Res 2013-019/LCRA Participation Agreement w/Thomas C. Ferguson

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L rGLA pursuant to Article 13(c)(ii). "Prudent Utility Practices" means the exercise of that judgment that a reasonable non- profit utility manager of a diverse fleet of generation assets would exercise or choose in the same or similar circumstances given the information known or that reasonably should be known or alternatives available at the point in time such judgment is exercised or option is chosen, and in consideration of both short-term and long -term consequences of the choices and the requirements of this Agreement and in consideration of the non - profit utility manager's other generation assets, which would be expected to accomplish the desired result in a manner consistent with law, regulation, reliability, safety, environmental protection, economy, and expedition. "Operational Term" means the period commencing upon the Commercial Operation Date through the Term of this Agreement. "Participation Expenses" means for any period, all costs and expenses of, or arising out of, the development, design, construction, ownership and operation of the Facility, regardless of how such costs and expenses arise, including without limitation from LCRA's negligence or from LCRA's violation of its obligations under Article 12, but excluding costs and expenses caused by the gross negligence or willful misconduct of LCRA. Participation Expenses include, but are not limited to, costs for preparing the Facility site, including the cost of any remediation of the site; all payments under the EPC Contract; costs associated with the startup and commissioning of the Facility; construction management expenses; spare parts; owner - furnished equipment; cost of LCRA debt used to fund construction of the Facility; capital additions or modifications; major maintenance (including expenses for overhauling, maintaining, rebuilding and replacing of Facility components and equipment); operation and maintenance contract fees; routine maintenance costs (including planned and unplanned maintenance); costs relating to compliance with applicable Laws, including applicable environmental Laws and costs of remediation of environmental conditions; LCRA internal labor costs; LCRA general and administrative costs; subcontractor costs; fuel supply and transportation expenses, including the cost of fuel hedging or other financial instruments used to hedge fuel costs; costs of insurance or self - insured losses; Taxes; litigation and other legal proceeding costs, including attorneys fees and expenses; judgments, settlements, fines and penalties, including those arising from non - compliance with Laws; safety compliance costs; payments for water and other utilities, including station power and interconnection costs; costs of obtaining and maintaining Governmental Approvals; consulting, legal, engineering, accounting or other professional fees; ERCOT settlement costs, including any ERCOT fees or charges, imbalance charges, administrative or regulatory penalties, or other costs; funding for future decommissioning costs; retirement and decommissioning costs; and all other fees, expenses and reserves necessary for continued use, operation and maintenance of the Facility and the conduct of the business of LCRA in operating the Facility. "Qualified Scheduling Entity" is defined in the ERCOT Binding Documents. Participation Agreement between Lower Colorado River Authority Page 5 of 26 and City of San Marcos