EXHIBIT 10.8.8
COMPOSITE CONFORMED COPY
1999 AMENDATORY AGREEMENT
(NON-CASH OUT)
Amendatory Agreement, dated as of November 17, 1999 between VERMONT
YANKEE NUCLEAR POWER CORPORATION ("Vermont Yankee"), a Vermont
corporation, and [NAME OF PURCHASER], a ________ corporation (the
"Purchaser"), amending both the Power Contract, dated February 1, 1968,
as heretofore amended by eight amendments dated June 1, 1972, April 15,
1983, April 24, 1985, June 1, 1985, May 6, 1988, June 15, 1989 and
December 1, 1989 between Vermont Yankee and the Purchaser (the "Power
Contract") and the Additional Power Contract, dated as of February 1,
1984, between Vermont Yankee and the Purchaser (the "Additional Power
Contract").
For good and valuable consideration, the receipt of which is hereby
acknowledged, it is agreed as follows:
1. BASIC UNDERSTANDINGS.
Vermont Yankee was organized in 1966 to provide for the supply of
power to its sponsoring utility companies, including the Purchaser
(collectively, the "Purchasers"). It constructed a nuclear electric
generating unit, having a net capability of approximately 510 megawatts
electric (the "Unit") at a site in Vernon, Vermont. Vermont Yankee was
issued a full-term, Facility Operating License for the Unit by the
Atomic Energy Commission (now the Nuclear Regulatory Commission, which,
together with any successor agencies, is hereafter called the "NRC"),
which license is now stated to expire on March 21, 2012 (the "End of
License Term"). The Unit has been in commercial operation since
December 1, 1972 and continues to operate.
The names of the Purchasers of Vermont Yankee and their respective
interests ("entitlement percentages") in Vermont Yankee and the net
capacity and output of the Unit are as follows:
PURCHASER ENTITLEMENT PERCENTAGE
Central Vermont Public Service Corporation 35.0%
Green Mountain Power Corporation 20.0%
New England Power Company 20.0%
The Connecticut Light and Power Company 9.5%
Central Maine Power Company 4.0%
Public Service Company of New Hampshire 4.0%
Western Massachusetts Electric Company 2.5%
Montaup Electric Company 2.5%
Cambridge Electric Light Company 2.5%
The Unit was conceived to supply economic power on a cost of
service formula basis to the Purchasers. Pursuant to the Power
Contract, Vermont Yankee has agreed to supply to the Purchaser and,
pursuant to separate power contracts substantially identical to the
Power Contract except for the names of the parties (collectively, the
"Initial Power Contracts"), to the other Purchasers all of the capacity
and the electric energy available from the Unit for a thirty year term
extending through November 30, 2002.
Pursuant to the Additional Power Contract, Vermont Yankee has
agreed to supply to the Purchaser, and pursuant to separate additional
power contracts substantially identical to the Additional Power Contract
except for the names of the parties (collectively, the "Additional Power
Contracts"), to the other Purchasers all the capacity and electric
energy available from the Unit during an operative term stated to
commence on December 1, 2002 (when the Initial Power Contracts
terminate) and extending until a date which is 30 days after the later
of the date on which the last of the financial obligations of Vermont
Yankee has been extinguished or the date on which Vermont Yankee is
finally relieved of any obligations under the last of the licenses
(operating or possessory) which it holds, or hereafter receives, from
the NRC with respect to the Unit. The Additional Power Contracts also
provide, in the event of their earlier cancellation, that the
decommissioning cost obligation and the other applicable provisions of
the Additional Power Contracts shall remain in effect to permit final
xxxxxxxx of costs incurred prior to such cancellation.
Pursuant to the Initial Power Contracts and the Additional Power
Contracts, the Purchasers are entitled and obligated to take their
respective entitlement percentages of the capacity and net electrical
output of the Unit during the service life of the Unit and are obligated
to pay therefor monthly their respective entitlement percentages of
Vermont Yankee's cost of service, including decommissioning costs,
whether or not the Unit is operated.
On October 15, 1999, the Board of Directors of Vermont Yankee,
which includes representatives of the Purchasers (including the
Purchaser), after conducting a thorough review of the economics of
continued operation of the Unit until End of License Term in comparison
to other alternatives (including the early shut-down of the Unit)
available to Vermont Yankee, voted to approve an Asset Purchase
Agreement (the "APA") between Vermont Yankee and AmerGen Energy Company
L.L.C., a Delaware limited liability company ("AmerGen"), pursuant to
which the Unit and related assets of Vermont Yankee, including a
pre-funded decommissioning trust, would be sold to AmerGen. The APA
provides, among other things, that Vermont Yankee will enter into a
Power Purchase Agreement (the "PPA") with AmerGen to purchase from
AmerGen one hundred percent (100%) of the actual net output of the Unit
up to its present operating level of approximately 510 megawatts
electric (the "Future Power") for a period ending at the End of License
Term or the earlier permanent shut-down of the Unit, such percentage
being subject to reduction to the extent certain Purchasers having
entitlement percentages aggregating 45% or less elect the option of
cashing-out of the obligation to purchase Future Power and later
"cash-out" by remaining long-term Purchasers. It is intended that the
Future Power will be resold by Vermont Yankee to certain of the
Purchasers, including Purchaser, pursuant to the Power Contracts and
Additional Power Contracts as amended by amendatory agreements similar
to this agreement. Concurrently, the Directors of Vermont Yankee also
approved a Transmission Asset Purchase Agreement (the "TAPA") providing
for the sale of certain transmission assets to Vermont Electric Power
Company, Inc. ("Velco") and the payment by Vermont Yankee of certain
support charges to Velco (the "TAPA Obligations").
As a consequence of the APA, the PPA and the TAPA, Vermont Yankee
and the Purchaser propose to further amend the Power Contract and the
Additional Power Contract in various respects in order (i) to release
Vermont Yankee from any further obligations under said contracts with
respect to the operation of the Unit, (ii) to clarify and confirm
provisions for the recovery under said contracts of the remaining
unamortized costs previously incurred by Vermont Yankee in providing
capacity and energy from the Unit prior to the Effective Date (as
hereinafter defined) and of the costs of decommissioning the Unit at the
end of its useful life (including, without limitation, the costs of
maintaining the Unit in a safe condition following its shutdown and
prior to its decontamination and dismantlement and the costs of storing
the Unit's spent nuclear fuel until it is removed by the Department of
Energy), (iii) to provide for the recovery of any costs or liabilities
assumed by Vermont Yankee under the APA and the TAPA and of Vermont
Yankee's on-going administrative expenses, and (iv) to provide for the
resale at cost by Vermont Yankee to the Purchaser of the Purchaser's
aliquot share of the Future Power to be purchased by Vermont Yankee from
AmerGen pursuant to the PPA.
Vermont Yankee and the Purchaser have agreed to enter into this
Amendatory Agreement. Concurrently herewith each of the other Purchasers
is entering into an amendatory agreement which is identical hereto
except for the necessary changes in the names of the parties and, where
appropriate, the inclusion or exclusion of the obligation to purchase an
aliquot share of the Future Power.
2. PARTIES' CONTRACTUAL COMMITMENTS.
Vermont Yankee and the Purchaser each acknowledge that the other
has faithfully performed its obligations under the Power Contract. The
Purchaser hereby reconfirms its obligations under the Power Contract and
the Additional Power Contract to pay its entitlement percentage of
Vermont Yankee's unamortized costs and the decommissioning costs of the
Unit as deferred payment in connection with the capacity and net
electrical output of the Unit previously delivered by Vermont Yankee and
agrees that the decision to sell the Unit as described in Section 1
hereof did not give rise to any cancellation right under Section 9 of
the Power Contract or Section 10 of the Additional Power Contract.
Vermont Yankee and the Purchaser further agree that the Purchaser shall
continue to be entitled and obligated to purchase its aliquot share of
the Future Power produced by the Unit during the terms of the Power
Contract and Additional Power Contract as hereinafter provided, and to
pay a like percentage of Vermont Yankee's costs therefor, and that
Vermont Yankee shall continue to be obligated to sell such Future Power
to the Purchaser during such terms. Recognizing that the APA, by
transferring ownership and operating responsibility for the Unit,
changes the nature of the costs that Vermont Yankee will incur to obtain
Future Power from the Unit for resale to the Purchaser, Vermont Yankee
and the Purchaser further agree that this Amendatory Agreement sets
forth the necessary and appropriate provisions for the continuation of
the foregoing entitlements and obligations.
Except as expressly modified by this Amendatory Agreement, the
provisions of the Power Contract and the Additional Power Contract
remain in full force and effect.
3. EFFECTIVE DATE.
Subject to receipt of FERC approval, this Amendatory Agreement
shall become effective on the Closing Date under the APA (the "Effective
Date").
4. POWER CONTRACT AMENDMENTS.
The Power Contract is hereby amended as follows:
(a) In recognition of the sale of the Unit being effected pursuant
to the APA and the intention of the parties to release Vermont Yankee
from any further obligations with respect to operation of the Unit, the
text of each of Sections 3, 4, 5, 6, 8, 9 and 10 of the Power Contract
is hereby deleted and, in lieu thereof in each instance the words
"Intentionally Deleted and This Section Left Blank" shall be inserted;
provided, however, that the pre-existing text shall remain in effect for
purposes of settling any accounts between the parties for periods prior
to the Effective Date.
(b) A new section 10A is hereby inserted immediately following
Section 10 to read as follows:
"10A. DEFINITIONS.
Unless the context otherwise specifies or requires, each term
defined below, when used in this contract, shall have the meaning
indicated below:
"Adjusted Entitlement Percentage" means the percentage derived by
dividing the Purchaser's entitlement percentage by the aggregate
entitlement percentages of all Purchasers that have not exercised their
Prepayment Options under Section 7A of their respective Power Contracts.
"AmerGen" means AmerGen Energy Company L.L.C., a Delaware limited
liability company.
"APA" means the Asset Purchase Agreement, dated as of November 17,
1999, between Vermont Yankee and AmerGen.
"APA Obligations" means the obligations of Vermont Yankee to
AmerGen under the APA, a schedule of which is attached as Exhibit A
hereto.
"Cash Out Option" means the Power Purchase Agreement Cash-Out
Election as defined in the APA.
"Closing" means the Closing as defined in the APA.
"Credit Agreement" means the loan agreement entered into between
Vermont Yankee and the lending institutions named therein, to be dated
on or before the Effective Date and relating to the borrowing by Vermont
Yankee of the funds needed to prefund the Decommissioning Trust, prepay
its outstanding Bonds on the Effective Date and defray other costs in
connection with the Closing.
"Effective Date" means the Closing Date under the APA.
"Entitlement percentage" has the meaning provided in Section 1
hereof.
"End of License Term" means March 21, 2012.
"End of Term Date" means the earlier of the End of License Term or
the date on which the Unit is permanently removed from service.
"Future Power" means the aggregate energy, capacity and ancillary
products actually produced by, or available from, the Unit in accordance
with the PPA.
"Net capacity" means for any period the actual level at which the
Unit is operated, less station service use and transformer losses.
"PPA" means the Power Purchase Agreement, dated November 17, 1999,
between Vermont Yankee, as buyer, and AmerGen, as seller, a complete
copy of which is attached hereto as Exhibit C.
"PPA Entitlement Percentage" means the Original Sub-Entitlement or,
if applicable, the post-Uprate Sub-Entitlement (as those terms are
defined in the PPA) allocated to the Purchaser in accordance with the
PPA.
"Prepayment Option" has the meaning set forth in Section 7A.
"Purchasers" means the sponsoring utilities named in Section 1
hereof or their respective successors or assigns.
"TAPA" means the Transmission Asset Purchase Agreement, dated as of
November 17, 1999, between Vermont Yankee and Velco.
"TAPA Obligations" means the maintenance and other support
obligations assumed by Vermont Yankee with respect to the transmission
assets conveyed to Velco pursuant to the TAPA, a schedule of which is
attached hereto as Exhibit B.
"Velco" means Vermont Electric Power Company, Inc.
(c) In recognition of the Purchaser's continuing obligation to
reimburse Vermont Yankee for its entitlement percentage of certain of
Vermont Yankee's costs as deferred payment for the capacity and net
electrical output of the Unit previously delivered by Vermont Yankee and
to reflect the change in the manner in which Vermont Yankee will incur
costs to supply the Purchaser with its entitlement percentage of the
Future Power to be purchased pursuant to the PPA by Vermont Yankee from
AmerGen, the provisions of Sections 7 and 7A of the Power Contract are
hereby deleted and new Sections 7, 7A and 7B are inserted in lieu
thereof as follows:
"7. REIMBURSED COSTS
With respect to each month during the balance of the term of this
contract, the Purchaser will pay Vermont Yankee (i) an amount equal to
the Purchaser's entitlement percentage (or the Purchaser's Adjusted
Entitlement Percentage, whichever is applicable, as provided in Section
7A hereof), of each of (a) the portion of Vermont Yankee's Closing Net
Unit Investment allocable to such month, together with one-twelfth of
the composite percentage for such month of the Closing Net Unit
Investment as most recently determined in accordance with this Section
7, and (b) Vermont Yankee's Total Decommissioning Obligation for such
month, and (ii) an amount equal to the Purchaser's entitlement
percentage of the sum of (c) Vermont Yankee's total operating expenses
for such month, plus (d) Vermont Yankee's APA Obligations, if any, for
such month, plus (e) Vermont Yankee's TAPA Obligations, if any, for such
month, plus (f) an amount equal to one-twelfth of the equity percentage
for such month of the Closing Net Unit Investment and Decommissioning
Borrowing, each as most recently determined in accordance with this
Section 7; PROVIDED, HOWEVER, that for any month during the term of this
contract commencing on or after the date on which the Purchaser has
exercised its Prepayment Option, the Purchaser will no longer be
obligated to make further payments under clause (i) above.
"Composite percentage" shall be computed as of the Effective Date
and as of the last day of each month thereafter (the "computation date")
and for any month the composite percentage shall be that computed as of
the most recent computation date. "Composite percentage" as of a
computation date shall be the sum of (i) the equity percentage as of
such date multiplied by the percentage which equity investment as of
such date is of the total capital as of such date, plus (ii) the stated
interest rate per annum of each principal amount of indebtedness (other
than the Decommissioning Borrowing) bearing a particular rate of
interest outstanding on such date for money borrowed from persons other
than Purchasers multiplied by the percentage which such principal amount
is of total capital as of such date.
"Equity percentage" as of any date shall be whatever percentage may
be authorized from time to time by FERC.
"Common stock equity investment" as of any date shall consist of
equity investment as of such date less the aggregate par value of all
issues of preferred stock outstanding on such date.
"Equity investment" as of any date shall consist of the sum of (i)
all amounts theretofore paid to Vermont Yankee for all capital stock
theretofore issued (taken at the total par value thereof plus the total
of all amounts in an excess of such par value paid thereon); plus all
capital contributions, loans and advances theretofore made to Vermont
Yankee by its Purchasers, less the sum of any amounts distributed by
Vermont Yankee to its Purchasers or stockholders in the form of stock
repurchases or redemptions, return of capital or repayments of loans and
advances; plus (ii) any credit balance in the capital surplus account
(not included under (i)) and in earned surplus account on the books of
Vermont Yankee as of such date.
"Total capital" as of any date shall be the equity investment plus
the total of all indebtedness then outstanding for money borrowed from
other than Vermont Yankee's Purchasers, excluding Decommissioning
Borrowing.
"Uniform System" shall mean the Uniform System of Accounts
prescribed by the Federal Power Commission for Class A and Class B
Public Utilities and Licensees as in effect on the date of this contract
and as said System may be hereafter amended to take account of private
ownership of special nuclear material.
Vermont Yankee's "operating expenses" shall include all expenses
incurred by Vermont Yankee after the Effective Date for administrative
and general expenses which would be properly chargeable for
Administrative and General Expenses by an operating electric utility,
less any applicable credits thereto, in accordance with the Uniform
System.
The "net Unit investment" shall consist, in each case with respect
to the Unit, of (i) the aggregate amount properly chargeable at the time
in accordance with the Uniform System of Vermont Yankee's electric plant
accounts (including construction work in progress), less the sum of (x)
the aggregate amount included in operating expenses from the plant
completion date to the date in question on account of depreciation
accruals (and amortization, if any, of property losses) reduced by the
aggregate of all amounts charged during such period against the
accumulated provision for depreciation plus (y) the amount of net
available cash; plus (ii) the aggregate amount properly chargeable at
the time in accordance with the Uniform System to accounts representing
fuel assemblies and components (including nuclear materials) and other
materials and supplies, less the balance, if any, at the time of the
accumulated amortization thereof; plus (iii) such reasonable allowances
for prepaid items and cash working capital as may from time to time be
determined by Vermont Yankee; less (z) the net proceeds received from
the sale of any assets properly included in said electric plant
accounts. However, for purposes of this contract, the net amount
included at any date after the plant completion date in net Unit
investment under clause (i) of the immediately preceding sentence shall
in no event be less than the excess of:
(a) the amount properly chargeable at the plant completion date in
accordance with the Uniform System to electric plant accounts (including
construction work in progress) with respect to the Unit,
over
(b) the sum of (x) the aggregate minimum amount required by this
Section 7 to be included in operating expenses from the plant completion
date to the date in question on account of depreciation accruals (and
amortization, if any, or property losses) plus (y) the amount of net
available cash.
The net Unit investment shall be determined as of the plant
completion date and thereafter as of the commencement of each calendar
year, or, if Vermont Yankee elects, at more frequent intervals.
The "Closing Net Unit Investment" means the amount of net Unit
investment determined as of the Effective Date, which amount shall be
amortized in equal monthly amounts during the period beginning on the
Effective Date and ending on the End of License Term.
"Net available cash" means, at any date as of which the amount
thereof is to be determined, the excess of (a) the aggregate amount
received by Vermont Yankee after the plant completion date and prior to
two years before the determination date as insurance proceeds on account
of loss or damage to the Unit or as the proceeds of a sale or
condemnation of a portion of the Unit, over (b) the aggregate amount
expended after the plant completion date and prior to the determination
date on account of rebuilding, repairs, replacements and additions to
the Unit, provided that insurance proceeds received with respect to a
particular loss shall be taken into account for purposes of the
foregoing computation only if the amount received with respect to the
loss exceeds $150,000.
"Total Decommissioning Obligation" for any month shall mean the sum
of (i) an amount equal to the principal payment, if any, of the
Decommissioning Borrowing due for such month plus (ii) the interest
payment due for such month on the Decommissioning Borrowing.
"Decommissioning Borrowing" means the balance outstanding from time
to time under (i) the Credit Agreement or (ii) any refinancing of any
unpaid balance of such borrowing.
Vermont Yankee will xxxx the Purchaser, as soon as practicable
after the end of each month, for all amounts payable by the Purchaser
pursuant to this Section 7 with respect to the particular month. 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 paid in
full within 10 days after receipt thereof by the Purchaser.
7A. PREPAYMENT OPTION
The Purchaser is hereby granted an option to prepay (the
"Prepayment Option"), (i) in full but not in part, its entitlement
percentage of Vermont Yankee's Closing Net Unit Investment (excluding
the portion thereof represented by the Purchaser's equity investment in
Vermont Yankee) and Decommissioning Borrowing, together with any
interest accrued but unpaid thereon, and (ii) with Vermont Yankee's
consent, in full but not in part, the portion of Vermont Yankee's
Closing Net Unit Investment represented by the Purchaser's equity
investment in Vermont Yankee, together with an amount equal to the
equity percentage return accrued and unpaid thereon, all determined as
of the close of business on the day prior to the exercise date;
provided, however, that (x) the option under clause (ii) may only be
exercised concurrently with, or subsequent to, the exercise of the
option under clause (i) and (y) promptly after such exercise by
Purchaser, Vermont Yankee shall redeem the Purchaser's equity investment
in Vermont Yankee. Such option or options to be exercisable on the
Effective Date or on the first day of any calendar quarter thereafter
during the term of this contract (an "exercise date"). At least 30 days
prior to the estimated Effective Date, Vermont Yankee shall give written
notice to the Purchaser providing its best estimate of the amount
subject to these options as of the Effective Date. Thereafter, upon
written request by the Purchaser at least 60 days prior to the next
exercise date, Vermont Yankee shall provide to the Purchaser its best
estimate of the amounts subject to these options as of such exercise
date. Purchaser shall give Vermont Yankee at least 15 days prior
written notice of its intent to exercise one or both of these options,
which notice shall be binding and may not be withdrawn without the prior
written consent of Vermont Yankee. Within ten days after receipt of
such notice, Vermont Yankee shall provide the Purchaser with a
calculation of the prepayment amount due upon exercise. After making
such prepayment and, if appropriate, delivering to Vermont Yankee the
certificates evidencing the Purchaser's equity investment in Vermont
Yankee together with duly endorsed stock powers, the Purchaser shall no
longer be responsible for paying any amounts under clause (i) of the
first paragraph of Section 7 with respect to the period following the
exercise of the Prepayment Option or, if the option under clause (ii)
above has been exercised, be a stockholder of Vermont Yankee. After
making such prepayment, the Purchaser shall, nevertheless, remain
obligated to pay all other amounts due under this contract, including,
without limitation, amounts billed under clause (ii) of the first
paragraph of Section 7, provided that until the option under clause (ii)
above has been exercised, the amount billable to Purchaser under clause
(ii)(f) of the first paragraph of Section 7 shall be limited to
one-twelfth of the equity percentage for such month of the portion of
the Closing Net Unit Investment evidenced by equity investment in
Vermont Yankee, and provided further that after the option under clause
(ii) above has been exercised Purchaser shall not be obligated for any
further payments under clause (ii)(f) of the first paragraph of Section
7.
In the event that any other Purchasers exercise their Prepayment
Options under any of the other Initial Power Contracts and the Purchaser
has not exercised its Prepayment Option, then from and after the
exercise of each such other Prepayment Option the Purchaser shall pay
its Adjusted Entitlement Percentage of amounts due under clause (i) of
the first paragraph of Section 7 hereof.
7B. PURCHASE OF FUTURE POWER, DELIVERY AND PAYMENTS.
With respect to each month during the period commencing on the
Effective Date and ending on the End of Term Date, the Purchaser will be
entitled and obligated to take its PPA Entitlement Percentage, of the
Future Power. The Purchaser's PPA Entitlement Percentage of the Future
Power will be delivered to and accepted by it at the Producer's Delivery
Point (as defined in the PPA). All deliveries will be made in the form
of 3-phase, 60 cycle, alternating current at a nominal voltage of
345,000 volts. The Purchaser will make its own arrangements for the
transmission of its share of the Future Power. In accordance with the
PPA, AmerGen will be responsible for maintaining metering and
telemetering with respect to the Future Power.
With respect to each month during the aforesaid period, Purchaser
will pay Vermont Yankee for the Future Power actually delivered to the
Purchaser an amount per megawatt hour based upon the applicable price
set forth in the PPA.
Vermont Yankee will xxxx the Purchaser, as soon as practicable
after the end of each month, for all amounts payable by the Purchaser
pursuant to this Section 7B with respect to the particular month. 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 paid in
full within 10 days after receipt thereof by the Purchaser."
(d) Section 14 of the Power Contract is hereby amended by adding
the following sentence at the end thereof:
"Notwithstanding the foregoing, (a) Purchaser (or its assigns) may
assign its interest in this contract only (i) to a third party that has
a credit rating equal to the higher of that of the assignor or of
investment grade as determined by a nationally rated service, or (ii) to
a single purpose entity whose obligations hereunder are guaranteed by a
parent that has such a credit rating, or (iii) in connection with a
merger, consolidation or sale of substantially all its assets to another
party that has a credit rating at least equal to that of the Purchaser
(or its assigns), and (b) the Purchaser hereby consents to an assignment
by Vermont Yankee of its interest in this contract to the special
purpose entity described or referred to in Schedule 7.1(z) of the APA
and agrees that Purchaser's obligations hereunder shall not be affected
by such assignment."
5. ADDITIONAL POWER CONTRACT AMENDMENTS.
The Additional Power Contract is hereby amended as follows:
(a) In recognition of the sale of the Unit being effected pursuant
to the APA and, the intention of the parties to release Vermont Yankee
from any further obligations with respect to operation of the Unit, the
text of each of Sections 3, 4, 5, 6, 8, 9 and 10 of the Additional Power
Contract is hereby deleted and, in lieu thereof in each instance the
words "Intentionally Deleted and This Section Left Blank" shall be
inserted.
(b) A new section 10A is hereby inserted immediately following
Section 10 to read as follows:
"10A. DEFINITIONS.
Unless the context otherwise specifies or requires, each term
defined below, when used in this contract, shall have the meaning
indicated below:
"Adjusted Entitlement Percentage" means the percentage derived by
dividing the Purchaser's entitlement percentage by the aggregate
entitlement percentages of all Purchasers that have not exercised their
Prepayment Options under their respective Power Contracts.
"AmerGen" means AmerGen Energy Company L.L.C., a Delaware limited
liability company.
"APA" means the Asset Purchase Agreement, dated as of November 17,
1999, between Vermont Yankee and AmerGen.
"APA Obligations" means the obligations of Vermont Yankee to
AmerGen, a schedule of which is attached as Exhibit A hereto.
"Closing" means the Closing as defined in the APA.
"Credit Agreement" means the loan agreement entered into between
Vermont Yankee and the lending institutions named therein, to be dated
on or before the Effective Date and relating to the borrowing by Vermont
Yankee of the funds needed to prefund the Decommissioning Trust, prepay
its outstanding Bonds on the Effective Date and defray other costs in
connection with the Closing.
"Effective Date" means the Closing Date under the APA
"End of License Term" means March 21, 2012.
"End of Term Date" means the earlier of the End of License Term or
the date on which the Unit is permanently removed from service.
"Entitlement percentage" has the meaning provided in Section 1
hereof.
"Future Power" means the aggregate energy, capacity and ancillary
actually produced by, or available from, the Unit in accordance with the
PPA.
"Initial Power Contracts" means the several Power Contracts, dated
as of February 1, 1968, as amended, between Vermont Yankee and each of
the Purchasers.
"Net capacity" means for any period the actual level at which the
Unit is operated, less station service use and transformer losses.
"Operative term" has the meaning provided in Section 2 hereof.
"PPA" means the Power Purchase Agreement, dated November 17, 1999
between Vermont Yankee, as buyer, and AmerGen, as seller, a complete
copy of which is attached hereto as Exhibit C.
"PPA Entitlement Percentage" means the Original Sub-Entitlement or,
if applicable, the post-Uprate Sub-Entitlement (as those terms are
defined in the PPA) allocated to the Purchaser in accordance with the
PPA.
"Prepayment Option" means the option granted to each of the several
Purchasers pursuant to Section 7A of their respective Initial Power
Contracts to prepay their entitlement percentages of certain of Vermont
Yankee's costs.
"Purchasers" means the sponsoring utilities named in Section 1
hereof or their respective successors or assigns.
"TAPA" means the Transmission Asset Purchase Agreement between
Vermont Yankee and Velco, dated as of November 17, 1999.
"TAPA Obligations" means the maintenance and other support
obligations assumed by Vermont Yankee with respect to the transmission
assets conveyed to Velco pursuant to the TAPA, a schedule of which is
attached as Exhibit B hereto.
"Velco" means Vermont Electric Power Company, Inc.
(c) Section 2 of the Additional Power Contract is hereby amended
in full to read as follows:
"The operative term of this contract shall commence on December 1,
2002 notwithstanding the fact that the Unit has been sold to AmerGen and
shall terminate 30 days after the date on which the last of the
respective financial obligations of Vermont Yankee and the Purchaser
which constitute elements of the reimbursed costs calculated pursuant to
Section 7 hereof and the purchase price for Future Power calculated
pursuant to Section 7A hereof has been extinguished."
(d) In recognition of the Purchaser's continuing obligation to
reimburse Vermont Yankee for its entitlement percentage of certain of
Vermont Yankee's costs as deferred payment for the capacity and net
electrical output of the Unit previously delivered by Vermont Yankee and
to reflect the change in the manner in which Vermont Yankee will incur
costs to supply the Purchaser with its entitlement percentage of the
Future Power to be purchased pursuant to the PPA by Vermont Yankee from
AmerGen, the provisions of Section 7 of the Additional Power Contract
are hereby deleted and new Sections 7, 7A and 7B are inserted in lieu
thereof as follows:
"7. REIMBURSED COSTS
With respect to each month during the operative term of this
contract, the Purchaser will pay Vermont Yankee (i) an amount equal to
the Purchaser's entitlement percentage (or the Purchaser's Adjusted
Entitlement Percentage, whichever is applicable, as provided below,) of
each of (a) the portion of Vermont Yankee's Closing Net Unit Investment
applicable to such month, together with one-twelfth of the composite
percentage for such month of the Closing Net Unit Investment as most
recently determined in accordance with this Section 7, and (b) Vermont
Yankee's Total Decommissioning Obligation for such month, and (ii) an
amount equal to the Purchaser's entitlement percentage of the sum of (c)
Vermont Yankee's total operating expenses for such month, plus (d)
Vermont Yankee's APA Obligations, if any, for such month, plus (e)
Vermont Yankee's TAPA Obligations, if any, for such month, plus (f) an
amount equal to one-twelfth of the equity percentage for such month of
the Closing Net Unit Investment and Decommissioning Borrowing, each as
most recently determined in accordance with this Section 7; PROVIDED,
HOWEVER, that for any month during the operative period commencing on or
after the date on which the Purchaser has exercised its Prepayment
Option, the Purchaser will no longer be obligated to make further
payments under clauses (a) and (b) above. In the event that any other
Purchasers have exercised their Prepayment Options under their
respective Initial Power Contracts and the Purchaser has not exercised
its Prepayment Option, then for each month thereafter the Purchaser's
Adjusted Entitlement Percentage shall be applicable to the payment
required by clauses (a) and (b) hereof.
"Composite percentage" shall be computed as of the Effective Date
and as of the last day of each month thereafter (the "computation date")
and for any month the composite percentage shall be that computed as of
the most recent computation date. "Composite percentage" as of a
computation date shall be the sum of (i) the equity percentage as of
such date multiplied by the percentage which equity investment as of
such date is of the total capital as of such date, plus (ii) the stated
interest rate per annum of each principal amount of indebtedness (other
than the Decommissioning Borrowing) bearing a particular rate of
interest outstanding on such date for money borrowed from persons other
than Purchasers multiplied by the percentage which such principal amount
is of total capital as of such date.
"Equity percentage" as of any date shall be whatever percentage may
be authorized from time to time by FERC.
"Common stock equity investment" as of any date shall consist of
equity investment as of such date less the aggregate par value of all
issues of preferred stock outstanding on such date.
"Equity investment" as of any date shall consist of the sum of (i)
all amounts theretofore paid to Vermont Yankee for all capital stock
theretofore issued (taken at the total par value thereof plus the total
of all amounts in an excess of such par value paid thereon); plus all
capital contributions, loans and advances theretofore made to Vermont
Yankee by its Purchasers, less the sum of any amounts distributed by
Vermont Yankee to its Purchasers or stockholders in the form of stock
repurchases or redemptions, return of capital or repayments of loans and
advances; plus (ii) any credit balance in the capital surplus account
(not included under (i)) and in earned surplus account on the books of
Vermont Yankee as of such date.
"Total capital" as of any date shall be the equity investment plus
the total of all indebtedness then outstanding for money borrowed from
other than Vermont Yankee's Purchasers, excluding Decommissioning
Borrowing.
"Uniform System" shall mean the Uniform System of Accounts
prescribed by the Federal Power Commission for Class A and Class B
Public Utilities and Licensees as in effect on the date of this contract
and as said System may be hereafter amended to take account of private
ownership of special nuclear material.
Vermont Yankee's "operating expenses" shall include all expenses
incurred by Vermont Yankee after the Effective Date for administrative
and general expenses which would be properly chargeable for
Administrative and General Expenses by an operating electric utility,
less any applicable credits thereto, in accordance with the Uniform
System.
The "net Unit investment" shall consist, in each case with respect
to the Unit, of (i) the aggregate amount properly chargeable at the time
in accordance with the Uniform System of Vermont Yankee's electric plant
accounts (including construction work in progress), less the sum of (x)
the aggregate amount included in operating expenses from the plant
completion date to the date in question on account of depreciation
accruals (and amortization, if any, of property losses) reduced by the
aggregate of all amounts charged during such period against the
accumulated provision for depreciation plus (y) the amount of net
available cash; plus (ii) the aggregate amount properly chargeable at
the time in accordance with the Uniform System to accounts representing
fuel assemblies and components (including nuclear materials) and other
materials and supplies, less the balance, if any, at the time of the
accumulated amortization thereof; plus (iii) such reasonable allowances
for prepaid items and cash working capital as may from time to time be
determined by Vermont Yankee; less (z) the net proceeds received from
the sale of any assets properly included in said electric plant
accounts. However, for purposes of this contract, the net amount
included at any date after the plant completion date in net Unit
investment under clause (i) of the immediately preceding sentence shall
in no event be less than the excess of:
(a) the amount properly chargeable at the plant completion date in
accordance with the Uniform System to electric plant accounts (including
construction work in progress) with respect to the Unit),
over
(b) the sum of (x) the aggregate minimum amount required by this
Section 7 to be included in operating expenses from the plant completion
date to the date in question on account of depreciation accruals (and
amortization, if any, or property losses) plus (y) the amount of net
available cash.
The net Unit investment shall be determined as of the plant
completion date and thereafter as of the commencement of each calendar
year, or, if Vermont Yankee elects, at more frequent intervals.
The "Closing Net Unit Investment" means the amount of net Unit
investment determined as of the Effective Date, which amount shall be
amortized in equal monthly amounts during the period commencing on the
Effective Date and ending on the End of License Date.
"Net available cash" means, at any date as of which the amount
thereof is to be determined, the excess of (a) the aggregate amount
received by Vermont Yankee after the plant completion date and prior to
two years before the determination date as insurance proceeds on account
of loss or damage to the Unit or as the proceeds of a sale or
condemnation of a portion of the Unit, over (b) the aggregate amount
expended after the plant completion date and prior to the determination
date on account of rebuilding, repairs, replacements and additions to
the Unit, provided that insurance proceeds received with respect to a
particular loss shall be taken into account for purposes of the
foregoing computation only if the amount received with respect to the
loss exceeds $150,000.
"Total Decommissioning Obligation" for any month shall mean the sum
of (i) an amount equal to the principal payment, if any, of the
Decommissioning Borrowing due for such month plus (ii) the interest
payment due for such month on the Decommissioning Borrowing.
"Decommissioning Borrowing" means the balance outstanding from time
to time under (i) the Credit Agreement or (ii) any refinancing of any
unpaid balance of such borrowing.
Vermont Yankee will xxxx the Purchaser, as soon as practicable
after the end of each month, for all amounts payable by the Purchaser
pursuant to this Section 7 with respect to the particular month. 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 paid in
full within 10 days after receipt thereof by the Purchaser.
7A. PREPAYMENT OPTION
The Purchaser is hereby granted an option to prepay (the
"Prepayment Option"), (i) in full but not in part, its entitlement
percentage of Vermont Yankee's Closing Net Unit Investment (excluding
the portion thereof represented by the Purchaser's equity investment in
Vermont Yankee) and Decommissioning Borrowing, together with any
interest accrued but unpaid thereon, and (ii) with Vermont Yankee's
consent, in full but not in part, the portion of Vermont Yankee's
Closing Net Unit Investment represented by the Purchaser's equity
investment in Vermont Yankee, together with an amount equal to the
equity percentage return accrued and unpaid thereon, all determined as
of the close of business on the day prior to the exercise date;
provided, however, that (x) the option under clause (ii) may only be
exercised concurrently with, or subsequent to, the exercise of the
option under clause (i) and (y) promptly after such exercise by
Purchaser, Vermont Yankee shall redeem the Purchaser's equity investment
in Vermont Yankee. Such option or options to be exercisable on the
Effective Date or on the first day of any calendar quarter thereafter
during the term of this contract (an "exercise date"). At least 30 days
prior to the estimated Effective Date, Vermont Yankee shall give written
notice to the Purchaser providing its best estimate of the amount
subject to these options as of the Effective Date. Thereafter, upon
written request by the Purchaser at least 60 days prior to the next
exercise date, Vermont Yankee shall provide to the Purchaser its best
estimate of the amounts subject to these options as of such exercise
date. Purchaser shall give Vermont Yankee at least 15 days prior
written notice of its intent to exercise one or both of these options,
which notice shall be binding and may not be withdrawn without the prior
written consent of Vermont Yankee. Within ten days after receipt of
such notice, Vermont Yankee shall provide the Purchaser with a
calculation of the prepayment amount due upon exercise. After making
such prepayment and, if appropriate, delivering to Vermont Yankee the
certificates evidencing the Purchaser's equity investment in Vermont
Yankee together with duly endorsed stock powers, the Purchaser shall no
longer be responsible for paying any amounts under clause (i) of the
first paragraph of Section 7 with respect to the period following the
exercise of the Prepayment Option or, if the option under clause (ii)
above has been exercised, be a stockholder of Vermont Yankee. After
making such prepayment, the Purchaser shall, nevertheless, remain
obligated to pay all other amounts due under this contract, including,
without limitation, amounts billed under clause (ii) of the first
paragraph of Section 7, provided that until the option under clause (ii)
above has been exercised, the amount billable to Purchaser under clause
(ii)(f) of the first paragraph of Section 7 shall be limited to
one-twelfth of the equity percentage for such month of the portion of
the Closing Net Unit Investment evidenced by equity investment in
Vermont Yankee, and provided further that after the option under clause
(ii) above has been exercised Purchaser shall not be obligated for any
further payments under clause (ii)(f) of the first paragraph of Section
7.
In the event that any other Purchasers exercise their Prepayment
Options under any of the other Initial Power Contracts and the Purchaser
has not exercised its Prepayment Option, then from and after the
exercise of each such other Prepayment Option the Purchaser shall pay
its Adjusted Entitlement Percentage of amounts due under clause (i) of
the first paragraph of Section 7 hereof.
7B. PURCHASE OF FUTURE POWER, DELIVERY AND PAYMENTS.
With respect to each month during the period commencing on the
Effective Date and ending on the End of Term Date, the Purchaser will be
entitled and obligated to take its PPA Entitlement Percentage of the
Future Power. The Purchaser's PPA Entitlement Percentage of the Future
Power will be delivered to and accepted by it at the Producer's Delivery
Point (as defined in the PPA). All deliveries will be made in the form
of 3-phase, 60 cycle, alternating current at a nominal voltage of
345,000 volts. The Purchaser will make its own arrangements for the
transmission of its shares of the Future Power. In accordance with the
PPA, AmerGen will be responsible for maintaining metering and
telemetering with respect to the Future Power.
With respect to each month during the aforesaid period, Purchaser
will pay Vermont Yankee for the Future Power actually delivered to the
Purchaser an amount per kilowatt hour based upon the applicable price
set forth in the PPA.
Vermont Yankee will xxxx the Purchaser, as soon as practicable
after the end of each month, for all amounts payable by the Purchaser
pursuant to this Section 7B with respect to the particular month. 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 paid in
full within 10 days after receipt thereof by the Purchaser."
(e) Section 15 of the Additional Power Contract is hereby amended
by adding the following sentence to the end thereof:
"Notwithstanding the foregoing, (a) Purchaser (or its assigns) may
assign its interest in this contract only (i) to a third party that has
a credit rating equal to the higher of that of the assignor or of
investment grade as determined by a nationally rated service, or (ii) to
a single purpose entity whose obligations hereunder are guaranteed by a
parent that has such a credit rating, or (iii) in connection with a
merger, consolidation or sale of substantially all its assets, to
another party that has a credit rating at least equal to that of the
Purchaser (or its assigns) and (b) the Purchaser hereby consents to an
assignment by Vermont Yankee of its interest in this contract to the
special purpose entity described or referred to in Schedule 7.1(z) of
the APA and agrees that Purchaser's obligations hereunder shall not be
affected by such an assignment."
6. GOVERNMENT REGULATION. This Amendatory Agreement and all rights and
obligations of the Parties hereunder are subject to all applicable
federal, state and local laws and all duly promulgated orders and duly
authorized actions of governmental authorities having proper and valid
jurisdiction over the terms of this Amendatory Agreement. Purchaser
will be obligated to make all payments to Vermont Yankee for purchases
at wholesale of capacity, energy and ancillary products hereunder
regardless of whether or not the Purchaser is permitted to pass along or
recover those payments from its customers. Each of Vermont Yankee and
Purchaser shall not propose, advance or support, and shall vigorously
oppose and defend against, any action by any legislature, agency,
commission, (including the Federal Energy Regulatory Commission), entity
or court that would adversely affect the Parties' rights and benefits
hereunder and each of Vermont Yankee and the Purchaser will vigorously
pursue all actions and remedies to overturn or cure any such action. In
addition, the rates, terms, and conditions contained in this Amendatory
Agreement are not subject to change under Sections 205 or 206 of the
Federal Power Act, as either section may be amended or superseded,
absent the mutual written agreement of the Parties or a finding by the
Federal Energy Regulatory Commission, that this Amendatory Agreement is
not in the public interest.
7. CONFIDENTIALITY. Except as otherwise required by law or for
implementation of this Amendatory Agreement, the Parties must keep
confidential the transactions undertaken pursuant hereto; provided,
however, that the Purchaser may disclose such information on a
confidential basis to third parties in connection with good faith
negotiation for the assignment of Purchaser's interests hereunder.
Nothing herein shall preclude the Purchaser from disclosing the
substance of this Amendatory Agreement to third parties on a
confidential basis in connection with the negotiation of the assignment
of any of its interests herein. Any information provided by either
Party to the other Party pursuant to this Amendatory Agreement and
labeled "CONFIDENTIAL" will be used by the receiving Party solely in
connection with the purposes of this Amendatory Agreement and will not
be disclosed by the receiving Party to any third party, except with the
providing Party's consent. This Section 7 of this Amendatory Agreement
will not prevent either Party from providing any confidential
information received from the other Party to any court or in accordance
with a proper discovery request or in response to the reasonable 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
reasonable efforts to oppose or resist the requested disclosure, as
appropriate under the circumstances, or to otherwise make such
disclosure pursuant to a protective order or other similar arrangement
for confidentiality.
8. MISCELLANEOUS.
(a) MITIGATION OF DAMAGES. In the event of any default by
Purchaser, Vermont Yankee shall have the right to sell the Purchaser's
entitlement percentage of any energy and ancillary products and apply
the proceeds thereof against the amounts owing from the Purchaser.
(b) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment by
their respective officers hereto duly authorized, as of the date first
above written.
VERMONT YANKEE NUCLEAR POWER
CORPORATION
By /s/ X. X. Xxxxxxxxx
Its PRESIDENT AND CHIEF EXECUTIVE OFFICER
Title
Address: Xxx 000, Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000
CENTRAL VERMONT POWER SERVICE
CORPORATION
By /s/ Xxxxxx X. Xxxxx
Its PRESIDENT AND CHIEF EXECUTIVE OFFICER
Title
Address: 00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
GREEN MOUNTAIN POWER CORPORATION
By /s/ Xxxxx Xxxxxx Xxxxx
Its CHIEF FINANCIAL OFFICER
Title
Address: 000 Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
CENTRAL MAINE POWER COMPANY
By /s/ Xxxxx X. Xxxxx
Its PRESIDENT
Title
Address: 00 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
CAMBRIDGE ELECTRIC LIGHT COMPANY
By /s/ X. Xxxxxx
Its PRESIDENT
Title
Address: 000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
EXHIBIT A
TO
1999 AMENDATORY AGREEMENT
APA Obligations
Section 2.4 Excluded Liabilities
Section 6.13(b) One-time fee due to DOE under the DOE Standard
Contract
Section 6.13(c) Operational phase spend fuel storage facility costs up
to 70% of $20.7 million (1999 dollars).
Section 6.14 DOE Decontamination and Decommissioning fees
Section 8.1(b) Indemnification obligations
EXHIBIT B
TO
1999 AMENDATORY AGREEMENT
TAPA Obligations:
Section 5.6(a), (b) and (c) Operating and Capital Costs
Section 7.1(b) and Section 7.2 Indemnities
EXHIBIT C
TO
1999 AMENDATORY AGREEMENT
[Attach copy of PPA]
