Document:

EX-10.5

 Exhibit 10.5 

 
 Government of Alberta 

Sustainable Resource Development 
 Miscellaneous Lease 
 Miscellaneous Lease No. MLL
840018 
 THIS INDENTURE made in duplicate on December 10, 2010 

BETWEEN: HER MAJESTY THE QUEEN, in right of the Province of Alberta, as represented herein by the Department of
Sustainable Resource Development, by the “director” duly designated under the Public Lands Act, (collectively called the “lessor”), 
 OF THE FIRST PART 
 AND MILLAR WESTERN FOREST
PRODUCTS LTD., (hereinafter called the “Lessee”), 
 OF THE SECOND PART 

THE LESSOR hereby demises, lets and leases unto the said Lessee, his executors, administrators and assigns for a term of
25 years commencing from June 7, 2010, the lands described herein, upon the following terms and conditions: 
 1.
The Lessee shall pay to the Lessor on the execution of this lease the sum of $1763.30 for the period June 7, 2010 to June 6, 2011 and thereafter the sum of $1763.30 as an annual rental payable in advance of the anniversary date each year for the
balance of the first five-year period of the lease. The Lessor may change the rental rate for each five year period, according to the rate established by the Department for the purpose for which this lease is granted. 

2. The Lessee shall pay and discharge all taxes, rates and assessments levied against the said lands and premises during
the term of the lease. 
 3. The said lands shall be used by the Lessee solely for the purpose of a Sawmill,
Planner Mill and Campsite and may not be used for any other purpose without the written consent of the Lessor. 

4. The Lessee shall within two years from the effective date of the lease, or within such time as the Lessor may allow,
complete the construction of all improvements in accordance with the plans and specifications approved by the Lessor and by the local authority having jurisdiction in the district in which the land is situated. 

5. Except as is provided herein, the Lessee may not clear the land of any trees, disturb the surface of the land, nor
construct any improvements thereon without the written consent of the Lessor. 
 6. The Lessee shall keep the
said lands in a clean and attractive condition and may not allow refuse to accumulate on the said lands except as in the opinion of the Lessor may be normal to the authorized use. 

7. Except as is authorized by this lease or otherwise by the Lessor in writing the Lessee may not create a nuisance on the
said lands. 
 8. The Lessor by his authorized agents may enter the said lands at all reasonable times for the
purpose of viewing and examining the state of the said lands and premises or for performing any other duties pursuant to the Public Lands Act, or the Forests Act. 
 9. The Lessee may not sublet nor assign the said lands and premises or any part thereof without the written consent of the Lessor. 

10. When the Lessee defaults for a period exceeding 30 days in payment of the annual rental, or is in breach of any of the
terms of this lease, the Lessor may cancel the said lease upon the expiration of 30 days after 

 

 
  
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 Miscellaneous Lease 
 the Lessor has mailed to the Lessee’s last known address a notice that the lease will be cancelled, and the reasons for the impending cancellation. 

11. Provided that the Lessee is not indebted to the Crown or to the Department, the Lessee may within a period of 30 days
after his lease has been cancelled or has expired remove from the leased lands all his chattels and buildings but thereafter the Lessee may not remove or dismantle any fence or building without the Lessor’s consent. 

12. The general provisions of the Public Lands Act, the Forests Act, and the regulations thereto apply to the said lands.

 13. The Lessee shall comply with all the relevant provisions designated as Schedule “A” hereto
attached. 
 The lands referred to herein are more particularly described in Appendix A hereto attached.

 IN WITNESS WHEREOF the parties hereto have hereunto set their hands and seals on December 10, 2010 (date).

 SIGNED, SEALED AND DELIVERED by the parties hereto in the presence of: 

Witness to the signature for the director For: The director, Public Lands Act 

Witness to the signature for the Lessee Lessee’s Signature 

PRESIDENT & CEO 

 

 
  
 APPENDIX A

 LEGAL DESCRIPTION 
 FOR 
 MLL 840018 

EP PLAN NO: 128562 MS 
 PURPOSE: MILLSITE 
 AFFECTED
LANDS(MERIDIAN-RANGE-TOWNSHIP-SECTION-1/4SECTION-LEGAL SUBDIVISION -QUADRANT-QUARTER QUADRANT) 
 HECTARES ACRES
DETAILS 
 5-18-062-18-SE 
 18-SW 
 AND ADJACENT THEORETICAL ROAD ALLOWANCE.

 18-NW 
 AND ADJACENT THEORETICAL ROAD ALLOWANCE. 
 18-NE

 5-19-062-13-SE 
 13-NE 
 AREA SUMMARY 

THE TOTAL LANDS HEREIN DESCRIBED CONTAIN 49.100 HA (121.33 ACRES) 

MORE OR LESS 
 SUBJECT TO: 
 THE AUTHORIZATIONS AND DISPOSITIONS
LISTED ON THE ATTACHED “SCHEDULE B”, IF ANY, HAVE BEEN ISSUED ON THE QUARTER SECTIONS OF LAND ON WHICH YOUR DISPOSITION HAS BEEN ISSUED AND MAY BE PRIOR AND SUBSISTING AUTHORIZATIONS AND DISPOSITIONS TO YOUR DISPOSITION AND MAY RELATE TO
AND AFFECT YOUR DISPOSITION AND THE LANDS ON WHICH YOUR DISPOSITION HAS BEEN ISSUED. 
 *SUPPLEMENTARY
INFORMATION* 
 (LTO) - LAND TITLES OFFICE 

(AE) - ALBERTA ENVIRONMENT/LAND ADMINISTRATION DIVISION (ATS) -ALBERTA TOWNSHIP SURVEY 

(HA) - HECTARES 
 1 HECTARE = 2.471054 ACRES 
 2010/12/10 

10:48:52 
 SUBMITTED BY LSLBI74 

 

 
  
 MLL 840018

 Government of Alberta 
 Sustainable Resource Development 
 Page 1 of 4

 SCHEDULE A 
 1. 002 IN THIS DOCUMENT, unless the context indicates otherwise: 
 “approval (of a departmental officer)” whenever required, must be in writing. 
 “authority” means: this document or the right to occupy public land granted by this document. 
 “department” means: Sustainable Resource Development 
 Lands Division 
 Petroleum Plaza, South Tower

 9915 - 108th Street 
 Edmonton, Alberta T5K 2G8 
 Telephone: 780-427-3570

 “departmental officer” means: an employee of the Sustainable Resource Development, Lands Division;
responsible for the management of surface activity on the land. 
 “holder” means: the recipient of the
right to occupy public land granted by this document. 
 “land(s)” means: the specific land which the
holder is authorized to occupy by this document. 
 “director” means: the “director” duly
designated under the Public Lands Act. 
 “minister” means: the Minister of Sustainable Resource
Development. 
 payments required by this document are to be made payable to the “Minister of Finance”
and may be delivered to the nearest departmental field office, or mailed to: 
 Sustainable Resource Development

 Lands Division 
 Main Floor, Petroleum Plaza, South Tower 
 9915 -
108th Street 
 Edmonton, Alberta T5K 2G8 

a) The holder shall comply with all relevant laws in the Province of Alberta. 

b) A copy of this authority shall be retained on the job site during all phases of your activity, including, if
applicable, preparation, construction, development, maintenance and abandonment. 

 

 
  
 MLL 840018

 Government of Alberta 
 Sustainable Resource Development 
 Page 2 of 4

 c) Schedule “B”, attached, lists any prior and subsisting authorizations and dispositions (prior
rights) issued on the quarter sections included in this authority. The holder shall not conduct any activity on the land where prior rights have been issued without the consent of the holder of these prior rights. 

Surface rights plot sheets showing active dispositions, and individual activity plans can be purchased from IHS, Main
Floor, Petroleum Plaza, South Tower, 9915-108 Street, Edmonton, Alberta, T5K 2G8, Telephone: 780-413-3380, Fax: 780-413-3383 or Website: http://www.petrosurveys.ca. 
 d) If a trapping area (TPA) is listed in Schedule “B”, the holder shall contact the registered trapper at least TEN DAYS PRIOR TO COMMENCING ANY ACTIVITY. This must be done by
registered mail and we recommend personal communication follow-up. The trapper’s name and address may be obtained from Alberta Energy, Crown Land Data Support (Telephone: 780-422-5727). For other information concerning registered traplines,
contact the Client and Licensing Service, Sustainable Resource Development, Edmonton, Alberta (Telephone: 780-427-5185) upon receipt of this approval. The holder may be responsible for any damage to traps, snares or other improvements. 

e) The holder is responsible for obtaining any necessary federal, municipal and other permits and approvals with respect
to this activity. 
 f) The holder shall maintain any buildings or other improvements erected or placed on the
land in good repair and condition to the satisfaction of the Department of Sustainable Resource Development, in its sole discretion. 
 g) The holder agrees to hold harmless the Department from any and all third party claims, demands, or actions for which the holder is legally responsible, including those arising out of
negligence or willful acts by the holder or the holder’s employees or agents. This hold harmless shall survive this Agreement. 
 h) The holder shall indemnify and save harmless the Department from any and all claims, actions, suits, or similar proceedings commenced by any competent regulatory body against the holder
or the Department in connection with the activity or holder’s use of the land, including without limitation the local municipality, any other department or agency of the Alberta Government or the Government of Canada. 

 

 
  
 Government
of Alberta MLL 840018 
 Sustainable Resource Development Page 3 of 4 

i) The holder shall, at its own expense and without limiting its liabilities herein, insure its operations under a
contract of General Liability Insurance, in accordance with the Alberta Insurance Act, in an amount not less than $2,000,000 inclusive per occurrence, insuring against bodily injury, personal injury and property damage including loss of use thereof.
The holder shall provide the Department with acceptable evidence of all the insured prior to the commencement of the Work and shall promptly provide the Department with a certified true copy of each policy upon request. 

j) This authorization is granted subject to further amendment by the Department of Sustainable Resource Development, in
its sole discretion. 
 2. 098 The holder shall contact and advise the departmental officer of its intentions:

 prior to entry upon the lands for a stated purpose, 

prior to any additional construction during the term of this authority, 

at the completion of operations, and 
 upon abandonment of this activity. 
 Fox Creek,
Alberta; Telephone: (780) 622-3921. 
 3. 104 Unless otherwise approved by a departmental officer, the
holder shall use only existing clearings/trails and not clear any new areas. 
 4. 105 Any activity on the land
during adverse ground conditions must be suspended if the activity is likely to cause unacceptable damage to vegetation or soil, as may be determined by the holder or the Department. 

5. 108 No entry is allowed within the boundaries of any research or sample plot. 

6. 127 The holder shall reclaim all disturbed land surfaces within two growing seasons. Interim reclamation, including
site and debris clean-up, slope stabilization, recontouring with subsoil, and spreading of topsoil shall be done progressively and concurrently with operations. 
 7. 128 Final surface reclamation must meet the requirements for the specific activity in place at the time of abandonment. 

8. 131 The holder shall cut, keep down and destroy all noxious weeds and restricted weeds as per the Public Lands Act.

 9. 135 The holder shall remove all garbage and waste material from this site to the satisfaction of the
Department, in it s sole discretion. 
 10. 139 Any garbage remaining on site overnight must be placed in
bear-proof containers. The holder shall ensure that these containers are emptied regularly or when the holder will be off the land for more than two days. 

 

 
  
 Government
of Alberta MLL 840018 
 Sustainable Resource Development Page 4 of 4 

11. 148 The holder shall not deposit or push debris, soil or other deleterious materials into or through any watercourse
or water body or on the ice of any watercourse/water body. 
 12. 158 The holder shall take all precautions and
safeguards necessary to prevent soil and surface erosion to the satisfaction of the Department in its sole discretion. 
 13. 159 Prior to entry, the holder shall prepare a Wildfire Prevention Plan and/or FireSmart Plan and receive approval for this plan from the departmental officer. The holder shall conduct
its operations or activities in accordance with this plan. Contact the local Wildfire Prevention Officer for further information. 
 14. 161 The holder shall not create any interruptions to natural drainage, including ephemeral draws that may result in blockage of water flow. 

All licences, authorizations and approvals issued under the Alberta Environmental Protection and Enhancement Act, Water
Act or Public Lands Act should not be taken to mean the proponent (applicant) has complied with federal legislation. Proponents should contact Habitat Management, Central and Arctic Region, Fisheries and Oceans, at the appropriate local office as
listed below, in relation to the application of federal laws relating to the Fisheries Act (Canada). 
 •
Bow and Parkland Regions (403) 292-5160 
 • Northern East Slopes and Northeast Boreal Regions
(780) 495-4220 
 • Prairie Region (403) 394-2920 

• Northwest Boreal Region (780) 618-3220 

Proponents should also contact the Navigation Protection Program, Canadian Coast Guard, 4253-97 Street, Edmonton, Alberta,
T6E 5Y7, Telephone: (780) 495-6325. relating to the Navigable Waters Protection Act. 
 /lj 

 

 
  
 LAND
STATUS AUTOMATED SYSTEM 
 ENR-LSAS LAND STANDING REPORT LSRC1130 

REPORT DATE: 2010-12-10 TIME: 13:46:26 REQUESTED BY: LSLBI74 PAGE 1 

SELECTION CRITERIA 
 REQUESTED LAND LIST: INCLUDE 
 TITLE INFORMATION :
INCLUDE 
 SELECT GEO-ADMINISTRATIVE AREA: ALL 

SELECT ACTIVITIES: 
 INCL/EXCL ACTIVITIES MAX STATUS ALL/NONE/SOME IF SOME, SPECIFY TYPE 
 I SURFACE DISP 6 ALL 
 I RESERVATIONS 6 ALL

 I ENCUMBRANCES 6 ALL 
 I LAND POSTINGS 6 ALL 
 I INTERIM RECORDS 6 ALL

 I SUBDIVISIONS 5 ALL 
 REQUESTED ACTIVITY 
 REQUESTED ACTIVITY: MLL-
840018 
 REQUESTED LAND 
 REQUESTED LAND 
 OWNERSHIP STATUS 

ADMINISTERED BY TITLE STATUS SURVEY STATUS AREA IN HECTARES LAND TITLE AREA IN ACRES LAND TITLE 

5-18-062-18-SE CROWN UNTITLED FLW UNSURVEYED 64.750 160.00 

5-18-062-18-SW CROWN UNTITLED FLW UNSURVEYED 64.750 160.00 

5-18-062-18-NW CROWN UNTITLED FLW UNSURVEYED 64.750 160.00 

5-18-062-18-NE CROWN UNTITLED FLW UNSURVEYED 64.750 160.00 

5-19-062-13-SE CROWN TITLED FLW UNSURVEYED 64.750 160.00 

5-19-062-13-NE CROWN UNTITLED FLW UNSURVEYED 64.750 160.00 

TOTAL CROWN MIXED UNSURVEYED 388.500 960.00 
 TITLE INFORMATION 
 LAND IDENTIFIER TITLE EFFECTIVE
DATE TITLE HOLDER / REMARKS HECTARES ACRES 
 5-19-062-13-SE PSEUDO REVESTMENT 1962-MAR-21 ENERGY AND NATURAL
RESOURCES 
 ENR 14728; EXCEPTING ROAD PLANS 3456 RD & 3458 RD 

GEO-ADMINISTRATIVE AREAS 
 COAL DEVELOPMENT REGION NORTHERN FORESTED CODE: CDR-2 
 5-18-062 

 

 
  
 LAND
STATUS AUTOMATED SYSTEM 
 ENR-LSAS LAND STANDING REPORT LSRC1130 

REPORT DATE: 2010-12-10 TIME: 13:46:26 REQUESTED BY: LSLBI74 PAGE 2 

GEO-ADMINISTRATIVE AREAS 
 COAL DEVELOPMENT REGION (CONTINUED) 
 5-19-062

 ENVIRONMENT CORPORATE REGION NORTHERN CODE: ENV-3 

5-18-062 
 5-19-062 
 ENVIRONMENT CONS. & RECL.
DISTRICT NO. 3 CODE: ERD-003 
 5-18-062 
 5-19-062 
 FOREST MANAGEMENT UNIT SOUTHWEST W14
WOODLANDS CODE: FMU-W -14 
 5-18-062 
 5-19-062 
 FISH & WILDLIFE ADMIN REGION
EASTERN SLOPES REGION WHITECOURT CODE: FWA-3 -03 
 5-18-062 

5-19-062 
 FISH AND WILDLIFE DISTRICT EASTERN SLOPES REGION FOX CREEK CODE: FWD-3 -12 
 5-18-062 
 5-19-062 

GENERAL LANDS CLASSIFICATION GREEN CODE: GLC-G 
 5-18-062 
 5-19-062 

GRAZING ZONE C CODE: GRZ-C 
 5-18-062 
 5-19-062 

INTEGRATED RESOURCE PLAN FOX CREEK-KNIGHT CODE: IRP-F2 

5-18-062 
 5-19-062 
 LAND USE AREA SOUTHWEST 4 FOX CREEK
CODE: LUA-SW4 -2 
 5-18-062 
 5-19-062 
 MUNICIPAL DISTRICT GREENVIEW NO. 16
CODE: MD -016 
 5-18-062 
 5-19-062-13 
 RANGELAND DISTRICT SOUTHWEST BARRHEAD
CODE: RLD-SW -8 
 5-18-062 
 5-19-062 
 ACTIVITIES 

ACTIVITY STATUS/TYPE LAND ID DATE EXPIRY HECTARES ACRES CLIENT/INTERIM REMARKS METES AND BOUNDS REMARKS TOTAL AREA ACRES
HECTARES 
 CNT-090018 APPROVED ON 0510 BUFFER 2009-MAR-16 2034-MAR-31 WHITE OFFICE - FORESTRY 1 NO RESTRICTION
124,506.82 50,386.120 710 SPECIFIED IN COMMENTS FIELD 

 

 
  
 LAND
STATUS AUTOMATED SYSTEM 
 ENR-LSAS LAND STANDING REPORT LSRC1130 

REPORT DATE: 2010-12-10 TIME: 13:46:26 REQUESTED BY: LSLBI74 PAGE 3 

ACTIVITIES 
 ACTIVITY STATUS/TYPE DATE EXPIRY CLIENT/INTERIM REMARKS TOTAL AREA 
 LAND ID HECTARES ACRES METES AND BOUNDS REMARKS ACRES HECTARES 
 CNT-090018 (CONTINUED) 
 5-18-062-18-SE 

5-18-062-18-SW 
 5-18-062-18-NW 
 5-18-062-18-NE 

5-19-062-13-SE 
 5-19-062-13-NE 
 CTL-W020068 ACTIVE/DISPOSED ON
1988-AUG-15 2014-APR-30 MILLAR WESTERN FOREST PRODUCTS LT 5-18-062-18 5-19-062-13 17,359.15 7,025.000 

CTL-W140002 ACTIVE/DISPOSED ON 2007-JAN-30 2016-APR-30 MILLAR WESTERN FOREST PRODUCTS LT 5-19-062-13-01 5-19- 238,671.69
96,587.000 
 062-13-02 5-19-062-13-07 
 DTL-W020001 ACTIVE/DISPOSED ON 2002-FEB-28 2011-APR-30 ANC TIMBER LTD. 5-19-062-13-SE 226,405.38 91,623.000 
 SW/HWY 43 
 EZE- 000151 LETTER OF AUTHORI ON
2000-AUG-16 9999-999-99 ATCO ELECTRIC LTD 5-19-062-13-SE 0.67 0.271 
 0.271 0.67 

EZE- 100186 LETTER OF AUTHORI ON 2010-SEP-24 9999-999-99 ATCO ELECTRIC LTD 5-18-062-18-SW 1.51 0.612 

0.612 1.51 
 EZE- 850022 ACTIVE/DISPOSED ON 1985-MAR-04 9999-999-99 ATCO ELECTRIC LTD 5-19-062-13-SE 26.19 10.599 
 EZE- 860294 ACTIVE/DISPOSED ON 1986-AUG-27 9999-999-99 ATCO ELECTRIC LTD 5-18-062-18-SW 5-19-062-13-SE 18.43 7.460 
 EZE- 880722 ACTIVE/DISPOSED ON 1989-JAN-11 9999-999-99 ATCO ELECTRIC LTD 5-18-062-18-SW 5-19-062-13-SE 2.10 0.850 
 EZE- 900071 ACTIVE/DISPOSED ON 1990-APR-02 9999-999-99 ATCO ELECTRIC LTD 5-18-062-18-SW 5-19-062- 13-SE 23.23 9.400 

 

 
  
 LAND
STATUS AUTOMATED SYSTEM 
 LAND STANDING REPORT 

ENR-LSAS LSRC1130 REPORT DATE: REQUESTED 2010-12-10 BY: LSLBI74 TIME: 13:46:26 PAGE 4 

ACTIVITIES 
 ACTIVITY 
 FMA-7500020 

LOC- 053054 LOC- 061822 LOC- 880793 
 LOC- 920714 MLL- 840018 
 MSL- 2668 MSL- 054502
MTG-870006 
 PLA- 751 PLA- 773 STATUS/TYPE DATE EXPIRY 

LAND ID HECTARES ACRES 
 ACTIVE/DISPOSED ON 1995-SEP-01 2028-APR-30 5-18-062 5-19-062-13 
 LETTER OF AUTHORI ON 2005-DEC-02 2030-DEC-01 5-18-062-18-NE 
 LETTER OF AUTHORI ON 2006-JUN-21 2031-JUN-20 5-18-062-18-NE 
 LOA AMENDMENT ON 2006-OCT-14 2014-JUN-06 5-18-062-18-NW 5-18-062-18-NE 5-19-062-13-NE 
 ACTIVE/DISPOSED ON 1992-NOV-26 2017-NOV-25 5-18-062-18-SE 
 ACTIVE/DISPOSED ON 1984-JUN-07 2035-JUN-06 5-18-062-18-SE 5-18-062-18-SW 5-18-062-18-NW 5-18-062-18-NE 5-19-062-13-SE 5-19-062-13-NE 

ACTIVE/DISPOSED ON 1964-NOV-05 2014-NOV-04 5-19-062-13-SE 

LOA AMENDMENT ON 2006-JUN-12 2030-DEC-01 5-18-062-18-NE 1.320 3.26 

REGISTERED ON 1987-MAY-08 5-18-062-18-SW 5-19-062-13-SE 

ACTIVE/DISPOSED ON 1961-JUN-22 9999-999-99 5-19-062-13-SE 0.538 1.33 

ACTIVE/DISPOSED ON 1961-JUN-22 9999-999-99 CLIENT/INTERIM REMARKS TOTAL AREA 

METES AND BOUNDS REMARKS ACRES HECTARES 
 BLUE RIDGE LUMBER INC. 1,620,687.94 655,869.092 

TRILOGY RESOURCES LTD. 1.31 0.530 
 TRILOGY RESOURCES LTD. 4.84 1.960 
 MILLAR WESTERN
FOREST PRODUCTS LT 15.42 6.242 AND ADJ THEOR RD ALLOW 
 TRILOGY RESOURCES LTD. 2.64 1.070 

MILLAR WESTERN FOREST PRODUCTS LT 121.33 49.100 
 AND ADJACENT THEORETICAL ROAD ALLOWANCE. 
 AND
ADJACENT THEORETICAL ROAD ALLOWANCE. 
 TRILOGY RESOURCES LTD. 15.89 6.430 TRILOGY RESOURCES LTD. 3.26 1.320

 0.00 0.000 
 PEMBINA PIPELINE CORPORATION 38.50 15.580 PEMBINA PIPELINE CORPORATION 41.79 16.912 

 

 
  

LAND STATUS AUTOMATED SYSTEM 
 ENR-LSAS LAND STANDING REPORT LSRC1130 
 REPORT DATE: 2010-12-10 TIME: 13:46:26 REQUESTED BY: LSLBI74 PAGE 5 
 ACTIVITIES 
 ACTIVITY 

PLA- 773 PLA- 3108 PLA- 3407 
 PLA- 001139 PLA- 062706 PLA- 101082 
 PLA- 850834

 PNT-980007 
 ROE- 6189 RRD- 4426JY RRD- 4431JY 
 TPA- 1381
STATUS/TYPE DATE EXPIRY 
 LAND ID HECTARES ACRES 

(CONTINUED) 
 5-19-062-13-SE 0.591 1.46 
 ACTIVE/DISPOSED ON
1968-JUN-17 9999-999-99 5-19-062-13-SE 
 ACTIVE/DISPOSED ON 1969-JUL-18 9999-999-99 5-18-062-18-SE
5-18-062-18-SW 
 LETTER OF AUTHORI ON 2000-MAR-14 9999-999-99 5-18-062-18-SE 

LETTER OF AUTHOR I ON 2006-JUN-28 9999-999-99 5-18-062-18-NE 

LETTER OF AUTHOR I ON 2010-OCT-20 9999-999-99 5-18-062-18-SW 5-19-062-13-SE 

ACTIVE/DISPOSED ON 1985-DEC-05 9999-999-99 5-18-062-18-SE 5-18-062-18-SW 

APPROVED ON 1998-JAN-22 9999-999-99 
 0580 OTHER MISCELLANEOUS SITE PROTEC. AREAS 4 

5-19-062-13-SE 0.979 2.42 
 ACTIVE/DISPOSED ON 1958-DEC-11 9999-999-99 5-18-062-18-SE 
 ACTIVE/DISPOSED ON 1958-MAR-24 9999-999-99 5-19-062-13-SE 
 ACTIVE/DISPOSED ON 1958-MAR-24 9999-999-99 5-18-062-18-SW 5-19-062-13-SE 
 ACTIVE/DISPOSED ON 1987-AUG-17 2011-JUN-30 CLIENT/INTERIM REMARKS TOTAL AREA 
 METES AND BOUNDS REMARKS ACRES HECTARES 
 INCL. RD.
ALLOW 
 PEMBINA PIPELINE CORPORATION 53.30 21.570 TRILOGY RESOURCES LTD. 7.47 3.023 

TRILOGY RESOURCES LTD. 4.57 1.850 
 TRILOGY RESOURCES LTD. 2.30 0.931 
 TRL GAS CO-OP
LTD. 13.05 5.280 AND ADJ THEOR RD ALLOW 
 TRILOGY RESOURCES LTD. 1.24 0.502 

FOX CREEK OFFICE - LAND USE AREA 55.64 22.517 NO SURFACE DISPOSITION 620 INDUSTRIAL 

710 SPECIFIED IN COMMENTS FIELD 730 WRITTEN AGENCY CONSENTS REQUIR 

TRILOGY RESOURCES LTD. 8.83 3.573 
 TRANSPORTATION 324.23 131.211 
 TRANSPORTATION
351.31 142.170 
 GRAVEL, DARRYL ALPHONSE 0.00 0.000 

 

 
  
 LAND
STATUS AUTOMATED SYSTEM 
 ENR-LSAS LAND STANDING REPORT LSRC1130 

REPORT DATE: 2010-12-10 TIME: 13:46:26 REQUESTED BY: LSLBI74 PAGE 6 

ACTIVITIES 
 ACTIVITY STATUS/TYPE DATE EXPIRY CLIENT/INTERIM REMARKS TOTAL AREA 
 LAND ID HECTARES ACRES METES AND BOUNDS REMARKS ACRES HECTARES 
 TPA- 1381 (CONTINUED) 
 5-19-062-13 

TPA- 2927 ACTIVE/DISPOSED ON 1987-AUG-18 2011-JUN-30 THIESSEN, JAMES ERIC DENNIS 0.00 0.000 

5-18-062-18 
 *** NOTE: THE FOLLOWING DISCLAIMER *** 

 

 
  
 LAND
STATUS AUTOMATED SYSTEM 
 ENR-LSAS LAND STANDING REPORT LSRC1130 

REPORT DATE: 2010-12-10 TIME: 13:46:26 REQUESTED BY: LSLBI74 PAGE 7 

DISCLAIMER 
 THIS STANDING REPORT IS PROVIDED SUBJECT TO THE CONDITION THAT HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF ALBERTA AND HER EMPLOYEES: 

(1) HEREBY DISCLAIM AND ARE RELEASED FROM ANY AND ALL RESPONSIBILITY FOR THE INFORMATION IN, AND ANY OMISSION OF THE
INFORMATION FROM, 
 THIS REPORT; 
 (2) SHALL NOT BEAR ANY RESPONSIBILITY FOR ANY LOSS OR DAMAGE OF ANY KIND ARISING FROM OR IN RESPECT OF ANY ABSENCE OF INFORMATION OR ANY ERRORS OR OMISSIONS (WHETHER THE AFORESAID
OCCASIONED BY NEGLIGENCE OR OTHERWISE) IN OR AFFECTING THIS REPORT OR THE INFORMATION THEREIN. 
 THIS REPORT
DOES NOT SHOW CAVEATS, BUILDERS’ LIENS, OR OTHER INSTRUMENTS, IF ANY, REGISTERED AT LAND TITLES OFFICE IN RESPECT OF ANY LANDS OR INTERESTS THEREIN. PERSONS ARE ADVISED TO ALSO EXAMINE RECORDS AT LAND TITLES OFFICE TO ASCERTAIN WHETHER OTHER
INSTRUMENTS THAT MAY CONCERN THE LANDS OR INTERESTS THEREIN HAVE BEEN REGISTERED. 
 *** END OF REPORT ***EX-10.7

 Exhibit 10.7 

 
 Sundance C Power Purchase Arrangement 

Power Purchase Arrangement For Sundance Under 
 Section 45.95(1) of the Electric Utilities Act 

BETWEEN: 
 TransAlta Utilities Corporation, a corporation incorporated pursuant to the laws of Canada 
 and 
 the Buyer 

WHEREAS: 
 A. The Owner owns the Plant described in Schedule A. 
 B. Pursuant to Section 45.5 of the Act, the independent assessment team has determined this Arrangement for the Units and this Arrangement has been approved by the Board under Section
45.91 of the Act. 
 C. The right to this Arrangement has been purchased by the Buyer at a public auction
pursuant to Sections 45.93 and 45.94 of the Act. 
 D. By operation of the Act and in accordance with the terms
and conditions of this Arrangement the Owner is required to make available to the Buyer the Committed Capacity from the Units and the corresponding Electricity generated and System Support Services provided by the Units and the Owner is required to
sell to the Buyer and the Buyer is required to purchase from the Owner the right to the Committed Capacity from the Units and the Buyer is entitled to purchase from the Owner the Electricity generated and System Support Services provided by the
Committed Capacity. 
 E. By operation of the Act and in accordance with the terms and conditions of this
Arrangement the Owner may make available Excess Energy from the Units and the Owner is required to sell such Excess Energy through the Buyer and the Buyer is required to remit proceeds from the sale of any such Excess Energy to the Owner.

 INDEPENDENT ASSESSMENT TEAM 2 Final Version 

 

 
  
 Sundance C
Power Purchase Arrangement 
 F. By operation of the Act and in accordance with the terms and conditions of this
Arrangement the Owner and the Buyer are entitled to receive payment from the Balancing Pool in certain circumstances, are required to make payment to the Balancing Pool in certain circumstances and are required to involve the Balancing Pool in
making certain determinations. 
 Accordingly, this Arrangement sets forth the rights and obligations of each of
the Parties with respect to the Balancing Pool, and with respect to the operation the Units and the use of and entitlements to Electricity and System Support Services from the Units. 

ARTICLE 1 INTERPRETATION 1.1 Definitions 
 In this Arrangement, including the recitals and the Schedules, the following capitalized words and expressions have the following meanings: 

“Act” means the Electric Utilities Act, S.A. 1996, c. E-5.5; 

“Actual Availability” means with respect to each Unit and during each Settlement Period of the Effective Term,
the number of watt-hours of Electricity that such Unit was capable of generating during such Settlement Period, as determined in accordance with Schedule D; 
 “Affiliate” means, in relation to any Person including the Owner and the Buyer, any other Person directly or indirectly controlling or controlled by, or under direct or indirect
common control with, that Person; for the purpose of this definition, a Person shall be deemed to control another Person if that Person possesses directly or indirectly, the power to direct or cause the direction of the management or policies of
that other Person, whether by operation of law, by contract, through the ownership of voting securities or otherwise; 
 “Annual Capacity Statement” has the meaning given such expression in Schedule K; 
 “Arrangement” means this power purchase arrangement and all of its attached Schedules, as it may be amended from time to time pursuant to the terms hereof; 

“Associated Facilities” means those facilities, some of which are specified in Schedule A as “Associated
Facilities”, which form part of the Plant and which are used by a Unit in common with other electricity generating units located at the Plant; 
 “Availability Declaration” has the meaning given such expression in Schedule J; 
 “Balancing Pool” means the balancing pool or the balancing pool administrator as the context requires, as established pursuant to the Act or the Regulations; 

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 “Board” means the Alberta Energy and Utilities Board established under
the Alberta Energy and Utilities Board Act, S.A. 1994, c. A-19. 5 and its replacements or successors; 

“Business Day” means any day other than a Saturday, a Sunday or a statutory holiday in the Province of Alberta;

 “Buyer” means the purchaser of this Arrangement under Section 45.93(1) of the Act; or a Person
entitled to the rights and bound by the obligations of the Buyer pursuant to Section 18.1; 
 “Candidate
Units” has the meaning given such expression in Section 9.1(d); 
 “Capacity” means with respect
to each Unit and at each particular time, the ability of such Unit to generate and deliver Electricity and System Support Services to the Delivery Point; 
 “Change in Law” means 
 (a) the adoption,
enactment, promulgation, modification, amendment, or revocation after May 31, 1999 of: 
 (i) any Laws applicable
to the Owner or the Buyer, which relate to the following: (A) taxes, including any charge or tax related to the use or consumption of fossil fuels or the production of any related by-products from any such use or consumption, but excluding any
change with respect to any taxes in respect of which an amount is calculated in Article C5 of Schedule C, (B) any Unit or the Plant including the ownership, operation, maintenance or decommissioning thereof, (C) the electricity sector, including
re-regulation or deregulation affecting generation, supply, sale or transmission of electricity, transmission system or Power Pool access charges, (D) the environment, including any environmental taxes, or (E) this Arrangement or the subject matter
of this Arrangement; 
 (ii) any interpretation, reinterpretation or administrative position relating to any of
the Laws referred to in paragraph (i) above of any Governmental Authority; 
 (iii) any material requirements or
condition in connection with the issuance, renewal, extension, replacement or modification of any Governmental Approval required in connection with this Arrangement; 
 (iv) the effective rate of coal royalties or other fuel related royalties associated with the provision of Generation Services in connection with the action of any Governmental Authority;
or 
 (b) the entering into after May 31, 1999 of any TA Agreement which provides for the replacement of or
changes to Measuring Equipment to bring non-compliant Measuring Equipment into compliance with applicable Laws; 

“Claim” has the meaning given such term in Section 13.1(b); 

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 “Committed Capacity” means with respect to each Unit, that seasonally
adjusted Capacity that the Owner is required hereby to make exclusively available each Month to the Buyer, as set forth in, and determined in accordance with, Schedule B; 
 “Committed Operating Characteristics” means the values of the Operating Characteristics of the Units listed in Schedule B; 

“Confidential Information” has the meaning given such expression in Section 20.1(a); 

“Connection Services” means all agreements, arrangements and services associated with the connection of a Unit
to the IES to facilitate the delivery of Electricity and System Support Services from the Unit to the IES; 

“Day” means a calendar day; 
 “Declared Operating Characteristics” means with respect to each Unit the values of the Operating Characteristics declared by the Owner in its Operating Declaration as set out in
Schedule J; 
 “Default Interest Rate” means the Interest Rate plus two percent (2%); 

“Delivery Point” means with respect to each Unit, the disconnect point on the transmission or distribution line
connecting such Unit to the IES, as more particularly described in Schedule A; 
 “Direct Sales” means
sales of Electricity produced from a Unit which are not conducted through the Power Pool, but instead are made directly to a customer; 
 “Dispatch Instructions” means with respect to each Unit, all dispatch instructions issued by the System Controller from time to time in respect of such Unit; 

“Effective Date” means the date upon which this Arrangement is sold pursuant to Section 45.93(1) of the Act;

 “Effective Term” means the period that commences on January 1, 2001 and continues until the earlier
of December 31, 2020 and the latest Unit Effective Term Completion Date set forth in Schedule A; 

“Electricity” means with respect to each Unit, electricity as such term is defined in the Act, generated by such
Unit during a time interval and being measured in units of watt-hours, volt amps and volt amps reactive or standard multiples thereof, including, without limitation, electricity delivered pursuant to the provision of a System Support Service;

 “Equivalent Hot Starts” has the meaning given such expression in Schedule E; 

“Equivalent Hot Starts Limit” has the meaning given such expression in Schedule E; 

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 “Excess Energy” means for any period and with respect to each Unit, the
Electricity exceeding the amount of Electricity produced by the Committed Capacity and Increased Capacity; 

“Final Outage Plan” has the meaning given such expression in Section 5.1(d); 

“Force Majeure” means any event or cause which is beyond the reasonable control of the affected Party, or its
Affiliates, including a HILP Event, a mechanical breakdown but only insofar as such breakdown results from a HILP Event, an act of God, flood, earthquake, storm, lightning, fire, epidemic, war, blockade, explosion, riot, act of the Queen’s
enemies, act of civil or military authority, civil disturbance or disobedience, strike, lockout or other labour dispute or industrial disturbance, accident, sabotage, lack or inadequacy of fuel supply from a fuel supplier, any suspension of delivery
of Electricity pursuant to Section 5.4, restraint by court order or any Laws, or the action or inaction of any Governmental Authority, or inability to obtain or renew any Governmental Approval, provided that lack of funds or economic hardship shall
not constitute a cause beyond the reasonable control of the affected Party; 
 “Forced Outage” means
any Outage other than a Planned Outage; 
 “Forfeiture Amount” has the meaning given such expression in
Section 4.4(d); 
 “Generating Station” means all of the electrical generating facilities, of which the
Plant forms a part; 
 “Generation Services” means the making available of the Committed Capacity and
the supply of Electricity and System Support Services available from the Committed Capacity by the Owner to the Buyer; 
 “Good Operating Practice” means any of the range of practices, methods and acts engaged in or approved by a significant proportion of the industry in North America involved in
the supply of electricity from and the operation of generating units similar to the Units, from time to time, or any other practices, methods and acts which, in the exercise of reasonable judgement in light of the facts known or reasonably
ascertainable, could have been expected to accomplish the desired result at a reasonable cost consistent with applicable Laws, reliability, safety and expedition; 
 “Governmental Approval” means an authorization, approval, order, permit, grant, licence, consent or similar right issued by any Governmental Authority; 

“Governmental Authority” means a court, ministry, minister, official, government, government department,
government authority, government agency, regulatory authority, regulatory agency, administrative tribunal, body that establishes or administers Laws, or body having authority over this Arrangement created pursuant to a Law; 

“GST” means the federal Goods and Services Tax as provided for in the Excise Tax Act (R.S.C. 1985, c.E-15);

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 “High Impact, Low Probability Event” or “HILP Event” means a
major failure of some or all of the components of the Plant (or a reasonable prediction by the Owner that a major failure of some or all of the components of the Plant will occur before the next scheduled Planned Outage) and which results (or could
be reasonably expected to result) in the Plant being unable to operate or being forced to operate at a lower level (or is reasonably predicted by the Owner to be unable to operate or forced to operate at a lower level) and (a) it is reasonably
predicted by the Owner that the Plant will be unable to operate or forced to operate at a lower level for a period in excess of six (6) weeks; and 
 (b) the Balancing Pool has confirmed that the above conditions have been met; 
 “IES” means the interconnected electric system in Alberta, as such term is defined in the Act; 
 “Increased Capacity” means with respect to each Unit, Capacity exceeding the Committed Capacity, occurring as a result of a facilities improvement program or capital improvement
program undertaken by the Owner; 
 “Indemnitee” has the meaning given such term in Section 13.1(a);

 “Indemnitor” has the meaning given such term in Section 13.1(a); 

“Initial Outage Plan” has the meaning given such expression in Section 5.1(a); 

“Interest Rate” means the rate of interest expressed as a rate per annum, which is used by the Royal Bank of
Canada, or such other major Canadian bank as the parties may reasonably agree, as a reference rate for the purpose of determining rates of interest charged by it on Canadian dollar commercial demand loans made by it in Canada and which is quoted by
such bank, from time to time, as its prime rate; 
 “Laws” means all federal, provincial, local and
municipal statutes, laws, by-laws, rules, codes, ordinances, orders (including court orders) and Regulations in effect from time to time and made or issued by a Governmental Authority, including interconnection standards, tariff requirements and
industry reliability standards which are requirements under the TA Agreements; 
 “Measuring Equipment”
has the meaning given such expression in Section 10.1; 
 “Metering and Operational Statement” has the
meaning given such expression in Schedule K; 
 “Mine Study” has the meaning given such expression in
Section 7.4; 
 “Month” means a period beginning at 00:00 hours on the first Day of a calendar month
and ending 00:00 hours on the first Day of the next calendar month; 
 “Monthly Billing Background
Statement” has the meaning given such expression in Schedule K; 
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 “Monthly Billing Financial Statement” has the meaning given such
expression in Schedule K; 
 “Monthly Billing Statement” has the meaning given such expression in
Schedule K; 
 “Monthly Capacity Payment” means, for each Month of the Effective Term, the amount
payable by the Buyer to the Owner for the Committed Capacity of all Units during such Month, as calculated in accordance with Schedule C; 
 “Monthly Energy Payment” means, for each Month of the Effective Term, the amount payable by the Buyer to the Owner for the Electricity delivered by the Owner to the Buyer in
respect of all Units during such Month, as calculated in accordance with Schedule E; 
 “Monthly Excess
Energy Payment” means, for each Month of the Effective Team, the amount payable by the Buyer to the Owner for Excess Energy actually delivered by the Owner to the Buyer in respect of all Units during such Month, as calculated in accordance with
Schedule F; 
 “Monthly Incentive Payment” means for each Month of the Effective Term, the amount
payable by the Buyer to the Owner or by the Owner to the Buyer, in respect of any variance between Target Availability and Actual Availability for such Month as calculated in accordance with Schedule D; 

“Monthly Operating Characteristic Penalty Payment” means, for each Month of the Effective Term, the amount
payable by the Owner to the Buyer in respect of any degradation of Committed Operating Characteristics for such Month, as calculated in accordance with Schedule H; 
 “Operating Characteristics” means those operating characteristics of the Unit listed as Operating Characteristics in Schedule B; 

“Operating Declaration” has the meaning given such expression in Schedule J; 

“Outage” means with respect to any Unit, any condition that requires or causes such Unit to be either removed
from service or to be derated to a Capacity level below the Committed Capacity for inspection, general overhaul or repair of some element of the Plant, or for any reason in accordance with Good Operating Practice; 

“Outage Cycle” means a period of three Years, the initial period to commence on the first Day of the Effective
Term and each subsequent period to commence on each anniversary date of the first Day of the Effective Term that follows until the end of the Effective Term, provided that any such period shall be reduced, if necessary, so as not to extend beyond
the end of the Effective Term; 
 “Owner” means TransAlta Utilities Corporation or a Person entitled to
the rights and bound by the obligations of the Owner pursuant to Section 18.1; 
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 “Parties” means the Buyer and the Owner, and “Party” means, as
the context requires, the Buyer or the Owner; 
 “Pass Through Cost” means a cost incurred by the Owner
which the Owner is entitled to pass through to the Buyer and the Buyer is obliged to pay as part of the Aggregate Passthrough Charges determined pursuant to the provisions of Schedule C; 

“Permitted Person” means a Person entitled by Law to purchase Electricity or System Support Services directly
from the Buyer; 
 “Person” includes a natural person, a corporation, a partnership, a limited
partnership, a joint venture, an association, a trust, a governmental authority and an unincorporated organization; 
 “Planned Outage” means an Outage that is scheduled pursuant to Section 5.1; 
 “Plant” means those electrical generating facilities, of which the Units and Associated Facilities form a part, as more particularly described in Schedule A; 

“Plant Supply” means with respect to each Unit, Electricity from such Unit used by the Owner in the operation of
the Plant; 
 “Pool Administrator” means the Person or Persons appointed by the Power Pool Council
under Section 9(l)(b) of the Act; 
 “Pool Participant Agreement” means a Pool Participant Agreement,
as such term is defined in the Pool Rules; 
 “Pool Price” means the Pool Price as such term is defined
in the Pool Rules; 
 “Pool Rules” means the rules of the Power Pool, including the Pool Code of
Practice, as established pursuant to the Act and regulating the operation of the Power Pool; 
 “Pool
Settlement Date” means the Pool Settlement Date as defined in the Pool Rules; 
 “Pool Statement”
means the Pool Statement as defined in the Pool Rules; 
 “Power Pool” means the power pool, as such
term is defined in the Act; 
 “Power Pool Council” means the Power Pool Council, as continued pursuant
to the Act; 
 “Production Period” means a Production Period as defined in the Pool Rules; 

“Provisional Capacity Payment” has the meaning given such expression in Schedule C; 

“Regulations” means any and all regulations promulgated under the Act or any other legislation having
application to the Owner, the Buyer, any Unit, the Plant, this Arrangement or any of the subject matter hereof; 

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 “Required Minimum Coal Consumption” has the meaning given such expression
in Schedule E; 
 “Rolling Average Monthly Off Peak Pool Price” has the meaning given such expression
in Schedule D; 
 “Rolling Average Monthly Peak Pool Price” has the meaning given such expression in
Schedule D; 
 “Settlement Period” means Settlement Period as that term is defined in the Pool Rules;

 “Start Up” has the meaning given such expression in Schedule E; 

“System Controller” means each Person appointed, from time to time, under Section 9(l)(c) of the Act and any
replacement thereof or successor thereto; 
 “System Support Services” means, with respect to each
Unit, system support services as such term is defined in the Act and which a Unit is capable of providing and which are not in excess of the Committed Capacity; 
 “TA Agreements” means those agreements relating to connection and use of IES from time to time required in respect of the Connection Services; 

“Target Availability” means with respect to each Unit, the number of watt-hours of Electricity it is forecast
such Unit will be capable of generating during each Settlement Period of the Effective Term, as determined in accordance with Schedule D; 
 “Termination Payment” means a payment made or received by a Party to this Arrangement upon its termination, and which is calculated in accordance with Schedule L; 

“Total Monthly Payment” means for each Month of the Effective Term, the aggregate of the amounts payable by the
Buyer to the Owner in respect of such Month, as required pursuant to Section 4.1; 
 “Transmission
Administrator” means each Person appointed by the Lieutenant Governor in Council to act as the Transmission Administrator pursuant to Part 3 of the Act and any replacement thereof or successor thereto; 

“Unit” means each of the generating units in the Plant described and specified in Schedule A as subject to this
Arrangement; 
 “Unit Effective Term Completion Date” means the date on which this Arrangement ceases
to apply to the operation of a Unit and is as specified in Schedule A; 
 “Unit Net Generation” means
Unit Net Generation as that term is defined in the Pool Rules; and 
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 “Year” means each period commencing at 00:00 hours on the first Day of
January and ending on 00:00 hours on the next anniversary of such Day. 
 1.2 Construction of Arrangement

 In this Arrangement, unless otherwise expressly stated: 

(a) references to “herein”, “hereto” “hereby”, “hereunder”, “hereof’ and
similar expressions are references to this Arrangement and not to any particular Section, subsection or Schedule; 
 (b) references to “including” means including without limitation, and “includes” and other derivatives thereof shall have corresponding meanings; 

(c) references to an “Article”, “Section” or “Schedule” are references to an Article,
Section or Schedule of, or to, this Arrangement; 
 (d) words importing the singular shall include the plural and
vice versa; words importing gender shall include the masculine, feminine and neuter genders, all as may be applicable by the context; 
 (e) any reference herein to any agreement or instrument, including this Arrangement, is a reference to it as varied, amended, modified, supplemented or replaced from time to time, and a
reference to any Law is a reference to it as re-enacted, varied, amended, modified, supplemented or replaced from time to time; and 
 (f) the use of headings and the division of this Arrangement into articles is for convenience of reference only and shall not affect the construction or interpretation of this Arrangement.

 1.3 Schedules 
 (a) The following Schedules, attached to this Arrangement, form part of this Arrangement: 
 Schedule A - Plant Description 
 Schedule B -
Committed Capacity and Operating Characteristics 
 Schedule C - Capacity Payments 

Schedule D - Availability Incentives Schedule E - Energy Payments 

Schedule F - Excess Energy and Increased Capacity 
 Schedule G - System Support Services 
 Schedule H -
Operating Characteristics Charges 
 Schedule I - Performance Monitoring 

Schedule J - Dispatch Obligations and Protocols 
 Schedule K - Statements and Bills 
 Schedule L -
Termination Payments 
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 Schedule M - Not used 

Schedule N - Conventions and Units of Measurement 
 (b) In the event of a conflict between the provisions of the body of this Arrangement and the provisions of any Schedule, the provisions of the body of this Arrangement shall take
precedence. 
 ARTICLE 2 ELECTRICITY AND SYSTEM SUPPORT SERVICES 

2.1 Availability of Generation Services 
 (a) Throughout the Effective Term, the Owner shall make exclusively available to the Buyer the Committed Capacity of each Unit and shall sell to the Buyer, and the Buyer shall be entitled
to purchase from the Owner, the Electricity up to the Committed Capacity of such Unit and the Buyer shall pay the Owner for the exclusive availability of the Committed Capacity of such Unit and the Electricity actually supplied by such Unit (net of
any Plant Supply); all upon and subject to the terms and conditions of this Arrangement; 
 (b) Throughout the
Effective Term, the Owner shall supply and exclusively make available to and sell to the Buyer, and the Buyer shall be entitled to purchase from the Owner, System Support Services from each Unit up to the Committed Capacity of such Unit; and the
Buyer shall pay the Owner for the supply, exclusive availability and purchase of System Support Services from each Unit; all upon and subject to the terms and conditions of this Arrangement. 

2.2 Excess Energy 
 Throughout the Effective Term, the Owner shall have the right to the benefit of Excess Energy from each Unit, and in the event any Excess Energy is produced, the Owner shall sell such
Excess Energy through the Buyer, and the Buyer shall remit proceeds from the sale of any such Excess Energy to the Owner upon and subject to the terms and conditions of this Arrangement. 

2.3 Increased Capacity 
 (a) No Increased Capacity shall be developed or implemented by the Owner for any Unit except in accordance with the provisions of Schedule F. 

(b) Throughout the Effective Term, the Owner shall have the right to the benefit of any Increased Capacity of each Unit
and may sell to the Buyer Electricity produced by such Increased Capacity; and the Buyer shall pay the Owner for any such Electricity actually supplied by each Unit, all upon and subject to the terms 

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 and conditions of this Arrangement and the terms applicable to such Increased
Capacity established pursuant to Schedule F. 
 2.4 Sale of System Support Services 

(a) Throughout the Effective Term, the Buyer shall, subject to the provisions of Section 2.4(b), be entitled to sell
System Support Services available from each Unit to the Transmission Administrator or other Permitted Person. The Buyer shall ensure that any sale of System Support Services is consistent with the terms and conditions of this Arrangement and the
Unit’s capability and Operating Characteristics as set forth in the Owner’s Availability Declarations and Operating Declarations, as revised from time to time in accordance with Schedule J. 

(b) Prior to making any offer with respect to a System Support Service, in respect of a Unit, to the Transmission
Administrator or other Permitted Person (other than those System Support Services specifically listed in Schedule G, Section G2.1) the Buyer shall seek confirmation from the Owner that the provision of such System Support Service is within the
technical capability of the Unit and shall seek the Owner’s agreement to the provision of such System Support Service, such agreement not to be unreasonably withheld. Once the provision of an additional System Support Service has been agreed to
between the Buyer and the Owner, a definition of that System Support Service (as reasonably agreed between the Buyer and the Owner) shall be added to, Section G1.1 “Definitions” of Schedule G and shall be added to the list of System
Support Services included in Section G2.1 of Schedule G. 
 2.5 Number of Start Ups 

(a) In respect of each Year of the Effective Term, the Buyer shall not be entitled to offer a Unit in such a way that the
number of Equivalent Hot Starts exceeds the Equivalent Hot Starts Limit for such Unit for such Year; 
 (b) In
respect of any Year of the Effective Term, the Buyer may make application to the Owner, by giving notice not later than two (2) Months prior to the commencement of such Year, to vary the number of Equivalent Hot Starts allowable for a Unit under
this Arrangement. The Owner shall respond to the application not later than one (1) Month prior to the commencement of such Year, stating upon what reasonable terms it is prepared to agree to such application. The Buyer shall either accept or reject
the Owner’s terms, by notice to the Owner given not later than ten (10) Days prior to the commencement of such Year. If the Buyer rejects the Owner’s terms or if the Buyer does not give such notice within the time permitted, the Buyer
shall be deemed to have rejected the Owner’s terms and the provisions of Schedule E with respect to the number of Equivalent Hot Starts shall not be amended. If the Buyer accepts the Owner’s terms then the provisions of Schedule E shall be
amended as necessary to give effect to such terms. 
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 2.6 Fuel Usage 

(c) In the event that the Buyer anticipates that the Units will be dispatched in such a way as to consume less than the
Required Minimum Coal Consumption (as set out in Article E6 of Schedule E) for a period of two (2) or more consecutive Years it will promptly notify the Owner and will provide the Owner with its reasonable estimate of the range of Unit dispatch
over such period. The Owner, as soon as it is reasonably able, shall then propose a revised schedule of fixed and variable fuel charges reflecting the revised costs of mining at the lower level for the period, as soon as it is reasonably able. The
proposal shall be supported by reports from one or more independent consultants generally accepted as skilled in the area of coal mining costs and economic analysis. The expense of such reports shall be shared equally by the Buyer and the Owner.
Once the Buyer has agreed to the Owner’s proposal (such agreement not to be unreasonably withheld), Schedules C and E shall be revised to reflect the new terms. 
 2.7 Start Up Constraints 
 The Owner shall make
every effort to comply with all Dispatch Instructions, but to the extent that there is a delay in the start of a Unit due to an inability to obtain the required volumes of natural gas due to transportation constraints as determined by the operator
of the natural gas pipeline, the Owner shall not be assessed any penalties or charges under the provisions of Schedules D or H. The Owner shall proceed with starting the Units in the order in which the Dispatch Instructions are received. 

ARTICLE 3 DELIVERY OF ELECTRICITY 
 3.1 Delivery of Electricity 
 The Owner will
deliver and the Buyer will accept delivery of Electricity and System Support Services with respect to each Unit at the applicable Delivery Point in accordance with Dispatch Instructions. 

3.2 Property and Risk 
 Property in and all risk relating to the Electricity and System Support Services delivered to the Buyer by the Owner pursuant to this Arrangement will pass from the Owner to the Buyer at
the applicable Delivery Points. All responsibility of the Owner for the delivery of Electricity and System Support Services hereunder and all liability of the Owner with respect to the Electricity and System Support Services shall cease at the
applicable Delivery Points. 
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 ARTICLE 4 
 PAYMENT FOR COMMITTED CAPACITY AND PRICE FOR ELECTRICITY 
 4.1 Payment and Price 
 For Electricity actually
delivered to the Buyer by the Owner and for Committed Capacity made available to the Buyer by the Owner pursuant to this Arrangement, the Buyer shall pay the Owner the Monthly Capacity Payment, the Monthly Energy Payment, and the Monthly Excess
Energy Payment, for each Month of the Effective Term, at the times provided for in Article 11. For any variance between Target Availability and Actual Availability, the Buyer shall pay to the Owner or the Owner shall pay to the Buyer, as the case
may be, the Monthly Incentive Payment, for each Month of the Effective Term, at the times provided for in Article 11. For any degradation of Committed Operating Characteristics, the Owner shall pay to the Buyer the Monthly Operating Characteristic
Penalty Payment for each Month of the Effective Term, at the times provided for in Article 11. 
 4.2 General
Provisions Regarding Indices in Schedules 
 (a) If any index referred to in any Schedule ceases to be published
or is otherwise unavailable for any reason, or is reasonably judged by the Parties no longer to represent a reasonable measure of inflation of the variable so indexed, the Parties shall promptly agree to a substitute for such index. 

(b) If any index referred to in any Schedule is changed or modified in any way, including a change in the reference base
used in the compilation of such index, then the Parties shall use such changed or modified index if the changes or modifications to such index are consistent with or produce results which are consistent with the intent of use of the original index;
otherwise, use of such index shall be modified so that calculations based on such index shall produce as nearly as possible the same results as are consistent with the intent of use of the original index. 

(c) If any index referred to in any Schedule is either not available at the time it is required or ceases to be published
or is otherwise unavailable, pending it becoming available or being replaced with a substitute, as applicable, the Parties shall, on an interim basis, continue to use the last index used for that purpose. 

(d) The Parties shall endeavor to promptly agree on any replacements or adjustments required by this Section 4.2.

 (e) The Parties shall promptly make whatever adjustments to the Schedules to this Arrangement as are required
to give effect to this Section 4.2. The Parties shall also promptly make whatever adjustments to payments as are required to give 
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 effect to this Section 4.2, with interest on such adjustments for the period
requiring adjustment at the Interest Rate until paid. 
 (f) A changed or modified index or a substituted index
shall be used for all calculations required to be made pursuant to this Arrangement from and after the time that the use of such changed, modified or substituted index has been agreed upon by the Parties. Such changed, modified or substituted index
shall be linked to the previously used index so as to avoid retrospective adjustments and shall be used to measure inflation in a variable from the level of the variable at the time the previously used index was modified, changed or substituted.

 4.3 Change in Law 
 (a) Subject to the provisions of this Section 4.3, this Arrangement shall be performed by the Parties from the Effective Date and throughout the Effective Term in accordance with any
Change in Law. 
 (b) Subject to the provisions of this Section 4.3, the Owner shall be kept in the same
financial position in respect of this Arrangement after giving effect to any Change in Law as it would have been had such Change in Law not occurred, and the amounts payable pursuant to this Arrangement shall be subject to adjustment for any Change
in Law. 
 (c) If a Change in Law occurs which results in a net change in the Owner’s revenues, fixed costs
or variable costs associated with the provision of Generation Services pursuant to this Arrangement, such changes resulting from such Change in Law shall be passed on to the Buyer, effective from the effective date of such Change in Law, as a change
to amounts otherwise payable pursuant to this Arrangement by way of a change to the monthly payments between the Parties, if practical, or otherwise as a separate payment from the Buyer to the Owner or from the Owner to the Buyer, as the case may
be, as necessary to keep the Owner in the same financial position in respect of this Arrangement, after giving effect to such Change in Law, as it would have been had such Change in Law not occurred. In the event of a change in the Owner’s
revenues or costs, other than as allowed under this Arrangement, the Owner shall not be entitled to Change in Law protection under the terms of this Section 4.3 in respect of such changes in revenues or costs. 

(d) Upon the occurrence of an event referred to in Section 4.3(c) above, the Owner will advise the Buyer as to the
effect such Change in Law will have on the Owner’s revenues, fixed costs and variable costs of the provision of Generation Services, and payments between the Parties shall be adjusted accordingly on an interim basis. The Buyer shall have the
right to conduct an audit of the Owner’s books and records to the extent necessary to verify the effect of such Change in Law. 
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Power Purchase Arrangement 
 (e) Notwithstanding and in the event of any of the foregoing, the Owner shall take
all reasonable steps as agreed to by the Buyer, and at the cost of the Buyer, to minimize to the fullest reasonable extent (after taking account of such cost) any decrease in revenues or increase in the fixed costs or variable costs resulting from a
Change in Law. 
 (f) After the effect of a Change in Law is determined, the Parties shall promptly make whatever
final adjustments to payments which had been made on an interim basis as are required to give effect to such Change of Law as of the effective date thereof in accordance with Section 4.3(c), with interest on such adjustments for the period
requiring adjustment at the Interest Rate until paid. 
 (g) The Parties shall make such amendments to the
Schedules to this Arrangement as are required to give effect to this Section 4.3. 
 (h) To the extent that
either the Owner or the Buyer is unable to perform its obligations (save and except, in all cases either the Buyer’s or the Owner’s inability to pay amounts to the other required hereunder or to provide any performance security called for
by this Arrangement or the Regulations) as a result of a Change in Law, such event shall be an event of Force Majeure for the purposes of Article 14. 
 (i) In the event that any Change in Law requires the Owner to comply with any metering or measurement legal requirements in respect of which it had previously been relieved (or
substantially relieved) of its obligations by means of an exemption, derogation or dispensation granted by the appropriate authority, the Buyer shall be entitled to compensation for any additional costs it must bear under the terms of this
Arrangement in accordance with the provisions of the Regulations. 
 (j) Notwithstanding any of the foregoing, to
the extent that a Change in Law, after giving effect thereto and to this Section 4.3, could reasonably be expected to render continued performance by the Parties to this Arrangement for the balance of the Effective Term unprofitable to the
Buyer in respect of a Unit, having taken account of any compensation entitlement under Section 4.3(i) or any amount due from the Balancing Pool, then the Buyer may terminate this Arrangement and shall not be liable for, nor entitled to any
Termination Payment. 
 4.4 GST 
 (a) Notwithstanding any provision of this Arrangement, amounts payable pursuant to this Arrangement are exclusive of GST and each Party shall pay to the other, in addition to the amounts
payable by this Arrangement, all GST properly exigible on such amounts. 
 (b) Each Party shall be a registrant
and will continue to be a registrant in accordance with the provisions of the Excise Tax Act (Canada) from the Effective Date and for the Effective Term. 
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 (c) Each Party shall provide notice to the other of its GST registration number.

 (d) If, as a consequence of a breach, modification or termination of this Arrangement: 

(i) either Party is obliged to pay or forfeit an amount to or for the benefit of the other otherwise than as consideration
to the Owner for the provision of Generation Services, or 
 (ii) a debt or obligation of either Party payable to
the other is reduced or extinguished without payment on account of such debt or obligation 
 (the amount in
4.4(d)(i) or (ii) being referred to as the “Forfeiture Amount” for the purposes of this Section 4.4(d)), then the Party who is or was obliged in relation to the Forfeiture Amount shall pay to the other Party an amount in addition
to the Forfeiture Amount such that the other Party will be entitled to the full benefit of the Forfeiture Amount after taking into account the payment of GST that it is obligated to remit to the Crown with respect to the Forfeiture Amount and such
additional amount pursuant to Section 182(1) of the Excise Tax Act (Canada). 
 4.5 Pool Price 

(a) In the event that the Pool Price ceases to be published by the Power Pool or is otherwise unavailable, or the method
of determination of the Pool Price by the Power Pool is materially altered or the Pool Price is reasonably judged by the Parties no longer to represent a reasonable indication of the wholesale market price for electricity in Alberta, the Pool Price
shall be replaced by a substitute, which is agreed upon by the Parties, that represents a reasonable indication of the wholesale market price for electricity in Alberta and any required amendments to this Arrangement shall be made. 

(b) In the event that a substitute for the Pool Price has not been determined at the time it is required for the purpose
of making any calculation under this Arrangement, the Parties, shall, on an interim basis, use the last available values of the Rolling Average Monthly Off Peak Pool Price or Rolling Average Monthly Peak Pool Price, as the context requires, for the
purpose of making such calculations. Once the substitute for the Pool Price has been determined, the Parties shall promptly make whatever final adjustments to payments which had been made between them on an interim basis as are required to give
effect to such substitute for the Pool Price as of the effective date thereof. 
 4.6 Continuing Obligation to
Pay Monthly Capacity Payment 
 Except as expressly otherwise provided in this Arrangement, the Buyer shall not
be relieved of its obligation to pay to the Owner the Monthly Capacity Payment in accordance with the provisions of this Arrangement in any event or circumstance or for any reason whatsoever including a failure by the Owner to provide Generation
Services 
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 or the occurrence or continuance of any other default by the Owner in the
observance or performance of its obligations under this Arrangement. 
 ARTICLE 5 

OPERATION AND MAINTENANCE 
 5.1 Planned Outage Periods 
 (a) No later than 30
days prior to the start of the Effective Term and thereafter not later than 1st July of each Year, the Owner shall submit to the Buyer an initial schedule of the expected Planned Outage periods for the Units during each Year of the next Outage
Cycle (the “Initial Outage Plan”) all as reasonably determined by the Owner in accordance with Good Operating Practice. 
 (b) The Buyer may request that any Initial Outage Plan be revised and shall provide the Owner with its proposal for alternative Planned Outage periods of the same duration. 

(c) The Owner shall make reasonable efforts and act in good faith to accommodate the revisions to the Initial Outage Plan
requested by the Buyer. The Owner may, acting reasonably, propose to the Buyer any terms under which it would be prepared to accommodate the changes requested by the Buyer and the Buyer may accept or reject those terms. Prior to the submission of
the Final Outage Plan, the Owner shall discuss with the Buyer any proposed changes to the Initial Outage Plan. 

(d) The Owner shall submit to the Buyer, not later than the first day of the Effective Term (in respect of the Outage
Cycle commencing on the first Day of the Effective Term) or not later than 1st December (in respect of the all subsequent Outage Cycles), a revised form of the Initial Outage Plan (the “Final Outage Plan”) that incorporates any
changes that the Owner reasonably considers are necessary, including any changes agreed to between the Buyer and the Owner as described above. 
 (e) The Owner shall use all reasonable efforts to comply with the Planned Outage periods and activities specified for the first Year of each Final Outage Plan. The Owner shall use all
reasonable efforts to give the Buyer 30 days prior notice of the commencement of each Planned Outage. If it proves to be not reasonably possible to give the Buyer such notice, the Owner shall give the Buyer as much notice of the start of a Planned
Outage as it reasonably can. 
 (f) In the preparation of each Initial Outage Plan, the Owner shall make all
reasonable efforts to specify Planned Outage periods and activities for the first Year and second Year of the Outage Cycle that correspond with those, respectively, specified for the second Year and the third Year covered by the Final Outage Plan of
the preceding Outage Cycle. 
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 (g) Nothing in the requirements set out in this Section 5.1 shall relieve the
Owner of the obligation promptly to inform the Buyer of any material changes to the Outage Plan. 
 5.2
Interruption of Supply 
 The Owner shall have the right to interrupt the provision of Generation Services from
any Unit at any time to the extent necessary to safeguard life, property or the environment, or to the extent reasonably necessary to conduct preventative maintenance to safeguard life, property or the environment, whether such interruption is
caused by an event of Force Majeure or otherwise. To the extent and as soon as may be practicable, the Owner shall: (i) limit the duration of such interruptions, and (ii) other than upon the occurrence of an event of Force Majeure, give notice
to the Buyer of its intention to interrupt the provision of Generation Services. The provisions of Schedules D and H shall continue to apply in the event the Owner interrupts the provision of Generation Services pursuant to this Arrangement.

 5.3 Offers from Units 
 With respect to each Unit, the Buyer shall be entitled to offer the Capacity and Electricity available to it under this Arrangement to the Power Pool or other Permitted Person and the
System Support Services available to it under this Arrangement to the Transmission Administrator or other Permitted Person. Such offers and the provision of Electricity and System Support Services will be in accordance with Pool Rules, TA
Agreements, applicable Laws and the dispatch protocols set forth in Schedule J. 
 5.4 Suspension of Transmission

 If any condition arises on the IES or any other relevant transmission or distribution network that has or may
have a serious adverse effect on any Unit, Plant or Generating Station, including the generation of harmonic frequencies, frequency fluctuations, voltage fluctuations, transmission system faults, or voltage or power factor levels outside those
permitted by TA Agreements or pursuant to any approved tariff of the Transmission Administrator, the Owner may suspend provision of Generation Services from any Unit in whole or in part until a reasonable period after the condition has subsided and
such shall constitute an event of Force Majeure under this Arrangement. 
 ARTICLE 6 

EFFECTIVE DATE AND TERM 
 6.1 Effective Date and Term 
 This Arrangement
shall be effective as of the Effective Date, and subject to any earlier termination in accordance with the provisions of this Arrangement, shall remain in effect 
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 until the end of the Effective Term and shall apply to the operation of a Unit
until the Unit Effective Term Completion Date for such Unit. 
 ARTICLE 7 

OBLIGATIONS 
 7.1 Connection 
 The Owner shall take all
reasonable steps to keep the Units connected to the IES at the Delivery Points at all times during the Effective Term and to provide Generation Services that comply, as to their electrical characteristics, with the operating rules and
interconnection standards required pursuant to any TA Agreements or pursuant to any approved tariff of the Transmission Administrator, and otherwise as required by applicable Laws. 

7.2 General Obligations 
 (a) Without limitation on, and in addition to, any of the specific obligations of the Owner hereunder, the Owner shall at all times during the Effective Term do all things necessary to
assure performance by it of its obligations herein, operate and maintain the Units and the Plant in accordance with Good Operating Practice so as to guard against diminutions and interruptions in the supply of Electricity and System Support Services
to the Buyer and shall cause such diminutions and interruptions to be terminated with all reasonable dispatch. Such actions by the Owner shall include entering into and maintaining any necessary TA Agreements and, in the usual and ordinary course,
complying with applicable Laws and refraining from doing anything or entering into any agreement or arrangement which could reasonably be expected to materially adversely affect the Owner’s ability to perform its obligations hereunder.

 (b) Without limitation on, and in addition to, any of the specific obligations of the Buyer hereunder, the
Buyer shall at all times during the Effective Term do all things necessary to assure performance by it of its obligations herein including entering into and maintaining any necessary TA Agreements and Pool Participant Agreements, and in the usual
and ordinary course, complying with applicable Laws and refraining from doing anything or entering into any agreement or arrangement which could reasonably be expected to materially adversely affect the Buyer’s ability to perform its
obligations hereunder. 
 7.3 Prudential Requirements of Buyer 

(a) Throughout the Effective Term, the Buyer shall maintain, to the reasonable satisfaction of the Owner, as continuing
security for its obligations to the Owner under this Arrangement, a bank guarantee, irrevocable letter of credit or other security in or for an amount equal to or greater than 2.5 times the amount defined in Section 7.3(b). 

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 (b) In respect of each six (6) Month period starting on the 1st of January and
the 1st of July respectively of each Year, other than the first such six (6) Month period of the Effective Term, the amount referenced in Section 7.3(a) shall be determined as the highest Total Monthly Payment amount (calculated on the
basis that all Units had been available at their Target Availability, had been dispatched and operated at 90% of this level and one cold Start Up of each Unit had been performed) that would have been due to the Owner from the Buyer in respect of any
of the previous six (6) Months. For the first six (6) Months of the Effective Term, the amount referenced in Section 7.3(a) shall be determined as an estimate of the Total Monthly Payment amount (calculated on the basis that all Units
will be available at their Target Availability, will be dispatched and operated at 90% of this level and one cold Start Up of each Unit will be performed) in respect of the first Month of the Effective Term. 

(c) In the event that the Buyer is required to replace, or desires to replace, any bank guarantee, irrevocable letter of
credit or other security referred to in Section 7.3(a), or in the event that any such bank guarantee, irrevocable letter of credit, or other security is due to expire, the Buyer shall replace such bank guarantee, irrevocable letter of credit or
other security in accordance with the reasonable direction of the Owner such that the Owner’s risk shall not be increased as a result of the replacement of any such bank guarantee, irrevocable letter of credit, or other security, or the
mechanism pursuant to which such replacement is carried out. In the event that the Buyer has not demonstrated to the reasonable satisfaction of the Owner within five (5) Business Days of the date that any existing bank guarantee, irrevocable
letter of credit or other security is to expire, that arrangements for its renewal or replacement have been made, the Owner shall be entitled to call upon such bank guarantee, irrevocable letter of credit or other security and shall be entitled to
hold the proceeds of same as replacement security in a segregated account until such time as the Buyer has renewed or replaced such bank guarantee, irrevocable letter of credit or other security to the reasonable satisfaction of the Owner at which
time the Owner shall return such proceeds to the Buyer unless the Buyer has defaulted in making payment to the Owner in which case the Owner may use such proceeds to satisfy the indebtedness of the Buyer to it. 

7.4 Cost Savings 
 (a) If, during the Effective Term of this Arrangement, a decision is taken that the Whitewood Mine should be closed, either the Owner or the Buyer may, within 60 days of such decision,
request the commissioning of an independent study (the “Mine Study”) to be carried out with respect to the potential saving that could be realized from the deployment of the Marion 8200 Dragline (together with its associated equipment),
presently located at the Whitewood Mine, at the Highvale Mine. 
 (b) The other Party may agree on the
possibility and level (if positive) of cost savings, in which case the proposed changes shall be implemented and the Parties 
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 shall be compensated as set out hereunder. Lacking such agreement, the study the
Mine Study shall be commissioned and undertaken by an independent and reputable mining engineering consultant, generally accepted as skilled in the area of coal mining equipment deployment, agreed to by both Parties. The Mine Study shall provide an
ex ante forecast of all annual fixed (those costs which are constant regardless of the level of coal production) and variable (those costs which vary with the level of coal production) cost savings that would be expected to be achieved by the
deployment of the Marion 8200 Dragline at the Highvale Mine for each Year remaining in the Arrangement at the time the Mine Study is undertaken. An indexation mechanism shall be determined for the fixed coal costs and the variable coal costs set out
in the Mine Study. All cost savings would be calculated using then existing costs as the base numbers. In calculating such savings, the Mine Study shall incorporate a forecast of total coal production at the Highvale Mine in each Year then remaining
in the term of the Arrangement, such forecast to be developed by agreement or a mutually acceptable independent expert generally accepted as skilled in the area of coal production. 

(c) The Parties shall co-operate in the carrying out of the Mine Study and take all necessary reasonable steps to ensure
that it is completed in a timely way. 
 (d) In the event that no potential savings are identified by the Mine
Study or any savings which are identified are not material in the opinion of the consultant preparing the Mine Study, the full cost of the Mine Study shall be borne by the Party which requested it but in all other cases the Mine Study shall be paid
for by the Owner and the first call on any savings in mining costs shall be used to pay the Owner’s costs in respect of the Mine Study. 
 (e) If the forecast savings are material, they shall be shared equally by the Owner, as to one half, and the group consisting of each buyer or holder of a power purchase arrangement,
financial instrument or financial settlement pursuant to Part 4.1 of the Act with respect to the Keephills plant and the Sundance plant, or any part thereof, as to the other half, using the ex-ante forecasts of fixed cost savings and variable cost
savings contained in the Mine Study and not the actual results achieved in each Year. Each such buyer’s or holder’s share shall be pro-rata to the sum of all of its Deemed Annual Coal Consumption (ACUuy), as determined in Schedule E in
respect of the latest Year for which such values have been determined or, in respect of the first Year of the Effective Term, the values of ACUuy that would have been determined if the Units were dispatch at their Target Availabailities (TAuy), all
calculated in accordance with the power purchaser arrangement, financial instrument or financial settlement applicable to such buyer or holder 
 (f) At the commencement of each Year following the release of the Mine Study, the Owner shall prepare a bona fide estimate of the total cost savings which are expected for such Year and
provide such figure to the Buyer. The Buyer shall thereupon be entitled to deduct its proportionate share of such amount by way of 12 equal installments from each of the monthly payments it makes to the Owner 

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 in such Year. Within 60 days after the end of such Year, the Owner shall calculate
the total cost savings in accordance with the mechanism set out in Section 7.4(g) and whatever adjustment is required so that the Parties shall share those total cost savings as set out in Section 7.4(e), shall be paid forthwith by the
Party owing such adjustment payment. 
 (g) The mechanism for calculating the total cost savings for a Year is as
follows: 
 (i) The quantum of the fixed costs savings for such Year shall be equal to the ex-ante forecast of
fixed savings identified in the Mine Study for such Year. 
 (ii) The quantum of the variable cost savings for
such Year shall be calculated by adjusting the quantum of the ex-ante forecast identified in the Mine Study for such Year by the following formula: 
 variable cost savings = quantum of ex ante variable forecast of cost savings x (Actual production/Expected production) 

where: 
 Actual production = the actual coal production for such Year (expressed in tonnes); and 
 Expected production = the coal production for such Year as set out in the Mine Study (expressed in tonnes). 
 (iii) The fixed cost savings determined in accordance with Section 7.4(g)(i) shall be escalated to such Year using the same indexation mechanism determined for the fixed cost savings
in the Mine Study. The variable cost savings determined in accordance with Section 7.4(g)(ii) shall be escalated to such Year using the same indexation mechanism as determined for the variable coal costs in the Mine Study. 

(iv) The sum of the fixed cost savings and variable cost savings, as escalated in accordance with
Section 7.4(g)(iii), equals the total cost savings for the Year. 
 ARTICLE 8 COSTS 

8.1 Change in Costs 
 In the event of a change to any Pass Through Cost, the Owner shall provide the Buyer with written evidence of such change. 

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 8.2 Owner’s Obligation 

The Owner shall use reasonable efforts to obtain the lowest possible cost, with respect to any Pass Through Cost items,
having regard to Good Operating Practice. 
 ARTICLE 9 INSURANCE 

9.1 Insurance Coverage 
 (a) The Owner shall, at all times during the Effective Term, hold property (including boiler and machinery) insurance and commercial general liability insurance in respect of the Units and
the Plant. Notwithstanding the requirements of Section 8.2, the Owner shall make all reasonable efforts to procure such insurance on the best financial terms available to it having regard to the totality of its insurance requirements for all
its business operations. The terms in respect of, but not limited to, exclusions and coverage limits of the insurance coverage that the Owner is required to hold pursuant to this Section 9.1, shall not be materially different in terms of
coverage or exclusions to those in the policies held by the Owner in force as at 9 July 1999, with the exceptions that: 
 (i) the deductible with respect to each property damage occurrence shall be not less than $250,000 (indexed in respect of each year of the Effective Term by the year over year change in
the Consumer Price Index taking the value published in respect of December 1998 as a base value); and 
 (ii) the
insurance coverage limits applicable in each year shall be indexed by the year over year change in the Consumer Price Index taking the value published in respect of December 1998 as a base value. 

(b) The annual premiums incurred by the Owner in respect of such insurance coverage shall be allocated to each Unit in
accordance with the provisions of this Section 9.1. 
 (c) Not later than each anniversary of the first day
of the Effective Term, the Owner shall, acting reasonably, as part of its obligation to determine the Monthly Capacity Payment in accordance with Schedule C, determine the total insurance premiums that are to be allocated to all of the units (other
than hydro units) it owns that: 
 (i) were subject to a power purchase arrangement or financial settlement
pursuant to Part 4.1 of the Act, as at the first day of the Effective Term; and 
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 (ii) have not been decommissioned (whether or not any power purchase arrangement or
financial settlement pursuant to Part 4.1 of the Act is still in effect with respect to these units). 
 (d) The
units identified in (c) above are herein defined as the “Candidate Units”. Each of the Units shall be allocated a pro-rata share of the insurance premiums referenced in 9.1(c) above based upon its Committed Capacity as a proportion of the
committed capacity (as defined in the power purchase arrangement or financial settlement pursuant to Part 4.1 of the Act) of all of the Candidate Units. For the purposes of this calculation, a Candidate Unit in respect of which no power purchase
arrangement or financial settlement is in effect at the time such calculation is made shall be considered to have a committed capacity equal to the committed capacity that it had as at the day before such power purchase arrangement or financial
settlement ceased to apply to that unit. The pro-rata share of the insurance premiums for each of the Units as calculated above shall be incorporated into the Monthly Capacity Payment in accordance with Schedule C. 

(e) In the event that the insurance specified in Section 9.1(a) is not available, the terms (including those with respect
to exclusions, limits, and deductibles) of available insurance are materially different from those specified in Section 9.1(a) or any circumstance has changed which reasonably alters the need for the type, level or terms of the coverage specified in
Section 9.1(a), the Owner may, acting reasonably and in accordance with Good Operating Practice, modify the type, level or terms of the insurance coverage to be held by the Owner with respect to the Units and the Plant and the provisions of this
Section 9.1 shall apply mutatis mutandis. 
 (f) The Owner shall provide the Buyer or the Balancing Pool with
certificates of insurance evidencing the insurance required by this Section 9.1 as the Buyer or the Balancing Pool may from time to time reasonably request. 
 9.2 Insurance Proceeds 
 If a Unit is totally or
partially destroyed and if the Owner is required pursuant to the terms of Section 15.1 to repair, replace, rebuild or restore the Unit, the Owner shall use the proceeds of the insurance referred to in Section 9.1 together with such other amounts as
may be necessary to meet such obligations. 
 ARTICLE 10 MEASUREMENT 

10.1 Installation of Meters 
 Throughout the Effective Term, the Owner shall provide for the operation and maintenance of such measuring equipment, devices and materials (“Measuring Equipment”) as are
required to measure Electricity delivered to the Buyer, all in 
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 accordance with Good Operating Practice, all applicable Laws (unless the Owner is
relieved of some or all of its obligations pursuant to any Law by the Governmental Authority responsible for the administration of such Law) and as reasonably approved by the Buyer. The location of such Measuring Equipment will be as shown on the
diagrams in Schedule A or such other place as reasonably determined by the Owner, from time to time, after notice to the Buyer. All meters shall be sealed in an approved fashion by the Owner. The Owner shall give the Buyer reasonable notice of, and
the Buyer shall have the right to observe, any such application of seals. No seals shall be applied in the absence of the Buyer unless the aforesaid reasonable notice has been given to the Buyer. 

10.2 Inspection of Meters 
 The Buyer shall be granted reasonable access during normal business hours to inspect or read the Measuring Equipment. 

10.3 Testing of Meters 
 (a) The testing, calibration, adjustment, and, if necessary, replacement of the Measuring Equipment pursuant to this Article 10 shall be carried out by the Owner, at its expense, in
accordance with Good Operating Practice and all applicable Laws and in any case at least once every 18 Months. The Owner shall give the Buyer reasonable notice of, and the Buyer shall have the right to observe, any such testing, calibration, and
adjustment. In no event and at no time shall any seals on any meters be broken in the absence of the Buyer unless the reasonable notice aforesaid has been given to the Buyer. The Owner shall provide to the Buyer written records of the results of any
such test within fifteen (15) Days of the completion of the test. 
 (b) If at any time, and from time to time,
the Buyer provides the Owner with a request in writing that the Owner verify that the accuracy of the Measuring Equipment is within the acceptable margins of error set out in Schedule A (or, if not set out therein, the acceptable margins of error
required by the applicable standards) and includes with that request evidence reasonably satisfactory to the Owner that the Measuring Equipment is potentially inaccurate: 
 (i) the Owner shall test the Measuring Equipment; 

(ii) if upon testing the Measuring Equipment is found to be true and accurate within the acceptable margins of error set
out in Schedule A (or, if not set out therein, the acceptable margins of error required by the applicable standards), the Buyer shall reimburse the Owner for the cost of such testing; if such Measuring Equipment is not found to be true and accurate
within such acceptable margins of error, the Owner, at its expense, shall calibrate, adjust or replace such Measuring Equipment, as determined by the Owner, and shall bear the costs of such testing; and 

(iii) the Buyer and the Owner shall co-operate to allow the Owner to operate the Units in a manner that facilitates the
testing. 
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 (c) The Owner’s obligations under Section 10.3(b)(i) are without limitation to
the Owner’s entitlement to verify the Measuring Equipment at any time and from time to time on its own initiative and at its own cost. 
 (d) If, as a result of any testing conducted pursuant to Sections 10.3(b) or 10.3(c) the Measuring Equipment is not found to be true and accurate within the acceptable margins of error set
forth in Section 10.3(b)(ii), the Parties shall endeavor to reach an agreement as to the estimated period of inaccurate measurement, the amount of Electricity delivered during such period and as to any consequent adjustment of accounts required
between the Parties, and any such adjustments shall bear interest at the Interest Rate for such period of inaccurate measurement and until paid. Any adjustment of accounts shall only be given effect to if, and to the extent that, the Buyer is
required to adjust accounts in respect of the same inaccuracies with the Power Pool or Transmission Administrator. The Buyer shall promptly determine and advise the Owner if the same inaccuracies exist in relation to the Power Pool or the
Transmission Administrator. At the request of the Owner, the Buyer shall expeditiously and diligently pursue an adjustment of accounts in respect of any inaccuracies with the Power Pool or the Transmission Administrator, as the case may be.

 10.4 Pool Reports 
 Throughout the Effective Term, the Buyer shall authorize the Pool Administrator to issue to the Owner in respect of each Production Period a version of the draft Pool Statement and the
final Pool Statement (both as defined in the Pool Rules and in accordance with the dates laid down in the Pool Rules) in respect of the Unit, save that the Pool Statements will give only the amount of electric energy supplied to or through the Pool
(which amount shall include any Direct Sales) in respect of the Unit (such amount being the Unit Net Generation) and the Pool Price. 
 ARTICLE 11 STATEMENTS AND PAYMENTS 
 11.1 Delivery
of Bills and Payments 
 For each Month during the Effective Term, the Owner shall prepare and render to the
Buyer the Metering and Operational Statement, the Monthly Billing Background Statement, and the Monthly Billing Financial Statement for such Month. The Owner shall issue a preliminary Monthly Billing Statement no later than the later of ten (10)
Days after the end of such Month or three (3) Business Days after the Pool Administrator has delivered a draft Pool Statement to the Owner. The Owner shall issue a final Monthly Billing Statement no later than the later of fifteen (15) Days after
the end of such Month or three (3) Business Days after the Pool Administrator has delivered a final Pool Statement to the Owner under the Pool Rules for the preceding Month. If either of the Pool Statements referenced in this Section 11.1 ceases to
be published then, in respect of 
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 the Monthly Billing Statement for which the draft Pool Statement ceases to be
available, the issue dates shall be no later than ten (10) Days after the end of such Month (for a preliminary Monthly Billing Statement) and no later than fifteen (15) Days after the end of such Month (for a final Monthly Billing Statement).

 11.2 Contents of the Bill 
 The Monthly Billing Statements shall, set forth the information for the Month during the Effective Term to which it pertains as defined in Schedule K together with such other information
as the Buyer reasonably requires to verify the statements. 
 11.3 Payment Date 

The Parties agree that the total amount payable in the Monthly Billing Statements shall be due and payable by the Buyer or
the Owner, as the case may be, not later than the Pool Settlement Date (or, should such date cease to be published, the 20th Business Day following the end of the Month), and in the event the total amount payable is not paid in full by that date the
balance of the total amount payable shall bear interest from and after that date at the Default Interest Rate, until paid. Payments due and owing hereunder shall be paid by wire transfer or electronic funds transfer to a bank account designated by
the Party to receive such payments. Payment shall be made within the time set out in this Section 11.3 notwithstanding any dispute between the Parties. 
 11.4 Error in Billing Statement 
 In the event that
an error is found in any Monthly Billing Statement rendered, the necessary adjustment, together with interest on the amount of such adjustment at the Interest Rate, shall be made in the next Monthly Billing Statement. 

11.5 Pool Restatements 
 In the event that an error is found in any Pool Statement rendered, the necessary adjustment, together with interest on the amount of such adjustment at the Interest Rate, shall be made in
the next Monthly Billing Statement. 
 11.6 Pool Statement Disputes 

Subject to the Buyer’s obligation to make payment in Section 11.3, all payments between the Parties shall be adjusted
as and when necessary, together with interest thereon at the Interest Rate whenever it is appropriate to do so having regard to the resolution of any disputes between the Buyer and the Power Pool relating to any Pool Statement. 

11.7 Participation by Owner 
 In the event of a dispute between the Buyer and the Power Pool relating to the Pool Statements that may affect the amount payable by one Party to the other Party under this Arrangement,
the Buyer shall take all reasonable steps to allow the Owner to participate in the resolution of any such dispute, and the Buyer shall not agree to resolve such 
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 dispute without the prior agreement of the Owner (such agreement not to be
unreasonably withheld). 
 11.8 Annual Capacity Statement 

Each Year, as soon as is reasonably practical, the Owner shall prepare and deliver to the Buyer the Annual Capacity
Statement. 
 ARTICLE 12 OPERATING CHARACTERISTICS 

12.1 Changes in Operating Characteristics 
 All changes to the Operating Characteristics of the Units shall be communicated by the Owner to the Buyer in accordance with Schedule H. Changes to such Operating Characteristics (other
than in respect of a Settlement Period in which a Party’s obligation to perform or comply with an obligation under this Arrangement with respect to the Operating Characteristics is suspended pursuant to Section 14.1 or Section 2.7) shall give
rise to the payment to the Buyer by the Owner of the amounts determined in accordance with the provisions of Schedule H. 
 ARTICLE 13 LIABILITY AND INDEMNIFICATION 13.1 Indemnification 
 (a) Each Party (each an “Indemnitor”) shall indemnify and hold harmless the other Party and such other Party’s Affiliates, directors, officers, partners, employees,
contractors, subcontractors, agents and representatives thereof (individually and collectively called an “Indemnitee”) from and against all losses, damages and liabilities suffered by the Indemnitee and all judgments, fines, penalties,
charges, settlement amounts, costs, expenses and reasonable legal fees (on a solicitor and own client basis, including reasonable disbursements) incurred by the Indemnitee in connection with any causes of action, action, claim, suit, inquiry,
proceeding, investigation or appeal therefrom, arising in connection with the acts or omissions to act of such Indemnitor which are a result of such Indemnitor’s fault, negligence, or breach of its obligations under this Arrangement.

 (b) In the event that any Indemnitee desires to assert its right to indemnification from an Indemnitor
required to indemnify such Indemnitee under this Section 13.1, the Indemnitee shall give the Indemnitor prompt notice of the claim giving rise thereto (a “Claim”), which shall describe the Claim in reasonable detail and shall indicate the
estimated amount, if practicable, of the indemnifiable loss that has been or may be sustained by the Indemnitee. The failure to promptly notify the 
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 Indemnitor hereunder shall not relieve the Indemnitor of its obligations hereunder,
except to the extent that the Indemnitor is actually and materially prejudiced by the failure to so notify promptly. 
 (c) The Indemnitor shall have the right to participate in or, by giving written notice to the Indemnitee to elect to assume the defence of a Claim in the manner provided in this Section
13.1 at the Indemnitor’s own expense and by the Indemnitor’s own counsel (reasonably satisfactory to the Indemnitee), and the Indemnitee will cooperate in good faith in such defence. 

(d) In the event the Indemnitor desires to assume the defence of a Claim, it shall deliver to the Indemnitee written
notice of its election within 30 Days following the Indemnitor’s receipt of the Indemnitee’s notice of such Claim. Until such time as the Indemnitee shall have received such notice of election, it shall be free to defend such Claim in any
reasonable manner it shall see fit and in any event shall take all actions necessary to preserve its rights to object to or defend against such Claim and shall not make any admission of liability regarding or settle or compromise such Claim. If the
Indemnitor elects to assume such defence, it shall promptly reimburse the Indemnitee for all reasonable expenses theretofore incurred by it in connection with such Claim but it shall not be liable for any legal expenses incurred by the Indemnitee in
connection with the defence thereof subsequent to the time the Indemnitor commences to defend such Claim. 
 (e)
Without the prior consent of the Indemnitee, the Indemnitor shall not make any admission of liability regarding or enter into any settlement or compromise of or compromise any Claim which would lead to liability or create any financial or other
obligation on the part of the Indemnitee for which the Indemnitee is not entitled to full indemnification hereunder or for which the Indemnitee has not been fully released and discharged from further liability or obligations. Similarly, the
Indemnitee shall not make any admission of liability regarding or settle or compromise such Claim without the prior consent of the Indemnitor. If a firm offer is made to settle a Claim without leading to liability or the creation of a financial or
other obligation of the part of the Indemnitee for which the Indemnitee is not entitled to full indemnification hereunder or for which the Indemnitee has not been fully released and discharged from further liability or obligations, and the
Indemnitor desires to accept and agree to such offer, the Indemnitor shall give written notice to the Indemnitee to that effect. If the Indemnitee fails to consent to such firm offer within 5 Days after receipt of such notice or such shorter period
as may be required by the offer to settle, the 
 Indemnitor may continue to contest or defend such Claim and, in
such event, the maximum liability of the Indemnitor in relation to such Claim shall be the amount of such settlement offer, plus reasonable costs and expenses paid or incurred by the Indemnitee up to the date of such notice. 

(f) The Indemnitee shall use all reasonable efforts to make available to the Indemnitor or its representatives all books,
records, documents and other materials and shall use all reasonable efforts to provide access to its employees 

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 and make such employees available as witnesses as reasonably required by the
Indemnitor for its use in defending any Claim and shall otherwise co-operate to the fullest extent reasonable with the Indemnitor in the defence of such Claim. The Indemnitor shall be responsible for all reasonable expenses associated with making
such books, records, documents, materials, employees and witnesses available to the Indemnitor or its representatives. 
 (g) The right of any Indemnitee to the indemnification provided herein shall be cumulative of, and in addition to, any and all rights to which such Indemnitee may otherwise be entitled by
contract or as a matter of law or equity and shall extend to its or his heirs, successors, assigns and legal representatives. 
 (h) If the Indemnitor has undertaken the defence of a Claim and: 
 (i) if there is a reasonable expectation that such Claim may materially and adversely affect the Indemnitee other than as a result of money damages or other money payments, or the
Indemnitee or Indemnitees may have legal defences available to it or them that are different from or additional to the defences available to the Indemnitor; then the Indemnitee shall have the right, at its own cost and expense, to defend such Claim;
and 
 (ii) if the Indemnitor shall not have employed counsel reasonably satisfactory to the Indemnitee, the
Indemnitee shall nevertheless have the right, at its own cost and expense, to defend such Claim. 
 13.2
Consequential Loss 
 Notwithstanding any other provision of this Arrangement, neither Party shall be liable to
the other Party or its Affiliates, directors, officers, partners, employees, contractors, subcontractors, agents and representatives thereof for any reason (including negligence on the part of the first Party or any Person for whose acts it is
responsible, and howsoever a head of damage may be formulated) in respect of any consequential or indirect damages of any nature whatsoever including loss of use, loss of revenue, loss of profit, loss of contract or loss of goodwill or any other
loss or damage of an indirect or consequential nature suffered by the other Party or its Affiliates, directors, officers, partners, employees, contractors, subcontractors, agents and representatives thereof in connection with this Arrangement other
than as specifically provided for in Schedules D, H and K to this Arrangement. 
 13.3 Compensation for Failure
to Provide Generation Services 
 The Buyer shall be fully compensated for any failure by the Owner for any
reason whatsoever to provide Generation Services to the Buyer in accordance with this Arrangement, including any degradation whatsoever in the Committed Operating Characteristics of the Units for any reason, through the Monthly Incentive Payments
and the Monthly Operating Characteristics Penalty Payments. Accordingly, payment of the Monthly Incentive Payment and the Monthly Operating Characteristics Penalty Payment shall be the sole and exclusive remedy for any such failure by the Owner and
the Buyer 
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 shall not be entitled to make any other claim against the Owner including a claim
under Section 13.1, and shall not have any other remedy at law or in equity, for any losses, costs, expenses, damages or other liabilities of any nature or kind that may be incurred or suffered by the Buyer in connection with any such failure, and
notwithstanding any other provision of this Arrangement, the Owner shall not be in default under this Arrangement in connection with any such failure unless such failure results from the Owner’s willful act or omission. 

13.4 Duty to Mitigate 
 Each Party has a duty to mitigate damages and shall use all reasonable efforts to minimize any losses, costs, expenses, damages or other liabilities it may incur as a result of the other
Party’s performance or non-performance of this Arrangement, but for greater certainty, neither Party shall have any duty to mitigate damages or losses for which this Arrangement provides specific compensation by way of the Monthly Incentive
Payments, Monthly Operating Characteristics Penalty Payments or any Termination Payments unless otherwise stated. 
 ARTICLE 14 FORCE MAJEURE 
 14.1 Relief for Force
Majeure 
 If either Party is unable, wholly or in part, to perform or comply with any obligation hereunder, and
if such inability shall have been occasioned by or as a consequence of any event of Force Majeure, the obligations of such Party, insofar only as its obligations are affected by the event of Force Majeure, shall be suspended for so long as the event
of Force Majeure continues to prevent the performance of or compliance with such obligation and for such time thereafter as such Party may reasonably require to fulfill such obligation. 

14.2 Notice and Efforts to Continue 
 If either Party relies on the occurrence of an event of Force Majeure as a basis for claiming suspension of an obligation under this Arrangement, such Party shall: 

(a) provide prompt notice to the other Party and the Balancing Pool of the event or condition being relied upon as an
event of Force Majeure, including its expected duration and the probable impact on the performance of or compliance with its obligations hereunder; 
 (b) exercise all reasonable efforts to continue to perform or comply with its obligations hereunder; 
 (c) exercise all reasonable efforts to mitigate or limit the effect of the event of Force Majeure; and 
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 (d) provide prompt notice to the other Party and the Balancing Pool upon the
cessation of the event of Force Majeure. 
 14.3 Labour Disturbances 

Notwithstanding any other provision of this Arrangement, the settlement of strikes, lockouts or other labour disputes or
industrial disturbances shall be entirely within the discretion of the Party involved therein and that Party may make settlement thereof at such time and on such terms and conditions as it may deem to be appropriate and the failure to make such a
settlement shall constitute a cause beyond the reasonable control of that Party. 
 14.4 Effect of Force Majeure

 During any period in which the Owner’s obligations to perform or comply with an obligation under this
Arrangement are suspended pursuant to Section 14.1, the Monthly Capacity Payment shall be reduced as provided for in Schedule C to reflect the availability of Committed Capacity of each Unit during such Month. The Owner shall be entitled to payment
from the Balancing Pool of the difference, if any, between the Provisional Capacity Payment and the Monthly Capacity Payment for such Month. 
 14.5 Buyer’s Force Majeure 
 During any event
existing on the IES which is caused by any event or occurrence of the character herein defined as constituting Force Majeure, and which renders the Buyer unable, in whole or in part, to take delivery of Electricity (and for the purposes of
calculations made in the Schedules to this Arrangement such an event shall be classified as an event of Force Majeure), the Monthly Capacity Payment for a Month shall be reduced as provided for in Schedule C to reflect such inability of the Buyer
and the provisions of Section 14.4 shall apply mutatis mutandis. 
 14.6 Termination for Force Majeure

 Subject to Section 15.4, but notwithstanding any other provision of this Arrangement, if an event of Force
Majeure relieves the Owner of all or substantially all its obligations to make available Committed Capacity or to deliver Electricity and System Support Services from any Unit hereunder: 

(a) for any period of six (6) consecutive Months; or 

(b) where both Parties agree that such Force Majeure event will have such an effect for six (6) consecutive months; or

 (c) where both Parties agree that such Force Majeure event will have such an effect beyond the end of the
Effective Term; 
 then the Buyer may terminate this Arrangement in whole but not in part. 

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 ARTICLE 15 DESTRUCTION OF UNIT 

15.1 Total or Partial Destruction 
 If any Unit or the Plant is totally or partially damaged or destroyed by any cause whatsoever, the Owner shall, notwithstanding any other provision of this Arrangement, promptly inform the
Buyer, in writing, of such event. In addition the Owner shall, as soon as it is reasonable inform the Buyer of the likely period for which such Unit or the Plant will be unavailable for operation. The Owner shall repair, replace, rebuild or restore
such Unit or the Plant with all reasonable diligence consistent with Good Operating Practice to at least as good condition or state of repair as it was prior to that damage or destruction; provided that if this Arrangement is terminated in whole or
in part under the terms of Sections 15.2 or 15.3, then the Owner shall not be obligated to repair, replace, rebuild or restore such Unit or the Plant. In the event that this Arrangement is not terminated in respect of such Unit, the Owner shall
regularly report to the Buyer, in writing, of the progress of the repair work, including an estimate of when the work will be completed . 
 15.2 Owner’s Termination for Destruction 
 (a)
If any Unit or the Plant identified under the terms of Section 15.1 is damaged or destroyed to such an extent that a Unit or the Plant is incapable of generating Electricity and the Owner reasonably determines, after taking into account the age and
condition of such Unit or the Plant, that such Unit or the Plant, as the case may be, cannot be economically repaired, replaced, rebuilt or restored (taking into account both the Owner’s and the Buyer’s expected future income from the
repaired, replaced, rebuilt or restored Unit or Plant and the cost thereof, net of any insurance proceeds), it shall, by giving written notice to the Buyer and the Balancing Pool within sixty (60) Days after such damage or destruction has occurred,
inform the Buyer and the Balancing Pool of the Owner’s determination and seek the Buyer’s agreement to this determination. Termination in respect of less than the whole Plant shall additionally require the agreement of the Balancing Pool
if the Balancing Pool is to pay a termination amount in accordance with Schedule L. 
 (b) If the Buyer and, if
the Balancing Pool’s agreement is required, the Balancing Pool agree with the Owner’s determination or fail to dispute the determination within ten (10) Business Days after notice of the determination is given, this Arrangement will
immediately terminate in respect of such Unit or the Plant as the case may be. 
 (c) If the Buyer (or, as the
case may be, the Balancing Pool) disputes the Owner’s determination within such ten (10) Business Days, the dispute shall be resolved in accordance with Article 19 (which determination shall be binding upon the Balancing Pool in respect of
termination for less than all of the Units). 
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 (d) If a dispute arises between the Owner and the Balancing Pool with respect to
the Owner’s determination to terminate and it is determined pursuant to Article 19, taking into account the factors referred to in this Section 15.2, that such Unit or Units, as the case may be, can be economically repaired, replaced, rebuilt
or restored, the Owner, by way of notice to the Buyer and the Balancing Pool (within ten (10) Days of resolution of such dispute pursuant to Article 19), shall have the opportunity to withdraw its determination with respect to less than all of the
Units in which case this Arrangement will not terminate. 
 (e) If it is determined pursuant to Article 19,
taking into account the factors referred to in this Section 15.2, that such Unit or the Plant, as the case may be, cannot be economically repaired, replaced, rebuilt or restored, this Arrangement shall immediately terminate in respect of such Unit
or the Plant, as the case may be. 
 15.3 Buyer’s Termination for Destruction 

In respect of any Unit or the Plant identified under the terms of Section 15.1 the Buyer may terminate this Arrangement in
whole but not in part: 
 (a) by giving written notice to the Owner within thirty (30) Days after such damage or
destruction has occurred, if it reasonably expects that the Unit or Plant will be incapable of generating Electricity either for a date not less than six (6) Months from the date damage or destruction or for the balance of the Effective Term; or

 (b) if a period of six (6) Months has elapsed since the date of damage or destruction and the Unit or Plant is
not fully or substantially operational and the Buyer has, by having given written notice to the Owner within thirty (30) Days after such damage or destruction has occurred, informed the Owner of the Buyer’s desire to so terminate under the
terms of this Section 15.3.(b). 
 15.4 Termination Rights 

If any Unit or the Plant is damaged or destroyed, whether or not due to an event of Force Majeure, the Buyer’s rights
with respect to termination are set out in this Article 15, and the provisions of Section 14.6 shall not apply. 

15.5 Rights and Obligations following Termination for Destruction 

The Parties acknowledge that any termination pursuant to Sections 15.2 and 15.3 shall not affect any rights or obligations
which may have accrued prior to such termination and shall not affect the continuing obligations of each of the Parties hereunder. 
 15.6 Payments on Termination for Destruction 
 If
this Arrangement is terminated in respect of a Unit or all Units under this Article 15, then the payments among the Parties and the Balancing Pool shall be those determined according to the rules set out in Schedule L. Payment of such amount shall
fully compensate the Buyer for the termination of this Arrangement prior to the expiry of the 
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 Effective Term. Accordingly, payment of such amount shall be the sole and exclusive
remedy for any such termination and the Buyer shall not be entitled to make any claim against the Owner including a claim under Section 13.1, and shall not have any other remedy, at law or in equity, for any losses, costs, expenses, damages or other
liabilities of any nature or kind that may be incurred or suffered by the Buyer in connection with any such termination. 
 ARTICLE 16 OWNERSHIP 
 16.1 Plant and Units

 The Plant and the Units shall be and remain the sole and exclusive property of the Owner or its permitted
assignees pursuant to Article 18, and nothing in this Arrangement is intended to create, or shall create, in favour of the Buyer any legal or beneficial ownership or interest in the Units or in the Plant of any nature whatsoever. For the avoidance
of doubt, it is hereby agreed and declared that the provision of Generation Services confers only a right to such Generation Services upon and subject to the terms and conditions of this Arrangement. The Owner’s obligation to provide Generation
Services shall not constitute the dedication of any Unit or the Plant or any part thereof to the Buyer, and shall not confer upon the Buyer any rights or powers regarding the availability, operation, maintenance, repair or dispatch of the Unit or
the Plant save as expressly provided in this Arrangement. 
 16.2 No Partnership 

The rights, duties, obligations and liabilities of the Parties hereunder shall be separate and not joint or collective,
nor joint and several. Nothing contained herein shall be construed as creating a partnership, joint venture or association of any kind or as imposing upon either Party any partnership duty, obligation or liability to the other Party. 

ARTICLE 17 DEFAULT AND TERMINATION 17.1 Default 
 (a) If either Party is in material default in respect of any of its obligations under this Arrangement as listed in Sections 17.1(b) and 17.1(c), or is in default of its obligations to pay
any amount due to the other Party hereunder, then the other Party may, after giving not less than seven (7) Days prior written notice (either personally delivered or given by fax) of same, discontinue the performance of its obligations under this
Arrangement immediately upon the expiry of such notice period until such time as the Party in default is no longer in default in respect of any of such obligations, provided that in the case where such default cannot 

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 reasonably be remedied within such 7 Day notice period, the other Party shall not
be entitled to discontinue performance of its obligations under this Arrangement unless and until the Party in default fails to proceed within such 7 Day notice period and thereafter to expeditiously and diligently pursue remediation of the default
until it is no longer in default of such obligations. 
 (b) In respect of the Owner, the obligations referred to
in Section 17.1(a) are its obligations as defined in Section 2.3(a), Section 7.1 (except to the extent that the Owner is relieved of such obligation under Section 5.2 and Section 5.4) and Section 7.2(a) (in respect of
its obligations to enter into and maintain any necessary TA Agreements and, in the usual and ordinary course, comply with applicable Laws and to refrain from doing anything or entering into any agreement or arrangement which could reasonably be
expected to materially adversely affect its ability to perform its obligations hereunder). 
 (c) In respect of
the Buyer, the obligations referred to in Section 17.1(a) are its obligations as defined in Section 7.2(b) (in respect of its obligations to enter into and maintain any necessary TA Agreements and Pool Participant Agreements and, in the
usual and ordinary course, comply with applicable Laws and to refrain from doing anything or entering into any agreement or arrangement which could reasonably be expected to materially adversely affect its ability to perform its obligations
hereunder) and Section 7.3. 
 17.2 Effect of Discontinuance of Performance 

The discontinuance of the performance by a Party of any of its obligations pursuant to Section 17.1 shall:

 (a) be in addition to any other remedy available to it; 

(b) not relieve the other Party from performance of the provisions and conditions contained in this Arrangement;

 (c) not be or be deemed to be an abrogation or termination of this Arrangement by such Party; and 

(d) not affect the validity of the terms of this Arrangement. 

For greater certainty, in the case where the Buyer is in default, the Settlement Periods during discontinuance of
performance by the Owner pursuant to Section 17.1 shall be excluded from the Monthly Incentive Payment calculation as set out in Schedule D. 
 17.3 Termination 
 Either Party may, at its
discretion and without limitation to any other remedies it may have, immediately terminate this Arrangement upon giving the other Party written notice to that effect if: 
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 (a) the other Party substantially defaults in the performance of its material
obligations, other than payment obligations, under this Arrangement and does not remedy the same if reasonably remediable within 60 Days of having received written notice to do so or, if not reasonably remediable within such 60 Day period, fails to
commence within 60 Days to take steps to remedy such default and to thereafter proceed diligently and as expeditiously as reasonably possible to do so; or 
 (b) the other Party: 
 (i) is bankrupt or insolvent
or has committed or suffered any act of bankruptcy or insolvency 
 (ii) makes any general assignment for the
benefit of its creditors, enters into any arrangement with its creditors, or if any proceedings are commenced under the Companies’ Creditors Arrangement Act, R.S.C. 1985,c. C-36 or similar legislation, with respect to such other Party;

 (iii) is subject to proceedings for the appointment of a receiver, receiver/manager or trustee in respect of
its assets 
 (iv) is subject to proceedings for the dissolution, liquidation or winding-up of such other Party;
or 
 (v) is in default of its payment obligations under this Arrangement and does not remedy the same within
seven 7 days of having received written notice to do so. 
 Should either Party terminate this Arrangement under
the provisions of this Section 17.3, it shall be entitled to receive from the other Party a Termination Payment calculated in accordance with Schedule L. 
 17.4 Specific Termination by the Buyer 
 The Buyer,
at its discretion, may immediately terminate this Arrangement upon paying the Balancing Pool an early termination amount, calculated in accordance with Schedule L. 
 17.5 Compensation for Early Termination 
 A Party
that terminates this Arrangement under Section 17.3 shall be fully compensated for the termination of this Arrangement prior to the expiry of the Effective Term by the payments provided for in Section 17.3. Accordingly, payment of the
applicable Termination Payment shall be the sole and exclusive remedy for any such termination and the terminating Party shall not be entitled to make any claim against the other Party including a claim under Section 13.1, and shall not have
any other remedy, at law or in equity, for any losses, costs, expenses, damages or other liabilities of any nature or kind 
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 that may be incurred or suffered by the terminating Party in connection with any
such termination. 
 17.6 Effect of Termination 

Upon expiry of the Effective Term of this Arrangement or upon any termination of this Arrangement permitted hereunder, all
rights and benefits and all liabilities and obligations conferred or imposed upon the Parties by this Arrangement (save that for a termination under Article 15 of less than all of the Units, only to the extent of such termination) shall be
terminated; provided that expiration or termination of this Arrangement shall not affect any rights or obligations which may have accrued prior to such expiration or termination and shall not affect the continuing obligations of each of the Parties
hereunder. In particular but without limiting the generality of the foregoing, the provisions of Section 4.4(d), Section 9.2, Article 13, Article 19 and Article 20 shall survive any expiration or termination of this Arrangement.

 17.7 No Other Termination 
 Except as expressly provided for herein, this Arrangement shall not be terminated except in accordance with the Regulations. 

ARTICLE 18 ASSIGNMENT 
 18.1 Assignment 
 (a) The Buyer may assign this
Arrangement, in whole but not in part, to any Person who can satisfy all the Buyer’s obligations hereunder; and until such time as the assignee has demonstrated to the satisfaction of the Owner, acting reasonably, that it is capable of
satisfying all of the obligations of the Buyer hereunder and that it has satisfied the prudential requirements under Section 7.3 hereof, the Owner shall not be required to recognize such assignment, but once so recognized by the Owner, the
assignee shall be entitled to all rights and be bound by all the obligations of the Buyer hereunder as of the effective date of the assignment, and the Buyer shall no longer be entitled to any rights nor be bound by any obligations hereunder, other
than those rights or obligations arising or accruing prior to the effective date of the assignment. 
 (b) The
Owner may assign this Arrangement in whole, but not in part, to any Person who can satisfy the Owner’s obligations hereunder being assigned; and until such time as the assignee has demonstrated to the satisfaction of the Buyer, acting
reasonably, that it is capable of satisfying the obligations of the Owner hereunder being assigned, the Buyer shall not be required to recognize such assignment, but once so recognized by the Buyer, the assignee shall, to the extent of the
assignment, be entitled to all rights and be bound by all the obligations of the Owner hereunder as of the effective date of the assignment, and the Owner shall, 
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 to the extent of the assignment, no longer be entitled to the rights nor be bound
by the obligations hereunder, other than those rights or obligations arising or accruing prior to the effective date of the assignment. 
 (c) Notwithstanding Sections 18.1(a) and 18.1(b), either Party may assign, charge, pledge or hypothecate its rights hereunder to any Canadian chartered bank or other lending institution as
security for present or future indebtedness. The non-assigning Party shall execute and deliver such consents, acknowledgements, agreements and other assurances as such lending institution may require and as are acceptable to the non-assigning Party,
acting reasonably, in relation to the granting or enforcement of such security including the entitlement of the lender, its receiver or receiver and manager or any transferee of this Arrangement pursuant to such security to the rights, and the
obligation of the lender, its receiver or receiver and manager or such transferee to be bound by the obligations, of the assigning Party hereunder. 
 (d) Either Party may assign this Arrangement in whole, but not in part, to an Affiliate of such Party and the assignee shall be entitled to all rights and be bound by all the obligations
of the assigning Party hereunder as of the effective date of the assignment. Notwithstanding any assignment pursuant to this Section 18.1(d), the assigning Party shall not be released from its obligations hereunder and the assigning Party and
any such Affiliate shall be jointly and severally liable for all of such obligations of such Party unless the provisions of Sections 18.1(a) or 18.1(b) apply. 
 ARTICLE 19 DISPUTE RESOLUTION PROCEDURE 
 19.1
Dispute or Failure to Agree 
 Where this Arrangement requires the Parties to come to an agreement with respect
to any matter, the failure of the parties to come to such agreement within the time specified, or if no time is specified within a reasonable period, shall be deemed to be a dispute between the parties which shall be resolved in accordance with the
provisions of this Article 19. 
 19.2 Submission to Senior Management 

In the event of a dispute relating to this Arrangement arising, the Parties shall promptly enter into discussions and use
reasonable efforts in good faith to reach a reasonable and equitable resolution of the dispute. If the Parties are unable to resolve the dispute within five (5) Business Days of commencing such discussions, the matter shall be promptly referred
to a member of senior management of each of the Parties for resolution, who shall negotiate in good faith to reach a reasonable and equitable resolution of the issue. If such members of senior management of the Parties are unable to resolve the
dispute within five (5) Business Days of referral to them or such further time as the Parties may 

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 agree, then the Parties shall resolve the dispute in accordance with the remaining
provisions of this Article 19. 
 19.3 Litigation 

Either Party may commence litigation with respect to any question of law or the recovery of any liquidated damages arising
in relation to this Arrangement, within the limitation periods set out in the Limitation of Actions Act (Alberta), and any successor or replacement legislation. 
 19.4 Submission to Arbitration 
 Subject to
Section 19.3, all disputes with respect to this Arrangement shall, after the provisions of Section 19.2 have been followed, be forwarded to and resolved by binding arbitration in accordance with the Arbitration Act S.A. 1991, c.A-43.1 (the
“Arbitration Act”), by a board of arbitrators in accordance with the following provisions; 
 (a) Each
Party shall appoint its own arbitrator, who shall be qualified by education and training and have appropriate technical expertise with respect to the matter in dispute, within ten (10) Days after the expiry of the second five (5) Business
Day period referred to in Section 19.2 or such longer period agreed to by the Parties pursuant to Section 19.2. If either Party shall fail to appoint an arbitrator within such ten (10) Day period, then upon application by the Party
that has appointed an arbitrator, the second arbitrator shall be appointed by any Justice of the Court of Queen’s Bench of Alberta. The two arbitrators thus appointed shall appoint a third arbitrator, who shall be qualified by education and
training and have appropriate technical expertise with respect to the matter in dispute, within ten (10) Days of the appointment of the second arbitrator. If the two arbitrators shall fail to appoint the third arbitrator within such ten
(10) Day period, then upon application by either Party, the third arbitrator shall be appointed by any Justice of the Court of Queen’s Bench of Alberta; 
 (b) the board of arbitrators shall proceed promptly to determine the matters in issue and shall render its decision within thirty (30) Days from the appointment of the third
arbitrator, except where the Parties agree to a different period of time; 
 (c) the Parties consent to the
arbitration being conducted in Calgary, Alberta, or any other place mutually agreed upon, no later than fifteen (15) Days following the appointment of the third arbitrator, at which time the Parties shall present such evidence and witnesses as
they may choose, with or without counsel; 
 (d) the board of arbitrators shall have the discretion to shorten or
lengthen time frames for actions to be taken by either Party pursuant to this Arrangement with respect to matter which is the subject of arbitration before such board of arbitrators; 

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 (e) each Party shall be responsible for its own costs and shall share the costs
associated with the arbitration equally; provided that the board of arbitrators shall have the discretion to allocate costs in a different manner; 
 (f) except as expressly provided in this Arrangement, any majority decision by the board of arbitrators shall be final, binding and non-appealable. Any such decision may be filed in any
court of competent jurisdiction and may be enforced by either Party as a final judgment in such court. There shall be no grounds for appeal of any arbitration award hereunder; 
 (g) it shall be a condition of the appointment of any arbitrator that such arbitrator shall maintain in strict confidence all documents, the transcripts of the proceedings and other
materials and all information disclosed by or on behalf of the Parties and shall not use the same or allow the same to be used for any purpose collateral to such arbitration and, at the request of either Party that provided any documents or other
printed materials, shall return all originals and any copies of such documents and printed materials to such Party. Each arbitrator shall be responsible for ensuring that its officers, employees, representatives and consultants comply with the
obligation of confidentiality set forth in this Section 19.4; 
 (h) the board of arbitrators may make
rulings with respect to the production of documents, the ability of the Parties to call witnesses or any other procedural matter; and 
 (i) either Party may refer a question of law to a court of competent jurisdiction for final and binding determination notwithstanding that it may be part of a dispute before the board of
arbitrators. 
 19.5 Performance and Payments 

All performance required hereunder by the Parties and payment therefor under this Arrangement shall continue during the
dispute resolution proceedings contemplated by this Article 19, provided that in the case of any such proceedings pertaining to amounts payable under this Arrangement, any payments or reimbursements required as a result of the proceedings shall be
effective as of a date to be determined in such proceedings, and interest shall be paid by the Party required to make any such payment or reimbursement on the amount thereof at the Default Interest Rate from the date so determined until paid, and
the amount of the payment or reimbursement shall be specified by the Owner in the next Monthly Billing Statement rendered in accordance with Section 11.1. 
 INDEPENDENT ASSESSMENT TEAM 43 Final Version 

 

 
  
 Sundance C
Power Purchase Arrangement 
 ARTICLE 20 CONFIDENTIALITY 

20.1 Confidential Information 
 (a) Any and all information and knowledge relating to the Plant, the Units, the ownership or operation of the Plant and Units, and any and all information emanating from the other
Party’s business in any form that a Party may acquire under the terms of this Arrangement, or by virtue of the relationship between the Parties created by this Arrangement (collectively, “Confidential Information”), shall be
considered confidential and, except as permitted elsewhere in this Article 20, shall not be used, revealed or divulged to any other Person, or published in any manner whatsoever, without first obtaining the written consent of the other Party.

 (b) Notwithstanding the provisions of Section 20.1(a), a Party may reveal or divulge Confidential
Information: 
 (i) that is already in the public domain when disclosed to a Party or becomes, after having been
disclosed to a Party, generally available to the public through publication or otherwise unless the publication or other disclosure was made directly or indirectly by a Party in breach of this Arrangement; 

(ii) to its Affiliates and to its and their officers, directors, employees, agents or other representatives on a need to
know basis provided such Persons have agreed to maintain such Confidential Information in confidence; 
 (iii) as
required by the Pool Rules, TA Agreements or arrangements with the Transmission Administrator, applicable Laws, the orders or directions of tribunals having jurisdiction or stock exchange or clearing house requirements, provided that where
circumstances permit, and where such disclosure is not made in the ordinary course to such Persons, prior to any disclosure, the other Party shall be notified of any such proposed divulgence and the divulging Party shall at the other Party’s
request, take reasonable steps to allow the other Party to contest the requirement for disclosure or to obtain an order or ruling to preserve the confidentiality of such Confidential Information; 

(iv) as necessary in connection with any dispute resolution commenced pursuant to this Arrangement or any litigation
commenced in respect of this Arrangement; or 
 (v) in confidence, to the extent necessary, to any consultants,
financial institutions or advisors to such Party. 
 INDEPENDENT ASSESSMENT TEAM 44 Final Version 

 

 
  
 Sundance C
Power Purchase Arrangement 
 ARTICLE 21 GENERAL PROVISIONS 

21.1 Non-Waiver 
 No term or condition of this Arrangement can be waived by either Party. Forbearance by a Party in any regard whatsoever shall not constitute a waiver of the term or condition to be
performed by the other Party to which same may apply, and until complete performance by the other Party of said term or condition, either Party shall be entitled to invoke any remedy available to it under this Arrangement or by law or in equity
despite said forbearance. 
 21.2 Notices 

Any notice, statement, order, decision or other communication to be delivered or given by either Party must, unless
otherwise permitted, be in writing and shall be delivered, mailed or faxed to the address for service of notices for such Party. 
 Each Party shall advise the other by way of written notice to its registered office or principal place of business within Alberta of its address for service of notices, and in the event
that it fails to do so, such Party’s address for service of notices shall be its registered office or principal place of business within Alberta or any other business office. 

Either Party may give notice to the other Party in the manner herein provided of a change of address or designation of
individual. Any notice, statement, order, decision or communication personally delivered shall be deemed given when so delivered; any notice, statement, order, decision or communication faxed shall be deemed given on the next Business Day after
being faxed; and any notice, statement, order, decision or communication mailed shall be deemed to have been given on the third Business Day after being mailed by registered mail, provided if there is any disruption in postal service, they shall be
deemed to have been given and received on the day of actual delivery. 
 Any notice or other communication to be
delivered or given by either Party to the Balancing Pool shall be delivered or given at the principal place of business of the Balancing Pool within Alberta. 
 21.3 No Amendment 
 Except as expressly permitted
or required under this Arrangement, there shall be no amendments to this Arrangement. 
 21.4 Governing Law

 This Arrangement shall be governed by and construed in accordance with the laws in force in the Province of
Alberta and the courts of the Province of Alberta and all courts of 
 INDEPENDENT ASSESSMENT TEAM 45 Final
Version 

 

 
  
 Sundance C
Power Purchase Arrangement 
 appeal therefrom shall have exclusive jurisdiction with respect to the subject
matter of this Arrangement. 
 21.5 Remedies 

(a) All rights and remedies under this Arrangement are cumulative and, except as otherwise provided herein, are in
addition to other rights or remedies under this Arrangement or any applicable Laws. 
 (b) Each of the Parties to
this Arrangement may, subject to Article 19, sue and be sued in respect of this Arrangement and shall be entitled to all remedies it would be entitled to if this Arrangement were an agreement of the Parties. 

21.6 Effect 
 This Arrangement shall have effect in accordance with its terms and conditions and shall bind, and be enforceable between, the Parties and their successors and permitted assigns.

 21.7 Records 
 Each of the Parties to this Arrangement shall keep all records pertaining to this Arrangement for at least three (3) Years from the date any such record is made. 

21.8 Rights of the Balancing Pool 
 In any instance where the Balancing Pool may be required to make a payment to either Party, the Party which may receive such payment shall promptly inform the Balancing Pool of the
circumstances which may give rise to any such payment. With respect to any such payments and the surrounding circumstances as well as any matter requiring the agreement, confirmation or determination of the Balancing Pool, it shall, with respect to
the settlement of disputes that arise between it and the Owner or the Buyer, have rights and obligations under Article 19 as if it were a party to this Arrangement. 
 INDEPENDENT ASSESSMENT TEAM 46 Final Version 

 

 
  
 Sundance 5
Schedule A 
 SCHEDULE A - PLANT DESCRIPTION - SUNDANCE 5 

ARTICLE A1 PLANT GENERAL INFORMATION 
 A1.1 Plant General Information 
 a) Plant name:
Sundance Generating Station 
 b) Plant address: Site 4, Box 1, R. R. #1 

Duffield, Alberta TOE ONO 
 ARTICLE A2 UNIT SPECIFIC INFORMATION 
 A2.1 Unit
Specific Information 
 a) Unit designation: Sundance 5 

b) Unit Effective Term Completion Date: December 31, 2020 

c) Name Plate Capacity (MW): 353 
 d) Unit-specific Connection details: High side bushings of unit transformer 
 e) Unit-specific Metering details (including acceptable margins of metering error): POS Meter P310T5 
 See attached Sundance 310P Metering Schematic. 

Note adjustments may be required for cooling tower and mine power. 

INDEPENDENT ASSESSMENT TEAM Page 1 Final Version 

 

 
  
 Sundance 5
Schedule A 
 ARTICLE A3 ASSOCIATED FACILITIES 

A3.1 Associated Facilities 
 a) Description of Associated Facilities: 
 Cooling
Pond, 655 hectares Plant Stack, 155 meters 
 Cooling Towers, Helper, Counter Flow, Mechanical Draft 

Ash Plant 
 Lake water Facility 
 River Water Pump House

 Water Treatment Plant 
 ARTICLE A4 OTHER INFORMATION 
 A4.1 Other
Information 
 a) Non-Unit-specific connection details (only required if unit can send out electricity other than
through its unit transformer connection): None 
 b) Non-Unit-specific metering details (only required if unit
can send out electricity other than through its unit transformer connection): None 
 INDEPENDENT ASSESSMENT TEAM
Page 2 Final Version 

 

 
  
 Sundance 5
Schedule A 
 INDEPENDENT ASSESSMENT TEAM Page 3 Final Version 

 

 
  
 Sundance 6
Schedule A 
 SCHEDULE A - PLANT DESCRIPTION - SUNDANCE 6 

ARTICLE A1 
 PLANT GENERAL INFORMATION 
 A1.1 Plant General
Information 
 a) Plant name: Sundance Generating Station 

b) Plant address: Site 4, Box 1, R. R. #1 
 Duffield, Alberta TOE ONO 
 ARTICLE A2 

UNIT SPECIFIC INFORMATION 
 A2.1 Unit Specific Information 
 a) Unit
designation: Sundance 6 
 b) Unit Effective Term Completion Date: December 31, 2020 

c) Name Plate Capacity (MW): 357 
 d) Unit-specific Connection details: High side bushings of unit transformer 
 e) Unit-specific Metering details (including acceptable margins of metering error): POS Meter P310T6 
 See attached Sundance 310P Metering Schematic 

Note adjustments may be required for cooling tower and mine power. 

INDEPENDENT ASSESSMENT TEAM Page 1 Final Version 

 

 
  
 Sundance 6
Schedule A 
 ARTICLE A3 ASSOCIATED FACILITIES 

A3.1 Associated Facilities 
 a) Description of Associated Facilities: 
 Cooling
Pond, 655 hectares Plant Stack, 155 meters 
 Cooling Towers, Helper, Counter Flow, Mechanical Draft 

Ash Plant 
 Lake water Facility 
 River Water Pump House

 Water Treatment Plant 
 ARTICLE A4 
 OTHER INFORMATION 

A4.1 Other Information 
 a) Non-Unit-specific connection details (only required if unit can send out electricity other than through its unit transformer connection): None 

b) Non-Unit-specific metering details (only required if unit can send out electricity other than through its unit
transformer connection): None 
 INDEPENDENT ASSESSMENT TEAM Page 2 Final Version 

 

 
  
 Sundance 6
Schedule A 
 INDEPENDENT ASSESSMENT TEAM Page 3 Final Version 

 

 
  
 Sundance
5&6 Schedule B 
 SCHEDULE B - COMMITTED CAPACITY AND OPERATING CHARACTERISTICS 

ARTICLE B1 
 DEFINITIONS 
 Characteristic Definition Units

 Automatic Generation Control (AGC) 
 The capability of the Unit to be controlled remotely by the System Controller. 
 Yes/No 
 Automatic Voltage Regulation (AVR)

 The capability of a Unit to provide reactive power over a specified range. 

MVAr 
 Committed Capacity (CC) 
 The Committed Capacity of
the Unit. This may be different from the nameplate capacity and may vary seasonally. It is measured at the high voltage side of the step-up transformer. 
 MW 
 Minimum Down Time 

This is the minimum time that needs to pass before a Unit that has been desynchronized from the IES can begin to be
restarted. 
 Hours 
 Minimum Up Time 
 The minimum time that needs to
pass before a Unit that has been synchronized to the IES can be de-synchronized from the IES. 
 Hours

 Minimum Stable Generation 
 The minimum generation level that a Unit can be held at before it becomes unstable. 
 MW 
 Ramp Rate 

The rate of change in load per minute assuming that the Unit has already achieved its instructed dispatch capacity level.

 MW/min 
 Run Up Rate 
 The average rate at which the Unit is
able to increase output measured from the time that the Unit has completed its turbine heat soak and/or been synchronized to the IES, to the time that the Unit reaches its dispatched capacity level. 

MW/min 
 Run Up Rate (Cold) 
 The Run Up Rate assuming that
the Unit has been desynchronized for greater than 48 hours. 
 MW/min 

INDEPENDENT ASSESSMENT TEAM Page 1 Final Version 

 

 
  
 Sundance
5&6 Schedule B 
 Characteristic Definition Units 

Run Up Rate (Hot) 
 The Run Up Rate assuming that the Unit has been desynchronized for less than 8 hours. 
 MW/min 
 Run Up Rate (Warm) 

The Run Up Rate assuming that the Unit has been desynchronized for greater than 8 but less than 48 hours. 

MW/min 
 Spinning Reserve Capability 
 The maximum load
change available within 10 minutes of instruction and assuming that the Unit is dispatched above its Minimum Stable Generation level at all times. 
 MW 
 Start Time 

The time measured from the moment that the Buyer notifies the Owner that the Unit is to be started to the moment that the
Unit has completed its first turbine heat soak. 
 Hours 

Start Time (Cold) 
 The Start Time assuming that the Unit has been desynchronized for greater than 48 hours. 
 Hours 
 Start Time (Hot) 

The Start Time assuming that the Unit has been desynchronized for less than 8 hours. 

Hours 
 Start Time (Warm) 
 The Start Time assuming that
the Unit has been desynchronized for greater than 8 hours but less than 48 hours. 
 Hours 

ARTICLE B2 UNIT COMMITTED CAPACITY 
 B2.1 Seasonal Committed Capacity 
 Unit Committed
Capacity (MW) 
 Sundance 5 353 
 INDEPENDENT ASSESSMENT TEAM Page 2 Final Version 

 

 
  
 Sundance
5&6 Schedule B 
 Sundance 6 357 
 ARTICLE B3 
 UNIT CONTRACTED OPERATING
CHARACTERISTICS 
 B3.1 Start Time 
 Start Time (Cold) Start Time (Warm) Start Time (Hot) 
 (Hours) (Hours) (Hours) 
 Sundance 5 10 6 2

 Sundance 6 10 6 2 
 B3.2 Minimum Stable Generation 
 Unit Minimum
Stable Generation (MW) 
 Sundance 5 150 
 Sundance 6 150 
 B3.3 Run-Up Rate 

INDEPENDENT ASSESSMENT TEAM Page 3 Final Version 

 

 
  
 Sundance
5&6 Schedule B 
 Run Up Rate Cold (MW/min) Run Up Rate Warm (MW/min) Run Up Rate Hot (MW/min) 

Sundance 5 1.0 1.2 3.2 
 Sundance 6 1.0 1.2 3.2 
 B3.4 Ramp Rates

 Ramp Rate (MW/min) 
 Sundance 5 8 
 Sundance 6 8 

B3.5 Minimum Up Time 
 Minimum Up Time (Hours) 
 Sundance 5 4 

Sundance 6 4 
 INDEPENDENT ASSESSMENT TEAM Page 4 Final Version 

 

 
  
 Sundance
5&6 Schedule B 
 B3.6 Minimum Down Time 

Minimum Down Time (Hours) 
 Sundance 5 4 
 Sundance 6 4 

B3.7 Spinning Reserve Capability 
 Spinning Reserve Capability (MW) 
 Sundance 5 80

 Sundance 6 80 
 INDEPENDENT ASSESSMENT TEAM Page 5 Final Version 

 

 
  
 Sundance
5&6 Schedule B 
 B3.8 Automatic Generation Control (AGC) 

AGC (Yes/No) Range (MW) 
 Sundance 5 Yes 280 to 353 
 Sundance 6 Yes 280 to
357 
 B3.9 Automatic Voltage Regulation (AVR) 

Reactive Power Range (MVAr) 
 Sundance 5 +150 to -25 
 Sundance 6 +150 to -30

 B3.10 MW/MVAr Curves 
 See Sundance 3,4 & 5 Reactive Power.gif and Sundance 6 Reactive Power.gif 
 INDEPENDENT ASSESSMENT TEAM Page 6 Final Version 

 

 
  
 Sundance
5&6 Schedule B 
 ARTICLE B4 
 START-UP INTERVAL 
 B4.1 Interval required between
Start-Up of Units 
 CONSTRAINT Interval required between Start-Up of units 

Environment 
 4 hours 
 Cooling Water 

None 
 Gas Supply 
 Simultaneous Start Ups may not exceed
two of the six Sundance units (which includes the Units and four other units at Sundance not governed by this Arrangement). Within one Month of the Effective Date, the Owner and the buyers of the Sundance arrangements, including the Buyer of this
Arrangement, shall agree upon a procedure for determining the precedence of requests for Start Ups. 
 Electrical
Supply 
 None 
 Water Supply/Treatment 
 8 hours 

Operator Limitations 
 8 hours 
 INDEPENDENT ASSESSMENT TEAM Page 7 Final
Version 

 

 

 

 

 

 
  
 Sundance
Units 5 and 6 Schedule C 
 SCHEDULE C CAPACITY PAYMENTS 

ARTICLE Cl 
 DEFINITIONS 
 Cl.l Definitions 

See Schedule N for definitions of subscripts, descriptions of mathematical conventions adopted and list of units of
measurements used in this Schedule. 
 “Actual Fixed Gas Network Charges” (AFGNC) means the franchise
fees and gas transportation charges levied on the Owner by the provider of gas transportation services under the terms of the relevant agreements for gas supply to service the requirements of the Committed Capacity and the Electricity generated by
the Committed Capacity. For greater certainty, the Actual Fixed Gas Network Charges shall be net of any amounts paid under any other part of this Arrangement to the extent that any portion of those amounts would otherwise be included in the Actual
Fixed Gas Network Charges; 
 “Actual Plant Electricity Consumed Charges” (APELEC) means the cost of
Electricity consumed in the Plant (excluding the cost of the auxiliary Electricity consumed when the Plant is declared unavailable by the Owner) and the cost of Electricity consumed in performing a Buyer initiated Start Up, all costed at the Pool
Price when such Electricity is consumed; 
 “Actual Power Pool Charges” (APPC) means the pool
participant charges, including participant fees and trading charges, levied by the Power Pool on the Owner with respect to the Committed Capacity and the Electricity generated and System Support Services provided by the Committed Capacity;

 “Actual Property Taxes” (APTAX) means the property taxes levied on the Owner by the relevant
Governmental Authority; 
 “Actual Transmission Administrator Charges” (ATAC) means the charges levied
by the Transmission Administrator on the Owner for generation transmission services with respect to the Committed Capacity and the Electricity and System Support Services provided by the Committed Capacity; 

“Average US $ - Canadian $ Exchange Rate” means, in respect of a particular Year y, the simple average of the
Bank of Canada US $ - Canadian $ exchange rate as published at noon each day for each Business Day in the Months of October, November and December for the previous Year (Year y-1); 

“Corporate Services and Administration” means the allocation of the Corporate Services and Administration costs
or charges that are allocated to Unit u for the relevant Year; 
 “Crown Coal Royalties” include both
coal royalties payable to the Crown or coal royalties that are based upon coal royalties payable to the Crown; 

INDEPENDENT ASSESSMENT TEAM 1 Final Version 

 

 
  
 Sundance
Units 5 and 6 Schedule C 
 “Current Year” (CY) is the Year in respect of which the Capacity Payment
(CPuy) is to be calculated and is expressed as a four digit Year number: 20xx; 
 “Quarter” means the
periods, each three (3) Months in duration, commencing on 1st January (being Quarter 1), 1st April (being Quarter 2), 1st July (being Quarter 3) and 1st October (being Quarter 4). 

In the calculations defined in this Schedule the following variables will be used. 

Variable Subscripts Units Definition 
 ACC uy $ Annual Capacity Charge 
 ACIT uy $ Actual
Corporate Income Tax 
 ACPS u % Percentage Average Cost of Preferred Stock 

ACST uy $ Actual Corporate Surtax 
 ADA us MW Declared Capability 
 AFGNC uy $ Actual
Fixed Gas Network Charges 
 AFTT uy $ Actual Federal Transitional Tax 

AFUDC_D uy $ Depreciation of Equity Portion of Allowance for Funds Used During Construction 

AFUDC_E uy $ Equity Portion of Allowance for Funds Used During Construction 

AINSC uy $ Actual Insurance Cost 
 ALCT uy $ Actual Large Corporations Tax 
 ANPIS uy
$ Adjusted Net Property in Service 
 APELEC uy $ Actual Plant Electricity Consumed Charges 

APPC uy $ Actual Power Pool Charges 
 APTAX uy $ Actual Property Taxes 
 APTT uy $ Actual
Provincial Transitional Tax 
 ASNSC uy $ Charge to Decommissioning Provision 

INDEPENDENT ASSESSMENT TEAM 2 Final Version 

 

 
  
 Sundance
Units 5 and 6 Schedule C 
 Variable Subscripts Units Definition 

ATAC uy $ Actual Transmission Administrator Charges 

ATCC uy % Percentage After Tax Cost of Capital 
 BFFC uy $ Base Fixed Fuel Charge 
 BFOMCC u $ Base
Fixed Operations, Maintenance and Corporate Services and Administration Charge 
 CA uy $ Unit Capital Additions

 CAAR cuy % Percentage Capital Addition Allocator Rate 

CAC cuy $ Capital Additions for a Particular Class 

CACS uy $ Total Capital Additions - Corporate Service and Administration Depreciation 

CAD uy $ Closing Accumulated Unit Depreciation 
 CADP uy $ Closing Accumulated Decommissioning Provision 
 cc um MW Committed Capacity 
 CCAD uy $ Closing
Accumulated Corporate Services & Administration Depreciation 
 CCGBV uy $ Closing Gross Book Value Corporate
Services and Administration Assets 
 CCNBV uy $ Closing Net Book Value Corporate Services and Administration
Assets 
 CED uy % Percentage Average Embedded Cost of Existing Debt 

CFCR uy $ Change to Fixed Crown Royalty Cost 
 CGBV uy $ Closing Gross Book Value Unit Assets 

CICA uy $ Indexed Corporate Services and Administration Capital Additions 

INDEPENDENT ASSESSMENT TEAM 3 Final Version 

 

 
  
 Sundance
Units 5 and 6 Schedule C 
 Variable Subscripts Units Definition 

CIT uy $ Corporate Income Tax 
 CNBV uy $ Closing Net Book Value Unit Assets 
 CND
uy % Percentage Cost of New Debt 
 COAD uy $ Opening Accumulated Corporate Services & Administration
Depreciation 
 COD uy $ Cost of Debt 
 COE uy $ Cost of Common Equity 
 COP uy $ Cost of
Preferred Stock 
 CP um $ Capacity Payment 

CR uy $ Corporate Services and Administration Capital Retirements 

CRC uy $ Capital Recovery Charge 
 CSCA uy $ Capital Additions for Corporate Services and Administration 
 CST uy $ Corporate Surtax 
 CSTR y % Federal
Corporate Surtax Rate 
 CUC uy % Percentage Customer Contributions 

CVCR uy $ Change to Variable Crown Royalty Cost 
 CY y Year Current Year 
 DA us MWh Declared
Availability 
 DCP ud $ Daily Capacity Payment 

DEPN uy $ Depreciation Expenses 
 DIM m number Days in Month 
 DNPV uy % Percentage
Decommissioning Net Present Value Factor 
 INDEPENDENT ASSESSMENT TEAM 4 Final Version 

 

 
  
 Sundance
Units 5 and 6 Schedule C 
 Variable Subscripts Units Definition 

DNSC uy $ Contribution to Decommissioning Provision 

DP uy $ Depreciation Charge 
 DPCS uy $ Corporate Services and Administration Depreciation Charge 
 DPGU uy $ Unit Assets Depreciation Charge 
 DPM uy
$ Coal Mining Assets Depreciation Charge 
 ELU u Years Effective Life of the Unit 

EP um $ Energy Payment 
 ERP uy % Percentage Equity Risk Premium 
 ETED u
date Unit Effective Term Completion Date 
 FCCA cuy $ Federal Capital Cost Allowance for a Class 

FCCAR cy % Federal Capital Cost Allowance Rate for a Class 

FCR uy $ Fixed Crown Royalties 
 FDPM uy $ Coal Mining Assets Depreciation Charge (Depreciated over Five Years) 
 FIT uy $ Corporate Income Tax - Federal Component 

FMCA uy $ Mine Capital Additions (Depreciated over Five Years) 

FMCGBV uy $ Closing Gross Book Value of Mine Assets (Depreciated over Five Years) 

FMICA uy $ Indexed Mine Capital Additions (Depreciated over Five Years) 

FMOAD uy $ Opening Accumulated Depreciation (depreciated over Five Years) 

FMOGBV uy $ Opening Gross Book Value Mine Assets (Depreciated over Five Years) 

INDEPENDENT ASSESSMENT TEAM 5 Final Version 

 

 
  
 Sundance
Units 5 and 6 Schedule C 
 Variable Subscripts Units Definition 

FMR uy $ Mine Capital Retirements (depreciated over 5 Years) 

FOTD uy $ Federal Other Timing Differences 
 FPD uy $ Federal Permanent Differences 
 FRDT uy $
Federal Recorded Deferred Tax Balance 
 FRDTA uy % Percentage Federal Recorded Deferred Tax Allocator

 FSNSC uy $ Forecast Decommissioning Net Salvage Cost 

FTR y % Federal Corporate Tax Rate 
 FTT uy $ Federal Transitional Tax 
 FUCC cuy $
Federal Undepreciated Capital Cost for a Class 
 FX y number Ave US - Canadian $ Exchange Rate (Last 3 Months of
Year) 
 FXVE uy $ Fixed and Variable Fuel and Non-Fuel Operating Expenses 

GBY y % Percentage Long Term Government Bond Yield 

HID d hours Hours in Day 
 IASNSC uy $ Indexed Charge to Decommissioning Provision 
 ICA uy $ Indexed Unit Capital Additions 
 IDNSC uy
$ Indexed Contribution to Decommissioning Provision 
 IFFC uy $ Indexed Fixed Fuel Charge 

IFOMCC uy $ Indexed Fixed Operations, Maintenance and Corporate Services and Administration Charge 

IFOTD uy $ Indexed Federal Other Timing Differences 

IFPD uy $ Indexed Federal Permanent Differences 
 INDXO y number Index - Cansim P109000 
 INDEPENDENT
ASSESSMENT TEAM 6 Final Version 

 

 
  
 Sundance
Units 5 and 6 Schedule C 
 Variable Subscripts Units Definition 

INDX1 y number Index - Cansim P2000 
 INDX2 y number Index - Cansim P2859 
 INDX3 y
number Index - Cansim L83687 
 INDX4 y number Index - Cansim L83917 

INDX5 y number Index - Cansim L83895 
 INDX6 y number Index - Cansim L59125 
 INDX7 y
number Index - Cansim L95725 
 INDX8 y number Index - Cansim P3307 

INDX9 y number Index - Cansim P1321 
 IPOTD uy $ Indexed Provincial Other Timing Differences 
 IPPD uy $ Indexed Provincial Permanent Differences 

ISC uy $ Investor Supplied Capital for the Unit 
 IT uy $ Imputed Income Tax 
 ITTU uy $ Imputed
Income Tax Trueup 
 LAND uy $ Land Component of NPIS 

LCT uy $ Large Corporations Tax 
 LCTR y % Large Corporations Tax Rate 
 LDPM uy $
Coal Mining Assets Depreciation Charge (Depreciated over Unit Life) 
 LMCA uy $ Mine Capital Additions
(Depreciated over Unit Life) 
 LMCAD uy $ Closing Accumulated Mine Depreciation (Depreciated over Unit Life)

 INDEPENDENT ASSESSMENT TEAM 7 Final Version 

 

 
  
 Sundance
Units 5 and 6 Schedule C 
 Variable Subscripts Units Definition 

LMCGBV uy $ Closing Gross Book Value of Mines Assets (Depreciated over Unit Life) 

LMICA uy $ Indexed Mine Capital Additions (Depreciated over Unit Life) 

LMOAD uy $ Opening Accumulated Mine Depreciation (Depreciated over Unit Life) 

LMOGBV uy $ Opening Gross Book Value Mines Assets (Depreciated over Unit Life) 

LMR uy $ Mine Capital Retirements (Depreciated over Unit Life) 

LPIF y number Labour Productivity Improvement Factor 

M % Minimum Cash Return 
 MCAD uy $ Closing Accumulated Mine Depreciation 

MCGBV uy $ Closing Gross Book Value Mine Assets 
 MCNBV uy $ Closing Net Book Value Mine Assets 
 MCP
m $ Monthly Capacity Payment 
 MGDR uy % Percentage Merchant Generator Discount Rate 

MROE uy $ Minimum Allowed Equity Return 
 NCC uy % Percentage No-Cost Capital 
 NDEIP uy $
Non-Deductible Expenses in Property Comp. of NPIS 
 NDEIP_D uy $ Depreciation of NDEIP 

NLR1 % Net Lead/ Lag Ratios for WRC1 
 NLR2 % Net Lead/ Lag Ratios for WRC2 
 NLR3 % Net
Lead/ Lag Ratios for WRC3 
 NLR4 % Net Lead/ Lag Ratios for WRC4 

INDEPENDENT ASSESSMENT TEAM 8 Final Version 

 

 
  
 Sundance
Units 5 and 6 Schedule C 
 Variable Subscripts Units Definition 

NLR5 % Net Lead/ Lag Ratios for WRC5 
 NLR6 % Net Lead/ Lag Ratios for WRC6 
 NPIS uy $
Net Property in Service 
 NVCR d $/tonne New Variable Crown Royalty Rate 

NWC uy $ Necessary Working Capital 
 OAD uy $ Opening Accumulated Unit Depreciation 

OADP uy $ Opening Accumulated Decommissioning Provision 

OCGBV uy $ Opening Gross Book Value Corporate and Admin Assets 

OGBV uy $ Opening Gross Book Value Unit Assets 
 OVCR $/tonne Original Variable Crown Royalty Rate 

PAS uy % Percentage Allowed Spread 
 PC uy $ Aggregate Passthrough Charges 
 PCCA cuy $
Provincial Capital Cost Allowance for a Class 
 PCCAR cy % Provincial Capital Cost Allowance Rate for a Class

 PCP um $ Provisional Capacity Payment 
 PCTU uy $ Aggregate Passthrough Charges True-up 

PERY y % Percentage of Hours in Year for which NVCR Applies 

PIT uy $ Corporate Income Tax - Provincial Component 

PNPV uy % Percentage Property Net Present Value Factor 

POTD uy $ Provincial Other Timing Differences 
 PPD uy $ Provincial Permanent Differences 
 PRDT uy
$ Provincial Recorded Deferred Tax Balance 
 INDEPENDENT ASSESSMENT TEAM 9 Final Version 

 

 
  
 Sundance
Units 5 and 6 Schedule C 
 Variable Subscripts Units Definition 

PRDTA uy % Percentage Recorded Deferred Tax Allocator 

PTR y % Provincial Corporate Tax Rate 
 PTT uy $ Provincial Transitional Tax 
 PUCC cuy $
Provincial Undepreciated Capital Cost for a Class 
 R uy $ Unit Capital Retirements 

RB uy $ Mid Year Rate Base 
 RL uy Years Remaining Life of Unit 
 ROE uy %
Percentage Return on Common Equity Share of Rate Base 
 SCE uy % Percentage Share of Common Equity 

SD uy % Percentage Share of Debt 
 SPD s hours Settlement Period Duration 
 SPS u %
Percentage Share of Preferred Stock 
 TAEP uy $ Total Energy Payment 

UEL uy date Last Year of the Effective Life of the Unit 

WACD uy % Weighted Average Cost of Debt 
 WI1 y number Weighted Index 1 
 WI2FF y number
Weighted Index 2 (Fixed Fuel) 
 WI2VF y number Weighted Index 2 (Variable Fuel) 

WI3C y number Weighted Index 3 (Corporate Services and Admin) 

WI3M y number Weighted Index 3 (Mining) 
 WI3U y number Weighted Index 3 (Units) 
 WRC1 uy $
Working Capital Component - Operating Expenses 
 INDEPENDENT ASSESSMENT TEAM 10 Final Version 

 

 
  
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Units 5 and 6 Schedule C 
 Variable Subscripts Units Definition 

WRC2 uy $ Working Capital Component - Income Tax 
 WRC3 uy $ Working Capital Component - Inventory 

WRC4 uy $ Working Capital Component - Depreciation 

WRC5 uy $ Working Capital Component - Interest and Preferred Equity 

WRC6 uy $ Working Capital Component - Common Equity Retained Earnings and Dividends 

XD uy % Percentage Existing Debt 
 In the calculations defined in this Schedule the following published Indices will be used. 
 Index Reference Cansim number Description 
 INDXO
P109000 Consumer Price Index (1992-100) 
 INDX1 P2000 Industrial Product Price Index (1992=100) - All
Commodities 
 INDX2 P2859 Industrial Product Price Index (1992=100) - Machinery and Equipment 

INDX3 L83687 Alberta Average Weekly Earnings of salaried employees - Service Producing Industries - Utilities 

INDX4 L83917 Alberta Average Weekly Earnings of employees paid by the hour - Service Producing Industries - Utilities

 INDX5 L83895 Alberta Average Weekly Earnings of employees paid by the hour - Goods Producing Industries -
Industrial and Heavy Engineering Construction 
 INDX6 L59125 Average Weekly Earnings - Coal Mining 

INDX7 L95725 Fixed Weight Indices of Average Hourly Earnings - Alberta Industrial Aggregate 

INDEPENDENT ASSESSMENT TEAM 11 Final Version 

 

 
  
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Units 5 and 6 Schedule C 
 Index Reference 

Cansim number 
 Description 
 INDX8 P3307 Industrial Product Price
Index (1992=100) - Petroleum and Coal Products - Diesel Fuel 
 INDX9 P1321 Industrial Product Price Index
(1992=100) - Machinery and Equipment - Capital Equipment 
 In using the Indices listed above, the following
conventions will apply: 
 (a) when an Index is given with a subscript “y” this shall mean the simple
average of the values of the Index published in respect of the Months of September, October and November of the previous Year (Year y-1) (if the Index is published Monthly) or the value for Quarter 3 of the previous Year (Year y-1) (if the Index is
published Quarterly); 
 (b) when an Index is given with a subscript “98” this shall mean the simple
average of the values of the Index published in respect of the Months of September, October and November of 1997 (if the Index is published Monthly) or the value for Quarter 3 of 1997 (if the Index is published Quarterly). 

ARTICLE C2 
 OWNER’S OBLIGATION TO CALCULATE VALUES 
 C2.1
Owner’s Obligation to Calculate Values 
 The Owner shall calculate a value of the Annual Capacity Charge
and Capacity Payment for each Unit and the Monthly Availability Payment for all Units in accordance with the rules set out in this Schedule C, save that if ETEDu < CYy then no value of CPuy shall be calculated for this Unit u (where ETEDU is the
Unit Effective Term Completion Date, CYy is the Current Year and CPuy is the Capacity Payment). 
 C2.2
Owner’s Obligation to Calculate Values (2) 
 If for Year y no value of CPuy is to be determined but a value
of CPuy was determined in respect of the previous Year y-1, the Owner shall determine a value of the Aggregate Passthrough Charges Trueup (PCTUuy) for this Year y and the Buyer shall pay to the Owner this amount. 

INDEPENDENT ASSESSMENT TEAM 12 Final Version 

 

 
  
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Units 5 and 6 Schedule C 
 ARTICLE C3 ANNUAL CAPACITY CHARGE 

C3.1 Aggregate Passthrough Charges 
 The Aggregate Passthrough Charges Trueup (PCTUuy) shall be calculated as follows: 
 For the first Year of the Effective Term PCTUuy = 0, but in all other cases: 
 PCTUuy = APPCu(y-1) + ATACu(y-i) + AFGNCu(y-1) + APTAXu(y-1) + CFCRu(y-1)+ CVCRu(y-1) + AINSCU(y-1) + APELECU(y-1) - PCU(y-1) 

The Aggregate Passthrough Charges (PCuy) shall be calculated as follows: 

PCUy = APPCU(y-1) + ATACu(y-1) + AFGNCU(y-1) + APTAXU(y-1) + CFCRU(y-1)+ CVCRU(y-1) + AINSCU(y-l) + APELECu(y-1) + PCTUuy

 where APPCU(y-1) are the Actual Power Pool Charges for Year y-1, ATACU(y-1) are the Actual Transmission
Administrator Charges for Year y-1, AFGNCu(y-1) are the Actual Fixed Gas Network Charges for Year y-1, APTAXU(y-1) are the Actual Property Taxes for Year y-1, CFCRu(y-1) is the Change to Fixed Crown Coal Royalty Cost for Year y-I (determined as
shown below), CVCRu(y-1) is the Change to Variable Crown Coal Royalty Cost for Year y-1 (determined in Schedule E), AINSCU(y-1) are the Actual Insurance Premium Costs for Year y-1 and APELECU(y-1) are the Actual Plant Electricity Consumed Charges
for Year y-1. 
 The values of APPCu(y-1) (Actual Power Pool Charges for Year y-1), ATACU(y-1) (Actual
Transmission Administrator Charges for Year y-1), AFGNCU(y-1) (Actual Fixed Gas Network Charges for Year y-1), APTAXu(y-1) (Actual Property Taxes for Year y-1) and APELECU(y-1) (Actual Plant Electricity Consumed Charges for Year y-1) shall be
determined by the Owner as reasonably reflecting the share of the relevant total costs or charges properly incurred by the Owner that should acrue to the particular Unit u. In the event that the Owner reasonably believes that there is no manifestly
obvious way of sharing the relevant cost or charges at the Plant level across the Units u within the Plant, the costs or charges shall be shared pro-rata to the Committed Capacity of the Units. The value of AINSCU(y-1) (Actual Insurance Premium
Costs for Year y-1) in respect of each Unit shall be determined by the Owner in accordance with the rules set out in Section 9.1. 
 At the end of any Year y in which a New Crown Royalty Rate (NVCRd) has been introduced, a value of the Change to Fixed Crown Royalty Cost (CFCRuy) shall be determined as follows:

 CFCRuy = (FCRuy x (NVCRd - OVCR) / OVCR) x (PERYy /100) 

where FCRy is the Fixed Crown Royalty Cost (given in the table in Article C7), NVCRd is the New Variable Crown Royalty
Rate, OVCR is the Original Variable Crown Royalty Rate (and is $0.55 per tonne) and PERYy is the percentage of the Year for which the New Variable Crown Royalty Rate applies. 
 INDEPENDENT ASSESSMENT TEAM 13 Final Version 

 

 
  
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Units 5 and 6 Schedule C 
 C3.2 Unit Assets Depreciation Charge 

The Unit Assets Depreciation Charge (DPGUuy) shall be determined as follows: 

WI3Uy (the weighted index factor relating to generating unit capital additions) in Year y will be calculated as follows:

 WI3Uy = (0.5 + (0.5FXy/1.50)) x INDX9y / INDX998 

where FXy is the Average US $ - Canadian $ Exchange Rate and INDX9 is the Industrial Product Price Index (1992=100) -
Machinery and Equipment - Capital Equipment Index (Cansim P1321). 
 The Indexed Unit Capital Additions in Year y
(ICAuy) is determined as follows: 
 ICAuy = CAuy x WI3Uy 

where CAuy is the Base Unit Capital Additions in Year y, given in the Table in Article C7 The Unit Capital Retirements in
Year y (Ruy) is calculated as: 
 Ruy = 0.1 x ICAuy 

The Opening Gross Book Value Unit Assets (OGBVuy) is determined as follows: 

OGBVuy = CGBVu(y-1) 
 where CGBVu(y-1) is the Closing Gross Book Value Unit Assets for the previous Year (y-1), and is determined as follows: 

for the first Year of the Effective Term the Closing Gross Book Value Unit Assets for the previous Year (CGBVu(y-1)) = the
value for Year 2000 given in the Table in Article C7; but for all other Years: 
 CGBVu(y-1) = OGBVu(y-1) +
ICAu(y-1) – Ru(y-1) 
 The Last Year of the Effective Life of the Unit (UELuy) is found as follows:

 UELuy = 2000 + ELUu 
 where ELUu is the effective life of the Unit as given in the Table in Article C7 The Remaining Life of Unit in Year y (RLuy) is determined as follows: 

RLuy = UELuy – (CYy – 1) 
 where UELuy is the Last Year of the Effective Life of the Unit, and CYy is the Current Year. 
 The Opening Accumulated Unit Depreciation in Year y (OADuy) is determined as follows: OADuy = CADu(y-1) 
 where CADu(y-1) is the Closing Accumulated Unit Depreciation for the previous Year (y-1), and is determined as follows: 

for the first Year of the Effective Term the Closing Accumulated Unit Depreciation for the previous Year (CADu(y-1)) = the
value for Year 2000 given in the Table in Article C7; but for all other Years: 
 CADu(y-1) = OADu(y-1) +
DPGUu(y-1) – Ru(y-1) 
 INDEPENDENT ASSESSMENT TEAM 14 Final Version 

 

 
  
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Units 5 and 6 Schedule C 
 The Unit Assets Depreciation Charge (DPGUuy) is found as follows: 

If RLuy £ 0 then DPGUuy = 0; but in all other cases: 

DPGUuy = (OGBVuy + ICAuy – OADuy)/ RLuy 
 C3.3 Coal Mining Assets Depreciation Charge 
 The
value of the Weighted Index 3 (Mining) (WI3My) shall be determined as follows:. 
 Weighted Index 3 (Mining)
(WI3My) is: 
 WI3My = (0.25 + (0.75FXy/l .50)) x INDX9y / INDX998 

where FXy is the Average US $ - Canadian $ Exchange Rate and INDX9 is the Industrial Product Price Index (1992=100) -
Machinery and Equipment - Capital Equipment Index (Cansim P1321). 
 The Indexed Mine Capital Additions
(Depreciated over Five Years) in Year y (FMICAuy) is determined as follows: 
 FMICAuy = FMCAuy x WI3My

 where FMCAuy is the Base Mine Capital Additions (Depreciated over Five Years) in Year y, given in the Table in
Article C7 
 The Indexed Mine Capital Additions (Depreciated over Unit Life) in Year y ( LMICAuy) is determined
as follows: 
 LMICAuy = LMCAuy x WI3My 
 where LMCAuy is the Base Mine Capital Additions (Depreciated over Unit Life) in Year y, given in the Table in Article C7 

The Mine Capital Retirements (Depreciated over Unit Life) in Year y (LMRuy) is calculated as: LMRuy = 0.1 x LMICAuy

 The Mine Capital Retirements (depreciated over 5 Years) in Year y (FMRuy) is calculated as: FMRuy = 0.1 x
FMICAuy 
 The Opening Gross Book Value Mine Assets (Depreciated over Unit Life) (LMOGBVuy) is determined as
follows: 
 LMOGBVuy = LMCGBVu(y-1) 
 where LMCGBVu(y-1) is the Closing Gross Book Value of Mine Assets (Depreciated over Unit Life) for the previous Year (y-1), and is determined as follows: 

for the first Year of the Effective Term the Closing Gross Book Value of Mine Assets (Depreciated over Unit Life) for the
previous Year (LMCGBVu(y-1)) = the value for Year 2000 given in the Table in Article C7; but for all other Years: 
 LMCGBVu(y-1) = LMOGBVu(y-1) + LMICAu(y-1) – LMRu(y-1) 
 The Opening Accumulated Mine Depreciation (Depreciated over Unit Life) in Year y (LMOADuy) is determined as follows: 

INDEPENDENT ASSESSMENT TEAM 15 Final Version 

 

 
  
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Units 5 and 6 Schedule C 
 LMOADuy = LMCADu(y-1) 

where LMCADu(y-1) is the Closing Accumulated Mine Depreciation (Depreciated over Unit Life) for the previous Year (y-1),
and is determined as follows: 
 for the first Year of the Effective Term the Closing Accumulated Mine
Depreciation (Depreciated over Unit Life) for the previous Year (LMCADu(y-1)) = the value for Year 2000 given in the Table in Article C7; but for all other Years: 
 LMCADu(y-1) = LMOADu(y-1) + LDPMu(y-1) – LMRu(y-1) 
 The Opening Gross Book Value Mine Assets (Depreciated over Five Years) (FMOGBVuy) is determined as follows: 
 FMOGBVuy = FMCGBVu(y-1) 
 where FMCGBVu(y-1) is the
Closing Gross Book Value of Mine Assets (Depreciated over Five Years) for the previous Year (y-1), and is determined as follows: 
 for the first Year of the Effective Term the Closing Gross Book Value of Mine Assets (Depreciated over Five Years) for the previous Year (FMCGBVu(y-1) = the value for Year 2000, is equal
to zero. 
 FMCGBVu(y-1) = FMOGBVu(y-1) + FMICAu(y-1) – FMRu(y-1) 

The Opening Accumulated Mine Depreciation (Depreciated over Five Years) in Year y (FMOADuy) is determined as follows:

 FMOADuy = FMCADu(y-1) 
 where FMCADu(y-1) is the Closing Accumulated Mine Depreciation (Depreciated over Five Years) for the previous Year (y-1), and is determined as follows: 

for the first Year of the Effective Term the Closing Accumulated Mine Depreciation (Depreciated over Five Years) for the
previous Year (FMCADu(y-1)) = the value for the Year 2000, is equal to zero. 
 FMCADu(y-1) = FMOADu(y-1) +
FDPMu(y-1) – FMRu(y-1) 
 The Closing Gross Book Value of Mine Assets MCGBV u,y is determined as follows:

 MCGBVu,y = LMCGBV u,y + FMCGBV u,y 
 The Closing Accumulated Mine Depreciation MCAD u,y is determined as follows: 
 MCAD u,y = LMCAD u,y + FMCAD u,y 
 The Mine Assets
Depreciation Charge (Depreciated over Five Years) (FDPMuy) is found as follows: 
 If RLuy £ 0 then FDPMuy = 0; but in all other cases: 
 FDPMuy = S(y.4)y (FMICAuy / min[5, RLuy]) 
 where
S(y-4)y means the (inclusive) sum over all Years from 4 Years before this Year CYy; and this Year CYy. The Mine Assets Depreciation Charge (Depreciated over Unit Life) (LDPMuy) is found as follows:

 If RLuy £ 0 then LDPMuy = 0; but in all other cases: 

INDEPENDENT ASSESSMENT TEAM 16 Final Version 

 

 
  
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Units 5 and 6 Schedule C 
 LDPMuy = (LMOGBVuy + LMICAuy – LMOADuy)/ RLuy 

The Mine Assets Depreciation Charge (DPMuy) is found as follows: 

DPMuy = FDPMuy + LDPMuy 
 C3.4 Depreciation Charge for Corporate and Administration Assets 
 The value of the Weighted Index 3 (Corporate Services and Administration) (WI3Cy) shall be determined as follows:. 
 Weighted Index 3 (Corporate Services and Administration) (WI3Cy) is: 
 WI3Cy = INDX9y / INDX998 
 where INDX9 is the
Industrial Product Price Index (1992=100) - Machinery and Equipment - Capital Equipment Index (Cansim P1321). 

The Indexed Corporate Services and Administration Capital Additions in Year y (CICAuy) is determined as follows:

 CICAuy = CSCAuy x WI3Cy 
 where CSCAuy is the Base Corporate Services and Administration Capital Additions in Year y, given in the Table in Article C7 

The Corporate Services and Administration Capital Retirements in Year y (CRuy) is calculated as: 

CRuy = 0.1 x CICAuy 
 The Opening Gross Book Value Corporate Services and Administration Assets (OCGBVuy) is determined as follows: 
 OCGBVuy = CCGBVu(y-l) 
 where CCGBVu(y-1) is the
Closing Gross Book Value Corporate Services and Administration Assets for the previous Year (y-1), and is determined as follows: 
 for the first Year of the Effective Term the Closing Gross Book Value Corporate Services and Administration Assets for the previous Year (CCGBVu(y-1) = the value for Year 2000 given in the
Table in Article C7; but for all other Years: 
 CCGBVu(y-1) = OCGBVu(y-1) + CICAu(y-1) – CRu(y-1)

 The Opening Accumulated Corporate Services and Generation Administration Assets Depreciation in Year y
(COADuy) is determined as follows: 
 COADuy – CCADu(y-1) 

where CCADu(y-1) is the Closing Accumulated Corporate Services and Generation Administration Assets Depreciation for the
previous Year (y-1), and is determined as follows: 
 for the first Year of the Effective Term the Closing
Accumulated Corporate Services and Generation Administration Assets Depreciation for the previous Year (CCADu(y-1)) = the value for Year 2000 given in the Table in Article C7; but for all other Years: 

CCADu(y-1) = COADu(y-1) + DPCSu(y-1) – CRU(y-1) 

INDEPENDENT ASSESSMENT TEAM 17 Final Version 

 

 
  
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Units 5 and 6 Schedule C 
 The Corporate Services and Administration Assets Depreciation Charge (DPCSuy) is
found as follows: 
 If RLuy £ 0 then DPCSuy = 0; 

If CYy £ 2005: DPCSuy = 

([OCGBVu(y=2001) - COAD u(y=2001)] / min[5, RLu(y=2001)) + (S(y-4)y (CICAuy /
min[5, RLuy])) 
 Where OCGBVu(y=2001) means the Opening Gross Book Value Corporate Services and Administration
Assets in the Year 2001; COAD u(y=2001) means the Opening Accumulated Corporate Services and Generation Administration Assets Depreciation in Year 2001 and RLu(y=2001) means the remaining life of the unit at the beginning of the Year 2001.

 When CYy > 2005: DPCSuy = S(y-4)y (CICAuy / min[5, RLuy])

 where S(y-4)y means the (inclusive) sum over all Years from 4
Years before this Year CYy; and this Year CYy. 
 C3.5 Not Used 

C3.6 Depreciation Charge 
 The Depreciation Charge for Year y (DPuy) is determined as follows: depreciation charge in Year y (in $) = DPuy = DPGUuy + DPMuy + DPCSuy Where: 

DPGUuy = depreciation charge associated with generating unit assets in Year y 

DPMuy = depreciation charge associated with coal mine assets in Year y 

DPCSuy = depreciation charge associated with allocated corporate service and generation administration assets in Year y

 C3.7 Investor Supplied Capital 
 The Investor Supplied Capital for the Unit (ISCuy) in Year y is determined as follows: 
 ISCuy = RBuy x (1 – (CUCuy + NCCuy)/100) 

where RBuy is the Mid Year Rate Base in Year y (as determined in Article C4), CUCuy is the Percentage Customer
Contributions to Rate Base in Year y set out in the Table in Article C7 and NCCuy is the Percentage No-Cost Capital in Year y set out in the Table in Article C7. 
 INDEPENDENT ASSESSMENT TEAM 18 Final Version 

 

 
  
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Units 5 and 6 Schedule C 
 C3.8 Cost of Preferred Stock 

The Cost of Preferred Stock (COPuy) shall be calculated as follows: 

COPuy= ISCuy x (SPSu/100) x (ACPSu/100) 
 where ISCuy is the Investor Supplied Capital for the Unit, SPSu is the Percentage Share of Preferred Stock in investor supplied capital and ACPSu is the Percentage Average Cost of
Preferred Stock in Year y set out in the Table in Article C7. 
 C3.9 Cost of Debt 

The Percentage Cost of New Debt in Year y (CNDuy) is determined as follows: 

CNDuy = GBYy + PASuy 
 where PASuy is the Percentage Allowed Spread (the spread between long term government bond yields and corporate debt set out in the Table in Article C7) and GBYy is the Percentage Long
Term Government Bond Yield in Year y and is defined as the average of daily close of trading yields (%) for Canadian government bonds of 10 Years or more maturity for all trading days in the months of September, October and November of the previous
Year (ie: y-1) published in the Bank of Canada’s weekly Financial Statistics publication. (CANSIM code: Bl 14022 for daily data). 
 The Weighted Average Cost of Debt (WACDuy) is determined as follows: 
 WACDuy = 100 x ([XDuy/100] x [CEDuy /100]) + ([1 -XDuy/100] x [CNDuy /100]) 
 where XDuy is the Percentage Existing Debt in total debt in Year y set out in the Table in Article C7, CEDuy is the Percentage Average Embedded Cost of Existing Debt in Year y set out in
the Table in Article C7 and CNDuy is the Percentage Cost of New Debt. 
 The Cost of Debt (CODuy) shall be
determined as follows: 
 CODuy = ISCuyx (SDuy/100)x (WACDuy/100) 

where SDuy is Percentage Share of Debt in investor supplied capital set out in the Table in Article C7 and WACDuy is the
Weighted Average Cost of Debt in Year y. 
 C3.10 Cost of Common Equity 

TAEPu(y-1) = Smy EPum 

where Smy EPum means the sum of all Energy Payments in respect of this Unit u
for all Months m in the previous Year (Year y-1) determined pursuant to Schedule. 
 The aggregate Fixed and
Variable Fuel and Non-Fuel Operating Expenses in Year y (FXVEuy) shall be calculated as follows: 
 FXVEuy =
IFOMCCuy + IFFCuy + TAEPu(y-1) + COP uy + CODuy 
 The Percentage Return on Common Equity Share of Rate Base
(ROEuy) shall be calculated as follows: 
 ROEuy = GBYy + ERPuy 

INDEPENDENT ASSESSMENT TEAM 19 Final Version 

 

 
  
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Units 5 and 6 Schedule C 
 where GBYy is the Percentage Long Term Government Bond Yield and ERPuy is the
Percentage Equity Risk Premium set out in the Table in Article C7. 
 Minimum Allowed Equity Return in Year y
(MROEuy) is determined as follows: 
 MROEuy = M/100 x FXVEuy 

where M is the Minimum Cash Return and equals 2%. 
 The Cost of Common Equity (COEuy) shall be calculated as follows: 
 COEuy = max[MROEuy, ISCuy x (SCEuy/100) x (ROEuy/100)] 
 where MROEuy is the Minimum Allowed Equity Return in Year y, SCEuy is the Percentage Share of Common Equity and ROEuy is Percentage Return on Common Equity Share of Rate Base. 

C3.ll Imputed Income Tax 
 The Imputed Income Tax for this Unit u for the Current Year y (ITuy) shall be determined in Article C5.1. 
 C3.12 Capital Recovery Charge 
 The Capital
Recovery Charge (CRCuy) shall be calculated as follows: 
 The Indexed Contribution to Decommissioning Provision
for this Unit u for the Current Year y (IDNSCuy) shall be determined as follows: 
 IDNSCuy = (INDX0y / INDX098)
x DNSCuy 
 where INDX0y is the Consumer Price Index and DNSCuy is the Contribution to Decommissioning Provision
for this Unit u for the Current Year y as given in the Table in Article C7. 
 CRCuy = IDNSCuy + DPuy + COEuy +
COPuy + CODuy + ITuy 
 C3.13 Fixed O&M Charge 

The Weighted Index Factor 1 (WIly) shall be calculated as follows: 

WIly = (0.25 x INDXly / INDX198) + (0.2 x (INDX3y / INDX398) x LPIFy) + (0.2 x (INDX4y / INDX498) x LPIFy) + (0.25 x
INDX5y / INDX598) + (0.1 x INDX2y/ INDX298) 
 where LPIFy is the real Labour Productivity Improvement Factor and
is calculated as follows: 
 For the first Year of the Effective Term, LPIFy = 0.99, but for all other Years:

 LPIFy = max[0.90438, LPIF(y-1) x 0.99]. 

The Indexed Fixed Operations, Maintenance and Corporate Services and Administration Charge (IFOMCCuy) shall be calculated
as follows: 
 IFOMCCuy = BFOMCCuy x WI1y 

INDEPENDENT ASSESSMENT TEAM 20 Final Version 

 

 
  
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Units 5 and 6 Schedule C 
 where BFOMCCuy is the Base Fixed Operations, Maintenance and Corporate Services and
Administration Charge given in a Table in Article C7. 
 C3.14 Fixed Fuel Charge 

The value of the Weighted Index 2 (Fixed Fuel) (WI2FFy) and Weighted Index 2 (Variable Fuel) (WI2VFy) shall be determined
as follows: 
 WI2FFy = (0.35 x (INDX6y / INDX698) x LPIFy) + (0.35 x INDX7y / INDX798) + (0.10 x INDX2y /
INDX298) + (0.20x INDXly / INDX198) 
 WI2VFy = (0.225 x INDX6y / INDX698) + (0.225 x INDX7y / INDX798) + (0.20 x
INDX2y / INDX298) + (0.15 x INDXly / INDX198) + (0.20 x INDX8y / INDX898) 
 The Indexed Fixed Fuel Charge
(IFFCuy) shall be calculated as follows: 
 IFFCuy = BFFCuy x WI2FFy 

where BFFCuy is found in Article C7. 
 C3.15 Annual Capacity Charge 
 The Annual Capacity
Charge (ACCuy) shall be calculated as follows: 
 ACCuy = CRCuy + IFOMCCuy + IFFCuy + PCuy 

where CRCuy is the Capital Recovery Charge, IFOMCCuy is the Indexed Fixed Operations, Maintenance Charge and Corporate
Services Charge, IFFCuy is the Indexed Fixed Fuel Charge and PCuy is the Aggregate Pass Through Charges. 

ARTICLE C4 
 RATE BASE AND WORKING CAPITAL 
 C4.1 Opening and
Closing Net Book Values 
 The Closing Net Book Values of the Unit, Mine and Corporate and Admin Assets (CNBVuy,
MCNBVUy and CCNBVuy respectively) shall be calculated as follows: 
 CNBVuy = CGBVuy – CADuy 

MCNBVuy = MCGBVuy – MCADuy 
 CCNBVuy = CCGBVuy – CCADuy 
 where CGBVuy,
MCGBVuy and CCGBVuy are the Closing Gross Book Values of the Unit, Mine and Corporate and Admin Assets respectively and CADuy, MCADuy and CCADuy are the Closing Accumulated Unit, Mine and Corporate Services & Admin Depreciation respectively.

 INDEPENDENT ASSESSMENT TEAM 21 Final Version 

 

 
  
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Units 5 and 6 Schedule C 
 C4.2 Opening and Closing Accumulated Decommissioning Provision 

The Opening Accumulated Decommissioning Provision for Year y (OADPuy) is determined as follows: 

OADPuy = CADPu(y-1) 
 where CADPu(y-1) is the Closing Accumulated Decommissioning Provision for the previous Year (y-1), and is determined as follows: 

for the first Year of the Effective Term the Closing Accumulated Decommissioning Provision for the previous Year (CADP^d)
= the value for Year 2000 given in the Table in Article C7; but for all other Years: 
 CADPU(y-1) = OADPu(y-l) +
IDNSCu(y-1) = IASNSCU(y-1) 
 where IDNSCU(y-1) is the Indexed Contribution to Decommissioning Provision and
(IASNSCu(y-1) is the Indexed Charge to Decommissioning Provision in Year y. 
 The Indexed Charge to
Decommissioning Provision (IASNSCuy) is determined as follows: IASNSCuy = (INDX0y / INDX098) x ASNSCuy 
 where
INDX0y is the Consumer Price Index (Cansim P109000) and ASNSCuy is the Charge to Decommissioning Provision. 

C4.3 Working Capital 
 The Necessary Working Capital (NWCuy) for Year y is determined as follows: 
 NWCuy = (WRCluy x NLR1 / 100) + (WRC2uy x NLR2 / 100) + (WRC3uy x NLR3 / 100) + (WRC4uy x NLR4 / 100) + (WRC5uy x NLR5 /100) + (WRC6uy x NLR6 / 100) 

where WRCluy is the actual Working Capital Component - Operating Expenses for Year y, WRC2uy is the actual Working Capital
Component – Income Tax for Year y, WRC3uy is the- actual Working Capital Component – Inventory for Year y, WRC4uy is the actual Working Capital Component – Depreciation for Year y, WRC5uy is the actual Working Capital Component –
Interest and Preferred Equity for Year y, WRC6uy is the actual Working Capital Component – Common Equity Retained Earnings and Dividends for Year y (all as determined below) and NLR1 through NLR6 are the Net Lead/Lag Ratios for applicable for
each of these Working Capital allowances. 
 The Working Capital Component - Operating Expenses (WRCl uy) is
determined as follows: 
 WRCluy = IFOMCCu(y.1) + IFFCu(y-1) + TAEPu(y-1) + PCu(y-1) 

where IFOMCCu(y-i) is the Indexed Fixed Maintenance Charge for Year y-1, IFFCU(y-1) is the Indexed Fixed Fuel Charge for
Year y-1, TAEPu(y-1) is the Total Energy Payment for Year y-1 and PCu(y-1) is the Aggregate Pass Through Charges for Year y-1. 
 The Working Capital Component - Income Tax (WRC2uy) is determined as follows: 
 WRC2uy = ITu(y-1) 
 The Working Capital Component -
Inventory (WRC3uy) is the number in $ set out in the Table in Article C8 for Year y-1. 
 INDEPENDENT ASSESSMENT
TEAM 22 Final Version 

 

 
  
 Sundance
Units 5 and 6 Schedule C 
 The Working Capital Component - Depreciation (WRC4uy) is determined as follows:

 WRC4uy = DPu(y-1) + IDNSCu(y-1) 
 The Working Capital Component - Interest and Preferred Equity (WRC5u) is determined as follows: 
 WRC5u = CODu(y-1) + COPu(y-1) 
 The Working Capital
Component - Common Equity Retained Earnings and Dividends (WRC6u) is determined as follows: 
 WRC6u = 0.5 x
COEu(y-1) 
 Net Lead/ Lag Ratios are as follows: 

NLR1 = 2.5% 
 NLR2 = 7.0% 
 NLR3 = 100% 

NLR4 = 6.0% 
 NLR5 = -15% 
 NLR6 = 15.0% 

C4.4 Rate Base Calculation 
 For a given Unit in a given Year y the Mid Year Rate Base (RBuy) shall be determined as: 
 RBuy = 0.5(CNBVu(y-1) + CNBVuy) + 0.5(MCNBVu(y-l) + MCNBVuy) + 0.5(CCNBVu(y-1) + CCNBVuy) - 0.5(CADPu(y-1) + CADPuy) + 0.5(NWCu(y-1) + NWCuy) 

where RBuy is the Mid Year Rate Base, CNBVu(y-1) and CNBVuy are the Closing Net Book Value Unit Assets in Years y-1 and y,
MCNBVu(y-1) and MCNBVuy are the Closing Net Book Value Mine Assets in Years y-1 and y, CCNBVU(y-t) and CCNBVuy are the Closing Net Book Value Corporate Service and Admin in Years y-1 and y, CADPu(y-1) and CADPuy are the Closing Accumulated
Decommissioning Provision in Years y-l and y and NWCu(y-1) and NWCuy are the Necessary Working Capital all in respect of Years y-1 and y. 
 ARTICLE C5 
 CALCULATION OF IMPUTED INCOME TAX

 C5.1 Calculation of Imputed Income Tax 

The calculation of imputed income tax includes a flow-through tax component that is the total of the corporate income tax,
and the greater of corporate surtax and large corporations tax. This flow-through component estimates the income taxes that will be due and payable by the Owner to income tax authorities. The imputed income tax also includes a deferred tax component
called the transitional tax. This deferred component is a reduction of the total imputed income tax that estimates the net present value of the tax shield that will be realised by the Owner in future 

INDEPENDENT ASSESSMENT TEAM 23 Final Version 

 

 
  
 Sundance
Units 5 and 6 Schedule C 
 Years. The tax shield represents the tax benefits of undepreciated capital cost pools
at the end of the PPA period. In addition, an income tax true-up component is added to the imputed income tax in order to account for any changes in forecasted indices as well as changes in income tax rates that occur during the course of a Year.

 The Imputed Income Tax for this Unit u for the Current Year y (ITuy) shall be determined as follows:

 ITuy = CITuy + max[CSTuy, LCTuy] + FTTuy + PTTuy + ITTUuy 

where CITuy is the Corporate Income Tax for this Unit u for the Current Year y as determined in Article C5.2, CSTuy is the
Corporate Surtax for this Unit u for the Current Year y as determined in Article C5.5, LCTuy is the Large Corporations Tax for this Unit u for the Current Year y as determined in Article C5.6, FTTuy is the Federal Transitional Tax for this Unit u
for the Current Year y as determined in Article C5.9, and PTTuy is the Provincial Transitional Tax for this Unit u for the Current Year y as determined in Article C5.10; 
 where the Imputed Income Tax Trueup for the Current Year y (ITTUuy) shall be determined as follows: 
 ITTUuy = ACITu(y-1) + max[ACSTu(y-1), ALCTu(y-1)] + AFTTu(y-1) + APTTu(y-1) 
 where ACITu(y.i) is the difference between the forecasted amount for Actual Corporate Income Tax for this Unit u for the Previous Year (y-1) otherwise determined in Article C5.2 and the
actual amount calculated using actual indices and actual tax rates for the Previous Year (y-1), ACSTu(y-1) is the difference between the forecasted amount for Actual Corporate Surtax for this Unit u for the Previous Year (y-1) otherwise determined
in Article C5.5 and the actual amount calculated using actual indices and actual tax rates for the Previous Year (y-1), ALCTu(y-1) is the difference between the forecasted amount for Actual Large Corporations Tax for this Unit u for the Previous
Year (y-1) otherwise determined in Article C5.6 and the actual amount calculated using actual indices and actual tax rates for the Previous Year (y-1), AFTTu(y-1) is the difference between the forecasted amount for Actual Federal Transitional Tax
for this Unit u for the Previous Year (y-1) otherwise determined in Article C5.9 and the actual amount calculated using actual indices and actual tax rates for the Previous Year (y-1), and APTTu(y-1) is the difference between the forecasted amount
for Actual Provincial Transitional Tax for this Unit u for the Previous Year (y-1) otherwise determined in Article C5.10 and the actual amount calculated using actual indices and actual tax rates for the Previous Year (y-1). 

C5.2 Calculation of Corporate Income Tax 
 The corporate income tax comprises of Federal and Provincial components. Both income tax calculations are based upon cost of equity and cost of preferred stock representing the after-tax
return earned in any Year. The net return is adjusted for permanent and timing differences between accounting and taxable income. The adjusted net return is then grossed-up to reflect the before-tax net return required. 

The Corporate Income Tax for this Unit u for the Current Year y (CITuy) shall be determined as follows: 

CITuy = FITuy + PITuy 
 FITuy= [(COEuy + COPuy + DEPNuy + IDNSCuy - Sc FCCAcuy + IFPDuy + FOTDuy) / 

INDEPENDENT ASSESSMENT TEAM 24 Final Version

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