EXHIBIT 10.2e
SECOND SUPPLEMENTARY POWER CONTRACT
SECOND SUPPLEMENTARY POWER CONTRACT, dated as of April 30,
1984, between CONNECTICUT YANKEE ATOMIC POWER COMPANY
("Connecticut Yankee"), a Connecticut corporation, and The United
Illuminating Company (the "Purchaser") to the Power Contract,
dated as of July 1, 1964, between Connecticut Yankee and the
Purchaser (the "Power Contract").
W I T N E S S E T H :
WHEREAS, Connecticut Yankee is establishing a trust pursuant
to an Indenture of Trust dated as of April 30, 1984 (the
"Connecticut Yankee Trust") to make provision for financing the
decommissioning of the nuclear electric generating unit of the
pressurized water type, having a maximum net capability of
approximately 582 megawatts electric, at a site adjacent to the
Connecticut River at Haddam, Connecticut (said unit, together
with the site and all related facilities owned or to be owned by
Connecticut Yankee, being referred to herein as the "Unit") in
accordance with the rules and regulations of the Nuclear
Regulatory Commission (the "NRC") and to assure Connecticut
Yankee's financial ability to meet the obligations to the NRC,
other applicable regulatory bodies, the general public and its
customers in connection with said decommissioning. The
Connecticut Yankee Trust is to hold all payments made to it and
any earnings thereon solely for the purpose of meeting such
decommissioning expenses and thereafter for the benefit of the
wholesale purchasers of power from Connecticut Yankee in
accordance with the terms and conditions ordered by any
governmental regulatory body having jurisdiction; and
WHEREAS, pursuant to an Order (the "Order") issued by the
Federal Energy Regulatory Commission (the "FERC") on June 12,
1980 (Docket No. ER80-717), Connecticut Yankee has been
collecting estimated costs of decommissioning the Unit pursuant
to the Power Contract; and
WHEREAS, in order to provide for the continued accrual of
funds for decommissioning the Unit at the end of its useful life
Connecticut Yankee and each of its other purchasers are
contemporaneously entering into Second Supplementary Power
Contracts which are identical to this Second Supplementary Power
Contract, except for the necessary changes in the names of the
parties.
NOW, THEREFORE, in consideration of the premises and of
other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree that the Power Contract is
hereby supplemented as follows:
1. Decommissioning Payment
-----------------------
For each month after which this Second Supplementary Power
Contract shall have become effective pursuant to Section 15
herein, the Purchaser will pay Connecticut Yankee an amount equal
to the Purchaser's entitlement percentage of the Total
Decommissioning Costs for the month with respect to the Unit.
(a) "Total Decommissioning Costs" for any month shall
mean the sum of (x) an amount equal to all accruals in
such month to any reserve, as from time to time
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established by Connecticut Yankee and approved by its
board of directors, to provide for the ultimate payment
of the Decommissioning Expenses of the Unit plus (y)
Decommissioning Tax Liability for such month. It is
understood (i) that such funds may be held by
Connecticut Yankee or by an independent trust or other
separate fund, as determined by said board of
directors, (ii) that, upon compliance with Section 5
hereof, the amount, custody and/or timing of such
accruals may from time to time during the term hereof
be modified by said board of directors in its
discretion or to comply with applicable statutory or
regulatory requirements or to reflect changes in the
amount, custody or timing of anticipated
Decommissioning Expenses, and (iii) that the use of the
term "to decommission" herein encompasses compliance
with all requirements (other than those relating to
spent nuclear fuel) of the Nuclear Regulatory
Commission or its successors (the "NRC") for permanent
cessation of operation of a nuclear facility and any
other activities reasonably related thereto.
(b) "Decommissioning Expenses" shall include:
(1) All costs and expenses of any NRC - approved
method of removing the Unit from service,
including without limitation, dismantling,
mothballing, entombment, removing radioactive
material (excluding spent nuclear fuel) to
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temporary and/or permanent storage sites,
decontaminating, restoring and supervising the
site, and any costs and expenses incurred in
connection with proceedings before governmental
authorities relating to any authorization to
decommission the Unit or remove the Unit from
service;
(2) All costs of labor and services, whether
directly or indirectly incurred, including without
limitation, services of foremen, inspectors,
supervisors, surveyors, engineers, security
personnel, counsel and accountants, performed or
rendered in connection with the decommissioning of
the Unit and the removal of the Unit from service,
and all costs of materials, supplies, machinery,
construction equipment and apparatus acquired or
used (including rental charges for machinery,
equipment or apparatus hired) for or in connection
with the decommissioning of the Unit and the
removal of the Unit from service, and all
administrative costs, including services of
counsel and financial advisers, of any applicable
independent trust or other separate fund; it being
understood that any amount, exclusive of proceeds
of insurance, realized by Connecticut Yankee as
salvage on any machinery, construction equipment
and apparatus, the cost of which was charged to
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Decommissioning Expense, shall be treated as a
reduction of the amounts otherwise chargeable on
account of the costs of decommissioning of the
Unit; and
(3) All overhead costs applicable to the Unit
during its decommissioning period, including,
without limiting the generality of the foregoing,
taxes (other than taxes on or in respect of
income), charges, licenses, excises and
assessments, casualties, surety bond premiums and
insurance premiums.
(c) "Decommissioning Tax Liability" for any month shall be
an amount established by Connecticut Yankee and approved by its
board of directors to meet possible income tax obligations, which
amount shall not exceed: the amount to be included in the clause
(x) portion of Total Decommissioning Costs for such month
multiplied by a fraction whose numerator is equal to the combined
highest applicable statutory Federal and state marginal income
tax rate and whose denominator is equal to one minus the combined
highest statutory Federal and state marginal income tax rate.
Without limiting the generality of the foregoing, any other
amounts expended or to be paid with respect to decommissioning of
the Unit or removal of the Unit from service shall constitute
part of the Decommissioning Expenses if they are, or when paid
will be, either (i) properly chargeable to any account related to
decommissioning of a nuclear generating unit in accordance with
the Uniform System of Accounts applicable to Connecticut Yankee
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or generally accepted accounting principles as then in effect, or
(ii) properly chargeable to decommissioning of a nuclear
generating unit in accordance with then applicable regulations of
the NRC or the FERC or any other regulatory agency having
jurisdiction.
2. Billing
-------
Connecticut Yankee will xxxx the Purchaser, as soon as
practicable after the end of each month, for all amounts payable
by the Purchaser with respect to the particular month pursuant to
Section 1 hereof. Such bills will be rendered in such detail as
the Purchaser may reasonably request and may be rendered on an
estimated basis subject to corrective adjustments in subsequent
billing periods. All bills shall be due and payable when
rendered and any amount remaining unpaid 15 days following the
date of receipt of bills shall bear interest at an annual rate
equal to 2% in excess of the current prime rate then in effect at
The Connecticut Bank and Trust Company, National Association,
from the due date to the date payment is received by Connecticut
Yankee.
3. Decommissioning Fund
--------------------
Connecticut Yankee agrees to pay to, or cause to be paid to,
the Connecticut Yankee Trust or any successor trust approved by
the board of directors of Connecticut Yankee all funds collected
hereunder for the express purpose of decommissioning the Unit or
removing the Unit from service and further agrees that, after the
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tax consequences of decommissioning collections have been
resolved, any funds collected hereunder to meet Decommissioning
Tax Liability which are not used for that purpose will be
refunded to the Purchaser.
4. Duration of Payments
--------------------
The Purchaser's obligation to make payment of its
entitlement percentage of Total Decommissioning Costs shall,
whether or not the Unit is operated or operable and
notwithstanding any earlier termination of the service life of
the Unit and cancellation of the Power Contract, remain in full
force and effect until January 1, 1998 or the completion of
decommissioning of the Unit, whichever is earlier, it being
recognized that such costs represent deferred payments in
connection with power theretofore delivered by Connecticut
Yankee; provided, however, that the payment of Total
Decommissioning Costs shall cease upon the taking of the Unit by
exercise of the right of eminent domain or similar right or
power.
5. Amendments
----------
Upon authorization by Connecticut Yankee's board of
directors of uniform amendments to all the Second Supplementary
Power Contracts identical to this Second Supplementary Power
Contract, Connecticut Yankee shall have the right to amend the
provisions of Section 1 hereof by serving an appropriate
statement of such amendment upon the Purchaser and filing the
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same with the FERC (or such other regulatory agency as may have
jurisdiction in the premises) in accordance with the provisions
of applicable laws and any rules and regulations thereunder, and
the amendment shall thereupon become effective on the date
specified therein, subject to any suspension order duly issued by
such agency. All other amendments to this Second Supplementary
Power Contract shall be by mutual agreement, evidenced by a
written amendment signed by the parties hereto.
6. Arbitration
-----------
In case any dispute shall arise as to the interpretation or
performance of this Second Supplementary Power Contract which
cannot be settled by mutual agreement, such dispute shall be
submitted to arbitration. The parties shall if possible agree
upon a single arbitrator. In case of failure to agree upon an
arbitrator within 15 days after the delivery by either party to
the other of a written notice requesting arbitration, either
party may request the American Arbitration Association to appoint
the arbitrator. The arbitrator, after opportunity for each of
the parties to be heard, shall consider and decide the dispute
and notify the parties in writing of his decision. Such decision
shall be binding upon the parties, and the expenses of the
arbitration shall be borne equally by them.
7. Regulation
----------
This Second Supplementary Power Contract, and all rights,
obligations and performance of the parties hereunder, are subject
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to all applicable state and Federal law and to all duly
promulgated orders and other duly authorized action of any
governmental authority having jurisdiction.
8. Assignment
----------
This Second Supplementary Power Contract shall be binding
upon and shall inure to the benefit of, and may be performed by,
the successors and assigns of the parties, except that no
assignment, pledge or other transfer of this Second Supplementary
Power Contract by either party shall operate to release the
assignor, pledgor or transferor of any of its obligations under
this Second Supplementary Power Contract unless consent to the
release is given in writing by the other party, or, if the other
party has theretofore assigned, pledged or otherwise transferred
its interest in this Second Supplementary Power Contract, by the
other party's assignee, pledgee or transferee, or unless such
transfer is incident to a merger or consolidation with, or
transfer of all or substantially all of the assets of the
transferor to, another Purchaser which shall, as part of such
succession, assume all the obligations of the transferor under
this contract.
9. Right of Setoff
---------------
The Purchaser shall not be entitled to set off against the
payments required to be made by it under this Second
Supplementary Power Contract (i) any amounts owed to it by
Connecticut Yankee or (ii) the amount of any claim by it against
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Connecticut Yankee. However, the foregoing shall not affect in
any other way the Purchaser's rights and remedies with respect to
any such amounts owed to it by Connecticut Yankee or any claim by
it against Connecticut Yankee.
10. Interpretation
--------------
The interpretation and performance of this Second
Supplementary Power Contract shall be in accordance with and
controlled by the law of the State of Connecticut.
11. Addresses
---------
Except as the parties may otherwise agree, any notice,
request, xxxx or other communication from one party to the other,
relating to this Second Supplementary Power Contract, or the
rights, obligations or performance of the parties hereunder,
shall be in writing and shall be effective upon delivery to the
other party. Any such communication shall be considered as duly
delivered when mailed to the respective post office address of
the other party shown following the signatures of such other
party hereto, or such other post office address as may be
designated by written notice given as provided in this Section.
12. Corporate Obligations
---------------------
This Second Supplementary Power Contract is the corporate
act and obligation of the parties hereto, and any claim hereunder
against any stockholder, director or officer of any party, as
such, is expressly waived.
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13. Usage of Defined Terms
----------------------
Except where otherwise specifically provided herein, the
usage in this contract of terms which are defined in the Power
Contract shall be deemed to be in accordance with the definitions
thereof in the Power Contract.
14. Counterparts
------------
This Second Supplementary Power Contract may be executed in
any number of counterparts and each executed counterpart shall
have the same force and effect as an original instrument and as
if all the parties to all of the counterparts had signed the same
instrument. Any signature page of this Second Supplementary Power
Contract may be detached from any counterpart without impairing
the legal effect of any signatures thereon, and may be attached
to another counterpart of this Second Supplementary Power
Contract identical in form hereto but having attached to it one
or more signature pages.
15. Effectiveness
-------------
This Second Supplementary Power Contract shall become
effective sixty days after the date upon which this Second
Supplementary Power Contract shall have been filed with the FERC,
subject to any suspension order duly issued by the FERC.
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IN WITNESS WHEREOF, the parties have executed this Second
Supplementary Power Contract by their respective officers duly
authorized as of the 30th day of April, 1984.
CONNECTICUT YANKEE ATOMIC POWER COMPANY
By /s/ Xxxxxxx X. Xxx
--------------------------
(Officer)
Its /s/ Senior Vice President
--------------------------
(Title)
X.X. Xxx 000
Xxxxxxxx, XX 00000
--------------------------
(Address)
THE UNITED ILLUMINATING COMPANY
By /s/ Xxxxx X. Xxxxx, Xx.
---------------------------
Xxxxx X. Xxxxx, Xx.
Its President
---------------------------
00 Xxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
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