UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Northern States Power Company,
A Minnesota Corporation
Border Winds Energy, LLC
Pleasant Valley Wind, LLC
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Docket No. EC14-_______-000
JOINT APPLICATION OF
NORTHERN STATES POWER COMPANY, A MINNESOTA CORPORATION,
BORDER WINDS ENERGY, LLC AND PLEASANT VALLEY WIND, LLC FOR
AUTHORIZATION UNDER SECTION 203 OF THE FEDERAL POWER ACT AND
REQUEST FOR CONFIDENTIAL TREATMENT
James P. Johnson
Assistant General Counsel
Xcel Energy Services Inc.
414 Nicollet Mall – 5th Floor
Minneapolis, MN 55401
Tel: (612) 215-4592
Email: james.p.johnson@xcelenergy.com
Marcia F. Emmons
General Counsel
Border Winds Energy, LLC and Pleasant
Valley Wind, LLC
11101 West 120th Avenue
Suite 400
Broomfield, CO 80021
Tel: (303) 439-4211
Email: marcia.emmons@res-americas.com
Floyd L. Norton, IV
Levi McAllister
Morgan, Lewis & Bockius LLP
1111 Pennsylvania Avenue, NW
Washington, DC 20004
Tel: (202) 739-3000
Email: fnorton@morganlewis.com
lmcallister@morganlewis.com
Charles A. Zielinski
Bryan Cave LLP
1155 F Street, NW
Washington, DC 20004
Tel: (202) 508-6157
Email: charles.zielinski@bryancave.com
Attorneys for Northern States Power Company
Attorneys for Border Winds Energy, LLC and
Pleasant Valley Wind, LLC
Dated: January 30, 2014
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Northern States Power Company,
A Minnesota Corporation
Border Winds Energy, LLC
Pleasant Valley Wind, LLC
)
)
)
)
)
)
Docket No. EC14-___-000
JOINT APPLICATION OF
NORTHERN STATES POWER COMPANY, A MINNESOTA CORPORATION,
BORDER WINDS ENERGY, LLC AND PLEASANT VALLEY WIND, LLC FOR
AUTHORIZATION UNDER SECTION 203 OF THE FEDERAL POWER ACT AND
REQUEST FOR CONFIDENTIAL TREATMENT
Pursuant to Section 203(a)(1) of the Federal Power Act (“FPA”)1 and Part 33 of the
Federal Energy Regulatory Commission’s (“Commission”) regulations,2 Northern States Power
Company, a Minnesota corporation (“NSPM”),3 Border Winds Energy, LLC (“Border Winds”),
and Pleasant Valley Wind, LLC (“Pleasant Valley”) (collectively, “Applicants”) submit this
Application and hereby request Commission authorization to consummate two generation asset
transactions (“Transactions”), whereby NSPM will acquire the generating assets of Border
Winds and Pleasant Valley as well as the related interconnection facilities, contracts, books and
records associated with the generating assets of Border Winds and Pleasant Valley.
As demonstrated herein, the Transactions satisfy the requirements of Section 203 of the
FPA and Part 33 of the Commission’s regulations because the Transactions will have no adverse
1
16 U.S.C. § 824b(a)(1)(A)(B) (2006). 2
18 C.F.R. Part 33. 3
Xcel Energy Services Inc. (“XES”) is the services company subsidiary of Xcel Energy Inc. (“Xcel Energy”), the
registered holding company parent of NSPM. XES provides NSPM with various services and appears in regulatory
proceedings on behalf of NSPM and other Xcel Energy Operating Companies. 1
affect on competition, rates, or regulation,4 and will not result in cross-subsidization of a nonutility associate company or the pledge or encumbrance of utility assets for the benefit of an
associate company.5 Therefore, the Transactions are consistent with the public interest and
should be approved without hearing or delay. To support the conclusion that the Transactions
will not have an adverse effect on competition in any market, the Applicants are submitting with
this Application, as Attachment 1 hereto, an economic analysis prepared by economic consultant
Mr. Matthew Arenchild of Navigant Consulting, Inc. (the “Arenchild Affidavit”). Except to the
extent the Applicants request waiver of certain requirements, this Application includes all
information and exhibits required by revised Part 33 of the Commission’s regulations and Order
No. 642.6
Applicants respectfully request expedited action on this Application and that the
Commission issue an order approving the Transactions on or before March 31, 2014. The
Applicants also respectfully request the Commission to establish a shortened public comment
period not to exceed thirty (30) days, as discussed further herein. The Applicants seek to obtain
all regulatory approvals necessary to undertake the Transactions, including the approval sought
herein from the Commission, by March 31, 2014 in order to allow contractual conditions to be
met so construction can proceed in 2014. Because the Border Winds Facility and Pleasant
Valley Facility are not expected to become operational until late 2015, the Applicants request
4
Inquiry Concerning the Commission’s Merger Policy Under the Federal Power Act: Policy Statement, Order No.
592, FERC Stats. and Regs. ¶ 31,044 (1996), order on reconsideration, Order No. 592-A, 79 FERC ¶ 61,321 (1997)
(Merger Policy Statement). 5
See 18 C.F.R. § 33.2; see also Transactions Subject to FPA Section 203, Order No. 669, 2001–2005 FERC Stats. &
Regs., Regs. Preambles ¶ 31,200 (2005), order on reh’g, Order No. 669-A, 2006–2007 FERC Stats. & Regs., Regs.
Preambles ¶ 31,214, order on reh’g and clarification, Order No. 669-B, 2006–2007 FERC Stats. & Regs., Regs.
Preambles ¶ 31,225 (2006). 6
See Revised Filing Requirements Under Part 33 of the Commission’s Regulations, Order No. 642, 1996–2000
FERC Stats. & Regs, Regs. Preambles ¶ 31,111 (2000), order on reh’g, Order No. 642-A, 94 FERC ¶ 61,289
(2001). 2
that the Commission’s authorization of the Transactions remain effective for no less than three
years from the date of the Commission’s order authorizing the Transactions.7
I.
PARTIES TO THE TRANSACTIONS
A.
Northern States Power Company, a Minnesota corporation
NSPM is one of four Xcel Energy Inc. utility operating companies.
NSPM is a
corporation created and organized under the laws of the State of Minnesota, with its principal
office in the City of Minneapolis, Minnesota. NSPM is authorized to do business in the States of
Minnesota, North Dakota, and South Dakota. NSPM and Northern States Power Company, a
Wisconsin corporation (“NSPW”, jointly referred to as the “NSP Companies”) operate as a
single integrated system and local balancing authority area. (NSPW is authorized to do business
in the States of Wisconsin and Michigan.)
The NSP Companies are vertically integrated
transmission-owning members of the Midcontinent Independent System Operator, Inc.
(“MISO”). Together, the NSP Companies are among the largest transmission-owning members
of the MISO, with a 2013 peak load of approximately 9500 MW and over 7,200 miles of
transmission lines and approximately 550 substations (transmission and distribution). As of YE
2013, NSPM net production plant was approximately $4.1 billion and net transmission plant was
approximately $1.6 billion. The Commission has granted the NSP Companies authority to make
sales in interstate commerce, including sales into the MISO day-ahead and real-time energy and
ancillary services market (“MISO Market”), at market based rates.8
B.
Border Winds Energy, LLC
Border Winds is a limited liability company formed to construct and own a 150 MW
wind power project and related facilities on 67.7 square miles of land within Rolette County,
7
See, e.g., Dynegy Inc., 133 FERC ¶ 62,107 (2010) (authorizing Section 203 transaction for a period of up to three
years). 8
See Southwestern Public Service Co., et. al, Letter Order, Docket Nos. ER12-2696-0001 (Dec. 14, 2012). 3
North Dakota (“Border Winds Facility”). Border Winds owns no other electric generating assets
or transmission assets and has no other ownership interests in electric facilities.
Border Winds is a subsidiary of RES America Development, Inc., a Delaware
corporation, which owns 90% of Border Winds, and RES America Investments, a Delaware
corporation, which owns 10% of Border Winds (collectively, “RES Americas”). The owners of
Border Winds are wholly-owned subsidiaries of Renewable Energy Systems Americas, Inc.,
which is a wholly-owned subsidiary of Renewable Energy Systems Holdings Ltd. (“RES
Holdings”), a corporation formed under the laws of England and Wales. Renewable Energy
Systems Americas, Inc. is the exclusive means through which RES Holdings does business in the
United States. With the exception of two wind farms located in the Electric Reliability Council
of Texas (“ERCOT”) region, Renewable Energy Systems Americas, Inc. does not own and is not
affiliated with any entity that currently owns generation or transmission facilities in the United
States. However, Renewable Energy Systems Americas, Inc. is affiliated with Pleasant Valley
Wind, which is discussed further infra.
Construction of the Border Winds Facility is scheduled to commence in 2014. The
Border Winds Facility will employ 75 V100 2.0 MW wind turbine generators, each with a 100meter rotor affixed to a 95-meter steel tower. When operational, the Border Winds Facility is
expected to produce approximately 620 Gwh of electric energy annually. All necessary land
rights for the Border Winds Facility have been obtained, and the Border Winds Facility will
include appurtenant equipment necessary to interconnect with the NSP transmission system
pursuant to the MISO Tariff. MISO is currently performing Definitive Planning Phase studies for
interconnection of the Border Winds Facility.
4
On December 17, 2013, Border Winds filed a Notice of Self-Certification of Exempt
Wholesale Generator (“EWG”) Status with the Commission notifying the Commission of its
status as an EWG. On January 8, 2014, Border Winds submitted an Application for MarketBased Rate Authorization and accompanying market-based rate tariff that Border Winds
proposes to govern the sales of the output of the Border Winds Facility. That application is
pending Commission action in Docket No. ER14-965-000.
C.
Pleasant Valley Wind, LLC
Pleasant Valley is a limited liability company formed to construct and own a 200 MW
wind power project and related facilities at a site about 90 miles south of Minneapolis-St. Paul,
20 miles southwest of Rochester, and 10 miles northeast of Austin, Minnesota (“Pleasant Valley
Facility”). Pleasant Valley owns no other electric generating assets or transmission assets and has
no other ownership interests in electric facilities.
Pleasant Valley is also a subsidiary of RES America Development, Inc., which owns 90%
of Pleasant Valley, and RES America Investments, which owns 10% of Pleasant Valley. As
discussed supra, the owners of Pleasant Valley are wholly-owned subsidiaries of Renewable
Energy Systems Americas, Inc., which is a wholly-owned subsidiary of RES Holdings.
Construction of the Pleasant Valley Facility is scheduled to commence in 2014. The
Pleasant Valley Facility will employ 100 V100 2.0 MW wind turbine generators, each with a
100-meter rotor affixed to a 95-meter steel tower. When operational, the Pleasant Valley Facility
is expected to produce approximately 795 Gwh of electric energy annually. The Pleasant Valley
Facility will include appurtenant equipment necessary to interconnect with the MISO system.
MISO is currently performing Definitive Planning Phase studies for interconnection of the
Pleasant Valley Facility.
5
On December 17, 2013, Pleasant Valley filed a Notice of Self-Certification of EWG
Status with the Commission notifying the Commission of its status as an EWG. On January 8,
2014, Pleasant Valley submitted an Application for Market-Based Rate Authorization and
accompanying market-based rate tariff that Pleasant Valley proposes to govern the sales of the
output of the Pleasant Valley Facility. That application is pending Commission action in Docket
No. ER14-964-000.
II.
THE PROPOSED TRANSACTIONS
A.
Background to the Transactions
Pursuant to Minnesota state law, NSPM is required to generate or procure sufficient
electricity generated by an eligible energy technology so that at least 30 percent of the NSPM’s
total retail electric sales in Minnesota are generated by renewable resources by 2020. At least 25
percent of retail sales must be met with electricity from wind powered generation.9 These
obligations are known as the Minnesota Renewable Energy Standards (“RES”).
Consistent with NSPM’s renewable energy strategy, NSPM monitors the market for costeffective opportunities to add renewable energy to its system to, inter alia, comply with the
Minnesota RES. In February 2013, NSPM issued a Request for Proposals (“RFP”) for additional
wind resources. The RFP process attracted robust competition and, as a result, NSPM identified
four proposals that were cost effective and would keep the NSP Companies’ retail customers’
bills lower than they otherwise would be.10 Two of those proposals were for the Border Winds
Facility and Pleasant Valley Facility that are to be constructed in 2014.11
9
Minn Stat. § 216B.1691. 10
As of December 31, 2013, the NSP Companies serve no wholesale requirements customers at cost-based rates.
The proposed Transactions thus will have no impact on wholesale rates subject to the jurisdiction of the
Commission, except for any impact on rates offered into the MISO energy and ancillary services market. 11
The remaining two proposals identified by NSPM were for power purchase agreements that would provide NSPM
with generation from facilities owned by non-affiliates that are unrelated to this Application. See Exhibit L. 6
The acquisition of the Border Winds Facility and Pleasant Valley Facility proposed in
this Application is necessary to cost effectively enable NSPM to meet its compliance obligations
under Minnesota’s RES. At the end of 2012, NSPM was on track with the intermediate
milestones of the law, with just over 16.5 percent of its annual retail sales coming from
renewable resources. Of this total, nearly 12 percent was from wind and five percent was from
non-wind resources, including hydro, biomass, landfill gas, solar and refuse-derived fuel.12
However, the acquisition of the proposed projects will extend NSPM’s compliance with the
Minnesota RES approximately three years, through 2021. NSPM selected RES Americas, an
experienced wind farm project developer, to construct the Border Winds Facility and Pleasant
Valley Facility (jointly the “Facilities”) on a “build-transfer” basis through the competitive bid
process, since NSPM does not have significant experience in wind farm development. NSPM
would take ownership after the Facilities have been placed into commercial service for what is
expected to be a relatively brief period and all conditions precedent to the Purchase and Sale
Agreements (“PSAs”) are satisfied. The Minnesota Public Utilities Commission (“MPUC”), the
state regulatory agency with primary jurisdiction over NSPM’s compliance with the Minnesota
RES and with jurisdiction over NSPM’s retail rates in the State of Minnesota, approved the
Transactions in December 2013.13
12
NSPM purchases the output of approximately 1,555 MW of non-affiliated wind generation pursuant to Power
Purchase Agreements (“PPAs”), and owns two wind farms with a nameplate output of 301.5 MW. As such, after
the closing of the Transactions, the vast majority of the wind generation on the NSP System will remain nonaffiliated generation. There is a total of approximately 2,100 MW of wind generation selling to NSPM under PPAs,
owned by NSPM, or interconnected to the NSP Companies’ transmission system and within the NSP Companies’
LBA. 13
See In the Matter of the Petition of Xcel Energy for Approval of the Acquisition of 600 MW of Wind Generation et
al., Order Approving Acquisitions With Conditions, Docket No. E-002/M-13-603 (Dec. 13, 2013) (“MPUC Order”).
A copy of the MPUC Order is provided in Attachment L. The MPUC also approved NSPM’s proposal to also enter
into PPAs with two non-affiliated generators to purchase additional wind resources. As described herein, NSPM
separately requested approval of the Transactions by the North Dakota Public Service Commission (“NDPSC”).
NDPSC approval is pending. 7
B.
Description of the Transactions
If the Commission grants this Application, the proposed Transactions will be
implemented in accordance with two PSAs between NSPM and RES Americas.
As discussed above, neither the Border Winds Facility nor the Pleasant Valley Facility
are currently constructed. RES Americas is beginning construction of both Facilities in 2014,
and commercial operation is expected to occur in 2015. RES Americas will assume construction
risk throughout the development and construction phases, as RES Americas is responsible for the
physical construction of the facilities.
Following construction and after what is expected to be a relatively brief period of
commercial operation, Border Winds and Pleasant Valley will be transferred to NSPM pursuant
to the PSAs. NSPM will acquire from RES Americas 100 percent of the limited liability
company interests of Border Winds and Pleasant Valley. Immediately upon closing of NSPM’s
acquisition of the limited liability company interests of Border Winds and Pleasant Valley, both
Border Winds and Pleasant Valley will be merged into NSPM. NSPM will be the surviving
entity of each of these mergers, and Border Winds and Pleasant Valley will cease to exist as of
the effective date of their merger into NSPM. As utility-owned facilities, the Border Winds and
Pleasant Valley generators will not operate as Exempt Wholesale Generators (“EWGs”) upon
their merger into NSPM. Pursuant to the mergers of Border Winds and Pleasant Valley into
NSPM, NSPM will, by operation of law, acquire all of Border Winds’ and Pleasant Valley’s
rights and assets, will assume all of Border Winds’ and Pleasant Valley’s liabilities and other
obligations, and will take direct ownership of the generation facilities, together with related
interconnection facilities and books and records. As noted, because the Border Winds Facility
and Pleasant Valley Facility are not expected to become operational until late 2015, the
8
Applicants request that the Commission’s authorization of the Transaction remain effective for
no less than three years from the date of the Commission’s order authorizing the Transaction.14
C.
Description of the Facilities to be Transferred for Which Section 203
Approval is Requested
The jurisdictional facilities affected by the Transactions consist of the Border Winds
Facility, the Pleasant Valley Facility, the interconnection facilities at the Border Winds Facility
and Pleasant Valley Facility, and RES Americas’ contracts, books, and records associated with
the Border Winds Facility and Pleasant Valley Facility. Such materials include the market-based
rate tariffs that Border Winds and Pleasant Valley have filed with respect to the Facilities.
Following consummation of the Transactions, NSPM will file any necessary change in
status or market-based tariff revisions necessary to reflect the transfer in ownership to NSPM of
the Border Winds Facility and Pleasant Valley Facility.
III.
REQUEST FOR SECTION 203 APPROVAL
Under Section 203 of the FPA, the Commission must approve a disposition of
jurisdictional facilities if the Transaction will be “consistent with the public interest.”
After notice and opportunity for hearing, the Commission shall
approve the proposed disposition, consolidation, acquisition, or
change in control, if it finds that the proposed transaction will be
consistent with the public interest, and will not result in crosssubsidization of a non-utility associate company or the pledge or
encumbrance of utility assets for the benefit of an associate
company, unless the Commission determines that the crosssubsidization, pledge, or encumbrance will be consistent with the
public interest.15
14
See, e.g., Dynegy Inc., 133 FERC ¶ 62,107 (2010) (authorizing Section 203 transaction for a period of up to three
years). 15
16 U.S.C. § 824b(a)(4). Section 203 does not require a showing of a “positive benefit” to the public for a
transaction to be found to be in the public interest. Applicants are only required to establish the absence of a
“detriment.” See, e.g., Central Vermont Public Service Corp., 39 FERC ¶ 61,295, at 61,960 n.14 (1987). 9
As explained in Order No. 642 and the Merger Policy Statement,16 the Commission
examines three factors in analyzing whether a proposed transaction is consistent with the public
interest: (1) the effect on competition, (2) the effect on rates, and (3) the effect on regulation. As
demonstrated below, the Transactions will have no adverse effect on competition, rates, or
regulation. The Transactions also will not cause, now or in the future, the cross-subsidization of
a non-utility associate company or any pledge or encumbrance of utility assets for the benefit of
an associate company. Therefore, the Commission should find that the Transactions are in the
public interest.
A.
The Transactions Will Have No Adverse Effect on Competition
The Commission’s objective in analyzing the effect on competition of a proposed
transaction is to determine whether the proposed transaction will “result in higher prices and
reduced output in electricity markets.”17 The Commission has ruled that higher prices and
reduced output in electricity markets may occur if the applicants for Section 203 authorization
are able to exercise market power, either alone or in conjunction with others.18 The
Commission’s Merger Policy Statement and Order No. 642 established both horizontal and
vertical competitive analysis screens to allow the Commission to identify proposed transactions
that are likely to present competitive concerns.19
As demonstrated below, the Transactions will create neither horizontal nor vertical
market power.
16
Inquiry Concerning the Commission’s Merger Policy Under the Federal Power Act: Policy Statement, Order No.
592, FERC Stats. & Regs. [Regs. Preambles 1996-2000] ¶ 31,044 at 30,111 (1996), reconsideration denied, Order
No. 592-A, 79 FERC ¶ 61,321 (1997) (“Merger Policy Statement”). 17
Order No. 642 at 31,879; Order No. 592 at 31,044. 18
Order No. 642 at 31,879. 19
Id. at 31,879 & 31,903. 10
1.
The Transactions Will Have No Adverse Effect on Horizontal Market
Power
As discussed below and in further detail in the Arenchild Affidavit, the Transactions raise
no horizontal market power concerns in the MISO balancing authority area (“BAA”). The MISO
BAA is the only market relevant to the Transactions because both facilities are located in that
control area and there is no overlap in generation ownership between NSPM and Border Winds
or Pleasant Valley in any other market.
As demonstrated in the Arenchild Affidavit and supporting materials, the Border Winds
Facility and Pleasant Valley Facility collectively will represent only 0.2% of the installed
capacity in the MISO BAA, and the NSP Companies’ post-transaction share of the total installed
capacity in the MISO BAA will equal approximately 6.3%.20 These figures do not take import
capacity into account, and are therefore conservative.
Although this initial analysis shows that the NSP Companies’ post-transaction share of
installed capacity may be considered de minimis and a full Competitive Analysis Screen may be
unnecessary, Mr. Arenchild nevertheless conducted the full analysis.
He found that using
Economic Capacity, which does not include load-serving obligations, the NSP Companies’
market-share passed the Commission’s screen, never exceeding 7% in any time period.21 Mr.
Arenchild also found that using Available Economic Capacity demonstrates that the NSP
Companies’ market-share does not rise above 6%, the change in market concentration calculated
using the Herfindahl-Hirschman Index (“HHI”) is 4 points or less in any given period, and the
highest HHI for any particular period is 687. As such, Mr. Arenchild’s analysis demonstrates that
20
The Applicants note that the figures reflected in this Application reflect the MISO BAA following the integration
of the Entergy Services, Inc. Operating Companies (“Entergy”) in December 2013. However, even considering the
MISO BAA prior to the integration of Entergy, Mr. Arenchild’s analysis demonstrates that the Transactions still
present no horizontal market power concerns. See Attachment 1. 21
Again, this figure reflects the MISO BAA following Entergy’s integration. 11
the market is unconcentrated and that the NSP Companies’ post-transaction market share
calculated using the HHI falls well within the safe harbor thresholds.22
From these calculations, Mr. Arenchild concludes that the Transactions do not create any
material horizontal competitive effects.
2.
The Transactions Will Have No Adverse Effect on Vertical Market Power
The Transactions do not present any vertical market power concerns. The Transactions
provide for the disposition of certain generation facilities to be developed in 2014 and placed in
service in 2015, but do not result in any vertical combination of upstream inputs to electric
generation, such as transmission facilities or natural gas pipelines, with downstream generating
capacity. As is the case with other NSPM assets, the generating facilities to be transferred
following their development will remain subject to the functional control of the MISO, and will
be subject to the requirements of the MISO Market pursuant to the MISO Tariff.
There are no other grounds for vertical competitive concerns, and therefore no more
detailed analysis is necessary for the Commission to determine that the Transaction will have no
adverse effect on vertical market power. The Commission’s regulations provide that a FPA
Section 203 applicant “must file the vertical Competitive Analysis described in paragraphs (b)
through (e) of this section if, as a result of the proposed transaction, a single corporate entity has
ownership or control over one or more merging entities that provides inputs to electricity
22
To determine whether a proposed merger requires further investigation because of a potential for a significant
anti-competitive impact, the DOJ and FTC consider the level of the HHI after the merger (the post-merger HHI) and
the change in the HHI that results from the combination of the market shares of the merging entities. Markets with a
post-merger HHI of less than 1000 are considered “unconcentrated.” The DOJ and FTC generally consider mergers
in such markets to have no anti-competitive impact. Markets with post-merger HHIs of 1000 to 1800 are considered
“moderately concentrated.” In those markets, mergers that result in an HHI change of 100 points or less are
considered unlikely to have anti-competitive effects. Finally, post-merger HHIs of more than 1800 are considered to
indicate “highly concentrated” markets. The Guidelines suggest that in these markets, mergers that increase the HHI
by 50 points or less are unlikely to have a significant anticompetitive impact, while mergers that increase the HHI by
more than 100 points are considered likely to reduce market competitiveness. (See U.S. Department of Justice and
Federal Trade Commission, Horizontal Merger Guidelines (April 2, 1992), amended 1997.) 12
products and one or more merging entities that provides electric generation products.”23 Further,
in Order No. 642, the Commission identified that the principal vertical market power issue is
whether the merger may create or enhance the ability of the merged firm to exercise market
power in (downstream) electricity markets through its expanded control over the (upstream)
supply of essential resource inputs used by competing electricity suppliers.24
The Transactions proposed herein do not involve inputs to electric generation. In
addition, with the exception of distribution lines interconnecting certain NSPM system
generation to non-affiliated interstate natural gas pipelines, NSPM natural gas assets are used to
provide retail gas distribution service and do not provide NSPM with the ability to erect barriers
to entry. NSPM does not own or control any sites for generation capacity development that raise
entry barrier concerns. Further, NSPM does not control coal supplies or barges and rail cars used
for transportation of coal supplies except rail cars leased solely to deliver fuel for coal-fired
generating units.
For these reasons, the Transactions raise no vertical market power concerns. For these
same reasons, the Transactions also present no issues or concerns regarding potential barriers to
entry.
B.
The Transactions Will Not Adversely Affect Rates
In the Merger Policy Statement, the Commission explained that its primary concern
regarding the effects of a Section 203 filing on rates is whether the transaction will have any
adverse impact on wholesale transmission service rates or on the rates charged to long-term
23
18 C.F.R. § 33.4(a)(1)(2012). 24
See Order No. 642 at 31,904. 13
requirements customers.25 The Transactions satisfy this element of the Commission’s public
interest standard.
The Transactions will also have no adverse impact on transmission service rates. The
facilities subject to the Transactions are generation facilities rather than transmission facilities.
Transmission service offered for NSPM’s existing transmission assets is offered under the MISO
Tariff on file with the Commission. The cost of interconnection facilities associated with the
Border Winds Facility and/or the Pleasant Valley Facility will be recorded as generator outlet
(transmission serving generation) costs and not included in MISO transmission rates. The cost
of transmission facilities to be constructed and owned by the MISO transmission owners to
whom the Facilities will interconnect will be directly assigned to the Facilities or recovered from
transmission customers pursuant to the terms of the MISO Tariff.
Similarly, the Transactions will have no adverse effect on long-term requirements
customers. As of December 31, 2013, NSPM provides wholesale requirements service to no
cooperative or municipal requirements customers. As such, the acquisition of the two Facilities
will only affect the rates to retail customers, and those rates remain fully regulated on a cost of
service basis. A portion of the cost of the Border Winds Facility and Pleasant Valley Facility
and the associated wind energy (approximately 15 percent) would be allocated to NSPW through
the Interchange Agreement, a formula rate on file with the Commission whereby NSPM and
NSPW share the cost of NSP System production and transmission facilities on a load ratio share
cost of service basis.26 Since NSPW also serves no wholesale requirements customers (NSPW’s
25
See Merger Policy Statement at 30,123; New England Power Co., et al., 82 FERC ¶ 61,179 at 61,659, order on
reh’g, 83 FERC ¶ 61,275 (1998). 26
The full title of the Interchange Agreement is the “Restated Agreement to Coordinate Planning and Operations
and Interchange Power and Energy between Northern States Power Company (Minnesota) and Northern States
Power Company (Wisconsin)”. Pursuant to the terms of the Interchange Agreement, the NSP Companies annually
restate or update certain exhibits to the Interchange Agreement. The 2013 filing, which updated Exhibits VII, VIII
14
service agreements with its municipal requirements customers terminated as of December 31,
2012), the Interchange Agreement allocation to NSPW would affect only NSPW’s retail rates for
service in Wisconsin and Michigan, which are derived on a regulated, cost-of-service basis.
C.
The Transactions Will Not Adversely Affect Regulation
In assessing the effect that a proposed jurisdictional transaction could have on regulation,
the Commission focuses on ensuring that the transaction does not result in a regulatory gap at the
state or federal level.27 The Transactions will not result in a regulatory gap and will have no
adverse effect on federal or state regulation. Following the closing of the Transaction, NSPM
will continue to be regulated by the Commission in the same manner as it is today.
Further, the Transactions are subject to the regulatory approval of the Minnesota Public
Utilities Commission (“MPUC”) and the North Dakota Public Service Commission (“NDPSC”),
state commissions with jurisdiction over NSPM. Such review ensures that any potential effect of
the Transactions on state regulation will be fully evaluated. As noted, the MPUC previously
approved the Transactions.28 NSPM’s requests for approval filed with the NDPSC are still
pending a determination.29 The Transactions will not affect the ability of the Commission or state
regulators to regulate the facilities.
D.
The Transactions Will Not Result in Any Prohibited Cross-Subsidization or
Pledge or Encumbrance of Utility Assets
Pursuant to FPA Section 203(a)(4), the Commission shall approve a proposed transaction
if it finds that the proposed transaction “will not result in cross-subsidization of a non-utility
and IX, was accepted for filing effective January 1, 2013, by letter order dated June 6, 2013 in Docket No. ER13954-000. 27
See Merger Policy Statement at 30,124. 28
See In the Matter of the Petition of Xcel Energy for Approval of the Acquisition of 600 MW of Wind Generation,
Docket No. E-002/M-13-603 (Dec. 13, 2013). 29
The Border Winds transaction is pending NDPSC action in Case Nos. PU-13-742 and PU-13-743, and the
Pleasant Valley transaction is pending action in Case No. PU-13-708. 15
associate company or the pledge or encumbrance of utility assets for the benefit of an associate
company, unless ... the cross-subsidization, pledge, or encumbrance will be consistent with the
public interest.”
In the Supplemental Policy Statement, the Commission introduced “safe
harbors” for meeting the Section 203 cross-subsidization demonstration.30 The Transactions fall
within two of these safe harbors.
First, there are no NSPM non-utility affiliate or associate companies at issue for the
Transactions. Upon completion of the Transactions, the Border Winds and Pleasant Valley
limited liability company interests will be merged into NSPM and will cease to exist. Therefore,
there is no risk of cross-subsidization concerns. The potential for prohibited cross-subsidies
generally arises in connection with transactions between affiliates that may adversely impact
captive customers.31 Accordingly, the Commission has explained that there is little concern for
cross-subsidies in connection with arms-length transactions with nonaffiliates, and that
compliance with Exhibit M could be satisfied where the assets are transferred between a public
utility and non-affiliates.32 In this instance, the Transactions provide solely for the acquisition of
specific generation facilities by NSPM, a public utility subject to FERC's jurisdiction, from RES
Americas, a non-affiliate, and do not include the issue of securities or the pledge or encumbrance
of existing assets by NSPM for any affiliate. Accordingly, the Transactions fall within the safe
harbor identified in the Supplemental Policy Statement and the Exhibit M requirements are
satisfied.
Furthermore, the Commission has determined that transactions that are subject to review
30
See FPA Section 203 Supplemental Policy Statement, FERC Stats. & Regs. ¶ 31,253, at P 14 (2007)
(“Supplemental Policy Statement”), on clarification, 122 FERC ¶ 61,157 (2008). 31
Supplemental Policy Statement at P 13. 32
Supplemental Policy Statement at P 19. 16
by a state commission are unlikely to raise cross-subsidization concerns.33 Accordingly, the
Commission held that compliance with Exhibit M could be satisfied with a showing that the
proposed transaction complies with specific state regulatory protections against inappropriate
cross-subsidization by captive customers.34
As noted above, the MPUC has reviewed and
approved the Transactions, and the NDPSC is currently reviewing the Transactions. The MPUC
has regulatory protections against inappropriate cross-subsidization among affiliated interests by
captive customers.35 Accordingly, the requirements of Exhibit M are satisfied by the fact that the
Transactions have been (or are being) reviewed by two affected state commissions to prevent
inappropriate cross-subsidization.
In the event that the Commission concludes that additional information is required to
support a determination that the Transactions do not result in improper cross-subsidization,
NSPM attests that, based on the facts and circumstances that are known to it or are reasonably
foreseeable, the proposed Transactions will not result in any cross-subsidization of a non-utility
associate company or the pledge or encumbrance of utility assets for the benefit of an associate
company. These attestations demonstrate that the Transactions do not raise any concerns with
respect to cross-subsidization.36
1.
Transfers of Facilities
The Transactions do not contemplate or include the transfer of facilities between NSPM,
the traditional utility company, and an associate company, either at the time of the Transactions
33
34
Supplemental Policy Statement at P 18. Id. 35
See Minn. Stat. 216B.48; see also In the Matter of an Investigation into the Competitive Impact of Appliance Sales
and Service Practices of Minnesota Gas and Electric Utilities, Order Setting Filing Requirements, Docket No. CI90-1088 (1994). 36
See, e.g., Entergy Gulf States, 121 FERC ¶ 61,182, at P 87 (2007); Duke Power Co., 117 FERC ¶ 62,094, at
64,270 (2006). 17
or in the future. NSPM is not affiliated with RES Americas, Border Winds or Pleasant Valley,
the other parties to the Transactions.
2.
Issuance of Securities
No new securities will be issued by NSPM for the benefit of an associate company in
connection with the Transactions, and no such issuances associated with the Transactions are
contemplated for the future.37
3.
New Pledge or Encumbrance
NSPM will not enter into any new pledges or encumbrances of utility property for the
benefit of an associate company in connection with the Transactions, and there are no plans to do
so in the future.
4.
New Affiliate Contracts
No new contracts between NSPM and its affiliates are contemplated by the Transactions,
either at the time of the Transactions or in the future.
IV.
REQUEST FOR EXPEDITED CONSIDERATION
Applicants respectfully request expedited action on this application and issuance of an
order approving the Transactions on or before March 31, 2014. The Applicants also respectfully
request the Commission to establish a shortened public comment period not to exceed thirty (30)
days.
While the Commission generally adopts a 60-day comment period for Section 203
applications that include Appendix A competitive analyses, it has expressly declined to formalize
this policy by rule, explaining that it will be “flexible to deal with varying circumstances.”38
Consistent with its decision to retain the flexibility to address varying circumstances, the
Commission has established comment periods of considerably less than 60 days and issued
37
NSPM anticipates that it will fund the Transactions out of its corporate capital budget. 38
Order No. 669 at P 194. 18
orders approving numerous applications including Appendix A analyses.39 The Applicants seek
to obtain all regulatory approvals necessary to undertake the Transactions, including the approval
sought herein from the Commission, by March 31, 2014 in order to allow contractual conditions
to be met so construction can proceed in 2014. Because the Border Winds Facility and Pleasant
Valley Facility are not expected to become operational until late 2015, the Applicants request
that the Commission’s authorization of the Transactions remain effective for no less than three
years from the date of the Commission’s order authorizing the Transactions.40
V.
INFORMATION REQUIRED BY 18 C.F.R. § 33.2
Applicants submit the following information in compliance with Part 33 of the
Commission’s regulations.41 As set forth below, and as suggested by the Commission,42
Applicants request waiver of certain of the Part 33 informational requirements where such
information is not necessary or relevant to the Commission’s evaluation of the Transactions.
A.
Section 33.2(a) – Applicants’ Names and Principal Business Offices
Northern States Power Company
414 Nicollet Mall
Minneapolis, MN 55401
Border Winds Energy, LLC
Pleasant Valley Wind, LLC
11101 West 120th Avenue
Suite 400
Broomfield, CO 80021
39
See, e.g., Tenaska Washington Partners, L.P., 141 FERC ¶ 62,100 (2012) (approving Section 203 application with
Appendix A analysis in 35 days, including a 20-day comment period); New Development Holdings, LLC, 131 FERC
¶ 62,266 (2010) (approving Section 203 application with Appendix A analysis in 53 days, including a 27-day
comment period); W. Georgia Generating Co, 129 FERC ¶ 62,197 (2009) (approving Section 203 application with
Appendix A analysis in 42 days, including a 20-day comment period); Mint Farm Energy Center LLC, 125 FERC ¶
62,156 (2008) (approving Section 203 application with Appendix A analysis in 49 days, including a 17-day
comment period). 40
See, e.g., Dynegy Inc., 133 FERC ¶ 62,107 (2010) (authorizing Section 203 transaction for a period of up to three
years). 41
18 C.F.R. § 33.2 (2013). 42
Order No. 642 at 31,877. 19
B.
Section 33.2(b) – Names and Addresses of the Persons Authorized to Receive
Notices and Communications
Persons authorized to receive notices and communications regarding this Application are
as follows:
For Northern States Power Company, a
Minnesota corporation:
For Border Winds Energy, LLC and
Pleasant Valley Wind, LLC
James P. Johnson
Assistant General Counsel
Xcel Energy Services Inc.
414 Nicollet Mall – 5th Floor
Minneapolis, MN 55401
Tel: (612) 215-4592
Email: james.p.johnson@xcelenergy.com
Marcia F. Emmons
General Counsel
Border Winds Energy, LLC and Pleasant
Valley Wind, LLC
11101 West 120th Avenue
Suite 400
Broomfield, CO 80021
Tel: (303) 439-4211
Email: marcia.emmons@res-americas.com
Floyd L. Norton, IV
Levi McAllister
Morgan, Lewis & Bockius LLP
1111 Pennsylvania Avenue, NW
Washington, DC 20004
Tel: (202) 739-3000
Email: fnorton@morganlewis.com
lmcallister@morganlewis.com
Charles A. Zielinski
Bryan Cave LLP
1155 F Street, NW
Washington, DC 20004
Tel: (202) 508-6157
Email: charles.zielinski@bryancave.com
C.
Section 33.2(c)(1) – Description of Applicant's Business Activities
The Applicants’ business activities are described in Part I of this Application. NSPM
respectfully requests waiver of Section 33.2(c)(1) of the Commission's regulations43 to file
information on Exhibit A.
43
18 C.F.R. § 33.2(c)(1). 20
D.
Section 33.2(c)(2) – Description of Applicant's Energy Subsidiaries and
Affiliates
No affiliates of Applicant are involved in the Transactions, as described in Part I of this
Application. NSPM respectfully requests waiver of Section 33.2(c)(2) of the Commission’s
regulations44 to the extent the rule would require the submission of additional information on
Exhibit B.
E.
Section 33.2(c)(3) – Organizational Charts
Because the Transactions provide only for the acquisition of certain limited liability
company interests and generation facilities by NSPM, and the limited liability company interests
will be merged into NSPM and thereafter cease to exist, there will be no change to the
organization or corporate structure of NSPM as a result of the Transactions. NSPM respectfully
requests waiver of the requirement of Section 33.2(c)(3) of the Commission's regulations45 to file
Exhibit C.
F.
Section 33.2(c)(4) – Description of All Joint Ventures, Strategic Alliances,
Tolling Arrangements or Other Business Arrangements
The Transactions will have no effect on any joint ventures, strategic alliances, or other
business arrangements of the Applicants aside from these Transactions. The PSAs do not create a
joint venture or strategic alliance, and there are no other business arrangements between the
Applicants. Applicants therefore request waiver of the requirement of Section 33.2(c)(4) of the
Commission’s regulations to submit Exhibit D.
G.
Section 33.2(c)(5) – Common Officers and Directors
NSPM has no common Officers or Directors with Border Winds or Pleasant Valley or
their affiliates. NSPM therefore respectfully requests waiver of the requirement of Section
44
45
18 C.F.R. § 33.2(c)(2). 18 C.F.R. § 33.2(c)(3). 21
33.2(c)(5) of the regulations46 to file Exhibit E.
H.
Section 33.2(c)(6) - Wholesale Power Sales and Unbundled Transmission
Service Customers
Neither Border Winds nor Pleasant Valley have any wholesale power sales or
transmission service customers.
NSPM currently is a transmission-owning member of MISO, and MISO provides
unbundled transmission service using NSPM’s facilities pursuant to the terms and conditions of
the MISO Tariff on file with the Commission. NSPM has no wholesale requirements customers
taking service at cost-based rates. The Transactions will not alter the existing terms of any
agreement under which NSPM provides wholesale power sales or unbundled transmission
service.47
Accordingly, NSPM respectfully requests waiver of the requirement of Section
33.2(c)(6) of the Commission’s regulations48 to file Exhibit F.
I.
Section 33.2(d) – Jurisdictional Facilities
The jurisdictional facilities affected by the Transaction are described in Part II above.
Border Winds and Pleasant Valley neither own, operate, or control any other jurisdictional
facilities. A list of other jurisdictional facilities owned, operated, or controlled by NSPM is set
forth in the Arenchild Affidavit and supporting documents.
With respect to other NSPM affiliates, the Applicants respectfully request waiver of the
requirement of Section 33.2(c)(6) of the Commission’s regulations to submit Exhibit G to the
extent it requires additional information related to other NSPM affiliates that will be wholly
46
18 C.F.R. § 33.2(c)(4). 47
The energy produced by the Facilities would be offered into the MISO Market in a manner similar to existing
NSPM-owned wind generation facilities. While a portion (approximately 15 percent) of the costs of the Facilities
and the associated energy would be allocated to NSPW pursuant to the Interchange Agreement, no revisions to the
Interchange Agreement are required as a result of the Transactions. The new Facilities would be accounted for in a
manner similar to other generation additions to the NSP System. 48
18 C.F.R. § 33.2(c)(5). 22
unaffected by the Transactions.
J.
Section 33.2(e) – Narrative Description of Proposed Transaction
A description of the Transactions is provided in Part II above. Applicants request waiver
of Section 33.2(e) of the Commission’s regulations to the extent it would require submission of
additional information in Exhibit H.
K.
Section 33.2(f) – Contracts Related to Proposed Transaction
A redacted copy of the Purchase and Sale Agreement between NSPM and Border Winds
is included in Public - Exhibit I. A redacted copy of the Purchase and Sale Agreement between
NSPM and Pleasant Valley is also included in Public - Exhibit I.49 In addition, the Applicants
are providing unredacted copies of the PSAs in Confidential – Exhibit I. Both unredacted
agreements attached hereto are filed as Confidential. The Applicants submit that the both
agreements contain commercially sensitive information, the release of which could cause
competitive harm. Therefore, as provided in Part VI of this Application, Applicants request
privileged treatment for the unredacted versions of the Agreements provided in Confidential –
Exhibit I. As required by 18 C.F.R. § 33.9, the Applicants have included a proposed protective
order, based upon the Commission’s Form Protective Order, as Attachment 2. Applicants
respectfully request waiver of 18 C.F.R. § 33.2(f) to the extent it requires the inclusion of the
Agreements’ schedules and other related attachments.
L.
Section 33.2(g) – Facts Relied Upon to Show the Proposed Transfer is
Consistent with the Public Interest
The facts relied on by the Applicants to show that the Transactions are consistent with the
public interest are set forth in Parts II and III above. Because such information is provided in the
49
The redacted copies provided in Public - Exhibit I are the copies submitted by NSPM in the MPUC proceeding,
and refer to Confidential Information or Privileged Information as “Trade Secret Data”, one of the designations for
confidential or non-public data submitted to the MPUC on a protected basis.
23
body of this Application, Applicants request waiver of the requirement of Section 33.2(g) of the
Commission’s regulations to provide such information in Exhibit J. Applicants will supplement
this Application promptly to reflect in their analysis any material changes that may occur after
this filing is made with the Commission, but before final Commission action.
M.
Section 33.2(h) – Maps of Physical Property
See Exhibit K, which provides maps depicting the general location of the Facilities
involved in the Transactions.
N.
Section 33.2(i) – Other Required Regulatory Approvals
Applicants identify all licenses, orders, and other approvals required in connection with
the Transactions in Exhibit L. A copy of the MPUC Order approving, inter alia, the Transactions
is included in Exhibit L. In accordance with Section 33.2(i) of the Commission’s regulations,
Applicants will supplement this Application with copies of any additional orders pertaining to
the Transactions that may issue while this Application is pending.
O.
Section 33.2(j) - Assurance that the Proposed Transaction Will Not Result in
Cross-Subsidization of a Non-Utility Associate Company Or A Pledge Or
Encumbrance Of Utility Assets For The Benefit Of An Associate Company
See Part III above. Accordingly, NSPM respectfully requests waiver of the requirement
of Section 33.2(c)(j) of the Commission's regulations50 to file Exhibit M.
P.
Section 33.5 – Proposed Accounting Entries
See Confidential - Exhibit N. The estimated original cost and purchase price of the assets
to be acquired by NSPM is set forth in the redacted versions of the PSAs set forth in Confidential
– Exhibit I. The purchase price for each Facility is confidential. For that reason, as provided in
Part VI of this Application, Applicants request privileged treatment for the unredacted versions
of Confidential – Exhibit N. As required by 18 C.F.R. § 33.9, the Applicants have included a
50
18 C.F.R. § 33.2(j). 24
proposed protective order, based upon the Commission’s Form Protective Order, as Attachment
2.
NSPM hereby requests authorization to file final accounting entries showing the net book
values at the Closing Date within 60 days of closing as a compliance filing for the Commission’s
Section 203 approval under this Application. As noted, the Facilities are expected to be placed
in service in 2015, and the Closing Date(s) is/are expected to be in the 4th quarter of 2015. The
Commission has previously authorized post-transaction submission of accounting entries.51
Q.
Section 33.6 – Form of Notice
A form of notice suitable for publication in the Federal Register is provided with this
Application in paper and electronic formats.
R.
Section 33.7 – Verification
NSPM has attached the verification of Christopher B. Clark of NSPM regarding the
contents of this Application. Border Winds and Pleasant Valley have attached a verification of
Brian Evans of RES America Development, Inc. regarding the contents of this Application.
S.
Sections 33.8 and 33.9 – Number of Copies and Protective Order
NSPM submits an eFiled version and three courtesy paper copies of this Application. As
required by 18 C.F.R. § 33.9, the Applicants have included a proposed protective order, based
upon the Commission’s Form Protective Order, as Attachment 2.
T.
Request For Waivers
NSPM requests partial waiver of certain Commission informational requests, as set forth
in this Application.
51
See Xcel Energy Service Inc. et al., 110 FERC ¶ 62,132 (2005). 25
VI.
CONFIDENTIAL TREATMENT
Pursuant to Section 388.112 of the Commission’s regulations,52 Applicants request
privileged treatment for the unredacted Agreements provided in Confidential – Exhibit I and the
proposed accounting entries submitted as Confidential – Exhibit N to this Application. These
Agreements and proposed accounting entries contain sensitive commercial and financial
information that, if released, would disclose proprietary details concerning the Transactions and
potentially permit competitors to gain valuable market information.53
Applicants request that the materials designated as “confidential and privileged” be
accorded privileged treatment under 18 C.F.R. § 388.112. In accordance with 18 C.F.R. § 33.9,
Applicants have provided, in Attachment 2, a proposed Protective Order based on the
Commission’s Form Protective Order. Applicants hereby provide a public version of the
Application with the confidential and privileged materials redacted and marked “Confidential
and Privileged Information has been Removed for Privileged Treatment,” and, separately, a
confidential version of Exhibit I and Exhibit N to this Application marked “Contains
Confidential and Privileged Information - Do Not Release.”
VII.
CONCLUSION
For the foregoing reasons, Applicants respectfully requests that the Commission:
(1)
Issue an Order approving the consummation of the Transactions and authorizing
without condition, modification or further proceedings the acquisition by NSPM of Border
Winds Facility and Pleasant Valley Facility and related interconnection facilities, books,
contracts, and records.
52
18 C.F.R. § 388.112 (2013). The Commission has previously granted confidential treatment to proposed accounting entries with applications
under Section 203 of the FPA. See, e.g., Union Elec. Co. d/b/a/ AmerenUE, 114 FERC ¶ 61,254 (2006), Union Elec.
Co. d/b/a/ AmerenUE, 114 FERC ¶ 61,255 (2006); Amer. Elec. Power Serv. Corp., 110 FERC ¶ 62,183 (2005).
53
26
(2)
Promptly consider the Application after the period for filing comments has
expired and expeditiously issue an order on or before March 31, 2014.
(3)
Allow authorization of the Transactions to remain effective for no less than three
years from the date of the Commission’s order authorizing the Transactions.
(4)
Allow NSPM to file final accounting entries showing the Facilities’ net book
values at the Closing Date within 60 days of closing as a compliance filing for the Commission’s
Section 203 approval under this Application.
Respectfully submitted,
/s/ James P. Johnson
James P. Johnson
Assistant General Counsel
Xcel Energy Services, Inc.
414 Nicollet Mall – 5th Floor
Minneapolis, MN 55401
Tel: (612) 215-4592
Email: james.p.johnson@xcelenergy.com
/s/ Marcia F. Emmons
Marcia F. Emmons
General Counsel
Border Winds Energy, LLC and Pleasant
Valley Wind, LLC
11101 West 120th Avenue
Suite 400
Broomfield, CO 80021
Tel: (303) 439-4211
Email: marcia.emmons@res-americas.com
/s/ Floyd L. Norton, IV
Floyd L. Norton, IV
Levi McAllister
Morgan, Lewis & Bockius LLP
1111 Pennsylvania Avenue, NW
Washington, DC 20004
Tel: (202) 739-3000
Email: fnorton@morganlewis.com
lmcallister@morganlewis.com
/s/ Charles A. Zielinski
Charles A. Zielinski
Bryan Cave LLP
1155 F Street, NW
Washington, DC 20004
Tel: (202) 508-6157
Email: charles.zielinski@bryancave.com
Attorneys for Northern States Power Company
Attorneys for Border Winds Energy, LLC and
Pleasant Valley Wind, LLC
27
ATTACHMENT 1
Arenchild Affidavit
28
Attachment 1
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Northern States Power Company,
A Minnesota Corporation
Border Winds Energy, LLC
Pleasant Valley Wind, LLC
)
)
)
)
)
)
Docket No. EC14-_______-000
AFFIDAVIT OF
MATTHEW E. ARENCHILD
INTRODUCTION
My name is Matthew E. Arenchild. I am a Director in the Energy practice at Navigant.
My business address is 35 Iron Point Circle, Suite 225, Folsom, CA 95630. I hold a Ph.D. in
economics as well as an M.S. in Applied Economics and Finance and have worked on issues
surrounding the U.S. electricity industry for over 15 years. A primary focus of my consulting work
has been related to market power issues concerning mergers, asset acquisitions and market-based
rate applications. I have conducted numerous analyses based on the Federal Energy Regulatory
Commission’s (“Commission”) various market power guidelines and also have developed
proprietary models and databases to implement these analyses.
I have testified before the
Commission and appeared before various state commissions. My resume is included as Exhibit
MEA-1.
I have been asked by counsel for Northern States Power Company, a Minnesota
corporation (“NSPM”),1 Border Winds Energy, LLC (“Border Winds”), and Pleasant Valley
Wind, LLC (“Pleasant Valley”) (collectively, “Applicants”) to evaluate the potential competitive
impact on relevant electricity markets of a transaction under which 100 percent of the limited
1
Xcel Energy Services Inc. (“XES”) is the services company subsidiary of Xcel Energy Inc. (“Xcel Energy”), the
registered holding company parent of NSPM. XES provides NSPM with various services and appears in
regulatory proceedings on behalf of NSPM and other Xcel Energy Operating Companies.
1
Attachment 1
liability company interests in Border Winds and Pleasant Valley are sold to NSPM and merged
into NSPM (the “Transaction”).
NSPM is one of four Xcel Energy utility operating companies. NSPM and Northern
States Power Company, a Wisconsin corporation (“NSPW”, jointly referred to as the “NSP
Companies” or the “NSP System”) operate as a single integrated system and local balancing
authority area. The NSP Companies are vertically integrated transmission-owning members of
the Midcontinent Independent System Operator, Inc. (“MISO”).2
Border Winds is developing a 150 MW wind facility in MISO (the “Border Winds
Facility”) in eastern North Dakota. Pleasant Valley is developing a 200 MW wind facility in
MISO (the “Pleasant Valley Facility”) in southeastern Minnesota. Border Winds and Pleasant
Valley are subsidiaries of RES America Development, Inc., a Delaware corporation, which owns
90% of Border Winds and Pleasant Valley, and RES America Investments, a Delaware
corporation, which owns 10% of Border Winds and Pleasant Valley. The owners of Border
Winds and Pleasant Valley are wholly-owned subsidiaries of Renewable Energy Systems
Americas, Inc. (“RES Americas” or “RES Group”).
RES Americas is a wholly-owned
subsidiary of Renewable Energy Systems Holdings Ltd. (“RES Holdings”), a corporation formed
under the laws of England and Wales. With the exception of two wind farms located in the
Electric Reliability Council of Texas region, RES Americas does not own and is not affiliates
with any entity that currently owns generation or transmission facilities in the United States.
Construction of both the Border Winds Facility and the Pleasant Valley Facility is scheduled to
commence in 2014, with operations beginning in 2015.
My affidavit addresses both the potential horizontal and vertical market power effects of
the proposed Transaction.
The potential horizontal market power effects of the proposed
Transaction are those arising from the combination of the NSP Companies’ generating resources
with the Border Winds Facility and the Pleasant Valley Facility that theoretically could enable
the NSP Companies to increase prices in relevant electricity markets. The potential vertical
market power effects would arise from barriers to entry that might undercut the presumption that
2
The other Xcel Energy Operating Companies are Public Service Company of Colorado, located in the Western
Electricity Coordinating Council region, and Southwestern Public Service, located in the Southwest Power
Pool, Inc. region.
2
Attachment 1
long-run generation markets are competitive and, more generally, the potential to use control
over fuel supplies, fuel transportation facilities, or electric transmission to exert vertical market
power by increasing rivals’ costs.
SUMMARY OF ANALYSIS AND CONCLUSIONS
The proposed Transaction will not have an adverse impact on competition in any relevant
market. The only relevant geographic market is MISO, where Applicants’ assets are located.
Table 1 below provides a summary of Installed Capacity in MISO.3
Table 1: Installed Capacity Analysis
Installed Capacity Analysis
Geographic Market
MISO (includes Southern Region)
NSP RES RES Group Group Market Size System (MW)*
(MW)** NSP (%) (MW)***
(%)
HHI Change
176,454 10,759
6.1%
350
0.2% 2
* Market Size is "Generating Capacity" from MISO's website (MISO Fact Sheet) (March, 2013 and current):
https://www.misoenergy.org/Library/Repository/Communication%20Material/Corporate/Corporate%20Fa
ct%20Sheet.pdf
** NSP System capacity is based on Summer Net Dependable Capacity ratings.
*** RES Group capacity consists of planned Border Wind Facility (150 MW) and Pleasant Valley Facility (200 MW) wind projects.
There is no adverse horizontal market effect of the Transaction resulting from the
combination of generation in common markets. The Commission generally requires the filing of a
horizontal Competitive Analysis Screen in order to demonstrate that a proposed transaction will
not have an adverse effect on competition. When the extent of business transactions by the
merging entities in the same geographic markets is de minimis, however, a horizontal Competitive
Analysis Screen (or Delivered Price Test (“DPT”)) is not required. As discussed below, in this
instance, the extent of business overlap between the NSP Companies and Border Winds and
Pleasant Valley in MISO is de minimis and, thus, no horizontal Competitive Analysis Screen
should be required. The two wind facilities being acquired by the NSP Companies will make up
3
The relevant geographic market is now the current MISO market, which includes the Southern zone (e.g.,
Entergy Corp. and other Balancing Authority Areas (“BAAs”) and entities that joined MISO in December
2013). Below, I also provide results for the “old” MISO configuration that excludes the Southern Region (i.e.,
the MISO Central and MISO North regions). There are clearly no issues even in this smaller, and no longer
relevant, geographic market.
3
Attachment 1
about 0.2 percent of the MISO market, even assuming that the Border Winds Facility and the
Pleasant Valley Facility can produce at their full nameplate ratings. Post-Transaction, the NSP
Companies will own or control only about 6.3 percent of Installed Capacity in MISO. The implied
change in market concentration (as measured by the Herfindahl-Hirschman Index (“HHI”)) is only
2 points.
Therefore, I believe that the Commission can readily conclude that there are no
horizontal market power concerns raised by the proposed Transaction.
I have, however, also included DPT analyses, as described below, to further support the
conclusion that the proposed Transaction will not have an adverse impact on horizontal
competition. Tables 2 and 3 below present the results of my base case DPT analysis, described
more fully below, for the Economic Capacity and Available Economic Capacity measures,
respectively, in MISO.4 I have conservatively excluded imports in my analyses.
Table 2: DPT Analysis – Economic Capacity Measure
Period
S_SP1
S_SP2
S_P
S_OP
W_SP
W_P
W_OP
SH_SP
SH_P
SH_OP
Price $ 190
$ 88
$ 43
$ 32
$ 50
$ 39
$ 31
$ 55
$ 38
$ 30
NSP System
Mkt MW
Share
9,648
6%
9,648
6%
8,167
6%
7,452
6%
8,552
6%
7,675
6%
5,928
6%
7,861
5%
6,768
6%
5,372
6%
Pre‐Transaction
RES Group
Mkt MW
Share
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
Market Size
170,286
169,668
146,492
115,586
149,858
126,789
94,986
144,108
112,098
84,295
HHI
460
462
452
376
481
371
418
459
364
425
Post‐Transaction
NSP System
Mkt MW
Share Market Size
HHI
9,754
6% 170,286 461
9,754
6% 169,668 463
8,273
6% 146,492 453
7,558
7% 115,586 377
8,658
6% 149,858 482
7,781
6% 126,789 372
6,033
6% 94,986 420
7,967
6% 144,108 460
6,874
6% 112,098 365
5,477
6% 84,295 427
HHI Chg
1
1
1
1
1
1
1
1
1
2
Table 3: DPT Analysis – Available Economic Capacity Measure
Period
S_SP1
S_SP2
S_P
S_OP
W_SP
W_P
W_OP
SH_SP
SH_P
SH_OP
4
Price $ 190
$ 88
$ 43
$ 32
$ 50
$ 39
$ 31
$ 55
$ 38
$ 30
NSP System
Mkt MW
Share
‐
0%
1,518
3%
1,841
4%
2,268
6%
2,507
5%
2,225
5%
1,157
4%
1,878
4%
1,674
5%
1,053
5%
Pre‐Transaction
RES Group
Mkt MW
Share
106
0.3%
106
0.2%
106
0.3%
106
0.3%
106
0.2%
106
0.3%
106
0.4%
106
0.2%
106
0.3%
106
0.5%
Market Size
33,423
44,508
42,031
36,694
50,356
41,331
26,176
46,701
34,047
23,319
HHI
687
530
501
568
503
499
562
482
531
415
Post‐Transaction
NSP System
Mkt MW
Share Market Size
HHI
106
0% 33,423 687
1,623
4% 44,508 531
1,947
5% 42,031 504
2,373
6% 36,694 571
2,613
5% 50,356 505
2,331
6% 41,331 502
1,263
5% 26,176 566
1,984
4% 46,701 484
1,780
5% 34,047 534
1,159
5% 23,319 419
HHI Chg
‐
2
2
4
2
3
4
2
3
4
I also analyzed price sensitivity analysis. The results are not materially different than those shown herein and
are provided in work papers.
4
Attachment 1
There are no concerns raised by the proposed Transaction in either capacity or ancillary
services markets in MISO. The Installed Capacity analysis described above approximates the
effect in the MISO capacity market, although it overstates the participation of Border Winds and
Pleasant Valley because I understand that MISO credits these resources at only about 14 percent of
their nameplate ratings. Also, the NSP Companies do not offer or provide ancillary services from
their wind resources in MISO. Thus, there are no issues raised by the proposed Transaction in
capacity or ancillary services markets.
The Transaction does not raise any competitive concerns with regard to vertical market
power. There are no electric transmission market power concerns raised by the Transaction. The
NSP Companies’ own electric transmission facilities, but such facilities are under the functional
control and/or oversight of MISO. With the exception of certain customers taking service under
grandfathered transmission service agreements on file with the Commission, all transmission
customers take service pursuant to the MISO Tariff.5 Thus, the NSP Companies’ transmission
assets are subject to an OATT, which the Commission has “deemed to mitigate a seller’s
transmission market power.”6 Once built, the Border Winds Facility and the Pleasant Valley
Facility, including any interconnection facilities or network upgrades constructed to allow
interconnection, will also be under the functional control and/or oversight of MISO.
The Commission also considers whether applicants have the ability to erect barriers to
entry by other suppliers in terms of: (1) control of sites for new capacity development other than
those that may exist at the sites being acquired; (2) control of fuel inputs to generation; and
(3) control of any equipment suppliers or facilities used to transport fuels or other inputs to
generation.
Applicants do not have the ability to frustrate entry due to their control over fuels or fuel
delivery systems. Xcel Energy Inc.’s gas pipeline interests are very minor and the Commission has
5
The Xcel Energy Operating Companies also have a joint open access transmission tariff on file with the
Commission (“Xcel Energy OATT”). However, I understand that tariff primarily serves transmission
customers of PSCo and that there are no customers on the NSP System taking transmission service under that
tariff.
6
Order No. 697 at P 21. See also Great Plains Energy Inc., 121 FERC ¶ 61,069 at P 37 (2007), where the
Commission concluded that “[a]pplicants’ transmission facilities are currently and will continue to be operated
pursuant to an OATT, thus ensuring that they cannot be used to frustrate competition in wholesale electricity
markets.”
5
Attachment 1
previously acknowledged that these facilities did not raise market power concerns.7 NSPM’s gas
assets do not provide NSPM with the ability to erect barriers to entry. There are several nonaffiliated interstate gas pipelines and local distribution companies serving the NSPM electric
service territory. Applicants also cannot restrict entry via their control of sites for generating
capacity development. Finally, NSPM does not control coal supplies or barges and rail cars used
for the transportation of coal supplies except rail cars leased solely to deliver fuel for their coalfired generating plants. Therefore, I conclude that Applicants cannot erect barriers to entry that
would prevent competitors from participating in the relevant geographic market.
Thus, none of the vertical concerns that the Commission typically considers exists here and
hence the Transaction does not create or enhance vertical market power.
Based upon the analyses I have conducted, summarized above and detailed more fully
below, I conclude that the proposed Transaction will not adversely affect competition.
DESCRIPTION OF APPLICANTS AND OTHER RELEVANT ENTITIES
NSP Companies
The Application contains a complete description of the NSP Companies and their affiliates.
The relevant generation owned by the NSP Companies in MISO is detailed in Exhibit MEA-2.
RES Group
The Application contains a complete description of RES Group and its affiliates. Border
Wind and Pleasant Valley are the only relevant assets owned or controlled by the RES Group.
FRAMEWORK FOR THE ANALYSIS
Market power is the ability of a firm profitably to maintain prices above competitive
levels for a significant period of time.
Market power analysis of a proposed merger or
acquisition examines whether the merger/acquisition would cause a material increase in the
relevant firm’s or firms’ market power or a significant reduction in the competitiveness of
relevant markets. The focus is on the effects of the merger or acquisition, which means that the
7
Northern States Power Company (Minnesota) and New Century Energies, Inc., 90 FERC ¶ 61,020 (January 12,
2000) (“Merger Order”), mimeo at page 21.
6
Attachment 1
analysis examines those business areas in which the merging or transacting firms are
competitors. This is referred to as horizontal market power assessment. In most instances, a
merger or acquisition will not affect competition in markets in which the relevant firms do not
compete. In the context of the proposed Transaction, therefore, the focus is properly on those
markets in which applicants are actual or (under some circumstances) potential competitors. The
analysis is intended to measure the adverse impact, if any, of the elimination of a competitor and
related changes in market shares and market concentration as a result of the combination.
Potential vertical market effects of a merger or acquisition relate to the firm’s or firms’
ability and incentives to use their market position over a product or service to affect competition
in a related business or market. For example, vertical effects could result if the merger of two
electric utilities created an opportunity and incentive to operate transmission in a manner that
created market power for the generation activity of the merged company that did not exist
previously. The Commission has identified market power as also arising from dominant control
over potential generation sites or over fuel supplies and delivery systems. Such dominant control
could undercut the presumption that long-run generation markets are competitive.
Understanding the competitive impact of a merger or acquisition requires defining the
relevant market (or markets) in which the merging or transacting firms participate. Participants
in a relevant market include all suppliers, and in some instances potential suppliers, who can
compete to supply the products produced by the merging or transacting parties and whose ability
to do so diminishes the ability of the merging parties to increase prices. Hence, determining the
scope of a market is fundamentally an analysis of the potential for competitors to respond to an
attempted price increase. Typically, markets are defined in two dimensions: geographic and
product. Thus, the relevant market is composed of companies that can supply a given product
(or its close substitute) to customers in a given geographic area.
Horizontal Market Power
In December 1996, the Commission issued Order No. 592,8 the “Merger Policy
Statement,” which provides a detailed analytic framework for assessing the horizontal market
power arising from electric utility mergers. This analytic framework is organized around a
8
Order No. 592, FERC Stats and Regs. ¶ 31,044 (1996).
7
Attachment 1
market concentration analysis. The Commission adopted the Department of Justice and Federal
Trade Commission (“DOJ/FTC”) 1992 Horizontal Merger Guidelines methodology of
measuring market concentration levels by the Herfindahl-Hirschman Index (“HHI”) as its
principal screen for merger-related market power. To determine whether a proposed merger
requires further investigation because of a potential for a significant anti-competitive impact, the
DOJ and FTC consider the level of the HHI after the merger (the post-merger HHI) and the
change in the HHI that results from the combination of the market shares of the merging entities.
The Commission adopted the then-current Guidelines’ standards for market classification.
Markets with a post-merger HHI of less than 1000 are considered “unconcentrated.” The DOJ
and FTC generally consider mergers in such markets to have no anti-competitive impact.
Markets with post-merger HHIs of 1000 to 1800 are considered “moderately concentrated.” In
those markets, mergers that result in an HHI increase of 100 points or fewer are considered
unlikely to have anti-competitive effects. Finally, post-merger HHIs of more than 1800 are
considered to indicate “highly concentrated” markets. The 1992 Merger Guidelines suggest that
in these markets, mergers that increase the HHI by 50 points or less are unlikely to have a
significant anti-competitive impact, while mergers that increase the HHI by more than 100 points
are considered likely to reduce market competitiveness.
On November 15, 2000, the
Commission issued its Revised Filing Requirements Under Part 33 of the Commission’s
Regulations,9 which affirmed the screening approach to mergers consistent with the Appendix A
analysis set forth in the Merger Policy Statement, and codified the need to file a screen analysis
and the exceptions therefrom.
In 2010, the DOJ/FTC Merger Guidelines were revised,
incorporating changes in the market concentration standards based on HHIs. However, the
Commission’s policy relying on the 1992 Merger Guidelines with respect to market
concentration was reaffirmed on February 16, 2012.10
Appendix A of the Merger Policy Statement, the Competitive Analysis Screen, specifies
a “delivered price” screening test, referred to as the DPT herein, to measure EC, defined as
energy that can be delivered into a destination market at a delivered cost less than 105 percent of
9
Order No. 642, Final Rule in Docket No. RM98-4-000, 18 CFR Part 33, 93 FERC ¶ 61,164 (2000) (“Revised
Filing Requirements”).
10
Analysis of Horizontal Market Power under the Federal Power Act, 138 FERC ¶ 61,109 (2012).
8
Attachment 1
the destination market price, and to measure AEC, defined as EC over and above that required to
meet native load and other long-term obligations that meets the delivered price test.
If a proposed transaction raises no market power concerns (i.e., passes the Appendix A
screen), the inquiry generally is terminated. Both the Merger Policy Statement and the Revised
Filing Requirements accept that applications involving no overlap in relevant geographic
markets do not require a screen analysis or filing of the data needed for the screen analysis.11
The DPT is intended to be a conservative screen to determine whether further analysis of
market power is necessary. If the Appendix A analysis shows that a company will not be able to
exercise market power in the destination markets where its generation resides, it generally
follows that the company will not have market power in more broadly defined and more
geographically remote markets. The screen is the first step in determining whether there is a
need for further investigation. If the screening test is not passed, leaving open the issue of
whether the merger will create market power, the Commission invites applicants to propose
mitigation remedies targeted to reduce potential anti-competitive effects to safe harbor levels. In
the alternative, the Commission will undertake a proceeding to determine whether unmitigated
market power concerns mean that the merger is contrary to the public interest.
Relevant Product Markets
The Commission generally has been concerned with three relevant product markets: nonfirm energy, short-term capacity (firm energy) and long-term capacity. Both EC and AEC are
used as measures of energy. Depending on the markets being analyzed, one or the other of these
measures can be deemed more important.
Because MISO includes states that have been
restructured and offer retail access (Illinois and Michigan), but others that are not restructured
and will not introduce retail access in the foreseeable future, both EC and AEC are potentially
relevant metrics with respect to the Transaction.
Under the EC and AEC measures, the amount of generation that is attributed to a market
participant is that capacity controlled by it that can reach the destination market, taking
transmission constraints and costs into account, at a variable cost no higher than 105 percent of
11
18 C.F.R. ¶ 33.3(a)(2)(i).
9
Attachment 1
the destination market price. As described above, the two measures differ as to the treatment of
capacity used to meet native load requirements.
The Commission has determined that long-term capacity markets are presumed to be
competitive, unless special factors exist that limit the ability of new generation to be sited or
receive fuel.12
Order No. 642 directs applicants to analyze relevant ancillary services markets
(specifically, reserves and imbalance energy) “when the necessary data are available.” In MISO,
which is the focus of the competition analysis for the proposed Transaction, there are formalized
ancillary services markets for some products but the acquired wind facilities will have limited (if
any) capability to provide ancillary services since they are non-dispatchable intermittent
resources. MISO has recently introduced a voluntary capacity market, but the acquired wind
facilities will again have limited capability to provide capacity.
Relevant Geographic Markets
Traditionally, the Commission has defined the relevant geographic markets as centered
on the areas where applicants own generation and, if applicants are transmission owners, on the
directly interconnected BAAs.
Both Order No. 592 and the Revised Filing Requirements
continue to define the relevant geographic market in terms of destination markets.13 Further, the
Commission considers as potential additional destination markets other markets in which entities
historically have been customers of the applicants.
Destination markets typically are defined as individual BAAs.
However, the
Commission’s practice has been to aggregate customers that have the same supply alternatives
into a single destination market, and Regional Transmission Organizations (“RTOs”) and
12
The market for long-term capacity generally does not need to be analyzed since the Commission has concluded
as a generic matter that the potential for entry ensures that the long-term capacity market is competitive. See
Promoting Wholesale Competition Through Open Access Non-Discriminatory Transmission Servs. by Pub.
Utils.; Recovery of Stranded Costs by Pub. Utils. & Transmitting Utils., Order No. 888, FERC Stats. & Regs. ¶
31,036 at 31,657 (1996). The presumption that long-term capacity markets are competitive can be overcome if
the applicants have dominant control over power plant sites or fuels supplies and delivery systems.
13
18 C.F.R. 33.3(c)(2). “Identify each wholesale power sales customer or set of customers (destination market)
affected by the proposed transaction. Affected customers are, at a minimum, those entities directly
interconnected to any of the merging entities and entities that have purchased electricity at wholesale from any
of the merging entities during the two years prior to the date of the application.” Id.
10
Attachment 1
Independent System Operators (“ISOs”) generally are default markets where applicable.14
Where transmission constraints exist within an RTO/ISO, the Commission also has considered
submarkets as separate destination markets.15
In the context of the instant Transactions, the appropriate focus of the competitive
analysis is MISO.
Vertical Market Power
In the Revised Filing Requirements, the Commission set out several vertical issues
potentially arising from mergers with input suppliers. The principal issue identified is whether
the merger or acquisition may create or enhance the ability of the merged firm to exercise market
power in downstream electricity markets by control over the supply of inputs used by rival
producers of electricity. Three potential abuses have been identified: the upstream firm has the
ability to raise rivals’ costs or foreclose them from the market in order to increase prices received
by the downstream affiliate; the upstream firm has the ability to facilitate collusion among
downstream firms; or transactions between vertical affiliates could be used to frustrate regulatory
oversight of the cost/price relationship of prices charged by the downstream electricity
supplier.16 The downstream products to be analyzed in a vertical analysis are the same as in the
horizontal analysis. However, the vertical market power analysis focuses on the structural
competitiveness of downstream and upstream product markets, as measured by HHIs, rather than
the change in HHIs resulting from a merger or transaction.
The Commission’s concerns regarding vertical issues have arisen primarily in the context
of mergers between electric utilities and gas transportation providers. The Commission also has
expressed the concern that an entity that controls electric transmission could use that control to
favor its own generation.
14
Order No. 642, FERC Stats. & Regs. ¶ 31,111 at 31,890-1 (2000), citing Atlantic City Elec. Co., 80 FERC ¶
61,126 (1997); Consolidated Edison, Inc., 91 FERC ¶ 61,225 (2000). To the extent there are internal
transmission constraints within these markets, the Commission has considered smaller markets within these
single control areas as potentially relevant. Likewise, the Commission’s indicative screens for purposes of
determining eligibility to obtain authority to sell at market-based rates also use BAAs or RTOs/ISOs as default
geographic markets. Order No. 697 at P 231.
15
Id. at P 246 (citing to a number of Commission decisions involving electric utility mergers).
16
While Order No. 642 identifies these three types of effects, the third is more properly an effect on rates and
regulation, review criteria that exist separately from market power.
11
Attachment 1
I have not conducted a quantitative vertical analysis of the Transaction because the
“merging entities currently do not provide inputs to electricity products (i.e., upstream relevant
products) and electricity products (i.e., downstream relevant products) in the same geographic
markets.”17
With respect to ownership of electric transmission facilities, the Commission in the past
has focused on the extent to which the transmission owner provides open-access transmission or
has transferred operational control over its transmission facilities to an ISO or an RTO. NSPM is
not acquiring network transmission facilities and NSP Companies’ transmission system is
governed by the MISO Tariff.
DESCRIPTION OF METHODOLOGY FOR DPT
I evaluated the competitive effects of the merger using the DPT outlined in Appendix A
and the Revised Filing Requirements. The model includes each potential supplier as a distinct
“node” or area that is connected via a transportation (or “pipes”) representation of the
transmission network. Each link in the network has its own non-simultaneous limit and cost.
Potential suppliers are allowed to use all economically and physically feasible links or paths to
reach the destination market. In instances where more generation meets the economic facet of
the delivered price test than can actually be delivered on the transmission network, scarce
transmission capacity is allocated based on the relative amount of economic generation that each
party controls. In this analysis, I have conservatively excluded imports from outside of MISO.
General Assumptions
Time Periods
I examined ten time periods/load conditions in the context of the DPT, for both the EC
and AEC analyses. The DPT time periods are intended to provide snapshots that reflect a broad
range of system conditions. Broadly, I evaluated hourly load data to aggregate similar hours. I
defined periods within three seasons (Summer, Winter and Shoulder) to reflect the differences in
unit availability, load and transmission capacity. Hours were first separated into seasons to
reflect differences in generating availability and then further differentiated by load levels during
17
18 CFR 33.4(a)(2)(i).
12
Attachment 1
each season.18 For each season, hours were segmented into peak- and off-peak periods.19 The
periods evaluated (and the designations used to refer to these periods in exhibits) are:
SUMMER (June-July-August)
Super Peak 1 (S_SP1):
Super Peak 2 (S_SP2):
Peak (S_P):
Off-peak (S_OP):
Top load hour
Top 10% of peak load hours
Remaining peak hours
All off-peak hours
WINTER (December-January-February)
Super Peak (W_SP):
Peak (W_P):
Off-peak (W_OP):
Top 10% of peak load hours
Remaining peak hours
All off-peak hours
SHOULDER (March-April-May-September-October-November)
Super Peak (SH_SP):
Peak (SH_P):
Off-peak (SH_OP):
Top 10% of peak load hours
Remaining peak hours
All off-peak hours
Market Price Levels
My analysis assumed destination market prices that range from low (in the Off-Peak
periods in which only baseload generation is economic) to high (the highest Summer Super Peak
period during which virtually all generation is economic). In Order No. 642, the Commission
indicated that sub-periods within a season should be determined by load levels rather than by
time periods. For my base case prices, consistent with Commission guidance, I relied on two
years of MISO historical price data, adjusted to reflect forecasted fuel prices for 2014.20 Also
18
Appendix A requires applicants to evaluate the merger’s impact on competition under different system
conditions. For example, aggregating summer peak and shoulder peak conditions may mask important
differences in unit availability and, therefore, a merger could potentially affect competition differently in these
seasons. Thus, applicants are directed to evaluate enough sufficiently different conditions to show the merger’s
impact across a range of system conditions. On the other hand, the DOJ/FTC Horizontal Merger Guidelines
discuss the ability to “sustain” a price increase, and a finding that a structural test (like the HHI statistic)
violates the safe harbor for some small subset of hours during the year may not be indicative of any market
power problems.
19
On-peak hours include Hour Ending (HE) 0700−HE 2200 Monday through Friday.
20
NRG Energy, Inc., 141 FERC ¶ 61,207 at P 63 (2012) (“Moreover, we expect applicants performing DPTs to
conduct their studies using two years of market data in the DPT model for each relevant geographic market
when determining the destination market price for each season/load period”). See work papers.
13
Attachment 1
consistent with Commission guidance, I conducted sensitivity analyses using higher and lower
prices for the destination market21 (changing prices by plus and minus 10 percent relative to base
case prices).
Study Year
I analyzed 2014 market conditions, consistent with the Order No. 642 requirement that
the analysis be forward looking.
Even though my analysis approximates 2014 market
conditions, the primary source of data on generation and transmission is current and recent
historical data.
Where appropriate, I adjusted relevant data to approximate expected 2014
conditions. This includes load and generation dispatch (i.e., fuel and other variable) costs. There
are no foreseeable reasons why a 2015 analysis would result in materially different results of the
competitive analysis.
Generation
My generation database includes generation in MISO; I have conservatively excluded
imports in the DPT analysis.
Jointly-owned plants are allocated among owners based on
ownership shares, consistent with Commission guidance.22
I took into account long-term
purchases/sales to the extent data were available. I relied on a number of public sources to identify
long-term purchase/sales contracts, including market-based rate filings, Energy Velocity (a thirdparty vendor of industry and market data) and press reports. I treated such contracts as if they
resulted in a transfer of ownership/control to the buyer, although I recognize that it is generally not
known if the purchasing party has dispatch rights or otherwise controls the facility.23
The
21
Duke Energy Corporation, 136 FERC ¶ 61,245 at P 118 (2011) ([E]very Delivered Price Test should address
three scenarios: the Base Case, in which applicants should use appropriate forecasted market prices to model
post-merger competition in the study area, and sensitivity analyses of the Base Case that measure the effect of
increasing or decreasing the market prices relative to the Base Case.”).
22
Order No. 697, FERC Stats. & Regs. ¶ 31,252 at P 188 (“there may be situations where a jointly-owned
generation facility is operated by one of the joint-owners for the benefit of and on behalf of all of the jointowners. Under these circumstances, it may be reasonable to allocate capacity based on ownership percentages).
See also Kansas Energy LLC, 138 FERC ¶ 61,107 at P 29 (2012).
23
See 18 C.F.R. § 33.3(c)(4)(i)(A), stating: Economic capacity means the amount of generating capacity owned
or controlled by a potential supplier with variable costs low enough that energy from such capacity could be
economically delivered to the destination market. Prior to applying the delivered price test, the generating
capacity meeting this definition must be adjusted by subtracting capacity committed under long-term firm sales
contracts and adding capacity acquired under long-term firm purchase contracts (i.e., contracts with a remaining
commitment of more than one year). The capacity associated with any such adjustments must be attributed to
the party that has authority to decide when generating resources are available for operation. Other generating
14
Attachment 1
treatment of purchases and sales generally is important with respect to the determination of AEC,
because merchant generation that is committed under a long-term contract to a load-serving entity
then becomes available to participate in AEC only to the extent there is remaining economic
generation in excess of the purchaser’s load responsibilities.
With respect to new generation, I included facilities expected to be on-line by summer
2014. With respect to retirements, I included facilities already retired or approved for retirement
prior to or during 2014.24
The data on generating plant capability is mainly from Ventyx, The Velocity Suite’s
databases (Ventyx), which are also largely based on public reports such as the EIA-860 and the
EIA-411 reports. These data sources provide information on capacity (nameplate and seasonal
(summer and winter) net dependable capacity (NDC) ratings), planned retirements and additions,
operating status, primary and secondary fuel, and ownership, including jointly-owned units.
Seasonal NDC ratings were used for the analyses, with the summer ratings used for the shoulder
time periods. All units with operating status listed as “Operating” or planned to be online by the
second quarter of 2014 were included in the analysis. For jointly-owned plants, shares were
assigned to each of the respective owners.
Each supplier’s generating resources were adjusted to reflect long-term (one year or more)
capacity purchases and sales where they could be identified from publicly available data.
Generation ownership was adjusted to reflect the transfer of control by assuming that the sale
resulted in a decrease in capacity for the seller and a corresponding increase in capacity for the
buyer. Consistent with guidance provided in Appendix A, it was assumed that system power sales
were comprised of the lowest-cost supply for the seller unless a more representative price could be
identified. Public data on purchases and sales, however, are not entirely complete or consistent
across sources.
Because the delivered price test is intended to evaluate energy products, seasonal capacity
was de-rated to approximate the actual availability of the units in each period. That is, it was
assumed that generation capacity would be unavailable during some hours of the year for either
capacity may also be attributed to another supplier based on operational control criteria as deemed necessary,
but the applicant must explain the reasons for doing so.
24
I generally relied on information in the Ventyx database for my review of new entry and retirements, as well as
information from other public documents.
15
Attachment 1
(planned) maintenance or forced (unplanned) outages. Data reported in the NERC “Generating
Availability Data System” (GADS) was used to calculate the “average equivalent availability
factor” to estimate total outages, and the “average equivalent forced outage rate” to estimate forced
outages for fossil and nuclear plants.25 Based on a review of historical planned outages (as
reported in MISO’s FERC Form 714), scheduled maintenance was assumed to occur mostly in the
shoulder season (80 percent), with remainder scheduled during the winter season. Forced outages
were assumed to occur uniformly throughout the year.
Supply curves were developed for each potential supplier, based on estimates of each unit’s
incremental costs. The incremental cost is calculated by multiplying the fuel cost for the unit by
the unit’s efficiency (heat rate) and adding any additional variable costs that may apply, such as
costs for variable operations and maintenance (VO&M) and costs for environmental controls.
Data used to derive incremental cost estimates for each unit were taken from the following sources:
25

Heat Rates – Heat rates were generally taken from Ventyx, which provides
information on heat rates and their sources.

Fuel Costs - Regional dispatch costs for fossil fuel units were from projected
fuel prices. For gas-fired units, I relied on Ventyx’s natural gas prices forecast
for MISO. For oil fired units I used 2012 EIA daily fuel prices, for the relevant
fuel type used at each unit, escalated to 2014 based on NYMEX ClearPort and
Future crude oil prices. For coal-fired units, I used plant specific coal spot
prices from the detailed coal transactions reported in FERC Form 423
supplemented by Ventyx’s Spot prices. In instances where no spot price was
available for a given unit, I used regional average price estimate as my default.

Variable O&M – VO&M were generally assigned to each unit based on the
unit’s characteristics. These generic estimates are based on information in
Ventyx and other trade and industry sources. These VO&M costs are generic
estimates by plant type and do not necessarily match actual individual unit
VO&M costs. Notably, VO&M accounts for a minor portion of the dispatch
costs used in the analysis, and, importantly, the specific VO&M assumption
tends not to alter the merit order of the generic types of generation.

Environmental Costs – All units are assessed a variable dispatch adder to cover
costs associated with SO2 emissions. This unit-specific cost is calculated using
the SO2 content of fuel burned at the unit as reported in FERC Form 423 and
supplemented by Ventyx’s unit specific data and an SO2 allowance cost of
In addition to thermal unit availability, hydro unit availability and generation are specified for each time period. Hydro capacity
factors have been assigned to each unit based on historical operation. Capacity factors for hydro units were based on five years
of Form 923 monthly generation data, reported maximum capacities and, where necessary, assumptions regarding minimum
capacity (assumed to be 15 percent of maximum if no data is available).
16
Attachment 1
$16.59/ton.26 In addition to SO2, the unit dispatch costs also reflect the impact
of existing NOx trading programs in the Northeast (OTR). Unit-specific data
on NOx rates (lbs/mmBtu) were taken from Ventyx. The NOx allowance price
for the Ozone Transport Region was assumed to be $45.03/ton.27
Relevant Geographic Markets
Consistent with the instructions in the Revised Filing Requirements, I identified the
destination markets that could potentially be impacted by the proposed Transaction. As noted
earlier, I examine MISO based on its current footprint, and based on the “old” MISO footprint
that existed before the Southern Region integrated into MISO.
I considered whether there are any potentially relevant narrower geographic submarkets
within MISO in the context of the Transaction, and concluded there were not, for a number of
reasons.
Importantly, there are no submarkets in MISO that, under current regulations or recent
historical guidance, the Commission considers as relevant submarkets. In Order No. 697, where
the Commission identified relevant submarkets for purposes of analyzing market power in the
context of market-based rates, the Commission did not identify any such markets in MISO.28
Available Economic Capacity
The premise of an AEC analysis is to match generation and load-serving obligations of
each market participant. In traditional, vertically-integrated markets, this exercise is relatively
straightforward, because each utility uses its own generation and purchases to meet its load26
27
28
SO2 rates were from Ventyx, The Velocity Suite database and SO2 allowance price is from FERC National Electric Market
Overview report of February 2012.
NOx rates were from Ventyx, The Velocity Suite database and NOx allowance price is from FERC National Electric Market
Overview report of February 2012.
In Order No. 697 at P 246. (“[T]o avoid any possible uncertainty or confusion about the RTO/ISO submarket,
we [the Commission] identify RTO/ISO submarkets that the Commission to date has found to constitute a
separate market.” No such submarkets were identified in MISO. Further, the Commission found that MISO
market also was relevant even in the context of certain constrained areas within MISO. Id. at note 224, citing to
Wisconsin Electric Power Co., 110 FERC ¶ 61,340 at P 19-20, reh’g denied, 111 FERC ¶ 61,361 at P 13-15
(2005) (rejecting challenge to use of Midwest ISO market as the relevant geographic market on basis that local
market power mitigation measures exist: “The tighter thresholds in NCAs such as WUMS in the Midwest ISO,
and the resulting tighter mitigation of bids, are local market power mitigation measures” and should adequately
address specific concerns regarding the possibility that Wisconsin Electric can exercise market power in the
WUMS region). See also 145 FERC ¶ 61,243 (2013) (approving Entergy Corporation’s market-based rate
authority in MISO) and 145 FERC ¶ 61,248 (2013) (establishing two NCAs within the MISO Southern region).
17
Attachment 1
obligations.
On the other hand, where retail electricity markets have been opened to
competition, the link is broken between long-term load-serving commitments and owned
generation and replaced by a mix of physical supply contracts and financial hedging contracts.
In MISO, the situation is somewhat of a hybrid, for two reasons. First, there are two
states in MISO that have introduced retail competition, most notably Illinois, and to a far lesser
extent, Michigan.29
Second, even though other MISO states have not restructured, MISO
coordinates the system-wide commitment and dispatch of generation to serve load at the lowest
cost. These factors combine to make an analysis of AEC in MISO difficult to conduct in a
meaningful manner.
My analysis assumes each utility in MISO economically dispatches its owned/purchased
(regulated) generation to serve its own load, and any residual economic generation is AEC (i.e., a
traditional LSE dispatch). In this analysis, for example, the NSP Companies’ generation was
dispatched to serve its own load. Utilities with no generation or with load in excess of economic
generation would not have AEC supply. Merchant generation, unless subject to a long-term
sales commitment, was considered AEC to the extent it was economic.30
Sensitivity Analysis
As required by the Commission’s guidelines, I conducted price sensitivity analyses, with
destination market prices assumed to be plus or minus 10 percent of base case prices. The results
are very similar to those discussed herein and provided in work papers.
IMPACT OF THE TRANSACTION ON COMPETITION
Horizontal Market Power
Installed Capacity
The proposed Transaction has a de minimis impact on the market. This is true even if I
were to assume, counterfactually, that the relevant geographic market consisted of the old MISO
29
In Michigan, retail choice is limited to no more than 10 percent of a utility’s retail sales.
http://www.michigan.gov/documents/mpsc/electric_choice_resandcomm_379617_7.pdf.
30
I conservatively assumed that the generation owned by small entities (e.g., small municipalities) is committed to
serving their own load and therefore does not participate in the AEC market.
18
Attachment 1
footprint.31 The market shares and resulting changes in market concentration are shown in the
table below.
Table 4: Installed Capacity Analysis in MISO and MISO Excluding Southern Region
Installed Capacity Analysis
Market Size Geographic Market
(MW)*
MISO (includes Southern Region)
176,454
Old MISO (excludes Southern Region) 132,296
RES RES NSP Group Group System (%)
HHI Change
(MW)** NSP (%) (MW)***
10,759
6.1%
350
0.2% 2
10,759
8.1%
350
0.3% 4
* Market Size is "Generating Capacity" from MISO's website (MISO Fact Sheet) (March, 2013 and current):
https://www.misoenergy.org/Library/Repository/Communication%20Material/Corporate/Corporate%20Fa
ct%20Sheet.pdf
** NSP System capacity is based on Summer Net Dependable Capacity ratings.
*** RES Group capacity consists of planned Border Wind Facility (150 MW) and Pleasant Valley Facility (200 MW) wind projects.
Based on generation shares, the MISO market is unconcentrated. MISO’s independent
market monitor in its 2011 State of the Market Report found that MISO overall had an HHI of
557.32
Economic Capacity
The DPT analysis for EC confirms that the MISO market is unconcentrated and that the
proposed Transaction would have a de minimis impact on market concentration.
31
The Southern Region includes more than 45,000 MW of generation and a corresponding amount of load from
Entergy (“EES”), Lafayette Utilities (“LAFA”), Louisiana Power and Utilities (“LEPA”), South Mississippi
Electric Power Association (“SMEPA”), Louisiana Generation (“LAGN”) and Cleco (“CLEC”).
32
2011 State of the Market Report for the MISO Electricity Markets, Potomac Economics, Independent Market
Monitor for MISO, Figure A88,
http://www.potomaceconomics.com/uploads/midwest_reports/2011_SOM_Report.pdf.
19
Attachment 1
Table 5: Economic Capacity in MISO
Period
S_SP1
S_SP2
S_P
S_OP
W_SP
W_P
W_OP
SH_SP
SH_P
SH_OP
Price $ 190
$ 88
$ 43
$ 32
$ 50
$ 39
$ 31
$ 55
$ 38
$ 30
NSP System
Mkt MW
Share
9,648
6%
9,648
6%
8,167
6%
7,452
6%
8,552
6%
7,675
6%
5,928
6%
7,861
5%
6,768
6%
5,372
6%
Pre‐Transaction
RES Group
Mkt MW
Share
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
Market Size
170,286
169,668
146,492
115,586
149,858
126,789
94,986
144,108
112,098
84,295
HHI
460
462
452
376
481
371
418
459
364
425
Post‐Transaction
NSP System
Mkt MW
Share Market Size
HHI
9,754
6% 170,286 461
9,754
6% 169,668 463
8,273
6% 146,492 453
7,558
7% 115,586 377
8,658
6% 149,858 482
7,781
6% 126,789 372
6,033
6% 94,986 420
7,967
6% 144,108 460
6,874
6% 112,098 365
5,477
6% 84,295 427
HHI Chg
1
1
1
1
1
1
1
1
1
2
Even excluding the Southern Region, which has been integrated into MISO, the market
remains unconcentrated and the HHI changes are de minimis.
Table 6: Economic Capacity in MISO, Excluding Southern Region
Period
S_SP1
S_SP2
S_P
S_OP
W_SP
W_P
W_OP
SH_SP
SH_P
SH_OP
Price $ 190
$ 88
$ 43
$ 32
$ 50
$ 39
$ 31
$ 55
$ 38
$ 30
NSP System
Mkt MW
Share
9,648
8%
9,648
8%
8,167
8%
7,452
8%
8,552
8%
7,675
8%
5,928
8%
7,861
8%
6,768
8%
5,372
8%
Pre‐Transaction
RES Group
Mkt MW
Share
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.1%
106
0.2%
Market Size
122,654
122,070
105,049
89,302
106,491
95,458
72,993
103,472
84,622
65,052
HHI
436
439
423
402
436
424
416
434
407
424
Post‐Transaction
NSP System
Mkt MW
Share Market Size
HHI
9,754
8% 122,654 437
9,754
8% 122,070 440
8,273
8% 105,049 425
7,558
8% 89,302 404
8,658
8% 106,491 438
7,781
8% 95,458 425
6,033
8% 72,993 418
7,967
8% 103,472 436
6,874
8% 84,622 409
5,477
8% 65,052 427
HHI Chg
1
1
2
2
2
2
2
2
2
3
Available Economic Capacity
The AEC results are shown below. The changes in HHI are again de minimis.
20
Attachment 1
Table 7: Available Economic Capacity in MISO
Excluding the Southern Region does not materially change the results of the analysis. The
changes in HHI are so low that the overall market concentration is not relevant.
Table 8: Available Economic Capacity in MISO, Excluding Southern Region
Period
S_SP1
S_SP2
S_P
S_OP
W_SP
W_P
W_OP
SH_SP
SH_P
SH_OP
Price $ 190
$ 88
$ 43
$ 32
$ 50
$ 39
$ 31
$ 55
$ 38
$ 30
NSP System
Mkt MW
Share
‐
0%
1,518
5%
1,841
6%
2,268
8%
2,507
7%
2,225
7%
1,157
5%
1,878
6%
1,674
7%
1,053
5%
Pre‐Transaction
RES Group
Mkt MW
Share
106
0.5%
106
0.4%
106
0.4%
106
0.4%
106
0.3%
106
0.3%
106
0.5%
106
0.3%
106
0.4%
106
0.5%
Market Size
22,699
29,913
29,860
29,879
33,826
30,842
21,723
31,442
25,311
19,699
HHI
1,217
864
794
754
709
733
725
711
788
504
Post‐Transaction
NSP System
Mkt MW
Share Market Size
HHI
106
0% 22,699 1,217
1,623
5% 29,913 867
1,947
7% 29,860 798
2,373
8% 29,879 759
2,613
8% 33,826 714
2,331
8% 30,842 738
1,263
6% 21,723 730
1,984
6% 31,442 715
1,780
7% 25,311 794
1,159
6% 19,699 509
HHI Chg
‐
4
4
5
5
5
5
4
6
6
Capacity Market
As noted earlier, the acquired wind facilities will provide very little, if any, capacity
because they are intermittent wind resources. The Installed Capacity analysis presented above
represents a conservative approximation of the impact on the capacity market and, clearly, there
are no competitive issues.
Ancillary Services
As noted above, the wind facilities are assumed not to provide ancillary services. Thus,
there is no impact on ancillary services from the proposed Transaction.
21
Attachment 1
Vertical Market Power
The Transaction does not raise any competitive concerns with regard to vertical market
power. There are no electric transmission market power concerns raised by the Transaction. The
NSP Companies own electric transmission facilities, but such facilities are subject to open access
transmission tariffs and also under the control and/or oversight of MISO.
The Commission also considers whether applicants have the ability to erect barriers to
entry by other suppliers in terms of: (1) control of sites for new capacity development other than
those that may exist at the sites being acquired; (2) control of fuel inputs to generation; and
(3) control of any equipment suppliers or facilities used to transport fuels or other inputs to
generation.
Applicants do not have the ability to frustrate entry due to their control over fuels or fuel
delivery systems. Xcel Energy Inc.’s pipeline interests are very minor and the Commission has
previously acknowledged that these facilities did not raise market power concerns.33 NSPM’s gas
assets do not provide NSPM with the ability to erect barriers to entry. There are several large
non-affiliated interstate gas pipelines serving the NSPM electric service area (Northern Natural
Gas, Viking Gas Transmission, Great Lakes Gas Transmission, Northern Border Pipeline,
Williston Basin Interstate Pipeline). There are also several other natural gas local distribution
companies (“LDCs”) serving the NSPM electric service area, including Centerpoint Energy,
MidAmerican Energy, Montana Dakota Utilities, and Minnesota Energy Resources Corp., and I
understand retail natural gas service areas in Minnesota and North Dakota are not exclusive.
(NSPM does not provide gas service in South Dakota.) Applicants cannot restrict entry via their
control of sites for generating capacity development. Finally, Xcel Energy (nor NSPM) controls
coal supplies or barges and rail cars used for the transportation of coal supplies except rail cars
leased solely to deliver fuel for their coal-fired generating plants. Therefore, I conclude that
Applicants cannot erect barriers to entry that would prevent competitors from participating in the
relevant geographic market.
33
Northern States Power Company (Minnesota) and New Century Energies, Inc., 90 FERC ¶ 61,020 (January 12,
2000) (“Merger Order”), mimeo at page 21.
22
Attachment 1
Thus, none of the vertical concerns that the Commission typically considers exists here and
hence the Transaction does not create or enhance vertical market power.
CONCLUSION
The market power analyses discussed herein demonstrate that the proposed Transaction
will not have anti-competitive effects in any relevant market.
23
Exhibit MEA-1
Matthew E. Arenchild, Ph.D.
Dr. Arenchild is a Director at Navigant in the Energy Practice’s Power
Systems, Markets & Pricing group. He has extensive experience in
applied economics and regulation in the energy field, particularly
Navigant
3100 Zinfandel Drive, Suite 600
with respect to addressing the challenges facing the United States
Rancho Cordova, CA 95670-6064
electric industry. Dr. Arenchild has worked with numerous
Tel: 916-631-3221
companies throughout the United States on energy and electric utility
Fax: 916-852-1073
issues involving market power at the state and federal level, antitrust
matt.arenchild@navigant.com
cases, litigation, electric industry restructuring, electric transmission
access and rates, market manipulation, and compliance issues. A key
Professional History
focus of Dr. Arenchild’s work has been to direct market power

Director, Navigant - Present

Principal, Charles River Associates
analyses that apply the various regulatory guidelines, such as the

Principal Consultant, PA Consulting
Federal Energy Regulatory Commission’s Appendix A screen for
and its predecessor companies (PHB
mergers and acquisitions and the FERC’s various guidelines in cases
Hagler Bailly and Putnam, Hayes &
where the parties are seeking to obtain or renew market-based rate
Bartlett).
authority. He has also analyzed behavioral market power issues,
Education
examined problems of vertical integration in a variety of cases, and

Ph.D. Economics, Washington State
assisted clients with numerous issues arising from utility
University
restructuring. Dr. Arenchild worked extensively on various litigation

M.S. Applied Economics and
Finance, University of California,
projects arising primarily from the California “crisis” and subsequent
Santa Cruz
investigations into market manipulation allegations. He has also

B.A. Economics, University of
worked with a variety of clients on compliance matters related to
California, Santa Cruz
FERC’s Codes and Standards of Conduct, as well as more general
Membership
reporting requirements. Dr. Arenchild’s experience includes leading
 Board of Directors (Vice President):
the development of a suite of proprietary models used to analyze
New Morning Youth and Family
market power in the electric utility industry and currently leads the
Services
development and maintenance of related databases. Dr. Arenchild
has testified before FERC and appeared before industry groups and
state regulatory commissions.
Matthew E. Arenchild, Ph.D.
Director
Page 1
Matthew E. Arenchild, Ph.D.
Professional Experience
Market Power / Antitrust – FERC, DOJ/FTC
»
Applied the FERC’s Appendix A merger guidelines for a variety of clients, including a number of
entities merging, seeking market-based rate authority, or seeking strategic advice on the firms
that could be acquired without triggering market power concerns.
»
Assisted with development of the Competitive Analysis Screening Model (CASm) used to
perform the “delivered price test” described in the FERC’s Appendix A guidelines.
»
Conducted numerous analyses and associated testimony or reports for clients in support of their
applications for market-based rate authority. Analyses conducted under the various, then
applicable, FERC standards, including the traditional “hub-and-spoke” analysis, the Supply
Margin Assessment (SMA) standard, and FERC’s interim and final “Indicative Screens.”
»
Participated in numerous technical conferences, generally with FERC staff, regarding applicant’s
filings.
»
Assisted a number of clients with Department of Justice reviews of potential mergers and
acquisitions, including meeting with DOJ personnel to discuss antitrust concerns.
»
Worked with numerous clients to develop comments and suggestions on proposed FERC
regulatory policy.
»
Led development of a proprietary model (CEMA) to evaluate behavioral market power issues
and effectiveness of alternative bidding strategies on market clearing prices and profits. The
CEMA model has been filed in state proceedings.
»
Led development of a proprietary model to calculate structural market power indicators using a
regional equilibrium framework.
»
Led modeling effort for retail market power study using a commercial chronological production
cost model (PROSYM). The model was used to conduct a behavioral analysis by evaluating the
profitability of various bidding strategies and to provide input data for the corresponding
structural analyses.
»
Examined vertical market power issues in a number of cases, covering both electric
generation/electric transmission and electric generation/fuel supply. Developed methodology to
evaluate relevant geographic markets using publicly available databases. Analysis was used to
support market power filings before the FERC and state commissions.
»
Proposed and/or evaluated various strategies to mitigate market power, such as asset divestiture,
short- and long-term contracts, and swap contracts.
Page 2
Matthew E. Arenchild, Ph.D.
»
Analyzed whether an investor-owned utility had violated antitrust statutes against illegal tying
arrangements when it required joint owners in a generating unit to also purchase coal from the
utility.
Litigation / Market Manipulation / Compliance
»
Conducted a variety of analyses in support of entities regulatory filings and confidential
negotiations regarding the California “crisis” and subsequent investigations.
»
Supported a number of clients in FERC investigations or audits for compliance matters, including
for potential violations of Codes of Conduct, Standards of Conduct and reporting requirements
(including Electric Quarterly Reports). Provided analytical support, as well as making
presentations to FERC, in order to resolve outstanding issues. Formulated and presented
recommendations to senior management regarding going-forward procedures to ensure
compliance.
Restructuring / Stranded Investment
»
Part of team assisting investor-owned utilities during restructuring hearings in Pennsylvania and
Maryland. Specific responsibilities included preparing and evaluating fuel forecasts and
estimating the cost of new capacity. These inputs were used to estimate the future market price
of energy and capacity using GE’s MAPS simulation model. Also researched proposals to
securitize a portion of the utility’s stranded investment and prepared and presented to counsel a
review of the opposing expert’s prior testimony.
»
Evaluated proposed federal legislation to restructure the electric industry. Analyzed the
underlying economic studies used to support specific congressional proposals.
»
Part of team that evaluated proposed new electric generating facilities in various parts of the
United States. Led effort to assess whether companies in various regions would exercise market
power, thereby raising returns to the planned projects. Evaluated state-specific restructuring
laws regarding stranded costs, provider of last resort, rate caps, and other issues to gauge impact
on the incentives of various market participants. Also evaluated concentration in each region,
both before and after assumed restructuring.
Page 3
Matthew E. Arenchild, Ph.D.
Transmission / Distribution / Ancillary Services
»
Analyzed the methodology used to calculate MW-Mile transmission rates contained in the MAPP
Restated Agreement.
»
Evaluated the types of transmission service traditionally offered in the electric industry, focusing
specifically on the meaning of “firm” transmission service, which was the key issue in a lawsuit
between two Pacific Northwest electric utilities.
»
Worked with Power Technologies Inc (PTI) and electric utility clients to develop flow-based
database for use in market power analysis, including flowgate framework and Transfer
Distribution Factors.
»
Led a number of efforts to develop transmission capacity values in both the Eastern
Interconnection and the WECC, working with utility and NERC personnel.
»
Worked with client’s transmission personnel in developing methodologies for estimating
simultaneous import limits that are consistent with FERC’s Appendix E methodology.
»
Evaluated proposal to equalize distribution costs in a state. Proposed alternative methodologies
that the client could support and that would result in a more favorable cost allocation method for
the company.
»
Lead author for report analyzing provision of Ancillary Services in the WECC and FERC’s
existing regulations.
Other Projects in the Energy and Environmental Fields
»
Analyzed the opportunity for existing and potential Qualifying Facilities to participate in the
relevant markets as part of a group of utilities’ petition to be relieved of their obligation to
purchase from such facilities located in their respective service territories under Section 210M of
PURPA.
»
Acted as primary outside consultant for two affiliated parties negotiating a new power supply
contract.
»
Analyzed displacement provisions in a contract between an investor-owned utility and a
Qualifying Facility in the Pacific Northwest. Evaluated the Qualifying Facility’s methodology for
displacement and developed a new model to determine displacement based on engineering
constraints and considering the interaction between the cogenerator and its host facility, its gas
contracts with subsidiaries, and other contractual arrangements.
»
Estimated the non-market damages suffered by a country as a result of Iraq’s actions during the
Gulf War. Project included team members traveling to impacted gulf state country. The
estimates were filed with a UN commission.
Page 4
Matthew E. Arenchild, Ph.D.
»
Evaluated the cost profiles of different technologies to produce a product used in nuclear
warheads (tritium). Specific recommendations were made to the secretary of the Department of
Energy regarding the most cost-effective means of replenishing the United States stockpile of the
product.
»
Analyzed the incentives of a vertically integrated firm to shift costs between production stages in
a royalty dispute between a group of large oil companies and their respective royalty
shareholders. Evaluated whether certain contracts were the result of “arms-length” negotiations
and the effect of lateral tariffs on delivered contract prices.
Testimony, Presentations, Conferences and Memberships
»
Analysis of Transmission Rate Methodology in MAPP: Affidavit of Matthew Arenchild, “Motion to
Intervene, Protest, Request for Suspension and for Further Procedures of Otter Tail Power
Company,” February 1997, Docket Nos. OA97-163, et al.
»
Section 203 Analysis of Entergy Gulf States, Inc. acquiring Calcasieu: Affidavit of Matthew E.
Arenchild, “Entergy Gulf States, Inc. and Calcasieu Power, LLC,” March 15, 2007, Docket No.
EC07-70; Rebuttal Affidavit of Matthew E. Arenchild, “Entergy Gulf States, Inc. and Calcasieu
Power, LLC,” May 15, 2007, Docket No. EC07-70; Supplemental Affidavit of Matthew E. Arenchild,
“Entergy Gulf States, Inc. and Calcasieu Power, LLC,” June 28, 2007, Docket No. EC07-70;
Surrebuttal Affidavit of Matthew E. Arenchild, “Entergy Gulf States, Inc. and Calcasieu Power,
LLC,” August 9, 2007, Docket No. EC07-70.
»
Evaluation of Opportunities for Qualifying Facilities in the Service Territories of Southwestern
Public Service Company, Oklahoma Gas and Electric, Public Service Company of Oklahoma and
Southwestern Electric Power Company: Affidavit of William H. Hieronymus and Matthew E.
Arenchild, “Xcel Energy Services Inc., Southwestern Public Service Company, Oklahoma Gas and
Electric Company, American Electric Power Service Corporation, Public Service Company of
Oklahoma and Southwestern Electric Power Company,” September 25, 2007, Docket No. QM075.
»
Section 203 Analysis of East Texas Electric Cooperative acquiring Warren Power, LLC: Affidavit
of Matthew E. Arenchild, “Warren Power LLC,” October 31, 2007, Docket No. EC08-9.
»
Section 203 Analysis of Entergy Arkansas, Inc. acquiring Quachita Power, LLC: Affidavit of
Matthew E. Arenchild, “Quachita Power LLC and Entergy Arkansas, Inc.,” November 30, 2007,
Docket No. EC08-19.
»
Section 205 Analysis for H.Q. Energy Services (U.S.) Inc. and Cedar Rapids Transmission
Company: Affidavit of Matthew E. Arenchild, “H.Q. Energy Services (U.S.) Inc. and Cedar Rapids
Transmission Company.,” June 25, 2008, Docket Nos. ER97-851 and ER07-769.
»
Section 205 Analysis for Entergy Nuclear Power Marketing, LLC et al: Affidavit of Matthew E.
Arenchild, “Entergy Nuclear Power Marketing, LLC et al.,” June 27, 2008, Docket Nos. ER06-653, et
al.
Page 5
Matthew E. Arenchild, Ph.D.
»
Section 205 Analysis for New Brunswick Power Generation Corporation: Affidavit of Matthew E.
Arenchild, “New Brunswick Power Generation Corporation,” August 22, 2008, Docket No. ER081439; Supplemental Affidavit of Matthew E. Arenchild, “Integrys Energy Services, Inc. v. New
Brunswick Power Generation Corporation,” August 10, 2009, Docket Nos. ER08-1439 and EL0932.
»
Section 205 Analysis for Entergy Services, Inc., et al: Affidavit of Matthew E. Arenchild, “Entergy
Services, Inc., et al.,” August 29, 2008, Docket Nos. ER99-569, et al.
»
Section 205 Analysis for Xcel Energy Services Inc., et al: Affidavit of Matthew E. Arenchild, ”Xcel
Energy Services Inc, Northern States Power Company and Northern States Power Company
(Wisconsin),” December 22, 2008, Docket Nos. ER01-205-033 and ER98-2640-031; Supplemental
Affidavit of Matthew E. Arenchild, ”Xcel Energy Services Inc, Northern States Power Company and
Northern States Power Company (Wisconsin),” February 6, 2009, Docket Nos. ER01-205-033 and
ER98-2640-031.
»
Section 205 Analysis for Entergy Nuclear Palisades, LLC, et al: Affidavit of Matthew E. Arenchild,
“Entergy Nuclear Palisades, LLC, et al.,” June 30, 2009, Docket Nos. ER06-1410, et al.
»
Section 205 Analysis for Kansas City Power and Light Company, et al: Affidavit of William H.
Hieronymus and Matthew E. Arenchild, “Kansas City Power and Light Company, et al.,” July 23,
2009, Docket Nos. ER99-1005, et al.; Supplemental Affidavit of Matthew E. Arenchild, “Kansas City
Power and Light Company, et al.,” February 18, 2010.
»
Section 205 Analysis for Southwestern Public Service Company: Affidavit of Matthew E. Arenchild,
“Southwestern Public Service Company,” July 31, 2009, Docket No. ER99-1610; Supplemental
Affidavit of Matthew E. Arenchild, “Southwestern Public Service Company,” February 18, 2010.
»
Affidavit for Mieco, Inc. in Docket No. EL09-56 (“Brown Proceeding”), Affidavit of Matthew E.
Arenchild, “People of the State of California, ex rel. Edmund G. Brown, Jr., Attorney General v.
Powerex Corp. (f/k/a/ British Columbia Power, et al.,” September 3, 2009, Docket No. EL09-56.
»
Testimony for Mieco, Inc. in Docket No. EL02-71 (“Lockyer Proceeding”), Prepared Answering
Testimony of Matthew E. Arenchild, “State of California, ex rel. Bill Lockyer, Attorney General v.
British Columbia Power Company, et al.,” September 17, 2009, Docket No. EL02-71.
»
Testimony for Mieco, Inc. in Docket No. EL02-71 (“Lockyer Proceeding”), Prepared CrossAnswering Testimony of Matthew E. Arenchild, “State of California, ex rel. Bill Lockyer, Attorney
General v. British Columbia Power Company, et al.,” November 5, 2009, Docket No. EL02-71.
»
Testimony for Merrill Lynch Capital Services, Inc. in Docket No. EL02-71 (“Lockyer Proceeding”),
Prepared Answering Testimony of Matthew E. Arenchild, “State of California, ex rel. Bill Lockyer,
Attorney General v. British Columbia Power Company, et al.,” September 17, 2009, Docket No.
EL02-71.
Page 6
Matthew E. Arenchild, Ph.D.
»
Testimony for Commerce Energy, Inc. in Docket No. EL02-71 (“Lockyer Proceeding”), Prepared
Answering Testimony of Matthew E. Arenchild, “State of California, ex rel. Bill Lockyer, Attorney
General v. British Columbia Power Company, et al.,” September 17, 2009, Docket No. EL02-71.
»
Section 203 Analysis of Entergy Louisiana, LLC acquiring Acadia Power Partners, LLC: Affidavit
o f Matthew E. Arenchild, “Entergy Louisiana, LLC and Acadia Power Partners, LLC.,” January 29,
2010, Docket No. EC10-43.
»
Section 205 Analysis for Llano Estacado Wind, LLC: Affidavit of Matthew E. Arenchild, “Llano
Estacado Wind, LLC,” March 1, 2010, Docket No. ER02-73.
»
Section 205 Analysis for Llano Estacado Wind, LLC: Affidavit of Matthew E. Arenchild, “Llano
Estacado Wind, LLC,” December, 2012, Docket No. ER02-73.
»
Section 205 Analysis for Arizona Public Service Company: Affidavit of Matthew E. Arenchild,
“Arizona Public Service Company,” March 8, 2010, Docket No. ER99-4124.
»
Section 205 Analysis for Arizona Public Service Company: Affidavit of Matthew E. Arenchild,
“Arizona Public Service Company,” December 2012, Docket No. ER99-4124.
»
Section 205 Analysis for Tucson Electric Company, et al.,: Affidavit of Matthew E. Arenchild,
“Tucson Electric Company, et al.,” March 8, 2010, Docket Nos. ER98-1150, et al.; Supplemental
Affidavit of Matthew E. Arenchild, “Tucson Electric Power Company, et al.,” August 13, 2010.
»
Section 205 Analysis for Tucson Electric Company, et al.,: Affidavit of Matthew E. Arenchild,
“Tucson Electric Company, et al, December 2012, Docket Nos. ER98-1150, et al.
»
Notice of Change in Status Analysis for Arizona Public Service Company: Affidavit of Matthew E.
Arenchild, “Arizona Public Service Company,” June 24, 2010, Docket No. ER99-4124.
»
Section 203 Analysis: Affidavit of Matthew E. Arenchild, “Entergy Power Ventures, LP,” September
1, 2010, Docket No. EC10-91.
»
Notice of Change in Status Analysis for Kansas City Power and Light, et al.: Affidavit of Matthew E.
Arenchild, “Kansas City Power and Light Company, et al.,” September 27, 2010, Docket Nos.
ER99-1005, et al.
»
Section 203 Analysis: Affidavit of Matthew E. Arenchild, “EAM Nelson Holding, LLC,” May 2,
2011, Docket No. EC11-76.
»
Section 205 Analysis for Entergy Nuclear Power Marketing, LLC et al: Affidavit of Matthew E.
Arenchild, “Entergy Nuclear Power Marketing, LLC et al.,” June 29, 2011, Docket Nos. ER06-653, et
al.
Page 7
Matthew E. Arenchild, Ph.D.
»
Section 205 Analysis for Entergy Services, Inc., et al: Affidavit of Matthew E. Arenchild, “Entergy
Services, Inc., et al.,” June 30, 2011, Docket Nos. ER99-569, et al; Supplemental Affidavit of Matthew
E. Arenchild, Entergy Services, Inc., et al.,” December 2, 2011.
»
Notice of Change in Status Analysis for Kansas City Power and Light, et al.: Affidavit of Matthew E.
Arenchild, “Kansas City Power and Light Company, et al.,” July 15, 2011, Docket Nos. ER99-1005,
et al.; Supplemental Affidavit of Matthew E. Arenchild, “Kansas City Power and Light Company, et
al.,” October 28, 2011.
»
“Market Power Issues in Bilateral Ancillary Services Markets,” Docket Nos. RM11-24 and AC1013, August 22, 2011. Lead author for report filed as part of Comments of WSPP Inc.
»
Section 203 Analysis: Affidavit of Matthew E. Arenchild, “FPLE Rhode Island State Energy L.P., et
al.,” November 11, 2011, Docket No. EC12-23.
»
Section 205 Analysis for Xcel Energy Services Inc., et al: Affidavit of Matthew E. Arenchild, ”Xcel
Energy Services Inc, Northern States Power Company and Northern States Power Company
(Wisconsin),” December 22, 2011, Docket Nos. ER10-1819., et al.
»
Section 203 Analysis: Affidavit of Matthew E. Arenchild, “Arizona Public Service Company,” May
31, 2012, Docket No. EC12-106.
»
Section 205 Analysis for Southwestern Public Service Company: Affidavit of Matthew E. Arenchild,
“Southwestern Public Service Company,” June 30, 2012, Docket No. ER99-1610.
»
Section 205 Analysis for Kansas City Power and Light Company, et al: Affidavit of Matthew E.
Arenchild, “Kansas City Power and Light Company, et al.,” June 28, 2012, Docket Nos. ER10-2074,
et al.
»
Section 205 Analysis for Entergy Nuclear Palisades, LLC and Northern Iowa Windpower, LP:
Affidavit of Matthew E. Arenchild, “Entergy Nuclear Palisades, LLC, et al.,” June 30, 2012, Docket
Nos. ER10-1532, et al.
»
Section 205 (Change in Status) Analysis for Kansas City Power and Light Company, et al:
Supplemental Affidavit of Matthew E. Arenchild, “Kansas City Power and Light Company, et al.,”
September, 2012, Docket Nos. ER10-2074, et al.; Second Supplemental Affidavit of Matthew E.
Arenchild, “Kansas City Power and Light Company, et al.,” January, 2013, Docket Nos. ER10-2074,
et al.
»
Notice of Change in Status Analysis for Entergy Services, et al.: Affidavit of Matthew E. Arenchild,
“Entergy Services, et al.,” December 31, 2012, Docket Nos. ER99-569, et al.
»
Notice of Change in Status Analysis for Entergy Services, et al.: Affidavit of Matthew E. Arenchild,
“Entergy Arkansas, Inc., et al.,” September 6, 2013, Docket Nos. ER13-2339, et al.
Page 8
Matthew E. Arenchild, Ph.D.
»
Section 205 Analysis for Southwestern Public Service Company: Affidavit of Matthew E. Arenchild,
“Southwestern Public Service Company,” December 24, 2013, Docket No. ER10-1817.
»
Section 203 Analysis: Affidavit of Matthew E. Arenchild, “Capital Power Investments, LLC, et al.,”
September 19, 2013, Docket No. EC13-151.
»
Section 203 Analysis: Affidavit of Matthew E. Arenchild, “Capital Power Investments, LLC, et al.,”
September 19, 2013, Docket No. EC13-152.
»
Section 205 Analysis: Affidavit of Matthew E. Arenchild, “Bangor Hydro Electric Company, et al.,”
December 27, 2013, Docket No. EC10-2763, et al.
»
Section 205 Analysis: Affidavit of Matthew E. Arenchild, “Blue Sky East, LLC, et al.,” December 31,
2013, Docket No. EC12-2068, et al.
»
Notice of Change in Status Analysis for Tucson Electric Power, et al.: Affidavit of Matthew E.
Arenchild, “Tucson Electric Power, et al.,” January 21, 2014, Docket Nos. ER10-2564, et al.
»
Speaker: American Power Conference, April 2000: “The Role of the Electric Transmission
Network in Market Power Analysis.”
»
Speaker: Morgan Lewis / CRA, International Conference, May 2006: “Getting from Surviving to
Thriving in the New Compliance Era: What to do if faced with an Audit/Investigation.”
»
Speaker: Center for Research in Regulated Industries, Western Conference, June 2012:
“Analyzing State RPS Provisions: Lessons from PURPA’s Implementation.”
»
Member of Organizing Committee/Speaker/Discussant, 2008-2014: Center for Research in
Regulated Industries, Western Conference.
»
Panel Member: Various state public utility commission proceedings and before regulatory and
economic conferences, including sworn testimony before the Mississippi Public Service
Commission regarding deregulating the state’s electric industry.
»
Board of Directors (Vice President): New Morning Youth and Family Services
(http://www.newmorningyfs.org)
Page 9
Exhibit MEA-2
NSP Companies List of Generating Resources
Location
Generation Name
Allen S King - Unit 1
Alliant Techsystems (Excelsior) - Unit 1
Angus Anson - Unit 1
Angus Anson - Unit 2
Angus Anson - Unit 3
Angus Anson - Unit 4
Apple River - Unit 1
Apple River - Unit 2
Apple River - Unit 3
Apple River - Unit 4
Bay Front - Unit 4
Bay Front - Unit 5
Big Blue Wind Farm, LLC
Bay Front - Unit 6
Big Falls - Unit 1
Big Falls - Unit 2
Big Falls - Unit 3
Black Dog - Unit 2
Black Dog - Unit 3
Black Dog - Unit 4
Black Dog - Unit 5
Blue Lake - Unit 1
Blue Lake - Unit 2
Blue Lake - Unit 3
Blue Lake - Unit 4
Blue Lake - Unit 7
Blue Lake - Unit 8
Cedar Falls - Unit 1
Cedar Falls - Unit 2
Cedar Falls - Unit 3
Chippewa Falls - Unit 1
Chippewa Falls - Unit 2
Chippewa Falls - Unit 3
Chippewa Falls - Unit 4
Chippewa Falls - Unit 5
Chippewa Falls - Unit 6
Zephyr Wind, LLC
Cornell - Unit 1
Cornell - Unit 2
Unit
1
1
1
2
3
4
1
2
3
4
4
5
N/A
6
1
2
3
2
3
4
5
1
2
3
4
7
8
1
2
3
1
2
3
4
5
6
N/A
1
2
Owned by
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
Fagen, Inc
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
juwi Wind
NSP - WI
NSP - WI
Controlled by
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-MN
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP - MN
NSP-WI
NSP-WI
COD 'Date
Control
Transferred
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
12/15/2012
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
12/26/2012
NA
NA
Balancing
Authority
Area
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
Geographic
Region
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
In-Service
Date
1968
1994
1966
1994
1994
2005
1920
1920
1901
1920
1948
1950
2012
1956
1922
1922
1922
1987
1955
1960
2002
1974
1974
1974
1974
2005
2005
1915
1910
1911
1928
1928
1928
1928
1928
1928
2013
1976
1976
Nameplate and/or
Seasonal Rating
(MW)
598.4
1.6
119.7
119.7
166.3
0.8
0.8
0.8
20.0
20.0
36.0
27.2
2.6
2.6
2.5
136.9
114.0
179.5
187.9
56.7
56.7
56.7
56.7
166.3
166.3
2.0
2.0
2.0
3.6
3.6
3.6
3.6
3.6
3.6
30.8
11.5
11.5
Exhibit MEA-2
Location
Generation Name
Cornell - Unit 3
Cornell - Unit 4
Dells - Unit 1
Dells - Unit 2
Dells - Unit 3
Dells - Unit 4
Dells - Unit 5
Dells - Unit 6
Dells - Unit 7
Flambeau - Unit 1
French Island - Unit 1
French Island - Unit 2
French Island - Unit 3
French Island - Unit 4
Granite City - Unit 1
Granite City - Unit 2
Granite City - Unit 3
Granite City - Unit 4
Grand Meadow
Hennepin Island - Unit 1
Hennepin Island - Unit 2
Hennepin Island - Unit 3
Hennepin Island - Unit 4
Hennepin Island - Unit 5
High Bridge - Unit 5
High Bridge - Unit 6
High Bridge - Unit 7
High Bridge - Unit 8
High Bridge - Unit 9
Holcombe - Unit 1
Holcombe - Unit 2
Holcombe - Unit 3
Inver Hills - Unit 1
Inver Hills - Unit 2
Inver Hills - Unit 3
Inver Hills - Unit 4
Inver Hills - Unit 5
Inver Hills - Unit 6
Inver Hills - Unit 7
Inver Hills - Unit 8
Jim Falls - Unit 1
Unit
3
4
1
2
3
4
5
6
7
1
1
2
3
4
1
2
3
4
NA
1
2
3
4
5
5
6
7
8
9
1
2
3
1
2
3
4
5
6
7
8
1
Owned by
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - WI
NSP - WI
NSP - WI
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - WI
Controlled by
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-WI
NSP-WI
NSP-WI
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-WI
COD 'Date
Control
Transferred
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Balancing
Authority
Area
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
Geographic
Region
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
In-Service
Date
1976
1976
1922
1924
1930
1930
1930
1914
1907
1969
1940
1948
1974
1974
1969
1969
1969
1969
2008
1954
1955
1954
1954
1955
1956
1959
2008
2008
2008
1950
1950
1950
1972
1972
1972
1972
1972
1972
1997
1997
1988
Nameplate and/or
Seasonal Rating
(MW)
11.5
0.8
2.0
2.6
2.6
2.6
1.6
16.0
15.2
15.2
78.8
78.8
18.0
18.0
18.0
18.0
100.5
2.5
2.5
2.5
2.5
2.5
197.0
197.0
250.0
11.3
11.3
11.3
46.8
46.8
46.8
46.8
46.8
46.8
1.8
1.8
24.8
Exhibit MEA-2
Location
Generation Name
Jim Falls - Unit 2
Jim Falls - Unit 3
Key City - Unit 1
Key City - Unit 2
Key City - Unit 3
Key City - Unit 4
Ladysmith - Unit 1
Ladysmith - Unit 2
Ladysmith - Unit 3
Menomonie - Unit 1
Menomonie - Unit 2
Monticello - Unit 1
Nobles Wind Project
Prairie Island - Unit 1
Prairie Island - Unit 2
Unit
2
3
1
2
3
4
1
2
3
1
2
1
Prairie Rose
Red Wing - Unit 1
Red Wing - Unit 2
Riverside - Unit 8
Riverside - Unit 7
Riverside - Unit 9
Riverside - Unit 10
Saxon Falls - Unit 1
Saxon Falls - Unit 2
Sherburne County - Unit 1
Sherburne County - Unit 2
Sherburne County - Unit 3
Slayton Solar
St Croix Falls - Unit 1
St Croix Falls - Unit 2
St Croix Falls - Unit 3
St Croix Falls - Unit 4
St Croix Falls - Unit 5
St Croix Falls - Unit 6
St Croix Falls - Unit 7
St Croix Falls - Unit 8
Superior Falls - Unit 1
Superior Falls - Unit 2
Thornapple - Unit 1
Thornapple - Unit 2
N/A
1
2
8
ST7
9
10
1
2
1
2
3
N/A
1
2
3
4
5
6
7
8
1
2
1
2
1
2
Owned by
NSP - WI
NSP - WI
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - MN
NSP - MN
NSP - MN
NSP - MN
Enel Green Power North
America,
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
Ecos Energy
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - MN
NSP - MN
NSP - WI
NSP - WI
COD 'Date
Control
Controlled by
NSP-WI
NSP-WI
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-MN
NSP-MN
NSP-MN
NSP-MN
Transferred
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Balancing
Authority
Area
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-MN
NSP-MN
NSP-WI
NSP-WI
12/11/2012
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
1/14/2013
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
Geographic
Region
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
In-Service
Date
1988
1988
1969
1969
1969
1969
1941
1941
1941
1958
1958
1971
2010
1973
1974
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
2012
1949
1949
1987
1964
2009
2009
1912
1912
1976
1977
1987
2013
1905
1905
1905
1905
1910
1910
1911
1911
1917
1917
1927
1927
Nameplate and/or
Seasonal Rating
(MW)
24.8
0.6
18.0
18.0
18.0
0.9
0.9
1.6
2.7
2.7
631.2
201.0
593.1
593.1
200.0
11.5
11.5
165.0
210.6
210.6
0.8
0.8
765.3
765.3
548.0
1.7
2.5
2.5
2.5
2.5
3.4
3.4
3.2
3.2
0.9
0.9
0.7
0.7
Exhibit MEA-2
Location
Generation Name
Trego - Unit 1
Trego - Unit 2
Hayward
Riverdale - Unit 1
Riverdale - Unit 2
United Hospital - Unit 1
United Hospital - Unit 2
United Hospital - Unit 3
West Faribault - Unit 2
West Faribault - Unit 3
Wheaton - Unit 1
Wheaton - Unit 2
Wheaton - Unit 3
Wheaton - Unit 4
Wheaton - Unit 5
Wheaton - Unit 6
White River - Unit 1
White River - Unit 2
Wilmarth - Unit 1
Wilmarth - Unit 2
Wissota - Unit 1
Wissota - Unit 2
Wissota - Unit 3
Wissota - Unit 4
Wissota - Unit 5
Wissota - Unit 6
Adams Wind Generations, LLC
Agassiz Beach LLC
Ashland Wind Farm, LLC
Asian Children Support, Inc.
Autumn Hills LLC
Bangladesh Children Support, Inc
Barron County (Waste-to-Energy Facility)
Bendwind, LLC
Best Power Intl. LLC
Big Blue Wind Farm, LLC
Bisson Windfarm, LLC
Boeve Windfarm, LLC
Brandon Windfarm, LLC
Breezy Bucks-I, LLC
Unit
1
2
NA
1
2
1
2
3
2
3
1
2
3
4
5
6
1
2
1
2
1
2
3
4
5
6
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Owned by
NSP - WI
NSP - WI
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - MN
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - MN
NSP - MN
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
NSP - WI
Alstom Power
Enel North America, Inc
Garwin McNeilus
Garwin McNeilus
Enel North America, Inc
Garwin McNeilus
Barron County, WI
Jeff Bendel
Best Power Intl.
Fagen Inc
Peter Bisson
Gary Boeve
Garwin McNeilus
Exelon
COD 'Date
Control
Controlled by
NSP-WI
NSP-WI
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-MN
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-MN
NSP-MN
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP-WI
NSP
NSP
NSP
NSP
NSP
NSP
Transferred
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
3/9/2011
2/28/2001
5/1/2003
2/14/2003
2/15/2001
2/14/2003
Balancing
Authority
Area
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
8/1/1986
3/1/2006
5/27/2010
12/15/2012
12/28/2003
8/9/2003
8/24/2003
5/11/2006
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
Geographic
Region
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
In-Service
Date
1926
1926
1910
1905
1905
1992
1992
1992
1965
1965
1973
1973
1973
1973
1973
1973
1907
1907
1948
1951
1917
1917
1917
1917
1917
1917
NA
NA
NA
NA
NA
NA
Central
Central
Central
Central
Central
Central
Central
Central
NA
NA
NA
NA
NA
NA
NA
NA
Nameplate and/or
Seasonal Rating
(MW)
0.7
0.5
0.2
0.3
0.3
1.6
1.6
1.6
54.0
54.0
54.0
54.0
53.1
53.1
0.5
0.5
12.5
12.5
6.0
6.0
6.0
6.0
6.0
6.0
19.8
2.0
1.9
1.9
2.0
1.9
1.9
1.3
0.4
36.0
1.9
1.9
1.5
1.3
Exhibit MEA-2
Location
Generation Name
Breezy Bucks-II, LLC
BT, LLC
Buffalo Ridge Wind Farm LLC
Burmese Children Support, Inc.
Unit
NA
NA
NA
NA
Owned by
Exelon
Garwin McNeilus
EDF Renewable Energy
Garwin McNeilus
Eagle Creek Renewable
Energy
Carleton College
So. California Edison
(subsidiary of Edison
International) /Ricky
Carstensen
Juhl Energy Inc
EDF Renewable Energy
Exelon
Byllesby (Neshkoro)
Carleton College
NA
NA
Carstensen Wind, LLC
CG Windfarm, LLC
Chanarambie Power Partners, LLC
Cisco Wind Energy LLC
NA
NA
NA
NA
Dairyland Power Co-op
Danielson Wind Farms, LLC
DeGreeff DP, LLC
DeGreeffpa LLC
Eau Galle Renewable Energy Co. Inc.
Elsinore Wind, LLC
Ewington Energy Systems LLC
Fenton Power Partners I, LLC
Fey Windfarm LLC
FibroMinn LLC
Florence Hills LLC
FPL Mower County LLC
G M, LLC
Gar Mar Wind I LLC
Garmar Foundation I
Garmar Foundation II, LLC
Gary J.T., LLC
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Grant County Wind, LLC
Grant Windfarm, LLC
NA
NA
Dairyland Power Cooperative
Alstom Power
Dean Degreeff
Peter Degreeff
Renewable World Energies
Garwin McNeilus
Exelon
EDF Renewable Energy
Doug Fey
ContourGlobal, LP
Enel North America, Inc
NextEra Energy Resources
Garwin McNeilus
Garwin McNeilus
Garwin McNeilus
Garwin McNeilus
Gary Tholen
GC Wind Holdings/Olympus
Power
Garwin McNeilus
NA
NA
NA
So. California Edison
(subsidiary of Edison
International)/ Douglas Muth
Mitch Groen
Enel North America, Inc
Greenback Energy, LLC
Groen Wind, LLC
Hadley Ridge LLC
COD 'Date
Control
Controlled by
NSP
NSP
NSP
NSP
Transferred
5/11/2006
9/26/2002
12/18/2003
2/14/2003
Balancing
Authority
Area
MISO
MISO
MISO
MISO
NSP
NSP
3/1/1988
9/20/2004
MISO
MISO
Central
Central
NA
NA
2.4
1.7
NSP
NSP
NSP
NSP
1/1/2005
12/28/2003
12/15/2003
5/28/2008
MISO
MISO
MISO
MISO
Central
Central
Central
Central
NA
NA
NA
NA
1.7
1.9
85.5
8.0
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
7/1/1963
3/11/2011
4/5/2006
3/8/2006
8/1/1991
8/7/2003
5/28/2008
11/13/2007
9/4/2003
9/11/2007
1/9/2001
12/3/2006
9/26/2002
8/18/2003
9/26/2002
12/1/2006
8/28/2005
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
1.2
19.8
1.3
1.3
0.3
1.7
20.0
205.5
1.9
55
2.0
98.9
1.8
1.5
1.8
1.9
1.7
NSP
NSP
8/9/2010
5/21/2005
MISO
MISO
Central
Central
NA
NA
20.0
1.9
NSP
NSP
NSP
1/25/2005
4/24/2006
12/28/2000
MISO
MISO
MISO
Central
Central
Central
NA
NA
NA
1.7
1.3
2.0
Geographic
Region
Central
Central
Central
Central
In-Service
Date
NA
NA
NA
NA
Nameplate and/or
Seasonal Rating
(MW)
1.3
1.8
1.5
1.9
Exhibit MEA-2
Location
Generation Name
Hastings
Hennepin Energy Resource Recovery
(HERC)
Henslin Creek Windfarm, LLC
Hillcrest Wind LLC
Hilltop Power LLC
Hope Creek LLC
Indian Children Support, Inc.
Invenergy Cannon Falls, LLC
Jack River LLC
Jeffers Wind 20, LLC
Jenna M.T., LLC
Jessica Mills LLC
JJN Windfarm, LLC
Julia Hills LLC
Kas Brothers Windfarm LLC
K-Brink Wind Farm, LLC
Unit
NA
Owned by
City of Hastings, MN
COD 'Date
Control
Controlled by
NSP
Transferred
10/1/1987
Balancing
Authority
Area
MISO
Geographic
Region
Central
In-Service
Date
NA
Nameplate and/or
Seasonal Rating
(MW)
4.0
NA
NA
NA
NA
NA
NA
Hennepin County, MN
Garwin McNeilus
Ken Verbrugge
Evan Johnson
Enel North America, Inc
Garwin McNeilus
NSP
NSP
NSP
NSP
NSP
NSP
12/31/1989
8/24/2003
4/28/2006
2/20/2009
1/20/2001
2/14/2003
MISO
MISO
MISO
MISO
MISO
MISO
Central
Central
Central
Central
Central
Central
NA
NA
NA
NA
NA
NA
33.7
1.5
1.3
2.0
2.0
1.9
NA
NA
NA
NA
NA
NA
NA
NA
NA
Invenergy Cannon Falls, LLC
Enel North America, Inc
Edison Mission Energy
Gary Tholen
Enel North America, Inc
Jim and Kelly Nichols
Enel North America, Inc
Richard and Roger Kas
Aleanor Kruissllerink
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
4/11/2008
2/18/2001
10/10/2008
8/28/2005
2/23/2001
12/17/2004
2/24/2001
12/10/2001
2/13/2003
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
Central
Central
Central
Central
Central
Central
Central
Central
Central
NA
NA
NA
NA
NA
NA
NA
NA
NA
357.0
2.0
50.0
1.7
2.0
1.5
2.0
1.5
1.9
NSP
NSP
5/18/2009
8/28/2005
MISO
MISO
Central
Central
NA
NA
12.0
1.7
NSP
NSP
NSP
NSP
12/10/1986
5/31/2000
12/14/1998
3/20/2006
MISO
MISO
MISO
MISO
Central
Central
Central
Central
NA
NA
NA
NA
3.1
103.5
104.25
1.3
NSP
1/1/2007
MISO
Central
NA
35.0
NSP
10/1/2007
MISO
Central
NA
262.0
Joint venture b/n Rahr Malting
Company & Shakopee Sioux
Indian Community
Peterson/Tholen
Lac Courte Orielles Band of
Lake Superior Chippewa
Indians
NextEra Energy Resources
AES
Jim Stoks
KODA Energy LLC
Krysta J.T., LLC
NA
NA
Lac Courte Orielles Band of Lake
Superior
Lake Benton Power Partners II, LLC
Lake Benton Power Partners, LLC
Larswind, LLC
NA
NA
NA
NA
Laurentian Energy Authority I, LLC (LEA)
NA
LSP Cottage Grove
NA
Hibbing Public Utilities
Calypso Energy Holdings,
LLC
NA
So. California Edison (affiliate
of Edison International)
/Rebecca Walters
NSP
1/2/2005
MISO
Central
NA
1.7
NA
Manitoba Hydro Elec. Board.
NSP
2/1/1991
MISO
Central
NA
150.0
NA
Manitoba Hydro Elec. Board.
NSP
11/16/1987
MISO
Central
NA
200.0
Lucky Wind, LLC
Manitoba Hydro 150 MW Seasonal
Diversity Agreement
Manitoba Hydro 200 MW Seasonal
Diversity Agreement
Exhibit MEA-2
Location
Generation Name
COD 'Date
Control
Balancing
Authority
Area
Geographic
Region
In-Service
Date
Nameplate and/or
Seasonal Rating
(MW)
Unit
Owned by
Controlled by
Transferred
Manitoba Hydro 500
Mankato Energy Center, LLC
Mark J.P., LLC
McBeth -3, LLC
McBeth-1, LLC
McBeth-2, LLC
McNeilus Windfarm, LLC
Metro Wind LLC
MinnDakota Wind LLC
NA
NA
NA
NA
NA
NA
NA
NA
NA
Manitoba Hydro Elec. Board.
Calpine Corporation
Mark J.P.
Tholen Transmission Inc
Tholen Transmission Inc
Tholen Transmission Inc
Garwin McNeilus
Enel North America, Inc
MinnDakota Wind LLC
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
Central
Central
Central
Central
Central
Central
Central
Central
Central
NA
NA
NA
NA
NA
NA
NA
NA
NA
500.0
375
1.7
1.7
1.7
1.7
1.8
0.7
150.0
Minnkota Power Cooperative
NA
Minnkota Power Cooperative
NSP
8/1/2002
1/1/2006
8/25/2005
9/4/2005
9/4/2005
9/4/2005
9/26/2002
3/1/2001
1/1/2008
8/26/1988
MISO
Central
NA
100.0
Minwind III, LLC
NA
MinWind Energy /M Willers
NSP
2/2/2005
MISO
Central
NA
1.7
Minwind IV, LLC
NA
MinWind Energy /M Willers
NSP
2/2/2005
MISO
Central
NA
1.7
Minwind IX, LLC
NA
MinWind Energy /M Willers
NSP
2/2/2005
MISO
Central
NA
1.7
Minwind V, LLC
NA
MinWind Energy /M Willers
NSP
2/2/2005
MISO
Central
NA
1.7
Minwind VI, LLC
NA
MinWind Energy /M Willers
NSP
2/2/2005
MISO
Central
NA
1.7
Minwind VII, LLC
NA
MinWind Energy /M Willers
NSP
2/2/2005
MISO
Central
NA
1.7
Minwind VIII, LLC
Moraine Wind LLC
Moraine II
NA
NA
NA
MinWind Energy /M Willers
Iberdrola Renewables, Inc.
Iberdrola Renewables, Inc.
NSP
NSP
NSP
2/2/2005
12/22/2003
2/18/2009
MISO
MISO
MISO
Central
Central
Central
NA
NA
NA
1.7
51.0
49.5
Moulton Heights Wind Power Project LLC
Muncie Power Partners LLC
N A E Lakota Ridge, LLC
N A E Shaokatan Hills LLC
NAE Shaokatan, LLC
NA
NA
NA
NA
NA
NSP
NSP
NSP
NSP
NSP
12/18/2003
12/18/2003
5/1/2004
5/1/2004
11/1/2003
MISO
MISO
MISO
MISO
MISO
Central
Central
Central
Central
Central
NA
NA
NA
NA
NA
1.5
1.5
11.3
11.9
1.7
Neshkoro (Neshonoc)
North Community Turbines LLC
North Ridge Wind Farm LLC
North Wind Turbines LLC
NA
NA
NA
NA
EDF Renewable Energy
EDF Renewable Energy
Energy Operations Group
Energy Opperations Group
Wind Energy America
Eagle Creek Renewable
Energy
Edison Mission Energy
EDF Renewable Energy
Edison Mission Energy
NSP
NSP
NSP
NSP
1/1/1987
5/28/2011
12/18/2003
5/28/2011
MISO
MISO
MISO
MISO
Central
Central
Central
Central
NA
NA
NA
NA
0.45
15.0
1.5
15.0
Exhibit MEA-2
Location
Generation Name
Unit
Northern Lights Wind, LLC
Olsen Windfarm LLC
NA
NA
Pine Bend
NA
Rapidan Hydro
Roadrunner-I, LLC
NA
NA
Rock Ridge Power Partners, LLC
Ruthton Ridge LLC
NA
NA
Ridgewind Power Partners, LLC
NA
SAF Hydro
Salty Dog-I, LLC
Salty Dog-II, LLC
Salvadoran Children Support, Inc.
SG, LLC (aka "JCKD")
Shane's Wind Machine, LLC
Sierra Wind LLC
Soliloque Ridge LLC
NA
NA
NA
NA
NA
NA
NA
South Ridge Power Partners, LLC
Spartan Hills LLC
St. Cloud Hydro
St. Olaf College
NA
NA
NA
NA
St. Paul Cogeneration
NA
Stahl Wind Energy, LLC
Sun River LLC
TAIR Windfarm, LLC
TG Windfarm, LLC
NA
NA
NA
NA
Owned by
So. California Edison
(subsidiary of Edison
International)/Brad J. Messerli
Mark Olsen
Gas Recovery Systems
(GRS) /Fortistar Methane
Group
Eagle Creek Renewable
Energy /North American
Hydro
Exelon
Project Resources
Corporation /Rock Ridge
Power Partners
Enel North America, Inc
Project Resources
Corporation
Brookfield Renewable Power
Inc.
Exelon
Exelon
Garwin McNeilus
Garwin McNeilus
Exelon
Gary Stoks
Enel North America, Inc
Project Resources
Corporation/South Ridge
Power Partners
Enel North America, Inc
City of St. Cloud, MN
St. Olaf College
Ever-Green Energy and DTE
St. Paul
So. California Edison
(subsidiary of Edison
International)/Jacob Stahl
Enel North America, Inc
Roger Talsma
Juhl Energy Inc.
Controlled by
COD 'Date
Control
Transferred
Balancing
Authority
Area
Geographic
Region
In-Service
Date
NSP
NSP
1/25/2005
12/15/2001
MISO
MISO
Central
Central
NA
NA
1.7
1.5
NSP
3/31/1996
MISO
Central
NA
12.0
NSP
NSP
12/1/1984
5/11/2006
MISO
MISO
Central
Central
NA
NA
5.0
1.3
NSP
NSP
4/12/2006
1/23/2001
MISO
MISO
Central
Central
NA
NA
1.8
2.0
NSP
1/13/2011
MISO
Central
NA
25.3
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
12/19/2011
5/11/2006
5/11/2006
2/14/2003
9/26/2002
8/11/2006
5/1/2006
1/19/2001
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
Central
Central
Central
Central
Central
Central
Central
Central
NA
NA
NA
NA
NA
NA
NA
NA
9.2
1.3
1.3
1.9
1.8
2.0
1.3
2.0
NSP
NSP
NSP
NSP
4/12/2006
1/13/2001
6/1/1998
10/6/2008
MISO
MISO
MISO
MISO
Central
Central
Central
Central
NA
NA
NA
NA
1.8
2.0
8.8
1.7
NSP
3/25/2003
MISO
Central
NA
25.0
NSP
NSP
NSP
NSP
1/2/2005
2/24/2001
4/23/2006
12/28/2003
MISO
MISO
MISO
MISO
Central
Central
Central
Central
NA
NA
NA
NA
1.7
2.0
1.3
1.9
Nameplate and/or
Seasonal Rating
(MW)
Exhibit MEA-2
Location
Generation Name
Theresa M.T., LLC
Tofteland Windfarm, LLC
Triton Windfarm, LLC
Tsar Nicolas LLC
Twin Lake Hills LLC
Valley View Transmission, LLC
Vandy South Project LLC
Velva Windfarm, LLC
Viking Wind Farm LLC
Vindy Power Partners LLC
Wally's Wind Farm, LLC
Wasioja Windfarm LLC
Westridge Windfarm, LLC
Willhelm Wind, LLC
Wilson-West Windfarm LLC
Unit
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Wind Power Partners 1993, LP
Windcurrent Farms, LLC
NA
NA
Windvest Power Partners, LLC
Windy Dog-I, LLC
Winona County Wind, LLC
Winter Spawn LLC
NA
NA
NA
WM Renewable Energy, LLC (aka
Minnesota Methane, LLC)
Woodstock Municipal Wind LLC
Woodstock Wind Farm, LLC
Zumbro Windfarm LLC
NA
NA
NA
NA
WAPA (Lower Sioux)
Flambeau Hydro
NA
NA
Owned by
Theresa Tholen
Edison Mission
Garwin McNeilus
Enel North America, Inc
Enel North America, Inc
Juhl Energy Inc
EDF Renewable Energy
Acciona Wind Energy USA
EDF Renewable Energy
EDF Renewable Energy
Exelon
Garwin McNeilus
Juhl Energy Inc
Garwin McNeilus
EDF Renewable Energy
Wind Power Partners 1993,
LP
Windcurrent Farms, LLC
Windvest Power Partners,
LLC
Windy Dog-I, LLC
Winona County
Enel North America, Inc
WM Renewable Energy, LLC,
a Waste Management, Inc. (a
subsidiary of)
City of Woodstock, MN
Juhl Energy Inc.
Garwin McNeilus
Western Area Power
Administration
Dairyland Power
COD 'Date
Control
Controlled by
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
Transferred
8/28/2005
12/28/2003
5/12/2004
2/17/2001
1/4/2001
11/30/2011
12/18/2003
1/19/2006
12/18/2003
12/18/2003
5/11/2006
5/12/2004
12/28/2003
8/15/2003
12/18/2003
Balancing
Authority
Area
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
MISO
NSP
NSP
5/3/1994
5/31/2003
MISO
MISO
Central
Central
NA
NA
25.0
1.9
NSP
NSP
NSP
NSP
4/12/2006
5/11/2006
10/27/2011
1/25/2001
MISO
MISO
MISO
MISO
Central
Central
Central
Central
NA
NA
NA
NA
1.8
1.3
1.5
2.0
NSP
NSP
NSP
NSP
5/1/1994
6/24/2010
5/1/2004
5/21/2003
MISO
MISO
MISO
MISO
Central
Central
Central
Central
NA
NA
NA
NA
4.7
0.8
10.2
1.9
NSP
NSP
4/1/2001
2/1/2002
MISO
MISO
Central
Central
NA
NA
2.0
2.0
Geographic
Region
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
In-Service
Date
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Nameplate and/or
Seasonal Rating
(MW)
1.7
1.9
1.5
2.0
2.0
10.0
1.5
11.9
1.5
1.5
1.3
1.5
1.9
1.5
1.5
ATTACHMENT 2
Protective Order
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Northern States Power Company,
A Minnesota Corporation
Border Winds Energy, LLC
Pleasant Valley Wind, LLC
)
)
)
)
)
)
Docket No. EC14-_______-000
PROTECTIVE ORDER
(Issued )
1.
This Protective Order shall govern the use of all Protected Materials produced
by, or on behalf of, any Participant. Notwithstanding any order terminating this proceeding,
this Protective Order shall remain in effect until specifically modified or terminated by the
Presiding Administrative Law Judge (Presiding Judge) (which includes the Chief
Administrative Law Judge) or the Federal Energy Regulatory Commission (Commission).
2.
This Protective Order applies to the following two categories of materials: (A)
A Participant may designate as protected those materials which customarily are treated by that
Participant as sensitive or proprietary, which are not available to the public, and which, if
disclosed freely, would subject that Participant or its customers to risk of competitive
disadvantage or other business injury; and (B) A Participant shall designate as protected those
materials which contain critical energy infrastructure information, as defined in 18 CFR §
388.113(c)(1) ("Critical Energy Infrastructure Information").
3.
Definitions -- For purposes of this Order:
(a)
The term "Participant" shall mean a Participant as defined in 18 CFR
§ 385.102(b).
1
(b)
(1)
The term "Protected Materials" means (A) materials (including
depositions) provided by a Participant in response to discovery requests and designated by such
Participant as protected; (B) any information contained in or obtained from such designated
materials; (C) any other materials which are made subject to this Protective Order by the
Presiding Judge, by the Commission, by any court or other body having appropriate authority, or
by agreement of the Participants; (D) notes of Protected Materials; and (E) copies of Protected
Materials. The Participant producing the Protected Materials shall physically mark them on
each page as "PROTECTED MATERIALS" or with words of similar import as long as the term
"Protected Materials" is included in that designation to indicate that they are Protected Materials.
If the Protected Materials contain Critical Energy Infrastructure Information, the Participant
producing such information shall additionally mark on each page containing such information
the words "Contains Critical Energy Infrastructure Information
Do Not Release".
(2) The term "Notes of Protected Materials" means memoranda,
handwritten notes, or any other form of information (including electronic form) which copies
or discloses materials described in Paragraph 3(b)(1). Notes of Protected Materials are
subject to the same restrictions provided in this order for Protected Materials except as
specifically provided in this order.
(3) Protected Materials shall not include (A) any information or document
that has been filed with and accepted into the public files of the Commission, or contained in the
public files of any other federal or state agency, or any federal or state court, unless the
information or document has been determined to be protected by such agency or court, or (B)
information that is public knowledge, or which becomes public knowledge, other than through
2
disclosure in violation of this Protective Order. Protected Materials do include any information
or document contained in the files of the Commission that has been designated as Critical
Energy Infrastructure Information.
(c)
The term "Non-Disclosure Certificate" shall mean the certificate annexed
hereto by which Participants who have been granted access to Protected Materials shall certify
their understanding that such access to Protected Materials is provided pursuant to the terms and
restrictions of this Protective Order, and that such Participants have read the Protective Order
and agree to be bound by it. All Non-Disclosure Certificates shall be served on all parties on the
official service list maintained by the Secretary in this proceeding.
(d)
The term "Reviewing Representative" shall mean a person who has signed
a Non-Disclosure Certificate and who is:
(1)
Commission Trial Staff designated as such in this proceeding;
(2)
an attorney who has made an appearance in this proceeding for a
Participant;
(3) attorneys, paralegals, and other employees associated for purposes of
this case with an attorney described in Subparagraph (2);
(4) an expert or an employee of an expert retained by a Participant for
the purpose of advising, preparing for or testifying in this proceeding;
(5)
a person designated as a Reviewing Representative by order of the
Presiding Judge or the Commission; or
(6)
employees or other representatives of Participants appearing in
this proceeding with significant responsibility for this docket.
4.
Protected Materials shall be made available under the terms of this Protective
3
Order only to Participants and only through their Reviewing Representatives as provided in
Paragraphs 7-9.
5.
Protected Materials shall remain available to Participants until the later of the
date that an order terminating this proceeding becomes no longer subject to judicial review, or
the date that any other Commission proceeding relating to the Protected Material is concluded
and no longer subject to judicial review. If requested to do so in writing after that date, the
Participants shall, within fifteen days of such request, return the Protected Materials (excluding
Notes of Protected Materials) to the Participant that produced them, or shall destroy the
materials, except that copies of filings, official transcripts and exhibits in this proceeding that
contain Protected Materials, and Notes of Protected Material may be retained, if they are
maintained in accordance with Paragraph 6, below. Within such time period each Participant, if
requested to do so, shall also submit to the producing Participant an affidavit stating that, to the
best of its knowledge, all Protected Materials and all Notes of Protected Materials have been
returned or have been destroyed or will be maintained in accordance with Paragraph 6. To the
extent Protected Materials are not returned or destroyed, they shall remain subject to the
Protective Order.
6.
All Protected Materials shall be maintained by the Participant in a secure place.
Access to those materials shall be limited to those Reviewing Representatives specifically
authorized pursuant to Paragraphs 8-9. The Secretary shall place any Protected Materials filed
with the Commission in a non-public file. By placing such documents in a non- public file, the
Commission is not making a determination of any claim of privilege. The Commission retains
the right to make determinations regarding any claim of privilege and the discretion to release
information necessary to carry out its jurisdictional responsibilities. For documents submitted to
4
Commission Trial Staff ("Staff"), Staff shall follow the notification procedures of 18 CFR §
388.112 before making public any Protected Materials.
7.
Protected Materials shall be treated as confidential by each Participant and by the
Reviewing Representative in accordance with the certificate executed pursuant to Paragraph 9.
Protected Materials shall not be used except as necessary for the conduct of this proceeding, nor
shall they be disclosed in any manner to any person except a Reviewing Representative who is
engaged in the conduct of this proceeding and who needs to know the information in order to
carry out that person's responsibilities in this proceeding. Reviewing Representatives may
make copies of Protected Materials, but such copies become Protected Materials. Reviewing
Representatives may make notes of Protected Materials, which shall be treated as Notes of
Protected Materials if they disclose the contents of Protected Materials.
8.
(a)
If a Reviewing Representative's scope of employment includes the
marketing of energy, the direct supervision of any employee or employees whose duties include
the marketing of energy, the provision of consulting services to any person whose duties
include the marketing of energy, or the direct supervision of any employee or employees whose
duties include the marketing of energy, such Reviewing Representative may not use
information contained in any Protected Materials obtained through this proceeding to give any
Participant or any competitor of any Participant a commercial advantage.
(b)
In the event that a Participant wishes to designate as a Reviewing
Representative a person not described in Paragraph 3 (d) above, the Participant shall seek
agreement from the Participant providing the Protected Materials. If an agreement is reached
that person shall be a Reviewing Representative pursuant to Paragraphs 3(d) above with respect
to those materials.
If no agreement is reached, the Participant shall submit the disputed
5
designation to the Presiding Judge for resolution.
9.
(a)
A Reviewing Representative shall not be permitted to inspect, participate
in discussions regarding, or otherwise be permitted access to Protected Materials pursuant to this
Protective Order unless that Reviewing Representative has first executed a Non- Disclosure
Certificate; provided, that if an attorney qualified as a Reviewing Representative has executed
such a certificate, the paralegals, secretarial and clerical personnel under the attorney s
instruction, supervision or control need not do so. A copy of each Non-Disclosure Certificate
shall be provided to counsel for the Participant asserting confidentiality prior to disclosure of
any Protected Material to that Reviewing Representative.
(b)
Attorneys qualified as Reviewing Representatives are responsible for
ensuring that persons under their supervision or control comply with this order.
10.
Any Reviewing Representative may disclose Protected Materials to any other
Reviewing Representative as long as the disclosing Reviewing Representative and the receiving
Reviewing Representative both have executed a Non-Disclosure Certificate. In the event that
any Reviewing Representative to whom the Protected Materials are disclosed ceases to be
engaged in these proceedings, or is employed or retained for a position whose occupant is not
qualified to be a Reviewing Representative under Paragraph 3(d), access to Protected Materials
by that person shall be terminated. Even if no longer engaged in this proceeding, every person
who has executed a Non-Disclosure Certificate shall continue to be bound by the provisions of
this Protective Order and the certification.
11.
Subject to Paragraph 18, the Presiding Administrative Law Judge shall resolve
any disputes arising under this Protective Order. Prior to presenting any dispute under this
Protective Order to the Presiding Administrative Law Judge, the parties to the dispute shall use
6
their best efforts to resolve it. Any participant that contests the designation of materials as
protected shall notify the party that provided the protected materials by specifying in writing the
materials the designation of which is contested. This Protective Order shall automatically cease
to apply to such materials five (5) business days after the notification is made unless the
designator, within said 5-day period, files a motion with the Presiding Administrative Law
Judge, with supporting affidavits, demonstrating that the materials should continue to be
protected. In any challenge to the designation of materials as protected, the burden of proof
shall be on the participant seeking protection. If the Presiding Administrative Law Judge finds
that the materials at issue are not entitled to protection, the procedures of Paragraph 18 shall
apply. The procedures described above shall not apply to protected materials designated by a
Participant as Critical Energy Infrastructure Information. Materials so designated shall remain
protected and subject to the provisions of this Protective Order, unless a Participant requests and
obtains a determination from the Commission's Critical Energy Infrastructure Information
Coordinator that such materials need not remain protected.
12.
All copies of all documents reflecting Protected Materials, including the portion
of the hearing testimony, exhibits, transcripts, briefs and other documents which refer to
Protected Materials, shall be filed and served in sealed envelopes or other appropriate containers
endorsed to the effect that they are sealed pursuant to this Protective Order. Such documents
shall be marked "PROTECTED MATERIALS" and shall be filed under seal and served under
seal upon the Presiding Judge and all Reviewing Representatives who are on the service list.
Such documents containing Critical Energy Infrastructure Information shall be additionally
marked "Contains Critical Energy Infrastructure Information - Do Not Release". For anything
filed under seal, redacted versions or, where an entire document is protected, a letter indicating
7
such, will also be filed with the Commission and served on all parties on the service list and the
Presiding Judge. Counsel for the producing Participant shall provide to all Participants who
request the same, a list of Reviewing Representatives who are entitled to receive such material.
Counsel shall take all reasonable precautions necessary to assure that Protected Materials are not
distributed to unauthorized persons.
13.
If any Participant desires to include, utilize or refer to any Protected
Materials or information derived therefrom in testimony or exhibits during the hearing in
these proceedings in such a manner that might require disclosure of such material to
persons other than reviewing representatives, such participant shall first notify both counsel
for the disclosing participant and the Presiding Judge of such desire, identifying with
particularity each of the Protected Materials. Thereafter, use of such Protected Material will
be governed by procedures determined by the Presiding Judge.
14.
Nothing in this Protective Order shall be construed as precluding any Participant
from objecting to the use of Protected Materials on any legal grounds.
15.
Nothing in this Protective Order shall preclude any Participant from requesting
the Presiding Judge, the Commission, or any other body having appropriate authority, to find
that this Protective Order should not apply to all or any materials previously designated as
Protected Materials pursuant to this Protective Order. The Presiding Judge may alter or amend
this Protective Order as circumstances warrant at any time during the course of this proceeding.
16.
Each party governed by this Protective Order has the right to seek changes in it
as appropriate from the Presiding Judge or the Commission.
17.
All Protected Materials filed with the Commission, the Presiding Judge, or any
other judicial or administrative body, in support of, or as a part of, a motion, other pleading,
8
brief, or other document, shall be filed and served in sealed envelopes or other appropriate
containers bearing prominent markings indicating that the contents include Protected Materials
subject to this Protective Order. Such documents containing Critical Energy Infrastructure
Information shall be additionally marked “Contains Critical Energy Infrastructure Information
– Do Not Release.”
18.
If the Presiding Judge finds at any time in the course of this proceeding that all or
part of the Protected Materials need not be protected, those materials shall, nevertheless, be
subject to the protection afforded by this Protective Order for three (3) business days from the
date of issuance of the Presiding Judge's determination, and if the Participant seeking protection
files an interlocutory appeal or requests that the issue be certified to the Commission, for an
additional seven (7) business days. None of the Participants waives its rights to seek additional
administrative or judicial remedies after the Presiding Judge's decision respecting Protected
Materials or Reviewing Representatives, or the Commission's denial of any appeal thereof. The
provisions of 18 CFR §§ 388.112 and 388.113 shall apply to any requests under the Freedom of
Information Act. (5 U.S.C. § 552) for Protected Materials in the files of the Commission.
19.
Nothing in this Protective Order shall be deemed to preclude any Participant
from independently seeking through discovery in any other administrative or judicial
proceeding information or materials produced in this proceeding under this Protective
Order.
20.
None of the Participants waives the right to pursue any other legal or
equitable remedies that may be available in the event of actual or anticipated disclosure of
Protected Materials.
21. The contents of Protected Materials or any other form of information that copies
9
or discloses Protected Materials shall not be disclosed to anyone other than in accordance with
this Protective Order and shall be used only in connection with this (these) proceeding(s). Any
violation of this Protective Order and of any Non- Disclosure Certificate executed hereunder
shall constitute a violation of an order of the Commission.
10
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Northern States Power Company,
A Minnesota Corporation
Border Winds Energy, LLC
Pleasant Valley Wind, LLC
)
)
)
)
)
)
Docket No. EC14-_______-000
NON-DISCLOSURE CERTIFICATE
I hereby certify my understanding that access to Protected Materials is provided to me pursuant
to the terms and restrictions of the Protective Order in this proceeding, that I have been given a
copy of and have read the Protective Order, and that I agree to be bound by it. I understand that
the contents of the Protected Materials, any notes or other memoranda, or any other form of
information that copies or discloses Protected Materials shall not be disclosed to anyone other
than in accordance with that Protective Order. I acknowledge that a violation of this certificate
constitutes a violation of an order of the Federal Energy Regulatory Commission.
By:
Printed Name:
Title:
Representing:
Date:
11
PUBLIC – EXHIBIT I
Redacted Copies of Contracts Related to the Proposed Transaction
CONFIDENTIAL AND PRIVILEGED INFORMATION HAS BEEN
REMOVED FOR PRIVILEGED TREATMENT
PUBLIC DOCUMENT - TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Attachment C
Page 1 of 105
PURCHASE AND SALE AGREEMENT
(PLEASANT VALLEY)
Dated as of July 12, 2013
by and between
NORTHERN STATES POWER COMPANY
as Buyer
and
RES AMERICA DEVELOPMENTS INC.
as Seller
PUBLIC DOCUMENT - TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Attachment C
Page 2 of 105
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS AND RULES OF INTERPRETATION ..........................................1
1.1.
1.2.
Defined Terms ...............................................................................................................1
Rules of Interpretation .................................................................................................32
ARTICLE 2. PURCHASE AND SALE OF MEMBERSHIP INTERESTS.................................33
2.1.
2.2.
2.3.
2.4.
2.5.
2.6.
Purchase and Sale of Membership Interests ................................................................33
Purchase Price; Assumption of Liabilities...................................................................33
Mechanics of Closing ..................................................................................................38
Closing Costs ...............................................................................................................38
Post-Closing Statement................................................................................................39
O&M Building Option.................................................................................................41
ARTICLE 3. EFFECTIVENESS; BUYER’S CONDITIONS PRECEDENT TO
EFFECTIVENESS; BUYER’S CONDITIONS PRECEDENT TO THE CLOSING ..................41
3.1.
3.2.
3.3.
Effectiveness ................................................................................................................41
Buyer’s Conditions Precedent to Effectiveness ...........................................................42
Buyer’s Conditions Precedent to Closing ....................................................................48
ARTICLE 4. SELLER’S CONDITIONS PRECEDENT TO EFFECTIVENESS; SELLER’S
CONDITIONS PRECEDENT TO THE CLOSING......................................................................52
4.1.
4.2.
Seller’s Conditions Precedent to Effectiveness ...........................................................52
Seller’s Conditions Precedent to Closing ....................................................................54
ARTICLE 5. PRE-CLOSING COVENANTS ..............................................................................55
5.1.
5.2.
5.3.
5.4.
5.5.
5.6.
5.7.
5.8.
5.9.
5.10.
Seller Pre-Closing Actions...........................................................................................55
Notification of Status of Pre-Closing Actions .............................................................55
Other Seller Actions.....................................................................................................56
Notification of Completion or Failure of Conditions ..................................................56
Inspection Rights; O&M Building...............................................................................56
Cooperation Prior to Effective Date ............................................................................57
Additional Reports .......................................................................................................58
Registrations and Qualifications ..................................................................................58
Notification of Force Majeure Event; Efforts to Mitigate ...........................................59
[TRADE SECRET DATA BEGINS
TRADE SECRET DATA
ENDS]..........................................................................................................................59
5.11. Updated Title and Survey ............................................................................................60
5.12. Bird and Bat Conservation Strategy ............................................................................60
5.13. Regulatory Approval....................................................................................................61
5.14. Other Filings ................................................................................................................62
i
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Attachment C
Page 3 of 105
5.15.
Turbine Supplier Change .............................................................................................63
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF SELLER..................................63
6.1.
6.2.
6.3.
6.4.
6.5.
6.6.
6.7.
6.8.
6.9.
6.10.
6.11.
6.12.
6.13.
6.14.
6.15.
6.16.
6.17.
6.18.
6.19.
6.20.
6.21.
6.22.
6.23.
6.24.
6.25.
6.26.
Corporate Existence and Powers .................................................................................63
Company Existence and Powers..................................................................................63
Authority......................................................................................................................63
Consents and Approvals ..............................................................................................64
No Conflicts .................................................................................................................64
Legal Proceedings........................................................................................................64
Compliance with Law ..................................................................................................65
Environmental Matters.................................................................................................65
Right and Title to Purchased Interests .........................................................................66
Right and Title to Company Assets .............................................................................66
Land Contracts; Real Property.....................................................................................66
Contracts ......................................................................................................................67
Permits .........................................................................................................................68
Finders..........................................................................................................................69
Intellectual Property.....................................................................................................69
No Other Agreements to Sell the Company Assets .....................................................69
Wind Data ....................................................................................................................70
Insurance ......................................................................................................................70
Reports .........................................................................................................................70
Tax Matters ..................................................................................................................70
Completed Project........................................................................................................71
Liabilities .....................................................................................................................71
Consents.......................................................................................................................71
Sufficient Funds ...........................................................................................................71
FAA Determinations of No Hazard to Air Navigation................................................71
Seller Project Warranty................................................................................................72
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF BUYER ...................................72
7.1.
7.2.
7.3.
7.4.
7.5.
7.6.
7.7.
7.8.
Corporate Existence and Powers .................................................................................72
Authority......................................................................................................................72
No Conflicts .................................................................................................................73
Consents and Approvals ..............................................................................................73
Legal Proceedings........................................................................................................73
Finders..........................................................................................................................73
Sufficient Funds ...........................................................................................................73
Compliance With Laws................................................................................................74
ARTICLE 8. CERTAIN COVENANTS .......................................................................................74
8.1.
8.2.
8.3.
No Breach of Representations and Warranties by Seller.............................................74
No Breach of Representations and Warranties by Buyer ............................................74
Consents and Reasonable Efforts.................................................................................74
ii
PUBLIC DOCUMENT - TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Attachment C
Page 4 of 105
8.4.
8.5.
8.6.
8.7.
8.8.
8.9.
8.10.
8.11.
8.12.
Buyer Confidential Information...................................................................................74
Seller Confidential Information ...................................................................................76
Tax Matters ..................................................................................................................77
Maintain a Qualified Facility.......................................................................................79
Bird and Bat Conservation Strategy ............................................................................80
Non-Disparagement .....................................................................................................80
Confidentiality Regarding This Agreement.................................................................80
No Shop .......................................................................................................................81
Alternate WTG Locations............................................................................................81
ARTICLE 9. ACTIONS BY SELLER AND BUYER AFTER THE CLOSING DATE .............82
9.1.
9.2.
9.3.
9.4.
9.5.
Records ........................................................................................................................82
Survival ........................................................................................................................82
Indemnifications ..........................................................................................................82
Limitation of Liability..................................................................................................85
Further Assurances.......................................................................................................86
ARTICLE 10. DELAY DAMAGES AND SECURITY ...............................................................87
10.1. Delay Damages ............................................................................................................87
10.2. Payment of Delay Damages.........................................................................................88
10.3. Nature of Liquidated Damages ....................................................................................88
10.4. Security for Liquidated Damages; Refund of Deposit.................................................88
ARTICLE 11. EXTENSION AND TERMINATION...................................................................88
11.1. Termination; Extension................................................................................................88
11.2. Buyer’s Option to Purchase Project in Certain Circumstances After Guaranteed
Completion Date ..........................................................................................................92
ARTICLE 12. MISCELLANEOUS ..............................................................................................93
12.1.
12.2.
12.3.
12.4.
12.5.
12.6.
12.7.
12.8.
12.9.
12.10.
12.11.
12.12.
12.13.
12.14.
12.15.
Payment Instructions....................................................................................................93
Assignment ..................................................................................................................93
Notices .........................................................................................................................93
Choice of Law; Consent to Jurisdiction; Service of Process .......................................94
Waiver Of Jury Trial....................................................................................................95
Attorneys’ Fees and Litigation Expenses ....................................................................95
Entire Agreement; Amendments and Waivers ............................................................95
Multiple Counterparts ..................................................................................................96
Expenses ......................................................................................................................96
Invalidity......................................................................................................................96
Titles ............................................................................................................................96
Burden and Benefit ......................................................................................................96
Cumulative Remedies ..................................................................................................96
No Partnership or Joint Venture ..................................................................................96
No Merger....................................................................................................................96
iii
PUBLIC DOCUMENT - TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Attachment C
Page 5 of 105
12.16. Non-Interference ..........................................................................................................97
iv
PUBLIC DOCUMENT - TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Attachment C
Page 6 of 105
LIST OF SCHEDULES
Schedule 1.1(a)
Schedule 1.1(b)
Schedule 1.1(c)
Schedule 1.1(d)
Schedule 1.1(e)
Schedule 1.1(f)
Schedule 2.5.5
Schedule 3.2.3(b)
Schedule 6.4
Schedule 6.6
Schedule 6.7
Schedule 6.8
Schedule 6.11
Schedule 6.12
Schedule 6.13
Schedule 6.15
Schedule 6.17
Schedule 6.18
Schedule 6.19
Schedule 6.22
Schedule 7.4
Schedule 7.5
Schedule 8.12
Buyer’s Knowledge
NSP Drawing Standards
Electrical Works
O&M Facility Real Property
Seller’s Knowledge
Substation Real Property
Allocation Categories
Title Policy Endorsements
Seller Consents and Approvals
Seller Litigation
Compliance with Law
Environmental Matters
Land Contracts
Contracts
Permits
Third-Party Intellectual Property Rights
Wind Data
Insurance
Reports
Liabilities
Buyer Consents and Approvals
Buyer Litigation
Alternate WTG Locations
LIST OF EXHIBITS
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J-1
Exhibit J-2
Exhibit K
Site Description
Form of Guaranty
Form of Membership Assignment Agreement
Form of Easement Amendment
Form of Non-Disturbance Agreement
Site Plan
Form of Effective Date Certificate
Project Quality Assurance Plan
Technical Specifications
Form of Initial Under Construction Certificate
Form of Final Under Construction Certificate
Under Construction Plan
v
PUBLIC DOCUMENT - TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Attachment C
Page 7 of 105
PURCHASE AND SALE AGREEMENT
(PLEASANT VALLEY)
THIS PURCHASE AND SALE AGREEMENT (PLEASANT VALLEY) (this
“Agreement”) dated as of July 12, 2013 (the “Signing Date”), is made and entered into by and
between Northern States Power Company, a Minnesota corporation (“Buyer”), and RES
America Developments Inc., a Delaware corporation (“Seller”).
RECITALS
Seller intends to form a Delaware limited liability company, to be wholly owned by
Seller (the “Company”), which shall own all of the rights and assets with respect to the Project
on or before the Effective Date.
Buyer desires to purchase (or cause an Affiliate of Buyer to purchase) and Seller desires
to sell one hundred percent (100%) of the membership interests of the Company pursuant to the
terms and subject to the conditions of this Agreement.
This Agreement is intended to become effective on the Effective Date (as defined herein),
except as expressly set forth in Section 3.1.
AGREEMENT
NOW THEREFORE, in consideration of the sums to be paid to Seller by Buyer
hereunder and the covenants and agreements set forth herein, the Parties agree as follows:
ARTICLE 1.
DEFINITIONS AND RULES OF INTERPRETATION
1.1.
Defined Terms. For purposes of this Agreement, the following capitalized terms
shall have the following meanings:
“Acquisition Proposal” is defined in Section 8.11(a)(i).
“Adjusted Purchase Price” [TRADE SECRET DATA BEGINS
TRADE
SECRET DATA ENDS]
“Adverse Determination Tax Attorney” means a regionally-recognized law firm
that possesses substantial expertise with tax controversy matters, is engaged by Seller (at
Seller’s sole expense) and is selected by Seller, subject to Buyer’s approval not to be
unreasonably withheld, conditioned or delayed.
PUBLIC DOCUMENT - TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Attachment C
Page 8 of 105
“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is under
common control with that Person. The term “control” (including, with correlative
meaning, the terms “controlled by” and “under common control with”), as used with
respect to any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether through
the ownership of voting securities or partnership interests, by contract or otherwise.
“Agreement” means this Purchase and Sale Agreement (Pleasant Valley),
including all Exhibits and Schedules hereto (as the Exhibits and Schedules hereto may be
updated in accordance with Section 5.6 or delivered in accordance with Section 3.1.2), as
the same may be modified, amended or supplemented from time to time in accordance
with Section 12.7.
“Alternate WTG Locations” is defined in Section 8.12.
“Ancillary Agreements” means the Membership Interest Assignment, and any
other agreement or instrument executed and delivered by the Parties or by either Party or
any Affiliate of such Party to the other Party pursuant to this Agreement.
“Applicable Standards” means Prudent Industry Practices and Prudent
Engineering Practices; provided, however, that if any portion of such standards conflicts
with or is less stringent than any Laws applicable to the Parties, the Company or the
Project, such conflicting or less stringent portions of such standards shall be deemed
replaced by the conflicting or more stringent requirements of such Laws.
“As Built Drawings” means a complete set of as built drawings prepared by
Contractor in accordance with the requirements set forth in the EPC Agreement and the
NSP Drawing Standards, which accurately and completely represent the physical
placement of all WTGs and Infrastructure Facilities as assembled, erected and installed.
“Assumed Liabilities” means:
(a)
the Permitted Encumbrances;
(b)
those obligations of the Company accruing or arising, or covenants
or agreements of the Company to be performed (other than indemnification
obligations for matters accruing or arising prior to the Closing Date), from and
after the Closing Date under the Land Contracts, Permits, Permit Applications,
Interconnection Agreement or any related agreements including Interconnection
Study Agreements (as defined in the Interconnection Agreement) (except as set
forth in clauses (d) and (vii) below), Interconnection Rights, the EPC Agreement
(except as set forth in clause (vi) below) and other Contracts to which the
Company is a party at the time of the Closing (including any liability for Taxes
for such Land Contracts, Permits, Permit Applications, Interconnection
Agreement (except as set forth in clauses (d) and (vii) below), Interconnection
Rights, the EPC Agreement (except as set forth in clause (vi) below) and other
Contracts;
2
PUBLIC DOCUMENT - TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Attachment C
Page 9 of 105
(c)
other than as provided for in this Agreement, any Liability arising
from and after the Closing Date with respect to the ownership or operation of the
Project; and
(d)
[TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
provided that, without in any way broadening the scope of Assumed Liabilities as
described in the foregoing provisions of this definition, Assumed Liabilities shall not
include:
(i)
any Liability of the Company, Seller or its Affiliates for
Taxes accruing or arising before the Closing Date with respect to
Company Assets;
(ii)
any Liability of the Company, Seller or its Affiliates for
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby;
(iii) any Liability under the Land Contracts, Permits, Permit
Applications, Interconnection Rights or Contracts to which the Company
is a party at Closing to the extent such Liability, but for a breach or default
by Seller or any of its Affiliates or a waiver or extension given to or by
Seller or any of its Affiliates, would have been paid, performed or
otherwise discharged on or prior to the Closing Date or to the extent such
Liability arises out of any such breach, default, waiver or extension given
to or by Seller or any of its Affiliates;
(iv)
any obligations or Liabilities prorated to Seller under
Section 2.4.2;
(v)
any Liability arising in respect of any portion of the
Company Assets with respect to which Project Substantial Completion has
not occurred unless and until Project Substantial Completion occurs with
respect thereto;
(vi)
any Liability of the Company under the EPC Agreement or
the Turbine Supply Agreement (including any payment obligations
thereunder whether such payments are due prior to or after the Closing)
other than non-monetary covenants and agreements of the Company
thereunder to be performed after the Closing that are incidental to the
ownership of the Project and approved by Buyer prior to the Effective
Date in connection with its review and approval of the EPC Agreement
and Turbine Supply Agreement; and
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(vii)
[TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
“Authority” means any federal, state, local or other governmental, judicial, public
or statutory instrumentality, tribunal, agency, authority, body or entity, in each case,
domestic or foreign, or any political subdivision thereof having legal jurisdiction over the
matter or Person in question.
“Bird and Bat Assessments” means the bird and bat surveys and nest surveys
conducted with respect to the Project prior to the Signing Date.
“Bird and Bat Conservation Strategy” means the strategy for bird and bat
protection with respect to the development, construction, commissioning and operation of
the Project developed by Seller, in consultation with the FWS and other applicable
Authorities.
“Balance of Plant Warranty” means the warranty of the Contractor for a period
of two (2) years from Closing that (a) all parts, materials, equipment and the like
incorporated into the Project (other than the WTGs) shall be free of defects in material,
workmanship and title, and shall be new, unused and undamaged and of suitable grade
that is consistent with Prudent Industry Practices when installed, (b) the Construction
Services (other than the Construction Services performed by the Turbine Supplier
pursuant to the Turbine Supply Agreement) shall be performed with due care and skill
and in a competent, diligent manner in accordance with Law and Applicable Standards
and (c) the completed Work shall perform its intended functions as a complete, integrated
wind energy generation operating system as explicitly described or implied in the EPC
Agreement, and shall be fully in accordance with the Technical Specifications. The
Balance of Plant Warranty shall include a serial defect provision mutually acceptable to
Buyer and Seller applicable to the components acquired for the Project through the EPC
Agreement, which provision shall include without limitation terms providing that failure
of greater than 15% of any one component part during the applicable period shall
constitute a serial defect and all such component parts used in the Project shall be
replaced under warranty, at no cost to the Company or Buyer; provided, however, that no
defect affecting a WTG or its component parts shall constitute a serial defect for purposes
of the Balance of Plant Warranty.
“Beam Path Study” means a study of potential interference of the Project with
microwave telecommunication facilities to be prepared by a qualified consultant
acceptable to Buyer and delivered to Buyer in final form prior to the Effective Date.
“Books and Records” means any and all data; reports (including repairs,
maintenance, testing and operational reports); external, non-attorney-privileged material
correspondence; maps; surveys; and other business records necessary to the development
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of the Project that are generated or obtained by Company or Seller prior to the Closing
Date with respect to the Company, the Company Assets or the Project.
“Business Day” means any day other than Saturday, a Sunday, or a holiday, on
which banks are generally open for business in Minneapolis, Minnesota.
“Buyer” is defined in the introductory paragraph of this Agreement.
“Buyer Affirmative Coverage” is defined in Section 3.2.3(b).
“Buyer Confidential Information” is defined in Section 8.4.1.
“Buyer Damages” is defined in Section 9.3.1.
“Buyer Documents” is defined in Section 7.2.
“Buyer Indemnified Parties” is defined in Section 9.3.1.
“Buyer Permits” is defined in Section 6.13.
“Buyer’s Knowledge” means the actual and current knowledge of any of the
Persons listed in Schedule 1.1(a), after reasonable inquiry by such Persons of those
Representatives of or consultants to Buyer or Buyer’s Affiliates who are reasonably
likely to have material knowledge of the relevant subject matter.
“Buyer’s Schedules” means the Schedules to any of the provisions of ARTICLE
7.
“Closing” is defined in Section 2.3.
“Closing Date” is defined in Section 2.3.
“Closing Payment” means the following amount payable on the Closing Date: an
amount equal to the Adjusted Purchase Price, minus the sum of (i) the Deposit, plus
(ii) the Holdback Amount, plus (iii) accrued and unpaid Delay Damages.
“Code” means the Internal Revenue Code of 1986, as amended.
“Commission Approvals” is defined in Section 5.13.
“Commissioning” means the start-up and commissioning activities to be
conducted in accordance with the procedures set forth in the EPC Agreement and the
Turbine Supply Agreement.
“Commissioning and Turnover Certificate” means a certificate in the form
attached to the Turbine Supply Agreement issued by the Turbine Supplier certifying as to
the completion of Commissioning and the readiness of a certain WTG for turnover to the
Company.
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“Commissioning and Turnover of WTGs” with respect to a fully-assembled
WTG and the equipment associated therewith means the achievement of the following
milestones:
(a)
Mechanical Completion with respect to such WTG has occurred,
as evidenced by the Company’s delivery to Contractor of a countersigned
Mechanical Completion Certificate with respect thereto;
(b)
Commissioning has been conducted and the WTG has met or
exceeded the requirements pursuant to the procedures set forth in the EPC
Agreement, the Turbine Supply Agreement and the other requirements and
recommendations of the Turbine Supplier;
(c)
all WTG equipment associated with such fully assembled WTG
has been properly assembled, erected, installed, adjusted, tested and
commissioned, is mechanically, electrically and structurally complete, in each
case in accordance with the Technical Specifications, the Applicable Standards
and the terms and conditions of the EPC Agreement and can be used safely and
operated continuously;
(d)
Contractor has coordinated erection of the tower portion of each
WTG and has delivered and poured all grouting between the Tower flange of the
bottom portion of such Tower and its Foundation; and
(e)
the Company has accepted a Commissioning and Turnover
Certificate with respect to such fully assembled WTG pursuant to the terms and
conditions of the Turbine Supply Agreement.
“Commissions” is defined in Section 5.13.
“Company” is defined in the Recitals.
“Company Assets” means, unless otherwise provided herein, all properties, assets
and rights of any kind, whether tangible or intangible, real or personal, that are necessary
or appropriate to the construction, operation and maintenance of the Project including:
(a)
the Wind Data (subject to licenses to Seller to use such data, with
the form of such licenses to be mutually acceptable to Seller and Buyer and
agreed to prior to the Effective Date);
(b)
the Facilities;
(c)
the Land Contracts;
(d)
the Contracts;
(e)
the Permit Applications and the Permits;
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(f)
the Reports (subject to licenses to Seller to use the Reports, with
the form of such licenses to be mutually acceptable to Seller and Buyer and
agreed to prior to the Effective Date);
(g)
the Interconnection Rights;
(h)
the Books and Records;
(i)
the Real Property;
(j)
the design layout of the Facilities, including micro-siting; and
(k)
all emissions allowances or credits, renewable energy credits,
green tags, or other environmental or financial attributes of the Facilities, if any.
Notwithstanding the foregoing, Seller may retain a copy of all Reports, which Seller may
use solely for its internal purposes, subject to Section 8.4.
“Construction Services” means all actions and services required to construct a
fully operational Project.
“Contract” means any of the agreements or contracts to which the Company,
Seller or any of its other Affiliates is a party and includes all of the material Contracts
that are described in Schedule 6.12.
“Contractor” means RES America Construction Inc., an Affiliate of Seller.
“Corporate Documents” means the articles or certificate of incorporation and
bylaws of a corporation or the equivalent constitutive documents of a limited liability
company, partnership, limited partnership or other entity.
“Cultural Resources Survey” means the cultural resources survey to be prepared
by a qualified firm and delivered to Buyer in final form.
“Curative Documents” is defined in Section 3.2.3(b).
“Delay Damages” is defined in Section 10.1.
“Deposit” [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
“Deposit Refund Letter of Credit” is defined in Section 10.4.2.
“DPPS” means the definitive planning process study to be performed by MISO,
or a consultant acceptable to MISO, identifying the definitive scope and estimated cost of
any upgrades that may be required with respect to the interconnection of the Project.
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“Easement Agreement” means each agreement (together with any amendments
thereto or replacements thereof) granting an easement to use the Real Property within the
Site in connection with the construction, operation and maintenance of the Project and
including the Easement Agreements listed on Schedule 6.11.
“Easement Amendment” means an amendment to an Easement in the form
attached hereto as Exhibit D.
“Effective Date” means the date on which all of the conditions listed in
Sections 3.2 and 4.1 have been satisfied and Buyer and Seller have executed the Effective
Date Certificate.
“Effective Date Certificate” means a certificate in the form attached as Exhibit G
certifying that the conditions set forth in Sections 3.2 and 4.1 have been satisfied and that
the Parties intend the provisions of this Agreement (other than the provisions expressly
identified in Section 3.1 as being effective as of the Signing Date) to be effective as of the
Effective Date.
“Effective Date Conditions” is defined in Section 3.1.1.
“Electrical Substantial Completion Certificate” means a certificate in the form
attached to the EPC Agreement issued by the Contractor certifying as to Electrical Works
Substantial Completion as to the circuit on which a particular WTG is located.
“Electrical Works” means the facilities and equipment described in
Schedule 1.1(c) relating to the collection system, the collector substation and the
interconnection.
“Electrical Works Substantial Completion” means the substantial completion of
the Electrical Works related to the circuit on which a particular WTG is located, as
described more fully in clause (a) of the definition of WTG Substantial Completion and
in the EPC Agreement.
“Encumbrances” means any claim, lien, pledge, mortgage, option, charge,
easement, security interest, right-of-way, encumbrance, lease, interest, mineral
reservations, covenant, conditional sales contract, title retention arrangement, adverse
claim or restriction of any kind.
“Environmental Laws” means all Laws that regulate or relate to (a) the protection
or clean-up of the environment; (b) the Handling of Hazardous Materials; (c) the
preservation or protection of waterways, groundwater, drinking water, air, wildlife, plants
or other natural resources; and (d) the health and safety of persons or property, including
protection of the health and safety of employees. Environmental Laws shall include the
Resource Conservation & Recovery Act, Clean Water Act, Safe Drinking Water Act,
Occupational Safety and Health Act, Toxic Substances Control Act, Clean Air Act,
Comprehensive Environmental Response, Compensation and Liability Act, Emergency
Planning and Community Right-to-Know Act, Hazardous Materials Transportation Act,
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and Centers for Disease Control guidelines, policies and procedures, and all analogous or
related Laws.
“EPC Agreement” means an engineering, procurement and construction contact
to be entered into by and between the Company and the Contractor, in form and
substance satisfactory to the Parties and the Contractor, for the construction of those
portions of the Project not constructed or installed by the Turbine Supplier under the
Turbine Supply Agreement.
“Estoppel Letter” is defined in Section 3.2.3(a)(iii).
“Excluded Liabilities” is defined in Section 2.2.2.
“Excused Interconnection Delay” shall mean any delay in Seller’s or the
Company’s “critical path” construction schedule that is caused by the inability of the
Project to achieve Interconnection when it would otherwise have been able to do so (in
light of the actual construction schedule of the Project) that is due to (a) the actions or
omissions of the Transmission Owner (including the failure of the Transmission Owner
to meet one or more of its milestones under the Interconnection Agreement, whether or
not such failure constitutes a breach of the Interconnection Agreement by the
Transmission Owner), or (b) the breach of or noncompliance with Section 5.8 hereof by
Buyer; provided, however, that (i) to the extent that any delay in achieving
Interconnection arises from, in whole or in part, the failure of Seller or the Company to
meet its milestones under the Interconnection Agreement, the breach of or
noncompliance with the Interconnection Agreement or Section 5.8 hereof by Seller or the
Company, then such delay shall not be an Excused Interconnection Delay, and (ii) if a
Force Majeure Event and an Excused Interconnection Delay are in effect on the same
day, then that day’s delay shall be attributed to the Force Majeure Event and not the
Excused Interconnection Delay (e.g., such day shall not count as two days of delay).
“Exhibits” means the exhibits attached to, and expressly contemplated in, this
Agreement, including those to be delivered at the Effective Date or at the Closing Date.
“Extreme Weather” means (a) weather conditions severe enough to prohibit use
of road transportation systems such that a reasonable common carrier would not use such
systems to transport equipment, material, supplies or labor provided that such prohibition
continues for more than five (5) consecutive days or (b) other severe weather conditions
that continue for more than five (5) consecutive days (excluding the matters described in
the definition of Weather Delays), and, in each case, that are unusual or could not
reasonably be expected to be encountered in the affected area during the impacted period.
“FAA” means the U.S. Federal Aviation Administration.
“FAA Determinations of No Hazard to Air Navigation” means the FAA
Determinations of No Hazard to Air Navigation issued by the FAA with respect to each
Wind Turbine Generator in the Project.
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“FAA Screening Study” means the screening study prepared to review potential
impacts of the WTGs and Meteorological Stations to long range and weather radars,
military training routes and special airspaces, and delivered to Buyer in final form prior
to the Effective Date.
“Facilities” means the wind power generating facilities (including the
foundations, towers, wind turbine generators, electrical collection system, collector
substation, transmission line, access roads, operating and maintenance building and other
equipment, materials, improvements and assets associated therewith), [TRADE
SECRET DATA BEGINS
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Meteorological Stations, and all other assets relating to the Project.
“Fee Simple Amount” [TRADE SECRET DATA BEGINS
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“FERC” means the Federal Energy Regulatory Commission.
“Final Adverse Under Construction Determination” is defined in Section
2.2.3(b).
“Final Completion” means the satisfaction or achievement of the following:
(a)
Project Substantial Completion has occurred, as evidenced by
Company’s delivery to Contractor of a countersigned Project Substantial
Completion Certificate;
(b)
Contractor has performed all of the Work (including the clean-up
and restoration of that portion of the Project Site where Contractor conducted the
Work, the removal from the Project Site of all waste materials introduced or
created by Contractor in the performance of the Work, the recycling and/or
disposal of such waste material and the re-grading and/or re-seeding of disturbed
areas where appropriate) to be performed by Contractor and Seller has performed
or caused to be performed all other Work, such that, upon completion of the
Work, the Project may be operated as a fully-integrated wind-powered electricity
generating plant and all the tests, mechanical calibrations, electrical continuity
and ground fault tests have been successfully completed and any defects found
have been corrected;
(c)
Company has received a Final Lien Waiver from Contractor, each
Subcontractor, the Turbine Supplier and all other Persons performing any Work;
or, if Contractor is unable to obtain all such waivers, a letter of credit or bond
(approved by Buyer) to protect Company, Buyer, the Project and the Project Site
from any and all claims made on account of such Liens;
(d)
Contractor has delivered the Turnover Packages in accordance
with the terms of the EPC Agreement;
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(e)
all As Built Drawings have been delivered to and accepted by
Company in accordance with the terms of the EPC Agreement;
(f)
all quality assurance documentation has been provided to and
received by Company in accordance with the Project Quality Assurance Plan and
all non-conforming quality assurance issues have been resolved in accordance
with the Project Quality Assurance Plan;
(g)
all of the supplies, personnel and waste of the Contractor or any
other Person performing Work pursuant to a Contract have been removed from
the Project Site;
(h)
either (i) all Punch List Items have been corrected or performed to
Buyer’s reasonable satisfaction or (ii) Buyer has elected to not require completion
of certain Punch List Items and Contractor or such other Person performing Work
pursuant to a Contract has paid all amounts due to Company with respect thereto
in accordance with the terms of the EPC Agreement or such Contract and all other
Punch List Items have been completed;
(i)
final grading of the area surrounding each foundation is complete
and a rock ring around each tower base is in place; and
(j)
Company has accepted a Final Completion Certificate.
“Final Completion Certificate” means a certificate in the form attached to the
EPC Agreement issued by the Contractor certifying the satisfaction or achievement of
each condition to Final Completion.
“Final Completion Date” means the Business Day mutually agreeable to Buyer
and Seller, but occurring no later than five (5) Business Days after the satisfaction of all
of the conditions set forth in the definition of Final Completion.
“Final Completion Payment” [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
“Final Determination” means a decision, judgment, decree or other order by any
administrative agency or court of competent jurisdiction, which decision, judgment,
decree or order has become final (i.e., when all allowable appeals have been exhausted).
“Final Layout Amendment” is defined in Section 3.3.12(b).
“Final Lien Waiver” means a lien waiver properly completed and executed by
Contractor, each Major Subcontractor, each Subcontractor performing work at the Project
Site, and the Turbine Supplier, as applicable, which provides that such Person
unconditionally waives and releases all mechanic’s or other Liens with respect to all
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Work for which Contractor requested final payment in the form specified in the EPC
Agreement.
“Final Order” means an action by an Authority as to which (a) no request for stay
of the action is pending, and no such stay is in effect; (b) no petition for rehearing,
reconsideration or application for review of the action is pending; (c) such Authority does
not have the action under reconsideration or subject to rehearing on its own motion or
otherwise; and (d) no appeal to a court, or a request for stay by a court of the Authority’s
action is pending or in effect.
“Final Under Construction Certificate” is defined in Section 3.3.9.
“Final Under Construction Opinion” is defined in Section 3.3.9.
“Final Under Construction Plan IE Certificate” is defined in Section 3.3.9.
“Force Majeure Event” means (a) prior to the Target Closing Date, any event
that wholly or partly prevents or delays the achievement on or before the Target Closing
Date of the requirements of clauses (a), (b), (d), (j), (k) or (l) of the definition of Project
Substantial Completion; and (b) after the Target Closing Date, any event that wholly or
partly prevents or delays the achievement of the requirements of clauses (a), (b), (d), (j),
(k) or (l) of the definition of Project Substantial Completion, in each case, only if and to
the extent:
(a)
such event is not within the reasonable control, directly or
indirectly, of and not the fault of the affected Person;
(b)
despite the exercise of reasonable diligence, such event cannot be
or be caused to be prevented, avoided or removed by the affected Person;
(c)
such event does not result from the affected Person’s negligence or
fault or the negligence or fault of its agents, employees, suppliers, contractors or
subcontractors of any tier; and
(d)
such event causes an actual delay in the Project’s “critical path”
construction schedule.
A Force Majeure Event shall include an event that falls within one or more of the
following categories (to the extent meeting the foregoing requirements contained in this
definition): expropriation; invasion; plague; drought; landslide; tornado; hurricane;
tsunami; flood; earthquake; fire; explosion; epidemic; quarantine; acts of terrorism, war
(declared or undeclared) or other armed conflict; any subsurface condition not identified
in the Reports; strikes and other labor disputes (including collective bargaining disputes
and lockouts) of a national, regional or area-wide nature; riot, revolution, insurrection or
similar civil disturbance or commotion; other acts of God, including Extreme Weather
(but excluding Weather Delays); acts of the public enemy; perils of sea; blockade; port
closure; sabotage or vandalism; embargoes; transportation accidents; except as provided
below, delays in transportation due to closure of roads or other transportation route by
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Authorities or closure of roads otherwise due to an independent, identifiable Force
Majeure Event individually in excess of five (5) days that is unusual or could not
reasonably be expected to be encountered in the affected area during the impacted period;
change in law; acts, omissions, decrees or injunctions of an Authority other than acts or
omissions in response to acts or omissions of the affected Person.
Notwithstanding the provisions of the immediately preceding paragraph, a Force
Majeure Event shall not include (A) lack of funds or finances or any obligation for the
payment of money, (B) except as provided in Section 5.12, acts or omissions of an
Authority regarding Permits (including delay in issuance of a permit, approval or
required consultation with an Authority) or any delay in issuance of any Permit caused by
any third party contest, or any action required by any Permit, or (C) Weather Delays.
“Foundation Completion” with respect to an individual WTG foundation, means
the achievement of the following milestones:
(a)
such foundation is mechanically completed and installed in
accordance with the Technical Specifications, the EPC Agreement and the
Turbine Supply Agreement;
(b)
such foundation is structurally complete and contains all necessary
embedded inserts;
(c)
the concrete portion of such foundation has cured so as to have
achieved the minimum strength necessary to allow assembly, erection and
installation of the WTG thereon in accordance with the EPC Agreement and the
Turbine Supply Agreement;
(d)
backfilling of the area surrounding such foundation has been
completed; and
(e)
the Company has accepted a Foundation Completion Certificate
with respect to such foundation pursuant to the terms and conditions of the EPC
Agreement.
“Foundation Completion Certificate” means a certificate, in the form attached to
the EPC Agreement, issued by the Contractor certifying as to the Foundation Completion
of a WTG foundation.
“Fully-Loaded Costs” is defined in Section 2.2.3(c)(iv).
“FWS” means the U.S. Fish and Wildlife Service.
“Geotechnical Report” means the report to be prepared by a qualified
geotechnical engineering firm with respect to the geotechnical borings and analysis
conducted for each WTG location and delivered to Buyer in final form prior to the
Effective Date.
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“Guaranteed Completion Date” [TRADE SECRET DATA BEGINS
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SECRET DATA ENDS]
“Guarantor” [TRADE SECRET DATA BEGINS
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“Guaranty” [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
“Handling” means the production, use, treatment, storage, transportation,
generation, manufacture, processing, distribution, disposal, emission, discharge, Release
or threatened Release of any Hazardous Material.
“Hazardous Materials” means any chemical, material or substance in any form,
whether solid, liquid, gaseous, semisolid, or any combination thereof, whether waste
material, raw material, chemical, finished product, byproduct, or any other material or
article, that is listed or regulated under applicable Environmental Laws as a “hazardous”
or “toxic” substance or waste, or as a “contaminant,” or is otherwise listed or regulated
under applicable Environmental Laws because it poses a hazard to human health or the
environment, including petroleum products, asbestos, urea formaldehyde foam insulation,
and lead-containing paints or coatings.
“Holdback Amount” [TRADE SECRET DATA BEGINS
TRADE
SECRET DATA ENDS]
“HSR Act” means the Hart-Scott Rodino Antitrust Improvements Act of 1976, as
amended.
“IE Determined Holdback Amount” is defined in Section 3.3.2(c).
“Indebtedness” means, with respect to any Person, any indebtedness, whether or
not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures
or similar instruments or letters of credit (or reimbursement agreements in respect
thereof) or representing the deferred and unpaid balance of the purchase price of any
property (including pursuant to capital leases), including any such balance that constitutes
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an accrued expense or a trade payable, and shall also include, to the extent not otherwise
included, the guaranty of items which would be included within this definition.
“Independent Accountant” means [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS] or, if such firm is unable or unwilling to
act as the Independent Accountant under this Agreement, a nationally recognized firm of
independent certified public accountants that is mutually acceptable to Seller and Buyer
or selected as provided in Section 2.5.3.
“Independent Engineer” means [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS] or, if such firm is unable or unwilling to act as the
Independent Engineer under this Agreement or is not acceptable to the lenders for the
financing described in Section 4.1.1, a nationally recognized engineering firm that is
mutually acceptable to Seller and Buyer.
“Independent Tax Attorney” means [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS] or, if such firm is unable or
unwilling to act as the Independent Tax Attorney under this Agreement, a nationallyrecognized law firm who possesses substantial expertise with wind energy projects and
the application of Section 45 of the Code with respect thereto, is engaged by Buyer (at
Seller’s sole expense) and is mutually acceptable to Seller and Buyer.
“Infrastructure Facilities” means all of the balance of plant Work, including
buildings, roads, foundations, laydown areas, pad-mounted transformers, electrical works
and other permanent fixtures as more fully described in the EPC Agreement.
“Initial Under Construction Certificate” is defined in Section 2.2.3(a).
“Initial Under Construction Opinion” is defined in Section 2.2.3(a).
“Insured Over Third Party Mineral Rights” is defined in Section 3.2.3(b).
“Interconnection” means the connection of the Project to Transmission Owner’s
electrical transmission system as coordinated by Seller or the Company with the
Transmission Owner and/or MISO.
“Interconnection Agreement” means a final Generator Interconnection
Agreement to be entered into between the Company, MISO and the Transmission Owner
with respect to the Interconnection following the Signing Date and the completion of the
applicable interconnection studies, as such agreement may be amended to update the
milestones thereunder.
“Interconnection Rights” means any and all of the Company’s, Seller’s or any of
its other Affiliates’ rights and interests in the Project’s transmission and interconnection
queue position for Project interconnection for 200 MW filed by Seller or its Affiliate with
MISO with queue number J278, any studies, reports or other documents provided by
MISO, and any and all other rights relating to the interconnection of the Project to the
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transmission system of MISO or Transmission Owner with respect to the Project,
including the Interconnection Agreement.
“Interconnection Savings” means [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
“Interest Rate” means, for any date, a rate per annum equal to the sum of (i) the
“Prime Rate” as published in The Wall Street Journal under “Money Rates” on such day
(or if not published on such day, on the most recent preceding day on which published),
plus (ii) two percent (2.0%).
“IRS” means the United States Internal Revenue Service.
“IRS PTC Publication” means that certain Notice 2013-29, published by the IRS
on April 15, 2013, entitled “Beginning of Construction for Purposes of the Renewable
Electricity Production Tax Credit and Energy Investment Tax Credit,” as modified by the
IRS on April 25, 2013, as may be amended, modified, supplemented or restated.
“Land Acquisition Contracts” means all agreements providing for the acquisition
of fee title to all or any portion of the O&M Facility Real Property, the Substation Real
Property or any other Real Property.
“Land Contracts” means all Land Acquisition Contracts, Easement Agreements,
lease agreements and all other agreements granting rights with respect to the use of the
real property within the areas delineated on Exhibit A in connection with the
construction, operation and maintenance of the Project. For the avoidance of doubt, Land
Contracts shall also include any right-of-way or easement agreement that is required from
Mower and Dodge Counties or any other Authority with respect to the use of public roads
or right-of-way for the installation and use of electrical transmission lines, unless the
Title Company will not insure such rights-of-way or easement agreements in which case
they shall be treated as Permits.
“Law” means any law, statute, rule, regulation, ordinance, standard, code, order,
judgment, decision, writ, injunction, decree, certificate of need, award or other
governmental restriction, including any published and publicly available policy or
procedure (or any guidelines or recommendations with respect to human health or safety
or the use, handling, disposal or release of Hazardous Materials) (except as provided in
Section 5.13) issued or enforced by any Authority.
“Liabilities” means any and all direct or indirect liabilities, Indebtedness,
obligations, commitments, losses, damages, expenses, claims, deficiencies, or guaranties
of any type, whether accrued, absolute, contingent, matured, unmatured or other, or
known or unknown.
“Liquidated Damages” means Delay Damages and Termination Damages.
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“Major Subcontractor” means any Subcontractor with whom Contractor will
enter (or has entered) into an agreement or agreements having an aggregate value in
excess of [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS] for performance of any part of the Work.
“Material Adverse Effect” means an event, change, occurrence, circumstance,
development or effect, which, individually or when taken together with the effect of all
other events or circumstances occurring since the Effective Date (a) has caused or could
reasonably be expected to cause [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS] of the Project that is capable of achieving
Project Substantial Completion by the Guaranteed Completion Date [TRADE SECRET
DATA BEGINS
TRADE SECRET DATA ENDS], or (b) has
had or could reasonably be expected to have a material adverse effect on the assets,
properties, liabilities (other than the Retained Liabilities and the Assumed Liabilities as
provided for in this Agreement) of the Company or the assets, properties or physical
condition of the Project, which effect has a material adverse effect on the Company or the
Project as a whole; provided, however, that the determination of whether a Material
Adverse Effect has occurred shall exclude the following occurrences (i) any event or
circumstance resulting from either changes in the international, national or regional
electric industry in general or changes in general national or regional economic or
financial conditions and that does not have a disproportionate impact on the Project, as
compared to similar wind energy development projects in the U.S. and (ii) wholesale or
retail prices for power, renewable power or RECs or changes in such prices, or the
profitability or financial condition or results of operation of the Company, and
(iii) [TRADE SECRET DATA BEGINS
TRADE SECRET DATA
ENDS] No violation or noncompliance with Environmental Laws or other Laws assumed
by Buyer under Section 5.12 shall be considered in determining whether a Material
Adverse Effect has occurred.
“Mechanical Completion” with respect to an individual WTG means
achievement of the following:
(a)
Foundation Completion with respect to the foundation for such
WTG has occurred and such WTG is designed, fabricated, assembled, erected and
installed in accordance with the Technical Specifications, the Mechanical
Completion Checklist and the other requirements of the EPC Agreement, and
checked for adjustment;
(b)
all materials and equipment associated with such WTG have been
installed in accordance with the Technical Specifications, the Mechanical
Completion Checklist, the applicable Project Quality Assurance Plan and the
other requirements of the EPC Agreement, and checked for adjustment, rotation
and lubrication;
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(c)
Contractor has prepared and submitted a list of Punch List Items
with respect to such WTG;
(d)
the WTG is ready to commence Commissioning and testing; and
(e)
the Company has accepted a Mechanical Completion Certificate
with respect to such WTG pursuant to the terms and conditions of the EPC
Agreement.
“Mechanical Completion Certificate” means a certificate in the form attached to
the EPC Agreement issued by the Contractor certifying as to the Mechanical Completion
of a WTG.
“Mechanical Completion Checklist” means a checklist developed in connection
with the EPC Agreement and attached as an exhibit thereto to provide for a thorough
itemized review of all aspects of the erection and installation of a WTG.
“Membership Interest Assignment” is defined in Section 3.3.1(a).
“Meteorological Stations” means at least one (1) permanent wind and weather
monitoring station to be installed by the Contractor pursuant to the EPC Agreement on
the Property in accordance with wind energy industry practice and standards and the
Technical Specifications, which includes, at a minimum, a wind anemometer, wind
vanes, a free standing tower and a connection to the SCADA system.
“MISO” means the Midwest Independent Transmission System Operator, Inc. or
its successors.
“MW” means megawatt.
“NCF” means net capacity factor.
“NDCC” is defined in Section 5.13.
“NERC” is defined in Section 5.8.1.
“Noise Study” means a study to be completed by a qualified consultant with
respect to the compliance of the Project as designed with noise standards and delivered to
Buyer in final form prior to the Effective Date.
“Non-Disclosure Period” is defined in Section 8.9.
“Non-Disturbance Agreements” is defined in Section 3.2.3(b).
“NSP Corporate Approval” is defined in Section 3.2.16.
“NSP Drawing Standards” means the drawing standards attached hereto as
Schedule 1.1(b).
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“O&M Facility Real Property” means the fee simple interests in the land
described in Schedule 1.1(d) for the operating and maintenance facility and related
improvements if the Company is able to acquire such fee simple interests pursuant to
Section 5.10. If the Company is not able to acquire such fee simple interests pursuant to
Section 5.10, references to the O&M Facility Real Property in this Agreement shall mean
the rights of the Company under the applicable Land Contracts to locate such facility on
such property.
“O&M Manual” means the complete system instructions and procedures for the
operation and maintenance of the WTGs and the Infrastructure Facilities, including
Contractor’s manufacturers’, vendors’, suppliers’, Subcontractors’ and Turbine
Supplier’s recommended lists of Spare Parts, all safety information and any precautionary
measures therefor.
“O&M Option” is defined in Section 2.6.
“Operating Permits” is defined in Section 6.13.
“Operational Date” means the date upon which Seller (or the Company) begins
selling electricity to one or more third parties from WTGs that have reached WTG
Substantial Completion.
“Option Period” is defined in Section 11.2.
“Optional Interconnection Study” means [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
“Partial Lien Waiver” means a lien waiver properly completed and executed by
the Contractor, the Turbine Supplier, a Major Subcontractor or a Subcontractor, as the
case may be, in the form specified in the EPC Agreement, with respect to progress
payments.
“Party” means Buyer or Seller individually; and “Parties” means Buyer and Seller
collectively.
“Permit” means any license, consent, certificate (including permanent
unconditional certificate of occupancy), approval, permit or authorization of any sort
whatsoever by or from any Authority, including any certificate of needs, for the
development, construction, ownership, operation or transfer of the Project as described on
Schedule 6.13.
“Permit Application” means any application, petition or request made by
Company, Seller or any other of its Affiliates to any Authority on or before the Closing
Date in order to obtain a Permit.
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“Permitted Encumbrances” means (a) Encumbrances for property taxes not yet
due and payable, (b) utility easements, building restrictions and such other similar nonmonetary Encumbrances incurred in the ordinary course of business that are of a nature
generally existing with respect to properties of a similar character, which do not currently
present any risk of sale of the property subject to the Encumbrance, which do not affect
in any way (other than a de minimis effect) the marketability of the Company Assets, and
which will not interfere in any material respect with the construction, or in any respect
with operation or maintenance of the Project, (c) Encumbrances set forth on
Schedule 6.11, (d) Encumbrances granted to lenders under the financing in respect of the
development or construction of the Project (so long as such Encumbrances are released at
or prior to the Closing), (d) any matter contained in an Updated Title Report that is not
objected to by Buyer pursuant to Section 5.11, and (e) any other Encumbrances created or
permitted with the written consent of Buyer in its sole discretion (including
Encumbrances insured over by the Title Company in the Title Policy).
“Permitted Title Exception” is defined in Section 3.2.3(b).
“Permitting Opinion” means a permitting opinion acceptable to Buyer from legal
counsel licensed to practice in the jurisdiction in which the Project is located, selected
and paid by Seller and approved by Buyer (such approval not to be unreasonably
withheld) that describes all material, discretionary Permits required to develop, construct
and to commence operation of the Project, and, with respect to such Permits (other than
any Operating Permits and the Buyer Permits) opines that with respect to each such
material discretionary Permit it is legal, valid, binding and enforceable in accordance
with its terms, and is in full force and effect and is not subject to any further appeal,
except with respect to the operational matters and risks relating to the period following
Closing assumed by Buyer in Section 5.12.
“Person” means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company, decedent’s estate,
organization, entity, or unincorporated organization or any Authority.
“Phase I Environmental Site Assessment” means a Phase I Environmental Site
Assessment prepared by a qualified environmental consulting firm and delivered to
Buyer in final form prior to the Effective Date.
“Post-Closing Adjustment” is defined in Section 2.5.1.
“Post-Closing PTC Adjustment Amount” is defined in Section 2.2.3(b).
“Post-Closing Statement” is defined in Section 2.5.1.
“Pre-Closing Period” is defined in Section 8.6.4.
“Pre-Closing Tax Returns” is defined in Section 8.6.3.
“Project” means the complete, commercially operable, integrated wind-powered
electricity generating plant (including the Facilities) with a nameplate capacity of
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[TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS] located in Mower and Dodge Counties,
Minnesota.
“Project Quality Assurance Plan” means the plan setting forth the quality
assurance and quality control procedures for the Project attached hereto as Exhibit H.
“Project Substantial Completion” means that each of the following has been
achieved:
(a)
Electrical Works Substantial Completion with respect to the WTGs
described in clause (b) below;
(b)
WTG Substantial Completion with respect to WTGs with an
aggregate nameplate capacity equaling [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS];
(c)
the requirements set forth in the EPC Agreement for the
Commissioning test and Inspection Procedures have been met or exceeded with
respect to the WTGs described in clause (b) above and the other portions of the
Project described in clauses (a) and (d) of this definition;
(d)
Contractor has completed all of the Work for all of the
Infrastructure Facilities necessary to interconnect and operate or otherwise
associated with the WTGs described in clause (b) above, other than any Punch
List Items and has delivered to the Company copies of the test reports and
electrical schematics related to such Infrastructure Facilities, and Seller has
delivered copies of all such documents to Buyer;
(e)
Contractor has prepared and submitted to the Company the final
and complete list of Punch List Items with respect to the WTGs described in
clause (b) above and the other portions of the Project described in clauses (a) and
(d) of this definition;
(f)
Contractor has delivered draft copies of the Turnover Packages and
O&M Manuals to the Company in accordance with the terms of the EPC
Agreement, and Seller has delivered copies of all such documents to Buyer, with
respect to the WTGs described in clause (b) above and the other portions of the
Project described in clauses (a) and (d) of this definition;
(g)
drafts of As Built Drawings with respect to the WTGs described in
clause (b) above and the other portions of the Project described in clauses (a) and
(d) of this definition shall have been delivered to, and accepted by, the Company
and the Independent Engineer has determined that such As Built Drawings
comply with the requirements of the EPC Agreement;
(h)
Contractor has delivered to the Company all interim or progress
payment Partial Lien Waivers or final payment Final Lien Waivers, as the case
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may be, from all Major Subcontractors and from Turbine Supplier for Work
completed through such date with respect to the WTGs described in clause (b)
above and the other portions of the Project described in clauses (a) and (d) of this
definition and Seller has provided copies of all such documentation to Buyer;
(i)
all quality assurance documentation has been provided to and
received by the Company in accordance with the Project Quality Assurance Plan
and all non-conforming quality assurance issues, other than those that have been
accepted as Punch List Items, have been resolved in accordance with the Project
Quality Assurance Plan and Seller has provided copies of all such documentation
to Buyer, in each case, with respect to the WTGs described in clause (b) above
and the other portions of the Project described in clause (a) above;
(j)
the Interconnection allows for the output of the Project, as
proposed, to be delivered to the transmission system in accordance with the
Interconnection Agreement and the standards of MISO and the Transmission
Owner;
(k)
the Company has accepted a Project Substantial Completion
Certificate pursuant to the terms of the EPC Agreement and the Independent
Engineer has determined that the Project Substantial Completion Certificate has
been issued in accordance with the EPC Agreement with respect to the WTGs
described in clause (b) above and the other portions of the Project described in
clauses (a) and (d) of this definition; and
(l)
all Warranty Parts Inventory and any other Spare Parts, to the
extent required under the Turbine Warranty and O&M Agreement to be held by
the Company as a condition to the effectiveness of the WTG Warranty, have been
delivered by Contractor and/or Turbine Supplier to the Project Site, in each case,
with respect to the WTGs described in clause (b) above.
The Parties acknowledge and agree that Seller’s intent is to cause the Company to
construct Facilities having a nameplate capacity of [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS] and Buyer’s intent is that the
Company will have Facilities having a nameplate capacity of [TRADE SECRET DATA
BEGINS
TRADE SECRET DATA ENDS], and that therefore,
the conditions set forth in clauses (b) and (c) of this definition of Project Substantial
Completion shall not be deemed satisfied if [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS] have been completed,
even if de minimis.
“Project Substantial Completion Certificate” means a certificate in the form
attached to the EPC Agreement issued by the Contractor certifying as to the satisfaction
or achievement of each condition to Project Substantial Completion and accepted by
Company.
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“Project Warranty” means, collectively, the Balance of Plant Warranty, the Seller
Project Warranty, the WTG Warranty, and each other warranty provided in respect of the
Project pursuant to a Contract or this Agreement.
“Property” means all real property that is the subject of the Land Contracts as
further described in Part A of Schedule 6.11, together with any Real Property.
“Prudent Engineering Practices” means those practices, methods, equipment,
specifications and standards of safety and performance, as the same may change from
time to time, as are commonly used by professional construction and engineering firms
performing engineering, procurement and construction services on wind energy facilities
of the type, size and location similar to the Project which, in the exercise of reasonable
judgment and in the light of the facts known at the time the decision was made, are
considered good, safe and prudent practice in connection with the design, construction
and use of wind energy generating and operating, electrical and other equipment,
facilities and improvements, with commensurate standards of safety, performance,
dependability, efficiency and economy, and as are in accordance with generally accepted
national standards of professional care, skill, diligence and competence applicable to
design, engineering, construction and project management practices, including standards
published by the Institute of Electrical and Electronics Engineers, the American National
Standards Institute, the National Electrical Manufactures Association or ASTM. Prudent
Engineering Practices are not necessarily defined as the optimal standard practice method
or act to the exclusion of others, but rather refer to a range of action reasonable under the
circumstances.
“Prudent Industry Practices” means those practices, methods, standards and acts
(including those engaged in or approved by a significant portion of the wind generated
electric power industry for similar wind electric generation facilities in the United States)
that at a particular time in the exercise of good judgment and in light of the facts known
at the time the decision was made, would have been expected to accomplish the desired
result in a manner consistent with applicable Laws, safety, environmental protection,
economy and expedition. Prudent Industry Practices are not necessarily defined as the
optimal standard practice method or act to the exclusion of others, but rather refer to a
range of action reasonable under the circumstances.
“PTC” or “PTCs” means production tax credits under Section 45 of the Internal
Revenue Code as in effect on the Effective Date or (a) any substantively equivalent
(including as to the amount of tax credit provided) successor provision providing for a
federal tax credit determined by reference to renewable electric energy produced from
wind resources or (b) any replacement tax incentive renewable electric energy produced
from wind resources, including an investment tax credit or cash grant in lieu of an
investment tax credit, that provides a substantially equivalent financial value to Buyer.
“PTC Expiration Date” means December 31, 2013, or any later deadline for
achieving the Under Construction requirement for the Project for purposes of Section 45
of the Code as a result of any change in law, including any retroactive change in law, or
for qualification for (a) any substantively equivalent successor provision of the Code
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providing for a federal tax credit determined by reference to renewable electric energy
produced from wind resources or (b) any replacement tax incentive available for
renewable electric energy produced from wind resources, including an investment tax
credit or cash grant in lieu of an investment tax credit, that provides a substantially
equivalent financial value to Buyer.
“PTC Tax Loss” means [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
“PUHCA” is defined in Section 4.1.6.
“Punch List Holdback Amount” means such amount sufficient to pay the costs of
completing the Punch List Items, as agreed by the Parties, or, if the Parties are unable to
agree upon such amount as determined by the Independent Engineer.
“Punch List Items” means each item of Work that:
(a)
Seller and Buyer agree remains to be performed following Project
Substantial Completion;
(b)
does not in Seller’s and Buyer’s reasonable judgment, affect the
ability of the Company to safely operate the Project in accordance with
Applicable Standards and in compliance with all Laws;
(c)
does not in Seller’s and Buyer’s reasonable judgment, affect the
operability (including capacity, efficiency, reliability, or cost effectiveness),
safety or mechanical or electrical integrity or the safe, reliable or continuous
commercial operation of the Project; and
(d)
does not in Seller’s and Buyer’s reasonable judgment, affect the
ability to Commission and test the WTGs, Infrastructure Facilities or the other
components of the Project.
If the Parties are unable to agree upon whether an item should be included in the
Punch List Items, the Independent Engineer shall make such determination.
“Purchase Price” means an amount equal to [TRADE SECRET DATA
BEGINS
TRADE SECRET DATA ENDS]
“Purchased Interests” means one hundred percent (100%) of the membership
interests of the Company.
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“Real Property” means the O&M Facility Real Property, the Substation Real
Property, the Facilities (to the extent the same are deemed to be real property) and any
other real property interests necessary for the construction, maintenance and operation of
the Project.
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing into the environment or
the workplace of any Hazardous Materials, and otherwise as defined in any
Environmental Law.
“Replacement Turbine Supplier” means [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS] or such other turbine manufacturer selected by Seller
and approved by Buyer (such approval not to be unreasonably withheld, conditioned or
delayed).
“Reports” means the Phase I Environmental Site Assessment, the Beam Path
Study, the Bird and Bat Assessments, the Cultural Resources Survey, the Wetlands
Assessment, the Permitting Opinion, the Standard Broadcast Site Review Study, the Title
Reports, the Site Plan, the FAA Screening Study, the Geotechnical Report, the Noise
Study, any additional study or report relating to the Project required to be delivered to
Buyer as specified in Schedule 6.19 and any other Report necessary for the development,
permitting, construction, operation or transfer of the Project or the Purchased Interests.
“Representation Holdback Amount” is defined in Section 3.3.2(b).
“Representation Holdback Event” is defined in Section 3.3.2(a).
“Representative” means, with respect to any Person, any officer, director,
employee, principal, attorney-in-fact, agent, or other representative of such Person.
“Schedules” means Buyer’s Schedules, Seller’s Schedules and all other schedules
expressly contemplated in this Agreement, including those to be delivered as of the
Effective Date and those to be delivered as of the Closing Date.
“Seller” is defined in the introductory paragraph of this Agreement.
“Seller Confidential Information” is defined in Section 8.5.1.
“Seller Damages” is defined in Section 9.3.2.
“Seller Documents” is defined in Section 6.3.
“Seller Indemnified Parties” is defined in Section 9.3.2.
“Seller Indemnity Cap” shall mean [TRADE SECRET DATA BEGINS
TRADE SECRET
DATA ENDS]
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“Seller Project Warranty” is defined in Section 6.26.
“Seller Tax Returns” is defined in Section 8.6.2.
“Seller’s Absolute Representations” means those representations and warranties
of Seller set forth in Sections 6.1, 6.2, 6.3, 6.4, 6.5, 6.8(a), 6.9, 6.12 (except for the
second sentence), 6.14, 6.16, 6.17, 6.19, 6.20, 6.24 and 6.25.
“Seller’s Knowledge” means the actual and current knowledge of any of the
Persons listed in Schedule 1.1(e), after reasonable inquiry by such Persons of those
Representatives of or consultants to Seller or Seller’s Affiliates who are reasonably likely
to have material knowledge of the relevant subject matter.
“Seller’s Material Representations” the representations and warranties of Seller
set forth in ARTICLE 6 other than the Seller’s Absolute Representations.
“Seller’s Schedules” means the Schedules to any of the provisions of ARTICLE
6.
“Settlement Agreement” is defined in Section 12.4.2.
[TRADE SECRET DATA
TRADE SECRET DATA ENDS]
“Signing Date” is defined in the introductory paragraph of this Agreement.
“Site” means the site on which the Project will be constructed in Mower and
Dodge Counties, Minnesota as more particularly described or depicted in, and which
shall be within the geographic boundaries set forth in Exhibit A.
“Site Plan” means the site layout for the Project attached as Exhibit F, including
the intended location of each of the turbines, the access roads, the electrical collector
system, the communication lines, and set-backs of the turbines from roads and other
structures which such layout shall overlay the Property and show the location of existing
roads, buildings, other structures, all wetlands (if any) as identified in the Wetlands
Assessment, and areas of concern (if any) as identified in the Phase I Environmental Site
Assessment.
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“Spare Parts” means the spare parts to be provided by Turbine Supplier pursuant
to the Turbine Warranty and O&M Agreement (or required to be purchased for the WTG
Warranty to be effective) and the spare parts to be provided by Contactor pursuant to the
EPC Agreement.
“Standard Broadcast Site Review Study” means the Standard Broadcast Site
Review Study prepared by a qualified consultant and delivered to Buyer in final form
prior to the Effective Date.
“Strategy Effective Date” is defined in Section 5.12(a).
“Subcontractor” means any vendor, supplier, consultant, or subcontractor, of any
tier, materialman, professional, laborer or other Person providing materials, equipment or
services, directly or indirectly, to Contractor in connection with the performance of the
Work, including any Major Subcontractor.
“Substation Real Property” means the fee simple interests in the land described
in Schedule 1.1(f) consisting of approximately [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS] and on which the collector substation for
the Project is to be located if the Company is able to acquire such fee simple interests
pursuant to Section 5.10. If the Company is not able to acquire such fee simple interests
pursuant to Section 5.10, references to the Substation Real Property in this Agreement
shall mean the rights of the Company under the applicable Land Contracts to locate such
substation on such property.
“Survey” is defined in Section 3.2.3(c).
“Target Closing Date” means [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS], provided, however, that such date shall be
extended on a day for day basis for each day following the Effective Date that the
achievement of Project Substantial Completion is delayed due to (a) a Force Majeure
Event, (b) an Excused Interconnection Delay or (c) a Turbine Supplier Change Delay.
“Tax Authority” means the Internal Revenue Service and any other domestic or
foreign Authority responsible for the administration of any Taxes.
“Taxes” means all federal, state, local, foreign and other net income, gross
income, estimated, gross receipts, sales, use, ad valorem, transfer, franchise, profits,
license, lease, service, service use, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property taxes and levied and pending assessments,
windfall profits, value added, commercial rent, customs duties, capital gain, social
security, royalty, documentary or other taxes, fees, assessments, duties or charges of any
kind whatever, together with any interest and any penalties, additions to tax or additional
amounts with respect thereto, and the term “Tax” means any one of the foregoing Taxes.
“Technical Specifications” means the description of the Work, Infrastructure
Facilities and WTGs for the Project as set forth on Exhibit I.
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“Tentative Adverse Under Construction Determination” is defined in Section
2.2.3(b).
“Termination Damages” is defined in Section 11.1.3.
“Third Party Rights” is defined in Section 3.2.3(a)(iii).
“Title Company” means a title company selected by Seller and approved by
Buyer (such approval not to be unreasonably withheld).
“Title Objection Letter” is defined in Section 3.2.3(b).
“Title Objections” is defined in Section 3.2.3(b).
“Title Policy” is defined in Section 3.2.3(b).
“Title Policy Endorsements” is defined in Section 3.2.3(b).
“Title Report” means a preliminary title commitment or report of condition of
title to be prepared by the Title Company for each parcel of the Property covered by the
Land Contracts and the Real Property showing all Encumbrances disclosed in the official
records of Mower and Dodge Counties, Minnesota (and that sets out the real estate legal
description and the record title holder and also describes all mortgages, judgments, Tax
liens and other liens, Taxes, estates, life estates and other reservations by will or
conveyance, all Encumbrances of record as disclosed in the official records of Mower
and Dodge Counties, Minnesota (including easements and government regulations), and
other proceedings affecting title (together with a copy of all such underlying documents)
that are contained in the official records of Mower and Dodge Counties, Minnesota). The
Title Report will also contain proper searches covering Uniform Commercial Code
financing statements, bankruptcies, and federal and state judgments and liens.
“Transmission Owner” means the entity party to and identified under the
Interconnection Agreement as the owner of the electrical transmission system being
utilized for Interconnection or its successors or assigns thereunder.
“Turbine Supplier” means [TRADE SECRET DATA BEGINS
TRADE SECRET DATA
ENDS]
“Turbine Supplier Change Delay” means any change or delay to the Project
construction schedule resulting from a change in Turbine Supplier in accordance with
Section 5.15.
“Turbine Supply Agreement” means the purchase agreement by and between
Seller or the Company and Turbine Supplier for the supply of turbines for the Project, in
form and substance satisfactory to Buyer.
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“Turbine Warranty and O&M Agreement” means the warranty agreement
between the Turbine Supplier and Seller or the Company regarding the WTG Warranty
and pursuant to which the Turbine Supplier agrees to provide operation, maintenance or
warranty work with respect to the Project.
“Turnover Package” means:
(a)
the WTG Turnover Package; and
(b)
all engineering, design, purchasing and other information relating
to the Infrastructure Facilities, including: (i) a drawing index; (ii) a reference
index; (iii) copies of Contractor’s and Subcontractors’ Permits; (iv) copies of all
purchase orders on Major Subcontractor’s equipment (non-priced) with addenda;
(v) Subcontractor information for equipment purchased (as received from
vendors) including instruction and maintenance manuals from Subcontractors;
(vi) one copy of the As Built Drawings and Documentation; (vii) training
manuals; (viii) electrical 1-line diagrams for the Infrastructure Facilities; (ix) a
cable and raceway schedule for the Infrastructure Facilities; (x) connection
report/loop diagrams for the Infrastructure Facilities; and (xi) a final list and
summary of the work performed by all Subcontractors and verification of the
payment of all amounts due to Turbine Supplier or any Subcontractor.
“Under Construction” means that Seller or the Company can establish by facts
and circumstances that construction of the Project has begun (and a continuous program
of construction is being maintained or continuous efforts are being made to advance
towards completion) as described in the IRS PTC Publication, such that the Project meets
the definition of a “qualified facility,” as used in Section 45 of the Code or any
substantively equivalent successor provision of the Code providing for a federal tax credit
determined by reference to renewable electric energy produced from wind resources.
“Under Construction Certificates” means the Initial Under Construction
Certificate and the Final Under Construction Certificate.
“Under Construction Plan” is defined in Section 11.1.1(a).
“Under Construction Opinions” means the Initial Under Construction Opinion
and the Final Under Construction Opinion.
“Updated Title Objections” is defined in Section 5.11.
“Updated Title Report” is defined in Section 5.11.
“Updated Survey” is defined in Section 5.11.
“Warranty Parts Inventory” means the warranty parts inventory described in the
Turbine Warranty and O&M Agreement and the EPC Agreement.
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“Weather Delays” means any time during a scheduled day of work at the Project
Site on which:
(a)
The erecting or commissioning of WTGs at the Project Site is
scheduled to occur; and
(i)
With respect to a day on which erection is scheduled to
occur, the main erection crane or the blade erection crane is unable to
operate due to actual winds with a speed at or in the vicinity of crane
boom tip-height or neighboring erected WTG hub height that [TRADE
SECRET DATA BEGINS
TRADE
SECRET DATA ENDS]; or
(ii)
With respect to a day on which commissioning is scheduled
to occur, the average wind speeds at hub-height of the relevant WTG are
[TRADE SECRET DATA BEGINS
TRADE SECRET
DATA ENDS]; or
(b)
other inclement weather, including impaired visibility, wind shear,
ice and ice storms, prevents or substantially hinders the safe performance of the
Work but that does not rise to the level of Extreme Weather.
“Wetlands Assessment” means the wetlands study with respect to the Property
prepared by a qualified consultant and delivered to Buyer in final form.
“Wind Data” means any and all wind speed data and other relevant wind
characteristics data included, or included by reference, on Schedule 6.17, or obtained by
or on behalf of Company, Seller or any other of its Affiliates or their Representatives in
respect of the Project, along with all supporting documentation.
“Wind Turbine Generator” or “WTG” means [TRADE SECRET DATA
BEGINS
TRADE SECRET DATA ENDS], manufactured by the Turbine
Supplier, to be supplied, delivered, assembled, erected and installed by the Turbine
Supplier, each equipped with a rotor with a diameter of [TRADE SECRET DATA
BEGINS
TRADE SECRET DATA ENDS]
including equipment, machinery, materials and consumable parts related thereto and the
following components: a tower, a turbine nacelle, turbine blades, controller (including
interconnecting cabling from the turbine nacelle to the ground controller), control panels,
converters, Var control technology supplied by the Turbine Supplier, wind vanes, FAA
lighting (if and as required), grounding, and anemometers, all as more particularly
described in the Technical Specifications.
“Work” means all work for the management of the construction of the Project, the
design, engineering, procurement, construction, Commissioning, start-up and turnover of
the Infrastructure Facilities and the procurement, delivery, assembly, erection,
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installation, Commissioning, start-up and turnover of the WTGs, which work and
services shall include all aspects of the work described in the Scope of Work set forth in
the EPC Agreement, the Construction Services and the provision of all materials,
equipment, machinery, tools, labor, transportation, administration and other services and
items required to complete and deliver the fully integrated and operational Infrastructure
Facilities, the fully assembled, installed, tested and operational WTGs and the Project, all
in accordance with the Turbine Supply Agreement, the Turbine Warranty and O&M
Agreement, the EPC Agreement and this Agreement.
“WTG Price” means [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
“WTG Shortfall” means a number equal to [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS] the number of WTGs that achieve WTG
Substantial Completion on or before the Closing Date.
“WTG Substantial Completion” means achievement of the following:
(a)
Contractor has achieved Commissioning and turnover of the
Electrical Works (including the installation of all grounding necessary to energize
the WTGs connected to the relevant electrical collection system circuit in
accordance with the requirements of the EPC Agreement), received a
Commissioning and Turnover Certificate and issued an Electrical Substantial
Completion Certificate to the Company with respect to such circuit that the
Company has accepted, in each case pursuant to the terms of the EPC Agreement;
(i)
Turbine Supplier has achieved Commissioning and
Turnover of WTGs for each such WTG connected to the relevant
electrical collection system circuit and received a Commissioning and
Turnover Certificate with respect to each such WTG and issued a WTG
Substantial Completion Certificate with respect to each such WTG to the
Company that the Company has accepted, in each case pursuant to the
terms of the Turbine Supply Agreement; and
(ii)
in the event Seller or the Company has satisfied clauses (a)
and (c) of the definition of Project Substantial Completion, with respect to
any WTGs subject to Section 9.5.3, the conditions set forth in the other
clauses of the definition of Project Substantial Completion shall have been
achieved with respect to such WTGs.
“WTG Substantial Completion Certificate” means a certificate in the form
attached to the EPC Agreement issued by the Contractor certifying as to the WTG
Substantial Mechanical Completion of a WTG.
“WTG Turnover Package” means the (a) O&M manuals, (b) the erection and
start-up manual including Turbine assembly drawings, erection diagrams, connection
diagrams for the WTGs and the SCADA system, details of all interface points and
connections and a cable schedule and (c) the SCADA system logic diagram.
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“WTG Warranty” means the warranty of the WTGs provided by the Turbine
Supplier pursuant to the Turbine Warranty and O&M Agreement. The WTG Warranty
shall include a serial defect provision applicable to the components acquired for the
Project through the Turbine Warranty and O&M Agreement mutually acceptable to the
Turbine Supplier, Seller and Buyer.
1.2.
Rules of Interpretation. Unless otherwise expressly provided or unless required
by the context in which any term appears:
(a)
the singular shall include the plural and the plural shall include the
singular; references to “Articles,” “Sections,” “Schedules,” or “Exhibits” (if any)
shall be to articles, sections, schedules or exhibits (if any) of this Agreement, as
the same may be amended, modified, supplemented or replaced pursuant to the
terms hereof from time to time;
(b)
all references to a particular entity shall include a reference to such
entity’s successors and permitted assigns;
(c)
the words “herein,” “hereof and “hereunder” shall refer to this
Agreement as a whole and not to any particular section or subsection of this
Agreement;
(d)
all accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles in the
United States of America, consistently applied;
(e)
references to this Agreement shall include a reference to all
Schedules and Exhibits hereto, including those to be attached or updated pursuant
to Section 3.1.2, as the same may be amended, modified, supplemented or
replaced from time to time;
(f)
references to any agreement, document or instrument shall mean a
reference to such agreement, document or instrument as the same may be
amended, modified, supplemented or replaced from time to time;
(g)
the use of the word “including” in this Agreement to refer to
specific examples shall be construed to mean “including, without limitation” or
“including but not limited to” and shall not be construed to mean that the
examples given are an exclusive list of the topics covered;
(h)
relative to the determination of any period of time, “from” means
“including and after,” “to” means “to but excluding” and “through” means
“through and including;”
(i)
references to applicable Laws shall mean a reference to such
applicable Laws as the same may be amended, modified, supplemented or
restated and be in effect from time to time, including rules and regulations
promulgated thereunder;
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(j)
unless otherwise specified to the contrary, the word “or” shall be
inclusive and shall have the meaning conveyed by “and/or,” and
(k)
references, directly or indirectly, to the WTGs or to the size of the
Project in MW shall be based on the nameplate capacity of [TRADE SECRET
DATA BEGINS
TRADE SECRET DATA ENDS].
The Parties collectively have prepared this Agreement, and none of the provisions hereof
shall be construed against one Party on the ground that such Party is the author of this
Agreement or any part hereof.
ARTICLE 2.
PURCHASE AND SALE OF MEMBERSHIP INTERESTS
2.1.
Purchase and Sale of Membership Interests. Upon the terms and subject to the
conditions set forth in this Agreement, on the Closing Date, Seller shall sell, convey, transfer,
assign, and deliver to Buyer, free and clear of all Encumbrances, and Buyer (or its designated
Affiliate) shall purchase from Seller, all of the Purchased Interests, which Purchased Interests
shall be sold, conveyed, transferred, assigned and delivered to Buyer for the consideration
specified in Section 2.2.
2.2.
Purchase Price; Assumption of Liabilities.
2.2.1 Purchase Price. Buyer shall pay to Seller pursuant to this Agreement
the Adjusted Purchase Price for the Purchased Interests. The Adjusted Purchase Price
shall be paid when due by wire transfer of immediately available funds to the account
specified in writing by Seller for such purpose or, if so requested in writing by Seller,
by such alternative means of delivery of immediately available funds or other method
of payment as is reasonably acceptable to Buyer. The Adjusted Purchase Price shall
be paid as follows:
(a)
[TRADE SECRET DATA BEGINS
(b)
TRADE SECRET DATA ENDS]
2.2.2 Excluded Liabilities. Except for Assumed Liabilities, as of the
Closing Date, the Company shall not be obligated to pay, perform or otherwise
discharge or be responsible or liable with respect to, (a) any Liabilities relating to the
Project or any present or former developer, owner or operator of the Project incurred
prior to the Closing Date, whether or not associated with, or arising from, any of the
Company Assets, and whether fixed, contingent or otherwise, known or unknown, or
(b) any other Liabilities whenever incurred described in clauses (i) – (vii) of the
definition of Assumed Liabilities (collectively, the “Excluded Liabilities”).
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2.2.3
BEGINS
Under Construction Determination. [TRADE SECRET DATA
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TRADE SECRET
DATA ENDS]
2.3.
Mechanics of Closing. The closing of the transactions contemplated by this
Agreement (the “Closing”) will take place at the offices of Dorsey & Whitney, 50 South Sixth
Street, Minneapolis, Minnesota at 9:00 a.m. on a mutually acceptable date within five (5)
Business Days following the satisfaction (or waiver) of the conditions set forth in Sections 3.3
and 4.2, (other than those conditions that by their nature are to be satisfied at the Closing), or at
such other place and on such other date as may be mutually agreed by Buyer and Seller (the date
on which the Closing actually occurs being referred to as the “Closing Date”; provided, however,
that if the satisfaction (or waiver) of the conditions set forth in Sections 3.3 and 4.2 (other than
those conditions that by their nature are to be satisfied at the Closing) occurs within five (5)
Business Days of the Guaranteed Completion Date, the Parties shall endeavor to cause the
closing to take place on or before the Guaranteed Completion Date. Any Closing shall be
effective as of 11:59 PM on the Closing Date.
2.4.
Closing Costs.
2.4.1 Expenses. Except as otherwise specified herein, each Party hereto
shall pay its own legal, accounting, out-of-pocket and other expenses incident to this
Agreement and to any action taken by such Party in preparation, negotiation,
execution and performance of this Agreement.
2.4.2
Prorations.
(a)
All rent, insurance premiums and other costs and expenses of the
Company relating to the ownership and operation of the Land Contracts relating
solely to WTGs that achieved WTG Substantial Completion, and the other
portions of the Project with respect to which Project Substantial Completion was
achieved, as of the Closing Date and the Real Property shall be prorated between
Seller and Buyer as of the Closing Date, so that Seller is responsible for the
prorated amounts for the period of time prior to the Closing Date, and Buyer is
responsible for the prorated amounts for the period of time from and after the
Closing Date. Without limiting the generality of Section 2.2.2 and for purpose of
clarity, Seller has the sole responsibility for making any option, construction or
other payments due to landowners pursuant to the Land Contracts which arise
prior to the Closing Date or that relate to WTGs that did not achieve WTG
Substantial Completion, and the other portions of the Project with respect to
which Project Substantial Completion was not achieved, on or prior to the Closing
Date.
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(b)
For the avoidance of doubt, Seller shall be responsible for crop
damage payments due under any Land Contract for crop damages caused prior to
the Closing Date or in connection with construction activities, regardless of when
the claim for such damages is made and Buyer shall be responsible for crop
damage payments due under any Land Contract relating solely to WTGs that
achieved WTG Substantial Completion, or to the other portions of the Project
with respect to which Project Substantial Completion was achieved, as of the
Closing Date for crop damages caused on or after the Closing Date unless such
damages are caused by construction activities.
(c)
From and after the Guaranteed Completion Date, Seller shall have
the right, upon sixty (60) days written notice to Buyer and the Company, to
request Buyer to cause the termination of any Land Contracts for which Seller has
sole continuing payment responsibility pursuant to Section 2.4.2(a). Within thirty
(30) days following receipt of such written notice, Buyer shall either (i) release
Seller from such continuing payment obligations (excluding any indemnity
obligations arising or accruing prior to the date of such release), or (ii) cause such
Land Contract to terminate.
2.4.3 Transfer Taxes. Seller shall be responsible for any transfer taxes and
any sales, use or other taxes imposed by applicable Law by reason of (a) the transfer
of the Purchased Interests to Buyer at the Closing; and (b) the purchase or other
acquisition of any of the Company Assets by, on behalf of or for the benefit of the
Company on or prior to the Closing, including all state and county Taxes or fees that
are payable in connection with the conveyance of the Real Property to the Company.
Buyer shall be responsible for any such Taxes imposed by applicable Law by reason
of the transfer of the Purchased Interests, the Land Contracts or other Company
Assets by the Company to Buyer after the Closing.
2.4.4 Post-Closing Land Payments. On or prior to the Closing Date, Seller
shall make all regularly scheduled rent payments under Land Contracts that will come
due during the sixty (60) day period following the Closing Date; provided, however,
that Buyer shall reimburse Seller for any such payments pursuant to Section 2.5.
2.4.5 Independent Accountant and Independent Engineer Costs. [TRADE
SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
2.5.
Post-Closing Statement.
2.5.1 Post-Closing Statement. Within sixty (60) days after the Closing Date,
Buyer will prepare and deliver to Seller a closing statement (the “Post-Closing
Statement”) of the Company as of the close of business on the Closing Date setting
forth Buyer’s calculation of (a) revenues and other amounts paid to the Company
following the Operational Date or that are payable to the Company in respect of
power sold by the Company prior to the Closing Date, in each case, that are for the
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account of Seller pursuant to Section 5.1, (b) payments made by Seller pursuant to
Section 2.4.4 (unless included in the calculation of clause (b) of the definition of the
Adjusted Purchase Price) and (c) any Excluded Liabilities incurred by the Company
following the Closing Date. Seller will provide Buyer such information as Buyer
may reasonably request in connection with its preparation of the Post-Closing
Statement. If the amounts payable to Seller exceed such Excluded Liabilities, then
Buyer will pay to Seller an amount equal to the excess, and if such Excluded
Liabilities exceed the amounts payable to Seller, then Seller will pay to Buyer an
amount equal to the excess (in either case, the “Post-Closing Adjustment”).
2.5.2 Payment of Post-Closing Adjustment. Unless Seller objects to the
amounts set forth in the Post-Closing Statement in accordance with Section 2.5.3,
payment of the Post-Closing Adjustment will be made within thirty (30) days after
Seller’s receipt of the Post-Closing Statement, together with interest at the Interest
Rate from the Closing Date to the date of payment of the Post-Closing Adjustment.
2.5.3 Post-Closing Adjustment Disputes. Within fifteen (15) days after
delivery of the Post-Closing Statement by Buyer to Seller, Seller may object in
writing to the amounts set forth in the Post-Closing Statement, stating in reasonable
detail its objections and providing its good-faith calculation of the objectionable
amount or amounts. Buyer will provide Seller such information as Seller may
reasonably request in connection with its review of the Post-Closing Statement. If
Seller fails to deliver notice of its objections within the fifteen (15) day period, Seller
will be deemed to have accepted Buyer’s calculation. If Seller objects to any
amounts set forth in the Post-Closing Statement, the Parties will attempt to resolve the
dispute by negotiation in good faith. If the Parties are unable to resolve the dispute
within fifteen (15) days of the date of delivery of Seller’s objection in writing, then
either Party may refer the dispute to an Independent Accountant mutually acceptable
to the Parties, and the Independent Accountant will settle the dispute as soon as
practicable. If Buyer and Seller are unable to agree on the choice of an Independent
Accountant, they will select a nationally recognized accounting firm by lot (after
excluding the regular outside accounting firms of Buyer, Seller and the Company).
The determination of the Independent Accountant will be final and binding on the
Parties, and the Parties will share equally the fees and disbursements of the
Independent Accountant. The Independent Accountant will resolve any such
objections and determine, in accordance with the criteria specified in the first
sentence of Section 2.5.1, the amounts to be included in the Post-Closing Statement.
The Parties will provide the Independent Accountant, within ten (10) days of its
selection, with a definitive statement of the position of each Party with respect to each
unresolved objection and will advise the accounting firm that the Parties accept the
Independent Accountant as the appropriate Person to interpret this Agreement for all
purposes relevant to the resolution of the unresolved objections. Buyer will provide
the Independent Accountant access to the Books and Records. The Independent
Accountant will have fifteen (15) days to carry out a review of the unresolved
objections and prepare a written statement of its determination regarding each
unresolved objection. The determination of the Independent Accountant will be set
forth in writing and will be conclusive and binding upon the Parties. Buyer will
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revise the Post-Closing Statement as appropriate to reflect the resolution of any
objections to the Post-Closing Statement pursuant to this Section 2.5.3.
2.5.4 Final Payment. Once any disputes in accordance with Section 2.5.3
have been resolved between the Parties or determined by the Independent
Accountant, then the Post-Closing Adjustment will be promptly paid to the Party
entitled to receive it as part of the Final Completion Payment, together with interest at
the Interest Rate from the Closing Date to the date of payment of the Post-Closing
Adjustment.
2.5.5 Allocation. Within one hundred twenty (120) days after the Closing
Date, Seller and Buyer shall agree upon the allocation of the Purchase Price to the
Company Assets. The Purchase Price shall be allocated among the Company Assets
by dollar amounts in accordance with (a) the categories set forth in Schedule 2.5.5
(the “Allocation Categories”) and (b) Section 1060 of the Code and any Treasury
Regulations promulgated thereunder, or any successor provisions. Buyer and Seller
agree that they shall each report the allocation of the Purchase Price in a manner
entirely consistent with such allocation in all tax returns and forms (including,
without limitation, Form 8594 which shall be filed with their respective federal
income tax returns for the taxable year in which the Closing occurs) and in the course
of any tax audit, tax review or tax litigation relating thereto.
2.6.
O&M Building Option. Buyer shall have the option, but not the obligation, until
the Effective Date to notify Seller that Buyer has no need for an operations and maintenance
building for the Project (the “O&M Option”). Buyer’s exercise of the O&M Option shall be
effective immediately upon written notice to Seller of the exercise of such option. If Buyer
exercises the O&M Option: (a) the Purchase Price shall be reduced by an amount equal to
[TRADE SECRET DATA BEGINS
TRADE
SECRET DATA ENDS]; (b) all activities with the respect to the Project shall proceed on an
understanding that there will not be an operations and maintenance building for the Project; (c)
the Fee Simple Deduction shall (i) be reduced by an amount equal to [TRADE SECRET DATA
BEGINS
TRADE SECRET DATA ENDS] and (ii) only be
applicable to Seller’s obligation to attempt to secure fee simple title to the Substation Real
Property; (d) all references herein to the O&M Facility Real Property or any other reference
based on the contemplated construction and operation of an operations and maintenance building
with respect to the Project, shall be deemed adjusted and, where applicable, of no further force
and effect, based on an understanding that there will not be an operations and maintenance
building for the Project; and (d) all other terms and conditions set forth in this Agreement shall
continue to apply unchanged with respect to the transactions contemplated hereby.
ARTICLE 3.
EFFECTIVENESS; BUYER’S CONDITIONS PRECEDENT TO EFFECTIVENESS;
BUYER’S CONDITIONS PRECEDENT TO THE CLOSING
3.1.
Effectiveness.
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3.1.1 Effective Date Conditions. The Parties agree and acknowledge that
except for the rights and obligations of the Parties set forth in [TRADE SECRET
DATA BEGINS
TRADE SECRET DATA ENDS] each of which shall be effective as of the Signing
Date, this Agreement shall not otherwise be effective until the conditions set forth in
[TRADE SECRET DATA BEGINS
TRADE
SECRET DATA ENDS] (the “Effective Date Conditions”) have been satisfied (or
waived in writing by the Party entitled to do so) and Buyer and Seller shall each have
executed and delivered an Effective Date Certificate in accordance with this Section
3.1.1. Within three (3) Business Days following the satisfaction of the Effective Date
Conditions each of Buyer and Seller shall deliver to the other a copy of the Effective
Date Certificate duly signed by an authorized representative of such Party.
3.1.2 Effective Date Schedules and Exhibits. Without limiting the effect of
Section 5.6, the Parties agree and acknowledge that the Effective Date Certificate
shall include as an attachment the Schedules and Exhibits that are to be delivered as
of the Effective Date (to the extent such Schedules and Exhibits are not delivered and
attached hereto as of the Signing Date), in the final form as agreed to the Parties in
accordance with the terms of this Agreement, as agreed to by the Parties pursuant to
Section 5.6. Neither Party shall have an obligation to deliver its Effective Date
Certificate unless all Schedules and Exhibits not agreed to as of the Signing Date
have been agreed to by the Parties.
3.2.
Buyer’s Conditions Precedent to Effectiveness. The obligation of
Buyer to execute the Effective Date Certificate shall be subject to fulfillment at or
prior to such date of each of the following conditions, except to the extent Buyer
waives such fulfillment in writing. The provision by Buyer to Seller of the Effective
Date Certificate in accordance with Section 3.1.1 shall evidence completion to the
satisfaction of Buyer or waiver by Buyer of completion of each of the Effective Date
Conditions set forth in this Section 3.2.
3.2.1 Permits. Except as provided in Section 5.12, Seller or the Company
shall have obtained all Permits required for the construction and commercial
operation of the Project in the name of the Company other than (a) any Permits that
are of a type that are routinely granted on application and would not normally be
obtained before the commencement of construction and which are listed on Part B of
Schedule 6.13, and (b) any Operating Permits. Each Permit set forth on Part F of
Schedule 6.13, to the extent any such Permit has been obtained, replaced, amended or
modified since the Signing Date, shall be in form and substance reasonably
acceptable to Buyer.
3.2.2 Permitting Opinion. Seller shall have delivered to Buyer the
Permitting Opinion with respect to the Project.
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3.2.3
(a)
Real Estate.
Land Contracts.
(i)
All of the Land Contracts shall be in full force and effect.
The Company shall have obtained and hold an IRS Form W-9 properly
completed and executed by each grantor under each of the respective
Land Contracts.
(ii)
[TRADE SECRET DATA BEGINS
TRADE
SECRET DATA ENDS]
(iii)
All third party occupancy rights, whether written or oral, in
or affecting the Property or any Land Contract, including farming and
hunting rights (but not including any Insured Over Third Party Mineral
Rights) (“Third Party Rights”), must be identified and subordinated to the
applicable Land Contracts, or a nondisturbance or non-interference
agreement in form and substance reasonably acceptable to Buyer shall
have been executed by each Person holding such Third Party Rights.
[TRADE SECRET DATA BEGINS
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(b)
Title Reports; Title Insurance Policy. Seller shall have delivered
or caused to be delivered to Buyer the Title Reports issued by the Title Company
as soon as practicable after the Signing Date. Within thirty (30) days after Seller
has delivered to Buyer the last of all of such Title Reports and the Surveys
required to be delivered pursuant to Section 3.2.3(c), Buyer shall provide Seller
with a title objection letter (the “Title Objection Letter”) setting forth (i) Buyer’s
objections to items identified in the Title Reports and the Surveys (collectively,
the “Title Objections”), (ii) a list of the required Buyer Affirmative Coverage, (iii)
a list of the mortgagees and other third parties from whom Buyer requires Seller
to obtain non-disturbance and attornment agreements substantially in the form of
Exhibit E hereto (collectively, the “Non-Disturbance Agreements”) or otherwise
sufficient to enable the Title Company to remove the related exceptions from
Schedule B of the Title Reports or to issue endorsements to the Title Policy
affirmatively insuring the Company against loss arising out of the mortgages or
other Encumbrances disclosed in those Schedule B exceptions addressed by such
Non-Disturbance Agreements, and (iv) a list of third parties from whom Buyer
requires Seller to obtain estoppel certificates, affidavits or consents, including any
required Estoppel Letters pursuant to Section 3.2.3(a)(iii) (collectively, the
“Curative Documents”) in a form sufficient to cause the Title Company to
remove or to issue an affirmative endorsement against loss arising out of any
exception from Schedule B that is not a Permitted Encumbrance and to satisfy
Seller’s obligations in respect of Section 3.2.3(a). To assist Seller with expediting
its curative efforts required to address the Title Objections, Buyer will, as
promptly as practicable after the Signing Date and after the delivery by Seller to
Buyer of the Title Reports and the Surveys, notify Seller from time to time in
good faith of exceptions to title that Buyer reasonably believes will be Title
Objections or are likely to require Non-Disturbance Agreements or Curative
Documents. Notwithstanding the foregoing, Seller shall not be required to obtain
a Non-Disturbance Agreement from any oil and gas lessee where the term of the
lease has expired and Seller obtains an affidavit of non-production or otherwise
causes the Title Company to insure over the oil and gas lease in the Title Policy.
Seller will use its commercially reasonable efforts to cure each Title Objection
and take all commercially reasonable steps required by the Title Company to
eliminate each Title Objection as an exception to the Title Reports, or to issue an
endorsement to the Title Policy providing affirmative coverage to such exceptions
that are the basis for such Title Objection. Any Title Objection that the Title
Company is willing to insure over on terms acceptable to Buyer is referred to as a
“Permitted Title Exception.” Any Permitted Title Exception, and any matter
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contained in the Title Reports that is not objected to by Buyer in the manner
aforesaid, will be deemed to be acceptable to Buyer and shall constitute a
Permitted Encumbrance. Except for any such Permitted Title Exception or
Permitted Encumbrance, prior to the Effective Date (and as a condition to Buyer’s
obligation to Closing), all Title Objections shall have been eliminated as an
exception to the Title Reports and all such Non-Disturbance Agreements and
Curative Documents, each in form and substance reasonably acceptable to Buyer,
shall have been executed and delivered and true, correct and complete copies
thereof shall have been delivered to Buyer. Seller shall have caused the Title
Company to issue to the Company an American Land Title Association (ALTA)
Form B 2006 Owner’s Title Insurance Policy (the “Title Policy”) (deleting the
arbitration clause) for the property covered by the Land Contracts and the Real
Property which policy (A) will be issued in an amount consistent with the
requirements imposed by Seller’s lenders under the financing described in Section
4.1.1, but in no case less than the assessed value of the Land Contracts (or the
Company’s interest in the real property subject thereof, as applicable) and the
Real Property, (B) shall be subject only to the Permitted Encumbrances, (C) shall
show the Company as fee owner of the Real Property and as the sole holder of all
rights, title and interest granted under the Land Contracts (excluding the Land
Acquisition Contracts), (D) provide for full extended coverage over all general
title exceptions contained in such policies, and (E) include the following special
endorsements if required by Buyer and available for issuance in the State of
Minnesota: zoning, access, restrictions, utility, comprehensive, survey, tax parcel,
contiguity, subdivision, successor-in-interest and Sears endorsement, and location
(each of which shall be in the forms attached hereto in Schedule 3.2.3(b)) and
such other endorsements available in Minnesota as Buyer may request (the “Title
Policy Endorsements”)) and such additional affirmative coverage as Buyer may
reasonably request (collectively, the “Buyer Affirmative Coverage”).
Notwithstanding anything to the contrary herein, if the Title Policy includes a
non-disturbance endorsement in form and substance satisfactory to Buyer insuring
over the exercise of any Third Party Rights with respect to mineral interests, such
interests shall be deemed not to constitute Encumbrances for any purpose in this
Agreement (“Insured Over Third Party Mineral Rights”). Seller shall pay for all
Title Reports (and any amendments, updates and supplements thereto) and all
recording charges and expenses incurred in connection with recording any Land
Contracts (or amendments or memoranda thereof), any Non-Disturbance
Agreements, any Curative Documents and any Assignment and Assumption
Agreements and all premiums, fees and related charges incurred for the Title
Policy.
(c)
Surveys. With respect to each parcel of the Property that will be
insured by the Title Policy pursuant to Section 3.2.3(b), Seller, at its sole cost,
will, as soon as practicable after the date of the Agreement, have furnished to
Buyer a current survey of the real property covered by the Land Contracts and the
Real Property in form reasonably acceptable to Buyer and certified to Buyer,
Company, the Title Company and Buyer’s lender, if any, prepared by a licensed
surveyor in the State of Minnesota and conforming to 2011 ALTA/ACSM
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Minimum Detail Requirements for Land Title Surveys (including items 1, 2
through 6, 7(a), 7(b), 8, 11(b), 13, 14 and 16 through 19 of Table A) and
disclosing the location of all existing improvements, plottable easements,
encroachments, roadways, utility lines, set back lines (including setbacks required
for compliance with noise limitations) and other matters shown customarily on
such windpark surveys, and showing access affirmatively to public streets and
roads (the “Survey”). The Survey shall include an overlay of the proposed
Facilities to be installed on the Property as indicated by the Site Plan.
(d)
Reinsurance. Within five (5) Business Days of Seller’s delivery of
the Title Reports, Seller shall cause to be delivered to Buyer a reinsurance
proposal containing reinsurers and reinsurance amounts acceptable to Buyer,
which reinsurance shall be issued pursuant to a facultative reinsurance agreement
acceptable to Buyer.
(e)
Real Property Interests. The Land Contracts and the Real Property
owned by the Company on such date shall:
(i)
comprise all of the real property interests and other rights
in the Property that are necessary in connection with the acquisition,
development, construction, installation, interconnection, completion,
operation and to the extent reasonably foreseeable, the maintenance of
the Project, as applicable, in accordance with all Laws; and
(ii)
be sufficient to enable the Project to be located,
constructed, interconnected, and operated as contemplated hereunder; and
provide legal and physical ingress and egress rights to and from a public
right-of-way for the construction, operation and maintenance of the
Project.
3.2.4
Environmental.
(a)
None of Company, Seller or Seller’s other Affiliates shall have any
Liability for prior non-compliance with Environmental Laws related to the Project
and shall be in full compliance with all Environmental Laws relating to the
Project, including with respect to impacts to wildlife (except as provided in
Section 5.12).
(b)
Buyer shall have accepted the Bird and Bat Conservation Strategy
pursuant to Section 5.12.
3.2.5 Reports. Seller shall have delivered to Buyer a copy of the Reports
(which shall be issued by qualified firms reasonably acceptable to Buyer) in final
form and that are reasonably satisfactory to Buyer.
3.2.6 Representations and Warranties. The representations and warranties
of Seller set forth in ARTICLE 6 (other than those which are only given on the
Closing Date) shall be true and correct as of the Effective Date. Buyer shall be
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satisfied in all respects with Seller’s Schedules that are not attached in final form to
this Agreement upon execution of this Agreement.
3.2.7
Buyer Approvals.
(a)
Seller has delivered to Buyer and Buyer has approved (such
approval not to be unreasonably withheld) the EPC Agreement (including the
construction schedule), the Turbine Supply Agreement and the Turbine Warranty
and the O&M Agreement.
(b)
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3.2.8
Delivery of Letter of Credit. [TRADE SECRET DATA BEGINS
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DATA ENDS]
3.2.9 Commission Approvals. The Commission Approvals shall have been
obtained or waived by Buyer as provided in Section 5.13.
3.2.10 FERC Approval. The transactions contemplated by this Agreement
shall have been approved by a Final Order by FERC under section 203 of the Federal
Power Act.
3.2.11 HSR Approval. All applicable waiting periods (and any extensions
thereof) under the HSR Act shall have expired or otherwise been terminated if the
lenders under the financing described in Section 4.1.1 require that (a) the required
filings under the HSR Act have been made and (b) the applicable waiting period shall
have expired or otherwise been terminated as a condition to advancing funds for
construction of the Project.
3.2.12 [TRADE SECRET DATA BEGINS
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3.2.13 Guaranty. [TRADE SECRET DATA BEGINS
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3.2.14 Covenants. Seller shall have performed and complied in all material
respects with the agreements, covenants and obligations required by this Agreement
to be performed or complied with by Seller at or before the Effective Date.
3.2.15 Certain Third Parties. Buyer and Seller shall have agreed upon the
Independent Engineer and the Independent Tax Attorney (if the firm designated in the
definition of Independent Tax Attorney is unable or unwilling to act in such capacity).
3.2.16 NSP Corporate Approval. Buyer shall have received approval from
(a) its board of directors and (b) Xcel Energy Inc., its sole shareholder, in each case,
to consummate the transactions contemplated by the terms of this Agreement (the
“NSP Corporate Approval”).
3.3.
Buyer’s Conditions Precedent to Closing. The obligation of Buyer to
consummate the transactions contemplated by this Agreement shall be subject to fulfillment at or
prior to the Closing of each of the following conditions, except to the extent Buyer waives such
fulfillment in writing:
3.3.1 Deliveries by Seller at Closing. Upon the terms and subject to the
conditions set forth in this Section 3.3, on or before the Closing Date Seller shall
deliver, or shall cause to be delivered, to Buyer the following:
(a)
Assignment of Purchased Interests. Two (2) original counterparts
of the Assignment in substantially the form of Exhibit C hereto (the “Membership
Interest Assignment”), conveying to Buyer (or its designated Affiliate) of all of
Seller’s right, title and interest in the Company, including the Purchased Interests.
(b)
Consents. Seller shall deliver to Buyer original executed copies of
the Project-related consents that may be reasonably requested by Buyer to be
provided by Seller in accordance with Section 8.3, each in a form reasonably
satisfactory to Buyer.
(c)
certificates:
Certificates. Seller shall furnish Buyer with the following
(i)
A certificate executed by the Secretary or an Assistant
Secretary of Seller, certifying as of the Closing Date (A) a true and
correct copy of the corporate action of Seller authorizing the execution,
delivery and performance of this Agreement and the other Seller
Documents to be executed by it, and the consummation of the
transactions contemplated hereby and thereby and (B) incumbency
matters.
(ii)
An affidavit from Seller, stating, under penalty of perjury,
Seller’s United States taxpayer identification number and that Seller is
not a foreign person, for purposes of Section 1445(b)(2) of the Code and
Treasury Regulation § 1.1445-2(b)(2)(iv)(B).
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(iii) A certificate executed by an officer of Seller, certifying as
of the Closing Date that, other than any of Seller’s representations and
warranties set forth in ARTICLE 6 which by their terms speak only as to
the Effective Date, (A) Seller’s Absolute Representations are true and
correct in all respects, and Seller’s Material Representations are true and
correct in all material respects.
3.3.2
Representations and Warranties.
(a)
Other than any of Seller’s representations and warranties set forth
in ARTICLE 6 which by their terms speak only as to the Effective Date: (i)
Seller’s Absolute Representations shall be true and correct in all respects as of the
Closing Date and (ii) Seller’s Material Representations shall be true and correct in
all material respects as of the Closing Date; provided, however, that, if on the
Closing Date any of Seller’s Material Representations are (A) true and correct in
all material respects but are not true and correct in all respects or (B) any of
Seller’s Material Representations are not true and correct in all material respects
but the cost to cure all such breaches in the aggregate does not exceed [TRADE
SECRET DATA BEGINS
TRADE SECRET DATA ENDS]and
(1) no Material Adverse Effect has occurred, (2) such breach of Seller’s Material
Representations can reasonably be cured within six (6) months following the
Closing Date, and (3) Seller provides notice in writing to Buyer that it intends to
cure such breach within six (6) months following the Closing Date, (such event a
“Representation Holdback Event”) then:
(i)
this condition shall be deemed to be satisfied for the
purposes of whether the Closing shall be required to occur;
(ii)
Buyer may withhold the Representation Holdback Amount
until such breach has been cured; and
(iii) Seller shall use commercially reasonable efforts to cure
such breach as soon as practicable but in no event later than six (6)
months after the Closing Date.
If such breach is cured within six (6) months after the Closing Date, Buyer shall
pay to Seller the Representation Holdback Amount within five (5) Business Days
of such breach being cured. If Seller fails to cure such breach within six (6)
months after the Closing Date, Buyer’s sole remedy hereunder shall be to retain
the Representation Holdback Amount.
(b)
The “Representation Holdback Amount” [TRADE SECRET
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3.3.3 Permits. Seller shall have obtained all Operating Permits in the name
of the Company. Each Permit set forth on Parts A and F of Schedule 6.13, to the
extent any such Permit has been obtained, replaced, amended or modified since the
Effective Date, shall be in form and substance reasonably acceptable to Buyer.
3.3.4
Completion Certificates.
(a)
Seller shall furnish Buyer with true and complete copies of the
Project Substantial Completion Certificate, the WTG Substantial Completion
Certificate for each WTG, the Commissioning and Turnover Certificate for each
WTG, the Electrical Substantial Completion Certificate, the Mechanical
Completion Certificate and the Foundation Completion Certificate.
(b)
As of and following the Guaranteed Completion Date, if Buyer or
an Affiliate of Buyer is the Transmission Owner and, but for Excused
Interconnection Delays, (i) the conditions set forth in this Section 3.3 would have
been fulfilled or satisfied, (ii) WTG Substantial Completion would have occurred
as to any WTG or (iii) Project Substantial Completion would have occurred,
Seller shall have the right, but not the obligation, to elect upon notice to Buyer to
deem that (1) the conditions set forth in this Section 3.3 have been satisfied, (2)
WTG Substantial Completion has occurred as to the applicable WTGs, or (3)
Project Substantial Completion has occurred, as the case may be, solely for
purposes of this Section 3.3 and subject to Section 9.5.3. Such notice shall
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include all supporting documentation and a certificate from the Independent
Engineer that the conditions set forth in Section 3.3 have been, or would have
been, satisfied but for the Excused Interconnection Delays.
3.3.5 No Material Adverse Effect. There shall be no Material Adverse
Effect existing as of the Closing Date. For the avoidance of doubt, any Material
Adverse Effect occurring between the Effective Date and the Closing Date, and any
breach of any representation or warranty, which has been cured prior to the Closing
Date shall not be deemed to be a Material Adverse Effect, or breach, as the case may
be, which exists as of the Closing Date.
3.3.6 HSR Approval. All applicable waiting periods (and any extensions
thereof) under the HSR Act shall have expired or otherwise been terminated.
3.3.7 Company Assets. As of the Closing Date, (a) the Company has
acquired the Company Assets and neither Seller nor the Company shall have sold,
assigned, transferred or otherwise disposed of any of the Company Assets; (b) the
Company owns all of the Company Assets and the Company has not suffered any
theft, damage, removal, destruction or casualty loss of any of the Company Assets
(except, in the case of (a) or (b), assets that have been repaired or replaced with
equivalent assets); and (c) the Company Assets are not subject to any Encumbrance,
except for Permitted Encumbrances.
3.3.8 Project Warranties. As of the Closing Date each Project Warranty
shall (a) be in full force and effect for the benefit of the Company, (b) provide that it
may be subsequently assigned to Buyer, at Buyer’s discretion, and (c) continue for a
period of two (2) years from the Closing Date. Buyer acknowledges and agrees that
the Turbine Warranty and O&M Agreement may require that the Turbine Supplier
provide operation and maintenance services to the Company during the warranty
period and that Buyer shall be responsible for the costs of such services.
3.3.9
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3.3.10 Bring-Down of Permitting Opinion. Seller shall have delivered to
Buyer a “bring-down” version of the Permitting Opinion showing no material
changes to the Permitting Opinion.
3.3.11 Guaranty. The Guaranty shall be in full force and effect and shall not
have been modified, rescinded or revoked.
3.3.12 Real Estate.
(a)
All of the Land Contracts shall be in full force and effect.
(b)
If required pursuant to the Easement Agreement or reasonably
requested by Buyer, Seller shall have caused each Easement Agreement to have
been amended in accordance with its terms to show the exact location of all wind
farm improvements located on the real property subject to each respective
Easement Agreement (the “Final Layout Amendment”).
(c)
Seller shall have delivered to Buyer, in a form reasonably
acceptable to Buyer and agreed upon by Buyer and Seller prior to the Effective
Date, an updated Estoppel Letter from each Person that is a party to the Land
Contracts which shall be dated not more than forty-five (45) days prior to the
Closing Date.
(d)
Except for any Permitted Encumbrances, all Updated Title
Objections shall have been eliminated as an exception to the Updated Title
Reports and all Non-Disturbance Agreements and Curative Documents required
pursuant to Section 5.11, each in form and substance reasonably acceptable to
Buyer, shall have been executed and delivered and true, correct and complete
copies thereof shall have been delivered to Buyer.
(e)
Seller shall have caused the Title Company to issue to the
Company an American Land Title Association (ALTA) Form B 2006 Owner’s
Title Insurance Policy (deleting the arbitration clause) for the property covered by
the Land Contracts and the Real Property which policy will be (i) issued in an
amount equal to [TRADE SECRET DATA BEGINS
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SECRET DATA ENDS] or a lesser amount as may be mutually agreed between
the Parties and (ii) otherwise substantially equivalent to the Title Policy.
3.3.13 Covenants. Seller shall have performed and complied in all material
respects with the agreements, covenants and obligations required by this Agreement
to be performed or complied with by Seller at or before the Closing Date.
ARTICLE 4.
SELLER’S CONDITIONS PRECEDENT TO EFFECTIVENESS; SELLER’S
CONDITIONS PRECEDENT TO THE CLOSING
4.1.
Seller’s Conditions Precedent to Effectiveness. The obligation of Seller to
execute the Effective Date Certificate shall be subject to fulfillment at or prior to such date of
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each of the following conditions, except to the extent Seller waives such fulfillment in writing.
The provision by Seller to Buyer of the Effective Date Certificate in accordance with Section
3.1.1 shall evidence completion to the satisfaction of Seller or waiver by it of completion of each
of the Effective Date Conditions set forth in Section 4.1.
4.1.1 Financing. The Company shall have entered into binding documents
for the provision of debt and/or equity financing to the Company on terms and
conditions satisfactory to Seller in an amount sufficient for the Company to construct
the Project and perform its obligations to achieve Project Substantial Completion
under this Agreement for an aggregate nameplate capacity of 200 MW, including its
obligations under the EPC Agreement and the Turbine Supply Agreement.
4.1.2 Representations and Warranties. The representations and warranties
of Buyer set forth in ARTICLE 7 (other than those which are only given on the
Closing Date) shall be true and correct as of the Effective Date. Seller shall be
satisfied in all respects with Buyer’s Schedules that are not attached in final form to
this Agreement upon execution of this Agreement.
4.1.3 Commission Approvals. Buyer has obtained the Commission
Approvals or Buyer has waived obtaining Commission Approvals, and delivered to
Seller the opinions, as provided in the last sentence of Section 5.13.
4.1.4 FERC Approval. The transactions contemplated by this Agreement
shall have been approved by a Final Order by FERC under section 203 of the Federal
Power Act.
4.1.5 HSR Approval. All applicable waiting periods (and any extensions
thereof) under the HSR Act shall have expired or otherwise been terminated if the
lenders under the financing described in Section 4.1.1 require that (a) the required
filings under the HSR Act have been made and (b) the applicable waiting period shall
have expired or otherwise been terminated as a condition to advancing funds for
construction of the Project.
4.1.6 Market Based Rate Authority and EWG Status. The Company shall
have (i) received a Final Order from the FERC (or from the FERC’s staff, pursuant to
delegated authority) authorizing the Company to sell electricity at market-based rates,
and (ii) have filed a notice of self-certification that it qualifies as an “exempt
wholesale generator” within the meaning of the Public Utility Holding Company Act
of 2005 (“PUHCA”), and deemed granted by operation of law because FERC took no
action within sixty days after the notice of self-certification was filed pursuant to
Section 366.7 of FERC’s regulations implementing PUHCA, or the Company shall
have otherwise received a Final Order from FERC determining that the Company
qualifies as an exempt wholesale generator within the meaning of PUHCA.
4.1.7 Covenants. Buyer shall have performed and complied in all material
respects with the agreements, covenants and obligations required by this Agreement
to be performed or complied with by Buyer at or before the Effective Date.
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4.1.8 Certain Third Parties. Buyer and Seller shall have agreed upon the
Independent Engineer and the Independent Tax Attorney (if the firm designated in the
definition of Independent Tax Attorney is unable or unwilling to act in such capacity).
4.1.9 NSP Corporate Approval. Buyer shall have received the NSP
Corporate Approval.
4.2.
Seller’s Conditions Precedent to Closing. The obligation of Seller to consummate
the transactions contemplated by this Agreement shall be subject to fulfillment at or prior to the
Closing of each of the following conditions, except to the extent Seller waives such fulfillment in
writing:
4.2.1 Deliveries by Buyer Prior to the Project Closing. Upon the terms and
subject to the conditions set forth in this Section 4.2, on or before the Closing Date,
Buyer shall deliver, or shall cause to be delivered to Seller, the following:
(a)
Consideration. Buyer shall have delivered to Seller the Closing
Payment in accordance with Section 2.2.1(a).
(b)
Certificates. Buyer shall have furnished Seller with the following
certificates executed by the Secretary or Assistant Secretary of Buyer:
(i)
A certificate certifying as of the Closing Date (A) a true
and correct copy of the corporate action of Buyer authorizing the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby and thereby as of
the Closing, and (B) incumbency matters.
(ii)
Such other certificates, documents and instruments that
Seller reasonably requests for the purpose of (A) evidencing the accuracy
of Buyer’s representations and warranties, (B) evidencing the
performance and compliance by Buyer with the agreements contained in
this Agreement, (C) evidencing the satisfaction of any condition referred
to in this Section 4.2 or (D) otherwise facilitating the consummation of
the transactions contemplated by this Agreement.
4.2.2 Representations, Warranties and Covenants of Buyer. Buyer shall
have performed all agreements and covenants required hereby to be performed by it
prior to, on or as of the Closing Date and the representations and warranties of Buyer
set forth in ARTICLE 7 shall be true and correct as of the Closing Date.
4.2.3 HSR Approval. All applicable waiting periods (and any extensions
thereof) under the HSR Act shall have expired or otherwise been terminated.
4.2.4 Covenants. Buyer shall have performed and complied in all material
respects with the agreements, covenants and obligations required by this Agreement
to be performed or complied with by Buyer at or before the Closing Date.
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ARTICLE 5.
PRE-CLOSING COVENANTS
5.1.
Seller Pre-Closing Actions. Seller shall cause the Company to, develop and
complete the Project and cause the Project to be engineered, designed, constructed,
commissioned, tested, operated and maintained in accordance with the Site Plan, Applicable
Standards, the Turbine Supplier’s specifications and recommendations pursuant to the Turbine
Supply Agreement, the Turbine Warranty and O&M Agreement, the Technical Specifications,
the EPC Agreement, the Project Quality Assurance Plan and this Agreement. Neither Seller nor
the Company shall amend, modify or supplement, or waive any provision or consent to any
variance in the terms thereof, any of the Turbine Supply Agreement, Turbine Warranty and
O&M Agreement, EPC Agreement, Interconnection Agreement, the Technical Specifications,
the Project Quality Assurance Plan, following the Effective Date, any Permit set forth on Part A
of Schedule 6.13 or, after the Signing Date and prior to the Effective Date, any Permit set forth
on Part F of Schedule 6.13 without the prior written consent of Buyer, other than price increases
that are borne by Seller. In designing and constructing the Project, Seller shall cause the
Company to ensure that each WTG is either in a location designated as a turbine location on the
Site Plan or in a location otherwise agreed between Buyer and Seller (such agreement by Buyer
not to be unreasonably withheld), provided that Seller shall have the right to cause the Company
to relocate a WTG without the agreement of Buyer if such WTG will be located within the
location identified in the FAA Determination of No Hazard to Air Navigation and in any event
less than twenty-five (25) feet from the location shown on the Site Plan and such location is
permitted by the respective Easement Agreement. For the avoidance of doubt, nothing in this
Section 5.1 shall be construed as modifying Seller’s obligation under this Agreement to cause the
Company to achieve Project Substantial Completion on or before the Guaranteed Completion
Date. Seller shall cause any temporary meteorological towers (but not the Meteorological
Stations) to be removed from the site prior to the Final Closing Date. Seller shall be responsible
for all costs associated with developing, engineering, designing, constructing and commissioning
the Project and all costs of operating and maintaining the Project prior to the Closing Date and
Seller shall be entitled to receive and retain all revenues and other amounts received in respect of
power sold by the Company prior to the Closing and all emissions allowances or credits,
renewable energy credits, green tags, or other environmental or financial attributes of the
Facilities, if any, accruing prior to the Closing.
5.2.
Notification of Status of Pre-Closing Actions. Seller shall regularly communicate
and consult with Buyer regarding the continuing development, design, engineering, construction
and commissioning of the Project, and Seller shall in good faith consider Buyer’s input and
comment with respect to any matters that may arise in respect of such continued development,
provided that Seller shall have no obligation to perform in accordance with such input or
comment if it increases in any manner Seller’s express performance obligations under this
Agreement. Without limiting the generality of the foregoing, Seller shall keep Buyer reasonably
apprised with respect to the status of each of the actions taken or required to be taken by Seller
pursuant to Section 5.1 or Section 5.3, including (a) providing Buyer with a weekly tracking
sheet to show Seller’s progress in (i) the acquisition of Land Contracts, Easement Amendments,
Final Layout Amendments, Estoppel Letters, Non-Disturbance Agreements, Curative
Documents, Real Estate and Permits, (ii) the clearance of Title Objections and Updated Title
Objections and (iii) the construction and commissioning of the Project and (b) participating in a
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weekly Project status call with Buyer and its representatives at times that are mutually approved
by Seller and Buyer. Seller also agrees to provide Buyer with any additional information and
access to Seller’s employees or any Person performing Seller’s obligations under Section 5.1 or
Section 5.3 for Seller as may be reasonably requested by Buyer in connection with the
completion of the tasks set forth in or performance of Seller’s obligations under this ARTICLE
5.
5.3.
Other Seller Actions. Throughout the period prior to the Closing Date, Seller
shall continue to pursue diligently Project activities including those necessary to satisfy all
Project-related conditions to the Closing. Seller shall provide to Buyer, as promptly as
practicable after receipt thereof, copies of any documents that are obtained, produced, generated
or entered into by Seller or any of its Affiliates in connection with the Project (other than
attorney-client communications or work product), to the extent not furnished to Buyer prior to
the Effective Date, including the following:
5.3.1 Reports, Etc. Any testing or investigative results, audit reports,
assessments, analyses, Permits, applications, studies, wind, geo-technical or other
data or reports that relate to the Project prepared for or received by and in the
possession and control of Seller or its Affiliates, including supplements to any of the
Reports, and any notices or other written communications received from the FAA or
any other Authority relating to the subject matter of any of the Reports;
5.3.2 Design Documents. Any drawings or other design documents
generated by or otherwise obtained by Seller, Company, Contractor or any of their
Affiliates;
5.3.3 Land Contracts. Any Land Contracts or other Contracts obtained by
Seller in connection with the development, construction or operation of the Project,
and copies of any notices or other communications delivered to or received from the
other parties to, or that affect, any such Land Contracts or other Contracts, including
notice of any Third Party Rights; and
5.3.4 Permits. Any Permits obtained by the Company or Seller that pertain
to the development, design, engineering, construction, commissioning, ownership or
operation of the Project.
5.3.5 Anticipation of Advance Closing. Seller shall promptly notify Buyer
in the event Seller anticipates the conditions to Closing set forth in Section 3.3 will be
satisfied prior to the Target Closing Date, provided that such notice shall occur at
least 60 days prior to date upon which Seller anticipates such conditions shall be
satisfied.
5.4.
Notification of Completion or Failure of Conditions. Each Party to this
Agreement will promptly notify the other Party of any satisfaction or failure of conditions under
this Agreement; and each Party shall keep the other Party reasonably apprised with respect to the
status of satisfaction of the notifying Party’s obligations hereunder.
5.5.
Inspection Rights; O&M Building.
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5.5.1 Inspection Rights. Buyer or Buyer’s authorized representative may,
but shall not be obligated to, observe and inspect all aspects of the Work, and Seller
hereby authorizes Buyer and Buyer’s authorized representatives to maintain
personnel at the Site, continuously, at any time or from time to time, for such
purposes. No observation or inspection by Buyer or Buyer’s representatives, nor any
election to not observe or inspect, nor any acceptance or approval of the Work, in
whole or in part, shall relieve Seller of its obligations under this Agreement.
5.5.2
O&M Building.
(a)
Prior to completion of the construction of the operations and
maintenance building for the Project, Seller shall provide, or cause Contractor to
provide, temporary facilities at the on-site construction office complex for
Buyer’s use. Such facilities shall be a furnished, heated, air-conditioned
doublewide construction trailer with electricity, phone system/phone lines, fax
line, hard wired high speed internet service (if available), potable water, sewer
and sanitary facilities. Such trailer shall be in close proximity to Contractor’s
temporary site office facilities.
(b)
Upon completion of the construction of the operations and
maintenance building for the Project, Seller will provide Buyer and Buyer’s
authorized representatives access thereto and use thereof prior to the Closing
Date, and Seller hereby authorizes such access and use; provided, however, that
(i) Buyer and its representatives shall only be permitted to enter and use such
operations and maintenance building to the extent that such entry and use does not
interfere with Seller’s ability to complete any of the Work, (ii) Buyer’s or Buyer’s
representatives access to or use of the operations and maintenance building shall
not relieve Seller of its obligations under this Agreement, and (iii) Buyer’s right to
access or use such building pursuant to the terms of this Section 5.5.2 shall
terminate on the Guaranteed Completion Date if the Closing has not occurred by
such date.
5.5.3 Safety; Compliance with Law. In connection with Buyer’s rights
under Section 5.5.1 and Section 5.5.2, Buyer and Buyer’s authorized representatives
(a) shall comply with all Laws and all Site safety rules of which Seller has made
Buyer or Buyer’s authorized representative aware and (b) shall not interfere with
Seller’s or any Contractors’ or Subcontractors’ performance of the Work.
5.6.
Cooperation Prior to Effective Date. The Parties acknowledge that [TRADE
SECRET DATA BEGINS
TRADE SECRET DATA ENDS], depending on the final terms of the EPC Agreement
and Turbine Supply Agreement, it may be desirable in order to avoid confusion to conform
certain defined terms in this Agreement to the definitions of equivalent terms in the EPC
Agreement and Turbine Supply Agreement, as applicable. [TRADE SECRET DATA BEGINS
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TRADE SECRET DATA ENDS] Any changes in the Exhibits or Schedules, or the form and
content of any Exhibits and Schedules not attached to this Agreement, or any changes to any
defined terms in this Agreement, shall be subject to the approval of each Party, which approval
shall be in the sole discretion of the Party giving the approval.
5.7.
Additional Reports. Seller shall deliver to Buyer no later than ten (10) Business
Days prior to the Effective Date true, correct and complete copies of the final form of any
Reports designated on Schedule 6.19 as preliminary, as pending a final determination of
necessity and which has been determined as necessary, or as otherwise not capable of being
prepared until a later stage of the Project. In the event a wetlands delineation is determined
necessary for inclusion in the Wetlands Assessment, a letter of concurrence with the wetlands
delineation from the Army Corps of Engineers shall be delivered to Buyer prior to the Closing
Date. In the event there is a change in any findings or conclusions of a Report delivered and
accepted as satisfactory by Buyer prior to the Effective Date, Seller shall redeliver to Buyer no
later than ten (10) Business Days prior to the Closing Date true, correct and complete copies of
the final form such Report as revised to address such changes (any such redelivered Reports,
together with all other Reports delivered to Buyer pursuant to this Section 5.7, the “Additional
Reports”). Buyer shall notify Seller prior to the Closing Date if, in the exercise of Buyer’s
reasonable discretion, Buyer believes the facts disclosed in the Additional Reports constitute a
Material Adverse Effect. If Seller disagrees with such determination by Buyer, the Independent
Engineer will make such determination and the decision of the Independent Engineer shall be
conclusive and binding upon the Parties.
5.8.
Registrations and Qualifications. Seller shall give Buyer written notice of the
anticipated date of Interconnection not later than ninety (90) days and not sooner than one
hundred twenty (120) days prior to such date. Until Buyer receives such notice, it shall have no
obligations under this Section 5.8.
5.8.1 NERC Registrations and Qualifications. Buyer agrees to prepare
reliability protocols and standards for the operation of the Project in accordance with
the requirements of the North American Electric Reliability Corporation (“NERC”)
for utilization during the period from the date of Interconnection until the Guaranteed
Completion Date (or earlier termination of this Agreement). Buyer also agrees to
assume the responsibility for compliance with the requirements applicable to the
NERC “Generator Owner” and “Generator Operator” functions for the Project and to
take the steps necessary, if any, to register itself as the “Generator Owner” and
“Generator Operator” of the Project during the period from the date of
Interconnection until the Guaranteed Completion Date (or earlier termination of this
Agreement). Seller and the Company shall (a) cooperate in the preparation of such
protocols, standards, filings and applications, including, if requested by Buyer,
entering into a joint registration organization agreement or other similar agreement
relating to Buyer’s obligations under this Section 5.8.1, (b) comply with and
implement in all respects with such protocols and standards and (c) reimburse Buyer
for its reasonable out-of-pocket costs and expenses incurred in connection with
Buyer’s obligations under this Section 5.8.1. Seller and the Company shall be liable
for any penalties assessed for violations of NERC requirements applicable to the
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“Generator Owner” and “Generator Operator” functions for the Project that occur
prior to the Closing Date and until the Guaranteed Completion Date (or earlier
termination of this Agreement).
5.8.2 MISO Registrations and Qualifications. To the extent permitted by
MISO and its processes, Buyer agrees to act as agent for the Company to file and
diligently prosecute all necessary applications to register the Company with, and
allow the Company to sell power generated by the Project through, MISO for the
period from the date of Interconnection and until the Guaranteed Completion Date (or
earlier termination of this Agreement). Buyer’s obligations under this Section 5.8.2
shall be conditioned upon Seller’s satisfaction of the condition set forth in Section
4.1.6 and, further, Buyer shall have no obligation or authority to schedule or sell
power during such period except at the direction of the Company. Seller and the
Company shall (a) cooperate in the preparation of such filings, applications and
registrations, including, if requested by Buyer, entering into an agency agreement or
other similar agreement relating to Buyer’s obligations under this Section 5.8.2, and
(b) reimburse Buyer for its reasonable out-of-pocket costs and expenses incurred in
connection with Buyer’s obligations under this Section 5.8.2.
5.9.
Notification of Force Majeure Event; Efforts to Mitigate.
5.9.1 Notification of Force Majeure Event. Seller shall give Buyer notice
describing the particulars of the occurrence of any Force Majeure Event promptly
after Seller has actual knowledge of the event and that it results in a Force Majeure
Event, and in no event more than ten (10) days thereafter, and such notice shall
estimate the expected duration and probable impact on the performance of Seller’s
obligations hereunder (and Contractor’s obligations under the EPC Agreement or the
Turbine Supplier’s obligations under the Turbine Supply Agreement, as applicable),
and Seller shall continue to furnish timely regular reports with respect thereto during
the continuation of the delay in Seller’s, Contractor’s or the Turbine Supplier’s
performance; provided, however, that for all purposes hereunder, a Force Majeure
Event shall be deemed to begin on the latest to occur of (i) the date such event occurs,
(ii) the date Seller obtains actual knowledge of such event and that it results in a
Force Majeure Event and (iii) the date ten (10) days prior to the date Buyer receives
the notice required pursuant to this Section 5.9.1.
5.9.2 Mitigation. Seller shall use commercially reasonable efforts to
mitigate the impact of any Force Majeure Event and the period of the Force Majeure
Event shall be no longer than the period in which Seller could reasonably overcome
the Force Majeure Event using its commercially reasonably efforts.
5.10.
[TRADE SECRET DATA BEGINS
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TRADE SECRET DATA ENDS]
5.11. Updated Title and Survey. From the Effective Date until and including the
Closing Date, Buyer has the on-going right to continue its due diligence activities with respect to
title to, and survey of, each parcel of the Property covered by the Land Contracts and the Real
Property, and to undertake new, and update existing, real property due diligence activities. On or
before twenty (20) Business Days prior to the Closing Date, Seller shall have delivered to Buyer
(i) an update of the Title Report (“Updated Title Report”) and, except for Permitted
Encumbrances, such Updated Title Report shall not reflect any Encumbrance not reflected on the
Title Report accepted by Buyer as a condition to the Effective Date, and (ii) an updated survey
(“Updated Survey”) of, each parcel of the Property covered by the Land Contracts and the Real
Property at Seller’s cost. To the extent that the Updated Title Report identifies (x) one or more
Encumbrances, other than Permitted Encumbrances, that were not reflected on the Title Report,
or (y) one or more previously undisclosed third parties that have not executed the NonDisturbance Agreements described in Section 3.2.3(b) or Curative Documents, Buyer shall
identify the same (collectively, “Updated Title Objections”) in an updated Title Objection Letter
delivered to Seller within ten (10) Business Days after Buyer’s receipt of the Updated Title
Report. Seller will use its commercially reasonable efforts to cure each Updated Title Objection
and take all commercially reasonable steps required by the Title Company to eliminate each
Updated Title Objection as an exception to the Updated Title Reports. Any matter contained in
the Updated Title Reports that is not objected to by Buyer in the manner aforesaid, will be
deemed to be acceptable to Buyer and shall constitute a Permitted Encumbrance.
5.12.
Bird and Bat Conservation Strategy.
(a)
Seller has delivered the Bird and Bat Assessments to Buyer prior
to the execution of this Agreement. Seller shall develop, in consultation with
Buyer, the FWS and other applicable Authorities, and deliver to Buyer and the
FWS within [TRADE SECRET DATA BEGINS
TRADE
SECRET DATA ENDS] after the execution of this Agreement, a plan for avian
and bat protection with respect to the development, construction, commissioning
and operation of the Project (the “Bird and Bat Conservation Strategy”);
provided, however, that Seller shall ensure that the FWS has a reasonable
opportunity [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS] to review and
respond to such strategy prior to the Strategy Effective Date. [TRADE SECRET
DATA BEGINS
TRADE SECRET DATA ENDS]
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(b)
[TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
5.13. Regulatory Approval. Buyer shall utilize diligent and commercially reasonable
efforts to obtain all necessary approvals (the “Commission Approvals”) for the Project and the
acquisition of the Company from the Minnesota Public Utilities Commission and the North
Dakota Public Service Commission (the “Commissions”) required to be obtained by Buyer
pursuant to this Agreement and applicable Law, including (a) approval of the Project as an
eligible technology resource for purposes of full cost recovery under the Renewable Energy
Standard Cost Recovery Rider pursuant to Minn. Stat. § 216B.1645 which includes a return on
rate base associated with the actual purchase price of the Purchased Interests (inclusive of
applicable income tax impacts), Buyer’s internal capitalized costs for the Project, its normal
operations costs and the actual level of PTCs generated, (b) an advance determination of
prudence pursuant to Section 49-05-16 of the North Dakota Century Code (the “NDCC”), and
(c) a certificate of public convenience and necessity pursuant to Section 49-03-01.1 of the
NDCC. Buyer shall provide a copy of all correspondence relating to and all applications and
other documents sent to the Commission related to the foregoing within three (3) Business Days
of transmittal of such items to the Commission. All such Commission Approvals shall have been
obtained by Buyer on terms reasonably satisfactory to Buyer. On or before the tenth (10th)
Business Day after the Signing Date, Buyer shall make a filing with the Commissions seeking
the necessary Commission Approvals within one hundred and twenty (120) days. On or before
the date that is one hundred and thirty five (135) days after the Signing Date, Buyer shall either
(i) notify Seller that it has obtained the Commission Approvals on terms reasonably satisfactory
to Buyer, or (ii) notify Seller that Buyer has not obtained the Commission Approvals on terms
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reasonably satisfactory to Buyer. If Buyer does not provide such notice to Seller on or before the
date that is one hundred and thirty five (135) days after the Signing Date, or if Buyer notifies
Seller it has not obtained the Commission Approvals on terms reasonably satisfactory to Buyer,
either Party shall have the right to terminate this Agreement by giving notice of termination to
the other Party within five (5) Business Days after the earlier of such date or such notice from
Buyer that it has not obtained the Commission Approvals on terms reasonably satisfactory to
Buyer; provided, however, that such notice of termination given by Seller shall have no effect if,
within three (3) Business Days after receiving it, Buyer (x) gives notice to Seller irrevocably
waiving receipt of the Commission Approvals as a condition to the Effective Date under this
Section 5.13 and (y) furnishes to Seller a legal opinion of its outside regulatory counsel in
Minnesota and North Dakota that it is legally able to close the transactions contemplated hereby
in accordance with this Agreement without the Commission Approvals.
5.14.
Other Filings.
5.14.1 HSR Filings. Seller and Buyer shall each make an appropriate filing
of a notification and report form pursuant to the HSR Act with respect to the
transactions provided for in this Agreement on or before March 15, 2015, unless
earlier filings and expiration of waiting periods is required by the lenders under the
financing described in Section 4.1.1 as provided in Section 3.2.11 and Section 4.1.5,
in which event Seller and Buyer shall make (a) such filings on or before March 14,
2014, and (b) all appropriate filings under the HSR Act after such date and on or
before March 15, 2015, in order to seek new, renewed or extended HSR Act
clearance for the transactions provided for in this Agreement. Seller and Buyer will
each bear the costs and expense of their respective filings under such act; provided,
however, that (x) Buyer shall pay 50% and Seller shall pay 50% of the filing fees
incurred in connection with the initial round of such filings, and (y) Seller shall pay
100% of the filing fees incurred in connection with the second round of such filings if
earlier filings and expiration periods are required by the lenders under the financing
described in Section 4.1.1 as provided in Section 3.2.11 and Section 4.1.5.
5.14.2 FERC 203 Application. Seller and Buyer shall cooperate to prepare
and file, on or before January 30, 2014, with the FERC a joint application for
authorization of the transactions provided for in this Agreement under section 203 of
the Federal Power Act. Seller and Buyer will each bear the costs and expense of their
respective filings under such act; provided, however, that Buyer shall pay 50% and
Seller shall pay 50% of any filing fees incurred in connection with such application.
5.14.3 EWG and Market Based Rate Application. The Company shall, on or
before January 30, 2014, file (a) for an Order from the FERC authorizing the
Company to sell electricity at market-based rates, and (b) a notice of self-certification
that the Company qualifies as an “exempt wholesale generator” within the meaning of
PUHCA, or, at the Company’s sole discretion, a petition for declaratory order from
FERC finding that the Company is an exempt wholesale generation within the
meaning of PUHCA.
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5.15. Turbine Supplier Change. If, based upon Seller’s commercially reasonable
judgment, Seller believes that [TRADE SECRET DATA BEGINS
TRADE SECRET
DATA ENDS] the Turbine Supplier will not be able to perform under the Turbine Supply
Agreement or the Turbine Warranty and O&M Agreement, or any part thereof, Seller shall have
the option to change the Turbine Supplier to a Replacement Turbine Supplier and the model of
WTGs for use at the Facilities to a model manufactured by the Replacement Turbine Supplier
that is of a performance and reliability level substantially similar to the [TRADE SECRET
DATA BEGINS
TRADE SECRET DATA ENDS] wind
turbines. Seller shall provide prompt notice to Buyer that it desires to make a change in Turbine
Supplier pursuant to this Section 5.15, and provide Buyer with reasonable supporting
documentation including, without limitation, [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS] and Seller’s ability to procure
the replacement WTGs from the Replacement Turbine Supplier. The Parties shall promptly
cooperate in making any modifications to the Agreement necessitated by the change in Turbine
Supplier; provided, however, that the overall economic benefit to Buyer of the transactions
contemplated by the Agreement shall be substantially equivalent following any such
modification including, without limitation, the Project’s eligibility to qualify for PTCs.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer, as of the Signing Date to the extent
indicated in Section 3.1, as of the Effective Date and as of the Closing Date, as follows;
provided, however, that to the extent any representation and warranty is specified as being given
at the Signing Date, Effective Date or Closing Date, such representation and warranty shall be
deemed to be made only as of such date:
6.1.
Corporate Existence and Powers. Seller is a corporation validly existing and in
good standing under the Laws of the State of Delaware, and has all the requisite power and
authority to conduct its business as it is now being conducted and to own, lease and operate its
assets. Seller’s Corporate Documents are in full force and effect. Seller is not in violation of its
Corporate Documents in any manner that would have a Material Adverse Effect on the Project or
on the completion of the transactions contemplated by this Agreement or by the Seller
Documents.
6.2.
Company Existence and Powers. The Company is a limited liability company
duly formed, validly existing and in good standing under the Laws of the State of Delaware, and
has all the requisite power and authority to conduct its business as it is now being conducted and
to develop, engineer, design, construct, commission, own and operate the Project. The Company
has been engaged in no other business since its formation other than the development of the
Project. Seller has made available to Buyer true and complete copies of the Company’s
Corporate Documents and such Corporate Documents are in full force and effect. The Company
is not in violation of any Law or of its Corporate Documents.
6.3.
Authority. Seller has all requisite power and authority to execute and deliver this
Agreement, each Ancillary Agreement and each other agreement, document or instrument to be
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executed by it in connection herewith (collectively, the “Seller Documents”) and to perform the
obligations hereunder and thereunder. Neither Seller’s interest in any of the Purchased Interests,
nor Seller’s performance of its obligations under the Seller Documents requires any
qualification, licensing or approval by any foreign jurisdiction. Seller has taken all action
necessary to execute and deliver this Agreement and the other Seller Documents, as applicable,
to consummate the transactions contemplated hereby and thereby and to perform its obligations
hereunder and thereunder, and no other action or proceeding on the part of Seller is necessary to
authorize this Agreement and the other Seller Documents and the transactions contemplated
hereby and thereby. This Agreement and the other Seller Documents have been duly executed
and delivered by Seller. Assuming the due authorization, execution and delivery by Buyer of
this Agreement and of the Seller Documents, this Agreement and the other Seller Documents
constitute legally valid and binding obligations of Seller, enforceable against Seller in
accordance with their terms, except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting the enforcement of
creditors’ rights generally and equitable principles. Seller owns all of the outstanding
membership interests in the Company and Seller has all requisite power and authority to cause
the Company to develop, engineer, design, construct, commission, own and operate the Project
and to otherwise do all such things as are necessary to effect the transaction contemplated by this
Agreement and no other Person has any option or other enforceable right to acquire, and Seller
shall not permit any other Person to acquire any option or other enforceable right to acquire, any
membership interest or other equity interest in the Company.
6.4.
Consents and Approvals. Other than as set out in Schedule 6.4, no consent,
approval or authorization of, permit from, declaration, filing or registration with, or notice to,
any Authority, any third-party payor or any other Person, is required to be made or obtained by
Seller or the Company in connection with the execution, delivery, performance and validity of
this Agreement and the other Seller Documents and the consummation of the transactions
contemplated hereby and thereby.
6.5.
No Conflicts. Neither the execution, delivery and performance by Seller of this
Agreement or the other Seller Documents nor the transfer of rights and consummation of the
transactions contemplated hereby or thereby will result in (a) a violation of or a conflict with any
provision of Seller’s or the Company’s Corporate Documents; (b) a breach or violation of, a
conflict with or a default under, or the creation of any right of any Person to accelerate, terminate
or cancel, any Contract, whether oral or written, express or implied; (c) a violation by the
Company or Seller of any Laws, or (d) an imposition of any Encumbrance on (i) the Company
Assets (other than Permitted Encumbrances) or (ii) the Purchased Interests.
6.6.
Legal Proceedings. Other than as described in Schedule 6.6 and subject to
Section 6.8, there are no actions, suits or proceedings pending or, to Seller’s Knowledge,
threatened in writing, against or affecting the Project, the Company, the Company Assets or the
Purchased Interests or Seller’s transfer of the Purchased Interests and consummation of the
transactions contemplated hereby, at law or in equity, or before or by any Authority or
instrumentality or before any arbitrator of any kind, and, to Seller’s Knowledge, there is no valid
basis for any such action, proceeding or investigation.
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6.7.
Compliance with Law. Other than as set forth on Schedule 6.7, Company, Seller
and its other Affiliates have not received any notification indicating any violation of, and, to
Seller’s Knowledge, there is no violation of, or non-compliance with, any applicable Law,
license, franchise, permit, authorization or concession, as such would apply to the Project, the
Company, the Company Assets, the Purchased Interests or the transactions contemplated hereby.
6.8.
Environmental Matters.
(a)
[The Bird and Bat Conservation Strategy deemed acceptable by
Buyer as provided in Section 5.12 has not been amended, modified or otherwise
changed (except for such amendments, modifications or other changes approved
by Buyer) since the Effective Date, and Seller and Company have complied with
all of the requirements, recommendations, conditions and other terms set forth
therein. [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS] The facts set forth in
the Bird and Bat Conservation Strategy were true and correct in all material
respects as of the Effective Date.]
(b)
Other than as set out in Schedule 6.8 and as provided in Section
5.12: (i) the Company, Seller and its other Affiliates have no Liabilities and are
not subject to any judgment, decree or judicial order under Environmental Laws
relating to the Company Assets and are in compliance with all Environmental
Laws applicable to the Project and the Company Assets; (ii) the Company, Seller
and its other Affiliates have not received any request for information relating to,
or notice of, an alleged violation of Environmental Laws pertaining to the Project
or the Company Assets from any Authority; (iii) there are no pending claims,
enforcement matters, investigations, or notice of intent to sue and, to Seller’s
Knowledge, there are no facts, circumstances, conditions or occurrences relating
to the Project or the Company Assets that would be expected to form the basis of
any such claims, enforcement matters, investigations, or notice of intent to sue by
any Authority under any Environmental Law against the Company, Seller or its
other Affiliates; (iv) to Seller’s Knowledge, there has not been a Release of
Hazardous Materials on or otherwise affecting the Property or the Real Property;
(v) to Seller’s Knowledge, the Property and the Real Property are not subject to
any Encumbrance imposed by any Authority in connection with the presence on
or off such property of any Hazardous Material; and (vi) to Seller’s Knowledge,
no portion of the Property or the Real Property contains or has ever contained any
(A) underground storage tank, surface impoundment or similar device used for the
management of wastewater or any Hazardous Material, or (B) other waste
management unit dedicated to the disposal, treatment, or long-term storage
(greater than thirty (30) days) of waste materials or Hazardous Materials.
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6.9.
Right and Title to Purchased Interests. On the Effective Date and on the Closing
Date, Seller will have good and marketable title to all of the Purchased Interests. Seller has not
done or suffered to be done anything whereby the Purchased Interests are or may be in any
manner encumbered or charged by, through or under Seller or an Affiliate of Seller. As of the
Effective Date and the Closing Date, there are no rights or interests of any third party relating to
the Purchased Interests and Seller has the full right, power and authority to transfer and deliver to
Buyer all right, title and interest in the Purchased Interests.
6.10. Right and Title to Company Assets. As of the Effective Date and the Closing
Date, the Company owns all right, title and interest in, to and under the Company Assets, subject
only to the Permitted Encumbrances.
6.11.
Land Contracts; Real Property.
6.11.1 Delivery of Land Contracts. For all Land Contracts assigned to, to be
assigned to, or entered into by the Company, Seller has previously delivered, or will
promptly after such Land Contracts shall be obtained by Seller or the Company
deliver, to Buyer true, correct and complete copies of the Land Contract and with
respect thereto:
(a)
each Land Contract is legal, valid, binding and in full force and
effect;
(b)
each Land Contract will continue to be legal, valid, binding and in
full force and effect on identical terms immediately following the consummation
of the transactions contemplated hereby (including any assignments and
assumptions referred to in ARTICLE 3 and ARTICLE 4);
(c)
neither Seller nor the Company is in breach or default under any
Land Contract and, to Seller’s Knowledge, no other party to any Land Contract
will be in breach or default, and no event will have occurred which, with notice or
lapse of time and without a cure being completed, would constitute a breach or
default thereunder or permit termination, modification or acceleration thereof;
(d)
neither Seller nor the Company has repudiated any provision of
any Land Contract and neither Seller nor the Company will have received oral or
written notice from any party to any Land Contract that such other party has
repudiated any provision thereof;
(e)
neither Seller nor the Company has received written notice of any
disputes in effect as to any Land Contract, except as set forth on Part B of
Schedule 6.11;
(f)
there are no oral agreements or oral forbearance programs made by
Seller or the Company in effect for any Land Contract, except as set forth on Part
C of Schedule 6.11;
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(g)
no Land Contract has been mortgaged, deeded in trust, or
encumbered by Seller or the Company except for Permitted Encumbrances and
Encumbrances released on or prior to the Closing; and
(h)
no Land Contract has been (i) transferred, (ii) amended, modified
or supplemented except as set forth on Part A of Schedule 6.11 and except for the
Easement Amendments or (iii) subjected to any Encumbrance, including any
Third Party Right, except for Permitted Encumbrances.
6.11.2 Land Contracts; Real Property. Part A of Schedule 6.11 contains a
true and complete list of all Land Contracts (and any amendments thereto) that will be
included in the Company Assets. The condition set forth in Section 3.2.3(e)) shall be
satisfied as of the Closing Date.
6.11.3 Third Party Rights. Except for Insured Over Third Party Mineral
Rights, Part D of Schedule 6.11 identifies all Third Party Rights in the Property or
that affect any Land Contract, and a correct and complete copy of any written Third
Party Rights have been delivered to Buyer.
6.11.4 Real Property. Except as set forth on Part E of Schedule 6.11, the
zoning, or land use approvals from applicable Authorities, for each parcel of Property
permits the development, construction, and operation of the Project thereon. There is
no action before any Authority pending to change the applicable zoning or building
ordinances or any other Laws or applicable land use approvals affecting the Property
that could reasonably be expected to have an adverse effect on the Project.
6.12. Contracts. Schedule 6.12 contains a true and complete list of each material
Contract (other than the Land Contracts and the Permits) that is or shall be included in the
Company Assets. Seller has delivered to Buyer a correct and complete copy of each Contract, to
the extent such Contract was entered into prior to the Effective Date, as of the Effective Date,
and, to the extent such Contract is entered into after the Effective Date, as of the Closing Date.
With respect to each Contract not identified on Schedule 6.12, no such Contract, either
individually or in the aggregate, has or could reasonably be expected to have liability to the
Company in excess of Ten Thousand Dollars ($10,000). With respect to each Contract identified
on Schedule 6.12, as of the Effective Date with respect to each Contract entered into prior to the
Effective Date, as of the date entered into with respect to each Contract entered into after the
Effective Date, and as of the Closing Date with respect to all Contracts:
6.12.1 Valid and Enforceable. As of the Effective Date and the Closing Date,
each Contract is legal, valid, binding, and enforceable in accordance with its terms,
and in full force and effect, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws
affecting the enforcement of creditors’ rights generally and equitable principles;
6.12.2 Consummation of Transactions. The consummation of the
transactions contemplated by this Agreement (including the assignments and
assumptions referred to in ARTICLE 3 and ARTICLE 4) will not affect the legality,
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validity, binding nature, enforceability or force and effect of any Contract except with
respect to the identity of the parties thereto as a result of the assignments and
assumptions referred to in ARTICLE 3 and ARTICLE 4;
6.12.3 No Breach. As of the Effective Date and the Closing Date, there is no
breach, anticipated breach or default by Seller, the Company or, to Seller’s
Knowledge, any other party to any Contract, and no event has occurred which with
notice or lapse of time would constitute a breach or default, or permit termination,
modification, or acceleration, under any Contract; and
6.12.4 No Repudiation. As of the Effective Date and the Closing Date,
neither Seller nor the Company has repudiated any provision of any Contract and
neither Seller nor the Company has received written notice that any other party has
repudiated any provision of any Contract.
6.13. Permits. Schedule 6.13 is a true and complete list of all Permits needed to
develop, engineer, construct, commission, own and operate the Project (other than Permits which
Buyer may need by nature of Buyer being a public utility or which may be obtained only by
Buyer for itself or for the Company with respect to the operation of the Company after the
Closing (the “Buyer Permits”)). Part A of Schedule 6.13 is a true and complete list of all
Permits needed to develop, engineer, construct and commission the Project other than the Buyer
Permits and the Permits listed in Part B of Schedule 6.13. Part B of Schedule 6.13 is a true and
complete list of all Permits needed to develop, engineer, construct and commission the Project
which are of a type that are routinely granted on application and would not normally be obtained
before the commencement of construction other than the Buyer Permits. Part C of Schedule 6.13
is a true and complete list of all Permits other than the Buyer Permits (the “Operating Permits”)
that the Company must hold as of the Closing Date for the ongoing ownership and operation of
the Project. As of the Signing Date, Seller or the Company has obtained all Permits listed on
Part F of Schedule 6.13, such Permits may be assigned by Seller to the Company in accordance
with the terms of such Permit or applicable Law, and Seller shall have delivered to Buyer a
correct and complete copy of each such Permit. As of the Effective Date, Seller or the Company
has obtained all Permits listed on Part A of Schedule 6.13, such Permits may be assigned by
Seller to the Company in accordance with the terms of such Permit or applicable Law, and Seller
shall have delivered to Buyer a correct and complete copy of each such Permit. As of the
Closing Date, the Company has obtained (or Seller has obtained and transferred to the Company)
all Permits listed on Schedule 6.13 except for such Permits which would be obtained by the
Contractor or Subcontractor in the ordinary course or Permits which Buyer may need to obtain
by nature of it being a public utility and Seller has delivered to Buyer a correct and complete
copy of all Permits. Except as set forth in Part C of Schedule 6.13, all Operating Permits either
run with the underlying land or are otherwise freely assignable by the Company without consent
or other action required by the applicable Authority. As of the Effective Date, no Permit listed
on Part F of Schedule 6.13 has been replaced, amended or modified since the Signing Date
without the approval of Buyer in accordance with Section 5.1. As of the Closing Date, with
respect to each Permit listed on Schedule 6.13:
6.13.1 Valid and Binding. Each (a) Operating Permit is legal, valid, binding
and enforceable in accordance with its terms, and in full force and effect, and (b)
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Permit listed on Part A of Schedule 6.13 has not been replaced, amended or modified
since the Effective Date without the approval of Buyer in accordance with Section
5.1;
6.13.2 No Impact from Transaction. The consummation of the transactions
contemplated by this Agreement (including the assignments and assumptions referred
to in ARTICLE 3 and ARTICLE 4) do not affect the legality, validity, binding nature,
enforceability or force and effect of any Permit except with respect to the identity of
the parties thereto as a result of the assignments and assumptions referred to in
ARTICLE 3 and ARTICLE 4;
6.13.3 Compliance. Seller, Company, EPC Contractor and the Project are in
compliance with the terms and conditions of each Permit, and, to Seller’s Knowledge,
all other parties to each Permit are in compliance with the terms and conditions of
such Permit, and, to Seller’s Knowledge, no event has occurred which with notice or
lapse of time would constitute non-compliance with such terms and conditions; and
6.13.4 No Action. No action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or, to Seller’s Knowledge, threatened, which
challenges the legality, validity, or enforceability of any Permit.
6.14. Finders. Other than Persons arranging any financing of the Project, (a) Seller has
not engaged any finder, broker or other intermediary in connection with the transactions
contemplated by this Agreement, and (b) neither Seller nor any of its Affiliates or representatives
or representatives has incurred any obligation or Liability, contingent or otherwise, for any
brokerage, agent’s or finder’s commissions, fees or similar payments in connection with the
Project, this Agreement or the transactions contemplated hereby for which Buyer or any of its
Affiliates could become liable or obligated or which could result in an Encumbrance on the
Company Assets on or after the Closing Date.
6.15. Intellectual Property. The Company owns or possesses sufficient rights (such as
through a license) to use all intellectual property used in connection with the development of the
Project and neither Seller nor the Company has received notice that the utilization of such
intellectual property infringes upon or violates the intellectual property rights of any other
person. Other than as set forth in Schedule 6.15, all assets of the Company are free of any third
party rights relating to intellectual or proprietary property or agreements, and the utilization by
the Company does not infringe upon or violate the intellectual property rights of any other
person.
6.16. No Other Agreements to Sell the Company Assets. Except for the agreements
and arrangements that Seller has or may enter into pursuant to the proviso contained at the end of
Section 8.11(a), Seller has no legal obligation, absolute or contingent, to any other Person or any
nonbinding agreement in principle, letter of intent or similar understanding with any Person to
sell or effect a sale of all or any portion of the Company Assets or to enter into any agreement or
cause the entering into of any agreement with respect to the foregoing.
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6.17. Wind Data. Seller delivered to Buyer true, correct and complete copies of all
Wind Data and any other information listed on Schedule 6.17. The Wind Data contained in the
documents set forth on Schedule 6.17 were collected at the locations and during the times set
forth in such documents.
6.18. Insurance. Schedule 6.18 sets forth all policies of fire, liability and other forms of
insurance insuring Seller (with respect to the Company or the Project), the Company or the
Company Assets. Such policies are in full force and effect, all premiums with respect thereto
covering all periods up to and including the date as of which this representation is being made
have been paid (other than retroactive premiums which may be payable with respect to
comprehensive general liability insurance policies), and no notice of cancellation or termination
has been received by the owner or holder of any such policy with respect to any such policy
which was not replaced on substantially similar terms prior to the date of such cancellation. No
pending claims exist under any such policies of insurance covering the Company Assets.
6.19. Reports. As of the Effective Date, except as provided in Section 5.12 and except
for changes in or updates to Reports as described in Section 5.7, Seller has delivered to Buyer
true, correct and complete copies of the Reports, which Reports do not indicate any issues,
circumstances or conditions that have had or could be reasonably likely to have a Material
Adverse Effect on the Project. As of the Closing Date, except as provided in Section 5.12 and
except as set forth in the Schedules hereto, to Seller’s Knowledge, there has been no change in
circumstances in any material matters described in a Report.
6.20.
Tax Matters.
(a)
There are no Encumbrances for Taxes on the Purchased Interests
or the Company Assets other than, with respect to Company Assets, Permitted
Encumbrances. No proceedings are pending, and to Seller’s Knowledge, there are
no threatened proceedings with respect to Taxes relating to the Purchased
Interests, the Company Assets or, except as have not had and could not
reasonably be expected to have a Material Adverse Effect and do not and could
not reasonably be expected to materially impair Seller’s authority, right or ability
to perform its obligations hereunder and consummate the transactions
contemplated hereby, relating to Seller. There are no matters under discussion
between Seller and any Authority with respect to Taxes relating to the Purchased
Interests or the Company Assets, and no extensions of the statute of limitations
have either been requested or granted with respect to Taxes relating to the
Purchased Interests, the Company Assets or, except as have not had and could not
reasonably be expected to have a Material Adverse Effect and do not and could
not reasonably be expected to materially impair Seller’s authority, right or ability
to perform its obligations hereunder and consummate the transactions
contemplated hereby, relating to Seller.
(b)
All applicable Tax returns involving the Company or the Project
have been filed when due. Income Taxes and property Taxes relating to the
Company or the Project arising or accruing prior to the Closing Date have been
timely paid by the Company or Seller or have been or will be prorated for the
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account of Seller pursuant to Section 2.4.2. Seller is not a foreign person (as that
term is defined in Section 1445 of the Code and the Treasury Regulations
promulgated thereunder). No election has been filed to treat the Company as an
association taxable as a corporation for U.S. federal, date or local tax purposes.
6.21. Completed Project. As of the Closing Date, except as provided in Section 5.12,
the Company Assets shall constitute all of the contracts, equipment, spare parts, buildings,
facilities, licenses, permits, approvals, land rights and other assets necessary and sufficient for
the Company to own and operate that portion of the Project as to which Project Substantial
Completion has occurred as of the Closing Date, and no other equipment, buildings, facilities,
contracts, licenses, permits, approvals, land rights or other assets will be required in order to own
and operate such portion of the Project, except to the extent replacement equipment, including
spare parts, are not required to be provided under the EPC Agreement, the Turbine Supply
Agreement or the Turbine Warranty and O&M Agreement and except for the Buyer Permits.
6.22. Liabilities. Except for Liabilities (i) set forth in Schedule 6.22, or (ii) Assumed
Liabilities, the Company has no Liabilities as of the Closing Date.
6.23. Consents. As of the Closing Date, except as provided in Section 5.12, there are
no outstanding third party consents which have not been previously obtained and delivered to
Company or Buyer, including those involving Real Property, Land Contracts or Permits, which
are required for the commercial operation of the Project, the completion of the transaction or the
subsequent transfer of any portion of the Project from the Company to Buyer.
6.24. Sufficient Funds. Seller (a) has and at all times prior to the Effective Date will
continuously have sufficient funds available, or will maintain sources for sufficient funding
capacity, to meet the financial requirements from time to time required to continue the
development of the Project to meet the conditions to the Effective Date set forth in Section 3.2
and (b) after completion of the financing contemplated in Section 4.1.1, at all times prior to the
Closing Date will continuously have sufficient funds available, or will maintain sources for
sufficient funding capacity, to meet the financial requirements from time to time required to
continue the development and construction of the Project to completion pursuant to this
Agreement and consummate the transactions contemplated by this Agreement.
6.25.
FAA Determinations of No Hazard to Air Navigation.
6.25.1 Effective Date. As of the Effective Date, the Company has obtained
true, correct and complete copies of a FAA Determination of No Hazard to Air
Navigation for each location where it plans to erect a WTG as part of the Project.
6.25.2 Closing Date. As of the Closing Date, the Company has obtained and
continues to hold true, correct and complete copies of a FAA Determination of No
Hazard to Air Navigation for each WTG erected as a part of the Project and such
WTG shall have been erected at the location depicted in such FAA Determination of
No Hazard to Air Navigation and thereafter or in connection with the issuance thereof
neither the Project, the Company nor Seller has received any communication from the
FAA that objects to the construction of any of the Facilities, asserts that any of the
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Facilities could present a hazard to air navigation or that has had or is reasonably
likely to have a Material Adverse Effect.
6.26. Seller Project Warranty. Seller warrants that (a) all parts, materials and
equipment and the like incorporated into the Project shall be free of defects in material,
workmanship and title and shall be new, unused and undamaged and of suitable grade consistent
with Prudent Industry Practices when installed, (b) the Work shall be performed with due care,
skill, and in a manner consistent with applicable Laws (except as provided in Section 5.12) and
Applicable Standards and (c) the completed Work and all equipment shall perform its intended
design function as a complete integrated wind energy generation system as described in this
Agreement and in full accordance with the Technical Specifications (all of the foregoing,
collectively, the “Seller Project Warranty”), provided that, (a) Buyer agrees that it shall not
assert any claim against Seller for indemnification or otherwise in respect of the Seller Project
Warranty until it has first tendered such claim against the Contractor, the Turbine Supplier, or
both and Contractor and/or Turbine Supplier (as applicable) have denied responsibility for such
claim, and (b) to the extent Seller pays any Buyer claim in respect of the Seller Project Warranty,
Buyer shall cause the Company to grant Seller any and all rights of subrogation under the EPC
Agreement or the Turbine Warranty and O&M Agreement with respect to such claim to recover
the amounts in respect of such claim from Contractor or Turbine Supplier (as applicable) and
hereby agrees to assign any and all rights with respect to such claim which Buyer may have
under the EPC Agreement and the Turbine Warranty and O&M Agreement necessary to enable
Seller to pursue such claim against Contractor and/or Turbine Supplier (as applicable). Insofar
as the Seller Project Warranty relates to the WTGs, the parts, materials and equipment
incorporated therein, or the installation or performance thereof, the Seller Project Warranty shall
be deemed not to be any broader or more extensive than the warranty from the Turbine Supplier
under the Turbine Warranty and O&M Agreement and the survival period with respect to such
portion of the Seller Project Warranty shall be limited to the warranty period under the Turbine
Warranty and O&M Agreement.
ARTICLE 7.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller, as of the Signing Date, as of the Effective
Date and as of the Closing Date, as follows:
7.1.
Corporate Existence and Powers. Buyer is a corporation validly existing and in
good standing under the Laws of the State of Minnesota, and has all the requisite power and
authority to conduct its business as it is now being conducted and to own, lease and operate its
assets. Buyer’s Corporate Documents are in full force and effect. Buyer is not in violation of its
Corporate Documents in any manner that would have a Material Adverse Effect on the
completion of the transactions contemplated by this Agreement or by the Buyer Documents.
7.2.
Authority. Subject to obtaining the NSP Corporate Approval, Buyer has all
requisite power and authority to execute and deliver this Agreement, each Ancillary Agreement
and each other agreement, document or instrument to be executed by it in connection herewith
(collectively, the “Buyer Documents”) and to perform its obligations hereunder and thereunder.
Buyer’s performance of its obligations under the Buyer Documents does not require any
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qualification, licensing or approval by any foreign jurisdiction, except as set forth in Schedule
7.4. Subject to obtaining the NSP Corporate Approval, Buyer has taken all action necessary to
execute and deliver this Agreement and the other Buyer Documents, as applicable, to
consummate the transactions contemplated hereby and thereby and to perform its obligations
hereunder and thereunder, and no other action or proceeding on the part of Buyer is necessary to
authorize this Agreement and the other Buyer Documents and the transactions contemplated
hereby and thereby. This Agreement and the other Buyer Documents have been duly executed
and delivered by Buyer. Assuming the due authorization, execution and delivery by Seller of
this Agreement and of the Buyer Documents, this Agreement and the other Buyer Documents
constitute legally valid and binding obligations of Buyer, enforceable against it in accordance
with the respective terms thereof, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting the
enforcement of creditors’ rights generally and equitable principles.
7.3.
No Conflicts. Neither the execution, delivery and performance by Buyer of this
Agreement or the other Buyer Documents nor the transfer of rights and consummation of the
transactions contemplated hereby or thereby will result in (a) a violation of or a conflict with any
provision of Buyer’s Corporate Documents or (b) a violation by Buyer of any Laws.
7.4.
Consents and Approvals. Other than as set out in Schedule 7.4, no consent,
approval or authorization of, permit from, declaration, filing or registration with, or notice to,
any Authority, any third-party payor or any other Person, is required to be made or obtained by
Buyer in connection with the execution, delivery, performance and validity of this Agreement
and the other Buyer Documents and the consummation of the transactions contemplated hereby
and thereby.
7.5.
Legal Proceedings. Other than as described in Schedule 7.5, there are no actions,
suits or proceedings pending or, to Buyer’s Knowledge, threatened in writing, against or
affecting the acquisition of the Purchased Interests by Buyer or the consummation of the
transactions contemplated hereby, at law or in equity, or before or by any Authority or
instrumentality or before any arbitrator of any kind, and, to Buyer’s Knowledge, there is no valid
basis for any such action, proceeding or investigation.
7.6.
Finders. Buyer has not engaged any finder, broker or other intermediary in
connection with the transactions contemplated by this Agreement. Neither Buyer nor any of its
Affiliates or representatives has incurred any obligation or Liability, contingent or otherwise, for
any brokerage, agent’s or finder’s commissions, fees or similar payments in connection with the
Project, this Agreement or the transactions contemplated hereby for which Seller or any of its
Affiliates could be liable or obligated or which could result in an Encumbrance on the Project or
any of the Purchased Interests.
7.7.
Sufficient Funds. Buyer has and at Closing will have sufficient funds available,
or will have sources for sufficient funding capacity, to consummate the transactions
contemplated hereby, including to purchase the Purchased Interests and to pay the Purchase
Price.
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7.8.
Compliance With Laws. Buyer is not in violation of any Law, except for
violations that would not, in the aggregate, have a Material Adverse Effect on Buyer’s ability to
perform its obligations hereunder.
ARTICLE 8.
CERTAIN COVENANTS
8.1.
No Breach of Representations and Warranties by Seller. Seller shall not, and
shall not permit the Company to, engage in any practice, take any action, embark on any course
of inaction or enter into any transaction or agreement that would violate any provision of this
Agreement or any of the other Seller Documents or that causes or results in, or could reasonably
be expected to cause or result in, any of the representations and warranties set forth in ARTICLE
6 to be untrue as of the Closing Date or after giving effect to any such practice, action, course of
inaction, transaction or agreement, nor take any action which could hinder the transactions
contemplated by this Agreement or the other Seller Documents, as applicable, provided that, this
Section 8.1 shall not affect the Buyer conditions precedent to Closing set forth in Section 3.3
and, the Parties agree that if such conditions precedent are met, Closing shall occur and Buyer
shall pay the Adjusted Purchase Price.
8.2.
No Breach of Representations and Warranties by Buyer. Buyer shall not engage
in any practice, take any action, embark on any course of inaction or enter into any transaction or
agreement that would violate any provision of this Agreement or any of the other Buyer
Documents or that causes or results in, or could reasonably be expected to cause or result in, any
of the representations and warranties set forth in ARTICLE 7 to be untrue as of the Closing Date
or after giving effect to any such practice, action, course of inaction, transaction or agreement,
nor take any action which could hinder the transactions contemplated by this Agreement or the
other Buyer Documents or render such transactions less desirable to Seller.
8.3.
Consents and Reasonable Efforts. Buyer and Seller shall use their respective
reasonable efforts to obtain, or to assist in obtaining, all consents, approvals, transfers,
permissions, waivers, orders, reissuances and authorizations of (and make all necessary filings or
registrations with) all Authorities and other third parties which are required to be obtained or
made by them in connection with the consummation of the transactions contemplated by this
Agreement or in connection with the Project. At the request of either Party, the other Party shall
promptly execute and deliver, or cause to be executed and delivered as applicable, such other
documents, instruments of transfer or assignment, estoppels, files, books and records and do all
such further acts and things as may be reasonably requested by such Party to carry out or
evidence the terms and provisions of this Agreement.
8.4.
Buyer Confidential Information.
8.4.1 Buyer Confidential Information. Seller acknowledges that Buyer
Confidential Information is valuable and proprietary to the Project and Seller agrees
not to, directly or indirectly, use, publish, disseminate, describe or otherwise disclose
any Buyer Confidential Information in respect of the Project without the prior written
consent of Buyer. For purposes of this Agreement, “Buyer Confidential
Information” shall mean (a) any and all information provided by Buyer to Seller and
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identified by Buyer as confidential and (b) any and all information provided by Buyer
to Seller with respect to the Project, or the transactions contemplated hereby.
Information shall not be deemed to be Buyer Confidential Information if (i) it has
become generally known or available within the industry or the public through no act
or omission of Seller; (ii) Seller can demonstrate that, prior to disclosure in
connection with the transactions contemplated hereby, such information was already
in the possession of Seller; (iii) it was rightfully received by Seller from a third party
who became aware of it through no act or omission of Seller and who is not under an
obligation of confidentiality to Buyer, or (iv) Seller can demonstrate it was
independently developed by employees or consultants of Seller.
8.4.2 Duty to Maintain Confidentiality. Seller shall maintain any Buyer
Confidential Information which has been or will be disclosed directly or indirectly to
Seller by or on behalf of Buyer or its Affiliates in confidence and shall not disclose or
cause to be disclosed by them or any third party without Buyer’s prior express written
consent; provided, however, that Seller may disclose Buyer Confidential Information
to Persons who provide financial analysis, banking, legal, accounting, or other
services to Seller in connection with Seller’s evaluation or implementation of the
transactions contemplated by this Agreement, so long as such Persons have first been
provided with a copy of Section 8.4 of this Agreement and have been informed of the
duties required hereby. If Buyer Confidential Information is disclosed under the
provisions of this Section 8.4.2, Seller shall notify Buyer of the same in writing not
later than five (5) Business Days following the disclosure.
8.4.3 Permitted Disclosure. Notwithstanding Section 8.4.2, Buyer
Confidential Information may be disclosed if required by any Authority or otherwise
by applicable Law or stock exchange rule; provided, however, that (a) such Buyer
Confidential Information is submitted under any and all applicable provisions for
confidential treatment and (b) if Seller is permitted to do so, Buyer is given written
notice of the requirement for disclosure promptly after such disclosure is requested,
so that it may take whatever action it deems appropriate, including intervention in any
proceeding and seeking a protective order or an injunction, to prohibit such
disclosure. If Buyer Confidential Information is disclosed under the provisions of
this Section 8.4.3, Seller shall notify Buyer of the same in writing not later than five
(5) Business Days following the disclosure.
8.4.4 Limited Use. Seller agrees that it will not make any use of any Buyer
Confidential Information received pursuant to this Agreement except in connection
with the transactions contemplated by this Agreement, unless specifically authorized
to do so in writing, and this Agreement shall not be construed as a license or
authorization to Seller to utilize Buyer Confidential Information except for such
purpose.
8.4.5 Return or Destruction. Upon Buyer’s request, Seller shall return to
Buyer or destroy as promptly as practicable, but in a period not to exceed ten (10)
days, (a) all Buyer Confidential Information provided to Seller, including all copies of
such Buyer Confidential Information, and (b) all notes or other documents in digital
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or other format in its possession or in the possession of other Persons to whom Buyer
Confidential Information was properly provided by Seller. Non-destruction of
electronic copies of materials or summaries containing or reflecting Buyer
Confidential Information that are automatically generated through data backup and/or
archiving systems and which are not readily accessible by a Party’s business
personnel shall not be deemed to violate this Agreement, so long as Buyer
Confidential Information contained in or reflected in such electronic backup records
is not disclosed or used in violation of the other terms of this Agreement.
8.4.6 Specific Performance. Seller acknowledges that a breach of the
covenants contained in this Section 8.4 will cause irreparable damage to Buyer, the
exact amount of which will be difficult to ascertain, and that the remedies at law for
any such breach will be inadequate. Accordingly, Seller agrees that if Seller breaches
any of the covenants contained in this Section 8.4, in addition to any other remedy
that may be available at law or in equity, Buyer shall be entitled to specific
performance and injunctive relief, without posting bond or other security.
8.5.
Seller Confidential Information.
8.5.1 Seller’s Confidential Information. Buyer acknowledges that Seller
Confidential Information is valuable and proprietary to Seller and Buyer agrees not
to, directly or indirectly, use, publish, disseminate, describe or otherwise disclose any
Seller Confidential Information in respect of the Project without the prior written
consent of Seller. For purposes of this Agreement, “Seller Confidential
Information” shall mean (a) any and all information provided by Seller to Buyer and
identified by Seller as confidential and (b) any and all information provided by Seller
to Buyer with respect to the Project or the transactions contemplated hereby.
Information shall not be deemed to be Seller Confidential Information if (i) the
Project Closing has occurred and such information is also a Company Asset under
this Agreement; (ii) it has become generally known or available within the industry or
the public through no act or omission of Buyer; (iii) Buyer can demonstrate that, prior
to disclosure in connection with the transactions contemplated hereby, such
information was already in the possession of Buyer; (iv) it was rightfully received by
Buyer from a third party who became aware of it through no act or omission of Buyer
and who is not under an obligation of confidentiality to Seller; or (v) Buyer can
demonstrate it was independently developed by employees or consultants of Buyer.
8.5.2 Duty to Maintain Confidentiality. Buyer shall maintain any Seller
Confidential Information which has been or will be disclosed directly or indirectly to
Buyer by or on behalf of Seller or its Affiliates in confidence and shall not disclose or
cause to be disclosed by Buyer or any third party without Seller’s prior express
written consent; provided, however, that Buyer may disclose Seller Confidential
Information to Persons who provide financial analysis, banking, legal, accounting, or
other services to Buyer or any potential lenders to Buyer in connection with Buyer’s
evaluation or implementation of the transactions contemplated by this Agreement, so
long as such Persons have first been provided with a copy of Section 8.5 of this
Agreement and have been informed of the duties required hereby. If Seller
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Confidential Information is disclosed under the provisions of this Section 8.5.2,
Buyer shall notify Seller of the same in writing not later than five (5) Business Days
following the disclosure.
8.5.3 Permitted Disclosure. Notwithstanding Section 8.5.2, Seller
Confidential Information may be disclosed if required by any Authority or otherwise
by applicable Law or stock exchange rule; provided, however, that: (a) such Seller
Confidential Information is submitted under any and all applicable provisions for
confidential treatment and (b) if Buyer is permitted to do so, Seller is given written
notice of the requirement for disclosure promptly after such disclosure is requested,
so that it may take whatever action it deems appropriate, including intervention in any
proceeding and seeking a protective order or an injunction, to prohibit such
disclosure. If Seller Confidential Information is disclosed under the provisions of this
Section 8.5.3, Buyer shall notify Seller of the same in writing not later than five (5)
Business Days following the disclosure.
8.5.4 Limited Use. Buyer agrees that it will not make any use of any Seller
Confidential Information received pursuant to this Agreement except in connection
with the transactions contemplated by this Agreement, unless specifically authorized
to do so in writing, and this Agreement shall not be construed as a license or
authorization to Buyer to utilize Seller Confidential Information except for such
purpose.
8.5.5 Return or Destruction. Upon Seller’s request, Buyer shall return or
destroy as promptly as practicable, but in a period not to exceed ten (10) days, (a) all
Seller Confidential Information provided to Buyer, including all copies of such Seller
Confidential Information, and (b) all notes or other documents in digital or other
format in its possession or in the possession of other Persons to whom Seller
Confidential Information was properly provided by Buyer. Non-destruction of
electronic copies of materials or summaries containing or reflecting Seller
Confidential Information that are automatically generated through data backup and/or
archiving systems and which are not readily accessible by a Party’s business
personnel shall not be deemed to violate this Agreement, so long as the Seller
Confidential Information contained in or reflected in such electronic backup records
is not disclosed or used in violation of the other terms of this Agreement.
8.5.6 Specific Performance. Buyer acknowledges that a breach of the
covenants contained in this Section 8.5 will cause irreparable damage to Seller, the
exact amount of which will be difficult to ascertain, and that the remedies at law for
any such breach will be inadequate. Accordingly, Buyer agrees that if Buyer
breaches any of the covenants contained in this Section 8.5, in addition to any other
remedy that may be available at law or in equity, Seller shall be entitled to specific
performance and injunctive relief, without posting bond or other security.
8.6.
Tax Matters.
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8.6.1 Prior to the Closing, neither Party shall negotiate with any Tax
Authority regarding the Project (other than as to any sales or use tax or as to any
private ruling that may be sought by Seller) without the prior written consent of the
other Party (which may not be unreasonably withheld), and if such consent is
provided, any agreement with the Tax Authorities shall also be subject to the prior
written consent of the other Party (which may not be unreasonably withheld).
8.6.2 Seller shall include all income, gain, loss, deduction and credit of the
Company and the Company Assets for any period ending on or prior to the Closing
Date in its Tax returns (“Seller Tax Returns”).
8.6.3 Seller shall prepare or cause to be prepared and file or cause to be filed
all Tax returns, if any, for the Company required to be filed on or before the Closing
Date (“Pre-Closing Tax Returns”). All such Pre-Closing Tax Returns shall be
prepared in a manner consistent with the Company’s past practice to the extent
permitted by applicable Law. Seller will pay all Taxes, if any, shown as due or
required to be shown as due on such Tax Returns of the Company.
8.6.4 Buyer shall prepare or cause to be prepared and file or cause to be filed
any Tax returns for the Company required to be filed (without regard to any
extensions) after the Closing Date, which returns shall be filed in accordance with
applicable Law and prior Company practice. Seller shall pay to Buyer within fifteen
(15) days after the date on which Taxes are paid with respect to any such Tax return,
an amount equal to the portion of such Taxes that relates to the portion of such Tax
period ending on or before the Closing Date (the “Pre-Closing Period”), if any.
Buyer shall use a closing of the books method for allocating any Taxes to the PreClosing Period (for property Taxes it shall be on a per diem basis and for sales and
other similar Taxes on the basis of the date on which such liability arose, without
regard to when the Taxes are due and payable, provided that Seller shall not be
responsible for any increase in assessed values of the assets of the Company or the
Company Assets for purposes of computing property Taxes taking effect on or after
the Closing Date).
8.6.5 Any Tax refunds that are received by Buyer, and any amounts credited
against Taxes to which Buyer becomes entitled, which in either case arise with
respect to the Company or the Company Assets and relate to a Pre-Closing Period,
shall be for the account of Seller, and Buyer shall pay over to Seller any such refund
or the amount of any such credit or the appropriate percentage thereof within fifteen
(15) days after receipt thereof.
8.6.6 Any Tax refunds that are received by Seller, and any amounts credited
against Taxes to which Seller becomes entitled, which in either case arise with respect
to the Company or the Company Assets and relate to Tax periods after the Closing
Date, shall be for the account of Buyer, and Seller shall pay over to Buyer any such
refund or the amount of any such credit or the appropriate percentage thereof within
fifteen (15) days after receipt thereof.
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8.6.7 After the Closing Date, Buyer and Seller shall provide each other with
such cooperation and information related to the Company as the Parties reasonably
may request in (a) filing any Tax return, amending any Tax return or claiming any
Tax refund, (b) determining any liability for Taxes or any right to Tax refunds or (c)
conducting or defending any proceeding in respect of Taxes (other than those
specifically addressed in Section 2.2.3, as to which the parties’ obligations as to
cooperation shall be as set forth therein). Seller and Buyer shall retain all Tax
returns, schedules and work papers, and all material records and other documents
related thereto until the expiration of the statute of limitations of the taxable years to
which such Tax returns and other documents relate and until the final determination
of any Tax in respect of such years, but for no longer than seven (7) years. At or
before the Closing, Seller shall provide to Buyer copies of all supporting
documentation that was provided to the (x) Independent Tax Attorney in connection
with preparation of the Under Construction Opinions or (y) Independent Engineer in
connection with preparation of the Final Under Construction Plan IE Certificate, in
each case, including without limitation, construction schedules (planned and actual)
and support for costs incurred prior to the PTC Expiration Date.
8.6.8 With respect to any Taxes for which Seller is liable pursuant to this
Section 8.6, Seller shall control any audit, examination or administrative or judicial
proceeding relating to such Taxes if such audit, examination or administrative or
judicial proceeding relates to any Seller Tax Returns or Pre-Closing Tax Returns,
provided that Seller may not settle or resolve any such audit examination or
proceeding if it affects any material liabilities for Taxes of Buyer or the Company for
any periods or portions thereof for which Seller is not liable without the prior written
consent of Buyer in its sole discretion (but consideration thereof shall not be
unreasonably delayed). Buyer shall control all other audits, examinations or
administrative or judicial proceedings that affect the Company. For this Section 8.6.8,
Buyer shall consult in good faith with Seller as to audits, examinations or
administrative or judicial proceedings that may affect the Taxes of Seller.
8.7.
Maintain a Qualified Facility. Seller shall and shall cause the Company to take all
actions necessary with respect to the Project in order to: (a) if the conclusions of the Initial Under
Construction Certificate and the Initial Under Construction Opinion are based on a determination
that “physical work of a significant nature” has commenced with respect to the Project,
“maintain a continuous program of construction that involves continuing physical work of a
significant nature” with respect to the Project (as described in the IRS PTC Publication); and (b)
if the conclusions of the Initial Under Construction Certificate and the Initial Under Construction
Opinion are based on a determination that Seller or the Company has paid or incurred five
percent or more of the total cost of the Project, “indicat[e] continuous efforts to advance [the
Project] towards completion” are being undertaken (as described in the IRS PTC Publication); in
the case of each of (a) and (b), during the period commencing as of the delivery of the Initial
Under Construction Certificate and ending on the Project Substantial Completion Date. If the
IRS (or any court of competent jurisdiction) issues guidance in addition to the IRS PTC
Publication with regard to how a taxpayer satisfies the requirement under Section 45(d)(1) of the
Code that specifies that “the construction of which begins before” the PTC Expiration Date,
Seller shall use commercially reasonable efforts to modify the Under Construction Plan, in a
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manner reasonably acceptable to Buyer and the Independent Tax Attorney, to cause the Project
to satisfy such requirement.
8.8.
Bird and Bat Conservation Strategy. [TRADE SECRET DATA BEGINS
TRADE SECRET DATA
ENDS] Seller shall take all action and to do all things necessary, proper or advisable to ensure
the development, construction, commissioning and operation of the Project prior to Closing
complies with Environmental Laws relating to the protection of avian and bat species, including
modification or amendment of the Bird and Bat Conservation Strategy necessary to conform
such Strategy to such Environmental Laws, as the same may be amended from time to time.
[TRADE SECRET DATA BEGINS
TRADE
SECRET DATA ENDS] Buyer will make commercially reasonable efforts to cooperate with
Seller to address any situation that arises that could reasonably be expected to cause
noncompliance with the Bird and Bat Conservation Strategy or applicable Laws.
8.9.
Non-Disparagement. From the Signing Date until the earlier of the termination
date of this Agreement or the third anniversary of the Closing Date (the “Non-Disclosure
Period”) neither Seller nor Buyer shall make any statement or other communication that
impugns or attacks the reputation or character of the Project, the Company or each other or any
of Seller’s or Buyer’s respective Affiliates or Representatives, or that damages the goodwill of
the Project, the Company or each other or any of Seller’s or Buyer’s respective Affiliates or
Representatives, take any action that would interfere with any contractual or customer
relationships of the Project, the Company or each other or any of Seller’s or Buyer’s respective
Affiliates or Representatives, including any action that would result in a diminution of business,
or otherwise take any action detrimental to the interests of the Project, the Company or each
other or any of Seller’s or Buyer’s respective Affiliates or Representatives (except to assert
Seller’s rights or Buyer’s rights, as applicable, under this Agreement); provided, however, that
this Section 8.9 shall not be understood to limit the ability or right of Buyer or Seller or any of
their respective Affiliates to compete with respect to future opportunities or the enforcement of
any contractual or other legal rights.
8.10. Confidentiality Regarding This Agreement. The Parties each acknowledge and
agree that the terms of this Agreement shall be considered Seller Confidential Information and
Buyer Confidential Information. Neither Buyer nor Seller shall issue any public announcement
or other statement with respect to this Agreement or the transactions contemplated hereby,
without the prior consent of the other Party (which consent shall not be unreasonably withheld),
unless required by applicable Law or stock exchange rule; provided, however, that both Buyer
and Seller shall have the right without obtaining such consent to include public information
concerning the Project in such Party’s marketing materials following the initial public
announcement by the other Party. In the event a Party breaches this Section 8.10, in addition to
and not in lieu of any legal or equitable remedies that may otherwise be available, the nonbreaching Party may, in its sole discretion, issue public announcements that the non- breaching
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Party shall deem to be appropriate in its sole discretion to supplement, correct or amplify the
announcement or statement made by the breaching Party.
8.11.
No Shop.
(a)
Prior to the Closing, and unless and until this Agreement has been
earlier terminated pursuant to the terms hereof, Seller shall not, and it shall not
permit any of its Affiliates or any of its or their respective Representatives to:
(i)
initiate, solicit or seek, directly or indirectly, any inquiries
or the making of any proposal with respect to the direct or indirect
acquisition of the Company Assets or the Purchased Interests (whether
alone, in combination with or as part of a transaction involving other
assets of Seller or the Company, or the membership or other equity
interests in, the Company) by any Person other than Buyer (including by
means of a merger, acquisition, consolidation, recapitalization,
liquidation, dissolution, equity investment, transaction involving the
assignment or transfer of the contractual relationships of the Company
Assets or the Purchased Interests or similar transaction) (any such
proposal or offer being herein referred to as an “Acquisition Proposal”);
(ii)
engage in any negotiations or discussions with, or provide
any confidential information or data to, any Person other than Buyer (or
their Representatives) relating to an Acquisition Proposal, or otherwise
facilitate any effort or attempt by a person other than Buyer to make or
implement an Acquisition Proposal; or
(iii) enter into or consummate any agreement or understanding
with any Person relating to an Acquisition Proposal;
provided, however, that, with respect to WTGs that Seller, the Company or any of
their Affiliates have agreed or may agree to purchase for use in the Project,
neither Section 6.16 nor this Section 8.11 shall restrict or limit Seller, the
Company or their Affiliates from continuing or initiating discussions or
negotiations with, or entering into agreements with, other Persons for the sale,
lease, use or other disposition of such WTGs as an alternative to using such
WTGs for the Project in the event that the Effective Date or Closing does not
occur or this Agreement is terminated.
(b)
Seller shall be responsible for any breach of the provisions of this
Section 8.11 by Seller, any of its Affiliates or any of its or their respective
Representatives.
8.12.
Alternate WTG Locations. [TRADE SECRET DATA BEGINS
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TRADE SECRET DATA ENDS]
ARTICLE 9.
ACTIONS BY SELLER AND BUYER AFTER THE CLOSING DATE
9.1. Records. Seller and Buyer agree that each will cooperate with and make available
to the other Party, during normal business hours after reasonable advance notice, all books and
records relating to the Project or the Company retained and remaining in existence after the
Closing Date that are necessary in connection with any Tax inquiry, audit, investigation or
dispute, any litigation or investigation or any other matter requiring any such books and records.
The Party requesting any such books and records shall bear all of the out-of-pocket costs and
expenses (including attorneys’ fees) reasonably incurred in connection with providing such
books and records.
9.2.
Survival. The representations and warranties of Buyer and Seller shall survive
until [TRADE SECRET DATA BEGINS
TRADE
SECRET DATA ENDS], except (a) as provided in the last sentence of Section 6.26 and (b) that
the representations and warranties of each of Buyer and Seller relating to Taxes shall survive for
the period corresponding to the applicable statute of limitations for the Tax at issue. Claims for
breach of any of the covenants and agreements of the Parties set forth herein shall survive the
Closing for the period corresponding to the applicable statute of limitations applicable to such
claims.
9.3.
Indemnifications.
9.3.1 By Seller. Seller shall indemnify, save and hold harmless, Buyer, its
Affiliates, and their respective employees, Representatives, officers, directors and
agents (collectively, the “Buyer Indemnified Parties”) from and against any and all
costs, losses (including diminution in value), liabilities (including liabilities arising
under principles of strict or joint and several liability), damages, lawsuits,
deficiencies, claims and expenses (whether or not arising out of third-party claims),
including interest, penalties, additions, travel expenses, wages allocable to loss of
employee time, reasonable attorneys’ fees and all amounts paid in investigation,
defense or settlement of any of the foregoing (collectively, the “Buyer Damages”),
incurred in connection with or arising out of or resulting from (a) any breach or
violation of any covenant or agreement of Seller set forth in this Agreement or any
Seller Document, (b) any breach or inaccuracy in any of the representations or
warranties of Seller contained in this Agreement or any certificate delivered by or on
behalf of Seller pursuant to this Agreement, (any such breach or inaccuracy to be
determined without regard to any qualification for “materiality,” “in all material
respects” or similar qualification), (c) if the Closing has occurred, any failure by
Seller to pay, perform or discharge any Excluded Liability as and when due, (d) if the
Closing has occurred, any liability, obligation or commitment of Seller or the
Company of any nature (absolute, accrued, contingent or otherwise) relating to the
Purchased Interests and not assumed by Buyer pursuant to this Agreement, (e) any
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fraud, willful misconduct or negligence in performance of this Agreement by Seller,
or (f) Buyer’s performance of its obligations under Section 5.8. Any indemnity
payment required hereunder shall be accompanied by a statement, certified to by an
officer of Buyer, showing in reasonable detail the calculation of the amount of the
indemnity payment. Notwithstanding anything to the contrary, no claim for
indemnification shall be brought pursuant to this Section 9.3.1 until the total Buyer
Damages for which Seller would be liable under this Section 9.3.1 exceeds in the
aggregate a threshold amount equal to [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS], and, once
such amount is exceeded, indemnification may be sought for the full aggregate
amount of Buyer Damages, including indemnification for such amounts of Buyer
Damages as do not exceed such threshold amount; provided, however, [TRADE
SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
Notwithstanding anything to the contrary, no claim for indemnification shall be
brought pursuant to this Section 9.3.1 with respect to any risk, matter or Liability
assumed by Buyer pursuant to Section 5.12
9.3.2 By Buyer. Buyer shall indemnify, save and hold harmless, Seller, its
Affiliates, and their respective employees, Representatives, officers, directors and
agents (collectively, the “Seller Indemnified Parties”) from and against any and all
costs, losses (including diminution in value), liabilities (including liabilities arising
under principles of strict or joint and several liability), damages, lawsuits,
deficiencies, claims and expenses (whether or not arising out of third-party claims),
including interest, penalties, additions, travel expenses, wages allocable to loss of
employee time, reasonable attorneys’ fees and all amounts paid in investigation,
defense or settlement of any of the foregoing (collectively, the “Seller Damages”),
incurred in connection with or arising out of or resulting from (a) any breach or
violation of any covenant or agreement of Buyer set forth in this Agreement or any
Buyer Document, (b) any breach or inaccuracy of any representation or warranty,
covenant or agreement (including the risks, matters and Liabilities assumed by Buyer
pursuant to Section 5.12) made by Buyer in this Agreement or any other Buyer
Document, including any breach by Buyer or Buyer’s authorized representative of its
obligations under Section 5.5.3, (c) if the Closing has occurred, any failure of Buyer
to pay, discharge or perform any of the Assumed Liabilities as and when due, or (d)
any fraud, willful misconduct or negligence in performance of this Agreement by
Buyer. Any indemnity payment required hereunder shall be accompanied by a
statement, certified to by an officer of Seller, showing in reasonable detail the
calculation of the amount of the indemnity payment. Notwithstanding anything to the
contrary, no claim for indemnification shall be brought pursuant to this Section 9.3.2
until the total Seller Damages for which Buyer would be liable under this Section
9.3.2 exceeds in the aggregate a threshold amount equal to [TRADE SECRET
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DATA BEGINS
TRADE SECRET
DATA ENDS] and, once such amount is exceeded, indemnification may be sought
for the full aggregate amount of Seller Damages, including indemnification for such
amounts of Seller Damages as do not exceed such threshold amount; provided,
however, [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
9.3.3 Defense of Claims. If any action or proceeding (including any
governmental investigation or inquiry) shall be brought or asserted or threatened to be
brought or asserted against an indemnified Party in respect of which indemnity may
be sought from an indemnifying Party, such indemnified Party shall notify the
indemnifying Party in writing as promptly as practicable (and in any event within ten
(10) Business Days after the service of the citation or summons); provided, however,
that the failure of the indemnified Party to give timely notice hereunder shall relieve
the indemnifying Party of its indemnification obligations hereunder only if, and only
to the extent that, such failure caused Buyer Damages or Seller Damages (as
applicable) for which the indemnifying Party is obligated to be greater than they
would have been had the indemnified Party given timely notice, and the indemnifying
Party promptly shall assume the defense thereof, including the employment of
counsel satisfactory to such indemnified Party and the payment of all expenses. Such
indemnified Party shall have the right to employ separate counsel in any such action
and to participate in the defense thereof, but the fees and expenses of such counsel
shall be the expense of such indemnified Party unless (a) the indemnifying Party has
agreed to pay such fees and expenses, (b) the indemnifying Party shall have failed to
assume the defense of such action or proceeding or shall have failed to employ
counsel reasonably satisfactory to such indemnified Party in any such action or
proceeding in either case, promptly and no more than five (5) Business Days after the
receipt of notice pursuant to the preceding sentence or such shorter period of time as
shall be reasonable under the circumstances, or (c) the named parties to any such
action or proceeding (including any impleaded parties) include both such indemnified
Party and the indemnifying Party, and such indemnified Party shall have been advised
by counsel that there may be one or more legal defenses available to such indemnified
Party that are different from or additional to those available to the indemnifying Party
(in which case, if such indemnified Party notifies the indemnifying Party in writing
that it elects to employ separate counsel at the expense of the indemnifying Party, the
indemnifying Party shall not have the right to assume the defense of such action or
proceeding on behalf of such indemnified Party). The indemnifying Party shall not
be liable for any settlement of any such action or proceeding effected without its
written consent (unless such consent is unreasonably withheld), but if settled with its
written consent or without its written consent (if such written consent is unreasonably
withheld), or if there be a final judgment for the plaintiff in any such action or
proceeding, the indemnifying Party shall indemnify and hold harmless such
indemnified parties from and against any loss or liability by reason of such settlement
or judgment. The indemnified Party shall not be required to consent to the settlement
of any action or proceeding if such settlement involves anything other than the
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payment of money by the indemnifying Party in full settlement of such action or
proceeding.
9.3.4 Exclusive Remedy. Notwithstanding anything in this Agreement to
the contrary and subject to the following sentence, the indemnification obligations of
the Parties contained in this Section 9.3 (and subject to the limitations set forth in
Section 9.4) shall be the sole and exclusive remedy of the Parties hereto, their
Affiliates, successors and assigns with respect to any and all claims for Buyer
Damages or Seller Damages, as applicable, sustained or incurred arising out of or
relating to any breach of any representation or warranty, covenant or agreement
contained in this Agreement, including any claims with respect to environmental,
health and safety matters; and each Party hereby expressly waives and disclaims, and
agrees that it shall not assert, any right, remedy (including the remedy of rescission)
or claim in respect of any such breach or losses based on any cause or form of action
whatsoever, except as and to the extent permitted in this Section 9.3; provided,
however, that (i) the Parties may seek to enforce the provisions of this Agreement by
injunction, specific performance or other equitable relief, (ii) either Party may seek
any and all judicial relief with respect to any default by the other Party to satisfy or
the breach by the other Party of any of its obligations to pay any amounts due and
owing to such Party under this Agreement, and (iii) such limitation shall not limit
Buyer’s right to Liquidated Damages or return of the Deposit, subject to the terms of
this Agreement applicable thereto. This provision shall not limit any available
remedy of the Party seeking indemnification for any losses resulting from, or related
to, the fraud or willful misconduct of the other Party. Nothing in this Section 9.3.4 is
intended to constitute a waiver or limitation of any rights that any Party (or their
respective Affiliates) may have to assert claims against third parties.
9.3.5 Acknowledgements. Seller and Buyer each acknowledge that (i) only
representations, warranties, covenants or agreements expressly made in this
Agreement or the Ancillary Agreements will be deemed to be representations,
warranties, covenants or agreements for purposes of this Agreement, and (ii) neither
Party has relied on any representation, warranty, covenant or agreement not expressly
made in this Agreement or the Ancillary Agreements in consummating the
transactions herein.
9.4.
Limitation of Liability. SUBJECT TO THE NEXT SENTENCE, IN NO EVENT
SHALL EITHER PARTY BE LIABLE FOR ANY LOST OR PROSPECTIVE PROFITS NOR
ANY PUNITIVE, EXEMPLARY, CONSEQUENTIAL, INCIDENTAL OR INDIRECT
LOSSES OR DAMAGES (IN TORT, CONTRACT OR OTHERWISE) UNDER OR IN
RESPECT TO THIS AGREEMENT. THE FOREGOING EXCLUSION SHALL NOT (A)
PRECLUDE RECOVERY, WHERE APPLICABLE, OF LIQUIDATED DAMAGE
AMOUNTS HEREUNDER, OR (B) PRECLUDE RECOVERY UNDER ANY INDEMNITY
IN ARTICLE 9, TO THE EXTENT THAT INDEMNIFICATION OBLIGATIONS FOR
DAMAGES TO A THIRD PARTY COULD BE DEEMED TO BE CONSEQUENTIAL,
SPECIAL, EXEMPLARY, INDIRECT, OR INCIDENTAL LOSSES OR DAMAGES.
Notwithstanding any other provision of this Agreement, including Section 9.3, (x) the aggregate
Buyer Damages to which the Buyer Indemnified Parties shall be entitled under Section 9.3.1
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shall not exceed the Seller Indemnity Cap, and the aggregate Seller Damages to which the Seller
Indemnified Parties shall be entitled under Section 9.3.2 shall not exceed [TRADE SECRET
DATA BEGINS
TRADE
SECRET DATA ENDS] provided, however, that neither Party shall have any further liability
under Section 9.3.1 or Section 9.3.2, as applicable, unless a claim is timely asserted during the
applicable survival period set forth in Section 9.2 hereof; provided, further, that the limitation of
liability set forth in this third sentence of this Section 9.4 is unrelated to and shall not apply to
Seller’s or Buyer’s (as applicable) liability in respect of (a) Seller’s obligation to remove any
Encumbrances on the Company Assets, other than Permitted Encumbrances, created or suffered
to exist by Seller or the Company, (b) the payment by Seller of Excluded Liabilities, (c) Seller’s
obligations in respect of Section 2.2.3, (d) Seller’s or Buyer’s obligations to make litigation
expense payments pursuant to Section 12.6, (e) Buyer’s obligation to pay the Purchase Price or
the Assumed Liabilities or (f) Buyer’s failure to close if all of the conditions precedent to
Closing set forth in Section 3.3 have been satisfied.
9.5.
Further Assurances.
9.5.1 Further Assurances. Subject to the provisions of Section 8.3, each of
the Parties shall use commercially reasonable efforts to take all action and to do all
things necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement. Seller shall cooperate in the
preparation and audit of any financial statements required to be filed with any Person,
including by giving Buyer and their independent certified public accountants
reasonable access to work papers and other records, documents and written
information of Seller and Seller’s independent certified public accountants used to
prepare or audit, or reasonably related to the preparation or audit of, all financial
statements of Seller to the extent reasonably required for the preparation of such
financial statements.
9.5.2 Taxes. Each Party hereto agrees to furnish or cause to be furnished to
each other, upon request, as promptly as practicable, such information and assistance
(including access to books and records) relating to Seller and the Project, as is
reasonably necessary for the preparation of any return with respect to Taxes, claim for
refund or audit, and the prosecution or defense of any claim, suit or proceeding
relating to Taxes.
9.5.3
Completion.
(a)
In the event Seller exercises its right to cause Project Substantial
Completion or WTG Substantial Completion, as applicable, to occur pursuant to
Section 3.3.4(b), promptly, but in no event later than five (5) days following the
date that the Project achieves Interconnection, Seller shall commence, and shall
diligently pursue to completion, the satisfaction of those conditions set forth in
Section 3.3 that could not be fulfilled or satisfied as of Closing Date due to the
inability of the Project to achieve Interconnection, including the delivery of a
certificate of the Independent Engineer demonstrating satisfaction of such
conditions. Nothing in Section 3.3.4(b) nor this Section 9.5.3 or otherwise shall
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relieve Seller of its obligation to timely demonstrate full compliance with the
conditions set forth in Section 3.3 that were not (without application of Section
3.3.4(b)) fulfilled or satisfied as of the Closing Date once the Project has achieved
Interconnection, and Seller shall retain all Liabilities hereunder and under the
EPC Contract and Turbine Supply Agreement with respect to such obligation,
except to the extent that actions taken by Buyer or the Company after the Closing
prevent Seller from satisfying such obligation.
(b)
Notwithstanding any provision herein to the contrary, following
the Closing, Seller shall retain all Liabilities of the Company in respect of the
EPC Agreement and Turbine Supply Agreement (except to the limited extent such
Liabilities are included in the Assumed Liabilities) and, Seller shall promptly
remediate any WTG site on which construction was commenced (whether
grading, excavation, pouring a foundation, erection or otherwise) on a WTG that
was not brought to WTG Substantial Completion and such site shall be returned
to the condition in which it existed prior to commencement of construction to the
extent required and in accordance with the terms of the applicable Land Contracts
and applicable Law. Buyer shall cause, at no cost to the Company or Buyer, the
Company to comply with all commercially reasonable requests from Seller in
connection with Seller’s obligations and rights under this Section 9.5.3; provided,
however, that in no event shall the Company be required to consent to any
modification, amendment or supplement of the EPC Agreement or the Turbine
Supply Agreement, the Turbine Warranty and O&M Agreement or waive or
consent to the variance of any of the terms thereof, or issue any consent
thereunder.
(c)
In the event that Final Completion has not occurred within ninety
(90) days following the Guaranteed Completion Date, Buyer may, without
limiting any other rights or remedies, cause Final Completion to occur (including
the completion of any Punch List Items or Curative Work) with respect to any
portion of the Project previously delivered to Buyer at a Closing and for which
Final Completion has not occurred, at Seller’s expense.
ARTICLE 10.
DELAY DAMAGES AND SECURITY
10.1.
Delay Damages. [TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
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10.2. Payment of Delay Damages. On the first Business Day of each week following
the Target Closing Date until the Closing Date, Seller shall pay Buyer all accrued and unpaid
Delay Damages by (a) wire transfer of immediately available funds to the account specified in
writing by Buyer for such purpose, (b) if so requested in writing by Buyer, by such alternative
means of delivery of immediately available funds or other method of payment as is reasonably
acceptable to Seller or (c) by drawing against the Deposit Refund Letter of Credit.
10.3. Nature of Liquidated Damages. The Parties acknowledge and agree that because
of the unique nature of the Project and the unavailability of adequate substitutes, it is difficult or
impossible to determine with precision the amount of damages that would or might be incurred
by Buyer as a result of Seller’s failure to achieve Closing by the Target Closing Date or the
Guaranteed Closing Date. It is understood and agreed by the Parties that (a) Buyer shall be
disadvantaged by failure of Seller to meet such obligations, (b) it would be impracticable or
extremely difficult to quantify the amount of time lost to Buyer’s disadvantage resulting
therefrom, (c) any sums which would be payable under Section 10.2 or Section 11.1.3 are in the
nature of liquidated damages, are fair and reasonable and do not constitute penalties, and (d)
such payments represent a reasonable estimate of damages, and shall, without duplication, be the
sole and exclusive remedy of Buyer with respect to any such failure by Seller.
10.4.
Security for Liquidated Damages; Refund of Deposit.
10.4.1 Delay Damages and Termination Payment Guaranty. To secure
payment of its obligation to pay Delay Damages and the Termination Payment, Seller
shall deliver the Guaranty to Buyer on the Effective Date.
10.4.2 Deposit Refund Letter of Credit. [TRADE SECRET DATA
BEGINS
TRADE SECRET DATA
ENDS]
ARTICLE 11.
EXTENSION AND TERMINATION
11.1.
Termination; Extension.
11.1.1 Termination by Buyer. This Agreement may be terminated prior to the
Closing by Buyer upon written notice to Seller of such termination (or, in the case of
a termination under clause (b) below, upon the lapse of the period for Seller to give a
notice under clause (b)(vi)) as follows:
(a)
If the Parties have not agreed upon a plan for the development and
construction of the Project that the Parties believe will result in the Project
satisfying the Under Construction requirement prior to the PTC Expiration Date
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(as the same may be amended pursuant to Section 8.7, the “Under Construction
Plan”) (to be attached to this Agreement as Exhibit K when agreed upon by the
Parties), and the form of Under Construction Certificates to be attached as
Exhibits J-1 and J-2 hereto, [TRADE SECRET DATA BEGINS
(b)
(i)
(ii)
(iii)
TRADE
SECRET DATA ENDS]
provided further that:
(iv)
any notice of termination under clause (b)(i), (ii) or (iii)
above shall be given, if at all, on or before ten (10) Business Days after
Buyer’s receipt of the Optional Interconnection Study (for a termination
under clause (b)(i)), the DPPS (for a termination under clause (b)(ii)), or
the final form of the Interconnection Agreement (for a termination under
clause (b)(iii)), and if the termination notice is not given by the applicable
date Buyer shall be deemed to have irrevocably waived its right to
terminate this Agreement under clause (b)(i), (ii) or (iii), as applicable;
(v)
[TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
(vi)
if Buyer gives a termination notice under clause (b)(i), (ii)
or (iii) above, Seller shall have the right, but not the obligation, to notify
Buyer, within ten (10) Business Days after receipt of Buyer’s termination
notice, that [TRADE SECRET DATA BEGINS
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TRADE SECRET
DATA ENDS] if Seller gives such notice Buyer’s termination notice
shall be deemed withdrawn, Buyer’s right to terminate this Agreement
under clause (b)(i), (ii) or (iii), as applicable, shall be deemed irrevocably
waived and this Agreement shall not terminate;
(c)
if the Effective Date has not occurred by [TRADE SECRET
DATA BEGINS
TRADE SECRET DATA ENDS]
in the event the Closing has not occurred, or the conditions
(d)
precedent to Closing in favor of Buyer have not been fulfilled or waived, on or
before the Guaranteed Completion Date effective immediately upon receipt of
notice to Seller, which notice may be served at Buyer’s election, in its sole
discretion and without further explanation; provided, however, that Buyer may not
terminate this Agreement pursuant to this Section 11.1.1(d) if Buyer’s failure to
fulfill any material obligation under this Agreement has been the cause of, or
resulted in, the failure of the occurrence of the Closing or failure of any such
conditions precedent to be fulfilled on or prior to the Guaranteed Completion
Date; or
(e)
if any Authority shall have issued an order, decree or ruling or
taken any other action restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and nonappealable; or
(f)
if Seller has abandoned the Project; or
(g)
as provided in Section 5.12 or 5.13; or
(h)
[TRADE SECRET DATA BEGINS
TRADE SECRET DATA
ENDS]
(i)
upon the dissolution or bankruptcy of Seller; or
(j)
[TRADE SECRET DATA BEGINS
TRADE
SECRET DATA ENDS]
11.1.2 Termination by Seller. This Agreement may be terminated prior to the
Closing by Seller upon written notice to Buyer of such termination as follows:
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(a)
[TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS]
(b)
if the Effective Date has not occurred by [TRADE SECRET
DATA BEGINS
TRADE SECRET DATA ENDS]
(c)
if Interconnection has not occurred by [TRADE SECRET DATA
BEGINS
TRADE
SECRET DATA ENDS] or
(d)
in the event the Closing has not occurred, or the conditions
precedent to Closing in favor of Seller have not been fulfilled or waived, on or
before the Guaranteed Completion Date effective immediately upon receipt of
notice to Buyer, which notice may be served at Seller’s election, in its sole
discretion and without further explanation; provided, however, that Seller may not
terminate this Agreement pursuant to this Section 11.1.2(d) if Seller’s failure to
fulfill any material obligation under this Agreement has been the cause of, or
resulted in, the failure of the occurrence of the Closing or failure of any such
conditions precedent to be fulfilled on or prior to the Guaranteed Completion
Date; or
(e)
upon a repudiation of this Agreement by Buyer; or
(f)
as provided in Section 5.13; or
(g)
[TRADE SECRET DATA BEGINS
TRADE SECRET DATA
ENDS] or
(h)
upon the dissolution or bankruptcy of Buyer.
11.1.3 Termination Damages.
(a)
In the event of termination of this Agreement by Buyer as provided
in Section 11.1, Seller shall refund the Deposit (if it has been paid by Buyer) to
Buyer, within five (5) Business Days after such termination of this Agreement by
wire transfer of immediately available funds to the account specified in writing by
Buyer for such purpose or, if so requested in writing by Buyer, by such alternative
means of delivery of immediately available funds or other method of payment as
is reasonably acceptable to Seller.
(b)
[TRADE SECRET DATA BEGINS
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(c)
TRADE SECRET DATA ENDS]
11.2. Buyer’s Option to Purchase Project in Certain Circumstances After Guaranteed
Completion Date. If (a) the Effective Date occurs but Closing does not occur by the Guaranteed
Completion Date due to the non-satisfaction of any of the conditions set forth in Section 3.3
(other than Section 3.3.6) and this Agreement is thereafter terminated in accordance with Section
11.1; (b) Seller subsequently, within two (2) years following the date of such termination (the
“Option Period”), achieves Project Substantial Completion for the Project in excess of [TRADE
SECRET DATA BEGINS
TRADE SECRET DATA ENDS]on the Site; and (c) the
failure to meet the conditions set forth in Section 3.3 is not a result of any failure to perform
hereunder by Buyer, then, Buyer shall, at any time during the Option Period, have the option to
purchase the Purchased Interests on the same terms and conditions set forth in this Agreement,
[TRADE SECRET DATA BEGINS
TRADE SECRET DATA ENDS] except that (i) references herein to the Closing Date
shall, upon and following the exercise of such option, be deemed to refer to the date of such
exercise, and (ii) Seller shall be permitted to update Seller’s Schedules to ensure that the
representations and warranties are true and correct as of the date of exercise. Such option shall
be exercisable upon written notice delivered to Buyer at any time prior to the expiration of the
Option Period. If the Effective Date occurs, this provision shall expressly survive any
termination of this Agreement. The rights of Buyer under this Section 11.2 shall be subject and
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subordinate to the rights of the lenders for the financing described in Section 4.1.1 and Buyer
shall execute such subordinations and other documents as may be requested by such lenders.
ARTICLE 12.
MISCELLANEOUS
12.1. Payment Instructions. All amounts payable under this Agreement shall be made
pursuant to the payment instructions provided by the payee of such amount to the payor thereof
in writing on or before the date on which such payment is due.
12.2. Assignment. Seller may not assign any of its rights or obligations under this
Agreement without the prior written consent of Buyer; provided, however, that no such consent
shall be required with respect to the assignment by Seller to any Affiliate of Seller, or the
assignment or collateral assignment of this Agreement by Seller to, or for the benefit of, a lender
under the financing in respect of the development or construction of the Project. In connection
with any such assignment to a lender, Buyer shall execute and deliver consent forms,
acknowledgements and other documents reasonably requested by the financing party, in form
and substance reasonably acceptable to Buyer to effect or to evidence such assignment, provided,
that nothing in this Section 12.2 shall require Buyer to waive any of its rights under, or amend
any provision of, this Agreement. Buyer may not assign any of its rights or obligations under
this Agreement; provided, however, that upon prior notice to Seller, Buyer may assign its rights
or obligations under this Agreement to any Affiliate of Buyer; provided further, that Buyer shall
not be released of its obligations under this Agreement unless Seller agrees in writing that such
Affiliate has the financial and other capabilities to assume all of the obligations of Buyer under
this Agreement.
12.3. Notices. All notices, requests, demands and other communications which are
required or may be given under this Agreement, including all documents delivered pursuant to
this Agreement, shall be in writing and shall be deemed to have been duly given when received if
personally delivered; the day after it is sent, if sent for next day delivery to a domestic address by
recognized overnight delivery service (e.g., Federal Express or UPS); and upon receipt, if sent by
certified or registered mail, return receipt requested. In each case notice shall be sent to:
If to Seller, to:
RES America Developments Inc.
11101 West 120th Avenue, Suite 400
Broomfield, Colorado 80021
Attention: Brian Evans, President
Facsimile: 303-439-4299
With a copy to:
RES America Developments Inc.
11101 West 120th Avenue, Suite 400
Broomfield, Colorado 80021
Attention: Marcia Emmons, General Counsel
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Facsimile: 303-439-4299
If to Buyer, to:
Northern States Power Company
414 Nicollet mall, 7th Floor
Minneapolis, MN 55401-1927
Attention: Paras M. Shah, Director
Business Development
Facsimile: (612) 215-4575
with a copy to:
Northern States Power Company
414 Nicollet Mall
Minneapolis, MN 55401-1927
Attention: Scott Wilensky,
Sr. Vice President and General Counsel
Facsimile: (612) 215-9025
with a copy to (which copy shall not constitute notice hereunder):
Dorsey & Whitney LLP
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402-1498
Attention: Michael Pignato
Facsimile: (612) 340-2643
E-mail: pignato.michael@dorsey.com
or to such other place and with such other copies as a Party may designate as to itself by written
notice to the other Party.
12.4.
Choice of Law; Consent to Jurisdiction; Service of Process.
12.4.1 Governing Law. This Agreement shall be construed, interpreted and
the rights of the Parties determined in accordance with the Laws of the State of New
York without reference to its choice of law provisions; provided, however, the laws of
the State of Minnesota shall control this Agreement with respect to matters of
conveyance and other real property and permitting matters necessarily subject to the
laws of the State of Minnesota.
12.4.2 Executive Dispute Resolution. Upon a Party’s written notification to
the other Party of a dispute, which notification must include a written explanation of
the dispute and the material particulars of the notifying Party’s position as to the
dispute, each Party shall nominate one (1) executive representative with the authority
to bind such Party. The nominated representatives shall meet not later than ten (10)
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Business Days thereafter to attempt in good faith to resolve the dispute and to
produce written terms of settlement for the dispute (a “Settlement Agreement”). A
Settlement Agreement executed by each executive representative shall serve as
conclusive evidence of the resolution of such dispute. If the executive representatives
do not produce and execute the Settlement Agreement within forty-five (45) days
after the date of the first meeting or within a longer period agreed to by each
executive representative, then, either Party may upon written notice to the other Party,
pursue all its rights and remedies provided at law or equity or otherwise in this
Agreement.
12.4.3 Jurisdiction. The Parties hereto hereby irrevocably submit to the
jurisdiction of the federal or state courts located in Hennepin County, Minnesota, over
any dispute arising out of or relating to this Agreement or any of the transactions
contemplated hereby; and each Party hereby irrevocably agrees that all claims in
respect of such dispute or proceeding shall be heard and determined in such federal
courts unless such federal courts do not have jurisdiction in which event such dispute
or proceeding shall be heard and determined in such state courts. Each Party hereby
irrevocably waives, to the fullest extent permitted by applicable Law, any objection
which it may now or hereafter have to the laying of venue of any such dispute
brought in such court or any defense of inconvenient forum.
12.4.4 Service of Process. Each of the Parties hereto hereby consents to
process being served by the other Party to this Agreement in any suit, action or
proceeding of the nature specified in Section 12.4.3 by mailing of a copy thereof in
accordance with the provisions of Section 12.3 hereof.
12.5. Waiver Of Jury Trial. EACH OF THE PARTIES HERETO WAIVES ANY
RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED ON,
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT
OR ACTION OF ANY PARTY HERETO IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY.
12.6. Attorneys’ Fees and Litigation Expenses. In the event any action is commenced
to recover damages or enforce any rights or obligations under this Agreement, and the Party
bringing such action is found by a court of law to have brought such action in bad faith, then the
prevailing Party in such action shall be entitled to recover its attorney fees, including the
reasonable fees of in-house counsel, expert fees, and all reasonable out-of-pocket expenses
incurred in enforcing the prevailing Party’s rights under this Agreement, regardless of whether
those fees, costs or expenses are otherwise recoverable as costs in the action, including all fees
and expenses incurred in connection with the investigation and preparation of the action before it
is filed and upon appeal.
12.7. Entire Agreement; Amendments and Waivers. This Agreement contains the
entire understanding of the Parties with respect to the subject matter hereof and supersedes all
prior agreements and commitments with respect thereto. No supplement, modification or waiver
of this Agreement or waiver of any breach of or failure to comply with any representation,
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warranty, covenant, agreement or condition herein shall be binding unless executed in writing by
the Party to be bound thereby. No waiver of any of the provisions of this Agreement or waiver
of any breach of or failure to comply with any representation, warranty, covenant, agreement or
condition herein shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar) or any other breach of or failure to comply with any representation,
warranty, covenant, agreement or condition herein, nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
12.8. Multiple Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
12.9. Expenses. Except as otherwise specified herein, each Party hereto shall pay its
own legal, accounting, out-of-pocket and other expenses incident to this Agreement and to any
action taken by such Party in preparation for carrying this Agreement into effect.
12.10. Invalidity. In the event that any one or more of the provisions contained in this
Agreement or in any other instrument referred to herein (other than a requirement to make
payments hereunder), shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by Law, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement or any other such
instrument.
12.11. Titles. The recitals to this Agreement and the titles, captions or headings of the
Articles and Sections herein are inserted for convenience of reference only and are not intended
to be a part of or to affect the meaning or interpretation of this Agreement.
12.12. Burden and Benefit. This Agreement shall be binding upon and shall inure to the
benefit of the Parties hereto and their respective successors and permitted assigns. Buyer
Indemnified Parties and Seller Indemnified Parties shall be third party beneficiaries of this
Agreement and shall be entitled to indemnification, with full rights of enforcement as though
each such Person were a signatory to this Agreement. Except as provided in this Section 12.12,
there shall be no third-party beneficiaries of this Agreement.
12.13. Cumulative Remedies. All rights and remedies of either Party hereto are
cumulative of each other and of every other right or remedy such Party may otherwise have at
law or in equity, and the exercise of one or more rights or remedies shall not prejudice or impair
the concurrent or subsequent exercise of other rights or remedies.
12.14. No Partnership or Joint Venture. The Parties hereto do not intend to create a
partnership or joint venture by virtue of this Agreement. No Party shall owe any fiduciary duty
to any other Party by virtue of this Agreement or any other Seller Document or Buyer Document
or otherwise.
12.15. No Merger. This Agreement is a fully integrated complete agreement and is not
merged with or extinguished by any other agreement.
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12.16. Non-Interference. Seller agrees that as long as the Project is operating it will not,
and it will not permit any of its Affiliates to, develop, construct or operate any wind turbine
generator within a distance of three thousand (3,000) meters of any of the wind turbines in the
Project. Nothing in this Section 12.16 shall be deemed to prevent Seller or one of Seller’s
Affiliates from acting as the contractor for the construction of any wind project in such area so
long as neither Seller nor its Affiliates participated in the development or ownership of such
project. Provided that Seller is in compliance with this Section 12.16, Buyer agrees that it will
not, and that it will cause the Company and its Affiliates not to, object or oppose any windpowered generating project proposed, developed or constructed by Seller or its Affiliates and
Buyer hereby waives and releases, and Buyer shall cause the Company and its Affiliates to waive
and release, (i) any setback requirement and (ii) any claims against Seller or its Affiliates based
on alleged interference with wind flows or other operational effects of any such project of Seller
or its Affiliates on the Project. If Seller or its Affiliates desire to develop, construct or operate
any wind turbine generator within a distance of three thousand (3,000) meters of any of the wind
turbines in the Project, Buyer agrees to cooperate with Seller to determine the wake effects, if
any, that such development may have on the Project and to consider in good faith proposed
arrangements acceptable to Buyer to waive or modify the restriction in the first sentence of this
Section 12.16.
[SIGNATURE PAGE FOLLOWS]
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PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
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Northern States Power Company
Attachment A – Page 1 of 147
PURCHASE AND SALE AGREEMENT
(BORDER WINDS)
Dated as of July 31, 2013
by and between
NORTHERN STATES POWER COMPANY
as Buyer
and
RES AMERICA DEVELOPMENTS INC.
as Seller
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 2 of 147
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS AND RULES OF INTERPRETATION ..........................................1 1.1. 1.2. Defined Terms ...............................................................................................................1 Rules of Interpretation .................................................................................................32 ARTICLE 2. PURCHASE AND SALE OF MEMBERSHIP INTERESTS.................................33 2.1. 2.2. 2.3. 2.4. 2.5. Purchase and Sale of Membership Interests ................................................................33 Purchase Price; Assumption of Liabilities...................................................................33 Mechanics of Closing ..................................................................................................38 Closing Costs ...............................................................................................................38 Post-Closing Statement................................................................................................40 ARTICLE 3. EFFECTIVENESS; BUYER’S CONDITIONS PRECEDENT TO
EFFECTIVENESS; BUYER’S CONDITIONS PRECEDENT TO THE CLOSING ..................41 3.1. 3.2. 3.3. Effectiveness ................................................................................................................41 Buyer’s Conditions Precedent to Effectiveness...........................................................42 Buyer’s Conditions Precedent to Closing ....................................................................47 ARTICLE 4. SELLER’S CONDITIONS PRECEDENT TO EFFECTIVENESS; SELLER’S
CONDITIONS PRECEDENT TO THE CLOSING......................................................................52 4.1. 4.2. Seller’s Conditions Precedent to Effectiveness ...........................................................52 Seller’s Conditions Precedent to Closing ....................................................................53 ARTICLE 5. PRE-CLOSING COVENANTS ..............................................................................54 5.1. 5.2. 5.3. 5.4. 5.5. 5.6. 5.7. 5.8. 5.9. 5.10. 5.11. 5.12. 5.13. 5.14. 5.15. Seller Pre-Closing Actions...........................................................................................54 Notification of Status of Pre-Closing Actions .............................................................55 Other Seller Actions.....................................................................................................55 Notification of Completion or Failure of Conditions ..................................................56 Inspection Rights; O&M Building...............................................................................56 Cooperation Prior to Effective Date ............................................................................57 Additional Reports .......................................................................................................57 Registrations and Qualifications ..................................................................................58 Notification of Force Majeure Event; Efforts to Mitigate ...........................................59 [BEGIN TRADE SECRET END TRADE SECRET] .....................59 Updated Title and Survey ............................................................................................59 Bird and Bat Conservation Strategy ............................................................................60 Regulatory Approval....................................................................................................61 Other Filings ................................................................................................................61 Turbine Supplier Change .............................................................................................62 i
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ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF SELLER..................................63 6.1. 6.2. 6.3. 6.4. 6.5. 6.6. 6.7. 6.8. 6.9. 6.10. 6.11. 6.12. 6.13. 6.14. 6.15. 6.16. 6.17. 6.18. 6.19. 6.20. 6.21. 6.22. 6.23. 6.24. 6.25. 6.26. Corporate Existence and Powers .................................................................................63 Company Existence and Powers..................................................................................63 Authority ......................................................................................................................63 Consents and Approvals ..............................................................................................64 No Conflicts .................................................................................................................64 Legal Proceedings........................................................................................................64 Compliance with Law ..................................................................................................64 Environmental Matters.................................................................................................64 Right and Title to Purchased Interests .........................................................................65 Right and Title to Company Assets .............................................................................65 Land Contracts; Real Property.....................................................................................65 Contracts ......................................................................................................................67 Permits .........................................................................................................................67 Finders..........................................................................................................................69 Intellectual Property.....................................................................................................69 No Other Agreements to Sell the Company Assets .....................................................69 Wind Data ....................................................................................................................69 Insurance ......................................................................................................................69 Reports .........................................................................................................................69 Tax Matters ..................................................................................................................70 Completed Project........................................................................................................70 Liabilities .....................................................................................................................70 Consents.......................................................................................................................70 Sufficient Funds ...........................................................................................................71 FAA Determinations of No Hazard to Air Navigation................................................71 Seller Project Warranty................................................................................................71 ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF BUYER ...................................72 7.1. 7.2. 7.3. 7.4. 7.5. 7.6. 7.7. 7.8. Corporate Existence and Powers .................................................................................72 Authority ......................................................................................................................72 No Conflicts .................................................................................................................72 Consents and Approvals ..............................................................................................73 Legal Proceedings........................................................................................................73 Finders..........................................................................................................................73 Sufficient Funds ...........................................................................................................73 Compliance With Laws................................................................................................73 ARTICLE 8. CERTAIN COVENANTS .......................................................................................73 8.1. 8.2. 8.3. 8.4. 8.5. No Breach of Representations and Warranties by Seller.............................................73 No Breach of Representations and Warranties by Buyer ............................................74 Consents and Reasonable Efforts.................................................................................74 Buyer Confidential Information...................................................................................74 Seller Confidential Information ...................................................................................75 ii
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8.6. 8.7. 8.8. 8.9. 8.10. 8.11. 8.12. Tax Matters ..................................................................................................................77 Maintain a Qualified Facility .......................................................................................79 Bird and Bat Conservation Strategy ............................................................................79 Non-Disparagement .....................................................................................................79 Confidentiality Regarding This Agreement.................................................................80 No Shop .......................................................................................................................80 Alternate WTG Locations............................................................................................81 ARTICLE 9. ACTIONS BY SELLER AND BUYER AFTER THE CLOSING DATE .............81 9.1. 9.2. 9.3. 9.4. 9.5. Records ........................................................................................................................81 Survival ........................................................................................................................81 Indemnifications ..........................................................................................................82 Limitation of Liability..................................................................................................85 Further Assurances.......................................................................................................85 ARTICLE 10. DELAY DAMAGES AND SECURITY ...............................................................87 10.1. 10.2. 10.3. 10.4. Delay Damages ............................................................................................................87 Payment of Delay Damages.........................................................................................87 Nature of Liquidated Damages ....................................................................................87 Security for Liquidated Damages; Refund of Deposit.................................................87 ARTICLE 11. EXTENSION AND TERMINATION...................................................................88 11.1. Termination; Extension................................................................................................88 11.2. Buyer’s Option to Purchase Project in Certain Circumstances After Guaranteed
Completion Date ..........................................................................................................92 ARTICLE 12. MISCELLANEOUS ..............................................................................................92 12.1. Payment Instructions....................................................................................................92 12.2. Assignment ..................................................................................................................92 12.3. Notices .........................................................................................................................93 12.4. Choice of Law; Consent to Jurisdiction; Service of Process .......................................94 12.5. Waiver Of Jury Trial....................................................................................................95 12.6. Attorneys’ Fees and Litigation Expenses ....................................................................95 12.7. Entire Agreement; Amendments and Waivers ............................................................95 12.8. Multiple Counterparts ..................................................................................................95 12.9. Expenses ......................................................................................................................95 12.10. Invalidity ......................................................................................................................95 12.11. Titles ............................................................................................................................96 12.12. Burden and Benefit ......................................................................................................96 12.13. Cumulative Remedies ..................................................................................................96 12.14. No Partnership or Joint Venture ..................................................................................96 12.15. No Merger....................................................................................................................96 12.16. Non-Interference ..........................................................................................................96 iii
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LIST OF SCHEDULES
Schedule 1.1(a)
Schedule 1.1(b)
Schedule 1.1(c)
Schedule 1.1(d)
Schedule 1.1(e)
Schedule 1.1(f)
Schedule 2.5.5
Schedule 3.2.3(b)
Schedule 6.4
Schedule 6.6
Schedule 6.7
Schedule 6.8
Schedule 6.11
Schedule 6.12
Schedule 6.13
Schedule 6.15
Schedule 6.17
Schedule 6.18
Schedule 6.19
Schedule 6.22
Schedule 7.4
Schedule 7.5
Schedule 8.12
Buyer’s Knowledge
NSP Drawing Standards
Electrical Works
O&M Facility Real Property
Seller’s Knowledge
Substation Real Property
Allocation Categories
Title Policy Endorsements
Seller Consents and Approvals
Seller Litigation
Compliance with Law
Environmental Matters
Land Contracts
Contracts
Permits
Third-Party Intellectual Property Rights
Wind Data
Insurance
Reports
Liabilities
Buyer Consents and Approvals
Buyer Litigation
Alternate WTG Locations
LIST OF EXHIBITS
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J-1
Exhibit J-2
Exhibit K
Site Description
Form of Guaranty
Form of Membership Assignment Agreement
Form of Easement Amendment
Form of Non-Disturbance Agreement
Site Plan
Form of Effective Date Certificate
Project Quality Assurance Plan
Technical Specifications
Form of Initial Under Construction Certificate
Form of Final Under Construction Certificate
Under Construction Plan
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PURCHASE AND SALE AGREEMENT
(BORDER WINDS)
THIS PURCHASE AND SALE AGREEMENT (BORDER WINDS) (this “Agreement”)
dated as of July 31, 2013 (the “Signing Date”), is made and entered into by and between
Northern States Power Company, a Minnesota corporation (“Buyer”), and RES America
Developments Inc., a Delaware corporation (“Seller”).
RECITALS
Sequoia Energy US Inc., a Delaware corporation (“Sequoia”), was the original developer
of the Project and owns and holds certain rights and assets with respect to the Project.
Seller has formed Border Winds Energy, LLC, a Delaware limited liability company (the
“Company”), wholly owned by Seller, which shall own all of the rights and assets with respect to
the Project on or before the Effective Date.
Sequoia and the Company have entered into an Asset Purchase Agreement, dated of even
date herewith (the “Company-Sequoia Agreement”) that provides for the purchase by the
Company of all of Sequoia’s rights and assets with respect to the Project.
Buyer desires to purchase (or cause an Affiliate of Buyer to purchase) and Seller desires
to sell one hundred percent (100%) of the membership interests of the Company pursuant to the
terms and subject to the conditions of this Agreement.
This Agreement is intended to become effective on the Effective Date (as defined herein),
except as expressly set forth in Section 3.1.
AGREEMENT
NOW THEREFORE, in consideration of the sums to be paid to Seller by Buyer
hereunder and the covenants and agreements set forth herein, the Parties agree as follows:
ARTICLE 1.
DEFINITIONS AND RULES OF INTERPRETATION
1.1.
Defined Terms. For purposes of this Agreement, the following capitalized terms
shall have the following meanings:
“Acquisition Proposal” is defined in Section 8.11(a)(i).
“Adjusted Purchase Price” [BEGIN TRADE SECRET
END TRADE
SECRET]
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“Adverse Determination Tax Attorney” means a regionally-recognized law firm
that possesses substantial expertise with tax controversy matters, is engaged by Seller (at
Seller’s sole expense) and is selected by Seller, subject to Buyer’s approval not to be
unreasonably withheld, conditioned or delayed.
“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is under
common control with that Person. The term “control” (including, with correlative
meaning, the terms “controlled by” and “under common control with”), as used with
respect to any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether through
the ownership of voting securities or partnership interests, by contract or otherwise.
“Agreement” means this Purchase and Sale Agreement (Border Winds), including
all Exhibits and Schedules hereto (as the Exhibits and Schedules hereto may be updated
in accordance with Section 5.6 or delivered in accordance with Section 3.1.2), as the
same may be modified, amended or supplemented from time to time in accordance with
Section 12.7.
“Alternate WTG Locations” is defined in Section 8.12.
“Ancillary Agreements” means the Membership Interest Assignment, and any
other agreement or instrument executed and delivered by the Parties or by either Party or
any Affiliate of such Party to the other Party pursuant to this Agreement.
“Applicable Standards” means Prudent Industry Practices and Prudent
Engineering Practices; provided, however, that if any portion of such standards conflicts
with or is less stringent than any Laws applicable to the Parties, the Company or the
Project, such conflicting or less stringent portions of such standards shall be deemed
replaced by the conflicting or more stringent requirements of such Laws.
“As Built Drawings” means a complete set of as built drawings prepared by
Contractor in accordance with the requirements set forth in the EPC Agreement and the
NSP Drawing Standards, which accurately and completely represent the physical
placement of all WTGs and Infrastructure Facilities as assembled, erected and installed.
“Assumed Liabilities” means:
(a)
the Permitted Encumbrances;
(b)
those obligations of the Company accruing or arising, or covenants
or agreements of the Company to be performed (other than indemnification
obligations for matters accruing or arising prior to the Closing Date), from and
after the Closing Date under the Land Contracts, Permits, Permit Applications,
Interconnection Agreement or any related agreements including Interconnection
Study Agreements (as defined in the Interconnection Agreement) (except as set
forth in clauses (d) and (vii) below), Interconnection Rights, the EPC Agreement
(except as set forth in clause (vi) below) and other Contracts to which the
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Company is a party at the time of the Closing (including any liability for Taxes
for such Land Contracts, Permits, Permit Applications, Interconnection
Agreement (except as set forth in clauses (d) and (vii) below), Interconnection
Rights, the EPC Agreement (except as set forth in clause (vi) below) and other
Contracts;
(c)
other than as provided for in this Agreement, any Liability arising
from and after the Closing Date with respect to the ownership or operation of the
Project; and
(d)
[BEGIN TRADE SECRET
END TRADE SECRET]
provided that, without in any way broadening the scope of Assumed Liabilities as
described in the foregoing provisions of this definition, Assumed Liabilities shall not
include:
(i)
any Liability of the Company, Seller or its Affiliates for
Taxes accruing or arising before the Closing Date with respect to
Company Assets;
(ii)
any Liability of the Company, Seller or its Affiliates for
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby;
(iii)
any Liability under the Land Contracts, Permits, Permit
Applications, Interconnection Rights or Contracts to which the Company
is a party at Closing to the extent such Liability, but for a breach or default
by Seller or any of its Affiliates or a waiver or extension given to or by
Seller or any of its Affiliates, would have been paid, performed or
otherwise discharged on or prior to the Closing Date or to the extent such
Liability arises out of any such breach, default, waiver or extension given
to or by Seller or any of its Affiliates;
(iv)
any obligations or Liabilities prorated to Seller under
Section 2.4.2;
(v)
any Liability arising in respect of any portion of the
Company Assets with respect to which Project Substantial Completion has
not occurred unless and until Project Substantial Completion occurs with
respect thereto;
(vi)
any Liability of the Company under the EPC Agreement or
the Turbine Supply Agreement (including any payment obligations
thereunder whether such payments are due prior to or after the Closing)
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other than non-monetary covenants and agreements of the Company
thereunder to be performed after the Closing that are incidental to the
ownership of the Project and approved by Buyer prior to the Effective
Date in connection with its review and approval of the EPC Agreement
and Turbine Supply Agreement; and
(vii)
[BEGIN TRADE SECRET
END TRADE SECRET]
“Authority” means any federal, state, local or other governmental, judicial, public
or statutory instrumentality, tribunal, agency, authority, body or entity, in each case,
domestic or foreign, or any political subdivision thereof having legal jurisdiction over the
matter or Person in question.
“Bird and Bat Assessments” means the bird and bat surveys and nest surveys
conducted with respect to the Project prior to the Signing Date.
“Bird and Bat Conservation Strategy” means the strategy for bird and bat
protection with respect to the development, construction, commissioning and operation of
the Project developed by Seller, in consultation with the FWS and other applicable
Authorities.
“Balance of Plant Warranty” means the warranty of the Contractor for a period
of two (2) years from Closing that (a) all parts, materials, equipment and the like
incorporated into the Project (other than the WTGs) shall be free of defects in material,
workmanship and title, and shall be new, unused and undamaged and of suitable grade
that is consistent with Prudent Industry Practices when installed, (b) the Construction
Services (other than the Construction Services performed by the Turbine Supplier
pursuant to the Turbine Supply Agreement) shall be performed with due care and skill
and in a competent, diligent manner in accordance with Law and Applicable Standards
and (c) the completed Work shall perform its intended functions as a complete, integrated
wind energy generation operating system as explicitly described or implied in the EPC
Agreement, and shall be fully in accordance with the Technical Specifications. The
Balance of Plant Warranty shall include a serial defect provision mutually acceptable to
Buyer and Seller applicable to the components acquired for the Project through the EPC
Agreement, which provision shall include without limitation terms providing that failure
of greater than 15% of any one component part during the applicable period shall
constitute a serial defect and all such component parts used in the Project shall be
replaced under warranty, at no cost to the Company or Buyer; provided, however, that no
defect affecting a WTG or its component parts shall constitute a serial defect for purposes
of the Balance of Plant Warranty.
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“Beam Path Study” means a study of potential interference of the Project with
microwave telecommunication facilities to be prepared by a qualified consultant
acceptable to Buyer and delivered to Buyer in final form prior to the Effective Date.
“Books and Records” means any and all data; reports (including repairs,
maintenance, testing and operational reports); external, non-attorney-privileged material
correspondence; maps; surveys; and other business records necessary to the development
of the Project that are generated or obtained by Company or Seller prior to the Closing
Date with respect to the Company, the Company Assets or the Project.
“Business Day” means any day other than Saturday, a Sunday, or a holiday, on
which banks are generally open for business in Minneapolis, Minnesota.
“Buyer” is defined in the introductory paragraph of this Agreement.
“Buyer Affirmative Coverage” is defined in Section 3.2.3(b).
“Buyer Confidential Information” is defined in Section 8.4.1.
“Buyer Damages” is defined in Section 9.3.1.
“Buyer Documents” is defined in Section 7.2.
“Buyer Indemnified Parties” is defined in Section 9.3.1.
“Buyer Permits” is defined in Section 6.13.
“Buyer’s Knowledge” means the actual and current knowledge of any of the
Persons listed in Schedule 1.1(a), after reasonable inquiry by such Persons of those
Representatives of or consultants to Buyer or Buyer’s Affiliates who are reasonably
likely to have material knowledge of the relevant subject matter.
“Buyer’s Schedules” means the Schedules to any of the provisions of ARTICLE
7.
“Closing” is defined in Section 2.3.
“Closing Date” is defined in Section 2.3.
“Closing Payment” means the following amount payable on the Closing Date: an
amount equal to the Adjusted Purchase Price, minus the sum of (i) the Deposit, plus
(ii) the Holdback Amount, plus (iii) accrued and unpaid Delay Damages.
“Code” means the Internal Revenue Code of 1986, as amended.
“Commission Approvals” is defined in Section 5.13.
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“Commissioning” means the start-up and commissioning activities to be
conducted in accordance with the procedures set forth in the EPC Agreement and the
Turbine Supply Agreement.
“Commissioning and Turnover Certificate” means a certificate in the form
attached to the Turbine Supply Agreement issued by the Turbine Supplier certifying as to
the completion of Commissioning and the readiness of a certain WTG for turnover to the
Company.
“Commissioning and Turnover of WTGs” with respect to a fully-assembled
WTG and the equipment associated therewith means the achievement of the following
milestones:
(a)
Mechanical Completion with respect to such WTG has occurred,
as evidenced by the Company’s delivery to Contractor of a countersigned
Mechanical Completion Certificate with respect thereto;
(b)
Commissioning has been conducted and the WTG has met or
exceeded the requirements pursuant to the procedures set forth in the EPC
Agreement, the Turbine Supply Agreement and the other requirements and
recommendations of the Turbine Supplier;
(c)
all WTG equipment associated with such fully assembled WTG
has been properly assembled, erected, installed, adjusted, tested and
commissioned, is mechanically, electrically and structurally complete, in each
case in accordance with the Technical Specifications, the Applicable Standards
and the terms and conditions of the EPC Agreement and can be used safely and
operated continuously;
(d)
Contractor has coordinated erection of the tower portion of each
WTG and has delivered and poured all grouting between the Tower flange of the
bottom portion of such Tower and its Foundation; and
(e)
the Company has accepted a Commissioning and Turnover
Certificate with respect to such fully assembled WTG pursuant to the terms and
conditions of the Turbine Supply Agreement.
“Commissions” is defined in Section 5.13.
“Company” is defined in the Recitals.
“Company Assets” means, unless otherwise provided herein, all properties, assets
and rights of any kind, whether tangible or intangible, real or personal, that are necessary
or appropriate to the construction, operation and maintenance of the Project including:
(a)
the Wind Data (subject to licenses to Sequoia and Seller to use
such data, with the form of such licenses to be mutually acceptable to Seller and
Buyer and agreed to prior to the Effective Date);
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(b)
the Facilities;
(c)
the Land Contracts;
(d)
the Contracts;
(e)
the Permit Applications and the Permits;
(f)
the Reports (subject to licenses to Sequoia and Seller to use the
Reports, with the form of such licenses to be mutually acceptable to Seller and
Buyer and agreed to prior to the Effective Date);
(g)
the Interconnection Rights;
(h)
the Books and Records;
(i)
the Real Property;
(j)
the design layout of the Facilities, including micro-siting; and
(k)
all emissions allowances or credits, renewable energy credits,
green tags, or other environmental or financial attributes of the Facilities, if any.
Notwithstanding the foregoing, Seller may retain a copy of all Reports, which Seller may
use solely for its internal purposes, subject to Section 8.4.
“Company-Sequoia Agreement” shall have the meaning set forth in the Recitals.
“Construction Services” means all actions and services required to construct a
fully operational Project.
“Contract” means any of the agreements or contracts to which the Company,
Seller or any of its other Affiliates is a party and includes all of the material Contracts
that are described in Schedule 6.12.
“Contractor” means RES America Construction Inc., an Affiliate of Seller.
“Corporate Documents” means the articles or certificate of incorporation and
bylaws of a corporation or the equivalent constitutive documents of a limited liability
company, partnership, limited partnership or other entity.
“Cultural Resources Survey” means the cultural resources survey to be prepared
by a qualified firm and delivered to Buyer in final form.
“Curative Documents” is defined in Section 3.2.3(b).
“Delay Damages” is defined in Section 10.1.
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“Deposit” [BEGIN TRADE SECRET
END TRADE SECRET]
“Deposit Refund Letter of Credit” is defined in Section 10.4.2.
“DPPS” means the definitive planning process study to be performed by MISO,
or a consultant acceptable to MISO, identifying the definitive scope and estimated cost of
any upgrades that may be required with respect to the interconnection of the Project.
“Easement Agreement” means each agreement (together with any amendments
thereto or replacements thereof) granting an easement to use the Real Property within the
Site in connection with the construction, operation and maintenance of the Project and
including the Easement Agreements listed on Schedule 6.11.
“Easement Amendment” means an amendment to an Easement in the form
attached hereto as Exhibit D.
“Effective Date” means the date on which all of the conditions listed in
Sections 3.2 and 4.1 have been satisfied and Buyer and Seller have executed the Effective
Date Certificate.
“Effective Date Certificate” means a certificate in the form attached as Exhibit G
certifying that the conditions set forth in Sections 3.2 and 4.1 have been satisfied and that
the Parties intend the provisions of this Agreement (other than the provisions expressly
identified in Section 3.1 as being effective as of the Signing Date) to be effective as of the
Effective Date.
“Effective Date Conditions” is defined in Section 3.1.1.
“Electrical Substantial Completion Certificate” means a certificate in the form
attached to the EPC Agreement issued by the Contractor certifying as to Electrical Works
Substantial Completion as to the circuit on which a particular WTG is located.
“Electrical Works” means the facilities and equipment described in
Schedule 1.1(c) relating to the collection system, the collector substation and the
interconnection.
“Electrical Works Substantial Completion” means the substantial completion of
the Electrical Works related to the circuit on which a particular WTG is located, as
described more fully in clause (a) of the definition of WTG Substantial Completion and
in the EPC Agreement.
“Encumbrances” means any claim, lien, pledge, mortgage, option, charge,
easement, security interest, right-of-way, encumbrance, lease, interest, mineral
reservations, covenant, conditional sales contract, title retention arrangement, adverse
claim or restriction of any kind.
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“Environmental Laws” means all Laws that regulate or relate to (a) the protection
or clean-up of the environment; (b) the Handling of Hazardous Materials; (c) the
preservation or protection of waterways, groundwater, drinking water, air, wildlife, plants
or other natural resources; and (d) the health and safety of persons or property, including
protection of the health and safety of employees. Environmental Laws shall include the
Resource Conservation & Recovery Act, Clean Water Act, Safe Drinking Water Act,
Occupational Safety and Health Act, Toxic Substances Control Act, Clean Air Act,
Comprehensive Environmental Response, Compensation and Liability Act, Emergency
Planning and Community Right-to-Know Act, Hazardous Materials Transportation Act,
and Centers for Disease Control guidelines, policies and procedures, and all analogous or
related Laws.
“EPC Agreement” means an engineering, procurement and construction contact
to be entered into by and between the Company and the Contractor, in form and
substance satisfactory to the Parties and the Contractor, for the construction of those
portions of the Project not constructed or installed by the Turbine Supplier under the
Turbine Supply Agreement.
“Estoppel Letter” is defined in Section 3.2.3(a)(iii).
“Excluded Liabilities” is defined in Section 2.2.2.
“Excused Interconnection Delay” shall mean any delay in Seller’s or the
Company’s “critical path” construction schedule that is caused by the inability of the
Project to achieve Interconnection when it would otherwise have been able to do so (in
light of the actual construction schedule of the Project) that is due to (a) the actions or
omissions of the Transmission Owner (including the failure of the Transmission Owner
to meet one or more of its milestones under the Interconnection Agreement, whether or
not such failure constitutes a breach of the Interconnection Agreement by the
Transmission Owner), or (b) the breach of or noncompliance with Section 5.8 hereof by
Buyer; provided, however, that (i) to the extent that any delay in achieving
Interconnection arises from, in whole or in part, the failure of Seller or the Company to
meet its milestones under the Interconnection Agreement, the breach of or
noncompliance with the Interconnection Agreement or Section 5.8 hereof by Seller or the
Company, then such delay shall not be an Excused Interconnection Delay, and (ii) if a
Force Majeure Event and an Excused Interconnection Delay are in effect on the same
day, then that day’s delay shall be attributed to the Force Majeure Event and not the
Excused Interconnection Delay (e.g., such day shall not count as two days of delay).
“Exhibits” means the exhibits attached to, and expressly contemplated in, this
Agreement, including those to be delivered at the Effective Date or at the Closing Date.
“Extreme Weather” means (a) weather conditions severe enough to prohibit use
of road transportation systems such that a reasonable common carrier would not use such
systems to transport equipment, material, supplies or labor provided that such prohibition
continues for more than five (5) consecutive days or (b) other severe weather conditions
that continue for more than five (5) consecutive days (excluding the matters described in
9
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the definition of Weather Delays), and, in each case, that are unusual or could not
reasonably be expected to be encountered in the affected area during the impacted period.
“FAA” means the U.S. Federal Aviation Administration.
“FAA Determinations of No Hazard to Air Navigation” means the FAA
Determinations of No Hazard to Air Navigation issued by the FAA with respect to each
Wind Turbine Generator in the Project.
“FAA Screening Study” means the screening study prepared to review potential
impacts of the WTGs and Meteorological Stations to long range and weather radars,
military training routes and special airspaces, and delivered to Buyer in final form prior
to the Effective Date.
“Facilities” means the wind power generating facilities (including the
foundations, towers, wind turbine generators, electrical collection system, collector
substation, transmission line, access roads, operating and maintenance building and other
equipment, materials, improvements and assets associated therewith), [BEGIN TRADE
SECRET
END TRADE SECRET]
“Fee Simple Amount” [BEGIN TRADE SECRET
END TRADE SECRET]
“FERC” means the Federal Energy Regulatory Commission.
“Final Adverse Under Construction Determination” is defined in Section
2.2.3(b).
“Final Completion” means the satisfaction or achievement of the following:
(a)
Project Substantial Completion has occurred, as evidenced by
Company’s delivery to Contractor of a countersigned Project Substantial
Completion Certificate;
(b)
Contractor has performed all of the Work (including the clean-up
and restoration of that portion of the Project Site where Contractor conducted the
Work, the removal from the Project Site of all waste materials introduced or
created by Contractor in the performance of the Work, the recycling and/or
disposal of such waste material and the re-grading and/or re-seeding of disturbed
areas where appropriate) to be performed by Contractor and Seller has performed
or caused to be performed all other Work, such that, upon completion of the
Work, the Project may be operated as a fully-integrated wind-powered electricity
generating plant and all the tests, mechanical calibrations, electrical continuity
and ground fault tests have been successfully completed and any defects found
have been corrected;
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(c)
Company has received a Final Lien Waiver from Contractor, each
Subcontractor, the Turbine Supplier and all other Persons performing any Work;
or, if Contractor is unable to obtain all such waivers, a letter of credit or bond
(approved by Buyer) to protect Company, Buyer, the Project and the Project Site
from any and all claims made on account of such Liens;
(d)
Contractor has delivered the Turnover Packages in accordance
with the terms of the EPC Agreement;
(e)
all As Built Drawings have been delivered to and accepted by
Company in accordance with the terms of the EPC Agreement;
(f)
all quality assurance documentation has been provided to and
received by Company in accordance with the Project Quality Assurance Plan and
all non-conforming quality assurance issues have been resolved in accordance
with the Project Quality Assurance Plan;
(g)
all of the supplies, personnel and waste of the Contractor or any
other Person performing Work pursuant to a Contract have been removed from
the Project Site;
(h)
either (i) all Punch List Items have been corrected or performed to
Buyer’s reasonable satisfaction or (ii) Buyer has elected to not require completion
of certain Punch List Items and Contractor or such other Person performing Work
pursuant to a Contract has paid all amounts due to Company with respect thereto
in accordance with the terms of the EPC Agreement or such Contract and all other
Punch List Items have been completed;
(i)
final grading of the area surrounding each foundation is complete
and a rock ring around each tower base is in place; and
(j)
Company has accepted a Final Completion Certificate.
“Final Completion Certificate” means a certificate in the form attached to the
EPC Agreement issued by the Contractor certifying the satisfaction or achievement of
each condition to Final Completion.
“Final Completion Date” means the Business Day mutually agreeable to Buyer
and Seller, but occurring no later than five (5) Business Days after the satisfaction of all
of the conditions set forth in the definition of Final Completion.
“Final Completion Payment” [BEGIN TRADE SECRET
END TRADE SECRET]
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“Final Determination” means a decision, judgment, decree or other order by any
administrative agency or court of competent jurisdiction, which decision, judgment,
decree or order has become final (i.e., when all allowable appeals have been exhausted).
“Final Layout Amendment” is defined in Section 3.3.12(b).
“Final Lien Waiver” means a lien waiver properly completed and executed by
Contractor, each Major Subcontractor, each Subcontractor performing work at the Project
Site, and the Turbine Supplier, as applicable, which provides that such Person
unconditionally waives and releases all mechanic’s or other Liens with respect to all
Work for which Contractor requested final payment in the form specified in the EPC
Agreement.
“Final Order” means an action by an Authority as to which (a) no request for stay
of the action is pending, and no such stay is in effect; (b) no petition for rehearing,
reconsideration or application for review of the action is pending; (c) such Authority does
not have the action under reconsideration or subject to rehearing on its own motion or
otherwise; and (d) no appeal to a court, or a request for stay by a court of the Authority’s
action is pending or in effect.
“Final Under Construction Certificate” is defined in Section 3.3.9.
“Final Under Construction Opinion” is defined in Section 3.3.9.
“Final Under Construction Plan IE Certificate” is defined in Section 3.3.9.
“Force Majeure Event” means (a) prior to the Target Closing Date, any event
that wholly or partly prevents or delays the achievement on or before the Target Closing
Date of the requirements of clauses (a), (b), (d), (j), (k) or (l) of the definition of Project
Substantial Completion; and (b) after the Target Closing Date, any event that wholly or
partly prevents or delays the achievement of the requirements of clauses (a), (b), (d), (j),
(k) or (l) of the definition of Project Substantial Completion, in each case, only if and to
the extent:
(a)
such event is not within the reasonable control, directly or
indirectly, of and not the fault of the affected Person;
(b)
despite the exercise of reasonable diligence, such event cannot be
or be caused to be prevented, avoided or removed by the affected Person;
(c)
such event does not result from the affected Person’s negligence or
fault or the negligence or fault of its agents, employees, suppliers, contractors or
subcontractors of any tier; and
(d)
such event causes an actual delay in the Project’s “critical path”
construction schedule.
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A Force Majeure Event shall include an event that falls within one or more of the
following categories (to the extent meeting the foregoing requirements contained in this
definition): expropriation; invasion; plague; drought; landslide; tornado; hurricane;
tsunami; flood; earthquake; fire; explosion; epidemic; quarantine; acts of terrorism, war
(declared or undeclared) or other armed conflict; any subsurface condition not identified
in the Reports; strikes and other labor disputes (including collective bargaining disputes
and lockouts) of a national, regional or area-wide nature; riot, revolution, insurrection or
similar civil disturbance or commotion; other acts of God, including Extreme Weather
(but excluding Weather Delays); acts of the public enemy; perils of sea; blockade; port
closure; sabotage or vandalism; embargoes; transportation accidents; except as provided
below, delays in transportation due to closure of roads or other transportation route by
Authorities or closure of roads otherwise due to an independent, identifiable Force
Majeure Event individually in excess of five (5) days that is unusual or could not
reasonably be expected to be encountered in the affected area during the impacted period;
change in law; acts, omissions, decrees or injunctions of an Authority other than acts or
omissions in response to acts or omissions of the affected Person.
Notwithstanding the provisions of the immediately preceding paragraph, a Force
Majeure Event shall not include (A) lack of funds or finances or any obligation for the
payment of money, (B) except as provided in Section 5.12, acts or omissions of an
Authority regarding Permits (including delay in issuance of a permit, approval or
required consultation with an Authority) or any delay in issuance of any Permit caused by
any third party contest, or any action required by any Permit, or (C) Weather Delays.
“Foundation Completion” with respect to an individual WTG foundation, means
the achievement of the following milestones:
(a)
such foundation is mechanically completed and installed in
accordance with the Technical Specifications, the EPC Agreement and the
Turbine Supply Agreement;
(b)
such foundation is structurally complete and contains all necessary
embedded inserts;
(c)
the concrete portion of such foundation has cured so as to have
achieved the minimum strength necessary to allow assembly, erection and
installation of the WTG thereon in accordance with the EPC Agreement and the
Turbine Supply Agreement;
(d)
backfilling of the area surrounding such foundation has been
completed; and
(e)
the Company has accepted a Foundation Completion Certificate
with respect to such foundation pursuant to the terms and conditions of the EPC
Agreement.
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Attachment A – Page 19 of 147
“Foundation Completion Certificate” means a certificate, in the form attached to
the EPC Agreement, issued by the Contractor certifying as to the Foundation Completion
of a WTG foundation.
“Fully-Loaded Costs” is defined in Section 2.2.3(c)(iv).
“FWS” means the U.S. Fish and Wildlife Service.
“Geotechnical Report” means the report to be prepared by a qualified
geotechnical engineering firm with respect to the geotechnical borings and analysis
conducted for each WTG location and delivered to Buyer in final form prior to the
Effective Date.
“Guaranteed Completion Date” [BEGIN TRADE SECRET
END TRADE
SECRET]
“Guarantor” [BEGIN TRADE SECRET
END TRADE SECRET]
“Guaranty” [BEGIN TRADE SECRET
END TRADE SECRET]
“Handling” means the production, use, treatment, storage, transportation,
generation, manufacture, processing, distribution, disposal, emission, discharge, Release
or threatened Release of any Hazardous Material.
“Hazardous Materials” means any chemical, material or substance in any form,
whether solid, liquid, gaseous, semisolid, or any combination thereof, whether waste
material, raw material, chemical, finished product, byproduct, or any other material or
article, that is listed or regulated under applicable Environmental Laws as a “hazardous”
or “toxic” substance or waste, or as a “contaminant,” or is otherwise listed or regulated
under applicable Environmental Laws because it poses a hazard to human health or the
environment, including petroleum products, asbestos, urea formaldehyde foam insulation,
and lead-containing paints or coatings.
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Attachment A – Page 20 of 147
“Holdback Amount” [BEGIN TRADE SECRET
END TRADE
SECRET]
“HSR Act” means the Hart-Scott Rodino Antitrust Improvements Act of 1976, as
amended.
“IE Determined Holdback Amount” is defined in Section 3.3.2(c).
“Indebtedness” means, with respect to any Person, any indebtedness, whether or
not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures
or similar instruments or letters of credit (or reimbursement agreements in respect
thereof) or representing the deferred and unpaid balance of the purchase price of any
property (including pursuant to capital leases), including any such balance that constitutes
an accrued expense or a trade payable, and shall also include, to the extent not otherwise
included, the guaranty of items which would be included within this definition.
“Independent Accountant” [BEGIN TRADE SECRET
END TRADE SECRET]or, if such firm is unable or unwilling to act as the
Independent Accountant under this Agreement, a nationally recognized firm of
independent certified public accountants that is mutually acceptable to Seller and Buyer
or selected as provided in Section 2.5.3.
“Independent Engineer” [BEGIN TRADE SECRET
END
TRADE SECRET] or, if such firm is unable or unwilling to act as the Independent
Engineer under this Agreement or is not acceptable to the lenders for the financing
described in Section 4.1.1, a nationally recognized engineering firm that is mutually
acceptable to Seller and Buyer.
“Independent Tax Attorney” [BEGIN TRADE SECRET
END TRADE SECRET] or, if such firm is unable or unwilling to act as the
Independent Tax Attorney under this Agreement, a nationally-recognized law firm who
possesses substantial expertise with wind energy projects and the application of Section
45 of the Code with respect thereto, is engaged by Buyer (at Seller’s sole expense) and is
mutually acceptable to Seller and Buyer.
“Infrastructure Facilities” means all of the balance of plant Work, including
buildings, roads, foundations, laydown areas, pad-mounted transformers, electrical works
and other permanent fixtures as more fully described in the EPC Agreement.
“Initial Under Construction Certificate” is defined in Section 2.2.3(a).
“Initial Under Construction Opinion” is defined in Section 2.2.3(a).
“Insured Over Third Party Mineral Rights” is defined in Section 3.2.3(b).
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“Interconnection” means the connection of the Project to Transmission Owner’s
electrical transmission system as coordinated by Seller or the Company with the
Transmission Owner and/or MISO.
“Interconnection Agreement” means a final Generator Interconnection
Agreement to be entered into between the Company, MISO and the Transmission Owner
with respect to the Interconnection following the Signing Date and the completion of the
applicable interconnection studies, as such agreement may be amended to update the
milestones thereunder.
“Interconnection Rights” means any and all of the Company’s (including rights
as assignee of Sequoia), Seller’s or any of its other Affiliates’ rights and interests in the
Project’s transmission and interconnection queue position for Project interconnection for
150 MW filed by Sequoia with MISO, with a queue number to be assigned by MISO
(which will be assigned to the Company at the “Closing” under the Company-Sequoia
Agreement), any studies, reports or other documents provided by MISO, and any and all
other rights relating to the interconnection of the Project to the transmission system of
MISO or Transmission Owner with respect to the Project, including the Interconnection
Agreement.
“Interest Rate” means, for any date, a rate per annum equal to the sum of (i) the
“Prime Rate” as published in The Wall Street Journal under “Money Rates” on such day
(or if not published on such day, on the most recent preceding day on which published),
plus (ii) two percent (2.0%).
“IRS” means the United States Internal Revenue Service.
“IRS PTC Publication” means that certain Notice 2013-29, published by the IRS
on April 15, 2013, entitled “Beginning of Construction for Purposes of the Renewable
Electricity Production Tax Credit and Energy Investment Tax Credit,” as modified by the
IRS on April 25, 2013, as may be amended, modified, supplemented or restated.
“Land Acquisition Contracts” means all agreements providing for the acquisition
of fee title to all or any portion of the O&M Facility Real Property, the Substation Real
Property or any other Real Property.
“Land Contracts” means all Land Acquisition Contracts, Easement Agreements,
lease agreements and all other agreements granting rights with respect to the use of the
real property within the areas delineated on Exhibit A in connection with the
construction, operation and maintenance of the Project. For the avoidance of doubt, Land
Contracts shall also include any right-of-way or easement agreement that is required from
Rolette County or any other Authority with respect to the use of public roads or right-ofway for the installation and use of electrical transmission lines, unless the Title Company
will not insure such rights-of-way or easement agreements in which case they shall be
treated as Permits.
“Law” means any law, statute, rule, regulation, ordinance, standard, code, order,
judgment, decision, writ, injunction, decree, certificate of need, award or other
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Attachment A – Page 22 of 147
governmental restriction, including any published and publicly available policy or
procedure (or any guidelines or recommendations with respect to human health or safety
or the use, handling, disposal or release of Hazardous Materials) (except as provided in
Section 5.13) issued or enforced by any Authority.
“Liabilities” means any and all direct or indirect liabilities, Indebtedness,
obligations, commitments, losses, damages, expenses, claims, deficiencies, or guaranties
of any type, whether accrued, absolute, contingent, matured, unmatured or other, or
known or unknown.
“Liquidated Damages” means Delay Damages and Termination Damages.
“Major Subcontractor” means any Subcontractor with whom Contractor will
enter (or has entered) into an agreement or agreements having an aggregate value in
excess of [BEGIN TRADE SECRET
END TRADE SECRET] for performance of any part of the Work.
“Material Adverse Effect” means an event, change, occurrence, circumstance,
development or effect, which, individually or when taken together with the effect of all
other events or circumstances occurring since the Effective Date (a) has caused or could
reasonably be expected to cause [BEGIN TRADE SECRET
END TRADE SECRET] of the Project that is capable of achieving Project Substantial
Completion by the Guaranteed Completion Date [BEGIN TRADE SECRET
END TRADE SECRET] or (b) has had or could reasonably be expected
to have a material adverse effect on the assets, properties, liabilities (other than the
Retained Liabilities and the Assumed Liabilities as provided for in this Agreement) of the
Company or the assets, properties or physical condition of the Project, which effect has a
material adverse effect on the Company or the Project as a whole; provided, however,
that the determination of whether a Material Adverse Effect has occurred shall exclude
the following occurrences (i) any event or circumstance resulting from either changes in
the international, national or regional electric industry in general or changes in general
national or regional economic or financial conditions and that does not have a
disproportionate impact on the Project, as compared to similar wind energy development
projects in the U.S. and (ii) wholesale or retail prices for power, renewable power or
RECs or changes in such prices, or the profitability or financial condition or results of
operation of the Company, and (iii) [BEGIN TRADE SECRET
END TRADE SECRET] No violation or noncompliance with Environmental
Laws or other Laws assumed by Buyer under Section 5.12 shall be considered in
determining whether a Material Adverse Effect has occurred.
“Mechanical Completion” with respect to an individual WTG means
achievement of the following:
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Attachment A – Page 23 of 147
(a)
Foundation Completion with respect to the foundation for such
WTG has occurred and such WTG is designed, fabricated, assembled, erected and
installed in accordance with the Technical Specifications, the Mechanical
Completion Checklist and the other requirements of the EPC Agreement, and
checked for adjustment;
(b)
all materials and equipment associated with such WTG have been
installed in accordance with the Technical Specifications, the Mechanical
Completion Checklist, the applicable Project Quality Assurance Plan and the
other requirements of the EPC Agreement, and checked for adjustment, rotation
and lubrication;
(c)
Contractor has prepared and submitted a list of Punch List Items
with respect to such WTG;
(d)
the WTG is ready to commence Commissioning and testing; and
(e)
the Company has accepted a Mechanical Completion Certificate
with respect to such WTG pursuant to the terms and conditions of the EPC
Agreement.
“Mechanical Completion Certificate” means a certificate in the form attached to
the EPC Agreement issued by the Contractor certifying as to the Mechanical Completion
of a WTG.
“Mechanical Completion Checklist” means a checklist developed in connection
with the EPC Agreement and attached as an exhibit thereto to provide for a thorough
itemized review of all aspects of the erection and installation of a WTG.
“Membership Interest Assignment” is defined in Section 3.3.1(a).
“Meteorological Stations” means at least one (1) permanent wind and weather
monitoring station to be installed by the Contractor pursuant to the EPC Agreement on
the Property in accordance with wind energy industry practice and standards and the
Technical Specifications, which includes, at a minimum, a wind anemometer, wind
vanes, a free standing tower and a connection to the SCADA system.
“MISO” means the Midwest Independent Transmission System Operator, Inc. or
its successors.
“MW” means megawatt.
“NCF” means net capacity factor.
“NDCC” is defined in Section 5.13.
“NERC” is defined in Section 5.8.1.
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“Noise Study” means a study to be completed by a qualified consultant with
respect to the compliance of the Project as designed with noise standards and delivered to
Buyer in final form prior to the Effective Date.
“Non-Disclosure Period” is defined in Section 8.9.
“Non-Disturbance Agreements” is defined in Section 3.2.3(b).
“NSP Corporate Approval” is defined in Section 3.2.17.
“NSP Drawing Standards” means the drawing standards attached hereto as
Schedule 1.1(b).
“O&M Facility Real Property” means the fee simple interests in the land
described in Schedule 1.1(d) for the operating and maintenance facility and related
improvements if the Company is able to acquire such fee simple interests pursuant to
Section 5.10. If the Company is not able to acquire such fee simple interests pursuant to
Section 5.10, references to the O&M Facility Real Property in this Agreement shall mean
the rights of the Company under the applicable Land Contracts to locate such facility on
such property.
“O&M Manual” means the complete system instructions and procedures for the
operation and maintenance of the WTGs and the Infrastructure Facilities, including
Contractor’s manufacturers’, vendors’, suppliers’, Subcontractors’ and Turbine
Supplier’s recommended lists of Spare Parts, all safety information and any precautionary
measures therefor.
“Operating Permits” is defined in Section 6.13.
“Operational Date” means the date upon which Seller (or the Company) begins
selling electricity to one or more third parties from WTGs that have reached WTG
Substantial Completion.
“Option Period” is defined in Section 11.2.
“Optional Interconnection Study” [BEGIN TRADE SECRET
END TRADE SECRET]
“Partial Lien Waiver” means a lien waiver properly completed and executed by
the Contractor, the Turbine Supplier, a Major Subcontractor or a Subcontractor, as the
case may be, in the form specified in the EPC Agreement, with respect to progress
payments.
“Party” means Buyer or Seller individually; and “Parties” means Buyer and Seller
collectively.
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“Permit” means any license, consent, certificate (including permanent
unconditional certificate of occupancy), approval, permit or authorization of any sort
whatsoever by or from any Authority, including any certificate of needs, for the
development, construction, ownership, operation or transfer of the Project as described on
Schedule 6.13.
“Permit Application” means any application, petition or request made by
Company, Seller or any other of its Affiliates to any Authority on or before the Closing
Date in order to obtain a Permit.
“Permitted Encumbrances” means (a) Encumbrances for property taxes not yet
due and payable, (b) utility easements, building restrictions and such other similar nonmonetary Encumbrances incurred in the ordinary course of business that are of a nature
generally existing with respect to properties of a similar character, which do not currently
present any risk of sale of the property subject to the Encumbrance, which do not affect
in any way (other than a de minimis effect) the marketability of the Company Assets, and
which will not interfere in any material respect with the construction, or in any respect
with operation or maintenance of the Project, (c) Encumbrances set forth on
Schedule 6.11, (d) Encumbrances granted to lenders under the financing in respect of the
development or construction of the Project (so long as such Encumbrances are released at
or prior to the Closing), (d) any matter contained in an Updated Title Report that is not
objected to by Buyer pursuant to Section 5.11, and (e) any other Encumbrances created or
permitted with the written consent of Buyer in its sole discretion (including
Encumbrances insured over by the Title Company in the Title Policy).
“Permitted Title Exception” is defined in Section 3.2.3(b).
“Permitting Opinion” means a permitting opinion acceptable to Buyer from legal
counsel licensed to practice in the jurisdiction in which the Project is located, selected
and paid by Seller and approved by Buyer (such approval not to be unreasonably
withheld) that describes all material, discretionary Permits required to develop, construct
and to commence operation of the Project, and, with respect to such Permits (other than
any Operating Permits and the Buyer Permits) opines that with respect to each such
material discretionary Permit it is legal, valid, binding and enforceable in accordance
with its terms, and is in full force and effect and is not subject to any further appeal,
except with respect to the operational matters and risks relating to the period following
Closing assumed by Buyer in Section 5.12.
“Person” means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company, decedent’s estate,
organization, entity, or unincorporated organization or any Authority.
“Phase I Environmental Site Assessment” means a Phase I Environmental Site
Assessment prepared by a qualified environmental consulting firm and delivered to
Buyer in final form prior to the Effective Date.
“Post-Closing Adjustment” is defined in Section 2.5.1.
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“Post-Closing PTC Adjustment Amount” is defined in Section 2.2.3(b).
“Post-Closing Statement” is defined in Section 2.5.1.
“Pre-Closing Period” is defined in Section 8.6.4.
“Pre-Closing Tax Returns” is defined in Section 8.6.3.
“Project” means the complete, commercially operable, integrated wind-powered
electricity generating plant (including the Facilities) with a nameplate capacity of
[BEGIN TRADE SECRET
END
TRADE SECRET] located in Rolette County, North Dakota.
“Project Quality Assurance Plan” means the plan setting forth the quality
assurance and quality control procedures for the Project attached hereto as Exhibit H.
“Project Substantial Completion” means that each of the following has been
achieved:
(a)
Electrical Works Substantial Completion with respect to the WTGs
described in clause (b) below;
(b)
WTG Substantial Completion with respect to WTGs with an
aggregate nameplate capacity equaling [BEGIN TRADE SECRET
END TRADE SECRET]
(c)
the requirements set forth in the EPC Agreement for the
Commissioning test and Inspection Procedures have been met or exceeded with
respect to the WTGs described in clause (b) above and the other portions of the
Project described in clauses (a) and (d) of this definition;
(d)
Contractor has completed all of the Work for all of the
Infrastructure Facilities necessary to interconnect and operate or otherwise
associated with the WTGs described in clause (b) above, other than any Punch
List Items and has delivered to the Company copies of the test reports and
electrical schematics related to such Infrastructure Facilities, and Seller has
delivered copies of all such documents to Buyer;
(e)
Contractor has prepared and submitted to the Company the final
and complete list of Punch List Items with respect to the WTGs described in
clause (b) above and the other portions of the Project described in clauses (a) and
(d) of this definition;
(f)
Contractor has delivered draft copies of the Turnover Packages and
O&M Manuals to the Company in accordance with the terms of the EPC
Agreement, and Seller has delivered copies of all such documents to Buyer, with
respect to the WTGs described in clause (b) above and the other portions of the
Project described in clauses (a) and (d) of this definition;
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(g)
drafts of As Built Drawings with respect to the WTGs described in
clause (b) above and the other portions of the Project described in clauses (a) and
(d) of this definition shall have been delivered to, and accepted by, the Company
and the Independent Engineer has determined that such As Built Drawings
comply with the requirements of the EPC Agreement;
(h)
Contractor has delivered to the Company all interim or progress
payment Partial Lien Waivers or final payment Final Lien Waivers, as the case
may be, from all Major Subcontractors and from Turbine Supplier for Work
completed through such date with respect to the WTGs described in clause (b)
above and the other portions of the Project described in clauses (a) and (d) of this
definition and Seller has provided copies of all such documentation to Buyer;
(i)
all quality assurance documentation has been provided to and
received by the Company in accordance with the Project Quality Assurance Plan
and all non-conforming quality assurance issues, other than those that have been
accepted as Punch List Items, have been resolved in accordance with the Project
Quality Assurance Plan and Seller has provided copies of all such documentation
to Buyer, in each case, with respect to the WTGs described in clause (b) above
and the other portions of the Project described in clause (a) above ;
(j)
the Interconnection allows for the output of the Project, as
proposed, to be delivered to the transmission system in accordance with the
Interconnection Agreement and the standards of MISO and the Transmission
Owner;
(k)
the Company has accepted a Project Substantial Completion
Certificate pursuant to the terms of the EPC Agreement and the Independent
Engineer has determined that the Project Substantial Completion Certificate has
been issued in accordance with the EPC Agreement with respect to the WTGs
described in clause (b) above and the other portions of the Project described in
clauses (a) and (d) of this definition; and
(l)
all Warranty Parts Inventory and any other Spare Parts, to the
extent required under the Turbine Warranty and O&M Agreement to be held by
the Company as a condition to the effectiveness of the WTG Warranty, have been
delivered by Contractor and/or Turbine Supplier to the Project Site, in each case,
with respect to the WTGs described in clause (b) above.
The Parties acknowledge and agree that Seller’s intent is to cause the Company to
construct Facilities having a nameplate capacity of [BEGIN TRADE SECRET
END TRADE SECRET] and Buyer’s intent is that the Company will
have Facilities having a nameplate capacity of [BEGIN TRADE SECRET
END TRADE SECRET] and that therefore, the conditions set forth in clauses
(b) and (c) of this definition of Project Substantial Completion shall not be deemed
satisfied if [BEGIN TRADE SECRET
END TRADE
SECRET] have been completed, even if de minimis.
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Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 28 of 147
“Project Substantial Completion Certificate” means a certificate in the form
attached to the EPC Agreement issued by the Contractor certifying as to the satisfaction
or achievement of each condition to Project Substantial Completion and accepted by
Company.
“Project Warranty” means, collectively, the Balance of Plant Warranty, the Seller
Project Warranty, the WTG Warranty, and each other warranty provided in respect of the
Project pursuant to a Contract or this Agreement.
“Property” means all real property that is the subject of the Land Contracts as
further described in Part A of Schedule 6.11, together with any Real Property.
“Prudent Engineering Practices” means those practices, methods, equipment,
specifications and standards of safety and performance, as the same may change from
time to time, as are commonly used by professional construction and engineering firms
performing engineering, procurement and construction services on wind energy facilities
of the type, size and location similar to the Project which, in the exercise of reasonable
judgment and in the light of the facts known at the time the decision was made, are
considered good, safe and prudent practice in connection with the design, construction
and use of wind energy generating and operating, electrical and other equipment,
facilities and improvements, with commensurate standards of safety, performance,
dependability, efficiency and economy, and as are in accordance with generally accepted
national standards of professional care, skill, diligence and competence applicable to
design, engineering, construction and project management practices, including standards
published by the Institute of Electrical and Electronics Engineers, the American National
Standards Institute, the National Electrical Manufactures Association or ASTM. Prudent
Engineering Practices are not necessarily defined as the optimal standard practice method
or act to the exclusion of others, but rather refer to a range of action reasonable under the
circumstances.
“Prudent Industry Practices” means those practices, methods, standards and acts
(including those engaged in or approved by a significant portion of the wind generated
electric power industry for similar wind electric generation facilities in the United States)
that at a particular time in the exercise of good judgment and in light of the facts known
at the time the decision was made, would have been expected to accomplish the desired
result in a manner consistent with applicable Laws, safety, environmental protection,
economy and expedition. Prudent Industry Practices are not necessarily defined as the
optimal standard practice method or act to the exclusion of others, but rather refer to a
range of action reasonable under the circumstances.
“PTC” or “PTCs” means production tax credits under Section 45 of the Internal
Revenue Code as in effect on the Effective Date or (a) any substantively equivalent
(including as to the amount of tax credit provided) successor provision providing for a
federal tax credit determined by reference to renewable electric energy produced from
wind resources or (b) any replacement tax incentive renewable electric energy produced
from wind resources, including an investment tax credit or cash grant in lieu of an
investment tax credit, that provides a substantially equivalent financial value to Buyer.
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Northern States Power Company
Attachment A – Page 29 of 147
“PTC Expiration Date” means December 31, 2013, or any later deadline for
achieving the Under Construction requirement for the Project for purposes of Section 45
of the Code as a result of any change in law, including any retroactive change in law, or
for qualification for (a) any substantively equivalent successor provision of the Code
providing for a federal tax credit determined by reference to renewable electric energy
produced from wind resources or (b) any replacement tax incentive available for
renewable electric energy produced from wind resources, including an investment tax
credit or cash grant in lieu of an investment tax credit, that provides a substantially
equivalent financial value to Buyer.
“PTC Tax Loss” [BEGIN TRADE SECRET
END
TRADE SECRET]
“PUHCA” is defined in Section 4.1.6.
“Punch List Holdback Amount” means such amount sufficient to pay the costs of
completing the Punch List Items, as agreed by the Parties, or, if the Parties are unable to
agree upon such amount as determined by the Independent Engineer.
“Punch List Items” means each item of Work that:
(a)
Seller and Buyer agree remains to be performed following Project
Substantial Completion;
(b)
does not in Seller’s and Buyer’s reasonable judgment, affect the
ability of the Company to safely operate the Project in accordance with
Applicable Standards and in compliance with all Laws;
(c)
does not in Seller’s and Buyer’s reasonable judgment, affect the
operability (including capacity, efficiency, reliability, or cost effectiveness),
safety or mechanical or electrical integrity or the safe, reliable or continuous
commercial operation of the Project; and
(d)
does not in Seller’s and Buyer’s reasonable judgment, affect the
ability to Commission and test the WTGs, Infrastructure Facilities or the other
components of the Project.
If the Parties are unable to agree upon whether an item should be included in the
Punch List Items, the Independent Engineer shall make such determination.
“Purchase Price” means an amount equal to [BEGIN TRADE SECRET
24
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 30 of 147
END TRADE SECRET]
“Purchased Interests” means one hundred percent (100%) of the membership
interests of the Company.
“Real Property” means the O&M Facility Real Property, the Substation Real
Property, the Facilities (to the extent the same are deemed to be real property) and any
other real property interests necessary for the construction, maintenance and operation of
the Project.
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing into the environment or
the workplace of any Hazardous Materials, and otherwise as defined in any
Environmental Law.
“Replacement Turbine Supplier” means [BEGIN TRADE SECRET
END TRADE
SECRET] or such other turbine manufacturer selected by Seller and approved by Buyer
(such approval not to be unreasonably withheld, conditioned or delayed).
“Reports” means the Phase I Environmental Site Assessment, the Beam Path
Study, the Bird and Bat Assessments, the Cultural Resources Survey, the Wetlands
Assessment, the Permitting Opinion, the Standard Broadcast Site Review Study, the Title
Reports, the Site Plan, the FAA Screening Study, the Geotechnical Report, the Noise
Study, any additional study or report relating to the Project required to be delivered to
Buyer as specified in Schedule 6.19 and any other Report necessary for the development,
permitting, construction, operation or transfer of the Project or the Purchased Interests.
“Representation Holdback Amount” is defined in Section 3.3.2(b).
“Representation Holdback Event” is defined in Section 3.3.2(a).
“Representative” means, with respect to any Person, any officer, director,
employee, principal, attorney-in-fact, agent, or other representative of such Person.
“Schedules” means Buyer’s Schedules, Seller’s Schedules and all other schedules
expressly contemplated in this Agreement, including those to be delivered as of the
Effective Date and those to be delivered as of the Closing Date.
“Seller” is defined in the introductory paragraph of this Agreement.
“Seller Confidential Information” is defined in Section 8.5.1.
“Seller Damages” is defined in Section 9.3.2.
“Seller Documents” is defined in Section 6.3.
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Northern States Power Company
Attachment A – Page 31 of 147
“Seller Indemnified Parties” is defined in Section 9.3.2.
“Seller Indemnity Cap” shall mean [BEGIN TRADE SECRET
END TRADE SECRET]
“Seller Project Warranty” is defined in Section 6.26.
“Seller Tax Returns” is defined in Section 8.6.2.
“Seller’s Absolute Representations” means those representations and warranties
of Seller set forth in Sections 6.1, 6.2, 6.3, 6.4, 6.5, 6.8(a), 6.9, 6.12 (except for the
second sentence), 6.14, 6.16, 6.17, 6.19, 6.20, 6.24 and 6.25.
“Seller’s Knowledge” means the actual and current knowledge of any of the
Persons listed in Schedule 1.1(e), after reasonable inquiry by such Persons of those
Representatives of or consultants to Seller or Seller’s Affiliates who are reasonably likely
to have material knowledge of the relevant subject matter.
“Seller’s Material Representations” the representations and warranties of Seller
set forth in ARTICLE 6 other than the Seller’s Absolute Representations.
“Seller’s Schedules” means the Schedules to any of the provisions of ARTICLE
6.
“Settlement Agreement” is defined in Section 12.4.2.
“Sequoia” shall have the meaning set forth in the Recitals.
[BEGIN TRADE SECRET
END TRADE SECRET]
“Signing Date” is defined in the introductory paragraph of this Agreement.
“Site” means the site on which the Project will be constructed in Rolette County,
North Dakota as more particularly described or depicted in, and which shall be within the
geographic boundaries set forth in Exhibit A.
“Site Plan” means the site layout for the Project attached as Exhibit F, including
the intended location of each of the turbines, the access roads, the electrical collector
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PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
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Northern States Power Company
Attachment A – Page 32 of 147
system, the communication lines, and set-backs of the turbines from roads and other
structures which such layout shall overlay the Property and show the location of existing
roads, buildings, other structures, all wetlands (if any) as identified in the Wetlands
Assessment, and areas of concern (if any) as identified in the Phase I Environmental Site
Assessment.
“Spare Parts” means the spare parts to be provided by Turbine Supplier pursuant
to the Turbine Warranty and O&M Agreement (or required to be purchased for the WTG
Warranty to be effective) and the spare parts to be provided by Contactor pursuant to the
EPC Agreement.
“Standard Broadcast Site Review Study” means the Standard Broadcast Site
Review Study prepared by a qualified consultant and delivered to Buyer in final form
prior to the Effective Date.
“Strategy Effective Date” is defined in Section 5.12(a).
“Subcontractor” means any vendor, supplier, consultant, or subcontractor, of any
tier, materialman, professional, laborer or other Person providing materials, equipment or
services, directly or indirectly, to Contractor in connection with the performance of the
Work, including any Major Subcontractor.
“Substation Real Property” means the fee simple interests in the land described
in Schedule 1.1(f) consisting of approximately [BEGIN TRADE SECRET
END TRADE SECRET] and on which the collector substation for the Project is to be
located if the Company is able to acquire such fee simple interests pursuant to Section
5.10. If the Company is not able to acquire such fee simple interests pursuant to Section
5.10, references to the Substation Real Property in this Agreement shall mean the rights
of the Company under the applicable Land Contracts to locate such substation on such
property.
“Survey” is defined in Section 3.2.3(c).
“Target Closing Date” means [BEGIN TRADE SECRET
END TRADE SECRET] provided, however, that such date shall be extended on a day
for day basis for each day following the Effective Date that the achievement of Project
Substantial Completion is delayed due to (a) a Force Majeure Event, (b) an Excused
Interconnection Delay or (c) a Turbine Supplier Change Delay.
“Tax Authority” means the Internal Revenue Service and any other domestic or
foreign Authority responsible for the administration of any Taxes.
“Taxes” means all federal, state, local, foreign and other net income, gross
income, estimated, gross receipts, sales, use, ad valorem, transfer, franchise, profits,
license, lease, service, service use, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property taxes and levied and pending assessments,
windfall profits, value added, commercial rent, customs duties, capital gain, social
security, royalty, documentary or other taxes, fees, assessments, duties or charges of any
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PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
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Northern States Power Company
Attachment A – Page 33 of 147
kind whatever, together with any interest and any penalties, additions to tax or additional
amounts with respect thereto, and the term “Tax” means any one of the foregoing Taxes.
“Technical Specifications” means the description of the Work, Infrastructure
Facilities and WTGs for the Project as set forth on Exhibit I.
“Tentative Adverse Under Construction Determination” is defined in Section
2.2.3(b).
“Termination Damages” is defined in Section 11.1.3.
“Third Party Rights” is defined in Section 3.2.3(a)(iii).
“Title Company” means a title company selected by Seller and approved by
Buyer (such approval not to be unreasonably withheld).
“Title Objection Letter” is defined in Section 3.2.3(b).
“Title Objections” is defined in Section 3.2.3(b).
“Title Policy” is defined in Section 3.2.3(b).
“Title Policy Endorsements” is defined in Section 3.2.3(b).
“Title Report” means a preliminary title commitment or report of condition of
title to be prepared by the Title Company for each parcel of the Property covered by the
Land Contracts and the Real Property showing all Encumbrances disclosed in the official
records of Rolette County, North Dakota (and that sets out the real estate legal
description and the record title holder and also describes all mortgages, judgments, Tax
liens and other liens, Taxes, estates, life estates and other reservations by will or
conveyance, all Encumbrances of record as disclosed in the official records of Rolette
County, North Dakota (including easements and government regulations), and other
proceedings affecting title (together with a copy of all such underlying documents) that
are contained in the official records of Rolette County, North Dakota). The Title Report
will also contain proper searches covering Uniform Commercial Code financing
statements, bankruptcies, and federal and state judgments and liens.
“Transmission Owner” means the entity party to and identified under the
Interconnection Agreement as the owner of the electrical transmission system being
utilized for Interconnection or its successors or assigns thereunder.
“Turbine Supplier” means [BEGIN TRADE SECRET
END TRADE SECRET]
“Turbine Supplier Change Delay” means any change or delay to the Project
construction schedule resulting from a change in Turbine Supplier in accordance with
Section 5.15.
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PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
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Northern States Power Company
Attachment A – Page 34 of 147
“Turbine Supply Agreement” means the purchase agreement by and between
Seller or the Company and Turbine Supplier for the supply of turbines for the Project, in
form and substance satisfactory to Buyer.
“Turbine Warranty and O&M Agreement” means the warranty agreement
between the Turbine Supplier and Seller or the Company regarding the WTG Warranty
and pursuant to which the Turbine Supplier agrees to provide operation, maintenance or
warranty work with respect to the Project.
“Turnover Package” means:
(a)
the WTG Turnover Package; and
(b)
all engineering, design, purchasing and other information relating
to the Infrastructure Facilities, including: (i) a drawing index; (ii) a reference
index; (iii) copies of Contractor’s and Subcontractors’ Permits; (iv) copies of all
purchase orders on Major Subcontractor’s equipment (non-priced) with addenda;
(v) Subcontractor information for equipment purchased (as received from
vendors) including instruction and maintenance manuals from Subcontractors;
(vi) one copy of the As Built Drawings and Documentation; (vii) training
manuals; (viii) electrical 1-line diagrams for the Infrastructure Facilities; (ix) a
cable and raceway schedule for the Infrastructure Facilities; (x) connection
report/loop diagrams for the Infrastructure Facilities; and (xi) a final list and
summary of the work performed by all Subcontractors and verification of the
payment of all amounts due to Turbine Supplier or any Subcontractor.
“Under Construction” means that Seller or the Company can establish by facts
and circumstances that construction of the Project has begun (and a continuous program
of construction is being maintained or continuous efforts are being made to advance
towards completion) as described in the IRS PTC Publication, such that the Project meets
the definition of a “qualified facility,” as used in Section 45 of the Code or any
substantively equivalent successor provision of the Code providing for a federal tax credit
determined by reference to renewable electric energy produced from wind resources.
“Under Construction Certificates” means the Initial Under Construction
Certificate and the Final Under Construction Certificate.
“Under Construction Plan” is defined in Section 11.1.1(a).
“Under Construction Opinions” means the Initial Under Construction Opinion
and the Final Under Construction Opinion.
“Updated Title Objections” is defined in Section 5.11.
“Updated Title Report” is defined in Section 5.11.
“Updated Survey” is defined in Section 5.11.
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Attachment A – Page 35 of 147
“Warranty Parts Inventory” means the warranty parts inventory described in the
Turbine Warranty and O&M Agreement and the EPC Agreement.
“Weather Delays” means any time during a scheduled day of work at the Project
Site on which:
(a)
The erecting or commissioning of WTGs at the Project Site is
scheduled to occur; and
(i)
With respect to a day on which erection is scheduled to
occur, the main erection crane or the blade erection crane is unable to
operate due to actual winds with a speed at or in the vicinity of crane
boom tip-height or neighboring erected WTG hub height that [BEGIN
TRADE SECRET
END TRADE
SECRET] or
(ii)
With respect to a day on which commissioning is scheduled
to occur, the average wind speeds at hub-height of the relevant WTG are
[BEGIN TRADE SECRET
END TRADE SECRET] or
(b)
other inclement weather, including impaired visibility, wind shear,
ice and ice storms, prevents or substantially hinders the safe performance of the
Work but that does not rise to the level of Extreme Weather.
“Wetlands Assessment” means the wetlands study with respect to the Property
prepared by a qualified consultant and delivered to Buyer in final form.
“Wind Data” means any and all wind speed data and other relevant wind
characteristics data included, or included by reference, on Schedule 6.17, or obtained by
or on behalf of Company, Seller or any other of its Affiliates or their Representatives in
respect of the Project, along with all supporting documentation.
“Wind Turbine Generator” or “WTG” means [BEGIN TRADE SECRET
END TRADE SECRET] manufactured by the Turbine Supplier, to be supplied,
delivered, assembled, erected and installed by the Turbine Supplier, each equipped with a
rotor with a diameter of [BEGIN TRADE SECRET
END TRADE SECRET] including equipment, machinery, materials and
consumable parts related thereto and the following components: a tower, a turbine
nacelle, turbine blades, controller (including interconnecting cabling from the turbine
nacelle to the ground controller), control panels, converters, Var control technology
supplied by the Turbine Supplier, wind vanes, FAA lighting (if and as required),
grounding, and anemometers, all as more particularly described in the Technical
Specifications.
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PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
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“Work” means all work for the management of the construction of the Project, the
design, engineering, procurement, construction, Commissioning, start-up and turnover of
the Infrastructure Facilities and the procurement, delivery, assembly, erection,
installation, Commissioning, start-up and turnover of the WTGs, which work and
services shall include all aspects of the work described in the Scope of Work set forth in
the EPC Agreement, the Construction Services and the provision of all materials,
equipment, machinery, tools, labor, transportation, administration and other services and
items required to complete and deliver the fully integrated and operational Infrastructure
Facilities, the fully assembled, installed, tested and operational WTGs and the Project, all
in accordance with the Turbine Supply Agreement, the Turbine Warranty and O&M
Agreement, the EPC Agreement and this Agreement.
“WTG Price” means [BEGIN TRADE SECRET
TRADE SECRET]
END
“WTG Shortfall” means a number equal to [BEGIN TRADE SECRET
END TRADE SECRET]
“WTG Substantial Completion” means achievement of the following:
(a)
Contractor has achieved Commissioning and turnover of the
Electrical Works (including the installation of all grounding necessary to energize
the WTGs connected to the relevant electrical collection system circuit in
accordance with the requirements of the EPC Agreement), received a
Commissioning and Turnover Certificate and issued an Electrical Substantial
Completion Certificate to the Company with respect to such circuit that the
Company has accepted, in each case pursuant to the terms of the EPC Agreement;
(i)
Turbine Supplier has achieved Commissioning and
Turnover of WTGs for each such WTG connected to the relevant
electrical collection system circuit and received a Commissioning and
Turnover Certificate with respect to each such WTG and issued a WTG
Substantial Completion Certificate with respect to each such WTG to the
Company that the Company has accepted, in each case pursuant to the
terms of the Turbine Supply Agreement; and
(ii)
in the event Seller or the Company has satisfied clauses (a)
and (c) of the definition of Project Substantial Completion, with respect to
any WTGs subject to Section 9.5.3, the conditions set forth in the other
clauses of the definition of Project Substantial Completion shall have been
achieved with respect to such WTGs.
“WTG Substantial Completion Certificate” means a certificate in the form
attached to the EPC Agreement issued by the Contractor certifying as to the WTG
Substantial Mechanical Completion of a WTG.
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“WTG Turnover Package” means the (a) O&M manuals, (b) the erection and
start-up manual including Turbine assembly drawings, erection diagrams, connection
diagrams for the WTGs and the SCADA system, details of all interface points and
connections and a cable schedule and (c) the SCADA system logic diagram.
“WTG Warranty” means the warranty of the WTGs provided by the Turbine
Supplier pursuant to the Turbine Warranty and O&M Agreement. The WTG Warranty
shall include a serial defect provision applicable to the components acquired for the
Project through the Turbine Warranty and O&M Agreement mutually acceptable to the
Turbine Supplier, Seller and Buyer.
1.2.
Rules of Interpretation. Unless otherwise expressly provided or unless required
by the context in which any term appears:
(a)
the singular shall include the plural and the plural shall include the
singular; references to “Articles,” “Sections,” “Schedules,” or “Exhibits” (if any)
shall be to articles, sections, schedules or exhibits (if any) of this Agreement, as
the same may be amended, modified, supplemented or replaced pursuant to the
terms hereof from time to time;
(b)
all references to a particular entity shall include a reference to such
entity’s successors and permitted assigns;
(c)
the words “herein,” “hereof and “hereunder” shall refer to this
Agreement as a whole and not to any particular section or subsection of this
Agreement;
(d)
all accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles in the
United States of America, consistently applied;
(e)
references to this Agreement shall include a reference to all
Schedules and Exhibits hereto, including those to be attached or updated pursuant
to Section 3.1.2, as the same may be amended, modified, supplemented or
replaced from time to time;
(f)
references to any agreement, document or instrument shall mean a
reference to such agreement, document or instrument as the same may be
amended, modified, supplemented or replaced from time to time;
(g)
the use of the word “including” in this Agreement to refer to
specific examples shall be construed to mean “including, without limitation” or
“including but not limited to” and shall not be construed to mean that the
examples given are an exclusive list of the topics covered;
(h)
relative to the determination of any period of time, “from” means
“including and after,” “to” means “to but excluding” and “through” means
“through and including;”
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(i)
references to applicable Laws shall mean a reference to such
applicable Laws as the same may be amended, modified, supplemented or
restated and be in effect from time to time, including rules and regulations
promulgated thereunder;
(j)
unless otherwise specified to the contrary, the word “or” shall be
inclusive and shall have the meaning conveyed by “and/or,” and
(k)
references, directly or indirectly, to the WTGs or to the size of the
Project in MW shall be based on the nameplate capacity of [BEGIN TRADE
SECRET
END TRADE SECRET]
The Parties collectively have prepared this Agreement, and none of the provisions hereof
shall be construed against one Party on the ground that such Party is the author of this
Agreement or any part hereof.
ARTICLE 2.
PURCHASE AND SALE OF MEMBERSHIP INTERESTS
2.1.
Purchase and Sale of Membership Interests. Upon the terms and subject to the
conditions set forth in this Agreement, on the Closing Date, Seller shall sell, convey, transfer,
assign, and deliver to Buyer, free and clear of all Encumbrances, and Buyer (or its designated
Affiliate) shall purchase from Seller, all of the Purchased Interests, which Purchased Interests
shall be sold, conveyed, transferred, assigned and delivered to Buyer for the consideration
specified in Section 2.2.
2.2.
Purchase Price; Assumption of Liabilities.
2.2.1 Purchase Price. Buyer shall pay to Seller pursuant to this Agreement the
Adjusted Purchase Price for the Purchased Interests. The Adjusted Purchase Price shall
be paid when due by wire transfer of immediately available funds to the account specified
in writing by Seller for such purpose or, if so requested in writing by Seller, by such
alternative means of delivery of immediately available funds or other method of payment
as is reasonably acceptable to Buyer. The Adjusted Purchase Price shall be paid as
follows:
(a)
[BEGIN TRADE SECRET
END TRADE SECRET]
2.2.2 Excluded Liabilities. Except for Assumed Liabilities, as of the Closing
Date, the Company shall not be obligated to pay, perform or otherwise discharge or be
responsible or liable with respect to, (a) any Liabilities relating to the Project or any
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present or former developer, owner or operator of the Project incurred prior to the
Closing Date, whether or not associated with, or arising from, any of the Company
Assets, and whether fixed, contingent or otherwise, known or unknown, or (b) any other
Liabilities whenever incurred described in clauses (i) – (vii) of the definition of Assumed
Liabilities (collectively, the “Excluded Liabilities”).
2.2.3
Under Construction Determination. [BEGIN TRADE SECRET
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END TRADE
SECRET]
2.3.
Mechanics of Closing. The closing of the transactions contemplated by this
Agreement (the “Closing”) will take place at the offices of Dorsey & Whitney, 50 South Sixth
Street, Minneapolis, Minnesota at 9:00 a.m. on a mutually acceptable date within five (5)
Business Days following the satisfaction (or waiver) of the conditions set forth in Sections 3.3
and 4.2, (other than those conditions that by their nature are to be satisfied at the Closing), or at
such other place and on such other date as may be mutually agreed by Buyer and Seller (the date
on which the Closing actually occurs being referred to as the “Closing Date”; provided, however,
that if the satisfaction (or waiver) of the conditions set forth in Sections 3.3 and 4.2 (other than
those conditions that by their nature are to be satisfied at the Closing) occurs within five (5)
Business Days of the Guaranteed Completion Date, the Parties shall endeavor to cause the
closing to take place on or before the Guaranteed Completion Date. Any Closing shall be
effective as of 11:59 PM on the Closing Date.
2.4.
Closing Costs.
2.4.1 Expenses. Except as otherwise specified herein, each Party hereto shall
pay its own legal, accounting, out-of-pocket and other expenses incident to this
Agreement and to any action taken by such Party in preparation, negotiation, execution
and performance of this Agreement.
2.4.2
Prorations.
(a)
All rent, insurance premiums and other costs and expenses of the
Company relating to the ownership and operation of the Land Contracts relating
solely to WTGs that achieved WTG Substantial Completion, and the other
portions of the Project with respect to which Project Substantial Completion was
achieved, as of the Closing Date and the Real Property shall be prorated between
Seller and Buyer as of the Closing Date, so that Seller is responsible for the
prorated amounts for the period of time prior to the Closing Date, and Buyer is
responsible for the prorated amounts for the period of time from and after the
Closing Date. Without limiting the generality of Section 2.2.2 and for purpose of
clarity, Seller has the sole responsibility for making any option, construction or
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other payments due to landowners pursuant to the Land Contracts which arise
prior to the Closing Date or that relate to WTGs that did not achieve WTG
Substantial Completion, and the other portions of the Project with respect to
which Project Substantial Completion was not achieved, on or prior to the Closing
Date.
(b)
For the avoidance of doubt, Seller shall be responsible for crop
damage payments due under any Land Contract for crop damages caused prior to
the Closing Date or in connection with construction activities, regardless of when
the claim for such damages is made and Buyer shall be responsible for crop
damage payments due under any Land Contract relating solely to WTGs that
achieved WTG Substantial Completion, or to the other portions of the Project
with respect to which Project Substantial Completion was achieved, as of the
Closing Date for crop damages caused on or after the Closing Date unless such
damages are caused by construction activities.
(c)
From and after the Guaranteed Completion Date, Seller shall have
the right, upon sixty (60) days written notice to Buyer and the Company, to
request Buyer to cause the termination of any Land Contracts for which Seller has
sole continuing payment responsibility pursuant to Section 2.4.2(a). Within thirty
(30) days following receipt of such written notice, Buyer shall either (i) release
Seller from such continuing payment obligations (excluding any indemnity
obligations arising or accruing prior to the date of such release), or (ii) cause such
Land Contract to terminate.
2.4.3 Transfer Taxes. Seller shall be responsible for any transfer taxes and any
sales, use or other taxes imposed by applicable Law by reason of (a) the transfer of the
Purchased Interests to Buyer at the Closing; and (b) the purchase or other acquisition of
any of the Company Assets by, on behalf of or for the benefit of the Company on or prior
to the Closing, including in connection with the purchase of the Land Contracts or other
Company Assets by the Company from Sequoia on or prior to the Effective Date, and
including all state and county Taxes or fees that are payable in connection with the
conveyance of the Real Property to the Company. Buyer shall be responsible for any
such Taxes imposed by applicable Law by reason of the transfer of the Purchased
Interests, the Land Contracts or other Company Assets by the Company to Buyer after
the Closing.
2.4.4 Post-Closing Land Payments. On or prior to the Closing Date, Seller shall
make all regularly scheduled rent payments under Land Contracts that will come due
during the sixty (60) day period following the Closing Date; provided, however, that
Buyer shall reimburse Seller for any such payments pursuant to Section 2.5.
2.4.5 Independent Accountant and Independent Engineer Costs. [BEGIN
TRADE SECRET
END
TRADE SECRET]
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2.5.
Post-Closing Statement.
2.5.1 Post-Closing Statement. Within sixty (60) days after the Closing Date,
Buyer will prepare and deliver to Seller a closing statement (the “Post-Closing
Statement”) of the Company as of the close of business on the Closing Date setting forth
Buyer’s calculation of (a) revenues and other amounts paid to the Company following the
Operational Date or that are payable to the Company in respect of power sold by the
Company prior to the Closing Date, in each case, that are for the account of Seller
pursuant to Section 5.1, (b) payments made by Seller pursuant to Section 2.4.4 (unless
included in the calculation of clause (b) of the definition of the Adjusted Purchase Price)
and (c) any Excluded Liabilities incurred by the Company following the Closing Date.
Seller will provide Buyer such information as Buyer may reasonably request in
connection with its preparation of the Post-Closing Statement. If the amounts payable to
Seller exceed such Excluded Liabilities, then Buyer will pay to Seller an amount equal to
the excess, and if such Excluded Liabilities exceed the amounts payable to Seller, then
Seller will pay to Buyer an amount equal to the excess (in either case, the “Post-Closing
Adjustment”).
2.5.2 Payment of Post-Closing Adjustment. Unless Seller objects to the
amounts set forth in the Post-Closing Statement in accordance with Section 2.5.3,
payment of the Post-Closing Adjustment will be made within thirty (30) days after
Seller’s receipt of the Post-Closing Statement, together with interest at the Interest Rate
from the Closing Date to the date of payment of the Post-Closing Adjustment.
2.5.3 Post-Closing Adjustment Disputes. Within fifteen (15) days after delivery
of the Post-Closing Statement by Buyer to Seller, Seller may object in writing to the
amounts set forth in the Post-Closing Statement, stating in reasonable detail its objections
and providing its good-faith calculation of the objectionable amount or amounts. Buyer
will provide Seller such information as Seller may reasonably request in connection with
its review of the Post-Closing Statement. If Seller fails to deliver notice of its objections
within the fifteen (15) day period, Seller will be deemed to have accepted Buyer’s
calculation. If Seller objects to any amounts set forth in the Post-Closing Statement, the
Parties will attempt to resolve the dispute by negotiation in good faith. If the Parties are
unable to resolve the dispute within fifteen (15) days of the date of delivery of Seller’s
objection in writing, then either Party may refer the dispute to an Independent Accountant
mutually acceptable to the Parties, and the Independent Accountant will settle the dispute
as soon as practicable. If Buyer and Seller are unable to agree on the choice of an
Independent Accountant, they will select a nationally recognized accounting firm by lot
(after excluding the regular outside accounting firms of Buyer, Seller and the Company).
The determination of the Independent Accountant will be final and binding on the Parties,
and the Parties will share equally the fees and disbursements of the Independent
Accountant. The Independent Accountant will resolve any such objections and
determine, in accordance with the criteria specified in the first sentence of Section 2.5.1,
the amounts to be included in the Post-Closing Statement. The Parties will provide the
Independent Accountant, within ten (10) days of its selection, with a definitive statement
of the position of each Party with respect to each unresolved objection and will advise the
accounting firm that the Parties accept the Independent Accountant as the appropriate
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Person to interpret this Agreement for all purposes relevant to the resolution of the
unresolved objections. Buyer will provide the Independent Accountant access to the
Books and Records. The Independent Accountant will have fifteen (15) days to carry out
a review of the unresolved objections and prepare a written statement of its determination
regarding each unresolved objection. The determination of the Independent Accountant
will be set forth in writing and will be conclusive and binding upon the Parties. Buyer
will revise the Post-Closing Statement as appropriate to reflect the resolution of any
objections to the Post-Closing Statement pursuant to this Section 2.5.3.
2.5.4 Final Payment. Once any disputes in accordance with Section 2.5.3 have
been resolved between the Parties or determined by the Independent Accountant, then the
Post-Closing Adjustment will be promptly paid to the Party entitled to receive it as part
of the Final Completion Payment, together with interest at the Interest Rate from the
Closing Date to the date of payment of the Post-Closing Adjustment.
2.5.5 Allocation. Within one hundred twenty (120) days after the Closing Date,
Seller and Buyer shall agree upon the allocation of the Purchase Price to the Company
Assets. The Purchase Price shall be allocated among the Company Assets by dollar
amounts in accordance with (a) the categories set forth in Schedule 2.5.5 (the “Allocation
Categories”) and (b) Section 1060 of the Code and any Treasury Regulations
promulgated thereunder, or any successor provisions. Buyer and Seller agree that they
shall each report the allocation of the Purchase Price in a manner entirely consistent with
such allocation in all tax returns and forms (including, without limitation, Form 8594
which shall be filed with their respective federal income tax returns for the taxable year
in which the Closing occurs) and in the course of any tax audit, tax review or tax
litigation relating thereto.
ARTICLE 3.
EFFECTIVENESS; BUYER’S CONDITIONS PRECEDENT TO EFFECTIVENESS;
BUYER’S CONDITIONS PRECEDENT TO THE CLOSING
3.1.
Effectiveness.
3.1.1 Effective Date Conditions. The Parties agree and acknowledge that except
for the rights and obligations of the Parties set forth in [BEGIN TRADE SECRET
END TRADE SECRET] each of
which shall be effective as of the Signing Date, this Agreement shall not otherwise be
effective until the conditions set forth in [BEGIN TRADE SECRET
END TRADE SECRET] (the “Effective Date Conditions”) have been
satisfied (or waived in writing by the Party entitled to do so) and Buyer and Seller shall
each have executed and delivered an Effective Date Certificate in accordance with this
Section 3.1.1. Within three (3) Business Days following the satisfaction of the Effective
Date Conditions each of Buyer and Seller shall deliver to the other a copy of the Effective
Date Certificate duly signed by an authorized representative of such Party.
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3.1.2 Effective Date Schedules and Exhibits. Without limiting the effect of
Section 5.6, the Parties agree and acknowledge that the Effective Date Certificate shall
include as an attachment the Schedules and Exhibits that are to be delivered as of the
Effective Date (to the extent such Schedules and Exhibits are not delivered and attached
hereto as of the Signing Date), in the final form as agreed to the Parties in accordance
with the terms of this Agreement, as agreed to by the Parties pursuant to Section 5.6.
Neither Party shall have an obligation to deliver its Effective Date Certificate unless all
Schedules and Exhibits not agreed to as of the Signing Date have been agreed to by the
Parties.
3.2.
Buyer’s Conditions Precedent to Effectiveness. The obligation of Buyer to
execute the Effective Date Certificate shall be subject to fulfillment at or prior to such date of
each of the following conditions, except to the extent Buyer waives such fulfillment in writing.
The provision by Buyer to Seller of the Effective Date Certificate in accordance with Section
3.1.1 shall evidence completion to the satisfaction of Buyer or waiver by Buyer of completion of
each of the Effective Date Conditions set forth in this Section 3.2.
3.2.1 Permits. Except as provided in Section 5.12, Seller or the Company shall
have obtained all Permits required for the construction and commercial operation of the
Project in the name of the Company other than (a) any Permits that are of a type that are
routinely granted on application and would not normally be obtained before the
commencement of construction and which are listed on Part B of Schedule 6.13, and (b)
any Operating Permits. Each Permit set forth on Part F of Schedule 6.13, to the extent
any such Permit has been obtained, replaced, amended or modified since the Signing
Date, shall be in form and substance reasonably acceptable to Buyer.
3.2.2 Permitting Opinion. Seller shall have delivered to Buyer the Permitting
Opinion with respect to the Project.
3.2.3
Real Estate.
(a)
Land Contracts.
(i)
All of the Land Contracts shall be in full force and effect.
The Company shall have obtained and hold an IRS Form W-9 properly
completed and executed by each grantor under each of the respective Land
Contracts.
(ii)
[BEGIN TRADE SECRET
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SECRET]
(iii) All third party occupancy rights, whether written or oral, in
or affecting the Property or any Land Contract, including farming and
hunting rights (but not including any Insured Over Third Party Mineral
Rights) (“Third Party Rights”), must be identified and subordinated to the
applicable Land Contracts, or a nondisturbance or non-interference
agreement in form and substance reasonably acceptable to Buyer shall
have been executed by each Person holding such Third Party Rights.
[BEGIN TRADE SECRET
END TRADE SECRET]
(b)
Title Reports; Title Insurance Policy. Seller shall have delivered
or caused to be delivered to Buyer the Title Reports issued by the Title Company
as soon as practicable after the Signing Date. Within thirty (30) days after Seller
has delivered to Buyer the last of all of such Title Reports and the Surveys
required to be delivered pursuant to Section 3.2.3(c), Buyer shall provide Seller
with a title objection letter (the “Title Objection Letter”) setting forth (i) Buyer’s
objections to items identified in the Title Reports and the Surveys (collectively,
the “Title Objections”), (ii) a list of the required Buyer Affirmative Coverage, (iii)
a list of the mortgagees and other third parties from whom Buyer requires Seller
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to obtain non-disturbance and attornment agreements substantially in the form of
Exhibit E hereto (collectively, the “Non-Disturbance Agreements”) or otherwise
sufficient to enable the Title Company to remove the related exceptions from
Schedule B of the Title Reports or to issue endorsements to the Title Policy
affirmatively insuring the Company against loss arising out of the mortgages or
other Encumbrances disclosed in those Schedule B exceptions addressed by such
Non-Disturbance Agreements, and (iv) a list of third parties from whom Buyer
requires Seller to obtain estoppel certificates, affidavits or consents, including any
required Estoppel Letters pursuant to Section 3.2.3(a)(iii) (collectively, the
“Curative Documents”) in a form sufficient to cause the Title Company to
remove or to issue an affirmative endorsement against loss arising out of any
exception from Schedule B that is not a Permitted Encumbrance and to satisfy
Seller’s obligations in respect of Section 3.2.3(a). To assist Seller with expediting
its curative efforts required to address the Title Objections, Buyer will, as
promptly as practicable after the Signing Date and after the delivery by Seller to
Buyer of the Title Reports and the Surveys, notify Seller from time to time in
good faith of exceptions to title that Buyer reasonably believes will be Title
Objections or are likely to require Non-Disturbance Agreements or Curative
Documents. Notwithstanding the foregoing, Seller shall not be required to obtain
a Non-Disturbance Agreement from any oil and gas lessee where the term of the
lease has expired and Seller obtains an affidavit of non-production or otherwise
causes the Title Company to insure over the oil and gas lease in the Title Policy.
Seller will use its commercially reasonable efforts to cure each Title Objection
and take all commercially reasonable steps required by the Title Company to
eliminate each Title Objection as an exception to the Title Reports, or to issue an
endorsement to the Title Policy providing affirmative coverage to such exceptions
that are the basis for such Title Objection. Any Title Objection that the Title
Company is willing to insure over on terms acceptable to Buyer is referred to as a
“Permitted Title Exception.” Any Permitted Title Exception, and any matter
contained in the Title Reports that is not objected to by Buyer in the manner
aforesaid, will be deemed to be acceptable to Buyer and shall constitute a
Permitted Encumbrance. Except for any such Permitted Title Exception or
Permitted Encumbrance, prior to the Effective Date (and as a condition to Buyer’s
obligation to Closing), all Title Objections shall have been eliminated as an
exception to the Title Reports and all such Non-Disturbance Agreements and
Curative Documents, each in form and substance reasonably acceptable to Buyer,
shall have been executed and delivered and true, correct and complete copies
thereof shall have been delivered to Buyer. Seller shall have caused the Title
Company to issue to the Company an American Land Title Association (ALTA)
Form B 2006 Owner’s Title Insurance Policy (the “Title Policy”) (deleting the
arbitration clause) for the property covered by the Land Contracts and the Real
Property which policy (A) will be issued in an amount consistent with the
requirements imposed by Seller’s lenders under the financing described in Section
4.1.1, but in no case less than the assessed value of the Land Contracts (or the
Company’s interest in the real property subject thereof, as applicable) and the
Real Property, (B) shall be subject only to the Permitted Encumbrances, (C) shall
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show the Company as fee owner of the Real Property and as the sole holder of all
rights, title and interest granted under the Land Contracts (excluding the Land
Acquisition Contracts), (D) provide for full extended coverage over all general
title exceptions contained in such policies, and (E) include the following special
endorsements if required by Buyer and available for issuance in the State of North
Dakota: zoning, access, restrictions, utility, comprehensive, survey, tax parcel,
contiguity, subdivision, successor-in-interest and Sears endorsement, and location
(each of which shall be in the forms attached hereto in Schedule 3.2.3(b)) and
such other endorsements available in North Dakota as Buyer may request (the
“Title Policy Endorsements”)) and such additional affirmative coverage as Buyer
may reasonably request (collectively, the “Buyer Affirmative Coverage”).
Notwithstanding anything to the contrary herein, if the Title Policy includes a
non-disturbance endorsement in form and substance satisfactory to Buyer insuring
over the exercise of any Third Party Rights with respect to mineral interests, such
interests shall be deemed not to constitute Encumbrances for any purpose in this
Agreement (“Insured Over Third Party Mineral Rights”). Seller shall pay for all
Title Reports (and any amendments, updates and supplements thereto) and all
recording charges and expenses incurred in connection with recording any Land
Contracts (or amendments or memoranda thereof), any Non-Disturbance
Agreements, any Curative Documents and any Assignment and Assumption
Agreements and all premiums, fees and related charges incurred for the Title
Policy.
(c)
Surveys. With respect to each parcel of the Property that will be
insured by the Title Policy pursuant to Section 3.2.3(b), Seller, at its sole cost,
will, as soon as practicable after the date of the Agreement, have furnished to
Buyer a current survey of the real property covered by the Land Contracts and the
Real Property in form reasonably acceptable to Buyer and certified to Buyer,
Company, the Title Company and Buyer’s lender, if any, prepared by a licensed
surveyor in the State of North Dakota and conforming to 2011 ALTA/ACSM
Minimum Detail Requirements for Land Title Surveys (including items 1, 2
through 6, 7(a), 7(b), 8, 11(b), 13, 14 and 16 through 19 of Table A) and
disclosing the location of all existing improvements, plottable easements,
encroachments, roadways, utility lines, set back lines (including setbacks required
for compliance with noise limitations) and other matters shown customarily on
such windpark surveys, and showing access affirmatively to public streets and
roads (the “Survey”). The Survey shall include an overlay of the proposed
Facilities to be installed on the Property as indicated by the Site Plan.
(d)
Reinsurance. Within five (5) Business Days of Seller’s delivery of
the Title Reports, Seller shall cause to be delivered to Buyer a reinsurance
proposal containing reinsurers and reinsurance amounts acceptable to Buyer,
which reinsurance shall be issued pursuant to a facultative reinsurance agreement
acceptable to Buyer.
(e)
Real Property Interests. The Land Contracts and the Real Property
owned by the Company on such date shall:
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(i)
comprise all of the real property interests and other rights in
the Property that are necessary in connection with the acquisition,
development, construction, installation, interconnection, completion,
operation and to the extent reasonably foreseeable, the maintenance of the
Project, as applicable, in accordance with all Laws; and
(ii)
be sufficient to enable the Project to be located,
constructed, interconnected, and operated as contemplated hereunder; and
provide legal and physical ingress and egress rights to and from a public
right-of-way for the construction, operation and maintenance of the
Project.
3.2.4
Environmental.
(a)
None of Company, Seller or Seller’s other Affiliates shall have any
Liability for prior non-compliance with Environmental Laws related to the Project
and shall be in full compliance with all Environmental Laws relating to the
Project, including with respect to impacts to wildlife (except as provided in
Section 5.12).
(b)
Buyer shall have accepted the Bird and Bat Conservation Strategy
pursuant to Section 5.12.
3.2.5 Reports. Seller shall have delivered to Buyer a copy of the Reports (which
shall be issued by qualified firms reasonably acceptable to Buyer) in final form and that
are reasonably satisfactory to Buyer.
3.2.6 Representations and Warranties. The representations and warranties of
Seller set forth in ARTICLE 6 (other than those which are only given on the Closing
Date) shall be true and correct as of the Effective Date. Buyer shall be satisfied in all
respects with Seller’s Schedules that are not attached in final form to this Agreement
upon execution of this Agreement.
3.2.7
Buyer Approvals.
(a)
Seller has delivered to Buyer and Buyer has approved (such
approval not to be unreasonably withheld) the EPC Agreement (including the
construction schedule), the Turbine Supply Agreement and the Turbine Warranty
and the O&M Agreement.
(b)
[BEGIN TRADE SECRET
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3.2.8
Delivery of Letter of Credit. [BEGIN TRADE SECRET
END TRADE SECRET]
3.2.9 Commission Approvals. The Commission Approvals shall have been
obtained or waived by Buyer as provided in Section 5.13.
3.2.10 FERC Approval. The transactions contemplated by this Agreement shall
have been approved by a Final Order by FERC under section 203 of the Federal Power
Act.
3.2.11 HSR Approval. All applicable waiting periods (and any extensions
thereof) under the HSR Act shall have expired or otherwise been terminated if the lenders
under the financing described in Section 4.1.1 require that (a) the required filings under
the HSR Act have been made and (b) the applicable waiting period shall have expired or
otherwise been terminated as a condition to advancing funds for construction of the
Project.
3.2.12 [BEGIN TRADE SECRET
END TRADE
SECRET]
3.2.13 Guaranty. [BEGIN TRADE SECRET
END TRADE SECRET]
3.2.14 Company-Sequoia Agreement. The Company and Sequoia shall have
closed the sale and purchase of the assets as contemplated by the Company-Sequoia
Agreement.
3.2.15 Covenants. Seller shall have performed and complied in all material
respects with the agreements, covenants and obligations required by this Agreement to be
performed or complied with by Seller at or before the Effective Date.
3.2.16 Certain Third Parties. Buyer and Seller shall have agreed upon the
Independent Engineer and the Independent Tax Attorney (if the firm designated in the
definition of Independent Tax Attorney is unable or unwilling to act in such capacity).
3.2.17 NSP Corporate Approval. Buyer shall have received approval from (a) its
board of directors and (b) Xcel Energy Inc., its sole shareholder, in each case, to
consummate the transactions contemplated by the terms of this Agreement (the “NSP
Corporate Approval”).
3.3.
Buyer’s Conditions Precedent to Closing. The obligation of Buyer to
consummate the transactions contemplated by this Agreement shall be subject to fulfillment at or
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prior to the Closing of each of the following conditions, except to the extent Buyer waives such
fulfillment in writing:
3.3.1 Deliveries by Seller at Closing. Upon the terms and subject to the
conditions set forth in this Section 3.3, on or before the Closing Date Seller shall deliver,
or shall cause to be delivered, to Buyer the following:
(a)
Assignment of Purchased Interests. Two (2) original counterparts
of the Assignment in substantially the form of Exhibit C hereto (the “Membership
Interest Assignment”), conveying to Buyer (or its designated Affiliate) of all of
Seller’s right, title and interest in the Company, including the Purchased Interests.
(b)
Consents. Seller shall deliver to Buyer original executed copies of
the Project-related consents that may be reasonably requested by Buyer to be
provided by Seller in accordance with Section 8.3, each in a form reasonably
satisfactory to Buyer.
(c)
certificates:
Certificates. Seller shall furnish Buyer with the following
(i)
A certificate executed by the Secretary or an Assistant
Secretary of Seller, certifying as of the Closing Date (A) a true and correct
copy of the corporate action of Seller authorizing the execution, delivery
and performance of this Agreement and the other Seller Documents to be
executed by it, and the consummation of the transactions contemplated
hereby and thereby and (B) incumbency matters.
(ii)
An affidavit from Seller, stating, under penalty of perjury,
Seller’s United States taxpayer identification number and that Seller is not
a foreign person, for purposes of Section 1445(b)(2) of the Code and
Treasury Regulation § 1.1445-2(b)(2)(iv)(B).
(iii) A certificate executed by an officer of Seller, certifying as
of the Closing Date that, other than any of Seller’s representations and
warranties set forth in ARTICLE 6 which by their terms speak only as to
the Effective Date, (A) Seller’s Absolute Representations are true and
correct in all respects, and Seller’s Material Representations are true and
correct in all material respects.
3.3.2
Representations and Warranties.
(a)
Other than any of Seller’s representations and warranties set forth
in ARTICLE 6 which by their terms speak only as to the Effective Date: (i)
Seller’s Absolute Representations shall be true and correct in all respects as of the
Closing Date and (ii) Seller’s Material Representations shall be true and correct in
all material respects as of the Closing Date; provided, however, that, if on the
Closing Date any of Seller’s Material Representations are (A) true and correct in
all material respects but are not true and correct in all respects or (B) any of
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Seller’s Material Representations are not true and correct in all material respects
but the cost to cure all such breaches in the aggregate does not exceed [BEGIN
TRADE SECRET
END TRADE SECRET] and (1) no Material
Adverse Effect has occurred, (2) such breach of Seller’s Material Representations
can reasonably be cured within six (6) months following the Closing Date, and (3)
Seller provides notice in writing to Buyer that it intends to cure such breach
within six (6) months following the Closing Date, (such event a “Representation
Holdback Event”) then:
(i)
this condition shall be deemed to be satisfied for the
purposes of whether the Closing shall be required to occur;
(ii)
Buyer may withhold the Representation Holdback Amount
until such breach has been cured; and
(iii) Seller shall use commercially reasonable efforts to cure
such breach as soon as practicable but in no event later than six (6) months
after the Closing Date.
If such breach is cured within six (6) months after the Closing Date, Buyer shall
pay to Seller the Representation Holdback Amount within five (5) Business Days
of such breach being cured. If Seller fails to cure such breach within six (6)
months after the Closing Date, Buyer’s sole remedy hereunder shall be to retain
the Representation Holdback Amount.
(b)
SECRET
The “Representation Holdback Amount” [BEGIN TRADE
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TRADE SECRET]
3.3.3 Permits. Seller shall have obtained all Operating Permits in the name of
the Company. Each Permit set forth on Parts A and F of Schedule 6.13, to the extent any
such Permit has been obtained, replaced, amended or modified since the Effective Date,
shall be in form and substance reasonably acceptable to Buyer.
3.3.4
Completion Certificates.
(a)
Seller shall furnish Buyer with true and complete copies of the
Project Substantial Completion Certificate, the WTG Substantial Completion
Certificate for each WTG, the Commissioning and Turnover Certificate for each
WTG, the Electrical Substantial Completion Certificate, the Mechanical
Completion Certificate and the Foundation Completion Certificate.
(b)
As of and following the Guaranteed Completion Date, if Buyer or
an Affiliate of Buyer is the Transmission Owner and, but for Excused
Interconnection Delays, (i) the conditions set forth in this Section 3.3 would have
been fulfilled or satisfied, (ii) WTG Substantial Completion would have occurred
as to any WTG or (iii) Project Substantial Completion would have occurred,
Seller shall have the right, but not the obligation, to elect upon notice to Buyer to
deem that (1) the conditions set forth in this Section 3.3 have been satisfied, (2)
WTG Substantial Completion has occurred as to the applicable WTGs, or (3)
Project Substantial Completion has occurred, as the case may be, solely for
purposes of this Section 3.3 and subject to Section 9.5.3. Such notice shall
include all supporting documentation and a certificate from the Independent
Engineer that the conditions set forth in Section 3.3 have been, or would have
been, satisfied but for the Excused Interconnection Delays.
3.3.5 No Material Adverse Effect. There shall be no Material Adverse Effect
existing as of the Closing Date. For the avoidance of doubt, any Material Adverse Effect
occurring between the Effective Date and the Closing Date, and any breach of any
representation or warranty, which has been cured prior to the Closing Date shall not be
deemed to be a Material Adverse Effect, or breach, as the case may be, which exists as of
the Closing Date.
3.3.6 HSR Approval. All applicable waiting periods (and any extensions
thereof) under the HSR Act shall have expired or otherwise been terminated.
3.3.7 Company Assets. As of the Closing Date, (a) the Company has acquired
the Company Assets and neither Seller nor the Company shall have sold, assigned,
transferred or otherwise disposed of any of the Company Assets; (b) the Company owns
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all of the Company Assets and the Company has not suffered any theft, damage, removal,
destruction or casualty loss of any of the Company Assets (except, in the case of (a) or
(b), assets that have been repaired or replaced with equivalent assets); and (c) the
Company Assets are not subject to any Encumbrance, except for Permitted
Encumbrances.
3.3.8 Project Warranties. As of the Closing Date each Project Warranty shall
(a) be in full force and effect for the benefit of the Company, (b) provide that it may be
subsequently assigned to Buyer, at Buyer’s discretion, and (c) continue for a period of
two (2) years from the Closing Date. Buyer acknowledges and agrees that the Turbine
Warranty and O&M Agreement may require that the Turbine Supplier provide operation
and maintenance services to the Company during the warranty period and that Buyer
shall be responsible for the costs of such services.
3.3.9
[BEGIN TRADE SECRET
END
TRADE SECRET]
3.3.10 Bring-Down of Permitting Opinion. Seller shall have delivered to Buyer a
“bring-down” version of the Permitting Opinion showing no material changes to the
Permitting Opinion.
3.3.11 Guaranty. The Guaranty shall be in full force and effect and shall not
have been modified, rescinded or revoked.
3.3.12 Real Estate.
(a)
All of the Land Contracts shall be in full force and effect.
(b)
If required pursuant to the Easement Agreement or reasonably
requested by Buyer, Seller shall have caused each Easement Agreement to have
been amended in accordance with its terms to show the exact location of all wind
farm improvements located on the real property subject to each respective
Easement Agreement (the “Final Layout Amendment”).
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(c)
Seller shall have delivered to Buyer, in a form reasonably
acceptable to Buyer and agreed upon by Buyer and Seller prior to the Effective
Date, an updated Estoppel Letter from each Person that is a party to the Land
Contracts which shall be dated not more than forty-five (45) days prior to the
Closing Date.
(d)
Except for any Permitted Encumbrances, all Updated Title
Objections shall have been eliminated as an exception to the Updated Title
Reports and all Non-Disturbance Agreements and Curative Documents required
pursuant to Section 5.11, each in form and substance reasonably acceptable to
Buyer, shall have been executed and delivered and true, correct and complete
copies thereof shall have been delivered to Buyer.
(e)
Seller shall have caused the Title Company to issue to the
Company an American Land Title Association (ALTA) Form B 2006 Owner’s
Title Insurance Policy (deleting the arbitration clause) for the property covered by
the Land Contracts and the Real Property which policy will be (i) issued in an
amount equal to [BEGIN TRADE SECRET
END TRADE
SECRET] or a lesser amount as may be mutually agreed between the Parties and
(ii) otherwise substantially equivalent to the Title Policy.
3.3.13 Covenants. Seller shall have performed and complied in all material
respects with the agreements, covenants and obligations required by this Agreement to be
performed or complied with by Seller at or before the Closing Date.
ARTICLE 4.
SELLER’S CONDITIONS PRECEDENT TO EFFECTIVENESS; SELLER’S
CONDITIONS PRECEDENT TO THE CLOSING
4.1.
Seller’s Conditions Precedent to Effectiveness. The obligation of Seller to
execute the Effective Date Certificate shall be subject to fulfillment at or prior to such date of
each of the following conditions, except to the extent Seller waives such fulfillment in writing.
The provision by Seller to Buyer of the Effective Date Certificate in accordance with Section
3.1.1 shall evidence completion to the satisfaction of Seller or waiver by it of completion of each
of the Effective Date Conditions set forth in Section 4.1.
4.1.1 Financing. The Company shall have entered into binding documents for
the provision of debt and/or equity financing to the Company on terms and conditions
satisfactory to Seller in an amount sufficient for the Company to construct the Project and
perform its obligations to achieve Project Substantial Completion under this Agreement
for an aggregate nameplate capacity of 150 MW, including its obligations under the EPC
Agreement and the Turbine Supply Agreement.
4.1.2 Representations and Warranties. The representations and warranties of
Buyer set forth in ARTICLE 7 (other than those which are only given on the Closing
Date) shall be true and correct as of the Effective Date. Seller shall be satisfied in all
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respects with Buyer’s Schedules that are not attached in final form to this Agreement
upon execution of this Agreement.
4.1.3 Commission Approvals. Buyer has obtained the Commission Approvals
or Buyer has waived obtaining Commission Approvals, and delivered to Seller the
opinions, as provided in the last sentence of Section 5.13.
4.1.4 FERC Approval. The transactions contemplated by this Agreement shall
have been approved by a Final Order by FERC under section 203 of the Federal Power
Act.
4.1.5 HSR Approval. All applicable waiting periods (and any extensions
thereof) under the HSR Act shall have expired or otherwise been terminated if the lenders
under the financing described in Section 4.1.1 require that (a) the required filings under
the HSR Act have been made and (b) the applicable waiting period shall have expired or
otherwise been terminated as a condition to advancing funds for construction of the
Project.
4.1.6 Market Based Rate Authority and EWG Status. The Company shall have
(i) received a Final Order from the FERC (or from the FERC’s staff, pursuant to
delegated authority) authorizing the Company to sell electricity at market-based rates,
and (ii) have filed a notice of self-certification that it qualifies as an “exempt wholesale
generator” within the meaning of the Public Utility Holding Company Act of 2005
(“PUHCA”), and deemed granted by operation of law because FERC took no action
within sixty days after the notice of self-certification was filed pursuant to Section 366.7
of FERC’s regulations implementing PUHCA, or the Company shall have otherwise
received a Final Order from FERC determining that the Company qualifies as an exempt
wholesale generator within the meaning of PUHCA.
4.1.7 Company-Sequoia Agreement. The Company and Sequoia shall have
entered into the Company-Sequoia Agreement and shall have closed the sale and
purchase of assets as contemplated by the Company-Sequoia Agreement.
4.1.8 Covenants. Buyer shall have performed and complied in all material
respects with the agreements, covenants and obligations required by this Agreement to be
performed or complied with by Buyer at or before the Effective Date.
4.1.9 Certain Third Parties. Buyer and Seller shall have agreed upon the
Independent Engineer and the Independent Tax Attorney (if the firm designated in the
definition of Independent Tax Attorney is unable or unwilling to act in such capacity).
4.1.10 NSP Corporate Approval. Buyer shall have received the NSP Corporate
Approval.
4.2.
Seller’s Conditions Precedent to Closing. The obligation of Seller to consummate
the transactions contemplated by this Agreement shall be subject to fulfillment at or prior to the
Closing of each of the following conditions, except to the extent Seller waives such fulfillment in
writing:
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4.2.1 Deliveries by Buyer Prior to the Project Closing. Upon the terms and
subject to the conditions set forth in this Section 4.2, on or before the Closing Date,
Buyer shall deliver, or shall cause to be delivered to Seller, the following:
(a)
Consideration. Buyer shall have delivered to Seller the Closing
Payment in accordance with Section 2.2.1(a).
(b)
Certificates. Buyer shall have furnished Seller with the following
certificates executed by the Secretary or Assistant Secretary of Buyer:
(i)
A certificate certifying as of the Closing Date (A) a true
and correct copy of the corporate action of Buyer authorizing the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby and thereby as of
the Closing, and (B) incumbency matters.
(ii)
Such other certificates, documents and instruments that
Seller reasonably requests for the purpose of (A) evidencing the accuracy
of Buyer’s representations and warranties, (B) evidencing the performance
and compliance by Buyer with the agreements contained in this
Agreement, (C) evidencing the satisfaction of any condition referred to in
this Section 4.2 or (D) otherwise facilitating the consummation of the
transactions contemplated by this Agreement.
4.2.2 Representations, Warranties and Covenants of Buyer. Buyer shall have
performed all agreements and covenants required hereby to be performed by it prior to,
on or as of the Closing Date and the representations and warranties of Buyer set forth in
ARTICLE 7 shall be true and correct as of the Closing Date.
4.2.3 HSR Approval. All applicable waiting periods (and any extensions
thereof) under the HSR Act shall have expired or otherwise been terminated.
4.2.4 Covenants. Buyer shall have performed and complied in all material
respects with the agreements, covenants and obligations required by this Agreement to be
performed or complied with by Buyer at or before the Closing Date.
ARTICLE 5.
PRE-CLOSING COVENANTS
5.1.
Seller Pre-Closing Actions. Seller shall cause the Company to, develop and
complete the Project and cause the Project to be engineered, designed, constructed,
commissioned, tested, operated and maintained in accordance with the Site Plan, Applicable
Standards, the Turbine Supplier’s specifications and recommendations pursuant to the Turbine
Supply Agreement, the Turbine Warranty and O&M Agreement, the Technical Specifications,
the EPC Agreement, the Project Quality Assurance Plan and this Agreement. Neither Seller nor
the Company shall amend, modify or supplement, or waive any provision or consent to any
variance in the terms thereof, any of the Turbine Supply Agreement, Turbine Warranty and
O&M Agreement, EPC Agreement, Interconnection Agreement, the Technical Specifications,
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the Project Quality Assurance Plan, following the Effective Date, any Permit set forth on Part A
of Schedule 6.13 or, after the Signing Date and prior to the Effective Date, any Permit set forth
on Part F of Schedule 6.13 without the prior written consent of Buyer, other than price increases
that are borne by Seller. In designing and constructing the Project, Seller shall cause the
Company to ensure that each WTG is either in a location designated as a turbine location on the
Site Plan or in a location otherwise agreed between Buyer and Seller (such agreement by Buyer
not to be unreasonably withheld), provided that Seller shall have the right to cause the Company
to relocate a WTG without the agreement of Buyer if such WTG will be located within the
location identified in the FAA Determination of No Hazard to Air Navigation and in any event
less than twenty-five (25) feet from the location shown on the Site Plan and such location is
permitted by the respective Easement Agreement. For the avoidance of doubt, nothing in this
Section 5.1 shall be construed as modifying Seller’s obligation under this Agreement to cause the
Company to achieve Project Substantial Completion on or before the Guaranteed Completion
Date. Seller shall cause any temporary meteorological towers (but not the Meteorological
Stations) to be removed from the site prior to the Final Closing Date. Seller shall be responsible
for all costs associated with developing, engineering, designing, constructing and commissioning
the Project and all costs of operating and maintaining the Project prior to the Closing Date and
Seller shall be entitled to receive and retain all revenues and other amounts received in respect of
power sold by the Company prior to the Closing and all emissions allowances or credits,
renewable energy credits, green tags, or other environmental or financial attributes of the
Facilities, if any, accruing prior to the Closing.
5.2.
Notification of Status of Pre-Closing Actions. Seller shall regularly communicate
and consult with Buyer regarding the continuing development, design, engineering, construction
and commissioning of the Project, and Seller shall in good faith consider Buyer’s input and
comment with respect to any matters that may arise in respect of such continued development,
provided that Seller shall have no obligation to perform in accordance with such input or
comment if it increases in any manner Seller’s express performance obligations under this
Agreement. Without limiting the generality of the foregoing, Seller shall keep Buyer reasonably
apprised with respect to the status of each of the actions taken or required to be taken by Seller
pursuant to Section 5.1 or Section 5.3, including (a) providing Buyer with a weekly tracking
sheet to show Seller’s progress in (i) the acquisition of Land Contracts, Easement Amendments,
Final Layout Amendments, Estoppel Letters, Non-Disturbance Agreements, Curative
Documents, Real Estate and Permits, (ii) the clearance of Title Objections and Updated Title
Objections and (iii) the construction and commissioning of the Project and (b) participating in a
weekly Project status call with Buyer and its representatives at times that are mutually approved
by Seller and Buyer. Seller also agrees to provide Buyer with any additional information and
access to Seller’s employees or any Person performing Seller’s obligations under Section 5.1 or
Section 5.3 for Seller as may be reasonably requested by Buyer in connection with the
completion of the tasks set forth in or performance of Seller’s obligations under this ARTICLE
5.
5.3.
Other Seller Actions. Throughout the period prior to the Closing Date, Seller
shall continue to pursue diligently Project activities including those necessary to satisfy all
Project-related conditions to the Closing. Seller shall provide to Buyer, as promptly as
practicable after receipt thereof, copies of any documents that are obtained, produced, generated
or entered into by Seller or any of its Affiliates in connection with the Project (other than
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attorney-client communications or work product), to the extent not furnished to Buyer prior to
the Effective Date, including the following:
5.3.1 Reports, Etc. Any testing or investigative results, audit reports,
assessments, analyses, Permits, applications, studies, wind, geo-technical or other data or
reports that relate to the Project prepared for or received by and in the possession and
control of Seller or its Affiliates, including supplements to any of the Reports, and any
notices or other written communications received from the FAA or any other Authority
relating to the subject matter of any of the Reports;
5.3.2 Design Documents. Any drawings or other design documents generated
by or otherwise obtained by Seller, Company, Contractor or any of their Affiliates;
5.3.3 Land Contracts. Any Land Contracts or other Contracts obtained by Seller
in connection with the development, construction or operation of the Project, and copies
of any notices or other communications delivered to or received from the other parties to,
or that affect, any such Land Contracts or other Contracts, including notice of any Third
Party Rights; and
5.3.4 Permits. Any Permits obtained by the Company or Seller that pertain to
the development, design, engineering, construction, commissioning, ownership or
operation of the Project.
5.3.5 Anticipation of Advance Closing. Seller shall promptly notify Buyer in
the event Seller anticipates the conditions to Closing set forth in Section 3.3 will be
satisfied prior to the Target Closing Date, provided that such notice shall occur at least 60
days prior to date upon which Seller anticipates such conditions shall be satisfied.
5.4.
Notification of Completion or Failure of Conditions. Each Party to this
Agreement will promptly notify the other Party of any satisfaction or failure of conditions under
this Agreement; and each Party shall keep the other Party reasonably apprised with respect to the
status of satisfaction of the notifying Party’s obligations hereunder.
5.5.
Inspection Rights; O&M Building.
5.5.1 Inspection Rights. Buyer or Buyer’s authorized representative may, but
shall not be obligated to, observe and inspect all aspects of the Work, and Seller hereby
authorizes Buyer and Buyer’s authorized representatives to maintain personnel at the
Site, continuously, at any time or from time to time, for such purposes. No observation
or inspection by Buyer or Buyer’s representatives, nor any election to not observe or
inspect, nor any acceptance or approval of the Work, in whole or in part, shall relieve
Seller of its obligations under this Agreement.
5.5.2
O&M Building.
(a)
Prior to completion of the construction of the operations and
maintenance building for the Project, Seller shall provide, or cause Contractor to
provide, temporary facilities at the on-site construction office complex for
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Buyer’s use. Such facilities shall be a furnished, heated, air-conditioned
doublewide construction trailer with electricity, phone system/phone lines, fax
line, hard wired high speed internet service (if available), potable water, sewer
and sanitary facilities. Such trailer shall be in close proximity to Contractor’s
temporary site office facilities.
(b)
Upon completion of the construction of the operations and
maintenance building for the Project, Seller will provide Buyer and Buyer’s
authorized representatives access thereto and use thereof prior to the Closing
Date, and Seller hereby authorizes such access and use; provided, however, that
(i) Buyer and its representatives shall only be permitted to enter and use such
operations and maintenance building to the extent that such entry and use does not
interfere with Seller’s ability to complete any of the Work, (ii) Buyer’s or Buyer’s
representatives access to or use of the operations and maintenance building shall
not relieve Seller of its obligations under this Agreement, and (iii) Buyer’s right to
access or use such building pursuant to the terms of this Section 5.5.2 shall
terminate on the Guaranteed Completion Date if the Closing has not occurred by
such date.
5.5.3 Safety; Compliance with Law. In connection with Buyer’s rights under
Section 5.5.1 and Section 5.5.2, Buyer and Buyer’s authorized representatives (a) shall
comply with all Laws and all Site safety rules of which Seller has made Buyer or Buyer’s
authorized representative aware and (b) shall not interfere with Seller’s or any
Contractors’ or Subcontractors’ performance of the Work.
5.6.
Cooperation Prior to Effective Date. The Parties acknowledge that [BEGIN
TRADE SECRET
END TRADE SECRET] depending on the final terms of the EPC Agreement and Turbine
Supply Agreement, it may be desirable in order to avoid confusion to conform certain defined
terms in this Agreement to the definitions of equivalent terms in the EPC Agreement and
Turbine Supply Agreement, as applicable. [BEGIN TRADE SECRET
END TRADE SECRET]
Any changes in the Exhibits or Schedules, or the form and content of any Exhibits and Schedules
not attached to this Agreement, or any changes to any defined terms in this Agreement, shall be
subject to the approval of each Party, which approval shall be in the sole discretion of the Party
giving the approval.
5.7.
Additional Reports. Seller shall deliver to Buyer no later than ten (10) Business
Days prior to the Effective Date true, correct and complete copies of the final form of any
Reports designated on Schedule 6.19 as preliminary, as pending a final determination of
necessity and which has been determined as necessary, or as otherwise not capable of being
prepared until a later stage of the Project. In the event a wetlands delineation is determined
necessary for inclusion in the Wetlands Assessment, a letter of concurrence with the wetlands
delineation from the Army Corps of Engineers shall be delivered to Buyer prior to the Closing
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Date. In the event there is a change in any findings or conclusions of a Report delivered and
accepted as satisfactory by Buyer prior to the Effective Date, Seller shall redeliver to Buyer no
later than ten (10) Business Days prior to the Closing Date true, correct and complete copies of
the final form such Report as revised to address such changes (any such redelivered Reports,
together with all other Reports delivered to Buyer pursuant to this Section 5.7, the “Additional
Reports”). Buyer shall notify Seller prior to the Closing Date if, in the exercise of Buyer’s
reasonable discretion, Buyer believes the facts disclosed in the Additional Reports constitute a
Material Adverse Effect. If Seller disagrees with such determination by Buyer, the Independent
Engineer will make such determination and the decision of the Independent Engineer shall be
conclusive and binding upon the Parties.
5.8.
Registrations and Qualifications. Seller shall give Buyer written notice of the
anticipated date of Interconnection not later than ninety (90) days and not sooner than one
hundred twenty (120) days prior to such date. Until Buyer receives such notice, it shall have no
obligations under this Section 5.8.
5.8.1 NERC Registrations and Qualifications. Buyer agrees to prepare
reliability protocols and standards for the operation of the Project in accordance with the
requirements of the North American Electric Reliability Corporation (“NERC”) for
utilization during the period from the date of Interconnection until the Guaranteed
Completion Date (or earlier termination of this Agreement). Buyer also agrees to assume
the responsibility for compliance with the requirements applicable to the NERC
“Generator Owner” and “Generator Operator” functions for the Project and to take the
steps necessary, if any, to register itself as the “Generator Owner” and “Generator
Operator” of the Project during the period from the date of Interconnection until the
Guaranteed Completion Date (or earlier termination of this Agreement). Seller and the
Company shall (a) cooperate in the preparation of such protocols, standards, filings and
applications, including, if requested by Buyer, entering into a joint registration
organization agreement or other similar agreement relating to Buyer’s obligations under
this Section 5.8.1, (b) comply with and implement in all respects with such protocols and
standards and (c) reimburse Buyer for its reasonable out-of-pocket costs and expenses
incurred in connection with Buyer’s obligations under this Section 5.8.1. Seller and the
Company shall be liable for any penalties assessed for violations of NERC requirements
applicable to the “Generator Owner” and “Generator Operator” functions for the Project
that occur prior to the Closing Date and until the Guaranteed Completion Date (or earlier
termination of this Agreement).
5.8.2 MISO Registrations and Qualifications. To the extent permitted by MISO
and its processes, Buyer agrees to act as agent for the Company to file and diligently
prosecute all necessary applications to register the Company with, and allow the
Company to sell power generated by the Project through, MISO for the period from the
date of Interconnection and until the Guaranteed Completion Date (or earlier termination
of this Agreement). Buyer’s obligations under this Section 5.8.2 shall be conditioned
upon Seller’s satisfaction of the condition set forth in Section 4.1.6 and, further, Buyer
shall have no obligation or authority to schedule or sell power during such period except
at the direction of the Company. Seller and the Company shall (a) cooperate in the
preparation of such filings, applications and registrations, including, if requested by
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Buyer, entering into an agency agreement or other similar agreement relating to Buyer’s
obligations under this Section 5.8.2, and (b) reimburse Buyer for its reasonable out-ofpocket costs and expenses incurred in connection with Buyer’s obligations under this
Section 5.8.2.
5.9.
Notification of Force Majeure Event; Efforts to Mitigate.
5.9.1 Notification of Force Majeure Event. Seller shall give Buyer notice
describing the particulars of the occurrence of any Force Majeure Event promptly after
Seller has actual knowledge of the event and that it results in a Force Majeure Event, and
in no event more than ten (10) days thereafter, and such notice shall estimate the expected
duration and probable impact on the performance of Seller’s obligations hereunder (and
Contractor’s obligations under the EPC Agreement or the Turbine Supplier’s obligations
under the Turbine Supply Agreement, as applicable), and Seller shall continue to furnish
timely regular reports with respect thereto during the continuation of the delay in Seller’s,
Contractor’s or the Turbine Supplier’s performance; provided, however, that for all
purposes hereunder, a Force Majeure Event shall be deemed to begin on the latest to
occur of (i) the date such event occurs, (ii) the date Seller obtains actual knowledge of
such event and that it results in a Force Majeure Event and (iii) the date ten (10) days
prior to the date Buyer receives the notice required pursuant to this Section 5.9.1.
5.9.2 Mitigation. Seller shall use commercially reasonable efforts to mitigate
the impact of any Force Majeure Event and the period of the Force Majeure Event shall
be no longer than the period in which Seller could reasonably overcome the Force
Majeure Event using its commercially reasonably efforts.
5.10.
[BEGIN TRADE SECRET
END TRADE SECRET]
5.11. Updated Title and Survey. From the Effective Date until and including the
Closing Date, Buyer has the on-going right to continue its due diligence activities with respect to
title to, and survey of, each parcel of the Property covered by the Land Contracts and the Real
Property, and to undertake new, and update existing, real property due diligence activities. On or
before twenty (20) Business Days prior to the Closing Date, Seller shall have delivered to Buyer
(i) an update of the Title Report (“Updated Title Report”) and, except for Permitted
Encumbrances, such Updated Title Report shall not reflect any Encumbrance not reflected on the
Title Report accepted by Buyer as a condition to the Effective Date, and (ii) an updated survey
(“Updated Survey”) of, each parcel of the Property covered by the Land Contracts and the Real
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Property at Seller’s cost. To the extent that the Updated Title Report identifies (x) one or more
Encumbrances, other than Permitted Encumbrances, that were not reflected on the Title Report,
or (y) one or more previously undisclosed third parties that have not executed the NonDisturbance Agreements described in Section 3.2.3(b) or Curative Documents, Buyer shall
identify the same (collectively, “Updated Title Objections”) in an updated Title Objection Letter
delivered to Seller within ten (10) Business Days after Buyer’s receipt of the Updated Title
Report. Seller will use its commercially reasonable efforts to cure each Updated Title Objection
and take all commercially reasonable steps required by the Title Company to eliminate each
Updated Title Objection as an exception to the Updated Title Reports. Any matter contained in
the Updated Title Reports that is not objected to by Buyer in the manner aforesaid, will be
deemed to be acceptable to Buyer and shall constitute a Permitted Encumbrance.
5.12.
Bird and Bat Conservation Strategy.
(a)
Seller has delivered the Bird and Bat Assessments to Buyer prior
to the execution of this Agreement. Seller shall develop, in consultation with
Buyer, the FWS and other applicable Authorities, and deliver to Buyer and the
FWS within [BEGIN TRADE SECRET
END TRADE
SECRET] after the execution of this Agreement, a plan for avian and bat
protection with respect to the development, construction, commissioning and
operation of the Project (the “Bird and Bat Conservation Strategy”); provided,
however, that Seller shall ensure that the FWS has a reasonable opportunity
[BEGIN TRADE SECRET
END TRADE SECRET] to review and respond to such strategy
prior to the Strategy Effective Date. [BEGIN TRADE SECRET
END
TRADE SECRET]
(b)
[BEGIN TRADE SECRET
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5.13. Regulatory Approval. Buyer shall utilize diligent and commercially reasonable
efforts to obtain all necessary approvals (the “Commission Approvals”) for the Project and the
acquisition of the Company from the Minnesota Public Utilities Commission and the North
Dakota Public Service Commission (the “Commissions”) required to be obtained by Buyer
pursuant to this Agreement and applicable Law, including (a) approval of the Project as an
eligible technology resource for purposes of full cost recovery under the Renewable Energy
Standard Cost Recovery Rider pursuant to Minn. Stat. § 216B.1645 which includes a return on
rate base associated with the actual purchase price of the Purchased Interests (inclusive of
applicable income tax impacts), Buyer’s internal capitalized costs for the Project, its normal
operations costs and the actual level of PTCs generated, (b) an advance determination of
prudence pursuant to Section 49-05-16 of the North Dakota Century Code (the “NDCC”), and
(c) a certificate of public convenience and necessity pursuant to Section 49-03-01.1 of the
NDCC. Buyer shall provide a copy of all correspondence relating to and all applications and
other documents sent to the Commission related to the foregoing within three (3) Business Days
of transmittal of such items to the Commission. All such Commission Approvals shall have been
obtained by Buyer on terms reasonably satisfactory to Buyer. On or before the fourteenth (14th)
Business Day after the Signing Date, Buyer shall make a filing with the Commissions seeking
the necessary Commission Approvals within one hundred and twenty (120) days. On or before
the date that is one hundred and thirty five (135) days after the Signing Date, Buyer shall either
(i) notify Seller that it has obtained the Commission Approvals on terms reasonably satisfactory
to Buyer, or (ii) notify Seller that Buyer has not obtained the Commission Approvals on terms
reasonably satisfactory to Buyer. If Buyer does not provide such notice to Seller on or before the
date that is one hundred and thirty five (135) days after the Signing Date, or if Buyer notifies
Seller it has not obtained the Commission Approvals on terms reasonably satisfactory to Buyer,
either Party shall have the right to terminate this Agreement by giving notice of termination to
the other Party within five (5) Business Days after the earlier of such date or such notice from
Buyer that it has not obtained the Commission Approvals on terms reasonably satisfactory to
Buyer; provided, however, that such notice of termination given by Seller shall have no effect if,
within three (3) Business Days after receiving it, Buyer (x) gives notice to Seller irrevocably
waiving receipt of the Commission Approvals as a condition to the Effective Date under this
Section 5.13 and (y) furnishes to Seller a legal opinion of its outside regulatory counsel in
Minnesota and North Dakota that it is legally able to close the transactions contemplated hereby
in accordance with this Agreement without the Commission Approvals.
5.14.
Other Filings.
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5.14.1 HSR Filings. Seller and Buyer shall each make an appropriate filing of a
notification and report form pursuant to the HSR Act with respect to the transactions
provided for in this Agreement on or before March 15, 2015, unless earlier filings and
expiration of waiting periods is required by the lenders under the financing described in
Section 4.1.1 as provided in Section 3.2.11 and Section 4.1.5, in which event Seller and
Buyer shall make (a) such filings on or before March 14, 2014, and (b) all appropriate
filings under the HSR Act after such date and on or before March 15, 2015, in order to
seek new, renewed or extended HSR Act clearance for the transactions provided for in
this Agreement. Seller and Buyer will each bear the costs and expense of their respective
filings under such act; provided, however, that (x) Buyer shall pay 50% and Seller shall
pay 50% of the filing fees incurred in connection with the initial round of such filings,
and (y) Seller shall pay 100% of the filing fees incurred in connection with the second
round of such filings if earlier filings and expiration periods are required by the lenders
under the financing described in Section 4.1.1 as provided in Section 3.2.11 and Section
4.1.5.
5.14.2 FERC 203 Application. Seller and Buyer shall cooperate to prepare and
file, on or before January 30, 2014, with the FERC a joint application for authorization of
the transactions provided for in this Agreement under section 203 of the Federal Power
Act. Seller and Buyer will each bear the costs and expense of their respective filings
under such act; provided, however, that Buyer shall pay 50% and Seller shall pay 50% of
any filing fees incurred in connection with such application.
5.14.3 EWG and Market Based Rate Application. The Company shall, on or
before January 30, 2014, file (a) for an Order from the FERC authorizing the Company to
sell electricity at market-based rates, and (b) a notice of self-certification that the
Company qualifies as an “exempt wholesale generator” within the meaning of PUHCA,
or, at the Company’s sole discretion, a petition for declaratory order from FERC finding
that the Company is an exempt wholesale generation within the meaning of PUHCA.
5.15. Turbine Supplier Change. If, based upon Seller’s commercially reasonable
judgment, Seller believes that [BEGIN TRADE SECRET
END TRADE SECRET]
the Turbine Supplier will not be able to perform under the Turbine Supply Agreement or the
Turbine Warranty and O&M Agreement, or any part thereof, Seller shall have the option to
change the Turbine Supplier to a Replacement Turbine Supplier and the model of WTGs for use
at the Facilities to a model manufactured by the Replacement Turbine Supplier that is of a
performance and reliability level substantially similar to the [BEGIN TRADE SECRET
END TRADE SECRET] wind turbines. Seller shall provide prompt
notice to Buyer that it desires to make a change in Turbine Supplier pursuant to this Section 5.15,
and provide Buyer with reasonable supporting documentation including, without limitation,
[BEGIN TRADE SECRET
END TRADE
SECRET] and Seller’s ability to procure the replacement WTGs from the Replacement Turbine
Supplier. The Parties shall promptly cooperate in making any modifications to the Agreement
necessitated by the change in Turbine Supplier; provided, however, that the overall economic
benefit to Buyer of the transactions contemplated by the Agreement shall be substantially
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equivalent following any such modification including, without limitation, the Project’s eligibility
to qualify for PTCs.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer, as of the Signing Date to the extent
indicated in Section 3.1, as of the Effective Date and as of the Closing Date, as follows;
provided, however, that to the extent any representation and warranty is specified as being given
at the Signing Date, Effective Date or Closing Date, such representation and warranty shall be
deemed to be made only as of such date:
6.1. Corporate Existence and Powers. Seller is a corporation validly existing and in
good standing under the Laws of the State of Delaware, and has all the requisite power and
authority to conduct its business as it is now being conducted and to own, lease and operate its
assets. Seller’s Corporate Documents are in full force and effect. Seller is not in violation of its
Corporate Documents in any manner that would have a Material Adverse Effect on the Project or
on the completion of the transactions contemplated by this Agreement or by the Seller
Documents.
6.2.
Company Existence and Powers. The Company is a limited liability company
duly formed, validly existing and in good standing under the Laws of the State of Delaware, and
has all the requisite power and authority to conduct its business as it is now being conducted and
to develop, engineer, design, construct, commission, own and operate the Project. The Company
has been engaged in no other business since its formation other than the development of the
Project. Seller has made available to Buyer true and complete copies of the Company’s
Corporate Documents and such Corporate Documents are in full force and effect. The Company
is not in violation of any Law or of its Corporate Documents.
6.3.
Authority. Seller has all requisite power and authority to execute and deliver this
Agreement, each Ancillary Agreement and each other agreement, document or instrument to be
executed by it in connection herewith (collectively, the “Seller Documents”) and to perform the
obligations hereunder and thereunder. Neither Seller’s interest in any of the Purchased Interests,
nor Seller’s performance of its obligations under the Seller Documents requires any
qualification, licensing or approval by any foreign jurisdiction. Seller has taken all action
necessary to execute and deliver this Agreement and the other Seller Documents, as applicable,
to consummate the transactions contemplated hereby and thereby and to perform its obligations
hereunder and thereunder, and no other action or proceeding on the part of Seller is necessary to
authorize this Agreement and the other Seller Documents and the transactions contemplated
hereby and thereby. This Agreement and the other Seller Documents have been duly executed
and delivered by Seller. Assuming the due authorization, execution and delivery by Buyer of
this Agreement and of the Seller Documents, this Agreement and the other Seller Documents
constitute legally valid and binding obligations of Seller, enforceable against Seller in
accordance with their terms, except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting the enforcement of
creditors’ rights generally and equitable principles. Seller owns all of the outstanding
membership interests in the Company and Seller has all requisite power and authority to cause
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the Company to develop, engineer, design, construct, commission, own and operate the Project
and to otherwise do all such things as are necessary to effect the transaction contemplated by this
Agreement and no other Person has any option or other enforceable right to acquire, and Seller
shall not permit any other Person to acquire any option or other enforceable right to acquire, any
membership interest or other equity interest in the Company.
6.4.
Consents and Approvals. Other than as set out in Schedule 6.4, no consent,
approval or authorization of, permit from, declaration, filing or registration with, or notice to,
any Authority, any third-party payor or any other Person, is required to be made or obtained by
Seller or the Company in connection with the execution, delivery, performance and validity of
this Agreement and the other Seller Documents and the consummation of the transactions
contemplated hereby and thereby.
6.5.
No Conflicts. Neither the execution, delivery and performance by Seller of this
Agreement or the other Seller Documents nor the transfer of rights and consummation of the
transactions contemplated hereby or thereby will result in (a) a violation of or a conflict with any
provision of Seller’s or the Company’s Corporate Documents; (b) a breach or violation of, a
conflict with or a default under, or the creation of any right of any Person to accelerate, terminate
or cancel, any Contract, whether oral or written, express or implied; (c) a violation by the
Company or Seller of any Laws, or (d) an imposition of any Encumbrance on (i) the Company
Assets (other than Permitted Encumbrances) or (ii) the Purchased Interests.
6.6.
Legal Proceedings. Other than as described in Schedule 6.6 and subject to
Section 6.8, there are no actions, suits or proceedings pending or, to Seller’s Knowledge,
threatened in writing, against or affecting the Project, the Company, the Company Assets or the
Purchased Interests or Seller’s transfer of the Purchased Interests and consummation of the
transactions contemplated hereby, at law or in equity, or before or by any Authority or
instrumentality or before any arbitrator of any kind, and, to Seller’s Knowledge, there is no valid
basis for any such action, proceeding or investigation.
6.7. Compliance with Law. Other than as set forth on Schedule 6.7, Company, Seller
and its other Affiliates have not received any notification indicating any violation of, and, to
Seller’s Knowledge, there is no violation of, or non-compliance with, any applicable Law,
license, franchise, permit, authorization or concession, as such would apply to the Project, the
Company, the Company Assets, the Purchased Interests or the transactions contemplated hereby.
6.8.
Environmental Matters.
(a)
The Bird and Bat Conservation Strategy deemed acceptable by
Buyer as provided in Section 5.12 has not been amended, modified or otherwise
changed (except for such amendments, modifications or other changes approved
by Buyer) since the Effective Date, and Seller and Company have complied with
all of the requirements, recommendations, conditions and other terms set forth
therein. [BEGIN TRADE SECRET
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END TRADE SECRET] The facts set forth in the Bird and Bat
Conservation Strategy were true and correct in all material respects as of the
Effective Date.
(b)
Other than as set out in Schedule 6.8 and as provided in Section
5.12: (i) the Company, Seller and its other Affiliates have no Liabilities and are
not subject to any judgment, decree or judicial order under Environmental Laws
relating to the Company Assets and are in compliance with all Environmental
Laws applicable to the Project and the Company Assets; (ii) the Company, Seller
and its other Affiliates have not received any request for information relating to,
or notice of, an alleged violation of Environmental Laws pertaining to the Project
or the Company Assets from any Authority; (iii) there are no pending claims,
enforcement matters, investigations, or notice of intent to sue and, to Seller’s
Knowledge, there are no facts, circumstances, conditions or occurrences relating
to the Project or the Company Assets that would be expected to form the basis of
any such claims, enforcement matters, investigations, or notice of intent to sue by
any Authority under any Environmental Law against the Company, Seller or its
other Affiliates; (iv) to Seller’s Knowledge, there has not been a Release of
Hazardous Materials on or otherwise affecting the Property or the Real Property;
(v) to Seller’s Knowledge, the Property and the Real Property are not subject to
any Encumbrance imposed by any Authority in connection with the presence on
or off such property of any Hazardous Material; and (vi) to Seller’s Knowledge,
no portion of the Property or the Real Property contains or has ever contained any
(A) underground storage tank, surface impoundment or similar device used for the
management of wastewater or any Hazardous Material, or (B) other waste
management unit dedicated to the disposal, treatment, or long-term storage
(greater than thirty (30) days) of waste materials or Hazardous Materials.
6.9.
Right and Title to Purchased Interests. On the Effective Date and on the Closing
Date, Seller will have good and marketable title to all of the Purchased Interests. Seller has not
done or suffered to be done anything whereby the Purchased Interests are or may be in any
manner encumbered or charged by, through or under Seller or an Affiliate of Seller. As of the
Effective Date and the Closing Date, there are no rights or interests of any third party relating to
the Purchased Interests and Seller has the full right, power and authority to transfer and deliver to
Buyer all right, title and interest in the Purchased Interests.
6.10. Right and Title to Company Assets. As of the Effective Date and the Closing
Date, the Company owns all right, title and interest in, to and under the Company Assets, subject
only to the Permitted Encumbrances.
6.11.
Land Contracts; Real Property.
6.11.1 Delivery of Land Contracts. For all Land Contracts assigned to, to be
assigned to, or entered into by the Company, Seller has previously delivered, or will
promptly after such Land Contracts shall be obtained by Seller or the Company deliver,
to Buyer true, correct and complete copies of the Land Contract and with respect thereto:
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(a)
each Land Contract is legal, valid, binding and in full force and
effect;
(b)
each Land Contract will continue to be legal, valid, binding and in
full force and effect on identical terms immediately following the consummation
of the transactions contemplated hereby (including any assignments and
assumptions referred to in ARTICLE 3 and ARTICLE 4);
(c)
neither Seller nor the Company is in breach or default under any
Land Contract and, to Seller’s Knowledge, no other party to any Land Contract
will be in breach or default, and no event will have occurred which, with notice or
lapse of time and without a cure being completed, would constitute a breach or
default thereunder or permit termination, modification or acceleration thereof;
(d)
neither Seller nor the Company has repudiated any provision of
any Land Contract and neither Seller nor the Company will have received oral or
written notice from any party to any Land Contract that such other party has
repudiated any provision thereof;
(e)
neither Seller nor the Company has received written notice of any
disputes in effect as to any Land Contract, except as set forth on Part B of
Schedule 6.11;
(f)
there are no oral agreements or oral forbearance programs made by
Seller or the Company in effect for any Land Contract, except as set forth on Part
C of Schedule 6.11;
(g)
no Land Contract has been mortgaged, deeded in trust, or
encumbered by Seller or the Company except for Permitted Encumbrances and
Encumbrances released on or prior to the Closing; and
(h)
no Land Contract has been (i) transferred, (ii) amended, modified
or supplemented except as set forth on Part A of Schedule 6.11 and except for the
Easement Amendments or (iii) subjected to any Encumbrance, including any
Third Party Right, except for Permitted Encumbrances.
6.11.2 Land Contracts; Real Property. Part A of Schedule 6.11 contains a true
and complete list of all Land Contracts (and any amendments thereto) that will be
included in the Company Assets. The condition set forth in Section 3.2.3(e)) shall be
satisfied as of the Closing Date.
6.11.3 Third Party Rights. Except for Insured Over Third Party Mineral Rights,
Part D of Schedule 6.11 identifies all Third Party Rights in the Property or that affect any
Land Contract, and a correct and complete copy of any written Third Party Rights have
been delivered to Buyer.
6.11.4 Real Property. Except as set forth on Part E of Schedule 6.11, the zoning,
or land use approvals from applicable Authorities, for each parcel of Property permits the
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development, construction, and operation of the Project thereon. There is no action
before any Authority pending to change the applicable zoning or building ordinances or
any other Laws or applicable land use approvals affecting the Property that could
reasonably be expected to have an adverse effect on the Project.
6.12. Contracts. Schedule 6.12 contains a true and complete list of each material
Contract (other than the Land Contracts and the Permits) that is or shall be included in the
Company Assets. Seller has delivered to Buyer a correct and complete copy of each Contract, to
the extent such Contract was entered into prior to the Effective Date, as of the Effective Date,
and, to the extent such Contract is entered into after the Effective Date, as of the Closing Date.
With respect to each Contract not identified on Schedule 6.12, no such Contract, either
individually or in the aggregate, has or could reasonably be expected to have liability to the
Company in excess of Ten Thousand Dollars ($10,000). With respect to each Contract identified
on Schedule 6.12, as of the Effective Date with respect to each Contract entered into prior to the
Effective Date, as of the date entered into with respect to each Contract entered into after the
Effective Date, and as of the Closing Date with respect to all Contracts:
6.12.1 Valid and Enforceable. As of the Effective Date and the Closing Date,
each Contract is legal, valid, binding, and enforceable in accordance with its terms, and in
full force and effect, except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting the
enforcement of creditors’ rights generally and equitable principles;
6.12.2 Consummation of Transactions. The consummation of the transactions
contemplated by this Agreement (including the assignments and assumptions referred to
in ARTICLE 3 and ARTICLE 4) will not affect the legality, validity, binding nature,
enforceability or force and effect of any Contract except with respect to the identity of the
parties thereto as a result of the assignments and assumptions referred to in ARTICLE 3
and ARTICLE 4;
6.12.3 No Breach. As of the Effective Date and the Closing Date, there is no
breach, anticipated breach or default by Seller, the Company or, to Seller’s Knowledge,
any other party to any Contract, and no event has occurred which with notice or lapse of
time would constitute a breach or default, or permit termination, modification, or
acceleration, under any Contract; and
6.12.4 No Repudiation. As of the Effective Date and the Closing Date, neither
Seller nor the Company has repudiated any provision of any Contract and neither Seller
nor the Company has received written notice that any other party has repudiated any
provision of any Contract.
6.13. Permits. Schedule 6.13 is a true and complete list of all Permits needed to
develop, engineer, construct, commission, own and operate the Project (other than Permits which
Buyer may need by nature of Buyer being a public utility or which may be obtained only by
Buyer for itself or for the Company with respect to the operation of the Company after the
Closing (the “Buyer Permits”)). Part A of Schedule 6.13 is a true and complete list of all
Permits needed to develop, engineer, construct and commission the Project other than the Buyer
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Permits and the Permits listed in Part B of Schedule 6.13. Part B of Schedule 6.13 is a true and
complete list of all Permits needed to develop, engineer, construct and commission the Project
which are of a type that are routinely granted on application and would not normally be obtained
before the commencement of construction other than the Buyer Permits. Part C of Schedule 6.13
is a true and complete list of all Permits other than the Buyer Permits (the “Operating Permits”)
that the Company must hold as of the Closing Date for the ongoing ownership and operation of
the Project. As of the Signing Date, Seller or the Company has obtained all Permits listed on
Part F of Schedule 6.13, such Permits may be assigned by Seller to the Company in accordance
with the terms of such Permit or applicable Law, and Seller shall have delivered to Buyer a
correct and complete copy of each such Permit. As of the Effective Date, Seller or the Company
has obtained all Permits listed on Part A of Schedule 6.13, such Permits may be assigned by
Seller to the Company in accordance with the terms of such Permit or applicable Law, and Seller
shall have delivered to Buyer a correct and complete copy of each such Permit. As of the
Closing Date, the Company has obtained (or Seller has obtained and transferred to the Company)
all Permits listed on Schedule 6.13 except for such Permits which would be obtained by the
Contractor or Subcontractor in the ordinary course or Permits which Buyer may need to obtain
by nature of it being a public utility and Seller has delivered to Buyer a correct and complete
copy of all Permits. Except as set forth in Part C of Schedule 6.13, all Operating Permits either
run with the underlying land or are otherwise freely assignable by the Company without consent
or other action required by the applicable Authority. As of the Effective Date, no Permit listed
on Part F of Schedule 6.13 has been replaced, amended or modified since the Signing Date
without the approval of Buyer in accordance with Section 5.1. As of the Closing Date, with
respect to each Permit listed on Schedule 6.13:
6.13.1 Valid and Binding. Each (a) Operating Permit is legal, valid, binding and
enforceable in accordance with its terms, and in full force and effect, and (b) Permit listed
on Part A of Schedule 6.13 has not been replaced, amended or modified since the
Effective Date without the approval of Buyer in accordance with Section 5.1;
6.13.2 No Impact from Transaction. The consummation of the transactions
contemplated by this Agreement (including the assignments and assumptions referred to
in ARTICLE 3 and ARTICLE 4) do not affect the legality, validity, binding nature,
enforceability or force and effect of any Permit except with respect to the identity of the
parties thereto as a result of the assignments and assumptions referred to in ARTICLE 3
and ARTICLE 4;
6.13.3 Compliance. Seller, Company, EPC Contractor and the Project are in
compliance with the terms and conditions of each Permit, and, to Seller’s Knowledge, all
other parties to each Permit are in compliance with the terms and conditions of such
Permit, and, to Seller’s Knowledge, no event has occurred which with notice or lapse of
time would constitute non-compliance with such terms and conditions; and
6.13.4 No Action. No action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or, to Seller’s Knowledge, threatened, which
challenges the legality, validity, or enforceability of any Permit.
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6.14. Finders. Other than Persons arranging any financing of the Project, (a) Seller has
not engaged any finder, broker or other intermediary in connection with the transactions
contemplated by this Agreement, and (b) neither Seller nor any of its Affiliates or representatives
or representatives has incurred any obligation or Liability, contingent or otherwise, for any
brokerage, agent’s or finder’s commissions, fees or similar payments in connection with the
Project, this Agreement or the transactions contemplated hereby for which Buyer or any of its
Affiliates could become liable or obligated or which could result in an Encumbrance on the
Company Assets on or after the Closing Date.
6.15. Intellectual Property. The Company owns or possesses sufficient rights (such as
through a license) to use all intellectual property used in connection with the development of the
Project and neither Seller nor the Company has received notice that the utilization of such
intellectual property infringes upon or violates the intellectual property rights of any other
person. Other than as set forth in Schedule 6.15, all assets of the Company are free of any third
party rights relating to intellectual or proprietary property or agreements, and the utilization by
the Company does not infringe upon or violate the intellectual property rights of any other
person.
6.16. No Other Agreements to Sell the Company Assets. Except for the agreements
and arrangements that Seller has or may enter into pursuant to the proviso contained at the end of
Section 8.11(a), Seller has no legal obligation, absolute or contingent, to any other Person or any
nonbinding agreement in principle, letter of intent or similar understanding with any Person to
sell or effect a sale of all or any portion of the Company Assets or to enter into any agreement or
cause the entering into of any agreement with respect to the foregoing. The copy of the
Company-Sequoia Agreement, as provided to Buyer on or prior to the Signing Date, is a true and
complete copy of such agreement and remains in full force in effect as of the Signing Date.
6.17. Wind Data. Seller delivered to Buyer true, correct and complete copies of all
Wind Data and any other information listed on Schedule 6.17. The Wind Data contained in the
documents set forth on Schedule 6.17 were collected at the locations and during the times set
forth in such documents.
6.18. Insurance. Schedule 6.18 sets forth all policies of fire, liability and other forms of
insurance insuring Seller (with respect to the Company or the Project), the Company or the
Company Assets. Such policies are in full force and effect, all premiums with respect thereto
covering all periods up to and including the date as of which this representation is being made
have been paid (other than retroactive premiums which may be payable with respect to
comprehensive general liability insurance policies), and no notice of cancellation or termination
has been received by the owner or holder of any such policy with respect to any such policy
which was not replaced on substantially similar terms prior to the date of such cancellation. No
pending claims exist under any such policies of insurance covering the Company Assets.
6.19. Reports. As of the Effective Date, except as provided in Section 5.12 and except
for changes in or updates to Reports as described in Section 5.7, Seller has delivered to Buyer
true, correct and complete copies of the Reports, which Reports do not indicate any issues,
circumstances or conditions that have had or could be reasonably likely to have a Material
Adverse Effect on the Project. As of the Closing Date, except as provided in Section 5.12 and
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except as set forth in the Schedules hereto, to Seller’s Knowledge, there has been no change in
circumstances in any material matters described in a Report.
6.20.
Tax Matters.
(a)
There are no Encumbrances for Taxes on the Purchased Interests
or the Company Assets other than, with respect to Company Assets, Permitted
Encumbrances. No proceedings are pending, and to Seller’s Knowledge, there are
no threatened proceedings with respect to Taxes relating to the Purchased
Interests, the Company Assets or, except as have not had and could not
reasonably be expected to have a Material Adverse Effect and do not and could
not reasonably be expected to materially impair Seller’s authority, right or ability
to perform its obligations hereunder and consummate the transactions
contemplated hereby, relating to Seller. There are no matters under discussion
between Seller and any Authority with respect to Taxes relating to the Purchased
Interests or the Company Assets, and no extensions of the statute of limitations
have either been requested or granted with respect to Taxes relating to the
Purchased Interests, the Company Assets or, except as have not had and could not
reasonably be expected to have a Material Adverse Effect and do not and could
not reasonably be expected to materially impair Seller’s authority, right or ability
to perform its obligations hereunder and consummate the transactions
contemplated hereby, relating to Seller.
(b)
All applicable Tax returns involving the Company or the Project
have been filed when due. Income Taxes and property Taxes relating to the
Company or the Project arising or accruing prior to the Closing Date have been
timely paid by the Company or Seller or have been or will be prorated for the
account of Seller pursuant to Section 2.4.2. Seller is not a foreign person (as that
term is defined in Section 1445 of the Code and the Treasury Regulations
promulgated thereunder). No election has been filed to treat the Company as an
association taxable as a corporation for U.S. federal, date or local tax purposes.
6.21. Completed Project. As of the Closing Date, except as provided in Section 5.12,
the Company Assets shall constitute all of the contracts, equipment, spare parts, buildings,
facilities, licenses, permits, approvals, land rights and other assets necessary and sufficient for
the Company to own and operate that portion of the Project as to which Project Substantial
Completion has occurred as of the Closing Date, and no other equipment, buildings, facilities,
contracts, licenses, permits, approvals, land rights or other assets will be required in order to own
and operate such portion of the Project, except to the extent replacement equipment, including
spare parts, are not required to be provided under the EPC Agreement, the Turbine Supply
Agreement or the Turbine Warranty and O&M Agreement and except for the Buyer Permits.
6.22. Liabilities. Except for Liabilities (i) set forth in Schedule 6.22, or (ii) Assumed
Liabilities, the Company has no Liabilities as of the Closing Date.
6.23. Consents. As of the Closing Date, except as provided in Section 5.12, there are
no outstanding third party consents which have not been previously obtained and delivered to
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Company or Buyer, including those involving Real Property, Land Contracts or Permits, which
are required for the commercial operation of the Project, the completion of the transaction or the
subsequent transfer of any portion of the Project from the Company to Buyer.
6.24. Sufficient Funds. Seller (a) has and at all times prior to the Effective Date will
continuously have sufficient funds available, or will maintain sources for sufficient funding
capacity, to meet the financial requirements from time to time required to continue the
development of the Project to meet the conditions to the Effective Date set forth in Section 3.2
and (b) after completion of the financing contemplated in Section 4.1.1, at all times prior to the
Closing Date will continuously have sufficient funds available, or will maintain sources for
sufficient funding capacity, to meet the financial requirements from time to time required to
continue the development and construction of the Project to completion pursuant to this
Agreement and consummate the transactions contemplated by this Agreement.
6.25.
FAA Determinations of No Hazard to Air Navigation.
6.25.1 Effective Date. As of the Effective Date, the Company has obtained true,
correct and complete copies of a FAA Determination of No Hazard to Air Navigation for
each location where it plans to erect a WTG as part of the Project.
6.25.2 Closing Date. As of the Closing Date, the Company has obtained and
continues to hold true, correct and complete copies of a FAA Determination of No
Hazard to Air Navigation for each WTG erected as a part of the Project and such WTG
shall have been erected at the location depicted in such FAA Determination of No Hazard
to Air Navigation and thereafter or in connection with the issuance thereof neither the
Project, the Company nor Seller has received any communication from the FAA that
objects to the construction of any of the Facilities, asserts that any of the Facilities could
present a hazard to air navigation or that has had or is reasonably likely to have a
Material Adverse Effect.
6.26. Seller Project Warranty. Seller warrants that (a) all parts, materials and
equipment and the like incorporated into the Project shall be free of defects in material,
workmanship and title and shall be new, unused and undamaged and of suitable grade consistent
with Prudent Industry Practices when installed, (b) the Work shall be performed with due care,
skill, and in a manner consistent with applicable Laws (except as provided in Section 5.12) and
Applicable Standards and (c) the completed Work and all equipment shall perform its intended
design function as a complete integrated wind energy generation system as described in this
Agreement and in full accordance with the Technical Specifications (all of the foregoing,
collectively, the “Seller Project Warranty”), provided that, (a) Buyer agrees that it shall not
assert any claim against Seller for indemnification or otherwise in respect of the Seller Project
Warranty until it has first tendered such claim against the Contractor, the Turbine Supplier, or
both and Contractor and/or Turbine Supplier (as applicable) have denied responsibility for such
claim, and (b) to the extent Seller pays any Buyer claim in respect of the Seller Project Warranty,
Buyer shall cause the Company to grant Seller any and all rights of subrogation under the EPC
Agreement or the Turbine Warranty and O&M Agreement with respect to such claim to recover
the amounts in respect of such claim from Contractor or Turbine Supplier (as applicable) and
hereby agrees to assign any and all rights with respect to such claim which Buyer may have
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under the EPC Agreement and the Turbine Warranty and O&M Agreement necessary to enable
Seller to pursue such claim against Contractor and/or Turbine Supplier (as applicable). Insofar
as the Seller Project Warranty relates to the WTGs, the parts, materials and equipment
incorporated therein, or the installation or performance thereof, the Seller Project Warranty shall
be deemed not to be any broader or more extensive than the warranty from the Turbine Supplier
under the Turbine Warranty and O&M Agreement and the survival period with respect to such
portion of the Seller Project Warranty shall be limited to the warranty period under the Turbine
Warranty and O&M Agreement.
ARTICLE 7.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller, as of the Signing Date, as of the Effective
Date and as of the Closing Date, as follows:
7.1. Corporate Existence and Powers. Buyer is a corporation validly existing and in
good standing under the Laws of the State of Minnesota, and has all the requisite power and
authority to conduct its business as it is now being conducted and to own, lease and operate its
assets. Buyer’s Corporate Documents are in full force and effect. Buyer is not in violation of its
Corporate Documents in any manner that would have a Material Adverse Effect on the
completion of the transactions contemplated by this Agreement or by the Buyer Documents.
7.2.
Authority. Subject to obtaining the NSP Corporate Approval, Buyer has all
requisite power and authority to execute and deliver this Agreement, each Ancillary Agreement
and each other agreement, document or instrument to be executed by it in connection herewith
(collectively, the “Buyer Documents”) and to perform its obligations hereunder and thereunder.
Buyer’s performance of its obligations under the Buyer Documents does not require any
qualification, licensing or approval by any foreign jurisdiction, except as set forth in Schedule
7.4. Subject to obtaining the NSP Corporate Approval, Buyer has taken all action necessary to
execute and deliver this Agreement and the other Buyer Documents, as applicable, to
consummate the transactions contemplated hereby and thereby and to perform its obligations
hereunder and thereunder, and no other action or proceeding on the part of Buyer is necessary to
authorize this Agreement and the other Buyer Documents and the transactions contemplated
hereby and thereby. This Agreement and the other Buyer Documents have been duly executed
and delivered by Buyer. Assuming the due authorization, execution and delivery by Seller of
this Agreement and of the Buyer Documents, this Agreement and the other Buyer Documents
constitute legally valid and binding obligations of Buyer, enforceable against it in accordance
with the respective terms thereof, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting the
enforcement of creditors’ rights generally and equitable principles.
7.3.
No Conflicts. Neither the execution, delivery and performance by Buyer of this
Agreement or the other Buyer Documents nor the transfer of rights and consummation of the
transactions contemplated hereby or thereby will result in (a) a violation of or a conflict with any
provision of Buyer’s Corporate Documents or (b) a violation by Buyer of any Laws.
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7.4.
Consents and Approvals. Other than as set out in Schedule 7.4, no consent,
approval or authorization of, permit from, declaration, filing or registration with, or notice to,
any Authority, any third-party payor or any other Person, is required to be made or obtained by
Buyer in connection with the execution, delivery, performance and validity of this Agreement
and the other Buyer Documents and the consummation of the transactions contemplated hereby
and thereby.
7.5.
Legal Proceedings. Other than as described in Schedule 7.5, there are no actions,
suits or proceedings pending or, to Buyer’s Knowledge, threatened in writing, against or
affecting the acquisition of the Purchased Interests by Buyer or the consummation of the
transactions contemplated hereby, at law or in equity, or before or by any Authority or
instrumentality or before any arbitrator of any kind, and, to Buyer’s Knowledge, there is no valid
basis for any such action, proceeding or investigation.
7.6.
Finders. Buyer has not engaged any finder, broker or other intermediary in
connection with the transactions contemplated by this Agreement. Neither Buyer nor any of its
Affiliates or representatives has incurred any obligation or Liability, contingent or otherwise, for
any brokerage, agent’s or finder’s commissions, fees or similar payments in connection with the
Project, this Agreement or the transactions contemplated hereby for which Seller or any of its
Affiliates could be liable or obligated or which could result in an Encumbrance on the Project or
any of the Purchased Interests.
7.7. Sufficient Funds. Buyer has and at Closing will have sufficient funds available,
or will have sources for sufficient funding capacity, to consummate the transactions
contemplated hereby, including to purchase the Purchased Interests and to pay the Purchase
Price.
7.8.
Compliance With Laws. Buyer is not in violation of any Law, except for
violations that would not, in the aggregate, have a Material Adverse Effect on Buyer’s ability to
perform its obligations hereunder.
ARTICLE 8.
CERTAIN COVENANTS
8.1.
No Breach of Representations and Warranties by Seller. Seller shall not, and
shall not permit the Company to, engage in any practice, take any action, embark on any course
of inaction or enter into any transaction or agreement that would violate any provision of this
Agreement or any of the other Seller Documents or that causes or results in, or could reasonably
be expected to cause or result in, any of the representations and warranties set forth in ARTICLE
6 to be untrue as of the Closing Date or after giving effect to any such practice, action, course of
inaction, transaction or agreement, nor take any action which could hinder the transactions
contemplated by this Agreement or the other Seller Documents, as applicable, provided that, this
Section 8.1 shall not affect the Buyer conditions precedent to Closing set forth in Section 3.3
and, the Parties agree that if such conditions precedent are met, Closing shall occur and Buyer
shall pay the Adjusted Purchase Price.
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8.2.
No Breach of Representations and Warranties by Buyer. Buyer shall not engage
in any practice, take any action, embark on any course of inaction or enter into any transaction or
agreement that would violate any provision of this Agreement or any of the other Buyer
Documents or that causes or results in, or could reasonably be expected to cause or result in, any
of the representations and warranties set forth in ARTICLE 7 to be untrue as of the Closing Date
or after giving effect to any such practice, action, course of inaction, transaction or agreement,
nor take any action which could hinder the transactions contemplated by this Agreement or the
other Buyer Documents or render such transactions less desirable to Seller.
8.3.
Consents and Reasonable Efforts. Buyer and Seller shall use their respective
reasonable efforts to obtain, or to assist in obtaining, all consents, approvals, transfers,
permissions, waivers, orders, reissuances and authorizations of (and make all necessary filings or
registrations with) all Authorities and other third parties which are required to be obtained or
made by them in connection with the consummation of the transactions contemplated by this
Agreement or in connection with the Project. At the request of either Party, the other Party shall
promptly execute and deliver, or cause to be executed and delivered as applicable, such other
documents, instruments of transfer or assignment, estoppels, files, books and records and do all
such further acts and things as may be reasonably requested by such Party to carry out or
evidence the terms and provisions of this Agreement.
8.4.
Buyer Confidential Information.
8.4.1 Buyer Confidential Information. Seller acknowledges that Buyer
Confidential Information is valuable and proprietary to the Project and Seller agrees not
to, directly or indirectly, use, publish, disseminate, describe or otherwise disclose any
Buyer Confidential Information in respect of the Project without the prior written consent
of Buyer. For purposes of this Agreement, “Buyer Confidential Information” shall
mean (a) any and all information provided by Buyer to Seller and identified by Buyer as
confidential and (b) any and all information provided by Buyer to Seller with respect to
the Project, or the transactions contemplated hereby. Information shall not be deemed to
be Buyer Confidential Information if (i) it has become generally known or available
within the industry or the public through no act or omission of Seller; (ii) Seller can
demonstrate that, prior to disclosure in connection with the transactions contemplated
hereby, such information was already in the possession of Seller; (iii) it was rightfully
received by Seller from a third party who became aware of it through no act or omission
of Seller and who is not under an obligation of confidentiality to Buyer, or (iv) Seller can
demonstrate it was independently developed by employees or consultants of Seller.
8.4.2 Duty to Maintain Confidentiality. Seller shall maintain any Buyer
Confidential Information which has been or will be disclosed directly or indirectly to
Seller by or on behalf of Buyer or its Affiliates in confidence and shall not disclose or
cause to be disclosed by them or any third party without Buyer’s prior express written
consent; provided, however, that Seller may disclose Buyer Confidential Information to
Sequoia (solely to the extent necessary to negotiate, enter into and consummate the
Company-Sequoia Agreement) and Persons who provide financial analysis, banking,
legal, accounting, or other services to Seller in connection with Seller’s evaluation or
implementation of the transactions contemplated by this Agreement, so long as such
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Persons (including Sequoia) have first been provided with a copy of Section 8.4 of this
Agreement and have been informed of the duties required hereby. If Buyer Confidential
Information is disclosed under the provisions of this Section 8.4.2, Seller shall notify
Buyer of the same in writing not later than five (5) Business Days following the
disclosure.
8.4.3 Permitted Disclosure. Notwithstanding Section 8.4.2, Buyer Confidential
Information may be disclosed if required by any Authority or otherwise by applicable
Law or stock exchange rule; provided, however, that (a) such Buyer Confidential
Information is submitted under any and all applicable provisions for confidential
treatment and (b) if Seller is permitted to do so, Buyer is given written notice of the
requirement for disclosure promptly after such disclosure is requested, so that it may take
whatever action it deems appropriate, including intervention in any proceeding and
seeking a protective order or an injunction, to prohibit such disclosure. If Buyer
Confidential Information is disclosed under the provisions of this Section 8.4.3, Seller
shall notify Buyer of the same in writing not later than five (5) Business Days following
the disclosure.
8.4.4 Limited Use. Seller agrees that it will not make any use of any Buyer
Confidential Information received pursuant to this Agreement except in connection with
the transactions contemplated by this Agreement, unless specifically authorized to do so
in writing, and this Agreement shall not be construed as a license or authorization to
Seller to utilize Buyer Confidential Information except for such purpose.
8.4.5 Return or Destruction. Upon Buyer’s request, Seller shall return to Buyer
or destroy as promptly as practicable, but in a period not to exceed ten (10) days, (a) all
Buyer Confidential Information provided to Seller, including all copies of such Buyer
Confidential Information, and (b) all notes or other documents in digital or other format
in its possession or in the possession of other Persons to whom Buyer Confidential
Information was properly provided by Seller. Non-destruction of electronic copies of
materials or summaries containing or reflecting Buyer Confidential Information that are
automatically generated through data backup and/or archiving systems and which are not
readily accessible by a Party’s business personnel shall not be deemed to violate this
Agreement, so long as Buyer Confidential Information contained in or reflected in such
electronic backup records is not disclosed or used in violation of the other terms of this
Agreement.
8.4.6 Specific Performance. Seller acknowledges that a breach of the covenants
contained in this Section 8.4 will cause irreparable damage to Buyer, the exact amount of
which will be difficult to ascertain, and that the remedies at law for any such breach will
be inadequate. Accordingly, Seller agrees that if Seller breaches any of the covenants
contained in this Section 8.4, in addition to any other remedy that may be available at law
or in equity, Buyer shall be entitled to specific performance and injunctive relief, without
posting bond or other security.
8.5.
Seller Confidential Information.
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8.5.1 Seller’s Confidential Information. Buyer acknowledges that Seller
Confidential Information is valuable and proprietary to Seller and Buyer agrees not to,
directly or indirectly, use, publish, disseminate, describe or otherwise disclose any Seller
Confidential Information in respect of the Project without the prior written consent of
Seller. For purposes of this Agreement, “Seller Confidential Information” shall mean
(a) any and all information provided by Seller to Buyer and identified by Seller as
confidential and (b) any and all information provided by Seller to Buyer with respect to
the Project or the transactions contemplated hereby. Information shall not be deemed to
be Seller Confidential Information if (i) the Project Closing has occurred and such
information is also a Company Asset under this Agreement; (ii) it has become generally
known or available within the industry or the public through no act or omission of Buyer;
(iii) Buyer can demonstrate that, prior to disclosure in connection with the transactions
contemplated hereby, such information was already in the possession of Buyer; (iv) it
was rightfully received by Buyer from a third party who became aware of it through no
act or omission of Buyer and who is not under an obligation of confidentiality to Seller;
or (v) Buyer can demonstrate it was independently developed by employees or
consultants of Buyer.
8.5.2 Duty to Maintain Confidentiality. Buyer shall maintain any Seller
Confidential Information which has been or will be disclosed directly or indirectly to
Buyer by or on behalf of Seller or its Affiliates in confidence and shall not disclose or
cause to be disclosed by Buyer or any third party without Seller’s prior express written
consent; provided, however, that Buyer may disclose Seller Confidential Information to
Persons who provide financial analysis, banking, legal, accounting, or other services to
Buyer or any potential lenders to Buyer in connection with Buyer’s evaluation or
implementation of the transactions contemplated by this Agreement, so long as such
Persons have first been provided with a copy of Section 8.5 of this Agreement and have
been informed of the duties required hereby. If Seller Confidential Information is
disclosed under the provisions of this Section 8.5.2, Buyer shall notify Seller of the same
in writing not later than five (5) Business Days following the disclosure.
8.5.3 Permitted Disclosure. Notwithstanding Section 8.5.2, Seller Confidential
Information may be disclosed if required by any Authority or otherwise by applicable
Law or stock exchange rule; provided, however, that: (a) such Seller Confidential
Information is submitted under any and all applicable provisions for confidential
treatment and (b) if Buyer is permitted to do so, Seller is given written notice of the
requirement for disclosure promptly after such disclosure is requested, so that it may take
whatever action it deems appropriate, including intervention in any proceeding and
seeking a protective order or an injunction, to prohibit such disclosure. If Seller
Confidential Information is disclosed under the provisions of this Section 8.5.3, Buyer
shall notify Seller of the same in writing not later than five (5) Business Days following
the disclosure.
8.5.4 Limited Use. Buyer agrees that it will not make any use of any Seller
Confidential Information received pursuant to this Agreement except in connection with
the transactions contemplated by this Agreement, unless specifically authorized to do so
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in writing, and this Agreement shall not be construed as a license or authorization to
Buyer to utilize Seller Confidential Information except for such purpose.
8.5.5 Return or Destruction. Upon Seller’s request, Buyer shall return or
destroy as promptly as practicable, but in a period not to exceed ten (10) days, (a) all
Seller Confidential Information provided to Buyer, including all copies of such Seller
Confidential Information, and (b) all notes or other documents in digital or other format
in its possession or in the possession of other Persons to whom Seller Confidential
Information was properly provided by Buyer. Non-destruction of electronic copies of
materials or summaries containing or reflecting Seller Confidential Information that are
automatically generated through data backup and/or archiving systems and which are not
readily accessible by a Party’s business personnel shall not be deemed to violate this
Agreement, so long as the Seller Confidential Information contained in or reflected in
such electronic backup records is not disclosed or used in violation of the other terms of
this Agreement.
8.5.6 Specific Performance. Buyer acknowledges that a breach of the covenants
contained in this Section 8.5 will cause irreparable damage to Seller, the exact amount of
which will be difficult to ascertain, and that the remedies at law for any such breach will
be inadequate. Accordingly, Buyer agrees that if Buyer breaches any of the covenants
contained in this Section 8.5, in addition to any other remedy that may be available at law
or in equity, Seller shall be entitled to specific performance and injunctive relief, without
posting bond or other security.
8.6.
Tax Matters.
8.6.1 Prior to the Closing, neither Party shall negotiate with any Tax Authority
regarding the Project (other than as to any sales or use tax or as to any private ruling that
may be sought by Seller) without the prior written consent of the other Party (which may
not be unreasonably withheld), and if such consent is provided, any agreement with the
Tax Authorities shall also be subject to the prior written consent of the other Party (which
may not be unreasonably withheld).
8.6.2 Seller shall include all income, gain, loss, deduction and credit of the
Company and the Company Assets for any period ending on or prior to the Closing Date
in its Tax returns (“Seller Tax Returns”).
8.6.3 Seller shall prepare or cause to be prepared and file or cause to be filed all
Tax returns, if any, for the Company required to be filed on or before the Closing Date
(“Pre-Closing Tax Returns”). All such Pre-Closing Tax Returns shall be prepared in a
manner consistent with the Company’s past practice to the extent permitted by applicable
Law. Seller will pay all Taxes, if any, shown as due or required to be shown as due on
such Tax Returns of the Company.
8.6.4 Buyer shall prepare or cause to be prepared and file or cause to be filed
any Tax returns for the Company required to be filed (without regard to any extensions)
after the Closing Date, which returns shall be filed in accordance with applicable Law
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and prior Company practice. Seller shall pay to Buyer within fifteen (15) days after the
date on which Taxes are paid with respect to any such Tax return, an amount equal to the
portion of such Taxes that relates to the portion of such Tax period ending on or before
the Closing Date (the “Pre-Closing Period”), if any. Buyer shall use a closing of the
books method for allocating any Taxes to the Pre-Closing Period (for property Taxes it
shall be on a per diem basis and for sales and other similar Taxes on the basis of the date
on which such liability arose, without regard to when the Taxes are due and payable,
provided that Seller shall not be responsible for any increase in assessed values of the
assets of the Company or the Company Assets for purposes of computing property Taxes
taking effect on or after the Closing Date).
8.6.5 Any Tax refunds that are received by Buyer, and any amounts credited
against Taxes to which Buyer becomes entitled, which in either case arise with respect to
the Company or the Company Assets and relate to a Pre-Closing Period, shall be for the
account of Seller, and Buyer shall pay over to Seller any such refund or the amount of
any such credit or the appropriate percentage thereof within fifteen (15) days after receipt
thereof.
8.6.6 Any Tax refunds that are received by Seller, and any amounts credited
against Taxes to which Seller becomes entitled, which in either case arise with respect to
the Company or the Company Assets and relate to Tax periods after the Closing Date,
shall be for the account of Buyer, and Seller shall pay over to Buyer any such refund or
the amount of any such credit or the appropriate percentage thereof within fifteen (15)
days after receipt thereof.
8.6.7 After the Closing Date, Buyer and Seller shall provide each other with
such cooperation and information related to the Company as the Parties reasonably may
request in (a) filing any Tax return, amending any Tax return or claiming any Tax refund,
(b) determining any liability for Taxes or any right to Tax refunds or (c) conducting or
defending any proceeding in respect of Taxes (other than those specifically addressed in
Section 2.2.3, as to which the parties’ obligations as to cooperation shall be as set forth
therein). Seller and Buyer shall retain all Tax returns, schedules and work papers, and all
material records and other documents related thereto until the expiration of the statute of
limitations of the taxable years to which such Tax returns and other documents relate and
until the final determination of any Tax in respect of such years, but for no longer than
seven (7) years. At or before the Closing, Seller shall provide to Buyer copies of all
supporting documentation that was provided to the (x) Independent Tax Attorney in
connection with preparation of the Under Construction Opinions or (y) Independent
Engineer in connection with preparation of the Final Under Construction Plan IE
Certificate, in each case, including without limitation, construction schedules (planned
and actual) and support for costs incurred prior to the PTC Expiration Date.
8.6.8 With respect to any Taxes for which Seller is liable pursuant to this
Section 8.6, Seller shall control any audit, examination or administrative or judicial
proceeding relating to such Taxes if such audit, examination or administrative or judicial
proceeding relates to any Seller Tax Returns or Pre-Closing Tax Returns, provided that
Seller may not settle or resolve any such audit examination or proceeding if it affects any
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material liabilities for Taxes of Buyer or the Company for any periods or portions thereof
for which Seller is not liable without the prior written consent of Buyer in its sole
discretion (but consideration thereof shall not be unreasonably delayed). Buyer shall
control all other audits, examinations or administrative or judicial proceedings that affect
the Company. For this Section 8.6.8, Buyer shall consult in good faith with Seller as to
audits, examinations or administrative or judicial proceedings that may affect the Taxes
of Seller.
8.7.
Maintain a Qualified Facility. Seller shall and shall cause the Company to take all
actions necessary with respect to the Project in order to: (a) if the conclusions of the Initial Under
Construction Certificate and the Initial Under Construction Opinion are based on a determination
that “physical work of a significant nature” has commenced with respect to the Project,
“maintain a continuous program of construction that involves continuing physical work of a
significant nature” with respect to the Project (as described in the IRS PTC Publication); and (b)
if the conclusions of the Initial Under Construction Certificate and the Initial Under Construction
Opinion are based on a determination that Seller or the Company has paid or incurred five
percent or more of the total cost of the Project, “indicat[e] continuous efforts to advance [the
Project] towards completion” are being undertaken (as described in the IRS PTC Publication); in
the case of each of (a) and (b), during the period commencing as of the delivery of the Initial
Under Construction Certificate and ending on the Project Substantial Completion Date. If the
IRS (or any court of competent jurisdiction) issues guidance in addition to the IRS PTC
Publication with regard to how a taxpayer satisfies the requirement under Section 45(d)(1) of the
Code that specifies that “the construction of which begins before” the PTC Expiration Date,
Seller shall use commercially reasonable efforts to modify the Under Construction Plan, in a
manner reasonably acceptable to Buyer and the Independent Tax Attorney, to cause the Project
to satisfy such requirement.
8.8.
Bird and Bat Conservation Strategy. [BEGIN TRADE SECRET
END TRADE SECRET] Seller shall take all action and
to do all things necessary, proper or advisable to ensure the development, construction,
commissioning and operation of the Project prior to Closing complies with Environmental Laws
relating to the protection of avian and bat species, including modification or amendment of the
Bird and Bat Conservation Strategy necessary to conform such Strategy to such Environmental
Laws, as the same may be amended from time to time. [BEGIN TRADE SECRET
END TRADE SECRET] Buyer will make
commercially reasonable efforts to cooperate with Seller to address any situation that arises that
could reasonably be expected to cause noncompliance with the Bird and Bat Conservation
Strategy or applicable Laws.
8.9. Non-Disparagement. From the Signing Date until the earlier of the termination
date of this Agreement or the third anniversary of the Closing Date (the “Non-Disclosure
Period”) neither Seller nor Buyer shall make any statement or other communication that
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impugns or attacks the reputation or character of the Project, the Company or each other or any
of Seller’s or Buyer’s respective Affiliates or Representatives, or that damages the goodwill of
the Project, the Company or each other or any of Seller’s or Buyer’s respective Affiliates or
Representatives, take any action that would interfere with any contractual or customer
relationships of the Project, the Company or each other or any of Seller’s or Buyer’s respective
Affiliates or Representatives, including any action that would result in a diminution of business,
or otherwise take any action detrimental to the interests of the Project, the Company or each
other or any of Seller’s or Buyer’s respective Affiliates or Representatives (except to assert
Seller’s rights or Buyer’s rights, as applicable, under this Agreement); provided, however, that
this Section 8.9 shall not be understood to limit the ability or right of Buyer or Seller or any of
their respective Affiliates to compete with respect to future opportunities or the enforcement of
any contractual or other legal rights.
8.10. Confidentiality Regarding This Agreement. The Parties each acknowledge and
agree that the terms of this Agreement shall be considered Seller Confidential Information and
Buyer Confidential Information. Neither Buyer nor Seller shall issue any public announcement
or other statement with respect to this Agreement or the transactions contemplated hereby,
without the prior consent of the other Party (which consent shall not be unreasonably withheld),
unless required by applicable Law or stock exchange rule; provided, however, that both Buyer
and Seller shall have the right without obtaining such consent to include public information
concerning the Project in such Party’s marketing materials following the initial public
announcement by the other Party. In the event a Party breaches this Section 8.10, in addition to
and not in lieu of any legal or equitable remedies that may otherwise be available, the nonbreaching Party may, in its sole discretion, issue public announcements that the non- breaching
Party shall deem to be appropriate in its sole discretion to supplement, correct or amplify the
announcement or statement made by the breaching Party.
8.11.
No Shop.
(a)
Prior to the Closing, and unless and until this Agreement has been
earlier terminated pursuant to the terms hereof, Seller shall not, and it shall not
permit any of its Affiliates or any of its or their respective Representatives to:
(i)
initiate, solicit or seek, directly or indirectly, any inquiries
or the making of any proposal with respect to the direct or indirect
acquisition of the Company Assets or the Purchased Interests (whether
alone, in combination with or as part of a transaction involving other
assets of Seller or the Company, or the membership or other equity
interests in, the Company) by any Person other than Buyer (including by
means of a merger, acquisition, consolidation, recapitalization, liquidation,
dissolution, equity investment, transaction involving the assignment or
transfer of the contractual relationships of the Company Assets or the
Purchased Interests or similar transaction) (any such proposal or offer
being herein referred to as an “Acquisition Proposal”);
(ii)
engage in any negotiations or discussions with, or provide
any confidential information or data to, any Person other than Buyer (or
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their Representatives) relating to an Acquisition Proposal, or otherwise
facilitate any effort or attempt by a person other than Buyer to make or
implement an Acquisition Proposal; or
(iii) enter into or consummate any agreement or understanding
with any Person relating to an Acquisition Proposal;
provided, however, that, with respect to WTGs that Seller, the Company or any of
their Affiliates have agreed or may agree to purchase for use in the Project,
neither Section 6.16 nor this Section 8.11 shall restrict or limit Seller, the
Company or their Affiliates from continuing or initiating discussions or
negotiations with, or entering into agreements with, other Persons for the sale,
lease, use or other disposition of such WTGs as an alternative to using such
WTGs for the Project in the event that the Effective Date or Closing does not
occur or this Agreement is terminated.
(b)
Seller shall be responsible for any breach of the provisions of this
Section 8.11 by Seller, any of its Affiliates or any of its or their respective
Representatives.
8.12.
Alternate WTG Locations. [BEGIN TRADE SECRET
END TRADE SECRET]
ARTICLE 9.
ACTIONS BY SELLER AND BUYER AFTER THE CLOSING DATE
9.1.
Records. Seller and Buyer agree that each will cooperate with and make available
to the other Party, during normal business hours after reasonable advance notice, all books and
records relating to the Project or the Company retained and remaining in existence after the
Closing Date that are necessary in connection with any Tax inquiry, audit, investigation or
dispute, any litigation or investigation or any other matter requiring any such books and records.
The Party requesting any such books and records shall bear all of the out-of-pocket costs and
expenses (including attorneys’ fees) reasonably incurred in connection with providing such
books and records.
9.2. Survival. The representations and warranties of Buyer and Seller shall survive
until [BEGIN TRADE SECRET
END TRADE
SECRET] except (a) as provided in the last sentence of Section 6.26 and (b) that the
representations and warranties of each of Buyer and Seller relating to Taxes shall survive for the
period corresponding to the applicable statute of limitations for the Tax at issue. Claims for
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breach of any of the covenants and agreements of the Parties set forth herein shall survive the
Closing for the period corresponding to the applicable statute of limitations applicable to such
claims.
9.3.
Indemnifications.
9.3.1 By Seller. Seller shall indemnify, save and hold harmless, Buyer, its
Affiliates, and their respective employees, Representatives, officers, directors and agents
(collectively, the “Buyer Indemnified Parties”) from and against any and all costs, losses
(including diminution in value), liabilities (including liabilities arising under principles of
strict or joint and several liability), damages, lawsuits, deficiencies, claims and expenses
(whether or not arising out of third-party claims), including interest, penalties, additions,
travel expenses, wages allocable to loss of employee time, reasonable attorneys’ fees and
all amounts paid in investigation, defense or settlement of any of the foregoing
(collectively, the “Buyer Damages”), incurred in connection with or arising out of or
resulting from (a) any breach or violation of any covenant or agreement of Seller set forth
in this Agreement or any Seller Document, (b) any breach or inaccuracy in any of the
representations or warranties of Seller contained in this Agreement or any certificate
delivered by or on behalf of Seller pursuant to this Agreement, (any such breach or
inaccuracy to be determined without regard to any qualification for “materiality,” “in all
material respects” or similar qualification), (c) if the Closing has occurred, any failure by
Seller to pay, perform or discharge any Excluded Liability as and when due, (d) if the
Closing has occurred, any liability, obligation or commitment of Seller or the Company
of any nature (absolute, accrued, contingent or otherwise) relating to the Purchased
Interests and not assumed by Buyer pursuant to this Agreement, (e) any fraud, willful
misconduct or negligence in performance of this Agreement by Seller, or (f) Buyer’s
performance of its obligations under Section 5.8. Any indemnity payment required
hereunder shall be accompanied by a statement, certified to by an officer of Buyer,
showing in reasonable detail the calculation of the amount of the indemnity payment.
Notwithstanding anything to the contrary, no claim for indemnification shall be brought
pursuant to this Section 9.3.1 until the total Buyer Damages for which Seller would be
liable under this Section 9.3.1 exceeds in the aggregate a threshold amount equal to
[BEGIN TRADE SECRET
END TRADE
SECRET] and, once such amount is exceeded, indemnification may be sought for the
full aggregate amount of Buyer Damages, including indemnification for such amounts of
Buyer Damages as do not exceed such threshold amount; provided, however, [BEGIN
TRADE SECRET
END TRADE SECRET] Notwithstanding anything to the contrary, no claim
for indemnification shall be brought pursuant to this Section 9.3.1 with respect to any
risk, matter or Liability assumed by Buyer pursuant to Section 5.12
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9.3.2 By Buyer. Buyer shall indemnify, save and hold harmless, Seller, its
Affiliates, and their respective employees, Representatives, officers, directors and agents
(collectively, the “Seller Indemnified Parties”) from and against any and all costs, losses
(including diminution in value), liabilities (including liabilities arising under principles of
strict or joint and several liability), damages, lawsuits, deficiencies, claims and expenses
(whether or not arising out of third-party claims), including interest, penalties, additions,
travel expenses, wages allocable to loss of employee time, reasonable attorneys’ fees and
all amounts paid in investigation, defense or settlement of any of the foregoing
(collectively, the “Seller Damages”), incurred in connection with or arising out of or
resulting from (a) any breach or violation of any covenant or agreement of Buyer set
forth in this Agreement or any Buyer Document, (b) any breach or inaccuracy of any
representation or warranty, covenant or agreement (including the risks, matters and
Liabilities assumed by Buyer pursuant to Section 5.12) made by Buyer in this Agreement
or any other Buyer Document, including any breach by Buyer or Buyer’s authorized
representative of its obligations under Section 5.5.3, (c) if the Closing has occurred, any
failure of Buyer to pay, discharge or perform any of the Assumed Liabilities as and when
due, or (d) any fraud, willful misconduct or negligence in performance of this Agreement
by Buyer. Any indemnity payment required hereunder shall be accompanied by a
statement, certified to by an officer of Seller, showing in reasonable detail the calculation
of the amount of the indemnity payment. Notwithstanding anything to the contrary, no
claim for indemnification shall be brought pursuant to this Section 9.3.2 until the total
Seller Damages for which Buyer would be liable under this Section 9.3.2 exceeds in the
aggregate a threshold amount equal to [BEGIN TRADE SECRET
END TRADE SECRET] and, once such amount is
exceeded, indemnification may be sought for the full aggregate amount of Seller
Damages, including indemnification for such amounts of Seller Damages as do not
exceed such threshold amount; provided, however, [BEGIN TRADE SECRET
END TRADE SECRET]
9.3.3 Defense of Claims. If any action or proceeding (including any
governmental investigation or inquiry) shall be brought or asserted or threatened to be
brought or asserted against an indemnified Party in respect of which indemnity may be
sought from an indemnifying Party, such indemnified Party shall notify the indemnifying
Party in writing as promptly as practicable (and in any event within ten (10) Business
Days after the service of the citation or summons); provided, however, that the failure of
the indemnified Party to give timely notice hereunder shall relieve the indemnifying Party
of its indemnification obligations hereunder only if, and only to the extent that, such
failure caused Buyer Damages or Seller Damages (as applicable) for which the
indemnifying Party is obligated to be greater than they would have been had the
indemnified Party given timely notice, and the indemnifying Party promptly shall assume
the defense thereof, including the employment of counsel satisfactory to such
indemnified Party and the payment of all expenses. Such indemnified Party shall have
the right to employ separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall be the expense of such
indemnified Party unless (a) the indemnifying Party has agreed to pay such fees and
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expenses, (b) the indemnifying Party shall have failed to assume the defense of such
action or proceeding or shall have failed to employ counsel reasonably satisfactory to
such indemnified Party in any such action or proceeding in either case, promptly and no
more than five (5) Business Days after the receipt of notice pursuant to the preceding
sentence or such shorter period of time as shall be reasonable under the circumstances, or
(c) the named parties to any such action or proceeding (including any impleaded parties)
include both such indemnified Party and the indemnifying Party, and such indemnified
Party shall have been advised by counsel that there may be one or more legal defenses
available to such indemnified Party that are different from or additional to those available
to the indemnifying Party (in which case, if such indemnified Party notifies the
indemnifying Party in writing that it elects to employ separate counsel at the expense of
the indemnifying Party, the indemnifying Party shall not have the right to assume the
defense of such action or proceeding on behalf of such indemnified Party). The
indemnifying Party shall not be liable for any settlement of any such action or proceeding
effected without its written consent (unless such consent is unreasonably withheld), but if
settled with its written consent or without its written consent (if such written consent is
unreasonably withheld), or if there be a final judgment for the plaintiff in any such action
or proceeding, the indemnifying Party shall indemnify and hold harmless such
indemnified parties from and against any loss or liability by reason of such settlement or
judgment. The indemnified Party shall not be required to consent to the settlement of any
action or proceeding if such settlement involves anything other than the payment of
money by the indemnifying Party in full settlement of such action or proceeding.
9.3.4 Exclusive Remedy. Notwithstanding anything in this Agreement to the
contrary and subject to the following sentence, the indemnification obligations of the
Parties contained in this Section 9.3 (and subject to the limitations set forth in Section
9.4) shall be the sole and exclusive remedy of the Parties hereto, their Affiliates,
successors and assigns with respect to any and all claims for Buyer Damages or Seller
Damages, as applicable, sustained or incurred arising out of or relating to any breach of
any representation or warranty, covenant or agreement contained in this Agreement,
including any claims with respect to environmental, health and safety matters; and each
Party hereby expressly waives and disclaims, and agrees that it shall not assert, any right,
remedy (including the remedy of rescission) or claim in respect of any such breach or
losses based on any cause or form of action whatsoever, except as and to the extent
permitted in this Section 9.3; provided, however, that (i) the Parties may seek to enforce
the provisions of this Agreement by injunction, specific performance or other equitable
relief, (ii) either Party may seek any and all judicial relief with respect to any default by
the other Party to satisfy or the breach by the other Party of any of its obligations to pay
any amounts due and owing to such Party under this Agreement, and (iii) such limitation
shall not limit Buyer’s right to Liquidated Damages or return of the Deposit, subject to
the terms of this Agreement applicable thereto. This provision shall not limit any
available remedy of the Party seeking indemnification for any losses resulting from, or
related to, the fraud or willful misconduct of the other Party. Nothing in this Section
9.3.4 is intended to constitute a waiver or limitation of any rights that any Party (or their
respective Affiliates) may have to assert claims against third parties.
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9.3.5 Acknowledgements. Seller and Buyer each acknowledge that (i) only
representations, warranties, covenants or agreements expressly made in this Agreement
or the Ancillary Agreements will be deemed to be representations, warranties, covenants
or agreements for purposes of this Agreement, and (ii) neither Party has relied on any
representation, warranty, covenant or agreement not expressly made in this Agreement or
the Ancillary Agreements in consummating the transactions herein.
9.4.
Limitation of Liability. SUBJECT TO THE NEXT SENTENCE, IN NO EVENT
SHALL EITHER PARTY BE LIABLE FOR ANY LOST OR PROSPECTIVE PROFITS NOR
ANY PUNITIVE, EXEMPLARY, CONSEQUENTIAL, INCIDENTAL OR INDIRECT
LOSSES OR DAMAGES (IN TORT, CONTRACT OR OTHERWISE) UNDER OR IN
RESPECT TO THIS AGREEMENT. THE FOREGOING EXCLUSION SHALL NOT (A)
PRECLUDE RECOVERY, WHERE APPLICABLE, OF LIQUIDATED DAMAGE
AMOUNTS HEREUNDER, OR (B) PRECLUDE RECOVERY UNDER ANY INDEMNITY
IN ARTICLE 9, TO THE EXTENT THAT INDEMNIFICATION OBLIGATIONS FOR
DAMAGES TO A THIRD PARTY COULD BE DEEMED TO BE CONSEQUENTIAL,
SPECIAL, EXEMPLARY, INDIRECT, OR INCIDENTAL LOSSES OR DAMAGES.
Notwithstanding any other provision of this Agreement, including Section 9.3, (x) the aggregate
Buyer Damages to which the Buyer Indemnified Parties shall be entitled under Section 9.3.1
shall not exceed the Seller Indemnity Cap, and the aggregate Seller Damages to which the Seller
Indemnified Parties shall be entitled under Section 9.3.2 shall not exceed [BEGIN TRADE
SECRET
END TRADE
SECRET] provided, however, that neither Party shall have any further liability under Section
9.3.1 or Section 9.3.2, as applicable, unless a claim is timely asserted during the applicable
survival period set forth in Section 9.2 hereof; provided, further, that the limitation of liability set
forth in this third sentence of this Section 9.4 is unrelated to and shall not apply to Seller’s or
Buyer’s (as applicable) liability in respect of (a) Seller’s obligation to remove any Encumbrances
on the Company Assets, other than Permitted Encumbrances, created or suffered to exist by
Seller or the Company, (b) the payment by Seller of Excluded Liabilities, (c) Seller’s obligations
in respect of Section 2.2.3, (d) Seller’s or Buyer’s obligations to make litigation expense
payments pursuant to Section 12.6, (e) Buyer’s obligation to pay the Purchase Price or the
Assumed Liabilities or (f) Buyer’s failure to close if all of the conditions precedent to Closing set
forth in Section 3.3 have been satisfied.
9.5.
Further Assurances.
9.5.1 Further Assurances. Subject to the provisions of Section 8.3, each of the
Parties shall use commercially reasonable efforts to take all action and to do all things
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement. Seller shall cooperate in the preparation and audit of
any financial statements required to be filed with any Person, including by giving Buyer
and their independent certified public accountants reasonable access to work papers and
other records, documents and written information of Seller and Seller’s independent
certified public accountants used to prepare or audit, or reasonably related to the
preparation or audit of, all financial statements of Seller to the extent reasonably required
for the preparation of such financial statements.
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9.5.2 Taxes. Each Party hereto agrees to furnish or cause to be furnished to
each other, upon request, as promptly as practicable, such information and assistance
(including access to books and records) relating to Seller and the Project, as is reasonably
necessary for the preparation of any return with respect to Taxes, claim for refund or
audit, and the prosecution or defense of any claim, suit or proceeding relating to Taxes.
9.5.3
Completion.
(a)
In the event Seller exercises its right to cause Project Substantial
Completion or WTG Substantial Completion, as applicable, to occur pursuant to
Section 3.3.4(b), promptly, but in no event later than five (5) days following the
date that the Project achieves Interconnection, Seller shall commence, and shall
diligently pursue to completion, the satisfaction of those conditions set forth in
Section 3.3 that could not be fulfilled or satisfied as of Closing Date due to the
inability of the Project to achieve Interconnection, including the delivery of a
certificate of the Independent Engineer demonstrating satisfaction of such
conditions. Nothing in Section 3.3.4(b) nor this Section 9.5.3 or otherwise shall
relieve Seller of its obligation to timely demonstrate full compliance with the
conditions set forth in Section 3.3 that were not (without application of Section
3.3.4(b)) fulfilled or satisfied as of the Closing Date once the Project has achieved
Interconnection, and Seller shall retain all Liabilities hereunder and under the
EPC Contract and Turbine Supply Agreement with respect to such obligation,
except to the extent that actions taken by Buyer or the Company after the Closing
prevent Seller from satisfying such obligation.
(b)
Notwithstanding any provision herein to the contrary, following
the Closing, Seller shall retain all Liabilities of the Company in respect of the
EPC Agreement and Turbine Supply Agreement (except to the limited extent such
Liabilities are included in the Assumed Liabilities) and, Seller shall promptly
remediate any WTG site on which construction was commenced (whether
grading, excavation, pouring a foundation, erection or otherwise) on a WTG that
was not brought to WTG Substantial Completion and such site shall be returned
to the condition in which it existed prior to commencement of construction to the
extent required and in accordance with the terms of the applicable Land Contracts
and applicable Law. Buyer shall cause, at no cost to the Company or Buyer, the
Company to comply with all commercially reasonable requests from Seller in
connection with Seller’s obligations and rights under this Section 9.5.3; provided,
however, that in no event shall the Company be required to consent to any
modification, amendment or supplement of the EPC Agreement or the Turbine
Supply Agreement, the Turbine Warranty and O&M Agreement or waive or
consent to the variance of any of the terms thereof, or issue any consent
thereunder.
(c)
In the event that Final Completion has not occurred within ninety
(90) days following the Guaranteed Completion Date, Buyer may, without
limiting any other rights or remedies, cause Final Completion to occur (including
the completion of any Punch List Items or Curative Work) with respect to any
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portion of the Project previously delivered to Buyer at a Closing and for which
Final Completion has not occurred, at Seller’s expense.
ARTICLE 10.
DELAY DAMAGES AND SECURITY
10.1.
Delay Damages. [BEGIN TRADE SECRET
END TRADE
SECRET]
10.2. Payment of Delay Damages. On the first Business Day of each week following
the Target Closing Date until the Closing Date, Seller shall pay Buyer all accrued and unpaid
Delay Damages by (a) wire transfer of immediately available funds to the account specified in
writing by Buyer for such purpose, (b) if so requested in writing by Buyer, by such alternative
means of delivery of immediately available funds or other method of payment as is reasonably
acceptable to Seller or (c) by drawing against the Deposit Refund Letter of Credit.
10.3. Nature of Liquidated Damages. The Parties acknowledge and agree that because
of the unique nature of the Project and the unavailability of adequate substitutes, it is difficult or
impossible to determine with precision the amount of damages that would or might be incurred
by Buyer as a result of Seller’s failure to achieve Closing by the Target Closing Date or the
Guaranteed Closing Date. It is understood and agreed by the Parties that (a) Buyer shall be
disadvantaged by failure of Seller to meet such obligations, (b) it would be impracticable or
extremely difficult to quantify the amount of time lost to Buyer’s disadvantage resulting
therefrom, (c) any sums which would be payable under Section 10.2 or Section 11.1.3 are in the
nature of liquidated damages, are fair and reasonable and do not constitute penalties, and (d)
such payments represent a reasonable estimate of damages, and shall, without duplication, be the
sole and exclusive remedy of Buyer with respect to any such failure by Seller.
10.4.
Security for Liquidated Damages; Refund of Deposit.
10.4.1 Delay Damages and Termination Payment Guaranty. To secure payment
of its obligation to pay Delay Damages and the Termination Payment, Seller shall deliver
the Guaranty to Buyer on the Effective Date.
10.4.2 Deposit Refund Letter of Credit. [BEGIN TRADE SECRET
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ARTICLE 11.
EXTENSION AND TERMINATION
11.1.
Termination; Extension.
11.1.1 Termination by Buyer. This Agreement may be terminated prior to the
Closing by Buyer upon written notice to Seller of such termination (or, in the case of a
termination under clause (b) below, upon the lapse of the period for Seller to give a
notice under clause (b)(vi)) as follows:
(a)
If the Parties have not agreed upon a plan for the development and
construction of the Project that the Parties believe will result in the Project
satisfying the Under Construction requirement prior to the PTC Expiration Date
(as the same may be amended pursuant to Section 8.7, the “Under Construction
Plan”) (to be attached to this Agreement as Exhibit K when agreed upon by the
Parties), and the form of Under Construction Certificates to be attached as
Exhibits J-1 and J-2 hereto, [BEGIN TRADE SECRET
END TRADE
SECRET]
provided further that:
(iv)
any notice of termination under clause (b)(i), (ii) or (iii)
above shall be given, if at all, on or before ten (10) Business Days after
Buyer’s receipt of the Optional Interconnection Study (for a termination
under clause (b)(i)), the DPPS (for a termination under clause (b)(ii)), or
the final form of the Interconnection Agreement (for a termination under
clause (b)(iii)), and if the termination notice is not given by the applicable
date Buyer shall be deemed to have irrevocably waived its right to
terminate this Agreement under clause (b)(i), (ii) or (iii), as applicable;
(v)
[BEGIN TRADE SECRET
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END TRADE SECRET]
(vi)
if Buyer gives a termination notice under clause (b)(i), (ii)
or (iii) above, Seller shall have the right, but not the obligation, to notify
Buyer, within ten (10) Business Days after receipt of Buyer’s termination
notice, that [BEGIN TRADE SECRET
END TRADE
SECRET] if Seller gives such notice Buyer’s termination notice shall be
deemed withdrawn, Buyer’s right to terminate this Agreement under
clause (b)(i), (ii) or (iii), as applicable, shall be deemed irrevocably waived
and this Agreement shall not terminate;
(c)
SECRET
if the Effective Date has not occurred by [BEGIN TRADE
END TRADE SECRET]
(d)
in the event the Closing has not occurred, or the conditions
precedent to Closing in favor of Buyer have not been fulfilled or waived, on or
before the Guaranteed Completion Date effective immediately upon receipt of
notice to Seller, which notice may be served at Buyer’s election, in its sole
discretion and without further explanation; provided, however, that Buyer may not
terminate this Agreement pursuant to this Section 11.1.1(d) if Buyer’s failure to
fulfill any material obligation under this Agreement has been the cause of, or
resulted in, the failure of the occurrence of the Closing or failure of any such
conditions precedent to be fulfilled on or prior to the Guaranteed Completion
Date; or
(e)
if any Authority shall have issued an order, decree or ruling or
taken any other action restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and nonappealable; or
(f)
if Seller has abandoned the Project; or
(g)
as provided in Section 5.12 or 5.13; or
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(h)
[BEGIN TRADE SECRET
END TRADE SECRET]
(i)
upon the dissolution or bankruptcy of Seller;
(j)
[BEGIN TRADE SECRET
END
TRADE SECRET] or
(k)
[BEGIN TRADE SECRET
END TRADE SECRET]
11.1.2 Termination by Seller. This Agreement may be terminated prior to the
Closing by Seller upon written notice to Buyer of such termination as follows:
(a)
[BEGIN TRADE SECRET
END
TRADE SECRET]
(b)
SECRET
if the Effective Date has not occurred by [BEGIN TRADE
END TRADE SECRET]
(c)
if Interconnection has not occurred by [BEGIN TRADE
SECRET
END
TRADE SECRET] or
(d)
in the event the Closing has not occurred, or the conditions
precedent to Closing in favor of Seller have not been fulfilled or waived, on or
before the Guaranteed Completion Date effective immediately upon receipt of
notice to Buyer, which notice may be served at Seller’s election, in its sole
discretion and without further explanation; provided, however, that Seller may not
terminate this Agreement pursuant to this Section 11.1.2(d) if Seller’s failure to
fulfill any material obligation under this Agreement has been the cause of, or
resulted in, the failure of the occurrence of the Closing or failure of any such
conditions precedent to be fulfilled on or prior to the Guaranteed Completion
Date; or
(e)
upon a repudiation of this Agreement by Buyer; or
(f)
as provided in Section 5.13; or
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(g)
[BEGIN TRADE SECRET
END TRADE SECRET]
(h)
upon the dissolution or bankruptcy of Buyer; or
(i)
[BEGIN TRADE SECRET
END TRADE SECRET]
11.1.3 Termination Damages.
(a)
In the event of termination of this Agreement by Buyer as provided
in Section 11.1, Seller shall refund the Deposit (if it has been paid by Buyer) to
Buyer, within five (5) Business Days after such termination of this Agreement by
wire transfer of immediately available funds to the account specified in writing by
Buyer for such purpose or, if so requested in writing by Buyer, by such alternative
means of delivery of immediately available funds or other method of payment as
is reasonably acceptable to Seller.
(b)
[BEGIN TRADE SECRET
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END TRADE SECRET]
11.2. Buyer’s Option to Purchase Project in Certain Circumstances After Guaranteed
Completion Date. If (a) the Effective Date occurs but Closing does not occur by the Guaranteed
Completion Date due to the non-satisfaction of any of the conditions set forth in Section 3.3
(other than Section 3.3.6) and this Agreement is thereafter terminated in accordance with Section
11.1; (b) Seller subsequently, within two (2) years following the date of such termination (the
“Option Period”), achieves Project Substantial Completion for the Project in excess of [BEGIN
TRADE SECRET
END TRADE SECRET] on the Site; and (c) the failure to meet
the conditions set forth in Section 3.3 is not a result of any failure to perform hereunder by
Buyer, then, Buyer shall, at any time during the Option Period, have the option to purchase the
Purchased Interests on the same terms and conditions set forth in this Agreement, [BEGIN
TRADE SECRET
END TRADE
SECRET] except that (i) references herein to the Closing Date shall, upon and following the
exercise of such option, be deemed to refer to the date of such exercise, and (ii) Seller shall be
permitted to update Seller’s Schedules to ensure that the representations and warranties are true
and correct as of the date of exercise. Such option shall be exercisable upon written notice
delivered to Buyer at any time prior to the expiration of the Option Period. If the Effective Date
occurs, this provision shall expressly survive any termination of this Agreement. The rights of
Buyer under this Section 11.2 shall be subject and subordinate to the rights of the lenders for the
financing described in Section 4.1.1 and Buyer shall execute such subordinations and other
documents as may be requested by such lenders.
ARTICLE 12.
MISCELLANEOUS
12.1. Payment Instructions. All amounts payable under this Agreement shall be made
pursuant to the payment instructions provided by the payee of such amount to the payor thereof
in writing on or before the date on which such payment is due.
12.2. Assignment. Seller may not assign any of its rights or obligations under this
Agreement without the prior written consent of Buyer; provided, however, that no such consent
shall be required with respect to the assignment by Seller to any Affiliate of Seller, or the
assignment or collateral assignment of this Agreement by Seller to, or for the benefit of, a lender
under the financing in respect of the development or construction of the Project. In connection
with any such assignment to a lender, Buyer shall execute and deliver consent forms,
acknowledgements and other documents reasonably requested by the financing party, in form
and substance reasonably acceptable to Buyer to effect or to evidence such assignment, provided,
that nothing in this Section 12.2 shall require Buyer to waive any of its rights under, or amend
any provision of, this Agreement. Buyer may not assign any of its rights or obligations under
this Agreement; provided, however, that upon prior notice to Seller, Buyer may assign its rights
or obligations under this Agreement to any Affiliate of Buyer; provided further, that Buyer shall
not be released of its obligations under this Agreement unless Seller agrees in writing that such
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Affiliate has the financial and other capabilities to assume all of the obligations of Buyer under
this Agreement.
12.3. Notices. All notices, requests, demands and other communications which are
required or may be given under this Agreement, including all documents delivered pursuant to
this Agreement, shall be in writing and shall be deemed to have been duly given when received if
personally delivered; the day after it is sent, if sent for next day delivery to a domestic address by
recognized overnight delivery service (e.g., Federal Express or UPS); and upon receipt, if sent by
certified or registered mail, return receipt requested. In each case notice shall be sent to:
If to Seller, to:
RES America Developments Inc.
11101 West 120th Avenue, Suite 400
Broomfield, Colorado 80021
Attention: Brian Evans, President
Facsimile: 303-439-4299
With a copy to:
RES America Developments Inc.
11101 West 120th Avenue, Suite 400
Broomfield, Colorado 80021
Attention: Marcia Emmons, General Counsel
Facsimile: 303-439-4299
If to Buyer, to:
Northern States Power Company
414 Nicollet mall, 7th Floor
Minneapolis, MN 55401-1927
Attention: Paras M. Shah, Director
Business Development
Facsimile: (612) 215-4575
with a copy to:
Northern States Power Company
414 Nicollet Mall
Minneapolis, MN 55401-1927
Attention: Scott Wilensky,
Sr. Vice President and General Counsel
Facsimile: (612) 215-9025
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with a copy to (which copy shall not constitute notice hereunder):
Dorsey & Whitney LLP
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402-1498
Attention: Michael Pignato
Facsimile: (612) 340-2643
E-mail: pignato.michael@dorsey.com
or to such other place and with such other copies as a Party may designate as to itself by written
notice to the other Party.
12.4.
Choice of Law; Consent to Jurisdiction; Service of Process.
12.4.1 Governing Law. This Agreement shall be construed, interpreted and the
rights of the Parties determined in accordance with the Laws of the State of New York
without reference to its choice of law provisions; provided, however, the laws of the State
of North Dakota shall control this Agreement with respect to matters of conveyance and
other real property and permitting matters necessarily subject to the laws of the State of
North Dakota.
12.4.2 Executive Dispute Resolution. Upon a Party’s written notification to the
other Party of a dispute, which notification must include a written explanation of the
dispute and the material particulars of the notifying Party’s position as to the dispute,
each Party shall nominate one (1) executive representative with the authority to bind such
Party. The nominated representatives shall meet not later than ten (10) Business Days
thereafter to attempt in good faith to resolve the dispute and to produce written terms of
settlement for the dispute (a “Settlement Agreement”). A Settlement Agreement
executed by each executive representative shall serve as conclusive evidence of the
resolution of such dispute. If the executive representatives do not produce and execute
the Settlement Agreement within forty-five (45) days after the date of the first meeting or
within a longer period agreed to by each executive representative, then, either Party may
upon written notice to the other Party, pursue all its rights and remedies provided at law
or equity or otherwise in this Agreement.
12.4.3 Jurisdiction. The Parties hereto hereby irrevocably submit to the
jurisdiction of the federal or state courts located in Hennepin County, Minnesota, over
any dispute arising out of or relating to this Agreement or any of the transactions
contemplated hereby; and each Party hereby irrevocably agrees that all claims in respect
of such dispute or proceeding shall be heard and determined in such federal courts unless
such federal courts do not have jurisdiction in which event such dispute or proceeding
shall be heard and determined in such state courts. Each Party hereby irrevocably
waives, to the fullest extent permitted by applicable Law, any objection which it may
now or hereafter have to the laying of venue of any such dispute brought in such court or
any defense of inconvenient forum.
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12.4.4 Service of Process. Each of the Parties hereto hereby consents to process
being served by the other Party to this Agreement in any suit, action or proceeding of the
nature specified in Section 12.4.3 by mailing of a copy thereof in accordance with the
provisions of Section 12.3 hereof.
12.5. Waiver Of Jury Trial. EACH OF THE PARTIES HERETO WAIVES ANY
RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED ON,
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT
OR ACTION OF ANY PARTY HERETO IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY.
12.6. Attorneys’ Fees and Litigation Expenses. In the event any action is commenced
to recover damages or enforce any rights or obligations under this Agreement, and the Party
bringing such action is found by a court of law to have brought such action in bad faith, then the
prevailing Party in such action shall be entitled to recover its attorney fees, including the
reasonable fees of in-house counsel, expert fees, and all reasonable out-of-pocket expenses
incurred in enforcing the prevailing Party’s rights under this Agreement, regardless of whether
those fees, costs or expenses are otherwise recoverable as costs in the action, including all fees
and expenses incurred in connection with the investigation and preparation of the action before it
is filed and upon appeal.
12.7. Entire Agreement; Amendments and Waivers. This Agreement contains the
entire understanding of the Parties with respect to the subject matter hereof and supersedes all
prior agreements and commitments with respect thereto. No supplement, modification or waiver
of this Agreement or waiver of any breach of or failure to comply with any representation,
warranty, covenant, agreement or condition herein shall be binding unless executed in writing by
the Party to be bound thereby. No waiver of any of the provisions of this Agreement or waiver
of any breach of or failure to comply with any representation, warranty, covenant, agreement or
condition herein shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar) or any other breach of or failure to comply with any representation,
warranty, covenant, agreement or condition herein, nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
12.8. Multiple Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
12.9. Expenses. Except as otherwise specified herein, each Party hereto shall pay its
own legal, accounting, out-of-pocket and other expenses incident to this Agreement and to any
action taken by such Party in preparation for carrying this Agreement into effect.
12.10. Invalidity. In the event that any one or more of the provisions contained in this
Agreement or in any other instrument referred to herein (other than a requirement to make
payments hereunder), shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by Law, such invalidity, illegality or
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unenforceability shall not affect any other provision of this Agreement or any other such
instrument.
12.11. Titles. The recitals to this Agreement and the titles, captions or headings of the
Articles and Sections herein are inserted for convenience of reference only and are not intended
to be a part of or to affect the meaning or interpretation of this Agreement.
12.12. Burden and Benefit. This Agreement shall be binding upon and shall inure to the
benefit of the Parties hereto and their respective successors and permitted assigns. Buyer
Indemnified Parties and Seller Indemnified Parties shall be third party beneficiaries of this
Agreement and shall be entitled to indemnification, with full rights of enforcement as though
each such Person were a signatory to this Agreement. Except as provided in this Section 12.12,
there shall be no third-party beneficiaries of this Agreement.
12.13. Cumulative Remedies. All rights and remedies of either Party hereto are
cumulative of each other and of every other right or remedy such Party may otherwise have at
law or in equity, and the exercise of one or more rights or remedies shall not prejudice or impair
the concurrent or subsequent exercise of other rights or remedies.
12.14. No Partnership or Joint Venture. The Parties hereto do not intend to create a
partnership or joint venture by virtue of this Agreement. No Party shall owe any fiduciary duty
to any other Party by virtue of this Agreement or any other Seller Document or Buyer Document
or otherwise.
12.15. No Merger. This Agreement is a fully integrated complete agreement and is not
merged with or extinguished by any other agreement.
12.16. Non-Interference. [BEGIN TRADE SECRET
END TRADE SECRET]
[SIGNATURE PAGE FOLLOWS]
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SIGNING DATE
DISCLOSURE SCHEDULES
To
PURCHASE AND SALE AGREEMENT
(BORDER WINDS)
between
NORTHERN STATES POWER COMPANY
as Buyer
and
RES AMERICA DEVELOPMENTS INC.
as Seller
Dated as of July 31, 2013
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Attachment A – Page 105 of 147
SIGNING DATE
DISCLOSURE SCHEDULES
These Disclosure Schedules are being delivered as of the Signing Date pursuant to the
Purchase and Sale Agreement (Border Winds) between Northern Power State Company, a
Minnesota corporation, as Buyer, and RES America Developments Inc., a Delaware corporation,
as Seller, dated as of July 31, 2013 (the “Agreement”). The representations and warranties of
Seller in Article 6 of the Agreement, and the other conditions of closing set forth in the
Agreement are made and given subject to the disclosures in these Disclosure Schedules.
Capitalized terms used but not otherwise defined in these Disclosure Schedules shall have the
respective meaning given to them in the Agreement.
Any fact or item set forth in these Disclosure Schedules that is required to be so set forth
pursuant to a particular Section of the Agreement shall be deemed to have been disclosed with
respect to every other Section of the Agreement if such disclosure would be reasonably apparent
as disclosure relevant to such other Sections.
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Schedule 1.1(a)
Buyer’s Knowledge
[BEGIN TRADE SECRET
END TRADE SECRET]
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Schedule 1.1(b)
NSP Drawing Standards
[BEGIN TRADE SECRET
END TRADE SECRET]
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Attachment A – Page 108 of 147
Schedule 1.1(c)
Electrical Works
All facilities and equipment described in Part 3 (Electrical System and Transmission line
Technical Specifications), Part 6 (Collector Substation Technical Specifications) and Part 8
(Technical Specifications Wind Generator Step-up Transformer) of Exhibit I to the Agreement.
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Schedule 1.1(d)
O&M Facility Real Property
[BEGIN TRADE SECRET
END TRADE SECRET]
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Schedule 1.1(e)
Seller’s Knowledge
[BEGIN TRADE SECRET
END TRADE SECRET]
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Schedule 1.1(f)
[BEGIN TRADE SECRET
END TRADE SECRET]
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Attachment A – Page 112 of 147
Schedule 2.5.5
Allocation Categories
Wind plant
•
•
•
•
•
•
Structures and improvements
„
O&M building (excluding land)
„
Permanent meteorological tower(s) (excluding land), i.e., the building,
fencing, grading driveways, drainage and sewerage systems, permits, etc
Wind Turbine Generators, including rotors, blades, nacelles, towers and
foundations
Electrical systems, including SCADA, but excluding plant substation
Land rights costs associated with Wind Turbine Generator easements
Fee land costs
Land leases
Plant substation
•
•
Structures
Equipment
Transmission
•
•
•
•
Poles, lines and fixtures
Conductors
Network upgrades
Interconnection costs
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Schedule 6.4
Seller Consents and Approvals
1.
Approvals and filings described in Section 5.14 of the Agreement.
2.
Approvals and filings described in Section 5.8 of the Agreement.
3.
Amendment to Site Compatibility Certificate issued by the North Dakota Public Utilities
Commission (PU-08-797) and associated compliance documentation.
4.
Updated Rolette County Board of Commissioners Building Permit 12 and Conditional
Use Permit.
5.
FAA Determinations of No Hazard to Air Navigation to reflect additional alternate
turbine locations.
6.
All Permits not listed on Part F of Schedule 6.13 (or amendments or modifications
thereto), necessary to comply with Sections 3.2.1 and 3.3.3, in each case, subject to
Section 5.6 of the Agreement.
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Schedule 6.6
Seller Litigation
None.
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Schedule 6.7
Compliance with Laws
None.
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Schedule 6.8
Environmental Matters
1. Seller has provided a copy of a Phase I Environmental Site Assessment dated November 23,
2011, prepared by Westwood Professional Services for Border Winds I, LLC c/o Sequoia
Energy U.S. Inc. (the “2011 Phase I”), which 2011 Phase I was not provided sufficiently in
advance of the Signing Date to allow Buyer to complete a review thereof. The Parties
acknowledge the existence of the 2011 Phase I and the possibility that the 2011 Phase I
contains information that would require Seller to make a disclosure in this Schedule 6.8 to
qualify the statements made by Seller in Section 6.8. Seller acknowledges that the foregoing
disclosure of items contained in the 2011 Phase I shall not be deemed to mean that disclosure
of such items on this Schedule 6.8 as of the Effective Date is acceptable to Buyer unless and
until such disclosure is actually accepted by Buyer, in its sole discretion.
2. A new Phase I Environmental Site Assessment will be conducted and provided prior to the
Effective Date.
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Schedule 6.11
Land Contracts
Part E – Zoning and Land Use Approvals
1.
Amendment to Site Compatibility Certificate issued by the North Dakota Public Utilities
Commission (PU-08-797) and associated compliance documentation.
2.
Updated Rolette County Board of Commissioners Building Permit 12 and Conditional
Use Permit.
3.
FAA Determinations of No Hazard to Air Navigation to reflect additional alternate
turbine locations.
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Attachment A – Page 118 of 147
Schedule 6.13
Permits
Part F – Signing Date Permits
Permit
Site Compatibility Certificate from the Public Service Commission of
the State of North Dakota (PU-08-797)
(Granted)
Rolette County Building Permit No. 12 and Conditional Use Permit
(Granted)
Federal Aviation Administration (FAA) Determinations of No Hazard
to Air Navigation for the following Aeronautical Study Numbers:
2013-WTE-3631-OE, 2013-WTE-3632-OE, 2013-WTE-3633-OE,
2013-WTE-3634-OE, 2013-WTE-3635-OE, 2013-WTE-3636-OE,
2013-WTE-3637-OE, 2013-WTE-3638-OE, 2013-WTE-3639-OE,
2013-WTE-3640-OE, 2013-WTE-3641-OE, 2013-WTE-3642-OE,
2013-WTE-3643-OE, 2013-WTE-3644-OE, 2013-WTE-3645-OE,
2013-WTE-3646-OE, 2013-WTE-3647-OE, 2013-WTE-3648-OE,
2013-WTE-3649-OE, 2013-WTE-3650-OE, 2013-WTE-3651-OE,
2013-WTE-3652-OE, 2013-WTE-3653-OE, 2013-WTE-3654-OE,
2013-WTE-3655-OE, 2013-WTE-3656-OE, 2013-WTE-3657-OE,
2013-WTE-3658-OE, 2013-WTE-3659-OE, 2013-WTE-3660-OE,
2013-WTE-3661-OE, 2013-WTE-3662-OE, 2013-WTE-3663-OE,
2013-WTE-3664-OE, 2013-WTE-3665-OE, 2013-WTE-3666-OE,
2013-WTE-3667-OE, 2013-WTE-3668-OE, 2013-WTE-3669-OE,
2013-WTE-3670-OE, 2013-WTE-3671-OE, 2013-WTE-3672-OE,
2013-WTE-3673-OE, 2013-WTE-3674-OE. 2013-WTE-3675-OE,
2013-WTE-3676-OE. 2013-WTE-3677-OE, 2013-WTE-3678-OE,
2013-WTE-3679-OE, 2013-WTE-3680-OE, 2013-WTE-3681-OE,
2013-WTE-3682-OE, 2013-WTE-3683-OE, 2013-WTE-3684-OE,
2013-WTE-3688-OE, 2013-WTE-3689-OE, 2013-WTE-3690-OE,
2013-WTE-3691-OE, 2013-WTE-3692-OE, 2013-WTE-3693-OE,
2013-WTE-3694-OE, 2013-WTE-3695-OE, 2013-WTE-3696-OE,
2013-WTE-3697-OE, 2013-WTE-3698-OE, 2013-WTE-3701-OE,
2013-WTE-3702-OE, 2013-WTE-3703-OE, 2013-WTE-3704-OE,
2013-WTE-3705-OE, 2013-WTE-3706-OE, 2013-WTE-3707-OE,
2013-WTE-3708-OE, 2013-WTE-3709-OE, 2013-WTE-3710-OE
Issue Date or
Expected Issue Date,
if Known
Issued May 5, 2011
Issued January 4, 2011
Issued July 22, 2013
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Attachment A – Page 119 of 147
North Dakota State Historic Preservation Office (ND SHPO Ref: 081046 Border Winds Wind Energy Project; Proposed Turbine Visual
Effect on the Coghlan Castle Site [32RO51] Rolette, County, ND)
(Granted)
North Dakota State Historic Preservation Office (ND SHPO Ref: 081406 Border Winds Wind Energy Project; Unanticipated Discovery
Plan)
(Granted)
ND State Historical Society (SHPO) - Cultural Resources Concurrence
Issued January 3, 2011
Issued December 1,
2010
Obtained July 14, 2008
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Attachment A – Page 120 of 147
Schedule 6.17
Wind Data
Item
Resource assessment data collected from the
meteorological tower located at site #1509.
Resource assessment data collected from the
meteorological tower located at site #1510.
Resource assessment data collected from the
SODAR equipment at location #1.
Resource assessment data collected from the
SODAR equipment at location #2.
Description of Item
Resource assessment data collected from May
11, 2006 – Effective Date
Resource assessment data collected from May
12, 2006 – Effective Date
Resource assessment data collected from July
10, 2008 - September 17, 2008
Resource assessment data collected from
September 17, 2008 - November 5, 2008
All data related to the information described above stored and delivered to Buyer in .dat, .xlsx,
.pdf, or .doc file types.
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Schedule 7.4
Buyer Consents and Approvals
1.
All approvals contained in Section 5.l3, 5.14.1, and 5.14.2 of the Agreement; and
2.
The NSP Corporate Approval.
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Schedule 7.5
Buyer Litigation
None.
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Schedule 8.12
Alternate WTG Locations
[BEGIN TRADE SECRET
END TRADE SECRET]
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Northern States Power Company
Please Note
This Page in Exhibit A
to the Purchase and Sale Agreement
has been redacted in its entirety
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Exhibit B
to Purchase and Sale Agreement (Border Winds)
GUARANTEE OF RENEWABLE ENERGY SYSTEMS HOLDINGS LIMITED
[BEGIN TRADE SECRET
END TRADE SECRET] in favor of
Northern States Power Company, a corporation organized and existing under the Laws of the
State of Minnesota (“Company”).
WHEREAS, pursuant to Section 3.2.13 of that certain Purchase and Sale Agreement,
dated as of July 31, 2013 (as the same may be amended, modified or supplemented from time to
time, the “Agreement”), by and between Company and RES America Developments Inc., a
Delaware corporation (“Subsidiary”), Company’s obligation to sign the Effective Date
Certificate is conditioned, inter alia, upon Guarantor’s execution and delivery of this Guarantee
to Company simultaneously with the execution and delivery of the Agreement; and
WHEREAS, Guarantor is the indirect parent of Subsidiary and will indirectly benefit
from the terms and conditions thereof, and the performance by Subsidiary of its obligations
thereunder.
NOW, THEREFORE, in consideration of the foregoing and for $1 and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Guarantor
hereby covenants and agrees with Company as follows:
Section 1.
Definitions. Capitalized terms used herein and not otherwise defined
shall have their respective meanings as set forth in the Agreement.
Section 2.
Guarantee.
(a)
Guarantee. Guarantor hereby irrevocably and unconditionally guarantees to and
for the benefit of Company, the full and prompt performance and payment by Subsidiary of each
and every obligation of Subsidiary arising under the Agreement up to the limitations set forth in
the Agreement, including, without limitation, the payment when due of all indemnities, refunds
and liquidated damages payable at any time under the Agreement (the “Guaranteed
Obligations”). The Guaranteed Obligations shall further include, without limitation, (i) interest
accruing as part of the Guaranteed Obligations according to the terms thereof following the
commencement by or against the Subsidiary of any case or proceeding under any applicable Law
relating to bankruptcy, insolvency, reorganization, winding-up, liquidation, dissolution or
composition or adjustment of debt and (ii) all reasonable costs and expenses (including
reasonable attorneys’ fees), if any, incurred in successfully enforcing Company’s rights under
this Guarantee. [BEGIN TRADE SECRET
END TRADE SECRET] Guarantor further agrees
that if Subsidiary shall fail to pay or perform in full when due all or any part of the Guaranteed
Obligations, Guarantor will pay or perform (or procure the payment or performance of) the same
in accordance with, and up to the limitations set forth in the Agreement. This Guarantee is
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Exhibit B
to Purchase and Sale Agreement (Border Winds)
irrevocable and unconditional in nature and is made with respect to any Guaranteed Obligations
now existing or hereafter arising and shall remain in full force and effect until the earlier of (I)
the time when in accordance with the terms of the Agreement all of the Guaranteed Obligations
are fully satisfied and discharged, and (II) except in respect of (A) claims hereunder notified
prior to such date and (B) claims and Liabilities arising pursuant to Section 2.2.3 of the
Agreement, the third anniversary of the Closing.
(b)
Nature of Guarantee. This Guarantee is a continuing guaranty by Guarantor of
the Guaranteed Obligations. The Guarantee and the obligations of Guarantor hereunder shall
continue to be effective or be automatically reinstated, as the case may be, even if at any time
payment of any of the Guaranteed Obligations is rendered unenforceable or is rescinded or must
otherwise be returned by Company upon the occurrence of any action or event including, without
limitation, the bankruptcy, reorganization, winding-up, liquidation, dissolution or insolvency of
the Subsidiary, Guarantor, any other Person or otherwise, all as though the payment had not been
made.
(c)
Absolute Guarantee. Guarantor agrees that its obligations under this Guarantee
are irrevocable, absolute, independent and unconditional and shall not be affected by any
circumstance that constitutes a legal or equitable discharge of a guarantor or surety other than
payment and performance in full of the Guaranteed Obligations. In furtherance of the foregoing
and without limiting the generality thereof, Guarantor agrees, subject to the other terms and
conditions hereof, as follows:
(i)
not of collectibility;
this Guarantee is a guarantee of payment and performance when due and
(ii)
Company may from time to time in accordance with the terms of the
Agreement, without notice or demand and without affecting the validity or enforceability of this
Guarantee or giving rise to any limitation, impairment or discharge of Guarantor’s liability
hereunder, (A) renew, extend, accelerate or otherwise change the time, place, manner or terms of
payment or performance of the Guaranteed Obligations, (B) settle, compromise, release or
discharge, or accept or refuse any offer of performance with respect to, or substitutions for, the
Guaranteed Obligations or any agreement relating thereto and/or subordinate the payment or
performance of the same to the payment or performance of any other obligations, (C) request and
accept other guaranties of or security for the Guaranteed Obligations and take and hold security
for the payment or performance of this Guarantee or the Guaranteed Obligations, (D) release,
exchange, compromise, subordinate or modify, with or without consideration, any security for
payment or performance of the Guaranteed Obligations, any other guarantees of the Guaranteed
Obligations, or any other obligation of any person with respect to the Guaranteed Obligations,
(E) enforce and apply any security now or hereafter held by or for the benefit of Company in
respect of this Guarantee or the Guaranteed Obligations and direct the order or manner of sale
thereof, or exercise any other right or remedy that Company may have against any such security,
as Company in its discretion may determine consistent with the Agreement and any applicable
security agreement, and even though such action operates to impair or extinguish any right of
reimbursement or subrogation or any other right or remedy of Guarantor against Subsidiary or
any other guarantor of the Guaranteed Obligations or any other guarantee of or security for the
2
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 127 of 147
Exhibit B
to Purchase and Sale Agreement (Border Winds)
Guaranteed Obligations, and (F) exercise any other rights available to Company under the
Agreement, at law or in equity; and
(iii) this Guarantee and the obligations of Guarantor hereunder shall be valid
and enforceable and shall not be subject to any limitation, impairment or discharge for any
reason (other than payment or performance in full of the Guaranteed Obligations and otherwise
as set forth in this Guarantee), including, without limitation, the occurrence of any of the
following, whether or not Guarantor shall have had notice or knowledge of any of them: (A) any
failure to assert or enforce, or agreement not to assert or enforce, or the stay or enjoining, by
order of court, by operation of law or otherwise, of the exercise or enforcement of, any claim or
demand or any right, power or remedy with respect to the Guaranteed Obligations or any
agreement relating thereto, or with respect to any other guarantee of or security for the payment
or performance of the Guaranteed Obligations; (B) any waiver, amendment or modification of,
or any consent to departure from, any of the terms or provisions of the Agreement or any
agreement or instrument executed pursuant thereto or of any other guarantee or security for the
Guaranteed Obligations; (C) the Guaranteed Obligations, or any agreement relating thereto, at
any time being found to be illegal, invalid or unenforceable in any respect; (D) the personal or
corporate incapacity of any person; (E) any change in the financial condition, or the bankruptcy,
administration, receivership or insolvency of Subsidiary or any other person, or any rejection,
release, stay or discharge of Subsidiary’s or any other person’s obligations in connection with
any bankruptcy, administration, receivership or similar proceeding or otherwise or any
disallowance of all or any portion of any claim by Company, its successors or permitted assigns
in connection with any such proceeding; (F) any change in the corporate existence of, or
cessation of existence of, Guarantor or the Subsidiary (whether by way of merger, amalgamation,
transfer, sale, lease or otherwise); (G) the failure to create, preserve, validate, perfect or protect
any security interest granted to, or in favor of, any person; (H) any substitution, modification,
exchange, release, settlement or compromise of any security or collateral for or guaranty of any
of the Guaranteed Obligations or failure to apply such security or collateral or failure to enforce
such guaranty; (I) the existence of any claim, set-off, or other rights which Guarantor or any
affiliate thereof may have at any time against Company or any affiliate thereof in connection
with any matter unrelated to the Agreement; and (J) any other act or thing or omission, or delay
to do any other act or thing, which may or might in any manner or to any extent vary the risk of
Guarantor as an obligor in respect of the Guaranteed Obligations.
(d)
Currency. All payments made by Guarantor hereunder shall be made in U.S.
dollars in immediately available funds. Notwithstanding Guarantor’s obligation to make all
payment in U.S. dollars, if any payment is made in another currency then, to the extent that the
amount received, when converted falls short of the amount due under this Guarantee, Guarantor
shall remain liable to Company in respect of the shortfall in accordance with the terms hereof.
(e)
Defenses.
Notwithstanding anything herein to the contrary, Guarantor
specifically reserves to itself all rights, counterclaims and other defenses that the Subsidiary is or
may be entitled to arising from or out of the Agreement, except for any defenses arising out of
the bankruptcy, insolvency, dissolution or liquidation of the Subsidiary, the lack of power or
authority of the Subsidiary to enter into the Agreement and to perform its obligations thereunder,
3
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 128 of 147
Exhibit B
to Purchase and Sale Agreement (Border Winds)
or the lack of validity or enforceability of the Subsidiary’s obligations under the Agreement or
any transaction thereunder.
Section 3.
Other Provisions of the Guarantee.
(a)
Waivers by Guarantor. Guarantor hereby waives for the benefit of Company, to
the maximum extent permitted by applicable Law:
(i)
any right to require Company, as a condition of payment or performance
by Guarantor, to (A) proceed against or exhaust its remedies against Subsidiary or any person,
including any other guarantor of the Guaranteed Obligations, or (B) proceed against or exhaust
any security held from any person other than the Subsidiary, including any other guarantor of the
Guaranteed Obligations;
(ii)
subject to Clause 2(e), any defense arising by reason of the incapacity,
lack of authority or any disability of Subsidiary including, without limitation, any defense based
on or arising out of the lack of validity or the unenforceability of the Guaranteed Obligations or
any agreement or instrument relating thereto or by reason of the cessation of the liability of
Subsidiary from any cause other than payment or performance in full of the Guaranteed
Obligations or termination of this Guarantee in accordance with its terms;
(iii) any requirement that Company protect, secure, perfect or insure any
security interest or lien or any property subject thereto;
(iv)
notices of default under the Agreement, notices of any renewal, extension
or modification of the Guaranteed Obligations or any agreement related thereto, and any right to
consent to any thereof; and
(v)
except with respect to the limitations on the Guarantee term provided in
Section 2(a)(II)(A) hereof, defenses under this Guarantee for lack of promptness or diligence, or
for failure of or delays in presentment, demand for payment, protest, or any notice including
without limitation notice of dishonor, notice of acceptance, notice of intent to accelerate, notice
of acceleration and notice of the incurring of the Obligations created under or pursuant to the
Agreement .
(b)
Deferral of Subrogation. Until such time as the Guaranteed Obligations have
been paid or performed in full, notwithstanding any payment made by Guarantor hereunder or
the receipt of any amounts by Company with respect to the Guaranteed Obligations, (i)
Guarantor (on behalf of itself, its successors and assigns, including any surety) hereby expressly
agrees not to exercise any right, nor assert the impairment of such rights, it may have to be
subrogated to any of the rights of Company against Subsidiary or against any other collateral
security held by Company for the payment or performance of the Guaranteed Obligations, (ii)
Guarantor agrees that it will not seek any reimbursement from Company in respect of payments
or performance made by Guarantor in connection with the Guaranteed Obligations, or amounts
realized by Company in connection with the Guaranteed Obligations and (iii) Guarantor shall not
claim or prove in a liquidation or other insolvency proceeding of the Subsidiary in competition
with the Company. If any amount shall be paid to Guarantor on account of such subrogation
4
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 129 of 147
Exhibit B
to Purchase and Sale Agreement (Border Winds)
rights at any time when all of the Guaranteed Obligations shall not have been paid in full or
otherwise fully satisfied, such amount shall be held in trust by Guarantor for the benefit of
Company and shall forthwith be paid to Company, to be credited and applied to the Guaranteed
Obligations.
Section 4.
Representations and Warranties of Guarantor.
represents, warrants, and undertakes to Company as follows:
Guarantor hereby
(a)
Guarantor is duly organized, validly existing and in good standing under the Laws
of its jurisdiction of organization.
(b)
Guarantor has full power, authority and legal right to execute and deliver this
Guarantee and all other instruments, documents and agreements required by the provisions of
this Guarantee to be executed, delivered and performed by Guarantor, and to perform its
obligations hereunder and thereunder.
(c)
The execution, delivery and performance of this Guarantee and all other
instruments, documents and agreements required by the provisions of this Guarantee to be
executed, delivered and performed by Guarantor have been duly authorized by all necessary
company action on the part of Guarantor and do not contravene or conflict with Guarantor’s
memorandum and articles of association.
(d)
This Guarantee and all other instruments, documents and agreements required by
the provisions of this Guarantee to be executed, delivered and performed by Guarantor have been
duly executed and delivered by Guarantor and constitute the legal, valid and binding obligations
of Guarantor, enforceable against it in accordance with their respective terms.
(e)
Neither the execution and delivery of this Guarantee nor the performance of the
terms and conditions hereof by Guarantor shall result in (i) a violation or breach of, or a default
under, or a right to accelerate, terminate or amend, any contract, commitment or other obligation
to which Guarantor is a party or is subject or by which any of its assets are bound, or (ii) a
violation by Guarantor of any applicable Law, except, in either case for such violations,
breaches, defaults or rights as would not, individually or in the aggregate, have a material
adverse effect on the ability of Guarantor to perform its obligations under this Guarantee.
(f)
There are no actions, suits, investigations, proceedings, condemnations, or audits
by or before any court or other Governmental or Regulatory Authority or any arbitration
proceeding pending or, to its knowledge, threatened against or affecting Guarantor, its properties,
or its assets that, if adversely determined, would reasonably be expected to have a material and
adverse effect on Guarantor’s ability to perform its obligations under this Guarantee.
(g)
All necessary action has been taken under the Laws of England to authorize the
execution, delivery and performance of this Guarantee and to make this Guarantee admissible in
evidence in England. No governmental approvals or other consents, approvals, or notices of or
to any person are required in connection with the execution, delivery, performance by Guarantor,
or the validity or enforceability, of this Guarantee.
5
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 130 of 147
Exhibit B
to Purchase and Sale Agreement (Border Winds)
Section 5.
Notices. All notices, demands, instructions, waivers, consents, or other
communications required or permitted hereunder shall be in writing in the English language and
shall be sent by personal delivery or courier to the following addresses:
(a)
If to Guarantor:
[BEGIN TRADE SECRET
(b)
If to Company:
END TRADE SECRET]
Northern States Power Company
414 Nicollet mall, 7th Floor
Minneapolis, MN 55401-1927
Attention: Paras M. Shah, Director
Business Development
Facsimile: (612) 215-4575
with a copy to:
Northern States Power Company
414 Nicollet Mall
Minneapolis, MN 55401-1927
Attention: Scott Wilensky,
Sr. Vice President and General Counsel
Facsimile: (612) 215-9025
with a copy to (which copy shall not constitute notice hereunder):
Dorsey & Whitney LLP
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402-1498
Attention: Michael Pignato
Facsimile: (612) 340-2643
E-mail: pignato.michael@dorsey.com
The addresses and facsimile numbers of either party for notices given pursuant to this Guarantee
may be changed by means of a written notice given to the other party at least fifteen (15)
Business Days (being a day on which clearing banks are generally open for business in the
jurisdiction of the party to whom a notice is sent) prior to the effective date of such change.
Any notice required or authorized to be given hereunder shall be deemed to have been duly given
6
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 131 of 147
Exhibit B
to Purchase and Sale Agreement (Border Winds)
when received if personally delivered; and when delivered if sent by recognized courier service
(e.g., Federal Express, UPS or DHL). As proof of such service it shall be sufficient to produce a
receipt showing personal service or the receipt of a reputable courier company showing the
correct address of the addressee.
Section 6.
Miscellaneous Provisions.
(a)
Waiver; Remedies Cumulative. No failure on the part of Company to exercise,
and no delay on the part of Company in exercising, any right or remedy, in whole or in part
hereunder shall operate as a waiver thereof. No single or partial exercise of any right or remedy
shall preclude any other or further exercise thereof or the exercise of any other right or remedy.
No waiver by Company shall be effective unless it is in writing and such writing expressly states
that it is intended to constitute such waiver. Any waiver given by Company of any right, power
or remedy in any one instance shall be effective only in that specific instance and only for the
purpose for which given, and will not be construed as a waiver of any right, power or remedy on
any future occasion. The rights and remedies of Company herein provided are cumulative and
not exclusive of any rights or remedies provided by applicable Law.
(b)
Successors and Assigns. This Guarantee shall be binding upon the successors of
Guarantor and shall inure to the benefit of Company and its successors and permitted assigns.
Guarantor shall not assign or transfer all or any part of its rights or obligations hereunder without
the prior written consent of Company. Any purported assignment or delegation without such
written consent shall be null and void. Company may assign its rights and obligations hereunder
to any assignee of its rights under the Agreement permitted in accordance with the Agreement.
No other persons shall be a beneficiary of this Guarantee or have or acquire any rights by reason
of this Guarantee.
(c)
Amendment. This Guarantee may not be modified, amended, terminated or
revoked, in whole or in part, except by an agreement in writing signed by Company and
Guarantor.
(d)
Release. Other than termination in accordance with the terms of Section 2(a)
hereof, no release of this Guarantee shall be valid unless executed by Company and delivered to
Guarantor.
(e)
Law, Jurisdiction, Service and Waiver of Jury Trial.
(i)
This Guarantee is governed by and shall be construed in accordance with
Laws of the State of New York, without regard for any principles of conflicts of law that would
direct or permit the application of the Law of any other jurisdiction.
(ii)
The parties hereto hereby irrevocably submit to the exclusive jurisdiction
of the federal or state courts located in Hennepin County, Minnesota, over any dispute arising
out of or relating to this Guarantee or any of the transactions contemplated hereby; and each
Party hereby irrevocably agrees that all claims in respect of such dispute or proceeding shall be
heard and determined in such federal courts unless such federal courts do not have jurisdiction in
which event such dispute or proceeding shall be heard and determined in such state courts;
7
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 132 of 147
Exhibit B
to Purchase and Sale Agreement (Border Winds)
provided that for the purpose only of enforcement of any judgment of the federal or state courts
located in Hennepin County, Minnesota, the jurisdiction of such courts shall be non-exclusive.
Each party hereby irrevocably waives, to the fullest extent permitted by applicable Law, any
objection which it may now or hereafter have to the laying of venue of any such dispute brought
in such court or any defense of inconvenient forum.
(iii)
Each of the parties hereto hereby consents to process being served by the
other party to this Guarantee in any suit, action or proceeding of the nature specified in Section
6(e)(ii) hereof by mailing of a copy thereof in accordance with the provisions of Section 5
hereof.
(iv)
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY
HAVE TO TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED ON, ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS GUARANTEE OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION
OF ANY PARTY HERETO IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY.
(f)
Survival. All representations and warranties made in this Guarantee and by
Guarantor in any other instrument, document, and agreement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Guarantee.
(g)
Severability. Any provision of this Guarantee that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction. Where provisions of Law resulting in such prohibition or
unenforceability may be waived they are hereby waived by Guarantor and Company to the full
extent permitted by Law so that this Guarantee shall be deemed a valid binding agreement in
each case enforceable in accordance with its terms.
(h)
Third Party Rights. A person who is not a party to this Guarantee has no rights
to enforce any term of this Guarantee.
(i)
Set-off. Company shall have the right to set off, combine, consolidate, or
otherwise appropriate and apply (i) any assets of Guarantor at any time held by Company or (ii)
any indebtedness or other liabilities at any time owing by Company to Guarantor, as the case
may be, on account of the obligations or liabilities owed by Guarantor to such party under this
Guarantee.
(j)
Counterparts; Facsimile Signatures. This Guarantee may be executed in any
number of counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. Signatures delivered by facsimile shall be deemed
to be original signatures.
8
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 133 of 147
Exhibit B
to Purchase and Sale Agreement (Border Winds)
In Witness whereof, Guarantor has duly executed this Guarantee on the day and year first before
written.
[BEGIN TRADE SECRET
END TRADE SECRET]
NORTHERN STATES POWER COMPANY
By:
Name:
Title:
9
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 134 of 147
Exhibit C
to Purchase and Sale Agreement (Border Winds)
MEMBERSHIP INTEREST ASSIGNMENT
This Membership Interest Assignment (this “Assignment”), dated effective as of
_______, 201[_], is made between RES America Developments Inc., a Delaware corporation
(the “Assignor”) and Northern States Power Company, a Minnesota corporation (“Assignee”).
RECITALS:
A.
Assignor and Assignee are parties to that certain Purchase and Sale Agreement
(Border Winds), dated as of July 31, 2013 (the “Agreement”).
B.
Assignor owns one hundred percent (100%) of the membership interests of
[_____], a Delaware limited liability company (the “Company”), which owns all of the rights
and assets with respect to the Project.
C.
Assignor desires to assign to Assignee all of Assignor’s membership interest in
the Company (the “Interest”).
ASSIGNMENT:
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which the parties hereby acknowledge, the parties do hereby agree as follows:
1.
Defined Terms. Unless otherwise defined herein, all capitalized terms used
herein that are defined in the Agreement shall have their respective meanings as therein defined.
2.
Assignment of Limited Liability Company Interest. Effective for all purposes as
of the date first set forth above, Assignor does hereby give, transfer and assign to Assignee, and
Assignee does hereby accept and acquire from Assignor, the Interest, including all right, title and
interest of Assignors in the properties, capital, cash flow, and profits and losses of the Company
properly allocable thereto, as well as all rights and privileges associated therewith. It is the
intention of Assignor that Assignee be substituted in Assignor’s place as a Member of the
Company with respect to the Interest, and Assignee hereby specifically accepts the assignment of
the Interest. Assignor has delievered simultaneously herewith all certificates representing
ownership of the Interest, along with all necessary stock power or equivalent power of attorney.
3.
Representations. Assignor represents and warrants that Assignor is the sole
owners of the Interest, free and clear of any liens, encumbrances or claims of any other person,
and that Assignor may lawfully assign the Interest pursuant to the terms hereof.
4.
Cooperation. The parties agree to cooperate with each other in the furnishing of
information, the execution of deeds or other documents, and the taking of any other action
reasonably necessary to fully effectuate this Assignment.
1
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 135 of 147
Exhibit C
to Purchase and Sale Agreement (Border Winds)
5.
Multiple Counterparts. This Assignment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Assignment effective as of the
date first given above.
ASSIGNOR:
RES AMERICA DEVELOPMENTS INC.
By:
Name:
Title:
ASSIGNEE:
NORTHERN STATES POWER COMPANY
By:
Name:
Title:
2
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Northern States Power Company
Please Note
Exhibit D
to the Purchase and Sale Agreement
has been redacted in its entirety
Docket No. E002/M-13-____
Attachment A – Page 136 of 147
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 137 of 147
Exhibit E
to Purchase and Sale Agreement (Border Winds)
FORM OF NON-DISTURBANCE AGREEMENT
This Agreement is made as of __________________, 20__, by and among ____________, a
______________________, as “TENANT”, and _______________________, a __________________,
as “LENDER” and ______________________, a ___________________, as “LANDLORD”.
WITNESSETH
WHEREAS, effective the ______ day of ___________, 20__, LANDLORD and TENANT
entered into that certain Lease Agreement (hereinafter referred to as “Lease”) for certain property in
____________ County, ____________, which includes the real property legally described on the attached
Exhibit “A” (collectively, the “Property”).
WHEREAS, LENDER is the holder of a security interest in, and a lien and encumbrance on, the
Property as security for the obligation of LANDLORD under that certain [Mortgage, Security Agreement,
Assignment of Rents and Leases and Fixture Financing Statement], dated as of ________________,
20___, filed ______________, 20__, as Document No. ____________ in the office of the ___________
in and for _________________ County, _________________ (the “Mortgage”); and
WHEREAS, the parties desire to acknowledge TENANT’s interest in the Property so long as
there is not a TENANT default under the Lease.
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and
for other consideration received the parties agree as follows:
1.
Non Disturbance. So long as there is no TENANT default in the payment of rent or in
the performance of any of the terms of the Lease beyond applicable notice and cure periods, the
TENANT’s possession of the Property and the TENANT’s rights and privileges under the Lease or any
renewal thereof shall not be diminished or interfered with by the LENDER.
2.
Attornment. In the event the Mortgage is foreclosed for any reason, and the LENDER
succeeds to the interest of the LANDLORD under the LEASE, the TENANT shall be bound to the
LENDER under all of the terms of the Lease. The TENANT hereby attorns to the LENDER as its
LANDLORD, such attornment to be effective and self-operative, without the execution of any further
instrument on the part of either party, immediately upon the LENDER succeeding to the interest of the
LANDLORD. Notwithstanding anything in this Agreement to the contrary, the TENANT shall be under
no obligation to pay rent to the LENDER until LENDER has succeeded to the interest of the
LANDLORD under the Lease. The respective rights and obligations of the TENANT and the LENDER
upon such attornment shall be the same as now set forth in the Lease, it being the intention of the parties
to incorporate the Lease in this Agreement by reference with the same force and effect as if set forth at
length in this Agreement.
3.
LANDLORD’s Obligations. In the event that the Mortgage is foreclosed for any reason
and the LENDER succeeds to the interest of the LANDLORD, the LENDER shall be bound to the
TENANT under all of the terms of the Lease, and the TENANT shall, from and after such event, have the
same remedies against the LENDER for the breach of an agreement contained in the Lease that the
TENANT might have had under the Lease against the prior LANDLORD. LENDER hereby consents to
the Lease.
E-1
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 138 of 147
Exhibit E
to Purchase and Sale Agreement (Border Winds)
4.
Binding Effect. The rights and obligations of the LANDLORD, TENANT and the
LENDER under this Agreement shall bind and inure to the benefit of their respective successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Non-Disturbance Agreement to be
executed by their respective officers and duly authorized, as of the date first above written.
TENANT:
_______________________________________
By:
Its:
LENDER:
_______________________________________
By:
Its:
LANDLORD:
_______________________________________
By:
Its:
E-2
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 139 of 147
Exhibit E
to Purchase and Sale Agreement (Border Winds)
STATE OF ____________
COUNTY OF __________
)
) SS
)
The foregoing instrument was acknowledged before me this ____ day of ________, 20__, by
_______________________, the ____________________, of __________________, a
_______________ ________________ on behalf of said __________________.
_________________________________________
Notary Public, State of ______________________
STATE OF ____________
COUNTY OF __________
)
) SS
)
The foregoing instrument was acknowledged before me this ____ day of ________, 20__, by
_______________________, the ____________________, of __________________, a
_______________ ________________ on behalf of said __________________.
_________________________________________
Notary Public, State of ______________________
STATE OF ____________
COUNTY OF __________
)
) SS
)
The foregoing instrument was acknowledged before me this ____ day of ________, 20__, by
_______________________, the ____________________, of __________________, a
_______________ ________________ on behalf of said __________________.
_________________________________________
Notary Public, State of ______________________
E-3
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 140 of 147
Exhibit E
to Purchase and Sale Agreement (Border Winds)
EXHIBIT A
Legal Description of the Property
E-4
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Northern States Power Company
Please Note
Exhibit F
to the Purchase and Sale Agreement
has been redacted in its entirety
Docket No. E002/M-13-____
Attachment A – Page 141 of 147
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 142 of 147
Exhibit G
to Purchase and Sale Agreement (Border Winds)
Form of Effective Date Certificate
[MONTH, DAY, 201_]
Pursuant to Sections 3.1, 3.2 and 4.1 of the Purchase and Sale Agreement (Border
Winds), dated July 31, 2013 (the “Agreement”), by and between Northern States Power
Company, a Minnesota corporation (“Buyer”), and RES America Developments Inc., a
Delaware corporation (“Seller”), as of the date first set forth above, the Parties each certify as
follows:
(a) Seller certifies that (i) [_____] holds the office of [_____] of Seller, and (ii) all of the
Effective Date Conditions have been satisfied (or waived in writing by the Party
entitled to do so);
(b) Buyer certifies that [_____] holds the office of [_____] of Buyer, and (ii) all of the
Effective Date Conditions have been satisfied (or waived in writing by the Party
entitled to do so); and
(c) The Parties intend the provisions of the Agreement (other than the provisions already
effective as of the Signing Date) to be effective as of the date first written above, and
such date shall be the Effective Date for purposes of the Agreement.
Unless otherwise defined herein, all capitalized terms used herein that are defined in the
Agreement shall have their respective meanings as therein defined.
IN WITNESS WHEREOF, the undersigned officer of Seller and officer of Buyer have
executed and delivered this Effective Date Certificate as of the date first written above.
RES AMERICA DEVELOPMENTS INC., a
Delaware corporation
By:
Name:
Title:
NORTHERN STATES POWER
COMPANY, a Minnesota corporation
By:
Name:
Title:
G-1
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 143 of 147
Please Note
Exhibit H
to the Purchase and Sale Agreement
has been redacted in its entirety
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Northern States Power Company
Please Note
Exhibit I
to the Purchase and Sale Agreement
has been redacted in its entirety
Docket No. E002/M-13-____
Attachment A – Page 144 of 147
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 145 of 147
Exhibit J-1
to Purchase and Sale Agreement (Border Winds)
FORM OF INITIAL UNDER CONSTRUCTION CERTIFICATE
[BEGIN TRADE SECRET
END TRADE SECRET]
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 146 of 147
Exhibit J-2
to Purchase and Sale Agreement (Border Winds)
FORM OF FINAL UNDER CONSTRUCTION CERTIFICATE
[BEGIN TRADE SECRET
END TRADE SECRET]
PUBLIC DOCUMENT: TRADE SECRET INFORMATION EXCISED
Docket No. E002/M-13-____
Northern States Power Company
Attachment A – Page 147 of 147
Exhibit K
to Purchase and Sale Agreement (Border Winds)
UNDER CONSTRUCTION PLAN
[BEGIN TRADE SECRET
END TRADE SECRET]
EXHIBIT K
Maps Depicting Assets
T1
T2
T13
T3
T16
T14
T20
T18
T19
T17
T15
T4
T21
T22
T23
T24
T25
T26
T37
T27
T54
T38
T31
T28
T65
T55
T39
T32
T29
T66
T5
T33
T77
T40
T79
T46
T41
T80
T78
T57
T12
T8
T36
T35
T30
T11
T7
T45
T34
T56
T6
T58
T47
T67
T42
T93
T10
T95
T82
T70
T50
T81
T94
T69
T49
T44
T48
T68
T43
T9
T71
T97
T84
T76
T85
T74
T75
T73
T96
T83
T72
T59
T60
T98
T86
T99
T87
A3
T64
T88
T63
T53
T62
T52
T61
T51
A1
A2
T100
T89
A4
A5
T90
T91
A6
T92
PLEASANT VALLEY WIND FARM
0
0.5
1
2
3
4
Miles
This drawing is the property of RES America
Developments Inc. and no reproduction may be
made in whole or in part without permission.
11101 W. 120th Ave., Suite 400, Broomfield, CO, 80021
Phone: (303) 429-4200 Fax: (303) 429-4299
Renewable Energy Systems
COORDINATE SYSTEM: UTM27-15 METERS
LAYOUT NUMBER: PUSAGMD183 & PUSAGMD196
DRAWING NUMBER: 01772D2209-01
DRAWN BY: EW
Date: 06/19/2013
APPROVED BY: ADB
Date: 06/19/2013
Proposed Transmission Line 150 Foot Easement
Leased Land
Project Boundary
Proposed Substation
Vestas V100-2.0 Alternate Turbine (Total : 12 MW)
Vestas V100-2.0 Primary Turbine (Total : 200 MW)
LEGEND
0
0.25
0.5
T4
1
T5
T1
T2
T12
T6
T3
1.5
T7
T13
T14
2
T9
T15
Miles
T8
T33
T16
T11
T17
T34
T10
T18
T19
T20
T21
T35
T22
T36
T37
T23
T38
T24
T39
T25
T26
T55
T27
T56
T45
T28
BORDER WINDS WIND FARM
T57
T46
T29
T47
T48
T30
T49
T31
T58
T50
T32
T59
T51
T60
T52
T62
T54
T63
T67
T72
T68
T73
T74
T66
T75
T71
T44
T65
T70
T43
T64
T69
Proposed Substation
T61
T53
T40
T41
T42
This drawing is the property of RES America
Developments Inc. and no reproduction may be
made in whole or in part without permission.
11101 W. 120th Ave., Suite 400, Broomfield, CO, 80021
Phone: (303) 429-4200 Fax: (303) 429-4299
Renewable Energy Systems
COORDINATE SYSTEM: UTM27-14 METERS
LAYOUT NUMBER: PUSABDW036
DRAWING NUMBER: 23053D2203-01
DRAWN BY: EW
Date: 07/30/2013
APPROVED BY: ADB
Date: 07/30/2013
Leased Land
Project Boundary
Proposed Substation
Vestas V100-2.0 Primary Turbine (Total : 150 MW)
LEGEND
EXHIBIT L
Other Required Regulatory Approvals
NSPM anticipates that the following the regulatory approvals from state regulatory
authorities are necessary for the proposed Asset Exchange transaction:
1.
An order by the Minnesota PUC authorizing NSPM to acquire the Border Winds
Facility and Pleasant Valley Facility. The MPUC approved the Transactions by order dated
December 13, 2013. A copy of the MPUC order is attached hereto.
2.
An Advanced Determination of Prudence by the North Dakota PSC authorizing
NSPM to acquire the Pleasant Valley Facility. That request is currently pending in North Dakota
PSC Docket No. PU-13-708.
3.
An Advanced Determination of Prudence by the North Dakota PSC authorizing
NSPM to acquire the Border Winds Facility. That request is currently pending in North Dakota
PSC Docket No. PU-13-742
4.
A Certificate of Public Convenience and Necessity by the North Dakota PSC
authorizing NSPM’s operation of the Border Winds Facility. That request is currently pending in
North Dakota PSC Docket No. PU-13-743.
BEFORE THE MINNESOTA PUBLIC UTILITIES COMMISSION
Beverly Jones Heydinger
David C. Boyd
Nancy Lange
J. Dennis O’Brien
Betsy Wergin
Chair
Commissioner
Commissioner
Commissioner
Commissioner
In the Matter of the Petition of Xcel Energy for
Approval of the Acquisition of 600 MW of
Wind Generation
ISSUE DATE: December 13, 2013
In the Matter of the Petition of Xcel Energy for
Approval of the Acquisition of 150 MW of
Wind Generation
DOCKET NO. E-002/M-13-716
DOCKET NO. E-002/M-13-603
ORDER APPROVING ACQUISITIONS
WITH CONDITIONS
PROCEDURAL HISTORY
In February 2013, Northern States Power Company d/b/a Xcel Energy (Xcel) solicited proposals
to buy up to 200 megawatts (MW) of power generated from wind, or to buy wind-powered
generating plants capable of generating up to 200 MW, or some combination thereof. The
Commission has established a process by which Xcel may acquire new sources of electricity by
soliciting proposals from other parties. 1
On July 16, 2013, Xcel filed a petition for approval to acquire 600 MW of wind-powered
electricity; this matter was assigned to Docket No. E-002/M-13-603. Thereafter Xcel filed a
petition for approval of an additional 150 MW of wind-powered electricity; this matter was
assigned to Docket No. E-002/M-13-716. Xcel proposes to pursue four projects:
•
Border Winds, an agreement to buy from RES Americas a collection of wind turbines and
related facilities to be erected as a wind farm in Rolette County, North Dakota, with a
combined generating capacity of 150 MW (Docket No. E-002/M-13-716).
•
Courtenay, an agreement to buy from Geronimo Energy (Geronimo) the output of a
200 MW wind farm to be erected in Jamestown, North Dakota (Docket No. E-002/M-13-603).
•
Odell, an agreement to buy from Geronimo the output of a 200 MW wind farm to be
erected in Mountain Lake, Minnesota (Docket No. E-002/M-13-603).
•
Pleasant Valley, an agreement to buy from RES Americas a 200 MW wind farm to be
erected in Austin, Minnesota (Docket No. E-002/M-13-603).
1
See Docket No. E-002/RP-04-1752, In the Matter of Northern States Power Company d/b/a Xcel
Energy’s Application for Approval of its 2004 Resource Plan, Order Establishing Resource Acquisition
Process, Establishing Bidding Process Under Minn. Stat. § 216B.2422, Subd. 5 and Requiring Compliance
Filing (May 31, 2006).
1
The Commission received comments on the proposals from the Minnesota Chamber of Commerce, LLC
(the Chamber), Geronimo, the Minnesota Department of Commerce (the Department), the Minnesota
Pollution Control Agency (MPCA), Sorgo Fuels (Sorgo), Xcel, and a group of developers for
community-based energy development projects (the Joint C-BED Intervenors). 2
In October 2013, the Commission issued an order directing Xcel to issue a notice of changed
circumstances in various dockets addressing Xcel’s resource needs, acknowledging that Xcel is
pursuing 750 MW of additional electricity from wind power in the current dockets. 3 Xcel issued
the notice.
On October 17, 2013, Xcel’s proposals came before the Commission.
FINDINGS AND CONCLUSIONS
I.
Summary of the Issues
The parties’ comments focused on the following issues:
•
Should the Commission further develop the record of these dockets by referring them to
the Office of Administrative Hearings for contested case proceedings?
•
Should the Commission otherwise defer action on these dockets to solicit additional
comments or rule on a discovery dispute?
•
Does the record demonstrate that each of Xcel’s proposals is a reasonable and prudent
approach for fulfilling Xcel’s obligations under the Renewable Energy Standards, Minn.
Stat. § 216B.1645? In particular, did Xcel use an appropriate process to select its projects?
•
Are the Courtenay and Odell projects eligible for cost recovery under Minn. Stat.
§ 216B.1645, subd. 2?
•
May the Odell project proceed without a certificate of need?
•
Does Minn. Stat. § 216B.50 -- governing energy utilities transferring property exceeding
$100,000 -- apply to the Border Winds and Pleasant Valley projects? If so, do the transfers
involving these projects comply with the statute, and should the Commission grant a
variance to one of the rules implementing the statute?
•
Should the Commission establish conditions on any of the four projects?
These issues will be examined in turn.
2
The Joint C-BED Intervenors include Ecos Energy, LLC, Summit Wind, LLC, Jeffers South, LLC,
Hurricane Wind, LLC, Garvin Wind, LLC, Gadwall Wind, LLC, Greenhead Wind, LLC, Watonwan Wind, LLC,
and Highwater Wind, LLC.
3
See Order Requiring Notice of Changed Circumstances and Granting Intervention (October 4, 2013),
issued in the current dockets, plus In the Matter of Xcel Energy’s 2010 – 2025 Integrated Resource Plan,
Docket No. E-002/RP-10-825, and In the Matter of the Petition of Xcel Energy for Approval of the
Competitive Resource Acquisition Proposal and Certificate of Need, Docket No. E-002/CN-12-1240.
2
II.
Background
This docket addresses five state policies in particular: resource planning, community-based
energy development (C-BED), the Renewable Energy Standards, the new renewable energy plan,
and Xcel’s competitive resource acquisition process.
A.
Resource Planning
Minn. Stat. § 216B.2422 directs larger electric utilities to disclose both their plans, and the
analysis underlying the plans, for selecting the resources necessary to meet customer demand
throughout the next 15 years.
The utility can supply electricity through a combination of generation and power purchases. The
utility can also manage its customers’ demand by encouraging customers to conserve electricity
or to shift activities requiring electricity to periods when there is less demand on the electric
system. A resource plan contains a set of demand-side and supply-side resource options that the
utility could use to meet the needs of retail customers. A utility considers the supply-side and
demand-side resources together on an equivalent basis. Through the process of creating a
resource plan, a utility can identify the least-expensive reliable combination of resources that will
meet the utility’s requirements, consistent with state and federal law and public policy.
B.
Community-Based Energy Development
Minn. Stat. § 216B.1612, the Community-Based Energy Development (C-BED) statute, directs
Minnesota utilities to take steps designed to facilitate the creation of small projects powered by
renewable sources of energy, provided the projects have the requisite degree of ownership by
local or tribal interests.
C.
The Renewable Energy Standards
Minn. Stat. § 216B.1691, the Renewable Energy Standards, directs Xcel to acquire electricity
from renewable sources sufficient to meet 30 percent of the needs of its retail customers by 2020. 4
D.
The Renewable Energy Plan
Subdivision 10 of the Renewable Energy Standards directs Xcel to propose a renewable energy
plan, and for the Commission to approve it unless the Commission finds that the plan –
is not in the public interest. As part of its determination of public interest, the
commission shall consider the plan's allocation of projects among C-BED,
non-C-BED, and utility-owned projects, balancing the state's interest in:
(1) promoting the policy of economic development in rural areas through the
development of renewable energy projects, as expressed in subdivision 9;
(2) maintaining the reliability of the state's electric power grid; and
(3) minimizing cost impacts on ratepayers. 5
4
Minn. Stat. § 216B.1691, subd. 2a(b)(4).
5
Minn. Stat. § 216B.1691, subd. 10.
3
When Xcel proposed pursuing equal portions of its renewable energy portfolio from C-BED,
non-C-BED, and utility-owned projects, the Commission issued its Target Resource Allocation
Order finding the proposal to be consistent with the public interest. 6
E.
Competitive Resource Acquisition Dockets
As previously noted, the Commission has established a process by which Xcel may acquire new
sources of electricity by soliciting proposals from other parties. 7
Xcel’s current resource plan includes a proposal to acquire 200 MW of wind power in the short
term, plus up to 500 MW of intermediate and peaking power by 2019. 8 Xcel elected to pursue all
of these resources via its competitive resource acquisition process. The wind power solicitation
initiated the current dockets, while the intermediate and peaking power solicitation initiated a
separate docket. 9
III.
Xcel’s Proposals
A.
Selection Process for Wind Resources
In February 2013, Xcel solicited proposals for an additional 200 MW of wind-powered electricity.
Xcel welcomed proposals from parties selling wind turbine generators, parties offering power
contracts, and parties offering some combination of generator sales and contracts. In particular,
Xcel invited proposals from C-BED developers.
Xcel received proposals for 57 different projects, and evaluated more than 200 combinations of
proposals. To focus attention on the most promising alternatives, Xcel eliminated from further
consideration any proposal that would cost more than $29.00/megawatt-hour (MWh) on a
levelized basis – that is, an average cost calculated over the life of the investment. Of the 16
projects that met this test, none included a C-BED project.
Xcel then analyzed each project’s potential transmission requirements and proposals for
interconnecting with the transmission grid administered by the Midcontinent Independent System
Operator (MISO). MISO’s tariffs govern when generators may connect to the grid, and MISO
identifies the system improvements that must be made before the interconnection may occur.
Because generators often must bear the cost of upgrading the transmission grid at their point of
interconnection with the grid, these upgrades can pose a major obstacle for new generators.
6
In the Matter of Northern States Power Company d/b/a Xcel Energy’s Application for Approval of its
Renewable Energy Plan, Docket No. E-002/M-07-1558, Order Approving Target Portfolio Allocation
Within Xcel’s Renewable Energy Plan (June 19, 2009).
7
See Docket No. E-002/RP-04-1752, In the Matter of Northern States Power Company d/b/a Xcel
Energy’s Application for Approval of its 2004 Resource Plan, Order Establishing Resource Acquisition
Process, Establishing Bidding Process Under Minn. Stat. § 216B.2422, Subd. 5 and Requiring Compliance
Filing (May 31, 2006).
8
In the Matter of Xcel Energy’s 2010 – 2025 Integrated Resource Plan, Docket No. E-002/RP-10-825.
9
In the Matter of the Petition of Xcel Energy for Approval of the Competitive Resource Acquisition
Proposal and Certificate of Need, Docket No. E-002/CN-12-1240.
4
Finally, Xcel pursued separate negotiations with the most promising projects, resulting in the final,
trade secret terms for the four proposed projects.
An independent auditor reviewed Xcel’s process and found it fair and transparent.
B.
Benefits
Xcel states that the primary benefit of the proposed projects would derive from permitting Xcel to
reduce the amount of fossil fuels it would otherwise burn at other generators. Using a computer
model, Xcel estimates that the projects would enable Xcel to reduce power supply costs by $225
million over the life of the projects. Moreover, they would enable Xcel to reduce greenhouse gas
emissions; Xcel estimates the projects would permit Xcel to avoid an additional $373 million in
potential carbon regulation costs.
As an additional benefit, Xcel argues that the projects would enhance economic development in
southern Minnesota and North Dakota.
C.
Xcel’s Petition
Xcel asks the Commission to take the following actions:
First, Xcel asks the Commission to determine under Minn. Stat. § 216B.1645, subd. 1, that the
proposed projects are reasonable and prudent means for meeting obligations under the Renewable
Energy Standards.
Second, Xcel asks the Commission to determine under § 216B.1645, subd. 2, that the cost of the
power purchase agreements may qualify for recovery in the same manner as other energy-related
costs.
Third, Xcel asks the Commission to determine whether § 216B.50 -- governing energy utilities
transferring property exceeding $100,000 -- applies to the proposed Pleasant Valley and Border
Winds projects. If § 216B.50 does apply, Xcel would ask the Commission to a) find that the
projects comply with the statute and b) waive application of Minn. R. 7825.1800, subp. B.
IV.
Positions of the Parties
A.
The Department
Having conducted its own evaluation, including substantial computer modelling and scenario
analysis, the Department supports Xcel’s proposals. In addition to supporting Xcel’s petitions, the
Department supports the conclusion that the Odell wind project is exempt from the need for a
certificate of need because the project would help Xcel fulfill its requirements under the
Renewable Energy Standards.
B.
MPCA
MPCA argues that Xcel’s proposals would promote the public interest because they would reduce
various emissions, achieving annual benefits for human health and the larger environment of
between $60 million and $150 million from 2017 onward.
5
C.
Geronimo
Geronimo supports Xcel’s proposals, and asks the Commission to find that Minn. Stat. § 216B.243
exempts the Odell project from the requirement to acquire a certificate of need.
D.
The Chamber
Among other things, the Chamber generally supports Xcel’s filings as cost-effective means for
Xcel to fulfill the Renewable Energy Standards. But given Xcel’s proposals in the present dockets,
the Chamber asks the Commission to re-evaluate Xcel’s professed need for more generating
capacity, currently driving another resource acquisition docket. 10
Also, the Chamber asks that, before the Courtenay and Odell projects begin operating, Xcel reach
an agreement with the Chamber to ensure that Xcel appropriately manages the projects’
unresolved costs, including interconnection costs.
E.
Joint C-BED Intervenors
The Joint C-BED Intervenors argue that Xcel has failed to make a reasonable, good-faith effort to
determine whether some or all of its resource needs could be met by C-BED projects as provided
by Minn. Stat. § 216B.1612, subd. 5. Consequently the intervenors argue that the Commission
should reject the proposals as contrary to the public interest.
Among their claims, the Joint C-BED Intervenors argue as follows:
•
While Xcel’s resource plan anticipated the need for an additional 200 MW of electricity
from wind, Xcel’s subsequent choice to pursue 750 MW of wind power is not adequately
supported by the record.
•
Xcel failed to demonstrate the prudence of pursuing the proposed projects due to their large
financial and operational risks.
•
More generally, Xcel’s competitive bidding process fails to give appropriate priority to
C-BED proposals as required by the Commission’s Target Resource Allocation Order. 11
•
Xcel’s choice to reject all projects with a levelized cost exceeding $29.00/MWh was
arbitrary and unfairly caused Xcel to exclude from consideration a C-BED proposal with
levelized costs of $29.55/MWh.
Rather than approve Xcel’s proposals, the Joint C-BED Intervenors provided a list of issues that
they believe should be developed through a contested case proceeding. These issues include the
following:
10
In the Matter of the Petition of Xcel Energy for Approval of the Competitive Resource Acquisition
Proposal and Certificate of Need, Docket No. E-002/CN-12-1240.
11
In the Matter of Northern States Power Company d/b/a Xcel Energy’s Application for Approval of its
Renewable Energy Plan, Docket No. E-002/M-07-1558, Order Approving Target Portfolio Allocation
Within Xcel’s Renewable Energy Plan (June 19, 2009).
6
•
Has Xcel complied with the Renewable Energy Standards?
•
What price range was Xcel supposed to evaluate when reviewing community-based energy
development (C-BED) proposals?
•
Did Xcel fail to meet its C-BED tariff terms?
•
Would selection of a C-BED project have increased rates?
•
Did Xcel comply with the Commission’s Target Resource Allocation Order?
•
Are any of the C-BED projects more reasonable than the projects selected?
•
Is acquisition of out-of-state resources consistent with state policy?
•
Did Xcel appropriately consider integration costs?
•
What are Xcel’s overall needs?
Finally, in responding to a discovery request from the Joint C-BED Intervenors, Xcel inadvertently
included a document that Xcel alleges contains trade secret information that should be shielded
from public disclosure. Xcel then asked the Joint C-BED Intervenors to destroy the attachment.
The Joint C-BED Intervenors declined, asking the Commission to conduct hearings on the matter
in accordance with the Minnesota Rules of Civil Procedure. 12
F.
Sorgo
Sorgo generally opposes Xcel’s petitions, arguing among other things that Xcel failed to give
adequate consideration to the cost of integrating 750 MW of wind-generated power. That is, Sorgo
argues that the intermittent nature of wind power – continuously fluctuating up and down –
requires a utility to continuously ramp its other generators down and up to compensate, which
shortens the useful lives of these other generators.
G.
Xcel
In its comments, Xcel replied to the concerns raised by other parties.
V.
Commission Action
A.
Procedural Matters
1.
Referral for contested case proceeding
Under Minn. R. 7829.1000 if a party has a right to a hearing on a question arising under statute or rule,
and contested material facts bear on that question, the Commission refers the matter to the Office of
Administrative Hearings for contested case proceedings under Minn. Stat §§ 14.57-14.62. The Joint
C-BED Intervenors request this referral; Xcel and the Department oppose it.
A contested case proceeding is not an appropriate forum for addressing contested facts that are not
material to a proposal’s justification, nor for documenting facts already in the record, nor for
contesting material questions that are not factual. Interpretations of law, analyses of facts already
12
See Minn. R. Civ. Proc. § 26.02(f)(2).
7
discovered, and disagreements about policy simply do not lend themselves to resolution via the
contested case process.
Xcel’s obligations under the Renewable Energy Standards are a matter of law. No party has denied
that Xcel will need additional energy to fulfill its obligations under those standards, or argued that
the four proposed projects will generate more energy than the statute requires. Moreover, no party
denies that the levelized costs associated with each project make them attractive sources of energy,
regardless of any statutory requirements. And while parties may argue about the amount of
additional capacity Xcel requires, these arguments are not material to the current projects; these
projects are justified as an inexpensive source of energy, not capacity.
In short, no unresolved contested questions of material fact impede the Commission’s ability to
address the outstanding questions in this docket. Consequently the Commission will decline to
refer the current dockets for contested case proceedings.
2.
Additional opportunity to comment
In the alternative, the Joint C-BED Intervenors request an additional comment period or
opportunity to supplements their comments. In particular, when Xcel inadvertently sent them trade
secret information and subsequently asked to have the information destroyed, the Joint C-BED
Intervenors asked the Commission to conduct proceedings to rule on the merits of Xcel’s request
in accordance with the Minnesota Rules of Civil Procedure. 13
The Commission will decline the Joint C-BED Intervenors’ request. Parties have had adequate
opportunity to make their case, and the record in this matter is well developed. The Department found
the record sufficient to permit a comprehensive review of Xcel’s proposals; the Joint C-BED
Intervenors, having signed a non-disclosure agreement with Xcel, have access to the same
information.
Regarding the parties’ dispute over the duty to destroy pre-trial materials subject to a claim of
privilege, the party seeking relief is Xcel. If Xcel does not ask to have these dockets delayed
pending resolution of this disagreement, the Commission finds no reason to impose this delay on
the company. In short, the substance of the filing does not raise issues warranting further
procedural steps.
3.
Re-evaluation of the other Competitive Resource Acquisition docket
Xcel’s proposes to acquire the benefit of generators capable of producing 750 MW in the current
dockets, while the Legislature now directs utilities to meet an additional 1.5% of the needs of their
retail customers via solar power. 14 Given this context, the Chamber, the Joint C-BED Intervenors,
and Sorgo ask the Commission to reconsider the need to acquire up to 500 MW of additional
capacity in the other Competitive Resource Acquisition docket. 15
13
See Minn. R. Civ. Proc. § 26.02(f)(2).
14
Minn. Stat. § 216B.1691.
15
In the Matter of the Petition of Xcel Energy for Approval of the Competitive Resource Acquisition
Proposal and Certificate of Need, Docket No. E-002/CN-12-1240.
8
The Commission will not act on this request for both substantive and procedural reasons. As a
substantive matter, the other Competitive Resource Acquisition docket is designed to provide Xcel
with additional generating capacity – that is, access to an additional supply of electricity available
upon demand to meet its customers’ needs, even during periods of peak demand. In contrast, in the
current dockets Xcel is pursuing new sources of energy – basically, access to a new supply of
electricity that is cheaper than Xcel’s current supply of electricity, at least when the wind is
blowing. Thus, the dockets are not substitutes for each other.
As a procedural matter, the parties’ concerns are more appropriately addressed in the other
competitive resource acquisition docket itself. The overlapping subject matter of various dockets
sometimes makes it appropriate to address multiple dockets in a single order. 16 But in this
instance, questions about Xcel’s capacity needs are beyond the scope of the current dockets.
B.
Project approval
1.
In general
Minn. Stat. § 216B.1645 requires the Commission to approve or disapprove the utility’s power
purchase contracts and other expenditures intended to meet the requirements of the renewable
energy standards and other statutes. Xcel seeks approval for its four proposals.
The Department and the MPCA support Xcel’s petition. The Joint C-BED Intervenors and Sorgo
oppose it, raising three types of arguments. First, they allege that changed circumstances arising
since Xcel’s last resource plan compel the Commission to further develop the record before acting
on Xcel’s petitions. Second, they argue that Xcel’s proposals conflict with the Commission’s
Target Allocation Order. Finally, they argue that Xcel’s selection process was unfair and
discriminated against C-BED projects.
2.
Changed circumstances
In various ways, the Joint C-BED Intervenors object that changes in circumstances arising since
the Commission approved Xcel’s last resource plan make it difficult to know whether Xcel’s
resource acquisition strategies are optimal. The Commission acknowledges these changes, and has
already directed Xcel to issue a notice of changed circumstances. 17 That said, while a resource
plan is intended to plot a utility’s course for the next 15 years, it is based on facts known as of a
specific point in time. As more facts become known, circumstances change and utilities must adapt
– even in the absence of a new resource plan order.
In the current dockets, Xcel acquired new facts when it received bids for new wind turbine projects
demonstrating that wind power had become more competitive with other sources of electricity.
And Xcel adapted. In brief, Xcel concluded that it could operate more efficiently by increasing its
reliance on electricity from wind and reducing its reliance on electricity from other sources such as
fossil fuels. And Xcel identified the best available new wind resources via a competitive bidding
16
See, for example, In the Matter of Xcel Energy’s 2010 – 2025 Integrated Resource Plan, Docket Nos.
E-002/RP-10-825 et al., Order Requiring Notice of Changed Circumstances and Granting Intervention
(October 4, 2013).
17
In the Matter of Xcel Energy’s 2010 – 2025 Integrated Resource Plan, Docket Nos. E-002/RP-10-825 et
al., Order Requiring Notice of Changed Circumstances and Granting Intervention (October 4, 2013).
9
process. Xcel’s filings support these assertions, and no party presented evidence challenging either
assertion.
3.
Target Allocation Order
The Joint C-BED Intervenors argue that Xcel’s proposals violate the Commission’s Target
Allocation Order. In that order the Commission approved Xcel’s tentative plan to acquire future
sources of renewable energy equally from among “C-BED, non-C-BED, and utility-owned
projects.” 18 But the Commission was explicit that this target should not outweigh the public’s
interest in efficient utility management and minimizing costs for ratepayers:
All parties have noted that this allocation could result in needless costs if Xcel were
to begin picking projects solely on the basis of their ownership structures, and
refrain from comparing the cost-effectiveness of a C-BED project with an
[independent power producer] contract or utility-owned generator, for example.
Fortunately, Xcel denies that it intends to acquire resources in this manner. As
noted above, the renewable energy plan statute establishes the goals of promoting
rural economic development, promoting transmission grid reliability, and
minimizing ratepayer costs. Xcel offered its target allocations as one possible
strategy for achieving these statutory goals. It would make no sense for Xcel to
pursue the strategy to the detriment of the goals. To clarify this matter, the
Commission will direct Xcel to evaluate all potential resources on an equivalent
basis, regardless of the resources' ownership structures.
….The Commission has a strong preference for a resource acquisition model that
involves a competitive bidding process, or at least a process demonstrating the
equivalent rigor and analysis. Whatever method Xcel uses for selecting its
resources, Xcel must be able to demonstrate to the Commission's satisfaction that
Xcel selected the most cost-effective resource options in order to recover the costs
of its resource options from ratepayers. 19
The process by which Xcel selected the Border Winds, Courtenay, Odell, and Pleasant Valley
projects involved comparing all potential resources on an equivalent basis, regardless of the
resources’ ownership structures, and selecting the projects that would be the most cost-effective. Far
from violating the Target Allocation Order, Xcel’s selection process fully complies with that order.
4.
Selection process
The Joint C-BED Intervenors argue that Xcel’s selection process – including the screening process
of excluding from further consideration all proposals with a levelized cost above $29/MWh -- was
arbitrary and discriminated against C-BED proposals, including a proposal with a levelized cost of
$29.55/MWh.
The Commission finds no fault with Xcel’s process. Screening on the basis of relevant criteria is
an appropriate way to focus attention on the most promising proposals. The fact that this screening
process identified 16 candidates for further analysis demonstrates that the process was not unduly
18
Target Allocation Order at 3, quoting Minn. Stat. § 216B.1691, subd. 10.
19
Id. at 9-10.
10
restrictive. At first glance a proposal with a levelized cost of $29.55 may seem close to the
screening threshold of $29.00/MWh. But ultimately the relevant basis of comparison is not
$29.00/MWh but the trade-secret levelized costs of energy generated by the four proposed
projects. This data reveals that the C-BED proposals were simply not competitive.
5.
Prudence
Finally, the Joint C-BED Intervenors argue that the proposed projects are unreasonable because
they would require ratepayers to bear unbounded financial and operational risks.
Xcel disclosed to the Commission and others the trade-secret terms of its proposed agreements for
each of the proposed projects. In addition to direct and knowable costs, each of the proposals poses
risks for certain future costs. Xcel argues that it has identified, assessed, and negotiated terms that
mitigated the risks – generally by shifting them to the project developers. For example:
Construction and capital risk –Geronimo proposes to build and operate the Courtenay and
Odell projects and sell the resulting electricity to Xcel, so Xcel would bear no construction or
capital risk from these projects. But Xcel proposes to buy the Border Winds and Pleasant Valley
projects, and thus would bear the risk if these projects later developed operational problems.
However, RES Americas agrees to develop the projects in a manner that meets Xcel’s technical
requirements, and would bear the risk if this task proved to be more expensive or difficult than
expected. Moreover, Xcel negotiated to hold back a portion of the project price pending an
inspection period, and has included construction oversight costs and closing costs in the project’s
cost estimates. In this manner, Xcel shields ratepayers and itself from risk.
Transmission interconnection risk – Geronimo accepts the risk that interconnecting its
projects to the grid may prove to be more expensive, difficult, or time-consuming than expected. In
analyzing the cost of the Pleasant Valley project, Xcel incorporated an estimate of interconnection
costs -- based on studies by both MISO and from a private consultant – plus a $4 million
contingency. Regarding the Border Winds contract, Xcel and RES Americas propose to share
interconnection costs up to a specified level, and Xcel would retain the discretion to terminate the
contract should RES Americas refuse to pay for the overage beyond that level. In each case, Xcel
has anticipated and managed the risk to ratepayers and itself.
Environmental risk – Geronimo accepts responsibility for securing the necessary permits
and complying with the environmental laws applicable to the power purchase agreements. RES
Americas has already obtained a site permit from the Commission for the Pleasant Valley project.
Avian and bat studies have been completed. And RES Americas agrees to develop an Avian and
Bat Protection Plan in conjunction with the US Fish and Wildlife Service (USFWS) as part of its
Site Permit. Regarding the Border Winds project, RES Americas agrees to obtain avian and bat
surveys, and to create an Avian and Bat Protection Plan in conjunction with the USFWS. In each
case, the terms of the agreements place the burden for certain environmental risks clearly on the
project developers, not on Xcel or ratepayers.
Operational risks – For purposes of estimating the value of the four projects, Xcel made
conservative assumptions about the amount of electricity it would receive. For example, Xcel
analyzed each proposal while assuming that transmission constraints might cause unusually
frequent power curtailments. If the projects are profitable under these adverse assumptions, the
Commission gains greater confidence that the transactions will be profitable for Xcel and
11
ratepayers in practice. Moreover, Geronimo agrees to bear the risk of lost sales resulting from
curtailments; this fact provides further reason for confidence that the power purchase agreements
will be favorable for Xcel and ratepayers.
Wind integration risk – In analyzing the costs of adding to its system wind turbines with a
capacity of 750 MW – including the cost of the resulting operational changes -- Xcel states that it
found the projects cost-effective even if annual wind integration costs reached $8.5 million. The
Department found the proposals cost-effective even when assuming higher wind integration costs.
Furthermore, Xcel argues that it is continuing to learn how to better manage its plants to mitigate
these costs. These conservative assumptions support the conclusion that the proposed plans will
provide net benefits to ratepayers.
Federal Production Tax Credit risk – The negotiated terms reflect a presumption that the
projects would qualify for the federal Production Tax Credit. Geronimo agrees to bear the risk if
the projects do not qualify for the credit, and RES Americas agrees to bear the risk if a project fails
to begin construction in a manner required to qualify for the credits. By assuming these risks,
Geronimo and RES Americas strengthen the reliability of forecasts regarding the projects’
profitability.
Regulatory risk – As previously noted, generally the developer of a large energy facility
must obtain a certificate of need from this Commission before the developer may proceed. But
Xcel argues that this requirement should not impede the development of the four proposed
projects. The Commission has already issued a certificate for the Pleasant Valley project. 20 The
Courtenay and Border Winds projects are to be erected in North Dakota and therefore are not
subject to Minnesota’s certificate of need requirement. And Xcel argues that the Odell project
should be exempt from the certificate of need requirements because Xcel selected it as part of a
Commission-approved competitive bidding process, 21 and because the project is needed to permit
Xcel to comply with the Renewable Energy Standards. 22
Reviewing Xcel’s efforts to manage the risks associated with the proposed projects, the
Department concludes that the projects’ substantial benefits outweigh their modest costs,
including their well-managed risks. The Commission concurs.
6.
Conclusion
The Commission finds that Xcel’s proposals represent a reasonable and prudent manner of
meeting Xcel’s obligations under the Renewable Energy Standards. The proposed projects would
produce electricity from wind energy, a renewable resource within the meaning of the statute. And
Xcel’s rigorous bidding process supports the conclusion that Xcel has identified the most
cost-effective means of fulfilling the statutory mandate. Consequently the Commission will
approve Xcel’s proposed contracts under Minn. Stat. § 216B.1645 subject to the conditions
discussed below.
20
See In the Matter of the Application of Pleasant Valley Wind LLC For a Certificate of Need For the
300 MW Pleasant Valley Project in Dodge and Mower Counties, Docket No. IP-6828/CN-09-937, Order
Granting a Certificate of Need (October 27, 2010).
21
Minn. Stat. § 216B.2422, subd. 5.
22
Minn. Stat § 216B.243, subd. 9.
12
C.
Large Property Transfers and Mergers
Xcel asks the Commission to determine whether Minn. Stat. § 216B.50 applies to the proposed
Pleasant Valley and Border Winds projects. If § 216B.50 does apply, Xcel asks the Commission to
a) find that the projects comply with the statute, and b) waive application of Minn. R. 7825.1800,
subp. B.
Minn. Stat. § 216B.50 governs the transfer of utility assets exceeding $100,000:
No public utility shall sell, acquire, lease, or rent any plant as an operating unit or
system in this state for a total consideration in excess of $100,000 … without first
being authorized so to do by the commission…. If the commission finds that the
proposed action is consistent with the public interest, it shall give its consent and
approval…. In reaching its determination, the commission shall take into
consideration the reasonable value of the property, plant, or securities to be
acquired or disposed of, or merged and consolidated….
This statute does not apply to the Courtenay and Odell projects – which would not involve Xcel
acquiring the wind farms themselves – nor the Border Winds project – which would not be located
within Minnesota. But the statute would apply to the Pleasant Valley project. Thus Xcel may not
proceed to acquire that project until the Commission determines that doing so would be consistent
with the public interest.
This question might be moot -- Xcel has already submitted the projects for the Commission’s
public interest review – except for the manner in which Commission rules implement the statutory
requirement. In particular, Minn. R. 7825.1800(B) implements § 216B.50 by directing the utility
to provide details about the utility’s plans to finance the transaction through selling corporate
stock. Xcel states that it does not plan any stock sales related to this project in particular, and
therefore asks the Commission to vary the filing requirements of part 7825.1800(B).
The Department supports Xcel’s request to find the four proposals to be in the public interest, and
to grant the variance to part 7825.1800(B).
Having reviewed the trade secret data concerning the contract prices for property and plant Xcel
proposes to buy, the Commission finds Xcel’s proposals to be in the public interest. As previously
discussed, these projects will help Xcel fulfill its statutory requirements, achieve environmental
benefits, and save money for ratepayers.
The Commission may vary its rules when it finds that enforcing the rule would impose an
excessive burden, granting the variance would not adversely affect the public interest, and granting
the variance would not conflict with standards imposed by law. 23
Here, because Xcel does not plan to issue stock to finance these proposals, enforcing the rule would
require Xcel to attempt to respond to questions that simply are not applicable (e.g., stating the
“[p]urpose for which the securities are to be issued…” 24). The burden of addressing these questions
23
Minn. R. 7829.3200.
24
See Minn. R. 7825.1400(F), required by Minn. R. 7825.1800(B).
13
exceeds any benefit. And because the public derives no benefit from having Xcel generate
inapplicable answers to inapplicable questions, granting a variance would not harm the public interest.
Finally, there is no legal standard prohibiting the requested variance. For the foregoing reasons, the
Commission will grant Xcel’s request and vary the application of Minn. R. 7825.1800(B).
D.
Certificate of Need
Minn. Stat. § 216B.243 generally requires anyone proposing to build one or more generators at a
single site in Minnesota with a total capacity of 50 MW or more to first obtain a certificate of need
from the Commission. This statute would not apply to either the Border Winds or Courtenay wind
farms, which are to be built in North Dakota. And the Commission has already granted a certificate
of need for the Pleasant Valley project. 25 Consequently, out of the four projects proposed by Xcel,
only the Odell project would be subject to the requirement to secure a certificate of need.
Geronimo, the Odell project developer, seeks an exemption from the duty to obtain a certificate of
need. Geronimo notes that the statute exempts proposed wind turbines and wind farms from the
certificate of need requirement if the Commission determines that the generators would provide a
utility with a reasonable and prudent approach for meeting its obligations under Minn. Stat.
§ 216B.1691, the Renewable Energy Standards, after considering at least five specific factors. 26
The Commission reviews the five factors below:
(1)
The size of the facility relative to a utility's total need for renewable resources:
Xcel must acquire electricity from renewable sources sufficient to serve up to 30 percent of
the energy required by its Minnesota retail customers by 2020. Xcel estimates that it will
require an additional 1000 MW of electricity from wind power to meet this standard. 27
Xcel proposes to contract for 200 MW from the Odell project to help the utility meet its
obligations.
(2)
Alternative approaches for supplying the renewable energy to be supplied by the proposed
facility: Xcel states that it reviewed 57 alternative proposals before selecting the Odell
project.
(3)
The facility's ability to promote economic development: According to Geronimo, the Odell
project would employ more than 200 people during construction, create 13 jobs for
operators, and generate $39.8 million in direct community payments and an additional
$55 million during the construction phase, plus $1.5 million in recurring expenses.
(4)
The facility's ability to maintain electric system reliability: Before permitting a new
generator to connect to the transmission grid, MISO studies the connection and requires
whatever system upgrades would be necessary to maintain reliability. But in any event,
Xcel proposes the Odell project as a substitute source of energy, not generating capacity; in
25
See In the Matter of the Application of Pleasant Valley Wind LLC For a Certificate of Need For the 300
MW Pleasant Valley Project in Dodge and Mower Counties, Docket No. IP-6828/CN-09-937, Order
Granting a Certificate of Need (October 27, 2010).
26
Minn. Stat. § 216B.243, subd. 9.
27
Xcel petition at 11.
14
other words, Xcel would have other sources of generation available to meet its generation
capacity requirements. Consequently, system reliability would not be impaired by Odell’s
failure to deliver electricity, whether due to mechanical failure, congested transmission
lines, lack of wind, or any other cause.
(5)
Impacts on ratepayers: Xcel selected the Odell project over more than fifty others in part
due to the project’s low cost. Indeed, Xcel predicts that the Odell project would tend to
reduce ratepayer cost because it would displace the need for more expensive sources of
electricity.
Having considered these five factors, among others, the Commission finds that the Odell project
would provide Xcel with a reasonable and prudent approach for meeting its obligations under
Minn. Stat. § 216B.1691. Consequently the Commission will grant the exemption; Geronimo may
proceed to build its Odell project without a certificate of need.
E.
Cost Recovery
1.
Wind farm acquisition – Border Winds and Pleasant Valley
a.
Ownership, operation, and maintenance costs
The Chamber expresses concern that the financial risks of buying and operating wind farms are
greater than the risks of simply buying the power from wind farms owned by third parties. If Xcel
wishes to pursue a strategy of buying and operating wind farms, the Chamber recommends
establishing a cost-recovery formula that shifts a larger portion of the risk of unanticipated costs –
as well as the opportunity for unanticipated gains – from ratepayers to shareholders. To this end,
the Chamber asks the Commission to order Xcel to work out an agreement with the Chamber on
the details of such a cost-recovery formula before the Border Winds and Pleasant Valley projects
begin operations, or at least by 2015.
Xcel acknowledges the advantages of power purchase agreements, but also emphasizes the
advantages of ownership: a wind farm may generate electricity for longer than the term of a power
purchase agreement. Xcel argues that it has acquired suitable experience with wind turbines to
justify purchasing a portion of its wind power portfolio. And finally, Xcel argues for the
advantages of diversifying its resource portfolio by securing its supply of wind power through a
variety of legal arrangements.
The Commission is persuaded by Xcel’s arguments in favor of a diversified resource portfolio. But
the Commission finds no conflict between having a diverse resource portfolio and having a
cost-recovery formula that helps tie compensation to performance and helps shield ratepayers
from inappropriate risks. The Commission is open to reviewing such a formula. While the
Commission will decline to order Xcel to reach agreement with the Chamber, it will direct Xcel to
work with the Chamber on alternative cost-recovery formulas designed to allocate risk and create
incentives appropriately.
b.
Interconnection costs
While the proposed Courtenay and Odell power purchase agreements would not make Xcel liable
for interconnection cost overruns, Xcel might become liable for interconnection costs related to
buying the proposed Border Winds and Pleasant Valley projects.
15
Project developers regularly confront a challenge in estimating the cost of interconnecting new
generators to the transmission grid. Transmission capacity is finite, and entities that use the grid
must pay for the capacity they use. Because the grid changes with each new generator that comes
on-line, calculating the cost of the transmission capacity needed to connect a proposed generator to
the grid in the future is challenging. MISO will not allow a new generator to connect to the grid
until the generator has incurred the cost of upgrading the network as necessary to ensure system
reliability.
Xcel adopted different strategies for managing the interconnection risk associated with the Border
Winds and Pleasant Valley projects. Xcel negotiated the price terms of the proposed Pleasant
Valley contract with the benefit of interconnection cost studies performed separately by MISO and
Xcel. But in the Border Winds contract, Xcel agreed to bear a portion of the project’s
interconnection costs up to a cap; if costs would exceed the cap, Xcel would have the option of
cancelling the contract.
The Chamber, the Department, the Joint C-BED Intervenors, and Sorgo all express concern that
Xcel’s proposals might cause ratepayers to bear unwarranted transmission costs. The Department
declares that it will scrutinize Xcel’s proposals for recovering transmission costs. To facilitate this
review, the Department recommends that Xcel, when it files a request to recover costs associated
with the Pleasant Valley and Border Winds projects, clearly identify the amount of total
interconnection costs and provide documentation and a justification for the total amount proposed
to be included in rates. In contrast, the Joint C-BED Intervenors and Sorgo Fuels recommend
rejecting Xcel’s proposed projects outright -- or at least deferring action pending further discovery.
To reassure the parties that it will not seek to recover unwarranted interconnection costs associated
with the Border Winds project, Xcel proposes to seek prior Commission approval of any plans
either to incur transmission costs exceeding the capped amount, or to terminate the project due to
excessive interconnection costs.
As the parties note, utilities are barred from recovering imprudently incurred costs from
ratepayers. To enforce this policy, the Commission will adopt the Department’s recommendation.
That is, the Commission will direct Xcel, when filing a request to recover costs associated with the
Pleasant Valley and Border Winds projects, to clearly identify the amount of total interconnection
costs, and justify and document the amount proposed to be recovered from ratepayers.
Because the interconnection terms of the Border Winds proposal are unusual, the Commission
finds it prudent to adopt additional ratepayer safeguards. To that end, the Commission will accept
Xcel’s proposal in part. Specifically, the Commission will bar Xcel from recovering any
interconnection costs for the Border Winds project exceeding the cap set forth in the Border Winds
contract until Xcel files a request, and receives Commission approval, to recover the excess costs.
2.
Power purchase agreements – Courtenay and Odell
a.
Costs to comply with Renewable Energy Standards
When the Commission approves a utility’s power purchase contract or investment designed to
fulfill the Renewable Energy Standards or similar mandate under Minn. Stat. § 216B.145, the
utility may seek cost recovery under § 216B.1645, subd. 2. Xcel seeks to recover the cost of its
Courtenay and Odell power purchase agreements via the fuel clause. The Department supports
Xcel’s request, and no party opposed it.
16
The Commission concurs. Having determined that Xcel’s proposals warrant approval under Minn.
Stat. § 216B.1645, the Commission finds the costs of the Courtenay and Odell power purchase
agreements are eligible for recovery under Minn. Stat. § 216B.1645, subd. 2.
b.
Curtailment costs
A variety of circumstances can prevent a customer from receiving electricity from a wind turbine.
Generally a party that contracts for electricity from a wind turbine operator will negotiate how the
cost of each type of curtailment would be allocated between them.
Consistent with Xcel’s prior power purchase agreements, Geronimo would bear the cost if Xcel
fails to receive energy from the Courtenay and Odell projects due to the developer’s failure to
obtain the necessary permits, equipment failure, or extraordinary circumstances beyond either
party’s control (“force majeure”). And generally Xcel would bear the cost if the projects are
impeded from transmitting all of their energy because the transmission grid is too congested, or
because there is insufficient demand, or as otherwise required by MISO in the interest of
maintaining the reliability of the grid.
However, Geronimo proposes to connect the Odell project to the transmission grid in a region that
is, and will remain, prone to congestion until expensive transmission upgrades are complete.
Given these circumstances, Geronimo has agreed to bear the financial risk of MISO-required
curtailments until the grid is upgraded. Given the state of congestion in that region, Geronimo’s
concession provides an important and appropriate safeguard for ratepayers -- and underscores the
merits of Xcel’s selecting this project.
Finally, the Commission will provide ongoing monitoring to evaluate how often electricity from
the Courtenay and Odell projects is curtailed. To this end, the Commission will direct Xcel to
report the date and duration of any curtailment, the amount of any curtailment payments, and the
reason for the curtailment.
Specifically, the Commission will direct Xcel to report these events monthly in its fuel clause
filings, and again annually in its automatic adjustment filings. The fuel clause is a part of an energy
utility’s tariff that automatically adjusts a utility’s rates monthly to reflect changes in the utility’s
energy-related costs; any under- or over-recovery of fuel clause costs are then corrected via an
annual automatic adjustment of charges. 28 These energy-related filings provide an appropriate
forum for scrutinizing the projects’ curtailments. Monitoring these projects will permit the
Commission to ensure that ratepayers derive the benefits promised by these proposals.
ORDER
1.
The Joint C-BED Intervenors’ request for a contested case hearing is denied.
2.
The Joint C-BED Intervenors’ motion for an additional comment period or opportunity to
supplement their comments is denied.
28
Minn. R. 7825.2390 - .2920.
17
3.
The four proposals of Northern States Power Company d/b/a Xcel Energy qualify as a
reasonable and prudent approach to meeting its obligations under the Renewable Energy
Standards, Minn. Stat. § 216B.1691.
4.
Xcel’s Courtenay and Odell projects are eligible for cost recovery under Minn. Stat.
§ 216B.1645, subd. 2.
5.
Xcel’s acquisition of the Border Winds and Pleasant Valley projects is consistent with the
public interest under Minn. Stat. § 216B.50.
6.
The Commission varies Minn. R. 7825.1800(B) to eliminate the need to file the
information specified by that rule.
7.
Under Minn. Stat. § 216B.243, subd. 9, the Odell project is exempt from the need to obtain
a certificate of need.
8.
Xcel must not recover any transmission interconnection costs in excess of the cap included
in the Border Winds project contracts until Xcel requests and receives Commission
approval for this recovery.
9.
When Xcel submits a filing for cost recovery associated with the Pleasant Valley and
Border Winds projects, Xcel shall clearly identify the amount of total interconnection costs
and provide documentation and a justification for the total amount proposed to be included
in rates.
10.
By the earlier of a) January 1, 2015, or b) the date Pleasant Valley and Border Winds
projects begin providing service, Xcel shall work with the Minnesota Chamber of
Commerce on a cost recovery incentive mechanism.
11.
Xcel shall report in its monthly fuel clause filings and annual automatic adjustment filings
the date and duration of any curtailment, the amount of any curtailment payments, and the
reason for the curtailment.
12.
This order shall become effective immediately.
BY ORDER OF THE COMMISSION
Burl W. Haar
Executive Secretary
This document can be made available in alternative formats (e.g., large print or audio) by calling
651.296.0406 (voice). Persons with hearing loss or speech disabilities may call us through their
preferred Telecommunications Relay Service.
18
CERTIFICATE OF SERVICE
I, Margie DeLaHunt, hereby certify that I have this day, served a true and correct copy of the following
document to all persons at the addresses indicated below or on the attached list by electronic filing, electronic
mail, courier, interoffice mail or by depositing the same enveloped with postage paid in the United States
mail at St. Paul, Minnesota.
Minnesota Public Utilities Commission
ORDER APPROVING ACQUISITIONS WITH CONDITIONS
Docket Number E-002/M-13-603 and E-002/M-13-716
Dated this 13th day of December, 2013
/s/ Margie DeLaHunt
First Name
Last Name
Email
Address
Delivery Method
View Trade Secret
Service List Name
Julia
Anderson
Julia.Anderson@ag.state.m Office of the Attorney
n.us
General-DOC
Company Name
1800 BRM Tower
445 Minnesota St
St. Paul,
MN
551012134
Electronic Service
Yes
OFF_SL_13-603_Official
Christina
Brusven
cbrusven@fredlaw.com
200 S 6th St Ste 4000
Electronic Service
No
OFF_SL_13-603_Official
Electronic Service
No
OFF_SL_13-603_Official
Electronic Service
No
OFF_SL_13-603_Official
Fredrikson & Byron, P.A.
Minneapolis,
MN
554021425
Sharon
Ferguson
sharon.ferguson@state.mn Department of Commerce
.us
85 7th Place E Ste 500
Saint Paul,
MN
551012198
Benjamin
Gerber
bgerber@mnchamber.com Minnesota Chamber of
Commerce
400 Robert Street North
Suite 1500
St. Paul,
Minnesota
55101
Burl W.
Haar
burl.haar@state.mn.us
Public Utilities Commission Suite 350
121 7th Place East
St. Paul,
MN
551012147
Electronic Service
Yes
OFF_SL_13-603_Official
S Mike
Holly
4358@brainerd.net
Sorgo Fuels and
Chemicals, Inc.
Electronic Service
No
OFF_SL_13-603_Official
34332 Sunrise Blvd
Crosslake,
MN
56442
John
Lindell
agorud.ecf@ag.state.mn.us Office of the Attorney
General-RUD
1400 BRM Tower
445 Minnesota St
St. Paul,
MN
551012130
Electronic Service
Yes
OFF_SL_13-603_Official
Thomas
Melone
Thomas.Melone@AllcoUS. Ecos Energy, LLC
com
222 South 9th Street
Suite 1600
Minneapolis,
Minnesota
55120
Electronic Service
No
OFF_SL_13-603_Official
SaGonna
Thompson
Regulatory.Records@xcele Xcel Energy
nergy.com
414 Nicollet Mall FL 7
Electronic Service
Yes
OFF_SL_13-603_Official
Electronic Service
No
OFF_SL_13-603_Official
Minneapolis,
MN
554011993
Paul
White
paul.white@prcwind.com
Project Resources
Corp./Tamarac Line
LLC/Ridgewind
618 2nd Ave SE
Minneapolis,
MN
55414
First Name
Last Name
Email
Company Name
David
Aafedt
daafedt@winthrop.com
Winthrop & Weinstine, P.A. Suite 3500, 225 South
Sixth Street
Address
Delivery Method
View Trade Secret
Service List Name
Electronic Service
No
OFF_SL_13-716_M-13-716
Electronic Service
No
OFF_SL_13-716_M-13-716
Minneapolis,
MN
554024629
Christopher
Anderson
canderson@allete.com
Minnesota Power
30 W Superior St
Duluth,
MN
558022191
Julia
Anderson
Julia.Anderson@ag.state.m Office of the Attorney
n.us
General-DOC
1800 BRM Tower
445 Minnesota St
St. Paul,
MN
551012134
Electronic Service
Yes
OFF_SL_13-716_M-13-716
James J.
Bertrand
james.bertrand@leonard.c
om
150 South Fifth Street,
Suite 2300
Electronic Service
No
OFF_SL_13-716_M-13-716
Leonard Street & Deinard
Minneapolis,
MN
55402
Michael
Bradley
mike.bradley@lawmoss.co Moss & Barnett
m
Suite 4800
90 S 7th St
Minneapolis,
MN
55402-4129
Electronic Service
No
OFF_SL_13-716_M-13-716
Christina
Brusven
cbrusven@fredlaw.com
200 S 6th St Ste 4000
Electronic Service
No
OFF_SL_13-716_M-13-716
Electronic Service
No
OFF_SL_13-716_M-13-716
Electronic Service
No
OFF_SL_13-716_M-13-716
Fredrikson & Byron, P.A.
Minneapolis,
MN
554021425
Jeffrey A.
Daugherty
jeffrey.daugherty@centerp
ointenergy.com
CenterPoint Energy
800 LaSalle Ave
Minneapolis,
MN
55402
Dustin
Denison
dustin@appliedenergyinno
vations.org
Applied Energy Innovations 4000 Minnehaha Ave S
Minneapolis,
MN
55406
Ian
Dobson
ian.dobson@ag.state.mn.u Office of the Attorney
s
General-RUD
Antitrust and Utilities
Electronic Service
Division
445 Minnesota Street, 1400
BRM Tower
St. Paul,
MN
55101
Yes
OFF_SL_13-716_M-13-716
Sharon
Ferguson
sharon.ferguson@state.mn Department of Commerce
.us
85 7th Place E Ste 500
No
OFF_SL_13-716_M-13-716
Saint Paul,
MN
551012198
Electronic Service
First Name
Last Name
Email
Company Name
Address
Delivery Method
View Trade Secret
Service List Name
John
Flumerfelt
jflumerfelt@calpine.com
CalpineCorporation
500 Delaware Ave.
Electronic Service
No
OFF_SL_13-716_M-13-716
Wilmington,
DE
19801
Benjamin
Gerber
bgerber@mnchamber.com Minnesota Chamber of
Commerce
400 Robert Street North
Suite 1500
St. Paul,
Minnesota
55101
Electronic Service
No
OFF_SL_13-716_M-13-716
Elizabeth
Goodpaster
bgoodpaster@mncenter.or MN Center for
g
Environmental Advocacy
Suite 206
26 East Exchange Street
St. Paul,
MN
551011667
Electronic Service
No
OFF_SL_13-716_M-13-716
Lloyd
Grooms
lgrooms@winthrop.com
Winthrop and Weinstine
Suite 3500
225 South Sixth Street
Minneapolis,
MN
554024629
Electronic Service
No
OFF_SL_13-716_M-13-716
Burl W.
Haar
burl.haar@state.mn.us
Public Utilities Commission Suite 350
121 7th Place East
St. Paul,
MN
551012147
Electronic Service
Yes
OFF_SL_13-716_M-13-716
Patrick
Hentges
City Of Mankato
Paper Service
No
OFF_SL_13-716_M-13-716
Electronic Service
No
OFF_SL_13-716_M-13-716
P.O. Box 3368
Mankato,
MN
560023368
S Mike
Holly
4358@brainerd.net
Sorgo Fuels and
Chemicals, Inc.
34332 Sunrise Blvd
Crosslake,
MN
56442
Alan
Jenkins
aj@jenkinsatlaw.com
Jenkins at Law
2265 Roswell Road
Suite 100
Marietta,
GA
30062
Electronic Service
No
OFF_SL_13-716_M-13-716
Richard
Johnson
Rick.Johnson@lawmoss.co Moss & Barnett
m
90 South 7th Street
Suite #4800
Minneapolis,
MN
554024129
Electronic Service
No
OFF_SL_13-716_M-13-716
Mark J.
Kaufman
mkaufman@ibewlocal949.o IBEW Local Union 949
rg
12908 Nicollet Avenue
South
Electronic Service
No
OFF_SL_13-716_M-13-716
Burnsville,
MN
55337
2
First Name
Last Name
Email
Company Name
Address
Delivery Method
View Trade Secret
Service List Name
Hank
Koegel
hank.koegel@edf-re.com
EDF Renewable Eenrgy
10 2nd St NE Ste 400
Electronic Service
No
OFF_SL_13-716_M-13-716
Paper Service
No
OFF_SL_13-716_M-13-716
Minneapolis,
MN
55413-2652
Thomas G.
Koehler
N/A
Local Union #160, IBEW
2909 Anthony Ln
Minneapolis,
MN
55418-3238
Michael
Krikava
mkrikava@briggs.com
Briggs And Morgan, P.A.
2200 IDS Center
80 S 8th St
Minneapolis,
MN
55402
Electronic Service
No
OFF_SL_13-716_M-13-716
Douglas
Larson
dlarson@dakotaelectric.co
m
Dakota Electric Association 4300 220th St W
Electronic Service
No
OFF_SL_13-716_M-13-716
Farmington,
MN
55024
John
Lindell
agorud.ecf@ag.state.mn.us Office of the Attorney
General-RUD
1400 BRM Tower
445 Minnesota St
St. Paul,
MN
551012130
Electronic Service
Yes
OFF_SL_13-716_M-13-716
Pam
Marshall
pam@energycents.org
823 7th St E
Electronic Service
No
OFF_SL_13-716_M-13-716
Electronic Service
No
OFF_SL_13-716_M-13-716
Energy CENTS Coalition
St. Paul,
MN
55106
Daryl
Maxwell
dmaxwell@hydro.mb.ca
Manitoba Hydro
360 Portage Ave FL 16
PO Box 815, Station Main
Winnipeg,
Manitoba
R3C 2P4
Thomas
Melone
Thomas.Melone@AllcoUS. Ecos Energy, LLC
com
222 South 9th Street
Suite 1600
Minneapolis,
Minnesota
55120
Electronic Service
No
OFF_SL_13-716_M-13-716
Brian
Meloy
brian.meloy@leonard.com
150 S 5th St Ste 2300
Electronic Service
No
OFF_SL_13-716_M-13-716
Electronic Service
No
OFF_SL_13-716_M-13-716
Canada
Leonard, Street & Deinard
Minneapolis,
MN
55402
Andrew
Moratzka
apmoratzka@stoel.com
Stoel Rives LLP
33 South Sixth Street
Suite 4200
Minneapolis,
MN
55402
3
First Name
Last Name
Email
Alan
Muller
amuller@dca.net
Company Name
Address
Delivery Method
View Trade Secret
Service List Name
113 W. 8th Street
Paper Service
No
OFF_SL_13-716_M-13-716
Red Wing,
MN
55066
David W.
Niles
david.niles@avantenergy.c Minnesota Municipal Power Suite 300
om
Agency
200 South Sixth Street
Minneapolis,
MN
55402
Electronic Service
No
OFF_SL_13-716_M-13-716
Carol A.
Overland
overland@legalectric.org
Legalectric - Overland Law 1110 West Avenue
Office
Red Wing,
MN
55066
Electronic Service
No
OFF_SL_13-716_M-13-716
Joshua
Pearson
N/A
enXco, Inc.
Paper Service
No
OFF_SL_13-716_M-13-716
Paper Service
No
OFF_SL_13-716_M-13-716
26 E Exchange St, Ste 206 Paper Service
No
OFF_SL_13-716_M-13-716
Electronic Service
No
OFF_SL_13-716_M-13-716
15445 Innovation Drive
San Diego,
CA
92128
Joseph V.
Plumbo
Local Union 23, I.B.E.W.
932 Payne Avenue
St. Paul,
MN
55130
Kevin
Reuther
kreuther@mncenter.org
MN Center for
Environmental Advocacy
St. Paul,
MN
551011667
Richard
Savelkoul
rsavelkoul@martinsquires.c Martin & Squires, P.A.
om
332 Minnesota Street Ste
W2750
St. Paul,
MN
55101
Ken
Smith
ken.smith@districtenergy.c District Energy St. Paul Inc. 76 W Kellogg Blvd
om
St. Paul,
MN
55102
Electronic Service
No
OFF_SL_13-716_M-13-716
Ron
Spangler, Jr.
rlspangler@otpco.com
215 So. Cascade St.
PO Box 496
Fergus Falls,
MN
565380496
Electronic Service
No
OFF_SL_13-716_M-13-716
Byron E.
Starns
byron.starns@leonard.com Leonard Street and
Deinard
150 South 5th Street
Suite 2300
Minneapolis,
MN
55402
Electronic Service
No
OFF_SL_13-716_M-13-716
Otter Tail Power Company
4
First Name
Last Name
Email
Company Name
Address
Delivery Method
View Trade Secret
Service List Name
James M.
Strommen
jstrommen@kennedygraven.com
Kennedy & Graven,
Chartered
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis,
MN
55402
Electronic Service
No
OFF_SL_13-716_M-13-716
Eric
Swanson
eswanson@winthrop.com
Winthrop Weinstine
225 S 6th St Ste 3500
Capella Tower
Minneapolis,
MN
554024629
Electronic Service
No
OFF_SL_13-716_M-13-716
SaGonna
Thompson
Regulatory.Records@xcele Xcel Energy
nergy.com
414 Nicollet Mall FL 7
Electronic Service
No
OFF_SL_13-716_M-13-716
316d Ruttan Hall
1994 Buford Avenue
St. Paul,
MN
55108
Electronic Service
No
OFF_SL_13-716_M-13-716
414 Nicollet Mall FL 5
Electronic Service
Yes
OFF_SL_13-716_M-13-716
Minneapolis,
MN
554011993
Douglas
Tiffany
tiffa002@umn.edu
University of Minnesota
Kari L
Valley
kari.l.valley@xcelenergy.co Xcel Energy Service Inc.
m
Minneapolis,
MN
55401
Lisa
Veith
lisa.veith@ci.stpaul.mn.us
City of St. Paul
400 City Hall and
Courthouse
15 West Kellogg Blvd.
St. Paul,
MN
55102
Electronic Service
No
OFF_SL_13-716_M-13-716
Paul
White
paul.white@prcwind.com
Project Resources
Corp./Tamarac Line
LLC/Ridgewind
618 2nd Ave SE
Electronic Service
No
OFF_SL_13-716_M-13-716
Greater Mankato Growth
1961 Premier Dr Ste 100
Paper Service
No
OFF_SL_13-716_M-13-716
Jonathan G.
Zierdt
N/A
Minneapolis,
MN
55414
Mankato,
MN
56001
5
PUBLIC – EXHIBIT N
Redacted Proposed Accounting Entries
CONFIDENTIAL AND PRIVILEGED INFORMATION HAS BEEN
REMOVED FOR PRIVILEGED TREATMENT
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Northern States Power Company,
A Minnesota Corporation
Border Winds Energy, LLC
Pleasant Valley Wind, LLC
)
)
)
)
)
)
Docket No. EC14-_______-000
NOTICE OF FILING
(____________, 2014)
Take notice that on January 30, 2014, Northern States Power Company, a Minnesota
corporation (“NSPM”), requested authorization from the Federal Energy Regulatory
Commission (“Commission”) to acquire, and Border Winds Energy, LLC and Pleasant Valley
Wind, LLC requested authorization from the Commission to dispose of, certain jurisdictional
facilities.
Any person desiring to intervene or to protest this filing should file with the Federal
Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426, in accordance
with Rules 211 and 214 of the Commission’s Rules of Practice and Procedure (18 C.F.R.
385.211 and 385.214). Protests will be considered by the Commission in determining the
appropriate action to be taken, but will not serve to make protestants Parties to the proceeding.
Any person wishing to become a Party must file a motion to intervene. All such motions or
protests should be filed on or before the comment date, and, to the extent applicable, must be
served on the applicant and on any other person designated on the official service list. This filing
is available for review at the Commission or may be viewed on the Commission’s web site at
http://www.ferc.gov using the “RIMS” link, select “Docket #” and follow the instructions (call
202-208-2222 for assistance). Protests and interventions may be filed electronically via the
Internet in lieu of paper; see 18 C.F.R. 385.2001(a)(1)(iii) and the instructions on the
Commission’s web site under the “e-Filing” link.
Comment Date: _______________, 2014
Kimberly D. Bose
Secretary