Exhibit 10.3.22 INTERCONNECTION AGREEMENT BETWEEN SOUTHERN CALIFORNIA EDISON COMPANY AND HEBER GEOTHERMAL COMPANY INTERCONNECTION AGREEMENT BETWEEN SOUTHERN CALIFORNIA EDISON COMPANY AND HEBER GEOTHERMAL COMPANY 1. PARTIES: The Parties to this Interconnection Agreement, hereinafter referred to as "Agreement", are Southern California Edison Company, a California corporation, hereinafter referred to as "Edison", and Heber Geothermal Company, a California general partnership, hereinafter referred to as "Seller", hereinafter sometimes referred to individually as "Party" and collectively as "Parties". 2. RECITALS: This Agreement is made with reference to the following facts, among others: 2.1 On August 26, 1983, Edison and Chevron U.S.A. Inc., executed the Power Purchase and Sales Agreement to provide the terms and conditions for the sale by Chevron and purchase by Edison of capacity and energy delivered to the Point of Interconnection from a 47 MW (Net) electrical generating facility located at Heber, California, utilizing geothermal steam as the prime mover energy source. 2.2 On August 26, 1983, Chevron assigned and Heber Geothermal Company assumed Chevron's right, title, and interest in the Power Purchase and Sales Agreement between Chevron and Edison, dated August 26, 1983. 2.3 On March 16, 1984, Chevron and Heber Geothermal Company issued a Notice of Intention to Proceed to Edison. The Notice of Intention to Proceed stated Chevron and Heber Geothermal Company's desire to construct the facilities necessary to proceed with the Power Purchase and Sales Agreement, dated August 26, 1983. 2.4 On December 11, 1984, Edison and Heber Geothermal Company executed an Amendment No. 1 to the Power Purchase and Sales Agreement, dated August 26, 1983. 2 Amendment No. 1 provided for modifications to the terms of: (i) Payments for Energy; (ii) Payments for Capacity; and (iii) Transmission Cost. 2.5 Pursuant to Section 34.2.2 of the Power Purchase and Sales Agreement, these Parties desire to establish the terms and conditions for the design, construction, ownership, operation, maintenance, and cost responsibility for the 115/92 kV Mirage Substation, located near Thousand Palms, California ("Interconnection Facilities"). 3. Edison shall, pursuant to the Edison Tariff Rule No. 21, engineer, design, construct, own, operate, and maintain the Interconnection Facilities, described in Exhibit A, and procure equipment, materials, and necessary rights-of-way for such facilities. 4. Seller shall pay Edison a pro rata share of the cost of the Interconnection Facilities to be constructed, owned, operated, and maintained by Edison as provided in this Section 4 and Exhibit A. The cost figures set forth in Exhibit A are estimates only and shall be adjusted to reflect the recorded cost after installation is complete. 4.1 Not later than thirty (30) days after the date of execution of this Agreement, Seller shall pay Edison a pro rata share of the Total Estimated Installed Cost of the Interconnection Facilities as set forth in Exhibit A. The Seller's pro rata share is 25/65 of the total installed cost of the Interconnection Facilities and represents the Seller's 25,000 kVA portion of the total 65,000 kVA Interconnection Facilities. 4.2 Pursuant to Edison's Tariff Rule No. 2H for Seller-financed added facilities (Interconnection Facilities), Seller shall pay a monthly charge of 0.9% of the Seller's pro rata share of the Total Estimated Installed Cost of the Interconnection Facilities as set forth in Exhibit A. When the recorded book cost of the Interconnection Facilities has been determined by Edison, the charge to Seller shall be adjusted retroactively to the date when the Interconnection 3 Facilities were first available for use. Charges or credits to the Seller resulting from such adjustment shall, unless otherwise agreed to, be payable within thirty (30) days of the presentation of a statement therefor. 4.3 If Seller abandons its plans for the generating facility or otherwise terminates its need for the Interconnection Facilities prior to the Interconnection Facilities being placed in use, for any reason whatsoever, Seller shall pay Edison costs which Edison incurred as a direct result of such a termination. Such costs shall include the cost of engineering, design, procurement of equipment and materials, acquisition of rights-of-way, and construction of the Interconnection Facilities. 4.4 Pursuant to Edison's Tariff Rule No. 21, when a change in the Interconnection Facilities results in a change in the installed cost of the Interconnection Facilities, the charges provided herein shall be adjusted consistent with such change. 4.5 Monthly charges for Interconnection Facilities shall commence upon the date the Interconnection Facilities are available for use and shall be payable within thirty (30) days after Edison submits a statement therefor. 5. Edison's obligations under this Agreement shall be subject to the availability of materials required for construction of the Interconnection Facilities and all applicable Tariff Schedules of Edison. 6. Edison shall exercise its best efforts to provide the Interconnection Facilities to accommodate Seller's projected operation date. 7. This Agreement shall be subject to applicable tariff rules and modification of such rules as directed by the Public Utilities Commission of the State of California in the exercise of its jurisdiction. 4 8. This Agreement shall become effective upon execution by the Parties and consent by Chevron U.S.A. Inc. and shall remain in effect for the period the Seller uses the Interconnection Facilities. 9. SIGNATURE CLAUSE: The signatories hereto represent that they have been appropriately authorized to enter into this Interconnection Agreement on behalf of the Party for whom they sign. This Interconnection Agreement is hereby executed as of this 12th day of August, 1985. SOUTHERN CALIFORNIA EDISON COMPANY BY /s/ Edward A. Myers, Jr. ------------------------------------------- Name Edward A. Myers, Jr. ------------------------------------- Title Vice President ------------------------------------ HEBER GEOTHERMAL COMPANY, A PARTNERSHIP DRAVO ENERGY, INC., A PARTNER BY /s/ John E. Jacobsen ------------------------------------------- Name John E. Jacobsen ------------------------------------- Title Asst. General Manager ------------------------------------ CENTENNIAL GEOTHERMAL, INC. PARTNER BY /s/ Robert O'Leary ------------------------------------------- Name Robert O'Leary ------------------------------------- Title President ------------------------------------ 5 CHEVRON U.S.A. INC., REPRESENTED BY ITS AGENT, CHEVRON RESOURCES COMPANY BY /s/ A.M. Cooper ------------------------------------------- Name A.M. Cooper ------------------------------------- Title Vice President ------------------------------------ 6 EXHIBIT "A" SELLER: Heber Geothermal Company SERVICE Southern California Edison Mirage Substation ADDRESS: Roman Road at Vista De Oro Road Thousand Palms Area, Riverside County, California DATE APPLICANT DESIRES INTERCONNECTION FACILITIES AVAILABLE: July 5, 1985 MATERIAL INSTALLATION DESCRIPTION COST* LABOR COST* ----------- ---------- ------------ 1. 65 MVA 115/92 kV Transformer 2. 115 kV Circuit Breaker Relay Protection 3. Metering 4. Relay House 5. Grounding System 6. Relocation of existing IID Tie Substation Transformer to Mirage Substation for storage as spare. TOTAL $1,140,000 $ 346,000 TOTAL ENGINEERING COSTS $ 79,000 TOTAL ESTIMATED INSTALLED COST OF INTERCONNECTION FACILITIES: $1,565,000 SELLER'S PRO RATA SHARE OF THE TOTAL ESTIMATED INSTALLED COST OF INTERCONNECTION FACILITIES**: $ 602,000 TOTAL RECORDED INSTALLED BOOK COST OF INTERCONNECTION FACILITIES: $_________ SELLER'S PRO RATA SHARE OF THE TOTAL RECORDED INSTALLED BOOK COST OF INTERCONNECTION FACILITIES: $_________ DATE SERVICE FIRST RENDERED BY MEANS OF THE INTERCONNECTION FACILITIES:_________________________________________________ * Cost estimates are for information purposes only and are not binding unless provided in writing by Edison pursuant to a written request by Seller. ** Seller's pro rata share is 25/65 of the total cost of Interconnection Facilities. -6-