Exhibit 10.2

 

WHOLESALE POWER CONTRACT FOR THE WESTERN INTERCONNECTION

BY AND BETWEEN

BASIN ELECTRIC POWER COOPERATIVE

AND

TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC.

TS‑15‑0158

 

 

THIS AGREEMENT, made as of this 27th day of September, 2017, which will become
effective on October 1, 2017 (“Effective Date”), between Basin Electric Power
Cooperative (“Seller”), a cooperative corporation organized and existing under
the laws of the State of North Dakota, whose principal place of business is
located at 1717 East Interstate Avenue, Bismarck, North Dakota 58503, and
Tri-State Generation and Transmission Association, Inc., (“Tri-State”), a
cooperative corporation organized and existing under the laws of the State of
Colorado, whose principal place of business is located at 1100 West 116th
Avenue, Westminster, Colorado 80234, (Seller and Tri-State may be individually
referred to herein as a “Party” or collectively as the “Parties”).

W I T N E S S E T H:

 

WHEREAS, Seller and Tri-State have heretofore entered into an Amended and
Substituted Wholesale Power Contract dated January 16, 1975, TS‑75‑0008, as
amended (hereinafter collectively called the “Former WPC”);

 

WHEREAS, the Parties hereto desire to amend and restate said Former WPC on the
terms and conditions set forth herein, and to simplify and clarify the
Former WPC including separating the Former WPC into two separate wholesale power
agreements: this Agreement for the Western Interconnection and one for the
Eastern Interconnection (the “Eastern Interconnection Wholesale Power
Contract”); and

 

WHEREAS, Tri-State acknowledges that Seller and potential lenders are relying on
this Agreement with Tri-State, and similar agreements with other members of the
Seller to purchase electric power and energy for their present and future load
requirements as security for the financing of Seller’s facilities.

 

NOW THEREFORE, in consideration of the mutual undertakings herein contained, the
Parties hereto agree as follows:

 

1. Amount of Sale and Delivery Points. Seller shall sell and deliver to
Tri-State and Tri-State shall purchase and receive from Seller the daily and
hourly fixed scheduled quantities of electric power and energy at the Contract
Rate of Delivery (“CROD”) for the given months of the year at the Points of
Delivery in the Western Interconnection as set forth in Exhibits A and B
attached herein and made part of this Agreement.

 

1

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A.

The Parties may mutually agree to change the Points of Delivery for either
Exhibit A or Exhibit B deliveries. With respect to Exhibit B deliveries, the sum
of Seller’s deliveries to the Ault 230 kV and Story 230 kV busses for a given
hour shall be equal to the amount shown in Exhibit B for that hour.

 

2. Electric Characteristics.  

 

A.

Firm electric power and energy to be furnished hereunder shall be alternating
current, three-phase, sixty (60) cycle.

 

B.

Contingency reserves, including operating, spinning and frequency responsive,
shall be included with this purchase of electric power and energy.

 

C.

Scheduling practices shall comply with the policies of the applicable regional
reliability organization(s), balancing area authority, and transmission
provider’s open access transmission tariff(s), having such jurisdiction.

 

3. Transmission Service. 

 

A.

Seller shall bear the sole responsibility to obtain and pay all costs of
transmission of electric power and energy from Seller’s generation and purchased
power resources to the Points of Delivery specified in Exhibit A and Exhibit B.
This shall include, but not be limited to, losses and ancillary service charges.

 

B.

Tri-State shall have the sole responsibility to obtain and pay all costs of
transmission service beyond the Points of Delivery.

 

4. Rate.

 

A.

Tri-State shall pay Seller for all electric power and energy furnished hereunder
at the Seller’s Class A Member rate for members with Fixed Contract Rate of
Delivery as set forth in Rate Schedule A, as the same may be modified from time
to time by Seller’s Board of Directors, and on the same terms and conditions set
forth in this Agreement. 

 

B.

As stated in Seller’s Board Policy 10 (R04.08-15-17) adopted at the August 2017
Board meeting, “Rate Development Policy for Different Wholesale Power Contract
Terms”, Seller’s Class A Member rate components shall be developed under this
Agreement based on recovering depreciation expense on those Applicable
Generation Assets over the term of the 2050 Contracts as such terms are defined
pursuant to Board Policy 10 (R04.08-15-17).  In addition, should Tri-State and
Seller wish to extend the term of this Agreement, depreciation expense

2

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for purposes of setting the Tri-State rate will be calculated as set forth in
Board Policy 10 (R04.08-15-17).  Any changes to said Board Policy 10
(R04.08-15-17) affecting the Class A Member rate paid by Tri-State pursuant to
this Agreement shall not apply to the rates charged under this Agreement unless
expressly agreed to in writing by Tri-State.

 

C.

Seller’s Board of Directors, at such intervals as it shall deem appropriate but
in any event not less frequently than once in each calendar year, shall review
the rate for electric power and energy furnished hereunder and under similar
contracts with Seller’s other members and, if necessary, shall revise such rate
so that it shall produce revenues which shall be sufficient, but only
sufficient, with the revenues of Seller from all other sources, to meet the cost
of the operation and maintenance (including, without limitation, replacement,
insurance, taxes and administrative and general overhead expenses) of the
generating plants, the transmission system and related facilities of Seller, the
cost of any power and energy purchased for resale hereunder by Seller, the cost
of transmission service, the cost of lease payments, interest expense and
depreciation expense or principal repayments of Seller, and to provide for the
establishment and maintenance of reasonable reserves. Seller shall cause a
notice in writing to be given to Tri-State and other members of Seller which
shall set out the proposed revisions of rate with the effective date thereof,
which shall not be less than thirty (30) days after the date of the notice, and
shall set forth the basis upon which the rate is proposed to be adjusted and
established. Subject to Section 4(B), Tri-State agrees that the rate from time
to time established by Seller’s Board of Directors shall be deemed to be
substituted for the rate herein provided and agrees to pay for electric power
and energy furnished by Seller to it hereunder after the effective date of any
such revision at such revised rates.

 

5. Bill Calculation and Payment of Bills.

 

A.

Notwithstanding anything to the contrary within the Seller’s Rate Schedule A,
the monthly demand charge shall be the demand rate multiplied by the billing
demand.  The billing demand shall be the maximum hourly delivery shown in each
Exhibit A and Exhibit B individually for the given month.  The monthly energy
charge will be similarly determined by the energy amounts in each Exhibit A and
Exhibit B individually summated for the days in the given month as delivered and
received, multiplied by the energy rate; and any damages pursuant to
Section 7(C) or (D).  Billed demand and energy shall be based on Mountain
Standard Time.

 

B.

Bills for the electric power and energy furnished hereunder shall be rendered to
Tri-State pursuant to the Operating Procedures authorized in
Section 10.  Tri-State shall pay for electric power and energy furnished
hereunder by immediately available funds, to the Seller’s account, as directed,
monthly within fifteen (15) days after the bill is delivered to Tri-State at the
address specified by Tri-State in the Operating Procedures.  Payments not
received by the Seller from Tri-State within twenty (20) calendar days following
the delivery of the bill to Tri-State will be

3

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assessed an interest charge in accordance with the terms of the Seller’s policy
on late payment of power bills as described within Seller’s Class A Member Rate
Schedule A.  If there is a dispute between Seller and Tri-State over the amount
due under any power bill, Tri-State shall nevertheless pay the full amount
billed by Seller and then proceed to resolve the dispute in any manner available
to it under this Agreement or law.  In the event the Seller shall be found to
have charged in excess of that properly chargeable hereunder, the Seller shall
refund such amount, together with interest, at a rate equal to the interest rate
charged by Seller on late payment of power bills.  If Tri-State shall fail to
pay any such bill within fifteen (15) days after the bill is delivered, the
Seller may discontinue delivery of electric power and energy hereunder upon
fifteen (15) days written notice to Tri-State of its intention to do so. 

 

6. Patronage. Patronage from Seller shall be based upon all revenue received
from Tri-State pursuant to this Agreement and the Eastern Interconnection
Wholesale Power Contract.

 

7. Continuity of Service.  

 

A.

Seller shall use reasonable diligence to provide a constant and uninterrupted
supply of electric power and energy hereunder. Subject to the foregoing, if the
supply of electric power and energy shall fail or be interrupted, or become
defective through an act of God or of the public enemy, or caused by accident,
catastrophic failure in the transmission system, labor troubles, or any other
cause beyond the control of the Seller, the Seller shall not be liable therefore
or for damages caused thereby. 

 

B.

Tri-State shall use reasonable diligence to provide constant and uninterrupted
receipt of the supply of electric power and energy hereunder. Subject to the
foregoing, if the receipt of electric power and energy shall fail or be
interrupted, or become defective through an act of God or of the public enemy,
or caused by accident, catastrophic failure in the transmission system, labor
troubles, or any other cause beyond the control of Tri-State, Tri-State shall
not be liable therefore or for damages caused thereby.

 

C.

Liquidated damages for Curtailments by Seller.  If Seller curtails energy
deliveries to Tri-State, and such curtailment is not excused for reasons stated
in Section 7(A), Seller shall be liable to Tri-State for the difference between
(if positive) (replacement energy price – contract energy price) (a) the price
at which Tri-State, acting in a commercially reasonable manner, effects a
purchase of substitute energy, or absent such purchase, the market price for
such quantity of energy, as determined by Tri-State in a commercially reasonable
manner, at the applicable Point(s) of Delivery and (b) the price of energy set
forth in Seller’s Class A Member Rate Schedule A for members with Fixed Contract
Rate of Delivery, multiplied by the quantity of energy curtailed.

 

4

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D.

Liquidated damages for Curtailments by Tri-State.  If Tri-State curtails the
receipt of energy deliveries from Seller, and such curtailment is not excused
for reasons stated in Section 7(B), Tri-State shall be liable to Seller for the
difference between (if positive) (contract energy price – resale energy price)
(a) the price of energy set forth in Seller’s Class A Member Rate Schedule A for
members with Fixed Contract Rate of Delivery and (b) the price at which Seller,
acting in a commercially reasonable manner, effects a resale of the energy not
received by Tri-State or, absent such resale, the market price of such energy,
as determined by Seller in a commercially reasonable manner at the applicable
Point(s) of Delivery, multiplied by the quantity of energy curtailed.

 

8. Transfer by Tri-State. Tri-State shall not without the approval in writing of
Seller, which approval shall not be unreasonably withheld, delayed, or
conditioned, take or suffer to be taken any steps for reorganization or to
consolidate with or merge into any organization. Notwithstanding the foregoing,
Tri-State may take or suffer to be taken any steps for reorganization or to
consolidate with or merge into any corporation, so long as Tri-State shall pay
such pro rata portion of the outstanding indebtedness, as well as other
obligations and commitments of Seller at the time existing, as shall be
determined by Seller and shall otherwise comply with such reasonable terms and
conditions as Seller shall require.  Notwithstanding the foregoing, no such
approval shall be required to take the actions contemplated herein so long as
the purchaser or surviving organization is a member of Seller and has validly
authorized, executed and delivered a contract for electric service substantially
in the form of this Agreement.

 

9. Specific Performance. Seller and Tri-State agree that the failure or
threatened failure of Tri-State to comply with the terms of Section 8 will cause
irreparable injury to Seller which cannot properly or adequately be compensated
by the mere payment of damages. Tri-State agrees, therefore, that in the event
of a breach or threatened breach by Tri-State of Section 8, that Seller, in
addition to any other remedies that may be available to it judicially, shall
have the right to obtain from any competent court a decree enjoining such breach
or threatened breach of Section 8 and providing for the terms of said Section to
be specifically enforced.

10. Operating Representatives. The Parties hereby establish an operating
committee consisting of one representative from each Party authorized to act on
its behalf (“Operating Representative”) to secure effective coordination and to
deal on a prompt and orderly basis with the various operating and technical
issues which arise in conjunction with the obligations of the Parties hereunder,
including the development of operating procedures or practices.

 

The establishment of any procedure or practice and any other action or
determination by the Operating Representatives shall be effective when signed by
the Operating Representative of each of the Parties. The Operating
Representatives of the Parties shall have no authority to modify any provision
of this Agreement.

 

The Operating Representatives of the Parties are as follows:

 

5

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Seller:Ms. Becky Kern, Director of Utility Planning

1717 E. Interstate Avenue

Bismarck, ND  58503

 

Office:

Email:

 

Tri-State:Attn:  Dan Walter, Senior Manager Energy Markets

1100 W. 116th Avenue

Westminster, CO 80234

 

Office:

Email: 

 

The designation of the Operating Representative or their address may be changed
at any time by providing such notice to the other Party.

 

11. Assignments. Except as provided below, neither Party shall assign any of its
rights, title or interest or delegate any of its performance under this
Agreement, without the prior written consent of the other Party, which consent
shall not be unreasonably withheld or delayed.  Either Party shall have the
right at any time and from time to time to mortgage, create or provide for a
security interest in or convey in trust their respective rights, titles and
interests in this Agreement to a lender, mortgagee or trustee under a deed of
trust, mortgage or indenture, or to secured parties under a security agreement,
as security for its present or future notes, bonds or other obligations or
securities, and to any successors or assigns thereof without need for the prior
consent of the other Party, and without such lender, mortgagee, trustee or
secured party assuming or becoming in any respect obligated to perform any of
the obligations of the Party.  Any lender, mortgagee, trustee or secured party
under a present or future deed of trust, mortgage, indenture or security
agreement of either Party and any successor thereof by action of law or
otherwise, and any purchaser, transferee or assignee of any thereof may, without
need for the prior consent of the other Party, succeed to and acquire all the
rights, titles and interests of such Party in this Agreement, and may foreclose
upon said rights, titles and interests of such Party.  Any purported assignment
in violation of this section is void. Subject to the foregoing, this Agreement
is binding upon and inures to the benefit of the Parties and their permitted
successors and assigns.

 

12. Term. This Agreement is effective and deliveries under this Agreement will
begin on the Effective Date. This Agreement shall remain in effect until
December 31, 2050. If either Party desires to terminate this Agreement on
December 31, 2050, it shall provide written notice of intent to terminate by
January 1, 2045. If notice of termination is not received by either Party prior
to January 1, 2045, this Agreement shall remain in effect unless terminated by
either Party giving to the other Party not less than five (5) years prior
written notice of its intention to terminate.  As of the Effective Date, the
Former WPC shall be amended and restated in its entirety by this Agreement and
the Eastern Interconnection Wholesale Power Contract.

 

6

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13. Notice. Any notice, consent or other communication required to be made in
writing under this Agreement including among other things billings and invoices
shall be sent by (i) personal delivery; (ii) certified mail (postage prepaid,
return receipt requested); (iii) nationally recognized overnight courier service
(charges prepaid and with signature required upon receipt), or (iv) electronic
mail, in each case properly addressed to the persons specified below.  Notices,
consents and other communications sent in accordance with this Section are
deemed delivered on the sent date of the electronic mail, the date of actual
delivery or date of delivery refusal.  Any Party may from time to time change
its contact information by sending a notice in accordance with this
Section.  Notices shall be addressed as follows:

 

To Seller:

 

Basin Electric Power Cooperative

Attention: CEO & General Manager

1717 E. Interstate Avenue

Bismarck, ND  58503

 

With a copy to Seller at the same address above:

Attn: Senior Vice President and General Counsel

 

Billings and Invoices: Refer to Operating Procedures.

 

To Tri-State:

 

Attn: Chief Executive Officer

Tri-State Generation and Transmission Association, Inc.

1100 W. 116th Ave.

Westminster, CO 80234

 

With a copy to Tri-State at the same address above:

Attn: Senior Vice President and General Counsel

 

Billings and Invoices:  Refer to Operating Procedures.

 

14. Variations in Writing. All additions, amendments or variations to this
Agreement shall be binding only if in writing and signed by duly authorized
representatives of both Parties. 

 

15. Governing Law. The rights and obligations of the Parties under or pursuant
to this Agreement shall be governed by and construed according to the laws of
the state of Colorado without respect to that state’s conflict of law
principles.

 

16. Entire Agreement. This Agreement constitutes the entire agreement between
Seller and Tri-State regarding matters addressed herein and supersedes all prior
written and oral communications and understandings in connection therewith.  The
Parties acknowledge that certain sales by Seller to Tri-State on the Eastern
Interconnection shall be governed by the Eastern Interconnection Wholesale Power
Contract.

 

7

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17. Waiver. The delay or failure of either Party to enforce or insist upon
compliance with or strict performance of any of the terms or conditions of this
Agreement, or to exercise or take advantage of any of its rights, including any
right to terminate this Agreement, shall not constitute a waiver or
relinquishment of any such terms, conditions or rights, but the same shall be
and remain at all times in full force and effect.

 

18. Audit. During the term of this Agreement and for a period of three (3) years
after expiration of this Agreement, each Party shall have the right, at its sole
expense, with reasonable advance written notice and during normal working hours,
to examine the records of the other Party to the extent reasonably necessary to
verify the accuracy of any billing or invoice statement, charge or computation
made pursuant to this Agreement.

 

19. Severability. In the event any of the terms, covenants or conditions of this
Agreement, its Exhibit(s) or the application of any such terms, covenants or
conditions shall be held invalid, illegal or unenforceable by any court or
administrative body having jurisdiction, all other terms, covenants and
conditions of this Agreement and their application not adversely affected
thereby shall remain in force and effect; provided, however, that Seller and
Tri-State shall negotiate in good faith to attempt to implement an equitable
adjustment in the provisions of this Agreement with a view toward effecting the
purposes of this Agreement by replacing the provision that is held invalid,
illegal or unenforceable with a valid provision the economic effect of which
comes as close as possible to that of the provision that has been found to be
invalid, illegal or unenforceable.

 

20. Counterparts.  This Agreement may be executed in any number of counterparts,
and each executed counterpart shall have the same force and effect as an
original instrument. 

 

21. Captions. The captions used in this Agreement are for ease of reference only
and do not constitute a part of this Agreement.

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized officers or representatives as of the dates indicated
below.

8

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ATTEST

 

By:  /s/ Mark D. Foss

 

Name:  Mark D. Foss

 

Title:  Assistant Secretary

 

Date: September 11, 2017

 

BASIN ELECTRIC POWER COOPERATIVE

 

 

 

By:  /s/ Paul M. Sukut

 

Name:  Paul M. Sukut

 

Title:  CEO & General Manager

 

Date: September 11, 2017

 

 

 

 

ATTEST

 

By:  /s/ Kenneth V. Reif

 

Name:    Kenneth V. Reif

 

Title:  SVP/General Counsel

 

Date: September 27, 2017

TRI-STATE GENERATION AND TRANSMISSION

ASSOCIATION, INC.

 

 

By:  /s/ Michael S. McInnes

 

Name:   Micheal S. McInnes

 

Title: Chief Executive Officer

 

Date: September 27, 2017

 

9

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WHOLESALE POWER CONTRACT FOR THE WESTERN INTERCONNECTION

EXHIBIT A

contract rate of delivery to stegall west

 

Point of Delivery: Stegall West 230kV bus

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Month
\HE

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

 

JAN

73

71

72

71

74

75

84

92

91

88

86

85

82

81

79

80

86

94

97

95

94

90

85

75

2,000

FEB

73

72

72

72

74

81

85

91

90

89

88

86

83

82

81

81

85

89

97

96

94

91

85

74

2,011

MAR

69

67

68

68

72

76

83

82

82

81

80

77

75

75

74

74

75

79

84

84

84

80

74

69

1,832

APR

48

46

46

46

47

51

56

57

58

58

58

55

55

54

54

54

55

56

58

59

60

58

53

49

1,291

MAY

54

52

51

51

52

55

61

63

65

65

65

65

65

65

65

65

67

67

67

68

68

67

63

58

1,484

JUN

80

75

73

72

73

76

81

93

98

100

102

105

105

106

106

107

107

108

107

108

107

107

100

88

2,284

JUL

89

85

84

83

83

84

88

99

104

108

112

114

115

117

118

119

119

119

118

118

115

115

107

94

2,507

AUG

88

85

84

83

83

85

90

99

104

107

110

112

113

114

115

117

117

117

117

117

117

113

104

92

2,483

SEP

54

53

52

51

52

55

61

70

71

73

73

74

74

74

76

76

76

78

79

81

81

76

69

56

1,635

OCT

55

52

51

51

52

55

60

69

71

72

72

70

68

68

69

70

72

73

73

73

73

70

67

55

1,561

NOV

67

67

67

67

70

74

78

81

81

82

80

77

76

75

74

76

80

85

86

85

84

80

75

70

1,837

DEC

72

72

72

72

73

76

84

90

90

89

87

85

83

81

80

87

93

99

100

99

97

94

87

76

2,038

Amounts shown in MW, hours shown are Hour-Ending and in Mountain Standard Time

 

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WHOLESALE POWER CONTRACT FOR THE WESTERN INTERCONNECTION

EXHIBIT B

contract rate of delivery to AULT/STORY

 

Point of Delivery: AULT 230KV and STORY 230KV BUSSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Month
\HE

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

 

JAN

92

90

90

90

93

95

105

115

114

111

109

107

103

102

99

100

108

118

122

119

118

114

106

95

2,515

FEB

91

90

90

90

93

102

107

114

114

112

110

108

104

103

102

102

106

112

122

121

119

114

107

93

2,526

MAR

86

85

85

86

90

96

104

104

104

102

100

96

94

94

94

94

94

100

105

106

105

100

93

87

2,304

APR

60

58

57

57

59

64

70

72

72

72

72

70

69

68

67

67

69

71

72

73

75

73

66

61

1,614

MAY

67

65

64

64

65

70

76

80

81

82

82

82

82

82

82

82

85

85

85

85

85

84

80

72

1,867

JUN

100

95

92

92

92

96

102

118

123

126

130

131

132

133

133

135

136

136

136

136

136

134

126

110

2,880

JUL

111

107

106

104

104

106

110

123

130

135

140

143

145

146

148

149

149

149

148

148

145

144

135

117

3,142

AUG

110

107

106

104

105

107

111

124

129

135

137

140

142

143

145

146

146

146

146

146

146

140

130

115

3,106

SEP

68

66

64

64

65

69

76

88

90

91

92

93

93

93

95

95

96

98

98

102

102

95

85

70

2,048

OCT

68

65

64

64

65

69

76

86

89

90

90

88

85

85

86

88

90

92

92

92

91

88

84

69

1,956

NOV

84

83

83

83

87

93

98

102

102

102

100

97

95

93

93

96

99

106

108

106

104

100

94

87

2,295

DEC

90

90

89

89

91

96

105

113

113

111

108

106

103

102

100

108

117

123

125

124

122

118

109

95

2,547

Amounts shown in MW, hours shown are Hour-Ending and in Mountain Standard Time

 

 

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