ten (10) calendar Days following
Williams' receipt of the monthly statement, unless such tenth (10th) Day is not
a Business Day. If such tenth (10th) Day is not a Business Day, Williams shall
render payment on the next Business Day. All said payments shall be deemed to be
made when such wire transfer is received by Seller. Overdue payments shall
accrue interest from, and including, the due date to, but excluding, the date of
payment at the Late Payment Interest Rate. If either Party, in good faith,
disputes a monthly statement, such Party shall provide to the other Party a
written explanation of the basis for the dispute and shall make payment of the
portion of such monthly statement not disputed no later than the due date. To
the extent any disputed amount is later determined to be properly due and
payable, it shall be paid within ten (10) Days of such determination, together
with interest accrued at the Late Payment Interest Rate from the due date to the
date payment is made, if made within ten (10) Days of such determination, and if
not paid within ten (10) Days of such determination, together with interest
accrued after such ten (10)
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Days period to the date payment is made at the Late Payment Interest Rate plus
one (1) percent per annum. If a Party does not receive written notice of an
objection by the other Party to a monthly statement within ninety (90) days of
receipt thereof by such Party, such monthly statement shall be deemed conclusive
and binding absent manifest error.
(b) In the event adjustments or corrections to monthly statements are
required as a result of inaccurate Electric Metering Equipment, Gas Metering
Equipment or Oil Metering Equipment or other errors in computation or billing,
the Parties shall promptly recompute amounts due from or to each other hereunder
during the period of inaccuracy and otherwise correct any errors in such monthly
statement. If the total amount, as recomputed, due from a Party for the period
of inaccuracy varies from the total amount due as previously computed, the
payment of the previously computed amount has been made, the difference shall be
paid to the Party entitled to it within ten (10) Days after correction of the
erroneous invoice(s).
(c) Each Party has the right, at its sole expense, upon reasonable
notice and during normal working hours, to examine the records of the other
Party to the extent reasonably necessary to verify the accuracy of any
statement, charge or computation made pursuant to this Agreement. If requested,
a Party shall provide to the other Party statements evidencing the amounts of
Net Electric Energy or the quantities of Natural Gas or Fuel Oil delivered at
the Fuel Delivery Point. If any such examination reveals any inaccuracy in any
statement, the necessary adjustments in such statement and the payments thereof
will be promptly made and shall bear interest calculated at the Late Payment
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 two
years from the rendition thereof; and provided further that this Section 11.2(c)
will survive any termination of the Agreement for a period of two (2) years from
the date of such termination for the purpose of such statement and payment
objections.
(d) Seller shall give reasonable notice to Williams of the time when
any Electric Metering Equipment test or back-up Electric Metering Equipment test
shall take place, and Williams may have representatives present during such
test(s). To the extent practicable, Seller shall provide at least twenty-four
(24) hours notice to Williams prior to any test it or the Host Utility may
perform on any Electric Metering Equipment or back-up electric metering
equipment.
(e) If the Host Utility Electric Metering Equipment fails to register,
or if the measurement made by said meter during a test varies by more than
one-half percent (0.5%) (i.e., varies by more than one-half percent (0.5%)
either above or below the measurement made by the standard meter used in the
test), an adjustment in payments to Seller or credits to Williams shall be made
utilizing the back-up electric meter provided it meets the 0.5% accuracy
requirement stated above, for the actual period during which inaccurate
measurements were made if the
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period can be reasonably determined or, if the period of the inaccuracy cannot
be reasonably determined, for no more than one-half the period since the last
meter test.
(f) If, at any time, both the primary and back-up Electric Metering
Equipment fail to register, or the registration thereof becomes so erratic as to
be meaningless (i.e., the recording of the measurement is obviously in error),
the Net Electric Energy delivered to Williams shall be determined from the best
information available, including, but not limited to, Seller's additional
electric meters and operator's logs.
SECTION 11.3
(a) Williams shall be entitled (i) to an annual Fuel Conversion
Volume Rebate ("FCVR"), calculated by Seller in accordance with Section II.A.3.
of Appendix 1 to this Agreement, and (ii) Non-Dispatch Payments, to the extent
such payments are due, as defined in and calculated by Seller in accordance with
Section V.E of Appendix 1 to this Agreement. [*] FCVR payments shall be paid to
Williams within [*] Days after the end of the Contract Year in which such
payments have been earned and Non-Dispatch Payments shall be paid to Williams
within [*] Days after the end of the month on which a payment obligation arises.
FCVR payments and any Non-Dispatch Payments owed to Williams and not paid when
due shall be paid, together with interest thereon at the Late Payment Interest
Rate, immediately when funds become available to Seller and [*]. Seller
represents and warrants that its financing documents will contain provisions
that give effect to the foregoing provisions, and Seller covenants that none of
such provisions in its financing documents will be amended, modified, waived or
terminated without the prior written consent of Williams.
(b) [*]
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SECTION 11.4
Except as otherwise specified in this Agreement, including Appendix 1
hereto, each Party shall have the right to set off against any and all amounts
owed by it under this Agreement past due amounts owed to it under this Agreement
by the other Party.
SECTION 11.5
The Parties shall each keep and maintain accurate and detailed records
relating to the delivery of Net Electric Energy made under this Agreement, and
the Facility's fuel consumption for a period of not less than two (2) years,
unless a longer period is required by law, regulation or PJM policy. Such
records shall be made available for inspection by either Party or any
governmental agency having jurisdiction with respect thereto during normal
business hours upon reasonable notice.
SECTION 11.6
(a) Seller shall cooperate in the maintenance and testing of all Gas
Metering Equipment owned by Williams or third parties and Oil Metering Equipment
owned by Williams or third parties as may be required to implement this
Agreement. All Gas Metering Equipment and Oil Metering Equipment owned by Seller
used to support billing under this Agreement shall be operated, maintained and
tested by and/or on behalf of Seller in accordance with applicable industry
standards. If, at any time, any Gas Metering Equipment and Oil Metering
Equipment is out of service or fails to register, or the registration thereof
becomes manifestly erroneous, the quantity of fuel delivered to the Facility
shall be determined:
(i) by using the registration of any check meter(s) if
installed and accurately registering or, in the absence of said check
meter(s),
(ii) by correcting the error or the percentage of error if
ascertainable by calibration, test or mathematical calculation or, in
the absence of this subparagraph and subparagraph (i) above,
(iii) by estimating the quantity of receipts and deliveries
during periods under similar conditions when the meter was registering
accurately.
(b) Each Party shall have the right to be present at the time of
installing, reading, cleaning, changing, repairing, inspecting, testing,
calibrating or adjusting performed in connection with Gas Metering Equipment and
Oil Metering Equipment involved in billing and used in measuring or checking the
measurement of receipts and deliveries, including any Gas Metering Equipment and
Oil Metering Equipment involving the accurate measurement of the Natural Gas or
Fuel Oil delivered to the Facility. The records from such Gas Metering Equipment
and Oil
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Metering Equipment shall be the property of Seller, but upon reasonable advance
notice, Seller shall make available to Williams its records and charts relating
to the Gas Metering Equipment and Oil Metering Equipment, together with
calculations therefrom, for inspection and verification.
SECTION 11.7
Any costs of Seller required to be reimbursed by Williams pursuant to
this Agreement, unless otherwise provided for in Appendix 1 to this Agreement,
shall be reimbursed to Seller by Williams no later than thirty (30) Days after
Seller provides to Williams an invoice with respect to such costs, together with
reasonable supporting information.
SECTION 11.8
(a) The payments by Williams to Seller do not include reimbursement
for, and Williams is liable for and shall pay, cause to be paid, or reimburse
Seller if Seller has paid, all Taxes imposed on or with respect to Natural Gas
or Fuel Oil or the use or consumption or transportation thereof (other than any
of such Taxes for which Seller is liable under Section 11.9(b)) or on Net
Electric Energy or the use and consumption thereof after the Electric Delivery
Point. Williams shall indemnify, defend and hold harmless Seller from any
liability for such Taxes.
(b) The payments by Williams to Seller include full reimbursement for,
and Seller shall be liable for and shall pay, or cause to be paid, or reimburse
Williams if Williams has paid, all Taxes, except as provided in Sections 11.8(a)
or 11.8(d), applicable to the sale of Facility Capacity and Ancillary Services,
payments made to Seller in respect of the performance of Fuel Conversion
Services, or otherwise relating to or arising out of this Agreement or the
transactions contemplated hereby, including all Taxes imposed on or with respect
to the Facilities, the operation or control thereof, electric energy associated
therewith and Natural Gas to which Seller takes title pursuant to Section
4.1(iv). If Williams is required to remit any Tax for which Seller is
responsible, the amount shall be deducted from any sums due to Seller. Seller
shall indemnify, defend and hold harmless Williams from any liability for such
Taxes.
(c) Either Party, upon written request of the other, shall provide a
certificate of exemption or other reasonably satisfactory evidence of exemption
if either Party is exempt from any Taxes, and shall use all reasonable efforts
to obtain or maintain, or to enable the other Party to obtain or maintain, any
exemption from or reduction of any Tax, whether currently available or becoming
available in the future. Without limiting the generality of the foregoing, the
Parties agree that, if beneficial to the efforts of either Party to obtain or
maintain any exemption from or reduction of any Tax, whether currently available
or becoming available in the future, the Parties will cooperate to restructure
the transactions contemplated by this Agreement so as to enable either Party to
obtain or maintain such exemption or reduction, as the case may be; provided,
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however, that any such restructuring shall not affect adversely the economic
interests of either Party under this Agreement.
(d) (i) Notwithstanding any other provision of this Agreement to the
contrary, if (A) a New Tax is imposed and Williams or Seller would be
responsible for such New Tax and (B) such New Tax is (x) [*].
(ii) If a New Tax is imposed and the Parties shall disagree as to
whether such New Tax is described in Section 11.8(d)(i)(B)(x), on the one hand,
or Section 11.8(d)(i)(B)(y), on the other, or if such New Tax is not described
in either such clause, the characterization of such New Tax under Section
11.8(d)(i)(B)(x) or 11.8(d)(i)(B)(y) or the allocation of responsibility for
such New Tax to one of, or between, the Parties shall be determined pursuant to
Section 12.3. The arbitrators selected pursuant to such section, in selecting
the proposal most fairly resolving the Parties' disagreement, shall
do so by selecting the proposal most fairly resolving the question consistent
with the principles of this Section 11.8.
ARTICLE XII
DISPUTE RESOLUTION
SECTION 12.1
(a) If Seller and Williams are in dispute with respect to any matter
addressed in Sections 2.2, 4.2, Article X, Section 11.2 or 11.3 and Seller and
Williams do not resolve the dispute within seven (7) Days of Seller or Williams
notifying the other Party in writing of the existence of such dispute, a
committee consisting of two officers of Seller and two officers of Williams
shall meet and attempt in good faith to resolve such dispute. If such committee
does not resolve the dispute within seven (7) Days following their initial
meeting, then a single third party engineer (the "Third Party Engineer") shall
be designated to consider and decide the issues raised by such dispute unless
both Parties determine that further discussions by the committee are merited.
The selection of such Third Party Engineer shall be made from the list of
engineers
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set forth in Appendix 7 hereto (as supplemented or otherwise modified from time
to time pursuant to paragraphs (e) and (f) below). In selecting the Third Party
Engineer, each Party (starting with Seller for the first dispute and alternating
between Seller and Williams for each dispute thereafter) shall alternate in
deleting one name from the list of engineers until only one such engineer shall
remain, which remaining engineer shall be the Third Party Engineer. The Third
Party Engineer shall be designated from such list not later than the third (3rd)
Business Day following the expiration of the second seven (7) Day period
described above and such designation shall become effective on the third (3rd)
Business Day following such designation. Within ten (10) Business Days of the
effectiveness of the designation of a Third Party Engineer, each of Seller and
Williams shall submit to the Third Party Engineer a notice (a "Position Notice")
setting forth in detail such Party's position in respect of the issues in
dispute. Such Position Notice shall include supporting documentation, if
appropriate.
(b) The Third Party Engineer shall complete all proceedings and issue
its decision with regard to the issues in dispute as promptly as reasonably
possible, but in any event within ten (10) Business Days of the date on which
both Position Notices are submitted unless the Third Party Engineer reasonably
determines that additional time is required in order to give adequate
consideration to the issues raised. In such case the Third Party Engineer shall
state in writing his reasons for believing that additional time is needed and
shall specify the additional period required, which period shall not exceed ten
(10) Days without Seller's and Williams' agreement.
(c) In resolving a dispute, the Third Party Engineer shall consider all
facts and circumstances it deems reasonable given the nature of the dispute.
(d) The Third Party Engineer shall choose either Seller's position or
Williams' position as set forth in their respective Position Notices. If the
Third Party Engineer determines that the position set forth in Seller's Position
Notice is correct, it shall so state and shall state the appropriate actions to
be taken by Williams. In such case, Williams shall promptly take such action. If
the Third Party Engineer determines that the position set forth in Williams'
Position Notice is correct, he shall so state and shall state the appropriate
actions to be taken by Seller. In such case, Seller shall promptly take such
actions. The decision of the Third Party Engineer shall be final and
non-appealable. The Seller and Williams shall each bear one-half of all
reasonable costs incurred by the Third Party Engineer in connection with a
dispute under this Section 12.1.
(e) The list of engineers referred to in paragraph (a) above shall
contain qualified engineers with experience in the design, operation and
maintenance of electric generating facilities. The initial such list shall be
proposed by Seller no later than sixty (60) Days after the Execution Date and
upon agreement of the Parties shall be incorporated into this Agreement as
Appendix 7. A Party may at any time remove a particular engineer from the list
by obtaining the other Party's reasonable consent to such removal. However,
neither Party may remove a name or
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names from the list if such removal would leave the list without at least three
(3) names after giving effect to any concurrent addition of names pursuant to
paragraph (f) below.
(f) During January of each year, each of Seller and Williams shall
review the current list of Third Party Engineers and give notice to the other of
any proposed additions to the list and any intended deletions. Intended
deletions shall automatically become effective thirty (30) Days after notice is
received by the other Party unless written objection is made by the other Party
within such thirty (30) Days and provided that such deletions do not leave the
list without at least three (3) names after giving effect to any concurrent
addition of names pursuant to this paragraph (f). Proposed additions to the list
shall automatically become effective thirty (30) Days after notice is received
by the other Party unless written objection is made by such other Party within
thirty (30) Days. By mutual agreement between Seller and Williams, a new name or
names may be added to the list of Third Party Engineers at any time.
SECTION 12.2
(a) Each of Seller and Williams shall designate in writing to the other
Party from time to time a representative who shall be authorized to resolve any
dispute relating to the subject matter of this Agreement not subject to the
provisions of Section 12.1 and, unless otherwise expressly provided herein, to
exercise the authority of such Party to make decisions by mutual agreement.
(b) The Parties agree (i) to attempt to resolve all disputes arising
hereunder promptly, equitably and in a good faith manner, and (ii) to provide
each other with reasonable access during normal business hours to any and all
non-privileged records, information and data pertaining to any such dispute.
(c) If any dispute is not resolved between the Parties pursuant to this
Section 12.2 within thirty (30) Days from the date on which a Party provided to
the other Party a written notice of such dispute, then such dispute shall be
settled exclusively and finally by arbitration in accordance with Section 12.3,
except for technical disputes, as described in Section 12.1 above, which shall
be resolved in accordance with that Section.
SECTION 12.3
(a) It is specifically understood and agreed that any dispute,
controversy or claim under this Agreement that cannot be resolved between the
Parties within the time period specified in Section 12.2(c), including any
matter relating to the interpretation of this Agreement but excluding any matter
to be submitted to the Third Party Engineer pursuant to Section 12.1, shall be
submitted to arbitration irrespective of the magnitude thereof, the amount in
dispute or whether such dispute would otherwise be considered justifiable or
ripe for resolution by any court or arbitral tribunal.
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(b) Each arbitration between the Parties shall be finally
settled in Washington, D.C. conducted pursuant to the then applicable Commercial
Arbitration Rules of the American Arbitration Association.
(c) The arbitration shall be conducted before a tribunal
composed of three arbitrators. Each Party shall appoint an arbitrator, obtain
its appointee's acceptance of such appointment and deliver written notification
of such appointment and acceptance to the other Party within fifteen (15) Days
after the expiration of the thirty (30) Day period specified in Section 12.2(c).
The two Party-appointed arbitrators shall jointly appoint the third (who shall
be the chairperson), obtain the acceptance of such appointment and deliver
written notification of such appointment within fifteen (15) Days after their
appointment and acceptance. The arbitrators shall have the power and authority
to determine the arbitrability of any dispute arising under or relating to this
Agreement or the subject matter hereof.
(d) Any arbitration commenced hereunder shall be completed
within one-hundred twenty (120) Days of the appointment of the arbitral
tribunal, absent agreement of the Parties to an extension of such period. The
Parties shall be entitled to no discovery, provided, however, that the tribunal
may permit document discovery upon a showing of good cause. All direct testimony
shall be offered by way of affidavit. The Party submitting an affidavit shall
make the affiant available for cross-examination before the tribunal. The
Parties waive any claim to any damages in the nature of special, punitive,
exemplary, consequential or statutory damages in excess of compensatory damages,
and the tribunal is specifically divested of any power to award such damages.
All decisions of the tribunal shall be pursuant to a majority vote. Any interim
or final award shall be rendered by written decision. The judgment of the
tribunal shall be final and binding (i.e., not subject to appeal) on the
Parties. The Parties agree that a judgment upon any arbitration award may be
entered by any court having jurisdiction thereof.
(e) If a Party fails to appoint its arbitrator within a period
of fifteen (15) Days after receiving notice of the arbitration, or if the two
arbitrators appointed cannot agree upon the third arbitrator within a period of
fifteen (15) Days after appointment of the second arbitrator, then such
arbitrator shall be appointed by the American Arbitration Association.
(f) No arbitrator shall be a past or present employee or agent
of, or consultant or counsel to, either Party or any Affiliate of either Party,
unless such restriction is waived in writing by the other Party.
(g) Each Party shall pay the costs of its designated
arbitrator (or the arbitrator designated upon its failure to designate an
arbitrator pursuant to Section 12.3(f)) and one-half of the costs of the third
arbitrator and out-of-pocket third party costs and expenses of an arbitration
under this Section 12.3.
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SECTION 12.4
This Article XII shall survive the termination or expiration of this
Agreement.
ARTICLE XIII
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 13.1
Seller hereby represents, warrants and covenants as follows:
(a) Seller is a limited liability company duly organized and
validly existing under the laws of the State of Delaware.
(b) Seller has all requisite power and authority to carry on
the business to be conducted by it under this Agreement and to enter into and
perform its obligations under this Agreement.
(c) The execution and delivery of this Agreement and the
performance of Seller's obligations hereunder have been duly authorized by all
necessary action on the part of Seller and do not and will not conflict with or
result in a breach of Seller's certificate of formation or limited liability
company agreement or any indenture, mortgage, other agreement or instrument or
any statute or rule, regulation, order, judgment or decree of any judicial or
administrative body to which Seller is a party or by which Seller or any of its
properties is bound or subject.
(d) This Agreement is the valid and binding obligation of
Seller, enforceable with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency or similar laws from time to time in effect
that affect creditors' rights generally or by general principles of equity.
(e) Seller is in compliance with the material provisions of
all laws which are applicable to it or its operations, non-compliance with which
could reasonably be expected to have a material adverse effect on the ability of
Seller to perform its obligations under this Agreement including, without
limitation, Environmental Laws.
(f) There are no enforcement, clean-up, removal, mitigation or
other governmental or regulatory actions, claims or proceedings, including but
not limited to any proceedings relating to damage, contribution, cost recovery,
compensation, loss or injury, pending or to Seller's knowledge threatened, under
any Environmental Law affecting the Facility or the Site, which would reasonably
be expected to have a material adverse effect on the ability of Seller to
perform its obligations under this Agreement.
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SECTION 13.2
Williams hereby represents, warrants and covenants as follows:
(a) Williams is a corporation duly organized and validly
existing under the laws of the State of Delaware;
(b) Williams has all requisite power and authority to carry on
the business to be conducted by it under this Agreement and to enter into and
perform its obligations under this Agreement;
(c) The execution and delivery of this Agreement and the
performance of Williams' obligations hereunder have been duly authorized by all
necessary action on the part of Williams and do not and will not conflict with
or result in a breach of Williams' charter documents or by-laws or any
indenture, mortgage, other agreement or instrument of any statute or rule,
regulation, order, judgment or decree of any judicial or administrative body to
which Williams is a party or by which Williams or any of its Affiliates is bound
or subject; and
(d) This Agreement is the valid and binding obligation of
Williams, enforceable with its terms except as such enforceability may be
limited by applicable bankruptcy, insolvency or similar laws from time to time
in effect that affect creditors' rights generally or by general principles of
equity.
(e) Williams is in compliance with the material provisions of
all laws which are applicable to it or its operations, non-compliance with which
could reasonably be expected to have a material adverse effect on the ability of
Williams to perform its obligations under this Agreement including, without
limitation, Environmental Laws.
ARTICLE XIV
LIABILITY; DEDICATION
SECTION 14.1
Nothing in this Agreement shall be construed to create any duty,
standard of care or liability to any Person not a Party to this Agreement.
SECTION 14.2
Notwithstanding anything contained in this Agreement, except with
respect to third party claims, in respect of which this Section 14.2 shall not
apply, neither Party shall be liable to the
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other Party, its Affiliates, directors, officers, partners, agents,
employees, successors or assigns, for claims for incidental, special, punitive,
indirect or consequential damages of any nature arising out of, connected with
or resulting from performance or nonperformance of this Agreement, including,
without limitation, claims in the nature of lost revenues, income or profits
(other than payments specifically provided for and properly due under this
Agreement) or losses, damages or liabilities under any financing, lending or
construction contracts, agreements or arrangements to which Seller may be party
irrespective of whether such claims are based upon warranty, negligence, strict
liability, contract, operation of law or otherwise. The provisions of this
Section 14.2 shall survive the termination or expiration of this Agreement.
SECTION 14.3
No undertaking by either Party under any provision of this Agreement
shall constitute the dedication of that Party's electrical or gas reserves,
system, equipment, or facilities, or any portion thereof, to the other Party or
to the public.
ARTICLE XV
INDEMNITY
SECTION 15.1
Subject to the provisions of Section 15.2, each Party shall indemnify,
hold harmless and defend the other Party, its Affiliates, directors, officers,
partners, agents and employees from and against any and all loss, liability,
damage, cost or expense, including damage and liability for bodily injury to or
death of third Persons or damage to property of third Persons (collectively,
"Loss"), to the extent arising out of, in connection with or resulting from the
indemnifying Party's breach of any of the representations or warranties made in,
or the indemnifying Party's failure to perform any of its obligations under,
this Agreement, or the indemnifying Party's design, installation, construction,
ownership, operation, repair, relocation, replacement, removal or maintenance
of, or the failure of, any of such Party's equipment and/or facilities,
including, but not limited to, the Interconnection Facilities, the Facility, Gas
Interconnection Facilities and Protective Gas Apparatus and any Natural Gas or
Fuel Oil facilities, and/or any appurtenances thereto, and any electric
transmission facilities used in connection with this Agreement; provided,
however, that neither Party shall have any indemnification obligations hereunder
in respect of any Loss to the extent caused by such other Party's gross
negligence, bad faith or willful misconduct. Each Party hereto shall furnish the
other Party with written notification after such Party becomes aware of any
event or circumstances, or the threat thereof, (but in no event later than ten
(10) Days prior to the time any response is required by law) which might give
rise to such indemnification. At the indemnified Party's request, the
indemnifying Party shall defend
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any suit asserting a claim covered by this indemnity and shall pay any and all
costs and expenses (including reasonable attorney's fees and expenses) that may
be incurred, including any and all costs and expenses which may be incurred by
the indemnified Party, in enforcing this indemnity. The indemnified Party may,
at its own expense, retain separate counsel and participate in the defense of
any such suit or action.
SECTION 15.2
The indemnity in Section 15.1 shall apply to all claims against each
Party including, but not limited to, all claims made or threatened by, or in the
name of or on behalf of each Party's employees for personal injuries (including
death) which arise in the course of their employment. Seller hereby waives any
defense it may otherwise have under applicable workers' compensation laws.
SECTION 15.3
As between the Parties, Williams shall be deemed to be in exclusive
possession and control (and responsible for any damages or injury resulting
therefrom or caused thereby) of Natural Gas and Fuel Oil prior to the Fuel
Delivery Points and the Net Electric Energy and Ancillary Services at and from
the Electric Delivery Point, and Seller shall be deemed to be in exclusive
possession and control (and responsible for any damages or injury resulting
therefrom or caused thereby) of Natural Gas and Fuel Oil at and from the Fuel
Delivery Points and the Net Electric Energy and Ancillary Services prior to the
Electric Delivery Point. Risk of loss related to Natural Gas and Fuel Oil shall
transfer from Williams to Seller at the applicable Fuel Delivery Point and risk
of loss related to the Net Electric Energy and Ancillary Services shall transfer
from Seller to Williams at the Electric Delivery Point. Williams shall
indemnify, defend and hold harmless Seller from and against any Loss arising out
of or in any way relating to Williams' possession or control of Natural Gas and
Fuel Oil prior to the Fuel Delivery Points or its possession and control of the
Net Electric Energy and Ancillary Services at and after the Electric Delivery
Point, and Seller shall indemnify, defend and hold harmless Williams from and
against any Loss arising out of or in any way relating to Seller's possession or
control of Natural Gas and Fuel Oil at and from the Delivery Point or its
possession and control of the Net Electric Energy and Ancillary Services prior
to the Electric Delivery Point.
SECTION 15.4
The Parties expressly acknowledge and agree that this Article XV shall
survive the termination or expiration of this Agreement.
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ARTICLE XVI
INSURANCE
SECTION 16.1
Seller shall keep the Facility continuously insured against loss or
damage in the amounts and for the risks that property of similar character is
usually so insured by entities owning and operating like properties.
SECTION 16.2
Seller, the operator of the Facility, (and their respective successors
and assigns) shall each procure or cause to be procured and shall maintain in
effect continuously during the Term of this Agreement with companies rated "A-,"
"IX" or better by A.M. Best the following minimum insurance coverage for the
Facility:
<TABLE>
<CAPTION>
Type of Coverage Liability Limits
---------------- ----------------
<S> <C>
Worker's Compensation Statutory
Employer's Liability $500,000 per occurrence/injury
Commercial General Liability including: $1 million combined single
limit, each occurrence
$2 million general aggregate
limit
Bodily Injury
Property Damage
Blanket Contractual
Underground, Explosion and Collapse Hazard
Products and Completed Operations Hazard
Broad Form Property Damage
Personal Injury
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Automobile Liability
(Owned, Hired, Non-owned)
Bodily Injury $1,000,000 combined single
limit
Property Damage
Commercial Umbrella Liability $9,000,000 per occurrence and
aggregate
following form of
Commercial General Liability
Automobile Liability and
Employers Liability
</TABLE>
SECTION 16.3
Seller shall procure and maintain in effect continuously during the
Term of this Agreement, "all risk" property insurance, including coverage for
damage or loss caused by flood and earthquake, covering all property, material
and equipment, while in transit, during loading and unloading, while in storage
while at another location for repair and during installation in sufficient
amounts to cover and otherwise insure for the full replacement cost of the
Facility, with customrary and reasonable sublimits, and business interruption
insurance covering 100% of Seller's continuing fixed operating expenses and debt
service for a period of at least 12 months arising from any loss insured against
by Seller's "all risk" property insurance, with a maximum deductible of 60 days.
SECTION 16.4
All insurance policies identified in Section 16.2 and Section 16.3
hereof, except said Worker's Compensation Insurance, shall name Williams as an
additional insured.
SECTION 16.5
Seller's casualty insurance (other than its Worker's Compensation
insurance) shall include provisions or endorsements (a) stating that such
insurance is primary insurance with respect to the interest of Williams and that
any insurance maintained by Williams is excess and not contributory insurance
with the insurance required hereunder, and (b) providing that such
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policies shall not be canceled or their limits of liability reduced except upon
sixty (60) Days prior written notice to Williams.
SECTION 16.6
Not less than one (1) Day prior to the date of commencement of
construction of the Facility, Seller shall provide and shall continue to provide
to Williams annually during the Term of this Agreement properly executed and
current certificates of insurance relative to said insurance policies. Said
certificates shall provide the following information:
(a) Name of insurance company, policy number and expiration date;
(b) The coverage required and the limits on each, including the amount
of deductibles or self-insured retentions, which shall be for the account of
Seller;
(c) A statement indicating that Williams shall receive at least sixty
(60) Days prior written notice of cancellation with respect to said insurance
policies (except in respect of cancellation for non payment of premiums for
which such prior written notice shall be ten (10) Days; and
(d) For all insurance policies identified in Section 16.2, except
workers' compensation insurance, a statement indicating that Williams has been
named as an additional insured.
SECTION 16.7
A copy of each such insurance policy, certified as a true copy by an
authorized representative of the issuing insurance company or in lieu thereof or
in addition thereto, at Williams' discretion, a certificate in form satisfactory
to Williams certifying to the issuance of such insurance, shall be furnished to
Williams not less than ten (10) Days prior to the commencement of construction
of the Facility and fifteen (15) Days prior to the expiration date of each such
policy and/or certificate.
SECTION 16.8
Williams shall have the right to inspect the original policies of
insurance applicable to this Agreement at Seller's place of business during
regular business hours by providing Seller with fifteen (15) Days notice of its
inspection.
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ARTICLE XVII
FORCE MAJEURE
SECTION 17.1
(a) A Party shall be excused from performing its obligations under this
Agreement and shall not be liable in damages or otherwise to the other Party if
and to the extent such Party declares that it is unable to perform or is
prevented from performing an obligation under this Agreement by a Force Majeure
condition, except for any obligations and/or liabilities under this Agreement to
pay money, which shall not be excused, and except to the extent an obligation
accrues prior to the occurrence or existence of a Force Majeure condition,
provided that:
(i) the Party declaring its inability to perform by virtue of
Force Majeure, as promptly as practicable after the occurrence of the
Force Majeure condition, but in no event later than five (5) Days
thereafter, gives the other Party written notice describing, in detail,
the nature, extent and expected duration of the Force Majeure
condition;
(ii) the suspension of performance is of no greater scope and
of no longer duration than is reasonably required by the Force Majeure
condition;
(iii) the Party declaring Force Majeure uses all commercially
reasonable efforts to remedy its inability to perform; and
(iv) as soon as the Party declaring Force Majeure is able to
resume performance of its obligations excused as a result of the Force
Majeure condition, it shall give prompt written notification thereof to
the other Party.
(b) Irrespective of whether the Force Majeure condition is declared by
Williams or Seller, the time period of a Force Majeure shall be excluded from
the calculation of all payments under Appendix 1 and Williams shall be under no
obligation to pay Seller any of the payments described in Appendix 1 except
that, if Williams declares a Force Majeure, it shall, subject to Section 17.4
and subject to the limitation in Section 9.3(a), continue to pay Seller only the
applicable monthly Total Fixed Payment as described in Section II.A.2 of
Appendix 1, until the earlier of (a) the termination of the Force Majeure
condition or (b) the termination of this Agreement, and provided further that in
the event of a Force Majeure declared by Seller due to an action or inaction of
the Host Utility that prevents Seller from delivering Net Electric Energy to the
Electric Delivery Point, Williams shall continue to pay the applicable portion
of the Total Fixed Payment for the first twenty-four (24) hours of such period.
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SECTION 17.2
Notwithstanding anything to the contrary contained in this Agreement,
except as may expressly be provided herein, the term Force Majeure shall not
include or excuse a Party's performance:
(a) Except as otherwise set forth in Section 2.1, the failure to
complete the Facility by or to achieve the Commercial Operation Date as extended
pursuant to Section 2.1, which failure is caused by, arises out of or results
from the acts or omissions of Seller, and/or from the acts or omissions of any
third party, unless, and then only to the extent that, any such acts or
omissions of such third party (i) would itself be excused hereunder by virtue of
a Force Majeure condition, or (ii) is the result of a failure of Williams to
provide fuel to the Facility pursuant to Section 4.1 above;
(b) Any reduction, curtailment or interruption of generation or
operation of the Facility, or of the ability of Williams to accept or transmit
Net Electric Energy, whether in whole or in part, which reduction, curtailment
or interruption is caused by or arises from the acts or omissions of any third
party providing services or supplies to the Party claiming Force Majeure,
including any vendor or supplier to either Party of materials, equipment,
supplies or services, or any inability of the Host Utility to deliver Net
Electric Energy to Williams, unless, and then only to the extent that, any such
acts or omissions would itself be excused hereunder as a Force Majeure;
(c) Any outage, whether or not due to the fault or negligence of
Seller, of the Facility attributable to a defect or inadequacy in the
manufacture, design or installation of the Facility that prevents, curtails,
interrupts or reduces the ability of the Facility to generate Net Electric
Energy or the ability of Seller to perform its obligations hereunder; or
(d) To the extent that the Party claiming Force Majeure failed to
prevent or remedy the Force Majeure condition by taking all commercially
reasonable acts (short of litigation, if such remedy requires litigation) and,
except as otherwise provided in Section 17.3 below, failed to resume performance
hereunder with reasonable dispatch after the termination of the Force Majeure
condition; or
(e) To the extent that the claiming Party's failure to perform was
caused by lack of funds; or
(f) To the extent Williams is unable to perform due to a shortage of
Natural Gas or Fuel Oil supply not caused by an event of Force Majeure; or
(g) Because of an increase or decrease in the market price of electric
energy/capacity, Natural Gas or Fuel Oil, or because it is uneconomic for such
Party to perform its obligations under this Agreement.
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<PAGE>
SECTION 17.3
Notwithstanding anything contained in this Article XVII to the
contrary, neither Party shall be required to settle any strike, walkout, lockout
or other labor dispute on terms which, in the sole judgment of the Party
involved in the dispute, are contrary to its interest, it being understood and
agreed that the settlement of strikes, walkouts, lockouts or other labor
disputes shall be entirely within the discretion of the Party having such
dispute.
SECTION 17.4
Notwithstanding anything contained in this Article XVII to the
contrary, Williams shall have the right to terminate this Agreement, without any
liability or responsibility whatsoever, except to the extent accruing (and not
excused) prior to such termination, in the event Force Majeure has been declared
by Seller and the effect of said Force Majeure has not been fully corrected or
alleviated within [*] after the date said Force Majeure was declared; [*].
ARTICLE XVIII
EVENTS OF DEFAULT; TERMINATION; REMEDIES
SECTION 18.1
The following shall constitute events of default under this Agreement:
(a) A breach of any term or condition of this Agreement, including, but
not limited to, (i) any failure to maintain or to renew any security as required
by Article 19 of this Agreement, (ii) any breach of a representation, warranty
or covenant made in this Agreement including the Appendices hereto, or (iii)
failure of either Party to make a required payment to the other Party of amounts
due hereunder.
(b) The Facility is not available to provide Fuel Conversion Services
to Williams during any period of one-hundred and eighty (180) consecutive Days
after the occurrence of the Commercial Operation Date for any reason, except as
may be excused by Force Majeure, the absence of available Natural Gas, or such
non-availability is caused by an act or failure to act by Williams where such
action is required by this Agreement.
47
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(c) Seller sells or supplies Net Electric Energy, Ancillary Services or
capacity from the Facility, or agrees to do the same, to any Person or entity
other than Williams, without the prior approval of Williams.
(d) Without duplication of the [*] Day period in Section 18.2, Seller
fails for [*] consecutive Days, after notification from Williams providing a
reasonable opportunity to cure, to perform regular and required maintenance,
testing or inspection of the Interconnection Facilities, the Facility and/or
other electric equipment and facilities as required by this Agreement where such
failure is material.
(e) Without duplication of the [*] Day period in Section 18.2, Seller
fails for [*] consecutive Days, after notification from Williams providing a
reasonable opportunity to cure, to correct or resolve a material violation of
any code, regulation and/or statute applicable to the construction,
installation, operation or maintenance of the Facility, the Interconnection
Facilities, Protective Gas Apparatus or any other electric equipment and
facilities required to be constructed and operated under this Agreement when
such violation impairs the continued ability of Seller to perform its
obligations under this Agreement.
(f) A receiver or liquidator or trustee of either Party or of any of
its property shall be appointed by a court of competent jurisdiction, and such
receiver, liquidator or trustee shall not have been discharged within [*] Days
or by decree of such a court a Party shall be adjudicated bankrupt or insolvent
or any substantial part of its property shall have been sequestered, and such
decree shall have continued undischarged and unstayed for a period of [*] Days
after the entry thereof, or a petition to declare bankruptcy or to reorganize a
Party pursuant to any of the provisions of the Federal Bankruptcy Code, as now
in effect or as it may hereafter be amended, or pursuant to any other similar
state statute as now or hereafter in effect, shall be filed against a Party and
shall not be dismissed within [*] Days after such filing.
(g) A Party shall file a voluntary petition in bankruptcy under any
provision of any federal or state bankruptcy law or shall consent to the filing
of any bankruptcy or reorganization petition against it under any similar law;
or, without limiting the generality of the foregoing, a Party shall file a
petition or answer or consent seeking relief or assisting in seeking relief in a
bankruptcy under any provision of any federal or state bankruptcy law or shall
consent to the filing of any bankruptcy or reorganization petition against it
under any similar law; or, without limiting the generality of the foregoing, a
Party shall file a petition or answer or consent seeking relief or assisting in
seeking relief in a proceeding under any of the provisions of the Federal
Bankruptcy Code, as now in effect or as it may hereafter be amended, or pursuant
to any other similar state statute as now or hereafter in effect, or an answer
admitting the material allegations of a petition filed against if in such a
proceeding; or a Party shall make an assignment for the benefit of its
creditors; or a Party shall submit in writing its inability to pay its debts
generally as they become
48
<PAGE>
due; or a Party shall consent to the appointment of a receiver, trustee, or
liquidator of it or of all or any part of its property.
(h) Any modifications, alterations or other changes to the Facility by
or on behalf of Seller which prevent Seller from fulfilling, or materially
diminish Seller's ability to fulfill, its obligations, duties, rights and
responsibilities hereunder and which, after reasonable notice and opportunity to
cure, are not corrected.
(i) There shall be outstanding for more than [*] Days any unsatisfied
final, non-appealable judgment against Seller in an amount exceeding [*] unless
the existence of such unsatisfied judgment shall not materially affect Seller's
ability to perform its obligations under this Agreement.
(j) The AES Corporation shall cease to own, directly or indirectly,
beneficially and of record, at least fifty (50) percent of the equity interests
in Seller, or shall cease to possess the power to direct or cause the direction
of the management or policies of Seller, or any Person (other than The AES
Corporation or an Affiliate) authorized to act as a power marketer by FERC or
any Affiliate of such a Person shall own, directly or indirectly, beneficially
or of record, any of the equity interests in Seller.
SECTION 18.2
(a) Upon the occurrence of any event of default described in Section
18.1 (other than an event of default under Section 18.1(g) hereof for which no
notice shall be required or opportunity to cure permitted), the Party not in
default, to the extent such Party has actual knowledge of the occurrence of such
event of default, shall give prompt written notice of the default to the
defaulting Party. Such notice shall set forth, in reasonable detail, the nature
of the default and, where known and applicable, the steps necessary to cure such
default. The defaulting Party shall have [*] Business Days in the case of a
default under Section 18.1(a)(iii)) following receipt of such notice either to
(i) cure such default or commence in good faith all such steps as are necessary
and appropriate to cure such default in the event such default cannot be
completely cured within such [*] Day period.
(b) If the defaulting Party fails to cure such default or take such
steps as provided under subparagraph (a) above, and immediately upon the
occurrence of any event of default described in Section 18.1(g) hereof, this
Agreement may be terminated by the non-defaulting Party, without any liability
or responsibility whatsoever, by written notice to the Party in default hereof.
This Agreement shall thereupon terminate and the non-defaulting Party may
exercise all such rights and remedies as may be available to it to recover
damages caused by such default.
(c) Notwithstanding the foregoing, upon the occurrence of any such
event of default, the non-defaulting Party shall be entitled to (i) commence an
action to require the defaulting Party
49
<PAGE>
to remedy such default and specifically perform its duties and obligations
hereunder in accordance with the terms and conditions hereof and (ii) exercise
such other rights and remedies as it may have in equity or at law subject,
however, to the limitation of liability provided in Article XIV hereof.
ARTICLE XIX
SECURITY
SECTION 19.1
Without limiting the general applicability of the provisions of Article
II, or this Article, if the Commercial Operation Date does not occur by the
Final CO Date, as such date may be extended pursuant to the provisions of
Section 2.1, Seller agrees to compensate Williams for any actual damages it
suffers or incurs as the result of Williams' reliance upon the delivery of
Facility Capacity, Ancillary Services and Fuel Conversion Services hereunder, to
the extent said damages cannot be mitigated fully. Seller further agrees that
the damages Williams may suffer under these circumstances will be any and all
reasonable costs incurred by Williams in excess of costs that would have been
incurred had the Commercial Operation Date occurred on or before June 30, 2001,
as such date may be extended pursuant to Section 2.1.
SECTION 19.2
(a) The Parties acknowledge and agree that Seller, at the time of
execution of this Agreement, does not possess the financial resources or credit
to be responsible for paying Williams' actual damages if the Facility does not
achieve the Commercial Operation Date by the date specified in Section 2.1, as
such date may be extended pursuant to such Section. Therefore, in order to
provide reasonable assurances to Williams that a Person or entity on behalf of
Seller shall fulfill Seller's potential liability under this Article, Seller
shall provide to Williams no later than five (5) Business Days after the
Execution Date, (i) a guaranty of Seller's performance and payment obligations
under this Agreement from The AES Corporation ("AES"), in the form attached
hereto as Appendix 5 and made a part hereof, in the amount of [*] ("Guaranty
Amount"), which guaranty shall terminate on [*], or (ii) (x) in the event that
AES' senior unsecured debt is no longer rated Investment Grade by Standard &
Poor's or Moody's, or (y) at any time at Seller's option, such financial
security for the Guaranty Amount as specified in Section 19.2(b) hereof. Upon
the provision of the guaranty or other financial security referred to in this
Section 19.2(a), the guaranty provided by The AES Corporation pursuant to the
provisions of the Original PPA shall be cancelled and returned to Seller.
50
<PAGE>
(b) If Seller secures payment of the Guaranty Amount through financial
security other than the guaranty of AES, Seller shall provide to Williams,
within [*] Days after the occurrence of the event described in Section
19.2(a)(ii)(x) or at any time pursuant to Section 19.2(a)(ii)(y), security in
the form of a single letter of credit, satisfactory to Williams in form and
substance, upon which Williams may draw if the Facility does not achieve the
Commercial Operation Date by the date specified in Section 2.1, as such date may
be extended pursuant to such Section. In the event said security contains an
expiration date, either express or implied, Seller shall renew said security not
later than [*] Days prior to said expiration date and shall contemporaneously
therewith provide written notice of said renewal to Williams. In the event
Seller fails to renew said security as set forth above, Williams shall be
entitled to demand and receive payment thereunder on or after [*] Days after
written notice of such failure is provided to Seller and in such event the
amount so drawn shall be deposited in an interest bearing escrow account and
shall be returned to Seller at the Commercial Operation Date unless otherwise
drawn on by Williams in satisfaction of Seller's obligations under Section 19.1
of this Agreement. The requirement for said security shall terminate upon the
Commercial Operation Date.
(c) The letter of credit referred to in paragraph (b) above shall be
issued by a financial institution that meets and at all times during the term of
such letter of credit maintains the following criteria:
(i) A U.S. or foreign bank rated "C" or better by Thompson
Bankwatch; or
(ii) A U.S. or foreign bank, surety company or financial
institution whose senior debt has the rating listed below by two (2) of
the three (3) rating agencies:
Standard & Poor's: "A-" or better
Moody's: "A3" or better
Duff & Phelps: "A-" or better
If such bank, surety company or financial institution fails to
maintain such criteria, then upon thirty (30) Days written notice from
Williams, Seller shall obtain equivalent security from another bank,
surety company or financial institution meeting the above stated
criteria. The form and substance of any such letter of credit shall be
reasonably satisfactory to Williams.
(d) Seller shall execute any and all documents reasonably necessary to
assure that Williams' claim to and interest in said security is perfected.
SECTION 19.3
No later than the closing on financing for the Facility, Williams shall
provide to Seller a guarantee of Williams' performance and payment obligations
under this Agreement in the form
51
<PAGE>
attached hereto as Appendix 6 and made a part hereof and issued by Williams
Holdings of Delaware, Inc. ("Holdings"), provided that Holdings is rated
Investment Grade or, if Holdings is not rated Investment Grade, issued by an
Affiliate of Williams that is Investment Grade and provided further that in the
event the issuer of such guarantee is no longer rated Investment Grade such
guarantee shall, within thirty (30) Days after the loss of such rating, be
replaced by a guarantee from an Affiliate of Williams that is rated Investment
Grade or by other security acceptable to Seller, including a letter of credit
which meets the requirements of Sections 19.2(b) and (c) of this Agreement (with
appropriate substitution of references to Seller for references to Williams in
such Sections).
ARTICLE XX
SEVERAL OBLIGATIONS
SECTION 20.1
Except where otherwise specifically stated in this Agreement, the
duties, obligations and liabilities of the Parties are intended to be several,
not joint or collective. Nothing contained in this Agreement shall ever be
construed to create an association, trust, partnership or joint venture or
impose a trust or partnership duty, obligation or liability on or with regard to
either Party. Each Party shall be individually and severally liable for its own
obligations under this Agreement.
ARTICLE XXI
WAIVER
SECTION 21.1
Any waiver at any time by either Party of its rights, duties, and/or
obligations with respect to any default under this Agreement, or with respect to
any other matter arising out of or in connection with this Agreement, shall not
be deemed a continuing waiver nor a waiver with respect to any subsequent
default or other matter.
52
<PAGE>
ARTICLE XXII
ASSIGNMENT
SECTION 22.1
(a) Neither this Agreement nor any rights, duties, interests or
obligations hereunder may be assigned, transferred, pledged or otherwise
encumbered or disposed of, by operation of law or otherwise without the prior
written consent of the other Party; except that (i) Williams, at any time after
reasonable advance notice to Seller and without the consent of Seller, may
assign this Agreement and any of its rights, interests, duties or obligations
hereunder to any Affiliate of Williams or any other entity, provided that such
Affiliate of Williams or such other entity's long term unsecured debt at such
time is rated Investment Grade by Standard & Poor's and Moody's or that such
Affiliate of Williams or such other entity's obligations under this Agreement
are guaranteed by an Affiliate whose long term unsecured debt at such time is
rated Investment Grade by Standard & Poor's and Moody's and so long as any
assignee shall agree to be bound by all of the terms and conditions hereof to
the same extent as Williams; (ii) Seller, at any time, and from time to time,
after reasonable advance notice to Williams and without the consent of Williams,
may assign this Agreement and any of its rights, interests, duties or
obligations hereunder as collateral security to any Lender so long as the
assignee shall agree to be bound by all of the terms and conditions hereof to
the same extent as Seller in the event the Lender exercises its rights under
such assignment; and (iii) Seller shall have the right at any time without the
consent of Williams to assign this Agreement and its rights, interests, duties
and obligations hereunder to any Affiliate, provided that such Affiliate assumes
in writing all of the obligations and duties of Seller hereunder and the
guaranty/security required pursuant to Section 19.2 remains in effect. This
Agreement shall inure to the benefit of and bind the parties hereto, including
any permitted assignee or successor.
(b) Except as otherwise specified in this Article XXII, no assignment
or disposition of rights hereunder shall (i) relieve or in any way discharge
Seller or Williams from the performance of their respective obligations and
liabilities under this Agreement or (ii) alter, amend, diminish or otherwise
impair Williams' or Seller's rights under this Agreement.
SECTION 22.2
Seller hereby agrees that it shall not sell, transfer, assign, lease or
otherwise dispose of the Facility or any substantial portion thereof or interest
therein necessary to perform Seller's obligations hereunder to any Person that
is a FERC authorized power marketer or an Affiliate of such an entity without
the prior written consent of Williams, which consent shall not be unreasonably
withheld.
53
<PAGE>
SECTION 22.3
Except as specifically provided for in this Article XXII, any
assignment or transfer of this Agreement or any rights, duties or interests
hereunder or any disposition of the Facility or any portion thereof or interest
therein by any Party without the written consent of the other Party as provided
herein shall be void and of no force or effect.
SECTION 22.4
Each Party shall reimburse the other for the reasonable costs and
expenses (including reasonable legal fees and expenses) incurred in connection
with a Party's agreement to review, execute and deliver any instruments,
agreements or documents that may be used in connection with any assignment
requested by a Party or otherwise permitted hereunder.
SECTION 22.5
Williams hereby acknowledges that AES Ironwood, Inc., a Delaware
corporation and a party to the Original PPA, has assigned all of its right,
title and interest in and to the Original PPA to Seller. Williams hereby
consents to that assignment and releases AES Ironwood, Inc. from any and all
obligations and liabilities with respect to the Original PPA and this Agreement.
ARTICLE XXIII
NOTICES
SECTION 23.1
All notices, demands, requests or other correspondence required or
permitted under this Agreement shall be in writing and shall be personally
delivered or sent by certified United States mail (postage prepaid, return
receipt requested), overnight express mail, courier service or facsimile
transmission (with the original transmitted by any of the other aforementioned
delivery methods) addressed as follows:
If to Seller to: AES Ironwood, L.L.C.
1001 N. 19th Street
Arlington, VA 22209
Attention: Project Manager
(Facsimile): 703-528-4510
54
<PAGE>
If to Williams to: Williams Energy Marketing & Trading Company
One Williams Center
Tulsa, OK 74172
Attention: Contract Management
(Facsimile): 918-594-1935
or to such other Person at such other address as a Party shall designate by like
notice to the other Party.
SECTION 23.2
Unless otherwise provided herein, all notices hereunder shall be deemed
to be given when received or personally delivered.
ARTICLE XXIV
GRATUITIES
SECTION 24.1
Each Party shall prohibit their employees from using their official
position for personal financial gain or from accepting any personal advantage
from anyone under circumstances which might reasonably be interpreted as an
attempt to influence the recipients in the conduct of their official duties.
Neither Party, nor their employees or representatives shall, under circumstances
which might reasonably be interpreted as an attempt to influence the recipients
in the conduct of their duties, extend any gratuity or special favor to
employees of the other Party.
ARTICLE XXV
CAPTIONS
SECTION 25.1
All indices, titles, subject headings, section titles and similar items
in this Agreement are provided for the purpose of reference and convenience only
and are not intended to be inclusive, definitive or to affect the meaning of the
contents or scope of this Agreement.
55
<PAGE>
ARTICLE XXVI
CHOICE OF LAWS
SECTION 26.1
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York, regardless of the conflicts
of laws provisions of such laws.
ARTICLE XXVII
MISCELLANEOUS PROVISIONS
SECTION 27.1
(a) During the Term of this Agreement hereof and consistent with this
Agreement, Seller shall provide, upon reasonable advance notice, Williams'
employees and/or agents reasonably acceptable to Seller continuing and
unrestricted access to the Facility, the Site, the Interconnection Facilities
(on terms consistent with Seller's interconnection agreement with the Host
Utility) and all other appurtenant electrical equipment at all times and for any
duration for the purpose of (i) verifying, reviewing, and/or monitoring the
operation of the Facility, the Interconnection Facilities and all other
appurtenant electrical equipment for the purpose of determining Seller's
compliance with this Agreement; and (ii) inspecting, examining and testing such
equipment and facilities as specifically authorized under this Agreement.
Williams' employees and/or agents shall be subject to all reasonable rules
applicable to the Facility and the Site with respect to such matters as safety,
operations and confidentiality provided that such rules are applied in a
nondiscriminatory manner. Williams' employees and/or agents shall conduct
themselves so as to not hamper or impede the Facility's operations.
(b) The Parties agree that all information relating to this Agreement
hereof, and the administration or performance hereof by the Parties, including,
but not limited to, any information and records provided to Williams by Seller
under this Section 27.1:
(i) shall not be used for any purposes other than as
contemplated by this Agreement and shall be kept confidential pursuant
to and in accordance with the Confidentiality Agreement attached hereto
as Appendix 2; and
(ii) except as provided in the Confidentiality Agreement,
shall neither be removed from Seller's premises nor be duplicated,
electronically recorded, or recreated in any other manner without
Seller's prior written consent, which consent shall not be
56
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unreasonably withheld or delayed, and shall not be released to any
third parties, other than Williams' Affiliates, without Seller's prior
written consent, which consent shall not be unreasonably withheld or
delayed.
SECTION 27.2
The provisions of Article XII, SECTION 14.2, Article XV, and SECTION
27.1 (including the Confidentiality Agreement attached hereto as Appendix 2),
including the rights and obligations of the Parties therein provided, shall
survive the termination or expiration of this Agreement and the performance by
the Parties of their obligations hereunder.
SECTION 27.3
Whether or not the transactions contemplated by this Agreement are
consummated, except as otherwise specifically provided for in this Agreement,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the Party incurring such
expenses.
SECTION 27.4
This Agreement is not intended to confer upon any Person other than the
Parties hereto any rights or remedies hereunder.
SECTION 27.5
Except as otherwise required by law or the rules of the New York Stock
Exchange, for so long as this Agreement is in effect, neither Seller nor
Williams shall, nor shall they permit any of their Affiliates to, issue or cause
the publication of any press release or other public announcement with respect
to any material aspect of the transactions contemplated by this Agreement the
disclosure of which could reasonably be expected to result in an adverse effect
on the competitive position of the other Party without the consent of the other
Party, which consent shall not be unreasonably withheld or delayed.
SECTION 27.6
Williams shall use its commercially reasonable efforts to assist Seller
in achieving the closing of financing for the Facility by Seller, including the
execution of a consent in favor of the Lenders of Seller's collateral assignment
to such Lenders of this Agreement, such consent to be mutually agreed to by
Williams, Seller and the Lenders. Seller shall use its commercially reasonable
efforts to include in its financing documents a provision granting Williams the
initial right to purchase the Facility from the holders of Seller's debt for an
amount equal to the greater of (i) the Fair Market Value of the Facility and
(ii) all amounts then due and owing to such debt
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holders under Seller's financing documents, in the event that such debt holders
declare an event of default and accelerate amounts due under Seller's financing
documents as a result of an event of default under such documents that is not
caused by a default by Williams under this Agreement.
ARTICLE XXVIII
SUCCESSORS AND ASSIGNS
SECTION 28.1
This Agreement shall inure to the benefit of and be binding upon
Williams and Seller and to the extent permitted hereunder, their respective
successors and assigns.
ARTICLE XXIX
COUNTERPARTS
SECTION 29.1
This Agreement may be executed in separate counterparts by the Parties
hereto, each of which when so executed and delivered shall be an original, but
all of which shall constitute one and the same instrument.
ARTICLE XXX
ENTIRE AGREEMENT; SEVERABILITY; AMENDMENT
SECTION 30.1
This Agreement, including all Appendices hereto, constitutes the entire
agreement between the Parties hereto with respect to the matters contained
herein, and all prior agreements with respect to the matters covered herein,
including Amendment No. 1, the Letter Agreement and the Second Letter Agreement,
are superseded, and each Party confirms that it is not relying upon any
representations or warranties of the other Party, except as specifically set
forth herein or incorporated by reference hereto.
58
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SECTION 30.2
Should any provision of this Agreement be held to be invalid or
unenforceable, such provision shall be invalid or unenforceable only to the
extent of such invalidity or unenforceability without invalidating or rendering
unenforceable any other provision hereof.
SECTION 30.3
This Agreement may not be amended or modified except by a written
instrument signed by each of the Parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
59
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first set forth
above.
AES IRONWOOD, L.L.C.
By: /s/ Patricia L. Rollin
-----------------------------
Name: Patricia L. Rollin
Title: Vice President
WILLIAMS ENERGY MARKETING & TRADING
COMPANY
By:
-----------------------------
Name:
Title:
[AMENDED AND RESTATED POWER PURCHASE AGREEMENT]
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first set forth
above.
AES IRONWOOD, L.L.C.
By:
-----------------------------
Name:
Title:
WILLIAMS ENERGY MARKETING & TRADING
COMPANY
By:/s/ Jerry Gollnick
-----------------------------
Name: Jerry Gollnick
Title: President
[AMENDED AND RESTATED POWER PURCHASE AGREEMENT]
<PAGE>
APPENDIX 1
PRICING
This Appendix is intended to implement certain provisions of the Agreement. All
calculations will be performed with the proper units. Capitalized terms used in
this Appendix and not defined herein shall have the meanings given such terms in
the Agreement.
I. Pricing Terms
Williams shall pay Seller for Fuel Conversion Services, Facility Capacity, and
Ancillary Services in accordance with the terms and conditions set forth in this
Appendix and the Agreement.
II. Monthly Pricing Provisions
A. Payments and Credits
[*] commencing with the Commercial Operation Date, Williams shall
make payments to Seller for Fuel Conversion Services, Successful Start-Ups
and associated Shutdowns, Ancillary Services, and Facility Capacity. [*]
1. Fuel Coversion Payment
[*]
1--1
<PAGE>
2. Total Fixed Payment
[*]
TABLE II-1
[*]
1--2
<PAGE>
3. Fuel Conversion Volume Rebate
[*]
where,
[*]
1--3
<PAGE>
[*]
4. Unit Start-Up Payment
[*]
1--4
<PAGE>
[*]
5. GDPIPD Escalation
[*]
III. Other Payments and Credits
A. Facility Heat Rate Bonus or Penalty
[*]
1--5
<PAGE>
[*]
1--6
<PAGE>
[*]
IV. [Reserved]
V. Determination of Annual Availability Adjustments
[*]
1--7
<PAGE>
[*]
1--8
<PAGE>
[*]
1--9
<PAGE>
[*]
1--10
<PAGE>
[*]
E. Non-Dispatch Payments
[*]
1--11
<PAGE>
[*]
1--12
<PAGE>
APPENDIX 2
CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT (this "Agreement"), dated as of February 5,
1999, by and between AES Ironwood, L.L.C., a Delaware limited liability company
("Seller"), and Williams Energy Marketing & Trading Company, a corporation
organized and existing under the laws of the State of Delaware ("Williams"),
(Seller and Williams hereinafter referred to individually as a "Party" and
collectively as the "Parties").
RECITALS
WHEREAS, the Parties are entering into an Amended and Restated Power
Purchase Agreement (the "PPA"), dated as of the date hereof, pursuant to which
Williams will deliver fuel to Seller's electric generating facility (the
"Facility") and Seller will sell and Williams will purchase capacity, ancillary
services and fuel conversion services from the Facility.
WHEREAS, the Parties agree that, subject to the provisions of this
Agreement, the PPA is to be kept confidential.
WHEREAS, the Parties understand that, during the course of the
administration and performance of the PPA, they may wish to exchange information
related to the PPA that the Party providing the information desires to keep
confidential.
NOW, THEREFORE, in consideration of the mutual covenants and promises set
forth below, the Parties hereto, intending to be legally bound, hereby covenant,
promise and agree as follows.
1. Confidential Materials. When a Party deems information that it provides
to the other Party to be confidential, the Party providing such information
shall mark the information in a manner to indicate that it is considered to be
confidential or, if the information is provided orally, the Party providing the
information shall clearly identify the information as being confidential at the
time it is provided and promptly confirm to the other Party in writing that such
oral information is confidential (all such information that has been so marked
or identified as confidential, including the PPA, being "Confidential
Material").
Except as set forth in Section 4 below, each Party and its Representatives
(as hereinafter defined) agree to treat confidentially any Confidential Material
provided to it by the other Party, together with all notes, analyses,
compilations or studies prepared by such Party or its Representatives that
contain or otherwise reflect such Confidential Material. For purposes of this
Agreement, "Representatives" shall mean a Party's, or its Affiliates' (as such
term is defined in the PPA) directors, officers, employees, and outside counsel,
accountants and lenders. Each Party and its Representatives shall protect the
Confidential Material against disclosure using the
2--1
<PAGE>
same degree of care, but no less than a reasonable degree of care, as it would
use to protect its own confidential information of a like nature.
2. Excluded Materials. The term Confidential Material shall not include
information of the disclosing Party which (i) at the time of disclosure is
generally available to the public other than as a result of a disclosure by the
receiving Party or its Representatives, (ii) was available to the receiving
Party on a non-confidential basis prior to its receipt from the disclosing
Party, (iii) has become available to the receiving Party on a non-confidential
basis from a source other than the disclosing Party or its Representatives, but
only if such source is, to the best of the receiving Party's knowledge, lawfully
entitled to make such disclosure and is not bound by a confidentiality agreement
with such disclosing Party, or (iv) which has been independently developed by
the receiving Party or its Representatives without violation of this Agreement.
3. Disclosure To Representatives. Each Party may disclose the Confidential
Material to those of its Representatives who require such material for the
purpose of administering or performing the PPA or developing, constructing,
financing or operating the Facility, provided that, except as set forth in
Section 4 below, such Representatives agree to be bound by the terms of this
Agreement. Each Party agrees that the Confidential Material will be kept
confidential by it and, except as set forth in Section 4 below, its
Representatives and, except with the specific prior written consent of an
officer of the other Party, will not be disclosed by it or its Representatives
except as permitted hereby. In any event, each Party shall be responsible for
any breach of this Agreement by it or by any of its Representatives, and each
Party shall, at its sole expense, take all reasonable measures to restrain its
Representatives from prohibited or unauthorized disclosure or use of the
Confidential Material.
4. Confidential Treatment of PPA. Notwithstanding any other provision of
this Agreement, Seller shall be permitted to (a) include a summary of the
material terms of the PPA in offering documents provided to potential purchasers
and purchasers of the Project's debt (collectively, "Offerees") pursuant to Rule
144A under the Securities Act of 1933, as amended (together with any similar
rule or regulation, "Rule 144A"), and (b) make available to such Offerees for
their review copies of the PPA and provide to such Offerees, upon request,
copies of the PPA; provided, however, that prior to the distribution of the
summary referred to in clause (a) above to any Rating Agency (as such term is
defined in the PPA) or any Offeree, Seller shall (i) provide Williams a copy
thereof and Williams shall have a reasonable period of time to review and
provide comments thereon to Seller, (ii) give due consideration to such comments
in finalizing the summary in light of Williams' interest in protecting its
proprietary information and in light of Seller's disclosure obligations under
applicable securities laws, and (iii) together with Williams, attempt in good
faith to resolve any disagreements concerning information to be included in such
summary, and provided, further, that Seller shall use its commercially
reasonable efforts to have such Offerees execute confidentiality agreements with
respect to the
2--2
<PAGE>
PPA and shall not provide the PPA to any Offeree if such Offeree or any of its
Affiliates (as such term is defined in the PPA) is a Federal Energy Regulatory
Commission ("FERC") authorized power marketer or has applied for such
authorization. Williams also recognizes that in the event that Seller files a
registration statement with the Securities and Exchange Commission ("SEC") in
respect of any debt offering, it will be required to submit a copy of the PPA to
the SEC. Seller shall use its commercially reasonable efforts to obtain
confidential treatment of the PPA by the SEC, in the event it is filed with the
SEC, in accordance with SEC rules. In the event that Seller is required to file
a copy of the PPA with FERC, Seller shall use its commercially reasonable
efforts to seek confidential treatment by FERC, in accordance with FERC's rules,
of those portions of the PPA for which Williams requests such confidential
treatment.
5. Defense Of Confidentiality. In the event that a Party or any of its
Representatives is requested or required in any legal proceeding (deposition,
interrogatory, request for documents, subpoena, civil investigation demand or
similar process) to disclose any of the Confidential Material, it is agreed that
such Party will provide the other Party with prompt notice of such request(s) so
that the other Party may seek an appropriate protective order or other
appropriate remedy and/or waive compliance with the provisions of this
Agreement. In the event that such protective order or other remedy is not
obtained, or a waiver is not granted hereunder, only that portion of the
Confidential Material which, in the written opinion of counsel for the
disclosing Party, is legally compelled to be disclosed shall be disclosed
without liability hereunder and such Party will exercise its best efforts to
obtain reliable assurance that confidential treatment will be accorded any
Confidential Material so furnished.
6. Return Of Confidential Materials. Upon the written request of a Party,
the other Party and its Representatives will promptly deliver to the requesting
Party all Confidential Material (other than the PPA) received from that Party in
written and/or tangible form, including copies, reproductions or written
materials containing Confidential Material. In the event of such request, all
other notes, analyses, compilations or studies constituting Confidential
Material in the possession of the other Party or its Representatives will be
destroyed, with any such destruction certified by in writing; provided that a
Party shall be entitled to retain one (1) copy of all Confidential Material,
subject to the confidentiality requirements of this Agreement and under the
control of the office of the General Counsel of such Party.
7. Indemnity. Each Party hereby agrees to indemnify and hold harmless the
other Party from any damage, loss, cost or liability (including reasonable legal
fees and the cost of enforcing this indemnity) arising out of or resulting from
any use or disclosure by a Party or its Representatives of the Confidential
Material not authorized under this Agreement. The Parties acknowledge the
representations of the other Party that the Confidential Material is of a
special, unique, unusual and extraordinary character and agree that money
damages would be an insufficient remedy for any breach of this Agreement and
that any such breach would cause
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<PAGE>
irreparable harm. Accordingly, the Parties also agree that in the event of any
breach or threatened breach of this Agreement, the injured Party, in addition to
any other remedies it may have at law or in equity, shall be entitled, without
the requirement of posting a bond or any other security, to equitable relief,
including injunctive relief and specific performance against the other Party or
its Representatives.
8. No Waiver. It is understood and agreed that no failure or delay by a
Party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any right, power or
privilege hereunder.
9. Effective Date And Term. This Agreement shall be effective as of the
date first written above, and shall remain in effect for a period of [*] after
the expiration, termination or cancellation of the PPA.
10. Severability. If any provision of this Agreement shall be held or
deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the
same shall not affect any other provision or provisions herein contained or
render the same invalid, inoperative or unenforceable to any extent whatsoever.
11. Amendment. The terms and conditions set forth in this Agreement may be
modified or waived only by a written instrument executed by a duly authorized
officer of each of the Parties hereto. In addition, this Agreement shall be
binding upon and inure to the benefit of the Parties hereto and their respective
successors and permitted assigns.
12. Notices. Any notice, request, consent, waiver or other communication
required or permitted hereunder shall be effective only if it is in writing and
personally delivered or sent by certified or registered mail, postage prepaid,
or by nationally recognized overnight courier, addressed as set forth below:
If to Williams:
Williams Energy Marketing & Trading Company
One Williams Center
Tulsa, OK 74172
Attention: Contract Management
Facsimile: 918-594-1935
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<PAGE>
If to Seller:
AES Ironwood, L.L.C.
1001 North 19th Street
Arlington, VA 22209
Attention: General Counsel
Telephone: (703) 522-1315
Facsimile: (703) 528-4510
or to such other person or address as the addressee may have specified in a
notice duly given to the sender as provided herein. Such notice or communication
shall be deemed to have been given as of the date received by the recipient
thereof.
13. Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York, without regard
to any conflict of laws provisions of such laws.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
15. Entire Agreement. This Agreement constitutes the entire agreement of
the Parties with respect to the matters contained herein and all prior
agreements of the Parties with respect to the matters contained herein,
including without limitation that certain Confidentiality Agreement between the
Parties, dated as of July 31, 1997, are superseded.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first set forth
above.
AES Ironwood, L.L.C.
By:
--------------------------------------
Name:
Title:
Williams Energy Marketing & Trading
Company
By:
--------------------------------------
Name:
Title:
[CONFIDENTIALITY AGREEMENT]
<PAGE>
APPENDIX 3
EXEMPT WHOLESALE GENERATOR CERTIFICATION
[*]
3--1
<PAGE>
APPENDIX 4.A
PRELIMINARY SINGLE-LINE DIAGRAM SHOWING
GAS AND OIL DELIVERY POINTS
[*]
4.A--1
<PAGE>
APPENDIX 4.B
PRELIMINARY SINGLE-LINE DIAGRAM SHOWING
ELECTRIC DELIVERY POINTS
[*]
4.B--1
<PAGE>
APPENDIX 5
GUARANTY BY
THE AES CORPORATION
GUARANTY (this "Guaranty"), dated as of February __, 1999, by The AES
Corporation, a Delaware corporation (the "Guarantor"), in favor of Williams
Energy Marketing & Trading Company, a Delaware corporation ("Guaranteed Party"),
pursuant to Section 19.2 of that certain Amended and Restated Power Purchase
Agreement, dated as of February 5, 1999, by and between Guaranteed Party and AES
Ironwood, L.L.C., a Delaware limited liability company (the "Company"), as
modified or supplemented from time to time (the "PPA").
RECITALS
WHEREAS, Guaranteed Party has agreed to enter into the PPA in reliance
upon the Guarantor's agreement, pursuant to the terms and conditions set forth
below, to provide this Guaranty to Guaranteed Party; and
WHEREAS, Guarantor is willing to provide this Guaranty to Guaranteed
Party, on the terms and conditions set forth below, as an inducement to
Guaranteed Party to enter into the PPA with the Company.
NOW, THEREFORE, in consideration of the above premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be bound hereby, the Guarantor agrees as follows:
1. Obligations of Guarantor. Subject to the Guaranty Cap set forth in
Section 2 of this Guaranty, the Guarantor unconditionally and irrevocably
guaranties, as primary obligor and not merely as surety, to and for the benefit
of Guaranteed Party, prompt and complete payment of all damage amounts due and
payable to Guaranteed Party by the Company under and pursuant to Section 19.1 of
the PPA, together with any and all reasonable expenses (including reasonable
attorneys' fees and expenses) incurred by Guaranteed Party in enforcing this
Guaranty, (collectively, the "Obligations"). Subject to the Guaranty Cap set
forth in Section 2 of this Guaranty, the Guarantor agrees, that upon the failure
of the Company to pay any of the Obligations when they become due, the Guarantor
will pay, or cause to be paid, to Guaranteed Party any and all such unpaid
Obligations.
2. Maximum Guaranteed Amount. The aggregate liability of the Guarantor
under this Guaranty and Guaranteed Party's right to recovery hereunder is
limited to a total aggregate amount of [*] (the "Guaranty Cap").
3. Nature of Obligations. The Guarantor guaranties that the Obligations
shall be paid strictly in accordance with the terms of the PPA, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of
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<PAGE>
Guaranteed Party with respect thereto. The duties of the Guarantor under this
Guaranty are independent of the Obligations, and a separate action or actions
may be brought and prosecuted against the Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against the Company or whether the
Company is joined in any such action or actions. Guaranteed Party shall not be
obligated to file any claim relating to the Obligations if the Company becomes
subject to a bankruptcy, reorganization or similar proceeding and neither the
failure of Guaranteed Party to so file, nor the existence of any such
proceeding, shall affect the Guarantor's obligations hereunder. The liability of
the Guarantor under this Guaranty as specified in Section 1 of this Guaranty
shall, to the fullest extent permitted by law, be absolute and unconditional
irrespective of:
(i) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to departure from the PPA,
including, without limitation, any increase in the Obligations;
provided, however, no action taken pursuant to this Section 3(i)
shall be construed to extend the term of this Guaranty or increase
the amount of the Guaranty Cap;
(ii) any manner of sale or other disposition of assets of
the Company or any of its Affiliates (as such term is defined in
the PPA); or
(iii) any change, restructuring or termination of the
structure or existence of the Company or any of its Affiliates.
The Guarantor shall not contest the amount, Guaranteed Party's right to
collect, or Guaranteed Party's collection of, the Obligations (as they may be
revised from time to time as provided for herein) in any future proceeding
including, without limitation, civil, criminal, regulatory, administrative,
judicial, equitable, or appellate, on the basis that the Obligations constitute
a penalty, are or will result in a forfeiture, or are otherwise unlawful;
provided, however, that, notwithstanding anything to the contrary contained
herein, the Guarantor may assert that Guaranteed Party's actual damages are less
than the Obligations, contest liability or assert any other claim or defense
that the Company could assert, except as expressly limited herein, so long as
the Guarantor does not duplicate or reassert any claims or initiate any
proceedings that were resolved or concluded previously by the Company.
The Guarantor agrees that the obligations of the Guarantor set forth in
this Guaranty shall be direct obligations of the Guarantor, and such obligations
shall be absolute and unconditional and shall not be subject to any
counterclaim, set-off, deduction, diminution, abatement, recoupment, suspension,
deferment, reduction or defense (other than full and strict compliance by the
Guarantor with its obligations hereunder) based upon any claim the Guarantor or
any other Person (as such term is defined in the PPA) may have against
Guaranteed Party or the Company. This Guaranty shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of any of the
Obligations is rescinded or must otherwise be returned upon the insolvency,
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<PAGE>
bankruptcy or reorganization of the Company or otherwise, all as though such
payment had not been made.
4. Waiver. The Guarantor hereby waives demand, promptness, diligence,
presentment, notice of acceptance, notice of protest for non-payment and any
other notice or similar action with respect to any of the Obligations and this
Guaranty and any requirement that Guaranteed Party exhaust any right or take any
action against the Company or any other Person.
5. Subrogation. The Guarantor shall not exercise any rights which it may
acquire by way of subrogation under this Guaranty, by any payment made hereunder
or otherwise, until all Obligations and all other amounts payable under this
Guaranty shall have been paid in full to Guaranteed Party. If any amount shall
be paid to the Guarantor on account of any subrogation rights at any time prior
to the payment in full of the Obligations and all other amounts payable under
this Guaranty, such amount(s) shall be paid immediately to Guaranteed Party to
be credited and applied to the Obligations, whether matured or unmatured, in
accordance with the terms hereof and the PPA. Upon full payment of the
Obligations and all other amounts payable under this Guaranty, Guarantor shall
be subrogated to the rights of Guaranteed Party, and Guaranteed Party shall take
all such reasonable actions, at the Guarantor's sole expense, as Guarantor shall
reasonably request to effect such subrogation rights.
6. Certain Rights and Powers of Guaranteed Party. Guaranteed Party shall
have all of the rights and remedies available under applicable law and may
proceed by appropriate court action to enforce the terms hereof and to recover
damages for the breach hereof. Each and every remedy of Guaranteed Party shall,
to the extent permitted by law, be cumulative and shall be in addition to any
other remedy now or hereafter existing at law or in equity. At the option of
Guaranteed Party and upon notice to the Guarantor, the Guarantor may be joined
in any action or proceeding commenced by Guaranteed Party against the Company in
respect of any Obligation, and recovery may be had against the Guarantor in such
action or proceeding or in any independent action or proceeding against the
Guarantor, without any requirement that Guaranteed Party first assert, prosecute
or exhaust any remedy or claim against the Company.
7. Representations and Warranties. The Guarantor represents and warrants to
Guaranteed Party as follows:
(a) Organization and Good Standing. The Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and each jurisdiction in which it currently conducts its business. The
Guarantor has all requisite corporate power and authority to carry on its
business at it is now conducted and as contemplated by this Guaranty, and to
enter into and perform its obligations hereunder.
(b) Due Authorization; No Conflicts. The execution, delivery and
performance by the Guarantor of the Guaranty has been duly and effectively
authorized by all necessary corporate action of the Guarantor. No other
corporate proceedings are necessary to authorize the execution and delivery by
the Guarantor of this Guaranty; and this Guaranty is the valid and
5--3
<PAGE>
binding obligation of Guarantor, enforceable in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency or similar laws from time to time in effect that affect creditors'
rights generally or by general principles of equity. Neither the execution and
delivery of this Guaranty nor compliance by the Guarantor with any of the
provisions hereof will (i) violate, or conflict with, or result in a breach of
any provisions of, or constitute a default (or an event which, with notice or
laps of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result in the
creation of any lien upon any of the properties or assets of the Guarantor under
any of the terms, conditions or provisions of, the Certificate of Incorporation
or By-Laws of the Guarantor in effect on the date of this Guaranty (hereinafter,
the "Effective Date") or any agreement or other instrument or obligation to
which the Guarantor is a party at the Effective Date, or by which the Guarantor
or any of its properties or assets or may be bound or affected as of the
Effective Date, or (ii) violate any order, writ, injunction decree, arbitration
award, statute, rule or regulation applicable at the Effective Date to the
Guarantor or any of its properties or assets.
(c) No Consent Required. No permit, authorization, consent, approval,
waiver, exception, variance, ruling, order decree, exemption, filing, recording,
registration, notice or declaration (collectively, "Governmental Approval"), is
required or to be made on the Guarantor's behalf with any federal, state,
county, municipal, regional, local, territorial or other governmental
department, regulatory body, commission, board, bureau, agency, taxing authority
or other instrumentality (collectively, "Governmental Authority") to authorize
the execution and delivery of this Guaranty or the taking of any future action
contemplated hereby, except for those Governmental Approvals (i) which have
already been obtained or (ii) the failure of which to obtain would not have an
adverse effect on the ability of the Guarantor to perform and satisfy its
obligations hereunder.
(d) No Default under Other Agreements. The Guarantor is not in default, and
no condition exists that with notice or lapse of time or both would constitute a
default, under any mortgage, deed of trust, indenture or other instrument or
agreement to which it is a party or by which it or any of its properties or
assets may be bound, that would have a material adverse effect on the
Guarantor's ability to perform under this Guaranty; and the Guarantor is not in
violation of any federal, state, or local rules, ordinances, judgments, decrees,
injunctions, writs, interpretations, licenses and permits or orders of any
court, arbitrator (collectively, "Requirements of Law"), or Governmental
Authority that could have a material adverse effect on the Guarantor's ability
to perform under this Guaranty.
(e) Litigation. There is no litigation, proceeding, arbitration or
government investigation pending or, so far as known to the Guarantor,
threatened with respect to or otherwise relating to the Guarantor which if
adversely determined could, in any one case or in the aggregate, have a material
adverse effect on the ability of the Guarantor to comply with its obligations
under this Guaranty.
5--4
<PAGE>
(f) Compliance with Law. (i) The Guarantor has complied in all material
respects with all Requirements of Law relating to this Guaranty, the Guarantor
has received no written notice to the effect that, or otherwise been advised in
writing that, it is not in compliance with any requirement of law or
governmental approval relating to this Guaranty, and the Guarantor has no reason
to believe that any currently existing circumstances are likely to result in
violations by the Guarantor of any such requirement of law which could in any
one case or in the aggregate, have a material adverse effect on the ability of
the Guarantor to perform under this Guaranty; and (ii) to the best of the
knowledge of the Guarantor, there is not now pending any proceeding, hearing or
investigation with respect to the adoption of amendments or modifications to any
existing requirement of law or governmental approval with respect to such
matters which, if adopted, would have a material adverse effect on the ability
of the Guarantor to comply with its obligations under the Guaranty.
8. Covenants. The Guarantor covenants and agrees that, so long as any part
of the Obligations shall remain unpaid, the Guarantor shall:
(a) Performance and Compliance with Other Agreements. Perform and comply
with each of the material provisions of each material indenture, credit
agreement, contract or other agreement by which the Guarantor is bound,
non-performance or non-compliance with which would have a material adverse
effect on its ability to perform its obligations hereunder, except material
contracts or other agreements being contested in good faith.
(b) Preservation of Corporate Existence, Etc. Preserve and maintain its
corporate existence and preserve its material rights, franchises and privileges
to conduct its business substantially as conducted on the date hereof.
(c) Compliance with Laws, Etc. Comply with all Requirements of Law and
Governmental Approvals, non-compliance with which would have a material adverse
effect on its ability to perform its obligations herein, except laws, rules,
regulations and orders being contested in good faith.
(d) Notice of Breach. Provide, as soon as possible and in any event within
three (3) business days after the occurrence of any default or breach of the
obligations applicable to the Guarantor hereunder, a statement of the Chief
Financial Officer or Vice-President and Treasurer of the Guarantor setting forth
details of the circumstances leading to such breach or default hereof and the
action which the Guarantor proposes to take with respect thereto.
(e) Mergers, Etc. Not merge with any person, corporation, partnership, or
other entity unless: (i) the surviving and resulting entity agrees in writing to
be bound hereby to the same extent as the Guarantor, and (ii) immediately after
giving effect thereto, no event of default or breach of this Guaranty shall have
occurred and be continuing.
9. No Waiver. No failure on the part of Guaranteed Party to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial
5--5
<PAGE>
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.
10. Continuing Guaranty. This Guaranty is a continuing guaranty and shall
(i) remain in full force and effect until the payment in full of all amounts
payable under this Guaranty, (ii) be binding upon the Guarantor, its successors
and assigns, and (iii) inure to the benefit of, and be enforceable by,
Guaranteed Party and its successors, transferees and assigns.
11. Waiver of Notices. The Guarantor hereby unconditionally and irrevocably
waives all notices to and demands upon Ironwood or the Guarantor and all other
formalities, the omission of any of which or delay in performance of which,
might, but for the provisions of this paragraph, by rule of law, under equitable
principles or otherwise, constitute grounds for relieving or discharging the
Guarantor in whole or in part from its obligations hereunder.
12. No Consequential Damages. Neither Party shall be liable to the other
under this Guaranty or otherwise for any exemplary, consequential, special, or
punitive losses or damages that may be incurred by either Party as a result of
their execution of and performance under this Guaranty.
13. Further Assurances. The Guarantor, at its sole cost and expense, shall
cause to be promptly and duly taken, executed, acknowledged and delivered, such
further documents and instruments as Guaranteed Party may from time to time
reasonably request in order to carry-out more effectively the intent and
purposes of this Guaranty.
14. Severability. If any provision of this Guaranty shall be held or deemed
to be or shall, in fact, be illegal, inoperative or unenforceable, the same
shall not affect any other provision or provisions herein contained or render
the same invalid, inoperative or unenforceable to any extent whatsoever.
15. Counterparts; Effectiveness. This Guaranty may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument. The effective
date of this Guaranty for all purposes shall be the date specified on page one
(1) above.
16. Amendment; Waiver; Requirement of Writing. This Guaranty cannot be
amended, changed, modified, released or discharged except by a writing signed by
the party against whom enforcement of the amendment, change, modification or
waiver is sought.
17. Address for Notices. Any notice, request, consent, waiver or other
communication required or permitted hereunder shall be effective only if it is
in writing and personally delivered or sent by certified or registered mail,
postage prepaid, or by nationally recognized overnight courier, addressed as set
forth below:
5--6
<PAGE>
If to Guaranteed Party:
Williams Energy Marketing and Trading Company
One Williams Center
Tulsa, OK 74172
Attention: Credit
Telephone: (918) 573-3792
Facsimile: (918) 573-8881
If to Guarantor:
The AES Corporation
1001 North 19th Street
Arlington, VA 22209
Attention: General Counsel
Telephone: (703) 522-1315
Facsimile: (703) 528-4510
or to such other person or address as the addressee may have specified in a
notice duly given to the sender as provided herein. Such notice or communication
shall be deemed to have been given as of the date received by the recipient
thereof.
18. Governing Law. This Guaranty shall be construed in accordance with and
governed by the laws of the State of New York , without regard to the conflict
of laws provisions of such laws.
19. Submission to Jurisdiction. Each of Guaranteed Party and the Guarantor
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Guaranty, or for recognition and enforcement of any judgment in
respect thereof, to the exclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of the Southern District of
New York, and appellate courts with jurisdiction over any appeals therefrom;
(b) consents and agrees that any such action or proceeding may be brought
in and only in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to its address set forth
in Section 17 of this Guaranty, or at such other address of which the other
party shall have been notified pursuant thereto; and
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<PAGE>
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law.
20. Assignment; Termination. This Guaranty may be assigned by the Guarantor
only with the prior written consent of Guaranteed Party, which consent shall not
be unreasonably withheld. Guaranteed Party may assign this Guaranty only as
permitted under the PPA with respect to assignments by Guaranteed Party of its
rights thereunder. This Guaranty shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and permitted assigns.
This Guaranty shall terminate, and Guarantor shall have no further liability or
obligations hereunder, (i) upon the Commercial Operation Date (as defined in the
PPA) or, (ii) if the Commercial Operation Date, as such date may be extended
pursuant to Section 2.1(a) of the PPA, is not achieved, when the Company has
fully and completely paid all amounts to Guaranteed Party that are required to
be paid by it under and pursuant to Section 19.1 of the PPA, or when such
amounts have been paid by Guarantor up to the Guaranty Cap set forth in Section
2 of this Guaranty, or (iii) pursuant to the provisions of Section 19.2(b) of
the PPA.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
5--8
<PAGE>
IN WITNESS WHEREOF, the Guarantor and Guaranteed Party have each caused
this Guaranty to be executed on its behalf by its duly authorized office as of
the date shown above.
The AES Corporation
as Guarantor
By:
--------------------------------------
Name:
Title:
ACCEPTED AND ACKNOWLEDGED:
WILLIAMS ENERGY MARKETING & TRADING
COMPANY
By:
--------------------------------------
Name:
Title:
[GUARANTY BY THE AES CORPORATION]
<PAGE>
APPENDIX 6
GUARANTY BY
WILLIAMS HOLDINGS OF DELAWARE, INC.
GUARANTY (this "Guaranty"), dated as of February __, 1999, by Williams
Holdings of Delaware, Inc., a Delaware corporation (the "Guarantor"), in favor
of AES Ironwood, L.L.C., a Delaware limited liability company ("Guaranteed
Party"), pursuant to Section 19.3 of that certain Amended and Restated Power
Purchase Agreement, dated as of February 5, 1999, by and between Guaranteed
Party and Williams Energy Marketing & Trading Company, a Delaware corporation
and a subsidiary of Guarantor (the "Company"), as modified or supplemented from
time to time (the "PPA").
RECITALS
WHEREAS, Guaranteed Party has agreed to enter into the PPA in reliance
upon the Guarantor's agreement, pursuant to the terms and conditions set forth
below, to provide this Guaranty to Guaranteed Party; and
WHEREAS, Guarantor is willing to provide this Guaranty to Guaranteed
Party, on the terms and conditions set forth below, as an inducement to
Guaranteed Party to enter into the PPA with the Company.
NOW, THEREFORE, in consideration of the above premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be bound hereby, the Guarantor agrees as follows:
1. Obligations of Guarantor. Subject to the Guaranty Cap set forth in
Section 2 of this Guaranty, the Guarantor unconditionally and irrevocably
guaranties, as primary obligor and not merely as surety, to and for the benefit
of Guaranteed Party, the prompt payment and performance when due of all present
and future obligations (i) of the Company to make Fixed Payments pursuant to,
and as such term is defined in, the PPA and (ii) to pay damages arising under
the PPA in respect of the Company's obligation to make Total Fixed Payments
under the PPA (including damages related to the loss of the Company's Total
Fixed Payments arising from any breach by the Company of the PPA or a
termination of the PPA for cause by Guaranteed Party) together with any and all
reasonable expenses (including reasonable attorneys' fees and expenses) incurred
by Guaranteed Party in enforcing this Guaranty (the obligations referred to in
clauses (i) and (ii) collectively and individually, the "Obligations"). Subject
to the Guaranty Cap set forth in Section 2 of this Guaranty, the Guarantor
agrees, that upon the failure of the Company to pay any of the Obligations when
they become due, the Guarantor will pay, or cause to be paid, to Guaranteed
Party any and all such unpaid Obligations.
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<PAGE>
2. Maximum Guaranteed Amount.
(a) The aggregate liability of the Guarantor under this Guaranty and
Guaranteed Party's right of recovery hereunder is limited to a total aggregate
amount of ___________ Million Dollars ($ ___________) [*] percent of Guaranteed
Party's initial debt related to financing of the Facility (as such term is [*]),
as reduced from time to time as provided for in the following paragraph (the
"Guaranty Cap").
(b) The Guaranty Cap shall in each semi-annual period commencing on January
1 of the first full calendar year after the Commercial Operation Date (as such
term is defined in the PPA), be reduced by the sum of (i) the proportion of the
amount set forth in Exhibit A hereto [which amounts shall equal the principal of
Guaranteed Party's initial debt amortized during such period] and corresponding
to such semiannual period that the amount of Fixed Payments for such semiannual
period actually paid by the Company under the PPA bears to the amount of Fixed
Payments due and payable for such semiannual period and (ii) without duplication
of amounts referred to in clause (i) of this paragraph (b), the amount paid by
the Guarantor in such semiannual period pursuant to the demand of or legal
action by Guaranteed Party. Each reduction in the Guaranty Cap shall be
automatic and without further action on the part of any Person (as such term is
defined in the PPA).
3. Nature of Obligations. The Guarantor guaranties that the Obligations
shall be paid strictly in accordance with the terms of the PPA, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of Guaranteed Party with respect
thereto. The duties of the Guarantor under this Guaranty are independent of the
Obligations, and a separate action or actions may be brought and prosecuted
against the Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against the Company or whether the Company is joined in any
such action or actions. Guaranteed Party shall not be obligated to file any
claim relating to the Obligations if the Company becomes subject to a
bankruptcy, reorganization or similar proceeding and neither the failure of
Guaranteed Party to so file, nor the existence of any such proceeding, shall
affect the Guarantor's obligations hereunder. The liability of the Guarantor
under this Guaranty as specified in Section 1 of this Guaranty shall, to the
fullest extent permitted by law, be absolute and unconditional irrespective of:
(i) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to departure from the PPA, including, without
limitation, any increase in the Obligations; provided, however, no action
taken pursuant to this Section 3(i) shall be construed to extend the term
of this Guaranty or increase the amount of the Guaranty Cap;
(ii) any manner of sale or other disposition of assets of the
Company or any of its Affiliates (as such term is defined in the PPA);
or
6--2
<PAGE>
(iii) any change, restructuring or termination of the structure
or existence of the Company or any of its Affiliates.
The Guarantor shall not contest the amount, Guaranteed Party's right to
collect, or Guaranteed Party's collection of, the Obligations (as they may be
revised from time to time as provided for herein) in any future proceeding
including, without limitation, civil, criminal, regulatory, administrative,
judicial, equitable, or appellate, on the basis that the Obligations constitute
a penalty, are or will result in a forfeiture, or are otherwise unlawful;
provided, however, that, notwithstanding anything to the contrary contained
herein, the Guarantor may assert that Guaranteed Party's actual damages are less
than the Obligations, contest liability or assert any other claim or defense
that the Company could assert, except as expressly limited herein, so long as
the Guarantor does not duplicate or reassert any claims or initiate any
proceedings that were resolved or concluded previously by the Company.
The Guarantor agrees that the obligations of the Guarantor set forth in
this Guaranty shall be direct obligations of the Guarantor, and such obligations
shall be absolute and unconditional and shall not be subject to any
counterclaim, set-off, deduction, diminution, abatement, recoupment, suspension,
deferment, reduction or defense (other than full and strict compliance by the
Guarantor with its obligations hereunder) based upon any claim the Guarantor or
any other Person (as such term is defined in the PPA) may have against
Guaranteed Party or the Company. This Guaranty shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of any of the
Obligations is rescinded or must otherwise be returned upon the insolvency,
bankruptcy or reorganization of the Company or otherwise, all as though such
payment had not been made.
4. Waiver. The Guarantor hereby waives demand, promptness, diligence,
presentment, notice of acceptance, notice of protest for non-payment and any
other notice or similar action with respect to any of the Obligations and this
Guaranty and any requirement that Guaranteed Party exhaust any right or take any
action against the Company or any other Person.
5. Subrogation. The Guarantor shall not exercise any rights which it may
acquire by way of subrogation under this Guaranty, by any payment made hereunder
or otherwise, until all Obligations and all other amounts payable under this
Guaranty shall have been paid in full to Guaranteed Party. If any amount shall
be paid to the Guarantor on account of any subrogation rights at any time prior
to the payment in full of the Obligations and all other amounts payable under
this Guaranty, such amount(s) shall be paid immediately to Guaranteed Party to
be credited and applied to the Obligations, whether matured or unmatured, in
accordance with the terms hereof and the PPA. Upon full payment of the
Obligations and all other amounts payable under this Guaranty, Guarantor shall
be subrogated to the rights of Guaranteed Party, and Guaranteed Party shall take
all such reasonable actions, at the Guarantor's sole expense, as Guarantor shall
reasonably request to effect such subrogation rights.
6. Certain Rights and Powers of Guaranteed Party. Guaranteed Party shall
have all of the rights and remedies available under applicable law and may
proceed by appropriate court
6--3
<PAGE>
action to enforce the terms hereof and to recover damages for the breach hereof.
Each and every remedy of Guaranteed Party shall, to the extent permitted by law,
be cumulative and shall be in addition to any other remedy now or hereafter
existing at law or in equity. At the option of Guaranteed Party and upon notice
to the Guarantor, the Guarantor may be joined in any action or proceeding
commenced by Guaranteed Party against the Company in respect of any Obligation,
and recovery may be had against the Guarantor in such action or proceeding or in
any independent action or proceeding against the Guarantor, without any
requirement that Guaranteed Party first assert, prosecute or exhaust any remedy
or claim against the Company.
7. Representations and Warranties. The Guarantor represents and warrants to
Guaranteed Party as follows:
(a) Organization and Good Standing. The Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and each jurisdiction in which it currently conducts its business. The
Guarantor has all requisite corporate power and authority to carry on its
business at it is now conducted and as contemplated by this Guaranty, and to
enter into and perform its obligations hereunder.
(b) Due Authorization; No Conflicts. The execution, delivery and
performance by the Guarantor of the Guaranty has been duly and effectively
authorized by all necessary corporate action of the Guarantor. No other
corporate proceedings are necessary to authorize the execution and delivery by
the Guarantor of this Guaranty; and this Guaranty is the valid and binding
obligation of Guarantor, enforceable in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency or
similar laws from time to time in effect that affect creditors' rights generally
or by general principles of equity. Neither the execution and delivery of this
Guaranty nor compliance by the Guarantor with any of the provisions hereof will
(i) violate, or conflict with, or result in a breach of any provisions of, or
constitute a default (or an event which, with notice or laps of time or both,
would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in the creation of any lien
upon any of the properties or assets of the Guarantor under any of the terms,
conditions or provisions of, the Certificate of Incorporation or By-Laws of the
Guarantor in effect on the date of this Guaranty (hereinafter, the "Effective
Date") or any agreement or other instrument or obligation to which the Guarantor
is a party at the Effective Date, or by which the Guarantor or any of its
properties or assets or may be bound or affected as of the Effective Date, or
(ii) violate any order, writ, injunction decree, arbitration award, statute,
rule or regulation applicable at the Effective Date to the Guarantor or any of
its properties or assets.
(c) No Consent Required. No permit, authorization, consent, approval,
waiver, exception, variance, ruling, order decree, exemption, filing, recording,
registration, notice or declaration (collectively, "Governmental Approval"), is
required or to be made on the Guarantor's behalf with any federal, state,
county, municipal, regional, local, territorial or other governmental
department, regulatory body, commission, board, bureau, agency, taxing authority
or other instrumentality (collectively, "Governmental Authority") to authorize
the execution and
6--4
<PAGE>
delivery of this Guaranty or the taking of any future action contemplated
hereby, except for those Governmental Approvals (i) which have already been
obtained or (ii) the failure of which to obtain would not have an adverse effect
on the ability of the Guarantor to perform and satisfy its obligations
hereunder.
(d) No Default under Other Agreements. The Guarantor is not in default, and
no condition exists that with notice or lapse of time or both would constitute a
default, under any mortgage, deed of trust, indenture or other instrument or
agreement to which it is a party or by which it or any of its properties or
assets may be bound, that would have a material adverse effect on the
Guarantor's ability to perform under this Guaranty; and the Guarantor is not in
violation of any federal, state, or local rules, ordinances, judgments, decrees,
injunctions, writs, interpretations, licenses and permits or orders of any
court, arbitrator (collectively, "Requirements of Law"), or Governmental
Authority that could have a material adverse effect on the Guarantor's ability
to perform under this Guaranty.
(e) Litigation. There is no litigation, proceeding, arbitration or
government investigation pending or, so far as known to the Guarantor,
threatened with respect to or otherwise relating to the Guarantor which if
adversely determined could, in any one case or in the aggregate, have a material
adverse effect on the ability of the Guarantor to comply with its obligations
under this Guaranty.
(f) Compliance with Law. (i) The Guarantor has complied in all material
respects with all Requirements of Law relating to this Guaranty, the Guarantor
has received no written notice to the effect that, or otherwise been advised in
writing that, it is not in compliance with any requirement of law or
governmental approval relating to this Guaranty, and the Guarantor has no reason
to believe that any currently existing circumstances are likely to result in
violations by the Guarantor of any such requirement of law which could in any
one case or in the aggregate, have a material adverse effect on the ability of
the Guarantor to perform under this Guaranty; and (ii) to the best of the
knowledge of the Guarantor, there is not now pending any proceeding, hearing or
investigation with respect to the adoption of amendments or modifications to any
existing requirement of law or governmental approval with respect to such
matters which, if adopted, would have a material adverse effect on the ability
of the Guarantor to comply with its obligations under the Guaranty.
8. Covenants. The Guarantor covenants and agrees that, so long as any part
of the Obligations shall remain unpaid, the Guarantor shall:
(a) Performance and Compliance with Other Agreements. Perform and comply
with each of the material provisions of each material indenture, credit
agreement, contract or other agreement by which the Guarantor is bound,
non-performance or non-compliance with which would have a material adverse
effect on its ability to perform its obligations hereunder, except material
contracts or other agreements being contested in good faith.
6--5
<PAGE>
(b) Preservation of Corporate Existence, Etc. Preserve and maintain its
corporate existence and preserve its material rights, franchises and privileges
to conduct its business substantially as conducted on the date hereof.
(b) Compliance with Laws, Etc. Comply with all Requirements of Law and
Governmental Approvals, non-compliance with which would have a material adverse
effect on its ability to perform its obligations herein, except laws, rules,
regulations and orders being contested in good faith.
(c) Notice of Breach. Provide, as soon as possible and in any event within
three (3) business days after the occurrence of any default or breach of the
obligations applicable to the Guarantor hereunder, a statement of the Chief
Financial Officer or Vice-President and Treasurer of the Guarantor setting forth
details of the circumstances leading to such breach or default hereof and the
action which the Guarantor proposes to take with respect thereto.
(d) Mergers, Etc. Not merge with any person, corporation, partnership, or
other entity unless: (i) the surviving and resulting entity agrees in writing to
be bound hereby to the same extent as the Guarantor, and (ii) immediately after
giving effect thereto, no event of default or breach of this Guaranty shall have
occurred and be continuing.
9. No Waiver. No failure on the part of Guaranteed Party to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right.
10. Continuing Guaranty. This Guaranty is a continuing guaranty and shall
(i) remain in full force and effect until the payment in full of all amounts
payable under this Guaranty, (ii) be binding upon the Guarantor, its successors
and assigns, and (iii) inure to the benefit of, and be enforceable by,
Guaranteed Party and its successors, transferees and assigns.
11. Waiver of Notices. The Guarantor hereby unconditionally and irrevocably
waives all notices to and demands upon the Company or the Guarantor and all
other formalities, the omission of any of which or delay in performance of
which, might, but for the provisions of this paragraph, by rule of law, under
equitable principles or otherwise, constitute grounds for relieving or
discharging the Guarantor in whole or in part from its obligations hereunder.
12. No Consequential Damages. Neither Party shall be liable to the other
under this Guaranty or otherwise for any exemplary, consequential, special, or
punitive losses or damages that may be incurred by either Party as a result of
their execution of and performance under this Guaranty.
13. Further Assurances. The Guarantor, at its sole cost and expense, shall
cause to be promptly and duly taken, executed, acknowledged and delivered, such
further documents and
6--6
<PAGE>
instruments as Guaranteed Party may from time to time reasonably request in
order to carry-out more effectively the intent and purposes of this Guaranty.
14. Severability. If any provision of this Guaranty shall be held or deemed
to be or shall, in fact, be illegal, inoperative or unenforceable, the same
shall not affect any other provision or provisions herein contained or render
the same invalid, inoperative or unenforceable to any extent whatsoever.
15. Counterparts; Effectiveness. This Guaranty may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument. The effective
date of this Guaranty for all purposes shall be the date specified on page one
(1) above.
16. Amendment; Waiver; Requirement of Writing. This Guaranty cannot be
amended, changed, modified, released or discharged except by a writing signed by
the party against whom enforcement of the amendment, change, modification or
waiver is sought.
17. Address for Notices. Any notice, request, consent, waiver or other
communication required or permitted hereunder shall be effective only if it is
in writing and personally delivered or sent by certified or registered mail,
postage prepaid, or by nationally recognized overnight courier, addressed as set
forth below:
If to Guaranteed Party:
The AES Corporation
1001 North 19th Street
Arlington, VA 22209
Attention: General Counsel
Telephone: (703) 522-1315
Facsimile: (703) 528-4510
If to Guarantor:
Williams Holdings of Delaware, Inc.
One Williams Center
Tulsa, OK 74172
Attention: Treasurer
Telephone: (918) 573-5551
Facsimile: (918) 573-2065
or to such other person or address as the addressee may have specified in a
notice duly given to the sender as provided herein. Such notice or communication
shall be deemed to have been given as of the date received by the recipient
thereof.
6--7
<PAGE>
18. Governing Law. This Guaranty shall be construed in accordance with and
governed by the laws of the State of New York without regard to the conflict of
laws provisions of such laws.
18. Submission to Jurisdiction. Each of Guaranteed Party and the Guarantor
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Guaranty, or for recognition and enforcement of any judgment in
respect thereof, to the exclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of the Southern District of
New York, and appellate courts with jurisdiction over any appeals therefrom;
(b) consents and agrees that any such action or proceeding may be brought
in and only in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to its address set forth
in Section 17 of this Guaranty, or at such other address of which the other
party shall have been notified pursuant thereto; and
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law.
20. Assignment. This Guaranty may be assigned by the Guarantor only with
prior written consent of Guaranteed Party, which consent shall not be
unreasonably withheld. Guaranteed Party may assign this Guaranty only as
permitted under the PPA with respect to assignments by Guaranteed Party of its
rights thereunder. This Guaranty shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and permitted assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
6--8
<PAGE>
IN WITNESS WHEREOF, the Guarantor and Guaranteed Party have each caused
this Guaranty to be executed on its behalf by its duly authorized office as of
the date shown above.
WILLIAMS HOLDINGS OF DELAWARE, INC.
as Guarantor
By:
--------------------------------------
Name:
Title:
ACCEPTED AND ACKNOWLEDGED:
THE AES CORPORATION
By:
--------------------------------------
Name:
Title:
[GUARANTY BY WILLIAMS HOLDINGS OF DELAWARE, INC.]
<PAGE>
APPENDIX 7
LIST OF THIRD PARTY ENGINEERS
[*]
7--1
<PAGE>
APPENDIX 8
FUEL OIL SPECIFICATIONS
[*]
8--1
<PAGE>
An Asterisk ([*]) indicates that confidential information has been
omitted and filed separately with the Securities and Exchange Commission as part
of a Confidential Treatment Request.
AMENDMENT NO. 1 TO
AMENDED AND RESTATED
POWER PURCHASE AGREEMENT
AMENDMENT NO. 1 TO AMENDED AND RESTATED POWER PURCHASE AGREEMENT, dated
as of June 18, 1999 ("Amendment No. 1") by and among AES Ironwood, L.L.C., a
Delaware limited liability company ("Seller") and Williams Energy Marketing &
Trading Company, a Delaware company ("Williams") (Seller and Williams each
hereinafter referred to as "Party" and collectively as the "Parties").
RECITALS
WHEREAS, Seller and Williams have entered into that certain Amended and
Restated Power Purchase Agreement, dated as of February 5, 1999 (the "PPA")
pursuant to which Ironwood has agreed, subject to the terms and conditions set
forth in the PPA, to sell to Williams certain capacity and ancillary services
and to provide to Williams energy conversion services; and
WHEREAS, the Parties desire to amend the PPA as set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and for
other consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereto each hereby agrees as follows:
AGREEMENT
SECTION 1. Capitalized Terms. Capitalized terms used but not defined
herein shall have the meanings specified in the PPA.
SECTION 2. Amendments. The PPA is hereby amended as follows:
(a) Section 1.1 of the PPA is hereby amended by revising the term "Gas
Facilities" set forth therein in the definition of "Force Majeure"
to read: "Gas Interconnection Facilities."
(b) [*]
(c) [*]
(d) [*]
-1-
<PAGE>
SECTION 3. Miscellaneous.
(1) Governing Law; Consent to Jurisdiction. This Amendment No. 1 shall
be governed by, and construed in accordance with, the law of the State of New
York.
(2) Headings. Headings in this Amendment No. 1 are included herein for
convenience of reference only and shall not constitute a part of this Amendment
No. 1 for any other purpose.
(3) Counterparts. This Amendment No. 1 may be executed in any number of
counterparts, which when so executed and delivered shall constitute one and the
same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-2-
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this Amendment No. 1
to be executed by its authorized representative as of the date first written
above.
AES IRONWOOD, L.L.C.
By: /s/ Patricia L. Rollin
-----------------------------
Name: Patricia L. Rollin
Title: Vice President
WILLIAMS ENERGY MARKETING &
TRADING COMPANY
By: /s/ Philip J. Scalzo
-----------------------------
Name: Philip J. Scalzo
Title: Vice President
[AMENDMENT NO. 1 TO PPA]
<PAGE>
Exhibit 10.3
EXECUTION VERSION
An asterisk ([*]) indicates that confidential information has been
omitted and filed separately with the Securities and Exchange Commission as part
of a Confidential Treatment Request.
- --------------------------------------------------------------------------------
AGREEMENT
FOR
ENGINEERING, PROCUREMENT
AND CONSTRUCTION SERVICES
BETWEEN
AES IRONWOOD, INC.
("OWNER")
AND
SIEMENS WESTINGHOUSE
POWER CORPORATION
("CONTRACTOR")
- --------------------------------------------------------------------------------
Dated as of
September 23, 1998
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS.........................................................1
1.1 DEFINITIONS...........................................................1
ARTICLE 2. CONTRACTOR'S SERVICES AND OTHER OBLIGATIONS.......................19
2.1 SERVICES TO BE PERFORMED.............................................19
2.2 COMMENCEMENT OF THE SERVICES.........................................40
2.3 PERFORMANCE..........................................................43
2.4 COMPLIANCE WITH APPLICABLE LAWS, APPLICABLE PERMITS AND
THE GUARANTEED EMISSIONS LIMITS......................................45
2.5 SAFETY PRECAUTIONS...................................................45
ARTICLE 3 SUBCONTRACTS.......................................................47
3.1 MAJOR SPECIALTY CONSULTANTS, SUBCONTRACTORS AND EQUIPMENT
SUPPLIERS............................................................47
3.2 PURCHASE ORDERS AND SUBCONTRACTS.....................................48
3.3 PAYMENTS TO SUBCONTRACTORS...........................................48
3.4 SUBCONTRACTOR WARRANTIES.............................................48
3.5 SUBCONTRACTOR INSURANCE..............................................49
3.6 NO PRIVITY WITH SUBCONTRACTORS.......................................49
3.7 REVIEW AND APPROVAL NOT RELIEF OF CONTRACTOR'S LIABILITY.............49
3.8 ASSIGNABILITY OF SUBCONTRACTS........................................50
3.9 QUALITY CONTROL......................................................50
ARTICLE 4 PRICE AND PAYMENT..................................................50
4.1 CONTRACT PRICE.......................................................50
4.2 PAYMENT SCHEDULE.....................................................50
4.3 PRICE ADJUSTMENTS....................................................54
4.4 PAYMENT UPON TERMINATION.............................................55
4.5 NO PAYMENT IN THE EVENT OF MATERIAL BREACH...........................57
4.6 ALL PAYMENTS SUBJECT TO RELEASE OF CLAIMS............................57
4.7 PAYMENT OR USE NOT ACCEPTANCE........................................59
4.8 SET-OFF..............................................................59
ARTICLE 5 OWNER SERVICES.....................................................59
5.1 REPRESENTATIVE.......................................................59
5.2 FACILITY SITE........................................................60
5.3 PERMITS AND REAL ESTATE RIGHTS.......................................60
5.4 START-UP PERSONNEL...................................................61
5.5 WATER, SPARE PARTS AND CONSUMABLES...................................61
5.6 UTILITIES............................................................62
5.7 FUEL.................................................................62
5.8 ELECTRIC INTERCONNECTION.............................................63
5.9 OWNER'S FAILURE TO MEET OBLIGATIONS..................................63
5.10 APPROVALS............................................................63
5.11 ADMINISTRATION OF THIRD PARTY PROJECT AGREEMENTS.....................64
5.12 AES PRE-FINANCIAL CLOSING GUARANTY...................................64
ARTICLE 6 COMPLETION AND ACCEPTANCE OF PROJECT...............................64
6.1 PROJECT START-UP; MECHANICAL COMPLETION..............................64
6.2 PERFORMANCE TESTS [AND PPA OUTPUT TESTS].............................67
6.3 PROVISIONAL PERFORMANCE ACCEPTANCE...................................70
(i)
<PAGE>
Page
----
6.3 PROVISIONAL ACCEPTANCE...............................................74
6.5 FINAL ACCEPTANCE.....................................................76
6.6 RELIABILITY RUN......................................................83
6.7 PROJECT COMPLETION...................................................85
ARTICLE 7 COMPLETION DATES...................................................86
7.1 GUARANTEED COMPLETION DATE...........................................86
7.2 GUARANTEED COMPLETION DATE PRICE REBATES.............................87
7.3 NOT USED.............................................................88
7.4 REBATES REASONABLE; PAYMENT OF REBATES; EXCLUSIVE REMEDY.............88
7.5 EARLY COMPLETION BONUS...............................................89
7.6 ACHIEVEMENT OF CONSTRUCTION PROGRESS MILESTONES......................90
ARTICLE 8 PRICE REBATE FOR FAILURE TO MEET PERFORMANCE GUARANTEES............92
8.1 PERFORMANCE GUARANTEES...............................................92
8.2 REBATES REASONABLE...................................................98
8.3 PAYMENT OF PERFORMANCE REBATES AND BONUS............................100
ARTICLE 9 LIABILITY AND DAMAGES.............................................102
9.1 LIMITATION OF LIABILITY.............................................102
9.2 CONSEQUENTIAL DAMAGES...............................................102
9.3 AGGREGATE LIABILITY OF CONTRACTOR...................................103
ARTICLE 10 WARRANTIES AND GUARANTEES........................................103
10.1 WARRANTIES AND GUARANTEES...........................................103
10.2 NO LIENS OR ENCUMBRANCES............................................105
10.3 LIMITATION OF WARRANTIES............................................106
ARTICLE 11 FORCE MAJEURE....................................................107
11.1 FORCE MAJEURE EVENT.................................................107
11.2 BURDEN OF PROOF.....................................................107
11.3 EXCUSED PERFORMANCE.................................................107
ARTICLE 12 SCOPE CHANGES....................................................108
12.1 FURTHER REFINEMENT, CORRECTIONS AND DETAILING NOT SCOPE
CHANGES.............................................................108
12.2 SCOPE CHANGES.......................................................109
12.3 PROCEDURE FOR SCOPE CHANGES.........................................109
12.4 SCOPE CHANGES DUE TO CONTRACTOR ERROR...............................110
12.5 SCOPE CHANGES DUE TO CHANGES IN LAW AND PERMITS.....................111
12.6 FAMILIARITY WITH CONDITIONS AND DOCUMENTATION.......................111
12.7 EFFECT OF FORCE MAJEURE EVENT.......................................112
12.8 PRICE CHANGE........................................................112
12.9 CONTINUED PERFORMANCE PENDING RESOLUTION OF DISPUTES................113
12.10 DOCUMENTATION.......................................................113
12.11 QUALITATIVE ENGINEERING.............................................113
12.12 HAZARDOUS MATERIALS.................................................114
ARTICLE 13 INDEMNIFICATION..................................................115
13.1 GENERAL INDEMNIFICATION.............................................115
13.2 ADDITIONAL INDEMNIFICATION..........................................115
13.3 PATENT AND COPYRIGHT INDEMNIFICATION................................116
13.4 HAZARDOUS MATERIALS LIABILITY.......................................117
13.5 NOTICE AND LEGAL DEFENSE............................................118
13.6 FAILURE TO DEFEND ACTION............................................118
13.7 SURVIVAL............................................................119
(ii)
<PAGE>
Page
----
ARTICLE 14 INSURANCE........................................................119
14.1 GENERAL.............................................................119
14.2 WORKER'S COMPENSATION INSURANCE.....................................119
14.3 COMMERCIAL GENERAL LIABILITY INSURANCE..............................119
14.4 AUTOMOBILE LIABILITY INSURANCE......................................120
14.5 COMMERCIAL UMBRELLA AND/OR EXCESS INSURANCE.........................120
14.6 SEVERABILITY OF INTEREST............................................120
14.7 BUILDER'S RISK INSURANCE............................................120
14.8 OCEAN MARINE CARGO INSURANCE........................................121
14.9 SUBCONTRACTOR INSURANCE.............................................122
14.10 WAIVER OF SUBROGATION...............................................122
14.11 CONTRACTOR'S WAIVER.................................................122
14.12 EVIDENCE OF COVERAGE................................................123
14.13 CONTRACTOR'S OR RENTED EQUIPMENT....................................123
14.14 DESCRIPTIONS NOT LIMITATIONS........................................124
14.15 COST OF PREMIUMS, RISK OF LOSS AND DEDUCTIBLES......................124
14.16 ADDITIONAL INSUREDS.................................................126
14.17 NO LIMITATION OF LIABILITY..........................................126
14.18 INSURANCE PRIMARY...................................................127
ARTICLE 15 TERMINATION......................................................127
15.1 TERMINATION FOR OWNER'S CONVENIENCE.................................127
15.2 TERMINATION BY CONTRACTOR...........................................129
15.3 CONSEQUENCES OF TERMINATION.........................................130
15.4 SURVIVING OBLIGATIONS...............................................132
ARTICLE 16 DEFAULT AND REMEDIES.............................................133
16.1 CONTRACTOR'S DEFAULT................................................133
16.2 OWNER'S RIGHTS AND REMEDIES.........................................136
ARTICLE 17 ASSIGNMENT.......................................................137
17.1 CONSENT REQUIRED....................................................137
17.2 SUCCESSORS AND ASSIGNS..............................................139
ARTICLE 18 DESIGN DOCUMENTS.................................................139
18.1 OWNER REVIEW........................................................139
18.2 REVIEW NOT RELEASE OF OBLIGATIONS...................................139
18.3 FINAL DOCUMENTS.....................................................140
18.4 OWNERSHIP...........................................................140
ARTICLE 19 CONFIDENTIAL INFORMATION.........................................140
19.1 CONFIDENTIALITY.....................................................140
19.2 PUBLICITY RELEASES..................................................142
ARTICLE 20 INSPECTION.......................................................143
20.1 PROJECT INSPECTION..................................................143
20.2 SUBSURFACE CONDITIONS...............................................143
20.3 SOIL AND TERRAIN INSPECTION.........................................144
ARTICLE 21 DISPUTE RESOLUTION...............................................145
21.1 DISPUTE RESOLUTION..................................................145
21.2 PERFORMANCE DURING DISPUTE..........................................146
(iii)
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Page
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ARTICLE 22 COST RECORDS; AUDITS.............................................146
22.1 MAINTENANCE OF RECORDS..............................................146
22.2 INSPECTION OF BOOKS, RECORDS AND AUDIT RIGHTS.......................146
22.3 QUALITY AUDITS......................................................146
ARTICLE 23 INDEPENDENT CONTRACTOR...........................................147
23.1 CONTRACTOR AS INDEPENDENT CONTRACTOR................................147
ARTICLE 24 REPRESENTATIONS AND WARRANTIES...................................147
24.1 REPRESENTATIONS AND WARRANTIES OF CONTRACTOR........................147
24.2 REPRESENTATIONS AND WARRANTIES OF OWNER.............................149
ARTICLE 25 MISCELLANEOUS....................................................151
25.1 PAST DUE AMOUNTS....................................................151
25.2 DELAY NOT WAIVER....................................................151
25.3 NO SET-OFF, DEDUCTION OR COUNTERCLAIM BY CONTRACTOR.................151
25.4 CHOICE OF LAW.......................................................151
25.5 SEVERABILITY........................................................151
25.6 NOTICE..............................................................152
25.7 SECTION HEADINGS....................................................153
25.8 ENTIRE AGREEMENT....................................................153
25.9 AMENDMENTS..........................................................153
25.10 CONFLICTING PROVISIONS..............................................153
25.11 NO THIRD PARTY RIGHTS...............................................153
25.12 OWNER'S OBLIGATIONS NON-RECOURSE....................................154
25.13 SURVIVAL OF PROVISIONS..............................................154
25.14 TITLE TO THE PROJECT................................................154
25.15 NOT USED............................................................154
25.16 TRANSFER............................................................154
25.17 COUNTERPARTS........................................................155
(iv)
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APPENDICES
Appendix A Scope of Services
Appendix B Payment and Milestone Schedule
Appendix C Project Schedule
Appendix D Performance Test Plan
Appendix E Approved Subcontractors List
Appendix F Applicable Permits
Appendix G Real Estate Rights Required by Contractor
Appendix H Facility Site Description
Appendix I-1 Form of Contractor's Final Waiver and Release
Appendix I-2 Form of Contractor's Interim Waiver and Release
Appendix I-3 Form of Subcontractor's Final Waiver and Release
Appendix J-1 Form of Preliminary Notice to Proceed
(Pre-EPC Agreement dated March __, 1998)
Appendix J-2 Form of Provisional Notice to Proceed
Appendix J-3 Form of Notice to Proceed (Full Construction Release)
Appendix K Quality Assurance Plan
Appendix L Form of EPC Guaranty
Appendix M Form of AES Pre-Financial Closing Guaranty
Appendix N Construction Progress Milestones
Appendix O Scope Options
Appendix P Table of Submittals and Approvals
Appendix Q List of Key Personnel
Appendix R Warranty Data Sheet
Appendix S NOT USED
Appendix T NOT USED
Appendix U Certain Subcontracts
(v)
<PAGE>
AGREEMENT dated as of September 23, 1998 by and between AES
IRONWOOD, INC., a Delaware corporation ("Owner"), and SIEMENS WESTINGHOUSE POWER
CORPORATION, a Delaware corporation ("Contractor").
W I T N E S S E T H :
WHEREAS, Contractor desires to provide and Owner desires to
obtain engineering, design, procurement, construction and related services for
the Project, all of which shall be provided on a lump sum, fixed price, turnkey
contract basis and in accordance with the terms and conditions herein specified;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto, intending to be legally
bound, hereby agree as follows:
ARTICLE 1
Definitions
1.1 Definitions. As used in this Agreement, the following
terms shall have the following meanings (such meanings as necessary to be
equally applicable to both the singular and plural forms of the terms defined):
"Accepted Electrical Practices" means those practices,
methods, standards, and equipment commonly used, from time to time, in
electrical engineering and operations to operate electrical equipment with
safety, dependability and efficiency and in accordance with the National
Electrical Safety Code, the National Electrical Code and the standards of the
Institute of Electrical and Electronic Engineers, the National Electrical
Manufacturers Association, the North American Electric Reliability Council, the
MidAtlantic Area Council, any regional power pool in which the Utility is a
participant, and the American National Standards Institute and any other
applicable statutes, codes, regulations and/or standards.
"AES" shall have the meaning set forth in Section 2.2 hereof.
"AES Pre-Financial Closing Guaranty" shall have the meaning
set forth in Section 2.2 hereof.
<PAGE>
"Agreement" means the Contract Document, all written
amendments, modifications and supplements hereto, all Scope Change Orders, and
the Appendices hereto, all of which by this reference are incorporated herein.
"Applicable Laws" means all laws, treaties, ordinances,
judgments, decrees, injunctions, writs and orders of any court, arbitrator or
governmental agency or authority, and rules, regulations, orders and
interpretations of any federal, state, county, municipal, regional,
environmental or other governmental body, instrumentality, agency, authority,
court or other body having jurisdiction over the Project and any activity
conducted at or in connection with the Project or on the Facility Site,
including, without limitation, construction of the Project on the Facility Site,
use or disposal of any Hazardous Material, transmission of electricity to the
Utility, performance of the Services, or operation of the Facility, as all of
the foregoing may be applicable and in effect from time to time.
"Applicable Permits" means all Permits required to be obtained
or maintained in connection with the construction of the Project on the Facility
Site, the transportation of all equipment and other items necessary for the
Project, the transmission of electricity to the Utility, the performance of the
Services, or the operation of the Project, as may be in effect from time to
time.
"Approved Plan" means a Plan approved by Owner and the
Independent Engineer pursuant to Section 7.2.1 or 7.6.2 hereof, as the case may
be.
"Approved Subcontractors List" shall have the meaning set
forth in Section 3.1 hereof.
"ASME" means the American Society of Mechanical Engineers or
any successor society thereto.
"Average Equivalent Availability" shall have the meaning set
forth in Appendix D hereto.
"Base Bid Scope Change" shall have the meaning set forth in
Section 4.3.1 hereof.
"BTU" means one British thermal unit.
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"Building Permits" means all Permits required to be obtained
or maintained in order for Contractor to perform the design, engineering,
procurement, site clearing, civil works and construction of the Facility on the
Facility Site (including, without limitation, the provision of machinery,
materials, labor and transportation services related thereto) or the performance
of the Services related to similar activities, including without limitation all
Permits required to allow Contractor to do business in the jurisdictions where
the Project is to be performed; provided, that if any such required Permits need
to be obtained in the name of Owner and not in the Contractor's or
Subcontractor's name, Owner shall cooperate with Contractor as reasonably
necessary to enable Contractor to obtain such Permits in the Owner's name.
Building Permits shall not include Permits pertaining to (i) environmental
regulation of the Facility Site (other than with respect to Contractor's
activities thereon in its performance of the Services), (ii) land use or zoning
matters affecting the Facility Site or (iii) environmental regulation of
start-up, testing or operation of the Facility.
"Commencement Date" means the date on which Contractor is to
commence performance of the Services pursuant to and as specified in the Notice
to Proceed delivered to Contractor by Owner pursuant to Section 2.2 hereof.
"Commercial Operation Date" means, with respect to the
Facility, the date upon which Owner will begin to sell, and the Utility will
begin to buy, energy and capacity pursuant to the terms of the Power Purchase
Agreement (including the satisfaction of all applicable conditions to the
"Commercial Operation Date" thereunder as specified therein).
"Common Components" means that portion of the Facility, as
further described in Appendix A hereto, comprised of all machinery, equipment
and components of the Facility (except for the machinery, equipment and
components solely comprising an individual Unit and not used in connection with
the operation of the other Unit), including without limitation the steam turbine
generator, all auxiliary equipment, the fuel handling and interconnection
facilities, the storage facilities, the water supply and treatment facilities
and the interface facilities described in Appendix A hereto.
3
<PAGE>
"Completed Performance Test" means, with respect to the
Facility, any Performance Test established as a Completed Performance Test in
accordance with the provisions of Section 6.2.7 hereof.
"Completed PPA Output Test" means, with respect to the
Facility, any PPA Output Test established as a Completed PPA Output Test in
accordance with the provisions of Section 6.2.7 hereof.
"Construction Progress Milestone Dates" means the dates, as
specified in Appendix N hereto, by which the Construction Progress Milestones
are required to have been fully completed in accordance with the standards of
performance set forth herein.
"Construction Progress Milestones" means the construction
progress milestones specified in Appendix N hereto.
"Contract Document" means this document consisting of Articles
1 through 25 hereof, as amended from time to time.
"Contractor" means Siemens Westinghouse Power Corporation, a
Delaware corporation, and its successors and permitted assigns, as contractor
hereunder.
"Contractor Indemnified Parties" shall have the meaning set
forth in Section 13.4 hereof.
"Contractor Payment Request" shall have the meaning set forth
in Section 4.2.2 hereof.
"Contractor Responsible Party" means Contractor or any of its
Subcontractors or any Person acting on behalf of, or under the direction or
supervision of, Contractor or any of its Subcontractors.
"Contractor Taxes" shall have the meaning set forth in Section
2.1.17(a) hereof.
"Contract Price" shall have the meaning set forth in Section
4.1 hereof.
"CPM Schedule" shall have the meaning set forth in Section
2.1.16 hereof.
4
<PAGE>
"Damages" shall have the meaning set forth in Section 13.1
hereof.
"Delay LD SubCap" shall have the meaning set forth in Section
9.1 hereof.
"Design Documents" shall have the meaning set forth in Section
2.1.2 hereof.
"Documents for Approval" shall have the meaning set forth in
Section 18.1 hereof.
"dollars" or "$" means the legal currency of the United
States.
"Electrical Interconnection Facilities" means all structures,
facilities, equipment, auxiliary equipment, devices and apparatus to be
constructed and installed by Contractor in accordance herewith and with the
Electrical Interconnection Requirements for the purpose of interconnecting the
Facility with the Utility's transmission system at the Electrical
Interconnection Point in order to enable the transmission thereon of the full
electric generating capacity of the Facility in accordance with Accepted
Electrical Practices, including without limitation all internal breakers,
relays, switches, synchronizing equipment, Electric Metering Equipment,
automatic regulation, communications, safety and other switchyard equipment and
facilities, Protective Apparatus and other protective and control equipment for
the Facility described in Appendix A hereto.
"Electrical Interconnection Point" means that point (as
further described in Appendix A hereto) at which the Facility is to be
interconnected with the Utility's transmission system.
"Electrical Interconnection Requirements" means the
requirements of the Utility for the Facility's interconnection with the
Utility's transmission system as set forth in Appendix 2 to the Power Purchase
Agreement, as such requirements may be amended, supplemented or modified from
time to time; provided, that if any such amendment, supplement or modification
materially affects the Services to be performed by Contractor hereunder, and
Contractor has not consented in writing thereto (which consent shall not be
unreasonably withheld), the Electrical Interconnection Requirements as defined
herein shall not include such
5
<PAGE>
amendment, supplement or modification to the extent the Services are so affected
thereby, unless a Scope Change Order has been issued in accordance with Article
12 with respect thereto.
"Electric Metering Equipment" shall have the meaning set forth
in Appendix A hereto.
"Electrical Output Guarantees" shall have the meaning set
forth in Section 8.1.1.1 hereof.
"Emergency" means a circumstance or situation that, in the
opinion of Contractor or Owner, may endanger the safety of persons or the
Project.
"EPC Guarantor" means Siemens Corporation, and its successors
and permitted assigns, as guarantor under the EPC Guaranty.
"EPC Guaranty" shall have the meaning set forth in Section
2.1.27 hereof.
"Equipment" shall mean all of the materials, apparatus,
structures, tools, supplies or other goods provided by Contractor or any
Subcontractor which are incorporated into the Facility or provided by Contractor
as part of the Services and retained by the Owner after Final Acceptance in
accordance with this Agreement.
"Equivalent Operating Hours" shall have the meaning specified
in Section V(g) of Appendix A hereto.
"Facility" means the combined cycle electric generating
facility (as further described in Appendix A hereto) with a designed electric
generating capacity of a nominal 700 megawatts (net) to be located in Lebanon,
Pennsylvania, as an integrated whole, consisting of Unit One, Unit Two, the
Electrical Interconnection Facilities and all of the appliances, parts,
instruments, appurtenances, accessories and other property that may be
incorporated or installed in or attached to or otherwise become part of such
facility (excluding all such items and other property to be furnished by or on
behalf of Owner as specifically set forth herein), all of which constitutes a
part of the Facility.
"Facility Site" means all those parcels of land near Lebanon,
Pennsylvania, owned or leased, or to be owned or leased, by Owner on which the
Facility will be located,
6
<PAGE>
including the areas for construction laydown and parking, all as more
particularly described in Appendix H hereto.
"Final Acceptance" means the achievement or deemed achievement
of Project performance pursuant to the provisions of Section 6.5 hereof.
"Final Acceptance Certificate" shall have the meaning set
forth in Section 6.5.1.2 hereof.
"Financial Closing Date" means the later of (a) the date of
the first closing of the initial construction financing of the Project and (b)
the date on which Owner first has access to construction financing funds, in
each case where the committed financing (inclusive of debt and equity) is
reasonably expected to be sufficient to complete construction of the Project.
"Financing Documents" means any and all loan agreements,
notes, indentures, security agreements, mortgages, subordination agreements,
intercreditor agreements, partnership agreements, subscription agreements,
participation agreements and other documents relating to the construction,
interim or long-term financing (both debt and equity) of the Project and any
refinancing of the Project (including a leveraged lease), including any and all
modifications, extensions, renewals and replacements of any such financing or
refinancing.
"Financing Parties" means (a) any and all lenders providing
the construction, interim or long-term financing (including a leveraged lease or
any other refinancing thereof) for the Project, and any trustee or agent acting
on their behalf, and (b) any and all equity investors (other than Owner)
providing financing or refinancing for the Project, and any trustee or agent
acting on their behalf.
"Force Majeure Event" shall have the meaning set forth in
Section 11.1 hereof.
"Fuel Oil" means liquid fuel that meets the specifications set
forth in Sections 2.0 and 3.0 of Section V(b) of Appendix A hereto for use in
DLN combustors.
"Fuel Supplier" means the Utility and any other suppliers of
Gas and/or Fuel Oil and/or No. 2 Fuel Oil for the Facility, and each of their
respective successors and permitted assigns.
7
<PAGE>
"Gas" means natural gas that meets the specifications set
forth in Section V(b) of Appendix A hereto.
"Gas Metering Equipment" shall have the meaning set forth in
Appendix A hereto.
"Guaranteed Completion Date" means each of the Guaranteed
Provisional Acceptance Date and the Guaranteed Final Acceptance Date.
"Guaranteed Emissions Limits" means the standards for emission
by the Facility of all gaseous, particulate, liquid and noise pollutants as set
forth in the Warranty Data Sheet attached as Appendix R hereto and such other or
more stringent standards (if any) under all Applicable Laws and Applicable
Permits.
"Guaranteed Final Acceptance Date" means twelve (12) months
after the Guaranteed Provisional Acceptance Date, unless on or before the end of
such twelve (12) month period (i) the Facility has achieved Interim Acceptance
or (ii) the Facility has achieved Provisional Acceptance and Contractor shall
have submitted a Plan to Owner and the Independent Engineer that demonstrates to
the reasonable satisfaction of Owner and the Independent Engineer that
Contractor will achieve Interim Acceptance of the Facility on or before the date
that is twenty-four (24) months after the Guaranteed Provisional Acceptance
Date, in either of which cases the Guaranteed Final Acceptance Date shall be
twenty-four (24) months after the Guaranteed Provisional Acceptance Date, and in
any case which date is subject to adjustment as expressly provided in this
Agreement.
"Guaranteed Provisional Acceptance Date" means February 28,
2001, which date is subject to adjustment as expressly provided in this
Agreement.
"Hazardous Material" means any substance, material, waste or
constituent for which any duty is imposed under, cleanup is authorized pursuant
to, or regulation is otherwise imposed by, any Applicable Law.
"Heat Rate Guarantees" shall have the meaning set forth in
Section 8.1.2.1 hereof.
"Independent Engineer" means an independent engineer of
recognized expertise, selected by the Financing
8
<PAGE>
Parties and reasonably acceptable to Owner and Contractor, and such independent
engineer's successors and permitted assigns.
"Instruction Manual" shall have the meaning set forth in
Section 2.1.2.1 hereof.
"Interim Acceptance" means the achievement of performance of
the Services pursuant to the provisions of Section 6.4 hereof.
"Interim Acceptance Certificate" shall have the meaning set
forth in Section 6.4.2 hereof.
"Interim Period" means the period of time, if any, commencing
with the earlier to occur of Provisional Acceptance or Interim Acceptance of the
Facility and ending at Final Acceptance of the Facility.
"Maintenance Agreement" means the Maintenance Program Parts,
Shop Repairs and Scheduled Outage TFA Services Contract, dated as of the date
hereof, between Owner and Siemens Westinghouse Power Corporation, as such
agreement may be amended, supplemented or modified from time to time.
"Mechanical Completion" means the mechanical completion of the
Facility pursuant to the provisions of Section 6.1.2 hereof.
"Mechanical Completion Certificate" shall have the meaning set
forth in Section 6.1.2.2 hereof.
"Monthly Progress Report" means a progress report containing
the following information: (a) a description of Contractor's and all
Subcontractors' activities and engineering, manufacturing, construction and
testing progress as compared with the Project Schedule (and, at the request of
Owner, an updated schedule), (b) an identification and evaluation of problems
and deficiencies in the Services (including but not limited to an explanation
and evaluation, in reasonably sufficient detail, of any factors which have had
or are anticipated to have a material effect on the Project Schedule), (c) a
detailed description of the Services which have been completed as compared with
the Payment and Milestone Schedule, the CPM Schedule and the Project Schedule,
and a description of the Scheduled Payments which have been received as compared
with the
9
<PAGE>
Payment and Milestone Schedule, (d) the status of major material and equipment
deliveries, (e) the status of Building Permits, and (f) quality assurance
reports (i) from the manufacturing and fabrication facilities of those
Subcontractors on the Approved Subcontractors List, if requested by Owner and
reasonably available to Contractor, and (ii) with respect to all construction
activity at the Facility Site.
"Notice of Final Acceptance" shall have the meaning set forth
in Section 6.5.1.1 hereof.
"Notice of Interim Acceptance" shall have the meaning set
forth in Section 6.4.1 hereof.
"Notice of Mechanical Completion" shall have the meaning set
forth in Section 6.1.2.1 hereof.
"Notice of Project Completion" shall have the meaning set
forth in Section 6.7.1 hereof.
"Notice of Provisional Acceptance" shall have the meaning set
forth in Section 6.3.1 hereof.
"Notice of Reliability Guarantee Achievement" shall have the
meaning set forth in Section 6.6.2 hereof.
"Notice to Proceed" means the written notice to be delivered
by Owner to Contractor pursuant to Section 2.2 hereof setting forth the
Commencement Date.
"No. 2 Fuel Oil" means liquid fuel that meets the
specifications set forth in Sections 2.0 and 3.0 of Section V(b) of Appendix A
hereto for use in conventional combustors.
"Null Point" shall have the meaning given thereto in the Power
Purchase Agreement.
"Oil Metering Equipment" shall have the meaning set forth in
Appendix A hereto.
"Owner" means AES Ironwood, Inc., a Delaware corporation, and
its successors and permitted assigns as owner hereunder.
"Owner Accepted Hazardous Materials" shall have the meaning
set forth in Section 13.4(a) hereof.
10
<PAGE>
"Owner Indemnified Parties" shall have the meaning set forth
in Section 13.1 hereof.
"Owner Responsible Party" means Owner or any Person acting on
behalf of, or under the direction or supervision of, Owner (other than any
Contractor Responsible Party).
"Party" means Owner or Contractor.
"Payment and Milestone Schedule" means the schedule of
payments and milestones as set forth in Appendix B hereto, as adjusted pursuant
to the terms of this Agreement.
"Performance Guarantee LD SubCap" shall have the meaning set
forth in Section 9.1 hereof.
"Performance Guarantees" shall have the meaning set forth in
Section 8.1 hereof.
"Performance Guarantee Payments" shall have the meaning set
forth in Section 8.1 hereof.
"Performance Test" means the operation of the Facility by or
on behalf of Contractor in accordance with the provisions of Section 6.2 hereof
and in accordance with Applicable Laws, Applicable Permits, the Electrical
Interconnection Requirements and the PPA Operating Requirements, for the purpose
of determining the compliance with the Guaranteed Emissions Limits and the level
of achievement of the Performance Guarantees, as described in greater detail in
Article 6 hereof and Part A of Appendix D hereto.
"Permit" means any valid waiver, exemption, variance,
franchise, permit, authorization, license or similar order of or from any
federal, state, county, municipal, regional, environmental or other governmental
body, instrumentality, agency, authority, court or other body having
jurisdiction over the matter in question.
"Permitted Liens" shall mean materialmen's, mechanics',
workers', repairmen's, employees' or other similar liens arising in the ordinary
course of business for amounts either not yet due or being contested in good
faith and by appropriate proceedings, so long as, in the case of a contest, (a)
Contractor shall have deposited with Owner a
11
<PAGE>
bond or other security satisfactory to Owner and the Financing Parties in an
amount equal to such contested lien, which security shall have the effect of
either staying the execution of such lien or, in the reasonable judgment of
Owner and the Financing Parties, otherwise not involving any danger of the sale,
forfeiture or loss of any part of the Facility, title thereto or any interest
therein, or (b) such proceedings, in the judgment of Owner and the Financing
Parties, shall not involve any danger of the sale, forfeiture or loss of any
part of the Facility, title thereto or any interest therein and shall not
interfere with the use or disposition of the Facility.
"Person" means any individual, corporation, partnership,
association, joint stock company, trust, unincorporated organization, joint
venture, government or political subdivision or agency thereof.
"Plan" shall mean a written plan prepared by Contractor to
accelerate the performance of the Services as necessary in order to achieve
Final Acceptance of the Facility no later than the Guaranteed Final Acceptance
Date.
"Power Plant Site" means the power plant area of the Facility
Site as shown in the Site Arrangement Drawing in Section V(a) of Appendix A
hereto.
"Power Purchase Agreement" means, collectively, the Power
Purchase Agreement between Owner and Metropolitan Edison Company, the Power
Purchase Agreement between Blue Mountain Power, L.P. and Metropolitan Edison
Company, and the Power Purchase Agreement between Altoona Cogeneration Partners,
L.P. and Pennsylvania Electric Company, each dated February 3, 1997, as such
agreements may be amended, supplemented or modified from time to time
(including, without limitation, the contemplated assignment by Blue Mountain
Power, L.P. and Altoona Cogeneration Partners, L.P. of all their rights and
obligations under their respective agreements to Owner and the effective
consolidation of all three agreements into one agreement); provided, that if any
such further amendment, supplement or modification affects the Services to be
performed by Contractor hereunder, and Contractor has not consented in writing
thereto (which consent shall not be unreasonably withheld), the Power Purchase
Agreement as defined herein shall not include such further amendment, supplement
or modification to the extent the Services are so affected thereby, unless a
Scope Change
12
<PAGE>
Order has been issued in accordance with Article 12 with respect thereto.
"PPA Operating Requirements" means those procedures and
requirements relating to the operation and maintenance of the Facility that are
set forth in or are established pursuant to Article VIII of the Power Purchase
Agreement; provided, however, that the PPA Operating Requirements as defined
herein shall not include any such subsequently-established procedures or
requirements to the extent (if any) that such procedures or requirements (i) are
not consistent with Prudent Utility Practices or (ii) would require changes to
the Project Design Book, unless a Scope Change Order has been issued in
accordance with Article 12 with respect to such required changes.
"PPA Output Test" means the operation of the Facility by or on
behalf of Contractor in accordance with the provisions of Section 6.2 hereof and
in accordance with Applicable Laws, Applicable Permits, the Electrical
Interconnection Requirements and the PPA Operating Requirements, for the purpose
of determining the level of achievement of the Electrical Output Guarantee and
other PPA-required capabilities, as described in greater detail in Article 6
hereof and Part B of Appendix D hereto.
"Preliminary Notice to Proceed" shall have the meaning set
forth in Section 2.2.1 hereof.
"Project" means the Facility and the Services to be furnished
by Contractor hereunder, as an integrated whole, including all equipment, labor
and materials to be furnished to Owner by Contractor hereunder, all as described
in greater detail in Article 2 hereof and in Appendix A hereto.
"Project Completion" means the acceptance by Owner of the
completed Project from Contractor in accordance with the provisions of Section
6.7 hereof.
"Project Completion Certificate" shall have the meaning set
forth in Section 6.7.2 hereof.
"Project Completion Deadline" shall have the meaning set forth
in Section 6.7.3 hereof.
"Project Completion Payment" shall have the meaning set forth
in Section 4.7.4 hereof.
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"Project Design Book" means a detailed description of the
design of the Facility to be prepared by Contractor, which shall initially
consist of Appendix A hereto and, subject to Owner's reasonable approval in
accordance with the approval rights set forth in Appendix P hereto, shall be
updated by Contractor to reflect Scope Changes relating to the design of the
Facility during the term of this Agreement.
"Project Procedures Manual" shall have the meaning set forth
in Section 2.1.2.2 hereof.
"Project Schedule" shall have the meaning set forth in Section
2.1.16 hereof.
"Project Taxes" shall have the meaning set forth in Section
2.1.17(b) hereof.
"Protective Apparatus" means electrical interconnection
equipment and apparatus, including without limitation protective relays, circuit
breakers and the like, necessary or appropriate to isolate the Facility from the
Utility's transmission system consistent with Accepted Electrical Practices.
"Provisional Acceptance" means the achievement of performance
pursuant to the provisions of Section 6.3 hereof.
"Provisional Acceptance Certificate" shall have the meaning
set forth in Section 6.3.2 hereof.
"Provisional Acceptance Late Completion Payments" shall have
the meaning set forth in Section 7.2(a) hereof.
"Provisional Commencement Date" shall have the meaning set
forth in Section 2.2.2 hereof.
"Provisional Notice to Proceed" shall have the meaning set
forth in Section 2.2.2 hereof.
"Prudent Utility Practices" means the practices, methods,
techniques and standards that at the particular time of performance of the
Services (i) are generally accepted in the electric power industry in the United
States for use in connection with the design, engineering, construction,
testing, operation and maintenance of power stations of the same or similar size
and type as the
14
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Facility, all in a manner consistent with Applicable Laws, Applicable Permits,
Accepted Electrical Practices, reliability, safety, environmental protection,
economy and expediency, and (ii) conform in all material respects to the
manufacturer's design, engineering, construction, testing, operation and
maintenance guidelines applicable to the equipment in question. Prudent Utility
Practices are not limited to the optimum practice or method to the exclusion of
others, but rather refer to commonly used and reasonable practices and methods.
"Punch List" means the list prepared by Owner, with the full
cooperation of Contractor, which list shall set forth all items of work which
remain to be performed in order to ensure that the Project fully complies with
all of the standards and requirements set forth herein. The Punch List shall not
include any items of work, alone or in the aggregate, the noncompletion of which
prevents the Facility from (i) being used for the purposes as described in this
Agreement in accordance with all Applicable Laws, Applicable Permits, the
Guaranteed Emissions Limits, the Electrical Interconnection Requirements and the
PPA Operating Requirements or (ii) being legally, safely and reliably placed in
commercial operation.
"Quality Assurance Plan" means the quality assurance plan
prepared by Contractor and attached as Appendix K hereto, as the same may be
revised from time to time pursuant to Section 2.1.2.3 hereof.
"Real Estate Rights" means all rights in or to real estate
(including rights to use or access the Facility Site), whether arising through
fee ownership, leases, contracts, permits, easements, licenses, private rights
of way, or utility and railroad crossing rights, that are required to be
obtained or maintained in connection with construction of the Facility on the
Facility Site, performance of the Services hereunder (including, without
limitation, the transportation of all necessary materials, equipment and other
items to the Facility Site and access to the quarry for the construction and use
of water intake facilities), or startup and testing of the Facility.
"Reliability Certificate" shall have the meaning set forth in
Section 6.6.3 hereof.
"Reliability Guarantee" shall have the meaning set forth in
Section 6.6 hereof.
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"Reliability Run" means the operation of the Facility for [*]
days in accordance with Applicable Laws, Applicable Permits, the Guaranteed
Emissions Limits, the Instruction Manual, the Electrical Interconnection
Requirements, the PPA Operating Requirements and Section 6.6.1 hereof for the
purpose of determining the Facility's reliability, as described in greater
detail in Section 6.6.1 hereof.
"Representative" shall have the meaning set forth in Section
5.1 hereof.
"Reservation Fee" shall have the meaning set forth in Section
2.2.4 hereof.
"Retainage" shall have the meaning set forth in Section 4.2.4
hereof.
"Risk Transfer Date" shall have the meaning set forth in
Section 14.15.2 hereof.
"Scheduled Payment" shall have the meaning set forth in
Section 4.2 hereof.
"Scope Change" means any material addition to, deletion from,
suspension of or other modification to the Project or to the quality, function
or intent of the Project as presently delineated in Appendix A hereto, including
without limitation any such addition, deletion, suspension or other modification
which requires a change in one or more of the Contract Price, the Guaranteed
Completion Dates, the Payment and Milestone Schedule, the Construction Progress
Milestone Dates, the Project Schedule and the Performance Guarantees in
accordance with the terms of Article 12 hereof.
"Scope Change Order" means a written order to Contractor
issued and signed by Owner after the execution and delivery of this Agreement
authorizing a Scope Change and, if appropriate, an adjustment in one or more of
the Contract Price, the Guaranteed Completion Dates, the Payment and Milestone
Schedule, the Construction Progress Milestone Dates, the Project Schedule and
the Performance Guarantees or any other amendment of the terms and conditions of
this Agreement.
"Scope Change Order Notice" means a written notice to Owner
issued by Contractor indicating that Contractor
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believes a Scope Change Order is required in connection with the performance of
the Services.
"Scope Change Order Request" means a written proposal issued
and signed by Owner requesting a Scope Change, submitted to Contractor by Owner
pursuant to the terms of Section 12.3 hereof.
"Services" shall have the meaning set forth in Section 2.1
hereof.
"Subcontractors" shall have the meaning set forth in Section
3.1.3 hereof.
"Taxes" shall have the meaning set forth in Section 2.1.17(b)
hereof.
"Termination Payment" shall have the meaning set forth in
Section 4.4 hereof.
"Third-Party Beneficiaries" shall have the meaning set forth
in Section 25.11 hereof.
"Title Insurer" means any and all title insurance companies
writing title insurance with respect to any portion of the Facility Site, the
Real Estate Rights, the Project or any interest therein.
"Total LD SubCap" shall have the meaning set forth in Section
9.1 hereof.
"Unit" or "Units" mean, individually and collectively, Unit
One and Unit Two, as the case may be.
"Unit One" means that portion of the Facility, as further
described in Appendix A hereto, comprised of (i) the first gas turbine generator
unit and its heat recovery steam generator, together with all other machinery,
equipment, components and auxiliary systems relating thereto (other than Unit
Two), (ii) one-half of the electrical output capability of the steam turbine
generator, and (iii) all other Common Components (other than the other half of
the electrical output capability of the steam turbine generator).
"Unit Two" means that portion of the Facility, as further
described in Appendix A hereto, comprised of (i) the second gas turbine
generator unit and its heat recovery
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steam generator, together with all other machinery, equipment, components and
auxiliary systems relating thereto (other than Unit One), (ii) one-half of the
electrical output capability of the steam turbine generator, and (iii) all other
Common Components (other than the other half of the electrical output capability
of the steam turbine generator).
"Utility" means, collectively, Metropolitan Edison Company and
Pennsylvania Electric Company, each trading as GPU Energy, and their respective
successors and permitted assigns, as purchasers of electricity under the Power
Purchase Agreement.
"WWTP" means the City of Lebanon Authority's waste water
treatment plant.
"Warranty Data Sheet" means the warranty data sheet attached
as Appendix R hereto, which sets forth, among other things, (i) the Electrical
Output Guarantees and Heat Rate Guarantees and (ii) certain Guaranteed Emission
Limits, in each case applicable to the Facility.
"Warranty Period" means a period ending on the date that is:
(a) with respect to all machinery, equipment, materials,
systems, supplies and other items comprising the Project, the earlier
to occur of (i) twelve (12) months following the first to occur of
Provisional Acceptance, Interim Acceptance and Final Acceptance and
(ii) with respect to the machinery, equipment, materials, systems,
supplies and other items comprising each Unit, the date on which such
Unit has operated for eight thousand (8,000) Equivalent Operating Hours
following the first to occur of Provisional Acceptance, Interim
Acceptance and Final Acceptance;
(b) with respect to the engineering and design of the Project
and its components, twelve (12) months following the first to occur of
Provisional Acceptance, Interim Acceptance and Final Acceptance; and
(c) in the case of any correction, addition, repair or
replacement to any machinery, equipment, materials, systems, supplies
or other items, including without limitation the engineering or design
thereof, during any existing Warranty Period, with respect to
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such machinery, equipment, materials, systems, supplies or other items,
twelve (12) months after the date of such correction, addition, repair
or replacement, but in no event later than twenty-four (24) months
after the originally scheduled expiration date of the applicable
initial Warranty Period.
ARTICLE 2
Contractor's Services and Other Obligations
2.1 Services to be Performed. Contractor shall complete the
Project by performing or causing to be performed all work and services required
or appropriate in connection with the design, engineering, procurement, site
preparation and clearing, civil works, construction, start-up, training, and
testing of the Facility, and provide all materials and equipment (excluding
operational spare parts), machinery, tools, construction fuels, chemicals and
utilities, labor, transportation, administration and other services and items
required to complete the Project, all on a lump sum, fixed price, turnkey basis
and otherwise in accordance with this Agreement (the "Services"). Certain
details of the Services are described in this Article 2 and in Appendix A
hereto. For the avoidance of doubt, the Parties hereby acknowledge and agree
that the Services shall include provision of all equipment, components, systems,
materials, documentation and other services and items necessary or appropriate
to complete the Project in conformity with the terms and conditions of this
Agreement, notwithstanding the fact that each such necessary or appropriate
service or item may not be expressly mentioned in this Agreement, excluding such
items that are specifically set forth in this Agreement as being furnished by or
on behalf of Owner. Without limiting the foregoing, Contractor shall provide the
following Services:
2.1.1 Engineering, Design, Construction and
Construction Management.
2.1.1.1 Engineering and Design. Contractor
shall provide all engineering and design services necessary
for completion of the Project in conformity with this
Agreement, including but not limited to (a) preparation of (i)
the Project Design Book which shall form the basis of the
design of the Project, (ii) conceptual design, and (iii)
engineering and design necessary to describe
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and detail the Project and to optimize the Project heat
balance, (b) provision of criteria for the detailed design by
suppliers of equipment, materials and systems for
incorporation into the Project, and (c) preparation of
drawings, plans, bills of material, schedules and estimates.
Contractor shall comply with the Electrical Interconnection
Requirements and cooperate with the engineering efforts and
otherwise accommodate the interface requirements of the
Utility, the Fuel Supplier, all federal, state and local
agencies, and all utilities serving the Project that are
consistent with Prudent Utility Practices; provided, however,
that in the event that such accommodation would require
Contractor to perform studies or other tasks that are a
material addition to the Services otherwise provided for in
this Agreement, Contractor shall not be required to perform
such material additional work hereunder unless a Scope Change
Order has been issued by Owner with respect thereto in
accordance with Article 12 hereof.
Upon Owner's request, Contractor shall use
all reasonable efforts to provide Owner and, at Owner's
request, the Independent Engineer and the Utility with
reasonable access to meetings between Contractor and its
architects, engineers or Subcontractors regarding the
construction of the Project (except to the extent such
meetings involve contractual matters that do not substantially
affect or relate to the performance of the Services
hereunder), provided such access does not materially interfere
with the progress of Contractor's work hereunder. Contractor
agrees to timely provide Owner and, at Owner's request, the
Independent Engineer and the Utility with such documents and
other information as are reasonably necessary for the
Independent Engineer and the Utility to review and evaluate
the design of the Project. Without limitation to the
foregoing, Contractor agrees to submit to Owner and the
Utility the design for the Electrical Interconnection
Facilities (or any addition, modification or replacement
thereto) in a timely manner in accordance with Section 2.1.8.1
hereof so as to enable Owner to obtain the Utility's approval
thereof in accordance with the requirements of
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Section 7.4(b) of the Power Purchase Agreement. Contractor
shall review and be fully responsible for all engineering and
design services even though Subcontractors are permitted to
engineer and design portions of the Project.
2.1.1.2 Construction and Construction
Management. Contractor shall develop a project construction
plan for, and oversee the construction of, the Project in
accordance with Appendix A hereto and the other terms and
provisions of this Agreement. Contractor shall inspect or
cause to be inspected all materials and equipment to be
incorporated in the Project and shall reject those items
determined not to be in compliance with the requirements of
this Agreement. Any item that is rejected by Contractor
pursuant to the immediately preceding sentence shall be
corrected (whether by repair, replacement or otherwise) so
that it is in compliance with the requirements of this
Agreement. Contractor also shall oversee the manner of
incorporation of the materials and equipment in the Project
and the workmanship with which such materials are incorporated
and otherwise coordinate the construction of the Project.
Contractor shall require the Subcontractors to perform the
subcontracts in accordance with this Agreement and, in
performing the duties incident to such responsibility,
Contractor shall issue to the Subcontractors such directives
and impose such restrictions as may be required in the
construction of the Project to obtain compliance by the
Subcontractors with the relevant terms of this Agreement.
Contractor shall review and be fully responsible for all
construction services of the Project, including, without
limitation, all construction services provided by
Subcontractors. Contractor shall establish and track Project
management controls systems and provide construction
management services.
2.1.2 Documentation and Manuals. Subject to Article
18 hereof, Contractor shall submit to Owner the specifications, data
sheets, plans and drawings, and other information and documents
required to be submitted to Owner pursuant to Appendix P hereto
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(collectively, the "Design Documents"). Contractor shall use U.S.
customary units as the primary system of units in all documents
prepared by Contractor for the Project and shall use reasonable efforts
to have all Subcontractors use U.S. customary units as the primary
system of units in all documents prepared by such Subcontractors for
the Project. In addition, Contractor shall provide the following:
2.1.2.1 Instruction Manuals. Contractor will
provide Instruction Manuals supplied by the vendors for each
equipment purchase package (including equipment supplied
directly by the Contractor) and for equipment furnished by
construction Subcontractors (each, an "Instruction Manual").
Contractor shall provide all such Instruction Manuals relevant
to the Project not later than six (6) months prior to the
Guaranteed Provisional Acceptance Date. Each Instruction
Manual shall be provided in time for equipment installation
and startup and shall be bound in a binder suitable for rough
usage with equipment and purchase order or specification noted
on the binder edge. Instruction Manuals with multiple volumes
shall have each volume numbered. Contractor shall provide ten
(10) sets of Instruction Manuals in English including (a)
Subcontractor-provided equipment operation instruction
books/leaflets, (b) equipment maintenance instruction
books/leaflets and (c) all vendor-provided installation,
operation, and maintenance information. The Instruction
Manuals shall be based on generally accepted standards of
professional care, skill, diligence, and competence applicable
to engineering and operating practices and shall be consistent
with Prudent Utility Practices.
2.1.2.2 Project Procedures Manual.
Contractor shall, no later than one hundred twenty (120) days
after the Provisional Commencement Date hereunder, deliver to
Owner six (6) copies in English of a manual, in form and
substance satisfactory to Owner, which provides the guidelines
by which the normal working relationships will be conducted
between Owner and its representatives and Contractor (the
"Project Procedures Manual"). The Project Procedures
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Manual will contain, among other materials, an organizational
chart, correspondence procedures, a project filing system,
procedures for the review of the Design Documents and Project
progress, and verification procedures to be implemented for
Owner with respect to the Contract Price.
2.1.2.3 Quality Assurance Plan. Prior to the
date hereof, Contractor shall have prepared and attached in
Appendix K hereto the Quality Assurance Plan, which will be
revised in accordance with any comments relating thereto
received by Owner from the Utility (to the extent such
comments are consistent with Prudent Utility Practices).
Contractor shall adhere to the Quality Assurance Plan in order
to ensure that the construction and engineering methods and
standards required to be employed by Contractor hereunder are
achieved.
2.1.3 Procurement. Contractor shall procure and pay
for all materials, equipment and supplies and all Contractor and
Subcontractor labor and manufacturing and related services (whether on
or off the Facility Site) for construction of and incorporation into
the Project which are required for completion of the Project in
accordance with this Agreement and are not explicitly specified in
Article 5 of this Agreement to be furnished by or on behalf of Owner.
All such items shall be subject to the warranties and guarantees in
Section 3.4 and Article 10 hereof.
2.1.3.1 Spare Parts List. At least twelve
(12) months prior to the scheduled date for Provisional
Acceptance of the Facility, Contractor shall provide to Owner
a recommended spare parts list and a price list covering all
spare and replacement parts pertaining to the combustion
turbine generators, the steam turbine generator, the WDPF
system and the auxiliary equipment associated with each of the
foregoing, and shall also provide to Owner the recommended
spare parts list and price list contained in the purchase
orders and subcontracts pertaining to the equipment specified
in Appendix U hereto as required under Section 3.2 hereof.
Contractor shall provide to Owner the applicable
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Subcontractor's recommended spare parts lists and price lists
covering all other spare and replacement parts for the
Facility not covered by the preceding sentence suficiently in
advance of Provisional Acceptance so as to allow Owner a
reasonable period of time to evaluate such spare parts lists
and to purchase and obtain such spare parts at the Facility
Site prior to the date of Provisional Acceptance.
2.1.4 Labor and Personnel. Contractor shall provide
all labor and personnel required in connection with the Services,
including without limitation: (a) licensed professional engineers; (b)
a Project engineer, a safety engineer and lead structural, mechanical,
electrical, instrumentation and control, civil, cost, schedule,
procurement, construction, start-up and training supervisors, all of
whom shall have had extensive power plant experience in facilities of
similar technology and magnitude; (c) a Project manager or other
representative who shall be fully acquainted with the Project and shall
have the authority to administer this Agreement on behalf of
Contractor; and (d) quality assurance personnel, all of whom shall
report directly (but not necessarily immediately) to Contractor's
senior management, and not to the management personnel of Contractor
directly responsible for the Project. Upon Owner's request, Contractor
shall provide Owner with the resumes of, and arrange for the interview
by Owner of, any or all personnel employed in any of the positions set
forth in Appendix Q hereto, and Owner will have the right to approve
those individuals who will hold such positions, which approval shall
not be unreasonably withheld. Contractor shall use all reasonable
efforts to not remove any Project personnel that hold any of the
positions set forth in Appendix Q hereto without the prior consent of
Owner; provided, that Contractor shall be entitled to remove any such
person for just cause without the prior consent of Owner. Owner shall
have the right at all times to require for just cause that any
personnel holding any of the positions set forth in Appendix Q or
performing any work at the Facility Site (whether or not previously
approved by Owner) be removed and replaced by other qualified personnel
acceptable to Owner.
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2.1.5 Permitting. (a) Contractor represents that to
the best of its knowledge Appendix F hereto lists all Applicable
Permits necessary for performance of the Services, and Owner represents
that as of the date hereof it has no actual knowledge that any other
Applicable Permits will be necessary for Contractor's performance of
the Services. Contractor shall obtain and maintain in effect all
Building Permits, including without limitation those Applicable Permits
designated in Appendix F hereto as Contractor's responsibility. Owner
shall provide all necessary and readily available information and
documents and use all reasonable efforts to assist Contractor in
obtaining all Applicable Permits required to be obtained by Contractor
hereunder.
(b) Contractor shall provide all necessary and
readily available information and documents and use all reasonable
efforts to assist Owner in obtaining all Applicable Permits required to
be obtained by Owner hereunder. Contractor shall provide engineering
and other support as set forth in Appendix A hereto for the permitting
effort of Owner and shall cooperate with Owner and any environmental or
permitting consultants hired by Owner in Owner's (and its designees')
efforts to obtain the Applicable Permits required to be obtained by
Owner hereunder.
2.1.6 Inspection and Expediting. Contractor shall
perform all inspection, expediting, quality surveillance and traffic
services as are required for performance of the Services. Contractor
shall perform such detailed inspection of all work in progress at
intervals appropriate to the stage of construction or fabrication of
the Facility Site as is necessary to ensure that such work is
proceeding in accordance with this Agreement and the Design Documents
and to protect Owner against defects and deficiencies in such work. On
the basis of such inspections, Contractor shall keep Owner informed of
the progress and quality of all work and shall provide Owner with
written reports of deficiencies revealed through such inspections and
of measures proposed by Contractor to remedy such deficiencies. Owner
and Owner's designee(s) shall be given at least five (5) days' advance
notice of, and shall have the option of being present at, all
inspections and witness points off the Facility Site to be specified in
the Quality Assurance Plan, and, in the
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event that the progress and quality of the work is not proceeding in
accordance with this Agreement and the Design Documents, shall be
entitled to make recommendations to Contractor for the purpose of
remedying such deficiencies. In the event that Owner or Owner's
designee(s) fails to be present for such inspection or witness point on
the date scheduled therefor, Contractor may proceed with such
inspection or witness point in Owner's or Owner's designee(s)'s
absence. No inspection performed or failed to be performed by Owner or
Owner's designee(s) hereunder shall be construed as a waiver of any of
Contractor's obligations hereunder or be construed as an approval or
acceptance of any of the Services. In addition, Contractor shall secure
for Owner and its designees the inspection rights set forth in Section
2.1.13 hereof.
2.1.6.1 Transportation. Contractor shall be
responsible for the transportation, shipping, receiving and
marshaling of all materials, equipment, supplies and other
items required for the Project (including, without limitation,
materials, supplies and equipment required for construction
activities), whether such items are sourced in or outside of
the United States. Contractor shall arrange for the security
of any such items while in transport or in storage off or on
the Facility Site.
2.1.7 Storage, Disposal and Related Matters.
Contractor shall warehouse or otherwise provide appropriate storage (in
accordance with manufacturers' recommendations) for all materials,
supplies and equipment required for permanent and temporary
construction, and shall provide for the procurement or disposal of, as
appropriate, all soil, gravel and similar materials (including, subject
to Section 12.12 hereof, the remediation or disposal of any Hazardous
Materials discovered at the Facility Site, to the extent required by
Applicable Law) required for performance of the Services. All
materials, supplies and equipment which are stored at a location other
than on the Facility Site shall be stored in a manner consistent with
Prudent Utility Practices and only at locations that have been
disclosed in writing to Owner. All equipment which would reasonably be
expected under Prudent Utility Practices to be permanently labeled
shall be labeled with permanently affixed durable
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nameplates which will include the manufacturer's name, equipment model
number, equipment serial number, equipment tag number and all
appropriate design parameters.
2.1.8 Electrical Interconnection Facilities; and
Other Interconnections.
2.1.8.1 Electrical Interconnection
Facilities. Contractor shall design, construct and install the
Electrical Interconnection Facilities (including, without
limitation, the Electric Metering Equipment, automatic
regulation equipment, Protective Apparatus and control system
equipment) in accordance with the Electrical Interconnection
Requirements and the other terms and conditions hereof.
Contractor shall provide to Owner and the Utility, in detail
satisfactory to Owner and the Utility, for their prior reviews
and acceptance (which shall not be unreasonably withheld) all
plans and specifications relating to the design, construction
and installation of the Electrical Interconnection Facilities
(and any additions, modifications or replacements thereto),
including without limitation single-line diagrams and control
and protective relay schemes, not later than twelve (12)
months prior to the commencement of construction of such
Electrical Interconnection Facilities or such other reasonable
time as Owner and the Utility may agree upon pursuant to
Section 7.4(b) or 7.6(a) of the Power Purchase Agreement.
Owner shall use reasonable efforts to cause the Utility to
provide written notification of its acceptance or rejection of
such plans and specifications within sixty (60) days after its
receipt thereof. Contractor shall not commence the
construction and installation of the Electrical
Interconnection Facilities without having received the prior
written approval of the Owner and the Utility (which approval
shall not be unreasonably withheld). Contractor shall review
with Owner and, at Owner's request, the Utility, the design
and construction schedule for the Electrical Interconnection
Facilities, and shall coordinate the performance of such
Services with the work to be performed by the Utility on its
side of the Electrical Interconnection Point in order to
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enable the Electrical Interconnection Facilities to be
completed and interconnected with the Utility's transmission
system in accordance with the time frames (including without
limitation Section 5.8 hereof) and performance standards as
set forth herein; provided, that Owner hereby acknowledges
that Contractor shall not be responsible for managing the
activities of the Utility, nor shall Contractor be responsible
for such other work performed by the Utility. Contractor shall
coordinate with the Utility as is necessary to ensure that
either Contractor or the Utility (but not the Owner) shall
provide all electrical interconnections between the Electrical
Interconnection Facilities and the Utility's transmission
system at the Electrical Interconnection Point. Contractor
shall also be responsible for arranging for the Utility to
make its temporary construction power distribution line
available at the Power Plant Site on or before twenty (20)
days after the date specified for site mobilization in the
Notice to Proceed.
2.1.8.2 Other Interconnections. Contractor
shall review with Owner and each of the Fuel Supplier and any
other Person providing other permanent utility or similar
service interconnections to the Facility (including, without
limitation, the interconnections with the Gas Pipeline, the
WWTP pipeline and the municipal potable water pipeline), the
design and construction schedule for the interconnection
facilities between the Facility and the systems of such third
parties, and shall coordinate the performance of the Services
with such other work performed by such third parties in order
to enable Contractor's construction of the Facility and such
third parties' construction of such other facilities to be
completed in accordance with the time frames and performance
standards as set forth herein; provided, that Owner hereby
acknowledges that Contractor shall not be responsible for
managing the activities of such third parties, nor shall
Contractor be responsible for such other work performed by
such third parties. Contractor shall coordinate with the Fuel
Supplier and such other Persons as is necessary to ensure that
either Contractor or the Fuel Supplier or such
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other Person (but not the Owner) shall provide all
interconnections between the respective facilities being
constructed by Contractor hereunder and by the Fuel Supplier
or such other Person. Contractor shall also be responsible for
arranging for the construction-period water supply facilities
specified in Appendix A hereto (or such other facilities as
are reasonably satisfactory to Owner and Contractor) being
available at or inside the boundary of the Power Plant Site on
or before twenty-seven (27) days after the date specified for
site mobilization in the Notice to Proceed.
2.1.9 Performance Testing. Contractor shall perform,
and re-perform if necessary, the Performance Tests and the PPA Output
Tests in accordance with the provisions of Section 6.2 hereof in order
to demonstrate achievement of Provisional Acceptance, Interim
Acceptance and/or Final Acceptance and the level of achievement of the
Performance Guarantees relating thereto.
2.1.10 Start-Up and Initial Operation. The Services
shall include the start-up of components, calibration of controls and
equipment, initial operation of the Facility and each portion thereof,
function and verification tests, and all other start-up and initial
operation functions pertaining to the Project. At all times during the
performance of the Services, Contractor shall use all reasonable
efforts to minimize (consistent with Prudent Utility Practices and the
terms of this Agreement) the use of fuels, feed materials, utilities,
consumables, waste disposal services, electricity, water and chemicals.
2.1.11 Spare Parts, Consumables and Utilities.
Contractor shall provide, at its expense, (a) all construction and
start-up spare parts, (b) the first fills of all lubrication oil,
grease and resins, and any re-fills thereof required as a result of
operations up to the Risk Transfer Date, (c) all waste disposal
services (including, without limitation, for waste water and waste
chemicals from boiler cleaning) required in connection with the
performance of the Services, provided that Contractor shall not be
required to provide and pay for such waste disposal services with
respect to Facility operations after the Risk Transfer Date, (d) all
chemicals (including,
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without limitation, all chemicals required to treat water as required
for testing, start-up or other operation of the Facility up to the Risk
Transfer Date), (e) all electricity required in connection with its
performance of the Services, provided that during the period from
completion of interconnection of the Electrical Interconnection
Facilities to the Utility's transmission system until completion of
initial synchronization of the steam turbine generator, Contractor
shall only be required to pay for (or if Owner shall have already made
such payment, to promptly reimburse Owner for) all electricity used
during such period in excess of twelve (12) million kWh, and provided
further that this clause (e) shall not relieve Owner of its obligations
under Section 5.8 hereof to arrange for the Utility's provision of such
interconnection facilities as are necessary to allow for the Electrical
Interconnection Facilities to be interconnected with the Utility's
transmission system at the Electrical Interconnection Point at the time
specified therein, (f) all Gas or other fuel required in connection
with its performance of the Services, provided that during the period
from completion of interconnection of the Electrical Interconnection
Facilities to the Utility's transmission system until completion of
initial synchronization of the steam turbine generator, Owner shall pay
for all Gas used by the Facility for startup in accordance with Section
6.1 hereof and to generate electricity for delivery to the Utility, and
provided further that this clause (f) shall not relieve Owner of its
obligations under Section 5.7 hereof to arrange for such facilities as
are necessary to allow for the delivery of Gas and Fuel Oil to the
Facility Site at the times specified therein, and (g) all other
consumables and utilities (including without limitation sewage), and
all provisions necessary for the delivery of all such items to the
Facility Site, in each case as required to enable Contractor to perform
the Services. Contractor shall not be required to provide or pay for
(i) raw water, (ii) operational spare parts, (iii) any re-fills of
lubrication oil, grease or resins required as a result of operation of
the Facility following the Risk Transfer Date, (iv) waste disposal
services, chemicals, start-up electricity, consumables and other
utilities required for operation of the Facility following the Risk
Transfer Date, and (v) Gas or Fuel Oil required for operation of the
Facility after the Risk Transfer
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Date (or earlier if and to the extent that Owner is responsible under
clause (f) above for any such fuel used to generate electricity for
delivery to the Utility), in each case to the extent such items or
services are expressly required to be provided or paid for by Owner
under Article 5 hereof.
2.1.12 Personnel Training. Commencing six (6) months
prior to the scheduled date for Provisional Acceptance of the Facility,
Contractor shall provide on-site classroom training for Owner's and its
designee's personnel in the operation and maintenance of the Facility
including, without limitation, safety training, all as more fully
described in Appendix A hereto. Contractor shall provide on-the-job
training during the start-up and initial operation phase of the
Facility. Such training shall be provided in its entirety in English
and shall be designed to offer basic instruction and training to
reasonably well-qualified (as reasonably determined by Owner) power
plant personnel and shall be of such quality so as to provide such
personnel with a comprehensive understanding of all operational and
maintenance aspects of the Facility and shall include instruction
related to the major components of the Facility, including without
limitation the following: the gas turbine generators, heat recovery
steam generators, steam turbine generator, make-up water and water
treatment facilities, air treatment facilities, plant controls, cooling
tower and distributed controls. Contractor will provide a minimum of
twenty (20) copies in English of appropriate manuals and other written
materials as part of the training program. In addition, Contractor's
training of Owner's personnel shall include coordination of any
Subcontractor training sessions in a manner sufficient to provide such
personnel with an adequate understanding of the operation and
maintenance aspects of each dimension of the Facility as an integrated
whole, all as more fully described in Appendix A hereto.
2.1.13 Facility Site Access and Owner's
Accommodations. Contractor shall provide Owner (and its designees,
including without limitation the Independent Engineer and the Utility)
with access to the Facility Site at all times and arrange for Owner's
(and such designees') reasonable access to those areas of the
engineering, manufacturing and fabricating
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premises of all Subcontractors' facilities where work is being
performed in connection with the Project sufficient to permit Owner
(and such designees) to inspect work being performed and monitor
compliance by Contractor and the Subcontractors with the terms hereof.
In connection therewith, Owner (and such designees) shall comply with
applicable site visitation policies and shall not interfere with
progress of the work. Contractor shall make available to Owner as part
of the Contract Price furnished office space for up to ten (10) people
at the Facility Site (with temporary utilities) and furnished office
space (with utilities) for up to five (5) people at or near the home
office of Contractor for the use by Owner's (or such designees')
personnel.
2.1.14 Real Estate Rights. (a) Contractor has
reviewed the Real Estate Rights set forth on Appendix G hereto and
hereby represents and acknowledges that it does not need any additional
Real Estate Rights in order to perform the Services (provided, however,
that such representation and acknowledgment by Contractor shall not be
construed to extend to the status of title to or the existence of liens
or other similar encumbrances against such Real Estate Rights to the
extent such matters are not reasonably ascertainable by a visual
inspection of such Real Estate Rights), and Owner represents that as of
the date hereof it has no actual knowledge that additional Real Estate
Rights will be necessary for Contractor's performance of the Services.
Contractor shall provide all necessary information and documents and
use all reasonable efforts to assist Owner in obtaining all Real Estate
Rights required to be obtained by Owner hereunder. If Contractor at any
time becomes aware of any Real Estate Right that it requires which is
not listed on Appendix G hereto, Contractor shall immediately give
notice thereof to Owner.
(b) If at any time after the date hereof, performance
of the Services hereunder requires any Real Estate Right not listed on
Appendix G hereto (as such Appendix G may be modified pursuant to any
Scope Change Order issued by Owner hereunder (including, without
limitation, pursuant to the terms of Section 12.5 hereof)), Contractor
shall be responsible for obtaining such Real Estate Right at its own
expense; provided, however, that, without limiting the foregoing, Owner
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shall apply at Contractor's cost and expense for such Real Estate Right
with the Person from whom such Real Estate Right is to be secured if
such Real Estate Right is of the type customarily obtained by an owner
of a project.
2.1.15 Clean-Up and Waste Disposal. Contractor shall
keep the Power Plant Site and such other portions of the Facility Site
on which Contractor is performing services hereunder clean, and if
necessary in order to do so, shall perform a daily site clean-up, and
shall otherwise keep such site free from accumulation of petroleum,
waste materials (including, without limitation, waste water and waste
chemicals from any chemical cleaning, and any waste Hazardous Materials
brought to the Site by Contractor or its Subcontractors), rubbish and
other debris resulting from performance of the Services. On or before
Project Completion, Contractor shall remove from the Facility Site all
petroleum, waste materials (including, without limitation, waste water
and waste chemicals from any chemical cleaning and any waste Hazardous
Materials brought to the Site by Contractor or its Subcontractors),
rubbish and other debris resulting from the Services, as well as all
tools, construction equipment, machinery and surplus material to which
Owner does not hold title, and shall leave the Power Plant Site and
such other portions of the Facility Site on which Contractor performed
Services hereunder in a neat, clean and usable condition. On or before
Project Completion, Contractor shall remove, transport and dispose of
any Hazardous Material transported onto the Facility Site by Contractor
or any Subcontractor, or created as part of Contractor's or any
Subcontractor's activities at the Facility Site. All cleanup and
disposal shall be conducted in accordance with all Applicable Laws and
Applicable Permits. Contractor shall notify Owner immediately upon the
discovery of the presence of any Hazardous Material on, or the release
of Hazardous Material on or from, the Facility Site, and shall proceed
in accordance with Sections 2.1.7 and 12.12 hereof in connection
therewith.
2.1.16 Project Schedule and Progress Reports. No
later than sixty (60) days after the Provisional Commencement Date,
Contractor shall submit to Owner a detailed electronic construction
schedule that indicates, in a manner consistent with the overall
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construction schedule set forth in Appendix C hereto on the date
hereof, the proposed dates for completion of the individual features of
the Services set forth in Appendix C hereto (as such construction
schedule may be adjusted pursuant to Article 12 hereof, the "Project
Schedule"), and shall keep and furnish to Owner updated schedules of
the Services, and Monthly Progress Reports of actual progress of the
Services by the end of each month. Contractor shall provide five (5)
hard copies and one (1) electronic copy of such Monthly Progress
Reports in a format to be mutually and reasonably agreed upon by
Contractor and Owner. Contractor shall be responsible for ensuring that
performance of the Services proceeds in general accordance with the
Project Schedule (as updated from time to time) and for coordinating
and incorporating the schedules of all Subcontractors into the
aforementioned schedules and progress reports. In addition, as soon as
it is practicable but in no event later than one hundred twenty (120)
days after the Provisional Commencement Date, Contractor shall provide
Owner with a critical path method schedule (the "CPM Schedule") for the
Project including activity durations for each major component of the
Services. The CPM Schedule shall be updated on a monthly basis as the
Services progress and shall include delay and acceleration analyses
where appropriate.
2.1.17 Taxes; Customs Duties.
(a) Contractor shall be responsible for payment of
all taxes, fees and contributions on or measured by Contractor's
income, gross receipts or assets, all duties and customs charges and
levies on Equipment and any other items asociated with the Project
sourced outside of the United States, and all taxes, fees and
contributions on or measured by employees or other labor costs of
Contractor or any Subcontractor, including without limitation all
payroll or employment compensation tax, social security tax or similar
taxes for Contractor's or any Subcontractor's employees (collectively,
the "Contractor Taxes"). Contractor Taxes are included in the Contract
Price.
(b) The Contract Price does not include any
provisional or local property, license, privilege, sales, use, excise,
value added, or other similar tax which may now or hereafter be imposed
by the federal or
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any state government of the United States of America or any of their
respective political subdivisions upon the sale, purchase or use by
Contractor of materials, supplies, equipment, services or labor for the
Project (collectively, the "Project Taxes", and together with the
Contractor Taxes, the "Taxes"). Project Taxes are for the account of
the Owner, and Owner agrees to pay any such tax directly to the
applicable governmental authorities (or, if applicable, to reimburse
Contractor outside of the Contract Price for any such Project Taxes
paid by Contractor directly to the applicable governmental authorities)
within thirty (30) days after receipt of appropriate supporting
documentation and Contractor's Payment Request. Contractor shall use
all reasonable efforts to efficiently manage its provision of the
Services and other work hereunder so as to minimize the incurrence of
Project Taxes that are to be paid or reimbursed by Owner hereunder.
Contractor will use its reasonable prudence and diligence in the
administration of Taxes, and Contractor shall confirm with Owner in
advance any discretionary action, election or omission permitted in
connection with the Project Taxes. Project Taxes to be for the account
of and paid by Owner shall not include taxes that Contractor should not
have incurred if it had prudently performed the Services consistent
with its obligation as set forth above to minimize the incurrence of
Project Taxes, which taxes shall be for the account of and paid by
Contractor.
(c) Contractor shall promptly furnish to the
appropriate taxing authorities all required information and reports in
connection with the Taxes, and Contractor shall promptly furnish copies
of all such information and reports relating to Project Taxes to Owner.
In addition, Contractor shall, to the extent reasonably possible,
obtain or take advantage of, for the benefit of Owner, such tax
exemptions, rebates and credits that Owner has notified Contractor are
available with respect to the Facility and, upon Owner's request,
provide breakdowns of the Contract Price by cost components as may be
reasonably required in connection with Owner's efforts to obtain
tax-exempt financing. All subcontracts and purchase orders shall be
written exclusive of any sales or use tax, or, if not so written, shall
include the amount of such tax as a separate line item on the face of
such subcontracts
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and purchase orders along with adequate supporting documentation.
2.1.18 Employee Identification; Security. Contractor
shall provide and utilize a method, consistent with Prudent Utility
Practices, of checking the employees of Contractor and the
Subcontractors in and out of the Power Plant Site and such other areas
of the Facility Site in which the Services are to be performed. All
employees of Contractor and the Subcontractors at the Power Plant Site
shall be identified by the use of a distinctive badge or other proper
identification. Contractor shall cause each such employee to carry such
identification so that it can be readily seen at all times. Contractor
shall provide the security arrangements as set forth in Appendix A
hereto for the Project, the Power Plant Site and such other areas of
the Facility Site on which the Services are to be performed.
2.1.19 Adjoining Utilities. Contractor shall do all
things necessary or expedient to protect any and all parallel,
converging and intersecting electric lines and poles, telephone lines
and poles, highways, waterways, railroads, sewer lines, natural gas
pipelines, drainage ditches, culverts and any and all third-party
property from damage as a result of its performance of the Services. In
the event that any such property is damaged or destroyed in the course
of the performance of the Services, Contractor shall at its own expense
rebuild, restore or replace such damaged or destroyed property, unless
such property damage is the result of subsurface conditions which are
not and should not have been reasonably foreseen by Contractor prior to
the occurrence of such damage or destruction.
2.1.20 Protection of Property. (a) Contractor shall
provide, and shall ensure that each Subcontractor provides, proper and
ample protection from damage or loss (including, without limitation,
theft) to the Project, the Facility Site, materials, construction
equipment and tools (whether on or off the Facility Site) during its
performance of the Services. In the event that any of the Facility, the
Facility Site or other materials, construction equipment or tools are
damaged, destroyed or lost (including, without limitation, stolen),
then: (i) if
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such damage, destruction or loss occurred during the period that
Contractor is responsible for the care, custody and control of the
Facility and before care, custody and control thereof transfers to
Owner hereunder, Contractor shall be obligated, in accordance with and
subject to the provisions of Section 14.15.2 hereof, to rebuild,
restore or replace such damaged, destroyed or lost items; provided,
that to the extent such damage, destruction or loss is the result of
the negligence or intentional misconduct of Owner, its employees or
agents, Owner shall be responsible, in accordance with and subject to
the provisions of Section 14.15.2 hereof, for any insurance deductible
payment applicable thereto, up to the maximum deductible permitted
hereunder, but in no event to exceed two hundred and fifty thousand
dollars ($250,000) per occurrence; and (ii) if such damage, destruction
or loss occurred after care, custody and control of the Facility
transfers to Owner hereunder, Contractor shall not be so obligated to
rebuild, restore or replace such damaged, destroyed or lost items;
provided, that to the extent such damage, destruction or loss is the
result of the negligence or intentional misconduct of, or otherwise is
the result of the performance prior to Final Acceptance of the Facility
hereunder by, Contractor or any Subcontractor or any of their employees
or agents, Contractor shall be responsible, in accordance with and
subject to the provisions of Section 14.15.2 hereof, for any insurance
deductible payment applicable thereto, up to the maximum deductible
permitted hereunder, but in no event to exceed two hundred and fifty
thousand dollars ($250,000) per occurrence.
(b) Where ingress and egress to and from the Facility
Site requires the traverse of public or private lands, Contractor shall
limit the movement of its crews and equipment and of all Subcontractors
so as to cause as little damage as possible to crops or other property
and shall use all reasonable efforts to avoid marring such lands. All
fences and walls which must be opened or moved during construction of
the Facility shall be replaced or repaired by Contractor. Contractor
shall not be reimbursed by Owner for costs associated with loss of or
damage to crops, livestock or other property, whether on or off the
Facility Site or rights of way thereto, caused by or arising in
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connection with the performance of the Services by Contractor or any
Subcontractor hereunder.
2.1.21 Royalties and License Fees. Contractor shall
pay all royalties and license fees and shall procure, as required, the
appropriate proprietary rights, licenses, agreements and permissions
for materials, equipment, methods, processes and systems incorporated
into the Project. In performing the Services, Contractor shall not
incorporate into the Project any materials, equipment, methods,
processes or systems which involve the use of any confidential
information, intellectual property or proprietary rights which Owner
does not have the right to use or which may result in claims or suits
against Owner or Contractor arising out of claims of infringement of
any domestic or foreign patent rights, copyrights or other proprietary
or intellectual property rights, or applications for any such rights,
or use of confidential information.
2.1.22 Final Releases and Waivers.
2.1.22.1 Final Releases and Waivers. On or
before the payment of Retainage pursuant to Section 4.2.4(a)
hereof or any Termination Payment pursuant to Section 4.4
hereof, Contractor shall provide to Owner releases and waivers
in accordance with Section 2.1.22.3 hereof (which releases and
waivers may be conditioned upon Contractor's receipt of such
payment from Owner hereunder) of all claims, liens, security
interests or encumbrances in the nature of mechanics', labor
or materialmen's liens or otherwise, including those of
Subcontractors, against Owner, the Facility, the Facility
Site, the Real Estate Rights and all other Project property
and equipment, arising out of or in connection with the
Services; provided, that Contractor is not required to provide
such releases or waivers with respect to (i) any Permitted
Liens that are being contested in good faith by Contractor and
comply with the requirements set forth in clause (a) or (b) of
the definition thereof, (ii) any claim, lien or other
encumbrance for amounts that are the subject of a good faith
dispute between Contractor and Owner, provided that the
amount(s) in dispute do not
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exceed two million dollars ($2,000,000) in the aggregate,
(iii) any claim , lien, security interest or other encumbrance
for the payment of any unpaid portion of the Project
Completion Payment or other remaining Retainage that may
become due to Contractor hereunder and (iv) any claim arising
after the date Owner receives such releases or waivers,
including any claims thereafter arising under Article 13 or 14
hereof, provided that this clause (iv) shall not include any
claim that directly or indirectly is a claim relating to
compensation for the Services performed hereunder.
2.1.22.2 Failure of Major Subcontractors to
Furnish Final Waivers. If any of the major Subcontractors
listed in Appendix U hereto fail to furnish a final release
and waiver required pursuant to Section 4.6 hereof, in lieu
thereof Contractor shall either (i) furnish a bond or other
collateral, in form and substance satisfactory to Owner and
the Financing Parties, to fully indemnify Owner against any
loss resulting from such claims, liens or other interests of
such Subcontractor, or (ii) otherwise demonstrate to the
reasonable satisfaction of Owner and its Financing Parties
that such Subcontractors will have no ability under Applicable
Law to encumber any part of the Facility or the Facility Site.
2.1.22.3 Forms of Final Waivers. The forms
of required final releases and waivers for Contractor and such
major Subcontractors are set forth in Appendices I-1, and I-3
hereto, respectively.
2.1.23 Labor Relations and Project Labor Agreements.
Contractor shall be responsible for all labor relations matters
relating to the Project and shall at all times use all reasonable
efforts to maintain harmony among the unions (if any) and other
personnel employed in connection with the Project. Contractor shall at
all times use all reasonable efforts and judgment as an experienced
contractor to adopt and implement policies and practices designed to
avoid work stoppages, slowdowns, disputes and strikes.
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2.1.24 Further Assurances. Contractor shall execute
and deliver all further instruments and documents, and take all further
action, including but not limited to providing reasonable assistance to
Owner in filing a notice of completion with the appropriate state and
local lien recording offices, that may be necessary or that Owner may
reasonably request in order to enable Contractor to complete
performance of the Services or to effectuate the purposes or
requirements of this Agreement.
2.1.25 Coordination with Other Contractors.
Contractor shall use all reasonable efforts not to interfere with the
performance at the Facility Site of any other contractors designated by
Owner and to provide any such contractors a reasonable opportunity to
introduce and store materials and perform their services at the
Facility Site, provided such efforts and such other contractors do not
interfere with Contractor's performance of work at the Facility Site.
Contractor shall use all reasonable efforts to cooperate with Owner and
any such other contractors to coordinate Contractor's Services with the
work of such other contractors.
2.1.26 Not used.
2.1.27 Guaranty. Simultaneously with the execution of
this Agreement, Contractor shall cause Siemens Corporation to guarantee
irrevocably and unconditionally the performance and payment of all of
Contractor's obligations hereunder by executing and delivering to Owner
a guaranty substantially in the form set forth in Appendix L hereto
(the "EPC Guaranty").
2.2 Commencement of the Services. Except for such Services the
performance of which commences prior thereto pursuant to Sections 2.2.1 and
2.2.2 hereof, Contractor shall commence performance of the Services on the date
which Owner specifies (the "Commencement Date") in a written notice delivered to
Contractor in the form set forth as Appendix J-3 hereto (the "Notice to
Proceed"); provided, however, that the Notice to Proceed shall not be effective
unless either (i) the Financial Closing Date shall have occurred on or prior to
the Commencement Date or (ii) Owner shall have caused The AES Corporation
("AES") to guaranty irrevocably and unconditionally the performance and payment
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of all of Owner's obligations hereunder up to the Financial Closing Date, by
executing and delivering to Contractor a guaranty in substantially the form set
forth in Appendix M hereto (the "AES Pre-Financial Closing Guaranty").
2.2.1 Preliminary Notice to Proceed. The Parties
hereby acknowledge and agree that on May 1, 1998, and prior to the
delivery of the Provisional Notice to Proceed or the Notice to Proceed,
Owner and Contractor entered into a preliminary agreement in the form
set forth in Appendix J-1 hereto (the "Preliminary Notice to Proceed")
pursuant to which Contractor is to commence performance of specified
portions of the Services on the applicable dates set forth therein.
2.2.2 Provisional Notice to Proceed. The Parties
hereby acknowledge and agree that prior to the delivery of the Notice
to Proceed, Owner may issue a provisional notice to proceed in the form
set forth in Appendix J-2 hereto (the "Provisional Notice to Proceed")
which will require Contractor to commence performance of the Services
(including the full release of engineering, manufacturing and
procurement) on the date specified therein (the "Provisional
Commencement Date").
2.2.3 Pre-Commencement Date Termination or
Suspension. (a) Notwithstanding any provision in this Agreement to the
contrary, if this Agreement were to be terminated by Owner pursuant to
Section 15.1 hereof after the Preliminary Notice to Proceed but prior
to the occurrence of the Commencement Date, the total cancellation
costs that Owner shall be responsible for hereunder in connection with
the Services undertaken by Contractor following such Preliminary Notice
to Proceed shall be equal to the difference of (i) the cancellation
amount minus (ii) [*] in each case as set forth on Exhibit 1 of the
Preliminary Notice to Proceed for the Project Month in which such
termination occurs (provided, that if prior to any such termination the
pre-Commencement Date Services under Sections 2.2.1 and 2.2.2 hereunder
shall have been suspended hereunder, the period of such suspension
shall be excluded for purposes of determining the applicable Project
Month on said Exhibit 1). Owner and Contractor hereby acknowledge and
agree that the cancellation charges fixed pursuant to the Preliminary
Notice to Proceed and this Section
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2.2.3(a) are reasonable, and have been agreed upon and fixed hereunder
by the Parties because of the difficulty of ascertaining on the date
hereof the exact amount of cancellation-related costs that will be
actually incurred by Contractor in such event, and the Parties hereby
agree that the fixed amounts specified herein shall be applicable
regardless of the amount of such costs actually incurred by Contractor
as a result of any termination of this Agreement by Owner pursuant to
Section 15.1 hereof prior to the Commencement Date.
(b) Contractor will be paid monthly in arrears
(within thirty (30) days of receipt by Owner of an invoice and
reasonable supporting documentation therefor) for the pre-Commencement
Date Services actually performed under Sections 2.2.1 and 2.2.2 in
accordance with the Payment Schedule set forth on Exhibit 2 of the
Preliminary Notice to Proceed; [*]. In addition, upon the occurrence of
the Commencement Date, Owner shall withhold from the first Scheduled
Payment to be made to Contractor on or after the Commencement Date
under Section 4.2.2 hereof, as Retainage, an amount equal to 5% of all
payments theretofor made to Contractor pursuant to this Section
2.2.3(b), which Retainage shall be in addition to the 5% of such
Scheduled Payment to be withheld from such payment as Retainage
pursuant to Section 4.2.4 hereof.
(c) If the Provisional Commencement Date shall not
have occurred on or before September 23, 1998, or if the Commencement
Date shall not have occurred on or before January 31, 1999, in either
case for any reason other than Contractor's breach of its obligations
hereunder or a Force Majeure Event, Contractor may suspend its
performance of the Services under Sections 2.2.1 and 2.2.2 hereof upon
ten (10) days' prior written notice to Owner, which suspension may
continue until such time as the Provisional Commencement Date or the
Commencement Date, as the case may be, occurs hereunder. If Contractor
so suspends its performance hereunder, each of the Guaranteed
Completion Dates, the Construction Progress Milestone Dates, the
Payment and Milestone Schedule and the Project Schedule shall be
extended by the same number of days as the Contractor's performance is
so suspended
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under this Section 2.2.3(c); provided, however, that if such suspension
continues for more than sixty (60) days, such day-for-day schedule
extension shall no longer be applicable and instead an equitable
adjustment to one or more of the Contract Price, the Guaranteed
Completion Dates, the Construction Progress Milestone Dates, the
Payment and Milestone Schedule, the Project Schedule and, as
appropriate, such other provisions of this Agreement that may be
affected thereby, shall be made by the agreement of Owner and
Contractor or otherwise pursuant to Article 12 or 21 hereof.
2.2.4 Reservation Fee. In connection with
Contractor's reservation of two "501G econopacs" for the Project,
Contractor and Owner hereby acknowledge and agree that prior to the
date of this Agreement Owner has paid to Contractor a reservation fee
of [*].
2.3 Performance.
2.3.1 Standard of Performance. Without limiting any
other provision of this Agreement, (a) Contractor shall perform the
Services in accordance with Prudent Utility Practices, generally
accepted standards of professional care, skill, diligence and
competence applicable to engineering, construction and project
management practices, all Applicable Laws, all Applicable Permits, the
Real Estate Rights, the Quality Assurance Plan, the Electrical
Interconnection Requirements, the Environmental Requirements set forth
in Appendix S hereto, the safety precautions set forth in Section 2.5
hereof and all of the requirements necessary to maintain the warranties
granted by the Subcontractors pursuant to Section 3.4 hereof, and (b)
the Project shall be constructed and erected (i) in a good workmanlike
manner, (ii) using Prudent Utility Practices for use by a contractor in
connection with power stations of the same or similar size and type as
the Facility that are intended to have at least a 25-year useful life
(when operated and maintained in accordance with the Instruction
Manual, the PPA Operating Requirements and manufacturers'
instructions), and (iii) in accordance with the Design
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Documents and Appendix A hereto. All engineering work requiring
certification under Applicable Law shall be certified by professional
engineers licensed and properly qualified to perform such engineering
services in all appropriate jurisdictions, which engineers and their
qualifications shall be subject to the review and approval procedures
set forth in Section 2.1.4 hereof. In the event of Contractor's
noncompliance with this paragraph, subject to the following proviso,
Contractor's sole obligation and Owner's exclusive remedy for such
noncompliance shall be as stated in Article 10 hereof; provided,
however, that nothing in this sentence or in Article 10 hereof in any
way detracts from or limits any of (A) Contractor's obligation to
physically complete the Project for the compensation provided under
this Agreement, (B) Contractor's obligation to achieve Final Acceptance
of the Facility and to cause the Project to comply with all Applicable
Laws, all Applicable Permits, the Electrical Interconnection
Requirements, the PPA Operating Requirements and the Guaranteed
Emissions Limits, (C) Contractor's liability for willful breach of its
obligations hereunder and (D) Contractor's obligations under Articles
7, 8, 10 and 13 hereof.
2.3.2. Timeliness of Performance. Contractor shall
perform the Services in accordance with the Project Schedule and shall
cause (a) each Construction Progress Milestone to be achieved on or
prior to the applicable Construction Progress Milestone Date, (b)
either Provisional Acceptance or Interim Acceptance of the Facility to
occur on or prior to the Guaranteed Provisional Acceptance Date, and
(c) Final Acceptance of the Facility to occur on or before the
Guaranteed Final Acceptance Date; provided, however, that Contractor's
failure to satisfy any of clauses (a) through (c) above shall not
constitute an Event of Default hereunder except as set forth in Section
16.1(j) or (k) hereof.
2.3.3 Order of Performance. Owner shall have the
right to request that Contractor perform any part or parts of the
Services before any other part or parts of such Services, and
Contractor shall use all reasonable efforts to comply with such
request; provided, that Contractor shall not be obligated to comply
with such request if compliance would, in Contractor's reasonable
judgment, adversely affect
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Contractor's ability to meet the Project Schedule, the Performance
Guarantees, the Guaranteed Completion Dates, the Construction Progress
Milestone Dates or the warranties hereunder, or increase the cost to
Contractor of performing the Services. Compliance by Contractor with
such a request shall not relieve Contractor of any obligation hereunder
or affect its liability for failure to perform in accordance with this
Agreement.
2.3.4 Compliance with Approved Plans. In the event
that Contractor shall have submitted an Approved Plan to Owner pursuant
to Section 7.2.1 and/or 7.6.2 hereof, Contractor shall perform the
Services in accordance with such Approved Plan.
2.4 Compliance with Applicable Laws, Applicable Permits and
the Guaranteed Emissions Limits. (a) Contractor shall strictly comply with and
shall cause all Subcontractors and the Project and all components thereof
(including without limitation the design, engineering, construction and
operability of the Project) to strictly comply with all Applicable Laws and
Applicable Permits as they may be in effect at the time of Contractor's or such
Subcontractor's performance hereunder. Without limiting the foregoing, the
effect of any change in Applicable Laws or Applicable Permits enacted after the
date of this Agreement shall be determined under Section 12.5 hereof.
(b) Contractor shall perform the Services such that the
Facility, when operated in accordance with the Instruction Manual and the PPA
Operating Requirements (regardless of whether the Facility is operated at 700 MW
or at a different output) on Gas and on Fuel Oil, respectively, as of
Provisional Acceptance, Interim Acceptance and Final Acceptance, will comply
with all Applicable Laws and Applicable Permits, the Electrical Interconnection
Requirements and the Guaranteed Emissions Limits in accordance with the
Completed Performance Test requirements set forth in Section 6.2.7. hereof.
2.5 Safety Precautions. Contractor shall be solely responsible
for safety precautions and programs in connection with the performance of the
Services, and shall implement and administer a safety and health program for the
Services to be performed at the Facility Site which shall include: (a)
development of a Project safety manual establishing Contractor and Subcontractor
safety guidelines
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and requirements, (b) conducting of weekly Project safety meetings with all
Subcontractors, (c) development, implementation and enforcement of procedures
for advising Subcontractors of, and correction of, safety violations and
deficiencies, and (d) taking of all other actions necessary to provide a safe
work environment in accordance with Applicable Laws and Applicable Permits.
Contractor shall take all reasonable precautions for the safety of, and shall
provide all reasonable protection to prevent damage, injury or loss to: (x) all
Persons employed by Contractor or Subcontractors in connection with the Services
to be performed and all other Persons who may be affected thereby, (y) all
materials and equipment to be incorporated into the Project, whether in storage
on or off the Facility Site, owned by and/or under the care, custody or control
of Contractor or any Subcontractor, and (z) other property at the Facility Site
or adjacent thereto, including trees, shrubs, lawns, walks, pavements, roadways,
structures and utilities not designated for removal, relocation or replacement
in the course of construction. Contractor shall require all Subcontractors
working on the Facility Site to comply with all safety requirements in effect at
all such times.
2.5.1 Hazards. When the use or storage of explosives
or other hazardous materials or equipment is necessary for completion
of the Project or the execution of the Services, or when the conditions
under which the Services must be performed are necessarily hazardous,
Contractor shall exercise the utmost care and shall carry on such
activities under the supervision of properly qualified personnel.
2.5.2 Public Safety. Contractor shall erect and
maintain, as required by existing conditions and progress of the
Project or as otherwise required by Applicable Law, Applicable Permits
or any governmental authority, all reasonable safeguards (including
such reasonable safeguards established by Owner from time to time) for
safety and protection of the public, including supplying and
maintaining in good condition safety equipment, lighting, wire fences
and warning signals, employing guards, posting danger signs and other
warnings against hazards, promulgating safety regulations and notifying
owners and users of adjacent highways, waterways and utilities.
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2.5.3 OSHA. Contractor shall comply with and shall
cause all Subcontractors to comply with all applicable occupational
safety and health laws, child labor laws and other Applicable Laws
relating to safety and health.
ARTICLE 3
Subcontracts
3.1 Major Specialty Consultants, Subcontractors and Equipment
Suppliers.
3.1.1 Approved Subcontractors' List. Set forth in
Appendix E hereto is a list of certain equipment vendors, suppliers,
materialmen, consultants and subcontractors (and, if applicable, the
permitted countries of manufacture or fabrication relating thereto)
agreed to by the Parties and from which Contractor shall be obligated
to select those vendors, suppliers, materialmen, consultants and
subcontractors who will be executing subcontracts for the tasks
specified on such list in connection with the performance by Contractor
or any Subcontractor of the Services (the "Approved Subcontractors
List"). Owner shall have the right to recommend additions or deletions
to the Approved Subcontractors List from time to time (provided, that
any such recommended addition or deletion shall only be made with the
Contractor's approval, which shall not be unreasonably withheld), and
shall have the right to approve any successor or replacement of any
Person listed on such list or any other vendor, supplier, materialman,
consultant or subcontractor selected by Contractor (which approval
shall not be unreasonably withheld). No later than sixty (60) days
after execution of this Agreement, Contractor shall enter into
Subcontracts with applicable Subcontractors from the Approved
Subcontractors List for the provision of the Architect/ Engineer
services.
3.1.2 Equipment Standards. In connection with the
purchase of any items of equipment or machinery from any Subcontractor,
Contractor shall purchase only such models of equipment, machinery or
materials for incorporation into the Project as have attained the
standards of reliability and performance in the electrical generating
industry that are
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consistent with Prudent Utility Practices and the requirements of
Article 10 hereof.
3.1.3 Subcontractors and Related Information. All
vendors, suppliers, materialmen, consultants and subcontractors
providing equipment, materials or services directly or indirectly to
Contractor in connection with the Project are herein referred to as
"Subcontractors". Contractor shall provide to Owner such information
concerning the Subcontractors or the subcontracts and purchase orders
as Owner may reasonably request from time to time; provided, that
Contractor shall not be required to disclose any confidential
information including but not limited to proprietary cost or pricing
data, that Contractor, in its reasonable judgment, has a legitimate
business reason to withhold.
3.2 Purchase Orders and Subcontracts. Contractor's purchase
orders, subcontracts and similar purchase forms in connection with the Project
shall comply with the applicable requirements of this Agreement (including
without limitation the requirements set forth in Section 15.3 hereof). All
purchase orders and subcontracts for the Equipment specified in Appendix U
hereto shall contain a recommended spare parts list and a price list covering
all spare and replacement parts pertaining to the subject matter of such
purchase order or subcontract.
3.3 Payments to Subcontractors. Contractor shall be solely
responsible for paying (or arranging for the payment on its behalf to) each
Subcontractor and any other Person to whom any amount is due from Contractor for
services, equipment, materials or supplies in connection with the Project. Prior
to any such payment, Contractor shall take all reasonable steps to ensure that
such equipment, materials and supplies have been or will be received, inspected
and approved and that such services have been or will be properly performed in
accordance with the requirements of this Agreement.
3.4 Subcontractor Warranties. Contractor shall, for the
protection of Owner, obtain guarantees and warranties from all Subcontractors
with respect to all material machinery, equipment, services, materials, supplies
and other items used and installed hereunder on terms and conditions that are
consistent with Contractor's customary practices for projects of similar type
and capacity to the
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Project, and such guarantees and warranties shall not be amended, modified or
otherwise discharged without the prior written consent of Owner. Contractor
shall cause such guarantees and warranties received from Subcontractors with
respect to the Equipment specified in Appendix U hereto to cover a period of not
less than the Warranty Period set forth in clause (a) or (b), as applicable, of
the definition thereof. Contractor shall enforce such Subcontractor guarantees
and warranties obtained hereunder to the fullest extent thereof until such time
as they are transferred to Owner pursuant to Section 15.3 hereof. To the extent
that the scope or term of any of the guarantees and warranties obtained under
this Section 3.4 exceeds the scope or term of any of the guarantees or
warranties provided by Contractor pursuant to Article 10 hereof, and until such
Subcontractor guarantees and warranties are transferred to Owner pursuant to
Section 15.3 hereof, Contractor shall enforce such Subcontractor guarantees and
warranties on behalf of Owner to the fullest extent thereof. Without the consent
of Owner, neither Contractor nor its Subcontractors nor any Person under
Contractor's control shall take any action which could release, void, impair or
waive any such warranties or guarantees on equipment, materials or services.
Nothing in this Section 3.4 shall detract from or limit any of the obligations
of Contractor to provide the warranties described in, and to comply with the
provisions of, Article 10 hereof.
3.5 Subcontractor Insurance. Contractor shall require all
Subcontractors to obtain, maintain and keep in force during the time in which
they are engaged in performing Services, insurance coverages that are consistent
with Contractor's customary practices for such types of subcontracts for
projects of similar type and capacity to the Project and with the requirements
of Section 14.9 hereof, if applicable.
3.6 No Privity with Subcontractors. Owner shall not be deemed
by virtue of this Agreement or its performance hereunder to have any contractual
obligation to or relationship with any Subcontractor.
3.7 Review and Approval not Relief of Contractor's Liability.
The review, approval, consent and selection by Owner (or its designees) as to
the Approved Subcontractors List or as to Contractor's entering into any
subcontract or purchase order (including, without limitation, that for
performance of the Performance Tests)
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shall not relieve Contractor of any of its duties, liabilities or obligations
under this Agreement, and Contractor shall be liable hereunder to the same
extent as if such subcontract or purchase order had not been entered into. Any
inspection, review, approval or selection by Owner (or its designees) permitted
under this Agreement of any portion of the Services or of any work in progress
by Contractor or Subcontractors shall not relieve Contractor of any duties,
liabilities or obligations under this Agreement.
3.8 Assignability of Subcontracts. With respect to each
subcontract and purchase order entered into between Contractor and any
Subcontractor in connection with any of the Equipment specified in Appendix U
hereto, Contractor shall ensure that, and, with respect to each other
subcontract and purchase order entered into between Contractor and any
Subcontractor in connection with the Project, Contractor shall use all
reasonable efforts to ensure that, each such subcontract and purchase order is
assignable from Contractor to Owner (and its assignees).
3.9 Quality Control. Contractor shall ensure that all
Subcontractors establish and implement a quality control system in their work
and manufacturing processes which assures that all goods and services supplied
hereunder will comply with the quality assurance program guidelines required of
such Subcontractors as set forth in the Quality Assurance Plan.
ARTICLE 4
Price and Payment
4.1 Contract Price. As full consideration to Contractor for
the full and complete performance of the Services and all costs incurred in
connection therewith, Owner shall pay, and Contractor shall accept, the sum of
two hundred fourteen million nine-hundred fifty thousand dollars ($214,950,000),
to be paid in installments as set forth in Section 4.2 hereof, as such sum may
be adjusted pursuant to Section 4.3 and Article 12 hereof (such adjusted amount
referred to as the "Contract Price").
4.2 Payment Schedule. With respect to the Services actually
performed by Contractor pursuant to Sections 2.2.1 and 2.2.2 hereof prior to the
Commencement Date, Owner shall pay Contractor in accordance with the provisions
of Section 2.2.3(b) hereof. Commencing with the
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Commencement Date, the Contract Price (minus an amount equal to the sum of all
payments made to Contractor pursuant to said Section 2.2.3(b))shall be paid by
Owner to Contractor in installments, in accordance with the Payment and
Milestone Schedule ("Scheduled Payments") attached hereto as Appendix B, as
adjusted pursuant to Section 4.3 and Article 12 hereof, which Scheduled Payments
shall be subject to Retainage pursuant to Section 4.2.4 hereof. The first
Scheduled Payment to be made on or after the occurrence of the Commencement Date
shall also be subject to additional Retainage pursuant to Section 2.2.3(b)
hereof. Owner and Contractor may agree from time to time to amend the Payment
and Milestone Schedule to reflect changes in the order of performance of the
Services. Any Retainage withheld by Owner pursuant to Sections 2.2.3(b) and
4.2.4 hereof will be paid by Owner to Contractor pursuant to Section 4.2.4
hereof, which payments shall not be subject to any further Retainage.
4.2.1 Payments Upon Termination Prior to the
Commencement Date. In the event that this Agreement is terminated prior
to the Commencement Date for any reason other than Contractor's failure
to perform, Owner shall, on the date that is thirty (30) days after the
later of Owner's receipt of an invoice therefor and the date of such
termination, pay the applicable fixed cancellation charges due to
Contractor from Owner pursuant to Section 2.2.3(a) hereof with respect
to the Services performed by Contractor thereunder prior to such
termination in accordance with the standards of performance set forth
in this Agreement; provided, that Owner shall not be required to make
any such payment until Contractor has executed and delivered all
documents and taken all steps necessary to transfer all of Contractor's
right, title and interest in and to Project equipment and related
services to Owner or to such affiliate of Owner or such third party
purchaser as Owner may designate in writing in accordance with Section
4.4(b) or 15.1 hereof. Except as set forth in the preceding sentence,
Owner shall have no other payment or reimbursement obligation to
Contractor with respect to Contractor's performance of Services prior
to the Commencement Date hereunder, and Contractor hereby acknowledges
and agrees that all costs and expenses incurred by Contractor (other
than those expressly described in the preceding sentence) in performing
Services hereunder prior to the Commencement Date will be at its own
risk and expense and that it
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hereby waives any and all rights to require any payment therefor from
Owner, whether arising hereunder, at law or in equity, except as
expressly set forth in the preceding sentence.
4.2.2 Conditions to Scheduled Payments. Subject to
the terms of this Article 4, Owner shall, within thirty (30) days after
the later of (i) each successive applicable payment date set forth in
the Payment and Milestone Schedule and (ii) receipt by Owner of an
invoice package from Contractor in which Contractor certifies that (1)
all of the milestones set forth on the Payment and Milestone Schedule
required to be achieved prior to such payment date have been achieved
in compliance with the standards of performance set forth in Section
10.1 hereof and (2) it is performing the Services hereunder in a timely
manner consistent with achieving Final Acceptance of the Facility no
later than the Guaranteed Final Acceptance Date (the "Contractor's
Payment Request"), make or cause to be made the Scheduled Payments to
Contractor with respect to the Services performed; provided, that:
(a) Owner shall not be obligated to make any
Scheduled Payment hereunder if the Owner, or at the Owner's
election, the Independent Engineer fails to confirm the
matters so certified to by Contractor in the Contractor's
Payment Request with respect to such payment; provided,
further, that if Contractor disputes the decision of the Owner
or the Independent Engineer, as the case may be, and it is
determined pursuant to Article 21 hereof that the Owner or the
Independent Engineer, as the case may be, should have
confirmed the matters so certified by Contractor in the
Contractor's Payment Request with respect to such payment, but
failed to do so, then Contractor shall be entitled to interest
on such Scheduled Payment in accordance with Section 25.1
hereof to be accrued from the date such Scheduled Payment
would otherwise have been due to Contractor until the date
actually paid to Contractor;
(b) Owner shall not be obligated to make any
Scheduled Payment hereunder until Contractor has supplied
Owner with the certification and waivers required pursuant to
Section 4.6 hereof; and
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(c) If this Agreement is terminated before the
Project Completion Payment is made, Owner shall not be
obligated to make further Scheduled Payments or other payments
except in accordance with Section 4.4 hereof, if and to the
extent applicable.
4.2.3 Deferral of Scheduled Payments. Subject to the
following sentence, any Scheduled Payment that Owner is not obligated
to, and does not, make under Section 4.2.2 hereof shall be made,
without interest, following the applicable payment date under Section
4.2 hereof, within fifteen (15) days of the date on which all
conditions described in such Section are satisfied. In no event shall
Owner, as a result of deferred Scheduled Payment(s) or otherwise, be
obligated to make more than one payment per month of amounts due to
Contractor under this Agreement (other than any Termination Payment
hereunder); rather, Contractor shall submit to Owner only one invoice
package per month, which invoice package will set forth all amounts
then due to Contractor hereunder (including any deferred Scheduled
Payment(s) or other non-scheduled payments due, as well as the
Scheduled Payment for such month).
4.2.4 Retainage. Owner shall withhold from each
Scheduled Payment, other than the Project Completion Payment, an amount
equal to 5% of such payment, and shall also withhold from the first
Scheduled Payment to be made on or after the occurrence of the
Commencement Date an additional amount as set forth in Section 2.2.3(b)
hereof, which withheld amounts shall be held by Owner as retainage
("Retainage"). Subject to Section 4.8 hereof, Retainage shall be paid
to Contractor in accordance with the following:
(a) Within fifteen (15) days after the determination,
in accordance with the terms of this Agreement, that Final
Acceptance of the Facility has been achieved (provided that
Contractor shall first have paid in full any Provisional
Acceptance Late Completion Payments and any Performance
Guarantee Payments due to Owner hereunder, which payment may,
at Contractor's election, be made in whole or part by Owner's
set-off pursuant to Section 4.8 hereof as
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long as after such set-off Owner still holds Retainage in at
least the amounts Owner is entitled to retain under this
clause (a)) and receipt by Owner of documentation in the forms
specified in Appendix I hereto establishing that the
requirements of Section 4.6 and 2.1.22 hereof have been met,
all Retainage, except for the sum of one million dollars
($1,000,000) and one hundred fifty percent (150%) of the cost
of completing all Punch List items as determined by the
Independent Engineer, shall be paid to Contractor;
(b) Within thirty (30) days after Project Completion
pursuant to Section 6.6 hereof, all remaining Retainage, shall
be paid to Contractor in accordance with the terms of Section
4.2.5 hereof.
4.2.5 Project Completion Payment. Owner shall make to
Contractor the payment of the sum of the unpaid balance of the Contract
Price (including all Retainage (the "Project Completion Payment")
within thirty (30) days after Project Completion.
4.3 Price Adjustments.
4.3.1 Base Scope Changes; Scope Options. (a) Owner
and Contractor hereby agree that as expressly set forth in Section A of
Appendix O hereto, the applicable Scope Changes set forth in said
Section A of Appendix O (the "Base Bid Scope Changes") will be made
hereunder. On or before the Provisional Commencement Date, Owner shall
issue a Scope Change Order setting forth the adjustments to the
Contract Price (as the Contract Price set forth in Section 4.1 hereof
does not include any of the price adjustments for such Base Bid Scope
Changes), as expressly set forth in said Section A of Appendix O hereto
as being applicable to such specified circumstances.
(b) In its sole discretion and by delivery of a
written notice to Contractor on or prior to the respective dates
provided in Section B of Appendix O hereto for each scope option listed
therein, Owner may add to the Services one or more of the scope options
listed in said Section B of Appendix O. In the event Owner makes any
such election(s), (i) the Contract
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Price shall be adjusted in accordance with the respective provisions of
Section B of Appendix O hereto that are expressly set forth therein as
being applicable to such scope option(s), and (ii) corresponding
adjustments to the Payment and Milestone Schedule shall be made as
reasonably agreed upon by Owner and Contractor.
4.4 Payment upon Termination. (a) Upon termination of this
Agreement at any time after the Commencement Date pursuant to Section 15.1 or
15.2 hereof, Contractor shall be entitled to be paid at the time specified in
Section 4.4.2 hereof an amount (the "Termination Payment") equal to the sum of
(1) any and all Scheduled Payments due and owing to Contractor on or prior to
the date of termination, (2) any pro-rata portion of the Scheduled Payment due
for that month in which such termination occurs, (3) all Retainage held by Owner
at such time, and (4) all reasonable, actual termination costs for all aspects
of the Services properly performed by Contractor and its Subcontractors (which
costs shall include, without limitation, cancellation charges and demobilization
costs and the administrative and legal costs incurred in assigning Subcontracts
to Owner pursuant to Section 4.4(b)(x) hereof), as audited and accepted by an
independent certified public accounting firm selected by Owner and reasonably
acceptable to Contractor, to the extent such costs are not covered by clauses
(1) and (2) directly above; provided, however, that costs incurred by Contractor
in connection with items procured by Contractor shall not be included in the
Termination Payment until Contractor shall have delivered to Owner (or to
Owner's designee, which may be any other AES affiliate or any third party
purchaser, provided that such assignment is consistent with the provisions of
Article 17 and Section 25.16 hereof) all documents necessary to transfer all of
Contractor's right, title and interest in and to such items to Owner (or such
designee) and, with respect to such items which Contractor has received
possession of, Contractor shall have delivered such items to Owner (or such
designee), in each case free and clear of all liens and encumbrances made by,
through or under Contractor or any Subcontractor (subject to Owner's payment of
the Termination Payment due hereunder). Contractor shall use all reasonable
efforts to minimize any termination costs under clause (4) above.
(b) As conditions precedent to receiving any termination
payment under Section 4.2.1 hereof or any
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Termination Payment pursuant to Section 4.4 hereof, Contractor shall (x) if
Owner so requests, execute and deliver all such papers and take all such steps,
including legal assignments, as required for the purpose of fully vesting in
Owner (or its designee) all contractual rights of Contractor under all
subcontracts, purchase orders, warranties, guarantees and other agreements
(provided that with respect to any such contractual rights relating to
Subcontractors other than those Subcontractors on the Approved Subcontractor
List and other than any other Subcontractors with respect to the equipment
specified in Appendix U hereto, Contractor shall be obligated to cause such
vesting only to the extent such rights are so assignable and only to the extent
required under Section 15.3(a) hereof) and (to the extent permitted under
Applicable Law) all rights and obligations of Contractor under Applicable
Permits and (y) comply with the requirements of Section 2.1.22 hereof.
4.4.1 Verification of the Termination Payment.
Contractor shall, within sixty (60) days of any such termination of all
or part of the Services, make available for review by Owner and the
independent accounting firm referred to in clause (4) of Section 4.4(a)
hereof all invoices and other documentation as are sufficient to enable
Owner to verify the performance of the Services and such accounting
firm to verify Contractor's costs associated therewith, in order to
determine the amount of the Termination Payment due thereunder. The
Termination Payment shall not include the costs of future anticipated
profit.
4.4.2 Payment of the Termination Payment. Owner shall
pay the Termination Payment to Contractor within thirty (30) days of
Owner's receipt of the documentation required under Sections 4.4(b) and
4.4.1 hereof.
4.4.3 Limitation of Liability. Payment of the
Termination Payment under this Section 4.4 or payment of the amounts
specified under Section 4.2.1 hereof, as the case may be, shall be the
sole and exclusive liability of Owner to Contractor, and the sole and
exclusive remedy of Contractor, with respect to termination of this
Agreement pursuant to Section 15.1 or 15.2 hereof. In no event shall
Owner have any further liability to Contractor in any such event for
actual, incidental, consequential or other damages
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resulting from such termination, notwithstanding the actual amount of
damages that Contractor may have sustained.
4.5 No Payment in the Event of Material Breach.
Notwithstanding any other provision to the contrary contained herein, Owner
shall have no obligation to make any payment to Contractor at any time when
Contractor is in material breach of this Agreement; provided, however, that if
Contractor is diligently pursuing a cure of such material breach and if
Contractor satisfies the conditions to payment set forth in Section 4.2.2
hereof, then unless and until Owner elects to commence pursuing its rights and
remedies under Section 16.2 hereof, Owner shall pay Contractor an amount equal
to the lesser of (i) the Scheduled Payment(s) that would otherwise be due and
payable on such date under this Agreement and (ii) the value (as reasonably
determined by Owner) of the Services provided by Contractor hereunder since the
last Scheduled Payment (or portion thereof) made by Owner; and provided further,
that if Owner's determination that Contractor is in material breach hereof is
subsequently found pursuant to Article 21 hereof to be incorrect, then
Contractor shall be entitled to interest on the unpaid amounts from the date
such amounts should have been paid hereunder until such time such payments are
made at the interest rate specified in Section 25.1 hereof. Any partial payments
made by Owner pursuant to clause (ii) above shall be credited against the first
Scheduled Payments remaining under the Payment and Milestone Schedule. On the
payment date next following the date on which all material breaches of
Contractor have been remedied, Owner shall make all payments withheld during the
continuation of such material breaches without interest, subject to the
provisions of this Article 4, less any amounts due from Contractor to Owner
pursuant to Section 16.2 hereof.
4.6 All Payments Subject to Release of Claims.
4.6.1 Interim Waivers. On or before any payment to
Contractor hereunder in connection with the payment of the Contract
Price (excluding any Retainage, the Project Completion Payment and any
Termination Payment, as the provisions of Section 2.1.22 hereof shall
apply with respect to such excluded payments), Contractor shall (a)
certify to Owner that (1) there are no claims, liens, security
interests or encumbrances against the Facility, the Facility Site and
any and all interests and estates therein, and all
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improvements and materials placed on the Facility Site, arising out of
or in connection with performance by Contractor or any Subcontractor of
the Services through the date of the invoice covering such payment
outstanding or known to exist at the date of such certification, other
than any Permitted Liens or any claims that are the subject of a good
faith dispute between Contractor and Owner (provided that the amount(s)
in dispute do not exceed one million dollars ($1,000,000) in the
aggregate), or (2) if any such claims, liens, security interests and
encumbrances (other than any such Permitted Liens and disputed claims)
exist, upon payment to Contractor of such Scheduled Payment all such
claims, liens, security interests and encumbrances shall be
extinguished, and Contractor shall promptly deliver to Owner evidence
of such extinguishment, and (b) provide to Owner a waiver and release,
in substantially the form attached hereto as Appendix I-2, of all
claims against the Facility, the Facility Site and any and all
interests and estates therein, and all improvements and materials
placed thereon, arising out of or in connection with performance by
Contractor of the Services through the date of the invoice covering
such payment, other than any such Permitted Liens and disputed claims.
If any lien or claim of lien, other than a Permitted Lien, is filed
against any portion of the Project, Owner may withhold from any
Scheduled Payment or other payment payable to Contractor an amount
sufficient to discharge any or all such liens or claims and, after
thirty (30) days from the time such lien or claim is made (or sooner,
if the Applicable Law would otherwise allow the claimant to proceed to
enforce such lien or claim), may discharge such lien or claim with the
moneys withheld, whereupon for purposes of this Agreement such moneys
shall be deemed to have been paid to Contractor hereunder.
4.6.2 Final Release from Subcontractors. In addition
to the interim waivers required under Section 4.6.1 above, on or prior
to the payment date next following the date on which final payment to
such Subcontractor is made, with respect to each Subcontractor
providing the services or equipment listed in Appendix U hereto,
Contractor shall deliver to Owner a copy of a final release and waiver,
in the form of Appendix I-3 hereto. Notwithstanding the foregoing, if
Contractor is unable to deliver a final
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release and waiver required under this Section 4.6.2, Contractor may
provide to Owner in lieu thereof either (a) a bond or other collateral,
in form and substance satisfactory to Owner and the Financing Parties,
to fully indemnify Owner against any loss resulting from claims of such
Subcontractor or (b) otherwise demonstrate to the reasonable
satisfaction of Owner and its Financing Parties that such
Subcontractors will have no ability under Applicable Law to encumber
any part of the Facility or the Facility Site.
4.7 Payment or Use not Acceptance. No Scheduled Payment or
other payment to Contractor or any use of the Facility by Owner shall constitute
an acceptance of any of the Services or shall relieve Contractor of any of its
obligations or liabilities with respect thereto.
4.8 Set-Off. Owner may deduct and set-off against any part of
the balance due or to become due to Contractor under this Agreement, and/or may
apply any Retainage held by Owner for payment of, any amounts due from
Contractor to Owner under or in connection with this Agreement (including,
without limitation, any amounts due under Articles 5, 7, 8, 10, 13, 14 or 16
hereof). The application of any Retainage in payment of any amounts due from
Contractor hereunder pursuant to this Section 4.8 shall not constitute a cure of
any such payment default by Contractor hereunder unless after such application
of Retainage, Owner holds Retainage in the aggregate amount that Owner would
then be entitled to hold as Retainage under Section 4.2.4 hereof. In the event
that Owner sets-off pursuant to this Section 4.8 against any amount due to
Contractor hereunder an amount believed by Owner to be due from Contractor to
Owner hereunder, but which is subsequently determined to be not due from
Contractor to Owner hereunder, then Contractor shall be entitled to interest on
such set-off amount at the interest rate specified in Section 25.1, which
interest shall accrue from the date such set-off amount would otherwise have
been due to Contractor until the date actually paid to Contractor.
ARTICLE 5
Owner Services
5.1 Representative. Owner shall designate a representative who
shall be acquainted with the Project and shall have authority to administer this
Agreement on behalf
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of Owner, agree upon procedures for coordinating Owner's efforts with those of
Contractor and furnish information, when appropriate, to Contractor.
5.2 Facility Site. No later than the Commencement Date, Owner
shall furnish to Contractor access to the Facility Site, as set forth on
Appendix H hereto, for all on-site construction-related activities, subject to
the availability of, and the terms and conditions of, any Applicable Permits
(other than Building Permits) required to be obtained by Owner with respect to
such activities under Section 5.3 hereof. Subject to the provisions of Section
20.2 hereof, Contractor hereby agrees that the Facility Site as described in
Appendix H hereto, together with the Real Estate Rights designated in Appendix G
hereto, is suitable and sufficient for Contractor to perform the Services.
5.3 Permits and Real Estate Rights. (a) Owner shall secure and
maintain at its own expense (i) all Applicable Permits and Real Estate Rights
which are listed in Appendices F and G hereto, respectively, and designated
therein as Owner's responsibility, and (ii) all other Applicable Permits (other
than Building Permits) and Real Estate Rights (other than those required to be
obtained by Contractor pursuant to Section 2.1.14 hereof), if any, required for
completion of the Project (including without limitation all such Applicable
Permits and Real Estate Rights required to be obtained or maintained in
connection with the transmission of electricity to the Utility and operation of
the Project).
(b) If any Applicable Permit necessary for performance of the
Services (other than any Building Permit) is not obtained when required under
this Agreement and Contractor was reasonably delayed in the performance of the
Services as a direct result thereof, the provisions of Section 5.9 hereof shall
apply.
(c) If any Real Estate Right listed in Appendix G or H hereto
and required for the performance of the Services is not obtained when required
under this Agreement and Contractor was reasonably delayed in the performance of
the Services as a direct result thereof, the provisions of Section 5.9 hereof
shall apply.
(d) Owner shall cooperate with Contractor and shall use all
reasonable efforts to provide all necessary information and documents and
otherwise assist Contractor in
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connection with Contractor's efforts to obtain the Applicable Permits and, if
applicable, any Real Estate Rights required to be obtained by Contractor
hereunder pursuant to Section 2.1.5 and/or 2.1.14(b) hereof.
(e) In the event that the inability of a Party to obtain any
Applicable Permit (including without limitation any Building Permit) or Real
Estate Right required hereunder is caused by a Force Majeure Event, the
provisions of this Section 5.3 are subject to, and are not intended to
supersede, the provisions of this Agreement relating to Force Majeure Events
(including without limitation Article 11 and Section 12.7 hereof).
5.4 Start-Up Personnel. Owner (or its designee) shall provide
at its own expense operating and maintenance personnel of such number as Owner,
in good faith, reasonably determines is appropriate for the normal, day-to-day,
in-service operation and maintenance of the Facility, which personnel shall be
trained by Contractor and assist Contractor by performing normal operating and
maintenance duties in connection with the start-up of the Facility and the
performance of the Performance Tests and PPA Output Tests. Said personnel will
be available to Contractor for such purposes until Final Acceptance of the
Facility. Contractor shall be responsible for providing technical guidance to,
and shall otherwise direct, Owner's operating and maintenance personnel during
the start-up and testing of the Facility. Contractor shall not be responsible
for the gross negligence or intentional misconduct of any of Owner's operating
and maintenance personnel. Any personnel required in addition to those provided
by Owner pursuant to this Section 5.4 will be the responsibility of Contractor.
The provision of personnel by Owner (or its designee) pursuant to this Section
5.4 shall not relieve Contractor of any of its obligations or liabilities
hereunder.
5.5 Water, Spare Parts, Waste Disposal and Consumables. Owner
shall furnish (a) all raw water from the Pennsy Supply quarry required for
Contractor's performance of the Services, provided that this clause (a) shall
not relieve Contractor of its obligations under Sections 2.1.8 and 2.1.11 hereof
to arrange for all facilities necessary to allow for the delivery of such water
from the Pennsy Supply quarry to the Power Plant Site (including without
limitation the facilities specified in Appendix A hereto) and for all treatment
of such water required for such use, (b) all facilities necessary to allow for
the delivery of water from
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the WWTP to the Power Plant Site, (c) all operational spare parts, (c) all waste
disposal services required with respect to Facility operations after the Risk
Transfer Date and (d) any refills of lubrication oil, grease, resins and other
consumables (including water treatment chemicals) which are required as a result
of operation of the Facility after the Risk Transfer Date; provided, that this
Section 5.5 shall not relieve Contractor of any of its obligations under Article
II hereof, including without limitation Sections 2.1.8 and 2.1.11 hereof.
5.6 Utilities. Owner shall arrange for and pay for the
provision of all permanent utilities required for the start-up, testing and
operation of the Facility (other than any excess electricity requirements for
which Contractor is responsible pursuant to Section 2.1.11 hereof), and shall
not be responsible for any other utilities that will be required at the Facility
Site during the construction of the Facility, other than for arranging for (i)
the availability of raw water to Contractor at the Pennsy Supply quarry as set
forth in Section 5.5 hereof, (ii) the availability at the boundary of the Power
Plant Site of the Fuel Supplier's natural gas pipeline facilities and such other
delivery facilities or arrangements as are necessary for the delivery of Fuel
Oil as set forth in Section 5.7 hereof, (iii) during the period from completion
of interconnection of the Electrical Interconnection Facilities to the Utility's
transmission system until completion of initial synchronization of the steam
turbine generator, the provision of up to twelve (12) million kWh of
electricity, and (iv) the availability at the Electrical Interconnection Point
of the Utility's electrical interconnection facilities as set forth in Section
5.8 hereof.
5.7 Fuel. Owner shall arrange for the Fuel Supplier's natural
gas pipeline system to be made available for interconnection with the Facility
at the interconnection point identified in Appendix A hereto, with such
facilities to be scheduled to be so available for such interconnection
twenty-one (21) weeks prior to the Guaranteed Provisional Acceptance Date
(provided that Contractor has made the Facility available as reasonably required
to permit such interconnection to be made). Owner shall arrange for the
provision of Gas and Fuel Oil (and, at Owner's option, No. 2 Fuel Oil (but not
for use with respect to the testing requirements hereunder)) as required for the
start-up, testing and operation of the Facility, with such supply of
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Gas and Fuel Oil to be scheduled to be available twenty-one (21) weeks prior to
the Guaranteed Provisional Acceptance Date, provided that Contractor shall have
given Owner prior written notice of the Gas and Fuel Oil requirements for the
commencement of Facility testing, and shall have reconfirmed such requirements
if necessary, on or before the date on which Owner is required to notify (and,
if applicable, reconfirm with) the Fuel Supplier of such requirements under its
fuel supply arrangements (provided that such notification requirements are
consistent with Prudent Utility Practices). Unless Owner and the Fuel Supplier
otherwise agree, the commencement of Facility testing shall not occur prior to
such scheduled date. During the period from completion of interconnection of the
Electrical Interconnection Facilities to the Utility's transmission system until
completion of initial synchronization of the steam turbine generator, Owner
shall arrange and pay for the provision of all Gas used by the Facility for
startup in accordance with Section 6.1 hereof and for Facility operation that
generates electricity for delivery to the Utility.
5.8 Electrical Interconnection. Owner shall arrange for the
Utility's electrical interconnection facilities between the Electrical
Interconnection Point and the Utility's transmission system to be constructed
and made available for interconnection with the Facility at the Electrical
Interconnection Point at least eight (8) months prior to the Guaranteed
Provisional Acceptance Date (provided that Contractor has made the Facility
available as reasonably required to permit such interconnection to have been
made by such date).
5.9 Owner's Failure to Meet Obligations. If Owner fails to
meet any of its obligations under this Article 5, then, to the extent that
Contractor was reasonably delayed in the performance of the Services as a direct
result thereof, an equitable adjustment to one or more of the Contract Price,
the Guaranteed Completion Dates, the Construction Progress Milestone Dates, the
Payment and Milestone Schedule and the Project Schedule, and, as appropriate,
such other provisions of this Agreement that may be affected thereby, shall be
made by agreement of Owner and Contractor or otherwise pursuant to Article 12 or
21 hereof.
5.10 Approvals. Owner shall use all reasonable efforts to
furnish in a timely manner all required review or
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other appropriate action or information with respect to all drawings, samples,
estimates, schedules, questions and other items submitted by Contractor. Owner
shall also use all reasonable efforts to cause the Independent Engineer to
respond within the time periods contemplated herein with respect to its reviews
of payment invoices, Performance Test results and any other matters hereunder
requiring its review and approval. If Owner fails to furnish such required
review or other appropriate action or information, or if the Independent
Engineer fails to respond to the matters requiring its review and approval,
within the time periods specified therefor in this Agreement, then to the extent
that Contractor was reasonably delayed in the performance of the Services as a
direct result thereof, the provisions of Section 5.9 hereof shall apply.
5.11 Administration of Third Party Project Agreements. Owner
shall use all reasonable efforts to administer and coordinate the establishment
of, and upon the reasonable request of Contractor the continued participation by
all third parties other than Contractor Responsible Parties (including the
Utility, the Fuel Supplier and other third parties supplying permanent utilities
to the Project) in connection with, such meetings and other interactions between
such third parties and Contractor as are reasonably necessary for Contractor's
performance of the Services hereunder.
5.12 AES Pre-Financial Closing Guaranty. On or before the date
of execution of this Agreement, Owner shall cause AES to provide the AES
Pre-Financial Closing Guaranty.
ARTICLE 6
Completion and Acceptance of Project
6.1 Project Start-up; Mechanical Completion.
6.1.1 Project Start-up. (a) Contractor shall be
responsible for the start-up and synchronization of the Facility with
the transmission system of the Utility in accordance with Applicable
Laws, Applicable Permits, Prudent Utility Practices, the Electrical
Interconnection Requirements, the PPA Operating Requirements (to the
extent applicable to start-up and synchronization) and the Instruction
Manual. Contractor shall provide Owner and the Utility with at least
fifty (50) days' prior written notice of
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the expected start-up, commissioning and testing of the Facility and
shall keep Owner and the Utility duly advised of any changes in the
expected dates. Contractor shall (1) no later than thirty (30) days
prior to expected initial operation of the Facility in parallel with
the Utility's system, provide as-built plans and specifications as
reasonably acceptable to the Utility for the Electrical Interconnection
Facilities (including Protective Apparatus), and (2) prior to
interconnection and parallel operation of the Facility with the
Utility's system, provide a written certification, in form and
substance reasonably satisfactory to the Utility, from the licensed
inspection agency or registered professional engineer engaged by
Contractor prior to commencement of construction of the Electrical
Interconnection Facilities and who is reasonably acceptable to the
Utility, to the effect that the Electrical Interconnection Facilities
(including the Protective Apparatus) have been inspected, are
satisfactory and are in compliance with applicable Accepted Electrical
Practices, in each case in accordance with the requirements of Section
7.5(a) of the Power Purchase Agreement. Contractor shall not commence
any start-up or testing of the Facility for operation in parallel with
the Utility system without the prior consent of the Utility pursuant to
Section 7.5(b) of the Power Purchase Agreement; provided, however, that
in the event that the Utility unreasonably withholds its consent to
such operation despite the Facility and its Electrical Interconnection
Facilities being consistent with the Electrical Interconnection
Requirements, Prudent Utility Practices and the other standards of
performance required hereunder (including without limitation Appendix A
hereto), then, to the extent that Contractor was reasonably delayed in
the performance of the Services as a direct result thereof, the
provisions of Section 5.9 hereof shall apply.
(b) Owner, the Utility, the Financing Parties and the
Independent Engineer shall be permitted to have their own or their
designee's personnel on the Facility Site to observe and verify all
synchronization procedures and Performance Tests. Subject to Section
2.3.1 hereof, Contractor shall, until the occurrence of Provisional
Acceptance of the Facility, manage the operation of the Facility in the
course of performing any start-up, commissioning and testing
activities, in
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consultation with Owner and its operating personnel in a manner
consistent with Applicable Laws, Applicable Permits, Prudent Utility
Practices, the Electrical Interconnection Requirements (including
required approvals by the Utility), the PPA Operating Requirements (to
the extent applicable to start-up, commissioning and testing
activities) and the Instruction Manual.
6.1.2 Mechanical Completion. Mechanical Completion
shall be achieved hereunder with respect to the Facility if the
following conditions have been met:
(a) All equipment and facilities necessary for the
full, safe and reliable operation of the Facility have been
properly constructed, installed, insulated and protected where
required, and correctly adjusted, and can be safely used for
their intended purposes in accordance with the Instruction
Manual and all Applicable Laws and Applicable Permits;
(b) The tests required for Mechanical Completion that
are identified in Appendix D hereto have been successfully
completed;
(c) The Facility is fully and properly interconnected
and synchronized with the electrical system of the Utility in
accordance with the Electrical Interconnection Requirements,
and all features and equipment of the Facility are capable of
operating simultaneously; and
(d) The complete performance by Contractor of all the
Services relating to the Facility under this Agreement, except
for any remaining Punch List items, Performance Tests, PPA
Output Tests, and Reliability Run applicable thereto, in
compliance with the standards of performance set forth in this
Agreement, such that the Facility meets all of the
requirements set forth in this Agreement applicable thereto
(including, without limitation, Appendix A hereto, but
excluding the achievement of the Guaranteed Emissions Limits
and the Performance Guarantees).
6.1.2.1 Notice and Report of Mechanical
Completion. When Contractor believes that it has
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achieved Mechanical Completion, it shall deliver to Owner a
notice thereof (the "Notice of Mechanical Completion"). The
Notice of Mechanical Completion shall contain a report in a
form reasonably acceptable to Owner and with sufficient detail
to enable Owner to determine whether Mechanical Completion has
been achieved.
6.1.2.2 Achievement of Mechanical
Completion. Owner shall, within ten (10) days (or such shorter
period as may be practicable with the Owner's use of all
reasonable efforts) following receipt of the Notice of
Mechanical Completion, inspect the Facility, review the report
submitted by Contractor and either (a) deliver to Contractor a
certificate stating that the requirements under Section 6.1.2
have been satisfied (the "Mechanical Completion Certificate")
or (b) if reasonable cause exists for doing so, notify
Contractor in writing that Mechanical Completion has not been
achieved, stating the reasons therefor. In the event that
Mechanical Completion has not been achieved in accordance with
the provisions of this Section 6.1.2 as so determined by
Owner, Contractor shall promptly take such action or perform
such additional Services as will achieve Mechanical Completion
of the Facility and shall issue to Owner another Notice of
Mechanical Completion pursuant to Section 6.1.2.1 hereof. Such
procedure shall be repeated as necessary until Mechanical
Completion of the Facility has been achieved; provided,
however, that Owner shall respond to Contractor no later than
three (3) days following receipt of any re-submitted Notice of
Mechanical Completion. For all purposes of this Agreement, the
date of achievement of Mechanical Completion shall be the date
on which Owner delivers to Contractor the Mechanical
Completion Certificate corresponding to the actual achievement
of Mechanical Completion pursuant to this Section 6.1.2.2.
6.2 Performance Tests and PPA Output Tests. Once Mechanical
Completion has been achieved and subject to the provisions of Section 6.2.1
hereof, Contractor shall perform the Performance Tests and the PPA Output Tests
of the Facility in accordance with Appendix D hereto. Owner shall designate and
make available qualified and authorized
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representatives to observe the Performance Tests and the PPA Output Tests and
monitor the taking of measurements to determine the level of achievement of the
Performance Guarantees, all in accordance with Appendix D hereto. The Utility
and the Independent Engineer shall be permitted, upon the Owner's request, to
observe the Performance Tests and the PPA Output Tests. Subject to Section 6.3.4
hereof, until Final Acceptance of the Facility has occurred, Contractor may
undertake efforts to improve the performance of the Facility and may cause
additional Performance Tests to be performed and re-performed in order to
improve the performance results to reduce Contractor's liability for amounts
payable as Performance Guarantee Payments with respect to the Facility.
Contractor shall keep Owner's representative continuously apprised of the
specific schedule, and changes therein, for the commencement and re-performance
of Performance Tests or PPA Output Tests. Contractor, at its discretion, may
prematurely terminate any Performance Test or PPA Output Tests in a manner
consistent with Appendix D hereto, the Electrical Interconnection Requirements,
the PPA Operating Requirements, Applicable Laws, Applicable Permits and Prudent
Utility Practices. Prior to commencing any Performance Tests or PPA Output Tests
hereunder, Owner and Contractor shall mutually and reasonably agree upon more
detailed procedures and notice requirements regarding rescheduling or restarting
any such tests, which procedures and notice requirements shall be subject to the
approval of the Independent Engineer and the Utility.
6.2.1 Performance Test and PPA Output Test Criteria.
Each Performance Test which is used in connection with achievement of
Provisional Acceptance, Interim Acceptance and Final Acceptance shall
consist of the operation of the Facility as a whole in accordance with
the performance test terms and conditions set forth in Part A of
Appendix D hereto while using Gas for fuel and, in connection with
Final Acceptance only, while using Fuel Oil for fuel, in each case with
such operation of the Facility to include the operation of each
subsystem of the Facility with each other subsystem. Each PPA Output
Test shall consist of the operation of the Facility or an individual
Unit thereof, as the case may be, as a whole in accordance with the
performance test terms and conditions set forth in Part B of Appendix D
hereto while using Gas for fuel and while using Fuel Oil for fuel, as
applicable, in each case with such operation of the
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Facility or such Unit, as the case may be, to include the operation of
each subsystem of the Facility or such Unit, as the case may be, with
each other subsystem thereof.
6.2.2 Not used.
6.2.3 Notice of Performance Testing or PPA Output
Tests. Contractor shall give Owner (i) Contractor's schedule for
Performance Tests and PPA Output Tests and their projected commencement
dates at least thirty (30) days prior thereto, and (ii) at least
fourteen (14) days' written notice in advance of the date on which
Contractor intends to commence such testing of the Facility under this
Agreement. Within five (5) days of receipt of any such notice of
testing, Owner shall either (a) instruct Contractor to proceed with
such testing, or (b) instruct Contractor to delay such testing if
Mechanical Completion has not been achieved by such date. Contractor
shall not attempt to cause such testing to be performed if Owner gives
notice to Contractor of any aspect of the Project which has not been
completed by Contractor, the completion of which is required for the
safe operation of all or any part of the Facility during a Performance
Test or PPA Output Test in accordance with Applicable Laws, Applicable
Permits, Prudent Utility Practices, the Instruction Manual, the
Electrical Interconnection Requirements and the PPA Operating
Requirements (to the extent applicable to such testing operations). If
Owner delays such performance and output testing because of Owner's
failure to perform any of its obligations under this Agreement or if
the Utility is unable or unwilling to receive the net power output
generated during the test in accordance with Prudent Utility Practices,
then, to the extent that Contractor was reasonably delayed in the
performance of the Services as a direct result thereof, the provisions
of Section 5.9 hereof shall apply.
6.2.4 Disposition of Output. At all times when
Contractor desires to conduct start-up, testing (including Performance
Tests and PPA Output Tests), or other operations of any portion of the
Facility in furtherance of Performance Tests or PPA Output Tests or
repair and maintenance, Owner shall, subject to the terms and
conditions of the Power Purchase Agreement, at no expense to
Contractor, arrange for the
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disposition of the Project's output of electricity (in accordance with
the requirements set forth in Appendix A hereto) in such manner as
Owner shall determine. All output of electricity from the Project and
all proceeds from the sale thereof shall be the property of Owner.
6.2.5 Not Used.
6.2.6 Reconfiguration. After each Performance Test or
PPA Output Test conducted or attempted hereunder, Contractor shall use
its best efforts to leave the Project in, or return the Project to, the
best operating control settings and configurations for the Project for
those periods during which Contractor is not causing any Performance
Tests or PPA Output Tests to be conducted.
6.2.7 Completed Performance Tests and Completed PPA
Output Tests. By the report described in Section 6.3.1, 6.4.1, 6.5.1.1
or 6.6.2 hereof, Contractor may declare any Performance Test or any PPA
Output Test completed in accordance with Section 6.2.1 above to be a
Completed Performance Test or Completed PPA Output Test, respectively,
if and only if during such tests the operation of the Facility complies
with all Applicable Laws, Applicable Permits, the Electrical
Interconnection Requirements, the PPA Operating Requirements (to the
extent applicable to such testing operations) and the Guaranteed
Emissions Limits; provided, however, that unless Owner in its sole
discretion otherwise agrees in writing, the operation of the Facility
shall not constitute a Completed Performance Test or Completed PPA
Output Test, respectively, hereunder if such compliance with Applicable
Laws, Applicable Permits and other required emission standards is based
upon a temporary waiver or variance or other temporary grace period,
rather than based on demonstrated compliance with all such Applicable
Laws, Applicable Permits and other required emission standards that the
Facility will have to be capable of complying with on a long term
basis.
6.3 Provisional Acceptance. Provisional Acceptance shall be
achieved hereunder with respect to the Facility, if the following conditions
have been met:
(a) Contractor has caused a Completed Performance Test in
accordance with Section 6.2 hereof to be
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concluded in which the Facility, while operating on Gas, demonstrates
during such Performance Test an average net electrical output and a net
heat rate (each as measured and corrected to the design operating
conditions, all in accordance with the procedures set forth in Appendix
D hereto) of 95% (or higher) of the Gas-based Electrical Output
Guarantee and 108% (or lower) of the Gas-based Heat Rate Guarantee
(provided that each such level of achievement shall be calculated in
the manner described in Sections 8.1.1 and 8.1.2 hereof, respectively);
provided, however, that if any correction, repair or replacement work
has been required to be made to the Facility pursuant to Article 10
hereof or if Contractor has made any modifications to the Facility, in
either case since the date of such Completed Performance Test, which
work or modifications could reasonably be expected to adversely affect
the performance of the Facility, then Owner may require Contractor to
conduct another Completed Performance Test on the Facility in
accordance with Section 6.2 hereof, which Completed Performance Test
shall be utilized for purposes of this Section 6.3(a);
(b) Contractor has caused a Completed PPA Output Test in
accordance with Section 6.2 hereof to be concluded in which the
Facility demonstrates (i) a level of achievement of 95% (or higher) of
the Gas-based Electrical Output Guarantee, while operating on Gas (with
such level of achievement to be calculated in the manner set forth in
Part B of Appendix D hereto), and (ii) to the Utility's reasonable
satisfaction, the other capabilities required to be so demonstrated
pursuant to Part B of Appendix B hereto; and
(c) The Facility has achieved, and continues to satisfy the
requirements for the achievement of, Mechanical Completion.
6.3.1 Notice and Report of Provisional Acceptance.
When Contractor believes that it has achieved Provisional Acceptance of
the Facility, it shall deliver to Owner a notice thereof (the "Notice
of Provisional Acceptance"). The Notice of Provisional Acceptance shall
contain a report of the results of the Performance Test and the PPA
Output Test and a report of the Services completed, in each case in a
form acceptable to Owner and with sufficient detail to
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enable Owner to determine whether Provisional Acceptance of the
Facility has been achieved.
6.3.2 Achievement of Provisional Acceptance. Owner
shall inspect the Facility and all Services completed by Contractor
with respect thereto, review the results of the Performance Test or the
PPA Output Test and the reports submitted by Contractor and either (a)
deliver to Contractor a certificate stating that the requirements under
Section 6.3 hereof have been satisfied (the "Provisional Acceptance
Certificate"), or (b) if reasonable cause exists for doing so, notify
Contractor in writing that Provisional Acceptance of the Facility has
not been achieved, stating the reasons therefor, provided Owner shall
use all reasonable efforts to deliver such certificate or notice within
five (5) days, but no later than ten (10) days, following receipt of
the Notice of Provisional Acceptance.
6.3.2.1 Re-Submission. In the event Owner determines
that Provisional Acceptance has not been achieved, Contractor shall
promptly take such action or perform such additional Services as will
achieve Provisional Acceptance and, if Contractor believes that
Provisional Acceptance of the Facility has been achieved, shall issue
to Owner another Notice of Provisional Acceptance pursuant to Section
6.3.1 hereof. Unless Interim Acceptance or Final Acceptance of the
Facility shall have previously occurred, such procedure shall be
repeated as necessary until Provisional Acceptance of the Facility has
been achieved; provided, however, that Owner shall respond to
Contractor no later than three (3) days (or such shorter period as may
be practicable with the Owner's use of all reasonable efforts)
following receipt of any re-submitted Notice of Provisional Acceptance.
6.3.2.2 Date of Achievement. Except as set forth
below in this Section 6.3.2.2, the date of achievement of Provisional
Acceptance of the Facility shall be the date on which Owner delivers to
Contractor the Provisional Acceptance Certificate corresponding to the
actual achievement of Provisional Acceptance of the Facility pursuant
to Section 6.3.2 hereof; provided, however, that solely for the
purposes of calculating the Provisional Acceptance Late Completion
Payments as set forth in Section 7.2 hereof, the date of
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achievement of Provisional Acceptance shall be deemed to be the earlier
of (i) the date of Provisional Acceptance as set forth above in this
Section 6.3.2.2 and (ii) the date on which the Facility is deemed to
have achieved its Commercial Operation Date under the Power Purchase
Agreement.
6.3.3 Operation of the Facility. Upon the earliest to
occur of Provisional Acceptance, Interim Acceptance and Final
Acceptance of the Facility, Owner shall take possession and control of
the Facility and shall thereafter be solely responsible for the
operation and maintenance thereof, except as otherwise set forth
herein. Prior to such possession and control by Owner, Contractor
shall, in the course of performing any start-up, commissioning and
testing activities, in consultation with Owner and its operating
personnel, operate the Facility in a manner consistent with Applicable
Laws, Applicable Permits, Prudent Utility Practices, the Electrical
Interconnection Requirements, the PPA Operating Requirements (to the
extent applicable to such start-up, commissioning and testing
activities), the Instruction Manual, and the other requirements set
forth in this Agreement.
6.3.4 Access Following Owner's Taking Possession and
Control of the Facility.
6.3.4.1 Access Following Owner's Taking
Possession and Control of the Facility. After Owner takes
possession and control of the Facility pursuant to Section
6.3.3 hereof, Contractor (i) shall have reasonable access to
the Facility and the reasonable cooperation of Owner so as to
complete the Services (including without limitation making
reasonable repair and replacement alternatives to minimize any
Performance Guarantee Payments under Article 8 hereof if Final
Acceptance of the Facility has not yet occurred) and to
perform its obligations pursuant to Article 10 hereof, and
(ii) to the extent necessary to so complete the Services and
perform its obligations under Article 10 hereof, shall have
reasonable access to plant operating data and records.
Contractor shall complete the Services and shall perform its
obligations under Article 10 with minimal interference to
operations of the Facility, and only to the extent necessary
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and consistent with Owner's rights and obligations under the
Power Purchase Agreement.
6.3.4.2 No Interference With Operations.
Notwithstanding anything to the contrary in this Section
6.3.4, following the first to occur of Provisional Acceptance,
Interim Acceptance and Final Acceptance of the Facility, Owner
shall not be obligated hereunder to shutdown, reduce or
otherwise interfere with its operation of the Facility as a
direct or indirect result of allowing Contractor access
pursuant to this Section 6.3.4. However, Owner will provide
Contractor with reasonable advance notice of any extended
scheduled outages of the Facility and the expected duration
thereof.
6.4 Interim Acceptance. Interim Acceptance shall be achieved
hereunder with respect to the Facility if the following conditions have been met
(it being understood that Contractor may achieve Interim Acceptance one or more
times, provided that on each successive demonstration (i) the level of
achievement of the Gas-based Electrical Output Guarantee under the relevant
Completed Performance Test is not less than the level of achievement thereof
demonstrated at Provisional Acceptance or the immediately preceding Interim
Acceptance, as the case may be, and (ii) the level of achievement of the
Gas-based Heat Rate Guarantee under the relevant Completed Performance Test is
not higher than the level of achievement thereof demonstrated at Provisional
Acceptance or the immediately preceding Interim Acceptance, as the case may be):
(a) Contractor has caused a Completed Performance Test in
accordance with Section 6.2 hereof to be concluded in which the
Facility, while operating on Gas, demonstrates during such Performance
Test an average net electrical output and a net heat rate (each as
measured and corrected to the design operating conditions, all in
accordance with the procedures set forth in Appendix D hereto) of 95%
(or higher) of the Gas-based Electrical Output Guarantee (but in no
event lower than the percentage of the Gas-based Electrical Output
Guarantee demonstrated by the applicable Completed Performance Test and
Completed PPA Output Test at Provisional Acceptance, if applicable) and
104% (or lower) of the Gas-based Heat Rate Guarantee (provided that
each such level of achievement shall be
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calculated in the manner described in Sections 8.1.1 and 8.1.2 hereof,
respectively); provided, however, that if any correction, repair or
replacement work has been required to be made to the Facility pursuant
to Article 10 hereof or pursuant to the Maintenance Agreement or if
Contractor has made any modifications to the Facility, in either case
since the date of such Completed Performance Test, which work or
modifications could reasonably be expected to adversely affect the
performance of the Facility, then Owner may require Contractor to
conduct another Completed Performance Test on the Facility in
accordance with Section 6.2 hereof, which Completed Performance Test
shall be utilized for purposes of this Section 6.4(a);
(b) In the event that neither Provisional Acceptance nor
Interim Acceptance of the Facility has theretofore occurred hereunder,
Contractor has caused a Completed PPA Output Test in accordance with
Section 6.2 hereof to be concluded in which the Facility demonstrates
(i) a level of achievement of 95% (or higher) of the Gas-based
Electrical Output Guarantee, while operating on Gas (with such level of
achievement to be calculated in the manner set forth in Part B of
Appendix D hereto), and (ii) to the Utility's reasonable satisfaction,
the other capabilities required to be so demonstrated pursuant to Part
B of Appendix B hereto;
(c) The Facility has achieved, and continues to satisfy the
requirements for the achievement of, Mechanical Completion; and
(d) Contractor has completed performance of the Services
except for (i) Punch List items and (ii) Services that are required by
the terms of this Agreement to be completed after the achievement of
Interim Acceptance.
6.4.1 Notice and Report of Interim Acceptance. When
Contractor believes that it has achieved Interim Acceptance of the
Facility, it shall deliver to Owner a notice thereof (the "Notice of
Interim Acceptance"). The Notice of Interim Acceptance shall contain a
report of the results of the Performance Test and, if applicable, PPA
Output Test and a report of the Services completed, in each case in a
form acceptable to Owner and with sufficient detail
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to enable Owner to determine whether Interim Acceptance of the Facility
has been achieved.
6.4.2 Achievement of Interim Acceptance. Owner shall,
within ten (10) days (or such shorter periods as may be practicable
with the Owner's use of all reasonable efforts) following receipt of
the Notice of Interim Acceptance, inspect the Facility and all Services
completed by Contractor with respect thereto, review the results of the
Performance Test and, if applicable, PPA Output Test and the reports
submitted by Contractor and either (a) deliver to Contractor a
certificate stating that the requirements under Section 6.4 hereof have
been satisfied (the "Interim Acceptance Certificate"), or (b) if
reasonable cause exists for doing so, notify Contractor in writing that
Interim Acceptance of the Facility has not been achieved, stating the
reasons therefor.
6.4.2.1 Re-Submission. In the event Owner
determines that Interim Acceptance has not been achieved,
Contractor shall promptly take such action or perform such
additional Services as will achieve Interim Acceptance and, if
Contractor believes that Interim Acceptance of the Facility
has been achieved, shall issue to Owner another Notice of
Interim Acceptance pursuant to Section 6.4.1 hereof. Unless
Final Acceptance of the Facility shall have previously
occurred, such procedure shall be repeated as necessary until
Interim Acceptance of the Facility has been achieved;
provided, however, that Owner shall respond to Contractor no
later than three (3) days (or such shorter period as may be
practicable with the Owner's use of all reasonable efforts)
following receipt of any re-submitted Notice of Interim
Acceptance.
6.4.2.2 Date of Achievement. For all
purposes of this Agreement, the date of achievement of Interim
Acceptance of the Facility shall be the date on which Owner
delivers to Contractor the Interim Acceptance Certificate
corresponding to the actual achievement of Interim Acceptance
of the Facility pursuant to Section 6.4.2.
6.5 Final Acceptance. Final Acceptance of the Facility may be
achieved hereunder only pursuant to any of Sections 6.5.1, 6.5.2, 6.5.3 or
6.5.4:
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6.5.1 Demonstration of Final Acceptance. Final
Acceptance of the Facility shall be achieved hereunder if the following
conditions have been met:
(a) Contractor has caused a Completed Performance
Test in accordance with Section 6.2 hereof to be concluded in
which the Facility, while operating separately on Gas and on
Fuel Oil, demonstrates during such Performance Test an average
net electrical output and a net heat rate (each as measured
and corrected to the design operating conditions, all in
accordance with the procedures set forth in Appendix D hereto)
of 100% (or higher) of each of the corresponding Gas-based and
Fuel Oil-based Electrical Output Guarantees and 100% (or
lower) of each of the corresponding Gas-based and Fuel
Oil-based Heat Rate Guarantees (provided that each such level
of achievement shall be calculated in the manner described in
Sections 8.1.1 and 8.1.2 hereof, respectively); provided,
however, that (i) if any correction, repair or replacement
work has been required to be made to the Facility pursuant to
Article 10 hereof or pursuant to the Maintenance Agreement or
if Contractor has made any modifications to the Facility, in
either case since the date of such Completed Performance Test
which work or modifications could reasonably be expected to
adversely affect the performance of the Facility, or (ii) if
such Completed Performance Test was based upon a temporary
waiver or variance or other temporary grace period with
Owner's agreement in accordance with the proviso to Section
6.2.7 hereof, then Owner may require Contractor to conduct
another Completed Performance Test of the Facility in
accordance with Section 6.2 hereof, which Completed
Performance Test shall be utilized for purposes of this
Section 6.5.1(a);
(b) In the event that neither Provisional Acceptance
nor Interim Acceptance of the Facility shall have theretofore
occurred hereunder or in the event that Owner shall have
requested that a new Completed PPA Output Test be conducted in
connection with Final Acceptance of the Facility, Contractor
has caused a Completed PPA Output Test in accordance with
Section 6.2 hereof to be concluded in which the Facility
demonstrates (i) a
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level of achievement of 100% (or higher) of the Gas-based
Electrical Output Guarantee, while operating on Gas (with such
level of achievement to be calculated in the manner set forth
in Part B of Appendix D hereto), and (ii) to the Utility's
reasonable satisfaction, the other capabilities required to be
so demonstrated pursuant to Part B of Appendix B hereto;
(c) the Facility has achieved, and continues to
satisfy the requirements for the achievement of, Mechanical
Completion;
(d) the Reliability Guarantee has been achieved
pursuant to Section 6.6 hereof; and
(e) Contractor has completed performance of the
Services except for (i) Punch List items and (ii) Services
that are required by the terms of this Agreement to be
completed after the achievement of Final Acceptance (such as
Contractor's warranty obligations under Article 10 hereof).
6.5.1.1 Notice and Report of Final
Acceptance. When Contractor believes that it has achieved
Final Acceptance of the Facility, it shall deliver to Owner a
notice thereof (the "Notice of Final Acceptance"). The Notice
of Final Acceptance shall contain a report of the results of
the Performance Test and the PPA Output Test and a report of
the Services completed, in each case in a form acceptable to
Owner and with sufficient detail to enable Owner to determine
whether Final Acceptance of the Facility has been achieved.
6.5.1.2 Achievement of Final Acceptance.
Owner shall inspect the Facility and all Services performed
hereunder with respect thereto, review the results of the
Performance Test and PPA Output Test and the reports submitted
by Contractor and either (a) deliver to Contractor a
certificate stating that the requirements under Section 6.5.1
have been satisfied (the "Final Acceptance Certificate") or
(b) if reasonable cause exists for doing so, notify Contractor
in writing that Final Acceptance has not been
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achieved, stating the reasons therefor, provided Owner shall
use all reasonable efforts to deliver such certificate or
notice within five (5) days, but no later than ten (10) days,
following receipt of the Notice of Final Acceptance.
6.5.1.2.1 Re-Submission. In the event that
Owner determines that Final Acceptance has not been achieved,
Contractor shall promptly take such action or perform such
additional Services as will achieve Final Acceptance and shall
issue to Owner another Notice of Final Acceptance pursuant to
Section 6.5.1.1 hereof. Such procedure shall be repeated as
necessary until Final Acceptance has been achieved or deemed
to have occurred, provided, however, that Owner shall respond
to Contractor no later than three (3) days (or such shorter
period as may be practicable with the Owner's use of all
reasonable efforts) following receipt of any re-submitted
Notice Final Acceptance.
6.5.1.2.2 Date of Achievement. For all
purposes of this Agreement: (i) if neither Provisional
Acceptance nor Interim Acceptance of the Facility has
theretofore occurred hereunder, the date of achievement of
Final Acceptance shall be deemed to be the date on which Owner
delivers to Contractor the Final Acceptance Certificate
corresponding to the actual achievement of Final Performance
Acceptance pursuant to this Section 6.5.1.2; provided,
however, that solely for purposes of calculating the
Provisional Acceptance Late Completion Payments as set forth
in Section 7.2 hereof, the date of achievement of Final
Acceptance shall be deemed to be the earlier of (A) the date
of Final Acceptance as set forth above in this clause (i) and
(B) the date on which the Facility is deemed to have achieved
its Commercial Operation Date under the Power Purchase
Agreement (provided that such date shall in no event be
earlier than the date on which Contractor delivers to Owner
pursuant to Section 6.5.1.1 hereof the Notice of Final
Acceptance corresponding thereto); and (ii) if Provisional
Acceptance or Interim Acceptance of the Facility has
theretofore occurred hereunder, the date of achievement of
Final Performance Acceptance shall
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be deemed to be the later of (A) the date on which Provisional
Acceptance or Interim Acceptance of the Facility occurred
hereunder and (B) the date on which Contractor delivers to
Owner pursuant to Section 6.5.1.1 hereof the Notice of Final
Acceptance corresponding to the actual achievement of Final
Acceptance pursuant to this Section 6.5.1.2.
6.5.2 Owner's Election of Final Acceptance. At any
time, by giving notice to Contractor, Owner in its sole discretion may
elect to effect Final Acceptance, in which case Final Acceptance shall
be deemed effective as of the date of such notice, and Contractor shall
have no liability to Owner for any amounts thereafter arising as
Performance Guarantee Payments for failure of the Facility to achieve
any or all of the Performance Guarantees applicable thereto (it being
understood that in such event Contractor shall not be liable to owner
for any Performance Guarantee payments hereunder other than any Interim
Period rebates that arose under Sections 8.1.1.2 or 8.1.2.2 hereof
prior to such election by Owner).
6.5.3 Contractor's Election of Final Acceptance. (a)
At any time after Provisional Acceptance or Interim Acceptance of the
Facility has been achieved, Contractor may, after exhausting all
reasonable repair and replacement alternatives in order to achieve the
applicable Performance Guarantees for Final Acceptance, and provided
that the Reliability Guarantee shall have been achieved pursuant to
Section 6.6 hereof, give to Owner six days' (but not more than fifteen
(15) days') notice of its intention to elect to declare Final
Acceptance. In such event, provided that (1) the most recent Completed
Performance Test included operation of the Facility on Fuel Oil
demonstrating a level of achievement of 95% (or higher) of the Fuel
Oil-based Electrical Output Guarantee and 108% (or lower) of the Fuel
Oil-based Heat Rate Guarantee in accordance with the performance test
procedures set forth in Appendix D hereto and (2) Contractor has not
been required to perform any correction, repair or replacement work to
the Facility pursuant to Article 10 hereof or pursuant to the
Maintenance Agreement and has not made any modifications to the
Facility, in either case since the date of its most recent Completed
Performance Test,
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which work or modifications could reasonably be expected to adversely
affect the performance of the Facility, and (3) the most recent
Completed Performance Test was not based upon a temporary waiver or
variance or other temporary grace period under Section 6.2.7 hereof,
Contractor may elect to use the results of such Completed Performance
Test for the purpose of determining the Facility's level of achievement
of the Performance Guarantees. If (i) Contractor does not so elect or
(ii) the most recent Completed Performance Test did not include such
demonstration of the Fuel Oil-based Performance Guarantees or (iii) any
such corrections, repairs, replacements or modifications have been made
to the Facility by Contractor after the date of the most recent
Completed Performance Test or (iv) the most recent Completed
Performance Test was based upon a temporary waiver or variance or other
temporary grace period with Owner's agreement in accordance with the
proviso to Section 6.2.7 hereof and, with respect to clause (ii) or
(iii) or (iv), Owner requests that Contractor conduct another Completed
Performance Test, then Contractor shall conduct a final Completed
Performance Test on the Facility in accordance with Section 6.2 hereof
that demonstrates a level of achievement of 95% (or higher) of each of
the corresponding Gas-based and Fuel Oil-based Electrical Output
Guarantees and 108% (or lower) of each of the corresponding Gas-based
and Fuel Oil-based Heat Rate Guarantees in accordance with the
performance test procedures set forth in Appendix D hereto. Contractor
will be obligated to pay all Performance Guarantee Payments as
determined by the final or most recent Completed Performance Test, as
applicable, pursuant to Article 8 hereof, which payment shall be a
condition precedent to the effectiveness of Contractor's election of
Final Acceptance under this Section 6.5.3; provided, that this Section
6.5.3 in no way detracts from or limits any of Contractor's obligations
hereunder to comply and cause the Project to comply with all Applicable
Laws, all Applicable Permits, the Electrical Interconnection
Requirements, the PPA Operating Requirements and the Guaranteed
Emissions Limits, to pay any Provisional Acceptance Late Completion
Payments required hereunder and to perform its other obligations
hereunder following Final Acceptance (including without limitation its
obligation to achieve Project Completion).
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(b) In the event Contractor elects to declare Final
Acceptance under this Section 6.5.3, Final Acceptance shall be deemed
effective as of the last to occur of (i) the date of Owner's receipt of
the declaration and report of the final Completed Performance Test, or,
as applicable, the most recent Completed Performance Test, referred to
in this Section 6.5.3, (ii) the date of Owner's receipt of the
declaration and report of any additional Completed PPA Output Test
required by Owner in connection with Final Acceptance pursuant to
Section 6.5.1(b) hereof, and (iii) the effective date of the
achievement of the Reliability Guarantee pursuant to Section 6.6.4
hereof.
6.5.4 Deemed Final Acceptance. (a) In the event that
on or before the Guaranteed Final Acceptance Date (i) the Facility has
achieved either Provisional Acceptance or Interim Acceptance, (ii) the
most recent Completed Performance Test included operation of the
Facility on Fuel Oil demonstrating a level of achievement of 95% (or
higher) of the Fuel Oil-based Electrical Output Guarantee and 108% (or
lower) of the Fuel Oil-based Heat Rate Guarantee in accordance with the
performance test procedures set forth in Appendix D hereto, (iii) the
most recent Completed Performance Test was not based upon a temporary
waiver or variance or other temporary grace period under Section 6.2.7
hereof and (iv) the Reliability Guarantee has been achieved, then Final
Acceptance of the Facility shall be deemed to occur hereunder on the
Guaranteed Final Acceptance Date; and (b) in the event that (i) on or
before the Guaranteed Final Acceptance Date the Facility has achieved
at least Provisional Acceptance or Interim Acceptance and has achieved
all other requirements for Final Acceptance (including, without
limitation, the achievement of 95% (or higher) of the Fuel Oil-based
Electrical Output Guarantee and 108% (or lower) of the Fuel Oil-based
Heat Rate Guarantee pursuant to a Completed Performance Test that was
not based upon a temporary waiver or variance or other temporary grace
period under Section 6.2.7 hereof) except for the Reliability
Guarantee, and (ii) within ninety (90) days after the Guaranteed Final
Acceptance Date the Reliability Guarantee has been achieved and all
other requirements for Final Acceptance continue to be satisfied at
such time, then Final Acceptance of the Facility shall be deemed to
occur hereunder on the date on which the Reliability Guarantee is
achieved;
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provided, that this Section 6.5.4 in no way detracts from or limits any
of Contractor's obligations hereunder to comply, and to cause the
Project to comply, with all Applicable Laws, all Applicable Permits,
the Electrical Interconnection Requirements, the PPA Operating
Requirements and the Guaranteed Emissions Limits, to pay any
Provisional Acceptance Late Completion Payments and Performance
Guarantee Payments required hereunder and to perform its other
obligations hereunder following such deemed Final Acceptance (including
without limitation its obligation to achieve Project Completion). In
the event that Final Acceptance is deemed to have occurred pursuant to
this Section 6.5.4, except as may be otherwise provided pursuant to the
following sentence, the most recent Completed Performance Test of the
Facility performed before the date of such deemed achievement shall be
used for the purpose of determining the extent to which the Facility
achieved the applicable Performance Guarantees pursuant to Article 8
hereof, and Contractor will be obligated to pay all Performance
Guarantee Payments as determined by such Completed Performance Test,
which payment shall be a condition precedent to the deemed achievement
of Final Acceptance under this Section 6.5.4. If Contractor has been
required to perform any correction, repair or replacement work to the
Facility pursuant to Article 10 hereof or pursuant to the Maintenance
Agreement or has made any modifications to the Facility after the date
of such most recent Completed Performance Test, which work or
modifications could reasonably be expected to adversely affect the
performance of the Facility, then Owner may require Contractor to
conduct another Completed Performance Test of the Facility in
accordance with Section 6.2 hereof, which Completed Performance Test
shall be used for the purpose of determining the extent to which the
Facility achieved the applicable Performance Guarantees pursuant to
Section 8.1 hereof.
6.6 Reliability Run. Contractor guarantees that, in no event
later than the occurrence of Final Acceptance of the Facility hereunder, the
Facility shall have successfully completed the Reliability Run (the "Reliability
Guarantee"). Contractor recognizes and acknowledges that in operating the
Facility during the Reliability Run Owner will operate the Facility in
accordance with the Power Purchase Agreement.
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6.6.1 Reliability Guarantee. The Reliability
Guarantee shall have been achieved hereunder if and only if the
Facility demonstrates an Average Equivalent Availability of not less
than ninety-two percent (92%) while operating over a period of [*] in
accordance with Applicable Laws, Applicable Permits, the Electrical
Interconnection Requirements, the PPA Operating Requirements, the
Guaranteed Emissions Limits, the Instruction Manual and the Power
Purchase Agreement, with Contractor electing which period of forty-five
(45) consecutive days should comprise the Reliability Run.
6.6.2 Notice and Report of Reliability Guarantee
Achievements. When Contractor believes that it has achieved the
Reliability Guarantee, it shall deliver to Owner a written notice
thereof (the "Notice of Reliability Guarantee Achievement"). The Notice
of Reliability Guarantee Achievement shall contain a report of the
results of the Reliability Run in a form acceptable to Owner and with
sufficient detail to enable Owner to determine whether the Reliability
Guarantee has been achieved.
6.6.3 Achievement of the Reliability Guarantee. Owner
shall, within fifteen (15) days following receipt of the Notice of
Reliability Guarantee Achievement, review the results of the
Reliability Run and either (a) deliver to Contractor a certificate
stating that the requirements in Section 6.6.1 hereof have been
satisfied (the "Reliability Certificate"), or (b) if reasonable cause
exists for doing so, notify Contractor in writing that the Reliability
Guarantee has not been achieved, stating in detail the reasons
therefor. In the event that the Reliability Guarantee has not been
achieved as so determined by Owner, Contractor shall consult with Owner
as to the reasons for such failure and thereafter shall take such
action or perform such additional Services as will allow the
Reliability Run to be re-run as promptly as is practicable. Such
procedure shall be repeated as necessary until the Reliability
Guarantee has been achieved.
6.6.4 Date of Achievement. For all purposes of this
Agreement, the date of achievement for the Reliability Guarantee shall
be deemed to be the date on
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which Contractor delivers to Owner the Notice of Reliability Guarantee
Achievement relating to the Reliability Run that Owner subsequently
delivered the Reliability Certificate pursuant to Section 6.6.3 hereof.
6.7 Project Completion. Project Completion shall be achieved
hereunder if and only if:
(a) Final Acceptance of the Facility shall have occurred, and
the Performance Guarantees with respect to the Facility shall have been
achieved (or in lieu of achievement of the Performance Guarantees,
applicable rebates under Article 8 shall have been paid, or Owner shall
have elected Final Acceptance under Section 6.5.2 hereof);
(b) The Reliability Guarantee shall have been achieved;
(c) Contractor shall have demonstrated during the Completed
Performance Test that the operation of the Facility does not exceed the
Guaranteed Emissions Limits;
(d) The requirements for achieving Mechanical Completion of
the Facility shall continue to be met;
(e) The Punch List items shall have been completed in
accordance with this Agreement; and
(f) Contractor shall have performed all of the Services, other
than those Services (such as Contractor's warranty obligations under
Article 10 hereof) which by their nature are intended to be performed
after Project Completion.
6.7.1 Notice and Report of Project Completion. When
Contractor believes that it has achieved Project Completion, it shall
deliver to Owner a written notice thereof (the "Notice of Project
Completion"). The Notice of Project Completion shall contain a report
in a form acceptable to Owner and with sufficient detail to enable
Owner to determine the achievement by Contractor of the Punch List
items and such other information as Owner may require to determine
whether Project Completion has been achieved.
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6.7.2 Achievement of Project Completion. Owner shall,
within fifteen (15) days following receipt of the Notice of Project
Completion, inspect all work, review the report submitted by Contractor
and either (a) deliver to Contractor a certificate stating that the
requirements under clauses (a) through (f) of Section 6.7 have been
satisfied (the "Project Completion Certificate") or (b) if reasonable
cause exists for doing so, notify Contractor in writing that Project
Completion has not been achieved, stating the reasons therefor. In the
event that Project Completion has not been achieved as so determined by
Owner, Contractor shall promptly take such action or perform such
additional work as will achieve Project Completion and shall issue to
Owner another Notice of Project Completion pursuant to Section 6.7.1
hereof. Such procedure shall be repeated as necessary until Project
Completion is achieved. For all purposes of this Agreement, the date of
achievement of Project Completion shall be the date on which Owner
delivers to Contractor the Project Completion Certificate corresponding
to the actual achievement of Project Completion pursuant to this
Section 6.7.2.
6.7.3 Project Completion Deadline. Contractor shall
be obligated hereunder to achieve Project Completion within one hundred
eighty (180) days after Final Acceptance of the Facility (the "Project
Completion Deadline"). If Contractor does not achieve Project
Completion on or before the Project Completion Deadline or if Owner
determines that Contractor is not proceeding with all due diligence to
complete the Services in order to achieve Project Completion by such
deadline, Owner may retain another contractor to complete such work at
Contractor's expense.
ARTICLE 7
Completion Dates
7.1 Guaranteed Completion Dates. Contractor guarantees that
(i) at least one of Provisional Acceptance, Interim Acceptance or Final
Acceptance of the Facility shall be achieved on or before the Guaranteed
Provisional Acceptance Date; and (ii) Final Acceptance of the Facility shall be
achieved on or before the Guaranteed Final Acceptance Date.
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7.2 Guaranteed Completion Date Price Rebates. If none of
Provisional Acceptance, Interim Acceptance and Final Acceptance of the Facility
occurs on or before the Guaranteed Provisional Acceptance Date, Contractor
hereby agrees to pay to Owner, as a rebate and not a penalty and as part of the
consideration for awarding the contract, as follows (subject in each case to the
terms and provisions of clause (c) below, if and to the extent applicable):
(a) for each calendar day by which the first to occur of
Provisional Acceptance, Interim Acceptance and Final Acceptance of the
Facility is later than the Guaranteed Provisional Acceptance Date, an
amount equal to one hundred ten thousand dollars ($110,000) per day
(the "Provisional Acceptance Late Completion Payments");
(b) notwithstanding anything to the contrary in subsection (a)
of this Section 7.2, the aggregate of the Provisional Acceptance Late
Completion Payments required to be made by Contractor pursuant to this
Section 7.2 shall be equal to the lesser of: (i) the aggregate of the
Provisional Acceptance Late Completion Payments due pursuant to the
terms of subsection (a) of this Section 7.2; and (ii) the Delay LD
SubCap set forth in Section 9.1 hereof.
7.2.1 Plan to Achieve Provisional, Interim and Final
Acceptance. If none of Provisional Acceptance, Interim Acceptance and
Final Acceptance of the Facility occurs on or before the date that is
forty (40) days after the Guaranteed Provisional Acceptance Date,
Contractor shall, on such date, submit for approval by Owner and the
Independent Engineer a Plan to accelerate the performance of the
Services as necessary in order to achieve (i) at least one of
Provisional Acceptance, Interim Acceptance and Final Acceptance of the
Facility by the date that is twelve (12) months after the Guaranteed
Provisional Acceptance Date and (ii) Final Acceptance of the Facility
by the Guaranteed Final Acceptance Date. Upon receipt of such a Plan,
Owner and the Independent Engineer shall promptly review the Plan and
provide Contractor with written approval or disapproval of the Plan,
such approval not to be unreasonably withheld. If the Plan is not
approved by Owner and the Independent Engineer, Contractor shall revise
the Plan and resubmit a revised Plan for approval by Owner and the
Independent
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Engineer. This procedure shall be repeated until (a) Provisional
Acceptance, Interim Acceptance or Final Acceptance of the Facility is
achieved or (b) a Plan relating to the Facility is approved by Owner
and the Independent Engineer. For the avoidance of doubt, all costs and
expenses that arise in connection with the development and performance
of any such Plan, including without limitation any overtime or other
acceleration costs and expenses, shall be solely the responsibility of
the Contractor, and Owner shall have no responsibility or liability
with respect thereto.
7.3 Not used.
7.4 Rebates Reasonable; Payment of Rebates; Exclusive Remedy.
7.4.1 Rebates Reasonable. Owner and Contractor hereby
acknowledge and agree that the terms, conditions and amounts fixed
pursuant to Section 7.2 for Provisional Acceptance Late Completion
Payments are reasonable, considering the reduction in value of the
Project and the increased costs that it is anticipated Owner will incur
in the event of Contractor's failure to achieve at least one of
Provisional Acceptance, Interim Acceptance or Final Acceptance of the
Facility by the Guaranteed Provisional Acceptance Date. The amounts of
these rebates are agreed upon and fixed hereunder by the Parties
because of the difficulty of ascertaining on the date hereof the exact
amount of reduction in value of the Project and increased costs that
will be actually incurred by Owner in such event, and the Parties
hereby agree that the rebate amounts specified herein shall be
applicable regardless of the amount of such reduction in value actually
occurring and such increased costs actually incurred by Owner. The
payment of any such rebates hereunder shall not affect Owner's rights
under Articles 15 and 16 hereof or Owner's rights to receive price
rebates pursuant to Article 8 hereof.
7.4.2 Payment of Rebates. Contractor shall pay the
rebates required under Section 7.2 hereof monthly in arrears on the
tenth day of each month, with the last such payment to occur within ten
days of the determination that the first to occur of Provisional
Acceptance, Interim Acceptance or Final Acceptance of the Facility has
been achieved.
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7.4.3 EXCLUSIVE REMEDY. IT IS UNDERSTOOD AND AGREED
THAT THE PROVISIONAL ACCEPTANCE LATE COMPLETION PAYMENTS CONSTITUTE
LIQUIDATED DAMAGES FOR DELAY, AND THAT THE OBLIGATION TO PAY THESE
LIQUIDATED DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY OF OWNER
AGAINST CONTRACTOR AND THE SOLE AND EXCLUSIVE LIABILITY OF CONTRACTOR
TO OWNER FOR CONTRACTOR'S FAILURE TO ACHIEVE AT LEAST ONE OF
PROVISIONAL ACCEPTANCE, INTERIM ACCEPTANCE OR FINAL ACCEPTANCE OF THE
FACILITY ON OR BEFORE THE GUARANTEED PROVISIONAL ACCEPTANCE DATE, AND
CONTRACTOR SHALL NOT BE LIABLE FOR ANY OTHER OR FURTHER LIABILITY IN
RESPECT OF SUCH DELAY ONCE PAYMENT OF THE LIQUIDATED DAMAGES HAS BEEN
MADE OR CONTRACTOR'S LIABILITY REACHES THE LIMITS SET FORTH IN ARTICLE
9 HEREOF, WHETHER BASED IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND
STRICT LIABILITY) OR OTHERWISE; PROVIDED, HOWEVER, THAT SUCH LIQUIDATED
DAMAGES SHALL NOT IN ANY WAY DETRACT FROM OR LIMIT OWNER'S REMEDIES OR
CONTRACTOR'S LIABILITIES IN CONNECTION WITH ANY DEFAULT BY CONTRACTOR
UNDER SECTION 16.1 HEREOF (INCLUDING WITHOUT LIMITATION SECTION
16.1(g), (j) OR (k) HEREOF). NOTWITHSTANDING THE FOREGOING, NOTHING IN
THIS SECTION 7.4.3 IN ANY WAY DETRACTS FROM OR LIMITS ANY OF
CONTRACTOR'S OBLIGATIONS AND LIABILITIES HEREUNDER OTHER THAN WITH
RESPECT TO ANY SUCH DELAY, INCLUDING WITHOUT LIMITATION (A)
CONTRACTOR'S OBLIGATION TO PHYSICALLY COMPLETE THE PROJECT FOR THE
COMPENSATION PROVIDED UNDER THIS AGREEMENT, (B) CONTRACTOR'S OBLIGATION
TO ACHIEVE FINAL ACCEPTANCE OF THE FACILITY AND PROJECT COMPLETION AND
TO CAUSE THE PROJECT TO COMPLY WITH ALL APPLICABLE LAWS, ALL APPLICABLE
PERMITS, THE ELECTRICAL INTERCONNECTION REQUIREMENTS, THE PPA OPERATING
REQUIREMENTS AND THE GUARANTEED EMISSIONS LIMITS, (C) CONTRACTOR'S
LIABILITY FOR WILLFUL BREACH OF ITS OBLIGATIONS HEREUNDER AND (D)
CONTRACTOR'S OBLIGATIONS UNDER ARTICLES 8, 10 AND 13 HEREOF.
7.5 Early Completion Bonus. If the first to occur of
Provisional Acceptance, Interim Acceptance and Final Acceptance of the Facility
occurs prior to the Guaranteed Provisional Acceptance Date (such date, the
"Early Completion Bonus Trigger Date"), Owner hereby agrees to pay to
Contractor, subject to Section 8.3(b) hereof, an amount equal to fifty thousand
dollars ($50,000) per day (the "Early Completion Bonus") for each day by which
the first to occur of Provisional Acceptance, Interim Acceptance and Final
Acceptance precedes the Early Completion Bonus
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Trigger Date; provided, however, that the aggregate amount of any Early
Completion Bonus hereunder shall in no event exceed three million dollars
($3,000,000). Any Early Completion Bonus due to Contractor hereunder shall be
payable to Contractor in accordance with Section 8.3(b) hereof.
7.6 Achievement of Construction Progress Milestones.
Contractor guarantees that each Construction Progress Milestone shall be
achieved on or before the corresponding Construction Progress Milestone Date.
7.6.1 Evidence of Achievement. At Owner's request,
Contractor shall be obligated to demonstrate, in a manner reasonably
satisfactory to Owner and Independent Engineer, that each Construction
Progress Milestone has been achieved on or prior to the applicable
Construction Progress Milestone Date and in accordance with the terms
and conditions of this Agreement.
7.6.2 Plan to Achieve Construction Progress
Milestones. If any Construction Progress Milestone has not been
achieved on or before the corresponding Construction Progress Milestone
Date, Contractor shall promptly prepare and submit to Owner and
Independent Engineer, within thirty (30) days of such Construction
Progress Milestone Date, a Plan to accelerate the performance of the
Services that reasonably demonstrates that Contractor will achieve (i)
at least one of Provisional Acceptance, Interim Acceptance or Final
Acceptance of the Facility by the date that is twelve (12) months after
the Guaranteed Provisional Acceptance Date, and (ii) Final Acceptance
of the Facility by the Guaranteed Final Acceptance Date. (For the
avoidance of doubt, all costs and expenses that arise in connection
with the development and performance of any such Plan, including
without limitation any overtime or other acceleration costs and
expenses, shall be solely the responsibility of Contractor, and Owner
shall have no responsibility or liability with respect thereto). Upon
receipt of such a Plan, Owner or Independent Engineer shall promptly
review the Plan and provide Contractor, within ten (10) days of their
receipt of such Plan, with written notice of either (a) their
acceptance of the Plan, which acceptance will not be unreasonably
withheld (in which event such accepted Plan shall constitute an
"Approved
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Plan") or (b) proposed revisions to or perceived deficiencies with the
Plan. Upon receipt of any such notice from Owner or Independent
Engineer under clause (b) of the preceding sentence, Contractor shall
promptly take one of the following actions: (1) revise the Plan in
accordance with the comments received from Owner and Independent
Engineer pursuant to said clause (b) or in accordance with such other
changes as Constractor reasonably determines are appropriate, and
submit the revised Plan to Owner and Independent Engineer (whereupon
the procedure set forth in the preceding sentence will be repeated); or
(2) if Contractor in good faith believes that its Plan as proposed
reasonably demonstrates that the requirements of clauses (i) and (ii)
will be achieved, submit the issue for dispute resolution pursuant to
Article 21 hereof (in which event if the final decision thereunder
finds that the Contractor's proposed Plan does reasonably demonstrate
the likelihood of such achievements, such Plan shall constitute an
Approved Plan). In the event that (A) such a dispute on a Plan is
submitted to dispute resolution pursuant to clause (2) above and a
final resolution thereof is not obtained thereunder by the date that is
sixty (60) days after the missed Construction Progress Milestone Date,
or (B) an Approved Plan is otherwise not obtained pursuant to the
review and resubmittal procedure set forth above by the date that is
sixty (60) days after the missed Construction Progress Milestone Date,
then either (x) Contractor shall thereafter proceed to perform the
Services in accordance with the Plan as revised in accordance with the
most recent comments submitted by Owner and Independent Engineer
pursuant to clause (b) above (provided that if a final decision
subsequently received under clause (2) above finds that Contractor's
proposed Plan should have been accepted by Owner as an Approved Plan,
Contractor shall be entitled hereunder to a Scope Change to reflect the
additional costs incurred by Contractor solely as a result of
proceeding in accordance with provisions of this clause (x) instead of
its proposed Plan), or (y) Contractor shall be in default hereunder
pursuant to Section 16.1(k) hereof.
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ARTICLE 8
Price Rebate for Failure to
Meet Performance Guarantees
8.1 Performance Guarantees. Contractor guarantees that (i) the
Facility will be capable of achieving all the applicable performance
specifications referred to in this Section 8.1 during a Completed Performance
Test at the earlier to occur of Provisional Acceptance or Interim Acceptance of
the Facility, and (ii) the Facility will be capable of achieving all the
applicable performance specifications referred to in this Section 8.1 during a
Completed Performance Test at Final Acceptance of the Facility (the "Performance
Guarantees"). For the avoidance of doubt and without in any way affecting the
Contractor's other Performance Guarantees hereunder (including, without
limitation, the achievement of the Gas-based Electrical Output Guarantee and the
Gas-based Heat Rate Guarantee set forth in the Warranty Data Sheet attached as
Appendix R hereto), the parties hereby acknowledge and agree that the Contractor
does not guarantee that the Fuel Oil-based Electrical Output Guarantee and the
Fuel Oil-based Heat Rate Guarantee set forth in the Warranty Data Sheet attached
as Appendix R hereto will be achieved at the earlier to occur of Provisional
Acceptance or Interim Acceptance of the Facility, but the Contractor does
guarantee that such Fuel Oil-based Performance Guarantees will be achieved at
Final Acceptance of the Facility. The respective guaranteed values referenced
below are based upon the design operating conditions and other conditions set
forth in Appendix D and R hereto. Contractor agrees to make all reasonable
repair and replacement alternatives in order that the Facility will attain the
Performance Guarantees. Contractor agrees that, if (i) the Facility fails to
achieve the Gas-based Heat Rate Guarantee during the period, if any, commencing
with the earlier to occur of Provisional Acceptance and Interim Acceptance of
the Facility and continuing until Final Acceptance of the Facility, (ii) the
Facility fails to achieve the Gas-based Electrical Output Guarantee during the
period, if any, commencing with the earlier to occur of Provisional Acceptance
and Interim Acceptance and continuing until Final Acceptance of the Facility, or
(iii) the Facility fails to achieve any of the applicable Gas-based and Fuel
Oil-based Performance Guarantees at Final Acceptance of the Facility, as the
case may be, Contractor shall pay Owner as rebates and not as penalties the
amounts calculated in accordance with the
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terms set forth in Sections 8.1.1 and 8.1.2 hereof (the "Performance Guarantee
Payments").
8.1.1 Electrical Output Guarantees, Rebates
and Bonus.
8.1.1.1 Electrical Output Guarantees.
Contractor guarantees to Owner that, with respect to the
Completed Performance Test used pursuant to Section 6.2 hereof
to determine the level of achievement of the Performance
Guarantees at Final Acceptance, and if Provisional Acceptance
or Interim Acceptance occurs prior to Final Acceptance, at the
earlier to occur of Provisional Acceptance or Interim
Acceptance, the average net electrical output of the Facility
during such Completed Performance Test (as such average net
electrical output is measured and corrected to the design
operating conditions, all in accordance with the procedures
set forth in Appendix D hereto) will be greater than or equal
to the applicable electrical output guarantee as set forth in
the Warranty Data Sheet attached as Appendix R hereto (the
"Electrical Output Guarantees"); provided, however, that if
(i) Contractor is required hereunder to also have conducted a
Completed PPA Output Test as a condition to achieving the same
Provisional Acceptance, Interim Acceptance or Final Acceptance
that such Completed Performance Test was conducted in
connection with and (ii) the average net electrical output of
the Facility is different for such two tests, then
notwithstanding anything herein to the contrary the lower
average output shall be utilized for purposes of determining
the level of achievement of the Electrical Output Guarantees
hereunder.
8.1.1.2 Interim Period Rebates. If (1)
Contractor achieves Provisional Acceptance or Interim
Acceptance of the Facility prior to Final Acceptance of the
Facility and (2) the average net electrical output of the
Facility as demonstrated by the Completed Performance Test
used pursuant to Section 6.2 hereof to determine the level of
achievement of the Performance Guarantees at the earlier to
occur of Provisional Acceptance or Interim Acceptance (as
measured and corrected to the design operating conditions, all
in accordance with the procedures set forth in Appendix D
hereto) is less than the Gas-based Electrical Output Guarantee
(provided, however, that if
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the average net electrical output of the Facility demonstrated
during such Completed Performance Test is different than the
average net electrical output demonstrated during the
Completed PPA Output Test conducted in connection with such
Provisional Acceptance or Interim Acceptance, then
notwithstanding anything herein to the contrary the lower
average output shall be utilized for purposes of determining
the level of achievement of the Gas-based Electrical Output
Guarantee), then Contractor shall pay to Owner, as a rebate
and not a penalty and as part of the consideration for
awarding the contract, for each day during the Interim Period,
an amount equal to twenty-two cents ($0.22) per day for each
kilowatt by which such average net electrical output of the
Facility is less than such Gas-based Electrical Output
Guarantee. (For the avoidance of doubt, the average net
electrical output to be used in calculating such rebates shall
be the average net electrical output of the Facility so
demonstrated at the earlier to occur of Provisional Acceptance
and Interim Acceptance of the Facility, and it shall not be
increased for purposes of this Section 8.1.1.2 until Final
Acceptance, even if upon Interim Acceptance a higher average
output is demonstrated.)
8.1.1.3 Final Acceptance Rebates. Upon Final
Acceptance of the Facility, if, with respect to the Completed
Performance Test used pursuant to Section 6.2 hereof to
determine the level of achievement of the Performance
Guarantees at Final Acceptance, (i) the average net electrical
output of the Facility during the Gas-based portion of such
Completed Performance Test (as such average net electrical
output is measured and corrected to design operating
conditions, all in accordance with the procedures set forth in
Appendix D hereto) is less than the Gas-based Electrical
Output Guarantee (provided, however, that if Contractor is
required hereunder to also have conducted a Completed PPA
Output Test as a condition to achieving such Final Acceptance
and the average net electrical output of the Facility
demonstrated during such Completed PPA Output Test is
different than the average net electrical output demonstrated
during the Gas-based portion of such Completed Performance
Test, then notwithstanding anything herein to the contrary the
lower average output shall be utilized for purposes of
determining the level of achievement of the Gas-based
Electrical
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Output Guarantee), then Contractor shall pay to Owner, as a
rebate and not a penalty and as part of the consideration for
awarding the contract, an amount equal to five hundred fifty
dollars ($550) for each kilowatt by which such average net
electrical output of the Facility is less than the Gas-based
Electrical Output Guarantee, and (ii) the average net
electrical output of the Facility during the Fuel Oil-based
portion of such Completed Performance Test (as such average
net electrical output is measured and corrected to design
operating conditions, all in accordance with the procedures
set forth in Appendix D hereto) is less than the Fuel
Oil-based Electrical Output Guarantee, then Contractor shall
pay to Owner, as a rebate and not a penalty and as part of the
consideration for awarding the contract, an amount equal to
thirty dollars ($30) for each kilowatt by which such average
net electrical output of the Facility is less than the Fuel
Oil-based Electrical Output Guarantee.
8.1.1.4 Final Acceptance Bonus. (a) Upon
Final Acceptance of the Facility, if, with respect to the
Completed Performance Test used pursuant to Section 6.2 hereof
to determine the level of achievement of the Performance
Guarantees at Final Acceptance, the average net electrical
output of the Facility during the Gas-fired portion of such
Completed Performance Test (as such average net electrical
output is measured and corrected to design operating
conditions, all in accordance with the procedures set forth in
Appendix D hereto) is greater than the Gas-based Electrical
Output Guarantee (provided, however, that if Contractor is
required hereunder to also have conducted a Completed PPA
Output Test as a condition to achieving such Final Acceptance
and the average net electrical output of the Facility
demonstrated during such Completed PPA Output Test is
different than the average net electrical output demonstrated
during the Gas-based portion of such Completed Performance
Test, then notwithstanding anything herein to the contrary the
lower average output shall be utilized for purposes of
determining the level of achievement of the Gas-based
Electrical Output Guarantee) (any such excess net electrical
output, the "Excess Output"), then Owner shall pay to
Contractor, as a bonus, an amount equal to fifty percent (50%)
of the net incremental revenues received by Owner during the
period of the first three (3) years following the Commercial
Operation Date as a result of
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(i) any power purchase agreement concluded with Utility
whereby Utility purchases such Excess Output, (ii) any
short-term sales of such Excess Output, and (iii) any spot
sales of such Excess Output, in each of the cases (i) through
(iii) above after subtracting all incremental costs and Taxes
associated with such Excess Output; provided, however, that
the aggregate amount of any such bonus shall in no event
exceed two hundred seventy-five dollars ($275) per kilowatt of
Excess Capacity; and provided, further, that Owner's
obligation to pay any such bonus payments shall not be secured
by any lien or security interest on the Facility or any other
assets of Owner (for the avoidance of doubt, the Parties
hereby acknowledge and agree that this proviso shall not
prevent the imposition of any judgment lien or other judicial
lien on the Facility or any other assets of Owner).
(b) Any bonus due to Contractor under this
Section 8.1.1.4 shall be due and payable by Owner at the times
and to the extent of seventy-five percent (75%) of the first
after-tax net cash flow from Facility operations that is
distributable to Owner in accordance with the provisions of
the Financing Documents, with the first such payment to be
made at the same time as the first equity distribution to be
made by Owner under the Financing Documents following Owner's
first receipt of any net incremental revenues for such Excess
Output.
8.1.2 Heat Rate Guarantees, Rebates and
Bonus.
8.1.2.1 Heat Rate Guarantees. Contractor
guarantees to Owner that, with respect to the Completed
Performance Test used pursuant to Section 6.2 hereof to
determine the level of achievement of the Performance
Guarantees at Final Acceptance and, if Provisional Acceptance
and/or Interim Acceptance occurs prior to Final Acceptance, at
such Provisional Acceptance and Interim Acceptance of the
Facility, the net heat rate of the Facility during such
Completed Performance Test, calculated in BTUs per
kilowatt-hour (as measured and corrected to design operating
conditions, all in accordance with the procedures set forth in
such Appendix D hereto), shall be equal to or less than the
applicable heat rate guarantee as set forth in the
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Warranty Data Sheet attached as Appendix R hereto (the "Heat
Rate Guarantees").
8.1.2.2 Interim Period Rebates. (a) If (1)
Contractor achieves Provisional Acceptance and/or Interim
Acceptance of the Facility before Final Acceptance of the
Facility, and (2) the average net heat rate of the Facility as
demonstrated by the Completed Performance Test used pursuant
to Section 6.2 to determine the level of achievement of the
Performance Guarantees at Provisional Acceptance or Interim
Acceptance, as the case may be (as measured and corrected to
the design operating conditions, all in accordance with the
procedures set forth in Appendix D hereto) exceeds the
Gas-based Heat Rate Guarantee, then Contractor shall pay to
Owner, as a rebate and not a penalty and as part of the
consideration for awarding the contract, for each day during
the Interim Period, an amount equal to forty-four dollars
($44) per day for each BTU/Kwh by which such measured net heat
rate of the Facility is greater than the Gas-based Heat Rate
Guarantee. (For the avoidance of doubt, the average net heat
rate to be used in calculating such daily rebate shall be (i)
until the occurrence of Interim Acceptance, the average net
heat rate so demonstrated at Provisional Acceptance, and (ii)
upon the occurrence of Interim Acceptance and continuing until
Final Acceptance, the average net heat rate so demonstrated at
Interim Acceptance (or, if the Facility achieves more than one
Interim Acceptance, at the most recent Interim Acceptance).)
8.1.2.3 Final Acceptance Rebates. Upon Final
Acceptance of the Facility, if, with respect to the Completed
Performance Test used pursuant to Section 6.2 hereof to
determine the level of achievement of the Performance
Guarantees at Final Acceptance, (i) the net heat rate of the
Facility during the Gas-fired portion of such Completed
Performance Test (as measured and corrected to design
operating conditions, all in accordance with the procedures
set forth in Appendix D hereto) exceeds the Gas-based Heat
Rate Guarantee, then Contractor shall pay to Owner, as a
rebate and not a penalty and as part of the consideration for
awarding the contract, an amount equal to one hundred
sixty-two thousand three hundred dollars ($162,300) for each
BTU/kWh by which such measured heat rate is greater than such
Gas-based Heat Rate Guarantee, and (ii) the
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net heat rate of the Facility during the Fuel-Oil-fired
portion of such Completed Performance Test (as measured and
corrected to design operating conditions, all in accordance
with the procedures set forth in Appendix D hereto) exceeds
the Fuel Oil-based Heat Rate Guarantee, then Contractor shall
pay to Owner, as a rebate and not a penalty and as part of the
consideration for awarding the contract, an amount equal to
seventeen thousand dollars ($17,000) for each BTU/kWh by which
such measured heat rate is greater than such Fuel Oil-based
Heat Rate Guarantee.
8.1.2.4 Final Acceptance Bonus. Upon Final
Acceptance of the Facility, if with respect to the Completed
Performance Test used pursuant to Section 6.2 hereof to
determine the level of achievement of the Performance
Guarantees at Final Acceptance, the average net heat rate of
the Facility during the Gas-fired portion of such Completed
Performance Test (as measured and corrected to design
operating conditions, all in accordance with the procedures
set forth in Appendix D hereto) in less than the Gas-based
Heat Rate Guarantee, then, subject to Section 8.3(b) hereof,
Owner shall pay to Contractor, as a bonus, an amount equal to
forty thousand dollars ($40,000) for each BTU/kWh by which
such measured heat rate is less than the Heat Rate Guarantee;
provided, however, that the aggregate amount of any such bonus
shall in no event exceed three million dollars ($3,000,000).
8.2 Rebates Reasonable. Owner and Contractor hereby
acknowledge and agree that the terms, conditions and amounts fixed pursuant to
this Article 8 for Performance Guarantee Payments are reasonable, considering
the actual reduction in the value of the Facility that it is anticipated Owner
will sustain in the event of Contractor's failure to achieve the Performance
Guarantees. The amounts of these rebates are agreed upon and fixed hereunder by
the Parties because of the difficulty of ascertaining on the date hereof the
exact amount of such reduction in value that will actually be sustained by Owner
in the event of any such failure by Contractor, and the Parties hereby agree
that the rebate amounts specified herein shall be applicable regardless of the
amount of such reduction in value actually sustained by Owner. The payment of
any such rebates hereunder shall not affect Owner's rights under Articles 15 and
16 hereof or Owner's rights to receive price rebates pursuant to Article 7
hereof.
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8.2.1 EXCLUSIVE REMEDY. IT IS UNDERSTOOD AND AGREED
THAT THE PERFORMANCE GUARANTEE PAYMENTS CONSTITUTE LIQUIDATED DAMAGES
FOR FAILURE TO ACHIEVE THE PERFORMANCE GUARANTEES, AND THAT THE
OBLIGATION TO PAY THESE LIQUIDATED DAMAGES SHALL BE THE SOLE AND
EXCLUSIVE REMEDY OF OWNER AGAINST CONTRACTOR AND THE SOLE AND EXCLUSIVE
LIABILITY OF CONTRACTOR TO OWNER WITH RESPECT TO ANY FAILURE OF THE
FACILITY, UPON PROVISIONAL ACCEPTANCE OR INTERIM ACCEPTANCE OR FINAL
ACCEPTANCE OF THE FACILITY, TO MEET ANY OF THE APPLICABLE PERFORMANCE
GUARANTEES SPECIFIED IN THIS ARTICLE 8, AND CONTRACTOR SHALL NOT HAVE
ANY OTHER OR FURTHER LIABILITY IN RESPECT OF SUCH PERFORMANCE
SHORTFALLS OR OTHER PERFORMANCE OF THE FACILITY FOLLOWING PROVISIONAL
ACCEPTANCE OR INTERIM ACCEPTANCE OR FINAL ACCEPTANCE, AS THE CASE MAY
BE, ONCE PAYMENT OF THE CORRESPONDING LIQUIDATED DAMAGES HAS BEEN MADE
IN FULL OR CONTRACTOR'S LIABILITY REACHES THE LIMITS SET FORTH IN
ARTICLE 9 HEREOF, WHETHER BASED IN CONTRACT, IN TORT (INCLUDING
NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE. NOTWITHSTANDING THE
FOREGOING, NOTHING IN THIS ARTICLE 8 IN ANY WAY DETRACTS FROM OR LIMITS
ANY OF CONTRACTOR'S OBLIGATIONS AND LIABILITIES HEREUNDER OTHER THAN
THOSE WITH RESPECT TO SUCH PERFORMANCE SHORTFALLS, INCLUDING WITHOUT
LIMITATION (A) CONTRACTOR'S OBLIGATION TO PHYSICALLY COMPLETE THE
PROJECT FOR THE COMPENSATION PROVIDED UNDER THIS AGREEMENT, (B)
CONTRACTOR'S OBLIGATION TO ACHIEVE FINAL ACCEPTANCE OF THE FACILITY AND
PROJECT COMPLETION AND TO CAUSE THE PROJECT TO COMPLY WITH ALL
APPLICABLE LAWS, ALL APPLICABLE PERMITS, THE ELECTRICAL INTERCONNECTION
REQUIREMENTS, THE PPA OPERATING REQUIREMENTS AND THE GUARANTEED
EMISSIONS LIMITS, (C) CONTRACTOR'S LIABILITY FOR WILLFUL BREACH OF ITS
OBLIGATIONS HEREUNDER AND (D) CONTRACTOR'S OBLIGATIONS UNDER ARTICLES
7, 10 AND 13 HEREOF.
8.2.2 Financial Cap on Performance Rebates.
Notwithstanding anything to the contrary in this Article 8, the total
aggregate Performance Guarantee Payments required to be made by
Contractor pursuant to this Article 8 shall be equal to the lesser of
(i) the aggregate total of the Performance Guarantee Payments due
pursuant to the terms of Sections 8.1.1 and 8.1.2, and (ii) the Total
LD SubCap set forth in Section 9.1 hereof less all Provisional
Acceptance Late Completion Payments made by Contractor pursuant to
Article 7 hereof.
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8.3 Payment of Performance Rebates and Bonuses. (a) Subject to
Section 8.2.2, Contractor shall pay to Owner all rebate amounts required under
Sections 8.1.1.3 and 8.1.2.3 hereof within fifteen (15) days after the
determination that the conditions (other than the payment of these rebate
amounts) to Final Acceptance have been achieved. All rebate amounts required
under Sections 8.1.1.2 and 8.1.2.2 hereof shall be due and payable by Contractor
to Owner monthly in arrears on the tenth day of each month, with the last such
payment to occur no later than ten (10) days after the determination that Final
Acceptance has been achieved.
(b) Owner shall pay all bonus amounts due to Contractor
pursuant to Sections 7.5 and 8.1.2.4 hereof (but not the bonus amounts due to
Contractor pursuant to Section 8.1.1.4 hereof, which shall be paid at the times
set forth therein) at the same time (and subject to the same conditions) as its
payment of Retainage pursuant to Section 4.2.4(a) hereof; provided, however,
that in the event and to the extent that Owner does not have sufficient funds
available to make any such bonus payments at such time (after the payment of or,
if applicable, reservation for all Retainage hereunder, all then-current
operating and maintenance expenses, taxes, debt service and required
contributions to reserves under the Financing Documents, and then-current
reasonable working capital requirements), such unpaid bonus payments shall
accrue interest from such otherwise applicable payment date until paid at the
rate set forth in Section 25.1 hereof and shall be payable by Owner at the times
and to the extent of seventy-five percent (75%) of the first after-tax net cash
flow from Facility operations that is distributable to Owner in accordance with
the provisions of the Financing Documents (provided, that such seventy-five
percent amount shall be inclusive of any bonus payments to be made to Contractor
on such date under Section 8.1.1.4 hereof, such that the aggregate bonus
payments to be made by Owner to Contractor on any such distribution date do not
exceed seventy-five percent (75%) of the total after-tax net cash flow available
for distribution to Owner on such date). Owner's obligation to pay any such
deferred bonus payments shall not be secured by any lien or security interest on
the Facility or any other assets of Owner (for the avoidance of doubt, the
Parties hereby acknowledge and agree that this sentence shall not prevent the
imposition of any judgment lien or other judicial lien on the Facility or any
other assets of Owner).
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(c) Unless the full amount of any bonus then due to Contractor
under Sections 8.1.1.4 and 8.3(b) hereof shall have been paid to Contractor, and
except as set forth in the immediately following sentence, no payment in respect
of indebtedness held by any holder of equity (or similar interest in the nature
of equity) in Owner shall be paid (other than the twenty-five percent (25%)
portion of after-tax net cash flow distributable to Owner pursuant to the terms
of Section 8.1.1.4 or 8.3(b) hereof, as the case may be). If the aggregate
principal amount advanced under such indebtedness held by such equity holders,
when added together with the aggregate amount of all other debt advances and
equity contributions made by equity holders in Owner, exceeds ten percent (10%)
of the total capital costs incurred in the development, financing and
construction of the Facility (the amount of such excess being referred to
hereinafter as "Additional Equity Investment"), then the provisions of the
immediately preceding sentence shall not apply to any interest payments made
with respect to that portion of the Additional Equity Investment which does not
exceed five percent (5%) of the total capital costs incurred in the development,
financing and construction of the Facility.
(d) Contractor shall have the right to request an independent
auditor, selected by agreement between the Parties, to verify to Contractor that
Owner's representations in connection with the payment to Contractor of any
bonus payments pursuant to Sections 8.1.1.4 and 8.3(b) hereof are correct. Such
audit shall be conducted on a confidential basis pursuant to a confidentiality
agreement in form and substance acceptable to the Parties. Such independent
auditor's sole task in connection with such an audit shall be to confirm that
Owner's representations to Contractor with regard to the payment of any bonus
payments pursuant to Section 8.1.1.4 or 8.3(b) hereof are correct or to declare
that they are incorrect. In the event that the independent auditor declares that
such representations are incorrect, it shall set forth in general terms the
reasons therefor and shall specify the amount of bonus payments pursuant to
Sections 8.1.1.4 and 8.3(b) hereof that it believes Owner should pay to
Contractor at such time. Owner shall have the right to contest any aspect of
such findings of the independent auditor pursuant to Article 21 hereof, and
Owner shall not be required to make any bonus payment to Contractor pursuant to
Sections 8.1.1.4 and 8.3(b) hereof until resolution of such dispute pursuant to
Article 21 hereof. In the event and during the continuance of such a
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dispute, notwithstanding any provisions hereof or of the Financing Documents to
the contrary, no distribution of after-tax net cash flow of the Facility shall
be made to Owner unless either (i) Owner pays such bonus payments to Contractor
in the amount specified by the independent auditor to be due and payable to
Contractor pursuant to Sections 8.1.1.4 and 8.3(b) hereof at such time, or (ii)
Owner places in escrow pending resolution of such dispute an amount equal to the
amount specified by the independent auditor to be due and payable to Contractor
pursuant to Sections 8.1.1.4 and 8.3(b) hereof at such time. In the event such
independent auditor confirms that Owner's representations with regard to the
payment of any bonus payments pursuant to Sections 8.1.1.4 and 8.3(b) hereof are
correct, Contractor shall bear the costs of such independent auditor; otherwise,
the costs of such independent auditor shall be borne by Owner.
ARTICLE 9
Liability and Damages
9.1 Limitation of Liability. In no event shall Contractor's
liability under this Agreement: (a) for Provisional Acceptance Late Completion
Payments, exceed in the aggregate an amount equal to twenty percent (20%) of the
Contract Price, which amount is referred to as the "Delay LD SubCap"; and (b)
for all Provisional Acceptance Late Completion Payments and Performance
Guarantee Payments, exceed in the aggregate an amount equal to forty-five
percent (45%) of the Contract Price, which amount is referred to as the "Total
LD SubCap". This Section 9.1 shall not be construed to limit Contractor's other
obligations or liabilities arising under or in connection with this Agreement,
including without limitation (i) its obligation to physically complete the
Project for the compensation provided under this Agreement, (ii) its obligation
to achieve Final Acceptance of the Facility and Project Completion and to cause
the Project to comply with all Applicable Laws, all Applicable Permits, the
Electrical Interconnection Requirements, the PPA Operating Requirements and the
Guaranteed Emissions Limits, (iii) its liability for willful breach of this
Agreement, or (iv) its obligations under Articles 10 and 13 hereof.
9.2 Consequential Damages. Notwithstanding anything stated to
the contrary in this Agreement, except as
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otherwise provided in this Section 9.2, neither Party nor any of its
contractors, subcontractors or other agents providing equipment, material or
services for the Project shall be liable under this Agreement, whether based in
contract, in tort (including negligence and strict liability), under warranty or
otherwise, for any indirect, incidental, special or consequential loss or damage
of any type, including but not limited to loss of use or loss of profit or
revenue, and each Party hereby releases the other Party and its contractors,
subcontractors and agents from any such liability; provided, however, that the
provisions of this Section 9.2 shall not limit Owner's obligation to pay to
Contractor the payments specified in Section 4.2.1 or 4.4 hereof, as the case
may be, upon termination of this Agreement, and shall not limit Contractor's
obligations to pay to Owner the Provisional Acceptance Late Completion Payments
and Performance Guarantee Payments pursuant to Articles 7 and 8 hereof.
9.3 Aggregate Liability of Contractor. Notwithstanding
anything to the contrary herein, the total aggregate liability of Contractor and
any of its Subcontractors (including, without limitation, liabilities covered by
the Delay LD SubCap and the Total LD SubCap) to Owner under this Agreement
(including, without limitation, for any breach or termination hereof), shall not
in any event exceed an amount equal to the Contract Price; provided, however,
that such limitation of liability shall not apply to obligations or liabilities
to remove any liens, claims, security interests or other encumbrances pursuant
to Section 10.2 hereof or to make any indemnification payments required under
Article 13 hereof.
ARTICLE 10
Warranties and Guarantees
10.1 Warranties and Guarantees. Contractor warrants and
guarantees that (i) all machinery, equipment, materials, systems, supplies and
other items comprising the Project shall be new and of first-rate quality which
satisfies utility-grade standards and in accordance with Prudent Utility
Practices and the specifications set forth in this Agreement, suitable for use
in generating electric energy and capacity under the climatic and normal
operating conditions described in this Agreement and free from defective
workmanship or materials, (ii) it will perform all of its design, construction,
engineering and other Services
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hereunder in accordance with the provisions of Section 2.3 hereof, (iii) the
Project and its components shall be free from all defects caused by errors or
omissions in engineering and design, as determined by reference to Prudent
Utility Practices, and shall comply with all Applicable Laws, all Applicable
Permits, the Electrical Interconnection Requirements, the PPA Operating
Requirements and the Guaranteed Emissions Limits in accordance with the
provisions of Section 2.4 hereof, and (iv) the completed Project shall perform
its intended functions of generating electric energy and capacity as a complete,
integrated operating system as contemplated in this Agreement, it being
understood that the design of the Facility (including, without limitation, the
Electrical Interconnection Facilities and the Protective Apparatus) is based
upon a design objective of useful life for a period not less than twenty-five
(25) years from the Commercial Operation Date. If Owner notifies Contractor in
writing no later than thirty (30) days after the expiration of the applicable
Warranty Period of any defects or deficiencies in the Project discovered during
the applicable Warranty Period, Contractor promptly (a) shall re-perform any of
the Services at Contractor's expense to correct any errors, omissions, defects
or deficiencies in the Project and (b) in the case of any defective or otherwise
deficient machinery, equipment, materials, systems, supplies or other items
(including without limitation the engineering or design thereof), shall replace
or, at Contractor's option, repair the same at Contractor's expense such that it
is in compliance with the standards warranted and guaranteed in this Section
10.1; provided, that Contractor's obligation to correct such defective or
deficient items (x) shall not extend to any re-performance, repairs or
replacements to the extent required as a result of normal corrosion, erosion,
noise level or wear and tear in the operation of the Project (other than as
caused by the negligence of Contractor or any Subcontractor or the acts or
omissions of Contractor or any Subcontractor that are not in compliance with
Contractor's obligations hereunder) and (y) shall not apply to the extent such
obligation arises directly from Owner's failure to operate and maintain the
Project in accordance with the Instruction Manual and otherwise in accordance
with Prudent Utility Practices. For the avoidance of doubt, the Parties hereby
acknowledge and agree that Owner's use of No. 2 Fuel Oil in operating the
Facility shall be deemed to be in accordance with the Instruction Manual and
Prudent Utility Practices and shall not in any way excuse, release, invalidate
or otherwise reduce Contractor's warranty and
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guarantee obligations under this Article 10. Contractor shall bear all costs and
expenses associated with re-performing or repairing or replacing any Services,
including, without limitation, necessary disassembly, transportation, reassembly
and re-testing, as well as reworking, repair or replacement of such Services,
and disassembly and reassembly of adjacent services when necessary to give
access to the defective or deficient work; provided, however, that in the event
Contractor is required in the performance of its warranty and guarantee
obligations to remove, disassemble or reassemble any equipment, material or
structures that (1) were not supplied by Contractor or its Subcontractors under
this Agreement, (2) were not set forth in the initial design plans for the
Facility and (3) were not subsequently approved by Contractor (provided that
Contractor shall not unreasonably withhold its consent to any such proposed
additions, taking into account the potential implications under this Section
10.1), the reasonable expense of such removal, disassembly and reassembly of
such equipment, materials and structures shall be borne by Owner. Owner shall
notify Contractor as soon as is practicable under the circumstances after any
defective or otherwise deficient work becomes apparent to Owner. [*].
10.2 No Liens or Encumbrances. Contractor warrants and
guarantees that, to the extent Owner has made all payments then due to
Contractor under this Agreement, title to the Facility and all work, materials,
supplies and equipment provided hereunder shall pass to Owner free and
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clear of all liens, claims, security interests and other encumbrances made by,
through or under Contractor or any Subcontractor, other than any Permitted Liens
that are being contested in good faith by Contractor and comply with the
requirements set forth in clause (a) or (b) of the definition thereof. In the
event of any nonconformity to the requirements of this Section, Contractor
promptly (i) shall defend Owner's title to the Facility and such work,
materials, supplies and equipment and (ii) shall remove and discharge any such
lien, claim, security interest or other encumbrance; provided, that if
Contractor is unable to so promptly remove and discharge any such encumbrance,
Contractor may provide to Owner in lieu thereof a bond or other collateral, in
form and substance satisfactory to Owner and the Financing Parties, to fully
indemnify Owner against any loss resulting from such liens, claims, security
interests or other encumbrances.
10.3 LIMITATION OF WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED IN
ARTICLES 7 AND 8 HEREOF (FOR WHICH EXCLUSIVE GUARANTEES AND EXCLUSIVE REMEDIES
ARE CONTAINED THEREIN):
(a) THE WARRANTIES AND GUARANTEES PROVIDED IN THIS ARTICLE 10
ARE EXCLUSIVE AND THERE ARE NO OTHER WARRANTIES OR GUARANTEES OF ANY
KIND, WHETHER STATUTORY, EXPRESS OR IMPLIED (INCLUDING ALL WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ALL
WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OR TRADE), RELATING
TO THE SERVICES; AND
(b) THE REMEDIES SET FORTH IN THIS ARTICLE 10 ARE THE
EXCLUSIVE REMEDIES OF OWNER FOR ANY FAILURE BY CONTRACTOR TO COMPLY
WITH ITS WARRANTY AND GUARANTEE OBLIGATIONS UNDER THIS ARTICLE 10,
WHETHER THE CLAIMS OF OWNER ARE BASED IN CONTRACT, IN TORT (INCLUDING
NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE.
NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 10.3 SHALL IN ANY WAY
RELEASE, DETRACT FROM OR LIMIT CONTRACTOR'S OTHER OBLIGATIONS AND LIABILITIES
HEREUNDER, INCLUDING WITHOUT LIMITATION (i) CONTRACTOR'S OBLIGATION TO
PHYSICALLY COMPLETE THE PROJECT FOR THE COMPENSATION PROVIDED UNDER THIS
AGREEMENT, (ii) CONTRACTOR'S OBLIGATION TO ACHIEVE FINAL ACCEPTANCE OF THE
FACILITY AND PROJECT COMPLETION AND TO CAUSE THE PROJECT TO COMPLY WITH ALL
APPLICABLE LAWS, ALL APPLICABLE PERMITS, THE ELECTRICAL INTERCONNECTION
REQUIREMENTS, THE PPA OPERATING REQUIREMENTS AND THE
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GUARANTEED EMISSIONS LIMITS, (iii) CONTRACTOR'S LIABILITY FOR WILLFUL BREACH OF
ITS OBLIGATIONS HEREUNDER, AND (iv) CONTRACTOR'S OBLIGATIONS UNDER ARTICLE 13
HEREOF, AND OWNER SHALL HAVE ALL REMEDIES PROVIDED HEREUNDER WITH RESPECT
THERETO.
ARTICLE 11
Force Majeure
11.1 Force Majeure Event. As used in this Agreement, a "Force
Majeure Event" shall mean any act or event that prevents the affected Party from
performing its obligations (other than the payment of money) under this
Agreement or complying with any conditions required to be complied with under
this Agreement if such act or event is beyond the reasonable control of and not
the fault of the affected Party and such Party has been unable by the exercise
of due diligence to overcome or mitigate the effects of such act or event. Force
Majeure Events include, but are not limited to, acts of declared or undeclared
war, sabotage, landslides, revolution, terrorism, flood, tidal wave, hurricane,
lightning, earthquake, fire, explosion, civil disturbance, insurrection or riot,
act of God or the public enemy, action (including unreasonable delay or failure
to act) of a court or public authority, or strikes or other labor disputes of a
regional or national character that are not limited to only the employees of
Contractor or its Subcontractors and that are not due to the breach of a labor
contract or Applicable Law by the Party claiming Force Majeure or any of its
Subcontractors. Force Majeure Events do not include (i) strikes, work stoppages
and labor disputes or unrest of any kind that involve only employees of
Contractor or any Subcontractors (except as expressly provided in the foregoing
sentence), (ii) late delivery of materials or equipment (except to the extent
caused by a Force Majeure Event), and (iii) economic hardship.
11.2 Burden of Proof. In the event that the Parties are unable
in good faith to agree that a Force Majeure Event has occurred, the Parties
shall submit the dispute to dispute resolution pursuant to Section 21.1 hereof,
provided that the burden of proof as to whether a Force Majeure Event has
occurred shall be upon the Party claiming a Force Majeure Event.
11.3 Excused Performance. If either Party is rendered wholly
or partly unable to perform its obligations
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under this Agreement because of a Force Majeure Event, that Party will be
excused from whatever performance is affected by the Force Majeure Event to the
extent so affected, provided that:
(a) the non-performing Party gives the other Party prompt
notice (but in any event no later than seven (7) days after the
occurrence) describing the particulars of the occurrence, including an
estimation of its expected duration and probable impact on the
performance of such Party's obligations hereunder, and thereafter
continues to furnish timely regular reports with respect thereto during
the continuation of the Force Majeure Event;
(b) the suspension of performance is of no greater scope and
of no longer duration than is reasonably required by the Force Majeure
Event (it being understood by the Parties that such suspension or
performance may include a reasonable period of time necessary for the
resumption of performance);
(c) the non-performing Party exercises all reasonable efforts
to mitigate or limit damages to the other Party;
(d) the non-performing Party uses its best efforts to continue
to perform its obligations hereunder and to correct or cure the event
or condition excusing performance; and
(e) when the non-performing Party is able to resume
performance of its obligations under this Agreement, that Party shall
give the other Party written notice to that effect and shall promptly
resume performance hereunder.
ARTICLE 12
Scope Changes
12.1 Further Refinement, Corrections and Detailing not Scope
Changes. It is understood and agreed that the Project shall be subject to
further refinement, correction and detailing by the Parties from time to time,
and that Contractor shall receive no additional compensation for such
refinement, correction, or detailing (which shall not constitute Scope Changes)
that would reasonably be
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expected to be a part of the Services (including without limitation any
refinement, correction or detailing in connection with the engineering
development or completion of the design in accordance with Appendix A hereto). A
material addition to, deletion from, suspension of or other modification to the
requirements or provisions of this Agreement pursuant to a Scope Change Order
issued by Owner hereunder shall constitute a Scope Change rather than a
refinement, correction or detailing.
12.2 Scope Changes. Owner, without invalidating this
Agreement, may order Scope Changes to the Services, in which event one or more
of the Contract Price, the Construction Progress Milestone Dates, the Guaranteed
Completion Dates, the Payment and Milestone Schedule, the Project Schedule and
the Performance Guarantees shall be adjusted accordingly, if necessary. All
Scope Changes shall be authorized by a Scope Change Order and only the Owner or
the Owner's Representative may issue Scope Change Orders. Notwithstanding the
above, Contractor shall not be required to perform a Scope Change which is
impossible to comply with as a practical matter or which will have a material
adverse effect on the technical soundness, or the full, safe and reliable
operation of the Facility in accordance with Applicable Laws, Applicable Permits
and Prudent Utility Practices.
12.3 Procedure for Scope Changes. As soon as Contractor
becomes aware of any circumstances which Contractor has reason to believe may
necessitate a Scope Change, Contractor shall issue to Owner a Scope Change Order
Notice at Contractor's expense. All Scope Change Order Notices shall include
documentation sufficient to enable Owner to determine (a) the factors
necessitating a Scope Change; (b) the impact which the Scope Change is likely to
have on the Contract Price and the Payment and Milestone Schedule; (c) the
impact which the Scope Change is likely to have on the Project Schedule, the
Construction Progress Milestone Dates and the Guaranteed Completion Dates; (d)
the impact which the Scope Change is likely to have on the Performance
Guarantees; and (e) such other information which Owner may reasonably request in
connection with such Scope Change in order to determine the above factors and
impacts (including, with respect to Scope Changes involving price changes under
the provisions of Section 12.8(c) or (d), material and labor cost information);
provided, that if such information is proprietary to Contractor, then Contractor
shall, at Owner's option, divulge such information on a
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confidential basis to an independent auditor selected by agreement between the
Parties in order to verify to Owner that the information and documentation
provided by Contractor regarding the impact of the Scope Change is correct,
rather than divulging such information to Owner. If such independent auditor
confirms such information and documentation to be correct, Owner shall bear the
costs of such independent auditor; otherwise, the costs of such independent
auditor shall be borne by Contractor.
If Owner desires to make a Scope Change, in response to a
Scope Change Order Notice or otherwise, it shall submit a Scope Change Order
Request to Contractor. Contractor shall promptly review the Scope Change Order
Request and notify Owner in writing of the options for implementing the proposed
Scope Change (including, if possible, any option that does not involve an
extension of time) and the effect, if any, each such option would have on the
Contract Price, the Guaranteed Completion Dates, the Construction Progress
Milestone Dates, the Payment and Milestone Schedule, the Project Schedule and
the Performance Guarantees. Contractor shall provide cost, schedule and
performance level guarantee impacts to Owner for Scope Changes proposed by
Owner, including furnishing to Owner a statement, setting forth in detail, a
breakdown by trades and work classifications. Owner may, but shall not be
obligated to, issue a Scope Change Order covering such proposed Scope Change, in
which event the contents of Contractor's notice described in this Section 12.3
shall be binding on Owner (except as otherwise provided in the following
sentence) and Contractor. In the event Owner disagrees with Contractor's
statement of the effect of such Scope Change on the Contract Price, the
Guaranteed Completion Dates, the Construction Progress Milestone Dates, the
Project Schedule or the Performance Guarantees, Owner may proceed with issuance
of the Scope Change Order, in which case Contractor shall proceed in accordance
therewith, and the dispute shall be resolved as provided in Article 21 hereof.
12.4 Scope Changes Due to Contractor Error. Notwithstanding
anything in this Article 12 to the contrary, no Scope Change Order shall be
issued and no adjustment of the Contract Price, the Guaranteed Completion Dates,
the Construction Progress Milestone Dates, the Payment and Milestone Schedule,
the Project Schedule or the Performance Guarantees shall be made in connection
with any correction of errors, omissions, deficiencies, or improper or defective
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work on the part of Contractor or any Subcontractors in the performance of the
Services.
12.5 Scope Changes Due to Changes in Law and Permits. To the
extent, if any, that (i) any changes in Applicable Laws or Applicable Permits
occur after the date of this Agreement and such changes necessitate a Scope
Change or (ii) any Applicable Laws or Applicable Permits as currently in effect,
or as a result of a change in such Applicable Laws or Applicable Permits,
require compliance with standards for emission by the Facility of gaseous,
particulate, solid, liquid or noise pollutants that are in addition to or more
stringent than the Guaranteed Emissions Limits set forth in the Warranty Data
Sheet attached as Appendix R hereto, then such changes or such additional or
more stringent standards for emissions shall be treated as a Scope Change under
Section 12.2 hereof; provided, however, that (a) this Section 12.5 shall not
apply to (1) any change in Applicable Laws relating to Contractor Taxes or (2)
any change in Applicable Permits resulting directly or indirectly from the acts
or omissions of Contractor or any Subcontractor that are wrongful or otherwise
not in compliance with the Contractor's obligations hereunder, and (b)
Contractor shall not be required to perform a Scope Change pursuant to this
Section 12.5 which is impossible to comply with as a practical matter.
12.6 Familiarity with Conditions and Documentation.
12.6.1 Familiarity with Conditions. Except as
otherwise provided in Sections 20.2 and 20.3 hereof, Contractor accepts
the risk of mistake or error relating to all matters within the scope
of Section 20.1 hereof and acknowledges and agrees that no increase or
adjustment in the Contract Price, the Guaranteed Completion Dates, the
Construction Progress Milestone Dates, the Payment and Milestone
Schedule, the Project Schedule, the Performance Guarantees or any other
provision which may be affected thereby will be authorized by Owner as
a result of any such mistake or error.
12.6.2 Familiarity with Documentation. Contractor has
reviewed all documentation supplied to it by Owner prior to the date of
this Agreement and confirms that it will be able to perform the
Services in compliance with such documentation, including
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without limitation the Power Purchase Agreement and all documentation
attached as an Appendix hereto. Contractor acknowledges and agrees that
any difficulty or extra cost it may encounter in performing the
Services in compliance with such documentation will not entitle
Contractor to any increase or adjustment in the Contract Price, the
Guaranteed Completion Dates, the Construction Progress Milestone Dates,
the Payment and Milestone Schedule, the Project Schedule, the
Performance Guarantees or any other provision which may be affected
thereby.
12.7 Effect of Force Majeure Event. In the event and to the
extent that any Force Majeure Events affect Contractor's ability to meet the
Guaranteed Completion Dates, or the Construction Progress Milestone Dates, an
equitable adjustment in one or more of such dates, the Payment and Milestone
Schedule and the Project Schedule shall be made by agreement of Owner and
Contractor or otherwise pursuant to Article 21 hereof. No adjustment to the
Performance Guarantees and, except as otherwise expressly set forth below in
this Section 12.7, the Contract Price shall be made as a result of a Force
Majeure Event. If Contractor is delayed in the performance of the Services by a
Force Majeure Event, then:
(a) to the extent that the delay(s) are, in the aggregate, six
months or less, Contractor shall absorb all of its costs and expenses
resulting from said delay(s); and
(b) to the extent that the delay(s) are, in the aggregate,
more than six (6) months, Contractor shall be reimbursed by Owner for
those incremental costs and expenses resulting from said delay(s) which
are incurred by Contractor after said six month period.
12.8 Price Change. An increase or decrease in Contract Price,
if any, resulting from a Scope Change requested by Owner or made pursuant to
this Article 12 shall be determined, upon the mutual agreement of the Parties,
as follows:
(a) By lump sum payment, in an amount proposed by Contractor
(properly itemized and supported by sufficient substantiating data to
permit evaluation) and accepted by Owner; or
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(b) By unit pricing; or
(c) By cost and percentage or by cost and fixed fee; or
(d) If none of the methods set forth in Section 12.8(a),
12.8(b) or 12.8(c) hereof are agreed upon after good faith negotiation
by the Parties, Contractor shall provide Owner with such purchase
orders, invoices, subcontractor quotes and other documents and records
as may enable Owner to verify, to its reasonable satisfaction, the
costs or savings reasonably incurred by Contractor in effecting such
Scope Change. All equipment, materials, labor, equipment rental and
other items required as a result of such Scope Change shall be
purchased by Contractor at competitive market prices. Owner shall, upon
verifying Contractor's costs or savings associated with such Scope
Change, adjust the Contract Price by the amount thereof and appropriate
adjustments shall be made to the corresponding Scheduled Payments.
12.9 Continued Performance Pending Resolution of Disputes.
Notwithstanding a dispute regarding the amount of any increase or decrease in
Contractor's costs with respect to a Scope Change, Contractor shall proceed with
the performance of such Scope Change promptly following Owner's execution of the
corresponding Scope Change Order.
12.10 Documentation. All claims by Contractor for adjustments
to one or more of the Contract Price, the Guaranteed Completion Dates, the
Construction Progress Milestone Dates, the Payment and Milestone Schedule, the
Project Schedule and the Performance Guarantees as a result of Scope Changes
under this Article 12 shall be supported by such documentation as is reasonably
sufficient for Owner to determine the accuracy thereof, including, as
applicable, invoices from Subcontractors and Contractor's man-hour breakdowns to
the extent such invoices and man-hour breakdowns are relevant to the method
utilized by the Parties pursuant to Section 12.8 hereof for adjusting the
Contract Price.
12.11 Qualitative Engineering. If Contractor identifies an
opportunity for a cost beneficial non-necessary improvement of the Facility,
Contractor may issue a Scope Change Notice to notify Owner of the existence of
such opportunity. After evaluating the information
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presented in the Scope Change Notice issued by Contractor pursuant to this
Section 12.11 in good faith, Owner may submit a Scope Change Order Request.
Contractor shall review such Scope Change Order Request and notify Owner in
writing of the options for implementing the proposed Scope Change, the effect of
such Scope Change and any such other information as Owner may request; provided,
that Contractor shall be reimbursed by Owner for all reasonable costs incurred
by Contractor in responding to any Scope Change Order Request submitted by Owner
pursuant to this Section 12.11. Owner may, but shall not be obligated to, issue
a Scope Change Order covering such proposed Scope Change in the manner provided
by Section 12.3 hereof.
12.12 Hazardous Materials. In the event that Hazardous
Materials are discovered to exist at the Facility Site, Contractor shall be
responsible for responding to and handling any such condition in compliance with
the requirements of all Applicable Laws and Applicable Permits and Sections
2.1.7 and 2.1.15 hereof; provided, however, that if such Hazardous Materials
were not identified in an environmental site assessment report which Owner
elects to deliver to Contractor prior to the Commencement Date pursuant to
Section 20.3 hereof and were not brought onto the Facility Site by Contractor or
any of its Subcontractors or by any Person acting on behalf of, or under the
direction or supervision of, Contractor or any of its Subcontractors, then (a)
Contractor shall be entitled to a Scope Change hereunder for such response and
handling, except that Contractor shall not be entitled to such a Scope Change
(i) in the event that Contractor fails to notify Owner promptly upon discovery
of the presence of any such Hazardous Materials at the Facility Site or (ii) to
the extent that Contractor or any of its Subcontractors has negligently
aggravated the condition resulting from the presence of such Hazardous Materials
at the Facility Site, and (b) Contractor shall have the right, upon written
notice delivered to Owner within thirty (30) days (or such shorter period of
time as is practicable with the exercise of all reasonable efforts) of such
discovery, to refuse to accept responsibility for responding to and handling
such Hazardous Materials if Contractor determines, in its reasonable judgment,
that the potential liabilities and difficulties associated with such Hazardous
Materials are so significant as to materially and adversely change the risks to
Contractor in performing the Services hereunder. Notwithstanding the foregoing,
Owner shall retain the right to contract directly with a third party contractor
to
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perform any such work relating to such Hazardous Materials instead of the
Contractor hereunder.
ARTICLE 13
Indemnification
13.1 General Indemnification.
13.1.1 Contractor Indemnity. Contractor shall fully
indemnify, save harmless and defend Owner, its parents, subsidiaries
and other affiliates, the Financing Parties, and the directors,
officers, agents, employees, successors and assigns of each of them
(the "Owner Indemnified Parties"), from and against any and all losses,
costs, damages, injuries, liabilities, claims, demands, penalties,
interest and causes of action, including without limitation reasonable
attorney's fees (collectively, the "Damages"), directly or indirectly
arising out of, resulting from or related to any third party claims
associated with this Agreement (including without limitation any such
claims for damage to or destruction of property of, or death of or
bodily injury to, Persons (whether they are employees of the Owner
Indemnified Parties, Contractor or any Subcontractor, or are Persons
unaffiliated with the Project)) to the extent caused or contributed to
by Contractor's or any Subcontractor's negligence or intentionally
wrongful act in the performance of the Services or otherwise relating
to this Agreement or the Project, whether or not the Owner Indemnified
Parties are contributorily negligent; provided, that the foregoing
obligation shall not apply (i) to the extent the Damages are caused by
or contributed to by the negligence or intentionally wrongful act of
the Owner Indemnified Parties or (ii) with respect to Damages resulting
from Hazardous Materials, as Contractor's indemnity obligations with
respect thereto are solely as provided in Section 13.4 hereof.
13.2 Additional Indemnification.
13.2.1 Contractor Indemnity. Without limiting the
generality of Section 13.1.1 hereof, Contractor shall fully indemnify,
save harmless and defend the Owner Indemnified Parties from and against
any and all Damages in favor of any governmental authority or other
third party to the extent caused by
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(a) failure of Contractor or any Subcontractor to comply with
Applicable Laws and Applicable Permits as required by this Agreement,
(b) failure of Contractor or any Subcontractor to properly administer
and pay the Taxes as required hereunder (including without limitation
the Contractor Taxes) or any other taxes, fees and contributions
required to be paid by Contractor or any Subcontractor under Applicable
Laws, provided that Contractor will not indemnify the Owner Indemnified
Parties for any penalties on Project Taxes to the extent that
Contractor or its Subcontractors become liable therefor as a result of
Owner's failure to promptly pay any amounts when due, and such amounts
should have been rightfully paid when due, or (c) nonpayment of amounts
due as a result of furnishing materials or services to Contractor or
any Subcontractor which are payable by Contractor or any Subcontractor
in connection with the Services; provided, that the indemnification
under clause (a) hereof shall not cover Damages to the extent such
Damages are caused by Owner's operation of the Facility following the
first to occur of Provisional Acceptance, Interim Acceptance and Final
Acceptance of the Facility hereunder (unless the operational
performance of the Facility shall have been adversely affected by
Contractor's performance of the Services hereunder following
Provisional Acceptance, Interim Acceptance or Final Acceptance of the
Facility).
13.3 Patent and Copyright Indemnification. Without limiting
the generality of Section 13.1.1 hereof, Contractor shall fully indemnify, save
harmless and defend the Owner Indemnified Parties from and against any and all
Damages which the Owner Indemnified Parties may hereafter suffer or pay by
reason of any claims or suits arising out of claims of infringement of any
domestic or foreign patent rights, copyrights or other intellectual property,
proprietary or confidentiality rights with respect to materials and information
used by Contractor or any Subcontractor in performing the Services or in any way
incorporated in or related to the Project. If, in any such suit or claim, a
temporary restraining order or preliminary injunction is granted, Contractor
shall make every reasonable effort, by giving a satisfactory bond or otherwise,
to secure the suspension of the injunction or restraining order. If, in any such
suit or claim, the Project, or any part, combination or process thereof, is held
to constitute an infringement and its use is
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permanently enjoined, Contractor shall promptly make every reasonable effort to
secure for Owner a license, at no cost to Owner, authorizing continued use of
the infringing work. If Contractor is unable to secure such license within a
reasonable time, Contractor shall, at its own expense and without impairing
performance requirements, either replace the affected work, or part, combination
or process thereof with non-infringing components or parts or modify the same so
that they become non-infringing. This Section 13.3 is an exclusive statement of
all the duties of the Parties and of all the remedies of Owner relating to
Patents, and direct or contributory Patent, copyright or other intellectual
property, proprietary or confidentiality rights infringement.
13.4 Hazardous Materials Liability. (a) Owner shall fully
indemnify, save harmless and defend Contractor, its parent, subsidiaries and
other affiliates, and the directors, officers, agents, employees, successors and
assigns of each of them (the "Contractor Indemnified Parties") from and against
all Damages resulting from the presence of any Hazardous Material on, or the
release of any Hazardous Material on or from, the Facility Site, other than (i)
any Hazardous Material that may be described in an environmental site
assessment, if any, that Owner delivers to Contractor prior to the Commencement
Date pursuant to Section 20.3 hereof and for which Contractor has not refused to
accept responsibility pursuant to Section 12.12 hereof, and (ii) any Hazardous
Materials brought onto the Facility Site by any Contractor Responsible Party
(but excluding any Hazardous Materials that are contained, consistent with
Prudent Utility Practices and Appendix A hereto, in part of the Services
accepted by Owner at the time of Provisional Acceptance, Interim Acceptance or
Final Acceptance of the Facility and had been expressly identified in a Material
Safety Data Sheet delivered to Owner by Contractor prior to Owner's acceptance
thereof ("Owner Accepted Hazardous Materials")), except to the extent that an
Owner Responsible Party has negligently aggravated the condition resulting from
the presence of the Hazardous Materials covered by this clause (ii); provided,
however, that Owner shall not be obligated to provide such indemnification (1)
with respect to any Hazardous Materials that Contractor fails to notify Owner
promptly upon discovery of the presence thereof on, or the release thereof on or
from, the Facility Site, as required pursuant to Section 2.1.15 hereof and such
failure has a material adverse effect on Owner or the Project, or (2) to the
extent that any Contractor Responsible Party has
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negligently aggravated the condition resulting from the presence of any
Hazardous Material on, or the release of any Hazardous Material on or from, the
Facility Site.
(b) Contractor shall fully indemnify, save harmless and defend
the Owner Indemnified Parties against all Damages resulting from (i) any
Hazardous Material which has been brought onto the Facility Site by any
Contractor Responsible Party (other than any Owner Accepted Hazardous
Materials), except to the extent that an Owner Responsible Party has negligently
aggravated the condition resulting from the presence of the Hazardous Materials
covered by this clause (i), (ii) Contractor's failure to notify Owner promptly
of the presence of any Hazardous Material on, or the release of any Hazardous
Material on or from, the Facility Site, as required pursuant to Section 2.1.15
hereof and such failure has a material adverse effect on Owner or the Project,
or (iii) to the extent that any Contractor Responsible Party has negligently
aggravated the condition resulting from the presence of any Hazardous Material
on, or the release of any Hazardous Material on or from, the Facility Site.
13.5 Notice and Legal Defense. Promptly after receipt by a
Party of any claim or notice of the commencement of any action, administrative
or legal proceeding, or investigation as to which the indemnity provided for in
Section 13.1, 13.2, 13.3 or 13.4 hereof may apply, such Party shall notify the
other Party in writing of such fact. Contractor or Owner, as the case may be,
shall assume on behalf of the indemnified party and conduct with due diligence
and in good faith the defense thereof with counsel reasonably satisfactory to
the indemnified party; provided, that the indemnified party shall have the right
to be represented therein by advisory counsel of its own selection and at its
own expense; and provided further, that if the defendants in any such action
include both Contractor or Owner and any indemnified party and the indemnified
party shall have reasonably concluded that there may be legal defenses available
to it which are different from or additional to, or inconsistent with, those
available to Contractor or Owner, the indemnified party shall have the right to
select separate counsel to participate in the defense of such action on its own
behalf at the expense of the indemnified party.
13.6 Failure to Defend Action. If any claim, action,
proceeding or investigation arises as to which the
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indemnity provided for in Section 13.1, 13.2, 13.3 or 13.4 hereof may apply, and
Contractor or Owner, as the case may be, fails to assume the defense of such
claim, action, proceeding or investigation, then the indemnified party may at
the expense of Contractor or Owner, as the case may be, contest (or, with the
prior written consent of Contractor or Owner, settle) such claim.
13.7 Survival. The provisions of this Article 13 shall survive
Project Completion and the termination of this Agreement.
ARTICLE 14
Insurance
14.1 General. Except as otherwise expressly provided in this
Article 14, Contractor shall provide and maintain the types and amounts of
insurance set forth in this Article 14 at all times while Contractor or any
Subcontractor is performing the Services. The insurance carriers providing
insurance as described in this Article 14 shall have an A.M. Best Financial
Rating of A-VII or a comparable international rating from an international
rating institute, or if unrated, then such carriers shall be acceptable to both
Parties, which acceptance shall not be unreasonably withheld. The capitalized
terms used in this Article 14 and not otherwise defined in this Agreement shall
have the meaning generally ascribed to such terms in the commercial insurance
industry in the United States.
14.2 Worker's Compensation Insurance. Contractor shall
maintain Worker's Compensation Insurance and Employers' Liability Insurance
(including occupational disease) to cover statutory benefits and limits of the
Worker's Compensation laws of any applicable jurisdiction in which any work is
to be performed hereunder, and with such Employers' Liability Insurance to have
a minimum coverage limit of one million dollars ($1,000,000) per occurrence.
14.3 Commercial General Liability Insurance. Contractor shall
maintain Commercial General Liability Insurance for Hazards of (a) Construction
Operation, (b) Elevators and Escalators, (c) Subcontractors and Independent
Contractors, (d) Products and Completed Operations (with Completed Operations
coverage to remain in force for two years following Final Acceptance), (e)
Explosion Collapse and Underground Hazards, (f) Contractual Liability,
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(g) Personal Injury Liability (with the standard contractual and employee
exclusions deleted) and (h) Sudden and Accidental Pollution. The insurance
required by this Section 14.3 shall have the following limits of liability:
Bodily Injury and Property Damage Liability
$1,000,000 Combined Single Limit per occurrence and $2,000,000 annual
aggregate issued on an occurrence basis with a per project limit of
liability.
14.4 Automobile Liability Insurance. $1,000,000 Combined
Single Limit per occurrence. Each Party shall obtain its own Business Automobile
liability insurance to cover all owned, hired and non-owned vehicles in
connection with construction, services, and/or other associated work hereunder.
14.5 Commercial Umbrella and/or Excess Insurance. Commencing
on or prior to the earlier of (i) the date that Contractor commences shipment of
any equipment to be provided hereunder and (ii) the Financial Closing Date,
Contractor shall maintain Commercial Umbrella and/or Excess Insurance Policies
for Bodily Injury and Property Damage Liability with a limit of $24,000,000 per
occurrence and annual aggregate, with a per project aggregate limit, over
Primary Employer's Liability, Commercial General Liability, and Business
Automobile Liability Limits.
14.6 Severability of Interest. All insurance carried in
accordance with Section 14.3, 14.4 and/or 14.5 hereof shall be endorsed to
provide that, inasmuch as the policy is written to cover more than one insured,
all terms, conditions, insuring agreements and endorsements, with the exception
of limits of liability, shall operate in the same manner as if there were a
separate policy covering each insured.
14.7 Builder's Risk Insurance. Contractor shall provide on or
prior to the earlier of (i) the commencement of performance of the Services at
the Facility Site and (ii) the Financial Closing Date, and shall maintain until
the first to occur of Provisional Acceptance, Interim Acceptance and Final
Acceptance of the Facility, for the benefit of Owner, the Financing Parties,
Contractor and all Subcontractors, "All-Risk" Builder's Risk Insurance in form
reasonably acceptable to Owner, Contractor, and the Financing Parties covering
direct physical loss or damage to
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the Facility for perils including but not limited to fire, lightning, hail,
explosion, riot and civil commotion, vandalism and malicious mischief, theft,
damage from aircraft (and other falling objects), inland transporation,
vehicles, smoke, fire, flood, earthquake, landslide, Tsunami, windstorm,
collapse, start-up and testing of the Facility and to any and all materials,
supplies or equipment comprising the Facility or intended for installation into
the Facility and covering all such materials, supplies or equipment during
temporary storage and transit to or from the Facility Site during erection and
otherwise. Insurance maintained shall be written on a full replacement cost
basis. This insurance shall include "Delay In Start-up" Coverage equal to the
defined Business Interruption amount (including construction financing costs and
fixed operating and maintenance costs) equal to the initial eighteen (18) months
of commercial operation, with such defined amount to be specified by Owner no
later than thirty (30) days prior to the Commencement Date. This insurance shall
also include Maintenance Coverage for two (2) years following the first to occur
of Provisional Acceptance, Interim Acceptance and Final Acceptance of the
Facility. Policy Deductible amounts shall be based on a "per occurrence" basis
not to exceed $500,000 for Equipment Start-up Testing, $250,000 for earthquake,
$250,000 for windstorm, $250,000 for flood, and $250,000 for all other property
damage losses, [*]. The "Delay in Start-up" Deductible shall also be based on a
"per occurrence" basis with Waiting Period Deductibles not to exceed thirty (30)
days, except that such period may be up to (i) forty-five (45) days with respect
to the 501 G turbine generator and (ii) sixty (60) days with respect to the 501
G turbine generator in the event its Row 1 and Row 2 blades and vanes or its
steam cooled transition pieces have sustained damage.
14.8 Ocean Marine Cargo Insurance. Contractor shall provide on
or prior to the commencement of shipment of any equipment to be provided
hereunder and shall maintain until the first to occur of Provisional Acceptance,
Interim Acceptance and Final Acceptance of the Facility Ocean Marine Cargo
Insurance covering any and all materials and equipment while they are in transit
to the Facility Site by wet marine bottoms or by air transportation and/or
connecting conveyances, with a policy limit not less than the value of the
largest single cargo shipment. Such insurance shall
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include Project "Delay in Start-up" coverage equal to the defined Business
Interruption amount (including construction financing costs and fixed operating
and maintenance costs) equal to the initial eighteen (18) months of commercial
operation, with the same deductible and coverage amounts as are applicable to
the "Delay in Start-up" insurance under Section 14.7 hereof (unless Owner in its
discretion directs Contractor to obtain higher deductibles and/or lower coverage
amounts under this Section 14.8).
14.9 Subcontractor Insurance. Before permitting any of its
Subcontractors to perform any Services at the Facility Site, Contractor shall
obtain a certificate of insurance from each such Subcontractor evidencing that
such Subcontractor has obtained insurance in such amounts and against such risks
as is consistent with Contractor's customary practices for such types of
subcontracts for projects of similar type and capacity to the Project, provided
that such insurance shall at least be in such amounts and against such risks as
is customarily carried by persons engaged in similar businesses in the same
geographic area.
14.10 Waiver of Subrogation. All insurance policies supplied
by Contractor shall include a waiver of any right of subrogation of the insurers
thereunder against Owner, the Subcontractors, the Financing Parties, the Utility
and all their assigns, subsidiaries, affiliates, employees, insurers and
underwriters and of any right of the insurers to any set-off or counterclaim or
any other deduction, whether by attachment or otherwise, in respect of any
liability of any such person insured under any such policy.
14.11 Contractor's Waiver. Contractor further releases,
assigns and waives any and all rights of recovery against Owner, the Financing
Parties, the Utility and all their affiliates, subsidiaries, employees,
successors, permitted assigns, insurers and underwriters, which Contractor may
otherwise have or acquire, in or from or in any way connected with any loss
covered by policies of insurance maintained or required to be maintained by
Contractor pursuant to this Agreement (other than third party liability
insurance policies) or because of deductible clauses (except as otherwise
provided in Section 14.15.3 hereof) in or inadequacy of limits of any such
policies of insurance.
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14.12 Evidence of Coverage. Prior to the Financial Closing
Date (or, if earlier, on or prior to the time such insurances under Sections
14.5, 14.7 and 14.8 hereof are required to be in effect), Contractor shall
furnish to the Financing Parties and Owner certificates of insurance (or if one
of the Financing Parties or Owner so directs, copies of the declaration pages of
the actual insurance policies signed by an authorized representative of the
insurer) from each insurance carrier showing that the above required insurance
is in force, the amount of the carrier's liability thereunder, and further
providing that the insurance will not be canceled, changed or not renewed until
the expiration of at least sixty (60) days (or ten (10) days in the case of
cancellation due to non-payment of premiums) after written notice of such
cancellation, change or non-renewal has been received by Owner, the Financing
Parties and the Utility. All copies of certificates of insurance submitted under
this Section 14.12 shall be in form and content reasonably acceptable to Owner,
the Financing Parties and the Utility.
14.12.1 Standards. All insurance described herein
shall be written by a company or companies authorized to do business in
the Commonwealth of Pennsylvania and reasonably satisfactory to Owner,
the Financing Parties and the Utility. Contractor and all
Subcontractors shall not violate or knowingly permit any violation of
any conditions or terms of the policies of insurance described herein.
14.13 Contractor's or Rented Equipment. All construction tools
and equipment belonging to Contractor or any Subcontractor used by or on behalf
of Contractor or any Subcontractor for its performance hereunder shall be
brought to and kept at the Facility Site at the sole cost, risk and expense of
Contractor or such Subcontractor and Owner shall not be liable, subject to the
provisions of Section 14.15.2 hereof, for loss or damage thereto and any
insurance policies carried by Contractor, any Subcontractor or any third party
on said equipment, supplies and materials shall provide for a waiver of the
underwriters' right to subrogation against Owner, the Financing Parties, the
Utility and all their assignees, subsidiaries, affiliates, employees, insurers
and underwriters. Contractor shall obtain adequate insurance to cover any
construction tools and equipment leased.
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14.14 Descriptions not Limitations. The coverages referred to
above shall be set forth in full in the respective policy forms, and the
foregoing descriptions of such policies are not intended to be complete, nor to
alter or amend any provision of the actual policies; provided, however, that
neither the content of any insurance policy or certificate, nor Owner's approval
thereof, shall relieve Contractor of any of its obligations under this
Agreement.
14.15 Cost of Premiums, Risk of Loss and Deductibles.
14.15.1 Cost of Premiums. (a) Construction Insurance.
Except as otherwise provided in this Section 14.15.1, Contractor shall
bear responsibility for payment of all premiums for insurance coverage
required to be provided by Contractor pursuant to this Article 14.
Contractor shall use all reasonable efforts to obtain the "Delay in
Start-up" insurance required under Sections 14.7 and 14.8 hereof at the
lowest available cost, and Owner shall promptly reimburse Contractor
for such "Delay in Start-up" insurance premiums.
(b) Operating Insurance. Owner shall be responsible
for obtaining, on such terms and conditions as Owner and its Financing
Parties reasonably deem to be appropriate, "all-risk" property
insurance (including "business interruption" coverage) for the Facility
for the period commencing with the first to occur of Provisional
Acceptance, Interim Acceptance and Final Acceptance (the "Operating
Insurance"), and Owner shall use all reasonable efforts to obtain such
insurance at the lowest available cost. [*].
14.15.2 Risk of Loss. With respect to the Facility,
until (i) delivery by Owner of the
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Provisional Acceptance Certificate pursuant to Section 6.3.2 hereof,
the Interim Acceptance Certificate pursuant to Section 6.4.2 hereof or
the Final Acceptance Certificate pursuant to Section 6.5.1.2 hereof,
whichever first occurs, or (ii) any earlier transfer of control of the
Facility to Owner upon termination of this Agreement (the earlier of
clause (i) or clause (ii) above, the "Risk Transfer Date"), Contractor
(not Owner) shall bear the risk of loss and full responsibility for the
costs of replacement, repair or reconstruction resulting from any
damage to or destruction of the Facility or any materials, equipment,
tools and supplies, which are purchased for permanent installation in
or for use during construction of the Facility, regardless of whether
Owner has title thereto under this Agreement, except to the extent such
loss or damage is a result of the negligence or intentional misconduct
of Owner, its employees or agents, in which event Owner shall be
responsible: (a) with respect to any Project losses covered by the
Builder's Risk insurance or the Ocean Marine Cargo insurance required
under Sections 14.7 and 14.8 hereof, for up to the permitted deductible
applicable thereto as set forth in Section 14.15.3 hereof, and (b) with
respect to any tools and equipment covered by Section 14.13 hereof, for
up to the lesser of the insurance deductible applicable thereto and one
hundred thousand dollars ($100,000) per occurrence; provided, however,
that Owner (not Contractor) shall bear the risk of loss and full
responsibility for the costs of replacement, repair or reconstruction
with respect to any such loss, damage or destruction that is covered by
the Builder's Risk insurance and the Ocean Marine Cargo insurance
required by Sections 14.7 and 14.8 hereof (1) to the extent that the
proceeds of such insurance have been paid to Owner or the Financing
Parties for replacement, repair or reconstruction of the Facility and
such proceeds have not been made available to, or used at the direction
of or with the consent of, Contractor for application toward the cost
of replacement, repair or reconstruction of the Facility, and (2) with
respect to any permitted deductible amounts under such insurance to the
extent that such amounts for any single "occurrence" exceed $250,000.
After the Risk Transfer Date with respect to the
Facility, the Owner shall bear all risk of loss and
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full responsibility for repair, replacement or reconstruction with
respect to any loss, damage or destruction to the Facility which occurs
after such Risk Transfer Date, except to the extent such loss or damage
is a result of (x) the continuing performance of the Services by
Contractor or any Subcontractor (including any of their employees or
agents) or (y) the negligence or intentional misconduct of Contractor
or any Subcontractor (including any of their employees or agents), in
either of which events Contractor shall be responsible for up to the
lesser of the insurance deductible applicable thereto and two hundred
and fifty thousand dollars ($250,000) per occurrence.
14.15.3 Deductibles. Contractor shall be responsible
for deductibles for any losses covered by insurance required to be
provided by Contractor under this Article 14; provided, however, that
Owner shall be responsible for the following:
(a) deductibles in connection with any such Project
losses that are covered by Builder's Risk insurance required
under Section 14.7 hereof and Ocean Marine Cargo insurance
required under Section 14.8 hereof, in each case only up to
the permitted deductibles hereunder and only to the extent
that the deductibles are in respect of losses caused by the
negligence or intentional misconduct of Owner; and
(b) deductibles in connection with any such Project
losses that are covered by the "Delay in Start-Up" insurance
required under Sections 14.7 and 14.8 hereof.
14.16 Additional Insureds. All Contractor and Owner furnished
insurance coverages required by this Article 14 (with the exception of the
insurance required under Section 14.2) shall include Owner, Contractor, the
Financing Parties, the Utility and all their assignees, subsidiaries an
affiliates as additional insureds, as their respective interests may appear and,
with respect to the "All Risk" Builder's Risk Insurance required by Section 14.7
hereof, shall designate the Financing Parties (as identified by Owner) as loss
payees for losses in excess of $1 million.
14.17 No Limitation of Liability. The required coverages
referred to and set forth in this Article 14 shall
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in no way affect, nor are they intended as a limitation of, Contractor's
liability with respect to its performance of the Services except as expressly
provided elsewhere.
14.18 Insurance Primary. All policies of insurance provided by
Contractor pursuant to this Article 14 shall be written as primary and
noncontributing with respect to any other similar coverage that Owner, the
Financing Parties, the Utility and their assignees, subsidiaries and affiliates
may carry.
ARTICLE 15
Termination
15.1 Termination for Owner's Convenience. Owner may for its
convenience terminate any part of the Services or all remaining Services at any
time upon thirty (30) days' prior written notice to Contractor specifying the
part of the Services to be terminated and the effective date of termination.
Promptly upon receipt of such notice, Contractor shall stop performance of the
terminated Services and shall promptly order and commence demobilization with
regard to the terminated Services. Contractor shall continue to prosecute the
part of the Services not terminated. In case of such partial termination, the
exercise of such partial termination right by Owner shall be conditioned upon
the Parties' mutual and reasonable agreement on the Scope Change Order, if any,
necessary to make equitable adjustments to one or more of the Guaranteed
Completion Dates, the Contract Price, the Payment and Milestone Schedule, the
Project Schedule, the Performance Guarantees and such other provisions of this
Agreement which may be affected thereby, as appropriate. In the event of
termination by Owner under this Section 15.1 at any time prior to the
Commencement Date, Owner shall pay to Contractor such amounts as are required
pursuant to Section 4.2.1 hereof. In the event of termination by Owner under
this Section 15.1 at any time on or after the Commencement Date, Owner shall pay
to Contractor such amounts as are required pursuant to Section 4.4 hereof
(provided that if such termination is only of part of the Services, the
provisions of said Section 4.4 shall be applied only with respect to the
terminated Services); provided, that Contractor shall mitigate all damages or
expenses to be borne by Owner under Section 4.4 hereof; and provided, further,
that if Owner so requests, Contractor shall execute and deliver all documents
and take all other steps,
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including legal assignments, as necessary to transfer to Owner (or to Owner's
designee, which may be any other AES affiliate or any third party purchaser) all
of Contractor's right, title and interest in and to all items procured by
Contractor for the Project and all contractual rights of Contractor under all
subcontracts, purchase orders, warranties, guarantees and other agreements for
the Project, in each case in accordance with the provisions set forth in Section
4.4(a) and (b) hereof, as applicable.
15.1.1 Owner's Right to Suspend Completion of the
Services. Owner may elect to suspend completion of all or any part of
the Services upon ten days' prior written notice to Contractor (or, in
Emergency situations, upon such prior notice as circumstances permit)
indicating (a) the portion of the Services the completion of which
Owner has elected to defer; (b) Owner's estimate of the duration of
such suspension; and (c) the effective date of such suspension of the
Services. Upon receipt of and consistent with the effective date of
such notice, Contractor shall stop performance of the Services which
Owner has elected to defer and shall continue to complete performance
of the balance of the Services. In the event of a suspension of the
Services pursuant to this Section 15.1.1, Owner shall (i) within
fifteen (15) days after receipt from Contractor of an invoice and such
supporting documentation as Owner reasonably requires to verify the
invoiced amounts, pay to Contractor the sum of (1) such amount, if any,
of the unpaid Contract Price that is representative of the actual stage
of completion of the Services being deferred that have been performed
to date and not previously compensated for through Contract Price
payments made through such date (as reasonably determined based upon
the percentage completion of applicable milestones relating to such
deferred work as set forth in the Payment and Milestone Schedule or as
otherwise mutually and reasonably agreed upon by the Parties), plus (2)
if and to the extent appropriate based upon the duration and scope of
the suspension, such reasonable demobilization costs incurred by
Contractor as a result of such suspension, and (ii) authorize a Scope
Change Order making equitable adjustments to one or more of the
Guaranteed Completion Dates, the Construction Progress Milestone Dates,
the Contract Price, the Payment and Milestone Schedule, the Project
Schedule, the Performance Guarantees and such other provisions of this
Agreement
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which may be affected thereby, as appropriate. Contractor shall
mitigate expenses to be borne by Owner as a result of suspension of the
Services pursuant to this Section 15.1.1.
15.2 Termination by Contractor.
15.2.1 Suspension or Termination Upon Non-Payment by
Owner. If Owner fails to pay to Contractor any payment as required
hereunder and such failure continues for twenty (20) days, then (a)
Contractor may suspend its performance of the Services hereunder upon
ten (10) days' prior written notice to Owner, which suspension may
continue until such time as such payment (plus accrued interest thereon
pursuant to Section 25.1 hereof) is paid to Contractor, and/or (b) if
such payment has not been made prior to the commencement of a
suspension by Contractor under clause (a) above, Contractor may
terminate this Agreement upon sixty (60) days' prior written notice to
Owner, provided that such termination shall not become effective if
such payment (plus accrued interest thereon pursuant to Section 25.1
hereof) is made to Contractor prior to the end of such notice period.
In the event of such a suspension by Contractor pursuant to clause (a)
above, an equitable adjustment to one or more of the Contract Price,
the Guaranteed Completion Dates, the Construction Progress Milestone
Dates, the Payment and Milestone Schedule and the Project Schedule,
and, as appropriate, such other provisions of this Agreement that may
be affected thereby, shall be made by agreement between Owner and
Contractor or otherwise pursuant to Article 12 or 21 hereof. In the
event of such a termination by Contractor pursuant to clause (b) above,
Owner shall pay to Contractor such amounts as are required pursuant to
Section 4.4 hereof; provided, that Contractor shall mitigate all
damages or expenses to be borne by Owner under Section 4.4 hereof.
Notwithstanding the foregoing, Owner shall not be deemed to be in
breach hereof, nor shall Contractor be entitled to suspend its
performance hereunder or to terminate this Agreement, by reason of the
withholding of any payment (or portion thereof) which is the subject of
a bona fide dispute.
15.2.2 Termination Upon Extended Suspension of
Services. In the event that Owner has suspended completion of all or
any part of the Services in accordance with Section 15.1.1 hereof for a
period in
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excess of two years in the aggregate, Contractor may, at its option, at
any time thereafter so long as such suspension continues, give written
notice to Owner that Contractor desires to terminate such suspended
Services. Unless Owner orders Contractor to resume performance of such
suspended Services within ten days of the receipt of such notice from
Contractor, such suspended Services shall be deemed to have been
terminated by Owner for its convenience pursuant to Section 15.1
hereof.
15.2.3 Termination Upon Extended Force Majeure Delay.
In the event that the occurrence of one or more Force Majeure Events
prevents Contractor from performing the Services for a period of three
hundred sixty five (365) consecutive days, Contractor may, at its
option, give written notice to Owner of its desire to terminate this
Agreement. This Agreement will be deemed to have been terminated by
Owner for its convenience pursuant to Section 15.1 hereof on the tenth
day following Owner's receipt of such notice unless, on or prior to
such date, such Force Majeure Event(s) cease(s) to exist; provided,
that for purposes of any termination pursuant to this Section 15.2.3
the Termination Payment otherwise due to Contractor from Owner pursuant
to Section 4.4 hereof shall be reduced by 5%.
15.3 Consequences of Termination. (a) Upon any termination
pursuant to this Article 15 or Article 16 hereof, Owner may, provided that if
such termination is pursuant to Article 15 hereof Contractor shall have been
paid all amounts due and owing to it under this Agreement (and provided further
that this Section 15.3 shall not be deemed to constitute a waiver by Contractor
of any rights to payment it may have hereunder in the event of a termination
pursuant to Article 16 hereof), at its option elect to have itself (or its
designee, which may include any other AES affiliate or any third party
purchaser) (i) assume responsibility for and take title to and possession of the
Project and any or all work, materials or equipment remaining at the Facility
Site, and (ii) succeed automatically, without the necessity of any further
action by Contractor, to the interests of Contractor in any or all items
procured by Contractor for the Project and in any and all contracts and
subcontracts entered into between Contractor and any Subcontractor with respect
to the equipment specified in Appendix U hereto, and with respect
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to any or all other Subcontractors selected by Owner which are materially
necessary to the timely completion of the Project, Contractor shall use all
reasonable efforts to enable Owner (or its designee) to succeed to Contractor's
interests thereunder (provided that with respect to these other Subcontractors,
if Contractor so elects the Parties shall use all reasonable efforts to
structure such succession by Owner (or its designee) to be pursuant to a
novation of such Subcontract or to include a release by such Subcontractor of
Contractor from any obligations thereafter arising under such Subcontract and,
if such termination is pursuant to this Article 15, obtaining such a structure
shall be a condition to Owner's (or its designee's) succession to such
Subcontract). With respect to all such contracts and subcontracts that Owner (or
its designee) so succeeds to, it shall be required, as between Contractor and
Owner (or its designee), to compensate such Subcontractors only for compensation
becoming due and payable to such Subcontractors under the terms of their
respective contracts and subcontracts with Contractor from and after the date
Owner (or its designee) elects to succeed to the interests of Contractor in such
contracts and subcontracts. All sums claimed by such Subcontractors to be due
and owing for Services performed prior to such date shall constitute debts
between Contractor and the affected Subcontractors, and Owner (or its designee)
shall in no way be liable for such sums. Contractor shall include in all
contracts and subcontracts entered into with Subcontractors with respect to the
equipment specified in Appendix U hereto, a provision providing for the
foregoing, and its contracts and subcontracts with its other Subcontractors
shall not by its express terms prevent the foregoing.
(b) In the event of any termination hereof, Owner may, without
prejudice to any other right or remedy it may have, at its option, finish the
Services by whatever method Owner may deem expedient. To the extent the costs of
completing the Services after a termination by Owner pursuant to Section 16.2
hereof, including without limitation compensation for additional professional
services, exceed those amounts that would have been payable to Contractor
hereunder to complete the Services if this Agreement had been fully performed,
Contractor shall pay the difference to Owner upon demand; provided, that Owner
shall use all reasonable efforts to mitigate such costs to be borne by
Contractor under this Section 15.3. In addition, Owner shall be entitled to
exercise any rights or remedies available to Owner hereunder or at law or in
equity. In the
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case of a termination by Owner pursuant to Section 16.2 hereof, Contractor shall
not be entitled to any further payment hereunder, other than any amounts that
were due and owing to Contractor hereunder as of the date of such termination;
provided, that any such payments that otherwise were due and owing from Owner
hereunder as of the date of such termination shall not be payable to Contractor
unless and until Contractor has paid any and all amounts due or to become due
from it to Owner hereunder (including without limitation any payments due under
Section 16.2 hereunder).
15.4 Surviving Obligations. Termination of this Agreement
pursuant to this Article 15 or Article 16 hereof (a) shall not relieve
Contractor or Owner of its obligations with respect to the confidentiality of
the other Party's information as set forth in Article 19 hereof, (b) shall not
relieve Contractor or Owner of any obligation hereunder which expressly or by
implication survives termination hereof, and (c) except as otherwise provided in
any provision of this Agreement expressly limiting the liability of either
Party, shall not relieve either Party of any obligations or liabilities for loss
or damage to the other Party arising out of or caused by acts or omissions of
such Party prior to the effectiveness of such termination or arising out of such
termination, and shall not relieve Contractor of its obligations as to portions
of the Services already performed or as to obligations assumed by Contractor or
Owner prior to the date of termination. For the avoidance of doubt, the warranty
obligations of Contractor pursuant to Article 10 hereof with respect to all
Services performed hereunder prior to the termination of this Agreement shall
survive termination of this Agreement; provided, that such warranty obligations
shall be equitably modified by agreement of the Parties, or otherwise pursuant
to Article 21 hereof, to account for any adverse effect such termination may
have on Contractor's ability to perform Services meeting the warranty and
guarantee standards contained in Article 10 hereof.
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ARTICLE 16
Default and Remedies
16.1 Contractor's Default. Contractor shall be immediately in
default of its obligations hereunder upon the occurrence of any one or more of
the following events, acts or conditions:
(a) Contractor shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect, or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or the appointment of or taking of
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall generally not pay its debts
as they become due, or shall make a general assignment for the benefit
of creditors, or shall take any corporate action to authorize any of
the foregoing;
(b) An involuntary case or other proceeding shall be
commenced against Contractor seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed or
unstayed for a period of sixty (60) days;
(c) Any representation or warranty made by Contractor
under Article 24 hereof was false or materially misleading when made
and at the time Owner or Contractor becomes aware that such
representation or warranty was false or misleading it could reasonably
be expected to have a material adverse effect on Owner or the Project,
and Contractor fails to remedy such false or materially misleading
representation or warranty within thirty (30) days after Contractor
receives a written notice from Owner with respect thereto;
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(d) Except as otherwise permitted under Section 17.1
hereof, Contractor assigns or transfers this Agreement (or any right or
interest herein) without the express written consent of Owner;
(e) Contractor (i) knowingly fails to maintain any
insurance coverages required of it pursuant to Article 14 hereof, or
(ii) otherwise fails to maintain and, within three business days of its
receipt of a written notice from Owner with respect thereto, fails to
correct its failure to maintain any such required insurance coverages;
(f) Contractor or any Subcontractor fails to comply
with any provision of any Applicable Law or Applicable Permit, and such
failure is not remedied within (i) thirty (30) days after Contractor
receives actual knowledge thereof, or (ii) such longer period as may be
necessary for Contractor to cure such failure, not to exceed one
hundred twenty (120) days, provided that Contractor diligently pursues
the cure of such failure and such cure is effected in such a manner and
within such time that such failure to comply could not reasonably be
expected to have a material adverse effect on Owner or the Project;
(g) The cessation or abandonment by Contractor of the
performance of the Services, and Contractor fails to recommence the
Services within ten days after Contractor receives a written notice
from Owner with respect thereto, unless due to an Emergency (provided
that Contractor shall have furnished Owner with a reasonable
justification for its course of action within twenty four (24) hours of
declaring the emergency in question, which course of action is
consistent with the standards of performance required hereunder);
(h) The EPC Guaranty issued by [Siemens Corporation]
(or its permitted successors thereunder) pursuant to Section 2.1.27
hereof is terminated or repudiated or an Event of Default (as defined
therein) exists thereunder;
(i) Contractor fails to supply sufficient skilled
workers or suitable materials or equipment to perform the Services, or
fails to make prompt payments to Subcontractors (unless such payment is
the subject
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of a bona fides dispute, and provided that Contractor is in compliance
with its requirements under Sections 2.1.22, 4.6 and 10.2 hereof) or
for labor, materials or equipment, and does not remedy any such failure
within thirty (30) days of receipt of written notice from Owner with
respect thereto;
(j) (1) None of Provisional Acceptance, Interim
Acceptance and Final Acceptance of the Facility shall have occurred,
and Contractor shall have failed to provide Owner with a Plan relating
thereto in accordance with Section 7.2.1 hereof, in each case by the
date that is forty (40) days after the Guaranteed Provisional
Acceptance Date;
(2) Neither Provisional Acceptance nor Interim
Acceptance of the Facility shall have occurred within twelve (12)
months following the Guaranteed Provisional Acceptance Date; or
(3) Final Acceptance of the Facility shall not have
occurred by the Guaranteed Final Acceptance Date; provided, however,
that if on or before the Guaranteed Final Acceptance Date the Facility
has achieved at least Provisional Acceptance and has achieved all other
requirements for Final Acceptance except for the Reliability Guarantee,
such failure to achieve Final Acceptance shall not constitute an Event
of Default under this Section 16.1(j)(3) unless such failure continues
to exist on the date that is ninety (90) days after the Guaranteed
Final Completion Date;
(k) Contractor fails to achieve any of the
Construction Progress Milestones, fails to have an Approved Plan
relating thereto and fails to be proceeding in accordance with a Plan
as revised by comments from Owner and Independent Engineer pursuant to
clause (x) of Section 7.6.2 hereof, and each such failure continues to
exist on the date that is sixty (60) days after the corresponding
Construction Progress Milestone Date;
or
(l) Contractor fails to perform or observe in any
material respect any provision of this Agreement not otherwise
addressed in this Section 16.1 and fails to remedy any such failure
within (i) thirty (30) days
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after Contractor receives a written notice from Owner with respect
thereto, or (ii) such longer period as may be necessary for Contractor
to cure such failure, not to exceed one hundred twenty (120) days,
provided that Contractor diligently pursues the cure of such failure
and such cure is effected in such a manner and within such time that
such failure to comply could not reasonably be expected to have a
material adverse effect on Owner or the Project.
16.2 Owner's Rights and Remedies. In the event that Contractor
is in default of its obligations hereunder pursuant to Section 16.1 hereof,
Owner shall have any or all of the following rights and remedies (in addition to
any other rights and remedies that may be available to Owner hereunder or at law
or in equity) and Contractor shall have the following obligations:
(a) Owner may, without prejudice to any other right
or remedy Owner may have hereunder or at law or in equity, terminate
this Agreement in whole or in part immediately upon delivery of notice
to Contractor. In case of such partial termination, the Parties shall
mutually agree upon a Scope Change Order to make equitable adjustments
(including the reduction and/or deletion of obligations of the Parties
commensurate with the reduced scope Contractor shall have after taking
into account such partial termination) to one or more of the Guaranteed
Completion Dates, the Construction Progress Milestone Dates, the
Contract Price, the Payment and Milestone Schedule, the Project
Schedule, the Performance Guarantees and such other provisions of this
Agreement which may be affected thereby, as appropriate. In the event
that the Parties are unable to reach mutual agreement as to said Scope
Change Order and the dispute resolution procedures set forth in Article
21 are invoked, such procedures shall give due consideration to
customary terms and conditions under which Contractor has entered
subcontracts with third party prime contractors covering services
substantially similar to those Services which are not being terminated.
(b) If requested by Owner, Contractor shall withdraw
from the Facility Site, shall assign to Owner such of Contractor's
subcontracts (to the extent permitted therein) as Owner may request,
and shall
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remove such materials, equipment, tools and instruments used by, and
any debris and waste materials generated by, Contractor in the
performance of the Services as Owner may direct, and Owner, without
incurring any liability to Contractor (other than the obligation to
return to Contractor at the completion of the Project such materials
that are not consumed or incorporated into the Project, solely on an
"as is, where is" basis without any representation or warranty of any
kind whatsoever), may take possession of any and all designs, drawings,
materials, equipment, tools, instruments, purchase orders, schedules
and facilities of Contractor at the Facility Site that Owner deems
necessary to complete the Services (other than any designs and drawings
that (i) are proprietary to Contractor, (ii) Contractor's established
corporate policy prohibits the disclosure of to prime contractors,
subcontractors or any other third parties that are similar to or the
same as Owner and its replacement contractor (provided that if such
policy allows such disclosure only on restrictive terms and conditions,
then Owner shall be entitled to receive such disclosure on
substantially similar terms and conditions), and (iii) are so
competitively sensitive that their disclosure to competitors would have
a material adverse effect on Contractor);
(c) Owner, without incurring any liability to
Contractor, shall have the right (either with or without the use of
Contractor's materials, equipment, tools and instruments) to have the
Services finished and to exercise any rights or remedies available to
it hereunder or at law or in equity (including without limitation
demanding the payments from Contractor pursuant to Section 15.3
hereof);
(d) Owner may exercise any other remedy it may have
hereunder or at law or in equity, including seeking the recovery of
damages.
ARTICLE 17
Assignment
17.1 Consent Required. It is expressly understood and agreed
that this Agreement is personal to Contractor and Owner, and that Contractor and
Owner shall have no right, power or authority to assign or delegate any
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of their respective rights or obligations under this Agreement or any portion
thereof, either voluntarily or involuntarily, or by operation of law.
Notwithstanding the foregoing, (i) Contractor may, without Owner's approval and
provided that such assignment could not reasonably be expected to have a
material adverse effect on Owner or the Project, assign all (but not less than
all) of its rights or obligations under this Agreement to a parent, sister or
subsidiary company, provided that such assignee is directly or indirectly
wholly-owned by the EPC Guarantor and the EPC Guaranty issued by the EPC
Guarantor is still in full force and effect, and (ii) Owner may, without
Contractor's approval, (a) assign any or all of its rights under this Agreement
as collateral security to the Financing Parties, and (b) assign any or all of
its rights under this Agreement to any transferee of the Project or a
substantial portion thereof, provided that such assignee has financial and
operational capabilities that either are substantially similar to those of Owner
at such time or otherwise are such that the assignment could not reasonably be
expected to have a material adverse effect on Contractor's rights and
obligations hereunder.
If in connection with any assignment permitted pursuant to
clause (i)(a) of the second sentence of this Section 17.1 any Financing Party
requests Contractor to consent in writing to such an assignment even though such
consent is not required hereunder, Contractor shall do so promptly, with such
acknowledgment and consent agreement to include such terms and conditions as are
mutually and reasonably agreed upon by Contractor, Owner and the Financing
Parties. In the case of an assignment by one Party that does not require the
consent of the other Party, the assigning Party's sole obligation under this
Section 17.1 is to provide the other Party with notice of such assignment. If
either Party reasonably determines or is reasonably advised that any further
instruments are necessary or desirable to carry out the intent of the second
sentence of this Section 17.1, the other Party will execute and deliver all such
instruments and take any action reasonable to effectuate the intent of this
Section 17.1. The Parties recognize that this Agreement is subject to review by
financial institutions for purposes of the project financing of the Project. At
Owner's request, Contractor shall provide to any Financing Party a certificate
from Contractor and/or an opinion of counsel addressed to any such Financing
Party concerning such matters as such Financing Party reasonably requests from
Contractor,
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including that (w) Contractor is duly organized, validly existing and in good
standing under the laws of the state or commonwealth of its formation or
incorporation, as the case may be, and is qualified to do business in the
Commonwealth of Pennsylvania, (x) the execution, delivery and performance of
this Agreement is within the power and authority of Contractor and this
Agreement is not in conflict with its organizational documents or any agreement
to which Contractor is a party or by which it is bound or affected, (y) there is
no law, rule or regulation, nor is there any judgment, decree or order of any
court or governmental entity binding on Contractor which would be contravened by
the execution, delivery, performance or enforcement of the Agreement, and (z)
the Agreement is a legal, valid and binding obligation enforceable against
Contractor in accordance with its terms, subject to usual and customary
qualifications.
17.2 Successors and Assigns. All of the rights, benefits,
duties, liabilities and obligations of the Parties hereto shall inure to the
benefit of and be binding upon their respective permitted successors and
permitted assigns.
ARTICLE 18
Design Documents
18.1 Owner Review. It is expressly understood and agreed that
the Design Documents and other related design information which are prepared in
connection with the Services and which have been identified in Appendix P hereto
as being subject to the review, comment and/or approval of Owner (such design
information together with the Design Documents, the "Documents for Approval"),
shall be made available to Owner (or its designees) for its review, comment
and/or approval, as the case may be, in order to monitor compliance with this
Agreement as such documents are prepared and completed.
18.2 Review not Release of Obligations. Review, comment and/or
approval by Owner (or its designees) of any documents or submittals that
Contractor is required to submit to Owner (or its designees) hereunder for its
review, comment and/or approval (including without limitation the Documents for
Approval pursuant to Section 18.1 hereof) shall not relieve or release
Contractor from any of its duties, obligations or liabilities provided for under
the terms of this Agreement. Prior to the Commencement Date,
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the Parties shall mutually agree upon and set forth in Appendix P hereto the
timing requirements for submittal, review, approval and return of such Documents
for Approval.
18.3 Final Documents. Within ninety (90) days after the
occurrence of the first to occur of Provisional Acceptance, Interim Acceptance
and Final Acceptance of the Facility, Contractor shall furnish Owner with the
"as built" design documents listed in Appendix P hereto, in form and substance
reasonably satisfactory to Owner, reflecting the Facility as actually
constructed, including without limitation an "as built" survey illustrating the
boundaries of the Facility Site, and the established building setback lines, if
any.
18.4 Ownership. Contractor agrees that all Design Documents
and other documents prepared by Contractor and used exclusively in the
performance of the Services and provided to Owner as a deliverable under this
Agreement shall be the property of Owner; provided, that Owner shall not
transfer any such documents to another person other than in connection with its
security assignment to the Financing Parties and any transfer or other
assignment by Owner of all or substantially all of its interests in the Project,
and in any such case such transfer shall be made subject to the terms of Section
19.1 hereof to the extent applicable. Contractor agrees that all such documents,
as well as any drawings, tracings, specifications, calculations, memoranda,
data, notes and other materials which are supplied by Owner and come into the
possession of Contractor, shall be used solely with respect to this Project and,
with respect to all such materials supplied by Owner that were specifically
identified at the time of such submittal as requiring return, shall, except for
Contractor's file copy, be delivered to Owner at the first to occur of
Provisional Acceptance, Interim Acceptance and Final Acceptance of the Facility
and termination of the Services.
ARTICLE 19
Confidential Information
19.1 Confidentiality. Each Party agrees to hold in confidence
for a period commencing with the date hereof and ending five years from the date
of Project Completion, except as may be necessary to perform its obligations
hereunder, any information supplied to it by the other Party and designated in
writing as confidential. Each Party
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further agrees to require third parties to enter into appropriate non-disclosure
agreements relative to such confidential information as may be communicated to
them by Contractor or Owner. The provisions of this Section 19.1 shall not apply
to information within any one of the following categories: (a) information which
was in the public domain prior to receipt thereof from the other Party or which
subsequently becomes part of the public domain by publication or otherwise,
except by the receiving Party's wrongful act; (b) information which the
receiving Party can show was in its possession prior to its receipt thereof from
the other Party; (c) information received by a Party from a third party without
a confidentiality obligation with respect thereto; (d) information which the
receiving Party developed independently; or (e) information which a Party is
required by law to disclose; provided, however, that prior to making any such
disclosure under clause (e) of this Section 19.1, such disclosing Party shall:
(i) provide the other Party with timely advance written notice of the
confidential information requested by such government authority and such
disclosing Party's intent to so disclose; (ii) minimize the amount of
confidential information to be provided consonant with the interests of the
non-disclosing Party and the requirements of the government authority involved;
and (iii) at the request and expense of the non-disclosing Party make every
reasonable effort (which shall include participation by the non-disclosing Party
in discussions with the government authority involved) to secure confidential
treatment and minimization of the confidential information to be provided.
Neither Party shall publish the terms and conditions of this Agreement or
Project technical information, unless the other Party provides its express prior
written consent thereto; provided, however, that Owner shall be permitted to
disclose, subject to the provisions of this Section 19.1, such terms and
provisions to the Independent Engineer, the Financing Parties and the Utility
and otherwise to the extent required to obtain financing for the Facility or to
perform its obligations under the Power Purchase Agreement or, upon the
termination of this Agreement pursuant to Section 16.2 hereof, to the extent
Owner reasonably deems necessary to complete the Services (other than any such
technical information that (1) is proprietary to Contractor, (2) Contractor's
established corporate policy prohibits the disclosure of to prime contractors,
subcontractors or any other third parties that are similar to or the same as
Owner and its replacement contractor (provided that if such policy allows such
disclosure only on restrictive terms and
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conditions, then Owner shall be entitled to receive such disclosure on
substantially similar terms and conditions), and (3) is so competitively
sensitive that its disclosure to competitors would reasonably be determined to
have a material adverse effect on Contractor). Notwithstanding any other
provision of this Section 19.1, (a) Owner shall be permitted to summarize the
material terms and conditions of this Agreement for purposes of including such
summary in any offering statements or similar disclosure documents relating to
the financing of the Facility ("Offering Statements") which will be provided to
credit rating agencies ("Rating Agency") that may provide a rating for such debt
and to prospective purchasers of such debt ("Offerees"); and (b) the Independent
Engineer may utilize certain project technical information in a report
("Report") which will be included in such Offering Statement; provided, however,
that prior to the distribution of the summary referred to in clause (a) above
and the Report referred to in clause (b) above to any Rating Agency or Offerees,
Owner shall provide Contractor a copy thereof and Contractor shall have a
reasonable period of time to review and provide comments thereon to Owner in the
case of the summary and Owner and the Independent Engineer in the case of the
Report. Owner shall give due consideration to such comments in finalizing the
summary and shall cause the Independent Engineer to give due consideration to
such comments in finalizing the Report, in both cases in light of Contractor's
interest in protecting its proprietary information and in light of Owner's and
the Independent Engineer's disclosure obligations under applicable securities
laws. The parties shall attempt in good faith to resolve any disagreements
concerning information to be included in such summary or Report. No Offeree
shall be given a copy of this Agreement but an Offeree may inspect a copy of
this Agreement at the offices of Owner or its designee provided such Offeree has
entered into an appropriate confidentiality agreement and such Offeree is not in
competition with Contractor in Contractor's power generation, distribution and
transmission business.
19.2 Publicity Releases. Contractor shall not, nor shall it
permit any Subcontractor to, issue any press or publicity release or any
advertisement, or publish or otherwise disclose any photograph or other
information, concerning this Agreement or the Project without the express prior
written consent of Owner.
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ARTICLE 20
Inspection
20.1 Project Inspection. Contractor acknowledges that prior to
the execution of this Agreement, Contractor (a) has made a complete and careful
examination of the Facility Site and the surrounding areas, the Design Documents
and the drawings and specifications and other information set forth in Appendix
A hereto, (b) has made a complete and careful examination to determine the
difficulties and hazards incident to the performance of the Services, including
without limitation (i) the location of the Project, (ii) the condition of the
Facility Site and the surrounding areas, (iii) the proximity of the Project to
adjacent facilities and structures, (iv) the conditions of the roads, waterways
and railroads in the vicinity of the Facility Site, including the conditions
affecting shipping and transportation, access, disposal, handling and storage of
materials, (v) the labor conditions in the region of the Facility Site, (vi)
Applicable Laws, Applicable Permits, the Electrical Interconnection
Requirements, the PPA Operating Requirements (as in effect on the date of
execution of this Agreement), the Guaranteed Emissions Limits and Real Estate
Rights, (vii) the local weather conditions based upon previous weather data, and
(viii) all other matters that might affect Contractor's performance hereunder or
the construction of the Facility (other than subsurface conditions pursuant to
Section 20.2 hereof), and (c) has determined to Contractor's satisfaction the
nature and extent of such difficulties and hazards.
20.2 Subsurface Conditions. In the event and to the extent a
subsurface condition at the Facility Site affects Contractor's costs or ability
to meet the Guaranteed Completion Dates or the Construction Progress Milestone
Dates, an equitable adjustment shall be made in one or more of the Contract
Price, the Guaranteed Completion Dates, the Construction Progress Milestone
Dates, the Payment and Milestone Schedule, the Performance Guarantees, the
Project Schedule and, as appropriate, such other provisions of this Agreement
which may be affected thereby pursuant to Article 12 hereof; provided, however,
that no such adjustment shall be made with respect to (i) any material
difficulties, hazards or conditions at the Facility Site identified in the
preliminary geotechnical survey and soil analysis report prepared by or on
behalf of the Owner and delivered to Contractor prior to the execution date
hereof, (ii) any material difficulties, hazards or conditions at the Facility
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Site that were identified in the additional, comprehensive geotechnical survey
and soil analysis performed by Contractor pursuant to Section 20.3 hereof or
that should have been identified by such comprehensive survey and analysis if
Contractor had performed such survey and analysis in accordance with the
standards of performance required hereunder, and (iii) any Hazardous Materials
identified in any environmental site assessment report delivered to Contractor
by Owner pursuant to Section 20.3 hereof and for which Contractor has agreed to
accept disposal responsibility pursuant to Section 12.12 hereof.
20.3 Soil and Terrain Inspection. Contractor acknowledges that
prior to the execution of this Agreement Owner has made a preliminary
examination of the nature and character of the soil and terrain of the Facility
Site, the results of which were furnished to Contractor by Owner prior to the
execution date hereof, and Contractor has performed an additional, more complete
and careful geotechnical survey and analysis of the nature, character and
condition of the soil and terrain of, or near, the Facility Site in order to
determine any additional material difficulties on or about or near the Facility
Site (including without limitation the presence and effect of any artifacts or
other items of historical or archaeological significance and any wetlands (but
excluding any Hazardous Materials) on or about or near the Facility Site). No
later than October 1, 1998, Contractor shall prepare and deliver to Owner a
comprehensive report on any additional material difficulties with the condition
of the Facility Site identified by such more complete examination that were not
previously identified by Owner's preliminary examination. In addition, Owner
shall have the right, in its sole discretion, to prepare and deliver to
Contractor no later than thirty (30) days prior to the Commencement Date an
environmental assessment report of the Facility Site. If Owner's environmental
report (if any) reveals any additional material difficulties, hazards or
conditions at or near the Facility Site incident to the performance of the
Services that were not previously identified in the preliminary examination by
Owner delivered to Contractor prior to the execution hereof, then Contractor
shall have the right, to be exercised no later than thirty (30) days after
receipt of each such report, to request a Scope Change providing for such
equitable adjustments (if any) in one or more of the Contract Price, the
Guaranteed Completion Dates, the Construction Progress Milestone Dates, the
Payment and Milestone Schedule, the Performance Guarantees, the Project
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Schedule and, as appropriate, such other provisions of this Agreement which may
be affected thereby, in each case as may be reasonably warranted by such
material differences or additions, in which event Owner shall have the option of
(a) granting such a Scope Change on terms mutually and reasonably agreeable to
Owner and Contractor or (b) terminating this Agreement without any liability of
either Party to the other, subject to the provisions of Section 15.1 hereof.
ARTICLE 21
Dispute Resolution
21.1 Dispute Resolution. In the event a dispute arises between
Owner and Contractor regarding the application or interpretation of any
provision of this Agreement, the aggrieved Party shall promptly give notice in
writing to the other Party invoking the provisions of this Section 21.1 and the
Parties shall negotiate in good faith and attempt to resolve such dispute. If
the Parties fail to resolve the dispute within thirty (30) days after delivery
of such notice, each Party shall have the right to require, by written notice to
the other Party containing a brief description of the dispute, that each Party
nominate and have a senior officer of its management meet with the other Party's
nominated senior officer at the Facility Site, or at any other mutually agreed
location, within fifteen (15) days of such request, in order to attempt to
resolve the dispute. Should the Parties be unable to resolve the dispute to
their mutual satisfaction within fifteen (15) days after such meeting, each
Party shall have the right to pursue any and all remedies available to it
hereunder or available to it at law or in equity.
21.1.1 Independent Expert. If any dispute hereunder
involves technical issues (including, without limitation, as to the
adequacy of any Plan submitted by Contractor under Section 7.6.2
hereof), either Party could request that such matter be referred to a
mutually acceptable independent expert for resolution in an expedited
manner pursuant to procedures and timing to be mutually agreed upon by
the Parties; provided, that if the other Party does not agree to such
request or the Parties are unable to reach an agreement on such an
independent expert or such governing procedures (in each case in the
sole discretion of each Party) in any case within thirty
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(30) days after the initial request, then either Party may require that
the dispute be submitted to resolution pursuant to Section 21.1 hereof.
The findings of any such independent expert with respect to any
technical issues so presented to it for resolution hereunder shall be
binding upon the Parties.
21.2 Performance During Dispute. Subject to Contractor's
rights under Section 15.2.1 hereof, notwithstanding the existence of a dispute
between Owner and Contractor and regardless of whether such dispute is the
subject of dispute resolution pursuant to Section 21.1 hereof, Contractor shall
not be entitled to suspend or otherwise delay the performance of the Services.
ARTICLE 22
Cost Records; Audits
22.1 Maintenance of Records. Contractor shall maintain fiscal
records and books of account pertaining to the Project in accordance with U.S.
generally accepted accounting principles consistently applied.
22.2 Inspection of Books, Records and Audit Rights. Contractor
covenants and agrees to keep and maintain full, complete and detailed records of
all of its costs and allowances incurred in connection with Scope Changes priced
at cost plus fee. Contractor authorizes independent third parties designated by
Owner and subject to Contractor's approval (not to be unreasonably withheld) to
inspect and audit, during business hours, all such records. Such records, books
and accounts shall be preserved by Contractor and shall be available for audit
for a period of three (3) years after Project Completion, at no additional cost
to Owner.
22.3 Quality Audits. Owner may perform periodic audits of the
Project, or of documents related to the Project, to the extent necessary (in
Owner's reasonable judgment) to verify the application of the Quality Assurance
Plan set forth in Appendix K hereto and its results. In the event that, as a
result of an audit, Owner detects a failure to adhere to or to properly apply
such Quality Assurance Plan, upon the receipt of notice thereof from Owner,
Contractor shall take all actions necessary to correct such failure.
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ARTICLE 23
Independent Contractor
23.1 Contractor as Independent Contractor. Contractor shall be
an independent contractor with respect to the Project, each part thereof, and
the Services, and neither Contractor nor its Subcontractors nor the employees of
either shall be deemed to be agents, representatives, employees or servants of
Owner in the performance of the Services, or any part thereof, or in any manner
dealt with herein. The Parties covenant and agree that in the performance of the
Services by Contractor, Contractor shall not perform any act or make any
representation to any Person to the effect that Contractor, its agents,
representatives or Subcontractors, is the agent or agents of Owner.
ARTICLE 24
Representations and Warranties
24.1 Representations and Warranties of Contractor. Contractor
represents and warrants to Owner that:
24.1.1 Organization and Qualification. Contractor is
a corporation duly organized, validly existing and in good standing
under the laws of Pennsylvania, U.S.A., has the lawful power to engage
in the business it presently conducts and contemplates conducting, and
is duly licensed or qualified and in good standing as a corporation in
each jurisdiction wherein the nature of the business transacted by it
makes such licensing or qualification necessary.
24.1.2 Power and Authority. Contractor has the power
to enter into this Agreement and to perform its obligations hereunder
and all such actions have been duly authorized by all necessary
proceedings on its part.
24.1.3 No Conflict. The execution, delivery and
performance of this Agreement will not conflict with, result in the
breach of, constitute a default under or accelerate performance
required by any of the terms of the organizational documents of
Contractor or any Applicable Laws or any covenant, agreement,
understanding, decree or order to which Contractor is a
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party or by which Contractor or any of its properties or assets is
bound or affected.
24.1.4 Validity and Binding Effect. This Agreement
has been duly and validly executed and delivered by Contractor. This
Agreement constitutes a legal, valid and binding obligation of
Contractor, enforceable in accordance with its terms, except to the
extent that its enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the rights of creditors generally or by general principles of equity.
No authorization, approval, exemption or consent by any governmental or
public body or authority (other than the Applicable Permits listed in
Appendix F hereto) is required in connection with the authorization,
execution, delivery and carrying out of the terms of this Agreement.
24.1.5 Litigation. There are no actions, suits,
proceedings or investigations pending or, to the knowledge of
Contractor or its officers, threatened against it at law or in equity
before any court or before any federal, commonwealth, state, municipal
or other governmental department, commission, board, agency or
instrumentality whether or not covered by insurance which individually
or in the aggregate may result in any materially adverse effect on the
business, properties or assets or the condition, financial or
otherwise, of Contractor or in any impairment of Contractor' ability to
perform its obligations under this Agreement. Neither Contractor nor
any of its officers has knowledge of any violation or default with
respect to any order, writ, injunction or any decree of any court or
any Federal, commonwealth, state, municipal or other governmental
department, commission, board, agency or instrumentality which may
result in any such materially adverse effect or such impairment.
24.1.6 Patents, Licenses, Franchises. Contractor owns
or possesses all the patents, trademarks, service marks, tradenames,
copyrights, licenses, franchises, permits and rights with respect to
the foregoing necessary to perform the Services and to carry on its
business as presently conducted and presently planned to be conducted
without conflict with the rights of others.
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24.1.7 Compliance with Laws. Contractor has complied
with all Applicable Laws such that it has not been subject to any
fines, penalties, injunctive relief or criminal liabilities which in
the aggregate have materially affected or may materially affect the
business operations or financial condition of Contractor or its ability
to perform the Services.
24.1.8 Disclosure. No representation or warranty by
Contractor contained herein or in any other document furnished by
Contractor to Owner contains or will contain any untrue statement of
material fact or omits or will omit to state a material fact necessary
to make such representation or warranty not misleading in light of the
circumstances under which it was made.
24.2 Representations and Warranties of Owner. Owner represents
and warrants to Contractor that:
24.2.1 Organization and Qualification. Owner is a
corporation duly organized, validly existing and in good standing under
the laws of Delaware, has the lawful power to engage in the business it
presently conducts and contemplates conducting, and is duly licensed or
qualified and in good standing as a corporation in each jurisdiction
wherein the nature of the business transacted by it makes such
licensing or qualification necessary.
24.2.2 Power and Authority. Owner has the power to
enter into this Agreement and to perform its obligations hereunder and
all such actions have been duly authorized by all necessary proceedings
on its part.
24.2.3 No Conflict. The execution, delivery and
performance of this Agreement will not conflict with, result in the
breach of, constitute a default under or accelerate performance
required by any of the terms of the organizational documents of Owner
or any Applicable Laws or any covenant, agreement, understanding,
decree or order to which Owner is a party or by which Owner or any of
its properties or assets is bound or affected.
24.2.4 Validity and Binding Effect. This Agreement
has been duly and validly executed and delivered by Owner. This
Agreement constitutes a
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legal, valid and binding obligation of Owner, enforceable in accordance
with its terms, except to the extent that its enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights of creditors generally or by general
principles of equity. No authorization, approval, exemption or consent
by any governmental or public body or authority (other than the
Applicable Permits listed in Appendix F hereto) is required in
connection with the authorization, execution, delivery and carrying out
of the terms of this Agreement.
24.2.5 Litigation. There are no actions, suits,
proceedings or investigations pending or, to the knowledge of Owner or
its officers, threatened against it at law or in equity before any
court or before any federal, state, municipal or other governmental
department, commission, board, agency or instrumentality whether or not
covered by insurance which individually or in the aggregate may result
in any materially adverse effect on the business, properties or assets
or the condition, financial or otherwise, of Owner or in any impairment
of Owner's ability to perform its obligations under this Agreement.
Neither Owner nor any of its officers has knowledge of any violation or
default with respect to any order, writ, injunction or any decree of
any court or any federal, commonwealth, state, municipal or other
governmental department, commission, board, agency or instrumentality
which may result in any such materially adverse effect or such
impairment.
24.2.6 Compliance with Laws. Owner has complied with
all Applicable Laws such that it has not been subject to any fines,
penalties, injunctive relief or criminal liabilities which in the
aggregate have materially affected or may materially affect the
business operations or financial condition of Owner.
24.2.7 Disclosure. No representation or warranty by
Owner contained herein or in any other document furnished by Owner to
Contractor contains or will contain any untrue statement of material
fact or omits or will omit to state a material fact necessary to make
such representation or warranty not misleading in light of the
circumstances under which it was made.
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ARTICLE 25
Miscellaneous
25.1 Past Due Amounts. Any amount owed to either Party
hereunder which is not paid by the owing Party within fifteen (15) days after
the date such amount is originally due under this Agreement shall accrue
interest each day such amount is not paid at the lesser of (a) an annual rate
equal to one percentage point above the rate quoted from time to time as the
prime rate for large commercial loans to creditworthy entities by the bank (or
such other bank as may be mutually agreed between the Parties) that acts as the
agent for the banks providing the senior construction financing for the
Facility, and (b) the maximum rate permitted by Applicable Laws.
25.2 Delay not Waiver. It is understood and agreed that any
delay, waiver or omission by Owner or Contractor to exercise any right or power
arising from any breach or default by Contractor or Owner in any of the terms,
provisions or covenants of this Agreement shall not be construed to be a waiver
by Owner or Contractor of any subsequent breach or default of the same or other
terms, provisions or covenants on the part of Contractor or Owner.
25.3 No Set-Off, Deduction or Counterclaim by Contractor. Any
amounts due from Contractor to Owner under this Agreement shall not be subject
to any reduction for any set-off, deduction, counterclaim or otherwise based
upon any claim against Owner. Contractor shall not assert any claim it may have
by reason of the Owner's default under this Agreement as a defense to
performance of its obligations under any other agreement with Owner, nor shall
Contractor assert any claim it may have by reason of Owner's default under any
other agreement with Contractor as a defense to performance of its obligations
under this Agreement.
25.4 Choice of Law. This Agreement shall in all respects be
governed by and construed in accordance with the laws of the State of New York,
including with respect to all matters of construction, validity and performance,
without giving effect to any choice of law rules thereof which may direct the
application of the laws of another jurisdiction.
25.5 Severability. In the event that any of the provisions, or
portions or applications thereof of this Agreement are held to be unenforceable
or invalid by any court of competent jurisdiction, Owner and Contractor shall
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negotiate an equitable adjustment in the provisions of this Agreement with a
view toward effecting the purpose of this Agreement, and the validity and
enforceability of the remaining provisions, or portions or applications thereof,
shall not be affected thereby.
25.6 Notice. Any notice required to be given by Owner to
Contractor hereunder respecting breach, consent to settlement of claims,
termination or indemnification, shall be in writing and shall be addressed to:
Siemens Westinghouse Power Corporation
4400 Alafaya Trail
Orlando, Florida 32826
Attention: Jeffrey Jacobsohn, Project Director
Telecopy #: (407) 281-5031
with a copy to:
Siemens Westinghouse Power Corporation
Mail Code 550
4400 Alafaya Trail
Orlando, Florida 32826
Attention: Law Department
Telecopy #: (407) 281-5034
Any notice required to be given by Contractor to Owner hereunder respecting
breach, consent to settlement of claims, termination or indemnification, shall
be in writing and shall be addressed to:
AES Ironwood, Inc.
829 Cumberland Street
Lebanon, PA 17042
Attention: Steve Dahm
Telecopy #: (717) 228-1271
with a copy to:
AES Ironwood, Inc.
1001 North 19th Street
Arlington, Virginia 22209
Attention: John Ruggirello
Telecopy #: (703) 528-4510
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All other notices required or permitted to be given by either Party hereunder
shall be in accordance with the requirements of the Project Procedures Manual.
25.6.1 Delivery. All notices under Section 25.6
hereof shall be delivered in person to the company above mentioned,
sent via certified mail with a return receipt requested in a securely
sealed envelope or sent via telecopy and shall be effective when
received at the address specified above. The Parties hereto, by like
notice in writing, may designate, from time to time, another address or
office to which notices may be given pursuant to this Agreement.
25.7 Section Headings. The Article and Section headings herein
have been inserted for convenience of reference only and shall not in any manner
affect the construction, meaning or effect of anything herein contained nor
govern the rights and liabilities of the Parties hereto.
25.8 Entire Agreement. This Agreement contains the entire
agreement between the Parties hereto and supersedes any and all prior written
and oral agreements, proposals, negotiations, understandings and representations
pertaining to the subject matter hereof.
25.9 Amendments. No amendments or modifications of this
Agreement shall be valid unless evidenced in writing and signed by a duly
authorized representative of the Party against which enforcement is sought.
25.10 Conflicting Provisions. In the event of any conflict,
variation or inconsistency between any provision of this Contract Document, as
it may be amended from time to time, and any other provision of this Agreement,
the provision of this Contract Document shall control.
25.11 No Third Party Rights. This Agreement and all rights
hereunder are intended for the sole benefit of the Parties and shall not imply
or create any rights on the part of, or obligations to, any other Person, except
as otherwise expressly provided herein with respect to the Financing Parties,
the Utility and the Indemnified Parties (as and to the extent so expressly
provided herein, if any, the "Third Party Beneficiaries").
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25.12 Owner's Obligations Non-Recourse. The Parties
acknowledge that Owner has entered into this Agreement entirely on its own
behalf, and in no manner on behalf of The AES Corporation and that Contractor
shall have no recourse against The AES Corporation (except as and to the extent
expressly provided under the AES Pre-Financial Closing Guaranty to be provided
by The AES Corporation pursuant to Section 5.12 hereof) or any of its affiliates
(other than Owner), partners, joint ventures, officers, directors, successors or
assigns for any reason.
25.13 Survival of Provisions. All provisions of this Agreement
which are expressly or by implication to come into or continue in force and
effect after the expiration or termination of this Agreement, including but not
limited to Articles 9, 10, 13 and 25.16 hereof, shall remain in effect and be
enforceable following such expiration or termination.
25.14 Title to the Project. Title to all materials, supplies,
equipment and machinery used in connection with the Services and which become,
or are scheduled to become, a part of the Project shall vest in Owner upon the
earlier of (i) the time at which Owner has made payment to Contractor for such
items and (ii) incorporation of such items into the Project at the Facility
Site. Title to water, soil, rock, gravel, sand, minerals, timber and any other
resources developed or obtained in the excavation or the performance by
Contractor of the Services or other work hereunder and the right to use said
items or dispose of the same is hereby expressly vested in and reserved by
Owner. Contractor shall not have any right, title or interest in or to said
resources. Title to construction equipment shall remain with Contractor at all
times.
25.15 Not used.
25.16 Transfer. In the event that Owner voluntarily sells or
transfers all or substantially all of its interests in and to the Facility
and/or this Agreement (excluding temporary transfers for storage or repair work
and permanent transfers for disposal) prior to the seventh anniversary of the
first to occur of Provisional Acceptance, Interim Acceptance or Final Acceptance
of the Facility or any earlier termination hereof, Owner shall require such
transferee to accept such transfer as being subject, with respect to the
Contractor and its Subcontractors, to the limitations of and protections against
liability afforded
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under this Agreement and shall use its reasonable efforts to obtain a written
acknowledgment to such effect from such transferee prior to any such transfer.
In the event of any involuntary sale or transfer by Owner of such interests
prior to said seventh anniversary (including without limitation any foreclosure
or sale in lieu thereof by the Financing Parties), Owner shall use its
reasonable efforts to have such transferee accept and acknowledge in writing
that such transfer is so subject to such limitations and protections with
respect to Contractor and its Subcontractors. All costs and expenses reasonably
incurred by Owner in connection with its performance of this Section 25.16
(including, without limitation, reasonable attorneys' fees and expenses incurred
by Owner and, to the extent Owner is required to bear such costs, the attorneys'
fees and expenses incurred by such prospective transferees) shall be promptly
reimbursed by Contractor within five (5) days of receipt of an invoice therefor
(together with reasonable supporting documentation).
25.17 Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute the same agreement.
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IN WITNESS WHEREOF, the Parties, intending to be legally
bound, have caused this Agreement to be executed by their duly authorized
signatories as of the date indicated below and to be effective as of the day and
year first above written.
AES IRONWOOD, INC.
By: /s/ Patricia L. Rollin
-----------------------------------
Name: Patricia L. Rollin
Title: Vice President
Date: Nov. 11, 1998
SIEMENS WESTINGHOUSE
POWER CORPORATION
By: /s/ John L. Gibson
-----------------------------------
Name: John L. Gibson
Title: New Generation Sales Manager
Date: Nov. 12, 1998
<PAGE>
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Proprietary Information
- --------------------------------------------------------------------------------
This proposal is being submitted by Siemens Westinghouse Power Corporation, a
Siemens Company, and therefore any reference contained herein to Westinghouse
should be interpreted as a reference to Siemens Westinghouse Power Corporation.
All information, however embodied, and all technical documents supplied by
Siemens Westinghouse Power Corporation shall remain the property of Siemens
Westinghouse Power Corporation and its successors, and your acceptance of it is
an acknowledgment of a confidential relationship. They are to be used solely for
the purpose for which furnished and are to be returned on request or destroyed
when no longer required for that purpose. No information however embodied herein
is to be reproduced, transmitted, disclosed, or used otherwise in whole or in
part without the written authorization of Siemens Westinghouse Power
Corporation, and its successors.
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<PAGE>
Table of Contents
I. GENERAL PLANT DESCRIPTION
a. Plant Description
b. Scope of Supply & Division of Responsibility
c. Plant Design Basis/Assumptions (Site Specific/Project Specific
Criteria)
d. Clarifications and Assumptions
e. Not Used
II. DESIGN BASIS OF PLANT
a. Codes and Standards
b. Westinghouse Reference Project Design Criteria - Structural
- Controls
- Mechanical
- Electrical
III. EXPECTED PERFORMANCE
IV. EQUIPMENT AND SYSTEM DESCRIPTIONS
a. Major Equipment
1. Combustion Turbine
o Combustion Turbine Description
o Combustion Turbine Auxiliaries
2. Heat Recovery Steam Generator (HRSG)
o HRSG and Accessories Description
o HRSG Technical Requirements
3. Steam Turbine
o Primary Turbine Inlet Features
o Combined High Pressure/Intermediate Pressure Turbine
o Double Flow Low Pressure Turbine
o Steam Turbine Auxiliaries
<PAGE>
4. Generator/Excitation
o WDR2000 Static Exciter
o Collector System Description
5. Wet Condenser
6. Cooling Tower
b. Mechanical Systems
Blowdown
Steam Drains
Steam System
Condenser Air Removal
Circulating Water
Auxiliary Cooling Water System
Condensate System
Feedwater System
Raw Water
Cycle Makeup Treatment
Cycle Makeup/Return
Compressed Air
Compressed Gas Storage
Fuel Gas System
Liquid Fuel System
Fire Protection
Wastewater Treatment
Chemical Treatment
Gas Compressor
c. Civil Engineering
d. Plant Electrical Systems
o Security System
e. Switchyard
f. Control System
g. Expected Sound Levels
<PAGE>
V. ATTACHMENTS
a. Drawings
o General Arrangement
o Flow Diagrams
o Electrical Diagrams
o Control System Diagram
o Water Balance Diagrams
b. Fuel Specifications
o Gas Fuel Specification
o Liquid Fuel Specification
c. Raw Water Analysis
d. Generator Curves
e. CT Inspection Intervals/ Equivalent Operating Hours
f. ECONOPAC Paint Specifications
g. Determination of Total Equivalent Operating Hours
<PAGE>
SIEMENS
- ------------
Westinghouse
CONTRACT APPENDIX A - SCOPE OF SERVICES
AES IRONWOOD
for the
2x1 501G Combined Cycle Turnkey Plant
FINAL ISSUE
October 30, 1998
Prepared by: DUPLICATE
NEG097321
Siemens Westinghouse Power Corporation CP98103
A Siemens Company
Orlando, Florida
<PAGE>
General Plant Description
-------------------------
=========================
<PAGE>
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General Plant Description
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GENERAL DESCRIPTION OF THE PLANT
The combined cycle power plant will consist of two W501G combustion turbines
coupled with two heat recovery steam generators and a single steam turbine and
will be designed to have a nominal net electrical generation capacity of
approximately 640 MW at an ambient dry bulb temperature of 92 degrees F.
Combustion turbines will primarily burn natural gas supplied via a pipeline with
provisions to burn tank stored distillate oil as a backup fuel. Each combustion
turbine will be coupled with a three pressure reheat heat recovery steam
generator which will generate steam to operate the steam turbine. Generators
from the two combustion turbines and the steam turbine will be connected to the
Owner supplied substation through individual generator step up transformers.
These transformers will raise the generated voltage to 230 kV.
MAJOR EQUIPMENT
This 640 MW nominal combined-cycle plant consists of the following major
equipment:
o Two (2) Westinghouse 501G Combustion Turbines with Hydrogen Cooled
Generators
o Two (2) Unfired, Three Pressure Level Reheat Heat Recovery Steam
Generators (HRSGs) with Stacks
o One (1) Westinghouse Multi-Cylinder Reheat Condensing Steam Turbine with
Hydrogen Cooled Generator
o One (1) Water Cooled Condenser using a Forced Draft Cooling Tower
o One (1) Integrated Plant Distributed Control System
o Balance of Plant Equipment consisting of Pumps, Transformers, Power
Electrics, etc.
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o 230 kV Switchyard
MAJOR CYCLE EQUIPMENT/SYSTEM DESCRIPTIONS
COMBUSTION TURBINE: Two Bearing, Axial Exhaust, Cold End Drive Turbine
Ambient air is drawn through the inlet air filtration and silencing system into
the compressor element of the combustion turbine where it is compressed to
approximately 19 atmospheres. Inlet air filtration is accomplished with a pad
type filter. The combustion turbine is designed to be fired with natural gas and
distillate oil fuels. Fuel is fired in the combustion section, after which the
hot gases expand through the turbine element. The combustion turbine is directly
connected to its hydrogen cooled generator. The combustion turbine has two
functions: (i) to produce electrical power through the directly connected
generator; and (ii) to supply hot gases to the heat recovery steam generator
(HRSG). Exhaust gases from the combustion turbine pass through the HRSG which
absorbs energy to generate steam. The gases will then exhaust into the
atmosphere through the stack. Plant exhaust gas emissions are controlled through
the use of a dry low NOx combustion system. Further NOx reduction will be
accomplished by the supply of the SCR system.
HRSG: Three pressure, Reheat, Natural Circulation with SCR System
The HRSG produces steam which drives the steam turbine. It is a horizontal gas
flow, natural circulation type heat recovery boiler which incorporates extended
fin tube construction. The Westinghouse combined cycle plant utilizes a three
pressure level reheat HRSG design. The high pressure (HP), intermediate pressure
(IP) and the low pressure (LP) sections contain economizer tube bundles, natural
circulation type evaporator tube bundles each with associated steam drum, and a
superheater tube bundle. High pressure, intermediate pressure and low pressure
feedwater is pumped through the economizer sections of the HRSG for optimized
performance. The HRSG is equipped with a selective catalytic reduction (SCR)
system to reduce the stack NOx emission levels. The HRSG is also equipped with a
spool section which could accommodate a future CO (carbon monoxide) catalyst (by
others).
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<PAGE>
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STEAM TURBINE: Two Cylinder, Reheat, Condensing Unit With High Efficiency Blades
The steam generated in the HRSG is supplied to the Multi-Cylinder, side exhaust
dual flow condensing steam turbine. HP steam is supplied directly to the steam
turbine inlet as main steam. IP steam is routed for transition cooling of the
combustion turbine and then joins the hot reheat steam which enters the steam
turbine through the IP turbine inlet. LP steam enters the steam turbine through
an induction port. Steam exhausts into a water cooled condenser upon exiting the
LP turbine. The steam turbine is directly connected by a rigid coupling to a
hydrogen cooled generator which produces electrical power.
100% STEAM TURBINE BYPASS SYSTEM:
The condenser is designed to accommodate the exhaust from the steam turbine plus
the miscellaneous drains from the steam system. The condenser is also designed
to allow 100% steam bypass of the steam turbine.
3x50% CONDENSATE PUMPS:
Condensate is pumped from the condenser hotwell by one of three 50% capacity
condensate pumps. The condensate then passes through the low temperature
economizer section in the HRSG prior to entering the LP steam drum.
1 x 100% BOILER FEEDPUMP WITH INTERSTAGE TAKEOFF:
One (1) 1 x 100% capacity HRSG feedwater pump (of interstage takeoff design) per
HRSG supplies feedwater to the HP and IP boiler sections of each respective
HRSG. The pump is electric motor driven and is located adjacent to the HRSG. The
pump takes suction from the HRSG LP drum which is located above the pump at an
elevation adequate to provide sufficient NPSH during all normal and transient
operating conditions.
COOLING TOWER:
The steam cycle ultimate heat sink is provided by a cooling tower. The cooling
tower transfers heat from the circulating cooling water by means of a mechanical
draft design.
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<PAGE>
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MANUAL ON/OFF LINE COMPRESSOR WATER WASH SYSTEM:
By virtue of this cycle arrangement, optimum power is generated at the most
economical energy cost, while maintaining the simplicity of the total plant
arrangement. An on and off line combustion turbine compressor water wash system
is provided to help maintain plant performance between maintenance outages.
FIRE PROTECTION:
Plant fire protection is provided by a ring header, hydrants and hose stations
supplied from the raw/fire water tank.
ELECTRICAL
Individual transformers
Synchronization using power circuit breaker
The combustion turbine generator and the steam turbine generator are each
connected to its own two-winding, oil filled step up transformer which increases
the voltage from the generator terminals to the interconnecting voltage at the
high side terminals. Synchronization and protection of the combustion turbine
generator and the steam turbine generator are achieved via power circuit
breakers in the switchyard. These circuit breakers isolate the power generating
station from the interconnecting system.
The combustion turbine generator and steam turbine generator are connected to
their step-up transformers via isolated phase bus duct.
Station auxiliary transformers
Two station auxiliary transformers will provide power from the switchyard to
plant auxiliary loads. A medium voltage switchgear bus will supply power to
medium voltage motors and to medium to low voltage transformers which feed low
voltage switchgear, motor control centers, and other loads.
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<PAGE>
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This plant does not have black start capability. Start-up of the plant is via
electrical backfeed through the station auxiliary transformer off the 230 kV
utility grid system.
INSTRUMENTATION AND CONTROL
The system provides operation, control, monitoring, data trending and logging
The Distributed Control System (DCS) is the principal operation and control
system for the plant. It is an on-line real time system that provides automatic
operation, control, monitoring, and data trending and logging of the plant
processes from the central control room.
The DCS continuously monitors the parameters of the plant process systems. The
monitored data is used by the DCS to determine whether the various processes are
operating correctly, to identify any alarm conditions to the plant operator, and
to generate operating and management reports.
Smooth control over operating range
The DCS automatically controls the operation of all process component systems to
provide smooth control over operating ranges. It also provides interactive
control stations to the control room operator. The operator utilizes the control
stations for process system operations including start-ups and shutdowns and
modification of operating parameter set points.
DCS provides for such things as: control of the combustion turbine, steam
turbine, heat recovery steam generator, and other systems, including steam and
combustion turbine generator load selection, fuel controls, active and reactive
load and voltage control, automatic synchronizing, HRSG steam temperature and
pressure control and monitoring; main steam pressure control and biasing, etc.
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FINAL ISSUE - OCTOBER 30, 1998
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SITE LAYOUT AND ARRANGEMENT OF EQUIPMENT
The overall site and building arrangement will be developed to optimize space
requirements while maintaining ample access for operation and maintenance
activities.
The combustion turbine generators, steam turbine generator, condenser and
associated auxiliaries are located indoors. The HRSG, and associated auxiliary
equipment are located outdoors.
A permanently installed overhead crane for the Combustion Turbine hall is
included. The crane is a 1-100tn/20tn, span 80' with 45' lift height, designed
to CMMA Class D.
Office Space
Ample operations, administrative and support facilities are provided. A central
control room provides a controlled atmosphere from which to monitor and control
plant functions. Plant computers and a programming office are located in the
control room. An office for plant management and a plant electrics room are also
provided.
On site bulk storage
On site bulk storage of critical materials is provided to permit continued
operation during certain component or system maintenance operations or material
supply interruptions.
The base design assumes that raw water will be supplied from the adjacent quarry
pit and the local municipal water system as a source for service, boiler makeup,
and fire water.
The fuel oil system consists of one (1 - 4,500,000 gal.) fixed roof fuel oil
storage tank on a ring wall foundation. Accessories include flame arrestor with
conservation vent, fuel oil metering skid and containment. Each tank will have a
foam fire suppression protection system. Tank design is per API 650 9th edition.
A demineralized/condensate water storage tank is provided to allow for 12 hours
of base load operation.
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Waste Water Disposal
Sanitary waste water streams are discharged directly to the on-site septic
system.
A zero discharge system (ZDS) shall be utilized for process waste streams.
Site access roads / fencing / lighting
Site access roads of gravel construction are provided as required to permit
normal operations, maintenance (including major equipment overhauls) and
delivery of bulk materials. Appropriate site lighting is provided. A fence is
provided around the perimeter of the plant site with a motorized gate at the
main plant entrance.
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<PAGE>
Scope of Supply and
Division of Responsibility
--------------------------------
================================
<PAGE>
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Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
I. 501G COMBUSTION TURBINE & Dry Low NOx Combustors;
AUXILIARIES Dual Fuel, Steam Cooled
Transitions, Indoor Installation
A. COMBUSTION TURBINE PACKAGE 2 W W W
Engine Assembly
Inlet Manifold
Exhaust Manifold
Insulation Blankets
Exhaust Bearing Tunnel, Fire Protection Dry chemical
Thermal Detector
Dry Chemical Storage Located outside of turbine enclosure
Manual Pull Stations Located on exhaust end of CT enclosure
at exits
Turbine-Generator Coupling Cover
Combustor Bypass Valves
B. GENERATOR PACKAGE 2 W W W 60 Hz, 16.0 kV, 0.9 pf lagging, 0.95 pf
leading at generator terminals
Hydrogen Cooled Generator
Hydrogen Coolers Water/Gas Heat Exchanger
Collector with housing
Neutral Tie Enclosure
Current Transformers
Neutral Grounding Cubicle
Grounding Transformer
Secondary Resistor
Line Side Termination
Current Transformers
Voltage Transformers
Surge Arresters
Surge Capacitors
Static Excitation System
Power Excitation Transformer
AC Disconnect
Power Electrics
Automatic Voltage Regulator
DC Bus
</TABLE>
W = SIEMENS Westinghouse Page 1 of 20
P = Purchaser
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
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Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Generator Seal Oil System Double flow seal oil system
Seal Oil Reservoir
Seal Oil Pumps
Seal Oil Filters
Seal Oil Coolers
Drain Regulator
Vapor Extractor /Oil Mist Eliminator
Seal Oil Defoaming Tank
Generator Auxiliary Control Enclosure
Generator Gas Supply System
Manifolds
Interconnecting Piping
CO2 Supply Leased bottle service through PA
Generator Gas Dryer
Bulk Hydrogen Gas Supply Leased hydrogen trailers to service all
three generators (CT #1, CT #2, ST)
through PA
C. WALK-IN TURBINE ENCLOSURE 2 W W W
Enclosure Ventilation System
Emergency Lighting Self-contained, 12 V DC
Fire Protection System FM-200
Thermal Detectors
Manual Pull Stations One at each exit
FM-200 Storage Bottles or Spheres
Alarm Horn
Combustible Gas Sensors
D. LUBE OIL SYSTEM 2 W W W
Main Lube Oil Pump (AC)
Emergency Lube Oil Pump (DC) with Starter
Auxiliary L.O. Pump (AC)
Bearing Pressure Regulating Valve
Lube Oil Temp Control Valve
Vapor Extractor/Mist Eliminator
Lube Oil Immersion Heater
Lube Oil Filter Dual full capacity filters with transfer
valve
Accumulators
Lube Oil Reservoir Carbon steel with oil resistant aluminum
paint
</TABLE>
W = SIEMENS Westinghouse Page 2 of 20
P = Purchaser
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
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Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
E. ELECTRICAL/CONTROL PACKAGE 2 W W W
Bedplate
Removable Floorplate Assembly
Enclosure
Motor Control Center, AC
Motor Control Center, DC
CT Gen. Protective Relay Panel
DC Power System 125 V DC
Battery With Rack
Battery Charger
DC Panelboard
Microprocessor Based Digital
Control System: Includes Redundant DPU
Control Function Automatic Generation Control (AGC)
Sequence Function
Alarm Function
Temperature Monitoring Function
Vibration Monitoring System Bently Nevada Series 3300
Power Supplies
Low NOx DPU Redundant DPU
Local Equipment Panel No local control
Air Conditioner 2 Per Electrical Package
Emergency Lighting Self Contained, 12 V DC
Fire Protection System FM-200 with Outdoor Alarm and Strobe
Thermal Detectors
Smoke Detectors
Manual Pull Stations One at each exit
Alarm Horn
Control Panel Monitors detection systems, initiates
discharge of agent, and controls alarms
F. FUEL GAS SYSTEM 2 W W W Purchaser to supply fuel gas at 450 psig at
interface point.
Gas Throttle Valves
Overspeed Trip Valve
Vent Valves
Filter/Separators Final polishing type for main and pilot
streams
Starting Pressure Regulating Valve
Instrumentation Panel
Main Pressure Control Valve
</TABLE>
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FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
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Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
G. FUEL OIL AND WATER INJECTION 2 W W W Dilutant may be steam in lieu of water,
SYSTEMS pending field testing verification
Fuel Oil Pump Skid
Pump & Motor
Suction Filter 5 micron dual filter with transfer valve
Valves
Relief
Bypass
Overspeed Trip
Water Injection Pump Skid
Pump and Motor
Suction Filter Simplex filter
Valves
Isolation
Return
Fuel Oil/Water Injection Skid
Control Panel
Flow Divider with speed sensor for flow measurement
Valves
F.O. Starting Throttle
F.O. Main Throttle
F.O. Isolation Throttle
F.O. Flow Divider Check
W.I. Throttle
W.I. Isolation
H. STARTING PACKAGE 2 W W W
Bedplate
Starting Motor (AC Electric Motor) 6600 Volt motor
Turning Gear & Clutch Assy. DC motor
Starting Clutch
Torque Converter
Charging Pump (Shaft Driven)
Magnetic Speed Pick-up
</TABLE>
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
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Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
I. COMBUSTION TURBINE PRE 2 W W W
ENGINEERED PIPE RACK AND
INTERCONNECTING PIPING
Cooling Air Piping
Lube Oil Supply and Drain Piping Stainless steel supply piping downstream
of filters. (Balance of lube oil piping -
carbon steel)
Compressor Water Wash Piping Between water wash pump skid and CT
Fuel Gas Piping Within enclosure
Liquid Fuel Piping Between F.O. pump skid and CT
Water Injection Piping Between W.I. pump skid and CT
Compressor Bleed Piping
HP Compressor Bleed Valve
LP Compressor Bleed Valve
Generator Seal Oil Piping
Control Oil Piping
Fire Protection Piping
Waste Drain Piping
Instrument Tubing
Pipe Insulation & Lagging
J. TURBINE & GENERATOR ACCESSORY 2 W W W
EQUIPMENT
Turbine Lube Oil Cooler (Simplex, oil/water plate type)
Turbine Rotor Air Cooler
Turbine Stage 2 Air Cooler
Turbine Exhaust Transition & Expansion
Joint Assembly
Turbine Inlet Filter 2-Stage Pad Type
Evaporative Cooler With sump and pump
Inlet Duct and Silencer Assembly For Indoor Installation
Control Oil System
Fuel Reservoir
Redundant Motor Driven Pumps
Redundant Filters
Fluid Polishing Unit
Cooler Water cooled
Compressor Water Wash System Skid mounted
Water Wash Pump
Detergent Tank
Foundation Leveling Wedges
Foundation Bolts
</TABLE>
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
- --------------------------------------------------------------------------------
Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
K. FUEL OIL FORWARDING SYSTEM 1 W W W
Fuel Forwarding Pump 2 x 100% (100% = both CT's running)
Interconnecting Piping and Wiring
Strainer
Fuel Oil Meters
L. ELECTRICAL INTERCONNECTING 2 W W W
MATERIAL
Cable and Conduit within Westinghouse
Supplied Packages/Skids
Cable between Westinghouse Supplied
Packages/Skids/Enclosures.
Above Grade Conduit System Between
Westinghouse Supplied Packages.
Cable, Conduit, and Trays for Power
Electrics
Underground Conduit
M. TOOLS & MAINTENANCE EQUIPMENT
Start-up Equipment Package: 2 W W -
Fuel & Lube Oil Filter Cartridges
Spark Plugs (1) & Cable
Cross Flame Tube (1)
Scanner Flame Detector (1)
Thermocouple Elements (15)
Vibration Probe
Misc. Nuts, Bolts, Fittings and
Balancing Plug
Maintenance Tools Package: 1 W W - One per site
Exhaust End - Guide Spindle (1)
Exhaust Bearing Removal Tool (1)
Inlet Bearing Removal Tool (1)
Blade Ring Removal Assy. (1)
Combustion Transition Alignment Tool
Guide Bolt (Compressor Cylinder) (4)
Guide Stud - Turbine Cylinder
Guide Stud - Blade Ring (2)
Bolt Heaters
Bolt Stretch Measuring Rods & Sleeves
Pyle National Connector special Tools
</TABLE>
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FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
- --------------------------------------------------------------------------------
Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Guide Stud - Exh. Cylinder
Guide Stud - Torque Tube
Sleeve - Balance Plug Guide (1)
Balance Plug Tool (Combustor
Spindle) (1)
Balance Plug Tool (Inlet Assembly) (1)
Pipe (Fab) (1)
Spring Compressor - Variable Vane (1)
Misc. Tools, Nuts & Bolts
Lifting Beam Assembly
Rotor Threading Equipment
Fuel Nozzle Maintenance Kit
Transition Alignment Tool
II. HEAT RECOVERY STEAM 2 W W W Three (3) pressure level, Reheat,
GENERATOR EQUIPMENT Natural Circulation
A. HEAT RECOVERY STEAM GENERATOR
Expansion Joint
Inlet Transition Ducting
HP, IP, LP Superheaters
Reheat Section
HP, IP, LP Evaporators
HP, IP, LP Economizers
HP, IP, LP Evaporator Drums
Internal Insulation and Liner
Stack 175 ft common stack with two separate
flues (Owner request)
Equipment Mounted Wiring & Conduit
Ladders and Platforms
Piping and Valves Integral to Equipment:
Vent, Drains, & Blowdown
Safety Valves
Valves for Vents, Drains, Blowdown, etc.
HRSG Equipment Mounted Instrumentation &
Controls
SCR with aqueous Ammonia System
Ammonia Storage (20% aqueous) 2x 10,000 gallon tanks
CO Spoolpiece (no CO catalyst provided)
CEM System:
Oxygen Analyzer
CO Analyzer
NOx Analyzer
Turbine Cooling Systems Rotor Air and Stage 2 Air Cooling
</TABLE>
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FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
- --------------------------------------------------------------------------------
Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
III. STEAM TURBINE & AUXILIARIES Two Case, Reheat
HP-IP/LP Double Flow (32.4"
Last Row Blades)
A STEAM TURBINE 1 W W W
Control and Protective Valve System
Main Steam Stop Valve
Main Steam Control Valves
Intercept Valve
Reheat Steam Stop Valve
Induction Stop Valve
Induction Control Valve
Valve Actuators and Servomotors
Safety Interlock System
Continuous Protection for following trips:
Overspeed Trip
Oil Pressure Trip
Oil Level Trip
Low Vacuum Trip
Remote Trip
Manual Trip
Standby AC Oil Pump Auto Start
Interlock System
Standby AC EH Fluid Pump Auto Start
Interlock System
Emergency Lubrication Oil Pump Auto
Start Interlock System
Turning Gear Interlock With lube oil system
Other Necessary Interlocking for
Turbine Operation
Turbine Drain System
Drain Valves Air operated
Interconnecting Piping between Turbine Carbon steel
& Valves
Exhaust Hood Spray System
Nozzles, Piping, & Pressure Switch Located on LP turbine casing
Control Valve Pneumatic operated, includes manual
bypass valve and spray pressure controller
Turning Gear
Manual Engaging and Cranking Includes cranking device
Zero-Speed Sensing Device
Auto Engage/Dis-engage On turbine shutdown and start-up
</TABLE>
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
- --------------------------------------------------------------------------------
Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Supervisory Monitor & Instruments
Non-Contacting Probes w/ Terminal Boxes Turbine mounted
Probe Drivers and Calibrated Co-Axial
Cables
Vibration Monitor
Vacuum Breaker Valve
Other Turbine Instrumentation As required for operation and monitoring
the steam turbine
Additional Protective Devices:
Turbine Exhaust Casing Rupture
Diaphragm
Exhaust Casing Temperature Alarm
Thermocouple
Rotor Grounding Device
Rigid Coupling Between turbine and generator
Basket Tip Pressure Taps On LP exhaust hood
B. STEAM TURBINE GENERATOR 1 W W W 60 Hz, 16 kV, 0.9 pf lagging,
0.95 leading at the generator terminals
Hydrogen Cooled Generator
Hydrogen Coolers Water/Gas Heat Exchanger
Collector With Housing
Neutral Tie Enclosure
Current Transformers
Neutral Grounding Cubicle
Grounding Transformer
Secondary Resistor
Line Side Termination
Current Transformers
Voltage Transformers
Surge Arresters
Surge Capacitors
Static Excitation System
Power Excitation Transformer
AC Disconnect
Power Electrics
Automatic Voltage Regulator
DC Bus
Generator Seal Oil System Double flow seal oil system
Seal Oil Reservoir
Seal Oil Pumps
Seal Oil Filters
Seal Oil Coolers
Drain Regulator
Vapor Extractor /Oil Mist Eliminator
</TABLE>
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
- --------------------------------------------------------------------------------
Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Seal Oil Defoaming Tank
Generator Auxiliary Control Enclosure
Generator Gas Supply System
Manifolds
Interconnecting Piping
CO2 Supply Leased bottle service through PA
Generator Gas Dryer
Bulk Hydrogen Gas Supply Leased hydrogen trailer to service all
three generators (CT #1, CT #2, ST)
through PA
C. STEAM TURBINE AUXILIARIES 1 W W W
Lube Oil Supply System
Oil Reservoir
Main Oil Pump & Motor AC motor driven
Standby Oil Pump & Motor 100%, AC motor driven
Emergency Oil Pump DC motor driven
High and Low Level Alarm/Trip Device
Vapor Extractor Motor operated
Oil Level Gauge
Oil Return Connection
Man-Hole & Cleanout Covers
Oil Fill and Drain Connections
Lube Oil Cooler Simplex plate type
In-line Lube Oil Filters
Oil Purifier Vacuum dehydration type
Oil Pressure Regulating Valve
Lube Oil Piping
Supply & Drain Lines
DC Motor Starter For emergency oil pump
High Pressure Hydraulic Fluid Supply
System
Fluid Reservoir
Fluid Supply System
Variable Displacement Pumps Two (2), AC motor driven
Suction Drainers and Pump Discharge
Filters
Relief Valves
Check Valves
Heat Exchangers Two (2), Full capacity
Gauges, Pressure Switches, &
Thermometers
Fluid Conditioning Unit
Hydraulic High & Low Pressure Accumulators
Interlocks & Alarms
</TABLE>
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
- --------------------------------------------------------------------------------
Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interconnecting Piping & Stainless
Steel Tubing & Manifolds
Fluid Transfer Pump
Gland Sealing System
Steam Sealed Glands
Gland Steam Supply & Spillover Control
Valves Skid mounted
Seal Steam Line Safety Valve Skid mounted
Rupture Disc Skid mounted
Shell & Tube Gland Steam Condenser SS shell and tube
Interconnecting Piping Carbon steel
LP Gland Steam Desuperheater
Startup Spares ST-G
Special Tools
Lifting Device and rotor lifting guide For turbine casing and rotor
Special Spanners and Wrenches
Depth Micrometer With rod and sleeve for bolt tightening
Bolt Heater For casing bolts
Miscellaneous Auxiliaries
Shims, Leveling Wedges, Seating,
& Soleplates To set and align unit
Control Piping & Wiring
Turbine Enclosure Indoor Design Non-Acoustic
Heat Retention Insulation & Lagging
IV. BALANCE OF PLANT SYSTEMS
A. STEAM SYSTEM 1 W W W
HP Superheat Steam Piping and Valves
IP Superheat Steam Piping and Valves
LP Superheat Steam Piping and Valves
Cold Reheat Steam Piping and Valves
Hot Reheat Steam Piping and Valves
Steam By-pass Piping & Valves
Steam Atemperators
LP Drum Pegging Steam
Transition Steam Piping & Valves
B. CONDENSATE SYSTEM 1 W W W
Water Cooled Condenser Side Exhaust, Titanium tubes
- Condenser Assembly
- Hotwell
- Water Boxes
</TABLE>
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
- --------------------------------------------------------------------------------
Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- Expansion Joint
- Tubes & Tube Sheets and Tube Support
Plates
- Instruments
Recirculation Control Valves
Steam Jet Air Ejector & Silencer 2 x 100%, 2 stage air ejectors
Holding Air Ejector Skid
- Holding Air Ejectors
- Inter/After Condenser Shell & tube
Condensate Pumps 3 x 50%, vertical can turbine type, AC motor
Interconnecting Piping and Valves
C. FEEDWATER SYSTEM 1 W W W
Boiler Feed Pumps 1 x 100% for each HRSG, multistage
centrifugal, AC motor driven
Recirculation Control Valves
Interconnecting Piping and Valves
D. COOLING WATER SYSTEM 1 W W W
Cooling Tower Evaporative type
Fill & Fill Support
Motors/Piping
Circulating Water Pumps 2 x 50%
Circulating Water Chemical Feed System 1 W W W Part of zero liquid discharge system.
E. AUXILIARY COOLING SYSTEM Closed System
Auxiliary Cooling Pumps 2 x 100%
Heat Exchangers 2 x 100% with stainless plates
Pressure Regulator Valve
Piping
F. FUEL GAS SUPPLY SYSTEM 1 W W W Purchaser to supply fuel gas at a minimum of
450 psig at plant boundary
Isolation and Bypass Valves
Plant Knockout Drum
Plant Filter Separator
Fuel Gas Metering Runs One per combustion turbine for flow
measurement. Totalizing to be done by others.
Fuel Gas Compressors 3 x 50% compressors
Fuel Gas Heater
</TABLE>
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
- --------------------------------------------------------------------------------
Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
G. FUEL OIL SYSTEM 1 W W W
Fuel Oil Unloading Station 2x duplex stations
Fuel Oil Unloading Pumps 3 x 500 gpm
Unloading Totalizing Meter
Fuel Oil Storage 4,500,000 gallons tank with connections for
Buyer's sidestream oil purifier (for future)
H. PLANT COMPRESSED AIR SYSTEM 1 W W W
Air Compressor 2 x 100%
Air Silencer
Air Receivers
Instrument air dryer
- Prefilter and After Filter
- Coalescing Filter
Piping and Valves
I. WATER TREATMENT SYSTEM 1 W W W Raw water from quarry and Publicly Owned
Treatment Works (POTW).
Water Injection forwarding pumps 2 x 100%
Raw water forwarding pumps 2 x 100% (1,500 gpm each) floating type for
quarry water
Raw / Fire Water Storage Storage tank 625,000 gallons
Demin System Water treatment for operation on oil fuel may
come from demineralizer trailers provided by
Owner, subject to finalization of zero
Discharge System selected by Owner
Condensate/Demin Storage Tank 237,000 gallons
Zero Liquid Discharge System Scope and redundancy similar to the RCC
proposal dated August 7, 1998 50 gpm of
deionized water. (Vendor to be selected by
Contractor)
sidestream softener and filters
reverse osmosis unit
brine concentrator/ crystallizer
sludge dewatering
treatment chemicals for all systems 1 P P P Option for Siemens Westinghouse to provide
through PA
</TABLE>
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
- --------------------------------------------------------------------------------
Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J. FIRE PROTECTION SYSTEM 1 W W W
Alarms
Sprinkler Systems Nominated buildings & cooling tower
FM200 For control room
Extinguishers Portable
Fire Loop
Fire Pump & Jockey Pump Motor driven
Fire Diesel Pump
Fuel Oil Storage Tank Foam System
Pumping Unloading System Deluge Type System
Generator Stepup Transformers Spatial separation is adequate so that fire
walls are not required. Fire wall option is
provided in Appendix O.
K. CHEMICAL FEED SYSTEM 1 W W W Tote Bin System
L. SAMPLING SYSTEM 1 W W W
Water Sampling System
Sample racks
Sample coolers
Sample analyzers pH, conductivity, sodium and dissolved O(2)
Sample sink
Sample piping
M. BLOWDOWN SYSTEM 1 W W W
Blowdown tank for HRSG
HRSG Drain Sump (1) per HRSG
HRSG Drain Sump Pumps As required
Interconnecting piping between HRSG and
blowdown tank
Piping from blowdown tank to circulating
water system
N. WASTE WATER SYSTEM 1 W W W
Oil/Water Separator
Piping and Valves
Chemical Waste Collection/Neutralization
System May be part of zero liquid discharge system.
False Start Oil Drain Tanks 2 1500 gallon under ground tanks, one per CT
</TABLE>
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
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Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
O. RETENTION POND 1 W W W For stormwater collection
Retention Pond with 2x200 GPM Water is pumped to the cooling tower
Recirculation Pumps
V. 230 kV SWITCHYARD 1 W W W
Steel Structures
GSU Transformer Bus 3
SAT Transformer Bus 2
Transmission Line Interface 2
Equipment Support Stands 1 (1) Lot
Aluminum Bus w/Insulators and Support 1 (1) Lot
Stands
Surge Arresters 6
Disconnect Switch 9
Capacitive VT 12
Power Circuit Breaker 7 242 kV, SF-6 dead tank breakers, 5 @ 1200A,
2 @ 2000A, 40 kA
Switchyard Protective Relays 1 (1) Lot
Switchyard AC and DC Distribution
Transmission Line Protection/Metering
Primary Protection Scheme 2 P P P Housed in switchyard control building
Backup Protection Scheme 2 P P P Provided by Utility. Housed in switchyard
control building
Revenue Metering Units (VTs & CTs) 6 W W W
Revenue Metering 1 W W W
Switchyard Metering 1 W W W
Remote Terminal Units (RTU's) 2 P P P Provide for T/D and Energy Centers
Housed in switchyard control building
VI. PLANT ELECTRICS W W W
CTG Isolated Phase Bus 2
STG Isolated Phase Bus 1
Generator Step-Up Transformer 3 16 - 230 kV (2 winding);
Station Auxiliary Transformers 2 230 - 6.9 kV, 15/20 MVA
6900 V Bus or Cable 2 Between SAT and MV switchgear
6900 Volt AC Switchgear & Motor Controller lot
</TABLE>
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
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Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Plant Auxiliary Transformers lot 6900 - 480 V
Plant Secondary Unit Substation 1 6900 - 480 V, Double Ended
480 Volt AC MCC's for BOP For other than combustion turbine loads
Protective Relay Panels
Steam Turbine Generator
Plant Transformer Protection
Uninterruptible Power Supply 120 VAC output
Plant Station Battery 125 VDC
Battery Charger Redundant chargers
Interconnecting Cabling, Power and Control
Electrical Interconnections
VII. PLANT CONTROLS 1 W W W Siemens Westinghouse reserves the right to
supply controls manufactured by Emerson
(formerly Westinghouse PCD) or by Siemens.
Plant Control System Located in the central control room
Operator's Consoles with Dual CRTs, Two (2)
Keyboard, & Printer
Engineer's Console with Dual CRTs, One (1)
Keyboard, & Printer
Historical Storage & Retrieval/Logger One (1)
with CRT & Printer
Steam Turbine Level 1+ DEH
Steam Turbine DPU (1), Redundant
Steam Turbine Auxiliaries DPU & I/O
Cabinet (1), Redundant
Steam Turbine Supervisory & Emergency
Trip System Cabinet
BOP DPUs Two (2), Redundant
HRSG DPUs Four (4), Redundant
Switchyard DPU (No local control) One (1), Redundant
Automatic Generation Control (AGC)
VIII. CIVIL WORK
Site Survey P P P Already completed
Sub-Soil Investigation W W W Already completed
Site Leveling W W W
Excavation for Foundations, Pipes, Roads, W W W
Cabling & Grounding Grid
Backfill
Finish Grading
Foundations for all Equipment
</TABLE>
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
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Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
IX. STRUCTURES W W W
Surface Drainage Drainage ditches and SWALES
Sanitary Waste Disposal Septic tank
Cathodic Protection If required
Below Grade Electrical Raceway Includes Conduit, Duct Bank, Trenches, etc.
Generation Building 80' x 363' x 70' High Bay, 71' x 363' x 45'
Low Bay
Switchyard Control Building
Administration Building
Computer &Control Room, Building
Combined Maintenance & Warehouse Building Attached to generation building
Water Treatment Building
Cooling Tower Chemical Feed Single story
Fire Pump Enclosure
Electrical Building If required
Overhead service crane 1-100tn/20tn, 80' span, 45' lift, CMMA
Class D design
X. ADDITIONAL PLANT ITEMS
Service Piping Systems: W W W
Fuel Gas To fuel gas piping assembly at turbine
enclosure
Fuel Oil
Instrument Air
Raw Water Purchaser to pipe water from the POTW
system and potable water to the plant
boundary. Westinghouse to pipe the quarry
water to the plant site.
Demineralized Water
Vents
Drains
Potable Water
Fencing & Gate 8' Chainlink with one motorized gate
Plant Lighting
Communication System Paging system within plant
Cable, Conduit and Tray Systems
Electrical Consumables Tie-wraps, tape, misc. bolts, nuts, washers.
</TABLE>
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
- --------------------------------------------------------------------------------
Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
XI. OTHER SERVICES
A. Plant Engineering W
B Transportation W Equipment delivered to site
C Complete off loading, storage, erection W
and installation of all Westinghouse
supplied equipment and material
D. Furnished Office Space W For up to 10 Owner's people in the field and
(with temporary utilities) up to 5 Owner's people in home office.
E. Provision of First Aid & Medical W First Aid will be administered by a trained
Services - employee of the Contractor, in conjunction
with local ambulance, paramedic and
hospital employees.
F. Provision and Distribution of Electric W For construction purposes only.
Power for Lighting, Heating and others
required
G. Water Facility for Drinking, Sanitary & W
other required
H. Maintaining & Guarding all Facilities W During Westinghouse construction period only
Equipment & Materials
I. Mobile Crane(s) W During construction only
J. Technical Field Assistance for W
Installation, Start-up and Check-up
K. Site Organization
Resident Field Construction Manager W
Supervision & Manpower for Erection W
Works & Commissioning W
Test Operation & Trial Operation W
Plant Start-up Engineering W
Plant Operators P
L. Overall Progress & Construction Schedule; W
overall Planning, Coordination & Schedule
Control
</TABLE>
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
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Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
M. Worker's Compensation and Employer's
Liability W
N. Permanent Facility Permits and Licensing P Licensing support available from
Westinghouse on a per diem basis
O. Consumable Material for Erection Works: W
Flushing Oil, Oxygen, Acetylene, Propane,
& Argon Gas with Cylinder for Welding &
Annealing, as required
P. Not used
Q. Finish & Touch up Paint & Painting for all W
Equipment
R. Instruction Manuals and Plant W 10 Copies plus one electronic copy of the
Documentation Westinghouse content
S. Operation & Maintenance P Available as an option
T. Classroom Training P Available as an option (see Appendix O)
CT, ST, & BOP Familiarization On-site for 15 students
CT, ST, & BOP Maintenance On-site for 15 students
CT, ST, & BOP Operations On-site for 15 students
Control System Off-site for 8 students
U. Construction Equipment, Tools & Aids W
including the following:
Cement Mixers, Loaders, Trucks, Cranes
of varying capacities, Trenchers, Pipe
Wrapping & Laying Equipment, Power
Generators, Air Compressors, Welders,
Drilling Equipment, Pipe Working
Facilities & all Hand Tools required for
completing all phases of the work under
the Contract
V. Performance Testing W
W. Emission and Acoustical Testing W
X. Recommended Spare Parts P Available as an option
Y. All Risk Builder's Risk Insurance W
</TABLE>
W = SIEMENS Westinghouse Page 19 of 20
P = Purchaser
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
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Scope of Supply and Division of Responsibility
AES Ironwood - 2x1 501G Combined Cycle, Turnkey
<TABLE>
<CAPTION>
ITEM DESCRIPTION Quantity Design Supply Erection REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Z. Construction Permits W
AA. Temporary Construction Power W
BB. Construction Water P Westinghouse to provide quarry water
pumps and piping early in the construction
time period. Buyer to arrange for
construction water to be provided at no cost
to Westinghouse.
CC. Fire Water P Same remark as for section BB. above
DD. Gravel Road(s) W Within Plant Boundary (See Appendix O for
asphalt option)
EE. Temporary Construction Staging Area W Within Plant Boundary
FF. Commissioning & Startup Energy and Power P Up to 12 million KWH
Cost
</TABLE>
W = SIEMENS Westinghouse Page 20 of 20
P = Purchaser
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Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
Plant Design Basis/Assumptions
------------------------------
==============================
<PAGE>
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Plant Design Basis/Assumptions
- --------------------------------------------------------------------------------
The plant is designed for base load and/or cyclic operation, i.e. the plant is
capable of startup and shutdown on a dispatchable basis. The plant is configured
as a 2 x 1 combined cycle facility (two (2) combustion turbines and one (1)
steam turbine). The plant can be operated at various part load conditions and
can function with one combustion turbine out of service. The design and supply
of the systems and equipment described in this agreement are based on the
following:
SITE CONDITIONS
Elevation of plant site - The base design assumes an elevation of approximately
500 feet.
Climate - The ambient dry bulb temperature range is -20 degrees F to 105 degrees
F with a relative humidity range of 5% to 100%.
Wind Loading - The design basis wind speed will be 90 miles per hour based on
ASCE 7-95, Exposure C, with an importance factor of 1.15 and Kzt=1.00. This
design wind speed will be used to determine wind loads for all structures.
Seismology - The plant site will be designed to resist earthquake forces in
accordance with ASCE 7-95 requirements assuming:
Effective Peak Velocity-Related Acceleration, Av = 0.11, Aa = 0.11
Category III (Non-essential)
Seismic Performance Category: C
Soil Profile Type "D"
Snow Loading - Ground snow loading is based upon 30 psf maximum (Ce=1.0).
Rainfall - Design basis is for 5 inches per hour per 25 year, 24 hour event.
Frostline - Assumed to be at 30 inches.
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PLANT LAYOUT
Plant Layout - The layout has been designed for a 2 x 1 combined cycle plant
layout around the Westinghouse 501G combustion turbine frame.
Buildings - An administration building, generation building, and water treatment
building are provided. Other buildings/structures are specified per the Scope Of
Supply section.
Enclosures - Combustion turbine and steam turbine equipment is located indoors
and as such will not require weatherproof enclosures.
MECHANICAL
Fuel - The Owner will provide all fuels (natural gas and distillate oil)
required for start-up, performance testing and plant operation. Fuels should be
in accordance with the standard Westinghouse fuel specifications as specified
within this Contract. Westinghouse will distribute fuel (within plant boundary)
from a single Owner connection point at the plant boundary. The natural gas line
is assumed to be able to supply a minimum of 450 psig at the plant boundary.
Westinghouse will provide gas compression to raise the natural gas pressure to
the required levels for the 501G dry low NOx combustion system. All fuel
metering from the gas supplier is assumed to be included in the Owner's scope of
work. Fuel oil unloading, storage and distribution is included in the base plant
design. First fills of the liquid fuel tank(s) are provided by the Owner.
Raw Water Analysis - Raw Water Analysis is assumed to meet the requirements in
Section V, tab c.
It is assumed that no settling pond is required.
Combustion Turbine Water Injection Quality Requirements - The combined total
quantity of elements in fuel, water and air must not exceed the levels in the
latest Siemens Westinghouse Fuel Specification in this Appendix A.
Oxygen (as O(2) saturated water) 2-9*
pH 7.5-8.0
Approximate Total Dissolved Solids 90
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WASTEWATER DISCHARGE
A zero liquid discharge system will be provided to remove the subsequent
wastewater discharge from the site.
ELECTRICAL
Interconnect Voltage - The base design interconnection voltage is 230 kV. The
scope of supply ends at the takeoff tower ("Interconnection Point").
Power Factor Rating - The basis for the design of the generator, transformers,
ISO-phase bus duct, and associated power electrics is based upon a leading power
factor of 0.95 and a lagging power factor of 0.90 at the generator terminals.
ENVIRONMENTAL
Sound Level - The expected sound levels are located in Section IV, tab g.
WORK NOT INCLUDED IN, CONTRACTORS SCOPE
CO Catalyst - A CO spool section will be included in the HRSG's but no catalyst
is provided.
Operational Spare Parts
Extraordinary Transportation Considerations - Bridge strengthening, highway road
surface work, movement of structures, special fees, etc.
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<PAGE>
Clarifications & Assumptions
----------------------------
============================
<PAGE>
Ironwood
2X1 501G Combined Cycle Project
Clarifications, Exceptions & Assumptions
10/30/98 Revision
- --------------------------------------------------------------------------------
I. RAW WATER SUPPLY
1. Raw water supply from the Pennsy Quarry will be supplied from 2
floating pumps located in the Pennsy East-Northeast pond. Total
rise/fall of water based on 30 feet.
2. Raw water piping (PVC, PE or similar product) will be routed on the
Prescott property along Prescott Road to the plant entrance drive
where it will follow the plant road as shown on the Owner's drawing
Project -1-1718.01, Sheet 1,2,3,4 of 11. R-O-W and permit will be
provided by Owner. Water and electrical supply crossing Prescott
Road will be jack/bored (assume no rock).
3. No prefiltering or pretreatment of the water supply to the plant is
included.
4. Installation of electrical duct bank and pipeline work for the
Pennsy Quarry raw water supply line is based on the coordination of
work simultaneously with the Prescott Utility road work upgrade
which will be done by others.
5. POTW utility raw water line tie in will be at the site boundary.
6. The contractor's schedule is based on installation of the Pennsy
Quarry pond pumps at a time to utilize the pumps for supplying
construction water. Construction water is provided at no cost to the
Contractor.
II. BUILDINGS (Note: The buildings have been amply sized to shelter Contractor
supplied equipment. Any enlargements requested by Owner shall be to Owner's
account.)
1. The water treatment building will be a pre-engineered structure.
Page 1 of 7 AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
Ironwood - 2x1 501G CC
Clarifications, Exceptions & Assumptions
2. The Control Room will be approximately 1110 SF, pre-engineered
structure attached to the Generation building.
3. The Generation building is based on a high bay of 80' x 353' x 70'H
(peak). Low bay will be 71' x 353' x 45'H (eave).
4. The Administration building will be a 2400 SF prefabricated
structure. Contractor proposes use of this building for storage
and/or offices during construction. Contractor will provide
beneficial occupancy of the office space to Owner, 12 months prior
to the scheduled Commercial Operation date.
5. A combination shop/warehouse 50' x 90' will be an attached
pre-engineered structure to the Generation building. Contractor to
give Owner the building eight (8) months prior to scheduled
Commercial Operation.
6. The cooling tower chemical and electrical building will be a single
story pre-engineered structure.
7. Electrical Motor Control Center servicing the Generation Building
and the Water Treatment building will be an attached structure.
8. One single story fuel oil unloading and forwarding pumphouse is
included.
9. A concrete block gas compressor building is included.
III. EQUIPMENT AND FUEL UNLOADING
1. Costs for off loading equipment at the site rail spur and
transporting at the site has been included. All major components
will be delivered via the new rail siding, provided by Owner, as
required to meet the construction schedule, but not earlier than 34
weeks following the full Notice to Proceed.
2. Fuel unloading is based on truck delivery only
Page 2 of 7 AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
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Ironwood - 2x1 501G CC
Clarifications, Exceptions & Assumptions
IV. PLANT EFFLUENTS
1. Separate potable water supply and sanitary septic tank drain field
systems are included for the control room/shop and for the
administration building. Septic system must be installed on soil
that is undisturbed.
2. Retention pond emergency overflow drain line will be directed to the
Pennsy pond. We have not included permitting or ROW for this line.
The recirculating pumps (2x200 GPM vertical pump) will forward the
retention pond water to cooling tower.
3. No monitoring of retention pond effluent is included.
4. Effluent water collected in the retention pond will be returned to
the cooling tower basin. No treatment or filtration is included. If
water quality of the effluent stream is deemed unsuitable for
cooling tower use, the effluent will be re-directed to the outflow
to the Pennsy Quarry with no further treatment.
5. Wetland and environmental impact fees and related costs shall be
borne by the Owner.
6. The Plant area storm water drainage via swale and site grading is
directed to a retention pond on site. Storm runoff from the entrance
road will be directed to the Prescott Road swales via swale and
grading only.
V. FUEL; STORAGE, UNLOADING AND DELIVERY
1. The fuel oil system storage tank will be double wall, 4,500,000
gallon storage tank. Tank is based on API 650 9th edition double
wall with leak detection. The truck unloading facility is based on
unloading 4 tanker trucks simultaneously. The fuel oil tank and the
fuel oil forwarding system shall be unheated. The fuel oil piping on
the Econopacs shall be electrically heat traced
2. The natural gas line tie-in will be made within 10 lf of new gas
compressor building. Line from gas source to tie-in point will be by
Owner.
Page 3 of 7 AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
Ironwood - 2x1 501G CC
Clarifications, Exceptions & Assumptions
VI. PLANT ENTRANCE ROADS
1. Entrance roadway clearing and leveling is included as shown on the
following drawings. No demolition of the existing warehouse is
included.
o Project-1-1718.001, DWG 1, 2, 3, 4 of 4 dated 12/31/97
(Prescott Road)
o Project-1-17118.001, DWG 1, 2, of 2 dated 12/31/97(Access
Road)
2. Initial placing and testing of roads will be based on H20 loading.
Surface will be gravel for internal plant roads and asphalt for the
entrance road.
3. Area adjacent to site (approximately 7 acres), on Pennsey property,
towards Prescott Road, may be available and utilized for
construction laydown and craft/supervision parking at no cost to the
Contractor.
VII. ELECTRICAL/INSTRUMENTATION
1. Nominal voltage levels are as follows:
o Switchyard voltage: 230 kV
o Generator voltage: 16 kV
o Auxiliary medium voltage: 6900 V
o Auxiliary low voltage: 480 V
o Lighting/utilization voltage: 240 Vac, 208 Vac, 120 Vac
o Control voltage: 120 Vac, 125 Vdc
2. Motors equal to or larger than 250 hp will be rated 6600 V (except
for the 250 HP water injection pump motors, which shall be 460 V)
and will be served from the 6900 V bus. 6600 V motors smaller than
8000 hp will be served from fused contactors designed specifically
for motor control and protection. Motors 8000 hp and larger will be
served from vacuum switchgear circuit breakers.
Page 4 of 7 AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
Ironwood - 2x1 501G CC
Clarifications, Exceptions & Assumptions
3. Three-phase motors smaller than 250 hp will be rated 460 V and will
be served from 480 V motor control centers.
4. A redundant distributed processor type control system has been
provided. All automatic control will be via man-machine interface in
the central control room. Local operator control consoles are not
provided at either Econopac, or at the steam turbine, or in the
switchyard. Vendor supplied PLC's for the vendor equipment will be
utilized.
5. No special provisions have been included for abnormal electric
utility operating conditions (e.g.: no power system stabilizers, or
high ceiling voltages have been included in the generator voltage
regulator designs). Special switchyard underfrequency relay (device
81U) settings will be provided to accommodate PPA requirements
(Appendix 3, page IV.2 . paragraph B.3.).
6. Electrical cost includes the supply and installation of a 5 kV
transformer and 5 kV starter for 2 - 450 hp raw water pumps located
approximately 4000 ft away from the main plant. Direct power feed is
to be derived from the plant's 5 kV distribution line which will run
underground from the plant to the pump local starting equipment.
7. A 230 kV, conventional, open-air, radial switchyard design with two
outgoing transmission circuits is proposed. Dead tank, SF-6 power
circuit breakers are provided. The available symmetrical fault duty
on the 230 kV bus is assumed to be less than 40 kA.
8. The 230 kV switchyard includes all civil works such as fencing,
switchyard gravel, trenching, duct banks, manholes, steel
structures, and foundation. Electrical scope includes the supply and
installation of grounding systems, buswork and fittings, wire and
cable, conduit system, static pole and shield wire and lighting
fixtures. Switchyard testing includes functional tests and
calibration of contractor supplied switchyard protective relays.
Installation of the following items have also been included: 230 kV
circuit breakers, 230 kV disconnect switches, CVT, and lightning
arresters.
9. Options for switchyard underfrequency (device 81U) and
under/overvoltage (device 27/59) relays have been provided to
accommodate PPA requirements. An option for utility revenue meters
has been provided based on the use of microprocessor based
multi-function metering devices. Both options are included in
Section A, Base Bid Scope Changes, of Appendix O.
Page 5 of 7 AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
Ironwood - 2x1 501G CC
Clarifications, Exceptions & Assumptions
10. Contractor's electrical scope of supply terminates at the takeoff
tower located on GPU's side of the 230 kV switchyard. The two 230 kV
transmission circuits will be terminated at the takeoff tower by the
utility. The design and construction of the 230 kV transmission
lines are the responsibility of the utility and are not included in
Westinghouse's offer.
11. Grounding grid within the plant boundary is based on a maximum
resistivity of 5000 ohm-centimeters. The geotechnical investigation
results reveal that the soil resistivity is 21,000 ohm-centimeters.
The cost impact, if any, will be known following the final design.
12. Cathodic protection, by means of sacrificial anodes, for specific
equipment, underground gas, and fuel oil lines within the plant
boundary have been included.
13. Contractor has provided an option for supplying and installing two
sets of metering units (combination voltage transformer and current
transformer) for the utility's use. One set will be provided on each
of the plant's outgoing 230 kV transmission circuits. Westinghouse
has provided an option for primary utility revenue meters on each of
the two outgoing transmission circuits and back-up revenue meters on
each of the 230 kV circuits into the plant facility. Both options
are included in Section A, Base Bid Scope Changes, of Appendix O.
14. Empty conduits (within pull strings) will be provided for the
administration building. Eighteen (18) telephone 2" x4" junction
boxes will be provided. The Owner will provide a PABX, telephones,
telephone jacks and wiring based on his telephone requirements.
15. Contractor will provide a GAI-TRONICS type or equal paging system
consisting of 14 handsets and 3 desksets including raceways and
wiring.
16. A plant entrance camera is included. Cameras will have tilt, pan,
and zoom, and will be mounted to the entrance guard house. The
monitoring station will be located in the control room.
17. Remote terminal units (RTUs) for interfacing with the
Transmission/Distribution Center and the Energy Center will be
designed, supplied and installed by others.
18. GPU will design, supply, and install the protective relay
panelboards for the two outgoing 230 kV transmission lines.
Page 6 of 7 AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
Ironwood - 2x1 501G CC
Clarifications, Exceptions & Assumptions
VIII. OWNER SUPPLY
1. The Owner will provide a PABX, telephones, telephone jacks and
wiring based on his telephone requirements.
The Owner will be responsible for obtaining all telephone
communication lines external to the facility. These lines include
data and voice channels to GPU's Transmission/Distribution Center
and to GPU's Energy Center.
IX. SITE CONDITIONS
1. Stacks are based on 175' height double flue as requested by Owner.
No bypass stack is included. Building height is 70'. Owner to
determine if this meets environmental criteria.
2. Existing monitoring tower, its foundations, as well as other
installed underground items will be removed by the Owner prior to
commencing construction.
3. Due to the location of the plant, the existing double circuit
transmission line running parallel with the existing railroad tracks
and plant property may need to be relocated. Such costs are not
included and are assumed to be by Owner. Owner will assume
right-of-way and/or easement costs for the new location of
transmission line, if required.
4. Spoil from rock excavation will be hauled to a mutually agreed
location on the Pennsy area property. Tipping or dump fees will be
to Owner's account.
5. Visual barriers for the plant have not been included.
6. No landscaping other than hydroseeding areas affected by
construction is included.
7. Soil percolation is assumed for disposal of sanitary waste by septic
tank and drain field. Location of drain fields and rates are based
on Owner's report as shown on the revised plot plant.
Page 7 of 7 AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
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Not Used
--------------
==============
<PAGE>
Codes and Standards
-------------------------
=========================
<PAGE>
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Codes and Standards
- --------------------------------------------------------------------------------
STANDARDS, CODES, AND OTHER DOCUMENTS
APPLICABLE TO THE POWER PLANT
A. American Society of Mechanical Engineers (ASME)
- - American Society of Mechanical Engineers (ASME Boiler and Pressure Vessel
Code).
- - ANSI/ASME TDP-1 Recommended Practices for the Prevention of Water Damage
to Steam Turbines Used for Electrical Power Generation, Part 1-Fossil
Fueled Plants.
- - ASME Performance Test Codes: PTC
- - ASME 19.5 Interim Supplement on Instruments and Apparatus
- - ASME B3 1.1 Power Piping
B. American National Standards Institute (ANSI)
- - American National Standards for Piping, Pipe Flanges, Fittings and Valves.
- - ANSI C2 Series C37: National Electrical Safety Code, Circuit Breakers,
Protection and Protective Relays.
- - ANSI Series C50: Synchronous Generators
- - ANSI Series C57: Transformers, Distribution, Power and Instrument.
- - ANSI Series C62: Surge Arresters.
- - ANSI C84.1: Electric Power Systems and Equipment Voltage Ratings 60 Hz.
- - ANSI Series C39.2: Direct Acting Electrical Recording Instrument
Transformers.
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- - ANSI/NEMA MG-1: Motors and Generators.
- - ANSI/IEEE-Series 421.1: Definitions and test for Excitation Systems for
Synchronous Machines.
- - ANSI/IEEE-Series 421.2: Identification, testing and evaluation of the
dynamic performance of excitation control systems.
C. Other American Codes
- - American Association of State Highway and Transportation Officials
(AASHTO)
- - American Concrete Institute (ACI)
- - American Gear Manufacturers Association (AGMA)
- - American Institute of Steel Construction (AISC)
- - American Iron and Steel Institute (AISI)
- - Air Moving and Conditioning Association (AMCA)
- - American Society for Testing and Materials (ASTM)
- - American Society of Heating, Refrigerating, and Air-Conditioning Engineers
(ASHRAE)
- - American Water Works Association (AWWA)
- - American Welding Society (AWS) Structural Welding Code (AWS D1.1)
- - Antifriction Bearing Manufacturers Association (AFBMA)
- - Cooling Tower Institute (CTI)
- - Expansion Joint Manufacturers Association (EJMA)
- - Heat Exchange Institute (HEI)
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- - Hydraulic Institute Standards (HIS)
- - Illuminating Engineering Society (IES)
- - Institute of Electrical and Electronics Engineers (IEEE)
- - Insulated Cable Engineers Association (ICEA) - if not covered by the
National Electrical Code (NEC)
- - Instrument Society of America (ISA)
- - Occupational Safety and Health Administration (OSHA)
- - Manufacturers Standardization Society (MSS)
- - National Electrical Manufacturers Association (NEMA)
- - National Fire Protection Association (NFPA) - National Fire Codes
- - Pipe Fabrication Institute (PFI) Standards
- - ANSI 16.21 Rubber Gaskets
- - ASTM C533, C512 and C195 Thermal Insulation
- - Underwriters Laboratories, Inc. (UL) for Equipment and Hardware only
(where available)
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FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
The Balance of Plant Design and Installation between Manufactured Equipment and
Systems will meet the Reference Project Design Criteria contained in this
Section.
Proprietary Information AES IRONWOOD CONTRACT
FINAL ISSUE - 10/30/98
<PAGE>
Structural Engineering
Design Criteria
-------------------------
=========================
<PAGE>
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2x1 501G REFERENCE PLANT
APPLICATION HANDBOOK
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STRUCTURAL ENGINEERING DESIGN CRITERIA
- --------------------------------------------------------------------------------
Structural Engineering Design Criteria
Introduction
This section describes the design criteria which will be used for all civil,
structural, and architectural work related to this project.
Design Codes and Standards
Except for Emissions, Noise and Effluents, the design and specification of all
work will be in accordance with all applicable laws and regulations of the
federal government and applicable regional and local codes and ordinances.
Emissions, Noise and Effluents shall be as defined in the contract. A listing of
the codes and industry standards to be used in design and construction follows:
(1) Specifications for materials will generally follow the standard
specifications of the American Society for Testing and Materials (ASTM)
and the American National Standards Institute (ANSI).
(2) Minimum design loads for buildings and other structures will follow
American Society of Civil Engineers (ASCE) standards, ASCE 7-95.
(3) Field and laboratory testing procedures for materials will follow standard
ASTM specifications.
(4) Design and placement of structural concrete will follow the recommended
practices and the latest version of the American Concrete Institute Code
(ACI) and the Concrete Reinforcing Steel Institute (CRSI).
(5) Design, fabrication, and erection of structural steel will follow the
recommended practices and the latest version of the American Institute of
Steel Construction Code (AISC).
(6) Steel components for metal wall panels and roof decking will conform to
the American Iron and Steel Institute (AISI) Specification for the Design
of Light Gage Cold-Formed Structural Members.
(7) Welding procedures and qualifications for welders will follow the
recommended practices and codes of the American Welding Society (AWS).
(8) Preparation of metal surfaces for coating systems will follow the
specifications and standard practices of the Steel Structures Painting
Council (SSPC), National Association for Corrosion Engineers (NACE), and
the specific instructions of the coatings manufacturer.
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2x1 501G REFERENCE PLANT
APPLICATION HANDBOOK
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STRUCTURAL ENGINEERING DESIGN CRITERIA
- --------------------------------------------------------------------------------
(9) Fabrication and erection of grating will follow applicable standards of
the National Association of Architectural Metals Manufacturers (NAAMM).
(10) Design, fabrication, and erection of prestressed concrete members will
follow the recommended practices of the latest version of the Prestressed
Concrete Institute (PCI) manual for the structural design of architectural
prestressed concrete panels.
(11) Design and erection of masonry materials of brick, concrete block, or
structural tile will follow the recommended practices and codes of the
latest revision of the ACI Concrete Masonry Structures Design and
Construction Manual.
(12) Plumbing will conform to the requirements of applicable regional or local
codes. If none, plumbing will conform to the National Plumbing Code.
(13) Design of water supply and wastewater facilities will conform to the
American Water Works Association (AWWA) and applicable regional and local
health codes.
(14) Design will conform to the requirements of the Occupational Safety and
Health Administration (OSHA).
(15) Design of roof coverings will conform to the requirements of the National
Fire Protection Association (NFPA) and Factory Mutual (FM). In addition,
fire doors and windows and other building construction features will
follow the recommended practices and codes of NFPA, where applicable.
Other recognized standards will be used where required to serve as guidelines
for the design, fabrication, and construction, when not in conflict with the
above listed standards.
The codes and industry standards used for design, fabrication, and construction
will be the codes and industry standards, including all addenda, in effect as
stated in equipment and construction purchase or contract documents. Where no
other standard or code governs, the Uniform Building Code (UBC) will be used.
Natural Phenomena Design Criteria
The design criteria based on the natural phenomena are discussed below.
Rainfall
The design basis rainfall intensity will be 5 inches per hour.
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<PAGE>
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2x1 501G REFERENCE PLANT
APPLICATION HANDBOOK
- --------------------------------------------------------------------------------
STRUCTURAL ENGINEERING DESIGN CRITERIA
- --------------------------------------------------------------------------------
Wind Speed
The design basis wind speed will be 90 miles per hour based on ASCE 7-95,
Exposure C, with an importance factor of 1.15 and K(zt)=1.00. This design wind
speed will be used to determine wind loads for all structures.
Temperature
Systems and system component design criteria which require ambient temperature
extremes shall use an ambient temperature range of -20 to 105 degrees F.
Relative Humidity
The design basis ambient relative humidity range will be 5 to 100 percent.
Barometric Pressure
The design basis barometric pressure will be 14.7 psi based on a site elevation
of 0 to 2,000 feet above sea level.
Frost Depth
Frost protection for footings, pipes, and other frost-susceptible structures
will be designed based on a frost depth of 30 inches. Water and sewer pipelines
will have a minimum soil cover as required by regional and local codes.
Yard fire water mains will be installed with top of pipe not less than 1 foot
below the design frost penetration depth in accordance with NFPA Standard 24.
Seismicity
The plant site will be designed to resist earthquake forces in accordance with
ASCE 7-95 requirements assuming:
Effective Peak Velocity-Related Acceleration, A(v) = 0.11, Aa = 0.11
Category III (Non-essential)
Seismic Performance Category: C
Soil Profile Type "D"
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<PAGE>
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2x1 501G REFERENCE PLANT
APPLICATION HANDBOOK
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STRUCTURAL ENGINEERING DESIGN CRITERIA
- --------------------------------------------------------------------------------
Design Loads
Design loads for all structures will be determined according to the criteria
described below, unless the applicable building code requires more severe design
conditions.
Dead Loads
Dead loads will consist of the weights of the structure and all equipment of a
permanent or semipermanent nature including tanks, wall panels, partitions,
roofing, piping, drains, electrical trays, bus ducts, and the contents of tanks
measured at full capacity. However, the contents of tanks shall not be
considered as effective in resisting column uplift.
Dead loads will be determined using the unit weights from ASCE 7-95.
Live Loads
Live loads will consist of uniform live loads and equipment live loads. Uniform
live loads are assumed unit loads which are sufficient to provide for movable
and transitory loads, such as the weight of people, portable equipment and
tools, planking and small equipment, or parts which may be moved or placed on
floors during maintenance operations. These uniform live loads should not be
applied to floor areas which will be permanently covered with equipment.
Equipment live loads are calculated loads based upon the actual weight and size
of the equipment and parts to be placed on floors during dismantling and
maintenance, or to be temporarily placed on or moved over floors during
installation.
Floors and supporting members which are subject to heavy equipment live loads
will be designed on the basis of the weight of the equipment. When moving
equipment over floors for installation, stress increases of 25 percent are
permitted in beams and columns.
Live loads will be used as follows.
Ground Floors
Ground floor slabs will be designed for a minimum of 250 psf in all areas where
a 2-ton forklift can operate. Consideration will be given to designing
appropriate areas of the ground floor for support of heavy equipment such as
construction and maintenance cranes.
Ground floor slabs for shops and auxiliary buildings will be designed for 150
psf. Storage areas will be designed for the actual weight of the stored
material, but no less than 150 psf.
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Suspended Floors
Suspended grating floors will be designed for a loading of 60 psf to the
supporting members. The grating itself will be selected to support a uniform
loading of 150 psf to minimize deflection.
Roof Loads
All roof areas will be designed for wind loads and basic ground snow loads as
indicated in Wind Loads and Snow Loads, respectively. Ponding loading effect due
to roof deck and framing deflections will be determined in accordance with AISC
Specification Section K2. All roof areas will be designed for a minimum of 20
psf live load in addition to calculated dead loads.
Column Live Loads
Live loads carried from the floors to the columns can be reduced in accordance
with Section 4.8 of ASCE 7-95.
Impact Loads
Impact loads will be added to other loads for components supporting
reciprocating or rotating machines, elevators, hoists, cranes, or other
equipment creating dynamic forces. The following impact loads will be used,
unless analysis indicates higher or lower values.
o Elevators - 100 percent of lifted load.
o Hoists and cranes.
- Vertical - 25 percent of the maximum static wheel load.
- Horizontal - lateral - 20 percent of the sum of the lifted load plus the
weight of the hoisting component.
- Horizontal - longitudinal - 10 percent of the total moving load.
o Rigid pavement design for roadways - 20 percent of the wheel or crawler
loads.
o Rotating and reciprocating equipment - 50 percent of the machine weight.
o Hangers supporting floors and platforms - 33 percent of the sum of the
dead load and reduced live load.
Pipe Hanger Loads
Pipe hanger loads for the major piping systems, such as the main steam and
boiler feedwater, will be specifically determined and located. Piping expansion
and dynamic loads will be considered
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on an individual basis for their effect on the structural systems. Loads imposed
on perimeter beams around pipe chase areas will also be considered on an
individual basis.
Pipe loads for other areas will be treated as uniform loads per unit floor area,
and will be carried to the columns and foundations as dead loads. Pipe loads
will not be considered as reliable dead load for uplift.
Equipment Loads
Equipment loads will be specifically determined and located. For major
equipment, structural members and bases will be specifically located and
designed to carry the equipment load into the structural system. For equipment
weighing less than the live load, the structural system will be designed for the
live load. Equipment loads will be noted in the design calculations to permit
separation in calculation of uplift and stability.
Wind Loads
Wind loads for all structures will be computed using ASCE 7-95. A step function
of pressure with height under Exposure C will be used. The building
classification will be Category I.
The design wind pressures will be determined by applying the velocity pressures
to the appropriate design equations in ASCE 7-95 for building main wind-force
resisting systems, other buildings, component and cladding, and other variable
design coefficients and factors.
Snow Loads
Snow loads for all structures will be based on ASCE 7-95. The final design loads
will be determined by applying the design ground snow load, pg, of 30 psf to the
appropriate equations in Section 7 of ASCE 7-95.
Seismic Loads
Seismic loads for all structures will be computed using ASCE 7-95. Seismic
loading will be used in design of structures only when they are greater than
computed wind loads.
Construction Loads
The integrity of the structures will be maintained without use of temporary
framing struts or ties and cable bracing insofar as possible. However,
construction or crane access considerations may dictate the use of temporary
structural systems.
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Estimated Loads
Loading imposed by equipment will be specifically determined or estimated before
detailed structural design. Estimated loading will be noted as such in hand
calculations or computer input and verified as information is made final.
Wheel and Crawler Loads
Loads exerted on roadway pavements, railroad trackwork, buried piping, box
culverts, and embankments will be reviewed and selected prior to design of the
underlying items. Typically, Cooper E80 and HS20 loads will be utilized for the
design of railroad and roadway subgrades. However, where appropriate, loading
such as loaded scrapers, crawler cranes, stator transport trailers, etc., often
exceed the more typical E80 or HS20 loading and therefore must be considered.
Loading Combinations
Concrete Structures: Loading combinations will be in accordance with ACI 318.
Steel Structures: Loading combinations will be in accordance with the AISC
"Specification for Structural Steel Buildings".
Turbine/Generator Foundations: Loading combinations will be in accordance with
the American Society of Civil Engineers, ASCE "Design of Large Steam
Turbine-Generator Foundations", February 1987 and Westinghouse established
criteria.
For loading combinations which include overhead crane loads, Association of Iron
and Steel Engineers, AISE "Guide for the Design and Construction of Mill
Buildings" will be used.
Architecture
Interior and exterior architectural materials and systems mentioned under this
section are provided here as a guideline.
Exterior Architecture
General design criteria for the exterior architectural systems will be as
follows.
Walls
Walls for the main plant and miscellaneous structures will be provided as
described below.
o Main Plant. The walls of the main plant building, if provided, will be
Metal Building Manufacturers' Association Standard or will consist of
metal wall panel systems. Metal wall
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panels will be of the field-erected type with exposed fasteners. Where
insulation is required for metal wall panels, it will consist of a glass fiber
bat or blanket type with a vinyl face.
o Miscellaneous Structures. The walls for miscellaneous structures, if
provided, will consist of material systems which are comparable to the
main plant systems. Pre-engineered buildings will be used for yard
structures where appropriate.
Insulation
Insulation materials will be added to walls where necessary to reduce cooling
loads in the summer and heating loads in the winter. The insulation material
shall provide a minimum insulating value of R10 in the walls and R15 in the
roof.
A detailed description of acoustical requirements is provided in the applicable
Westinghouse "Acoustical Requirements" DBFR document.
Windows
Exterior windows and frames will be fixed hollow metal to match exterior doors
and frames.
Window frames will be factory-primed and field painted, color to harmonize with
the exterior face of the wall panels.
Louvers
Ventilation openings will be provided with stormproof blade louvers complete
with bird screens. Operating damper blades will be provided behind the fixed
louvers to allow closing of the openings. On long expanses of louvers, a
continuous blade concealed support system will be provided.
Personnel Doors
Personnel doors will be the hollow metal type, flush, 1-3/4 inches thick,
insulated, with formed hollow metal frames. Both doors and frames will be
factory primed and field painted. In areas of the plant where excessive negative
pressure hinders normal door operation, special balanced door hardware will be
provided.
Doors will have a glazed vision panel when required by door function. Glazing
will consist of tempered safety glass or wired glass.
Doors located on the ground floor of buildings will swing out. Doors at other
levels will swing in or as required to meet egress requirements. Heavy-duty
hardware will be used.
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Fire doors will conform to hollow metal door requirements and will be provided
with fillers adequate to meet the required fire rating. The door, frame, and
hardware will bear a certification label of Underwriters' Laboratories for the
class of opening and rating.
Equipment Access Doors
Large access exterior doors will be vertical lift type, insulated, with weather
seals and windlocks. Components will be formed from galvanized steel, factory
primed, and field painted. Doors at high traffic areas will be motor-operated.
Doors will be manually operated where access is infrequent.
Vertical Standing Seam Roofs
Roofing for all major structures will consist of an insulated or uninsulated
corrugated metal profile. Insulated roof system will be used as required for
HVAC controlled spaces.
The roof panel will be galvanized manufacturer's standard structural corrugated
profile. Depth of profile will be nominal 1-1/2 inches. Galvanizing will be in
accordance with ASTM A525 Designation G90 with 0.90 ounce per square foot
minimum thickness.
The roof system will include subgirts and support clips, insulation if required,
flashing, fasteners, and other appurtenances required for a total system. The
panels will have smooth appearance and will be free of excessive "oil canning".
Side joints of the roof panels will be of interlock construction and will be
caulked full or gasketed.
Eave gutters and downspouts will be provided as part of the roofing system.
Gutter apron will extend under the roof panels to provide positive
counterflashing.
Downspouts will be rectangular configuration with a 75-degree elbow at the base.
Painting
All exterior steel material that is not galvanized or factory finished will be
painted. Concrete surfaces will not be painted.
Paint color will match or harmonize with the color of the exterior face of the
wall panels.
Interior Architecture
Interior architectural systems will conform to the following general design
criteria. Fire rated architectural systems will be provided when required by
building or fire codes. Handicapped accommodations will be provided as required
by codes and personnel requirements.
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Partitions
Interior walls will be constructed or masonry, metal studs with gypsum board,
metal wall panel, and factory finished assembled demountable type partitions.
Interior walls, where durability is required, will be constructed of concrete
block masonry, structurally designed and reinforced as required.
Metal studs with gypsum board and demountable partitions will be used to form
interior partitions in office areas. Insulation will be used for sound control
as required. A metal stud gypsum board furring system will be used on exterior
walls for finished areas where determined in design.
Windows
Any fixed interior windows will be formed steel frames similar to those of
personnel doors.
Frames in stud walls will be the wraparound style.
Interior glazing will consist of clear, polished plate, float, or tempered
safety glass, held in place with metal glazing beads.
Personnel Doors
Interior personnel doors will be of similar construction to exterior personnel
doors. Frames in stud walls will be the knockdown style. Doors and frames will
be factory primed and field painted.
Interior doors will have a glazed vision panel as required. Glazing for the
vision panel will be tempered safety glass or wired glass.
Standard-duty hardware will be used.
Where fire doors are required, the door, frame, and hardware will bear a
certification label from Underwriters' Laboratories for the class of opening and
rating.
Ceilings
Ceilings in unfinished areas will leave the overhead structure exposed. The
exposed structure including framing, deck form, and metal deck will not be
painted in unfinished areas.
Ceilings in finished areas will generally consist of a suspended, exposed grid,
lay-in acoustical type. A snap-in aluminum acoustical type will be used in the
control room. In wet areas, such as showers and locker rooms, ceilings will have
moisture-resistant acoustical tile.
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Floor Coverings
For high moisture areas of locker rooms, showers, and toilets, an unglazed
ceramic tile will be used.
Resilient floor covering will be used in all finished areas which are not
covered by ceramic tile.
Steel troweled surface hardened concrete will be used in all other unfinished
areas in buildings throughout the plant site.
Chemical resistant coatings will be applied as required to concrete surfaces of
floors inside curbed areas.
Wall Coverings
Glazed concrete block units will be used in locker and shower areas to provide
sanitary and easily maintained wall surfaces. All other finished area walls will
be painted as described in the following.
Painting
Wall surfaces, doors, and frames that are not prefinished will be field painted.
Where required, steel surfaces that are not prefinished will be field painted.
Aluminum, brass, stainless steel, or plastic surfaces will not be painted.
Equipment that is not prefinished will be field painted; all metal equipment
bases will be field painted.
Color schemes will be selected for overall compatibility.
Sanitary Facilities
Toilet and shower facilities will be provided for personnel in finished areas of
all major buildings and in other areas as determined by project requirements.
Janitor closets and cleaning material storage areas will be provided in finished
areas of all major buildings.
Concrete
Reinforced concrete structures will be designed in accordance with ACI 318-95,
Building Code Requirements for Structural Concrete.
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Materials
The materials described below will be specified and used as a basis for design.
o Reinforcing Steel. Reinforcing steel shall meet the requirements of ASTM
A615, Grade 60.
o Cement. Cement used in massive concrete (minimum dimension of more than
30") will be Portland Cement meeting the requirements of ASTM C150 Type
II. Cement for all other mixes will be Portland Cement meeting the
requirements of ASTM C150 Type I.
o Fly Ash. Fly ash will be Type C or F conforming to ASTM C618.
o Aggregates. Fine aggregates will be clean natural sand. Coarse aggregates
will be crushed gravel or stone. All aggregates shall meet the
requirements of ASTM C33.
o Admixtures. Plasticizers and retarders will be used to control setting
time and to obtain optimum workability. Air entrainment of 4 to 6 percent
by volume will be used in all concrete mixes. Interior slabs to be trowel
finished will use less air entrainment. The use of calcium chloride will
not be permitted.
o Water. Clean water of potable quality shall be used in all concrete mixes.
Design
The system of concrete and steel strength combinations to be used is as follows.
o Concrete strength, psi (at 28 days) - See table in Mixes section below.
o Reinforcing strength, psi - 60,000 (Grade 60).
Mixes
Concrete mix design for three classes of concrete will be required. The usage
classes are as follows.
Design Maximum Coarse
Class Strength Aggregate Size Slump (inches) Use
- ----- -------- -------------- -------------- ---
psi min. max
I 3,000 1 inch to No. 4 2 4* General and Special
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Design Maximum Coarse
Class Strength Aggregate Size Slump (inches) Use
- ----- -------- -------------- -------------- ---
psi min. max
II 2,000 3/4 inch to No. 4 4 6 Duct Banks
III 4,000 1-1/2 inches to 2 4* Mass Concrete
No. 4
*6" maximum slump will be allowed if super-plasticizers are used.
Concrete strength will be determined by ASTM C39.
Concrete Tests
Quality control testing of concrete will be performed by an independent
laboratory and will consist of the following.
o Preliminary Review. Before concrete mixes are designed, the source and
quality of materials will be determined and the following reports will be
submitted.
- The type, brand, manufacturer, composition, and method of handling
(sack or bulk) of cement.
- The type, source, and composition of fly ash.
- The classification, brand, manufacturer, and active chemical
ingredients of all admixtures.
- The source of coarse aggregates and test reports required to verify
compliance with ASTM C33.
- The source of fine aggregates and test reports required to verify
compliance with ASTM C33.
- The results of tests to determine compliance of admixtures with
appropriate ASTM requirements.
o Concrete mix designs will be established by a qualified testing laboratory
in accordance with the requirements of ACI 301.
o Field Control Tests. Field control tests will include the following:
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- Aggregate gradation - Each 500 tons of fine aggregate and each 1,000
tons of coarse aggregate will be sampled and tested in accordance
with ASTM D75 and C136.
- Slump - A slump test will be made from each of the first three
batches mixed each day. An additional test will be made for each 50
cubic yards placed in any one day. Slump tests will be in accordance
with ASTM C143.
- Air content - An air content test will be made from one of the first
three batches mixed each day and from each batch of concrete from
which compression test cylinders are made. Air content tests will be
in accordance with ASTM C231.
- Compression tests - One set of three concrete compression test
cylinders will be made each day for each 100 cubic yards of concrete
placed from each class of concrete. One cylinder of each set will be
tested at an age of 7 days, and the remaining two cylinders of each
set will be tested at an age of 28 days. Compression tests will be
in accordance with ASTM C39.
- Placement Temperature - Concrete placement temperature will be
controlled in accordance with the requirements of ACI 301 and
project specifications.
Reinforcing Steel Test
Mill test reports or reports of tests made by the fabricator will be required
certifying that all material is in accordance with the applicable ASTM
specification and meets the requirements of the project specification.
Steel and Other Metals
Structural Steel
Steel framed structures will be designed in accordance with the AISC
Specification for the Structural Steel Buildings, Allowable Stress Design and
Plastic Design, June 1, 1989. In addition, steel framed structures will be
designed in accordance with the criteria discussed in the following subsections.
Prefabricated metal buildings will be per Metal Building Manufacturers'
Association standard.
Materials
Structural steel shapes, plates, and appurtenances for general use will conform
to ASTM A36. Structural steel required for heavy framing members will consider
the use of ASTM A441 or A572. Structural steel required for tube girts will
conform to ASTM A500, Grade B. Connection bolts will conform to ASTM A325.
Connections will conform to Research Council on Structural Connections of the
Engineering Foundation Specification for Structural Joints using ASTM A325 or
A490 bolts, November 13, 1985 edition. Welding electrodes will be
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AWS E70XX electrodes. All structural steel will be shop primed with an inorganic
zinc primer after fabrication in accordance with SSPC No. 6.
Connection plates will be silicon kilned ASTM A36 steel if the project site
isolated in a cold climate or high seismic zone as determined by the Engineer.
Prefabricated metal building components will be per Metal Building
Manufacturers' Association standard.
Tests
Mill test reports or reports of tests made by the fabricator will be required
certifying that all material is in conformance with the applicable ASTM
specification. In addition, the fabricator will provide an affidavit stating
that all steel specified has been provided at yield stresses in accordance with
the drawings and the specification.
Design
All steel framed structures will be designed as "rigid frame" (AISC
Specification Type 1) or "simple" space frames (AISC Specification Type 2),
utilizing single-span beam systems, vertical diagonal bracing at main column
lines and horizontal bracing at the roof and major floor levels. The use of Type
1 rigid frames will be limited to one-story, open garage, warehouse or shed type
structures, or to prefabricated metal buildings. The Generation Building, if
provided, will utilize Type 2 design and construction or will utilize a
combination of Type 1 and Type 2 or will be prefabricated metal building
designed to the standards of the Metal Building Manufacturers' Association..
Suspended concrete slabs will be considered as providing horizontal stability by
diaphragm action after setup and curing. Deflections of the support steel will
be controlled to prohibit "ponding" of the fresh concrete as it is placed. Metal
roof decks attached with welding washers or fasteners will be considered to
provide a structure with lateral force diaphragm action. Grating floors will not
be considered as providing horizontal rigidity.
Connections will be in accordance with AISC standard connection design for field
bolted connections. Connections will be designed for 3/4-inch bolts for bearing
type joints with threads in shear plane except where connections are required to
be slip-critical. The connection bolts (bearing and slip-critical) will then be
torqued in accordance with slip-critical joint requirements. Larger diameter
bolts will be used to develop larger capacity connections when required. Bolts
in connections identified as not being slip-critical nor subject to direct
tension will not be inspected for bolt tension other than to ensure that the
plies of the connected elements have been brought into snug contact.
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Minimum Sizes
The following minimum sizes apply to the structural frame. (This criteria
excludes prefabricated building framing.)
o "W" shapes used as framing members - W 8 x 10.
o "W" shapes used as posts - W 8 x 10
o Double angles used as horizontal bracing - 2L 2-1/2 x 2-1/2 x 1/4.
o "WT" shapes used as horizontal bracing - WT 3 x 7.5.
o Angle hangers - L 2-1/2 x 2-1/2 x 1/4.
o The minimum flange thickness of material exclusive of secondary members
such as purlins and girts shall be 1/4 in. for exterior construction.
Beam Depth Criteria
If practicable, beam depths shall generally follow these criteria.
o Per recommendations of AISC Section L3.
o Members shall be framed into members of equal or greater depth.
Unbraced Lengths and Slenderness Ratios
o Bending. The following are general criteria for determining unbraced
length of the compression flange.
- Beams on which a slab will be placed with shear connectors shall be
considered continuously supported.
- Beams supporting metal roof deck or slabs formed with metal decking
with attachment at 12-inch centers shall be considered continuously
supported.
- Beams which are part of a truss will use the distance between panel
points as their unbraced lengths, or if the panel has connecting
major members, the unbraced length will be based on the distance
between panel points or connecting members, whichever is the shorter
distance.
o Slenderness
- KL for major axis will be the span length.
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- KL for minor axis will be the largest distance between incident
members which are greater than or equal to two-thirds depth of
subject member, or the distance between truss panel points.
o Column Stability Bracing
- Effective column stability bracing must have both adequate stiffness
and strength to prevent the columns from buckling.
Maximum Deflections
The following guidelines for maximum deflections will be followed.
o Floor beams - 1/360 x span with live loading only.
o Roof beams - 1/240 x span with live or snow loading only.
o Metal panel wall girts.
- Vertical - 1/240 x span; 1/960 x span with 3/8-inch maximum under
and over glass where appearance and load bearing capabilities are a
consideration.
- Horizontal
(1) 1/360 x span with 1.33-inch maximum under and over glass.
(2) 1/180 x span all others.
o Crane and hoist support beams, rails, and monorail support beams
(optional). The deflection limits are based on maximum wheel loads.
- Vertical deflection.
(1) 1/1,000 x span without impact - Turbine generation area.
(2) 1/600 x span without impact - All others.
- Lateral deflection - 1/400 x span - All cranes and hoists.
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Corrosion-Resistant Steel
Corrosion-resistant steel will be used where corrosion, abrasion, or appearance
requires the use of special steels.
o Materials. Corrosion-resistant steels will conform to ASTM A588 (Cor-Ten,
Mayari R); ASTM A167, Type 316L, 2.75 percent minimum molybdenum content
(stainless steel); or to ASTM A167, Type 304 or 304L (stainless steel).
Stainless steel will be used only where extreme corrosion conditions
warrant its use.
o Tests. The fabricator will be required to submit mill test reports for all
material and an affidavit certifying that the material is in accordance
with the drawings and the specifications.
Miscellaneous Metals
o Steel Grating. Steel grating floors will use grating manufactured in
accordance with applicable requirements of the Metal Bar Grating Manual
published by NAAMM.
Steel grating will be welded bar grating, with 3/16-inch wide by
1-1/4-inch deep bearing bars. All interior grating will be painted and
exterior grating will be galvanized.
All gratings will lie flat with no tendency to rock when installed. For
each panel, the transverse bow will not exceed 1/8 inch per foot of panel
width, with no transverse bow to exceed 3/8 inch. The longitudinal bow
will not exceed 1/200 of the panel length.
All penetrations equal to or greater than 5 inches in diameter or 5 inches
in diagonal length shall be banded with kickplate material or standard
weight pipe and shop fabricated where possible to meet project restraints.
o Kickplate. Kickplate will be applied to all platform areas as required to
satisfy OSHA standards for protection of personnel. It will consist of
1/4-inch thick steel plate, ASTM A36, and will project 4 inches above the
platform surface. Kickplate will receive the same type of coating as the
material to which it is attached.
o Guardrail. Guardrail will conform to the minimum requirements of the
applicable sections of OSHA. Guardrail will be a two-rail system with the
top rail 42" above the walkway surface and mid rail 21" below the top
rail. Guardrail post spacing will be proportioned to the length of the
protected opening, but will not exceed 8 feet center-to-center of posts.
Guardrail will be shop fabricated for specific locations and field welded
or bolted to the erected structural steel or concrete.
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Guardrail for stairs will also be a two-rail system with the top rail 34"
above the nose of the tread and the mid rail 17" below the top rail.
Guardrail will be field welded or bolted to the steel channel stair
stringers or concrete.
Guardrail will be fabricated from 1-1/2" square steel tubing or 1-1/4"
nominal diameter piping. Joints will be mitered and welded to form a
continuous railing system.
Guardrail railing material will conform to ASTM A501 Grade B or ASTM A500
Grade A or B.
All guardrail will be shop painted with an organic zinc primer and field
finish painted.
The above criteria are the minimum based on OSHA. Other codes such as UBC,
regional, local codes and ordinances may specify additional criteria.
o Anchor Bolts and Embedded Shapes. Anchor bolts will conform to ASTM A36
and weldable A307. Embedded shapes and plates will be galvanized where
required. Anchor bolt assemblies will be galvanized where required. Steel,
which is not galvanized and will remain exposed, will be primed with a
primer paint.
o Metal Roof Deck and Metal Deck Form. The metal roof deck and metal deck
form will conform to ASTM A446, Grade A, or ASTM A611, Grade C. It will
consist of prefabricated interlocking side lap units, fluted sheets. All
metal deck will be galvanized.
o Stairs. Stairs will be constructed of ASTM A36 channel stringers, C10 x
15.3 minimum. Stair treads will be steel grating with cast abrasive
nosing.
o Ladders. Ladders will be constructed of ASTM A36 bar rails, 2-1/2 inch by
1/2 inch, with 1-inch diameter rungs.
Site
Grading and Drainage
The Site Grading and Drainage System will be designed to comply with all
applicable federal, regional, and local regulations. Topographic modifications
to the site area may be required to provide positive overall drainage.
Surface drainage onsite will consist of overland and open channel flow.
Channels and ditches will generally be trapezoidal in cross section, of
sufficient width to facilitate easy cleaning, and mildly sloping so that erosion
is prevented.
The storm drainage system will be designed for a rainfall intensity of 5 inches
per hour.
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Site-specific drainage facilities will be designed for the flow resulting from a
25-year rainfall or regional and local code requirements, whichever is greater.
Temporary facilities will generally be designed for a 10-year rainfall.
Containment ponds will be designed for a 10-year, 24-hour rainfall event unless
specific federal, regional, or local regulations specify otherwise. Although
drainage facilities will be designed for the flow resulting from rainfall events
as described above, when subjected to the flow resulting from a 100-year
rainfall, the drainage facilities must not back up water to flood any permanent
plant facilities.
The main plant complex area will be graded with moderate slopes (1 percent
minimum preferred) for effective drainage.
The plant property will be preserved undisturbed where possible.
Roads
Access within the plant site will be provided by a system of roadways.
Roads will be of three types: Type 1, Type II, and Type III.
Type I roads will consist of two 12-foot asphalt-paved lanes with 5-foot
gravel-surfaced shoulders on each side. The main plant access roads and a
portion of the main plant complex circumferential road will be Type I.
Type II roads will consist of one 15-foot asphalt paved lane with no shoulders.
The plant road adjacent to the HRSG area will be Type II.
Type III roads will consist of two 12-foot unpaved lanes with no shoulders. A
portion of the main plant complex circumferential road will be Type III.
Turn-ins for access off Type III roads will consist of one 15-foot unpaved lane
with no shoulders.
All Type II and III roads will be surfaced with gravel during the construction
period. Occasional applications of a dust palliative material will be used to
minimize dust during the dry seasons.
The minimum radius to the inside edge of pavement (EOP) or gravel surface at
intersections of the roads will be as follows.
o Type I - 50 feet to inside EOP.
o Type II - 30 feet to inside EOP.
o Type III - 30 feet to inside edge of gravel.
Where two different types of roads intersect, the radius will be the smaller of
the two (e.g., at an intersection of Type I and Type II roads the radius of the
inside edge of the gravel surface will be 30 feet).
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The maximum suggested grade for the roads will be as follows.
o Type I - 4 percent.
o Type II - 4 percent.
o Type III - 8 percent.
The rate of change of grade at vertical curves will be determined by the
designer after considering anticipated traffic speeds for the particular road.
Fencing and Security
Chain link fencing around the site boundaries and security fencing, both topped
with barbed wire, will be provided around the main plant complex, substation,
construction areas, and other areas requiring controlled access. Fencing heights
will be in accordance with applicable codes and regulatory requirements. Plant
access is controlled manually by a swing gate located at the main entrance to
the secured area. Options include a gate house and/or an electric operated gate
with a key card entry and security surveillance camera.
Foundations
General Description
This subsection provides a general description of the foundations to be used for
the major power plant structures. Detailed design criteria and descriptions of
the foundation support methods will be included in Foundation Design Criteria
after an analysis of site geotechnical information is completed.
Generation Area
The generation area includes the combustion turbine, steam turbine, auxiliary
equipment, and the Generation Building, if required. The generation area
foundations will be reinforced concrete mats or spread footings supported on
suitable subgrade.
Site-specific geotechnical exploration, testing, and analysis will determine the
most suitable bearing method to support the mats and spread footings. The
bearing method may include engineered fill, piling, drilled shafts, pressure
injected footings, or soil densification. The foundations will be sized and
proportioned such that the bearing and allowable settlement criteria will not be
exceeded.
Geotechnical exploration, testing, and analysis information will be used to
predict the elastic (short-term) and consolidation (long-term) settlement for
the foundation component. Allowable settlements, elastic plus consolidation,
will be limited as follows.
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o Total settlement - 1 inch
o Differential settlement - 0.15 percent slope between adjacent concentrated
load points or loaded areas.
The combustion turbine and steam turbine foundation mats will be designed to
meet the total and differential settlement established by Westinghouse Electric
Corporation if more stringent than the allowable settlements for the foundation
component of the generation area.
The foundation for the generation area will be subdivided into separate pours.
Construction joints will be designated on the drawings. Major drain system
headers and some mechanical systems piping will be encased in the mats. The mats
and slabs will receive a finish slope approximately 1/16 inch per foot between
high ridges and low drain grates and will receive a steel trowel finish and
surface hardener. Equipment drains, conduit, and miscellaneous piping will be
embedded or encased under the finished mats and slabs.
The generation area foundations will be reviewed for support of cranes for
erection of the building and equipment. Crane loading criteria will be assumed
for the design and supplied to the Contractor. Stresses in the reinforced
concrete mat will be permitted to increase 1.5 times code allowables when caused
by temporary construction loads.
Miscellaneous Buildings and Structures
Miscellaneous buildings and structures include construction facilities, tanks,
additional warehouse module, auxiliary equipment bases, boiler feed module,
air-cooled condenser module if required, and other facilities for which a
foundation must be provided. The foundations will be reinforced concrete mats or
spread footings supported on suitable subgrade.
Site-specific geotechnical data will be analyzed to predict the bearing and
settlement characteristics of the soils. Criteria will be established to permit
design of the most economical foundation that is compatible with life expectancy
and service of the building or structure.
Foundation Design Criteria
The foundations for the buildings and structures will be reinforced concrete
mats or spread footings supported on suitable subgrade. The size and proportion
of the foundations will be based on an allowable bearing capacity of 3,000 psf
for the subgrade. Allowable bearing capacity can be increased by 1/3 for
temporary conditions such as wind and earthquake.
For a given site, geotechnical data will be analyzed to determine the most
suitable method of support for the foundations. If the allowable bearing
capacity of the subgrade is lower than 3,000 psf and/or if piles are required,
this will result in additional design and quantity adjustments for the
foundations.
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Factors of safety for the foundation design will be as follows:
F.S. against sliding: 1.25
F.S. against overturning: 1.50
F.S. against uplift: 1.50
Equipment Bases
All equipment will be supplied with an equipment base suitable for its
operation. Where the equipment could induce vibration problems, the base will
have adequate mass to dampen vibration motions. Special consideration will be
given to vibration and stiffness criteria where specified by an equipment
manufacturer.
Equipment that does not require a special base will be placed on a nominal
6-inch high base to keep the equipment off the floor surface. Base will be
designed for the greater of the minimum temperature and shrinkage reinforcement
or reinforcement required to carry the equipment loads. The bases will be
designed to develop the yield strength of the equipment anchor bolts embedded
therein as a minimum.
Insulation
All foundations and below grade portions of space conditioned buildings above
those foundations will be insulated in accordance with the American Society of
Heating, Refrigerating, and Air Conditioning Engineers (ASHRAE) Standard 90,
Energy Conservation in New Building Construction.
Chemical Storage Containment
Chemical storage tanks and equipment containing regulated liquids (such as oil
and acids for example) will be surrounded by curbing. The plan dimensions of the
containment will be sized such that any possible leak from a tank or equipment
will be collected inside the containment. The net volumetric capacity of each
containment will be determined in accordance with the federal, regional and
local regulations and requirements. For multiple tanks located within the same
curbed area, the largest single tank will be used to size the curbing and drain
piping.
The concrete surfaces for chemical storage applications will be provided with a
protective coating system.
Space Conditioning
Space conditioning consisting of heating, ventilating, and air conditioning
(HVAC) will be provided to ensure proper environmental conditions for certain
equipment, freeze protection, and
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for personnel comfort. The design of space conditioning systems will be in
accordance with all applicable requirements of the latest edition of the ASHRAE
Handbook, 1989 Fundamentals, and the Westinghouse "Acoustical Requirements"
document applicable for the project.
Ambient Design Temperatures
Design will be based on the following assumed summer and winter ambient
temperatures
ASHRAE, 2.5/97.5 percent Extreme
------------------------ -------
Summer
Dry-bulb, 91 F 105 F
Wet-bulb, 77 F 77 F
Winter
Dry-bulb, -5 F -20 F
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Control Engineering
Design Criteria
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CONTROL ENGINEERING DESIGN CRITERIA
Introduction
This section covers the design criteria which will be used for all control work
related to this project.
Design Codes and Standards
Except for Emissions, Noise and Effluents, the design and specification of all
work will be in accordance with all applicable laws and regulations of the
federal government and applicable regional and local codes and ordinances.
Emissions, Noise and Effluents shall be as defined in the contract. A listing of
the codes and industry standards to be used in design and construction follows:
(1) American National Standards Institute (ANSI).
(2) American Society of Mechanical Engineers (ASME).
(3) Institute of Electrical and Electronics Engineers (IEEE).
(4) Instrument Society of America (ISA).
(5) National Electrical Manufacturers Association (NEMA).
(6) National Electrical Safety code (NESC).
(7) National Fire Protection Association (NFPA).
(8) Scientific Apparatus Makers Association (SAMA).
(9) American Society for Testing and Materials (ASTM)
Other recognized standards will be utilized, as required, to serve as design,
fabrication and construction guidelines. In the event of any conflict between
the codes and standards, the more stringent regulation shall apply
The codes and industry standards used for design, fabrication, and construction
will be the codes and industry standards, including all addenda, in effect as
stated in equipment and construction purchase or contract documents.
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General Requirements
Ambient Conditions
Instrument and control devices mounted outdoors will be designed to withstand
ambient temperature extremes from -20 to 105 degrees F. Instrument and control
devices mounted indoors will be designed to withstand ambient temperature
extremes from 40 to 113 degrees F. Individual instruments that may be exposed to
temperatures exceeding 113 degrees F shall be designed on a case by case basis.
All field mounted instruments and control devices will be designed for relative
humidity up to 100 percent throughout the temperature range.
All instruments and control devices installed in the Control Room and other
air-conditioned buildings will be designed for an operating condition of 55 to
95 degrees F ambient temperature and 15 to 90 percent (noncondensing) relative
humidity.
Utilities
All instruments and control devices will be designed with the following utility
requirements:
o Power supply operating voltage:
-- Low voltage, single phase, 60 hertz for logic and fractional
horsepower motors.
-- 125-volt dc for logic and fractional horsepower motors.
-- Low voltage, three-phase, 60 hertz for integral horsepower motors.
Voltage levels will be specified for the specific project. Any voltage
required other than the above will be furnished by the equipment supplier.
o Pneumatic - Clean, dry instrument air at 70 to 125 psig. All necessary
pressure-reducing controls, where required, will be furnished by the
equipment supplier.
Standard Ranges of Analog Signals
The ranges of analog signals, other than thermocouples and RTDs will normally be
as follows:
o Electric - 4 to 20 mA dc.
o Pneumatic - 3 to 15 psig.
The use of any signal range other than the above will be avoided.
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Contact Ratings
The ratings of all instrument contacts used for alarms and interlocks will be as
follows:
Voltage Rating (volts) Continuous Rating (amperes)
---------------------- ---------------------------
Low voltage, 1 phase 10 (inductive)
125 dc 0.5 (resistive)
Instrument Accessibility
Every consideration shall be made to locate and/or mount instruments in an
accessible position.
Instruments
Instrument Sensing Lines and Air Lines
All instrument sensing line and air line installations will be designed and
fabricated in accordance with the ASME Boiler and Pressure Vessel Code and with
ANSI B31.1. Primary instrument sensing lines are defined as the piping and/or
tubing directly connected to the process, beginning at the outlet of the root
valve and terminating at the blowdown valve (if required) and at the point of
connection to the instrument itself.
Instrument blowdown lines are defined as the piping and/or tubing directly
connected to the instrument blowdown valve and extending to the floor,
structural steel or floor drain.
Instrument air supply lines are defined as the piping and/or tubing directly
connected to the plant instrument air header beginning at the air header root
valve and terminating at the air user.
Instrument control air lines are defined as the piping and/or tubing used to
convey the pneumatic control signal to the control device.
Sizes of Instrument Sensing Lines and Air Lines
Instrument sensing lines will be as listed below:
o Tubing for primary instrument sensing lines will be 1/2 inch O.D. Tubing
for instrument blowdown lines shall be 3/8 inch O.D. Instrument sensing
line tubing and blowdown tubing will be cold drawn, fully annealed, ASTM
A213 TP213 stainless steel. Tubing hardness will not exceed Rockwell B80.
Tubing wall thickness will be as listed below.
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-1/2 inch O.D. Tubing
Max. Allowable Max. Allowable Min. Allowable
Pressure Temperature Wall Thickness
-------- ----------- --------------
3000 PSIG 1050 degrees F .083 inch
2400 PSIG 1050 degrees F .065 inch
1100 PSIG 1050 degrees F .049 inch
-3/8 inch O.D. Tubing
Max. Allowable Max. Allowable Min. Allowable
Pressure Temperature Wall Thickness
-------- ----------- --------------
greater than 1700 PSIG 1050 degrees F .065 inch
less than 1700 PSIG 1050 degrees F .049 inch
o Instrument tubing connected to process piping rated ANSI Class 600 and
less, other than steam system process piping, will use compression tubing
fittings, Swagelok or equal.
o Instrument tubing connected to process piping rated ANSI Class 900 and
greater, and to steam system process piping will use socket weld tube
fittings with the exception of compression tube fitting(s) at the
instrument or instrument valve manifold. Socket weld tube fittings shall
be Cajon or equal.
o Instrument piping will be of the same material and specifications as the
process piping
Air lines will be as listed below:
o Tubing for instrument air supply lines will be soft annealed seamless
copper tubing, ASTM B-75. Tubing wall thicknesses will be as listed below.
Min. Allowable
Tubing Size Wall Thickness
----------- --------------
1/4 in. O.D. .028 in.
3/8 in. O.D. .035 in.
1/2 in. O.D. .049 in.
o Air lines will use compression fittings, Swagelok or equal.
o Particle filters will be supplied at the end of all copper lines. The
filters will be installed prior to the connection to the air user, but
downstream of the last solder joint.
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Insulation and Freeze Protection of Instrument Sensing Lines
All water-filled instrument sensing lines in plant areas subject to freezing
will be insulated and freeze protected. Sensing line pairs for flow, manometric
level, and differential pressure instruments will be run together where
possible, insulated, and freeze protected as a group, if subject to freezing.
Instrument sensing lines connecting to high-temperature systems, which might
become hot enough to injure personnel during blowdown of the instrument line,
will be insulated where such hazard exists. Where freezing conditions do not
exist, instrument sensing line installations containing condensate pots will not
be insulated from the condensate chamber to the instrument. Where freezing
conditions do exist, install heat tracing from the condensate chamber to the
instrument to avoid freezing. Insulation materials, exterior finish, and metal
lagging will conform to the standards adopted for the process piping, as
discussed in 2.7.2.5, Insulation and Lagging, of this manual.
Criteria for Routing of Instrument Sensing Lines and Air Lines
Routing of instrument primary piping, including piping from the process
connection through the root valve and the instrument sensing line, will be in
accordance with the following criteria.
Special fittings, such as reservoirs, condensate chambers, and other devices,
shall be installed at the primary flow element connections, as required by the
design of the instrument, in accordance with instructions of the instrument
supplier.
Pressure sensed by the instrument will differ from pressure in the process if
there is a head of liquid in the instrument line. This effect may be significant
if the instrument line static head is large in comparison with the pressure
being sensed. This effect can be accounted for in calibration of the instrument
if the static head is constant. To assure a constant static head, the
connections from low-pressure steam and low-pressure, liquid-filled lines should
preferably slope downward continuously from the primary element connection to
the instrument. Horizontal runs should have a slope of not less than 1/2 inch
per foot and must be adequately supported to maintain a constant slope. If
downward slope is not feasible, the line should slope upward continuously and a
loop seal (steam service only) installed at the instrument to assure a water
seal for temperature protection. Upward sloping liquid lines should be used only
if the process pressure is sufficient to assure a head of liquid at the
instrument. Provision for venting of air should be provided in high point of
line. Vacuum connections to the condenser and low-pressure extractions should
always slope upward to the instrument.
Instrument sensing lines for steam flow, liquid flow, and manometer level
measurement systems should preferably slope downward from the primary element
connections to the instrument. Instrument sensing lines for flue gas and air
flow measurement systems should preferably slope upward from the primary element
connections to the instrument. If these requirements cannot be met, special
venting or drain provisions will be required. Horizontal runs must have a slope
of not less than 1/2 inch per foot and must be adequately supported to maintain
a constant slope.
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Instrument air supply line takeoffs from the plant instrument air header will be
from the top of the air header. Horizontal runs will have a slope of not less
than 1/2 inch per foot and must be adequately supported to maintain slope.
Instrument sensing lines will be grouped together as much as practical to
benefit from the use of common support members and to present a finished
installation that is routed in a neat and orderly manner. Care will be exercised
to assure that spacing between adequate tubes in the same group is maintained
uniform and that tubes do not cross under or over one another.
Changes in direction of tubing will be by the use of bends. Bend radius will not
be less than three diameters.
Instrument sensing lines and air lines will be routed as directly as practical
from the process root valve to the instrument or end device. The length of the
lines shall be limited to a maximum of 40 feet for compressible fluids and 50
feet for non-compressible fluids.
The maximum process temperature for all transmitters shall be limited to 180
degrees F. Therefore, on all transmitter installations where the process
temperature exceeds 180 degrees F, the sensing line shall be of sufficient
length to dissipate the heat. Instrument installations where dual sensing lines
are used; such as flow or other differential applications, the instrument
sensing lines shall be routed as to avoid high temperatures and both sensing
lines should be maintained at the same temperature.
Support of Instrument Sensing Lines and Air Lines
Instrument sensing lines will be continuously supported to assure maintaining
proper slope.
Instrument Racks, Stands and Supports
All remote-mounted instruments, which are not subject to freeze damage, will be
mounted on O'Brien Modular Instrument Support Systems with Unistrut members, or
approved equivalent added when specified on the support detail drawings.
The supports will provide easy access and visibility to the instrument.
Wall or column mounted instruments will be installed so that the instrument
centerline is approximately 4'6" above the floor or grating.
Thermowells and Protecting Tubes
Fluid system temperature sensors will be equipped with thermowells and will be
constructed of Type 316 stainless steel and have a stepless tapered design. The
sizes of the connections will be as defined in the , Mechanical Engineering
Design Criteria. Threaded temperature wells in lines operating above 600 psi
shall be seal welded after installation.
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Thermowells in main steam, hot and cold reheat steam, extraction steam, and
feedwater piping will be designed to prevent vortex-induced vibration over the
range of velocities encountered in normal service as per ASME Performance Test
Code 19.3, Temperature Measurements.
Temperature detectors in exhaust gas and air ducts shall be mounted in
protecting tubes to provide mechanical support and will be retractable
externally from the duct to permit replacement while in operation. Protecting
tubes will be made of Type 316 stainless steel pipe not smaller than 1/2-inch
size, with screwed pipe bushings welded to the tubes for attachment to the
ducts. Duct connections will consist of screwed couplings or adapter flanges
welded to the ducts, into which the bushings on the protecting tubes can be
threaded. Duct connections will be located to minimize the effect of temperature
stratification within the ducts. Protecting tubes exceeding 3 feet in length
will be provided with additional supports within the boiler casing or duct and
will be of a flow-through design, such that the time constant of the temperature
detector does not exceed 3 seconds.
Thermocouples and Resistance Temperature Detectors
Thermocouples will be of the dual element, chromel-alumel type (ISA Type K) with
Type KX extension wire. Thermocouples and extension wire will comply with the
standard limits of error as per ANSI MC96.1-1975. The elements as a rule will be
separate from ground (ungrounded).
Resistance temperature detectors (RTD's) will be of the duplex three-wire
platinum type. The nominal resistance of the platinum detectors will be 100 ohms
at 0 C. All RTD's for measurement of fluid system temperature will be
ungrounded, metal-sheathed, ceramic-packed, and suitable for the design
temperature, pressure, and velocity of the fluid system.
Thermocouples and RTD's will have sheathed elements spring-loaded to provide
good thermal contact with the well or protecting tube. The sheath will be made
of stainless steel having swaged-type magnesium oxide insulation. All connection
heads will be rated NEMA 4, made of cast aluminum with screwed covers, and
supported from the well by a stainless steel extension nipple.
Transmitters
Transmitters will be used to provide the required 4 to 20 mA dc signals for all
controllers and receivers. Transmitters will be of the electronic two-wire type,
capable of driving a load up to 750 ohm, and will be powered from the plant
distributed control system (DCS).
Transmitters will be mounted such that the electronic housing is directly above
the valve body. The valve body for all differential pressure transmitters (dP,
level, flow) will be installed with sensing points on a horizontal plane.
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Static Pressure and Differential Pressure Transmitters
Static pressure and differential pressure transmitters shall be Rosemount, model
1151 with smart electronics option, or approved equivalent.
Three valve manifolds will be mounted on all differential pressure transmitters
for calibration and isolation purposes. Five valve manifolds will be used on
instrument applications where it is necessary to fill the sensing line under
pressure (e.g., drum level transmitter). All manifolds will have a set of capped
1/4" FNPT test connections on the instrument side of the isolation valve.
Level Transmitters
Sensing elements for level transmitters will be of the following types:
o Static head devices for vessels exposed to atmospheric pressure; air
bubbler-type devices may be used if absorption of air by the liquid is not
objectionable. (Level transmitters of this type are the same as static
pressure transmitters.)
o Differential pressure type with constant head chamber for high-pressure
and temperature applications. (Level transmitters of this type are the
same as differential pressure transmitters.)
o Displacement float type for enclosed vessels of limited height.
o Moving float type for fuel oil storage tanks.
o Ultrasonic type for specialized applications.
Flow Transmitters
Flow transmitters for general applications will be of the differential pressure
type:
o Primary Elements. Flow nozzles will be used for main steam flow, feedwater
flow, and other critical measurements where weld-in construction is
required. Flow nozzles will be made of stainless steel, with dual sets of
pressure taps installed in the pipe wall, where required. Installation of
flow nozzles and pressure taps will be made in the pipe fabricator's shop,
with provisions for witness of the installation process by a
representative from the flow nozzle manufacturer.
Orifice plates will be used for other flow measurements where flanged
construction and higher pressure loss are acceptable. Orifice plates will
be made of stainless steel. Orifice flanges will be of the raised-face,
weld-neck type with dual sets of taps.
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Construction and installation of flow nozzles and orifices will conform to
the requirements of ASME Performance Test code PTC-19.5, and discharge
coefficients will be predicted in accordance with data published in ASME
Research Report on Fluid Meters.
o Secondary Elements. Secondary elements for differential-type flow sensors
will be strain gauge or capacitance-type differential pressure
transmitters. Square root extraction required for the differential
pressure transmitters will be performed in the plant DCS.
Temperature Transmitters
Temperature transmitters will not be used. Temperature elements will be wired
directly to the plant DCS for temperature monitoring.
Temperature, Pressure, Level, and Flow Switches
Where direct digital measurements are required, temperature, pressure, level,
and flow switch set points will be adjustable with a calibrated scale to
indicate the set point. Contacts will be of the snap-acting type, except for
moving float and displacement-type level switches. In general, process digital
control will be performed in the plant DCS except for packaged systems with
integral control systems.
Temperature Switches
Temperature switches will be actuated by filled bulb-type elements equipped with
standard-length armored capillary tubing.
Pressure Switches
Pressure switches will be actuated by disk- or diaphragm-type elements. Pressure
switches will be selected based on the process conditions.
o General static pressure switches or differential pressured switches for
normal static pressure shall be SOR, Inc. or acceptable equal.
o Low-differential pressure switches for low-static pressure ranges shall be
manufactured by SOR, Dwyer Instruments, Inc., or acceptable equal.
o Low-differential pressure switches for high-static pressure shall be SOR
Series 102/103 or acceptable equal.
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Level Switches
Level switches will be actuated by elements of the following types:
o Static head devices for vessels exposed to atmospheric pressure; air
bubbler-type devices may be used if absorption of air by the liquid is not
objectionable. (Level switches of this type are the same as static
pressure switches.)
o Differential type for high-pressure and high-temperature applications.
(Level switches of this type are the same as differential pressure
switches.)
o Moving float type for enclosed vessels.
o Displacement float type for open tanks and sumps.
o Ultrasonic or capacitance type for specialized applications.
Switching elements of moving float and displacement float-type level switches
will be Magnetrol or acceptable equal, having float and body construction
appropriate to the service conditions of the systems to which they are
connected. Switch elements shall be of the vibration-resistant, mercury
bottle-type magnetically coupled to the float. The switch element shall be
reversible for NC or NO operation or shall be double-throw construction. Switch
element leads shall be of high-temperature construction and terminated on
terminal blocks within the switch housing. Switch housings shall be splashproof
construction, unless otherwise specified.
Flow Switches
Variable-area or differential pressure-type actuating elements will be used for
low flow and low-pressure applications. Paddle-type devices may be used for
selected applications for flow/no-flow monitoring.
Local Indicators
Local Temperature Indicators (Thermometers)
Thermometers for local mounting will be Ashcroft "Duratem" P600B 4-1/2-inch dial
"Every angle" gas-actuated thermometers, or acceptable equal. Thermometers for
panel mounting shall be Ashcroft 600A gas-actuated with an aluminum hinged ring
case and stainless steel-armored capillary tubing of the length required for
installation, with 4-1/2-inch minimum dial size, or acceptable equal. Dial
scales shall be so that the normal operating range is in the middle third of the
dial range. Separate nameplates of engraved laminated phenolic or stamped
stainless steel will be furnished to identify the service. Thermowells will be
furnished for all thermometers.
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Local Pressure Indicators (Pressure Gauges)
Gauges for control air supply and signal pressures integral to an instrument
will be in accordance with the instrument manufacturer's standards. All other
gauges shall be Ashcroft "Duragauge," with 4-1/2-inch minimum dial size, or
acceptable equal. Dial scales shall be so that the normal operating range is in
the middle third of the dial range. Separate nameplates of engraved laminated
phenolic or stamped stainless steel will be furnished to identify the service.
All gauges, except on control air service, will have stainless steel movements
and nylon bearings. Gauges for panel mounting shall be Type 1377. Gauges for
separate mountings shall be Type 1379 with 1/2-inch NPT bottom connections.
Except control air gauges or those equipped with diaphragm seals, gauges on
pulsating process services shall be furnished with an Ashcroft 1106 Pulsation
Dampener made of the same material as the Bourdon tube. Gauges for fluids which
may be corrosive to the gauge internals will be furnished with glycerin-filled
cases and diaphragm seals.
Local Level Indicators (Gauge Glasses)
Tubular gauge glasses will be used for low-pressure applications. Transparent or
reflex gauges will be used for high-pressure applications. All gauge glasses
will be equipped with gauge valves, including a safety ball check.
Flow Indicators
Sight flow and variable flow indicators will be used for low-pressure and
low-temperature applications. The use of sight and variable flow indicators will
be restricted to applications where quantitative measure of flow is not
required.
Flow indicators for high-pressure and high-temperature applications are not
anticipated.
Solenoid Valves
Solenoid valves will be provided by the Automatic Switch Company (ASCo), or
acceptable equal. Solenoid coils will be Class H high-temperature construction
rated at 105 to 140 VDC and will be designed for continuous duty. Three-way
solenoid valves will be designed for universal operation so that the supply air
may be connected to any port. Solenoid enclosures will be NEMA 4X.
For control valve applications, the solenoid valve will be rigidly mounted to
the control valve. The operation of the solenoid shall support the failure
action of the control valve on the loss of either power or air. The internal
orifice shall be the maximum size available so as to not impede the normal
operation of the valve.
Panel-Mounted Indicators
Panel-mounted indicators will be of the vertical scale, solid-state type with
flat glass face.
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Modulating-Type Control Systems
Electronic Control Systems
Electronic control systems will utilize solid-state hardware. System strategies
will be implemented, using digital computing techniques.
Pneumatic Controllers
Pneumatic controllers will generally be limited to the following applications:
o Control loops which require only proportional or proportional plus reset
action, but require no remote manual positioning by the control room
operator.
o Control loops that do not require any interface with any receiver
installed in the main control room or control equipment room.
Pneumatic temperature controllers will have filled bulb-type sensing elements.
Pneumatic pressure controllers will have Bourdon tube sensing elements.
Motor Controls
Motor Interlocks
Motor interlocks will be designed in accordance with the following criteria:
Protective Interlocks
The protective interlocks for each motor and its associated equipment will be
designed as follows:
o To prevent the motor from being started if the starting permissives
required for safe operation are not satisfied.
o To automatically stop the motor under unsafe operating conditions when any
action by the operator may be too slow to prevent the motor and its
associated equipment from being damaged.
o To automatically start any standby equipment as a result of a motor trip
and/or as required by the process.
o To provide information to the operator of the equipment status at all
times.
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o To provide alarms to alert the operator when any critical operating
parameter is approaching its limit or when an abnormal operating condition
occurs.
Control Room Manual Controls
The control devices required for manual control by the operator will be from
keyboard and CRT operator control stations.
Standby Starts
Components in a system, such as turbine ac and dc lube oil pumps, which are
paired to back up each other will have a standby mode imposed upon the
protective interlock scheme. If the redundant pump is in the standby mode when
the operating pump is tripped, or a process parameter indicates that the
operating pump has failed, the standby pump will standby-start. After a pump has
started in the standby mode, the pump will not stop automatically, except on a
trip condition. An alarm will alert the operator that the pump has
standby-started.
Automatic Starts and Stops
Equipment in some systems will operate in an automatic mode in which the
starting and stopping of a motor are initiated automatically. An example of the
automatic mode would be a tank fill pump that automatically starts at a low
level and stops at a high level. Automatic motor actuations will not be alarmed
unless the automatic action is initiated by a protective interlock.
Sequential Controls
Sequential controls apply control logic to a group of motors and associated
auxiliaries, such as solenoid-operated valves. The basic functions are to
coordinate the operation of all components within a functional group and to
automatically start or stop all components in a predetermined sequence without
the operator initiating any step-by-step control during the process.
Design Criteria
Sequential control systems will be designed according to the following design
criteria:
o All controls for motor-operated and solenoid-operated devices within a
system will be grouped according to their functions.
o Each group will have two modes of operations: sequential automatic and
sequential manual.
o When in the sequential automatic mode, a group will be started or stopped
by the operator with a single switching action, and the control system
will automatically step through the sequence of operations. The control
system will provide logic for each group to monitor starting permissives,
initiate automatic operations, and alarm failure of the sequence and
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abnormal conditions. Where necessary, provisions will be made for manual
intervention in the operation of individual components.
o When in the sequential manual mode, each step of the sequence will be
initiated by the operator, and the appropriate groups of equipment will be
started and stopped by the controller during each step. Transfer between
sequential automatic and manual modes should bumpless.
o Graphic displays will be available on the operator control console CRT's
for the operator to follow the sequence of events during operation.
o If the system control panel is located away from the main control room,
each system will have a self-contained annunciator system, alarming
abnormal operating conditions. Provision will be made for interfacing the
local annunciator system with the plant DCS for critical alarm points.
Local Control Hardware
Small fans and pumps that have no direct impact on unit generation will be
controlled by local control switches. Switches will be momentary ON-OFF
pushbuttons or selector switches. A single red indicating light above the ON
pushbutton will indicate energization of the equipment motor, where required.
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Mechanical Engineering
Design Criteria
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MECHANICAL ENGINEERING DESIGN CRITERIA
Introduction
This section covers the design criteria which will be used for all mechanical
work related to this project.
Design Codes and Standards
Except for Emissions, Noise and Effluents, the design and specification of all
work will be in accordance with all applicable laws and regulations of the
federal government and applicable regional and local codes and ordinances.
Emissions, Noise and Effluents shall be as defined in the contract. A listing of
the codes and industry standards to be used in design and construction follows:
1) The Anti Friction Bearing Manufacturers Association (AFBMA).
2) American Gear Manufacturers Association (AGMA).
3) American Institute of Steel Construction (AISC).
4) Air Moving and Conditioning Association (AMCA).
5) American National Standards Institute (ANSI).
6) American Petroleum Institute (API).
7) American Society of Heating, Refrigerating, and Air Conditioning Engineers
(ASHRAE).
8) American Society of Mechanical Engineers (ASME).
9) American Society for Testing and Materials (ASTM).
10) American Welding Society (AWS).
11) American Water Works Association (AWWA).
12) Edison Electric Institute (EEI).
13) Heat Exchange Institute (HEI).
14) Hydraulic Institute (HI).
15) Institute of Electrical and Electronics Engineers (IEEE).
16) Industrial Gas Cleaning Institute (IGCI).
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17) Instrument Society of America (ISA).
18) Manufacturers Standardization Society of the Valve and Fitting Industry,
Inc. (MSS).
19) National Electrical Manufacturers Association (NEMA).
20) National Electric Code (NEC).
21) National Fire Protection Association (NFPA).
22) Occupational Safety and Health Administration (OSHA).
23) Pipe Fabrication Institute (PFI).
24) Steel Structures Painting Council (SSPC).
25) Tubular Exchanger Manufacturers Association (TEMA).
26) Underwriters' Laboratories (UL).
Other recognized standards will be used as required to serve as design,
fabrication, and construction guidelines when not in conflict with the
above-listed standards.
The codes and industry standards used for design, fabrication, and construction
will be the codes and industry standards, including all addenda, in effect as
stated in equipment and construction purchase or contract documents.
Piping
Piping will be designed, selected, and fabricated in accordance with the
following criteria:
Design Temperature and Pressure
The design pressure and temperature for piping will be consistent with
conditions established for the design of the associated system.
The design pressure of a piping system generally will be based on the maximum
sustained pressure that may act on the system plus 25 psi. The main steam piping
design pressure will be in accordance with applicable codes. All design pressure
values will be rounded up to the next 10 psi increment.
The design temperature of a piping system generally will be based on the maximum
sustained temperature which may act on the system plus 10 F. The piping design
temperature will be rounded up to the next 5 F increment.
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General Design and Selection Criteria
Piping will be designed in accordance with the requirements of the Code for
Pressure Piping, ANSI B31.1 - Power Piping, or other codes and standards
referenced in Design Codes and Standards, of this section, as applicable.
Piping which is 1-1/4, 5, or 7 inches in size will not be utilized for general
system design. However, it is recognized that short segments may be required at
connections to equipment.
Minimum wall thicknesses of straight pipe under internal pressure will be
designed in accordance with one of the following equations, as found in
Paragraph 104.1.2 of ANSI B31.1.
PDo
tm = --------- + A or
2(SE + Py)
Pd + 2SEA + 2 yPA
tm = ----------------- ,
2(SE + Py - P)
where
tm = minimum required wall thickness, inches,
P = internal design pressure, psig,
Do = outside diameter of pipe, inches,
d = inside diameter of pipe, inches,
SE = maximum allowable stress in material due to internal
pressure and joint efficiency.
A = an additional thickness to compensate for threading,
mechanical strength, and corrosion or erosion, inches.
y = a coefficient having the following values, as given in ANSI
B31.1, Table 104.1.2(A).
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<TABLE>
<CAPTION>
Temperature
-----------------------------------------------------------------------------------------------
900 degrees F 1150 degrees F
and and
Material Below 950 degrees F 1000 degrees F 1050 degrees F 1100 degrees F Above
- -------------------- ------------- ------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Ferritic steels 0.4 0.5 0.7 0.7 0.7 0.7
Austenitic steels 0.4 0.4 0.4 0.4 0.5 0.7
Nonferrous materials 0.4
</TABLE>
Allowance for variations from normal operation, consideration for local
conditions, and transitions will be in accordance with Paragraphs 102.2.4 and
102.2.5 of ANSI B31.1.
The value of SE will not exceed that given in Appendix A of ANSI B31.1 for the
respective material at the design temperature. These values include the weld
joint efficiency.
The value of A must be selected to compensate for material removed in threading,
corrosion, and erosion and to provide mechanical strength. The following minimum
allowances should be applied.
o Special wall piping 2-1/2 inches and larger - The value of A will be at
least 0.0625 inch.
o Schedule wall piping 2-1/2 inches and larger - The value of A will
generally be zero except when additional thickness is considered necessary
for a specific service.
o Schedule wall piping 2 inches and smaller - The value of A should be
selected to provide adequate mechanical strength. A minimum A value of
0.062 inch is suggested but is not mandatory.
o Threaded piping - The value of A will not be less than the depth of
thread.
The pressure temperature ratings for plain end seamless schedule wall pipe will
be based on minimum wall values which are 87-1/2 percent of the nominal pipe
wall thicknesses with the value of A equal to zero. This will make allowance for
the minus 12-1/2 percent manufacturing tolerance on wall thickness.
The pressure temperature ratings for fusion welded, or forged and bored,
schedule wall pipe will be based on the appropriate manufacturing tolerances and
the required A value.
Material selection will generally be based on the design temperature and service
conditions in accordance with the following:
o All power cycle piping will be of metallic materials.
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o The use of fiberglass-reinforced plastic (FRP) and polyvinyl chloride
(PVC) piping will be limited, as shown in Table 1.
o Carbon steel piping materials will be used for design temperatures less
than or equal to 750 degrees F.
o 2-1/4 percent chromium alloy steel piping materials will be used for
design temperatures greater than 750 degrees F.
o 5 percent chromium alloy steel piping materials will be used where
flashing may occur, including heater drains service.
o Stainless steel piping materials will be used as follows:
-- Piping applications requiring a high degree of cleanliness generally
including injection water supply piping after strainers, air
compressor inlet piping, miscellaneous lubricating oil system
piping, and sampling piping after process isolation valves.
-- Piping from deaerator vents, except piping to atmosphere after last
valves.
-- Demineralized water applications.
-- Piping generally subjected to corrosive service applications.
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Table 1
Application of PVC and FRP Piping
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Application PVC FRP
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Power Plant Thermal Cycle None None
Circulating Water System None *
Demin/H2O Treatment
Demineralizer drains above ground X None
Demineralizer drains below grade (if applicable) None X
Circ. Water H2O Chem. Feed (Chlorine Solutions
Above ground and direct ground burial X None
Cast into concrete None X
Roof Drains** X None
Plant Equipment and Drains Piping*** X X
Overflow Drains on Chemical Solution Tanks X --
Chemical Waste Pump Discharge -- X
Potable Water Supply (Limited Applications) X --
Sanitary Drains Piping X --
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Additional application rules for plastic (PVC, FRP, and HDPE) piping:
Limited to low-pressure applications. Normally system pressure drop and static
head. The pressure limited to 50 psig with exception of potable water
applications.
PVC will not be cast into concrete. FRP or metallic piping will be used.
PVC and FRP will only be purchased from specific suppliers identified for use on
a specific project.
Detailed installation and fabrication specs will be invoked on the project.
Certification of joiners will be specified.
Flanged pipe will be avoided, when possible, in chemically aggressive
application.
HDPE will only be used when needed to solve site-specific application issues,
subject to Westinghouse approval.
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* May be required for sea water and other highly corrosive waters when
significant economic incentive is demonstrated, subject to Westinghouse
approval.
** PVC above grade; ductile iron or cast iron below grade.
*** Generic drains are CS above grade and ductile iron or cast iron.
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o Copper piping materials will be used for aboveground control air piping
and for 2-inch and smaller service air piping in which cleanliness is
critical.
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o Underground circulating water piping will be either ductile iron or
prestressed concrete embedded cylinder pipe with concrete-encased welded
steel pipe at locations under buildings. Aboveground circulating water
piping will be welded steel.
o The above-listed materials, or other suitable piping materials listed in
Miscellaneous Piping Design and Selection Criteria, below will be used
where required for special service to meet specific requirements.
Materials selected for use with main cycle systems, except for condenser tubes
and tube sheet, will be free of copper materials.
Miscellaneous Piping Design and Selection Criteria
The minimum pipe size and wall thickness for miscellaneous piping, other than
control and instrument piping, will generally be in accordance with the
following criteria:
1) The pipe size will be 3/4-inch minimum, except for sample piping.
2) Sample piping shall be 3/8-inch stainless steel tubing, 0.065 minimum
wall, to reduce sample lag time.
Control and Instrument Piping Design and Selection Criteria
Control and instrument piping will generally be designed in accordance with the
following criteria:
o The piping and instrument diagrams will indicate the size and selection
information for piping through the root valves. The line sizes and
selection information of piping after the root valves will not be called
out on the piping and instrument diagram. The size requirements for
control and instrument piping are stated in Control Engineering Design
Criteria, of this Project Design Manual.
o Pressure connections and piping through the root valves for all pressure
indicators, pressure switches, pressure transmitters, etc., will be as
indicated for miscellaneous piping.
o Flow transmitter connections and piping through the root valves will be
3/4 inch for all piping except orifice flanges where 1/2-inch piping and
valves will be used.
o Level switch connections and piping through root valves will be 3/4 inch.
o Level controllers and level transmitters of the differential pressure type
will have connections and piping through root valves of 3/4 inch.
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o Level controllers and level transmitters of the differential pressure type
will have connections and piping through root valves of 3/4 inch.
o Instrument columns at tanks and pressure vessels will generally be 2-1/2
inch minimum.
Vent and Drain Piping Design Criteria
Vent and drain piping will generally be in accordance with the following
criteria:
o Vent and drain piping through the isolation valve to the vent or drain
line termination will be as described for miscellaneous piping.
o Vent connections will be provided at all high points in water and oil
piping, and all high points in other piping, including steam lines, which
will be hydrostatically tested.
o Drain connections will be provided at all nondrainable points in steam,
water, and oil piping, and all other piping, which will be hydrostatically
tested.
o Drain connections will be provided at all control valve stations. The
drain will be located to drain the control valve as completely as
possible.
o All vent and drain connections will be provided with isolation valves. All
vents will use globe valves. All drains will use gate valves to resist
pluggage, if possible. Otherwise, globe valves will be used for drains.
o Vent and drain connections that require frequent operation will be piped
to a suitable drain. Vent or drain connections that will normally require
operation at a time when hot fluids will be discharged will be piped to a
safe termination point (drain funnel or floor area discharge). All other
connections will terminate with the isolation valve.
Piping Materials
Piping materials will be in accordance with applicable ASTM and ANSI standards.
Materials to be incorporated in permanent systems will be new, unused, and
undamaged. Piping materials will generally be in accordance with the following
criteria:
o Steel and Iron Pipe: Carbon steel piping 2-inch nominal size and smaller
will be ungalvanized ASTM A 106, Grade B minimum.
o Carbon steel piping 2-1/2-inch through 26-inch nominal size will be
ungalvanized ASTM A 53, Grade B seamless or A 106, Grade B, with the
indicated grades as a minimum. Carbon steel piping larger than 26-inch
nominal size will be ASTM A 672 Grade B70, Class 21, for steam service,
and ASTM A 134 (with ASTM A 283 Grade C plate material) for cold water
service, with the industrial grades as a minimum.
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o The use of ASTM A 53 piping material will be limited to 2-1/2-inch nominal
size and larger piping, with a design temperature of 200 F or less and a
design pressure of 200 psig or less.
Alloy steel pipe, including large-diameter special wall pipe, will be
ungalvanized seamless type. Alloy steel pipe with a 2-1/4 percent chromium
content will conform to ASTM A 335, Grade P22. Alloy steel pipe with a 5
percent chromium content will conform to ASTM A 335, Grade P5. Alloy steel
pipe with a 9 percent chromium content will conform to ASTM A335, Grade
P91.
Stainless steel pipe will be ASTM A 312, Grades TP 304, TP 304L, TP 316,
or TP 316L, seamless piping. All stainless steel piping materials will be
fully solution annealed prior to fabrication. The type 316 materials will
be utilized for high resistance to corrosion. the type 316L materials will
be utilized for applications requiring hot working (welding, etc.) and
when the piping will handle solutions that are high in chlorides.
Schedule numbers, sizes, and dimensions of all carbon steel and alloy
steel pipe will conform to ANSI B36.10. Sizes and dimensions of stainless
steel pipe designated as Schedule 5S, 10S, 40S, or 80S will conform to
ANSI B36.19. Schedule numbers, sizes, and dimensions of stainless steel
pipe not designed as 5S, 10S, 40S, or 80S will conform to ANSI B36.10.
Steel plate piping will be of the welded straight seam type.
Miscellaneous pipe 2 inches and smaller will be color coded the full
length of each pipe to indicate different types and grades.
o Rubber-Lined Pipe. Lining materials for rubber-lined carbon steel pipe,
method of application, and lining manufacturer will be chosen in
accordance with the service requirements.
o Copper Alloy Pipe. Copper alloy pipe will conform to ASTM B 43, Seamless
Red Brass Pipe.
o Polypropylene-Lined Pipe. Polypropylene-lined pipe will be ASTM A 53 steel
pipe with an applied liner of polypropylene. The pipe will be as
manufactured by Dow Chemical Company, Resistoflex Corporation, Peabody
Dore, or acceptable equal.
o Fiberglass-Reinforced Plastic Pipe. Fiberglass-reinforced plastic pipe
will be chosen in accordance with the specific service requirements.
o Polyvinyl Chloride Pipe. Polyvinyl chloride (PVC) pipe will conform to
ASTM D 1785 or ASTM D 2241. PVC piping for roof and floor drain service
shall conform to ASTM D 2665.
o Alloy 20 Pipe. CR-Ni-Fe-Mo-Cu-Cb stabilized alloy piping (Alloy 20) will
conform to ASTM B 464 UNS NO8020.
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Tubing Materials
Tubing materials will generally be in accordance with the following criteria:
o Copper Tubing. Copper tubing 3/8 inch and smaller will be light-drawn
temper tubing conforming to ASTM B 75. Copper tubing 1/2 inch and larger
will be ASTM B 88, type K drawn temper.
o Copper tubing will be oxygen-free or phosphorus-deoxidized copper.
Oxygen-bearing tough pitch copper tubing will not be used.
o Stainless Steel Tubing. Stainless steel tubing will conform to ASTM A 213,
Type 316. All stainless steel tubing will be the fully annealed type, with
a carbon content greater than 0.04 percent. Stainless steel tubing for use
with tubing fittings will not exceed Rockwell B80 hardness.
o Tubing Wall Thickness. Wall thickness for tubing shall be in accordance
with this specification
Fitting Materials
Fittings will be constructed of materials equivalent to the pipe with which they
are used, except for polypropylene-lined cast iron or ductile iron fittings
which will be used with polypropylene-lined steel pipe, and rubber-lined cast
iron or ductile iron fittings which will be used with rubber-lined steel pipe.
o Steel Fittings. Steel fittings 2-1/2 inches and larger will be of the butt
welding type, and steel fittings 2 inches and smaller will be of the
socket welding type.
o Butt Welding Fittings. The wall thicknesses of butt welding fittings will
be equal to the pipe wall thickness with which they are used. The fittings
will be manufactured in accordance with ANSI B16.9, ANSI B16.28, and ASTM
A 234 or ASTM A 403.
o Forged Steel Fittings. Forged steel fittings will be used for socket weld
and steel-threaded connections and will conform to ANSI B16.11. The metal
thicknesses in the fittings will be adequate to provide actual bursting
strengths equal to or greater than those of the pipe with which they are
used.
The minimum class rating of socket weld and threaded fittings used with
various pipe schedules will be Class 3000 and Class 2000, respectively.
o Cast Steel-Flanged Fittings. Cast carbon steel-flanged fittings will
conform to ANSI B16.5 and will be of materials conforming to ASTM A 216
Grade WCB.
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o Adapters. Reducing outlet tees or specially designed adapters shall be
used for branch piping 2-1/2 inches and larger. The type of branch
connection shall be determined and run sizes as indicated in the following
tables. Specially designed adapters must be postweld heat treated, when
required by the material specification. Specially designed adapters will
be Weldolets or Sweepolets, as manufactured by Bonney Forge and Tool
Works, WFI International, Inc. or equal.
Branch connections 2 inches and smaller will be made with special
reinforced welding adapters, Bonney Forge and Tool Works Thredolets or
Sockolets or equal, or will be special welded and drilled pads.
o Rubber-Lined Pipe Fittings. Flanged cast iron or ductile iron fittings
used with rubber-lined pipe will be lined with the same materials as the
pipe with which they are used.
o Brass and Bronze Fittings. Screwed brass and bronze pipe fittings will
conform to ANSI B16.15. Flanged brass and bronze pipe fittings will
conform to ANSI B16.24.
o Polypropylene-Lined Ductile Iron Fittings. Flanged ductile iron fittings
used with polypropylene-lined steel pipe will be ductile iron fittings
conforming to ANSI A21.10 and will be lined with the same material as the
pipe with which they are used.
o Fiberglass-Reinforced Plastic Fittings. Fittings and joints for use with
fiberglass-reinforced plastic pipe will be compatible with and furnished
by the same company as the fiberglass pipe.
o Polyvinyl Chloride Fittings. Polyvinyl chloride pipe fittings will be
manufactured from PVC material of the same type as the pipe with which
they are used. The fittings will have socket ends with internal shoulders
designed for solvent cementing.
o Tubing Fittings. Brass fittings will be used with ASTM B 75 copper tubing
and will be of the flareless "bite" type (Swagelok or similar). Braze
joint fittings will be used with ASTM B 88, Type K copper tubing and will
be wrought copper, bronze, or brass conforming to ANSI B16.22.
Stainless steel fittings will be used with stainless steel tubing.
Fittings for use with stainless steel tubing in sizes smaller than 3/4
inch will be of the flareless "bite" type (Swagelok or similar), and
fittings for use with tubing in sizes 3/4 inch and larger will be socket
weld type conforming in general design to ANSI B16.11. Fitting material
and bursting strength will be equivalent to the tubing with which they are
used.
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Flanges, Gaskets, Bolting, and Unions
Flanged joints will be in accordance with the following requirements:
o Flange Selection. Flanges mating with flanges on piping, valves, and
equipment will be of sizes, drillings, and facings which match the
connecting flanges of the piping, valves, and equipment.
Flange class ratings will be adequate to meet the design pressure and
temperature values specified for the piping with which they are used.
Flanges will be constructed of materials equivalent to the pipe with which
they are used.
o Steel Flanges. Steel flanges will conform to ANSI B16.5.
Steel flanges 2-1/2 inches and larger will be of the weld neck or slip-on
type, and all steel flanges 2 inches and smaller will be of the socket
type. Slip-on flanges will generally be used only when the use of weld
neck flanges is impractical. Steel flanges will have raised-face flange
preparation. Flat-face flanges will be used to mate with cast iron,
ductile iron, fiberglass-reinforced plastic, polyvinyl chloride, or bronze
flanges.
Carbon steel flanges will be of ASTM A 105 material. Carbon steel flanges
will not be used for temperatures exceeding 750F.
Chromium alloy steel and stainless steel flanges will conform to ASTM A
182.
o Brass and Bronze Flanges. Brass and bronze screwed companion flanges will
be plain faced and will conform to Class 150 or Class 300 classifications
of ANSI B16.24. Drilling will be in accordance with ANSI Class 126 or
Class 250 standards.
Compressed fiber gaskets will be used with flat-face and raised-face flanges
within the limitations of the gasket materials. Spiral-wound gaskets will be
used with raised-face flanges for steam service. Gaskets containing asbestos are
not acceptable.
Gaskets will be suitable for the design pressures and temperatures.
o Compressed Fiber Gaskets. Compressed fiber gaskets will be in accordance
with ANSI B16.21, and materials will be suitable for a maximum working
pressure of 600 psi and a maximum working temperature of 750 F. Gaskets
will be dimensioned to suit the contact facing. They will be full faced
for flat-face flanges and will extend to the inside edge of the bolt holes
on raised-face flanges. Gaskets for plain-finished surfaces will be not
less than 1/16 inch thick and, for serrated surfaces, will be not less
than 3/32 inch thick. The gaskets shall be selected for the service
requirements in accordance with the manufacturer's recommendations.
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o Spiral-Wound Gaskets. Spiral-wound gaskets will be constructed of a
continuous stainless steel ribbon wound into a spiral with nonasbestos
filler between adjacent coils. The gasket will be inserted into a steel
gauge ring whose outside diameter will fit inside the flange bolts
properly positioning the gasket. The gauge ring will serve to limit the
compression of the gasket to the proper value. Compressed gasket thickness
will be 0.130 inch plus or minus 0.005 inch. The filler material shall be
Flexite Super, as manufactured by Flexitallic Gasket Company or acceptable
equal.
o Ring Joint Gaskets. Ring joint gaskets will be octagonal in cross section
and will have dimensions conforming to ANSI B16.20. Material will be
suitable for the service conditions encountered and will be softer than
the flange material.
o Rubber Gaskets. Rubber gasket materials will be cloth-inserted sheet
rubber, Johns-Manville Style 109 or equal, and will conform to ANSI
B16.21. They will be full face and 1/16 inch thick.
Flange bolting will conform to the following requirements:
o Alloy steel bolting will be used for joining all steel flanges, except for
large diameter low pressure water pipe flanges and will conform to the
following:
-- Bolting will conform to the requirements of ANSI B16.5.
-- Bolting will consist of threaded studs and two nuts for each stud.
-- Material for studs will be ASTM A 193, Grade B16, for piping design
temperatures 750 F and above, and Grade B7 for piping design
temperatures less than 750 F.
-- Material for nuts will be ASTM A 194, Grade 3, for piping design
temperatures 750 F and above, and Grade 2H for piping design
temperatures less than 750 F.
o Carbon steel bolting will be used for joining flanges on large diameter
low pressure water piping and will conform to the following:
-- Bolting will conform to the requirements of ANSI B16.1 and ANSI
B16.24.
-- Bolting for bolt sizes 1-1/2 inches and larger will consist of
threaded studs and two nuts. Bolting for bolt sizes less than 1-1/2
inches may be threaded studs and nuts or bolts and nuts.
-- Bolts and nuts will be heavy hexagonal head conforming to ANSI
B18.2.
-- Materials will be ASTM A 307, Grade B.
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o Buried and outside bolting will be cadmium plated in accordance with ASTM
A 165 or zinc plated in accordance with ASTM A 153.
Piping unions will be of the ground joint type constructed of materials
equivalent in alloy composition and strength to other fittings in the piping
systems in which they are installed. Union class ratings and end connections
will be the same as the fittings in the piping systems in which they are
installed.
Steel unions will have hardened stainless steel seating surfaces on both faces.
Cathodic Protection
Where required, underground piping will be electrically isolated from
aboveground piping and other steel components to allow the underground piping to
be cathodically protected. Isolation will be achieved by installation of
isolation flanges with insulating gaskets, bolt tubes, and washers.
Piping Fabrication
Piping fabrication will generally be in accordance with the requirements stated
herein.
Dimensions
The dimensions indicated on the drawings will not make allowance for welding
gaps or welding shrinkage, unless specifically required. Allowances will be made
for gaskets in the dimensions indicated. Fabrication will be to within plus or
minus 1/8-inch of the dimensions indicated on the drawings. When the symbol
"FC", meaning field check, appears on the drawings, the piping so indicated will
be fabricated long and cut to fit in the field.
The wall thickness and outside pipe diameter of all special wall piping will be
measured and recorded prior to fabrication. The spool weights of all special
wall piping will be calculated based on the actual dimensions of the piping.
Fittings
Fittings such as tees, crosses, elbows, caps, and reducers will be used for all
changes in direction, intersections, size changes, and end closures of piping,
unless the use of fittings is impractical.
Couplings will be used for joining straight lengths of 2-inch and smaller
piping.
Branch welds and mitered fittings will not be used except where specifically
required. The radius of mitered fittings will be equal to the diameter of the
pipe, and mitered segment angles will not exceed 15 degrees for aboveground
piping and 22-1/2 degrees for below ground piping.
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Welding adapters, drilled and welded pads, and branch weld connections will be
reinforced to meet the requirements of Paragraph 104.3 of ANSI B31.1. Safety
valve nozzles will be additionally reinforced, as required, to resist thrust due
to valve operation.
Welder Qualification and Welding Procedures
Welding procedures shall be written and qualified and welders, and welding
operators will be qualified in accordance with the requirements of Section IX of
the ASME B&PV Code. Records of the names of the welders who make each weld will
be maintained.
Documentation relative to the welder, welding operator, and procedure
qualification will be made available at a location where the work is being
performed and will be available for audit.
Qualification of field welders will be performed at the plant site or at other
facilities acceptable to the site manager.
The Contractor will obtain the service of an independent testing laboratory to
witness the welding, perform the required tests, and report results. The
Contractor will furnish all materials, welding equipment, and supplies for the
tests.
Welding Methods
Welding will be performed using an electric arc welding process. Only the
following welding processes will be permitted, subject to proper code
qualification:
o Shielded metal arc.
o Gas tungsten arc (GTAW).
o Flux cored arc (except self-shielded electrodes).
o Gas metal arc (except short-circuiting transfer mode).
o Submerged arc.
Field welds in piping systems will be made using the gas tungsten arc process
for the first welding pass. The remaining weld passes will be made using one of
the processes listed above.
All gas tungsten arc welds will be made with the addition of filler metal.
Backing rings will not be used for shop or field welds except where specifically
permitted by the System Field Welding and End Preparation List.
The application of heat to correct weld distortion and dimensional deviations in
austenitic stainless steels will be prohibited.
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Butt Weld End Preparation and Piping Fit-Up
Preparation of weld ends and fit-up will be in accordance with the requirements
stated below and the Field Butt Weld End Preparation details as shown in ANSI
B16.25.
Base metals for butt weld joints will be prepared by machining or mechanized
oxygen cutting. In specific instances where the use of the above equipment is
impractical, permission will be secured if hand oxygen cutting is to be
substituted. All slag and irregularities will be removed from oxygen cut ends
and hand cut ends will be ground smooth.
The butt weld end preparation of the base metals for shop welded joints will be
prepared as required by the welding procedure used.
The butt weld end preparation of the base metals for all field weld joints in
Contractor-furnished, shop-fabricated piping will be prepared in the
fabricator's shop in accordance with the System Field Welding and End
Preparation List and the referenced Field Butt Weld End Preparation detail
drawings. Counterbore diameters for special wall piping specified by minimum
wall will be determined in accordance with PFI ES-21.
To assure satisfactory fit-up for circumferential butt welds in piping systems
fabricated of rolled and welded plate, the following procedures will be
followed:
o The difference between major and minor diameters for a distance of 3
inches from the ends of the pipe will not exceed 1/8 inch or 1 percent,
whichever is less.
o If weld metal is used to obtain concentricity, the weld deposit will be
free from porosity or other defects, and the inside surface will be ground
smooth and blended smoothly into the pipe wall.
o Upon completion of the weld buildup and finishing procedures, the weld
will be inspected and radiographed in accordance with the applicable
testing and inspection requirements for the pipe prior to shop welding to
other sections or prior to shipment.
Terminals of equipment, valves, and piping accessories will be prepared for
welding in accordance with the System Field Welding and End Preparation List and
the Field Butt Weld End Preparation detail drawings. The weld end preparation
used for the mating end will be designed for compatibility with those end
preparations.
Piping which is being furnished "long" will be field cut to fit and prepared for
welding. The end preparation will be compatible with the mating end. Butt
welding ends of field-modified pipe will be prepared in accordance with the
Field Butt Weld End Preparation details.
Mating end joints between shop-fabricated sections will be prepared in the shop
for field welding in accordance with the System Field Welding and End
Preparation List and the field Butt Weld End Preparation details.
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Radial misalignment of inside surfaces of field-welded joints will not exceed
the value indicated on the applicable butt weld end preparation detail.
Control of inside diameters of weld ends will be by means of selection of piping
components, addition of weld metal and machining, or machining, as required.
Machining will be in accordance with the Field Butt Weld End Preparation
details.
Welding Filler Metal
When low hydrogen-type electrodes are used in welding procedures, the method
used for storing, handling, baking, drying, and reconditioning will be explained
in welding procedures or in a separate electrode control procedure.
Submerged arc multipass welds in carbon steels and all welds in alloy steels and
corrosion-resistant steels will use essentially a neutral flux.
Electrode numbers E6012, E6013, and E7014 will not be used for strength or seal
welds in piping systems.
The maximum diameter electrode used for shielded metal arc welding of austenitic
stainless steel will be 5/32 inch.
The maximum diameter filler rod used for gas tungsten arc welding of austenitic
stainless steel will be 1/8 inch.
Weld Reinforcement Limits
The interior and exterior surfaces of double-welded butt joints and the exterior
surfaces of single-welded butt joints will be sufficiently free from coarse
ripples, grooves, abrupt ridges, and valleys to be within the maximum
reinforcement limits permitted by ANSI B31.1
The interior reinforcement of single-welded butt joints will not exceed the
limits stated below. The reinforcement will be determined from the higher of the
abutting surfaces involved.
The internal reinforcement of welds not accessible for visual examination may be
evaluated by suitable nondestructive examination methods. All defective welds
will be repaired, regardless of the examination method by which they are
discovered.
Welding concavity, grinding, "suck-back," or other conditions will not result in
a weld thickness less than the minimum wall thickness of the base metal.
Arc strikes in P-5 Group 2 material will be confined to the area to be covered
by the weld. Arc strikes outside the weld area will be removed by grinding to a
smooth contour. The ground area will be visually examined for cracks, porosity,
and blemishes. Any defects in the ground areas
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will be removed and/or repaired. Ground areas may be left unrepaired if minimum
base metal thickness requirements have not been violated.
Backing Rings
Backing rings shall not be used.
Welding Preheat and Interpass Temperature
Preheat and interpass temperatures will be maintained in accordance with the
requirements of the applicable code. Electric or gas heat sources which provide
a uniform application of heat over the weld area will be used.
The maximum preheat and interpass temperatures for austenitic stainless steels
will be 350 F.
Postweld Heat Treatment
Stress relief of all welds will be performed in accordance with the requirements
of the applicable code. All welding zones, bends, and hot-formed sections will
be fully stress relieved, as required by the code.
Code requirements under the code for Pressure Piping, ANSI B31.1, Power Piping,
include stress relieving for piping materials generally being used in accordance
with the following criteria:
o Piping of ASME Section IX, P Number 1 materials with wall thickness
greater than 3/4 inch, including piping fabricated to the following ASTM
specifications:
-- A 53, Grades A and B
-- A 106, Grades A, B, and C
-- A 672, Grade B70, Class 21
o Piping of ASME Section IX, P Number 4 materials to which less than 250 F
minimum preheat has been applied, and piping of P Number 5 materials with
3 percent or lower chromium content to which less than 300 F minimum
preheat has been applied, with wall thickness greater than 1/2 inch or
with nominal diameter greater than 4 inches, or with maximum specified
carbon content over 0.15 percent, including piping fabricated to the
following ASTM specifications:
-- A 335, Grades P11 and P22
o Piping of ASME Section IX, P Number 5 materials with greater than 3
percent chromium content, including piping fabricated to the following
ASTM specification:
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-- A 335, Grade P5 and P91
Detailed instructions for postweld heat treatment will be given in the
applicable welding procedure specification or in a separate heat treatment
procedure.
Wherever possible, stress relieving will be performed by slowly heating the
entire assembly to the specified temperature, holding the temperature for the
required length of time, and then allowing the assembly to cool. Where this
procedure is impractical, local stress relieving may be employed.
Sections of pipe containing flow nozzles will not be full furnace stress
relieved.
Heating will be by means of electric induction coils, electric resistance coils,
or suitable gas burners. Oxyacetylene flame heating or exothermic chemical
heating methods will not be permitted.
Stress relieving is not required for seal welds.
Bends
Pipe bending will be used only when specifically required or where the use of
elbows is impractical.
All bends will be smooth, without buckles, and truly circular. The allowable
flattening, as determined by the difference between the minor and major axes,
will not be greater than 5 percent of the nominal diameter.
Allowance will be made for thinning of the pipe wall in accordance with the
requirements of paragraph 102.4.5 of ANSI B31.1 to assure that minimum wall
thickness after bending is not less than the minimum wall thickness required.
o Shop Bending. Cold bending will not be permitted. Pipe to be bent will
generally be sand filled and firmly tamped. The pipe will be uniformly
heated to a temperature between 1,700 F and 2,000 F, but not exceeding
2,000 F. Bending will not be done when the pipe temperature is less than
1,400 F on carbon steel pipe or less than 1,650 F on alloy pipe. A minimum
amount of water may be used to set carbon steel pipe bends. Upon
completion of the bending operation, the pipe will be allowed to cool
slowly in still air to approximately 700 F before removing the sand.
Hot and cold reheat piping and other large-diameter, thin-wall pipe will
be bent by the incremental bending process, if required, to meet the
requirements stated above for ovality and wall thickness. Incremental
bending may be done by the induction coil heating method or by the gas
ring heater method.
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o Field Bending. Cold bending in the field will be limited to seamless pipe
in sizes 1 inch and smaller when operating pressures or temperatures do
not exceed 250 psi or 450 F. The minimum radius of cold bends will not be
less than 8 nominal pipe diameters.
Bends in Schedule 40 pipe, or in heavier pipe having bending radii not
less than six nominal pipe diameters, will have no buckle deeper than 1.0
percent of nominal pipe diameter.
Hot bending in the field will be limited to seamless carbon steel pipe in
sizes 4 inches and smaller. The minimum radius of hot bends will not be
less than five nominal pipe diameters. All pipe to be bent will be
uniformly heated to a temperature between 1,700 F and 2,000 F, using
electric resistance heating or fuel-fired burners. Oxyacetylene flame
heating will not be permitted. Suitable provisions will be made for
maintaining uniform wall thickness and cross-sectional areas by sand
filling, dies, or other means.
Piping Attachments
All lugs, ears, and other attachments for support of piping will be welded to
the piping. Attachments for piping systems which must be stress relieved will be
welded to the pipe prior to final stress relieving. Attachments on
shop-fabricated piping which must be stress relieved will be shop welded to the
piping.
Erection lugs will be furnished for all field weld joints in vertical pipe over
12 inches in diameter in the following piping systems:
o Main Steam
o Boiler Feed (boiler feed pump discharge and suction piping only).
Piping in vertical runs which are greater than 10 feet long, and which will be
insulated, will be provided with lugs and collars for support of the insulation.
Lugs on piping which must be stress relieved will be welded to the pipe prior to
final stress relieving. Lugs on shop-fabricated piping which must be stress
relieved will be shop welded to the piping.
All attachments will be of the same material as the piping on which they are
installed.
Flow Nozzles and Orifices
Weld-in type flow nozzles will be installed, and the inside of the pipe bored,
in complete conformance with details and recommendations of the flow nozzle
manufacturer.
Each section of piping containing a weld-in type flow nozzle will indicate the
direction of flow and the flow nozzle number stamped on a steel band securely
attached to the pipe.
Flanges for orifices will be of the orifice flange type.
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Brazed Joints
Brazing will be accomplished in accordance with the requirements specified in
ANSI B31.1.
Brazing filler metals will be either silver or copper-phosphorus alloys. Filler
metals containing phosphorus will not be used for brazing steel or nickel base
materials.
Fiberglass-Reinforced Plastic Pipe Joints
Joints in fiberglass-reinforced plastic piping will be in accordance with the
pipe manufacturer's standards.
All joints will be made by certified joiners. Individual joiners will be trained
and certified by an independent testing organization, such as Peabody Testing,
for the specific pipe brand, type of joint, and pipe sizes to be used.
The certification procedure will be submitted for review prior to beginning the
work. The certification program will provide for training and examination of
persons who will assemble the pipe joints and will include as a minimum
equipment training, joint preparation, fitting, bonding, curing, repair, and
testing by written examination and by testing of a joined pipe.
A copy of the current certificate for each joiner will be submitted prior to
commencement of the work by any particular joiner.
PVC Pipe Joints
Joints in polyvinyl chloride (PVC) piping will be of the solvent cemented type
and will be carefully made, using methods recommended by the pipe manufacturer.
Inspection and Testing
Inspection and testing of piping will be performed in accordance with the
requirements of the applicable code and in accordance with the following
criteria.
Pressure testing of piping assemblies, including hydrostatic, pneumatic, and
in-service leak testing, will be performed on the system assemblies upon the
completion of erection. Shop leak testing of piping will not be required. All
underground piping to be tested will be pressure tested prior to backfilling the
line. Testing will be performed in accordance with the following methods for the
indicated piping.
o Hydrostatic testing of piping will be performed with cold water at 1-1/2
times the design pressure of the piping. This will generally include the
following piping:
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-- Boiler external piping hydrostatically tested with the steam
generator, including main steam, boiler vents and drains, instrument
piping to the second root valve, and economizer feedwater inlet
piping.
-- Boiler feed pump discharge to economizer inlet, including superheat
and reheat desu-perheater piping.
-- Fuel oil piping (water, not fuel oil, will be used for test).
-- Fuel gas piping.
-- All underground piping.
-- All water system piping.
Piping for which isolation by valving or blanking is impractical
(open-ended vents and drains after the last valve, safety valve vent
stacks, etc.) will not be hydrostatically tested. Piping between isolation
valves and connected equipment that is not leak tested (piping connected
to atmospheric tanks, main steam, reheat steam extraction steam, and steam
seal piping connected to the turbine, etc.) will not be hydrostatically
tested. Piping connected to equipment that is leak tested will be
hydrostatically tested at the lowest test pressure of items involved in
that test (pumps and discharge piping to the first isolation valve will be
tested at the pump suction piping test conditions, if the suction test
conditions are lower). Temporary piping for use only during construction
(including temporary blowout piping) will not be hydrostatically tested.
Piping that will be hydrostatically tested, but which would be adversely
affected by rust, will be tested with chemically treated water. After the
completion of testing and acceptance, the piping will be completely
dewatered and dried. This will generally include high-pressure (design
pressure above 150 psi) compressed gas piping and other high-pressure
systems requiring a high degree of cleanliness.
o Pneumatic testing will be provided for all pressure piping that should not
be subject to water filling. This will generally include the following
piping:
-- Low-pressure (design pressure less than or equal to 150 psi)
compressed gas piping conveying hydrogen, carbon dioxide, nitrogen,
welding (MAPP) gas, and chlorine.
-- Station air and control air piping.
-- Condensate polisher and demineralizer concentrated chemical piping.
Lines to be leak tested by pneumatic testing will be given an application
of a leak detection fluid which will reveal the presence of leaks by an
easily visible means, such as bubble for-
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mation. The pneumatic test pressure will generally be limited to 150 psi,
with the chemically treated water hydrostatic test to be preferred for
higher pressure applications.
Leak tolerances in control and instrument piping will be determined in
conformance with ISA Tentative Recommended practice RP-7.1.
Instruments will be carefully protected against overpressure during
testing of piping.
o In-service leak testing will be performed for all pressure piping that is
not hydrostatically or pneumatically tested by tests that are in full
accordance with the applicable code. This will include piping for which
hydrostatic and pneumatic tests are not performed, and piping for which
the tests are performed at less than the test pressure required by the
applicable code. This will include piping connected to equipment that is
not tested, and piping tested with interconnected piping and equipment
that have lower test pressure requirements.
Nondestructive testing of piping will be performed as discussed herein.
Nondestructive testing will generally include visual, radiographic, magnetic
particle, liquid penetrant, and ultrasonic examinations.
o Radiographic examination will be performed on welds requiring examination
under the code.
o Magnetic particle and liquid penetrant examination will be performed as
required by the applicable code.
o Ultrasonic tests will be performed as required by the applicable code.
o Visual examination of welds will be performed by personnel qualified and
certified in accordance with AWS QCI, Standard for Qualification and
Certification of Welding Inspectors.
Cleaning and Painting
The exterior and interior surfaces of all piping will be thoroughly cleaned of
all sand, mill scale, greases, oils, dirt, and other foreign materials.
The interior surfaces of piping which will be exposed to steam or feedwater
(including all main cycle water systems) will be shot blast cleaned by thorough
blast cleaning, using a nonsiliceous blasting material. The use of a
silicon-containing material on these surfaces will not be permitted. After
cleaning, the interior surfaces of all piping will be thoroughly blown dry and
protected with a completely water-soluble preservative coating.
After completion of forming operations and shop fabrication, the interior
surfaces of carbon steel piping for use with lubricating oil systems will be
pickled. The piping will be thoroughly cleaned by immersion in a hot alkaline
cleaning solution or by alkaline steam jet cleaning. After cleaning, the pipe
will be pickled by immersion in hot dilute hydrochloric or sulfuric acid to
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which a suitable inhibitor has been added to prevent attack on the bare metal.
The piping will then be thoroughly rinsed for removal of acid and dried. After
drying a suitable rust preventive will be applied to the inside of the pipe. The
rust preventive will be readily soluble in oil.
The interior surfaces of piping other than shot blast cleaned or pickled piping
will be cleaned with rotary tools or by wire brushing, as described in the PFI
Standard ES-5, Articles 4.2.1 and 4.2.2.
The external surface of uninsulated, above ground, shop-fabricated carbon steel
pipe shall be cleaned in accordance with the requirements of SSPC-SP-6 and given
one spray-applied coat of red alkyd primer applied to a minimum dry film
thickness of 2 mils. Primers will be capable of withstanding a constant
temperature of 200 F, minimum. The following listed primers (or an acceptable
equal) will be used:
o Carboline GP 18 Zinc Chromate Red Oxide Primer
o Koppers 622 Rust-Penetrating Primer
o Mobil 13-R-50 Zinc Chromate Iron Oxide Primer.
o Tnemec 10-99 Red Primer
Flange faces will not be painted but will be given an application of an
easily removable rust-preventive compound.
All machined surfaces will be coated with rust-preventive paint. The paint
will be consumable in the welding process. The coating will be
Deoxaluminite, as manufactured by the Special Chemicals Corporation, or an
equivalent coating.
External surfaces of carbon steel pipe which will be insulated shall be cleaned
of all rust, dirt, and mill scale prior to the installation of insulation.
Pipe Supports and Hangers
The term "pipe supports" includes all assemblies such as hangers, floor stands,
anchors, guides, brackets, sway braces, vibration dampeners, positioners, and
any supplementary steel required to attach pipe supports.
Design and Selection Criteria
All support materials, design, and construction will be in accordance with the
latest applicable provisions of the Power Piping code, ANSI B31.1.
All support components with the exception of springs shall be designed with a
minimum safety factor of five based on the ultimate strength of the material.
The safety factor will be relative to
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either the minimum service strength, or the load, whichever is greater.
Components listed below will meet or exceed the minimum strength and size
requirements specified below.
Structure attachment components will be fastened by welding or bolting. Pipe
supports will be attached to concrete by cast-in-place studs or plates. Where it
is not practical to cast studs or plates into the concrete, anchor bolts with a
minimum pullout safety factor of five will be used. Anchor bolts will be
cone-expansion type, conforming to Federal Specification FF-S-325, Group II,
type 4, Class 1 or 2. Minimum thickness of steel plate bearing against concrete
will be as follows:
Supplementary support beams, required for attachment of supports to building
structure, will be attached by means of clip angles. Clip angles will be
designed for welding to the web of building structure beams or columns. Clip
angles will conform to "Framed Beam connections," as shown on the latest AISC
Manual of Steel Construction. Clip angles will be sized to match support beam
strength. Clip angles may be securely attached by bolting to the beam for
installation ease. Bolting will be through elongated holes in the beam web.
Permanent attachment of clip angles will be by field welding.
Pipe attachments will generally be pipe clamps or lugs. Pipe attachments will be
rigid relative to the piping and insulation and will extend sufficiently outside
insulation, if any, to permit free installation and operation of other support
components. insulation saddles, securely attached by welding or bolted clamps,
will be used where required to prevent damage to insulation. On piping other
than steel or iron, the piping manufacturer's recommendations will be followed.
Material for clamps, lugs, bolts, studs, and nuts will be carbon steel for
piping 750 F or less and will be alloy steel for piping greater than 750 F.
Alloy clamps will be hot forged and stress relieved after forming. Piping
attachments for nonmetallic pipe will meet the following minimum requirements:
o The minimum recommendations of the piping manufacturer will be met or
exceeded.
o Piping attachments will not bear load by a point. Their width will equal
or exceed the square root of the outside diameter of the piping (thus,
4-inch OD piping minimum clamp width equals 2 inches), and they will bear
around 120 degrees or more of the circumference.
o In general, clamps will not be clamped tight and hard on the piping. Where
piping attachment must grip the piping by clamping, a soft, Shore 50-60
rubber pad will be provided between the clamp and the piping, and the
clamp will be formed to fit the padding.
Riser clamps will be sized to meet the following minimum requirements, unless
required otherwise:
3VAR
S will be equal to, or greater than, -------
(TH)(2)
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where
S = design stress for clamp material (for instance S = 12,000 psi
for carbon steel, or S = 7,000 psi for alloy steel on 1,000 F
piping),
V = load on one side of riser clamp, pounds,
A = arm length from pipe outside surface to load line, inches,
R = radius factor, inches (outside pipe radius plus 1 inch),
T = thickness of clamp stock, inches, and
H = height of clamp stock, inches.
The top surface of the riser clamp will be flat and normal to the pipe.
Riser lugs will be sized in accordance with Welding Research council Bulletin
No. 198 and the requirements of ANSI B31.1.
Trapezes will be constructed from structural tubing or from double channels
positioned back-to-back with space between for the hanger rods and with washer
plates welded to channel tops and bottoms. Washer plates shall be used at all
hanger rod attachment points. for pipe sizes 2 inches and smaller, trapeze
assemblies may be made from equal leg angle. There shall be only one pipe per
trapeze, and the distance between the support rods shall not exceed 2 feet 6
inches. The equal leg angle assembly shall meet the requirements of Grinnell
Standard 50, or equivalent.
Hanger rods will be constructed of solid round steel bars. Maximum allowable
stress in a rod will be 9,000 psi average at the thread root cross-sectional
area, or 12,000 psi in nonthreaded areas. Pipe, strap, chain, or other similar
materials will not be permitted in place of rods. Eye rods will have fully and
neatly welded eyes. Cross-sectional area and strength of the eye weld must be
equal to, or greater than, the cross-sectional area and strength of the rod.
Screw threads will be in conformance with ANSI B1.1. Stress areas for threaded
rods will be equal to, or larger than, the following American National Standard
Unified Inch Screw Thread Series.
Nominal Rod Diameter Thread Series
-------------------- -------------
inches
3/8 through 4 UNC
Where piping moves significantly, or operates at 300 F or more, swivel
connections will be provided at both ends of rods. Swivel connections minimize
rod bending and allow, without bind-
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ing, at least 5 degrees sway in all directions from the vertical position.
Special arrangements, such as rockers, will be provided, as required, to keep
total combined stress in the rod from exceeding 18,000 psi when swinging.
Forged steel turnbuckles or welded steel turnbuckles will be provided near the
center of rod assemblies unless the arrangement provides other means of vertical
adjustment under load. Steel turnbuckles will be used to couple long rods.
Turnbuckles and other threaded adjustment components will be provided with lock
nuts.
Spring assemblies will be enclosed and will have a load and position indicator
scale. Counterweight supports will not be used. All spring assemblies will be
stamped with "H" at hot (operating) position, and "C" at cold (ambient) position
on the load and position indicator. Spring assemblies which support the pipe by
use of an intermediate rod will incorporate an adjustable rod coupling or
turnbuckle with lock nut. Spring assemblies will be suitable for inside or
outside installation. A field adjustment feature for varying support effort will
be provided on spring assemblies. Field adjustment range will be at least plus
or minus 10 percent of design operating load. When the weight of support
components carried by the spring exceeds 1 percent of the pipe load, or when the
pipe load exceeds 2,000 pounds, the weight of those support components will be
added to the pipe load to size the spring. Spring assemblies will be provided
with a means to lock the springs. When so locked, the assemblies will be capable
of carrying any hydrostatic test or chemical cleaning load. Locking devices for
spring assemblies on steam piping requiring hydrostatic test will be attached to
the spring casing by means of pins or chain. Spring housings will have
nameplates with permanently stamped markings indicating their corresponding
hanger number.
Variable-support spring supporting effort at cold position will be within 15
percent of design operating pipe load. Where vertical movement is 1/4 inch or
less, the spring will be a short model. Where vertical movement is 1/2 inch or
less, a medium-length spring will be used. Where vertical movement is 3/4 inch
or less, a long-length spring will be used.
Constant-support springs, when required, will have a total travel range at least
20 percent greater, but not less than 1 inch greater, than design travel.
Supporting effort will not vary more than plus or minus 6 percent throughout the
travel range. This tolerance will also apply after any field adjustment of
supporting effort.
Bearing surfaces are grouped into two general categories: (1)
high-friction-bearing surfaces, or (2) low-friction-bearing surfaces.
High-friction-bearing surfaces typically consist of flat, sliding bases.
Low-friction-bearing surfaces typically consist of roller bearings, ball
bearings, graphite plates, lubricating metals such as "Oilite," or plastics such
as "Teflon."
High-friction-bearing surfaces will have a maximum dry static coefficient of
friction of 0.333. Rubbing surfaces will be hard and smooth, of either steel or
cast iron. The surfaces will be free of burrs or other projections. A coat of
lubricating grease will be shop applied to the surfaces. Lubricating grease will
be a water-insoluble type, suitable for the pressures and temperatures in-
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volved. Grease will by synthetic silicone, barium, or lithium base, with fillers
or additives, such as natural graphite or molybdenum-disulfide.
Low-friction-bearing surfaces will have a maximum static coefficient of friction
of 0.100.
Where periodic lubrication of bearing surfaces is required, means of lubricating
without disassembly will be required.
Bolting will consist of either studs and nuts or bolts and nuts. Threaded ends
of studs or bolts will not extend more than one diameter beyond the nut. Minimum
thread engagement will be 100 percent of the nut thread. Nuts for each stud will
be installed equidistant from the ends of the stud. Middle portions of studs and
shank portions of bolts will not be threaded. Bolt heads and nuts will be
hexagonal type, conforming to ANSI B18.2. where no axial load is to be carried,
pins with washers and cotter pin retainers will be permitted in place of bolts.
Restraints, struts, and anchors will have the following features:
o Restraints fabricated of structural steel will have a clearance of 1/8
inch, with respect to the restrained component, in the directions of the
restrained movement.
o All restraints will be designed to withstand the static and kinematic
friction due to relative movement of the pie with respect to the
restraints.
o All restraints and anchors will withstand the loading indicated on the
Hanger List and Details without buckling.
o The strut design will provide for easy field adjustment of at least plus
or minus 2-1/2 inches after erection and while supporting the load.
o Sway struts will be Basic Engineers BE 415 or equivalent.
o All struts will be provided with means for locking the length adjustment.
The length adjustment lock will be on the right-hand thread end, if both
right- and left-hand threads are used.
Shock and sway suppressors used in absorbing thrust loads associated with relief
valve discharge, water hammer, turbine trip, or other causes will be as
specified herein.
Hydraulic shock and sway suppressors will be as manufactured by Basic Engineers,
Model BE 410 or BE 411; ITT Grinnell, Model 200 or 201; or acceptable equal.
Hydraulic shock and sway suppressors will have the capability to be adjusted for
a zero bleed rate to resist the single-direction thrust of safety relief valves.
Mechanical shock and sway suppressors will be as manufactured by Pacific
Scientific company, Anchor Darling, or acceptable equal.
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Exposed components of shop-fabricated pipe supports will be shop painted before
shipment to the jobsite. Painting will consist of one coat of metal primer,
suitable for the maximum temperature of that component. Primer will be red oxide
or zinc chromate where metal temperature will allow. Before painting, surfaces
will be suitable cleaned and prepared in accordance with the paint
manufacturer's instructions. Bearing surfaces and nameplates will not be
painted. These surfaces will be coated with an easily removable rust-preventive
compound.
Pipe Support and Hanger Materials
Support component materials will be suitable for service at the operating
temperature of the pipe to which they are attached. Where support component
temperature is below 750 F, component material will be carbon steel or of an
ASTM type having a minimum yield strength of 35,000 psi, and a minimum ultimate
strength of 58,000 psi. Where support component temperature exceeds 750 F, they
will be fabricated from materials having physical properties equal to or better
than the following. These material requirements apply to parts that are wholly,
or partially, within 9 inches of the outside of the pipe, including further
extension of the part until it is completed.
Material nominally 2-1/4 percent chromium, 1 percent molybdenum
---------------------------------------------------------------
Plate ASTM A 387, Grade 22
Pipe ASTM A 335, Grade P22
Bolts, studs, and rod ASTM A 193, Grade B7
Nuts ASTM A 194, Grade 7
On copper piping or tubing, the pipe clamp will be of copper or copper-plated
steel.
Supports will be of fireproof construction; no combustible materials will be
used. Malleable iron materials will not be allowed.
Miscellaneous support beams required for attaching supports to the building
structure will conform to ASTM A 36.
Valves
Valve pressure classes, sizes, types, body materials, and end preparations will
generally be as described herein. Special features and special application
valves will be utilized, where required.
Valves specified to have flanged, socket welded, or screwed connections will
have ends prepared in accordance with the applicable ANSI standards. Steel
flanges will be raised-face type, unless otherwise required. Cast iron and
bronze flanges will be flat-faced type. Butt welding ends will be prepared in
accordance with Butt Weld End Preparation and Piping Fit-up.
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Steel body gate, globe, angle, and check valves will be designed and constructed
in accordance with ANSI B16.34, as applicable. Valve bodies and bonnets will be
designed to support the valve operators (handwheel, gear, or motor) with the
valve in any position without external support.
Steel Body Valves 2 Inches and Smaller
Steel body valves 2 inches and smaller will have forged steel bodies. Forged
steel valves complying with the standards and specifications listed in Table
126.1 of ANSI B31.1 will be used within the manufacturer's specified pressure
temperature ratings with the following limitations. The use of class 600 forged
steel valves will be limited to 2/3 of the pressure rating specified in ANSI
B16.34, and the criteria established in MSS SP-84. The use of Class 1500, 2500,
and 4500 forged steel valves will be limited in accordance with the pressure
temperature ratings specified in ANSI B16.34 and the criteria established in MSS
SP-84.
Class 600, 1500, 2500, and 4500 forged steel valves will be constructed as
follows:
o Class 600 valves will have bolted bonnet joints. Class 1500, 2500, and
4500 valves will have pressure seal, integral, or breech lock bonnet
joints. Gate, globe, and angle valves will have outside screw and yoke
construction.
o All valves, except gate valves, will have seats of the integral type. Gate
valves will have renewable seats.
o Class 1500, 2500, and 4500 valves will be of loose back seat design.
o Class 1500, 2500, and 4500 globe valves will be of the Y-pattern type.
o Valve ends will be socket weld type, unless otherwise required.
o Except as otherwise required, check valves will be of the guided piston or
swing disk type. All check valves will be designed for installation in
either horizontal piping or vertical piping with upward flow.
Steel Body Valves 2-1/2 Inches and Larger
Steel body valves 2-1/2 inches and larger will have cast steel bodies. The
face-to-face and end-to-end dimensions will conform to ANSI B16.10. The use of
these valves will be in accordance with the pressure temperature ratings
specified in ANSI B16.34, as applicable.
Gate, globe, and angle valves will be provided with back seating construction.
Gate, globe, and angle valves will be of outside screw and yoke construction.
Gate valves 4 inches and larger will have flexible wedge disks. Split disks will
not be permitted. Valves will have full-size ports,
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except where venturi ports are specifically permitted. The use of valves with
venturi ports will be limited to selected large diameter, high-pressure valve
applications.
Class 150 and 300 valves, 2-1/2 inches and larger will be constructed as
follows:
o Bonnet joints will be of the bolted flanged type having flat-face flange
facings for Class 150 valves and male and female facings for Class 300.
o Body ends will be butt weld type, unless otherwise required.
Class 600, 900, 1500, 2500, and 4500 valves 21/2 inches and larger will be
constructed as follows:
o Bonnet joints will be of the pressure seal or breech lock type.
o All Class 600, 900, 1500, 2500, and 4500 valves will have
grease-lubricated, antifriction-bearing yoke sleeves.
o Body ends will be butt weld type, unless otherwise required.
Check valves used on pump discharge installations, and on other applications in
which the valves may be subjected to significant reverse flow water hammer or
fluid surges, will be of the non-slam, tilting-disk type. All other check valves
will be of the guided piston, swing disk, or double-disk spring check type. The
use of double-disk spring check valves will be limited to 14-inch and larger
cold water services. All check valves will be designed for installation in
either horizontal or vertical piping with upward flow. Stop check valves, where
specified, will be Y-pattern globe type.
Iron Body Valves
Iron body gate, globe, and check valves will have iron bodies and will be bronze
mounted. The face-to face dimensions will be in accordance with ANSI B16.10.
These valves will have flanged bonnet joints. Gate and globe valves will be of
the outside screw and yoke construction. Body seats will be of the renewable
type. Gate valves will be of the wedge disk type.
Butterfly Valves
Rubber-seated butterfly valves will be in accordance with AWWA C504, Standard
for Rubber-Seated Butterfly Valves MSS Standard Practice SP-67, Butterfly
Valves. Valves of the wafer or lug-wafer type will be designed for installation
between two ANSI flanges. Valves with flanged ends will be faced and drilled in
accordance with ANSI B16.1. The selected use of butterfly valves will be in
accordance with the pressure temperature ratings specified in AWWA C504, the
pressure temperature ratings specified by the manufacturer, and as specified in
the following criteria:
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o Butterfly valves will generally be used for 4-inch and larger cold water
services only.
o Butterfly valves for buried service will be of cast or ductile iron body
materials and will be equipped with flanged ends.
o Cast iron butterfly valves will have pressure classes selected, based on
the piping design pressure as follows:
Piping Design Pressure Valve Class
---------------------- ----------------------
25 psi and below Class 25
Above 25 psi to 75 psi Class 75
Above 75 psi to 150 psi Class 150
Cast iron butterfly valves will be limited to use with piping systems
having a design temperature of 125 F or less.
o Butterfly valves for other than buried service will be of carbon steel or
cast iron body material, depending on the service application. Valves 24
inches and larger in size will be equipped with flanged ends. Valves 20
inches and smaller in size will be of the wafer type, or lug-wafer type,
if used with steel or alloy steel piping, and will be flanged if used with
other piping materials (cast iron, ductile iron, FRP, PVC, etc.).
o Carbon steel butterfly valves will be limited to use with piping systems
having a design temperature of 150 F or less. Carbon steel butterfly
valves will have pressure classes selected in accordance with the pressure
temperature ratings specified in ANSI B16.34 for 24-inch and smaller
valves. Valves 30 inches and larger in size will be selected and
specified, based on the piping design pressure and temperature, without
reference to a specific pressure class.
Metal-seated or Teflon seal ring-seated butterfly valves for special service
applications will be of the wafer or lug-wafer type and will be designed for
installation between ANSI flanges. The use of these valves will be in accordance
with the pressure temperature ratings specified by the manufacturer.
Bronze Body Valves
Bronze gate and globe valves 2 inches and smaller will have union bonnet joints
and screwed ends. Bronze gate and globe valves used in control air service will
have braze joint ends. Gate valves will be inside screw, rising stem type with
solid wedge disks. Globe valves will have renewable seats and disks.
Bronze check valves 2 inches and smaller will be Y-pattern, swing disk type or
guided piston type designed for satisfactory operation on both horizontal piping
and vertical piping with upward flow.
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Bronze valves 2-1/2 inches and larger will have bolted flange bonnet joints and
flanged ends. Gate and globe valves will be of the outside screw rising stem
construction. Gate valves will have either integral or renewable seats. Globe
valves will have renewable seats.
The use of these valves will be in accordance with the pressure temperature
ratings specified by the manufacturer and in accordance with the criteria
established in MSS SP-80. Bronze valves will generally be Class 200 and will be
limited to service with piping systems having design pressures of 200 psi or
less, and design temperatures of 150F or less.
Bronze valves will generally be limited to a size of 3 inches or less.
Plug Valves
Plug valves will be of the eccentric, lubricated, or Teflon sleeve plug type, as
required by the service. Plug valve bodies will conform to the requirements of
ANSI for dimensions, material thicknesses, and material specifications. Bonnets
will be of the bolted flange type. Body ends will be flanged, faced, and drilled
for installation between ANSI flanges. The use of these valves will be in
accordance with the pressure temperature ratings specified by the manufacturer.
Ball Valves
All ball valves will have full-area ports, Teflon seats and seals, and
chrome-plated carbon steel or stainless steel balls. Ball valves bodies 2 inches
and smaller will have threaded or socket weld end connections. Ball valves 2-1/2
inches and larger will have flanged or butt weld ends. The valves will not
require lubrication. The use of these valves will be in accordance with the
pressure temperature ratings specified by the manufacturer.
Diaphragm Valves
Diaphragm valves will be straight-away or weir bodies with flanged ends faced
and drilled for installation between ANSI flanges. The use of these valves will
be in accordance with the pressure temperature ratings specified by the
manufacturer.
Polyvinyl Chloride (PVC) and Chlorinated Polyvinyl Chloride (CPVC) Valves
PVC and CPVC valves will be constructed entirely from polyvinyl chloride,
chlorinated polyvi-nyl chloride, and Teflon. Bodies will be double-entry flanged
or true union screwed type. The use of these valves will be in accordance with
the pressure temperature ratings specified by the manufacturer.
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Valve Materials
Valve bodies will generally be constructed of materials equivalent to the pipe
with which they are used. Valve body and trim materials of construction will be
in accordance with applicable ASTM and AISI standards.
The main cycle system valves will be free of copper materials to allow the cycle
to be treated at the optimum pH for corrosion protection of carbon steel
components.
Valve Operators
Valves will be provided with manual or automatic operators, as required, for the
service application and system control philosophy. Automatic operators will be
motor, piston, or diaphragm type.
Manual operators will be lever, handwheel, or gear type, with the use of lever
operators to be limited to valves requiring a maximum of 90-degree stem rotation
from full open to full closed position on valve sizes 6 inches and smaller. All
operators will be sized to operate the valve with the valve exposed to maximum
differential pressure.
The use of gearing for manually operated valves will generally be as shown
below. Some service applications and valve types may require that gear operators
be used on valves smaller than indicated.
Valve Class Valve Size
--------------------------- -----------------------
Up to 300 8 inches and larger
600 6 inches and larger
900 4 inches and larger
1500 3 inches and larger
2500 and 4500 2-1/2 inches and larger
Branch Line Isolation Valves
Double-isolation valves will be provided in 2-inch and smaller branch lines from
main piping headers and equipment in accordance with code requirements.
Valves will be installed as follows:
o The portion of the branch line containing the two valves will be installed
parallel to the main line.
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o The connection on the main line will preferably be on the top of the main
line.
o A support will be furnished from the main line to the branch line located
so that the two valves are supported between the main line connection and
the support. The support will be flexible in design to permit differential
expansion.
Branch lines not requiring double-isolation valves will be provided with
single-isolation valves.
Valve Special Features
Valves will be provided with locking devices, handwheel extensions, vacuum
service packings, limit switches, and other special features, as required.
Locking devices, when furnished, will allow the valve to be locked either open
or closed with a standard padlock. Limit switches, when furnished, will be
provided for the open and closed position of the valve.
All valve bonnets for valves potentially exposed to high temperatures (over 150
F) will be provided with internal drains. The drains will prevent the bonnets
from being exposed to excessive pressure when the bonnet is full of water and
the valve is exposed to elevated temperatures.
Valves will not be equipped with bypasses, unless specifically required.
Insulation and Lagging
The insulation and lagging to be applied to piping, equipment, and ductwork for
the purposes of reducing heat loss, reducing sweating, and personnel protection
will be in accordance with the following criteria.
Insulation Materials and Installation
Insulation materials will be inhibited and of a low halogen content so that the
insulation meets the requirements of MIL-I-24244, Amendment 3, regarding
stress-corrosion cracking of austenitic stainless steel. Insulation materials
contain no asbestos.
All piping operating above 130 degrees F and requiring heat conservation will be
insulated with calcium silicate molded insulation in accordance with ASTM C533.
Piping not requiring heat conservation will be insulated where it is accessible
for personnel protection.
Equipment and ductwork operating at elevated temperatures will be insulated with
calcium silicate block or mineral fiber block insulation.
Mineral fiber block insulation for use on equipment surfaces will be in
accordance with ASTM C 512, Class 3, and have a density of 8 to 12 pcf.
Mineral fiber blanket insulation will not be used except for selected
applications for practicality.
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Insulating cements will be mineral fiber thermal insulating cements and will
conform with ASTM C 195.
Antisweat insulation will be flexible elastomeric cellular thermal insulation,
Armstrong "Armaflex" or acceptable equal. Adhesive will be Armstrong 520
Adhesive or acceptable equal. Outdoor antisweat insulation will be protected
with paint or lagging in accordance with the manufacturer's recommendations.
Piping and small-diameter cylindrical equipment insulation will be hollow
cylindrical shapes, split in half lengthwise, or curved segments. Large-diameter
cylindrical equipment and other items of equipment will be insulated with block
or scored block insulation, as required, to obtain a close fit to the contour.
Pipe fittings and accessories will be insulated, using either molded insulation
or by insulated fabricated from straight pipe insulation segments.
Weatherproof protective coatings will be Johns-Manville Insulkote primer and
coating material, or acceptable equal, applied in accordance with the
manufacturer's recommendations.
Insulation will be securely tied and laced in place, using dead soft Type 302
stainless steel wire. Number 14 gauge wire will be used for equipment
insulation. Number 16 gauge wire will be used for pipe insulation. Blocks will
be reinforced on the exterior face with expanded metal, if necessary, to prevent
sagging or cutting of insulation by lacing wire. Wire mesh will be 1-inch size
by 20-gauge galvanized steel wires. Straps or bands will be 3/4-inch by
0.020-inch stainless steel.
Studs used for attachment of insulation will be Nelson stainless steel studs in
lengths suitable for the insulation thickness. Studs will be spaced on centers
not exceeding 12 inches. Washers for attachment of lacing wire will be spaced on
centers not exceeding 18 inches. All block insulation will have joints broken
and pointed up with plastic insulation.
Ducts shall be insulated where required for thermal conservation or personal
protection. Ducts with external stiffeners shall will have the insulation
installed over the stiffeners so that the stiffeners are insulated and a level
surface achieved.
Lagging Materials and Installation
All insulated surfaces of equipment, ductwork, piping, and valves will be
lagged.
All aluminum lagging will be ASTM B 209 Alclad 3004 or acceptable equal.
Aluminum lagging will be mill finished.
Ribbed or fluted aluminum lagging for equipment and ductwork will be 0.040-inch
minimum thickness. Flat aluminum lagging will be 0.050-inch minimum thickness,
except in areas where personnel may walk thereon. In these areas, 0.080-inch
minimum thickness will be used, unless steel walkways are provided.
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Piping lagging will be mill finish sheet aluminum, 0.020-inch minimum thickness
on applications up to 13-inch outside diameter, and 0.024-inch minimum thickness
on all other applications.
Outdoor lagging will be installed to secure a weatherproof installation. Lagging
will be carefully fabricated and fitted to ensure a neat appearance. Open ends
of all fluted sections will be provided with tight-fitting closure pieces.
All areas of contact between dissimilar metals will be protected against
galvanic corrosion by a suitable insulating coating.
All lagging on curved surfaces will be machine rolled and formed to fit the
insulation curvatures. All joints will be lapped a minimum of 2 inches and
placed to shed water.
Removable insulated covers will be provided over all equipment manholes,
nameplates, and code stampings. Access doors through lagging will be provided,
as required.
All lagging will be secured in place, using panhead self-tapping screws, fitted
with neoprene washers. Screws will be 6061-T6 aluminum alloy, stainless steel,
or anodized 2024 aluminum alloy. spacing of screws for joints in ribbed aluminum
lagging will be not more than 12 inches. spacing of screws for flat aluminum
sheet will be not more than 8 inches. All joints will be placed to shed water.
On outdoor piping, in addition to screws, lagging will be secured by
machine-attached stainless steel bands spaced on not greater than 24-inch
centers.
All insulated piping will have a vapor barrier and will be aluminum lagged. All
joints will be weatherproof. The vapor barrier will be attached to the inside
surfaces of the lagging or will be cemented to the insulation before application
of the lagging. Elbows less than 13-inch insulated OD will be covered with
preformed aluminum elbows. Piping elbows larger than 13-inch insulated OD will
be covered, using mitered segment aluminum elbow jackets constructed with
rolled, interlocking edge joints. Mitered segments will not exceed 15 degrees
included angle. Long-radius bends will be covered with spiral-wrapped aluminum
strips or mitered segment gores.
Top horizontal surfaces of designated ducts and designated areas on equipment
will generally be provided with a system of walkways to prevent damage to the
lagging during operation and maintenance. Walkways generally will be constructed
of grating and will be supported directly from the duct or equipment with
specially designed support lugs on not greater than 24-inch centers. Support
lugs will be attached to the ducts or equipment prior to placement of insulation
and lagging. Grating will be attached to the support lugs with flathead
countersunk screws.
Insulation Supports for Piping
Vertical runs of piping which will be insulated will utilize support lugs and
collars to prevent slippage of the insulation.
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Insulation Classes for Piping and Equipment
Piping and equipment insulation classes and corresponding thicknesses are shown
in Table 2. The insulation classes for piping systems will be designated by
letters, which will be indicated in the pipeline listing.
The insulation for piping accessories will be of the same class as is indicated
for the piping. Insulation materials for miscellaneous piping and equipment will
be suitable for the actual operating temperatures and will, whenever possible,
be of the same insulation class as insulated main piping and equipment operating
under similar temperatures.
Freeze Protection
All aboveground water and steam piping will be arranged to allow drainage to
protect the piping from freezing, if required. The piping systems will be
arranged to minimize the amount of piping requiring drainage for freeze
protection.
Freeze proofing by heat tracings will be used, as discussed in Freeze
Protection, of this manual.
Antisweat Insulation
All aboveground cold water and air piping will be provided with antisweat
insulation, as indicated in Table 2, with the exception of piping in which fluid
flow is not normally expected.
<TABLE>
<CAPTION>
=============================================================================================================
Table 2
Insulation Classes
=============================================================================================================
Insulation Thickness
-------------------------------------------------------------
Not Freezeproofed Freezeproofed
----------------------------- -----------------------------
Insulation Operating Tem- Inner Layer Outer Inner Layer Outer
Class perature Pipe Size Layer Total Layer Total
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A 1,005 F to 1-1/2" & 2-1/2" -- 2-1/2" 2-1/2" 1-1/2" 4"
801 F smaller 2" 1-1/2" 3-1/2" 2-1/2" 1-1/2" 4"
2" - 4" 2-1/2" 2" 4-1/2" 3-1/2" 1-1/2" 5"
5" - 8" 3" 2-1/2" 5-1/2" 4-1/2" 1-1/2" 6"
10" & larger
B 800 F to 1-1/2" & 2-1/2" -- 2-1/2" 1-1/2" 1-1/2" 3"
501 F smaller 1-1/2" 1-1/2" 3" 2" 1-1/2" 3-1/2"
2" - 4" 2" 1-1/2" 3-1/2" 2-1/2" 1-1/2" 4"
5" - 10" 3-1/2" 1-1/2" 5" 4" 1-1/2" 5-1/2"
12" & larger
C 500 F to 2" & smaller 1-1/2" -- 1-1/2" 1-1/2" 1-1/2" 3"
301 F 2-1/2" & 2-1/2" -- 2-1/2" 2" 1-1/2" 3-1/2"
larger
=============================================================================================================
</TABLE>
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<TABLE>
<CAPTION>
=============================================================================================================
Table 2
Insulation Classes
=============================================================================================================
Insulation Thickness
-------------------------------------------------------------
Not Freezeproofed Freezeproofed
----------------------------- -----------------------------
Insulation Operating Tem- Inner Layer Outer Inner Layer Outer
Class perature Pipe Size Layer Total Layer Total
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
D 300 F to 10" & smaller 1-1/2" -- 1-1/2" 1-1/2" -- 1-1/2"
150 F 12" & larger 2-1/2" -- 2-1/2" 2-1/2" -- 2-1/2"
E 1,000 F to Equipment 3" 2-1/2" 5-1/2" -- -- --
501 F
F 500 F to Equipment 2-1/2" -- 2-1/2" -- -- --
201 F
G 200 F to Equipment 1-1/2" -- 1-1/2" -- -- --
150 F
H Antinoise and 1-1/2" & 1/2" -- 1/2" -- -- --
Antisweat smaller 1" -- 1" -- -- --
2" & larger
I Antifreeze 150 All -- -- -- 1-1/2" -- 1-1/2"
F and below
=============================================================================================================
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Electrical Engineering
Design Criteria
----------------------------
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ELECTRICAL ENGINEERING DESIGN CRITERIA
Introduction
This section describes the design criteria which will be used as guidelines for
all electrical work related to this project.
Design Codes and Standards
Except for Emissions, Noise and Effluents, the design and specification of all
work will be in accordance with all applicable laws and regulations of the
federal government and applicable regional and local codes and ordinances.
Emissions, Noise and Effluents shall be as defined in the contract. A listing of
the codes and industry standards to be used in design and construction follows:
(1) The Antifriction Bearing Manufacturers Association (ABMA).
(2) American National Standards Institute (ANSI).
(3) American Society for Testing and Materials (ASTM).
(4) Edison Electric Institute (EEI).
(5) Insulated Cable Engineers Association (ICEA).
(6) Institute of Electrical and Electronics Engineers (IEEE).
(7) Illuminating Engineering Society (IES).
(8) National Electrical Code (NEC).
(9) National Electrical Manufacturers Association (NEMA).
(10) National Electrical Safety Code (NESC).
(11) National Fire Protection Association (NFPA).
(12) Occupational Safety and Health Act (OSHA).
(13) Underwriters' Laboratories (UL).
Other recognized standards will be utilized, as required, to serve as design,
fabrication, and construction guidelines when not in conflict with the
above-listed standards.
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The codes and industry standards used for design, fabrication, and construction
will be the codes and industry standards, including all addenda, in effect as
stated in equipment and construction purchase or contract documents.
Electric Motors
General Motor Design Criteria
Motors will be coordinated with the driven equipment and the environment where
the motor is installed to provide long life and a minimum of maintenance
requirements. Motors will be purchased with the driven equipment and will be the
manufacturer's standard heavy duty or severe duty motor with features as
described in this section.
The following design parameters will be evaluated in specifying a motor:
(1) Environment special enclosure requirements.
(2) Voltage, frequency, and phases.
(3) Running and starting requirements, limitations, and duty cycle.
(4) Motor type (synchronous, induction, dc, etc.) and construction.
(5) Power factor.
(6) Service factor
(7) Speed and direction of rotation.
(8) Insulation.
(9) Bearing construction and lubrication.
(10) Ambient noise level and noise level for motor and driven equipment.
(11) Termination provisions for power, grounding, and accessories.
(12) Installation, testing, and maintenance requirements.
(13) Special features (shaft grounding, temperature and vibration monitoring,
etc.).
Safety Considerations for Motors
The Occupational Safety and Health Act will be adhered to for personnel
protection. Belt guards shall be specified for personnel safety and, when
required, to prevent foreign objects from
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contacting belt surfaces. Guard screens will be provided over motor enclosure
openings that would allow direct access to rotating parts. All electrical motors
will be adequately grounded. Motors which are located in hazardous areas will
conform to all applicable regulatory requirements and be UL labeled. Motor
electrical connections are to be terminated within oversized conduit boxes,
mounted to the motor frame.
Codes and Standards
All motors will be designed, manufactured, and tested in accordance with the
latest applicable standards, codes, and technical definitions of ANSI, IEEE,
NEMA, and ABMA.
Environment and Special Enclosure Requirements
Location of individual motors will determine ambient temperature, corrosive
environment, hazardous environment, and humidity to be experienced by the
motors. Motors will be designed for an ambient temperature of 40 C, unless the
individual location has ambient temperatures which exceed 40 C, in which case
the motor will be designed for the higher ambient. Motors indoors and in clean
environments will be open, drip-proof construction. All other motors will be
totally enclosed or weather protected Type II. Motors in corrosive environments
will be totally enclosed with corrosion-resistant materials and finishes
(Chemical-Duty).
Motors for service in hazardous areas will be individually considered for type
of enclosure, depending upon the classification, group, and division of the
hazardous area in question.
Motors for outdoor service will have all exposed metal surfaces protected with a
corrosion-resistant polyester paint or coating. In addition, totally enclosed
motors will have enclosure interior surfaces and the stator and rotor air gap
surfaces protected with a corrosion-resistant alkyd enamel or with polyester or
epoxy paint or coating. Bolts, nuts, screws, and other hardware items will be
corrosion-resistant or heavy cadmium-plated metal. A rotating labyrinth shaft
seal will be furnished on the shaft extension end of the motor.
Voltage, Frequency, and Phases
Motor-operating voltages (excluding motor-operated valves) are tabulated below:
<TABLE>
<CAPTION>
Nominal Motor
System Nameplate Frequency
Horsepower Voltage Voltage Hz Phases
- ---------- ------- ------- -- ------
<S> <C> <C> <C>
Less than 1/3 240 or less Project Specific 60 1
Greater than or equal to 1/3 and 600 or less Project Specific 60 3
less than 250 (except for special
applications
</TABLE>
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<TABLE>
<CAPTION>
Nominal Motor
System Nameplate Frequency
Horsepower Voltage Voltage Hz Phases
- ---------- ------- ------- -- ------
<S> <C> <C> <C> <C>
Greater than or equal to 250 6,900 or less Project Specific 60 3
DC motors 125 120 DC --
</TABLE>
This table is intended as a general guide; however, individual conditions, such
as distance from power source, voltage drop, etc., may dictate deviations from
the stated horsepower/voltage criteria.
Emergency motors will operate continually at the nominal system voltage with any
supply voltage between 80 percent and 112 percent of the nominal system voltage.
Running and Starting Requirements, Limitations, and Duty Cycle
Motors will be designed for full-voltage starting and frequent starting, where
required, and will be suitable for continuous duty in the specified ambient
conditions. Intermittent duty motors will be selected where recognized and
defined as standard by the equipment standards and codes.
The torque characteristics of all induction motors will be as required to
accelerate the inertia loads of the motor and driven equipment to full speed
without damage to the motor or the equipment at any voltage from 90 percent to
110 percent of motor nameplate voltage, except those to be individually
considered. A voltage drop greater than 10 percent from the specified motor
nameplate rating will be individually considered for proper motor starting and
operating.
Motor Type and Construction
Induction motors will be specified unless specific requirements indicate that
constant speed or emergency duty is required. Synchronous motors will be
specified for large motors where constant speed is necessary. Motors required
for safe coast-down on loss of auxiliary power or for black start capabilities
will be specified as direct current.
Squirrel cage induction motors will have rotors of fabricated copper alloy, cast
aluminum, or fabricated aluminum alloy. Fabricated aluminum alloys will be used
only where the manufacturer has demonstrated the reliability of his design.
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Nameplates will be furnished for all motors in accordance with NEMA MG 1
requirements. The following additional nameplate data will be included on motors
greater than 250 horsepower:
(1) Frame size number.
(2) Insulation system class designation.
(3) Maximum ambient temperature for which the motor is designed or temperature
rise by resistance.
(4) Service factor.
(5) Starting limitations.
(6) Direction of rotation and voltage sequence.
(7) Any special lubrication requirements, if oil lubricated.
(8) For motors designed for hazardous areas location class and group
designation and maximum operating temperature value or operating
temperature code number.
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Power Factor
Where economically justified, motors will be specified to be high-efficiency,
high-power factor to reduce operating costs and VAR requirements of the
auxiliary electric system.
Service Factor
Motors will be specified with 1.0 or 1.15 service factors, unless specific load
requirements dictate a larger service factor. The motor horsepower and service
factor shall be coordinated such that the motor nameplate horsepower multiplied
by the motor nameplate service factor shall be at least 15 percent greater than
the driven equipment operating range maximum horsepower requirements.
Speed and Direction of Rotation
Motor speed and direction of rotation will be coordinated with the driven
equipment. large, high-speed (3,000 rpm and above) motors will be avoided, if
possible.
Insulation
All insulated windings on continuous-duty motors will have Class B
nonhygroscopic insulation systems rated for temperature rise and ambient
temperature in accordance with NEMA MG 1 standards. When ambient temperatures
greater than 40 C are specified, the allowable temperature rise will be reduced
in accordance with NEMA MG 1 standards.
Motors may be furnished with Class F insulation, provided the temperature rise
is in accordance with NEMA MG 1 values for Class B insulation and provided all
other requirements are as specified.
All insulated stator winding conductors and wound-rotor motor secondary windings
will be copper.
Where a sealed insulation system is specified, extra dips and bakes of epoxy
resin or vacuum-pressure impregnation will be included to provide a premium
insulation for random windings. Sealed insulation for formed-coil windings will
be in accordance with the requirements of NEMA MG 1 standards.
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The insulation resistance corrected to 40 C will be not less than motor-rated kV
+ 1 megohms for all windings.
Where required, the windings will be treated with a resilient,
abrasion-resistant material.
Bearings
Sleeve bearings will be oil ring-lubricated type with mountings provided with
oil level sight glasses marked for required oil level at motor running and motor
standstill. The oil ring will be one-piece construction; split-type construction
will not be acceptable. Stationary labyrinth seals will be bronze material.
Sleeve bearings, end bells, and bearing housings for horizontal motors will be
split type, when available, for the frame and the enclosure specified. Air gap
measurement holes or other acceptable means will be provided in each motor and
enclosure for checking air gap of sleeve-bearing motors.
Sleeve bearings on horizontal motors will be designed and located centrally,
with respect to the running magnetic center, to prevent the rotor axial thrust
from being continually applied against either end of the bearings. The motors
will be capable of withstanding without damage the axial thrusts that are
developed when the motor is energized.
Large, vertical motors shall be furnished with Kingsbury-type thrust bearings,
when available.
Vertical motors furnished with spherical roller thrust bearings will also be
furnished with deep-groove, radial-guide bearings. The guide bearings will be
locked to the shaft so that the guide bearing will take upward thrust and to
assure that the thrust bearing is always loaded. If spring loading is furnished,
the guide bearing will not be preloaded during normal operation.
Thrust bearings for vertical motors will be capable of operating for extended
periods of time at any of the thrust loadings imposed by the specific piece of
driven equipment during starting and normal operation without damage to the
bearing, the motor frame, or other motor parts.
Bearings and bearing housings will be designed to permit disassembly in the
field for inspection of the bearings or removal of the rotor.
Grease-lubricated or oil-lubricated antifriction radial and thrust bearings will
be designed and fabricated in accordance with ABMA standards to have a minimum
L-10 rating life of not less than 130,000 hours under the load, speed, and
thrust requirements for direct-coupled service and not less than 42,500 hours
for belt- or chain-connected service. Grease-lubricated radial bearings will be
double-shielded.
Stacked antifriction bearings will not be acceptable, except as vertical-thrust
bearings in frame sizes up through NEMA 360 Series open-type enclosures, and up
through NEMA 680 Series
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totally enclosed-type enclosures. Where stacked bearings are furnished, matched
pair, precision tolerance bearings with flush ground sides will be provided.
Bearing seats on the shaft and in the bearing housing will have accuracy equal
to that of the bearing.
Allowable Noise
The motor sound level will conform with the motor-driven equipment assembly
overall sound level requirements. In no case will the average no-load sound
pressure sound pressure level, reference level 20 micropascals, produced by the
motor exceed 90 dBA free field at 1 meter for motors rated 200 horsepower and
less and at 2 meters for motors rated above 200 horsepower.
Termination Provisions
Motor power, space heater, and other accessory leads will be wired to motor
terminal housings. Power terminal housings will be oversized to allow sufficient
room for termination of stress cones on medium voltage motors, and termination
of cable which has been derated for tray fill and 40 C ambient on all motors.
All motor leads will be permanently marked in accordance with NEMA MG 1
Standards. A grounding connector attached to the motor frame will be provided
inside the power terminal housing. On medium voltage motors, a terminal housing
separate from the power terminal housing will be provided for space heater, RTD,
and bearing temperature detectors.
Installation, Testing, and Maintenance Requirements
Motors shall be clean and free of chips, grindings, dust, and excessive
lubricant prior to testing and shipment. Motors will be protected against
moisture and damage during handling, shipment, and storage, utilizing packing
and crating in accordance with the best commercial practice.
Each motor will be tested and inspected at the manufacturer's factory to
determine that it is free from electrical or mechanical defects and to provide
assurance that it meets specified requirements. The following criteria and tests
will be used in testing each machine:
(1) Fractional-horsepower, single-phase induction motors. Test procedures will
be in accordance with manufacturers standard test procedures.
(2) Integral-horsepower, three-phase, low voltage induction motors. Test
procedures will be in accordance with IEEE 112, Test Procedures for
Polyphase Induction Motors and Generators.
(a) Routine tests listed in NEMA MG 1-12.51, Routine Tests for Polyphase
Integral-Horsepower Induction Motors.
(b) Motors with nameplate horsepower ratings of 100 horsepower and
larger will require the following additional tests:
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o Measurement of winding resistance.
o Inspection of bearings and bearing lubrication system.
(3) Induction motors rated above 600 volts. Test procedures will be in
accordance with IEEE 112, Test Procedures for Polyphase Induction Motors
and Generators.
(a) Routine tests listed in NEMA MG 1-20.46, Polyphase Induction Motors
for Power Generating Stations, will be performed on each motor.
(b) The following additional tests and inspections will be performed on
each motor larger than 500 horsepower:
o Locked-rotor current at fractional voltage.
o Current balance.
o Length of time of bearing test and final temperature rise of
bearing.
o Insulated bearing resistance.
o Insulation resistance-time curve and polarization index for
motors with formed-coil stators.
o Final value of motor noise levels.
o Final air gap measurements (single air gap).
(c) Motors that are specified to have complete tests performed on either
the furnished motor or an electrically duplicate motor will require
the following tests:
o Temperature.
o Percent slip.
o No-load saturation curve.
o Locked-rotor saturation curve, including locked-rotor torque,
current, and power.
o Speed-torque and speed-current curves at rated voltage and at
minimum starting voltage.
o Efficiency at full, three-fourths, and one-half loads.
o Power factor at full, three-fourths, and one-half loads.
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(4) Direct current motors. Test procedures will be in accordance with IEEE
113, Test Code for Direct Current Machines. The standard routine tests
listed in NEMA MG 1-12.71 will be performed on each motor.
Special Features
Special features, such as winding temperature detectors, space heaters, etc.,
will be reviewed on a case-by-case basis. The general criteria to be applied
will be as follows.
Space heaters will be furnished on motors 5 horsepower and above. Space heaters
will be sized, as required, to maintain the motor internal temperature above the
dew point when the motor is idle. Space heaters will not cause local winding
temperatures to exceed rated design limits. Space heaters rated 2,400 watts and
less will be low voltage, single-phase, 60 hertz. Space heaters larger than
2,400 watts will be low voltage, three-phase.
Bearing thermocouple-type temperature detectors will be furnished on oil ring
lubricated sleeve bearings, bearings with external lube oil cooling or supply,
and Kingsbury thrust bearings. The detector temperature-sensitive tip will be
hermetically sealed and held in contact with the outside bearing babbitt.
Thermocouple detectors will be insulated with magnesium oxide packed in a
stainless steel protective sheath. Thermocouple lead wire will extend from the
detector to a motor terminal housing. Winding temperature detectors will be
provided on all medium voltage motors and any motors with special starting or
duty cycles which would make protective relaying difficult to coordinate for
proper winding thermal protection. Noninductively wound, 10-ohm, high-accuracy,
three-lead detectors will be provided, evenly spaced around the stator with at
least two detectors per phase.
Manufacturing Data
Each contractor supplying a motor or motors will be required to complete and
submit a Motor Information Sheet. These sheets will be used to design the motor
power supply and controls and will provide a permanent written record of motor
characteristics. Speed Torque Curves and Thermal Limit time Current Curves will
be provided by the motor vendor on motors larger than 200 horsepower.
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Motor Operators for Nonmodulating Valve, Gate, or Damper Service
The following requirements are applicable to all electric operators required for
nonmodulating motor operators. Motors will be designed for high-torque,
reversing service in a 50 C ambient temperature. Motors will have Class B
nonhygroscopic standard insulation plus two coats of epoxy resin. Temperature
rise will not exceed 70 C rise by resistance in 50 C ambient for the time rating
furnished. Requirements of NEMA MG 1 and MG 2 will apply.
Motors will be rated low voltage, three-phase, 60 hertz, unless otherwise
indicated. The dc motors will be rated 120 volts dc to operate from a nominal
125-volt battery.
The motor time rating for normal opening and closing service will be not less
than whichever of the following is greatest:
(1) As required for three successive open-close operations.
(2) As required for the service.
(3) Not less than 15 minutes.
Sufficient torque will be provided to operate against system torque at 90
percent nominal voltage for ac motors and at 85 percent nominal voltage for dc
motors.
Motor starting torque will not be less than 500 percent of rated full load
torque.
Motors will be furnished with totally enclosed, nonventilated, weatherproof,
dust-tight enclosures suitable for outdoor service.
Motors for service in hazardous areas will be individually considered for type
of enclosure, depending upon the classification, group, and division of the
hazardous area in question.
Double-shielded, grease-prelubricated, regreaseable antifriction bearings having
ABMA minimum L-10 rating life of not less than 15,000 hours will be furnished.
Motor leads will be terminated in the limit switch compartment.
All motor operators will be supplied with low voltage, single-phase space
heaters located in the limit switch compartment and in the motor. Motor space
heater leads will be terminated in the limit switch compartment.
Crane and Hoist Motors
The electric motor brake horsepower required to drive equipment at the maximum
design point of the equipment will not exceed the motor rating at 1.0 service
factor.
Motor rating and nameplate will conform to applicable requirements of NEMA MG 1.
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Motor intermittent time ratings will be not less than 30 minutes.
Wound-rotor motor secondary voltage, maximum amperes, and external resistance
will be in accordance with NEMA MG 1-18.504.
Design and construction of each motor will be coordinated with the driven
equipment requirements.
Motor capability and the specified temperature rise will not be exceeded during
accelerating, braking, plug stop, and reduced-speed load requirements of the
equipment.
Power and Control Wiring
Design Conditions
In general, conductors will be insulated on the basis of a normal maximum
conductor temperature of 90 C in 40 C ambient air with a maximum emergency
overload temperature of 130 C and a short circuit temperature of 250 C. In areas
with higher ambient temperatures, larger conductors will be used or higher
temperature rated insulation will be selected. Conductor size and ampacity will
be coordinated with circuit protective devices. Cable feeders from medium
voltage power equipment will be sized so that a short circuit fault at the
terminals of the load will not result in damage to the cable prior to normal
operation of fault-interrupting devices.
Cables for medium voltage service will be shielded with the shield grounded at
both ends, thereby accomplishing the following results:
(1) Confinement of the dielectric field within the cable.
(2) Obtaining a symmetrical radial distribution of voltage stress within the
dielectric.
(3) Compliance with ICEA recommendations for shielding.
(4) Reducing the hazard of shock to personnel.
(5) Prevention of charging current from being conducted by a surface
contaminant.
(6) Allowing circuits to be dc high potential tested after installation.
(7) To limit radio interference.
(8) To protect cable from induced potentials.
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Instrument cable will be shielded to minimize electrical noise attenuation as
follows:
(1) Aluminum-polyester tape with 100 percent coverage and copper drain wire
will be used for shielding.
(2) Low-level analog signal cables will be made up of twisted and shielded
pairs.
(3) Digital signal cables will be untwisted and shielded.
(4) Except where specific reasons dictate otherwise, cable shields will be
electrically continuous. When two lengths of shielded cable are connected
together at a terminal block, a point on the terminal block will be used
for connecting the shields.
(5) For multipair cables utilizing individual pair shields, the shields will
be isolated from each other.
To be effective, instrument cable shields should be grounded on one end as
follows:
(1) The shield on digital signal circuits will be grounded at the power supply
end.
(2) The shields on grounded thermocouple circuits will be grounded at the
thermocouple well. The shields on ungrounded thermocouple circuits will be
grounded at the control system inputs and left floating at the well.
(3) Multipair cables used with thermocouples will have individually isolated
shields so that each shield will be maintained at the particular couple
ground potential.
(4) Each RTD (resistance temperature detector) system, consisting of one power
supply and one or more RTD's, will be grounded at only one point.
(5) RTD's embedded in windings of transformers and rotating machines will be
grounded at the frame of the respective equipment.
(6) The low or negative potential side of a signal pair will be grounded at
the same point where the shield is grounded. Where a common power supply
is used, the low side of each signal pair and its shield will be grounded
at the power supply.
Conductors
Design Basis
Electrical conductors will be selected with an insulation level applicable to
the system voltage for which they are used and ampacities suitable for the load
being served.
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Cable Ampacities
The maximum ampacities for any cable will depend upon the worst case in which
the cable will be routed (tray, conduit, duct, or direct buried). In addition to
ampacity, special requirements, such as voltage drop, fault current
availability, and environment, will be taken into consideration in sizing of
cable.
The allowable ampacity of power cables will be in accordance with NEC
requirements.
Insulation
Cable insulation and construction will be as follows:
Flame Retardance
To minimize the damage that can be caused by a cable fire, cables
installed in electrical cable tray systems will have insulations and
jackets which have nonpropagating and self-extinguishing characteristics.
As a minimum, these cables will meet the flame test requirements of IEEE
383, using a gas burner flame source. These characteristics are essential
for all cables installed in electrical cable tray in the plant.
Medium-Voltage Power Cable
Power cable with 5/8 kV class insulation will supply all medium voltage
service and may be routed in trays, conduits, or ducts. The following
cable construction will be utilized:
Single-conductor; Class B stranded copper; ethylene propylene rubber (EPR)
or tree resistant XLPE insulation; shielded; and chlorsulfonated
polyethylene (CSP) or chlorinated polyethylene (CPE) jacketed.
Low-Voltage Power Cable 600 Volts
Power cable with 600-volt class insulation will supply power to loads at
voltage levels of 600 volts ac and below, and 250 volts dc and below.
Cables may be routed in trays, conduits, or ducts. The following cable
constructions will be utilized:
Single-conductor; Class B stranded copper; flame-retardant, cross-linked
polyethylene (FRXLPE) or a flame-retardant ethylene propylene rubber
(FREPR) without an overall jacket.
Three-conductor; concentric lay, stranded copper with a ground wire in the
interstices; FRXLPE or FREPR insulation; flame-retardant CSP, or CPE
jacketed overall.
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Control Cable 600 Volts
Control cable with 600-volt class insulation will be used for control,
metering, and relaying. A minimum of 10 AWG cable will be used for current
transformer circuits. Cables may be routed in trays, conduits, or ducts.
The following cable construction will be utilized:
Multiple-conductor, as required, stranded copper, multiple-conductor,
FRXLPE or FREPR insulation; flame-retardant CSP, or CPE jacketed overall.
Instrument Cable 600 Volts
Instrument cable will be used for control and instrument circuits that
require shielding to avoid induced currents and voltages. The following
cable construction will be utilized:
600-volt, flame-retardant single pair or triads, shielded instrument
cable; FRXLPE or FREPR insulation; CSP or CPE jacketed overall.
600-volt, flame-retardant multiple pair or triads, shielded instrument
cable with individually shielded pairs, overall shield and overall jacket;
FRXLPE or FREPR insulation; CSP or CPE jacketed overall.
The type of cable used will be determined by individual circuit
requirements and individual equipment manufacturer's recommendations.
Thermocouple Extension Cable
Thermocouple extension cable will be used for extension leads from
thermocouples to junction boxes and to instruments for measurements of
temperature. Cables may be routed in trays, conduits, or ducts. The
following cable construction will be utilized:
One, four, six, and eight twisted pairs, solid-alloy conductor with
the same material as the thermocouples, with shield over each pair
(except for one-pair construction) and with an overall shield,
FRXLPE, or FREPR insulation; aluminum Mylar tape shield with drain
wire; CSP or CPE jacketed overall.
High-Temperature Cable
High-temperature cable will be used for wiring to devices located in areas
with ambient temperatures above 75 C. Cables may be routed in conduit.
Cable lengths will be minimized by terminating the cable at terminal boxes
or conduit outlet fittings located outside the high-temperature area and
continuing the circuit with control or thermocouple extension cable. The
following cable construction will be utilized:
Single-conductor control cable; stranded copper, with normal maximum
operating temperature of 200 C; silicone rubber insulation; braided
glass jacket.
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Single twisted pair thermocouple extension cable; solid-alloy
conductor with the same material as the thermocouples; with normal
maximum operating temperature of 200 C; Teflon insulation; aluminum
Mylar tape shield with drain wire; Teflon jacketed overall.
Lighting and Fixture Cable
Lighting and fixture cable with 600-volt insulation will be as follows:
(1) Circuits for 240-volt maximum service, totally enclosed in conduit,
NEC Type THHN.
(2) Circuit for 600-volt maximum service, totally enclosed in conduit,
NEC Type XHHW.
(3) Circuit runs for roadway or outdoor area lighting with RHW
conductors for direct burial.
(4) Fixture wire, NEC Type SF-2, silicone rubber insulation, braided
glass jacket.
Lighting and fixture cable designations and conductor sizes will be
identified on the drawings.
Grounding Cable
Grounding cable will be insulated or bare copper conductor sized as
required.
Switchboard and Panel Cable
Switchboard and panel cable will be insulated to 600 volts with FRXLPE
moisture-resistant insulation. Cable will be type SIS Switchboard Wire.
Special Cable
This type of cable will include cable supplied with equipment,
prefabricated cable, coaxial cable, communication cable, etc. This cable
will normally be supplied by a particular manufacturer.
Special cable will be routed in accordance with manufacturer's
recommendations.
Miscellaneous Cable
If other types and construction of cable are required as design and
construction of the unit progress, they will be designated and routed, as
required.
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Testing Requirements
Preoperational tests will be performed on all insulated conductors after
installation.
(1) All insulated conductors with insulation rated 5,000 volts and above will
be given a field dc insulation test after installation, as specified in
part 6 of ICEA Standards S-68-516 and S-66-524.
(2) Low-voltage cables will be either insulation resistance tested prior to
connecting cables to equipment or functionally tested (at equipment
operation voltage) as part of the checkout of the equipment system.
(3) All insulated conductors will be continuity tested for correct conductor
identification.
Installation
Cable installation will be in accordance with the following general rules:
(1) Cables will be routed as indicated in the circuit list.
(2) The pulling tension of cable will not exceed the maximum tension
recommended by the cable manufacturer, and the pulling tension in pounds
at a bend will not exceed the cable manufacturer's recommendations.
(3) Care will be exercised during the placement of all cable to prevent
tension and bending conditions in violation of the manufacturer's
recommendations.
(4) All cable supports and securing devices will have bearing surfaces located
parallel to the surfaces of the cable sheath and will be installed to
provide adequate support without deformation of the cable jackets or
insulation.
(5) Nylon ties will be used to neatly lace together conductors entering
panelboards, control panels, and similar locations after the conductors
have emerged from their supporting raceway and before they are attached to
terminals.
(6) Both ends of all circuits will be identified by tags with the Engineer
assigned circuit number.
(7) All spare conductors of a multiconductor cable will be left at their
maximum length for possible replacement of any other conductor in the
cable. Each spare conductor will be neatly coiled and taped to the
conductors being used.
(8) In addition to the above requirements, cables will be installed in
accordance with manufacturer's requirements and recommendations.
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(9) Phasing of medium-voltage and low voltage 3-phase power conductors will be
identified, using Black Phase A, Red Phase B, Blue Phase C, White Neutral,
and Green or bare ground.
Connectors
This section defines methods of connecting cable between electrical systems and
equipment. In this section, the term "connector" is applied to devices that join
two or more conductors or are used to terminate conductors at equipment
terminals for the purpose of providing a continuous electrical path.
Connector material will be compatible with the conductor material to avoid the
occurrence of electrolytic action between metals.
Connectors will meet the bolt hole requirements of Paragraph CC1-4.05 of NEMA
standard publication for Electric Power Connectors, publication CC1.
All medium-voltage connectors will be pressure type and secured by using a
crimping tool. The tool will be a ratchet type and a product of the connector
manufacturer made for the particular connector to be installed. The tool will
produce a crimp without damage to the conductor but will assure a firm
metal-to-metal contact.
Medium-voltage cables require stress cones at the termination of the cables and
at points where cables are spliced. Stress cones will be of the preformed type
suitable for the cable to which they are to be applied.
All low-voltage connectors will be pressure type, installed identical to the
medium-voltage cables, or will be clamp type if the connector is furnished as
part of the connected equipment, such as terminations to breakers and motor
controllers.
Cables will not be spliced in cable trays or conduits. Splices to devices with
factory pigtails will be made in conduit outlet fittings or junction boxes,
utilizing an appropriate connector.
Protective Relaying
The selection and application of protective relays are discussed in the
following paragraphs. These relays protect equipment in the Auxiliary Power
Supply System, Generator Terminal System, Primary Power Supply System,
Turbine-Generator System, and the electrical loads powered from these systems.
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The following general requirements apply to all protective relay applications:
(1) The protective relaying scheme will be designed to remove or alarm any of
the following abnormal occurrences which are beyond the safe operating
range of the equipment:
(a) Overcurrent.
(b) Undervoltage or overvoltage.
(c) Frequency variations.
(d) Overtemperature.
(e) Excessive pressure.
(f) Open circuits and unbalanced current.
(g) Abnormal direction of power flow.
(2) The protective relaying system will be a coordinated application of
individual and/or integrated relays. For most monitored abnormal
conditions, there will exist a designated primary device for detection of
that conditions. A failure of a primary relay will result in the action of
a secondary, overlapping scheme to detect the effect of the same abnormal
occurrence. The secondary relay may be the primary relay for a different
abnormal condition. Alternate relays may exist which detect the initial
abnormal condition but which have an inherent time delay so that the
alternate relays will operate after the primary and secondary relays.
Similar to secondary relays, the alternate relays may be primary relays
for other abnormal conditions. All protective relays will be selected to
coordinate with protective devices supplied by manufacturers of major
items and the thermal limits of electrical equipment, such as transformers
and motors.
(3) Secondary current produced by current transformers (CT's) will be
5-amperes, and voltage signals produced by voltage transformers (VT's)
will be in the 120-volt range.
Power Transformer Relays
Generator Transformer
The generator transformer is protected against the effects of the following
conditions:
(1) Phase faults
(2) Ground faults
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This protection will be provided by the following relays which are shown on
Figure 2.7.3-1 and discussed in the following paragraphs.
Device 87-T is a differential relay that provides transformer primary protection
by detection of three-phase and phase-to-phase faults in the generator
transformer low-voltage, delta-connected windings, and three-phase,
phase-to-phase, and phase-to-ground faults in the generator transformer
high-voltage, wye-connected windings. This device will trip a lockout relay for
a fault in its zone of protection, which includes the generator transformer,
generator, generator breaker, and generator bus duct.
Device 51-N will provide sensitive backup protection for ground faults in the
external system. This relay will actuate a lockout relay.
A rapid increase in pressure within the transformer tank associated with an
internal fault will be detected by a sudden-pressure relay, Device 63-G1. Device
63-G1 actuates the generator lockout relay through an auxiliary tripping scheme
designed to prevent false trips.
Auxiliary Power Transformer
The auxiliary power transformer is protected against the effects of the
following conditions:
(1) Phase faults
(2) Ground faults
(3) Overloads
This protection will be provided by the following relays which are discussed in
the following paragraphs.
Device 87-M1 provides primary protection for the medium-voltage and low-voltage
winding of the main auxiliary transformer and for the nonsegregated phase bus
duct connecting the low-voltage winding to the incoming main breaker in the
plant metal-clad switchgear. These relays offer protection against
phase-to-phase and three-phase faults. Device 87-M1 is relatively insensitive to
ground faults on the secondary side of the transformer, should the fault current
magnitudes be less than the maximum available ground fault current.
Device 50/51-M1 consists of three time overcurrent relays with instantaneous
units. The time overcurrent relay function provides overload protection for the
transformer's high-voltage winding. The instantaneous unit provides a backup
protection against transformer faults.
One time overcurrent relay is connected to the bushing current transformer on
the neutral of the low-voltage winding of the main auxiliary transformer. The
relay device number is 51G-M1. The relay provides primary overload protection to
its neutral winding's resistor for ground faults on the switchgear bus or on
feeders emanating from the switchgear lineup. The relay also
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provides backup protection for ground faults in the transformer low-voltage
winding, in the nonsegregated phase bus duct, on the switchgear bus, or on
feeders emanating from the switchgear lineup.
A rapid increase in pressure within the transformer tank associated with an
internal fault will be detected by a sudden-pressure relay, Device 63-M1. Device
63-M1 actuates the lockout relay through an auxiliary tripping scheme designed
to prevent false trips.
Metal-Clad Switchgear
A summary of the protective relays used in the medium voltage metal-clad
switchgear lineups is discussed in the following paragraphs.
Incoming Main Breakers
Each incoming auxiliary power transformer breaker in the switchgear will be
provided with time overcurrent relays (Device 51) and a time overcurrent ground
detection relay (Device 51N). Device 51 would detect and trip the respective
switchgear breaker for sustained overloads and short circuit currents on the
switchgear bus. These relays provide backup protection for faults on feeders
emanating from the switchgear lineups. Device 51N is residually connected to
switchgear current transformers (CT's) and provides primary protection for
ground faults on the switchgear bus and backup protection for ground faults in
feeders emanating from the switchgear lineup.
Each medium-voltage switchgear bus will be provided with two undervoltage relays
(Device 27) which will, when bus voltage drops to a preset level, trip load
feeder circuit breakers.
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Figure 2.7.3-1
Not Used
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[Figure 2.7.3-2
Auxiliary Transformer Protection]
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Tie Circuit Breaker (If Required)
Each metal-clad tie circuit breaker will be provided with time overcurrent
relays (Device 51) and a time overcurrent ground detection relay (Device 51N),
as shown on Figure 2.7.3-3. Device 51 protects the tie circuit and the
switchgear bus, which receives power through the tie circuit, against sustained
short circuit currents. Device 51N is connected to the residual circuit of the
three-phase Current transformers (CT's) and protects the tie circuit and the
switchgear bus, which receives power through the tie circuit, against sustained
ground faults. Devices 51 and 51N provide backup protection for circuits farther
downstream.
Remote Switchgear Feeder Breakers
Each remote switchgear feeder will be protected by a time overcurrent relay
(Device 51) and a time overcurrent ground detection relay (Device 51G or 51N),
as shown on Figure 2.7.3-4. Device 51 protects the feeder circuit and the remote
switchgear bus against sustained short circuit currents and serves as backup
protection for circuits farther downstream. Device 51G or 51N protects the
feeder circuit and the remote switchgear bus against sustained ground faults.
This relay also provides backup protection for circuits farther downstream.
Device 51G is connected to a window-type current transformer (CT) encircling all
the phase conductors and is the preferred means of protecting this type of
feeder circuit against ground faults. Device 51N is connected to the residual
circuit of the three CT's that supply the Device 51 relays. The 51N connection
is used when the zero sequence current transformers cannot encircle all phase
conductors. The 51N connection is less desirable because it cannot be set as
sensitive as the 51G relay to avoid pickup for a false residual current flow
during the starting of a large downstream motor.
Secondary Unit Substation Feeder Breakers
Each secondary unit substation transformer will be protected by phase
overcurrent relays (Device 50/51) and a ground overcurrent relay (Device 50G),
as shown on Figure 2.7.3-5. Device 50/51 will protect secondary unit substations
against the effects of sustained overloads and short circuit currents. Device
50G is an instantaneous overcurrent relay which is connected to detect only
ground fault currents through a 50/5 zero sequence current transformer. Device
50G will protect against ground faults in the high-voltage side of each SUS
transformer and the high-voltage cable feeder.
Bifurcated feeder breakers (switchgear breakers serving two SUS transformers)
will be provided with Devices 50/51 and 51G for each transformer feeder, as
shown on Figure 2.7.3-5. Each relay that trips the breaker will be provided with
target indication visible from the front of the relay. The target indication
will provide immediate identification of which transformer feeder was faulted
and the type of fault that occurred.
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Motor Feeder High-Voltage Motor Starters
Motors rated 5,000 horsepower and less will be supplied from high-voltage motor
starters with drawout vacuum contactors. Each motor starter will be provided
with current-limiting fuses to provide protection against phase-to-phase and
three-phase faults. The fuses will be interlocked with the motor starter
contactor to de-energize the motor if any one of the fuses operates to interrupt
fault current. This will prevent single-phasing the motor. Protection from
overload conditions will be provided by an overload relay or a solid-state motor
protection device. Sensitive ground fault protection will be provided by a
zero-sequence current transformer and instantaneous ground sensor relay or as
part of the solid-state motor protection device.
Motor Feeder Breakers
Motors rated above 5,000 horsepower will be supplied from drawout vacuum
switchgear breakers.
Motors will be protected by phase overcurrent relays (device 50/50/51) and a
ground sensor relay (Device 50G). Device 50/50/51 will provide primary motor and
cable protection and consists of a time overcurrent element and two
instantaneous elements; the time overcurrent element is connected to alarm
overload (via device 74) and is set to pick up at approximately 100 percent of
motor full load current for motors with a service factor of 1.15. The high
dropout instantaneous element is set to pick up at approximately 200 percent of
motor full load current and is connected to trip the motor through the time
overcurrent element contacts. The ordinary instantaneous element is set to pick
up at approximately 200 percent motor locked-rotor current and is connected to
trip the motor.
The ground sensor relay (Device 50G) will provide primary protection for motor
and cable ground faults.
Secondary Unit Substations and MCCs
Overload and fault protection for loads connected to the low voltage secondary
unit substations (SUS) will be provided by Solid-State Trip Devices (SSTD's)
which are an integral part of the drawout type air circuit breakers.
Breakers supplying motors or other devices which do not require coordination
with downstream trip devices will have adjustable long-time and instantaneous
elements for phase protection.
Main breakers, tie breakers, and breakers supplying motor control centers
(MCC's) or other loads which contain trip devices will have adjustable long-time
and short-time SSTD elements for phase protection. The pickup point and time
settings will be adjustable to allow for proper coordination with all downstream
trip devices.
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[Figure 2.7.3-3
Tie Breaker Relaying]
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[Figure 2.7.3-4
Relaying for Source Breaker Feeding Remote Switchgear]
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Sustained undervoltage in the SUS bus will be detected by undervoltage relays
(Device 27), as shown on Figure 2.7.3-6. These relays will sense the potential
across the secondary of a potential transformer and initiate tripping of all
feeder breakers served by the specific SUS bus.
The low voltage system is high resistance neutral grounded. A ground fault will
be detected and alarmed by an overvoltage relay (device 64) which is connected
from one of the resistor taps to ground. The overvoltage relay has a time dial
to prevent operation for a transient condition. It also has a low-voltage pickup
value (16 volts) which is sensitive to ground faults having high impedance.
Locating and isolating the ground will be accomplished with the use of a
portable pulsing device and a portable hook-on ground current detector. The
pulsing device will short across taps provided on the resistor, thus creating
pulsating ground fault currents. The hand-held ground detector is positioned
around each of the feeder circuits (may include conduit) until the faulted
circuit is located. This method of ground fault detection eliminate the need for
tripping loads until the ground fault is isolated.
Motor control centers will be protected by SUS feeder breakers having adjustable
long-time and short-time SSTD elements for phase protection. The SSTD protects
the MCC feeder circuit and the bus against sustained short circuit currents and
serves as backup protection for MCC feeder circuits.
Each magnetic starter within an MCC which supplies power to a motor will be
equipped with a magnetic-only molded case circuit breaker and a bimetallic
thermal overload element in the starter to protect motors against overload.
Certain loads will be fed from MCC feeder circuit breakers. The breakers will be
thermal magnetic molded case breakers sized to protect supply cable and
individual loads.
Low Voltage Power Panels
Power panels will be supplied with thermal-magnetic circuit breakers sized to
protect supply cable and individual loads.
Battery Systems
Four battery systems are provided for the power plant: one battery system for
each of the two Econopacs, one battery system for the plant (station battery
system), and one battery system for the switchyard battery.
Each Econopac battery will provide dc power for its associated Econopac dc
loads, including the emergency lube oil pump motor, the emergency seal oil pump
motor, the turning gear motor and the dc distribution panelboard located in the
dc MCC. The Econopac battery system will consist
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of a 125 Vdc battery, a single battery charger, and a 125 Vdc distribution
panelboard that serves miscellaneous dc loads such as the combustion
turbine-generator protective relay panelboard.
The plant station battery system will provide dc power for the closing and
tripping of the medium and low voltage switchgear circuit breakers, for the WDPF
control system, and for the plant protective relay panelboards. It will also
provide power upon loss of ac auxiliary power for the vital ac system and for
motors necessary for safe coast-down of rotating equipment, including the steam
turbine-generator's emergency lube oil pump motor and emergency seal oil pump
motor. The plant station battery system will consist of a 125 Vdc distribution
panelboard that serves miscellaneous switchyard dc loads.
The batteries will be continually connected to their battery charger(s) to
maintain the batteries at maximum capacity. Each charger will be solid-state
rectifier type with separate float and equalization voltage controls. The
charger will be capable of recharging a completely depleted battery in 12 hours.
In general, each battery will be sized to provide power to the connected
emergency dc lube oil pump motor loads and dc turning gear motor loads (if
applicable) for three hours, to provide power to the connected emergency dc seal
oil pump motor (if any) for 1.5 hours, to provide power to the inverter (if any)
for one hour, and to provide power to any other dc control power functions for
1.5 hours. At the end of a three hour period, the battery will have sufficient
capacity left to close the necessary breakers to reenergize the plant ac system.
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[Figure 2.7.3-5
SUS Transformer Feeder Protection]
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Classification of Hazardous Areas
Areas where flammable and combustible liquids and gases are handled and stored
will be classified for the purpose of determining the minimum criteria for
design and installation of electrical equipment to minimize the possibility of
ignition. The criteria for determining the appropriate classification are
specified in Article 500 of the National Electrical Code (NFPA/ANSI C1). The
application of these criteria to specific areas at generating stations is
provided in the following sections and in Article 127 of the National Electrical
Safety Code (ANSI C2).
In addition to defining hazardous areas by class and division, each hazardous
element is also assigned a group classification (A, B, C, etc.). The group
classifications of hazardous elements are specified in Article 500 of the NEC
and in NFPA Standard 497M.
Electrical equipment in areas classified as hazardous will be constructed and
installed in accordance with the requirements of Articles 501 and 502 of the
National Electrical Code.
References for use in classification of areas, as well as specification of
requirements for electrical installation in such areas, include the following:
(1) National Electrical Safety code ANSI C2.
(2) National Electrical Code ANSI C1, NFPA 70/ANSI C1.
(3) National Fire Codes, National Fire Protection Association codes,
standards, and recommendations.
(4) American Petroleum Institute Recommended Practices.
Flammable and Combustible Liquid Storage and Handling
Areas where flammable and combustible liquids are stored and handled will be
classified , as indicated in the following sections.
Flammable and Combustible Liquid Storage and Handling
Flammable liquids (flash point below 100 F), which includes gasoline (Group D
hazard), will be considered hazardous wherever they are handled or stored. The
areas where gasoline is handled or stored will be classified, as specified in
Section 127.E of the National Electrical Safety code.
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Combustible Liquids
Combustible liquids (flash point of 100 F or higher) include fuel oil, diesel
fuel, and lubrication oil (Group D hazards). Areas where these liquids are
handled or stored will not be classified because they will not be handled or
stored at temperatures which will produce sufficient vapors to form an ignitable
mixture with air beyond the surface of the liquid within the piping or vessel in
which they are normally contained.
Natural Gas Systems
Natural gas systems used as a fuel source for combustion turbines and fired heat
recovery steam generators will be classified as follows:
(1) Areas outdoors within 5 feet of vents from relief valves will be Class I,
Division 1, Group D. Areas outdoors from 5 feet to 15 feet of vents from
relief valves will be Class I, Division 2, Group D.
(2) Enclosed and adequately ventilated areas where gas is compressed will be
Class 1, Division 2, Group D, except for pits and sumps below grade, which
will be Class I, Division 1, Group D.
(3) Outdoor areas with 15 feet of gas compressors, regulators, valves, etc.,
will be Class I, Division 2, Group D, except for pits or vaults within the
15-foot boundaries, which shall be Class I, Division 1, Group D.
(4) Enclosed areas which are not adequately ventilated and where bleed gas or
gas from leaks is anticipated will be Class I, Division 1, Group D. Areas for 10
feet beyond these enclosures, unless separated by a sealed, vapor tight barrier
wall, will be class I, Division 2, Group D. Areas separated by a sealed, vapor
tight barrier will be nonhazardous.
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[Figure 2.7.3-6
Low Voltage Secondary Unit Substation Protection]
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Gaseous Hydrogen Systems
Gaseous hydrogen (Group B hazard) systems used for generator cooling will be
classified as follows:
(1) Areas within 15 feet of outdoor hydrogen storage areas will be Class I,
Division 2, Group B.
(2) Areas within separate buildings or rooms used for storage of hydrogen will
be Class I, Division 2, Group B.
(3) Areas within 25 feet of hydrogen storage systems located inside rooms and
buildings used for purposes other than hydrogen storage will be classified
Class I, Division 2, Group B.
(4) Areas around elements of the hydrogen seal oil system (e.g., detraining
tank, control panel, vacuum tank, etc.), which will be vented externally,
will not be classified.
(5) Areas around hydrogen piping beyond the point where the hydrogen storage
system connects to the distribution piping will not be classified.
Hydrogen storage areas will not be located below electric power lines.
Liquid Hydrogen Systems
Liquid hydrogen (Group B hazard) systems used for generator cooling will be
classified as follows:
(1) Areas within 3 feet of any point where connections are regularly made and
disconnected will be classified Class I, Division 1, Group B.
(2) Except as provided in Class I, Division 1, Group B above, areas within 25
feet of any point where connections are regularly made and disconnected
will be classified Class I, Division 2, Group B.
(3) Areas within 25 feet of liquid hydrogen storage containers will be
classified Class I, Division 2, Group B.
(4) Areas within separate buildings or special rooms used for storage and
handling of liquid hydrogen will be classified Class I, Division 2, Group
B.
Storage containers for liquid hydrogen will not be located beneath electric
power lines or where they might be exposed to their failure.
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Acetylene Storage
Storage areas for unused bottles of acetylene will be classified the same as
gaseous hydrogen, as discussed in 12.6.3, Gaseous Hydrogen Systems, except that
the designation will be Group A rather than Group B. Acetylene storage areas
will not be located near building exits.
Battery Rooms
Battery rooms will be provided with adequate ventilation of hydrogen gas and
will not be classified.
Vehicle Maintenance Garage
Areas used for vehicle maintenance will be provided with adequate ventilation to
remove all flammable vapors and will not be classified except for pits or
depressions below floor level, which will be classified Class I, Division 2,
Group D.
Paint Shop
Enclosed rooms used for spray painting will be classified Class I, Division 1,
Group D. also, an area extending for 3 feet in all directions from the edges of
any opening in such rooms will be classified Class I, Division 2, Group D.
Sewage Lift Stations
Sewage lift station wet wells and any enclosed nonventilated area above the wet
well will be classified Class I, Division 1, Group D.
Grounding
The station grounding system will be an interconnected network of bare copper
conductor and copper-clad ground rods. The system will be provided to protect
plant personnel and equipment from the hazards which can occur during power
system faults and lightning strikes.
The grid conductor size and quantity and length and quantity of ground rods will
be calculated, for acceptable step and touch potentials, in accordance with IEEE
80 standard, based on soil resistivity determined by test performed in
accordance with IEEE standards.
Design Basis
The station ground grid will be designed for adequate capacity to dissipate heat
from ground current under the most severe conditions in areas of high ground
fault current concentrations, with grid spacing such that safe voltage gradients
are maintained.
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Bare conductors to be installed below grade will be spaced in a grid pattern to
be indicated on the construction drawings. Each junction of the grid will be
bonded together by an exothermal welding process.
In the plant area, grounding stingers will be brought through the ground floor
and connected to the building steel and selected equipment. The grounding system
will be extended, by way of stingers and conductor installed on the outside of
cable tray, to the remaining plant equipment. Equipment grounds will conform to
the following general guidelines:
(1) Grounds will conform to the NEC and NESC.
(2) Major items of equipment, such as switchgear, secondary unit substations,
motor control centers, relay panels, and control panels will have integral
ground buses which will be connected to the station ground grid.
(3) Electronic panels and equipment, where required, will be grounded,
utilizing an insulated ground wire connected in accordance with the
manufacturer's recommendations. In some situations, a separate small grid
and ground rod, isolated from the main ground, will be required. Where
practical, electronics ground loops will be avoided. Where this is not
practical, isolation transformers will be furnished.
(4) Motor supply circuits to low voltage motors, which utilize three-conductor
cable with a ground in the interstices, will utilize this ground for the
motor ground. For low voltage motor supply circuits which utilize three
single-conductor cables, the ground conductor will be sized in accordance
with the following:
Supply Conductor Size Ground Conductor Size
--------------------- ---------------------
2/0 AWG 6 AWG
3/0 AWG through 250 kcmil 4 AWG
350 kcmil through 750 kcmil 2 AWG
(5) All 2,300-volt and higher voltage rated motors will have a minimum of one
1/0 AWG bare copper ground conductor connected between the motor frame and
the station ground grid.
(6) A copper grounding conductor, which is part of an approved multiconductor
cable assembly or is a separate conductor, will be routed parallel to all
power conductors in accordance with Article 250-95 of the National
Electrical Code.
Remote buildings and outlying areas with electrical equipment will be grounded
by establishing local subgrade ground grids and equipment grounding systems in a
manner similar to the plant area. Remote grids, where practical, will be
interconnected with the station ground grid to reduce the hazard of transferring
large fault potentials to the remote area through interconnecting
instrumentation and communication cable shields.
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The conduit system will not be considered to be a grounding conductor except for
itself and lighting circuits.
Materials
Grounding materials furnished are described in the following:
(1) Rods will be copper-clad, as manufactured by Copperweld, Blackburn, Weaver
or equal. Ground rod length and diameter will be determined by soil
resistivity and subsurface mechanical properties. Where required ground
rod length exceeds 10 feet, standard sections will be exothermally welded
together, using a guide clamp.
(2) Cable will be soft-drawn copper with Class B stranding or copper-clad
steel.
(3) Exothermal welds will use molds, cartridges, and materials, as
manufactured by Cadweld or equivalent.
(4) Clamps, connectors, and other hardware used with the grounding system will
be made of copper and purchased from an approved supplier.
(5) Ground wires installed in conduit will be soft-drawn copper with Class B
stranding and green-colored, 600-volt insulation.
Lighting
The lighting system will provide personnel with illumination for plant operation
under normal conditions, means of egress under emergency conditions, and
emergency lighting to perform manual operations during a power outage of the
normal power source. The permanent lighting system will be used for construction
lighting in areas where early installation is feasible. Temporary construction
lighting will be utilized in all other areas. The power supply for the lighting
system will be from low voltage, three-phase, four-wire panelboards. Emergency
lighting will be provided from emergency lighting units with self-contained
batteries.
Light Sources
The lighting system will be designed in accordance with the Illuminating
Engineering Society (IES) to provide illumination levels recommended by the
following standards and organizations:
(1) ANSI/IES RP-7, 1983, Industrial Lighting.
(2) ANSI/IES RP-8, 1983, Roadway Lighting.
(3) Federal Aviation Administration (FAA).
(4) Occupational Safety and Health Act (OSHA).
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Table 2.7.3-1 summarizes the illumination levels.
Light sources and fixture selections will be based on the applicability of the
luminaires for the area under consideration.
Three types of lamps will be used for the light sources in the lighting system,
including fluorescent, high-pressure sodium, and incandescent. Generally,
fluorescent lamps will be used in indoor, enclosed areas; high-pressure sodium
lamps will be used outdoors and in high-bay areas; and incandescent lamps will
be used for emergency lighting.
For design purposes, lighting is categorized by the following areas:
(1) Indoor unfinished areas.
(2) Outdoor areas.
(3) High bay.
(4) Roadway and area.
(5) Egress and emergency.
(6) Control room.
(7) Construction.
Indoor Unfinished Areas
This category comprises most of the indoor low-bay areas, such as storage areas,
electrical equipment rooms, and warehouses. These areas will generally be
lighted, using industrial fluorescent fixtures.
High-pressure sodium fixtures will be used in areas where industrial fluorescent
fixtures are not suitable or cannot be installed due to physical or functional
limitations.
Outdoor Areas
This category includes lighting of equipment located outdoors and outdoor
platforms. High-pressure sodium fixtures suitable for use in wet locations will
be used.
High Bay
High-bay areas with light fixture mounting heights of 25 feet and above will be
lighted, using high-bay fixtures with high-pressure sodium lamps.
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Roadway and Area
Roadway and area lighting will be designed, using high-pressure sodium light
sources.
Egress and Emergency
Buildings equipped with artificial illumination will have adequate and reliable
illumination provided for egress to exit facilities. The emergency lighting
system will be used in the control room where illumination is required to
perform manual operations during a power outage of the normal source.
Control Room
The control room lighting will consist of general area, control panel,
emergency, and exit lighting. Control room general area lighting and control
panel lighting will be provided by fluorescent light fixtures to minimize
reflected glare. The fixtures will be powered from the plant reliable service.
The emergency light fixture will be normally "off" and will be automatically
turned "on" upon loss of the plant reliable service.
Construction Lighting
Lighting during construction will be for the benefit of all contractors engaged
in work at the jobsite. In areas where construction restricts natural lighting
from the sun and foot-candle levels approach OSHA minimum levels, construction
lighting will be placed in operation as soon as practicable and kept in
continuous operation while any work is in progress.
Temporary lighting will be required for most enclosed areas during early
construction before permanent panelboards, raceway, and light fixtures are
installed. Temporary lighting will consist of portable cords and guarded lamps
so that it can be relocated and/or added by the Contractor to provide
foot-candle levels for safe working conditions and clearances for piping and
equipment installations. Permanent lighting will be installed in areas where
construction of the structure is complete and installation of light fixtures,
conduit, and panelboards can be permanently installed.
Lighting Control
Electric power to light fixtures will be switched with wall-mounted light
switches in areas where the light can be "off' when the area is not occupied.
Wall-mounted switches will be provided at the entrance to rooms or other
enclosed spaces.
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Table 2.7.3-1
Illumination Levels
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Maintained
Interior Location Foot-Candles
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Air-Conditioning Equipment 10
Assembly Rooms 100
Auxiliaries, Battery Rooms, Boiler Feed Pumps, Tanks, 20
Compressors, Gauge Area, Inverter Rooms
Boiler Platforms 10
Cable Room, Circulator, or Pump Bay 10
Chemical Laboratory 100
Condensers, Deaerator Floor, Evaporator Floor, Heater Floors 10
Control Rooms 50
Control Room Emergency Lighting 3
Hydrogen Manifold Area 20
Switchgear, Power 20
Toilets 30
Turbine Room 30
Water Treating Area 20
Office 75
Exterior Walkways and Platforms 2
Roadway 1
Security fence 0.5
Outdoor areas containing equipment that requires periodic 5
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Electric power to light fixtures in the Generation Building will be switched at
the panelboard, and the light fixtures will be circuited so that adjacent
fixtures are connected to alternate phases of a three-phase circuit. This type
of circuiting will permit the operator to uniformly increase the illumination
level, as required.
Electric power to light fixtures located outdoors will be switched with
photoelectric controllers.
Lighting Fixture Supports
In plant areas below the operating floor and areas that are congested with
piping, raceway, and overhead equipment, the lighting fixtures will be supported
from continuous-row, Unistrut-type
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channel. In other areas of the plant, light fixtures will be supported by rigid
steel conduit or 1/2-inch threaded rod pendants where they cannot be mounted
directly on the underside of decks, on structural steel, or in finished
ceilings.
Wiring Devices
Convenience outlets throughout the indoor areas of the plant and in the outlying
structures will be duplex, straight-blade, grounding-type receptacles rated at
20 amperes and 240 volts. Convenience outlets located outdoors will be duplex
receptacles with weatherproof snap-action covers. The outlets will be spaced to
provide access to almost any point in the plant or structure with a 50-foot
extension cord. In hazardous locations, convenience outlets will be suitable for
the NEC class and group requirements.
Switches used throughout the plant will be rated at 20 amperes and 240-volt ac
with enclosures suitable for the location in which they are installed.
Freeze Protection
A freeze protection system will be provided for outdoor piping, gauges, pressure
switches, and other devices subject to freezing.
For pipes which operate below 420 F, parallel circuit-type heating cable will be
directly applied to the pipe. These heating cable circuits can be assembled and
installed in the field, using the appropriate connection kits.
For pipes which operate at 420 F and above, factory-assembled, mineral
insulated-type heating cable will be used.
Power distribution panelboards, each fed from a low voltage transformer, will
furnish power to the freeze protection circuits. Power to the freeze protection
circuits will be controlled by ambient thermostats. In addition, thermostats
that sense actual pipe temperature may be required to prevent overheating of
critical process or chemical piping. Remote alarms for the overall system and
local monitoring of each freeze protection circuit will be provided. The freeze
protection system design will provide approximate balancing of load between the
three phases at each panelboard.
The freeze protection system will be designed to prevent freezing of liquids at
the coldest weather conditions defined in 2.2, Site Description, of this manual.
Lightning Protection
Lightning protection will be provided for the chimney, for the top of the
Generator Building if provided, and for the cooling tower.
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Lightning protection for the chimney will be provided by connecting the metal
stack to the ground grid.
Lightning protection for the Generator Building will consist of air terminals
installed on the building roof. The air terminals will be connected together
with copper cable and connected to the plant ground grid with copper down
conductors or through the building steel. Air terminals will be arranged to
provide protection for roof penetrating devices, such as piping, air-moving
equipment, etc.
Lightning protection for the cooling tower will consist of air terminals
provided at intervals around the top of each cell. The air terminals will be
connected together by copper cable and connected to the ground grid with copper
down conductors.
Raceway and Conduit
The design and specifications for the raceway and conduit systems used in
supporting and protecting electrical cable will be in accordance with the
provisions of the NEC.
Cable Tray
All cable trays except for electronics trays will be of ladder-type construction
with a maximum rung spacing of 6 inches, nominal depths of 4 to 6 inches, and
various widths, as required. There will be a maximum spacing of 8 feet between
cable tray supports, except fittings (elbows, tees, etc.) which shall be
supported in accordance with NEMA standards.
Cable tray fittings will have a radius of 12 or 24 inches.
Cable trays, cable tray fittings, and cable tray covers will be constructed of
steel or aluminum; steel shall be hot-dipped galvanized after fabrication.
Solid-bottom trays will be provided for all special noise-sensitive circuits and
analog instrumentation circuits.
Individual tray systems will be established for the following services:
(1) Medium voltage and higher power cables.
(2) Power and control cables with 600-volt insulation.
(3) Special noise-sensitive circuits or instrumentation cables.
Further subdivision of tray systems will be provided where justified by the
quantity of tray required so that cables associated with duplicate equipment or
redundant control devices can be routed in separate trays to provide isolation.
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The summation of the cross-sectional areas of cable in tray will be limited to
30 percent of the usable cross section of the tray for medium voltage power
cables and to 40 percent for 600-volt and lower power and control cables.
The minimum design vertical spacing for trays will be 12 inches measured from
the bottom of the upper tray to the top of the lower tray. At least a 9-inch
clearance will be maintained between the top of a tray and beams, piping, or
other obstacles to facilitate installation of cables in the tray. A working
space of not less than 24 inches will be maintained on at least one side of each
tray.
Ventilated covers will be provided for vertical trays. Solid covers will be
provided for all solid-bottom tray and for all outdoor tray. Solid covers will
also be provided for the top tray of horizontal tray runs located under grating
floor or insulated piping and for all tray routed in areas where coal dust or
oil might enter or accumulate.
Conduit
Conduit will be used to protect conductors to individual devices, in hazardous
areas, and where the quantity of cable does economically justify the use of
cable tray.
Electrical Metallic Tubing (EMT) will be used indoors in nonhazardous areas for
lighting branch circuits and communication circuits.
PVC conduit will be used for duct banks, some below grade concrete-encased
conduit, and for direct burial of area lighting branch circuits.
Liquid tight flexible metallic conduit will be used for connections to accessory
devices, such as solenoid valves, limit switches, pressure switches, etc., for
connections to motors or other vibrating equipment, and across areas where
expansion or movement of the conduit is required.
All other conduit, unless specific environmental requirements dictate the use of
plastic or aluminum conduit, will be rigid galvanized steel (RGS).
Intermediate metal conduit (IMC) could be substituted for RGS, where allowed by
local building codes to reduce cost.
Exposed conduit will be routed parallel or perpendicular to dominant surfaces
with right-angle turns made of conduit bends or fittings.
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2x1 501G REFERENCE PLANT
APPLICATION HANDBOOK
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ELECTRICAL ENGINEERING DESIGN CRITERIA
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Conduit will be sized in accordance with the National Electrical code as
follows:
Number of Cables Maximum Percent Fill
---------------- --------------------
1 53
2 31
3 or more 40
Conduit will be securely supported within 3 feet of connections to boxes and
cabinet and in accordance with the following table:
Maximum Distance
Conduit Size Between Supports
------------ ----------------
1/2 through 1-1/4 inch 8 feet
1-1/2 inch and larger 10 feet
Supports for single and dual runs of conduit will be one-hole, cast-metal clamps
and clamp backs. Supports for banks of three or more conduits shall be
constructed of U-shaped support channels with associated conduit clips.
Duct Bank
Underground duct banks will be used for cable routed between buildings and other
remote areas, as necessary.
All underground duct banks excluding conduit under building slabs will consist
of type DB plastic conduit encased in reinforced concrete. Underground conduit
within the large building slabs shall be direct burial conduits with a 4" slab
of concrete above the conduit. The nominal diameter of the plastic ducts will be
4 inches. A galvanized steel conduit will also be installed, where required, for
digital and analog low-level circuits requiring noise immunity from adjacent
power circuits.
All underground duct banks outside the generation building will be installed in
accordance with the following methods:
(1) Ducts will be sloped not less than 3 inches per 100 feet to manholes to
provide adequate drainage. Low spots in duct runs will be avoided.
(2) Reinforcing steel will not form closed magnetic paths between ducts.
Nonmetallic spacers will be used to maintain duct spacing.
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2x1 501G REFERENCE PLANT
APPLICATION HANDBOOK
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ELECTRICAL ENGINEERING DESIGN CRITERIA
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Reinforced concrete manholes and electrical vaults will be provided, where
required, so that cable may be installed without exceeding allowable pulling
tensions and cable sidewall pressures. Each manhole will have the following
provisions:
(1) Provisions for attachment of cable-pulling devices.
(2) Provisions for racking of cables.
(3) Manhole covers of sufficient size to loop feed the largest diameter cable
through the manhole without splicing.
(4) Sealed bottoms and sump pits. The sump pits will be used for water removal
by portable sump pumps. No permanent sump pumps will be provided.
Conduit from manholes to the equipment at remote locations and duct bank risers
will be changed to rigid steel prior to emerging from below grade. All
below-grade steel conduit will be encased in concrete.
Wireway
Wireway will be used to connect panelboards and junction boxes to the raceway
system where the use of wireway is more economical than conduit. Wireway will
also be utilized for electronic circuits where the quantity of cable does not
justify the use of cable tray. Wireway will be oil tight Type JIC with hinged
and gasketed covers.
Cathodic Protection System
Consideration will be given to the need for cathodic protection and other
corrosion control measures for the following structures:
(1) The exterior surface of underground welded carbon steel pipe, copper pipe,
stainless steel pipe, cast iron and ductile iron pipe, and prestressed
concrete cylinder pipe.
(2) Underground tanks and the bottoms of surface-mounted steel tanks.
(3) The interior surfaces of condenser and heat exchanger water boxes.
It is expected that buried bare copper ground grid components will be in close
proximity to, but not in contact with, underground welded steel piping and
welded steel tank bottoms.
Measures will be taken for the control of corrosion so as not to materially
reduce the total effectiveness of the plant electrical safety grounding systems.
The methods to be used for cathodic protection will be determined after tests
determine minimum average soil resistivity or layer resistivity which may be
expected in pipe burial zones.
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Expected Performance
--------------------------
==========================
[*] Entire section has been omitted pursuant to a
confidential treatment request.
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501G Combustion Turbine
-----------------------
=======================
[*] Entire section has been omitted pursuant to a
confidential treatment request.
<PAGE>
Combustion Turbine
Auxiliary Equipment
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======================================
<PAGE>
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Combustion Turbine Auxiliary Equipment
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INTRODUCTION
The plant auxiliary equipment is prepackaged to the extent consistent with
shipping limitations and is located in major packages such as the Starting
Package, the Electrical/Control Package, the Lube Oil Package, the Liquid Fuel
and Water Injection Packages, and the Piping Package.
THE STARTING PACKAGE ASSEMBLY
The Starting Package is located in front of the generator (looking in the
direction of turbine air flow) and is designed for automatic operation. This
system is delivered as a modular package with a bedplate and housing, including
electric motor, with differential relay protection torque converter with
charging pump, turning gear, and clutch.
Operation
The starting function is accomplished with an electric motor and a single torque
converter.
The turning gear is driven by a DC motor through a gear box. During the starting
process, the turning gear, through the clutch, provides the breakaway torque
necessary to accelerate the combustion turbine from zero rpm. Once initial
rotation is achieved, the starting motor takes over. The motor takes the turbine
up to approximately 20% speed, where ignition takes place. The motor then helps
the turbine accelerate to its self-sustaining speed. At this point, the Starting
Package disengages and the starting motor decelerates. The turbine continues to
accelerate to synchronous speed.
During normal shutdown, after the fuel has been shut off and the turbine has
coasted down to 3 rpm, the turning gear motor is engaged and rotates the turbine
rotor to maintain uniform cooling. This process reduces the possibility of rotor
warpage occurring.
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The starting package is designed to run continuously. Thus, when a turbine
shutdown occurs for maintenance purposes, the engine can be spin cooled to
reduce outage time. This allows the turbine to reach appropriate temperature
levels for compressor water wash in approximately four (4) hours. Major
maintenance operations which require cover lifts can be started in approximately
eight (8) hours.
Starting Package Lubrication
The starting package utilizes an internal oil system to provide the torque
converter with its working fluid. The system contains a pump, small reservoir,
and an oil cooler to assist in heat removal during periods of torque converter
operation. The main lube oil system supplies lubrication to the starting motor
bearings, clutch, torque converter bearings, and step up gear box when required.
Although the working and lube oil both flow to the starting package oil
reservoir via a common drain, the overflow is sent back to the main lube oil
tank via a drain line which ties the two systems together.
Starting Assembly Housing
A welded steel housing encloses the Starting Package. It incorporates access
doors and a maintenance platform. Louvered openings provide ventilation. The
housing is shop fabricated and installed on the Starting Package for shipment as
a complete assembly.
ELECTRICAL/ CONTROL PACKAGE
ASSEMBLY
The Electrical/Control Package of the ECONOPAC plant is factory assembled on its
own bedplate complete with an enclosure. All enclosure services are
pre-assembled including internal lighting and electrical wiring.
The Electrical/Control Package contains no mechanical components (excluding
HVAC) which provides a clean environment for the electrical and control
equipment. The main control and monitoring equipment is housed within the
Electrical/Control Package. This package has redundant full-sized HVAC units to
provide the proper environment for sensitive control equipment. The HVAC units
are shipped loose and then installed by others in the field.
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Lube Oil System
The purpose of the lubrication system is to provide clean, filtered oil at the
required temperature and pressure to all bearings, the starting package and the
generator seal oil system. The principal lube system components are the lube oil
reservoir and skid mounted motor driven pumps.
The combustion turbine-generator unit is safeguarded with respect to loss of
lubricating oil. Starting control system logic is designed so that the
combustion turbine cannot be rotated without the required lubricating oil
pressure. In the starting sequence, the AC motor-driven oil pump (main oil pump)
is running when the starting sequence is initiated. The DC motor-driven back-up
oil pump (emergency pump) will start but will be shut off after the confirmation
of AC motor operation.
Two AC motor-driven 100% pumps are included to enhance the availability of the
lube oil system. Both AC motor-driven pumps are designed to supply all of the
oil needed for operation and only one pump runs during normal operation. In the
event that both main oil pumps fail to maintain pressure, the combustion turbine
will be tripped and the emergency DC lube oil pump will be started. The DC oil
pump will permit safe operation during the shutdown and subsequent turning gear
operation.
Protection of the turbine-generator unit is provided to prevent starting if the
oil temperatures are not within desired limits. A lube oil heater is provided in
the oil reservoir to keep the oil at or above the desired minimum temperature
required for starting. A cooler is provided to keep the oil within the desired
temperature limits while running. The base offering is one (1) plate type oil to
water heat exchanger.
Two 100% capacity vapor extractors in the lube oil reservoir provide a partial
vacuum for each bearing housing to prevent oil leakage to the outside of the
bearing.
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Generator Double Flow Seal Oil System
General
The following description of the Seal Oil System is divided into two parts: a
physical description which locates the components of the system; and, a
functional description, which gives a simplified discussion of how the system is
designed to work.
Physical Description
The Seal Oil System consists of a seal oil unit, associated piping to and from
the generator, and the hydrogen (H2)seals located at each end of the generator.
The seal oil unit has a steel base with four reinforced posts near the center.
The components are mounted on the base and posts for ease of access and
maintenance. Major components installed in the unit can be removed as necessary
for maintenance or replacement. Minor components, such as general valving, are
welded in the piping of the unit and can be repaired in place if necessary. Many
monitoring and control devices such as gauges and pressure switches are also
mounted on the seal oil unit.
The seal oil piping is installed between the seal oil unit and the generator
during erection.
Oil piping also exists between the unit and the lubrication oil reservoir, a
source of backup oil for the Seal Oil System. The loop seal tank serves as the
interface point between the seal oil system and the lubrication Oil System.
Plant closed loop cooling water piping also connects to the seal oil unit to
provide a source of station cooling water for the seal oil coolers.
Functional Description
The Purpose of the Seal Oil System is to:
a. Provide sealing oil to the H2 seals to prevent the escape of hydrogen gas
from the generator.
b. Provide lubrication to the H2 seals to prevent seal wear.
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c. Provide a means of minimizing the amount of air and moisture entering the
generator.
The Seal Oil System is a self-contained system that supplies oil to the H2 seal
rings. The same oil is used in the Seal Oil System and the Lubrication Oil
System. This oil can absorb hydrogen gas, air, and moisture.
The Seal Oil System is separated into air-side seal oil supply and hydrogen-side
seal oil supply. Each of these supplies contains an oil cooler to maintain an
acceptable oil temperature range. Edge-type filters in both supplies help
prevent contaminants in the oil from damaging the system or the H(2) seal rings.
The Seal Oil System uses motor-driven positive-displacement pumps to provide the
necessary oil pressure. Valves regulate the pressure and flow of the oil to the
hydrogen seal rings and between the air-side and hydrogen-side seal oil
supplies. Pressure and temperature devices constantly monitor the Seal Oil
System while operating. A simplified description of the Seal Oil System
operation is given in the following paragraphs.
Generator Hydrogen Seals
Before the generator enclosure is filled with hydrogen, and/or the shaft is
rotating, the seal oil system must be operating. The Seal Oil System helps keep
hydrogen gas from escaping the generator frame and minimizes the air and
moisture entering the generator. Without the seal oil system, hydrogen could
escape along the rotor shaft. The Seal Oil System supplies high-pressure oil to
the hydrogen seal rings at each end of the generator to seal the rotor shaft
where it leaves the gas tight generator enclosure.
During normal operation, seal oil from the air side and hydrogen side of the
Seal Oil System is supplied to the H(2) seal rings at an approximate pressure 12
psi (0.84kg/sq cm) above the hydrogen gas pressure. Seal oil pressure is
referenced to the centerline of the turbine generator to compensate for the head
pressure differences.
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There are feed passages in the hydrogen seal bracket for the seal oil. The
air-side seal oil is supplied through at least two of these passages. The
hydrogen-side seal oil is supplied through another passage.
One air-side seal oil feed passage supplies oil laterally to the air side of the
H2 seal ring. This balances pressure on the ring and allows free movement of the
ring in the radial direction. Another air-side seal oil feed passage and the
hydrogen-side seal oil feed passage supply oil to two annular grooves in the H2
seal ring. From these grooves, the oil flows both ways along the shaft through
the clearance space between the shaft and the inner diameter of the gland seal
ring. With the air-side and hydrogen-side seal oil system pressures correctly
balanced, there is little or no flow of oil in the clearance space between the
two feed grooves.
Oil supplied by the air side of the Seal Oil System flows outward along the
shaft toward the bearing. This helps prevent release of absorbed air or moisture
into the generator . Oil supplied by the hydrogen side of the system flows
inward along the shaft toward the inside of the generator. This helps keep the
air-side seal oil from contacting the hydrogen and helps prevent the escape of
absorbed hydrogen to the outside atmosphere. Because the air-side and hydrogen
side seal oil feeds are separate, high hydrogen purity is maintained.
The H(2) seal ring restricts and directs the flow of oil through the seal. This
ring can move radially with the shaft, but is kept from rotating by a pin to the
supporting structure. Oil leaving the gland seal rings at each end of the
generator is caught in chambers on each side of the seal.
The air-side seal oil drains back into the bearing drains. This oil and the
lubrication oil from the generator bearings drain to the loop seal tank. The
loop seal helps keep hydrogen from getting into the lubrication oil reservoir if
hydrogen escapes past the seals. The gas is then discharged by the loop seal
vapor extractor.
Oil from the hydrogen side of the H2 seal ring goes to defoaming tanks. The
defoaming tanks slow the oil velocity and provide a surface area that allows
hydrogen bubbles to escape, reducing oil foaming.
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The defoaming tanks are located in the bearing brackets of the generator.
Standpipe overflow connections maintain the oil level in the defoaming tanks.
There is a defoaming tank for each hydrogen seal and a trap in the drain line
between the two tanks. The trap helps keep the difference in gas pressure at the
two ends of the generator from circulating vapors through the generator.
Oil Supply
The hydrogen-side seal oil shown is supplied to the inside groove of the
generator shaft seal; after use, the oil drains into the defoaming tank. From
the defoaming tanks, the oil drains to a hydrogen-side receiver tank which feeds
the hydrogen-side drain regulator.
This drain regulator is located in the seal oil unit. The drain regulator and
receiver tank act as reservoirs for the oil used in the hydrogen-side seal oil
loop. If excess oil builds up in the regulator tank, a float-operated drain
valve opens and releases the excess oil to the air-side oil drain. If the tank
level is too low, a float-operated valve opens to allow makeup oil from the
air-side pump to fill the tank to the correct level.
LIQUID FUEL PUMP SKID ASSEMBLY
The Liquid Fuel Packages of the ECONOPAC plant are factory assembled with their
own bedplates. The Liquid Fuel Pumping package contains the fuel pump, fuel
filter, fuel oil pressure regulating valve, and the interconnecting piping.
FUEL RACK
The Fuel Rack contains the flow divider(s) and control valve(s) near the
combustion turbine. Gauges are provided for convenient local monitoring of the
liquid fuel system critical parameters.
GAS FUEL SYSTEM
The principal components of the gas fuel system are located within the Turbine
Enclosure on the Fuel Rack. These include the fuel gas throttle, overspeed trip,
pressure regulating and
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vent valves, and interconnecting piping. A fuel gas filter/separator is provided
in a location immediately outside of the turbine enclosure. The gas isolation
valve is located in the fuel rack A pressure switch and gauge panel is provided
for local monitoring of the fuel gas system.
INLET AIR AND EXHAUST GAS SYSTEM
Air that is drawn into the combustion turbine is filtered via a two stage pad
type filter arrangement. From the filter the inlet air duct directs ambient air
into the compressor inlet air manifold. This manifold is designed to provide a
smooth flow pattern into the axial flow compressor. Sound attenuation is
provided by an inlet air silencer. After passing through the turbine section,
the combustion gasses discharge axially through a transition section and into
the heat recovery steam generator (HRSG) before exiting the stack.
ECONOPAC Enclosures
A modular steel enclosure houses the combustion turbine. This enclosure
provides:
o A controllable interior climate.
o Sound attenuation and the control of sound radiation patterns.
o Thermal radiation control.
o A sealable chamber to allow use of sophisticated fire protection
equipment.
o A well-lighted environment for performing many routine tasks.
Detailed Construction
Each enclosure consists of rigid structural steel frames covered by sectional
panels to form both roof and walls.
The wall covering or "skin" is of "sandwich-type" construction. The outer layer
is 3/16" steel plate. A special grade of fiberglass insulation is the center of
"filler" material, and a perforated inner wall of 24-gauge galvanized steel
sheet completes the cross-section.
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The enclosures are furnished with ventilating systems.
Normal and emergency lighting systems are standard in each enclosure.
The main lights are AC powered fixtures which illuminate each enclosure.
An emergency battery-powered system provides lighting in the event of loss of AC
auxiliary power.
Exits, including the exteriors of door-ways, are illuminated to permit safe
night-time passage by personnel.
Exits are located on both sides of the turbine enclosure.
Duplex outlet receptacles are located in each enclosure.
The Combustion Turbine Enclosure provides adequate room to walk around. Minor
and preventive maintenance, such as nozzle inspection and cleaning, can be
performed within the turbine enclosure. Laydown space for minor disassembly is
also provided. For major disassembly requiring lifting combustion turbine
covers, removable panels in the enclosure roof are supplied.
Ladders, walkways and doors are located and sized to enable ready access to the
operating equipment.
FLUID INJECTION SYSTEMS
Transition Steam System:
The 501G transitions are steam cooled to allow the combustion turbine to operate
at higher rotor inlet temperatures while maintaining the same burner outlet
temperature as the 501F class combustion turbine.
Steam is generated from the hot turbine exhaust gases in the IP steam system of
the HRSG and is manifolded into the thin wall exterior of the transitions to let
the transitions cool. This
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hot steam is then returned to the hot reheat steam system and improves the
overall efficiency of the combined cycle power plant.
Water Injection Systems
(Note: Steam Injection may be used in lieu of Water Injection pending field
testing results.)
Water is required only for liquid fuel operation and is premixed with the fuel
stream immediately upstream of the individual fuel nozzles.
The systems consist of a water injection pump, strainer, water return valve, and
appropriate flow meters, purge throttle and isolation valves, and stage throttle
valves.
In addition, the transition cooling steam system continues to operate on oil.
ECONOPAC PIPING
Piping for the ECONOPAC is designed and manufactured to reduce field work. Each
of the major pipe modules is completely factory pre-assembled, reducing field
connections.
The Turbine Pipe Package is located adjacent to the combustion turbine inside
the Turbine Enclosure. It contains a large portion of the cooling air and lube
oil supply and return lines. Also located within the package is the rotor
cooling air filter.
The Generator Pipe Package is located adjacent to the generator and contains
necessary lube and seal oil supply and drains.
COOLING ASSEMBLIES
Lube Oil Cooler
The simplex oil-to-water plate type lube oil cooler is mounted adjacent to the
combustion turbine. A temperature control valve maintains the lube oil
temperature within the design range.
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Air Coolers
A comprehensive cooling system is provided to supply cooling air to the high
temperature areas of the power turbine section. These include the rotor cooling
air circuit and the stage 2 stator cooling air circuit.
Rotor Circuit: Compressed air is bled from the cylinder in the vicinity of the
Row 1 Blade Ring, passed through an external heat exchanger and then fed to the
rotor by means of internal piping.
Stage 2 Stator Cooling Circuit: The stage 2 stator cooling circuit uses 13th
stage compressor bleed air. The extracted air is cooled to 580 F by an external
heat exchanger and then fed to the stage 2 stator.
Generator Cooling System
A closed loop water/water cooling system will be provided for the hydrogen
cooled generator, seal oil cooler(s), and starting package working fluid cooler.
Refer to the Auxiliary Cooling Water System section under Section IV, tab B.
Fire Protection System
The fire protection system gives a visual indication of actuation at the local
control panel. There are two independent systems:
1) An automatically actuated dry chemical type system is provided for the
exhaust bearing area of the turbine. The system consists of temperature
sensing devices, spray nozzles, dry chemical tank, and inter-connecting
piping and wiring.
2. An FM-200 based fire protection system is provided for total flooding
protection of the Turbine Enclosure and the Electrical/Control Package in
accordance with the U.S. National Fire Protection Agency standards.
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Miscellaneous Equipment
o Platforms, railings, and ladders
o Insulation for piping, turbine, and ducting (as required).
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Heat Recovery Steam
Generator and Accessories
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Heat Recovery Steam Generator and Accessories
Table Of Contents
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SECTION DESCRIPTION PAGE
1.0 HEAT RECOVERY STEAM GENERATOR AND ACCESSORIES .......................1
1.1 SCOPE ...............................................................1
1.2 SERVICE REQUIREMENTS ................................................2
1.3 DESIGN REQUIREMENTS .................................................2
1.3.1 General .............................................................2
1.3.2 Thermal and Hydraulic Performance ...................................3
1.3.3 Drums ...............................................................3
1.3.4 Headers .............................................................4
1.3.5 Tubes and Tube Banks ................................................5
1.3.5.1 General .............................................................5
1.3.5.2 Economizers .........................................................5
1.3.5.3 Superheaters ........................................................5
1.3.6 Fittings and Accessories ............................................6
1.3.7 Controls and Instrumentation ........................................6
1.3.7.1 Steam Temperature Control ...........................................6
1.3.7.2 Feedwater Control System ............................................6
1.3.7.3 Boiler Blowdown Control .............................................6
1.3.7.4 Instrumentation General .............................................6
1.3.8 Structure ...........................................................7
1.3.9 Insulation ..........................................................7
1.3.10 Boiler Setting, Casing, and Ductwork. ...............................8
1.3.11 Stack................................................................9
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Heat Recovery Steam Generator and Accessories
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1.1 SCOPE
Each heat recovery steam generator (HRSG) consists of the following major
components:
o High, intermediate and low pressure superheaters, reheaters, high,
intermediate and low pressure economizers, and high, intermediate
and low pressure evaporator sections, including all interconnecting
piping and headers
o Access platforms, ladders, and handrails
o Structural and supporting steel for HRSG, ducts, flues, and access
platforms
o Steam drums with internals and steam separator
o Selective Catalytic Reduction (SCR) Catalyst
o CO Spoolpiece
o Access, observation, and inspection doors
o Inlet transition ducting
o Expansion joint and transition ducting to a common stack
o Casing enclosing the boiler
o Instrumentation and controls, including ports for continuous
emissions monitoring system
o Safety relief valves
o Turbine cooling systems for rotor air and stage 2 air
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1.2 SERVICE REQUIREMENTS
Heat from the gas turbine exhaust will be used by the various boiler
sections to generate steam for the steam turbine.
The design of the HRSG will include the following requirements to respond
to the gas turbine characteristics:
o Start-up from cold condition with minimum limitation on the gas
turbine
o Suitability for fast changes in working conditions
o Designed for sliding pressure operation
1.3 DESIGN REQUIREMENTS
1.3.1 General
The HRSG will be of the horizontal, natural circulation, reheat type. Tube
headers, intermediate headers, and mud drums must not be directly in the
gas path and will be protected by gas baffles. Pressure part welds will be
external to the gas path to the maximum practical extent to facilitate
inspection and maintenance.
The HRSG will be designed in accordance with the ASME Code Section 1 and
ANSI/ASME B31.1 Power Piping Code.
Blowdown system design, and steam separation equipment, will be consistent
with American Boiler Manufacturers Association (ABMA) requirements.
Connections will be provided for nitrogen capping.
The HRSG will be designed to provide automatic control for safe, reliable,
and uninterrupted operation.
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Provisions will be made to vent steam as necessary so that flows through
the various tube banks are maintained, and to minimize drum level
transients due to swelling or shrinkage of water in the water tubes during
the stages of start-up and shut down.
1.3.2 Thermal and Hydraulic Performance
The HRSG exit temperature will be commensurate with the exhaust dew point
while using natural gas or liquid fuel.
The design will achieve stable economizer flows.
The gas side design will minimize flow-induced vibration of tubes. If
required, baffles will be installed in the hot gas path to minimize
vortex-induced acoustic vibration.
1.3.3 Drums
The pressure parts will be designed in accordance with the requirements of
the ASME Code Section 1.
HP, IP and LP steam drums will be provided with removable primary and/or
secondary steam separators to provide suitable steam purity.
An isokinetic sample point will be provided in the steam line from the
drums. The upper steam drums will be provided with internal distribution
piping for feedwater, blowdown, and chemical feed.
The upper steam drums will be provided with the following minimum
connections:
o Level control device
o Safety valves
o Feedwater inlet
o One water level gauge complete with drain valve and three level
transmitters (The water gage and each transmitter are individually
isolatable.)
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o Vents
o Blowdown connections
o Steam outlet
o Pressure gauge
o Chemical feed
o Nitrogen filling connection
o Connections as necessary for the CT Rotor Cooling Air System and
Fuel Gas Preheating System
The steam, water and mud drums will have manholes at each end.
The lower drums (if furnished) will have provisions for intermittent
blowdown and drains.
The design of drum internals will provide uniform distribution of
chemicals and uniform removal of blowdown water, and will prevent the
under flow of steam which would otherwise interfere with boiler
circulation.
1.3.4 Headers
Vent and drain valves will be external to the casing.
Shop welded tube and pipe connection stubs will be installed prior to
stress relieving of any header.
The arrangement will provide for complete drainage of each header either
to a lower point in the unit or by means of tandem drain valves.
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1.3.5 Tubes and Tube Banks
1.3.5.1 General
The HP superheater, reheater and fin tube material will be suitable for
the maximum intended service temperatures anticipated.
All tube bundles will be suitably supported to maintain uniform gas flow
and minimize flow induced vibration and will be free to expand thermally,
and will be drainable to the headers.
All seam welded tubes must either be hydrotested or electric
non-destructive tested in accordance with ASME Boiler Code Section 1.
1.3.5.2 Economizers
The economizers will not be of a steaming economizer design.
1.3.5.3 Superheaters
The superheaters will be constructed and located to provide uniform
distribution of steam through all tube elements under operating
conditions.
The superheaters will be supported to maintain alignment and tube spacing
to provide uniform gas flow and minimize flow induced vibration.
The HP superheater and reheater will be seamless tubes made of T-91, T-22
or T-11. Other superheaters will have welded or seamless tubes and will be
completely drainable.
1.3.6 Fittings and Accessories
Double valving will be provided on all pressure instrument connections to
the pressure parts (the second valve may be common to several
instruments).
The HP, IP, and LP superheater outlets will have a check valve and a
separate stop valve included.
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1.3.7 Controls and Instrumentation
1.3.7.1 Steam Temperature Control
HP and reheater steam temperature control will be designed so that the
superheated steam temperature at the HRSG outlet will be maintained within
limits prescribed by the steam turbine manufacturer for any given load in
the temperature control range.
1.3.7.2 Feedwater Control System
Boiler feedwater flow will be controlled by a three element (drum level,
steam flow and feedwater flow) system where the resulting signal throttles
the boiler feed pump flow control valve. Minimum flow recirculation
valves, sized to pass minimum boiler feed pump flow, will be provided for
recirculation of boiler feedwater to the LP drum under low load
conditions.
1.3.7.3 Boiler Blowdown Control
Continuous blowdown will be controlled through the DCS.
1.3.7.4 Instrumentation General
Flow transmitters will be the differential pressure type with a
differential pressure range to match the flow element. Flowmeters in
compressible fluid service will be pressure and temperature compensated
for critical service control loops.
Control valves will have valve trims suitable for the service involved.
Pressure gauges will be the industrial type.
Control valve actuators will be pneumatic spring diaphragm or piston type.
Handwheels will be furnished on those valves that can be manually set
during operation and do not have manual bypasses.
Tubing used for connecting instruments to the process line will be
stainless steel. Instrument tubing fittings will be compression type.
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Instrument installation will be designed for proper sensing of process
variables. Taps on process lines will be located such that sensing lines
do not trap air in liquid service or liquid in gas service. Taps on
process lines will be fitted with a shutoff (root valve). Root valves will
be a main line class valve.
1.3.8 Structure
Support structures, platforms and walkways will comply with OSHA
regulations.
The structures will be designed for seismic, wind, and live and dead loads
to which they may be subjected, including piping.
1.3.9 Insulation
The materials used for insulation will be installed such that no
deformation occurs from the contraction and/or expansion effects due to
repeated thermal cycles.
The insulation for the entire HRSG system i.e., from the gas turbine
exhaust up to the stack, will be internal and will consist of mineral
fiber or fiberglass block insulation, or equal.
The HRSG internal insulation (gas turbine exhaust to the stack) will be
protected by an inner liner. The liner attachment is designed to allow
free expansion of the liner.
Insulation for boiler walls, ductwork, and headers, will be of such
quality and thickness that the temperatures of the finished outside
surface, or outside surface of casings, will not exceed 140 degrees F
(average), where personnel have access, when the surrounding air is at a
temperature of 80 degrees F at zero wind speed.
The insulation will be arranged with expansion joints as required to
minimize cracking or distortion of the insulation due to thermal expansion
of the equipment. Any header or pipe that penetrates the casing will be
sealed to provide gas tightness. Drum head covers will be provided.
All insulation, lagging and covering will be asbestos-free.
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All exposed insulation on piping and headers will be covered with aluminum
sheeting (jacket, lagging) or equal, except insulation blankets can be
used for maintenance accessibility.
1.3.10 Boiler Setting, Casing, and Ductwork
Flue ducts between the turbine and HRSG will be made of steel internally
insulated and lined as specified above and be externally stiffened to
minimize vibration and withstand internal gas pressure and external loads.
The duct outer casing will be gas tight and manufactured from carbon steel
having a minimum thickness of 1/4". Boiler casing and ductwork will be
designed for a minimum 2 inches static pressure margin above the maximum
design conditions.
For gas distribution, the HRSG inlet duct will be designed to reduce the
velocity head and equally distribute the gas over the heating surfaces.
All ducts will be above ground with air space between the ducts and
ground.
The boiler setting or casing will be gas-tight and seal-welded. The outer
casing will be steel plate of 1/4" minimum thickness, with supporting
structures reinforced to minimize buckling and vibration. The exterior
boiler casing is to be sandblasted and painted.
Personnel inspection doors will be provided to give entrance to the
boiler.
Expansion joints will be provided in ducts by their design and
arrangement. Expansion joint flanges and bolts will be carbon steel and
will be outside the gas path. Design of the exhaust expansion joint and
ductwork will be coordinated with the gas turbine so as to minimize forces
and moments on the turbine outlet flange.
Provision will be made upstream of the superheater section for the purpose
of conducting measurements in the gas side.
All access doors will be designed to prevent gas leakage. Access openings
will be a minimum of 16" x 20".
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1.3.11 Stack
Common stack height will be 175 feet. Stack will be in accordance with
ASME/ANSI standards and will be made from carbon steel. Location of test
ports and sampling platform will meet USEPA siting criteria of 40 CFR 60.
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HRSG Technical Requirement
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HRSG Technical Requirements
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1.0 Codes and Standards
The HRSG should be in accordance with the following codes and standards.
1.1 American Society of Mechanical Engineers International (ASME)
ASME Section I - "Power Boilers,
ASME Section II - "Material Specifications.
ASME Section IX - "Welding and Brazing Qualifications.
ASME/ANSI STS-1 "Steel Stacks.
ASME Section VIII, Div. 1 - Boiler & Pressure Vessel
1.2 American National Standards Institute (ANSI)
ANSI B16.5, "Steel Pipe Flanges and Flanged Fittings.
ANSI B16.11 for Threaded and Socket Welded Fittings.
ANSI B16.9, for Butt Welding Fittings
ANSI B16.25, "Butt Welding Ends.
ANSI B31.1, "Power Piping.
ANSI STS - 1, Steel Stacks.
1.3 Federal Occupation Safety and Health Act (OSHA)
OSHA 2206, "OSHA Safety and Health Standards (29 CFR 1910)- latest
edition
1.4 American Boiler Manufacturers Association (ABMA)
"Boiler Water Limits and Steam Purity Recommendations for Watertube
Boilers."
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1.5 American Society for Testing And Materials (ASTM)
All materials not required to be covered by the ASME code shall
conform to the latest edition of the applicable ASTM Standard. Other
materials may be used provided that they are of a "recognizable
quality" as determined by Westinghouse. Materials conforming to
Foreign Standards (BS, DIN, JIS, etc.) may be used provided that
"Material Equivalency" is proven by the manufacturer to the
satisfaction of Westinghouse.
The Manufacturer shall design sampling ports for the HRSG in
accordance with the following standards.
ASTM D 1066. Standard Practice for Sampling Steam
ASTM D1192 Standard Specification for Equipment for Sampling Water
and Steam
ASTM D3370, Standard Practice for Sampling Water
1.6 American Welding Society (AWS)
AWS D1.1, "Structural Welding Code."
AWS D9.1, "Sheet Metal Welding Code"
AWS D1.3, "Sheet Steel Structural Welding Code"
1.7 American Institute of Steel Construction (AISC)
"Specification for Design, Fabrication and Erection of Structural
Steel for Buildings."
1.9 Electrical Codes
Electrical equipment supplied shall comply with latest applicable
codes and standards of the Institute of Electrical and Electronic
Engineer's (IEEE), the National Electrical Code (NEC), National
Electrical Manufacturers Association (NEMA), and the Instrument
Society of America (ISA).
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Requirements for electrical equipment certification shall be
in accordance with local building codes.
1.10 Structural Steel Painting Council (SSPC)
2.0 Not Used
3.0 General Design Requirements
Codes
The Manufacturer shall be responsible for final "S" stamping of the
HRSG per ASME Section I or other equivalent foreign code only if
accepted by Westinghouse.
3.1 Exhaust Stack
3.1.1 Stack Construction
3.1.1.1 Stack internal corrosion allowance shall be
0.062" minimum. Stack external corrosion allowance shall
be 0".
3.1.1.2 Each flue shall incorporate provisions
(penetration and connection) for four exhaust gas
temperature thermocouples.
4.0 HRSG MECHANICAL FEATURES
4.1 Structural Features
4.1.1 The structures shall be designed to withstand windload
stated in the Civil Engineering Section of the Appendix
and any special forces peculiar to the HRSG installation,
such as, but not limited to forces resulting from expansion
and / or contraction of ducts, piping, structural steel
etc.
4.1.2 All sliding supports on the HRSG shall be designed to
minimize possibility for restraining movement.
4.1.3 The HRSG shall be self supporting.
4.1.4 Structural steel ,shall comply with ASTM A-36 and the AISC
code manual of steel construction.
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4.1.5 Shop connections shall be welded to develop the full strength
of the member.
4.1.6 Structural stiffeners, etc., shall be arranged so there are no
blind spots left uncovered by standard coating practices.
4.2 Surface Preparation
4.2.1 Manufacturer's standard practice for surface preparation of
interior and exterior surfaces shall be used. The interior of
piping and pressure vessels shall be free from dirt and
debris. Exterior surfaces shall be coated in accordance with
the Manufacturer's standard practice.
4.3 HRSG Inlet Duct and Heat Transfer Section Casing Design
4.3.1 Outer Casing
4.3.1.1 The outer casing shall be gas tight and shall be "cold
wall" design.
4.3.1.2 The internal design pressure of each section shall be
25" of water.
4.3.2 Insulation
4.3.2.1 Sufficient insulation shall be installed so that at
design conditions the outer casing cold face temperature does
not exceed an average temperature of 140 degrees F with an 80
degrees F ambient temperature and still air. Local hot spots
near penetrations are acceptable. All outside surface areas
accessible to personnel that may exceed 140 degrees F shall be
provided with personnel protection
4.3.2.2 The HRSG insulation shall be asbestos-free.
4.3.3 Access Doors
4.3.3.1 Access openings and access lanes shall be provided in
the casing for access up stream and down stream of each heat
transfer module.
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5.0 HRSG Auxiliaries
5.1 Piping
5.1.1 Drain Valves shall have bolted or welded bonnets.
5.1.2 Relief Valve Piping shall be routed to extend ten feet above
nearest platform.
5.1.3 Vent piping, all miscellaneous high point vents and valves
shall be routed to the nearest platform with outlet pipe
terminating 6 feet above platform hand rail.
5.1.4 Pipe Supports will be attached to the HRSG steel.
5.1.5 All piping joints shall be welded type.
5.2 Instrumentation and Valve Requirements
5.2.1 All instrumentation shall be supplied for mounting outdoors.
5.2.2 Drum level transmitter connections with root valves shall be
supplied.
5.2.3 Drum level gauges shall be mounted on a water column (2.5"
DIA. minimum) and include all requisite gauge cocks, drain
valves, and inspection openings. Drum level gauges shall
provide level indication between low level trip and high level
trip.
5.2.4 All thermocouple applications shall be dual element, Type K
thermocouples, spring loaded, and mounted in stepped or
tapered quick response type wells.
5.2.5 Pressure and differential pressure type transmitters shall be
Rosemount Model 1151 (or equivalent model) with smart
electronics option. The transmitters shall be configured or
calibrated remotely by use of hand-held interface unit.
5.2.6 The temperature element downstream of desuperheaters shall be
mounted in a temperature well of taper or stepped design.
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5.2.7 Pressure gauges shall be bourdon tube type and shall have
4 1/2 inch minimum diameter dials unless otherwise noted.
Snubbers shall be provided on each pressure instrument subject
to pressure fluctuation, oscillation, or vibration.
5.2.8 Bimetallic thermometers shall be direct reading every angle
type with a 4 1/2 inch minimum diameter dial.
5.2.9 Pigtails, coils, or gauge siphons shall be provided for all
pressure and differential pressure instruments connected to
steam service greater than 200 degrees F where the tubing run
does not provide a water seal for the instrument.
5.2.10 All instrumentation shall be in English units.
5.3 Valves
Valves shall be readily accessible from grade, platform, fixed
walkway, or fixed ladder to the maximum extent possible. Sufficient
clearance shall be allowed around the valve to accommodate removal
of the actuator/plug and stem assembly for maintenance.
5.3.1 All solenoid valves shall be rigidly mounted on pneumatic
actuated valves. It shall have a watertight solenoid enclosure
and shall be rated at 105 to 140 VDC. Its operation shall
support the failure action of the valve on loss of either
power or air. The internal orifice shall be the maximum size
available for the particular solenoid ordered so as not to
impede the normal operation of the valve.
5.3.2 Safety Relief Valves
All code required safety relief valves are to be equipped with
weather protecting hoods, gags and drip pans (drip pans not
required if valves are equipped with silencers).
5.4 Stairs, Ladders and Platforms
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Adequate stairs, ladders and platforms for access and
servicing of HRSG equipment including safety valves, manual
valves, and instrumentation shall be furnished.
5.4.1 A stairway shall be provided from grade to drum level on
one side of the HRSG and a ladder provided on the other
side to grade.
5.4.2 Personnel protection shall be provided at areas where
the surface temperature may exceed an average
temperature of 140 degrees F. Protection shall be
provided up to eight (8) feet above grade or platform
walkway
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Steam Turbine Major
Equipment Summary
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Steam Turbine Major Equipment Summary
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INTRODUCTION
The Steam Turbine consists of the following major components:
o Primary Turbine Inlet Features
o Combined High Pressure / Intermediate Pressure Turbine
o Double Flow Low Pressure Turbine
PRIMARY TURBINE INLET FEATURES
There are two primary steam supply sources to the turbine--Main Steam and Reheat
Steam. The steam flow to the turbine is controlled by the Main Steam Inlet
Valves and Reheat Steam Inlet Valves.
Main Steam Inlet Description
The steam chest consists of these major components:
o One throttle valve
o One set of proximity switches per throttle valve
o One hydraulic actuator per throttle valve
o Three governor valves
o One set of proximity switches per governor valve
o One hydraulic actuator per governor valve
Reheat Steam Inlet Description
The reheat inlet assembly consists of these major components:
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o One reheat stop valve
o One set of proximity switches for the reheat stop valve
o One hydraulic actuator for the reheat stop valve
o Two Interceptor valves
o One set of proximity switches for each interceptor valve
o One hydraulic actuator for each interceptor valve
COMBINED HIGH PRESSURE / INTERMEDIATE PRESSURE TURBINE
The High Pressure / Intermediate Pressure (HP/IP) Turbine receives steam from
the Main Steam and Reheat Steam Supply and converts it to rotational power to
drive the generator.
The HP/IP turbine consists of these major components:
o HP/IP Outer Cylinder
o HP Inner Cylinder
o Nozzle Chambers
o Nozzle Block
o HP Blade Ring
o IP Blade Rings
o IP and LP Dummy Rings
o Integral HP Dummy Ring
o Inner and Outer Gland Rings
o HP/IP Rotor
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DOUBLE FLOW LOW PRESSURE TURBINE
The Low Pressure (LP) Turbine receives steam from the IP Exhaust via the
Crossover Piping and converts it to rotational power to drive the generator. The
LP turbine is a double flow arrangement.
The double flow low pressure turbine consists of these major components:
o LP Outer Cylinder
o LP Inner Cylinder
o Blade Rings
o Exhaust Flow Guides
o Steam Glands
o LP Rotor
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Primary Turbine Inlet
Features
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Primary Turbine Inlet Features
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PURPOSE
Turbine Generator Speed and Load is controlled by the amount of steam which
flows through the turbine. An increase in steam flow will allow a corresponding
increase in speed (during startup) or load (during normal operation). A decrease
in steam flow will conversely result in a decrease in speed or load. During a
trip condition, steam is prevented from entering the turbine-generator, thereby
allowing it to coast down to a stop. There are two primary steam supply sources
to the turbine--Main Steam and Reheat Steam. The steam flow to the turbine is
controlled by the Main Steam and Reheat Steam Inlet Valves.
MAIN STEAM INLET DESCRIPTION
Main Steam Supply is carried to the turbine through the customer supplied Main
Steam Piping. The Main Steam Piping is connected to the Steam Chest. This
assembly is located on the left side of the High Pressure section of the
turbine. The Steam Chest houses one Throttle Valve and three Governor Valves.
Steam passes through the throttle and governor valves to the main steam inlet
piping connected to the high pressure section of the HP/IP Turbine. The Steam
Chest is located above the operating floor in order to provide accessibility for
maintenance. The steam chest is shipped fully assembled.
The steam chest consists of these major components:
o One throttle valve
o One set of proximity switches per throttle valve
o One hydraulic actuator per throttle valve
o Three governor valves
o One set of proximity switches per governor valve
o One hydraulic actuator per governor valve
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Two thermocouples allow the turbine operator to accurately monitor steam chest
metal temperatures. The steam chest deep thermocouple indicates the temperature
of the metal near the inner surface of the steam chest. The steam chest shallow
thermocouple indicates the metal temperature at the mid wall of the steam chest.
Throttle Valves
One horizontally mounted throttle valve assembly is bolted to the governor end
of the steam chest body. The throttle valve provides pre-synchronization speed
control. It has an individual hydraulic actuator which opens the valve with
increasing hydraulic pressure. Compressed spring force closes the valve upon
loss of hydraulic pressure. The Throttle Valve is a double plug-type valve,
consisting of two single-seated valves, one placed within the other. The inner
valve is an internal bypass valve called a pilot valve, which is used to relieve
the large differential pressure across the valve when it is closed prior to
turbine start-up.
During start-up, the governor valves are set full open, and turbine speed is
controlled entirely by positioning the throttle valve. As turbine speed
increases toward synchronous speed, turbine control is transferred from the
throttle valve to the governor control valves. The control valves will adjust to
control turbine speed to the setpoint, while the throttle valve moves to the
wide open position.
The throttle valve acts as a redundant stop valve during turbine trip
conditions. Provisions are made for both a temporary and a permanent steam
strainer to reduce the level of solid carryover into the turbine. The throttle
valve has a separate seat inserted into a machined recess in the steam chest
body. A steam thermocouple determines the steam temperature at the throttle
valve.
Governor Valves
The governor valve bonnets are mounted vertically to the top of the steam chest
body. The governor valves are single-seated, plug-type valves. Each valve is
made in two pieces to provide a flexible connection to the valve stem. The seats
for these valves are machined directly into the bottom of the steam chest body.
The governor valves adjust steam flow to
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control speed for synchronization and to control turbine generator load. Each
valve has an individual hydraulic actuator. Hydraulic pressure opens the control
valve against a spring force; compressed spring force closes the valve upon loss
of hydraulic pressure. The individual actuators permit full stroke valve testing
while the unit is running at a partial load condition. The control valves will
close in unison with the throttle valve during a turbine trip condition; thereby
providing a redundant means of stopping steam flow to the turbine.
The throttle and control valves, in conjunction with the control system and
protective trip system, provide turbine-generator overspeed protection through
rapid valve closing.
Main Steam Inlet Piping
The main steam inlet piping is located on the left side of the HP turbine. The
main steam inlet pipes carry high-temperature steam from the steam chest to the
HP turbine. The pipes expand as they heat up; therefore, the piping is designed
to be flexible enough to absorb the thermal expansion and thereby reducing the
stresses on the turbine cylinder casing and steam chest. This valve and piping
arrangement helps minimize thermal stress during turbine startup, load changing,
and during normal operation.
The flexible main steam inlet piping is welded to the outlets in the bottom of
the steam chest body. The other ends of the pipes are welded to the steam inlets
of the turbine cylinder. Two of the main steam inlets weld to the cover half and
one welds to the base half. The upper sections of the piping contain a flange
that allows maintenance personnel to separate the piping to remove the cylinder
cover. Each flange consists of a male-female flange coupled with bolts. It
contains a spiral wound gasket for steam sealing of the flange. The lower
sections of the piping contain drain connections to remove condensation.
REHEAT STEAM INLET DESCRIPTION
The exhaust from the HP turbine section is returned to the Heat Recovery Steam
Generator (HRSG) through the Cold Reheat Piping. The steam is reheated and
returned to the HP/IP turbine through the Reheat Steam Piping. The Reheat Steam
Piping is connected to the Reheat Inlet Assembly. The Reheat Inlet Assembly is
on the right side of the Intermediate
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Pressure section of the turbine. The assembly houses one Reheat Stop Valve and
two Interceptor Valves. Steam from the reheater passes through the reheat stop
and interceptor valves to the reheat inlet piping connected to the intermediate
pressure section of the HP/IP turbine. The reheat inlet assembly is located
above the operating floor in order to provide accessibility for maintenance. The
assembly is shipped fully assembled.
The reheat inlet assembly consists of these major components:
o One reheat stop valve
o One set of proximity switches for the reheat stop valve
o One hydraulic actuator for the reheat stop valve
o Two Interceptor valves
o One set of proximity switches for each interceptor valve
o One hydraulic actuator for each interceptor valve.
Reheat Stop and Interceptor Valves
The function of the reheat stop and interceptor valve is to admit or shut off
steam to the IP turbine. The reheat stop valve has a clapper type closure; the
interceptor valve is a single-seated, plug-type valve. Each valve has an
individual hydraulic actuator which opens the valve with increasing hydraulic
pressure. Compressed spring force closes the valve upon loss of hydraulic
pressure. The interceptor valve actuators permit full stroke valve testing while
the unit is running at a partial load condition. The reheat stop valve actuator
permits partial valve testing while the unit is running at a partial load
condition. The interceptor valves provide a way to shut off the steam supply to
the IP and the LP turbine sections. This steam must be shut off when load on the
generator is lost because the large amount of steam contained in the reheat
section of the boiler could cause a serious overspeed condition if it were
allowed to pass through the turbine. This may occur even if the governor valves
are closed, shutting off steam to the HP turbine. The reheat stop valve provides
backup protection for the turbine generator if the interceptor valves do not
close during an emergency trip.
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Reheat Steam Inlet Piping
The reheat steam inlet piping is located on the right side of the IP turbine
section. This piping consists of one flexible pipe section for each interceptor
valve. The reheat steam inlet pipes carry high-temperature steam from the reheat
inlet assemblies to the IP turbine. The pipes expand as they heat up; therefore,
the piping is designed to be flexible enough to absorb the thermal expansion and
thereby reducing the stresses at the connections. This valve and piping
arrangement helps minimize thermal stress during turbine start-up, load changing
and during normal operation.
The flexible reheat steam inlet piping is welded to the outlet in the bottom of
each interceptor valve body. The other end of the reheat steam inlet piping is
welded to the steam inlets of the IP turbine cylinder base. Each lower section
of piping contains a drain connection to remove condensation.
Steam Valve Actuators
The Electro-Hydraulic (EH) Fluid System provides high pressure fluid as a motive
force to the actuators in response to electrical signals from the Digital
Electro-Hydraulic (DEH) Controller. The throttle, governor, and interceptor
valve actuators position these valves in an open, closed, or some intermediate
position to regulate steam flow to the turbine. The operating position of the
reheat stop valve is fully open; however, the valve is supplied with a servo
actuator allowing partial stroke testing.
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Combined High Pressure /
Intermediate Pressure Turbine
-----------------------------
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Combined High Pressure / Intermediate Pressure
Turbine
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PURPOSE
The High Pressure / Intermediate Pressure (HP/IP) Turbine receives steam from
the Main Steam and Reheat Steam Supply, and converts it to rotational power to
drive the generator. The HP/IP turbine is based on several years of Westinghouse
experience with combined turbine designs. It incorporates the latest
Westinghouse technology improvements.
[Drawing -- HP/IP Turbine - For Reference Only]
This turbine is capable of running under a wide range of conditions. The unit
can operate efficiently in sequential, single, or hybrid valve modes of
operation. The turbine is capable of either two-shift, load follow or any
combination of these operating parameters.
The HP/IP turbine consists of these major components which are detailed in the
following text:
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o HP/IP Outer Cylinder
o HP Inner Cylinder
o Nozzle Chambers
o Nozzle Block
o HP Blade Ring
o IP Blade Rings
o IP and LP Dummy Rings
o Integral HP Dummy Ring
o Inner and Outer Gland Rings
o HP/IP Rotor
STATIONARY COMPONENT DESCRIPTION
HP/IP Outer Cylinder
The HP/IP outer cylinder comprises two sections, the cover and the base, which
are joined at the horizontal centerline. The outer cylinder cover can be removed
for access to internal parts. The horizontal joint is a precision-machined
surface on both the cover and base. The surfaces are bolted together without a
gasket to form a metal-to-metal steam-tight joint.
The outer cylinder is suspended on two support paws at each end which are
integral to the cylinder base. The support paws rest on pedestals that transfer
the entire weight of the HP/IP Stationary parts to the building foundation.
Large studs through the support paws keep the turbine from lifting off the
pedestals while permitting axial and transverse movement caused by thermal
expansion.
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The outer cylinder provides structural support for the HP and IP internal
stationary components, this includes the HP inner cylinder, blade rings, dummy
rings and gland rings. It also acts as a pressure vessel, subjected to a wide
range of temperatures and pressures. The internal components are mounted in the
outer cylinder in a manner which allows them to expand and contract both axially
and radially.
The outer cylinder base is larger than the cover. It has welded connections for
the lower main steam and reheat steam inlet pipes and the HP exhaust to the Cold
Reheat pipe. Drain connections are also provided to remove condensate from low
points in the cylinder. The outer cylinder cover has welded connections for the
upper main steam pipes. It has a bolted connection for the IP exhaust to the
Crossover Pipe.
HP Inner Cylinder
The HP inner cylinder functions as an internal pressure vessel within the
turbine. The cylinder provides structural centerline support for the inlet
nozzle chamber and HP blade ring. The HP inner cylinder confines the high
pressure and temperature area of the blade path allowing the outer cylinder to
be designed for lower temperatures and pressures thereby reducing the size and
weight of the outer cylinder.
The HP inner cylinder is composed of a base and cover joined by bolting at the
horizontal centerline. The cover and base have precision-machined surfaces that
form metal-to-metal steam tight joints when assembled. Sophisticated analyses
for reduced thermal gradients, along with high strength bolting materials, has
provided a leak-proof joint for the high pressures and temperatures experienced
by the inner cylinder.
The HP inner cylinder is supported in the outer cylinder through the use of keys
and liners, tongue and groove fits, and dowel pins. This support system keeps
the inner cylinder aligned with the outer cylinder and rotor while allowing for
differential thermal expansion between the various components.
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Main Steam Inlet Sleeves
The inlet sleeves are designed to reduce steam velocity in the HP inlet system
by as much as 40%. The velocity reduction has two primary benefits: much lower
flow losses in the inlet system and significantly reduced potential for
vibration excitation. Both benefits were gained by making the inlet sleeves
shorter and stiffer with increased flow area. The sleeves have also been
designed to seal with the nozzle chamber using pressure seal rings. This
simplified design not only permits more efficient sealing, the pressure seal
rings also effectively dampen any cantilever effect that could create vibration.
Inlet Pressure Seal Rings
Westinghouse has used inlet pressure seal rings in super critical IP turbines
and other HP turbine designs for over twenty years. The rings are arranged so
that they seal between the outer surfaces of the inlet sleeve and the nozzle
chamber. They offer improved damping ability and provide an effective seal
between the inlet sleeve and nozzle chamber inlet bore.
Nozzle Chambers
Traditionally, nozzle chambers have consisted of multiple partial arc segments
which were welded into proper position. Westinghouse has replaced that design
with two 180 degrees subassemblies which offer greater reliability, improved
efficiency and simpler maintenance.
The improved 'ring type' nozzle chamber consists of two 180 degrees chambers
supported near the horizontal centerline of the inner cylinder with tongue and
groove fits, liners, and lugs. This allows the nozzle chambers to expand
radially and axially without being constrained. The improved radial expansion
also allows the nozzle chambers to more closely match control stage movement
during load transients, thereby increasing control stage efficiency. The keys
and pins that support the ring also provide significant friction damping which
reduces susceptibility to flow induced vibration.
Spring back seals between the nozzle chamber and the rotor minimize interstage
leakage. The inlet temperature to the HP reaction blade path is increased,
improving HP turbine efficiency.
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The superior alignment helps maintain correct seal clearance during thermal
transients and significantly reduces potential seal damage.
The shape of the nozzle chamber is designed to simplify internal flow and reduce
distribution losses. Once the steam leaves the control stage it flows directly
into the reaction blading, eliminating "turn around" pressure losses. The
stiffer design results in lower vibration levels.
Routine maintenance of the 180 degrees ring type nozzle chamber has been
simplified. The two halves of the nozzle chamber ring are completely removable,
allowing easier access for inspection, and permitting either floor or bench
maintenance to be performed.
[Drawing -- Nozzle Chamber - For Reference Only]
Removable "Contoured End Wall" Nozzle Blocks
The nozzle block sections are made from one piece forgings and use Electro
Discharge Machining (EDM) to create the nozzle vanes with a contoured end wall.
The contoured end wall minimizes secondary flow (steam swirl). Reducing the
secondary flow and turning the flow before it is accelerated greatly reduces the
nozzle block erosion caused by exfoliation from the boiler. The nozzle block
is bolted to the nozzle chamber for periodic maintenance.
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[Drawing -- Nozzle Chamber & Nozzle Block -- For Reference Only]
Blade Rings
The HP/IP turbine has three blade rings to support the stationary blading in the
turbine blade path. The three blade rings are different in size and shape but
similar in construction and function.
The outer grooves on the blade rings are precision-machined to match the tongues
on the cylinders and form steam tight joints when assembled. The
tongue-and-groove fits hold the blade rings in position while allowing thermal
expansion in a radial direction.
HP Blade Ring
The HP Blade Ring holds the High Pressure Stationary Blade Diaphragms.
Stationary blade path seals are also installed in the Blade Ring assembly. The
Blade Ring is supported and positioned by both the Inner and the Outer Cylinder.
IP Blade Rings
Two IP Blade Rings are provided to house the IP Stationary Blade Diaphragms,
along with the stationary blade path seals. Both IP Blade Rings are supported at
the horizontal centerline
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by support keys. Dowel pins are used to position the blade rings at the top and
bottom of the inner cylinder.
Dummy Rings
The HP/IP turbine has three dummy rings that are different in size and shape but
similar in function. The dummy rings separate various pressure zones and act as
flow guides to direct steam flow within the high pressure and intermediate
pressure areas.
The LP dummy ring is supported in the outer cylinder at the governor end of the
turbine; it directs exhaust steam from the HP blade path toward the HP exhaust
(cold reheat outlet) in the outer cylinder base. The HP dummy ring is
incorporated in the HP inner cylinder; it seals the area between the HP and IP
inlet. The IP dummy ring is supported in the outer cylinder; it directs steam
from the hot reheat inlet to the IP blade path.
Glands
The HP/IP turbine has inner and outer glands at both the governor end and
generator end of the outer cylinder. The glands confine the steam in the turbine
and prevent steam leakage to the atmosphere and air leakage into the turbine.
Thermocouples
Turbine temperatures are measured by thermocouples. The thermocouples are
installed in special protecting tubes that penetrate the cylinder wall and are
welded to the cylinder. The HP/IP cylinder is manufactured with thermocouple
wells installed at standard locations on the turbine based on turbine
temperature monitoring needs.
Crossover Piping
The crossover piping transmits steam from the IP exhaust opening to the LP
turbine inlet. The crossover piping is bolted to the cylinders for easy removal
during maintenance. Each mitered corner of the crossover piping has multiple
guide vanes which help smooth the steam flow as it changes direction thereby
minimizing pressure loss. The crossover pipe has three
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hinged-type diaphragm plate expansion joints which absorb the axial thermal
expansion of the pipe.
ROTATING COMPONENT DESCRIPTION
HP/IP Rotor
The turbine rotor extends through each end of the outer cylinder housing. The
rotor is supported by two journal bearings: one in the governor pedestal, the
other in the LP turbine bearing housing.
Forging Technology
The HP/IP Rotor is forged from CrMoV alloy steel which is used for its good high
temperature properties. Of the approximately 15,000 large steam turbine rotors
in operation in the world today, 80% were made from single piece forgings. The
HP/IP integral rotor configuration is the industry standard. This approach is
superior to "built-up" designs such as the welded disk configurations.
For example, HP rotors manufactured by welding disks together has shown rotor
creep bowing due to non-uniform weld creep properties. This has led to high
dynamic unbalance in service.
Integral rotor forging technology was first developed for 3600 RPM fossil
turbines that were put into use in the early 1950's. In the past forty-five
years, integral rotors have been used whenever quality forgings of sufficient
size and toughness were available.
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[Graph -- Steam Turbine Rotors in Service Worldwide]
The technological advances in the steel making process that make these forgings
possible include:
o an optimum solidification that allows non-metallic inclusions to float to
the top and be removed,
o vacuum carbon deoxidization, and
o ladle refining processes that reduce sulfur content.
A low sulfur level is necessary to attain the required ductility, impact
strength, and FATT properties.
Westinghouse, working with forging suppliers, performed extensive tests on
integral turbine rotor forgings. Metallurgical specimens from rotor forgings
were tested for material properties in radial and axial directions. The tests
included tensile strength, Charpy V-notch impact, FATT properties, and material
composition. The results proved the forgings to be homogeneous, with excellent
metallurgical properties throughout. These modern forgings also reduce the
probability of rotor bowing due to improved material homogeneity especially with
regard to creep properties.
The HP/IP turbine uses a fully integral monoblock rotor, which eliminates the
centerline bore. Elimination of the bore reduces tangential stresses at the
rotor center by a factor of 2 when compared to a bored rotor in the same
application. Rotor life benefits since creep
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strains are drastically reduced as shown by finite element studies. Stress
ranges relevant to low cycle fatigue life are lowered. Rotor maintenance costs
are also reduced because a periodic rotor bore examination is no longer
required.
Rotor Blade Root Design
The rotor uses two proven designs to secure the rotating blades: the "T" root
design is used in the HP section, and the multiple serration side entry root
design is used in the IP section. Both designs have been proven to be highly
reliable for their respective applications.
The "T" blade root used in the HP permits more efficient use of the area on the
rotor which is available for blading. The "T" root has the added advantage of
providing better sealing under high pressure conditions, eliminating efficiency
losses that result from steam leaking through a side entry root.
The multiple serration, side entry root design is utilized for the IP blade
path. Side entry roots are necessary to accommodate the larger geometry of the
IP blading. The design allows the steeples to be located above the bulk of the
rotor body; this reduces thermal transient stresses. Stress concentrations at
the base of the steeples have also been minimized by using an optimum contour
that was developed through finite element analysis.
Rotor Balance Provisions
The rotor has provisions for balance holes at five locations: two locations for
field balance, two locations for factory balance and one location for both
factory and field balance. Each field balance location has equally spaced holes
for balance plugs. Before shipping, the rotor is balanced in the factory at
operating speed; therefore, the rotor should need only a minimum touch-up
balance at initial installation.
Rotor Thrust Balance
All pressure forces that could cause a turbine component to move in the axial
direction are called thrust forces. Thrust forces are produced by the pressure
drops as the steam moves through the blade path. These axial pressure drops
exert thrust forces on the rotating parts.
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The HP/IP turbine is an asymmetrical, opposed flow element. Steam passes first
over one set of blades, then another in series. This causes thrust forces in
opposite directions in the HP and IP sections of the rotor. The two opposing
forces acting on the rotor cancel each other if the two are equal. If one force
is greater, the difference between the two is the resultant thrust force on the
rotor. Several features are included in the turbine design to help balance and
control the opposing thrust forces as closely as possible:
o Rotor thrust balance pistons
o Pressure equalizing flow passages
o Thrust bearing
The first two features are designed to balance the rotor thrust. The thrust
bearing is used to control the thrust which occurs during transients and partial
loading.
Rotor Thrust Balance Pistons
The two major sources of thrust forces on the rotor are the HP blading area and
the IP blading area. To balance these different thrust forces, the rotor body is
designed with certain opposing areas of known cross section exposed to known
pressures. These areas provide a predictable force to resist, or help balance,
the thrust in the blade path. Such an area generally can be thought of as a
'balance piston'. The HP/IP rotor has three balance pistons that are integral
parts of the rotor. The diameter of each of the three balance pistons is sized
so that most of the axial thrust is balanced out.
The rotor balance pistons are subjected to the same pressure differentials as
the sections they balance. The HP and IP blade paths are independently balanced
by their own dummy rings (thrust pistons) opposing the blade path. The HP
blading thrust is balanced out by the HP balance piston. The IP blading thrust
is balanced out by the IP and LP balance pistons.
Pressure Equalizing Flow Passages
To provide the correct balancing forces, balancing areas must be subjected to
the same pressure differentials as the sections they balance. Three pressure
equalizing passages allow
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this to occur in the turbine. One pressure equalizing passage is actually the HP
impulse chamber. Here, the control-stage exit pressure becomes the inlet
pressure for the HP blade path and the opposing HP balance piston. The second
pressure equalizing passage consists of the space between the inner and outer
cylinders. This space connects the HP exhaust to the low pressure side of the HP
dummy ring. The third pressure equalizing passage is an equilibrium pipe on the
outer cylinder that connects the IP exhaust to the downstream side of the LP
dummy.
BLADE PATH DESCRIPTION
Optimized HP & IP Blade Path
The HP and IP blade paths are designed for each application to provide the most
efficient design for the available space that meets the mechanical requirements.
Many recent advances in blade path design have been incorporated:
o Overall blade path thermodynamic optimization
o Enhanced airfoil design
o Improved aerodynamic analysis
o Enhanced sealing
o Reduced windage losses.
HP Blade Path
The Control Stage utilizes a side entry root design. The high pressure rotating
blade rows utilize "T" root blades with grouped shrouds. The Westinghouse "T"
root blade designs have an excellent history of mechanical reliability because
of their light mass, thin shroud and the reduced tip velocity due to the short
blade length. "T" root blades also have fewer steam leakage paths which improves
the thermal efficiency of the HP blade path.
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IP Blade Path
The intermediate pressure rotating blade rows utilize serrated, side entry root
blades with integral shrouds. All tenons are eliminated from the IP blade path.
Each integral shroud IP rotating blade is machined from a single piece of metal.
The elimination of separate shrouds significantly reduces vibratory stress, high
cycle fatigue, and the stress concentrations associated with riveted tenons. The
centrifugal loads created by the massive shroud are now distributed along the
entire cross section of the IP blade. The potential for creep in the integral
shroud blades is significantly less because the maximum steady stress at the
intersection of the shroud and the airfoil is reduced by 67% compared to a
riveted IP blade design. The improved IP blade design also promotes contact
between the shrouds of adjacent blades, thus alleviating vibratory deflection.
In addition, there are no concealed surfaces, thus allowing the blades to be
more thoroughly inspected with greater ease. All blades are designed so that the
first mode frequency is above the sixth harmonic.
Stationary Blades
The stationary blades feature a twisted blade design. This design offers
substantial efficiency gains over previous configurations because the air foil
orientation is optimized over the entire height of the blade rather than only at
the mean diameter. The use of twisted stationary blades allows the use of
parallel sided rotating blades with minimum steam incidence angles.
These twisted blades are also stronger than previous designs. By varying the
gauging of the stationary blade, the stage reactions are more uniform from the
base to the tip. Additionally, the increased reaction at the base, in
conjunction with the reduced reaction at the blade tip, reduces secondary flow
losses associated with the rotating blades and the leakage losses associated
with the stationary blades.
Blade Path Sealing
Caulked in seals are provided over the HP rotating and stationary blade path;
this allows the axial spacing between stages to be minimized. This reduced
spacing increases the blade path efficiencies by optimizing for the HP steam
conditions; as well as allowing more stages in the HP turbine for the same
available axial length.
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The IP blade path uses spring back seals for both the rotating and stationary
blades. These seals are comprised of several independent curved segments, each
containing multiple seal strips. Spring force holds the seal segments close to
the rotating surface to minimize the steam leakage. In the event of abnormal
operating conditions, the seals can be pushed back by the rotor to prevent
damage to the seal strips.
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Double Flow Low Pressure
Turbine
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========================
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Double Flow Low Pressure Turbine
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PURPOSE
The Low Pressure (LP) Turbine receives steam from the IP Exhaust via the
Crossover Piping and converts it to rotational power to drive the generator. The
LP turbine is a double flow arrangement. Steam enters the turbine at the LP
Inlet, which is located in the middle of the turbine, and expands in each axial
direction through similar (mirror image) LP Blade Paths. Condensation begins in
the last stages of the blade path and the wet steam exhausts to the Main
Condenser.
[Drawing -- LP Turbine - For Reference Only]
The LP turbine consists of these major components which are detailed in the
following text:
o LP Outer Cylinder
o LP Inner Cylinder
o Blade Rings
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o Exhaust Flow Guides
o Steam Glands
o LP Rotor
STATIONARY COMPONENT DESCRIPTION
LP Outer Cylinder
The LP turbine has an outer cylinder consisting of four major pieces: two cover
sections and two base sections. Separate pieces are required in order to meet
transportation limitations. The cover sections are bolted together at a vertical
joint during initial plant site assembly. The base sections are similarly bolted
at a vertical joint during initial plant site assembly. The vertical joints in
both the cover and base do not need to be unbolted after initial plant site
assembly. The horizontal joint is a precision-machined surface on both the cover
and the base. The surfaces are bolted together without a gasket to form a
metal-to-metal steam tight joint.
The outer cylinder is fabricated out of carbon steel plate. It provides
structural support for the LP rotor and the inner cylinder. The inner cylinder
is mounted inside the outer cylinder in a manner which allows it to expand and
contract both axially and radially without constraint. In normal operation, the
outer cylinder is under condenser vacuum.
The primary function of the outer cylinder is to convey the exhaust flow, at
nearly ideal vacuum conditions, from the last row of rotating blades to the
condenser as efficiently as possible. It is designed to withstand normal and
emergency structural loads without undergoing deflections great enough to
disturb the running clearances.
The outer cylinder base includes a support foot structure to support the entire
LP turbine. The support foot is axially anchored to the foundation. The cylinder
is allowed to expand axially from the anchor point by sliding on seating plates
which are grouted to the foundation. The bottom of the support foot, which rests
on the seating plates, is the turbine baseline; the top of the support foot
structure is the turbine horizontal joint. The base structure below the
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support foot acts as the exhaust opening for the LP turbine. The cylinder base
has a minimum of internal support braces to help limit disturbances in the flow
path and allow smoother flow through the structure.
The governor end of the cylinder base is extended to create a housing for the #2
and #3 journal bearings, and the HP/IP to LP coupling. It also has support pads
for the generator end HP/IP cylinder paws. The generator end of the LP outer
cylinder is extended to create a housing for the #4 journal bearing, the LP to
Generator coupling, and the turning gear. Bearing loads are transmitted to the
turbine support foot by the exhaust cone and support braces. The cone also helps
to direct exhaust steam flow. Customer drain connections are provided below the
bearing housings to carry away any waste fluids which may accumulate.
The outer cylinder cover is smaller than the base and it is symmetrical about
the turbine centerline. The entire cover can be removed for access to internal
components; however, there are four manholes, two on each side, which allow
access for internal inspection without removing the cover.
The turbine is protected from overpressure by breakable diaphragms located on
the top of the outer cylinder covers. These diaphragms are designed to rupture
if the pressure in the outer cylinder reaches .34 to .55 bar (5 to 8 psig). Each
end wall of the LP turbine cover has a cone-shaped section above the area of the
bearing housing. An end plate caps off the small end of the cone and provides
structural support for the cover half of the sealing gland in the area of the
rotor. The cone-shaped sections also function as part of the flow path for the
LP exhaust.
LP Inner Cylinder
The inner cylinder provides the support structure for the blade rings, last
stage segmental assemblies and exhaust flow guides. The inner cylinder consists
of cover and base sections bolted together at the horizontal joint. Because the
LP turbine is a double-flow unit, both ends of the inner cylinder are similar.
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The fabricated carbon steel LP inner cylinder is designed using the latest
technology and design techniques which specifically address the issues of
cycling, moisture and hard particle erosion, and reliability. Finite element
analysis is used as an integral part of the design process. A pictorial example
of inner cylinder modeling follows:
[Drawing -- Inner Cylinder Finite Element Analysis For Reference Only]
Finite element analysis provides design engineers with an accurate calculation
of stresses to quantify the deflections that the inner cylinder experiences
during various transient events. This allows for structural streamlining of the
inner cylinder design which eliminates the negative aspects of differential
thermal expansion. It also allows more accurate prediction of thermal gradients
and their affect on cylinder stresses. The overall benefits of this design
process include improved LP reliability, maintainability, and efficiency.
The inner cylinder is structurally designed to minimize the potential for
cylinder distortion, and joint and bolt distress caused by thermal expansion and
contraction. The fabricated design improves the fatigue life of the inner
cylinder because of the appropriately sized cylinder walls. The fabricated
design also provides the correct amount of flexibility to better accommodate
thermal transients.
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Blade Rings
The LP turbine has two separate blade rings on each end. The blade rings provide
structural support for all rows of stationary blades with the exception of the
last stage segmental assemblies. Support keys and liners allow radial expansion
independent of the inner cylinder. The blade ring designs allow for free
expansion between the cylinder and blade ring in areas of high temperature
gradients which reduces thermal stress and misalignment during operation.
Exhaust Flow Guides
The LP turbine has two exhaust flow guides, one at the governor end of the inner
cylinder and one at the generator end. Each exhaust flow guide is constructed in
two halves. The halves form a complete assembly when bolted to the inner
cylinder structure. The flow guide is designed to utilize the velocity of the
steam leaving the last row blade to experience a pressure recovery. This allows
the steam to expand to a pressure below the condenser pressure and thereby
allows the blading to generate additional work.
Steam Glands
Gland assemblies are provided at each end of the LP turbine where the rotor
penetrates the outer cylinder. The glands are bolted to the outer cylinder and
provide a seal which prevents air from leaking into the turbine. The rotor
glands at the governor and generator end are alike. Each gland assembly consists
of a gland base, gland cover, four seal ring retainers, four seal rings, and the
support keys, screws, and dowels needed to assemble the major parts.
ROTATING COMPONENT DESCRIPTION
Rotor and Steeple Design
The LP turbine rotor has integral discs, integral couplings and does not have a
bore. This results in significantly lower operating stresses which provide
greater resistance to stress corrosion cracking. One-piece ruggedized blades
reduce the vibratory load transfer to rotor steeples and also help eliminate
steeple high cycle fatigue. Side entry blade roots are used for attaching all of
the rotating blading. This maximizes the contact area between the blade root
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and rotor steeple and minimizes stresses in both the rotor steeple and blade
root serration. The larger LP blades have curved roots to accommodate the
curvature of the airfoil. The side entry steeples are located above the bulk of
the rotor body; thereby reducing steeple thermal transient stresses. Rotor
stress concentrations at the steeples have been significantly reduced through an
effective steeple contour developed through finite element analysis.
LP Rotor Forging Manufacture
LP rotor forgings are made of 3.5% NiCrMoV alloy steel having high impact
strength and low FATT values. The forging process encompasses the following
technologies:
o VACUUM CARBON DEOXIDIZATION, which removes objectionable gases; such as
hydrogen, and allows a lower silicon level which contributes to increased
impact strengths and reduced FATT values.
o SULFUR LEVEL REDUCTION, typically through ladle refining.
o IMPROVED INGOT MOLD DESIGN, which reduces the chemical segregation and
minimizes porosity, inclusions and other objectionable conditions in that
portion of the ingot used for the rotor forging.
o MINIMUM ALLOY SEGREGATION and LOW RESIDUAL ELEMENT LEVELS, which are
important to achieve uniform properties throughout the rotor forging.
Westinghouse, in cooperation with forging suppliers, has conducted an
extensive testing program to qualify the new generation of LP turbine
rotor forgings. To verify the forgings are homogeneous and comply with
Westinghouse specifications, the tensile and the impact properties are
tested at several locations on each forging. In addition, each forging is
ultrasonically examined and tested for thermal stability to Westinghouse
requirements.
o IMPROVED K(IC) VALUES as calculated from impact tests for this material
are substantially higher than materials previously used. Because of the
improved material
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properties, fracture mechanics techniques now calculate a larger allowable
critical flaw size.
Rotor Balance Provisions
The rotor has provisions for balance at five locations: two locations for field
balance, two locations for factory balance and a center balance location. Each
field balance location has equally spaced holes for balance plugs. The factory
balance locations allow for material to be removed from the rotor. Before
shipping, the rotor is balanced in the factory at operating speed; therefore,
the rotor should need only a minimum touch-up balance at initial installation.
[Drawing -- RIVETED SHROUD]
BLADE PATH
DESCRIPTION
Integral Shroud
[Drawing -- INTEGRAL SHROUD]
Blades
The first rotating stages of the Ruggedized LP turbine use integral shroud
blades made of 12% Chrome material. In this heavy duty construction, the blade
and shroud segment are integral providing an important increase in
strength/stress ratio and corrosion resistance.
Because the airfoil and shroud are made from a single piece of steel, the whole
airfoil cross-section carries the centrifugal load of the shroud. This design
change, and the use of generous fillet radii, reduce steady stresses. The
maximum steady stress at the intersection of the integral shroud with the
airfoil is reduced dramatically when compared with maximum stress of a riveted
blade tenon. This reduction in steady stress means greater margin in fatigue
strength and extended life in the presence of corrosives.
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Several full scale direct comparison rotating tests have been conducted to
determine improvements in the vibratory stresses of integral shroud blades when
compared with riveted shroud blades. These laboratory tests concluded that the
vibratory stresses in the integral shroud design are lower than those in the
riveted shroud design for the same excitation.
The reduction of vibratory and steady stresses, as well as the elimination of
lashing lugs and separate shroud rivets, lower the operating stresses to a level
equivalent to units with significantly lower end loadings. The result of the
lower operating stress levels is a blading system which will operate with
maximum reliability.
Freestanding Tuned Blades
The last three rows of the Ruggedized LP turbine use shot-peened, profiled tip
freestanding blades made of 17-4 pH stainless steel. This material has superior
fatigue strength and pitting resistance for the steam conditions which are
experienced in the last stages of low pressure turbines. The following chart
demonstrates the superior performance of 17-4 pH material in four different
harsh environments. These blades are of one-piece construction, thus eliminating
any shrouds, rivets or lashing lugs. Also eliminated are the undesirable
corrosive traps in the blade path and the difficult to control fabrication
processes of riveting and lashing lug welding (and associated x-ray
inspection).
[GRAPH -- Corrosion Fatigue Strength of Blade Materials]
Reliability is further enhanced because the resonant frequencies of the L-0,
L-1, and L-2 blade rows are established when the blades are manufactured. Such
blade tuning is necessary as it is impractical to manufacture long LP blades
large enough to withstand resonant stresses at the lowest harmonics of running
speed.
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[Diagram -- Typical Campbell Diagram Strength/Stress Ratios]
The overall strength improvement of the Ruggedized freestanding blades is
combined with significant reductions in vibratory stress amplitude, resulting in
a greater confidence level in Ruggedized freestanding blades over other designs.
The graph is a summary of typical LP blade strength/stress ratio versus the
harmonic (multiples of running speed).
Freestanding blade characteristics have been verified by full scale rotating
tests, field strain gauge telemetry testing, non-contacting blade vibration
monitor testing, large scale laboratory modeling and successful operating
experience at over 60 power stations.
Stationary Blading
Stationary blading upstream of the L-1 stage are of the welded diaphragm type
configuration. Diaphragm blading is inherently easier to install and maintain.
The diaphragm ring assembly is simply slid into the blade ring and locked into
their respective blade rings. Should maintenance be necessary, the diaphragm
assembly can be easily removed and serviced. Stationary rows 5 and 6 are of a
segmental type construction due to their greater size.
Blade Path Sealing
Westinghouse has designed three blade path sealing features to improve long-term
efficiency and minimize leakage losses.
Honeycomb Seals
Honeycomb Seals are installed over all freestanding blades, (except over the
last stage which utilizes an exhaust flow guide). The individual honeycomb cells
collect moisture which is removed by annular grooves in the backing rings. This
type of seal enhances the moisture
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removal capability in the blade path as well as providing a damping mechanism to
prevent steam swirl.
[Drawing -- Typical Honeycomb Seal Arrangement For Reference Only]
Springback Seals
Springback Seals are used in the stages upstream of row L-2. They reduce the
potential for hard seal rubs; therefore, seal clearances are maintained and long
term efficiency is enhanced.
[Drawing -- Gland Case Seals - For Reference Only]
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"Low-Diameter" Spring-Back Seals
"Low-diameter" spring-back seals are used in the L-0 and L-1 stationary
segmentals to provide sealing to the rotor body between the L-0R, L-1R and L-2R
rows. Leakage loss is reduced considerably because sealing between the last
three rotating blade rows takes place at a reduced rotor diameter. In addition,
an extension plate is located by a keying arrangement that keeps the seal
concentric with the shaft. An example diagram of "Low-diameter" seals is shown
in the next figure:
[Drawing -- LOW DIAMETER SEALS]
EROSION RESISTANT DESIGN FEATURES
Operating experience has proven that moisture droplet erosion of LP turbine
blades adversely affects thermal performance and unit availability due to
increased maintenance requirements. While it is recognized that moisture erosion
cannot be avoided, Westinghouse has incorporated design features in the LP blade
path to minimize its effects. Thus, in an effort to increase unit availability
and sustain unit thermal performance, Westinghouse has enhanced the erosion
resistance of the LP turbine by including the following erosion resistant
features:
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o Addition of Moisture Collectors Throughout The Blade Path. This feature
reduces the amount of moisture available for impingement on rotating and
stationary components.
o Protection of L-0R Blades With Stellite Shields. Use of stellite shields
on a blade's leading edge has proven to be a reliable means of reducing
blade erosion and extending blade life.
OPERATIONAL CAPABILITIES
Off Frequency Operation
The primary operating consideration of an LP turbine under load at either
greater or less than normal system frequency is the protection of the tuned
blading so that harmonic resonance does not occur. In the design verification
process, great care is taken to properly tune the tapered and twisted blades
that constitute the last LP stages. The result of improved manufacturing
techniques combined with a more rugged geometry is an improved off frequency
capability.
HIGH BACK PRESSURE OPERATION
Last row blades are subjected to a wide range of operating volumetric flow. At
high condenser backpressure and/or low unit load, volumetric flow greatly
decreases. This results in the last row blade tip section operating at high
incidence angles -- that is, the blade inlet metal angle is smaller than the
flow approach angle to the rotating blades. This places the blade tip region in
a "stall" or "near stall" condition, and the blades may undergo self-excitation
vibrations.
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Westinghouse performed a detailed test in a dynamic blowdown wind tunnel which
was designed to specifically investigate such instabilities at low volumetric
flow. An original design blade which did demonstrate this flutter condition, as
evidenced from the field telemetry testing, was thoroughly tested; verifying
that the blade tip region could experience self-excited vibrations or blade
flutter. Most important, these tests further verified that orientation of the
blade tip is the principal parameter that controls the susceptibility for
flutter; and that minimizing the incidence angle minimizes the likelihood of
flutter and the high stresses associated with it. All Westinghouse last row
blades are designed to allow maximum backpressure operation while minimizing
susceptibility to flutter. As a result of this effort, the LP turbine is capable
of continuous high load operation with a maximum backpressure of 20.3 cm (8.0")
HgA.
BENEFITS
Fully Integral Monoblock LP Rotor
o Eliminates bore inspections and reduces tangential stresses at the rotor
center
o Eliminates shrunk-on blading discs and couplings and reduces overall
operating stresses
o Increases inspection intervals
High Efficiency Integral Shrouded Blades and
High Efficiency L-0, L-1 Blades
o Improve efficiency
o Lower blade excitation
o Provide cyclic duty capability
o Reduce maintenance through elimination of rivets and shroud
o Provide enhanced corrosion resistance
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o Allow operation at up to 8 in. Hg backpressure
o Provide expanded range of off-frequency operation
LP Inner Cylinder and Independent Blade Rings
o Increase resistance to cylinder distortion and reduces stress by
simplifying complex geometries
o Improve component alignment during transient conditions
o Improve moisture removal
o Minimize steam leakage through improved sealing
o Simplify turbine disassembly/reassembly
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Steam Turbine Auxiliaries
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Steam Turbine Auxiliaries
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TURBINE SUPERVISORY INSTRUMENTATION
The Turbine Supervisory Instrumentation (TSI) system is a reliable multichannel
monitoring system that continuously measures the mechanical operating parameters
of the turbine generator shaft and case. The system displays machine status,
provides outputs for recorders, and initiates alarms when preset operating
limits are exceeded. In addition, the system can activate automatic turbine
shutdown operations and provide measurements that can be used for diagnostic
evaluations.
EMERGENCY TRIP SYSTEM
An emergency trip system consisting of local sensors and an interlock relay is
provided. The following functions are provided in the system:
o Overspeed emergency trip.
o Low bearing oil pressure trip.
o Solenoid trip.
o Manual trip.
o Low vacuum trip.
o Thrust bearing wear and rotor movement trip.
ELECTRO-HYDRAULIC FLUID SYSTEM
The electro-hydraulic fluid reservoir with major components is mounted on a
single skid to minimize floor space requirements and allow for easy installation
and maintenance.
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The electro-hydraulic (EH) fluid supply system provides the motive force for
positioning the primary steam inlet valves, which regulate and control the flow
of steam through the turbine. The steam valves are spring loaded to the closed
position and are opened by the EH actuators. Electrical positioning signals for
the valves are received from the Digital Electro-Hydraulic (DEH) Controller and
processed to provide hydraulic pressure to position the valve actuators.
EH SYSTEM COMPONENTS
Motive fluid for the EH control system is provided by a fluid supply system
consisting of an EH fluid supply skid, high and low pressure accumulators, fluid
conditioning system, and interconnecting stainless steel fittings and tubing.
The EH fluid supply skid consists of a reservoir assembly incorporating
redundant AC motor driven variable displacement pumps, duplex pump discharge
filters, a relief valve, a fluid conditioning unit, and coolers. The fluid used
in the EH system is a synthetic base phosphate ester having the lubricity, fluid
stability, and fire retardance of Fyrquel EHC.
EH FLUID RESERVOIR
The EH fluid reservoir provides storage for the hydraulic operating fluid. The
reservoir is a stainless steel tank mounted on a steel frame. A manually
operated drain valve mounted to the reservoir bottom plate is used to drain EH
fluid from the reservoir.
A filler breather cap and magnetic separators are mounted on the reservoir top
plate. Magnetic separators are immersed in the hydraulic fluid to attract
magnetic particles that may be carried in the fluid. An inspection cover is
provided in the side of the reservoir for access to the reservoir interior.
A thermometer is supplied to monitor the reservoir bulk fluid temperature. A
pressure gauge is provided downstream of each EH fluid pump to monitor the pump
discharge pressure. A pressure gauge is also supplied downstream of the duplex
filter assembly to monitor system pressure. High and low fluid level switches
are supplied to provide remote indication of reservoir fluid level.
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PUMPING EQUIPMENT
The reservoir is equipped with redundant variable displacement AC motor driven
EH fluid pumps. Each pump is designed for continuous duty and can provide the
total system flow requirements. Thus, only one pump needs to be operating at any
one time. A shutoff valve is mounted in the pump suction line to each pump. The
shutoff valve permits maintenance on that pump without disturbing system
operation.
The EH fluid discharged by the main pump is directed through the duplex pump
discharge filters through an interchange valve. The 10 micron absolute filters
remove contaminant particles from the EH fluid. Each filter has an indicator
which gives a visual indication of filter element cleanliness. Only one filter
is in use during normal system operation. The manual interchange valve is used
to direct the EH fluid flow to the clean filter while the dirty filter element
is replaced.
A pilot operated pressure relief valve is provided to prevent excessive pressure
in the EH system. If the system pressure increases to 2350 PSIG, the relief
valve opens and releases EH fluid to the reservoir.
Shell and tube type duplex heat exchangers are mounted on the reservoir
assembly. A manual isolation valve permits a cooler to be isolated. A check
valve located at the cooler inlet allows the fluid to bypass to the EH reservoir
in case of excessive cooler pressure losses.
FLUID CONDITIONING UNIT
The fluid conditioning unit conditions EH fluid. The unit consists of a single
filter connected to a 3 micron contaminant filter, with associated isolation
valves and tubing. The filter conditions the EH fluid by removing acids and
water. The contaminant filter removes contaminant particles. The fluid
conditioning unit is located on the EH fluid supply skid.
HIGH PRESSURE ACCUMULATORS
Two high pressure accumulator assemblies are located on the turbine floor near
the steam valve actuators. They provide a reserve volume of EH fluid to handle
sudden system fluid
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flow demands. Each assembly consists of two bladder type accumulators connected
to a machined manifold block in a steel frame. The manifold blocks are machined
and valved so that the accumulators can be isolated for testing, recharging, or
maintenance.
LOW-PRESSURE ACCUMULATORS
Four low pressure bladder accumulators are installed in the pressurized drain
line to the EH fluid reservoir. The accumulators act as a surge chamber during a
load dump.
LUBRICATION OIL SYSTEM
The lubricating oil system supplies lubrication for the turbine and generator
journal and thrust bearings. The lubrication oil system components are mounted
on a single skid, which is located adjacent to the turbine generator set to
minimize floor space requirements and allow for easy installation and
maintenance.
The following components are mounted on the lubrication oil skid:
o Lubrication oil reservoir.
o Main and backup bearing oil pumps (AC motor driven).
o Emergency bearing oil pump (DC motor driven).
o Motor driven vapor extractors and demisters.
o Oil Cooler (Plate and Frame Heat Exchanger).
o Oil Filters (Duplex, 100% Capacity).
o Interconnecting Oil Piping to Unit.
o Protective devices.
o Oil level, temperature, and pressure sensors.
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OIL RESERVOIR
The oil reservoir is a large fabricated carbon steel tank which stores the
lubrication oil, minimum 5 minute retention time, and serves as a platform to
mount the necessary system equipment. Inside the reservoir, piping connects the
discharges of the pumps to the appropriate oil header supply piping. Check
valves prevent backflows through the system. Strainers on the oil pump suctions
and oil return drain help to prevent particle contaminants from circulating
through the system. The reservoir is provided with manway access openings on the
top of the shell and a drain connection on the bottom.
The interior of the reservoir is painted with an oil resistant phenolic type
aluminum paint. Because the upper portion of the reservoir is not fully immersed
in oil and moisture cannot be totally excluded, the protective paint is used to
prevent the reservoir from corroding and introducing harmful particle
contaminants into the lubrication system.
OIL PUMPS
The main and standby oil pumps (BOP) are AC motor driven, vertically mounted,
submerged centrifugal pumps consisting of a motor, coupling, and pump. Each pump
and motor, mounted on a base plate on top of the reservoir, is sized to supply
all of the required lubrication and control oil. The standby pump automatically
starts on a decrease in oil pressure. Each pump suction is equipped with a
coarse strainer to prevent foreign objects from entering the pump. A check valve
on the discharge piping of the pump prevents back flow in the system. The BOP
pumps also supply lubrication oil when the unit is on turning gear.
EMERGENCY OIL PUMP
The emergency oil pump (EOP) is a DC motor driven, vertically mounted, submerged
centrifugal pump consisting of a motor, coupling, and pump. The EOP is similar
in construction to the BOP's except for the motor. The EOP, mounted on a base
plate on top of the oil reservoir, serves as a backup to the BOP's by providing
lubrication oil to the bearings
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during unit coast down and cool down. The EOP will automatically start on a
further decrease in oil pressure below the standby pumps set-point.
VAPOR EXTRACTOR ASSEMBLY
The oil system incorporates a vapor extraction system. The vapor extraction
system removes oil vapors and maintains a slight vacuum at the turbine pedestal,
bearing housings, and oil reservoir. Two vapor extractors (for increased T-G
reliability) are mounted on top of the oil reservoir where one is maintained on
standby. The vapor extraction system has the following basic parts: oil
separator, adjustable butterfly valve, turbo blower, and blower AC motor.
PRESSURE REGULATOR VALVE
A pressure regulating valve is located in the oil supply piping between the
lubrication oil filters and the turbine. The air-operated valve regulates
bearing oil pressure between 14 and 21 psig to account for unit specific
conditions such as elevated head. The valve moves to the full open position on
loss of air pressure.
FILTRATION
A duplex 100% capacity oil filter is provided in the lubricating oil supply line
to prevent particle contaminates from circulating through the system. Under
normal operation, oil flows through one of the duplex filter cartridges while
the remaining filter cartridge is on standby duty. Oil flow can be manually
diverted via a six way valve arranged to transfer oil to the standby filter
during routine maintenance without interrupting the oil flow to the unit.
OIL COOLER
The oil cooler assembly is capable of maintaining an acceptable temperature
range of oil to the bearings, 110 degrees to 120 degrees F (43 to 49 degrees C),
while the system is in operation using BOP cooling water.
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The cooler is a plate type heat exchanger made up of a stack of cold pressed
type 316 stainless steel plates secured between two covers by bolts. Each plate
is fitted with a gasket that routes the lubricating oil and cooling water
through alternate channels in a series of parallel groups. A double seal between
the two flow channels, provided by the gasket, keeps the oil and water from
mixing. The cooler can be disassembled without disconnecting piping. A dial
thermometer indicates the outlet temperature of the oil.
OIL PIPING
The skid mounted oil piping for the lube oil system and the interconnecting
piping from the skid to the turbine-generator is included. Pipes and connections
shall be shielded in areas where oil leaks could contact hot turbine or steam
pipe surfaces.
GLAND STEAM SYSTEM AND VALVE STEM
LEAKOFF SYSTEM
A gland steam seal system is designed to:
o Prevent air leakage into the exhaust end of the low pressure turbine
during normal operation.
o Prevent steam from leaking out of the high pressure and intermediate
pressure turbine during normal operation.
Springback labyrinth type gland seal rings are located at each end of the HP/IP
and the LP turbines. A system of regulating valves is provided to automatically
maintain constant gland sealing steam pressure to the glands during startup,
shutdown and load changes. These valves are skid mounted along with a
desuperheater to lower the temperature of the steam required for sealing the LP
turbine gland and a safety valve to prevent excessive pressure in the gland
system. On a separate skid, a shell and tube type gland steam condenser with 304
stainless steel tubes provides the vacuum necessary to form the seal at the
atmospheric end of the glands. Air drawn into the system at the glands or valve
stems is removed by redundant
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motor driven gland steam exhausters. Operation of only one exhauster is needed
to meet the gland system and valve stem leakoff system requirements.
TURBINE EXHAUST HOOD SPRAY SYSTEM
At low steam flows encountered below 10-15% load, particularly when operating at
the rated speed no-load condition, unacceptable exhaust temperatures can occur
due to LP blade windage heating. The exhaust hood spray system, when activated
by the hood temperature sensor, supplies condensate to a spray ring manifold in
the LP end of the turbine to desuperheat the steam leaving the last rows of
turbine blading before it enters the exhaust hood of the turbine.
[Drawing: Exhaust Hood Spray System - For Reference Only]
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TURBINE DRAIN SYSTEM
The turbine drain system removes steam condensate from low points in the turbine
cylinders, steam inlet piping and gland steam piping to minimize water buildup
that could result in damage to turbine parts. The system, except for the waste
drains, returns the condensate back to the main condenser. The steam condensate
drain system incorporates automatic control pneumatic drain valves plus
continuous orificed drains. Slop (waste) drains are provided to drain the
cavities formed by the LP turbine bearing housing, the LP turbine exhaust cone,
and the LP turbine base structure at the end of the LP turbine.
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Generator/ Excitation
----------------------------
============================
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Features of Hydrogen Inner-Cooled Generators
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STATOR AND ROTOR
1. Stator mounting and core construction are designed to reduce the effect of
double-frequency vibration.
2. The stator end winding is braced against short circuit stresses by an
advanced hydrogen cooled stator winding bracing system.
3. Stator leads are arranged to maximize space under the generator and
readily permit connection with any type of bus run.
4. The rotor is machined from a one-piece solid steel forging integral with
the shaft ends. Forging material is tested for compliance with rigid
specifications. A bore hole and ultrasonic test grooves are provided on
larger rotors for examination of forging integrity. On smaller rotors, the
bore hole is provided only if centerline indications are found. Pole faces
are slotted to equalize rigidity in principal axes to minimize
double-frequency vibration.
5. Floating-type retaining rings prevent chafing of coil insulation. Heavy
shrink fit between retaining rings and rotor body reduces heating due to
rotor surface currents.
6. Rotor is dynamically balanced.
7. Bearings can be removed without removing the hydrogen seals from the
machine.
CORE AND WINDINGS
1. Stator core is made of high permeability, low-loss silicon steel
punchings.
2. Stator core end iron heating is reduced by an electrical shield. Two
methods are used, depending on the unit's design:
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o non-magnetic finger plates, a continuous single-piece stator end
plate, and a laminated magnetic end shield; or
o non-magnetic finger plates and a laminated magnetic end shield.
3. Field winding is hard-drawn, silver-bearing copper and is not subject to
permanent distortion during operation. The field winding insulation is
provided with liberal creepage distances. The completed winding is
carefully baked and seasoned before balancing.
4. Stator coil transposition in the coil results in more nearly uniform
temperatures and reduces losses.
5. Shaft currents are restricted by large creepage distances and generous use
of insulating materials.
VENTILATION AND COOLING
1. Effective and uniform cooling is achieved by means of inner-cooled
conductors in both stator and rotor.
2. Ventilation system provides uniform cooling over the entire length of the
generator.
3. A single multi-stage axial-flow compressor-type blower on the turbine end
of the rotor provides ample pressure and volume for efficient ventilation.
4. Individual blades are dove-tailed and locked on a blower hub for easy
removal and replacement.
5. Each hydrogen cooler consists of two separate sections to permit
temporary, part-load operation with one section out of service.
6. Tubes are rolled into tube sheets at both ends.
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HYDROGEN SEAL OIL AND GAS SYSTEMS
1. A double flow seal oil system is used. Independent seal oil systems for
air and hydrogen gas sides eliminate the oil vacuum treating unit and
reduce hydrogen consumption. Emergency seal oil backup pumps
interconnected with the lubrication oil system automatically provide
continuous operation of the seal oil supply. Pumps and motors in the seal
oil system are conservatively rated for dependability. A loop seal in the
generator bearing oil drain line provides protection against hydrogen
contamination of the bearing lubrication oil supply.
2. The hydrogen gas system includes a purity indicator actuated by a
conservatively rated blower for reliability and accuracy. Positive
hydrogen pressure is automatically maintained. A Gas Dryer provides a
moisture-free atmosphere in the generator.
3. The generator may be purged while on turning gear or at stand-still.
BUSHINGS
1. Bushings can be replaced without removing the generator rotor.
2. Current transformers can be provided for metering, relaying, or regulating
(maximum of three per bushing).
3. Dry-type bushings are provided.
4. Leads and bushings are inner-cooled for heat removal.
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Hydrogen Inner-Cooled Generator With Gas
Cooled Stator Winding
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DESCRIPTION
The generators offered by Westinghouse are designed in accordance with ANSI
Standards C50.10, C50.13, and C50.14, as appropriate.
They are a hydrogen inner-cooled generator, having a 0.90 lagging/0.95 leading
power factor when operating at 60 PSIG hydrogen gas pressure, 16,000 V, three
phase, 60 Hz, 3600 RPM.
FRAME
The generator proposed is of an integral frame construction, reducing erection
expense and giving protection to the internal components during transportation
and erection.
The generator frame is a heavily ribbed cylinder which supports the stator core
and windings, bearing brackets, and rotor assembly. The frame and the enclosing
end brackets are fabricated from steel plate. The generator frame includes frame
feet along its length which are supported by the foundation using foundation
seating plates.
The generator frame is designed to be explosion-safe. This means that the frame
will contain and withstand an internal explosion of the most explosive mixture
of hydrogen and air at the most probable conditions of occurrence, i.e., at
atmospheric pressures during gas changing operations, without damage to life or
property external to the machine. Some internal damage may occur with such an
explosion.
The bearings, supported in rugged, fabricated end brackets, are insulated and
may be removed without removing the hydrogen seals from the machine. Bearing and
gland seal insulation is provided at the following places on both ends of the
generator to prevent shaft currents from flowing through the bearings: between
the bearing pad and the bearing seat; between the gland seals and the brackets;
between the bearing oil seals and the brackets; and
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at the stop dowel and bearing key. Ring type gland seals are also housed in the
bearing brackets to maintain a gas-tight shaft seal. These shaft seals are of
double oil flow construction with separate air and hydrogen side oil supplies to
reduce hydrogen consumption. For 30 psig gas pressure applications, single-flow
seal oil system is used. Provision for mounting of vibration detector probes are
provided at each bearing. The bearings are forced lubricated and visual oil flow
gauges are available as an option in the bearing bracket oil piping. Embedded
bearing metal thermocouples are provided. Bearing oil drain thermocouples and
thermometers are provided in wells in the lube oil drain piping (part of turbine
supplied piping).
Two hydrogen coolers are mounted vertically at the turbine end of the generator
frame, simplifying piping layout since all water piping originates in one
location at the turbine end of the generator, well away from the high-voltage
buswork.
The generator frame is supported by four frame feet which rest on foundation
seating plates. Foundation bolts (provided by the foundation designer) resist
short-circuit torques applied to the frame. Shims between the frame feet and
seating plates are provided for generator alignment with respect to the turbine
generator shaft system. A number of jack bolts are also provided in the
generator frame feet for vertical alignment. Provisions in the frame feet and in
the seating plates allow engagement of axial anchors (embedded axial anchor
plates provided by the foundation designer) to allow for thermal expansion of
the generator in both axial directions. Likewise, design of the bearing brackets
on both ends of the generator for steam turbine and exciter end bracket for
combustion turbine applications allow engagement of transverse anchors (embedded
transverse anchor plates supplied by the foundation designer) to maintain the
generator lateral position while allowing the axial expansion. For the turbine
end anchor in combustion turbine application, an I-beam anchor between the left
and right walls shall be used.
GENERATOR VENTILATION AND COOLING
The ventilation system provides uniform cooling of the entire generator frame
using hydrogen as the cooling medium. This time-proven system, supplied on large
steam turbine-
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driven generators for decades, permits a generator to be designed for optimum
physical size and electrical capacity.
[Figure 1 - 2-Pole Hydrogen Inner-Cooled Generator (PDL1253-73)]
The longitudinal view above will be of assistance in the ventilation circuits
described. It should be noted that this figure is typical, and features such as
the number of rows of blades in the blower, the number of frame sections, and
other minor details may not be exactly the same as those ultimately designed.
The rotor and stator core are cooled by hydrogen which is circulated by a
single, multistage, axial flow, compressor type blower.
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[Figure 2 - Axial Compressor Blower (PDL1251-61A)]
The blower is located immediately ahead of the coolers so that the gas rise due
to the blower losses will not be added to the total temperature rises of the
electrical components. The hydrogen is cooled by the two hydrogen-to-water
coolers located vertically at the turbine end of the generator. Each cooler has
two sections, thus permitting temporary, part-load operation at 80% of rated kVA
with one cooler section out of service. The water boxes in the hydrogen coolers
are arranged so that the cooler tubes run full at all times. The tubes are
rolled into tube sheets at both ends.
The stator core and rotor winding are cooled by separate but parallel flow
circuits. The air gap serves as a plenum to return the rotor gas back to the
axial blower.
The stator core is cooled by cold hydrogen gas circulated by pressure from the
shaft mounted axial blower. For the main length of the core, cold gas enters
openings in the exciter end of the core and flows axially through the core to
the turbine end and then returns to the blower. There is also radial ventilation
of the stator core end iron.
A portion of the cold gas leaving the coolers is directed by means of baffles
and ventilation passages to the rotor. The cold gas is admitted at each end of
the rotor through the annular space under the rotor winding retaining rings. A
special pattern of holes is located in the
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conductor end turns and the gas enters directly into these holes at both ends of
the rotor. The gas then flows in two parallel paths on each end of the rotor.
The gas in one path flows through and cools the conductor end turns and
discharges through scooped ventilation openings in the rotor pole face and into
the air gap at the end of the rotor body. In the other parallel path, the gas
flows through the hollow conductors in the slot portion and discharges into the
air gap through radial outlet ports in the conductors at the center region of
the rotor body. From the air gap it then returns to the blower.
The stator coils, parallel rings, main lead connectors, and generator lead
bushings are cooled directly by cold hydrogen gas. Cold hydrogen gas enters one
end of each stator coil into insulated ventilation tubes assembled in the coil
and flows through the length of the coil to the opposite end. Cold hydrogen gas
also enters the hollow parallel rings and flows through the main lead connectors
and generator lead bushings. Thus, all the stator winding components are cooled
internally by gas.
STATOR CORE
The stator core is built of thin, high permeability, low-loss, silicon iron
segmental punchings. Each punching is insulated on both sides with a
high-temperature, C5 - capable insulation to obtain a high interlaminar
resistance, thereby reducing the transformer type losses caused by eddy
currents. The insulation is bonded to the metal to meet stringent dielectric,
electrical resistance and stacking factor requirements. The insulation maintains
its integrity at temperatures well above that of normal operating temperature.
The punchings are assembled on key bars located at the outer diameter of the
core. Frequent pressing of the laminations during stacking provides a tight
stator core. Pressure to keep the core laminations tight during operation is
provided by the key bars and insulated thru-bolts located at the centroid of the
core. The core clamping pressure is distributed over the core surface by heavy
non-magnetic finger plates and continuous, single piece stator end plates. After
assembly, the stator core is treated to protect it from rust and to further
insulate between punchings. The packs of stator core laminations at the end of
the machine are electromagnetically shielded. By diverting the flux from the
ends of the core, the circulating
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eddy current loss is reduced to enable the generator to carry 100% MVA at 0.95
leading power factor.
[Figure 3 - Stator Core Design-End Plate Axially Cooled]
The stator core is flexibly spring mounted by using flexible elements, spring
bars, to connect the stator core to the generator frame. The magnetic attraction
between the poles of the rotor and the stator core induces a double frequency
vibration in the core. These flexible elements reduce the amplitude of the
double frequency core vibratory force transmitted to the generator frame and
foundation. The mounting is such that very little of the core vibration is
transmitted to the housing, but the core is rigidly restrained against load and
short circuit torques.
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[Drawing: Figure 4 - Stator Core flexible Mounting Using Key Bars
and Spring Bars (PDL 1251-62)]
The stator core is tested for integrity a number of times during the
manufacturing operations using a "loop testing" procedure or El-Cid(1) testing.
The loop testing procedure circulates magnetic flux through the core laminations
which is inspected for local hot spots using a thermal vision camera capable of
detecting small temperature differences. The El-Cid test procedure is a low
power, electronic test and makes a strip chart recording of each slot for the
detection of core imperfections. The lack of core problems in Westinghouse
generators is attributed to attention to core design and testing for core
integrity as described above.
At the bore diameter equally spaced slots run the entire length of the stator
core. These slots extend into the core for assembly of the stator coils.
STATOR WINDING DESIGN
Gas Cooled Stator Coils
The stator winding consists of gas inner-cooled, single turn, half coils wound
in open slots and secured in place by glass-epoxy wedges. Each stator coil is
made up of two half coils shaped on a former and joined together after assembly
in the slots. The stator coils of this
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generator are composed of solid copper strands and insulated ventilation tubes,
as shown below.
[Figure 5 - Stator Winding-Hydrogen Inner-Cooled Generators (PDL1251-66)]
Each strand is wrapped with electrical grade, continuous filament type
polyester, and glass servings which is baked to form a smooth, continuous,
uniform insulation over the entire surface.
The strands undergo a 720 degrees Roebel transposition in the internal portions
of the coil and use solid brazed connections in the end turns to control
circulating and eddy current losses.
Effective cooling of the stator coils is achieved by hydrogen gas flowing
through the hollow ventilation tubes in a single pass. The phase connections
(parallel rings and main lead connectors) and generator lead bushings are
composed of hollow copper conductors for direct hydrogen gas cooling. All six
ends of the three phase winding are brought out at the exciter
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(1) El-Cid - Electromagnetic Core Imperfection Detector is a product of ADWEL
INDUSTRIES LTD.
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end of the frame through a lead box with gas-tight bushings. Either end of the
windings is suitable for grounding or for use as the main leads.
Resistance temperature detectors are provided on each phase group to measure the
temperature of the stator coil hot gas discharge and to detect any abnormal
conditions. Leads from the temperature detectors are connected to terminal
boards.
STATOR COIL INSULATION
THERMALASTIC(2) epoxy insulation is used to provide the groundwall insulation of
the stator coils superior dielectric and mechanical properties. Refer to
Generator Features Literature 1913. THERMALASTIC insulation is a tough, yet
thermally stable dielectric barrier with excellent electrical and physical
properties. The advantage of THERMALASTIC epoxy insulation results from the
solventless, heat-reactive resin impregnant and the vacuum-pressure-impregnation
(VPI) process used. The excellent electrical properties of the resin, coupled
with good insulation consolidation, results in THERMALASTIC with lower
insulation power factor, increased dielectric strength, and remarkable
improvement of voltage endurance. Its consistently low dielectric loss is less
affected by temperature and voltage variation than other types of insulation.
THERMALASTIC insulation has great thermal endurance and long life. The
THERMALASTIC character of the resin provides solid, yet elastic physical bonds
between mica paper platelets. The resilient nature of the resin bond permits
elastic cyclic displacement of adjacent mica paper platelets and provides
restoring force within the insulation groundwall. This makes THERMALASTIC
insulation ideally suitable for cyclic duty operation. THERMALASTIC insulation
is also inert to ordinary chemicals, oils, and solvents and has an unusually
high moisture resistance. THERMALASTIC insulation was
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(2)THERMALASTIC is a registered trademark of Westinghouse Electric Corporation.
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developed in the late 1940's, and first placed in service in 1950. Continued
improvements have made THERMALASTIC insulation a superior insulation for
high-voltage coils.
THERMALASTIC insulation is an ANSI Class F insulation system.
Effective corona suppression is provided by the use of a low-resistance,
conducting material on the coil slot section to contain the dielectric stress
within the solid insulation, and a high-resistance, voltage grading material on
the end-turns to grade voltage stress along the coil surface.
Quality Assurance checks are performed on each coil and the complete winding to
verify insulation integrity. Each coil is short circuit tested and given
high-potential tests well in excess of final winding high-potential test values
before being wound into the machine. Each set of coils includes extras which are
chosen at random from the set for testing to destruction, thus giving further
verification of insulation integrity. Additional high-potential tests are
performed both during and after completion of stator winding.
STATOR WINDING BRACING
Of equal importance with the insulation system is the method of slot-fill and
bracing used to protect the stator coils from the vibratory stresses experienced
during steady-state operation and from the transient disturbances which can be
experienced during abnormal operating conditions. The ANSI and IEC Standards set
the requirements for steady-state operation and define the abnormal operating
conditions which must be met.
Each coil is secured in the slot by cotton-phenolic epoxy glass wedges assembled
in wedge grooves in the slot. See figure 5.
Prestressed driving strips (PSDS or ripple spring) are located directly under
the slot wedge to maintain radial pressure on the coils and slot wedges.
Pressurized hoses are inserted below the PSDS. Filler strips are provided to
protect the coil surface and to distribute the wedging load. The pressurized
hoses are used to preload the slot contents, i.e., the stator coil, stator slot
wedge, filler strips, and prestressed driving strips.
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Semi-conducting filler strips are also utilized on one side of the coil to
provide a tight fit in the slot. These supporting fillers virtually eliminate
potentially damaging coil vibration caused by the magnetic forces that are
present. The entire stator slot contents are thermally cured under pressure to
consolidate slot contents and reduce vibratory stresses due to coil motion. The
procedures described and the consolidation of groundwall and filler materials,
plus the use of ripple springs between coils and wedges, gives unsurpassed
compactness with less maintenance and long service life.
The end-winding bracing must be designed to address several key issues. These
are:
o transient operating conditions;
o normal steady-state operating conditions; and
o thermal expansion and contraction for all conditions.
The bracing system is designed to withstand the electromagnetic forces imposed
on the end-winding during transient events as required in ANSI Standard C50.13.
The bracing is designed to limit movement of the stator coils (both radial and
circumferential), thus protecting the stator coil insulation.
For normal steady-state operation, the bracing is designed to consolidate the
end-winding into a structure such that the natural frequencies are away from the
operating frequency and thereby resulting in long life for winding components.
The end-winding bracing is "decoupled" from the stator core which significantly
improves the global dynamics of the end-winding.
To address these issues, a bracing system has been developed.
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[Drawing: Figure 8 - Advanced Hydrogen--Cooled Stator
Winding Bracing (PDL1251-69)]
The key function of the bracing is to control the dynamics of the end winding
structure and allow thermal expansion and contraction without wear of the
groundwall insulation.
The bracing system provides a solid structural backbone to which all the other
end winding components can be consolidated. Retightenable radial clamps are used
to consolidate the coils and winding bracing. A compact arrangement of parallel
rings is mounted to the back of the end winding bracing system. The consolidated
end winding structure is free to expand and contract axially with thermal
changes. A bracket mounted on the core provides radial stiffness to accommodate
transient electrical events.
MAIN LEADS
Stator parallel rings, phase leads, and main lead bushings are directly cooled
by the hydrogen gas. The main lead bushings are assembled in a gas-tight main
lead box located at the exciter end. The bushings are of dry type construction.
Bushings can be replaced without removing the generator rotor. The six (6) main
lead bushings extend from the lead box, three of which are used for the main
leads connecting to the main transformer and three of which are used to form the
neutral tie. Each bushing can be provided with up to four (4) bushing mounted
current transformers. Current transformers are suitable for metering, relaying,
or regulator
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service. Each current transformer has both a relaying accuracy of C-400 and a
metering accuracy of 0.3B-1.8 in accordance with ANSI C57.13. The current
transformers have a secondary current level of five amperes, and the transformer
ratio is chosen so that, at generator rated current, the meter reading is
approximately three-quarters of full scale.
The generator neutral connection and generator neutral enclosure are also
supplied.
Standard configuration of the lead box is with the slanted legs toward the
turbine end of the machine.
GENERATOR ROTOR
The cylindrical type rotor forging is made from nickel, chromium, molybdenum,
vanadium alloy steel and is poured with the vacuum degassing process. Forging
materials are ultrasonically tested for compliance with rigid quality assurance
specifications. If found necessary, a bore hole is provided to remove centerline
indications. The bore hole may then be used in later years for examination of
forging integrity.
[Figure 9 - Turbo Rotor (1251-15B)]
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[Figure 10 - Generator Shaft (PDL1251-10C)]
Two pole rotors have their pole faces slotted so as to equalize flexibility and
to reduce double-frequency vibration, as shown below.
[Figure 11 - Pole Face Slotting (PDL1251-11B)]
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Rotor winding components are subjected to stresses both from rotation and from
thermal expansion and contraction. It is essential that these stresses be
accounted for and limited in the rotor design. During startups, shutdowns, and
load changes the rotor winding will move relative to the rotor structural parts.
Built-in clearances and slip layers allow for this motion while reducing the
frictional forces which could cause distress or shaft vibration. Cold-worked,
creep-resistant, silver-bearing copper and epoxy-glass laminate turn-to-turn
insulation reduces the chance of permanent winding deformation or rotor shorts.
The winding is held firmly against rotational forces by nonmagnetic retaining
rings and high-strength rotor slot wedges. In the rotor end turn area, custom
fitted glass epoxy blocking and spacers maintain alignment of the winding
components. Axial expansion is controlled by allowing for expansion to occur and
by including Teflon slip layers in the rotor slots and under the retaining ring,
to limit the friction that opposes axial motion.
The field winding is manufactured from high-strength alloy copper. This
silver-bearing alloy copper contains the necessary metallurgical creep-resistant
properties to minimize distortion during operation. The individual turns of the
rotor winding are made up of hollow conductors, each consisting of two copper
channel sections, which form a gas passage for the hydrogen. The field winding
insulation is provided with extra electrical creepage distance on the top turns.
The windings are placed in open, tapered slots which are lined with one piece,
molded insulating slot cells. The NOMEX slot cells are Teflon lined on the inner
surface to permit the rotor coil to move axially due to thermal expansion and
contraction. The insulation between turns consists of glass laminate bonded to
the copper. The glass laminate exhibits excellent wear characteristics and has a
high coefficient of friction, which reduces relative slippage between coil turns
that causes wear and copper dusting. Instead, the entire coil slot structure
acts as a unit rather than individual turns. After the rotor is pressed and
cured, fitted, high-strength slot wedges are driven into the top of the slots.
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[Figure 12 - Rotor Winding--Open Slot (PDL1251-72)]
[Figure 13 - Rotor Field Winding and Ventilation (PDL1251-13B)]
The rotor end turns are supported radially against rotational forces by 18Mn18Cr
nonmagnetic retaining rings shrunk onto the rotor body. This alloy is now the
industry standard and is highly resistant to corrosion and stress corrosion
cracking in the presence of moisture and other corrodents. These retaining rings
are nonmagnetic steel forgings
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produced by a cold-expansion process. These floating-type retaining rings have
insulating liners, with a Teflon(3) surface in contact with the winding to
prevent distortion of the rotor coil and abrasion of the rotor coil insulation.
The rings are shrunk and keyed onto machined sections at the ends of the rotor
body with a firm fit at overspeed and rated temperature. The heavy shrink fit
provides a low-resistance electrical path for induced rotor surface currents,
thereby reducing heating due to rotor surface currents. A circumferential
locking ring is provided to prevent axial movement of the retaining ring. This
method of support permits the shaft to flex without causing fretting at the
joint or overstressing the rotor winding and is used to eliminate the effect of
shaft deflection on the rotor end winding assembly. The construction of the
retaining ring is shown in Rotor End Winding PDL 1251-45B.
[Figure 14 - Rotor end Winding (PDL1251-45B)]
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(3)Teflon is a registered trademark of I.E. DuPont Corporation.
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Ventilation of the rotor end turns is shown in PDL 1251-12C.
[Figure 15 - Rotor end Turn Ventilation (PDL1251-12C)]
An amortisseur winding is provided which uses copper damper bars in each rotor
slot connected at the ends by beryllium copper wedges to the retaining rings.
This design meets the requirements of the industry standards for negative
sequence current capability.
The generator rotor has a shrunk-on coupling on the turbine end. This is due to
several design features. These include a turbine end blower design which uses
rotating blades mounted in a shrunk-on hub with a smaller diameter than the
coupling; the use of a retaining ring end plate which may be smaller in diameter
than the coupling; and in some cases, depending on the size of the coupling
required to match the turbine, even the retaining ring inner diameter may be
smaller than the coupling diameter.
The completed rotor is statically and dynamically balanced. It is carefully
baked and seasoned at running speed to promote lasting stability of the rotor
winding components. Standard quality control tests are made on every rotor
before and after overspeed tests to verify that no shorted rotor turns have
developed. It is performed by means of a flux-probe or search coil test as the
rotor speed is increased from rest up to rated speed and back to rest. The rotor
is then carefully inspected and a final high-potential test is performed.
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EXCITATION
Either static or brushless excitation can be applied, depending upon your
preference.
The generator collector portion of a static excitation system is covered by a
separate description, specification, and bill of material from the generator. A
separate description of the voltage regulator for the power supply portion of
the system is also provided.
LUBRICATING SUPPLY SYSTEM
The generator shares a common lubrication system with the turbine. Fewer
subsystems means less complexity and reduced installation costs.
HYDROGEN COOLERS
Hydrogen coolers consist of a number of finned tubes arranged within a suitable
open frame structure, thus providing a large heat transfer surface for cooling
the hydrogen gas circulating within the generator. Technically a hydrogen cooler
is classified as a 1-2 crossflow heat exchanger. That is, the hydrogen gas makes
a single pass through the cooler on the finned side of the tubing and the
cooling water makes two passes on the tube side. Generally, hydrogen coolers are
divided into 2 or 4 "sections", each section being an independent heat
exchanger. The sections are arranged in tandem such that the hydrogen gas makes
a single pass through all the tandem sections, whereas the cooling water flows
in parallel in each section and makes two passes in each.
There are generally two arrangements of hydrogen coolers used in generators: one
is with two coolers vertically mounted; and the other is with a cooler
horizontally mounted. This design uses the vertical arrangement.
In the vertical arrangement, there are two hydrogen coolers, one on each side of
the shaft, mounted in the frame of the generator at the turbine end. Each cooler
consists of two separate, tandem sections, making a total of four sections, each
of which can be isolated by valving.
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A vertical cooler is shown.
[Figure 16 - Hydrogen Cooler (PDL1251-17B)]
Each cooler is attached to the generator frame at one end only to permit
expansion and contraction within the generator. The inlet water chamber is
bolted to the cooler support flange which is bolted to the generator frame. The
water makes two passes through each section in a counter flow manner by means of
a reversing chamber at one end. The heat is transferred from the gas to the
cooling water flowing through the finned tubes of the cooler.
Temporary operation at reduced load is permitted with one of the four cooler
sections out of service. Standard design is to size the hydrogen coolers such
that this reduced load level is 80% of the nameplate rating with one cooler
section out of service.
INSTRUMENTATION
As a standard scope of supply, RTD's (standard is copper material) and TC's
(standard material is copper-constantan) are supplied to measure various
temperatures within the generator. Some of these detectors are intended to be
tied in with automatic turbine control (ATC) and are therefore supplied as
duplex elements; one for the ATC and one for Purchaser use. Where the detector
is not required for ATC, it is supplied as a simplex element for
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Purchaser use in monitoring. There is a standard set of temperature detectors
for stator coils, warm gas, cold gas, common cold gas for water control to the
hydrogen coolers, bearing metal, seal oil, and lube oil temperatures. It is also
possible to supplement this standard supply with additional temperature
detectors which the Purchaser might specify. Different detector materials may
also be desired by the Purchaser and can also be accommodated.
SHIPMENT
Shipment of the generator is determined by the Customer's requirements
consistent with shipping size and weight limitations.
Typically, the generator will be shipped assembled to the maximum extent
possible with the rotor and bearing brackets in place, except for the hydrogen
coolers. Assembly is done at the factory by experienced personnel with the
proper equipment, reducing the possibility of related field problems. For many
years, Westinghouse has shipped a great number of generators in this manner.
Units of this size are normally shipped on flat bed railcars.
When the stator and rotor are shipped as a unit, the machine is totally
enclosed, forming a gas-tight housing. This greatly simplifies maintenance and
handling before and during erection. Axial movement of the rotor is prevented by
a rotor cover on the turbine end which also forms part of the gas-tight housing.
This reduces any possibility of bearing damage. Assembled generator shipment
results in substantial savings in erection costs.
In other cases, where handling the complete generator at the site is difficult,
the rotor may be shipped separately. In either case, the larger stators are
shipped by a Schnabel car:
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[Photographs: Figure 3 - Generator Transport (PDL1251-36B)]
where the stator frame forms a structural part of the car. The rotor, if shipped
separately, will be enclosed in a sealed bag on a special rotor skid on a
flatbed railcar.
EXPERIENCE
All of these features combine to provide generator reliability. Continually
updated generator design and insulation practice result in the operating
experience of over 1000 units with a proven service record dating back to 1950.
FACTORY TESTS
The following standard commercial factory tests in accordance with ANSI C50.13,
Table 4, Generators Not Completely Assembled in Factory for Test, will be
performed on the generator:
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Mechanical
1. Rotor overspeed.
2. Rotor mechanical balance.
3. Mechanical inspection.
4. Air leakage test.
Electrical
1. Measurement of cold resistance of armature and field windings.
2. Insulation resistance measurements.
3. Dielectric tests:
Armature: The standard test voltage shall be an alternating voltage whose
effective value is twice the rated voltage of the machine, plus 1,000
volts, applied for 60 seconds.
Field: The standard test voltage for field voltages up to and including
500 volts is an alternating voltage of ten times the rated voltage, but
not less than 1,500 volts. The standard test voltage for field voltages
rated greater than 500 volts is 4,000 volts plus twice the rated voltage.
This test is applied for 60 seconds.
4. Resistance temperature detector tests consisting of:
resistance measurement;
insulation resistance measurement;
one minute dielectric test at 1500 volts AC,
with a continuity check of the device afterwards.
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ALTITUDE
Generator ratings are based on operation at rated hydrogen pressure when the
generator is installed at an elevation of 1,000 meters or less above sea level.
Generators operated at altitudes above 1,000 meters will have the gauge pressure
of the hydrogen in the generator casing increased so as to maintain the same
absolute casing pressure as that required for operation at sea level.
COOLERS SPECIFICATION
The coolers specified will have sufficient surface and will be designed to give
satisfactory performance under the specified design conditions. The various
materials used in the construction of the coolers will be of high quality and
will conform to standard industry practice with regard to each individual part
of the apparatus. The workmanship will be high grade in every detail.
Westinghouse assumes no responsibility for any damage due to corrosive action of
the fluid handled, or to the presence of foreign substances in it.
The coolers will be sized to permit temporary, part-load operation at 80% of
nameplate rated MVA with one of the four cooler sections out of service. When
the same TOTAL cooler water flow is pumped through the three remaining cooler
sections, temperatures will remain within the allowances of the ANSI standards.
When the normal flow in each of the three remaining sections is maintained,
temperatures may exceed the allowances of the ANSI Standards, but will remain
within safe operating temperatures.
NAMEPLATE RATING VERSUS GENERATOR
CAPABILITIES
The Nameplate Rating of the generator is the set of operating conditions: MVA;
Voltage; Power Factor; Gas Pressure; etc., at which the generator meets the
requirements of the ANSI standards. The generator also has capabilities at lower
gas pressures as shown on the supplied generator capability curve. The intent of
these lower gas pressure capabilities is to help the Purchaser reduce operating
costs when his long term demand for power output is at a reduced level. At these
times the gas pressure can be reduced to conserve hydrogen and
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reduce leakage rates. The output capability of the generator is related to the
hydrogen gas pressure. The MVA levels for the reduced gas pressures have been
selected so that the generator is also in accordance with the temperature
requirements of the ANSI Standards under these load levels and gas pressures. It
is recommended that when the Purchaser expects load swings to rated output, that
the hydrogen gas pressure be maintained at the rated, maximum value.
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Features of
THERMALASTIC(Registered) Insulation System
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THERMALASTIC insulation is the result of extended research and development over
a number of years. It has outstanding electrical, physical and thermal
properties.
THERMALASTIC achieves a unique union of solventless, thermosetting resins and
mica to provide the tough, reliable insulation required for large generators. It
is a system, not a material, providing reliable service on more than 1000
generators today. THERMALASTIC has been refined through a continuous program
since its introduction in 1949.
THERMALASTIC SYSTEM FEATURES
SUPERIOR ELECTRICAL, MECHANICAL AND
THERMAL PROPERTIES
Mica, the heart of the THERMALASTIC system, is nature's best known insulator
from a standpoint of electric strength, voltage endurance and thermal endurance.
The advantage of THERMALASTIC insulation resides in the resin impregnant and the
impregnation process. The excellent electrical properties of the resin, coupled
with good insulation consolidation, results in lower insulation power factor,
increased dielectric strength, and remarkable improvement of voltage endurance.
The epoxy impregnating resin, in combination with selected reinforcing fabric,
gives high mechanical strength plus elasticity. This feature enables the
impregnant to expand and contract with other coil elements, making THERMALASTIC
ideal for cyclic duty. In addition, the epoxy provides superior chemical and
moisture resistance while providing excellent long term thermal stability.
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MANUFACTURING PROCESS REDUCES VOIDS
AND RESULTS IN CLOSE DIMENSIONAL
TOLERANCES
Generator coils using this insulation are of the half-coil construction. All
strands of each conductor are individually insulated with polyester-glass
insulation. The assembled strands are bonded solidly in the portion embedded in
the slot. This provides a strong rigid straight part and consolidates the
strands to a controlled size.
The coils are insulated from ground by multiple layers of continuous mica tape.
The mica tape used is bonded with a synthetic resin with excellent electrical
properties which contribute to low dielectric loss and high dielectric strength.
After application of the mica tape, the coil is completely taped with a finish
tape.
The coils are vacuum treated to remove moisture, solvents and gases. They are
then impregnated under pressure with a thermosetting synthetic resin of low
viscosity. The epoxy resin, in a liquid state, is introduced into the mica
system by alternating vacuum and pressure conditions to eliminate voids. The
process used results in resin fill of the coil interstices. The coil is then
heat cured while clamped in a fixture, resulting in a unified dielectric barrier
of close dimensional tolerances in both cross-section and end turn
configurations.
The resultant composite insulation is a tough, yet flexible, dielectric barrier
with excellent electrical and physical properties. The insulation is elastic and
possesses good dimensional stability.
STRICT QUALITY CONTROL VERIFIES
RELIABILITY
Quality Assurance checks are performed on each coil and the complete winding to
verify insulation integrity. Each coil is short circuit tested and given
high-potential tests (well in excess of final winding high-potential test
values) before being wound into the machine. Each set of coils includes extras
which are chosen at random from the set for testing to destruction, thus giving
further verification of insulation integrity.
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Additional high-potential tests are performed both during and after completion
of the stator winding.
Effective corona suppression is provided by the use of two materials; (1) a
low-resistance, conducting varnish on the coil slot section to contain the
dielectric stress within the solid insulation, and (2) a high resistance,
semi-conducting Coronox in the end turns to grade voltage stress along the coil
surface.
THERMALASTIC is a registered trademark of the Westinghouse Electric Corporation.
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Scope of Supply
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Scope of Supply
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1. One (1) stator frame complete with bearing brackets, bearings, stator
core, and stator winding with THERMALASTIC(1) groundwall insulation.
Lead box supplied for mounting to the bottom of the frame for installation
of terminal bushings and bushing current transformers, (For combustion
turbine applications, leads can be brought out from the top of the frame).
THERMALASTIC(4) groundwall insulation is a registered trademark of
Westinghouse Electric Corporation.
2. One (1) rotor complete with rotor winding and shaft mounted blower hub.
Rotating blower blades and stationary blower shroud provided.
3. Hydrogen coolers, with 90-10 copper-nickel tubes and Muntz metal tube
sheets, for mounting within the generator housing and designed to operate
with 95 degrees F (35 degrees C) and lower cooling water at a maximum
pressure of 125 psig (8.8 kg/square cm g). Cooler water boxes are carbon
steel. Coolers have pipe ends prepared for Victaulic(2) couplings.
Transition piping piece supplied for each inlet and outlet. Victaulic
couplings provided for connection of transition pieces to cooler piping
and to balance of plant/Purchaser supplied piping.
4. Six (6) high-voltage bushings.
5. Twelve (12) bushing current transformers (two (2) per terminal) with
provisions for one (1) additional transformer per bushing. Each local
current transformer terminal box is provided with short-circuiting type
terminal blocks for balance of plant/Purchaser continuation.
- ----------
(1) THERMALASTIC is a registered trademark of Westinghouse Electric Corporation.
(2) Victaulic is a registered trademark of Victaulic Company of America.
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6. Temperature detectors (resistance type - 100 ohms platinum at 0 degrees C)
as follows:
A. One (1) resistance type for each hydrogen cooler outlet cold gas.
Duplex is standard supply.
B. One (1) resistance type in common hot gas inlet to hydrogen coolers.
Duplex is standard supply.
C. One (1) resistance type (including emersion well) in common cold gas
outlet from hydrogen coolers for control of hydrogen temperature by
Purchaser. Simplex is standard supply.
D. Six (6) resistance type in armature coil discharge gas of two pole
generators. Simplex is standard supply.
E. Duplex thermocouples located in the bearing metal of each generator
bearing. Type T (copper-constantan) is standard supply.
F. Duplex thermocouples located in each bearing oil drain for the
generator. Well provided in turbine supplied lube oil drain piping.
G. Oil thermometer located in each bearing oil drain for the generator.
Well provided in turbine supplied lube oil drain piping.
H. Two (2) in collector air inlet and one (1) outlet (3 total). Duplex
is standard supply.
Internal temperature detectors are wired out through a gas-tight terminal
board in the side of the generator frame with stud type connections for
balance of plant/Purchaser continuation. External or well type temperature
detectors are wired to terminal boards located on the generator frame for
balance of plant/Purchaser continuation.
7. Special tools:
A. Necessary rotor removal and installation tools.
B. Cooler, bearing and bearing bracket assembly tools.
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C. Set of rotor lifting cables.
Note: If duplicate or similar generator is located in same station of the
Purchaser, only those tools, wrenches and cables unique to the new
generator will be supplied.
D. Stator jacking or lifting trunnions.
(Provided on a loan basis to be returned to Westinghouse.)
E. Gap barrier tensioning tool. (If required)
8. Miscellaneous:
A. Terminals for testing bearing and gas seal insulation.
B. Generator frame grounding pads (Standard supply is 2).
C. Seating plates and shims.
D. Removable appearance frame covers ("lagging") from centerline to
floor. (Embedded support plates NOT included.)
E. Bus duct adapters for alignment of Purchaser's bus duct. Not
intended for support of the phase bus. Support of the phase bus by
others.
F. Generator neutral bus, flexible connectors, and generator neutral
enclosure. Connection pad provided on the generator neutral bus and
an opening with Micarta adapter plate provided in generator neutral
enclosure for balance of plant/Purchaser neutral grounding
continuation.
G. Enclosure with air filter for collector rings and collector brush
rigging.
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WDR2000 Static Exciter
Digital Voltage Regulator
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WDR2000 Static Exciter Digital Voltage Regulator
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The proposed WDR-2000 static excitation system will utilize the Westinghouse
type WDR digital voltage regulator and trinistat power amplifier. The equipment
included will provide a modern, reliable regulating system without utilization
of existing rotating exciters.
The Westinghouse static excitation system is designed to provide control,
protection, and monitoring functions for a synchronous generator. The
Westinghouse system contains the following components: a power potential
transformer, drawout thyristor power converters with associated firing circuits
and a type WDR digital voltage regulator. All semiconductor components used in
the system are very conservatively rated and are protected from transient surges
to ensure reliable operation and service.
BENEFITS
The benefits of modern digital voltage regulator applied in the Westinghouse
static excitation system versus existing rotating and obsolete systems include:
o Improved availability
o Increased protection
o Reduced operating and maintenance costs because of:
Inherent reliability of solid state
- Availability of spare parts
- Elimination of rotating apparatus
- Modularity of components
o Higher initial response
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o Higher efficiency (lower in losses)
The type WDR digital regulator includes the following features and capabilities:
o Main CPU Boards Using Intel Boards
o Provisions for Built-in Power System Stabilizer (PSS)
o Non-Volatile Memory Board with 2-Year Storage (Battery Back-Up)
o On-Line Monitoring of Machine and Excitation System
o Built-In Status Panel
o Hand-Held Access and Programming Keyboard for local programmer interface
o Remote Communication Access Options (select one):
o RS232C Serial Communications up to 50 ft.
(Suitable for one PC/one regulator configuration)
o RS485 Serial Communications up to 5000 ft.
(Mandatory for multiple WDR voltage regulators connected to one PC)
o Modem Communications, 1200-9600 Baud using RS232C or RS485
communications standard
o Remote Programmer Interface
o Error Handling
o Self Diagnostics
o Communication Software for Use With IBM PC or Compatible
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o Change or View Settings
o Alarm/Trip Record in Sequence of Events
o Settings Printout
o Settings Storage on Floppy Diskette
o Monitoring of Regulator Operating Conditions
o Diagnostic Procedures
o System Fault Tolerance
o Back-Up Analog DC Regulator Mode in Separate Module
EQUIPMENT OPERATION AND GENERAL
DESCRIPTION
The following paragraphs describe the operation of the Westinghouse excitation
system, a general description, and a specific description of the features.
EQUIPMENT OPERATION
The Westinghouse static excitation system includes a potential source static
exciter with a digital voltage regulator for automatic control and an analog DC
regulator for testing and backup. In the automatic mode the digital regulator
controls generator terminal voltage by supplying a similar control signal to the
firing circuits of the power amplifiers. The digital regulator can operate as
either an AC terminal voltage regulator or DC field current regulator. This
system is controlled manually by the analog DC regulator which sends a signal
through the firing circuits to control the drawout power amplifiers of the
static exciter. The power amplifiers are controlled by either the analog DC
regulator signal or the digital regulator (WDR) signal.
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GENERAL DESCRIPTION
The proposed excitation equipment features the Westinghouse type WDR digital
voltage regulator with drawout power converter. The WDR digital regulator will
be mounted in the logic cubicle. The logic cubicle will also include any analog
protection circuits which will be supplied, the analog firing circuits, and the
in service meter panel with test voltage source.
The power converters will be supplied in a second adjacent cubicle. The power
converter features a drawout design which allows ease of removal under load. The
power converter cubicle is designed to accept future additions of power
converters or to allow redundancy in the number of power converters supplied.
The power cubicle features a forced air cooling system with a main fan and a
backup spare fan. The fan control circuits including automatic transfer to
backup fan are grouped together in one convenient location. The forced air
cooling system features a fan assembly that can easily be removed or changed out
under load.
An auxiliary cubicle is adjacent to the power cubicle and includes the AC
disconnect. The auxiliary cubicle is typically the primary location for power
connections in and out of the static exciter voltage regulator lineup.
SYSTEM FEATURE DESCRIPTION
Digital Voltage Regulator Logic
Automatic AC Voltage Regulator Sensing Function
This function in the WDR responds to three-phase voltage from potential
transformers by computing the instantaneous RMS value from a sampled reading and
comparing it to a constant reference. The difference, the AC error, between the
actual and reference quantities is sent to an auctioneering stage in the signal
mixer.
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Transient Gain Reduction
In high-gain systems, the inherent time delays along with high AC regulator gain
can contribute to control system instabilities. To prevent these conditions, the
excitation system is stabilized by a transient gain reduction function in the
digital regulator.
Reactive Compensation
Reactive compensation, either droop or rise, is included with the WDR system.
These functions modify generator voltage by regulator action to compensate for
the impedance drop from the machine terminals to a fixed point in the system.
Action is accomplished by inserting vectorially into the regulator a voltage
equivalent to the impedance drop.
Minimum Excitation Limiter
A static minimum excitation limiter prevents excitation reduction in the AC
generator to levels that would result in a loss of synchronism of the AC
generator with the power system. This limiter responds to a two-line kVA
characteristic. The inputs to the limiter are taken from machine potential and
current transformers. The limiter output auctioneers against the voltage sensing
signal output in an auctioneering function for control of the power amplifiers.
The control of the power amplifiers by the limiter prevents the voltage
regulator elements from decreasing machine excitation to levels below the
desired set characteristic value.
Maximum Excitation Limiter
A maximum excitation limiter acts through the regulator to return the value of
excitation to a pre-set value after an adjustable time delay, during which
overexcitation is permitted for field forcing. The limiter operates on an
inverse time characteristic that permits lower values of overexcitation for
longer time intervals and limits higher values of overexcitation for shorter
time intervals. This limiter's output auctioneers with the output of the
auctioneering function in the signal mixer such that reduced excitation is sent
to the firing circuit. At each half cycle of the AC, the excitation level is
checked against an "Instantaneous Pickup Level." If the excitation is above this
value, a correction output is sent to the signal mixer.
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The Maximum Excitation Limiter also can accept up to three (3) contact inputs to
indicate if one or more of paralleled power amplifier thyristor bridges have
failed. This feature provides a "foldback" type of current limiting which
automatically adjusts the pickup to a lower level.
The MXL also is enhanced to provide a "memory" of the time-dependent nature of
the residual and cumulative effects of rotor heating. As the time between
overheating events decreases, the effects of the last heating incident will
steadily increase. This cooling rate is expressed as the "cool-down multiplier",
which is entered in the MXL function as an adjustable parameter.
Volts/Hertz Limiter
The volts/hertz limiter is applied to the excitation system when the station
must operate under adverse circumstances with the system frequency below normal
operating range. In such cases, the reason for operating at reduced voltage
during underfrequency conditions is to avoid the heating effects of excessive AC
current in windings of transformers and other magnetic devices. The input to the
maximum volts/hertz limiter is machine terminal voltage, and its output is a
signal that auctioneers with the positive auctioneering output signal in the
signal mixer in such a manner that whichever reduces excitation is sent to the
firing circuit.
Overvoltage Limiter
This function provides protection from high terminal voltage levels that could
be attained due to a fault condition within the excitation system, or from
severe load rejection conditions that may occur at a hydro station. When machine
terminal voltage is above a programmed pickup level, a limiting signal is sent
to the signal mixer. If the overvoltage condition exists for longer than a
programmed time delay, a "phase-back" command is sent to the firing circuit(s)
to reduce the output of the Power Amplifier(s) to a minimum. This provides
additional protection against overvoltage.
Overexcitation Protection
The overexcitation protection equipment protects the generator field from
excessive thermal stress during a period of overexcitation under both manual and
automatic excitation control.
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This device operates on an inverse time characteristic that permits lower values
of overexcitation for longer time intervals and higher values of overexcitation
for shorter time intervals.
Volts/Hertz Protection
Volts/hertz protection, independent of the volts/hertz limiter, protects the
generator stator core and/or the unit transformer core from possible thermal
damage due to excessive flux density. This device provides alarm and trip
signals if the underfrequency operation reaches low levels without adequate
retreat of machine terminal voltage level. The volts/hertz protection includes
sensing and time delay circuitry. Time delay is introduced into the alarm
function to prevent false alarms due to transient voltage or frequency changes.
The delay for the trip circuit is set long enough to allow the limiter to
function. The volts/hertz protection is left in service when on manual control
of voltage even though the volts/hertz limiter, under these circumstances, is
out of service.
DC Regulator Follower
The purpose of a DC regulator follower circuit is to track the machine field
excitation level and provide a nearly bumpless transfer to DC regulator
operation. The DC regulator follower senses the AC and DC regulator outputs;
when their difference exceeds a pre-set band, it initiates a correction signal
to move the DC adjuster to bring the DC regulator output within the pre-set band
of operation. The follower circuit includes adjustable dead-band and time delay.
Forcing Alarm
A forcing alarm is included. It functions to annunciate generator field forcing
when excitation forcing alarm setpoints are exceeded. Two conditions are
alarmed: 1.) the generator off line and exceeding the no-load excitation
setpoint; and 2.) the generator on line and exceeding the full-load excitation
setpoint. The output of the forcing alarm can be used to inhibit the raise
command above the setpoint.
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Remote Communication
Remote Communication capability provides the operator remote access to the
digital regulator. The remote capability includes access to the digital
regulator operating parameters (gains, time constants, limiting and protective
set points, etc.) which are programmable from the local hand-held terminal, or a
remote IBM - compatible personal computer. The remote capability also includes
the ability to monitor many inputs, outputs, and certain internal quantities, as
well as storage and display of routine data and unusual events.
The remote communication capability includes a software package supplied on a
floppy disk to be loaded into an owner supplied IBM - compatible PC. It also
includes a communication port in the digital regulator. The electrical interface
can be either an RS-232C for short distances up to 50 feet or RS-485 for
distances up to 5000 feet. RS-485 is used in any case where multiple regulators
are to be accessed by a single PC. An optional capability enables communications
via modems over a telephone line or other data communications channels at 1200
to 9600 baud using either the RS-232C or RS-485 standard.
Power Section
Firing Circuits
The AC error is applied through a signal mixing function to the solid state
firing circuits of the power amplifiers. The amplifiers consist of three-phase
thyristor power converter bridges. The firing circuits are synchronized with the
AC supply voltage and the associated thyristors (silicon-controlled rectifiers).
A linear relationship is established in the firing circuits between the WDR
output signal voltage and the power amplifier DC output voltage. The outputs of
the firing circuits are DC pulses, variable from 10 to 170 degrees with respect
to the positive (anode positive) supply to the thyristors.
Power Amplifiers (Converters)
The amplifiers use thyristors in a three-phase full converter bridge
configuration. This configuration applies positive and negative forcing voltage
to the generator field for dual directional forcing of field voltage. The field
current, however, cannot be reversed. The thyristors conduct current once each
cycle at a variable angle in the cycle as determined by
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the amplified error signal from the regulator. The earlier in the cycle that the
thyristors conduct, the greater the amount of energy delivered to the field.
Thus, the regulator controls excitation by varying the output of the power
amplifiers by controlling the associated firing circuits.
The power amplifiers are constructed of drawout module subassemblies to
facilitate maintenance under load. The static excitation system has redundancy
built in which permits machine operation at rated load with one power amplifier
assembly disconnected.
Thyristor Protection
RC snubber networks protect the thyristors against excessive di/dt and dv/dt.
Nonlinear resistor assemblies protect against excessive transient reverse
voltage. Protection against loss of pulse in either firing circuit, and a blown
fuse, in any converter bridge assembly is provided. Surge protection devices
i.e. voltraps, are also included on the thyristor inputs. Thyristor
overtemperature is monitored by thermal sensors embedded in the heatsinks. The
thermal sensors provide overtemperature alarm and trip contacts.
Cooling System
Forced air cooling is supplied by a main fan with a backup fan. The fan is
designed to provide adequate cooling for the entire power cubicle. A fan
transfer circuit is included should the main fan fail. The fans are located in
the top front and top back of the power cubicle. The fan assembly is designed to
allow removal under load.
Additional Features
Power Redundancy
The WDR-2000 includes one spare operating power converter bridge and redundancy
in the +-24 volt power supplies, transformer modules, and firing circuit
modules for the amplifier section. This redundancy is important to assure that
the failure of one of these modules or components does not cause a unit trip.
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Manual Control
The manually controlled DC analog regulator senses DC output current and
regulates that output using the DC adjuster setting as the reference point. Its
output signal directly controls the firing angle of pulses from the firing
circuit to the thyristor amplifier when in the MANUAL mode.
The DC regulator adjuster controls the generator voltage in lieu of the digital
voltage regulator circuits. This function is achieved by controlling the output
of the power amplifiers. Provision is made for smooth transfer of operation from
digital to analog (automatic to manual).
Field Flashing
The Potential Source static excitation system receives all of its energy from
the terminals of the machine it excites. Momentary flashing of the generator
field is needed to build up generator voltage each time the unit is started. A
field flashing package consisting of a two-pole breaker or contactor, a diode
and resistor is included for this purpose. An auxiliary d-c or a-c station
source is required.
Voltage Buildup Module
Voltage buildup circuits are included to provide firing pulses when generator
terminal voltage reaches 20 percent of rated voltage.
Power Supplies Dual Source
The excitation system must operate under extreme ranges of supply voltage. The
Westinghouse static excitation system contains dual sourced power supplies which
provide reliable control power from both the 120 VAC excitation source and the
125 VDC battery. Thus control power is available regardless of machine speed or
terminal voltage.
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Generator Field Ground Detection
A ground in the field of a synchronous machine or alternator should be detected
since the occurrence of a second ground might short circuit part of the field
winding, and the resultant unbalance and vibration may damage the machine.
The function of the ground detector panel is to detect a ground current flowing
from the machine DC field winding to the grounded machine shaft. The ground
detector continuously monitors the machine field, and detects ground currents
ranging from 0.1 ma to 10 ma in 11 selective steps. Two sets of relay contacts
provide remote alarm indication whenever a ground is detected. Provision is also
made for checking the operation of the ground current sensing circuitry by
applying a "simulated ground" to the PC card. The above ground detector panel
may be applied to brush excitation systems at rated generator field voltages up
to 800 V DC.
Rapid De-Excitation
The DC field breaker is not required and is omitted in this proposal.
Consequently, there is no need for a field discharge resistor or field breaker.
An AC supply breaker type DS drawout electrically operated with six (6)
auxiliary contacts will be supplied. The exciter power amplifier is a full
converter (with thyristors in all legs of the three-phase bridge) with the
ability to force down excitation quickly. The field is de-excited by phasing
back the firing pulses to the static exciter amplifier. This action causes the
stored energy in the field to be inverted back to the source, which quickly
reduces the field excitation to zero. Upon loss of AC control, the field energy
will be dissipated very rapidly in the nonlinear resistor permanently connected
across the field.
Loss of Sensing
The purpose of the loss of sensing voltage function is to detect a complete or
partial loss of voltage intelligence to a voltage regulator. The output of this
function is connected in such a way as to transfer the digital regulator from AC
to DC regulation when its potential intelligence is lost.
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If a voltage regulator loses its potential intelligence signal, then the
regulator will drive the excitation of the generator to ceiling. Protection for
loss of potential intelligence to a regulator is desired for faults within the
potential intelligence circuits themselves. Protective operations are not
desired for voltage disturbances caused by external faults or for loss of
voltage from causes other than those within the potential sources. Note that
under a line fault condition, it is desirable to have the regulator boost
excitation; it would be undesirable to have the loss of sensing voltage detector
function operate on this condition as a loss of potential signal and transfer
the regulator. Because of this, it is necessary to discriminate between
conditions of faulty voltages created within the potential measuring circuits
themselves and complete or partial loss of voltage resulting from causes
external to the potential measuring equipment. To accomplish the necessary
discrimination, the loss of sensing protective module requires a three-phase
potential signal from the regulator potential transformers plus an additional
three-phase potential signal from another set of potential transformers that
monitor the same machine (such as the metering potential transformers).
Optional Control And Protective Circuits
Power System Stabilizer
The power system stabilizer provides a supplementary control signal input to a
synchronous machine voltage regulator that improves system dynamic performance.
The stabilizing signal provides positive damping of the electro-mechanical
oscillations that occur as a result of system disturbances. Without
supplementary control, a continuously acting voltage regulator can contribute
negative damping to system swings, and these oscillations may be sustained or
may even increase in amplitude.
The power system stabilizer provides a stabilizing signal proportional to the
deviation in synchronous machine terminal frequency and electrical power. The
polarity of the signal is in the direction to increase excitation for terminal
frequency deviations above normal frequency. The function includes
implementation of the IEEE two-input (power and frequency) power system
stabilizer model, as well as an option to scale and utilize an external PSS
signal.
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SALIENT DESIGN DETAILS
Steady-State Regulation
The rated steady-state sensitivity of the Westinghouse regulating system is
+/-0.5 percent of normal voltage over the operating range from no load to full
load, rated power factor of the AC machine.
Control Circuits
Operation of the switching equipment depends upon a reliable supply voltage for
the various components. For this purpose, the Customer must furnish a reliable
125 volt DC source for control of the breakers and/or contactors as specified in
the Bill of Material.
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Collector System Description
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Collector System Description
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STATIC EXCITATION COLLECTOR
[Drawing of Static Excitation Collector]
OVERVIEW
A complete static excitation system is made up of several components including
the static exciter, voltage regulator, collector ring assembly, and brush
rigging. The collector ring assembly and brush rigging comprise the major
functional components of the collector set.
This document describes the Westinghouse collector set which is used with air
cooled generators. The Westinghouse collector incorporates features which are
widely standard in
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the industry but does so in a small and compact package. The following
paragraphs give a comprehensive description of this equipment.
EQUIPMENT FUNCTION AND FEATURES
The collector's primary function is to transfer DC current from the source of
excitation to the rotating generator field winding. The electrical connections
to the field winding are through a combination of axial and radial leads in the
rotating shaft.
Features of Westinghouse collector sets include:
Installation available for either indoors or outdoors.
Room air cooled with ventilation provided by a centrifugal blower integral
to the collector shaft assembly.
One piece helically grooved, forged steel collector rings with sub-surface
ventilation.
Brush holders, gang mounted in magazine assemblies, utilizing constant
force springs, and with removable insulated handles to facilitate on-line
brush replacement; standardized 4-brush holders.
Class F insulation of DC power circuit components (main leads, brush
rigging, slip ring assembly, and radial, axial, and flexible leads on the
shaft)
An insulating separator between polarities to reduce the risk of short
circuit during brush changing operations.
Silver-plated and bolted DC power circuit joints.
Collector set enclosure (house) for noise reduction, with 120-volt
convenience outlet, interior lighting, access doors, replaceable air
filters, and a noise reducing air exhaust.
Collector set is bolted directly to generator bed plate (no additional
foundation bolting).
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STATIONARY STRUCTURAL COMPONENTS
Collector House
A fabricated heavy gauge steel house is built around the active and rotating
components of the collector set to direct air flow, for safety, and for noise
reduction. Noise reduction is accomplished with sound insulated walls and roof.
Mounted to the house are filters or a separate filter house, the air exhaust
silencer, and light with light switch.
The filters are installed in the air inlet to keep dust and foreign objects from
entering the brush rigging and collector area. The filter system is designed for
easy maintenance.
Ventilation
The collector is ventilated by drawing room air through filters and over the
brush rigging and collector rings. The fan then discharges the air through the
exhaust silencer. By locating the fan at the discharge end of the ventilation
path, the temperature rise of the cooling air due to the fan itself does not
contribute to the temperature of the collector rings and brush rigging.
Fan Shroud
A fan scroll is used to capture air being discharged from the fan and direct
this air to the exhaust silencer.
Exhaust Silencer
A fabricated steel exhaust silencer is attached to the house and connected to
the blower discharge shroud.
Ventilation Baffles for Brush Rigging
Both fabricated steel and glass epoxy baffles and seals are used to direct air
flow through the brush rigging so that brush holders, brush holder supports,
brushes, and collector rings are ventilated.
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Base
The base is fabricated of heavy structural steel. It supports other components
of the collector set. It also provides the rigidity necessary to keep the
collector set aligned. Space heaters are provided in the base to minimize the
occurrence of condensation during shutdown.
Terminal Boards and Terminations
All wiring terminates at a terminal board located in or on the base. Insulated
ring tongue crimp terminals are used for termination.
Main Leads (DC Bus)
Large, solid copper leads, silver plated at connections, are used for connecting
the exciter to the brush rigging.
Grounding Pads
Grounding pads are provided on the collector base and inside the terminal board
area.
BRUSH RIGGING
Brush Holder Magazine with Insulated Handle
The brush rigging will utilize brush magazines of 4-brush. This style of brush
holder allows easy removal of several brushes at a time while the unit is on
line. This design also permits brush changing to be done at a remote location. A
removable, insulated handle is provided for removal and installation of the
ganged brush assemblies. Normally, two handles are provided.
Carbon Brushes
Each brush holder is loaded with graphite composition brushes. Westinghouse
recommends the exclusive use of National Carbon Grade 634 based on our years of
experience with this brush. Each brush is 1" x 1.5" x 4" long, providing about
three inches of brush wear. Expected brush life is six months. The brushes
supplied with the brush holders are pre-radiused for fast wear-in. Constant
force springs designed to comply with this brush grade
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and the expected vibration levels are used. Ordering information for replacement
of the brushes is supplied in an instruction book.
Brush Holder Supports
The wedge holders support the brush holders; these are made of a high strength
Aluminum alloy to prevent galling the surface when extracting and inserting the
brush holder. The wedge holders are fastened to the brush holder supports: two
upright, steel fabrications welded or bolted together, commonly known as
sickles. All of the above parts are silver plated in appropriate areas to
prevent corrosion and to form good electrical contact.
Insulation of Brush Holder Supports
To insulate the brush holder supports (brush rigging), a large piece of
laminated G-11 glass epoxy plate is inserted between the base and brush rigging.
This plate is also used in aligning the brush rigging to the shaft.
ROTATING COMPONENTS
Shaft
The collector shaft is forged as an integral extension of the generator rotor
shaft forging. The axial center is bored with a four (4) inch hole to
accommodate the axial leads. Closely toleranced fit surfaces are machined for
the collector ring insulation over which the collector ring and bushing
assemblies are fit. Radial holes are machined to accommodate radial leads.
Centrifugal Fan
The collector is ventilated with a centrifugal fan made of high strength steel.
The fan is mounted between the rings.
Collector Ring
Forged steel collector rings provide excellent surfaces to minimize ring and
brush wear. Helical grooves provide additional surface for cooling and a means
to remove wear debris
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while maintaining even current distribution across the brush face. The rings are
a one piece design with axial drilled holes for subsurface ventilation.
Collector Ring Insulation
The collector ring and bushing assembly are shrunk onto an epoxy glass tube made
of continuously wound, epoxy resin saturated cloth. The tube itself is first
shrunk onto the shaft with a small amount of interference. The assembly provides
the insulation between the ring and shaft and the distance over the insulation
required to prevent tracking.
Axial Leads
The axial leads connect the radial leads from the slip rings to the generator
rotor winding through another set of radial leads. The leads are located in the
bore of the rotor and are insulated by the "axial lead tube."
Axial Lead Insulation
As indicated above under Axial Leads, an axial lead tube is used to insulate the
axial leads from the shaft. This tube is Class F glass epoxy, filament wound for
durability and excellent electrical properties. The positive and negative leads
are insulated from each other by a pair of tapered wedges also made of glass
epoxy. These wedges are forced together tightly and hold the axial leads firmly
against the tube.
Radial Leads
Radial leads connect the axial leads to the collector rings. Like the axial
leads, these are made from forged zirconium-copper alloy.
Radial Lead Insulation
The radial leads are insulated with a Class F polyamide epoxy which forms a
tight bond to the lead and insulates the lead from the shaft where needed. In
some areas of the lead, no insulation is necessary since the distance between
the shaft and lead is more than the specified "electrical strike" distance.
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Wet Condenser
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Condenser Description
(Side Exhaust Flow Steam Turbine)
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INTRODUCTION
Circulating cooling water flows through the tubes of the condensers, condensing
steam on the outside tube surface. Steam enters the side of each condenser shell
from the double flow, side exhausting steam turbine.
Each condenser is designed to accept full steam production from one (1) HRSG
during steam turbine bypass operation without exceeding steam turbine exhaust
pressure or temperature limitations with full cooling water flow.
EQUIPMENT SUMMARY
o Steam Surface Condensers (Two individual shells with tube bundles and
hotwells)
o Steam Turbine Discharge Flanges (Welded Construction with Expansion Joint)
o Inlet and outlet water boxes for each unit
o 2 x 100% Capacity Steam Jet Air Ejectors with inter/after Condenser
o One (1) Hogging Ejector with Silencer
o Tube Supports / Tube Sheets
o Hotwells with condensate sumps
o Two (2) Turbine/Condenser expansion joints
CONFIGURATION
A two pass, single shell, condenser is provided for each of the two exhaust
openings of the side exhausting, double flow steam turbine. It is designed to
maintain a back pressure within the turbine operating range. The condenser
shells and hotwells are of welded steel construction.
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Turbine Exhaust Expansion Joint
A rubber "belt-type" expansion joint is installed between the condenser neck and
the turbine exhaust connection to allow for thermal expansion.
Hotwells
The hotwells extend the full length and width of each condenser shell and has a
capacity of at least 3 minutes storage level at the design turbine throttle
flow. A manhole for access to the hotwell internals, along with a level gauge
glass are furnished. Condensate stilling chambers for the gauge glass minimizes
surging of condensate and enables more accurate measurement.
Water box
The water boxes are of welded steel construction and are provided with flanged
openings for circulating water inlet and discharge. Flanged manhole covers with
hinges or davits are provided on the water boxes to permit access for
inspection.
Extension Neck
The steam turbine outlet connecting pieces are designed to allow smooth
transition from each of the two turbine outlets to the associated condenser
tubed shell. This section has minimal internal obstructions for negligible
pressure drop. This section is also provided with a manhole to allow access to
shell internals. Exhaust measurement basket tips are located in the upper
connecting piece for accurate measurement of condenser pressure.
Shell
Each condenser shell has a diaphragm or equal type expansion element on each end
to allow expansion of shell and tubes. Appropriate tube support spacing controls
tube vibration while sloped tube bundles allow proper drainage of tubes, when
the tube bundle is out of operation.
Air Removal
The tube bundle also contains an air cooler section to allow venting
non-condensible gases from the tube bundle. The air cooling section is arranged
so that the entire length of the tubes between the tube sheets is active and is
sized so that the temperature of the air vapor mixture leaving the air cooler is
at least 7.5 degrees F below the saturation temperature corresponding to the
absolute pressure at the steam inlet. Air removal piping for the condenser shell
is arranged
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internally and brought to a separate external connection. Air removal is
accomplished by steam jet air ejectors
Tubes & Tube Sheets
Tube sheets are solid titanium, conforming to ASTM Specification B265. Tube
sheets are secured to the condenser shell independently of the bolts for
supporting the water boxes so that the water boxes may be removed without
breaking the joints between the tube sheets and the shell. Carbon steel support
plates are provided to support the tubes and minimize vibration.
The condenser tubes are 25 BWG titanium in accordance with ASTM Specification
B338. Water boxes, shell plate and tube support plates are carbon steel in
accordance with ASTM A283 or equal.
DEAERATION
The condenser itself is capable of deaerating cycle make-up of up to three
percent of the steam turbine exhaust flow, hence no separate deaerator is
furnished in this case. If system make-up exceeds three percent, an optional
vacuum deaerator is required.
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Cooling Tower Description
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Cooling Tower Description
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INTRODUCTION
The cooling tower acts as the plant heat sink for the main circulating cooling
water system and the auxiliary cooling water system.
The function of the circulating water system is to supply cooling water to the
main condenser and auxiliary cooling water system. The heat transferred to the
main circulating water and auxiliary cooling water is removed by a mechanical
draft cooling tower.
The system design is such that pressure surges from hydraulic transients during
startup, shutdown or pump trip will not cause damage to system components.
BILL OF MATERIAL
o Cooling Tower Framing
o Stairway
o Fan Deck
- Perimeter Handrails
- Covering
o Cooling Cell Partitions
o Wind Baffles
o Outer Casing
o Fill
o Drift Eliminators
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o Hot Water Distribution System
o Air Movement System
CONFIGURATION
Circulating water is supplied to the condenser and auxiliary cooling water
system by two vertical, wet pit, nominal 50% capacity, circulating water pumps.
Each pump takes suction from the cooling tower basin and discharges into a
common circulating water header. This header then is divided into headers which
feed the condenser and auxiliary cooling water system. The heated discharge from
each is recombined and the heated water is returned to the cooling tower. At the
cooling tower, the return line is divided into equally sized lines, each of
which services one cooling tower cell. The water enters the cooling tower cells
at an upper elevation through distribution spray nozzles and cascades downward
over the PVC fill, being cooled by the upward air flow induced by the electric
motor driven fan for that cell. This procedure results in a large surface area
of water droplets being in contact with the ambient air drawn into the tower by
the fans, thus increasing cooling efficiency. The water cools due to a number of
processes, but mainly due to evaporation. The cooled water is collected in a
basin at the bottom of the cooling tower structure.
The cooling tower can be bypassed during cold weather operation with returning
circulating water entering directly into the tower basin.
Lost circulating water which results from evaporation, drift and cooling tower
blowdown is replaced by water from the raw/fire water system and is supplied
through the cooling tower makeup line to the cooling tower basin.
COOLING TOWER CONSTRUCTION FEATURES
The cooling tower is constructed of treated wood with PVC fill over a concrete
storage basin. It includes fans, motors, risers, motorized isolation valves for
each cell, connections for the warmed water return lines and instrumentation.
The tower also includes a fire protection
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system, per NFPA-214, lightning protection system per NFPA-78, stairway,
handrails and a ladder with cage.
INDEPENDENT CELL REMOVAL/MAINTENANCE
Each individual cell of the multi cell tower can be removed from service
independently.
Fire Protection
The fire protection system is a dry pipe deluge type with instrument air
pressurized pilot actuation. The system includes temperature sensors, dry pilot
tubing, water piping and sprinklers, hangers, alarm and deluge valve. Activation
of the deluge valve sends an alarm signal to the central control room.
Fan Motors
One (1) totally enclosed fan cooled motor per cell is provided. The motor is a
single-speed design with roller bearings. A vibration detector is provided for
each fan and motor set.
Structural Design
The cooling tower structure and stairways are constructed of treated wood in
accordance with CTI standards WMS-112.
Components and hardware located in high humidity areas are made of corrosion
resistant materials such as silicon bronze, stainless steel, fiberglass, etc.
Nails used to fasten the tower exterior sheathing to wood will be installed with
an elastomeric washer to act as a vibration damper and stress concentration
reducer so that the nail heads do not pull through the sheathing.
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MONITORING & CONTROL
Basin water temperature is monitored to prevent the formation of ice during cold
air temperature operation.
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Mechanical Systems
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System Descriptions
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1.0 SYSTEM DESCRIPTIONS
1.1 Blowdown System Description
1.2 Steam Drains System Description
1.3 Steam System Description
1.4 Condenser Air Removal System Description
1.5 Circulating Water System Description
1.6 Auxiliary Cooling Water System Description
1.7 Condensate System Description
1.8 Feedwater System Description
1.9 Raw Water System Description
1.10 Not used
1.11 Cycle Makeup System Description
1.12 Compressed Air System Description
1.13 Compressed Gas Storage System Description
1.14 Fuel Gas System Description
1.15 Liquid Fuel System Description
1.16 Fire Protection System Description
1.17 Not used
1.18 Selective Catalytic Reaction System Auxiliaries Description
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1.19 Zero Discharge System
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1.1 BLOWDOWN
Function
The Blowdown System receives the continuous and intermittent blowdown streams
from the HRSGs and accompanying kettle boilers, vents the flashed vapor to
atmosphere, and delivers the blowdown wastewater to the cooling water system.
Major Components
The Blowdown System shall consist of the following major components:
o Blowdown tanks (1 for each HRSG)
o Piping, valves, piping specialties and instrumentation.
System Description
The Blowdown System removes impurities from the water in the HRSG evaporators
and the kettle boilers which cool the CT rotor cooling air. The Blowdown System
includes all equipment necessary to receive the continuous and intermittent
blowdown streams from these units.
Blowdown from the HP steam drums is cascaded continuously from the HP steam
drums to the respective IP kettle boilers. Continuous blowdown from the IP
kettle boilers is cascaded to the LP kettle boilers. Continuous blowdown from
the LP kettle boiler and intermittent blowdown from the evaporator headers shall
be discharged to the respective HRSG blowdown tank where a portion of the
blowdown flow is flashed to steam and vented to the atmosphere. IP and LP drum
continuous blowdown is not required because of the large percentage of
continuous outflow of feedwater from each. Other drains from the HRSG shall be
manifolded into common headers to the blowdown tank. The water in the blowdown
tank is cooled by auxiliary cooling water. The cooled effluent is then drained
by gravity.
The Blowdown System includes sufficient capacity to provide for blowdown of the
HRSGs at all firing levels.
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The blowdown tanks shall be vertical, free standing, base supported type
designed and constructed in accordance with the requirements of the ASME Boiler
and Pressure Vessel Code, Section VIII. The tanks have tangential shell inlet
connections above the water level with a circumferential wear plate in the area
of the inlet connections. The tank shall have access for inspection and
cleaning.
Blowdown piping and valves shall be sized for the maximum calculated flow.
Blowdown valves shall be located at the blowdown tank to minimize flashing in
the downstream piping. The blowdown tank and vent shall be of sufficient size to
allow complete flashing of the maximum calculated HRSG drain flows.
Drains from the blowdown tanks shall be gravity drained.
Design Basis
The system is designed to operate on a continuous basis and to provide
intermittent boiler blowdown during plant transients.
Modes of Operation
During normal operation, drum water quality shall be constantly monitored and
the continuous blowdown flow rate shall be manually adjusted by the operator in
order to maintain drum solids below the required levels. Once a satisfactory
blowdown rate is attained the valve will only be adjusted occasionally or if the
normal load operation is changed for extended periods.
Intermittent blowdown will be performed periodically by the operator to reduce
solids concentration in the lower evaporator headers based on historical
operating trends. During startup of the HRSGs, intermittent blowdown may be
required in order to maintain drum levels.
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1.2 STEAM DRAINS
Function
The function of the Steam Drains System is to protect the steam turbine from
water damage by collecting and conveying the steam and condensate discharged
from the steam turbine drains, steam piping drains, and the gland steam system
drains to the condenser.
Major Components
The Steam Drains System shall consist of single air-operated drain valves and
drain orifices with no isolation valves.
System Description
The Steam Drains System collects and conveys the steam and condensate discharged
from the steam turbine drains, steam valves and piping to the condenser.
The drains shall be grouped to provide approximately the same range of pressure
for the drains discharged to each manifold. When required, high temperature
drain manifolds shall be desuperheated before entering the condenser.
Modes of Operation
The Steam Drains System collects condensate and steam from the following sources
during normal operation dependent on steam turbine casing and plant arrangement:
1. LP casing drain
2. LP gland seal desuperheater drain
3. Gland steam spillover regulator
4. Gland steam piping low point drains
5. IP/LP turbine line drains
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6. HP blanked extraction casing drain
7. IP blanked extraction casing drain
8. Hot reheat valve balance line drain
During normal steady state operation the steam piping drains operate
intermittently.
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1.3 STEAM SYSTEM
MAIN STEAM
Function
The Main Steam System transports high pressure (HP), low pressure (LP) and
reheat (RH) steam from each heat recovery steam generator (HRSG) to the steam
turbine. Additionally, intermediate pressure (IP) steam is supplied to the
combustion turbine for component cooling. The Main Steam System also supplies
steam to the gland steam system and steam jet air ejectors. Full capacity steam
turbine bypass lines provide 100 percent steam turbine bypass capability for all
steam turbine supply headers.
Main Steam System piping drip pots and low point drain lines protect the steam
turbine against water damage by removing moisture produced by condensation in
the main steam piping.
Major Components
The Main Steam System shall consist of the following major components:
o Pressure reducing valves and desuperheaters
o HRSG stop/ check and isolation valves
o Flow measuring equipment
o Piping, valves, piping specialties and instrumentation
System Description
High and low pressure superheated steam normally flows from the respective HRSG
drums to the steam turbine inlet valves. Similarly, IP steam is routed to the CT
steam cooling system for cooling internal CT components. Main steam piping is
continuously sloped from the HRSG superheater outlets to drip pots located near
the steam turbine for removal of condensate from the steam lines. Condensate
collected in the drip pots and low point drains
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is discharged to the condenser via the drain system. Drip pot level controls are
air operated with fail open drain valves for automatic removal of condensate
from the drip pots.
Main steam flow is measured by means of flow nozzles.
A full capacity steam turbine bypass is included from the LP steam header to the
condenser. The HP steam full capacity bypass bypasses steam from the HP header
to the cold reheat header. A hot reheat bypass bypasses steam from the hot
reheat header to the condenser. The HP bypass desuperheating spray water is
supplied from the feedwater system. The LP bypass and reheat bypass
desuperheating spray water is supplied from the condensate system. Attemperator
spray water flows shall be controlled by temperature control valves.
The high pressure steam header supplies steam to the steam turbine. During
startup, steam is also provided to the gland steam system and the steam jet air
ejectors. Steam supplied to the gland steam system and the steam jet air
ejectors is reduced in pressure by a pressure regulating valve and conditioned
by a desuperheater. Desuperheater spray water is supplied from the condensate
system.
The intermediate pressure steam system supplies steam to the CT cooling steam
system. Excess IP steam bypasses this cooling loop and is piped to the cold
reheat steam header.
The low pressure steam system supplies steam to the steam turbine and also
supplies steam to the condenser for sparging the hotwell. The sparging steam is
used at part load conditions to help remove oxygen from the condensate.
Safety valves required for system operation and over pressure protection shall
be provided.
Design Basis
The Main Steam System is sized for the combustion turbine's base firing
operation and is designed to accommodate other operating cases. All steam piping
is specified for the maximum pressure and temperature design requirements,
including transient and upset conditions. The steam piping is sized for the
pressure drop requirements specified to satisfy plant thermodynamic performance
criteria.
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The HP, IP, and LP steam piping systems include provision for venting of
noncondensables and warm-up during startup. In addition, an adequately designed
drain system is provided to remove condensate during startup and low load
operation.
Modes of Operation
During normal operation, main steam flows through the system from the HRSG to
the steam turbine and cold reheat system.
During startup, steam is directed through the full-flow bypass to the condenser
until the lines have been warmed and drained of condensate and the steam turbine
has been warmed using main steam and rolled up to operating speed. High pressure
main steam is supplied to the condenser air ejectors and the gland steam system
until the pressure of the steam in the cold reheat line is adequate for this
purpose.
In the event of a turbine trip, the condenser bypass valves will open to
maintain the desired pressures throughout the system and prevent opening the
Safety Relief Valves.
During oil operation, when the HRSG LP economizer is bypassed, some IP steam is
directed to the LP steam drum to help maintain the pressure in this drum.
REHEAT STEAM
Function
The Reheat Steam System transports cold reheat steam from the HP turbine exhaust
and excess IP steam not used in the CT steam cooling system to the heat recovery
steam generators (HRSG). This system also transports hot reheat steam from the
HRSGs to the IP section of the steam turbine.
Full capacity steam turbine bypasses shall be provided from the hot reheat steam
headers to the condenser for startup and when the steam turbine is out of
service.
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Reheat Steam System piping drip pots and low point drain lines protect the steam
turbine against water damage by removing moisture produced by condensation in
the reheat steam piping.
Major Components
The Reheat Steam System shall consist of the following major components:
o Pressure reducing valves and desuperheaters
o Flow measuring equipment
o Piping, valves, piping specialties and instrumentation
System Description
Cold reheat steam normally flows from the HP turbine exhaust to the two HRSG
reheater sections. A line is provided from the cold reheat header to supply the
gland steam system and air ejectors during normal operation. Piping from the IP
steam headers supply excess CT cooling steam to the cold reheat piping The hot
reheat steam flows from the HRSG reheater outlets to the IP turbine inlet
valves.
The cold reheat steam piping is continuously sloped from the HP turbine outlet
and the HRSG reheater inlets to drip pots located near the steam turbine for
removal of condensate from the steam lines during warm-up of the reheat piping
at startup. Condensate collected in the drip pots and low point drains is
discharged to the condenser via the drain system. Drip pot level controls are
air operated valves (fail open on loss of air) for condensate removal from the
drip pots.
Full capacity steam turbine bypasses shall be provided from the hot reheat steam
headers at each HRSG to the condenser. Pressure control valves and
desuperheaters shall be provided for conditioning of the bypass steam before it
is discharged to the condenser. Reheat bypass desuperheating spray water is
supplied from the condensate system. Attemperator spray water flow is controlled
by a temperature control valve.
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Safety valves required for system operation and over pressure protection shall
be provided.
Design Basis
All steam piping shall be designed for the maximum pressure and temperature
design requirements, including transient and upset conditions. The steam piping
shall be sized for the pressure drop requirements in order to satisfy plant
thermodynamic performance criteria.
The hot and cold reheat steam piping systems include provisions for venting of
noncondensables and warm-up during startup. In addition, an adequately designed
drain system shall be provided to remove condensate during startup and low load
operation.
Modes of Operation
During normal operation, steam flows from the exit of the HP steam turbine,
through the reheat section of the HRSG, and through the hot reheat line to the
IP turbine inlet valves. Steam from the HRSG IP superheater outlet flows to the
CT steam cooling system with excess steam flowing to the cold reheat system. IP
steam that is heated in the CT steam cooling system mixes with the hot reheat
steam from the HRSG. Cold reheat steam is supplied to the condenser air ejectors
and the gland steam system.
During startup, steam is directed through the full-flow bypass to the condenser
until the lines have been warmed and drained of condensate and the steam turbine
has been warmed using main steam and rolled up to operating speed. In the event
of a turbine trip, the condenser bypass valves will open to maintain the
required pressures throughout the system and prevent opening of the Safety
Relief Valves.
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1.4 CONDENSER AIR REMOVAL
Function
The function of the Condenser Air Removal System is to evacuate the condenser
steam space for removal of the noncondensable gases during steam turbine
generator operation and to rapidly reduce the condenser pressure from
atmospheric pressure during plant startup. The vacuum breaker valve allows air
to enter the condenser to reduce the coast down time of the steam turbine
generator after shutdown.
Major Components
The Condenser Air Removal System shall consist of the following major
components:
o Two stage, twin element steam jet air ejectors with inter and after
condensers for holding operation.
o Hogging steam jet air ejector for startup.
o One vacuum breaker valve.
o Piping, valves, piping specialties and instrumentation.
System Description
The condenser exhauster unit shall consist of a two stage, twin element steam
jet air ejector with inter and after condensers, interconnecting piping, and
valves. The steam jet air ejector shall be furnished as a packaged assembly.
Cooling water for the air ejector condenser shall be provided by the condensate
system. A separate hogging steam jet air ejector with a discharge silencer shall
be provided for initial evacuation of the condenser.
Steam for operation of the steam jet air ejectors shall be furnished from the
high pressure (HP) steam system during startup and low load operation and from
the cold reheat header during normal operation. The steam pressure shall be
reduced and the temperature controlled via a desuperheater before it is used by
the air ejectors.
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Piping from the air inlet to the steam jet air ejectors to the condenser air
removal section facilitates the removal of noncondensable gases. The steam jet
air ejectors use steam as the motive force to expel the noncondensable gases and
convey them to the steam jet air ejector condenser at a pressure slightly above
atmospheric pressure. Entrained moisture and motive steam shall be condensed and
drained to the condenser. The air and noncondensables shall be discharged to the
atmosphere.
The condenser vacuum breaker valve shall be located on the condenser shell in a
non-accessible area. The vacuum breaker valve shall be remote actuated from the
control room. Interlocks shall be provided to prevent opening the vacuum breaker
when the steam turbine is in operation.
Design Basis
The steam jet air ejectors shall be sized based on system requirements, but
shall always meet or exceed the recommendations of the Heat Exchanger Institute
standards for steam surface condensers.
Modes of Operation
The condenser air removal system shall have two operating modes: "hogging" and
"holding". Hogging operation shall utilize the hogging ejector for plant startup
where large quantities of air and noncondensable gases are removed from the
condenser before the startup of the steam turbine. Holding involves normal
operation where noncondensable gases are continuously removed from the system at
low condenser pressure.
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1.5 CIRCULATING WATER
Function
The function of the Circulating Water System is to supply cooling water to the
steam turbine condenser and the auxiliary cooling water system. The heat
transferred to the circulating water shall be removed by a mechanical draft
cooling tower. Heat from the auxiliary cooling water system shall be also
removed by the cooling tower.
Major Components
The Circulating Water System shall consist of the following major components:
o Two 50 percent capacity vertical, wet pit, circulating water pumps and
motors.
o Circulating water pump intake pit/cooling tower basin.
o A double shell steam surface condenser for a double-flow, side exhausting
steam turbine.
o One wood frame, counterflow mechanical draft cooling tower. At
Contractor's option a concrete structure may be used.
o Piping, valves, piping specialties and instrumentation.
System Description
The Circulating Water System shall consist of two 50 percent capacity
circulating water pumps, a double shell water cooled condenser, and a direct
contact, mechanical draft cooling tower.
The condenser shall consist of two segregate shells with the hotwells connected
by an equilibrium line. Condenser tube material shall be Titanium.
Water from the cooling tower basin shall be pumped by the circulating water
pumps to the condenser and then to the cooling tower in a single pressurized
piping circuit. The heated cooling water is cooled in the mechanical draft,
direct contact cooling tower.
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The underground circulating water piping shall be precast concrete cylinder
pipe. Above ground circulating water piping shall be uncoated carbon steel.
The cooling tower shall be a wood frame, counterflow mechanical draft cooling
tower constructed on top of the concrete cooling tower basin. At Contractor's
option a concrete tower structure may be used. The circulating water pump pit
shall be located at the end of the basin. A trash rack, removable for cleaning,
shall be located upstream of the circulating water pump pit for protection of
the circulating water pumps from debris in the cooling tower basin.
Design Basis
The circulating water pumps shall be designed in accordance with requirements of
the Hydraulic Institute Standards. The condenser shall be designed in accordance
with the requirements of the Heat Exchange Institute Standards for Steam Surface
Condensers.
The design capacity of each circulating water pump will be based on 50% of the
circulating water flow at the contract plant performance guarantee points,
rounded to the next higher 1000 gpm. The Hydraulic Institute Standards require
the pump manufacturer to allow capacity margin of plus 10% and minus 0%.
Therefore, no additional margin will be included in specifying the pumps. The
design total discharge head (TDH) also will not include additional margin, since
the Hydraulic Institute Standards require the pump manufacturer to meet the
design TDH with margins of plus 5% and minus 0%.
Modes of Operation
During normal operation both circulating pumps are running and circulating water
flows through the condenser, through the cooling tower to the basin and back to
the condenser. Some of the cold circulating water also feeds the auxiliary
cooling system.
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During operation with only one of the two circulating water pumps running, the
plant can continue to operate although at a reduced load.
TYPICAL CIRCULATING WATER PUMP DESIGN FEATURES
Non-Pullout Type Construction with Above Ground Discharge
1.6 AUXILIARY COOLING WATER
Function
The function of the Auxiliary Cooling Water System is to supply cooling water
for various plant equipment heat exchangers. The Auxiliary Cooling Water System
shall be a closed loop system.
Major Components
The Auxiliary Cooling Water System shall consist of the following major
components:
o Two 100 percent capacity auxiliary cooling pumps
o Two plate and frame type closed cooling water heat exchangers
o Piping, valves, piping specialties and instrumentation
o One closed cooling water head tank
o One open water booster pump (if required)
System Description
The open water booster pumps (if required) take suction from the circulating
water supply piping upstream of the condenser and direct circulating water to
the closed cooling water (CCW) heat exchanger. The heated circulating water is
returned to the circulating water return piping downstream of the condenser
discharge.
The auxiliary cooling water pumps pump water to the plants various cooling
loads. The heated cooling water flows to the closed cooling water heat
exchanger, which is cooled by
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circulating water from the open loop. The loop is completed as the cooled water
flows to the suction of the auxiliary cooling pumps.
The primary equipment supplied by the Auxiliary Cooling Water System includes
the following:
o Combustion turbine generator hydrogen coolers
o Combustion turbine lube oil coolers
o Steam turbine/generator lube oil cooler
o Steam turbine generator hydrogen coolers
o Steam turbine EH coolers
o Boiler feedwater pump seal water coolers (if required)
o Boiler feedwater pump lube oil coolers (if required)
o Sample panel coolers
Equipment coolers shall be provided with sentinel relief valves.
Cooling water flow to the remaining coolers shall be controlled by manually
operated balancing valves.
A self-contained pressure regulating valve shall be provided between the
auxiliary cooling water supply and return headers to control the supply header
pressure and for minimum flow recirculation of the auxiliary cooling water
pumps.
Design Basis
The Auxiliary Cooling Water System shall be sized for the plant auxiliary
cooling loads.
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Modes of Operation
During plant operation, the auxiliary cooling water pumps distribute the
auxiliary cooling water to the various heat exchangers to dissipate heat from
the plant equipment.
Only one auxiliary cooling water pump and one closed cooling water heat
exchanger is normally operating. If the pump shuts down, the second auxiliary
cooling water pump is automatically started.
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1.7 CONDENSATE SYSTEM
Function
The Condensate System transfers deaerated condensate from the outlet of the
condenser to the HRSG low pressure economizers and/or the low pressure (LP)
steam drums and maintains the LP drum water level over a wide range of steam
demands. The system also provides flow through the steam jet air ejector
condenser and gland steam condenser.
The Condensate System also provides water for desuperheating bypass steam, steam
for condenser air removal, and gland steam.
Major Components
The Condensate System shall consist of the following major components:
o Three 50 percent capacity vertical can type condensate pumps.
o Piping, valves, piping specialties and instrumentation
System Description
The condenser hotwell supplies condensate by gravity to the suction of the
condensate pumps. A strainer shall be provided in the suction line to each
condensate pump to remove any debris carried over from the condenser.
Condensate shall be pumped by two of the three 50 percent capacity condensate
pumps from the condenser hotwell, through the steam jet air ejector condenser,
gland steam condenser, and to the HRSG LP economizers. During oil operation, the
economizers shall be bypassed and condensate is supplied directly to the LP
steam drums.
The Condensate System also supplies flow to the turbine exhaust hood spray,
condensate pump seals, LP steam bypass desuperheater and gland steam
desuperheater.
A minimum flow recirculation control valve shall be provided to maintain minimum
flow for the condensate pumps during low load and startup operation. The minimum
flow
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recirculation control valve shall be located downstream of the gland steam
condenser to ensure continuous flow through the steam jet air ejector condenser
and the gland steam condenser. The recirculation valves shall be sized to
provide the minimum flow requirements for two condensate pumps operating
simultaneously. The Condensate System also receives feedwater from the fuel gas
preheaters downstream of the gland steam condenser.
A restricting orifice in parallel with a full flow manual isolation valve shall
be provided in the condensate pump discharge piping to prevent condensate pump
runout during initial fill of the condensate system. On initial system start-up,
the full flow isolation valve shall be closed and the entire pump flow shall be
directed through the restricting orifice. When the Condensate System reaches
operating pressure the full flow isolation valve shall be opened.
Design Basis
The Condensate System is designed to provide the maximum condensate demand
during full load operation with both combustion turbines operating.
The design capacity of each condensate pump will be based on supplying 50% of
the maximum condensate flow to be encountered in operation, including turbine
bypass. The pump shut-off head shall be a minimum of 115% of the total head at
design flow and rated speed. The total head of the pump will be equal to the
total discharge head minus the total suction head, plus 5% margin. The pumps
shall be selected with 5% flow margin. Net positive suction head available
(NPSHA) is zero at the pump suction flange. Each pump shall be designed such
that the best efficiency point lies in the flow range between normal and maximum
flow conditions.
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Modes of Operation
During normal operation condensate feeds the HRSG, the steam jet air ejector
condenser and gland steam condenser. Two 50% pumps will be running. During steam
turbine bypass, the condensate system also feeds the reheat and LP bypass
desuperheaters.
In the event one of the condensate pumps shut down, the standby pump is
automatically started to maintain the required flow.
TYPICAL CONDENSATE PUMP DESIGN FEATURES
Motor Driver
Cast Iron Bowls
A743 First Stage Impeller
Bronze Impellers (Add'l Stages)
Keyed Impellers
416 SS Pump Shaft
Bronze Bearings
10LF-20 Fab Steel Discharge Head
John Crane IB BF50 171 Mechanical Seal
Plan 13 Seal Flush Piping - Copper Tubing
3 WSA Adjustable Spacer Coupling
300# RF Discharge Flange
150# RF Suction Flange
Steel Suction Can
Suction Can Vent
Steel Mechanical Seal Housing
416 SS Headshaft
Keyed Lineshaft Couplings
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1.8 FEEDWATER SYSTEM
Function
The Feedwater System transfers heated feedwater from the heat recovery steam
generator (HRSG) low pressure (LP) drums to the respective HRSG high pressure
(HP) and intermediate pressure (IP) drums and also maintains the correct HP and
IP drum water level over a wide range of steam demands. The Feedwater System
also provides feedwater to various desuperheaters, and hot water to the fuel gas
heater.
Major Components
The Feedwater System shall consist of the following major components:
o One (per HRSG) 100 percent capacity horizontal multistage feedwater pumps
with interstage takeoff. (These will be either split-case or segmented
ring section design.)
o Piping, valves, piping specialties and instrumentation
System Description
The feedwater pumps take suction from their respective HRSG low pressure drums.
The feedwater pumps provide the necessary pumping head to supply feedwater to
the HRSG IP and HP steam drums including piping friction losses and differential
static head.
An automatic recirculation control valve shall be provided for minimum flow
recirculation of the feedwater pumps to prevent overheating and cavitation
during startup and low load operation. Due to the configuration of the
interstage takeoff, minimum flow through the high pressure discharge of the pump
satisfies the minimum flow requirements of the interstage bleed and
recirculation flow shall be required at the HP discharge only. The minimum flow
recirculation valve shall be provided with anti-cavitation trim to accommodate
the high pressure drop.
Pump runout shall be prevented during initial fill of the HP feedwater system by
a flow restricting orifice in parallel with a full flow manual isolation valve.
When the HP feedwater
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system is filled, the full flow isolation valve shall be opened, and flow shall
be unrestricted. The IP feedwater runout is limited by a back pressure control
valve which maintains a minimum backpressure on the interstage bleed during HRSG
filling and plant startup. This valve prevents the high pressure stages of the
feedwater pump from being starved by the IP interstage takeoff during initial
system fill.
The feedwater pumps shall be supplied with instrumentation to monitor and alarm
on high bearing temperature. Feedwater pump suction pressure and temperature
shall be monitored and the control system calculates available NPSH. The
available NPSH shall be compared against the manufacturer's required NPSH and an
alarm shall be actuated if measured available NPSH drops below pump required
NPSH for more than 5 seconds. The pump shall be automatically tripped if the
condition persists for more than 30 seconds. Also, the feedwater pump shall be
tripped if the LP drum water level drops below the low-low level set point.
The IP and HP feedwater flows shall be monitored. These measurements along with
drum level and steam flow shall be used in a three element drum level control
algorithm.
The feedwater pumps shall be started by the operator from the central control
room. They shall operate continuously unless shutdown by the operator or tripped
by the distributed control system (DCS). The DCS will alarm and automatically
trip the feedwater pump on the following conditions:
High pump vibration
Low LP drum level
Low pump NPSH available
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The DCS will alarm only on the following conditions:
Low pump flow
Low pump discharge pressure
High bearing temperature
Design Basis
The design capacity of each boiler feedwater pump will be based on supplying
100% of the maximum feedwater flow to be encountered in operation including
turbine bypass. The boiler feed pumps shall have 5% flow and head margin above
the maximum design condition. Each pump shall be designed such that the best
efficiency point lies in the flow range between normal and maximum flow
conditions.
Modes of Operation
During normal operation water is pumped to the IP & HP economizers.
During operation with the steam turbine bypassed, desuperheating water is sent
to the HP bypass steam line.
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TYPICAL HORIZONTAL SPLIT CASE BOILER
FEEDWATER PUMP DESIGN FEATURES
Motor Driver
Speed Increaser, if required
Three Element Grouted Steel Baseplate
12% Chrome Casing
12% Chrome Impellers
420 SS Shaft
Carbon Steel Pressure Studs & Nuts
Cast Iron Inboard & Outboard Bearing Housing
High Pressure Casing
316L SS Dual Take-off
RF Flanged Suction Connection
RF Flanged Discharge Connection
Masonite Flange Covers
Sleeve / Sleeve KTB Bearings
Tri-Land Bearings
Forced Feed Lube Oil System
Vent & Drain Connections
Gib Block
Vibrometer Pad
Bearing Temperature Detector Taps
BSTFM Mechanical Seals
316 SS Pumping Rings
316 SS Flush, Vent, & Drain Glands
1/2" 316 SS Tubing w/ Hoke Fittings
Graham Cooler 4x4C-10/CI CSG/304 Tube
Non-cooled Bearing Housing
Non-cooled Stuffing Box
Coupling - Pump/Speed Increaser
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Coupling - Motor/Speed Increaser
PMC Beta 440DR Vibration Sensor/Switch
Type K Thermocouple Temperature Sensors
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TYPICAL SEGMENTED RING SECTION BOILER
FEEDWATER PUMP DESIGN FEATURES
Baseplate for pump, gear increaser/lube system, and motor
Spacer, gear coupling and disc coupling between motor and gear
Steel coupling guards
12% chrome stage casing
12% chrome impeller and diffusor
12% chrome shaft
Carbon steel pressure studs and nuts
Carbon steel suction and discharge casings clad with 316 SS
Balance water NPT connection (balance line to be returned to the
suction source
One (1) interstage takeoff connection off the second stage for the
IP condition
Crane mechanical seals
Vendor's standard circulation cooling piping with heat exchangers
similar to API Plant 23 and jacket cooling piping similar to API
Plan C
Sleeve radial bearings, forced lubrication
Segment type lift-off device
Vendor's standard lube oil piping with standard sight flow
indicators in each drain line
Balance disc design
One (1) dual element, Type K, thermocouple per radial bearing wired
in conduit to a common base mounted NEMA 4 junction box
One (1) PMC-Beta Model 440 DR vibration sensor/switch with contacts
mounted on each radial bearing
Gear increaser designed to AGMA quality Class II and 1.7 service
factor, with integral lubrication system for gear, BFP and motor
complete with a shaft driven main lube oil pump, shell and tube oil
cooler, single filter, socket welded and flanged carbon steel
piping, high oil temperature switch and low oil pressure switch,
dual scale oil temperature and oil pressure gauges, auxiliary
electric motor driven lube oil pump and AOP switch, and 4 dual
element type K theromocouple probes (1 per bearing) wired to a WP
junction box.
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Note:
1. Gear increaser and auxiliaries are provided, if required.
2. Forced lubrication system is provided, if required.
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1.9 RAW WATER
Function
The function of the Raw Water System is to provide water for cooling tower
makeup, cycle makeup, evaporative cooler supply, fire water and miscellaneous
plant services (e.g. pump seals, washdown).
Major Components
The Raw Water System consists of the following major components:
o Quarry water supply, including 2x 100% (1500 GPM each) forwarding pumps
(floating type) and associated piping to the plant.
o POTW water supply
o Raw water forwarding pumps
o Raw Water / Fire Water Storage Tank
o Piping, valves, piping specialties and instrumentation
System Description
The Raw Water System consists of a pressurized water source supplying water for
cooling tower makeup, evaporative cooling water supply, cycle makeup, fire
water, and miscellaneous plant use. The system operates on a continuous basis
when any of the system users are operating.
Design Basis
The system is designed to provide the maximum required flow to the site from the
water source.
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1.10 NOT USED
1.11 CYCLE MAKEUP
Function
The function of the Cycle Makeup System is designed to supply and store high
quality demineralized water for makeup to the heat recovery steam generator
(HRSG) steam cycle. The Cycle Makeup System also supplies water for the
combustion turbine water injection and combustion turbine water washing.
Major Components
The Cycle Makeup System consists of the following major components:
o One 237,000 galloncondensate storage tank.
o Two 100 percent capacity cycle makeup pumps designed for normal makeup to
the cycle when water is not being injected into the combustion turbine.
o One 100% capacity pump designed to handle makeup to the unit including
water injection to the combustion turbine.
o Piping, valves piping specialties and instrumentation.
System Description
The water supply to the Cycle Makeup System is provided from the cycle makeup
treatment system. The demineralized water from the mixed bed exchangers
discharges to the condensate storage tank.
Two 100% capacity cycle makeup pumps are provided for normal system operations
without water injection to the combustion turbine. The cycle makeup pumps take
suction from the condensate storage tank. An automatic recirculation control
valve is provided for each cycle
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makeup pump for minimum flow recirculation to prevent overheating and cavitation
of the pumps during startup and low flow operation.
A single 100% capacity cycle makeup pump is provided for system operations when
water injection to the combustion turbine is required.
The cycle makeup pumps supply makeup water to the steam cycle. Makeup water is
introduced to the condenser. Normally either the A or B pump operates, and the
other pump serves as backup. Should one pump fail, the backup pump is
automatically started by the DCS.
Condenser makeup flow is controlled by an automatic control valve located in the
makeup supply piping near the condenser. Water for combustion turbine water
injection, water washing and other optional demand requirements is supplied from
a connection on the condenser makeup supply piping upstream of the control
valve.
Excess water in the condenser is returned to the condensate storage tank by a
return pipe from the condensate system. An automatic control valve in the
condensate return line opens when high-high condenser hotwell level is detected.
Design Basis
The system is designed to provide makeup water under all normal operating
conditions. The two 100% cycle makeup pumps are sized to provide adequate flow
and pressure for normal system operations. The single 100% capacity cycle makeup
pump is designed to provide adequate water flow and pressure and is intended to
be used during combustion turbine water injection operation.
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1.12 COMPRESSED AIR
Function
The Compressed Air System supplies compressed air at the required capacity and
pressure for service air and instrument air requirements. The instrument air
system supplies dry instrument quality air, at the required pressure and
capacity to all pneumatic controls, transmitters, instruments, and valve
operators.
Major Components
The Compressed Air System shall consist of the following major components:
o Two full capacity, air cooled, motor driven air compressors, complete with
controls, instrument panel, lubrication system, aftercooler, moisture
separator, inlet filter/silencer, oil separator and unloading valve
o One air receiver
o Two 100% skid mounted refrigeration type air dryers, electric motor
driver, with two coalescing filters.
o Piping, valves, piping specialties and instrumentation
System Description
Each motor driven air compressor is capable of supplying all of the plant
compressed air requirements. Each motor driven air compressor supplies air at
125 psig to the service air receiver. The motor driven compressor shall be a
packaged, oil lubricated compressor complete with motor, controls, instrument
panel, oil pump, oil reservoir, moisture separator, and inlet filter/silencer.
The air receiver shall be provided for compressed air storage and to allow the
motor driven air compressors to cycle. Compressed air from the air receiver
discharges into a supply header that supplies air to the plant air system.
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Air to the instrument air system shall be filtered and dried prior to
distribution into the instrument air supply system.
Each air dryer shall be a 100 percent capacity refrigeration type air dryer
complete with two coalescing filters. The air dryer shall remove moisture in the
air to the instrument air system.
Two series coalescing filters shall be furnished. The coalescing filters remove
water and oil droplets to protect the air dryers. The instrument air must
conform to The Instrument Society of America (ISA) Quality Standard for
Instrument Air (ANSI MC11.1) Requirement.
Design Basis
The Compressed Air System shall be sized to provide enough capacity for the
plant service air requirements as well as the instrument air requirements.
Modes of Operation
During normal operation, either air compressor can provide compressed air to the
system.
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1.13 COMPRESSED GAS STORAGE SYSTEM
Function
The hydrogen system provides a means for supplying hydrogen gas to the hydrogen
cooled generators.
The carbon dioxide system provides a means for storing (by Owner) and
transferring carbon dioxide gas to the generator cooling and purge systems for
generator purging.
The nitrogen system provides a means for supplying nitrogen for inerting the
heat recovery steam generators and main cycle piping during an extended outage.
Major Components
The Compressed Gas System shall consist of the following major components:
o Hydrogen tube trailer
o Hydrogen valve manifold
o Carbon dioxide valve manifold and storage
o Nitrogen valve manifold
o Piping, valves, piping specialties and instrumentation
System Description
The hydrogen gas system provides a parking area for a hydrogen tube trailer for
supply of hydrogen to the plant. The tube trailer shall be connected to a
permanent hydrogen valve manifold, which includes the necessary valving and
instrumentation for supply of hydrogen gas to the generators.
Carbon dioxide gas is required intermittently for the generator cooling and
purge systems.
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Nitrogen gas shall be required intermittently for inert blanketing of the HRSGs
and main cycle steam and feedwater piping during an extended plant outage. A
permanent nitrogen valve manifold is provided which includes the necessary
valving and instrumentation for supply of nitrogen gas to the HRSGs and main
cycle piping systems to be inerted for lay-up.
Relief valves or rupture discs shall be provided where necessary to protect the
system components from over pressurization.
Design Basis
The Compressed Gas System shall be sized to supply compressed gas to all gas
users.
Modes of Operation
The hydrogen gas system is valved in during normal plant operation to provide
normal makeup for the combustion turbine and steam turbine generator cooling
systems.
The CO(2) and Nitrogen system are not used when the plant is operating.
Hydrogen, CO(2), and Nitrogen systems are valved into or out of service by an
operator. Pressure to the generator cooling system, purge system, and shutdown
corrosion protection system will be automatically controlled by the
self-contained pressure regulating valves.
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1.14 FUEL GAS
Function
The plant shall be designed with natural gas fuel as the primary fuel for the
combustion turbine. The Fuel Gas System receives natural gas supplied from the
natural gas supply pipeline at the Facility boundary and transports it to the
combustion turbines.
Major Components
The Fuel Gas System shall consist of the following major components:
o Fuel gas filter separators provided locally at each gas turbine.
o Fuel gas heater.
o 3 x 50% Fuel gas compressors
o Knock out drums
o Piping, valves, piping specialties and instrumentation tied to DCS.
System Description
Natural gas shall be supplied to the Fuel Gas System by a natural gas pipeline
to a single connection location at the Facility boundary. A shutoff valve and
duplex strainer shall be provided in the gas supply piping.
Individual fuel gas heaters shall be provided for heating of the fuel gas supply
to the respective combustion turbines. Natural gas fuel shall be heated using IP
feedwater to approximately 440 degrees F. A liquid separator/leak detector shall
be installed downstream of the fuel gas heater to detect any water in the gas
supply resulting from a leaking fuel gas preheater. On detection of fuel gas
heater leakage, the isolation valves shall close and a bypass valve shall open
automatically to isolate and bypass the fuel gas heater.
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Flow measurement for control and monitoring purposes shall be accomplished by
flow orifices provided with the combustion turbines dry-low NOx combustion
system. Gas pressure to the combustion turbine fuel nozzles shall be regulated
by control valves provided with the combustion turbine packages. A valving
arrangement shall provide positive isolation of the fuel supply system at the
combustion turbine.
Design Basis
The fuel gas supply pressure required for the combustion turbines with dry low
NOx combustors shall be at least 515 psig at the gas turbine connection. The
system shall be sized to handle the maximum gas demand.
Modes of Operation
During normal operation, the system provides fuel gas to the CT boundary.
During oil operation, the system is out of operation.
If required, the combustion turbines can be switched over from gas fuel to
liquid fuel on-line without shutting down the plant.
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1.15 LIQUID FUEL
Function
The Liquid Fuel System receives, stores, and transports liquid fuel for
operation of the combustion turbine
Major Components
The Liquid Fuel System shall consist of the following major components:
o Liquid fuel tank trucks unloading area.
o Liquid fuel truck unloading skid.
o 1 Air eliminator.
o 1 flow totalizing meter.
o 1 Liquid fuel storage tank (double wall with leak detection).
o 1 Liquid fuel forwarding pump skid with two 100 percent capacity pumps and
associated instrumentation, valves, and piping.
o Liquid fuel unloading strainers.
o Piping, valves, piping specialties and instrumentation.
System Description
Liquid fuel shall be delivered to the site by tank trucks and unloaded via the
unloading station to the liquid fuel storage tank. Duplex liquid fuel strainers
shall be provided at the inlet to the unloading station. An air eliminator and
flow totalizing meter are provided at the discharge of the unloading station to
verify liquid fuel deliveries. The plant liquid fuel storage tank shall have a
4,500,000 gallon storage capacity. The liquid fuel storage tank will be a cone
roof, carbon steel, double wall tank on a ring wall foundation(s) with leak
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detection. The tank will be designed in accordance with API 650 (9th edition).
It shall be externally painted.
The liquid fuel tank truck unloading area shall be paved and curbed to contain
and collect a spill from a liquid fuel delivery vessel. The unloading area
containment shall drain to the fuel unloading area sump.
The liquid fuel unloading pumps shall be located within the contained liquid
fuel tank truck unloading area. The unloading pumps shall be provided with
recirculation control to maintain design flow through the pump when the liquid
fuel tank truck is nearly empty and the unloading rate must be throttled to
prevent vortexing and entraining air in the suction pipe.
A fire safety shutoff valve shall be provided in the liquid fuel supply piping
to the combustion turbine. A leak detection device shall be provided with an
alarm in the DCS for detection of a minor leak that would result in a decrease
in liquid fuel level when fuel is not being withdrawn from the tank.
Liquid fuel shall be supplied to the combustion turbines liquid fuel forwarding
pumps from the liquid fuel storage tank. The liquid fuel forwarding system
includes two 100 percent capacity forwarding pumps. Pressure switches shall be
provided in the forwarding pumps suction piping to trip the pumps on low NPSH.
Differential pressure switches on the pump inlet strainers alarm on high
pressure drop across the strainers. Minimum flow protection for the forwarding
pumps shall be provided by continuous recirculation flow orifices at the
discharge piping of each pump.
Liquid fuel pressure and flow to the combustion turbines shall be controlled by
a recirculation valve in the combustion turbine liquid fuel skid which modulates
to control the combustion turbine liquid fuel supply pressure by recirculating
fuel back to the liquid fuel storage tank.
Fuel flow to the combustion turbines shall be measured for control and
monitoring purposes by a speed transducer on the flow divider in the combustion
turbine package. A removable
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spool section shall be provided for installation of customer-supplied flow
verification instrumentation.
Design Basis
The liquid fuel storage tank shall be constructed in accordance with the
requirements of the American Petroleum Institute (API) Standard 650.
Modes of Operation
During normal operation, with the plant burning liquid fuel, the tank forwarding
pumps will be running, supplying fuel to the combustion turbine liquid fuel
skids.
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1.16 FIRE PROTECTION
Function
The Fire Protection System including the fire water system, fixed suppression
systems, detection systems, and portable fire extinguishers, provides all the
required fire protection for the plant.
Major Components
The Fire Protection System shall consist of the following major components:
o Motor driven fire water pump
o Diesel engine driven fire water pump
o Motor driven fire water pressure maintenance pump
o Steam turbine lube oil equipment sprinkler system
o Steam turbine bearing protection sprinkler
o Independent smoke detection system to automatically detect fires and
provide alarm in protected areas
o Portable fire extinguishers, specifically dry chemical and FM200 hand
carried type
o Standpipes and fire hose stations at various locations.
o Instrumentation and control equipment for alarm, indication of equipment
status, and actuation of fire protection equipment
o Piping, valves, piping specialties and instrumentation for the various
fire protection equipment
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System Description
The fire water supply shall be from the combination raw water and fire water
storage tank.
The areas to be protected and the systems to be utilized shall be:
(1) Turbine generator area
The turbine generator area shall be protected by hose stations furnished
and installed in accordance with the requirements of NFPA-14.
(2) Control/computer room
The control room will be protected by hand held fire extinguishers.
(3) Administration building and electrical switchgear room
Portable extinguishers supplied in accordance with the requirements of
NFPA-10 shall be furnished and installed.
(4) Cooling Tower
The cooling tower shall be protected by a dry pipe sprinkler system
furnished and installed for moderate hazard in accordance with the
requirements of NFPA-13. If a concrete structure is provided, no fire
protection is needed or supplied.
(5) Steam Turbine Generator Bearings
The steam turbine generator bearings shall be protected by a preaction
sprinkler system in accordance with the requirements of NFPA-13.
(6) Combustion Turbine and Steam Turbine Lube Oil Equipment
The Steam Turbine Lube Oil Equipment shall be protected by deluge
sprinkler systems when not enclosed. The Combustion Turbine Lube Oil
equipment is enclosed and will be protected by an FM200 system in
accordance with the requirements of NFPA.
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(7) Turbine Enclosures
An FM200 system is furnished and installed in accordance with the
requirements of NFPA-2001 shall be used for protecting the combustion
turbine enclosure.
(8) Combustion Turbine Electrical Enclosure
An FM200 system is furnished and installed in accordance with the
requirements of NFPA-2001 shall be provided for protection of the
combustion turbine enclosed electrical package.
Local fire protection and suppression control panels shall be provided for each
area being protected with all electrical operating and alarm functions required
for the fire detection/suppression system with which it is associated.
The local panels provide remote annunciation of fire detection and suppression
to the central control panel.
Underground yard distribution system will be routed around the Plant inside the
fenceline. The scope includes fire hydrants and valves, post indicator valves,
isolation valves, and all piping. A Diesel Fire Pump, motor driven Fire pump and
Jockey Pump are included.
Concrete fire walls at the main step up transformers are not included. Required
separation is used.
Design Basis
The fire protection water mains shall be designed in accordance with the
requirements of NFPA. All major equipment shall be FM approved or UL listed for
the intended application. The Fire Protection System shall be sized to supply
the required demand.
Modes of Operation
The jockey pump will operate intermittently to maintain the required pressure in
the fire protection system.
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In the event of a large water demand from the system, such as if sprinklers were
activated in a zone, the motor-driven pump will be signaled to start.
If the motor-driven pump does not start due to loss of power or other failure,
the diesel driven pump will start and provide the required flow into the system.
1.17 NOT USED
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1.18 SELECTIVE CATALYTIC REDUCTION (SCR) AUXILIARY EQUIPMENT
Function
The SCR auxiliary system includes equipment necessary to store and inject
ammonia into the combustion turbine exhaust gas upstream of the NOx reduction
catalyst in the HRSG for the purpose of maintaining NOx emissions at the HRSG
stack at the guaranteed level.
Major Components
The primary components in the SCR system are: the catalyst (in the HRSG), the
aqueous ammonia storeage tank, the forwarding skid (2x 100% pumps, where 100% =
capacity for one HRSG), the injection skids (one per HRSG with 2x100% blowers
per skid, where 100% = capacity for one HRSG), the vaporizers (one per HRSG),
the ammonia injection grid (AIG) (one per HRSG) and all interconnecting piping.
System Description
Aqueous ammonia shall be delivered to the site by truck. The storage tank will
hold a 7 day supply of ammonia. The system shall inject ammonia in the proper
quantity into the CT exhaust gas upstream of the catalyst in the HRSG. The
ammonia reduces a portion of the NOx in the exhaust gas so that the overall NOx
level exiting the stack meets the guaranteed level.
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1.19 AES-IRONWOOD ZERO LIQUID DISCHARGE SYSTEM DESCRIPTION
The AES-Ironwood Zero Liquid Discharge (ZLD) system will be designed to
eliminate liquid waste streams. All waste water to the plant will be discharged
as cooling tower evaporation or vapor through plant vents. The solids received
in the waste water or as introduced as chemical additives will be removed by a
system of processes which first concentrate the waste and then produce a
chemical precipitate which is filtered to dryness for ultimate disposal in a
landfill.
The ZLD system will produce demineralize water to the cycle water makeup
treatment system. The product of the cycle makeup treatment system will be of
suitable quality for makeup to the combined cycle.
The water to the ZLD system will be blowdown from the cooling tower. The cooling
tower will be fed a mixture of the effluent from the Lebanon municipal waste
treatment plant and the pumped discharge from the Pennsy quarry in approximately
equal amounts.
The components of the ZLD system are softening, volume reduction,
concentrationi, precipitation and filtering to dryness. Softening is used as
both a pretreatment to SLD and as a scale control measure in the circulating
water system. Softening will allow the circulating water system to contain
higher concentrations of dissolved solids while maintaining the scaling
potential of the water at acceptable levels.
Volume reduction will be achieved by a membrane process, reverse osmosis (RO) on
the attached diagrams. The majority of the RO product is returned to the cooling
tower basin.
The concentrator will use heat to vaporize water from the RO reject stream and
provide a suitable feed for the crystalizer. In the crystalizer, conditions are
maintained at an optimum chemistry from which crystals grow on the surface of
circulating crystalline solids. A sidestream from this unit is filtered with a
plate and frame filter press to prepare solids for ultimate disposal.
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In all cases, the distillate and/or the RO product are used for cycle makeup
system pretreatment. The ion exchange system will be a continuous ion exchange
design to minimize wastewater production in the plant. This design also
precludes the need for using caustic and acid for regenerating the ion exchange
units.
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Civil Engineering
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Civil Engineering
Table of Contents
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SECTION DESCRIPTION PAGE
1.0 SITE WORK AND BUILDINGS................................................ 1
1.1 Scope............................................................ 1
1.2 General Building Requirements.................................... 1
1.2.1 Codes and Standards....................................... 1
1.2.2 Building and Equipment Foundations........................ 1
1.2.3 Combustion and Steam Turbine Generators................... 2
1.2.4 Combustion Turbine Generator Foundation................... 2
1.2.5 Steam Turbine Generator Foundation........................ 2
1.2.6 Heat Recovery Steam Generator (HRSG) Foundation........... 2
1.2.7 HRSG Stack and Stack Foundation........................... 3
1.2.8 Miscellaneous Structures and Foundations.................. 3
1.2.9 Specific Site Conditions Applicable....................... 3
1.3 Building Design Requirements..................................... 3
1.3.1 General Requirements...................................... 3
1.3.2 Loads And Loading Combinations............................ 4
1.3.2.1 Loads............................................ 4
1.3.2.2 Load Combinations................................ 4
1.3.2.3 Floor Loads...................................... 5
1.3.2.4 Wind Loads....................................... 5
1.3.2.5 Seismic Load..................................... 5
1.3.2.6 Other Loads...................................... 5
1.3.2.7 Concrete......................................... 6
1.3.3 Formwork.................................................. 6
1.3.4 Masonry Walls............................................. 6
1.4 Site Infrastructure.............................................. 6
1.4.1 Storm Drainage............................................ 6
1.4.2 Water Supply.............................................. 6
1.4.3 Roads..................................................... 7
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Civil Engineering
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1.0 SITE WORK AND BUILDINGS
1.1 Scope
This section includes the general design criteria for all buildings,
structures, foundations and underground services associated with the
Facility. The Facility is rated as non-essential, Category III with an
exposure factor, thermal factor, occupancy factor and horizontal force
factor of 1.0.
1.2 General Building Requirements
1.2.1 Codes and Standards
The following codes and standards will be used for the design and
construction of the structures and foundations:
1. American Society of Civil Engineers, "Minimum Design Loads
for Buildings and Other Structures", ASCE 7-95.
2. American Institute of Steel Construction, "Manual of Steel
Construction, Allowable Stress Design", Ninth Edition.
3. Metal Building Manufacturers Association, MBMA "Low Rise
Building Systems Manual".
4. All specifications for materials shall comply with ASTM
Standards.
1.2.2 Building and Equipment Foundations
Equipment foundations and building floor slabs will meet applicable
codes.
The buildings and equipment foundations will be designed in accordance
with the soil data obtained from the detailed geotechnical
investigation.
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Foundations and supporting framework for critical rotating or
vibrating equipment will be analyzed statically and for proper
consideration for dynamic loads.
1.2.3 Combustion and Steam Turbine Generators
The combustion turbine generator and steam turbine generator will be
located indoors.
The operating and maintenance area will be at grade and will be
designed to support steam turbine generator maintenance equipment such
as fork lift trucks, cranes, welding machines, etc., as well as to
serve as a laydown area for the turbine generator parts when the
turbine generator is disassembled during repair or during initial
installation.
1.2.4 Combustion Turbine Generator Foundation (CTGF)
The combustion turbine generator foundation (including starting
package, turbine, generator, mechanical package, electrical package
and power train equipment) will be a reinforced concrete material.
The foundation will be designed in accordance with the manufacturer's
static and dynamic loading criteria.
1.2.5 Steam Turbine Generator Foundation (STGF)
The steam turbine generator foundation will be a reinforced concrete
structure. The components of the foundation will be designed to meet
the static and dynamic loading criteria set forth by the turbine
generator manufacturer.
1.2.6 Heat Recovery Steam Generator (HRSG) Foundation
The HRSG and its related equipment will be supported on a concrete
foundation.
The foundations for the HRSG will be reinforced concrete and will be
designed for the loading criteria provided by the manufacturer.
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1.2.7 HRSG Stack and Stack Foundation
The stack will be self-supporting. The stack foundation will be of
reinforced concrete and be designed for all static and dynamic loads
imposed on it by the stack.
1.2.8 Miscellaneous Structures and Foundations
Miscellaneous structures and foundations associated with the plant
facilities will be designed to meet the plant design criteria
specified in this document. Foundations will consist of reinforced
concrete. The ground floor slab will be reinforced concrete and will
be supported on compacted backfill.
Foundations and other miscellaneous equipment support foundations,
such as transformer foundations, tank foundations, will be constructed
of reinforced concrete.
1.2.9 Specific Site Conditions Applicable
Reference Section I, tab c Site Specific/Project Specific Criteria
1.3 Building Design Requirement
1.3.1 General Requirements
The civil design criteria set forth in this document are intended to
govern the design requirements regarding dead, live, and other loads
in the design of buildings and other structures. The loads specified
herein are the minimum loads to be considered in the design. Should
applicable codes be more stringent than minimum loads specified
herein, they will be used in lieu of the minimum load specified in the
design of the plant buildings and other associated structures.
Buildings or other structures, and all parts thereof, will be designed
and constructed to support all loads, including dead loads, without
exceeding the permissible stresses for the materials of construction
in the structural members and connections.
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1.3.2 Loads and Loading Combinations
Climatic loads for the design of plant building and other associated
structures will conform to the local codes as well as industry codes
and standards.
Analysis of all structures will be performed to predict the structural
responses to normal loads. Floors will be designed for minimum live
loads as given in the ASCE 7-95. However, in certain cases these loads
may be greater, depending on the final layout. In such cases these
floors will be designed for the larger loads. The loads and applicable
load combinations for which each structure will be designed will
depend on the conditions to which that particular structure may be
subjected. The loads normally applicable or most likely to be
encountered during normal station operation include:
1.3.2.1 Loads
D = Dead loads or their related moments and forces, including any
permanent equipment loads and hydrostatic loads.
L = Live loads or their related internal moments and forces,
including any moveable equipment loads and other loads that
vary with intensity and occurrence produced by the intended use
or occupancy, but in no case less than minimum uniformly
distributed unit loads specified in the ASCE 7-95.
W, E = Wind & seismic will be in accordance with the ASCE 7-95.
T = Loads, forces, and effects due to contraction or expansion
resulting from temperature changes, shrinkage, moisture
changes, creep in component materials, movement due to
differential settlement, or combination thereof.
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1.3.2.2 Load Combinations
Applicable loads will be considered to act in combination.
Combinations producing the most unfavorable effects in the building,
foundation, or structural members concerned, will be designed in
accordance with ASCE 7-95.
1.3.2.3 Floor Loads
The minimum design floor loads for any structure or element will be
based on the requirements ASCE 7-95.
Floor Floor Loading (psf)
----- -------------------
Walkways, access platforms, 100
stairways and landings
Electrical Equipment rooms 250
and other area floors on
grade
Roof Rain & snow load in accordance
with ASCE 7-95
1.3.2.4 Wind Loads
Wind forces will depend on site wind conditions and shape, size, and
exposure of the structure. The calculated wind loads will always be
taken to act normal to the surfaces to which they are applied. All
structures will be designed to withstand the horizontal and uplift
pressures set forth by the ASCE 7-95. 90 mi/hr wind load will be
utilized for the design basis. Refer also to Section I, tab c.
1.3.2.5 Seismic Load
Refer to Section I, tab c.
1.3.2.6 Other Loads
Other loads used to predict the structural response of structures
include hypothetical loads representing the influence of piping,
including water hammer, and loads at anchor points and electrical
installations not included in the normal dead or live loads. Roof
supporting structures shall be designed for hanging loads of cable
tray and piping as applicable in addition to live loads. Pressure or
suction loads such as
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encountered in ductwork will be taken into account, including dynamic
loads from operating equipment.
1.3.2.7 Concrete
Concrete strength and general controls are to be done in accordance
with ACI.
Typical minimum concrete compressive strength will be 3000 psi.
Calcium chloride or admixtures containing calcium chloride will not be
used.
Where concrete is to be placed by pumping, special consideration will
be given to the concrete mix to provide workability, quality and
strength required for the pumping operation.
1.3.3 Formwork
The design and engineering of the formwork will be in accordance with
ACI 347.
1.3.4 Masonry Walls
Masonry walls will be designed and reinforced in accordance with the
applicable local and industry codes and standards.
1.4 Site Infrastructure
1.4.1 Storm Drainage
Storm water run off flows to the existing surface water drainage
features. The plant will use ditches, collection piping or open
channel for storm drainage. Surface runoff will be directed to a
retention pond. Collected water from the retention pond will be
returned to the cooling tower basin via a return pump. Emergency
surface runoff will exit the pond through an overflow spillway and be
directed to the Pennsy Quarry pond.
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1.4.2 Water Supply
Water supply requirements will be equally divided between two sources.
One source will be pumped water from the Pennsy Quarry pond located
east of Centerline-Prescott road. The second source will be Others
located at the plant fence line.
1.4.3 Roads
Plant entrance roads shall be paved with either Bituminous surfacing
or gravel. Interior plant roads will be crushed stone and gravel.
Surface and base design will be to accommodate the normal plant
traffic.
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Plant Electrical Systems
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Plant Electrical Systems
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INTRODUCTION
The plant electrical equipment is designed to provide a safe, coordinated, cost
effective, reliable, operable, and maintainable power delivery system for the
facility. It provides the necessary equipment for delivery of the generator
power to the switchyard, provides the necessary equipment to support the plant
auxiliary mechanical and electrical equipment, and provides the protection and
control features for the plant. The switchyard is described in a separate
write-up.
The major components of the plant electrical systems are:
o Generator Terminal Equipment
o Generator Isolated Phase Bus Duct
o Generator Step-up Transformers
o Station Auxiliary Transformers
o 6900 V Switchgear
o Secondary Unit Substation
o Auxiliary Transformers
o Motor Control Centers
o Plant Protective Relays
o Battery and Uninterruptible Power Supply Systems
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GENERAL REQUIREMENTS
o Plant Voltages: The generator voltages will be determined by the selection
of the optimal generator frame for the specific application. The
combustion turbine-generators and the steam turbine-generator will be
rated 16 kV. The plant's medium voltage system will be a nominal 6900 V.
The plant's low voltage system will be a nominal 480 V. The switchyard
will be a nominal 230 kV.
o Voltage Variations: The plant design will be based on transmission grid
voltage variations of +/- 5% of nominal 230 kV system voltage. Plant
auxiliary systems will be designed to accept voltage variations of +/- 5%
of nominal system voltages under steady state conditions and +/- 10%
during disturbances. Plant bus voltages may drop to 80% during the
starting of the largest motor on the particular bus.
GENERATOR TERMINAL EQUIPMENT
The line side leads and neutral leads of each generator are connected to Line
Terminal Enclosure and to Neutral Tie Enclosure/Neutral Grounding Cubicle,
respectively. The Line Terminal Enclosure is mounted on structural supports
above each generator. The Neutral Tie Enclosure is mounted directly above each
generator. A cable connection is provided from the Neutral Tie Enclosure to the
Neutral Grounding Cubicle which is located on grade level next to the generator.
The major components of each of these items are:
Line Terminal Enclosure:
o 6 - Voltage Transformers, 18000:120 V
o 3 - Surge Capacitors, 18 kV
o 3 - Metal Oxide Surge Arresters, 18 kV
o 9 - Current Transformers, 12000/5A, C400
o 1 - Space Heater
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Generator Neutral Tie Enclosure/Neutral Grounding Cubicle:
o 1 - Neutral Tie Enclosure including:
o 10 - Current Transformers, 12000/5A, C400
o 1 - Neutral Tie Bus
o 1 - Space Heater
o 1 - Neutral Tie/Neutral Grounding Cubicle Connection Materials
o 1 - Neutral Grounding Cubicle including:
o 1 - Single-Phase, Dry Type Distribution Transformer
o 1 - Secondary Loading Resistor
o 1 - Space Heater
The surge arresters and surge capacitors protect the generator insulation
against surge voltages which originate from the interconnecting system.
The neutral grounding resistor, in conjunction with its transformer, provides
high resistance grounded generator neutral to limit the magnitude of ground
fault currents. The high resistance grounded system limits the fault damage to a
minimum.
ISOLATED PHASE BUS DUCT
Each turbine-generator Line Terminal is connected to its step-up transformer via
isolated phase bus duct having the following ratings:
Isolated Phase Bus Duct:
o Nominal Voltage: 16 kV
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o Basic Insulation Level (BIL): 110 kV
o Main Bus Continuous Current: 12000 A
o Tap Bus Continuous Current: 1200 A
o Cooling: Self Cooled
The main bus run connects its generator Line Side Enclosure to the 16 kV winding
of the generator step-up transformer and is designed and braced to withstand the
short circuit current forces available from the system or from its generator.
The tap bus runs from the main bus to the power potential transformer
(excitation system transformer) and is designed and braced to withstand the
combined short circuit current forces available from the system and from the
generator.
The isolated phase bus duct includes indoor and outdoor straight bus runs,
elbows, terminations, wall penetrations, wall penetration seal off bushings,
expansion joints, and steel support structures required for a complete system.
GENERATOR STEP-UP TRANSFORMER
Outdoor, oil-filled generator step-up transformers are provided to transform the
generators' 16 kV voltage up the electric utility's 230 kV transmission
switchyard voltage level.
The offer includes three (3) separate outdoor, oil-filled, two-winding, step-up
transformers: two for the combustion turbine-generators and one for the steam
turbine-generator.
The step-up transformer ratings are selected to exceed the turbine continuous
ratings, taking into account the proposed power factor. The low voltage windings
are delta connected with 110 kV BIL. The high voltage windings are wye connected
(solidly grounded neutral) with 825 kV BIL. The ratings of the step-up
transformers are:
o Combustion Turbine-Generator Step-up Transformers: 275 MVA, FOA at 65
degrees C rise, 16% impedance on 275 MVA base
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o Steam Turbine-Generator Step-up Transformer: 290 MVA, FOA at 65 degrees C
rise, 16% impedance on 290 MVA base
The following accessories and features are provided with each step-up
transformer:
Accessories:
o De-energized load tap changer
o Sudden pressure relay with alarm and trip contacts
o Pressure relief device with indicator and alarm contacts
o Liquid level gauge with alarm contacts
o Thermometer with alarm and trip contacts
o Current transformers
o Station class, metal oxide surge arresters (3) with mounting brackets on
high voltage terminals, 172 kV (140 kV MCOV)
o Cover mounted high voltage bushings
o Low voltage flanges for isolated phase bus duct connections
STATION AUXILIARY TRANSFORMERS
The plant electrics are supplied through two station auxiliary transformers that
are connected to the 230 kV switchyard by means of a 230 kV, SF-6, dead tank,
power circuit breaker. Each station auxiliary transformer is an outdoor,
oil-filled, three phase, two-winding transformer with the following ratings:
Station Auxiliary Transformer:
o High Side Voltage: 230 kV, 825 kV BIL
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o Low Side Voltage: 6.9 kV, 60 kV BIL
o Power Rating: 15/20 MVA, OA/FA, 65 degrees C rise
o Impedance: 9.0% on OA base (subject to NEMA tolerance)
The following accessories and features are provided:
Accessories:
o De-energized tap changer in HV windings:
- - 2 - 2.5% taps FCAN
- - 2 - 2.5% taps FCBN
o Magnetic liquid level gauge
o Dial type thermometer
o Current transformers
o HV cover mounted bushings
o LV terminations suitable for nonsegregated phase bus or cable connection
o LV neutral grounding resistor, 4000 V, 10 ohm, 400 A for 10 seconds
6900 V SWITCHGEAR
A coordinated line up of 6900 V switchgear is provided within the plant to
service the medium voltage and low voltage systems. This switchgear assembly
consists of metal-clad switchgear and metal-enclosed motor controllers.
Interrupting and maximum fault current ratings are selected to exceed maximum
available fault current from all sources with one station auxiliary transformer
in service. All feeder
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protective relays are microprocessor based devices that monitor three-phase ac
current and make separate trip and alarm decisions based on preprogrammed load
current and/or temperature conditions. These microprocessor relays replace
conventional relays. Similar protection is provided for motor starters which
supply transformers.
The metal-clad switchgear assembly consists of vacuum circuit breakers (two main
breakers, a tie breaker, two combustion turbine starting motor breakers, and
feeder breakers), associated metering and instrument transformers, and a
transition to the medium voltage motor controllers.
The metal-clad switchgear circuit breakers have the following ratings:
Vacuum Circuit Breaker:
o Continuous Current:
o Main Breaker: 2000 A
o Tie Breaker: 2000 A
o Feeder Circuit Breaker: 1200 A
o Motor Starter, 9000 hp: 1200 A
o Nominal/Maximum Voltage: 6.9 kV/8.25 kV
o Basic Insulation Level (BIL): 60 kV crest
o Interrupting Current: 36 kA rms
o Close and Latch Current: 58 kA rms
o Interrupting Time: 5 cycles
Accessories:
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o 1 - Lot Metering Devices and Instrument Transformers
o 1 - Transition Structure to medium volt motor controllers
The switchgear has been engineered to feature a standardized design,
interchangeable parts, rugged construction, and industry-leading vacuum
interrupter circuit breaker technology. Design advances in vacuum circuit
breakers combine reliability, safety, and application flexibility with ease of
installation, operation, and maintenance.
Medium Voltage Motor Starter:
Control and protection for the 6600 V motors rated 250 hp up to 8000 hp are
provide by medium voltage starters. These starters are integrated, complete
assemblies precisely matched to motor ratings. The protective devices in every
motor starter are coordinated with the motor's characteristics to provide
protection from overload to full system capacity faults.
The medium voltage motor starters have the following ratings:
o Continuous Current: 400 A
o Maximum Voltage: 7.2 kV
o Basic Insulation Level (BIL) 60 kV crest
o Unfused Interrupting Rating: 50 MVA
Fused Interrupting Rating 400 MVA
The medium voltage starter provides the user with:
Positive Isolating - Maximum safety
Draw-out Contactor - Ease of maintenance and inspection
CL Fuses - Maximum motor protection
Motor Protective Relay - Complete current protection
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The major components of the motor starters are an isolating switch, the main
vacuum contactors, current limiting fuses, and the control circuitry.
Equipped with a mechanically driven isolating shutter, the positive mechanical
isolating switch completely grounds and isolates the starter from the line
connectors, leaving no exposed high voltage with the door is open. The shutter
mechanism is visible without the removal of any components. The high voltage
door is mechanically locked/closed with the isolating switch handle. The low
voltage section is separated from the high voltage section.
The vacuum contactor employs special main contact materials for minimizing
chopping current, thereby eliminating the need for surge suppression. The vacuum
contactor is front accessible. It is not necessary to draw out the contactor for
contactor coil or electrical interlocks replacement, or to check for contact
wear.
Current limiting power fuses with time/current characteristics for motor service
provide fault protection for the motors. Fuses can be easily replaced without
removing or withdrawing the contactor. An indicator on top of each fuse pops up
when a fault has been cleared.
A low voltage control panel, completely isolated and barriered from medium
voltage, slides out to facilitate wiring and maintenance. The panel includes:
wire channel, motor protection, and pull apart terminal blocks.
The motor protective relay (MPR) is a microprocessor based device that monitors
three-phase ac current and makes separate trip and alarm decisions based on
preprogrammed motor current and temperature conditions. The MPR replaces
conventional short-time and long-time relays, instantaneous overcurrent relays,
and ground relays.
SECONDARY UNIT SUBSTATIONS
480 V low voltage power is provided through a double-ended secondary unit
substation (SUS) or directly to 480 V motor control centers (MCC's) from
auxiliary transformers.
The double-ended SUS receives the auxiliary power from the 6900 V medium voltage
switchgear's feeder circuit breaker, transforms it to 480 V, and distributes it
via metal-
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enclosed low voltage switchgear circuit breakers to the low voltage
MCC's and other loads throughout the power plant.
The secondary unit substation consists of SUS transformers and 480 V
metal-enclosed switchgear. The SUS transformers step down the voltage from 6900
V to 480 V and have a kVA rating compatible with their specific loading. The SUS
transformers are a dry-type, indoor design to suit the application. The low
voltage system is a solidly grounded system. The SUS transformer ratings and
features are:
SUS Transformers:
o Voltage Ratings:
o H Winding: 6900 V, 35 kV BIL, delta connected
o X Winding: 480 V, 10 kV BIL, wye connected with solidly grounded
neutral
o Terminations:
o H Winding: Cable entry
o X Winding: Close coupled to LV switchgear
o Impedance: 5.75% (subject to NEMA tolerance)
o Primary Tap Changer:
o 2 - 2.5% FCAN taps
o 2 - 2.5% FCBN taps
The 480 V switchgear is of the metal-enclosed low voltage switchgear design.
Each breaker will be equipped with a solid state trip unit. The circuit breaker
ratings are as follows:
LV Switchgear:
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o Continuous Current:
o Main Breaker: Sized to match transformer
o Feeder Breakers: 800 A frame and/or 1600 A, as required
o Maximum Voltage: 635 V
o Insulation Level: 2.2 kV rms low frequency withstand
o Interrupting Current: 65 kA symmetrical
The low voltage metal-enclosed switchgear has been engineered to provide safe,
reliable, and economic control and protection of low voltage distribution
systems up to 600 V. The breakers are UL labeled for use in switchgear. Both the
switchgear and circuit breakers are built and tested to applicable NEMA, ANSI,
IEEE, UL and CSA standards.
AUXILIARY TRANSFORMERS
Some plant 480 V auxiliary loads, such as the water treatment MCC's and the
cooling tower MCC's, may be fed directly from auxiliary transformers that step
down the voltage from 6900 V to 480 V and have a kVA rating compatible with
their specific loading.
These auxiliary transformers will be dry-type, indoor or oil-filled, outdoor
designs, as appropriate. The dry-type, indoor auxiliary transformers are similar
to the SUS transformers, except that the low voltage terminations will be
suitable for cable exit. The oil-filled, outdoor auxiliary transformer ratings
and features are:
Outdoor Auxiliary Transformers:
o Voltage Ratings:
o H Winding: 6900 V, 95 kV BIL, delta connected
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o X Winding: 480 V, 30 kV BIL, wye connected with solidly grounded
neutral
o Terminations:
o H Winding: Cable entry
o X Winding: Cable exit
o Impedance: 6% (subject to NEMA tolerance)
o Primary Tap Changer:
o 2 - 2.5% FCAN taps
o 2 - 2.5% FCBN taps
MOTOR CONTROL CENTERS
AC Motor Control Centers are used for power distribution and control of the
various low voltage auxiliary loads of the combustion turbine, steam turbine,
HRSG, auxiliary boilers, and cooling tower.
The MCC's contain combination starter assemblies for motors smaller than 250 hp
and feeder breakers for other auxiliary loads within the plant. The main
horizontal three-phase bus extends to complete length of the structure. It is
supported by non-tracking, glass-reinforced polyester insulators and is
separated from the top-most draw-out units by a horizontal steel barrier. This
barrier prevents accidental contact with the energized bus.
Power is distributed to each vertical section by a three-phase bus, bolted to
the main bus in the top of the section. Full-depth wireways are provided. The
individual starters, up through size 5, are mounted in a draw-out unit
completely isolated from adjacent units. Free floating plug-in stabs, assembled
into molded glass polyester bases are welded to cable connections extending
inside each unit. These stabs make contact with the vertical bus through
openings
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in the vertical barrier separating the bus compartment from the individual
enclosure. Each draw-out unit can be padlocked in a disconnected position, or
easily removed from the structure for maintenance.
Combination starters incorporating motor circuit protectors are supplied for
motors. The motor circuit protector is designed specifically for motor circuits
and provides optimum protection with maximum convenience. Operating on the
magnetic principle, the breaker incorporates three sensors with single trip
point adjustment. In this way, protection is customized for each individual
motor.
DC MCC's are provided for such loads as the combustion turbine's emergency lube
oil pump, and turning gear; for the steam turbine's emergency lube oil pump; for
the station battery and charger; and for the balance of plant 125 Vdc loads.
PLANT PROTECTIVE RELAYS
Metering and protection of the balance of plant electrical equipment against
over loads, short circuits and abnormal operating conditions is provided by the
plant protective relay panelboards. These panelboards incorporate the protection
of the generator step-up transformer, the steam turbine-generator, and the
station auxiliary transformer. 6.9 kV and 480 V feeder protection is provided by
the switchgear that serves those circuits. The plant protective relay
panelboards include the following relays, meters and transducers/outputs:
3 - Generator Protective Relay Panelboards each including:
1 - Beckwith Electric, Model M-3420 Generator Protection System with
the following functions:
1 - Volts/Hertz, 24
1 - Undervoltage, 27
1 - Reverse Power, 32
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1 - Loss of Field, 40
1 - Negative Sequence, 46
1 - Breaker Failure, 50BF (low-side generator breaker application if
applicable)
1 - Inadvertent Energization, 50/27
1 - Voltage Controlled Overcurrent, 51V
1 - Overvoltage, 59
1 - Voltage Transformer Fuse Loss, 60FL
1 - Generator Ground (95%), 59GN
1 - Under/Overfrequency, 81
1 - Generator Differential, 87G
1 - Beckwith Electric, Model M-3430 Generator Protection System with the
following functions:
1 - Backup Distance, 21
1 - Volts/Hertz, 24
1 - Undervoltage, 27
1 - Reverse Power, 32
1 - Loss of Field, 40
1 - Negative Sequence, 46
1 - Breaker Failure, 50BF (low-side generator breaker)
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1 - Inadvertent Energization, 50/27
1 - Overvoltage, 59
1 - Voltage Transformer Fuse Loss, 60FL
1 - Generator Ground (100%), 59GN/27TN
1 - Under/Overfrequency, 81
1 - Generator Differential, 87G
3 - Lockouts, 86G, 86-1, 86BF
1 - Watt-hour Meter
1 - Watt Transducer
1 - Digital Monitor with Serial Link, DM1, with:
1 - Generator Watt Output
1 - Generator VAr Output
1 - Generator Power Factor Output
3 - Generator Current Output
3 - Generator Voltage Output
1 - Generator Frequency Output
1 - Digital Monitor with Serial Link, DM2, with :
3 - System Voltage Output
1 - System Frequency Output
1 - Digital Meter, DM4, with:
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1 - Field Voltage readout
1 - Field Current readout
1 - Automatic Synchronizer System with:
1 - Synchroscope and Lights
1 - Automatic Synchronizer, 25A
1 - Synch Check, 25
The combustion turbine-generator protective relay panelboards are located in
their respective electrical packages. The steam turbine-generator protective
relay panelboard is located in the electrical equipment room.
3 - Generator Step-up Transformer Relay Panelboard including:
1 - Phase Overcurrent protection (three-phase), 50/51T
1 - Ground Overcurrent protection, 50/51NT
1 - Lockout Relay, 86UT
1 - Overall Transformer Differential protection (three-phase), 87UT
2 - Station Auxiliary Transformer Relay Panelboard including:
1 - Phase Overcurrent protection (three-phase), 50/51T
1 - Ground Overcurrent protection, 50/51NT
1 - Lockout Relay, 86T
1 - Transformer Differential protection, 87T
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BATTERY AND UNINTERRUPTIBLE POWER SUPPLY SYSTEMS
125 Vdc is provided to supply power to all dc loads in the plant, including the
CT and ST emergency lube oil pumps, the CT turning gear, the uninterruptible
power supply system, the metal-clad and metal-enclosed switchgear controls,
protective relays, and other miscellaneous dc loads. Three power plant battery
systems are provided: one with each ECONOPAC and one in the electrical equipment
room. The batteries are a lead acid design. Each battery has a nominal voltage
rating of 125 Vdc and is sized for a three hour duty cycle with the following
assumed load durations:
o Emergency DC Motor Loads: 3 hours
o WDPF Control System: 1 hour
o Inverter: 1 hour
o Miscellaneous Control Loads: 3 hours
o Switchgear Trip: 1 minute at beginning of duty cycle
o Switchgear Close: 1 minute at end of duty cycle
A solid state battery charger having a 480 V, three-phase input and an 125 Vdc
output is provided for each ECONOPAC battery system. The plant station battery
system includes two solid state chargers, each having a 480 V, three-phase input
and an 125 Vdc output. Each battery charger size is calculated based on a single
charger having a capability to charge the battery to full capacity in a 12 hour
period while supplying the normal battery loads. Each charger's accessories and
features are as follows:
Battery Charger:
o AC and DC Circuit Breakers
o Output Voltmeter and Ammeter
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o Equalizing Timer
o Float and Equalize Voltage Adjustments
o High and Low AC Voltage Alarms
o High and Low DC Voltage Alarms
o DC Ground Detection Alarm
o Common Alarm for Annunciation
o Surge Protection
The uninterruptible power supply (UPS) system is utilized to furnish power to
the vital ac equipment that must run continuously and in the event of a complete
loss of normal station power. The UPS system uses the station battery and
charger as inputs. The major components of the UPS system are:
UPS System:
o Inverter
o Static Switch
o Manual Bypass Switch
o Regulated Power Conditioner
o AC Distribution Panelboard
The inverter is rated 120 Vac, single-phase output and has a steady-state
voltage regulation of +/-2%, maximum total harmonic distortion not to exceed 5%,
and frequency within +/-0.5 Hz over the normal load and voltage range.
The static transfer switch is sized to continuously carry 125% of the inverter
rated load.
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A manually operated make-before-break bypass switch is included to bypass the
entire UPS system during maintenance without interruption of power to the loads.
The bypass switch is capable of carrying 125% of the UPS system rated load for
up to 15 minutes.
A regulated power conditioner, having the same maximum limits as the inverter
output, is provided as the source of the bypass power.
120 Vac panelboards distribute the UPS and bypass system loads around the plant
through molded case circuit breakers. Thermal-magnetic branch circuit breakers
are rated 20 A, single-pole. Approximately 20% spare branch circuits are
provided.
PLANT LIGHTING DESIGN
Lighting illuminance values for the plant will be designed in accordance with
the recommendations of the Illuminating Engineering Society (IES) for the
electric generating station. Where required by installation location, explosion
proof type fixtures will be used.
PLANT PARTY-PAGE COMMUNICATION SYSTEM
A Gaitronics 5 channel type party-page communication system is provided for the
plant. The system includes handsets for various operating locations and speakers
are located throughout the plant for paging personnel. The equipment type is
selected based on the installation location such as indoor or weatherproof and
explosion-proof where necessary. Typical components of the system are the
following.
o 5 Channel Handsets
o Indoor Wall Mount
o Desk Set
o Weatherproof Wall Mount
o Explosion-proof Wall Mount
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o Speakers with Amplifiers or Drivers
o Indoor Wall Mount
o Indoor Ceiling Mount
o Outdoor Wall Mount
o Line Balance Assembly
o Paging Cable, 16 Conductor
o Speaker Cable, 2 Conductor
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Security System
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Security System
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The Ironwood Power Project Security System will include the following:
Fencing System
1. A perimeter fence enclosing the entire power plant area will be provided
as shown on the general arrangement drawing. The fence will be 8' high,
chain link, wire meshed, galvanized, and will have 3 - strands of barbed
wire on top.
2. A motorized gate will be provided at the entrance to the power plant.
3. A 10x10 guard house will be construed at the entrance gate.
4. Separate fencing will encompass the switchyard.
5. Roadway and exterior building lighting is included for night illumination.
6. Included at the front entrance is a security camera with tilt, pan, and
zoom. The camera will be attached to the guard house enclosed in a weather
tight enclosure. A color monitor will be mounted in the control room for
viewing entrance and exits of the front gate
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Switchyard
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SWITCHYARD
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SWITCHYARD
A 230 kV conventional, outdoor, open-air, radial switchyard design featuring
provision for two outgoing transmission lines is provided. The switchyard
extends from the high voltage terminals of the generator step-up transformers
and station auxiliary transformers to the interface with the electric utility's
two outgoing transmission circuits.
The 230 kV switchyard is designed to accommodate the power and current ratings
required for safe, efficient, and economical operation of the power plant
facility and includes the following major items:
o 1 - Lot steel structures and miscellaneous materials including:
3 - Generator step-up transformer structures
2 - Station auxiliary transformer structures
2 - Transmission line interfaces
1 - Lot bus and equipment support stands
1 - Lot Aluminum bus, 1200 A and 2000 A
1 - Lot stand-off and support insulators
1 - Lot static and ground wire
1 - Lot connectors and miscellaneous hardware
1 - Lot light poles and light fixtures/lamps
o 6 - Station class, metal oxide surge arrester, 172 kV (140 kV MCOV)
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o 5 - Disconnect switch, 242 kV, 900 kV BIL, 1200 A continuous, 64 kA
momentary, three-phase, gang-operated type
o 4 - Disconnect switch, 242 kV, 900 kV BIL, 2000 A continuous, 64 kA
momentary, three-phase, gang operated type
o 5 - Power circuit breaker, 242 kV, 900 kV BIL, 1200 A continuous, 40 kA
short circuit current, dead tank, SF-6 puffer design, with two multi-ratio
current transformers per bushing (12 total) per circuit breaker
o 2 - Power circuit breaker, 242 kV, 900 kV BIL, 3000 A continuous, 40 kA
short circuit current, dead tank, SF-6 puffer design, with two multi-ratio
current transformers per bushing (12 total) per circuit breaker
o 12 - Capacitive voltage transformers 133000:120/69//120/69 V for relaying
and plant metering
o 6 - Revenue metering units (combination single-phase VT and CT instrument
transformers), rated for 230 kV nominal system voltage, 1500/3000A, for
input to electric utility's transmission circuit revenue meters
o 1 - Switchyard relay and meter panel (located in the switchyard control
building for plant use) including:
5 - Sync check relay, 25
1 - Bus under/overvoltage protection, 27/59
7 - Breaker - failure protection, 50BF
1 - Bus over/underfrequency protection, 81O/U
8 - Lockout, 86BF, 86B
1 - Bus differential protection (three-phase), 87B
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7 - Watt transducer, 4-20 mA
7 - Watthour transducer, 4-20 mA
7 - VAr transducer, 4-20 mA
7 - Current transducer (three-phase), 4-20 mA
2 - Voltage transducer, (three-phase), 4-20 mA
o 1 - Revenue metering panelboard (located in the switchyard control
building for electric utility use) including:
2 - Microprocessor based, multi-function revenue meters for primary
metering of the two outgoing transmission circuits
5 - Microprocessor based, multi-function revenue meters for back-up
metering on the facility circuits
o 1 - AC distribution and lighting system (located in the switchyard control
building), including:
1 - 480-120/240 V, single-phase, dry type distribution and lighting
transformer
1 - 120/240 Vac distribution and lighting panelboard
o 1 - 125 VDC power supply system (located in the switchyard control
building), including:
1 - 125 Vdc battery with rack
1 - Battery charger, 120 Vac/125 Vdc
1 - 125 VDC distribution panelboard
The power circuit breakers and disconnect switches can be manually operated in
the switchyard.
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A redundant WDPF DPU drop is provided in the switchyard control building to
allow the plant operators to monitor the status of the switchyard from the
plant's WDPF control system in the plant central control room (CCR). The
switchyard power circuit breakers can be remotely monitored and controlled from
the operators console CRT screens in the CCR. The status of the disconnect
switches, bus voltage, current flow, MVA, MW and power factor are also available
on the operators console CRT screens in the CCR.
The transmission line protective relays and the remote terminal units (RTUs) for
interfacing with the Transmission/Distribution Control Center and with the
Energy Control Center are to be provided by the electric utility. This equipment
will be installed in the switchyard control building.
Optional switchyard arrangements, metering, and protective relaying schemes can
be provided. Westinghouse will work with the Owner and the electric utility to
establish the specific requirements for the switchyard and plant interfaces with
the electric utility.
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Combined Cycle Control
System
----------------------
======================
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Combined Cycle Control System
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The attached document describes a WDPF Control System, which was Westinghouse's
standard control system when the Ironwood project was initially quoted.
Westinghouse Power Generation has since been acquired by Siemens. The Siemens
Westinghouse Power Corporatioin now utilizes Siemens Control Systems as its
standard and would prefer to provide Siemens controls for the Ironwood plant. A
new write-up describing the Siemens controls is being composed and will be added
to this section as soon as it is completed.
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Combined Cycle Control System
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INTRODUCTION
Westinghouse Process Control Division will provide the Westinghouse Distributed
Processing Family (WDPF) of microprocessor based equipment to meet the
requirements for a Combined Cycle Control System. The WDPF is a concept unique
to Westinghouse for plant data acquisition and control. Functions such as steam
turbine, combustion turbine, HRSG, and BOP control are assigned to separate
optional redundant microprocessors which communicate with one another over a
common high speed redundant data highway. Not only is a host computer not
required with this configuration, but additional microprocessor based "drops"
can be added as needed to expand the capability of the system over its entire
life.
The control system for the Westinghouse combined cycle generation plant has been
designed to provide the following features:
o The plant provides plant operating configurations at levels of automation
which provide the user with complete operation of these subsystems:
combustion turbines (CT), Heat Recovery Steam Generator (HRSG), and steam
turbine (ST).
o Startup and loading of the entire plant can be accomplished without risk
to equipment from the central control room.
o Flexibility to accommodate future advances in technology including the
capability to automatically optimize plant operations by the addition of
hardware.
o Color graphic operator stations.
o Installed spare I/O and layout space for additional I/O.
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CONTROL SYSTEM CONFIGURATION
The control system for each gas turbine, HRSG, steam turbine and major balance
of plant equipment (not packaged) utilize redundant microprocessors on a
redundant data highway which permits automatic operation of the complete plant.
The operator is provided with interface equipment, information and display
devices, and protection devices to insure confident, safe and efficient
operation.
The control system, along with associated safety systems, is partitioned
according to major plant subsystems such that each subsystem may be operated
independently, thereby increasing the plant availability and operating
flexibility to meet the needs of the operator.
Using field proven hardware, the control system generates command signals to
devices such as fuel, feedwater and condensate flow control valves, combustion
turbine inlet guide vanes, and display devices as a function of inputs from the
plant sensors and operator inputs.
Control Levels
The standard system allows the operation of major subsystems at two operating
control levels, namely Operator Automatic Control Level and Manual Control
Level.
1. Operator Automatic Control Level
At this level, the system will automatically implement all the monitoring,
controlling, operator's interface and primary information and display
functions for each major subsystem. The system requires that the initial
sequencing of the various major subsystems, and loading, should be the
responsibility of the operator.
2. Manual System Control
The control system, through interactive operator stations, may be utilized
to control selected equipment as long as it does not interfere with plant
protection. Functions required to make the transition from the cold
shutdown condition to the ready-to-start conditions are at the manual
control level and includes operating equipment such as:
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water and fuel supply block valves, boiler drain valves and some motor
control centers.
Central Control Room - Engineer's Console and Operator Stations
The primary man/machine interface on the combined cycle control system is the
Engineers Console. The ECON WEStation is a dual mode terminal consisting of dual
CRT display, keyboard, a dual mode processor with redundant data highway
interface, both fixed media 1 Gigabyte (minimum) hard drive and 32 Megabytes of
RAM, removable media disc drive, and a printer. The WEStation product is based
on the UNIX platform with Solaris 2.X as the operating system. When used in
engineering mode as the system programming terminal, the engineer utilizes a
library of editors, builders, and compilers to produce source code type files of
control algorithms, color and shape libraries, graphic displays, sequence
ladders, logging files, and data base generation. Many of these engineering
functions are implemented via programming aids such as a mouse, graphic tablet,
pull-down menus, fill-in menus, etc. All system files are maintained on the
fixed drive and archived on removable media. All downloading and uploading of
software is achieved by the ECON.
The central control operator station includes two dual screen operator consoles
(4 CRT's) with color graphic displays and interactive operator keyboard required
to control the turbines and water and steam cycle. Each OPCON WEStation is a
terminal consisting of dual CRT display, keyboard, processor with redundant data
highway interface, both fixed media 1 Gigabyte (minimum) hard drive and 32
Megabytes of RAM, removable media disc drive, and a printer so that pertinent
information can be hard-copied.
Data acquisition trending and alarm functions
The HSR /Logger console performs data acquisition for trending purposes and
monitors all data highway information for alarms. The HSR WEStation is a
terminal consisting of a single CRT display, keyboard, processor with redundant
data highway interface, both fixed media 2 Gigabyte (minimum) hard drive and 64
Megabytes of RAM, removable media disc drive, a 1.3 Gigabyte optical disc drive,
and a printer so that pertinent information can be hard-copied.
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The data trending function configuration provides enough processing power for
the HSR to store one month's worth of point data on-line for a moderately
active, 5,000 point application. The operator may select up to eight data points
per window for a displayable and printable trend, and up to 4 trend windows.
Live trends may be plotted as variable vs. time for periods of 1 sec., 3 sec.,
10 sec., 30 sec., 1 min., 5 min., and 1 hour or as x-y variable vs. variable.
The HSR database is pre-selected with individual points assigned a minimum scan
rate of typically 1, 10 or 60 seconds (depending on the anticipated rate of
change). Also each point is assigned either a dead-band which, if exceeded, will
cause the point to be recorded or a change in state for initiating recording of
the point
The alarm function provides a display page which indicates the alarm name, time
of alarm, and alarm priority as defined by the point data base file. Return from
alarm and alarm acknowledge are also indicated. The alarm system also can sort
alarms based on priority and plant area origin if so desired. To facilitate a
quick look at alarm status, a single key will display the three oldest
unacknowledged alarms on a subscreen area without disturbing the displayed
custom control graphic. Alarm messages are prioritized as: status, maintenance,
operational, and trips.
The WDPF graphics displays eliminate the need for a hard-wired alarm annunciator
panel. The alarm annunciator graphic contains 80 alarm "windows" to provide
visual backup to all initial unit alarms being printed on the alarm summary. It
is expected that one CRT display will be dedicated to the alarm graphic.
The WDPF graphics also eliminate the need for a mimic panel. Both high level and
detailed P&ID type displays provide the operator a clear understanding of the
process. Process schematics are overlayed with realtime data to maximize
operator's knowledge of system performance.
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"Tree Structure" graphics arrangement
WDPF graphics are arranged in a hierarchical or tree structure starting with the
unit overall performance summary with branching into each major component, CT,
HRSG and ST. Successive displays show additional detail down to the component
level for critical items.
The following table summarizes the typical distribution of plant graphic
display:
TYPICAL PLANT GRAPHIC DISPLAYS
QUANTITY
GRAPHIC DESCRIPTION ESTIMATED
Plant level summary 1
Steam Turbine Supervisory Instrumentation 5
GT/G control 10
ST/G control 5
Boiler, Feedwater, Burner Management System, Etc. 2-5
BOP including Cooling Tower, Condensate 5-10
Pumps, Medium and Low Voltage Electrical
Equipment, etc.
Condenser 2
Switchyard 1
WDPF equipment located in the main control room include:
1. Two operators' consoles
2. One engineer's console
3. Historical data storage and retrieval drop and logger console
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Local Control System Drops
Some control system drops that perform local control functions and communicate
with other control system drops and the central control room operator consoles,
through the WESTNET II Data Plus Highway, are located locally in the plant.
A. At each CT Electrical Package:
1. Three redundant DPU drops for CT control with Low NO(x) and
associated CT Local Equipment Panel.
B. At the remote equipment room:
1. Two redundant DPU drops for Balance of Plant equipment control.
2. Two redundant DPU drops for ST controls and associated Steam Turbine
supervisory instrumentation cabinet.
3. Two redundant DPU drops for each HRSG control.
4. One redundant DPU drop for Switchyard control
C. Local instrument panels are located throughout the plant containing
transmitters, converters and transducers related to control and monitoring
of the various processes.
D. Balance of plant packages such as: The demineralizer, air compressor
system, gas compressors, burner management, sampling system, waste water
treatment system, etc. will have the supplier's standard controls and will
be interfaced to the plant control for supervisory purposes.
Distributed Processing Units (DPU's):
Each of the DPU's contains control processors and field I/O circuit cards.
Various I/O cards are used to interface to field devices depending on the nature
of the electrical interface signal [voltage, current loop, frequency, contacts,
digital voltage level] and provide "on card" signal processing, calibration, and
fault diagnostics. The DPU's are 125 volt DC powered (except
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for remote I/O cabinets which are 120 V AC powered) and incorporate redundant
power supplies for both the control processors and I/O card cages. Field
redundancy is achieved by multiple sensors and controls which are interfaced to
separate I/O circuits within the DPU I/O section.
Fault tolerance through redundancy is achieved by two general methods: (1)
redundant sensors and controls and (2) various tests for process variable limits
and sensor signal reasonableness. For example, signals from current loop
transducers are tested for a reasonable value of the process variable
[reasonable data] and also for the value of the electrical signal itself [is the
loop current less than 4 milliamperes or greater than 20 milliamperes]. Once the
primary sensor data has been received and tested, it is assigned a quality value
which is used by validation and selection algorithms such as quality averaging
and median selection to derive a selected and validated value for a process
variable.
This approach is typically used throughout the design of the control system in
validation of sensor data to detect alarm conditions and preclude inappropriate
automatic control action. Faults detected in the validation process are used to
reject questionable data from further processing and generate alarm conditions.
Redundant Processor with Identical Hardware and Software
Each of the redundant processors are identical in terms of hardware and software
and they are configured as partners. One partner is initialized as on-line
control and the other as on-line backup. Each processor continuously executes a
number of self-diagnostics and also interrogates the partner control processor.
Any detected fault is alarmed to the operator and an alarm in the designated
on-line control results in immediate and automatic transfer to the designated
backup.
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Data Logging
Plant logs are provided for by the logger. The logger function is provided in
the HSR console and uses the HSR printer. Software on the ECON is used to
generate the logger data base. Logs can be one of two types: periodic or event.
Processing of periodic logs requires definition of points to be logged, interval
at which the points are to be sampled, and the number of samples to be stored
for each print-out. Event logs require definition of sample interval, number of
pre-event samples to be listed, and number of post event samples to be listed.
Also defined is the event or events which trigger the log. As programmed on the
Combined Cycle control system, one periodic log is generated every eight hours.
Various event logs are generated on the turbine start-to-load cycle and on
various upset conditions such as protective load runbacks and turbine trips. Log
definition is quite simple and easily expanded should the user so desire.
Sequence of Events Data
An additional feature of the logger, which requires no special programming, is
the sequence of events [SOE] log. This feature works in conjunction with the
special SOE type QSE Input cards. One 16 input card is provided for each
turbine-generator set, mounted in the associated DPU cabinet.
The QSE card is a purpose built digital input card which has high resolution
time-keeping circuitry. When an input to the QSE card goes into its defined
alarm state, the QSE card time tags the event to the closest 1/8 millisecond of
system time and transmits the point record to the logger. When the logger
receives an SOE alarm, the data is buffered while the logger waits for
additional SOE alarms. When no additional SOE alarms have been received for a
preset period of time, the buffer is sorted based on the time tags and posted to
the printer. Since this is a WDPF system wide feature, the SOE log sequence is
independent of which DPU the SOE alarm originated. If the contact propagation
delay between the actual event and the closure of the contact is known, this
delay may be programmed into the point data base record as a time offset.
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Fault Tolerance
The overriding design goal of the control system is to be fault tolerant where
practical.
CONTROL PHILOSOPHY
The following control philosophy is used on individual major components and
systems. This control philosophy permits efficient plant operation with one
control room operator plus two roving plant operators.
Sufficient operator interface devices are provided at the central control room
consoles to permit safe startup/operation and rapid operator response to plant
anomalies.
It shall be necessary for the roving operator to place some auxiliary equipment
into operation manually at the equipment location or at a motor control center
in order to establish ready-to-start status.
The control system provides sufficient protective features to insure safe
operation. The system has built-in logic and circuitry to alarm, annunciate and
trip as a result of any abnormal operating condition. Logic is employed to
provide interlocks wherever it will improve plant availability and will prevent
the operator from exceeding design limits.
Major safety protection systems are provided independently from the basic
control system, such as overspeed trips, reverse current trip of the generator,
etc. The use of such protection systems is in accord with accepted power plant
practices. Manual trips are provided for all energy input components; e.g., fuel
and steam valves.
Combustion Turbine Control
The combustion turbines are controlled and monitored from the central control
room. The combustion turbine startup is performed after the proper auxiliaries
have been started manually.
Each combustion turbine is controlled by three redundant DPU's (exact quantity
of DPU's to be confirmed during project design phase) located in the electrical
package. These DPU's
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contain the required I/O and logic to allow proper control and monitoring of the
operation of the associated combustion turbine, including the dry low NO(x)
combustion system.
The local equipment panel, also located in the electrical package, houses the
Bently-Nevada vibration monitor, the electronics for flame out detection, the
emergency trip push-button, the electromechanical counters and timers of the
associated combustion turbine.
The combustion turbine control system is designed to start the combustion
turbine in full automatic mode from cold standby to base load if the operator
desires to do so. The basic control philosophy allows the operator to select
from several pre-start modes. These pre-start conditions are selected through
the graphics in the operator consoles in the control room. These modes are:
o Fuel type - gas or distillate
o Voltage regulator mode - auto or manual
o Synchronizer mode - auto or manual
o Spin hold - set or clear, will hold the combustion turbine to 900 rpm
without ignition
o Synchronization hold - set, or clear, will take the CT up to 3600 rpm and
hold speed until the hold is cleared
o Load control - minimum load or base load, will either hold the load to
preselected MW or will go to the unit selected base load (temperature
control)
After these modes have been selected, the operator depresses one button on the
operator's keyboard and the combustion turbine automatically goes through all
the sequences and sequence checks to safely come to synchronous speed. If the
operator had selected automatic synchronization and base load, the turbine will
be automatically sychronized and ramped to base load at the rate dictated by the
boiler.
From this point to Base Load, the following automatic steps are taken.
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o Trigger start condition event log.
o Overlay start sequence display window over pre-start selects.
o Test emergency lube and seal oil pumps. Alarm on fault.
o Engage start device.
o Verify minimum cranking speed, trip on fault.
o Disengage turning gear, enable vibration monitor.
o Verify ignition speed, trip on fault.
o Open overspeed fuel isolation valve, trip on fault.
o Igniters on, open pilot fuel isolation valve, start light off verification
timer, trigger light off event log.
o Verify ignition, trip on fault, overlay start sequence display window with
fuel flow and speed trend window.
o Engage start ramp, trigger acceleration event log.
o Engage acceleration monitor, alarm on low acceleration, trip on extra low
acceleration.
o Accelerate turbine.
o De-energize starting motor.
o Engage blade path spread monitor. Alarm on high spread trip on extra high
spread.
o Disengage acceleration monitor.
o Transition from start ramp to speed reference control. Continue
acceleration on closed loop speed control.
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o Close bleed valves.
o Close generator field breaker.
o Synchronous speed achieved.
o If the synchronizer is set to auto, track raise/lower from synchronizer.
If the synchronizer is set to manual, track raise/lower from operator
keyboard.
o Switchyard breaker closes, enable megawatt control function to pick up
minimum load, trigger loading event log.
o Minimum load achieved. If the selected mode is speed/load follow, the
operator uses the keyboard, raise/lower functions (lower is disabled at
minimum load). If the selected mode is temperature, the system will
increase generator load at the designated load rate until exhaust
temperature reaches the safe limit.
In the event that there is a trip along the ramping or loading of the turbine,
the WDPF self-diagnose feature will capture the fault and display it. The
operator must fix the fault and clear the trip.
Many variations on the above sequence are possible. For example, if partial load
operation is described, the operator could select speed/load control at start up
and hold the raise button down after breaker closure. An alternate method is to
select temperature control mode which will load the machine automatically and
then select speed/load control mode when the desired load point is reached.
Another method would be to load the machine in temperature control mode and
select load hold at the desired load point. The difference between these two
methods is that in speed/load control mode, the operator can adjust the load
point with the raise/lower control pushbuttons while in temperature control mode
the operator raise push-button is disabled. Raising the load point in
temperature control mode is accomplished by clearing the load hold by depressing
the GO push-button.
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Combustion Turbine Protection
The WDPF control system provides machine protection in two methods. The first
method is alarm condition annunciation which implies operator intervention.
Alarms of this priority indicate operational faults which are not severe enough
to warrant automatic adjustment of the current operation point. The second
method are automated actions which affect the current operation point. The
severity of the fault determines the type of action to be activated. These
actions will be one of the following types:
o Fuel Hold. Fuel hold is a protective measure which is engaged if a high
fuel nozzle differential pressure is detected (usually during start up and
acceleration) or from a higher than normal combustor shell pressure
indication with steam injection on. Fuel hold is annunciated to the
operator and clears automatically when the fault condition is removed.
o Auto Unload. Auto unload is a protective measure which is activated on
high blade path temperature spread or high average temperature. Control
action will reduce load until the fault condition clears. If minimum load
is reached, the generator breaker is opened and the turbine held at
synchronous speed for cool down and then tripped. This condition is
annunciated to the operator and cannot be defeated.
o Switchyard Breaker Trip. Switchyard breaker trip results from generator
faults which are recoverable such as reverse power, voltage regulator
trips, voltage balance functions. Control action is to open the generator
breaker and hold the turbine at synchronous speed. Control action is
annunciated.
o Fast shutdown/load dump. These control actions both trip the switchyard
breaker immediately and also shut down the turbine. They differ only in
the length of time between opening the breaker and turbine trip. These
actions are taken based on both generator faults such as ground faults and
turbine faults such as very high blade path temperature spread or severe
over/under speed with the breaker closed.
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o Trip. This control action trips the switchyard breaker and all fuel valves
simultaneously when severe faults such as extra high vibration, extra high
temperature, machine limit overspeed are exceeded.
The above simplified examples of protective control are typical of most
installations and for the sake of briefness are not complete descriptions.
Combustion Turbine Redundancy
Instrument and controls redundancy is based on the following approach:
1. Process variables used only for display of information will normally have
a simplex sensor.
2. Any process variable used for machine control normally uses duplex
sensors.
3. Any process variable used for tripping or control actions that
significantly affect machine output are typically duplex. One exception
would be lube oil supply monitoring which uses a triplex 2 out of 3 voting
scheme.
4. Vibration monitoring is not redundant on the bearing caps. However, each
of the bearings utilize X and Y vibration probes.
HRSG Control
The High, Intermediate and Low Pressure Drums level control will be provided by
feedwater control valves. Single element control is provided for startup and
three-element control for normal operation.
High Pressure Superheater and Reheater Temperature control will be done with
desuperheater attemperation control valves. The Low Pressure Steam Turbine
induction steam line will contain a vent with automatic pressure control valves.
Superheater outlet valves as required by ASME code will be provided. Operator
controls (open/close) for block valve operation will be provided from the
control room console.
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Steam Turbine Bypass Control
A 100% HP steam turbine bypass system is provided. Each bypass valve is
controlled by the DCS to maintain the HRSG HP water carryover pressure prior to
steam turbine start-up. The bypass control system sequences the HP bypass valves
closed as the steam turbine is loaded. Steam temperature control is provided to
desuperheat the HP steam before it goes to the cold reheat piping section.
A 100% IP shall supplement cold reheat. The hot reheat bypass valve is
controlled by the DCS to maintain pressure prior to steam turbine operation. The
steam flow out of the hot reheat bypass valve is sent to a desuperheater where
it is cooled prior to going to the condenser.
A 100% LP steam turbine bypass system is also provided. Each bypass valve is
controlled by the DCS to maintain the HRSG LP water carryover pressure prior to
steam turbine operation. The steam flow out of the LP bypass valve is sent to a
desuperheater where it is cooled prior to going to the condenser.
Steam Turbine Control
The steam turbine is controlled and monitored from the central control room. The
steam turbine startup is performed after the proper auxiliaries have been
started manually and proper steam conditions are established in the HRSG.
The steam turbine is controlled by two redundant DPU's. The first contains the
required logic to perform the Operator Automatic and Overspeed Protection
functions. These include speed and load control by modulation of the governor
valve actuator. HP drum carryover pressure is maintained at a minimum level by
limiting the opening of the governor valve. The IP drum carryover pressure is
maintained by controlling the intercept valves. The LP drum carryover pressure
is maintained by controlling the induction valve. A throttle pressure limiter is
used to prevent water from entering the turbine. The load drop anticipator and
overspeed protection controller prevent overspeed of the steam turbine upon
sudden loss of load.
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The second DPU performs steam turbine generator auxiliaries control and
monitoring functions. These include drain valve control, voltage regulator
control, gland steam control, exhaust hood spray control, and automatic turning
gear control. An alarm is generated if predefined operating limits are exceeded
for any of these inputs. In addition, a graphical representation of each turbine
and auxiliary system is provided to allow the operator to monitor the status of
these systems. All monitored turbine-generator data are available over the WDPF
data highway and can be used by other drops for plant performance monitoring,
historical storage and retrieval, or any other desired function.
The Emergency Trip System (ETS) provides a fast, accurate and effective means of
protection against critical situations which might cause damage to the unit if
it is not immediately taken out of service. The system continuously monitors
critical turbine parameters on a multi-channel basis. If the parameters exceed
the limit of safe turbine operation, all steam valves will close, tripping the
unit. The following parameters are monitored:
o Turbine Overspeed
o Excessive Thrust Bearing Wear
o Low Bearing Oil Pressure
o Low Condenser Vacuum
o Remote Trip
o High Vibration
The entire system is designed for high reliability through the use of redundant
components, including three overspeed channels and redundant hard-wired trip
logic.
The Turbine Supervisory Instrumentation (TSI) system is a reliable multi-channel
monitoring system that continuously measures the mechanical operating parameters
of a turbine
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generator shaft and case. The system displays machine status, provides outputs
for recorders, and initiates alarms when preset operating limits are exceeded.
The following parameters are monitored or measured by the TSI system:
o Relative rotor vibration (two plane)
o Peak-to-peak and direct (instantaneous) eccentricity
o Relative axial position of the rotor thrust collar with respect to the
thrust bearing support (rotor position)
o Axial rotor growth between rotating and stationary parts (differential
expansion)
o Zero speed indications for engaging turning gear
The TSI system consists of racks of Bently Nevada Corporation 3300 series
instruments and transducers with associated wiring. Transducers include probes
connected to proximitors. Power input wiring and transducer field wiring are
supplied and installed by the project constructor.
The instrument racks are mounted in the TSI and Emergency Trip System Cabinet.
Transducers are mounted to observe shaft markers, collars, and other machine
surfaces. Each probe is connected by a coax extension cable to an associated
proximitor.
The proximitors are located near the probes and are connected to corresponding
rack signal modules by shielded field wiring. The system keyphasor transducer is
connected to the Power Supply Module in each Rack that contains vibration
monitors.
The instrument racks hold a power supply, the system monitor, and the TSI
monitors. Relay modules and signal modules are located at the rear of each rack.
Relay modules connect to external alarm annunciation devices, and signal modules
connect to associated transducers and recorders. A module containing the power
supply signal and power inputs is also located in each rack.
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Operator Automatic System
Operator automatic is the normal mode of operation for the system. The operator
automatic portion of this system is implemented using the Operator's console in
the central control room.
Through the Operator's console, the system accepts a speed or load target as
well as a selected rate. The operator entered target and rate are checked to
ensure that they will not cause any damage to the unit before they are accepted.
These checks include verification that the speed target is not in a known blade
resonance range, that the rate does not violate the maximum allowable rate as
dictated by the turbine mechanical design, and other criteria.
After a rate and target have been accepted, the operator can start or stop the
speed or load ramp through the panel/CRT interface. The OPERATOR AUTO section
will calculate a valve position demand and pass this setpoint onto the servo
cards. The operator can revert control bumplessly (without change in turbine
valve position) to the manual mode at any time by pressing one button. If a
malfunction is detected in the operator automatic logic, control is bumplessly
and automatically transferred to the backup processor.
Some of the functions performed by operators include:
- - placing the speed feedback loop in/out of service
- - placing the megawatt feedback loop in/out of service
- - selecting the control mode (operator automatic, remote or automatic
synchronizer)
- - entering a speed/load target
- - entering a speed/load rate
- - performing a valve test on all inlet stop valves (MSV, RHS and
Interceptor)
- - adjusting the valve position limit
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Condensate and Drum Level Control
Hotwell level control is provided via modulation of makeup water flow with
hotwell feedback.
Three 50% condensate pumps are provided for supply of condensate from the
condenser hotwell to LP drum. The condensate system shall provide control valve
will have three-element (LP) drum level controls.
A two combined high pressure and intermediate pressure boiler feed pump takes
suction from the LP drum. It provides feedwater to the HRSG IP and HP drums.
Remote Start/Stop for Pumps
Condensate and boiler feed pumps start-stop capability is provided in the
central control room Operator's consoles using control graphic pushbuttons.
PLANT OPERATION AND STARTUP
The sequence of startup varies only slightly depending upon whether the turbine
is cold, warm or hot.
The startup sequence is as follows:
1. Place the combustion and steam turbines on turning gear.
2. Start the HRSG water cycle prior to combustion turbine ignition.
o Open all drains.
o Check hotwell water level.
o Start condensate pump.
o Check low pressure drum water level.
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o Start boiler feed pump.
o Check Intermediate pressure drum for prestart water level.
o Check high pressure drum for prestart water level.
o Place all HRSG control valves into automatic mode.
o Check water chemistry.
3. When all HRSG trips have been cleared and the water cycle has been
started, then the combustion turbine may be started.
o Place all combustion turbine motor controls into automatic mode.
o Start condenser circulating water pumps and cooling tower fans.
o Start the combustion turbine.
- The turbine will be accelerated up to ignition speed by the
starting motor.
- Ignition will be automatically sequenced and the turbine will
be accelerated up to synchronous speed.
o Automatic and manual synchronization modes are provided for operator
selection use.
o The combustion turbine may be loaded at normal loading rates.
o Inlet guide vanes are automatically positioned for heat rate
optimization and steam temperature control.
o Normal startup operations will sequentially start the combustion
turbine/HRSG set with steam cycle startup as discussed below.
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4. Steam Cycle Startup
o The HRSG startup will proceed with minimum operator supervision as
the combustion turbine is loaded.
o Steam pressure will rise first in the high pressure drum and the
intermediate pressure drum then in the low pressure drum.
o Steam will be provided from intermediate pressure drum for
combustion turbine transition cooling.
o When the HRSG is started, steam flow at low pressure is used to warm
the main steam header.
5. Steam Turbine Startup
o Initial steam flow bypasses the steam turbine via the ST bypass
valves.
o When adequate header steam pressure is available, the gland steam
pressure regulator is activated.
o Air-ejectors are put into service after gland steam pressure is
established.
o The steam temperature will be automatically controlled by the HRSG
superheater and reheater temperature control. Temperature is
maintained in the operational bank required to match the steam
turbine rotor for turbine roll off turning gear and acceleration.
o The operator initiates steam turbine acceleration to the prescribed
schedule.
o The steam turbine will normally be loaded under sliding pressure
drum pressure control. The control system will provide an adaptive
sliding pressure throttle pressure control.
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o If the steam turbine rotor is cold prior to startup, a heat soak may
be required.
WDPF INTERFACE PROVISIONS
Automatic Generation Control
Automatic Generation Control (AGC) will be provided for each combustion
turbine-generator and for the steam turbine-generator. AGC allows for limited
control of the power plant from a remote dispatch facility or a system operating
center.
The AGC system will provide input/output (I/O) data or command exchange for the
following types and quantities of signals.
6 - Momentary digital inputs
5 - Maintained digital inputs
14 - Maintained digital outputs
2 - Analog outputs
NORMAL SHUTDOWN
Combustion Turbine shutdown is initiated with a single push-button operation.
When "Normal Stop" is selected, the WDPF control system will reduce generator
load at the designated load rate. When minimum load is reached with normal stop
selected the generator breaker is opened and the turbine is held at synchronous
speed for a three minute cool down period. After the cool down period, all fuel
valves (throttling and isolation) are closed and the turbine coasts to stop at
which time the turning gear is engaged.
Normal stop can be cleared at any time by pressing the keyboard GO push-button.
This feature allows the normal stop push-button to be used to automatically
lower generator load in part load operation.
MINIMUM DISPATCH LOAD
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Traditionally, the Combustion Turbine Emissions permit level has been the
limiting factor in determining the minimum load for a combined cycle power
plant.
Without considering permitted emissions level as the limiting factor, the
minimum dispatch load becomes the lowest stable load at which a plant can be
operated on Automatic Generation Control (AGC). AGC requires that the entire
combined cycle plant is placed in automatic mode. This means that the Plant
Control System, the combustion turbines, and the steam turbine (with the
Throttle Steam, HRH Steam, IP Steam and LP inductions in service) are
automatically controlled.
For the plant to support fully automatic operation in combined cycle, the steam
turbine must be at 25% of its rated capacity. Stable operation with the throttle
steam, reheat steam, intermediate pressure steam and low pressure steam systems
are not fully commissioned and in a controllable state to support automatic mode
until 25% load has been reached. Until 25% steam turbine load is reached the
Plant Control System and the plant operators are trying to stabilize pressures
in the boiler(s) drums, initiate low pressure induction steam to the steam
turbine among other operational considerations.
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Acoustics
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Acoustics
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NEAR FIELD SOUND LEVELS
90 dB(A) Average Near Field Sound Level
Measured at One (1) Meter (3 Feet) from Major
Component Surfaces
The spatially averaged near field A-weighted sound level resulting from the
operation of the two-on-one (2 X 1) combined cycle plant consisting of two (2)
501G combustion turbines and one (1) steam turbine shall be 90 dB(A) or less, in
a free field environment, when measured on the near field source envelope
contour located one (1) meter (3 feet) from major surfaces of equipment and/or
enclosures, at a height of one and one-half (1.5) meters (5 feet) above the
ground or floor level for the combustion turbines, as shown in Figure 1, one and
one-half meters (5 feet) above the operating platform for the steam turbine
generator, as shown in Figure 2, and one (1) meter (3 feet) from major surfaces
of the cooling tower and circulating pumps at a height of one and one-half (1.5)
meters (5 feet) above the ground as shown in Figure 3. The plant operating
conditions shall be with the combustion turbines and steam turbine operating at
steady state base load conditions, exclusive of transients, startup and
shutdown, steam bypass, atmospheric venting, and other off normal and emergency
conditions, the sound level contributions of equipment not supplied under this
contract, and when measured using a procedure based upon the Siemens
Westinghouse Sound Test Procedure Principles. Appropriate corrections, in
accordance with the Siemens Westinghouse Sound Test Procedures Principles
document and recognized industry standards, shall be made to the operating
equipment near field sound level measurements. The acoustical guarantee applies
strictly to the equipment shown to be located within the indicated source
envelope contours and is exclusive of equipment which may be added to the
Siemens Westinghouse scope at a later date or which may be located within the
vicinity of the indicated source envelope contours.
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[Drawing: Figure 1 501G Combined Cycle Near Field Source Envelope Contour]
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[Drawing: Figure 2 Steam Turbine Near Field Source Envelope Contour]
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[Drawing: Figure 3 Cooling Tower Near Field Source Envelope Contour]
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FAR FIELD SOUND LEVEL
63 dB(A) Average Sound Level
Measured at Four-hundred (400) Feet (122 Meters) From The Sound Source Envelope
The spatially averaged A-weighted sound level resulting from the operation of
the Siemens Westinghouse scope-of-supply equipment shall be 63 dB(A) or less, in
a free field environment, when measured at a horizontal distance of four hundred
(400) feet (122 meters) from the equipment sound source envelope as shown in
Figure 4 below, at a height of five (5) feet (1.5 meters) above ground level
over flat unobstructed terrain in a free field environment, with the combustion
turbines and steam turbine operating at steady state base load conditions,
exclusive of transients, startup and shutdown, steam bypass and other off normal
and emergency conditions, contributions of equipment not within the Siemens
Westinghouse scope of supply, and when measured using a procedure based upon the
Siemens Westinghouse Sound Test Procedure Principles. The sound source envelope
for far field sound level measurements is defined as the smallest rectangle
completely enclosing all of the equipment included in the Siemens Westinghouse
Scope of Work. Appropriate corrections, in accordance with the Siemens
Westinghouse Sound Test Procedures Principles document and recognized industry
standards, shall be made to the operating plant far field sound level
measurements.
The far field average sound level is a function of the plant general arrangement
and site location within the property boundary. Therefore, any revision in the
Project scope of supply, equipment general arrangement, or the location of the
Project site within the property boundary as shown in the Siemens Westinghouse
Preliminary drawing G5010212 Revision 12 and as shown in Figure 4, as the
Project develops will require evaluation and may require revision to the far
field sound levels and the sound level warranty.
Furthermore, while the plant design is consistent with achieving an average far
field sound level of 50 dB(A) or less at the AES and Parson's identified
location RP-3 as located on Parson's Drawing AESI-I-DW-110-002-002 Revision A
dated 2-25-98, this far field location and the 50 dB(A) sound level are excluded
from the far field sound level warranty.
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[Drawing: Figure 4 Far Field Measurement Locations]
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SOUND LEVEL COMPLIANCE TESTING
All acoustic compliance testing will conform to the "Siemens Westinghouse" Sound
Test Procedures Principles Document, 21T5672. The Siemens Westinghouse procedure
generally conforms to recognized industry standards such as ANSI S12.36, ANSI
S12.34, ANSI B133.8 and ISO 6190. The sound test procedure will define the
environmental correction factors and test margins expressed as instrumentation
tolerance and measurement uncertainty applicable to A-weighted sound levels.
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General Arrangement
---------------------------
===========================
<PAGE>
[DIAGRAM - LEGEND]
<PAGE>
Flow Diagrams
---------------------------------
=================================
<PAGE>
[*] The following 48 pages have been omitted and filed separately with the
Securities and Exchange Commission as part of a Confidential Treatment
Request.
<PAGE>
Electrical Diagrams
---------------------------------
=================================
<PAGE>
[*] The following 5 pages have been omitted and filed separately with the
Securities and Exchange Commission as part of a Confidential Treatment
Request.
<PAGE>
Control System Diagram
---------------------------------
=================================
<PAGE>
[CHART: Control System Diagram]
<PAGE>
Water Balance Diagram
---------------------------------
=================================
<PAGE>
[CHART: Attachment A Conceptual Flow Diagram]
<PAGE>
[CHART: Attachment B Conceptual Flow Diagram]
<PAGE>
Gas Fuel Specification
---------------------------------
=================================
<PAGE>
[*] The following fifty-four (54) pages have been omitted and filed separately
with the Securities and Exchange Commission as part of a Confidential
Treatment Request.
<PAGE>
Raw Water Analysis
---------------------------------
=================================
<PAGE>
BASIS FOR DESIGN OF COOLING AND CYCLE MAKEUP WATER
TREATMENTS SYSTEM FOR AES IRONWOOD
The following information and data shall be used as the design basis for the
water treatment systems for AES Ironwood.
INFLUENT WATER
The water source for the plant is assumed to by a mixture made up 50% with water
from the Pennsy Quarry and 50% from the POTW. The maximum use of either of the
sources in any case shall be 1500 gpm.
The chemical analysis of each of these sources is as follows:
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Proprietary Information Page 1 AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Constituent, mg/l POTW Quarry Makeup
except as noted Mixture
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
pH, standard units 7.2 7.7 7.5
- ------------------------------------------------------------------------------------------
Specific Conductance, 25C,uS/cm 773 534 654
- ------------------------------------------------------------------------------------------
Total Suspended Solids, ppm less than 10 less than 10 less than 10
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
P-alkalinity, as CaCo3 0 0 0
- ------------------------------------------------------------------------------------------
M-alkalinity, as CaCO3 45 237.9 141.5
- ------------------------------------------------------------------------------------------
Sulfur, total as SO4 92 68 80
- ------------------------------------------------------------------------------------------
Chloride, as C1 69 18.5 43.8
- ------------------------------------------------------------------------------------------
Phosphate, Total as PO4 2.6 0 1.3
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Nitrate, as NO3 132 0 66
- ------------------------------------------------------------------------------------------
Silica, Total as SiO2 8.6 9.4 9
- ------------------------------------------------------------------------------------------
Calcium, Total as CaCO3 166 221 193.5
- ------------------------------------------------------------------------------------------
Magnesium, total as CaCO3 38 87 62.5
- ------------------------------------------------------------------------------------------
Sodium as Na 54 10.8 32.4
- ------------------------------------------------------------------------------------------
Aluminum, Total as Al 0 0.3 0.15
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
Barium as Ba 0 0.039 0.02
- ------------------------------------------------------------------------------------------
Boron as B 0.33 0 0.165
- ------------------------------------------------------------------------------------------
Iron, Total as Fe 0.3 0.38 0.34
- ------------------------------------------------------------------------------------------
Manganese, Total as Mn 0.076 0.014 0.045
- ------------------------------------------------------------------------------------------
Potassium as K 14.8 2.8 8.7
- ------------------------------------------------------------------------------------------
Strontium as Sr 0.12 0.5 0.31
- ------------------------------------------------------------------------------------------
Vanadium as V 0 0.016 0.008
- ------------------------------------------------------------------------------------------
Zinc, Total as Zn 0.035 0 0.018
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</TABLE>
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Proprietary Information Page 2 AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
Significant flows for use or consumption in the plant and processes are as
follows:
Cooling tower evaporation : 2615 gallons/minute
Cooling Tower drift: 7 gpm
Evaporative combustion air cooler: 100 gpm
Steam cycle losses, including boiler blowdown: 44 gpm
Other minor losses will occur as moisture in solids streams from Zero
Discharge units and softeners if supplied.
The above constitute consumption for the base case which assumes natural gas as
fuel.
In the case of oil firing, for a period limited to a maximum of 40 days per
year, an additional consumption of demineralized water up to a maximum of 500
gpm is assumed.
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Proprietary Information Page 3 AES IRONWOOD CONTRACT
FINAL ISSUE - OCTOBER 30, 1998
<PAGE>
Generator Curves for
Ironwood Project
----------------------------
============================
<PAGE>
[*] The following seven (7) pages have been omitted and filed separately with
the Securities and Exchange Commission as part of a Confidential Treatment
Request.
<PAGE>
CT Inspection Intervals /
Equivalent Operating Hours
--------------------------------
================================
<PAGE>
[*] The following seven (7) pages have been omitted and filed separately with
the Securities and Exchange Commission as part of a Confidential Treatment
Request.
<PAGE>
Econopac Paint Specification
----------------------------------
==================================
<PAGE>
REFERENCE PAINT SPECIFICATION
Rev.
Prepared by: /s/ C. J. Buzard 03/08/96
---------------------------------------------- -------------
C. J. Buzard, Senior Engineering Technician Date
Environmental Engineering and Services
Reviewed by: /s/ F. J. Mendohia 03/07/96
---------------------------------------------- -------------
F. J. Mendolia, Senior Engineer Date
Environmental Engineering and Services
Reviewed by: /s/ A. Moulavi 03/08/96
---------------------------------------------- -------------
A. Moulavi, Engineer Date
Environmental Engineering and Services
Approved by: /s/ R. A. Putnam 03/08/96
---------------------------------------------- -------------
R. A. Putnam, Technical Leader Date
Environmental Engineering and Services
Reference: 21T4306, 21T3456, 21T4628
---------------------------
WBS: 198
-----
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This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
Refers to 21T6847 Rev. 2 DISTRIBUTION CODE: 270-000-600
- --------------------------------------------------------------------------------
TITLE:REFERENCE PAINT SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE ELECTRIC CORPORATION
Issue Date: 07/18/95 Page: 1 of 14
POWER GENERATION BUSINESS UNIT - ORLANDO, FL
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
Review Level: 5
---
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
Refers to 21T6847 Rev. 2 DISTRIBUTION CODE: 270-000-600
- --------------------------------------------------------------------------------
TITLE:REFERENCE PAINT SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE ELECTRIC CORPORATION
Issue Date: 07/18/95 Page: 2 of 14
POWER GENERATION BUSINESS UNIT - ORLANDO, FL
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
REVISION SHEET
- --------------------------------------------------------------------------------
REISSUE
REVISION DATE SECTION DESCRIPTION OF CHANGE
- --------------------------------------------------------------------------------
001 07/18/95 All Original Issue
- --------------------------------------------------------------------------------
002 03/08/96 1.0 Added Note to "Scope". Included combustion and
steam turbine auxiliary equipment in Scope.
- --------------------------------------------------------------------------------
2.0 Added new paragraph to
include electrical
equipment exemptions.
Added HPU to exemptions.
- --------------------------------------------------------------------------------
3.0 Added Note to 3.1.1.
- --------------------------------------------------------------------------------
4.1 Added Profile tape to
measure Blast Profile.
- --------------------------------------------------------------------------------
Added note.
- --------------------------------------------------------------------------------
5.2 Corrected key index 13 to 12.
- --------------------------------------------------------------------------------
8.0 Added new paragraph for Touch-up Paint
instructions.
- --------------------------------------------------------------------------------
9.0 Add Paragraph on MSDS, Material Safety Data
Sheet.
- --------------------------------------------------------------------------------
Table 1 Corrected field paint key for item #10. Add Item
42, EH System.
- --------------------------------------------------------------------------------
Table 1 Removed Item 39, Line
Side and Neutral Cubicle
and Item 40, Generator
Breaker Enclosure.
- --------------------------------------------------------------------------------
Table 2 Added Note and "*".
- --------------------------------------------------------------------------------
Table 2 Added Note, and "Section" to Item 6. Added Items
15 and 16.
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This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
Refers to 21T6847 Rev. 2 DISTRIBUTION CODE: 270-000-600
- --------------------------------------------------------------------------------
TITLE:REFERENCE PAINT SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE ELECTRIC CORPORATION
Issue Date: 07/18/95 Page: 3 of 14
POWER GENERATION BUSINESS UNIT - ORLANDO, FL
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
REVISION SHEET .................................................... 2
1.0 SCOPE ....................................................... 4
2.0 RELATED ITEMS NOT INCLUDED .................................. 4
3.0 CODES AND STANDARDS ......................................... 5
4.0 SURFACE PREPARATION ......................................... 6
5.0 APPLICATION INSTRUCTIONS .................................... 6
6.0 GENERAL REQUIREMENTS ........................................ 7
7.0 QUALITY ASSURANCE REQUIREMENTS .............................. 7
8.0 TOUCH-UP PAINT .............................................. 7
9.0 MATERIAL SAFETY DATA SHEETS (MSDS) .......................... 8
TABLE 1 PRIMERS AND FINISHES ...................................... 9
NOTES ............................................................. 11
TABLE 2 KEY INDEX ................................................. 12
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
Refers to 21T6847 Rev. 2 DISTRIBUTION CODE: 270-000-600
- --------------------------------------------------------------------------------
TITLE:REFERENCE PAINT SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE ELECTRIC CORPORATION
Issue Date: 07/18/95 Page: 4 of 14
POWER GENERATION BUSINESS UNIT - ORLANDO, FL
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
1.0 SCOPE
1.1 This specification defines the painting requirements as they
apply to the 501D, 501F, 251B, 701F and 701D combustion turbine
models and combustion turbine and steam turbine auxiliary
equipment. This document is for reference only and should not be
used to order material. Since paint thickness on hot surfaces is
critical, components should not be refinished for appearance.
Damaged surfaces should be repaired only at the damaged site.
This specification includes but is not limited to the following:
Note: Should there be a conflict between this specification
and those referenced herein, this specification governs.
1.1.1 Shop cleaning and priming of exposed surfaces
1.1.2 Coating of machined surfaces for protection during
shipment
1.1.3 Furnishing touch-up finish paint for shop finished
equipment
1.1.4 Field finishing as required (see Section 5.2)
2.0 RELATED ITEMS NOT INCLUDED
2.1 This specification does not include painting requirements for
the following:
2.1.1 Tank and equipment linings
2.1.2 Pipe and valve linings, except as specifically
identified
2.1.3 Surfaces for immersion service
2.1.4 Power or Excitation Transformers, Excitation Cubicles,
Neutral Grounding Cubicles, Generator Breaker
Enclosures, Lineside Cubicles, and Excitation Busses.
2.1.5 Hydraulic Pump Unit (HPU)
2.2 The following shall not be shop painted:
2.2.1 Nameplates
2.2.2 Surfaces to be embedded in concrete, unless otherwise
specified
2.2.3 Machined surfaces except for special protective
application (see Section 5.3)
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
Refers to 21T6847 Rev. 2 DISTRIBUTION CODE: 270-000-600
- --------------------------------------------------------------------------------
TITLE:REFERENCE PAINT SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE ELECTRIC CORPORATION
Issue Date: 07/18/95 Page: 5 of 14
POWER GENERATION BUSINESS UNIT - ORLANDO, FL
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
2.2.4 Areas of surfaces within four inches of edges to be
field welded except for special protective coating
application (see Section 5.4)
2.2.5 Items made of galvanized steel, stainless steel,
aluminum, bronze, copper, or other non-ferrous
materials, unless otherwise specified.
2.2.6 Expansion joints
2.2.7 The interior of liquid fuel and natural gas piping
2.2.8 Machined external moving parts of the Inlet Guide Vane
(IGV) assembly
3.0 CODES AND STANDARDS
3.1 The following codes and standards are incorporated as a part of
this specification. The latest edition, revision, or effective
date shall be used except where specified.
3.1.1 Steel Structures Painting Council (SSPC) Steel
Structures Painting Manual, Volume 2, Systems and
Specifications, specifically:
SP 1 Solvent Cleaning
Note: Solvent cleaning, SSPC-SP1, is not a suitable
surface preparation if mill scale is present. If
SP1 is to be used, the Vendor must insure that
the mill scale is removed and the surface
profiled to meet the conditions of Section 4.0
of this specification.
SP 2 Hand Tool Cleaning
SP 3 Power Tool Cleaning
SP 5 White Metal Blast Cleaning
SP 6 Commercial Sand Blast Cleaning
SP 10 Near-White Blast Cleaning
PA 1 Shop, Field and Maintenance Painting
3.1.2 U.S. Government Military Specification for Corrosion
Preventative Compound, Solvent Cutback,
Cold-Application. MIL-C-16173
3.1.3 American National Standards Institute (ANSI) A159.1
3.2 The following Westinghouse specifications are incorporated as a
part of this specification. The latest edition, revision, or
effective date shall be used except where specified.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
Refers to 21T6847 Rev. 2 DISTRIBUTION CODE: 270-000-600
- --------------------------------------------------------------------------------
TITLE:REFERENCE PAINT SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE ELECTRIC CORPORATION
Issue Date: 07/18/95 Page: 6 of 14
POWER GENERATION BUSINESS UNIT - ORLANDO, FL
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
3.2.1 21T5802 Supplier Quality Requirements
3.2.2 21T5673 Supplier Data Requirements
3.2.3 83603HA Process Specification, Gray Enamel Finish
3.2.4 83603QA Process Specification, Inorganic Zinc Finish
3.2.5 83342WZ Process Specification, Protective Painting
System for Corrosion and Oxidation Resistance for Gas
Turbine Components
4.0 SURFACE PREPARATION
4.1 In general, all structural and miscellaneous steel, including
enclosures, inlet ductwork, exposed piping and carbon steel
exposed to inlet air shall be cleaned prior to coating in
accordance with SSPC-SP 6 or SSPC- SP 10. Refer to Table 1 for
specific requirements. The blast profile shall be 1-2 mils as
measured with a Keane-Tator Surface Profile Comparator or
equivalent. A surface profile tape can also be used to measure
surface profile. (Press-O-Film tape developed by TESTEX, Inc. is
an example; equivalents are also acceptable.)
Note: Do not confuse "Blast Profile" with "Blast Cleaning".
Blast profile is a depth measurement of the blast
cleaning process.
4.2 Blast cleaned surfaces shall be primed within 8 hours to prevent
rusting. If high humidity exists, the surface shall be primed as
soon as possible.
5.0 APPLICATION INSTRUCTIONS
5.1 Silicone Acrylic Enamel Finish
Thin the first coat with #1131 thinner at a rate of 20% (see Key
Index #4). Xylol may be used as an emergency substitute. The
surface may be repainted in 4-6 hours under normal conditions.
In the event of high humidity, wait 12 hours or overnight before
repainting. The total finish (two coats) shall be 3 mils (dry).
CAUTION: DO NOT PAINT METAL THAT IS DAMP OR IN TEMPERATURES
BELOW 50 degrees F. Refer to the specific paint Material Safety
Data Sheets and SSPC-PA 1 for the proper spray equipment and
procedures for paint application.
5.2 Zinc Primed Enclosure Interior Walls - Field Finishing
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
Refers to 21T6847 Rev. 2 DISTRIBUTION CODE: 270-000-600
- --------------------------------------------------------------------------------
TITLE:REFERENCE PAINT SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE ELECTRIC CORPORATION
Issue Date: 07/18/95 Page: 7 of 14
POWER GENERATION BUSINESS UNIT - ORLANDO, FL
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
When the auxiliary equipment enclosures are erected at the
installation site, portions of the exterior of the enclosures
fit into cutouts of mating units, thereby becoming interior
walls at these locations. Finish these wall surfaces as follows:
a. Clean and degrease thoroughly. Allow to dry before
painting.
b. After cleaning, apply 2 coats of waterborne acrylic
primer (see Key Index #12). Allow to air dry.
5.3 All machined surfaces shall be protected with MIL-C-16173, Grade
1 type preservative or acceptable alternative. The minimum
thickness shall be 4.0 mils.
5.4 Surfaces within 4 inches of field weld ends shall be protected
with one coat of Deoxaluminate, as manufactured by AACCO Paints,
Charlotte, North Carolina, or acceptable alternate. The coating
thickness to be 1-2 mils DFT.
6.0 GENERAL REQUIREMENTS
6.1 Painted erection marks on equipment, structural steel and
related items shall be legible and durable.
6.2 All manufacturing waste, metal chips, filings, debris, etc.
shall be removed from the interior of each component. All loose
mill scale, rust, oil, grease and other deleterious material
shall be removed from interior and exterior surfaces. At time of
shipment, product shall be clean inside and out. Each component
shall be properly packed and protected before shipment in order
to reach the site clean and unmarked.
7.0 QUALITY ASSURANCE REQUIREMENTS
7.1 Shop painting is subject to inspection and rejection by
Westinghouse for compliance to this specification, either at the
point of delivery or in the manufacturer's shop. Non-compliance
with this specification will result in removal or reapplication
by Westinghouse at Vendor's expense or at the option of
Westinghouse, returned to the Vendor for rework at Vendor's
expense.
8.0 TOUCH-UP PAINT
After the components have been painted and are ready for shipment, the
Vendor is to supply "touch-up" paint in accordance with the criteria
below:
8.1 Painted Components:
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
Refers to 21T6847 Rev. 2 DISTRIBUTION CODE: 270-000-600
- --------------------------------------------------------------------------------
TITLE:REFERENCE PAINT SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE ELECTRIC CORPORATION
Issue Date: 07/18/95 Page: 8 of 14
POWER GENERATION BUSINESS UNIT - ORLANDO, FL
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
8.1.1 If the components have only been primed in the Vendor's
shop, the Vendor is to supply the same paint for field
touch-up EXCEPT if that primer is an IOZ (Inorganic
Zinc). In those instances, the Vendor is to supply an
epoxy mastic primer, a polyamide epoxy primer, organic
zinc primer, or suitable equivalent for field touch-up.
However, if the outside temperatures of these components
are over 160 degrees F but under 450 degrees F, the
Vendor is to supply an organic zinc that is rated
accordingly, e.g. CAT-O-ZINC 55 from Anchor Paint or
suitable equivalent.
8.1.2 If the components have been shop "final painted", the
Vendor is to ship the same paint type and color to the
Site for field touch-up.
8.2 Galvanized Components:
8.2.1 If the components have been galvanized and are to be
field welded, the Vendor is to supply touch-up paint to
cover the welded areas. Suitable touch-up paints for
this application are Galvicon by Southern Coatings or
Brite Galv 2117 by Rustoleum, or suitable equivalent.
9.0 MATERIAL SAFETY DATASHEETS (MSDS)
9.1 MSDS's on all paint used on components plus all touch-ups paints
shall be shipped with the documentation for the component.
9.2 Painting materials containing hazardous disposal amounts of
heavy metals shall be labeled and shipped as hazardous
materials.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
Refers to 21T6847 Rev. 2 DISTRIBUTION CODE: 270-000-600
- --------------------------------------------------------------------------------
TITLE:REFERENCE PAINT SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE ELECTRIC CORPORATION
Issue Date: 07/18/95 Page: 9 of 14
POWER GENERATION BUSINESS UNIT - ORLANDO, FL
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
<TABLE>
<CAPTION>
TABLE 1
PRIMERS AND FINISHES*
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL
PRIMER - FINISH - PAINT FIELD
SSPC SURFACE KEY INDEX KEY INDEX THICKNESS PAINT KEY
ITEM EXTERIOR PREP. SPECS. # (TABLE 2) # (TABLE 2) (MILS) (NOTE "B")
(NOTE "A")
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Mechanical Package Enclosure
a. General exterior & structural steel SP 10 3 4 5-6 B1,B3,B4
b. Mating turbine enclosure inner wall SP 1 (see Section 12 2.3-3.5 B1,B3,B4
5.2)
- ------------------------------------------------------------------------------------------------------------------------------------
2. Mechanical Package Enclosure
a. Interior walls None Galv. or 12 1-1.25 B1, B5
Alum. Sheet
b. Interior exposed structural steel SP 1 12 5-6 B1,B2,B5
- ------------------------------------------------------------------------------------------------------------------------------------
3. Mechanical Bedplate (outer edges) SP 10 3 4 5-6 B1,B3,B4
- ------------------------------------------------------------------------------------------------------------------------------------
4. Mechanical Bedplate (interior)
Step A SP 10 3 (See Step B) 2.5-3 --
Step B SP 1 12 2 7-8 B1,B2,B5
- ------------------------------------------------------------------------------------------------------------------------------------
5. Electrical Package Enclosure
Step A SP 1 10 (See Step B) 0.2-0.4 --
Step B -- 13 4 5-6 B1,B3,B4
- ------------------------------------------------------------------------------------------------------------------------------------
6. Electrical Enclosure Interior Walls None Galv. or 12 .7-.8 B1, B5
Alum. Sheet
- ------------------------------------------------------------------------------------------------------------------------------------
7. Electrical Package Enclosure Battery Room SP 1 10 14 2.8-3.8 B1,B2,B5
- ------------------------------------------------------------------------------------------------------------------------------------
8. Electrical Bedplate
a. Interior SP 1 10 13 2.8-3.8 B1,B2,B5
b. Exterior
Step A SP 1 10 (See Step B) 0.2-0.4 --
Step B -- 13 4 5-6 B1,B3,B4
- ------------------------------------------------------------------------------------------------------------------------------------
9. Starting Package Structure SP 10 3 4 5-6 B1,B3,B4
- ------------------------------------------------------------------------------------------------------------------------------------
10. Starting Package
a. Drive Train Components SP 6 3 4 5-6 B1,B3,B4
b. Enclosure (if furnished) interior surfaces SP 10 3 4 5-6 B1,B3,B4
c. Enclosure exterior surfaces SP 10 3 4 5-6 B1,B3,B4
- ------------------------------------------------------------------------------------------------------------------------------------
11. Generator Enclosure
a. Exterior SP 10 3 4 5-6 B1,B3,B4
b. Interior None Galv. or 12 1-1.25 B1, B5
Alum. Sheet
c. Structure None Hot Dip Galv. None -- None
- ------------------------------------------------------------------------------------------------------------------------------------
12. Turbine Pipe Rack SP 6 9 4 5-6 B1,B3,B4
- ------------------------------------------------------------------------------------------------------------------------------------
13. a. Platform Assemblies (painted) (Indoor SP 1 1 2 4 B1,B2,B5
only)
b. Platform Assemblies (Galv.) None Hot Dip Galv. None -- None
- ------------------------------------------------------------------------------------------------------------------------------------
14. Turbine Bedplate SP 1 1 2 4 B1,B2,B5
- ------------------------------------------------------------------------------------------------------------------------------------
15. Generator Pipe Rack SP 6 9 4 6 B1,B3,B4
- ------------------------------------------------------------------------------------------------------------------------------------
16. Inlet System
a. Inlet (Interior) SP 10 6 None 2-3 B1,B3
b. Inlet (Exterior) SP 6 6 4 5-6 B1,B3,B4
- ------------------------------------------------------------------------------------------------------------------------------------
17. Isophase Bus Manuf. Etch 10 11 2.8-3.8 B1,B2,B5
- ------------------------------------------------------------------------------------------------------------------------------------
18. Isophase Bus Supports None Hot Dip Galv. None -- None
- ------------------------------------------------------------------------------------------------------------------------------------
19. Air Cooler SP 10 7 8 1.5-2 B1,B2,B5
- ------------------------------------------------------------------------------------------------------------------------------------
20. Air Cooler Support Structure None Hot Dip Galv. None -- None
- ------------------------------------------------------------------------------------------------------------------------------------
21. Oil Cooler SP 10 3 4 5-6 B1,B3,B4
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
Refers to 21T6847 Rev. 2 DISTRIBUTION CODE: 270-000-600
- --------------------------------------------------------------------------------
TITLE:REFERENCE PAINT SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE ELECTRIC CORPORATION
Issue Date: 07/18/95 Page: 10 of 14
POWER GENERATION BUSINESS UNIT - ORLANDO, FL
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL
PRIMER - FINISH - PAINT FIELD
SSPC SURFACE KEY INDEX KEY INDEX THICKNESS PAINT KEY
ITEM EXTERIOR PREP. SPECS. # (TABLE 2) # (TABLE 2) (MILS) (NOTE "B")
(NOTE "A")
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
22. Interconnect Pipe (Hot) SP 6 6 Metal jacket 3 under None
over insulation
insulation
- ------------------------------------------------------------------------------------------------------------------------------------
23. Interconnect Pipe (Cold) SP 10 3 4 6 B1,B3,B4
- ------------------------------------------------------------------------------------------------------------------------------------
24. Interconnect Pipe/Flanges
a. Stainless steel (all) None None None
b. Carbon steel flanges (hot) SP 6 6 Metal jacket 3 under None
over insulation
insulation
c. Carbon steel flanges (cold) SP 10 3 4 6 B1,B3,B4
- ------------------------------------------------------------------------------------------------------------------------------------
25. Compressor Bleed Hot SP 6 6 Metal jacket 3 under None
over insulation
insulation
- ------------------------------------------------------------------------------------------------------------------------------------
26. Compressor Bleed Cool Same as item 23 Same as item Same as item Same as item Same as item
23 23 23 23
- ------------------------------------------------------------------------------------------------------------------------------------
27. Engine Surfaces - other than machined SP 10 7 8 1.5-2 None
external moving parts of Inlet Guide Vane
assembly
- ------------------------------------------------------------------------------------------------------------------------------------
28. Manifolds
a. Inlet SP 10 7 8 1.5-2 B1,B2,B5
b. Exhaust SP 10 7 under
insulation
c. Exhaust (251B) - stainless steel None None None
- ------------------------------------------------------------------------------------------------------------------------------------
29. Expansion Joint (metal parts) SP 10 7 8 2-3 B1,B2,B5
- ------------------------------------------------------------------------------------------------------------------------------------
30. Steam Turbine / Generator and BFPT
Enclosure
a. Exterior SP 10 6 4 5-6 B1,B3,B4
b. Interior (Unperforated) SP 10 6 4 5-6 B1,B3,B4
c. Interior (Perforated) None Galv. 12 1-1.25 B1, B5
d. Structure None Hot Dip Galv. None -- None
- ------------------------------------------------------------------------------------------------------------------------------------
31. Combustion Turbine Enclosure
a. Exterior SP 10 3 4 5-6 B1,B3,B4
b. Interior None Galv. or Alum 12 1-1.25 B1, B5
Sheet
c. Structure None Hot Dip Galv. None -- None
- ------------------------------------------------------------------------------------------------------------------------------------
32. Fuel Gas Skid SP 1 1 2 4 B1,B2,B5
- ------------------------------------------------------------------------------------------------------------------------------------
33. Fuel Gas Steam Injection
a. Skid SP 6 6 14 5-6 B1,B3,B4
b. Piping SP 6 6 Metal jacket 3 under None
over insulation
insulation
- ------------------------------------------------------------------------------------------------------------------------------------
34. Fuel Oil Filter Same as Item 31a Same as Item Same as Item Same as Item Same as Item
31a 31a 31a 31a
- ------------------------------------------------------------------------------------------------------------------------------------
35. Compressor Water Wash Skid Same as Item 31a Same as Item Same as Item Same as Item Same as Item
31a 31a 31a 31a
- ------------------------------------------------------------------------------------------------------------------------------------
36. Water Injection Skid Same as Item 31a Same as Item Same as Item Same as Item Same as Item
31a 31a 31a 31a
- ------------------------------------------------------------------------------------------------------------------------------------
37. Exhaust Stack SP 10 6 4 5-6 B1,B3,B4
- ------------------------------------------------------------------------------------------------------------------------------------
38. Exhaust Transition SP 6 6 -- 3 None
- ------------------------------------------------------------------------------------------------------------------------------------
39. Fuel Forwarding Skid (non-stainless parts) Same as Item 31a Same as Item Same as Item Same as Item Same as Item
31a 31a 31a 31a
- ------------------------------------------------------------------------------------------------------------------------------------
40. Fuel Oil Skid and Piping SP 10 3 4 6 B1,B3,B4
- ------------------------------------------------------------------------------------------------------------------------------------
41. Instrument Panels Same as Item 31a Same as Item Same as Item Same as Item Same as Item
31a 31a 31a 31a
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
Refers to 21T6847 Rev. 2 DISTRIBUTION CODE: 270-000-600
- --------------------------------------------------------------------------------
TITLE:REFERENCE PAINT SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE ELECTRIC CORPORATION
Issue Date: 07/18/95 Page: 11 of 14
POWER GENERATION BUSINESS UNIT - ORLANDO, FL
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL
PRIMER - FINISH - PAINT FIELD
SSPC SURFACE KEY INDEX KEY INDEX THICKNESS PAINT KEY
ITEM EXTERIOR PREP. SPECS. # (TABLE 2) # (TABLE 2) (MILS) (NOTE "B")
(NOTE "A")
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
42. EH System SP2, SP3 15 16 3-6 B1, B2, B5
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The primer and finish coats specified herein have been selected based upon
type, color and manufacturer. Equivalent finishes & primers to those
specified are acceptable. The determination of the equivalency
requirements and the authorization to use equivalency paints shall be made
by Westinghouse.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
Refers to 21T6847 Rev. 2 DISTRIBUTION CODE: 270-000-600
- --------------------------------------------------------------------------------
TITLE:REFERENCE PAINT SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE ELECTRIC CORPORATION
Issue Date: 07/18/95 Page: 12 of 14
POWER GENERATION BUSINESS UNIT - ORLANDO, FL
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
NOTES
A. The total paint thickness is dry film thickness (DFT), primer and finish
coats combined. See specified process specification for number of coats
and application.
B. Paint Requirements:
B1. Primed (shop)
B2. Finish paint (shop)
B3. Primer touch-up (field)
B4. Finish paint (field)
B5. Touch-up as required (field)
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
Refers to 21T6847 Rev. 2 DISTRIBUTION CODE: 270-000-600
- --------------------------------------------------------------------------------
TITLE:REFERENCE PAINT SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE ELECTRIC CORPORATION
Issue Date: 07/18/95 Page: 13 of 14
POWER GENERATION BUSINESS UNIT - ORLANDO, FL
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
<TABLE>
<CAPTION>
TABLE 2
KEY INDEX
- ------------------------------------------------------------------------------------------------------------------------------------
KEY
INDEX PAINT DESCRIPTION PROCESS SPEC. MATERIAL CARD
NUMBER
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 Combination oxide/zinc chromate rust inhibitor primer 83603HA M32220KA or #1730 (Anchor
(Interior Applications only) Paint Co.)
- ------------------------------------------------------------------------------------------------------------------------------------
2 Gray oxide machinery enamel modified alkyd - gloss finish - air dry 83603HA M32220FN
over primer (Interior Applications Only)
- ------------------------------------------------------------------------------------------------------------------------------------
3 Zinc rich primer phenoxyeponal type for medium temperature 83348QA PT. II M32206CR (CAT-O-ZINC 55)
applications, i.e., below 600(degree)F (Anchor Paint Co.)
Thinner AA #1893
- ------------------------------------------------------------------------------------------------------------------------------------
4 Final finish coat to be a silicone acrylic enamel finish* Vendor's Silicone acrylic finish (Anchor
Paint Co.)
Thinner 1131
- ------------------------------------------------------------------------------------------------------------------------------------
5 Two part vinyl primer with acid for use as a barrier coat on top of None Vinyl #1723 (Anchor Paint Co.)
galvanized metals or aluminum - one coat; 0.3 to 0.5 mils.
- ------------------------------------------------------------------------------------------------------------------------------------
6 Inorganic zinc primer for medium to high temperatures, i.e., below 83348QA PT. I M32206CQ (Carbozinc 11)
750(degree)F (Carboline Paint Co.)
Thinner #26 or #21 Section
- ------------------------------------------------------------------------------------------------------------------------------------
7 Hi temp. zinc silicone primer used in combination with finish (see 8 83342WZ M32220EJ
below). Primer and finish in one spec. (Approx. 1000(degree)F temp)
- ------------------------------------------------------------------------------------------------------------------------------------
8 Hi temp. aluminum mod. silicone paint. Xylol thinner. 83342WZ M32206EL
- ------------------------------------------------------------------------------------------------------------------------------------
9 Barrier coating to isolate alkyd oil type finishes from other type None Barrier coat - 2653 or 2655
finishes (phenolic alkyd material) (Anchor Paint Co.)
- ------------------------------------------------------------------------------------------------------------------------------------
10 Industrial, two part, vinyl acid wash primer None Sherwin-Williams, series P60G2
- ------------------------------------------------------------------------------------------------------------------------------------
11 Light gray enamel (Interior Applications only) None Sherwin-Williams , series F-75
- ------------------------------------------------------------------------------------------------------------------------------------
12 Waterborne acrylic primer and barrier coat, white None 100% waterborne acrylic - B9495
Anchor Paint Co.
- ------------------------------------------------------------------------------------------------------------------------------------
13 Two-part, high build, heavy duty, polyamide epoxy primer, lead and None Dupont-Corlar 825-Y-9031 HB,
chromate free CF. activator VF-Y-632
- ------------------------------------------------------------------------------------------------------------------------------------
14 Polyurethane enamel, appliance white to be used as a finish coat. None Dupont-Imron 326 plus 6731U
activator VG-Y-511
- ------------------------------------------------------------------------------------------------------------------------------------
15 Medium Gray Epoxy Alkyd - First Coat None M32220KN
- ------------------------------------------------------------------------------------------------------------------------------------
16 Light Gray Epoxy Enamel - Finish Coat None M32220BJ Rev. C
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Note: The finish paint stated here is only "suggested" and used
primarily when Westinghouse performs the final-painting in the
field.
When the customer or his designee has the responsibility for field
painting, he may choose other final-paint types as long as they
are compatible with the primer coats supplied.
Section Note: CZ-11 High Solids is an acceptable alternate.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
Refers to 21T6847 Rev. 2 DISTRIBUTION CODE: 270-000-600
- --------------------------------------------------------------------------------
TITLE:REFERENCE PAINT SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE ELECTRIC CORPORATION
Issue Date: 07/18/95 Page: 14 of 14
POWER GENERATION BUSINESS UNIT - ORLANDO, FL
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
Total Equivalent Operating
Hours
--------------------------------
================================
<PAGE>
[*] This one (1) page has been omitted and filed separately with the Securities
and Exchange Commission as part of a Confidential Treatment Request.
<PAGE>
- --------------------------------------------------------------------------------
Table of Contents
- --------------------------------------------------------------------------------
TAB
Appendix B - Payment Schedule B
Appendix C - Project Schedule C
Appendix D - Performance Test Plan D
Appendix E - Approved Subcontractors List E
Appendix F - Applicable Permits F
Appendix G - Real Estate Rights Required by Contractor G
Appendix H - NOT USED H
Appendix I-1 - Form of Contractor's Final Waiver & Release I-1
Appendix I-2 - Form of Contractor's Interim Waiver & Release I-2
Appendix I-3 - Form of Subcontractor's Final Waiver & Release I-3
Appendix J-1 - Form of Preliminary Notice to Proceed J-1
Appendix J-2 - Form of Provisional Notice to Proceed J-2
Appendix J-3 - Form of Notice to Proceed J-3
Appendix K - Quality Assurance Plan K
Appendix L - Form of EPC Guarantee L
Appendix M - Form of AES Pre-Financial Closing Guarantee M
Appendix N - Construction Progress Milestones N
Appendix O - Scope Options O
Appendix P - Table of Submittals & Approvals P
Appendix Q - List of Key Personnel Q
Appendix R - Warranty Data Sheet R
Appendix S - NOT USED S
Appendix T - NOT USED T
Appendix U - Certain Subcontractors U
- --------------------------------------------------------------------------------
Proprietary Information AWS IRONWOOD DRAFT CONTRACT APPENDICES
<PAGE>
Appendix B
Payment & Milestone Schedule
----------------------------
============================
<PAGE>
APPENDIX B
AES IRONWOOD PAYMENT SCHEDULE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Pay Month MS# Milestone Description Project Percentage per Cumulative
Months Months Percentage
<S> <C> <C> <C> <C> <C> <C>
* Dec-97 1 Letter of Intent. -9 1.25% 1.25%
May-98 2 Cycle Design/CT Release. -4 0.00% 1.25%
Jun-98 - -3 0.00% 1.25%
Jul-98 - -2 0.00% 1.25%
Aug-98 - -1 0.00% 1.25%
* Sep-98 3 ST/CTG/STG Fabrication Release. 0 0.73% 1.98%
* Oct-98 4 Pre-Financial Closing Payment (Net) 1 0.63% 2.61%
* Nov-98 5 Pre-Financial Closing Payment (Net) 2 0.83% 3.44%
* Dec-98 6 Award HRSG's 3 1.77% 5.21%
* Jan-99 7 Financial Closing 4 11.00% 16.21%
Feb-99 8 Initial Issue of P & ID's Issued for Client Approval. 5 11.00% 27.21%
Mar-99 9 Initial General Arrangement Drawings Issued for Client 6 9.00% 36.21%
Approval.
Apr-99 10 Award Main Transformers. 7 9.00% 45.21%
May-99 11 HRSG, CT, CTG, ST, STG Foundation Drawings AFC. 8 8.00% 53.21%
Jun-99 12 Steam Turbine and Steam Turbine Generator Design Complete. 9 8.00% 61.21%
Jul-99 13 Starting Package Award 10 8.00% 69.21%
Aug-99 14 Award Cooling Tower 11 8.00% 77.21%
Sep-99 - Unit #1 CT/CTG Foundation Complete 12 8.00% 85.21%
Oct-99 15 13 0.00% 85.21%
Nov-99 16 Unit #1 CT Longitudinal Ship. 14 2.00% 87.21%
Dec-99 17 Unit #2 CT Longitudinal Ship. 15 2.00% 89.21%
Jan-00 - 16 0.00% 89.21%
Feb-00 18 Unit #2 Combustion Turbine Engine Assembly Rough Set on 17 1.00% 90.21%
Foundation
Mar-00 18 0.00% 90.21%
Apr-00 19 Condenser Received at Site 19 1.00% 91.21%
May-00 20 Starting Package Received at Site 20 1.00% 92.21%
Jun-00 21 Cooling Tower Erection - Complete 21 1.00% 93.21%
Jul-00 22 Switchyard Complete and Ready for Energization. 22 1.00% 94.21%
Aug-00 23 0.00% 94.21%
Sep-00 23 HRSG #1 Hydro Complete 24 1.00% 95.21%
Oct-00 24 STG Lube Oil Flush Complete. 25 1.00% 96.21%
Nov-00 25 Steam Line Cleaning Complete 26 1.00% 97.21%
Dec-00 27 0.00% 97.21%
Jan-01 26 Provisional Acceptance 28 1.79% 99.00%
Feb-01 27 Commercial Operation 29 1.00% 100.00%
</TABLE>
* Note: All pre-financial closing payments will be due on the 28th of the
month. Invoices for these milestones will be issued 30 days prior to the
scheduled payment.
- --------------------------------------------------------------------------------
<PAGE>
Appendix C
Project Schedule
----------------------------
============================
<PAGE>
IRONWOOD
Combined Cycle Project
[Drawing Appears Here]
<PAGE>
Appendix D
----------------------------
============================
[*] The following thirty one (31) pages have been omitted and
filed separately with the Securities and Exchange Commission
as part of a Confidential Treatment Request.
<PAGE>
Appendix E
----------------------------
============================
[*] The following eleven (11) pages have been omitted and
filed separately with the Securities and Exchange Commission
as part of a Confidential Treatment Request.
<PAGE>
Appendix F
Applicable Permits
----------------------------
============================
<PAGE>
Appendix F
Applicable Permits and Approvals
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Agency Applicable Permits Responsible
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Pa. Public Utilities Commission Power Sales Agreements between GPU Energy and AES AES
- -------------------------------------------------------------------------------------------------------------------
Federal Energy Regulatory Commission Exempt Wholesale Generator Certification AES
- -------------------------------------------------------------------------------------------------------------------
U.S. Dept. of Energy, Office of Fossil Fuel Use Act Certification AES
Energy
- -------------------------------------------------------------------------------------------------------------------
PaDEP PSD/State Air Permit AES
- -------------------------------------------------------------------------------------------------------------------
PaDOT Roadway Access Permit from Prescott Road to site AES
- -------------------------------------------------------------------------------------------------------------------
PaDEP NPDES, PAG-3 AES
- -------------------------------------------------------------------------------------------------------------------
PaDEP NPDES Part 1 Construction AES
- -------------------------------------------------------------------------------------------------------------------
Pa. Fire Marshal's Office Onsite Oil Storage Tank (1) AES
(1) Permission to Construct (2) Westinghouse
(2) Permit for Construction
- -------------------------------------------------------------------------------------------------------------------
Delaware River Basin Commission Water Use Approval as per Section 3.8 of DRDC AES
regulations
- -------------------------------------------------------------------------------------------------------------------
Delaware River Basin Commission Consumptive Use Approval for Merrill Creek AES
Owners-Group Application
- -------------------------------------------------------------------------------------------------------------------
Susquehanna River Basin Commission Water Use Approval AES
- -------------------------------------------------------------------------------------------------------------------
Lebanon County Conversation District Soil Erosion and Sediment Control Approval AES
- -------------------------------------------------------------------------------------------------------------------
Conrail/CSX Railroad Crossing Approval and Railspur Construction AES
- -------------------------------------------------------------------------------------------------------------------
South Lebanon Township Zoning Hearing Stack Height Variance Approval for Power Plant AES
Board
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Appendix F
Applicable Permits and Approvals
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Agency Applicable Permits Responsible
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
South Lebanon Township Planning Board or Lead Development approval for Power Plant AES
Zoning Hearing Board
- -------------------------------------------------------------------------------------------------------------------
South Lebanon Township Planning Board or Subdivision Approval for Access Road AES
Zoning Hearing Board
- -------------------------------------------------------------------------------------------------------------------
South Lebanon Township Zoning Hearing Permission to Construction 175' meteorological AES
Board monitoring tower (permit granted)
- -------------------------------------------------------------------------------------------------------------------
South Lebanon Township/Lebanon County On-site septic approval for sanitary discharge AES
- -------------------------------------------------------------------------------------------------------------------
City of Lebanon Authority Agreement for Supply of treated effluent and AES
construction, operation and Maintenance of pipeline
- -------------------------------------------------------------------------------------------------------------------
Applicable Agencies All Building Permits Westinghouse
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Appendix G
Real Estate Rights
Required by Contractor
----------------------------
============================
<PAGE>
[Drawing Appears Here]
<PAGE>
[Drawing Appears Here]
<PAGE>
[Drawing Appears Here]
<PAGE>
Appendix H
NOT USED
----------------------------
============================
<PAGE>
Appendix I-1
Form of Contractor's
Final Waiver & Release
----------------------------
============================
<PAGE>
[Note: bracketed language may be
inserted by Contractor as applicable
under the circumstances.]
APPENDIX I-1
FORM OF CONTRACTOR'S FINAL WAIVER
LEBANON, PENNSYLVANIA )
) ss.:
)
TO WHOM IT MAY CONCERN:
Siemens Westinghouse Power Corporation ("Contractor"), has
contracted to furnish construction and other services for the combined cycle
electric generating plant and related facilities and equipment, located in
Lebanon, Pennsylvania and owned by AES Ironwood, Inc., a Delaware corporation
("Owner"), pursuant to the Agreement for Engineering, Procurement and
Construction Services, dated as of September 23, 1998, between Owner and
Contractor (the "EPC Agreement"). Capitalized terms used herein that are not
defined herein have the respective meanings set forth in the EPC Agreement.
The undersigned, on behalf of Contractor, DOES HEREBY WAIVE AND RELEASE[, which
waiver and release (and which certification as set forth below) is expressly
conditioned upon the receipt by Contractor from Owner of the $__________ payment
[of Retainage due pursuant to Section 4.2.4(a)) OR [of the Termination Payment
due pursuant to Section 4.4] of the EPC Agreement]:
Any and all claims, legal and equitable, which arise out of or in
connection with the Services or other work performed under the EPC
Agreement [(other than (i) any Permitted Liens described below that are
being contested in good faith by Contractor and which comply with the
requirements set forth in clause (a) or (b) of the definition of
"Permitted Liens" in the EPC Agreement, (ii) any claim for the amounts set
forth below that are the subject of good faith dispute(s) between
Contractor and owner, which disputed amounts in the aggregate do not
exceed $2,000,000, (iii) any claim for the payment of up to $__________ of
the Project Completion Payment and other remaining Retainage to the extent
such payments become due to Contractor under the EPC Agreement, [(iv) any
claim for the payment of an Excess Output bonus due to Contractor pursuant
to Section 8.1.1.4 of the EPC Agreement,] [(v) any claim
<PAGE>
[Note: bracketed language may be
inserted by Contractor as applicable
under the circumstances.]
for the payment in the amount of $_____________ of deferred bonus payments
due to Contractor pursuant to Section 8.3(b) of the EPC Agreement.] and
(vi) any claim arising after the date of this release and waiver,
including any claims thereafter arising under Article 13 or 14 of the EPC
Agreement, provided that this clause (vi) shall not include any claim that
directly or indirectly is a claim relating to compensation for the
Services performed under the EPC Agreement)] against Owner, the Facility,
the Facility Site, the Real Estate Rights and all other Project property
and equipment, including any and all such claims of Subcontractors;
and DOES HEREBY CERTIFY THAT:
[Except as specifically described below,] (A) there are no claims, liens,
security interests or encumbrances arising out of or in connection with
the performance by Contractor or any of the Subcontractors of the Services
and other work performed under the EPC Agreement outstanding or known to
exist at the date of this certification; (B) all bills, payrolls,
expenses, costs, Taxes, claims and other indebtedness incurred in
connection with the Services and other work performed under the EPC
Agreement have been paid in full for, with the proceeds of the $__________
payment referred to above in the second paragraph hereof, will be paid in
full]; (C) [upon receipt by Contractor of the $___________ payment
referred to above in the second paragraph hereof, and other than any
payment of the amount(s) in dispute as specifically described below or of
the Project Completion Payment or other remaining Retainage or bonus
payments as specifically described below,] Owner has paid in full to
Contractor all amounts due from Owner under the EPC Agreement for all
Services and other work performed under the EPC Agreement, including
without limitation all Scope Changes or other extra work required
thereunder; (D) there is no known basis for filing of any claims arising
out of or in connection with the performance by Contractor or any of the
Subcontractors of the Services or other work under the EPC Agreement; and
(E) Contractor has provided to Owner final releases and waivers from all
Subcontractors that Contractor is required to obtain under Section 4.5 of
the EPC Agreement; [other than any claims with respect to:
_________[Insert with respect to each of the items, if any, excluded from
the waiver and release paragraph pursuant to clauses (i) through (v)
thereof, a description of such claim and the estimated dollar value of
each such claim]].
<PAGE>
[Note: bracketed language may be
inserted by Contractor as applicable
under the circumstances.]
Executed copies of all such final Subcontractor releases and waivers
obtained by Contractor and not previously delivered to Owner are attached
hereto.
Signed this ____ day of __________, 199__.
CONTRACTOR:
SIEMENS WESTINGHOUSE POWER CORPORATION
By: _________________________________________
Name:
Title:
Date:
Subscribed and sworn to before me this ____ day of __________,
199__.
_____________________________________________
Notary Public in and for
Said State and [ ]
<PAGE>
Appendix I-2
Form of Contractor's
Interim Waiver & Release
----------------------------
============================
<PAGE>
[Note: bracketed language may be
inserted by Contractor as applicable
under the circumstances.]
APPENDIX I-2
FORM OF CONTRACTOR'S INTERIM WAIVER
LEBANON, PENNSYLVANIA )
) ss.:
)
TO WHOM IT MAY CONCERN:
Siemens Westinghouse Power Corporation ("Contractor"), has
contracted to furnish construction and other services for the combined cycle
electric generating plant and related facilities and equipment, located in
Lebanon, Pennsylvania and owned by AES Ironwood, Inc., a Delaware corporation
("Owner"), pursuant to the Agreement for Engineering, Procurement and
Construction Services, dated as of September 23, 1998, between Owner and
Contractor (the "EPC Agreement"). Capitalized terms used herein that are not
defined herein have the respective meanings set forth in the EPC Agreement.
For and in consideration of the receipt of [$__________ - insert
Scheduled Payment amount) as payment in full of invoice no. ____, dated
__________, 199__, for work on the Project through __________, 199__, ("Release
Date"), the undersigned, on behalf of Contractor, DOES HEREBY WAIVE AND RELEASE
to the extent such payment is made to Contractor:
Any and all claims, [(other than (i) Permitted Liens, (ii) any
claims that are the subject of a good faith dispute between Contractor and
Owner, which disputed amounts in the aggregate do not exceed $1,000,000,
or (iii) any claims that upon payment to Contractor of the Scheduled
Payment referred to above will be discharged and released in full, in each
case as specifically set forth below)] against the Facility, the Facility
Site and any and all interests and estates therein, and all improvements
and materials placed on the Facility Site, arising out of or in connection
with performance by Contractor or any Subcontractor of the Services or
other work under the EPC Agreement; it being understood that the foregoing
waiver and release is in connection with the Scheduled Payment referred to
above in the second paragraph and does not cover any Retainage or Services
provided after the Release Date;
<PAGE>
[Note: bracketed language may be
inserted by Contractor as applicable
under the circumstances.]
and DOES HEREBY CERTIFY THAT to the extent such payment is made to Contractor:
[Except for Permitted Liens or any claims that are the subject of a good
faith dispute between Contractor and owner in amount(s) not exceeding
$1,000,000 in the aggregate,] (A) there are no (or upon payment to
Contractor of the Scheduled Payment referred to above in the second
paragraph hereof there will be no) claims, liens, security interests or
encumbrances against the Facility, the Facility Site and any and all
interests and estates therein, and all improvements and materials placed
on the Facility Site, arising out of or in connection with the performance
by Contractor or any Subcontractor of the Services performed under the EPC
Agreement through the date of the invoice covering the Scheduled Payment
referred to above in the second paragraph hereof outstanding or known to
exist at the date of this certification; (B) upon receipt by Contractor of
such Scheduled Payment and other than any Retainage to the extent it
becomes due to Contractor under the EPC Agreement and, other than any
amount currently addressed by a pending Scope Change Order Notice from
Contractor under Section 12.3 hereof, Owner has paid in full to Contractor
all amounts due from owner under the EPC Agreement through the date
referred to above in the second paragraph hereof for all Services
performed under the EPC Agreement, including without limitation all Scope
Changes or other extra work required thereunder; and (C) releases and
waivers from all Subcontractors (to the extent required pursuant to
Section 4.6 of the EPC Agreement) have been obtained and delivered to
Owner.
<PAGE>
[Note: bracketed language may be
inserted by Contractor as applicable
under the circumstances.]
Signed this ____ day of __________, 199__.
CONTRACTOR:
SIEMENS WESTINGHOUSE POWER CORPORATION
By: _________________________________________
Name:
Title:
Date:
Subscribed and sworn to before me this ____ day of __________,
199__.
_____________________________________________
Notary Public in and for
Said State and [ ]
<PAGE>
Appendix I-3
Form of Subcontractor's
Final Waiver
----------------------------
============================
<PAGE>
APPENDIX I-3
FORM OF SUBCONTRACTOR'S FINAL WAIVER
LEBANON, PENNSYLVANIA )
) ss.:
)
TO WHOM IT MAY CONCERN:
The undersigned is the [Title] of [Name of Subcontractors], a
__________ [corporation] ("Subcontractor"), which has contracted to furnish
construction or other services to Siemens Westinghouse Power Corporation
("Contractor") for the combined cycle electric generating plant and related
facilities and equipment (the "Project"), located on a site located in Lebanon,
Pennsylvania (the "Project Site"), owned by AES Ironwood, Inc., a Delaware
corporation ("Owner").
The undersigned, on behalf of Subcontractor, DOES HEREBY WAIVE AND RELEASE:
Any and all claims with respect to and on the Project, the Facility
Site and any and all interests and estates therein, and all improvements
and materials placed on the Facility Site, on account of labor, services,
improvements, materials, fixtures, apparatus or machinery furnished by the
undersigned to the Contractor for the Project;
and DOES HEREBY CERTIFY THAT:
Neither the Subcontractor nor any of its vendors, suppliers or
subcontractors has any claims arising out of or in connection with labor,
services, improvements, materials, fixtures, apparatus or machinery
furnished by or on behalf of the Subcontractor to the Contractor for the
Project.
<PAGE>
[Note: bracketed language may be
inserted by Contractor as applicable
under the circumstances.]
Signed this ____ day of __________, 199__.
[NAME OF SUBCONTRACTOR]
By: _________________________________________
Name:
Title:
Date:
Subscribed and sworn to before me this ____ day of __________,
199__.
_____________________________________________
Notary Public in and for
Said State and [ ]
<PAGE>
Appendix J-1
Form of Preliminary Notice
to Proceed
----------------------------
============================
<PAGE>
AGREEMENT
BETWEEN
WESTINGHOUSE POWER GENERATION
AND
AES IRONWOOD, INC.
(PRE EPC AGREEMENT)
This agreement ("Agreement") is made as of this 18th day of March 1998
("Effective Date") between AES Ironwood, Inc. (AES) and Westinghouse Power
Generation, a division of CBS Corporation ("Westinghouse"). The purpose of this
Agreement is to set forth the current understandings of the parties with respect
to the nominal 700 MW turnkey combined cycle power plant being developed by AES
in Lebanon, Pennsylvania ("Project") and supplements the Letter of Intent (LOI)
dated December 18, 1997 executed by the parties. The terms of the LOI are
modified only as set forth below and all other terms and conditions of the LOI
shall remain in full force and effect. In this regard, the payment schedule in
Exhibit 2 and the project schedule in Exhibit 3 shall take the place of tabs 3
and 5, respectively, in Section I of the LOI. Except as set forth in this
Agreement, capitalized terms in this Agreement are as defined in the Draft
Contract and the LOI.
1. Negotiation of EPC Agreement
The parties mutually agree that the draft contract dated December 19, 1997 and
submitted to AES on February 27, 1998, along with the most recent version of
Appendix A (Westinghouse scope of services), collectively, the "Draft Contract",
will serve as the basis for negotiating the turnkey agreement ("EPC Contract").
The parties shall use reasonable efforts to negotiate and execute the EPC
Contract on or before May 1, 1998 unless otherwise mutually agreed to by the
parties. The parties further agree that the terms and conditions included in the
latest Draft Contract in effect as of May 1, 1998 shall govern this Agreement
until such time as the final EPC Contract is executed.
2. Westinghouse Pre Financial Closing Project Activities
By this Agreement, the parties agree that Westinghouse shall perform the
following activities beginning on the dates set forth below in accordance with
the latest version of the Draft Contract as mutually agreed to by the parties:
Pre Financial Closing Project Activities Date
- ---------------------------------------- ----
Combustion turbine manufacturing release May 1, 1998
Thermal cycle design May 1, 1998
Steam turbine manufacturing release July 1, 1998
Manufacturing release for combustion turbine and steam turbine July 1, 1998
generators
Pre-engineering release July 1, 1998
HRSG procurement release October 1,
1998
3. Payment
AES shall pay Westinghouse for the Pre Financial Closing Project Activities
described above in accordance with the Pre Financial Closing Project Activities
Payment Schedule (Exhibit 1). The parties agree to the payment schedule for all
Project milestones as reflected in the AES Ironwood Payment Schedule (Exhibit
2). By this Agreement Exhibits 1 and 2 are made a part of the Draft Contract.
Payments will be composed of cash and the application of past project credits
("Destec Credit"). In the event the Pre-EPC Agreement activities are terminated
on or before the payment dates in Exhibit 1, AES agrees to pay cancellation fees
in accordance with Exhibit 1. This will include the application of the Destec
Credit towards the payment of such cancellation fees and accounting for any
remaining credit as Future Unit Credit as reflected in Exhibit 1.
- --------------------------------------------------------------------------------
Propertary Information Page 1 Ironwood Project
03 12 98 File No. 902
<PAGE>
4. Project Schedule
The parties agree to the project schedule as reflected in the Ironwood Combined
Cycle (Exhibit 3) which includes a target Commercial Operation Date for the
Project of December 1, 2000. By this Agreement, Exhibit 3 is made a part of the
Draft Contract.
5. Exclusivity
AES agrees to negotiate the EPC Contract exclusively with Westinghouse for
the Project. If the parties cannot mutually agree on an acceptable EPC Contract
on or before May 1, 1998, unless otherwise agreed to by the parties, or if the
EPC Contract otherwise fails to be executed by this date, either party has the
right thereafter to terminate this Agreement without liability one to the other.
6. Delays
In the event there are delays in financial closing for the Project, or either
party is delayed in obtaining necessary permits, the parties agree to mutually
negotiate a change in the payment schedule, project schedule, including the
Commercial Operation Date, and any other terms of the EPC Contract so affected
by such delays.
7. AES Financial Guarantee
Simultaneously with execution of this Agreement, AES will cause The AES
Corporation to provide Westinghouse with a guaranty of the Pre EPC Agreement
obligations of AES. Such guaranty shall be mutually and reasonably agreed upon
by AES, The AES Corporation, and Westinghouse.
8. Disclaimer of Liability
Notwithstanding anything to the contrary elsewhere in this Agreement, in no
event shall either party be liable to the other party for indirect, incidental,
special or consequential damages of any type, including, but not limited to loss
of use or loss of profit or revenue, regardless of whether such liability arises
out of contract, tort (including negligence and strict liability), or otherwise.
9. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of
the state of New York, excluding rules governing conflicts of law.
10. Entire Agreement
This Agreement represents the entire understanding of the parties with respect
to the subject matter contained herein and supersedes all prior discussions,
understandings and agreements between the parties with respect thereto except
those portions of the LOI that have not been modified herein.
AES IRONWOOD, INC. WESTINGHOUSE POWER GENERATION
A DIVISION OF CBS CORPORATION
/s/ Bart R. Rossi /s/ Randy H. Zwirn
- -------------------------- ---------------------------------------
Signature Signature
Bart R. Rossi Randy H. Zwirn
- -------------------------- ---------------------------------------
Name Name
Vice President President-Westinghouse Power Generation
- -------------------------- ---------------------------------------
Title Title
Exhibit 1 Pre Financial Closing Project Activities Payment Schedule
Exhibit 2 The AES Ironwood Payment Schedule
Exhibit 3 Ironwood Combined Cycle Project Schedule
- --------------------------------------------------------------------------------
Propertary Information Page 2 Ironwood Project
03 12 98 File No. 902
<PAGE>
Exhibit 1
AES Ironwood
Pre-Financial Closing Project Activities
Payment Schedule
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Destec Credit Cancellation
------------- ------------
Milestones Payment ($000) ($000) Revised payment ($000) AES Future
Project Payment -------------- ------ --------------- ------ -----------
Month Date* Month Cum Month Cum Month Cum Cumulative Unit Credit
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 31-Dec-97 LOI 4,000 4,000 1,000 1,000 3000 3000 0 3000
- -------------------------------------------------------------------------------------------------------------------------
1 01-May-98 CT/Cycle design 0 4,000 0 1,000 0 3000 500 2500
- -------------------------------------------------------------------------------------------------------------------------
2 01-Jun-98 0 4,000 0 1,000 0 3000 1000 2000
- -------------------------------------------------------------------------------------------------------------------------
3 23-Sep-98 ST/CTG/STG/AE Release 2,000 6,000 250 1,250 1750 4750 6000 0
- -------------------------------------------------------------------------------------------------------------------------
4 28-Oct-98 2,000 8,000 500 1,750 1500 6250 8000 0
- -------------------------------------------------------------------------------------------------------------------------
5 28-Nov-98 2,500 10,500 500 2,250 2000 8250 10500 0
- -------------------------------------------------------------------------------------------------------------------------
6 28-Dec-98 HRSG Release 5,000 15,500 750 3,000 4250 12500 18200 0
- -------------------------------------------------------------------------------------------------------------------------
7 28-Jan-99 Financial Closing 23,700 39,200 0 3,000 23700 36200 ** 0
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Invoices will be issued 30 days prior to the schedule payment date.
** Cancellation will be calculated in accordance with the EPC Contract
<PAGE>
Exhibit 2
AES Ironwood
Payment Schedule
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Payment Date Milestone Project Percentage per Cumulative
Months Months Percentage
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
31-Dec-97 Letter of Intent -1 1.40% 1.40%
- -----------------------------------------------------------------------------------------------
01-May-98 Cycle design/CT Release 0 0.00% 1.40%
- -----------------------------------------------------------------------------------------------
01-Jun-98 1 0.00% 1.40%
- -----------------------------------------------------------------------------------------------
23-Sep-98 ST/CTG/STG/AE Release 2 0.94% 2.34%
- -----------------------------------------------------------------------------------------------
28-Oct-98 3 0.94% 3.28%
- -----------------------------------------------------------------------------------------------
28-Nov-98 4 1.16% 4.44%
- -----------------------------------------------------------------------------------------------
28-Dec-98 HRSG Release 5 2.33% 6.77%
- -----------------------------------------------------------------------------------------------
28-Jan-99 Financial Closing 6 11.00% 17.77%
- -----------------------------------------------------------------------------------------------
28-Feb-99 7 11.00% 28.77%
- -----------------------------------------------------------------------------------------------
28-Mar-99 8 9.00% 37.77%
- -----------------------------------------------------------------------------------------------
28-Apr-99 9 9.00% 46.77%
- -----------------------------------------------------------------------------------------------
28-May-99 10 8.00% 54.77%
- -----------------------------------------------------------------------------------------------
28-Jun-99 11 8.00% 62.77%
- -----------------------------------------------------------------------------------------------
28-Jul-99 12 8.00% 70.77%
- -----------------------------------------------------------------------------------------------
28-Aug-99 13 8.00% 78.77%
- -----------------------------------------------------------------------------------------------
28-Sep-99 14 8.00% 86.77%
- -----------------------------------------------------------------------------------------------
28-Oct-99 15 0.00% 86.77%
- -----------------------------------------------------------------------------------------------
28-Nov-99 16 2.00% 88.77%
- -----------------------------------------------------------------------------------------------
28-Dec-99 17 2.00% 90.77%
- -----------------------------------------------------------------------------------------------
28-Jan-00 18 0.00% 90.77%
- -----------------------------------------------------------------------------------------------
28-Feb-00 19 1.00% 91.77%
- -----------------------------------------------------------------------------------------------
28-Mar-00 20 0.00% 91.77%
- -----------------------------------------------------------------------------------------------
28-Apr-00 21 1.00% 92.77%
- -----------------------------------------------------------------------------------------------
28-May-00 22 1.00% 93.77%
- -----------------------------------------------------------------------------------------------
28-Jun-00 23 1.00% 94.77%
- -----------------------------------------------------------------------------------------------
28-Jul-00 24 1.00% 95.77%
- -----------------------------------------------------------------------------------------------
28-Aug-00 25 0.00% 95.77%
- -----------------------------------------------------------------------------------------------
28-Sep-00 26 1.00% 96.77%
- -----------------------------------------------------------------------------------------------
28-Oct-00 27 1.00% 97.77%
- -----------------------------------------------------------------------------------------------
28-Nov-00 28 1.00% 98.77%
- -----------------------------------------------------------------------------------------------
28-Dec-00 29 0.23% 99.00%
- -----------------------------------------------------------------------------------------------
28-Jan-01 30 0.00% 99.00%
- -----------------------------------------------------------------------------------------------
28-Feb-01 Target Commercial 31 1.00% 1.00%
Operation
- -----------------------------------------------------------------------------------------------
</TABLE>
Note: 1.) The above payment schedule assumes a 5% retention for each payment
commencing at Financial Closing.
2.) The $3 million Destec credit will be applied in accordance with
exhibit 1.
<PAGE>
Appendix J-2
Form of Provisional Notice
to Proceed
----------------------------
============================
<PAGE>
APPENDIX J-2
FORM OF PROVISIONAL NOTICE TO PROCEED
(LETTERHEAD OF OWNER)
September 23, 1998
Westinghouse Power Generation
4400 Alafaya Trail
Orlando, FL 32826
Attention: Jeff Jacobsohn, Project Director
Subject: AES Ironwood, Inc. -- Provisional Notice to Proceed
Dear Sirs:
Reference is hereby made to the draft Agreement for Engineering, Procurement and
Construction Services between AES Ironwood, Inc. ("Owner"), on the one part, and
Westinghouse Power Generation ("Contractor") on the other part, dated as of
September 10, 1998 ("the Agreement"). Capitalized terms used herein and not
defined herein shall have the meanings set forth in the Agreement.
In accordance with Section 2.2 of the draft Agreement, Owner hereby instructs
Contractor to commence performance of the following activities:
o steam turbine generator set manufacturing release
o combustion turbine generator set manufacturing release
o pre-engineering release
o HRSG procurement release
This Provisional Notice to Proceed does not authorize you to commence any
activities not specifically noted herein and may be amended as necessary
depending upon the status of permitting or financial closing.
Very truly yours,
AES Ironwood, Inc.
By: /s/ Patricia L. Rollin
-----------------------------
Name: Patricia L. Rollin
Title: Vice President
AES Ironwood
<PAGE>
Appendix J-3
Form of Notice to Proceed
----------------------------
============================
<PAGE>
APPENDIX J-3
FORM OF NOTICE TO PROCEED
(LETTERHEAD OF OWNER)
___________, 1998
Siemens Westinghouse Power Corporation
4400 Alafaya Trail
Orlando, FL 32826
Attention: Jeff Jacobsohn, Project Director
Subject: AES Ironwood, Inc. -- Notice to Proceed
Dear Sirs:
Reference is hereby made to the Agreement for Engineering, Procurement and
Construction Services between AES Ironwood, Inc. ("Owner"), on the one part, and
Siemens Westinghouse Power Corporation ("Contractor") on the other part, dated
as of __________, 1998 ("the Agreement"). Capitalized terms used herein and not
defined herein shall have the meanings set forth in the Agreement.
In accordance with Section __ of the Agreement, Owner hereby instructs
Contractor to commence site mobilization and performance of all of the Services
under the Agreement on ________, 199__ ("Commencement Date").
Very truly yours,
AES Ironwood, Inc.
By: ___________________________
Name: S. Dahm
Title:
<PAGE>
Appendix K
Quality Assurance Plan
==========================
<PAGE>
AES IRONWOOD PROJECT
INDEX
I. INTRODUCTION/OVERVIEW
II. WESTINGHOUSE QUALITY PROGRAM DESCRIPTION
III. INSPECTION AND TEST PLANS FOR MAJOR ITEMS OF
EQUIPMENT SUPPLY
<PAGE>
AES IRONWOOD PROJECT
QUALITY PLAN
SECTION I
INTRODUCTION/OVERVIEW
<PAGE>
INTRODUCTION/OVERVIEW
1.0 PURPOSE
The purpose of this Quality Plan is to outline the Westinghouse quality program
and quality verification requirements for the AES Ironwood Project that apply to
activities within the EPC Contract workscope.
This document is intended to be integrated into the AES Ironwood Contract and
serve as the basis for Westinghouse's commitment to quality throughout the
engineering, procurement and construction phases of the Ironwood Project.
2.0 WESTINGHOUSE QUALITY PROGRAM
Section II of this plan highlights the Westinghouse Power Generation Quality
Program. The Business Unit has an active Quality Improvement Program that is
consistently producing major gains in both quality and productivity.
Westinghouse's goal is to be the best in the industry from both performance and
customer perception standpoints. In support of this goal, Power Generation has
established a Total Quality System that has been certified as meeting the
requirements of the ISO 9001-1994; Quality Systems Model for Quality Assurance
in design, development, production, installation and servicing.
3.0 CONSTRUCTION SITE QUALITY PROGRAM
For full scope Turnkey Projects such as Ironwood, Westinghouse follows an
established process to provide assurance that site construction, equipment
installation, start-up and testing comply with Contract requirements.
Commercial and technical evaluations lead to the determination of the degree of
Westinghouse participation in the actual construction activities. Westinghouse
will choose to either act as General Contractor, or employ the services of a
qualified General Construction Contractor. In either case, several
Subcontractors will subsequently be selected based on the project scope and
available qualified Companies. For typical projects, separate Civil, Mechanical,
and Electrical Subcontractors are utilized, as well as a few smaller contractors
of specialized services.
Westinghouse chooses and qualifies Contractors for site construction activities
under the same program and procedures as those who supply equipment. For full
scope turnkey orders, the Westinghouse Project Manager and Project
Implementation team participate in the evaluation of potential construction
contractors. The evaluation process includes surveys, reviews, and audits of the
contractor's quality program prior to their selection and contract placement.
Westinghouse contracts to Construction Contractors contain Quality Assurance
Requirements which include provisions for submittal for approval of Contractor's
Quality Program documentation, applicable personnel and process qualifications,
and, for major Contractors, the development and submittal of an integrated
Quality Plan which identifies all significant quality verification activities
the Contractor intends to perform to comply with all requirements of applicable
technical specifications and all federal, state and local contractual codes and
standards. The Quality Plan may be in the form of manuals, procedures,
checklists, inspection and test records, logs, etc.
Construction Contractors will have sole responsibility for the quality assurance
and quality control programs relative to their workscope, including the
qualification and oversight of any of their sub-contractors and their work. All
design, construction and installation work performed by Contractors is subject
to tests and
<PAGE>
inspections at any time by Westinghouse. For major Contractors, Westinghouse
will perform a site mobilization audit at an appropriate time to verify the
Contractor's implementation of the Quality Plan submitted and approved for the
project. Findings and observations are formally reported to Contractor
Management with corrective actions assigned and responses and implementation
tracked to close-out.
Additional audits or follow-up reviews are scheduled as appropriate.
4.0 INSPECTION AND TEST PLANS FOR MAJOR ITEMS OF EQUIPMENT SUPPLY
Section III of this plan highlights the primary inspections, tests, and quality
verification activities carried out during procurement and manufacture of
Westinghouse-supplied major components for the Ironwood Power Plant.
The plans that have been included are based on current information available at
time of issue, and are subject to change as project-specific adjustments are
delineated.
<PAGE>
AES IRONWOOD PROJECT
QUALITY PLAN
SECTION II
QUALITY PROGRAM DESCRIPTION
<PAGE>
- --------------------------------------------------------------------------------
Westinghouse Power Generation Quality Program
- --------------------------------------------------------------------------------
Quality has always been an important element of the competitive success at the
Westinghouse Power Generation Business Unit. Over the past decade, Total Quality
Management, a system of "cultural change," has promoted continuous quality
improvement throughout the Business Unit with senior management leading the way
to building quality values into all operations. Our customers have continued to
reap the benefits of quality initiatives that have resulted in one of the
highest Availability and lowest Forced Outage Rate performance records in the
power generation industry.
On December 4, 1992, Westinghouse Power Generation became the first fully
integrated U.S. based business in the power industry to be assessed and
certified to ISO 9001 for "the Design, Manufacture and Service of Steam and
Combustion Turbines and Electric Generators and the Management of Associated
Projects for the Power Generation Industry; and the Design and Manufacture of
Nuclear Steam Generators, Reactor Vessel Internals and Pressurizers" by a world
class ISO Assessor, Lloyd's Register Quality Assurance. Subsequently, the
Business Unit has earned recertification to ISO 9001:1994.
The Quality System requirements are implemented as provided for in the
Westinghouse Power Generation Quality Program Manual. The elements covered in
this manual include:
o Quality Policy
o Organization
o Documentation
o Training
o Commercial Control
o Design Control
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
o Document Control
o Procurement Control
o Planning
o Qualification of Personnel and procedures
o Process Control
o Measuring and Test Equipment Control
o Identification of Materials, Parts and Assemblies
o Examination, Inspection and Test
o Nonconformance Control
o Handling, Storing, Preserving, Packaging and Shipping
o Installation, Startup and Operation
o Product Service Control
o Product & Service Performance Feedback
o Records
o Audits
o Corrective and Preventative Action
o Non-Westinghouse Inspection
The following sections highlight the Westinghouse Quality Program as it relates
to ISO 9001 Quality System Requirements, and are based on our top level Quality
Program Manual, published under separate cover.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
MANAGEMENT RESPONSIBILITY
It is the policy of PGBU that all personnel perform in complete accordance with
Customer and Westinghouse requirements.
Each division and function is responsible for establishing prevention oriented
quality systems and/or requirements that comply with this program.
Each functional department is responsible for establishing specific requirements
for its products, services, operations and activities.
The organization is structured so that attainment of quality requirements is
accomplished by those who have been assigned the responsibility for performing
the work.
Verification of conformance to established quality requirements is accomplished:
o by those who do not have direct responsibility for performing the work
or,
o in conformance to requirements established by those who do not have
direct responsibility for performing the work.
The Director of Quality Assurance is designated as the representative of
executive management in the area of quality and therefore responsible for
coordinating and monitoring the development of the Quality Program; and
monitoring maintenance of the requirements of applicable standards and Customer
requirements.
QUALITY SYSTEM
The activities affecting quality in the functional organizations are documented
in accordance with written systems, procedures, methods, instructions,
specifications and drawings. The documentation is established in distinct levels
that integrate the Quality Program.
For an expanded scope project, procedures shall be developed by Projects to
define the policies, requirements and procedures that are necessary for the
quality related aspects of the site scope of work that is the responsibility of
the Westinghouse divisions.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT REVIEW
During the negotiation phase, the Commercial Functions establish working
relationships with various Customers, architect-engineers, Westinghouse Law
Department, Westinghouse district sales offices, subcontractors and other
Westinghouse Divisions to assure proper information exchange. Additionally, they
maintain constant interface as necessary with the Engineering, Manufacturing,
Purchasing, Service, functional Total Quality organizations and Controller's
Departments within PGBU.
Each function's Total Quality organization participates as required in the
preparation of proposals and Customer meetings when special quality requirements
are involved.
Before acceptance of either a verbal or written contract, the Commercial
Functions are responsible for procedures that assure:
o That agreements or contracts accurately reflect what was negotiated
with the Customer.
o That after acceptance, all requirements and agreements are properly
transmitted to the contract implementers, including changes as they
occur.
For expanded scope projects, the Commercial Functions are responsible for
defining the interface requirements for all participating organizations during
the negotiation cycle. They are responsible for defining and communicating the
requirements relating to each participating organization's role. The Commercial
Functions are responsible for coordinating all interfaces with the Customers and
participating organizations throughout their involvement in the project.
DESIGN CONTROL
Design control of all engineering effort required for the design, manufacturing,
installation and service of the project is the responsibility of the assigned
engineering manager and is provided for by engineering design procedures as
documented in design manuals. These design procedures are structured to ensure
that Customer, marketplace and engineering
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
requirements are correctly converted into manufacturing, installation and
service information in the form of drawings, specifications, data sheets and
other design documentation.
The design engineers are responsible for using their knowledge, training and
experience in conjunction with controlled design procedures to create new
equipment designs or adapt existing designs to meet the requirements of Customer
and engineering specifications. If during the design process the need to deviate
from the Customer specification arises, permission to do so must be sought from
the Customer via the Commercial Function.
Design changes are given the same attention as the original design, including
formal review with other functions on significant changes. These changes will
include those originating with the Customer, within the engineering function due
to applying design improvements, within manufacturing due to error or suggested
improvements, or changes which may originate with suppliers of materials or
components.
Changes are processed using established procedures which document these changes
and the approval of them to assure proper consideration is given to each change.
Design control for the work scope on expanded scope projects is the
responsibility of the subcontracted Engineering organization. The Commercial
Functions, Purchasing and Projects are responsible for the selection of
engineering organizations that have design capabilities to meet Customer
requirements and design control equivalent to that defined in this Quality
Program Manual. Projects is responsible for preparing quality requirement
specifications for such organizations. Purchasing is responsible for including
these specifications in requests for quotations and purchase agreements.
DOCUMENT CONTROL
Control systems are designed to establish requirements for the divisions'
personnel in order to control the issuance of documents, either electronic or
hardcopy, affecting quality such as manuals, drawings, specifications,
procedures and instructions and changes to them at points of issue and use. The
systems provide assurance that changes and updates are visible to the
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
appropriate users and those documents kept for legal or reference purposes are
suitably identified.
It is the responsibility of each functional organization to establish the
control systems for documents provided or utilized by the function.
PURCHASING
Procurement control includes documented procedures to assure appropriate quality
requirements are included or referenced in procurement documents and to assure
that purchased items conform to these quality requirements.
The functional organizations dealing with procurement activities are responsible
for identifying special quality requirements, hold points and inspection
criteria. It is the responsibility of Purchasing to include requisition,
requirements on the purchase order. Changes to purchase orders due to technical
reasons or supplier inputs are required to be reviewed consistent with the
process for the original purchase order. Changes can be initiated by any
functional organization, within their scope of responsibility. Purchasing is
responsible for processing changes and waivers to the requirements of the
purchase order.
Suppliers may be placed on the approved supplier list based on the following
criteria:
o Proven history of satisfactory performance for the same or similar
products.
o Quality audit.
o Trial purchase and testing.
New supplier qualification is the responsibility of a team headed by Total
Quality and including Purchasing and/or appropriate technical support personnel.
Other functions will also participate in supplier qualification as the need
dictates.
Unless qualification is pursued using a trial purchase and testing approach, an
audit is performed on new suppliers of other than catalog items and
miscellaneous supplies. The
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
evaluation includes a determination of the supplier's capability to meeting
Westinghouse Quality Program requirements. Nonconformances found which would
preclude performance to the quality requirements are either corrected prior to
purchase from the supplier or by agreement from the supplier that such
nonconformances will be corrected per a definite schedule.
On expanded scope contracts, subcontractors will be identified to provide
designs, systems, products, construction and/or services. These subcontractors
must have quality programs that demonstrate capability equal to that described
in the Quality Program Manual and capability to conform to the Customer contract
requirements. They are responsible for the quality of their products and
activities.
CUSTOMER SUPPLIED PRODUCTS
The Commercial Functions are responsible for negotiating arrangements with
Customers for work on Customer's products at either the Customer's site or a
PGBU location. This responsibility includes the definition of terms, conditions
and requirements for the negotiated work scope. Functional organizations
performing the work are responsible for control of the Customer's product during
the work scope and for reporting any condition outside the defined work scope to
the Commercial Function for resolution with our Customers.
PRODUCT IDENTIFICATION &
TRACEABILITY
Systems are established and documented to assure the positive identification of
materials, parts, and assemblies to applicable technical documents. The
identification system will give consideration to placement of markings for ease
in identification during assembly and maintenance.
When codes, standards or specifications require traceability of parts, materials
or service to specific operation, inspection or test records; systems have been
established to provide positive assurance and records of identity.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Subcontractors performing work on expanded scope projects shall have formal
procedures that define the requirements for the identification of materials,
parts and assemblies. They shall address the measures to assure that only
correct and accepted items are used and that each item relates to the applicable
document that authorizes its use. Projects is responsible for defining
identification requirements in specifications to be included in the purchase
agreement with the subcontractor.
PROCESS CONTROL
Special processes for power generation products are defined as manufacturing or
test operations that do not provide a product having readily measurable quality
characteristics. For those cases, process parameter control and operator
competency are critical to maintaining product quality. Special processes are
identified by Customer order requirements, design requirements, the ASME code or
by internal program requirements. In such cases, the procedures and/or the
personnel performing the work are formally qualified. The appropriate functional
manager is responsible for developing procedures for establishing and
maintaining qualification programs.
Suppliers of equipment made to Westinghouse drawings are required to perform
special processes in accordance with the requirements of Westinghouse
specifications or have alternate specifications approved by Engineering.
Source/Product Assurance is responsible for assessing the supplier's capability
to control and monitor these special processes.
Vendor and subcontractor personnel performing operations that require
qualification shall be identified by the requisitioner on drawings,
specifications, other technical documents or on the purchase requisition or
contract document. Adherence to the qualification requirements shall be
monitored by the functional organizations involved with vendors and
subcontractors through the approval of vendor documentation, vendor audit,
source inspection and receiving inspection programs.
Subcontractors performing work on expanded scope projects are required to have
formal procedures for special process control that define the requirements for
documentation,
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
performance and subsuppliers. Engineering is responsible for defining special
process control requirements in specifications to be included in the purchase
agreement with subcontractors.
Subcontractors performing work on expanded scope projects shall have formal
qualification procedures for the personnel, process and equipment that relate to
activities that do not have readily measurable quality levels.
INSPECTION AND TESTING
The examination, inspection and test procedures for Business Unit products are
developed and implemented to provide assurance that the requirements of the
drawings, specifications, Customer order documents and applicable codes have
been satisfied.
The functional organizations are responsible for determining the degree and
location (i.e., receiving area or supplier facility) of purchased material
verification prior to release. They assure development of inspection and/or test
plans, may perform the inspection and/or test, and determine the disposition of
the purchased item. It is Purchasing's responsibility to obtain notification
from the supplier of inspection and/or test occurrence and notify the functional
organization.
The basic responsibility for performing the necessary verifications of product
quality rests with the supplier. The functional organizations establish
procedures to evaluate the supplier's performance. They include supplier
document submittal, source inspection, receiving inspection and test witness.
The method for generation and submittal of required supplier objective evidence
(e.g., test reports, certificates of conformance, etc.) is specified in the
purchasing documents. Such requirements are identified on the applicable drawing
or specification or added to the purchase order as a special note.
Subcontractors performing work on expanded scope projects shall have formal
procedures that define the requirements for examination, inspection, test
activities and control of nonconformances. Projects is responsible for defining
examination, inspection and test
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
requirements in specifications to be included in the purchase agreement with
subcontractors. The specification should also define interface requirements for
the resolution of nonconformances. Projects shall also establish quality plans
for the construction scope of work at the site and assure the implementation of
these plans.
INSPECTION, MEASURING, AND TEST
EQUIPMENT
Procedures have been established which require that all precision measuring
tools, gauges, indicating and recording instruments, test software, and other
measuring devices which are used to verify product quality are maintained and
periodically calibrated for accuracy against recognized standards.
Organizations that utilize measuring and test equipment to verify product
quality are responsible for establishing and maintaining a calibration program.
This program shall address as a minimum the items that are used to verify
product/service conformance and for which an out of calibration condition could
significantly impact cost, the outgoing quality level, reliability or
performance. It is the responsibility of the organizations to identify the
measuring equipment they use for performing process operations.
The functional organizations involved with measuring and test equipment control
are responsible for assuring that the calibration system is documented,
calibration procedures are maintained, and calibration of such equipment and all
primary and secondary standards used during the calibration process is verified.
Subcontractors performing work on expanded scope projects shall have formal
procedures that define the requirements for the control of measuring and test
equipment. They shall define the requirements for calibration, storage, use and
documentation of such equipment. Projects is responsible for defining measuring
and test equipment control requirements in specifications to be included in the
purchase agreement with the subcontractors.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INSPECTION AND TEST STATUS
Measures are established to allow determination of the inspection and test
status of materials, parts and assemblies during all processing stages. Systems
also provide objective evidence of inspections and tests performed.
Before final release of products, the responsible functional organizations
ensure a system exists that will, as a minimum, verify that all tests and
inspections have been completed, all nonconformances been resolved, all quality
requirements have been met and the product release document has been completed.
Documentation that describes, defines and verifies that the product conforms to
the design and quality requirements is available for submittal as required by
contract. This documentation is also available for review on-site. Typical
documents of this category are test reports, inspection records, material
certifications and special process reports.
CONTROL OF NONCONFORMANCES
A nonconformance is production material, product, or a service which varies from
requirements as defined by contract, drawing, specification, procedure, process
or quality standard. A nonconformance report may be initiated by personnel
performing in-factory inspections, field service inspections, source
surveillance audits or by subcontractor and/or material suppliers. The completed
report provides a statement of the requirement, a complete definition of the
nonconformance and the final disposition.
Suppliers, subcontractors, architect-engineers, constructors and major material
suppliers shall have procedures for documenting and resolving nonconformances.
Functional Total Quality organizations dealing with contracted organizations are
responsible for defining nonconformance control system requirements in
specifications to be included in the purchase agreement with the participating
organizations.
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<PAGE>
- --------------------------------------------------------------------------------
A manufacturing nonconformance is designated Customer Sensitive if the item
being dispositioned is Customer owned or if the acceptance and use of an item
outside of the design or drawing tolerance could adversely affect one of the
following:
o Reliability
o Interchangeability
o Performance
o Appearance
o Interface parameters with other equipment
Engineering identifies the Customer Sensitive status in the course of their
disposition analysis.
The Projects or Commercial Functions are responsible for determining the
commercial implications of the situations and resolving them with the Customer.
CORRECTIVE ACTION
Corrective and preventative action is the closed loop system which defines
deficiencies discovered in process or product, identifies the root causes of the
deficiency and plans, schedules and ensures effective implementation of
solutions and appropriate preventative measures. Areas for improvement are
identified through the gathering of data from various sources and the analysis
of such data.
The responsibility for the necessary corrective action lies with the manager of
the functional department(s) responsible for the root cause(s) of the problem.
The functional manager responsible for the corrective action is responsible to
obtain the necessary participation of other functional organizations.
It is imperative that the corrective and preventative actions effort be
documented and maintained by each impacted functional department. The
documentation shall be so maintained that each problem and the corresponding
corrective and preventative action is
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
readily accessible and the follow-up to verify implementation may be performed.
When new issues are identified, past corrective and preventative efforts on
similar problems shall be readily obtainable.
HANDLING, STORAGE, PACKAGING,
PRESERVATION AND DELIVERY
Cleaning, packaging, and preservation for shipment is performed in accordance
with documented instructions, procedures or drawings.
It is the responsibility of Engineering to document the requirements for
preservation in drawings, specifications or instructions. These requirements
include preservation provisions for both long- and short-term storage.
Manufacturing is responsible for accomplishing the work, including cleaning,
packaging, marking, labeling and preserving. Purchasing is responsible for
transmitting shipping requirements to vendors and determining their capability
to meet them. The Transportation Department is responsible for defining methods
that assure integrity of products during delivery to their destination and for
monitoring conformance to those methods.
Subcontractors performing work on expanded scope projects shall have procedures
that address requirements for the handling, storing and shipping of products
they provide.
The organization contractually responsible for storage and installation is
responsible for monitoring the preservation and storage conditions of products
and reporting nonconformance conditions to the appropriate technical
organization for resolution.
QUALITY RECORDS
Records are prepared as work is performed to furnish documentary evidence of the
quality of products and of the accomplishment of activities affecting quality.
Records are consistent with applicable codes, standards, specifications and
contracts and are used in management of the Quality Program.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Records which are to be submitted to Customers are required by contract or to
authorized inspection agencies are to be copied and formally transmitted with a
record of transmittal retained. The department responsible for the transmittal
is responsible for maintaining the record of transmittal.
Functional managers determine how long the records for which their departments
are responsible are to be retained at each retention level. These periods shall
be no shorter than minimum retention period specified in the Westinghouse
Corporate Controller's Manual guidelines for the type of record.
INTERNAL QUALITY AUDITS
The Business Unit maintains a planned and documented audit program. This
two-part program is comprised of functional organization internal audits and
overall PGBU Quality Program Audits.
o Functional Organization Internal Audits - Each functional organization
is required to maintain a self-audit program. This program will verify
that the functional organization is meeting its responsibilities as
defined in the Quality Program Manual, and the procedures used to meet
those responsibilities are being utilized according to the
organization's documented procedures.
o PGBU Quality Program Audits - The Director of Total Quality will assess
the content of and adherence to the policies and procedures of the
Quality Program Manual by the functional organizations. Results of
audits of the functional organizations performed both externally and
internally will be utilized in the assessment. The Director of Total
Quality is responsible for maintaining this overall PGBU quality
program audit system and elevating audit results to appropriate
Business Unit management for review.
TRAINING
The Training Program is a vital part of the implementation and maintenance of
the Quality Program.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
The Quality Program is designed to ensure that employees are qualified to
perform their jobs. This two-step process begins by placing individuals with the
appropriate background in specific positions. The PGBU Training Program then
ensures that employees increase their proficiency in their current job and are
prepared for future opportunities and increased responsibilities.
SERVICING
Systems and procedures are established which provide for the technical support
necessary for the operation, maintenance, modifications and repairs to turbine
generator products during their operational life. These system and procedures
result in having thorough instruction for and complete and accurate records of
modifications and repairs made on the products under the jurisdiction of the
Business Unit.
STATISTICAL TECHNIQUES
Process control is primarily achieved through the use of statistical approaches.
Continuous improvement in processes results from reduction of process
variability and proper process aim. Statistical techniques provide the
understanding for addressing process variability and aim. Systems have been
implemented to utilize statistical techniques in activities throughout Power
Generation. These systems are defined in procedures contained in the appropriate
manuals. In addition, training and operation procedures in statistical process
management is integrated into our normal course of business.
- --------------------------------------------------------------------------------
<PAGE>
AES IRONWOOD PROJECT
QUALITY PLAN
SECTION III
INSPECTION AND TEST PLANS FOR
MAJOR ITEMS OF EQUIPMENT SUPPLY
<PAGE>
- --------------------------------------------------------------------------------
Westinghouse Inspection and Test Plan-
AES Ironwood Equipment Supply
- --------------------------------------------------------------------------------
This Inspection and Test Plan contains
listings of typical inspection and test
operations carried out during the
procurement and manufacture of
Westinghouse-supplied power generation
equipment to provide assurance that all of
the Westinghouse and AES requirements have
been satisfied. These specific inspections
and tests for Westinghouse power
generation products are developed and
implemented from drawings, specifications,
customer order documents and applicable
codes and standards, specifying controlled
processes and evaluated against objective
criteria for acceptance. Westinghouse
recognizes our customers' desire to
understand and participate in the systems
for assuring product quality. We provide
this plan as an overview, to give our
customers visibility of the inspections
and tests which we will implement in
fulfilling their order. At the same time,
this plan may serve as a guideline for
customer involvement in our quality
verification process.
BACKGROUND Westinghouse Design & Manufacturing
Standards
Westinghouse turbine and generator
equipment and systems are designed and
manufactured to standards and practices
that, over many years have been developed
and qualified for these specific
applications, and that incorporate
applicable portions of recognized
international standards. These rules and
standards have been used successfully for
all Westinghouse turbine generator
equipment sold within the United States
and in many other countries through the
world.
Westinghouse does meet those
internationally recognized standards that
have been interpreted to be applicable to
turbines and generators for power house
applications in the US, including certain
standards published by organizations such
as ASME, ANSI, IEEE, and NEMA.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Materials
Westinghouse specifies the materials to be
utilized in turbines and generators in
accordance with standards developed over
years of research, testing and application
experience. These standards meet and often
exceed their ASTM or ASME counterparts,
primarily because Westinghouse
requirements are more restrictive and
require additional or different testing
than the nationally recognized
specifications, when applied to
Westinghouse products
WELDING AND FABRICATION
Turbines & Generators
Turbines, generators and their integral
piping have been historically excluded
from the scope of the ASME/ANSI Codes.
Westinghouse has therefore continue over
time, to develop and improve our methods
and criteria for fabrication and welding,
often drawing on the strengths of the
existing codes as baselines. The
Westinghouse system of proprietary Process
Specifications for welding, forming, heat
treating and inspection, are based on
recognized codes, such as; ANSI/ASME
B31.1, ASME Section VIII, Division 1, ASME
Section IX, ASME Section V, ASTM and ASNT.
Any differences are usually slight, but
always based on years of research, testing
and experience, and optimized to yield the
highest practical levels of performance
and reliability in Westinghouse
applications.
AUXILIARIES, STRUCTURES, BALANCE-OF-PLANT,
SUPPORT SYSTEMS
Additional equipment in the Westinghouse
scope of supply will be designed and
manufactured in accordance with applicable
codes, standards, and regulations in
effect for the installation site.
Typical US requirements would include:
Code stamping of boilers and vessels per
ASME Sections I and VIII
Piping Systems in accordance with
ANSI/ASME B31.1
Structural welding per AWS D1.1
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<PAGE>
- --------------------------------------------------------------------------------
Welding qualifications per ASME IX or AWS
Electrical design per IEEE, NEMA, NEC
WESTINGHOUSE Westinghouse believes very strongly in the
GSD INSPECTION & concept of Process Control and
TEST PHILOSOPHY Verification, as applied to the allocation
of inspection and test resources. The
concept, put very simply, is that
everything is done according to a process.
A process consists of inputs, internal
actions, and deliverables. A process with
well defined inputs and controlled
internal actions, will invariably yield
deliverables of a predictable nature.
Westinghouse Generation Systems Divisions
has structured its programs to maximize
the integrity of "Inputs" and verify the
consistency of "Internal Actions", as the
primary means to assure the quality of our
"Deliverables".
This concept is one of the many valuable
lessons learned resulting from the
Business Unit certification to ISO 9001 by
Lloyd's Registry. By concentrating our
efforts to define and control processes,
we are able to realize improvements in
productivity while still maintaining the
high standards of performance and
reliability which made Westinghouse a
world leader in Power Generation.
CUSTOMER PROCESS VERIFICATION
Westinghouse encourages customers to visit
our factories or supplier facilities to
observe and participate in the process
verification activities being conducted on
similar types of equipment or components.
Westinghouse believes this arrangement is
advantageous to our customers because they
are able to schedule their visits at their
convenience, rather than be under the
limitations of a production schedule.
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<PAGE>
- --------------------------------------------------------------------------------
In addition, since some power block,
auxiliary and support components are
manufactured under a stocking program, it
affords the customer the opportunity to
review their choice of test or inspection
verifications on similar apparatus, even
though the customer's order may be in a
different stage of manufacture.
Inspections and tests on Westinghouse-
supplied equipment are conducted in
accordance with documented procedures or
instructions and evaluated against
established criteria. Results of
inspections and tests are documented and
retained. While visiting the facilities of
Westinghouse and our suppliers, customer
representatives are afforded free access
to review all inspection and test
documentation then available for their
specific equipment. This review may
include any of the proprietary
manufacturing drawings, Process and
Material Specifications that apply to
their equipment. Records of critical
inspections and tests may be assembled and
transmitted to the customer as a "Quality
Records Package" at the conclusion of the
order.
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<PAGE>
- --------------------------------------------------------------------------------
GUIDELINES FOR The subsequent pages delineate inspections
APPLICATION and tests for subsystems of the AES
Ironwood scope of supply in matrix form.
Definition of Column Headings
-----------------------------
Ref. No. Used to reference a
particular component or
process of a subsystem.
Not always listed in
operational sequence.
Component Name or description of
item. May refer to
assembly or process
activities.
Inspection and/ May also refer to a
Or Test series of in-process
activities, spanning
multiple shifts, or
days.
Criteria Primary source(s) of
information on which
evaluation is based.
For activities
performed in
Westinghouse
facilities, criteria
will usually be
proprietary drawings
and Process/Test
Specifications, all of
which are available for
Customer review during
verification visits.
Verification Method or vehicle by
which inspection/test
results are recorded or
transmitted.
Location Place of inspection or
test. For clarity, it
will be either
"Westinghouse" or
"Supplier". Actual
geographic location
will vary.
Comments Suggested Witness
points are indicated
for which advance
notification can be
given for AES to
observe certain quality
verification
activities.
- --------------------------------------------------------------------------------
<PAGE>
GSD INSPECTION AND TEST PLANS
<TABLE>
<CAPTION>
CONTENTS Rev.: 0
AES Ironwood - 2 x 1 501G Combined Cycle Power Plant Date: 5/12/98
- ------------------------------------------------------------------------------------------------------------------------------------
Subsystem Description # of Pages Revision & Date
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<S> <C> <C> <C> <C> <C>
501G 501G Combustion Turbines 4 0 5/12/98
HCGN Hydrogen-Cooled Generators - 2 Combustion Turbine and 1 Steam Turbine 3 0 5/12/98
MECH Combustion Turbine Mechanical Packages 1 0 5/12/98
SPKG Combustion Turbine Starting Packages 1 0 5/12/98
EPKG Combustion Turbine Electrical Packages 1 0 5/12/98
KBAC Combustion Turbine Rotor Air Coolers - Typical 1 0 5/12/98
HIST HP/IP Steam Turbine 3 0 5/12/98
LPST LP Steam Turbine 2 0 5/12/98
HRSG Heat Recovery Steam Generators 2 0 5/12/98
COND Steam Turbine Condenser 1 0 5/12/98
SLOS Steam Turbine Lube Oil Supply System 1 0 5/12/98
BFDP Boiler Feedpumps 2 0 5/12/98
MXFR Main Step-Up Transformers 1 0 5/12/98
WDPF WDPF Unit Integrated Control System 1 0 5/12/98
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
INSPECTION AND TEST PLAN
<TABLE>
<CAPTION>
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: 501G W501G Combustion Turbine Date: 5/12/98
Page: 1 of 4
Documents referenced are latest
rev. unless listed otherwise.
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Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
501G-1 Spindle Forgings Chemical composition Material Mtl. test Supplier
and Mechanical specification rpt./cert.
properties test
NDE after heat treatment W - process spec. Test report Supplier
In process visual and W - drawing Insp. forms Supplier
dimensional checks
NDE after final machining W - process spec. Insp. forms Supplier
501G-2 Discs & Torque Tubes Chemical composition and Material Mtl. test Supplier
Mechanical properties tests Specification rpt./cert.
NDE after heat treatment W - process spec. Insp. forms/cert. Supplier
In-process visual and W - drawings Insp. forms Supplier
dimensional checks
NDE after final machining W - process specs Insp. forms Supplier
501G-3 Turbine and Chemical composition and Material Mtl. test Supplier
Compressor Blading Mechanical properties checks specifications rpt./cert.
NDE as required W - drawings/specs Insp. forms/cert. Supplier
Visual & dimensional checks W drawings Insp. forms Supplier
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</TABLE>
<PAGE>
INSPECTION AND TEST PLAN
<TABLE>
<CAPTION>
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: 501G W501G Combustion Turbine Date: 5/12/98
Page: 2 of 4
Documents referenced are latest
rev. unless listed otherwise.
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Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
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<S> <C> <C> <C> <C> <C> <C>
501G-4 Turbine/Compressor Verify bolt stretch W-drawings/process Insp. forms Westinghouse
Stack specs
Radial runout of unbladed W-drawings/process Insp. record Westinghouse
Rotor assembly specs
Electrical/mechanical W-drawing/process Insp. record Westinghouse
Runout inspection specs
Total rotor balance W-drawing/process Insp. record Westinghouse Witness point
spec
501G-5 Cylinder Castings Chemical & mechanical Material/process Material Supplier
And Fabrications Properties check incl. specs certifications
stress
Relief of fabrications
Nondestructive W-process Insp. forms Supplier
examination specs
Visual/dimensional W-drawings Insp. forms Supplier
checks
Check horizontal & W-drawing/process Insp. forms Westinghouse
vertical spec
Joint flatness
surface finish
Finish machine W-drawings Insp. forms Westinghouse
dimensional
inspection
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</TABLE>
<PAGE>
INSPECTION AND TEST PLAN
<TABLE>
<CAPTION>
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: 501G W501G Combustion Turbine Date: 5/12/98
Page: 3 of 4
Documents referenced are latest
rev. unless listed otherwise.
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Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
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<S> <C> <C> <C> <C> <C> <C>
501F-6 Turbine Vane Verify material properties Material Insp. forms, Supplier
Segments specifications certifications
NDE when specified W-drawing Insp. forms Supplier
Visual/dimensional checks W-drawing Insp. forms Supplier
NDE after stress relief Of W-drawing/process Insp. forms W/Supplier
assemblies spec
Finish machine dim. insp. W-drawings Insp. forms W/Supplier
Coating insp and air W-drawings/process Insp. forms W/Supplier
flow test spec
Where required
501G-7 Combustor Baskets Verify material properties Material Insp. forms Supplier
specifications
In-process checks of Spot W-process Insp. forms Supplier
Welding operations specifications
Nondestructive examination W-process Insp. forms W/Supplier
specifications
Visual & dimensional checks W-drawings Insp. forms W/Supplier
501G-8 Compressor Verify material properties Material Insp. forms, Supplier
Diaphragms specification certifications
Visual & dimensional checks W-drawings Insp. forms Supplier
NDE where required W-drawing/process Insp. forms W/Supplier
specs
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</TABLE>
<PAGE>
INSPECTION AND TEST PLAN
<TABLE>
<CAPTION>
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: 501G W501G Combustion Turbine Date: 5/12/98
Page: 4 of 4
Documents referenced are latest
rev. unless listed otherwise.
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Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
501G-9 Engine Assembly Verify concentricity W-drawing/process Insp. forms Westinghouse
of Cylinder bores specs
with inlet and Exhaust
bearing bores
Charting of blade ring, W-drawing/process Insp. record Westinghouse
vane & Ring segment spec
circumferential
Clearance
Charting of rotor radial W-drawing/process Insp. record Westinghouse Witness point
and Axial clearances to spec
Diaphragms, vanes &
seals
Verify cleanliness of oil W-drawing/process Insp. form Westinghouse
Passages, flow areas & spec
air Piping
Verify preservation on port W-drawing/process Insp. forms Westinghouse
Openings, bearings and specs
thrust Assemblies
Verify engine preservation W-drawing/process Insp. forms Westinghouse
And Packaging specs
Final pre-shipment Checklists, docum. Inspection forms, Westinghouse Witness Point
inspection review C of C
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</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSPECTION AND TEST PLAN
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: HCGN Hydrogen Cooled Generator Date: 5/12/98
Page: 1 of 3
Documents referenced are latest
rev. unless listed otherwise.
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Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
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<S> <C> <C> <C> <C> <C> <C>
HCGN-1 Rotor Body Chem. & mech. properties verif. Material specification Mtl. test rpts, Supplier
certificates
Ultrasonic examination W-process specifications Test report, Supplier
certification
Visual/dimensional checks W drawings Insp. forms Supplier
Dimensional/concenticity Checks W dwg/process specs Insp. forms Westinghouse
Dimensional charting during W dwg/specifications Insp. forms Westinghouse
slotting & machining, release
for winding
HCGN-2 Retaining Rings Chem. & mech. Properties verif. Material specifications Mtl. test rpts, Supplier
certification
Ultrasonic examination W process specifications Test report, Supplier
certification
Visual/dimensional checks W drawings Insp. forms Westinghouse
After machining
Penetrant examination W process specification Insp. forms Westinghouse
HCGN-3 Rotor Coils In-process checks of forming, W dwgs/process specs Insp. forms, West./Supplier
insulating, baking, brazing, checklists
Dimensions, electrical testing
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSPECTION AND TEST PLAN
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: HCGN Hydrogen Cooled Generator Date: 5/12/98
Page: 2 of 3
Documents referenced are latest
rev. unless listed otherwise.
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Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
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<S> <C> <C> <C> <C> <C> <C>
HCGN-4 Rotor Winding Ground test of cells, axial & W Insul/process specs Insp. forms Westinghouse
Radial leads
Dimensional winding checks W dwg/process specs Insp. forms, Westinghouse
checklists
In-process electrical checks, W Insulation/test specs Insp. forms, Westinghouse
Pole balance, dielectric test checklists
HCGN-5 Rotor Assembly Dimensional charting, checks W dwgs/process specs Insp. forms, Westinghouse
checklists
Season, balance & overspeed W Insul/process specs Insp. forms, Westinghouse Witness
test rpts. Point
Insul. resistance & hi-pot test W Insul/test spects Test report Westinghouse Witness
Point
HCGN-6 Stator Core Visual/dimensional checks, W dwg/process specs Insp. forms, Suuplier/W
Assembly NDE of frame fab/machining checklists
In-process checks; punchings, W dwgs/process specs Insp. forms, Westinghouse
Core building checklists
Dimensional & thermographic W dwgs/test specs Insp. forms, Westinghouse
Inspection of finished core test reports
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSPECTION AND TEST PLAN
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: HCGN Hydrogen Cooled Generator Date: 5/12/98
Page: 3 of 3
Documents referenced are latest
rev. unless listed otherwise.
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HCGN-7 Stator Coils In-process checks; forming, W drawings, material Insp. forms, West./ Supplier
insulating, curing, geometry, Specs, Insulation and checklists
Coatings, turn & grnd testing Test/process specs
HCGN-8 Stator Winding In-process winding/elec. tests, W dwg/Insul/test specs Insp. forms, Westinghouse
flow test checklists
El Cid test of wound stator W process/test specs Test report Westinghouse
High-potential test W Insul/test spec Test report Westinghouse
HCGN-9 Final Generator Assy checks; rotor installation, W dwgs/process specs Insp. forms, Westinghouse
Assy Air gap, bearing assy, checklists
Alignments, clearances
Air test W dwg/process spec Insp. forms Westinghouse
Final electrical tests, winding W Insul/test specs Insp. forms, Westinghouse Witness
resistance, RID tests checklists Point
Final Insp, docum. complete, W dwgs/process specs Insp. forms, Westinghouse Witness
Foreign object insp., preserve, checklists, Point
Packing, rel. for shipment Quality Release
HCGN-10 Static Exciter Collector assy, bal, elec. checks W dwgs/process specs Insp. forms, Supplier/West.
checklists
Controls checks: amplifier, ANSI, IEEE, NEMA stds, Insp. forms, Supplier/West.
firing circuit, logic test, design specifications checklists
Insulation test, control circuit
& continuity tests, shop
acceptance test
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSPECTION AND TEST PLAN
Inspection & Test Plan for: AES Ironwood
Rev.: 0
Subsystem: MPKG Lube Oil Supply System Date: 5/12/98
Page: 1 of 1
Documents listed are latest
revision unless otherwise stated
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MPKG-1 Bedplate and Overall dimensions Drawings, tech specs, Per Supplier's Supplier/
Enclosure Door & seal operation codes & standards, Quality Program sub-supplier
Check sealing, fittings, paint Mfr's procedures
Check stairs, platform assy
MPKG-2 Component Verify proper installation of Drawing, tech specs, Per Supplier's Supplier/
Installation pumps, valves, cabinets, component installation Quality Program sub-supplier
instrumentation instructions
MPKG-3 Piping & Tubing Checks for: cleanliness, Drawings, tech specs, Per Supplier's Supplier/
alignment, gasketing, tightening codes & standards, Quality Program sub-supplier
of bolts and fasteners, Mfr's procedures
fittings, pipe supports
MPKG-4 Electrical Verify cable runs, terminations, Drawings, tech specs, Per Supplier's Supplier/
Services instrument hook-ups, conduits & codes & standards, Quality Program sub-supplier
trays Mfr's procedures,
Check marking & tagging contract requirements
MPKG-5 Final Assembly Shop test when specified Test Specification Test Checklist Supplier/
sub supplier
Final inspection, paint, Drawings, tech specs, Insp. Forms, Supplier/
preserve, prep for shipment, codes & standards, documentation sub supplier
completeness Mfr's procedures, per Supplier's
contract requirements program, Source
Surveillance
report
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSPECTION AND TEST PLAN
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: SPKG Starting Package & Starting Motor Date: 5/12/98
Page: 1 of 1
Documents referenced are latest
revision unless noted otherwise
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SPKG-1 Materials:
Torque Converter Verif unit characteristics Eng. spec, dwgs Per Supplier's QC prgm Supplier/Sub-suppl
Clutch Verif unit characteristics Eng. spec, dwgs Per Supplier's QC prgm Supplier/Sub-suppl
Control & lube Verif proper materials Eng. spec, dwgs Per Supplier's QC prgm Supplier/Sub-suppl
systems
Bedplate & Verify proper materials Eng. spec, dwgs Per Suppliers' QC prgm Supplier/Sub-suppl
Enclosure
Starting Motor Verify configuration, rating Motor spec, dwgs Test rpt, perf curves Supplier/Sub-suppl
SPKG-2 Assy & Test, In-process insp; welding, Mfrs specs, dwgs Doc. per manuf. QC prgm Supplier
final insp. wiring, vis & dim.
T.I.R. on connecting points Eng. spec, dwgs Supplier's data form Supplier
Pressure check of piping Eng. spec, ANSI Supplier's data forms Supplier
B31.1
Electrical checks Eng. spec, NEC, per Supplier's QC prgm. Supplier
dwgs
Verify cleaning, painting, Eng. spec, dwgs Insp. forms, checklist, Supplier
preservation, dimensional, Source Surveillance
tagging, marking report
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSPECTION AND TEST PLAN
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: EPKG Electrical Package Date: 5/12/98
Page: 1 of 1
Documents referenced are latest
revision unless noted otherwise
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EPKG-1 Enclosure Overall dimensions Design Spec, Insp. checklist Supplier
Check inside wall finish mfrs dwgs.
Door & seal operation
Battery compartment seals,
venting
Overall sealing & drainage
Check bolting, painting
EPKG-2 Electrical Services Verify light fixture locations Design spec. Insp. checklist Supplier
Check wiring, conduits elec. code,
Check drops into cabinets Manuf. Drawings
Verify fire protection install.
Check install. of air cond.
Check install. of grnd. assy
EPKG-3 Cabinet Installation Verify cabinet location Design spec, Insp. checklist Supplier
Check bolting, wall mounting elec. code,
Verify cut-outs grommeted grounding spec,
Verify cabinets grounded mfr's and
sub-supplier dwgs.
EPKG-4 Wiring Verify correct materials Elec. code, Design Insp. checklist, Supplier
Check terminations, marking spec. doc. per
Check neatness, routing Mfr's dwgs, wiring Supplier's QC
Check labels & continuity list prgm, Source
Insp. report
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
INSPECTION AND TEST PLAN
<TABLE>
<CAPTION>
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: KBAC Kettle Boller Rotor Date: 5/12/98
Cooling Air Coolers Page: 1 of 1
Documents referenced are latest
rev. unless listed otherwise.
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
KBAC-1 Materials: Tubes Verify proper material Design spec, ASME, Matl. Supplier
ASTM ASME VIII, Certification
Div. 1
Heads Verify proper material Design spec, ASME, Matl. Supplier
ASTM ASME VIII, Certifications
Div. 1
Tubesheets Verify proper material Design spec, ASME, Matl. Supplier
ASTM ASME VIII, Certifications
Div. 1
Shells, connections Verify proper material Design spec, ASME, Matl. Supplier
ASTM ASME VIII, Certifications
Div. 1
Support Structure Verify proper material Design spec, UBC, Matl. Supplier
ASTM Certifications
KBAC-2 Cooler fabrication In-process insp: Fit-up, Design spec, weld Data forms, Supplier
welding, vis/dim, NDE, specs, ASME Inspection forms,
cleaning, assembly VIII & IX checklists,
travelers
Support Structure Fit-up, welding, vis/dim, Design & welding Checklists, Insp. Supplier
cleaning specs, AWS D1.1 forms, travelers
KBAC-3 Assy & Test, final Hydrotest Design spec, ASME Test report, Supplier
Insp. VIII Form U1A
Drain, clean, paint, Design
preserve specification
Verify cleaning, painting, Design spec, dwgs, Insp. forms, data Supplier
preservation, dimensional, Supplier outline sheets, Source
nameplate data dwg. ASME VIII, Surveillance
Div. 1 report ASME form
U1A, nameplates
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
INSPECTION AND TEST PLAN
<TABLE>
<CAPTION>
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: HIST HP/IP Steam Turbine Date: 5/12/98
Page: 1 of 3
Documents referenced are latest
rev. unless listed otherwise.
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HIST-1 Rotor Chem. composition/mech. Material Mtl. test rpt./ Supplier
Properties verification Specification certificatio
Thermal stability test W-specification Test report Supplier
Ultrasonic examination W-mtl./process Test report Supplier
specs
Visual/dimensional checks W-drawing Insp. forms Supplier
NDE after machining W-dwgs/process Insp. report Westinghouse
specs
Visual/dimensional checks W-drawings Insp. forms Westinghouse
In-process blading checks W-dwgs/process Insp. forms Westinghouse
specs
Balance & overspeed test W-process Test report Westinghouse Witness Point
specifications
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
INSPECTION AND TEST PLAN
<TABLE>
<CAPTION>
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: HIST HP/IP Steam Turbine Date: 5/12/98
Page: 2 of 3
Documents referenced are latest
rev. unless listed otherwise.
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HIST-2 Rotating Blades Verify chemical/mechanical Material Mtl test W or Supplier
Properties specifications rpt/certification
Nondestructive examination W dwgs/process Insp. forms W or Supplier
specs
Visual/dimensional checks W dwgs/process Insp. forms Westinghouse
specs
HIST-3 Stationary Blading Verify material properties Material Test rpts/ Supplier
specifications certifications
Visual/dimensional checks W-dwgs/process Insp. forms Westinghouse
specs
HIST-4 Blade Rings & Verify chem/mechanical Material Mtl test rept/ Supplier
Dummy Rings Properties specifications certification
Nondestructive Examination W-dwg/process Insp. forms Supplier
specs
Visual/dimensional checks W-drawings Insp. forms Westinghouse
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
INSPECTION AND TEST PLAN
<TABLE>
<CAPTION>
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: HIST HP/IP Steam Turbine Date: 5/12/98
Page: 3 of 3
Documents referenced are latest
rev. unless listed otherwise.
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HIST-5 Nozzle Chambers Chem. composition & Material Mtl test reports Supplier
Mechanical properties test specification
Nondestructive examination W specs/dwgs Insp. forms Supplier
Visual/dimensional checks W dwgs/process Insp. forms Supplier or W
specs
NDE of connection welds W process specs Insp. forms Westinghouse
HIST-6 Outer & Inner Material properties Material Mtl. test report Supplier
Cylinders verification specifications
Nondestructive examination W dwgs/process Insp. forms Supplier / W
specs
Visual/dim. Inspections W dwgs/ Insp. forms Westinghouse
specifications
HIST-7 HP/IP Turbine Assy Verify alignments, W dwgs/process Insp. forms, Westinghouse
clearances, Elevations specs checklists
Final inspection, release W dwgs/ Ins. forms, Westinghouse Witness Point
For shipment (operations & specifications checklists,
Documentation complete, Quality Release
Preservation & packaging)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
INSPECTION AND TEST PLAN
<TABLE>
<CAPTION>
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: LPST LP Steam Turbine Date: 5/12/98
Page: 1 of 2
Documents referenced are latest
rev. unless listed otherwise.
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LPST-1 Rotor Chemical & mechanical Material Mtl. test report Supplier
Properties verification specification
Ultrasonic Examination Mtl. spec/drawing Test report Supplier
Thermal stability test Mtl. spec/process Test report Supplier
spec
Visual/dimensional checks W drawing Insp. forms Supplier
NDE after machining W dwgs/process Insp. forms Westinghouse
specs
Visual/dimensional checks W drawings Insp. forms Westinghouse
In-process blading checks W dwgs/process Insp. forms Westinghouse
specs
Balance & overspeed test W process Test report Westinghouse Witness Point
specifications
LPST-2 Rotating Blades Material properties verif. Material Mtl. test Supplier
specifications rpt/certs
Nondestructive examination W dwg/process Insp. reports Westinghouse
specs
Visual/dimensional checks W dwgs/ Insp. forms Westinghouse
specifications
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSPECTION AND TEST PLAN
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: LPST LP Steam Turbine Date: 5/12/98
Page: 2 of 2
Documents referenced are latest
rev. unless listed otherwise.
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LPST-3 Stationary blades Material properties verif. Material mtl. certif/ Supplier
specifications test data
Visual/dimensional checks W dwgs/process Insp. forms Westinghouse
specs
LPST-4 Stationary Blading Visual weld inspection W process Insp. forms Westinghouse
Assemblies specifications
Measure port openings W dwg/specs Insp. forms Westinghouse
Dimensional checks W drawings Insp. forms Westinghouse
LPST-5 Outer and Inner Material properties verif. Material Mtl. test Supplier
Cylinders specifications rpt/certification
Nondestructive exam W dwg/process specs Test rpts/ Supplier/W
certifications
Bearing housing leak test W dwg/process spec Test rpt./ Westinghouse
certification
Visual/dimensional checks W dwgs/process Insp. forms Westinghouse
specs
LPST-6 LP Turbine Assy Verify alignments, W dwgs/process Insp. forms, Westinghouse
clearances, Elevations specs checklists
Final inspection, release W dwgs/ Insp. forms, Westinghouse Witness Point
for Ship (all oper. & doc. specifications checklists,
complete, Preservation & Quality Release
packaging)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSPECTION AND TEST PLAN
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: HRSG Heat Recovery Steam Generator Date: 5/12/98
Page: 1 of 2
Documents referenced are latest
rev. unless listed otherwise.
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HRSG-1 Heat Transfer Verif. of proper materials Design spec, Material lists, Supplier
Section: Codes, dwgs certificates
Superheaters
Evaporators
Economizers
In process; tube finning, Specs, WPS, dwgs, Data sheets, Insp. Supplier
pressure & structural Codes, procedures forms, test
welds, NDE vis/dimensional reports, x-ray
film
Module hydrotest ASME sec. 1, dwgs, Test report Supplier Witness
specs sample module
hydrotest
Clean, paint casing, prep drawings, Insp. forms, ASME Supplier
for shipment specifications forms
HSRG-2 Steam Drums: Verif. of proper materials Design spec, Material lists, Supplier
High Pressure Codes, dwgs certificates
Interm.
Pressure
Low Pressure
In-processchecks; welding, Specs, WPS, dwgs, Data sheets, Insp. Supplier
NDE, drum internal assembly, Codes, procedures forms, test
visual/dimensional reports, x-ray
film
Drum hydrotest ASME SEC. 1. dwgs, Test report Supplier Witness
specs sample drum
hydrotest
Surface prep, paint, final Dwgs, Insp. forms, ASME Supplier
Insp. prep for shipment specifications forms
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSPECTION AND TEST PLAN
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: HRSG Heat Recovery Steam Generators Date: 5/12/98
Page: 2 of 2
Documents referenced are latest
rev. unless listed otherwise.
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HRSG-3 Ductwork & In-process checks; fitup, Dwgs, stds, WPS, Data sheets, test Supplier
Common Stock welding, NDE, insulation, procedures rpts, inspection
visual/dimensional forms
Surface prep, painting dwgs, specs, stds Insp. forms, Supplier
checklists
Final Insp, prep for Assy dwgs, Insp. forms, Supplier
shipment specifications checklists
HRSG-4 Platforms & Stairs In-process; welding, NDE, Specs, dwgs, Insp. forms, test Supplier
visual/dimensional standards repts
Surface prep, Painting/ Assy dwgs, Data sheets, Insp. Supplier
coating Prep for shipment specifications forms
HRSG-5 Pipe Spools Verify proper matls, welding, Specs, dwgs, Ins. forms, data Supplier
NDE, visual/dimensional standards, sheets, test
procedures reports,
checklists
Surface prep, painting, prep Specs, dwgs, Insp. reports, Supplier
for shipment standards checklists
NOTE: HRSG components are inspected and released as they are completed.
A final ASME Section 1 Code Data Report is issued by Supplier at completion of order.
ASME Code requirements regarding installation and registration of boiler will be
co-ordinated with Local or Municipal Regulatory Agencies to assure compliance
with all applicable National, State and Municipal Codes, Standards, and Regulations.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSPECTION AND TEST PLAN
Inspection & Test Plan for: AES Ironwood
Rev.: 0
Subsystem: COND Condenser Date: 5/12/98
Page: 1 of 1
Documents listed are latest revision
unless otherwise stated
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COND-1 Materials: Tubes Mtl verif, visual & dimensional ASTM, drawings & specs Mtl. certs, Supplier
traveller
Tubesheets Mtl verif, visual & dimensional ASTM, ASME, drawings, Mtl. certs, Supplier
& Support Plates specifications, traveller
Supplier's procedures
COND-2 Fabrication of upper Visual, dimensional, cleaning, Dwgs, specifications, Sign off on QC Supplier
& lower shell, hydro, coating, lining checks HEI, ASME IX, traveller, Insp.
hotwell, water boxes Supplier's procedure reports
COND-3 ASME code components Visual, dimensional, NDE, ASME VIII, Div. I, ASME Sign off on QC Supplier
(if applicable) hydrotest IX, V drawings, traveller, Insp.
specifications reports, code
data reports
COND-4 Final insp, cleaning, Visual, dimensional, final Drawings, Sign off on QC Supplier
painting, pack & mark document review specifications, traveller, Insp.
packing, preservation, reports,code
marking requirements, data reports, Source
shipping instr. Surveillance Report
Supplier's procedures
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSPECTION AND TEST PLAN
Inspection & Test Plan for: AES Ironwood
Rev.: 0
Subsystem: SLOS ST Lube Oil Supply System Date: 5/12/98
Page: 1 of 1
Documents listed are latest
revision unless otherwise stated
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SLOS-1 Plate-type Cooler In-process fabrication checks; Equip. Spec, weld Per Mfr's Supplier/
welding, visual, dimensional procedures, quality program sub-supplier
fabrication drawings
Hydrostatic test Equipment Specification Test report Supplier/
sub-supplier
Verify cleaning, painting, Equipment Spec, Mfr's Release for Supplier/
preservation drawings transfer sub-supplier
SLOS-2 Bedplate Fabrication & welding checks Equip. spec, dwgs, AWS Per Mfr's Supplier/
D1.1 quality program sub-supplier
SLOS-3 Component Installation Verify proper installation of Drawings, tech specs, Per Mfr's Supplier
pumps, valves, cabinets, component installation quality program
instrumentation instructions
SLOS-4 Piping & Tubing Checks for; cleanliness, Equip. spec, weld Per Mfr's Supplier
alignment, gaskets, tightening procedures, ANSI B31.1 quality program
of bolts & fasteners, filings,
pipe supports
SLOS-5 Electrical Services Verify cable runs, terminations, Dwgs, specs, mfr's Per Mfr's Supplier
hook-ups, conduit, marking, procedures, codes & quality program
tagging standards, contact
reqmts.
Equip. spec. ANSI B31.1
SLOS-6 Final Assembly Shop test when specified Test specification Test report Supplier
Final inspection, painting, Equip. spec, dwgs, Bill Shipping Supplier
preservation, prep for shipment, of Materials, contract release, insp.
completeness reqmts and test records
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSPECTION AND TEST PLAN
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: BFDP Boiler Feedpumps Date: 5/12/98
Page: 1 of 2
Documents referenced are latest
rev. unless listed otherwise.
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BFDP-1 Shafts Material prop. verification Matl. specs, dwgs Mtl test rpt, Sub-supplier
Certifications
Ultrasonic examination Specifications, dwgs Test report Sub-supplier
In-process Insp; vis/dim, Specifications, dwgs Supplier's std. forms Supplier/Sub-sup
runout, NDE (PT or MT)
Static/dynamic balance Supplier's standards Balance report Supplier
BFDP-2 Impellers Material prop. verification Matl. specs, dwgs Matl certifications Supplier/Sub-sup
Vis/dim, NDE, balance Supplier's specs, dwgs Supplier's std forms Supplier/Sub-sup
BFDP-3 Casings Material prop. verif. Matl specification Matl. certifications Supplier/Sub-sup
Nondestructive examination Test specifications, Test report Supplier/Sub-sup
dwgs
In-process Insp; vis/dim, Specs, dwgs, ASME Supplier's forms, data Supplier/Sub-sup
hydrotest VIII sheets
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSPECTION AND TEST PLAN
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: BFDP Boiler Feedpumps Date: 5/12/98
Page: 2 of 2
Documents referenced are latest
rev. unless listed otherwise.
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BFDP-4 Assembly Visual, dimensional, alignment, Drawings, specs Supplier's std forms Supplier
clearances
Visual/NDE piping welds ANSI B31.1/ASME IX Suppl. forms, data sheets Supplier/Sub-sup
Visual/NDE structural welds AWS D1.1ASME IX Suppl. forms, data sheets Supplier/Sub-sup
Visual, dim, leak test - oil Specifications, dwgs Supplier's std forms Supplier
resv.
Vis/dim/hydro - heat exch. Specs, ASME VIII Suppl. forms, data sheets Supplier/Sub-sup
Elect. checks - wiring, cont. Specifications, dwgs Supplier's std forms Supplier
Check painting, coating Specifications, dwgs Supplier's std forms Supplier
Final insp, preserv & pack Specifications, dwgs Supplier's std forms Supplier
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSPECTION AND TEST PLAN
Inspection & Test Plan For: AES Ironwood
Rev.: 0
Subsystem: MXFR Main Power Transformers Date: 5/12/98
Page: 1 of 1
Documents listed are latest
rev. unless otherwise stated
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MXFR-1 Enclosure In-process checks: layout, Dwgs, specs, procedures Per Supplier's Supplier/
welding, NDE, vis/dim, clean & quality pgm sub-suppl
paint
MXFR-2 Core Material verif; stampings, wire, Material specs, stds, Per Supplier's Supplier/
Insulation dwgs quality pgm sub-suppl
In-process winding checks; dim, Dwgs, specs, procedures Per Supplier's Supplier
brazing, turn & hipot quality pgm
MXFR-3 Assembly In-process checks to verify Mfg procedures, specs, Per Supplier's Supplier
proper core insertion, dwgs, process specs quality pgm
connections, aux. component
installation
MXFR-4 Test Program Resistance measurement, vector ANSI, NEMA, IEEE stds, Test reports Supplier
relationships, open circuit, design specs, dwgs,
temperature test, preliminary contract requirements
voltage ratio, impedence & load
loss test, insulation & hipot
tests, double induction, corona
tests
MXFR-5 Final Inspection Verify as-built condition, Dwgs, specs, B/M, Insp. checklist, Supplier
marking, packing, preservation, contract requirements C of C, Quality
shipping instructions Release
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSPECTION AND TEST PLAN
Inspection & Test Plan for: AES Ironwood
Rev.: 0
Subsystem: WDPF WDPF Control and Acquisition System Date: 5/12/98
Page: 1 of 1
Documents listed are latest
rev. unless otherwise stated
- ------------------------------------------------------------------------------------------------------------------------------------
Ref. No. Components Inspection and/or Test Criteria Verification Location Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
WDPF-1 System DPU Functional tests using simulator Design specifications, Supplier's data Supplier Witness of
cabinet at Supplier location: drawings, contract forms, checklists, software
requirements test reports simulation
test
Verify functions; Oper. station,
Update system time, Graphic
diagram display, Points related
functions, CRT trend, Display
diagram
Verify characteristics group
function
Check misc. functions on display
screen
Check fault acknowledgements,
alarm history log
Run simulation of start-up, and
shut down
WDPF-2 Data Package Verify contents System specs, dwgs, B/M, packing list,
contract requirements C of C Supplier
Quality release
WDPF-3 Final Inspection Check packing, handling and System specs, dwgs, B/M, packing list,
shipping instructions contact requirements C of C Supplier
Quality release
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Appendix L
Form of EPC Guarantee
----------------------------
============================
<PAGE>
GUARANTY
GUARANTY, made effective as of September 23, 1998, by SIEMENS
CORPORATION, a corporation organized and existing under the laws of Delaware
("Guarantor"), in favor of AES IRONWOOD, INC., a Delaware corporation ("Owner").
WHEREAS, Owner wishes to have engineered, designed, procured,
constructed, equipped, commissioned and tested a combined-cycle electric
generating facility with a nominal electric generating capacity of 700 megawatts
(net) to be located in Lebanon, Pennsylvania (such facility and the construction
thereof, as more fully defined in the EPC Agreement referred to below, the
"Project");
WHEREAS, concurrently with the execution and delivery of this
Guaranty, Owner has entered into that certain Agreement for Engineering,
Procurement and Construction Services, of even date herewith, with Siemens
Westinghouse Power Corporation, a wholly-owned subsidiary of Guarantor
("Contractor") (as such Agreement may be amended, supplemented or modified from
time to time, the ("EPC Agreement");
WHEREAS, Guarantor owns one hundred percent (100%) of the capital
stock of Contractor and does and will continue to obtain substantial benefits as
a result of the EPC Agreement;
WHEREAS, in order to induce Owner to enter into the EPC Agreement,
Contractor has agreed that it would cause Guarantor to execute and deliver to
Owner this Guaranty;
NOW, THEREFORE, in consideration of Owner's entering into the EPC
Agreement, the foregoing premises, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, Guarantor,
intending to be legally bound, hereby agrees as follows:
SECTION 1
Definitions
Unless otherwise defined herein, capitalized terms used in this
Guaranty shall have the respective meanings assigned thereto in the EPC
Agreement.
<PAGE>
SECTION 2
Guaranty
Guarantor hereby irrevocably and unconditionally guarantees to
Owner, as a primary obligor and not as a surety, the punctual performance and
payment in full of all obligations of Contractor under the EPC Agreement in
accordance with the terms and conditions thereof (subject to any rights and
defenses of Contractor thereunder, other than any rights and defenses arising
out of the matters described in Section 4 hereof) and agrees that if for any
reason whatsoever Contractor shall fail duly, punctually and fully to perform or
pay any such obligation under the EPC Agreement, Guarantor shall, upon receipt
of written notice from Owner of such failure, immediately perform or pay each
and every such obligation, or cause each such obligation to be performed or
paid, without regard to any exercise or nonexercise by owner of any right,
remedy, power or privilege under or in respect of the EPC Agreement against
Contractor or under or in respect of any other guaranty or security relating
thereto. In addition, Guarantor agrees to reimburse Owner on demand for any and
all reasonable expenses (including, without limitation, attorneys' fees and
disbursements) incurred by Owner in enforcing or attempting to enforce any
rights under this Guaranty.
SECTION 3
No Subrogation
Notwithstanding any payment or payments made by Guarantor hereunder
or any set-off or application of funds of Guarantor by Owner, until all of the
obligations of Contractor under the EPC Agreement are performed or paid in full,
Guarantor shall not (a) be entitled to be subrogated to any of the rights of
Owner against Contractor or any other guarantor or in any collateral security or
guaranty or right of offset held by Owner for the performance and payment of the
obligations of Contractor under the EPC Agreement, or (b) seek any reimbursement
or contribution from Contractor or any other guarantor in respect of any
payment, set-off or application of funds made by Guarantor hereunder.
2
<PAGE>
SECTION 4
Guaranty Absolute
The liability of Guarantor under this Guaranty with respect to the
guaranteed obligations shall be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of the EPC Agreement or any
other agreement, guaranty or instrument relating thereto;
(b) any amendment to, waiver of or consent to departure from, or failure
to exercise any right, remedy, power or privilege under or in
respect of the EPC Agreement or any other guaranty; provided,
however, that for the avoidance of doubt, the Guarantor and Owner
hereby agree that the obligations of Contractor under the EPC
Agreement guaranteed by Guarantor hereunder shall be such
obligations of Contractor as they may have been amended or waived in
accordance with the terms of the EPC Agreement;
(c) any exchange, release or nonperfection of any collateral, or any
release or amendment or waiver of, or consent to departure from, any
other guaranty of or security for the performance of all or any of
the obligations of Contractor under the EPC Agreement;
(d) the insolvency of Guarantor or Contractor or any other party or
guarantor or any proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, arrangement,
dissolution or liquidation of Guarantor or Contractor or any other
guarantor or any defense which Guarantor or Contractor or any other
guarantor may have by reason of the order, decree or decision of any
court or administrative body resulting from any such proceeding;
(e) any change in ownership of Contractor or any change, whether direct
or indirect, in Guarantor's relationship to Contractor or in the
relationship of Contractor to any other guarantor, including,
without limitation, any such change by reason of any merger or any
sale, transfer, issuance, or other disposition
3
<PAGE>
of any stock of, or other equity interest in, Contractor, Guarantor
or any other entity; and
(f) any other circumstance of a similar or different nature which might
otherwise constitute a defense available to Guarantor as a guarantor
(provided, however, that this clause 4(f) shall not prevent
Guarantor from being able to assert as a defense to its performance
under this Guaranty, any defense which is available to Contractor
under the EPC Agreement, other than any defenses arising out of the
matters described in this Section 4).
This Guaranty shall continue to be effective, or be reinstated, as
the case may be, if at any time any payment, or any part thereof, to Owner by
Contractor under the EPC Agreement or by Guarantor hereunder or by any other
guarantor under any other guaranty of the EPC Agreement is rescinded or must
otherwise be returned by Owner to Guarantor or Contractor or any of their
representatives or any other guarantor for any reason, including, without
limitation, upon the insolvency, bankruptcy, reorganization, dissolution or
liquidation of Guarantor or Contractor or any other guarantor, all as though
such payment had not been made.
SECTION 5
Waiver
Guarantor hereby waives notice from Owner of its acceptance and
reliance on this Guaranty and notice of any liability to which it may apply, and
waives presentment, demand of payment, protest, notice of dishonor or nonpayment
of any such liability, and the taking of any other action by owner against, and
(except for the notice specified in Section 2 hereof) any other notice to, any
party liable thereon, including Guarantor, and any requirement that Owner
exhaust any right or take any action against or with respect to Contractor or
any other person or entity or any property.
SECTION 6
Consent to Jurisdiction: Waiver of Immunities
(a) Guarantor hereby irrevocably submits to the jurisdiction of any
State or Federal court sitting in the Borough of Manhattan, City of New York, in
any action
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or proceeding arising out of or relating to this Guaranty, and Guarantor hereby
irrevocably agrees that, subject to the terms of Section 6(d) hereof and without
limiting Owner's rights under Section 6(b) hereof, all claims in respect of such
action or proceeding shall be heard and determined in such State or Federal
court. Guarantor hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding. Guarantor hereby irrevocably consents to the service
of any and all process in any such action or proceeding by the mailing of copies
of such process to Guarantor at its address specified in Section 11 hereof.
Guarantor agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner permitted by law.
(b) Nothing in this Section shall affect the right of owner to serve
legal process in any other manner permitted by law or affect the right of owner
to bring any action or proceeding against Guarantor or its property in the
courts of any other jurisdiction.
(c) To the extent that Guarantor has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property,
Guarantor hereby irrevocably waives such immunity in respect of its obligations
under this Guaranty.
(d) Notwithstanding the foregoing, any dispute arising under the EPC
Agreement and any claims under any of the EPC Agreement and/or this Guaranty
relating to any such dispute, whether arising contemporaneously with or
subsequent to such dispute, shall be resolved by Owner, Contractor and Guarantor
in a single, combined arbitration proceeding in accordance with the provisions
of Article 21 of the EPC Agreement. In any such arbitration proceeding,
Contractor and Guarantor shall together select one arbitrator, Owner shall
select one arbitrator, and the two selected arbitrators shall select the third
arbitrator, in accordance with Section 21.1 of the EPC Agreement. Subject to the
Guarantor's ability to assert as a defense to its performance under this
Guaranty Contractor's rights under Section 15.2.1 of the EPC Agreement,
notwithstanding the existence of a dispute between Owner and Guarantor and
regardless of whether such dispute is the subject of dispute resolution pursuant
to this Section 6(d), Guarantor shall not be
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entitled to suspend or otherwise delay the performance of this Guaranty.
SECTION 7
Representations and Warranties
Guarantor hereby represents and warrants as follows:
(a) Guarantor (i) is a duly organized and validly existing
corporation in good standing under the laws of Delaware and (ii) has the
corporate power and authority to own its property and assets and to transact the
business in which it is engaged;
(b) Guarantor has the corporate power, authority and legal right to
execute, deliver and carry out the terms and provisions of this Guaranty and has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Guaranty;
(c) This Guaranty has been duly executed and delivered by Guarantor
and constitutes the legal, valid and binding obligation of Guarantor enforceable
against it in accordance with its terms, except to the extent that its
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the rights of creditors generally or
by general principles of equity;
(d) Neither the execution, delivery or performance by Guarantor of
this Guaranty nor the consummation of the transactions herein contemplated, nor
compliance with the terms and provisions hereof, (i) will contravene any
applicable provision of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality or authority,
or requires the authorization or approval of or any filing with any such
instrumentality or authority, (ii) will conflict or be inconsistent with, or
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any lien upon or assignment of any of
the property or assets of Guarantor pursuant to the terms of any agreement or
other instrument to which Guarantor is a party or by which it or any of its
property or assets is bound or to which it is subject, or (iii) will violate any
provision of the charter, by-laws or like organizational documents of Guarantor;
and
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(e) As of the date on which this Guaranty is executed by Guarantor,
there are no actions, suits or proceedings pending or, to the best of the
knowledge of Guarantor, threatened against or affecting Guarantor before any
court or before any governmental or administrative body or agency which, if
adversely determined, would be reasonably likely to materially and adversely
affect its ability to fully perform its obligations hereunder.
SECTION 8
Covenants
Guarantor hereby covenants and agrees that, until performance and
payment in full of all obligations of Contractor under the EPC Agreement:
(a) Guarantor shall furnish to Owner: (i) as soon as possible and in
any event within five days after an executive officer of Guarantor obtains
knowledge thereof, notice of the occurrence of any Event of Default (as defined
in Section 9 hereof) or event which, with the giving of notice or lapse of time,
or both, would constitute an Event of Default, and setting forth the details
thereof and the action which Guarantor has taken and proposes to take with
respect thereto; and (ii) such other information necessary to demonstrate the
ability of Guarantor to perform its obligations under this Guaranty as Owner may
from time to time reasonably request;
(b) Guarantor shall comply, and shall cause each of its subsidiaries
to comply, with all applicable laws to the extent that noncompliance therewith
would be reasonably likely to have a material adverse effect on the financial
condition of Guarantor or on its ability to fully perform its obligations under
this Guaranty;
(c) Guarantor shall preserve and maintain, and shall cause each of
its subsidiaries to preserve and maintain, its corporate or legal existence,
rights and franchises to the extent that noncompliance therewith would be
reasonably likely to have a material adverse effect on the financial condition
of Guarantor or on its ability to fully perform its obligations under this
Guaranty; and
(d) Guarantor shall, in the event that at any time owner shall have
reasonable grounds for believing that, were Contractor to default under the EPC
Agreement at that time, Guarantor would be unable to fully perform its
obligations hereunder, then within 15 days of Owner's
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written request therefor, Guarantor shall provide either (i) financial or other
information reasonably demonstrating its ability to so fully perform or (ii)
other assurances of its ability to so fully perform that are reasonably
satisfactory to owner.
SECTION 9
Events of Default
(a) If any of the following events shall occur and be continuing it
shall constitute an "Event of Default" hereunder:
(i) Guarantor shall fail to observe or perform any covenant or
agreement contained in Section 2 hereof; provide, that if and to the
extent Contractor is entitled by the terms of the EPC Agreement to a grace
or cure period with respect to the failure of performance thereunder that
Guarantor's failure under Section 2 hereof relates to, Guarantor shall
have the same period of time as it available to Contractor under the EPC
Agreement to remedy such failure of performance before such failure
constitutes an Event of Default hereunder, but in no event shall any such
grace or cure period for Guarantor hereunder extend past the grace or cure
period available to Contractor under the EPC Agreement;
(ii) Guarantor shall fail to observe or perform any other
covenant or agreement contained in this Guaranty (including without
limitation the covenants and agreements contained in Section 8 hereof),
and such failure is not remedied within (1) 30 days after Guarantor
receives actual knowledge thereof, or (2) such longer period as may be
necessary for Guarantor to cure such failure, not to exceed 120 days,
provided that Guarantor diligently pursues the cure of such failure and
such cure is effected in such a manner and within such time that such
failure to comply could not reasonably be expected to have a material
adverse effect on Owner or the Project;
(iii) Guarantor shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect, or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of
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it or any substantial part of its property, or shall consent to any such
relief or the appointment of or taking of possession by any such official
in an involuntary case or other proceeding commenced against it, or shall
generally not pay its debts as they become due, or shall make a general
assignment for the benefit of creditors, or shall take any corporate
action to authorize any of the foregoing;
(iv) An involuntary case or other proceeding shall be
commenced against Guarantor seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of
a trustee, receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, and such involuntary case or
other proceeding shall remain undismissed or unstayed for a period of 60
days; or
(v) Any representation or warranty made by Guarantor hereunder
shall prove to have been false or misleading in any material respect when
made or deemed made and Guarantor fails to remedy such false or misleading
representation or warranty within 30 days after Contractor receives a
notice from owner with respect thereto.
(b) Upon the occurrence of an Event of Default, Guarantor shall be
in material breach of this Guaranty and Owner may exercise any and all remedies
it may have hereunder or at law or in equity. Notwithstanding anything stated to
the contrary in this Guaranty, except as otherwise provided in this sentence,
Guarantor shall not be liable under this Guaranty, whether based in contract, in
tort (including negligence and strict liability), under warranty or otherwise,
for any indirect, incidental, special or consequential loss or damage of any
type, including but not limited to loss of use or loss of profit or revenue, and
Owner hereby releases Guarantor from any such liability; provided, however, that
this sentence shall not limit Guarantor's obligations to pay to owner the
Provisional Acceptance Late Completion Payments and Performance Guarantee
Payments under Articles 7 and 8 of the EPC Agreement (as such terms are defined
therein) in accordance with the terms and provisions of the EPC Agreement and
this Guaranty.
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SECTION 10
Amendments
No amendment or waiver of any provision of this Guaranty nor consent
to any departure by Guarantor therefrom shall in any event be effective unless
the same shall be in writing and signed by owner, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 11
Addresses for Notices
All notices and other communications provided for hereunder shall be
in writing and, (i) if to Guarantor, mailed or communicated by facsimile or
delivered to it, addressed to Siemens Corporation, 186 Wood Avenue South,
Iselin, New Jersey 08830-2770, Attention: Vice President, Corporate Finance,
Facsimile # (732) 321-3879, (ii) if to Owner, mailed or delivered to it,
addressed to it at its address specified in the EPC Agreement, or (iii) as to
each party at such other address as shall be designated by such party in a
written notice to the other party. All such notices and other communications
shall, when mailed or communicated by facsimile transmission, respectively, be
effective when deposited in the mails addressed as aforesaid or when such
facsimile transmission is confirmed.
SECTION 12
No Waiver: Remedies
No failure on the part of owner to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise thereof or the exercise of any other right operate as
a waiver thereof. The remedies herein provided are cumulative and are not
exclusive of any remedies provided at law or in equity.
SECTION 13
Continuing Guaranty: Assignments
(a) This Guaranty shall be construed as a continuing, absolute and
unconditional guaranty of
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payment and performance, and not of collection only, and the obligations of
Guarantor hereunder shall not be conditioned or contingent upon the pursuit by
Owner at any time of any right or remedy against Contractor or against any other
person or entity which may be or become liable in respect of all or any part of
the obligations of Contractor under the EPC Agreement or against any collateral
security or guaranty therefor. This Guaranty shall: (i) remain in full force and
effect until satisfaction in full of all obligations of Contractor under the EPC
Agreement; (ii) be binding upon Guarantor and its successors and assigns; and
(iii) inure to the benefit of and be enforceable by Owner and its successors and
permitted assigns.
(b) Guarantor shall have no right, power or authority to delegate
all or any of its obligations hereunder. Guarantor hereby expressly agrees that
Owner may assign all or any of its rights hereunder without Guarantor's approval
to any person or entity to which it has assigned its rights under the EPC
Agreement (including, without limitation, the Financing Parties referred to in
the EPC Agreement) and that any such assignee of Owner may further assign such
rights assigned to it. Notwithstanding anything to the contrary contained in the
foregoing, no such assignment to any Person which directly competes with Siemens
AG or any of its affiliates in the field of design, engineering, manufacturing,
procurement and construction of power generation, transmission or distribution
facilities shall be permitted without the prior written consent of Guarantor. In
the event of any such assignment, references herein to "Owner" shall be deemed
to include references to the relevant assignee. If in connection with such an
assignment by Owner any Financing Party requests Guarantor to consent in writing
to such permitted assignment even though such consent is not required hereunder,
Guarantor shall do so promptly, with such acknowledgment and consent agreement
to contain such terms and conditions as are mutually and reasonably agreed upon
by Guarantor, Owner and the Financing Parties. In addition, at Owner's request,
Guarantor shall provide to the Financing Parties a certificate from Guarantor
and/or an opinion of counsel addressed to the Financing Parties, in form and
substance reasonably satisfactory to Owner and the Financing Parties, concerning
such matters as the Financing Parties reasonably request, including that (w)
Guarantor is duly organized, validly existing and in good standing under the
laws of the state or commonwealth of its formation or incorporation, as the case
may be, (x) the execution,
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delivery and performance of this Guaranty and the related acknowledgment and
consent agreement are within the power and authority of Guarantor, and this
Guaranty and such acknowledgment and consent agreement are not in conflict with
Guarantor's organizational documents or any agreement to which Guarantor is a
party or by which it is bound or affected, (y) there is no law, rule or
regulation, nor is there any judgment, decree or order of any court or
governmental entity binding on Guarantor which would be contravened by the
execution, delivery, performance or enforcement of this Guaranty and such
acknowledgment and consent agreement, and (z) each of this Guaranty and such
acknowledgment and consent agreement is a legal, valid and binding obligation
enforceable against Guarantor in accordance with its terms, subject to usual and
customary qualifications.
SECTION 14
Waiver of Jury Trial
GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR COUNTERCLAIM ARISING IN CONNECTION
WITH THIS GUARANTY.
SECTION 15
Governing Law
This Guaranty shall be governed by, and construed in accordance
with, the laws of the State of New York, the United States of America, without
regard to the conflict of laws rules thereof.
SECTION 16
Severability
If any provision hereof is invalid or unenforceable in any
jurisdiction, the other provisions hereof shall remain in full force and effect
in such jurisdiction and the remaining provisions hereof shall be liberally
construed in order to carry out the provisions hereof. The invalidity or
unenforceability of any provision of this Guaranty in any jurisdiction shall not
affect the validity or enforceability of any such provision in any other
jurisdiction.
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SECTION 17
Survival of Provisions
All provisions of this Guaranty which are expressly or by
implication to come into or continue in force and effect after the expiration or
termination of this Guaranty shall remain in effect and be enforceable following
such expiration or termination.
SECTION 18
Confidential Information
(a) Guarantor and Owner agree to hold in confidence for a period
commencing with the date hereof and ending five years from the date of Project
Completion any information supplied to it hereunder by the other. Guarantor and
Owner hereby further agree to require third parties to enter into appropriate
non-disclosure agreements relative to such confidential information as may be
communicated to them by Guarantor or Owner; provide, however, that in the event
Guarantor or Owner disclose any confidential information to a third party
pursuant to such non-disclosure agreement, Guarantor or Owner, as the case may
be, shall remain liable hereunder for any further disclosure by such third party
which is in breach of such non-disclosure agreement or would be in breach of
this Section 18 if such further disclosure were made by Guarantor or Owner, as
applicable. The provisions of this Section 18(a) shall not apply to information
within any one of the following categories: (i) information which was in the
public domain prior to receipt thereof from the other party or which
subsequently becomes part of the public domain by publication or otherwise,
except by the receiving party's wrongful act; (ii) information which the
receiving party can show was in its possession prior to its receipt thereof from
the other party; (iii) information received by a party from a third party
without a confidentiality obligation with respect thereto known to Owner; (iv)
information which the receiving party developed independently; or (v)
information which a party is required by law to disclose; provide, however, that
prior to making any such disclosure under clause (v) of this Section 18(a), such
disclosing party shall: (1) provide the other party with timely advance written
notice of the confidential information requested by such government authority
and such disclosing party's intent
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to so disclose; (2) minimize the amount of confidential information to be
provided consistent with the interests of the non-disclosing party and the
requirements of the government authority involved; and (3) at the request and
expense of the non-disclosing party make every reasonable effort (which shall
include participation by the non-disclosing party in discussions with the
government authority involved) to secure confidential treatment and minimization
of the confidential information to be provided. Neither Guarantor nor Owner
shall publish the terms and conditions of this Guaranty, unless the other party
provides its express prior written consent thereto; provided, however, that
Owner shall be permitted to disclose, subject to the provisions of this Section
18(a), such terms and provisions to the Financing Parties or any applicable
rating agency and otherwise to the extent required to obtain financing for the
Facility. Notwithstanding any other provision of this Section 18(a), Owner shall
be permitted to summarize the material terms and conditions of this Guaranty for
purposes of including such summary in any offering document associated with the
issuance of debt by owner for the purpose of obtaining financing for the
Facility.
(b) Guarantor shall not issue any press or publicity release or any
advertisement, or publish or otherwise disclose any photograph or other
information, concerning this Guaranty, the EPC Agreement or the Project without
the express prior written consent of Owner.
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
SIEMENS CORPORATION
By: ______________________________________
Name:
Title:
Date:
By: ______________________________________
Name:
Title:
Date:
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ACCEPTED AND AGREED
AES IRONWOOD, INC.
By: ______________________________
Name:
Title:
Date:
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Appendix A
Actions, Suits and Proceedings
[None.]
<PAGE>
Appendix M
For AES Pre-Financial
Closing Guarantee
----------------------------
============================
<PAGE>
[Draft of 11/2/98]
FINANCIAL GUARANTY OF OWNER'S PRE-FINANCIAL CLOSING DATE
PAYMENT OBLIGATIONS
FINANCIAL GUARANTY, made effective as of_______ _, 1998, by THE AES
CORPORATION, a corporation organized and existing under the laws of Delaware
("Guarantor"), in favor of Siemens Westinghouse Power Corporation
("Contractor").
WHEREAS, AES IRONWOOD, INC., a Delaware corporation ("Owner"),
wishes to have engineered, designed, procured, constructed, equipped,
commissioned and tested a combined-cycle electric generating facility with a
nominal electrical generating capacity of 700 megawatts (net) to be located in
Lebanon, Pennsylvania (such facility and the construction thereof, as more fully
defined in the EPC Agreement referred to below, the "Project");
WHEREAS, Owner has entered into that certain Agreement for
Engineering, Procurement and Construction Services, dated as of the date hereof,
with Contractor (as such agreement may be amended, supplemented or modified from
time to time, the "EPC Agreement");
WHEREAS, AES owns the majority of the outstanding stock of Owner and
does and will continue to obtain substantial benefits as a result of the EPC
Agreement;
WHEREAS, pursuant to the terms of the EPC Agreement, Contractor has
agreed to commence performance of the Services arising prior to the Financial
Closing Date (as defined under the EPC Agreement) (such Services to be performed
prior to the occurrence of the Financial Closing Date to be referred to herein
as the "Pre-Financial Closing Date Services"), and Owner has agreed to make
payments for such Pre-Financial Closing Date Services (the Owner's payment
obligations under the EPC Agreement, whether for installments of the Contract
Price (as defined under the EPC Agreement) or otherwise, arising prior to the
occurrence of the Financial Closing Date to be referred to herein as the
"Pre-Financial Closing Date Payment Obligations"), provided that the Guarantor
guarantees the Pre-Financial Closing Date Payment Obligations;
WHEREAS, in order to induce Contractor to agree to perform the
Pre-Financial Closing Date Services, Owner has agreed in the EPC Agreement that
it would cause Guarantor to execute and deliver to Contractor this Financial
Guaranty;
<PAGE>
NOW, THEREFORE, in consideration of Contractor's agreement to
perform the Pre-Financial Closing Date Services, the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Guarantor, intending to be legally bound, hereby agrees as
follows:
SECTION 1
Reference to the EPC Agreement
Unless otherwise defined herein, capitalized terms used but not
defined herein shall have the meaning ascribed to them in the EPC Agreement.
SECTION 2
Financial Guaranty
Guarantor hereby irrevocably and unconditionally guarantees to
Contractor, as primary obligor and not as a surety, the punctual payment in full
of all Pre-Financial Closing Date Payment Obligations in accordance with the
terms and conditions of the EPC Agreement (subject to any rights and defenses of
Owner thereunder, other than any rights and defenses arising out of the matters
described in Section 4 hereof) and agrees that if for any reason whatsoever
Owner shall fail duly, punctually and fully to pay any Pre-Financial Closing
Date Payment Obligations, Guarantor shall, upon receipt of written notice from
Contractor of such failure, immediately pay each and every such obligation, or
cause each and every such obligation to be paid, without regard to any exercise
or nonexercise by Contractor of any right, remedy, power or privilege under or
in respect of the EPC Agreement against Owner or under or in respect of any
other guaranty or security relating thereto. In addition, Guarantor agrees to
reimburse Contractor on demand for any and all reasonable expenses (including,
without limitation, attorneys' fees and disbursements) incurred by Contractor in
enforcing or attempting to enforce any rights under this Financial Guaranty.
SECTION 3
No Subrogation
Notwithstanding any payment or payments made by Guarantor hereunder
or any set-off or application of funds of Guarantor by Contractor, until all of
the Pre-Financial Closing Date Payment Obligations of Owner under the EPC
Agreement are
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paid in full, Guarantor shall not (a) be entitled to be subrogated to any of the
rights of Contractor against Owner or any other guarantor or in any collateral
security or guaranty or right of offset held by any Contractor for the payment
of all of the Pre-Financial Closing Date Payment Obligations of Owner under the
EPC Agreement, or (b) seek any reimbursement or contribution from Owner or any
other guarantor in respect of any payment, set-off or application of funds made
by Guarantor hereunder.
SECTION 4
Financial Guaranty Absolute
The liability of Guarantor under this Financial Guaranty with
respect to the guaranteed obligations shall be absolute and unconditional,
irrespective of:
(a) any lack of validity or enforceability of the EPC Agreement or any other
agreement, guaranty or instrument relating thereto;
(b) any amendment to, waiver of or consent to departure from, or failure to
exercise any right, remedy, power or privilege under or in respect of, the
EPC Agreement; provided, however, that for the avoidance of doubt
Guarantor hereby agrees that the obligations of Owner under the EPC
Agreement guaranteed by Guarantor hereunder shall be such obligations of
Owner as they may have been amended or waived in accordance with the terms
of the EPC Agreement;
(c) any exchange, release or nonperfection of any collateral, or any release
or amendment or waiver of, or consent to departure from, any other
guaranty of or security for the performance of all or any of the
obligations of Owner under the EPC Agreement;
(d) the insolvency of Owner or any other party or guarantor or any proceeding,
voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, arrangement, dissolution or liquidation of
Owner or any other guarantor or any defense which Owner or any other
guarantor may have by reason of the order, decree or decision of any court
or administrative body resulting from any such proceeding;
(e) any change in ownership of Owner or any change, whether direct or
indirect, in Guarantor's relationship to Owner, including, without
limitation, any such change by reason of any merger or any sale, transfer,
issuance, or other disposition of any stock of, or other equity interest
in, Owner, Guarantor or any other entity; and
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(f) any other circumstance of a similar or different nature which might
otherwise constitute a defense available to Guarantor as a guarantor
(provided, however, that this clause 4(f) shall not prevent Guarantor from
being able to assert as a defense to its performance under this Financial
Guaranty, any defense which is available to Owner under the EPC Agreement,
other than any defenses arising out of the matters described in this
Section 4).
This Financial Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of Pre-Financial Closing Date Payment
Obligations to Contractor by Owner under the EPC Agreement or by Guarantor
hereunder or by any other guarantor under any other guaranty of the EPC
Agreement is rescinded or must otherwise be returned by Contractor to Owner or
any of its representatives or any other guarantor for any reason, including,
without limitation, upon the insolvency, bankruptcy, reorganization, dissolution
or liquidation of Owner or any other guarantor, all as though such payment has
not been made.
SECTION 5
Waiver
Guarantor hereby waives notice from Contractor of its acceptance and
reliance on this Financial Guaranty and notice of any liability to which it may
apply, and waives presentment, demand of payment, protest, notice of dishonor or
nonpayment of any such liability, and the taking of any other action by
Contractor against, and (except for the notice specified in Section 2 hereof)
any other notice to, any party liable thereon, including Guarantor, and any
requirement that Contractor exhaust any right to take any action against or with
respect to Owner or any other person or entity or any property.
SECTION 6
Consent to Jurisdiction, Waiver of Immunities
(a) Guarantor hereby irrevocably submits to the jurisdiction of any State or
Federal court sitting in the Borough of Manhattan, City of New York, in
any action or proceeding arising out of or relating to this Financial
Guaranty, and Guarantor hereby irrevocably agrees that, subject to the
terms of Section 6(d) hereof and without limiting Contractor's rights
under Section 6(b) hereof, all claims in respect of such action or
proceeding may be heard and determined in such State or Federal court.
Guarantor hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance
of such
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action or proceeding. Guarantor hereby irrevocably consents to the service
of any and all process in any such action or proceeding by the mailing of
copies of such process to Guarantor at its address specified in Section 11
hereof. Guarantor agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner permitted by law.
(b) Nothing in this Section shall affect the right of Contractor to serve
legal process in any other manner permitted by law or affect the right of
Contractor to bring any action or proceeding against Guarantor or its
property in the courts of any other jurisdiction.
(c) To the extent that Guarantor has or hereafter may acquire any immunity
from jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property,
Guarantor hereby irrevocably waives such immunity in respect of its
obligations under this Financial Guaranty.
(d) Notwithstanding the foregoing, the following shall apply:
(i) Any dispute arising under the EPC Agreement relating to the
Pre-Financial Closing Date Services or the Pre-Financial Closing
Date Payment Obligations and any claims under the EPC Agreement
and/or this Financial Guaranty relating to any such dispute, whether
arising contemporaneously with or subsequent to such dispute shall
be resolved by Owner, Contractor and Guarantor, as applicable, in a
single, combined arbitration proceeding in accordance with the
provisions of Article 21 of the EPC Agreement (which provisions are
hereby incorporated by reference, with each reference therein (A) to
"Party" being deemed to be to Guarantor (and, if applicable, Owner)
or Contractor, respectively, and (B) to "Owner" being deemed to be
Guarantor (and, if applicable, Owner)). In any such arbitration
proceeding, Guarantor and Owner shall together select one arbitrator
or, if applicable, Guarantor shall select one arbitrator, Contractor
shall select one arbitrator, and the two selected arbitrators shall
select the third arbitrator, in accordance with the provisions of
Section 21.1 of the EPC Agreement as incorporated hereby.
(ii) Any dispute or claim arising under this Financial Guaranty, other
than any such dispute or claim covered by clause (i) above, shall be
resolved in an arbitration proceeding in accordance with the
provisions of Article 21 of the EPC Agreement (which provisions are
hereby incorporated by
5
<PAGE>
reference, with each reference therein (A) to "Party" being deemed
to be to Guarantor or Contractor, respectively, and (B) to "Owner"
being deemed to be to Guarantor). In any such arbitration
proceeding, Guarantor shall select one arbitrator, Contractor shall
select one arbitrator, and the two selected arbitrators shall select
the third arbitrator, in accordance with the provisions of Section
21.1 of the EPC Agreement as incorporated hereby.
SECTION 7
Representations and Warranties
Guarantor hereby represents and warrants as follows:
(a) Guarantor (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its incorporation and (ii)
has the corporate power and authority to own its property and assets and
to transact the business in which it is engaged;
(b) Guarantor has the corporate power, authority and legal right to execute,
deliver and carry out the terms and provisions of this Financial Guaranty
and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Financial Guaranty;
(c) This Financial Guaranty has been duly executed and delivered by Guarantor
and constitutes the legal, valid and binding obligation of Guarantor
enforceable against it in accordance with its terms, except to the extent
that its enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally or by general principles of equity;
(d) Neither the execution, delivery or performance by Guarantor of this
Financial Guaranty nor the consummation of the transactions herein
contemplated, nor compliance with the terms and provisions hereof
contemplated, nor compliance with the terms and provisions hereof, (i)
will contravene any applicable provision of any law, statute, rule,
regulation, order, writ, injunction or decree of any court or governmental
instrumentality or authority, or require the authorization or approval of
or any filing with any such instrumentality or authority, (ii) will
conflict or be inconsistent with, or result in any breach of, any of the
terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to
create or impose) any lien upon or assignment of any of the property or
assets of Guarantor pursuant to the terms
6
<PAGE>
of any agreement or other instrument to which Guarantor is a party or by
which it or any of its property or assets is bound or to which it is
subject or (iii) will violate any provision of the charter, by-laws or
like organizational documents of Guarantor, and
(e) As of the date on which this Guaranty is executed by Guarantor, there are
no actions, suits, or proceedings pending or, to the best of the knowledge
of Guarantor, threatened against or affecting Guarantor before any court
or before any governmental or administrative body or agency, which, if
adversely determined, would be reasonably likely to materially and
adversely affect its ability to fully perform its obligations hereunder.
SECTION 8
Covenants
Guarantor hereby covenants and agrees that, until payment in full of
all the Pre-Financial Closing Date Payment Obligations:
(a) Guarantor shall furnish to Owner as soon as possible and in any event
within five days after an executive officer of Guarantor obtains knowledge
thereof, notice of the occurrence of any Event of Default (as defined in
Section 9 hereof) or event which, with the giving of notice or lapse of
time, or both, would constitute an Event of Default, and setting forth the
details thereof and the action which Guarantor has taken and proposes to
take with respect thereto;
(b) Guarantor shall comply, and shall cause each of its subsidiaries to
comply, with all applicable laws to the extent that noncompliance
therewith would be reasonably likely to have a material adverse effect on
the financial condition of Guarantor or on its ability to fully perform
its obligations under this Financial Guaranty;
(c) Guarantor shall preserve and maintain, and shall cause each of its
subsidiaries to preserve and maintain, its corporate or legal existence,
rights and franchises to the extent that noncompliance therewith would be
reasonably likely to have a material adverse effect on the financial
condition of Guarantor or on its ability to fully perform its obligations
under this Financial Guaranty; and
(d) Guarantor shall, in the event that at any time Contractor shall have
reasonable grounds for believing that, were Owner to default on its
Pre-Financial Closing Date Payment Obligations at that time, Guarantor
would be unable to fully
7
<PAGE>
perform its obligations hereunder, then within 15 days of Contractor's
written request therefor, Guarantor shall provide either (i) financial or
other information reasonably demonstrating its ability to so fully perform
or (ii) other assurances of its ability to so fully perform that are
reasonably satisfactory to Contractor.
SECTION 9
Events of Default
(a) If any of the following events shall occur and be continuing it shall
constitute an "Event of Default" hereunder
(i) Guarantor shall fail to observe or perform any covenant or agreement
contained in Section 2 hereof; provided, that if and to the extent
Owner is entitled by the terms of the EPC Agreement to a grace or
cure period with respect to the failure of performance thereunder
that Guarantor's failure under Section 2 hereof relates to,
Guarantor shall have the same period of time as is available to
Owner to remedy such failure of performance before such failure
constitutes an Event of Default hereunder, but in no event shall any
such grace or cure period for Guarantor hereunder extend past the
grace or cure period available to Owner under the EPC Agreement;
(ii) Guarantor shall fail to observe or perform any other covenant or
agreement contained in this Financial Guaranty (including without
limitation the covenants and agreements contained in Section 8
hereof), and such failure is not remedied within (1) 30 days after
Guarantor receives actual knowledge thereof, or (2) such longer
period as may be necessary for Guarantor to cure such failure, not
to exceed 120 days, provided that Guarantor diligently pursues the
cure of such failure and such cure is effected in such a manner and
within such time that such failure to comply could not reasonably be
expected to have a material adverse effect on Contractor;
(iii) Guarantor shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect, or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall
consent to any such relief or the appointment of or taking of
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall generally not pay its
debts as
8
<PAGE>
they become due, or shall make a general assignment for the benefit
of creditors, or shall take any corporate action to authorize any of
the foregoing;
(iv) An involuntary case or other proceeding shall be commenced against
Guarantor seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of
a trustee, receiver, liquidator, custodian or other similar official
of it or any substantial part of its property, and such involuntary
case or other proceeding shall remain undismissed or unstayed for a
period of 60 days; or
(v) Any representation or warranty made by Guarantor hereunder shall
prove to have been false or misleading in any material respect when
made or deemed made and Guarantor fails to remedy such false or
misleading representation or warranty within 30 days after Guarantor
receives a notice from Contractor with respect thereto.
(b) Upon the occurrence of an Event of Default, Guarantor shall be in material
breach of this Financial Guaranty and Contractor may exercise any and all
remedies they may have hereunder or at law or in equity. Notwithstanding
anything stated to the contrary in this Financial Guaranty, except as
otherwise provided in this sentence, Guarantor shall not be liable under
this Financial Guaranty, whether based in contract, in tort (including
negligence and strict liability), under warranty or otherwise, for any
indirect, incidental, special or consequential loss or damage of any type,
including but not limited to loss of use or loss of profit or revenue, and
Contractor hereby releases Guarantor from any such liability; provided,
however, that this sentence shall not limit Guarantor's obligation to pay
to Contractor installments of the Contract Price in accordance with the
terms and provisions of the EPC Agreement and this Guaranty.
SECTION 10
Amendments
No amendment or waiver of any provision of this Financial Guaranty
nor consent to any departure by Guarantor therefrom shall in any event be
effective unless the same shall be in writing and signed by Contractor, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
9
<PAGE>
SECTION 11
Addresses for Notices
All notices and other communications provided for hereunder shall be
in writing and, if to Guarantor, mailed or communicated by facsimile or
delivered to it, addressed to The AES Corporation, 1001 North 19th Street,
Arlington, VA 22209. Attention: AES Ironwood Project Director, Facsimile:
703-528-4510, if to Contractor, mailed or delivered to it, addressed to it at
its address specified in the EPC Agreement, or as to each party at such other
address as shall be designated by such party in a written notice to the other
party. All such notices and other communications shall, when mailed or
communicated by facsimile transmission, respectively, be effective when
deposited in the mails addressed as aforesaid or when such facsimile
transmission is confirmed.
SECTION 12
No Waiver: Remedies
No failure on the part of Contractor to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof or the exercise of any other right operate as
a waiver thereof. The remedies herein provided are cumulative and are not
exclusive of any remedies provided at law or in equity.
SECTION 13
Absolute and Unconditional Financial Guaranty, Termination; Assignments
(a) This Financial Guaranty shall be construed as a continuing, absolute, and
unconditional Financial Guaranty of payment and not of collection only,
and the obligations of Guarantor hereunder shall not be conditioned or
contingent upon the pursuit by Contractor at any time of any right or
remedy against Owner or against any other person or entity which may be or
become liable in respect of all or any part of the obligations of Owner
under the EPC Agreement or against any other person or entity which may be
or become liable in respect of all or any part of the Pre-Financial
Closing Date Payment Obligations or against any collateral security or
guaranty therefor.
(b) This Financial Guaranty shall terminate upon the occurrence of the
Financial Closing Date or any earlier termination of the EPC Agreement
prior to the
10
<PAGE>
Financial Closing Date; provided, however, that the payment obligations of
Guarantor hereunder arising prior to the termination hereof shall survive
the termination of this Financial Guaranty.
(c) This Financial Guaranty shall be binding upon Guarantor and its successors
and permitted assigns. Guarantor shall not have any right, power or
authority to delegate all or any of its obligations hereunder. Guarantor
hereby expressly agrees that Contractor may assign all or any of its
rights hereunder without Guarantor's approval to any person or entity to
which it has assigned its rights under the EPC Agreement in accordance
with the terms thereof. In the event of any such assignment, references
herein to "Contractor" shall be deemed to include references to the
relevant assignee.
SECTION 14
Waiver of Jury Trial
GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR COUNTERCLAIM ARISING IN CONNECTION
WITH THIS FINANCIAL GUARANTY.
SECTION 15
Governing Law
This Financial Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York, the United States of
America, without regard to the conflict of laws rules thereof.
SECTION 16
Severability
If any provision hereof is invalid or unenforceable in any
jurisdiction, the other provisions hereof shall remain in full force and effect
in such jurisdiction and the remaining provisions hereof shall be liberally
construed in order to carry out the provision hereof. The invalidity or
unenforceability of any provision of this Financial Guaranty in
11
<PAGE>
any jurisdiction shall not affect the validity or enforceability of any such
provision in any other jurisdiction.
SECTION 17
Confidential Information
Contractor agrees to hold in confidence for a period commencing with
the date hereof and ending five years from the date of Project Completion any
information supplied to it hereunder by Guarantor. Contractor hereby further
agrees to require third parties to enter into appropriate non-disclosure
agreements relative to such confidential information as may be communicated to
them by Contractor, provided, however, that in the event Contractor discloses
any confidential information to a third party pursuant to such non-disclosure
agreement, Contractor shall remain liable hereunder for any further disclosure
by such third-party which is in breach of such non-disclosure agreement or would
be in breach of this Section 17 if such further disclosure were made by
Contractor. The provisions of this Section 17(a) shall not apply to information
within any one of the following categories: (i) information which was in the
public domain prior to receipt thereof from Guarantor or which subsequently
becomes part of the public domain by publication or otherwise, except by
Contractor's wrongful act; (ii) information which Contractor can show was in its
possession prior to its receipt thereof from Guarantor, (iii) information
received by Contractor from a third party without a confidentiality obligation
with respect thereto known to Contractor, (iv) information which Contractor
developed independently; or (v) information which Contractor is required by law
to disclose; provided, however, that prior to making any such disclosure under
clause (v) of this Section 17(a), Contractor shall: (1) provide the Guarantor
with timely advance written notice of the confidential information requested by
such government authority and Contractor's intent to so disclose; (2) minimize
the amount of confidential information to be provided consistent with the
interests of Guarantor and the requirements of the government authority
involved, and (3) at the request and expense of Guarantor make every reasonable
effort (which shall include participation by Guarantor in discussions with the
government authority involved) to secure confidential treatment and minimization
of the confidential information to be provided. Contractor shall not publish the
terms and conditions of this Guaranty, unless Guarantor provides its express
prior written consent thereto.
12
<PAGE>
IN WITNESS WHEREOF, Guarantor has caused this Financial Guaranty to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
The AES Corporation
By: /s/ William R. Luraschi
----------------------------------------
Name: William R. Luraschi
Title: Vice President
ACCEPTED AND AGREED:
Siemens Westinghouse Power Corporation
By: /s/ John L. Gibson
------------------------------------
Name: John L. Gibson
Title: New Generation Sales Manager
ACKNOWLEDGED AND AGREED as follows:
Owner hereby acknowledges and agrees that upon the occurrence and
during the continuance of an Event of Default under this Financial Guaranty,
Contractor shall have the right to:
(a) if such Event of Default continues for twenty (20) days, suspend the EPC
Agreement upon at least ten (10) days prior written notice to Owner, which
suspension may continue until either (i) such Event of Default is cured
(or waived) or (ii) Contractor shall have received from Guarantor either
(X) financial or other information reasonably demonstrating its ability to
perform its obligations under Section 2 of the Financial Guaranty or (Y)
other assurances of its ability to so perform that are reasonably
satisfactory to Contractor, and
(b) terminate the EPC Agreement upon at least ten (10) days prior written
notice to Owner, such termination notice, however, to be effective on the
later of (i) sixty (60) days after such notice of suspension under clause
(a) shall have been provided to Owner and (ii) ten days after the date of
such termination notice, provided that the suspension of the EPC Agreement
pursuant to clause (a) above shall have occurred and is still continuing.
13
<PAGE>
AES IRONWOOD, INC.
By: /s/ Patricia L. Rollin
----------------------------------
Name: Patricia L. Rollin
Title: Vice President AES Ironwood, Inc.
14
<PAGE>
Appendix N
Construction Progress
Milestones
----------------------------
============================
<PAGE>
Appendix N
Construction Progress Milestones
- --------------------------------------------------------------------------------
Milestones Schedule Completion
(Months after NTP)
- --------------------------------------------------------------------------------
1. Foundation Design Drawings for CT, ST. HRSG, 10/28/99 (9)
issued approved for construction.
- --------------------------------------------------------------------------------
2. P&IDs (for Main Steam, Feed water Circulating 5/28/99 (4)
Water systems) and 480V single line diagrams
(2 MCC's) complete and issued approved for
construction
- --------------------------------------------------------------------------------
3. Complete Combustion Turbine and Generator #1 3/28/00 (14)
foundation
- --------------------------------------------------------------------------------
4. Steam Turbine and Generator foundations 5/28/00 (16)
complete, excluding accessory foundations.
- --------------------------------------------------------------------------------
5. Site delivery of Combustion Turbine #1 6/28/00 (17)
longitudinal.
- --------------------------------------------------------------------------------
6. Site delivery of HRSG #2 pressure parts, 6/28/00 (17)
complete, excluding external piping.
- --------------------------------------------------------------------------------
7. All Main Transformers delivered to site 5/28/00 (16)
- --------------------------------------------------------------------------------
8. Switchyard complete ready to energize 12/28/00 (23)
- --------------------------------------------------------------------------------
<PAGE>
Appendix O
Scope Changes
----------------------------
============================
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
APPENDIX O
Base Bid Scope Changes
- ------------------------------------------------------------------------------------------------
Section and Previous Description Price ($) Comments
Item # Reference
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
A Scope Adders AES approval required
on or before the
Provisional
Commencement Date
- ------------------------------------------------------------------------------------------------
1 1.a1 New Entrance Road 397,774 Site Relocation
- ------------------------------------------------------------------------------------------------
2 1.a2 Perimeter Fence 37,494 Site Relocation
- ------------------------------------------------------------------------------------------------
3 1.a3 Add Prescott Pond Line 163,439 Site Relocation
- ------------------------------------------------------------------------------------------------
4 1.a4 Add Prescott Pond Electrical 256,772 Site Relocation
- ------------------------------------------------------------------------------------------------
5 2.a1 Site Grading/Filling 3,581,094 New General Arrangement -
Site Preparation
- ------------------------------------------------------------------------------------------------
6 2.b1 GA Roadways 151,438 New General Arrangement
- ------------------------------------------------------------------------------------------------
7 2.b2 GA Piping 83,588 New General Arrangement
- ------------------------------------------------------------------------------------------------
8 2.b3 GA Electrical 499,178 New General Arrangement
- ------------------------------------------------------------------------------------------------
9 2.b4 Circ Wate Pipe 1,441,219 New General Arrangement
- ------------------------------------------------------------------------------------------------
10 2.b5 Dual Water Source 111,280 New General Arrangement
- ------------------------------------------------------------------------------------------------
11 2.c1 Retention Pond 168,609 New General Arrangement -
Retention Pond
- ------------------------------------------------------------------------------------------------
12 2.c2 Retention Recirc Sys 135,143 New General Arrangement -
Retention Pond
- ------------------------------------------------------------------------------------------------
13 2.c3 Retention Emer O'flow 24,099 New General Arrangement -
Retention Pond
- ------------------------------------------------------------------------------------------------
14 2.c4 Retention Neutralize 139,679 New General Arrangement -
Retention Pond
- ------------------------------------------------------------------------------------------------
15 2.c5 Pond Recirc Turb Pmp & Pad 130,115 New General Arrangement -
Retention Pond
- ------------------------------------------------------------------------------------------------
16 2.d1 Revised Gen Bldg Fdn (Elev. 70) 358,898 New General Arrangement
- ------------------------------------------------------------------------------------------------
17 2.e1 New Gas Comp Bldg. 608,144 New General Arrangement -
Gas Compression
- ------------------------------------------------------------------------------------------------
18 2.e2 Gas Comp Electrical, 885,349 New General Arrangement -
Gas Compression
- ------------------------------------------------------------------------------------------------
19 2.e3 Gas Comp 3x50% install 396,083 New General Arrangement -
Gas Compression
- ------------------------------------------------------------------------------------------------
20 2.e4 Gas Compressors (Qty 3) 2,018,500 New General Arrangement -
Gas Compression
- ------------------------------------------------------------------------------------------------
21 2.h1 Sanitary Septic System 63,631 New General Arrangement -
Other systems
- ------------------------------------------------------------------------------------------------
22 2.h2 Storm Collection 166,229 New General Arrangement -
Other systems
- ------------------------------------------------------------------------------------------------
23 2.h3 O/W Separator Capacity 232,476 New General Arrangement -
Other systems
- ------------------------------------------------------------------------------------------------
24 2.I1 Condenser Titanium Tubes 250,000 Material Upgrade
- ------------------------------------------------------------------------------------------------
25 3.a1 Additional under frequency 5,000 Electrical Requirements
relay
- ------------------------------------------------------------------------------------------------
26 3.a2 Revenue Metering/Metering 587,482 Electrical Requirements
Units
- ------------------------------------------------------------------------------------------------
27 3.a4 Automatic Generation Control 50,000 Electrical Requirements
- ------------------------------------------------------------------------------------------------
28 3.a6 Generator Transducers 60,000 Electrical Requirements
- ------------------------------------------------------------------------------------------------
29 4 Evaporative Coolers 1200,000
- ------------------------------------------------------------------------------------------------
30 na Noise Adders $650,000
- ------------------------------------------------------------------------------------------------
31 2.f0,f1,f2 Single Stack w/2 flues & $3,317,254 New General Arrangement
Ductwork
- ------------------------------------------------------------------------------------------------
32 gl DBL Wall Fuel Oil Tank $1,762,435 New General Arrangement
- ------------------------------------------------------------------------------------------------
33 5 Zero Discharge System $6,500,000
w/50 gpm of Demin Water
(Gas Only)
- ------------------------------------------------------------------------------------------------
A Subtotal $26,432,402
- ------------------------------------------------------------------------------------------------
</TABLE>
-1-
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
APPENDIX O
Base Bid Scope Changes
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
B Agreement Scope Adders AES approval required
Under Consideration no later that 60 days
following the
Provisional
Commencement Date
- ------------------------------------------------------------------------------------------------
1 6 Asphalt Roads $522,600 Reduced to meet HRG
spec
- ------------------------------------------------------------------------------------------------
2 7 Classroom Training $320,000
- ------------------------------------------------------------------------------------------------
3 na Startup Chemicals $190,000
- ------------------------------------------------------------------------------------------------
4 g2 Truck FO Unloading (3-500 $385,000
gpm pumps/4 trucks)
- ------------------------------------------------------------------------------------------------
5 na Power Augmentation w/450 $3,400,000
gpm of Demin Water (Fuel
Oil)
- ------------------------------------------------------------------------------------------------
6 na Demin Water System for $1,500,000 No Power Augmentation
Fuel Oil Operation (450
gpm)
- ------------------------------------------------------------------------------------------------
</TABLE>
-3-
<PAGE>
Appendix P
Table of Submittals &
Approvals
---------------------
=====================
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX P
Table of Submittals and Approvals
- --------------------------------------------------------------------------------
Contractor will provide the followings drawings and documents in the types and
quantities indicated on the following table. After the first drawing or document
submittal, all revisions will be provided in the same quantities indicated for
the first submittal except where otherwise indicated on the following table.
DESCRIPTION OF COLUMN HEADINGS
OWNER REVIEW OR APPROVAL refers to drawing or document review, comment and
approval as described in Article 18.1 of the contract Agreement.
FIRST ISSUE refers to the type of issue of the referenced document to be
submitted to the Owner as the first formal submittal.
LAST PROJECT ISSUE refers to the Contractor issuing the final issue of the
drawings for record purposes. Contractor will update lists to conform to
Subsystem Turnover Package records and the Last Project Issue drawings supplied
by equipment Subcontractors will correspond to as shipped condition.
AS BUILT refers to a formal As Built design drawing issued by the Contractor
revised to indicate all documented modifications made during construction.
LEGEND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Number Quantity required; quantity is 1 if no number
- -----------------------------------------------------------------------------------------
<S> <C>
A Owner Review and Approval. Owner has two weeks to respond
with comments and/or approval. 2 weeks hold for response.
- -----------------------------------------------------------------------------------------
R Owner Review and Comments. No hold for follow-on design or
fabrications activities.
- -----------------------------------------------------------------------------------------
No Owner Review not required
- -----------------------------------------------------------------------------------------
P Print
- -----------------------------------------------------------------------------------------
PP Preliminary print
- -----------------------------------------------------------------------------------------
CP Construction or fabrication print
- -----------------------------------------------------------------------------------------
E Electronic format
- -----------------------------------------------------------------------------------------
FI First issue shall be when list is made available for Westinghouse project use
- -----------------------------------------------------------------------------------------
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
DESCRIPTION OWNER FIRST ISSUE LAST AS
REVIEW OR PROJECT BUILT
APPROVAL ISSUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DESIGN DRAWINGS
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Mechanical Design Drawings
- ---------------------------------------------------------------------------------------------------------------------
Plant Arrangement Drawings A 3PP 3P 3P+E
- ---------------------------------------------------------------------------------------------------------------------
Piping & Instrument Diagrams A 3PP 3P+E 3P+E
- ---------------------------------------------------------------------------------------------------------------------
Large Bore Piping Arrangements Drawings R 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Composite Piping Arrangements Drawings R 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Installation Detail Drawings R 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
HVAC Drawings R 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Heat Balance Diagrams R 2PP 2P 2P+E
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Electrical Design Drawings
- ---------------------------------------------------------------------------------------------------------------------
Single Line Diagrams A 3PP 3P 3P+E
- ---------------------------------------------------------------------------------------------------------------------
Three Line Diagrams A 2PP 2P 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Schematic Diagrams R 3CP 3P 3P+E
- ---------------------------------------------------------------------------------------------------------------------
Interconnecting Wiring Diagrams R 2CP 2P 2P+E.
- ---------------------------------------------------------------------------------------------------------------------
Composite Raceway Drawings R 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Cable Tray Layout Drawings
- ---------------------------------------------------------------------------------------------------------------------
Lighting Drawings for Control Rm. & Offices R 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Lighting Drawings - Other No 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Installation Detail Drawings R 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Grounding and Lightning Protection Drawings No 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Duct Bank Duct Number Drawings R 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Control Design Drawings
- ------------------------------------------------- ------------------ ----------------- ---------------- -------------
Local Logic Diagrams R 3CP 3P 3P+E
- ---------------------------------------------------------------------------------------------------------------------
WDPF Logic Diagrams R 3CP 3P 3P+E
- ---------------------------------------------------------------------------------------------------------------------
WDPF Graphics Drawings R 3CP 3P
- ---------------------------------------------------------------------------------------------------------------------
WDPF Program Logic Diagram R 2CP
- ---------------------------------------------------------------------------------------------------------------------
Typical Installation Details R 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Civil and Architectural Drawings
- ---------------------------------------------------------------------------------------------------------------------
Site Grading and Drainage Drawinp R 2CP 2P+E 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Foundation Location and Elevation Drawings R 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Composite Underground Utilities Drawings R 2CP 2P+E 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Foundation Drawings No 2CP 2P
- ---------------------------------------------------------------------------------------------------------------------
Concrete Floor Drawings R 2CP 2P 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Road Paving and Location Drawings R 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Typical Detail Drawings R 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Structural Steel Drawings (including pipe racks) No 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Building Architectural Drawings A 2PP 2P+E 2P+E
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
DESCRIPTION OWNER FIRST ISSUE LAST AS
REVIEW OR PROJECT BUILT
APPROVAL ISSUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LISTS
- ---------------------------------------------------------------------------------------------------------------------
Equipment List No 3FI 3P+E
- ---------------------------------------------------------------------------------------------------------------------
Valve List No 3FI 3P+E
- ---------------------------------------------------------------------------------------------------------------------
Strainer List No 3FI 3 P+E
- ---------------------------------------------------------------------------------------------------------------------
Orifice List No 3FI 3P+E
- ---------------------------------------------------------------------------------------------------------------------
Expansion Joint List No 3FI 3P+E
- ---------------------------------------------------------------------------------------------------------------------
Pipeline List No 3FI 3P+E
- ---------------------------------------------------------------------------------------------------------------------
Electrical Load List No 3FI 3P+E 3P+E
- ---------------------------------------------------------------------------------------------------------------------
Circuit List No 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Raceway List No 2CP 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Control Instrument and Device List No 3FI 3P+E 3P+E
- ---------------------------------------------------------------------------------------------------------------------
WDPF I/0 List No 2CP 3P+E 3P+E
- ---------------------------------------------------------------------------------------------------------------------
Contractor Drawing List No 2FI 2P+E
- ---------------------------------------------------------------------------------------------------------------------
List of Vendor Drawings No 2FI 2P+E
- ---------------------------------------------------------------------------------------------------------------------
Lubricants schedule R 2FI 2P+E
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
REPORTS
- ---------------------------------------------------------------------------------------------------------------------
Plant Auxiliaries Electrical Load A 3-When study 3P
Flow and Fault Study completed
- ---------------------------------------------------------------------------------------------------------------------
Electrical Relay Settings A 3-When study 3P
completed
- ---------------------------------------------------------------------------------------------------------------------
Geotechnical Report No 2-When
issued
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
MISCELLANEOUS
- ---------------------------------------------------------------------------------------------------------------------
Subsystem Turnover Packages No 2CP 2P
(Changes
Only)
- ---------------------------------------------------------------------------------------------------------------------
Water Balance Diagrams A 2PP 2P + E
- ---------------------------------------------------------------------------------------------------------------------
Vendor Conceptual Drawings R 4-when 4P + E
(P&ID's, GA's) first issued
to
contractor
- ---------------------------------------------------------------------------------------------------------------------
Other Vendor Drawings & No 4-when 4P + E
Information first issued
to
contractor
- ---------------------------------------------------------------------------------------------------------------------
Equipment Purchase Specifications R 2CP +
addenda
and
change orders
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
DESCRIPTION OWNER FIRST ISSUE LAST AS
REVIEW OR PROJECT BUILT
APPROVAL ISSUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Soil Resistivity Tests No 2-When tests
are completed
- ---------------------------------------------------------------------------------------------------------------------
Grounding System Design Calculations No 2-When work is 2P
completed
- ---------------------------------------------------------------------------------------------------------------------
Ground Grid Resistance Tests No 2-When tests
are completed
- ---------------------------------------------------------------------------------------------------------------------
Cathodic Protection Soil Tests No 2-When work is
completed
- ---------------------------------------------------------------------------------------------------------------------
Raw Water Well Pumping Flow Tests No 2-When tests
are completed
- ---------------------------------------------------------------------------------------------------------------------
Cathodic Protection Design Calculations No 2-When work is 2P
completed
- ---------------------------------------------------------------------------------------------------------------------
Battery Sizing Calculation for Each Battery No 2-When work is 2P
completed
- ---------------------------------------------------------------------------------------------------------------------
Flow Nozzle Tests No 2-When tests
are completed
- ---------------------------------------------------------------------------------------------------------------------
Gas Metering Tests No 2-When tests
are completed
- ---------------------------------------------------------------------------------------------------------------------
Revenue Metering Test and Calibration Report No 3-When tested
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
Contractor will furnish all drawings, lists, calculations, test reports, and
miscellaneous information in accordance with the table in this Appendix for
review of design and construction by the Owner and for maintenance and operation
of the Facility.
Where equipment Subcontractor-supplied drawings, calculations, test reports and
miscellaneous information include the above information, the Contractor will not
be required to redraw them provided they indicate information required below and
are properly cross-referenced to other information.
4
<PAGE>
DRAWINGS:
Plant Arrangement Drawings will indicate the location of all-major mechanical
equipment. major electrical equipment and panels, and major control and process
control panels, )including roll-out space or other maintenance access as
appropriate). A Site Plant Arrangement Drawing will also be provided showing the
location of all buildings, major equipment and plant roads. Equipment
identification on these drawings will match the equipment identification on the
Equipment List.
Piping and Instrument Diagrams (P&ID) will be provided for each plant system.
These diagrams will indicate all piping, except vents and drains, regardless of
size with each line identified by size, specific line number, and piping class
designation. All control valves and valves 2-1/2" and larger, equipment,
mechanical devices (such as orifice plates) and instruments and control devices
will be identified.
Large Bore Piping Arrangement Drawings will be provided for each system
indicating location, arrangement, and fabrication. Large bore pipe is pipe
2-1/2" and larger.
Single Bore Piping Arrangement Drawings will be provided for all electrical
systems. In lieu of Single-Line Diagrams for panel boards, the Contractor may
supply panel board lists with load descriptions for each panel circuit breaker.
Lighting circuits will not require circuit numbers.
Three Line Diagrams will be provided for the following:
o Generator Step-up Transformers, and Station Auxiliary
Transformers, including potential and current transformer
circuits.
o 4.16kV Switchgear, including potential and current transformer
circuits, but excluding load circuits.
5
<PAGE>
Schematic Diagrams will be provided for all equipment and systems with
hard-wired controls. Schematic Diagrams which do not include Interconnecting
Wiring diagrams will include crossreferences to Interconnecting Wiring diagram
drawing numbers.
Interconnecting Wiring Diagrams will be provided for all controls and instrument
circuits and will include the following:
o Terminal point connection wiring
o Circuit number
o Schematic Diagram reference number unless Schematic Diagram
reference number is inherent to the circuit number
o Both circuit ends or cross reference drawing number for unshown
circuit end
Composite Raceway Drawings will indicate cable tray in single-line or other
form, wireway, and all conduits 2-1/2"' and larger. These drawings will include
all cable tray, wireway, and conduit numbers, where applicable.
Contractor will provide Logic Diagram which will indicate logic control and
instrument and depict loop configurations and interlocks.
Composite Underground Utilities Drawings will include information included on
the Site Arrangement Drawing (simplified where required for clarity).
Concrete Floor Drawings will include design loads.
Electrical Relay Settings will be provided in report form for all relays down to
the 480 volt secondary unit substation breakers.
6
<PAGE>
Subsystem Turnover Packages will include pertinent construction data, the work
required to place subsystems in service, and pertinent subsystem drawings in
accordance with Westinghouse standard turnover practices.
Vendor Drawings and Vendor Information supplied by the equipment Subcontractor
to the Contractor will be provided to the Owner (except for proprietary
commercial information). Unless other wise included in the equipment
Subcontractor Instruction Manual or the Contractor's drawings, the equipment
Subcontractor drawings must include the information needs of standard utility
practices. Internal wiring diagrams do not need to include internal wiring of
electronic components or protective relays.
Contractor will provide Water Balance Diagrams in a format similar to the Water
Balance Diagram format in Appendix A.
7
<PAGE>
Appendix Q
List of Key Personnel
----------------------
======================
<PAGE>
APPENDIX Q
List of Key Personnel
o Project Manager
o Project Engineering Manager
o Construction Manager
o Cost and Schedule Manager
<PAGE>
Appendix R
-------------------------------------
=====================================
[*] The following twelve (12) pages
have been omitted and filed separately
with the Securities and Exchange
Commission as part of a Confidential
Treatment Request.
<PAGE>
Appendix S
NOT USED
-------------------------------------
=====================================
<PAGE>
Appendix T
NOT USED
-------------------------------------
=====================================
<PAGE>
Appendix U
Certain
Subcontractors
-------------------------------------
=====================================
<PAGE>
- --------------------------------------------------------------------------------
Appendix U
Certain sub contracts
- --------------------------------------------------------------------------------
o Air Compressors
o Boiler Feed Pumps
o Circulating Water Pumps
o Condensate Pumps
o Condenser
o Cooling Tower
o Cooling Tower Fan, Gear, and motor
o Gas compressors
o Generator, if sub contracted
o GSU Transformers
o HRSG
o Demin Plant
o 6.9 kV switchgear and MCC
o Turbines, if subcontracted
o Zero discharge water system, if included in EPC scope
<PAGE>
Exhibit 10.5
An asterisk [(*)] indicates that confidential information has been omitted
and filed separately with the Securities and Exchange Commission as part of a
Confidential Treatment Request.
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND
SCHEDULED OUTAGE TFA SERVICES CONTRACT
between
AES IRONWOOD, INC.
and
SIEMENS WESTINGHOUSE POWER CORPORATION
Dated as of September 23, 1998
AES IRONWOOD PROJECT
Proprietary Information AES Ironwood Project
September 23, 1998 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
<TABLE>
<S> <C> <C>
Article 1 DEFINITIONS; GENERAL REFERENCES 1
-----------------------------------
Section 1.1 Defined Terms 1
Section 1.2 General References 5
Article 2 CONTRACT DOCUMENTS 6
------------------
Section 2.1 Contract Documents 6
Section 2.2 Conflicting Provisions 6
Article 3 SCOPE OF WORK 6
-------------
Section 3.1 Seller's Scope 6
Section 3.2 Buyer's Scope 6
Section 3.3 Early Replacement 6
Section 3.4 Parts Life Credit 6
Article 4 CONTRACT PRICE AND PAYMENT TERMS 8
--------------------------------
Section 4.1 Contract Price 8
Section 4.2 Taxes 8
Section 4.3 Invoices 8
Section 4.4 Payment 8
Section 4.5 Notice of Payment Disputes 8
Section 4.6 Late Payments 9
Section 4.7 Payment Security 9
Article 5 TERM AND OUTAGES 9
----------------
Section 5.1 Term 9
Section 5.2 Unscheduled Outage 9
Section 5.3 Unscheduled Outage Work 10
Section 5.4 Exclusivity of Obligations and Remedies 11
Article 6 CHANGES 12
-------
Section 6.1 Request For Changes 12
Section 6.2 Adjustment 12
Section 6.3 No Additional Compensation Changes 12
Section 6.4 Changes in Operating Parameters 12
Article 7 DELIVERY; TITLE; RISK OF LOSS 12
-----------------------------
Section 7.1 Delivery of New Program Parts or Miscellaneous Hardware 12
Section 7.2 Shop Repaired Program Parts 13
Section 7.3 Transportation 13
</TABLE>
Proprietary Information i AES Ironwood Project
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<PAGE>
<TABLE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
<S> <C> <C>
Article 8 WARRANTIES 14
----------
Section 8.1 New Program Parts and Miscellaneous Hardware Warranty and Exclusive 14
Remedy
Section 8.2 Shop Repair Warranty and Exclusive Remedy 14
Section 8.3 Services Warranty and Exclusive Remedy 15
Section 8.4 Shop Repair Turn Around Time Warranty and Exclusive Remedy 15
Section 8.5 Warranty Conditions 16
Section 8.6 Exclusivity of Warranties and Remedies 16
Section 8.7 Relationship to EPC Contract 17
Article 9 INTELLECTUAL PROPERTY 17
---------------------
Section 9.1 Patent, Copyright, or Trade Secret Infringement 17
Section 9.2 Limitation of Intellectual Property Obligations 17
Section 9.3 Exclusivity of Obligations and Remedies 18
Article 10 COMPLIANCE WITH LAWS 18
--------------------
Section 10.1 Generally 18
Section 10.2 Changes in Law, etc. 18
Article 11 INSURANCE 19
---------
Section 11.1 Seller's Insurance 19
Section 11.2 Buyer's Insurance 19
Section 11.3 Policies 19
Section 11.4 Bearing On Other Contractual Rights and Obligations 20
Article 12 TERMINATION 20
-----------
Section 12.1 Termination for Seller's Inability to Perform 20
Section 12.2 Termination for Seller's Failure to Perform 20
Section 12.3 Buyer's and Seller's Rights and Obligations when Buyer Terminates 20
for Seller's Inability or Failure to Perform
Section 12.4 Termination for Buyer's Convenience 21
Section 12.5 Buyer's and Seller's Rights and Obligations when Buyer Terminates 21
for its Convenience
Section 12.6 Termination by Seller 22
Section 12.7 Buyer's and Seller's Rights and Obligations when Seller Terminates 22
Section 12.8 Exclusivity of Rights and Remedies 22
Article 13 INDEMNIFICATION 23
---------------
Section 13.1 Seller's Indemnity 23
Section 13.2 Buyer's Indemnity 23
Article 14 LIMITATION OF LIABILITY 24
-----------------------
Section 14.1 No Consequential Damages 24
Section 14.2 Exclusive Remedy and Cap on Liability 24
</TABLE>
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<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
<TABLE>
<S> <C> <C>
Section 14.3 Extent of Waivers 24
Section 14.4 Extent of Conflicts 25
Article 15 FORCE MAJEURE 25
-------------
Section 15.1 Excuse by Force Majeure 25
Section 15.2 Effect of Force Majeure 25
Article 16 MISCELLANEOUS 25
-------------
Section 16.1 Cooperation In Financing 25
Section 16.2 Proprietary Information, etc. 26
Section 16.3 Subcontractors 27
Section 16.4 Third Parties 28
Section 16.5 Dispute Resolution 28
Section 16.6 Assignment and Delegation 28
Section 16.7 Severability 29
Section 16.8 Amendments 29
Section 16.9 Joint Effort 29
Section 16.10 Captions 29
Section 16.11 Non-Waiver 29
Section 16.12 Applicable Law 29
Section 16.13 Successors and Assigns 29
Section 16.14 Counterparts 29
Section 16.15 Notices 29
Section 16.16 Complete Contract 30
Section 16.17 Site Access 30
Section 16.18 Permits and Licenses 30
Section 16.19 Special Packaging 30
Section 16.20 Return of Program Parts or Miscellaneous Hardware 30
Section 16.21 Transfer 31
Section 16.22 Survival 31
Section 16.23 Environmental Compliance 32
Section 16.24 Liquidated Damages Not a Penalty 32
Section 16.25 Project Conformance 32
Section 16.26 501G Fleetwide Issue Notification 32
----------------------------
Exhibit A - Scope of Work Description
Exhibit B - Program Parts List
Exhibit C - Program Parts Supplied and Repaired Schedule
Exhibit D - Current Service Bulletin 36803
Exhibit E - Payment Schedule
Exhibit F - Fuel & Water Specifications
</TABLE>
Proprietary Information iii AES Ironwood Project
September 23,1998 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
THIS MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE TFA SERVICES
CONTRACT is entered into as of September 23, 1998, by and between AES IRONWOOD,
INC, a Delaware corporation ("Buyer"), and SIEMENS WESTINGHOUSE POWER
CORPORATION, a Delaware corporation("Seller").
WHEREAS, Buyer is developing a power project to be located near
Lebanon, Pennsylvania (the "Project"); and
WHEREAS, in connection with the Project, Buyer desires to purchase from
Seller and Seller desires to provide to Buyer combustion turbine parts, shop
repairs and scheduled outage technical field assistance services, all as more
particularly described herein;
NOW, THEREFORE, in consideration of these premises and mutual covenants
contained herein, the parties hereby agree as follows:
ARTICLE 1. DEFINITIONS; GENERAL REFERENCES
1.1 Defined Terms. The following terms shall have the following meanings when
used in this Contract, unless the context requires otherwise:
"Buyer" has the meaning set forth in the Preamble.
"Buyer's Affiliates" means AES Corporation, and any subsidiary thereof,
excluding any entity which is partially owned by a competitor of Seller in the
field of design, engineering, manufacturing, maintenance, operation, procurement
and construction of power generation, transmission or distribution facilities.
"Combustion Turbine Maintenance Management Program Services" means all of the
program maintenance managerial services to be provided by Seller hereunder, as
described in Section 2.5 of Exhibit A, Scope of Work Description.
"Change" has the meaning set forth in Article 6.
"Change Order" has the meaning set forth in Article 6.
"Combustion Turbine" means one of the Project's two 501G combustion turbines
furnished by the EPC Contractor under the EPC Contract or any replacement 501G
combustion turbine furnished by the EPC Contractor or one of its affiliates
under the EPC Contract.
"Contract" means this Program Parts, Shop Repairs and Scheduled Outage TFA
Services Contract, including all Exhibits hereto, as amended, supplemented or
modified from time to time.
Proprietary Information 1 AES Ironwood Project
September 23,1998 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
"Contract Price" has the meaning set forth in Section 4.1.
"Day" means a calendar day.
"Delayed Payment Rate" means a rate of interest per annum equal to the reference
rate quoted from time to time by the Bank of America, NT & SA plus 2%, or the
maximum rate permitted by applicable Law, whichever is less.
"Delivery" has the meaning set forth in Section 7.1.
"EPC Contract" means the Agreement for Engineering, Procurement and Construction
Services between the EPC Contractor and Buyer dated as of September 23,1998 as
such agreement may be amended, supplemented or modified from time to time.
"EPC Contractor" means Siemens Westinghouse Power Corporation and its successor
and permitted assigns as "Contractor" under the EPC Contract.
"Equivalent Base Load Hours ("EBH")" means the calculated result of equivalent
base load hours determined in accordance with Exhibit D, Current Service
Bulletin 36803 as amended from time to time.
"Equivalent Starts" means the calculated result of equivalent starts determined
in accordance with Exhibit D, Current Service Bulletin 36803 as amended from
time to time.
"Escalation Factor" means the net percentage increase or decrease (as the case
may be) in the Consumer Price Index (published by the US Department of Labor)
over the period from base date of January 1, 1998 through date of the invoice.
If such index ceases to be published such similar substitute index as is
mutually agreed to by the parties, shall apply.
"Facility" means the combined cycle electric generating facility to be located
in Lebanon, Pennsylvania which makes up the Project, and includes the two (2)
Combustion Turbines.
"Fee" means the applicable fee listed in Exhibit E, Payment Schedule for the
given number of EBHs.
"Force Majeure" has the meaning given in Section 15.1.
"GPU Energy" means GPU Energy, Metropolitan Edison Company and Pennsylvania
Electric Company, and their respective successors and permitted assigns, as
purchasers of electricity from the Facility under the Power Purchase Agreement.
"Hazardous Material" has the meaning given in Section 16.23, Environmental
Compliance.
Proprietary Information 2 AES Ironwood Project
September 23,1998 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
"Hazardous Waste" means any waste that is found to pre-exist or is generated at
the Site which is defined in the Laws to be hazardous.
"Laws" means all applicable laws, statutes, rules, regulations, orders and
ordinances or specified standards or objective criteria contained in any
applicable license, permit or approval, or other legislative or administrative
act, of the United States of America or any state of the United States, agency,
department, authority, political subdivision or other instrumentality thereof,
or a decree, judgment or order of a court, including but not limited to those
governing wages, hours, employment discrimination and safety, laws regarding
workers' compensation, disability laws and employee benefit laws.
"Miscellaneous Hardware" means miscellaneous hardware items including but not
limited to pins, springs, studs, gaskets, tie wires, fasteners, screws, washers,
nuts, bolts which are required to roll out and roll in the Program Parts which
is supplied by Seller under this Contract or in accordance with a Change Order
hereto, issued pursuant to Article 6, Changes.
"New Program Parts" means the Program Part(s) that are listed in Exhibit B,
Program Parts List which are supplied by Seller under this Contract, when they
are new and unused.
"New Program Parts and Miscellaneous Hardware Warranty" has the meaning given in
Section 8.1.
"Normal Wear and Tear" means the level of wear and tear that the Facility or
part(s) thereof will experience as a result of being operated and maintained in
accordance with the instruction manuals and operating criteria provided to Buyer
by the EPC Contractor or the original equipment manufacturer and any mutually
agreed upon variance thereto, the operating parameters specified in Section 6.4
the warranty conditions specified in Section 8.5 and, to the extent not
inconsistent with any of the foregoing, in general accordance with Prudent
Utility Practices. The definition of Normal Wear and Tear expressly excludes any
consequential/downstream/downflow damage caused to the Facility or part(s)
thereof by a part which gave way upstream/upflow.
"Period" means the interval from the completion of one Scheduled Outage through
the next Scheduled Outage of the applicable Combustion Turbine. For the purpose
of this definition the initial Period shall begin at initial synchronization of
the applicable Combustion Turbine.
"Power Purchase Agreement" means collectively the three amended and restated
power purchase agreements relating to the Facility between GPU Energy and Buyer
as such agreements may be aggregated, amended, supplemented or modified from
time to time.
"Program Part(s)" means the number and type of part(s) of the Combustion Turbine
that are listed in Exhibit B, Program Parts List plus the equivalent parts to
those listed in Exhibit B, Program Parts List, which were included in the
original Combustion Turbine(s).
"Project" has the meaning set forth in the Preamble.
Proprietary Information 3 AES Ironwood Project
September 23,1998 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
"Prudent Utility Practice" means the practices, methods, techniques and
standards that at the particular time of performance of the Workscope
Obligations by Seller or of Buyer's obligations specified in Sections 3 and 4 of
Exhibit A, (i) are generally accepted in the electric power industry in the
United States, for use in connection with the design, engineering, construction,
testing, operation and maintenance of power stations of the same or similar size
and type as the Facility, all in a manner consistent with Laws, reliability,
safety, environmental protection, economy and expediency, and (ii) conform in
all material respects to the manufacturer's design, engineering, construction,
testing, operation and maintenance guidelines applicable to the equipment in
question, including Seller's operation and maintenance guidelines for the
Combustion Turbines. Prudent Utility Practices are not limited to the optimum
practice or method to the exclusion of others, but rather refer to commonly used
and reasonable practices and methods.
"Seller" has the meaning set forth in the Preamble.
"Seller's Affiliates" means Siemens A.G., and any subsidiary thereof, excluding
any entity which is partially owned by a competitor of Buyer in the field of
development and ownership of power generation, transmission or distribution
facilities.
"Scheduled Outage" means a planned outage of the applicable Combustion Turbine,
scheduled by Buyer and Seller, during which the applicable Scheduled Outage TFA
Services described in Exhibit A, Scope of Work Description will be performed. A
Scheduled Outage will commence when the Combustion Turbine breaker is opened and
will end when the Seller has completed its applicable Scheduled Outage TFA
Services for the given Scheduled Outage and Seller has submitted to Buyer
written notice of completion and Buyer has concurred. The projected Scheduled
Outage plan is contained in Exhibit C, Program Parts Supplied and Repaired
Schedule.
"Scheduled Outage TFA Services" means all of the TFA Services to be provided by
Seller hereunder during the applicable Scheduled Outage, as described in Section
2.4 of Exhibit A, Scope of Work Description, but excludes services provided
pursuant to the EPC Contract.
"Services" means any and all services to be provided by Seller under this
Contract including Scheduled Outage TFA Services, Combustion Turbine Maintenance
Program Management Services and any services performed in accordance with a
Change Order hereto issued pursuant to Article 6, Changes.
"Services Warranty" has the meaning given in Section 8.3.
"Shop Repair" means shop repair/refurbishment work performed by Seller on
Program Parts at Seller's manufacturing plant, Seller's service facility or a
suitable facility selected by Seller.
Proprietary Information 4 AES Ironwood Project
September 23,1998 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
"Site" means the real property located near Lebanon, Pennsylvania on which the
Project is to be or has been constructed.
"Term" has the meaning given in Section 5.1, Term.
"TFA Services" means the advice and consultation given to Buyer's personnel by a
field service representative of Seller with respect to:
(i) installation, inspection, repair and maintenance activities performed
by others at the Site, and
(ii) any Seller recommended quality assurance procedures for activities
performed at the Site.
Technical Field Assistance does not include management, supervision or
regulation of Buyer's personnel, agents and contractors.
"Unscheduled Outage" means any outage of a Combustion Turbine other than a
Scheduled Outage.
"Workscope Obligations" means all obligations of Seller pursuant to the terms of
this Contract to perform Services and to provide Program Parts and Miscellaneous
Hardware, and includes any other equipment, parts, shop repairs or services
mutually agreed to by the parties hereto and specified in a Change Order issued
pursuant to Article 6 hereof.
1.2 General References. As used in this Contract, the terms "herein," "herewith"
and "hereof" are references to this Contract, taken as a whole, the term
"includes" or "including" shall mean "including, without limitation," and
references to a "Section," "subsection," "clause," "Article" or "Exhibit" shall
mean a Section, subsection, clause, Article or Exhibit of this Contract, as the
case may be, unless in any such case the context requires otherwise. The
singular shall include the plural and the masculine shall include the feminine
and neuter, and vice versa.
Proprietary Information 5 AES Ironwood Project
September 23,1998 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
ARTICLE 2. CONTRACT DOCUMENTS
2.1 Contract Documents. This Contract consists of this contract document itself
and the following Exhibits which are specifically made a part hereof by
reference:
Exhibit A - Scope of Work Description
Exhibit B - Program Parts List
Exhibit C - Program Parts Supplied and Repaired Schedule
Exhibit D - Current Service Bulletin 36803
Exhibit E - Payment Schedule
Exhibit F - Fuel & Water Specification
2.2 Conflicting Provisions. In the event of any conflict between this document
and any Exhibit hereto, the terms and provisions of this document, as amended
from time to time, shall control. In the event of any conflict among the
Exhibits, the following order of precedence shall govern: Exhibit E, A, B, C, D,
and F. Subject to the foregoing, the several instruments forming part of this
Contract are to be taken as mutually explanatory of one another and in the case
of ambiguities or discrepancies within or between such parts the same shall be
explained and adjusted by the mutual agreement of the Parties.
ARTICLE 3. SCOPE OF WORK
3.1 Seller's Scope. During the Term, Seller shall fulfill its Workscope
Obligations specified in Exhibit A, Scope of Work Description.
3.2 Buyer's Scope. During the Term, Buyer shall fulfill its obligations
specified in Exhibit A, Scope of Work Description, and shall perform any other
obligations mutually agreed to by the parties and specified in a Change Order
issued pursuant to Article 6, Changes.
3.3 Early Replacement. If, due to Normal Wear and Tear, (i) a Program Part has
failed or (ii) it is determined that a Program Part will not last until the next
Scheduled Outage (in each case, after the warranty periods for such Program Part
set forth in Section 8.1 hereof or set forth in the EPC Contract have expired),
and such part has to be replaced prior to the scheduled replacement period per
Exhibit C, Program Parts Supplied and Repaired Schedule, Seller shall replace
such Program Part early by moving up a New Program Part which is scheduled to be
delivered at a later date per Exhibit C, Program Parts Supplied and Repaired
Schedule, if such a New Program Part remains available under Exhibit C (Buyer
shall be entitled to participate in the decision making process regarding the
actual parts life and the degree of repair or refurbishment associated with any
Program Part(s). The final decision, however, with regard to actual parts life
and the degree of repair or refurbishment associated with any Program Part(s)
shall be made by Seller based on Prudent Utility Practices and communicated to
Buyer. If the Buyer disputes Seller's final decision based on the assertion that
Seller's final decision is inconsistent with Prudent Utility Practices, then
Buyer may seek to resolve such dispute in accordance with
Proprietary Information 6 AES Ironwood Project
September 23,1998 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
Section 16.5, Dispute Resolution.). If the actual replacement date is less than
or equal to one year earlier than the Scheduled Outage during which the Program
Part was scheduled to be replaced per Exhibit C, Program Parts Supplied and
Repaired Schedule, such early replacement shall not affect the Contract Price or
Exhibit E, Payment Schedule. If the actual replacement date is more than one
year earlier than the Scheduled Outage during which the Program Part was
scheduled to be replaced, per Exhibit C, Program Parts Supplied and Repaired
Schedule, such early replacement shall result in a change to Exhibit E, Payment
Schedule, pursuant to a Change Order, levelizing the cash flow affect of moving
the replacement part up over the remaining Term on a $/EBH basis and modifying
the Fees listed in Exhibit E accordingly. Once all of the New Program Parts
available under Exhibit C, Program Parts Supplied and Repaired Schedule have
been delivered pursuant to this Section and no further replacements remain to be
provided under Exhibit C, Buyer shall purchase, pursuant to Section 3.4, Parts
Life Credit, such further replacement Program Parts required for the remaining
Term of the Contract and Seller shall provide such parts at the discounted price
calculated in accordance with Section 3.4, Parts Life Credit. Seller's
obligation to provide such required early replacement Program Parts shall be to
obtain and deliver to the Project the required replacement Program Parts,
whether new or repaired, as soon as commercially reasonably possible so as to
minimize the duration of the outage.
3.4 Parts Life Credit. After conclusion of the applicable warranty periods
stated in Section 8.1 or in the EPC Contract, as the case may be, Seller will
provide a parts life credit if a Program Part requires replacement due to Normal
Wear and Tear pursuant to Section 3.3 prior to meeting neither its expected
useful life as calculated in terms of EBHs as specified in Exhibit B, Program
Parts List, nor its expected useful life as calculated in terms of Equivalent
Starts, as specified in Exhibit B, Program Parts List (Buyer shall be entitled
to participate in the decision making process regarding the actual parts life
and the degree of repair or refurbishment associated with any Program Part(s).
The final decision, however, with regard to actual parts life and the degree of
repair or refurbishment associated with any Program Part(s) shall be made by
Seller based on Prudent Utility Practices and communicated to Buyer. If the
Buyer disputes Seller's final decision based on the assertion that Seller's
final decision is inconsistent with Prudent Utility Practices, then Buyer may
seek to resolve such dispute in accordance with Section 16.5, Dispute
Resolution.). The parts life credit will be calculated by multiplying the price
for such Program Part's replacement specified in Exhibit B, Program Parts List
subject to escalation pursuant to the Escalation Factor, by the lesser of: (i)
the expected useful life of the Program Part needing to be replaced in terms of
EBHs, as specified in Exhibit B, Program Parts List, minus the total number of
EBHs incurred by such Program Part, divided by the expected useful life of such
Program Part in terms of EBHs, as specified in Exhibit B; or (ii) the expected
useful life of the Program Part needing to be replaced in terms of Equivalent
Starts, as specified in Exhibit B, minus the total number of Equivalent Starts
incurred by such Program Part, divided by the expected useful life of such
Program Part in terms of Equivalent Starts, as specified in Exhibit B. Once all
of the New Program Parts, under Exhibit C, Program Parts Supplied and Repaired
Schedule, have been delivered pursuant to Section 2.1 of Exhibit A, Scope of
Work Description, or Section 3.3, Early Replacement, and no further replacements
exist under Exhibit C, Buyer shall use this credit towards the purchase of such
Program Part replacements. The purchase price for such Program
Proprietary Information 7 AES Ironwood Project
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<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
Part's replacement shall be the price specified therefore in Exhibit B, Program
Parts List with the parts life credit applied and shall be paid, pursuant to a
Change Order, by levelizing the price of Program Part's replacement over the
remaining Term on a $/EBH basis and modifying the Fees listed in Exhibit E
accordingly. However, in no event, shall any parts life credit be extended under
this Section beyond the end of the Term of this Contract.
ARTICLE 4. CONTRACT PRICE AND PAYMENT TERMS
4.1 Contract Price. As full consideration of the performance by Seller of the
Workscope Obligations (other than those Workscope Obligations provided pursuant
to a Change Order), Buyer will pay to Seller the Fees as adjusted either up or
down by the Escalation Factor at the time of each invoice. The "Contract Price"
shall be the aggregate total of the Fees as adjusted plus any additional payment
amount mutually agreed to by the parties pursuant to a Change Order hereto,
issued pursuant to Article 6, Changes.
4.2 Taxes. The Contract Price paid or to be paid to Seller under the Contract
does not include any federal, state, (other than federal or state, income taxes
imposed on Seller, or Seller's subcontractors or subvendors), or local property,
license or privilege (other than federal, state or local assessments for
licenses and privileges associated with Seller's ability to conduct general
business within the area), sales, use, excise, value added, gross receipts, or
similar taxes now or hereafter applicable to, measured by, or imposed upon or
with respect to the transaction, the property, its sale, its value or its use,
or any services performed in connection therewith. Buyer agrees to pay or
reimburse Seller for any such taxes which Seller or its subcontractors or
subvendors are required to pay. Seller shall use reasonable efforts and due
diligence, and shall cause its subcontractors or subvendors to use their
reasonable efforts and due diligence, to efficiently manage its performance of
the Workscope Obligations hereunder so as to minimize the incurrence of any
federal, state or local property, license or privilege, sales, use, excise,
value added, gross receipts or similar taxes to be paid or reimbursed by Buyer
hereunder. Taxes to be paid by Buyer do not include any taxes that Seller should
not have incurred if it had used such reasonable efforts and due diligence.
4.3 Invoices. Per Exhibit E Payment Schedule, Seller shall furnish Buyer an
invoice indicating the Fee being invoiced, as adjusted up or down in accordance
with this Contract by the Escalation Factor at the time of such invoice.
4.4 Payment. Within twenty-five (25) Days following the date Buyer receives each
invoice under Section 4.3, Buyer shall pay to Seller the undisputed amount of
the invoice. All payments to Seller shall be made by wire transfer to the
account of the Seller at Mellon Bank, N.A., Account # 038-0269,ABA # 043000261,
or such other depository as Seller shall designate by written notice to Buyer.
4.5 Notice of Payment Disputes. Notwithstanding Buyer's obligations under
Section 4.4 , if prior to the expiration of the applicable period for payment
referenced in Section 4.4, Buyer disputes that any Workscope Obligations satisfy
the requirements of this Contract, Buyer shall, prior to the expiration of such
period, provide Seller with written notice identifying the basis for such
dispute. Thereafter, the payment of such disputed amounts shall be deferred
until such
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dispute has been resolved to the satisfaction of Buyer and Seller. Any dispute
which is not resolved by mutual agreement shall be resolved in accordance with
Section 16.5.
4.6 Late Payments. If there is a dispute about any amount invoiced by Seller,
the amount not in dispute shall be promptly paid as described in this Article 4,
and any disputed amount which is ultimately determined to have been payable
prior to the actual date of payment shall be paid with interest, at the Delayed
Payment Rate, from the date due to the date of payment.
4.7 Payments Not Acceptance of Workscope Obligations. No payment made hereunder
shall be considered or deemed to represent that Buyer has inspected the
Workscope Obligations, or checked the quality or quantity thereof and shall not
be deemed or construed as approval or acceptance of any Workscope Obligations,
or as a waiver of any claim or right that Buyer may then or thereafter have,
including any warranty right.
ARTICLE 5. TERM AND OUTAGES
5.1 Term. The Term of the Contract shall commence on the date specified in the
Recitals and unless terminated early pursuant to Article 12, shall terminate
upon completion of the Shop Repairs following the eighth (8th) Scheduled Outage
of the applicable Combustion Turbine or ten (10) years from initial
synchronization of the applicable Combustion Turbine, whichever occurs first, as
it relates to the applicable Combustion Turbine.
5.2 Unscheduled Outages
5.2.1 If during the Term, an Unscheduled Outage occurs which is the result of
(i) the failing of a New Program Part supplied by Seller, to conform with the
New Program Parts and Miscellaneous Hardware Warranty set forth herein, (ii) the
failing of a Shop Repair, supplied by Seller, to conform with the Shop Repair
Warranty set forth herein, (iii) a Program Part requiring replacement due to
Normal Wear and Tear pursuant to Section 3.3 prior to achieving its expected
life in terms of EBHs or Equivalent Starts as specified in Exhibit B, Program
Parts, or (iv) the failure of a Service, performed by Seller, to conform with
the Service Warranty set forth herein, then Buyer shall hire Seller, to the
extent not supplied by Seller as a warranty remedy under Seller's warranties
contained in Article 8 of this Contract, pursuant to a Change Order, to supply
any additional parts of the type listed in Exhibit B, Program Parts List,
Miscellaneous Hardware, Shop Repairs, and TFA Services related to the Combustion
Turbine, required for such Unscheduled Outage and Seller shall supply (a) any
such additional parts of the type listed in Exhibit B, Program Parts List
required for such Unscheduled Outage, at the prices specified in Exhibit B,
Program Parts List, subject to escalation pursuant to the Escalation Factor,
discounted by any applicable parts life credit, (b) any such Miscellaneous
Hardware and Shop Repairs required for such Unscheduled Outage, at the prices
specified in Seller's Domestic Price Lists, in effect at the time of supply or
performance, or in Seller's price quote at the time of supply or performance, if
Seller's Domestic Price lists do not include a price for the required
Miscellaneous Hardware or Shop Repairs, and (c) any such TFA Services related to
the Combustion Turbine required for such Unscheduled Outage, at the prices
specified in Seller's Domestic Price Lists, in effect at the time of supply or
performance with a 10% discount applied
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capped at a maximum of $100,000 per year, or in Seller's price quote at the time
of supply or performance with a 10% discount applied capped at a maximum of
$100,000 per year, if Seller's Domestic Price lists do not include a price for
the required TFA Services.
If such an Unscheduled Outage occurs within 1,000 EBHs of a Scheduled Outage and
additional parts, of the type listed in Exhibit B, Program Parts List,
Miscellaneous Hardware, Shop Repairs, and TFA Services to be used during the
Unscheduled Outage are part of the Program Parts Miscellaneous Hardware, Shop
Repairs and Scheduled Outage TFA Services which were going to be used during the
upcoming Scheduled Outage, the upcoming Scheduled Outage shall be moved up in
time and those Program Parts Miscellaneous Hardware, Shop Repairs and Scheduled
Outage TFA Services shall be provided during the Unscheduled Outage/moved -up
Scheduled Outage. Buyer shall not be required to pay any additional money for
those Program Parts Miscellaneous Hardware, Shop Repairs and Scheduled Outage
TFA Services which are provided early during the Unscheduled Outage/moved-up
Scheduled Outage.
5.2.2 If during the Term an Unscheduled Outage occurs for reasons other than
those set forth in Section 5.2.1 above, then Buyer shall hire Seller, to the
extent not supplied by Seller as a warranty remedy under Seller's warranties
contained in Article 8 of this Contract, pursuant to a Change Order, to supply
any additional parts of the type listed in Exhibit B, Program Parts List,
Miscellaneous Hardware, Shop Repairs or technical field assistance service work
on the Combustion Turbine required for such Unscheduled Outage, and Seller shall
supply such (a) additional parts, of the type listed in Exhibit B, Program Parts
List required for such Unscheduled Outage, at the prices specified in Exhibit B,
Program Parts List, subject to escalation pursuant to the Escalation Factor,
discounted by any applicable parts life credit, (b) Miscellaneous Hardware and
Shop Repairs, at the prices specified in Seller's Domestic Price Lists, in
effect at the time of supply or performance, or in Seller's price quote at the
time of supply or performance, if Seller's Domestic Price lists do not include a
price for the required additional Miscellaneous Hardware or Shop Repairs, in
effect at the time of supply, and (c) TFA Service, at the prices specified in
Seller's Domestic Price Lists, in effect at the time of supply or performance,
or in Seller's price quote at the time of supply or performance, if Seller's
Domestic Price lists do not include a price for the required TFA Services.
If such an Unscheduled Outage occurs within 1,000 EBHs of a Scheduled Outage and
additional parts, of the type listed in Exhibit B, Program Parts List,
Miscellaneous Hardware, Shop Repairs and TFA Services to be used during the
Unscheduled Outage are part of the Program Parts, Miscellaneous Hardware, Shop
Repairs and Scheduled Outage TFA Services which were going to be used during the
upcoming Scheduled Outage, the upcoming Scheduled Outage shall be moved up in
time and those Program Parts Miscellaneous Hardware, Shop Repairs and Scheduled
Outage TFA Services shall be provided during such Unscheduled Outage/Moved-up
Scheduled Outage. Buyer shall not be required to pay any additional money for
those Program Parts, Miscellaneous Hardware, Shop Repairs and Scheduled Outage
TFA Services which are provided early during such Unscheduled Outage/Moved-up
Scheduled Outage pursuant to the preceding sentence.
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5.3 Unscheduled Outage Work. Seller shall be entitled to a Change Order for any
additional parts of the type listed in Exhibit B, Program Parts List,
Miscellaneous Hardware, Shop Repairs or technical field assistance service work
on the Combustion Turbine purchased by Buyer from Seller pursuant to Section 5.2
above in accordance with Article 6. In the case of an Unscheduled Outage,
Seller, upon notification from Buyer via a Change Order, agrees to take prompt
action(s) to mobilize its service personnel to the Project site to provide the
technical field assistance services requested in such Change Order, and agrees
to provide any additional parts of the type listed in Exhibit B, Program Parts
List specified in such Change Order as soon as reasonably commercially
practicable, to minimize downtime; provided, however and notwithstanding the
prices specified in Section 5.2 above, that if Seller delivers such additional
parts of the type listed in Exhibit B, Program Parts List within (a) fifteen
(15) days of receipt of such Change Order, Seller shall be paid by Buyer the
price for such additional parts of the type listed in Exhibit B, Program Parts
List, as specified in Section 5.2 above, plus 17%, (b) after fifteen (15) days
but within thirty (30) days of such Change Order, Seller shall be paid by Buyer
the price for such additional parts of the type listed in Exhibit B, Program
Parts List, as specified in Section 5.2 above, or (c) after thirty (30) days of
such Change Order, Seller shall be paid the price for such additional parts of
the type listed in Exhibit B, Program Parts List, as specified in Section 5.2
above, minus 17%.
Notwithstanding the provisions of the previous paragraph, in the event that an
Unscheduled Outage has occurred and Seller fails, by the end of the second day
(as it may be extended pursuant to Article 15, Force Majeure) following Seller's
receipt of written notice of the Unscheduled Outage, to send a TFA Services
representative to the Site who can start providing TFA Services related to the
Combustion Turbine for the Unscheduled Outage, then, upon Seller's failure,
Buyer may obtain another qualified person at Buyer's cost to start providing TFA
Services related to the Combustion Turbine for the Unscheduled Outage. If Buyer
elects to exercise its right under the preceding sentence, Buyer shall take full
responsibility for any damage to the Facility or any adverse effects on the
warranties, expected lives, Unscheduled Outages, early Program Part replacements
and reduction in time intervals between Scheduled Outage expressed herein that
may be caused as a result thereof. In the event that (x) Buyer has exercised its
rights under the first sentence of this paragraph, (y) the Combustion Turbine
has been disassembled and is ready to be inspected to determine the cause of the
Unscheduled Outage, and (z) Seller has not provided TFA Services personnel to
assist with such inspection, then Seller shall be considered to have failed to
perform its material obligations under this Contract, and Buyer may elect to
terminate this Contract pursuant to Section 12.2, Termination for Seller's
Failure to Perform, hereof. In such case, unless Seller has made and is
continuing to make diligent efforts to cure such failure, then Seller shall have
waived its right to, and shall not be entitled to the benefits of, the cure
periods specified in Section 12.2.
5.4 Exclusivity of Obligations and Remedies. WITHOUT LIMITING THE WARRANTIES
SPECIFIED IN ARTICLE 8, HEREOF AND IN THE EPC CONTRACT, SELLER'S OBLIGATIONS SET
FORTH IN THIS ARTICLE WITH RESPECT TO UNSCHEDULED OUTAGES ARE EXCLUSIVE AND ARE
IN LIEU OF ALL OTHER OBLIGATIONS, WARRANTIES OR GUARANTEES, WHETHER STATUTORY,
EXPRESS, OR IMPLIED (INCLUDING ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A
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PARTICULAR PURPOSE, AND ALL WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE
OF TRADE). The remedies set forth in this, and discounts on any technical field
assistance services purchased by Buyer from Seller shall constitute Seller's
sole liability and Buyer's exclusive remedies for Unscheduled Outages whether
claims of the Buyer are based in contract, in tort (including negligence and
strict liability), or otherwise.
ARTICLE 6. CHANGES
6.1 Request For Changes. Buyer or Seller may request changes within the scope of
the Contract (a "Change") and, if accepted by the other party, the Fees set
forth in Exhibit E, performance, schedule, and other pertinent provisions of the
Contract will be adjusted by mutual agreement of the parties and documented in a
written "Change Order" prior to implementation of the change (or if the parties
are unable to agree on an equitable adjustment such equitable adjustment will be
determined pursuant to Section 16.5, Dispute Resolution, below).
6.2 Adjustment. Additional expenses incurred and time spent by Seller in
performing its Workscope Obligations due to (i) delays arising from a failure of
Buyer to meet its obligations under this Contract, whether through its own
performance or failure to perform, or through Buyer's other contractors' or
subcontractors' performance or failure to perform, and (ii) changes in Laws
after the date of the Contract, as applicable, will be treated as changes to the
scope of work and the Contract will be adjusted as set forth in the previous
paragraph. Seller shall use reasonable efforts and due diligence to mitigate the
effect of any such delays or changes in Laws on the performance of its Workscope
Obligations.
6.3 No Additional Compensation Changes. Seller may make a change(s) in its
Program Parts and Miscellaneous Hardware, Shop Repairs or Services supplied
hereunder without additional compensation from Buyer if such change(s) does not
adversely affect the warranties, the technical soundness of the work, the
schedule for the performance of the Workscope Obligations, or the operability of
the Project.
6.4 Changes in Operating Restrictions. The basis of this Contract is that each
Combustion Turbine shall be operated in accordance with the requirements of the
Power Purchase Agreement and Prudent Utility Practices, 8,000 EBH/year, with 100
Equivalent Starts per year, using natural gas fuel or liquid fuel and water in
accordance with the specifications set forth in Exhibit F, Fuel & Water
Specification, provided however Buyer shall not operate a Combustion Turbine
using liquid fuel for more than 45 days per year at base load or 60 days per
year at reduced load. Should the actual operations differ from these operating
parameters which causes a Schedule Outage to be planned/performed earlier or
later than as expected, then, pursuant to a Change Order, there shall be an
adjustment in the scope, schedule, and price to address such differences.
6.5 Scope Changes Due to Seller Error. Notwithstanding anything in this Article
6 to the contrary, no Change Order shall be issued and no adjustment of the
price, performance, schedule, and other pertinent provisions of the Contract
shall be made for Seller's correction of a warranty defect pursuant to Article
8, Warranties, below.
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ARTICLE 7. DELIVERY, TITLE, RISK OF LOSS AND TRANSPORTATION
7.1 Delivery of New Program Parts or Miscellaneous Hardware. "Delivery" of each
New Program Part, Miscellaneous Hardware supplied under this Contract shall be
made when said New Program Part, Miscellaneous Hardware, or component thereof
arrives free on board the carrier (FOB) at the Site. Subject to the provisions
of the immediately following paragraph, legal and equitable title, and risk of
loss or damage to each such New Program Part, Miscellaneous Hardware, or
component thereof shall pass from Seller to Buyer upon Delivery.
7.2 Shop Repaired Program Parts. Program Part(s) sent to Seller for Shop Repair
and Modernization or Program Part(s) and Miscellaneous Hardware being returned
pursuant to the provisions of Article 8, Warranty, or Article 9, Intellectual
Property, of the Contract will be delivered by Buyer at its expense to the
repair facility in the continental United States or Canada designated by Seller
where the work is to be performed. Title to such Program Part(s) or
Miscellaneous Hardware will remain at all times with Buyer. Risk of loss or
damage to such Program Part(s) or Miscellaneous Hardware will transfer to Seller
upon its arrival on board the carrier at the repair or manufacturing facility
and will transfer back to Buyer when said Program Part, Miscellaneous Hardware,
or component thereof arrives free on board the carrier (FOB) at the Site.
7.3 Transportation
A. Transportation and Storage
When items of New Program Parts or Miscellaneous Hardware are ready for
shipment or Shop Repair is completed on Program Parts, Seller will (i) in
the absence of shipping instructions, inform Buyer of pending shipment
and Buyer will thereafter promptly give shipping instructions to Seller,
(ii) determine the method of transportation and the routing of the
shipment and (iii) ship the New Program Parts, Miscellaneous Hardware or
Shop Repaired Program Parts freight and insurance in freight prepaid and
included in the price by Normal Carriage as defined below to the Site.
In the event that Buyer fails to provide Seller with timely shipping
instructions or is unwilling or unable to timely receive the New Program
Parts, Miscellaneous Hardware or Shop Repaired Program Parts, Seller
will, upon notice to Buyer and after giving Buyer reasonable opportunity
to designate a mutually acceptable alternate destination, place such New
Program Parts, Miscellaneous Hardware, or Shop Repaired Program Parts in
storage. If the New Program Parts, Miscellaneous Hardware or Shop
Repaired Program Parts are to be placed into storage pursuant to this
provision, delivery of the New Program Parts Miscellaneous Hardware or
Shop Repaired Program Parts shall be deemed to occur when the New Program
Parts, Miscellaneous Hardware or Shop Repaired Program Parts (i) are
placed Free On Board the common carrier for shipment to the storage
location or (ii) is placed into the storage location when stored in a
Seller manufacturing or repair facility.
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In the event of storage pursuant to the preceding paragraph, all expenses
thereby incurred by Seller, including but not limited to, preparation for
and placement into storage, handling, transportation, storage,
inspection, preservation, taxes, insurance and any necessary
rehabilitation prior to installation shall be payable by Buyer upon
submission of invoices prepared by Seller, unless Buyer disputes that
such New Program Part, Miscellaneous Hardware or Shop Repaired Program
Part does not conform to Seller's warranty obligations under Article 8
and Buyer is found to be correct in its dispute pursuant to Section 16.5,
Dispute Resolution. When conditions permit and upon payment to Seller of
any additional amounts due hereunder, Buyer shall arrange, at its
expense, removal of New Program Parts, Miscellaneous Hardware or Shop
Repaired Program Parts from storage.
B. Normal Carriage
Normal Carriage means carriage by either highway transport (provided this
does not necessitate use of specialized riggers trailers) or by rail
transport on normal routing from the manufacturing/repair facility to the
Site as designated in Section 7.1or 7.2 above respectively.
C. Special Transportation and Services
If Buyer requests Seller to transport by other than Normal Carriage and
Seller provides such transport by other than Normal Carriage for reasons
other than delays attributable to Seller actually jeopardizing delivery
of the New Program Part, Miscellaneous Hardware or Shop Repaired Program
Part in accordance with Seller's Workscope Obligations, Buyer agrees to
pay or to reimburse any transportation charges in excess of regular
charges for Normal Carriage, including, but not limited to, excess
charges for special routing, special trains, specialized riggers
trailers, lighterage, barging and air transport.
ARTICLE 8. WARRANTIES
8.1 New Program Parts and Miscellaneous Hardware Warranty and Exclusive Remedy.
Seller warrants that the New Program Parts and Miscellaneous Hardware provided
to Buyer hereunder, including any New Program Part or Miscellaneous Hardware
repaired or replaced by Seller under this New Program Parts and Miscellaneous
Hardware Warranty, will be new and of a quality in accordance with Prudent
Utility Practices and free of defects in design, workmanship and materials until
the earlier of one (1) year from the date of installation of the original New
Program Part or Miscellaneous Hardware into the Combustion Turbine, 100
Equivalent Starts after installation of the original New Program Part or
Miscellaneous Hardware, 8,000 EBHs after installation of the original New
Program Part or Miscellaneous Hardware, or three (3) years from the date of
delivery of the original New Program Part or Miscellaneous Hardware in
accordance with the terms of this Contract; except that the warranties on all
New Program Parts and Miscellaneous Hardware shall expire no later than one year
after the conclusion of the Term of the Contract (the "New Program Parts and
Miscellaneous Hardware Warranty"). If during the New Program Parts and
Miscellaneous Hardware Warranty period, Seller is within a reasonable time after
discovery by Buyer notified in writing that a New Program Part fails to conform
to the
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New Program Parts and Miscellaneous Hardware Warranty, Seller will at its
expense (including any import duties, taxes, or fees, etc. imposed by applicable
governmental authorities), as soon as commercially reasonable, correct such
failure by, at Seller's option, repair or replacement. If Seller, in attempting
to correct such failure under this New Program Parts and Miscellaneous Hardware
Warranty, determines that such New Program Part or Miscellaneous Hardware cannot
be repaired, Seller will, as soon as commercially reasonable, correct such
failure by replacement.
8.2 Shop Repair Warranty and Exclusive Remedy. Seller warrants that the Shop
Repair work performed by Seller on Program Parts, including any repair of a
defective portion of a Shop Repair by Seller under this Shop Repair Warranty,
will be free of defects in workmanship until the earlier of one (1) year from
the date of installation of the original Shop Repaired Program Part into the
Combustion Turbine, 100 Equivalent Starts after installation of the original
Shop Repaired Program Part into the Combustion Turbine, 8,000 EBHs after
installation of the original Shop Repaired Program Part into the Combustion
Turbine or three (3) years from completion of the original Shop Repair; except
that the warranties on all Shop Repaired Program Parts shall expire no later
than one year after the conclusion of the Term of the Contract (the "Shop Repair
Warranty"). If during the Shop Repair Warranty period Seller is within a
reasonable time after discovery by Buyer notified in writing that a Shop
Repaired Program Part fails to conform to the Shop Repair Warranty, Seller will
at its expense (including any import duties, taxes, or fees, etc. imposed by
applicable governmental authorities) as soon as commercially reasonable, correct
such nonconformity by repair of the defective portion of the Shop Repaired
Program Part, or if such nonconformity cannot be repaired, Buyer shall be
entitled to a Parts Life Credit pursuant to Section 3.3.
8.3 Services Warranty and Exclusive Remedy. Seller warrants for each item of
Services provided hereunder that (i) the Services of its personnel will be
competent and consistent with Prudent Utility Practices, (ii) the technical
information, reports, analyses and recommendations transmitted by Seller in
connection therewith will be competent and consistent with Prudent Utility
Practices, (iii) the Services will comply in all material respects with Laws for
a period of one (1) year from the date of completion of that item of Services
and (iv) the Services will be free from defects in workmanship for one a period
of one (1) year from the date of completion of that item of Services; except
that the warranties on Services shall expire no later than one year after the
termination or conclusion of the Term (the "Services Warranty"). If during the
Services Warranty period Seller is notified by in writing, within a reasonable
amount of time after Buyer's discovery, that any portion of the Services fails
to conform to the Services Warranty, Seller will promptly reperform such
nonconforming portion of the Services at no additional cost or expense to Buyer.
8.4 Shop Repair Turn Around Time Warranty and Exclusive Remedy Seller warrants
that any Program Part removed during a Scheduled Outage and delivered by Buyer
to the repair or manufacturing facility designated by Seller for Shop Repair,
will be repaired and delivered by Seller, in accordance with Section 7.2 above,
("turned-around") within twenty-six (26) weeks of delivery of such Program Part
by Buyer to the repair or manufacturing facility designated by Seller. If a
Program Part removed during a Scheduled Outage and delivered by Buyer to the
repair or manufacturing facility designated by Seller for Shop Repair, is not
turned-around within
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twenty-six (26) weeks or Seller, at its option, does not provide a new Program
Part in lieu of the Program Part being Shop Repaired and an outage occurs which
requires the installation of such Program Part, then for each day of such outage
that such Program Part is not turned-around, Seller shall pay Buyer liquidated
damages in the amount of $10,000 per day. Seller's aggregate liquidated damage
payments pursuant to this Section 8.4 shall not exceed a maximum annual cap of
$250,000. If Seller reaches the maximum cap on aggregate liquidated damages
under this Section 8.4, or Section 14.2, and Seller still has not turned-around
such Program Part, Seller shall be considered to have failed to perform its
material obligations under this Contract, and Buyer may elect to terminate this
Contract pursuant to Section 12.2 hereof. In such case, unless Seller has made
and is continuing to make diligent efforts to cure such failure, then Seller
shall have waived its right to, and shall not be entitled to the benefits of,
the cure periods specified in Section 12.2.
8.5 Warranty Conditions. The warranties and remedies set forth herein and the
obligations and remedies set forth in Section 3.2 and Article 5, are conditioned
upon:
(1) Buyer's receipt, handling, storage, operation and maintenance
during any storage, operation and maintenance, including tasks
incident thereto, of the Project, including any Program Parts
and Miscellaneous Hardware, being in all material respects in
accordance with the terms of the Combustion Turbine
instruction manuals and operating criteria provided to Buyer
by the EPC Contractor or the original equipment manufacturer
subject to any mutually agreed upon variance thereto, and, to
the extent not inconsistent with the foregoing, in general
accordance with Prudent Utility Practices.
(2) the Combustion Turbine being operated using natural gas fuel
or liquid fuel (use of liquid fuel shall not exceed 45 days
base load operation or 60 days reduced load operation in any
given year) and water that are consistent with the
specifications set forth in Exhibit F, Fuel & Water
Specification and shall not have been subject to alteration,
abuse or misuse;
(3) any accidental damage to the Combustion Turbine being repaired
consistent with the original equipment manufacturer's
reasonable recommendations, and
(4) the Buyer, without cost to Seller:
(a) providing working access to the non-conforming New
Program Parts, Miscellaneous Hardware, Shop Repaired
Program Parts or Services including disassembly and
reassembly of the Combustion Turbine;
(b) providing reasonable access to plant and operating
and maintenance data;
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(c) making its Site facilities and Site operators
available to assist Seller in the performance of its
warranty obligations, to the extent they are
reasonably available; and
(d) unless otherwise provided as part of a Seller's
warranty obligation, hiring Seller to provide TFA
Services, Program Parts, Shop Repairs and
Miscellaneous Hardware required to disassemble the
Combustion Turbine, to repair, and install or replace
the Program Parts or Miscellaneous Hardware in the
Combustion Turbine after it has been disassembled and
to reassemble the Combustion Turbine.
8.6 Exclusivity of Warranties and Remedies. THE WARRANTIES SET FORTH IN THIS
ARTICLE ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES WHETHER STATUTORY,
EXPRESS, OR IMPLIED (INCLUDING ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE, AND ALL WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE
OF TRADE). The remedies set forth in this Article by correction of
non-conformities in the manner and for the period of time provided shall
constitute Seller's sole liability and Buyer's exclusive remedies for failure of
Seller to meet its warranty obligations whether claims of the Buyer are based in
contract, in tort (including negligence and strict liability), or otherwise.
8.7 Relationship to EPC Contract. Seller and Buyer acknowledge and agree that
the warranties, remedies and other benefits provided by Seller to Buyer under
this Contract are independent of and complimentary to the warranties, remedies
and other benefits provided by EPC Contractor to Buyer under the EPC Contract.
ARTICLE 9. INTELLECTUAL PROPERTY
9.1 Patent, Copyright, or Trade Secret Infringement. Seller will, at its own
expense, defend or at its option settle any suit or proceeding brought against
Buyer in so far as it is based on an allegation that any Program Parts,
Miscellaneous Hardware or any of the processes used by Seller used in connection
with the Shop Repairs or Services, supplied by Seller hereunder or use thereof
for its intended purpose, constitutes an infringement of any United States
patent, copyright or trade secret, if Seller is notified promptly in writing and
given authority, information and reasonable assistance in a timely manner for
the defense of said suit or proceeding. Seller will pay the damages and costs
awarded in any such suit or proceeding. Seller will not be responsible for any
settlement of such suit or proceeding made without its prior written consent. In
case the Program Parts, Miscellaneous Hardware or processes used by Seller in
connection with the Shop Repairs or Services supplied by Seller hereunder, as a
result of any such suit or proceeding, is held to constitute infringement of any
United States patent, copyright or trade secret, or its use by Buyer is
enjoined, Seller will, at its option and its own expense, either: (a) procure
for Buyer the right to continue using said Program Part, but still satisfy
Seller's Workscope Obligations, Miscellaneous Hardware or process, at no
additional cost to Buyer; (b) replace it with substantially equivalent
noninfringing Program Part, Miscellaneous Hardware or process; or (c) modify it
so it becomes noninfringing.
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9.2 Limitation of Intellectual Property Obligations. Seller will have no duty or
obligation to Buyer under this Article to the extent that the Program Parts,
Miscellaneous Hardware or any of the processes used by Seller in connection with
the Shop Repairs or Services supplied by Seller hereunder is (a) supplied
according to Buyer's design or instructions wherein compliance therewith has
caused Seller to deviate from its normal course of performance; provided that,
prior to deviating in such a manner from its normal course of performance,
Seller has given Buyer written notice of such deviation and the resulting effect
on Seller's obligations hereunder, (b) modified by Buyer or its contractors
after delivery, or (c) combined by Buyer or its contractors with items not
furnished hereunder or under the EPC Contract and by reason of said design,
instruction, modification, or combination a suit is brought against Buyer. In
addition, if by reason of such design, instruction, modification or combination,
a suit or proceeding is brought against Seller, Buyer shall protect Seller in
the same manner and to the same extent that Seller has agreed to protect Buyer
under the provisions of Section 9.1 above.
9.3 Exclusivity of Duties and Remedies. THIS ARTICLE IS AN EXCLUSIVE STATEMENT
OF ALL THE OBLIGATIONS OF THE PARTIES, RELATING TO PATENTS, COPYRIGHTS OR TRADE
SECRETS AND DIRECT OR CONTRIBUTORY INFRINGEMENT THEREOF AND OF ALL THE REMEDIES
OF BUYER RELATING TO ANY CLAIMS, SUITS, OR PROCEEDINGS INVOLVING PATENTS,
COPYRIGHTS OR TRADE SECRETS. Compliance with this Article as provided herein
shall constitute fulfillment of all liabilities of the parties under the
Contract with respect to patents, copyrights or trade secrets.
ARTICLE 10. COMPLIANCE WITH LAWS
10.1 Generally. Subject to the provisions of Section 10.2, Seller shall at all
times comply, and shall assure that the Program Parts, Miscellaneous Hardware,
Shop Repairs and Services supplied by Seller, at the time of Delivery or
performance comply in all material respects with all Laws applicable to the
design, manufacture of the Program Parts and Miscellaneous Hardware, the Shop
Repair of Program Parts, and the performance by Seller of its other obligations
hereunder.
10.2 Changes in Law, etc. Without limiting Article 8 hereof, in the event that
any change in Laws enacted or otherwise approved after the date of this Contract
requires or makes necessary any modifications to the Workscope Obligations
including a change in Law which necessitates Buyer or Seller to vary from the
instruction manuals and operating criteria provided to Buyer by the EPC
Contractor or the original equipment manufacturer, Buyer or Seller, as the case
may be, shall reasonably promptly notify the other thereof in writing upon its
discovery of such change in Laws. If any such modification is required by any
changes in Laws, Seller shall make such modification provided such modification
is reasonably technically feasible, and if such modification increases Seller's
cost of providing the Workscope Obligations, or delays Seller's schedule or
affects any other provision of this Contract, the parties shall negotiate in
good faith and enter into a Change Order in accordance with the provisions of
Section 6.2 above (For changes in Law which necessitate Buyer or Seller to vary
from the instruction manuals and
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operating criteria provided to Buyer by the EPC Contractor or the original
equipment manufacturer, Buyer and Seller shall mutually agree in writing to such
variance and shall thereafter comply with such instruction manuals and operating
criteria with the variance applied.). Seller shall use reasonable efforts and
due diligence to mitigate the effect of any such changes in Laws on the
performance of its Workscope Obligations and the cost thereof to Buyer.
ARTICLE 11. INSURANCE
11.1 Seller's Insurance. Without limiting Seller's liability under the Contract,
Seller shall self insure or maintain in full force and effect during the term of
this Contract with insurance companies authorized to do business in the
Commonwealth of Pennsylvania and reasonably satisfactory to Buyer, the insurance
described below with coverage at levels normal in the ordinary course of its
business, but at levels no less than the minimums indicated, and shall provide
to Buyer certificates evidencing such coverages:
(a) Commercial general liability insurance, including bodily
injury, property damage, owners and contractors protective,
products/completed operations, contractual, and personal injury
liability, with a combined single limit of $1,000,000 US per occurrence
with a $2,000,000 US annual aggregate;
(b) Umbrella excess liability coverage providing excess
general liability, automobile, liability and employer's liability with
a combined single limit of $5,000,000 US;
(c) Workers' Compensation insurance with statutory limits, and
Employers Liability insurance with limits of not less than $1,000,000
per accident; and
(d) Business automobile liability insurance covering owned,
non-owned and hired automobiles for a combined single limit of
$1,000,000 per occurrence with a $2,000,000 annual aggregate.
11.2 Buyer's Insurance. Without limiting Buyer's liability under this Contract,
Buyer shall maintain in full force and effect during the term of this Contract
with insurance companies authorized to do business in the Commonwealth of
Pennsylvania and reasonably satisfactory to Seller, the insurance described
below, with coverage at levels normal in the ordinary course of its business,
but at levels no less than the minimums indicated, and shall provide to Seller
certificates evidencing such coverages:
(a) Property insurance, including boiler and machinery
coverage covering all real and personal property of Buyer on a 100%
replacement cost basis and business interruption insurance coverage to
cover "Gross Earnings," which will include net profit, all fixed
expenses and interest, for twelve (12) months;
(b) Commercial general liability insurance, including bodily
injury, property damage, owners and contractors protective,
products/completed operations, contractual,
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and personal injury liability, with a combined single limit of
$1,000,000 US per occurrence with a $2,000,000 US annual aggregate;
(c) Umbrella excess liability coverage providing excess
general liability, automobile, liability and employer's liability with
a combined single limit of $5,000,000 US;
(d) Workers' Compensation insurance with statutory limits, and
Employers Liability insurance with limits of not less than $1,000,000
per accident; and
(e) Business automobile liability insurance covering owned,
non-owned and hired automobiles for a combined single limit of
$1,000,000 per occurrence with a $2,000,000 annual aggregate.
11.3 Policies. Seller agrees to cause the insurance policy specified in Section
11.1(c) above to include a waiver of subrogation rights against Buyer. Buyer
agrees to cause the insurance policies specified in Sections 11.2(a) and 11.2(d)
to include waivers of subrogation rights against Seller.
11.4 Bearing On Other Contractual Rights and Obligations. The maintenance by
Seller and Buyer of the insurance described in this Article shall not relieve
Seller or Buyer, as applicable, of any liability or obligation to the other
under this Contract including without limitation Articles 9 and 13.
ARTICLE 12. TERMINATION
12.1 Termination for Seller's Inability to Perform. If any proceeding is
instituted against Seller seeking to adjudicate Seller as a bankrupt or
insolvent, or if Seller makes a general assignment for the benefit of its
creditors, or if a receiver is appointed on account of the insolvency of Seller,
or if Seller files a petition seeking to take advantage of any other Law
relating to bankruptcy, insolvency, reorganization, winding up or composition or
readjustment of debts and, in the case of any such proceeding instituted against
Seller (but not by Seller) if such proceeding is not dismissed within forty-five
(45) Days of such filing, Buyer may terminate this Contract by written notice to
Seller.
12.2 Termination for Seller's Failure to Perform. Buyer may terminate this
Contract by written notice to Seller, if Seller fails to perform or observe in
any material respect any provision of this Contract and (a) fails to promptly
commence to cure and diligently pursue the cure of such failure or (b) fails to
remedy any such failure within (i) forty-five (45) Days after Seller receives
written notice of such failure, provided that if Seller diligently pursues the
cure of such failure in such a manner and within such time to avoid any material
adverse effect on the Project or Buyer's rights hereunder or under the Power
Purchase Agreement, or if a material adverse effect cannot be avoided, in such a
manner and within such time so that the expected effects of such cure are in all
respects no more adverse to the Project and Buyer's rights hereunder
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and under the Power Purchase Agreement than the expected effects of terminating
this Contract and pursuing any or all other options that may be available to
Buyer, such longer period, not to exceed one hundred eighty (180) Days as may be
necessary for Seller to cure such failure. In addition, Buyer may terminate this
Contract if (i) Buyer terminates the EPC Contract due to the EPC Contractor's
default thereunder or due to Buyer's inability to obtain construction financing
or environmental operating permits for the Project or (ii) the EPC Contractor
terminates the EPC Contract for any reason other than Buyer's default
thereunder.
12.3 Buyer's and Seller's Rights and Obligations when Buyer Terminates for
Seller's Inability or Failure to Perform. If Buyer elects to terminate this
Contract pursuant to Section 12.1 or 12.2, Seller shall be entitled to retain or
receive only those amounts paid or payable hereunder at the time of termination
for any Workscope Obligations which Seller had manufactured or performed at the
time of termination. Upon such a termination, Seller shall stop work on the
terminated portion of this Contract and place no further orders or lower tier
subcontracts for such terminated portion. Seller shall protect Buyer's property
which is in Seller's possession, and shall direct suppliers and subcontractors
on orders or subcontracts outstanding to do the same. Upon Buyer's instructions,
Seller shall transfer title to and deliver any New Program Parts and
Miscellaneous Hardware paid for by Buyer as provided in this Section 12.3, which
are in the possession of Seller, its suppliers or subcontractors, at the time of
such termination, and shall deliver any of Buyer's property which is in the
possession of Seller, its suppliers or subcontractors at the time of such
termination. The cost of such delivery will be paid by Seller. No further rights
or obligations shall exist between the parties with respect to this Contract
except for any accrued claims existing at the time of such notice of termination
and those rights that expressly survive, per Section 16.22, Survival.
12.4 Termination for Buyer's Convenience. After completion of the first Major
Outage of both Combustion Turbine Generators Buyer may, at its sole option,
terminate this Contract in whole or in part, at any time for Buyer's
convenience, by written notice to Seller. In addition this Contract will
automatically terminate if (i) Buyer terminates the EPC Contract for reasons
other than (a) the default of the EPC Contractor and (b) Buyer's inability to
obtain construction financing or environmental operating permits for the Project
or (ii) the EPC Contractor terminates the EPC Contract for Buyer's default
thereunder.
12.5 Buyer's and Seller's Rights and Obligations when Buyer Terminates for its
Convenience Upon Buyer's termination pursuant to Section 12.4, Seller shall stop
work on the terminated portion of this Contract and place no further orders or
lower tier subcontracts for such terminated portion. Seller shall protect
Buyer's property which is in Seller's possession, and shall direct suppliers and
subcontractors on orders or subcontracts outstanding to do the same. Upon
Buyer's instructions, Seller shall transfer title to and deliver any New Program
Parts and Miscellaneous Hardware paid for by Buyer as provided in this Section
12.5, which are in the possession of Seller, its suppliers or subcontractors, at
the time of such termination, and shall deliver any of Buyer's property which is
in the possession of Seller, its suppliers or subcontractors at the time of such
termination. Within one (1) month after receipt of such notice of termination,
Seller will submit to Buyer in writing its claim for reimbursement of reasonable
costs incurred from the termination. Such claim, which may include termination
costs, if any, from lower tier
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subcontractors, shall follow the requirements hereinafter set forth. If the
parties cannot agree within 45 days after receipt of such notice of termination
upon the fair compensation to Seller, Buyer will pay Seller within 60 days after
receipt of such notice of termination, without duplication:
(a) The Fees due and payable for Workscope Obligations already
performed by Seller and received by Buyer at the time of which
have not previously been paid by Buyer.
(b) Reasonable state of completion expenses for Program Parts,
Miscellaneous Hardware, Shop Repairs and Services performed by
Seller at the time of such termination, including reasonable
overhead and profit.
(c) Reasonable expenses actually incurred by Seller and approved
in writing by Buyer in settling Seller's terminated orders and
subcontracts hereunder and the protection of property in which
Buyer has or may have an interest, including reasonable
overhead and profit.
(d) Reasonable expenses of demobilization, equipment storage,
transportation, and handling, including reasonable overhead
and profit.
Payments under this Section, together with all payments made under this Contract
prior to the termination, shall in no event exceed the Contract Price. If there
is a dispute as to the reasonableness of expenses listed in items (a) - (d)
above such dispute shall be resolved in accordance with Section 16.5.2. Seller
shall use reasonable efforts and due diligence to mitigate the effect of any
such termination of its Workscope Obligations and the cost thereof to Buyer. No
further rights or obligations shall exist between the parties with respect to
this Contract except for any accrued claims existing at the time of such notice
of termination and those rights that expressly survive, per Section 16.22,
Survival.
12.6 Termination by Seller. If, (i) with respect to any invoice delivered
pursuant to Section 4.3, Buyer neither makes payment thereon in accordance with
Section 4.4 nor provides a notice of dispute relating thereto in accordance with
Section 4.5, in either case within the twenty-five (25) Day period provided in
such Sections, (ii) a proceeding is instituted against Buyer seeking to
adjudicate Buyer as a bankrupt or insolvent and such proceeding is not dismissed
within forty-five (45) Days of such filing, (iii) Buyer makes a general
assignment for the benefit of its creditors, (iv) a receiver is appointed on
account of the insolvency of Buyer, or (v) Buyer files a petition seeking to
take advantage of any other Law relating to bankruptcy, insolvency,
reorganization, winding up or composition or readjustment of debts, then Seller
may at its option terminate this Contract by written notice to Buyer; provided
that, no such termination notice shall be effective if Buyer pays the amount due
within ninety (90) Days of Buyer's receipt of such notice.
12.7 Buyer's and Seller's Rights and Obligations when Seller Terminates. Upon
Seller's termination pursuant to Section 12.6, Seller shall stop work on the
terminated portion of this
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Contract and place no further orders or lower tier subcontracts for such
terminated portion. Seller shall protect Buyer's property which is in Seller's
possession, and shall direct suppliers and subcontractors on orders or
subcontracts outstanding to do the same. Upon Buyer's instructions, Seller shall
transfer title to and deliver any New Program Parts and Miscellaneous Hardware
paid for by Buyer as provided in this Section 12.7, which are in the possession
of Seller, its suppliers or subcontractors, at the time of such termination, and
shall deliver any of Buyer's property which is in the possession of Seller, its
suppliers or subcontractors at the time of such termination. Within one (1)
month after receipt of such notice of termination, Seller will submit to Buyer
in writing its claim for reimbursement of reasonable costs incurred from the
termination. Such claim, which may include termination costs, if any, from lower
tier subcontractors, shall follow the requirements hereinafter set forth. If the
parties cannot agree within 45 days after receipt of such notice of termination
upon the fair compensation to Seller, Buyer will pay Seller within 60 days after
receipt of such notice of termination, without duplication:
(a) The Fees due and payable for Workscope Obligations already
performed by Seller and received by Buyer at the time of which
have not previously been paid by Buyer.
(b) Reasonable state of completion expenses for Program Parts,
Miscellaneous Hardware, Shop Repairs and Services performed by
Seller at the time of such termination, including reasonable
overhead and profit.
(c) Reasonable expenses actually incurred by Seller and approved
in writing by Buyer in settling Seller's terminated orders and
subcontracts hereunder and the protection of property in which
Buyer has or may have an interest, including reasonable
overhead and profit.
(d) Reasonable expenses of demobilization, equipment storage,
transportation, and handling, including reasonable overhead
and profit.
Payments under this Section, together with all payments made under this Contract
prior to the termination, shall in no event exceed the Contract Price. If there
is a dispute as to the reasonableness of expenses listed in items (a) - (d)
above such dispute shall be resolved in accordance with Section 16.5.2. Seller
shall use reasonable efforts and due diligence to mitigate the effect of any
such termination of its Workscope Obligations and the cost thereof to Buyer. No
further rights or obligations shall exist between the parties with respect to
this Contract except for any accrued claims existing at the time of such notice
of termination and those rights that expressly survive, per Section 16.22,
Survival.
12.8 Exclusivity of Rights and Remedies. WITH THE EXCEPTION OF THOSE RIGHTS AND
REMEDIES THAT EXPRESSLY SURVIVE PURSUANT TO SECTION 16.22 ,THIS ARTICLE IS AN
EXCLUSIVE STATEMENT OF ALL THE RIGHTS, DUTIES AND OBLIGATIONS OF THE PARTIES
RELATING TO, AND OF ALL THE REMEDIES
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RELATING TO, TERMINATION. Compliance with this Article as provided herein shall
constitute fulfillment of all liabilities of the parties under the Contract with
respect to termination.
ARTICLE 13. INDEMNIFICATION
13.1 Seller's Indemnity. To the fullest extent permitted by Law, Seller shall
defend, indemnify and hold harmless Buyer from and against liability resulting
from injury to or death of persons and from damage to or loss of third party
property, caused by or arising in whole or in part out of, but only to the
extent of the negligent acts or omissions of Seller while performing Services at
the Site. Seller's indemnity obligation under this Section 13.1 shall not apply
to any liabilities arising out of or relating to events or circumstances
occurring more than one (1) year after end of the Term of the Contract.
13.2 Buyer's Indemnity. To the fullest extent permitted by Law, Buyer shall
defend, indemnify and hold harmless Seller from and against liability resulting
from injury to or death of persons and from damage to or loss of third party
property, caused by or arising in whole or in part out of, but only to the
extent of the negligent acts or omissions of Buyer while performing its
obligations under the Contract or while otherwise operating and maintaining the
Project. Buyer's indemnity obligation under this Section 13.2 shall not apply to
any liabilities arising out of or relating to events or circumstances occurring
more than one (1) year after end of the Term of the Contract.
ARTICLE 14. LIMITATION OF LIABILITY
14.1 No Consequential Damages. EACH PARTY AGREES THAT, EXCEPT TO THE EXTENT
LIQUIDATED DAMAGES PROVIDED HEREIN ARE SO CONSIDERED, NEITHER SELLER, NOR ITS
SUPPLIERS, NOR BUYER WILL UNDER ANY CIRCUMSTANCES BE LIABLE UNDER ANY THEORY OF
RECOVERY, WHETHER BASED IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT
LIABILITY), UNDER WARRANTY, OR OTHERWISE, FOR: ANY INDIRECT, SPECIAL, INCIDENTAL
OR CONSEQUENTIAL LOSS OR DAMAGE WHATSOEVER; DAMAGE TO OR LOSS OF PROPERTY OR
EQUIPMENT; LOSS OF PROFITS OR REVENUE; LOSS OF USE OF MATERIAL, EQUIPMENT OR
POWER SYSTEM; INCREASED COSTS OF ANY KIND, INCLUDING BUT NOT LIMITED TO CAPITAL
COST, FUEL COST AND COST OF PURCHASED OR REPLACEMENT POWER; OR CLAIMS OF
CUSTOMERS OF BUYER.
14.2 Exclusive Remedy and Cap on Liability. BUYER EXPRESSLY AGREES THAT THE
REMEDIES PROVIDED HEREIN ARE EXCLUSIVE AND THAT UNDER NO CIRCUMSTANCES SHALL THE
TOTAL AGGREGATE LIABILITY OF SELLER ARISING OUT OF ALL OBLIGATIONS HEREUNDER,
WITH THE EXCEPTION OF SELLER'S OBLIGATIONS UNDER SECTION 9.1, 13.1, 16.2.5 AND
16.23, DURING A GIVEN YEAR UNDER ANY THEORY OF RECOVERY, WHETHER BASED IN
CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), UNDER WARRANTY,
OR OTHERWISE, EXCEED ONE HUNDRED PERCENT (100%) OF THE TOTAL PRICE PAYABLE TO
SELLER FOR THAT GIVEN YEAR UNDER THIS CONTRACT. BUYER FURTHER EXPRESSLY AGREES
THAT UNDER NO CIRCUMSTANCES SHALL THE TOTAL AGGREGATE LIABILITY OF SELLER FOR
LIQUIDATED DAMAGES UNDER SECTION 8.4 DURING A GIVEN YEAR UNDER ANY THEORY OF
RECOVERY, WHETHER BASED IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT
LIABILITY), UNDER WARRANTY, OR
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OTHERWISE, EXCEED TWENTY PERCENT (20%) OF THE TOTAL PRICE PAYABLE TO SELLER FOR
THAT GIVEN YEAR UNDER THIS CONTRACT. BUYER FURTHER EXPRESSLY AGREES THAT UNDER
NO CIRCUMSTANCES SHALL THE TOTAL AGGREGATE LIABILITY OF SELLER ARISING OUT OF
ALL OBLIGATIONS HEREUNDER, WITH THE EXCEPTION OF SELLER'S OBLIGATIONS UNDER
SECTIONS 9.1, 13.1, 16.2.5 AND 16.23, UNDER ANY THEORY OF RECOVERY, WHETHER
BASED IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), UNDER
WARRANTY, OR OTHERWISE, EXCEED FIFTY PERCENT (50%) OF THE TOTAL PRICE PAYABLETO
SELLER UNDER THIS CONTRACT.
14.3 Extent of Waivers. THE WAIVERS AND DISCLAIMERS OF LIABILITY, RELEASES FROM
LIABILITY, AND LIMITATIONS ON LIABILITY EXPRESSED IN THIS ARTICLE SHALL EXTEND
TO THE PARTNERS, PRINCIPALS, SHAREHOLDERS,
DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF SELLER AND ITS AFFILIATES OR
SUCCESSORS.
14.4 Extent of Conflicts. THE PROVISIONS OF THIS ARTICLE SHALL PREVAIL OVER ANY
CONFLICTING OR INCONSISTENT PROVISIONS SET FORTH ELSEWHERE IN THIS CONTRACT.
ARTICLE 15. FORCE MAJEURE
15.1 Excuse by Force Majeure. Neither party will be liable for failure to
perform any obligation or delay in performance, excluding payment, to the extent
such failure or delay is caused by any act or event beyond the reasonable
control of the affected party or Seller's Suppliers; provided such act or event
is not the fault or the result of negligence of the affected party and such
party has been unable by exercise of reasonable diligence to overcome or
mitigate the effects of such act or event ("Force Majeure"). Force Majeure
includes, without limitation, any act of God; act of civil or military
authority; act of war whether declared or undeclared; act (including delay,
failure to act, or priority) of any governmental authority; civil disturbance;
insurrection or riot; sabotage; fire; inclement weather conditions; earthquake;
flood; strikes, work stoppages or other labor difficulties of a regional or
national character which are not limited to only the employees of Seller or its
subcontractors or suppliers and which are not due to the breach of an applicable
labor contract by the party claiming Force Majeure; embargo; fuel or energy
shortage; delay or accident in shipping or transportation to the extent
attributable to another Force Majeure; changes in Laws which substantially
prevents a party from complying with its obligations in conformity with its
requirements under this Contract or failure or delay beyond its reasonable
control in obtaining necessary manufacturing facilities, labor, or materials
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from usual sources to the extent attributable to another Force Majeure; or
failure of any principal contractor to provide equipment to the extent
attributable to another Force Majeure. Force Majeure shall not include: (1)
economic hardship, (2) changes in market conditions, or (3) except due to an
event of Force Majeure, late delivery of Program Parts or Other Equipment.
15.2 Effect of Force Majeure. In the event of a delay in performance excusable
under this Article, the date of Delivery or time for performance of the work
will be extended by a period of time reasonably necessary to overcome the effect
of such Force Majeure and if the Force Majeure lasts for a period longer than
thirty (30) days and such delay directly increases Seller's costs or expenses,
Buyer, after reviewing Seller's additional direct costs and expenses, will
reimburse Seller for its reasonable additional direct costs and expenses
incurred after thirty (30) days from the beginning of the Force Majeure
resulting from said delay. Buyer's may, as part of its review, audit Seller's
additional direct costs and expenses; provided such audit is conducted by
Seller's independent accounting firm used for Corporate Accounts and is done
without unreasonably disrupting Seller's normal business operations.
ARTICLE 16. MISCELLANEOUS
16.1 Cooperation In Financing. Subject to the obligations specified below in
Section 16.2, Seller shall furnish to Purchaser such information, consents,
certifications, opinions of counsel and other documents or assistance as may
reasonably be requested by the parties providing financing to the Project.
16.2 Proprietary Information.
16.2.1 Proprietary Interest. Seller may have a proprietary interest in
information that may be furnished pursuant to the Contract including Seller's
proposal and the Contract itself ("information which Seller may have a
proprietary interest in" includes any information which provides Seller a
competitive advantage in the marketplace in the field of design, engineering,
manufacturing, operation, maintenance, procurement and construction of power
generation, transmission and distribution facilities.). Buyer will keep in
confidence and will not disclose any such information which is specifically
designated as being proprietary to Seller in writing, or if given orally and
designated as proprietary at such time, reduced to writing within a reasonable
amount of time thereafter, without the prior written permission of Seller or use
any such information for other than the purpose for which it is supplied. The
provisions of this paragraph shall not apply to information, notwithstanding any
confidential designation thereof, which is known to Buyer without any
restriction as to disclosure or use at the time it is furnished, which is or
becomes generally available to the public without breach of any agreement, or
which is received from a third party without limitation or restriction on said
third party or Buyer at the time of disclosure, or which is developed
independently by Buyer. Notwithstanding the foregoing, Buyer may disclose
information which it receives from Seller, which Seller has a proprietary
interest in, to the (i) entities providing construction or term financing,
including an independent engineering firm acting on behalf of such entities (the
"Independent Engineer"); provided such entities are not in competition with
Seller in Seller's power generation, distribution and transmission business,
(ii) to GPU, or (iii) any of Buyer's Affiliates; provided
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such entities or GPU have entered into a confidentiality agreement with Buyer
that is reasonably acceptable to Seller.
Notwithstanding any other provision of this Section 16.2.1, (a) Buyer shall be
permitted to summarize the material terms and conditions of this Contract for
purposes of including such summary in any offering statements or similar
disclosure documents relating to the financing of the Facility ( "Offering
Statements"), which will be provided to credit rating agencies ("Rating Agency")
that may provide a rating for such debt and to prospective purchasers of such
debt ("Offerees") and (b) the Independent Engineer may utilize certain
information relating to the Project in a report ("Report") which will be
included in such Offering Statement; provided, however, that prior to the
distribution of the summary referred to in clause (a) above and the Report
referred to in clause (b) above to any Rating Agency or Offerees, Buyers shall
provide Seller a copy thereof and Seller have a reasonable period of time to
review and provide comments thereon to Buyer in the case of the summary and
Buyer and the Independent Engineer in the case of the Report. Buyer shall give
due consideration to such comments in finalizing the summary and shall cause the
Independent Engineer to give due consideration to such comments in finalizing
the Report, in both cases in light of Seller's interest in protecting its
proprietary information and in light of Buyer's and the Independent Engineer's
disclosure obligations under applicable securities laws and Buyer shall use its
best efforts to prevent inclusion of the pricing and any individual parts life
provisions of this Contract in any such summary or Report. The parties shall
attempt in good faith to resolve any disagreement concerning information to be
included in such summary and Report. No Offeree shall be given a copy of this
Contract but an Offeree may inspect a copy of this Contract at the offices of
Owner or its designee provided that such Offeree has entered into an appropriate
confidentiality agreement and such Offeree is not in competition with Seller in
Seller's power generation, distribution and transmission business.
16.2.2 Indemnity. Buyer shall indemnify and hold Seller harmless for any direct
liability suffered by Seller as a result of Buyer's disclosure to third parties
or Buyer's improper use of the proprietary information.
16.2.3 Disclosure Pursuant to Government Mandate. When required by appropriate
governmental authority, including governmental regulations, applicable law or
regulation, by order of a court of competent jurisdiction or lawful subpoena
(hereinafter collectively referred to as "Governmental Authority"), Buyer may
disclose such proprietary information to such Governmental Authority; provided,
however, that prior to making any such disclosure, Buyer will: (a) provide
Seller with timely advance written notice of the proprietary information
requested by such Governmental Authority and Buyer's intent to so disclose; (b)
minimize the amount of proprietary information to be provided consonant with the
interests of Seller and its Suppliers and the requirements of the Governmental
Authority involved; and (c) make every reasonable effort (which shall include
participation by Seller in discussions with the Governmental Authority involved
but shall not include Buyer incurring costs or expenses unless requested by the
Seller pursuant to the next sentence) to secure confidential treatment and
minimization of the proprietary information to be provided. In the event that
efforts to secure confidential treatment are unsuccessful, Seller shall have the
prior right to revise such
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information to minimize the disclosure of such information in a manner consonant
with its interests and the requirements of the Governmental Authority involved.
16.2.4 Proprietary Interest. Buyer may have a proprietary interest in
information that may be furnished pursuant to the Contract including the
Contract itself ("information which Buyer may have a proprietary interest in"
includes any information which provides Buyer a competitive advantage in the
marketplace in the field of development and ownership of power generation,
transmission and distribution facilities.). Seller will keep in confidence and
will not disclose any such information which is specifically designated as being
proprietary to Buyer without the prior written permission of Buyer or use any
such information for other than the purpose for which it is supplied. The
provisions of this paragraph shall not apply to information, notwithstanding any
confidential designation thereof, which is known to Seller without any
restriction as to disclosure or use at the time it is furnished, which is or
becomes generally available to the public without breach of any agreement, or
which is received from a third party without limitation or restriction on said
third party or Seller at the time of disclosure, or which is developed
independently by Seller. Notwithstanding the foregoing, Seller may disclose
information which it receives from Buyer, which Buyer has a proprietary interest
in, to any of Seller's Affiliates; provided such entities have entered into a
confidentiality agreement with Seller that is reasonably acceptable to Buyer.
16.2.5 Indemnity. Seller shall indemnify and hold Buyer harmless for any
liability suffered by Buyer as a result of Seller's disclosure to third parties
or improper use of the proprietary information.
16.2.6 Disclosure Pursuant to Government Mandate. When required by appropriate
governmental authority, including governmental regulations, applicable law or
regulation, by order of a court of competent jurisdiction or lawful subpoena
(hereinafter collectively referred to as "Governmental Authority"), Seller may
disclose such proprietary information to such Governmental Authority; provided,
however, that prior to making any such disclosure, Seller will: (a) provide
Buyer with timely advance written notice of the proprietary information
requested by such Governmental Authority and Seller's intent to so disclose; (b)
minimize the amount of proprietary information to be provided consonant with the
interests of Buyer and the requirements of the Governmental Authority involved;
and (c) make every reasonable effort (which shall include participation by Buyer
in discussions with the Governmental Authority involved but shall not include
Seller incurring costs or expenses unless requested by the Buyer pursuant to the
next sentence) to secure confidential treatment and minimization of the
proprietary information to be provided. In the event that efforts to secure
confidential treatment are unsuccessful, Buyer shall have the prior right to
revise such information to minimize the disclosure of such information in a
manner consonant with its interests and the requirements of the Governmental
Authority involved.
16.3 Subcontractors. Seller shall have the right to have individual items of the
Program Parts or Miscellaneous Hardware supplied to it or Services performed by
subcontractors or subvendors, provided that no such subcontractor or subvendor
is intended to be or shall be deemed a third-party beneficiary of this Contract.
Notwithstanding the foregoing, no
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arrangements between Seller and any subcontractor or subvendor shall create any
contractual relationship between any subcontractor or vendor and Buyer or
relieve Seller from any of its obligations hereunder. Seller shall be solely
responsible for the engagement and management of subcontractors and subvendors
in the performance of work, for all work performed and items provided by
subcontractors and vendors and for all acts and omissions of subcontractors and
vendors. For work performed at the Site, if Buyer requests an employee,
subcontractor or subvendor be removed for cause and demonstrates reasonable
grounds for such request, Seller shall remove such employee, subcontractor or
subvendor and shall not allow such person or entity to participate further in
the performance of Services under this Contract.
16.4 Third Parties. Except as otherwise expressly provided in this Contract,
nothing in this Contract shall be construed to create any duty to, standard of
care with respect to or any liability to any person who is not a party to this
Contract.
16.5 Dispute Resolution.
16.5.1 Formal Dispute Resolution Process In the event a dispute arises between
Seller and Buyer regarding the application or interpretation of any provision of
this Contract, the aggrieved party shall promptly notify the other party and the
Parties shall negotiate in good faith and attempt to resolve such dispute. If
the parties shall have failed to resolve the dispute within thirty (30) Days
after delivery of such notice, each party shall have the right to require, by
written notice to the other party containing a brief description of the dispute,
that each party nominate and have a senior officer of its management meet with
the other party's nominated senior officer at the Site, or at any other mutually
agreed to location, within fifteen (15) Days of such request, in order to
attempt to resolve the dispute. Should the Parties be unable to resolve the
dispute to their mutual satisfaction within fifteen (15) days after such
meeting, each party shall have the right to pursue any and all remedies
available to it at law or in equity.
16.5.2 Independent Expert Dispute Resolution Process If any dispute hereunder
involves technical issues, either party could request that such matter be
referred to a mutually acceptable independent expert for resolution in an
expedited manner pursuant to procedures and timing to be mutually agreed upon by
the Parties; provided, that if the other party does not agree to such request or
the Parties are unable to reach an agreement on such independent expert or such
governing procedures (in each case in the sole discretion of each party) in any
case within thirty (30) Days after the initial request, then either party may
require that the dispute be submitted to resolution pursuant to Section 16.5.1.
The findings of any such mutually acceptable independent expert with respect to
any technical issues so presented to it for resolution hereunder shall be
binding upon the Parties.
16.5.3 Performance During Dispute During the pendency of a dispute, neither
party shall be entitled to terminate or suspend its performance under this
Contract as a result of any such dispute or dispute resolution proceedings.
16.6 Assignment and Delegation. Except as is otherwise set forth in this
paragraph, this Contract will not be assigned by either party without the prior
written consent of the other party,
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which consent will not be unreasonably withheld. Any purported assignment
without such prior written consent shall be null and void. Seller may assign
this Contract without prior written consent, in whole or in part, to its parent,
an affiliate or a wholly owned subsidiary or successors thereof, provided such
assignee's financial and technical capabilities are either greater or
substantially similar to Seller's at such time or are otherwise such that the
assignment could not reasonably be expected to have a material adverse effect on
Buyer's rights and obligations hereunder. Buyer may assign the Contract without
prior written consent to (i) entities providing construction or term financing
for the Project as security for such entities' loans and (ii) any transferee of
the Project or a substantial portion thereof, provided that such assignee has
financial and operational capabilities that either are substantially similar to
Buyer at such time or otherwise are such that the assignment could not
reasonably be expected to have a material adverse effect on Seller's rights and
obligations.
16.7 Severability. The invalidity of one or more phrases, sentences, clauses,
Sections or Articles contained in this Contract shall not affect the validity of
the remaining portions of the Contract so long as the material purposes of this
Contract can be determined and effectuated.
16.8 Amendments. No change, amendment or modification of this Contract shall be
valid or binding upon the parties hereto unless such change, amendment or
modification shall be in writing and duly executed by both parties hereto.
16.9 Joint Effort. Preparation of this Contract has been a joint effort of the
parties and the resulting document shall not be construed more severely against
one of the parties than against the other.
16.10 Captions. The captions contained in this Contract are for convenience and
reference only and in no way define, describe, extend or limit the scope or
intent of this Contract or the intent of any provision contained herein.
16.11 Non-Waiver. Any failure of any party to enforce any of the provisions of
this Contract or to require compliance with any of its terms at any time during
the pendency of this Contract shall in no way affect the validity of this
Contract, or any part hereof, and shall not be deemed a waiver of the right of
such party thereafter to enforce any and each such provision.
16.12 Applicable Law. This Contract shall be governed by, construed and enforced
in accordance with the laws of the State of New York, exclusive of conflicts or
choice of law provisions or the United Nations Convention on Contracts for the
Sale of Goods.
16.13 Successors and Assigns. This Contract shall be binding upon and inure to
the benefit of the parties hereto, their successors and permitted assigns.
16.14 Counterparts. This Contract may be signed in any number of counterparts
and each counterpart shall represent a fully executed original as if signed by
both parties.
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16.15 Notices. Any written notice, direction, instruction, request, or other
communication required or permitted under this Contract, including payment
invoices from Seller to Buyer, shall be deemed to have been duly given on the
date of receipt, and shall be either served personally, or mailed to the party
to whom notice is to be given, by first class registered or certified mail,
return receipt requested, postage prepaid, and addressed to the addressee at the
address stated opposite its name below, or at the most recent address specified
by written notice given to the other party in the manner provided in this
Section l6.15.
BUYER: AES Ironwood, Inc.
829 Cumberland Street
Lebanon, PA 17042
Attention: Plant Manager
Tel: (717) 228-1328
Fax: (717) 228-1271
SELLER: Siemens Westinghouse Power Corporation
4400 North Alafaya Trail MC-560
Orlando, FL 32826-2399
Attention: Manager Longterm Programs
Telephone: (407) 281-2830
Fax: (407) 281-5645
16.16 Complete Contract. This Contract, including all Exhibits attached hereto,
constitutes the complete agreement between the parties as of the date of the
Contract, and supersedes any and all agreements made or dated prior thereto.
16.17 Site Access. Seller's personnel performing Services at the Site shall
comply with Buyer's Site safety and security measures at the Site.
16.18 Permits and Licenses. Buyer shall be responsible for obtaining all
necessary approvals, permits and licenses for the Project from governmental
agencies having jurisdiction including any import and export licenses.
Notwithstanding any other provision herein, the obligation of Buyer to pay for
Program Parts, Miscellaneous Hardware, Shop Repairs or Services as set forth in
this Contract shall not be affected by any delay or failure to secure or renew,
or by the cancellation of, any such necessary approvals, permits or licenses.
16.19 Special Packing. Seller will pack for standard shipment via truck or rail
transportation. When this packing will not meet Buyer's requirements covering
preparation of Program Parts or Miscellaneous Hardware for special shipments,
Buyer shall notify Seller thereof. The charge made for such special packing will
be based on its cost to Seller and will be shown as a separate item on the
invoice.
16.20 Return of Program Parts or Miscellaneous Hardware. Program Parts or
Miscellaneous Hardware must be returned with complete identification in
accordance with instructions
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furnished by Seller. In no event will Seller be responsible for Program Parts or
Miscellaneous Hardware returned without proper authorization and identification.
16.21 Transfer. Prior to the transfer to another party of any Program Parts and
Miscellaneous Hardware or the transfer of any interest in said Program Parts and
Miscellaneous Hardware or Buyer's power generation facility in which said
Program Parts and Miscellaneous Hardware are installed, Buyer shall obtain for
Seller from the transferee of limitation of and protection against liability
following the proposed transfer at least equivalent to that afforded Seller and
its suppliers under the Contract. Transfer contrary to the provisions of this
Section shall make Buyer the indemnitor of Seller and its suppliers against any
liabilities incurred by Seller and its suppliers in excess of those that would
have been incurred had no such transfer taken place
16.22 Survival. The provisions of Articles 9, 13, and 14, and Sections 16.2 and
16.21 of this Contract shall survive the expiration or other termination of the
Contract.
16.23 Environmental Compliance. Buyer recognizes that the performance of Service
at the Site may involve the generation of Hazardous Waste.
Buyer shall at its expense furnish Seller with containers for Hazardous
Wastes and shall designate a waste storage facility at the Site where such
containers are to be placed by Seller. Seller shall, or shall cause its
contractors or subcontractors to, place any Hazardous Wastes that it, its
contractors or subcontractors generate, as a result of their work at the Site,
into such containers and shall place such containers in the waste storage
facility at the Site designated by Buyer.
Buyer shall handle, store and dispose of Hazardous Waste in accordance with all
Laws.
Seller shall indemnify Buyer from any fines, penalties, expense, loss
or liability (including the costs of clean-up) incurred by Buyer as a result of
(a) Seller's failure to meet its obligations under the preceding paragraph or
(b) any spills of Hazardous Waste or oil, petroleum or petroleum products to the
environment which are attributable to and occur during Seller's performance (or
the performance of its contractors or subcontractors) of the Workscope
Obligations at the Site under this Contract. Seller shall have no responsibility
or liability, under this paragraph, with regard to any Hazardous Waste which was
pre-existing at the Site, including Hazardous Waste that is on the Site prior to
Seller's performance of the Workscope Obligations at the Site during each
successive maintenance period so long as such Hazardous Waste was not due to a
previous spill of such Hazardous Waste by Seller, its contractors or
subcontractors, or was not previously generated by Seller, its contractors or
subcontractors, and with respect to which Seller is in breach of the preceding
paragraph. For the purposes of this Section 16.23, "spill" is defined to include
any leaking, pumping, pouring, emptying, discharging, injecting, escaping,
leaching, dumping, or disposing of Hazardous Waste or oil, petroleum, or
petroleum products into the environment, but shall not include a lawful release
of air emissions or a permitted discharge to surface water or groundwater, nor
shall it include de minimus losses of oil, petroleum, or petroleum products from
vehicles, machinery or equipment brought onto the Site by Seller or its
subcontractors or subvendors in connection with the performance of Workscope
Obligations at the Site.
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Buyer shall indemnify Seller from any fines, penalties, expense, loss
or liability incurred by Seller as a result of Buyer's failure to meet its
obligations under the second paragraph of this Section. Buyer shall have no
responsibility or liability, under this paragraph, with regard to any Hazardous
Waste or oil, petroleum or petroleum products which were spilled by Seller, or
any other of its contractors or subcontractors performing Workscope Obligations
at the Site.
Seller shall at its expense furnish or cause its contractors or
subcontractors to furnish to Buyer MSDS sheets or other such informative
document required by Law to accompany any hazardous materials brought onto the
Site by Seller to perform Workscope Obligations at the Site as such term is
defined in the Laws applicable to the Site, and the rules or regulations issued
thereunder as are now in effect or hereafter amended from time to time (such
hazardous materials being herein referred to as "Hazardous Materials"). Seller
shall bring onto the Site only those amounts and types of Hazardous Materials
needed to perform its Services and shall make all reasonable efforts to minimize
such amounts and types of Hazardous Materials brought onto the Site.
16.24 Liquidated Damages Not Penalty. The parties acknowledge and agree that it
would be difficult or impossible to determine with absolute precision the amount
of damages that would or might be incurred by Buyer as a result of Seller's
failure to perform those matters hereunder for which liquidated damages are
provided. The parties agree that the amounts of liquidated damages provided
under this Contract are in lieu of actual damages and are the parties'
reasonable estimates of fair compensation for the losses that may reasonably be
anticipated from such failures in respect of such matters, and do not constitute
a penalty. Liquidated damages are limited to those outlined in Section 8.4."
16.25 Project Conformance. Seller represents to Buyer that, Seller will be able
to perform its Workscope Obligations in accordance with the design configuration
set forth in the EPC Contract without the need for any Change Order or
adjustment of the price, performance, schedule or other provisions of the
Contract with respect to such design configuration, and under such
circumstances, Seller will not be entitled to raise the design configuration of
the Project as a defense to its failure to perform hereunder.
16.26 501G Fleetwide Issue Notification. During the Term of this Agreement, if
Seller becomes aware of a fleetwide issue involving the Siemens Westinghouse
501G Combustion Turbine which may have a deleterious affect on Buyer's
Combustion Turbines, Seller shall, within a reasonable time of becoming aware of
such fleetwide issue, notify Buyer thereof, and if such fleetwide issue requires
an additional repair or replacement of a Program Part or Miscellaneous Hardware
to be performed, such additional repair or replacement shall be performed in
accordance with Section 8.1 if the issue is covered under the New Program Parts
and Miscellaneous Hardware Warranty specified therein and or in accordance with
Sections 3.3, 3.4, 5.2 and 5.3, as applicable, if the issue is not covered by
the New Program Parts and Miscellaneous Hardware Warranty specified in Section
8.1.
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NOW, THEREFORE, the parties hereto have entered into this Contract as of the
date first appearing above.
SELLER BUYER
SIEMENS WESTINGHOUSE POWER CORPORATION. AES IRONWOOD, INC.
By: /s/ John L. Gibson By: /s/ Patricia L. Rollin
----------------------------------- -----------------------------
Name: John L. Gibson Name: Patricia L. Rollin
Title: New Generation Sales Manager Its: AES Ironwood, Inc.
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EXHIBIT A
SCOPE OF WORK DESCRIPTION
1.0 SCOPE DOCUMENTS
1.1 Scope Documents. This Scope of Work Description consists of this
general description and the following addenda which are specifically made a part
hereof by reference:
Addendum 1 - Scheduled Outage TFA Services Description
Addendum 2 - Scheduled Outage Division of Responsibilities
Addendum 3 - Program Engineer Responsibilities
1.2 Conflicting Provisions. In the event of any conflict between this
document and any addendum hereto, the terms and provisions of this document, as
amended from time to time, shall control. In the event of any conflict among the
addenda, the following order of precedence shall govern: Addendum 1, 2 and 3.
Subject to the foregoing, the several instruments forming part of this Scope of
Work Description are to be taken as mutually explanatory of one and another and
in the case of ambiguities or discrepancies within or between such parts shall
be explained and adjusted by the mutual agreement of the Parties.
2.0 SELLER'S OBLIGATIONS
2.1 New Program Part(s). During the Term, Seller shall, per the
Scheduled Outage plan jointly developed and revised in accordance with Section
4.2 of this Exhibit A, Scope of Work Description, deliver the type and quantity
of New Program Parts specified in Exhibit C, Program Parts Supplied and Repaired
Schedule, for installation during the applicable Scheduled Outage prior to such
applicable Scheduled Outage; provided however, that under no circumstances shall
the Seller be obligated to deliver a New Program Part earlier than 52 weeks from
the date Seller receives written notice from Buyer, either through revision of
the Scheduled Outage plan or through a Change Order, of the need of such New
Program Part.
2.2 Shop Repair(s) of Program Parts. During the Term, Seller shall, per
the Scheduled Outage plan jointly developed and revised in accordance with
Section 4.2 of this Exhibit A, Scope of Work Description, perform Shop Repair on
the number and quantity of Program Parts specified in Exhibit C, Program Parts
Supplied and Repaired Schedule, for Shop Repair following the applicable
Scheduled Outage upon receipt from Buyer of such Program Parts at Seller's
designated repair facility; provided such Program Parts are capable of being
repaired. The degree of repair-ability and the actual parts life associated with
any Program Part shall be determined by Seller and communicated to Buyer.
2.3 Miscellaneous Hardware. During the Term, Seller shall, per the
Scheduled Outage plan jointly developed and revised in accordance with Section
4.2 of this Exhibit A, Scope of Work Description, deliver the type and quantity
of Miscellaneous Hardware specified in the plan for use during the applicable
Scheduled
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Outage prior to such applicable Scheduled Outage; provided however, that under
no circumstances shall the Seller be obligated to deliver an item of
Miscellaneous Hardware earlier than 52 weeks from the date Seller receives
written notice from Buyer, either through revision of the Scheduled Outage plan
or through a Change Order, of the need of such Miscellaneous Hardware.
2.4 Scheduled Outages. During the Term, Seller shall, per the Scheduled
Outage plan jointly developed and revised in accordance with Section 4.2 of this
Exhibit A, Scope of Work Description, provide technical field assistance (TFA
engineering) to complete tasks specified in Addendum 1 hereto for the applicable
Scheduled Outage. Furthermore, as part of such Scheduled Outage TFA Services,
Seller is responsible for those responsibilities listed Addendum 2 which have an
"X" in the Seller column. TFA Services are being provided on the assumption that
Buyer's Scheduled Outage maintenance personnel can complete the tasks specified
in Addendum 1 hereto for the applicable Scheduled Outage with technical field
assistance from the TFA engineers within 5 days for combustor type outages, 10
days for hot path type outages and 21 days for major outages. If the maintenance
personnel cannot complete the Scheduled Outages within the above specified times
any additional time over and above the specified times incurred by the TFA
engineers shall be billed on a time and material basis in accordance with
Seller's Pricing Policy 1719.
2.5 Combustion Turbine Maintenance Program Management. Seller shall
provide the services of a maintenance program engineer to manage the Combustion
Turbine maintenance program, in accordance with Addendum 3 hereto, throughout
the Term of this Contract. The engineer shall attend and participate in reviews
at the Site at least twice per interval between Scheduled Outages.
2.6 Hazardous Materials. The Seller will provide the Buyer with
Material Safety Data Sheets, (MSDS) for all hazardous materials the Seller
intends to bring/use on site, to complete its Scheduled Outage TFA Services, 30
days prior to its arrival to the site for a given Scheduled Outage. If Buyer
objects to any of the proposed hazardous materials and a reasonable commercial
alternative hazardous or non-hazardous material is available, both the Buyer and
Seller will agree on the acceptable alternative.
3.0 BUYER'S OBLIGATIONS
3.1 Storage. Buyer will store and maintain the parts, including any
Program Parts and Miscellaneous Hardware, materials, tools and bolting kits at
the Site in accordance with the original equipment manufacturer's or Seller's
written instructions, depending on who is the supplier thereof.
3.2 Project Operation. Buyer will maintain and operate the Combustion
Turbine consistently with the warranty conditions stated in Section 8.5,
Warranty, of the Contract.
3.3 Training. Buyer will ensure that its operator and maintenance
personnel are properly trained in the correct operation and maintenance of the
Project including the control
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system. Personnel fully trained pursuant to the terms of the EPC Contract or by
the EPC Contractor are deemed for the purpose of operating the Project hereunder
to be properly trained.
3.4 Scheduled Outages. Buyer will provide indoor work space for the
Scheduled Outage TFA Services personnel, including the outage manager, outage
engineer and Combustion Turbine technicians. Additionally, Buyer will provide
the resources listed in Addendum 2 which have an "X" in the Buyer column.
3.5 Transportation. Buyer will transport Program Parts in need of Shop
Repair from the Site to Seller's designated repair facility in accordance with
Section 7.2 of the Contract.
3.6 Operating Data. At the end of each month Buyer will provide to
Seller the number of Equivalent Starts and EBHs incurred by each Combustion
Turbine during that month.
4.0 JOINT OBLIGATIONS
4.1 Deviations to Scope. Either party shall inform the other of any
unexpected findings or any deviations from the Scheduled Outage plan and Seller
and Buyer shall jointly modify, pursuant to a Change Order, the scope of the
Workscope Obligations related to the affected Scheduled Outage.
4.2 Outage Schedule. Buyer and Seller shall jointly develop the
Scheduled Outage plan and shall jointly revise such plan during each interval
between Scheduled Outages, if necessary, in all cases, to ensure that such
Scheduled Outage plan is consistent with the terms of the Power Purchase
Agreement. The projected Scheduled Outage plan is contained in Exhibit C,
Program Parts Supplied and Repaired Schedule. Should this plan be revised
changing the number of Program Parts or Shop Repairs to be provided or the
Scheduled Outages to be performed such shall constitute a Change in scope and
entitle Seller to Change Order pursuant to Section 6.4, Changes in Operating
Parameters. Buyer will schedule the actual Combuster Scheduled Outages, Hot Gas
path Scheduled Outages and Major Scheduled Outages for the Combustion Turbine at
no longer than the applicable interval indicated in Exhibit D, Current Service
Bulletin 36803, except for reasonable deviations from the specified interval
with prior written consent of Seller. If such approved reasonable deviation
increases Seller's cost of providing the Workscope Obligations, or affects any
other provision of this Contract Seller will be entitled to a Change Order to
address such increase in costs and/or affects.
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Addendum 1
Scheduled Outage TFA Services Description
Seller shall provide TFA Services to support the following tasks during the
applicable Scheduled Outage:
Combustor Inspection
(W-501-G)
Inlet Section
Disassembly
o [*].
Inspection
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
Assembly
o [*].
Compressor Combustor Turbine Section
Disassembly
o [*].
o [*].
o [*].
Inspection
o [*].
o [*].
o [*].
o [*].
Assembly
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MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE TFA SERVICES
CONTRACT
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
Exhaust Section
Inspection
o [*].
o [*].
Proprietary Informatlon 5 AES Ironwood Project
September 23, 1993 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
Hot Gas Path Inspection
(W-501-G)
Inlet Section
Disassembly
o [*].
Inspection
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
Assembly
o [*].
Compressor Combustor Turbine Section
Disassembly
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
Inspection
o [*].
o [*].
o [*].
o [*].
o [*].
Proprietary Informatlon 6 AES Ironwood Project
September 23, 1993 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE TFA SERVICES
CONTRACT
Assembly
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
Exhaust Section
Inspection
o [*].
Proprietary Informatlon 7 AES Ironwood Project
September 23, 1993 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE TFA SERVICES
CONTRACT
Major C.T. Inspection
(W-501-G)
Inlet Section
Disassembly
o [*].
o [*].
o [*].
o [*].
Inspection
o [*].
o [*].
o [*].
o [*].
Assembly
o [*].
o [*].
o [*].
o [*].
Compressor Section
Disassembly
o [*].
o [*].
o [*].
o [*].
o [*].
Inspection
o [*].
Assembly
o [*].
o [*].
o [*].
o [*].
Proprietary Informatlom 8 AES Ironwood Project
September 23, 3993 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE TFA SERVICES
CONTRACT
Compressor Combustor Turbine Section
Disassembly
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
Inspection
o [*].
o [*].
o [*].
o [*].
o [*].
Assembly
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
Proprietary Informatlom 9 AES Ironwood Project
September 23, 3993 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE TFA SERVICES
CONTRACT
Torque Tube Seal Housing
Disassembly
o [*].
o [*].
o [*].
o [*].
Inspection
o [*].
o [*].
o [*].
o [*].
Assembly
o [*].
o [*].
o [*].
Exhaust Section
Disassembly
o [*].
o [*].
o [*].
Inspection
o [*].
o [*].
o [*].
Assembly
o [*].
o [*].
o [*].
Proprietary Informatlom 10 AES Ironwood Project
September 23, 3993 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE TFA SERVICES
CONTRACT
Rotor
Disassembly
o [*].
o [*].
o [*].
Inspection
o [*].
o [*].
o [*].
o [*].
Assembly
o [*].
o [*].
o [*].
Proprietary Informatlom 11 AES Ironwood Project
September 23, 3993 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE TFA SERVICES
CONTRACT
Hydrogen Cooled C.T. Generator Inspection
Disassembly
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
Inspection
o [*].
o [*].
o [*].
o [*].
o [*].
Assembly
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
o [*].
Proprietary Informatlom 12 AES Ironwood Project
September 23, 3993 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
Addendum 2
SCHEDULED OUTAGE DIVISION OF RESPONSIBILITIES
The following list specifies the key resources necessary to perform the
Scheduled Outages and assigns responsibility for their supply, either to Seller
or Buyer.
Outage Responsibility Checklist
<TABLE>
<CAPTION>
Seller Buyer
<S> <C> <C> <C>
A. PERSONNEL
1. Maintenance Program Engineer (Orlando) X
2. On-Site Technical Advisors X
3. C.T. Outage Manager X
4. Engineers X
5. Technicians X
6. Non-Destructive Testing Technicians X
7. Project Administrator X
8. Specialists and Support Personnel X
9. Plant Personnel X
10. Crane Operators X
11. Plant Manager X
B. TOOLS AND EQUIPMENT
1. Maintenance Tool Set X
2. Welding Machines X
3. Mobile Crane (as required) X
4. Special Tools (supplied with T-G) X
5. Material Storage X
6. Consumables X
7. Applicable Program Parts and X
Miscellaneous Hardware required
for the applicable Scheduled Outage
8. Expendable Material X
</TABLE>
Proprietary Information 13 AES Ironwood Project
September 23,1998 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
<TABLE>
<CAPTION>
Seller Buyer
<S> <C> <C> <C>
C. FACILITIES/SERVICES
1. Removal/Reinstallation of Blanket Insulation X
2. Sanitary Facilities X
3. Electric Power X
4. Station Air X
5. Service Water X
6. On-site First Aid (For (W) Employees) X
7. Cribbing X
11. Telephone Service X
12. Electrical Disconnection/Connection X
13. Instrumentation Disconnection/Connection X
14. Instrumentation Calibration X
15. Removal and Disposal of Hazardous Waste X
</TABLE>
Proprietary Information 14 AES Ironwood Project
September 23,1998 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
Addendum 3
MAINTENANCE PROGRAM ENGINEER RESPONSIBILITIES
Seller, through its maintenance program engineer, will provide maintenance
program management throughout the term of the Contract. In accordance with the
Contract, the maintenance program engineer will:
o Provide primary contact for communication between Seller and the
plant manager (operation and maintenance staff) for the major
maintenance of the plant.
o Work with the Program Parts inventory and manufacturing personnel
(located at factories throughout the world) to expedite parts and
materials as required to facilitate the success of each maintenance
outage.
o Maintain parts tracking database on Program Parts.
o Communicate and coordinate with plant purchasing agent regarding
warehouse stock of parts, delivery and shipment of parts.
o Provide final review of parts inventory prior to outages to verify
that all required parts are on Site.
o Possess and maintain comprehensive understanding of maintenance
requirements.
o Initiate and resolve product warranty claims to the best interest of
all parties involved.
o Initiate, status, and verify completion of electronic field action
requests ("E-FARs") regarding plant issues.
o Provide technical support, assistance, and evaluation when operating
or maintenance problems occur. Assist in areas of technical issues
and help facilitate resolution.
o Communicate to plant manager or maintenance manager technical
bulletin updates promptly as such are published.
o Deliver to Buyer's maintenance manager outage reports within six (6)
weeks after Scheduled Outages.
Proprietary Information 15 AES Ironwood Project
September 23,1998 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
Exhibit B
Program Parts List
Proprietary Information 1 AES Ironwood Project
September 23,1998 Maintenance Contract.doc
<PAGE>
Program Parts Life and Repair Intervals Current Price List
501G Dry Low NOX Natural Gas
- -------------------------------------------------------------------
PROPRIETARY PART HOURS COST
===================================================================
Baskets Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Nozzles Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Transitions Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Transition Seals Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Row 1 Blade Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Row 2 Blade Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Row 3 Blade Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Row 4 Blade Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Row 1 Vane Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Row 2 Vane Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Row 3 Vane Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Row 4 Vane Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Compressor Blades Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Compressor Diaphragms Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Ring Segments - Row 1 Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Ring Segments - Row 2 Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Ring Segments - Row 3 Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Ring Segments - Row 4 Repair [*] [*]
Replacement [*] [*]
- -------------------------------------------------------------------
Note: The repair pricing and expected repair intervals listed above were the
estimates that were used to determine the fees specified in Exhibit E, Payment
Schedule. They are listed here for reference purposes only and do not represent
the price of any additional repairs that may be required during the Term,
including but not limited to any repairs purchased for any unscheduled outages,
pursuant to Section 5.2, Unscheduled Outages.
Page 1
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
Exhibit C
Program Parts Supplied and Repaired Schedule
Proprietary Information 1 AES Ironwood Project
September 23,1998 Maintenance Contract.doc
<PAGE>
ATTACHMENT C - Program Parts Supplied and Repaired Schedule
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Period: 0 1 2 3 4 5 6 7 8
Equivlanent Base Load Hours: 0 8000 16000 24000 32000 400000 48000 56000 64000
Schedule Outages: None Combustor Combustor Hot path Combustor Combustor Major Combustor Combustor
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Baskets PP+RR RR RR P RR P+R RR P+R
- -------------------------------------------------------------------------------------------------------------------------------
Nozzles PP+RR RR RR RR RR RR RR R
- -------------------------------------------------------------------------------------------------------------------------------
Transition Seals PP+RR RR RR P RR P+R RR P+R
- -------------------------------------------------------------------------------------------------------------------------------
Transitions PP+RR RR RR P RR P+R RR P+R
- -------------------------------------------------------------------------------------------------------------------------------
Ring Segments - Row 1 PP+RR P+R
- -------------------------------------------------------------------------------------------------------------------------------
Ring Segments - Row 2 PP+RR P+R
- -------------------------------------------------------------------------------------------------------------------------------
Ring Segments - Row 3 P+RR
- -------------------------------------------------------------------------------------------------------------------------------
Ring Segments - Row 4 P+RR
- -------------------------------------------------------------------------------------------------------------------------------
Row 1 Blade PP+RR P+R
- -------------------------------------------------------------------------------------------------------------------------------
Row 1 Vane PP+RR P+R
- -------------------------------------------------------------------------------------------------------------------------------
Row 2 Blade PP+RR P+R
- -------------------------------------------------------------------------------------------------------------------------------
Row 2 Vane PP+RR RR
- -------------------------------------------------------------------------------------------------------------------------------
Row 3 Blade PP+RR RR
- -------------------------------------------------------------------------------------------------------------------------------
Row 3 Vane PP+RR RR
- -------------------------------------------------------------------------------------------------------------------------------
Row 4 Blade PP+RR RR
- -------------------------------------------------------------------------------------------------------------------------------
Row 4 Vane PP+RR RR
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
DEFINITIONS:
------------
P = Replace (1 set)
R = Repair (1 set)
Attachment C
Page 1
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
Exhibit D
Current Service Bulletin 36803
Proprietary Information 1 AES Ironwood Project
September 23,1998 Maintenance Contract.doc
<PAGE>
- Page i -
Service Bulletin PH-36803, Rev. 7
- --------------------------------------------------------------------------------
================================================================================
[LOGO]
SERVICE BULLETIN PH-36803
Section: 02 General
Combustion Turbine Maintenance and Inspection Intervals
- --------------------------------------------------------------------------------
Rev. No: 7 Rev. Date: 4/22/97 Created: 07/03/73 Page: Cover Sheet
- --------------------------------------------------------------------------------
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose, reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
================================================================================
Notice to Service Bulletin Users
This Combustion Turbine Service Bulletin has been distributed to customers of
Westinghouse, without charge, as a Proprietary Class 3 document. The purpose of
this publication is to provide combustion turbine users with information
considered useful in the maintenance and operation of Westinghouse combustion
turbines. The information in this bulletin represents a compendium of ideas and
experiences by Combustion Turbine Engineering, Energy Services Division, other
Westinghouse Divisions, Westinghouse suppliers, and customers. These
publications are provided to the user so that they will ultimately translate
into improved reliability, efficiency, and maintainability.
Westinghouse reserves the right to withdraw any publication at any time without
notice. Westinghouse does not warrant applicability to any specific combustion
turbine engine (or system) since service bulletins are written to apply to most,
not necessarily all, combustion turbines in most circumstances. In addition,
Westinghouse has no control over the implementation of a service bulletin or the
mechanical configuration of customer-owned and maintained equipment.
It is the sole responsibility of the user to carefully consider the data set
forth in the service bulletin, to determine if the information is specifically
appropriate to the user's specific engine (or system) in a particular
circumstance, and to exercise reasonable care and skill in the implementation of
the suggestions provided therein.
NO WARRANTY, EXPRESSED OR IMPLIED, IS MADE FOR THE INFORMATION AND DESCRIPTIONS
CONTAINED HEREIN WITH RESPECT TO TITLE, FITNESS FOR A PARTICULAR PURPOSE, OR
MERCHANTABILITY.
Westinghouse will not be responsible in contract, in tort (including
negligence), or otherwise for loss of use of equipment or plant, cost of
capital, infringement of patents, loss of profit or revenues, cost of
replacement power, ADDITIONAL expenses in the use of existing power facilities,
claims against the user by his customers or any special, indirect, incidental,
or consequential damage or loss whatsoever. Under no circumstance will any
information in this service bulletin become part of, modify, or negate in any
way any previous agreements, contracts, or commitments unless both the user and
Westinghouse agree in writing.
While Westinghouse does sincerely attempt to eliminate errors and inaccuracies,
on occasion Westinghouse finds it necessary to correct, clarify, and even
withdraw information as experience is gained and feedback is received from the
field. Your constructive criticism and comments can help us to provide more
useful publications in the future.
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
- Page 1 -
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose, reproduce, or use otherwise without the written consent of
WEC. Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
[LOGO]
SERVICE BULLETIN PH-36803
Section: 02 General
Combustion Turbine Maintenance and Inspection Intervals
- --------------------------------------------------------------------------------
Rev. No: 7 Rev. Date: 4/22/97 Created: 07/03/73 Page: 1/17
- --------------------------------------------------------------------------------
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose, reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
REASON FOR BULLETIN
To provide the current recommendations for combustion turbine inspection
intervals and inspection requirements
BULLETIN APPLIES TO
All Frames through 501G. Recommendations are included for specific models
or frames.
This bulletin supersedes TIB PH87-67, TIB PH88-103, and TIB PH92-126.
Also see related service bulletins PH39405 and PH37807.
TABLE OF CONTENTS Page
Scope and General Information .......................................... 2
Instructions and Special Instructions .................................. 3
Parts and Materials .................................................... 3
Procedure 1. How to Compile Operating History ............... 4
Figure 1-1. Definitions of Inspections ......... 6
Procedure 2. How to Select an Inspection Interval Table
for Your Unit .................................. 8
Tables 2-1 -- 2-4. Recommended Inspection
Intervals ................................. 9 - 12
Procedure 3. How to Calculate Equivalent Hours
(EBH or Equivalent Base Hours) for Each
Type of Fuel .................................. 13
3A. How to Calculate Total Equivalent Hours
(EBH) from Multiple Fuels ..................... 14
Procedure 4. How to Calculate Equivalent Starts (ES) ....... 15
Figure 4-1. Fuel Factors, Trip Factors, &
Load Change Factors ........................... 17
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
- Page 2 -
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose, reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
SCOPE AND GENERAL GUIDELINES
Scope:
In addition to recommending inspection intervals, this bulletin
provides these guidelines and procedures:
o How to compile required operating history
o How to select and use the correct inspection interval table
for your unit
o How to calculate equivalent operating hours (EBH or Equivalent
Base Hours) and equivalent starts (ES)
o How to convert mixed-load operation hours and mixed-fuel
operation hours
o How to convert starts, trips, and load changes
o Definitions of starts, trips, load changes, and inspection
types
General Guidelines:
Be sure to consider all of these factors:
o Inspection recommendations are based upon a combination of
factors, including: model or frame number, fuel type, number
of operating hours, number of starts, types of starts, whether
operation or starts were performed using a single fuel or
multiple fuels, number of instantaneous changes in load, and
the number of trips from load.
o Guidelines are based on the assumption that the units have
been operated and maintained according to Westinghouse
operation and maintenance recommendations, and that an
operating history for the unit has been compiled.
o Operators should perform inspections at least as frequently as
these recommended intervals, but some site-specific operating
conditions may suggest more frequent and stringent inspection
or maintenance practices.
Westinghouse, a world leader in combustion turbine manufacture and
repair, can provide quotations on specific information or services
that you may request as a result of this bulletin.
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
- Page 3 -
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given
Do not disclose, reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
INSTRUCTIONS
o All owners/operators of the Westinghouse combustion turbines models
identified on page 1 should implement, as a minimum, the inspection
schedule guidelines in this document.
o If you have questions about how these instructions affect your
particular unit, contact Westinghouse.
o To determine when your unit requires inspection, follow these
instructions:
- --------------------------------------------------------------------------------
Step 1. Compile an operating history. (See Procedure 1, pages 4 and
5.)
Step 2. Refer to the definitions of inspections. (See Figure 1-1 pages
6 and 7.)
Step 3. Select the inspection table that is appropriate for your unit.
(See Procedure 2, pages 8-12.)
Step 4. Calculate equivalent hours (EBH or Equivalent Base Hours) as
required by the inspection table. (See Procedure 3, pages 13
and 14.)
Step 5. Calculate equivalent starts (ES) as required by the inspection
table. (See Procedure 4, pages 15-17.)
Step 6. Apply the EBH and ES to the inspection table, and perform the
inspections recommended. (See Figure 1-1, pages 6 and 7.)
- --------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS
The inspections and intervals stated in this bulletin may be modified or
supplemented by special instructions. These include any additional
requirements specified by Customer Advisory Letters (CALs), Product
Improvement Bulletins (PIBs), and Service Bulletins (SBs) as recommended
in outage planning instructions and in outage plans established for a
specific unit.
PARTS AND MATERIALS
Parts Required and Source:
See applicable instruction books or renewal parts manuals provided
with unit.
Special Tools Required:
See applicable instruction books and service bulletins for tools to
be used during inspection.
Disposition of Removed Material:
See Service Bulletin PH37405 for instructions about the return of
materials.
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
- Page 4 -
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
Procedure 1. How to Compile Operating History
Use The Spreadsheet on Page 5 to Compile Unit Operating History:
1. Use the Operating History Spreadsheet on page 5 to collect operating data.
Keep an accurate running total of these parameters for each fuel:
o Operating Hours
Part Load Hours
Base Load Hours
Peak Load Hours
System Reserve Hours
o Successful Starts
Normal Starts
Intermediate Starts
Fast Starts
o Fired Aborts
o Trips From Load (since last hot path inspection)
Load at which each trip occurred
o Instantaneous Load Changes (since last hot path inspection)
Load at which each load change occurred
2. Maintain a running total of equivalent operating hours (EBS) and
equivalent starts (ES), by performing the calculations explained in
Procedures 3, 3A, and 4.
3. Monitor the running totals on the spreadsheet.
Continuously compare the running totals against inspection interval
tables.
- --------------------------------------------------------------------------------
Note
Unit operating history should be tracked based on operator's log records. The
counters installed on existing units are not configured to track operating
history data at the level of detail required by this procedure.
- --------------------------------------------------------------------------------
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
- Page 5 -
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose,reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
Procedure 1 (Cont.)
OPERATING HISTORY SPREADSHEET
================================================================================
OPERATING HOURS (TRACK SEPARATELY FOR EACH FUEL.)
- --------------------------------------------------------------------------------
NATURAL GAS/ DISTILLATE OIL CRUDE / RESIDUAL OIL
LOAD PROPANE
================================================================================
PART LOAD
- --------------------------------------------------------------------------------
BASE LOAD
- --------------------------------------------------------------------------------
PEAK LOAD.
- --------------------------------------------------------------------------------
SYSTEM RESERVE
================================================================================
================================================================================
STARTS (TRACK SEPARATELY FOR EACH FUEL)
- --------------------------------------------------------------------------------
CRUDE/RESIDUAL OIL
TYPE OF START NATURAL DISTILLATE OIL
GAS/PROPANE WITH STARTING FUEL:
------------------------------
NATURAL GAS DISTILLATE OIL
================================================================================
NORMAL START
- --------------------------------------------------------------------------------
INTERMED. START
- --------------------------------------------------------------------------------
FAST START
- --------------------------------------------------------------------------------
FIRED ABORT
================================================================================
================================================================================
TRIPS FROM LOAD (TRACK SEPARATELY FOR EACH FUEL.)
Note: Record only those that have occurred since last hot path inspection.
- --------------------------------------------------------------------------------
LOAD NATURAL DISTILLATE OIL CRUDE/RESIDUAL
AT WHICH TRIP OCCURRED** GAS/PROPANE
================================================================================
GREATER THAN BASE LOAD*
- --------------------------------------------------------------------------------
76 - 100 % (OF BASE LOAD)
- --------------------------------------------------------------------------------
51 - 75 % (OF BASE LOAD)
- --------------------------------------------------------------------------------
26 - 50 % (OF BASE LOAD)
- --------------------------------------------------------------------------------
UP TO 25% (OF BASE LOAD)
================================================================================
================================================================================
INSTANTANEOUS LOAD CHANGES (TRACK SEPARATELY FOR EACH FUEL.)
Note: Record only those that have occurred since last hot path inspection.
- --------------------------------------------------------------------------------
LOAD NATURAL DISTILLATE OIL CRUDE/RESIDUAL
AT WHICH CHANGE OCCURRED** GAS/PROPANE
================================================================================
GREATER THAN BASE LOAD*
- --------------------------------------------------------------------------------
76 - 100 % (OF BASE LOAD)
- --------------------------------------------------------------------------------
51 - 75 % (OF BASE LOAD)
- --------------------------------------------------------------------------------
26 - 50 % (OF BASE LOAD)
- --------------------------------------------------------------------------------
UP TO 25% (OF BASE LOAD)
================================================================================
* Record load and load change for each event that occurs at greater than
base load.
** Should be counted as a full load trip if the trip occurs on a combined
cycle unit that is operating on external control (IGVs modulated at
reduced load to maintain exhaust temperature at upper limit).
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
- Page 6 -
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose, reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
Figure 1-1. Definitions of Inspections
Inspection Categories
These are overall descriptions of inspections. For detailed information and
instructions, consult applicable books and procedures issued by Westinghouse.
o Running Inspections
Performed while the unit is operating.
o Combustion Section (Minor Combustor)
Involves the fuel nozzle assemblies, and the interior surface of the
combustors and transitions (through the nozzle openings).
o Combustion Section (Major Combustor)
Involves all combustor and turbine end components that are accessible
without performing a cover lift.
o Turbine Section (Hot-Path)
Involves a major combustor inspection, plus inspection of the remainder of
the turbine hot gas path, with removal of appropriate cylinder cover and
blade rings.
o Major
Comprehensive inspection; includes a turbine section (hot-path)
inspection, plus lifting of the inlet, compressor, and
compressor-combustor cylinder covers.
RUNNING INSPECTIONS
The running inspection is performed while the unit is operating. This
inspection involves monitoring various engine operating parameters to
identify changes from a new or clean / overhaul condition.
Engine monitoring includes, but is not be limited to:
o Blade path temperatures, spreads, and trends
o Exhaust temperatures
o Disc cavity temperatures
o Vibration levels and trends
o Bearing temperatures and oil pressure
o Compressor fouling
o Combustor shell pressure.
During normal operation, the operating data should be monitored and
trended. An abnormal reading or trend in the direction of a problem area
in any parameter should prompt an investigation and the correction of the
cause (even if data levels are still within acceptable ranges).
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
- Page 7 -
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
Figure 1-1 (Cont.)
COMBUSTION SECTION (MINOR COMBUSTOR INSPECTION)
The minor combustor inspection involves the removal, cleaning, and
inspection of the fuel nozzle assemblies, and the inspection of the
interior surfaces of the combustors and transitions through the nozzle
openings. On units that have man-way access, a crawl-through inspection
should also be performed. The inspection is to verify that the nozzles are
clean, and free of debris and leaks; and that the combustor baskets are
clean and free of distortions or distress. Units that have operated
primarily on crude/residual fuel are borescope-inspected to observe blade
and vane coating integrity, and to confirm satisfactory removal of
deposits by the water washing system.
COMBUSTION SECTION (MAJOR COMBUSTOR INSPECTION)
The major combustor inspection involves removal of all combustor and
turbine end components that are accessible without performing a cover
lift. These parts are thoroughly cleaned and inspected in accordance with
appropriate service bulletin information. Components that are not
removable without a cover lift are inspected in-place. Turbine Row-1 vanes
are inspected at this time.
In some units (251s, 501s, and 701s), individual Row-1 vanes can be
removed without a cover lift for cleaning and more thorough inspection. In
those units, a visual inspection of Row-1 blades can be performed. Visual
inspections also can be made in-place for last row turbine blades,
compressor inlet guide vanes (IGVs), Row-1 compressor blades, and
compressor last-row outlet guide vanes (OGVs). Units that have operated
primarily on crude/residual fuel should be borescoped to observe blade
coating integrity and to confirm the satisfactory removal of deposits by
the water washing system.
TURBINE SECTION (HOT-PATH) INSPECTION
The turbine section (hot-path) inspection includes a major combustor
inspection, plus inspection of the remainder of the turbine hot-gas path.
Access requires removal of the appropriate cylinder cover and blade rings.
All blades and associated parts are removed from the rotor, cleaned, and
inspected. Turbine disc blade root serrations are also cleaned and
inspected. In units without blade rings, turbine vane diaphragms are
removed for cleaning and inspection. Vanes and ring segments are removed
from the blade ring as required for cleaning and inspection; and
interstage vane seals and baffles are inspected before disassembly.
MAJOR INSPECTION
The major inspection is the most comprehensive inspection carried out on
the combustion turbine. It includes a turbine section (hot-path)
inspection plus the lifting of the inlet, compressor, compressor-
combustor cylinder, and torque tube housing covers. Compressor diaphragms
are removed, cleaned, and inspected. Compressor blades and discs are
cleaned and inspected in-place. Compressor and turbine bearings and
bearing seals are also inspected. The rotor may be removed or inspected in
place.
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
-Page 8 -
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose, reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
Procedure 2. How to Select an Inspection Interval Table
for Your Unit
Index to Inspection Interval Tables by Turbine Frame
Before using an inspection interval table recommended in this index, complete
the calculations required in INSTRUCTIONS, p. 3, Steps 4 and 5.
- --------------------------------------------------------------------------------
USE INSPECTION
FOR TURBINE FRAME NUMBER: INTERVAL TABLE:
- --------------------------------------------------------------------------------
o All early, low-temperature frames and Use Table 2-1
all frames not having air-cooled p. 9
blades, except those listed below.
- --------------------------------------------------------------------------------
o 251A-251AA
o 501AB-501AC Use Table 2-2
p. 10
- --------------------------------------------------------------------------------
o 251B-251B8
o 501A,501AA Use Table 2-3
o 501B-501D4 p.11
o 501D5 - mfg. in 1980s (*1)
o 701D (with camberline cooled blades)
- --------------------------------------------------------------------------------
o 251B9/10 - 251B11/12A
o 501D5 - mfg. in 1990s (*1) Use Table 2-4
o 501D5A p.12
o 501F
o 501G
o 701DA
- --------------------------------------------------------------------------------
(*1) 501D5 units manufactured in the 1980s (Shop Order Numbers below 37A3900)
may use the intervals shown on Table 2-4 (for post-1990 501D5s, Shop Order
Numbers 37A3900 and above) under these conditions:
Use Table 2-4 for turbine hot path intervals if peripheral-cooled Row-1
blades or TBC-coated, triple-cavity, Row-1 blades are retrofitted. Consult
Westinghouse for additional recommendations if unit has been uprated.
Use Table 2-4 for major inspections if compressor diaphragms for rows 3-11
have been retrofitted to current 501 D5-DA design.
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
- Page 9 -
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
Table 2-1. Recommended Inspection Intervals
Use for all early low-temperature frames, and for all frames without air-cooled
blades, except 251A, 251AA, 501A, 501AA, 501AB, 501AC.
Before using this table, calculate EBH and ES as explained in INSTRUCTIONS, p.
3, Steps 4 and 5.
If either the EBH or the ES reaches the number specified on this table, perform
the inspection indicated.
- --------------------------------------------------------------------------------
FUEL TYPE USED (single fuel) INSPECTION
- --------------------------------------------------------------------------------
NATURAL GAS / OIL (O) CRUDE / RESIDUAL (C/R)
PROPANE(G)
- --------------------------------------------------------------------------------
TOTAL
TOTAL TOTAL TOTAL TOTAL TOTAL EQUIVALENT INSPECTION
EQUIV- EQUIV- EQUIV- EQUIV- EQUIV- STARTS TYPE
ALENT ALENT ALENT ALENT ALENT (Startup fuel used RECOMMENDED
HOURS STARTS HOURS STARTS HOURS oil or gas/propane)
(EBH) (ES) (EBH) (ES) (EBH) (ES)
-------------------
OIL GAS/
PROPANE
================================================================================
[*] [*] [*] [*] [*] [*] [*] COMBUSTOR
(MINOR)
- --------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] COMBUSTOR
(MAJOR)
- --------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] TURBINE
(HOT PATH)
- --------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] MAJOR
- --------------------------------------------------------------------------------
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
-Page 10-
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose, reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
Table 2-2. Recommended Inspection Intervals
Use for 251A, 251AA, 501AB, & 501AC.
Before using this table, calculate EBH and ES as explained in INSTRUCTIONS, p.
3, Steps 4 and 5.
If either the EBH or the ES reaches the number specified on this table, perform
the inspection indicated.
- --------------------------------------------------------------------------------
FUEL TYPE USED (single fuel) INSPECTION
- --------------------------------------------------------------------------------
NATURAL GAS / OIL (O) CRUDE / RESIDUAL (C/R)
PROPANE(G)
- --------------------------------------------------------------------------------
TOTAL
TOTAL TOTAL TOTAL TOTAL TOTAL EQUIVALENT INSPECTION
EQUIV- EQUIV- EQUIV- EQUIV- EQUIV- STARTS TYPE
ALENT ALENT ALENT ALENT ALENT (Startup fuel used RECOMMENDED
HOURS STARTS HOURS STARTS HOURS oil or gas/propane)
(EBH) (ES) (EBH) (ES) (EBH) (ES)
-------------------
OIL GAS/
PROPANE
================================================================================
[*] [*] [*] [*] [*] [*] [*] COMBUSTOR
[*] [*] (MINOR)
- --------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] COMBUSTOR
(MAJOR)
- --------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] TURBINE
[*] [*] (HOT PATH)
[*] [*]
[*] [*]
[*] [*]
[*] [*]
- --------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] MAJOR(*2)
- --------------------------------------------------------------------------------
(*2) In some cases, the major inspection interval may not be an integral
multiple of the hot path interval. In such cases, either the hot
path or the major interval may be shortened to arrange evenly spaced
inspections.
(*3) This interval may be doubled for units with control systems having
blade path temperature spread monitoring and shutdown capability.
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
- Page 11 -
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
Table 2-3. Recommended Inspection Intervals
Use for 251B - 251B8, 501A, 501AA, 501B - 501D4, 501D5 (mfg. in 1980s - Shop
Order Numbers below 37A3900) (*1), & 701D with camberline cooled blades.
Before using this table, calculate EBH and ES as explained in INSTRUCTIONS, p.
3, Steps 4 and 5.
If either the EBH or the ES reaches the number specified on this table, perform
the inspection indicated.
- --------------------------------------------------------------------------------
FUEL TYPE USED (single fuel) INSPECTION
- --------------------------------------------------------------------------------
NATURAL GAS / OIL (O) CRUDE / RESIDUAL (C/R)
PROPANE(G)
- --------------------------------------------------------------------------------
TOTAL
TOTAL TOTAL TOTAL TOTAL TOTAL EQUIVALENT INSPECTION
EQUIV- EQUIV- EQUIV- EQUIV- EQUIV- STARTS TYPE
ALENT ALENT ALENT ALENT ALENT (Startup fuel used RECOMMENDED
HOURS STARTS HOURS STARTS HOURS oil or gas/propane)
(EBH) (ES) (EBH) (ES) (EBH) (ES)
-------------------
OIL GAS/
PROPANE
================================================================================
[*] [*] [*] [*] [*] [*] [*] COMBUSTOR
[*] [*] (MINOR)
- --------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] COMBUSTOR
(MAJOR)
- --------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] TURBINE
(HOT PATH)
- --------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] MAJOR (*2)
- --------------------------------------------------------------------------------
(*1) 501D5 units manufactured in the 1980s (Shop Order Numbers below
37A3900) may use the intervals shown on Table 2-4 (for post-1990
501D5s, Shop Order Numbers 37A3900 and above) under these
conditions:
Use Table 2-4 for turbine hot path intervals if
peripheral-cooled Row-1 blades or TBC-coated, triple-cavity,
Row-1 blades are retrofitted. Consult Westinghouse for
additional recommendations if unit has been uprated.
Use Table 2-4 for major inspections if compressor diaphragms
for rows 3-11 have been retrofitted to current 501 D5-DA
design.
(*2) In some cases, the major inspection interval may not be an integral
multiple of the hot path interval. In such cases, either the hot
path or the major interval may be shortened to arrange evenly spaced
inspections.
(*3) This interval may be doubled for units with control systems that
have blade path temperature spread monitoring and shutdown
capability.
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
- Page 12 -
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose, reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
Table 2-4. Recommended Inspection Intervals
Use for 251B9/10 - 251B11/12A, 501D5A, 501F, 501G, 701DA, & 501D5 (mfg. in
1990s, Shop Order Numbers 37A3900 and above) (*1).
Before using this table, calculate EBH and ES as explained in INSTRUCTIONS, p.
3, Steps 4 and 5.
If either the EBH or the ES reaches the number specified on this table, perform
the inspection indicated.
- --------------------------------------------------------------------------------
FUEL TYPE USED (single fuel) INSPECTION
- --------------------------------------------------------------------------------
NATURAL GAS / OIL (O) CRUDE / RESIDUAL (C/R)
PROPANE(G)
- --------------------------------------------------------------------------------
TOTAL
TOTAL TOTAL TOTAL TOTAL TOTAL EQUIVALENT INSPECTION
EQUIV- EQUIV- EQUIV- EQUIV- EQUIV- STARTS TYPE
ALENT ALENT ALENT ALENT ALENT (Startup fuel used RECOMMENDED
HOURS STARTS HOURS STARTS HOURS oil or gas/propane)
(EBH) (ES) (EBH) (ES) (EBH) (ES)
-------------------
OIL GAS/
PROPANE
================================================================================
[*] [*] [*] [*] [*] [*] [*] COMBUSTOR
(MINOR)
- --------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] COMBUSTOR
(MAJOR)
- --------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] TURBINE
(HOT PATH)
- --------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] MAJOR(*2)
- --------------------------------------------------------------------------------
(*1) 501D5 units manufactured in the 1980s (Shop Order Numbers below
37A3900) may use the Intervals shown on Table 2-4 (for post-1990 501
D5s, Shop Order Numbers 37A3900 and above) under these conditions:
Use Table 2-4 for turbine hot path intervals if
peripheral-cooled Row-1 blades or TBC-coated, triple-cavity,
Row-1 blades are retrofitted. Consult Westinghouse for
additional recommendations if unit has been uprated.
Use Table 2-4 for major inspections if compressor diaphragms
for rows 3-11 have been retrofitted to current 501 D5-DA
design.
(*2) In some cases, the major inspection interval may not be an integral
multiple of the hot path interval. In such cases, either the
hotpath or the major interval may be shortened to arrange evenly
spaced inspections.
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
- Page 13 -
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. This document solely for the purpose given.
Do not disclose reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
Procedure 3. How to Calculate Equivalent Hours (EBH)
for Each Type of Fuel
1. Convert mixed-load operation hours into EBHs for each type of fuel used.
Perform this calculation separately for each type of fuel used (other than
for startup). Fuel types are natural gas/propane; oil; or crude/residual
with oil or gas startup.
Equation 1
(EBH)(f) = (BH)(f)(+ 3(PH)(f)+ 10(SRH)(f)
Where:
(EBH)(f) = the equivalent base-load hours for given fuel type "f"
(BH)(f) = hours at or below base-load firing for given fuel type
"f"
(P H)(f) = hours at peak-load* firing for given fuel type "f"
(SRH)(f) = hours at system reserve-load* firing for given fuel type
"f" and "f" denotes the fuel type (natural gas/propane, oil, or
crude/residual)
* ("Peak load" and "system reserve load" apply only to units
configured for these modes of operation.)
----------------------------------------------
Note
Do not mix different fuel types in Equation 1.
----------------------------------------------
2. If the unit used only one type of fuel, you have completed calculation of
EBH. Apply this value to the EBH column labeled for your fuel type on the
inspection interval table that is recommended for your unit.
----------------------------------------------------------
Return to INSTRUCTIONS, on page 3, and continue to Step 5.
----------------------------------------------------------
3. If the unit used more than one type of fuel, go to Procedure 3A, page 14.
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
- Page 14 -
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose, reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
Procedure 3A. How to Calculate Total Equivalent Hours
from Multiple Fuels
1. You should have an EBH calculated for each type of fuel used. (If not,
return to Procedure 3 on p. 13.)
2. Combine these EBHs into a total EBH (EBH(T)) that includes multiple fuels,
using Equation 2:
Equation 2
(EBH)(T) = (EBH)(g) + 1.3(EBH)(o) + 1.8(EBH)(c/r)
Where:
(EBH)(g) = Equivalent base-load hours on natural gas/propane
(EBH)(o) = Equivalent base-load hours on distillate oil
(EBH)(c/r) = Equivalent base-load hours on crude/residual oil
3. You have completed calculation of total equivalent hours (EBH(T)) for
multiple fuels. Apply this value to the EBH column labeled "NATURAL
GAS/PROPANE" on the inspection interval table that is recommended for your
unit.
--------------------------------------------------------------
Return to the INSTRUCTIONS, on page 3, and continue to Step 5.
--------------------------------------------------------------
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
-Page 15 -
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
Procedure 4. How to Calculate the Equivalent Number
of Starts (ES)
Because the effects of cyclic thermal stress caused by some starts, trip, and
load changes are cumulative, they are combined into one parameter:
equivalent starts.
1. To calculate the Equivalent Number of Starts (ES), count only
Successful Starts, Fired Aborts, Trips from Load, and Instantaneous
Load Changes.
o Successful Start occurs when a unit reaches synchronization.
Successful starts are further classified, depending on the
total time to accelerate and reach base load:
Normal start occurs if a unit reaches base load in 20
minutes or longer.
Intermediate start occurs whenever a unit reaches base
load in less than 20 minutes, but more than 10 minutes.
Fast start occurs whenever a unit reaches base load in
10 minutes or less.
o Fired Abort - Occurs if the unit enters the ignition sequence,
but shuts down before reaching base load.
An unfired abort occurs if the unit shuts down before
ignition. Unfired aborts are to be disregarded in
calculating equivalent starts.
o Trip From Load* - Occurs after the unit reaches base load.
This is an abrupt shutdown that does not follow the normal
shutdown sequence.
o Instantaneous Load Change* - Occurs when a unit abruptly
increases or decreases load at a rate greater than the
specified ramp rate (in response to a change in grid demand, a
control system impetus, etc.).
* Include the trips from load and instantaneous load
changes that have occurred ONLY since the last hot
path inspection.
* For any trips or instantaneous load changes that
have occurred during operation above base load,
consult Westinghouse for additional guidelines and
recommendations.
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
- Page 16 -
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
Procedure 4 (Cont.)
For Definitions of Fuel, Trip, & Load Change Factors, refer to Figure 4-1, page
17.
2. Calculate the Equivalent Number of Starts (ES).
- --------------------------------------------------------------------------------
o Use Equation 3 for single-fuel operation:
Equation 3
ES(f) = Total number of (Successful Starts x Start Factor) +
Total number of fired aborts +
Total number of (Trips from Load x Trip Factor) +
Total number of (Instantaneous Load Changes x
Load Change Factor)
Apply this value to the ES column that corresponds to the fuel used,
on the inspection interval table recommended for your unit.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
o Use Equation 4 for multiple-fuel operation:
Equation 4
ES(T) = Total number of (Successful Starts x Start Factor x Fuel
Factor)+
Total number of (Fired aborts x Fuel Factor) +
Total number of (Trips from Load x Trip Factor x Fuel
Factor) +
Total number of (Instantaneous Load Changes x
Load Change Factor x Fuel Factor)
Apply this value to the ES column labeled "Natural Gas/Propane," on
the inspection interval table recommended for your unit.
- --------------------------------------------------------------------------------
3. You have completed calculation of ES.
----------------------------------------------------------
Return to INSTRUCTIONS, on page 3, and continue to Step 6.
----------------------------------------------------------
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
- Page 17-
Service Bulletin PH-36803, Rev. 7
Westinghouse Electric Corporation, Orlando, FL, USA Proprietary Class 3
Information. Use this document solely for the purpose given.
Do not disclose, reproduce, or use otherwise without the written consent of WEC.
Copyright (C) 1997 by WEC. All Rights Reserved.
- --------------------------------------------------------------------------------
Figure 4-1. Fuel Factors, Trip Factors,
and Load Change Factors
Use these factors in Equations 3 or 4, on page 16, to calculate ES.
- --------------------------------------------------------------------------------
Total Time to Accelerate and Reach Base Load Start Factor
- --------------------------------------------------------------------------------
Normal Start (20 minutes or longer) [*]
- --------------------------------------------------------------------------------
Intermediate Start (less than 20 minutes, but more than 10 minutes) [*]
- --------------------------------------------------------------------------------
Fast Start (10 minutes or less) [*]
- --------------------------------------------------------------------------------
Fuel Factors
- --------------------------------------------------------------------------------
Fuel Used Fuel Factor
- --------------------------------------------------------------------------------
Natural Gas [*]
- --------------------------------------------------------------------------------
Distillate Oil [*]
- --------------------------------------------------------------------------------
Crude / Residual (starting on Natural Gas, Distillate Oil) [*]
- --------------------------------------------------------------------------------
Trip Factors
- --------------------------------------------------------------------------------
Percentage of Base Load Trip Factor
at Time of Trip*
- --------------------------------------------------------------------------------
Greater Than Base Load Consult Westinghouse
- --------------------------------------------------------------------------------
76 - 100% [*]
- --------------------------------------------------------------------------------
51 - 75% [*]
- --------------------------------------------------------------------------------
26 - 50% [*]
- --------------------------------------------------------------------------------
Up to 25% [*]
- --------------------------------------------------------------------------------
* Should be counted as a full load trip if the trip occurs on a
combined cycle unit that is operating on external control (IGVs
modulated at reduced load to maintain exhaust temperature at upper
limit).
Load Change Factors
- --------------------------------------------------------------------------------
Percentage of Base Load Load Change Factor
at Time of Instantaneous Load Change
- --------------------------------------------------------------------------------
Greater Than Base Load Consult Westinghouse
- --------------------------------------------------------------------------------
76 - 100% [*]
- --------------------------------------------------------------------------------
51 - 75% [*]
- --------------------------------------------------------------------------------
26 - 50% [*]
- --------------------------------------------------------------------------------
Up to 25% [*]
- --------------------------------------------------------------------------------
END OF BULLETIN
Copyright (C) Westinghouse Electric Corporation 1997; All Rights Reserved.
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE
TFA SERVICES CONTRACT
Exhibit E
Payment Schedule
At the beginning of each month, following initial synchronization of
the applicable Combustion Turbine until completion of the third
Scheduled Outage of the applicable Combustion Turbine, Seller shall
invoice Buyer $406.25/EBH accumulated by the applicable Combustion
Turbine during the previous month. At the beginning of each month,
following completion of the third Scheduled Outage through the end of
the Term, Seller shall invoice Buyer $337.68/EBH accumulated by the
applicable Combustion Turbine during the previous month.
Invoices will be issued monthly and due net 25 days. All payments shall
be in U.S. Dollars, escalated at the time of invoice from January 1,
1998 according to the Escalation Factor.
If a Scheduled Outage occurs prior to 8000 EBHs being accumulated by
the applicable Combustion Turbine during the Period (i.e. since
completion of the previous Scheduled Outage or since initial
synchronization for the initial Scheduled Outage of the applicable
Combustion Turbine), for the purpose of invoicing at that time and
thereafter, the Combustion Turbine shall be deemed to have accumulated
8000 EBHs when the Scheduled Outage begins and Seller shall invoice
accordingly.
Proprietary Information 1 AES Ironwood Project
September 23,1998 Maintenance Contract.doc
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED
OUTAGE TFA SERVICES CONTRACT
Exhibit F
Fuel and Water Specification
Attached are the applicable fuel and water specifications. For the purpose of
this Contract, the Parties agree that the "liquid fuel" described in this
Contract is No. 2 Fuel Oil (as defined below) and/or Jet A (as defined below).
Definitions:
"No. 2 Fuel Oil" means liquid fuel that meets the specifications set forth in
Sections 2.0 and 3.0 of the attached liquid fuel specification hereto for use in
conventional combustors.
"Jet A" means liquid fuel that meets the specifications set forth in Sections
2.0 and 3.0 of the attached liquid fuel specification hereto for use in DLN
combustors.
Proprietary Information 1 AES Ironwood Project
September 23, 1998 Maintenance Conract.doc
<PAGE>
Water Specification - STREAM DATA
Stream Qualities
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Constituent, mg/l, except as noted POTW Quarry Makeup Mix Demineralized
Water
====================================================================================================================================
<S> <C> <C> <C>
pH, standard units [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Specific Conductance, 25(degrees)C,(micro)uS/cm [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
P-alkalinity, as CaCO(3) [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
M-alkalinity [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Sulfur, Total as SO(4) [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Chloride as Cl [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Phosphate, total as PO(4) [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Nitrate, as NO(3) [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Silica, Total as SiO(2) [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Calcium, Total as CaCO(3) [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Magnesium, Total as CaCO(3) [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Sodium as Na [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Aluminum, Total as Al [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Barium as Ba [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Boron as B [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Iron, Total as Fe [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Manganese, Total as Mn [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Potassium as K [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Strontium as Sr [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Vanadium as V [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Zinc as Zn [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Sodium as Na, ppb [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Silica as SiO(2), ppb [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Chlorides as Cl, ppb [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Sulfates as SO(4), ppb [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Phosphate as PO(4), ppb [*]
- ------------------------------------------------------------------------------------------------------------------------------------
Specific Conductivity, (micro)S/cm at 25 (degrees)C Less than [*]
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
WESTINGHOUSE
LIQUID FUEL
SPECIFICATION
Written by: /s/ Bruce Rising 7/24/98
------------------------------------ -----------
B. W. Rising Date
Environmental Engineering
Approved by: /s/ P. W. Pillsbury 7/28/98
------------------------------------ -----------
P. W. Pillsbury Date
Combustion Technology
Approved by /s/ Paul Minard 7/25/98
------------------------------------ -----------
P.G. Minard Date
Operating Plant Technical Support
Approved by /s/ D. J. Fraser 7/28/98
------------------------------------ -----------
D. Fraser Date
Combustion Turbine Marketing
Approved by /s/ Thomas Urbas 7/24/98
------------------------------------ -----------
Tom Urbas Date
Thermal Cycle and BOP System Design
Approved by /s/ Steven J. Vance 7/28/98
------------------------------------ -----------
Steven J. Vance Date
CT Materials Development
Reference: 21 T0305
WBS: 362
Review Level: 5
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
- --------------------------------------------------------------------------------
DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE POWER GENERATION Issue Date: 7/28/98
POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 1 of 21
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
REVISION SHEET
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
REISSUE
REVISION DATE SECTION DESCRIPTION OF CHANGE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
001 All Original Issue
- -------------------------------------------------------------------------------------------------------------------------
002 6/08/93 3.0 Correct Equation
- -------------------------------------------------------------------------------------------------------------------------
3.0 Rationalize W251/W501 alkali metal and lead
- -------------------------------------------------------------------------------------------------------------------------
specs; delete mention of CW 251, CW352.
- -------------------------------------------------------------------------------------------------------------------------
4.0 Delete mention of CW 251, CW 352.
- -------------------------------------------------------------------------------------------------------------------------
5.0 Rationalize W251/W501 alkali and lead specs.
- -------------------------------------------------------------------------------------------------------------------------
5.1 Extend combined cyc. max. S to simple cyc.
- -------------------------------------------------------------------------------------------------------------------------
8.0 In water injection spec., allow increase in pH
- -------------------------------------------------------------------------------------------------------------------------
range from 7.0 to 8.0, to 5.5 to 8.0, in specified
- -------------------------------------------------------------------------------------------------------------------------
situations.
- -------------------------------------------------------------------------------------------------------------------------
003 10/01/97 All Changes to Tables 3-1, 3-2 and 8-1. Added new
ASTM requirements. Distinguish requirements for
DLN and Conventional Combustors. Revised fuel
restrictions for DLN. Modification to Section 1.0
paragraph for DLN, and Section 2.0 for fuel
description. Address changed on Table 2-1. Page
11: added 2.4 cSt reference for DLN.. Page 11
4.5, text changes. Page 12, 4.7, text added that
crudes and blends are not applicable to DLN. Page
13, 4.9 added note for No.2 fuel.. 4.10, note on
no thermal stability requirement for conventional
combustion systems.
- -------------------------------------------------------------------------------------------------------------------------
004 7/28/98 1.0 Rewrite first paragraph
- -------------------------------------------------------------------------------------------------------------------------
Table 8-1 Revised ASTM method for Gross Heat of
Combustion, Sodium, Potassium, Vanadium,
Calcium, Other metals
- -------------------------------------------------------------------------------------------------------------------------
3.0 Changed title to "Fuel Requirements"
- -------------------------------------------------------------------------------------------------------------------------
5.8 Updated paragraph on red dye
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
- --------------------------------------------------------------------------------
DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE POWER GENERATION Issue Date: 7/28/98
POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 2 of 21
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FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
REVISION SHEET ............................................................. 2
1.0 INTRODUCTION ...................................................... 5
2.0 FUEL TYPES ........................................................ 5
3.0 FUEL REQUIREMENTS ................................................. 7
4.0 FUEL PHYSICAL PROPERTIES ............................................... 10
4.1 Flash Point ................................................. 10
4.2 Vapor Pressure .............................................. 10
4.3 Pour Point .................................................. 10
4.4 Viscosity ................................................... 10
4.5 Ramsbottom Carbon Residue ................................... 11
4.6 Bottom Sediment and Water (BS&W) ............................ 12
4.7 Ash ......................................................... 12
4.8 Wax ......................................................... 12
4.9 Distillation Temperature .................................... 13
4.10 Thermal Stability ........................................... 13
4.11 Density ..................................................... 13
5.0 CONTAMINANTS ...................................................... 14
5.1 Sulfur ...................................................... 14
5.2 Fuel Bound Nitrogen ......................................... 15
5.3 Sodium Plus Potassium ....................................... 15
5.4 Vanadium .................................................... 15
5.5 Calcium ..................................................... 16
5.6 Lead ........................................................ 16
5.7 Other Contaminants .......................................... 16
5.8 Red Dye ..................................................... 16
6.0 FUEL TREATMENT .................................................... 17
6.1 Treatments Employed to Alter Physical Properties ............ 17
6.2 Treatments Employed to Reduce the Corrosive Effects of ...... 17
Trace Metal Contaminants .................................... 17
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
- --------------------------------------------------------------------------------
DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
- --------------------------------------------------------------------------------
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<PAGE>
7.0 ENVIRONMENTAL CONSIDERATIONS ...................................... 18
7.1 Opacity ..................................................... 18
7.2 Sulfur ...................................................... 19
7.3 Particulates ................................................ 19
7.4 Nitrogen Oxides ............................................. 19
8.0 FUEL, AIR, STEAM AND WATER EVALUATION ............................. 19
3.1 Fuel Sampling Method ........................................ 19
8.2 Fuel Analysis Requirements .................................. 20
8.3 Inlet Air Analysis Requirements ............................. 20
8.4 Steam and Water Injection Quality ........................... 20
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
- --------------------------------------------------------------------------------
DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
- --------------------------------------------------------------------------------
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<PAGE>
1.0 INTRODUCTION
This document defines the fuel requirements for Westinghouse combustion
turbines. Requirements are established for all combustion systems
including both conventional combustion systems and Dry Low NO(x) (DLN)
systems.
Light fuels, such as naphtha, require modifications to the fuel handling
system to address high volatility and poor lubrication properties. The
requirements of heating, water washing, and the use of additives must be
recognized when using fuels heavier than No. 2 distillate. Fuel
contaminants, such as vanadium, sodium, potassium and lead must be
controlled in order to achieve acceptable turbine parts life. It should be
noted that these same contaminants can be introduced via the inlet air or
by water/steam injection and that the combined effect from all sources
must be considered.
The ultimate decision of which type fuel to use will depend on several
factors. These include the delivered price, the cost of treatment of its
physical properties/contaminant levels which do not meet standard
requirements, the cost of altering the fuel handling system (if required),
and the maintenance costs associated with the grade of fuel.
It is the intent of this specification to define the critical combustion
properties and impurities which must be controlled to prevent adverse
effects on turbine performance and operability.
2.0 FUEL TYPES
Table 2-1 summarizes the general types of liquid fuels that may be
considered for use in combustion turbines. The closest ASTM specifications
that fit the four broad classes, along with the common names of some of
the representative fuels, are also given. In addition to the fuels shown
in the table, conventional combustors may also be used with naphtha,
natural gas condensibles, methanol, etc. In all cases, certain physical
properties and levels of contaminants must be met in order to achieve
maximum efficiency and minimum maintenance. Some of the heavier fuels may
require heating, fuel treatment and/or special handling, while even with
clean fuels, proper care must be exercised to avoid transportation and
storage contamination.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
- --------------------------------------------------------------------------------
DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
- --------------------------------------------------------------------------------
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POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 5 of 21
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<PAGE>
TABLE 2-1 GENERAL CLASSIFICATION OF LIQUID FUELS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Fuel Types and Classifications
General Properties Light Distillate Heavy Distillate Crude and Residual
Blended
Residual
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ash Low Low Low to medium High
Viscosity Low Medium Wide High
Volatility High-medium Medium Wide Low
<CAPTION>
Closest ASTM Types(1)
<S> <C> <C> <C> <C>
Gas Turbine Fuel 0-GT, 1-GT, 3-GT 3-GT 4-GT
(D 2880) 2-GT
Burner Fuel (D 396) 1,2 4 4, 5 6
Diesel Fuel (D 975) l-D, 2-D 4-D 4-D
Kerosene (D3699) 1-K, 2-K
Aviation Turbine Fuel Jet A, A-1, B
(D 1655)
Common Fuel Names Naphtha, JP-4, Gas Oil Marine Diesel Bunker C
JP-5 Fuel
Marine Gas Oil Navy Standard
Distillate
</TABLE>
(1) Annual Book of ASTM Standards, current revision. American Society for
Testing and Materials, 100 Barr Harbor Drive, West Conshohocken, PA 19428,
U.S.A.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
- --------------------------------------------------------------------------------
DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
- --------------------------------------------------------------------------------
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<PAGE>
The major consideration with respect to turbine operation is the amount of
impurities, such as V, Na, K, Pb, entering the hot gas path. In addition
to the fuel, these contaminants can be introduced into the turbine from
other sources such as the inlet air, water used in evaporative coolers,
and steam/water injection used for NO(x) control or power augmentation. A
method is presented in the next section to assess the contribution from
these alternate sources.
3.0 FUEL REQUIREMENTS
To be acceptable for use in Westinghouse combustion turbines, the fuel
must meet the physical properties limits of Table 3-1, and the allowable
total contaminant limits of the fuel and all other sources, such as inlet
air, steam, or water injection shall meet the limits of Table 3-2. To sum
contaminants from all sources the following formula shall be used:
{If + [I(air) x (l-K(a))x(A/F)] + [I(stm) x (S/F)] + [I(w) x (W/F)] +
[I(add) x (AD/F)]} = TCL where:
TCL = equivalent total contaminant level, ppmw
I(f) = contaminant level in fuel entering turbine, ppmw
I(air) = contaminant levels in air entering filters, ppmw
I(stm) = contaminant level in injection steam entering turbine, ppmw
I(w) = contaminant level in injection water entering turbine, ppmw
I(add) = contaminant level in additives entering turbine, ppmw
(A/F) = air to fuel weight ratio
(S/F) = steam to fuel weight ratio
(W/F) = water to fuel weight ratio
AD/F = additive to fuel weight ratio
K(a) = efficiency of air filters (0 = no filtering: 1.00 = all
filtered)
The total contaminant level for each species must be less than the limit
given in Table 3-2.
Sections 4.0 and 5.0 of this specification provide detailed technical
background on the limits in Tables 3-1 and 3-2.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
- --------------------------------------------------------------------------------
DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
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POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 7 of 21
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<PAGE>
TABLE 3-1 PHYSICAL PROPERTY REQUIREMENTS FOR LIQUID FUELS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Property Units ASTM Minimum Maximum Maximum Comments
Combustor Test DLN Conventional
Group Method
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Flash Point (degrees)C ((degrees)F) D93 38(100) NR Same as DLN See text
(D56)****
Vapor Pressure kPa (psi) D323 NR 14(2.0) Same as DLN See text
T(fuel)-Pour Point (degrees)C ((degrees)F) D97 NR 17 (30) Same as DLN Below minimum
Temperature
expected fuel
temperature
--------------------------------------------------------------------------------------------------------------
Viscosity cSt* D445 1.8 2.4 (ignition) 5.8 (ignition)(1) 501 Frames
(SI Units) 2.4 (ignition) 10.0 (ignition) Other Frames
2.4 (steady state) 20.5 (steady state) All Frames
--------------------------------------------------------------------------------------------------------------
Ramsbottom wt % D524 NR 0.15 0.35(0.l5**) For distillates:
Carbon See text for other
Residue fuels
--------------------------------------------------------------------------------------------------------------
Bottom Sediment vol % D1796 NR 0.05 Same as DLN Distillate fuels
and Water
vol % NA NA 1.0 Crude and
Residual Fuels
--------------------------------------------------------------------------------------------------------------
Ash wt % D482 NR 0.01 0.01 max Distillate
0.03 max Residual
Wax wt % NR NR See text
--------------------------------------------------------------------------------------------------------------
Distillation (degrees)C((degrees)F) D 86 288 338 max See text
Temperature 90% (550) (640)
End Point 300 366 max
(572) (690)
--------------------------------------------------------------------------------------------------------------
Thermal Stability(2) D3241 NR No. 1 NR See text
Existent Gum mg/100 D381 7 NR
ml
Bromine Index D2710 NR 400 NR
Smoke Point mm D1322 25*** NR NR
API Gravity D1298 37*** NR NR
Density kg/m(3) @ D1298 775*** 840 NR See text
15(degrees)C
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NR = No Restriction
NA = Not Applicable
* See Section 4.4 for other common units of viscosity
** Opacity constraint; See Section 7.1
*** Minimum for DLN
**** Test method for fuels lighter than No. 2
- ----------
(1) Fuel heating may be used to comply with viscosity requirements for
conventional combustion systems.
(2) This test is to be run at 245(degrees)C. See paragraph 5.9 regarding
dyed fuels.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
- --------------------------------------------------------------------------------
DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
- --------------------------------------------------------------------------------
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<PAGE>
TABLE 3-2 MAXIMUM ALLOWABLE TOTAL CONTAMINANT LEVEL FROM
FUEL, AIR, STEAM, AND WATER
- --------------------------------------------------------------------------------
Maximum Permitted by Engine Frame
Contaminant Units CW191 W251 W501 Comments
- --------------------------------------------------------------------------------
FBN wt% [*] [*] [*]
S wt% [*] [*] [*] See text
V ppmw [*] [*] [*] Without
treatment
Na + K ppmw [*] [*] [*] Standard
Production
Na + K ppmw [*] [*] [*] Coated Blades
& Vanes, 3
Rows
Ca ppmw [*] [*] [*]
Pb ppmw [*] [*] [*]
[*] [*] [*]
Ba ppmw [*] [*] [*]
Mn ppmw [*] [*] [*]
P ppmw [*] [*] [*]
[*] [*] [*]
Cl ppmw [*] [*] [*]
- --------------------------------------------------------------------------------
Definitions
- --------------------------------------------------------------------------------
FBN Fuel Bound Nitrogen The above values are recommended maximums. In
some cases, higher concentrations may be
encountered. Their acceptability must be
reviewed by Westinghouse.
S Sulfur V Vanadium
Na Sodium K Potassium
Ca Calcium Pb Lead
Ba Barium Mn Manganese
P Phosphorous Cl Chlorides
- --------------------------------------------------------------------------------
* Maximum allowable levels when an oxidation catalyst, SCR, or any highly active
metal surfaces are present in the combustor or turbine exhaust.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
- --------------------------------------------------------------------------------
DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
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<PAGE>
4.0 FUEL PHYSICAL PROPERTIES
4.1 Flash Point
The flash point is the fuel temperature at which there is sufficient
flammable vapor to flash (burn) when brought into contact with an external
flame. Minimum permissible flash points are regulated by national, state
and local regulations. When the flash point is below the permissible
value, explosion-proofing of electrical equipment to the appropriate codes
is required.
In general, fuels with flash points below 37.8(degrees)C (100(degrees)F)
require such special safety precautions as outlined in the National
Electrical Code Hazardous Locations Classification Class 1, Division 2,
Group D.
4.2 Vapor Pressure
Vapor pressure is the pressure, at a constant temperature, below which a
liquid would begin to vaporize. The standard fuel system will accept fuels
having a maximum vapor pressure of 14 kPa (2.0 psi). (Test ASTM D323;
37.8(degrees)C [100(degrees)F]) Above this limit, a secondary fuel system
would be required, such as natural gas or No. 2 distillate, for the
start-up and shut-down sequences. This limitation is imposed to prevent
vapor lock in the fuel lines as well as at the nozzles during the ignition
cycle. In addition, the use of a high vapor pressure fuel may require
changes to the standard fuel pump and piping.
4.3 Pour Point
The pour point is an indication of the lowest temperature at which a
liquid fuel can be stored and still be capable of flowing under
gravitational forces. Fuel flow at the pour point is greatly restricted,
primarily because of the growth of wax crystals that can clog filters and
piping. This condition is usually avoided if the pour point of the fuel is
17(degrees)C (30(degrees)F) lower than the minimum expected fuel
temperature. Some waxy crudes, however, may require an even larger
temperature differential.
In general, the bulk fuel temperature in large storage tanks will
correspond to the avenge seasonal ambient temperature. In cold climates,
fuel forwarding piping might require insulating and heat tracing to meet
the pour point criteria.
4.4 Viscosity
The viscosity of a liquid is a measure of its resistance to flow. In fuel
it is highly significant, since it indicates the relative ease with which
it may be pumped, the
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
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DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
- --------------------------------------------------------------------------------
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<PAGE>
degree of atomization at the fuel nozzles, and its lubricity
characteristics for pumps and flow dividers.
The standard fuel system requires a minimum kinematic viscosity of 1.8 cSt
for satisfactory operation of the pumps and flow divider. Fuels with
viscosity as low as 0.43 cSt may be considered, but will require special
pumps and the addition of lubricity agents.
The kinematic viscosity of the fuel must not exceed 5.8 cSt (501 frames)
or 10 cSt (CW191, and W251 frames), for satisfactory ignition, and 20.5
cSt (all frames) for satisfactory operation following ignition. (All DLN
engines are limited to a maximum liquid fuel viscosity of 2.4 cSt for all
conditions. Please see Table 3-1.) Fuels not meeting these viscosity
limits will require heating. An upper fuel temperature limit of
127(degrees)C (260(degrees)F) should not be exceeded, otherwise excessive
thermal degradation of the fuel may occur.
Heating will also increase the fuel vapor pressure which could affect
ignition characteristics and increase the fire hazard (flash point).
Note: 1.8 cSt = 32 SSU = 30 seconds Redwood 1
2.4 cSt = 34 SSU = 31 seconds Redwood 1
5.8 cSt = 45 SSU = 41 seconds Redwood 1
10.0 cSt = 59 SSU = 51 seconds Redwood 1
20.5 cSt = 100 SSU = 86 seconds Redwood 1
4.5 Ramsbottom Carbon Residue
The carbon residue is a measure of the carbonaceous materials left in a
fuel after all the volatile components are vaporized in the absence of
air. It is a rough approximation of the tendency of a fuel to form carbon
deposits in the fuel nozzle or in the combustor. In order to obtain
measurable values of carbon residue in the lighter fuels, it is necessary
to remove 90 percent of the oil by a prescribed method of distillation,
and then determine the carbon residue concentrated in the remaining 10
percent bottoms.
Distillate fuels must have a carbon residue of less than 0.35% by weight
(0.15 weight % for DLN) measured on a 10% residuum. Crudes and heavier
fuels may reach 12% by weight on a 100% sample. The acceptability of any
value above those in Table 3.1 should be reviewed by Westinghouse, in
conjunction with the complete fuel specification. See Opacity (Section
7.1) for other considerations.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
- --------------------------------------------------------------------------------
DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
- --------------------------------------------------------------------------------
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<PAGE>
4.6 Bottom Sediment and Water (BS&W)
Appreciable amounts of sediment (gums, resins, scale, sand or soil) and
water in a fuel tend to cause fouling of the fuel-handling facilities. An
accumulation of sediment in storage tanks and on filter screens obstructs
the flow of oil from the tank to the combustion turbine, and requires
increased maintenance. Water in distillate fuels may cause corrosion of
tanks and equipment. BS&W is limited to 0.05% for No. 1 and No. 2 fuels
(ASTM D396). Water in the heavier residual fuels (No. 3 to No. 6) may
cause emulsions and, therefore, BS&W is limited to 1.0%.
To avoid system contamination problems from BS&W, all fuel storage tanks,
whether distillate or residual, should be equipped with floating suctions.
Site oil tank management procedures, as well as detail drawings of tank
suctions and drains must be submitted to Westinghouse for approval before
operation of the engine on oil. The suctions should have low level bottom
limits which ensure that the suction is always some distance from the
bottom, to avoid the water and sediment that collect there. In addition,
any sludge and water must be periodically drained from the bottom of the
tanks to reduce the risk of contamination.
4.7 Ash
Ash, the non-combustible material in an oil, may be present in fuel in
two forms - solid particles or water/oil soluble metallic compounds.
The solid particles are, for the most part, the same material that is
designated as bottom sediment in the previous section. Depending on their
size, these particles can contribute to wear in the fuel system, and to
plugging of the fuel filter and the fuel nozzle. Most soluble metallic
compounds do not normally create filter clogging problems. However, in the
presence of water, certain compounds can react to form a sludge which can
cause considerable blockage problems.
Distillate fuels in DLN applications must have less than 0.01% by weight
of ash, but crudes, residuals and blends may have considerably more.
However, crudes, residuals, and other fuel blends are only appropriate
with conventional (non-DLN) combustors. Should the ash content of a
proposed fuel exceed 0.03% by weight, its acceptability should be reviewed
by Westinghouse.
4.8 Wax
Many paraffinic base crude oils and heavy distillates contain wax at room
temperature. Most fuel analyses indicate the wax content in percent by
weight. Filter plugging can result unless the fuel is heated sufficiently
high to melt the wax. For most crude oils, a temperature level of
54(degrees)C-60(degrees)C (130(degrees)F-140(degrees)F) should maintain
the wax in solution.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
- --------------------------------------------------------------------------------
DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
- --------------------------------------------------------------------------------
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<PAGE>
While no standard ASTM laboratory procedure exists for determining the
melting point of wax, several current procedures are acceptable. Normally,
the wax is separated from the fuel by conventional physical methods and
independently heated to obtain the melting point.
4.9 Distillation Temperature
In general, 90% of a No. 2 distillate fuel will be recovered at the
distillation temperature of 338(degrees)C (640(degrees)F). Crudes,
residuals, and blends will require a higher temperature to achieve this
recovery, and the relation with temperature may not be linear. Deviations
from linearity in the distillation curve may indicate the presence of
impurities. For DLN applications, 90% of the fuel will be recovered at
288(degrees)C (550(degrees)F).
4.10 Thermal Stability
High viscosity fuels, such as residuals and blends, may require heating to
high temperatures to meet the viscosity requirements.
The tendency of such fuels to resist breakdown into resins and deposits
that might block filters is measured by the ASTM thermal stability test
D3241 The fuel oil should not exceed the Number 1 classification in all
DLN applications. There are no restrictions of this thermal stability test
on conventional combustion systems.
4.11 Density
The density of fuels for combustion turbine use is not critical. It will
be of economic significance, however, in the purchase of fuel by volume.
As the density of the fuel approaches that of water, there will be
increasing difficulty in separating water from the oil in water wash fuel
treatment systems. This usually occurs for a density above 970 kg/m3
(60.56 lbs/cu. ft.; API = 14.2; specific gravity = 0.97).
141.5
API Gravity (degrees) = -------------------------------------- - 13.15
sp.gr. @15.6 (degrees)C(60(degrees)F)
Note: For converting from specific gravity to API gravity, the following
can be used:
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
- --------------------------------------------------------------------------------
DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
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<PAGE>
5.0 CONTAMINANTS
Contaminants from all sources must be considered and accounted for when
using the limits defined in this specification. Non-fuel borne
contaminants from sources such as compressor inlet air, steam/water
injection for NO(x) control or power augmentation, and water for
evaporative coolers must be considered. The total fuel borne and non-fuel
borne contaminants must not exceed the specified limits. The equation
given in Section 3.0 should be used to determine the effective contaminant
concentration.
Westinghouse should be consulted for recommendations on the selection and
use of appropriate systems for air filtration and water purification to
minimize contamination from non-fuel sources.
Trace elements may be found native to the fuel or they may be introduced
during transport, handling or storage.
Sodium, potassium, vanadium and lead induce corrosion of metals in the hot
gas path of the turbine, whereas calcium causes ash deposits that may be
difficult to remove and, hence, degrade performance.
Special coatings and materials may be selected to minimize corrosion of
components in the turbine hot gas path.
Finally, the unit may be appropriately derated or operated at partial load
at certain contaminant levels.
Therefore, to meet expected parts life and to sustain good performance, it
is recommended that these trace elements be held within the stated limits.
5.1 Sulfur
Sulfur, normally burning to sulfur dioxide, in the presence of
excess oxygen can partially oxidize to sulfur trioxide in the
turbine. In most localities, limits are set on the emission of SO(2)
and SO(3) (i.e. SO(x)) from the stack, and thus the fuel sulfur must
be limited to a level low enough to meet the SO(x) limit. Sulfur
trioxide can combine with trace metal contaminants in the fuel ash
to form low melting point compounds. These sulfate compounds cause
severe corrosion to turbine hot section parts. Experience in the
combustion turbine industry has shown that prevention of corrosion
of hot section parts by limiting the sulfur content of the fuel is
impractical. Corrosion control is therefore achieved by limiting the
amount of trace metal contaminants in the fuel rather than limiting
sulfur.
For combined cycle and heat recovery applications, the sulfur
restriction is 0.5% by weight. This limit is set to prevent
condensation of sulfuric acid and subsequent
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
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DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
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<PAGE>
HRSG and exhaust system corrosion. For sulfur levels above 0.5%,
Westinghouse should be consulted.
5.2 Fuel Bound Nitrogen
Fuel bound nitrogen is converted into exhaust NO(x) during the
combustion process. It must be limited to avoid exceeding allowable
NO(x) limits at the particular site. Currently, the recommended
maximum limit is 0.015 wt% for all applications. Higher levels may
be encountered, but their acceptability is subject to Westinghouse
review.
5.3 Sodium Plus Potassium
The behavior of sodium and potassium in the combustion turbine is
very similar to that of vanadium. During passage through the hot gas
path, these elements can combine with sulfur and/or vanadium to form
highly corrosive compounds. These compounds are molten over a wide
temperature range encompassing normal turbine operating conditions.
Accordingly, the sodium plus potassium level is limited to 0.5 ppmw,
for current production Westinghouse W501 turbines. For those
Westinghouse units which have had special protective coatings
applied on the first three stages of the turbine, a limit of 1.0
ppmw may be used for sodium plus potassium. Consult Westinghouse for
information regarding coatings in specific turbines.
Note: The allowable sodium plus potassium level for the CW 191 and
W251 models is 1.0 ppmw.
5.4 Vanadium
During the combustion process, vanadium can combine with other
elements in the hot gas path to form low melting point compounds,
such as vanadium pentoxide, which cause severe corrosion of turbine
hot section parts. Fuel employed in Westinghouse combustion turbines
without special treatment is strictly limited to a maximum of 0.5
ppmw vanadium. For vanadium levels in excess of 0.5 ppmw, the fuel
must be treated with an appropriate additive.
Note: The allowable vanadium level (without treatment) for the CWl9l
turbine is 2.0 ppmw.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
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DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
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<PAGE>
5.5 Calcium
Calcium is not harmful from a corrosion standpoint; in fact, it
serves to inhibit the corrosive action of vanadium. However, calcium
can lead to hard and tenacious deposits which are neither
self-spalling when the gas turbine is shut down, nor readily
removable by water-washing of the turbine. Since these deposits will
degrade performance, the maximum limit for calcium is 10 ppmw.
5.6 Lead
Lead can cause corrosion and impair the beneficial inhibiting
effects of magnesium additives used in conjunction with high
vanadium levels. When lead is present with other corrosion causing
impurities (e.g., Na, K, V) the corrosion is more rapid than with
any single impurity. Since lead is rarely found in significant
quantities in crude oil, its appearance in the fuel is primarily the
result of contamination during processing or transportation. For
reliable turbine operation, lead is limited to a maximum of 0.5
ppmw.
5.7 Other Contaminants
Barium and manganese have been shown to accelerate hot corrosion of
turbine parts in the presence of sodium and/or sulfur. Certain fuel
additives use these elements to reduce exhaust smoke levels. Barium
compounds are sometimes added to fuel as sludge dispersants.
Phosphorous is an another impurity which can cause hot corrosion in
combustion turbines. The most likely source of this contaminant is
the inlet air which, in some geographic areas, can contain high
amounts of phosphorous-containing dust.
There is insufficient test data to define exact maximum limits on
the amount of barium, manganese and/or phosphorous permitted in the
turbine hot section. It is recommended, however, that the
concentration of individual contaminants should not exceed 2.0 ppmw.
5.8 Red Dye
On November 24, 1993, the Internal Revenue Service issued a "Notice
of Proposed Rule Making" defining a policy of dyeing fuels for
non-road applications. The fuel is less expensive because the fuel
tax is not paid at the bulk fuel terminals. Tests have shown that
the red dye does not affect the thermal stability of either No. 2
fuel or Jet A.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
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DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
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<PAGE>
6.0 FUEL TREATMENT
Fuels which do not meet the requirements as specified in the previous two
sections must be treated in order to be suitable for use in Westinghouse
combustion turbines. Various fuel treatment approaches can address both
the physical and chemical properties of the fuel.
6.1 Treatments Employed to Alter Physical Properties
Some of the fuels available for use in combustion turbines,
typically residuals and heavy distillates, require heating to
satisfy certain physical properties. Low viscosity, light
distillates need additives to improve lubricity characteristics.
6.1.1 Heating
Heating of the fuel is sometimes required to raise the
temperature above its pour and wax melting points to improve
pumpability, improve treatment separation of contaminants, and
obtain suitable viscosity for atomization by the fuel nozzles.
6.1.2 Use of Additives
Although light fuels are normally clean burning (low emissions
and minimal nozzle clogging), their low viscosities are
troublesome for certain fuel system components.
In order to continuously handle fuels with viscosities in the
1.4 to 1 .8 centistoke range (jet fuels), a lubricity additive
injection system would be needed. Fuels approaching the
minimum limit of 0.43 cSt would require a complete optional
fuel system, including special fuel pump, and additive
injector pump.
6.2 Treatments Employed to Reduce the Corrosive Effects of Trace Metal
Contaminants
Should the fuel contain higher than allowable concentrations of
these elements, several alternatives may be considered to improve
its acceptability. Desalting by water washing is a commonly used
technique to reduce the concentration of sodium and potassium, and
is partially effective for calcium. Additives may be used to inhibit
the corrosive effects of vanadium, and, less frequently, to
counteract the effects of modest amounts of sodium plus potassium.
6.2.1 Water Washing
Water washing of fuel is the preferred treatment for removing
excess sodium and potassium, which is primarily in the form of
water soluble compounds. This treatment involves the mixing of
the fuel, wash water, and a demulsifying
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
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DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
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<PAGE>
agent, followed by separation. The separation of the fuel from
the water solution (which has attracted the corrosive salts)
can be done by either a centrifugal, electrostatic or hybrid
system. The latter is employed for heavy residuals to make use
of the best features of each method of separation.
For fuels having sodium plus potassium levels between 1.0 and
10.0 ppmw and up to 10 ppmw vanadium, it is possible to treat
for corrosion inhibition with special additives. This is
handled on a case-by-case basis through consultation with
Westinghouse.
6.2.2 Use of Additives
The addition of an oil soluble magnesium based compound to
fuels containing vanadium greater than 0.5 ppmw is an
effective means of inhibiting the detrimental effects of
vanadium in the turbine hot section. A magnesium to vanadium
weight ratio of 3.0 has been shown to produce optimum results.
Note that lead, if present, can interact with the vanadium
requiring additional magnesium to be added. In this case the
magnesium to vanadium + lead weight ratio should be 3.0. The
additive should be uniformly dispersed throughout the fuel
prior to reaching the fuel nozzles.
After a number of operating hours on magnesium inhibited
fuels, deposits will accumulate on the turbine blades and
vanes, subsequently reducing turbine output. Periodic
cleaning, via an off-line water wash cycle, is needed to
restore the lost power. Strict procedural safeguards are
incorporated into the wash cycle to prevent ferritic corrosion
by the chlorides present in the water.
7.0 ENVIRONMENTAL CONSIDERATIONS
Regulations regarding the allowable concentrations or quantities of
various pollutants in the combustion turbine exhaust have been developed
by various national, state and local environmental agencies. The influence
of various fuel components on the pollutants presently regulated can be
described.
7.1 Opacity
Opacity levels are affected by the fuel constituents. The hydrogen
content of a fuel affects its smoking tendency, with a decrease
leading to a more visible exhaust plume. In general, the hydrogen
content decreases as fuels get heavier. No. 2 distillates normally
contain 12 to 13.5% hydrogen. If required opacity levels are below
20% (based on standard stack design), the fuel must have a weight
ratio of carbon to hydrogen less than 6.3, (approximately 13.5 to
13.8% hydrogen) a Diesel index* greater than 60, and a Ramsbottom
carbon residue on 10% residuum less than 0.15 wt % (ASTM D 524/D
86).
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
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DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
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<PAGE>
* Diesel Index is: (1/100) x (API Gravity) x (Aniline Point in
Deg. F) Aniline Point is determined by ASTM D 611.
7.2 Sulfur
Fuel sulfur forms both sulfur dioxide (SO(2)) and a small portion of
sulfur trioxide (SO(3)). Local or regional environmental regulations
will limit emissions of SO(2), which will affect the allowable fuel
sulfur levels. The recommended maximum fuel sulfur for engine
operation is 0.5 wt%.
7.3 Particulates
The SO(3) that is formed combines with the water generated in the
combustion process to make sulfuric acid (H(2)SO(4)) mist. Since the
mist will collect on a fine filter, it is often included in the
particulate emissions.
- The additive used for the suppression of vanadium corrosion contains
magnesium, and the resultant compounds form solid particulates. Ash,
by definition, is non-combustible, and passes directly into the
exhaust as a solid particulate.
7.4 Nitrogen Oxides
Fuel bound nitrogen is readily converted to nitrogen oxides (NO(x))
during the combustion process. With stringent NO(x) level
regulations, fuel bound nitrogen must be reviewed in conjunction
with the thermal NO(x) component, which is exponentially dependent
on flame temperatures reached during the combustion process.
8.0 FUEL, AIR, STEAM AND WATER EVALUATION
In order to determine the feasibility of burning a candidate liquid fuel
in a Westinghouse combustion turbine, a representative oil analysis shall
be submitted to Westinghouse for review and recommendation, together with
the ambient air and injected steam/water quality. Where analytical
services are not available they can be purchased from Westinghouse.
Subsequent to the analysis of the fuel, inlet air, and steam/water
quality, an overall fuel treatment/coatings/inlet air filtration program
can be formulated.
8.1 Fuel Sampling Method
Fuel samples should always be drawn from a sampling point in the
pipe or tank which will provide fuel that is well-mixed, in order to
assure an accurate representation. When sampling from storage, ASTM
Method D 4057 or equivalent should be followed. The sample (at least
one gallon) should be stored in a plastic vessel, either
polyethylene or polypropylene, that is tightly sealed to prevent
loss of volatiles. Since
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
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DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
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<PAGE>
certain constituents are significant at the part per million level,
extreme care must be taken in sampling to ensure that a
representative sample is delivered to the laboratory.
8.2 Fuel Analysis Requirements
A complete evaluation of a candidate fuel depends on an assessment
of the specification requirements outlined in Sections 4.0 and 5.0.
An analysis of the proposed fuel (per recommended ASTM methods)
should be submitted covering all the physical and chemical data
listed below.
8.3 Inlet Air Analysis Requirements
Inlet air contaminants must be considered when determining the total
contaminant level. An analysis of the inlet air should be submitted
covering the pertinent contaminants outlined in the specification.
In those cases where evaporative cooling is employed, inlet air
sampling must be downstream of the evaporative cooler.
8.4 Steam and Water Injection Quality
In general, demineralized water is required (a degasification stage
is not required). The pH should fall in the range 7.0 to 8.0, with
the following exception: For applications where the demineralized
water is stored in a tank vented to the atmosphere, the pH may be
allowed to decay to a level of 5.5, due to absorption of carbon
dioxide. In this case, adequate measures must be taken in the design
of the water storage, handling, and forwarding system to prevent
system corrosion due to increased water acidity.
The oxygen level, as determined by O(2) saturated water, should not
exceed 9 ppmw. The concentration of iron plus copper in the steam or
water should be less than 0.1 ppmw. The concentration of silica in
the steam or water should be less than 0.1 ppmw, to avoid plant
equipment problems, and degradation of efficiency. These and other
solids are assumed to oxidize during the combustion process and
result in added particulate emissions.
The concentration of Na, K, Ca, V, Pb, Mn and P in the steam or
water must be sufficiently low so that when combined with the same
elements contained in the fuel, according to the formula in Section
3.0, the limits in Table 3-2 will not be exceeded.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
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DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
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<PAGE>
TABLE 8-1. FUEL ANALYSIS REQUIRED
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Physical Properties ASTM Method Chemical ASTM Method
Properties
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Flash Point D 93 Carbon (See Note 1)
Flash Point D 56*
Vapor Pressure D 323 Hydrogen (See Note 1)
Pour Point D 97 Oxygen (See Note 1)
Kinematic Viscosity, D 445 Nitrogen D 4629
at 40(degrees)C and 100(degrees)C Sulfur D 129, D4294
(104(degrees)F and 212(degrees)F) Aniline Point D 611
Carbon Residue D 524 Sodium D 3605
Water and Sediment D l796 Potassium D 3605
Water Content D 95 Vanadium D 3605
Filterable Dirt D 2276 Calcium D 3605
Ash D 482 Other metals over 2 D 3605
ppm
Wax Content (Note 1) Chlorides D 808
Wax Melting Point (Note 1)
Distillation D 86
Thermal Stability D 3241
Peroxides D 3703
Gum D 381
Density D 1298
Gross Heat of D 4809
Combustion
Bromine Index D 2710
Smoke Point D 1322
- ------------------------------------------------------------------------------------------------------
</TABLE>
Note: No standard reference test exists; contact Westinghouse for mutually
acceptable test method. Wax determination is needed for crudes and heavy
distillates only.
* For use with high volatility fuels such as Jet A and kerosene.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Power Generation.
It is submitted in confidence and is to be used solely for the purpose for which
it is furnished and returned upon request. This drawing and such information is
not to be reproduced, transmitted, disclosed or used in whole or in part without
the written authorization of Westinghouse Power Generation. Proprietary Class
No. 2.
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DOCUMENT NO. 21T4424 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE LIQUID FUEL SPECIFICATION TYPE REV
ESP 004
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<PAGE>
WESTINGHOUSE
GAS FUEL
SPECIFICATION
Written by: /s/ Bruce Rising 12/15/97
------------------------------------ --------------------
B. W. Rising Date
Environmental Engineering
Reviewed by: /s/ P.W. Pillsbury 12/16/97
------------------------------------ --------------------
P. W. Pillsbury Date
Combustion Technology
Reviewed by: /s/ Paul G. Minard 12/13/97
------------------------------------ --------------------
P. G. Minard Date
Operating Plant Technical Support
Approved by: /s/ F. W. Shoemaker 12/16/97
------------------------------------ --------------------
F. Shoemaker Date
Plant Thermal Systems
Approved by: /s/ Jeffrey A. Wilkins 12/16/97
------------------------------------ --------------------
J. A. Wilkins Date
Auxiliary Equipment Design
Approved by: /s/ Steven J. Vance 1/7/98
------------------------------------ --------------------
S. J. Vance Date
Materials Engineering
Reference:___________
WBS: 361
---
Review Level: 5
---
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This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
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This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
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[LOGO] WESTINGHOUSE POWER GENERATION Issue Date: 2/4/98
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CP98103t-final
<PAGE>
REVISION SHEET
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REISSUE
REVISION DATE SECTION DESCRIPTION OF CHANGE
- --------------------------------------------------------------------------------
001 7/11/79 All Original Issue
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002 1/11/85 App I&II Added
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003 1/11/85 Table I Added along with Total Contaminants
Section
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004 11/17/97 All Major Rewrite
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005 1/7/98 7.3 Changed "67% by volume" to read "40%
by volume
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This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
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This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
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CP98103t-final
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
REVISION SHEET ............................................................ 2
1.0 INTRODUCTION .......................................................... 4
2.0 BACKGROUND ............................................................ 4
3.0 HEAT CONTENT .......................................................... 4
4.0 PRESSURE/TEMPERATURE .................................................. 5
5.0 CONDENSABLE LIQUIDS IN THE GAS ........................................ 6
6.0 FLAMMABILITY .......................................................... 6
7.0 FUEL CONTENT .......................................................... 7
8.0 CONTAMINANTS .......................................................... 8
9.0 CO-FIRED FUEL OPERATION ............................................... 16
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This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
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This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
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CP98103t-final
<PAGE>
1.0 INTRODUCTION
The purpose of this specification is to define the qualities and
properties of gaseous fuels to be used in Westinghouse combustion
turbines. Specific limits are placed on fuel gas properties to ensure
operability and maintainability.
In cases where there are deviations from the requirements specified within
this document, Westinghouse must be consulted. Also, a chemical analysis
of the fuel must be submitted for review.
2.0 BACKGROUND
Historically, high energy natural gas has been the primary gaseous fuel
burned in combustion turbines. Its clean burning characteristics, coupled
with ready availability, have made it an ideal fuel for such service.
Almost all types of gaseous fuel can be burned in conventional, diffusion
flame Westinghouse combustion turbines. This includes gases ranging from
coal gas, with low energy content, to gases with high energy content such
as natural gas, butane, or propane. Gas mixtures with widely varying
chemical content, such as refinery waste gases, have also been
successfully used in combustion turbines. The most important fuel property
restrictions follow in the attached text. Dry Low NO(x) (DLN) combustion
systems have additional fuel restrictions, as described in Tables II and
III.
3.0 HEAT CONTENT
Heat content shall be reported on both a lower and higher heating value
basis. This will be done on both a volumetric (e.g. Btu/scf) and mass
(e.g. Btu/lb) basis. Some typical LHVs are provided in Table I. Allowable
limits are specified in Table III. Gas heating value can be calculated
based on the identified gas constituents, and using standard heating value
reference data for these constituents, or determined by the bomb
calorimeter method.
In order to determine fuel handling requirements, heating value and
specific gravity are the characteristics of natural gases which must be
considered. These are combined into a convenient term called Gas Index
(GI), which is also referred to as the Wobbe Index.
3.1 Gas Index (Wobbe Index)
Gas Index (GI), or Wobbe Index, is defined by the ratio of the lower
heating value of the fuel to the square root of the specific
gravity:
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This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
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This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
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GI = LHV(vol)/sqrt(SG) [1]
where:
LHV(vol) = lower heating value in BTU/scf
SG = (fuel gas density)/(density of air), all at standard
conditions(1)
This index is useful in determining the acceptability of a gas for a
given application. For example, for a given fuel nozzle dimension,
differing gases with the same index can be used without requiring a
hardware change.
Example:
For a gas with LHV(vol) = 900 BTU/scf and S.G. = 0.6
GI = 900 divided by (0.6)^(1/2) = 1161.9 BTU/scf.
Most common natural gases having a GI of 1200 +/- 15% can be handled
with conventional diffusion flame equipment. However, once a gas is
defined for specific applications, day to day variation should not
exceed +/- 2%. This is because once a gas is defined for starting,
the minimum gap is set for the gas fuel throttle valve to provide
the correct ignition flow for the turbine. If the gas index varies
too widely, adequate heat input may not be attained for ignition.
DLN applications may have different limits from standard combustion
systems depending upon the specific fuels and configurations
involved. For starting applications the gas index variability should
not exceed +/- 2%. The GI may vary +/- 15% once the machine has
reached full speed no load, and been synchronized with the grid.
Continuous gas index monitoring is required in cases where
significant GI variability is expected.
The density of fuels for combustion turbine use is not critical.
However, it will be of economic significance in the purchase of fuel
by volume.
4.0 PRESSURE/TEMPERATURE
- ----------
(1) Standard conditions are 59(degrees)F, 1 atmosphere
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This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
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TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
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The fuel supply pressure depends upon the unit frame size, minimum ambient
temperature, elevation, and combustion system. The approximate gas
pressure range on most Westinghouse frames is 260-475 psig. DLN
applications require a minimum of 350 psig. Once the site pressure
regulators have been set the pressure must remain within +/- 2% of set
point and the rate of change limited to 2 %/min.
The fuel gas may be heated to improve turbine efficiency. If fuel heating
is employed, the recommended maximum fuel temperature is 300(degrees)F,
however temperature limits are determined by the fuel supply system,
nozzle style, and combustion limitations. Heating of fuels beyond the
above listed limits will increase flame temperatures and increase nozzle
velocities, both of which may affect emissions and required supply
pressure. Minimum temperature limits depend upon the type of fuel gas and
supply pressure being considered, and are described further in Section
5.0. A vapor-pressure chart should be consulted to determine if minimum
temperature requirements are being met.
5.0 CONDENSABLE LIQUIDS IN THE GAS
The fuel gas as fed to the nozzles of the combustion system must not
contain any constituents in the liquid state. This means that the
temperature of the fuel gas must exceed the measured dew point of the fuel
gas by 50(degrees)F. If the dew point cannot be measured and must be
calculated, it must be calculated based on a chromatographic analysis
including all hydrocarbons up to, and including, C(14). Minor traces of
heavier liquid hydrocarbons that might be carried over from the source of
fuel supply should be excluded from the fuel system. This carryover of
liquid can usually be prevented by taps and heaters in the fuel supply
line.
No liquid hydrocarbons are permitted in the fuel gas as it is delivered to
the combustion turbine. Liquid carryover can be detrimental to the engine
and auxiliary parts life. Liquids can be removed by a knockout scrubber
followed by separators and heaters. Long runs of pipe between the gas
conditioning equipment and the physical arrangement can allow pockets of
liquid to collect. For these situations, a final separator near the
combustion turbine is also recommended. Proper liquid level alarms and
shutdown protection are also recommended.
6.0 FLAMMABILITY
Fuel flammability is important when considering ignition and combustion
stability at operating conditions. The flammability limits are quoted as a
rich limit (high fuel to air ratio) and a lean limit (low fuel to air
ratio). The ratio of these rich and lean limits shall be evaluated at 1
atm/59(degrees)F and must be within the required flammability limit ratio,
(usually 2.0). Credit may be given for the beneficial effect of the
elevated temperature of
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This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
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TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
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the combustion air and the fuel (if heated), if the effect of heating for
that particular combination can be found in a reliable literature
reference.
Example:
Methane (CH(4)) has:
a lower inflammability limit of 5.00 % by volume
an upper inflammability limit of 15.00% by volume
The flammability ratio (rich-to-lean) is:
RL/LL = 15/5 = 3.0
7.0 FUEL CONTENT
7.1 Olefins (C(n)H(2n))
Olefins (e.g., C(2)H(4), C(3)H(6)) may be a constituent of some gas
fuels, especially chemical plant and refinery off-gases. It has been
observed that these olefins may lead to coking of nozzles. This
becomes an important factor especially when DLN equipment is
employed where gas port sizes are small. Acceptance levels for
olefin content are limited to 4% by volume. Fuel heating may also
affect the olefin coking reaction, thus fuel heating is not
recommended for plants which employ high olefin content fuels.
7.2 Oxygen
For fuels which contain olefins, an additional limit on oxygen
concentration of 2% by volume of fuel shall also be met, since the
olefin coking reaction is increased in the presence of oxygen.
7.3 Hydrogen
For conventional diffusion flame combustion systems, the maximum
amount of hydrogen allowable in a fuel is 40% by volume, provided
hydrogen embrittlement of system delivery components will not occur
and all other requirements are met. For DLN applications, the
maximum limit of hydrogen by volume of fuel is 40%. Lower limits may
be required on some CT frames. It should be noted that NO(x)
emissions for fuels with high levels of hydrogen may be higher than
for standard natural gas.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
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TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
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7.4 Higher Hydrocarbons
Fuel gases containing more than 5% ethane (C(2)H(6)), 1.5% propane
(C(3)H(8)), or 0.20% higher hydrocarbons should not be used for DLN
applications.
7.5 Fuel Bound Nitrogen
Fuel bound nitrogen (FBN) is readily converted to nitrogen oxides
(NO(x)) during the combustion process. FBN may be present in some
syngas fuels in the form of NH(3) (ammonia) and HCN (hydrogen
cyanide). With stringent NO(x) level regulations, fuel bound
nitrogen must be reviewed in conjunction with the thermal NO(x)
component, which is exponentially dependent on flame temperatures
reached during the combustion process.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
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This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
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8.0 CONTAMINANTS
Contaminants from all sources must be considered and accounted for when
using the limits defined in this specification. Non-fuel borne
contaminants from sources such as compressor inlet air, steam/water
injection for NO(x) control or power augmentation, and water for
evaporative coolers must be considered. The total fuel-borne and non-fuel
borne contaminants must not exceed specified limits. The equation given in
Section 8.5 should be used to determine the effective contaminant
concentration. Trace elements may be found native to the fuel or they may
be introduced during transport, handling or storage. Sodium, potassium,
vanadium and lead induce corrosion of metals in the hot gas path of the
turbine, whereas calcium causes deposits that may be difficult to remove
and, hence, degrade performance. Special coatings and materials may be
selected to minimize corrosion of components in the turbine hot gas path.
Finally, the unit may be appropriately derated or operated at partial load
at certain contaminant levels. Therefore, to meet expected parts life and
to sustain good performance, it is required that the total of these trace
elements from all sources be held within the stated limits given in Table
II, corrected to a fuel equivalent basis.
8.1 Specific Contaminants
8.1.1 Sulfur
Sour gas fuels can contain high levels of sulfur, however,
most natural gases have been sweetened (sulfur removed). In
the presence of excess air, fuel sulfur produces combustion
products which are substantially SO(2). However, a small
percentage of the SO(2) may further oxidize to form SO(3).
Sulfur trioxide can combine with trace metal contaminants from
the fuel (or other sources) to form low melting point
compounds. These sulfate compounds cause severe corrosion to
turbine hot section parts.
Experience in the combustion turbine industry has shown that
prevention of corrosion of hot section parts by limiting the
sulfur content of the fuel is impractical. Corrosion control
is therefore achieved by limiting the amount of trace metal
contaminants in the fuel (and air) rather than limiting
sulfur. For combined cycle and heat recovery applications, the
sulfur restriction is 0.5% by weight, for all fuels, corrected
for LHV using the equation in paragraph 8.5. However, permit
restrictions may require a lower limit. This limit is set to
prevent condensation of sulfuric acid and subsequent HRSG and
exhaust system corrosion.
8.1.2 Sodium Plus Potassium
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This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
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A likely source of sodium (and similar alkalis) is salt from
seawater or sea spray. This is most likely to occur in coastal
regions. The behavior of sodium and potassium in the
combustion turbine is very similar to that of vanadium. During
passage through the hot gas path, these elements can combine
with sulfur and/or vanadium to form highly corrosive
compounds. These compounds are molten over a wide temperature
range which encompasses normal turbine operating conditions.
Accordingly, the sodium plus potassium level is different when
using coated and uncoated components. Consult Westinghouse for
information regarding coatings in specific turbines.
8.1.3 Chlorides
Coming primarily from air, water, or steam, but also
occasionally from fuel, chlorides contribute to hydrochloric
acid pitting of turbine components during shut down periods,
and are therefore limited. Chlorides may also accelerate
corrosion at high temperatures in the hot gas path.
8.1.4 Particulates
Particulates are limited to prevent erosion and deposition on
the components in the turbine and the compressor. Large
particles will cause erosion on the trailing edges of airfoils
and ceramic coatings. Airfoil cooling effectiveness could be
affected if erosion is severe. Small particles will deposit
onto the leading surfaces of the airfoils and restrict the
flow path. If deposition is severe, performance will
deteriorate, and the compressor surge margin will diminish.
Issues with particulates are important and levels must be
limited when using coal and well-head gases. Air, water, and
fuel particulate content should be summed and verified to meet
the limits shown in Table IV.
8.1.5 Water
Water in fuels may cause corrosion of tanks and equipment and
the formation of gas hydrates. If there is a potential problem
with water, to avoid system contamination problems, contact
Westinghouse for proper storage and protection methods. See
Section 5.0.
8.1.6 Calcium
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This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
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TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
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Calcium is not harmful from a corrosion standpoint; in fact,
it serves to inhibit the corrosive action of vanadium.
However, calcium can lead to hard and tenacious deposits which
are neither self-spalling when the gas turbine is shut down,
nor readily removable by water-washing of the turbine. Also,
they may abrade turbine coatings. An example of these
tenacious deposits is anhydrite (CaSO(4)). Since these
deposits will degrade performance, a maximum limit has been
established.
8.1.7 Other Contaminants
Although rare in gas fuels, vanadium if present, can combine
with other elements in the hot gas path to form low melting
point compounds, such as vanadium pentoxide, which cause
severe corrosion of turbine hot section parts. When no
inhibitors are used, the amount of this contaminant which
enters Westinghouse combustion turbines is strictly limited.
Barium and manganese have been shown to accelerate hot
corrosion of turbine parts in the presence of sodium and/or
sulfur. Manganese has been shown to reduce the effectiveness
of the magnesium additives generally used for vanadium
inhibition.
Phosphorous is another impurity which can cause hot corrosion
in combustion turbines. The most likely source of this
contaminant is the inlet air which, in some geographic areas,
can contain high amounts of phosphorous containing dust. See
Table II for limits.
There is insufficient test data to define exact maximum limits
on the amount of barium, manganese and/or phosphorous
permitted in the turbine hot section. It is recommended,
however, that the total concentration of these contaminants
should not exceed the limits given in Table II.
Lead can cause corrosion and impair the beneficial inhibiting
effects of magnesium additives used in conjunction with high
vanadium levels. When lead is present with other corrosion
causing impurities (e.g., Na, K, V) the corrosion is more
rapid than with any single impurity. See Table II for limits.
8.2 Inlet Air Contaminants
The compressor inlet air can greatly increase the level of
impurities entering the hot gas path. To determine the extent of
contamination, the air-to-fuel mass flow
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This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
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ratio is multiplied by the air contaminant level in ppmw (ppm by
weight) to obtain the contaminant concentration on an assumed fuel
equivalent basis.
For example, 20 ppb (parts per billion) of sodium (Na) in the inlet
air is equivalent to approximately 1.0 ppm sodium in the fuel on a
weight basis for natural gas. Use the expressions in Section 8.5 to
calculate the contaminant requirements.
For combustion turbine installations where the total of the
concentrations of sodium, potassium, vanadium, lead, and phosphorous
in the inlet air are greater than those levels specified in this
document, additional air filtration units are required. When
totaling the amount of air contaminants, care should be taken to
determine the contaminants that will enter the turbine, after all
filtration is complete. An accurate assessment of the filtration
efficiency is required. In those cases where evaporative cooling is
employed, inlet air sampling must be downstream of the evaporative
cooler.
8.3 Water and Steam Borne Contaminants
Water and steam employed for evaporative cooling, emissions control,
or power augmentation can also increase the level of impurities
entering the hot gas path. Calculation of water-borne contaminants
entering the turbine on a liquid fuel equivalent basis is
accomplished in the same manner as illustrated for air-borne
contaminants. See Section 8.5.
In general, demineralized water is required (a degasification stage
is not required). The pH should fall in the range 7.0 to 8.0, with
the following exception: for applications where the demineralized
water is stored in a tank vented to the atmosphere, the pH may be
allowed to decay to a level of 5.5, due to absorption of carbon
dioxide. In this case, adequate measures must be taken in the design
of the water storage, handling, and forwarding system to prevent
system corrosion due to increased water acidity.
The oxygen level, as determined by O(2) saturated water, should not
exceed 9 ppmw. The concentration of contaminants in the steam/water
should be less than the limits specified in Table II to prevent
corrosion.
Water/steam borne solids are assumed to oxidize during the
combustion process and result in added particulate emissions.
As noted in the air-borne contaminant section, when evaporative
coolers are employed samples of the air are taken downstream of
them. Thus, the
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This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
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contaminants in the water being used by the evaporative cooler will
be accounted for in the air analysis and should not be doubly
counted.
8.4 Additives
For various reasons, additives for fuel gas, water, or steam may be
proposed. This will require Westinghouse approval. These additives
shall be analyzed and the chemistry and contaminants contained
within them should be accounted in the overall levels entering the
turbine.
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This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
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8.5 Calculation of Contaminants
To be acceptable for use in Westinghouse combustion turbines, the
gas fuel must meet the physical property limits of Appendix I, and
the allowable total contaminant limits of the fuel and all other
sources, such as inlet air, steam, or water injection shall meet the
limits of Table II. To sum contaminants from all sources the
following formula shall be used:
TCL(i) = R x {I(f) + [I(air) x (1-K(A))x(A/F)]+[I(stm)x(S/F)]+
[I(w)x(W/F)]+[I(add)x(AD/F)]}
where:
TCL(i) = equivalent total contaminant level, ppmw, i is the
individual species of concern
I(f) = contaminant level in fuel entering turbine, ppmw
I(air) = contaminant levels in air entering filters, ppmw
I(stm) = contaminant level in injection steam entering turbine, ppmw
I(w) = contaminant level in injection water entering turbine, ppmw
I(add) = contaminant level in additives entering turbine, ppmw
A/F = air to fuel weight ratio
S/F = steam to fuel weight ratio
W/F = water to fuel weight ratio
AD/F = additive to fuel weight ratio
K(A) = efficiency of air filters (0=no filtering; 1.00=all filtered)
R = LHV ratio = (LHV Reference Fuel/LHV Actual Fuel)
= (20960 BTU/lb)/(LHV Actual Fuel in BTU/lb)
The total contaminant level entering the turbine must be less
than the limit given in Table II. If fuel additives are used
which affect the heating value of the fuel, this altered LHV
(fuel + additive) should be used as the "LHV Actual Fuel in
BTU/lb", above. For allowable fuel borne particulates,
reference Table IV.
8.6 Fuel, Air, Additive, and Water Evaluation
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This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
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Prior to burning gaseous fuels in Westinghouse combustion turbines,
it is required that the analytical results are submitted to
Westinghouse for approval. Existing units with possible
contamination issues must have the analyses performed with results
submitted to Westinghouse for review and recommendation. The ambient
air quality, injected water quality, and any additive analysis
results must also be submitted. The fuel, air, water, and additive
analysis should cover all requirements as specified in this
document. Subsequent to the analysis of the fuel, inlet air, and
steam/water quality, an overall fuel treatment/coatings/inlet air
filtration program can be formulated.
The following Appendices present the tests necessary for evaluation
and additional limits:
o Fuel Requirements and Analysis -Tables I - VI
o Water/Steam Analysis -Appendix I
o Air Analysis -Appendix II
o Additive Analysis -Appendix III
When performing a complete evaluation of a particular unit, results
of the following shall be analyzed:
o air entering the turbine after the evaporative cooler & all
filtration
o water entering the turbine for injection after all
filtration
o steam entering the turbine for injection after all
filtration
o fuel entering the turbine after all filtration
o additive
o fuel plus additive entering the turbine after all filtration
8.6.1 Analysis Requirements
A complete evaluation depends on an assessment of the
specification requirements outlined in the above listed
Appendices. An analysis of the proposed fuel, water, air, or
additive (per recommended ASTM methods)
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This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
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should be submitted covering all the physical and chemical
data listed. Since certain constituents are significant at the
part per million level, extreme care must be taken in sampling
to ensure that a representative sample is delivered to the
laboratory. Readings shall be accurate to within the
following:
--------------------------------------------------------------------------
LIMIT LISTED IN TABLE II ACCURACY
------------------------ --------
--------------------------------------------------------------------------
% volume (> 1% req't) +/- 0.05%
% volume (<= l% req't) +/- 0.001%
>3.0 ppmw +/- 0.1 ppmw
<=3.0 ppmw +/- 0.01 ppmw
8.6.2 Sampling Requirements
If samples are to be provided to Westinghouse for evaluation,
they should be stored in a stainless steel pressure cylinder
of at least 500 ml capacity and 200 psig. The specific
sampling point location shall be documented with the sample.
The location shall be such that it will provide a sample that
is well-mixed in order to give an accurate representation.
This location shall be provided to Westinghouse with the
samples' results.
9.0 CO-FIRED FUEL OPERATION
There are some applications of co-firing gaseous and liquid fuels. This is
where gas and liquid fuels combust simultaneously (they are supplied
through different passages). Specific control system changes are required.
A minimum flow rate for the "second fuel" needs to be specified in order
to prevent engine shutdown in the event one of the fuel delivery systems
develops a problem. For conventional, diffusion flame combustion systems,
this minimum flow is typically 25-30% of the total flow (adjusted for
energy content) at base load. If the engine load is reduced, this
percentage will necessarily increase. Typically, when loads become too low
(60% of base for liquid fuel-gas mixtures), this minimum requirement
cannot be satisfied. Co-firing is not available for DLN combustion
systems.
When co-firing on gas and liquid fuels, the liquid fuels shall meet all
the requirements of 21T4424.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE POWER GENERATION Issue Date: 2/4/98
POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 16 of 27
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
CP98103t-final
<PAGE>
TABLE I: ESTIMATED HEATING VALUES & SPECIFIC GRAVITIES OF SOME
COMBUSTION GASES
NSI PTC-22 Gaseous fuel data.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Compound Formula MW Gas Constant Specific Specific Specific Heat Heating value Comp
(ft-lb/(lbm-R) Gravity Volume (Btu/lbm-R) (Btu/ft^3) ress-
(ft^3/lbm) Dry Saturated ibility
- ------------------------------------------------------------------------------------------------------------------------------------
Cp Cv High Low High Low
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Methane CH(4) 16.043 96.32 0.5539 23.5689 0.5266 0.4028 1012 911.2 994.4 895.4 0.9981
Ethane C(2)H(6) 30.070 51.39 1.0382 122.4924 0.4097 0.3436 1772.9 1621.6 1742.1 1593.4 0.9916
Propane C(3)H(8) 44.097 35.04 1.5224 8.4360 0.3381 0.3431 2523.0 2321.4 2479.9 2281.1 0.9820
Isobutane C(4)H(10) 58.124 26.59 2.0067 6.3237 0.3872 0.3530 3260.1 3008.0 3203.4 2955.7 0.9702
N-Butane C(4)H(10) 58.124 26.59 2.0067 6.3002 0.3867 0.3525 3269.6 3017.5 3212.7 2965.0 0.9666
Isopentane C(5)H(12) 72.151 21.42 2.4910 5.2506 0.3827 0.3552 4009.4 3706.0 3939.7 3641.9 1.0004
N-pentane C(5)H(12) 72.151 21.42 2.4910 5.2506 0.3883 0.3608 4018.5 3716.0 3948.6 3651.5 1.0004
Hexanes C(6)H(14) 86.178 17.93 2.9753 4.3960 0.3864 0.3634 4758.0 4405.0 4675.2 4328.4 1.0004
Heptanes C(7)H(16) 100.206 15.42 3.4596 3.7806 0.3875 0.3677 5509.7 5106.5 5413.9 5017.7 1.0004
Carbon CO 28.011 55.17 0.9671 13.5190 0.2484 .1775 321.1 315.5 0.9995
Monoxide
Carbon CO(2) 44.010 35.11 1.5194 8.5590 0.1991 .1540 0.9943
Dioxide
Hydrogen H(2)S 34.076 45.35 1.1765 11.1081 0.2380 0.1797 638.6 588.2 627.5 578.0 0.9993
Sulfide
Air 28.9645 53.35 1.000 13.0740 0.2400 0.1714 0.9996
Hydrogen H(2) 2.016 766.53 0.0696 188.0344 3.4080 2.4227 324.9 274.5 319.3 269.7 1.0006
Water H(2)O 18.015 85.78 0.6220 21.0180 0.4446 0.3343 0.9995
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Actual Westinghouse Natural Gas Analyses
- --------------------------------------------------------------------------------
Fuel Source HHV LHV S.G. Sulfur
- --------------------------------------------------------------------------------
Btu/scf Btu/lb Btu/scf Btu/lb grains/100 dscf
Illinois 984(2) 19497 0.6153 <0.03
Wisconsin 1018(2) 22621 918 20391 0.588 0.3
Texas 1006(2) 22308 0.5907 0.3
- --------------------------------------------------------------------------------
- ----------
(2) Dry gas basis
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE POWER GENERATION Issue Date: 2/4/98
POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 17 of 27
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
CP98103t-final
<PAGE>
TABLE II. MAXIMUM ALLOWABLE TOTAL CONTAMINANT LEVEL FROM
FUEL, AIR, STEAM, AND WATER
- --------------------------------------------------------------------------------
Maximum Permitted by Engine Model
Contaminant Units 191 251 501 Comments
- --------------------------------------------------------------------------------
FBN wt% [*] [*] [*]
S wt% [*] [*] [*] See text
V ppmw [*] [*] [*] Without treatment
Na+K ppmw [*] [*] [*] Standard Production
Na+K ppmw [*] [*] [*] Coated Blades &
Vanes, 3 Rows
Ca ppmw [*] [*] [*]
Pb ppmw [*] [*] [*]
Ba ppmw [*] [*] [*]
Mn ppmw [*] [*] [*]
P ppmw [*] [*] [*]
Cl ppmw [*] [*] [*]
- --------------------------------------------------------------------------------
Definitions
- --------------------------------------------------------------------------------
FBN Fuel Bound Nitrogen The above values are recommended maximums. In some
cases, higher concentrations may be encountered.
S Sulfur V Vanadium
Na Sodium K Potassium
Ca Calcium Pb Lead
Ba Barium Mn Manganese
P Phosphorous Cl Chlorides
- --------------------------------------------------------------------------------
* Does not apply.
- ----------
(3) Environmental requirements usually limit the maximum fuel sulfur content
to a lower limit.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE POWER GENERATION Issue Date: 2/4/98
POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 18 of 27
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
CP98103t-final
<PAGE>
TABLE II. Continued
Example:
- --------
For a 501 combustion turbine running with a gas with LHV=18000 BTU/lb, 50:1
air-to-fuel ratio, 90% efficient air filters, and 0.8:1 water injection, the
following results are obtained from analysis:
WATER (just prior to turbine) AIR (prior to filters):
- ----------------------------- -----------------------
[Ca]: 1 ppmw [Ca]: 0 ppmw
[Pb]: 1 ppmw [Pb]: 0.02 ppmw
[Na]: 0.01 ppmw [Na]: 0.01 ppmw
[K]: 0.03 ppmw [K]: 0.02 ppmw
FUEL (after all filters):
- -------------------------
[Ca]: 4 ppmw
[Pb]: 1 ppmw
[Na]: 0.01 ppmw
[K]: 0 ppmw
TCL=R x {I(f) + [I(air) x (1-K(A))x(A/F)]+[I(stm)x(S/F)]+
[I(w)x(W/F)]+[I(add)x(AD/F)]}
TCL[Ca] = (20960/18000){4 + (1)(0.8)} = 5.6 ppmw
TCL[Pb] = (20960/18000){l + (0.02)(1-0.90)(50) + (1)(0.8)} = 2.2 ppmw
TCL[Na+K] = (20960/18000) {0.01 +(0.02+0.01)(1-0.90)(50) + (0.01+0.03)(0.8)}
= 0.22ppmw
Comparing to Table II, the lead content (Pb) would violate the specification
limits and would not be allowed.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE POWER GENERATION Issue Date: 2/4/98
POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 19 of 27
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
CP98103t-final
<PAGE>
TABLE III FUEL REQUIREMENTS
The fuel shall meet the following requirements. If fuel additives are used, the
fuel plus additive mixture shall meet the following requirements:
- --------------------------------------------------------------------------------
PROPERTY LIMIT COMMENTS
- --------------------------------------------------------------------------------
Flammability Rich-to-Lean ratio = 2.0,min volume basis @ 1 atm.,
59(degrees)F
- --------------------------------------------------------------------------------
Heating Value (LHV) 235 BTU/scf, min, running conventional combustion
(enrichment required for systems
startup)
----------------------------------------------------------
770 BTU/scf, min DLN combustion systems
- --------------------------------------------------------------------------------
Gas Index Variation +/- 2% day-to-day
- --------------------------------------------------------------------------------
Gas Pressure 260-450 psig see text
- --------------------------------------------------------------------------------
Gas Temperature 300(degrees)F, max see text
- --------------------------------------------------------------------------------
Condensables 50(degrees)F superheat, min.
- --------------------------------------------------------------------------------
Density see text
- --------------------------------------------------------------------------------
Oxygen 2% by volume, max. when olefins present in fuel
- --------------------------------------------------------------------------------
Olefins 4% by volume, max.
- --------------------------------------------------------------------------------
Hydrogen 40% by volume, max. conventional combustors
----------------------------------------------------------
40% by volume, max. DLN combustors
- --------------------------------------------------------------------------------
Fuel Bound Nitrogen see text limits set by environmental
regulation
- --------------------------------------------------------------------------------
Sulfur maximum value of 0.5 wt%
based on equipment
requirements;
environmental regulations
usually establish a lower
value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE POWER GENERATION Issue Date: 2/4/98
POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 20 of 27
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
CP98103t-final
<PAGE>
TABLE IV:
PARTICULATE SIZE LIMITATIONS - FUEL GAS
- --------------------------------------------------------------------------------
Particulate Matter < 0.007 lb/MMBTU heat Total acceptable amount for
input (use LHV) erosion/deposit prevention
- --------------------------------------------------------------------------------
Particulate Size Particulate matter > 10 Downstream of customer
microns ((micro)m) = 0 supplied filtration system
----------------------------------------------------------
< 0.00015lb/MMBTU Large particle limit for
Particulate matter 5 to 10 erosion prevention (use
microns ((micro)m) LHV of fuel)
----------------------------------------------------------
< 0.004lb/MMBTU (use LHV of fuel)
Particulate matter 1 to 10
microns ((micro)m)
----------------------------------------------------------
< 0.004lb/MMBTU Small particle limit for
Particulate matter < 2 prevention of deposits (use
microns ((micro)m) LHV of fuel)
- --------------------------------------------------------------------------------
TABLE V: HYDROCARBON SERIES
- --------------------------------------------------------------------------------
Hydrocarbon Series Form Examples
- --------------------------------------------------------------------------------
Paraffin (Alkanes) C(n)H(2n+2) Methane (CH(4)), n-Butane (C(4)H(10))
- --------------------------------------------------------------------------------
Olefin (Alkenes) C(n)H(2n) Propylene (C(3)H(6)), Ethylene (C(2)H(4))
- --------------------------------------------------------------------------------
Aromatic C(n)H(2n-6) Benzene (C(6)H(6)), Toluene (C(7)H(8))
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE POWER GENERATION Issue Date: 2/4/98
POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 21 of 27
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
CP98103t-final
<PAGE>
TABLE VI: FUEL ANALYSIS REQUIRED(4)
- --------------------------------------------------------------------------------
METHOD* RESULTS UNITS
- --------------------------------------------------------------------------------
Flammability ___________ Rich-to-Lean ratio @ 1atm, 59F
Critical Pressure ___________ psia
Critical Temperature ___________ Rankine
Dew Point ___________ deg F
Specific Gravity @ 59F, 1 atm ___________
Higher Hearing Value (HHV) D240 ___________ BTU/scf
Lower Heating Value (LHV) ___________ BTU/scf
Higher Heating Value (HHV) D240 ___________ BTU/lb
Lower Heating Value (LHV) ___________ BTU/lb
Molecular Weight ___________
Condensed Liquids ___________ wt%
CHEMICAL ANALYSIS (per ASTM D1137 or ASTM D1945)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Component, vol% Result Component, vol% Result
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Argon (Ar) __________ Carbon monoxide (CO) _________
Helium (He) __________ Methane (CH(4)) _________
Nitrogen (N(2)) __________ Ethane (C(2)H(6)) _________
Carbon dioxide (CO(2)) __________ Propane (C(3)H(8)) _________
Water Vapor (H(2)O) __________ Butane (C(4)H(10)) _________
Hexane (C(6)H(14)) __________ Pentane (C(5)H(12)) _________
Heptane (C(7)H(16)) __________ Pentane (C(5)H(12)) _________
Octane (C(8)H(18)) __________ Ethylene (C(2)H4) _________
Propylene(C(3)H(6)) __________ Acetylene(C(2)H(2)) _________
Hydrogen (H(2)) __________
Total Sulfur, (S) grains/100dscf __________ Alkali (wt%) _________
Hydrogen Sulfide (H(2)S), ppm __________ Solids > 10 (micro)m (wt%) _________
Ammonia (NH(3)) __________ Solids 5-10 (micro)m (wt%) _________
Carbonyl Sulfide (COS) __________ Solids 1-10 (micro)m (wt%) _________
Hydrogen Cyanide (HCN) __________ Solids <2 (micro)m (wt%) _________
Others above .001% vol __________
</TABLE>
- ----------
(4) Use these results to calculate total contaminants as shown in Section 8.5.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE POWER GENERATION Issue Date: 2/4/98
POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 22 of 27
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
CP98103t-final
<PAGE>
CONTAMINANT - Typically not found in natural gases, may be present in
some synthetic gases (analysis for these gases need not be
specified, unless their presence is suspected)
COMPONENT SYMBOL RESULT UNITS
Sodium Na ____________ ppmw
Potassium K ____________ ppmw
Vanadium V ____________ ppmw
Lead Pb ____________ ppmw
Magnesium Mg ____________ ppmw
Manganese Mn ____________ ppmw
Silica SiO2 ____________ ppmw
Silicon Si ____________ ppmw
Barium Ba ____________ ppmw
Phosphorous P ____________ ppmw
Calcium Ca ____________ ppmw
Iron Fe ____________ ppmw
Copper Cu ____________ ppmw
Zinc Zn ____________ ppmw
Nickel Ni ____________ ppmw
Chlorides Cl ____________ ppmw
Other Trace Metals ____________ ppmw
____________ ppmw
* Note: When no standard reference test exists; contact Westinghouse for
mutually acceptable test method. For chemical content and contaminant
analysis, atomic emission, flame emission, or other methods may be
employed, provided the sensitivity and accuracy of the methods are
acceptable.
SAMPLE OBTAINED BY:_________________ DATE SAMPLE WAS TAKEN: _________
LOCATION WHERE SAMPLE WAS TAKEN: _________________________________
LAB NAME:__________________ DATE OF TEST: _____________
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE POWER GENERATION Issue Date: 2/4/98
POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 23 of 27
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
CP98103t-final
<PAGE>
APPENDIX I: WATER/STEAM FUEL ADDITIVES ANALYSIS
The following results shall be obtained and the method(s) used to determine each
item shall be provided.
PROPERTY RESULT
- --------------------------------------------------------------------------------
Oxygen content ppmw (determined by O2
_______________ saturated water)
pH level _______________ (see text)
Condensables _______________ % weight
Critical Pressure _______________ psia
Critical Temperature _______________ Rankine
Cation conductivity _______________
CONTAMINANT
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
COMPONENT SYMBOL RESULT UNITS COMPONENT SYMBOL RESULT UNITS
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sodium Na ___________ ppmw Copper Cu __________ ppmw
Potassium K ___________ ppmw Zinc Zn __________ ppmw
Vanadium V ___________ ppmw Nickel Ni __________ ppmw
Lead Pb ___________ ppmw Chlorides __________ ppmw
Magnesium Mg ___________ ppmw Ammonia NH(3) __________ ppmw
Manganese Mn ___________ ppmw Alkali __________ ppmw
Silica SiO(2) ___________ ppmw Total dissolved solids __________ ppmw
Silicon Si ___________ ppmw
Barium Ba ___________ ppmw
Phosphorous P ___________ ppmw
Calcium Ca ___________ ppmw
Iron Fe ___________ ppmw
</TABLE>
SAMPLE OBTAINED BY:__________________ DATE SAMPLE WAS TAKEN:_______
LOCATION WHERE SAMPLE WAS TAKEN:___________________________________
LAB NAME:____________________ DATE OF TEST: _________________________
Use these results so calculate total contaminants shown in Section 8.5.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE POWER GENERATION Issue Date: 2/4/98
POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 24 of 27
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
CP98103t-final
<PAGE>
APPENDIX II: AIR ANALYSIS
The following results shall be obtained and the method(s) used to determine each
item shall be provided.
CONTAMINANT
COMPONENT SYMBOL RESULT UNITS
- ------------------------------------------------------------
Sodium Na ____________ ppmw
Potassium K ____________ ppmw
Vanadium V ____________ ppmw
Lead Pb ____________ ppmw
Magnesium Mg ____________ ppmw
Manganese Mn ____________ ppmw
Silica SiO2 ____________ ppmw
Silicon Si ____________ ppmw
Barium Ba ____________ ppmw
Phosphorous P ____________ ppmw
Calcium Ca ____________ ppmw
Iron Fe ____________ ppmw
Copper Cu ____________ ppmw
Zinc Zn ____________ ppmw
Nickel Ni ____________ ppmw
Chlorides ____________ ppmw
Other Trace Metals ____________ ppmw
____________ ppmw
____________ ppmw
____________ ppmw
SAMPLE OBTAINED BY:_________________ DATE SAMPLE WAS TAKEN:_______
LOCATION WHERE SAMPLE WAS TAKEN:____________________________________
LAB NAME:__________________ DATE OF TEST: _____________
Use these results to calculate total contaminants shown in Section 8.5.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE POWER GENERATION Issue Date: 2/4/98
POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 25 of 27
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
CP98103t-final
<PAGE>
APPENDIX III: FUEL ADDITIVE ANALYSIS
The following results shall be obtained and the method(s) used to determine each
item shall be provided.
PROPERTY RESULTS UNITS
- --------------------------------------------------------------------------------
Flash Point ____________ deg F
Pour Point ____________ deg F
Flammability ____________ Rich-to-Lean ratio @ 1atm, 59F
Kinematic Viscosity, @ 40C ____________ cSt
Water & Sediment ____________ % weight
Filterable Dirt ____________ % weight
Particulates/Ash ____________ % weight
Inorganic Material ____________ % weight
Organic Material ____________ % weight
Thermal Stability ____________ ASTM Thimble No.
Critical Pressure ____________ psia
Critical Temperature ____________ deg F
Dew Point ____________ deg F
Specific Gravity @ 59F, 1 atm ____________
Appearance ____________ (color)
CONTAMINANT
COMPONENT SYMBOL RESULT UNITS COMPONENT SYMBOL RESULT UNITS
Sodium Na ___________ ppmw Phosphorous P __________ ppmw
Potassium K ___________ ppmw Calcium Ca __________ ppmw
Vanadium V ___________ ppmw Iron Fe __________ ppmw
Lead Pb ___________ ppmw Copper Cu __________ ppmw
Magnesium Mg ___________ ppmw Zinc Zn __________ ppmw
Manganese Mn ___________ ppmw Nickel Ni __________ ppmw
Silica SiO(2) ___________ ppmw Trace Metals __________ ppmw
Silicon Si ___________ ppmw __________ ppmw
Barium Ba ___________ ppmw Chlorides __________ ppmw
Calcium Ca ___________ __________ ppmw
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
- --------------------------------------------------------------------------------
TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
- --------------------------------------------------------------------------------
[LOGO] WESTINGHOUSE POWER GENERATION Issue Date: 2/4/98
POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 26 of 27
- --------------------------------------------------------------------------------
FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
CP98103t-final
<PAGE>
CHEMICAL ANALYSIS
COMPONENT SYMBOL RESULT UNITS
- ---------------------------------------------------------------
Hydrogen H(2) ____________
Carbon C ____________
Helium He ____________
Nitrogen N(2) ____________
Carbon dioxide CO(2) ____________
Carbon monoxide CO ____________
Methane CH(4) ____________
Ethane C(2)H(6) ____________
Propane C(3)H(8) ____________
Butane C(4)H(10) ____________
Pentane C(5)H(12) ____________
Hexane C(6)H(14) ____________
Heptane C(7)H(16) ____________
Octane C(8)H(18) ____________
Ethylene C(2)H(4) ____________
Propylene C(3)H(6) ____________
Acetylene C(2)H(2) ____________
Water Vapor H(2)O ____________
Total Sulfur S ____________
Hydrogen Sulfide H(2)S ____________
Ammonia NH(3) ____________
Carbonyl Sulfide COS ____________
HCN ____________
Others above 0.001% vol ____________
____________
Solids > 20 (micro)m ____________ % weight
Solids 5-20 (micro)m ____________ % weight
Solids 1-20 (micro)m ____________ % weight
Solids < 2 (micro)m ____________ % weight
Condensable Liquids ____________ % weight
SAMPLE OBTAINED BY:________________ DATE SAMPLE WAS TAKEN:______________
LOCATION WHERE SAMPLE WAS TAKEN:________________________________
LAB NAME:________________ DATE OF TEST:____________
Use these results to calculate total contaminants shown in Section 8.5.
- --------------------------------------------------------------------------------
This drawing contains information proprietary to Westinghouse Electric
Corporation. It is submitted in confidence and is to be used solely for the
purpose for which it is furnished and returned upon request. This drawing and
such information is not to be reproduced, transmitted, disclosed or used in
whole or in part without the written authorization of Westinghouse Electric
Corporation. Proprietary Class No. 2.
- --------------------------------------------------------------------------------
This references document 21T0306 Rev.5 DISTRIBUTION CODE: 284-000-606
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TITLE: WESTINGHOUSE GAS FUEL SPECIFICATION TYPE REV
AES IRONWOOD PROJECT ESP 000
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[LOGO] WESTINGHOUSE POWER GENERATION Issue Date: 2/4/98
POWER GENERATION BUSINESS UNIT - ORLANDO, FL Page: 27 of 27
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FINAL ISSUE - OCTOBER 30, 1998 AES IRONWOOD CONTRACT
CP98103t-final
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Water Specification - STREAM DATA
Stream Qualities
<TABLE>
<CAPTION>
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Constituent, mg/l, except as noted POTW Quarry Makeup Mix Demineralized
Water
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<S> <C> <C> <C> <C>
pH, standard units [*] [*] [*]
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Specific Conductance, 25(degrees)C,(micro)S/cm [*] [*] [*]
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P-alkalinity, as CaCO(3) [*] [*] [*]
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M-alkalinity [*] [*] [*]
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Sulfur, Total as SO(4) [*] [*] [*]
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Chloride as Cl [*] [*] [*]
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Phosphate, total as PO(4) [*] [*] [*]
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Nitrate, as NO3 [*] [*] [*]
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Silica, Total as SiO(2) [*] [*] [*]
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Calcium, Total as CaCO(3) [*] [*] [*]
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Magnesium, Total as CaCO(3) [*] [*] [*]
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Sodium as Na [*] [*] [*]
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Aluminum, Total as Al [*] [*] [*]
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Barium as Ba [*] [*] [*]
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Boron as B [*] [*] [*]
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Iron, Total as Fe [*] [*] [*]
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Manganese, Total as Mn [*] [*] [*]
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Potassium as K [*] [*] [*]
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Strontium as Sr [*] [*] [*]
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Vanadium as V [*] [*] [*]
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Zinc as Zn [*] [*] [*]
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Sodium as Na, ppb [*]
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Silica as SiO2, ppb [*]
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Chlorides as Cl, ppb [*]
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Sulfates as SO4, ppb [*]
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Phosphate as Po4, ppb [*]
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Specific Conductivity, (micro)S/cm at 25 (degrees)C Less than [*]
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</TABLE>
<PAGE>
AMENDMENT NO. 1
TO
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND
SCHEDULED OUTAGE TFA SERVICES CONTRACT
This Amendment No. 1 dated as of the 13th day of January, 1999 is by and between
AES IRONWOOD, INC. (Owner) a corporation organized under the laws of the State
of Delaware, and Siemens Westinghouse Power Corporation (Siemens Westinghouse) a
corporation organized under the laws of the State of Delaware.
A. On September 23, 1998, Owner and Siemens Westinghouse entered into a
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE TFA SERVICES
CONTRACT (Contract) for the supply/purchase of combustion turbine parts,
shop repairs and scheduled outage technical field assistance services.
B. The parties desire to amend the Contract.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and agreeing to be legally bound hereby, Owner and Siemens
Westinghouse agree to amend the Contract as follows:
1. Unless otherwise noted, capitalized terms shall have the meanings
assigned thereto in the Contract.
2. Exhibit A, Addendum 2 of the Contract is hereby amended by deleting it
and replacing it with the attached Exhibit A, Addendum 2.
3. Except as specifically modified herein, the terms of the Contract shall
remain in full force and effect.
4. This Amendment No. 1 shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have set their respective signatures to
this Amendment No. 1 as of the date set forth above.
AES IRONWOOD, INC. SIEMENS WESTINGHOUSE POWER
CORPORATION
By: /s/ Patricia L. Rollin By: /s/ R.M. Morgan
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By: Patricia L. Rollin By: R.M. Morgan
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Its: Vice President Its: Mgr., Contract Policy
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Siemens Westinghouse Proprietary Information AES Ironwood Project
January 13, 1999 Amendment No. 1
<PAGE>
Addendum 2
SCHEDULED OUTAGE DIVISION OF RESPONSIBILITIES
The following list specifies the key resources necessary to perform the
Scheduled Outages and assigns responsibility for their supply, either to Seller
or Buyer.
Outage Responsibility Checklist
<TABLE>
<CAPTION>
Seller Buyer
<S> <C> <C> <C>
A. PERSONNEL
1. Maintenance Program Engineer (Orlando) X
2. On-Site Technical Advisors X
3. C.T. Outage Manager X
4. Engineers X
5. Technicians X
6. Non-Destructive Testing Technicians X
7. Project Administrator X
8. Specialists and Support Personnel X
9. Plant Personnel X
10. Crane Operators X
11. Plant Manager X
B. TOOLS AND EQUIPMENT
1. Maintenance Tool Set X
2. Welding Machines X
3. Mobile Crane (as required) X
4. Special Tools (supplied with T-G) X
5. Material Storage X
6. Consumables X
7. Applicable Program Parts and X
Miscellaneous Hardware required
for the applicable Scheduled Outage
8. Expendable Material X
</TABLE>
Siemens Westinghouse Proprietary Information AES Ironwood Project
January 13, 1999 Amendment No. 1
<PAGE>
<TABLE>
<CAPTION>
Seller Buyer
<S> <C> <C> <C>
C. FACILITIES/SERVICES
1. Removal/Reinstallation of Blanket Insulation X
2. Sanitary Facilities X
3. Electric Power X
4. Station Air X
5. Service Water X
6. On-site First Aid (For (W) Employees) X
7. Cribbing X
11. Telephone Service X
12. Electrical Disconnection/Connection X
13. Instrumentation Disconnection/Connection X
14. Instrumentation Calibration X
15. Removal and Disposal of Hazardous Waste X
</TABLE>
Siemens Westinghouse Proprietary Information AES Ironwood Project
January 13, 1999 Amendment No. 1
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Amendment No. 3 to Registration Statement No.
333-91391 of AES Ironwood, L.L.C. on Form S-4 of our report dated January 31,
2000 appearing in the Prospectus, which is a part of such Registration
Statement, and to the references to us under the headings "Selected Financial
Data" and "Experts" in such Prospectus.
/s/ Deloitte & Touche LLP
McLean, Virginia
February 28, 2000
