Mr. Douglas S. Elliott Executive Vice President Metropolitan Edison Company Reading, PA 19640-0001 Pennsylvania Electric Company Erie, PA 16509 The Waverly Electric Power and Light Company Towanda, PA 18848
EXHIBIT
10.5
April
7,
2006
Xx.
Xxxxxxx X. Xxxxxxx
Executive
Vice
President
Metropolitan
Edison
Company
0000
Xxxxxxxxxx
Xxxx
Xxxxxxx,
XX
00000-0000
Pennsylvania
Electric Company
0000
Xxxxx Xx.
Xxxx,
XX
00000
The
Waverly Electric Power and Light Company
000
Xxxx Xx.
Xxxxxxx,
XX
00000
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RE:
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Notice
of Termination Tolling
Agreement
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|
Restated
Partial Requirements Agreement, dated January 1, 2003, by and
among,
Metropolitan Edison Company, Pennsylvania Electric Company,
The Waverly
Electric Power and Light Company and FirstEnergy Solutions
Corp., as
amended by a First Amendment to Restated Requirements Agreement,
dated
August 29, 2003 and by a Second Amendment to Restated Requirements
Agreement, dated June 8, 2004 (“Partial Requirements
Agreement”)
|
Dear
Xx.
Xxxxxxx:
Please
be advised
that FirstEnergy Solutions Corp. (“Solutions”) hereby gives notice,
in
accordance with the Tolling Agreement dated November 1, 2005 that
amended
the
Restated Partial Requirements Agreement (“Partial Requirements Agreement”),
to Metropolitan
Edison
Company, Pennsylvania Electric Company and The Waverly Electric Power and Light
Company (“Buyers”) that Solutions has elected to terminate the Partial
Requirements Agreement effective midnight December 31, 2006. In accordance
with
the November 1, 2005 Tolling Agreement, this notice is being provided at least
sixty (60) days in advance of the effective date of termination.
This
termination is
necessary because the Partial Requirements Agreement is not economically
sustainable from Solutions’ perspective. Market prices for generation services
have and continue to be far above the price being charged to Buyers. In
addition, the load following product being supplied is very different than
the
product originally contemplated under the Partial Requirements Agreement.
Notwithstanding
the
above, in exchange for Solutions not exercising its right to terminate the
Partial Requirements Agreement effective midnight December 31, 2006, the parties
agree as follows:
| 1. |
The
termination provisions of Paragraph 6 of the Partial Requirements
Agreement, as tolled by the November 1, 2005 Tolling Agreement, shall
be
tolled for a period of one (1) year from December 31, 2006,
provided:
|
| a. |
Solutions
shall be permitted to terminate the Partial Requirements Agreement
at any
time during the term of this Tolling Agreement with sixty (60) days
written notice;
|
| b. |
Buyers
shall
procure through arrangements other than the Partial Requirements
Agreement
beginning December 1, 2006 and ending December 31, 2007, approximately
33%
of the amounts of capacity, energy, ancillary services and other
services
necessary to satisfy their Provider of Last Resort obligations for
which
Committed Resources (as defined in the Partial Requirements Agreement)
have not been obtained; and
|
| c. |
Solutions
has
no obligation under the Partial Requirements Agreement to supply
additional quantities of capacity and energy in the event that a
supplier
of Committed Resources defaults on its supply
agreement.
|
| 2. |
Solutions
will
not act as agent for Buyers in procuring capacity and energy under
section
1(b), above.
|
| 3. |
The
pricing
provision of Paragraph 5 of the Partial Requirements Agreement shall
remain unchanged provided Buyers comply with the provisions of this
Tolling Agreement and any applicable provision of the Partial Requirements
Agreement.
|
In
the event that Solutions elects not to terminate the Partial Requirements
Agreement effective midnight December 31, 2007, similar tolling agreements
effective after December 31, 2007 will be considered by Solutions only if Buyers
procure, through arrangements other than the Partial Requirements Agreement,
additional amounts of approximately 64% in 2008, 83% in 2009 and 95% in 2010
of
the capacity, energy, ancillary services and other services necessary to satisfy
their Provider of Last Resort obligations for which Committed Resources (as
defined in the Partial Requirements Agreement) have not been obtained from
the
market.
This
Tolling
Agreement supercedes any conflicting provision of the Partial Requirements
Agreement. The execution of this Tolling Agreement does not constitute an
admission or acknowledgment of any fact, conclusion of law, or liability by
any
party to this Tolling Agreement.
This
Tolling
Agreement may be executed in counterparts and is effective as of the date of
execution without the requirement of filing with or endorsement by any federal
or state court or agency. The undersigned representatives certify that they
are
fully authorized to enter into and to bind such party to the terms and
conditions of this Tolling Agreement.
Please
indicate your
agreement with this Tolling Agreement by signing below.
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Sincerely,
|
|
Xxx
X.
Xxxxxxxx
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|
President
|
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FirstEnergy
Solutions Corp.
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Accepted
and agreed to by:
Metropolitan
Edison
Company
Pennsylvania
Electric Company
The
Waverly Electric Power and Light Company
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By:
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|
|
Xxxxxxx
X.
Xxxxxxx
|
|
|
Executive
Vice
President
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|
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This
__ day of
April, 2006
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