EXHIBIT B-2
POWER PURCHASE AGREEMENT
BETWEEN
ENTERGY NUCLEAR VERMONT YANKEE, LLC
AND
VERMONT YANKEE NUCLEAR POWER CORPORATION
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POWER PURCHASE AGREEMENT
This POWER PURCHASE AGREEMENT entered into this 6th day of September,
2001, by and between Entergy Nuclear Vermont Yankee, LLC, a Delaware limited
liability company having a principal place of business at 000 Xxxxxxxx Xxxxxx,
Xxxxx Xxxxxx, XX 00000 (hereinafter referred to as "Seller"), and Vermont Yankee
Nuclear Power Corporation, a Vermont corporation having its principal place of
business at 000 Xxx Xxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxx 00000, (hereinafter
referred to as "Vermont Yankee" or "Company").
WHEREAS, concurrently with the execution of this Agreement, Seller and
Vermont Yankee are entering into a Purchase and Sale Agreement (the "P&S
Agreement") of even date herewith, under which Vermont Yankee agrees to sell and
Seller agrees to purchase, on the terms and subject to the conditions set forth
therein, the Vermont Yankee Nuclear Power Plant, as described therein (the
"Facility"), and certain related assets, and to assume certain liabilities and
obligations; and
WHEREAS, the consummation of the purchase of the Facility under the P&S
Agreement (the "Closing") is subject to, among other things, the execution,
delivery and effectiveness of this Agreement between Seller and Vermont Yankee,
NOW THEREFORE, in consideration of these premises, the mutual agreements
set forth herein and other good and valuable consideration, and intending to be
legally bound, the Parties agree as follows:
ARTICLE 1. Condition Precedent
It is a condition precedent to the obligations of Seller and Vermont
Yankee under the P&S Agreement that the Closing shall have occurred and that all
regulatory approvals required for this Agreement's initial effectiveness shall
have been obtained. The Parties have agreed in the P&S Agreement to use
Commercially Reasonable Efforts (as defined in the P&S Agreement) to obtain all
such regulatory approvals.
ARTICLE 2. Definitions
When used with initial capitalization, whether in the singular or the
plural, the following terms shall have the meanings set forth below.
(a) "Agreement": This document, including its appendices, as amended
from time to time.
(b) "Actual Monthly Energy": The total amount of Energy produced at the
Facility that is reported by Seller to ISO-NE for the calendar month
being billed.
(c) "Adjustment Factor": Defined in Article 8(b).
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(d) "Affiliate": Has the meaning set forth in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as
amended.
(e) "Base Price": The purchase price expressed in $/Mwh as set forth in
Schedule D for the applicable month.
(f) "Billing Date": Each date on which the Seller renders a xxxx to
Vermont Yankee pursuant to Article 7(c).
(g) "Business Day": Means any day other than Saturday, Sunday and any
day on which banking institutions in the State of Vermont are
authorized by law or other governmental action to close.
(h) "Capability Audit": The procedure used pursuant to the NEPOOL
Agreement to determine the Summer Net Capability and the Winter Net
Capability of the Facility as currently set forth in the NEPOOL
standards.
(i) "Closing Date": Has the meaning defined in the P&S Agreement.
(j) "Company's Entitlement": The percentage entitlement of the Facility
Product allocated to the Company pursuant to this Agreement, which
is equal to the sum of the Sub-Entitlements and, when applicable, as
adjusted pursuant to Article 8(b) for Uprates.
(k) "Energy": The actual hourly electricity production of the Facility
reduced for Station Service Use, transformer losses and generator
lead losses, where such electric energy is delivered at the Delivery
Point in the form of 3-phase, 60 cycle, alternating current at a
nominal voltage of 345,000 volts.
(l) "Delivery Point": The point which is the Facility's interconnection
with NEPOOL PTF and which is designated as the "Producer Delivery
Point", as indicated on the diagram attached hereto as Schedule A.
(m) "Delivery Term": Has the meaning set forth in Article 4(a).
(n) "Facility": The Vermont Yankee Nuclear Power Station, a 540 MW
nuclear powered generating unit located in Vernon, Vermont.
(o) "Facility Product": The Energy, Installed Capability and all other
associated ancillary services and NEPOOL products, including without
limitation, reactive power, for which a NEPOOL market exists or is
established and in operation during the term of this Agreement,
actually produced by, or available from, the Facility in any hour.
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(p) "FERC": The Federal Energy Regulatory Commission, and any successor
thereto.
(q) "Good Utility Practices": Means any of the practices, methods and
activities approved by a significant portion of the electric utility
industry in the United States as good practices applicable to
nuclear generating facilities of similar design, size and capacity
during the relevant time period or any of the practices, methods or
activities which, in the exercise of reasonable judgment by a
prudent nuclear operator in light of the facts known at the time the
decision was made, could have been expected to accomplish the
desired result at a reasonable cost consistent with good business
practices, reliability, expedition and applicable law and assuring
safety and protection of the public. Good Utility Practices are not
intended to be limited to the optimal practices, methods or acts to
the exclusion of all others, but rather to be practices, methods or
acts generally accepted in the electric utility industry.
(r) "Installed Capability": The Winter Net Capability during the Winter
Period and the Summer Net Capability during the Summer Period.
(s) "ISO-NE": The Independent System Operator of New England provided
for in the NEPOOL Agreement, or its successor.
(t) "Market Price" As of a Billing Date, the sum of (a) the actual
average hourly NEPOOL spot clearing price for electric energy for
all hours of the 12 month period immediately prior to such Billing
Date as published by ISO-NE on its website (xxx.xxx-xx.xxx) (or some
other ISO-NE source mutually acceptable to Vermont Yankee and
Seller) plus (b) the actual clearing price for Installed Capability
for all hours of the 12 month period (or such shorter period as may
be practicable if such price is not published for a full 12 month
period at the time of calculation) immediately prior to such Billing
Date as published by ISO-NE, stated is $/MWh. In the event there is
no clearing price for Installed Capability, the Market Price shall
be the product of (x) the amount set forth in clause (a) of the
preceding sentence and (y) 110%. In all cases, if NEPOOL and/or
ISO-NE implement a two settlement system for the energy market, the
hourly NEPOOL spot clearing price for electric energy will be
replaced by the clearing price for electric energy in the Day-Ahead
Market Settlement, as defined in the NEPOOL Agreement, if a
Day-Ahead Market Settlement exists; otherwise, it will be the
Real-Time Clearing Price for electric energy in the Real-Time
Market, both as defined in the Restated NEPOOL Agreement, if a
Day-Ahead Market Settlement does not exist. If NEPOOL and/or ISO-NE
implements a Congestion Management System, the hourly NEPOOL spot
clearing price for electric energy will be replaced by Nodal Energy
Prices in NEPOOL applicable to the Facility.
(u) "Maximum Monthly Amount": The monthly amounts set forth on Schedule
B.
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(v) "Monthly NEPOOL Clearing Price": The average hourly NEPOOL spot
clearing price for electric energy for a given month as published by
ISO-NE in accordance with NEPOOL Standards.
(w) "NEPOOL": The New England Power Pool, established by the NEPOOL
Agreement, or its successor.
(x) "NEPOOL Agreement": The agreement establishing NEPOOL, dated
September 1, 1971, as amended by the Restated NEPOOL Agreement filed
with FERC on December 31, 1996, as finally approved by FERC and as
further amended and restated from time to time.
(y) "NEPOOL Standards": All rules and regulations of NEPOOL or ISO-NE,
including without limitation all Criteria, Rules and Standards
(CRS), NEPOOL Automated Billing System Procedures (NABS), Operating
Procedures (OP), and Market Rules (MR) issued or adopted by NEPOOL,
ISO-NE and its satellite agencies, or their successors, in each case
as amended from time to time and all successor regulations, rules
and standards.
(z) "NRC": The Nuclear Regulatory Commission, and any successor thereto.
(aa) "Party: Seller or Company and its respective successors or assigns.
(bb) "PTF" or "Pool Transmission Facilities": Have the meaning set forth
in the NEPOOL Agreement.
(cc) "RFO 25": The refueling outage number RFO 25 for the Facility
currently scheduled to commence in October 2005, including the
refueling of the Facility and the performance of certain
maintenance, inspection and other work in connection therewith.
(dd) "Reconciliation Factor": Defined in Article 7(b).
(ee) "Sub-Entitlement": The percentage entitlement allocated to each
Sub-Purchaser of the Facility Product as set forth in Schedule C.
(ff) "Sub-Purchasers": Collectively, the entities listed in Schedule C
that are purchasing a portion of the Company Entitlement from
Vermont Yankee, and "Sub-Purchaser" shall mean, individually, each
such entity listed in Schedule C.
(gg) "Station Service Use": All of the Energy and other Facility Product
recognized by NEPOOL used on-site to operate the Facility, including
cooling tower operations.
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(hh) "Summer Net Capability (Capability)": The Maximum Claimed
Capability, as defined in NEPOOL Market Rules and Procedures,
Section 11, of the Facility during the Summer Period, expressed in
kilowatts, and as determined by Capability Audit, exclusive of the
capacity required for Station Service Use.
(ii) "Summer Period" shall have the meaning set forth in the NEPOOL
Market Rules and Procedures, Section 11.
(jj) "Uprate": Has the meaning set forth in Article 8(a).
(kk) "Winter Net Capability (Capability)": The Maximum Claimed
Capability, as defined in NEPOOL Market Rules and Procedures,
Section 11, of the Facility during the Winter Period, expressed in
kilowatts, and as determined by Capability Audit, exclusive of the
capacity required for Station Service Use.
(ll) "Winter Period" shall have the meaning set forth in the NEPOOL
Market Rules and Procedures, Section 11.
ARTICLE 3. Purchase and Sale of Facility Product; Sub-Entitlements; Maintenance
and Capability Audits
(a) Seller agrees to sell and to deliver and Company agrees to purchase,
and to accept delivery of, Company's Entitlement at the Delivery Point during
the Delivery Term, for resale to the Sub-Purchasers. Title to and risk of loss
with regard to the Facility Product to be purchased by the Company hereunder
shall transfer from Seller to the Company at the Delivery Point. Seller shall be
responsible for any costs or charges imposed on or associated with the Product
or its delivery of the Product up to the Delivery Point. Company shall be
responsible for any costs or charges imposed on or associated with the Product
or its receipt at and from the Delivery Point.
(b) Seller shall have the right to sell to third parties any portion of
the Facility Product not included in Company's Entitlement.
(c) Seller shall use Good Utility Practices in all aspects of the
management and operation of the Facility. Seller shall use commercially
reasonable efforts to maintain the Facility's Installed Capability at the level
demonstrated by the most recent Capability Audit as of the date of the P&S
Agreement and use its commercially reasonable efforts to make Facility Product
available to Company on an ongoing basis, it being understood that Seller shall
not be required to contract for, or make arrangements to obtain, Facility
Product or any other product from any source other than the Facility in order to
fulfill its obligations hereunder, and, subject to the foregoing, shall not be
liable for any damages if Facility Product is not available; provided, however,
that if applicable NEPOOL Standards or, in Seller's reasonable judgment, the
physical operation of the Facility requires Seller to withhold from Vermont
Yankee a specific quantity of ancillary services or Energy, then Seller may
withhold such amount of those products at no cost
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and will provide the remaining amounts to Vermont Yankee and provided that at no
time will Seller be required by this Agreement to change the Facility's
operation, to operate the Facility beyond its normal rated capabilities, or
change the Mwh output in order to provide ancillary services. If for any reason
Seller does not generate power at the Facility, Seller has no obligation to sell
or deliver to Vermont Yankee the Company's Entitlement or to obtain replacement
power.
(d) Periodically after the Closing Date, Seller shall undergo Capability
Audits pursuant to NEPOOL Standards to demonstrate and audit the Summer Net
Capability and/or the Winter Net Capability of the Facility. The Capability
Audit shall be performed pursuant to NEPOOL Standards or standards mutually
agreed to by the Parties if NEPOOL ceases to establish such standards. Seller
agrees to provide to Company the results of the demonstrations and audits
(NX-17s and supporting material).
(e) Prior to making an Uprate as provided in Article 8(a), Seller agrees
that it will cause the Facility to be operated within the current configuration
of the Facility and the thermal limitations of 1593 megawatts thermal that is
currently applicable to the Facility under its NRC Operating License.
(f) Seller shall schedule maintenance activities in accordance with NEPOOL
Standards, ISO-NE requirements and the requirements of any other entity with
authority over the Facility's maintenance. In order to allow the Company and the
Sub-Purchasers or their assignees ample time to make alternative arrangements,
as soon as practically possible, Seller shall provide, by telephone or telecopy
to Company's designated agent, advance notice of planned maintenance activities,
planned outages, unplanned outages or any other event that reasonably could be
expected to affect output of Facility Product, to reduce the Facility's capacity
or to result in any downrating and to the extent reasonably practicable shall
coordinate such events with the Company and the Sub-Purchasers or their
assignees.
(g) Company shall reimburse Seller for transmission charges, if any, as
assessed by the ISO-NE, NEPOOL or Vermont Electric Power Company, Inc. for the
transmission of Energy from the Delivery Point to the Company Delivery Point, as
those points are indicated on Schedule A.
ARTICLE 4. Term, Regulatory Approvals, Early Termination
(a) The obligations of the Parties under this Agreement shall commence
with the first hour of the day that is the Closing Date and, subject to the
termination provisions set forth in this Agreement, shall continue through 2400
Eastern Standard Time or Eastern Daylight Savings Time, as applicable, on March
21, 2012 (the "Delivery Term"). Provisions of this Agreement shall remain in
effect after termination hereof to the extent necessary or appropriate to give
full effect thereto, including Article 9 and provisions necessary to provide for
final xxxxxxxx, billing adjustments, and payments.
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(b) Notwithstanding any provision hereof to the contrary, Seller may
permanently retire the Facility upon six (6) months prior written notice to
Company (unless notice of that duration is not commercially feasible under the
circumstances, in which case Seller shall give such notice as is commercially
feasible under the circumstances). This agreement will terminate at the time
specified in such notice, subject to the last sentence of clause (a) above.
(c) Company has the option to negotiate with Seller for a mutually
agreeable release from all or part of the Company's obligations to purchase
power hereunder first for an effective date no earlier than February 28, 2005
and again for any remaining balance effective no earlier than December 31, 2007
(each an "Exercise Date") by giving written notice to Seller at least 180 days
prior to the applicable Exercise Date, specifying the amount of Energy in
portions that correspond to individual Sub-Entitlements it desires to terminate.
During such 180 day period, the parties shall negotiate in good faith the terms
of such mutually agreeable release. The effectiveness of any release entered
into pursuant to this Article 4(c) shall be subject to the receipt by the
Company and the Seller of any necessary regulatory approvals, which shall be
obtained at each Party's own expense.
ARTICLE 5. Purchase Price for Facility Product
(a) Company shall pay Seller monthly (on a $/Mwh basis) for the Company's
Entitlement a purchase price determined according to the following formula:
TMP(t) = (CE(t) x BP(t) x AME(t)) + (CP(t) (CE(t) x D(t)))
where:
CE(t) = Company's Entitlement for the month (t) in percent, as
adjusted pursuant to Article VIII.
TMP(t) = Total payment price due in month (t).
BP(t) = The Base Price for the applicable month in $/Mwh.
AME(t) = The Actual Monthly Energy (up to but not to exceed the
Maximum Monthly Amount set forth on Schedule B, as
adjusted) in the month (t) expressed in megawatthours.
D(t) = Actual Monthly Energy for the month (t) in excess of the
Maximum Monthly Amount.
CP(t) = Monthly NEPOOL Clearing Price for the month (t).
provided, however, that beginning on the first Billing Date after the end of the
RFO 25 refueling outage (i.e., approximately October 2005) and on each Billing
Date thereafter, if the Market
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Price as of the end of the month to which the xxxx to be rendered on such
Billing Date relates is less than 95% of the Base Price for such month (as
determined by reference to the table in Schedule D hereto), then the Base Price
for such month to be used in the above formula shall be adjusted to be an amount
equal to such Market Price multiplied by 105% (but the Base Price as adjusted
hereby for any month shall not in any event exceed the relevant Base Price for
such month set forth in Schedule D hereto).
(b) Notwithstanding any future practice of NEPOOL (or any other or
successor pooling or market arrangement in the New England region) that may
create separate stated prices for Energy, Installed Capability or any other
associated ancillary services, including without limitation, reactive power,
Vermont Yankee shall not be required to pay charges for such products or
services separate from or in addition to the purchase price set forth in Article
5(a) (as from time to time adjusted as provided therein) despite any such future
practice.
ARTICLE 6. Dispatch
(a) Seller shall make the Facility available for dispatch by ISO-NE.
Seller, or its agent, shall submit all bids for the Facility to the ISO-NE such
that the Facility will be dispatched in all hours in a given month at its full
capacity as a self-scheduled unit.
(b) Each Party shall comply with all NEPOOL Standards applicable to it.
(c) Seller shall promptly submit this Agreement into the ISO-NE market
system and shall file all other required forms to ISO-NE with a copy to
Company's designated agent.
(d) Seller's and Company's respective designated agents shall mutually
agree to any revision to the existing ISO-NE NX-12B Forms to be submitted to
ISO-NE in accordance with the provisions of the NEPOOL Agreement and NEPOOL
Standards.
(e) Whenever Company's system or the systems with which it is directly
interconnected experience an emergency, as designated by the affected utility,
or whenever it is necessary to aid in the restoration of service on the systems
with which Company or a Sub-Purchaser is directly or indirectly interconnected,
or, whenever requested by ISO-NE, Seller or its designee shall curtail or
interrupt the delivery of all or a portion of the production of electricity at
the Facility provided such curtailment or interruption shall continue only for
as long as reasonably necessary to deal with the emergency.
(f) Whenever Seller's Facility experiences an emergency, Seller or its
designee shall have the right to curtail or interrupt all or a portion of
Seller's obligation hereunder, provided such curtailment or interruption shall
continue only for so long as reasonably necessary to deal with the emergency,
and provided Seller promptly notifies Company's designated agent of the
occurrence of such an emergency.
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ARTICLE 7. Billing, Meter Reading; Financial Assurance
(a) Seller shall deliver Company's Entitlement to the Delivery Point.
Seller is responsible for maintaining metering and telemetering equipment at the
Facility, as follows. The metering equipment shall be capable of registering and
recording instantaneous and time-differentiated electric energy and other
related data from the Facility, and shall comply with the requirements of
NEPOOL's Standards as may be issued or revised from time to time. The
telemetering shall be capable of transmitting such data to such reasonable
location(s) specified by Company or its designated agent. The Company represents
and warrants that as of the Closing Date the metering and telemetering equipment
at the Facility will meet the requirements of this Article 7(a).
(b) Each day, Seller shall be required to provide Company's designated
agent with hourly-integrated megawatt hour readings for each hour of the
previous day. Seller shall record hourly meter readings and log sheets and, upon
the request of Company or its designated agent, provide copies of daily meter
recordings and log sheets by electronic means with hard copy back up. All
metering equipment installed shall be routinely tested in accordance with Good
Utility Practices. Any meter tested and found to register within one-half of one
percent (0.5%) of the comparative standard mutually agreed upon by Seller and
the Company shall be considered correct and accurate. If at any time, any
metering equipment is found to be defective or inaccurate, Seller shall cause
such metering equipment to be made accurate or replaced at Seller's expense.
Company shall have the right to request meter testing for accuracy at any time
with reasonable advance notice. If such testing shows that tested meters are
accurate within one-half of one percent (0.5%), then Company shall be
responsible for the costs of such testing. If such testing shows a greater
discrepancy, then Seller shall be responsible for the costs of such testing.
Notwithstanding clause (c) below, in such event, a billing adjustment shall be
made by Seller correcting all measurements made by the defective meter for
either: (i) the actual period during which inaccurate measurements were made, if
such period is determinable to the mutual satisfaction of Company or its
designated agent and Seller; or (ii) if such period is not determinable, for a
period equal to one-half the time elapsed since the prior test, but in no event
greater than six months (the "Reconciliation Factor").
(c) Seller shall submit, by telecopy or other agreeable same day delivery
mechanism, an invoice for all applicable Article 5 charges to Company within 10
days after the end of each calendar month, and such invoice shall include the
time and date of the meter readings. This invoice shall include such reasonable
detail to enable Company to determine the basis for the charges of such month.
Seller and Company agree to provide additional information reasonably requested
by the other Party as necessary for billing purposes or data verification.
Invoices may be rendered on an estimated basis. Each invoice shall be subject to
adjustment for any errors in arithmetic, computing, estimating or otherwise.
Seller and Company shall include any such invoicing adjustments as promptly as
practicable.
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(d) All payments shown to be due on such invoice, except amounts in
dispute, shall be due and payable by wire transfer per instructions on the
invoice on or before the later of the twentieth (20th) day of each month, or the
tenth (10th) day after receipt by the Company of the invoice or, if such day is
not a Business Day, then on the next Business Day (the "Due Date").
(e) Any undisputed amounts unpaid after the Due Date shall bear interest
at a rate equal to the Prime Rate (as published in The Wall Street Journal) then
in effect on the Due Date, compounded on a monthly basis. Company may dispute
all or any part of any invoice by written notification to Seller. All amounts
paid by Company which are subsequently determined to have been improperly
invoiced by Seller under this Agreement shall be subject to refund with interest
at a rate equal to the Prime Rate (as published in The Wall Street Journal) then
in effect on the Due Date, compounded on a monthly basis. The Company may, in
good faith, dispute the correctness of any invoice or any adjustment to an
invoice, rendered under this Agreement or adjust any invoice for any arithmetic
or computational error within twelve (12) months of the date the invoice, or
adjustment to an invoice, was rendered. In the event an invoice or portion
thereof, or any other claim or adjustment arising hereunder, is disputed,
payment of the undisputed portion of the invoice shall be required to be made
when due, with notice of the objection given to the other party. Any invoice
dispute or invoice adjustment shall be in writing and shall state the basis for
the dispute or adjustment. Payment of the disputed amount shall not be required
until the dispute is resolved. Upon resolution of the dispute, any required
payment shall be made within two (2) Business Days of such resolution along with
interest accrued at the Prime Rate (as published in The Wall Street Journal),
compounded on a monthly basis.
(f) Seller shall keep complete and accurate records and meter readings of
its operations and shall maintain such data for a period of at least one (1)
year after invoice for the final billing is rendered. Company shall have the
right at its own expense, upon five (5) business days prior notice, during
normal business hours, to examine and inspect all such records and meter
readings in so far as may be necessary for the purpose of ascertaining the
reasonableness and accuracy of all relevant data, estimates or statements of
charges submitted to it hereunder but shall not impair or interfere with the
operation of the Facility owned by Seller.
(g) If Seller is unable, at its sole discretion, to obtain such
comprehensive financial information as is reasonably required to evaluate
creditworthiness with respect to Vermont Yankee, including but not limited to,
annual reports containing audited consolidated financial statements and other
information obtained through the public domain, Vermont Yankee shall upon thirty
(30) days written notice deliver such financial information to Seller. Upon the
commercially reasonable request of Vermont Yankee, Seller shall use commercially
reasonable efforts to protect the confidentiality of the information disclosed
hereunder.
(h) If Seller has commercially reasonable grounds for insecurity
(determined in accordance with commercial standards as used in Section 2-609 of
the Vermont Uniform Commercial Code) concerning the ability of one or more of
the Sub-Purchasers to pay for its Sub-Entitlement for any billing period, then
Seller may provide Vermont Yankee with written
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notices requesting adequate assurance ("Adequate Assurance") of due performance
of the payment obligations of such Sub-Purchaser(s) for the respective portions
of the Company's Entitlement. Upon receipt of such notice, Vermont Yankee shall
have fifteen (15) Business Days to provide such Adequate Assurance to Seller.
ARTICLE 8. Uprating
(a) Uprate Power. At any time during the Delivery Term, Seller may notify
Vermont Yankee in writing that Seller intends to make capital improvements or
related adjustments to operating parameters, set points, instruments and
procedures to increase the Installed Capability or Energy output of the Facility
(an "Uprate"). Such notice shall contain: (i) the estimated increase in
Installed Capability, Energy associated with the Uprate (the "Uprate Power");
and (ii) an estimated date by which Seller would be able to begin generating
Uprate Power. After providing the notice required by this Article 8(a), Seller
will have the right but not the obligation to complete the Uprate.
(b) Uprate Calculation. Seller will arrange for a Capability Audit to be
conducted before, if necessary, and after the Uprate is completed to determine
the actual increase in Installed Capability attributable to the Uprate. Based
upon the results of these audits, Seller will reduce the Company Entitlement as
follows:
The post-Uprate Company Entitlement equals (i) Adjustment Factor
times (ii)
the pre-Uprate Company Entitlement.
Adjustment Factor = (y/x)
Where x = Capability Audit results after Uprate, and
y = Capability Audit results immediately preceding the Uprate, both
being determined in the same season.
(c) Entitlement to Uprate Power. The Uprate Power attributable to any
Uprate shall be calculated as set forth above and shall be Seller's power. Any
Uprates shall reduce the Company's Entitlement in the manner and to the extent
set forth in Article 8(b).
ARTICLE 9. Limitation of Liability; Indemnification; Insurance; Relationship of
Parties
(a) NOTWITHSTANDING CLAUSE (b) BELOW OR ANY OTHER PROVISION OF THIS
AGREEMENT TO THE CONTRARY, NEITHER COMPANY NOR SELLER NOR THEIR RESPECTIVE
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, PARENT, SUBSIDIARIES OR AFFILIATES OR
THEIR OFFICERS, DIRECTORS, AGENTS OR EMPLOYEES SHALL BE LIABLE OR RESPONSIBLE TO
THE OTHER PARTY OR ITS PARENT, SUBSIDIARIES, AFFILIATES, OFFICERS, DIRECTORS,
AGENTS, EMPLOYEES, SUCCESSORS OR ASSIGNS, OR THEIR RESPECTIVE INSURERS, FOR
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INCIDENTAL, INDIRECT, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, CONNECTED
WITH OR RESULTING FROM PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT, OR
ANYTHING DONE IN CONNECTION THEREWITH INCLUDING, WITHOUT LIMITATION, CLAIMS IN
THE NATURE OF LOST REVENUES, INCOME OR PROFITS (OTHER THAN PAYMENTS EXPRESSLY
REQUIRED AND PROPERLY DUE UNDER THIS AGREEMENT), AND INCREASED EXPENSE OF,
REDUCTION IN OR LOSS OF POWER GENERATION PRODUCTION OR EQUIPMENT USED THEREFOR,
IRRESPECTIVE OF WHETHER SUCH CLAIMS ARE BASED UPON BREACH OF WARRANTY, TORT
(INCLUDING NEGLIGENCE, WHETHER OF SELLER, COMPANY OR OTHERS), STRICT LIABILITY,
CONTRACT, OPERATION OF LAW OR OTHERWISE, BUT EXCLUDING ACTS OF GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT.
(b) Each Party (the "Indemnifying Party") shall defend, indemnify and save
the other Party (the "Indemnified Party"), its officers, directors, agents,
employees and Affiliates and their respective officers, directors, agents and
employees harmless from and against any and all claims, liabilities, demands,
judgments, losses, costs, expenses (including reasonable attorneys' fees),
suits, or damages arising from or out of any event, circumstance, act or
incident first occurring or existing during the period when control and title to
Facility Product is vested in such Party as provided in Article 3(a). Each Party
shall indemnify, defend and hold harmless the other Party against any
Governmental Charges for which such Party is responsible under Article 18.
(c) Each Party shall maintain appropriate insurance coverage at its sole
expense.
(d) The rights, obligations and protections afforded by clauses (a) and
(b) above shall survive the termination, expiration or cancellation of this
Agreement, and shall apply to the full extent permitted by law.
(e) Nothing in this Agreement shall be construed as creating any
relationship between the Parties other than that of independent contractors for
the sale and purchase of Facility Product.
(f) EXCEPT AS SET FORTH HEREIN, THERE IS NO WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE
DISCLAIMED.
ARTICLE 10. Miscellaneous Provisions
(a) The Parties hereto agree that time shall be of the essence of this
Agreement.
(b) This Agreement may not be modified or amended except in writing signed
by or on behalf of both Parties by their duly authorized officers, and if
applicable, after obtaining any required regulatory approvals.
(c) It shall be the responsibility of Seller to take all necessary actions
to satisfy any regulatory requirements that may be imposed on Seller by any
statute, rule or regulation or FERC - accepted regional agreement concerning the
sale of Facility Product to the Company
B-2-13
hereunder. Company shall cooperate with Seller and provide information or such
other assistance, without cost to Company, as may be reasonably necessary for
Seller to satisfy regulatory requirements relating specifically and only to the
sale of Facility Product. Seller shall cooperate with Company and provide
information or such other assistance, without cost to Seller, as may be
reasonably necessary for Company to satisfy regulatory requirements relating
specifically and only to the purchase of Facility Product.
(d) Notwithstanding clause (c) above, Seller agrees to provide, at no cost
to Company, all necessary forms, data, and other information reasonably
requested of Company by ISO-NE, NEPOOL, or any governmental or regulatory agency
or authority having jurisdiction.
(e) The Parties acknowledge and agree that the sales hereunder constitute
"forward-contracts" within the meaning of the United States Bankruptcy Code.
(f) This Agreement (including the exhibits, schedules and any written
supplements hereto), constitutes the entire agreement between the Parties
relating to the subject matter. This Agreement shall be considered for all
purposes as prepared through the joint efforts of the Parties and shall not be
construed against one Party or the other as a result of the preparation,
substitution, submission or other event of negotiation, drafting or executing
hereof. This Agreement shall not impart any rights enforceable by any third
party (other than a permitted successor or assignee bound to this Agreement or
the Sub-Purchasers and their assigns). Any provision declared or rendered
unlawful by any applicable court of law or regulatory agency or deemed unlawful
because of a statutory change or deemed to be not in compliance, with the NEPOOL
Agreement the NEPOOL Standards or the ISO-NE Standards, whether because of
changes therein or otherwise, including but not limited to a change in the
commercial structure of the ISO-NE market from a single pool-wide market
clearing price to a system that utilizes a geographic or location pricing
differentiation approach, or a move to a multi-settlement approach (i.e. day
ahead energy market clearing price, real time or hour ahead energy market
clearing price), (individually or collectively, such events referred to as
"Regulatory Event") will not otherwise affect the remaining lawful obligations
that arise under this Agreement; and provided, further, that if a Regulatory
Event occurs, the Parties shall use their commercially reasonable efforts to
reform this Agreement in order to give effect to the original intention of the
Parties. The term "including" when used in this Agreement shall be by way of
example only and shall not be considered in any way to be in limitation. The
headings used herein are for convenience and reference purposes only. All
indemnity and audit rights shall survive the termination of this Agreement for
twelve (12) months. This Agreement shall be binding on each Party's successors
and permitted assigns.
ARTICLE 11. Assignment
(a) Neither Party shall assign this Agreement or its rights hereunder
without the prior written consent of the other Party, which consent may be
withheld in the exercise of its sole discretion; provided, however, Seller may,
without the consent of the Vermont Yankee (and
B-2-14
without relieving itself from liability hereunder), (i) transfer, sell, pledge,
encumber or assign this Agreement or the accounts, revenues or proceeds hereof
in connection with any financing or other financial arrangements, or (ii)
transfer or assign this Agreement to an affiliate of Seller, which affiliate's
creditworthiness is equal to or higher than that of Seller, or (iii) transfer or
assign this Agreement to an entity which is succeeding to all or substantially
all of the assets of Seller; provided, however, that in each such case, Seller
shall not be relieved of its obligations hereunder and any such assignee shall
agree in writing to be bound by the terms and conditions hereof.
ARTICLE 12. Force Majeure
(a) If either Party is rendered wholly or partly unable to perform its
obligations under this Agreement because of a Force Majeure event, that Party
shall be excused from whatever performance is affected by the Force Majeure
event to the extent so affected, provided that the non-performing Party shall:
(i) provide prompt notice to the other Party of the occurrence of the Force
Majeure event giving an estimation of its expected duration and the probable
impact on the performance of its obligations hereunder and submitting good and
satisfactory evidence of the existence of the Force Majeure event; (ii) exercise
all commercially reasonable efforts to continue to perform its obligations
hereunder; (iii) expeditiously take commercially reasonable action to correct or
cure the Force Majeure event and submit good and satisfactory evidence that it
is making all commercially reasonable efforts to correct or cure the Force
Majeure event; (iv) exercise all commercially reasonable efforts to mitigate or
limit damages to the other Party to the extent such action shall not adversely
effect its own interests; and (v) provide prompt notice to the other Party of
the cessation of the Force Majeure event; and provided, further, that the Party
not claiming Force Majeure shall be excused from performance hereunder for the
duration of such Force Majeure event.
(b) "Force Majeure" means the failure or imminent threat of failure of
facilities or equipment, flood, freeze, earthquake, storm, fire, lighting, other
acts of God, epidemic, war, acts of a public enemy, riot, civil disturbance or
disobedience, strike, lockout, work stoppages, other industrial disturbance or
dispute, sabotage, restraint by court order or other public authority, and
action or non-action by, or failure or inability to obtain the necessary
authorizations or approvals from, any governmental agency or authority, which by
the exercise of due diligence such Party could not reasonably have been expected
to avoid and by exercise of due diligence its effect can not be overcome.
Nothing contained herein shall be construed so as to require the Parties to
settle any strike, lockout, work stoppage or any industrial disturbance or
dispute in which it may be involved, or to seek review of or take an appeal from
any administrative or judicial action. In no event shall the lack of funds or an
inability to obtain funds or any action by governmental authority that
disallows, prevents or limits the recovery through rates of all or any portion
of the charges imposed by this Agreement be a Force Majeure event. A Force
Majeure event shall not be based on (i) the loss of the Company's or any
Sub-Purchaser's markets; (ii) the Company's or any Sub-Purchaser's inability to
economically use or resell the Facility Product purchased
B-2-15
hereunder; or (iii) the Seller's ability to sell the Facility Product at a
greater price than that provided hereunder.
ARTICLE 13. Default
(a) "Event of Default" shall mean, in relation to a Party (the "Defaulting
Party"):
(i) the failure to make, when due, any payment required pursuant to
this Agreement if such failure is not remedied within three (3) Business Days
after written notice;
(ii) any representation or warranty made by such Party herein is
false or misleading in any material respect when made or when deemed made;
(iii) the failure by a Party to perform any material covenant or
obligation set forth in this Agreement (except to the extent constituting a
separate Event of Default), if such failure is not remedied within three (3)
Business Days after written notice;
(iv) such Party becomes Bankrupt; or
(v) subject to Article 11(a) such Party consolidates or amalgamates
with, or merges with or into, or transfers all or substantially all of its
assets to, another entity and, at the time of such consolidation, amalgamation,
merger or transfer, the resulting, surviving or transferee entity fails to
assume all the obligations of such Party under this Agreement to which it or its
predecessor was a party by operation of law or pursuant to an agreement
reasonably satisfactory to the other Party.
(b) Upon an Event of Default, upon written notice to the Defaulting Party,
the Non-Defaulting Party may resort to all remedies available at law or in
equity, including, without limitation: (i) the termination of this Agreement;
(ii) specific performance of the provisions of this Agreement; (iii) the
recovery of actual damages; and/or (iv) the right to suspend performance
hereunder; provided, however, in no event shall any such suspension continue for
longer than ten (10) Business Days. In the event the Seller seeks damages
hereunder, the measure of damages shall be calculated by determining all amounts
potentially owing between the Parties, calculating the net present value
thereof, and deducting the net present value of the potential resale value of
all Facility Product to be delivered hereunder, all calculations to be made in a
commercially reasonable basis. In the event the Company seeks damages hereunder,
the measure of damages shall be calculated by determining the difference between
the net present value of the purchase price for Facility Product to be delivered
hereunder calculated pursuant to Article 5 and the net present value of the cost
of power required to replace Facility Product to be delivered hereunder.
(c)
B-2-16
ARTICLE 14. Governing Law, Dispute Resolution
(a) The interpretation and performance of this Agreement shall be in
accordance with, and controlled by the law, of the State of Vermont,
notwithstanding its conflicts of law principles.
(b) If any dispute, disagreement, claim or controversy exists between
Seller and Company arising out of or relating to this Agreement, such disputed
matter shall be submitted to a committee comprised of one designated agent of
each Party. Such committee shall be instructed to attempt to resolve the matter
within twenty (20) days thereafter. If Company's and Seller's designees do not
agree upon a decision within thirty (30) days after the submission of the matter
to them, either Party may institute formal legal proceedings.
ARTICLE 15. Waiver
The failure of either Party to require compliance with any provision of
this Agreement shall not affect that Party's right to later enforce the
same. It is agreed that the waiver by either Party of performance of any
of the terms of this Agreement, or of any breach thereof or any default
hereunder, must be in writing and signed by the Party from whom waiver is
sought, and shall not be held or deemed to be a waiver by that Party of
any subsequent failure to perform the same, or any other term or condition
of this Agreement, or of any breach thereof or any default hereunder.
ARTICLE 16. Company Representations and Warranties.
The Company hereby represents and warrants to the Seller as follows:
(a) Organization; Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Vermont and has all requisite corporate power and
authority to own, lease, and operate its properties and to carry on
its business as is now being conducted. The Company here heretofore
made available to the Seller complete and correct copies of its
Articles of Association and Bylaws as currently in effect.
(b) Authority. The Company has full corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by all necessary
corporate action required on the part of the Company and no other
corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Company, and assuming that this
Agreement constitutes a valid and binding agreement of the Seller
and subject to obtaining all necessary regulatory approvals,
constitutes
B-2-17
the legal, valid, and binding agreement of the Company, enforceable
against the Company in accordance with its terms.
(c) Consents and Approvals; No Violation.
Neither the execution and delivery by the Company of this Agreement
nor the consummation of the transactions contemplated hereby or
thereby will (i) conflict with or result in the breach or violation
of any provision of the Articles of Association or Bylaws of the
Company, (ii) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, license or
other restriction of any governmental authority to which the Company
or any of its property is subject, which violation, individually or
in the aggregate, would have a material adverse effect on the
Company's ability to perform its obligations under this Agreement,
(iii) result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any material note, bond, mortgage, indenture, license,
agreement or other instrument or obligation to which the Company is
a party, except for such defaults (or rights of termination,
cancellation or acceleration) as to which requisite waivers or
consents have been obtained or which would not, individually or in
the aggregate, have a material adverse effect on the Company's
ability to perform its obligations under this Agreement, or (iv)
constitute violations of any order, writ, injunction, decree,
statute, rule or regulation applicable to the Company, or any of its
assets, which violation, individually or in the aggregate, would
have a material adverse effect on the Company's ability to perform
its obligations under this Agreement.
(d) No declaration, filing or registration with, or notice to, or
authorization consent or approval of any governmental authority is
necessary for the consummation by the Company of the transactions
contemplated hereby which has not already been obtained or will not
be obtained on or prior to the Closing Date.
(e) The Company is not Bankrupt and there are no proceedings pending or
being contemplated by it or, to its knowledge, threatened against it
which would result in it being or becoming Bankrupt.
(f) There is not pending or, to its knowledge, threatened against it or
any of the Sub-Purchasers any legal proceedings that could
materially adversely affect its ability to perform its obligations
under this Agreement.
ARTICLE 17. Notice
Except as otherwise provided herein, any notice, invoice or other
communication which is required or permitted by this Agreement shall be in
writing and delivered by personal
B-2-18
service, telecopy, overnight delivery or mailed certified or registered
first class mail, postage prepaid, properly addressed as follows:
a) In the case of Company to:
Vermont Yankee Nuclear Power Corporation
000 Xxx Xxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxx 05302-7002
Telecopy No: 000-000-0000
b) In the case of Seller to:
Entergy Nuclear Vermont Yankee, LLC
000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Telecopy No: 914-272-3205
Another address or addressee may be specified in a notice duly given as
provided. Each notice, invoice or other communication which shall be
mailed, delivered or transmitted in the manner described above shall be
deemed sufficiently given and received for all purposes at such time as it
is delivered to the addressee (with return receipt, the delivered receipt,
the affidavit of the messenger or with respect to a telecopy, the answer
back, being deemed conclusive evidence of such delivery) or at such time
as delivery is refused by the addressee upon presentation.
ARTICLE 18. Governmental Charges
(a) Each Party shall use reasonable efforts to implement the provisions of
and to administer this Agreement in accordance with the intent of the parties to
minimize all taxes, so long as neither Party is materially adversely affected by
such efforts.
(b) Seller shall pay or cause to be paid all taxes imposed by any
government authority ("Governmental Charges") on or with respect to the Facility
Product arising prior to the Delivery Point. Buyer shall pay or cause to be paid
all Governmental Charges on or with respect to the Facility Product at and from
the Delivery Point (other than ad valorem, franchise or income taxes which are
related to the sale of the Facility Product and are, therefore, the
responsibility of the Seller). In the event Seller is required by law or
regulation to remit or pay Governmental Charges which are Buyer's responsibility
hereunder, Buyer may deduct the amount of any such Governmental Charges from the
sums due to Seller under Article 5 of this Agreement. Nothing shall obligate or
cause a Party to pay or be liable to pay any Governmental Charges for which it
is exempt under the law.
B-2-19
ARTICLE 19. Confidentiality
Except as otherwise required by law or for implementation of this Agreement, the
Parties must keep confidential the transaction undertaken pursuant hereto;
provided, however, that Vermont Yankee may disclose such information to its
Sub-Purchasers as required to implement the resale of Facility Product, and the
Sub-Purchasers may disclose the same to any entities to which they may seek to
resell such Facility Product ("Third-Party Purchasers"), provided that any such
Third-Party Purchaser shall agree to be bound by this confidentiality provision.
Any information provided by either Party to the other Party or to a
Sub-Purchaser or any such Third-Party Purchasers pursuant to this Agreement and
labeled "CONFIDENTIAL" will be used by the receiving Party solely in connection
with the purposes of this Agreement and will not be disclosed by the receiving
Party to any third party, except as herein provided or with the providing
Party's consent. This Article 19 of this Agreement will not prevent either Party
from providing any confidential information received from the other Party to any
court in accordance with a proper discovery request or in response to the
reasonably request of any governmental agency with jurisdiction to regulate or
investigate the disclosing Party's affairs, provided that, if feasible, the
disclosing Party will give prior notice to the other Party of such disclosure
and, if so requested by such other Party, will have used all reasonably efforts
to oppose or resist the requested disclosure, as appropriate under the
circumstances, or to otherwise make such disclosure, as appropriate, under the
circumstances, or to otherwise make such disclosure pursuant to a protective
order or other similar arrangement for confidentiality.
ARTICLE 20. Seller's Market-Based Power Sales Tariff
This Agreement is made under the authority of Seller's Market-Based Power Sales
Tariff, as accepted for filing by FERC. Nevertheless, unless provisions of that
Tariff are specifically incorporated herein by reference, this Agreement
controls the terms of the transactions hereunder.
B-2-20
IN WITNESS WHEREOF the Parties have executed this Agreement as of the date
first written above.
ENTERGY NUCLEAR VERMONT YANKEE, LLC
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President and Chief
Operating Officer
VERMONT YANKEE NUCLEAR POWER CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------------
Xxxx X. Xxxxxxxxx
President and Chief Executive Officer
B-2-21
SCHEDULE A
[Diagram of Delivery Points]
B-2-22
SCHEDULE B
Maximum Monthly
Amount* (in Mwh)
----------------
January 383,805
February 359,391
March 383,373
April 370,526
May 378,074
June 357,103
July 375,765
August 366,677
September 357,773
October 380,189
November 371,181
December 383,742
* The maximum figure for any month affected by a refueling outage will be
reduced by an amount equal to 510 times the actual number of hours that the
Facility produces no Energy due to such refueling outage.
If Seller completes an Uprate, Schedule B amounts, including the refueling
outage adjustment as noted above, shall be increased by multiplying the amount
by the fraction (x / y) as x and y are defined in Article 8(b).
B-2-23
SCHEDULE C
Original
Sub-Purchasers: Portion
--------------- -------
Central Vermont Public Service Corporation 35.0%
Green Mountain Power Corporation 20.0%
New England Power Company 22.5%
The Connecticut Light and Power Company 9.5%
Central Maine Power Company 4.0%
Public Service Company of New Hampshire 4.0%
Cambridge Electric Light Company 2.5%
Western Massachusetts Electric Company 2.5%
-----
Company's Entitlement 100.0%
B-2-24
SCHEDULE D
BASE PRICES - $/Mwh LOW PPA
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Jan 42.00 42.80 39.50 39.00 40.00 41.00 42.00 43.00 44.00 45.00
Feb 42.00 42.80 39.50 39.00 40.00 41.00 42.00 43.00 44.00 45.00
Mar 30.00 42.00 42.80 39.50 39.00 40.00 41.00 42.00 43.00 44.00 45.00
Apr 30.00 42.00 42.80 39.50 39.00 40.00 41.00 42.00 43.00 44.00
May 30.00 42.00 42.80 39.50 39.00 40.00 41.00 42.00 43.00 44.00
June 30.00 42.00 42.80 39.50 39.00 40.00 41.00 42.00 43.00 44.00
July 55.00 42.00 42.80 39.50 39.00 40.00 41.00 42.00 43.00 44.00
Aug 55.00 42.00 42.80 39.50 39.00 40.00 41.00 42.00 43.00 44.00
Sept 49.00 42.00 42.80 39.50 39.00 40.00 41.00 42.00 43.00 44.00
Oct 49.00 42.00 42.80 39.50 39.00 40.00 41.00 42.00 43.00 44.00
Nov 49.00 42.00 42.80 39.50 39.00 40.00 41.00 42.00 43.00 44.00
Dec 49.00 42.00 42.80 39.50 39.00 40.00 41.00 42.00 43.00 44.00
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[PLACEHOLDER]
B-2-26
