AMENDED AND RESTATED THREE-PARTY TRANSMISSION AGREEMENT
Exhibit
10.1
AMENDED
AND RESTATED
AGREEMENT
dated as of June
30,
2006; among Vermont Electric Power Company, Inc., a Vermont corporation
(“Velco”), Central Vermont Public Service Corporation, a Vermont corporation,
(“CVP”), Green Mountain Power Corporation, a Vermont corporation (“GMP”),and
Vermont Transco LLC, a limited liability company duly organized under the laws
of the State of Vermont (“VTransco”). CVP and GMP are sometimes collectively
referred to as the “Companies” or either of them
as
the
“Company.”
WHEREAS,
Vermont Yankee Nuclear Power Corporation, a Vermont corporation (“Vermont,
Yankee”), constructed a nuclear electric generation unit at a site adjacent to
the Connecticut River at Vernon, Vermont, which unit was designed to have a
maximum net capability of approximately 540 megawatts electric (said unit,
being
herein referred to as the “Vermont Yankee Unit”) of which CVP and GMP agreed to
purchase an aggregate of 55% of the capacity and net electrical output of the
Vermont Yankee Unit; and
WHEREAS,
CVP, and GMP proposed; that such power as they acquire from Vermont Yankee
(the
“Vermont Yankee power”) would be offered to all of the electric distribution
companies including the Companies in the State of Vermont whether cooperatively,
municipally or investor owned (“Distributees”) without preference or
discrimination and to that end proposed to sell such power at its cost to the
Companies to Velco for resale to such companies, and
WHEREAS,
Velco has acquired from time to time, and may from time
to
time in
the future acquire, bulk power from other sources for resale to Distributees;
and
WHEREAS,
the transmission of the Vermont Yankee power and of other bulk power throughout
Vermont required construction and operation of-
a high
voltage electric transmission system, including transmission lines, transformer
substations and switching stations, together with various auxiliary protection,
control and metering facilities, all in addition to the transmission system
then
owned and operated by Velco; and
WHEREAS,
Velco has agreed to contribute to VTransco substantially all of its electricity
transmission system, subject to liabilities; and
WHEREAS,
substantial economies has been achieved by combining facilities for the
transmission of the Vermont Yankee power and of other power into an integrated
electric transmission system including the system presently owned and operated
by Velco and to be owned and operated by VTransco, and the economic welfare
of
the people of Vermont and the interests of users of electric power in Vermont
can best be served by realizing such economies in cost of electric power; and,
WHEREAS,
VTransco
proposes
to construct such additional transmission facilities and to provide transmission
service in Vermont adequate for transmission of the Vermont Yankee power and
other power to Distributees, and further proposes that its charges for
transmission of such power will be without profit and will consist of
compensation for costs incurred, including cost of money invested in connection
with such transmission; and
WHEREAS,
VTransco proposes to finance, in part, construction of .any
additional facilities by the issuance from time to time of bonds under its
Indenture of Mortgage dated as of September 1, 1957 (the “Indenture”) and the
inducements to purchasers in agreeing to purchase bonds will include the
agreements of the Companies contained in this Agreement;
NOW,
THEREFORE, in consideration of the premises and of the mutual benefits from
the
covenants hereinafter set forth, it is agreed:
ARTICLE
I. Facilities
to be provided.
1.1 Nature
of Transmission System. VTransco
during the term of this Agreement will provide an electric transmission system
and associated facilities adequate to receive Vermont Yankee power and other
power at the points of delivery thereof and to deliver such power (after
allowance for transmission losses) either directly or through the facilities
of
others to Distributees at such delivery voltages and at such delivery points
as
may be hereafter specified. Said electric transmission system and accompanying
facilities, including any additions or extensions which subsequently may be
made
as herein provided, shall be designed and constructed in accordance with
standards of modern practice.
1.2 Initial
Construction. The
principal initial additions to the system presently operated by Velco consisted
of the following:
(a) A
115 KV
transmission line and related facilities from Middlebury to Rutland that was
to
be completed by December 1969;
(b) A
230 KV
transmission line and related facilities from Barre to the Xxxxxxxxx Plant
of
New England Power Company that was to be completed by July 1970;
(c) A
345 KV
transmission line and related facilities from the Vermont Yankee Unit at Vernon
to the existing Rutland-Ascutney line near Ludlow that was to be completed
in
time to receive the Vermont Yankee power at the point of purchase on April
1,
1971 or on such later date as such power becomes available.
Velco
agreed to use its best efforts to provide for the construction and installation
of the aforesaid facilities in accordance with the foregoing time
schedule.
1.3 Subsequent
Facilities. Facilities
to be provided by VTransco hereunder in addition to those described in Section
1.2 shall be subject to approval by CVP and GMP.
ARTICLE
II. Services
to be provided.
2.1 Transmission. VTransco
will transmit power, including Vermont Yankee power, less losses incurred in
transmission calculated as set forth below, for the account of each Company,
at
any time that capacity is available for such purpose in the transmission
facilities of VTransco. VTransco will undertake to make such capacity available
at any time when doing so will not interfere with the primary obligation to
deliver capacity or energy for the Sate of Vermont (the “State”) pursuant to the
obligations under the Power Transmission Contract with the State dated June
13,
1957, as it may be amended from time to time (the “Power Transmission
Contract”).
2.2 Calculation
of Losses. Losses
of
power transmitted shall be determined in accordance with sound engineering
methods and such losses shall include a proportionate amount of all allowances
for losses on the systems of others pursuant to arrangements by VTransco for
their use in the delivery of such power.
ARTICLE
III. Payments.
3.1 During
transmission by VTransco for the State. So
long
as VTransco is transmitting capacity or energy for the State under the Power
Transmission Contract, VTransco will charge to each Company, and each Company
will pay to VTransco, each calendar month during the term of this Agreement
as
compensation for the use of VTransco’s facilities and for the services performed
by VTransco hereunder, a monthly transmission capacity charge, for each kilowatt
of capacity then being purchased by such Company by VTransco , determined by
the
following formula:
A
=
__BC__ + FO
TP+SP TP
Where:
A
=
Monthly charge per kilowatt,
BC
= That
portion of the monthly base charge payable by the State to VTransco pursuant
to
the provision of Article IV of the Power Transmission Contract applicable to
the
use of “the transmission facilities of VTransco” as hereinafter defined, after
deductions pursuant to clause (m) of paragraph 4.3 of said Article IV other
than
for income received for transmission of power included in TP,
TP
=
Total of all kilowatts of power then being transmitted by VTransco for the
electric distribution utilities in the Sate of Vermont other than power included
in SP,
SP
=
Total of all kilowatts of power which VTransco is required to transmit for
the
State of Vermont pursuant to the Power Transmission Contract,
FO
= All
amounts payable during such month by VTransco for the use of facilities of
others, if any, in the transmission of power included in TP from the points
at
which the power enters the facilities of he Company or an assignee of the
Company.
except
that the portion of this transmission capacity charge determined by the first
fraction of the above formula shall be omitted for such kilowatts of power
as
are transmitted for such Company under the terms of the Agreement re charges
for
Transmission of Firm Power dated June 19, 1961, as amended, to the extent that
such kilowatts are not added to such Company’s Accredited Capacity in Schedule A
of that Agreement and do not thereby reduce the Capacity Deficiency of such
Company under that Agreement.
For
the
purposes of this Section 3.1, the phrase “transmission facilities of VTransco”
shall mean the physical facilities owned and operated by VTransco (with he
exception of the submarine cable and transmission lines, and associated
facilities, from the New York-Vermont State boundary to the VTransco substation
at Essex, Vermont, for those kilowatts included in TP not requiring these
transmission facilities), plus the facilities of others employed by VTransco
under contracts, leases, agreements or arrangements with the owners and
operators thereof.
The
portion of VTransco’s costs applicable to the submarine cable and transmission
lines, and associated facilities, from the New York-Vermont state boundary
to
the VTransco substation at Essex, Vermont, for the purposes of calculating
the
amount to be excluded from item “BC” in the formula included in this Section
3.1, shall be determined by deducting from the amount of monthly base charge
otherwise payable under the provisions of Article IV of the Power Transmission
Contract, an amount obtained by multiplying by a fraction consisting of a
numerator composed of the original cost (which at November 30, 1967 amounted
to
$1,095,440) of the said submarine cable, transmission line and associated
facilities, and a denominator equal to the total original cost (which at
November 30, 1967 amounted to $11,175,965) of all of VTransco’s plant
facilities, the total of the items included in that base charge and contained
in
subparagraphs (a), (b), (c), (g), (h), (j) and (k) of paragraph 4.3 of Article
IV of the Power Transmission Contract.
3.2 When
no power is being transmitted by VTransco for the State.
(a) When
no
capacity or energy is being transmitted by VTransco for the State under the
Power Transmission Contract, the aggregate amount for any period to be charged
by VTransco to the Companies and paid by the Companies to VTransco, as
compensation for the use of VTransco’s facilities and for the services performed
by VTransco hereunder, shall be equal to VTransco’s Net Costs for such period,
as hereinafter defined. CVP and GMP each severally agree to pay, as provided
in
paragraph (d) of this Section, its share of such net costs determined in
accordance with paragraph (c) of this Section.
(b) For
the
purposes of this Section 3.2, the following definitions shall
apply:
“Net
Costs” for any period shall mean the excess of (x) the Total Costs for such
period over (y) the sum of all amounts received by VTransco during such period
from all sources other than from companies under this Agreement, including
revenues from the sale of power or from the transmission thereof.
“Total
Costs” for any period shall mean the sums of the following for such
period:
(1) All
operating expenses, including the cost of purchased power but exclusive of
charges for depreciation of properties paid for by application of the proceeds
of securities which by their terms require their amortization, plus
(2) All
fixed
charges, including interest and amortization of debt discount and expense and
premium on debt, plus
(3) Regular
amortization of principal of securities required by their terms; provided,
however,
there
shall not be included, in the even of the acceleration of the maturity of any
indebtedness by declaration or otherwise, any amount applicable to the principal
of any indebtedness in addition to the regular amortization requirements,
plus
(4) An
amount
equal to all taxes including taxes on or measured by income, plus
(5) An
amount
for such period which, after provision shall have been made for all of the
other
costs including all taxes on or measured by income shall equal on an annual
basis, 6% of the par value of Velco’s outstanding Class A Common Stock plus 8%
of the par value of Velco’s outstanding Class B Common Stock, all as shown by
Velco’s books as of the beginning of such period.
(c) The
portion to be paid by each of the Companies of the Net Costs for any period
shall be that percentage of such Net Costs computed by dividing (i) the total
kilowatts which such Company has for such period agreed to have VTransco
transmit by (ii) the aggregate kilowatts which both Companies have for such
period agreed to have VTransco transmit. The obligation of each of the Companies
to make payments required by this Section 3 shall be several and not joint
or
joint and several and shall be limited to payment of its portion as set forth
in
this Section 3.
(d) VTransco
will xxxx each Company as soon as practicable after the end of each month for
all amounts payable by each Company for the particular month. Such bills shall
be due and payable when rendered, shall include such detail as a Company may
reasonable request, and may be rendered on an estimated basis subject to
corrective adjustments after rendition. Upon request by a Company, VTransco
shall provide estimates of such corrective adjustments.
Any
amount due and remaining unpaid ten days following the date of issuance of
bills
shall bear interest at an annual rate, compounded monthly, equivalent to one
hundred twenty percent (120%) of the current prime rate then in effect at the
First National Bank of Boston, from the due date to the date payment is received
by VTransco.
ARTICLE
IV General
Provisions.
4.1 Regulatory
Authorizations. The
performance of the obligations of each of the companies hereunder shall be
subject to all regulatory authorizations necessary to permit it to perform
all
the obligations to be performed by it hereunder; and each of Companies covenants
agrees to use its best efforts to secure and maintain such regulatory
authorizations. The performance of the obligations of VTransco hereunder shall
be subject to all regulatory authorizations necessary to permit VT to perform
all the obligations to be performed by VTransco hereunder; and VTransco
covenants and agrees to use its best efforts to secure and maintain such
regulatory authorizations.
4.2 Other
Transmission for the State. In
the
event that the State during the term of this contract shall acquire other power
of transmission within the State from sources outside the State, other than
St.
Xxxxxxxx and Niagara Project power, and contracts or arrangements are made
for
the transmission of such power pursuant to the provisions of paragraph 2.2
of
the Power Transmission Contract, then such adjustments to Section 3.1 of this
contract as the circumstances may require shall be made by agreement of the
parties with the approval of the Vermont Public Service Board.
4.3 Assignment. This
contract shall be binding upon and shall inure to the benefit of the parties
hereto and their corporate successors and assigns, but neither party hereto
shall voluntarily assign or transfer its rights hereunder except as security
for
indebtedness to the assignor or except in accordance with prior written consent
of the other party.
4.4 Uncontrollable
Forces. VTransco
shall not be held responsible or liable for any loss or damage to the Companies
on account of delay in completion of facilities or nondelivery of energy
hereunder at any time caused by uncontrollable forces; provided, however, that
delay or nondelivery on account of any such uncontrollable forces shall not
relieve the Companies from their obligation to pay VTransco any amounts payable
pursuant to the provisions of Article III hereof. The term “uncontrollable
forces” shall for purposes hereof mean any cause beyond the control of the party
affected, including, but no limited to, failure of facilities, flood,
earthquake, storm, lightning, fire, hurricane, war, riot, civil disturbance,
labor stoppage, sabotage, and restraint by court or public authority, which
by
exercise of due foresight such party could not reasonably have been expected
to
avoid.
ARTICLE
V. Term.
This
contract shall become effective upon a date allowed by the Federal Energy
Regulatory Commission and any other appropriate regulatory body having
jurisdiction, and shall continue in effect until the Indenture shall have been
satisfied and discharged and thereafter until terminated by written notice
from
any party hereto to the other parties at least six months prior to the
termination date specified in such notice.
IN
WITNESS WHEREOF, the parties hereto have caused this contract to be executed
on
their behalf by their duly authorized representatives, all as of the day and
the
year fist herein written.
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VERMONT
ELECTRIC POWER COMPANY, INC.
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By:
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/s/Xxxxxx
X. Xxxx
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Name:
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Xxxxxx
X. Xxxx
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Title:
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Vice
President
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IN
WITNESS WHEREOF, the parties hereto have caused this contract to be executed
on
their behalf by their duly authorized representatives, all as of the day and
the
year fist herein written.
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CENTRAL
VERMONT PUBLIC SERVICE CORPORATION
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By:
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/s/Xxxxxxx
X. Xxxxxx
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Name:
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Xxxxxxx
X. Xxxxxx
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Title:
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Vice
President, Power Planning and Regulatory
Affairs
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IN
WITNESS WHEREOF, the parties hereto have caused this contract to be executed
on
their behalf by their duly authorized representatives, all as of the day and
the
year fist herein written.
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GREEN
MOUNTAIN POWER CORPORATION
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By:
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/s/Xxxxxx
X. Xxxxxxx, Xx.
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Name:
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Xxxxxx
X. Xxxxxxx, Xx.
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Title:
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Vice
President and General Counsel
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IN
WITNESS WHEREOF, the parties hereto have caused this contract to be executed
on
their behalf by their duly authorized representatives, all as of the day and
the
year fist herein written.
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VERMONT
TRANSCO LLC
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By:
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/s/Xxxx
X. Xxxxxxxx
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Name:
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Xxxx
X. Xxxxxxxx
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Title:
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President
& CEO of VELCO,
The
Manager of Vermont Transco LLC
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