Assignment of Proceedings
Carl Wood is the Assigned Commissioner and Robert Barnett is the assigned Administrative Law Judge in this proceeding.
1. For a period of five years, the PPA prices are expected to provide SDG&E's ratepayers the benefits of local generation at a savings greater than the projected short run avoided costs of SDG&E.
2. The prices, terms, and conditions of the PPA, taken as a whole, are reasonable.
3. SDG&E should be permitted to recover in rates its full costs for power purchased under the PPA, subject to SDG&E's prudent administration of the PPA.
1. The PPA should be approved.
2. The motion for protective order is granted.
IT IS ORDERED that:
1. The "Master Power Purchase and Sale Agreement Confirmation Letter" and the "Master Power Purchase and Sale Agreement" (collectively the PPA) (unredacted versions) are approved.
2. San Diego Gas & Electric Company (SDG&E) shall recover in rates its full costs for power purchased under the PPA, subject to SDG&E's prudent administration of the PPA.
3. The motion for protective order is granted for a period of two years from the effective date of this order.
4.
5. This proceeding is closed.
This order is effective today.
Dated June 5, 2003, at San Francisco, California.
MICHAEL R. PEEVEY
President
CARL W. WOOD
LORETTA M. LYNCH
GEOFFREY F. BROWN
SUSAN P. KENNEDY
Commissioners
APPENDIX A
MASTER POWER PURCHASE AND SALE AGREEMENT
CONFIRMATION LETTER
This confirmation letter shall confirm the Transaction agreed to on October 4, 2002 between CP Kelco, U.S., Inc. ("Party A") and San Diego Gas & Electric Company ("Party B") regarding the sale/purchase of the Product under the terms and conditions as follows:
Seller: CP Kelco, U.S., Inc.
Buyer: San Diego Gas & Electric Company
Effective Date: SDG&E's obligation to commence performance hereunder shall not commence, if at all, until the CPUC Approval Date set forth in the Settlement Agreement (as defined below).
Product: Non-Firm.
Contract Quantity: Actual Deliveries from the Generating Facility up to Net Generating Capacity; provided however, should Seller increase its Net Generating Capacity as a result of capital additions to the Generating Facility then, subject to the terms and conditions of the Service Agreement and "Interconnection Requirements" section hereof, Buyer shall purchase under this Agreement up to, but no more than, 5 MW of such incremental increase.
Interruption: Seller may interrupt deliveries to Buyer under this Transaction at any time in its sole and unlimited discretion, except to the extent as may expressly be required under Section 10.13 of the Master Agreement. Except as expressly provided in Section 3.2 (c) of the Master Agreement, and other than in connection with any violation of Section 10.13 of the Master Agreement, Seller shall not be liable to Buyer for any such interruptions in deliveries to Buyer.
Delivery Point: High Side (12 kV) of SDG&E Sampson Street Substation
Contract Price: The Contract Price shall equal the total, all-inclusive price for the Product Buyer purchases from Seller and, when fixed according to the formula set forth in section (b) below, shall not be further adjusted for line losses.
(a) For the period commencing on the CPUC Approval Date through and including the Determination Date, the Contract Price shall be equal to the sum of the short-run avoided energy cost prices and the as-available capacity prices posted by SDG&E from time to time in accordance with the CPUC's approved pricing methodologies, adjusted for line losses using the CPUC's approved line loss methodology.
(b) Subject to Section (c) below, effective on the first business day following six days after the CPUC Approval Date, the Contract Price shall be fixed in accordance with the following formula:
CP = PHA x [CPB + (NPF - NPB) x RF]
Where:
CP = Contract Price;
PHA = 1.174 for the On-Peak hours and 0.781 for the Off-Peak hours;
CPB = [REDACTED]¢/kWh;
NPF = the simple average of the prices for natural gas futures at the Henry Hub published by the New York Mercantile Exchange on its website after the close of trading on the Determination Date, as defined in section (d) below, in the column labeled "Last" for the 60 months immediately following the Determination Date;
NPB = [REDACTED] per MMBtu; and
RF = either (i) 1.0 if the NPF is exactly [REDACTED] per MMBtu, (ii) 0.96 if the NPF is less than [REDACTED] per MMBtu or (iii) 0.864 if the NPF is greater than [REDACTED] per MMBtu.
(c) Buyer may delay the fixing of the Contract Price as provided for in section (b) above by providing notice to Seller, in writing or by facsimile, to be received by Seller not more than four days following the CPUC Approval Date.
(i) If Buyer provides notice of such delay, Buyer may, subject to Seller's right under section (ii) below, trigger the fixing of the Contract Price at any time prior to August 31, 2003, effective for the day following the Determination Date, by providing notice to Seller, in writing or by facsimile.
(ii) If Buyer delays the fixing of the Contract Price, Seller may, at any time prior to Buyer triggering such fixing under section (i) above and prior to August 31, 2003, trigger such fixing effective for the day following the Determination Date by providing notice, in writing or by facsimile, to Buyer; provided that: (A) Buyer and Seller shall agree upon the calculation of NPF in writing within one (1) business day of Seller's notice; (B) if, upon such election by Seller, the NPF calculated on the Determination Date as provided for above and agreed by the parties would be greater than [REDACTED] per MMBtu then the NPF shall be set at [REDACTED] per MMBtu; and (C) if, upon such election by Seller, the NPF calculated on the Determination Date as provided for above and agreed by the parties would be less than or equal to [REDACTED] per MMBtu, then the NPF shall be set at the amount so calculated.
(iii) If Buyer delays the fixing of the Contract Price and neither Buyer nor Seller has triggered the fixing of the Contract Price by notice received before August 31, 2002, either (A) Seller shall provide notice to Buyer, in writing or by facsimile to be received on August 31, 2002, to fix the Contract Price (provided that if, upon such election by Seller, the NPF calculated on the Determination Date as provided for above would be greater than [REDACTED] per MMBtu, then the NPF shall be set at [REDACTED] per MMBtu and the CP shall equal [REDACTED] ¢/kWh) or (B) if Seller fails to provide notice under (A) above, Buyer shall offer to execute a contract with Seller at prices and with terms as then approved by the CPUC, if any.
(iv) If Buyer does not delay the fixing of the Contract Price under this Section (c) or if, after Buyer delays the fixing of the Contract Price, either Buyer or Seller subsequently provides notice triggering the fixing of the Contract Price under this Section (c), and, in any case, if Buyer and Seller are unable to agree upon the NPF or any other component of the Contract Price formula, whether under this Section (c) or under Section (b) above, then: (A) the Contract Price shall nevertheless be fixed at the time scheduled as if the parties had agreed; (B) payments shall continue temporarily and subject to adjustment based upon the methodology set forth in Section (a) above; and (C) the fixed Contract Price, once finally determined, shall be applied retroactively to the date upon which the Contract Price was to be fixed.
(d) The "Determination Date", as used herein, shall be the first business day after the day that is six days following the CPUC Approval Date, if SDG&E does not delay the fixing of the Contract Price under section (c) above. If SDG&E delays the fixing of the Contract Price under section (c) above, the Determination Date is either (i) the first business day after six days following Buyer's receipt of notice from Seller to fix the Contract Price under section (c)(ii) or (c)(iii) above, (ii) the first business day after six days following Seller's receipt of notice from Buyer to fix the Contract Price under section (c)(i) above, as applicable, or (iii) August 31, 2003, if the Contract Price is set under (c)(iii)(B) above.
On-Peak hours: HE 0700 through 2200 Pacific Prevailing Time, Monday through Saturday excluding NERC Holidays.
Off-Peak hours: All other hours.
Other Charges: None.
CPUC Approval: Buyer shall submit this Confirmation and the Master Agreement to the CPUC for approval and authorization within fourteen (14) calendar days of execution of this Agreement.
Delivery Period: The Parties shall commence their obligation to purchase and deliver the Product pursuant to this Confirmation on the CPUC Approval Date, as set forth in the Settlement Agreement and Release of Claims, between CP Kelco and SDG&E dated _________, 2002 ("Settlement Agreement"), and, except as otherwise provided in Section (c)(iii), the term of this Transaction shall continue for a period of five (5) years after the day following the Determination Date, terminating at HE 2400 on the day following the fifth (5th) anniversary of the Determination Date. In the event the Settlement Agreement is terminated pursuant to the provisions of Section 6 therein, the Transaction contemplated by this Confirmation and the Master Agreement shall automatically terminate without further act or notice.
Purchase of Gas: Seller shall have sole responsibility for purchasing the natural gas necessary to operate the Generating Facility. Seller represents that it has committed to purchase [REDACTED] MMBtu of natural gas per month through September 2004 to operate its cogeneration facility. This quantity of natural gas represents approximately [REDACTED] % of the baseload fuel requirements of the cogeneration facility. Commencing six (6) months after the CPUC Approval Date and annually thereafter throughout the remaining term of this Agreement, Seller shall provide Buyer with reasonable information regarding Seller's additional commitments to purchase natural gas to operate the cogeneration facility for the remaining term of this Agreement. Notwithstanding any other provision of this Confirmation and the Master Agreement, Seller shall not sell this natural gas solely for the reason that at times it may appear more economic to sell such natural gas than to operate the cogeneration facility.
Interconnection Requirements: It is the intent of the Parties that power deliveries to the SDG&E Electric System shall not at any time exceed the maximum interconnection capacity specified in Section 5 of Exhibit B of the Service Agreement (the "Interconnection Capacity"). In the event that energy deliveries exceed the Interconnection Capacity or Seller proposes to make some material change or modification to the configuration or operation of the Generation Facility, including, but not limited to an increase in the Net Generating Capacity that, in SDG&E's reasonable estimation cause Seller's deliveries to exceed the Interconnection Capacity, the Parties, at either Party's request, shall meet to determine why the Interconnection Capacity was exceeded or, if relevant, whether Seller's proposal for making a material change or modification to the configuration or operation of the Generation Facility necessitates a change to the interconnection facilities. In the event of the foregoing, SDG&E shall have the right to require that a study be conducted pursuant to the ISO Tariff and SDG&E's Transmission Owner Tariff, at Seller's expense, to determine if additional facilities, including upgrades to the SDG&E transmission and distribution systems, are required to accommodate the increased generating capacity or such change or modification, as the case may be. If SDG&E determines that additional interconnection facilities or transmission/distribution system upgrades are required, then the Parties shall execute an interconnection facilities agreement to allow SDG&E to construct and recover the costs of any such additional facilities. During any period in which SDG&E and Seller have not reached an agreement as to whether the deliveries in excess of the Interconnection Capacity due to a change or modification to the configuration or operation of the Generation Facility are permissable, Seller agrees, in the event of material adverse effects resulting therefrom, that the Generating Facility shall be operated in a manner that is consistent with Prudent Electrical Practices and is likely to ensure that energy is not delivered at any time into SDG&E's Electric System in excess of the Interconnection Capacity. SDG&E's Electric Department Rule 21 shall apply to all Transactions between SDG&E and Seller under this Confirmation. To the extent Seller engages in Alternate Sales, Seller shall accomplish those Alternate Sales in accordance with the Service Agreement.
O&M Charges: Seller shall pay Buyer monthly, the cost of ownership charge for Direct Assignment Facilities set forth in Exhibit A, Section b of the Service Agreement.
Scheduling:
(a) In the event that the Seller wishes to engage in Alternate Sales, Seller shall provide Buyer thirty (30) days prior written notice of:
(i) Seller's intent to engage in Alternate Sales;
(ii) The date on which the Alternate Sales arrangement shall commence and terminate; and
(iii) The quantity of Product constituting the Alternate Sales.
(b) In the event Seller engages in Alternate Sales, subject to Section (d) below, Buyer shall have fourteen (14) days from the date on which Buyer receives the notice set forth above in which to notify Seller of Buyer's acceptance or rejection of Seller's request to schedule the Alternate Sale. If Buyer accepts Seller's request, then Buyer and Seller shall execute a scheduling coordination services agreement and, at Seller's direction, Buyer shall: (i) schedule Seller's energy with the third party Scheduling Coordinator designated by Seller; (ii) cooperate and participate with Seller's third party Scheduling Coordinator to conduct SC to SC transfers; and (iii) provide all required meter data to the ISO on a monthly basis, in accordance with the ISO Tariff.
(c) For each month or part thereof during which Buyer provides Seller any Scheduling Coordinator services for Alternate Sales, Seller will pay Buyer a Scheduling Coordinator fee, which shall be either: (i) a monthly amount as agreed to between Buyer and Seller at the time Seller requests such scheduling services, or (ii) such fee as the CPUC may approve from time-to-time.
(d) Seller may in its sole discretion, upon five (5) days prior written notice to Buyer, select another Scheduling Coordinator to schedule the delivery of the Product from Seller with respect to each Transaction and Alternate Sales thereafter. In the event Seller selects another Scheduling Coordinator under this Section (d), the duties and obligation of the parties under Sections 3.2 (a) - (f) of the Master Agreement shall terminate for the remaining term of this Agreement.
Adjustment of Contract Quantity.
(a) Effective on the date an Alternate Sale commences and continuing through the remainder of the Delivery Period hereunder, the Net Generating Capacity shall be reduced to account for the reduction in the Net Generating Capacity associated with such Alternate Sale; provided, however, if an Alternate Sale terminates before the expiration of the Delivery Period hereunder and Seller engages in subsequent Alternate Sales, the Net Generating Capacity shall be reduced only to the extent such subsequent Alternate Sales exceed the previous reduction in the Net Generating Capacity attributed to such terminated Alternate Sale.
(b) In the event Seller engages in an Alternate Sale in accordance with California Public Utilities Code §218(b)(2), Seller shall promptly notify Buyer of the quantity of hourly capacity and associated energy sold as part of the Alternative Sales and when such Alternate Sale(s) shall occur.
Special Conditions: See Other Changes.
Scheduling: As set forth in Other Changes.
This confirmation letter is being provided pursuant to and in accordance with the Master Power Purchase and Sale Agreement dated ____________ [Insert Date on which Agreement executed] (the "Master Agreement") between Party A and Party B, and constitutes part of and is subject to the terms and provisions of such Master Agreement. Terms used but not defined herein shall have the meanings ascribed to them in the Master Agreement.
CP Kelco, U.S., Inc. San Diego Gas & Electric Company
By:_________________________________ By:_________________________________
Name: ________Jurgen Dominik_________ Name: _______James P. Avery__________
Title: ____VP of Global Operations_______ Title: ____SVP Electric Transmission ____
Phone No: Phone No:
Fax: Fax:
MASTER POWER PURCHASE AND SALE AGREEMENT
COVER SHEET
This Master Power Purchase and Sale Agreement ("Master Agreement") is made as of the following date: _________________ ("Effective Date"). The Master Agreement, together with the exhibits, schedules and any written supplements hereto, the Party A Tariff, if any, the Party B Tariff, if any, any designated collateral, credit support or margin agreement or similar arrangement between the Parties and all Transactions (including any confirmations accepted in accordance with Section 2.3 hereto) shall be referred to as the "Agreement." The Parties to this Master Agreement are the following:
Name CP Kelco, U.S., Inc. ("CP Kelco" or "Seller" or "Party A") |
Name: San Diego Gas & Electric Company ("SDG&E" or "Buyer" or "Party B") |
All Notices: |
All Notices: |
Street: 2025 East Harbor Drive |
Street: 8306 Century Park Court |
City: San Diego, CA Zip: 92113 |
City: San Diego, CA Zip: 92123 |
Attn: Cogeneration Manager |
Attn: Contract Administration |
Invoices: Attn: Cogeneration Invoices Facsimile: (619) 595-5978 |
Invoices: |
Scheduling: Attn: Cogeneration Supervisor |
Scheduling: |
Payments: Attn: Cogeneration Payments Phone: (619) 595-5043 Facsimile: (619) 595-5978 |
Payments: |
Wire Transfer: Ref Lockbox #920082 |
Wire Transfer: |
Credit and Collections: Attn: Randy Perry Phone: (312) 554-7844 |
Credit and Collections: Attn: Credit Manager |
With additional Notices of an Event of Default or Potential Event of Default to: Attn: White & Case LLP 633 Fifth Street Los Angeles, CA 90071 |
With additional Notices of an Event of Default or Potential Event of Default to: Sempra Energy |
The Parties hereby agree that the General Terms and Conditions are incorporated herein, and to the following provisions as provided for in the General Terms and Conditions:
Party A Tariff Tariff Dated Docket Number
Party B Tariff Tariff FERC Dated 9/10/99 and accepted 10/25/99 Docket Number 88 FERC ¶ 61,212
Article Two |
|||
Transaction Terms and Conditions |
[] Optional provision in Section 2.4. If not checked, inapplicable. | ||
Article Four |
|||
Remedies for Failure |
[] Accelerated Payment of Damages. If not checked, inapplicable. | ||
Article Five |
[] Cross Default for Party A: N/A | ||
Events of Default; Remedies |
[] Party A: |
Cross Default Amount $ N/A | |
[] Other Entity: |
Cross Default Amount $ N/A | ||
[] Cross Default for Party B: N/A |
N/A | ||
[] Party B: |
Cross Default Amount $ N/A | ||
[] Other Entity: |
Cross Default Amount $ N/A | ||
5.6 Closeout Setoff | |||
[] Option A (Applicable if no other selection is made.) | |||
[] Option B - Affiliates shall have the meaning set forth in the Agreement unless otherwise specified as follows: | |||
[X] Option C (No Setoff) | |||
Article 8 |
8.1 Party A Credit Protection: | ||
Credit and Collateral Requirements |
(a) Financial Information: N/A | ||
[] Option A | |||
(b) Credit Assurances: | |||
[X] Not Applicable | |||
(c) Collateral Threshold: | |||
[X] Not Applicable | |||
If applicable, complete the following: | |||
Party B Collateral Threshold: $ N/A; provided, however, that Party B's Collateral Threshold shall be zero if an Event of Default or Potential Event of Default with respect to Party B has occurred and is continuing. | |||
Party B Independent Amount: $ N/A | |||
Party B Rounding Amount: $ N/A | |||
(d) Downgrade Event: | |||
[X] Not Applicable | |||
If applicable, complete the following: | |||
[] It shall be a Downgrade Event for Party B if Party B's Credit Rating falls below N/A from S&P or N/A from Moody's or if Party B is not rated by either S&P or Moody's | |||
[] Other: | |||
(e) Guarantor for Party B: N/A | |||
Guarantee Amount: N/A | |||
8.2 Party B Credit Protection: | |||
(a) Financial Information: N/A | |||
[] Option A | |||
(b) Credit Assurances: | |||
[X] Not Applicable | |||
(c) Collateral Threshold: | |||
[X] Not Applicable | |||
If applicable, complete the following: | |||
Party A Collateral Threshold: $ N/A provided, however, that Party A's Collateral Threshold shall be zero if an Event of Default or Potential Event of Default with respect to Party A has occurred and is continuing. | |||
Party A Independent Amount: $ N/A | |||
Party A Rounding Amount: $ N/A | |||
(d) Downgrade Event: | |||
[X] Not Applicable | |||
If applicable, complete the following: | |||
[] It shall be a Downgrade Event for Party A if Party A's Credit Rating falls below N/A from S&P or N/A from Moody's or if Party A is not rated by either S&P or Moody's | |||
[] Other: | |||
(e) Guarantor for Party A: N/A | |||
Guarantee Amount: N/A | |||
Article 10 |
|||
Confidentiality |
[X] Confidentiality Applicable |
If not checked, inapplicable. | |
Schedule M |
|||
[] Party A is a Governmental Entity or Public Power System | |||
[] Party B is a Governmental Entity or Public Power System | |||
[] Add Section 3.6. If not checked, inapplicable | |||
[] Add Section 8.6. If not checked, inapplicable | |||
Other Changes |
Specify, if any: See additional provisions set forth below. | ||
Part 1. GENERAL TERMS AND CONDITIONS.
Article One - General Definitions.
(a) Section 1.11 shall be amended by adding the following after "Party" in third line: "after using commercially reasonable efforts to mitigate such costs,".
(b) Section 1.12 shall be amended by deleting in the fourth line the word "issues" and replacing it with the word "issuer".
(c) Section 1.50 shall be amended by deleting the reference to "Section 2.4" and replacing it with "Section 2.5".
(d) Section 1.51 shall be amended by adding the words "for delivery" immediately following the word "purchases" in the second line.
(e) Section 1.51 shall be further amended by deleting in the fifth line the words "at Buyer's option" and replacing them with the words "absent a purchase".
(f) Section 1.53 shall be amended by deleting the words "at the Delivery Point" in the second line.
(g) Section 1.53 shall be further amended by deleting in the fifth line the words "at Seller's option" and replacing them with the words "absent a sale".
(h) Section 1.60 shall be amended by inserting the words "in writing" immediately following the words "agreed to".
(i) Section 1.62. The following definition shall be added as Section 1.62: "ISO" means the California Independent System Operator, a California public benefit corporation, or its successor in interest.
(j) Section 1.63. The following definition shall be added as Section 1.63: "WECC" means the Western Electricity Coordinating Council.
(k) Section 1.64. The following definition shall be added as Section 1.64: "Prudent Electrical Practices" means, as set forth in SDG&E's Electric Department Rule 21 those practices, methods, and equipment, as changed from time to time, that are commonly used in prudent electrical engineering and operations to design and operate electric equipment lawfully and with safety, dependability, efficiency, and economy.
(l) Section 1.65. The following definition shall be added as Section 1.65: "Generating Facility: means Seller's generating units, together with all protective and other associated equipment and improvements owned, maintained, and operated by Seller, which are necessary to produce the electrical power to be delivered under this Agreement, excluding associated land, land rights, and interests in land.
(m) Section 1.66. The following definition shall be added as Section 1.66: "CPUC" means the California Public Utilities Commission or its successor in interest.
(n) Section 1.67. The following definition shall be added as Section 1.67: "Service Agreement" means the Service Agreement for Wholesale Distribution Service between NutraSweet Kelco Company and San Diego Gas and Electric Company.
(o) Section 1.68. The following definition shall be added as Section 1.68: "SDG&E Electric System Integrity" means the state of operation of SDG&E''s electric system in a manner which is deemed to minimize the risk of injury to persons and/or property and enables SDG&E to provide adequate and reliable electric service to its customers. All relays, meters, power circuit breakers, synchronizers, and other control devices as shall be agreed to by the Parties in accordance with the requirements of SDG&E as necessary for proper and safe operation of the Generating Facility in parallel with SDG&E's electric system.
(p) Section 1.69. The following definition shall be added as Section 1.69: "Seller's Protective Apparatus" means all relays, meters, power circuit breakers, synchronizers, and other control devices as shall be agreed to by the Parties in accordance with the requirements of SDG&E as necessary for proper and safe operation of the Generating Facility in parallel with SDG&E's electric system.
(q) Section 1.70. The following definition shall be added as Section 1.70: "Parties" means Party A and Party B, collectively.
(r) Section 1.72. The following definition shall be added as Section 1.72: "Net Generating Capacity" means the Generating Facility's gross generating capacity less (i) the amount required for station use (as such requirement may change from time to time); (ii) the amount committed to supply electrical demand of (A) Affiliates, (B) International Specialty Products and (C) any transactions permitted under the California Public Utilities Code (the "PU Code") Section 218(b)(2)(up to 8760 MWh in any calendar year) (as each such requirement may change from time to time); and (iii) any amount committed to Alternate Sales (in each such case as reasonably determined by Seller).
(s) Section 1.73. The following definition shall be added as Section 1.73: "Alternate Sale" means an agreement by Seller to sell electric energy to a third party that is other than (i) an Affiliate, (ii) International Specialty Products or (iii) as otherwise permitted under the California Public Utilities Code (the "PU Code") Section 218(b)(2) (provided that such sale in (iii) does not exceed 8760 MWh in any calendar year).
(t) Section 1.74. The following definition shall be added as Section 1.74: "ISO Tariff" means the FERC-approved and effective tariff and protocols of the ISO, as modified or superseded from time to time.
(u) Section 1.75. The following definition shall be added as Section 1.75: "SDG&E's Electric Department Rule 21" means the version of SDG&E's Electric Department Rule 21 as filed and approved by the CPUC and appended to the Confirmation.
Article Two - Transaction Terms and Conditions
(a) Section 2.2 shall be amended by adding the following paragraph at the end of the Section 2.2:
"Party A and Party B confirm that this Master Agreement shall supersede and replace all prior agreements between the parties hereto with respect to the subject matter hereof, including (on a prospective basis only) the Uniform Standard Offer No. 1 As-Available Capacity and Energy Power Purchase Agreement between San Diego Gas and Electric Company and NutraSweet Kelco Company dated as of September 23, 1998, as amended on October 4, 2001 and December 20, 2001. Party A and Party B confirm the terms of those Transactions set forth on Exhibit B attached hereto and as evidenced by the written confirmations with respect thereto, and agree that such Transactions are hereby part of, and effective as of the Effective Date, governed by this Master Agreement, and are part of the single integrated agreement between the Parties consistent with the first paragraph of this Section 2.2."
(b) A new Section 2.6 shall be added as follows:
2.6 No Oral Agreements or Modifications. Notwithstanding anything to the contrary in this Master Agreement, including in this Article Two, no Transaction or other binding commitment between the Parties shall be entered into unless such Transaction or commitment is in writing, including through electronic communication, and signed by both Parties. Neither this Agreement nor any Transaction hereunder may be amended or modified orally, including by Recording pursuant to Section 2.5.
Article Three - Obligations and Deliveries
(a) Section 3.2 shall be deleted in its entirety and replaced with the following:
3.2 Scheduling.
(a) Buyer shall act as Seller's Scheduling Coordinator (which shall have the meaning ascribed to such term in the ISO Tariff, the ("SC")) with respect to each Transaction and schedule the delivery of the Product from Seller to Buyer with the ISO in a commercially reasonable manner. As Seller's SC, Buyer shall comply in all respects with this Agreement and the ISO Tariff, including, but not limited to, providing all required metering data to ISO, and Buyer shall indemnify Seller for all ISO directly related liabilities, losses, damages, costs and expenses arising out of Buyer's failure to do so.
(b) With respect to each Transaction and to enable Buyer to schedule Product from Seller with the ISO, Seller shall schedule the delivery of Product to Buyer in advance as follows: (i) Each Business Day, no later than 9:00 a.m. Pacific Prevailing Time ("PPT") two (2) days before the effective Schedule Date (as defined in the ISO Tariff), Seller shall provide in writing to Buyer's designated scheduler, a forecast daily schedule ("Daily Schedule") of Product Seller expects to deliver to the grid each hour of the Schedule Date; except that Seller shall provide a Daily Schedule for each hour of Sunday, Monday and Tuesday, no later than 9:00 a.m. PPT on Thursday of the preceding week; and (ii) Seller shall provide in writing a Daily Schedule for each hour of a holiday, no later than 9 a.m. PPT one (1) Business Day prior to the WECC pre-scheduling timeline of such holiday.
(c) Seller shall use commercially reasonable efforts to match actual hourly generation to its Daily Schedule; provided, however, Seller shall promptly notify Buyer's designated scheduler of any expected deviation from the Daily Schedule and provide Buyer's designated scheduler with an updated Daily Schedule estimating the amount of Product Seller will deliver along with an estimated time for resolution of the problem which caused deviation from the Daily Schedule. SDG&E shall attempt to mitigate the adverse impacts, if any, SDG&E may incur in the ISO Hour-Ahead Market (as defined in the ISO Tariff) as a result of Seller's deviation(s) to the Daily Schedule; provided, however, Seller shall be responsible for all uninstructed deviation penalties assessed SDG&E as a direct result of Seller's uninstructed deviation(s) under, and only to the extent Seller's uninstructed deviation(s) are beyond the tolerance band for uninstructed deviations permitted under the ISO Tariff. At Buyer's option, Buyer shall either adjust Seller's monthly billing, submit an invoice to Seller or both, for all penalties and charges assessed to Buyer by the ISO resulting from such uninstructed deviations by Seller.
(d) Notwithstanding the preceding, Buyer acknowledges that in no event shall Seller be liable to Buyer for uninstructed deviation charges or penalties other than (i) as expressly set forth in (c) above, or (ii) if such charges or penalties are the result of Buyer's (A) failure to comply with this Agreement or the ISO Tariff, or (B) negligence or willful misconduct in the scheduling of Seller's Product to the ISO.
(e) Seller shall provide all schedules to Buyer's designated scheduler by: (i) electronic mail to tsched@sdge.com or (ii) facsimile transmission at 858-650-6191. Buyer may revise the designated scheduler information via prior written notice to Seller.
(f) During the term of this Agreement, should the ISO revise the ISO Tariff and Protocols in a manner that changes any scheduling requirements applicable to a Transaction hereunder, Buyer shall provide Seller with written notice of the revision(s), the Parties shall append the new scheduling procedures to this Agreement, and the Parties shall comply with the new procedure(s) on the date they become effective.
