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EXHIBIT 10.9
ELECTRIC ENERGY, INC.
Modification No.13
MODIFICATION NO. 13
THIS MODIFICATION NO. 13, entered into this 18th day of January, 1989,
by and between ELECTRIC ENERGY, INC., (referred to as "Company"), a corporation
organized under the laws of the State of Illinois, and the UNITED STATES OF
AMERICA (referred to as "Government"), acting by and through the SECRETARY
(referred to as "Secretary") of the DEPARTMENT OF ENERGY (referred to as "DOE");
WITNESSETH THAT:
WHEREAS, Company and Government have heretofore entered into Contract
No. DE-AC05-760R01312 (referred to as the "Agreement"), for the supply by
Company of electric power then required by DOE at its Paducah Project (referred
to as the "Project") near Paducah, Kentucky; and
WHEREAS, the Agreement has previously been amended by Modifications
Nos. 1 through 12, and by various unnumbered letter agreements and unilateral
notices; and
WHEREAS, Company and Government desire to amend the Agreement further;
and
WHEREAS, this Modification No. 13 is authorized by and entered into
under the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act
of 1974 (P.L. 93- 438); the Department of Energy Organization Act (P.L. 95- 91);
and other applicable law;
NOW, THEREFORE, in consideration of the premises and provisions of the
Agreement, as heretofore amended and as it is amended hereby, and in
consideration of the mutual agreements and undertakings of the parties, the
parties agree that the terms and provisions of the Articles and Sections of the
Agreement, as heretofore amended, shall be and are hereby amended by this
Modification No. 13 as follows:
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1. SECTION 2.08, Firm Additional Power, is modified in its entirety
as follows:
"SECTION 2.08, Firm Additional Power. Beginning on the effective
date of this modification, Company shall be obligated to supply, and DOE
shall be obligated to purchase, amounts of power necessary to meet DOE's
'Minimum Power Requirement' at the Project. DOE's Minimum Power
Requirement shall be defined as 450 MW during the months of March
through October and 550 MW during the months of November through
February. Such power shall be referred to as 'Firm Additional Power,'
and shall be defined as firm power, other than power generated at Joppa
Plant, which is purchased by Company from the Sponsoring Companies for
the purpose of supplying DOE's Minimum Power Requirement. In the event
that such power must be curtailed by the supplying Sponsoring Company,
such curtailment shall be made, in order of priority, only after all
non-firm coordination sales and interruptible native load sales have
been curtailed. However, such curtailment will be made, in the judgment
of the supplying Sponsoring Company, if necessary to preclude the need
to curtail non- interruptible native load or non-interruptible
coordination sales. (Native load is defined as the power needed to
supply retail customers and requirements wholesale customers.)
"Either party shall have the right to cancel its obligation to
supply or take Firm Additional Power, in whole or in part, by providing
a written notice of cancellation to the other party three years prior to
the effective date of cancellation.
"DOE shall pay Company for Firm Additional Power at a rate equal
to Company's cost to purchase such power, plus up to one additional
dollar per megawatthour. However, Company shall contract for Firm
Additional Power in a manner which, in Company's best judgment and
consistent with Company's interconnection agreements and operating
practices, will provide DOE with Firm Additional Power at the lowest
practical cost.
"The need for certain amounts of Firm Additional Power can be
foreseen and scheduled prior to
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delivery. On October 1 of every year, beginning with the effective date
of this modification, Company shall provide DOE with a proposed schedule
and pricing options of such amounts of Firm Additional Power for the
immediately following calendar year. The pricing options shall include
at a minimum:
"(a) Power price quotes which shall incorporate both
demand and energy cost components, and shall be expressed in
terms of dollars per megawatthour. These quotes shall be
guaranteed prices for the next calendar year and shall be
determined by competitive bidding among the utility systems with
agreements to supply firm power to Company. If DOE selects this
pricing option, it shall be obligated to purchase all of the
energy which is covered by this option from Company.
"(b) Capacity price quotes, with energy to be priced
separately and based on the actual incremental costs of the
supplying utility systems at the time of delivery. If DOE selects
this option, it shall pay the capacity cost calculated over the
full period which is covered by this option. Company shall
schedule the energy associated with this capacity from the most
economical supplier. In addition, upon reasonable notice, DOE may
schedule energy in lieu of energy associated with Firm Additional
Power from sources other than Company.
"DOE shall notify Company of its pricing option selection
by November 1 of the year immediately prior to the calendar year
in which the price is to apply.
"The aggregate of the scheduled megawatthours of Firm
Additional Power for all hours of a month shall be deemed to be
the delivered megawatthours of Firm Additional Power for the
month, and shall be called the 'Billing MWh of Firm Additional
Power.' The difference between the cost
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of Firm Additional Power to DOE and the cost of such power to
Company shall not be included in the Component D Calculation
specified in Section 3.01, and the income taxes on such
difference shall not be included in Component C of Section 3.01."
2. The following paragraph (c) is added to Section 3.05 of the
contract:
"(c) If DOE's average annual purchases (averaged for all years
beginning with the in-service date of the modified transmission
facilities to be described in Appendix 'E') of Additional Power from
Company equal or exceed 6,000,000 MWh, then DOE shall pay for the costs
of additional transmission facilities described in Appendix 'E' in
accordance with the provisions of Section 3.11. If DOE's average annual
purchases of Additional Power exceed 4,200,000 MWh but are less than
6,000,000 MWh, then DOE shall pay for a percentage of the cost of the
facilities to be described in Appendix 'E,' determined by the following
formula:
% = 100 - 25 x Excess MWh
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1,800,000
Where Excess MWh equals the average annual MWhs of Additional Power
purchased by DOE from Company in excess of 4,200,000 MWh. Adjustments
will be applied to current and previous years' Annual Adjustment of DOE
Charges."
3. The following SECTION 3.11 is incorporated into the Agreement:
"SECTION 3.11. Additional Transmission Facilities - Joppa Plant.
In order for Company to supply Additional Power in amounts projected to
be needed by DOE, Company will require additional transmission
facilities. DOE and Company will mutually determine the transmission
additions or modifications necessary to establish an adequate
transmission path, and such modifications shall be described in an
Appendix 'E,' which shall be completed and made a part of this Agreement
before such modifications, subject to regulatory approval. Cost
alloca-
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tion of these facilities shall be in accordance with the following:
"(a) DOE shall provide a minimum of 75 percent of the cost
support for the facilities;
"(b) The costs applicable to the transmission facility
modifications shall be included under Section 3.01 of this
Agreement and shall be charged to DOE in accordance with Article
III of this contract provided that the Annual DOE Percentage of
Joppa Plant is not less than 75 percent, as stated in Section
2.03 of this contract. If this percentage is less than 75
percent, DOE and Company agree that DOE shall continue to provide
75 percent of the cost support for the modified transmission
facilities to be described in Appendix 'E';
"(c) If DOE cancels the contract pursuant to Section 6.02,
DOE shall pay Company 100 percent of any unamortized costs of the
modified transmission facilities."
IN WITNESS WHEREOF, the parties hereto have executed this Modification
No. 13 as of the day and year first above written.
UNITED STATES OF AMERICA
BY: SECRETARY OF ENERGY
BY:
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(Contracting Officer)
ELECTRIC ENERGY, INC.
BY:
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TITLE: President
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MODIFICATION NO. 14
THIS MODIFICATION NO. 14, entered into this 6th day of March, 1991, by
and between ELECTRIC ENERGY, INC., (referred to as "Company"), a corporation
organized under the laws of the State of Illinois, and the UNITED STATES OF
AMERICA (referred to as "Government"), acting by and through the SECRETARY
(referred to as "Secretary") of the DEPARTMENT OF ENERGY (referred to as "DOE");
WITNESSETH THAT:
WHEREAS, Company and Government have heretofore entered into Contract
No. DE-AC05-760R01312 (referred to as the "Agreement"), for the supply by
Company of electric power then required by DOE at its Paducah Project (referred
to as the "Project") near Paducah, Kentucky; and
WHEREAS, the Agreement has previously been amended by Modifications Nos.
1 through 13, and by various unnumbered letter agreements and unilateral
notices; and
WHEREAS, DOE desires to purchase increased amounts of power and energy
through the use of Company's transmission ties to the Sponsoring Companies; and
WHEREAS, the Sponsoring Companies have agreed to make certain
transmission modifications to increase transmission tie capability to Company;
and
WHEREAS, Company has expended approximately $1,900,000 including
Allowance for Funds Used During Construction, at DOE's request in accordance
with Section 3.11, for engineering and design of additional transmission
facilities commonly known as Plan AA; and
WHEREAS, Company and DOE have agreed to make certain billing changes to
the Agreement;
WHEREAS, this Modification 14 is authorized by and entered into under
the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974
(P.L. 93-
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438); the Department of Energy Organization Act (P.L. 95- 91); and other
applicable law;
NOW, THEREFORE, in consideration of the premises and provisions of the
Agreement, as heretofore amended and as it is amended hereby, and in
consideration of the mutual agreements and undertakings of the parties, the
parties agree that the terms and provisions of the Articles and Sections of the
Agreement, as heretofore amended, shall be and are hereby amended by this
Modification No. 14 as follows:
1. SECTION 3.03. Base Rate - Excess Joppa Energy, is modified in its
entirety as follows:
SECTION 3.03. Base Rate - Excess Joppa Energy. The base rate for
Excess Joppa Energy shall consist of a base monthly energy charge to be
computed by multiplying Company's Fuel costs per megawatthour for the
immediately preceding month by the Billing MWh of Excess Joppa Energy
taken by DOE during the month by a factor not to exceed 110 percent. The
difference between the cost to generate Excess Joppa Energy and the cost
to DOE of Excess Joppa Energy shall not be included in the Component D
calculation specified in Section 3.01, and the income taxes on such
difference shall not be included in Component C of Section 3.01.
2. The following SECTION 3.12. Transmission Improvements and Studies, is
incorporated into the Agreement after Section 3.11.
SECTION 3.12. Transmission Improvements and Studies. Company will
contract with the Sponsoring Companies to make the transmission
modifications outlined in Attachment A to this modification. Company's
actual costs associated with the installation of facilities outlined in
such Attachment A (including applicable overhead costs and all amounts
charged to Company by the Sponsoring Companies) shall be included as
Joppa Plant Costs in accordance with Section 3.01 of the Agreement. Such
costs shall be charged to DOE in accordance with Article III of the
Agreement, provided that the Annual DOE Percentage of Joppa Plant is not
less than 75 percent, as stated in Section 2.03 of the Agreement,
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and provided that DOE purchases a minimum of 4,400,000 MWh of Additional
Power annually. However,
(a) If the Annual DOE Percentage of Joppa Plant is less than 75
percent, DOE shall continue to pay a minimum of 75 percent of the
annual support for such costs, or
(b) If DOE's annual purchases of Additional Power is less than
4,400,000 MWh, then regardless of DOE's Annual Percentage of
Joppa Plant, DOE shall pay 100 percent of the annual
support for such costs.
If DOE cancels the Agreement pursuant to Section 6.02, DOE shall pay
Company 100 percent of any unamortized portions of such costs.
Company's costs associated with the engineering and design of additional
transmission facilities not included in the outline of facilities in
Attachment A to this modification, and which have been, or may be,
accumulated under company Work Order No.2106, shall be allocated 100
percent to DOE. If, in the future, transmission facilities are
constructed that utilize the engineering and design work accumulated
against such work order, DOE shall receive a credit toward the amount
paid to the extent such engineering and design work is applicable and
usable.
3. SECTION 4.01. Submittal of Bills for Power, is modified in its entirety
as follows:
SECTION 4.01. Submittal of Bills for Power. Company shall submit
to DOE within the first ten days of each month a xxxx for the base
monthly demand charge for power for the immediately preceding month and
the base monthly energy charges for all energy delivered by Company to
DOE during such preceding month, as specified in Sections 3.02 and 3.03.
Company shall also submit to DOE within the first ten days of each month
a xxxx for power and energy supplied under Sections 2.07 through 2.10.
All bills shall be promptly paid by DOE.
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Company shall also submit to DOE as early as practicable in each month a
xxxx or bills or credit memoranda for any amounts due Company or DOE,
for the immediately preceding month, resulting from any of the
adjustments, reimbursements, or credits provided for in Sections 3.04
through 3.08, inclusive, and Section 3.10; provided, however, that
Company may render such bills or credit memoranda for any or all of such
adjustments on a quarterly basis, or such other basis as may be mutually
acceptable, and may include therein the adjustments, reimbursements, or
credits for any item not included in a previous xxxx or credit
memorandum. Each such xxxx or credit memorandum shall include such
detail as DOE may reasonably request to show the operation and effect of
such adjustments, reimbursements, or credits.
The effectiveness of the understandings contained in this Modification
No. 14 are conditioned upon (1) the securing by Company of appropriate
regulatory approvals, authorizations or acceptances, and (2) the delivery by DOE
of the legal opinion of the Chief Counsel, DOE Oak Ridge Operations Office,
stating that DOE has full power and authority to execute this Modification Xx.
00 xxx xxxxxxxx xxx Xxxxxx Xxxxxx xx Xxxxxxx to the understandings contained
herein. The Company shall notify DOE in writing when the aforementioned
approvals, authorizations or acceptances have been obtained.
IN WITNESS WHEREOF, the parties hereto have executed this Modification
No. 14 as of the day and year first above written.
UNITED STATES OF AMERICA
BY: ___________________________________
ELECTRIC ENERGY, INC.
BY: __________________________________
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MODIFICATION NO. 15
THIS MODIFICATION NO. 15, entered into this 1st day of October, 1992, by
and between ELECTRIC ENERGY, INC., (referred to as "Company"), a corporation
organized under the laws of the State of Illinois, and the UNITED STATES OF
AMERICA (referred to as "Government"), acting by and through the SECRETARY
(referred to as "Secretary") of the DEPARTMENT OF ENERGY (referred to as "DOE");
WITNESSETH THAT:
WHEREAS, Company and Government have heretofore entered into Contract
No. DE-AC05-760R01312 (referred to as the "Agreement"), for the supply by
Company of electric power required by DOE at its Paducah Project (referred to as
the "Project") near Paducah, Kentucky; and
WHEREAS, the Agreement has previously been amended by Modifications Nos.
1 through 14, and by various unnumbered letter agreements and unilateral
notices; and
WHEREAS, this Modification No. 15 is authorized by and entered into
under the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act
of 1974 (P.L. 93-438); the Department of Energy Organization Act (P.L. 95-91);
and other applicable law;
NOW, THEREFORE, in consideration of the premises and provisions of the
Agreement, and heretofore amended and as it is amended hereby, and in
consideration of the mutual agreements and undertakings of the parties, the
parties agree that the terms and provisions of the Articles and Sections of the
Agreement, as heretofore amended, shall be and are hereby amended by this
Modification No. 15 as follows:
1. The demand charge component set forth in paragraph (a), item (ii), of
Section 3.02, Base Rate - Permanent Joppa Power, shall be modified in its
entirety as follows:
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(ii) $1.53 per megawatthour, multiplied by 1000 MW (capability of
Joppa Plant), multiplied by the number of hours of the month,
multiplied by the Annual DOE Percentage of Joppa Plant
(determined in accordance with Section 2.03), multiplied by the
ratio of, the Joppa Plant Availability Factor for the month (as
determined in accordance with Appendix "C" to this Agreement) to
0.925. This portion of the demand charge shall not be included in
the "Component D" calculation specified in Section 3.01, and the
income taxes in this charge shall not be included in "Component
C" of Section 3.01. Furthermore, this portion of the demand
charge shall be subject to periodic adjustment, upon mutual
agreement of Company and DOE, and after an initial period of
three years from date of execution of this Letter Supplement, to
account for such indeterminable factors as prevailing conditions
in the bulk power market.
2. Section 3.03. Base Rate - Excess Joppa Energy is modified in its
entirety as follows:
Section 3.03. Base Rate - Excess Joppa Energy. The base rate for
Excess Joppa Energy shall consist of a base monthly energy charge
to be computed by multiplying Company's Fuel costs per
megawatthour for the immediately preceding month by the Billing
MWh of Excess Joppa Energy taken by DOE during the month plus a
factor not to exceeds $1.53 multiplied by the Billing MWh of
Excess Joppa Energy taken by DOE during the month. The resultant
factor not exceeding $1.53 multiplied by the Billing MWh of
Excess Joppa Energy taken by DOE during the month shall not be
included in the Component D calculation specified in Section
3.01, and the income taxes on this amount shall not be included
in Component C of Section 3.01.
3. Section 3.04. Monthly Adjustment of DOE Charges paragraph (c) is
modified in its entirety as follows:
(c) The base monthly energy charge for Excess Joppa Energy
specified in Section 3.03 shall be adjusted to equal Company's
actual Fuel costs
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for the month multiplied by the ratio of the Billing MWh of
Excess Joppa Energy to the billing MWh of all Joppa energy
delivered during the month to DOE and other Company customers
plus a factor not to exceed $1.53 multiplied by the Billing MWh
of Excess Joppa Energy taken by DOE during the month.
The effectiveness of the understandings contained in this Modification
No. 15 are conditioned upon (1) the securing by Company of appropriate
regulatory approvals, authorizations or acceptances, and (2) the delivery of DOE
of the legal opinion of the Chief Counsel, DOE Oak Ridge Field Office, stating
that DOE has full power and authority to execute this Modification Xx. 00 xxx
xxxxxxxx xxx Xxxxxx Xxxxxx xx Xxxxxxx to the understandings contained herein.
The Company shall notify DOE in writing when the aforementioned approvals,
authorizations or acceptances have been obtained.
IN WITNESS WHEREOF, the parties hereto have executed this Modification
No. 15 as of the day and year first above written.
UNITED STATES OF AMERICA
BY: /s/
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Contracting Officer
ELECTRIC ENERGY, INC.
BY: /s/
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