Exhibit B-2
OPERATING AGREEMENT
between
[OPCO]
and
[NEWCO]
TABLE OF CONTENTS
ARTICLE 1 Definitions.....................................................................................2
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1.1 Entitlement to Output...........................................................................2
1.2 Generation Facility.............................................................................3
1.3 Governmental Authority..........................................................................3
1.4 Legal Requirements..............................................................................3
1.5 New Investment Services.........................................................................3
1.6 Operating Services..............................................................................4
1.7 Operation and Maintenance Services..............................................................4
1.8 Prudent Utility Practice........................................................................4
ARTICLE 2 [OPCO]'s Authority and Responsibility with Respect to Operationof the Generation Facilities.....5
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2.1 Responsibility of [OPCO]........................................................................5
2.2 Authorization of [OPCO].........................................................................5
2.2.1 Plant Operation and Maintenance........................................................6
(a) Staff and Personnel...........................................................6
(b) Licenses and Permits for Generation Facilities................................7
(c) Reductions in Capacity and Outages at Each Plant..............................7
(d) Events About Which Owner is to be Notified....................................8
(e) No Changes to Transmission or Distribution Facilities.........................8
(f) Operation in Accordance with Operating Plan...................................8
(g) Points of Interconnection.....................................................9
2.2.2 New Investment Services................................................................9
2.2.3 Fuel Services..........................................................................9
2.3 Retirement of Generating Facility...............................................................9
2.4 Authority to Act as Agent for Owner and Right of Third Parties
to Rely on Agency.............................................................................10
2.5 Assignment of Contracts; Liability and Allocation of Risks.....................................10
2.5.1 Contracts with Third Parties..........................................................10
2.5.2 Acceptance of Contract Provisions.....................................................10
2.5.3 Enforcement of Rights Under Contracts.................................................11
2.6 Cooperation of Owner...........................................................................12
2.7 [OPCO] Interface Procedure.....................................................................12
2.8 Plans and Budgets..............................................................................12
2.8.1 Strategic Plan........................................................................13
(a) Five-year Operating and Planned Outage Schedule..............................13
(b) Availability and Performance Goals...........................................14
(c) Planned Mandatory Projects...................................................14
(d) Planned Improvement Projects.................................................14
(e) Authorized Level of Staffing.................................................14
2.8.2 Fuel Plan.............................................................................15
2.8.3 Operating Budget......................................................................15
2
2.8.4 Capital Budget........................................................................15
2.8.5 Fuel Budget...........................................................................15
2.9 Information and Reports........................................................................16
2.9.1 Generation Facility Data..............................................................16
2.9.2 Generation Facility Budget Reports....................................................16
2.9.3 Generation Facility Strategic Plan Reports............................................16
2.9.4 Audit Reports.........................................................................16
2.9.5 Correspondence to and from Regulatory Agencies........................................16
2.9.6 Responses to Owner Inquiries..........................................................17
2.10 Plant tours....................................................................................17
2.11 Management Audit...............................................................................17
ARTICLE 3 Entitlement to Output..........................................................................17
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3.1 Entitlement to Output..........................................................................17
3.2 Determination of Output-Responsibility for Station Service and Losses..........................18
ARTICLE 4 Charges, Billing and Audit.....................................................................18
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4.1 Cost of Operation and Maintenance..............................................................18
4.2 New Investment Costs...........................................................................19
4.3 Fuel Costs.....................................................................................19
4.4 Other Costs Required by Legal Requirements.....................................................19
4.5 Revision.......................................................................................19
4.6 Billing........................................................................................20
4.7 Payment........................................................................................20
4.8 General Accounting Matters.....................................................................20
4.9 Right to Inspect Records.......................................................................20
4.10 Disputed Invoice...............................................................................21
ARTICLE 5 Advancement of Funds...........................................................................21
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5.1 Advancement of Funds...........................................................................21
ARTICLE 6 Taxes..........................................................................................22
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6.1 Taxes..........................................................................................22
ARTICLE 7 Compliance with Provisions of Permits and Requirements of Governmental
----------------------------------------------------------------------
Agencies.......................................................................................22
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7.1 Compliance with Provisions of Permits and Requirements of Governmental
Agencies.......................................................................................22
ARTICLE 8 Confidentiality of Information.................................................................22
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8.1 Confidentiality of Information.................................................................22
ARTICLE 9 Damage to Persons or Property; Penalties; Fines................................................23
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9.1 Applicability of Article.......................................................................23
3
9.2 Absence of Warranty............................................................................23
9.3 Liabilities to Third Parties and Owner.........................................................23
9.4 Willful Misconduct.............................................................................25
9.5 Limitation of Liability........................................................................25
9.6 Severability...................................................................................26
ARTICLE 10 Insurance......................................................................................26
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10.1 Parties' Obligations Generally.................................................................26
10.2 Commercial Liability Insurance.................................................................27
10.3 Workmen's Compensation Insurance...............................................................27
10.4 Additional Insurance...........................................................................28
10.5 Waiver of Subrogation - Allocation and Payment of Premium......................................28
ARTICLE 11 Term...........................................................................................28
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11.1 Term...........................................................................................28
ARTICLE 12 Remedies.......................................................................................29
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12.1 Termination....................................................................................29
12.1.1 ......................................................................................29
12.1.2.........................................................................................30
12.1.3.........................................................................................30
ARTICLE 13 Miscellaneous..................................................................................30
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13.1 No Partnership or Joint Venture................................................................30
13.2 Owner's Designated Representatives.............................................................31
13.3 [OPCO]'s Designated Representative.............................................................31
13.4 Depreciation...................................................................................31
13.5 Holidays, Business Days........................................................................31
13.6 Owner's Services to be Furnished at Cost.......................................................31
13.7 Entire Agreement...............................................................................31
13.8 Amendments.....................................................................................32
13.9 Notices........................................................................................32
13.10 Captions.......................................................................................32
13.11 Counterparts...................................................................................33
13.12 No Waiver......................................................................................33
13.13 Singular and Plural............................................................................33
13.14 Third Party Beneficiaries......................................................................33
13.15 Severability...................................................................................33
ARTICLE 14 Successors and Assigns.........................................................................33
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14.1 ...............................................................................................34
ARTICLE 15 Governing Law..................................................................................34
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15.1 ...............................................................................................34
4
OPERATING AGREEMENT
between
[OPCO]
and
[NEWCO]
THIS AGREEMENT is made and entered into this _____ day of ___________
200__ (the "Effective Date") by and between [OPCO] ("___") and [NEWCO]["Owner"].
W I T N E S S E T H:
WHEREAS, [OPCO] and Owner are each a wholly-owned subsidiary of The
Southern Company ("Southern"), a registered holding company under the Public
Utility Holding Company Act of 1935 (the "1935 Act"); and
WHEREAS, Owner owns certain generation stations, plants and other
generation facilities (collectively, "Generation Facilities" or individually,
the "Generation Facility") within the service territory of [OPCO], and may
construct or acquire additional Generation Facilities in the future, which
Generating Facilities are set forth and generally described on Schedule I
hereto, as it may from time to time be hereafter amended or supplemented without
the necessity of an amendment to this Agreement; and
WHEREAS, Owner intends to sell on the wholesale market the electric
power generated by such facilities; and
WHEREAS, [OPCO] owns and operates generation stations, plants and other
related generation facilities and has developed the expertise and experience to
efficiently and economically operate such facilities; and
WHEREAS, Owner believes that in order to more efficiently and
economically provide for the operation, maintenance, repair, and rehabilitation
of its Generation Facilities, such activities should be conducted and
coordinated by [OPCO]; and
WHEREAS, Owner desires that [OPCO] undertake the operation,
maintenance, repair and rehabilitation of its Generation Facilities identified
on Schedule I, subject to the receipt of any necessary regulatory approvals, and
[OPCO] has agreed to do so under the terms and conditions set forth below.
NOW THEREFORE, in consideration of these premises, the parties,
intending to be legally bound, do hereby agree as follows:
ARTICLE 1
Definitions
As used herein, the following terms and phrases shall have,
respectively, the following meanings:
1.1 "Fuel Services" shall mean work related to supplying and
managing all necessary fuels for the Generating Facilities including,
without limitation, planning, procurement, contract administration,
fuel quality assurance, and all activities relating to procurement,
transportation, installation, monitoring, repairing, storage,
reprocessing and disposal of fuel for the Generating Facilities,
related materials and waste products.
1.2 "Generation Facility" shall mean, and refer to,
respectively, each of the fossil fuel, hydro-electric and pumped
storage generation stations, plants and other related generation
facilities owned by Owner and located within the service territory of
[OPCO]; provided, however, that should activities concerning a
Generation Facility be undertaken with respect to one unit of such
station, plant or facility, the phrase "Generation Facility" shall mean
and refer to that unit and related common facilities.
1.3 "Governmental Authority" shall mean any local, state,
regional or federal legislative, regulatory, administrative, legal,
judicial or executive agency, commission, department or other entity
and any person acting on behalf of any such entity.
1.4 "Legal Requirements" shall mean all laws, codes,
ordinances, orders, judgments, decrees, injunctions, licenses, rules,
permits, approvals, written agreements, regulations and requirements of
or issued by every Governmental Authority having jurisdiction over the
matter in question, whether federal, regional, state or local, which
may be applicable to [OPCO], or to Owner, or to any Generation Facility
or any of the real or personal property comprising the Generation
Facilities, or to services to be provided to Owner hereunder, or the
use, occupancy, possession, operation, maintenance, construction,
retirement, acquisition, installation, alteration, replacement
reconstruction or disposal of any one or more of the Generation
Facilities or any part thereof.
1.5 "New Investment Services" shall mean work for the
Generation Facilities relating to the planning, design, licensing,
acquisition, construction, completion, renewal, improvement, addition,
repair, replacement or enlargement of any Unit of Property (as
described in the Federal Energy Regulatory Commission's "Units of
Property for Use in Accounting for Additions and Retirements of
Electric Plants"), under circumstances where expenditures for such work
are to be capitalized in accordance with the Electric Plant
Instructions of the Uniform System of Accounts prescribed for Class A
and B utilities by the Federal Energy Regulatory Commission.
1.6 "Operating Services" shall mean Fuel Services, New
Investment Services, and Operation and Maintenance Services.
1.7 "Operation and Maintenance Services" shall mean work for
Owner relating to the possession, management, control,
start-up, operation, availability, production of energy, maintenance,
improvement, renewal, replacement, and shutdown including, but not
limited to, any planning, design, engineering, labor, procurement of
materials and supplies, materials management, quality assurance,
training, security, and environmental protection, together with
maintaining or obtaining licenses and regulatory approvals related
thereto, governmental affairs or regulatory relationships, and all
other activity required for the safe and reliable operation of the
Generation Facilities or that may be required to comply with Legal
Requirements.
1.8 "Prudent Utility Practice" shall mean at a particular time
any of the practices, methods and acts engaged in or approved by a
significant portion of the electric utility industry prior to such
time, 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. "Prudent 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 a spectrum of
possible practices, methods or acts having due regard for, among other
things, manufacturers' warranties and the requirements of governmental
agencies of competent jurisdiction.
ARTICLE 2
[OPCO]'s Authority and Responsibility with Respect to Operation of the
Generation Facilities
2.1 Responsibility of [OPCO]. [OPCO], consistent with such written
guidelines as may be jointly developed with Owner, shall provide and be
responsible for (i) the operation and maintenance of the Generation Facilities
within its service territory in a safe and reliable manner in accordance with
all Legal Requirements and with Prudent Utility Practice, (ii) the generation of
power and energy at the Generation Facilities to the credit of and for the
benefit of the Owner as economically as is reasonably practicable, (iii) the
repair and rehabilitation of the Generation Facilities as may, from time to
time, be necessary, appropriate or reasonably practicable and advisable and (iv)
as and to the extent deemed by Owner to be necessary or appropriate, the
construction of new or additional non-nuclear generation facilities for Owner.
[OPCO] also shall make such further changes and additions to and retirements
from the Generation Facilities in its service territory as shall be consistent
with such operation, maintenance, repair and rehabilitation. Such services and
construction may be provided by [OPCO] through its own personnel or, in part, by
others, including without limitation affiliate personnel, under contractual or
other arrangements, including the use of Owner's personnel under the direction
and supervision of [OPCO].
2.2 Authorization of [OPCO]. In furtherance of the foregoing, Owner
authorizes [OPCO], and [OPCO] agrees to provide, Operation and Maintenance
Services, New Investment Services, and Fuel Services for the Generation
Facilities. Owner hereby authorizes [OPCO] to take all actions that, in the
discretion and judgment of [OPCO] consistent with Prudent Utility Practice, are
deemed necessary or advisable in providing these Operating Services. Owner
hereby authorizes [OPCO], as operator, to take any and all action necessary to
comply with all Legal Requirements and to take all action necessary to fulfill
any requirements for the safe and reliable operation of the Generation
Facilities. The authority vested in [OPCO] shall include, but not be limited to,
the authority to incur costs, liabilities, and obligations, to purchase
equipment, materials and supplies, to perform and arrange for performance of
work, to select and retain contractors, engineers, consultants,
architect-engineers, attorneys, accountants and other firms or persons, and to
take all actions in connection with the Generation Facilities that are within
the scope set forth above. Without limiting the foregoing, the authority vested
in [OPCO] shall include the following:
2.2.1. Plant Operation and Maintenance. [OPCO] shall have the
authority to possess, operate and maintain the Generation Facilities in
accordance with policies and decisions established and made by Owner.
Subject to the provisions of this Agreement, [OPCO] shall in accordance
with Prudent Utility Practice endeavor to achieve reliable performance
of each Generation Facility, to maximize the capacity and availability
factors and minimize forced outage rates and durations at each
Generation Facility and to produce busbar costs as low as reasonably
possible.
(a) Staff and Personnel. Subject to the provisions of
Section 2.8.1 respecting Strategic Plans, [OPCO] shall have
the authority to select, hire, compensate, control and
discharge (when deemed appropriate by [OPCO]) those persons,
firms or corporations which are required to satisfy its
obligations under this Agreement. [OPCO] shall keep Owner
informed of any plans to change either the [OPCO] officer
responsible for any of Owner's Generation Facilities or the
[OPCO] manager of such Generation Facility. Any input from
Owner on such plans will be considered by [OPCO], but [OPCO]'s
decisions on personnel matters shall be final. [OPCO] shall
also consider any positive or negative comments from Owner
regarding the performance of any of [OPCO]'s officers or
managers, but management decisions on whether to take
personnel or salary administration actions shall be made
solely by [OPCO].
(b) Licenses and Permits for Generation Facilities.
[OPCO] is authorized to obtain and maintain compliance with
all licenses, approvals and permits for each Generation
Facility from Governmental Authorities required for operation
and maintenance of the Generation Facility.
(c) Reductions in Capacity and Outages at Each Plant.
Owner recognizes that, in the course of operating the
Generation Facilities, it may be necessary to decide whether
to operate the Generation Facilities at less than full power
or to terminate or suspend such operations altogether in light
of technical, legal, regulatory, safety, economic, power
system, testing, or other considerations. [OPCO] recognizes
the need to minimize periods of reduced capacity or outages at
the Generation Facilities that could have an adverse effect on
Owner's power supply system or its cost of providing reliable
electric service. [OPCO] will endeavor to consult with Owner
concerning any operating conditions which are expected to
result in capacity reductions of fifty percent (50%) or more
at a Generation Facility or outages at a unit of any
Generation Facility, and [OPCO] will only take those actions
when they determine they are prudent and necessary from an
operating standpoint.
(d) Events About Which Owner is to be Notified. In
the event of an occurrence at a Generation Facility of any
unplanned outage, any significant extension of a planned
outage, any unplanned reduction in the capacity of a unit for
an extended period, or any event at a Generation Facility or
any regulatory action which is likely to attract substantial
media attention or to affect substantially the operation of
the Generation Facility, [OPCO] shall inform Owner as soon as
practical, or in accordance with guidelines acceptable to
Owner, after the occurrence of such event.
(e) No Changes to Transmission or Distribution
Facilities. In order that the safe operation of the Generation
Facilities is assured, Owner shall not effect any operating or
physical changes to its transmission and distribution
facilities which may adversely affect the safe operation of
the Generation Facilities without prior consultation with and
the concurrence of [OPCO].
(f) Operation in Accordance with Operating Plan. Each
Generation Facility shall be operated in accordance with
Prudent Utility Practice and pursuant to an operating plan
developed and updated regularly by [OPCO] and Owner and in
accordance with Owner's obligations, if any, under any
interconnection agreements, power pooling arrangements or
other applicable arrangements, as such obligations may
presently exist or may hereafter be modified from time to
time, including the obligations, if any, of Owner to maintain
the design integrity of each Generation Facility under the
requirements of the Southeast Electric Reliability Council and
the National Electric Reliability Council.
(g) Point of Interconnection. The point of
interconnection between any Generation Facility and [OPCO]'s
or a third party's transmission system and the extent of
[OPCO]'s operational responsibility therefor shall be
determined from time to time by Owner and [OPCO].
2.2.2. New Investment Services. [OPCO] shall have
responsibility for all New Investment Services. [OPCO] is authorized to
enter into such arrangements as it deems appropriate for the Generation
Facilities and to make all decisions regarding the completion of New
Investment projects. All equipment, materials and supplies included in
the New Investment projects for each Generation Facility shall be
acquired in the name of Owner and shall be the property of Owner.
2.2.3. Fuel Services. [OPCO] shall have responsibility for
Fuel Services. [OPCO] is authorized to enter into such
arrangements as it deems appropriate and to make all decisions
regarding fuel and fuel services. All fuel shall be procured
in the name of Owner.
2.3 Retirement of Generating Facility. Owner shall retain the exclusive
authority to determine when the economic life of the Generation Facility has
ended and thereupon to retire the Generation Facility from commercial operation.
Owner retains the authority to determine whether such Generation Facility should
be placed in standby status or operated at reduced output for economic reasons
or Owner's need for the capacity or energy of the Generation Facility. Upon
Owner informing [OPCO], [OPCO] shall take such action as may be necessary to
reduce operation of the Generation Facility or to terminate operation and place
the Generation Facility or unit in a safe shutdown condition. [OPCO] shall also
take such steps as may be necessary to decommission and dispose of and
thereafter maintain, to the extent necessary, the Generation Facility or any
unit thereof designated for retirement.
2.4 Authority to Act as Agent for Owner and Right of Third Parties to
Rely on Agency. In the conduct of the authority vested in [OPCO] in Sections 2.1
and 2.2 above, Owner hereby designates and authorizes [OPCO] to act as its
attorney-in-fact and agent for such purposes, including without limitation
authority to enter into and administer contracts on behalf of Owner for
procurement of material, equipment or services and authority to administer
contracts entered into by Owner with respect to the Generation Facilities. As
relates to all third parties, the designation of [OPCO] as agent shall be
binding on Owner. [OPCO] accepts such appointment as agent of Owner. Upon
request from [OPCO], Owner shall provide written confirmation of this agency
relationship to third parties.
2.5 Assignment of Contracts; Liability and Allocation of Risks.
2.5.1 Contracts with Third Parties. Upon request from [OPCO]
to Owner, Owner shall assign and transfer to [OPCO] those contracts
with third parties relating to the operation of each Generation
Facility. Prior to assignment and transfer of such contracts, [OPCO]
may request Owner to appoint [OPCO] as agent for administration of any
such contracts. After receipt of any such assignment, transfer or
authorization to administer, [OPCO] shall have the exclusive
responsibility for the administration and enforcement thereof in
accordance with the terms thereof.
2.5.2 Acceptance of Contract Provisions. [OPCO] in such
contracts with third parties may agree to certain matters including,
but not limited to, limitations on the liability of such contractors
for work performed or materials furnished, restrictions on warranties,
agreements to indemnify the contractors from liability and other
provisions. Owner waives any claims against [OPCO] for entering into
such contracts or agreeing to the provisions thereof. Owner also
recognizes that a number of [OPCO]'s contracts relating to the
Generation Facilities may contain provisions that require [OPCO] to
obtain from Owner agreements by Owner that it will be bound by all of
the requirements for financial protection, waivers, releases,
indemnifications, limitations of liability and further transfers or
assignments that bind [OPCO] under such contracts. Owner agrees to be
bound by the requirements for financial protection, waivers, releases,
indemnification, limitation of liability and further transfers or
assignments that bind [OPCO] as they now exist or may exist in the
future with respect to all contracts relating to the Generation
Facilities.
2.5.3 Enforcement of Rights Under Contracts. Owner covenants
that, without the written consent of [OPCO], Owner will not threaten
suit or bring suit against third parties or otherwise make any claim
under any contract or arrangement relating to any of the Generation
Facilities or Operating Services, and Owner recognizes that [OPCO] has
complete and exclusive authority with respect to such matters. If Owner
desires for suit to be threatened or brought or otherwise for any claim
to be made, or desires that such action contemplated by [OPCO] shall
not be taken, Owner shall, by written notice to [OPCO], request it so
to act or refrain from acting. Upon [OPCO]'s receipt of such notice
Owner and [OPCO] shall arrange for consultation within ten (10) working
days thereafter on the questions raised, or such lesser period of time
as [OPCO], in its sole discretion, shall specify in the light of
circumstances requiring a more expeditious determination. [OPCO] shall
not make its determination until after such consultation, but such
determination by [OPCO] shall be final and binding.
2.6 Cooperation of Owner. Owner agrees that it will take all necessary
action in a prompt manner to execute any agreements with respect to the
provision of Operation and Maintenance Services, New Investment Services, and
Fuel Services for the Generation Facilities as and when requested by [OPCO] to
permit [OPCO] to carry out its authority and responsibilities pursuant to this
Article 2. [OPCO] may request Owner to furnish services or assistance,
materials, supplies, licenses, offices and real property rights including,
without limitation, power supply services, transmission and distribution system
repair, replacement, construction and maintenance, accounting services,
maintenance personnel, security services, and other personnel, services or
assistance as [OPCO] may require with respect to any one or more Generation
Facilities. Any such items which Owner agrees to furnish to [OPCO] shall be
provided at cost.
2.7 [OPCO] Interface Procedure. [OPCO] and Owner will jointly establish
and maintain an [OPCO] Interface Procedure to govern the working relationships
between the two companies. The [OPCO] Interface Procedure shall contain
procedures by which Owner can maintain an overview of Generation Facility
operations, procedures for administering this Operating Agreement through
designated executive points of contact, and procedures to define interfaces for
support services and assistance provided by Owner pursuant to Section 2.6
hereof.
2.8 Plans and Budgets. Strategic Plans, Fuel Plans, Operating Budgets,
Capital Budgets and Fuel Budgets shall be submitted to Owner by [OPCO] as
provided in Paragraphs 2.8.1 through 2.8.5 below. The contents of these plans
and budgets shall conform to the requirements and guidelines established
pursuant to the [OPCO] Interface Procedure. Owner shall approve or disapprove
each such plan or budget within thirty (30) days after its submittal. In the
event Owner disapproves a plan or budget, Owner shall inform [OPCO] of the basis
for such disapproval. [OPCO] shall then modify such plan or budget as required
to make it acceptable to Owner and shall resubmit it for approval; provided,
however, that in no event shall [OPCO] be required to submit plans or budgets
which would cause [OPCO] to operate a Generation Facility in violation of any
Legal Requirements or in a manner that fails to provide reasonable assurance of
health and safety to employees. [OPCO] shall attempt to provide Operating
Services in accordance with such approved plans and within the aggregate annual
amount of such budgets. Notwithstanding the foregoing, [OPCO] makes no
representation, warranty or promise of any kind as to accuracy of any such plan
or budget, or that any attempt referred to in the preceding sentence will be
successful, and in no event shall Owner be relieved of its responsibility to pay
costs incurred by [OPCO] as required in Article 4 hereof.
2.8.1 Strategic Plan. A Strategic Plan for each Generating
Facility shall be submitted to Owner by [OPCO] no later than July 1 of
each year. Owner may separately approve or disapprove individual
projects which are classified as planned improvement projects pursuant
to Paragraph (d) below, but shall otherwise approve or disapprove each
Strategic Plan in its entirety. Strategic Plans may cover one or more
Generation Facilities. Each Strategic Plan shall identify key
assumptions to be used in the preparation of budgets and forecasts,
including:
(a) Five-year Operating and Planned Outage Schedule.
This section shall identify the scheduled operating cycles and
planned outages for maintenance and other work during the
succeeding five years. The schedule shall describe in
reasonable detail the time and duration of each planned outage
and the maintenance and other work planned to be performed
during such outage.
(b) Availability and Performance Goals. This
section shall contain overall performance goals which have
been established by [OPCO] for the Generation Facility for
the current year.
(c) Planned Mandatory Projects. A mandatory project
is any project with a total estimated cost in excess of one
million dollars ($1,000,000) or such other amount as Owner may
establish, including but not limited to any upgrade,
replacement, addition or program, which is needed in order to
support normal operations in accordance with Prudent Utility
Practice or in order to comply with regulatory or safety
requirements. The associated schedule and estimated annual
funding requirements shall be included.
(d) Planned Improvement Projects. An improvement
project is any project with a total estimated cost in excess
of one million dollars ($1,000,000) or such other amount as
Owner may establish, including but not limited to any upgrade,
replacement, addition, or program, which is not mandatory as
defined in (c) above. Examples of such projects include
efforts to improve performance of a Generation Facility or
conditions, such as improved Generation Facility capacity or
efficiency, enhanced working conditions, and appearance. The
associated schedule and estimated annual funding requirements
shall be included.
(e) Authorized Level of Staffing. This section shall
provide the current authorized number of permanent staff
positions which are assigned to the Generation Facility and
its offsite support. Such number of positions shall be broken
down by functional areas (e.g., operations, maintenance,
administrative, technical, corporate support), shall include
positions which are located either on-site or off-site, and
shall include all positions regardless of the actual employer.
This section shall also show any estimates of planned changes
in such authorized number of positions over the succeeding
five years.
2.8.2 Fuel Plan. A five-year Fuel Plan for each Generation
Facility shall be submitted to Owner by September 15 of each year.
Owner shall approve or disapprove each Fuel Plan within thirty days
after submittal. Each Fuel Plan shall describe in reasonable detail
plans for procurement and utilization of fuel for the Generation
Facility and information on disposal of waste products. A Fuel Plan may
cover one or more Generation Facilities.
2.8.3 Operating Budget. By September 1 of each year, [OPCO]
shall submit to Owner a written Operating Budget showing the estimated
costs of operating and maintaining Owner's Generation Facilities during
the next calendar year, with a forecast of budget requirements for the
succeeding four calendar years. Each budget shall be supported by
detail reasonably adequate for the purpose of review by Owner.
2.8.4 Capital Budget. By September 1, of each year, [OPCO]
shall submit to Owner a written Capital Budget estimate of capital
expenditures for each of Owner's Generation Facilities for the next
calendar year, with a forecast of budget requirements for the
succeeding four calendar years. Each budget shall be supported by
detail reasonably adequate for the purpose of review by Owner.
2.8.5 Fuel Budget. By September 15 of each year, [OPCO] shall
submit to Owner a written Fuel Budget estimate of fuel expenditures for
each of Owner's Generation Facilities for the next calendar year, with
a forecast of budget requirements for the succeeding four calendar
years. Each budget shall be supported by detail reasonably adequate for
the purpose of review by Owner.
2.9 Information and Reports. [OPCO] shall furnish to Owner the
following information and reports:
2.9.1 Generation Facility Data. At the time of submittal of
each Strategic Plan, [OPCO] shall also furnish a comparison of the
performance of each Generation Facility with other generating
facilities using performance indicators in common use in the electric
utility industry or as may be specified by Owner.
2.9.2 Generation Facility Budget Reports. [OPCO] shall furnish
monthly data showing actual costs for operation and maintenance,
capital expenditures, and direct fuel expenditures with comparisons to
the respective budgets. This report will normally be provided by the
end of the succeeding month.
2.9.3 Generation Facility Strategic Plan Reports. At least
quarterly, [OPCO] shall furnish data showing actual performance for
each unit at each Generation Facility compared to goals contained in
the Strategic Plan for the Generation Facility.
2.9.4 Audit Reports. [OPCO] shall make available for review by
Owner copies of financial or accounting reports concerning Owner's
Generation Facilities containing the results of audits by or for
Southern Company Services, Inc., or any affiliate or subsidiary of The
Southern Company, or by any regulatory agency.
2.9.5 Correspondence to and from Regulatory Agencies. At the
request of Owner, [OPCO] shall furnish to Owner copies of
correspondence to and from regulatory agencies concerning one or more
of Owner's Generation Facilities.
2.9.6 Responses to Owner Inquiries. In addition to the
obligation of [OPCO] to provide the information as explicitly required
herein, [OPCO] shall respond to reasonable written or verbal requests
from Owner for information not otherwise specifically provided for
herein.
2.10 Plant Tours. Owner shall have the right to have its
representatives and guests visit its Generation Facilities, to tour the
facilities, and observe activities at the Generation Facilities; provided that
such visits or tours will not interfere with the operation of the Generation
Facilities, or the security or safety of such facilities. Owner shall assure
that its representatives and guests comply with all applicable rules and
regulations in effect at a Generation Facility whether imposed by Governmental
Authority or by [OPCO].
2.11 Management Audit. Owner shall have the right to conduct a
management audit, at its own cost, of [OPCO]'s performance hereunder either by
Owner officers and employees or through their duly authorized agents or
representatives. [OPCO] shall cooperate with Owner in the conducting of such
audit and, subject to applicable Legal Requirements and the requirements of
vendors, give Owner reasonable access to all contracts, records and other
documents relating to the Generating Facilities. Following any such management
audit, [OPCO] shall respond to the findings of such audit if requested to do so
by Owner. Management audits by Owner shall be scheduled so as to minimize the
number of audits required and so as to not to exceed one management audit in any
consecutive twelve-month period.
ARTICLE 3
Entitlement to Output
3.1 Entitlement to Output. Owner shall be entitled to all of the output
from its Generation Facilities at the time generation in such units occurs.
Subject to [OPCO]'s primary responsibility for safe operation of the Generation
Facilities, Owner shall have the right to schedule and dispatch the capacity and
energy needed from the facilities, and [OPCO] shall use its best efforts to
honor such schedule.
3.2 Determination of Output-Responsibility for Station Service and
Losses. Output of each Generation Facility shall be the gross generation of the
facility, less station service requirements, and less adjustments for losses
experienced. Owner shall be responsible for providing all off-site electric
power required at the Generation Facility whenever the station service and
losses exceed the gross generation of the Generation Facility.
ARTICLE 4
Costs, Billing, Accounting and Audit
4.1 Cost of Operation and Maintenance. Owner shall pay to [OPCO] all
direct costs incurred by [OPCO] relating to Operation and Maintenance Services
for the Generation Facilities (including all costs identified in Section 9.3)
and any costs incurred by [OPCO] as a consequence of termination hereunder).
Such costs shall include all payments made to [OPCO] employees (including
payment of wages, salaries, workmen's compensation and other benefits) relating
to work performed by such employees while on the premises of any of the
Generation Facilities. [OPCO] and Owner acknowledge that all such payments made
to [OPCO] employees, relating to work performed by such employees while on
Generation Facility premises, are effectively made by Owner, since Owner is
responsible for such payments and they are made from funds placed on deposit by
Owner for those purposes. Owner shall also pay to [OPCO] the Generation Facility
allocated share of other of [OPCO]'s costs. Allocation of costs to Operation and
Maintenance Services shall be performed in the manner described in the [OPCO]
Cost Allocation Manual which is incorporated herein by reference. [OPCO] may
revise the Cost Allocation Manual from time to time, in accordance with Legal
Requirements, and the revised Cost Allocation Manual shall be incorporated
herein by reference upon the effective date of the revision.
4.2 New Investment Costs. Owner shall pay to [OPCO] all costs incurred
by [OPCO] relating to New Investment Services for the Generation Facilities,
including obligations incurred to third parties, direct costs of [OPCO]
associated with such New Investment Services and the Generation Facilities
allocated share of [OPCO]'s other costs associated with such activities.
Allocation of costs to New Investment Services shall be performed in the manner
described in the [OPCO] Cost Allocation Manual referred to in Section 4.1
hereof.
4.3 Fuel Costs. Owner shall pay to [OPCO] all direct costs incurred by
[OPCO] relating to Fuel Services for the Generation Facilities and the
Generation Facilities allocated share of other of [OPCO]'s costs. Allocation of
costs to Fuel Costs shall be performed in the manner described in the [OPCO]
Cost Allocation Manual referred to in Section 4.1 hereof.
4.4 Other Costs Required by Legal Requirements. Owner shall pay to
[OPCO] all direct costs incurred by [OPCO] and the Generation Facilities
allocated share of other of [OPCO]'s costs associated with any other activities
of [OPCO] relative to the Generation Facilities that are required to meet Legal
Requirements.
4.5 Revision. Should [OPCO] undertake to perform services for any
other affiliated company or for any non-affiliated company where the cost to
[OPCO] of providing such services affects the cost of [OPCO] to provide
Operating Services pursuant to this Agreement, [OPCO] shall discuss the matter
and reach agreement with Owner respecting the need for or the terms of any
amendment of this Section 4 as may be appropriate to assure the continued
fairness of the determination of the responsibility for costs payable to [OPCO]
hereunder.
4.6 Billing. [OPCO] shall render to Owner a monthly billing statement
no later than the fifteenth (15th) day of each month detailing costs incurred
for Operation and Maintenance Services during the preceding month pursuant to
Section 4.1; costs incurred for New Investment Services during the preceding
month pursuant to Section 4.2; costs incurred for Fuel Services during the
preceding month pursuant to Section 4.3; and the other costs incurred during the
preceding month pursuant to Section 4.4.
4.7 Payment. The obligation to make payments as specified herein shall
continue notwithstanding the capability (or lack of capability) of the
Generation Facilities to produce power for any reason.
4.8 General Accounting Matters. Determinations by [OPCO] on all
accounting matters related to the transactions contemplated by this Agreement
will be in accordance with Generally Accepted Accounting Principles and the
Securities and Exchange Commission's Uniform System of Accounts for Mutual and
Subsidiary Service Companies, utilizing the accrual method of accounting, unless
otherwise specifically provided in this Agreement or mutually agreed by [OPCO]
and Owner or as prescribed by other regulatory agencies having jurisdiction, as
in effect from time to time.
4.9 Right to Inspect Records. During normal business hours and subject
to conditions consistent with the conduct by [OPCO] of its regular business
affairs and responsibilities, [OPCO] will provide Owner or any auditor utilized
by Owner and reasonably acceptable to [OPCO], or any nationally recognized
accounting firm retained by Owner, access to [OPCO]'s books, records, and other
documents directly related to the performance of [OPCO]'s obligations under this
Agreement and, upon request, copies thereof, which pertain to (a) costs
applicable to Operation and Maintenance Services, New Investment Services, Fuel
Services, and Other Costs for Owner's Generation Facilities to the extent
necessary to enable Owner to verify the costs which have been billed to Owner
pursuant to the provisions of this Agreement; (b) compliance with all
environmental Legal Requirements; and (c) matters relating to the design,
construction and operation and retirement of Owner's Generation Facilities in
proceedings before any Governmental Authority.
4.10 Disputed Invoice. In the event Owner shall question any statement
rendered by [OPCO] in accordance with the provisions of Section 4.1 hereof,
Owner shall nevertheless promptly pay amounts called for by [OPCO] under Section
4.1 hereof but such payment shall not be deemed to prevent Owner from claiming
an adjustment of any statement rendered.
ARTICLE 5
Advancement of Funds
5.1 [OPCO] shall prepare forecasts, in such frequency, form and detail
as Owner shall direct, of the funds required to pay [OPCO]'s anticipated costs
of the services to be provided to Owner and the dates on which payment of such
costs shall become due. Owner shall advance funds to [OPCO] in such amounts and
at such times determined on the basis of such forecasts, to enable [OPCO] to pay
its costs of services on or before payment of such costs shall be due. Such
advances shall be made by deposits or bank transfers to accounts of [OPCO] with
such financial institutions as [OPCO] shall designate. Any excess funds in such
accounts shall be invested by [OPCO] in accordance with prudent cash management
practices and all investment income and appreciation received on such funds
shall be credited against the cost of service provided to Owner.
ARTICLE 6
Taxes
6.1 Owner shall report, file returns with respect to, be responsible
for and pay all real property, franchise, business or other taxes, except
payroll and sales or use taxes, arising out of or relating to its ownership of
the Generation Facilities.
ARTICLE 7
Compliance with Provisions of Permits
and Requirements of Governmental Agencies
7.1 Owner and [OPCO] shall cooperate in taking whatever action may be
necessary to comply with the terms and provisions of all permits and licenses
for the Generation Facilities and with all applicable lawful requirements of any
federal, state or local agency or regulatory body having jurisdiction in or over
the Generation Facilities.
ARTICLE 8
Confidentiality of Information
8.1 Each party to this Agreement may, from time to time, come into
possession of information of the other parties that is either confidential or
proprietary. Any party having any such information which is known to be
considered by any other party as either confidential or proprietary will not
reproduce, copy, use or disclose (except when required by a Governmental
Authority) any such information in whole or in part for any purpose without the
written consent of the other party. In disclosing confidential or proprietary
information to a Governmental Authority, the disclosing party shall cooperate
with the other party in minimizing the amount of such information furnished. At
the specific request of the other party, the disclosing party will endeavor to
secure the agreement of such Governmental Authority to maintain specified
portions of such information in confidence. Public dissemination of information
by the furnishing party before or after it is furnished shall constitute a
termination of the confidentiality requirement as to that specific information.
ARTICLE 9
Damage to Persons or Property; Penalties; Fines
9.1 Applicability of Article. Since [OPCO] is undertaking its
responsibilities hereunder (i) at cost and (ii) in order to assist Owner in
meeting its responsibilities with respect to its Generation Facilities, the
following provisions shall be applicable to loss or damage to the property of
any or all of the parties hereto (including Generation Facilities property) or
of third parties, or injuries to or loss of life by any person, including
employees of the parties hereto, and to penalties or fines assessed with respect
to the Generation Facilities:
9.2 Absence of Warranty. [OPCO] does not warrant that its performance
of Operating Services will meet the standards set forth in Sections 2.1 and 2.2
hereof, and its sole obligation if it fails to meet such standards is to
reperform at the request of Owner the deficient work at cost payable by Owner in
a manner that complies with such standards. Owner acknowledges that such
services are not subject to any warranty of any nature, express or implied,
including, without limitation, any warranty of merchantability or fitness for a
particular purpose.
9.3 Liabilities to Third Parties and Owner. (a) To the fullest extent
provided by law, all liability to third parties other than liability for Willful
Misconduct as defined in 9.4 below, whether arising in contract (including
breach of warranty), tort (including fraud, negligence, product liability,
breach of fiduciary duty or any other theory of tort liability), under the laws
of real property or otherwise, or as a result of fines or other penalties
imposed by any Governmental Authority, that results from or is in any way
connected with the provision of Operation and Maintenance Services, New
Investment Services, or Fuel Services for the Generation Facilities shall be
borne by Owner in their entirety. Owner shall indemnify and hold harmless
[OPCO], its agents servants, directors, employees, affiliates and insurers (the
"Indemnified Parties") from and against any and all claims, losses, damages,
expenses and costs of any kind, including without limitation attorneys fees,
costs of investigation and court costs, other than those attributable to Willful
Misconduct of [OPCO], as defined in Section 9.4 hereof, whether direct or
indirect, on account of or by reason of bodily injuries (including death) to any
person or persons or property damage arising out of or occurring in connection
with the provision of Operation and Maintenance Services, New Investment
Services, or Fuel Services for the Generation Facilities, whether or not such
claims, losses, damages, expenses or costs were caused by or alleged to have
been caused by or contributed to by the active, passive, affirmative, sole or
concurrent negligence or by breach of any statutory or other duty (whether
non-delegable or otherwise) of any of the Indemnified Parties.
Except for consequences of Willful Misconduct, Owner and its
affiliates, servants, employees, agents and insurers hereby release, acquit and
forever discharge the Indemnified Parties, to the fullest extent permitted by
applicable law, from any and all damages, claims, causes of action, damage to
property of Owner or expenses of whatever kind or nature, that are in any manner
connected with the provision of any Operating Services or the performance and
prosecution of any project or work by any of the Indemnified Parties for or on
behalf of Owner for its Generation Facilities, whether arising in tort
(including fraud, negligence, strict liability, breach of fiduciary duty or any
other theory of tort liability), contract (including breach of warranty), under
the laws of real property or otherwise, or as a result of any fine or other
penalty imposed by any Governmental Authority. This release shall be effective
whether or not such claims, causes of action, damages, or expenses were caused
or alleged to have been caused by or contributed to by the active, passive,
affirmative, sole or concurrent negligence or by breach of any statutory or
other duty (whether non-delegable or otherwise) of any of the Indemnified
Parties.
9.4 Willful Misconduct. As used in this Agreement, the term "Willful
Misconduct" shall mean any act or omission by any of the Indemnified Parties
that is performed or omitted consciously with actual knowledge that such conduct
is likely to result in damage or injury to persons or property; provided,
however, that any such act or omission, if performed or omitted by an
Indemnified Party, shall not be deemed Willful Misconduct unless an officer of
[OPCO] at or above the level of Vice President shall have expressly authorized
such act or omission. [OPCO] shall exercise reasonable and customary supervision
or control over the activities of its agents, servants, or employees, and its
affiliates, so as to minimize the potential for adverse willful actions by such
agents, servants or employees or affiliates; provided, however, that failure of
[OPCO] to prevent such adverse willful actions shall not itself be considered
Willful Misconduct. Liability attributable solely to Willful Misconduct shall be
borne by [OPCO], subject to the limitation of liability in Section 9.5 below.
9.5 Limitation of Liability. Notwithstanding Sections 9.3 and 9.4
hereof, Owner agrees that in no event shall any of the Indemnified Parties be
liable to Owner for any indirect, special, punitive, incidental or consequential
damages including, without limitation, (1) loss of profits or revenues, (2)
damages suffered as a result of the loss of the use of Owner's power system,
Generation Facilities or equipment, (3) cost of purchase of replacement power
(including any differential in fuel or power costs), or (4) cost of capital with
respect to any claim based on or in any way connected with this Agreement
whether arising in contract (including breach of warranty), tort (including
fraud, negligence, strict liability, breach of fiduciary duty or any other
theory of tort liability), under the laws of real property or any other legal or
equitable theory of law, or as a result of any fine or other penalty imposed by
any Governmental Authority. Owner shall release, acquit, forever discharge,
indemnify, and hold harmless the Indemnified Parties from and against any claim
by any customer of Owner, or any other third party, for any direct, indirect,
special, punitive, incidental or consequential damages arising out of any
performance or failure to perform under this Agreement. The provisions of this
Section 9.5 shall apply to the fullest extent permitted by law.
9.6 Severability. In the event that any particular application of any
of the limitations of liability contained in this Article 9 should be finally
adjudicated to be void as a violation of the public policy of the State of
________________, then such limitation of liability shall not apply with respect
to such application to the extent (but only to the extent) required in order for
such limitation of liability not to be void as a violation of such public
policy, and such limitations of liability shall remain in full force and effect
with respect to all other applications to the fullest extent permitted by law.
ARTICLE 10
Insurance
10.1 Parties' Obligations Generally. During the term of this Agreement
Owner and [OPCO] shall make reasonable efforts to procure and maintain in force
such physical damage and loss, public liability, workers' compensation,
officers' liability and other insurance as Owner may deem appropriate with
respect to all losses, damages, liability and claims arising out of Owner's
ownership of its Generation Facilities and [OPCO]'s operation thereof and the
provision of Operating Services hereunder. All such insurance policies shall
identify [OPCO] and Owner as additional insureds thereunder as their interests
may appear, and shall contain a waiver of subrogation clause in favor of [OPCO]
and Owner to the extent of the applicable limits of such policies. The aggregate
cost of all insurance, applicable to each Generation Facility and procured by
[OPCO] pursuant to this Agreement, and any payment by [OPCO] of any deductible,
self-insured retention, or co-payment in connection with any policy claim
arising out of [OPCO's] performance of this Agreement shall be included in the
costs of Operating Services. [OPCO] will take steps to meet the requirements of
such insurance policies and cooperate with Owner to furnish information,
establish procedures, erect or change physical facilities and otherwise meet the
requirements of the insurers to maintain coverage in effect and to collect
claims that may be made under such insurance. In the event that any of the
insurance described in this Article 10 is canceled by a party, that party shall
give written notice of such cancellation to the other party at least sixty (60)
days prior to the effective date of such cancellation.
10.2 Commercial Liability Insurance. [OPCO] will carry insurance to
cover the legal obligations to pay damages because of bodily injury or property
damage. The limit and the deductible of such coverage shall be the appropriate
amounts as determined by [OPCO].
10.3 Workmen's Compensation Insurance. [OPCO] shall qualify as a
self-insurer in ________________ and with the U.S. Department of Labor for
purposes of the U.S. Longshoreman's and Harbor Worker's Act, but will provide an
umbrella policy to cover benefits in excess of its assumed liability for
workmen's compensation, the Longshoreman's and Harbor Worker's Act, and
employers liability. The Owner and [OPCO] acknowledge that, pursuant to the
terms of this Agreement, all premiums for [OPCO]'s workmen's compensation
insurance and all payments to [OPCO] employees, including workmen's compensation
benefits, relating to work performed by such employees while on the premises of
a Generation Facility, are effectively made by the Owner, since such premiums
and payments constitute direct charges incurred by [OPCO] in relation to the
performance of Operating Services for such Generation Facility. It is the intent
of Owner and [OPCO] that for purposes of workmen's compensation Owner not be
exposed to greater liability by virtue of this Agreement than Owner would have
if it had utilized Owner employees to perform Operating Services.
10.4 Additional Insurance. In the event Owner at any time or from time
to time shall have elected to participate in supplemental insurance programs to
cover other risks arising from the ownership and operation of a Generation
Facility, including the extra costs of replacement power, the costs of such
protection shall be borne by Owner.
10.5 Waiver of Subrogation - Allocation and Payment of Premium. Each
insurance policy obtained by a party hereto shall contain waivers of subrogation
against the other party, if obtainable from the insurer. The aggregate cost of
all insurance, applicable to the Generation Facilities and procured by [OPCO]
pursuant to this Agreement, shall be considered an Operating Cost. In the event
that any of the foregoing insurance policies is canceled by a party, that party
shall give written notice of such cancellation to the other party sixty (60)
days prior to the effective date of such cancellation.
ARTICLE 11
Term
11.1 Term. The term of this Agreement shall commence on the Effective
Date, subject nevertheless to any applicable rules, regulations or approvals of
any regulatory authority whose approval is required. This Agreement shall expire
(i) when all Generation Facilities have been retired and each site has been
returned to a condition acceptable to Owner, all in compliance with Legal
Requirements; (ii) upon termination pursuant to Section 12.1; or (c) upon mutual
agreement of the parties. In no event, however, shall this Agreement terminate
as to Owner unless all necessary regulatory approvas for transfer of
responsibility for all Generation Facilities of Owner have been obtained.
Owner's obligation to make payments to [OPCO] under this Agreement that have not
been satisfied prior to the expiration of the term of this Agreement shall
survive such expiration of the term.
ARTICLE 12
Remedies
12.1 Termination. In the event Owner determines that it is in its
interest to do so, or [OPCO] determines that it is in [OPCO]'s interest to do
so, either [OPCO] or Owner may at will terminate this Agreement as provided
below. Except as may be otherwise provided in Section 12.2 and Article 9 hereof,
this right of termination shall be Owner's sole and exclusive remedy, legal or
equitable, for any failure by [OPCO] at any time to perform its duties,
responsibilities, obligations, or functions under this Agreement, or for any
other breach by [OPCO] of this Agreement. The procedure for exercise of this
right of termination shall be as follows:
12.1.1 Owner shall give written notice to [OPCO] of Owner's
determination to terminate this Agreement or [OPCO] shall give written
notice to Owner of its determination to terminate this Agreement. It is
recognized that no termination can be accomplished until all necessary
regulatory approval has been obtained to transfer the operating
responsibility for the Generation Facilities to Owner. Following the
giving of such notice, the parties agree to cooperate, in good faith,
to accomplish the transfer of operating responsibility in a prompt
manner.
12.1.2 During the period between the giving of the notice of
determination to terminate, and the date on which such transfer of
operating responsibility is accomplished, [OPCO] agrees to continue the
provision of Operating Services for the Generation Facilities.
12.1.3 Upon receipt of all necessary governmental
authorization for transfer of operating responsibility for each
Generation Facility from [OPCO] to Owner, this Agreement shall
terminate. Except as may otherwise be provided in Section 12.2 and
Article 9 hereof, Owner hereby agrees that from and after such
termination Owner shall indemnify and forever hold [OPCO] , its
servants, directors, employees, affiliates and its agents harmless from
and against any and all liability, costs, expenses (including
reasonable attorneys' fees) and judgments, which may thereafter be
experienced by [OPCO], which are in any way related to, arise out of or
are in connection with the activities of [OPCO], its agents, servants,
directors, employees and affiliates under this Agreement (whether the
cause occurred before or after termination), and Owner further waives
any claim Owner may have against [OPCO], its officers, directors,
employees, affiliates and agents for damage to property of Owner, that
arose out of or in connection with the activities of [OPCO], its
officers, directors, employees, affiliates and agents under this
Agreement. The indemnification and waiver contained herein shall
survive termination and shall be specifically enforceable by [OPCO]
against Owner.
ARTICLE 13
Miscellaneous
13.1 No Partnership or Joint Venture. Nothing in this Agreement shall
be deemed to create or constitute a partnership, joint venture or association
among the parties hereto or any of them, the sole purpose of this Agreement
being limited to providing for the orderly and efficient operation, maintenance,
repair, upgrade, rehabilitation, renewal, replacement, additions and
construction of the Generation Facilities.
13.2 Owner's Designated Representatives. Owner hereby designates its
President as Owner's Representative, who shall receive notices and
communications from [OPCO] under the provisions of this Agreement and who shall
send to the designated Representative of [OPCO] all notices and communications
under the provisions of this Agreement.
13.3 [OPCO]'s Designated Representative, [OPCO] hereby designates its
President as the [OPCO] Representative, who shall receive notices and
communications from Owner's Representative under the provisions of this
Agreement and who shall send to Owner's Representative all notices and
communications concerning the provisions of this Agreement.
13.4 Depreciation. Owner shall determine the basis and method it will
use for purposes of depreciation and other matters where investment in
Generation Facilities property is relevant.
13.5 Holidays, Business Days. Any obligations to perform under this
Agreement, including payment obligations, which shall become due on a
non-business day shall become due upon the next business day. The term "business
day" shall mean any day other than a day on which banking institutions in the
City of __________, ________________ are authorized by law to close.
13.6 Owner's Services to be Furnished at Cost. To the extent that Owner
may, from time to time, provide goods or services to [OPCO], [OPCO] shall pay
for such goods and services at Owner's cost determined as herein provided, which
payments shall thereupon be treated as Generation Facilities costs under Article
4.
13.7 Entire Agreement. This Agreement constitutes the entire
understanding among the parties hereto, superseding any and all previous
understandings, oral or written, pertaining to the subject matter contained
herein. No party hereto has relied or will rely upon any verbal or written
representation or verbal or written information made or given to such party by
any representative of the other party or anyone on its behalf.
13.8 Amendments. This Agreement may not be amended, modified, or
terminated, nor may any obligation hereunder be waived verbally, and no such
amendment, modification, termination or waiver shall be effective for any
purpose unless it is in writing, and signed by both parties hereto, and all
necessary regulatory approvals have been obtained.
13.9 Notices. Any notice, request, consent or other communication
permitted or required by this Agreement shall be in writing and shall be deemed
given when deposited in the United States Mail, first class postage prepaid, and
addressed as follows:
If to [OPCO]: [OPCO]
=====================
Attention: President
If to Owner: [NEWCO]
========================
Attention: President
Unless a different officer or address shall have been designated by
the respective party by notice in writing.
13.10 Captions. The descriptive captions of the various Articles,
Sections and Paragraphs of this Agreement have been
inserted for convenience of reference only and shall in no way modify or
restrict any of the terms and provisions hereof.
13.11 Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
13.12 No Waiver. Failure of any party to enforce any rights or to
require performance of any other party of any of the provisions of this
Agreement shall not release any party of any of its obligations under this
Agreement and shall not be deemed a waiver of any rights of the parties to
insist on performance thereof, or of any of the parties' rights or remedies
hereunder, and in no way shall affect the validity of these terms and conditions
or any part thereof, or the right of any party thereafter to enforce every
provision hereof.
13.13 Singular and Plural. Throughout this Agreement, whenever any word
in the singular number is used, it shall include the plural unless the context
otherwise requires; and whenever the plural number is used, it shall include the
singular unless the context otherwise requires..........
13.14 Third Party Beneficiaries. This Agreement is for the benefit of
Owner and [OPCO], and no person or entity other than Owner and [OPCO] is or
shall be entitled to bring any action to enforce any provision of this Agreement
against anyone.
13.15 Severability. Should any provision of this Agreement be held to
be invalid or unenforceable by a court of competent jurisdiction, the remaining
provisions shall remain in full force and effect, provided that deletion of the
invalid or unenforceable provision does not materially affect the agreement of
the parties contained herein.
ARTICLE 14
Successors and Assigns
14.1 This Agreement and all of the terms and conditions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that neither this Agreement nor any
of [OPCO]'s obligations hereunder shall be assignable by [OPCO], in whole or in
part, without the express written consent of Owner. Any mortgage indenture
trustee which shall foreclose on substantially all of the electric generation
properties of Owner may, at such trustee's own election, be deemed to be a
successor and assign of Owner under this Agreement.
ARTICLE 15
Governing Law
15.1 This Agreement shall be construed in accordance with,
and to be governed by, the laws of the State of _______________.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and by their duly authorized representatives as of the day and year
first above written.
[OPCO]
By________________________________________
President
[NEWCO]
By
-----------------------------------------------
President
SCHEDULE 1
NEWCO GENERATING FACILITIES
GENERATING STATION .................LOCATION
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