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EXHIBIT 10.11
MEMORANDUM OF AGREEMENT
BETWEEN THE
UNITED STATES DEPARTMENT OF ENERGY
AND THE
UNITED STATES ENRICHMENT CORPORATION
THIS AGREEMENT, entered into as of this first day of July, 1993, by and
between the UNITED STATES OF AMERICA (hereinafter referred to as the
"Government"), represented by the SECRETARY OF ENERGY (hereinafter referred to
as the "Secretary"), the statutory head of the DEPARTMENT OF ENERGY (hereinafter
referred to as "DOE"), and the UNITED STATES ENRICHMENT CORPORATION (hereinafter
referred to as "USEC");
WITNESSETH THAT:
WHEREAS, the parties have entered into a Lease Agreement effective July
1, 1993 ("the Lease"), relating to the GDPs;
WHEREAS, the Secretary has determined that certain power purchase
agreements related to the operation of the Portsmouth Gaseous Diffusion Plant
and the Paducah Gaseous Diffusion Plant cannot be transferred to USEC by their
terms; and
WHEREAS, DOE is authorized to continue to receive power under such
agreements and resell such power to USEC at cost;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I - DEFINITIONS
A. As used throughout this Agreement, the following terms shall
have the meanings set forth below:
1. The term "EEI" means Electric Energy, Incorporated, and any
successor.
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2. The term "EEI Power Purchase Agreement" means the May 4, 1951,
Power Agreement, as amended and restated in Modification No. 12, dated September
2, 1987, as further amended, supplemented or modified.
3. The term "OVEC" means Ohio Valley Electric Corporation and any
successor.
4. The term "OVEC Power Purchase Agreement" means the Power
Agreement dated October 15, 1952, between OVEC and the United States of America,
as amended and restated in modification No. 14, effective as of October 15,
1992, as further amended, supplemented, and modified.
5. The term "Power Purchase Agreements" means the EEI Power
Purchase Agreement and the OVEC Power Purchase Agreement.
6. The term "Power Suppliers" means OVEC and EEI.
B. Unless otherwise defined herein or required by the provisions
of this Agreement, all other terms have the meaning as defined in the Lease.
ARTICLE II - PURPOSE OF MEMORANDUM OF AGREEMENT
The general purpose of this memorandum of agreement (MOA) between
DOE and USEC is to clarify the working relationships and responsibility for
liabilities incident to supply of electrical power from OVEC and/or EEI for the
operation of the GDPs pursuant to the Power Purchase Agreements.
ARTICLE III - POWER SUPPLY
1. DOE will make the energy and power purchased through the Power
Purchase Agreements available to USEC.
2. DOE will continue to hold and maintain the Power Purchase
Agreements. DOE will also continue to be responsible for the administration of
these Agreements.
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3. USEC will be responsible for providing the budgetary resources
for any and all costs associated with the Power Purchase Agreements except the
following:
(a) All charges associated with the demand and energy
used to operate the Portsmouth Gaseous Diffusion
Plant and the Paducah Gaseous Diffusion Plant
before July 1, 1993;
(b) Prior service years post-retirement benefit
obligations pursuant to section 6.04 of the OVEC
Power Purchase Agreement;
(c) A share of DOE's liability pursuant to section 6.09
of the OVEC Power Purchase Agreement calculated
based on the following formula:
LD = TLD x TMW - UTMW
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TMW
where:
LD = DOE's share of the section 6.09
liability.
TLD = DOE's total liability
pursuant to Section 6.09 of
the OVEC Power Purchase
Agreement.
TMW = The total number of
megawatt hours purchased by
DOE from OVEC.
UTMW = The portion of TMW that USEC
consumed; and
(d) A share of DOE's liability pursuant to section 7.29
of the EEI Power Purchase Agreement calculated
based on the following formula:
DL = TL x TE - UTE
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TE
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where:
DL = DOE's share of the section 7.29
liability.
TL = DOE's total liability to
EEI pursuant to section 7.29
of the EEI Power Purchase
Agreement.
TE = The total energy purchased by
DOE from EEI.
UTE = That portion of TE that USEC
consumed.
This Section 3 of this Article III shall survive any expiration,
conclusion or termination of the MOA.
4. In the administration of the Power Purchase Agreements, DOE
agrees not to exercise any rights, take any actions, or consent to any action of
the Power Suppliers pursuant to the terms of the Power Purchase Agreements
without the consent of USEC except to the extent an emergency occurs or pursuant
to the following sections of the Power Purchase Agreements:
(a) Section 1.06 of the OVEC Power Purchase Agreement,
(b) Section 1.07 of the OVEC Power Purchase Agreement,
(c) Section 1.09 of the OVEC Power Purchase Agreement,
(d) Section 6.08 of the OVEC Power Purchase Agreement;
and
(e) Section 1.02(5) of the EEI Power Purchase Agreement.
DOE agrees to request USEC's consent to the exercise of rights, action, or
consent to any actions in a timely fashion and USEC agrees to respond to any
such request in a timely fashion.
DOE agrees to take all actions requested by USEC under the Power
Purchase Agreements that are consistent with the terms of the Power Purchase
Agreements.
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5. USEC will be responsible for verifying to DOE, in writing and
in a timely manner, that the quantities of energy shown on the power xxxxxxxx
was delivered. The terms under which USEC will pay DOE for power are set forth
in Attachment X. XXX will be responsible for timely payment of all verified
bills from the Power Suppliers to the extent USEC has provided funds to DOE.
6. DOE promptly will provide USEC or USEC's designee with copies
of all written notices or communications to DOE from the Power Suppliers and the
content of all oral communications from the Power Suppliers. If requested by
USEC, DOE will notify OVEC or EEI that certain notices or communications under
the Power Purchase Agreements should be made concurrently to USEC.
7. USEC will be responsible for operating and maintaining the
Portsmouth and Paducah switchyards (and related equipment) to satisfy DOE's
obligations under Section 1.05 of the OVEC Power Purchase Agreement and Section
1.03 of the EEI Power Purchase Agreement. DOE may review USEC's operation of the
switchyards to ensure that they are operated and maintained in accordance with
the Power Purchase Agreements.
8. USEC and DOE will cooperate to assure that all terms and
conditions of the Power Purchase Agreements are satisfied.
9. DOE shall not amend, supplement, modify, assign, or terminate
either of the Power Purchase Agreements, or consent to the amendment,
supplement, modification, assignment, or termination of either of the Power
Purchase Agreements, without the prior written consent of USEC. In any
negotiations with the Power Suppliers concerning the Power Purchase Agreements,
USEC shall be represented on DOE's negotiation team. DOE shall consent to any
amendment, supplement, modification, assignment, or termination of either of
the Power Purchase Agreements that is requested by USEC so long as USEC's
request is consistent with DOE Order 4540.1C, Utility Acquisition and
Management, and will not extend the term of the Power Purchase Agreement.
10. USEC will be solely responsible for any power purchase
contracts other than Power Purchase Agreements but USEC shall not enter into
power purchase contracts that conflict with the terms and conditions of the
Power Purchase Agreements.
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11. All costs associated with DOE's administration of the Power
Purchase Agreements will be paid by USEC through the Lease Agreement dated July
1, 1993 between DOE and USEC.
12. Additional details regarding the roles and responsibilities
related to the Power Purchase Agreements will be determined by the parties no
later than July 15, 1993.
13. DOE agrees to provide USEC information that will assist USEC
in purchasing power and will cooperate with USEC in DOE's maintenance and
administration of the Power Purchase Agreements.
14. DOE shall pay through the Supply of Services Memorandum of
Agreement (Exhibit F to the Lease) DOE's pro rata share of all charges, rates
and liabilities associated with DOE's right under that Memorandum of Agreement
to retain demand and energy for its own uses on and after July 1, 1993.
IN WITNESS WHEREOF, the parties hereto have executed this
agreement as of the day and year first above written.
SECRETARY OF ENERGY
/s/ XXXXX X. X'XXXXX
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XXXXX X. X'XXXXX
SECRETARY OF ENERGY
/s/ XXXXXXX X. XXXXXXX
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XXXXXXX X. XXXXXXX
TRANSITION MANAGER
UNITED STATES ENRICHMENT CORPORATION
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