Amended And Restated Power Sales & Agency Agreemnt

Exhibit 10.27


AMENDED AND RESTATED
POWER SALES AND AGENCY AGREEMENT


THIS AMENDED AND RESTATED POWER SALES AND AGENCY AGREEMENT (this "Agreement") is entered into as of this 15th day of July, 1999 between NRG Power Marketing, Inc. ("Power Marketing"), a Delaware corporation, and Somerset Power LLC, a Delaware limited liability company (the "Owner Entity") (each individually a "Party", or collectively the "Parties").


RECITALS


1. The Owner Entity has entered into that certain Asset Purchase Agreement, dated as of October 13, 1998, as amended, between Montaup Electric Company, a Massachusetts corporation ("the Seller") and NRG Energy, Inc., a Delaware corporation ("NRG"), by the assignment by NRG to the Owner Entity of NRG's rights and obligations thereunder (the "Asset Purchase Agreement"), to acquire from the Seller certain generating facilities located in Somerset, Massachusetts.


2. Pursuant to the Asset Purchase Agreement, Power Marketing has entered into the Transition Energy Agreements (as defined below) pursuant to which, for a certain period of time, Power Marketing is obligated to provide Power (as defined below) to certain parties.


3. The Owner Entity wishes to retain the services of Power Marketing, as its agent, to (i) manage, market and sell its Power (including any Power necessary to meet Power Marketing's obligations under the Transition Energy Agreements), (ii) to manage, procure and provide, as the case may be, the requirements of the Owner Entity for Fuel (as defined below) and to (iii) market, sell and purchase, as the case may be, the Emission Credits (as defined below) generated in or necessary for the conduct of the business of the Owner Entity.


4. Power Marketing desires to (i) manage, market and sell all of the Owner Entity's Power (including any Power necessary to meet the obligations of Power Marketing under the Transition Energy Agreements), (ii) to manage, purchase and provide the Owner Entity's requirements for Fuel and (iii) to market, sell and purchase, as the case may be, the Emission Credits generated in or necessary for the conduct of the business of the Owner Entity. Power Marketing also desires to purchase Power from the Owner Entity to meet its obligations under any of the Transition Energy Agreements to which it is a party, and otherwise where such Power is available for purchase.


5. The Owner Entity and Power Marketing are parties to that certain Power Sales and Agency Agreement, dated March 29, 1999 (the "Original Agreement").


6. The Owner Entity and Power Marketing desire to amend and restate the Original Agreement as hereinafter set forth, effective as of the date hereof.


AGREEMENT


In consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledge, the parties hereto agree as follows:


ARTICLE 1
DEFINITIONS


Whenever used in this Agreement with initial capitalization, the following terms shall have the meanings specified or referred to in this Article 1.


"Affiliate" means, with respect to any person or entity, (i) each entity that such person or entity Controls, (ii) each person or entity that Controls such person or entity, and (iii) each entity that is under common Control with such person or entity. 2


"Agreement" shall have the meaning provided in the introductory paragraph hereof.


"All-in Fuel Cost" means, for any period, the actual cost incurred, on a FIFO basis, by Power Marketing for any natural gas supplied by Power Marketing to the Owner Entity during such period, including the spot or contract price paid therefor by Power Marketing, all costs of transportation and delivery of such gas, and all taxes paid or payable by Power Marketing in association therewith.


"Ancillary Services" means reserves and other ancillary services provided for in the rules of the Power Pool.


"Asset Purchase Agreement" shall have the meaning set forth in Recital 1 hereof.


"Business Day" means any day other than a Saturday, a Sunday, or a holiday on which national banking associations in Minnesota or New York are not open for business. A Business Day shall begin at 8:00 a.m. and end at 5.00 p.m. Eastern Standard (or Daylight) time.


"Capacity" means the aggregate installed generating capability of all of the Units located at the Station, measured in megawatts ("MW") or kilowatts ("KW").


"Closing" means the closing of the transactions contemplated by the Asset Purchase Agreement.


"Closing Date" means the date and time at which the Closing actually occurs.


"Control" means the possession, directly or indirectly, through one or more intermediaries, of (i) in the case of a corporation, a majority of the outstanding voting securities thereof; (ii) in the case of a limited liability company, partnership, limited partnership or venture, the right to more than 50% of the distributions therefrom (including liquidating distributions); (iii) in the case of a trust or estate, including a business trust, a majority of the beneficial interest therein; and (iv) in the case of any other entity, a majority of the economic or beneficial interest therein.


"Delivery Point" means the point at which the Station is connected to the Seller's transmission system as indicated on a one-line diagram included as part of Exhibit A to the Interconnection Agreement or such other delivery point as Power Marketing and the Owner Entity shall Mutually agree.


"Dispatch" means the direction of the Power output of the Station, including direction in accordance with instructions from the ISO.


"Fuel" means coal, natural gas, fuel oil, petroleum and petroleum distillates required to operate the Units.


"Emissions Credits" means credits, in units established by applicable regulatory authorities, resulting from the reduction of air pollutants (including NOx and SOx) from an emitting source or facility, that have been certified by the applicable regulatory authority.


"Energy" means electric energy, measured in megawatt hours ("MWh") or kilowatt hours ("KWh"), generated and deliverable by the Owner Entity.


"Force Majeure" means an event which (i) is not within the reasonable control of the Party claiming Force Majeure (the "Claiming Party"), (ii) was not caused by the acts, omissions or delays of the Claiming Party or any person over whom the Claiming Party has control, (iii) is not an act event or condition the risks or consequences of which the Claiming Party has expressly agreed to assume pursuant to this Agreement, and (iv) by the prompt exercise of due diligence, the Claiming Party is unable to overcome or avoid or cause to be avoided. Subject to the foregoing, Force Majeure includes, but is not restricted to acts of God, fire, civil disturbance, labor dispute, labor or material shortage, sabotage, or action or restraint by court order of any public or governmental authority (so long as


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the Claiming Party has not applied for or assisted in the application for, and has opposed where and to the extent reasonable, such government action).


"Good Utility Practice" means any of the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry during the relevant time period, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at the lowest reasonable cost consistent with good business practices, reliability, safety and expedition. Good Utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to be practices, methods or acts generally accepted in the region and consistently adhered to by the Owner Entity. Good Utility Practices shall include, but not be limited to North American Electric Reliability Council ("NERC") Criteria & Guidelines, Northeast Power Coordinating Council ("NPCC") Criteria & Guidelines, and the criteria, rules and standards of the Power Pool, as they may be amended from time to time including the rules, guidelines and criteria of any successor organization to the foregoing entities.


"Governmental Entity" means the government of the United States, or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.


"Interconnection Agreement" means the Interconnection Agreement. dated as of October 13, 1998, entered into by the Owner Entity or Power Marketing, by the assignment by NRG of NRG's rights and obligations thereunder, and the Seller.


"Interest Rate" means, for any date, the interest equal to the "Prime Rate" as may be published on the first Business Day of the applicable calendar month in The Wall Street Journal under "Money Rates."


"ISO" means the independent system operator established to sell Power in the market served by the Station.


"Lead Participant" means the person responsible for bidding or scheduling Power of the Station into the ISO and to prepare and submit such documentation as may be required for Dispatch of the Station.


"Net Power Revenue" means, for any period, the gross receipts during such period from sales by Power Marketing of Station Power, including any amounts paid by the Seller to Power Marketing during such period under the Transition Energy Agreements, less (i) any payments made by Power Marketing during such period to the Seller under the Transition Energy Agreements, (ii) the amount of any transmission or other costs incurred by Power Marketing during such period in delivering Station Power to the point of sale, (iii) the amount of any state or federal Taxes paid or required to be paid by Power Marketing with respect to the sale of Station Power or otherwise with respect to the performance of its obligations hereunder, and (iv) the amount of any other costs paid by Power Marketing during such period in connection with the sale of Station Power, including an arms-length, commercially reasonable allocation of overhead and administrative expense.


"Operator" means NRG Somerset Operations, Inc., a Delaware corporation, acting in its capacity as Operator under the Operation and Maintenance Agreement, dated the date of this Agreement, between the Owner Entity and such Operator.


"Power Pool" means the New England Power Pool or its successor.


"Power" means Capacity, Energy or Ancillary Services or any combination thereof, as the case may be.


"Station" means the generating facilities being acquired by the Owner Entity pursuant to the Asset Purchase Agreement.


"Station Power" means the aggregate Power generated by the Station from time to time.


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"Taxes" means any tax, charge. impost, tariff, duty or fee of any kind charged, imposed or levied, directly or indirectly, by any Governmental Entity, including any value-added tax, sales tax, stamp duty, gross receipts tax, property tax, registration fee or license, but excluding any tax on income.


"Transition Energy Agreements" means the agreements between the Seller and the Owner Entity or Power Marketing listed on Exhibit A hereto.


"Unit" means each of the operating electricity generating units located at the Station.


ARTICLE 2
TRANSACTIONS


2.1 Power Transactions.


(a) Right to Power. Power Marketing shall have the exclusive right
to take and sell, trade or otherwise deal in all of the Station Power not
sold or committed by the Owner Entity.


(b) Delivery of Power. Station Power shall be taken by Power
Marketing at the Delivery Point, and the Owner Entity shall take all
commercially reasonable efforts, in accordance with Good Utility Practice,
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