Power Sale Agreement. between. PTC India Limited. and. [Insert Name of Procurer] For. Sale of 270 MW Capacity

Transcription

1 Power Sale Agreement between PTC India Limited and [Insert Name of Procurer] For Sale of 270 MW Capacity From 450 MW Stage-II Baglihar Hydroelectric Project Through tariff based competitive bidding

2 TABLE OF CONTENTS ARTICLE 1: DEFINITIONS AND INTERPRETATION... 5 ARTICLE 2: TERM OF AGREEMENT ARTICLE 3: PRINCIPAL OBLIGATIONS OF THE PARTIES ARTICLE 4: SYNCHRONISATION, TESTING AND COMMISSIONING ARTICLE 5: OPERATION AND MAINTENANCE ARTICLE 6: INTERCONNECTION, TRANSMISSION, METERING AND ENERGY ACCOUNTING ARTICLE 7: BILLING AND PAYMENT ARTICLE 8: FORCE MAJEURE ARTICLE 9: LIABILITY AND INDEMNIFICATION ARTICLE 10: GOVERNING LAW AND DISPUTE RESOLUTION ARTICLE 11: EVENTS OF DEFAULT AND TERMINATION ARTICLE 12: MISCELLANEOUS PROVISIONS SCHEDULE A: TECHNICAL LIMITS AND CONTRACTED CHARACTERISTICS SCHEDULE B: TARIFF SCHEDULE C: ADJUSTMENT OF ENERGY OUTPUTS SCHEDULE D: AMENDMENTS TO THE PSA Page 2 of 59

3 THIS POWER SALE AGREEMENT ("PSA or Agreement") is made on this day of, Two Thousand and Sixteen between: PTC India Limited (formerly known as Power Trading Corporation of India Limited), a public limited company incorporated under the Companies Act, 1956, having its registered office at 2 nd floor, NBCC Tower, 15 Bhikaji Cama Place, New Delhi (hereinafter referred to as "PTC", which expression shall unless repugnant to the context or meaning thereof be deemed to include its successors and permitted assigns); and [Name and Details of the Procurer], (hereinafter referred to as the Procurer, which expression, unless repugnant to the context, shall be deemed to include the successors and permitted assigns); each also individually referred to as the "Party", and collectively referred to as "Parties". WHEREAS: (A) (B) (C) (D) PTC has been established with an objective, inter-alia, to carry out in India and abroad, the business of purchase of all forms of electrical power from independent power producers, captive power plants and other generating companies, state electricity boards, state government statutory bodies, licensees, power utilities, and sale of all forms of electrical power to the state electricity boards, power utilities, generating companies, bulk consumers of power and other organisations buying power, whether in the private or public sector; The Procurer has been established with an objective, inter alia to purchase and distribute electricity on behalf of generating companies, distribution licensees, and other persons, notified by the State Government where Procurer is located. Jammu and Kashmir State Power Development Corporation Limited (hereinafter referred to as "Company or JKSPDCL") is implementing 450 MW (3 x 150 MW) Stage-II Baglihar Hydroelectric Project, comprising of three units of 150 MW each on the river Chenab at Baglihar in the Ramban district of Jammu and Kashmir, alongwith a tie line to deliver the power from the above units at the Delivery Point (hereinafter referred to as Project. The Project is expected to declare commercial operation by the year PTC and JKSPDCL has entered into a Memorandum of Understanding (hereinafter referred to as MOU ) on 11 th July 2013, for sale and purchase of net of 60% of 450 MW gross total power output at generator terminals of the Project and corresponding net electrical energy output at the Delivery Point, after excluding the auxiliary consumption, transmission and transformation losses incurred upto the Delivery Point, for onward sale on long term basis for a period of twelve (12) Page 3 of 59

4 years from the date of commercial operation of the Project through competitive bidding process. (E) (F) (G) Pursuant to the above, PTC, through Request for Proposal ( RFP ) dated 28 th March 2016, invited bids from prospective bidders for offtake of net 60% of gross total power output at the generator terminals of the Project and corresponding net electrical energy output at the Delivery Point. After evaluation of bids from respective bidders, M/s... has been identified as Successful Bidder by PTC for offtake of the Contracted Capacity in accordance with the terms and conditions of this Power Sale Agreement. The Parties hereby agree to execute this Power Sale Agreement setting out terms and conditions for sale of power upto the Contracted Capacity by PTC to the Procurer. The Procurer hereby agree, on the terms and conditions of this Agreement, to procure power up to Contracted Capacity and pay PTC the Tariff as determined in accordance with the terms of this Agreement. NOW THEREFORE, IN CONSIDERATION OF THE PREMISES AND MUTUAL AGREEMENTS, COVENANTS AND CONDITIONS SET FORTH HEREIN, IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES AS FOLLOWS: Page 4 of 59

5 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 as amended from time to time: (i) "Affected Party" shall have the meaning specified in Article 8.1.1; (ii) "Affiliate" has the meaning specified in Article (i); (iii) Applicable Law(s) in relation to this PSA, means and includes (i) all laws in force in India and laws of Jammu and Kashmir; and any statute, ordinance, regulation, notification, code and/or rules and/or (ii) any interpretation of any of them by an Indian Governmental Instrumentality and/or (iii) all applicable rules, regulations, orders, notifications by an Indian Governmental Instrumentality pursuant to the items in (i) hereof or under any of them and includes all rules, regulations, decisions and orders of the Appropriate Commission; (iv) (v) "Agreement" or "Power Sale Agreement" or "PSA" "Appropriate Commission" means this agreement including its recitals, schedules and annexures including all amendments or modifications, containing the terms and conditions for sale and purchase of electrical energy by Procurer from PTC; means the Central Electricity Regulatory Commission or a State Electricity Regulatory Commission or a Joint Electricity Regulatory Commission, competent to determine/regulate the Tariff for the Project pursuant to the Electricity Act, 2003, or their successors; has the meaning specified in Article 5.2; (vi) "Annual Generation Plan" (vii) "Arbitration" means the resolution of a dispute between the Parties in accordance with Article ; (viii) "Arbitration Act" means Indian Arbitration and Conciliation Act,1996 or J&K Arbitration and Conciliation Act 1997, as the case may be; (ix) "Auxiliary Consumption" means, in relation to a period, the energy consumed by auxiliary equipment of the generating station and transformer losses within the generating station, expressed as percent of the gross energy generated at generator terminals of all the units of the generating station; Page 5 of 59

6 (x) "Availability Based means ABT mechanism as per regulations and orders of Tariff or ABT" CERC, to the extent applied as per the terms of this PPA; (xi) Availability Factor or Availability shall have the meaning ascribed thereto in ABT (provided that in place of installed capacity and normative auxiliary consumption it shall be Contracted Capacity); (xii) "Bill Dispute Notice" means the notice issued by a Party raising a dispute regarding a Monthly Bill or Supplementary Bill issued by the other Party; (xiii) "Billable Energy shall be as specified in Paragraph 3 of Schedule C; Output" (xiv) "Business Day" means a day other than a Sunday or a statutory holiday, on which banks are open for business in Delhi; (xv) "Central Transmission Utility or "CTU" shall mean the government company notified by the Central Government under sub-section (1) of section 38 of Electricity Act, 2003; which is presently Power Grid Corporation of India Limited (POWERGRID); (xvi) "CERC" means the Central Electricity Regulatory Commission, as defined in the Electricity Act, 2003, or its successors; (xvii) "CERC Norms" means the relevant regulations as announced by the Central Electricity Regulatory Commission from time to time; (xviii) "Commercial Operation Date or "COD" means, in relation to a Unit, the date declared by JKSPDCL to the RLDC, where from scheduling process in accordance with the Grid Code is fully implemented; and in relation to the Project, shall mean Commercial Operation Date of the last Unit of the Project; However; JKSPDCL will endeavour to achieve COD of all the Units of the Project by May, 2016; (xix) "Commissioned" means in relation to the Project, the commencement of operation of the Project after it passes the Initial Performance Tests; However, the Units have been commissioned as under: Unit-IV: Unit-V: Unit-VI: (xx) "Company" means JKSPDCL as defined in the recitals; (xxi) (xxii) "Confidential Information" "Connection Agreement" has the meaning assigned to it in Article (a); an agreement between Central Transmission Utility/ Project State Utility and JKSPDCL setting out the terms relating to a connection to and/or use of the CTU/STU transmission system; Page 6 of 59

7 (xxiii) "Consultation Period" means the period, commencing from the date of issue of a Procurer Preliminary Termination Notice or a PTC 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; (xxiv) "Contracted Capacity" means in relation to the Project, net of 60% of gross total power output (i.e. 270 MW gross) at the generator terminals of the Project and corresponding electrical energy output at the Delivery Point, after excluding auxiliary consumption and transmission & transformation losses upto the Delivery Point; (xxv) "Contracted Operating Characteristics" means the performance levels of a Unit or the Project specified in paragraph 3.2 of Schedule A; (xxvi) "Control Centre" shall be the RLDC and/or SLDC or such other load control centre as per IEGC; (xxvii) "Contracted Performance Parameters" means the Contracted Capacity and the performance levels of a Unit or the Project, specified in this Agreement; (xxviii) Contract Period means the period from the Commercial Operation Date of the Project upto the Expiry Date or the date of earlier termination of this Agreement in accordance with Article 2 of this Agreement; (xxix) "Contract Year" means the period beginning on the COD of the Project or actual date of start of power supply and ending on the following thirty first (31 st ) day of March for the first year and thereafter each successive period of twelve (12) Months beginning on the first (1 st ) day of April and ending on thirty first (31 st ) day of March, provided that the last Contract Year shall end on the Expiry Date; (xxx) Declared Capacity or DC In relation to the Project means, the capability to deliver ex-delivery Point electricity in MW declared by the Project in relation to any time block of the day or whole of the day, duly taking in account the availability of water and subject to further qualification in the relevant regulation; (xxxi) "Declared Output" means the power output in MW at Delivery Point during any Settlement Period, as declared by PTC/JKSPDCL for Procurer for any time period of the day or whole of the day, including revisions thereof, which shall be sixty percent (60%) of the Declared Capacity for the Project; Page 7 of 59

8 (xxxii) "Deemed Power" means in relation to a Settlement Period, the Declared Output less the Despatched Power, which would have been delivered by PTC but has not been delivered due to less drawal by Procurer for such Settlement Period, for reasons not attributable to PTC/JKSPDCL; provided that such reduction in Power Output would have resulted in spillage of water on account of such less drawal to the extent of Declared Output; (xxxiii) "Delivery Point" means the Kishenpur substation of POWERGRID (CTU) in the State of J&K where the Power Output and Energy Output from the Project is delivered to the CTU and at which the risk and title of the Power Output and Energy Output shall pass from PTC to the Procurer; (xxxiv) "Design Energy" means MUs, which is the gross energy output of the Project at generator terminals with ninety five (95%) percent availability of the Rated Capacity of the Project in a ninety (90%) percent Dependable Year as specified in paragraph 4 of Schedule B; (xxxv) "Designated Account" has the meaning specified in Article 7.3.1; (xxxvi) "Despatch Instruction" means any instruction issued by the Control Centre to PTC/JKSPDCL in accordance with IEGC; (xxxvii) "Despatched Power" means the Power Output dispatched by the Procurer in each Settlement Period; (xxxviii) "Due Date" means the thirtieth (30 th ) day from the date of receipt of a Monthly Bill or the Supplementary Bill by Procurer or PTC, as the case may be, (or, if the day is not a Business Day, the immediately succeeding Business Day) by which date such bill is payable; in case the Due Date is not a Business Day, the next working day would be treated as the Due Date; (xxxix) "Dispute" shall have the meaning set forth in Article ; (xl) "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 any other Applicable Law related to electricity including any CERC Norms; (xli) "Energy Output" means the electrical energy, in kwh or multiples thereof, delivered by PTC to the Procure at the Delivery Point based on REA. PTC/JKSPDCL shall schedule 60% of the Declared Capacity in all Settlement Periods to the Procurer; (xlii) "Expiry Date" means the twelfth (12 th ) anniversary of the Commercial Operation Date of the Project; Page 8 of 59

9 (xliii) "Extended Force shall have the meaning assigned to it in Article 8.7; Majeure" (xliv) "Force Majeure" means an event defined in Article 8.1.2; (xlv) "Forced Outage" means any interruption or reduction of the generating capability of a Unit or the Project that is not the result of a request from the RLDC, or a Scheduled Outage or a Maintenance Outage; (xlvi) "Governmental means any legislative, judicial, quasi-judicial, Instrumentality" regulatory, executive or other governmental body (including any agency, department, board, instrumentality, commission, office or authority) of the Government of India (including State Governments) or any political subdivision thereof and includes any Appropriate Commission or tribunal; (xlvii) "Grid" shall have the meaning assigned thereto in the Electricity Act 2003; (xlviii) "Grid Code / Indian Electricity Grid Code ( IEGC ) or "State Grid Code" shall mean the grid code specified by the CERC under Clause (h) of Sub-section (1) of Section 79 of the Electricity Act and/or the State Grid Code as specified by the relevant SERC, referred under Clause (h) of Subsection (1) of Section 86 of the Electricity Act 2003, as applicable; (xlix) "Indemnifiable Losses" has the meaning specified in Article 9.1.1; (l) Initial Performance shall be as specified in Article 4.2; Test (li) "Installed Capacity" means: in relation to the Units, the gross total electrical power output at the generator terminals of the Unit: (i) for Unit 1 (ii) for Unit 2 (iii) for Unit 3 : 150 MW; : 150 MW; and : 150 MW; and in relation to the Project, 450 MW of gross total power output at the generator terminals of the Project and corresponding electrical Power Output at the Delivery Point; at the site reference conditions and in accordance with the limits of Grid conditions specified in Schedule A; (lii) "PTC Event of Default" means the event defined in Article 11.1; (liii) "PTC Preliminary Termination Notice" means the notice issued by PTC to the Procurer, expressing its intention to terminate this Agreement due to a Procurer Event of Default; Page 9 of 59

10 (liv) "PTC Termination Notice" (lv) (lvi) "Late Payment Surcharge" or Surcharge "Letter of Credit" or "LC" means the notice issued by PTC to the Procurer for termination of this Agreement as a result of a Procurer Event of Default; means the surcharge payable by either Party for delay in payment of a Monthly Bill or a Supplementary Bill, as the case may be; in accordance with Article 7.3.3; means the letter of credit provided by Procurer to PTC as Payment Security Mechanism in accordance with Article 7.5.1; (lvii) "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, in which some flexibility of scheduling is available; (lviii) "Maximum Available Capacity" (lix) "Month" means a calendar month; means the maximum capacity in MW that can be made available at the Delivery Point with all Units running, under the prevailing conditions of water levels, flows and with hundred (100%) percent gate opening during the Settlement Periods of a day; (lx) Monitoring Notice has the meaning ascribed to it in Article 5.9; (lxi) "Monthly Bill" means the bill raised by PTC for Monthly Tariff Payment in respect of each completed Month based on REA; (lxii) "Monthly Tariff Payment" (lxiii) "Ninety Percent (90%) Dependable Year" has the meaning set forth in paragraph 3.1 of Schedule B; means the year having the annual inflow of water at least equal to that which has the probability of delivering the Design Energy Output over ninety (90%) percent of the duration during the Contract Period; (lxiv) "Operator" means one or more contractors appointed as operator of power generation facilities of the Project pursuant to an operation & maintenance (O&M) contract, if any; (lxv) "Party" and "Parties" has the meaning specified in the recital of this Agreement; (lxvi) "Payment Security means the security provided by Procurer to PTC in Mechanism" accordance with Article 7.5; (lxvii) "Payment Rebate" or Rebate means the rebate admissible to Procurer for amounts paid within the Due Date, in accordance with Article 7.3.2; (lxviii) Provisional Bill means the bill raised by PTC to Procurer for the energy supplied to the Procurer at the Delivery Point based on the implemented schedule of RLDC; Page 10 of 59

11 (lxix) "Power Output" means the electrical power in kw or multiples thereof, delivered by PTC/JKSPDCL to Procurer at the Delivery Point in each Settlement Period; (lxx) "Power Purchase Agreement" or "PPA" (lxxi) "PTC India Limited" or "PTC" (lxxii) "Project State Government" means the back-to-back power purchase agreement to be entered/entered into between PTC and JKSPDCL, which relate to sale of Contracted Capacity by JKSPDCL to PTC on long term basis; means PTC India Limited as defined in the recitals; means the Government of the State in which the Project is located, viz., the Government of Jammu & Kashmir; (lxxiii) "Project State Utility means the Power Development Department, Government of J&K, or the State Transmission Utility of the State of J&K or its successors; (lxxiv) "Project" means the 450 MW (3 x 150 MW) Stage-II Baglihar hydroelectric generating facility on the river Chenab at Baglihar in the Ramban district of Jammu and Kashmir, whether completed or at any stage of development and construction including without limitation, all land, buildings, gates, spillways, surge tanks, electrical energy generating equipment (and its auxiliary equipment), switchyard, the tie line, the interconnection facilities on JKSPDCL s side designed, built, owned, operated and maintained by JKSPDCL; (lxxv) "Procurer Event of Default" (lxxvi) "Procurer Preliminary Termination Notice" (lxxvii) "Procurer Termination Notice" (lxxviii) "Procurer" has the meaning specified in Article 11.2; means the notice issued by Procurer to PTC stating Procurer s intention to terminate this Agreement due to a PTC Event of Default; means the notice issued by Procurer to PTC for termination of this Agreement due to a PTC Event of Default; has the meaning as specified in Recitals; (lxxix) "Rated Capacity" means, in relation to the Project, the lesser of: (a) the Installed Capacity of the Project, and (b) the net Tested Capacity of the Project, as determined in each case in the Initial Performance Test; (lxxx) 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; Page 11 of 59

12 (lxxxi) RFP shall mean Request for Proposal dated...(insert date of the RFP) alongwith with all schedules, annexures, formats and draft PSA attached thereto, issued by PTC and shall include any modifications, amendments or alterations and clarifications thereto; (lxxxii) "RPC" means the relevant Regional Power Committee or successors thereof, as defined in the Electricity Laws; (lxxxiii) "Regional Energy Accounts" or "REA" (lxxxiv) "RLDC" means the accounts of energy delivered by PTC/JKSPDCL and drawn by the Procurer, as issued by relevant RPC secretariat or other appropriate agency for each Week and for each Month, including the revisions and amendments thereof; means the Regional Load Despatch Centre as defined in the Electricity Act, 2003, in the region in which the Project is located or in the region in which the Procurer is located, as the case may be; (lxxxv) "Rupees" or "Rs." means the lawful currency of India; (lxxxvi) Scheduled Energy means the quantum of energy scheduled by the RLDC to be injected into the grid at the Delivery Point by PTC/JKSPDCL over a day for drawal by the Procurer; (lxxxvii) "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; (lxxxviii) "Settlement Period" means the time block for issue of daily generation and drawal schedules as provided in ABT (presently fifteen (15) minutes block); (lxxxix) "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; (xc) "SLDC" means the State Load Despatch Centre as defined in the Electricity Act 2003; which shall be the SLDC of the Procurer or the state in which the Project is located, as the case may be; (xci) Selected Bidder or Successful Bidder shall mean the bidder (including its successors and legal assigns subject fulfilment of relevant conditions specified in RFP) selected pursuant to the RFP to offtake power from the Project as per terms of the PSA and other RFP documents; (xcii) "Supplementary Bill" means a bill other than a Provisional Bill or a Monthly Bill raised by either Party in accordance with Article 7.7; Page 12 of 59

13 (xciii) State Transmission Utility or STU shall mean the board or the government company specified as such by the respective state government under Sub-section (1) of Section 39 of the Electricity Act, 2003; (xciv) "Tariff" means the tariff payable by the Procurer for the Billable Energy Output generated by the Project at the Delivery Point as specified in Schedule B; (xcv) "Tariff Payment" means the tariff payments to PTC for the Billable Energy Output in accordance with Schedule B; (xcvi) "Technical Limits" means the limits specified in Schedule A; (xcvii) "Term of Agreement" has the meaning specified in Article 2.1; (xcviii) "Tested Capacity" means the tested capacity, in relation to a Unit or the Project, during the Initial Performance Test; (xcix) "Tie Line" means the transmission line(s) from the switchyard of the Project to the Delivery Point, whether completed or at any stage of development and construction, including without limitation, all right of way, towers, conductors and accessories, land, structures, substation equipment, line protection system and communication system, designed, built, owned, operated and maintained by JKSPDCL; (c) "Transmission Facilities" means any new transmission system designed, constructed and commissioned by the CTU to evacuate the Energy Output from the Delivery Point; (ci) "Unit" means all equipment and installation that can be assigned independently and exclusively to a generating set; (cii) "Unscheduled Interchange" or UI shall have the meaning specified by CERC in relation to deviation settlement mechanism and related matters; (ciii) "Week" means a calendar week commencing from 00:00 hours of Monday, and ending at 24:00 hours of the following Sunday. Page 13 of 59

14 1.2 Interpretation Save where the contrary is indicated, any reference in this Agreement to: 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; a "day" means a calendar day starting and ending at midnight; 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; a "person" shall be construed as a reference to any person, firm, company, corporation, 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; the "winding-up", "dissolution", "insolvency", or "reorganisation" of a company or corporation shall be construed so as to include any equivalent or analogous proceedings under the law of the jurisdiction in which such company or corporation is incorporated or any jurisdiction in which such company or corporation carries on business including the seeking of liquidation, winding-up, reorganisation, dissolution, arrangement, protection or relief of debtors; words importing the singular shall include the plural and vice versa; 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; an Applicable Law shall be construed as a reference to such law including its amendments or re-enactments from time to time; a time of day shall, save otherwise provided in any agreement or document, be construed as a reference to Indian Standard Time; 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 Page 14 of 59

15 reconciled, the schedules shall supersede the main body of the Agreement, and schedule containing amendments to PPA shall supersede all other schedules; 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; the terms including or including without limitation shall mean that any list of examples following such term shall in no way restrict or limit the generality of the word or provision in respect of which such examples are provided; 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. Page 15 of 59

16 ARTICLE 2: TERM OF AGREEMENT 2.1 Effective Date and Term of Agreement This Agreement shall become effective upon the date of execution and delivery of this Agreement by the Parties hereto and this Agreement shall be valid for a term beginning from the date hereof until the Expiry Date (hereinafter referred to as Term or Term of Agreement ), when it shall automatically terminate, unless: (i) terminated earlier, pursuant to Article 2.2; or (ii) extended, pursuant to Article 2.3. Notwithstanding to the contrary, supply of Contracted Capacity and corresponding Energy Output by PTC to the Procurer under this Agreement shall commence from Commercial Operation Date of all the units of the Project. 2.2 Early Termination This Agreement shall terminate before the Expiry Date: (i) (ii) if either PTC or Procurer exercises a right to terminate, pursuant to Article 11; or in such other circumstances as the Parties herein may mutually agree in writing. Both Parties cannot terminate this Agreement until the Expiry Date except for as specified in Article 2.2(i) and Article 2.2(ii). 2.3 Extension of Term Between one hundred and eighty (180) and three hundred and sixty five (365) days prior to the Expiry Date, either Party may notify the other Party that it wishes to extend this Agreement for an additional period as may be mutually agreed upon. Upon the receipt of such notice, the Parties shall meet and discuss an extension of this Agreement, which may be extended on such terms including the period of extension, tariff, capacity and operating characteristics, as the Parties may mutually agree. Such extension shall commence upon the end of the last day of the Term of Agreement. Page 16 of 59

17 ARTICLE 3: PRINCIPAL OBLIGATIONS OF THE PARTIES 3.1 PTC's Obligations Notwithstanding anything to the contrary specified in this Agreement, PTC agrees and undertakes to: (i) always be in compliance with Applicable Laws and cause JKSPDCL to obtain and maintain in full force and effect all consents required pursuant to this Agreement and Applicable Laws, and if required by Procurer, provide Procurer with evidence that all such consents have been duly obtained; (ii) cause JKSPDCL to design, construct, commission, operate and maintain the Project including interconnection facilities on JKSPDCL s side, in such a manner so as to ensure that the useful life of the Project shall be at least equal to the Term of Agreement; (iii) cause JKSPDCL to own the Project and maintain title to the Site throughout the Term of Agreement, free and clear of encumbrances, except those permitted by Article 12.7 and those in favour of its lenders; (iv) ensure reliable availability of the Contracted Performance Parameters throughout the Contract Period to Procurer through the use of Prudent Utility Practices, consistent with the Technical Limits so as to meet the Despatch Instructions throughout the Contract Period; (v) deliver Energy Output to PTC at the Delivery Point in accordance with this Agreement; (vi) maintain trading license at all times required under Applicable Law for sale of power under this Agreement. 3.2 Procurer's Obligations Notwithstanding anything to the contrary specified in this Agreement, Procurer agrees and undertakes to: (i) schedule the power upto the Contracted Capacity in full at the Delivery Point and pay Provisional Bills, Monthly Bills and Supplementary Bills in accordance with this Agreement; (ii) obtain and maintain the requisite long term open access throughout Term of Agreement to ensure evacuation of Contracted Capacity and corresponding Energy Output from the Delivery Point to the Procurer drawal point by entering into requisite Transmission Service Agreement with the CTU/person; (iii) pay the applicable Transmission Service Charges (TSC), RLDC fees and charges and any other applicable charges for evacuation of power from the Delivery Point to Procurer drawal point; Page 17 of 59

18 (iv) maintain Payment Security Mechanism in accordance with Article 7.5; (v) always be in compliance with Applicable Laws. 3.3 Right to Electrical Output PTC undertakes to sell to the Procurer, the net energy generated from the Project corresponding to the Contracted Capacity and Procurer undertakes to purchase and pay the Tariff for all Energy Output supplied to the Procurer at the Delivery Point corresponding to Contracted Capacity In all Settlement Periods, PTC/JKSPDCL shall schedule net of 60% of the energy generated from the Project at the Delivery Point to the Procurer under this Agreement If the Procurer does not avail or schedule power upto the Declared Output provided by PTC/JKSPDCL, PTC shall be entitled to sell all or part of such unavailed capacity and energy to a party other than the Procurer. In case the tariff realized by PTC, net of all the charges incurred for such third party sale is in excess of Quoted Tariff as per Schedule B, the net excess sale realisation shall be equally shared between PTC and the Procurer. However, this shall not relieve Procurer of its obligations to offtake the Energy Output and make Monthly Tariff Payments to PTC To the extent of Contracted Capacity, except as otherwise permitted under this Agreement, PTC shall not during the Term of Agreement grant or sell to any third party or allow any third party to obtain any entitlement to the electricity generated by the Project without the prior written consent of Procurer; except in accordance with Articles 7.5A and during the subsistence of Procurer Event of Default under Article 11.2 or an Extended Force Majeure (where PTC is not the Affected Party) PTC shall not during the Term of Agreement use any of the electricity generated by the Project to the extent of Contracted Capacity, except for the purpose of meeting the Project's Auxiliary Consumption Procurer s obligation to offtake Energy Output will be from COD of the Project In case of delay or non-availability of open access to the transmission system or any restriction imposed by RLDC/SLDC due to grid constraint, Procurer s power offtake and payment obligation under this Agreement will be reduced to the extent of available transmission corridor, without any liability on either Party. Provided that Procurer had submitted application for long term/medium term open access as per the applicable rules, regulations and procedures within sixty (45) days of signing of this PSA and the documentary proof of the same has been submitted to the PTC. Page 18 of 59

19 3.4 Procurer's Observation Visits Procurer or its authorised representatives shall be permitted, upon reasonable prior written notice to PTC (except that no such notice shall be required in an emergency), to observe the construction and commissioning of the Units and/or Project, as the case may be, or the operation of the Project at its own cost. PTC shall cooperate with all reasonable requests of Procurer in providing such information regarding the Project as may be reasonably requested by Procurer. All such authorized representatives undertaking such observation visits on behalf of Procurer shall comply with reasonable safety and other applicable procedures notified to them by PTC/JKSPDCL. 3.5 Payment of Taxes Each Party shall duly pay all taxes, levies, duties, cess etc. applicable to it and comply with all rules and regulations as regards such taxes, levies, duties etc. and shall not do or omit to do or suffer to be done anything, which could reasonably be expected to adversely affect or prejudice the interest and rights of the other Party in any manner whatsoever. The Parties agree that the Tariff payable by Procurer shall be net of all taxes, levies, duties and cess. 3.6 RLDC/SLDC charges PTC shall bear all applicable RLDC/SLDC fees & charges and any other applicable charges upto the Delivery Point. The Procurer shall bear all applicable RLDC/SLDC fees & charges and any other applicable charges from the Delivery Point to the Procurer drawal point, in respect of the Contracted Capacity. Page 19 of 59

20 ARTICLE 4: SYNCHRONISATION, TESTING AND COMMISSIONING 4.1 Synchronization PTC shall give Procurer at least thirty (30) days written notice of the date on which it intends to synchronise a Unit to the grid Initial Performance Tests PTC shall cause JKSPDCL, at its own expense, to conduct Initial Performance Tests comprising: (i) (ii) (iii) (iv) Unit Characteristics Tests, Unit Capacity Tests, Project Characteristics Test, and Project Capacity Test. 4.3 Commercial Operation Date (COD) of Project PTC shall give at least one (1) month prior notice of the date on which JKSPDCL intends to declare COD of a Unit/Project. PTC shall also inform Procurer actual COD of a Unit/Project in writing. The supply of Contracted Capacity and Energy Output under this Agreement shall commence from the date of commercial operation of all the Units of the Project. In case PTC is in position to schedule power during such prior period before commissioning of all the Units of the Project, Procurer shall not be under obligation to offtake such power for the prior period. However, if Procurer offtake such power then tariff applicable for such prior period power shall be equal to the Tariff for first Contract Year as provided in Schedule B of this Agreement. Other terms & conditions for such power supply shall remain same as provided in this Agreement. 4.4 Duration of Power Supply Duration of power supply from the Project shall be during five months period i.e. May to September months of each Contract Year, throughout the Contract Period, as per Design Energy data provided in Schedule B of this Agreement. Page 20 of 59

21 ARTICLE 5: OPERATION AND MAINTENANCE 5.1 JKSPDCL's Operation and Maintenance Responsibilities PTC ensures that JKSPDCL shall be responsible, at its own expense, for ensuring that the Project, to the extent of providing Contracted Capacity to Procurer, is operated and maintained in accordance with the relevant orders, notifications and regulations of the CERC, RLDC, RPC, Indian Electricity Grid Code, Connection Agreement, the Applicable Law, terms of all consents and Prudent Utility Practices. 5.2 Annual Generation and Scheduled Outage Plan By the first (1 st ) day of November of each year (from second Contract Year and onwards), PTC shall submit to Procurer in writing, JKSPDCL s proposal for the Scheduled Outages and generation plan "which shall constitute the Annual Generation Plan" in the following Contract Year along with such non-outage period, not exceeding five Months, during which Scheduled Outage may cause spillage of water PTC/JKSPDCL shall provide the NRPC secretariat/rldc/control Centre, as the case may be, and the Procurer, the Scheduled Outages for the following Contract Year, as agreed to by the Parties In case of an emergency, the RLDC/Control Centre may request JKSPDCL, if possible, to reschedule a confirmed Scheduled Outage The Annual Generation Plan and Scheduled Outage plan shall include: (i) the availability of equipment, taking into account: (a) (b) (c) the Scheduled Outages; the expected Maintenance Outages; any other relevant factors; and (ii) the expected generation based on latest information on the water flow and to avoid spillage of water. The Annual Generation Plan and Scheduled Outage plan shall be finalized in accordance with the provisions of the IEGC or any other regulations notified by the competent authority constituted or established under the Electricity Act, Page 21 of 59

22 5.3 Operation Despatch Instructions Control Centre will issue Despatch Instructions directing JKSPDCL 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 and IEGC Control Centre JKSPDCL/PTC shall coordinate only with the Control Centre on all activities pertaining to control and operation of the Project under intimation to Procurer. The Control Centre shall be the load control centre to which the generation notices of JKSPDCL, including Declared Output for the day and revisions thereof, are issued by JKSPDCL, and which, in turn shall notify the SLDC and the Procurer. 5.4 Open Access The Procurer shall obtain and maintain the requisite long term/medium term open access for evacuation and transfer of Power Output and Energy Output from the Delivery Point to CTU interconnection point with the Procurer State Grid and execute necessary transmission service agreement with the CTU, in accordance with the Central Electricity Regulatory Commission (Grant of Connectivity, Long Term Access and Medium Term Access Open Access in Inter State Transmission and related matters) Regulations, 2009, as amended or substituted from time to time In case JKSPDCL/PTC fails to maintain cumulative Availability of hundred percent (100%) during the months of May to September in a Contract Year, for reasons other than Force Majeure and/or PTC s default, then all open access charges (net of refund, if any) for importing region, intermediate regions, interregional links, state system and exporting region system, to the extent the same were underutilized due to PTC/JKSPDCL s failure to deliver such requisitioned Energy Output, shall be reimbursed by PTC to the Procurer. 5.5 Scheduling The scheduling and despatch of the power shall be coordinated with concerned Regional Load Despatch Centres (RLDCs) as per the relevant provisions of Indian Electricity Grid Code (IEGC) and framework of Availability Based Tariff (ABT) read with the decisions of Northern Regional Load Despatch Centre (NRLDC) and the Northern Regional Power Committee (NRPC). Any instruction(s) issued/ to Page 22 of 59

23 be issued by the Central Electricity Regulatory Commission (CERC) and/or under any other statutory provisions shall also apply to scheduling and despatch of power. 5.9 Monitoring Notice Whenever Procurer has reason to believe that the Project may not be capable of performing consistently with the declarations contained in the Declared Output schedule including revisions thereof, it may issue a Monitoring Notice to PTC specifying that it wishes to monitor the Project's Declared Output which shall state its reason for believing that the Project may not be capable of so performing. Procurer shall be entitled to issue not more than two (2) Monitoring Notices in any Month. PTC shall not be entitled to any compensation whatsoever by reason of such monitoring of the Project Maintenance Outages and Forced Outages Whenever JKSPDCL requires a Maintenance Outage, PTC shall advise Procurer in writing, at least twenty four (24) hours in advance, of the nature of the work to be carried out, the estimated time required to complete such work and the latest time by which (in JKSPDCL's opinion) the work should commence consistent with Prudent Utility Practices After discussing the matter with JKSPDCL and the Procurer, PTC shall advise JKSPDCL of the time for commencement of the requested Maintenance Outage (which shall not be later than the latest time indicated by JKSPDCL). PTC ensures that JKSPDCL shall use its reasonable endeavours consistent with Prudent Utility Practices to take the relevant Unit out of service at the scheduled time In case of a Forced Outage, PTC shall inform Procurer and Control Centre telephonically followed by a message through fax/ certified mail within one hour of the outage, and justification for the Forced Outage shall be given in writing to Procurer as soon as possible but not later than three (3) days of such Forced Outage Maintenance of Operating Records Each Party shall maintain complete and accurate records and all other data required for proper administration of this Agreement. PTC shall cause JKSPDCL to maintain an accurate and up-to-date operating log at the Project with records of: (i) (ii) Declared Output and Despatched Power for each Settlement Period; Energy Output and Power Output for each Settlement Period; Page 23 of 59

24 (iii) (iv) (v) (vi) (viii) Deemed Power, along with the amount of water spilled during the relevant Settlement Period; head and discharge of water; changes in operating status, Scheduled Outages and Maintenance Outages; details and times of grid failure and operation of grid outside the Technical Limits; and any emergency conditions and unexpected occurrences discovered during inspections The PTC and Procurer shall maintain the following records: (i) (ii) (iii) Declared Output and Despatched Power for each Settlement Period; Power Output and Energy Output for each Settlement Period; details and times of grid failure and operation of grid outside the Technical Limits 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 including at any time during the continuation of any dispute in respect of any matter to which such records relate. All such records related to the dispute shall be maintained for the entire Contract Period. For the purposes of this Agreement, records/data maintained by the JKSPDCL shall also be deemed to have been maintained by PTC. Provided that the Parties shall not dispose off or destroy any such records related to the dispute after completion of the Contract Period or resolution of the dispute, whichever is later, without thirty (30) days prior written notice to the other Party Unscheduled Interchange charges Each Party shall be responsible for deviations made by it from the scheduled generation/drawal and for any resultant liabilities on account of Unscheduled Interchange charges, as per applicable regulations as amended or replaced from time to time. Page 24 of 59

25 ARTICLE 6: INTERCONNECTION, TRANSMISSION, METERING AND ENERGY ACCOUNTING 6.1 Interconnection Facilities and Transmission Facilities Responsibilities PTC ensures that JKSPDCL shall be responsible at its own cost for the construction, commissioning, operation and maintenance of the interconnection facilities of the Project and tie line (if applicable). 6.2 Metering For installation of main and check meters, meter testing, meter clarification and meter reading and all matters incidental thereto, the Parties shall follow and be bound by the Central Electricity Authority (Installation and Operation of Meters) Regulations, 2006; IEGC and CERC orders, as amended and revised from time to time. PTC ensures that all meters shall be installed and maintained by JKSPDCL at its own cost. 6.3 Energy Accounting Regional Energy Account The RPC or appropriate authority shall issue Regional Energy Accounts (REA) based on the data provided by the RLDC and such REAs shall be subject to subsequent corrections by such appropriate authority. The REA as finalized shall be binding on the Parties. The values of the Deemed Power used for determination of Tariff Payment in the Provisional Bill/Supplementary Bills shall be adjusted in accordance with the finalized REA. Accordingly, PTC or Procurer, as the case may be, shall raise a Supplementary Bill for adjustment of the Tariff Payment or any other amounts due. The claim of Deemed Power shall be supported by the relevant Despatch Instructions/directions issued by the Control Centre/RLDC The computation of the Energy Output for the purpose of Tariff Payment shall be made in accordance with REA. Page 25 of 59

26 7.1 General ARTICLE 7: BILLING AND PAYMENT From the date PTC commences, partly or fully, the supply of power from the Project to Procurer, Procurer shall pay PTC Monthly Tariff Payment in accordance with this Article 7 and Schedule B. All Tariff Payments made by Procurer shall be in Indian Rupees Procurer shall reimburse all applicable RLDC/SLDC fees & charges and any other applicable charges beyond the Delivery Point, in respect of Procurer share of power, as per the due dates indicated in RLDC/SLDC bills. Notwithstanding anything provided in this Agreement, no rebate shall be applicable on Supplementary Bills raised on account of such RLDC/SLDC charges. 7.2 Delivery of Monthly Bills Billing Cycle PTC shall raise a Provisional Bill on the 1 st day of every Month for the Scheduled Energy supplied to the Procurer in the previous Month and shall send either through or hand delivery or through fax and confirmation copy sent through mail/courier to the Procurer. The Provisional Bill shall be based on the implemented schedule of NRLDC which shall be downloaded from NRLDC website for the energy at the Delivery Point. Pursuant to the receipt of the Provisional Bill, the Procurer shall make payment of the amount provided in the Provisional Bill to the PTC on or before the Due Date. PTC shall raise/ issue a signed Monthly Bill for the immediately preceding Month or a credit note, as the case may be, on the basis of REA issued by NRPC or any other competent authority. The REA issued by NRPC shall be binding on the Parties for billing and payment/adjustment purposes, as the case may be. PTC shall deliver each Monthly Bill to Procurer either by or hand delivery or through fax and confirmation copy sent through mail/courier Accounting of Energy The quantum of energy sold to Procurer at Delivery Point shall be as indicated in the Regional Energy Account (REA) including any subsequent amendments issued by Northern Regional Power Committee (NRPC) and shall be binding on both the Parties. Page 26 of 59

27 7.3 Payment of Bills PTC shall either open or designate a bank account ( Designated Account ) and Procurer shall make all Tariff payments in this Designated Account. The Due Date for payment would be the thirtieth (30 th ) day commencing from the date of receipt of Monthly Bill by Procurer from PTC. In case the Due Date is a Bank Holiday, the next working day would be treated as the Due Date. Procurer will deposit the payment in the PTC s Designated Account in a mutually agreed bank on or before the Due Date through Electronic Transfer/RTGS If the Procurer pays amounts against a Monthly Bill or Supplementary Bill (either directly or through drawdown of Letter of Credit) within its Due Date, Procurer shall be entitled to a Payment Rebate in accordance with the table below: Number of days before the Due Date (Due Date: 30 days) Rates of Payment Rebate applicable 29 days Two percent (2.00%) Each day thereafter upto the Due Date Two percent (2%) less [0.033% x {29 minus number of days before the Due Date when the payment is made by PTC}] Such rebate shall be deducted from the amount against the Monthly Bill/Provisional Bill or Supplementary Bill, as applicable, by Procurer, at the time of payment itself, and the payment shall be made to PTC accordingly. No rebate shall be payable on any bills raised on account of Change in Law relating to taxes, duties and levies In the event of delay in payment of a Monthly Bill by Procurer or Supplementary Bill by either Party, beyond thirty (30) days after the Due Date, a Late Payment Surcharge shall be payable at the rate of one and half percent (1.50%) per Month on the outstanding amount of payment, calculated on a day to day basis for each day of the delay, and such Late Payment Surcharge shall be added to the amount of the Monthly Bill or Supplementary Bill, as the case may be, and the payment be made accordingly All payments required to be made under this Agreement shall be made without any deduction or set off except for: (i) deductions required by Applicable Law; (ii) rebates provided and admissible under this Agreement; (iii) amounts claimed by the Procurer from PTC, through a Supplementary Bill duly acknowledged by PTC, to be payable by the PTC, and not disputed by Page 27 of 59