EXHIBIT 10.39
MODIFICATION NO. 9
TO
INTER-COMPANY POWER AGREEMENT
DATED JULY 10, 1953
AMONG
OHIO VALLEY ELECTRIC CORPORATION,
APPALACHIAN POWER COMPANY (formerly
APPALACHIAN ELECTRIC POWER COMPANY),
THE CINCINNATI GAS & ELECTRIC COMPANY
COLUMBUS SOUTHERN POWER COMPANY (formerly
COLUMBUS AND SOUTHERN OHIO ELECTRIC COMPANY),
THE DAYTON POWER AND LIGHT COMPANY,
INDIANA MICHIGAN POWER COMPANY (formerly
INDIANA & MICHIGAN ELECTRIC COMPANY),
KENTUCKY UTILITIES COMPANY,
LOUISVILLE GAS AND ELECTRIC COMPANY,
MONONGAHELA POWER COMPANY,
OHIO EDISON COMPANY,
OHIO POWER COMPANY (formerly THE OHIO
POWER COMPANY),
PENNSYLVANIA POWER COMPANY,
THE POTOMAC EDISON COMPANY,
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY,
THE TOLEDO EDISON COMPANY, and
WEST PENN POWER COMPANY.
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Dated as of August 17, 1995
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MODIFICATION NO. 9
TO
INTER-COMPANY POWER AGREEMENT
THIS AGREEMENT dated as of the 17th day of August, 1995, by and among
OHIO VALLEY ELECTRIC CORPORATION (herein called "OVEC" or "Corporation"),
APPALACHIAN POWER COMPANY (herein called "Appalachian"), THE CINCINNATI GAS &
ELECTRIC COMPANY (herein called "Cincinnati"), COLUMBUS SOUTHERN POWER COMPANY
(formerly COLUMBUS AND SOUTHERN OHIO ELECTRIC COMPANY) (herein called
"Columbus"), THE DAYTON POWER AND LIGHT COMPANY (herein called "Dayton"),
INDIANA MICHIGAN POWER COMPANY (formerly INDIANA & MICHIGAN ELECTRIC COMPANY)
(herein called "Indiana"), KENTUCKY UTILITIES COMPANY (herein called
"Kentucky"), LOUISVILLE GAS AND ELECTRIC COMPANY (herein called "Louisville"),
MONONGAHELA POWER COMPANY (herein called "Monongahela"), OHIO EDISON COMPANY
(herein called "Ohio Edison"), OHIO POWER COMPANY (herein called "Ohio Power"),
PENNSYLVANIA POWER COMPANY (herein called "Pennsylvania"), THE POTOMAC EDISON
COMPANY (herein called "Potomac"), SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
(herein called "Southern Indiana"), THE TOLEDO EDISON COMPANY (herein called
"Toledo"), and WEST PENN POWER COMPANY (herein called "West Penn"), all of the
foregoing, other than OVEC, being herein sometimes collectively referred to as
the Sponsoring Companies and individually as a Sponsoring Company.
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W I T N E S S E T H T H A T
WHEREAS, Corporation and the United States of America have heretofore
entered into Contract No. AT-(40-1)-1530 (redesignated Contract No.
E-(40-1)-1530, later redesignated Contract No. EY-76-C-05-1530 and later
redesignated Contract No. DE-AC05-76OR01530), dated October 15, 1952, providing
for the supply by Corporation of electric utility services to the United States
Atomic Energy Commission (hereinafter called "AEC") at AEC's project near
Portsmouth, Ohio (hereinafter called the "Project"), which Contract has
heretofore been modified by Modification No. 1, dated July 23, 1953,
Modification No. 2, dated as of March 15, 1964, Modification No. 3, dated as of
May 12, 1966, Modification No. 4, dated as of January 7, 1967, Modification No.
5, dated as of August 15, 1967, Modification No. 6, dated as of November 15,
1967, Modification No. 7, dated as of November 5, 1975, Modification No. 8,
dated as of June 23, 1977, Modification No. 9, dated as of July 1, 1978,
Modification No. 10, dated as of August 1, 1979, Modification No. 11, dated as
of September 1, 1979, Modification No. 12, dated as of August 1, 1981,
Modification No. 13, dated as of September 1, 1989, Modification No. 14, dated
as of January 15, 1992, 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
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functions, including the procurement of electric utility services for the
Project, were transferred to and vested in the Administrator of Energy Research
and Development; and
WHEREAS, pursuant to the Department of Energy Organization Act, on
October 1, 1977, all of the functions vested by law in the Administrator of
Energy Research and Development or the Energy Research and Development or the
Energy Research and Development Administration were transferred to, and vested
in, the Secretary of Energy, the statutory head of the Department of Energy
(hereinafter called "DOE"); and
WHEREAS, the parties hereto have entered into a contract, herein called
the "Inter-Company Power Agreement," dated July 10, 1953, governing, among other
things, (a) the supply by the Sponsoring Companies of Supplemental Power in
order to enable Corporation to fulfill its obligations under the DOE Power
Agreement, and (b) the rights of the Sponsoring Companies to receive Surplus
Power (as defined in the Agreement identified in the next clause in this
preamble) as may be available at the Project Generating Stations and the
obligations of the Sponsoring Companies to pay therefor; and
WHEREAS, the Inter-Company Power Agreement has heretofore been amended
by Modification No. 1, dated as of June 3, 1966, Modification No. 2 dated as of
January 7, 1967, Modification No. 3, dated as of November 15, 1967, Modification
No. 4, dated as of November 5, 1975, Modification No. 5, dated as of September
1,
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1979, Modification No. 6, dated as of August 1, 1981, Modification No. 7, dated
as of January 15, 1992, and Modification No. 8, dated as of January 19, 1994
(said contract so amended and as modified and amended by this Modification No. 9
being herein and therein sometimes called the "Agreement"); and
WHEREAS, OVEC and the Sponsoring Companies desire to enter into this
Modification No. 9 as more particularly hereinafter provided;
NOW, THEREFORE, the parties hereto agree with each other as follows:
1. Delete SUBSECTION 6.023 and substitute therefor the following:
6.023 Determine the total energy charge to be billed as DOE Emergency
Energy (as defined in SUBSECTION 6.037) for such month, such charge to
be an amount equal to the product of the total net charges for such
month at the project generating stations to Account 703 (Fuel) of the
Uniform System of Accounts, and the ratio of (a) the billing kWh of DOE
Emergency Energy for such month plus the transmission losses thereon
from the 345 kV busses of the project generating stations to the point
of delivery to (b) the total net kWh generated at the project
generating stations during such month corrected for losses to the 345
kV busses thereof. Such losses shall be determined by such methods and
procedures as may be mutually agreed upon.
2. Insert after SUBSECTION 6.023 a new SUBSECTION 6.024 as follows:
6.024 Determine for such month the difference between the total cost of
fuel as described in subsection 6.021 above and the sum of (a) the
total energy charge to be billed DOE as described in subsection 6.022
above and (b) the energy
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charge to be billed as DOE Emergency Energy as described in subsection
6.023 above. For the purposes hereof the difference so determined shall
be the fuel cost allocable for such month to the total kilowatt-hours
of energy generated at the Project Generating Stations for the supply
of Surplus Energy. Each Sponsoring Company shall pay Corporation, for
such month, an amount equal to (a) an amount obtained by multiplying
the billing kilowatt-hours of Surplus Energy availed of by such
Sponsoring Company during such month by the average station heat rate
of the Project Generating Stations times the average cost per Btu
(determined in a uniform manner for all Sponsoring Companies in
conformity with any applicable requirements of Account 703 (Fuel) of
the Uniform System of Accounts) of all fuel consumed by said Sponsoring
Company in its own generating stations, both averages to be computed in
respect of the month next preceding that for which payment is being
made, plus (b) its Power Participation Ratio of the excess, if any, for
such month of the fuel costs of the Corporation allocable to the total
kilowatt-hours of energy generated at the Project Generating Stations
for the supply of Surplus Energy over the aggregate of the amounts
computed with respect to all Sponsoring Companies under (a) above,
minus (c) its Power Participation Ratio of the excess, if any, for such
month of the aggregate of the amounts computed with respect to all
Sponsoring Companies under (a) above over the fuel costs of the
Corporation allocable to the total kilowatt-hours of energy generated
at the Project Generating Stations for the supply of Surplus Energy.
3. Insert after SUBSECTION 6.036 a new SUBSECTION 6.037 as follows:
6.037 DOE EMERGENCY POWER
In the event that the power and energy available to DOE's
uranium enrichment facility near Paducah, Kentucky is insufficient to
prevent or alleviate an emergency at such facility, at the request of
DOE, and provided the Sponsoring Companies agree to release their
rights to receive from Corporation power and energy to which they would
otherwise have been entitled, Corporation may in its sole discretion
agree to make available such power and energy for DOE's Paducah
Facility (such power being herein called "DOE Emergency Power" and the
energy associated therewith being called "DOE Emergency Energy").
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The aggregate of the kWh of DOE Emergency Energy scheduled for
all the hours of a month shall be the "Scheduled kWh of DOE Emergency
Energy" for such month. To the Scheduled kWh of DOE Emergency Energy so
computed for such month shall be added the number of kWh of
transmission losses applicable thereto computed by such methods and
procedures as may be mutually agreed upon, and the sum so computed is
herein called the "Billing kWh of DOE Emergency Energy."
Corporation will pay to each Sponsoring Company for DOE
Emergency Power during any month an amount equal to an emergency power
surcharge ("DOE Emergency Power Surcharge") which shall be determined
based on each Sponsoring Company's hourly net costs per kilowatt of
reducing load or purchasing power from alternative sources, which costs
are attributable to the provision of DOE Emergency Power and/or DOE
Emergency Energy. Corporation and Sponsoring Companies acknowledge that
they may not know until after the fact the amount of any DOE Emergency
Power Surcharge and that any estimates thereof provided by Sponsoring
Companies are not binding.
In order that DOE Emergency Power and DOE Emergency Energy may
be delivered to DOE's uranium enrichment facility in Paducah, Kentucky,
such power and energy may be sold to intervening entities which may
resell such power and energy for ultimate delivery to DOE.
4. This Modification No. 9 shall become effective at 12:00 o'clock
Midnight on the day on which Corporation shall advise the other parties to this
Modification No. 9 (to be later confirmed in writing) that all conditions
precedent to the effectiveness of this Modification No. 9 shall have been
satisfied.
5. The Inter-Company Power Agreement, as modified by Modifications
Nos. 1, 2, 3, 4, 5, 6, 7 and 8 and as hereinbefore provided, is hereby in all
respects confirmed.
6. The Modification No. 9 may be executed in any number of copies and
by the different parties hereto on separate
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counterparts, each of which shall be deemed an original but all of which
together shall constitute a single agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Modification
No. 9 as of the day and year first written above.
OHIO VALLEY ELECTRIC CORPORATION
BY: _____________________________________
APPALACHIAN POWER COMPANY
BY: _____________________________________
THE CINCINNATI GAS & ELECTRIC COMPANY
BY: _____________________________________
COLUMBUS SOUTHERN POWER COMPANY
BY: _____________________________________
THE DAYTON POWER AND LIGHT COMPANY
BY: _____________________________________
INDIANA MICHIGAN POWER COMPANY
BY: _____________________________________
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KENTUCKY UTILITIES COMPANY
BY: _____________________________________
LOUISVILLE GAS AND ELECTRIC COMPANY
BY: _____________________________________
MONONGAHELA POWER COMPANY
BY: _____________________________________
OHIO EDISON COMPANY
BY: _____________________________________
OHIO POWER COMPANY
BY: _____________________________________
PENNSYLVANIA POWER COMPANY
BY: _____________________________________
THE POTOMAC EDISON COMPANY
BY: _____________________________________
SOUTHERN INDIANA GAS AND ELECTRIC
COMPANY
BY: _____________________________________
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THE TOLEDO EDISON COMPANY
BY: _____________________________________
WEST PENN POWER COMPANY
BY: _____________________________________
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