Helco Finalgeorfp Appc(Geoppa) 28feb2013

8/10/2019 Helco Finalgeorfp Appc(Geoppa) 28feb2013

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HELCO Final Geothermal RFP28 FEB 2013

FINAL REQUEST FOR PROPOSALS

FOR

RENEWABLE GEOTHERMAL

DISPATCHABLE ENERGY AND FIRM

CAPACITY RESOURCES

ISLAND OF HAWAII

Appendix CModel Power Purchase Agreement for

Renewable Geothermal Dispatchable Energy and

Firm Capacity

February 28, 2013

Docket No. 2012-0092

Hawaii Electric Light Company, Inc.


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iiHELCO Final Geothermal RFP28 FEB 2013

TABLE OF CONTENTS

Article/Section .......................................................................................................................... Page

ARTICLE 1 - DEFINITIONS .........................................................................................................3

ARTICLE 2 - SCOPE OF AGREEMENT ....................................................................................212.1 General Description of the Facility ........................................................................212.2 Term and Effectiveness of Certain Obligations .....................................................222.3 Conditions Precedent .............................................................................................252.4 Failure to Meet Milestone Dates and Commercial Operation Date Deadline .......282.5 No Waiver ..............................................................................................................312.6 End of Term ...........................................................................................................31

ARTICLE 3 - SPECIFIC RIGHTS AND OBLIGATIONS OF THE PARTIES ..........................323.1 Rights and Obligations of Both Parties ..................................................................323.2 Rights and Obligations of Seller ............................................................................363.3 Rights and Obligations of Company ......................................................................63

ARTICLE 4SUSPENSION OR REDUCTION OF DELIVERIES .........................................694.1 Initiation by Company ...........................................................................................694.2 No Obligation to Accept Energy............................................................................714.3 Initiation by Seller..................................................................................................71

ARTICLE 5 - RATES FOR PURCHASE .....................................................................................725.1 Capacity and Energy Purchased by Company .......................................................725.2 Acceptance and Capacity Tests and Changes in Firm Capacity ............................75

ARTICLE 6 - BILLING AND PAYMENT ..................................................................................776.1 Monthly Invoice .....................................................................................................776.2 Payment..................................................................................................................776.3 Billing Disputes .....................................................................................................786.4 Adjustments ...........................................................................................................78

ARTICLE 7 - CREDIT ASSURANCE AND SECURITY ...........................................................797.1 Security Fund .........................................................................................................79

ARTICLE 8 - DEFAULT ..............................................................................................................828.1 Events of Default ...................................................................................................828.2 Rights and Obligations of the Parties Upon Default ..............................................888.3 Equitable Remedies ...............................................................................................92

ARTICLE 9 - LIQUIDATED DAMAGES ...................................................................................939.1 Liquidated Damages ..............................................................................................939.2 Calculation of Liquidated Damages.......................................................................939.3 Damages in the Event of Termination by Company ..............................................959.4 Payment of Liquidated Damages ...........................................................................959.5 Adjustments ...........................................................................................................969.6 Other Rights Upon Default ....................................................................................96

ARTICLE 10 - COMPANYS USE OF AND ACCESS TO FACILITY.....................................9710.1 Entry for Work On Site ..........................................................................................9710.2 Provision of Site Space ..........................................................................................9710.3 No Ownership Interest ...........................................................................................9710.4 Inspection of Facility Operation ............................................................................97


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10.5 Company Site Representative ................................................................................98ARTICLE 11 - AUDIT RIGHTS ..................................................................................................99

11.1 Rights of Company ................................................................................................9911.2 Rights of Seller ......................................................................................................99

ARTICLE 12 - REPRESENTATIONS, WARRANTIES AND COVENANTS ........................100

12.1 By Seller...............................................................................................................10012.2 By Company ........................................................................................................102ARTICLE 13 - INDEMNIFICATION ........................................................................................103

13.1 Indemnification of Company ...............................................................................10313.2 Indemnification of Seller .....................................................................................104

ARTICLE 14 - CONSEQUENTIAL DAMAGES ......................................................................106ARTICLE 15 - INSURANCE .....................................................................................................107

15.1 Required Coverage...............................................................................................10715.2 Waiver of Subrogation .........................................................................................10715.3 Additional Insureds ..............................................................................................10715.4 Evidence of Policies Provided to Company.........................................................107

15.5 Deductibles ..........................................................................................................10715.6 Application of Proceeds From All Risk Property/Comprehensive Boiler andMachinery Insurance ............................................................................................108

15.7 Annual Review by Company ...............................................................................10815.8 No Representation of Coverage Adequacy ..........................................................10815.9 General Insurance Requirements .........................................................................108

ARTICLE 16 - SET OFF .............................................................................................................109ARTICLE 17 - DISPUTE RESOLUTION ..................................................................................110

17.1 Good Faith Negotiations ......................................................................................11017.2 Dispute Resolutions Procedures ..........................................................................11017.3 Exclusion..............................................................................................................113

ARTICLE 18 - FORCE MAJEURE ............................................................................................11418.1 Definition of Force Majeure ................................................................................11418.2 Events that Could Qualify as Force Majeure .......................................................11418.3 Exclusions From Force Majeure ..........................................................................11418.4 Consequences of Force Majeure ..........................................................................11518.5 Effect of Force Majeure on Milestone Dates and Commercial Operation Date

Deadline ...............................................................................................................11618.6 Effect of Force Majeure on Other Events of Default ...........................................11718.7 Obligations Remaining After Event of Force Majeure ........................................117

ARTICLE 19 - ELECTRIC SERVICE SUPPLIED BY COMPANY ........................................118ARTICLE 20 - ASSIGNMENT...................................................................................................119

20.1 Assignment by Seller .........................................................................................11920.2 Assignment by Company .....................................................................................11920.3 Binding on Assigns ..............................................................................................11920.4 Transfer Without Consent is Null and Void ........................................................119

ARTICLE 21 - SALE OF FACILITY BY SELLER ...................................................................12021.1 Companys Right of First Negotiation Prior to End of the Term ........................12021.2 Companys Option to Purchaseat End of Term ..................................................12221.3 Procedure to Determine Fair Market Value of the Facility .................................123


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21.4 Purchase and Sale Agreement ..............................................................................12421.5 Commission Approval .........................................................................................12621.6 Companys Option to Purchase Pursuant toSection 3.2(M)(5)(c) ......................126

ARTICLE 22 - [RESERVED] .....................................................................................................127ARTICLE 23 - EQUAL EMPLOYMENT OPPORTUNITY .....................................................128

23.1 Equal Employment Opportunity ..........................................................................12823.2 Equal Opportunity For Disabled Veterans, Recently Separated Veterans, OtherProtected Veterans and Armed Forces Service Medal Veterans .........................128

ARTICLE 24 - [RESERVED] .....................................................................................................129ARTICLE 25 - MISCELLANEOUS ...........................................................................................130

25.1 Notices .................................................................................................................13025.2 Entire Agreement .................................................................................................13125.3 Binding Effect ......................................................................................................13125.4 Relationship of the Parties ...................................................................................13125.5 Further Assurances...............................................................................................13225.6 Severability ..........................................................................................................132

25.7 No Waiver ............................................................................................................13225.8 Modification or Amendment................................................................................13225.9 Governing Law, Jurisdiction and Venue .............................................................13225.10 Facsimile Signatures and Counterparts ................................................................13225.11 Computation of Time ...........................................................................................13325.12 Commission Approval .........................................................................................13325.13 Change in Standard System or Organization .......................................................13525.14 Headings ..............................................................................................................13525.15 Definitions............................................................................................................13525.16 No Third Party Beneficiaries ...............................................................................13525.17 Proprietary Rights ................................................................................................13525.18 Limitations ...........................................................................................................13525.19 Settlement of Disputes .........................................................................................13625.20 Environmental Credits and RPS ..........................................................................13625.21 Attachments .........................................................................................................13625.22 Hawaii General Excise Tax .................................................................................13625.23 Survival of Obligations ........................................................................................13625.24 Negotiated Terms .................................................................................................13725.25 Certain Rules of Construction ..............................................................................138


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vHELCO Final Geothermal RFP28 FEB 2013

TABLE OF ATTACHMENTS

Attachment A. Diagram of Interconnection

Attachment B. Milestone Events

Attachment C. Selected Portions of NERC GADS

Attachment D. Facility Functional Description

Attachment E. Form of Interconnection Agreement

Attachment F. Facility Location and Layout

Attachment G. Sample Summary of Maintenance and Inspection Performed in PriorCalendar Year

Attachment H. Qualified Independent Assessment Companies

Attachment I. Adjustment of Charges

Attachment J. Required InsuranceAttachment K. Acceptance, Capacity, and Reliability Testing Procedures

Attachment L. Unit Incident Report

Attachment M. Preliminary Design Information

Attachment N. Sample Capacity and Energy Charge Calculation

Attachment O. Sellers Government Approvals

Attachment P. Form of Standby Letter of Credit

Attachment Q. Security Agreement

Attachment R. Form of Monthly Progress Report

Attachment S. Renewable Portfolio Standards

Attachment T. Technical Guidelines for Dispatchable Geothermal Resources


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HELCO Final Geothermal RFP28 FEB 2013 1

POWER PURCHASE AGREEMENT

For Renewable Geothermal Dispatchable Energy and Firm Capacity

between[________________________]

and

Hawaii Electric Light Company, Inc.

THIS POWER PURCHASE AGREEMENT FOR RENEWABLE GEOTHERMALDISPATCHABLE ENERGY AND FIRM CAPACITY (Agreement) is made this _____ day of_______________, 20__ (Execution Date), by and between HAWAII ELECTRIC LIGHT

COMPANY, INC. (Company), a Hawaii corporation, with principal offices in Hilo, Hawaii,and [_____________________](Seller), a [_________________], with principal offices in[________________], doing business in [_________________].

W I T N E S S E T H :

WHEREAS, Company is an operating electric public utility on the Island of Hawaii,subject to the Hawaii Public Utilities Law (Hawaii Revised Statutes, Chapter 269) and the rulesand regulations of the Hawaii Public Utilities Commission (hereinafter called theCommission); and

WHEREAS, Company operates the Company System as an independent power grid andmust maximize system reliability for its customers by ensuring that sufficient generation isavailable and that its system (including transmission and distribution) operates reliably; and

WHEREAS, Seller desires to build, own, and operate a renewable geothermaldispatchable energy and firm capacity Facility that is classified as an eligible resource under theRPS Law; and

WHEREAS, Seller understands the need to use commercially reasonable efforts tomaximize the overall reliability of Company System; and

WHEREAS, the Facility (as defined herein) will be located at[INSERT LOCATION],County of Hawaii, State of Hawaii and is more fully described in Attachment D (FacilityFunctional Description) and Attachment F (Facility Location and Layout) attached hereto andmade a part hereof; and

WHEREAS, Seller desires to sell to Company dispatchable energy, firm capacity, andother capabilities provided by the Facility, and Company agrees to purchase such dispatchable


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HELCO Final Geothermal RFP28 FEB 2013 2

energy, firm capacity, and other capabilities from Seller, upon the terms and conditions set forthherein.

NOW, THEREFORE, in consideration of the premises and the respective promisesherein, Company and Seller hereby agree as follows:


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ARTICLE 1DEFINITIONS 3HELCO Final Geothermal RFP28 FEB 2013

ARTICLE 1 - DEFINITIONS

For the purposes of this Agreement, the following terms shall have the meanings asindicated below:

Acceptance Test A test, including demonstration of operational functionality of theFacility as required by this Agreement following completion of the Facility, conducted bySeller and Company, as applicable, in accordance with Attachment K (Acceptance, Capacity,and Reliability Testing Procedures).

Agreement - Shall have the meaning set forth in the first paragraph of the first page ofthis agreement.

American National Standards Institute Code for Electricity Metering - The publicationof the American National Standards Institute which establishes acceptable performance criteriafor new types of watt-hour meters, demand meters, demand registers, instrument transformersand auxiliary devices.

Appeal Period Shall have the meaning set forth in Section 25.12(B) (Non-appealable Commission Approval Order).

Appraised Fair Market Value of the Facility Shall have the meaning set forth inSection 21.3(D) (Appraised Fair Market Value).

Arbitration Rules- Shall have the meaning set forth in Section 17.2(B) (Arbitration)

Audit Period Shall have the meaning set forth in Section 3.3(C)(1) (Company Rightto Cancel, General).

Automatic Generation Control or AGC A function of the Company EnergyManagement System which issues controls to individual generators governors to change realpower production for system balancing, supplemental frequency control and economic dispatch.

Available Capacity The maximum amount of net energy export the Facility iscapable of providing to Company at any given time, which may be up to the CommittedCapacity.

Attachments Shall have the meaning set forth in Section 25.21 (Attachments).

Available Capacity Factor Shall have the meaning set forth in Section 5.1(G)(2)(b)(Available Capacity Factor Formula).

Base Rate The primary index rate established from time to time by the Bank ofHawaii in the ordinary course of its business and published by intrabank circular letters ormemoranda for the guidance of its loan officers in pricing all of its loans which float with theBase Rate. A change in the Base Rate shall take effect on the date upon which a change in the


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Base Rate is made effective by the Bank of Hawaii. In the event the Bank of Hawaii no longerestablishes a Base Rate, the term Base Rateshall mean the primary index rate established bya leading Hawaii financial institution that is the most similar to the former Bank of Hawaii BaseRate.

Billing Period For any computation of Capacity Charge or Energy Charge payments,the immediately preceding Calendar Month.

Blackstart Capability means the ability to self start or remain energized withoutconnection to the remainder of the Company System, with the ability to energize a bus, meetingthe Company restoration plan needs for real and reactive power capability, frequency andvoltage control for restoration of the Company System following a total outage.

Business Day - Any Day other than a Saturday, Sunday or legally recognized State ofHawaii or federal holiday.

Calendar Month The period commencing at 12:00 a.m. on the first Day of anymonth and terminating at 11:59 p.m. on the last Day of the same month.

Calendar Year The period commencing at 12:00 a.m. January 1 of any year andterminating at 11:59 p.m. on December 31 of the same year.

Cancellation Fee Shall have the meaning set forth in Section 3.3(C)(1) (CompanyRight to Cancel, General).

Capacity Charge The monetary rate in $/MWh to be paid by Company to Sellerpursuant to Section 5.1(G) (Capacity Charge) of this Agreement.

Capacity Charge Rate Shall have the meaning set forth in Section 5.1(G)(2)(c)(Capacity Charge Rate).

Capacity Rate Inclusion Date The earlier of: (i) the effective date of an interim orfinal rate increase authorized by an interim or final order (whichever is first) of the Commissionin a Company general rate case that includes in Companys electric rates the additionalpurchased power costs (including the costs incurred as a result of the Capacity Charge and theEnergy Charge) incurred by Company pursuant to this Agreement that are not recoveredthrough the Energy Cost Adjustment Clause; (ii) the date upon which Company is allowed tobegin recovering such additional purchased power costs through the Purchased PowerAdjustment Clause; (iii) the date upon which Company is allowed to begin recovering suchadditional purchased power costs through the Energy Cost Adjustment Clause; or (iv) theeffective date of an interim increase in rates authorized by the Commission pursuant to HRS269-27.2(d) by which Company begins recovering such additional purchased power costs.

Capacity Test The test performed by Seller in accordance with Section 5.2(A)(Capacity Tests) and Attachment K (Acceptance, Capacity, and Reliability Testing Procedures)


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and any subsequent test under Section 5.2(B)(5) (Permanent Reduction in Firm Capacity) todetermine Firm Capacity.

Catastrophic Equipment FailureA failure of a major piece of equipment that (1)substantially reduces or eliminates the capability of the Facility to produce power, (2) is beyond

the reasonable control of Seller and could not have been prevented by the exercise ofreasonable due diligence by Seller, and (3) despite the exercise of all reasonable efforts,actually requires more than sixty (60) Days to repair (if the determination of whether aCatastrophic Equipment Failure has occurred is being made more than sixty (60) Days after thefailure) or is reasonably expected to require more than sixty (60) Days to repair (if suchdetermination is being made within sixty (60) Days after the failure).

Chapter 658A Shall have the meaning set forth in Section 17.2(B) (Arbitration).

CIP Shall have the meaning set forth in Section 3.2(A)(8)(a) (Critical InfrastructureProtection).

ClaimAny claim, suit, action, demand or proceeding.

Closing DateThe date on which the closing of long-term, non-recourse constructionand term financing of the Facility under the Financing Documents occurs.

COD Delay LD Period- Shall have the meaning set forth in Section 2.4(B)(3)(a)(Daily Delay Damages).

Code of Ethics- Shall have the meaning set forth in Section 17.2(E) (Conduct of theArbitration by the Arbitrator(s)).

Collateral Shall have the meaning set forth in Attachment Q (Security Agreement).

Commercial Operation Date The date, after satisfying the Conditions Precedent andthe requirements of Section 5.2(A) (Capacity Tests) and Attachment K (Acceptance, Capacity,and Reliability Testing Procedures), on which Seller declares the Facility in commercialoperation based on actual operation of the Facility at an electric output level of the FirmCapacity (kW) net at the Metering Point.

Commercial Operation Date Deadline - The date described as such in Section3.2(A)(3) (Commercial Operation Date Deadline).

Commission or Public Utilities Commission Shall have the meaning set forth inthe recitals.

Commission Approval Date Shall have the meaning set forth in Section 25.12(D)(Commission Approval Date).


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Commission Approval Order - Shall have the meaning set forth in Section 25.12(A)(Commission Approval Order).

Commission Submittal Date - The date of submittal of Companys completeapplication or motion for approval of this Agreement pursuant to Section 2.2(C) (Commission

Approval).

Committed Capacity [________________]kilowatts ([______]kW) of reliableelectrical capacity made available to Company net at the Metering Point under CompanyDispatch provided pursuant to this Agreement.

Company- Shall have the meaning set forth in the first paragraph of the first page ofthis Agreement.

Company Dispatch Companys right, through supervisory equipment or otherwise,to direct or control both the capacity and the energy output of the Facility pursuant to the terms

of this Agreement, which dispatch shall include real power, reactive power, voltage regulationtargets, ramp rate setting, and other characteristics of such energy output whose parameters arenormally controlled or accounted for in a utility dispatching system or specified in thisAgreement.

Company-Owned Interconnection Facility Shall have the meaning set forth inAttachment E (Form of Interconnection Agreement).

Company Site Representative Companys representative as described in Section10.5 (Company Site Representative).

Company System The electric system owned and operated by Company (to includeany non-utility owned facilities) consisting of power plants, transmission and distribution lines,and related equipment for the production and delivery of electric power to the public.

Company System Operator The individual(s) designated by job position(s) asCompanys representative(s) to act on behalf of Company on all issues regarding the dailydispatch of all generation being supplied to Company System.

Competitive Bidding Framework The Framework for Competitive Biddingcontained in Decision and Order No. 23121 issued by the Public Utilities Commission onDecember 8, 2006 and any subsequent orders providing for modifications from those set forthin the order issued December 8, 2006.

Conditions Precedent - The conditions listed in Section 2.3(A) (Company ConditionsPrecedent).

Consent to Assignment - Shall have the meaning in Section 3.1(E)(8) (Consent toAssignment).


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Consents - All necessary consents to be executed in favor of Company in order forCompany to establish, exercise and enforce its rights under the Security Agreement, theMortgage, and the other Security Documents, as such consents may be amended from time totime in accordance with the terms thereof.

Consultation Period Shall have the meaning set forth in Section 3.3(B)(2)(b)(Consultation Period).

Consumer Advocate Shall have the meaning set forth in Section 3.2(M)(2)(Confidentiality).

Consumer Price IndexConsumer Price Index for All Urban Consumers (CPI-U).

Contract Year - A twelve (12) Calendar Month period which begins on the first Dayof the month coincident with or next following the Commercial Operation Date and, thereafter,anniversaries thereof; provided, however, that, in the event the Commercial Operation Date is

not the first Day of the Calendar Month, the initial Contract Year shall also include the Daysfrom the Commercial Operation Date to the first Day of the succeeding Calendar Month.

Corrective PeriodShall have the meaning set forth in Section 5.2(B)(1).

Covered Source Air Permit - That Covered Source Air Permit permit/authority toconstruct to be issued in favor of the Facility by the State of Hawaii Department of Health.

Daily Delay Damages - Shall have the meaning set forth in Section 2.4(B)(3)(a)(Daily Delay Damages).

Day- A calendar day.

Deferral Costs Shall have the meaning set forth in Section 3.3(B)(1)(a) (DeferralCosts).

Design Life means the reasonably expected time the plant, system, or equipment canbe operated safely within the original design parameters with only normal maintenance andreplacement of normal wear parts.

Development Period Security - An amount equal to $[__]/kW of the CommittedCapacity.

Dispatch Forecast - The notice given to Seller by Company in accordance withSection 3.3(A)(2) (Dispatch Forecast).

Dispatch Range The range of real power output through which the Facility can bedispatched by remote control under Companys EMS, in accordance with Section 3.3(A)(Dispatch of Facility Power). Notwithstanding anything to the contrary, the Dispatch Rangeshall be provided between [zero (0)]MW and the Available Capacity.


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Event of Default An event or occurrence specified in Section 8.1(A) (Default bySeller) or Section 8.1(B) (Default by Company).

Execution Date The date referred to in the first paragraph of the first page of thisAgreement.

Extension Term Shall have the meaning set forth in Section 2.2(E) (ExtensionTerm).

FAA Shall have the meaning set forth in Section 17.2(B) (Arbitration).

Facility [THE FINAL WORDING OF THIS DEFINITION WILL BE BASEDON THE LOCATION OF THE FACILITY, INTERCONNECTION POINT AND

RELATED FACTORS] Shall mean Sellers renewable geothermal dispatchable energy andfirm capacitygenerating Facility that is the subject of this Agreement and as more fullydescribed in Attachment D (Facility Functional Description), including, the Seller-OwnedInterconnection Facilities, Sellers geothermal resource facilities (including all well pads, wells,

access roads and infrastructure improvements) Sellers electric generating facility( including allmaterials, equipment systems, structures, features and improvements necessary to produceelectric energy, waste collection, interim and final waste disposal, cooling water and any otherfacilities necessary for proper operation of the Facility), the Site, the Land Rights and all otherreal property, equipment, fixtures and personal property owned, leased, controlled, operated ormanaged in connection with the production and delivery of electric energy by Seller toCompany System.

Facility Functional Description Shall have the meaning set forth in Attachment D(Facility Functional Description).

Facility Personnel Shall have the meaning set forth in Section 3.2(B)(1)(c) (FacilityPersonnel).

FASB- Shall have the meaning set forth in Section 3.2(M)(1) (Financial Compliance).

FASB ASC 810 - Shall have the meaning set forth in Section 3.2(M)(1) (FinancialCompliance).

FASB ASC 840 Shall have the meaning set forth in Section 3.2(M)(1) (FinancialCompliance).

Financing Documents - The loan and credit agreements, notes, indentures, securityagreements, leases (including cross-border leases or leases involving sale-leasebacktransactions) and other agreements, documents and instruments relating to the constructionfinancing and permanent financing (including refinancing and amendments) entered into bySeller for the Facility, as the same may be modified or amended from time to time inaccordance with the terms thereof.


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Financing Parties - Any and all lenders and equity investors, other than theGuarantor(s), or any person affiliated with the Guarantor(s), providing construction financing orpermanent financing (including refinancing) for the Facility and any and all nominees, trusteesand collateral agents associated therewith. For purposes of any notices herein required to bedelivered by Company to the Financing Parties, it shall be sufficient for Company to deliver

such notices to the Party designated under the Financing Documents as the collateral agent,agent, trustee or nominee for such Financing Parties.

Firm Capacity The amount of capacity which Seller declares for the Facility inaccordance with Section 3.2(C)(13) (Acceptance, Capacity, and Reliability Tests), Section 5.2(Acceptance and Capacity Tests and Changes in Firm Capacity) and the procedures set forth inAttachment K (Acceptance, Capacity, and Reliability Testing Procedures). The Firm Capacityshall be not be greater than the Committed Capacity.

Force Majeure - Shall have the meaning set forth in Section 18.1 (Definition of ForceMajeure).

Forced Outage As defined in the 2010 NERC GADS methodology, to include U1,U2, U3 and/or Start-up Failures (SF).

GDPIPD (Gross Domestic Product Implicit Price Deflator) - The value shown in theUnited States Department of Commerce, Bureau of Economic Analysis publication entitledSurvey of Current Business for the percentage change in prices over each quarter of theCalendar Year associated with the Gross Domestic Product for the immediately precedingquarter, or, a successor publication or index.

Geothermal Resource Report A resource report from a Qualified ResourceConsultant which shall be delivered in a format acceptable to Company pursuant to Section2.3(A)(2)(a) (Executed Project Documents) and which assesses the ability of the geothermalresource to support the operation of the Facility pursuant to the terms and conditions of theAgreement for the Term of the Agreement and that at a minimum presents the test resultsand/or operating data from the production and injection wells including flow, temperature,pressure, enthalpy, geochemistry (including gas content and scaling potential, and the results ofa numerical simulation that forecasts the probable field reserves.

Good Engineering and Operating Practices - The practices, methods and acts engagedin or approved by a significant portion of the electric utility industry for similarly situated U.S.facilities, considering Companys isolatedisland setting and Company System characteristics,that at a particular time, in the exercise of reasonable judgment in light of the facts known orthat reasonably should be known at the time a decision is made, would be expected toaccomplish the desired result in a manner consistent with law, regulation, reliability for anisland system, safety, and expedition. With respect to the Facility, Good Engineering andOperating Practices include, but are not limited to, taking reasonable steps to ensure that:


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1. Adequate materials, resources and supplies including geothermal resource, areavailable to meet the Facilitys needs under normal conditions and reasonably anticipatedabnormal conditions.

2. Sufficient operating personnel are available and are adequately experienced and

trained to operate the Facility properly, efficiently and within manufacturers guidelines andspecifications and are capable of responding to emergency conditions.

3. Preventive, predictive, routine and non-routine maintenance and repairs areperformed on a basis that ensures reliable, long-term and safe operation, and are performed byknowledgeable, trained and experienced personnel utilizing proper equipment, tools, andprocedures.

4. Appropriate monitoring and testing is done to ensure that equipment isfunctioning as designed and to provide assurance that equipment will function properly underboth normal and emergency conditions.

5. Equipment is operated in a manner safe to workers, the general public and theenvironment and with regard to defined limitations such as steam pressure, temperature,moisture content, chemical content, quality of make-up water, operating voltage, current,frequency, rotational speed, polarity, synchronization, control system limits, etc.

6. Facility design, construction, installation, refurbishment, permitting, ownership,operation and maintenance meets the obligations of Seller in this Agreement under conditionsreasonably anticipated to occur during the life of this Agreement including but not limited toconsideration of probable seismic events, tropical storms, hurricanes, volcanic eruptions, andHawaiis corrosive humid marine environment.

7. [ADDITIONAL PRACTICES MAY BE ADDED DEPENDING ON THENATURE OF THE FACILITY.]

"Government Approvals": All permits, licenses, approvals, certificates, entitlementsand other authorizations issued by Governmental Authorities, as well as any agreements withGovernmental Authorities, required to fulfill its obligations under this Agreement, including theexploration and development of the geothermal resource and the construction, ownership,operation and maintenance of the Facility and the Company-Owned Interconnection Facilities,and all amendments, modifications, supplements, general conditions and addenda thereto. Acomplete list of all anticipated Government Approvals shall be set forth in Attachment O(Sellers Government Approvals).

Governmental Authority Any federal, state, local or municipal governmental body;any governmental, quasi-governmental, regulatory or administrative agency, commission, bodyor other authority exercising or entitled to exercise any administrative, executive, judicial,legislative, policy, regulatory or taxing authority or power; or any court or governmentaltribunal.


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Guaranteed Milestones Each of the critical path events described as GuaranteedMilestones in Attachment B (Milestone Events).

Hawaii General Excise Tax The tax on gross income codified under Hawaii RevisedStatutes Chapter 237 and administered by the State of Hawaii Department of Taxation and all

other similar taxes imposed by any Governmental Authority with respect to payments in thenature of a gross receipts tax, sales tax, privilege tax or the like, but excluding federal or statenet income tax.

Hawaiian Electric Industries, Inc. or HEI - The holding company incorporated in1983 under the laws of Hawaii and having Hawaiian Electric Company, Inc., Maui ElectricCompany, Limited, Hawaii Electric Light Company, Inc., and other companies as itssubsidiaries.

HRS Shall have the meaning set forth in Section 17.2(B) (Arbitration).

IBC 2006 Shall have the meaning set forth in Section 2.1(B) (FacilitySpecifications).

Indemnified Company Party Shall have the meaning set forth in Section 13.1(A)(Indemnification of Company, Indemnification Against Third Party Claims).

Indemnified Seller Party - Shall have the meaning set forth in Section 13.2(A)(Indemnification of Seller, Indemnification Against Third Party Claims).

Independent Assessment - The determination and recommendations made by aQualified Independent Engineering Company and/or a Qualified Resource Consultant regardingthe operation and maintenance practices of Seller at the Facility pursuant to Section3.2(A)(5)(c) (Process for Resolving Disagreements) and Section 3.3(D)(1) (Implementation ofIndependent Assessment).

Independent Evaluator The person selected to resolve a dispute under Section 9(Dispute) of Attachment S (Renewable Portfolio Standards).

Information Shall have the meaning set forth in Section 3.2(M)(1) (FinancialCompliance).

Initial Term Shall have the meaning set forth in Section 2.2(A)(Term).

Interconnection Agreement - The agreement between Company and Seller in theform attached as Attachment E (Form of Interconnection Agreement) which sets forth theParties respective rights and obligations with respect to the design, installation, construction,operation, maintenance, ownership and cost responsibility for the Interconnection Facilities.

[THE ATTACHED FORM OF INTERCONNECTION AGREEMENT CONTAINS

ONLY GENERAL TERMS. SPECIFIC TERMS WILL BE PROVIDED AFTER THE

COMPLETION OF THE INTERCONNECTION REQUIREMENTS STUDY.]


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Interconnection Facilities Shall have the meaning attributed to it in theInterconnection Agreement, which describes theequipment and devices required to permit theFacility to operate in parallel with, and deliver electric energy to, the Company System.

"Interconnection Requirements Study" or "IRS"A study, performed in accordancewith the terms of the IRS Letter Agreement and with Attachment E, Section 2(C) (IRS) of thisAgreement, to assess the projected interaction of the Facility with the Company System.

"Interconnection Requirements Study Letter Agreement" or "IRS Letter Agreement"The letter agreement and any written, signed amendments thereto, between Company and Sellerthat describes the scope, schedule, and payment arrangements for the InterconnectionRequirements Study.

Irrevocable Letter of Credit Shall have the meaning set forth in Section 7.1(E)(Form of Security).

Issuer Shall have the meaning set forth in Section 7.1(H) (Establishment of SecurityFunds).

kVAr- Kilovar(s).

kVArhKilovar-hour(s).

kW - Kilowatt(s).

kWh Kilowatt-hour(s).

Land RightsAll easements, rights of way, licenses, leases, surface use agreementsand other interests or rights in real estate.

Laws Shall have the meaning set forth in Section 3.2(I) (Compliance with Laws).

Liquidated Damages - Any of the damages provided for in Article 9 (LiquidatedDamages) (LD)

Losses- Any and all direct, indirect or consequential damages, fines, penalties,deficiencies, losses, liabilities (including settlements and judgments), costs, expenses (includingreasonable attorneys' fees and court costs) and disbursements.

Management Meeting- Shall have the meaning set forth in Section 17.1 (Good FaithNegotiations)

Major Equipment Overhaul - Steam turbine overhaul or replacement or other majorscheduled maintenance conducted: (i) in accordance with the equipment manufacturers


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recommendations; or (ii) otherwise in the judgment of Seller in accordance with GoodEngineering and Operating Practices.

Metering Point(s) - The physical point(s) located on the high side of the step uptransformer(s), as depicted in Attachment A (Diagram of Interconnection) at which Companys

metering is connected to the Facility for the purpose of measuring the output of the Facility inkW, kWh, kVAr and kVArh. [THIS DEFINITION SHOULD BE REVISED WHEN THEINTERCONNECTION AGREEMENT IS FINAL TO BE CONSISTENT WITH

ACTUAL LIST OF INTERCONNECTION METERING DATA. COMPANY PREFERS

THAT THIS POINT BE CONSISTENT WITH THE POINT OF

INTERCONNECTION.]

Milestone Dates The dates in Attachment B (Milestone Events) for completion ofthe Milestone Events.

Milestone Date Delay LD Period- Shall have the meaning set forth in Section

2.4(A)(1)(b) (Milestone Delay Damages).

Milestone Delay Damages Shall have the meaning set forth in Section 2.4(A)(1)(b)(Milestone Delay Damages).

Milestone Events The Guaranteed Milestones and the Reporting Milestones,collectively.

Month Shall mean thirty (30) consecutive Days. In computing a Month, the dayof the act or event after which the designated period of time begins to run shall not be included.

Monthly Invoice Shall have the meaning set forth in Section 6.1 (Monthly Invoice).

Monthly Progress Report Shall have the meaning set forth in Section 3.2(A)(7)(Monthly Progress Report).

Mortgage The mortgage, assignment of rents and security agreement to be executedby Seller in accordance with Section 3.1(E) (Company Security Documents), in favor ofCompany, granting to Company a mortgage and a lien on, among other things, Sellers right,title and interest in and to the Facility, the Site (including any lease or sublease associatedtherewith, together with assignment of rents under any such lease or sublease) and the rightsand interests of Seller associated therewith, as the same may be modified or amended from timeto time in accordance with the terms thereof.

MW Megawatt(s).

MWh Megawatt-hour(s).

Mvar Megavar(s).


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NERC GADS or North American Electric Reliability Corporation GeneratingAvailability Data System The data collection system called Generating Availability DataSystem which is utilized by the North American Electric Reliability Corporation. Forpurposes of this Agreement, the version of NERC GADS dated January 2011 shall be used(reference Attachment C) whenever reference is made to NERC GADS. In the event that the

definition of a term contained in this Article 1 (Definitions) is inconsistent with the definition ofthe term under NERC GADS, the definition contained in this Article 1 (Definitions) shallcontrol.

Net Real Power For any period of time, the total real power of the Facility in kWh(net of auxiliaries and transformer losses) as measured at the Metering Point of the Facility.

Net Salvage Proceeds The aggregate amount of proceeds received from the salvageefforts described in Section 3.3(C)(1) (Company Right to Cancel, General), less reasonable,actual, verifiable costs and expenses incurred in such efforts.

Non-appealable Commission Approval Order Shall have the meaning set forth inSection 25.12(B) (Non-appealable Commission Approval Order).

Operating Period Security An amount equal to $[__]/kW of the CommittedCapacity

Ownership Control Shall have the meaning set forth in Section 21.1(B)(2) (Changein Ownership Interests and Control).

Ownership Interest- Shall have the meaning set forth in Section 21.1(B)(1) (Change inOwnership Interests and Control).

Party Each of Seller or Company.

Parties Seller and Company, collectively.

Performance Standards The various requirements for the operation of the Facilityand the delivery of electric energy from the Facility to Company specified in Section 3.2(C)(Delivery of Power to Company) of this Agreement.

Point of Interconnection The physical point referenced in Section 3.2(C)(1)(Voltage/Reactive Power Requirements) of this Agreement and depicted on Attachment A(Diagram of Interconnection) at which the conductors owned by Company meet the conductorsowned by Seller and the ownership of the Net Real Power of the Facility transfers from Sellerto Company.

Post-COD Termination Damages- Shall have the meaning set forth in Section 9.3(B)(Post-COD Termination Damages).


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Pre-COD Termination Damages- Shall have the meaning set forth in Section 9.3(A)(Pre-COD Termination Damages).

Pre-Deferral Estimate Shall have the meaning set forth in Section 3.3(B)(1)(d) (Pre-Deferral Estimate).

Production Well Capacity The electrical power in kilowatts available from theSellers electric generating Facility at the design basis operating conditions from the combinedsteam and brine output from the geothermal production wells as determined by testing at thewellhead.

Project The Facility, Government Approvals, Project Documents, FinancingDocuments, Security Documents, and any and all documentation required pursuant to the termsof this Agreement.

Project Costs Incurred The aggregate amount expended or incurred by Seller with

regard to the acquisition, development and construction of the Facility and the financing thereof,including without limitation (and without duplication) all amounts paid or payable with regardto the construction contract, site preparation, interconnect and start-up costs, materials andequipment, geothermal resource development, insurance, taxes, project development fees andexpenses, construction management expenses and fees, fees or penalties under all ProjectDocuments, all Seller debt for financing the Facility (including principal, interest, fees,premiums and penalties relating thereto), equity funds, if any, invested in the Project (includingfees, premiums and penalties relating thereto other than those payable to the Guarantor (if any)or any of its affiliates), fees and expenses incurred in arranging financing for the Facility andattorney's fees and disbursements.

Project Documents - This Agreement, the Interconnection Agreement, any groundlease or other lease in respect of the Site, equipment, Facility and/or Land Rights, allconstruction contracts to which Seller is or becomes a party thereto, operation and maintenanceagreements, and all other agreements, documents, reports, and instruments to which Seller is orbecomes a party thereto in respect of the Facility, other than the Financing Documents and theSecurity Documents, as the same may be modified or amended from time to time in accordancewith the terms thereof.

Proprietary Rights - Shall have the meaning set forth in Section 25.17 (ProprietaryRights) of this Agreement.

Purchased Power Adjustment Clause The Companys cost recovery mechanismapproved by the Commission in Docket No. 2009-0164, Decision and Order No. 30168 (filedFebruary 8, 2012) (or such successor provision that may be established from time to time), thatallows the Company to recover all capacity, operations and maintenance, and other non-energypayments incurred by Company pursuant to a purchased power agreement.

PURPA - Public Utility Regulatory Policies Act of 1978 (P.L. 95-617) as amendedfrom time to time and as applied in Hawaii by the Commission.


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Qualified Independent Engineering Company - Any company listed on the QualifiedIndependent Engineering Companies and Qualified Resource Consultants List, as such list isamended from time to time.

Qualified Independent Engineers and Qualified Resource Consultants List - The listof Qualified Independent Engineering Companies and Qualified Resource Consultants attachedhereto as Attachment H (Qualified Independent Assessment Companies) and created andmodified from time to time pursuant to Section 3.3(D)(2) (Qualified Independent EngineeringCompanies and Qualified Resource Consultant).

Qualified Resource Consultant- Any company listed on the Qualified IndependentEngineers and Qualified Resource Consultants List, as such list is amended from time to time.

Recipient Shall have the meaning set forth in Section 3.2(M)(2) (Confidentiality).

Reference Year Shall have the meaning set forth in Attachment I (Adjustment ofCharges).

"Revenue Metering Package": The revenue meters and revenue metering PTs and CTsand secondary wiring, to be owned, installed and maintained by the Company.

Reliability Test A test used to confirm the Facility Reliability Guarantees asrequired by this Agreement following completion of the Facility, conducted by Seller andCompany, as applicable, in accordance with Attachment K (Acceptance, Capacity, andReliability Testing Procedures).

Remote SCADA Monitoring and Control Equipment Equipment providing thecommunications interface for telemetry and control between Companys EMS and the physicalequipment at the Facility.

Reporting Milestones Each of the events identified as Reporting Milestones inAttachment B (Milestones Events).

Reserve Resource Energy The Production Well Capacity in excess of the amountrequired by the Sellers electric generating Facility to produce the Committed Capacity.

Right of First Negotiation Period Shall have the meaning set forth in Section21.1(A) (Right of First Negotiation)

RPS Amendment Any amendment to the RPS subsequent to Effective Date thatrevises the definition of renewable electric energy under the RPS such that the electric energydelivered from the Facility no longer comes within such revised definition.

RPS Law- The Hawaii law that mandates that Company and its subsidiaries generateor purchase certain amounts of their net electricity sales over time from qualified renewable


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resources. The RPS requirements in Hawaii are currently codified as HRS 269-91 through269-95.

Second Notice Shall have the meaning set forth in Section 3.3(D)(1)(c)(Implementation of Independent Assessment).

Security Agreement - The Security Agreement to be executed by Seller in the form ofAttachment Q (Security Agreement) in favor of Company in accordance with Section 3.1(E)(Company Security Documents) granting Company a security interest in, among other things,all of Sellers right, title and interest in and to the Facility, the Project Documents, all accountsestablished pursuant to the Project Documents, all insurance proceeds in respect of the Facilityand all proceeds of the foregoing, as the same may be modified or amended from time to timein accordance with the terms thereof.

Security Documents - The Security Agreement, the Mortgage, and the Consents,together with all Uniform Commercial Code financing statements and other agreements,

consents, documents and instruments executed or filed in connection therewith, as the samemay be modified or amended from time to time in accordance with the terms thereof.

Security Funds Shall have the meaning set forth in Section 7.1(E) (Form ofSecurity).

Self Start Capability means the ability to start from shutdown without any source ofoff-site electric power by using only permanently installed equipment.

Seller - Shall have the meaning set forth in the first paragraph of the first page of thisAgreement.

Sellers Control System(s) - Shall have the meaning set forth in Section 3.2(B)(2)(a)(Sellers Control System).

Sellers General Manager - The person appointed by Seller to act as the principal on-site person who is responsible for the Facility.

Sellers RPS Modifications Proposal Shall have the meaning set forth in Section2.1(F) (Renewable Portfolio Standards).

Seller-Owned Interconnection Facility The Interconnection Facilities constructedand owned by Seller.

Settlement Date Shall have the meaning set forth in Section 3.3(C)(1) (CompanyRight to Cancel, General).

Site - The parcel of real property on which the Facility will be situated , together withany Land Rights reasonably necessary for the design, construction, ownership, operation and


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maintenance of the Facility by Seller, as further described in Section 2.1(D) (Site) andAttachment F (Facility Location and Layout).

SOX 404 Shall have the meaning set forth in Section 3.2(M)(1) (FinancialCompliance).

Supervisory Control And Data Acquisition or SCADA The portion of theCompany EMS system that enables real-time monitoring and control of equipment in the field.

Technical Guidelines Attachment T (Technical Guidelines for DispatchableGeothermal Resources) and sections of the Agreement referenced therein, which provide thebasic design criteria for the engineering and design development of systems, structures, andcharacteristics of the Facility.

Term The Initial Term and the Extension Term (if any), collectively.

Transfer Date The date, prior to the Commercial Operation Date, upon which Sellertransfers to Company all right, title and interest in and to Company-Owned InterconnectionFacilities to the extent, if any, that such facilities were constructed by Seller and/or itscontractors.

U.S. EPA The United States Environmental Protection Agency.

Unit Trip[UNIT TRIP DEFINITION MAY BE REFINED BASED ON THETECHNOLOGY USED BY SELLER.] The sudden and immediate removal from service ofone of the Facilitys generators as a result of immediate mechanical/electrical/hydraulicequipment and/or control system trips or operator initiated action which causes a similarimmediate removal from service or rapid and immediate reduction in power delivery not undercontrol of Company. Removal from service with less than one (1) hour notice to Companyshall be deemed sudden and immediate for the purpose of determining a Unit Trip. Unit Tripsare also Forced Outages, Immediate (U1) under NERC GADS reporting criteria. Unit Tripsshall not include trips caused or initiated by Company other than pursuant to Section 4.1(Initiation by Company) in circumstances described in Section 4.1(F) (Facility Problems).

Unsubordinated Claims - Shall mean: (i) Liquidated Damages payments inaccordance with Article 9 (Liquidated Damages); (ii) amounts to be reimbursed by Seller toCompany for costs incurred by Company in connection with effecting a cure of defaultscommitted by Seller under the Financing Documents (if any) on behalf of Seller pursuant toSection 3.1(F)(5) (Reimbursement of Company Costs) or complying with requests of theFinancing Parties (if any) in respect of, the Financing Documents (if any); (iii) insurancepremiums and other payments in accordance with Section 6.2 (Payment); and (iv) adjustmentsin accordance with Section 6.3 (Billing Disputes).

Waiver Agreement Shall have the meaning set forth in Section 2.2(C)(2) (WaiverAgreement).


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ARTICLE 2 - SCOPE OF AGREEMENT SECTION 2.1HELCO Final Geothermal RFP28 FEB 2013 21

ARTICLE 2 - SCOPE OF AGREEMENT

2.1

General Description of the Facility

(A) Overview. Seller will design, construct, install, permit, own, operate andmaintain the Facility in compliance with the terms and conditions of this Agreement, the RPSLaw and any and all other applicable Laws. The Firm Capacity and the Net Real Power of theFacility will be sold to Company under Company Dispatch for use in the Company System inaccordance with the terms of this Agreement. Seller will carry out its obligations under thisAgreement in all respects in a manner that gives full recognition to the fact that, in order forCompany to meet its obligation under the RPS Law and to provide service to its customers, theFacility must be designed, constructed, installed, operated, permitted, and maintained by Sellerso that it will meet the RPS Law, achieve the Commercial Operation Date by the CommercialOperation Date Deadline and thereafter be available for service in accordance with the terms ofthis Agreement.

(B) Facility Specifications. The Facility shall be designed, constructed, operated and

maintained in accordance with the terms and conditions of this Agreement, all GovernmentApprovals and Land Rights, the [DATE]International Building Code as adopted by HawaiiCounty (IBC [DATE]), U.S. piping and boiler codes, Occupational Safety and HealthAdministration requirements, Good Engineering and Operating Practices, the RPS Law, and theCompanys Technical Guidelines, Attachment T (Technical Guidelines for DispatchableGeothermal Resources). The Facility Functional Description is attached to this Agreement asAttachment D (Facility Functional Description). The single-line diagrams in Attachment A(Diagram of Interconnection) shall expressly identify the Point of Interconnection of the Facilityto the Company System.

(C) Interconnection Facilities. A description of the Interconnection Facilities and the

terms and conditions related to the Interconnection Facilities shall be set forth in theInterconnection Agreement, substantially in the form of Attachment E (Form of InterconnectionAgreement) of this Agreement.

(D) Site. The Site for the Facility is located at [_________], Hawaii, and is shown inAttachment F (Facility Location and Layout).

(E)

Requirements for Electric Energy Supplied by Seller. Electric energy supplied bySeller hereunder shall meet the specifications required by this Agreement, including but notlimited to the specifications as set forth in Section 3.2(C) (Delivery of Power to Company) andSection 3.2(D) (Warranties and Guarantees of Performance). The Facility shall be designed to

operate continuously and shall be designed to remain on-line and available to meet therequirements of Section 3.2(C) (Delivery of Power to Company) during events caused by naturalforces, including but not limited to tropical storms, hurricanes, floods, earthquakes and volcaniceruptions, unless such events are of a severity as to exceed the specifications the Facility wasdesigned to under Section 2.1(B) (Facility Specifications) except during planned outages,unplanned outages and outages pursuant to Article 4 (Suspension or Reduction of Deliveries).During events caused by natural forces, it is the intention of the Parties that the Facility shall beonline and available to the greatest extent reasonably practicable within the then existing


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circumstances and conditions of operation and taking into account the Sellers determination,consistent with Good Engineering and Operating Practices, of whether the continued operationof the Facility (1) is likely to endanger the safety of persons and or property, and (2) is likely toendanger the integrity of the Facility.

(F) Renewable Portfolio Standards. If, as a result of any RPS Amendment, theelectric energy delivered from the Facility should no longer qualify as renewable electricalenergy, Seller shall, at the request of Company, develop and recommend to Company within areasonable period of time following Companys request, but in no event more than ninety (90)Days after Sellers receipt of such request (or such other period of time as Company and Sellermay agree in writing) reasonable measures to cause the electric energy delivered from theFacility to come within such revised definition of renewable electrical energy (Sellers RPSModifications Proposal). Such Sellers RPS Modifications Proposal shall be in accordance withthe provisions of Attachment S (Renewable Portfolio Standards).

(G)

Geothermal Resource and Reinjection Facilities. Seller shall provide for acontinuous reliable geothermal resource and shall have an adequate amount of well pads, wells

and reinjection facilities necessary to operate the Facility for the Term of this agreement at aminimum.

2.2 Term and Effectiveness of Certain Obligations

(A) Term. The initial term of this Agreement shall commence on the Effective Dateand shall remain in effect for [twenty (20) years]following Commercial Operation Date (theInitial Term), unless extended pursuant to Section 2.2(E) (Extension Term) or terminatedearlier as provided herein. Upon expiration of the Term, the Parties hereto shall no longer bebound by the terms and conditions of this Agreement, except as set forth in Section 25.23(Survival of Obligations).

(B) Effectiveness of Certain Obligations. Notwithstanding the foregoing, prior to theEffective Date: (i) in no event shall Seller be obligated to sell capacity or electric energy toCompany, or have any other obligations to Company other than those set forth in this Section 2.2(Term and Effectiveness of Certain Obligations), Section 2.3(A) (Company ConditionsPrecedent), Section 3.2(A)(l) (Design and Construction of Facility, General) (only as toobligations with respect to design and acquiring Land Rights), Section 3.2(A)(2) (MilestoneDates), Section 3.2(A)(4) (Sellers Government Approvals and Land Rights) and Section3.2(A)(5) (Review of Facilities), Article 13 (Indemnification), Article 15 (Insurance), Article 17(Dispute Resolution), Article 18 (Force Majeure), Article 20 (Assignment), Article 21 (Sale ofFacility by Seller), and Article 25 (Miscellaneous) and Section 2(D) (Sellers Payment

Obligations) of Appendix E (Form of Interconnection Agreement); and (ii) in no event shallCompany be obligated to make any payments provided for herein to Seller or have any otherobligations to Seller other than those set forth in this Section 2.2 (Term and Effectiveness ofCertain Obligations), Section 2.3(B) (Failure of Company Conditions Precedent), Section 3.1(E)(Company Security Documents), Section 3.2(A)(4) (Sellers Government Approvals and LandRights) and Section 3.2(A)(5) (Review of Facilities), and Article 13 (Indemnification), Article 17(Dispute Resolution), Article 18 (Force Majeure), Article 20 (Assignment), Article 21 (Sale ofFacility by Seller), and Article 25 (Miscellaneous).


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(C) Commission Approval

(1)

Commission Approval Order. Upon the execution of thisAgreement, the Parties shall use good faith efforts to obtain, as soon as practical, a satisfactoryCommission Approval Order. Company shall submit to the Commission an application for asatisfactory Commission Approval Order. A satisfactory Commission Approval Order is onethat meets the conditions of Section 25.12(A) (Commission Approval Order). If the satisfactoryCommission Approval Order is not obtained within twelve (12) Months of the CommissionSubmittal Date, or within such longer period as Company and Seller may agree to by a writtenagreement, Company or Seller may, by written notice delivered within one hundred eighty (180)Days of such date, declare this Agreement null and void. In the event the Commission ApprovalOrder is obtained within twelve (12) Months of the Commission Submittal Date but suchCommission Approval Order is appealed, and a Non-appealable Commission Approval Order isnot obtained within eighteen (18) Months of the Commission Submittal Date, or within suchlonger period as Company and Seller may agree to by a subsequent written agreement, Companyor Seller may, by written notice delivered within one hundred eighty (180) Days of such date,declare this Agreement null and void. If the Agreement is declared null and void as providedherein, the Parties hereto shall thereafter be free of all obligations hereunder, except as set forthin Section 2.2(D) (Obligations of the Parties Upon Declaration of the Agreement As Null andVoid) and shall pursue no further remedies against one another.

(2) Waiver Agreement. If the Commission Approval Orderis appealed, the Parties shall meet within six (6) Months of the filing date of the correspondingnotice of appeal and decide whether to waive the requirement of obtaining a satisfactory Non-appealable Commission Approval Order. Neither Party shall be required to agree to such awaiver. If the Parties agree in writing to such a waiver (Waiver Agreement), Seller agrees thatit shall proceed with its performance solely at its own risk. Furthermore, if the Parties execute aWaiver Agreement, the provisions of the Agreement that would otherwise become effective

upon obtaining a satisfactory Non-appealable Commission Approval Order shall becomeeffective as of the date of the Waiver Agreement (Waiver Agreement Date).

(3) Company Performance Contingent. Notwithstanding anyother provisions of this Agreement that might be construed to the contrary, Companys purchaseof electric energy under this Agreement and Companys payment of the Capacity Charge, andany and all terms and conditions of this Agreement that are ancillary to such purchase andpayment, are all contingent upon obtaining the Commission Approval Order and the occurrenceof the Capacity Rate Inclusion Date as set forth by the terms of this Agreement.

(4) Termination Rights. Notwithstanding any of the

foregoing, Company or Seller may terminate the Agreement at any time upon the occurrence ofany condition described in Section 8.1 (Events of Default).

(D) Obligations of Parties Upon Declaration of the Agreement as Null and Void. Ifpursuant to Section 2.2(C) (Commission Approval), a Party exercises it right to declare thisAgreement null and void, this Agreement shall be deemed null and void and the Parties heretoshall be free of all obligations hereunder, other than as provided in Section 25.23 (Survival ofObligations), to the extent such obligations are applicable at the time the Party exercises its right


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to declare this Agreement null and void. Notwithstanding the foregoing, if Seller had requestedCompany to incur costs associated with Company-Owned Interconnection Facilities prior toreceipt of a satisfactory Commission Approval Order, or, if there is an appeal, a Non-appealableCommission Approval Order, Seller shall pay Company the actual costs and cost obligationsincurred by Company as of the date the Agreement is declared null and void for Company-

Owned Interconnection Facilities and any reasonable costs incurred thereafter, provided, furtherthat nothing in this Agreement shall obligate Company to incur such costs and cost obligationsunless and until Seller provides Company with adequate security, as determined by Company inits sole discretion, to secure Sellers obligation to pay Company for such costs and costobligations as set forth herein.

(E) Extension Term. If the Initial Term expires with the Parties hereto activelynegotiating for the extension of this Agreement, a new power purchase arrangement, or thepurchase of the Facility, then such Initial Term shall be automatically extended on a month-to-month basis under the same terms and conditions as contained in this Agreement for so long assaid negotiations continue (the Extension Term). The Extension Term shall terminate sixty(60) Days after either Party notifies the other in writing that said negotiations have terminated.

(F) Termination Rights. Notwithstanding any of the foregoing, Company or Sellermay terminate the Agreement at any time upon the occurrence of any condition described inArticle 8 (Default).


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2.3 Conditions Precedent

(A)

Company Conditions Precedent. Companys obligation to purchase electricenergy and/or capacity from Seller pursuant to this Agreement, and any and all obligations ofCompany which are ancillary to that purchase, including, without limitation, Companysobligations under Article 4 (Suspension or Reduction of Deliveries), Article 5 (Rates forPurchase) and Article 6 (Billing and Payment) and Section 3.1 (Rights and Obligations of BothParties), Section 3.2(E) (Metering, Generator Remote Control, DataAcquisition/Communications), and Section 3.3(A) (Dispatch of Facility Power), are contingentupon the following Conditions Precedent:

(1)

Following the Execution Date. Within sixty (60) Daysafter the Commission Submittal Date, Seller shall submit to Company the available designmaterials listed in Attachment M (Preliminary Design Information), as applicable, and otherevidence reasonably demonstrating to Company's satisfaction that the Facility, if constructed,operated and maintained pursuant to such design materials and in accordance with GoodEngineering and Operating Practices, can be reasonably expected to have a useful life at least

equal to the Initial Term.

(2) On or before the Closing Date. On or before theClosing Date, Seller shall submit to Company the following:

(a) Executed Project Documents. Copies of the executed ProjectDocuments including all contracts entered into by Seller for the purchase of critical materialsand services necessary for the operation and maintenance of the Facility;

(b)

Government Approvals and Land RightsConstruction.Documents or other evidence that Seller obtained all required Government Approvals and Land

Rights needed to commence construction of each phase of the Facility;

(c) Government Approvals and Land RightsOperations.Documents or other evidence that Seller has obtained all currently required GovernmentApprovals and Land Rights needed to operate the Facility following completion of the Facility;

(d) Proof of Insurance. Copies of any and all then-required insurancepolicies (or binders as appropriate) procured by Seller in accordance with Article 15 (Insurance)relating to the construction and operations of the Facility, as the case may be;

(e) Officers Certificate. A certificate executed by a duly authorizedofficer of Seller certifying that: (i) Seller has the right to locate the Facility at the Site for theTerm and that such right may be transferred or assigned to Company so as not to limit orinterfere with Company's exercise of its rights under this Agreement; and (ii) Seller hasobtained all then-required Government Approvals and Land Rights needed to commenceconstruction of the Facility; and

(f) Financing Documents and Security Documents. FinancingDocuments as provided in Section 3.1(F) (Financing Documents) and Security Documents asprovided in Section 3.1(E) (Company Security Documents).


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(3) On or Before Commercial Operation Date. On or beforethe Commercial Operation Date, which in no event shall be later than the CommercialOperation Date Deadline, Seller shall:

(a) Proof of Insurance. Submit to Company copies of any and allthen-required insurance policies (or binders as appropriate) provided by Seller requiredpursuant to Article 15 (Insurance) to be in effect prior to operation of the Facility;

(b) Officers Certificate. Submit to Company a certificate executedby a duly authorized officer of Seller certifying that: (i) Seller has obtained all then-requiredGovernment Approvals and Land Rights needed to operate the Facility throughout the Term or,if one or more such Government Approvals or Land Rights is not available at that time for thefull Term, for such lesser period as is available; and (ii) construction of the Facility issubstantially complete, that the Facility has been constructed in compliance with the terms ofthis Agreement and with the information submitted pursuant to this Section 2.3(A) (CompanyConditions Precedent), that all acceptance tests set forth in Section 2.3(A)(3)(c) (Acceptance,Capacity, and Reliability Tests) have been satisfactorily accomplished and the Facility is ready

to begin producing power on a commercial basis under the terms and conditions of thisAgreement. Evidence required under Section 2.3(A) (Company Conditions Precedent ) shall besubmitted or made available by Seller during or upon the completion of each phase of design,construction, operation and maintenance of the Facility (for example, completion of detailedengineering, completion of as-built drawings and receipt of manufacturers guaranteeperformance data). To allow Company to evaluate the information provided by Seller, Sellershall cooperate in such physical inspections of the Facility pursuant to Section 10.4 (Inspectionof Facility Operation) of this Agreement as may be reasonably required by Company duringand after completion of the Facility. In no event shall Companys technical review andinspection of the Facility be deemed to be an endorsement of the design, construction, operationor maintenance thereof or as any warranty or guaranty of the safety, durability or reliability of

the Facility nor a waiver of any of Companys rights;

(c) Acceptance, Capacity, and Reliability Tests . Cause the Facilityto pass the Acceptance, Capacity, and Reliability Testing Procedures as defined in AttachmentK (Acceptance, Capacity, and Reliability Testing Procedures); and,

(d) Geothermal Resource Report. Submit to Company a certificateexecuted by a Qualified Resource Consultant confirming that the Seller has Reserve ResourceEnergy sufficient for either (a) 20 percent in excess of the requirements for the CommittedCapacity, or (b) equal to the largest single production well, whichever is greater.

(4)

On or Before Commencement of Capacity ChargePayments. On or before the commencement of Capacity Charge payments by Company, asprovided in Section 5.1(G)(i) (Commencement of Capacity Charge Payments), the Facility shallpass the Capacity Test provided in Section 3.2(C)(13) (Acceptance, Capacity, and ReliabilityTests) and in Attachment K (Acceptance, Capacity, and Reliability Testing Procedures).


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(B) Failure of Company Conditions Precedent

(1)

Sellers Remedial Action Plan. If Seller misses any ofthe submission deadlines required by the Conditions Precedent in Section 2.3(A) (CompanyConditions Precedent), Seller shall, within ten (10) Business Days of such missed submissiondeadline, provide Company a remedial action plan which shall set forth a detailed description ofSellers course of action and plan to provide Company with the required submission and tomeet all subsequent submission deadlines and the Commercial Operation Date Deadline,provided that delivery of any remedial action plan shall not relieve Seller of its obligation tomeet any subsequent submission deadlines and the Commercial Operation Date Deadline.

(2)

Sellers Certification Requirements. Not later thanninety (90) Days after the Commission Submittal Date, Seller shall submit to Company acertificate executed by a duly authorized officer of Seller declaring whether Seller has compliedwith the submission requirements of Section 2.3(A)(l) (Company Conditions Precedent,Following the Execution Date), identifying with particularity the submissions on which suchdeclaration relies, and certifying that such submissions are true and correct in all material

respects and in no way materially misleading. On or before the Closing Date, Seller shallsubmit to Company a certificate executed by a duly authorized officer of Seller declaringwhether Seller considers that it has complied with the submission requirements of Section2.3(A)(2) (Company Conditions Precedent, On or Before the Closing Date), identifying withparticularity the submissions on which such declaration relies, and certifying that suchsubmissions are true and correct in all material respects and in no way materially misleading.Within thirty (30) Days of receiving each of Sellers certificates pursuant to this Section2.3(B)(2) (Sellers Certification Requirements) Company shall provide Seller with either awritten statement that Seller has satisfied the submission requirements of Section 2.3(A)(1)(Company Conditions Precedent Following the Execution Date) and Section 2.3(A)(2)(Company Conditions Precedent On or Before the Closing Date) identified in such certificate,

or a written statement setting forth the requirements Company believes have not been met bySeller. Seller shall comply substantially with the requirements set forth in Companys statementwithin thirty (30) Days of receiving Companys statement. Unless and until Seller substantiallycomplies with Companys requirements for satisfying the Conditions Precedent in Section2.3(A) (Company Conditions Precedent) to the reasonable satisfaction of Company, Seller shallnot be deemed to have achieved the Commercial Operation Date.

(3) Event of Default. Company may declare an Event ofDefault pursuant to Section 8.1(A)(22) if Seller knew or should have known that any of itssubmissions or certifications to Company under Section 2.3 (Conditions Precedent) wereincomplete, inaccurate, false or misleading in any material respect.


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2.4 Failure to Meet Milestone Dates and Commercial Operation Date Deadline

(A)

Failure to Meet Milestone Dates

(1) Guaranteed Milestones Other Than CommercialOperation Deadline

(a) Sellers Plan and Monthly Progress Reports. If Seller fails toachieve any Guaranteed Milestone other than the Commercial Operation Date Deadline on orbefore the applicable Milestone Date as set forth in Attachment B (Milestone Events) as thesame may be extended for reasons of Force Majeure or as otherwise provided in this Agreement,then Seller shall within ten (10) Business Days thereafter submit for Companys review andapproval, which approval shall not be unreasonably withheld, a detailed plan which describes:(i) the reasons why such Guaranteed Milestone was not achieved; (ii) Seller's proposedmeasures for achieving such Guaranteed Milestone as soon as practicable thereafter; and (iii)Seller's proposed measures for meeting the Commercial Operation Date Deadline. Until suchGuaranteed Milestone is met, Seller shall provide Company with monthly progress reports as to

the status of Seller's efforts to achieve such Guaranteed Milestone.

(b) Milestone Delay Damages. If Seller thereafter fails to achieveany such Guaranteed Milestone on or before the applicable Milestone Date set forth inAttachment B (Milestone Events) as the same may be extended for reasons of Force Majeure oras otherwise provided in this Agreement, Company shall collect and Seller shall pay LiquidatedDamages in the amount of [$____]/MW for each day (Milestone Delay Damages) that Sellerfails to achieve the Guaranteed Milestone; provided, that the number of Days for whichCompany shall collect and Seller shall pay Milestone Delay Damages shall not exceed ninety(90) Days (the Milestone Date Delay LD Period).

(c) Termination and Pre-COD Termination Damages. If, upon theexpiration of the Milestone Date Delay LD Period, Seller has not achieved such missedMilestone Date, Company shall have the right, notwithstanding any other provision of thisAgreement to the contrary, to terminate this Agreement with immediate effect by declaring anEvent of Default pursuant to Section 8.1(A)(3) and issuing a written termination notice to Sellerpursuant to Section 8.2(B) (Right to Terminate). If the Agreement is terminated by Companypursuant to this Section 2.4(A)(1)(c) (Termination and Pre-COD Termination Damages),Company shall have the right to collect Pre-COD Termination Damages, as provided in Section9.3(A) (Pre-COD Termination Damages) of this Agreement. Unless and until Sellersubstantially completes each Guaranteed Milestone to the reasonable satisfaction of Company,Seller shall not be deemed to have achieved the Commercial Operation Date.

(2)

Reporting Milestones. If Seller fails to achieve anyReporting Milestones on or before the applicable Milestone Date as set forth in Attachment B(Milestone Events), as the same may be extended for reasons of Force Majeure or as otherwiseprovided in this Agreement, then Seller shall within ten (10) Business Days thereafter submitfor Companys review and approval, which approval shall not be unreasonably withheld, adetailed plan which describes: (i) the reasons why such Reporting Milestone was not achieved;(ii) Seller's proposed measures for achieving such Reporting Milestone as soon as practicable


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thereafter; and (iii) Seller's proposed measures for meeting the Commercial Operation DateDeadline. Until such Reporting Milestone is met, Seller shall provide Company with monthlyprogress reports as to the status of Seller's efforts to achieve such Reporting Milestone. Unlessand until Seller substantially completes each Reporting Milestone to the reasonable satisfactionof Company, Seller shall not be deemed to have achieved the Commercial Operation Date.

(B)

Failure to Meet Commercial Operation Date Deadline

(1) Commercial Operation Date Deadline and GracePeriods. Time is of the essence for this Agreement, and Seller shall achieve the CommercialOperation Date no later than the Commercial Operation Date Deadline. If Seller fails toachieve the Commercial Operation Date by the Commercial Operation Date Deadline, Sellershall have the following grace periods within which to achieve the Commercial Operation Datewithout incurring liability for Daily Delay Damages pursuant to Section 2.4(B)(3) (Daily DelayDamages and Termination Right):

(a) Force Majeure. If the failure to achieve the Commercial

Operation Date by the Commercial Operation Date Deadline is the result of Force Majeure, andif and so long as the conditions set forth in Section 18.4(A) (No Liability) are satisfied, Sellershall be entitled to a grace period following the Commercial Operation Date Deadline equal tothe lesser of three hundred sixty (360) Days or the duration of the Force Majeure.

(b) Companys Untimely Performance. If the failure to achieve theCommercial Operation Date by the Commercial Operation Date Deadline is the result of anyfailure by Company in the timely performance of its obligations under this Agreement, Sellershall be entitled to a grace period following the Commercial Operation Date Deadline equal tothe duration of the period of delay directly caused by such failure in Companys timelyperformance. Such grace period shall be Seller's sole remedy for any such failure by Company.

For purposes of this Section 2.4(B)(1)(b) (Companys Untimely Performance), Companysperformance will be deemed to be "timely" if it is accomplished within the time periodspecified in this Agreement with respect to such performance or, if no time period is specified,within a reasonable period of time. If the performance in question is Companys review ofplans, the determination of what is a "reasonable p

Helco Finalgeorfp Appc(Geoppa) 28feb2013

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