Exhibit 10.5
SOUTHERN COMPANY SYSTEM
INTERCOMPANY INTERCHANGE CONTRACT
ARTICLE I - RECITALS
Section 1.1: This contract is made and entered into this 17th day of
February, 2000, by and between Alabama Power Company, a corporation
organized and existing under the laws of the State of Alabama with its
principal office in Birmingham, Alabama; Georgia Power Company, a
corporation organized and existing under the laws of the State of
Georgia with its principal office in Atlanta, Georgia; Gulf Power
Company, a corporation organized and existing under the laws of the
State of Maine with its principal office in Pensacola, Florida;
Mississippi Power Company, a corporation organized and existing under
the laws of the State of Mississippi with its principal office in
Gulfport, Mississippi; Savannah Electric and Power Company, a
corporation organized and existing under the laws of the State of
Georgia with its principal office in Savannah, Georgia; and Southern
Power Company, a corporation organized and existing under the laws of
the State of Delaware with its principal office in Birmingham, Alabama,
all such companies being hereinafter collectively referred to as the
Southern Company Services, Inc. Original Sheet No. 2
First Revised Rate Schedule FERC No. 138
Issued by: Xxxxxxx X. XxXxxxx, Executive Vice-Pres. Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259
"OPERATING COMPANIES"; and Southern Company Services, Inc., a subsidiary
service company under the Public Utility Holding Company Act of 1935 ("AGENT" or
"SCSI").
WITNESSETH:
Section 1.2: WHEREAS, the common stock of the OPERATING COMPANIES is
owned by The Southern Company, a public utility holding company
organized and operating pursuant to the provisions of the Public
Utility Holding Company Act of 1935 ("the Act"); and
Section 1.3: WHEREAS, the OPERATING COMPANIES can be operated as
an integrated electric utility system pursuant to the standards of the
Act; and
Section 1.4: WHEREAS, the OPERATING COMPANIES have so operated their
respective electric facilities and conducted interconnected electric
operations pursuant to and in accordance with the provisions of
interchange contracts, the most recent of
Southern Company Services, Inc. Original Sheet No. 3
First Revised Rate Schedule FERC No. 138
Southern Company Services, Inc. Original Sheet No. 32
First Revised Rate Schedule FERC No. 138
which being The Southern Company System Intercompany Interchange
Contract dated October 31, 1988, as amended ("the 1989 Contract"); and
Section 1.5: WHEREAS, the OPERATING COMPANIES desire to replace the 1989
Contract with an amended and restated contract to incorporate in one
document the numerous amendments subsequently made thereto and also to
make further revisions to reflect appropriate modifications to the
current arrangement.
Section 1.6:WHEREAS, all of the Operating Companies (including New Power
Company) will share in all of the benefits and burdens of this IIC,
including complying with operating, dispatch and reserve requirements,
participating in opportunity sales transactions, and bearing
responsibility for their portion of purchases.
Section 1.7: NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements hereinafter stated, the OPERATING
COMPANIES agree and contract as follows:
ARTICLE II - TERM OF CONTRACT
Section 2.1: This contract will be referred to as the Southern Company
System Intercompany Interchange Contract ("IIC"). Except as provided in
Section 2.2, the IIC shall become effective on April 18, 2000, and shall
continue in effect from year to year thereafter subject to termination
as provided hereinafter. When this IIC has become effective, it shall
supersede and replace the 1989 Contract, and references to a section of
such superseded interchange contract in other agreements of the
OPERATING COMPANIES shall be taken to mean reference to the section of
substantially like import in this IIC.
Section 2.2: Section 3.5 of the Allocation Methodology and Periodic Rate
Computation Manual to the 1989 Contract contained a provision pertaining
to the treatment of Operation and Maintenance ("O&M") expenses for units
that were projected to operate at less than a ten percent (10%) annual
capacity factor ("Ten Percent Rule"). The Ten Percent Rule is eliminated
in Section 3.4 of this Manual, which change directly affects the
dispatch of system resources. In the event the Federal
Energy Regulatory Commission ("FERC") does not allow Section 3.4 of this
Manual to take effect without refund obligation, those provisions of
Section 3.5 of the Manual of the 1989 Contract setting forth the Ten
Percent Rule shall continue in effect until Section 3.4 of this Manual
is approved at the conclusion of the proceeding.
Section 2.3: This IIC may be terminated at any time by mutual agreement
of the OPERATING COMPANIES or may be terminated at any time by any
OPERATING COMPANY by its giving to each of the other OPERATING COMPANIES
and the AGENT written notice of its election to so terminate its
participation in this IIC at least five (5) years prior to the date of
termination. This IIC shall continue in full force and effect as to each
OPERATING COMPANY until terminated as hereinabove provided.
ARTICLE III - PRINCIPAL OBJECTIVES OF
INTERCOMPANY INTERCHANGE CONTRACT
Section 3.1: The purpose of this IIC is to provide the
contractual basis for the continued operation of the electric
facilities of the OPERATING COMPANIES in such
a manner as to achieve the maximum possible economies consistent with
the highest practicable reliability of service, with the reasonable
utilization of natural resources and effect on the environment, and to
provide a basis for equitably sharing among the OPERATING COMPANIES the
costs associated with the operation of facilities that are used for the
mutual benefit of all the OPERATING COMPANIES.
Section 3.2: It is recognized that reliability of service and economy of
operation require that the energy supply to the system be controlled
from a centralized dispatching office and that this will require
adequate communication facilities and the provision of economic dispatch
computer facilities and automatic controls of generation.
Section 3.3: It is recognized that the IIC provides for the retention of
lowest cost energy resources by each OPERATING COMPANY for its own
customers. Energy in excess of that necessary to meet each OPERATING
COMPANY's requirements is delivered to the Pool as Interchange Energy
and may include: (i) energy generated from fossil fired generating
plants and combustion turbines; and (ii) purchased energy.
Section 3.4: It is recognized that, under this IIC, each OPERATING
COMPANY will share in the benefits and pay its share of the costs of
coordinated operations as agreed upon in accordance with the terms
hereof. All costs and revenues associated with wholesale transactions
under this IIC will be shared among all OPERATING COMPANIES (including
New Power Company) on a comparable basis through the application of the
governing procedures and methodologies to all such OPERATING COMPANIES.
Section 3.5: It is recognized by the OPERATING COMPANIES that
coordinated electric operation contemplates minimum cost of power supply
upon the interconnected system at all times, consistent with service
requirements and other operating limitations. Benefits of integrated
operation accruing to the respective OPERATING COMPANIES are predicated
upon cooperative efforts toward this objective and are so reflected in
all IIC determinations.
ARTICLE IV - ESTABLISHMENT OF OPERATING COMMITTEE
AND DESIGNATION OF AGENT TO ACT UNDER
DIRECTION OF OPERATING COMMITTEE
Section 4.1 - Establishment of Operating Committee: A designated
representative from each of the OPERATING COMPANIES, together with a
designated representative of the AGENT who shall act as chairman, shall
form and constitute an Operating Committee to meet at frequent intervals
and determine the methods of operation hereunder.
Section 4.2 - Duties of Operating Committee: The Operating Committee's
areas of responsibility include such matters as developing the concepts,
terms and conditions of this IIC; providing guidance and direction to
the AGENT regarding economic power system operations and the costs
associated therewith; reviewing and recommending generation expansion
plans for approval by the respective OPERATING COMPANIES; and other
power system matters that relate to the overall coordinated operation of
the Southern electric system. Each OPERATING COMPANY representative has
one vote and all decisions must be unanimous.
Section 4.3 - Designation of AGENT: SCSI, as a party to this IIC, is
designated as AGENT of the OPERATING COMPANIES for administrative and
coordination functions.
Section 4.4 - Duties of AGENT: The AGENT will perform such services and
will represent the OPERATING COMPANIES, or any of them, in all things to
be done by their agent in the execution of and operation under existing
contracts with nonaffiliated utilities or entities (hereinafter referred
to as "OTHERS"), or contracts supplemental thereto, and under any other
contracts in which SCSI has been designated to act as AGENT for the
OPERATING COMPANIES.
The OPERATING COMPANIES have certain contracts with OTHERS
that provide for the purchase and/or sale of capacity and/or energy by
the OPERATING COMPANIES. The AGENT will make the payments associated
with purchases under these contracts and under any other contracts or
arrangements under which it acts as agent for the OPERATING COMPANIES in
accordance with their terms. Each
OPERATING COMPANY will reimburse the AGENT for its portion of such total
payments in accordance with the arrangement in effect with respect to
the particular contract. Similarly, the AGENT will collect the payments
due for sales under these contracts and under any other contracts or
arrangements under which it acts as agent and will distribute such
payments among the OPERATING COMPANIES in accordance with the
arrangement in effect with respect to the particular contract.
Section 4.5 - Term of Agency: The provisions of this IIC providing for
authority for the AGENT to act on behalf of the OPERATING COMPANIES, or
any of them, shall be deemed to refer, insofar as applicable, to all
contracts under which the AGENT acts as AGENT for the OPERATING
COMPANIES and notwithstanding anything to the contrary in ARTICLE II
hereof, this IIC shall continue in effect insofar as it pertains to
other contracts under which the AGENT acts as agent for the OPERATING
COMPANIES during the life of any of the said contracts. The OPERATING
COMPANIES may, however, designate a new agent to act hereunder by giving
thirty
(30) days written notice thereof to the AGENT whereupon such new agent
shall be the AGENT hereunder.
ARTICLE V - OPERATION AND MAINTENANCE
OF THE OPERATING COMPANIES' ELECTRIC FACILITIES
Section 5.1: The OPERATING COMPANIES agree to maintain their respective
electric facilities in good operating condition and to operate such
facilities in coordination with those of the other OPERATING COMPANIES
as an integrated electric system in accordance with determinations made
from time to time by the Operating Committee in order that an adequate
power supply shall be available to meet the requirements of the
customers of the respective parties hereto at the lowest cost consistent
with a high degree of service reliability.
ARTICLE VI - INCORPORATION OF THE ALLOCATION
METHODOLOGY AND PERIODIC RATE COMPUTATION MANUAL
Section 6.1 - Incorporation of Manual: The mechanics and methods for
determining the charges for capacity and energy purchased and sold
between the OPERATING COMPANIES, the monthly capability requirement
determinations, and the monthly xxxxxxxx and payments between the
OPERATING COMPANIES are described in detail in the Allocation
Methodology and Periodic Rate Computation Manual ("Manual") attached
hereto and incorporated herein by reference. The Manual also supplies
more detailed explanation of provisions of this IIC and is necessary to
effectuate its intent.
Section 6.2 - Purpose of Manual: The Manual contains a description of
the methodology and procedure used to calculate the charges for the
services provided for in this IIC. The OPERATING COMPANIES recognize
that the cost of providing such services will change during the term of
this IIC due to changes in loads, investment and expenses and the
addition of electric facilities. Thus, in order for the OPERATING
COMPANIES to share equitably in the cost of the services to be provided
under this
IIC, it will be necessary to revise or update, on a periodic basis, the
cost, expense, load and investment figures utilized in the derivation of
the charges for the services to be provided. The Manual will serve as a
formula rate allowing periodic revision of the charges to reflect
changes in the cost of providing the services contemplated by this IIC.
Section 6.3 - Charges to be Shown on Informational Schedules: The Manual
provides that charges derived by application of the formula rate will be
shown on Informational Schedules. The Informational Schedules will be
revised on a periodic basis to reflect application of the formula rate
contained in the Manual.
Section 6.4 - Revision of Charges and Regulatory Filings: Since the
charges for the services provided for in this IIC will be computed in
accordance with the formula rate method and procedures established in
the Manual, it is contemplated that revisions in such charges will not
be changes in rates which would require a filing and suspension under
the Federal Power Act and the applicable Rules and Regulations of the
FERC. The initial Informational Schedules will be submitted to the FERC,
or its successor in
interest, for informational purposes to show the application of the
formula rate and the resulting charges. In addition, work papers will be
included with the initial Informational Schedules showing a detailed
application of the formula rate contained in the Manual. Revised
Informational Schedules will be submitted to the FERC for informational
purposes only.
Section 6.5 - Timing of Revisions to Charges: It is contemplated that
charges, computed in accordance with the formula rate contained in the
Manual, will be revised annually. It shall be the responsibility of the
AGENT to obtain the data and figures required from the respective
OPERATING COMPANIES for utilization in the formula rates. The AGENT will
also be responsible for calculating the revised charges to be shown on
the Informational Schedules, which will be submitted to the Operating
Committee for review and confirmation.
Section 6.6 - Revision of Manual: The Operating Committee will review
the Manual periodically to determine whether revisions to the formula
rate are necessary to meet
changed or changing conditions. If the Operating Committee determines
that revisions to the formula rate are appropriate or necessary, it will
revise the Manual accordingly. In such event, it will be the
responsibility of the AGENT to file the revised Manual with the FERC, or
its successor in interest, in order to obtain timely approval or
acceptance thereof.
ARTICLE VII - INTERCHANGE CAPACITY TRANSACTIONS
BETWEEN THE OPERATING COMPANIES
Section 7.1 - Provision for Sharing of Temporary Surpluses or Deficits
of Capacity Between Operating Companies: The coordinated operation of
the integrated electric system creates a pool of power, referred to
herein as "the Pool," to which OPERATING COMPANIES commit their surplus
power and from which OPERATING COMPANIES receive their deficit power.
The OPERATING COMPANIES recognize that in a given year one or more of
them may have a temporary surplus or deficit of capacity as a result of
coordinated planning or other circumstances. It is the purpose of this
IIC to allocate equitably between the OPERATING COMPANIES such
temporary surplus or deficit capacity so that each OPERATING COMPANY
will share in the burdens and benefits of coordination of the integrated
electric system. The OPERATING COMPANIES agree to purchase and sell such
temporary surplus and deficit capacity among themselves on a monthly
basis. The amount of capacity to be purchased or sold by the respective
OPERATING COMPANIES is determined by the formula methodology set out in
ARTICLE IV of the Manual.
Section 7.2 - Charge for Monthly Capacity Transactions Among the
OPERATING COMPANIES: The OPERATING COMPANIES recognize that capacity
reserves in the Pool are predominantly made up of peaking plant or
equivalent resources. Accordingly, the monthly charge for capacity
transactions among the OPERATING COMPANIES will be based on the most
recently acquired peaking plant resource that is available for
year-round operation and scheduling. Each OPERATING COMPANY's monthly
charge for capacity sold to the Pool is developed in accordance with the
formula rate set out in ARTICLE V of the Manual. The monthly capacity
charge for each OPERATING COMPANY, as developed in accordance with such
formula rate, will be shown on Informational Schedules. The selling
OPERATING COMPANIES will make capacity available monthly to the Pool for
purposes of reserve sharing at the charge shown on such Informational
Schedules, and the buying OPERATING COMPANIES will purchase capacity at
the average cost of peaking capacity to the Pool.
ARTICLE VIII - INTERCHANGE ENERGY TRANSACTIONS
BETWEEN THE OPERATING COMPANIES
Section 8.1 - Provision for Interchange Energy: Coordinated electric
system operation, utilizing the concept of centralized integrated
electric system economic dispatch, results in energy transfers among the
OPERATING COMPANIES. Such energy transfers are accounted for on an
hourly basis and are referred to as Interchange Energy. The methodology
for determining the amount of Interchange Energy supplied to or
purchased from the Pool is set out in ARTICLE II of the Manual.
Interchange Energy is composed of two categories designated as: (i)
Associated Interchange Energy (energy purchased or delivered to serve an
OPERATING COMPANY's requirements); and
(ii) Opportunity Interchange Energy (energy purchased or delivered to
meet an OPERATING COMPANY's opportunity transactions).
Section 8.2 - Charge for Interchange Energy: The charge for Interchange
Energy sales by an OPERATING COMPANY during any hour will be based on
the variable costs of the generating resources that are considered as
having supplied the Interchange Energy. The methodology for determining
the charges for Associated and Opportunity Interchange Energy sales to
the Pool during any hour is set out in ARTICLE III of the Manual.
ARTICLE IX - PROVISION FOR OTHER
INTERCHANGE TRANSACTIONS
Section 9.1 - Assignable Energy: Assignable Energy is defined as energy
acquired from internal sources or from OTHERS for a purpose other than
economic dispatch. Assignable Energy is assigned to one or more of the
OPERATING COMPANIES consistent with the purpose for which it is
acquired. Such assignment will be accomplished by first identifying the
beneficiary (or beneficiaries) of the Assignable
Energy and then determining the appropriate share for each such
Operating Company. For example, these shares might be based on a Peak
Period Load Ratio (PPLR) in proportion to the PPLRs of other
beneficiaries or relative participation in a bilateral sale. Once
assigned, Assignable Energy will not be delivered to the Pool unless it
becomes economically usable on the integrated electric system.
Section 9.2 - Hydroelectric Operation During Periods of Minimum Steam
Operations: During certain periods of the year when unusually good flow
conditions prevail, certain steam generating units may be taken out of
service to increase the utilization of hydro energy. The OPERATING
COMPANY having such hydro generation may elect to take a fossil fired
generating unit out of service. In the alternative, if another OPERATING
COMPANY takes a fossil fired generating unit out of service for the
purpose of utilizing such hydro energy, the energy rate between the two
OPERATING COMPANIES for that transaction will be the average of the
operation and maintenance cost of such hydro energy and the variable
cost of the fossil fired generating unit, or as otherwise agreed upon by
the two OPERATING COMPANIES.
Section 9.3 - Tie-Line Frequency Regulation by Hydro Capacity: Tie-line
load control and frequency regulation by hydro involves additional costs
because of increased expenditures associated with such regulation. The
charge for these transactions is computed in accordance with the formula
rate contained in ARTICLE VI of the Manual.
Section 9.4 - Pool Transactions with OTHERS: Capacity and energy
transactions with OTHERS that are entered into on behalf of all
OPERATING COMPANIES will be governed by the following principles:
Section 9.4.1 - Pool Purchases of Capacity and Energy: The AGENT
(or an individual OPERATING COMPANY for the AGENT) may periodically
purchase capacity and energy from nonassociated sources for the benefit
of the integrated electric system. Such Pool purchases will initially be
allocated at cost to all OPERATING COMPANIES in proportion to their
Peak-Period Load Ratios (as provided for in ARTICLE X of this IIC).
Purchases so allocated may be sold as Interchange Energy
when they are economically usable on the integrated electric system.
Adjustments may thereafter be made in order to reconcile any inequitable
effects of this process among the OPERATING COMPANIES, with the intent
being that none of the individual OPERATING COMPANIES should be
adversely impacted by a purchase that benefits the system as a whole.
These impacts will be determined through a system simulation that
calculates each Operating Company's cost of generation that is avoided
by the purchase. This avoided cost will be compared on an hourly basis
to the cost of the purchase. To the extent the avoided cost exceeds the
purchase cost, the effect is "positive" (i.e., cost savings) for that
hour. These hourly results will be summed to determine the effect on
each Operating Company for the day. In situations where individual
Operating Companies are adversely impacted by a purchase that benefits
the system as a whole, such adverse impacts will be offset through a
proportional reduction in the positive net benefits realized by the
other Operating Companies.
Section 9.4.2 - Pool Sales of Capacity and Energy: The AGENT may
from time to time arrange for the sale to OTHERS of capacity and
energy available on the
integrated electric system at rates provided for in contracts or
at rates mutually agreed upon. The capacity and/or energy obligation for
the sale, as well as the associated cost, is allocated to each OPERATING
COMPANY on a Peak-Period Load Ratio basis (as provided for in Article X
of this IIC). Payments by OTHERS are also distributed to the respective
OPERATING COMPANIES on the basis of the Peak-Period Load Ratios.
ARTICLE X - UTILIZATION OF PEAK-PERIOD LOAD RATIOS
Section 10.1 - Certain Allocations and Payments to be Based on
Peak-Period Load Ratios: The AGENT is responsible for the annual
development of Peak-Period Load Ratios for each of the OPERATING
COMPANIES and such values shall be submitted to the Operating Committee
for review and confirmation. These Ratios will be utilized for
allocation of certain costs, payments, receipts and other obligations as
provided for in this IIC or the Manual. The procedure and methodology
for developing the Peak-Period Load Ratios are set out in ARTICLE I of
the Manual and the values for such Ratios are shown on an Informational
Schedule.
Section 10.2 - Other Uses of Peak-Period Load Ratios: It is agreed that
the Peak-Period Ratios shown on Informational Schedule No. 1 may be
used, if appropriate, by the OPERATING COMPANIES to reimburse the AGENT
for other expenses and costs not contemplated by this IIC.
ARTICLE XI - TRANSMISSION SERVICE
Section 11.1 - Applicability of Network Integration Transmission
Service: Network Integration Transmission Service ("Network Service")
provides for the integration, economic dispatch and regulation of
current and planned Network Resources to serve Network Load. Since the
OPERATING COMPANIES integrate, economically dispatch and regulate their
generating resources to serve their native load pursuant to this IIC,
the associated use of the transmission system is in the nature of
Network Service. The OPERATING COMPANIES' native load is specifically
included in the determination of Load Ratio Shares used to derive the
charge for Network Service under the Open Access Transmission Tariff,
and therefore the OPERATING
COMPANIES are bearing a cost responsibility for transactions hereunder
comparable to that assigned to other Network Customers.
Section 11.2 - Transmission Service for Other Transactions: To the
extent the OPERATING COMPANIES require transmission service associated
with transactions that are entered into for purposes other than serving
native load customers, such transmission service will be obtained
pursuant to the Open Access Transmission Tariff and/or from other
transmission providers.
ARTICLE XII - BILLING AND PAYMENT
Section 12.1 - Recording and Billing of Energy Transactions: Each
OPERATING COMPANY shall transmit to the AGENT daily all data and
information necessary to develop the monthly xxxx for the various energy
transactions contemplated by this IIC. Each OPERATING COMPANY will
transmit such data and information to the AGENT for each hour of the
year to provide for such accounting and billing. All these data are
recorded by the AGENT as required to meet the provisions of this IIC and
to
permit application of appropriate interchange charges. The OPERATING
COMPANIES are responsible for an arithmetical check of all figures
submitted. The AGENT is responsible for assembling all of the data and
information and for determining amounts of various classes of energy
delivered to and received from the Pool. The AGENT prepares intercompany
energy billing for each month in accordance with the provisions of this
IIC. The bills shall contain such details as required to permit review
and verification by the OPERATING COMPANIES.
Section 12.2 - Month-End Adjustment of Daily Energy Determinations: At
the close of each month, the AGENT allocates energy from nonassociated
sources to the OPERATING COMPANIES and determines the amounts of various
classes of energy moved in interchange, based upon daily conditions. The
sum of the daily totals in interchange does not exactly equal
corresponding amounts determined by month-end meter readings because of
certain minor transactions that are neither metered nor recorded daily.
Such differences in energy receipts and deliveries are billed or
credited to each OPERATING COMPANY at the average cost of
Interchange Energy to the Pool for the month.
Section 12.3 - Billing of Capacity Transactions: The AGENT prepares a
monthly xxxx to the OPERATING COMPANIES for all capacity transactions
contemplated by this IIC. The xxxx shall contain such details as
required to permit review and verification by the OPERATING COMPANIES.
Section 12.4 - Billing and Payment Date: The AGENT renders all bills
provided for in this IIC not later than the 10th day of the billing
month. All payments by the OPERATING COMPANIES are made by the 20th day
of the billing month.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
by their duly authorized representatives on the Operating Committee, which
signatures may be set forth on separate counterpart pages.
ALABAMA POWER COMPANY MISSISSIPPI POWER COMPANY
By_________________________ By ___________________________
Its ___________________ Its__________________________
GEORGIA POWER COMPANY SAVANNAH ELECTRIC AND POWER COMPANY
By_________________________ By __________________________
Its ___________________ Its__________________________
GULF POWER COMPANY SOUTHERN COMPANY SERVICES, INC.
By_________________________ By __________________________
Its ___________________ Its__________________________
[NEW POWER COMPANY]
By__[Information]_____________
Its __________________________
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
by their duly authorized representatives on the Operating Committee, which
signatures may be set forth on separate counterpart pages.
ALABAMA POWER COMPANY MISSISSIPPI POWER COMPANY
By_________________________ By _________________________
Its ___________________ Its_________________________
GEORGIA POWER COMPANY SAVANNAH ELECTRIC AND POWER COMPANY
By_________________________ By _________________________
Its ___________________ Its_________________________
GULF POWER COMPANY SOUTHERN COMPANY SERVICES,
INC.
By_________________________ By _________________________
Its ___________________ Its_________________________
[NEW POWER COMPANY]
By__[Information]__________
Its _______________________
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
by their duly authorized representatives on the Operating Committee, which
signatures may be set forth on separate counterpart pages.
ALABAMA POWER COMPANY MISSISSIPPI POWER COMPANY
By_________________________ By __________________________
Its ___________________ Its__________________________
GEORGIA POWER COMPANY SAVANNAH ELECTRIC AND POWER
COMPANY
By_________________________ By __________________________
Its ___________________ Its__________________________
GULF POWER COMPANY SOUTHERN COMPANY SERVICES,
INC.
By_________________________ By __________________________
Its ___________________ Its__________________________
[NEW POWER COMPANY]
By [Information]____________
Its _________________________
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
by their duly authorized representatives on the Operating Committee, which
signatures may be set forth on separate counterpart pages.
ALABAMA POWER COMPANY MISSISSIPPI POWER COMPANY
By_________________________ By ___________________________
Its ___________________ Its___________________________
GEORGIA POWER COMPANY SAVANNAH ELECTRIC AND POWER COMPANY
By_________________________ By ___________________________
Its ___________________ Its___________________________
GULF POWER COMPANY SOUTHERN COMPANY SERVICES, INC.
By_________________________ By ___________________________
Its ___________________ Its___________________________
[NEW POWER COMPANY]
By__[Information]_____________
Its __________________________
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
by their duly authorized representatives on the Operating Committee, which
signatures may be set forth on separate counterpart pages.
ALABAMA POWER COMPANY MISSISSIPPI POWER COMPANY
By_________________________ By _____________________________
Its ___________________ Its_____________________________
GEORGIA POWER COMPANY SAVANNAH ELECTRIC AND POWER COMPANY
By_________________________ By _____________________________
Its ___________________ Its_____________________________
GULF POWER COMPANY SOUTHERN COMPANY SERVICES, INC.
By_________________________ By _____________________________
Its ___________________ Its_____________________________
[NEW POWER COMPANY]
By [Information]________________
Its ____________________________
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
by their duly authorized representatives on the Operating Committee, which
signatures may be set forth on separate counterpart pages.
ALABAMA POWER COMPANY MISSISSIPPI POWER COMPANY
By_________________________ By __________________________
Its ___________________ Its__________________________
GEORGIA POWER COMPANY SAVANNAH ELECTRIC AND POWER COMPANY
By_________________________ By __________________________
Its ___________________ Its__________________________
GULF POWER COMPANY SOUTHERN COMPANY SERVICES, INC.
By_________________________ By __________________________
Its ___________________ Its__________________________
[NEW POWER COMPANY]
By [Information]____________
Its _________________________
Southern Company Services, Inc. Original Sheet No. 32A
First Revised Rate Schedule FERC No. 138
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
by their duly authorized representatives on the Operating Committee, which
signatures may be set forth on separate counterpart pages.
ALABAMA POWER COMPANY MISSISSIPPI POWER COMPANY
By_________________________ By _____________________________
Its ___________________ Its_____________________________
GEORGIA POWER COMPANY SAVANNAH ELECTRIC AND POWER COMPANY
By_________________________ By _____________________________
Its ___________________ Its_____________________________
GULF POWER COMPANY SOUTHERN COMPANY SERVICES, INC.
By_________________________ By _____________________________
Its ___________________ Its_____________________________
SOUTHERN POWER COMPANY
By ________________________
Its _____________________________
Southern Company Services, Inc. Original Sheet No. 33
First Revised Rate Schedule FERC Number 138
Issued by: Xxxxxxx X. XxXxxxx, Executive Vice Pres. Effective: April 18, 2000
Issued on: October 2, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259
Issued by: Xxxxxxx X. XxXxxxx, Executive Vice Pres. Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259
ALLOCATION METHODOLOGY AND PERIODIC
RATE COMPUTATION PROCEDURE MANUAL
Section 0.0 - Description and Purpose of Manual: This Manual is provided
for in the Southern Company System Intercompany Interchange Contract
("IIC") entered into the 17th day of February, 2000, and contains a formula
description of the methodology and procedure used to calculate the charges
under the IIC. The Manual is divided into six (6) basic articles as
follows:
ARTICLE I - Methodology for Determination
of Peak-Period Load Ratios
ARTICLE II - Methodology for Determination
of Amount of Interchange Energy
Sold To and Purchased From
the Pool
ARTICLE III - Rates for Interchange Energy
ARTICLE IV - Methodology for Determination
of Monthly Amount of Capacity
To Be Sold To or Purchased From
the Pool
Southern Company Services, Inc. Original Sheet No. 34
First Revised Rate Schedule FERC Number 138
ARTICLE V - Monthly Capacity Rate of Each
OPERATING COMPANY Based on
Ownership or Purchase of Peaking Plant or
Equivalent Resources
ARTICLE VI - Rate for Tie-Line Load Control
and Frequency Regulation by
Hydro Facilities
ARTICLE I
METHODOLOGY FOR
DETERMINATION OF PEAK-PERIOD LOAD RATIOS
Section 1.1 - Provision for Peak-Period Load Ratios: This article of the
Manual establishes and provides for the yearly derivation of Peak-Period
Load Ratios that are utilized in energy and capacity transactions and in
other allocations as provided for in the IIC. These Ratios are shown on
Information Schedule No. 1.
Section 1.2 - Methodology for Determining Peak-Period Load Ratios: The
Contract Year in the IIC is defined to be January 1st through December 31st
of the calendar year. The peak
Southern Company Services, Inc. Substitute Original Sheet No. 35
First Revised Rate Schedule FERC Number 138 superseding Original Sheet No. 35
Issued by: Xxxxxxx X. XxXxxxx, Executive Vice Pres. Effective: April 18, 2000
Issued on: October 2, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259 and letter order issued September 27, 2000
period is defined to be the fourteen (14) hours between 7:00 a.m. and 9:00
p.m. (Prevailing Central Time) of each weekday, excluding holidays.
The Peak-Period Load Ratios for the Contract Year are based upon the prior
year's actual peak period energy in the critical months of June, July, and
August for each OPERATING COMPANY. The system peak period energy is equal
to the sum of all the OPERATING COMPANIES' peak period energy, excluding:
(i) opportunity transactions of a transient nature in the shorter term
markets (such as hourly, day ahead and week ahead); and (ii) any energy
sales transactions for which there are no underlying supply resources.
The Peak-Period Load Ratios are determined by dividing each OPERATING
COMPANY's summation of the June, July, and August actual weekday
peak-period energy by the total system June, July, and August actual
weekday peak-period energy.
ARTICLE II
METHODOLOGY FOR
DETERMINATION OF AMOUNT OF INTERCHANGE
ENERGY SOLD TO AND PURCHASED FROM THE POOL
Section 2.1 - Methodology for Determination of Amount of Interchange
Energy: The total of energy delivered by each OPERATING COMPANY to all
other OPERATING COMPANIES and to OTHERS, less the total of energy received
by each OPERATING COMPANY from all other OPERATING COMPANIES and from
OTHERS, constitutes the
Southern Company Services, Inc. Original Sheet No. 36
First Revised Rate Schedule FERC Number 138
Issued by: Xxxxxxx X. XxXxxxx, Executive Vice Pres. Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259
net of interchange deliveries to and receipts from the Pool. Interchange
Energy is the net of such energy deliveries and receipts from the Pool
after adjustment for energy movements received from or delivered to sources
within or outside the territory of the OPERATING COMPANIES and settled for
under arrangements made for such energy movements; and after adjustment for
excess energy not required or usable by any of the OPERATING COMPANIES that
may be sold by one OPERATING COMPANY to OTHERS, not a party to this IIC;
and after adjustment for energy delivered to or received from Southern
Electric Generating Company, Xxxxxx County Steam Plant, Xxxxxx Steam Plant,
Xxxxxxx Steam Plant Unit No. 3, Southeastern Power Administration, South
Mississippi Electric Power Association, and other similar arrangements; and
after adjustment for hydro energy losses due to tie-line frequency
regulation. The determination of the amount of Interchange Energy delivered
to or received from the Pool is computed hourly.
ARTICLE III
RATES FOR INTERCHANGE ENERGY
Section 3.1 - Procedure for Economic Dispatch: Centralized economic
dispatch is accomplished by dispatching system generating resources to meet
the requirements of the OPERATING COMPANIES and to supply energy for sales
to OTHERS. System resources are dispatched based on variable dispatch
costs, which include the marginal replacement fuel cost (as defined in
Section 3.6 of the Manual), variable operation and maintenance expenses,
in-plant fuel handling costs, emission allowance replacement cost,
compensation for
Southern Company Services, Inc. Original Sheet No. 38
First Revised Rate Schedule FERC Number 138
transmission losses, and other such energy related costs that would
otherwise not have been incurred.
Section 3.2 - Associated Interchange Energy Rate: The Associated
Interchange Energy Rate is determined for each hour and is defined as the
system incremental energy cost. This cost shall be based on the variable
cost of the resources that serve the requirements of the OPERATING
COMPANIES. The variable cost of these resources shall include the marginal
replacement fuel costs (as defined in Section 3.6 of the Manual), variable
operation and maintenance expenses, in-plant fuel handling expenses,
emission allowance replacement cost, compensation of incremental
transmission losses, cost of purchases, and other such energy related costs
that would otherwise not have been incurred. For each hour, an OPERATING
COMPANY supplying Associated Interchange Energy to the Pool will receive a
payment determined by multiplying the applicable Associated Interchange
Energy Rate by the quantity of kilowatt-hours delivered to the Pool. For
each hour, an OPERATING COMPANY purchasing Associated Interchange Energy
from the Pool will be charged an amount determined by multiplying the
Associated Interchange Energy Rate by the quantity of kilowatt-hours
received from the Pool.
Section 3.3 - Opportunity Interchange Energy Rate: The rate for energy
delivered to the Pool for purposes of an opportunity transaction will be
based upon the variable cost of the resources that supply such energy. The
variable cost of these resources shall include the marginal replacement
fuel cost (as defined in Section 3.6 of the Manual), variable operation and
maintenance expenses, in-plant fuel handling expenses, emission allowance
replacement cost, compensation for transmission losses, cost of purchases,
and other such energy related costs that would otherwise not have been
incurred. For each hour of the transaction, an Opportunity Interchange
Energy Rate will be developed based on the variable costs of the resources
used to supply the energy. This rate will be applied to each OPERATING
COMPANY's energy obligation for that transaction to derive the payment due
from such OPERATING COMPANY. The resulting payments will then be used to
reimburse the cost of the OPERATING COMPANIES that supplied the Opportunity
Interchange Energy.
Section 3.3.1 - Opportunity Interchange Energy Rates Related to Certain
Contracts and Other Obligations of the Operating Companies: The OPERATING
COMPANIES are currently obligated to supply various types of energy on a
Peak-Period Load Ratio basis under contracts with Florida Power & Light
Company, Jacksonville Electric Authority, Florida Power Corporation, City
of Tallahassee, Florida, and South Mississippi Electric Power Association.
For purposes of these contracts, the variable cost of resources supplying
the energy shall include the blended replacement fuel cost (as defined in
Section 3.5 of this Manual), variable operation and maintenance expenses,
in-plant fuel handling expenses, emission allowance replacement cost,
compensation for transmission losses, cost of purchases, and other such
energy related costs that would otherwise not have been incurred.
Southern Company Services, Inc. Original Sheet No. 39
First Revised Rate Schedule FERC Number 138
Issued by: Xxxxxxx X. XxXxxxx, Executive Vice Pres. Effective: June 15, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259
Section 3.4 - Variable Operation and Maintenance Expenses For Fossil Fired
Units: The variable Operation and Maintenance expenses for fossil steam and
combustion turbine units for the Contract Year are derived by summing the
following budgeted/forecasted components for each unit: (i) all operating
material, non-labor, and on-site contract labor charged to FERC Accounts
502 and 505 (Fossil Steam); and (ii) all maintenance material, non-labor,
and contract labor charged to FERC Accounts 512 and 513 (Fossil Steam), and
553 (Combustion Turbine). These budgeted expense estimates may be levelized
over the major maintenance cycle of a particular unit or set of units.
The estimated expenses are divided by the estimated net energy output of
each unit to convert the values to xxxxx per kilowatt-hour. The variable
Operation and Maintenance expense for each fossil steam and combustion
turbine unit is shown on Information Schedule No. 2 for the Contract Year.
Southern Company Services, Inc. Original Sheet No. 41
First Revised Rate Schedule FERC Number 138
Issued by: Xxxxxxx X. XxXxxxx, Executive Vice Pres. Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259
Section 3.4.1 - In-Plant Fuel Handling Costs for Fossil Fired Units:
In-Plant fuel handling costs for each fossil steam and combustion turbine
unit for the Contract Year are based on the budgeted/forecasted
expenditures for in-plant fuel handling expenses charged to FERC Account
501. These budgeted expense estimates may be levelized over the major
maintenance cycle of a particular unit or set of units.
The estimated expenses are divided by the estimated net energy output of
each unit to convert the values to xxxxx per kilowatt-hour. The in-plant
fuel handling cost for each fossil steam and combustion turbine unit is
shown on Informational Schedule No. 2 for the Contract Year.
Section 3.5 - Blended Replacement Fuel Cost: Blended replacement fuel costs
are determined monthly by the AGENT and are defined as the weighted average
cost, escalated for the current dispatch period, of fuel receipts for the
previous month (both long-term contract and spot market receipts) and the
projected fuel receipts for the current month, or as otherwise agreed to by
the OPERATING COMPANIES.
Section 3.6 - Marginal Replacement Fuel Cost: Marginal replacement fuel
costs are determined monthly by the AGENT, and reflect the costs of the
next purchase of uncommitted fuel for a generating facility. Such marginal
replacement fuel costs may be revised during the month if significant
changes occur. For gas or oil-fired units, the marginal replacement fuel
costs are based upon the volume of gas or oil necessary to replace the
projected monthly burn. Marginal replacement gas or oil prices may be
changed during the month if a significant change occurs.
The above described procedures will be periodically reviewed by the AGENT
and may be revised upon approval of the OPERATING COMPANIES.
Southern Company Services, Inc. Original Sheet No. 44
First Revised Rate Schedule FERC Number 138
ARTICLE IV
METHODOLOGY FOR
DETERMINATION OF MONTHLY AMOUNT OF
CAPACITY TO BE SOLD TO OR PURCHASED
FROM THE POOL
Section 4.1 - Formula for Determination of Monthly Capacity
Sales/Purchases: The monthly capacity sale to or purchase from the pool for
each OPERATING COMPANY is determined from the following formula:
CS or CP = RS - R
Where:
CS or CP = Capacity sales to the
Pool (CS) or capacity purchases
from the Pool (CP) by an
OPERATING COMPANY. A negative
value indicates a sale to the
Pool and a positive value
indicates a purchase from the
Pool
RS = Reserve responsibility for
each OPERATING COMPANY (See
Section 4.1.1)
R = Reserve capacity for each
OPERATING COMPANY (See Section
4.1.2)
Section 4.1.1 - Reserve Responsibility (RS): The responsibility for the
reserve capacity on the integrated electric system is allocated among the
OPERATING COMPANIES on the basis of peak hour load ratios for each month.
RS = L/L' x R
Where:
RS = Reserve responsibility for each
OPERATING COMPANY
L = Monthly peak hour load
responsibility of each
OPERATING
COMPANY (See Section 4.3)
L' = Monthly peak hour load of the
integrated electric system (See
Section 4.3)
R = Sum of the reserve capacity
for all of the OPERATING
COMPANIES
Section 4.1.2 - Reserve Capacity (R): The reserve capacity for each of the
respective OPERATING COMPANIES is determined monthly by the following
formula:
R = C - CR
Where:
C = Total capacity available to the
OPERATING COMPANY (See Section
4.2)
CR = Total capacity required to meet
reliably the OPERATING
COMPANY's load responsibility
The capacity required to meet the OPERATING COMPANY's load responsibility
is determined by the following formula:
CR = LC + LCR
Where:
LC = Portion of the total capacity
required to meet reliably the
OPERATING COMPANY'S load
responsibility
Southern Company Services, Inc. Original Sheet No. 45
First Revised Rate Schedule FERC Number 138
that is available for load service ("available portion").LCR =
Portion of the capacity required to meet reliably the OPERATING
COMPANY'S load responsibility that is unavailable for load
service for any reason (including forced outage, partial outage
or maintenance outage) during the ten (10) highest system peak
hours during each month averaged over the most recent three-year
period ("unavailable portion"). These unavailable portions of
capacity are determined by identifying unavailability specific to
each individual OPERATING COMPANY by each generation type.
Individual OPERATING COMPANY unavailability factors for each type
of generating capacity will be applied to their respective owned
resources in determining their unavailable capacity associated
with load service.
The available portion of the total capacity is determined from the
following formula:
LC = CPS + DSO + Cha + Cna + Coa
Southern Company Services, Inc. Original Sheet No. 46
First Revised Rate Schedule FERC Number 138
Where:
CPS = Net contract purchases from and sales to OTHERS
DSO = Demand side option equivalent capacity
Cha = Total conventional hydro capacity less the
unavailable portion of conventional hydro capacity
Cna = Total nuclear capacity less the unavailable
portion of nuclear capacity
Coa = Total available pumped storage
hydro, coal, combustion turbine,
oil, and gas capacity required to
meet the remaining portion of the
OPERATING COMPANY's load
responsibility calculated as:
Coa = L - CPS - DSO - Cha - Cna
The unavailable portion of the total capacity is determined from the
following formula:
LCR = Chu + Cnu + (Coa/(1 - (Cou/Cot)) - Coa)
Where:
Chu = Unavailable portion of conventional hydro capacity
Southern Company Services, Inc. Original Sheet No. 47
First Revised Rate Schedule FERC Number 138
Cnu = Unavailable portion of nuclear capacity
Cou = Total unavailable pumped storage hydro,
coal, combustion turbine, oil, and gas
capacity
Cot = Total pumped storage hydro,
coal, combustion turbine, oil,
and gas capacity.
Section 4.2 - Determination of Capacity Available to Each OPERATING COMPANY
(C): The capacity available to each OPERATING COMPANY is determined monthly
as the sum of available owned, leased or otherwise available generating
units, net contract purchases from and sales to OTHERS, as approved by the
Operating Committee, and seasonal or other power exchange from reliable
sources. The capacity available is determined from the following formula:
C = Cc + Cn + Cog + Cp + Cct + Ch + Cpsh + DSO + CPS
Where:
Cc = Coal capacity
Cn = Nuclear capacity
Cog = Oil and gas capacity
Cp = Peak Load capacity
Cct = Combustion turbine capacity
Southern Company Services, Inc. Original Sheet No. 48
First Revised Rate Schedule FERC Number 138
Ch = Conventional hydro capacity
Cpsh = Pumped storage hydro capacity
DSO = Demand side option equivalent
capacity
CPS = Net contract purchases from and
sales to OTHERS
The components of the above formula shall be computed as detailed below.
Unless otherwise provided, the capability demonstrated in accord with such
procedures shall be used in establishing the following year's capacity
values. Where seasonal references are made, the seasons shall be defined as
follows: Summer (June through September); Fall (October through November);
Winter (December through February); and Spring (March through May).
Section 4.2.1 - Certified Rating: The production officer at each OPERATING
COMPANY will certify the full load capability of each coal electric
generating unit (excluding units from which Unit Power Sales and other
similar bulk power sales are made), oil and gas steam electric generating
unit and combustion turbine unit. Southern Nuclear Operating Company will
certify the capability of each nuclear steam electric generating unit.
These certified ratings ("Full Load" ratings) shall represent the full load
capability expected to be available continuously on a daily basis, under
normal operating conditions, with all units at a given plant demonstrating
concurrently. Where appropriate, certified ratings shall be adjusted to
reflect cogeneration and seasonal impacts.
Southern Company Services, Inc. Original Sheet No. 49
First Revised Rate Schedule FERC Number 138
The production officer at each OPERATING COMPANY will also certify the peak
load capability of generating units demonstrating such capability ("Peak
Load" capability). The Peak Load capability shall represent the additional
amount of generation obtained for a limited period of time by operating all
units at a given plant concurrently and under conditions such as, but not
limited to, overpressure, valves wide open and top feedwater heaters out of
service.
Section 4.2.2 - Coal (Cc)and Nuclear (Cn) Capacity: The Full Load rating of
each coal and nuclear steam electric generating unit shall be based on the
unit's capability during hours when such unit demonstrates full output
during the months of June through August, adjusted for temporary
identifiable deratings. Such demonstrated output shall be used to establish
the following year's Full Load rating.
Section 4.2.3 - Oil and Gas Capacity (Cog): The Full Load rating of each
oil and gas steam electric generating unit shall be based on the unit's
demonstrated capability during hours when such unit demonstrates full
output during the months of June through August, adjusted for temporary
identifiable deratings. Such demonstrated output shall be used to establish
the following year's Full Load rating.
Combined cycle units shall be demonstrated in accordance with the foregoing
paragraph and the demonstrated output shall be used to determine the
following year's summer rating. During the fall, winter and spring,
adjustments may be made to the Full Load rating to reflect
Southern Company Services, Inc. Original Sheet No. 50
First Revised Rate Schedule FERC Number 138
the unit's capability at expected seasonal ambient temperatures.
Section 4.2.4 - Combustion Turbine Capacity (Cct): The Full Load rating of
combustion turbine units is based on the demonstrated output of such unit
and the manufacturer's base design curve rating. Combustion turbine units
shall demonstrate daily sustained capability during the months of June
through August, adjusted for temporary identifiable deratings. The
demonstrated output shall be used to determine the following year's summer
rating. During the fall, winter and spring, adjustments may be made to the
Full Load rating to reflect the unit's capability at expected seasonal
ambient temperatures.
Section 4.2.5- Peak Load Capacity (Cp): The Peak Load capacity of
demonstrating generating units shall be the additional amount of generation
obtained by operating all units at a given plant concurrently and under
conditions such as, but not limited to, overpressure, valves wide open and
top feedwater heaters out of service. The Peak Load capacity shall be based
on such unit's demonstrated capability during hours when the unit
demonstrates peak load capability during the months of June through August,
adjusted for temporary identifiable deratings. The capability demonstrated
will be used in establishing the following year's Peak Load rating.
Section 4.2.6 - Conventional (Ch) and Pumped Storage (Cpsh) Hydro Capacity:
For purpose of the IIC, hydro capability is the average simulated
generation during eight (8) consecutive hours occurring on five (5)
consecutive weekdays using the average water inflows from
Southern Company Services, Inc. Original Sheet No. 52
First Revised Rate Schedule FERC Number 138
historical data. The simulation process utilizes maximum (full) gate
setting and best (most efficient) gate setting to determine the capability
of the hydro facilities. The capability for the months June-August is the
summer maximum gate simulated rating. For the months December-May, the
capability is the winter maximum gate simulated rating. The capability of
the months September-November is the summer best gate simulated rating. To
the extent that an OPERATING COMPANY can demonstrate to the satisfaction of
the Operating Committee that a hydro facility can actually achieve the
maximum gate rating during the fall months, the capability of such hydro
facility will be the maximum gate rating.
Section 4.2.7 - Adjustments to Unit Ratings: The Operating Committee
periodically may evaluate and adjust determinations of unit ratings based
upon evaluations of reliability. The Operating Committee will consider
special circumstances to achieve precision in the ratings of units for IIC
purposes for the forthcoming year when the aforementioned procedures do not
yield an accurate result. The governing unit ratings will be included in
the informational filing submitted in accordance with ARTICLE VI of the
contract.
Section 4.2.8 - Active Demand Side Options - Equivalent Capacity (DSO): The
equivalent capacity of each active demand side option for each month of the
calendar year is determined from the following formula:
DSO = ((Cv x ICE) / (1 -(%TL/100))) x A Where:
DSO = Demand side option equivalent capacity
Cv = Contracted value
ICE = Incremental capacity equivalent factor
%TL = Six (6) percent incremental transmission losses
A = Availability Factor
The Incremental Capacity Equivalent Factor is a measure of the effect of a
demand side option on generating system reliability. The Availability
Factor is a measure of the probability of an active demand side option
being available at the time it is needed.
Section 4.2.9 - Contract Purchases and Sales (CPS): Contract purchases and
sales include contracted capacity purchases from and sales to OTHERS for
any month as agreed upon by the Operating Committee. The contracted
capacity will be prorated according to the number of days in each month
that it is available to an OPERATING COMPANY.
Section 4.3 - Determination of Peak Hour Load Responsibility of Each
OPERATING COMPANY (L): The monthly peak hour load responsibility of each
OPERATING COMPANY is determined by the following formula:
Southern Company Services, Inc. Original Sheet No. 53
First Revised Rate Schedule FERC Number 138
L = L' x La/100
Where:
L' = Monthly ten (10) highest hour average
load of the integrated
electric system
La = Monthly average percent contribution of
each OPERATING COMPANY's ten (10) highest
hour average loads to the monthly ten (10)
highest hour average loads of the system
for the most recent three-year period.
Section 4.4 - Capacity Adjustment For Generating Unit Schedule: For a
generating unit scheduled for commercial operation, retirement, or sale for
the coming year, an adjustment will be made in the capability resources of
the appropriate OPERATING COMPANY based upon the actual date of commercial
operation, retirement, or sale; provided however, that the adjustment will
not be made in a month earlier than that approved by the Operating
Committee. If the actual date is on or before the 15th day of the month,
the capacity adjustment begins in that month. If the actual date is beyond
the 15th day of the month, the capacity adjustment begins in the following
month.
Southern Company Services, Inc. Original Sheet No. 54
First Revised Rate Schedule FERC Number 138
ARTICLE V
MONTHLY CAPACITY RATE OF
EACH OPERATING COMPANY BASED ON
OWNERSHIP OR PURCHASE OF
PEAKING PLANT OR EQUIVALENT RESOURCES
Section 5.1 - Provision for Monthly Capacity Rate: This article of the
Manual establishes the formula rate for deriving the monthly capacity
charge for each OPERATING COMPANY based on its most recently installed
peaking facilities (or equivalent purchased resources) available for
year-round operation or scheduling. OPERATING COMPANIES that have not
installed or purchased such facilities or resources within the last five
(5) years will utilize the weighted average rate of all the OPERATING
COMPANIES that have installed or purchased such facilities or resources.
The monthly capacity charges are utilized in the determination of payments
to the Pool by the OPERATING COMPANIES purchasing capacity during the month
and receipts from the Pool by the OPERATING COMPANIES selling capacity
during the month. Each OPERATING COMPANY that sells capacity to the Pool
will receive a payment based on the product of the amount of net capacity
sales (CS) times that OPERATING COMPANY's monthly capacity rate. Each
deficit OPERATING COMPANY will make payments to the Pool based on the
product of the amount of net capacity purchased (CP) times the weighted
average cost of such capacity sold to the Pool during the month. The
monthly capacity rate of each OPERATING COMPANY for each month of the
Contract
Southern Company Services, Inc. Original Sheet No. 56
First Revised Rate Schedule FERC Number 138
Year is shown on Informational Schedule No. 3. Such rates will be
revised in accordance with this Manual and the IIC in subsequent
contract years.
Section 5.2 - Derivation of Monthly Capacity Costs of Each Operating
Company: The derivation of the monthly capacity costs of each OPERATING
COMPANY is based on one of the following: (i) the capacity cost of the most
recently added peaking facilities; (ii) the capacity cost of the most
recent long-term capacity purchase; or (iii) the weighted system average of
the capacity costs of the most recently added peaking facilities or
long-term purchases.
The monthly capacity rate of each OPERATING COMPANY for installed peaking
facilities under (i) will be determined by the following formula:
R1 = (I x LFCC/100/C1) x MCWF
Where:
R1 = Monthly charges for peaking
plant or equivalent resource
($/kW-Month)
I = Gross investment in peaking facilities ($)
LFCC = 16.3%, levelized fixed capacity charge
C1 = Peaking facilities rated production capability
(kW), as
determined by Section 4.2 of this Manual
MCWF = Monthly Capacity Worth Factor for the applicable
month.
The AGENT may periodically re-evaluate the monthly capacity worth factors
based upon evaluations of system reliability. The governing MCWFs will be
included in the Informational Schedules submitted in accordance with
ARTICLE VI of the Contract.
For purposes of (ii), the monthly charge of each OPERATING COMPANY for
purchased equivalent resources will be the annual capacity rate ($/kW-Year)
paid for such purchased equivalent resources, multiplied by the applicable
MCWF.
For purposes of (iii), the monthly capacity rate will be the weighted
system average so determined, multiplied by the applicable MCWF.
Section 5.3 - Monthly Capacity Rate To Be Adjusted For Production Resource
Change: If peaking facilities or purchased equivalent resources of an
OPERATING COMPANY, approved by the Operating Committee, are to be in
commercial operation or available for scheduling by the 15th day of a
particular month, the budgeted investment cost or projected contract price
will be used in the determination of the monthly capacity rate for such
OPERATING COMPANY for that and subsequent months of the calendar year. If
such facilities or resources are not placed in commercial operation or
available for scheduling by the 15th day of such month, the monthly
capacity charge for the previous month will remain
Southern Company Services, Inc. Original Sheet No. 57
First Revised Rate Schedule FERC Number 138
in effect until the month in which the facilities or resources are declared
to be in commercial operation or available for scheduling on or before the
15th day.
ARTICLE VI
RATE FOR TIE-LINE LOAD CONTROL AND
FREQUENCY REGULATION BY HYDRO FACILITIES
Section 6.1 - Provision for Hydro Regulation Energy Losses: Because of
energy losses from hydro regulation, the OPERATING COMPANIES supplying this
service are deprived of hydro energy. To distribute equitably this loss of
energy among the OPERATING COMPANIES in accordance with size of loads
regulated and to compensate the OPERATING COMPANIES for regulating services
rendered, adjustments in billing determinations are necessary. Hydro energy
losses actually incurred by regulating OPERATING COMPANIES during each day
are replaced by the Pool at zero cost, and the AGENT allocates such energy
losses to all OPERATING COMPANIES in accordance with Peak-Period Load
Ratios. Energy lost during high-flow periods is replaced during the period
in which such losses occur, and energy lost from poorer efficiencies during
normal and low-flow periods is replaced during the 14-hour peak period
since hydro energy so lost could have been retained in storage and
generated during this period.
Section 6.2 - Provision for Increases in Cost Due to Hydro
Regulation: Payments are made to hydro
regulating OPERATING COMPANIES for each hour of such regulation for the
Southern Company Services, Inc. Original Sheet No. 58
First Revised Rate Schedule FERC Number 138
increase in operating and maintenance expenditures for governor mechanisms
and water turbine parts, and these expenses are allocated to all OPERATING
COMPANIES in accordance with Peak-Period Load Ratios. Such payments are
calculated using actual expenses incurred through the last calendar year
available, adjusted to current-year dollars, for the cost of labor,
engineering and supervision, and materials and supplies in the following
FERC Accounts: 544-10, Generator and Exciters; 000-00, Xxxxxxxxx Xxxxxxxx
and Settings; 544-40, Governors and Control Apparatus; and 544-50,
Powerhouse Remote Control Equipment. The basis for hourly payments is the
difference in the average hourly costs for regulating plants and
non-regulating plants, expressed in the following formula:
Hourly Charge = [MCW - (MCWO/HWO) x MCWH]/HOR
Where:
MCW = Summation of costs for regulating plants
MCWO = Summation of costs for non-regulating plants
HWO = Summation of hours for non-regulating plants
MCWH = Summation of hours for regulating plants
HOR = Summation of hours in the regulating mode for
regulating plants
The regulating OPERATING COMPANIES shall supply the AGENT an hourly
statement
Southern Company Services, Inc. Original Sheet No. 59
First Revised Rate Schedule FERC Number 138
of energy losses incurred in providing hydro regulating services. Such
statement should include sufficient detail to permit review and
verification by the AGENT. Data supporting energy loss determination and
dollar allowance for increased operating and maintenance expenditures of
hydraulic equipment shall be presented from time to time to the Operating
Committee for review.
Section 6.3 - Regulation by Pumped Storage Hydro Projects: It is understood
that pumped storage hydro projects owned by the OPERATING COMPANIES may
also be used for regulation of the integrated electric system. In such
event, the hourly charge for such regulation will be the same charge
derived under the formula contained in Section 7.2 hereof.
Section 6.4 - Provision for Increases in Cost Due to Hydro Scheduling:
Because the use of hydro resources for tie-line load control and frequency
regulation does not allow the hydro energy to be scheduled in the most cost
effective manner, less economic gains are achieved than would have been if
the hydro energy had been used to displace only the highest cost other
energy sources. The difference in actual displacement costs represents the
value of the lost economic opportunity by the owning OPERATING COMPANY by
such use of hydro energy, or the costs of providing higher cost energy. The
AGENT shall allocate such costs to all the OPERATING COMPANIES in
accordance with Peak-Period Load Ratios.
[END OF MANUAL]
Southern Company Services, Inc. First Revised Sheet No. 60
First Revised Rate Schedule FERC Number 138 superseding Original Sheet No. 60
ADDENDUM TO THE SOUTHERN COMPANY
SYSTEM INTERCOMPANY INTERCHANGE CONTRACT
In a transmittal dated February 18, 2000, SCSI described the formation
of a new Operating Company ("NewCo", subsequently named "Southern Power
Company") that, upon requisite regulatory approval from the Securities and
Exchange Commission, will aggregate into one business unit the same type of
wholesale resources that are currently being developed on a piecemeal basis by
the existing Operating Companies. The new company will be a full participant
in the IIC, and will share in the benefits and burdens under that arrangement
like any other Operating Company. By letter dated April 14, 2000, the Staff
asked for more information concerning the kinds of transactions that NewCo
will undertake, the role that NewCo will have in relation to the other
Operating Companies, and the effect of NewCo on the cost allocation provisions
in the IIC.
As explained in SCSI's supplemental filing letter dated May 8, 2000,
NewCo is being created to simplify resource planning and expedite decision
making among decentralized management groups. To this end, NewCo is expected
to develop and build new wholesale generation that would otherwise have been
developed by one or more of the existing Operating Companies.1 This new
generation can be used to meet the needs of wholesale customers in the
Southeast through bilateral arrangements and will also be made available to
the Pool for reserve
1 The current plan is for NewCo to develop and build new generation, but if
NewCo should later seek to be the owner of existing generation, the transfer of
any such existing units would be subject to all requisite regulatory approvals.
Southern Company Services, Inc. Substitute Original Sheet No. 61
First Revised Rate Schedule FERC Number 138 superseding Original Sheet No. 61
Issued by: Xxxxxxx X. XxXxxxx, Executive Vice Pres. Effective: April 18, 2000
Issued on: October 2, 2000 Filed to comply with order of the Federal Energy
Regulatory Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June
15, 2000, 91 FERC P. 61,259 and letter order issued September 27, 2000 sharing
and opportunity transactions (just as the other Operating Companies do today).
NewCo will not be engaged in any marketing activities. Rather, SCSI will
continue to perform wholesale marketing functions in its capacity as agent for
the Operating Companies of the Southern electric system (including NewCo). While
NewCo's units will be marketed by SCSI for long term bilateral sale in the
wholesale market, NewCo will not engage in transactions with the other Operating
Companies (other than those under the IIC) except to the extent that requisite
regulatory approvals are obtained from state retail commissions and/or this
Commission.
As noted in the Staff's letter, NewCo is being added as a full
participant in the IIC "to share the benefits and burdens like any other
Operating Company." This means that NewCo's units will be subject to the Pool's
operating, dispatch and reserve requirements. NewCo will also participate in
opportunity sales transactions on a PPLR basis.2 In like manner, NewCo will bear
its pro rata share of Pool purchases, as determined through the PPLR
calculation. In short, NewCo will share in the benefits and burdens of the IIC
and will participate in the wholesale markets -- just as if its generation had
been developed and built by one of the existing Operating Companies.
--------
2 Under the IIC, the Pool can engage in off-system opportunity transactions that
are actually served out of the least expensive generation then available in the
Pool. The Operating Companies whose units actually provide the generation are
compensated for the variable cost of the energy provided, with any resulting
"profits" to the Pool being shared among all IIC participants. In other words,
only the Pool can engage in opportunity transactions of a transient nature in
the shorter term markets (hourly, day ahead and week ahead) out of pool
resources; neither NewCo nor any of the other Operating Companies can use such
generation solely for its own benefit in those wholesale opportunity markets.
Issued by: Xxxxxxx X. XxXxxxx, Executive Vice-Pres. Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259
