Exhibit N-8
UTILITY COMPANY
FORM OF ASSOCIATE SERVICE AGREEMENT
Ohio Edison Company, an Ohio corporation, The Cleveland Illuminating
Company, an Ohio corporation, The Toledo Edison Company, an Ohio corporation,
and Pennsylvania Power Company, a Pennsylvania corporation (collectively, the
"Parties")
WHEREAS, the Parties are all public utility subsidiaries of FirstEnergy
Corp. ("FirstEnergy"), a registered holding company under the Public Utility
Holding Company Act of 1935, as amended (the "Act");
WHEREAS, FirstEnergy organizes its utility subsidiary operations on a regional
basis pursuant to which the FirstEnergy service territory is divided
into regions and each region is operated and managed as a separate
business unit;
WHEREAS, certain regions currently, or may in the future, include more
than one utility;
WHEREAS, regional support services may from time to time be provided by
one Party (in such capacity, the "Service Company") to any other Party (in such
capacity, the "Client Company");
WHEREAS, each of the Parties believes that it is in the interest of all
of the Parties to enter into an arrangement whereby a Client Company may agree
to purchase regional support services from a Service Company as a Client Company
may choose at cost as determined in accordance with this Agreement and Rules 90
and 91 under the Act;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. DESCRIPTION OF SERVICES.
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The Parties, each in their capacity as a Service Company, agree to
provide certain regional support services (the "Services") to each other Party
in its capacity as a Client Company. Such services are and will be provided to a
Client Company only at the request of a Client Company. Exhibit A hereto lists
all of the Services that are available from each Service Company.
2. PERSONNEL.
In order to provide the Services, each Service Company will use its own
employees. If necessary, each Service Company, after consultation with any
Client Company, may also arrange for the services of nonaffiliated experts,
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consultants and attorneys in connection with the performance of any of the
Services provided under this Agreement.
3. COMPENSATION AND ALLOCATION.
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As and to the extent required by law, each Service Company provides and
will provide such services at fully allocated cost, determined in accordance
with Rules 90 and 91 under the Act. Any services provided hereunder that are not
direct charged will be allocated to the Party benefiting from the service based
on the following formula. Each Party benefiting from the Services will be
charged a portion of the indirect costs based on the sum of the weighted average
of the following factors: (a) gross transmission and/or distribution plant; (b)
operating and maintenance expense excluding purchase power and fuel costs; and
(c) transmission and/or distribution revenues, excluding transactions with
affiliates. Each of the above factors is weighted equally. The result of the
multiple factor-utility allocation will then be further allocated using the
ratio of customers in that region benefiting from the Services.
4. TERMINATION AND MODIFICATION.
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Any party to this Agreement may terminate its obligations under this
Agreement by providing 60 days written notice of such termination to the other
Parties. This Agreement is subject to termination or modification at any time to
the extent its performance may conflict with the provisions of the Act or with
any rule, regulation or order of the Securities and Exchange Commission adopted
before or after the making of this Agreement. This Agreement shall be subject to
the approval of any state commission or other state regulatory body whose
approval is, by the laws of said state, a legal prerequisite to the execution
and delivery or the performance of this Agreement.
5. SERVICE REQUESTS.
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Each Client Company and each Service Company will prepare a Service
Request on or before September 30th of each year listing Services to be provided
to each respective Client Company by each respective Service Company and any
special arrangements related to the provision of such Services for the coming
year, based on Services provided during the preceding year. Any Service Request
may be supplemented by both parties thereto during the year to reflect any
additional or special Services that the related Client Company wishes to obtain
from the related Service Company, and the arrangements relating thereto.
6. BILLING AND PAYMENT.
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Unless otherwise set forth in a Service Request, payment for Services
provided by a Service Company shall be by making remittance of the amount billed
or by making appropriate accounting entries on the books of the related Client
Company and the related Service Company. Billing will be made on a monthly
basis, with the xxxx to be rendered by the 25th of the month, and remittance or
accounting entries completed within 30 days of billing. Any amount remaining
unpaid after 30 days following receipt of the xxxx shall bear interest thereon
from the date of the xxxx until payment at a rate equal to the prime rate on the
due date.
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7. NOTICE.
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Where written notice is required by this Agreement, all notices,
consents, certificates, or other communications hereunder shall be in writing
and shall be deemed given when mailed by United States registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:
To Ohio Edison Company: c/o President
00 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000
To The Cleveland Electric
Illuminating Company: c/o President
00 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000
To The Toledo Edison
Company: c/o President
00 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000
To Pennsylvania Power
Company: c/o President
00 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000
8. GOVERNING LAW.
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This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio, without regard to their conflict of laws
provisions.
9. MODIFICATION.
------------
No amendment, change or modification to this Agreement shall be valid,
unless made in writing and signed by a Parties hereto.
10. ENTIRE AGREEMENT.
----------------
This Agreement, together with its exhibits, constitutes the entire
understanding and agreement of the Parties with respect to its subject matter,
and effective upon the execution of this Agreement by the respective Parties
hereof and thereto, any and all prior agreements, understandings or
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representations with respect to this subject matter are hereby terminated and
canceled in their entirety and are of no further force and effect.
11. WAIVER.
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No waiver by any Party hereto of a breach of any provision of this
Agreement shall constitute a waiver of any preceding or succeeding breach of the
same or any other provision hereof.
12. ASSIGNMENT.
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This Agreement shall inure to the benefit and shall be binding upon the
Parties and their respective successors and assigns. No assignment of this
Agreement or any Party's rights, interests or obligations hereunder may be made
without the consent of all Parties, which shall not be unreasonably withheld,
delayed or conditioned.
13. SEVERABILITY.
------------
If any provision or provisions of this Agreement shall be held by a
court of competent jurisdiction to be invalid, illegal, or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall in no
way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of this 1st day of June, 2003.
Ohio Edison Company
By:
-----------------------------------------
Name:
Title:
The Cleveland Electric Illuminating Company
By:
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Name:
Title:
The Toledo Edison Company
By:
--------------------------------------------
Name:
Title:
Pennsylvania Power Company
By:
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Name:
Title:
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Exhibit A
TYPES OF SERVICES
Service provided hereunder include, but are not limited:
Human Resources
Dispatching
Forestry
Claims
Stores Services
Transformer Shop
Facilities Services
Supervisory
Regional President Staff
Line Services
Substation Services
Engineering Services
Walk In Centers
Customer Service
Credit
Meter Reading
Meter Services
Garage Services
Regional Administration
VP Administration
Customer Support
Line Operations
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