WSPP Draft May 3, 2013
For Discussion Only
SERVICE SCHEDULE S
SPECIFIED SOURCE ENERGY TRANSACTIONS
S-1
Introduction; Transaction Documentation; and Rules of Construction. This Service
Schedule S states terms and conditions applicable to Specified Source Transactions
entered into by Parties under the Agreement.
S-1.1 Documentation. Each Specified Source Transaction shall be documented in a
Confirmation.
Annex [ ] is a Confirmation template for Specified Source
Transactions, which Annex the Parties may modify. The Parties may agree that a
Confirmation for Specified Source Transactions is subject to any master
Confirmation or other agreement between the Parties. A Confirmation for a
Specified Source Transaction must be a Documentary Writing to be given legal
effect [subject to review with CARB].
S-1.2 Contract Documents.
The Agreement, Service Schedule S, other Service
Schedules to the Agreement to the extent Service Schedule S makes them
applicable, and the fully executed Confirmation comprise a contract for a
Specified Source Transaction. Any conflicts between or among the Agreement,
Service Schedule S, and the Confirmation shall be resolved in the following order
of control: first, the Confirmation; second, Service Schedule S; and third, the
Agreement.
S-1.3 Definitions. Definitions stated in this Service Schedule and definitions contained
in the Agreement apply to this Service Schedule S.
Any conflicts among
definitions contained in these documents shall be resolved in accordance with
Section S-1.2.
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S-1.4 Rules of Construction
S-1.4.1
The Annex[es] of this Service Schedule are incorporated into and
made a part of this Service Schedule S, as though set forth fully herein.
S-1.4.2
The word “including” shall mean “including but not limited to.”
Unless otherwise specified, the word “Section” refers to a section of
this Service Schedule S and includes all subparts of the specified
section.
S-1.4.3
Subject to any legal restrictions applicable to a Party or the Specified
Source Transaction, the Parties to a Specified Source Transaction may
agree to vary any term or condition of this Service Schedule S or the
Agreement for that Specified Source Transaction. Provisions in this
Service Schedule S concerning a variance, such as “unless otherwise
agreed,” shall not prejudice the generality of the preceding sentence,
provided, that the Parties shall not vary Section C-3.6 of Service
Schedule C, Section B-3.6 of Service Schedule B, and Section A-3.7
of Service Schedule A.
S-2
Specified Source Transactions; Confirmations.
S-2.1 Specified Source Transaction. A “Specified Source Transaction” is a purchase
and sale of the energy, or capacity and associated energy produced by a Specified
Source or Asset-Controlling Supplier (“ACS”) as those terms are used in the
CARB Regulations (California Global Warming Solutions Act of 2006
(Assembly Bill 32; Stats. 2006, Ch. 488); California Cap On Greenhouse Gas
Emissions and Market-Based Compliance Mechanisms, Cal. Code Regs. tit. 17,
§§ 95801 et seq.; Mandatory Greenhouse Gas Emissions Reporting, Cal. Code
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Regs. tit. 17, §§ 95100 et seq. (collectively, the “CARB Regulations”)). The
Firmness Commitment may be one of the options described in Section S-2.3 or as
the Parties may otherwise agree.
S-2.2 Confirmations. In addition to other terms and conditions to which the Parties
may agree, the Confirmation for a Specified Source Transaction must identify the
Specified Source, including, among other things, the facility and/or unit name(s),
the facility’s address, the name of the facility owner and operator, and the fuel
type, or the ACS, and include the Standard Confirmation Provisions (Seller,
Purchaser, period of delivery, schedule, delivery rate, delivery point(s), Firmness
Commitment, contract quantity, price, transmission path (if any), and date of the
Confirmation).
S-2.3 Firmness Commitment. The “Firmness Commitment” is any of the following
defined products or other product to which the Parties may agree, as specified in
the Confirmation.
S-2.3.1
Firm Specified Source Capacity/Energy Sale or Exchange Service.
“Firm Specified Source Capacity/Energy Sale or Exchange Service” is
a sale of capacity and associated energy or exchange service in which
the Seller has a firm obligation to deliver the energy from the
Specified Source or ACS designated in, and otherwise pursuant to, the
Confirmation.
A remedy for non-performance by the Seller or
Purchaser is available under Section S-9, except in the event and to the
extent of Uncontrollable Force. The terms and conditions of Service
Schedule C apply to Firm Specified Source Capacity/Energy Sale or
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Exchange Service as the Parties may in the Confirmation modify such
terms and conditions, subject to the proviso stated in Section S-1.4.3.
S-2.3.2
Resource Contingent Specified Source Capacity/Energy Sale or
“Resource Contingent Specified Source
Exchange Service.
Capacity/Energy Sale or Exchange Service” is a sale of capacity and
associated energy or exchange service in which the Seller has a
resource contingent obligation to deliver the energy from the Specified
Source or ACS designated in, and otherwise pursuant to, the
Confirmation. This service is intended to have assured availability;
however, scheduled delivery may be interrupted or curtailed as
follows: [drafting note- following taken from B-3.9; REC Service
Schedule provides concepts for possible alternatives]:
(a)
By the Seller by giving proper recall notice to the Purchaser if the
Confirmation contains recall provisions,
(b)
By the Seller when all or a portion of the output of the Specified
Source designated in the Confirmation is unavailable, by an
amount in proportion to the amount of the reduction in the output
of such Specified Source, unless otherwise agreed by the
schedulers,
(c)
By the Seller to prevent system separation during an emergency,
provided the Seller has exercised all prudent operating
alternatives prior to the interruption or curtailment,
(d)
Where applicable, by the Seller to meet its public utility or
statutory obligations to its customers, or
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(e)
By either the Seller or the Purchaser due to the unavailability of
transmission capacity necessary for the delivery of scheduled
energy.
Subject to the conditions for interruption or curtailment stated in (a)
through (e) above and except in the event and to the extent of
Uncontrollable Force, a remedy for non-performance by the Seller or
Purchaser is available under Section S-9. The terms and conditions of
Service Schedule B apply to Resource Contingent Specified Source
Capacity/Energy Sale or Exchange Service as the Parties may in the
Confirmation modify such terms and conditions, subject to the proviso
stated in Section S-1.4.3.
S-2.3.3
Firm Energy Contingent Specified Source Capacity/Energy Sale
or Exchange Service. “Firm Energy Contingent Specified Source
Capacity/Energy Sale or Exchange Service” is a sale of capacity and
associated energy or exchange service in which the Seller has a
resource contingent obligation to deliver the energy from the Specified
Source or ACS, but if the service is interrupted or curtailed due to any
of the events described in 2.3.2(a) through (e), then to the extent of
such interruption or curtailment, a firm obligation to deliver the energy
from any facility.
A remedy for non-performance by the Seller or
Purchaser is available under Section S-9. The terms and conditions of
Service Schedule B apply to this transaction, except that in the event
and to the extent of interruption or curtailment, Service Schedule C
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shall apply. The Parties may in their Confirmation modify such terms
and conditions, subject to the proviso stated in Section S-1.4.3.
S-2.3.4
Specified Source Economy Energy
(a)
A “Specified Source Economy Energy Transaction” is a sale of
energy pursuant to the Confirmation in which the Seller has
agreed to deliver energy from the Specified Source or ACS
designated in the Confirmation.
A remedy for non-
performance is available under Section S-9, except that the
Seller may refrain from delivery and the buyer from accepting
the energy for any or no reason.
(b)
The terms and conditions of Service Schedule A apply to the
purchase and sale of energy as modified herein and as may be
modified in the Confirmation, subject to the proviso stated in
Section S-1.4.3. Service Schedule A Section A-3.3 is modified
to state the following:
Energy schedules may be modified by the Purchaser or
Seller with not less than a thirty (30) minute notice
before the hour in which the modification is to occur,
unless otherwise agreed or unforeseen system operating
conditions occur, or as otherwise required by, or
pursuant to customary practice in, the applicable
regional reliability council.
Seller shall notify
Purchaser of volumes to be delivered no later than
thirty (30) minutes before the hour in which delivery is
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to occur unless otherwise agreed or such notification is
infeasible
due
to
unforeseen
system
operating
conditions.
S-3
Actions Required of Parties to Assure Performance.
[Drafting Comment: To be discussed.]
S-4
Governing Law; Change in Law.
S-4.1 Governing Law. The laws of the State of California shall apply to all Specified
Source Transactions entered into by Parties under the Agreement.
S-4.2 Change in Law.
S-4.2.1
Definitions.
(a)
“Change in Law” means any addition or amendment, by a
Governmental Authority, to any laws, rules, regulations,
orders, or judicial precedent, that applies to the Specified
Source Transaction, that is enacted or issued after the Effective
Date and nullifies the crediting to the Purchaser of the emission
factor of the designated Specified Source.
An addition or
amendment that is enacted or issued before the Effective Date
but effective on or after the Effective Date is not a Change in
Law.
[Drafting comment: Consider whether we need (b) and (c) for a
specified source transaction. Do we wish to cover regulatory
risks other than crediting at the specified emission factor? This
question flows through the rest of S-4.]
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(b)
“Regulatorily
Continuing”
means
a
Specified
Source
Transaction in which the crediting to the Purchaser of the
emission factor of the designated Specified Source conforms to
the requirements of the CARB Regulations as such
requirements exist on the Effective Date and the delivery date,
including requirements modified or added by a Change in Law.
(c)
“Not Regulatorily Continuing” means a Specified Source
Transaction in which the crediting to the Purchaser of the
emission factor rate of the designated Specified Source
conforms to the requirements of the CARB Regulations as such
requirements exist on the Effective Date only, and the
Specified Source Transaction is not required to conform to
requirements modified or added by a Change in Law.
S-4.2.2
Default Designation as Regulatorily Continuing.
A Specified
Source Transaction shall be Regulatorily Continuing unless the Parties
specify in the Confirmation that the Specified Source Transaction is
Not Regulatorily Continuing.
S-4.2.3
Effect of Change In Law in Regulatorily Continuing Specified
Source Transaction.
(a)
If a Change in Law occurs in a Regulatorily Continuing
Specified Source Transaction, Seller shall be obligated to make
reasonable efforts to attain compliance, the costs of which shall
not be required to exceed any cost cap specified in the
Confirmation.
If despite such efforts to attain compliance,
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including reasonable expenditures, Seller cannot obtain
compliance and Purchaser refuses to accept delivery due to the
Change in Law, Seller shall not be liable for damages under
Section S-9.
(b)
In the event Purchaser refuses to accept delivery under Section
4.2.3(a) and Seller has delivered energy to Purchaser under the
Confirmation, Purchaser shall not be relieved of its obligation
to pay for such energy, which payment shall be either at the
price allocated to energy in the Confirmation, if any, and if no
allocation is made, then at an amount equal to the Replacement
Price.
S-4.2.4
Amendment to Address Change In Law. Nothing in this Section S4.2 shall be construed to preclude the Parties from agreeing to amend
the Confirmation to permit a Seller to perform its obligations in a
Specified Source Transaction as to which a Change in Law has
occurred.
S-5
Seller Representations and Warranties. In each Specified Source Transaction, Seller
represents and warrants to Purchaser the following:
S-5.1 As of each delivery, the emission factor specified in the Confirmation shall be the
emission factor recognized by the CARB with respect to the Specified Source or
ACS designated in the Confirmation.
S-6
Information; Records; and Confidentiality
S-6.1 Seller to Document Emission Factor. Upon Purchaser’s reasonable request
from time to time until completion of energy deliveries pursuant to the
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Confirmation, Seller shall provide to Purchaser evidence that the CARB
recognizes and agrees that the emission factor of the Specified Source or ACS is
the emission factor stated in the Confirmation for the designated Specified Source
or ACS.
S-6.2 Seller Reporting. Seller shall report all sales of energy from the Specified
Source or ACS designated in the Confirmation accurately and otherwise in
compliance with the CARB Regulations.
S-6.3 Seller Provision of Information to Purchaser. Seller shall provide to Purchaser
weekly or other periodicity as Purchaser may reasonably request for the period of
performance of the Confirmation, documents, meter data and other information as
are reasonably necessary for Purchaser to demonstrate to the CARB that energy
received pursuant to the Confirmation in fact originated with the Specified Source
or ACS designated in the Confirmation.
S-6.4 Notice of Emission Factor Change. Seller must give notice to Purchaser of any
change in the emission factor, and of any occurrence, development, or event that
would cause a change in the emission factor of the Specified source or ACS, other
than changes in the emission factor that occur in the ordinary course of
operations.
S-6.5 Correction of Records. If any statement, charge or computation concerning a
Specified Source Transaction is inaccurate, the Parties promptly shall make any
adjustments to records as reasonably necessary to correct such inaccuracy, and
make any adjustment of payments required to correspond to the corrected records,
provided, that Purchaser shall not be required to pay a higher Contract Price or
accept a lower Contract Quantity than the Confirmation requires.
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S-6.6 Exception to Confidentiality.
Purchaser has the right to disclose to any
Governmental Authority having jurisdiction over Purchaser, any information
necessary to demonstrate Purchaser’s compliance with the CARB Regulations;
provided, however, that Purchaser shall use reasonable efforts to minimize the
scope of any such disclosure and shall require, as may be feasible, that the
recipient maintain the confidentiality of any documents or confidential
information governed by the provisions of Section 30.1 of the Agreement,
including, if permitted under applicable procedures of the Governmental
Authority, and subject to any applicable public records laws, seeking a protective
order or similar protective mechanism in connection with any disclosure.
S-7
Uncontrollable Force. The following is added at the end of the second paragraph of
Section 10 of the Agreement:
If production of energy at a Specified Source or ACS designated in the
Confirmation is curtailed due to an Uncontrollable Force, any production during
the period of such curtailment shall be allocated as follows: first, among all
Purchasers of firm energy purchased under any form of agreement,
proportionately to such Purchasers’ contract quantities under contracts with Seller
during such period and subject to any priorities or shares stated in the
Confirmation, and second, to all Purchasers of economy energy purchased under
Service Schedule A, proportionately to such Purchasers’ contract quantities under
contracts with Seller during such period and subject to any priorities or shares
stated in the Confirmation. [Drafting comment: review whether this provision is
practical in the real world?]
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S-8
Term of Confirmation. The term of a Confirmation under this Service Schedule S
commences on the day the Confirmation is mutually executed by both Parties and terminates at
the time that the CARB, in accordance with Applicable Law, ceases to have a legal right to
review, revise, or challenge the emission factor either Party has asserted for the Specified Source
or ACS designated in the Confirmation.
S-9
Remedies for Non-Performance.
S-9.1 Damages. Section 21.3 of the Agreement, as modified in this Section 9, applies
to Specified Source Transactions, modified as follows
(a)
Purchaser Refusal of Energy. If Purchaser refuses to receive delivery of
energy made in accordance with the Confirmation, then Section 21.3(a)(1)
of the Agreement shall apply as set forth in the Agreement without
modification by this Service Schedule S.
(b)
Seller Failure to Deliver. If Seller fails to make any delivery of energy
required by the Confirmation, whether from the Specified Source or ACS
designated in the Confirmation, or from any other source, then Seller shall
be required to pay Purchaser damages equal to (i) the amount required in
accordance with Section 21.3(a)(2) plus (ii) an amount equal to the
reasonable cost to Purchaser of Allowances to compensate for the
difference between the emission factor of the designated Specified
Resource or ACS and the default emission factor under the CARB
Regulations of replacement energy, such compensation amount to be
determined by Purchaser at any time within sixty (60) days after the date
of the non-performance.
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(c)
Seller Delivery but Not from Specified Source or ACS. If Seller
delivers energy but the delivered energy did not originate at the Specified
Source or ACS designated in the Confirmation, then, (i) If Purchaser
agrees, Seller may deliver the applicable quantity of energy from the
Specified Source or ACS at an alternate time; or (ii) in the absence of such
agreement, Seller shall pay Purchaser an amount equal to the reasonable
cost to Purchaser of Allowances to compensate for the difference between
the emission factor of the designated Specified Resource or ACS and the
default emission factor under CARB Regulations, such compensation
amount to be determined by Purchaser at any time within sixty (60) days
of the sooner to occur of Seller’s notice to Purchaser, or Purchaser’s
discovery, of the non-performance.
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