Exhibit 10.2
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May 22, 2000
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CONTACT: The Potomac Edison Company dba Allegheny Power
Energy Procurement Division
Attention: Xxxx X. Xxxxx
000 Xxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Phone: 000-000-0000
FAX: 000-000-0000
BILLING ADDRESS: 000 Xxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
AE MARKETER: Allegheny Energy Supply Company, LLC ("AE Supply")
Attention: Xxx X. Xxxxx
Phone: 000-000-0000
FAX: 000-000-0000
TRANSACTION: E00-0001-R1
GENERAL: This is a "services provision" product that is
designed and priced to provide the flexibility
necessary to serve a variable retail load. The
inherent flexibility of this product is not intended
to permit arbitrage in the wholesale markets. At its
sole discretion, AE Supply may source the generation
components of this product, in whole or in part, at
any time, from any number of suppliers in the
wholesale generation market, provided applicable ECAR
rules are observed.
Other non-rate terms and conditions may be negotiated
between the parties from time to time.
Allegheny Power agrees to exercise best efforts to
minimize the risk to AE Supply, hereunder, which
includes but is not limited to the following: enforce
its tariff provisions, enforce retail contract
provisions, enforce PURPA contract provisions,
implement a generation buy-back program, support
favorable regulatory initiatives, and actively manage
default service.
TERM OF SERVICE: July 1, 2000 through December 31, 2008
DELIVERY POINT(S): Into Allegheny Power Control Area, Seller's Choice
AE Supply will deliver firm power to Allegheny Power
into the Allegheny Power electrical control area at
any Allegheny Power transmission interconnection(s)
and/or generator step-up transformer(s) within
Allegheny Power.
AE Supply, at its sole discretion, may schedule the
delivery of firm power to Allegheny Power in any
combination of MW amounts and at any combination of
delivery points, such that the total power supply
requirements under this agreement are met.
SCHEDULING: Hours ending 01:00 through 24:00 EPT (24 hours)
Daily retail schedules will be submitted by Allegheny
Power to AE Supply by 11:30 EPT, one (1) business day
prior to delivery. A business day is any Monday
through Friday excluding NERC holidays.
AE Supply 24-Hour Trading Desk: 000-000-0000
FAX: 000-000-0000
AE Supply will act as agent for Allegheny Power with
respect to scheduling with the Allegheny Power
Control Area or its successor, including any
adjustments thereto, deemed necessary by the Control
Area or AE Supply.
TYPE OF SERVICES: AE Supply will provide firm power, through any means
available, including purchases in amounts equal to
Allegheny Power's full Standard Offer Service retail
requirements for the Potomac Edison franchise within
the state of Maryland, including all losses and
energy imbalance charges, whether those charges are
for Supply or Consumption imbalance within Allegheny
Power.
PRICE: The price for all MWh delivered and services provided
hereunder shall be the greater of the actual average
annualized unbundled generation rate, as established
by the Maryland Public Service Commission, or 102% of
the incremental delivered cost that AE Supply incurs
in providing services during a calendar year. For
purposes of intra-year administration of this
agreement, the estimated average annualized unbundled
generation rate for Standard Offer Service customers
during each calendar year is as follows:
2000 $30.66/MWh
2001 $31.52/MWh
2002 $31.52/MWh
2003 $31.52/MWh
2004 $31.52/MWh
2005 $31.52/MWh
2006 $31.52/MWh
2007 $31.52/MWh
2008 $31.52/MWh
Allegheny Power will pay the applicable estimated
average annualized unbundled generation rate each
month for services rendered and will true-up the
payments to the actual average price, including
reconciliation imbalances, (or the multiple of
incremental delivered cost, if applicable) subsequent
to year-end and when pertinent data are available.
Intra-year adjustments to the estimated booked-price,
from time to time, may also be performed at Allegheny
Power's discretion.
RESERVATION: Allegheny Power will provide a rolling 24 month
forecast of its anticipated retail load. Allegheny
Power does not guarantee maximum or minimum load.
Reservations will be made on a monthly basis based on
the most recent retail forecast.
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ASSIGNMENT: In AE Supply's sole discretion, this agreement may be
assigned to any organizational successor of AE
Supply. Prior to assignment, AE Supply will notify
Allegheny Power of its intentions.
CANCELLATION: AE Supply may cancel this Agreement at any time with
twelve (12) months written notification. Upon receipt
of written notification, purchases hereunder will be
reduced to the levels indicated by the following
schedule:
270 days prior
to cancellation: 75% of the monthly reservation
180 days prior
to cancellation: 50% of the monthly reservation
90 days prior
to cancellation: 25% of the monthly reservation
Date of cancellation: 0% of the monthly reservation
BILLING AND
PAYMENT: Each Monday or next subsequent business day if Monday
is a Banking or Company holiday, for the preceding
seven-day period Sunday through Saturday, as deemed
necessary by AE Supply, AE Supply shall notify
Allegheny Power via email of the amount to be prepaid
based on the transactions scheduled or a reasonable
estimate for the pertinent period. Allegheny Power
shall pay the requested prepaid amount within 24
hours of notification.
On or before the eighth working day of each calendar
month, AE Supply shall calculate the amount due for
the actual deliveries to Allegheny Power for the
previous calendar month. That amount shall then be
reconciled with the total prepaid amounts received
from Allegheny Power during the previous calendar
month. Any payment or credit due as the result of
such reconciliation shall be made by the end of the
twentieth (20th) calendar day of the month.
SPECIAL TERMS
AND CONDITIONS: AE Supply will be responsible to meet all retail
schedules provided by Allegheny Power that meet the
notification guidelines of the Allegheny Power
electric distribution company and AE Supply.
Interruptible Loads: Allegheny Power may have special
arrangements with certain retail customers that
permit curtailment for economic reasons. AE Supply
will notify Allegheny Power by 9:00 am, one business
day prior to delivery of its desire to interrupt
load, including the quantity of load requested and
the period of the interruption. Allegheny Power will
reply to AE Supply no later than 10:30 am of the
quantity of load available for interruption. AE
Supply and Allegheny Power will share, at a ratio of
50/50, the net benefits of the hourly price avoided
or received for each MWh of load interrupted.
Allegheny Power will provide sufficient documentation
to verify the load interrupted.
ALLEGHENY ENERGY SUPPLY COMPANY, LLC THE POTOMAC EDISON COMPANY
DBA ALLEGHENY POWER
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxx
Title: Vice President Title: Vice President
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