POWER PURCHASE AGREEMENT
Between
insert details
(Registration number insert details)
and
ETHEKWINI MUNICIPALITY
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2
INDEX
1
DEFINITIONS ....................................................................................................................... 3
2
BASIS OF AGREEMENT ..................................................................................................... 5
3
DURATION .......................................................................................................................... 5
4
CONDITION PRECEDENT................................................................................................... 5
5
SALE AND PURCHASE OF ELECTRICITY ........................................................................ 6
6
EMBEDDED GENERATOR’S OBLIGATIONS ..................................................................... 6
7
DISTRIBUTOR’S OBLIGATIONS ........................................................................................ 6
8
METERING .......................................................................................................................... 7
9
INVOICING AND PAYMENT ................................................................................................ 7
10
VALUE ADDED TAX ........................................................................................................ 8
11
FORCE MAJEURE ........................................................................................................... 8
12
DISPUTE RESOLUTION ................................................................................................ 10
13
MISCELLANEOUS PROVISIONS .................................................................................. 10
14
NOTICES........................................................................................................................ 10
15
COSTS ........................................................................................................................... 11
16
WARRANTY BY SIGNATORIES.................................................................................... 11
ANNEXURE A ........................................................................................................................... 13
ANNEXURE B ........................................................................................................................... 14
ANNEXURE C…………………………………………………………………………………...………. 15
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1
DEFINITIONS
1.1
In this agreement, the following words shall bear the following meanings:1.1.1
“this agreement” means this agreement and the annexures thereto;
1.1.2
“Business Day” means a day, other than a Saturday or a Sunday or an official public
holiday in South Africa;
1.1.3
“Connection Application” means the Application for the Connection of Embedded
Generation submitted by the Embedded Generator to the Distributor in the required form
attached as annexure A;
1.1.4
“the Distributor” means ETHEKWINI MUNICIPALITY, a municipality formed in
accordance with the Local Government: Municipal Structures Act No. 117 of 1998, which
carries on business at 1 Jelf Taylor Crescent, Durban;
1.1.5
“Effective Date” means the date on which this agreement is signed by the last party
doing so;
1.1.6
“Embedded Generator” means insert details registered in accordance with the laws of
the Republic of South Africa, (registration number insert details), which carries on
business at insert details;
1.1.7
“Export” means to supply to the System and “exported” has a corresponding meaning;
1.1.8
“the Facility” means the plant at which the Embedded Generator generates electricity
situated at insert details, comprising all plant, machinery and equipment, including all
interconnection facilities up to the nearest point of connection to the System owned
and/or operated by the Embedded Generator, which plant will have the following export
capacity:
1.1.9
1.1.8.1
insert details;
1.1.8.2
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“Import” means to receive from the System and “imported” has a corresponding
meaning;
1.1.10 “Metering Installation” means an installation at the Point of Common Coupling for the
purposes of measuring electricity exported by the Embedded Generator , comprising an
electronic main meter and an electronic check meter;
1.1.11 “Month” means a calendar month;
1.1.12 “NERSA” means the National Energy Regulator of South Africa established in terms of
the National Energy Regulator Act, (Act 4 of 2004), or its legal successor;
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1.1.13 “NRS 048’ means the Code of Practice for Electricity Supply - Quality of Supply, issued
by the South African Bureau of Standards, as revised or replaced from time to time;
1.1.14 “NRS 057’ means the Code of Practice for Electricity Metering for Residential and
Commercial Customers, issued by the South African Bureau of Standards, as revised or
replaced from time to time;
1.1.15 “NRS 097’ means the Code of Practice for Grid Interconnection of Embedded
Generation, as revised or replaced from time to time;
1.1.16 “Point of Common Coupling” means the physical point where the electricity is to be
exported by the Embedded Generator and metered by the Distributor as described in
Annexure A;
1.1.17 “System” means the distribution system operated by the Distributor to which the Facility
will be connected;
1.1.18 “System Operating Procedures” means the written documents and guidelines that
describe best practice procedures to ensure the correct and safe operation of the System
annexed hereto as annexure D; and
1.1.19 “VAT” means value-added tax payable in terms of the Value Added Tax Act 89 of 1991.
1.2
Clause headings in this agreement are for convenience only and shall not be taken into account
in the interpretation hereof.
1.3
Words denoting a particular gender shall be deemed to include the other genders, words
denoting natural persons shall be deemed to include corporate bodies and associations of
persons, and words denoting the singular shall be deemed to include the plural, and vice versa.
1.4
If any provision in a definition is a substantive provision conferring rights or imposing obligations
on any party, notwithstanding that it is only in the definition clause, effect shall be given to it as if it
were a substantive provision in the body of the agreement.
1.5
When any number of days is prescribed in this agreement, same shall be reckoned exclusively of
the first and inclusively of the last day unless the last day is not a business day (a business day
being a calendar day excluding a Saturday, Sunday or public holiday in the Republic of South
Africa) in which case the last day shall be the next succeeding business day.
1.6
Where figures are referred to in numerals and in words, if there is any conflict between the two,
the words shall prevail.
1.7
Definitions and expressions defined in this agreement shall bear the same meanings in schedules
or annexures to this agreement which do not themselves contain their own definitions.
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1.8
References to "including" and "in particular" shall not be construed restrictively but shall mean
"including, without limitation to the generality of the foregoing" and "in particular, but without
limitation to the generality of the foregoing" respectively;
1.9
Any reference to any Act is to such Act as at the date of last signature hereof and shall be
deemed to include also a reference to any such Act as amended or re-enacted from time to time.
1.10
The terms of this agreement having been negotiated, the contra proferentem rule (i.e. the rule of
construction that in the event of ambiguity an agreement shall be interpreted against the party
responsible for the drafting or preparation thereof) shall not be applied in the interpretation of this
agreement.
2
BASIS OF AGREEMENT
2.1
It is recorded that, as at the Effective Date, the Embedded Generator will be in a position to
produce electricity at the Facility which is surplus to its own needs.
2.2
With effect from the Effective Date, the Embedded Generator wishes to sell and the Distributor
wishes to purchase metered electricity at the Point of Common Coupling generated by the Facility
on the terms and conditions contained in this agreement.
2.3
This agreement constitutes the connection agreement referred to in the Connection Application.
2.4
The terms and conditions set out in the approved Connection Application shall be deemed to be
incorporated in this agreement. (Refer to Annexure A)
3
DURATION
3.1
This agreement shall commence on the Effective Date and shall continue thereafter for a period
of 3 (three) years (“the Initial Period”) unless terminated by either party in accordance with the
terms of this agreement.
3.2
Provided that it is not in breach of this agreement, the Embedded Generator together with the
Distributor shall have the option to renew this agreement for a further period of 3 (three) years on
the same terms and conditions, subject to compliance with legislative requirements and authority
being obtained from the eThekwini Municipal Council and/or National Treasury for this agreement
to extend beyond the Initial Period.
3.3
If the Embedded Generator wishes to exercise the option to renew aforesaid, the Embedded
Generator shall give the Distributor written notice of its intention to do so not less than 6 (six)
months prior to the expiry of the Initial Period, failing which the option to renew shall lapse and be
of no further force and effect.
4
CONDITION PRECEDENT
If the Embedded Generator is not granted a cogeneration licence by NERSA, either party may
elect to resile from this agreement upon 30 (thirty) days’ written notice to the other.
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5
SALE AND PURCHASE OF ELECTRICITY
5.1
Subject to System conditions, the Distributor hereby undertakes to purchase and the Embedded
Generator undertakes to sell, with effect from the Effective Date, all such metered electricity as
the Embedded Generator will make available (subject to clause Error! Reference source not
found.) for export at the Point of Common Coupling at the rates set out in Annexure C, duly
adjusted from time to time in accordance with item number 3 thereof.
5.2
It is recorded that the rates payable to the Embedded Generator shall not exceed the rates as
payable to Eskom (Megaflex - Local Authority Rates / > 132kV / 300-600km tariff structure or
closest equivalent in the event that the Megaflex rate no longer exists.)
5.3
The Distributor has the right to monitor the Embedded Generator and measure compliance with
all regulatory standards. Where an instance of non-compliance exists, the Embedded Generator
shall remedy the non compliance within a reasonable timeframe prior to any further electricity
being exported.
6
EMBEDDED GENERATOR’S OBLIGATIONS
6.1
The Embedded Generator shall operate the Facility in accordance with all applicable laws, bylaws, regulations and orders and requirements of NERSA or any other competent authority,
affecting or which may affect the conduct by the Embedded Generator of its activities or the
fulfilment of its obligations, including NRS 048 and NRS 097 and any other relevant standards.
6.2
The Embedded Generator shall comply with the terms and conditions set out in the approved
Connection Application so as to ensure that the operation of the Facility will not have an adverse
effect on the System.
6.3
The Embedded Generator shall be responsible for any damages caused by the generation plant
to the Distributor’s network.
6.4
The Embedded Generator shall be responsible for the costs of all work and equipment required in
providing a connection between the Facility and the System.
6.5
The Embedded Generator shall comply with all System Operating Procedures agreed to between
the parties.
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DISTRIBUTOR’S OBLIGATIONS
7.1
The Distributor shall at all material times provide, at the cost of the Embedded Generator:
7.2
7.1.1
a connection between the Facility and the System;
7.1.2
the Metering Installation.
The Distributor shall take all reasonable steps to enable the Embedded Generator to export
electricity from the Facility.
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7.3
The Distributor shall provide half-hourly metering data obtained from the Metering Installation to
the Embedded Generator on a Monthly basis.
7.4
The Distributor shall pay for the electricity exported by the Embedded Generator in accordance
with the rates set out in Annexure C and by the dates as set out in clause 9 below.
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METERING
8.1
The Metering Installation shall measure the electricity imported and exported by the Embedded
Generator at the Point of Common Coupling pursuant to this agreement.
8.2
The Metering Installation shall be managed by the Distributor in accordance to NRS 057.
8.3
The Distributor shall provide the Embedded Generator with the meter test report from the meter
manufacturer upon installation of the meters.
8.4
The Embedded Generator shall not, and shall ensure that its contractors shall not, interfere in any
manner whatsoever with the functioning of the Metering Installation save in the course of an
inspection, testing, maintenance or agreed adjustment in the presence of duly authorised
representatives of both parties.
8.5
The Distributor shall be responsible for interrogating and retrieving data from the Metering
Installation and to that end shall collect all meter readings from both the main meter and the
check meter included in the Metering Installation.
8.6
Account billing will be based on the main meter reading unless there is a discrepancy greater
than 2% between the main and check meter readings. In this event, the main meter readings
shall be normalised using the check meter readings to reflect the true reading.
8.7
In the event of a total failure of the main meter then the check meter data shall be used.
8.8
Metering will be of the bi-directional, 4-quadrant type in line with NRS 057.
8.9
The cost of upgrading existing meters and metering equipment shall be for the account of the
Embedded Generator.
9
INVOICING AND PAYMENT
9.1
The Distributor shall incorporate the metering data into a report setting out the electricity delivered
by the Embedded Generator to the System during a particular Month, and shall deliver such
report to the email address nominated in writing by the Embedded Generator by the 9th (ninth)
day of the following Month, for verification.
9.2
If the Embedded Generator agrees with the data in the report, the Embedded Generator shall
provide the Distributor with a valid tax invoice for payment based on the rates set out in Annexure
C.
9.3
If the Embedded Generator disputes the accuracy of the report, the parties shall attempt to
resolve the dispute, by re-interrogating the metering data and recalculating the report, failing
which the matter shall be dealt with in accordance with clause 12 below.
9.4
The Distributor shall pay the amount set out in the tax invoice within 21 (twenty-one) Business
Days from the day the invoice is received.
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9.5
Should the Distributor dispute an amount stated in any invoice, the Distributor shall:
9.5.1
serve notice on the Embedded Generator specifying the amount and basis of the dispute;
and
9.5.2
pay the amount to which both parties agree to by the due date, failing which the
provisions of clause 12 shall apply
9.6
Where the Embedded Generator has overcharged the Distributor and the Distributor has paid
such overcharged amount, the Embedded Generator will reimburse the Distributor by crediting
the next invoice with such overcharged amount
9.7
Where the Embedded Generator has undercharged the Distributor, the Embedded Generator
shall debit the subsequent invoice with the amount undercharged and such amount shall be paid
by the Distributor.
9.8
The Embedded Generator shall pay for electricity imported in accordance with the prevailing
Municipal Industrial Time of use tariff (ITOU) structure and rates including all fixed and mandatory
network charges as detailed in Annexure B, it being recorded that the fixed network access
charge is based on the highest kVA that may be imported or exported and that the fixed service
charge is payable irrespective of whether electricity is imported or exported.
9.9
The Embedded Generator shall receive a municipal account for payment of imported electricity
and related fixed charges.
9.10
Interest shall be payable by each party to the other on any overdue amounts at 0.5% per annum
above the prevailing publicly quoted prime overdraft rate charged by the Standard Bank of South
Africa from time to time, calculated and compounded monthly in arrear from due date to date of
payment.
10
VALUE ADDED TAX
Unless indicated to the contrary, the amounts payable in terms of this agreement are exclusive of
VAT, and in addition to such amounts each party shall pay to the other VAT at the prevailing rate
from time to time in terms of the Value-Added Tax Act 89 of 1991.
11
FORCE MAJEURE
11.1
In this clause the expression “force majeure” means any cause beyond the control of a party
and for which it is not responsible, which, if qualifying as such, shall include, but not be limited to:
11.1.1 acts of God, earthquake, fire, explosion, flood, frost, tempest, drought, cyclone, hail, pest,
disease, epidemic, and impassable public road conditions;
11.1.2 orders, decrees or restraints or acts of Government or military authority or any other
competent authority (but excluding the cancellation or suspension of any permits,
licences or authorities caused by or attributable to any breach of this agreement or the
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fault or neglect of the Embedded Generator or its employees or agents), war (whether
declared or not), civil disorder and boycotts, sabotage, civil commotion and riots;
11.1.3 strikes and other industrial disputes or labour unrest or disputes strikes, or lock-outs
(which are not provoked or prolonged by or is attributable to any unreasonable action or
omission on the part of the management of the affected party);
11.1.4 plant or machinery or other installation malfunctions or break-downs,
provided that inability to meet any obligation hereunder because of lack of funds, or lack of
maintenance of vehicles or plant or machinery, shall under no circumstances be treated as an
event of force majeure.
11.2
In the event that either party is rendered unable to carry out the whole or any part of its
obligations under this agreement by reason of an event of force majeure, the performance of the
obligations hereunder of the party affected thereby shall be excused for the duration of, and to the
extent caused by such inability, and the party affected thereby shall not be liable for any loss or
damage resulting therefrom.
11.3
The party claiming any such inability shall, when that party:
11.3.1 knows that it is likely to occur, and when it occurs, as soon as is practical thereafter, notify
the other party thereof, which notification shall be confirmed in writing;
11.3.2 knows that it is likely to terminate, and when it does terminate, as soon as is practical,
notify the other party thereof, which notification shall be confirmed in writing.
11.4
Should any occurrence as referred to above arise, then:
11.4.1 the parties shall co-operate with each other and use all reasonable efforts to overcome,
or failing which, to minimise the effect of such inability (provided that the party claiming
such inability shall not be obliged to settle labour disputes) and provided that
performance by the affected party of its obligations in terms of this agreement shall be
resumed as soon as is reasonably practicable after the disability has ceased;
11.4.2 during any period in which a party hereto is prevented from fulfilling any of its obligations
hereunder, the other party shall be entitled to take such steps as may be reasonably
necessary in the circumstances, to deal with the situation as it may deem fit, in order to
meet the requirements in the normal and ordinary course of its operations, but shall have
no claim against the party affected thereby, whether for damages, loss of profits or
otherwise.
11.5
Notwithstanding anything to the contrary contained herein, if either party is precluded by an event
of force majeure from fulfilling its obligations for a period of more than 90 (ninety) days, then the
other party shall be entitled, but not obliged to cancel this agreement, but shall not be entitled to
claim damages as a result of such cancellation.
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12
DISPUTE RESOLUTION
12.1
Save as otherwise provided herein, if any dispute arises between the parties in relation to any
matter pertaining to this agreement, such dispute shall be referred in the first instance to the
Head: Electricity and Managing Director of the Embedded Generator or their respective
nominees, at the written request of any party, who shall meet and endeavour to resolve the
dispute amicably.
12.2
If the dispute remains unresolved within 14 (fourteen) days after referral to the Head: Electricity
and Managing Director of the Embedded Generator or their respective nominees in terms of
clause 12.1, then such dispute shall be referred to NERSA for resolution.
13
MISCELLANEOUS PROVISIONS
13.1
Neither party shall be entitled to cede or assign any of its rights and obligations in terms of this
agreement without the prior written consent of the other party/parties, which consent will not
unreasonably be withheld.
13.2
This agreement constitutes the sole record of the agreement between the parties in regard to the
subject matter hereof.
13.3
No party shall be bound by any express or implied term, representation, warranty, promise or the
like not recorded herein.
13.4
No addition to, variation or consensual cancellation of this agreement shall be of any force or
effect unless in writing and signed by or on behalf of the parties.
13.5
No indulgence which either of the parties ("grantor") may grant to the other ("grantee") shall
constitute a waiver of any of the rights of the grantor, which shall not hereby be precluded from
exercising any rights against the grantee which may have arisen in the past or which might arise
in the future.
14
NOTICES
14.1
All notices by one party to the other shall be given in writing by prepaid registered post, telefax or
delivered by hand –
14.1.1 to the Distributor at:Physical Address:
Telefax no:
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Marked for the attention of:
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Email:
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Postal Address:
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14.1.2 to the Embedded Generator at
Physical Address:
insert details
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Postal Address:
insert details
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Telefax no:
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Marked for the attention of:
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Email:
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CC to:
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which physical addresses the parties choose as their respective domicilia citandorum et
executandorum.
14.2
In the absence of proof to the contrary, any notice sent by one party to another:14.2.1 by registered post, shall be deemed to have been received five (5) days after it is posted;
14.2.2 by hand, shall be deemed to have been received on the date of delivery;
14.2.3 by telefax or email, shall be deemed to have been received on the next business day
after it is successfully transmitted.
14.3
The parties shall be entitled to change the addresses referred to herein above from time to time
provided that any such change shall only become effective upon receipt of notice in writing by the
other party of such change.
14.4
Notwithstanding anything to the contrary herein contained, a written notice or communication
actually received by a party shall constitute adequate notice to it notwithstanding that it was not
sent to or delivered at its chosen domicilium citandi et executandi.
15
COSTS
15.1
Each party shall pay its own costs of preparation, drafting, settling and signature of this
agreement.
15.2
Any costs incurred by a party in connection with or arising out of the breach of this agreement by
the other party shall be borne by the party in breach.
16
WARRANTY BY SIGNATORIES
Each of the signatories to this agreement hereby warrants that he is duly authorised to conclude
this agreement by the party on whose behalf he appends his signature hereunder, and that such
party is duly authorised to enter into this agreement.
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SIGNED at __________________ on this _____ day of _______________ 2012
AS WITNESSES:
1. _________________________
_____________________________________
For: insert details
insert details
insert details
2. _________________________
SIGNED at ________________ on this _____ day of ________________ 2012
AS WITNESSES:
1. _________________________
_____________________________________
For: ETHEKWINI MUNICIPALITY
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2. _________________________
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ANNEXURE A
CONNECTION APPLICATION
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ANNEXURE B
TARIFF STRUCTURE
INDUSTRIAL TIME OF USE – APPLICABLE FOR ELECTRICITY IMPORTED
INDUSTRIAL TIME OF USE TARIFF (ITOU) – 2011/2012
Peak
183.91
c/kWh
52.64
c/kWh
Off-Peak
31.11
c/kWh
Peak
55.94
c/kWh
Standard
HIGH DEMAND SEASON
June - August
Standard
LOW DEMAND SEASON
36.82
c/kWh
Off-Peak
September - May
27.46
c/kWh
57.00
R / kVA
17.10
R / kVA
2046.00
R
Voltage (kV)
Surcharge (%)
275
0
132
2.25
33
3
11
10.5
6.6
12.75
400
22.5
Network Demand Charge
(Based on Actual Maximum demand)
Network Access Charge
(Based on highest Maximum demand envisaged to either
import or export)
Note: This is a mandatory fixed charge
Service Charge
Note: This is a mandatory fixed charge
Voltage Surcharge (Based on the sum of electricity and
network charges)
Note: This tariff structure and the relevant rates are subject to the following:
1.
Standard tariff rules and policies as adopted by eThekwini Electricity
2. Tariff structure variations as approved by the National Energy Regulator of South Africa (NERSA)
3. Rate variations as approved by the National Energy Regulator of South Africa. (NERSA)
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ANNEXURE C
TARIFF STRUCTURE
APPLICABLE TARIFF FOR ELECTRICITY EXPORTED
INDUSTRIAL GENERATION TIME-OF-USE TARIFF – 2011/2012
Peak
177.80
c/kWh
46.33
c/kWh
Off-Peak
24.80
c/kWh
Peak
49.73
c/kWh
Standard
HIGH DEMAND SEASON
June – August
Standard
LOW DEMAND SEASON
30.51
c/kWh
Off-Peak
September – May
21.35
c/kWh
14.79
R / kVA
A maximum of 10.05 %,
Applied to the sum of
dependant on generation
electricity and network
voltage.
charges
Network Charge
Payable according to date and time of
co-incident
maximum demand of EThekwini’s 275kV account
Voltage Surcharge
Note: This tariff structure and the relevant rates are subject to the following:
1. Standard tariff rules and policies as adopted by eThekwini Electricity
2. Tariff structure variations as approved by the Municipal Council
3. Rate variations corresponding to the Megaflex tariff increase or decrease as approved by the
National Energy Regulator of South Africa (NERSA)