Template:Nutshell EUA Annex Receiving Party’s Replacement Cost

Receiving Party’s Replacement Cost means:

(1) No Excess Emissions Penalty: If “Excess Emissions Penalty” does not apply or the Delivery Date falls outside the EEP Risk Period, then, for a failure to deliver a number of Allowances (the “RPRC Shortfall”), an amount equal to:

(A)

(I) the price (per Allowance) Calculation Agent determines that Receiving Party would pay in a reasonable arm’s length transaction on the Final Delivery Date for an equivalent number of Allowances to be delivered on the Delivery Business Day on which Allowances would be ordinarily be delivered under a spot transaction on the Final Delivery Date; less

(II) the relevant Allowance Purchase Price/Allowance Strike Price plus, where the termination under “Physical Settlement” follows a Suspension Event, the Close-out Cost of Carry Amount; multiplied by:

(B) the RPRC Shortfall; plus

(C) interest at the Default Rate from the Delivery Date to the termination date in accordance with “Failure to Deliver Not Remedied” on the product of the RPRC Shortfall and any excess of the price determined under to paragraph (1)(A)(I) over the relevant Allowance Purchase Price/Allowance Strike Price; or

(2) Excess Emissions Penalty: If “Excess Emissions Penalty” applies and Delivery Date falls within the relevant EEP Risk Period, then, for a failure to deliver a number of Allowances (the “Undelivered Allowances”), an amount equal to the sum of:

(A) either:

(I) if Receiving Party can reasonably purchase a number of Allowances for delivery between the Final Delivery Date and the Reconciliation Deadline immediately following the Delivery Date (the “Buy-In Period”), which for each such individual purchase of Allowances, in aggregate equalling the number of Undelivered Allowances:

(X)

(1) the price (per Allowance) at which Receiving Party is able so to purchase the relevant number of Allowances; less

(2)

(A) the Allowance Purchase Price or Allowance Strike Price, as applicable, for the Undelivered Allowances set out in the relevant Confirmation plus

(B) Where the termination of the parties’ obligations under “Physical Settlement” follows a Suspension Event, the Close-out Cost of Carry Amount; multiplied by:

(Y) the affected number of Allowances; plus

(Z) interest at the Default Rate from the Delivery Date to the termination date under “Failure to Deliver Not Remedied” on the product of the number of Undelivered Allowances and any excess of the determined price over the relevant Allowance Purchase Price/Allowance Strike Price; or

(II) if Receiving Party cannot reasonably purchase a number of Allowances for delivery equal to the Undelivered Allowances during the Buy-In Period:

(X) for the number of Allowances Receiving Party can Buy-In during the Buy-In Period, an amount determined under paragraph (I) above; and

(Y) for a number equal to the Undelivered Allowances minus the Allowances referred to in (II)(X) above (the “Shortfall”), the sum of:

(a)

(I) the price (per Allowance) at which Receiving Party can reasonably buy for delivery after the Reconciliation Deadline a number of equivalent Allowances equal to the Shortfall; less

(II) the relevant Allowance Purchase Price/Allowance Strike Price for the Undelivered Allowances, where the relevant termination of the parties’ obligations under “Physical Settlement” follows a Suspension Event, the Close-out Cost of Carry Amount; plus

(III) the EEP Amount; multiplied by:

(b) the Shortfall; plus

(c) interest at the Default Rate from the Delivery Date to the date Receiving Party could purchase Allowances under paragraph (II)(Y)(a)(1) on an amount equal to the the number of Undelivered Allowances and any excess of the price determined under paragraph (II)(Y)(a)(1) over the relevant Allowance Purchase Price/Allowance Strike Price; and

(B) Receiving Party’ reasonable costs as a direct result of Delivering Party’s failure to deliver the Shortfall where those costs and expenses are not reflected in paragraphs (A)(I) or (A)(II) above; or

(3) Failure to Deliver (Alternative Method): If “Failure to Deliver (Alternative Method)” applies then, for a failure to deliver a number of Allowances (“RPRC Shortfall”), an amount equal to:

(A)

(I) the price (per Allowance) the Calculation Agent determines that Receiving Party can reasonably buy a number of equivalent Allowances equal to the RPRC Shortfall for delivery on the first standard Delivery Business Day for settling transactions concluded on the Delivery Date; less

(II) the relevant specified Allowance Purchase Price/Allowance Strike Price plus, where termination of the parties’ obligations under “Physical Settlement” follows a Suspension Event, the Close-out Cost of Carry Amount; multiplied by:

(B) the RPRC Shortfall; plus

(C) interest at the Default Rate from the Delivery Date to the Final Delivery Date on the product of the relevant Allowance Purchase Price/Allowance Strike Price, and the RPRC Shortfall.