MAHARASHTRA STATE ELECTRICITY DISITRIBUTION COMPANY LIMITED (MSEDCL...
95
POWER PURCHASE AGREEMENT between MAHARASHTRA STATE ELECTRICITY DISITRIBUTION COMPANY LIMITED (MSEDCL) and LANCO ENERGY PRIVATE LIMITED (LEPL) Dated ___ August, 2006 For the Salable energy generated from 500 MW Teesta Stage - VI Hydroelectric Power Project
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Transcript of MAHARASHTRA STATE ELECTRICITY DISITRIBUTION COMPANY LIMITED (MSEDCL...
POWER PURCHASE AGREEMENT
between
MAHARASHTRA STATE ELECTRICITY DISITRIBUTION COMPANY LIMITED (MSEDCL)
and
LANCO ENERGY PRIVATE LIMITED (LEPL)
Dated ___ August, 2006
For the Salable energy generated from 500 MW Teesta Stage - VI Hydroelectric Power Project
TABLE OF CONTENTS
RECITALS 1-3 ARTICLE 1 DEFINITIONS AND INTERPRETATION 4-17
1.1 Definitions 4-16
1.2 Interpretation
16-17
ARTICLE 2 TERM OF AGREEMENT 18
2.1 Effective Date and Term of Agreement 18
2.2 Early Termination 18
ARTICLE 3 CONDITIONS PRECEDENT 19-21
3.1 Conditions Precedent 19-21
3.2 Satisfaction of Conditions Precedent 21
3.3 Right to Terminate
21
ARTICLE 4 PRINCIPAL OBLIGATIONS OF THE PARTIES 22-24
4.1 LEPL’s Obligations 22
4.2 MSEDCL’s Obligations 22-23
4.3 Right to Electrical Output 23-24
4.4 MSEDCL’s Observation Visits 24
ARTICLE 5 CONSTRUCTION 25-26
5.1 LEPL’s Construction Responsibilities 25
5.2 The Site 25
5.3 Construction Contractor 25
5.4 Information Regarding Interconnection Facilities 25
5.5 Construction Standards and Design Criteria 25
5.6 Consents 25
5.7 Documents to be Submitted by LEPL 26
5.8 LEPL’s Construction and Start-up Power 26
5.9 Construction Reports
26
7.12 Maintenance of Operating Records 37-38
7.13 Examination of Records 38
7.14 Monitoring Notice 38
7.15 Desynchronisation of Project 39
ARTICLE 8 SCHEDULING AND DESPATCH 40-43
8.1 General 40
8.2 Daily Generation Capability Schedule and Daily Drawal Schedule
40-41
ARTICLE 6 SYNCHRONISATION, TESTING AND COMMISSIONING
27-32
6.1 Synchronization 27
6.2 Performance Test Procedures 27-28
6.3 Initial Performance Test 28-29
6.4 Unit Capacity Test 29
6.5 Project Capacity Test 29
6.6 Maximum Project Capacity Test 29
6.7 Notice of Test Results 29-30
6.8 Repeat Tests 30
6.9 Costs of Tests 30-31
6.10 Commercial Operation Date of Project 31
6.11 Delayed Commissioning 31-32
6.12 Evacuation of Output until COD of Units 32
6.13 Evacuation of Output after COD of the first Unit but prior to COD of Project
32
ARTICLE 7 OPERATION AND MAINTENANCE 33-39
7.1 LEPL’s Operation and Maintenance Responsibilities 33
7.2 Operating Procedures 34
7.3 Annual Scheduled Outage Plan 34-35
7.4 Annual Generation Plan 35-36
7.5 Review of Scheduled Outage and Annual Generation Plans 36
7.6 Maintenance and Forced Outages 36
7.7 Operation 36
7.8 Emergency Plans 37
7.9 Supply of Power in Emergency 37
7.10 De-Silting Operation 37
7.11 Efficient and Reliable Operation
37
8.3 Daily Despatch Schedule 41
8.4 Revised Generation and Drawal Schedules 41
8.5 Revised Despatch Schedule 41
8.6 Revised Schedules during the operation day 41-42
8.7 Implementation of Despatch Instructions 42
8.8 Unscheduled interchange 42
8.9 Deemed Power 43
ARTICLE 9 INTERRCONNECTION, TRANSMISSION, METERING AND ENERGY ACCOUNTING
44-49
9.1 Interconnection Facilities and Transmission Facilities
44-45
9.2 Metering 45-49
9.3 Energy Accounting 49
9.4 Load dispatch centre charges 49
ARTICLE 10 BILLING AND PAYMENT 50-56
10.1 General 50
10.2 Delivery of Monthly Bills 50 10.3 Payment of Monthly Bills 50-51
10.4 Payment Security Mechanism 51-53
10.5 Disputed Bill 53-54
10.6 Change in Law Claim and Payment 54-55
10.7 Quarterly and Annual Reconciliation 56
10.8 Payment of Supplementary Bill 56
10.9 Payment for Construction and Start-up Power 56
ARTICLE 11 FORCE MAJEURE 57-59
11.1 Definitions 57-58
11.2 Notification of Force Majeure Event 58
11.3 Duty to perform and duty to mitigate 59
11.4 Failure or delay caused by Force Majeure 59
11.5 Extended Force Majeure 59
ARTICLE 12 CHANGE IN LAW 60
12.1 Definitions 60
12.2 Payment for Change in Law 60
12.3 Appeal against Change in Law 60
ARTICLE 13 LIABILITY AND INDEMNIFICATION 61
13 Limitation on Liability 61
ARTICLE 14 GOVERNING LAW AND DISPUTE RESOLUTION 62-63
14.1 Governing Law 62
14.2 Amicable Settlement 62
14.3 Not used 62
14.4 Arbitration 62-63
14.5 Arbitration Awards to be Binding 63
14.6 Finality and Enforcement of Award 63
14.7 Parties to Perform Obligations 63
14.8 Costs of Arbitration 63
ARTICLE 15 EVENTS OF DEFAULT AND TERMINATION 64-67
15.1 LEPL Event of Default 64
15.2 MSEDCL Event of Default 65
15.3 Extended Force Majeure 65
15.4 Termination procedure for LEPL Event of Default
65-66
15.5 Termination Procedure for MSEDCL Event of Default 66-67
15.5A Termination by Mutual Consent 67 15.6 Consequences of Termination 67
15.7 Project Lender to be Notified 67
ARTICLE 16 MISCELLANEUOS PROVISIONS 68-72
16.1 Amendment 68
16.2 Third Party Beneficiaries 68
16.3 No Waiver 68
16.4 Language 68
16.5 Remedies 68
16.6 Entirety 68
16.7 Assignment 68-69
16.8 Confidentiality 69-70
16.9 Affirmation 70
16.10 Severability 70
16.11 No Partnership 70
16.12 Survival 71
16.13 Counterparts 71
16.14 Notices 71
16.15 Schedules 72
SCHEDULE A CONSENTS 73
1.0 Initial Consents 73
2.0 Consents for Construction and Commissioning of the Project
73
3.0 Consent for operation of the Project 73
SCHEDULE B TECHNICAL FEATURES OF PROJECT 74-77
1.0 Location 74
2.0 Hydrology 74
3.0 Power & Energy Parameters 74
4.0 Reservoir 74-75
5.0 Dam 75
6.0 Power Draft 75
7.0 Scouring Sluice 75
8.0 Feeder Tunnel, Intake & Trash Racks 75
9.0 Power Tunnel 75-76
10.0 Power House 76
11.0 Turbine 76
12.0 Generator 76
13.0 Transformer 77
14.0 Switchyard 77
15.0 Tie Line 77
SCHEDULE C INSURANCE 78-79
1.0 Maintenance of Insurance Policies 78
2.0 Certificates of Insurance 78
3.0 Required Coverage 78-79
4.0 Evidence of Coverage 79
5.0 Application of Proceeds from Risk Property/ Comprehensive and Machinery Insurance
79
6.0 Cost of Insurance 79
7.0 Preference for Indian Insurers 79
8.0 Compensation 79
SCHEDULE D TARIFF 80-81
1.0 General 80
2.0 Tariff Rate 80-81
3.0 Computation of Energy in Case of Difference with REA 81
SCHEDULE E TECHNICAL LIMITS 82
SCHEDULE F DETERMINATION OF WATER SPILLAGE FOR COMPUTING DEEMED GENERATION
83
SCHEDULE G DETAILS OF INTER CONNECTION FACILITIES 84
*********
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ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 Definitions
The terms used in this Agreement, unless as defined below or repugnant to the context, shall have the same meaning as assigned to them by the Electricity Act, 2003 and the rules or regulations framed there under.
1. "ABT Order" means CERC's order on the Availability Based
Tariff issued on the 4th day of January, 2000 and subsequent amendments to or replacement/substitution of this order;
2. "Affected Party" has the meaning specified in Article 11.1.1;
3. “Affiliate” has the meaning specified in Article 16.7.2(i);
4. "Agreement" or "Power Purchase Agreement" or "PPA"
means this document including its Schedules containing the terms and conditions for purchase of Saleable Energy by MSEDCL from LEPL from the Project;
5. “Appropriate Commission"
means the Central Electricity Regulatory Commission or a State Electricity Regulatory Commission, competent to determine the Tariff for the Project pursuant to the Electricity Act, 2003, or their successors;
6. "Annual Fixed Tariff”
shall mean the tariff rate (Rs./Kw) fixed as set out in paragraph 2 of Schedule D;
7. "Arbitration" means the resolution of a dispute between the Parties in accordance with Article 14;
8. “Auxiliary Consumption and transformation losses”
means in relation to a period, the energy consumed by auxiliary equipment and transformation losses within the generating station in aggregate expressed as 1.20 percent of the gross energy generated at generator terminals during the relevant period.
9. "Bill Dispute Notice" means the notice issued by a Party raising a dispute regarding a Monthly Bill or a Supplementary Bill issued by the other Party;
10. “Billable Energy” means in relation to a period, the Energy Output during such period including Deemed Generation.
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11. “Business Day” means a day other than a Sunday or a statutory holiday on which banks are open for business in Mumbai;
12. "Capital Cost" means the completion cost of the Project as approved by the Competent Authority.
13. "CEA" means the Central Electricity Authority as defined in the Electricity Act, 2003, or its successors;
14. "Central Transmission Utility" or "CTU"
means the utility as defined in the Electricity Act, 2003, namely, Power Grid Corporation of India Limited (“PGCIL”), or its successors;
15. "CERC" means the Central Electricity Regulatory Commission, as defined in the Electricity Act, 2003, or its successors; and includes Maharashtra Electricity Regulatory Commission ( MERC ), wherever applicable;
16. "CERC Interstate Transmission Regulations"
means the Central Electricity Regulatory Commission (Open Access in Inter-State Transmission) Regulations, 2004 notified by CERC vide its order dated 30th January 2004, as amended from time to time;
17. "CERC Tariff Regulations"
means the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2004, notified by CERC on March 26, 2004 and which has come into effect on April 01, 2004.
18. "Change in Law" has the meaning specified in Article 12.1;
19. "Check Meters" means the metering system identical to the Main Meters installed at the Delivery Point for verifying the performance of the Main Meters;
20. "Commercial Operation Date" or "COD"
means, in relation to a Unit, the date on which such Unit has been Commissioned; or in relation to the Project, the date on which the last Unit comprised in the Project is Commissioned;
21. “Commission” or "Commissioned"
means in relation to a Unit, the commencement of operation of such Unit after it successfully completes the Unit Capacity Test in accordance with Article 6.4.
22. “Competent Court” has meaning specified in Article 12.1.2;
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23. "Confidential Information"
has the meaning specified in Article 16.8.1;
24. "Conditions Precedent"
means all the conditions as specified in Article 3.1 that are to be fulfilled or waived by the relevant Party;
25. "Connection Agreement"
means the agreement entered into, or to be entered into, between the MSEDCL and the Central Transmission Utility / State Transmission Utility in accordance with the Indian Electricity Grid Code;
26. "Consent" means any consent, licence, approval, permit, no-objection certificate, concession, right of way or any other authorisation required to be granted by a Governmental Instrumentality for construction, operation and maintenance of the Project, including but not limited to those specified in Schedule A;
27. "Construction Contractor"
means one or more main contractors, appointed by LEPL to design, engineer, construct and Commission the Project in accordance with the provisions of Article 5;
28. "Consultation Period"
means the period, commencing from the date of issue of a Preliminary Termination Notice, for consultation between the Parties to:
(i) mitigate the consequence of the relevant event having regard to all the circumstances; and
(ii) prevent termination of this Agreement;
29. "Contracted Energy”
means the Saleable Energy.
30. “Control Centre” is defined in Article 8.1.3;
31. “Corporate Income Tax”
means the tax (including minimum alternate tax) on income arising from the core business of LEPL i.e. production and sale of the Saleable Energy and associated charges, cess etc. which is built-in component of Tariff;
32. "Daily Despatch Schedule"
means the daily schedule for the following day containing the details of Declared Capacity and the Despatched Power for the relevant day for each Settlement Period of a day notified by the RLDC to the Control Centre and then by the Control Centre to LEPL;
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33. “Daily Drawal Schedule”
means the daily schedule for the following day, given by the SLDC to the RLDC, containing the draw-able power as the Purchaser / SLDC may decide to draw, out of the Declared Capacity, for each Settlement Period;
34. "Daily Generation Capability Schedule"
means the daily schedule containing the Declared Capacity, and other generation data for each Settlement Period for the following day, pursuant to Article 8.2.1, notified by LEPL to the Control Centre and the Purchaser;
35. "Debt"
means the sum of borrowed principal amounts expressed in the relevant currency(ies) in the Financing Agreements at the Financial Close;
36. "Declared Capacity"
means the net capacity during any Settlement Period at the Delivery Point, as declared by LEPL in its Daily Generation Capability Schedule or Revised Generation Capability Schedule and expected to be available from the Generating Station over the peaking hours of the next day taking into account the availability of water, optimum use of water and availability of machines provided that the Declared Capacity in any Settlement Period shall not exceed the Maximum Available Capacity (for Units actually available in such Settlement Period )
37. "Deemed Generation"
means, in relation to a period, the Energy Output corresponding to the Deemed Power during such period;
38. "Deemed Power"
has the meaning specified in Article 8.9.
39. "Delivery Point" means busbar of the switchyard of the Project at which the risk and title to the Energy Output and Power Output shall pass from LEPL to MSEDCL;
40. "Designated
Account" has the meaning specified in Article 10.3.4;
41. "Despatch Instruction"
means any instruction issued by the Control Centre / RLDC to LEPL in accordance with IEGC;
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42. "Despatched or Instructed Power"
means the Power Output specified by the Control Centre / RLDC in its Daily Despatch Schedule or Revised Despatch Schedule;
43. "Due Date" means the thirtieth (30th) day after a Monthly Bill or a Supplementary Bill is received by MSEDCL (or, if such day is not a Business Day, the immediately succeeding day) by which date such bill is payable by MSEDCL,
provided that in the event a Monthly Bill is received prior to the fifth (5th) day of a Month, such bill shall be deemed to have been received on the fifth (5th) day of such Month;
44. “Electricity Laws” means the Electricity Act, 2003 and the Rules and Regulations made there under from time to time along with amendments and replacements thereof in whole or in part and all other Laws pertaining to electricity including any other norms and regulations laid down by CERC or State Electricity Regulatory Commissions;
45. "Energy Output"
means the metered electrical energy, in kWh or multiples thereof, delivered by LEPL at the Delivery Point;
46. "Engineer" means the independent consulting engineering firm / agency / body, jointly appointed by MSEDCL and LEPL to monitor the commissioning and testing of the Project on their behalf;
47. "Equity"
means the amount contributed towards the share capital of LEPL in accordance with the Financing Agreements;
48. not used
49. “Extended Force Majeure”
shall have the meaning assigned to it Article 15.3;
50. "Expiry Date" means the twenty fifth (25th) or thirty fifth (35th) anniversary of the Commercial Operation Date of the Project, as the case may be;
51. "Financial Close" means the first Business Day on which LEPL can draw down funds under the Financing Agreements;
52. "Financing Agreements"
means all the loan agreements, guarantees, credit facilities, notes, indentures, security agreements, letters of credit, share subscription agreements and other documents relating to the financing or re-financing of the Project at the Financial Close, as may be amended, modified or replaced from time to time;
53. "Force Majeure" means an event defined in Article 11.1.2;
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54. "Forced Outage" means an interruption or reduction of Power Output of a Unit or Project due to unforeseen failure of equipment;
55. "Governmental Instrumentality"
means any legislative, judicial, regulatory, executive or other governmental body (including any agency, department, board, instrumentality, commission, office or authority) of the Government of India or any political subdivision thereof. For the purpose of this Agreement, MSEDCL will not be a Government Instrumentality;
56. "Grid" means the transmission network including the Tie Line beyond the Delivery Point, through which the Energy Output is to be evacuated from the Project and upto the point of drawal into the Purchaser’s system;
57. "MSEDCL" means Maharashtra State Electricity Distribution Company Limited as defined in the recitals;
58. "MSEDCL Event of Default"
has the meaning specified in Article 15.2;
59. "MSEDCL Preliminary Termination Notice"
means the notice issued by MSEDCL to LEPL stating MSEDCL's intention to terminate this Agreement due to a LEPL Event of Default;
60. "MSEDCL Termination Notice"
means the notice issued by MSEDCL to LEPL for termination of this Agreement due to a LEPL Event of Default;
61. “Infirm Power” means the electrical energy generated by an Unit prior to the COD;
62. not used
63. "Implementation Agreement"
means the agreement that has been entered into between the Project State Government and LEPL for facilitating implementation of the Project;
64. "Indian Electricity Grid Code" or "IEGC"
means the rules, guidelines and standards notified from time to time by the CTU for efficient and reliable operation of the Grid;
65. “Initial Consents” means the consents specified in Paragraph 1.0 of Schedule A;
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66. "Initial Performance Test"
means the performance test conducted on an Unit or the Project, as the case may be, in accordance with Article 6.3.1;
67. "Interconnection Facilities"
means the interconnection equipment and associated automatic communications, switching equipment and line protection devices installed, owned, operated and maintained by the CTU / Project State Utility or LEPL as described in Schedule G;
68. "Law" means, in relation to this Agreement, all laws and Electricity Laws in force in India and includes any statute, decree, ordinance, regulation, notice, circular, code, rule or direction, or any interpretation of any of them by Governmental Instrumentality in India and/or in relevant States and also includes all applicable rules, regulations, orders, directions, notifications by a Governmental Instrumentality pursuant to or under any of them;
69. "Lender" means any Indian or foreign institution, corporation, partnership, firm, individual or organization providing Debt to LEPL;
70. "LEPL" means Lanco Energy Private Limited as defined in the Recitals of this Agreement;
71. "LEPL Event of Default"
means any of the events set out in Article 15.1 of this Agreement;
72. "LEPL Preliminary Termination Notice"
means the notice issued by LEPL to MSEDCL, stating LEPL's intention to terminate this Agreement as a result of a MSEDCL Event of Default;
72A "LEPL Termination Notice"
means the notice issued by LEPL to MSEDCL for termination of this Agreement due to a MSEDCL Event of Default;
73. "Letter of Credit" or "LC"
means the letter of credit as set out in Articles 10.4, 15.4 and 15.5;
74. "Maintenance Outage"
means the interruption or reduction in Power Output of a Unit or the Project for the purpose of repair or replacement of specific components of equipment.;
75. "Main Meters" means the metering system installed at the Delivery Point for measurement of the Energy Output and other parameters specified in
11
Article 9.2;
76. "Maximum Capacity"
means the Tested Capacity of the Project, the same being determined at maximum head and with flow at hundred percent (100%) gate opening or nozzle opening or design discharge, determined in the Initial Performance Test or in a subsequent test;
77. “Maximum Available Capacity”
means the maximum capacity in MW which LEPL can generate with all Units running under the prevailing conditions of water levels and flows over the peaking hours of next day;
78. "Maximum Project Capacity Test"
means the tests to demonstrate the Maximum Capacity of the Project;
79. "Meters" means Main Meters and Check Meters;
80. "Month" means a calendar month;
81. "Monthly Bill" means a bill raised by LEPL to MSEDCL for Tariff Payment in respect of Billable Energy in each completed Month;
82. “Monthly Tariff Payment”
shall mean the payment of Annual Fixed Tariff against the Monthly Bill for each of the 12 months comprised in the relevant Tariff Year.;
83. "O&M Contract" means the contract entered into, or to be entered into, between LEPL and the Operator, relating to the operation and maintenance of the Project, in accordance with this Agreement;
84. "Operating Procedures"
has the meaning specified in Article 7.2;
85. "Operation Period" means the period from the Commercial Operation Date of the Project to the Expiry Date;
86. "Operation Year"
means the period beginning on the COD of the Project and ending on completion of one full year and each successive twelve (12) Month period thereafter till the Expiry Date;
87. "Operator" means one or more contractors appointed as operator of power generation facilities of the Project pursuant to an O&M Contract, if any;
88. "Party" and "Parties"
has the meaning specified in the recital to this Agreement;
89. "Payment Security means the payment security provided by MSEDCL to the LEPL, in accordance with
12
Mechanism" Article 10.4;
90. "Payment Surcharge"
means the surcharge payable by MSEDCL for delay in payment of a Monthly Bill or a Supplementary Bill, as the case may be, beyond the Due Date in accordance with Article 10.3.5;
91. "Performance Test Procedures"
has the meaning specified in Article 6.2.1;
92. "Power Output" means the electrical power in kW or multiples thereof, delivered by LEPL at the Delivery Point;
93. "Project" means the Run of River hydroelectric generating facilities comprising of 4 (four) Units of 125 MW each on Teesta river in the State of Sikkim, the technical specifications of which are more particularly described in Schedule hereof, , whether completed or at any stage of development and construction including without limitation, all land, buildings, dams, gates, spillways, hoists, weirs, canals, penstocks, tunnels, surge tanks, electrical energy generating equipment (and its auxiliary equipment), switchyard, and the Interconnection Facilities which is to be designed, built, owned, operated and maintained by LEPL at Site and including any residential colony / unit welfare facilities and offices;
94. "Project Capacity Test"
means the tests to demonstrate the Rated Capacity of the Project;
95. "Project State" means the State in which the Project is located, i.e. the State of Sikkim;
96. "Project State Government"
means the government of the State in which the Project is located, i.e. the Government of State of Sikkim;
97. "Prudent Utility Practices"
means exercise of that degree of skill, diligence, prudence and foresight which would reasonably and ordinarily be expected from a skilled and experienced agency or operator, engaged in the same type of undertaking, and adopting the practices, methods and standards that are generally followed by electric utilities in India including customary industry practice in regard thereto and any improvements or innovations that may be made to all such practices, methods and standards during the Term of Agreement for ensuring the safe,
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efficient, and economic construction, commissioning, operation and maintenance of power generation facilities of a size and type applicable to the Project;
98. "Rated Capacity" means the gross Tested Capacity of the relevant Unit; and in relation to the Project the gross Tested Capacity of all the Units comprised in the Project,
in each case such Tested Capacity being that determined at rated head and rated flow in each case in the Initial Performance Test or subsequent tests ;
99. "Reactive Power"
means the product of voltage and current and the sine of the phase angle between them, measured in units of volt-amperes reactive, or multiples thereof;
100. "Regional Energy Accounts" or "REA"
means the accounts of power and energy delivered by LEPL and drawn by the Purchaser, as issued by the appropriate agency for each Week and for each Month, including the revisions and amendments thereof;
101. “Repeat Tests” means the repeat tests specified in Article 6.10 for Initial Performance Test
102. "Required Commercial Operation Date" or "Required COD" or “RCOD”
means in relation to the Project, a date which falls upon the expiry of 60 months from the date of Financial Closure.
103. "Revised Despatch Schedule"
means the Daily Despatch Schedule, revised in accordance with Article 8.5;
104. Revised Drawal Schedule
means the Daily Drawal Schedule, revised in accordance with Article 8.4;
105. “Revised Generation Capability Schedule”
means the Daily Generation Capability Schedule revised in accordance with Article 8.4 hereof;
106. "RLDC"
means the relevant Regional Load Despatch Centre as defined in the Electricity Laws, in the region in which the Project is located;
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107. “Royalty” means the quantum of electrical energy to be supplied by the LEPL to the Project State free of cost during the Term of the Agreement which shall be equivalent to 12% (Twelve percent) of the total energy generated by the Project after deducting Auxiliary Consumption & transformation losses for the first 15 years and 15% (Fifteen Percent) thereafter.
108. "Rupees" or "Rs." Means the lawful currency of India;
109. “Saleable Energy” means the total electrical energy generated by the Project including the Infirm Power available for sale (ex bus) after allowing for Auxiliary Consumption, transformation losses and Royalty.
110. "Scheduled Outage"
means a planned interruption of the generating capacity of a Unit or the Project for the purpose of inspection, testing, preventive maintenance, repair or replacement of components or equipment, or improvement in the performance of equipment;
111. "Scheduled Synchronisation Date"
means in respect of a Unit or Project, the date which falls 15 days before the Required COD;
112. "SERC" means the State Electricity Regulatory Commission, as defined in the Electricity Act, 2003, or its successors, having jurisdiction over the Purchaser;
113. "Settlement Period" means the time block for issue of daily generation, drawal and despatch schedules as may be defined by IEGC
114. "Site" means the land, spaces, waterways, roads and rights for the purpose of building, operating and maintaining the Project including all rights of way and access from public highways and rights of way for the Tie Line at one or more places;
115. "Site Reference Conditions"
means the values of various parameters of the Site specified as reference values in Schedule B;
116. "SLDC" means the State Load Despatch Centre as defined in the Electricity Act, 2003, in relation to the Purchaser ;
117. "Supplementary Bill"
means a bill other than a Monthly Bill raised by either Party in accordance with Article 10.8;
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118. "Tariff" means the tariff as set out in accordance with Schedule D;
119. "Tariff Adjustment Payment"
means increase or decrease in the Tariff Payment on account of Change in Law or any applicable changes, other than on account of Payment Surcharge;
120. "Tariff Payment" means the Monthly Tariff Payments to LEPL;
121. "Tariff Year" means the period beginning on the COD of the Project and ending on completion of one full year and each successive twelve (12) Month period thereafter till the Expiry Date;
122. "Tax"
means any Indian tax, duty, cess, fees, impost, surcharge or levy of any nature howsoever called charged, levied or imposed by a Governmental Instrumentality (whether central, state or local) in relation to the Project;
123. “Technical Limits”
means the technical limits of the Project specified in Schedule E;
124. "Technical Specifications"
means the salient technical features in relation to the Project specified in Schedule B and the elaboration of such technical features as may be provided in the construction contracts of the Construction Contractor, covering the design, construction, testing and commissioning of the Project;
125. "Term of Agreement"
has the meaning specified in Article 2.1;
126. "Tested Capacity" means, in relation to a Unit or the Project, the tested capacity during the Initial Performance Test under specific conditions as applicable for each test;
127. "Testing Laboratory"
means a reputed laboratory for testing and calibration of Main Meters and Check Meters, acceptable to the CTU, LEPL and the Purchaser;
128. "Tie Line"
means the transmission lines from the switchyards of the Project to inter connection point of CTU whether completed or at any stage of development and construction, including without limitation, all right of way, towers, conductors and accessories, land, structures, sub-station equipment, line protection system and communication system; designed, built, owned, operated and maintained by or on behalf of LEPL;
129. “Unit”
means a generating set and all equipment and installation that can be assigned independently and exclusively to such generating set;
130. "Unit Capacity Test"
means the tests to demonstrate Rated Capacity of a Unit;
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131. "Week" means a calendar week commencing from 00:00 hours of Monday, and ending at 24:00 hours of the following Sunday;
1.2 Interpretation
Save where the contrary is indicated, any reference in this Agreement to: 1.2.1 a "Recital", an "Article" a "Schedule" and a "Paragraph" shall be
construed as a reference to a "Recital", an "Article" a "Schedule" and a "Paragraph" respectively of this Agreement.
1.2.2 a "day" means a calendar day. 1.2.3 an "encumbrance" shall be construed as a reference to a
mortgage, charge, pledge, lien or other encumbrance securing any obligation of any person or any other type of preferential arrangement (including, without limitation, title transfer and retention arrangements) having a similar effect.
1.2.4 a "person" shall be construed as a reference to any person, firm,
LEPL, MSEDCL, society, trust, government, state or agency of a state or any association or partnership (whether or not having separate legal personality) of two or more of the above and a person shall be construed as including a reference to its successors, permitted transferees and permitted assigns in accordance with their respective interests.
1.2.5 the "winding-up", "dissolution", "insolvency", or "reorganization" of
a LEPL or MSEDCL shall be construed so as to include any equivalent or analogous proceedings under the law of the jurisdiction in which such LEPL or MSEDCL is incorporated or any jurisdiction in which such LEPL or MSEDCL carries on business including the seeking of liquidation, winding-up, reorganization, dissolution, arrangement, protection or relief of debtors.
1.2.6 words importing the singular shall include the plural and vice
versa. 1.2.7 this Agreement or any other agreement or document shall be
construed as a reference to this or to such other agreement or document as it may have been, or may from time to time be, amended, varied, novated, replaced or supplemented.
1.2.8 a Law shall be construed as a reference to such Law including its
amendments or re-enactments from time to time.
1.2.9 a time of day shall, save as otherwise provided in any agreement or document, be construed as a reference to Indian Standard Time.
1.3 different parts of this Agreement are to be taken as mutually explanatory
and supplementary to each other and if there is any inconsistency between or among the parts of this Agreement, they shall be interpreted in a harmonious manner so as to give effect to each part. If, however, any such inconsistency cannot be reconciled, the Schedules shall supersede the main body of the Agreement..
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1.4 the table of contents and any headings or sub-headings in this Agreement
have been inserted for ease of reference only and shall not affect the interpretation of this Agreement.
1.5 all interest payable under this Agreement shall accrue from day to day
and be calculated on the basis of a year of three hundred and sixty five (365) days.
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ARTICLE 2
TERM OF AGREEMENT
2.1 Effective Date and Term of Agreement
The Articles 1, 2, 3, 4.1 (i) and (ii) (to the extent applicable), 4.1(iii) (to the extent applicable), 4.1(vi and vii) (to the extent applicable), 12, 14 and 16 of this Agreement shall become effective upon the date of its execution by the Parties while the remaining Articles shall not become effective until the Conditions Precedent specified in Article 3 are either satisfied or waived in accordance with Article 3 of this Agreement.
The Agreement shall have a term from such date of execution by the Parties until the Expiry Date ("Term of Agreement "), when it shall automatically terminate, unless terminated earlier, pursuant to Article 2.2
The effective date means the date on which Conditions Precedent
pursuant to Article 3.1 are either satisfied in full or such Conditions Precedent which are unfulfilled are waived pursuant to Article 3.1.3
2.2 Early Termination
This Agreement shall terminate before the Expiry Date:
(i) If either LEPL or MSEDCL exercises a right to terminate, pursuant to Article15 or Article 3.3; or
(ii) If LEPL and MSEDCL does not come to an understanding of Tariff rate applicable for the period between 26th year to 35th year before completion of 25th year;
(iii) In such other circumstances as LEPL and MSEDCL may subsequently mutually agree, in writing.
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ARTICLE 3
CONDITIONS PRECEDENT
3.1 Conditions Precedent The Conditions Precedent and obligations of the Parties with regard thereto, are as specified below. The Parties shall make reasonable endeavours to provide the required documents and take all actions to satisfy the Conditions Precedent within twelve (12) months from the date of execution of this Agreement or such extended period as may be mutually agreed by the Parties.
(i) LEPL shall have received a legal opinion, reasonably satisfactory to LEPL, from a legal counsel to MSEDCL, confirming MSEDCL's authority to enter into this Agreement and the enforceability of the provisions contained herein;
(ii) MSEDCL shall obtain the approval of Appropriate
Commission in relation to the PPA;
(iii) MSEDCL shall have received copies of the charter/constituent documents of LEPL, duly certified by LEPL;
(iv) MSEDCL shall have received copies of resolutions
adopted by LEPL's board of directors authorizing the execution, delivery and performance by LEPL of this Agreement, which resolutions shall be certified by LEPL;
(v) MSEDCL shall have received a legal opinion, reasonably
satisfactory to MSEDCL, from a legal counsel to LEPL, confirming LEPL's authority to enter into this Agreement and the enforceability of the provisions contained herein;
(vi) LEPL shall have received valid, enforceable and
unencumbered right of way and title to the Site and such other tangible and intangible property rights as may be required or necessary to construct, Commission and operate the Project;
(vii) LEPL shall have received all Initial Consents;
(viii) LEPL shall have achieved Financial Close in relation to the
Project;
(ix) MSEDCL and LEPL shall have agreed, in writing, to the list of pre-qualified engineering consulting firms, which shall be eligible to be appointed as the Engineer;
(x) Long Term open access in accordance with CERC
Interstate Transmission Regulations for the supply of power and energy to MSEDCL shall have been obtained by MSEDCL;
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(xi) LEPL shall have duly executed an Implementation Agreement with the Project State Government; and
(xii) the Appropriate Commission shall have approved the
Tariff. 3.1.1 Conditions Precedent that may be waived by LEPL
The following Condition Precedent for the effectiveness of LEPL's obligations under this Agreement, which may be unilaterally waived by LEPL by notifying MSEDCL in writing: (I) LEPL shall have received a legal opinion, reasonably
satisfactory to LEPL, from a legal counsel to MSEDCL, confirming MSEDCL's authority to enter into this Agreement and the enforceability of the provisions contained herein.
3.1.2 Conditions Precedent that may be waived by MS EDCL
The following are the Conditions Precedent for the effectiveness of MSEDCL's obligations under this Agreement, which may be unilaterally waived by MSEDCL by notifying LEPL in writing: (i) MSEDCL shall have received copies of the
charter/constituent documents of LEPL, duly certified by LEPL;
(ii) MSEDCL shall have received copies of resolutions
adopted by LEPL's board of directors authorizing the execution, delivery and performance by LEPL of this Agreement, which resolutions shall be certified by LEPL;
(iii) MSEDCL shall have received a legal opinion, reasonably
satisfactory to MSEDCL, from a legal counsel to LEPL, confirming LEPL's authority to enter into this Agreement and the enforceability of the provisions contained herein;
3.1.3 Conditions Precedent that may be waived by mu tual consent
The following are the Conditions Precedent, which may be waived by mutual written consent of both the Parties: (i) LEPL shall have received valid, enforceable and
unencumbered right of way and title to the Site and such other tangible and intangible property rights as may be required or necessary to construct, Commission and operate the Project;
(ii) LEPL shall have received all Initial Consents; (iii) LEPL shall have achieved Financial Close in relation to the
Project;
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(iv) MSEDCL and LEPL shall have agreed, in writing, to the list of pre-qualified engineering consulting firms, which shall be eligible to be appointed as the Engineer;
(v) Long Term open access in accordance with CERC
Interstate Transmission Regulations for the supply of power and energy to MSEDCL shall have been obtained by MSEDCL;
The Party that is responsible for satisfying a particular Condition Precedent under this Article 3.1.3 may request waiver of such Condition Precedent by notifying the other Party in writing of its intention to seek such waiver. If the other Party provides its consent in writing that it no longer requires the satisfaction of such Condition Precedent, the performance of such Condition Precedent shall be waived.
3.2 Satisfaction of Conditions Precedent
Each Party, that is responsible for satisfying a particular Condition Precedent, shall keep the other Party informed in writing of the progress being made in fulfilling such Condition Precedent and also upon the fulfilment or waiver of such Condition Precedent, as the case may be. Each Party shall use reasonable endeavour to satisfy the Conditions Precedent, which it is responsible for.
3.3 Right to terminate
3.3.1 If the Conditions Precedent listed in Article 3.1 are not duly
satisfied or waived by MSEDCL or LEPL, as the case may be, within twelve (12) months of the date of execution of this Agreement, or such extended time as may be mutually agreed between the Parties in writing, either Party may terminate this Agreement by giving a written notice of termination to the other Party which notice shall not be issued before the expiry of twelve (12) months from the date of execution of this Agreement..
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ARTICLE 4
PRINCIPAL OBLIGATIONS OF THE PARTIES
4.1 LEPL's Obligations Notwithstanding anything to the contrary specified in this Agreement, LEPL agrees and undertakes to: (i) design, construct, complete, test, and commission the Project
using only material and equipment that are new and of international/Indian Power utility-grade quality, and always in accordance with Prudent Utility Practices, in such a manner as to ensure that the useful life of the Project, with proper maintenance and operations, shall be at least equal to the Term of Agreement;
(ii) design, construct, complete and maintain during the subsistence of this Agreement using all material and equipments for transmission of Saleable Energy from the Delivery Point to the Interconnecting point owned, operated and maintained by CTU facilitating interconnection by deploying Prudent Utility Practices;
(iii) obtain and keep valid and subsisting all requisite permits, clearances, licenses, approvals, consents / way leaves, necessary for the Project;
(iv) ensure reliable availability of the Contracted Energy by use and application of Prudent Utility Practices, consistent with the Technical Limits and meet the Despatch Instructions throughout the Operation Period;
(v) Maintain insurance coverage in accordance with the requirements
set out in Schedule C; (vi) always be in compliance with Law and Electricity Laws; (vii) obtain and maintain in full force and effect all Consents and
insurances pursuant to this Agreement and Law, and
4.2 MSEDCL's Obligations MSEDCL agrees and undertakes to: (i) Off take Contracted Energy and pay Monthly Bills and
Supplementary Bills in accordance with this Agreement; (ii) Co-operate with LEPL at its request to facilitate the Initial
Performance Test, Repeat Test, any other subsequent tests and Commissioning of the Units and the Project by the dates notified by LEPL;
(iii) obtain and maintain the requisite transmission open access to
ensure evacuation of the Contracted Energy from the Delivery Point, from the Early Synchronisation Date or the Scheduled Synchronisation Date, as the case may be, upto the expiry date;
(iv) obtain and maintain at all times the required licenses that is
required under Law to purchase and further sell and distribute the Energy Output;
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(v) open and maintain the Letter of Credit and open the Escrow
Account as required under the terms and conditions specified in Article 10.4 of this Agreement; and
(vi) always be in compliance with Law and Electricity Laws; and
(vii) Coordinate with the CTU in accordance with Article 5.4;
4.3 Right to Electrical Output
4.3.1 LEPL undertakes to sell at the agreed Tariff as per this Agreement
to MSEDCL the Contracted Energy, and MSEDCL undertakes to purchase such Contracted Energy and pay Tariff for the Billable Energy to LEPL in accordance with this Agreement..
4.3.2 not used
4.3.2A MSEDCL shall off take the contracted energy from LEPL. In the
event, MSEDCL fails to off take power generated by LEPL for any reasons other than CTU breakdown/outages, MSEDCL and LEPL agree to the following:
4.3.2.1 LEPl shall be free to sell such energy between its declared
off take and 95% of declared off take to a third party at a mutually agreed tariff rate between LEPL and third party. Any profit resulting out of such sale by LEPL to any third party shall be retained by LEPL. MSEDCL shall not take any deemed generation obligations for such sale.
If MSEDCL fails to off take less than 95% of the contracted energy, the provisions stipulated in Clause 4.3.5 and Clause 8.9 shall prevail for such reduction below 95% off take of contracted energy by MSEDCL An illustration giving details is set out in Annexure 1 hereto.
4.3.3 Subject to Articles 4.3.5 and 4.3.6, LEPL shall not grant or sell to
any third party or allow any third party to obtain any entitlement to the Contracted Energy without the prior written consent of MSEDCL, provided that such consent shall not be required in the event a notice is issued to MSEDCL pursuant to Article 15.5.1 or in the event of an Extended Force Majeure. .
4.3.4 Subject to Law, LEPL shall not, during the Term of Agreement,
use any electricity generated by the Project, except for the purpose of meeting the Auxiliary Consumption including power requirements for, housing colony any other related establishment of the Project.
4.3.5 In the event MSEDCL refuses or fails to offtake electrical output
post COD of the relevant unit or Project as the case may due to the breakdown of Grid or non-availability of Open Access at any time due to any reason then during the continuance of such breakdown and/or non availability of Open Access, MSEDCL may, request LEPL to continue generating electrical energy and sell the energy output to any third party (such third party either nominated by MSEDCL or identified and nominated by LEPL in absence of
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any nomination by MSEDCL) at a tariff rate (“third party tariff ”) mutually agreed between LEPL and such third party. In the event, Third Party Tariff is lower than the Annual Fixed Tariff for the relevant Tariff Year, then MSEDCL shall pay to LEPL the difference between the Third Party Tariff and the Annual Fixed Tariff for the Energy Output sold to such third party. However, in the event Third Party Tariff is higher than the Annual Fixed Tariff for the relevant Tariff Year, then MSEDCL and LEPL shall equally share the net amount by which the Annual Fixed Tariff is higher than the Third Party Tariff.
4.3.6 (i) Upon receiving the notice of Early Synchronisation Date
under Article 6.1.1, MSEDCL shall, in accordance with Article 4.2(iii), ensure and arrange the transmission open access to achieve synchronisation of the Unit(s) to the Grid by the Early Synchronisation Date, conducting the Initial Performance Test and Commissioning of the Unit(s) and off-take Contracted Energy. However, in the unlikely event, transmission open access is not available due to any reason by the Early Synchronisation Date, then in such an event and subject to the Law and Technical Limits, LEPL shall be entitled to synchronise the Unit/Project to the Grid and sale the Saleable Energy to a third party buyer at a mutually agreed rate of tariff till the RCOD and the provisions relating to Deemed Generation would not be applicable for such period.
(ii) However, if MSEDCL is unable to offtake the Contracted
Energy by the Scheduled Synchronisation Date on account of non availability of transmission long term open access, subject to Article 4.3.5 MSEDCL shall make Tariff Payment (attributable to the first Tariff Year) towards Deemed Generation from the date of Scheduled Synchronisation Date for the period of continued inability of MSEDCL to offtake Contracted Energy.
4.4 MSEDCL's Observation Visits
MSEDCL or its authorized representatives shall have the right, upon reasonable prior written notice to LEPL (except that no such notice shall be required in an emergency), to observe the progress of the construction of the Project, the Commissioning of the Units or Project, as the case may be, or operation of the Project. LEPL shall co-operate with all reasonable requests of MSEDCL and assist in arranging any such observation visits to the Project. All such authorized representatives undertaking such observation visits on behalf of MSEDCL shall comply with reasonable safety and other applicable procedures notified to them by LEPL. All costs in relation to any such visit shall be borne by MSEDCL.
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ARTICLE 5
CONSTRUCTION
5.1 LEPL's Construction Responsibilities LEPL shall be responsible for designing, constructing, completing and Commissioning the Project in accordance with the Technical limits, Technical Specifications, Prudent Utility Practices, the terms of this Agreement and Laws applicable to the Project.
Further, LEPL shall design, construct, complete and maintain during the subsistence of this Agreement using all material and equipments for transmission of saleable energy from the Delivery Point to the Interconnection point owned, operated and maintained by CTU facilitating interconnection by deploying Prudent Utility Practices
LEPL agrees and undertakes to co-ordinate and co-operate with the Central Transmission Utility, including with regard to any acquisition of land for construction and installation in relation to the Interconnection Facilities.
5.2 The Site
LEPL agrees that it shall bear full responsibility for Site condition (including but not limited to its geological condition and the adequacy of the road, rail or other transportation links to the Site) and the acquisition of title to the Site free of all encumbrances. LEPL further agrees that under no circumstances shall it be entitled to any financial compensation due to the unsuitability of the Site.
5.3 Construction Contractor
LEPL shall appoint one or more of the Construction Contractors to design, procure, construct, complete, test, remedy defects, operate and Commission the Project. The appointment of any or all such Construction Contractors shall not release LEPL of any of its responsibilities under this Agreement.
5.4 Information Regarding Interconnection Faciliti es MSEDCL shall assist LEPL, if requested to do so, to co-ordinate with the Central Transmission Utility on a timely basis for all information with regard to the Interconnection Facilities of the CTU, if any, as is reasonably necessary to enable LEPL to design, install and operate the Interconnection Facilities.
5.5 Construction Standards and Design Criteria LEPL shall ensure that the Project is designed, built and completed in a professional manner, adopting good workmanship, sound engineering and construction practices in accordance with Prudent Utility Practices and consistent with the Site conditions, Grid conditions.
5.6 Consents LEPL shall obtain and keep in effect all Consents required by LEPL in order to carry out its obligations under this Agreement.
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5.7 Documents to be submitted by LEPL LEPL agrees to provide the following documents to MSEDCL:
(i) Copies of Consents received for project execution within 30 days
of receipt of such Consent; (ii) Not later than one hundred and fifty (150) days before the
Scheduled Synchronization Date of the first Unit, a copy of draft Performance Test Procedures in relation to the Project;
(iii) Not later than one hundred and twenty (120) days before the
Scheduled Synchronization Date of the first Unit, a copy of LEPL’s drafts Operating Procedures in relation to the Project;
(iv) On or before the scheduled date of the Initial Performance Test of
the first Unit, copies of all Consents that are required and have been issued to LEPL for operation and maintenance of the Project; and
5.8 LEPL's Construction Power and start- up power
All the electrical power and energy required for the purpose of construction, synchronisation and Commissioning of the Units shall be arranged by LEPL at its own cost and expense. LEPL shall, if necessary, enter into arrangement/understanding with CTU for the supply of Start- Up power and power required during shut down on adjustment basis from the Energy Output.
5.9 Construction Reports 5.9.1 On or before the tenth (10th) day of the first month of each quarter
following commencement of construction and continuing until the COD of the Project, LEPL shall provide MSEDCL with quarterly construction reports (for the immediately preceding quarter) on the status of construction of the Project. LEPL shall comply with any reasonable information request made by MSEDCL in relation to the contents of any such construction report.
5.9.2 The construction report described in Article 5.9.1 above shall
include the following:
(i) Executive Summary; (ii) Status of initial Consents; (iii) bar chart highlighting the progress of engineering,
procurement, construction, testing and commissioning activities of the Project, indicating the scheduled and actual progress;
(iv) Description of any major problems, which could affect the Required COD of the Units or the Project, including corrective measures proposed thereof.
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ARTICLE 6
SYNCHRONISATION, TESTING AND COMMISSIONING
6.1 Synchronization 6.1.1 LEPL shall give MSEDCL and CTU at least thirty (30) days' written
notice of the Scheduled Synchronisation Date. However, if LEPL intends to Commission a Unit/Project at any time earlier than the RCOD, then LEPL, in order to synchronize a Unit/Project to the Grid for the purpose of Commissioning such Unit/Project, shall give MSEDCL and CTU at least one hundred and eighty (180) days' written notice of the proposed date of synchronisation (“Early Synchronisation Date ”). The Early Synchronisation Date shall be fifteen (15) days prior to the date of the proposed COD of the Unit/Project.
Upon the receipt of notice from LEPL in relation to the Scheduled
Synchronisation Date or the Early Synchronisation Date, MSEDCL would facilitate and assist CTU and LEPL to synchronise the Unit/Project with the Grid on the Scheduled Synchronisation Date or the Early Synchronisation Date as the case may be.
6.1.2 A Unit may be synchronized to the Grid when:
(i) its construction has been completed in accordance with the Technical Specifications;
(ii) the Performance Test Procedures and the Operating
Procedures have been agreed to by the Parties; (iii) it meets all prevailing connection conditions prescribed in
the IEGC and fulfils other requirements provided by Law for synchronization to the Grid;
(iv) it is capable of being operated safely in accordance with
Prudent Utility Practices; and (v) CTU has agreed to synchronization and evacuation of
Infirm Power
6.2 Performance Test Procedures
6.2.1 Not later than one hundred and fifty (150) days before the Scheduled Synchronization Date or the Early Synchronisation Date, LEPL shall provide MSEDCL with a document specifying the procedure for Initial Performance Tests and Commissioning ("Performance Test Procedures "). This document shall be consistent with this Agreement, Technical Specifications, the IEGC, State Grid code, if applicable and Prudent Utility Practices and shall also specify the levels of acceptable performance in each case.
6.2.2 Within thirty (30) days of the receipt of the draft Performance Test
Procedures, MSEDCL shall notify LEPL of any amendments, deletions or additions that MSEDCL reasonably requires. Such amendments, deletions or additions shall not be inconsistent with this Agreement, Technical Specifications, the IEGC, State Grid code, if applicable and Prudent Utility Practices.
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6.2.3 The Performance Test Procedures shall be mutually finalized within thirty (30) days of the receipt of MSEDCL's comments. If no agreement is reached on any issue, the Parties shall meet and resolve such issue, failing which the issue shall be referred to the Engineer.
6.2.4 The Parties shall comply with the Performance Test Procedures
established pursuant to Article 6.2.3. MSEDCL shall arrange to make available necessary load required for LEPL to successfully complete the Initial Performance Test, Repeat Tests and any other subsequent test prior to the COD.
6.3 Initial Performance Test
6.3.1 Following the finalization of the Performance Test Procedures
pursuant to Article 6.2, after:
(i) a Unit is complete in all respects in accordance with the Technical Specifications such that it is capable of safe operation in accordance with Prudent Utility Practices, the Consents, and Laws and has been synchronised in accordance with Article 6.1.1.; and
(ii) that LEPL has delivered MSEDCL and CTU a completion certificate provided by the Construction Contractor..
LEPL shall, at its own expense, conduct an Initial Performance Test comprising:
(a) Unit Capacity Tests; (b) Project Capacity Test; and (c) Maximum Project Capacity Test.
in accordance with this Article 6.
LEPL shall give MSEDCL and CTU and the Engineer at least thirty (30) days' prior written notice of the date on which an Initial Performance Test will commence. MSEDCL may, within ten (10) working days of the notice received from LEPL, for reasonable cause, ask for deferment of an Initial Performance Test for up to fifteen (15) days from the date notified by LEPL and such test shall be deferred accordingly. LEPL, MSEDCL, CTU and the Engineer shall each designate and ensure attendance of their authorized representatives to witness the Initial Performance Test specified in this Article 6, and to monitor the measurements of various parameters required to be met under this Agreement. Testing and measuring procedures used in the Initial Performance Test shall be in accordance with the Performance Test Procedures pursuant to Article 6.2.
6.3.2 If the water flow is insufficient to conduct the Unit Capacity Test to
determine the Rated Capacity of the Unit but the Site conditions and the Grid parameters are within the Technical Limits, then subject to technical feasibility, such Unit Capacity Test shall be performed under the available conditions and the results of such unit capacity test shall be extrapolated in accordance with the procedure agreed
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to before conducting the Initial Performance Test. If upon the extrapolation of test results, the Unit achieves the minimum Rated Capacity mentioned in Article 6.4 then the Unit would be deemed to have successfully completed the Unit Capacity Test. However, notwithstanding and without any prejudice to the extrapolation of test results and deemed successful completion of the Unit Capacity Test as mentioned above, the Unit Capacity Test shall be postponed to a date when sufficient water flow is available to conduct such test.
6.3.3 If the water flow is insufficient to conduct the Project Capacity Test
or the Maximum Project Capacity Test, but the Site conditions and the Grid parameters are within the Technical Limits, then such test may be postponed to a date, when sufficient water flow is available to conduct such test.
6.4 Unit Capacity Test
The Unit Capacity Test shall be conducted to determine and demonstrate the Rated Capacity of each of the four Units comprised in the Project being not less than 125 MW.
6.5 Project Capacity Test The Project Capacity Test shall be conducted to determine and demonstrate the Rated Capacity of the Project being not less than 500 MW.
6.6 Maximum Project Capacity Test
Following the Project Capacity Test, the Maximum Project Capacity Test shall be conducted to determine and demonstrate the Maximum Capacity.
6.7 Notice of Test Results
6.7.1 Within one (1) day of the conclusion of each Initial Performance Test, LEPL and the Engineer shall submit a test report to MSEDCL, stating:
(i) the case of a Unit Capacity Test or Project Capacity Test, as the
case may be, whether the Unit or the Project, as the case may be, has passed such test, accompanied by sufficient test data to demonstrate the level of performance with respect to each of the tested parameters provided that in the event of insufficient water to carry the Project Capacity Test, a test report shall be submitted to MSEDCL containing the test results of the Unit Capacity Tests for all the four Units individually and whether the aggregate Rated Capacity of all the four Units together demonstrate the desired Rated Capacity of the Project as envisaged by the Project Capacity Test.
6.7.2 Within seven (7) days of receipt of such test report of LEPL,
MSEDCL shall submit a written notice to LEPL and the Engineer, stating either:
(i) MSEDCL concurs with the information provided in test
report: or
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(ii) MSEDCL disputes or disagrees with any or all of the performance levels contained in test report and MSEDCL shall furnish:
(a) the areas of dispute or disagreement, (b) the reasons for MSEDCL’s disagreement, and. (c) the levels of performance/deviation acceptable to
MSEDCL. 6.7.3 If MSEDCL does not dispute the performance levels contained in
LEPL’s test report, the Engineer shall, within seven (7) days of receipt of the MSEDCL notice, issue a test certificate containing its expert opinion on the levels of performance. If the Engineer certifies that the Unit or the Project has, as the case may be, during the Initial Performance Test achieved the performance level specified in the Agreement, such Unit or the Project shall be taken as Commissioned on the day after the date the Engineer issues such certificate. If the Engineer certifies that the Unit or the Project, as the case may be, has during the Initial Performance Test not achieved the performance level specified in the Agreement, the test shall be repeated to meet the performance level specified in the Agreement.
6.7.4 If MSEDCL disputes any or all of the performance levels provided in
LEPL’s test report, representatives of LEPL, MSEDCL, and the Engineer shall, meet within two (2) days after LEPL receives the MSEDCL’s notice of dispute at a mutually acceptable location to discuss and resolve the dispute, within two (2) days thereafter and the Engineer shall decide the level of any disputed performance. Such decision shall be communicated to LEPL and MSEDCL, and the decision of the Engineer in such matter shall be binding on the Parties. If the Engineer does not reach a decision within two (2) days after the receipt of MSEDCL’s notice of dispute, the matter shall be resolved by an expert.
6.8 Repeat Tests
If LEPL fails to achieve the performance levels specified in Articles 6.4 and 6.5 during the Initial Performance Test, LEPL shall be entitled to repeat any such test (“Repeat Test”) upon issue of a notice to MSEDCL.
6.9 Costs of Tests
6.9.1 LEPL shall bear the costs for all Initial Performance Tests specified
in Article 6.3.1(ii) and Repeat Tests specified in Article 6.8.
6.9.2 In respect of any of tests specified in this Article, if MSEDCL disagrees regarding the performance levels notified by LEPL, MSEDCL shall have the right, by issue of a written notice to LEPL to ask LEPL to repeat such tests. In such a case: (i) if the tests meet the performance levels prescribed under the
Agreement, the costs of such tests shall be borne by MSEDCL; and
(ii) if the tests fail to meet such prescribed performance levels under the Agreement, the costs shall be borne by LEPL.
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6.10 Commercial Operation Date of Project
6.10.1 In the event that the COD occurs prior to the Required COD and
MSEDCL is: (i) able to cause off-take and purchase of full Energy Output ,
commencing from the day on which the Project is Commissioned, such day shall be taken as COD of the Project, or
(ii) able to cause off-take and purchase of full Energy Output
commencing from any day falling between:
(a) the day on which the Project is Commissioned; and
(b) the Required COD of the Project,
Such day shall be taken as COD of the Project. 6.10.2 In the event that the COD of the Project occurs after the Required
COD of the Project, such day on which the Project is commissioned shall be taken as COD of the Project.
6.11 Delayed Commissioning
6.11.1 Commissioning Delay by LEPL
In the event that the Commissioning of the Project is delayed by LEPL beyond the Required Commercial Operation Date other than due to the non-availability of water or as permitted by the terms of this Agreement, LEPL shall reimburse to MSEDCL, all expenses that MSEDCL may have incurred towards open access charges to the Grid for evacuation of Energy Output from the Delivery Point to the point of use, for the period of delay.
6.11.2 Commissioning Delay by MSEDCL
In the event that the commissioning of the Project is delayed beyond the Required Commercial Operation Date on account of MSEDCL due to delay of providing Interconnection Point from CTU or fails to witness the Performance Test or specifically asks LEPL to delay the commissioning beyond RCOD, then in that event, after Commissioning of the Project beyond the Required Commercial Operation Date, save and except as allowed under this Agreement, MSEDCL shall make payment to LEPL for Deemed Generation to the extent of spillage of water computed from the date of Required Commercial Operation Date till the COD.
6.11.3 Concurrent Delay by MSEDCL and LEPL If both the Parties are simultaneously responsible for a delay in completing any of the obligations under this Agreement and such delay results in postponement of the Required COD of the Project: (i) the responsibility for the complete duration of delay beyond
the Required COD shall be attributable to the Party which
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completes its obligations later (“Delaying Party”), irrespective of the fact that the other Party's (“Other Party”) obligations are also completed after the Required COD subject however that the delay caused by the delaying Party is not directly arising out of the delay caused by the other Party; and
(ii) the period of delay shall be deemed to commence from the
day the Other Party completes its obligations and intimates in writing and end on the day the Delaying Party completes its obligations.
6.12 Evacuation of Output until COD of Units
At all times during start-up, preliminary testing or other operations of a Unit for achieving the COD of such Unit, and during the Initial Performance Tests, MSEDCL shall arrange for the offtake of such energy including the Infirm Energy by the CTU in its system subject to technical feasibility and MSEDCL shall pay for such energy including the Infirm Power as per the Tariff.
6.13 Evacuation of Output after COD of the first Un it but prior to COD of Project
At all times after the COD of the first Unit but prior to the COD of the Project, MSEDCL shall arrange for the purchase of such Energy Output that can be scheduled and delivered. The Tariff payable by MSEDCL to LEPL for such Energy Output shall be as per the Tariff.
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ARTICLE 7
OPERATION AND MAINTENANCE
7.1 LEPL's Operation and Maintenance Responsibiliti es 7.1.1 LEPL shall be responsible, at its own expense, for ensuring that
the Project is operated and maintained in accordance with the Indian Electricity Grid Code, the Law, Connection Agreement, terms of all Consents and Prudent Utility Practices so as to meet all LEPL's obligations under this Agreement and so as not to have an adverse effect on the Grid, except to the extent:
(a) it is necessary due to circumstances relating to safety (of personnel or plant or apparatus);
(b) that to do so would be unlawful; (c) of Force Majeure; (d) the Grid is operating outside the Technical Limits; or (e) of any other circumstances, that MSEDCL so approves in
writing. 7.1.2 For operation and maintenance of the Project pursuant to Article
7.1.1 above, LEPL may:
(i) enter into a single O&M Contract with an Operator, or (ii) enter into a number of contracts for management services,
technical services, maintenance services, supply of spare parts and provision of other services as may be necessary for fulfilment of LEPL's operation and maintenance responsibilities under this Agreement, or
(iii) perform such O&M operations itself.
Provided that the operating personnel shall possess suitable qualifications and applicable Licenses as required under Law.
Provided further that the appointment of such Operator or such other contractors by LEPL shall not release LEPL of any of its responsibilities in this regard under this Agreement.
7.1.3 LEPL shall be responsible, at its own expense, for obtaining and
keeping in force all the Consents required for the operation of the Project in accordance with this Agreement throughout the Operation Period.
7.1.4 If any changes to this Article 7 are required to be made to ensure
the operation of the Project in line with the Indian Electricity Grid Code and the Law, such changes shall be made through mutual agreement of the Parties. In case the Parties are not able to mutually agree to such changes within 30 days, the matter shall be resolved by reference to the State Electricity Regulatory Commission.
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7.2 Operating Procedures 7.2.1 Not later than one hundred and twenty (120) days before the
Scheduled Synchronization Date, LEPL shall provide MSEDCL with a draft Operating Procedure dealing with all operation interfaces between CTU, the upstream power projects on the River Teesta and LEPL including, but not limited to, the method of day-to-day communication, clearances and switching practices, outage scheduling, capacity and energy reporting, operating log and Reactive Power support, which shall be consistent with this Agreement, Technical Specification, Indian Electricity Grid Code, (State Grid Code, if applicable) and Prudent Utility Practices.
7.2.2 within thirty (30) days of the receipt of the draft Operating
Procedures, MSEDCL shall notify LEPL of any amendments, deletions or additions that MSEDCL reasonably requires. Such amendments, deletions or additions shall not be inconsistent with this Agreement, the Technical Specification, the Indian Electricity Grid Code, (State Grid Code, if applicable) and Prudent Utility Practices.
7.2.3 The Operating Procedures shall be mutually finalized within thirty (30) days of the receipt of MSEDCL's comments under Article 7.2.2 above. If no agreement is reached on any issue, the Parties shall meet and resolve such issue, failing which the issue shall be referred to the State Electricity Regulatory Commission.
7.2.4 The Parties shall comply with the Operating Procedures
established pursuant to Article 7.2.3. The Parties may, by mutual agreement, amend the Operating Procedures at any time during the Term of Agreement, as may be required.
7.2.5 LEPL and MSEDCL may, from time to time, revise the Operating Procedures through mutual agreement, to make them conform to the prevailing Indian Electricity Grid Code (the State Grid code, if applicable), the Law or for any other purpose.
7.3 Annual Scheduled Outage Plan
7.3.1 Not later than the seventh (7th) day of October of every year, MSEDCL shall notify to LEPL of the anticipated levels of high demand and low demand periods for the following Operation Year and the restricted periods, not exceeding four months, in which Scheduled Outage is to be avoided subject to any outage as per Scheduled Outage plan not being possible to avoid due to any manufacturer recommendation.
7.3.2 Based on the information supplied by MSEDCL pursuant to Article 7.3.1, LEPL shall, within seven (7) days of receipt of such information, submit to MSEDCL in writing, its proposal for the Scheduled Outages in the following Operation Year alongwith such non outage period, not exceeding six months, during which Scheduled Outage may cause spillage of water.
7.3.3 Within fourteen (14) days of receiving LEPL’s proposal pursuant to Article 7.3.2 above, MSEDCL shall notify LEPL in writing whether LEPL’s proposal for Scheduled Outages for the following Operation Year is acceptable and, if not, MSEDCL shall notify the periods that would be acceptable, which shall :
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(i) adhere to the time limits required by the Laws relating to routine maintenance;
(ii) be consistent with the time limits required or recommended by the manufacturer or supplier of the equipment, Prudent Utility Practices and technical Specifications; and
(iii) be other than the non outage period notified in accordance with Article- 7.3.2 above.
7.3.4 LEPL may only object to a Scheduled Outage proposed by
MSEDCL on the grounds that it would be inconsistent with the requirements of Article 7.3.3. Unless LEPL objects in writing within seven (7) days after receiving the proposal, LEPL shall be deemed to have agreed to the Scheduled Outages proposed by MSEDCL. If LEPL does object to a proposed Scheduled Outage within such period, the Parties shall meet and resolve the difference within five (5) days of the date of LEPL’s communication of objection to MSEDCL, failing which the matter shall be referred to the State Electricity Regulatory Commission for resolution.
7.3.5 Not later than the thirtieth (30th) day of November of every year, LEPL shall provide the RPC secretariat / RLDC / SLDC, as the case may be, and MSEDCL, the Scheduled Outages for the following Operation Year, as agreed to by the Parties pursuant to Article 7.3.4.
7.3.6 Not later than the thirty first (31st) day of January of every year, the RPC secretariat / RLDC / SLDC, as the case may be, may modify the Scheduled Outages for the Project for the following Operation Year, which periods shall be notified by LEPL to MSEDCL.
7.3.7 In an emergency, the RLDC/SLDC may require LEPL to reschedule a confirmed Schedule Outage.
7.4 Annual Generation Plan
7.4.1 Not later than the fourteenth (14th) day of October of every year,
LEPL shall, along with the proposal for Scheduled Outages for the following Operation Year, submit to MSEDCL, LEPL's proposed Generation Plan ("Annual Generation Plan ").
The Annual Generation Plan shall include: (i) the availability of equipment taking into account:
(a) the Scheduled Outages; (b) the expected Maintenance Outages; (c) any other relevant factors; and
(ii) the expected generation based on latest information on the
water flow and to avoid spillage of water (so far as is possible).
7.4.2 Not later than the thirtieth (30th) day of November of every year, LEPL shall submit to the RDCs secretariat / RLDC / SLDC, as the
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case may be, and MSEDCL, the Annual Generation Plan for the following Operation Year consistent with the proposal for the annual Scheduled Outages for the following Operation Year finalized pursuant to Article 7.3.4.
7.4.3 Not later than the thirty first (31st) day of January of every year, the RPC secretariat / RLDC / SLDC, as the case may be, may modify the Annual Generation Plan while finalizing the Scheduled Outages for the following Operation Year and LEPL shall implement such modifications. LEPL shall forward such modified Annual Generation Plan to MSEDCL / Control Centre / RLDC, SLDC .
7.5 Review of Scheduled Outage and Annual Generatio n Plans
7.5.1 The Annual Scheduled Outage plan and the Annual Generation Plan referred to in Articles 7.3 and 7.4 respectively shall be subject, wherever found necessary, to quarterly and monthly review and modification by the RPC secretariat / RLDC / SLDC, in consultation with the relevant parties and such plan shall be implemented by LEPL.
7.6 Maintenance and Forced Outages
7.6.1 Whenever LEPL requires a Maintenance Outage, it shall advise
MSEDCL of the nature of the work to be carried out in accordance with the Operating Procedures, the estimated time required to complete such work and the latest time by which (in LEPL's opinion) the work should commence consistent with Prudent Utility Practices (which shall not be earlier than forty eight (48) hours after the time when LEPL advised MSEDCL of the need for the Maintenance Outage).
7.6.2 After discussing the matter with LEPL, MSEDCL shall advise LEPL of the time for commencement of the requested Maintenance Outage (which shall not be later than the latest time indicated by LEPL). LEPL shall use its reasonable endeavours consistent with Prudent Utility Practices to take the relevant Unit out of service at the scheduled time.
7.6.3 In case of a Forced Outage, LEPL shall inform MSEDCL / Control
Centre and RLDC telephonically followed by a message through fax within one hour of the outage, and justification for the Forced Outage shall be given in writing to MSEDCL as soon as possible but not later than 3 days of such Forced Outage.
7.7 Operation
Control Centre / RLDC shall issue Despatch Instructions directing LEPL to vary the Power Output and Reactive Power from the Project subject to the availability of water, Reactive Power capability of the Units, Prudent Utility Practices and the Technical Limits of the Project. The procedures for despatch of the Project shall be in accordance with Article 8.
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7.8 Emergency Plans
At least one hundred twenty (120) days before the Scheduled Synchronization Date, LEPL and CTU shall, in consultation with RLDC/Control Centre establish emergency plans for the Project including, without limitation, for situations such as recovery from a local or widespread electrical blackout, frequency drop, voltage reduction or any other emergency of the Grid.
7.9 Supply of Power in Emergency LEPL shall, during an emergency, as soon as possible after the receipt of a request from the RLDC, subject to availability of water and Prudent Utility Practices supply such power as the Project can generate. Provided that LEPL shall not be obligated to operate beyond the Technical Limits if LEPL is of the reasonable belief that as a result of such operation, a serious likelihood of damage to a Unit or Units may arise. If a Scheduled Outage or Maintenance Outage occurs at the time of an emergency, LEPL shall make all reasonable efforts to reschedule the Scheduled Outage or Maintenance Outage, or if the Scheduled Outage or Maintenance Outage has already begun, expedite the completion of such outage to restore supply of power as soon as possible.
7.10 De-Silting Operation
LEPL shall, subject to Prudent Utility Practice, carry out any de-silting operations required to maintain the reservoir waterways at the design conditions.
7.11 Efficient and Reliable Operation
LEPL shall install, operate, and maintain a control system that will ensure efficient utilization of water (and the head and discharge existing at the time), taking into account the Power Output and the Energy Output requested by the Despatch Instructions by optimizing the number of Units in operation in accordance with their individual efficiency characteristics and Prudent Utility Practices.
7.12 Maintenance of Operating Records
7.12.1 Each Party shall maintain complete and accurate records and all other data required for proper administration and implementation of this Agreement. LEPL agrees to maintain an accurate and up-to-date operating log at the Project with records of:
(i) Billable Energy for each Settlement Period;
(ii) Deemed Generation along with the amount of water spilled
during the relevant Settlement Period;
(iii) Head and discharge of water;
(iv) Changes in operating status, Scheduled Outages and Maintenance Outages;
(v) Details and times of Grid failure and operation of Grid
outside the Technical Limits;
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(vi) Any emergency conditions and unexpected occurrences discovered during inspections.
7.12.2 The Control Centre shall maintain the following records, provided
that the Control Centre is MSEDCL’s own control centre:
(i) Declared Capacity and Despatched Power for each Settlement Period;
(ii) Power Output and Energy Output for each Settlement
Period; (iii) Billable Energy for each Settlement Period; (iv) Deemed Generation and Deemed Power, along with the
amount of water spilled during the relevant Settlement Period;
(v) Details and times of Grid failure and operation of Grid
outside the Technical Limits
7.13 Examination of Records Either Party shall have the right, upon reasonable prior written notice to
the other Party, to examine the records, documents and data of the other Party relating to operation, maintenance, and despatch of the Project to the Grid at any time during normal business hours and at any time during the continuation of any dispute in respect of any matter to which such records relate. All such records shall be maintained for a minimum of sixty (60) months after the creation of such records, documents or data. Provided that the Parties shall not dispose off or destroy any such records after such sixty (60) month period without thirty (30) days' prior written notice to the other Party. Notwithstanding the above, the records of head and discharge of water shall be maintained throughout the Operation Period.
7.14 Monitoring Notice
Whenever MSEDCL has reason to believe that the Project may not be capable of performing consistently with the declarations contained in the Daily Generation Capability Schedule or the Revised Generation Capability Schedule, it may issue a notice to LEPL specifying that it wishes to monitor the Declared Capacity ("Monitoring Notice") which shall state : (i) Its reason for believing that the Project may not be capable of so
performing; and (ii) The period over which the monitoring shall continue. MSEDCL shall be entitled to issue not more than two (2) Monitoring Notices in any Week. LEPL shall not be entitled to any compensation whatsoever by reason of such monitoring of the Project.
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7.15 Desynchronisation of Project In the event of Desynchronisation of the Project from the Grid to avoid injury to personnel or damage to the Project, MSEDCL shall not be required to pay any Deemed Generation charges to LEPL for that period. Immediate notice shall be sent to the MSEDCL in the event of such desynchronisation.
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ARTICLE 8
SCHEDULING AND DESPATCH 8.1 General
8.1.1 The objective of scheduling and despatch is to ensure that
scheduling and despatch are in conformity with the IEGC and that LEPL coordinates and complies with such Despatch Instruction issued by Control Centre to ensure the integrity of the Grid, the security and the quality of supply. If any changes to Article 8.2 through Article 8.7 are required to be made to ensure the operation of the Project in line with the Indian Electricity Grid Code and the Law, such changes shall be made through mutual agreement of the Parties.
8.1.2 LEPL shall co-ordinate with the Control Centre on all activities pertaining to control and operation of the Project.
8.1.3 The Control Centre shall be the load control centre designated from time to time by MSEDCL to which the generation notices of LEPL including the Daily Generation Capability Schedule and Revised Generation Capability Schedule are issued by LEPL, and which, in turn shall notify the RLDC, SLDC and the Purchaser of all such generation notices. MSEDCL shall:
(i) notify LEPL, the details of the initially designated Control
Centre not later than the date required for submission of the first draft of the Operating Procedures pursuant to Article 7.2;
(ii) under normal circumstances, give LEPL at least thirty (30) days notice of any change in the Control Centre
8.1.4 not used
8.2 Daily Generation Capability Schedule and Daily Drawal Schedule 8.2.1 By 9:30 hours every day, LEPL shall, by issuing a Daily
Generation Capability Schedule, notify in respect of the following day, the Control Centre, the Purchaser and MSEDCL: (i) The Declared Capacity for each Settlement Period; (ii) The Scheduled Outage and expected Maintenance Outage
(if any); (iii) The expected water flow and the expected head for each
Settlement Period;
(iv) The expected diurnal storage during Peak Hours (if
applicable);
(v) the Energy Output from 00:00 hours to 24:00 hours; and
(vi) the machine availability for each Settlement Period.
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LEPL shall issue the Daily Generation Capability Schedule in such a manner as to avoid spillage of water from the Project to the extent possible.
8.2.2 By 10.00 hours every day, upon the receipt of the Daily
Generation Capability Schedule notified by LEPL pursuant to Article 8.2.1, the Control Centre will advise the RLDC / SLDC of the MW and MWh capability and other relevant data as in Article 8.2.1, for each Settlement Period of the following day.
8.2.3 By 15.00 hours every day, upon the receipt of the advice of the Control Centre / RLDC pursuant to Article 8.2.2, the SLDC will advise the RLDC on the Daily Drawal Schedule for the following day.
8.3 Daily Despatch Schedule
8.3.1 By 17.00 hours every day, the RLDC will issue the Daily Despatch
Schedule to the Control Centre in respect of the following day. The Daily Despatch Schedule will contain, among other things, the Despatched Power and the Declared Capacity.
8.3.2 By 17:30 hours every day, the Control Centre will issue the Daily
Despatch Schedule to LEPL, for the following day.
8.4 Revised Generation and Drawal Schedules
In the event of any foreseen change in the capability of the machines or the hydrology/water availability, LEPL shall issue a Revised Generation Capability Schedule. By 21:30 hours every day, LEPL shall notify the Control Centre, the SLDC, the CTU and MSEDCL, of any change in its Daily Generation Capability Schedule by issue of a Revised Generation Capability Schedule for the following day, if so required. By 22:00 hours every day, the SLDC may also advise the RLDC, any change in its Daily Drawal Schedule by issuing a Revised Drawal Schedule to the RLDC.
8.5 Revised Despatch Schedule
By 23.00 hours every day, upon the receipt of the Revised Generation Capability Schedule of LEPL and/or the Revised Drawal Schedule of the SLDC pursuant to Article 8.4, the RLDC shall issue the Revised Despatch Schedule to the Control Centre for the following day and the Control Centre shall inform LEPL of the same by 23:30 hours.
8.6 Revised Schedules during the operation day
8.6.1 During the course of the day of operation, in the event of any
contingency due to Forced Outage, or any other unforeseen reason:
(a) LEPL shall notify the Control Centre, RLDC and MSEDCL
of any change in the Daily Generation Capability Schedule by issuing a Revised Generation Capability Schedule; and
(b) The SLDC may also notify the RLDC of any change in the
Daily Drawal Schedule due to change in demand by MSEDCL or any other reason by issuing a Revised Drawal Schedule.
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Provided that all such Revised Generation Capability Schedules or Revised Drawal Schedules issued pursuant to the Article 8.6.1 shall be effective after the time period specified in the IEGC from time to time, from the time of receipt of such revised schedule by the RLDC.
8.6.2 On receipt of the Revised Generation Capability Schedule or
Revised Drawal Schedule pursuant to Article 8.6.1, the RLDC shall issue the Revised Despatch Schedule to the Control Centre and SLDC for the remaining part of the day. The Control Centre shall in turn notify LEPL of the same.
8.6.3 LEPL shall coordinate with the Control Centre and comply with the
change in the revised schedules notified by the Control Centre. LEPL shall also comply with instructions issued directly by the RLDC / SLDC in the case of a Grid emergency.
8.7 Implementation of Despatch Instructions
LEPL shall always be in compliance with the instructions of the RLDC. In case of any conflict of instructions to LEPL by the RLDC and the Control Centre, the RLDC instructions shall prevail, and LEPL shall follow such instructions. To preserve the integrity of the Grid under any emergency, the RLDC may issue Despatch Instructions to change the Power Output and/or Reactive Power output of the Project even when this requires the Unit(s) to operate outside the Technical Limits and LEPL shall comply with the Despatch Instructions except on the grounds of safety of its personnel, equipment or apparatus or the integrity of the Unit(s)/Project.
8.8 Unscheduled Interchange In the event of variation between:
(i) Power Output, and (ii) The Despatched Power notified by the Control Centre in its Daily
Despatch Schedule or the Revised Despatch Schedule during any Settlement Period, LEPL shall pay or receive, as the case may be, the Unscheduled Interchange charges, without any liability to MSEDCL, in accordance with the CERC Tariff Regulations, until such time as the provisions of the ABT Order pertaining to Unscheduled Interchange is in force and applicable to this Project. The transaction (payment and receipt) in respect of such Unscheduled Interchange charges shall be in accordance with the CERC Tariff Regulation applicable to the Project in accordance with Law. If the Unscheduled Interchange charges become payable by MSEDCL due to reasons attributable to LEPL, any such payment made by MSEDCL shall be reimbursed by LEPL to MSEDCL. Any payments in respect of Unscheduled Interchange charges received by MSEDCL on account of generation from the Project shall be passed on to LEPL as and when such payments are actually received by MSEDCL.
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8.9 Deemed Power If the Control Centre or RLDC issues a Daily Despatch Schedule/
Despatch Instruction to LEPL such that in a Settlement Period, the Despatched Power is less than the Declared Capacity indicated in the Daily Generation Capability Schedule or the Revised Daily Generation Capability Schedule as the case may be, and if the same results in spillage of water from the Project. The quantum by which the Despatched Power is less than the Declared Capacity subject to the spillage of water, shall be the Deemed Power. Further, it is clarified that in the event LEPL does not receive the Daily Despatch Schedule or the Despatch Instruction then the Declared Capacity subject to the spillage of water shall be the Deemed Power.
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ARTICLE 9
INTERCONNECTION, TRANSMISSION, METERING AND ENERGY ACCOUNTING
9.1 Interconnection Facilities and Transmission Fac ilities
9.1.1 Responsibilities
LEPL shall be responsible for the design, construction, Commissioning, operation and maintenance of: (i) the Interconnection Facilities of LEPL; and
(ii) the Tie Line upto the Interconnection Point. MSEDCL shall enter into a Bulk Power Transmission Agreement with the CTU, in accordance with the CERC Interstate Transmission Regulations, for wheeling of Energy Output and LEPL will be a party to the said Agreement, if necessary. All cost of bulk power transmission from the Delivery Point of the Project to the MSEDCL receiving point shall be borne by MSEDCL.
9.1.2 Connection Agreement
For facilitating evacuation of the Energy Output, MSEDCL shall enter into a Connection Agreement with the CTU /Project State Utility and LEPL will be a party to the said Agreement, if necessary. Such Connection Agreement shall include provisions for:
(i) Wheeling charges of the CTU /Project State Utility and
transmission losses between the Interconnection Point and the Delivery Point for the term of the Agreement;
(ii) A condition requiring both parties to comply with the IEGC; (iii) Details of connection, technical requirements and
commercial arrangements. (iv) Details of any capital expenditure arising from any
necessary reinforcement or extension of the system and demarcation of the same between the concerned Parties;
(v) Site responsibility schedule; (vi) General philosophy, guidelines, etc. on protection; (vii) Granting of easements and rights of way to the CTU;
9.1.3 Breakdown of the Grid and / or Non Availability of Open Access except Force Majeure
In the event that Energy Output is not evacuated due to breakdown of the Grid and/or non-availability of open access due to any reason save and except the Force Majeure.:
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(i) MSEDCL shall not make any Tariff Payments to LEPL (and Deemed Generation shall not apply) for the period of such Grid breakdown and/or disruption, if such period of breakdown and/or disruption lasts for not more than one hundred and seventy five (175) hours on a cumulative basis in any Tariff Year, provided however that in the event of non-availability of open access, MSEDCL shall make Tariff Payments for Deemed Generation in accordance with this Agreement to the LEPL for the total period of such non availability of open access.;
(ii) MSEDCL shall make Tariff Payments for Deemed Generation in
accordance with this Agreement to LEPL for the period of such Grid breakdown exceeding one hundred and seventy five (175) hours on a cumulative basis in any Tariff Year. The Parties agree and acknowledge that the Grid break down or non-availability of open access due to any reason save and except the Force Majeure shall not qualify as Force Majeure and subject to the provisions of Articles 4.3.5, 4.3.6 and except as otherwise provided in Article 9.1.3(i), MSEDCL shall be under an unqualified obligation to make Tariff Payment to LEPL for Deemed Generation in the events of Grid breakdown and/or non availability of open access.
9.2 Metering
9.2.1 Installation of Meters
All Meters shall be installed by LEPL at its own cost. Each Meter shall be of static type, 0.2% accuracy class confirming to latest IEC-687 and shall meet the requirements of IEGC. The recording of each Meter shall include, as a minimum: (a) Energy Output during each Settlement Period, (b) Average Power Output during each Settlement Period, (c) Frequency during each Settlement Period, and (d) year, Month, day, hour and minute of start and end of each
Settlement Period. A set of Meters comprising (a) a set of Main Meters and (b) a set of Check Meters shall be installed by LEPL on each circuit of the transmission lines at each end so as to record both (a) energy exported by the Project to the Grid and (b) energy imported by the Project from the Grid.
One such set of Meters shall be installed by LEPL before the Interconnection Point on the Tie-Line and in case of loop in and loop out of transmission line of Project State Utility after the Interconnection Point: (i) On the loop in line, and
(ii) On the loop out line. One complete spare set of tested, calibrated and sealed Meters shall be kept in safe custody of LEPL. All such Meters shall be sealed in the presence of the CTU (or the Project State Utility) and LEPL, which seal shall remain intact unless it is broken by the Testing Laboratory for testing and calibration.
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9.2.2 Testing and Calibration of Meters
All the Main Meters and Check Meters shall be tested and calibrated by a reputed Testing Laboratory. The Meters (and associated circuits, if necessary) shall be tested and calibrated in accordance with the provisions set out in the Connection Agreement and IEGC, at least once in two (2) Tariff Years, or at any time when the difference between the readings of the Main Meter and the corresponding Check Meter is found to exceed zero point four percent (0.4%). LEPL shall bear the cost of testing and calibration of the Meters. The Meters shall be sealed in the presence of MSEDCL, CTU and LEPL. MSEDCL and CTU, if desires, may also witness, at their cost, such testing and calibration of the Meters. The Meter calibration report of the Testing Laboratory shall be jointly signed by the parties witnessing the calibration and the Meter calibration report shall be furnished to all the parties concerned. The Party, which requests for any additional testing and calibration of the Meters, shall bear the cost of such testing and calibration. A notice of seven (7) days shall be issued by the Party which arranges for such testing and calibration, to enable authorized representatives of the other parties to witness the testing and calibrating of Meters.
9.2.3 Inaccuracy of Meters
(i) If during any testing and calibration, a Main Meter is found
to be within zero point two percent (0.2%) permissible limit of error and the corresponding Check Meter is found to be beyond such limit of error, the Monthly Bill shall be as per the reading of the Main Meter. The corresponding Check Meter shall be replaced forthwith with the spare tested Meter and the defective Check Meter shall be repaired and calibrated by the Testing Laboratory or replaced by a new and tested Check Meter.
(ii) If during any testing and calibration, a Main Meter is found
to be beyond zero point two percent (0.2%) permissible limit of error but the corresponding Check Meter is found to be within limit of error, the Monthly Bill shall, for that Month and till the date and time of the repair and calibration or replacement of the defective Main Meter, be as per the reading of the Check Meter. The corresponding Main Meter shall be replaced forthwith with a spare tested and calibrated Meter, and the defective Main Meter shall be repaired and calibrated by the Testing Laboratory or replaced by a new and tested Main Meter.
(iii) If during any testing and calibration, a Main Meter and the
corresponding Check Meter are both found to be beyond zero point two percent (0.2%) permissible limit of error, both the Meters or at least the Main Meter shall be replaced forthwith with a spare tested calibrated Meter.
(iv) For the purpose of payment adjustment under (iii) above
for a period: (a) Commencing from the earlier of:
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(i) the time when the difference between the
readings of the Main Meter and the Check Meter exceeded zero point four percent (0.4%), or
(ii) the time when both the Main Meter and the
Check Meter were found to be beyond permissible error; and
(b) ending on the date of replacement by:
(i) new and tested Meters, or
(ii) repair, calibration and reinstallation of the
old Meters,
The Power Output and Energy Output shall be recalculated as ninety nine percent (99%) of the metered gross power and gross energy respectively at generator terminals.
(v) If both the Main Meter and Check Meter fail to record, then
the Tariff shall be computed for that period of defect or failure by calculating the Power Output and Energy Output as ninety nine percent [99%] of the metered gross power and gross energy respectively at generator terminals. .
9.2.4 Daily Meter Output
Meter output of the Main Meters and Check Meters installed at the Delivery Point shall be taken as at 24:00 hours on each day and the following data shall be furnished by LEPL to MSEDCL by 12:00 hours on the following day: (i) total Energy Output and the corresponding Billable Energy
from 00:00 hours to 24:00 hours of the relevant day; (ii) the Energy Output during Peak Hours of the relevant day; (iii) Deemed Generation from 00:00 hours to 24:00 hours of
the relevant day; and (iv) Deemed Generation during Peak Hours of the relevant
day. 9.2.5 Weekly Meter Output Weekly Meter output of the Main Meters and Check Meters
installed at the Delivery Point shall be taken by LEPL as at 24:00 hours on each Sunday, for the preceding Week, and such Meter output shall be delivered by LEPL to MSEDCL by 17:00 hours on the following Monday, accompanied by the data in accordance with Article 9.2.6.
Provided that such Meter output and other data shall be subject to
change in accordance with the Regional Energy Account.
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9.2.6 Weekly Meter Output and other Data On the Monday of each Week, along with the Weekly Meter output
pursuant to Article 9.2.5, LEPL shall furnish the following data to MSEDCL for the previous Week (along with a soft copy by courier and / or electronic mail):
(a) The total Energy Output
(i) During the relevant Week; and
(ii) Upto the last day of the relevant Week commencing
from the first (1st) day of the Tariff year,
(b) Deemed Generation during each day of the relevant Week; (c) the Energy Output and the Deemed Generation during the
Peak Hours and Off-peak Hours in each Settlement Period of each day of the relevant Week;
9.2.7 Data for Monthly Billing by LEPL
On or before the fifth (5th) day of each Month, LEPL shall furnish the following data along with the Monthly Bill (along with a soft copy by courier and / or electronic mail) for Billable Energy during the previous Month: (i) The total Energy Output and corresponding Billable Energy
during the relevant Month, and upto the last day of the relevant Month, commencing from the first (1st) day of the Tariff Year;
(ii) The Deemed Generation upto the last day of the relevant
Month, commencing from the first (1st) day of the Tariff Year;
(iii) The Energy Output and the Deemed Generation during the
Peak Hours and Off-peak Hours of each day of the relevant Month;
(iv) LEPL shall submit relevant documents and detailed
calculation in support of the claim of Deemed Generation;
9.2.8 LEPL and MSEDCL shall each maintain, in respect of the Project:
(i) all Daily Generation Capability Schedules and Revised Generation Capability Schedules and corresponding Daily Despatch Schedules and Revised Despatch Schedules;
(ii) all Meter records;
(iii) all data collected for the purpose of Article 9.2.6 and 9.2.7
above;
(iv) records of the Annual and Monthly Generation Schedule;
(v) records of Scheduled Outages, Maintenance Outages, Forced Outages and any other restrictions or limitations
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affecting the Rated Capacity or any Project Capacity Test; and
(vi) any other records in relation the Energy Output and the Power Output.
Such records may be inspected by the other Party during normal business hours upon reasonable written notice of the same (including at any time during the pendency of any breach under this Agreement).
9.3 Energy Accounting 9.3.1 Regional Energy Account
The appropriate authority shall issue Regional Energy Accounts (REA) based on the data provided by the RLDC and output of the Main Meters and Check Meters delivered by LEPL pursuant to Article 9.2.4 through 9.2.7 and such REAs shall be subject to subsequent corrections by the appropriate authority. The REA as finalized shall be binding on the Parties. The values of the Deemed Generation, used for determination of Tariff Payment in the previous Monthly Bills and Supplementary Bills shall be adjusted in accordance with the finalized REA. Accordingly, LEPL or MSEDCL, as the case may be, shall raise a Supplementary Bill for adjustment of the Tariff Payment or any other amounts due.
If the energy delivered by the Project/ at the Delivery Point as per the REA differs from that computed in accordance with the Despatched Power, notified by the RLDC in its Despatch Schedule or Revised Despatch Schedule, the adjustment in the computation of the energy and power for the purpose of Tariff Payment shall be made in accordance with Section-3 of Schedule-D
9.3.2 Determination of Deemed Power and Deemed Gene ration
The Deemed Power and Deemed Generation arising out of Despatch Instructions shall be determined based on the Daily Despatch Schedule/ Despatch Instructions / directions issued by the Control Centre / RLDC and to the extent of the water spillage from the Project on account of such Daily Despatch Schedule/ Despatch Instructions. The determination of quantity of water spillage from the Project for the purpose of calculating Deemed Generation shall be done in accordance with the mechanism set out in Schedule F.
9.4 Load Despatch Centre charges
All RLDC / SLDC charges applicable beyond the Delivery Point shall be borne by MSEDCL.
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ARTICLE 10
BILLING AND PAYMENT
10.1 General From the Commercial Operation Date , MSEDCL shall pay LEPL Monthly Tariff Payment for every Tariff Year, determined in accordance with this Article 10. All Tariff Payments by MSEDCL shall be in Indian Rupees.
10.2 Delivery of Monthly Bills LEPL shall issue to MSEDCL on or before the fifth (5th) day of each Month, a signed Monthly Bill for the Billable Energy for the immediately preceding Month, provided that the first Monthly Bill shall be issued for the period commencing from the COD until the last day of such Month. Each Monthly Bill shall include:
(i) Energy Output for the relevant Month referred to in Article 9.2.7; (ii) LEPL's computation of Billable Energy; (iii) LEPL's computation of Payment Surcharge and/ or Tariff
Adjustment Payment, if any; (iv) LEPL's computation of Monthly Tariff Payment for the relevant
Month; and (v) Supporting data, documents and calculations and Due Date in
accordance with this Agreement.
10.3 Payment of Monthly Bills 10.3.1 Both Parties expressly agree that the essence of Articles 10.3 and
10.4 is timely payment by MSEDCL for the Billable Energy in accordance with this Agreement.
10.3.2 MSEDCL shall remit the amount payable under Monthly Bill on the Due Date to the Designated Account of LEPL, as shall have been previously notified by LEPL to MSEDCL in accordance with 10.3.4 below. Payment through drawdown of Letter of Credit or from the Escrow Account shall be deemed to be a payment made in the normal course of business.
10.3.3 All payments required to be made under this Agreement shall be made without any deduction or set off except for:
(i) deductions required by the Law; (ii) any debit note raised by MSEDCL in relation to payment
under this Agreement.
10.3.4 LEPL shall open a separate bank account at Mumbai (the "Designated Account ") for all Tariff Payments to be made by MSEDCL to LEPL, and notify MSEDCL of the details of such account at least thirty (30) days before the dispatch of the first Monthly Bill to MSEDCL. MSEDCL shall instruct its bankers to make all payments under this Agreement to the Designated Account and shall notify LEPL of such instructions on the same day. The date of such instruction shall be deemed to be the date of payment by MSEDCL under this Agreement.
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10.3.5 In the event of delay in payment of a Monthly Bill by MSEDCL or Supplementary Bill, beyond the Due Date, a Payment Surcharge shall be payable by MSEDCL to LEPL at a rate of interest equal to late payment surcharge rate declared by CERC from time to time (presently 1.25% per month as per the CERC Tariff Regulations) as applicable for that period, on the outstanding amount of payment, calculated on a day to day basis for each day of the delay. Such Payment Surcharge shall be added to the amount of the Monthly Bill or Supplementary Bill as the case may be, and MSEDCL shall make payments to LEPL accordingly. In the event of no such late payment surcharge rate being notified by CERC, the Payment Surcharge shall be payable at a rate which shall be the State Bank of India Prime Lending Rate as applicable for that period, plus two percent (2%) per annum.
10.4 Payment Security Mechanism
10.4.1 MSEDCL shall provide Payment Security Mechanism to LEPL
in respect of payment of Monthly Bills in the form of a monthly revolving and irrevocable Letter of Credit opened and maintained by MSEDCL, which may be drawn upon by LEPL in accordance with Articles 10.4.2 through 10.4.6;
10.4.1.1 Not later than one (1) Month prior to the COD of
the first (1st) Unit, MSEDCL shall through a scheduled bank at Mumbai, open a revolving and irrevocable Letter of Credit in favour of LEPL, to be made operative from a date prior to the Due Date of the first Monthly Bill under this Agreement. The Letter of Credit shall be valid for twelve (12) Months and shall be reinstated automatically by the bank for payment of Monthly Bills for a period of twelve (12) months and the Letter of Credit shall be renewed and maintained valid for a period of twelve (12) months every year, for an amount equal to:
(i) During the first Tariff Year, the quantum of
projected Electrical Output for the first Tariff Year (such projection being made by LEPL to MSEDCL prior to the COD of the Project) multiplied by Annual Fixed Tariff for the first Tariff Year; and
(ii) During the subsequent Tariff Year(s),
aggregate of the Monthly Bills and Supplementary Bills raised by LEPL in the immediately previous Tariff Year.
Provided that LEPL shall not draw upon such Letter of Credit prior to the Due Date of the relevant Monthly Bill, and not more than one drawal shall be made in a Month;
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10.4.1.2 MSEDCL shall cause the scheduled bank issuing the irrevocable Letter of Credit to intimate LEPL regarding establishing of such irrevocable Letter of Credit to LEPL in writing.
10.4.1.3 If MSEDCL fails to pay a Monthly Bill or part
thereof within and including the Due Date, then, subject to Article 10.5.7, LEPL may draw upon the Letter of Credit for an amount equal to such Monthly Bill or part thereof plus Payment Surcharge, if applicable in accordance with Article 10.3.5 above, by presenting to the scheduled bank, issuing the Letter of Credit, the following documents:
(i) a copy of the Monthly Bill which has
remained partly or fully unpaid by MSEDCL; (ii) a certificate from LEPL to the effect that the
Monthly Bill at item (i), or specified part thereof, has remained unpaid beyond the Due Date;
(iii) a copy of a Letter from MSEDCL forwarding
the cheque for the payment of the Bill Amount or any part thereof. (Such Letter shall be issued by MSEDCL within 48 hours from the date of payment); and
(iv) calculations of applicable Payment
Surcharge in accordance with Article 10.3.5.
10.4.1.4 MSEDCL shall ensure that the Letter of Credit shall be renewed not later than 30 days prior to its expiry. In the event that the amount available in the Letter of Credit remains un-restored for a period of thirty days of its last draw down, such event shall be treated as a MSEDCL Event of Default and provisions of Article 15.5 shall apply.
10.4.1.5 All costs relating to opening, maintenance and
renewal of the Letter of Credit including commitment and usance shall be borne by MSEDCL.
10.4.1.6 not used
10.4.2 To provide additional security to LEPL for MSEDCL’s payment
obligation hereunder, MSEDCL shall open an Escrow Account with any of the scheduled banks, which account shall be maintained by such bank as agent for LEPL, and which shall be pledged as security to LEPL and its Lenders for payment of all sums due to LEPL by the MSEDCL under the Monthly Bills under this Agreement. Such Account shall be opened on or before the date thirty (30) days prior to the COD of the first Unit. Such Account shall be funded with revenues from payments due to the MSEDCLand amount shall be equal to 105% of the relative Letter of Credit.
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For the operation of Letter of Credit and escrow arrangement, the parties shall enter into a separate Escrow Agreement.
10.4.3 Order of Precedence
LEPL shall present Monthly Bills to MSEDCL for direct
payment by MSEDCL as per this Article. In case of non-payment, or partial payment of such Monthly Bill by MSEDCL, LEPL shall take recourse to the Letter of Credit on or prior to the Due Date. In case of the claim of LEPL not yet being fully satisfied, LEPL shall take recourse to the Escrow Account as per the Escrow Agreement for the un-paid amount plus Payment Surcharge. This provision is without prejudice to any other right or remedy of LEPL under this Agreement.
10.5 Disputed Bill
10.5.1 If MSEDCL does not dispute a Monthly Bill or a Supplementary
Bill raised by LEPL within thirty (30) days of receiving it, such bill shall be taken as conclusive.
Provided that in case any evidence from an outside source relating to any discrepancy in such Monthly Bill or a Supplementary Bill comes to notice at a later date, the affected Party may dispute such Monthly Bill or a Supplementary Bill within a period of thirty (30) days of disclosure of such evidence.
10.5.2 If MSEDCL disputes the amount payable under a Monthly Bill or a
Supplementary Bill, as the case may be, it shall, within thirty (30) days of receiving such bill, issue a notice (the "Bill Dispute Notice ") to LEPL setting out: (i) the details of the disputed amount; (ii) its estimate of what the correct amount should be; and (iii) all written material in support of its claim.
10.5.3 If LEPL agrees to the claim raised in the Bill Dispute Notice issued
pursuant to Article 10.5.2, LEPL shall revise such Monthly Bill or a Supplementary Bill within fifteen (15) days of receiving such notice and make a refund to MSEDCL within thirty (30) days of receiving such notice.
10.5.4 If LEPL does not agree to the claim raised in the Bill Dispute
Notice issued pursuant to Article 10.5.2, it shall, within fifteen (15) days of receiving the Bill Dispute Notice, furnish a notice to MSEDCL providing: (i) reasons for its disagreement; (ii) its estimate of what the correct amount should be; and (iii) all written material in support of its counter-claim.
Upon receipt of such notice of disagreement to the Bill Dispute Notice, authorized representative(s) or a director of the board of
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directors of each Party shall meet and make best endeavours to amicably resolve the dispute within fifteen (15) days of receiving such notice of disagreement to the Bill Dispute Notice.
10.5.5 If the Parties do not amicably resolve the dispute within fifteen (15) days of receipt of notice of disagreement to the Bill Dispute Notice pursuant to Article 10.5.4, the matter shall be referred to State Electricity Regulatory Commission or arbitration in accordance with Article 14.
10.5.6 Notwithstanding the Bill Dispute Notice issued pursuant to Article
10.5.2, all amounts under a Monthly Bill or a Supplementary Bill shall be paid by MSEDCL by the Due Date, and the existence of a dispute relating to a bill shall not relieve LEPL of its obligations under this Agreement, provided that such payments, shall be without prejudice to the rights of MSEDCL under this Agreement.
10.5.6A A Supplementary Bill due to Change in Law, which if disputed by
MSEDCL shall be payable by MSEDCL to LEPL only upon conclusion of Arbitration and in accordance with the Award. Any delay or failure to pay such amounts in accordance with the Arbitration Award shall attract Payment Surcharge.
10.5.7 If a dispute regarding a Monthly Bill or a Supplementary Bill is settled pursuant to Article 10.5.4 or by Arbitration in favour of the Party that issues a Bill Dispute Notice, the other Party shall refund the amount incorrectly charged by it from the disputing Party within five (5) days of the dispute either being amicably resolved by the Parties pursuant to Article 10.5.4 or settled by State Electricity Regulatory Commission or arbitration in accordance with Article 10.5.5 along with interest. Such interest shall accrue on a day to day basis for the period between the date of payment of the disputed bill and receipt of refund by the disputing Party at a rate equal to the late payment surcharge rate notified by CERC from time to time applicable for that period. In the event of no late payment surcharge rate being notified by CERC, the rate of Interest shall be the State Bank of India Prime Lending Rate, as applicable for that period, plus two percent (2%) per annum.
10.6 Change in Law Claim and Payment
10.6.1 Subject to Change in Law provisions in Article 12, the procedure
for claim and payment set out in this Article 10.6 applies if a Change in Law occurs.
Provided that any payment on account of a Change in Law claim shall normally be made through Tariff Adjustment Payment and until such time through:
(i) Issue of a Supplementary Bill by the Party which claims the
Change in Law; and
(ii) Payment by the other Party against such Supplementary Bill.
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10.6.2 The Tariff Adjustment Payment for Change in Law shall be determined in accordance with Article 12.2 and such adjustments shall take place once in a Tariff Year. Until such Tariff Adjustment Payment, payment for Change in Law shall be made through Supplementary Bills.
10.6.3 For claiming a Change in Law event under this Article, LEPL shall
issue a notice to MSEDCL as soon as reasonably practicable after it becomes aware of the Change in Law event, but not later than six (6) months after the date of notification of such Change in Law. MSEDCL may also issue a notice to LEPL for claiming a Change in Law under this Article after it becomes aware of such Change in Law event, but not later than six (6) months after the date of notification of such Change in Law.
10.6.4 A Change in Law notice issued by any Party must, inter alia, contain:
(i) precise details of the applicable Change in Law; (ii) the estimated impact of such applicable Change in Law; (iii) the estimated Tariff Adjustment Payment; and (iv) All documents and calculations in support of Change in
Law claim.
10.6.5 In the event the Change in Law notice is issued by MSEDCL to LEPL, LEPL shall notify in writing its consent to or disagreement with such notice to MSEDCL within a period of forty five (45) days of receipt of such notice.
In the event the Change in Law notice is issued by LEPL to
MSEDCL, MSEDCL shall notify in writing its consent to or disagreement with such notice to LEPL within a period of forty five (45) days of receipt of such notice. Provided that if MSEDCL notifies its consent to LEPL in relation to a Change in Law notice issued by LEPL, LEPL and MSEDCL shall issue an amendment to effect the agreed change in Tariff within thirty (30) days of reaching such agreement. Provided that if LEPL notifies its consent to MSEDCL in relation to a Change in Law notice issued by MSEDCL, LEPL and MSEDCL shall issue an amendment to effect the agreed change in Tariff within thirty (30) days of reaching such agreement. Provided further that if either Party notifies its disagreement with the subject matter of such notice, such disagreement shall be settled in accordance with the procedure laid down in Article 14. The Arbitration Award shall be binding on the Parties. In case any Party does not participate in the Arbitration process, it shall also be bound by such Arbitration Award.
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10.7 Quarterly and Annual Reconciliation Both Parties acknowledge that all payments made against Monthly Bills and Supplementary Bills shall be subject to quarterly reconciliation at the end of each quarter of each Tariff Year and annual reconciliation at the end of each Tariff Year to take into account REA, Tariff Adjustment Payments or any other reasonable circumstance provided under this Agreement. The Parties, therefore, agree that as soon as all such data in respect of any quarter of a Tariff Year or a full Tariff Year as the case may be, has been finally verified and adjusted, the Parties shall jointly sign such reconciliation statement. Within fifteen (15) days of signing of a reconciliation statement, LEPL or MSEDCL, as the case may be, shall raise a Supplementary Bill for the Tariff Adjustment Payment for the relevant Tariff Year and payment of such Supplementary Bill shall be made in accordance with Article 10.8.
10.8 Payment of Supplementary Bill
10.8.1 Either Party may raise a bill on the other Party ("Supplementary Bill ") for payment on account of:
(i) Adjustments required by the REA, (ii) Tariff Adjustment Payment And such Supplementary Bill shall be paid by the other Party.
10.8.2 MSEDCL shall remit all amounts due under a Supplementary Bill raised by LEPL to LEPL's Designated Account by the Due Date and notify LEPL of such payment on the same day. Similarly, LEPL shall pay all amounts due under a Supplementary Bill raised by MSEDCL by the Due Date to MSEDCL's designated bank account and notify MSEDCL of such remittance on the same day. In the event of delay in payment of a Supplementary Bill by either Party beyond the Due Date, a Payment Surcharge as applicable to Monthly Bills pursuant to Article 10.3.5 shall be payable. The Payment Surcharge shall be applicable on the outstanding amount of payment, calculated on a day to day basis for each day of delay beyond Due Date and such Payment Surcharge shall be added to the amount of the Supplementary Bill and payment shall be made accordingly.
Provided that Supplementary Bills raised by LEPL for Change in
Law, and not disputed by MSEDCL, shall be paid within 30 Business Days of receipt, by MSEDCL.
10.9 Payment for Construction and Start-up Power
LEPL shall pay the Project State Utility / CTU for the power and energy consumed, if any, for start up of the Units in accordance with the Connection Agreement or other such agreements as the Project State Utility / CTU may require LEPL to execute.
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ARTICLE 11
FORCE MAJEURE
11.1 Definitions In this Article 11, the following terms shall have the following meanings: 11.1.1 Affected Party
Means LEPL or MSEDCL, whose performance has been affected by an event of Force Majeure. An event of Force Majeure affecting the CTU in relation to the transmission system shall be deemed to be an event of Force Majeure affecting MSEDCL, subject to the CTU and MSEDCL complying with the other requirements of this Article. Any event of Force Majeure affecting the performance of the Construction Contractor shall be deemed to be an event of Force Majeure affecting LEPL, subject to LEPL and the Construction Contractor complying with the other requirements of this Article.
11.1.2 Force Majeure
means any event or circumstance or combination of events and circumstances including those stated below that wholly or partly prevents or unavoidably delays an Affected Party in the performance of its obligations under this Agreement, but only if and to the extent that such events or circumstances are not within the reasonable control, directly or indirectly, of the Affected Party and could not have been avoided if the Affected Party had taken reasonable care or complied with Prudent Utility Practices: (i) any act of God, including lightning, drought, fire, explosion,
earthquake, volcanic eruption, landslide, flood, cyclone, typhoon, tornado, thunderstorm.
(ii) any explosion, accident, breakage of facilities, plant or
equipment, structural collapse or a chemical contamination caused by a person not being the Affected Party (or an Affiliate, associate, contractor or any other person acting under the direction or control of such Affected Party) and not being due to inherent defects in the Project or
(iii) any epidemic, plague or quarantine, or (iv) meteorite crash, air crash, objects falling from aircraft, or
other flying devices or vehicles, pressure waves caused by aircraft or aerial devices travelling at supersonic speed, shipwreck, train wrecks, or
(v) any act of war (whether declared or undeclared), invasion,
armed conflict or act of foreign enemy, blockade, embargo (including, causing unavailability or shortage of fuel or materials), revolution, riot, insurrection, civil commotion, communal violence, act of terrorism, extremist action or abduction, or
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(vi) Radioactive contamination or ionizing radiation, or (vii) strikes, sabotage, go-slows or similar industrial disputes at
the Project or at the plant manufacture works, or the Grid excluding such events which are Site specific and / or attributable to LEPL, or
(viii) expropriation, requisition, confiscation, export or import
restrictions, requirements, action or omissions to act on the part of any Government Instrumentality or any person controlled by a Government Instrumentality, provided such adverse action or inaction did not result from LEPL or any of its contractor’s non-compliance with any applicable Law; or
(ix) archaeological findings that were not reasonably
foreseeable; or (x) the revocation or cancellation or delay in renewing (other
than for a cause attributable to the Affected Party) of any Consent; or
(xi) any act of Government Instrumentality which directly
affects the ability of the Party to perform its obligations hereunder, or
(xii) Operation of the Grid beyond the Technical Limits.
11.2 Notification of Force Majeure Event
11.2.1 The Affected Party shall give notice to the other Party of any event
of Force Majeure as soon as reasonably practicable, but not later than seven (7) days after the date on which such Party knew or should reasonably have known of the commencement of the event of Force Majeure. If an event of Force Majeure results in a breakdown of communications rendering it not reasonable to give notice within the applicable time limit specified herein, then the Party claiming Force Majeure shall give such notice as soon as reasonably practicable after reinstatement of communications, but not later than one (1) day after such reinstatement. Such notice shall include full particulars of the event of Force Majeure, its effects on the Party claiming relief and the remedial measures proposed, and the Affected Party shall give the other Party regular reports on the progress of those remedial measures and such other information as the other Party may reasonably request about the situation.
11.2.2 The Affected Party shall give notice to the other Party of (i) the
cessation of the relevant event of Force Majeure; and (ii) the cessation of the effects of such event of Force Majeure on the performance of its rights or obligations under this Agreement, as soon as practicable after becoming aware of each of these cessations.
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11.3 Duty to perform and duty to mitigate To the extent not prevented by a Force Majeure event pursuant to Article 11.1.2, the Affected Party shall continue to perform its obligations pursuant to this Agreement. The Affected Party shall use its reasonable efforts to mitigate the effect of any event of Force Majeure as soon as practicable. Provided that no Party shall be required under this Article to settle any strike or labour dispute it considers being unfavourable to it.
11.4 Failure or delay caused by Force Majeure Neither Party shall be liable for any failure or delay in complying with its obligations pursuant to this Agreement to the extent that such failure or delay has been caused or contributed to by one or more events of Force Majeure or their effects or by any combination thereof subject to Article 15.1. The period allowed for the performance by the Affected Party of its obligations hereunder shall be extended by one day for each day of continuation of an event or events of Force Majeure. Provided that such extension may be for such additional duration as may be required to compensate for any delay or failure resulting from the time spent on demobilisation and remobilisation of personnel and restoration of the Project or the transmission facilities or the Interconnection Facilities, as the case may be, after cessation of an event or events of Force Majeure, to the pre-delay condition, assuming diligent compliance by such Party.
11.5 Extended Force Majeure
The continuance of an event of Force Majeure for a period of 12 consecutive months shall constitute Extended Force Majeure. In the event of an Extended Force Majeure, either Party may terminate the Agreement pursuant to Article 15.6.3.
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ARTICLE 12
CHANGE IN LAW
12.1 Definitions In this Article 12, the following terms shall have the following meanings:
12.1.1 "Change in Law " means:
the enactment, bringing into effect, adoption, promulgation, amendment, modification or repeal, on or after February 28, 2006, of any statute, decree, ordinance or other law, regulation, notice, circular, code, rule or direction by any Governmental Instrumentality or a change in its interpretation by a Competent Court of law, tribunal, government or statutory authority or any of the above regulations that results in any change with respect to Corporate Income Tax or any tax or surcharge or cess or introduction of any new tax or surcharge or cess on the sale of electricity by the Government of India or the Project State Government.
12.1.2 "Competent Court" means: The Supreme Court of India or Bombay High Court, or any tribunal
or any similar judicial or quasi-judicial body in Mumbai that has jurisdiction in relation to issues relating to the Project.
12.2 Payment for Change in Law
12.2.1 If a Change in Law results in LEPL's revenue or costs directly
attributable to the Project being decreased or increased in a Tariff Year, during Operation Period, the Tariff Payment to LEPL shall be increased or decreased.
12.2.2 LEPL or MSEDCL, as the case may be, shall provide the other Party with a certificate stating that the adjustment in the Tariff Payment is directly as a result of the Change in Law and shall provide supporting documents to substantiate the same. And, such certificate shall correctly reflect all increases or decreases till the date of such certificate.
12.2.3 The adjustment in Tariff Payment for reasons attributable to Article
12.2.1 shall be effective from: (i) The date of adoption, promulgation, amendment, re-
enactment or repeal of the Law; (ii) The date of order/judgment of the Competent Court, if the
Change in Law is on account of a change in interpretation of Law;
12.3 Appeal against Change in Law
If the results stated in Article 12.1.1 are brought about by a change in the interpretation of Law by a court or tribunal that does not qualify as a Competent Court, either of the parties may at its own cost, appeal against such order/judgment up to the level of the appropriate Competent Court.
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ARTICLE 13
LIABILITY
13. Limitation on Liability
Except as expressly provided in this Agreement, neither LEPL nor MSEDCL nor their respective officers, directors, agents, employees or Affiliates (or their officers, directors, agents or employees), shall be liable or responsible to the other Party or its Affiliates, officers, directors, agents, employees, successors or assigns (or their respective insurers) for incidental, indirect or consequential damages, connected with or resulting from performance or non-performance of this Agreement, or anything done in connection herewith, including claims in the nature of lost revenues, income or profits (other than payments expressly required and/or properly due under this Agreement), any increased expense of, reduction in or loss of power generation production or equipment used therefor, irrespective of whether such claims are based upon breach of warranty, tort (including negligence, whether of the MSEDCL, LEPL or others), strict liability, contract, breach of statutory duty, operation of law or otherwise. MSEDCL shall have no recourse against any officer, director or shareholder of LEPL or any Affiliate of LEPL or any of its officers, directors or shareholders. LEPL shall have no recourse against any officer, director or shareholder of MSEDCL, or any affiliate of MSEDCL or any of its officers, directors or shareholders.
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ARTICLE 14
GOVERNING LAW AND DISPUTE RESOLUTION
14.1 Governing Law
This Agreement shall be governed by the Laws of India. Subject to Article 14.4, the courts of Mumbai shall have exclusive jurisdiction in all matters arising out of or in connection with this Agreement.
14.2 Amicable Settlement
14.2.1 Either Party is entitled to raise any matter, dispute or difference of whatever nature arising under, out of or in connection with this Agreement including its existence or validity (collectively “Dispute ”) by giving a written notice to the other Party, which shall contain: (i) a description of the Dispute; (ii) the grounds for such Dispute; and
(iii) all written material in support of its claim.
14.2.2 The other Party shall, within thirty (30) days of issue of dispute
notice issued under Article 14.2.1, furnish: (i) Its counter-claim and defences, if any, regarding the Dispute; and
(ii) All written material in support of its defences and counter-claim.
14.2.3 Within thirty (30) days of issue of notice by other Party pursuant to Article 14.2.2, both the Parties shall meet to settle such Dispute amicably by the process of mediation and conciliation of the non-working Senior Officers of both the parties who are not directly involved in the day to day implementation of the Agreement, failing which the Dispute shall be resolved in accordance with Article 14.4, as applicable.
14.3 not used
14.4 Arbitration
Where any Dispute arising out of or in connection with this Agreement,
a) is not resolved as provided for in Article 14.2 or; b) falls within the scope and purview of statutory arbitration under the
provision of the Law;
then, such Disputes shall be submitted to State Electricity Regulatory Commission for adjudication who shall either by itself or by referring the same to the Arbitral Tribunal that may be constituted in accordance with the Arbitration and Conciliation Act, 1996 (“Arbitration Act ”) at the request of either Party in writing to the other Party adjudicate the same.. The following provisions shall then apply:
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i. The rights and obligations of the Parties shall remain effective during
the arbitration proceedings;
ii. the place of arbitration shall be Mumbai, India;
iii. the language of the arbitration shall be English;
iv. Any Dispute submitted to arbitration shall be considered by three
arbitrators, two of whom shall be nominated, one by MSEDCL and one by LEPL. If within 30 days of the receipt of a party’s notification of the appointment of an arbitrator, the other party has not notified the first party of the arbitrator it has appointed, the first party may apply for the appointment of the second arbitrator in accordance with the Arbitration Act. The third arbitrator will be nominated by the two existing arbitrators or, failing such nomination within 30 days of the appointment of the second arbitrator, shall be appointed in accordance with the Arbitration Act.
14.5 Arbitration Awards to be Binding 14.5.1 MSEDCL and LEPL undertake to carry out, implement and
execute any decision or Award of the Arbitrators relating to such Dispute without delay. Awards relating to any Dispute shall be final and binding on the parties to such Dispute as from the date they are made.
14.5.2 The Arbitrators shall give a reasoned decision or award in writing. The Arbitrators shall have power to grant interim relief and pass an interim award.
14.6 Finality and Enforcement of Award The Award of the arbitration shall be final and binding on both the Parties and shall be effective from: (i) the date such Award is made, or (ii) the date, if any, specified as the effective date for such Award. The Parties hereby waive any right to appeal such Award except on the grounds set out in the Arbitration Act.
14.7 Parties to Perform Obligations Notwithstanding the existence of any dispute and difference referred to Arbitration, the Parties hereto shall continue to perform their respective obligations under this Agreement.
14.8 Costs of Arbitration
The Parties shall bear its own costs of Arbitration. The costs and fees payable to the Arbitrators shall be shared equally by the Parties, unless decided otherwise pursuant to the Award of such Arbitration.
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ARTICLE 15
EVENTS OF DEFAULT AND TERMINATION
15.1 LEPL Event of Default The occurrence and continuation of any of the following events, unless any such event occurs as a result of a Force Majeure event or a breach by MSEDCL of its obligations under this Agreement, shall constitute a LEPL Event of Default: (i) after the commencement of the construction of the Project, LEPL
or its Construction Contractor abandons the Project for a period of four (4) months, unless the Construction Contractor is using its diligent efforts to recommence construction or
(ii) Failure to demonstrate the Rated Capacity of the Units during the
Unit Capacity Test in accordance with Article 6.4 and failure to demonstrate the Rated Capacity of the Project during the Project Capacity Test in terms of Article 6.5 till six (6) months after the Required Commercial Operation Date and the extension of time as applicable and agreed between the Parties, provided that the total period of such delay shall exclude the period by which the Unit Capacity Test and Project Capacity Test have been delayed on account of Force Majeure or delay of the commissioning of the transmission facilities.
(iia) fails to obtain or keep valid and subsisting all required Consents
and Permissions and Licenses for and in respect of the operation of the plant during the entire period of the Project;
(iii) LEPL fails to make any payment required to be made to MSEDCL
under this Agreement within two (2) Months after the due date for such payment, or
(iv) LEPL assigns or purports to assign its assets or rights in violation of
this Agreement, or
(v) LEPL transfers or novates any of its rights and/or obligations under this Agreement, in violation of this Agreement, or
(vi) if LEPL becomes the subject of proceedings under any bankruptcy
or insolvency laws or goes into liquidation or dissolution or has a Receiver appointed over it or a Liquidator is appointed, pursuant to Law, except where such dissolution of LEPL is for the purpose of a merger, consolidation or reorganization and where the resulting entity has the financial standing to perform its obligations under this Agreement and creditworthiness not inferior to LEPL and expressly assumes all obligations under this Agreement and is in a position to perform them; or
(vii) LEPL is in material breach of this Agreement, or (viii) LEPL repudiates this Agreement.
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15.2 MSEDCL Event of Default
The occurrence and continuation of any of the following events, unless any such event occurs as a result of a Force Majeure event or a breach by LEPL of its obligations under this Agreement, shall constitute a MSEDCL Event of Default: (i) MSEDCL fails to pay any portion of a Monthly Bill or
Supplementary Bill for a period of 60 days after the Due Date (either directly or through a draw down of the Letter of Credit or drawal from the Escrow Account) or fails to ensure the issue, maintenance, replenishment, renewal or restoration of the Letter of Credit, to the required amount pursuant to Article 10 within a period of 30 days from the date of last drawdown or failure to maintain the Escrow Account with requisite amounts within a period of 45 days from the date of last drawal from the Escrow Account; or
(ii) the dissolution or transfer of rights or obligations of MSEDCL, in
violation of Article 16.7, except where:
(a) Such transfer does not affect the ability of the transferee to perform its obligations under this Agreement;
(b) Such transferee expressly assumes obligations of
MSEDCL under this Agreement, and (c) The resulting entity, or transferee has the financial
standing to perform the payment obligations under this Agreement and credit worthiness which is similar to MSEDCL; or
(iii) MSEDCL repudiates this Agreement; or
(iv) MSEDCL is in material breach of this Agreement.
15.3 Extended Force Majeure
The occurrence of an event of Force Majeure and its continuance for a period of 12 months continuously shall constitute an Extended Force Majeure. On the occurrence of Extended Force Majeure, either Party shall be entitled to terminate this Agreement by delivering a seven (7) day written notice of termination to the other Party and this Agreement shall stand terminated at the end of such seven (7) day period provided that the Force Majeure condition is still operative at such time. Neither Party shall have any liability to the other Party as a result of termination of this Agreement on account of Extended Force Majeure.
15.4 Termination procedure for LEPL 15.4.1 In the event of termination of this Agreement by LEPL prior to
COD, all the obligations and responsibilities of MSEDCL under Bulk Power Transmission Agreement with CTU as well as the Connection Agreement shall stand transferred to and novated in
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favour of LEPL and LEPL shall indemnify and keep MSEDCL duly indemnified from and against all losses, claims, cost, charges and expenses incurred or suffered by MSEDCL in that regard. Further, MSEDCL shall not be liable in any manner whatsoever to LEPL.
15.4.2 In the event of termination of this Agreement by LEPL after COD,
LEPL shall give Notice of such Termination by issuing a Preliminary Termination Notice, which shall specify in reasonable detail the circumstances giving rise to the issue of such notice along with a valid Letter of Credit of Rs.500 Crores with a validity period of 90 days to and in favour of MSEDCL.
15.4.3 In the event of MSEDCL Event of Default, LEPL shall give Notice
of such Termination by issuing a Preliminary Termination Notice, which shall specify in reasonable detail the circumstances giving rise to the issue of such notice.
15.4.4 Following the issue of a LEPL Preliminary Termination Notice, Consultation Period of sixty (60) days or such longer period as the Parties may agree shall apply.
15.4.5 During the Consultation Period, the Parties shall, save as
otherwise provided in this Agreement, continue to perform their respective obligations under this Agreement.
15.4.6 Within a period of thirty (30) days following the expiry of the
Consultation Period and unless the Parties shall have otherwise agreed to the contrary or MSEDCL Event of Default giving rise to the Consultation Period shall not have been remedied, LEPL may terminate this Agreement by delivering a LEPL Termination Notice, whereupon this Agreement shall terminate on the date of such notice.
15.5 Termination procedure for MSEDCL
15.5.1 In the event of termination of this Agreement by MSEDCL prior to
COD, LEPL shall be entitled to sale the energy generated by it to any third party and shall be entitled to use the Open Access under Bulk Power Transmission Agreement with CTU as well as the Connection Agreement without any further cost to LEPL. Further, LEPL shall not be liable in any manner whatsoever to MSEDCL.
15.5.2 In the event of termination of this Agreement by MSEDCL after
COD, MSEDCL shall give Notice of such Termination by issuing a Preliminary Termination Notice, which shall specify in reasonable detail the circumstances giving rise to the issue of such notice along with a valid Letter of Credit of Rs.500 Crores with a validity period of 90 days to and in favour of LEPL.
15.5.3 In the event of LEPL Event of Default, MSEDCL shall give Notice
of such Termination by issuing a Preliminary Termination Notice, which shall specify in reasonable detail the circumstances giving rise to the issue of such notice.
15.5.4 Following the issue of a MSEDCL Preliminary Termination Notice, Consultation Period of sixty (60) days or such longer period as the Parties may agree shall apply.
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15.5.5 During the Consultation Period, the Parties shall, save as otherwise provided in this Agreement, continue to perform their respective obligations under this Agreement.
15.5.6 Within a period of thirty (30) days following the expiry of the
Consultation Period and unless the Parties shall have otherwise agreed to the contrary or LEPL Event of Default giving rise to the Consultation Period shall not have been remedied, MSEDCL may terminate this Agreement by delivering a MSEDCL Termination Notice, whereupon this Agreement shall terminate on the date of such notice.
15.5A Termination By Mutual Consent
If both LEPL and MSEDCL mutually decide in writing to terminate this Agreement, they may terminate this Agreement anytime from the date of signing of this Agreement as may be mutually agreed upon.
15.6 Consequences of Termination 15.6.1 Where this Agreement is terminated by LEPL pursuant to Article
15.4.2, MSEDCL shall be entitled to invoke/encash Letter of Credit of Rs.500 Crores as compensation payable to MSEDCL as mutually agreed and quantified.
15.6.2 Where this Agreement is terminated by MSEDCL pursuant to
Article 15.5.2, LEPL shall be entitled to invoke/encash Letter of Credit of Rs.500 Crores as compensation payable to LEPL as mutually agreed and quantified.
15.6.3 Consequence of Termination for Extended For ce Majeure: Where the Agreement is terminated by either Party pursuant an
Extended Force Majeure in accordance with Article 15.3, then in such event the Agreement shall stand terminated without any further liability to either Party, from the date of such termination.
15.7 Project Lender to be Notified
Any Party, which issues a notice under this Article 15 to the other Party, shall issue a copy of such notice to the Lender. The Lender, if it so desires may initiate action to mitigate or rectify the defaults of the Parties in order to avoid the termination of the Agreement.
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ARTICLE 16
MISCELLANEOUS PROVISIONS
16.1 Amendment This Agreement may only be amended or supplemented by a written agreement between the Parties and subject to the approval of Regulatory Commission.
16.2 Third Party Beneficiaries
This Agreement is solely for the benefit of the Parties and their respective successors and permitted assigns and shall not be construed as creating any duty, standard of care or any liability towards any third person.
16.3 No Waiver
A waiver by a Party shall be in writing and executed by an authorized representative of that Party. Neither the failure by one Party to insist on any occasion upon the performance of the terms, conditions, and provisions of this Agreement nor time or other indulgence granted by one Party to the other shall act as a waiver of such breach or acceptance of any variation or the relinquishment of any such right or any other right under this Agreement, which shall remain in full force and effect.
16.4 Language
The language of this Agreement and all written communication between the Parties relating to his Agreement shall be in English, unless otherwise agreed.
16.5 Remedies
Where this Agreement provides for any remedies for any breach or shortfall in performance, the Parties shall not be entitled to make any other claim or pursue other remedies under law.
16.6 Entirety
This Agreement constitutes the entire agreement between the Parties as to its subject matter and supersedes any prior understanding or agreement reached between the Parties, including any memorandum of understanding between LEPL and MSEDCL, executed in connection with the Project.
16.7 Assignment 16.7.1 This Agreement shall not be assigned by either Party otherwise
than by mutual agreement between the Parties in writing.
16.7.2 Notwithstanding Article 16.7.1 LEPL may assign its rights and transfer its obligations under this Agreement to the Lenders. A Party may also assign its rights and transfer its obligations under this Agreement to its Affiliates with prior consent of the other Party, which consent shall not be unreasonably withheld.
Provided that, in case of an assignment to Affiliates by either MSEDCL or LEPL:
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(i) an entity shall qualify as an "Affiliate" if it, directly or indirectly,
controls, is controlled by or is under common control with the relevant Party; the term "control" meaning ownership of more than fifty percent (50%) of the equity share capital or voting rights of such Party or the power to appoint a majority of the board of directors of such Party;
(ii) Such Affiliate has the ability to perform all obligations of the
Party under this Agreement; (iii) Such Affiliate expressly assumes such obligations.
16.8 Confidentiality 16.8.1 (a) Each of the Parties shall hold in confidence all documents and
other technical or commercial information, supplied to it by or on behalf of the other Party relating to the design, construction, insurance, operation, maintenance, management and financing of the Project or in relation to the Agreement (“Confidential Information ”) and shall not, save as required by Law or appropriate regulatory/legislative authorities, use the same for its own purpose or publish or otherwise disclose such Confidential Information, other than to the prospective lenders to, or investors in LEPL or MSEDCL, or to the professional advisors of the Parties hereto or of such lenders or investors, as aforesaid, and as may be required to perform its obligations under this Agreement.
(b) The provisions of paragraph (a) above shall not apply to:
(i) any information in the public domain, otherwise than by breach of this Agreement.
(ii) Information in the possession of the receiving party
thereof, before divulgence as aforesaid, and which was not obtained under any obligation of confidentiality and;
(iii) Information obtained from a third party who is free to
divulge the same, and which is obtained without any obligation of confidentiality.
(iv) Disclosure of any information to any Governmental
Instrumentality for obtaining, receiving, and/or maintaining any government authorizations.
(c) The provisions of this Article 16.8 shall survive the termination
or expiry of this Agreement. 16.8.2 Notwithstanding Article 16.8.1, each Party may disclose
Confidential Information to the extent that such Confidential Information:
(i) was in the public domain prior to its delivery to such Party
or after such delivery if it becomes part of the public
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domain without breach of any confidentiality obligations by the receiving Party under this Agreement, or
(ii) was obtained from a third party with no known duty to
maintain its confidentiality, or (iii) is required to be disclosed by applicable Law or judicial or
administrative or arbitral process or by any Governmental Instrumentality; provided that for any such disclosure, the disclosing Party shall give the other Party prompt written notice, where possible, and use reasonable efforts to ensure that such disclosure is accorded confidential treatment and also to enable such other Party to seek a protective order or other appropriate remedy at such other Party's sole costs, or
(iv) is provided to professional advisors, agents, auditors or
representatives of a Party as is reasonable under the circumstances; provided, that the Party receiving such Confidential Information shall require such persons to undertake in writing to keep such Confidential Information confidential and shall use its best efforts to ensure compliance with such undertaking.
16.9 Affirmation
LEPL and MSEDCL each affirm that: (i) neither it nor its respective Directors, employees, or agents has
paid or undertaken to pay or shall in the future pay any unlawful commission, bribe, pay-off or kick-back; and
(ii) it has not in any other manner paid any sums, whether in Indian
currency or foreign currency and whether in India or abroad to the other Party to procure this Agreement, and LEPL and MSEDCL hereby undertake not to engage in any similar acts during the Term of Agreement.
16.10 Severability
The provisions of this Agreement are severable, and if any portion of this Agreement is deemed legally invalid or unenforceable, the remainder of this Agreement shall survive and remain in full force and effect; provided that, if a provision is held to be invalid or unenforceable, the Parties shall negotiate in good faith to adopt a replacement provision to carry out, in effect, the Parties' original intention to the extent permitted by applicable Laws.
16.11 No Partnership
None of the provisions of this Agreement shall constitute a partnership or agency or any such similar relationship between LEPL and MSEDCL.
16.12 Survival
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Notwithstanding anything to the contrary herein, the provisions under Article 11 (Force Majeure), Article 13 (Liability and Indemnification), Article 14 (Governing Law and Dispute Resolution), Article 15 (Events of Default and Termination), and Article 16 (Miscellaneous) shall continue and survive any expiry or termination of this Agreement.
16.13 Counterparts
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which collectively shall be deemed one and the same instrument.
16.14 Notices
16.14.1 All notices to be given under this Agreement shall be in writing and in the English Language.
16.14.2 All notices must be delivered personally, by registered or
certified mail or by facsimile transmission to the addresses below:
For LEPL: Address: Lanco Energy Private Limited, Upper Ground Floor, Antariksh Bhavan, 22, K. G. Marg, New Delhi, 110 001 Attention: Director and CEO
Facsimile No.: 011-2331 1993
Telephone No.: 011-2331 1991-92 For MSEDCL:
Address: G-9, Prakashgadh, Anand Kanekar Marg, Bandra (E), Mumbai – 400 051
Attention: Director (Operations)
Facsimile No.: 022-2647 2976
Telephone No.: 022-2647 4750 16.14.3 All notices shall be effective: (i) if sent by facsimile transmission,
when sent (on receipt of confirmation of the correct number or address); (ii) if sent by registered or certified mail, within 5 days of dispatch; and (iii) if delivered personally, on receipt by intended recipient. Provided that all notices given by facsimile transmission shall be confirmed by registered or certified mail.
16.14.4 Each Party shall forthwith notify the other Party of any change in
its address to which notices under this Agreement are to be delivered, mailed or facsimiled.
16.15 Schedules
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Schedules and other attachments hereto shall be treated as part of this Agreement. IN WITNESS WHERE OF the Parties have executed these presents through their authorized representatives at Mumbai
For and on behalf of MSEDCL
For and on behalf of the LEPL
_________________________ Signature with seal
________________________ Signature with seal
Witness: 1. 2.
Witness: 1. 2.
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SCHEDULE A CONSENTS
1.0 Initial Consents
1.1 Registration of LEPL under the Companies Act, 1956. 1.2 Clearance by appropriate Governmental Instrumentality to use water at
the Site for generation of electricity.
1.3 Approval, in writing, by the Appropriate Authority for the development and Construction and Commissioning of the Project by LEPL.
1.4 Release of forest land, if any, and the Site for the Project by the appropriate Governmental Instrumentality.
1.5 Approval by State Government required as to rehabilitation and resettlement of persons displaced, if any, by land acquired for the construction of the Project.
1.6 Clearance of the Project by the Ministry of Environment and Forests, Government of India.
1.7 Consent of the relevant local Panchayat(s), if required, for development
of the Site. 1.8 Confirmation from the Project State Government as to the non-applicability
of tax on bulk sales of electricity, if any.
1.9 Clearances for design, construction, operation and maintenance of the Tie-Line, if required.
1.10 Obtain Techno Economic Clearence (TEC) from Central Electricity
Authority (CEA) 2.0 Consents for Construction and Commissioning of the Project. 2.1 Approval of Controller of Explosives
2.2 Approval of Chief Electrical Inspector of the State for the safety of
equipment and personal.
2.3 Approval of Tariff Advisory Committee for fire protection system. 2.4 Any other requirements as per the Law, in connection with the
development, finance, construction, operation and ownership of the Project.
3.0 Consents for Operation of the Project
3.1 Approval of the Tariff by the Appropriate Commission, as required by Law; 3.2 Approval of Chief Electrical Inspector of the State for the safety of
equipment and personnel.
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SCHEDULE B
TECHNICAL FEATURES OF PROJECT
1.0 Location
S. No. Description Particulars 1 Project Site Location (a) State (b) District (c) Tehsil / village 2 Nearby State/National Highway 3 Nearby Railway Station
2.0 Hydrology
S. No. Description Particulars 1 Source of Water 2 Rainfed Catchment Area below EL.
4270m
3 Snow Catchment Area above EL. 4270m
4 Spillway Design Flood (SPF) 5 Freeboard Design Flood (PMF) 6 Flow Availability during the Year 7 Hydrology Studied (No. of years)
3.0 Power & Energy Parameters
S. No. Description Particulars 1 Type of Project (ROR with
Pondage/Storage)
2 Maximum Continuous Rating of Unit 3 Maximum Continuous Rating of
Project
4 Maximum Capacity of Unit 5 Maximum Capacity of Project 6 Mean Energy output (net), GWh 7 Maximum Energy Output (net), GWh 8 Minimum Energy (net), GWh 9 * Design Energy Output (net), GWh 10 Anticipated Energy Output (net), GWh 11 Peak Energy Output (net), GWh 12 Peaking Capacity of Project (net), MW 13 Peaking Duration, hours
4.0 Reservoir
S. No. Description Particulars 1 Top Bund Level 2 Full Reservoir Level (FRL) 3 Maximum Water Level (MWL) 4 Minimum Operating Water Level 5 Live Storage at FRL 6 Rated Head 7 Maximum Head 8 Minimum Head
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9 Pondage Capacity in terms of hours of operation at Contracted Capacity for peaking power, hour
5.0 Dam
S. No. Description Particulars 1 Type (Earth/Rock fill/Concrete) 2 Crest Level 3 Height of gate 4 Width of gate 5 U/s Slope of Non Overflow Section 6 D/s Slope of Non Overflow Section 7 Maximum Flood Discharge Capacity
6.0 Power draft
S. No. Description Particulars 1 Rated discharge /Unit, m3/s 2 Rated Power Draft, m3/s 3 Maximum Unit Discharge, m3/s 4 Minimum Power Draft, m3/s
7.0 Scouring Sluice
S. No. Description Particulars 1 Design Discharge, m3/s 2 Number of Vents 3 Sill Level, masl
masl—metre above sea level 8.0 Feeder Tunnel, Intake & Trash Racks
S. No. Description Particulars 1 Tunnel Length, m 2 Full Supply Depth, m 3 Trash Rack Type 4 No of Bays 5 No of Vertical Tiers
9.0 Power Tunnel
S. No. Description Particulars 1 Intake A Sill Level elevation B Deck Level elevation, m asl 2 Low Pressure Head race
Tunnel
A Diameter B Length C Maximum Flow (all units
operating )
3 Common penstock A Diameter B Length 4 Unit Penstock
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A Number B Diameter C Length 5 Tailrace tunnel A Dia & shape B Length, m
10.0 Power House
S. No. Description Particulars 1 Type (Surface/Underground)
2 Length, m 3 Width, m
11.0 Turbine
S. No. Description Particulars 1 Type of Turbine 2 Number of Turbines 3 Runner Diameter mm 4 Rated Flow, m3/s 5 Maximum Flow, m3/s 6 Rated Head, m 7 Maximum Head, m 8 Minimum Head, m 9 Continuous Rated Unit
Capacity, MW
10 Maximum Capacity, MW 11 Over load Capacity and
duration, MW
12 Rated Speed, rpm 13 Turbine Efficiency, % 14 Speed at which vibration
exceeds permissible limit,
15 Load at which cavitations occurs
12.0 Generator
S. No. Description Particulars 1 Type 2 Continuous Rated Capacity,
MW
3 Maximum Capacity, MW 4 Over load Capacity and
duration, MW
5 Rated Power Factor, per unit 6 Rated Voltage, kV 7 Rated Frequency, Hz 8 Rated Speed, rpm 9 Generator Efficiency, %
13.0 Transformer
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S. No. Description Particulars 1 Generator Transformer a Numbers b Capacity, MVA c Voltage Ratio, kV/kV 2 Unit Auxiliary Transformer a Numbers b Capacity, kVA c Voltage Ratio, kV/kV 3 Station Auxiliary Transformer A Numbers B Capacity, kVA C Voltage Ratio, kV/kV
14.0 Switchyard
S. No. Description Particulars 1 Transmission Voltage, kV 2 Maximum Fault level, kA 3 Type of Circuit Breaker
Scheme, 1½ or Transfer Bus
4 Number of Bays (with break up)
15.0 Tie Line
S. No. Description Particulars 1 Voltage of Tie Line, kV 2 Number of Circuits (single or
double)
3 Length, km 4 Span, m 5 Number of Towers 6 Conductor size (name) 7 Terminal Point Location
The above particulars shall be provided at a later date by LEPL.
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SCHEDULE C
INSURANCE
1.0 Maintenance of Insurance Policies LEPL shall obtain and maintain from and after Financial Close and throughout the Term of Agreement the policies of insurance set forth in Paragraph 3 below at appropriate levels of coverage and during the period mentioned therein:
Provided that such amounts may be changed from time to time with the written consent of MSEDCL, which consent may not be unreasonably withheld; and
Provided further, that LEPL shall not be in a breach of its obligations
hereunder, if any to the extent that any particular insurance is unavailable to it for reasons other than any negligence or default by, or condition (financial or otherwise) of, LEPL.
Notwithstanding the foregoing, in the event that any insurance required to be maintained hereunder or the limits or deductibles thereof shall not be reasonably available at reasonable rates in the commercial insurance market of the Project, the requirement to maintain such insurance shall be deemed waived to the extent the maintenance thereof is not so available: Provided that any such waiver shall be effective only so long as such insurance shall not be reasonably available at reasonable rates in the commercial insurance market.
2.0 Certificates of Insurance LEPL shall provide the MSEDCL with certificates of insurance evidencing the policies and endorsements listed below. Failure by LEPL to obtain the insurance coverage or certificates of insurance required by this Schedule-C shall not relieve LEPL of the insurance requirements set forth herein or in any way relieve or limit LEPL's obligations and liabilities under any other provision of this Agreement. If LEPL shall fail to procure or maintain any insurance required by this Schedule-C, then MSEDCL shall have the right, upon delivering thirty (30) days prior written notice to LEPL, to procure such insurance in accordance with the requirements of this Schedule-C at the full cost to LEPL.
3.0 Required Coverage
LEPL shall, at its own expense, acquire and maintain, or cause to be maintained, from the Financial Close and throughout the Term of Agreement as applicable, the following minimum coverage:
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(a) Workers Compensation and Employers Liability; (b) Public Liability Insurance, MSEDCL should also be named
insured for this policy. (c) Construction Contractors All Risk Insurance; (d) All Risk Property / Comprehensive Machinery Insurance (upon
Completion of Construction); and, (e) Business Interruption Insurance (upon Completion of Construction).
4.0 Evidence of Coverage
Evidence of insurance satisfactory to MSEDCL for the coverage specified herein shall be provided to MSEDCL that the respective insurance will be placed in effect on or prior to the Financial Close or (in the case of insurance which is to take effect upon the completion of construction) the Synchronization Date of the relevant Unit. During the Term of Agreement, LEPL shall, upon the MSEDCL's reasonable request, furnish the MSEDCL with certified copies of the insurance policies described in this Schedule-C.
5.0 Application of Proceeds from all Risk Property/ Comprehensive and Machinery Insurance So long as the financing agreement are in effect, the insurance proceeds from all Risk Property/ comprehensive Machinery Insurance shall be applied in accordance with such agreement. Upon the termination of all financing agreement, such insurance proceeds shall be applied to repair of the Project.
6.0 Cost of Insurance LEPL shall bear the cost to purchase (i) all insurance coverage set forth in Paragraph 3 above and (ii) additional insurance coverage which lenders may require LEPL to purchase.
7.0 Preference for Indian Insurers To the extent that the above insurance coverage are available through Indian insurance companies at competitive rates compared with world markets, preference shall be given to using these companies subject to cost considerations and requirements imposed by the lenders financing agreement . LEPL shall advise the MSEDCL in the event and to the extent insurance is procured from sources outside of India.
8.0 Compensation Notwithstanding any liability that may arise under this Agreement, any loss for which insurance compensation is due to LEPL hereunder, shall not be charged to MSEDCL or Project State Government, as the case maybe
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SCHEDULE D
TARIFF
1.0 General Tariff applicable for purchase of Saleable Energy shall be Annual Fixed
Tariff as detailed below. 2.0 Tariff Rate 2.1 The Tariff rate (in Rupees per kWh) for a period of twelve months
comprised in the relevant Tariff Years has been fixed which is as per the following table:
Sl. No. Tariff Year Tariff Rate (Rs./kW/h) 1. Tariff Year 1 2.32 2. Tariff Year 2 2.32 3. Tariff Year 3 2.32 4. Tariff Year 4 2.32 5. Tariff Year 5 2.32 6. Tariff Year 6 2.32 7. Tariff Year 7 2.32 8. Tariff Year 8 2.32 9. Tariff Year 9 2.32 10. Tariff Year 10 2.32 11. Tariff Year 11 2.32 12 Tariff Year 12 2.32 13 Tariff Year 13 2.32 14 Tariff Year 14 2.32 15 Tariff Year 15 2.32 16 Tariff Year 16 2.32 17 Tariff Year 17 2.32 18 Tariff Year 18 2.32 19 Tariff Year 19 2.32 20 Tariff Year 20 2.32 21 Tariff Year 21 2.32 22 Tariff Year 22 2.32 23 Tariff Year 23 2.32 24 Tariff Year 24 2.32 25 Tariff Year 25 2.32
Tariff applicable from 26th year to 35th year to be negotiated during 25th
year with mutual consent among both the parties
1. The Tariff rate which is fixed over the relevant Tariff years has been based on the following assumptions:
a) Energy offered for sale to MSEDCL: upto 2121.43 MU for
1st 15 years and upto 2049.11 MU from 16th year to 25th year
b) Any variation in Tariff rate on account of Change in Law is to be born by or passed on to MSEDCL as the case may be which shall be computed with reference to (a) above
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2. The Tariff rate which is fixed over the relevant Tariff years shall not change inspite of the changes in the following assumptions:
a) The capital cost of Rs 2996.89 Crores
b) Loan repayment is considered for 15 years with a moratorium of 1 year
c) Interest on term loan is considered at 11% p.a. and for working capital limits at 10.50% p.a.
d) Debt Equity structure is considered as 70:30
e) Return on Equity at 14% p.a.
f) O & M expenditure at 1.50% of capital cost with an escalation of 4% p.a.
g) Depreciation and advance against depreciation is considered
h) Royalty to Government of Sikkim: 12% for 1st 15 years and 15% there after
3. The Tariff rate which is fixed over the relevant Tariff years would only
change on account of Change in Law in the following assumptions:
a) Income Tax holiday as applicable on the date of this Agreement pursuant to the Income Tax Act, 1961.
b) Corporate Income Tax rate of 30% plus a surcharge of 10%
c) Minimum Alternate Tax of 7.50% plus a surcharge of 10%
d) Education Cess of 2% on both the above taxes
e) Environmental Cess @ 1 paisa per KWh to be paid to Government of Sikkim
4. Negotiated Fixed Tariff arrived at Rs. 2.32 per kwh based on above assumptions for a period of 25 years and thereafter to be renegotiated for 10 years i.e. upto the end of 35th year
3.0 Computation of energy in case of difference wit h REA
TO BE DECIDED WITH MUTUAL CONSENT AT A LATER DATE
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Schedule E
Technical Limits
TO BE DECIDED WITH MUTUAL CONSENT AT A LATER DATE
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Schedule F
Determination of water spillage for computing Deeme d Generation
TO BE DECIDED WITH MUTUAL CONSENT AT A LATER DATE
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Schedule G
Details of Inter Connection Facilities
TO BE DECIDED WITH MUTUAL CONSENT AT A LATER DATE
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Annexure – 1
AN ILLUSTRATION OF GRID BREAKDOWN AND DEEMED GENERAT ION UP TO 95% OF DECLARED AVAILABILITY AND BETWEEN 95% AN D 100% DECLARED AVAILABILITY AS REFERRED TO IN CLAUSE 4.3.2A
1. Grid Breakdown and or disruption up to 175 hours on a cumulative basis in any tariff year is exempted from tariff payments. The record of such breakdowns and or disruptions shall be taken from CTU/RLDC.
2. Illustration for 4.3.2A
Declared Capacity = 500 MW Dispatched Capacity = 375 MW Difference in Capacity = 125 MW 95% of Declared Capacity = 500X95% = 475 MW Above 95% of Declared Capacity: So, 500-475 = 25 MW of power can be sold by LEPL to any third party and retain profits. Further below 95% of Declared Capacity: 475-375 = 100 MW of power can be sold by LEPL to any third party and in the event of any net loss the same will be made up by MSEDCL to LEPL. In the event of any net profit the same will be shared equally by LEPL and MSEDCL.
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