Exhibit No. CF-1201
SYSTEM INTEGRATION AGREEMENT
BETWEEN
CAROLINA POWER & LIGHT COMPANY
AND
FLORIDA POWER CORPORATION
SYSTEM INTEGRATION AGREEMENT BETWEEN
CAROLINA POWER & LIGHT COMPANY AND FLORIDA POWER CORPORATION
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TABLE OF CONTENTS
ARTICLE I Definitions........................................................2
1.1 Agent............................................................2
1.2 Agreement........................................................2
1.3 Combined System..................................................2
1.4 Control Area.....................................................2
1.5 CP&L.............................................................2
1.6 CP&L East Control Area...........................................2
1.7 CP&L West Control Area...........................................3
1.8 Decremental Cost.................................................3
1.9 Exchange.........................................................3
1.10 Exchange Agreement...............................................3
1.11 FERC.............................................................3
1.12 FPC..............................................................3
1.13 FPC Control Area.................................................3
1.14 Generating Resource..............................................3
1.15 Holdings.........................................................3
1.16 Incremental Cost.................................................4
1.17 Industry Standards...............................................4
1.18 Interconnection Constraints......................................4
1.19 Party or Parties.................................................4
1.20 Progress.........................................................4
1.21 Native Load Customer.............................................4
1.22 Off-System Purchases.............................................4
1.23 Off-System Sales.................................................5
1.24 Operating Committee..............................................5
1.25 Service Schedules................................................5
1.26 System Emergency.................................................5
1.27 Trading and Marketing Activities.................................5
1.28 Trading and Market Realization...................................5
ARTICLE II Term Of Agreement.................................................5
2.1 Term.............................................................5
2.2 Periodic Review..................................................6
ARTICLE III Objectives.......................................................6
3.1 Purpose..........................................................6
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ARTICLE IV Relationship To Other Agreements And Services.....................6
4.1 Scope............................................................6
ARTICLE V Agent..............................................................7
5.1 Agent's Functions................................................7
5.2 Coordinating with Operating Committee............................8
ARTICLE VI Composition And Duties Of The Operating Committee.................9
6.1 Operating Committee..............................................9
6.2 Meeting Dates....................................................9
6.3 Decisions........................................................9
6.4 Duties...........................................................9
ARTICLE VII Coordinated Planning And Operation..............................10
7.1 Coordinated System Planning.....................................10
7.2 Combined System Dispatch........................................11
7.3 Capacity Exchange...............................................12
7.4 Energy Exchange.................................................13
7.5 Emergency Response..............................................13
ARTICLE VIII Trading And Marketing..........................................13
8.1 Centralized Trading and Marketing Activities....................13
8.2 Coordination with Agent.........................................14
ARTICLE IX Assignment Of Costs And Benefits Of Coordinated Operations.......14
9.1 Administrative Costs............................................14
9.2 Service Schedules...............................................14
ARTICLE X Billing Procedures................................................15
10.1 Records.........................................................15
10.2 Monthly Statements..............................................15
10.3 Xxxxxxxx and Payments...........................................16
10.4 Taxes...........................................................16
ARTICLE XI Force Majeure....................................................16
11.1 Events Excusing Performance.....................................16
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ARTICLE XII Industry Standards..............................................17
12.1 Adherence to Reliability Criteria...............................17
ARTICLE XIII General........................................................17
13.1 No Third Party Beneficiaries....................................17
13.2 Waivers.........................................................18
13.3 Successors and Assigns..........................................18
13.4 Liability and Indemnification...................................18
13.5 Section Headings................................................19
13.6 Notice..........................................................19
ARTICLE XIV Regulatory Approval.............................................19
14.1 Regulatory Authorization........................................19
14.2 Changes.........................................................20
SERVICE SCHEDULE A ALLOCATION OF CAPACITY COSTS AND
PURCHASED POWER COSTS..................................................A-1
SERVICE SCHEDULE B PRICING FOR SYSTEM CAPACITY AND
ASSOCIATED ENERGY EXCHANGES............................................B-1
SERVICE SCHEDULE C PRICING FOR SYSTEM ENERGY EXCHANGES.....................C-1
SERVICE SCHEDULE D ALLOCATION OF TRADING AND MARKETING
REALIZATIONS...........................................................D-1
SYSTEM INTEGRATION AGREEMENT
BETWEEN
CAROLINA POWER & LIGHT COMPANY
AND
FLORIDA POWER CORPORATION
THIS SYSTEM INTEGRATION AGREEMENT ("Agreement") is made and entered
into as of the ___ day of __________, 2000 by and between Carolina Power & Light
Company ("CP&L"), a North Carolina corporation, and Florida Power Corporation
("FPC"), a Florida corporation. CP&L and FPC are referred to herein collectively
as the "Parties" and individually as a "Party."
WHEREAS, CP&L and FPC each owns and operates electric generation,
transmission and distribution facilities with which it is engaged in the
business of generating, transmitting and selling electric power and energy to
the general public and to other electric utilities; and
WHEREAS, Florida Progress Corporation, the parent company of FPC
("Progress"), CP&L and CP&L Holdings, Inc. ("Holdings"), an affiliate of CP&L,
have entered into an Agreement and Plan of Exchange dated August 22, 1999 (the
"Exchange Agreement"); and
WHEREAS, following the effective date of the stock exchange provided
for in the Exchange Agreement (the "Exchange"), Holdings will be the parent
holding company of both CP&L and Progress; and
WHEREAS, following the effective date of the Exchange, both CP&L and
FPC will operate as public utility operating subsidiaries of Holdings; and
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WHEREAS, CP&L and FPC desire to establish a framework under which
their power supply resources will to the extent practicable be planned,
operated, maintained and dispatched on a coordinated basis;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the Parties mutually agree as
follows: ARTICLE I DEFINITIONS
1.1 AGENT means the Parties' designated representative or
representatives for the purposes specified in Section 5.1 and elsewhere in this
Agreement.
1.2 AGREEMENT means this System Integration Agreement, including
all Service Schedules and attachments hereto.
1.3 COMBINED System means the CP&L East Control Area, the CP&L
West Control Area and the FPC Control Area.
1.4 CONTROL AREA means an electric system or systems bounded by
interconnection metering and telemetry, capable of controlling generation to
maintain its interchange schedule with other Control Areas and contributing to
frequency regulation of the interconnection.
1.5 CP&L means Carolina Power & Light Company.
1.6 CP&L EAST CONTROL AREA means the electric generation,
transmission and distribution facilities of CP&L that are operated as a Control
Area in the coastal plain of North Carolina extending to the Atlantic Ocean
between the Pamlico River and the South Carolina border, the lower Piedmont
section of North Carolina and an area of northeastern South Carolina.
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1.7 CP&L WEST CONTROL AREA means the electric generation,
transmission and distribution facilities of CP&L that are operated as a Control
Area in western North Carolina in and around the City of Asheville.
1.8 DECREMENTAL COST means the costs avoided by a Party solely by
reason of its purchase of an incremental amount of energy, such as costs for
fuel, reactant, labor, operation, maintenance, start-up, fuel handling, taxes,
emission allowances, and transmission and ancillary service charges. Such costs
may also include costs that otherwise would have been paid for energy to third
parties where the Party has an existing contractual entitlement to purchase
energy.
1.9 EXCHANGE means the stock exchange contemplated by the
Exchange Agreement.
1.10 EXCHANGE AGREEMENT means the Agreement and Plan of Exchange
dated August 22, 1999 among Progress, CP&L and Holdings.
1.11 FERC means the Federal Energy Regulatory Commission or a
successor agency having jurisdiction over this Agreement.
1.12 FPC means Florida Power Corporation.
1.13 FPC CONTROL AREA means the electric generation, transmission
and distribution facilities of FPC that are operated as a Control Area in
peninsular Florida.
1.14 GENERATING RESOURCE means the electric power generating
facilities or capacity owned by or under contract to a Party or Parties to meet
the capacity and energy needs of the Party or Parties, including Off-System
Sales.
1.15 HOLDINGS means CP&L Holdings, Inc.
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1.16 INCREMENTAL COST means any costs incurred by a Party solely
by reason of its provision of an incremental amount of energy, such as costs for
fuel, reactant, labor, operation, maintenance, start-up, fuel handling, taxes,
emission allowances, and transmission and ancillary service charges and losses.
Such costs may also include costs paid for energy to third parties where the
Party has an existing contractual entitlement to purchase energy.
1.17 INDUSTRY STANDARDS means those principles, guides, criteria,
standards and practices referred to in Section 12.1.
1.18 INTERCONNECTION CONSTRAINTS has the meaning ascribed to that
term in Section 7.2.
1.19 PARTY OR PARTIES means CP&L, FPC or both as the context
warrants.
1.20 PROGRESS means Florida Progress Corporation.
1.21 NATIVE LOAD CUSTOMER for purposes of this Agreement means a
wholesale or retail power customer on whose behalf a Party, by statute,
franchise, regulatory requirement, or firm power supply contract, has undertaken
an obligation to supply electricity to reliably meet the electric needs of such
customer. The term "Native Load Customer" for purposes of this Agreement
excludes customers and that portion of a customer's load served pursuant to
contracts that do not obligate the supplier to install capacity to meet the
customer's load requirements.
1.22 OFF-SYSTEM PURCHASES means purchases from a third party of
energy and/or capacity to reduce costs or to provide reliability for the
Combined System or to engage in Trading and Marketing Activities.
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1.23 OFF-SYSTEM SALES means all sales of power and energy to
non-Native Load Customers of the Parties.
1.24 OPERATING COMMITTEE means the administrative body established
pursuant to Article VI for the purposes therein specified.
1.25 SERVICE SCHEDULES means the Service Schedules attached to
this Agreement and those that later may be agreed to by the Parties and accepted
for filing by the FERC.
1.26 SYSTEM EMERGENCY means a condition which, if not promptly
corrected, threatens to cause imminent harm to persons or property, including
the equipment of a Party or a third party, or threatens the reliability of
electric service provided by a Party to Native Load Customers.
1.27 TRADING AND MARKETING ACTIVITIES means all Off-System Sales
and Off-System Purchases (other than purchases used to serve Native Load
Customers) conducted on behalf of the Parties.
1.28 TRADING AND MARKET REALIZATION means the difference between
(i) revenues collected from Trading and Marketing Activities and (ii) the
Incremental Cost of such Trading and Marketing Activities.
ARTICLE II
TERM OF AGREEMENT
2.1 TERM
Subject to FERC approval or acceptance for filing, this Agreement
shall take effect upon the effective date of the Exchange, and shall continue in
force and effect for a period of five (5) years from the effective date,
continuing thereafter until terminated by mutual agreement or upon twelve (12)
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months' written notice from one Party to the other.
2.2 PERIODIC REVIEW This Agreement will be reviewed periodically
by the Operating Committee to determine whether revisions are necessary or
appropriate.
ARTICLE III
OBJECTIVES
3.1 PURPOSE
The purpose of this Agreement is to provide the contractual basis for
integration of the Combined System, including the coordinated planning,
operation and maintenance of the power supply resources of the Combined System,
to achieve economies consistent with the provision of reliable electric service
and an equitable sharing of the benefits and costs of such coordinated
arrangements.
ARTICLE IV
RELATIONSHIP TO OTHER AGREEMENTS AND SERVICES
4.1 SCOPE
This Agreement is intended to apply in addition to and not in lieu of
any existing tariffs, service agreements or similar commitments of the Parties.
The provisions of this Agreement shall, to the extent practicable, be construed
and applied in a manner that is consistent with such preexisting commitments.
This Agreement is not intended to preclude the Parties from entering into other
arrangements between or among themselves and others. This Agreement applies to
the Generating Resources and loads served by the Parties and does not apply to
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the transmission facilities owned or operated by the Parties. The transactions
contemplated by this Agreement may be subject to and limited from time-to-time
by state and federal laws, or the regulations, rules and orders of applicable
regulatory agencies regarding affiliate transactions.
ARTICLE V
AGENT
5.1 AGENT'S FUNCTIONS
The Operating Committee shall designate an Agent or Agents for the
purposes set forth in this section. Unless the Parties agree otherwise, the
Agent shall be either CP&L or a services company subsidiary of Holdings;
provided, however, that the Operating Committee may in its discretion assign
some of the following agency functions to a services company and others to CP&L
in which event references in this Agreement to the Agent shall be deemed to mean
the entity to which the applicable agency function has been assigned. The agency
functions shall include:
(a) coordinating the planning and design of generation to be
installed by or on behalf of the Parties and the acquisition
and disposition of Generating Resources;
(b) coordinating the operation and maintenance of the Parties'
Generating Resources;
(c) coordinating the economic dispatch of the Parties'
Generating Resources;
(d) coordinating Trading and Marketing Activities;
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(e) coordinating fuel purchasing and transportation and
treatment of emission allowances;
(f) providing and/or acquiring any additional power supply
services for the loads served and sales made on behalf of
the Parties;
(g) developing bills and billing information between the Parties
pursuant to this Agreement;
(h) conducting other shared services functions on behalf of the
Parties, including but not limited to accounting, audit,
billing, corporate relations, finance, human resources,
information technology, investor relations, legal,
regulatory and strategic planning functions; and
(i) performing such other activities and duties as may be
assigned from time to time by the Operating Committee.
5.2 COORDINATING WITH OPERATING COMMITTEE
Except as expressly established otherwise in this Agreement, the Agent
shall perform each of the duties listed in Section 5.1 in consultation with the
Operating Committee. With the prior written consent of the Operating Committee,
the Agent may delegate all or a part of its responsibilities under this
Agreement to another entity.
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ARTICLE VI
COMPOSITION AND DUTIES OF THE OPERATING COMMITTEE
6.1 OPERATING COMMITTEE
The Operating Committee is the administrative body created to
administer this Agreement and shall consist of three (3) members. One member
shall be a representative of CP&L, one member shall be a representative of FPC
and the third member shall be a representative of the services company
subsidiary of Holdings.
6.2 MEETING DATES
The Operating Committee shall hold meetings at such times, means and
places as the members shall determine from time to time. Minutes of each
Operating Committee meeting shall be prepared and maintained.
6.3 DECISIONS
All decisions of the Operating Committee shall be by a majority vote
of the members present or voting by proxy at the meeting at which the vote is
taken. As necessary, recommendations will be made to such officers and directors
of the Parties as may be appropriate.
6.4 DUTIES
The Operating Committee shall have the following duties, unless such
duties are otherwise assigned by a vote of the Operating Committee to the Agent,
in which case the Agent shall perform such duties. The Operating Committee will
be responsible for:
(a) administering this Agreement and recommending any amendments
hereto, including such amendments which could result from a
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change in regulatory requirements applicable to a Party or
its Generating Resources;
(b) overseeing operation of the Parties' Generating Resources;
(c) reviewing and making recommendations concerning the
proportional sharing of costs and benefits under this
Agreement;
(d) reviewing and, if necessary, amending the duties and
responsibilities of the Agent;
(e) evaluating and making recommendations concerning capacity
additions; and
(f) ensuring coordination for other matters not specifically
provided for herein that the Operating Committee considers
necessary to operate the Parties' Generating Resources
reliably and economically.
ARTICLE VII
COORDINATED PLANNING AND OPERATION
7.1 COORDINATED SYSTEM PLANNING
The Agent, under the direction of the Operating Committee, will on an
annual basis, or more frequently if circumstances dictate, assess the adequacy
of the Parties' Generating Resources from the perspective of each Party and of
the Combined System, taking into account applicable Industry Standards, the
reserve requirements of each applicable state and region, state integrated
resource plans, load forecasts, changing regulatory structures and requirements
and all other criteria applicable by law or regulation to each Party, and will
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make a recommendation whether to install or acquire additional Generating
Resources.
In making this evaluation, the Agent will assess whether economies and
efficiencies may be achieved by selecting common Generating Resources for both
Parties, subject to regulatory, transmission, economic and operational
constraints. Moreover, the Agent will determine whether a Party's resource needs
could be met by the sale of capacity and/or energy on a temporary basis pursuant
to a Service Schedule under this Agreement or by purchase from a non-affiliated
third party.
The Operating Committee based on the Agent's evaluation will decide
whether to add Generating Resources for the benefit of more than one Party. If
it decides to add such resources, the costs associated with such resources will
be allocated to the Parties in proportion to their need for such resources. Such
allocation shall be set forth in a separate agreement or Service Schedule which
shall be subject to any necessary FERC authorization and other required
regulatory approvals.
Notwithstanding any of the foregoing, the actual addition or
disposition of Generating Resources will be conditioned upon compliance with all
applicable legal and regulatory requirements; in no event will the Operating
Committee or Agent acquire, assign, reassign or dispose of Generating Resources
for a Party in contravention of such requirements.
7.2 COMBINED SYSTEM DISPATCH
The Parties will from time to time assess the feasibility and
practicability of consolidating the Control Area functions of the CP&L East
Control Area, the CP&L West Control Area and the FPC Control Area; provided
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that, whether operating as separate or consolidated Control Areas, the Parties'
Generating Resources will be dispatched on a coordinated basis. Except as
provided in this Agreement, the pre-Exchange dispatch priorities and methods
applicable within each Control Area shall continue to apply to that Control Area
so as to preserve the relative dispatch obligations of each Party. The
coordinated dispatch of the Parties' Generating Resources will be conducted on a
least-cost basis subject to limitations on the availability of transmission
entitlements linking the Control Areas (such availability limitations being
referred to hereinafter as the "Interconnection Constraints").
Subject to the Interconnection Constraints, day-ahead unit commitment
will be centrally performed with reference to the Combined System's obligations,
taking into account the specific obligations within each Control Area. The
Control Areas will be dispatched in real time to minimize total generation costs
within the applicable Control Area.
7.3 CAPACITY EXCHANGE
Whenever a Party has capacity available for sale and the other Party
desires to purchase capacity, the Agent shall evaluate the feasibility of a
capacity transaction between the Parties. Such evaluation shall take into
account the Interconnection Constraints, state resource procurement policies and
alternative opportunities for sales and purchases. Transactions for one year or
less shall be arranged under Service Schedule B. The terms of transactions of
longer duration shall be set out in separate agreements or Service Schedules,
which shall be subject to any necessary FERC authorization. Notwithstanding the
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foregoing, a Party will not enter into an arrangement to sell capacity to the
other Party if at the time of making the arrangement, such sale would preclude a
sale of capacity to a third party that would be of greater financial value to
the seller, or the purchasing Party could acquire capacity of comparable amount,
duration and firmness from a third party at lesser cost.
7.4 ENERGY EXCHANGE
Either Party may make energy available from its Generating Resources
to the other Party for the purposes and to the extent required by this
Agreement.
7.5 EMERGENCY RESPONSE
In the event of a System Emergency, no adverse distinction shall be
made between the Native Load Customers of CP&L and those of FPC. Each Party
shall, when so instructed by the Agent, make its Generating Resources available
in response to a System Emergency. Notwithstanding the foregoing, it is
understood that the Interconnection Constraints may limit the ability of one
Party to respond to a System Emergency of the other Party, and that neither
Party is required by this Agreement to curtail or interrupt firm service to its
own Native Load Customers.
ARTICLE VIII
TRADING AND MARKETING
8.1 CENTRALIZED TRADING AND MARKETING ACTIVITIES
Trading and Marketing Activities initiated or concluded after the
effective date of this Agreement shall be coordinated by or at the direction of
the Agent.
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8.2 COORDINATION WITH AGENT
Subject to compliance with applicable codes of conduct, the Parties
shall promptly communicate any potential Trading and Marketing Activities to the
Agent and shall cooperate in evaluating and facilitating such transactions as
are determined by the Agent to be in the interest of the Parties.
ARTICLE IX
ASSIGNMENT OF COSTS AND BENEFITS OF COORDINATED OPERATIONS
9.1 ADMINISTRATIVE COSTS
Costs incurred by the Agent and the Operating Committee to administer
this Agreement shall be borne in equal shares by the Parties unless otherwise
provided by mutual agreement.
9.2 SERVICE SCHEDULES
Except as provided in Section 9.1, the costs and revenues associated
with coordinated operations as described in Articles VII and VIII shall be
distributed in the manner provided from time to time in Service Schedules
attached to and incorporated by reference into this Agreement or by separate
agreement as specified in Article VII. It is understood and agreed that the
Service Schedules are intended to establish an equitable sharing of costs and/or
benefits between the Parties, and that circumstances may, from time to time,
require a reassessment of relative benefits and burdens or of the methods used
in the Service Schedules to apportion the benefits and burdens. Upon a
recommendation of the Operating Committee and agreement between the Parties, any
of the Service Schedules may be amended as of any date agreed to by the Parties,
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subject to receipt of necessary regulatory authorization.
The initial Service Schedules incorporated into this Agreement are as
follows:
SCHEDULE A: Allocation of Capacity Costs and Purchased
----------
Power Costs;
SCHEDULE B: Pricing for System Capacity and Associated
----------
Energy Exchanges;
SCHEDULE C: Pricing for System Energy Exchanges; and
----------
SCHEDULE D Allocation of Trading and Marketing Realizations.
----------
ARTICLE X
BILLING PROCEDURES
10.1 RECORDS
The Agent shall maintain such records as may be necessary to determine
the assignment of costs and benefits of coordinated operations pursuant to this
Agreement. Such records shall be made available to the Parties upon request.
10.2 MONTHLY STATEMENTS
As promptly as practicable after the end of each calendar month, the
Agent shall prepare a statement setting forth the monthly summary of costs and
revenues allocated or assigned to the Parties in sufficient detail as may be
needed for settlements under the provisions of this Agreement. As required, the
Agent may provide such statements on an estimated basis and subsequently adjust
those statements for actual results.
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10.3 XXXXXXXX AND PAYMENTS
The Agent shall handle all billing between the Parties and other
entities with which they engage in Trading and Marketing Activities pursuant to
this Agreement. Payment between the Parties shall be by making remittance of the
net amount billed or by making appropriate accounting entries on the books of
the Parties.
10.4 TAXES
Should any federal, state, or local tax, surcharge or similar
assessment, in addition to those that may now exist, be levied upon the electric
capacity, energy or service to be provided in connection with this Agreement, or
upon the provider of service as measured by the electric capacity, energy or
service, or the revenue therefrom, such additional amount shall be included in
the net billing as described in Section 10.3.
ARTICLE XI
FORCE MAJEURE
11.1 EVENTS EXCUSING PERFORMANCE
Neither Party shall be liable to the other Party for or on account of
any loss, damage, injury, or expense resulting from or arising out of a delay or
failure to perform, either in whole or in part, any of the agreements, covenants
or obligations made by or imposed upon the Parties by this Agreement, by reason
of or through strike, work stoppage of labor, failure of contractors or
suppliers of materials (including fuel), failure of equipment, environmental
restrictions, riot, fire, flood, ice, invasions, civil war, commotion,
insurrection, military or usurped power, order of any court granted in any bona
fide adverse legal proceedings or action, or of any civil or military authority
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either de facto or de jure, explosion, Act of God or the public enemies, or any
other cause reasonably beyond its control and not attributable to its neglect. A
Party experiencing such a delay or failure to perform shall use due diligence to
remove the cause or causes thereof; provided, however, that neither Party shall
be required to add to, modify or upgrade any facilities, or to settle a strike
or labor dispute except when, according to its own best judgment, such action is
advisable.
ARTICLE XII
INDUSTRY STANDARDS
12.1 ADHERENCE TO RELIABILITY CRITERIA
The Parties agree to conform to all applicable national and regional
electric reliability council principles, guides, criteria, and standards and
industry standard practices (collectively, "Industry Standards") as they affect
the implementation of this Agreement.
ARTICLE XIII
GENERAL
13.1 NO THIRD PARTY BENEFICIARIES
This Agreement does not create rights of any character whatsoever in
favor of any person, corporation, association, entity or power supplier, other
than the Parties, and the obligations herein assumed by the Parties are solely
for the use and benefit of said Parties. Nothing in this Agreement shall be
construed as permitting or vesting, or attempting to permit or vest, in any
person, corporation, association, entity or power supplier, other than the
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Parties, any rights hereunder or in any of the resources or facilities owned or
controlled by the Parties or the use thereof.
13.2 WAIVERS
Any waiver at any time by a Party of its rights with respect to a
default under this Agreement, or with respect to any other matter arising in
connection with this Agreement, shall not be deemed a waiver with respect to any
subsequent default or matter. Any delay, short of the statutory period of
limitation, in asserting or enforcing any right under this Agreement, shall not
be deemed a waiver of such right.
13.3 SUCCESSORS AND ASSIGNS
This Agreement shall inure to the benefit of and be binding upon the
Parties only, and their respective successors and assigns, and shall not be
assignable by either Party without the written consent of the other Party except
to a successor in the operation of its properties by reason of a merger,
consolidation, sale or foreclosure whereby substantially all such properties are
acquired by or merged with those of such a successor.
13.4 LIABILITY AND INDEMNIFICATION
Subject to any applicable state or federal law which may specifically
restrict limitations on liability, each Party shall release, indemnify, and hold
harmless the other Party, its directors, officers and employees from and against
any and all liability for loss, damage or expense alleged to arise from, or
incidental to, injury to persons and/or damage to property in connection with
its facilities or the production or transmission of electric energy by or
through such facilities, or related to performance or non-performance of this
Agreement, including any negligence arising hereunder. In no event shall either
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Party be liable to the other Party for any indirect, special, incidental or
consequential damages with respect to any claim arising out of this Agreement.
13.5 SECTION HEADINGS
The descriptive headings the Articles and Sections of this Agreement
are used for convenience only, and shall not modify or restrict any of the terms
and provisions thereof.
13.6 NOTICE
Any notice or demand for performance required or permitted under any
of the provisions of this Agreement shall be deemed to have been given on the
date such notice, in writing, is deposited in the U.S. mail, postage prepaid,
certified or registered mail, addressed to:
R. Xxxx Xxxxxx
Vice President,
System Planning and Operations
Carolina Power & Light Company
000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or in such other form or to such other address as the Parties may stipulate.
ARTICLE XIV
REGULATORY APPROVAL
14.1 REGULATORY AUTHORIZATION
This Agreement is subject to and conditioned upon acceptance for
filing without material condition or modification by the FERC. In the event that
this Agreement is not so accepted for filing in its entirety or the FERC
subsequently modifies this Agreement upon complaint or upon its own initiative,
SYSTEM INTEGRATION AGREEMENT BETWEEN
CAROLINA POWER & LIGHT COMPANY AND FLORIDA POWER CORPORATION
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either Party may notwithstanding the notice provisions in Section 2.1, terminate
this Agreement immediately upon written notice to the other Party.
14.2 CHANGES
It is contemplated by the Parties that it may be appropriate from time
to time to change, amend, modify or supplement this Agreement, including the
Service Schedules and any other attachments that may be made a part of this
Agreement, to reflect changes in operating practices or costs of operations or
for other reasons. Any such changes to this Agreement shall be in writing
executed by the Parties, subject to necessary regulatory authorizations.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed and attested by their duly authorized officers on the day and year
first above written.
CAROLINA POWER & LIGHT COMPANY
By:
------------------------------------
Title:
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FLORIDA POWER CORPORATION
By:
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Title:
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SYSTEM INTEGRATION AGREEMENT BETWEEN
CAROLINA POWER & LIGHT COMPANY AND FLORIDA POWER CORPORATION
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SERVICE SCHEDULE A
ALLOCATION OF CAPACITY COSTS
AND PURCHASED POWER COSTS
A1 - DURATION
-------------
This Service Schedule A shall become effective and binding when the
System Integration Agreement becomes effective, and shall continue in full force
and effect throughout the duration of such Agreement, except as provided in
Sections 9.1 and 14.2 of the Agreement. This Service Schedule A is a part of the
Agreement and, as such, the use of terms in this Service Schedule A that are
defined in the Agreement shall have the same meanings as set forth in the
Agreement.
A2 - CAPACITY COSTS
-------------------
CP&L and FPC each shall continue to bear responsibility individually
for all capacity costs related to its respective Generating Resources that were
in commercial operation as of the effective date of the Exchange. Unless
otherwise determined by the Operating Committee, the capacity costs related to
new Generating Resources that have been initiated by a Party but are not yet in
commercial operation as of the effective date of the Exchange also shall be
borne individually by the applicable Party. In the event that the Operating
Committee determines that any of such capacity costs should be allocated between
the Parties, the method of allocation shall be specified in a separate agreement
or Service Schedule which shall be subject to any necessary FERC authorization
and other required regulatory approvals. Similarly, the Operating Committee
SYSTEM INTEGRATION AGREEMENT BETWEEN
CAROLINA POWER & LIGHT COMPANY AND FLORIDA POWER CORPORATION
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shall determine an appropriate assignment or allocation of capacity costs
related to new Generating Resources that have not yet been initiated as of the
effective date of the Exchange. In the event that the Operating Committee
determines that any such capacity costs should be allocated between the Parties,
the method of allocation shall be specified in a separate agreement or Service
Schedule which shall be subject to any necessary FERC authorization.
A3 - PURCHASED POWER COSTS
---------------------------
Except in the case of (i) an Off-System Purchase that is allocated by
the Agent to a Trading and Marketing Activity, and (ii) capacity costs assigned
or allocated pursuant to Section A2 above, the cost of purchased power shall be
assigned to the Party that takes physical delivery of the energy.
SYSTEM INTEGRATION AGREEMENT BETWEEN
CAROLINA POWER & LIGHT COMPANY AND FLORIDA POWER CORPORATION
PAGE B-1
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SERVICE SCHEDULE B
PRICING FOR SYSTEM CAPACITY AND
ASSOCIATED ENERGY EXCHANGES
B1 - DURATION
-------------
This Service Schedule B shall become effective and binding when the
System Integration Agreement becomes effective, and shall continue in full force
and effect throughout the duration of such Agreement, except as provided in
Sections 9.1 and 14.2 of the Agreement. This Service Schedule B is a part of the
Agreement and, as such, the use of terms in this Service Schedule B that are
defined in the Agreement shall have the same meanings as set forth in the
Agreement.
B2 - APPLICABILITY
------------------
Capacity and associated energy made available pursuant to this Service
Schedule B is for a duration of one (1) year or less and for a degree of
firmness agreed to by the Parties. Potential capacity exchanges under this
Service Schedule B will be evaluated in accordance with Section 7.3 of the
Agreement. The selling Party ("Seller") shall be required only to provide up to
the amount of capacity reserved by the purchasing Party ("Purchaser") under this
Service Schedule B. Capacity and associated energy will be provided under this
Service Schedule B at the high side of the Seller's generator step-up
facilities.
B3 - COMPENSATION AND POSTING
-----------------------------
The prices for capacity and associated energy made available by Seller
under this Service Schedule B shall be the same as the Seller's contemporaneous
prices for capacity and energy of comparable amount, duration and firmness to
SYSTEM INTEGRATION AGREEMENT BETWEEN
CAROLINA POWER & LIGHT COMPANY AND FLORIDA POWER CORPORATION
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non-affiliated entities; provided, however, that such prices may not be lower
than the Seller's system incremental cost over the term of the sale. The prices
offered by the Seller under this Service Schedule B will be offered
contemporaneously for comparable capacity and energy to similarly situated
non-affiliated entities on a publicly available electronic bulletin board. The
prices for all transactions entered into under this Service Schedule B will be
posted contemporaneously on a publicly available electronic bulletin board in
addition to applicable quarterly reporting requirements.
B4 - LIMITATION ON TRANSFERS
-----------------------------
Capacity and associated energy exchanges under this Service Schedule B
will not be made if the Seller may contemporaneously sell the capacity and
associated energy to a third party at a price greater than the above-stated
Seller's price or the Purchaser may contemporaneously purchase capacity and
associated energy of equivalent amount, duration and firmness from a third party
at a price lower than the above-stated Seller's price. Such market opportunities
are to be evaluated based on actual bids or offers, or actual sales or
purchases, from similar transactions occurring at the time of, or immediately
prior to, the time the decision is made to engage in a sale. The Agent shall
maintain records of such evaluations for a minimum period of one (1) year.
SYSTEM INTEGRATION AGREEMENT BETWEEN
CAROLINA POWER & LIGHT COMPANY AND FLORIDA POWER CORPORATION
PAGE C-1
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SERVICE SCHEDULE C
PRICING FOR SYSTEM ENERGY EXCHANGES
C1 - DURATION
-------------
This Service Schedule C shall become effective and binding when the
System Integration Agreement becomes effective, and shall continue in full force
and effect throughout the duration of such Agreement, except as provided in
Sections 9.1 and 14.2 of the Agreement. This Service Schedule C is a part of the
Agreement and, as such, the use of terms in this Service Schedule C that are
defined in the Agreement shall have the same meanings as set forth in the
Agreement.
C2 - APPLICABILITY
------------------
This Service Schedule C governs energy exchanges made pursuant to
Section 7.4 of the Agreement, which are sales of energy not associated with
sales of capacity.
C3 - ENERGY TRANSFER PRICES
---------------------------
The purchasing Party ("Purchaser") shall pay the selling Party
("Seller") the following amount for energy purchased under this Schedule C
("Transfer Price"):
(1) The Seller's Incremental Costs, plus;
(2) One-half the difference between:
(a) the Purchaser's Decremental Costs; and
(b) the Seller's Incremental Costs.
SYSTEM INTEGRATION AGREEMENT BETWEEN
CAROLINA POWER & LIGHT COMPANY AND FLORIDA POWER CORPORATION
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C4 - LIMITATION ON TRANSFERS
----------------------------
Except in a System Emergency, energy exchanges under this Service
Schedule C will not be made available if the Seller may contemporaneously sell
the energy to a third party at a price greater than the Transfer Price or the
Purchaser may contemporaneously purchase energy from a third party at a price
lower than the Transfer Price. Such market opportunities are to be evaluated
based on actual bids or offers, or actual sales or purchases, from similar
transactions occurring at the time of, or immediately prior to, the time the
decision is made to engage in a sale. The Agent shall maintain records of such
evaluations for a minimum period of one (1) year. The Agent shall
contemporaneously post the prices of any energy sales made pursuant to this
Schedule C on a publicly available electronic bulletin board.
SYSTEM INTEGRATION AGREEMENT BETWEEN
CAROLINA POWER & LIGHT COMPANY AND FLORIDA POWER CORPORATION
PAGE D-1
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SERVICE SCHEDULE D
ALLOCATION OF TRADING AND
MARKETING REALIZATIONS
D1 - DURATION
-------------
This Service Schedule D shall become effective and binding when the
System Integration Agreement becomes effective, and shall continue in full force
and effect throughout the duration of such Agreement, except as provided in
Sections 9.1 and 14.2 of the Agreement. This Service Schedule D is a part of the
Agreement and, as such, the use of terms in this Service Schedule D that are
defined in the Agreement shall have the same meanings as set forth in the
Agreement.
D2 - ALLOCATION OF TRADING AND MARKETING ACTIVITY COSTS
-------------------------------------------------------
Each Party shall be reimbursed, before determining Trading and
Marketing Realizations, for its respective Incremental Costs incurred to supply
energy for Trading and Marketing Activities. Costs attributable to Long-Term
(defined for purposes of this Service Schedule D as having a term of more than
one year and having been entered into prior to the effective date of the
Agreement) Off-System Sales shall be assigned to the Party that initiated such
sales. All other overhead costs associated with Trading and Marketing Activities
shall be allocated between the Parties in proportion to the allocation of
Trading and Marketing Realizations pursuant to Section D3 below.
SYSTEM INTEGRATION AGREEMENT BETWEEN
CAROLINA POWER & LIGHT COMPANY AND FLORIDA POWER CORPORATION
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D3 - ALLOCATION OF TRADING AND MARKETING REALIZATIONS
-----------------------------------------------------
The Agent shall determine the Trading and Marketing Realizations on an
hourly basis. The hourly amounts (adjusted to remove realizations associated
with Long-Term Off-System Sales) shall be allocated to the Parties in proportion
to the amount of Generating Resources or other contract rights that each Party
contributed to the Trading and Marketing Activities during the applicable hours.
Realizations associated with Long-Term Off-System Sales shall be assigned to the
Party that initiated such sales.
