),
TIS
(the "Effective Date
ASSIGNM AGREEME
is effecte the I st day of Apri ,
1999
BETWEN:
PROVICE OF BRISH COLUMBIA
as represented by the Minister of Employment and Investment
(the "Provice
AN:
BRISH COLUMIA POWER AUmORI, in its capacity as a
HYRO
Canadian Entity under the Treaty;
(the " Canadian Entity"
AN:
BRISH. COLUMIA POW)R EXCHGE CORPORATION, a British
British Columbia V6C 2X8
Columbia company havig its principal offce at 1400 - 666 Burrard Street, Vancouver
Powerex
WHREAS:
A. Canada and the United States of America are pares to the "Treaty
the Columbia River Basin"
beteen Canada , and
the United States of America relating to the Cooperative Development of the Water Resources of
including its Anexes A and B , signed at Washington, Distct
the 17th
of
and the Protocol , brought into force by exchange of instruments of ratification and an exchange of notes on September 16
1964 (the "Treaty ); and
Columbia, United States of America c;m
day of Januar, 1961 ,
B.
ursuant to Aricle V(2) of the Treaty, th United States is obligated to deliver to Canada
the Canadian Entitlement at a point on the Canada - United States
boundar nea Oliver, British Columbia, or at such other place as the entities (designated under the Treaty) may agree upon,
and the Canadian Entity and the U. S. Entity have entered into the Entity
purpose; and
Agreement for that
C.
Pursuant to Aricle
VII(l) of the
Treaty, portions of the
Canadian Entitlement may be
disposed of within the United States with the
authorization of Canada and the United States
evidenced by an exchange of notes; and
Under the terms of the Canada-British Columbia Agreement all proprietar rights
and interests in the Canadian Entitlement accruing to Canada belong to the
Provice; and
, title
By an exchange of notes effective March 31 ,
1999 (the " 1999
Exchange of Notes
Canada and the United States have authoried disposals
made in accordance with the Disposal Agreement; and
of aU or portions of the Canadian.
Entitlement within the United States with delivery and other arangements for
such disposals to be
F.
G.
Pursuant to the Disposal Agreement, the Provice may exercise
certai rights with respect
to delivery Qfportons of the C3?adian Entitlement at Points of Entitlement Delivery (as defined
in the Disposal Agreement); and
The Province wishes to assign all of its proprietar rights ,
title and interess in the
ters and
Canadian Entitlement and under the Disposal Agreement to Powerex on the
contaied in ths Agreement.
conditions
NOW THREORE the pares agree as follows:
DEFIONS
1.1.
For purposes of ths Agreement:
(a)
ATC Price"
MW. h
or "Around
the Clock Price" meas for any Month the price per
Pricig
for that Month, determned in accordace with the Purchases
and as at the
Effective Date mean the. price determed in accordance with the pricing methodology estalished in Appendix 1;
Principle and this Agreement,
FINA
(g)
(b)
C. Hydro" means British Columbia Hydro and Power Authority, not acting in
its role as Canadian Entity tinder the Treaty;
(c)
Buying Brokerage Fee" means an amount equal to a tyical arms- length thid
part broker
s fee paid by a buyer for brokering purchases of monthy blocks of
power in the west.ern interconnection where the broker doc s not take title to the
power;
(d)
Canada-British Columbia Agreement" means the agreement between Canada and
the Province dated July 8 ,
1963 ,
as amended , providing for assignment of
cert
rights and obligations under the Treaty ITom Canada to the
Provice;
(e)
downstream power benefits to which Canada is entitled at that time as described in Aricles V(I) and VI
of the
Canadian Entitlement" means at any time the
Treaty and determned in accordance with the Treaty;
(f)
Canadian Entitlement Rights" means the rights to the Canadian Entitlement
pursuant to this Agreement;
, the
rights under the Disposal Agreement and all associated rights granted or assigned
Deemed Entitlement Amount" means for any Month the amount
of Canadian
Entitlement detenned in accordance with the Treaty and the Entity
that Powerex would be entitled to receive at the Points of Border Delivery
Agreeent durig
that Month assuming no disposals withn the United States (including disposals by
way of reducton of the U. S. obligaton pursuant to the Dispo
deducton oflosses provided for in the Entity Agreement;
Agreement), afer
(h)
deliver" means make available in the case of eleccal capacity or deliver in the
case of electrical energy, or both as the context may require and derivatives of
deliver" have corresponding meanings;
(i)
Disposal Agreement" means the Agreement on Disposas of the Canadian
Entitlement within the United States for Apri 1 , 1998 through September 15
, 2024 . entered. into between Bonneville Power Administration (actng
on behalf of
(q)(j)
the U. S. Entity under the Treaty) and the Province (actng as a
under the Treaty) on March 29
, 1999;
Canadian entity
Electricity Purchase Agreement" means the agreement, providing for supply
power by Powerex to B. C. Hydro to be entered into between the Provice
Agreement;
(k)
Powerex and B C. Hydro concurrently with the parties entering into this
Entitlement Pricing Principle" means Section 6.
Entity Agreement"
the pricing
priciple
established by
(I)
eans the " Columbia
River Treaty Entity Agreement
on
aspects of the delivery of the
September
Canadian Entitlement for Apri
1 , 1998 though
2024" entered into between the Canadian Entity and the U.
Entity, dated March 29 , 1999;
(m)
(n)
Month" means a calendar month;
Monthy Price" means for any Month the price per MW or per MW.
Canadian Entitlement determned in accordance
h for
with the Entitlement Pricig
Principle and this Agreement,
and as at the
Effective Date meas the price
determed in accordance with the pricing methodology established in Append
(0)
Net EntitJement Revenue"
means the net amounts
credited or chaged to the
Settlement Account each Month, as descnoed in Secion 5.
(P)
PFJ Block Amount" meas for any period the total amount of energy in MWs to
be delivered flat over all hours during ' that period by Powerex to B.C. Hydro
pursuant to the Elect.ricity Purchase Agreement;
Points of Border Delivery" means the Points of Delivery for Canadian Entitlement
at the Canada-United States boundar as defied in the Entity
Agreeent;
(r)
Prie Rate"
means the anual rate of interest published by Powerex
s pricipal
baner trom time to time as its prime rate;
(s)
Purchases Pricig Priciple" means the pricing
Section 6.
priciple esablished by
(t)
third par broker s fee paid by a seller for brokering sales of inonthJy blocks of power
in the western interconnection where the broker does not take title to the
Selling Brokerage Fee" means an amount equal
to a tyical ars-length
power;
(u)
be maintained in ' the books and records of Power ex to which Net Entitlement Revenue is credited or charged; and
Transmission
Settlement Account" means the account to
(v)
1.2.
ost" means Transmission Cost as defied in the Entity Agreement.
Interpretation
Unless otherwse specified,
al references to Sections and
Appendices are to those set
par includes any permtted successor or assignee. The term "including" followed by descriptive words is used in this Agreement
to any
forth in this Agreement. Reference
limit the scope of the provision. headings used in this Agreement are for convenience and reference purposes only.
is not intended to
by way of exaple only and
The
ASSIGNMNT OF CANADIA ENTITLEMENT AN AGREEMENT RIGHTS
hts to Canadian Entitlement
The Province hereby sells,
assigns and transfers to
Powerex aU of the Province
proprietary rights, title and interest in the Canadian Entitlement.
hts under Disposal A reement
The Provice hereby sells, assigns and transfer's to Powerex all its right
and to the Disposal Agreement,
, title and interest in
of the Disposal
as permtted pursuant to Secion 7. 7
Agreement,
and Powerex. hereby assumes al
of the obligations of the Province under the
Disposal Agreement. At the request and cost of Powerex, the Provice
actons and
agree to tae any
exercise any rights under the Disposal Agreement that must be exercised by
the Province.
Ri2:hts under Future Al!reements
At the reques t
of Powerex,
the Province will use reasonable
efforts to negotiate other
the
agreements with the U. S. Entity or Bonneville
Powe
Administration relating to
Canadian Entitlement ,
including an
agreement providing for exchanges
of Canadian
Entitlement for power in
certain circumstances. Upon any such agreements being
the Province will , subjec to
appropriate approvals being obtained. assign to Powerex all its right, t.itle and interest in and to any
completed to the
satisfaction of Powerex,
such agreement and Powerex will assume all of the obligations of the Province under any
such agreement. At the request and cost of Powercx, the Province agrees to take any
actions and exercise any rights under any such agreement
Province.
2.4.
that must be exercised by the
Province to Giv Notice of AsshmmentJi
The Province wil forthwith notify the other parties to the Disposal Agreement and any
agreement referred to in Section 2.3 of the assignments made in this Section 2.
TERM OF ASSIGNMNT
Term
Notwthstanding the
actual date of execution of this Agreement . the term of this
it will befTom the Effective Date until September
Agreement and the assignents under
2024.
FINAl
POWER FOR JOBS
PFJ Allocated Amount
From time to time the Province
may by wrtten
notice to Powerex, accompaned by
Orders- in- Council pursuant to th Power for Jobs Development Act (British Columbia),
specif an amount of
capacity and associatea energy that will be allocated to its Power for
Jobs initiative.
4.2.
Powerex to Enter into Electricitv Purchase Al!eement
Concurrently with the execution of this Agreement . Powerex and the Provice will enter into the Electricity Purchase Agreement with B. C. Hydro under which Powerex agees to
supply the PFJ Block Amount to B. C. Hydro.
PAYMENT FOR CANADIAN ENTITEMENT RlGHTS ASSIGNED
Net Entitlement Revenue
Each Month Powerex will credit (or charge in the case of a negative , amount) to the
Settlement Account for the assignment of the Canadian
ntitlement Rights an amount in
respect of the previous Month equal to:
(a)
the D(;emer Entitlement Amount for that Month, less any amount that is subject to
agreed pricig pursuant to Section 6.4 ,
multiplied by the Monthy Price; plus
(b)
any amol,nt that is subject to agreed pricing pursuant to Section 6.4 , multiplied by
the agreed price for that amount; minus
(c)
Transmission Cost , if agreed to pursuant to S
ction 6. 6;
minus
(d)
(e)
the PFJ Block Amount for the Month, multiplied by the ATC Price; plus
the aggregate ambunt actually received that Month fTom B. C. Hydro,
including
interest received on overdue
amounts ,
as payment for the PFJ Block Amount
-=hlA.
delivered by Powerex to B. C. Hydro (during any previous Month) pursuant to
Secton 6. 1 of the Electricity Purchase Agreement.
Amounts credited or charged to the Settlement Account will be paid in accordance with
Sections 7.4 and 7.
5.2.
Powerex to Provide Information
Powerex will provide to the Province monthly at the time amounts are credited or charged
to the Settlement
Account pursuant to Section 5. 1 suffcient information to enable the
credited or charged to the
Province to verifY the amount
are being met.
Settlement Account and to
of this Agreement
otherwse verifY that the Pricing Principles and the terms and conditions
PRICIG PRICILES
Entitlement Pridne Principle
The Provice and Powerex declare that the price provisions of ths Agreement are
intended to establish as the "Monthly
Price"
at any time a sale
price for the followig
Month that reflecs the fair market value of Canadian Entitlement delivered at the British
Columbia-United States border durig that Month. For purposes
market value" at any time means the fai market value,
of ths Section 6.
fai
less the Sellg
Brokerage Fee
determned prospectively (or by a methodology which is determed prospecvely) of a
monthly quantity of power having the attributes of the Canadia Entitlement at that tie
including:
(a)
the amount of capacity and energy comprised in the Canadian Entitlement for the
Month;
(b)
the requirements for scheduling Canadian Entitlement;
(c)
. the firmess of Canadian Entitlement and the remedies for failure to deliver;
, .
, .
,"
(d)
the nature of the transmission rights,
including any limitatiqns, required to deliver
Canadian Entitlement; and
(e)
any limtations on the abilty of the Canadian Entity to receive Canadian
Entitlement capacity and/or energy at the Nelway and Waneta Points
Delivery.
of Border
6.2.
Purchases Pricin2' Princiole
The Provice and Powerex declare that the price provisions of this
Agreement are
intended to establish as the "ATC Price"
at any tie a
purchase price for 'the followig
Month ,of power delivered at the British Columbia-United States border during that
Month. For purposes of this Section 6.
price, plus the Buyig Brokerage
Fee
purchase price" for a Month meas the market
(or by a
methodology which is determned prospectively) for a monthly block of power having the
the PFJ Block Amount for that Month, inciuding:
(a)
(b)
, determed prospectvely
attbutes of
100% load factor deliveries; and
firmess and remedies for
failure to deliver as specifed in the Elecricity Purchase
Agreement.
Pricio2' Methodolo2'
The initial pricing methodology for determng the Monthy Price
d the ATC Price as
of the Effecve Date is esablished in Appendix 1.
The Provice and Powerex
acknowledge that ITom time to time durig the term of ths Agreement differen
Entitlement Pricing Principle or the Purchaes Pricig
Sooner than 12 Months afer
metods
of determg the Monthly Price or the A l'C Price may be appropriate to meet the
Principle,
as the case may be. No
the Effective Date or 12 Month since the pricing
methodology was last established (or at any other time by agreement of the paries), if a
par believes that the then CUlTent pricing methodology (in luding any values established
under it) will produce a price that wil not meet the relevant pricing principle during the
next 12 Months,
the part may,
by notice to the other part, seek to renegotiate the then
I:IUIiI
current pricing methodology. The pares will negotiate in good faith to establish, within
90 days of such notice , a new pricing methodology to replace the then current methodology. If the parties are unable to negotiate a new pricing methodology within
such time, either par may submit the matter to dispute resolution pursuant to Section 12.
Upon agreement or determnation of the new pricing
methodology by dispute resolution,
at the
the new pri ing methodology will become effective
immediately following the 90th day
beginng of the Month
after the initial notice and the paries wi adjust amounts paid from that date. In no event wil the pares adjust the amounts paid or payable for any period prior to the effectve date of the new pricig methodology.
6.4.
A2:reements on Monthlv Price
Notwithstanding any other provision of this Agreement relating to price
, the Provice and
Powerex may &0," time to time agree in wrtig that the MontPy Price for any specifed par of the Deemed Entitlement Amount will be a price , or will be determned by a pricing
methodology, specifcally agreed for that par of the Deemed Entitlement Amount.
agreement may relate to any future Month or Months.
Such
A2:reements on ATC Price
Notwthsanding any other provision of this Agreement relating to price , the Provice and ' Powerex may &om time to time agee in wrting that the ATC Price for any speced future period wi be a price ermned by a pricig methodQlogy, specifcaly , C?r wiU be
agreed for that period.
A2:reements on Transmission Cost
The Province and powe .rex may &om time to time agee in wrting that some or all of the Transmission Cost that exceeds the Anual U. S. Obligation (as defied in the Entity
Net Eiritlement Revenue and therefore charged to the Settlement Account. Such agreement may relate to any future
period.
Agreement) will be included in the determnation of
\"
Amended Pricinl! Methodolo2V to become Aopendix
pricing methodology for the Monthly Price or the ATC Price established ITom time to time pursuant to Section 6.3 will be dated and signed by the paries and attached to this Agreement as Appendix I. Such Appendix
Any new or amended
wi replace and
supersede the pricing methodology stated in it to be replaced and supersed
SETTEMENT ACCOUNT
Establishment of Settlement Account
Powerex will establish an account in its books and records
to which Net Entitlement
Revenue ITom the Effective Date will be credited (or charged if negatie).
Interest on Settlement Account Balance
The Provice will pay Powerex interest on any negative balance in the Setlement
, as
Account
at the end of each Month. Interest will accrue at the Prime Rate and will be payable
Accunt. Powerex
monthly by deduction from future positive balances in the Settlement
wiD pay the Province interest at the Prie Rate on
positive balances to the exent such
positive balances are not paid when required under this Agreement.
7.3.
Conversion to Canadian Dollars
Amounts wil be credited or charged to the Settlement Account as Net Entitlement
the las bang day of each Month the U. S. dollar amount of any positive balance in the Settement Account
Revenue in the currency of the applicable obligation. As at
wi be
converted into Canadian dollars at the Toronto noon rate posted by Powerex
s pricipal
baner.
7.4.
Pavment of Positive Balance
the positive balance. if any, in the Settlement Account as at the end of the previous Month
Powerex will pay to the Province monthly by the last working day of each Month
FiNA
. ,
after conversion to Canadian dollars as provided for in Section 7.
3 and afer deducting any
interest payable pursuant to Section 7.
Payment of Netative Balance
If at any time there is a negative balance in the Settlement Account
will represent a debt
, the negative balance
owig by the Province to Powerex. Net Entitlement Revenue
If at any time there has been a negative
credited to the Settlement Account in any future Month will be applied fi;st to eliminate
any negative balance in the Settlement Account.
balance for more than 3 consecutive months or the negative balance is more than
$10 000 000.. then the Provice will,
fortwith pay the
balance to Powerex. If it appeas at any time that there
entire amount of the negative
will be future negative balances in
the Settlement Account, the Province and Powerex will
reduce or eliminate future negative bala.nces
negotiate in good faith ways to
, including establishing re erves.
RELATIG TO THE CANADIAN ENTITY
Directions from Powerex
The Canadian Entity will , consistent with its duties as
Canadian Entity under the Treaty
fTom time to time with respect
and applicablc laws, comply with the directions of Power ex
Canadian Entitlement pursuant to the Entity Agreement; provided th t Powerex will reimburse the Canadian Entity for any costs that
to all matters pertining to the delivery of the
exceed costs the Canadian Entity would in any event incur in connecton with scheduling
Canadian Entitlement and otherwse to
perform as the Canadian Entity
under the Treaty.
The Canadian Entity will , at the cost and request of
Powerex, take actions required t.o
enforce the rights of the Canadian Entity under
ownership and value of the Canadian Entitlement.
8.2.
he Entity Agreement that relate to the
Scheduliol!
The Canadian Entity will schedule deliveries of the
Canadian Entitlement energy at the
Points of Border Delivery as requested by Powerex or the Canadian Entity may authorize
Powerex to directly schedule such deliveries. If the Canadian Entity elects to provide or
accept energy in lieu of a mid,-week flow change pursuant to paragraph 7
and formng par of the Entity Agreement), Powerex will provide or accept the energy and be entitled to any return
Entitlement Scheduling Guidelines
of the Canadian
(attached to
energy and be liable for any cost for Powerex
s own account.
Timelv Directions
The Canadian Entity wil request &om Powerex and Powerex wil in a timely way provide
Canadian Entity may request information: provide notices and take actions required under the Entity Agreement within
necessary directions to the Canadian Entity in order that th
the time lited
8.4.
by
that Agreement. .
Powerex to Consult
Powerex wil
consult with the Canadian Entity with respect to the impact Powerex
s operations under the Treaty.
marketing activities may have on the Canadian Entity'
reasonable determnation of the Canadian
Powerex wil not take actions or direct the Canadian Entity to take actions that
, in the
Entity, would violate any of the Canadian Entity s obligations under the Treaty or at law.
CANADA-BRITISH COLUMBIA AGREEMENT
Province to Commlt with Powerex and Canadian
The Province will:
Entitr
(a)
consult with Powerex and the Canadian Entity before concurrng in any of the
matters referred to in the Canada-British Columbia Agreement
, where the matter
cQncurred in would affect Powerex s rights in respect of the Canadian Entitlement;
(b)
consult with Powerex and the Canadian Entity before making any request to
Canada pursuant to the Canada-British Columbia Agreement , where the agreement sought would affect Powerex s rights in respect of the Canadian Entitlement;
(c)
include Powerex and the Canadian Entity in any consultations between Canada and
the Province pursuant to Section 7(1) or 7(3) of the Canada-
British Columbia
Agreement;
(d)
request Canada to present a claim arising under the Treaty which Powerex wishes
made against the United States pursuant to Section 7(2) of the CanadaColumbia Agreement , to the extent that the claim relates to the
British
Canadian Entitlement or Powerex s rights in respect of the Canadian Entitlement and the
Pro\jce deems the
claim to be reasonable.
No Representation as to Amount of Canadian Entitlement
The Province makes no representation to Powerex as to the amount of capacity or energy
comprising the Canadian Entitlement at any time.
10.
PROVISIONS FOR NON- DELIVRY OF CANADIAN
ENTIEMENT
10. 1. Failure to Deliver Canadian Entitlement
If the United States does not deliver
(or is not
deemed to 4ave delivered) all or any
during any Month, the Deemed Entitlement Amount for that Month will be reduced by the amount not delivered.
portion of the Canadian Entitlement it is obligated to deliver
Any undelivered amount which is delivered during any subsequent Month wil
be added to
compensation received from the United States under the Treaty with respect to the Canadian Entitlement
the Deemed Entitlement Amount for that subsequent Month. Any cash
will be credited to the Settlement Account.
11.
. 11. 1.
LIBILITY FOR COSTS
Powerex Responsible
, Powerex will be responsible for and wil payor reimburse the Province and the Canadian Entity for payment of any costs that the Province or the
Subject to Section 11.
Canadian Entity may incur
by reason of Powerex s elecion to receive Canadian
to the Disposal Agreement and
Entitlement power within the United States pursuant
,"
Anual U. S. Obligation (as defined in the Entity Agreement) as provided for in the Entity Agreement; provided the
Canadian Entity will not agree to pay such
without limitation, for any Transmission Cost that exceeds the
amounts under the Entity Agreement or
otherwse take actions that wouJd incur such costs
11. 2.
, unless directed to do so by Powerex.
Savini!
If Powerex obtains wrtten agreement of the Province with respect to payment
any portion of the Transmission Cost pursuant
to Section 6.
of all or
, such ,cost
will be for the
account of the Province and will be included
Revenue pursuant to Section 6.
12. 12. 1.
in the
determation of Net Entitlement
DISPUTE RESOLUTION
DisDutes
Any Dispute under this Agreement will be resolved by dispute reso
lution pursuant to this
Section 12. For purposes of this Section
Dispute" means any dispute that arses under
upon the Monthly Price or the ATC Price or any values that go into determning such prices.
12. 2.
or in connection with this Agreement and includes any failure to agree
Senior Executives to Assist DisDute Resolution
The parties wiU use reasonable efforts to settle aU
Disputes. In the event any such
Dispute
is not settled within 30 days afer the date such Dispute arses
days refer the matter in dispute to its Chief
, each part ':ll withn
10
Executive Offcer or in the case of the
Province to the Deputy Minister of the Ministr of Employment and Investment or such
other Deputy Minis er as may be designated (the " Senior Executives ). The Senior Executives will meet within 21 days to attempt to negotiate a resolution of the Dispute. Settlement offers will not be admissible in any subsequent dispute resolution process.
12.3.
Parties may Commence Arbitration
negotiating a resolution of the Dispute within 30 days after the first meeting of the Senior Executives or if the Senior Executives do not meet
, the paries will be deemed to be at ' an and any party may commence arbitration procedures in accordance with this
within 21 days pursuant to Section 12.
Ifthe paries have not succeeded in
impasse
Section 12.
12.4. Rules for
Arbitration
Any arbitration will proceed in accordance with the Domestic Arbitration Rules of
as they may be in force at the time of the arbitration. Unless the paries otherwse agree , any
arbitration commenced in accordance with ths Section 12 will be by single arbitrator.
12. 5.
Procedure of the British Columbia International Commercial Arbitrtion
Centre,
Arbitrator may Determine Pricinl! Methodolo2'
The parties expressly
declare that the arbitrator will hav
the express authority to
determe the pricing methodology from time to time that in the opinon of the arbitrator
meets the pricing priciples in Sections 6. 1
and 6.
12. 6.
Exclusive mean!! ofResolvinl! Disputes
The paries declare that arbitration pursuant to this Section 12 wi
be the exclusive means
final and binding.
of resolving any Dispute. The determnation of
13. 13. 1.
the aritrator will be
IMLEMENTATION COMME
Implementation Committee to be established
The parties will establish
implementation commttee (the "Implementation Commttee
for purposes of considerig issues that arise out of the performance of this Agreement.
13 . 2.
Meetin!!s of the Implementation Committee
Each party will be entitled to appoint one member of the Implementation Commttee.
The
Implementation Commttee wiIl meet ITom time to time at the request of any
member and
in any event will meet at least once annualy.
13. 3.
Role of the Implementation Committee
The Implementation Commttee wil consider changes in circumstances and whether such
changes would , in the opinion of the Implementation Commttee
, warant changes to this
s role wi be advisory ony and the Implementation Com.ttee will have no authority to amend ths Agreement or otherwse
legally bind the pares.
14.
14. 1.
Agreement. The Implementation Commttee
NO PARTNRSHI OR AGENCY
No PartnershiQ
Nothing in this Agreement will be construed as establishig a Parnership,
joint ventue or
agency relationship among the pares or any of them. Each party wi act on its own
behal and for its own benefit. No pary wil hold itself out
of the other
par
parer or agent under this Agreement. In paricular, Powerex will not be or be
as being the
construed as the agent of the Provice and
wi be entitled to dea with tbe. Caadian
Entitlement
Entitlement Rights assigned to it under thi's Agreement as it sees fit without consltation
with the Provice. Any profits or losses with respect to sales of the Canadian
will be solely for the account of Power ex.
15. 15. 1.
TERMA nON
Bv. the Province
The Province will be entitled to termnate this Agreement and the assignents under it
upon notice in wrting to Powerex ifPowerex:
FINAl
(a)
files or has filed agaist it any
resulting in
court process fo
protecon nom creditors or
commencement of banptcy, insolvency, finacial reorgantion
liquidation or
simar proceedings;
(b)
takes or is the subject of proceedings for its widing up, dissolution or liquidaton;
has a secured part or a receiver,
(c)
trustee or similar . person
take possession of or
commence proceedings against substantially al of its assets;
(d)
(e)
becomes bankpt or insolvent, however evidenced; or
is in , material
breach of this Agreement and such breach contiues afer the
Province has given Powerex wrtten notice of the breach and a reasnable
opportunity to cure the breach.
15.2.
Bv Powerex
Powerex will be entitled to termnate this Agreement and the assignments under it upon
notice in wrting to the Province if the Provice:
(a)
is in material breach of this Agreement and such breach contiues aferPowerex
has given the Province wrtten notice of the breach and a reaonable opportty
cure the breach; or
to
(b)
fais to pay the entie negative balance in the
Setement Accunt withi 180
days
after a negative balance has been incurred.
15.3.
Accrued Obli2'ations
Upon termation of this Agreement , accrued obligations and liabilties wi
until satisfied.
be preserved
FINA
,:
16.
MISCELLANEOUS
Termination of Interim A2:reement
The parties acknowledge that the Interim Entitlement Return Agreement made effective
Apri 1 ,
16. 1.
1998 among the Province , Powerex and B. C. Hydro is hereby termnated as of the
Effective Date.
16. 2.
Authoried Representatives
Each pary wil
appoint from time to time an authorized representative with authority on
part under
behalf of the appointing party to do anything within the discretion of the
this
Agreement; provided that the authorized representative will not have the authority to
amend this Agreement.
16. 3.
Severabil
If any provision of this Agreement is detenned to be unenforceable, that provision wil
be deemed severed' from and
wil not afect the enforceabilty of the
remaining provisions.
16.4. Notices
All notices required under ths Agreement must be in wrting and given by mail
, facsime
or in' such other form as the paries agree. Each pary will designate in wrting a person
for purpose of
receiving notice under this Agreement and contact information for such
days of the Effectve Date.
person (includig address and facsimie number) withi 60
Such designation may be cha1ged by subsequent notice.
16. 5.
Govemin2: Law
This Agreement will be governed by and construed in accordance with the laws of British
Columbia.
s:l\AI
16. 6.
Asshmment
No part
wi assign this Agreement or its rights under it without the prior
witheld.
wrtten consent
of the other paries, not to be unreasonably
16. 7.
No third
Dart Beneficiaries
party (other than a
This Agreement will not impart any rights enforceable by any thirdpermtted successor or assignee bound to this Agreement).
16. 8. Waiver
No waiver by a par of any default by the other party will be construed as a waiver of any
other default.
16. 9.
Confideritiall
This Agreement contains , and requires the exchange of, commercially sensitive information. The terms of this Agreement, including the pricing provisions of it and all
other material terms wiI be kept confdential by
agree or as required by any applicable laws
, rules or regulations. If any party receives a
the paries , except as the paries may
request for this Agreement or any information exchanged in connection with it
will notif the other parties of the request and wil take necessar
confdentiality.
16. 10. Amendments
, that par
steps to maintain
The terms and conditions of this Agreement may be amended only
by agreemcnt in writing
of the parties.
FINAl
';-
16. 11.
Entire A2reement
Ths Agreement represents the entire agreement among the pares
matter of this Agreement and supersedes all prior negotiations and agreements
oral or in wrting.
' relating to the subject
, whether
IN
WISS
REOF the parties have executed
ths Agreement to be
Effective Date.
effective on the
PRO
By:
Minister of Employment and Investment
'4 ,
OLUMIA
POWER AUTHORITY in its capacity as the Canadian Entity under the Treaty
By:
BRISH COLUMIA HYDRO AND
BRISH COLUMIA POWER
RATIO
By:
i:'N'.t
APPENDIX 1
This Appendix I forms a part of the Entitlement Assignment Agreement among Province of British
Columbia, British Columbia Hydro and Power Authority and British Columbia Power Exchange
Corporation effective the 1 st day of April ,
1999 ( the
" Agreement"
DEFJmONS
1.1.
Capitalized tenns used in this Appendix will have the meanngs ascribed to them by the
Agreement or by this Appendix, as the case may be.
1.2.
In this Appendix I , aU prices and other dolJar amounts are in U.
S. dollars.
1.3.
DowJones Index Price
For purposes of the
calculations in Sections 2. 1(a) and 2. 2(a) of ths Appendix I
Off-Peak
, it is
assumed that the DowJones Mid- Columbia finn price indexes are detennncd in the malUer
-described in, and for the On-Peak ,
and 24-Hour periods specifed in, the
DowJones " Wholesale Electcity
Price Indexes - Mid-Columbia , as attached to and
fonnng a part of this Appendix 1. In the event that the index prices referred to in Sections
2. 1 (a)
and 2. 2(a) of this Appendix
1 are no longer determned in the maner described in
3 of the
may, by notice to the other
such attachment, then notwithstanding the frequency limtation in Section 6.
Agreement, if the change is material , either part
Agreement.
par, seek
3 of the
renegotiate the then current pricing methodology in accordance with Section 6.
INIA MONTHY
Initial Monthlv Price
PRICING FOR CANADIAN ENTITEMENT
The Province and Powerex , agree that as at the Effective Date, the Monthly Price for
Canadian Entitlement will be determned in accordance with the
following pricing
methodology and that such pricing methodology meets the Entitlement Pricing Principle:
, (a)
the average of the prices for all On-Peak hours in the Month except On-
Peak hours
on Sundays or NERC holidays and except On-Peak
the lesser of:
hours durig which Canadian
Entitlement deliveries are curtailed , where the price for each On-
Peak hour wi be
FINAl
Appendix I - 2
the Price Cap, and
the daiy DowJones 1vd- CoJumbia
Hours for that day;
(b)
fi index price per MW. h for On-Peak
mius"er MW.
nrnus an amount equal
Secton 2. 1
(a)
(c)
to"-ties the price determed in accordance'with
of ths Appendix 1.
Initial A TC Prlcin2' for Purchases
. purchases of the
Pricig Pricipie:
(a)
that as at the Effectve Date, the ATC Price for deemed PFJ Block Amount for any Month wi be determed in accordance with the foIJowing pricing methodology and that such pricing metodology meets the Purchases
the average of the prices for all hours in a Month, where the price for each hour
The Provice and Powerex agree
be the lesser of
the Price Cap; or
wi
the daiy DowJones Mid(i)
for each On-Peak
Columbia
of
fi ,index price per MW. h as follows:
each day except NEC holidays or
day; or
hour,
Sundays, the fi On-Pea index for tht
(i)
for each Off-
Peak hour of each day except NERC
holidays or
Sundays , the fi Off-Pea index for that day; or
(Ui)
for each hour on any
NERC holiday
index for that day:
or Sunday, the 24-Hour
,"
Appendix 1 - 3
Calculation of Price CaQ
For purposes of this
Appendix 1
Price Cap " means a price for each Pricing Yea that is
the highest value of the folJowig 14
values determned for the months October though
March of the preceding Pricing Year and April of the Pricing Year in question:
(a)
, determned separately for each of the 7 months:from October to Apru , inclusive; and
the Forward Prices for the following August
(b)
the Forward Prices for the following September
the 7' months
tTom
, determed separately for each of
October to April , inclusive.
For purposes of ths Section 2. 3 of Appendix 1:
Forward Price" meas the average of the forward prices per MW.
the month in queston for firm energy delivered at MidAppenqix 1.
h on each trading day of
Columbia durig August or
September, as the case may be, as determned by Powerex pursuant to Section 2.4 of
this
Pricing Year" means a yea commencing April
Powerex
1 and ending the following March 31.
1J provide
the Province each month ffom October through April with the values
deLetmed for that month for pUrposes of establishing the Price Cap.
2.4.
FOI".!rd Price
The Forward Price wil be determned from time to time by Powerex based on the forward
pIjes Powerex . uses in the normal course of its business for ' purchase and sae decisions
derived ffom third pary quotations and other
that a third party
available market information. In ' the event commences daily quotations of forward prices for deliveries at Mid-
Columbia, and such forward price is reliable
'on daiy closing prices quoted by such third
. the "Forward Price" wiU be detennncd bascd
pary.
FINA
Appendix 1 - 4
5. .
Adiustment to Values
, As at
values set out in Sectons 2. 1 (b) and (c) of this Appendix 1. Such values may be changed in accordance with Section
6.3 of the
the Effectve Date, the paries have agreed on the
Agreement.
FIN
. ,
WHOLESALE ELECTRICITY
PRICE INDEXES
M,D- COLUMBIA
WanapumNantage delivery points along the Columbia River.
The Dow Jones Mid- Columbia Electricity Price Indexes are specifically defined bilateral , wholesale , physical transactions. volume weighted averages of Calculations for these indexes average together power transactions from Columbia , Midway, Rocky Reach
, Wells , and
Index partcipants provide Dow Jones with their daily volume weighted average prices and total volumes for eligible electcity products sold at the MidColumbia delivery points , as well as with any purchases made from entities not contrbuting to the indexes.
Participants are asked to provide Dow Jones with daily index data by 10 a. m. Pacific Time , the day after the transacted power moves. Although some MidColumbia electricity indexes will be calculated for 365 days of the year, publication wil occur only on business days. If a holiday falls during the week, data should be transmitted to Dow Jones on the first business day following a
break.
.,..N.
DAILY
SUNDAY AND NERC HOLIDAYS
Firm On-peak Firm Off-peak
Non- Firm On- peak Non- Firm Of-peak
24- Hour Firm
single transaction can be included In more than one category. If a transaction does not precisely fit into . an index category, it wil not be included in our index calculations.
The firm dailv indexes averaqe tOQether blocks of power sold on a one-day No real-time Dower is included in these indexes. Transactions are limited to power traded in 16-hour blocks during onpeak hours and a- hour blocks for off-peak. Transactions which call for delivery for more than one day are not included in calculations for
Firm Daily Indexes: forward pre-scheduled basis.
The following definitions have been designed to insure that represents a specifc power product. Since each category has a each index category unique definition, no
RevIse 101131111111
FINAl
these indexes. Volume should be reported to Dow Jones as total megawatts transacted per hour.
NERC HOlidays Index: A 24- hour firm index will be published for Sundays and NERC holidays. Transactions included in this index are limited to power traded in 24pre-scheduled blocks. hour
Firm Sunday and
pre-scheduled . The non-firm indexes follow the firm indexes with respeCt to ,single day delivery. Volumes reported forsame convention as the these indexes should
transactions with real-time transactions
Non.firm Daily Indexes:
The non. firm indexes combine one day ahead
reflect the total number of MWh transacted for the entire ON- or OFF-
PEAK reporting period.
( TERMINOLOGY
On-peak
Hours: Hours ending 0700 - 2200
seven (7) days a week
(6 a. m. - 10 p. inCludin NERC holidays,
) Pacific Time at Mid- Columbia
) Pacific Time at Mid-Columbia
seven (7) days a week
Off- peak Hours: Hours ending 2300 - 0600 (10 p. m. - 6 a. includino NERC holidays.
Firm Energy,:
Firm energy is defined as meeting a minimum criteria of being financially firm and backed with liquidating damages.
Non-firm Energy: Non-firm energy is defined as being subject to interrption at any time for Anv recall provision would be for less than one hour rom the scheduled start of service.
any reason.
Mid- Columbia indexes.
NOTE : Power conforming to any other measures of " firmness . should not be included in the
INDEX DATES
Daily Indexes: INDEX DATE = POWER DELIVERY DATE
MondaY's prescheduled transactions are combined with Tuesday Tuesday s index.
The date on a daily index corresponds
to the date the power
is delivered. For example
transactions to form
s real- time
Both Mid-C FIRM daily indexes are calculated seven days a week
Both Mid- C
includina NERC holidays
includinQ NERC
holidays
NON- FIRM daily indexes are calculated seven
days a week,
The Mid- C 24- Hour FIRM index wil be calculated for Sundays and NERC Holidays.
Revised 10/1311999
FINA
If you have any questions or if any information on this sheet is not expressed clearly, please call
Antoine Eustache at (609) 520- 7058 or Gunfher Pergher at (609) 520index group, please check with us to insure that you ara working with
7067.
If you have not received this sheet dir ctly from the News Product Development
definition.
current
Revi 10131999'
FINA