EXHIBIT 10.103
MODIFICATION NO. 11
TO
INTER-COMPANY POWER AGREEMENT
DATED JULY 10, 1953
AMONG
OHIO VALLEY ELECTRIC CORPORATION,
APPALACHIAN POWER COMPANY (formerly
APPALACHIAN ELECTRIC POWER COMPANY),
THE CINCINNATI GAS & ELECTRIC COMPANY,
COLUMBUS SOUTHERN POWER COMPANY (formerly
COLUMBUS AND SOUTHERN OHIO ELECTRIC COMPANY),
THE DAYTON POWER AND LIGHT COMPANY,
INDIANA MICHIGAN POWER COMPANY (formerly
INDIANA & MICHIGAN ELECTRIC COMPANY),
KENTUCKY UTILITIES COMPANY,
LOUISVILLE GAS AND ELECTRIC COMPANY
MONONGAHELA POWER COMPANY,
OHIO EDISON COMPANY,
OHIO POWER COMPANY (formerly THE OHIO
POWER COMPANY), PENNSYLVANIA POWER COMPANY, THE
POTOMAC EDISON COMPANY, SOUTHERN INDIANA GAS AND
ELECTRIC COMPANY, THE TOLEDO EDISON COMPANY, and WEST
PENN POWER COMPANY.
Dated as of April 1, 1999
MODIFICATION NO. 11
TO
INTER-COMPANY POWER AGREEMENT
THIS AGREEMENT dated as of the 1st day of April, 1999, by and among
OHIO VALLEY ELECTRIC CORPORATION (herein called "OVEC" or "Corporation"),
APPALACHIAN POWER COMPANY, THE CINCINNATI GAS & ELECTRIC COMPANY, COLUMBUS
SOUTHERN POWER COMPANY (formerly COLUMBUS AND SOUTHERN OHIO ELECTRIC COMPANY),
THE DAYTON POWER AND LIGHT COMPANY, INDIANA MICHIGAN POWER COMPANY (formerly
INDIANA & MICHIGAN ELECTRIC COMPANY), KENTUCKY UTILITIES COMPANY, LOUISVILLE GAS
AND ELECTRIC COMPANY, MONONGAHELA POWER COMPANY, OHIO EDISON COMPANY, OHIO POWER
COMPANY, PENNSYLVANIA POWER COMPANY, THE POTOMAC EDISON COMPANY, SOUTHERN
INDIANA GAS AND ELECTRIC COMPANY, THE TOLEDO EDISON COMPANY, and WEST PENN POWER
COMPANY, all of the foregoing, other than OVEC, being herein sometimes
collectively referred to as the Sponsoring Companies and individually as a
Sponsoring Company.
WITNESSETH THAT
WHEREAS, Corporation and the United States of America have
heretofore entered into Contract No. AT-(40-1)-1530 (redesignated Contract No.
E-(40-1)-1530, later redesignated Contract No. EY-76-C-05-1530 and later
redesignated Contract No. DE-AC05-76OR01530), dated October 15, 1952, providing
for the supply by Corporation of electric utility services to the United States
Atomic Energy Commission (hereinafter called "AEC") at AEC's project near
Portsmouth, Ohio (hereinafter called the "Project"), which Contract has
heretofore been modified by Modification No. 1, dated July 23, 1953,
Modification No. 2, dated as of March 15, 1964, Modification No. 3, dated as of
May 12, 1966, Modification No. 4, dated as of January 7, 1967, Modification No.
5, dated as of August 15, 1967, Modification No. 6, dated as of November 15,
1967, Modification No. 7, dated as of November 5, 1975, Modification No. 8,
dated as of June 23, 1977, Modification No. 9, dated as of July 1, 1978,
Modification No. 10, dated as of August 1, 1979, Modification No. 11, dated as
of September 1, 1979, Modification No. 12, dated as of August 1, 1981,
Modification No. 13, dated as of September 1, 1989, Modification No. 14, dated
as of January 15, 1992, Modification No. 15, dated as of February 1, 1993, and
Modification No. 16, dated as of January 1, 1998 (said Contract, as so modified,
is hereinafter called the "DOE Power Agreement"); and
WHEREAS, pursuant to the Energy Reorganization Act of 1974,
the AEC was abolished on January 19, 1975 and certain of its functions,
including the procurement of electric utility services for the Project, were
transferred to and vested in the Administrator of Energy Research and
Development; and
WHEREAS, pursuant to the Department of Energy Organization
Act, on October 1, 1977, all of the functions vested by law in the Administrator
of Energy Research and Development or the Energy Research and Development
Administration were transferred to, and vested in, the Secretary of Energy, the
statutory head of the Department of Energy (hereinafter called "DOE"); and
WHEREAS, the parties hereto have entered into a contract,
herein called the "Inter-Company Power Agreement," dated July 10, 1953,
governing, among other things, (a) the supply by the Sponsoring Companies of
Supplemental Power in order to enable Corporation to fulfill its obligations
under the DOE Power Agreement, and (b) the rights of the Sponsoring Companies to
receive Surplus Power (as defined in the Agreement identified in the next clause
in this preamble) as may be available at the Project Generating Stations and the
obligations of the Sponsoring Companies to pay therefor; and
WHEREAS, the Inter-Company Power Agreement has heretofore been
amended by Modification No. 1, dated as of June 3, 1966, Modification No. 2
dated as of January 7, 1967, Modification No. 3, dated as of November 15, 1967,
Modification No. 4, dated as of November 5, 1975, Modification No. 5, dated as
of September 1, 1979, Modification No. 6, dated as of August 1, 1981,
Modification No. 7, dated as of January 15, 1992, Modification No. 8, dated as
of January 19, 1994, Modification No. 9, dated as of August 17, 1995, and
Modification No. 10, dated as of January 1, 1998 (said contract so amended and
as modified and amended by this Modification No. 11 being herein and therein
sometimes called the "Agreement"); and
WHEREAS, it is the goal of OVEC to assist its Sponsoring
Companies during the summer of 1999 by making available to them additional
surplus power; and
WHEREAS, additional surplus power would be made available as a
result of reductions by DOE of its contractual entitlement to power from OVEC;
and
WHEREAS, it is the goal of DOE to obtain reasonably priced
power for its Paducah uranium enrichment plant during the summer of 1999; and
WHEREAS, because there is no certainty that transmission to
transfer OVEC power to Paducah will be available on an uninterrupted basis
during the summer of 1999, it is desired that DOE have the option to release a
portion of its contractual entitlement to OVEC power and energy in exchange for
a credit to DOE's power xxxx, thereby making available funds which could be used
to purchase power at locations closer to the Paducah uranium enrichment plant;
and
WHEREAS, OVEC and the Sponsoring Companies desire to enter
into this Modification No. 11 as more particularly hereinafter provided;
NOW, THEREFORE, the parties hereto agree with each other as
follows:
1. Insert after SUBSECTION 1.0123 new SUBSECTIONS
1.0124, 1.0125 and 1.0126 as follows:
1.0124 "DOE Optional Power Release
Period" means any calendar month from June 1 through
September 30, 1999.
1.0125 "DOE Optional Power Release" means a
reduction of the otherwise applicable DOE contract demand
pursuant to this Section 1.0125, for any calendar month during
the DOE Optional Power Release Period.
1.0126 "Effective Date" means the date on
which Corporation notifies DOE and the Sponsoring Companies
that all conditions to effectiveness, including all required
waiting periods and all required regulatory acceptances or
approvals, of the arrangements for DOE Optional Power Releases
and reimbursement of Corporation for costs associated with
such releases, have been satisfied. Such date shall be not
later than two business days after all conditions to
effectiveness have been satisfied.
2. Delete SUBSECTION 6.01 and substitute therefor the
following:
CHARGES FOR SURPLUS POWER, ECAR EMERGENCY ENERGY AND DOE
OPTIONAL POWER RELEASES
6.01 TOTAL MONTHLY CHARGE. The amount to be
paid Corporation each month by the Sponsoring Companies for
Surplus Power and Surplus Energy supplied under this Agreement
shall consist of the sum of an energy charge, a demand charge
and, if applicable, an emergency power surcharge and/or a DOE
Optional Power Release Surcharge, all determined as set forth
in this Article 6. The amount to be paid to Corporation for
ECAR Emergency Energy supply under this Agreement shall be
98.74 xxxxx per kilowatt hour (plus transmission charges
calculated in accordance with applicable law).
3. Insert after SUBSECTION 6.037 new SUBSECTION 6.038 as
follows:
6.038 If DOE notifies OVEC that DOE wishes
to exercise its right under a Letter Supplement dated March
31, 1999 to the DOE Power Agreement to reduce its contract
demand during a DOE Optional Power Release Period and thereby
to make additional surplus power and energy available to the
Sponsoring Companies, the aggregate demand charge otherwise
payable by each Sponsoring Company for such surplus power
shall be adjusted to reflect its agreed share of a DOE
Optional Power Release Surcharge, such DOE Optional Power
Release Surcharge to be equal to the amount of the power
released under such Letter Supplement for each month times 80%
of the NYMEX monthly "Into Cinergy," firm futures price
on-peak (5 x 16) for such month determined as of market
closing on March 5, 1999 times the number of on-peak hours
during such month, minus (a) the demand charges which DOE
avoids by reason of such monthly reduction in contract demand
and (b) OVEC charges for energy in amounts
equal to the reductions in demand times the number of on-peak
hours during such month times OVEC's energy rate per MWH. The
above-referenced March 5, 1999 NYMEX closing prices were
$59.25/MWH for June 1999; $120/MWH for July 1999; $113/MWH for
August 1999 and $36.50/MWH for September 1999.
4. Delete SUBSECTIONS 9.01 and 9.02 and substitute
therefor the following:
9.01 REPLACEMENT COSTS. The Sponsoring
Companies shall reimburse Corporation for the difference
between (a) the total cost of replacements chargeable to
property and plant (other than facilities described in SECTION
2.02) made by Corporation during any month prior thereto (and
not previously reimbursed) and (b) the amounts received by
Corporation from DOE as reimbursement for the cost of
replacements under the provisions of the DOE Power Agreement,
or paid for out of proceeds of fire or other applicable
insurance protection, or out of amounts recovered from third
parties responsible for damages requiring replacement. If
Corporation is unable to secure a satisfactory ruling to the
effect that amounts paid by the Sponsoring Companies in
reimbursement of replacement costs do not constitute taxable
income to Corporation, or in case such ruling once obtained
shall be reversed or rescinded, then the Sponsoring Companies
shall pay to Corporation such amount, in lieu of the amounts
to be paid as above provided, which, after provision for all
taxes on income shall equal the costs of the replacements
reimbursable by the Sponsoring Companies to Corporation as
above provided. Each Sponsoring Company's share of such
payment shall be the percentage of such difference represented
by its Power Participation Ratio, unless DOE has been relieved
of its obligation to pay a portion of the cost of replacements
as a condition of a DOE request for a waiver (under Section
2.05 of the DOE Power Agreement) which has the effect of
reducing the DOE contract demand, in which case each
Sponsoring Company's share of such payment will be adjusted so
that it equals such Sponsoring Company's reservation of
surplus power made available by the aforementioned reduction
in the DOE contract demand. The term cost of replacements, as
used herein, shall include all components of cost, plus
removal expense, less salvage.
9.02 ADDITIONAL FACILITY COSTS. The
Sponsoring Companies shall reimburse Corporation for the
difference between (a) the total cost of additional facilities
and/or spare parts (other than facilities described in SECTION
2.02) purchased and/or installed by Corporation during any
month prior thereto (and not previously reimbursed) and (b)
the amounts received by Corporation from
DOE as reimbursement for the cost of additional facilities
and/or spare parts under the provisions of the DOE Power
Agreement. If Corporation is unable to secure a satisfactory
ruling to the effect that amounts paid by the Sponsoring
Companies in reimbursement of additional facility and/or spare
part costs do not constitute taxable income to Corporation, or
in case such ruling once obtained shall be reversed or
rescinded, then the Sponsoring Companies shall pay to
Corporation such amount, in lieu of the amounts to be paid as
above provided, which, after provision for all taxes on
income, shall equal the costs of the additional facilities
and/or spare parts reimbursable by the Sponsoring Companies to
Corporation as above provided. Each Sponsoring Company's share
of such payment shall be the percentage of such difference
represented by its Power Participation Ratio, unless DOE has
been relieved of its obligation to pay a portion of the cost
of additional facilities as a condition of a DOE request for a
waiver (under Section 2.05 of the DOE Power Agreement) which
has the effect of reducing the DOE contract demand, in which
case each Sponsoring Company's share of such payment will be
adjusted so that it equals such Sponsoring Company's
reservation of surplus power made available by the
aforementioned reduction in the DOE contract demand.
5. Insert after SUBSECTION 10.07 new SUBSECTION 10.08 as
follows:
10.08 DOE OPTIONAL POWER RELEASE SURCHARGE.
As soon as practicable after the end of each month,
Corporation shall render to each Sponsoring Company a
statement indicating the DOE Optional Power Release Surcharge
for the account of such Sponsoring Company during such month,
specifying the amount due to the Corporation therefor pursuant
to ARTICLE 6 above. Such Sponsoring Company shall make payment
therefor promptly upon the receipt of such statement. In case
the computation of the amount due cannot be determined at the
time, it shall be estimated subject to adjustment when the
actual determination can be made, and all payments shall be
subject to subsequent adjustment.
5. This Modification No. 11 shall become effective at
12:00 o'clock Midnight on the Effective Date.
6. The Inter-Company Power Agreement, as modified by
Modifications Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10 and as hereinbefore
provided, is hereby in all respects confirmed.
7. This Modification No. 11 may be executed in any
number of copies and by the different parties hereto on separate counterparts,
each of which shall be deemed an original but all of which together shall
constitute a single agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Modification No. 11 as of the day and year first written above.
OHIO VALLEY ELECTRIC CORPORATION
By: s/ XXXXX X. XXXX
---------------------------------------
APPALACHIAN POWER COMPANY
By: s/ XXXXX XXXXX
---------------------------------------
THE CINCINNATI GAS & ELECTRIC COMPANY
By: s/ XXXX X. XXXXXXXX
---------------------------------------
COLUMBUS SOUTHERN POWER COMPANY
By: s/ XXXXX XXXXX
---------------------------------------
THE DAYTON POWER AND LIGHT COMPANY
By: s/ XXXXXXX X. X'XXXXXXXX
---------------------------------------
INDIANA MICHIGAN POWER COMPANY
By: s/ XXXXX XXXXX
---------------------------------------
KENTUCKY UTILITIES COMPANY
By: s/ XXXXX X. XXXXX
---------------------------------------
LOUISVILLE GAS AND ELECTRIC COMPANY
By: s/ XXXXX X. XXXXX FOR X. XXXXXXX
---------------------------------------
MONONGAHELA POWER COMPANY
By: s/ XXXXX X. XXXXXX
---------------------------------------
OHIO EDISON COMPANY
By: s/ X. X. XXXXXXX
---------------------------------------
OHIO POWER COMPANY
By: s/ XXXXX XXXXX
---------------------------------------
PENNSYLVANIA POWER COMPANY
By: s/ XXXXXX X. XXXXXXXX
---------------------------------------
THE POTOMAC EDISON COMPANY
By: s/ XXXXX X. XXXXXX
---------------------------------------
SOUTHERN INDIANA GAS AND ELECTRIC
COMPANY
By: s/ X. X. XXXXX
---------------------------------------
THE TOLEDO EDISON COMPANY
By: s/ XXX X. XXXXXXXX
---------------------------------------
WEST PENN POWER COMPANY
By: s/ XXXXX X. XXXXXX
