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The per-ton price of coal under the TEPCO contract was a
base price adjusted by Santa Fe’s actual mining costs. The
contract was to run through December 31, 2009, or until the
retirement of the power station but could be reopened for
contract price renegotiation during July 2008 and at 5-year
intervals after 2010. Specifically, the contract term was to
extend until the earlier of either: (1) The date when
Springerville Station Units 1 and/or 2 were retired from
commercial operation; or (2) sometime after December 31, 2009, if
the parties were unsuccessful in their good faith price
renegotiations for any contract extension period. During the
contract term Santa Fe was not permitted to sell coal to others
if such sales would impair its ability to satisfy the supply
contract obligations to TEPCO.
The TEPCO supply contract “[inured] to the benefit of and
[was] binding upon the Parties and their respective successors
and assigns.” The original 1983 contract allowed each party to
assign its rights and duties so long as the assignee or delegatee
“assumes” the rights and duties of the assignor and so long as
the assignee or delegatee is “capable of performing this
Agreement.” The 1983 contract also required any assumption by an
assignee to be accomplished in a written document entered into
with the other parties to the 1983 contract.
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Last modified: May 25, 2011