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HomeMy WebLinkAbout2004-185 o AGREEMENT CONCERNING DELIVERY a AND USE OF STORMWATER THIS AGREEMENT is made and entered into this 12th day of August, 2004 , by and between INDIAN RIVER COUNTY, a political subdivision of the State of Florida ("County"), INDIAN RIVER FARMS WATER CONTROL DISTRICT, a Special District located in Indian River County, Florida ("District") and BLUE HERON ENERGY CENTER, L.L. C . , a wholly owned Calpine Corporation subsidiary, a Delaware limited partnership , with offices at The Island Center, 2701 N. Rocky Point Drive, Suite 1200, Tampa, Florida 33607 ("Calpine") . Recitals : Recital 1 . Calpine has obtained special exception approval and conceptual site plan approval from the County to construct a nominal 1 , 080 mw natural gas-fired combined cycle electricity generating power plant ("Plant") on approximately 50 acres east of and adjoining Interstate 95 ("I- 95 ") and immediately north of the south County boundary line, adjacent and west of 74th Avenue ("Blue Heron Energy Center" or ` EHEC") , located within Indian River County. Recital 2 . Calpine estimates that the average annual water requirements for BHEC to be 7 . 5 million gallons per day of water ("MGD") with a maximum peak daily demand of 9 . 1 MGD . 8 . 5 .04 Water Agreement Recital 3 . As part of the planning for BHEC , Calpine has investigated a wide range of potential sources for the cooling water. Calpine, in cooperation with the County and the District, has determined that the District ' s canal network has sufficient capacity to provide water, in the form of surface water and stormwater ("stormwater" as used herein shall mean water above the minimum level established by the District from time to time for water level guidelines in the District ' s canal system) , in the quantity and of the quality required by BHEC . Recital 4 . Calpine plans to build BHEC in two 540 MW phases . Calpine plans to have BHEC Phase I in operation in 2007 . In order to have Phase I of the Plant operational in 2007 , Calpine must have a water supply system in place for start-up and testing by June 2006 . The target operational date for Phase II has not yet been set; however, it will be subsequent to Phase I. All of the provisions of this Agreement shall be applicable to both phases of the Blue Heron Energy Center, except where the terms or context of this Agreement clearly indicate to the contrary. Recital 5 . The County, in cooperation with the District, St. Johns River Water Management District ("SJRWMD") , and the City of Vero Beach ("Vero Beach") , has completed a Stormwater Management Plan ("Master Plan") for stormwater impoundment and treatment which will meet the goals of improving the quality and reducing the quantity of surface and stormwater released into Indian River Lagoon, which Master Plan involves the incorporation and use of the District ' s system, works and structures . 2 8 .5 .04 Water Agreement Recital 6 . Calpine, the County and the District recognize that the stormwater park proposed in the Master Plan can be the source of cooling water for BHEC and that Calpine can be a contributing partner in the County' s stormwater management efforts . NOW, THEREFORE , in consideration of the mutual promises and agreements set forth herein and other valuable consideration given one party to the other, the County, the District and Calpine hereby agree as follows : 1 . Incorporation of Recitals : The foregoing recitals are incorporated as if fully restated in this Agreement. 2 , Regional Stormwater Park : a. The County, the District and Calpine will identify a parcel(s) of land up to 160 acres available and desirable for a regional stormwater park within the area shown on Exhibit "A", Stormwater Park Location, to function as a water management facility pursuant to the Master Plan. b . Within 60 days of execution of this Agreement, Calpine, through a wholly owned subsidiary, or the County under express written authority from Calpine, will enter into an Option Contract(s) with the owner or owners of the property identified as desirable for the regional stormwater park under Paragraph 2 . a, with Calpine ' s subsidiary being the purchaser at a price not to exceed fair market value . Fair market value shall be determined by an appraisal to be 3 8 .5 .04 Water Agreement performed by an appraiser selected by Calpine and approved by the County, which approval shall not be unreasonably withheld or delayed . If Calpine, or the County under authority from Calpine, is unable to negotiate an Option Contract at fair market value or less, then Calpine shall not be obligated to enter into the Option Contract to purchase the property. The Option Contract shall be in a form as mutually agreeable to the County, the District and Calpine, with a closing date agreeable to the County, the District, Calpine, and the seller or sellers . The County or other governmental agency may contribute funds above the fair market value price to complement Calpine funding. C , Upon Calpine ' s purchase of the property identified in Paragraph 2 .b , Calpine shall, at no cost to the County or District, transfer or otherwise convey fee simple title to such property to the County for the purpose of constructing, owning and operating the stormwater park. Calpine ' s purchase of the property will be conditioned upon and will follow receipt of certification of BHEC by the Power Plant Siting Board. The County may, with the prior consent of Calpine, which consent shall not be unreasonably withheld or delayed, include passive recreation on the property to complement the stormwater park, provided that such passive recreation does not impact the County' s ability to operate the stormwater park in compliance with the requirements of this Agreement, or those of the District . d. The County, working with SJRWMD , shall be responsible for the design, permitting, construction, operation and maintenance of the stormwater park and all related costs . The District shall be responsible for establishing and modifying, from time to time as necessary, minimum and maximum water level requirements in the canal system ("District ' s Water 4 8 .5 .04 Water Agreement Level Guidelines" for withdrawal of water from the District ' s canal system for use by others, including Calpine) . The County will operate the stormwater park so as to maximize the water inventory available to BHEC . Notwithstanding anything herein provided to the contrary, BHEC will not be permitted to withdraw, at any time, water from the upper pool of the District ' s system. The County shall also be responsible to make the necessary improvements and/or modifications to its stormwater collection, storage and delivery systems, as needed, (except the works or structures of the District) in order to comply with the terms and provisions of this Agreement . The design, permitting, construction, operation and maintenance of the stormwater park and improvements and/or modifications to the stormwater collection, storage, and delivery systems, shall be done in accordance with the requirements of Exhibit ` B ", Stormwater Park and Water Supply System Operational requirements , and the District ' s Water Level Guidelines . 3 , Connection Corridor and Construction Costs : a. After purchase of the property for the stormwater park, Calpine shall be responsible for all costs of designing, permitting, constructing and connecting the stormwater pipelines and pumping stations from : (i) the District' s Lateral "C" canal to the design discharge point into the stormwater park; (ii) for the stormwater park bypass ; and (iii) from the design withdrawal point at the stormwater park to BHEC (collectively the "Pipelines") . Calpine, the County and the District, will jointly determine the actual withdrawal point location from the lower pool, immediately downstream of the Lateral "C" canal radial gate, dependent upon the quantity of stormwater available at the withdrawal location. The Pipelines shall be constructed according to routing agreed 5 8 . 5 .04 Water Agreement • I ' upon by Calpine, the County, and the District, as shown on Exhibit "C", Pipeline Routing . The pipelines and pumping stations will be designed to satisfy the needs of the BBEC , as described in this Agreement, and such design, including the installation of flow meters, will be completed by Calpine and will comply with the County' s and the District ' s technical standards and specifications, and will be subject to review and approval by the County and District . The County and the District shall allow Calpine, at no cost to Calpine, to utilize all rights-of-way and easements , necessary or required for the construction of the Pipelines , the routing of which is shown on Exhibit "C" . Under no event shall the County or the District be obligated to exercise its eminent domain authority for the benefit of Calpine . Since the County is not contributing funds toward the construction of the Pipelines , Calpine shall not be required to comply with the Competitive Consultants Negotiation Act or any particular bidding process . b . Following construction of the Pipelines : A. Upon completion of construction of the pipelines and pumping stations, Calpine shall transfer the ownership of the pipelines and pumping stations located in the District ' s rights-of-way, as shown on Exhibit "C" to the District. Calpine will maintain ownership of all pipelines and pumping stations not located in the District ' s rights -of-way. (i) The County and the District shall enter into a Lease, with terms to be mutually agreed upon, for the following equipment located in the District ' s rights-of-way ("County Leased Property") : (a) the pipeline from the Lateral "C" canal 6 8 .5 .04 Water Agreement withdrawal point to the stormwater park; and (b) the pumping stations at the Lateral "C" withdrawal point. (ii) Calpine and the District shall enter into a Lease, with terms to be mutually agreed upon, for the following equipment located in the District ' s rights-of-way: (i) the pipeline from the stormwater park design withdrawal point to BHEC ; and (ii) the stormwater park bypass . B . The County agrees that it will be responsible for the maintenance, after the applicable warranty period, and operation, consistent with the District ' s Water Level Guidelines , of: (i) the pipeline from the Lateral "C " canal withdrawal point to the stormwater park; and (ii) the pumping stations at the Lateral "C" withdrawal point. In the event of the County' s loss of use or destruction of such pipeline , pumping station and/or stormwater park, the County agrees to give prompt telephone notice to Calpine followed by written notice of its inability to supply stormwater of the quantity defined herein, and the County agrees to initiate good faith efforts to repair the pipeline and/or pumping station, regardless of the cause of the interruption, within 24 hours after discovery by the County or reported by Calpine ; and C . Calpine shall be responsible for the maintenance and operation, consistent with and according to the District ' s Water Level Guidelines, of: i) the pumping station at the stormwater park design withdrawal point; ii) the pipeline from the stormwater park design withdrawal point to BHEC ; and iii) the stormwater park bypass . 7 8 .5 .04 Water Agreement D . The District shall allow unrestricted access to the County and Calpine to the land and equipment owned by the District for the purpose of maintaining the pumping stations , pipelines and other related equipment defined in Paragraph 3 .b .A above . C , Calpine agrees to obtain all approvals required to connect BHEC to the pipeline from the stormwater park to BHEC . d. The County and the District agree that Calpine has the right to access and cross their property and right-of-way when necessary for Calpine to perform the work required under this Agreement . e . As an inducement to the District and to the County to enter into this Agreement, Calpine waives and covenants not to exercise any power of eminent domain Calpine may have, whether state or federal, at any time against County or District to acquire property of either or any right thereto or interest therein. 4 . Term, Volume and Delivery Schedule : a. After completion of the stormwater park and associated pumping stations and piping, the County shall deliver stormwater, which may include limited Brine injection as defined in Paragraph 7 , to Calpine from the regional stormwater park, through the Pipelines s 8 .5 .04 Water Agreement described above in Paragraph 3 , in quantities set forth herein, and in accordance with the terms and provisions of this Agreement. b . This Agreement shall be effective upon execution and shall be for a term of 20 years from June 1 , 2006 . Calpine shall have the option to extend this Agreement for two (2) additional terms of five years each, upon written notification to the County and to the District by Calpine at least 180 days prior to the expiration of the initial 20 year term and any subsequent term thereafter ("Term" to include the initial 20 year term and all extensions thereto) . The parties may agree to extend the Term of this Agreement beyond the two additional five year extensions , by mutual agreement of the parties . Notwithstanding this provision, in the event any change in state or federal law, rule, regulation or policy subsequently prohibits the use of the County' s or the District ' s stormwater by Calpine in the manner contemplated by this Agreement, with such prohibition being agreed upon by the parties or determined by a court of competent jurisdiction, this Agreement may be terminated by any party with 180 days notice to the other parties , and no party will have any further obligations to the others upon such termination other than costs associated with the disposal of accrued solids to be paid by the County as defined in Paragraph 7 .b . C , Calpine agrees to notify the County and the District 180 days prior to the date it will begin accepting stormwater. The County, the District and Calpine acknowledge that the scheduled date for commencement of stormwater delivery under this Agreement is June 2006 . The County, the District and Calpine will perform their respective obligations under this Agreement 9 8 . 5 .04 Water Agreement required to meet this schedule. In the event the stormwater park is not completed in a manner to support this schedule, then the provisions of Paragraph 4 . g shall apply. d. The total amount of stormwater to be delivered from the County to Calpine shall be up to 9 . 1 MGD at a rate not to exceed 7000 gallons per minute ("GPM") as discussed in Paragraph 6 .b . BHEC Phase I will require a maximum peak daily demand of 4 . 55 MGD at a rate not to exceed 3500 GPM . e . The County reserves the right to use stormwater from the stormwater park for other purposes, should such use become feasible in the future ; however, subject only to agricultural demands , it is understood and agreed that Calpine shall have the right of first use and shall be entitled to utilize and receive all of the County' s stormwater from the stormwater park up to the amounts specified in Paragraph 4 . d above, subject to the District ' s Water Level Guidelines, during the Term of this Agreement. Neither the County nor the District shall allow any new non- agricultural withdrawals or uses of the water from the stormwater park that would prevent the County from satisfying its obligations to Calpine under this Agreement. f. The District reserves the right to use stormwater in its system for other purposes in the event of an emergency and Calpine acknowledges that, in times of drought or dry periods , water may not be available ; District, however, will not prefer any other large industrial uses over the needs of Calpine for water subject to the District's Water Level Guidelines , during the Term of this Agreement . 10 8 .5 .04 Water Agreement g. Throughout the Term of this Agreement, the parties acknowledge that the delivery of stormwater from the stormwater park will be as available. The County acknowledges that if the County cannot deliver the daily stormwater of the quantity defined herein to Calpine during the Term of this Agreement, Calpine may suffer damages ; however, Calpine, its successors and assigns , will not assert a claim for damages against the County or District but may pursue other remedies that may exist at law or in equity. The County, therefore, must give prompt telephone notice followed by written notice of its inability to supply stormwater of the quantity defined herein to Calpine . Calpine acknowledges that from time to time there may be an interruption of flow due to failure of mechanical equipment at the Lateral "C " withdrawal location or at the stormwater park, failure of the pipeline between Lateral "C" and the stormwater park, and/or failure due to other causes . The County agrees to use its best efforts to repair or restore the flow and/or rectify the non- compliance, regardless of the cause of the interruption, within 24 hours after discovery by the County or reported by Calpine , If the County is not able to deliver stormwater of the quantity defined herein, Calpine may: a) with prior notice to the County, and subject to and in compliance with the District ' s Water Level Guidelines, use the stormwater park bypass to deliver stormwater directly from the Lateral "C" withdrawal point to BHEC , and, under this operational mode, the County shall be responsible for the operation and maintenance costs associated with the pumping station located at the Lateral "C " withdrawal point; or b) at Calpine ' s own cost, obtain the required quantity of water from an alternative source, which source(s) may include, but shall not be limited to , Calpine ' s own holding ponds or other sources , subject to and in compliance with the District ' s Water Level Guidelines , until such time as the County is able to deliver stormwater in compliance with the terms 11 8 . 5 .04 Water Agreement and provisions of this Agreement . Calpine shall be responsible for operation, subject to the District ' s Water Level Guidelines , and maintenance of the pumping station at the stormwater park design withdrawal point and pipeline from the stormwater park design withdrawal point to the BHEC , as defined in Paragraph 3 .b . C , and the County shall have no responsibility for such pumping station at the stormwater park design withdrawal point and pipeline from the stormwater park design withdrawal point to the BHEC . 5 , Stormwater Quality : a. The County agrees to design, permit, construct, operate and maintain the stormwater park in accordance with Exhibit ` B" hereto , and to make the necessary improvements or modifications to its stormwater collection, storage, or delivery systems, as needed, in order to comply with the terms and provisions of this Agreement during the Term of this Agreement. b . The County shall test the constituents listed in Exhibit "B" only if they are required as part of the County' s FDEP or SJRWNID stormwater management permit or permits . The County shall supply Calpine a copy of its FDEP and SJRWMD permits and all renewals promptly upon their issuance . At the same time the County shall provide Calpine with a listing of all constituents to be tested and the testing frequency. Calpine may test all or selected parameters to determine the water quality delivered by the County. 12 8 . 5 .04 Water Agreement C , The County will provide to Calpine and the District will make available to Calpine at the District ' s office copies of all test results and reports which the County and/or the District are required to file with any local, state or federal agencies with regard to the stormwater. Such test results and reports shall be provided to Calpine at the same time these materials are filed with the appropriate agencies . d. Throughout the Term of this Agreement, Calpine may perform water quality testing of the stormwater to be delivered by the County from the stormwater park. This provision, however, does not obligate Calpine in anyway to perform independent testing or metering of the stormwater provided by the County. In the event that Calpine performs such testing, the County and/or the District may request and Calpine shall provide copies of all test results and reports so requested. e . In the event that Calpine , in good faith, determines that the quality of the stormwater, with or without Brine injection, delivered by the County, exceeds the maximum acceptable limits as shown on Exhibit "D", "Constituent Make-Up of the Water in the District ' s Canals and the Brine Discharge from the County' s South Treatment Plant", thereby rendering the stormwater unusable by BHEC, Calpine may: i) cease injecting Brine into the pipeline from the stormwater park to BHEC , or ii) cease accepting stormwater from the County ("Shutoff Period"), until such time as the stormwater is within the maximum acceptable limits as shown on Exhibit "D". Calpine agrees to notify the County as soon as practicable, but under no circumstances later than 24 hours after discovery by Calpine of any stormwater that is supplied from the stormwater park to 13 8 .5 .04 Water Agreement BHEC which Calpine deems unusable, with justification of such decision by Calpine and the reasons for Calpine ' s decision. Notification to the County will be made by telephone and will be followed by written notification. In the event Calpine ceases accepting storm water from the County due to such water exceeding the maximum acceptable limits as shown on Exhibit "D", Calpine may: a) with prior notice to the County, and subject to and in compliance with the District ' s Water Level Guidelines , use the stormwater park bypass to deliver stormwater directly from the Lateral "C" withdrawal point to BHEC , and, under this operational mode, the County shall be responsible for the operation and maintenance costs associated with the pumping station located at the Lateral "C" withdrawal point ; or b) at Calpine ' s own cost, obtain the required quantity of water from an alternative source , which source(s) may include, but shall not be limited to , Calpine ' s own holding ponds or other sources, subject to and in compliance with the District ' s Water Level Guidelines . Such delivery via the stormwater park bypass or from alternate sources shall continue until such time as Calpine determines that stormwater to be delivered by the County is within the maximum acceptable limits as set forth on Exhibit "D" and usable at BHEC . Calpine shall be responsible for operation and maintenance of the pumping station at the stormwater park design withdrawal point and pipeline from the stormwater park design withdrawal point to the BHEC , as defined in Paragraph 3 .b . C , and the County shall have no responsibility for such pumping station at the stormwater park design withdrawal point and pipeline from the stormwater park design withdrawal point to the BHEC . The provision of Paragraph 5 .b shall apply during such Shutoff Period. f. Exhibit "D " represents a sampling of the water in the District canals and the Brine discharge from the IRC South Plant as of the time of execution of this Agreement . 14 8 .5 .04 Water Agreement Both the County, the District and Calpine reserve the right to renegotiate applicable portions of this Agreement in the event of any significant change in the constituency make-up of either the District canal water or the Brine from the representative sampling attached as Exhibit "D " . g . Calpine shall make no discharges into District ' s system and County will at all times , meet District ' s reasonable requirement for quality of water discharged into District ' s system from the stormwater park. 6 . Use and Discharge of Stormwater : a. Calpine may use the stormwater as a source of cooling water for BHEC , for storage, exclusive of any Brine, in off- site holding ponds , or for any on-site purposes and in any manner determined by Calpine ; provided, however, (i) Calpine ' s use of the stormwater shall at all times be consistent with all local, state and federal guidelines and requirements ; and, (ii) Calpine shall not discharge any stormwater obtained from the County or District, directly or indirectly into any surface waters of the State of Florida, canals of the District, or other waters without the express written authorization of the appropriate permitting agency, and shall not sell or permit use of such stormwater by any third party or for any purpose not essential for operations at BHEC . . b . Calpine may withdraw from the stormwater park at the design withdrawal point, up to 9 . 1 MGD at a rate not to exceed 7000 GPM, unless otherwise agreed to by the County and District. 15 8 .5 .04 Water Agreement C , Calpine shall utilize a "zero liquid discharge system" to eliminate all process wastewater discharge from BHEC as set forth in Calpine ' s Site Certification Application for the Blue Heron Energy Center. d. Throughout the Term of this Agreement the County agrees to accept the solids resulting from the operation of the BHEC zero liquid discharge system at the County landfill, to the extent allowed by the state and federal agencies, and shall grant Calpine such permits or authority as necessary. Calpine, at its option and expense, may choose to dispose of the solids at a location other than the County landfill, however, such decision by Calpine shall not affect the County' s obligation to accept the solids at the County landfill throughout the Term of the Agreement. 7 , Brine Discharge : a. Calpine and the County acknowledge that the County may, at its option, choose to pipe discharge water from the County' s South Plant reverse osmosis water treatment facility ("Brine") to inject into the pipeline from the stormwater park to BHEC for delivery to BHEC . The County may only inject Brine during periods when BHEC is in operation. The Brine injection rate, for Brine within the constituency limits shown on Exhibit "D" in the column labeled "RO Brine Values", shall be limited to eight percent (8 . 0%) of the total flow rate of stormwater being supplied to BHEC . In the event the Brine exceeds the constituency limits shown on Exhibit 16 8 . 5 .04 Water Agreement "D" in the column labeled "RO Brine Values", Calpine and the County shall, in good faith, negotiate a reduced Brine injection rate based on maintaining the water supply constituency within the "Maximum Allowable Limits" as shown on Exhibit "C" . Calpine shall provide and operate a control system to control the Brine injection rate at the above level unless Calpine provides notification to the County to reduce the level and provides justification for such reduction in the flow level . The design of the control scheme will be mutually agreeable to Calpine and the County. Calpine and the County, based on actual operational data and experience, may agree to inject Brine in quantities greater than those specified above. b . When and only when the County is supplying Brine in accordance with Paragraph 7 . a, the County shall reimburse Calpine for the disposal of solids associated with the Brine treatment, in an amount to be determined on a monthly basis in accordance with the following : Amount of Reimbursement = [ADBA/MIR] *[SF *SDC] ADBA = Average Daily Brine Acceptance (calculated on a monthly basis) MIR = Maximum Injection Rate: Phase I MIR = 300, 000 gallons per day Phase I and II MIR = 600, 000 gallons per day SF = Solids Factor = Additional solids generated due to acceptance of brine in cooling water supply to BHEC The Solids Factor will beset at 0. 4 (40%) for the first year of operation . After the first full year of operation, the Solids Factor will be modified 17 8 . 5 .04 Water Agreement based on the actual solids generated due to the acceptance of brine in the cooling water supply to BHEC. SDC = Solids Disposal Costs for the respective month c . In the event the injection of Brine into the pipeline from the storrnwater park to BHEC causes the resulting solids from the BHEC zero liquid discharge system to be reclassified with a disposal fee differing from that specified in Paragraph 8 . c, then the County shall be responsible for the cost in excess of the cost calculated using the estimated quantity of solid waste generated in the BHEC zero liquid discharge system without Brine mJ ection at the disposal fee specified in Paragraph 8 . c . d. If the County elects to build a pipeline to supply Brine for inj ection into the pipeline from the stormwater park to BHEC as described in Paragraph 7 . a, then all costs associated with the design, permitting and construction of the respective pipeline will be shared at the ratio of 85 % County and 15 % Calpine, with Calpine ' s 15 % limited to a maximum of $ 200, 000 . Calpine, at the time of County' s issuance of the building permit for BHEC , shall, at its option, (i) escrow $200, 000 with the County, or (ii) deliver a Letter of Credit in the amount of $ 200, 000 , presentable on a Florida bank, to secure this obligation . In the event Calpine ' s 15 % share is less than $200 , 000, the County shall refund the excess . The County shall be responsible for the operation and maintenance of such pipeline . 8 . Fees : 18 8 .5 .04 Water Agreement a. Calpine and County acknowledge that the County is intending to establish a stormwater utilization fee . It is anticipated that the fee will be uniform within each drainage basin and will be similar to the County fee for reclaimed water, which at the time of adoption of this Agreement is $ 0 . 1511000 gallons . Upon the County' s adoption of such uniform fee, in an amount similar to the reclaimed water fee, for the delivery and use of stormwater, Calpine shall thereafter begin paying such uniform fee, as may be increased from time to time to reflect increases in the operation and maintenance costs of the County and District, for the stormwater actually delivered to Calpine under the terms of this Agreement . In the event any other non-agricultural users utilizing water from the stormwater park are being charged a lower utilization fee by the County than Calpine, then the fee charged to Calpine shall be decreased, or eliminated, accordingly. In the event any new industrial users utilizing water withdrawn from the same basin within the District ' s canal system are being charged a lower utilization fee by the County than Calpine, or are not being charged any utilization fee by the County, then the fee charged to Calpine shall be decreased, or eliminated, accordingly. b . There shall be no fee charged by the County or paid by Calpine for any Brine which is injected in the pipeline from the stormwater park to BHEC as defined in Paragraph 7 . a. 19 8 .5 .04 Water Agreement C , Calpine shall pay the prevailing rate for disposal of solids, classified as industrial, non-hazardous (garbage) , at the Indian River County landfill, which, at the time of the adoption of this Agreement, is $ 34 . 45/ton. d. No other operational fees shall be paid by Calpine to the County under this Agreement. e . The County shall pay a lease payment to the District for the County Leased Property defined in Paragraph 3 .b .A(i) . The annual lease payment will be $ 1 . 00 (one dollar) firm, non-escalating, for the Term of this Agreement . f. Calpine shall pay a lease payment to the District for the use of the land and structures of the District, as shown on Exhibit "C", and for the pipelines and pumping stations provided to the District pursuant to Paragraph 3 .b . A. The annual lease payment will be equal to the District ' s tax rate, as such may be established for each fiscal year of the District during the Term hereof, times 5200 acres (at the time of this Agreement the District ' s tax rate is $ 14/acre/year) . 9 . Invoicing of Fees : a. During the term of this Agreement, the County shall invoice Calpine at the end of each month for (i) stormwater supplied by the County to BHEC and (ii) zero liquid discharge system solids accepted at the County landfill. Such invoices shall include the credit for the 20 8 .5 .04 Water Agreement previous month solids disposal, as defined in Paragraph 7 .b , if applicable for that month. Calpine shall pay such invoices within thirty (30) days of receipt thereof. b . All undisputed payments properly invoiced by the County for stormwater and acceptance of discharge system solids shall be payable to the County by wire transfer, or such other payment method as the County and Calpine may agree upon. If Calpine fails to pay any undisputed payments properly invoiced by the County when due, Calpine shall owe interest on the unpaid amount, accruing daily at the Late Payment Rate as defined in Section 9 . e below, from the date the same is due until paid . If prior to the expiration of the applicable period for payment of invoices stated above, Calpine disputes that the provision of any stormwater or acceptance of any discharge system solids is in accordance with this Agreement, Calpine shall, prior to the expiration of such period, provide the County with written notice identifying the basis for such dispute and the amount of the payment invoiced by the County in dispute . Thereafter, the payment of such disputed amount shall be deferred until such dispute has been resolved to the satisfaction of Calpine and the County. If there is a dispute about any payment invoiced by the County, the invoiced amount not in dispute shall be promptly paid as described above, and any amount disputed which is ultimately determined to have been payable prior to the actual date of payment shall be paid with interest, at the Late Payment Rate, from the date due to the date of payment . C , During the term of this Agreement, the District shall invoice Calpine annually for the lease payment required pursuant to Paragraph 8 . e, commencing in the month BHEC begins accepting stormwater from the County. 21 8 .5 .04 Water Agreement d. All undisputed lease payments properly invoiced by the District for leased property shall be payable to the District by wire transfer, or such other payment method as the District and Calpine may agree upon. If Calpine fails to pay any undisputed payments properly invoiced by the District when due, Calpine shall owe interest on the unpaid amount, accruing daily at the Late Payment Rate as defined in Section 9 . e below, from the date the same is due until paid. If prior to the expiration of the applicable period for payment of invoices stated above, Calpine disputes that the provision of any leased property is in accordance with this Agreement, Calpine shall, prior to the expiration of such period, provide the District with written notice identifying the basis for such dispute and the amount of the payment invoiced by the District in dispute. Thereafter, the payment of such disputed amount shall be deferred until such dispute has been resolved to the satisfaction of Calpine and the District. If there is a dispute about any payment invoiced by the District, the invoiced amount not in dispute shall be promptly paid as described above, and any amount disputed which is ultimately determined to have been payable prior to the actual date of payment shall be paid with interest, at the Late Payment Rate, from the date due to the date of payment. e . "Late Payment Rate " means a rate of interest per annum equal to the Prime Rate quoted in the Wall Street Journal plus 5 % , or the maximum rate permitted by applicable Law, whichever is less . 10 . Conditions Precedent; Termination : 22 8 .5 .04 Water Agreement a. The parties acknowledge that Calpine is in the process of obtaining permits for the construction of BHEC . If for any reason any permit or permits necessary to construct, operate and maintain the BHEC are not granted, or for any other reason Calpine does not go forward with the BHEC project, then this Agreement maybe terminated by Calpine at its discretion. In the event Calpine has made any payments under the Option Contract(s) as described in Paragraph 2 .b , such payment or payments shall be non-refundable, even in the event of termination pursuant to this Paragraph 10 . b . Calpine shall, at the time of County' s issuance of the building permit for BHEC , comply with the County' s Administrative Policy requirements with respect to insurance and indemnification as set forth in the Indian River County Administrative Policy Manual AM1000 . 6 , Risk Management Section, Insurance Subject, under the subtitle C . Major Contract for Service . At the same time, Calpine shall also provide the same coverage with respect to insurance and indemnification to the District. C , Termination for Default : An " Event ofDefault" is defined as follows : i) a failure by a Party to satisfy its material obligations under the Agreement which is not remedied within thirty (30) days of written notice from the affected Party of such failure ; ii) a failure by Calpine to pay any undisputed amounts properly invoiced by the County or the District within the time period specified for payment which is not remedied within thirty (30) days of written notice from the County or District, as applicable, of such failure ; and iii) a failure by the County to provide the daily stormwater which it is otherwise capable of providing and not utilized to meet agricultural 23 8 . 5 .04 Water Agreement demands per Section 4(e) which is not remedied within thirty (30) days of written notice from Calpine of such failure . If an event of default occurs the affected Party(ies) may terminate this Contract and pursue whatever rights and remedies it/they may have at law or in equity. 11 . Excuse from Performance : If for any reason during the Term of this Agreement, any local, state or federal government or agency shall fail or refuse; (i) to issue any necessary permit or grant any necessary approval ; or (ii) modify any applicable permit or regulation when requested to do so ; or (iii) require any change in the operation of the treatment, transmission, and/or distribution systems for the application and use of the stormwater by Calpine ; then, to the extent that such action shall substantially affect any party' s performance under the terms of this Agreement, the affected party shall be excused from the performance thereof. The parties hereto shall immediately undertake to renegotiate that portion, and only that portion, of this Agreement affected by such requirements so that this Agreement, as renegotiated, will be in conformity with such permits, approvals or requirements . 12 . Decisions by the County or District : In those circumstances set forth herein in which a decision must or can be made by the County or the District, neither the County nor the District shall exercise such discretion in an arbitrary or unreasonable manner, nor will the County or the District unreasonably or arbitrarily 24 8 .5 .04 Water Agreement withhold or delay a decision or approval. For purposes of this Agreement, decisions on behalf of the County shall be made by the County Administrator, unless such decisions are required by law to be made by the County Commission. For purposes of this Agreement, decisions on behalf of the District shall be made by the Superintendent of the District, unless such decisions are required by law to be made by the Board of Supervisors of the District. 13 , Notices : All notices required or authorized under this Agreement shall be given by telephone and in writing, and shall be served by United States Mail to the parties at the addresses listed below (or as such addresses may be changed from time to time in the manner) : COUNTY : Mr. James Davis Public Works Director Indian River County 1840 25th Street Vero Beach, FL 32960 WITH COPY TO : Mr . Joseph A. Baird County Administrator Indian River County 1840 25th Street Vero Beach, FL 32960 DISTRICT : Mr . David Gunter Superintendent Indian River Farms Water Control District 4400 20th Street Vero Beach, FL 32966 25 8 .5 .04 Water Agreement WITH COPY TO : Mr. Michael O ' Haire O ' Haire, Quinn, Candler & Casalino 311 Cardinal Drive Vero Beach, FL 32963 CALPINE : Mr. Donald Walters Vice President Operations Blue Heron Energy Center L. L. C . The Island Center 2701 N . Rocky Point Drive, Suite 1200 Tampa, FL 33607 Fax : ( 813 ) 637-7399 WITH COPY TO : Mr. Joseph Regnery Regional Counsel Calpine Corporation The Island Center 2701 N. Rocky Point Drive, Suite 1200 Tampa, FL 33607 Fax : (813 ) 637- 7399 Mr. Timothy R. Eves Vice President Marketing and Sales Calpine Corporation The Island Center 2701 N. Rocky Point Drive, Suite 1200 Tampa, FL 33607 Fax : (813 ) 637 -7399 14 . Disclaimer of Third Party Beneficiaries : This Agreement is solely for the benefit of the parties signing hereto , their successors and assigns , and no right or cause of action shall accrue upon or by reason hereof to or for the benefit of any third party not a signatory hereof. 26 8 .5 .04 Water Agreement 15 . Severability : If any part of this Agreement is found invalid or unenforceable by any court of competent jurisdiction, such invalidity or unenforceability shall not affect the other parts of this Agreement if the rights and obligations of the parties contained therein are not materially prejudiced, and if the intentions of the parties can continue to be effectuated . To that end, this Agreement is declared severable . 16 . Legal Fees : The prevailing party in any mediation, litigation or appeal relating to this Agreement shall be entitled to recover its reasonable attorneys ' fees from the other party for all matters . Indian River County, Florida, shall be the proper venue for any litigation involving this Agreement. In the event of Federal jurisdiction, venue shall be in the Southern District of Florida. 17 , Entire Agreement : This Agreement supercedes all previous agreements or representations, either verbal or written, heretofore in effect between the County, the District and Calpine that may have concerned the matters covered herein. No additions , alterations, or variations to the terms of this Agreement shall be valid, nor can the provisions of this Agreement be waived by either party unless 27 8 .5 .04 Water Agreement such additions , alterations , or waivers are expressly set forth in writing duly executed by the parties hereto . 18 . Waiver of Jury Trial : It is mutually agreed by and between County, the District and Calpine that each of the parties do hereby waive trial by jury in any action, proceeding or claim which may be brought by either of the parties hereto against the other on any matters concerning or arising out of this Agreement. 19 , Assignment : Calpine shall have the right to collaterally assign, convey and transfer all or part of its interest in this agreement to any one or more financial lenders providing funding to the Project. The County and the District shall consent to and acknowledge such collateral assignment by issuing a consent and acknowledgement, consenting and acknowledging the financial lenders ' rights to step in and take over ownership and operations of BHEC in the event of a foreclosure or similar type action under the lending arrangements . In addition Calpine shall have the right to assign, convey and transfer all of its interest in this agreement to an affiliate or subsidiary that assumes ownership and responsibility for operation of the Project, provided that Calpine shall not be relieved of its obligations . Otherwise, neither party may assign, convey or transfer all or any part of its interest 28 8 .5 .04 Water Agreement in this agreement without the express prior written consent of the other party, which consent shall not be unreasonably withheld. 20 . Choice of Law : This Agreement shall be governed by the laws of the State of Florida. 21 , St. Johns River Water Management District (SJRWMD) : The County and the District shall support Calpine in obtaining the permits and approvals needed from the SJRVWMD to satisfy the terms of this Agreement, including the conditions for site certification from the SJRV;NM for BHEC . 22 , Dispute Resolution : In the event a dispute arises between any of the Parties regarding any alleged breach or default under, or the application or interpretation of any provision of, this Agreement, the aggrieved Party shall promptly notify the other Party(ies) to this Contract of the dispute within thirty (30) days after such dispute arises and the Parties shall attempt in good faith to resolve the dispute . If the Parties shall have failed to resolve the dispute within thirty (30) days after receipt of such notice, each Party shall appoint a representative who shall have full authority to negotiate a settlement, which settlement shall be subject to the approval of the respective Party' s board. If the 29 8 .5. 04 Water Agreement Parties representatives shall have failed to resolve the dispute within thirty (30) days after appointment, the Parties representatives shall seek the assistance of an independent non-binding mediator to mediate a satisfactory resolution. Should the Parties still be unable to resolve the dispute to their individual satisfactions after participating in mediation, any Party may bring suit in the Circuit Court of the 19th Judicial Circuit of the State of Florida, or if such court does not have jurisdiction over such dispute, in the United States District Court of the Southern District ofFlorida. 30 8 .5 .04 Water Agreement Execution : By the signatures of their authorized representatives below, the County, the District and Calpine enter into this Agreement . INDIAN RIVER COUNTY M4id R wa By Commissiot�Co, elaber ger �,� •;, ,y � ; . g Vice-Chairmaft . l ian Rrvergounty and f County C #Yr x$Wytiers BCC Approved : August 10 , 2004 By : S By : &Zn,111 14 Mr. seph A . Baird Mr . William G . Collins II Co ty Administrator County Attorney INDIAN RIVER FARMS WATER CONTROL DISTRICT By : Mr. S ott Lambeth President of Board BLUE HERON ENERGY CENTER, L.L.C. By : paE � Mr. Timothy R. Eves Vice President — Marketing & Sales 31 8 . 5 . 04 Water Agreement EXHIBIT A STORMWATERPARK LOCATION '4 h h d - 1 mu SIF � ' CLL t � r + • fJ l I 1 • + / rl • I ' f w PGf3iYOF oc_ _ . Tzopo NI /} � „ N /. ; NINA /. I uH /iY0/A/Y R/ VER J t fi9RY15 T .V, TCq _ _ i ' } ` " •`" T - OfZ/4//YALE OISTR/GT �� sT ' AN EZ/ VEX GOUI� TY rt` ;: ' - ;.JCr : _ +__�_ v OEC. /933. Pepe i f r P e r ' 1 is � // i i ) n i N I a 1 �' _ ' LIr.1pS6v qe,�, J • 1 ) ; 2 , . , r j- • I i r_ is If Is 8o po�A N I N , , N n 1 .• � . '� • n I N � Y i w t' ' a � J ' / ♦ I , 1 L @� O > I • 1 I • � 1 - 41 niJIV N 1 N I ✓ I N HJT T�. dT. , I n 1 N L tm - - — ' ! 1 1 L , • f 1 -1- - S3 ¢O . C.-10¢pY LsuG , xln1 • ' uIN i . ' ul . ixI / ' T/f'R 3P 30UTH wp�.•C.a< ty-/fa . ��{_ _ �_ _ a_ _ �� y_ _ ' J 1 _ _ _ �J _ _ I � 1 f .wrow. s- / w , J I2 I / J _l J • 7 , • 1l r : r 1 /f , a /J // /L T J /a N is ; "7 ,. ,/ p 1 / , N r • - y L /J ` N I , N /I N N N p N , /f N q I T - f N I /l r N I /l .r N /• p , n , /r r J 1 2 / f 1 J ' t i / r , L .i J t r I > 1 JJ t , 1 f , IOr 1L C J ' f 7 • 1 ) Llf ) 1I II , / Jlf � lI • IG TV. . bT. ; • L ( i J J • , J ' i • L ; • , f I ) r , rA'b®OOLL QiO. IJ , tl a I J /a N f /t // • N I /. ; a ,• r , ' ' / ' 1 � , � N , /JII /L h 1 ) !`; / J N OR : oo jN pIN /Ji lIN II N ' N � • NI NI Nl Ni pl 1 /} ' N /f1 Y �Tw . cT. �3.Tt . m\L� __ I 'f " I I n N 1 n N i /• n r N N CL GLJbo�s ¢D . } ; J t I f I J I f I i J , i I / ' , • / f I J 2 i / 1 • , , / �' J I , ) I f J I . � •- T : 1 / � -- T- J i �Y-�- , -,--- ,-- 4 TM � J>T. GlT1Z.�15 YLO . e ' ' I i ' � � l 1 • I r , / Z /L ' // p IJ 19 N ' J NIN nI N ' , , 1 N tl N /J 1 N �-A( /! a1—• -1 LJ F� I L N , p f /, p i f /e I N L N-1 /J N I // N 1 N i /l is i IJ ' , T N 1 NI is 1 00 l `-� Nl , I / T 1 'S-r•. ..�J'�. 4 ,W. TL,O. Gp�. GQ•_ 1 1 J ' 1 I N 1 N , l 1 ,f 1 2 ' / f 1 J I L I / f I J i ' \ r _ 11 _ , _I f1f > i JI [ ) 1 ♦ Jlf , f • ' fI Ji > I T STN �T. �j,�Y. yLCf3Cl QTr1 � ; 1 > I J • 1 r I • J I 1 ' , , I N ' e I n I J h N NIT L i h � a- Nl nJ nl___ t ,r '- : i i! ` T I , /JIN �..JT A . 5T. �,W. aSLD @O . /J N I /J ' y 1 /. I N I w J 1 OSLO I YIN N /s N I N N 1 N i N I N 1 N I / N , IV t Is N /f 1 I 1 tI / } IJJOI / f ♦ / 1 ' , t ' / J1 , L ' I , ♦ i • 6 1 J i r I • 1 i J I f T _T . _ 7 J I QG.ELLY @O� LVOw•C LpwJ� I I I L • l ; s • i /. ; f n N /. I I i // 1-i,, OR , // , N i s /2 // I _+ /tom T 'T r 1 I--ti/L ' 1-1 N1 ,} is Is /! IN N' IN /J INI NIN IMI /LN /JIN ; ,{ IN f /II N ; N is NI MIN pl Nl /r ; N NIN 1 /I J J ,- / f �J- zi / } IJ ; s / , J lzi / ' l if l / . 1 � J ' t ' / } IJ ' t i / } iJ i • ' / } ' JI JI , f > 1 • J l f a I J J l f ' a r • f I { , { ) 1 • 21 AJC 6T '�-.-�. T¢.PSOIO T¢p\t I L , J I f • J i s 1 > i • J I L i > I • J I a > I J NY//YO/ 9N iVEI COU ' N n ; J /tIn • � z /J � u � / n � f ; u I i // i _ _TjYJ? J3 30UTH f /J i u OR pop OR sl -- Tivl. 3t JOU7<A • / _ /J ' _ J /L N EST. / n p n '' f c % 31 Q 'k 41 % 4 01 pd W V SIF yit IN d4Q 4d Od d bIV 2 Q Vv 1 nv u t d E tF o U ® dp 1U 1 W e K a da a 4 4 4 0 ? 11F < F� ; j a� Legend P d d Ir- 5 Uv N N N AD = Radial Gate on Lateral C (Pump Location) OB = IRC Stormwaterpark location © = Blue Heron Energy Center Site — = Pipeline Routing EXHIBIT B STORMWATER PARK and WATER SUPPLY SYSTEM OPERATIONAL REQUIREMENTS Operation of the stormwater park shall be conducted in a way to meet two objectives, 1 . compliance with water quality goals of the County and SJRVVMD , including applicable permits and regulations ; and 2 . Provision of water for use by BHEC which will not adversely impact the operation of BHEC or its water treatment systems . To this end, Calpine, the County and the District will agree on operating practices for the stormwater park and associated treatment systems that will support these objectives . Specifically: 1 . No metal based coagulants , precipitants or other water treatment chemicals (including alum, or ferric chloride) will be used in the stormwater park 2 . No treatment which would significantly increase the dissolved solids concentration of the stormwater park water (such as lime flocculation) will be used in the stormwater park. 8 . 5 . 04 Water Agreement 3 . No water treatment chemicals containing silica, silicates , or hydroxides of silica will be used in the stormwater park. It is understood that copper hydroxides are used for agricultural purposes and that copper hydroxides will, therefore, be present in the stormwater park as will any agricultural chemicals customarily used in agricultural practices in Indian River County, Florida. 4 . No Brine (reverse osmosis reject) generated from the County' s water treatment systems shall be introduced to the stormwater park. 5 . The collection, handling and disposal of trash, debris , vegetative matter and other solid wastes generated within the stormwater park, including the debris and other solids collected on the traveling screen at Calpine ' s stormwater park pumping station, shall be the responsibility of the County. 6 . The stormwater park will be designed and operated to minimize the accumulation of solids , including debris, sediment, silt and fills, in the area of the pumps withdrawing water to BHEC . Constituent Test Parameters . The following list of constituents shall be tested, as applicable, in accordance with paragraph 5 .b of the Agreement : 8 . 5 .04 Water Agreement CONSTITUENT pH Units Total Phosphorus, mg/1 as P Total Nitrogen, mg/1 as N BOD5 , mg/1 Total Suspended Solids, mg/1 Total Dissolved Solids , mg/1 Calcium Hardness, mg/1 as CaCO3 Magnesium Hardness , mg/l as CaCO3 Sulfate, mg/l as SO4 Silica, mg/l as Si02 Aluminum, mg/1 as Al Iron, mg/1 as Fe Manganese, mg/1 as Mn Priority Pollutants per 40CFR 423 8 . 5 .04 Water Agreement Q) o Not to Scale I aU) � OI . .Z � a o 0 0l0 ma a I -- Of Lu w1 ) Of � I SEC i 13 i m w Z I I I F o1 o SEC 36 I SEC 25 I SEC 24 1 io ; z SEC 12 ,C3� , Deeded i Road R / W o N N W . Canal ' R W io of o o1 W • Canal R/W of oto o1 � of / 01 � i b I Ln ,n u7 ,n LO co i , _ _ _ _ _ _ Range 318 East b t .s= - - - - SECTIONILINE - - - - - - - � - - - - - - - - - t - - - - - 1 - - Ni —R ange East r � 01 001 0 I I I W West SEC 31 I SEC 30 1 SEC 19 I SEC 18 I Flo Canal I R W l=J nI N I / y En s n 1 C vi ui C i vi V) u> SEC 31 (. y oI o t V) V) G� U) U) N0 Cn .L.+ N N o a) U� .- m N o Cn - L 'u � S N v SKETCH SHOWING CANAL AND ROAD RIGHT— OF— WAY W ALONG THE RANGE LINE BETWEEN RANGE 38 AND 39 EAST FROM THE SOUTH COUNTY LINE TO 16TH STREET . 0 INDIAN RNER COUNTY �r-ar-ar SKETCH SHOWING CANAL AND ROAD RIGHT-OE-WAY �m �Ma s>�r Osoor>'m n/ a! Pub//e Works �, r YO10 ,yj_ R �°°° E�/nNring D/HCs/OilRoom ALONG THE RANCE UNE BETWEEN RANCE 38 AND 39 EAST FROM THE SOUTH COUNTY UNE TO 16TH STREET. �/ h EXHIBIT D CONSTITUENT MAKE-UP OF THE WATER IN THE DISTRICT ' s CANALS AND THE BRINE DISCHARGE FROM THE COUNTY' S SOUTH PLANT Parameter EU WCD Canal Values RO Brine Values (ppm) Maximum Allowable (ppm) Limits see NOTE 1 see NOTE 2 Aluminum 0 .41 <0 .3 0 .41 Arsenic <0 . 01 <0. 01 <0. 01 Barium <0 . 1 <0 . 1 <0 . 1 Beryllium <0 .001 <0 . 001 <0 . 001 Boron 0 . 11 0 . 030 0 . 13 Cadmium <0 . 001 <0 . 0011 <0 . 001 Calcium 92 . 62 250 105 Chromium <0 . 01 <0 .01 <0 . 01 Cobalt <0 . 05 <0 .05 <0 . 05 Copper 0 . 04 <0 .05 0 . 041 Iron 1 . 03 <0 .2 1 .03 Lead <0 . 01 <0 .01 <0 . 01 Magnesium 31 . 15 300 52 . 7 Manganese 0 . 05 <0 .04 0 .05 Mercury <0 . 0003 <0 . 0003 <0 . 0003 Nickel <0 . 03 <0 .03 <0 . 03 Selenium <0 . 01 <0 .01 <0 . 01 Silicon 9 . 92 100 17 .2 Silver <0 . 01 <0.013 <0.01 Sodium 164 . 85 500 192 Strontium 5 . 30 50 8 . 9 Thallium <0 . 003 <0. 02 <0 . 004 Zinc <0 . 1 <0. 1 <0 . 1 M-Alkalin as CaCO3 122 . 85 400 145 Chloride 330 . 77 900 376 Conductivity umhos/cm 1397 . 69 3500 1566 Fluoride 0 . 35 5 . 0 0 . 72 Hardness as CaCO3 376 . 9 1100 435 Oil & Grease 2 . 1 NA 2 . 1 PH stu 7 .48 8 . 0 7 . 5 Sulfate 88 .40 500 121 Sulfide < 1 . 0 305 1 .2 Total Dissolved Solids 942 . 31 2500 1070 TDS Total Organic Carbon 17 . 08 8 . 0 16 TOC Total Suspended Solids NA 8 . 0 5 TSS NOTE 1 : Seasonal variations in the IRFWCD Canal Vales are expected. NOTE 2 : These are the maximum allowable limits for cooling water supply to BHEC . Per paragraph 5 . e of the Agreement, in the event the combination of canal water and RO brine supply to BHEC exceed these maximum values, the RO brine supply will be shut off. 8 . 5 .04 Water Agreement