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EXHIBIT 10.7
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Modification No. 16
to
POWER AGREEMENT
Dated October 15, 1952
between
OHIO VALLEY ELECTRIC CORPORATION
AND
UNITED STATES OF AMERICA
Acting By and Through the
SECRETARY OF ENERGY,
the statutory head of the
DEPARTMENT OF ENERGY
Dated as of
January 1, 1998
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THIS MODIFICATION NO. 16, dated as of the 1st day of January, 1998, by
and between OHIO VALLEY ELECTRIC CORPORATION, a corporation organized under the
laws of the State of Ohio (hereinafter called the "Corporation"), and the UNITED
STATES OF AMERICA (hereinafter sometimes called the "Government"), acting by and
through the SECRETARY OF ENERGY, the statutory head of the DEPARTMENT OF ENERGY
(hereinafter called "DOE");
WITNESSETH THAT
WHEREAS, Corporation and the Government have heretofore entered into a
contract dated October 15, 1952, providing for the supply by Corporation of
electric utility services to the United States Atomic Energy Commission
(hereinafter called "AEC") at AEC's project near Portsmouth, Ohio (hereinafter
called the "Project"), which contract has heretofore been modified by
Modification No. 1, dated July 23, 1953, Modification No. 2, dated as of March
15, 1964, Modification No. 3, dated as of May 12, 1966, Modification No. 4,
dated as of January 7, 1967, Modification No. 5, dated as of August 15, 1967,
Modification No. 6, dated as of November 15, 1967, Modification No. 7, dated as
of November 5, 1975, Modification No. 8, dated as of June 23,
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1977, Modification No. 9, dated as of July 1, 1978, Modification No. 10, dated
as of August l, 1979, Modification No. 11, dated as of September 1, 1979,
Modification No. 12, dated as of August 1, 1981, Modification No. 13, dated as
of September 1, 1989, Modification No. 14, dated as of January 15, 1992 and
Modification No. 15, dated as of February 1, 1993 (said contract, as so
modified, is hereinafter called the "DOE Power Agreement"); and
WHEREAS, pursuant to the Energy Reorganization Act of 1974, the AEC was
abolished on January 19, 1975, and certain of its functions, including the
procurement of electric utility services for the Project, were transferred to
and vested in the Administrator of Energy Research and Development; and
WHEREAS, pursuant to the Department of Energy Organization Act, all of
the functions vested by law in the Administrator of Energy Research and
Development or the Energy Research and Development Administration were
transferred to, and vested in, the Secretary of Energy on October 1, 1977; and
WHEREAS, pursuant to the Energy Policy Act of 1992, the United States
Enrichment Corporation (hereinafter called "USEC") was established to lease from
DOE its uranium enrichment facilities beginning July 1, 1993; and the DOE was
authorized
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by such Act to continue to receive electricity under the DOE Power Agreement and
to resell it to USEC; and
WHEREAS, pursuant to East Central Area Reliability Group ("ECAR")
Document No. 2, entitled DAILY OPERATING RESERVE, as revised August 8, 1996
("ECAR Document No. 2"), Corporation is required to have available spinning
reserve equal to a percentage of its internal load as well as supplemental
reserve equal to a percentage of its internal load; and
WHEREAS, Corporation and DOE desire to amend the DOE Power Agreement
further as hereinafter provided;
NOW, THEREFORE, the parties hereto do hereby agree as follows:
1. Article II is amended by inserting, after Section 2.11, new Section
2.12, as follows:
SECTION 2.12
1. SPINNING RESERVE means unloaded generation which is
synchronized and ready to serve additional demand within ten minutes.
2. ECAR RESERVE SHARING PERIOD means any period of time
during which any control area within ECAR ("ECAR Member") is
experiencing a system contingency which requires implementation of
ECAR's reserve sharing procedures.
3. ECAR EMERGENCY ENERGY means energy sold by Corporation
from its Spinning Reserve during an ECAR Reserve Sharing Period.
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4. OVEC EMERGENCY ENERGY means energy purchased by
Corporation during an ECAR Reserve Sharing Period pursuant to the
provisions of ECAR Document No. 2.
5. EMERGENCY ENERGY PAYMENTS. In the event that
Corporation is required to purchase, and pay other entities for, OVEC
Emergency Energy, DOE shall pay to Corporation the full amount paid by
Corporation for OVEC Emergency Energy up to the DOE contract demand at
the time of such purchase; provided, however, that DOE shall receive a
credit for any payments which Corporation receives for ECAR Emergency
Energy. Bills and credit memoranda shall be issued monthly or quarterly,
depending on the billing and payment practices of the other parties
involved.
6. INTERNAL LOAD. In the event that the Corporation begins
to serve internal load in addition to the Project, Corporation and DOE
agree to make a good faith effort to negotiate an amendment to Section
2.12.5 in order to reallocate fairly and accurately the costs and
benefits of reserve sharing. For purposes of this paragraph, internal
load means the DOE load, metered as of the 345 kV Project busses, plus
OVEC's system losses.
2. This Modification No. 16 to the DOE Power Agreement shall become
effective at 12:01 o'clock midnight on the day on which Corporation advises DOE
to the effect that:
All applicable requirements as to approval by or filings
with regulatory agencies or other governmental bodies having
jurisdiction in respect of the transactions constituting the subject
matter of this Modification No. 16 (including expiration of any
specified period after the date of any filing) have been complied with
and all requisite approvals are in full force and effect and none is the
subject of attack on appeal by direct proceeding or otherwise, and
(except to the extent that Corporation shall waive such condition) any
requisite approvals have become final and not subject to judicial review
in any court.
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3. The DOE Power Agreement, as modified by Modifications No. l through
No. 15, both inclusive, and by this Modification No. l6, is hereby in all
respects confirmed.
IN WITNESS WHEREOF, the parties hereto have executed this Modification
No. 16 as of the date and year first above written.
OHIO VALLEY ELECTRIC CORPORATION
By /s/
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President
UNITED STATES OF AMERICA
By /s/
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Authorized Contracting Officer
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