Exhibit B-11
DATE:
SERVICE AGREEMENT
BETWEEN
ALLEGHENY ENERGY SERVICE CORPORATION
AND
_____________________________________________________
THIS SERVICE AGREEMENT, between Allegheny Energy
Service Corporation, a corporation formed under the laws of
the State of Maryland, (the "Service Company" or "AESC") and
___________________________________, a corporation formed
under the laws of the State of _________________ (the
"Company").
WITNESSETH:
WHEREAS, the Service Company was created to
perform certain management duties on behalf of Allegheny
Energy, Inc. (the "System"), its utility subsidiary
companies and its non-utility subsidiary companies (the
"Subsidiaries"); and
WHEREAS, the Service Company offers to provide a
central organization to furnish to the System, the
Subsidiaries and the Company certain advisory, supervisory
and other services in accordance with current practices and
procedures; and
WHEREAS, the Company wishes to accept the offer
proposed by the Service Company as of the date set forth
above;
NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein contained, and for other
good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto, intending to be
reasonably bound, hereby agree as follows:
1. The Service Company hereby offers to furnish to the
Company the services detailed on Exhibit I attached hereto
and made a part hereof.
2. For all services rendered for the Company by the
Service Company, the Company agrees to pay the cost thereof.
For services rendered to one or more Subsidiaries and/or the
System and/or the Company, the allocation will be based on
the average of the prior three years' direct costs charged
by the Service Company to each Subsidiary and the Company.
Until a three-year history for the Company is developed, the
Company's costs will be deemed to be the same as the average
of the System's prior three years' direct costs, thereby
reducing each Subsidiary's share proportionately. Once a
three year history of the Company is available, AESC will
calculate an allocation percentage for the Company. If the
difference between that allocation percentage and the one
used for any of the Company's first three years is material,
then AESC will recalculate all allocation percentages for
those years in which the difference was material and the
Company, the Subsidiaries or the System will each either pay
an additional amount or receive a full refund of a
particular amount for that year.
3. The payment for services rendered by the Service
Company to the System, the Subsidiaries and the Company
shall cover all the costs and expenses of its doing
business, excluding only a return for the use of equity
capital, and each Subsidiary, the System and the Company
shall pay its direct or fair proportionate share.
4. Payment shall be made by the Company to the Service
Company on a monthly basis on or before the 20th day of the
succeeding month, upon receipt of a statement showing the
amount due. Certain charges billed by the Service Company
to the Company may not be due immediately and will be so
indicated on the statement of billing. Monthly charges may
be made on an estimated basis, but adjustments will be made
at the end of each calendar year so that all charges for the
calendar year will be in accordance with the foregoing.
5. Nothing herein shall be construed to release the
officers and directors of the Company from the performance
of their respective duties or limit the exercise of their
powers as prescribed by law or otherwise.
6. This Service Agreement shall continue in full force and
effect from year to year but may be terminated by either
party upon 60 days' prior notice, and the Company may
terminate such contract at any time with or without notice
for any cause deemed by it to be sufficient.
7. The Service Agreement will be subject to termination or
modification at any time to the extent its performance may
conflict with the provisions of the Public Utility Holding
Company Act of 1935, as amended, or with any rule,
regulation or order of the Securities and Exchange
Commission adopted before or after the making of this
Service Agreement and shall be subject to the approval of
any state commission or other regulatory body whose approval
is a legal prerequisite to its execution and delivery or
performance.
If the Company desires to accept this offer,
please cause it to be executed in the space provided below
by your duly authorized officers.
Very truly yours,
ALLEGHENY ENERGY SERVICE CORPORATION
By___________________________________________
President
Attest:
___________________________________
Secretary
Pursuant to authorization of the Board of Directors of this
Company, we hereby accept the above offer to be effective as
of the date set forth above.
___________________________
By__________________________________________
President
Attest:
___________________________________
Secretary
Exhibit I
Allegheny Energy Service Corporation Principal Functions
In accordance with the terms and conditions of the
Service Agreement dated as of ____________________________,
____, the Service Company shall perform for the Company the
following services:
1. Provide technical support as needed to evaluate,
implement, and develop opportunities related to the System's
electric business (including, but not limited to, any
engineering, construction, management and/or operating
activities associated with the development of bulk power
supply opportunities).
2. Planning and implementation of financial programs to
raise the funds required for the Company, including handling
arrangements for bank borrowings and sales of securities and
relationships with investors and analysts.
3. Counsel on corporate, legal and regulatory matters and
on contractual relationships.
4. Provide general and administrative services including,
but not limited to, the following:
a) Purchasing.
b) Customer billing and accounting.
c) Information services, including computer applications
and programming and electronic data processing.
d) Preparation of consolidated financial statements and
cost, statistical, and financial data, as required.
e) Assistance with respect to certain personnel matters,
including, but not limited to, employee benefit matters.
f) Preparation and filing of tax returns and following
developments in federal, state, and local taxation
regulations.
g) Administration of insurance.
h) Internal auditing.
i) Corporate security.
5. To the extent that the Company does not maintain its
own separate payroll, services will be provided by Service
Company employees as needed by the Company. These services
shall include but shall not be limited to any line work,
meter reading, customer service functions (including a
customer call center), planning, construction, operations,
and maintenance of facilities.
6. Certain other services in addition to the above as the
Service Company may be able to provide and/or the
Company may require or request.
