<PAGE>
EXHIBIT 10.24
CONFIDENTIAL
LONG TERM PARTS & LONG TERM SERVICE CONTRACT
Between
GENERAL ELECTRIC INTERNATIONAL INC.
(Seller)
and
TENASKA, INC.
(Buyer)
DATED: June 24, 1999
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.
<PAGE>
CONFIDENTIAL
TABLE OF CONTENTS
1. SELLER SCOPE & SERVICES.................................................1
2. BUYER RESPONSIBILITIES..................................................1
3. PRICE...................................................................1
4. COOPERATION.............................................................2
5. GOVERNING LAW...........................................................2
6. CONTRACT DOCUMENTS......................................................2
7. CONTRACT TERM...........................................................2
8. OPTION FOR ADDITIONAL TERMS.............................................2
A..........................................................................A-1
APPENDIX A - SPECIAL TERMS AND CONDITIONS..................................A-1
PART 1 - DEFINITIONS.....................................................A-1
Applicable Insurance Policies..........................................A-1
Applicable Laws........................................................A-1
Applicable Permits.....................................................A-1
Applicable Warranties..................................................A-1
Assigned Technical Advisor.............................................A-1
Assumptions............................................................A-1
Assumption Violations..................................................A-2
Buyer..................................................................A-2
Contract Price.........................................................A-2
Covered Unit(s)........................................................A-2
Engineering Study/Inspection/Test......................................A-2
Excusable Delay........................................................A-2
Extended Term..........................................................A-2
Extra Work.............................................................A-2
Facility...............................................................A-2
Final Term.............................................................A-2
Good Turbine Practice..................................................A-2
Governmental Instrumentality...........................................A-3
Hot Gas Path Inspection................................................A-3
Initial Spare Parts....................................................A-3
Initial Operational Spare Parts........................................A-3
Initial Term...........................................................A-3
In-service Failure....................................................A-3
i
<PAGE>
CONFIDENTIAL
Insolvent..............................................................A-3
Major Inspection.......................................................A-3
Non-Scope Items........................................................A-4
Objectives.............................................................A-4
Operational Spares.....................................................A-4
Outage.................................................................A-4
Outage Interval........................................................A-4
Outage Time............................................................A-4
Parts..................................................................A-4
Performance Start Date.................................................A-4
Planned Maintenance....................................................A-4
Power Purchase Agreement...............................................A-5
Prudent Electric Practice..............................................A-5
Routine Maintenance....................................................A-5
Services...............................................................A-6
Site...................................................................A-6
Substantial Completion.................................................A-6
Technical Advisory Services............................................A-6
Unit...................................................................A-6
Unplanned Maintenance..................................................A-6
PART 2 - COVERED UNIT(S).................................................A-7
2.1 Covered Units.....................................................A-7
2.2 Associated Auxiliary Systems......................................A-7
PART 3 - SELLER PARTS AND SERVICES SCOPE.................................A-8
3.1 Seller's Scope of Work............................................A-8
3.2 Planned Maintenance...............................................A-8
3.3 Unplanned Maintenance.............................................A-9
3.4 Extra Work.......................................................A-10
3.5 Assigned Technical Advisor.......................................A-10
3.6 Monitoring and Diagnostics Systems...............................A-10
3.7 Initial Spare Parts..............................................A-10
3.8 Initial Operational Spare Parts..................................A-10
3.9 Heavy Duty Crane.................................................A-11
3.10 Information on Technical Issues................................A-11
PART 4 - BUYER RESPONSIBILITIES.........................................A-12
4.1 General..........................................................A-12
4.2 Site Obligations.................................................A-12
PART 5 -DELIVERY, TITLE TRANSFER, INVENTORY UTILIZATION................A-15
5.1 Delivery.........................................................A-15
5.2 Passage of Title.................................................A-15
5.3 Inventory Utilization............................................A-15
5.4 Repair Services Logistics........................................A-15
PART 6 - PRICE AND PAYMENT TERMS........................................A-17
6.1 Mobilization Payment.............................................A-17
6.2. Periodic Payments...............................................A-17
6.2.1 Monthly Payments.............................................A-17
6.2.2 Factored Fired Hours Adjustment..............................A-17
6.2.3 Factored Starts Adjustment...................................A-18
6.2.4 Unplanned Maintenance Adjustment.............................A-19
ii
<PAGE>
CONFIDENTIAL
6.3 Escalation.......................................................A-20
6.4 Unplanned Maintenance............................................A-21
6.5 Extra Work.......................................................A-21
6.6 Initial Spare Parts Price.........................................A-21
6.7 Initial and Replenishment Operational Spare Parts Price...........A-21
6.8 Method of Payment................................................A-21
PART 7 - WARRANTY AND LIMITATION OF LIABILITY...........................A-22
7.1 Warranty.........................................................A-22
7.2 Limitation of Liability..........................................A-23
PART 8 - INSURANCE REQUIREMENTS.........................................A-25
8.1 Seller's Insurance...............................................A-25
8.2 Buyer's Insurance................................................A-25
8.3 Failure to Maintain Insurance....................................A-26
PART 9 - TERMINATION....................................................A-27
9.1 Termination......................................................A-27
9.1.1 Termination for Convenience..................................A-27
9.1.2 Termination For Material Breach..............................A-27
9.1.3 Termination by Buyer for Cancellation of Power Purchase
Agreement....................................................A-27
9.1.4 Termination Price Adjustment.................................A-28
PART 10 - NOTICES.......................................................A-29
10. Notices..........................................................A-29
PART 11 - AVAILABILITY GUARANTY AND LIQUIDATED DAMAGES..................A-30
11.1 Definitions.....................................................A-30
Availability Adjustment.............................................A-30
Availability Percentage.............................................A-30
Chargeable Event....................................................A-30
Contract Capacity...................................................A-30
Date of PPA Commercial Operation....................................A-30
Delivered Energy....................................................A-30
Derating............................................................A-30
Energy Request......................................................A-31
MW..................................................................A-31
MWh.................................................................A-31
Operating Term......................................................A-31
Plant...............................................................A-31
PPA Force Majeure...................................................A-31
PPA Prudent Utility Practice........................................A-31
PPA Year............................................................A-32
Requested Energy....................................................A-32
Scheduled Outages...................................................A-32
Summer Peak Hours...................................................A-32
11.2 Availability Guarantees.........................................A-32
11.3 Calculation of Availability Percentage..........................A-32
11.4 Calculation of Availability Adjustment..........................A-33
11.5 Payment of Availability Adjustment..............................A-33
11.6 Availability Information........................................A-33
11.7 Limitations.....................................................A-34
11.8 Other Conditions................................................A-34
iii
<PAGE>
CONFIDENTIAL
B..........................................................................B-1
APPENDIX B - GENERAL TERMS AND CONDITIONS..................................B-1
1. Supplemental Terms...................................................B-1
1.1 Non Payment.......................................................B-1
1.2 Interest..........................................................B-1
2. Taxes and Duties....................................................B-1
3. Inspection and Factory Tests........................................B-2
4. Excusable Delay.....................................................B-2
5. Compliance with Laws, Codes and Standards...........................B-3
6. Changes.............................................................B-3
7. Indemnification.....................................................B-4
8. Dispute Resolution...................................................B-5
9. Proprietary Information.............................................B-6
10. Health and Safety Matters..........................................B-6
11. Differing Site Conditions; Hazardous Materials......................B-7
12. General Clauses....................................................B-9
iv
<PAGE>
CONFIDENTIAL
This LONG TERM PARTS & LONG TERM SERVICE CONTRACT (the "Contract") is made
and effective this 24th day of June, 1999 (Effective Date) by and between
GENERAL ELECTRIC INTERNATIONAL INC., a Delaware corporation ("Seller") and
TENASKA INC., a Delaware corporation ("Buyer"). (Buyer and Seller are
referred to individually herein as a "Party" and collectively as the
"Parties.") Unless otherwise defined, capitalized terms used in this
Agreement shall have the meaning set forth in Appendix A, Part 1,
Definitions.)
RECITALS
Seller is engaged in the business of manufacturing, selling and installing
various kinds of power plant equipment and parts and providing technical
advice and maintenance programs in support thereof; and
Buyer and General Electric Company, an affiliate of Seller, intend to
enter into a Turbine Purchase Agreement (the "Turbine Purchase
Agreement"), pursuant to which General Electric Company will manufacture,
sell and install six gas turbines with associated generators and specified
auxiliaries, each of which shall be a "Covered Unit" as further defined in
this Contract.
Buyer will operate the Covered Units at the Facility.
Buyer desires to have Seller provide long term parts and services for the
Covered Units in accordance with the terms of this Contract and Seller has
agreed to supply such parts and services in accordance with the terms of
this Contract.
NOW, THEREFORE, in consideration of the premises to this Agreement, Buyer
and Seller, intending to be legally bound, agree as follows:
1. SELLER SCOPE & SERVICES
During the term of this Contract, Seller shall perform Planned Maintenance
and Unplanned Maintenance of the Covered Unit(s), as is more fully
identified and described in Appendix A, Part 3.
2. BUYER RESPONSIBILITIES
Buyer shall perform, or cause to be performed, Routine Maintenance and
operate the Covered Unit(s), and supply equipment and services, as is more
fully described in Appendix A, Part 4.
3. PRICE
Buyer shall pay Seller the price for Planned Maintenance and Unplanned
Maintenance in accordance with the price and payment terms set forth in
Appendix A, Part 6.
1
<PAGE>
CONFIDENTIAL
4. COOPERATION
Seller and the Buyer shall cooperate, as described in this Contract, to
further the goal of maintaining the Covered Unit(s) to achieve the
Objectives.
5. GOVERNING LAW
This Contract shall be construed and interpreted in accordance with the
laws of the State of New York, excluding their conflict of laws provisions
and the laws of the United States applicable to the transactions set forth
in this Contract.
6. CONTRACT DOCUMENTS
The following documents shall comprise the Contract and shall together be
referred to as the "Contract" or the "Contract Documents"
This Contract Agreement Form (the "Contract Agreement Form")
Appendix A: Special Terms and Conditions
Appendix B: General Terms and Conditions
Appendix C: Planned Maintenance Workscope for the Covered Units
Appendix D: GEI 41040F - Fuel Gases for Combustion in Heavy Gas
Turbines
Appendix E: GEI 41047H - Gas Turbine Liquid Fuel Specification
Appendix F: GEK 101944 - Requirements for Water/Steam Purity in
Gas Turbines
Appendix G: Reserved
Appendix H: M&D System Conditions
Appendix I: Parts and Services Rates
Appendix J: Initial Operational Spare Parts
Appendix K: Initial Spare Parts
Appendix L: Technical Advisor Responsibilities
Appendix M: Redacted Power Purchase Agreement
7. CONTRACT TERM
This Contract shall have a term ("Initial Term") for each Unit expiring
upon the earlier of (a) completion of the first Major Inspection for such
Unit or (b) thirty (30) years after the Performance Start Date for such
Unit, unless Buyer shall elect to extend the term of this Contract for all
or part of the Units as set forth in Section 8.
8. OPTION FOR ADDITIONAL TERMS
Buyer, at its option, may elect to extend the term of this Contract for
each Unit individually by delivery of written notice to Seller not later
than six (6) months prior to the date scheduled for the first Major
Inspection of such Covered Unit, but in no event shall any such election
be made more than twenty-four (24) years after the Performance Start Date
for such Unit. If Buyer makes the election to extend the term of this
Contract with respect to a Unit, the term shall be extended until the
completion of the second Major Inspection for such Covered Unit ("Extended
Term"), but not more than thirty (30) years after the Performance Start
Date for such Unit, and upon electing an Extended Term for the first Unit,
Buyer shall purchase from Seller the additional
2
<PAGE>
CONFIDENTIAL
Initial Spares described in Appendix __ at the prices described in such
Appendix. In the event that this Contract is scheduled to expire with
respect to a Covered Unit at the end of the Initial Term or the Extended
Term, as the case may be, because of the passage of thirty (30) years
after the Performance Start Date for such Unit and at a time when Buyer
has not received the first or second Major Inspection for such Covered
Unit, as applicable, then Buyer shall have the option, to be exercised in
writing not later than three (3) months prior to the date which is thirty
(30) years after the Performance Start Date for such Unit, to extend such
term for such Unit for an additional period ("Final Term") until the
completion of the next Hot Gas Path Inspection or Major Inspection for
such Unit, whichever occurs first; provided that if the Final Term expires
upon the completion of a Hot Gas Path Inspection and the first Major
Inspection has not yet been completed for such Unit, Buyer shall have the
option, to be exercised in writing not later than three (3) months prior
to the completion of the Hot Gas Path Inspection, to extend the Final Term
for such Unit until the completion of the first Major Inspection for such
Unit.
This Long Term Parts & Long Term Services Contract is signed by the
Parties' authorized representatives on the date first stated above.
GENERAL ELECTRIC TENASKA, INC.
INTERNATIONAL INC.
By: /s/_________________________ By: /s/________________________
Name: Kevin C. Walsh Name: Michael C. Lebens
Title: General Mgr - Operations Title: Vice President
3
<PAGE>
<PAGE>
CONFIDENTIAL
APPENDIX A
SPECIAL TERMS AND CONDITIONS
PART 1
DEFINITIONS
The following terms shall have the meaning set forth below when used in
this Contract.
"Applicable Insurance Policies" means all policies of insurance procured
or obtained by Seller in accordance with the Contract and the provisions
of those insurance policies procured or to be procured by Buyer in
accordance with the Contract, copies of which Buyer has delivered to
Seller prior to the Performance Start Date for the first Unit or
thereafter.
"Applicable Laws" means all laws, statutes, and ordinances, all judgments,
decrees, injunctions, writs and orders of any court, governmental agency
or authority applicable to, and all rules, regulations, orders and
interpretations of any Governmental Instrumentality or other body having
jurisdiction over, the Facility or the Site, provision of electricity to
the interconnection points of the utilities designated to receive electric
power from the Facility, performance of the Services to be performed
hereunder, or operation of the Facility as may be in effect from time to
time.
"Applicable Permits" means all permits obtained by Seller in connection
with the performance of the Services, and the provisions of those certain
environmental permits which Buyer is required to comply with in connection
with the operation of the Facility, copies of which Buyer has delivered to
Seller prior to the Performance Start Date for the first Unit or
thereafter.
"Applicable Warranties" means all warranties received by Buyer, including
all manufacturers' warranties, in connection with the sale and
installation of the Covered Units.
"Assigned Technical Advisor" shall mean Seller's technical advisor
assigned to Buyer under Part 3.5.
"Assumptions" shall mean the following operating conditions:
o Peak Load Operation: None.
o Fuel: Natural Gas per the fuel specification attached hereto as Appendix
D, and Distillate Oil per the liquid fuel specification attached hereto
as Appendix E.
o Water: Per the water specification attached hereto as Appendix F.
A-1
<PAGE>
CONFIDENTIAL
o Buyer's performance of its obligations in Part 4.
o Fast Load Starts: None.
"Assumption Violations" means one or more of the Assumptions has been
violated pursuant to the following criteria:
o Peak Load Operation: in excess of 0 hours per year.
o Using fuel or water which is not in conformance with the relevant
specifications or recommendations attached to this Contract as Appendices
D, E, F and G.
o Buyer, or any third party engaged by Buyer to perform ongoing operation of
the Facility, fails to perform any of Buyer's material obligations in Part
4.
o Fast Load Starts: in excess of 0 per year.
"Buyer" means Tenaska, Inc., a Delaware corporation and its permitted
successors and assigns.
"Contract Price" means the total price to be paid by Buyer to Seller under
this Contract.
"Covered Unit(s)" means Buyer's Unit(s) identified in Part 2 which are
located at the Facility.
"Engineering Study/Inspection/Test" means any system design and/or
analysis of equipment or systems to be performed by Seller using
competent, experienced personnel using special techniques, instruments or
devices with the objective of reporting opinions or recommendations
related to the current condition and future serviceability of the
equipment or system.
"Excusable Delay" means any excusable event described in Appendix B,
Article 4.1.
"Extended Term" has the meaning set forth in Section 8 of this Contract.
"Extra Work" means any workscope which Seller performs under Part 3.4.
"Facility" means the plant, station or facility in which the Covered
Unit(s) is located.
"Final Term" has the meaning set forth in Section 8 of this Contract.
"Good Turbine Practice" means those practices, methods, techniques and
standards, as changed from time to time, that are generally accepted in
the maintenance and repair of gas turbines of similar size, service,
design life and type as the Covered Units, in an efficient, reliable and
economical manner, as required by Applicable Laws and Applicable
Warranties and as required for the safety of persons and property. Good
Turbine Practice is not intended to be limited to the optimum practices or
methods to the exclusion of all others, but rather to be a spectrum of
reasonable and prudent practices and
A-2
<PAGE>
CONFIDENTIAL
methods. In applying the standard to any matter under this Contract,
equitable consideration should be given to the circumstances, requirements
and obligations of each of the Parties.
"Governmental Instrumentality" means any governmental authority, agency or
court (federal, state, county, municipal, local or other) that has lawful
jurisdiction over the Facility, the Site, or the Services or any part
thereof.
"Hot Gas Path Inspection" means an inspection of a Covered Unit (including
the repair or replacement of necessary Parts and the performance of
necessary Services), which is recommended by the manufacturer to be
performed at approximately 800 and 1600 Factored Starts for the Unit and
at approximately 800 and 1600 Factored Fired Starts after a Major
Inspection for the Unit as further defined in the Appendix C to this
Contract and is one type of Planned Maintenance.
"Initial Spare Parts" means the initial supply of Parts which Seller will
deliver to Buyer under Part 3.7 as specifically identified in Appendix K.
"Initial Operational Spare Parts" means the initial supply of operational
spare parts which Seller will deliver to Buyer under Part 3.8 as
specifically identified in Appendix J.
"Initial Term" has the meaning set forth in Section 7 of this Contract.
"In-service Failure" means the collapse or breaking of a component of a
Covered Unit so that such component can no longer fulfill its purpose and
shall not include wear and tear of a component even if such wear and tear
is considered abnormal.
"Insolvent" means that:
(i) a Party makes an assignment for the benefit of creditors, or petitions
or applies for or arranges for the appointment of a trustee, liquidator or
receiver, or commences any proceeding relating to itself under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of the country under which the
insolvent Party is organized, now or hereafter in effect (collectively
"Bankruptcy Laws"), or shall be adjudicated bankrupt or insolvent in such
country; or (ii) a Party gives its approval of, consent to or acquiescence
in any of the following: the filing of a petition or application for the
appointment of a trustee, liquidator or receiver against that Party; the
commencement of any proceeding under any Bankruptcy Laws against that
Party; or the entry of an order appointing any trustee, liquidator or
receiver.
"Major Inspection" means a comprehensive inspection of a Covered Unit
(including the repair or replacement of necessary Parts and the
performance of necessary Services), which is recommended by the
manufacturer to be performed at intervals of approximately 2400 Factored
Starts for the Unit, as further defined in the Appendix C to this Contract
and is one type of Planned Maintenance.
A-3
<PAGE>
CONFIDENTIAL
"Non-Scope Items" means the parts and components outside the Covered
Unit(s).
"Objectives" means the following objectives of both Buyer and Seller in
performing their obligations under this Contract:
o maximizing the capability of the Covered Units to operate in a revenue
earning capacity under the Power Purchase Agreement at the originally
designed output and heat rates, subject to normal degradation;
o minimizing Outage Time and optimizing the Outage Interval with the longest
achievable safe interval; and
o minimizing the possibility of Unplanned Maintenance.
"Operational Spares" means spare parts identified in Appendix C which
Buyer is responsible to maintain at the Site.
"Outage" means removal of a Covered Unit from electric or power generation
service.
"Outage Interval" means the period of time between Outages.
"Outage Time" means the duration of an Outage.
"Parts" means new, repaired or refurbished parts, equipment, materials,
supplies, components and other goods furnished by Seller, or its
subcontractors or suppliers under this Contract, for the Covered Units and
includes the Initial Spare Parts.
"Performance Start Date" means, for a Covered Unit, the date on which
Substantial Completion is achieved for such Unit.
"Planned Maintenance" means, with respect to the Covered Units, periodic
inspection, testing, repair, and/or overhaul and/or replacement of
components specified in Appendix C in accordance with the equipment
manufacturers' and/or designers' recommendations and/or Prudent Electrical
Practices, whenever the need for such arises, but not to include Services
performed or Parts provided in the following circumstances:
(i) to remedy the In-Service Failure of a component of a Covered Unit
discovered during monitoring of the Covered Unit, during an Outage, or
during Routine Maintenance of a Covered Unit, provided that an In-service
Failure of a component of a Covered Unit which is discovered during a
Planned Maintenance Outage and would normally be repaired or replaced as a
part of a Planned Maintenance shall be repaired or replaced as a part of
such Planned Maintenance, excluding any collateral damage caused by such
In-Service Failure which shall be treated as Unplanned Maintenance;
(ii) to remedy damage to the Covered Units arising from Excusable Delay;
A-4
<PAGE>
CONFIDENTIAL
(iii) to remedy damage to the Covered Unit as a result of the improper
operation of other equipment which adversely affects the Covered Units;
and
(iv) to remedy damage to the Covered Units arising from Assumption
Violations.
Subject to the intentions of the parties regarding the possible performance of
Planned Maintenance during an Unplanned Maintenance, as set forth in Part 3.3,
Planned Maintenance, Unplanned Maintenance, Routine Maintenance and Extra Work
are mutually exclusive terms and any work defined as included in one of these
categories shall not at the same time be considered to be
included in any of the three other categories.
"Power Purchase Agreement" means that certain agreement which Buyer, or an
affiliate of Buyer, intends to enter into with a third party ("Power Customer")
for the sale of power from the Facility, a redacted copy of which will be
delivered to Seller within thirty (30) days after execution of such Power
Purchase Agreement by Buyer or an affiliate of Buyer. Upon delivery of such
redacted copy of the Power Purchase Agreement to Seller it will automatically
and without further action constitute Appendix M to this Contract.
"Prudent Electric Practice" means any of the practices, methods and acts engaged
in or approved by a significant portion of the independent power industry from
time to time or any of the practices, methods and acts which, in the exercise of
reasonable judgment in light of the facts known (or which should have been
known) at the time the decision was made, would have been expected to accomplish
the desired results at the lowest reasonable cost consistent with good business
practices, taking into account (without limitation) such factors as reliability,
safety and expedition. Prudent Electric Practice is not intended to be limited
to the optimum practice, method or act to the exclusion of all others, but
rather to be a spectrum of possible practices, methods or acts having due regard
for, among other things, manufacturers' warranties and other contractual
obligations, the requirements or guidance of governmental agencies of competent
jurisdiction, requirements of insurers, and the requirements of this Contract.
In applying the standard to any matter under this Contract, equitable
consideration should be given to the circumstances, requirements and obligations
of each of the Parties.
"Routine Maintenance" means minor maintenance of a preventive or repair nature,
that is performed periodically by Buyer or a third party retained by Buyer, to
maintain equipment in working order on a day-to-day basis without the need for
an Outage, including but not limited to daily operator inspection, lubrication,
calibration, adjustment, minor leak repair, provision of fluids, greases, and
resins, cleaning, purchasing and restocking of Operational Spares, filters
(including inlet air filters), strainers and cartridges, maintenance or
replacement of sensors, fuses, thermocouples, gauges, switches, and light bulbs,
and other similar preventive, routine or minor work.
A-5
<PAGE>
CONFIDENTIAL
"Services" means such planning, management, Technical Advisory Services, Repair
Services, Engineering Study/Inspection/Test, labor and tools necessary to
install the Parts and to disassemble, assemble, modify, repair, start-up and/or
maintain the Covered Units, in connection with Planned Maintenance and Unplanned
Maintenance which Seller is required to provide under Appendix C and Extra Work.
The definition of Services does not include the supply of labor for which Buyer
is responsible under Part 4 and Appendix C. All Services will be performed by
Seller in accordance with Good Turbine Practices.
"Site" means the real property upon which the Facility is located.
"Substantial Completion" of a Unit shall mean the achievement by such Unit of
each of the Liquidated Damage Performance Guarantees, Performance Guarantees,
Demonstration Test Requirements and the Availability Test Requirements, as
defined in and in accordance with the terms of the Turbine Purchase Agreement or
Buyer's written waiver of such guarantee or requirement, whichever occurs first.
"Technical Advisory Services" or "Field Engineering Services" means technical
advice and counsel from Technical Advisors or Field Engineers provided by Seller
based on Seller's current engineering, manufacturing, installation and operation
practices as applicable to the Covered Units and the Parts. To the extent
specified in this Contract, such services may also include testing, adjustment,
programming and other similar services. Unless otherwise specified in this
Contract, "Technical Advisory Services" / "Field Engineering Services" do not
include supervision or management of Buyer's employees, agents, or other
contractors.
"Unit" means one gas turbine with its associated generator and specified
auxiliaries.
"Unplanned Maintenance" means maintenance other than Planned Maintenance,
Routine Maintenance and Extra Work, including Services performed by Seller and
Parts supplied by Seller in the following circumstances:
(i) to remedy the In-Service Failure of a component of a Covered Unit
discovered during monitoring of the Covered Unit, during an Outage, or
during Routine Maintenance of a Covered Unit, provided that an
In-service Failure of a component of a Covered Unit which is discovered
during a Planned Maintenance Outage and would normally be repaired or
replaced as a part of a Planned Maintenance shall be repaired or
replaced as a part of such Planned Maintenance, excluding any
collateral damage caused by such In-Service Failure which shall be
treated as Unplanned Maintenance;
(ii) to remedy damage to the Covered Units arising from Excusable Delay;
(iii) to remedy damage to the Covered Unit as a result of the improper
operation of other equipment which adversely affects the Covered Units;
and
(iv) to remedy damage to the Covered Units arising from Assumption Violations.
A-6
<PAGE>
CONFIDENTIAL
PART 2
COVERED UNIT(S)
2.1 COVERED UNITS
The Covered Units which are included within this Contract are:
Six (6) PG7241FA gas turbine-generator units, as referenced in General Electric
IPS No. 80905 and the associated auxiliary systems listed below in Part 2.2.
2.2 ASSOCIATED AUXILIARY SYSTEMS
1. Accessory Module
2. Water Injection Forwarding Skid
3. Gas Fuel Skid
4. Compressor Water Wash Skid
5. Liquid Fuel Forwarding Skid
6. Interconnection Module
7. Air Process Skid
8. Packaged Electrical Control Cab
9. MK V Control System
10. Gas Turbine CO2 Fire Protection
A-7
<PAGE>
CONFIDENTIAL
PART 3
SELLER PARTS AND SERVICES SCOPE
3.1 SELLER'S SCOPE OF WORK.
Seller's Scope of Work under this Contract shall include the following
matters:
o Planned Maintenance in accordance with the terms of Part 3.2;
o Unplanned Maintenance in accordance with the terms of Part 3.3;
o Extra Work, as mutually agreed, in accordance with the terms of Part
3.4;
o An Assigned Technical Advisor in accordance with the terms of Part 3.5;
o Monitoring and Diagnostics in accordance with the terms of Part 3.6;
o Initial Spare Parts in accordance with the terms of Part 3.7;
o Initial Operational Spare Parts in accordance with the terms of Part
3.8;
o Heavy duty crane in accordance with the terms of Part 3.9.
3.2 PLANNED MAINTENANCE.
From the Performance Start Date for a Unit through the term of this
Contract for such Unit, Seller shall provide Parts and Services necessary
for the Planned Maintenance of the Covered Unit. The scope of Planned
Maintenance for the Covered Units is set forth in Appendix C.
At mutually agreed times, Seller's representatives and Buyer's
representatives shall meet to discuss maintenance planning and related
Outages for the following calendar year. The scheduling of Planned
Maintenance inspections and related Outages will be performed so as to
best achieve the Objectives. Seller shall obtain the consent of Buyer
prior to the commencement of each Planned Maintenance inspection, which
shall be timed and conducted so as not to unreasonably interfere with
Buyer's operation the Facility to maximize revenue under the Power
Purchase Agreement. In the event that Buyer, in its sole determination,
elects to request, pursuant to Section 5.01(b) of the Power Purchase
Agreement, payment for additional reasonable costs incurred as a result of
a request by Power Customer for an earlier Outage than recommended by
Buyer to Power Customer, Seller shall provide an itemized summary of
additional costs which would be incurred by Seller as a result of such
earlier Outage. Buyer will submit the summary , along with any other
appropriate costs, to Power Customer. Buyer shall reimburse Seller, but
only to the extent that Buyer receives reimbursement from Power Customer,
for Seller's costs. Once commenced, a Planned Maintenance inspection shall
be continuously performed and completed without delay. If Buyer materially
delays the beginning of a Planned Maintenance inspection beyond the
service intervals recommended by Seller, Buyer shall be responsible for
any additional direct costs reasonably incurred by Seller, including any
payments arising under Part 11, as a result of such delay. In performing
Planned Maintenance Seller shall, at no additional cost to Buyer, to the
extent reasonably possible without incurring significant additional costs,
utilize those technologies, materials and methods which may be developed
subsequent to the date of this Contract which would enhance the
satisfaction of the Objectives. Seller shall apprise Buyer of the
utilization of
A-8
<PAGE>
CONFIDENTIAL
such technologies, materials and methods prior to such use. Seller shall
be responsible for the use of such technologies, materials and methods
pursuant to the terms of this Contract.
Inspection intervals and the Planned Maintenance program will be adjusted
in accordance with Seller's or the manufacturer's reasonable
recommendations to account for variations in the operation of the Covered
Units. Planned Maintenance intervals will be adjusted if diagnostics or
monitoring indicates the need for performance of Planned Maintenance
earlier or later than anticipated. When Buyer and Seller have agreed that
a Planned Maintenance inspection will be performed during a given time
period, detailed scheduling of the inspection work scopes will be proposed
by Seller at a pre-Outage meeting approximately six (6) months prior to
the anticipated start of that Planned Maintenance inspection. A
post-Outage meeting will be scheduled after completion of each Planned
Maintenance inspection for presentation and discussion of the inspection
reports.
3.3 UNPLANNED MAINTENANCE.
From the Performance Start Date for each Unit through the term of this
Contract for such Unit, Seller shall provide Parts and Services for
Unplanned Maintenance of the Covered Unit, provided that Buyer or third
parties retained by Buyer (including the operations and maintenance
contractor) shall not be precluded from the performance of Unplanned
Maintenance such as the installation of Operational Spares or the repair
or replacement of components not normally anticipated to be repaired or
replaced as a part of Planned Maintenance if such action by Buyer or third
parties retained by Buyer would substantially reduce the Outage interval
and would be performed under the technical supervision of Seller. It is
understood that the warranties set forth in Part 7.1 shall not apply to
services performed by Buyer or third parties retained by Buyer. If the
Covered Units require Unplanned Maintenance during the term of this
Contract, Buyer shall promptly notify Seller's Assigned Technical Advisor
in writing and as soon as reasonably possible make the Covered Units
available to Seller. Seller shall perform Unplanned Maintenance to correct
any defect by (i) performing necessary Services, (ii) repairing and
re-installing defective components of the Covered Units and/or (iii)
delivering necessary replacement Parts in accordance with Part 5.1.1 and
installing such Parts. In connection with the performance of any Unplanned
Maintenance, Seller and Buyer shall mutually agree upon the Parts, Repairs
and Services which are to be provided. Whenever reasonably possible
Unplanned Maintenance shall be handled and treated by Seller and Buyer as
a Planned Maintenance inspection and Seller shall use its reasonable best
efforts to provide Parts, Services and Repairs as a part of such
inspection. If it is reasonably possible, as a part of an Unplanned
Maintenance, that a Planned Maintenance inspection can be completed, and
permanently eliminated, not just postponed, Buyer shall only be
responsible for the payment of charges for Extra Work, overtime beyond
that anticipated in the Planned Maintenance, expediting fees, additional
costs incurred due to the lack of ability to plan, and for any Parts,
repairs and Services which are beyond the workscope of such Planned
Maintenance inspection.
A-9
<PAGE>
CONFIDENTIAL
Buyer shall, at Buyer's cost make the affected components of the Covered
Units available to Seller at the Site if such components are reasonably
capable of being repaired at the Site, or at the Repair Facilities in
accordance with Part 5.4 if Seller reasonably determines that such repair
cannot be made at the Site. Seller shall not be responsible for removal or
replacement of systems, structures or other parts of Buyer's Facility. All
decontamination work arising as a result of the contamination of any
Covered Unit(s) by Hazardous Materials (other than contamination caused by
Seller or its agents) shall be performed by Buyer, at Buyer's expense.
Seller shall be notified of and may be represented at all tests performed
by Buyer that may be made regarding Services performed under this
Agreement.
3.4 EXTRA WORK.
Extra Work shall mean Parts provided and Services performed by Seller,
which are provided, as mutually agreed upon by Buyer and Seller to (a)
repair or replace Non-Scope Items or (b) perform conversion, modifications
and uprates. Extra Work shall be performed at Seller's Parts and Services
prices, rates and terms in effect at the time of the performance of the
Extra Work, unless otherwise specifically agreed in writing prior to
beginning such Extra Work. Buyer shall be under no obligation to use
Seller for the performance of Extra Work.
3.5 ASSIGNED TECHNICAL ADVISOR.
From the Performance Start Date for a Unit through the term of this
Contract for such Unit, at no additional charge to Buyer, Seller shall
provide an assigned Technical Advisor for the Site who shall coordinate
Planned Maintenance and Unplanned Maintenance on such Unit with Buyer and
make periodic (at least monthly) Site visits. Seller shall provide
adequate backup personnel to perform the duties of the Technical Advisor
without material delay when the assigned individual is temporarily
unavailable. The workscope for the Assigned Technical Advisor is set forth
in Appendix L of this Contract.
3.6 MONITORING AND DIAGNOSTICS SYSTEMS.
During the term of this Contract, at no additional charge to Buyer, Seller
shall utilize Seller's M&D System to monitor the Covered Units in
accordance with the terms of Appendix H. Monitoring and Diagnostics System
("M&D System") means a system used by Seller for monitoring and
diagnostics of turbine-generator equipment, consisting of hardware,
software, and the Power Answer Center (by whatever designation) providing
real time monitoring, communication, and assessment of equipment
condition, problem reporting, and corrective action recommendations.
3.7 INITIAL SPARE PARTS.
Seller shall provide the Initial Spare Parts listed in Appendix K, FOB at
Buyer's Facility.
3.8 INITIAL OPERATIONAL SPARE PARTS.
A-10
<PAGE>
CONFIDENTIAL
Seller shall provide the Initial Operational Spare Parts listed in
Appendix J, FOB at Buyer's Facility.
3.9 HEAVY DUTY CRANE. At the pre-Outage meeting held prior to each Planned
Maintenance and as soon as possible prior to commencement of any Unplanned
Maintenance, Buyer shall notify Seller if Buyer desires to have Seller
provide any cranes which are to be used in connection with such
maintenance. Any cranes which Seller is requested to supply shall be
provided by Seller and operated during such maintenance under the control
and direction of Seller. Buyer shall pay to Seller, as an additional
charge for such crane, Seller's direct out of pocket cost for leasing such
crane plus an additional amount of ten percent (10%). In obtaining any
cranes for use under this Contract, Seller shall obtain competitive bids
in order to assure that such cranes are provided at a reasonable cost.
Seller shall be responsible for all actions associated with the use of the
crane under this Agreement. Any charge for cranes which relates to Planned
Maintenance will be invoiced as one lump sum amount. Seller will provide
crane services complete with a crane operator.
3.10 INFORMATION ON TECHNICAL ISSUES. During the term of this Contract,
Seller shall promptly notify Buyer, in writing, of the discovery by Seller
of any maintenance or reliability issues or problems with the Covered
Units which could materially adversely affect the availability or
performance of the Covered Units, and shall, as soon as they become
available, provide Buyer with copies of any technical materials published
by Seller relating to the correction of such issues or problems.
A-11
<PAGE>
CONFIDENTIAL
PART 4
BUYER RESPONSIBILITIES
4.1 GENERAL.
Buyer shall perform Routine Maintenance and operate the Covered Units and
the Facility using the proper lubricants, fuel and water which comply with
the attached specifications, all in accordance with the manufacturers'
and/or designers' recommendations and Prudent Electrical Practices. Buyer
shall fulfill all of Buyer's responsibilities and obligations under this
Contract on a timely basis to meet the requirements of this Contract.
4.2 SITE OBLIGATIONS
During the term of this Contract, Buyer shall provide, and/or insure the
availability of, in a timely manner, the following, at no cost to Seller:
1. Buyer's designated representative(s) to consult and coordinate with
Seller's personnel on matters related to Seller's scope of work described
in Part 3, including, but not limited to:
(i) advance planning, scheduling and performance of Planned Maintenance
starting with a pre-Outage meeting approximately six (6) months prior to
the start of each inspection, during which time previous inspection
results will be reviewed with Seller's representatives, (ii) post Outage
meetings within one month of the end of each Planned Maintenance
inspection and (iii) coordinating operator activities with Seller during
periods of Planned Maintenance and Unplanned Maintenance.
Buyer's representative will be available, by telephone or in person, to
such an extent as not to unreasonably delay performance of Seller's scope
of work and shall have the authority to make Buyer's warehousing and shop
facilities available to Seller's personnel. Buyer's representative shall
have the responsibility of coordinating activities between Seller and
other contractors at the Facility which are not under Seller's control.
2. Seller's personnel shall be afforded prompt access to the Buyer
warehousing and shop facilities, on an as available basis, as necessary
for the successful completion of Seller's scope of work. Buyer shall also
assure free ingress and egress from the Facility for all authorized or
required Seller personnel.
3. Buyer shall render such operator level support as may be reasonably
required by Seller in the performance of Seller's obligations, such as:
o making the Covered Unit(s) available for performance of Seller's Planned
Maintenance and Unplanned Maintenance obligations and otherwise assisting
Seller in pre-job activities and mobilization,
A-12
<PAGE>
CONFIDENTIAL
o taking such emergency measures at the direction of Seller's Assigned
Technical Advisor as are reasonably appropriate, in accordance with
Prudent Electric Practice, to minimize damage which may result in or from
the In-service Failure of a component,
o directing its instrument technicians to remove and install electrical
components and instruments at the direction of Seller's Assigned Technical
advisor;
o performing instrumentation calibrations.
4. Any special tools which were supplied with the Covered Units.
5. Operational Spares, parts (other than Parts Seller is required to
provide under this Contract) required to perform Routine Maintenance,
Planned Maintenance and Unplanned Maintenance; miscellaneous materials
(e.g., bolts, nuts, gaskets, steel plates, consumables (other than
inspection consumables provided by Seller pursuant to Appendix I),
lubricants, hydraulic oil, etc.) required to perform Routine Maintenance
and Unplanned Maintenance.
Buyer shall maintain Operational Spare Parts at the Site during the term
of this Contract.
6. Compressed air and all Site utilities in the amounts, pressures,
voltages, etc. required to operate the Covered Units and perform Planned
Maintenance, Unplanned Maintenance and Routine Maintenance, including
adequate lighting for night shift work.
7. Fuel Monitoring, including maintenance of fuel records, and the
provision of fuel meeting the fuel specification, including any fuel
necessary for any testing of the Covered Units
8. Such warehouse storage space and facilities, as are available at the
Site, and as is reasonably appropriate to enable Seller to store Parts at
the Site prior to delivery to Buyer for installation in the Covered Units.
Such warehouse storage space shall be secured and protected from adverse
climate as Seller may reasonably require. Buyer shall be responsible for
risk of loss of Seller's Parts while in storage at the Site. Buyer shall
maintain Seller's Parts stored at the Site free and clear of any and all
liens of Buyer and Buyer's lenders, bondholders, contractors and other
creditors of any nature. Buyer shall allow Seller free access to the Parts
and shall provide loading, off-loading and handling of Parts being
received from or shipped to Seller.
9. All technical information, equipment manuals and drawings related to
the Facility for the use of Seller's personnel, and reasonable access to
all applicable operation and maintenance records maintained by Buyer
related to the Covered Units or the Facility.
10. Access to space next to the Covered Units for lay down, inspection
and/or repairs of Parts.
A-13
<PAGE>
CONFIDENTIAL
11. Any necessary authorizations, exemptions, permits and licenses
required to lawfully operate and maintain the Facility.
12. Appropriate safety instruction and safety programs described in
Appendix B, Article 10.2.
13. Climate-controlled and secure office space of approximately 120 square
feet, adjacent to the work area at the Site including washroom and toilet
facilities.
14. Debris and waste material collection facilities at a mutually agreed
location at the Site. Waste and debris collected by Seller shall be
disposed of by Buyer.
15. Utilities such as water, fuel, and electricity, at the Buyer's
expense.
A-14
<PAGE>
CONFIDENTIAL
PART 5
DELIVERY, TITLE TRANSFER, INVENTORY UTILIZATION
5.1 DELIVERY
Seller shall be responsible for delivery of all Parts to Buyer's Facility.
Risk of Loss for Initial Spare Parts shall pass from Seller to Buyer upon
delivery to Buyer's Facility.
5.2 PASSAGE OF TITLE.
Title to Initial Spare Parts and Initial Operating Spares shall pass upon
shipment FOB Seller's factory or warehouse, or in the event the Buyer's
facility is not ready to receive such parts when they are shipped to the
storage facility designated by Buyer.
Title to Parts (other than the Initial Spare Parts and Initial Operating
Spares) shall pass from Seller to Buyer when the Part is installed in the
Covered Units. Title to other work in progress, including installation
services, shall pass to Buyer as performed by Seller under this Contract.
Seller shall have the right to take possession of and remove from the Site
any parts or components of the Covered Units which have been replaced with
Parts pursuant to Planned Maintenance, provided that Buyer shall have the
right to inspect and examine such parts or components prior to such parts
or components being removed from the Site. Buyer warrants good title to
such parts which shall transfer to Seller upon removal from the site.
Upon termination of this Agreement, Seller shall have the right to remove
any Parts remaining at the Site unless title to such Parts has passed to
Buyer as provided in this Part 5.2.
5.3 INVENTORY UTILIZATION
Buyer shall permit Seller to utilize the Initial Spare Parts in the
performance of this Agreement at no charge to Seller.
5.4 REPAIR SERVICES LOGISTICS
1) Buyer shall be responsible for all actions and costs related to packing
and crating the components of the Covered Units for shipment from the Site
to Seller's Repair Facilities and for unpacking and uncrating the
components of the Covered Units upon return to Buyer's Facility. Seller
shall bear all transportation costs related to shipment of the components
of the Covered Units to and from the Site and Seller's Repair Facility.
Notwithstanding any other provisions in the Contract, Buyer shall bear
risk of loss and related insurance costs for the components of the Covered
Units while in transit to or
A-15
<PAGE>
CONFIDENTIAL
from the Repair Facilities. Seller shall bear risk of loss and related
insurance costs for the components while at the Repair Facilities.
2) Subject to Seller's lien rights under the Contract or arising under the
law, title and right of possession of the components of the Covered Units
shall remain with Buyer. All scrap and used parts and components which
have been replaced during Repair Services made at the Repair Facilities
shall be the property of Seller.
A-16
<PAGE>
CONFIDENTIAL
PART 6
PRICE AND PAYMENT TERMS
As full compensation for all Parts and Services supplied in connection
with Planned Maintenance, Buyer shall make the payments set forth in Parts
6.1 and 6.2 of this Contract, as adjusted in accordance with this
Contract.
6.1 MOBILIZATION PAYMENT.
Within thirty days after January 1, 2001, or such later date as Buyer
shall reasonably designate (based upon a delayed completion of the initial
Units), Buyer shall pay Seller a mobilization payment of One Hundred Ten
Thousand Dollars ($110,000). This price is in 2001 US dollars and will be
escalated in accordance with Part 6.3. If Buyer delays the mobilization
payment because the initial Units will not be completed as initially
scheduled, Buyer shall make the mobilization payment as near as possible
to six (6) months prior to completion of the first Unit. Seller shall not
be required to commence mobilizing until the mobilization payment is
received by Seller.
6.2. PERIODIC PAYMENTS.
6.2.1 Monthly Payments.
During the term of this Contract, Buyer shall make monthly payments of
[ * ] per Covered Unit for each calendar month beginning with the
calendar month in which the Performance Start Date for such Unit occurs
and ending with the calendar month in which a Unit is no longer covered
under this Contract. Payment shall be due on the twentieth (20th)
calendar day of each month for the prior calendar month. The first
monthly payment due under this Contract for a Covered Unit shall be
prorated by multiplying [ * ] by a fraction, the numerator of which is
the number of days in such calendar month after the Performance Start
Date for such Unit, including the Performance Start Date as the first
day and the denominator of which is the number of days in such calendar
month. The last monthly payment due for a Covered Unit under this
Contract shall be prorated by multiplying [ * ] by a fraction, the
numerator of which is the number of days in such calendar month before
the termination of coverage for a Unit under this Contract, including
the date of termination as the last day and the denominator of which is
the number of days in such calendar month. This price is in 2001 US
dollars and will be escalated in accordance with Part 6.3. Invoices
prepared by Seller for monthly payments under this Part 6.2.1 shall
indicate that the charge is for Planned Maintenance.
6.2.2 Factored Fired Hours Adjustment
At the end of each Calendar Year the number of Factored Fired Hours per
Factored Start will be calculated and an additional charge will be made if
Factored Fired Hours are in excess of sixteen (16) Factored Fired Hours
per Factored Start. The calculation for Factored Fired Hours is:
A-17
<PAGE>
CONFIDENTIAL
[ * ]
6.2.3 FACTORED STARTS ADJUSTMENT
At the end of each calendar Month an additional charge will be determined
based upon the number of Factored Starts which have occurred on all
Covered Units during such calendar Month; provided that there shall be no
charge for the first twenty-four (24) Factored Starts per Covered Unit in
each calendar Year; and further provided that for any Unit which is
covered by this Contract for a period of less than a full calendar Year,
the number of Factored Starts for which no payment is due shall be reduced
by multiplying twenty-four (24) by a fraction, the denominator or which is
the number of days in such calendar year during which such Unit was
covered under this Contract and the numerator of which is 365.
[ * ]
The calculation of Factored Starts is:
Factored Starts = (0.5NA + NB + Trip Adjustment)
NA = Number of Part Load Start/ Stop Cycles in the Contract Year ((less
than) 60% Load)
NB = Number of Normal Base Load Start/Stop Cycles in the Contract Year
For each Trip in the Contract Year not caused by a malfunction of a
Covered Unit, a number of Starts will be added as determined from Figure 1
to this Contract based upon the load on the Unit at the time of the Trip.
For each Trip in the Contract Year caused by a malfunction of a Covered
Unit, a number of Starts will be added as determined by multiplying the
value from Figure 1 to this Contract based upon the load on the Unit at
the time of the Trip by 0.625 (5/8).
A-18
<PAGE>
CONFIDENTIAL
[CHART]
Figure 1
For the purpose of this Part 6.2.2, a "Start" is the commencement of
firing and operation of a Covered Unit; provided that an aborted start in
which the Unit has not been synchronized to the grid will not be counted
as a Start.
6.2.4 UNPLANNED MAINTENANCE ADJUSTMENT
In the event that Buyer is responsible, pursuant to Part 6.4, for the
payment of charges for Parts, Repairs or Services arising out of Unplanned
Maintenance, which Parts, Repairs or Services would be within Seller's
Workscope if such Parts, Repairs or Services were provided by Seller
during Planned Maintenance, then Seller shall provide a credit to Buyer if
the need to provide such Parts, Repairs or Services is permanently
eliminated, not just postponed, because Parts, Repairs or Services to be
provided during such Planned Maintenance event were provided during an
Unplanned Maintenance event for which the Buyer has paid Seller in
accordance with Part 6.4. Parts, Repairs or Services shall be considered
permanently eliminated if, at the time of consideration, it reasonably
appears that as a result of the installation of such Part, or the
performance of such Repair or Service in an Unplanned Maintenance, Seller
will, during the term of the Contract, be required to supply such Part one
less time or to perform such Service or Repair, one less time, than was
reasonably anticipated. Seller will provide a credit to the Buyer for that
portion of the price paid for the Unplanned Maintenance event which
corresponds to the Parts, Repairs and Services permanently eliminated, not
just postponed. Such credit will be given and effective upon mutual
agreement after the time the Planned Maintenance would have otherwise
occurred, when both parties can reasonably determine that the Parts,
Repairs or Services were in fact permanently eliminated, and not just
postponed, and will be applied against subsequent Monthly Payments under
Section 6.2.1, until fully used. Any charges for Parts, Repairs or
Services provided during Unplanned Maintenance which are subject to the
above credit will be correctly categorized as Planned
A-19
<PAGE>
CONFIDENTIAL
Maintenance for tax purposes on the applicable invoice. If it is
subsequently determined that the Parts, Repairs or Services which had been
credited against Unplanned Maintenance, were only postponed and not
actually eliminated, then the additional Parts, Repairs or Services will
be provided to Buyer and treated as Unplanned Maintenance. No credit will
be given for overtime beyond that anticipated in the Planned Maintenance,
expediting fees, or any additional costs incurred due to lack of ability
to plan.
6.3 ESCALATION.
For all payments and adjusting credits or charges due after February 1,
2002, and continuing through January 31, 2011, the amount of such payment,
credit or charge shall be adjusted upward by the Fixed Escalation
Percentage. The Fixed Escalation Percentage shall be an increase of three
percent (3%) per year, applied to the prices applicable for the preceding
twelve (12) month period, beginning on February 1, 2002 and such annual
increases shall continue to be applied for each comparable twelve (12)
month period thereafter through January 31, 2011.
For all payments, charges and credits due on or after February 1, 2011,
and continuing through the remaining term of this Contract, the amount of
such payments, credits or charges shall be adjusted upward or downward
annually effective February 1 of each year using the Calculated Escalation
Percentage. The Calculated Escalation Percentage shall be determined
annually in each January and multiplied by the prices applicable during
the twelve (12) month period from February 1, 2010 through January 31,
2011 ("Revised Base Prices") to determine the increase or decrease from
the Revised Base Prices to be used during the twelve (12) calendar months
immediately following such January, (or such period of less that twelve
(12) months for the period immediately preceding any termination) during
the remaining term of this Contract (so that, for example, all payments,
credits and charges due from February 1, 2014, through January 31, 2015
shall be increased or decreased from the Revised Base Prices by an amount
equal to the Calculated Escalation Percentage determined in January 2014
multiplied by the Revised Base Prices.) The Calculated Escalation
Percentage shall be calculated to reflect changes in indexes described
herein, as follows: (a) 40% of the Calculated Escalation Percentage shall
be an amount equal to the percentage by which the "Materials Index" for
the month in which the adjustment is made is greater or less than the
"Base Materials Index;" (b) 60% of the Calculated Escalation Percentage
shall be an amount equal to the percentage by which the "US Labor Index"
for the calendar quarter in which the adjustment is made is greater or
less than the "Base US Labor Index."
For the purpose of this provision, the following definitions apply: (a)
the Materials Index shall be that index identified as PPI 10-17 (Steel
Mill Products) determined and reported monthly by the Bureau of Labor
Statistics of the U.S. Department of Labor and the Base Materials Index
shall be the value of such index for January 2011; (b) The US Labor Index
shall be that index identified as Employment Cost Index for Private
Industry Workers (Wages and Salaries) (Non-Seasonally Adjusted) determined
and reported quarterly by the Bureau of Labor Statistics of the U.S.
Department of Labor and the Base
A-20
<PAGE>
CONFIDENTIAL
US Labor Index shall be the value of such index for the last calendar
quarter of 2010. Should the specified indices be discontinued, proper
indices shall be substituted by mutual agreement of the Parties. The US
Labor Index and Materials Index shall be determined to the nearest second
decimal place. The percentage changes from the base indices shall be
calculated to the nearest one-tenth of one percent.
6.4 UNPLANNED MAINTENANCE.
As full compensation for Parts, Repairs and Services provided as a part of
Unplanned Maintenance, Buyer shall pay Seller at the price rates listed in
Appendix I (subject to escalation as provided in Appendix A, Part 6.3)
with the following discounts:
o Parts: [ * ] discount from those listed in Appendix I
o Repairs: [ * ] discount from those listed in Appendix I
o Services: [ * ] discount from those listed in Appendix I
Seller shall submit invoices for Parts supplied as Unplanned Maintenance
upon delivery of such Parts and shall submit invoices for Services and
Repairs supplied as a part of Unplanned Maintenance upon completion of the
Unplanned Maintenance. Each invoice for Unplanned Maintenance shall
separately state the parts component from the services/labor component.
Buyer shall make payment within thirty (30) days after receipt of Seller's
invoice.
6.5 EXTRA WORK
Seller shall submit invoices for Extra Work at the end of the month in
which the Extra Work Services were performed and upon shipment of Parts
supplied as Extra Work. Buyer shall make payment within thirty (30) days
after receipt of Seller's invoice.
6.6 INITIAL SPARE PARTS PRICE.
In consideration of the supply of Initial Spare Parts identified in
Appendix K, Buyer shall pay Seller: US$[ * ]. The Initial Spare Parts
Price shall be paid pro rata, upon submission of Seller's invoices and
shipping documents.
6.7 INITIAL AND REPLENISHMENT OPERATIONAL SPARE PARTS PRICE.
In consideration of the supply of Initial Operational Spare Parts
identified in Appendix J, Buyer shall pay Seller: US$[ * ]. The
Initial Spare Parts Price shall be paid pro rata, upon submission of
Seller's invoices and shipping documents. Buyer shall replace Operation
Spare Parts as needed. As full compensation for such Operational Spare
Parts purchased for replenishment, Buyer shall pay Seller at the price
rates listed in Appendix I (subject to escalation as provided in Appendix
A, Part 6.3) with a discount of [ * ] from those prices listed in Appendix
I.
6.8 METHOD OF PAYMENT.
All monthly payments for Parts, Repairs and Services shall be made by wire
transfer to the bank account designated by Seller.
A-21
<PAGE>
CONFIDENTIAL
PART 7
WARRANTY AND LIMITATION OF LIABILITY
7.1 WARRANTY.
7.1.1 Seller warrants to Buyer that the Parts delivered during the term of
this Contract shall be free from defects in material, workmanship and
title and that Services performed during the term of this Contract shall
be performed in a competent, diligent and workmanlike manner free from
defects. The foregoing warranties shall expire:
(a) in the case of Parts installed under this Contract, [ * ] after
installation of the Parts in the Covered Unit;
(b) in the case of Services [ * ] after the performance of the
Service;
(c) in the case of any other parts, not installed under this Contract,
[ * ] after delivery;
provided that all warranties shall expire no later than [ * ] after the
termination of this Contract. In the case of any Engineering
Study/Inspection/Test Service, Seller does not warrant the accuracy of, or
the performance results of, any conclusions or recommendations provided,
or that any desired objective will result from the Engineering
Study/Inspection/Test Service performed.
7.1.2 If any failure of Parts or Services to meet the above warranties is
discovered during the warranty period, Buyer shall promptly notify
Seller's Assigned Technical Advisor in writing and make the Covered Units
available as soon as reasonably possible, considering the Objectives, for
correction. Seller shall thereupon correct any defect by, at its option,
(i) re-performing the defective Services, (ii) repairing and re-installing
the defective Parts or (iii) delivering necessary replacement Parts in
accordance with Part 5.1.1 and installing such Parts. In determining which
of the foregoing options to utilize for correction of any defect, Seller
shall consider the Objectives.
7.1.3 Seller shall not be responsible for removal or replacement of
systems, structures or other parts of Buyer's Facility, but shall
nevertheless be responsible for dismantling and reassembling the Covered
Units to the extent necessary to perform the required Services or install
the required Parts. The basis for any tests shall be mutually agreed upon
and Seller shall be notified of and may be represented at all tests that
may be made on the Covered Units.
7.1.4 Except for the provisions of Part 9.1.2, Part 9.1.4 and Part 11,
Article 7 of Appendix B and Article 11.1 of Appendix B, the preceding
paragraphs of this Part 7.1 set forth the exclusive remedies for all
claims based on failure of or defect in the Covered Units or the Parts and
Services provided under the Contract, whether the failure or defect arises
before or during the applicable warranty period and whether a claim,
however instituted, is based on contract, warranty, tort (including
negligence), indemnity, strict liability or otherwise. The foregoing
warranties are exclusive and are in lieu of all other
A-22
<PAGE>
CONFIDENTIAL
warranties and guarantees whether written, oral, implied or statutory. NO
IMPLIED STATUTORY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE SHALL APPLY. The limitations set forth in this Section 7.1.4 shall
not limit or affect the obligation of Seller to indemnify Buyer as
otherwise specifically set forth in Article 7 of Appendix B of this
Contract. Notwithstanding anything to the contrary, Seller has no
responsibility under this Contract to assess, address, or remediate any
Year 2000 or other date-related issues related to the Covered Units.
7.2 LIMITATION OF LIABILITY
7.2.1 The total liability of Seller, on all claims of any kind which arise
in any calendar year, except for the exceptions listed in (a) through (d)
below, whether such claims are in contract, warranty, indemnity, tort
(including negligence), strict liability, or otherwise, arising out of the
performance or breach of this Contract, the use of any Parts or the
provision of any Services, shall not exceed the larger of (I) the
aggregate amount due to Seller under this Contract in that calendar year
or (ii) $3,500,000. The only exceptions to the above limit of liability
are listed in the following paragraphs (a) through (d):
(a) In the case of Extra work, the limit of liability for any
Extra Work shall not exceed the price paid for performing such Extra
Work;
(b) Excluded from the above limit of liability are Contractor's
indemnification obligations under Article 11.2 of Appendix B to
the extent they would apply to the case of Hazardous Materials
introduced to the Site by Seller prior to the notification of
Buyer and without Buyer's approval;
(c) Excluded from the above limit of liability are Contractor's
indemnification obligations under Article 7 of Appendix B; and
(d) In the case of repudiation or abandonment of the Contract by
Contractor (including any termination of the Contract by Buyer
arising from repeated material breaches of the Contract by
Contractor of such nature as to indicate Contractor's
unwillingness to preform) the limit of liability will be equal to
Thirty Million Dollars ($30,000,000), which amount is in 1998 US
dollars and will be escalated in accordance with Part 6.3, plus any
applicable Termination Price Adjustment pursuant to Part 9.1.4.2.
All liability under the Contract shall terminate twelve months after the
expiration or termination of this Contract.
7.2.2 Seller, its subcontractors or suppliers, shall not be liable for any
special, consequential, incidental, indirect or exemplary damages, whether
as a result of breach of contract, warranty, indemnity, tort (including
negligence), strict liability, or otherwise, and including loss of profit
or revenues, loss of use of the Covered Units or any associated equipment,
cost of capital, cost of substitute equipment, facilities, services or
replacement power, downtime costs, and claims of Buyer's customers for
such damages,
A-23
<PAGE>
CONFIDENTIAL
provided that the limitations of this Part shall not apply to claims
against Seller for indemnification made pursuant to Article 7 of Appendix
B of this Contract.
7.2.3 For the purposes of this Part 7.2, the term "Seller" shall mean
Seller, its affiliates, subcontractors and suppliers of any tier, and
their respective agents and employees, whether individually or
collectively.
7.2.4 To the extent permitted by Applicable Insurance Policies, Buyer
waives rights of recovery against Seller, whether Buyer's claim is brought
under breach of contract, indemnity, warranty, tort (including
negligence), strict liability or otherwise, for loss or damage to the
property of Buyer for which Buyer receives actual payment in accordance
with the terms of insurance required to be maintained by Buyer under Part
8.2. Buyer and Seller shall cooperate in good faith to expeditiously
submit claims under Applicable Insurance Policies and in order to maximize
the amount of any recovery available under such Applicable Insurance
Policies.
A-24
<PAGE>
CONFIDENTIAL
PART 8
INSURANCE REQUIREMENTS
8.1 SELLER'S INSURANCE
8.1.1 During the term of this Contract, Seller shall maintain the
following insurance coverage:
(i) Workers' Compensation and Employers Liability Insurance and any
other statutory insurance required by Applicable Laws with respect to
Seller's employees, consultants or agents in such form(s) and amount(s) as
required by all Applicable Laws.
(ii) General/Public Liability insurance, in broad form including coverage
for liability assumed under contract, providing coverage for bodily injury
and property damage with a limit of not less than $5,000,000.00 per
occurrence/aggregate cumulative total of underlying and excess coverages.
Coverage to include contractual liability covering liabilities assumed
under this Contract.
(iii) Automobile Liability Insurance including owned, non-owned and hired
vehicles with limits of $5,000,000 combined single limit.
8.1.2 The foregoing insurance policies shall provide that the policy shall
not be canceled or changed without thirty (30) days' advance written
notice to Buyer of such cancellation or change, except for non-payment of
premiums which shall have ten (10) days advance written notice.
8.1.3 Upon request during the term of this Agreement, Seller shall deliver
to Buyer certificates of insurance showing that the foregoing insurance is
in full force and effect. Seller shall also provide waivers of subrogation
in favor of Buyer, its subsidiaries, partners, affiliates, directors,
employees, officers and Lenders and Lender's consultants.
8.2 BUYER'S INSURANCE
8.2.1 During the term of this Contract, Buyer shall maintain the following
insurance coverage:
(i) Workers' Compensation and any other statutory insurance required by
Applicable Laws with respect to Buyer's employees, if any, in such form(s)
and amount(s) as required by all Applicable Laws.
(ii) General/Public Liability insurance, in broad form including coverage
for liability assumed under contract, providing coverage for bodily injury
and property damage with a limit of not less than $5,000,000.00 per
occurrence/aggregate cumulative total of underlying and excess coverages.
A-25
<PAGE>
CONFIDENTIAL
(iii) All Risk Property and Boiler and Machinery Breakdown insurance
covering the Covered Unit(s) and Facility, subject to such deductibles as
Buyer may, in its sole discretion, determine to be reasonable, together
with business interruption coverage, subject to such deductibles as Buyer
may, in its sole discretion, determine to be reasonable, under which
Seller shall be an additional insured, and which includes a waiver of
subrogation (except for design error) in favor of Seller (and its
subsidiaries and affiliates.)
8.2.2 The foregoing insurance policies shall provide that the policy shall
not be canceled or changed without thirty (30) days' advance written
notice to Seller of such cancellation or change except for non-payment of
premium which shall have ten (10) days advance written notice.
8.2.3 Upon request during the term of this Contract, Buyer shall deliver
to Seller a certificate(s) of insurance showing that the foregoing
insurance is in full force and effect.
8.3 FAILURE TO MAINTAIN INSURANCE.
Failure of either of the Parties to maintain the insurance required under
this Part 8 shall constitute an event of material default for the purposes
of Part 9.1.
A-26
<PAGE>
CONFIDENTIAL
PART 9
TERMINATION
9.1 TERMINATION.
9.1.1 TERMINATION FOR CONVENIENCE
Neither Party may terminate this Contract for convenience, provided that
if for any reason (i) the Facility is not completed prior to December 31,
2007, (ii) Buyer and General Electric fail to execute a Turbine Purchase
Agreement as referenced above by February 29, 2000, or (iii) Buyer fails
to enter into a Power Purchase Agreement for the sale of power from the
Facility by February 29, 2000, Buyer may terminate this Contract prior to
the Performance Start Date for the first Unit, upon written notice to
Seller of such termination. If Buyer has not yet made the mobilization
payment as required by Section 6.1, at the time this Contract is cancelled
by Buyer pursuant to the immediately preceding sentence, then neither
party shall have any further liability under this Contract after such
cancellation, provided that if Buyer has made the mobilization payment
required pursuant to Section 6.1, then the cancellation payment shall be
equal to the mobilization payment and neither party shall have any further
obligation under this Contract.
9.1.2 TERMINATION FOR MATERIAL BREACH.
1) Either Party (the "Non-Defaulting Party") may terminate this Contract
if the other Party (the "Defaulting Party") (i) becomes Insolvent or (ii)
commits a material breach of this Contract, including non payment of
amounts due under this Contract, and fails to cure such breach within
thirty (30) days of written notice from the Non-Defaulting Party of such
breach, or fails to commence to cure such breach and diligently proceed
with the cure if it is not possible to cure such breach within thirty (30)
days of such notice.
2) In the event of a termination of this Contract pursuant to this Part
9.1.2, the Defaulting Party shall be responsible for all direct damages
arising out of such termination, provided that the Non-Defaulting Party
shall take reasonable measures to mitigate its losses resulting from any
breach of this Contract by the Defaulting Party. In addition, the
Termination Price Adjustment specified in Part 9.1.4 shall be paid within
30 days of the termination effective date. Termination of this Contract
shall not relieve either Party from any obligation which arose under this
Contract prior to the date of such termination, including the payment of
Liquidated Damages for Availability pursuant to Part 11, or payment for
Unplanned Maintenance or Extra Work performed prior to such termination.
The foregoing shall be the Defaulting and the Non-Defaulting Parties sole
and exclusive liability to each other for material breach of this Contract
or termination of this Contract.
9.1.3 TERMINATION BY BUYER FOR CANCELLATION OF POWER PURCHASE AGREEMENT.
In the event that following the execution of a Power Purchase Agreement,
Power Customer, without solicitation from Buyer, and without Buyer's
consent, terminates or cancels the Power Purchase Agreement for any
reason, Buyer may, within twelve (12)
A-27
<PAGE>
CONFIDENTIAL
months after such termination or cancellation elect to terminate this
Contract by delivery of written notice to Seller.
9.1.4 TERMINATION PRICE ADJUSTMENT
The Termination Price Adjustment shall be as follows:
9.1.4.1 In the even this Contract is terminated as a result of a
default by Buyer, in addition to any other damages, Buyer shall pay to
Seller, to the extent that Seller has not previously been paid on the
basis of monthly payments under this Contract made prior to the date of
termination, an among equal to Seller's list price for (i) any Planned
Maintenance Services previously performed and (ii) any Planned
Maintenance Parts to which Buyer has taken title. The amount to be paid,
if any, under this Part 9.1.4.1 shall be due thirty (30) days after
receipt of a detailed invoice from Seller setting forth the basis for
the amount due.
9.1.4.2 In the event this Contract is terminated as a result of a
default by Seller, in addition to any other damages which may be
applicable, Seller shall pay to Buyer, to the extent that Buyer's
monthly payments under this Contract made prior to the date of
termination have compensated Seller for Parts and Services not yet
received by Buyer, an amount equal to the difference between Buyer's
total payments and the value based upon the pricing under this Contract
(including escalation) of the Parts and Services received by Buyer. The
amount to be paid, if any, under this Part 9.1.4.2 shall be due thirty
(30) days after receipt of a detailed invoice from Buyer setting forth
the basis for the amount due.
9.1.4.3 In the event this Contract is terminated by Buyer pursuant to
Part 9.1.3, Buyer shall pay to Seller, but only if and to the extent
that Seller has not been previously paid on the basis of monthly
payments made under this Contract prior to the date of termination, an
amount equal to the difference between the total amount which Seller
has previously received under this Contract and Seller's pricing under
this Contract for (i) any Planned Maintenance Services performed prior
to such termination and (ii) any Planned Maintenance Parts to which
Buyer has taken title, but in no event greater than Seller's published
prices for such Parts and Services. The amount to be paid, if any,
under this Part 9.1.4.3 shall be due thirty (30) days after receipt of
a detailed invoice from Seller setting forth the basis for the amount
due.
A-28
<PAGE>
CONFIDENTIAL
PART 10
NOTICES
10. NOTICES.
Addresses for notices required or desired to be given under this Contract
are as follows: If to Buyer: If to Seller:
Tenaska, Inc. General Electric International Inc.
1044 North 115th Street 4200 Wildwood Parkway
Omaha, Nebraska 68154 Atlanta, GA 30339
Attention: Dwight Howell Attention: Michael Kalmes
Fax No.: (402) 691-9530 Fax No.: (770) 859-7769
A-29
<PAGE>
CONFIDENTIAL
PART 11
AVAILABILITY GUARANTY AND LIQUIDATED DAMAGES
11.1 DEFINITIONS.
For the purposes of this Part 11 only, the following terms shall have the
meaning set forth after them, provided that any capitalized term used in
Part 11 which is not defined in this Part 11.1 shall having the meaning
defined elsewhere in this Contract:
"AVAILABILITY ADJUSTMENT" means such amounts as Buyer should pay or be
credited for pursuant to Part 11.5.
"AVAILABILITY PERCENTAGE" means for each PPA Year percentage determined
from the calculation made pursuant to Section 11.3.
"CHARGEABLE EVENT" means an Outage or a Derating, but excluding any
Outages or Deratings resulting from Assumption Violations, acts of any
third parties not retained by Seller, failure of equipment other than the
Covered Units which adversely affects the Covered Units, Scheduled Outages
or PPA Force Majeure events.
"CONTRACT CAPACITY" shall mean the declared capacity of the Plant in
accordance with the Power Purchase Agreement expressed in MWs, increased
by any Deratings caused by the failure of Covered Components or by any
adjustments in operating parameters for the Covered Units required by
Seller which have the effect of reducing the declared capacity of the
Plant, provided that with 6 Units in PPA Commercial Operation, the
Contract Capacity shall be not less than 875 MW and not more than 950 MW.
Buyer shall notify Seller in writing within ten (10) days of its
declaration of the Contract Capacity for any PPA Year. Buyer's declaration
of Contract Capacity shall be reasonable under the existing circumstances
and shall not be increased for the purpose of impeding Seller's ability to
achieve the Availability Guarantees set forth in Part 11.2.
"DATE OF PPA COMMERCIAL OPERATION" means the date on which Commercial
Operation occurs under the Power Purchase Agreement. Buyer shall notify
Seller in writing within 10 days of achieving Commercial Operation under
Power Purchase Agreement of the date on which commercial operation was
achieved.
"DELIVERED ENERGY" for a period of time shall mean the amount of energy
(expressed in MWh) delivered by Buyer to Power Customer pursuant to an
Energy Request during such period, but in no event more than the amount of
the Energy Request.
"DERATING" means a reduction in Plant output (measured in MW) arising from
(i) breakage of a component of a Covered Unit, (ii) abnormal wear or tear
to a component of a Covered Unit, (iii) defects in any Covered Unit, or
(iv) malfunction of a component of a Covered Unit, but excluding a
reduction in Plant output arising from normal degradation and ambient
temperature variations.
A-30
<PAGE>
CONFIDENTIAL
"ENERGY REQUEST" means the energy in MWh requested by the Power Customer
from Buyer as permitted by the Power Purchase Agreement.
"MW" means megawatt.
"MWH" means megawatt-hour.
"OPERATING TERM" shall mean the operating term of the Power Purchase
Agreement commencing on the Date of PPA Commercial Operation and ending on
the 29th anniversary of the Date of PPA Commercial Operation.
"PLANT" means Buyer's dispatchable electric generating facility located in
Heard County in the State of Georgia.
"PPA FORCE MAJEURE" shall mean any cause beyond the control of the Party
(Power Customer or Buyer) affected, including, but not restricted to,
failure or threat of failure of facilities (but excluding such failures or
threats of failures caused by Buyer's or the O&M Contractor's failure to
comply with PPA Prudent Utility Practice), flood, earthquake, storm, fire,
lightning, Acts of God, explosions, transportation accidents, epidemic,
war, acts of the public enemy, riot, civil disturbance or disobedience,
strike, lockout, work stoppage, other industrial disturbance or dispute,
whether or not determined to have arisen out of an unfair labor practice
of any Party, sabotage, restraint by court order or other public
authority, and action or nonaction by, or failure to obtain the necessary
authorizations or approvals from, any governmental agency or authority,
which by the exercise of due diligence such Party could not reasonably
have been expected to avoid. Nothing contained herein shall be construed
so as to require a Party (Power Customer or Buyer) to settle any strike,
lockout, work stoppage, or other industrial disturbance or dispute in
which it may be involved. Any Party (Power Customer or Buyer) rendered
unable to fulfill any of its obligations under the Power Purchase
Agreement by reason of PPA Force Majeure shall exercise due diligence to
remove such inability with all reasonable dispatch.
"PPA PRUDENT UTILITY PRACTICE" means any of the practices, methods and
acts engaged in or approved by a significant portion of the independent
power industry from time to time or any of the practices, methods and acts
which, in the exercise of reasonable judgment in light of the facts known
(or which should have been known) at the time the decision was made, would
have been expected to accomplish the desired results at the lowest
reasonable cost consistent with good business practices, taking into
account (without limitation) such factors as reliability, safety and
expedition. PPA Prudent Utility Practice is not intended to be limited to
the optimum practice, method or act to the exclusion of all others, but
rather to be a spectrum of possible practices, methods or acts having due
regard for, among other things, manufacturers' warranties and other
contractual obligations, the requirements or guidance of governmental
agencies of competent
A-31
<PAGE>
CONFIDENTIAL
jurisdiction, requirements of insurers, and the requirements of the Power
Purchase Agreement.
"PPA YEAR" shall mean the period beginning on the Date of PPA Commercial
Operation and ending on the next May 31, each one-year period thereafter
during the Operating Term and the period from the last June 1 during the
Operating Term until the last day of the Operating Term.
"REQUESTED ENERGY" is the sum of all Energy Requests made by Power
Customer during the relevant period. This assumes that Power Customer can
request energy up to the full Capacity required to be available under the
Power Purchase Agreement at any time, even if Buyer has previously
notified Power Purchaser that as a result of an unscheduled Outage or
Derating of one or more Units such full Capacity is not available for such
period of time.
"SCHEDULED OUTAGES" shall mean planned outages or reductions in
availability or output in order perform maintenance in accordance with
manufacturers' recommendations and PPA Prudent Utility Practices scheduled
pursuant to the Power Purchase Agreement.
"SUMMER PEAK HOUR" shall have the same meaning as the term "Summer Peak
Hour" has under the Power Purchase Agreement and shall include only Peak
Hours during the calendar months of June through September.
11.2 AVAILABILITY GUARANTEES.
During the term of this Contract, Seller guarantees to Buyer the
achievement of an Availability Percentage of ninety seven percent (97%)
for each PPA Year.
11.3 CALCULATION OF AVAILABILITY PERCENTAGE. The Availability Percentage
shall be calculated as follows:
[ * ] The following page has been omitted and filed separately with the
Securities and Exchange Commission as part of a Confidential Treatment
Request.
A-32
<PAGE>
CONFIDENTIAL
11.4 CALCULATION OF AVAILABILITY ADJUSTMENT. The Availability Adjustment
shall be calculated as follows:
For each PPA Year, the Availability Percentage calculated in accordance
with Section 11.3 for such PPA Year shall be compared to 97%. If the
Availability Percentage is greater than 97%, then Buyer shall pay to
Seller an amount equal to $200,000 for each percentage point by which the
Availability Percentage exceeds 97%, provided that increases of less than
a full percentage point shall be prorated proportionally. If the
Availability Percentage is less than 97%, then Seller shall credit Buyer
against future payments due under this Agreement, an amount equal to
$200,000 for each percentage point by which the Availability Percentage is
less than 97%, provided that decreases of less than a full percentage
point shall be prorated proportionally.
11.5 PAYMENT OF AVAILABILITY ADJUSTMENT.
During the term of this Contract, if the Availability Adjustment with
respect to a PPA Year is positive, Buyer shall pay such Availability
Adjustment to Seller within twenty (20) days after the end of such PPA
Year. If the Availability Adjustment with respect to a PPA Year is
negative, then such Availability Adjustment shall be credited to Buyer
against the next monthly payment due pursuant to Part 6.2.1 with any
excess being payable by Seller at the time that such monthly payment would
otherwise by payable by Buyer pursuant to Part 6.2.1. Payment of the
Availability Adjustment by Seller shall be the exclusive remedy for
Seller's failure to meet the Availability guarantees set forth in Part
11.2.
11.6 AVAILABILITY INFORMATION.
Within thirty (30) days after the end of each PPA Year, Buyer shall
deliver to Seller a statement detailing (a) any amounts due from Buyer to
Seller under this Part 11 for said
A-33
<PAGE>
CONFIDENTIAL
PPA Year, (b) any amounts due from Seller to Buyer under this Part 11 for
said PPA Year and (c) the Availability Percentages for such PPA Year
necessary to calculate the Availability Adjustment in accordance with Part
11.4.
11.7 LIMITATIONS.
The maximum Availability Adjustment to be paid to Seller for any PPA Year
shall not exceed Six Hundred Thousand Dollars ($600,000) (escalating by 3%
on the first day of February beginning in the year 2001) and shall in no
event exceed the Availability Adjustment paid to Buyer under the Power
Purchase Agreement for the same period. The maximum Availability
Adjustment to be credited or paid to Buyer by Seller for any PPA Year
shall not exceed Six Hundred Thousand Dollars ($600,000) (escalating by 3%
on the first day of February beginning in the year 2001.) In no event will
the maximum Availability Adjustment to be paid to Buyer by Seller for any
PPA Year exceed the amount of any Availability Adjustment paid by Buyer to
Power Customer under the Power Purchase Agreement for the same PPA year.
11.8 OTHER CONDITIONS
The gas turbines will not be operated above their nominal base firing
temperature rating of or in any peak firing or power augmentation regime
not pre-approved with Seller.
The operator will maintain a rigorous and explicit operating log. Seller
technical personnel shall have access to Plant operational data, logs, and
site visits.
Seller must be notified as soon as reasonably possible of any Outage event
or impending Outage event. Seller must participate in the preplanning of
all gas turbine Outages.
The gas turbine compressor will be on-line water washed at least once per
week during those weeks when such Unit is operated. The compressor will be
off-line water washed periodically when the turbine is shutdown for
planned or unplanned maintenance when feasible or at other times when is
feasible. Water wash outage times shall be excluded form the calculation
of Availability Percentages.
The inlet air filters will be inspected at least once per month. If the
inlet filtration does not meet the manufacturer's current recommendation
for filter differential pressure, Buyer shall notify Seller of such fact.
Buyer and Seller will mutually agree on a time to replace such filter(s),
which if reasonably possible shall be during a Scheduled Outage.
The Plant will have a documented operation and maintenance program and
Buyer will replenish the inventory of Operating Spares as required.
To the extent reasonably possible under the operating constraints
available under the Power Purchase Agreement, Seller shall be allowed,
upon mutual agreement between the Seller's Site Director and Buyer, to
conduct repairs, inspections, and modifications during Outages which are
not a Chargeable Event, in which case such Outage will be treated as a
A-34
<PAGE>
CONFIDENTIAL
Scheduled Outage for purposes of calculating Availability Percentages
pursuant to this Part 11.
A full complete and accurate record shall be maintained and jointly
certified with a Seller technical representative. The operating record
must document each Outage or Derating event including the date and time of
the Outage or Derating, the hours duration of the Outage or Derating, the
Outage or Derating cause, the classification as to whether the Outage or
Derating is a Chargeable Event, the % capacity reduction, and any
unreasonable waiting and/or idle maintenance time caused by Buyer or third
parties retained by Buyer.
Seller must participate in the preplanning of all Scheduled Outages.
Seller will give due pre-notice to the owner/operator of required
scheduled outages.
Any acceptance testing or performance tests performed after the
Performance Start Date for the first Unit and not caused by issues or
matters relating to the Covered Units will not be charged against the
Availability Guarantee.
Work during all Outages must be conducted on a concurrent basis with high
maintenance intensity. Extensions of Outages for work conducted on
equipment other than the Covered Units will not be charged unless the
failure of a component of a Covered Unit caused such other equipment to
fail.
If at the choice of the Buyer, a Scheduled Outage activity is performed,
it will not be charged against the availability guarantee. Examples of
operator choice include compressor and turbine water washes and filter
maintenance.
A-35
<PAGE>
CONFIDENTIAL
APPENDIX B
GENERAL TERMS AND CONDITIONS
1. SUPPLEMENTAL TERMS
1.1 NON PAYMENT. If Buyer fails to make any undisputed payments required in the
Contract, Seller may upon thirty (30) days advance written notice to Buyer (and
provided Buyer has not fully cured such nonpayment prior to the end of such
thirty (30) day period), suspend performance of Services and delivery of Parts.
Any reasonable costs incurred by Seller in accordance with such suspension
(including storage costs) shall be payable by Buyer upon submission of Seller's
invoices. The right of Seller to suspend pursuant to this Article 1.1 shall not
affect the right of Seller to terminate this Contract for material breach in
accordance with Part 9.1, provided that if Buyer cures such payment breach prior
to any termination of this Contract by Seller, Seller shall resume the
performance of Services and delivery of Parts under this Contract as soon as
reasonably possible.
1.2 INTEREST. Any Party which fails to pay any amounts due under this Contract
shall pay interest at an annual rate of interest equal to the prime rate of The
Chase Manhattan Bank, N.A. in effect on the due date plus one percent (1%), on
all amounts not timely paid in accordance with this Contract.
2. TAXES AND DUTIES
2.1 Seller shall be responsible for, and shall pay directly, any and all
corporate and individual taxes that are measured by net income or profit imposed
by any Governmental Instrumentality on Seller, its employees or subcontractors
due to the execution of any agreement or the performance of or payment for Parts
or Services hereunder (the "Seller Taxes"). If Buyer deducts or withholds Seller
Taxes, Buyer shall furnish within one month to Seller accurate official receipts
from the appropriate Governmental Instrumentality for each deducted or withheld
Seller Taxes. Buyer shall be responsible for, and shall pay directly when due
and payable, any and all Buyer Taxes (defined below), and all payments due and
payable by Buyer to Seller hereunder shall be made in the full amount of the
Contract Price, free and clear of all deductions and withholding, for Buyer
Taxes. If Buyer deducts or withholds Buyer Taxes, Buyer shall pay additional
amounts to Seller to cause the amounts actually received by Seller, net of
deducted or withheld Buyer Taxes, to equal the full amount of the Contract
Price, and shall provide to Seller within one month, along with such payments,
accurate official receipts from the appropriate Governmental Instrumentality for
deducted or withheld Buyer Taxes. If Seller is required to pay Buyer Taxes,
Buyer shall, promptly upon presentation of Seller's invoice for such Buyer
Taxes, pay to Seller in U.S. dollars an amount equal to the U.S.
B-1
<PAGE>
CONFIDENTIAL
dollar equivalent of such Buyer Taxes.
2.2 "Buyer Taxes" means all taxes, duties, fees, or other charges of any nature
(including, but not limited to, ad valorem, consumption, excise, franchise,
gross receipts, import, license, property, sales, stamp, storage, transfer,
turnover, use, or value-added taxes, and any and all items of withholding,
deficiency, penalty, addition to tax, interest, or assessment related thereto),
other than Seller Taxes, imposed by any Governmental Instrumentality on Seller
or its employees or subcontractors due to the execution of any agreement or the
performance of or payment for Parts or Services under this Contract.
3. INSPECTION AND FACTORY TESTS
Buyer's inspectors will be provided access to Seller's facilities for purposes
of obtaining information on production progress, determining status and
observing tests and inspections. Such access will be limited to areas concerned
with repairs of Buyer's equipment and shall not include restricted areas where
work of a proprietary nature is being conducted. Buyer will be advised as to the
schedule for testing which the Parties have mutually agreed upon. Buyer 's
inspectors will be given an opportunity to observe these tests during regular
working hours. Neither completion of production work nor shipment of any of the
Parts, however, will be delayed to accommodate the inspectors. The inspectors
will be informed of Seller's methods of reporting production progress.
Appropriate office facilities will be provided where Buyer's inspectors may
conduct their work in connection with the above. Subject to the conditions set
forth in this Article, Seller will make reasonable efforts to obtain for Buyer
access to vendors' plants for the purposes described above. Buyer's inspection
of the repairs to Buyer's equipment or his failure to inspect in no way relieves
Seller of its obligation to fulfill the requirements of this Contract nor is it
to be construed as acceptance by Buyer.
4. EXCUSABLE DELAY
4.1 Neither Party shall have any liability or be considered to be in breach or
default of its obligations under this Contract to the extent that performance of
such obligations (other than an obligation to make any payments) is delayed or
prevented, directly or indirectly, due to: (i) causes beyond its reasonable
control; or (ii) acts of God, act (or failures to act) of governmental
authorities or third parties not engaged by either Party, fires, severe weather
conditions, earthquakes, strikes or other labor disturbances, floods, war
(declared or undeclared), epidemics, civil unrest, riot, delays in
transportation, or car shortages; or (iii) acts (or omissions) of the other
Party or (iv) shipment to storage under Article Part 5.1 of Appendix A or (v)
inability on account of causes beyond the reasonable control of Seller to obtain
necessary materials, necessary components or services ("Excusable Delay"). An
Excusable Delay event includes the failure of a subcontractor to complete
obligations in a timely manner if such failure is itself due to an Excusable
Delay event as defined in this Article 4.1. The Party claiming Excusable Delay
shall give notice thereof to
B-2
<PAGE>
CONFIDENTIAL
the other Party and shall use all reasonable efforts to remedy the cause or
causes constituting the Excusable Delay, keeping the other Party reasonably
informed. Such notice shall be given as promptly as possible but in no event
later than seven (7) Days after becoming (or when reasonably should have become)
aware of such occurrence or event. The Party claiming Excusable Delay shall
notify the other Party, as soon as practicable, of any revised delivery date or
Service resumption date. The period of non-performance shall be of no greater
scope and of no longer duration than is required by the Excusable Delay event.
It is the duty of the claiming Party to prove that an event qualifies as an
Excusable Delay and its eligibility for Excusable Delay including all specific
action taken to work around or mitigate the impact, the specific cause for the
claim of Excusable Delay and to provide written documentation of such proof to
the other Party as soon as reasonably possible.
5. COMPLIANCE WITH LAWS, CODES AND STANDARDS
5.1 The Contract Price is based on federal, state and local laws and regulations
in effect on the date of this Contract. The Contract Price will be increased to
reflect any additional direct costs of performance incurred by Seller resulting
from changes required to comply with changes in federal, state and local laws or
regulations. Notwithstanding the foregoing sentences, no modification in price
will be made as a result of any general change in the manufacturing or other
facilities of Seller or any changes in costs related to general administration
and overhead resulting from changes in federal, state and local laws and no
additional charges will be made under this Contract until the total aggregate
amount of such charges during the term of this Contract exceeds One Hundred
Thousand ($100,000), after which Seller shall be entitled to an equitable
adjustment for the increased direct costs which Seller will thereafter incur.
5.2 Buyer agrees not to export US origin goods supplied by Seller except as may
be permitted by the US export laws and regulations, as may be amended. Buyer
agrees that it will not export to the countries designated in Export
Administration Regulations Section 779.4(f), any technical data or software (nor
the direct product thereof) provided to Buyer by Seller in connection with the
Contract, unless prior written authorization is obtained from the US Export
Administration.
5.3 The Parts and Services sold hereunder are not intended for application in
connection with any nuclear installation or activity and Buyer warrants that it
shall not use the Parts and Services for such purposes, or permit others to use
the Parts or Services for any such purposes. If, in breach of the foregoing, any
such use occurs, Seller shall have no liability for any nuclear or other damage,
injury or contamination, and Buyer shall indemnify Seller, its affiliates and
suppliers of every type and tier against any such liability, whether arising as
a result of breach of contract, warranty, indemnity, tort (including
negligence), strict liability or otherwise.
6. CHANGES
B-3
<PAGE>
CONFIDENTIAL
6.1 Buyer and Seller have the right to propose, for mutual agreement of the
Parties, changes within the general scope of the goods and services to be
performed by Seller under this Agreement. Any difference in price, schedule,
rights and or other obligations, including without limitation Seller's warranty
or availability incentive, resulting from such changes must be mutually agreed
upon in writing . Neither Party shall be obligated to proceed with any changes
until such written agreement is signed by both Parties.
7. INDEMNIFICATION
7.1 If it is alleged that Parts or Services provided by Seller under this
Contract infringe upon any patent, copyright, or similar proprietary right,
including but not limited to misappropriation of trade secrets and the use of
such Part or the performance of such Services is temporarily or permanently
enjoined, then Seller shall, at its own expense, in such manner as to minimize
the disturbance to Buyer's business activities, either: (i) obtain for Buyer the
right to continue using such Part or Services or (ii) modify such Part or
Services so as to become non-infringing (provided that such modification does
not affect Buyer's intended use of the same as contemplated under this
Contract); or (iii) replace such Part or Service with equally suitable,
non-infringing Parts and/or Services, provided such replacement does not degrade
the operation of the Covered Units or adversely affect Seller's warranty and
shall indemnify Buyer from all third party claims arising out of such
infringement in accordance with the provisions of Section 7.4. This Article 7
states the entire liability of Seller for infringement of patents, copyrights or
similar proprietary rights, including but not limited to misappropriation of
trade secrets with respect to any Parts and Services.
7.2 Article 7.1.1 shall not apply to (i) any Part which is manufactured to
Buyer's design or (ii) the use of any Parts furnished under the Contract in
conjunction with any third party apparatus or material not supplied by Seller or
recommended by Seller for use with the Covered Units. As to any Parts or use
described in the preceding sentence, Seller assumes no liability whosoever for
patent infringement.
7.3 Each party (the "Indemnifying Party") shall defend, protect, indemnify, and
save harmless the other Party, its partners, their stockholders, officers,
directors, agents, servants, employees (the "Indemnitees") from and against any
and all damage, loss, including costs, expenses, liability, claims, expenses
(including reasonable attorney fees and expenses), demands, judgments, and
settlements, arising in favor of any third party, arising from claims and/or
causes of action of every kind and character for personal injury, death or
damage to tangible property, to the extent that such claim is based upon (a) the
negligence of the indemnifying party, (b) willful misconduct of the indemnifying
party, or (c) the breach of any obligations of the Indemnifying Party under this
Contract, except to the extent such damage or loss was caused solely by the
negligence or solely by the willful misconduct of any Indemnitee and as
specifically limited by statute. If such damage or loss was caused by
B-4
<PAGE>
CONFIDENTIAL
or results from the concurrent negligence of the parties, the Indemnifying Party
shall not be required to indemnify the Indemnitee for that portion of the damage
or loss which was caused by the negligence of such Indemnitee. For purposes of
this section 7.3, "third party" shall not include Buyer or its partners,
subsidiaries, affiliates, parents, successors or assigns, or any party with an
equity or partnership interest in the forgoing.
7.4 Promptly upon knowledge by Indemnitee of any claim or notice of the
commencement of any action, administrative or legal proceeding, or investigation
as to which the indemnities provided for in this Article 7 may apply, Indemnitee
shall notify the Indemnifying Party in writing of such fact; provided that the
failure of Indemnitee to give any such notice promptly shall not excuse the
Indemnifying Party from its indemnification obligations hereunder, except to the
extent that the Indemnifying Party has been directly and materially adversely
affected by such late notice. With respect to all claims which are subject to
indemnification under this Article 7, the Indemnifying Party shall, at its
expense (including attorneys' fees and expenses, all other costs and expenses of
litigation, and costs of settlement) assume, on behalf of Indemnitee, and
conduct with due diligence and in good faith, the defense thereof with counsel
reasonably satisfactory to Indemnitee; provided that Indemnitee 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 the Indemnitee and the Indemnifying Party and Indemnitee shall have
reasonably concluded that there may be legal defenses available to it which are
different from, additional to, or inconsistent with, those available to the
Indemnifying Party, Indemnitee shall have the right to select separate counsel
to participate in the defense of such action on its own behalf and its own
expense. Indemnitee shall, at the request of the Indemnifying Party, provide all
reasonably available assistance in the defense or settlement of any such claim,
action, proceeding or investigation and all reasonable cost and expenses
incurred by Indemnitee in connection with the defense or settlement of any such
claim, action, proceeding or investigation shall be reimbursed by the
Indemnifying Party promptly upon demand therefor. Neither Indemnitee nor the
Indemnifying Party shall settle or compromise any claim, action or proceeding
without the prior written consent of the other party, which consent shall not be
unreasonably withheld.
7.5 Notwithstanding anything to the contrary in this Article 7, if any claim,
action , proceeding or investigation arises as to which the indemnities provided
for in Article 7 apply, and the Indemnifying Party fails to assume the defense
of such claim, action, proceeding or investigation, then Indemnitee may, at the
expense of the Indemnifying Party, contest or settle such claim.
8. DISPUTE RESOLUTION
8.1 All disputes arising in connection with the Contract shall be settled, if
possible, by negotiation. Either Party may, by the giving of written notice,
cause the matter to be
B-5
<PAGE>
CONFIDENTIAL
referred to a meeting of appropriate higher management of the Parties. Such
meeting shall be held within ten (10) business days following the giving of the
written notice.
8.2 If the matter is not resolved within twenty (20) business days after the
date of the notice referring the matter to appropriate higher management, or
such later date as may be unanimously agreed upon, then either Party shall be
free to pursue whatever legal remedies it may have.
9. PROPRIETARY INFORMATION
9.1 At the time of furnishing confidential or proprietary information, the
disclosing Party will expressly designate by label, stamp, or other written
communication that the information or documentation furnished is confidential.
The recipient Party agrees (i) to treat such information as confidential, (ii)
to restrict the use of such information to matters relating to the disclosing
Party's performance of the Contract, and (iii) to restrict access to such
information to employees of the recipient Party and its agents whose access is
necessary in the implementation of the Contract and will not otherwise disclose
such information to any third party. Confidential information will not be
reproduced without the disclosing Party's prior written consent, and all copies
of written information will be returned to the disclosing Party upon request
except to the extent that such information is to be retained by the recipient
Party pursuant to the Contract.
9.2 The foregoing restrictions do not apply to information which: (i) is
contained in a printed publication which was released to the public by the
disclosing Party prior to the date of the Contract; (ii) is, or becomes,
publicly known otherwise than through a wrongful act of the recipient Party, its
employees, or agents; (iii) is in possession of the recipient Party, its
employees, or agents (without restrictions) prior to receipt from the disclosing
Party, provided that the person or persons providing the same have not had
access to the information from the disclosing Party; (iv) is furnished to others
by the disclosing Party without restrictions similar to those herein on the
right of the receiving Party to use or disclose; or (v) is approved in writing
by the disclosing Party for disclosure by the recipient Party, its agents or
employees to a third party.
10. HEALTH AND SAFETY MATTERS
10.1 Each Party will take all necessary precautions, at all times, for the
safety of personnel at Site. This includes, but is not limited to, instruction
regarding safety practices, proper and safe handling of hazardous substances and
protection of personnel from exposure thereto, energization / de-energization of
all power systems (electrical, mechanical and hydraulic) and using a safe and
effective lock-out tag procedure. Buyer shall provide for reasonable fire
protection and security (fencing, lighting and monitors) at the Site, provided
that Seller's personnel will take reasonable precautions to ensure that their
tools and equipment are secured against petty theft.
B-6
<PAGE>
CONFIDENTIAL
10.2 Seller may, from time to time, conduct safety audits to insure safe
conditions exist for Seller's personnel and make recommendations to Buyer
concerning same. Neither the conduct or non-conduct of safety audits nor the
making of any recommendation by Seller shall relieve Buyer of the responsibility
to provide a safe place to work.
10.3 Upon Buyer's request, Seller shall certify to Buyer that all personnel used
for the performance of any Services at the Site are subject to Seller's Random
Drug Testing Program and Seller is not aware of any drug usage by such
personnel. All Random Drug Testing shall be conducted by Seller at times that
are subject to Seller's discretion.
10.4 If the safe execution of Services at the Site by Seller is imperiled by
existing or imminent local conditions, Seller may remove some or all of its
personnel from the Site, and/or supervise performance of all or any part of the
Services to be performed by Seller and/or evacuate Seller's personnel, and Buyer
shall, to the extent reasonably possible, assist in such evacuation, provided
that Seller shall use reasonable efforts to leave the Site in an orderly and
safe condition. Subject to compliance with Section 4.1 of Appendix B, any such
unsafe local condition shall be considered an Excusable Delay.
11. DIFFERING SITE CONDITIONS; HAZARDOUS MATERIALS
11.1 Following the occurrence of Substantial Completion under the Turbine
Purchase Agreement, Sell shall promptly inspect the Facility to determine of
there are any abnormal conditions at the Facility which would increase the
Seller's cost of performance under this Contract. Seller shall provide notice to
Buyer within thirty days of Substantial Completion under the Turbine Purchase
Agreement and Buyer shall promptly investigate the abnormal conditions. If it is
determined that such conditions are not normally found in similar facilities and
cause an increase in Seller's cost of, or the time required for, performance of
any part of the work under the Contract, an equitable adjustment in price and
time of performance shall be made and the Contract modified in writing
accordingly. If subsequently, Seller encounters unknown or latent physical
conditions which are materially different from those known to exist at the time
of the above inspection and cause an increase in Seller's cost of, or the time
required for, performance of any part of the work under the Contract, an
equitable adjustment in price and time of performance shall be made and the
Contract modified in writing accordingly.
11.2 If, at the Site, Seller encounters toxic substances, hazardous substances
or hazardous wastes (as such terms may be defined in any statute or ordinance or
regulations promulgated by any federal, state or local governmental authority of
the United States) (collectively, the "Hazardous Materials"), other than
Hazardous Materials introduced to the Site by Seller or normally encountered by
Seller in the performance of Services, which require special handling and/or
disposal, Buyer shall immediately take whatever precautions are required to
legally eliminate such hazardous conditions so that the work
B-7
<PAGE>
CONFIDENTIAL
under the Contract may safely proceed. If any such Hazardous Materials cause an
increase in Seller's cost of or the time required for performance of any part of
the work, an equitable adjustment shall be made in the price and schedule. Buyer
agrees to properly dispose of all Hazardous Materials produced or generated in
the course of Seller's work at the Site. Buyer shall indemnify Seller for any
and all claims, damages, losses, causes of action, demands, judgments and
expenses arising out of or relating to the presence of any Hazardous Materials
which are (i) present on the Site prior to the commencement of Seller's work or
(ii) improperly handled or disposed of by Buyer or (iii) brought on to the Site
or produced thereon by parties other than Seller. Seller shall indemnify Buyer
for any and all claims, damages, losses, causes of action, demands, judgments
and expenses arising out of or relating to the presence of any Hazardous
Materials which are (i) introduced to the Site by Seller (other than those
Hazardous Materials reasonably necessary for Seller's performance of Services
which Buyer reasonably approves in advance of introduction to the Site and which
are properly used by Seller in accordance with Good Turbine Practice) or (ii)
improperly handled by Seller. If Buyer has been informed by Seller of any
Hazardous Materials to be introduced to the Site by Seller and Buyer approves
such introduction in advance, Seller's liability to Buyer for any
indemnification arising under this Article 11.2 with respect to such hazardous
Materials shall be limited in accordance with Part 7.2 of Appendix A to the
aggregate amount due to Seller under this Contract in such calendar year,
provided that if any Hazardous Materials are introduced to the Site by Seller
prior to the notification of Buyer and without Buyer's approval then any
indemnification required with respect to such Hazardous Material shall not be
limited by the provisions of Part 7.2. of Appendix A.
12. ASSIGNMENT.
Buyer may assign any or all of its rights or obligations under this Contract to
an Affiliate of Buyer or an entity in which an Affiliate of Buyer has an
ownership interest, provided such assignee has adequate resources (as determined
by Seller in the exercise of its reasonable judgment) to fulfill those
obligations of Buyer which are assigned, and further provided such assignee
agrees to be bound by all of the protections and limitations afforded Seller
under this Contract and any defaults of Buyer existing at such time are cured.
Upon completion of such assignment and the delivery of an assumption agreement
(in a form reasonably satisfactory to Seller) executed by such assignee to
Seller, Buyer shall be released from any and all obligations and liabilities
therefor under this Contract which are assumed by the assignee. Notwithstanding
any provision of this Contract to the contrary, Buyer and Buyer's assignee, if
applicable, shall have the absolute right, without the consent of Seller, to
assign this Contract to the Project lenders for collateral security purposes.
Seller will have the right to assign any part of its obligations under this
Contract to any of its subsidiaries or affiliates, in which case Seller will
guarantee the performance of such assignee. For purposes of this Article 12, an
"Affiliate of Buyer" means an any person or entity that directly or indirectly
controls, is controlled by, or is under common control with Buyer. For the
purposes of this definition "control" shall
B-8
<PAGE>
CONFIDENTIAL
mean the power and authority to direct the management and operations of the
controlled person or entity either through ownership of or control of 50% or
more of the voting interests thereof or otherwise through control of the
managing group.
13. GENERAL CLAUSES
13.1 Except as provided in Part 7.2 of Appendix A, entitled "Limitation of
Liability" and Article 7, the provisions of this Contract are for the benefit of
the Parties hereto and not for any other third party.
13.2 This Contract represents the entire agreement between the Parties and no
modification, amendment, rescission, waiver or other change shall be binding on
either Party unless assented to in writing by the Party's authorized
representatives. Any oral or written representation, warranty, course of dealing
or trade usage not contained or reference herein shall not be binding on either
Party. Each Party agrees that it has not relied on, or been induced by, any
representations of the other Party not contained in the Contract.
13.3 The invalidity in whole or in part of any part of the Contract shall not
affect the validity of the remainder of the Contract.
13.4 The section headings are inserted for convenience of reference only and
shall in no way effect, modify, define, or be used in construing the text of
this Contract. Where the context requires, all singular words in this Contract
shall be construed to include their plural and all words of neuter gender shall
be construed to include the masculine and feminine forms of such words. The
terms "include," "including" and similar terms shall be construed as if followed
by the phrase "without limitation."
13.5 The following provisions, in addition to any provisions which explicitly so
state, shall survive termination of the Contract: Special Conditions of
Contract, Part 7 (Warranty and Limitation of Liability) Part 9.2 (Termination)
and General Conditions of Contract Article 2 (Taxes), Articles 5.4, 5.5 and 5.7
(Compliance With Laws), Article 7 (Indemnification), Article 8 (Dispute
Resolution), Article 9 (Proprietary Information), Article 11.2 (Hazardous
Materials), Article 13 (General Clauses).
B-9
<PAGE>
APPENDIX C
PLANNED MAINTENANCE WORK SCOPE FOR THE COVERED UNITS
[ * ] The following 15 pages have been omitted and filed separately
with the Securities and Exchange Commission as part of a Confidential
Treatment Request.
<PAGE>
APPENDIX D
PROCESS SPECIFICATION: FUEL GASES FOR COMBUSTION IN
HEAVY GAS TURBINES
(GEl 41040F)
<PAGE>
GEL 41040F
REVISED, NOVEMBER 1998
GE POWER SYSTEMS
GAS TURBINE
PROCESS SPECIFICATION
FUEL GASES FOR COMBUSTION IN HEAVY-DUTY GAS TURBINES
THESE INSTRUCTIONS DO NOT PURPORT TO COVER ALL DETAILS OR VARIATIONS IN
EQUIPMENT NOR TO PROVIDE FOR EVERY POSSIBLE CONTINGENCY TO BE MET IN CONNECTION
WITH INSTALLATION, OPERATION OR MAINTENANCE. SHOULD FURTHER INFORMATION BE
DESIRED OR SHOULD PARTICULAR PROBLEMS ARISE WHICH ARE NOT COVERED SUFFICIENTLY
FOR THE PURCHASER'S PURPOSES THE MATTER SHOULD BE REFERRED TO THE GE COMPANY.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
GENERAL 3
II. FUEL GAS CLASSIFICATION 6
A. Natural and Liquefied Petroleum Gas (LW) 6
B. Gasification Fuels 7
C. Process Gases 7
III. FUEL PROPERTIES 8
A. Heating Values 8
B. Modified Wobbe Index Range 8
C. Superheat Requirement 9
D. flammability Ratio 9
E. Gas Constituent Limits 10
F. Gas Fuel Supply Pressure 10
IV. CONTAMINANTS 10
A. Particulate 10
B. Trace Metals 11
C. Liquids 11
D. Sulfur 11
LIST OF TABLES
Table 1. Fuel Gas Classification 3
Table 2. Gas Fuel Specification 4
Table 3. Test Methods for Gaseous Fuels 6
</TABLE>
<PAGE>
I. GENERAL
G.E. heavy-duty gas turbines have the ability to burn are burning a wide
range of gaseous fuels as shown in Table 1. These gases present a broad
Spectrum of properties due to both active and inert components. This
specification is designed to define guidelines that must be followed
concerns which need to be considered in order to burn these fuels in an
efficient, trouble-free manner, while protecting the gas turbine and
supporting hardware. in GE heavy duty gas turbines.
Table 2 specifies gives the allowable limits for both the fuel
properties and contaminants. Table 3 identifies gives the acceptable
test methods to be used in for in determining gas fuel properties for
successful gas turbine operation.
TABLE 1
FUEL GAS CLASSIFICATION
<TABLE>
<CAPTION>
--------------------------------- ------------------------ -----------------------------
FUEL LHV MAJOR COMPONENTS
Btu/SCF
--------------------------------- ------------------------ -----------------------------
<S> <C> <C>
Natural Gas 800-1200 Methane
Liquefied Petroleum Gas (LPG) 2300--3200 Propane, Butane
Gasification Gases
-AIR BLOWN 100-150 Carbon monoxide, Hydrogen,
Nitrogen, Water Vapor
-OXYGEN BLOWN 200--400 Carbon monoxide, Hydrogen,
Water Vapor
Process Gases 300-1000 Methane, Hydrogen, Carbon
monoxide, Carbon dioxide
--------------------------------- ------------------------ -----------------------------
</TABLE>
<PAGE>
TABLE 2
GAS FUEL SPECIFICATION
<TABLE>
<CAPTION>
-------------------------------------- --------------------------- -------------------------- ------------------------------------
FUEL PROPERTIES MAX MIN
-------------------------------------- --------------------------- -------------------------- ------------------------------------
<S> <C> <C> <C>
Lower Heating Value, Btu/lb None 100--300 See Note 3
Modified Wobbe Index Range +5% --5% See Notes 4,5
Superheat, (Degree)F 50 See Note 6
Flammability Ratio See Note 7 .2.2:1 Roch to lean fuel to air
ratio, volume basis
See Note 8
Gas Constituent Limits, % by volume:
Methane
--Ethane 100 85 % of rectant species
Propane 15 0 % of rectant species
Butane + Paraffine (C4+) 15 0 % of rectant species
Hydrogen 5 0 % of rectant species
Carbon Monoxide 0 0 % of rectant species
Oxygen 15 0 % of rectant species
Carbon Dioxode 10 0 % of rectant species
Nitrogen 15 0 % total (rectants + insert)
Sulfur 30 0 % total (rectants + insert)
Total Inerts (N2 + C02+AR) 30 0 See Note 9
Aromatics (Benzene, Toluebe etc.) Report 0 See Note 10
Gas Fuel Supply Pressure See Note 11
-------------------------------------- ------------------------------------------------------ ------------------------------------
CONTAMINANTS FUEL LIMITS NOTES
(See Notes 12,13) ppmw (See Note 14)
-------------------------------------- ----------- ------------- ------------- -------------- ------------------------------------
Particulate M53000 B/E Class F Cl ass H Class See Note 15
M55000
-------------------------------------- ----------- ------------- ------------- -------------- ------------------------------------
Total 35 32 23 23
Above 10 Microns 0.4 0.3 0.2 0.2
-------------------------------------- ------------------------------------------------------ ------------------------------------
Trace Metals Sodium plus potassium 0.8 See Note 16
-------------------------------------- ------------------------------------------------------ ------------------------------------
Liquids 0 No Liquids allowed, see superheat
requirements and Note 17
-------------------------------------- ------------------------------------------------------ ------------------------------------
</TABLE>
Notes:
1. All fuel properties must meet the requirements from
ignition to base load unless otherwise stated.
2. Values and limits apply at the inlet of the gas fuel control
module.
3. Heating value ranges shown are provided as guidelines.
Specific fuel analysis must be furnished to GE for proper
analysis. (Reference Section 111--A)
4. See section 111--B. for definition of Modified Wobbe Index
Range.
<PAGE>
5. Variations of Modified Wobbe Index greater THAN + 5% or --5%
may be acceptable for some applications, (i.e. On units that
incorporate gas fuel heating). GE must analyze and approve all
conditions where the 5% variation is to be exceeded.
6. Minimum fuel gas temperature shall be set at SOF above the
higher of the Hydrocarbon (including ~ Glycol) or Water
Dewpoints. (Reference Section 111--C)
7. There is no defined maximum flammability ratio limit. Fuel with
flammability ratio significantly larger than those of natural
gas may require a start-up fuel.
8. The range of constituents are for typical natural gas. Fuels
meeting these limits are approved for operation with the entire
GE heavy-duty gas turbine product line, including those
utilizing Dry Low NO(x) combustion systems. Candidate fuels
which do not meet these limits should be referred to GE for
further review. All fuels will be reviewed by GE on a case by
case basis. (Reference Section 111-E)
9. The quantity of sulfur in gas fuels not limited by this
specification. Experience has shown that oxidation/corrosion
rates are not significantly affected by fuel sulfur levels up
to 1% sulfur. Hot corrosion of hot gas path parts is controlled
by the specified trace metal limits. Sulfur levels shall be
considered when addressing HRSG Corrosion, Selective Catalytic
Reduction (SCR) Deposition, Exhaust Emissions, System Material
Requirements, Elemental Sulfur Deposition and Iron Sulfide.
(Reference Section IV--D)
10. When fuel heating for thermal efficiency improvements is
utilized (e.g. Tfuel> 300F) there is a possibility of gum
formation if excess aromatics are present. Contact GE for
further information.
11. Minimum and maximum gas fuel supply pressure requirements are
furnished by GE as part of the unit proposal.
12. The contamination limits identified represents the total
allowable limit at the inlet to the turbine section. These
limits will be reduced if comparable contaminants are present
in the compressor inlet air and combustion steam/water
injection.
13. The contamination limits and the identified method of
calculating contamination limits apply to "typical" natural
gases. Consult GE for contamination limits for gasification
fuels.
14. Given contaminant limits are for pure methane gas. Actual
maximum limits are determined by multiplying given limits by
(Actual Fuel LHV/Methane LHV) where methane LHV is in 21,515
BTU/ LB.
15. The fuel gas delivery system shall be designed to prevent the
generation or the admittance of solid particulate to the gas
turbine gas fuel system. This shall include but not be limited
to particulate filtration and non corrosive (i.e. stainless
steel) piping from the particulate filtration to the inlet of
the gas turbine equipment Fuel gas piping systems shall be
properly cleaned/flushed and maintained prior to gas turbine
operation. (Reference Section IV--A)
16. Sodium and potassium, from salt water, are the only corrosive
trace metal contaminants normally found in natural gases. Other
trace metal contaminants may be found in Gasification and
Process Gases. These will be reviewed by GE on a case by case
basis.
17. The fuel gas supply shall be 100% free of liquids. Admission of
liquids can result in combustion and/or hot gas path component
damage. (Reference Section IV--C)
<PAGE>
TABLE 3
TEST METHODS FOR GASEOUS FUELS
<TABLE>
<CAPTION>
--------------------------------------------- ------------------------
PROPERTY ASTM METH0D
--------------------------------------------- ------------------------
<S> <C>
Gas Composition to C6+ (gas chromatography) D 1945
Heating Value D 3588
Specific Gravity D 3588
Compressibility Factor D 3588
Dew Point (Note I) D 1142
Sulfur (Note 2) D 3246
--------------------------------------------- ------------------------
</TABLE>
Notes:
1. Hydrocarbon and water dewpoints shall be determined by direct
dew point measurement (Chilled Mirror Device). If dew point
cannot be measured, an extended gas analysis which identifies
hydrocarbon components from Cl through C 14 shall be performed.
This analysis must provide an accuracy of greater than 10 ppmv.
A standard gas analysis to C6+ is normally not acceptable for
dew point calculation unless it is known that heavier
hydrocarbons are not present, as is most often the case with
liquefied natural gases.
2. This test method will NOT detect the presence of condensable
sulfur vapor. Specialized filtration equipment is required to
measure sulfur at concentrations present in vapor form.
Contact GE for more information.
II. FUEL GAS CLASSIFICATION
A. NATURAL AND LIQUEFIED PETROLEUM GAS (LPG)
Natural gases are predominantly methane with much smaller quantities
of the slightly heavier hydrocarbons such as ethane, propane and
butane. Liquefied petroleum gas is propane and/or butane with traces
of heavier hydrocarbons.
1. Natural Gas
Natural gases normally fall within the calorific heating value
range of 800 to 1200 Btu per standard cubic foot. Actual
calorific heating values are dependent on the percentages of
hydrocarbons and inert gases contained in the gas. Natural
gases are found in and extracted from underground reservoirs.
These "raw gases" may contain varying degrees of nitrogen,
carbon dioxide, hydrogen sulfide, and contain contaminants such
as salt water, sand and dirt. Processing by the gas supplier
normally reduces and/or removes these constituents and
contaminants prior to distribution. A gas analysis must be
performed to ensure that the fuel supply to the gas turbine
meets the requirements of this specification.
2. Liquefied Petroleum Gases
The heating values of Liquefied Petroleum Gases (LPGs) normally
fall between 2300 and 3200 Btu/ SCF (LHV). Based on their high
commercial value, these fuels are normally utilized as a
back-up fuel to the primary gas fuel for gas turbines. Since
LPGs are normally stored in a liquid state, it is critical that
the vaporization process and gas supply system maintains the
fuel at a temperature above the minimum required superheat
value. Fuel heating and Heat tracing is required to ensure
this.
<PAGE>
B. GASIFICATION FUELS
Other gases that may be utilized as gas turbine fuel
are those formed by the gasification of coal,
petroleum coke or heavy liquids. In general, the
heating values of gasification fuel are substantially
lower than other fuel gases. These lower heating
value fuels result in the effective areas of the fuel
nozzles being larger than those utilized for fuels of
higher heating values.
Gasification fuels are produced by either an Oxygen
Blown or Air Blown gasification process.
1. Oxygen Blown Gasification
The heating values of gases produced by oxygen
blown gasification fall in the range of 200 to
400 Btu/SCF. The Hydrogen (H2) content of these
fuels are normally above 30% by volume and have
HI/CO mole ratio between 0.5 to 0.8. Oxygen blown
gasification fuels are often mixed with steam for
thermal NO(x) control, cycle efficiency
improvement and/or power augmentation. When
utilized, the steam is injected into the
combustor by an independent passage. Due to high
hydrogen content of these fuels, oxygen blown
gasification fuels are normally not suitable for
Dry Low NO(x) (DLN) applications. (See Table 2)
The high flame speeds resulting from high
hydrogen fuels can result in flashback or primary
zone re-ignition on DLN pre-mixed combustion
systems. Utilization of these fuels shall be
reviewed by GE.
2. Air Blown Gasification
Gases produced by air blown gasification normally
have heating values between 100 and 150 BTU/
SCFH. The Hydrogen (H2) content of these fuels
can range from 8% to 20% by volume and have a
H(2)/CO mole ratio 0.3 to 3:1. The use and
treatment of these fuels similar to that
identified for oxygen blown gasification.
For Gasification fuels a significant part of the
total turbine flow comes from the fuel. In
addition, for oxygen blown fuels there is a
diluent addition for NO(x) control. Careful
integration of the gas turbine with the
gasification plant is required to assure an
operable system. Due to the low volumetric
heating value of both oxygen an air blown gases,
special fuel system and fuel nozzles are
required.
C. PROCESS GASES
Many chemical processes generate surplus gases that
may be utilized as fuel for gas turbines. (i.e. tail
or refinery gases). These gases often consisting of
methane, hydrogen, carbon monoxide, and carbon
dioxide that are normally byproducts of petrochemical
processes. Due to the hydrogen and carbon monoxide
content, these fuels have large rich to lean
flammability limits. These types of fuels often
require inerting and purging of the gas turbine gas
fuel system upon unit shutdown or a transfer to more
a more conventional fuel. When process gas fuels have
extreme flammability limits such that the fuel will
auto ignite at turbine exhaust conditions, a more
"conventional" start-up fuel is required.
<PAGE>
Additional process gases that utilized as gas turbine
fuels are those which are byproducts of steel
production. These are:
1. Blast Furnace Gases (BFGs)
Blast Furnace Gases (BFGs), alone, have heating
values below minimal allowable limits. These
Gases must be blended with other fuel to raise
the heating value to above the required limit.
Coke
<PAGE>
Oven and/or Natural Gases or hydrocarbons such as propane or
butane can be utilized to accomplish this.
2. Coke Oven Gases
Coke oven gases are high in H(2) and CH(4) and may be used as
fuel for non-Dry Low NO(x) (DLN) combustion systems. These
fuels often contain trace amounts of heavy hydrocarbons, which
when burned could lead to carbon buildup on the fuel nozzles.
The heavy hydrocarbons must be "scrubbed" or removed from the
fuel prior to delivery to the gas turbine.
3. COREX Gases
COREX gases are similar to oxygen blown gasified fuels, and
may be treated as such. They are usually lower in H(2) content
and have lower heating values than oxygen blown gasified fuels.
Further combustion related guidelines may be found in Bureau of
Mines Circulars 503 and 622.
III. FUEL PROPERTIES
A. Heating Values
A fuel's heat of combustion, or heating value, is the amount of
energy, expressed in Btu (British Thermal Unit), generated by the
complete combustion, or oxidation, of a unit weight of fuel. The
amount of heat generated by complete combustion is a constant for a
given combination of combustible elements and compounds.
For most gaseous fuels, the heating value is determined by using a
constant pressure, continuous type calorimeter. This is the industry
standard. In these units, combustible substances are burned with
oxygen under essentially constant pressure conditions. In all fuels
that contain hydrogen, water vapor is a product of combustion, which
impacts the heating value. In a bomb calorimeter, the products of
combustion are cooled to the initial temperature and all of the
water vapor formed during combustion is condensed. The result is the
HHV, or higher heating value, which includes the heat of
vaporization of water. The LHV, or lower heating value, assumes all
products of combustion including water remain in the gaseous state,
and the water heat of vaporization is not available.
B. Modified Wobbe Index Range
While gas turbines can operate with gases having a very wide range
of heating values, the amount of variation that a single specific
fuel system can accommodate is much less. Variation in heating value
as it affects gas turbine operation is expressed in a term
identified as modified Wobbe Index (Natural Gas, E. N. Tiratsoo,
Scientific Press Ltd., Beaconsfield, England, 1972). This term is a
measurement of volumetric energy and is calculated using the Lower
Heating Value (LHV) of the fuel, specific gravity of the fuel with
respect to air at ISO conditions, and the fuel temperature. The
mathematical definition is as follows:
<PAGE>
Modified Wobbe Index = LHV
SGgas X T
This is equivalent to:
Modified Wobbe Index = LHV
Mwgas X T
28.96
Where: LHV = Lower Heating Value of the Gas Fuel (Btu/scf)
SGgas = Specific Gravity of the Gas Fuel relative to Air
MWgas = Molecular Weight of the Gas Fuel
T = Absolute Temperature of the Gas Fuel (Rankine)
28.96 = Molecular Weight of Dry Air
The allowable modified Wobbe Index range is established to ensure
that required fuel nozzle pressure ratios are maintained during all
combustion/turbine modes of operation. When multiple gas fuels are
supplied and/or if variable fuel temperatures result in a Modified
Wobbe Index that exceed the 5% limitation, independent fuel gas
trains, which could include control valves, manifolds and fuel
nozzles, may be required for standard combustion systems. For DLN
systems, an alternate control method may be required to assure that
the required fuel nozzle pressure ratios are met. An accurate
analysis of all gas fuels, along with fuel gas temperature profiles
shall be submitted to GE for proper evaluation.
C. Superheat Requirement
The superheat requirement is establish to ensure that the fuel gas
supply to the gas turbine is 100% free of liquids. Dependent its
constituents, gas entrained liquids could cause degradation of gas
fuel nozzles, and for DLN applications, premixed flame flashbacks or
reignitions. 5OF of superheat is specified to provide enough margin
to compensate for temperature reduction due to pressure drop across
the gas fuel control valves.
D. Flammability Ratio
Fuel gases containing hydrogen and/or carbon monoxide will have a
ratio of rich-to-lean flammability limits that is significantly
larger than that of natural gas. Typically, gases with greater than
5% hydrogen by volume fall into this range and require a separate
startup fuel. GE will evaluate the gas analysis to determine the
requirement for a start-up fuel.
Fuel gases with large percentages of an inert gas such as nitrogen
or carbon dioxide will have a ratio of rich-to-lean flammability
limits less than that of pure natural gas. flammability ratios of
less than 2.2 to 1 as based on volume at ISO conditions (14.696 psia
and 59F), may experience problems maintaining stable combustion over
the full operating range of the turbine.
<PAGE>
E. Gas Constituent limits are set forth to assure stable combustion
through all gas turbine loads and modes of operation. Limitations
are more stringent for Dry Low NO(x) combustion systems where
"premixed" combustion is utilized. A detailed gas analysis shall
be furnished to GE for proper evaluation.
F. Gas Fuel Supply Pressure
Gas fuel supply pressure requirements are dependent on the gas
turbine model and combustion design, the fuel gas analysis and unit
specific site conditions. Minimum and maximum supply pressure
requirements will be furnished by GE as part of the unit proposal.
IV. CONTAMINANTS
Dependent on the type of fuel gas, the geographical location and the
forwarding means there is the potential for the "raw" gas supply to
contain one or more of the following contaminants:
1. Tar, lamp black, coke
2. Water, salt water
3. Sand, clay
4. Rust
5. Iron sulfide
6. Scrubber oil or liquid
7. Compressor Lube oil
8. Naphthalene
9. Gas Hydrates
It is critical that the fuel gas is properly conditioned prior to being
utilized as gas turbine fuel. This conditioning can performed by a
variety of methods. These include but are not limited to: media
filtration, inertial separation, coalescing and fuel heating. Table 2
identifies the trace metal, particulate and liquid contamination limits.
These limits are given in parts per million by weight (ppmw) corrected
to the actual heating value of the fuel. It is critical that fuel gas
conditioning equipment be designed and sized so that these limits are
not exceeded.
A. PARTICULATE
Contamination limits for particulate are established to prevent
fouling and excessive erosion of hot gas path parts, erosion and
plugging of combustion fuel nozzles and erosion of the gas fuel
system control valves. The utilization of gas filtration or
inertial separation is instrumental in ensuring that the
particulate requirements as defined in Table 2 are met. GE
recommends the use of stainless steel piping downstream of this
last level of filtration.
<PAGE>
B. TRACE METALS
Sodium is the only trace metal contaminant normally found in natural
gas. The source of sodium in natural gas is normally salt water.
Limits on trace metals are established to prevent the formation of
corrosive deposits on hot gas path components. These deposits can be
detrimental to gas turbine performance.
In addition to sodium, additionally harmful trace metal contaminants
can be found in gasification and process gases. Limits on these
contaminants will be determined by GE on a case by case basis.
C. LIQUIDS
As identified in Table 2, zero liquids are allowed in the gas
turbine fuel gas supply. Liquids contained in the fuel can result in
nuisance and/or hardware damaging conditions. These include rapid
excursions in firing temperature and gas turbine load, primary zone
reignition and flashback of premixed flames, and when liquids
carryover past the combustion system, melting of hot gas path
components. When liquids are identified in the gas supply,
separation and heating is employed to achieve the required superheat
level.
D. SULFUR
There are several concerns relative to the levels of sulfur
contained in the fuel gas supply. Many of these are not directly
related to the gas turbine but to associated equipment and emissions
requirements. These concerns include but not limited to:
1. Hot Gas Path Corrosion
Typically, use of sulfur bearing fuels will not be limited by
concerns for corrosion in the turbine hot gas path. Experience
has shown that oxidation/corrosion rates are not significantly
affected by fuel sulfur levels up to about 1% sulfur. Hot
corrosion of hot gas path parts is controlled by specifying the
fuel alkali levels to values shown in table 2. This controls
the extent of alkali sulfate formation, which is the salt
responsible for hot corrosion. Unless sulfur levels are
extremely low, alkali levels are usually limiting in
determining hot corrosion of hot gas path materials. For low
Btu gases, the fuel contribution of alkali metals at the
turbine inlet is increased over that for natural gas, and the
alkali limit in the fuel is therefore decreased.
2. HRSG Corrosion
If heat recovery equipment is used, the concentration of sulfur
in the fuel gas must be known so that the appropriate design
for the equipment can be specified. Severe corrosion from
condensed sulfuric acid results if a heat recovery steam
generator (HRSG) has metal temperatures below the sulfuric acid
dewpoint.
3. Selective Catalytic Reduction (SCR) Deposition
Units utilizing ammonia injection downstream of the gas turbine
for NO(x) control can experience the formation of deposits
containing ammonium sulfate and bisulfate on low temperature
evaporator and economizer tubes. Such deposits are quite acidic
and therefore corrosive. These deposits, and the corrosion that
they cause, may also decrease HRSG performance and increase
back pressure on the gas turbine. Deposition rates of ammonium
sulfate and bisulfate are
<PAGE>
determined by the sulfur content of the fuel, ammonia' content
in the exhaust gas, tube temperature and boiler design. Fuels
having sulfur levels above those used as odorents for natural
gas should be reported to GE. In addition, the presence of
minute quantities of chlorides in the inlet air, may result
in-cracking of AISI 300 series stainless steels in the hot gas
path.
<PAGE>
4. Exhaust Emissions
Sulfur burns mostly to sulfur dioxide, but 5%--10% oxidizes to
sulfur trioxide. The latter can result in sulfate formation,
and may be counted as particulate matter in some jurisdictions.
The remainder will be discharged as sulfur dioxide. To limit
the discharge of acid gas, some localities may restrict the
allowable concentration of sulfur in the fuel.
5. System Material Requirements
When considering fuel gases containing HS (sour gas fuels)
material selection for system piping and components shall
comply with NACE Standard, MR0175-93.
6. Elemental Sulfur Deposition
Solid elemental sulfur deposits can occur in gas fuel systems
downstream of pressure reducing stations or gas control valves
under certain conditions. These conditions may be present if
the gas fuel contains elemental sulfur vapor, even when the
concentration of the vapor is a few parts per billion by
weight. Concentrations of this magnitude cannot be measured by
commercially available instrumentation and deposition cannot
therefore be anticipated based on a standard gas analysis.
Should deposition take place, fuel heating will be required to
maintain the sulfur in vapor phase and avoid deposition. A gas
temperature of 130 F or higher may be required at the inlet to
the gas control valves to avoid deposition, depending on the
sulfur vapor concentration. The sulfur vapor concentration can
be measured by specialized filtering equipment. If required, GE
can provide further information on this subject.
7. Iron Sulfide
The presence of sulfur in the gas may promote the formation of
iron sulfides. Under certain conditions, iron sulfide is a
pyrophoric material that can autoignite at atmospheric pressure
and temperature when exposed to air. Extreme care must be taken
when servicing gas fuel cleanup equipment to avoid accidental
exposure to oxygen and subsequent combustion of filter
material.
APPENDIX 1
The effective particle size for erosion considerations is determined by
a particle's terminal settling velocity. The size and density
distribution of the solid particles must be such that not more than 1.0
percent by weight of the particles shall have a terminal settling
velocity in air (70(Degrees)F (21(Degrees)C) and 30 inches Hg, absolute)
greater than 14 inches per minute, and not more than 0.1 percent shall
have a terminal settling velocity in excess of 23 inches per minute.
For a solid spherical particle, Stoke's Law of settling permits
calculating the terminal settling velocity if the particle size and
shape and particle specific gravity are known. The following tabulation
gives the spherical particle diameters equivalent to the limiting
terminal settling velocities for particles of specific gravity 2.0 and
4.0.
<PAGE>
<TABLE>
<CAPTION>
------------------------------- ------------------------------ -------------------------------
SETTLING VELOCITY SPECIFIC GRAVITY EQUIVALENT SPHERICAL PARTICAL
(BASED ON WATER) (inches/mm)
DIAMETER (microns)
------------------------------- ------------------------------ -------------------------------
<S> <C> <C>
14 2 10
23 2 13
14 4 7
23 4 9
------------------------------- ------------------------------ -------------------------------
</TABLE>
APPENDIX 2- DEFINITIONS
DEW POINT
This is the temperature at which the first liquid droplet will form
as the gas temperature is reduced. Common liquids found in gas fuel
are hydrocarbons, water and glycol. Each has a separate and
measurable dew point. The dew point varies considerably with
pressure and both temperature and pressure must be stated to
properly define the gas property. Typically, the hydrocarbon dew
point will peak in the 300 to 600 psia range.
DRY SATURATED CONDITIONS
The gas temperature is at, but not below or above, the dew point
temperature. No fee liquids are present
GAS HYDRATES
Gas hydrates are semi-solid materials that can cause deposits that
plug instrumentation lines, control valves and filters. They are
formed when free water combines with one or more of the C1 through
C4 hydrocarbons. Typically the formation will take place downstream
of a pressure reducing station where the temperature drop is
sufficient to cause moisture condensation in a region of high
turbulence. Because hydrates can cause major problems in the gas
distribution network, the moisture content is usually controlled
upstream at a dehydration process station
GAS HYDRATE FORMATION LINE
This is similar to the dew point line except the temperature
variation with pressure is much less. The hydrate line is always
below or at the moisture dew point line as free water must exist in
order for hydrates to form. Maintaining 500 F of superheat above
the moisture dew point will eliminate hydrate formation problems.
GLYCOL
Glycol is not a natural constituent of natural gas but is
introduced during the dehydration process. Various forms of glycol
are used, di-ethylene and tri-ethylene glycol being two most
common. In some cases glycol is injected into the pipeline as a
preservative. In most cases, glycol may only be a problem during
commissioning of a new pipeline or if an upset has taken place at
an upstream dehydration station.
<PAGE>
SUPERHEAT
This is defined as the difference between the gas temperature minus
the liquid dew point The difference is always positive or zero. A
negative value implies that the value is being measured at two
differing states of pressure and temperature and is not valid. A
measured gas temperature below the theoretical dew point means that
the gas is in a wet saturated state with free liquids present.
SATURATION LINE
This is the same as the dew point line.
WET SATURATED CONDITIONS
A point where a mixture consists of both vapor and liquids.
APPENDIX 3- APPLICABLE DOCUMENTS
MROI7S-93, NACE Standard, Sulfide Stress Cracking Resistant
Metallic Material for Oilfield Equipment
Bureau of Mines Bulletin 622, flammability Characteristics of
Combustible Gases and Vapors, 1965
Bureau of Mines Bulletin 503, flammability Characteristics of
Combustible Gases and Vapors, 1950
GEI-4 1047 Gas Turbine Liquid Fuel Specification
GER-3419 Gas Turbine Inlet Air Treatment
Natural Gas, E. N. Tiratsoo, Scientific Press Ltd., Beaconsfield,
England, 1972
Obtaining Natural Gas Samples for Analysis by Gas Chromatography,
GPA Standard 2166--86, Gas Producers association, 6526 East 60th
Street, Tulsa, Oklahoma 74145
Tentative Method of Extended Analysis for Natural Gas and Similar
Gaseous Mixtures by Temperature Programmed Gas Chromatography, GPA
Standard 2286-95, Gas Producers association, 6526 East 60th Street,
Tulsa, Oklahoma 74145
Table of Physical Constants of Paraffin Hydrocarbons and Other
Components of Natural Gas, GPA Standard 2145--96, Gas Producers
association, 6526 East 60th Street, Tulsa, Oklahoma 74145
GE POWER SYSTEMS
GENERAL ELECTRIC COMPANY
ONE RIVER ROAD. SCHENECTADY NV 12345
518. 385.2211 TX: 145354
<PAGE>
APPENDIX E
GAS TURBINE LIQUID FUEL SPECIFICATION
(GEI 41047H)
<PAGE>
GEL 41047H
REFORMATTED
JUNE1992
GE INDUSTRIAL & POWER
SYSTEMS
GAS TURBINE
GAS TURBINE
LIQUID FUEL SPECIFICATIONS
THESE INSTRUCTIONS DO NOT PURPORT TO COVER ALL DETAILS OR VARIATIONS IN
EQUIPMENT NOR TO PROVIDE FOR EVERY POSSIBLE CONTINGENCY TO BE MET IN CONNECTION
WITH INSTALLATION, OPERATION OR MAINTENANCE. SHOULD FURTHER INFORMATION BE
DESIRED OR SHOULD PARTICULAR PROBLEMS ARISE WHICH ARE NOT COVERED SUFFICIENTLY
FOR THE PURCHASER'S PURPOSES THE MATTER SHOULD BE REFERRED TO THE GE COMPANY.
(C)) 1992 GENERAL ELECTRIC COMPANY
<PAGE>
TABLE-OF CONTENTS
<TABLE>
<S> <C>
I. GENERAL 3
II. FUEL CLASSIFICATION AND OPERATIONAL CONSIDERATIONS 3
III. FUEL SPECIFICATIONS 3
IV. FUEL HANDLING AND TREATMENT 7
A. True Distillate Fuels 7
B. Ash-Bearing Fuels 7
V. NON-FUEL CONTAMINANTS 8
A. Air-Borne Contaminants 8
B. Water-Borne Contaminants 8
C. Non-Fuel Contaminant Relationships 9
VI. FUEL AND ADDITIVE EVALUATION AND SAMPLING 9
A. Fuel Evaluation Procedure 9
B. Requalification of Fuel: Fuel Changes 9
C. Additive Qualification 9
VII. FUEL DESCRIPTIONS 10
A. True Distillates 10
B. Ash-Bearing Fuels 11
VIII. MEANING OF SPECIFICATION TESTS 12
A. Ash and Trace Metal Contaminants 12
B. Sulfur 13
C. Nitrogen 13
D. Hydrogen 13
E. Carbon Residue 14
F. Water and Sediment 14
0. Filterable Dirt 14
H. Viscosity 14
I. Pour Point 15
J. Fuel Gravity 15
K. Distillation 16
L. Flash Point 16
M. Thermal Stability 16
N. Compatibility 16
0. Cetane Number 17
IX. FUEL ANALYSIS DATA REQUIREMENTS 17
A. Sampling 17
B. Heating Value 18
C. Viscosity 18
D. Carbon Residue 18
E. Trace Metal Analysis 18
F. Wax Content and Wax Melting Point 18
</TABLE>
<PAGE>
I. GENERAL
This specification is for the several types of liquid fuels suitable
for use in the General Electric heavy duty gas turbines with firing
temperatures of 1600(degree) F (870(degree)C) or higher. It is
iNTENDed as a guide for users of these turbines for the procurement,
use, and where necessary, treatment of fuels.
The fuel properties specified herein include both those which could
affect turbine operation and those additional properties which the
turbine user may need to specify for his installation. These latter
properties are related to fuel storage and handling and local safety
and environmental codes.
All of the fuels covered in this specification shall be hydrocarbon
oils free from organic acids and free from excessive amounts of solid,
fibrous or other foreign matter likely to make frequent cleaning of
suitable filters necessary. The fuels shall be stable over storage and
shall be compatible with other fuels with which they could normally be
mixed.
Procurement of the fuel to specifications is only the first step to
successful heavy duty gas turbine operation. Further steps required of
the user are: (a) prevention of contamination before, during, and
after delivery, (b) proper design of fuel storage, heating and
transfer facilities, (c) proper management of the entire facilities
with regard to maintenance procedures and schedules and (d) proper
design and operation of any fuel treatment equipment.
In addition to outlining the overall fuel requirements, this
specification also defines minimum acceptable air quality standards
for turbine inlet air, and water requirements for installations which
employ either steam or water injection in their cycles. These have
been included since the total contaminants entering the turbine must
be considered.
II. FUEL CLASSIFICATION AND OPERATIONAL CONSIDERATIONS
Liquid fuels applicable to heavy duty gas turbines range from
petroleum naphthas to residual fuels. Within this range, fuels vary in
hydrocarbon composition, physical properties, potential pollutants and
trace metal contaminant levels. Since contaminants are a most
important consideration in fuel application, the liquid fuels have
been divided into two basic classes: true distillates (ash-free) and
ash-bearing fuels.
Table 1 summarizes the general types of liquid fuels in these two
classes and some operational requirements in gas turbine applications.
Refer to Appendix A for common names and characteristics of specific
fuels within each general type.
III. FUEL SPECIFICATIONS
The required physical and chemical properties of the four classes of
liquid fuels are detailed in Table 2. These properties have been
divided into two categories: those required for gas turbine
performance (Section 3.1, Table 2) and those which may be limited to
meet local environmental codes (Section 3.2, Table 2).
Maximum allowable limits are specified for five critical trace metal
contaminants: sodium, potassium, vanadium, lead and calcium. General
Electric heavy duty gas turbines will operate at levels higher than
those specified in Table 2; however, increased maintenance of hot gas
path parts may result. Therefore, it is required that the General
Electric Gas Turbine Division be consulted for fuel treatment
recommendations when the analysis of the fuel as delivered to the gas
turbines exceeds the levels indicated. Fuels outside of the specified
limits of certain physical properties may also be used, but General
Electric should be consulted for consideration of any impact on the
operation of the turbine or fuel treatment system, where required.
<PAGE>
The Ash-Bearing Fuels in Table 2 are-divided into two types: 1) Crudes
and Blended Residual Fuels, and 2) Heavier Residual Fuels. The heavy-duty
gas turbine will operate satisfactorily on both-types, although fuel
treating and heating requirements and stack particulate emission levels
will generally be less for the first type (Crudes and Blended Residual
Fuels).
Table 1 - Comparison of Liquid Fuels and Some Hardware Requirements
<TABLE>
<CAPTION>
------------------------------------ -------------------------------------------- -------------------------------------------
TRUE DISTILLATES ASH-BEARING FUELS
------------------------------------ -------------------------------------------- -------------------------------------------
<S> <C> <C> <C> <C>
Fuel Type Light Heavy Blended Crudes and Heavier Residual
Residual Fuels Blended Fuels
Residual Fuels
------------------------------------ ---------------------- --------------------- ---------------------- --------------------
General Properties Trace Trace Low/Medium High
Ash Content Low Medium Wide Range High
Viscosity High/Medium Medium Wide Range Low
Volatility
------------------------------------ ---------------------- --------------------- ---------------------- --------------------
Nearest ASTM Type* 0-GT,.1-GT 3-GT 3-GT 4-GT
Gas Turb., D2880 2-GT
Burner, D396 1,2 (4) 4,5 6
Diesel, D975 1-D, 2-D (4-D) 4-D --
------------------------------------ ---------------------- --------------------- ---------------------- --------------------
Explosion-Proofing Refer to applicable Refer to applicable Refer to applicable Refer to applicable
codes codes codes codes
------------------------------------ ---------------------- --------------------- ---------------------- --------------------
Start-Up Fuel Required With very light fuels Some fuels Nearly always Always
------------------------------------ ---------------------- --------------------- ---------------------- --------------------
Fuel Pretreatment Usually none Usually none Nearly always Always
------------------------------------ ---------------------- --------------------- ---------------------- --------------------
Fuel Preheating Some in cold Nearly always Nearly always Always
locations
------------------------------------ ---------------------- --------------------- ---------------------- --------------------
Fuel Filtration Always Always Always Always
------------------------------------ ---------------------- --------------------- ---------------------- --------------------
Fuel Combustion Atomization Low pressure air Low pressure air Low or high pressure High pressure air
air
------------------------------------ ---------------------- --------------------- ---------------------- --------------------
Combustor Standard fuel Standard fuel Heavy fuel Heavy fuel
------------------------------------ ---------------------- --------------------- ---------------------- --------------------
`Turbine Cleaning Capability Not Required Not Required Required Required
-----------------------------------------------------------------------------------------------------------------------------
* Book of ASTM Standards, parts 23 and 24
Note: The considerations listed in this table are not all-inclusive.
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Table 2- Liquid Fuel Specifications
<TABLE>
<CAPTION>
------------ ---------------------------------------------- ------------ ---------- ------------------------- -------------------
TRUE DISTILLATES ASH-BEARING
(B) FUELS
(B)
------------ ---------------------------------------------- ------------ ---------- -------------- ---------- -------- ----------
APPLI- PROPERTY POINT OF ASTM LIGHT HEAVY CRUDES HEAVIER
CABILITY APPLICA- TEST AND RESIDUAL
BILITY METHOD BLENDED FUELS
(A) (C) RESIDUAL
FUELS
------------ ---------------------------------------------- ------------ ---------- -------------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
3.1 Gas Kin. Viscosity, cSt, 100(degree)F
Turbine (37.8(degree)C), min Delivery D445 .5(d) 1.8 1.8 1.8
Require- Kin. Viscosity, cSt, 100(degree)F
ments (37.8(degree)C), max (e) Delivery D445 5.8 30 160 900
Kin. Viscosity, cSt, 210(degree)F
(98.9(degree)C), max (e) Delivery D445 -- 4 13 30
Specific Gravity, 60(degree)F
(l5.6(degree)C), max Delivery D1298 Report Report .96 .96(f)
Flash Point,(degree)F((degree)C), min (g) Delivery D93 Report Report Report Report
Distillation Temp. 90% Point,(degree)F
((degree)C), max Delivery D86 650(338) Report -- --
Pour Point,(degree)F((degree)), max Delivery D97 0 (-18) or Report Report Report
20 (7)
below
min.
ambient
------------ ---------------------------------------------- ------------ ---------- -------------- ---------- -------- ----------
Hydrogen, Wt %, min (k) Delivery (i) Report Report Report Report
Carbon Residue, Wt. % (10% Bottoms) max Delivery D524 .25 -- -- --
Direct Pressure Atomization
Carbon Residue, Wt. % (100% Sample) max Air Delivery D524 1.0 1.0 1.0 --
Atomization, Low Pressure
Carbon Residue, Wt. % (100% Sample), Delivery D524 -- -- Report Report
Air Atomization, High Pressure
------------ ---------------------------------------------- ------------ ---------- -------------- ---------- -------- ----------
Ash, ppm, max Combustor D482 50 50 Report Report
Trace Metal Contaminants, ppm, max (h) Combustor (i)
Sodium plus Potassium 1 1 1 1
Lead 1 1 1 1
Vanadium (untreated) .5 .5 .5 .5
Vanadium (treated 3/1 wt. ratio Mg/V) -- -- 100 500
Calcium 2 2 10 10
Other Trace Metals above 5 ppm Report Report Report Report
------------ --------------------------------------------------------------------------------------------------------------------
The specifications below apply only when specific environmental codes exist
------------ -------------------------------------------- -------------- ---------- ---------------------------------------------
3.2 En- Sulfur, Wt %, max Delivery D129 Compliance to any applicable codes.
viron- Nitrogen, Wt. %, max Delivery (i) Fuel-bound nitrogen may be limited to meet
mental any applicable codes on total NO(x) emission.
Code Minimum hydrogen level may be necessary to
Related Hydrogen, Wt. %, min. Delivery (i) meet any applicable stack plume opacity
Require- limits (k).
ments Ash plus vanadium content of ash-bearing
Ash plus Vanadium, ppm, max. Delivery (i) fuels may be limited to meet applicable
stack particulate emission codes (1).
------------ -------------------------------------------- -------------- ---------- ---------------------------------------------
</TABLE>
<PAGE>
NOTES TO TABLE 2
a. The fuel properties specified refer to the fuel at
different points in the overall system:
Delivery - Fuel as delivered to the turbine site.
Fuel Skid - Fuel at inlet of fuel skid at turbine.
Combustor - Fuel at turbine combustors.
b. Typical fuels within each general type are discussed in
Appendix A.
c. ASTM Book of Standards, Parts 23 and 24.
d. In the viscosity range of 0.5 cSt to 1.8 cSt, special fuel
pumping equipment may be required.
e. The maximum allowable viscosity at the fuel nozzle is 20
cSt for high pressure air atomization and 10 cSt for low
pressure air and direct pressure atomization. The fuel may
have to be preheated to reach this viscosity, but in no
instance shall it be heated above 275(Degree)F (1
35(Degree)C). (This maximum fuel temperature of
275(Degree) F is allowed only with residual fuels.) The
viscosity of the fuel at initial light-off must be at or
below 10 cSt.
f. A specific gravity of 0.96 is based on average fuel
desalting capability with standard washing systems. Fuels
with specific gravities greater than 0.96 may be desalted
to the required minimum sodium plus potassium limits by
using higher capability desalting equipment (with higher
attendant cost) or by increasing the gravity difference
between the fuel and wash water by blending the fuel with
a compatible distillate.
g. The fuel must comply to all applicable codes for flash
point.
h. A total ash less than 3 ppm is acceptable in place of
trace metal analysis.
i. No standard reference tests exist; methods used should be
mutually acceptable to General Electric and the user.
j. Water content of crude oils should be reduced to the
lowest level practical consistent with capability of
available fuel treatment equipment, to minimize the chance
of corrosion of fuel system components. In no case shall
the water content exceed 1.0 vol. %.
k. A minimum hydrogen content is set both to control flame
radiation in the combustor and to limit smoke emissions,
where the latter is required by local codes. The limits
are 12.0% minimum for true distillates and 11.0% for
Ash-bearing fuels (11.3% where the carbon residue exceeds
3.5%). In each case it is assumed that the proper
combustor and fuel atomization system are used.
Where the hydrogen content of the fuel is below these
limits, General Electric should be consulted for
appropriate action.
1. Local codes on total stack particulate emissions may set
an upper limit on the sum of the ash (nonfilterable) in
the original fuel plus the vanadium content. The vanadium
together with the required magnesium inhibitor may be a
major contributor to total stack particulate emissions. In
estimating these emissions for comparison with the code,
all of the following sources may have to be considered:
vanadium, additives, fuel ash and total sulfur in the
fuel; non-combustible particulates in the inlet air;
solids from any injected steam or water; and particles
from incomplete fuel combustion. Where an estimate of
stack particulate emissions is required, General Electric
should be consulted.
<PAGE>
IV. FUEL HANDLING AND TREATMENT
A. True Distillate Fuels
Light true distillate fuels normally have sufficiently low pour
points that preheating is not required under most ambient
conditions. Heavy true distillates, on the other hand, may have
high pour points due to high wax content or high wax melting
temperature which make preheating necessary to prevent filter
plugging. Both types of distillates may also require preheating to
meet the viscosity requirement at the fuel nozzle for proper
atomization.
True distillate fuels as refined have low water, dirt and trace
metal contaminant levels. Where subsequent transportation, handling
and storage are carefully managed, these low levels should persist
at the gas turbine. In locations where there is danger of
contamination such as salt bearing water, auxiliary fuel clean-up
equipment should be provided to restore the original quality.
In addition to potential hot corrosion from salt in water, water
accumulated at the bottom of a storage tank can also cause
problems. Micro-organisms tend to grow at the water-fuel interface
generating both chemicals corrosive to metals in the fuel system
and also slime which can plug fuel filters.
Adequate fuel storage and handling practices must be employed to
minimize water and other contaminants in the fuel. These include
settling the fuel before use, providing floating suction and
periodic removal of water from the bottom of the tank. In
applications where adequate settling periods can not be
accommodated, more rapid purification methods may be required.
Available purification equipment includes centrifuges and
electrostatic dehydrators. The overall fuel system design should
avoid slugs of water, and any clean-up system should have the
capability to remove such slugs.
B. Ash-Bearing Fuels
Depending on the physical properties and the trace metal
contaminant levels of these fuels, functions of the source and
refinery treatment, they usually require pretreatment before
burning in a gas turbine. Three basic steps in pretreatment are:
1. Preheating
2. Water washing for salt removal
3. Vanadium inhibitor addition
Preheating is used where it is necessary to: 1) raise the fuel
temperature sufficiently above its pour point to allow free flow
and to prevent filter plugging, and 2) to lower the fuel viscosity
to reduce the flow resistance and to provide proper atomization at
the fuel nozzles.
Desalting by water washing will be necessary with some crude oils
and is nearly always necessary with residual oils to reduce the
sodium plus potassium levels. Sodium and potassium can cause hot
corrosion of the turbine blading by sulfidation attack at the
operating temperatures of the turbine. Sodium and potassium can
also contribute to turbine fouling. Desalting is accomplished by
mixing the fuel with 3% to 10% potable water to extract the soluble
salts, followed by separation of the salt-laden water by
centrifugation or electrostatic coalescence. Washing also removes
some of the calcium depending on the specific chemical nature of
the calcium compounds. Lead is not removed by water washing.
<PAGE>
Vanadium can also cause hot corrosion of the turbine blading, but
it is not removed by water washing because it is present in the
fuel in a complex oil-soluble form. The corrosive action can be
inhibited by adding an approved magnesium additive to the fuel to
provide a minimum 3 to 1 weight ratio of magnesium to vanadium. It
is also recommended that this ratio not exceed 3.5 to 1 in order to
minimize deposition.
Periodic cleaning of deposits from turbine hot gas path section is
generally necessary when high ash content fuels are used. Cyclic
operation of the turbine may remove some the deposit by thermal
shock. General Electric should be consulted for approved cleaning
agents, water quality and cleaning procedures for those
applications where turbine cleaning is required.
V. NON-FUEL CONTAMINANTS
A. Air-Borne Contaminants
Contaminants in air can cause erosion, corrosion and fouling of the
compressor. These contaminants can also contain the same trace
metals as found in fuels and which cause corrosion to the hot
section.
Compressor erosion can be caused by sand or flyash; compressor
corrosion by noxious fumes such as HCl or H(2)S0(4) compressor
fouling by liquid or solid particles which adhere to the compressor
blading. Hot section corrosion can be caused by sodium from, e.g.,
sea salt, salt particles, carry-over of treatment chemicals used in
evaporative coolers, chemical process effluents; potassium from
flyash or fertilizers; lead from automobile exhausts; and vanadium
from residual fuel fired steam plants.
Specifically, with respect to hot section corrosion, the total of
Na, K, V and Pb should not exceed 0.005 ppm by weight in air. If it
is anticipated that this level will be exceeded, General Electric
should be consulted for recommendations on the selection and use of
proper air filtration equipment.
B. Water-Borne Contaminants
Water or steam that is used for NO(x) control or steam that is
injected to augment output should not contain impurities which
cause hot section deterioration or deposits. Specifically, the
total of Na + K + V + Pb should not exceed 0.5 ppm by weight in the
water or steam. If the total of these contaminants exceeds this
level, General Electric should be consulted with respect to water
or steam purification equipment and procedures.
In the case where contaminants are present in water or steam the
total limits in the fuel should be controlled such that the total
concentration equivalent in the fuel (from both sources) conforms
to the limits in Table 2.
Refer to the next section 5.3 for the method for calculating the
equivalent concentration in the fuel.
C. Non-Fuel Contaminant Relationships
The total contaminant level in the combustion products must be
controlled. The following relationship can be used to convert the
contaminants in air, steam/water and fuel to equivalent
contaminants in the fuel alone, assuming all are equally effective:
<PAGE>
(A/F) X(A) + (S/F) X(S) + X(F) = [ EQUIVALENT CONTAMINANTS IN FUEL ALONE ]
where:
A/F = AIR-TO-FUEL MASS FLOW RATIO
S/F = STEAM/WATER-TO-FUEL MASS FLOW RATIO
X/(F) = CONTAMINANT CONCENTRATION (WEIGHT) IN FUEL (PPM)
X/(A) = CONTAMINANT CONCENTRATION (WEIGHT) IN INLET AIR (PPM)
X/(S) = CONTAMINANT CONCENTRATION (WEIGHT) IN INJECTED
STEAM/WATER- (PPM)
VI. FUEL AND ADDITIVE EVALUATION AND SAMPLING
A. Fuel Evaluation Procedure
A supplier's fuel analysis shall be submitted to the General
Electric Gas Turbine Division covering all the fuel requirements
outlined in Table 2 of this specification. If the required
analytical services are not available to the user, he may make
arrangements to purchase such services from General Electric. See
Appendix C for fuel sampling and analysis requirements.
B. Requalification of Fuel: Fuel Changes
The fuel properties outlined in the specification and originally
agreed upon by General Electric Company and the user will determine
some of the equipment selection and certain operating conditions of
the gas turbine system. If at a later date the user desires to use
a fuel outside of the original agreed-upon limits, he should inform
the General Electric Company in writing. He should supply a
complete analysis for evaluation and requalification in a similar
manner as outlined above.
C. Additive Qualification
Additives used in gas turbine fuels such as vanadium inhibitors,
desalting demulsifiers, bacterial growth retardants or smoke
suppressants must meet the approval of the General Electric Gas
Turbine Division. One critical requirement of an additive is that
it has a low trace metal content (sodium, potassium, vanadium,
calcium and lead), so that the inhibitor does not add these
contaminants to the fuel.
VII. FUEL DESCRIPTIONS
A. True Distillates
1. Light True Distillates
Naphtha - A light volatile fuel with a boiling range between
gasoline and Light Distillate. The lower flash point and higher
volatility require special safety considerations. Its very low
viscosity may result in poor lubricity.
<PAGE>
Other Names:
JP-4, Jet B
0-GI Gas Turbine Fuel
Kerosene - A light, highly refined and slightly more volatile fuel
than Light Distillate. Normally more. expensive than No. 2
distillate.
Other Names:
1 -GT Gas Turbine Fuel
No.1 Burner Fuel
I -D Diesel Fuel
JP-5, Jet A
Range Oil, Lamp Oil
Light Distillate - Widely available volatile distillate fuel
with good combustion characteristics, being readily atomized
and clean burning.
Other Names:
2-GT Gas Turbine Fuel
No. 2 Burner Fuel
Diesel Oil
Marine Gas Oil
Domestic Fuel
Diesel Fuel - Closely related to Light Distillate fuel except
for additional requirements peculiar to diesel engine operation
such as Cetane Number.
Other Names:
2-D Diesel Fuel
2. Heavy True Distillate
An essentially ash-free petroleum distillate with the highest
boiling range. Heavy True Distillate has had limited and
localized availability, frequently being a refinery by-product.
This fuel may require heating for handling and forwarding due
to high pour point. It may also be more difficult to atomize
for optimum combustion.
Other Names:
Heavy Gas Oil
Navy Standard Distillate
B. Ash-Bearing Fuels
1. Crudes and Blended Residual Fuels
CRUDES - Crude oils from different geographical areas vary
widely in levels of trace metal contaminants, ash, sulfur and
wax and in such physical properties as viscosity, gravity and
distillation range. Most crudes will have flash points below 1
00(Degree)F (38(Degree)C) due to highly volatile components.
Some very low ash crudes, typified by Indonesian and North
African crudes, have 0 to 5 ppm of vanadium requiring minimal
or no inhibition. Other crudes for gas turbine application
range up to 100 ppm vanadium. Most crudes require desalting,
especially if water transportation has been used.
<PAGE>
BLENDED HEAVY DISTILLATE - Petroleum distillate contaminated
with or blended with lesser amounts of residual petroleum
products, but with vanadium contents of 5 ppm or less. They may
have wax contents requiring heating for pumping and filtering.
They may also require washing for desalting, especially if
water transportation has been used.
Other Names:
3-GT Gas Turbine Fuel
4-D Diesel Fuel
Marine Diesel Fuel
BLENDED RESIDUALS - Blended residuals lie between blended heavy
distillates and heavy residuals. They are commonly blended to
specific maximum sulfur levels to meet applicable codes.
Vanadium contents are in the 5 ppm to 100 ppm range normally.
These fuels require complete fuel treatment.
Other Names:
No. 4 Burner Fuel
No. 5 Burner Fuel
Light Residual Oil
Light Furnace Oil
Intermediate Bunker Fuel
2. Heavier Residual Fuels
Residual Fuels - These are low volatility petroleum products
remaining at the end of all various refinery distillation
processes. As such they contain nearly all of the ash-forming
materials present in the original crude oil plus some
additional that may be introduced in processing. They usually
contain high molecular weight hydrocarbons such as asphaltenes,
which can cause storage sludging problems. Residual fuels may
have been blended with low cost distillates to lower the sulfur
content and/or reduce the viscosity to insure pumpability.
All residual fuels require heating for pumping, filtering and
proper air atomization at the fuel nozzle. Residual fuels all
require washing to reduce the sodium level and vanadium
inhibition by addition of a General Electric approved Magnesium
base additive.
Other Names:
No. 6 Burner Fuel
Boiler Fuel
Bunker C. Fuel
Marine Fuel Oil
VIII. MEANING OF SPECIFICATION TESTS
Chemical tests are specified because slag-forming substances present in
oil ash can cause turbine corrosion and deposits, and the presence of
sulfur can result in corrosion of heat recovery equipment in the
turbine exhaust. Certain physical tests are specified because they
influence the operation of the gas turbine fuel handling, fuel
treatment and combustion systems.
<PAGE>
A. Ash and Trace Metal Contaminants
Ash-forming materials may be present in a fuel as oil-soluble
organometallic compounds, as water soluble salts in water dispersed
in the fuel or as solid foreign contaminants. The most common
ash-forming elements which can be present in fuels are aluminum,
calcium, iron, magnesium, nickel, potassium, sodium, silicon and
vanadium. Ash-forming materials are present to varying degrees in
crude oils depending on their geographical source. They are
concentrated in the residual fractions during the refining process,
leaving the light distillates contaminant-free; however,
ash-forming materials may be introduced later by contamination with
salt-bearing water or with other petroleum products during
transportation and storage.
Gas turbine operating experience has shown that some of the
ash-forming substances that may be present in the fuel can lead to
corrosion and deposit problems. These problems are most acute with
residual and crude oils which contain larger quantities of the
troublesome substances.
Corrosion can result from (1) vanadium, (2) sodium, (3) potassium
or (4) lead. These elements as well as calcium (and others such as
magnesium, manganese, iron, silicon and aluminum) can cause ash
deposits which are difficult to remove. Calcium can act as an
effective inhibitor for vanadium corrosion, but its deposition
tendencies have precluded its use.
In light distillate fuels, the total ash content is usually very
small, and trace metal contamination is essentially a sodium (salt)
problem. There are also usually traces of lead and calcium and
smaller traces of potassium and vanadium. It is advantageous to
purchase fuel within the specified contaminant limits and to
maintain this quality during transportation, handling and storage.
On-site desalting by contaminated water removal or by fuel washing
of distillate fuels with relatively high sodium levels is required
to keep corrosion of the hot gas path and the fuel system
components such as flow dividers and fuel pumps at a very minimum
level.
Crudes and contaminated distillates almost without exception have
high enough salt levels, or the risk of significant salt levels,
that they require desalting. The vanadium levels may also be
significant and require the addition of a magnesium-base inhibitor
to establish a ratio of 3 parts of magnesium to 1 part of vanadium
by weight.
Residual fuels have the highest ash and trace metal contaminant
levels usually necessitating complete fuel pretreatment: desalting
and vanadium inhibition by a magnesium-based additive (3Mg/lV). Due
to the less favorable physical properties of residual fuels, it is
not possible to consistently reduce the sodium to the low levels
obtainable in light crudes and distillates. The higher sodium
levels in treated residual fuels result in controlled corrosion and
deposit accumulation with some increase in maintenance. Calcium
levels may be high in some residual fuels, but they may be
appreciably lowered by the fuel treatment. Nickel, which is not
removed by fuel treatment, may also be high in certain residual
fuels and is somewhat beneficial in that it tends to neutralize
vanadium corrosion in much the manner of magnesium. Residual fuels
contain harmless aluminum, iron and silica as components of
suspended solids (dirt). A significant portion of these suspended
particles are removed either in the fuel washing or by fuel
filtration.
B. Sulfur
Sulfur occurs in fuels as combustible organic compounds yielding
sulfur oxides on combustion. These combine with any traces of
sodium or potassium present to form alkali sulfates; a principal
source of hot corrosion. The sulfur level in a fuel cannot be
lowered enough by refining to avoid the formation of alkali
sulfates, so that they must be controlled by limiting the sodium
and potassium levels in the fuel.
<PAGE>
Gas turbine installations utilizing exhaust heat recovery equipment
could have metal temperatures below the dewpoint of sulfuric acid,
and in these cases it is necessary to know the sulfur level in the
fuel to avoid acid corrosion of heat transfer surfaces. The maximum
allowable sulfur to avoid sulfuric acid condensation will depend on
the specific heat recovery equipment used. For fuels exceeding this
maximum level, the operating temperature of the heat recovery
equipment could be changed accordingly to avoid condensation of
acid products.
The sulfur level of liquid fuels is regulated in many localities as
a means of controlling the emission of sulfur oxides in the exhaust
gases.
Crude oils burned directly as fuels may also contain active sulfur
in the form of hydrogen sulfide or mercaptans. These substances,
especially in the presence of water, may cause corrosion to fuel
system components. For this reason, the water content of such fuels
should be kept as low as possible.
C. Nitrogen
Fuel-bound nitrogen in petroleum fuels comes largely from
organo-nitrogen compounds present in the original crude oil. In
some distillate fuels, fuel-bound nitrogen may also come from
additives such as stabilizers.
This chemically-bound nitrogen in the fuel will contribute to the
total nitrogen oxide pollutant in the exhaust gases, adding to the
nitrogen oxides from the direct combination of atmospheric nitrogen
and oxygen in the gas turbine combustion reaction. The particular
combustion system and operating conditions will affect the total
nitrogen oxide production from both atmospheric and fuel-bound
nitrogen.
D. Hydrogen
The percent combined hydrogen in a hydrocarbon fuel is a critical
factor in controlling stack smoke levels. In general, the higher
the hydrogen content in a liquid fuel the lower the smoke level
will be. As an example: paraffinic hydrocarbons with high hydrogen
contents (14-15%) have much less tendency to smoke than do aromatic
hydrocarbons which can have 10% or less hydrogen.
Hydrogen is usually determined by an accurate measurement of the
amount of water produced in the controlled combustion of a weighed
amount of fuel.
E. Carbon Residue
Carbon residue is measured as the residue remaining when a fuel
sample is completely distilled in a standard apparatus. To obtain
measurable residue with light distillates, the fuel is first
distilled to remove 90% (ASTM Method D86) by volume, and then the
carbon residue is determined on the "10% Bottoms."
One effect of a high carbon residue is carbon formation near the
fuel nozzle. To control this, air atomization is used in the
combustion of all but the lightest fuels, high pressure air being
required for the heaviest fuels.
F. Water and Sediment
Water and sediment in a fuel oil tend to cause fouling of the fuel
handling facilities and the gas turbine fuel system. Accordingly
they should be kept at as low a value as practicable and always
within the maximum values shown in this specification.
<PAGE>
The sediment in fuel can be gums, resins, asphaltic materials,
carbon, scale, sand or mud. It is mainly a problem in residual
fuels. Very few distillate fuels leave the refinery with more than
0.05%water and sediment. However, poor handling practices can
unnecessarily raise this level, and once an oil becomes
contaminated it may not be feasible to restore its original
cleanliness, such as the case of lead or vanadium contamination.
Gas turbines are normally equipped with high capacity 5 micron
filters. Since there are practical limits to the efficiency of
filtration systems, a fraction of the solids entering the filter
remains in the oil and can be an important factor in fuel system
component life.
Fuel storage tanks should be-designed with floating suctions that
are equipped with low level bottom limits to insure that the
suction is always some distance from the bottom to avoid the water
and sediment that collects there. The operator should drain the
bottom of the tank periodically to reduce the accumulation and the
risk of contamination. Automatic water drainage systems are
preferred.
G. Filterable Dirt
Filterable dirt is essentially the suspended solid particulate
matter in a distillate fuel which can cause fuel filter maintenance
problems. It is measured as the weight of solids held on a low
porosity filter during the filtration of a given volume of fuel.
H. Viscosity
The viscosity of fuel is a measure of its resistance to flow. It is
important in the fuel auxiliary equipment since it determines
pumping temperature, atomizing temperature and oil pump pressure.
In order to obtain proper operation of the gas turbine, the maximum
viscosity at the fuel nozzles must not exceed 10 centistokes for
pressure atomizing or low-pressure air-atomization fuel systems,
and 20 centistokes for high-pressure air-atomizing systems. When
these limits are exceeded, poor ignition characteristics, smoking,
unsatisfactory combustor exit temperature distribution, lowered
combustion efficiency or formation of carbon may occur. In most
cases, fuel heating must be employed to insure that these viscosity
limits at the fuel nozzle are met under all ambient conditions. In
all cases the fuel at initial light-off must be at or below 10 cSt
viscosity.
Minimum viscosity limits are imposed to safeguard the high pressure
fuel pump, which depends on the lubricating qualities of the fuel
for satisfactory operation. It should be noted that naphtha fuel
can have a minimum viscosity as low as 0.5 cSt at 100(Degree)F
(37.8 (Degree)C).
Special pumps may be required for viscosities below 1.8 cSt at
100(Degree) F.
I. Pour Point
The pour point of a fuel is the temperature at which it will barely
flow under standard conditions, and it is significant in connection
with fuels that may require heating to make them pumpable and with
fuels fed to a pump by gravity flow.
Petroleum oils when cooled may change to a plastic state as a
result of partial separation of wax (wax pour) or by congealing of
hydrocarbons (viscous pour) comprising the oil.
<PAGE>
A waxy fuel must be maintained at a high enough temperature to
ensure that all of the wax is in solution to prevent wax crystals
from clogging filters and lines. For distillates, wax separation
can usually be avoided by heating the fuel to at least
20-30(Degree)F (11-17(Degree)C) above the pour point. Waxy crude
oils used as fuels may require even higher temperature
differentials. Each type of waxy fuel must be evaluated
individually for minimum wax solution temperature. (For methods,
refer to page C2.)
J. Fuel Gravity
The specific gravity is not a critical property of gas turbine
fuels. Within a given fuel type it can indicate the chemical
composition of the hydrocarbons. As an example, a distillate with a
low specific gravity will be largely paraffinic whereas a high
specific gravity will be more aromatic. The latter would have a
greater tendency to smoke with other factors being equal.
Gravity can have an economic significance where the fuel is
purchased by volume since the total heat units will decrease with
decreasing specific gravity.
Residual fuels requiring washing will be more difficult to wash if
the specific gravity approaches that of water.
In the petroleum industry it is customary to use API gravity
instead of specific gravity for convenience since the API system
eliminates the small decimal difference between fuel samples
encountered in the use of specific gravity. It is always referenced
to 60(Degree)F (15.6(Degree)C).
API = [ 141.5 ] - 131.5
-------------------------------
SPEC. GRAY.
SOME TYPICAL EXAMPLES ARE:
<TABLE>
<CAPTION>
--------------------- ---------------------- -----------------
SPECIFIC GRAVITY API GRAVITY
--------------------- ---------------------- -----------------
<S> <C> <C>
Water 1.00 10.0
--------------------- ---------------------- -----------------
Kerosene 0.78-0.83 50-39
--------------------- ---------------------- -----------------
No. 2 Distillate 0.82-0.86 41-33
--------------------- ---------------------- -----------------
Crudes and Blends 0.80-0.92 45-22
--------------------- ---------------------- -----------------
Residual Oils 0.92-1.05 22-3
--------------------- ---------------------- -----------------
</TABLE>
K. Distillation
The heavy duty gas turbine is not sensitive to the distillation
characteristics of the fuel per se.
Extremely volatile fuels such as naphthas require the use of a
start-up fuel (light distillate) due to the low temperature at
which they vaporize, giving the possibility of combustible vapors
in the fuel lines.
Very high end-point fuels, approximately 1000(Degree)F
(538(Degree)C), can have excessive traces of vanadium which have
distilled over. For this reason pure distillate usually would have
a maximum end point specification. (This is also prevented by
setting a maximum vanadium level.)
<PAGE>
L. Flash Point
The flash point of a fuel is the temperature at which fuel vapors
will flash when ignited by an external flame.
The flash point is regulated for safety in fuel handling and
storage. By itself it is not critical to turbine operation although
it can affect the requirements for auxiliary equipment such as
motors, relays, heaters, etc.
Minimum permissible flash points are regulated by local, state or
federal laws.
Explosion-proofing of equipment may be required by local, state or
federal regulations or other applicable codes when the flash point
is below a minimum permissible value.
M. Thermal Stability
The thermal stability of an oil is a measure of its ability to
resist breaking down when heated to form deposits of resins and
sludge. This can occur in the fuel nozzle area and in fuel heaters
especially if the heater surface is far hotter than the surrounding
oil. This polymerization to form deposits is a time--temperature
phenomenon: being accelerated by high temperatures, long exposure
times and contact with air.
Thermal stability is most critical for high viscosity residual
fuels which require high temperatures to meet fuel atomization
viscosity requirements. The maximum allowable temperature specified
is 275(Degree)F (135(Degree)C).
N. Compatibility
Mixing certain residual type fuels with dissimilar residual fuels
or diluting residual type fuels with certain distillates may result
in the formation of tarry precipitates. The precipitation may occur
immediately after mixing or may take some time to develop. Heating
for prolonged periods of time will generally accelerate the
separation.
This tarry residue can accumulate in the bottom of tanks and can
settle out in fuel lines and on filters.
When the separation of residue occurs, it is usually in those
residual fuels which have a heavy asphaltene fraction present as a
collodial mestastable gel; such as those which have had an
intensive heating history during refining. The nature of a solvent
used for dilution (blending) is also important; paraffinic (low
specific gravity) distillates are more apt to cause precipitation
than aromatic (high specific gravity) distillates.
One method of testing for compatibility is to make a 50-50 mixture
of two oils and then subjecting the mixture to a thermal stability
test A simple screening test is the ASTM D2781, "Compatibility of
Fuel Oil Blends by Spot Test."
ASTM Specifications do not specify this property, again because it
has not been the practice of the oil suppliers to make this test.
These specifications do not call for the test on the light
distillate oils because it is very rare that they encounter
compatibility difficulties with one another. However, for the
heavier oils, it is necessary to start up and shut down the gas
turbine on a light distillate oil; therefore, it is advisable to
test the compatibility of the heavy oil/distillate mixture.
<PAGE>
O. Cetane Number
Cetane number is an index of the burning quality of fuel in a
diesel engine. It is specified only when the turbine fuel is also
used in a diesel starting engine. Cetane number is most accurately
measured in a special test engine, but a reasonably accurate value
can be obtained from a correlation between the specific gravity and
the 50% distillation point.
IX. FUEL ANALYSIS DATA REQUIREMENTS
To evaluate-a liquid fuel for gas turbine application certain physical
and chemical data are required. Basic specification requirements are
given in Table 2, Section 3. Certain other data are needed for
engineering purposes. Table 3 is a list of required data. Following is
pertinent information on some of the analytical tests.
A. Sampling
Since analyses of small traces of metals are involved, and since
some tests use small amounts of sample, it is very important that
the fuel sample is uniform and representative of the fuel as
received by the user or shipped by the supplier. If the fuel is
taken from a container, it should be thoroughly mixed mechanically
before sampling. For sampling from storage tanks, refer to ASTM
Standard Method for Sampling Petroleum Products, D-270-65.
The sample for analysis should be stored preferably in plastic or
plastic-lined metal containers. Avoid metal cans with soldered
seams and containers with seals (rubber) which can disintegrate and
contaminate the fuel. The container should only be about two-thirds
full so that it may be well shaken before taking analytical
samples. Heavy residual fuels should be in wide-mouth containers.
B. Healing Value
The heating value measured is the High (Gross) Heating Value, where
the water produced is condensed. The Low (Net) Heating Value is
obtained by calculation from the Higher Heating Value by one of
several methods including ASTM D 1405 and D240. The latter requires
an accurate value for percent hydrogen while the former requires an
aniline point (ASTM D1012) and specific gravity.
C. Viscosity
Viscosities at two temperatures are needed for a
viscosity-temperature relationship for the fuel; the two
temperatures normally being 100(Degree)F (37.9(Degree)C) and
210(Degree)F (98.9(Degree)C). If the pour point is between
70(Degree)F (21(Degree)C) and 90(Degree)F (32(Degree)C), the lower
temperature should be 122(Degree)F (50.0(Degree)C). For pour points
between 90(Degree)F (32(Degree)C) and 120(Degree)F (49(Degree)C),
the lower temperature should be 150(Degree)F (65.6(Degree)C).
D. Carbon Residue
Ramsbottom carbon residue (ASTM D524) is preferred as more
accurate. If the Contradson method (ASTM D189) is used, the results
should be converted to Ramsbottom (see D524).
<PAGE>
E. Trace Metal Analysis
Trace metal contaminant levels are usually measured by
spectrometric methods such as atomic absorption, flame emission or
a spark source spectrometry. The first two methods use a solvent
diluted fuel sample while the latter operates directly on the
original fuel. In any case, the reference standards must match the
fuel properties as closely as possible. For very accurate analyses
of vanadium and lead, it is better to ash the fuel and run the
spectrometric analysis on an aqueous solution of the treated ash.
In the ashing procedure, special care must be taken not to lose
these elements.
F. Wax Content and Wax Melting Point
Crude oils and heavy true distillates should be tested to determine
the minimum fuel temperature required to keep all of the wax in
solution.
One approach is to remove the wax from the fuel and then to
determine its melting point, which represents the maximum solution
temperature. There is no standard method for wax separation, but
there are several laboratory procedures which are satisfactory.
They all involve dilution of the fuel with a poor wax solvent and
then chilling to 0(Degree)F (-18(Degree)C) or lower to separate the
wax crystals which are filtered out at low temperature.
An instrumental procedure which measures the wax solution
temperature directly on the fuel is Differential Scanning
Calorimetry (DSC). This method is still being developed and has not
yet been successful with all crude oils.
For light distillate fuels, ASTM D 2500 Cloud Point or ASTM D3 117
Wax Appearance Point may be used.
<PAGE>
Table 3-- Fuel Analysis Data
<TABLE>
<CAPTION>
PROPERTY ASTM METHOD (1) MEASURED VALUE
<S> <C> <C>
Gross Heating Value, Btu/lb D240
Kin. Viscosity, cSt, 100(Degree)F (37.8(Degree)C) D445
Kin. Viscosity, cSt, 122(Degree)F (50.0(Degree)C) D445
Kin. Viscosity, cSt, 210(Degree)F (98.9(Degree)C) D445
Specific Gravity, 60(Degree)F (15.6(Degree)C) D1298
Specific Gravity, 100W (37.8(Degree)C) D1298
Pour Point, (Degree)F ((Degree)C) D97
Rash Point, (Degree)F ((Degree)C) D98
Distillation Range (Not on Residuals) D86
IBP (Degree)
10% (Degree)
20% (Degree)
30% (Degree)
40% (Degree)
50% (Degree)
60% (Degree)
70% (Degree)
80% (Degree)
90% (Degree)
EP (Degree)
Carbon Residue, Wt. % D524 _____________
Sulfur, Wt. % (Very Light Distillates) D1266 _____________
Sulfur, Wt. % (All Other Fuels) D129 _____________
Hydrogen, Wt. % _____________
Nitrogen, Wt. % _____________
Total Ash (2), ppm D482 _____________
</TABLE>
<PAGE>
Table 3-- Fuel Analysis Data (Cont'd)
<TABLE>
<S> <C> <C>
Trace Metals, ppm (2) _______________
Sodium
Potassium _______________
Vanadium _______________
Calcium
Lead _______________
Other Metals Over 5 ppm
Sediment & Water Vol. % D1796 _______________
Water, Vol. % D95 _______________
Filterable Dirt, mg/100ml D2276 _______________
Wax, Wt. % _______________
Wax, Melting Point, (Degree)F _______________
Cetane No. (Diesel Engine Start Only) D975 _______________
</TABLE>
(1) Book of ASTM Standards, Part 17
(2) A total ash less than 3 ppm is acceptable in place of trace metal
analysis
(3) Wax data only on crudes and heavy distillates
THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE>
GE INDUSTRIAL & POWER
SYSTEMS
GENERAL ELECTRIC COMPANY
ONE RIVER ROAD, SCHENECTADY NY 12345
518. 385.2211 TX: 145354
<PAGE>
APPENDIX F
REQUIREMENTS FOR WATER/STEAM PURITY IN GAS TURBINES
(GEK 101944)
<PAGE>
GEK 101944
APRIL1995
GE POWER SYSTEMS
GAS TURBINE
Requirements for Water/Steam
Purity in Gas Turbines
THESE INSTRUCTIONS DO NOT PURPORT TO COVER ALL DETAILS OR VARIATIONS IN
EQUIPMENT NOR TO PROVIDE FOR EVERY POSSIBLE CONTINGENCY TO BE MET IN CONNECTION
WITH INSTALLATION, OPERATION OR MAINTENANCE. SHOULD FURTHER INFORMATION BE
DESIRED OR SHOULD PARTICULAR PROBLEMS ARISE WHICH ARE NOT COVERED SUFFICIENTLY
FOR THE PURCHASER'S PURPOSES THE MATTER SHOULD BE REFERRED TO THE GE COMPANY.
<PAGE>
I. INTRODUCTION
Water/steam, fuel and air all carry contaminants which can cause serious damage
to hot gas path components if the levels at which they are present are not
controlled. This document identifies the contaminant limits for water/steam
entering gas turbines. Ultimately, the total contaminant loading allowed is
determined by the fuel specifications (GEI 41047, for liquids, and GEI 41040,
for gases), which identify all contaminants entering a gas turbine from all
sources. The concern for any contaminants entering the hot gas path is two-fold.
Will they cause hot corrosion, as for example do sodium and potassium salts, and
will they cause deposits, as for example do calcium salts and silica.
Water and/or steam is injected into the combustion system for NOx control and/or
power augmentation, in quantities comparable to fuel flow rates, and must meet
strict criteria for purity similar to those required for gas turbine fuels.
Furthermore, water/steam chemistries must be compatible with the materials used
in the piping which bring the fluids to the turbine.
Water also enters gas turbines with the compressor air. This may occur naturally
as from water ingestion in coastal or marine locations, or from rain, or from
water produced when humid air is cooled below its dew point at the compressor
inlet and a fog develops. Finally, water can enter a compressor as a result of
carryover from such devices as moisture separators or evaporative coolers.
Discussion of inlet air treatment is discussed in GER 3419. The effects of water
on compressor materials is discussed in GER 3601.
Of course, water of evaporation adds no contaminants to the incoming air, but
carry-over water adds the contaminants contained in the water.
Additional sources of water born contaminants which enter the turbine are
referenced in the following documents: compressor and turbine washing (GEI 41042
or GEK 103623), and water for dissolving Epsom salt, the heavy fuel vanadium
inhibitor (GEK 28122).
II. INJECTION WATER/STEAM SPECIFICATION
Table 1 gives criteria for acceptable water/steam for gas turbine injection. All
flows (air, water/steam, and fuel) into the turbine contribute to the
contaminants in the combustion gases, and hence to corrosion and deposits-in the
hot gas path. The fuel specification GEI 41047 states that the sum of the
contaminants from all sources, referred to the fuel must satisfy the fuel
specification. This part of the fuel specification, given in Table 2, forms the
basis for contaminant levels entering the gas turbine from all sources.
Dissolved oxygen, pH, solids, and additives, all quantities considered in the
water chemistry of boilers and steam turbines, must also be considered when
water/steam is injected into gas turbines.
Water treated with sodium compounds for pH or oxygen control should not be used
for injection into gas turbines or for attemperation of steam used for injection
into gas turbines. Such water can cause corrosion of the hot gas path
components, and also stress corrosion cracking of piping equipment. It should he
appreciated that very dilute solutions of some additives become concentrated
during operation, through stagnation and evaporation.
<PAGE>
This is especially true of NaOH, used sometimes for pH control. Attemperation
water, containing NaOH, has produced caustic deposits in 316 stainless steel
flex hose by evaporation, resulting in cracking. Units in which this has
occurred have reported fuel nozzle deposits, first stage nozzle deposits, and
bucket corrosion.
The preferred water sources are clean boiler condensate or demineralized make-up
water. Preferred steam sources are from steam turbines. This steam should
satisfy GEK 98965, which is a tighter restriction than given in Table 1. Steam
from non-steam turbine sources must satisfy Table 1. Volatile additives are
permitted for condensate pH control, such as ammonia, morphuline, and
cyclohexylamine. These additives do not add to the alkali burden of the turbine,
and will not accumulate in piping, valves, etc.
Deposit formation in the turbine from contaminants in injection water is also a
concern. In demineralization ion exchange systems a special situation may arise
in the case of silica. Silica absorbed by the anion exchanger may not be
completely removed during regeneration causing it to accumulate. Eventually,
leakage will occur, allowing silica discharge into the effluent and into the
turbine. Such occurrences have lead to combustion liner hole plugging and forced
outages. Prevention of silica breakthrough requires longer regeneration times at
higher temperatures, and effluent monitoring. ION EXCHANGE MANUFACTURERS SHOULD
BE CONSULTED. Another problem arises if silica is present in a colloidal form.
In this form it can pass through ion exchangers and it cannot be detected by
conductivity measurements. WATER TREATMENT EXPERTS SHOULD BE CONSULTED. THEY CAN
MAKE RECOMMENDATIONS CONCERNING PROPER TREATMENT.
III. LIMITS ON WATER QUALITY FOR EVAPORATIVE COOLING SYSTEMS
Water quality must be maintained in evaporative coolers in order to ensure good
long term system performance. Dirty water will foul the cooler media, eventually
resulting in carry-over and possible damage to the gas turbine. Also, water
which is very pure, such as demineralized make-up water, may degrade the
materials of the cooler. CONSULT THE OPERATION AND MAINTENANCE MANUAL FOR THE
EVAPORATIVE COOLER FOR SPECIFIC DETAILS.
To prevent excessive scaling of the cooler media water should be monitored to
maintain one of the stability indices, such as Langelier or Ryznar (See Nalco
Water Handbook, McGraw-Hill, 2nd edition, 1988).
When trace metals in the fuel, water or steam are not precisely known, a limit
for these contaminants in the inlet air of 0.005 ppm is nominally set (GER
3419). Carry-over limits on contaminants may be obtained from a mass balance on
the equivalent carry-over water for a specified contaminant level in the air(a).
Thus,
(1) W=A(X(a) /X(w))=0.005(A/ X(w))
where W and A are the flows of water and air, respectively, and X(w), and X(a)
are the concentrations (ppm) of the contaminants in the water and air (1),
respectively.
Figure 1 gives carry-over limits for gas turbine contaminants based on Equation
(1) for several air flows. For example, if the concentration of Na in the
make-up water is 100 ppm and the air flow is 300 lbs/sec, then 4 cc/sec would be
the limiting carry-over rate.
<PAGE>
IV. APPLICABLE REFERENCE DOCUMENTS
GEI 41047 Gas Turbine Liquid Fuel Specification
GEI 41040 Process Specification, Fuel Gases For Combustion in Heavy-Duty
Gas Turbines
GER 3419 Gas Turbine Inlet Air Treatment
GER 3601 Gas Turbine Compressor Operating Environment and Material
Evaluation
GEI 41042 Gas Turbine and Compressor Cleaning
GEK 103623 Gas Turbine Compressor Washing
GEK 28122 Specification For Magnesium Sulfate For Gas Turbine
GEK 98965 Steam Purity For Industrial Turbines
Nalco Water Handbook, Frank N. Kemmer, Editor, McGraw-Hill,
Second Edition, 1988
(a) Although, no standard method exists for sampling compressor air, EPA, 40 CFR
50, gives a number or methods for sampling particulate. Chemical analysis would
be according to EPA 200.7 for particular contaminants.
<PAGE>
TABLE 1. INJECTION WATER / STEAM PURITY MAXIMUM LIMITS
<TABLE>
<CAPTION>
METHOD
<S> <C> <C>
Trace Metals:
Sodium plus Potassium(1) 0.5 ppm EPA 200.7
Calcium 1.0 ppm EPA 200.7
Total Solids
Total dissolved solids 5.0 ppm EPA 160.1
Total suspended solids EPA 160.2
</TABLE>
(1) Other metals not normally encountered in water/steam but found in fuel oils,
such as vanadium and lead, or other alkali metals such as lithium, are also to
be included.
TABLE 2. TRACE METAL CONTAMINANT SPECIFICATION MAXIMUM LIMITS, ALL SOURCES
<TABLE>
<CAPTION>
CONTAMINANT CONTAMINANT LIMIT (PPMW)
REFERRED TO THE FUEL(1)
<S> <C>
Sodium plus Potassium 1.0
Lead 1.0
Vanadium 0.5
Calcium 2.0
</TABLE>
(1) The tabulated limits in parts per million by weight (ppmw) are for A / F =
50. For other A / F ratios multiply the tabulated limits by ((A / F + 1) / 51).
The total contamination referred to the fuel from all sources is determined from
the equation:
(A / F) X(a) + (W / F) X(w) + X(f) = Contamination (ppmw), all sources,
referred to the fuel, where A, W, F are air, water and fuel flows (lbs/sec),
respective; and X(a), X(w), X(f) are air, water and fuel contaminant
concentrations (ppmw), respectively.
<PAGE>
Figure 1. Limiting Carry-Over for
Minimizing Turbine Hot Corrosion
[GRAPHIC]
Sodium in Make-up Water (ppm)
<PAGE>
GE POWER SYSTEMS
GENERAL ELECTRIC COMPANY
ONE RIVER ROAD, SCHENECTADY, NY 12345
518. 385.2211 TX: 145354
<PAGE>
APPENDIX H
M&D SYSTEM CONDITIONS
<PAGE>
APPENDIX H
M&D SYSTEM CONDITIONS
As part of the M&D System, Seller or one of its affiliates shall place On-Site
Monitors (OSM) on the Covered Units. These OSMs will be connected by a telephone
line to the GE Monitoring and Diagnostic Center located in Schenectady, New
York, and are intended to assist Seller to more efficiently manage its
obligations under this Contract.
The OSM consists of the following components to be installed at the Site:
1. One Windows NT based computer system (CPU, Monitor, Keyboard, Trackball,
etc.).
2. One internal modem per computer system to provide remote access.
3. The required interconnection devices such as short haul modem pairs, etc.
4. The software package and configuration to collect and monitor data from the
turbine control system and other specified devices.
5. An external DAT tape backup device.
The following conditions shall apply to the OSM:
1. Seller assumes no greater or lesser liability than it has under the terms of
the Contract as a result of the application of the OSMs to the Covered Units.
Further, Seller shall not be responsible, whether in contract, tort (including
strict liability or fault), warranty or otherwise for failing to monitor the OSM
or failing to notify Buyer of abnormalities.
2. The OSM equipment that will be placed on the Covered Units is passive and
will not interfere in any way with the operation of that equipment.
3. Title to the OSM hardware and software is and shall remain with Seller or its
affiliates. Seller does not sell or license the OSM, and does not grant any
ownership or license interest in the OSM to Buyer by virtue of this program.
Buyer acknowledges that, in addition to Seller-owned software, the OSM contains
certain third party software, which may include, but is not limited to, software
obtained by Seller from OSI Software, Inc., which Seller either owns or is
licensed to use and that Seller does not extend any license to any such software
to Buyer. Buyer agrees not to alter the hardware, software, connections or
configuration of the OSM or its connection to the data stream, and will not add
tags, links to other devices or systems or otherwise change the OSM setup,
functioning and configuration, or connectivity.
4. The OSM will include standard data displays for data visualization which
Buyer may view, and Seller will furnish to Buyer the password(s) necessary to do
so. However, Seller assumes no liability whatsoever for any action, or inaction,
which Buyer elects as a result of viewing this data.
5. Buyer agrees not to attempt to access any data, displays, information,
software or other parts or functions of the OSM that have not been specifically
made available to it by Seller, whether or not protected or restricted.
<PAGE>
6. Buyer agrees not to disassemble, reverse engineer, reverse assemble,
decompile or otherwise attempt to derive the source code of any OSM software,
including third party software.
7. In the event that Buyer uses, accesses or alters any data, displays,
information, software or hardware, or otherwise acts in violation of this
agreement, including unauthorized use of any third party software such as, but
not limited to, software of OSI Software, Inc., Seller and the third party
software provider(s) shall have the right to recover damages from Buyer and
Buyer shall indemnify and hold harmless GE from all claims, losses, damages,
judgments, expenses, including attorneys' fees and litigation expenses, arising
out of or related to any such violation of this agreement by Buyer. Buyer
further understands and
<PAGE>
acknowledges that third party software providers may be able to assert certain
other property rights, such as copyright rights, on their own behalf.
8. Buyer shall make a phone line available for Seller connection to the OSM
assigned specifically for use of the OSM. This phone line shall not be used by
Buyer or others for any other communications or purpose. The said phone line
shall be and remain continuously connected to the OSM. The phone line must be
direct and not through a switchboard. Buyer shall not connect, or allow to be
connected, to the OSM any other phone line. Buyer shall not initiate or allow
any remote access to the OSM, whether through the assigned phone line or
otherwise, or allow others to do so.
9. Buyer does not have any right or responsibility to maintain or repair the
OSM.
10. Seller will provide instruction to Buyer's personnel on-site concerning the
OSM features to which Buyer will have access.
11. Buyer shall supply and maintain an electric power source for the OSM. Seller
shall have a right to access the OSM and its connections at all reasonable
times.
12. Buyer will ensure that each of their employees who may come in contact with
the OSM is made aware of the Buyer commitments described herein, and abides by
them.
13. Although the OSM program is to support Seller's obligations under the
Contract, and will be removed at the conclusion of that program, the date of
removal shall have no bearing on determining the term specified in the Contract.
<PAGE>
APPENDIX I
ENGINEERING SERVICES RATES
<PAGE>
APPENDIX I-1
ENGINEERING SERVICES RATES
GLOBAL POWER GENERATION SERVICES DEPARTMENT
ENGINEERING SERVICES
EXTERNAL COMMERCIAL RATES
EFFECTIVE JANUARY 1, 1999
<TABLE>
<CAPTION>
------------------------------ -------------------------------------- ---------------------------------------
DEMAND RATE ADVANCED COMMITMENT RATE
------------------------------ -------------------------------------- ---------------------------------------
------------------------------ ---------------- --------------------- -------------------- ------------------
RATE CLASSIFICATION Straight Time Overtime Straight Time Overtime
$/HR $/HR $/HR $/HR
------------------------------ ---------------- --------------------- -------------------- ------------------
------------------------------ ---------------- --------------------- -------------------- ------------------
<S> <C> <C> <C> <C>
Field Engineering Service [*] [*] [*] [*]
------------------------------ ---------------- --------------------- -------------------- ------------------
------------------------------ ---------------- --------------------- -------------------- ------------------
Lead Field Eng. Service [*] [*] [*] [*]
------------------------------ ---------------- --------------------- -------------------- ------------------
------------------------------ ---------------- --------------------- -------------------- ------------------
Specialty Field Eng. Service [*] [*] [*] [*]
------------------------------ ---------------- --------------------- -------------------- ------------------
------------------------------ ---------------- --------------------- -------------------- ------------------
Site Management Service [*] [*]
------------------------------ ---------------- --------------------- -------------------- ------------------
------------------------------ ---------------- --------------------- -------------------- ------------------
Consulting Analyst Service [*] [*]
------------------------------ ---------------- --------------------- -------------------- ------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
------------------------------ ---------------- --------------------- -------------------- ------------------
Performance Test Eng. Service [*] [*] [*] [*]
------------------------------ ---------------- --------------------- -------------------- ------------------
------------------------------ ---------------- --------------------- -------------------- ------------------
Instrumentation Specialty [*] [*] [*] [*]
Service
------------------------------ ---------------- --------------------- -------------------- ------------------
-------------------------------------------------------------------------------------------------------------
Advance Commitment rates apply for purchase orders received at least 90 days
prior to start of service. A minimum charge of 8 hours times the above
straight time rates will be billed for all services.
-------------------------------------------------------------------------------------------------------------
</TABLE>
INSTALLATION AND MAINTENANCE SERVICES
FIELD ENGINEERING: This service is defined as technical advice and counsel from
Field personnel based on good engineering, manufacturing, installation and
operation practices as applicable to the equipment. To the extent specified
during performance of work, such services may also include testing, adjustment,
programming and other similar services. Field Engineering Service does not
include supervision or management of Purchaser's employees, agents, or other
contractors.
LEAD FIELD ENGINEERING: This service includes responsibility for the direction
of the activities of one or more field engineers during the erection, assembly,
check-out, start-up, maintenance, inspection, or repair of equipment and
systems.
SITE MANAGEMENT: This service includes all management responsibilities including
planning, organizing, integrating and monitoring of resources such as labor,
supervisors, tools and technical assistants as required to complete the
workscope.
PERFORMANCE TEST ENGINEERING: This Service is for technical direction of
contractual performance tests conducted by GE
INSTRUMENTATION SPECIALIST: This service is the calibration and installation of
performance test instrumentation and is provided only in conjunction with other
performance test engineering services.
SPECIALTY SERVICES
GENERATOR: Field engineers who have completed training and are experienced in
the inspection, test and repair of generator equipment.
LASER ALIGNMENT: Specialists utilizing proprietary digital laser alignment
equipment, technology and fixtures, and GE fleet data, to optimize internal
component alignment and potentially provide significant reductions in outage
duration over conventional alignment methods.
GAS/STEAM PATH: These services determine the thermodynamic losses on a stage by
stage basis and feature a detailed inspection of the turbine steam/gas path once
the upper-half shell and casings have been removed. Strips. Results of the
inspection give the financial benefits of repairs or replacement parts that
allow an operating plant to make repair/replacement decisions during the outage.
START-UP/CONTROLS: Specialists that perform commissioning, start-up and
troubleshooting of gas and steam turbine generator control systems.
GAS TURBINE DLN: Specialist skilled in the proper methods required for properly
balancing the Dry Low Nox
<PAGE>
system to optimize reductions in gas turbine emissions and optimize life
expectancy of combustion system components.
EXCITATION: Specialist skilled in the checkout, startup and troubleshooting of
excitation systems interfacing circuits, breakers, and power systems.
VIBRATION: Specialist experienced in the areas of vibration data acquisition,
analysis, and has the skills required to perform a diagnostic balance program,
make recommendations, and install balance weights.
STATIC STARTER: Specialists skilled in commissioning, startup and
troubleshooting of static start/load commutating inverter (LCI) equipment.
EMERGENT TECHNOLOGY: Specialist with skills in an area involving new and/or
emergent technology that is not specifically covered by the Specialist
categories listed above.
CONSULTING ANALYST: Technical assistance of personnel not normally classified as
field personnel for the solution of problems that require highly specialized
background and experience.
DIAGNOSTICS: Specialist skilled in performance diagnostic tests and diagnostic
data analysis, such as plant evaluations, equipment performance services and
general consulting for plant performance issues.
PROFESSIONAL WITNESS: This service is defined as technical direction and
coordination of performance tests not conducted by GE.
NOTES:
1. The normal workweek is five consecutive eight hour days. Time in excess
of the normal workweek and GEII holidays, will be billed at the
overtime rate.
2. Travel time will be charged at the applicable hourly rate from the
Field Engineer's point of origin to the jobsite and return.
3. Travel and Living (T&L) for the Continental U.S.A. will be billed for
any portion of a day worked, as follows, based on the distance from the
GEII office responsible for providing service:
40 miles or less: [*] per day per employee
Greater than 40 miles: [*] per day per employee
Air Travel Cost plus 15% administrative adder
4. T&L for Alaska, Hawaii, and international locations, including air
travel, will be billed at cost plus 15% administrative adder.
5. Purchased Craft Labor & MATERIALS (PL&M) WILL BE BILLED AT COST PLUS
25% ADMINISTRATIVE ADDER.
6. Consult with the local GEII office to determine any taxes, fees, or
VAT that may be in addition to the above rates.
7. Consult with local GEII office to determine applicable charges for
special tooling and/or test equipment.
<PAGE>
APPENDIX I-2
G.E. POWER SYSTEMS
CRAFT LABOR
<TABLE>
<CAPTION>
------------------------------------- ----------------------------------- -----------------------------------
Labor Classification Straight Time Overtime
------------------------------------- ----------------------------------- -----------------------------------
<S> <C> <C>
------------------------------------- ----------------------------------- -----------------------------------
Foreman [*] [*]
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
Mechanic [*] [*]
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
Helper A/B [*] [*]
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
Clerk [*] [*]
------------------------------------- ----------------------------------- -----------------------------------
</TABLE>
Note 1: The straight time rate is applicable to the first eight (8)
consecutive hours worked each working day, Monday through Friday,
excluding holidays.
Note 2: The overtime rate is applicable to all time worked in excess of
eight (8) hours of each working day, Monday through Friday, and all
hours worked on Saturday, holidays and Sundays.
<PAGE>
APPENDIX I-3
Inspection & Repair Services
Domestic External Commercial Rates
Effective January 1,1999
<TABLE>
<CAPTION>
--------------------------------------- ----------------------- ------------------------------ ----------------------------
Personnel Classification Straight Time Rates Overtime Double Time
--------------------------------------- ----------------------- ------------------------------ ----------------------------
--------------------------------------- ----------- ----------- ------------------------------ ----------------------------
Demand 90-Day Weekday & Saturday Rates Sunday & Holiday Rates
Hourly Advance Demand90-Day Demand90 Day
Rates Rate
Advance Advance
--------------------------------------- ----------- ----------- ------------------------------ ----------------------------
--------------------------------------- ----------- ----------- ------------------------------ ----------------------------
<S> <C> <C> <C>
Technical Consultant [*] [*] [*] [*] [*] [*]
Special Eng or Project Supervisor [*] [*] [*] [*] [*] [*]
Working LeaderTurbineTechnician [*] [*] [*] [*] [*] [*]
Turbine Technicians
Steam [*] [*] [*] [*] [*] [*]
Gas-Frame 3/5 [*] [*] [*] [*] [*] [*]
Gas-E class, 6B [*] [*] [*] [*] [*] [*]
Gas-F technology [*] [*] [*] [*] [*] [*]
Working Leader Generator Winder [*] [*] [*] [*] [*] [*]
Generator Winder [*] [*] [*] [*] [*] [*]
Working Leader Craftsman [*] [*] [*] [*] [*] [*]
Craftsman [*] [*] [*] [*] [*] [*]
All Other General [*] [*] [*] [*] [*] [*]
--------------------------------------- ----------- ----------- ------------------------------ ----------------------------
</TABLE>
o Overtime billing rates of 150% will apply for all overtime
work performed in excess of eight (8) hours of combined work
and/or travel on Mondays through Friday except observed
holidays, and for work and/or travel performed during the
first twelve (12) hours on a Saturday which is not an observed
holiday. Overtime billing rates of 200% will apply for work
performed in excess of twelve (12) hours on weekdays and
Saturday, and for all work performed on Sundays and Holidays.
o Travel time billing rates will be billed at straight time
hourly rates for all travel time on weekdays (Monday Through
Friday) that are not observed holidays. Overtime and Saturday
hourly rates will be billed for all travel time on Saturdays,
Sundays and observed holidays. No double time will be billed
for hours spent in travel, even though labor agreements
require that the individual is paid at a higher rate.
o Minimum billing for on-site work will be four (4) hours for
each worker including travel and work time regardless of
actual time worked. Over four (4) hours up to eight (8) hours
will be billed at eight (8) hours.
[*] The remaining pages of Appendix I have been omitted and filed separately
with the Securities and Exchange Commission as part of a Confidential
Treatment Request.
<PAGE>
APPENDIX J
INITIAL OPERATIONAL SPARE PARTS
<PAGE>
APPENDIX J
INITIAL OPERATIONAL SPARE PARTS
Seller shall provide the following Initial Operational Spare Pans, on site prior
to the Performance Start Date, to support the Sellers obligations in this
Contract. Buyer is responsible for the replenishment of this inventory and will
provide them to Seller at no cost per the provision of this Contract.
The Summary of the prices for the Initial Operational Spares is:
Gas Turbine Operational Spares
Gas Turbine Accessory Module Spares
Gas Turbine Generator Operational Spares
Excitation Spares
Spare Mark V panel with common spares
Static Start System Operational Spares
TOTAL [*]
[*] The remaining pages of Appendix J have been omitted and filed separately
with the Securities and Exchange Commission as part of a Confidential
Treatment Request.
<PAGE>
APPENDIX K
INITIAL SPARE PARTS
<PAGE>
APPENDIX K
INITIAL SPARE PARTS
Seller shall provide the following Initial Spares, on site prior to the
Performance Start Date, to support the Sellers obligations in this Contract for
the Price specified in Appendix A, Section 6.6.
<TABLE>
--------------------------------------------- -----------------
<S> <C>
Fuel Nozzle Assembly without Tips (1 set)
--------------------------------------------- -----------------
Combustion Liners & Cap Assembly (1 set)
--------------------------------------------- -----------------
Transition Pieces (1 set)
--------------------------------------------- -----------------
Fuel Nozzle (1 set)
--------------------------------------------- -----------------
TOTAL [*]
--------------------------------------------- -----------------
</TABLE>
<PAGE>
APPENDIX L
TECHNICAL ADVISOR RESPONSIBILITIES
<PAGE>
APPENDIX L
TECHNICAL ADVISOR RESPONSIBILITIES
The LTSA Service Director serves as the single point GE contact for the Customer
for all turbine generator services for the duration of the contract. The Service
Director will coordinate outage activities, conduct periodic meetings, provide
responses to technical inquiries, and work with the Customer to meet the
Critical to Quality (CTQs) initiatives set forth in the contract. The Service
Director's responsibilities include, but are not limited to, the following:
- Coordinate the Power Generati6ii Services (PGS), Apparatus Service
Department (ASD), and Parts Center activities for the LTSA contract
responsibilities and additional Customer extra work activities related to
the turbine generator.
- Conduct Maintenance Planning Meetings, Pre-Outage Meetings, and Post-Outage
Meetings.
- Conduct contract Quarterly Review Meetings which outline LTSA activities
and unit performance.
- Order and track parts for the LTSA outages and inventory. A parts
management system will include all spare parts within GE scope and identify
their storage location or source of availability.
- Forward Technical Information Letters (TILs) and Engineering Change Notices
(ECNs) to the customer and plan the implementation of any recommendations
from these documents.
- Track the repair of turbine generator parts in the ASD facilities and
maintain a status chart of the parts in repairs.
- Respond to Customer technical inquiries utilizing the Power Answer Center
to access the appropriate Engineering and Commercial personnel.
- Provide information regarding the latest advancements in Conversion,
Modification, and Upgrade (CM&U) opportunities to the customer and assist
with implementation of any such CM&Us.
- Work with the plant O&M staff to develop maintenance schedules which
optimize plant reliability and availability.
- Maintain a unit operating history for the turbine generator sets.
<PAGE>
- Identify Critical to Quality (CTQs) which need improvement and structure
projects and action items to address the needs.
- Conduct periodic site visits to assess the operating condition of the units
and address any concerns of the plant Operations and Maintenance personnel.
- Respond to forced outages to insure the best response time and provide the
necessary resources to restore the unit to operating conditions in a timely
manner.
<PAGE>
APPENDIX M
REDACTED POWER PURCHASE AGREEMENT
