RESTATED AND AMENDED OPERATING AGREEMENT Among Public Service Company of Oklahoma Southwestern Electric Power Company American Electric Power Service Corporation May 1, 2006
EXHIBIT
10(b)
RESTATED
AND AMENDED
Among
Public
Service Company of Oklahoma
Southwestern
Electric Power Company
American
Electric Power Service Corporation
May
1,
2006
RESTATED
AND AMENDED
TABLE
OF
CONTENTS
|
ARTICLE
I
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|||||
|
TERM
OF AGREEMENT
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ARTICLE
II
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|||||
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DEFINITIONS
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2.1
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Agent
|
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2.2
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Agreement
|
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2.3
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Buyer’s
Decremental Energy Value
|
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2.4
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Capacity
Commitment
|
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2.5
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Capacity
Commitment Charge
|
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2.6
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Central
Control Center
|
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2.7
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Chief
Executive Officer (CEO)
|
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2.8
|
Company
|
||||
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2.9
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Company
Capability
|
||||
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2.10
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Company
Demand
|
||||
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2.11
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Company
Hourly Capability
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||||
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2.12
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Company
Load Responsibility
|
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2.13
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Company
Operating Capability
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||||
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2.14
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Company
Operating Reserve
|
||||
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2.15
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Company
Peak Demand
|
||||
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2.16
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Day
|
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2.17
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Economic
Dispatch
|
||||
|
2.18
|
Energy
|
||||
|
2.19
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Entitlement
Energy
|
||||
|
2.20
|
Generating
Unit
|
||||
|
2.21
|
Hour
|
||||
|
2.22
|
Internal
Economy Energy
|
||||
|
2.23
|
Joint
Resource Plan
|
||||
|
2.24
|
Joint
Unit
|
||||
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2.25
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(a)
|
Margin
on Sales
|
|||
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(b)
|
Margin
on Purchases
|
||||
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(c)
|
Margin
|
||||
|
2.26
|
Month
|
||||
|
2.27
|
Operating
Committee
|
||||
|
2.28
|
Own
Load
|
||||
|
2.29
|
Parent
Company
|
||||
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2.30
|
Planning
Reserve Level
|
||||
|
2.31
|
Pool
Energy
|
||||
|
2.32
|
Power
|
||||
|
2.33
|
Prorated
Reserve Level
|
||||
|
2.34
|
Reserve
Capacity (Company or System)
|
||||
|
2.35
|
Seller’s
Incremental Energy Cost
|
||||
|
2.36
|
System
|
||||
|
2.37
|
System
Capability
|
||||
|
2.38
|
System
Demand
|
||||
|
2.39
|
System
Load Responsibility
|
||||
|
2.40
|
System
Operating Capability
|
||||
|
2.41
|
System
Operating Reserve
|
||||
|
2.42
|
System
Peak Demand
|
||||
|
2.43
|
Variable
Cost
|
||||
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2.44
|
Year
|
||||
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ARTICLE
III
|
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OBJECTIVES
|
|||||
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3.1
|
Purpose
|
||||
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ARTICLE
IV
|
|||||
|
AGENT
|
|||||
|
4.1
|
Responsibility
of the Agent
|
||||
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4.2
|
Delegation
and Acceptance of Authority
|
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4.3
|
Reporting
|
||||
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ARTICLE
V
|
|||||
|
OPERATING
COMMITTEE
|
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|
5.1
|
Operating
Committee
|
||||
|
5.2
|
Delegation
of CEO Duties
|
||||
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ARTICLE
VI
|
|||||
|
OPERATIONS
|
|||||
|
6.1
|
Planning
and Authorization of Production Facilities
|
||||
|
6.2
|
Planning
Reserve Levels
|
||||
|
6.3
|
Provision
to Achieve Planning Reserve Levels
|
||||
|
6.4
|
Capacity
Sales and Purchases and Reserve Shortfalls
|
||||
|
6.5
|
Energy
Exchanges Among the Companies
|
||||
|
6.6
|
Energy
Exchange Pricing
|
||||
|
6.7
|
Energy
Exchanges with non-Associated Entities
|
||||
|
6.8
|
Communications
and Other Facilities
|
||||
|
ARTICLE
VII
|
|||||
|
CENTRAL
CONTROL CENTER
|
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|
7.1
|
Central
Control Center
|
||||
|
7.2
|
Expenses
|
||||
|
ARTICLE
VIII
|
|||||
|
GENERAL
|
|||||
|
8.1
|
Regulatory
Authorization
|
||||
|
8.2
|
Effect
on Other Agreements
|
||||
|
8.3
|
Schedules
|
||||
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8.4
|
Xxxxxxxx
|
||||
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8.5
|
Waivers
|
||||
|
8.6
|
Successors
and Assigns; No Third Party Beneficiary
|
||||
|
8.7
|
Amendment
|
||||
|
8.8
|
Independent
Contractors
|
||||
|
8.9
|
Responsibility
and Liability
|
||||
|
SCHEDULE
A
|
|||||
|
JOINT
UNIT
|
|||||
|
9.1
|
Purpose
|
||||
|
9.2
|
Ownership
|
||||
|
9.3
|
Contracts
|
||||
|
SCHEDULE
B
|
|||||
|
COMPANY
UNITS THAT ARE NOT JOINT UNITS
|
|||||
|
10.1
|
Purpose
|
||||
|
10.2
|
Company
Units that Are Not Joint Units
|
||||
|
SCHEDULE
C
|
|||||
|
CAPACITY
COMMITMENT CHARGE
|
|||||
|
11.1
|
Purpose
|
||||
|
11.2
|
Basis
for Capacity Commitment
|
||||
|
11.3
|
Provisions
for Capacity Commitment Charge
|
||||
|
11.4
|
Provision
for Energy Charge
|
||||
|
SCHEDULE
D
|
|||||
|
PAYMENTS
AND RECEIPTS FOR POOL ENERGY EXCHANGES AMONG THE
COMPANIES
|
|||||
|
12.1
|
Purpose
|
||||
|
12.2
|
Hourly
Calculations
|
||||
|
12.3
|
Receipts
and Payments
|
||||
|
SCHEDULE
E
|
|||||
|
PAYMENTS
AND RECEIPTS FOR INTERNAL ECONOMY ENERGY EXCHANGES AMONG THE
COMPANIES
|
|||||
|
13.1
|
Purpose
|
||||
|
13.2
|
Hourly
Calculations
|
||||
|
13.3
|
Payments
|
||||
|
13.4
|
Receipts
|
||||
|
SCHEDULE
F
|
|||||
|
DISTRIBUTION
OF MARGIN FOR OFF-SYSTEM ENERGY PURCHASES AND SALES
|
|||||
|
14.1
|
Purpose
|
||||
|
14.2
|
Distribution
of Margin
|
||||
|
SCHEDULE
G
|
|||||
|
DISTRIBUTION
OF OPERATING EXPENSES OF THE CENTRAL CONTROL CENTER
|
|||||
|
15.1
|
Purpose
|
||||
|
15.2
|
Costs
|
||||
|
15.3
|
Distribution
of Costs
|
||||
|
SCHEDULE
H
|
|||||
|
CAPACITY
COMMITMENT UNITS
|
|||||
|
16.1
|
Purpose
|
||||
|
16.2
|
Commitment
Units
|
||||
|
SCHEDULE
I
|
|||||
|
PLANNING-RESERVE
CRITERIA
|
|||||
|
17.1
|
Purpose
|
||||
|
17.2
|
Planning
Reserve Criteria
|
||||
|
SCHEDULE
J
|
|||||
|
STATEMENT
OF PRACTICE REGARDING OFF-SYSTEM ENERGY SALES
|
|||||
|
18.1
|
Purpose
|
||||
|
18.2
|
Determination
of Energy Price Quotations
|
||||
RESTATED
AND AMENDED
Among
Public
Service Company of Oklahoma
Southwestern
Electric Power Company
American
Electric Power Service Corporation
THIS
RESTATED AND AMENDED OPERATING AGREEMENT, hereinafter called Agreement is made
and entered into as of the 1st day of May, 2006 by and among Public Service
Company of Oklahoma, hereinafter called PSO; Southwestern Electric Power
Company, hereinafter called SWEPCO; and American Electric Power Service
Corporation, hereinafter called AEPSC; all of whose common stock is wholly
owned
by American Electric Power Company, Inc., and supersedes the Restated and
Amended Operating Agreement dated January 1, 1997.
WHEREAS,
PSO and SWEPCO are the owners and operators of interconnected electric
generation, transmission, and distribution facilities with which they are
engaged in the business of generating, transmitting, and selling electric Power
and Energy to the general public and to other electric utilities;
and
WHEREAS,
the Companies achieve economic benefits for their customers through operation
as
a single interconnected system, and through coordinated planning, construction,
operation and maintenance of their electric supply facilities; and
WHEREAS,
AEPSC is qualified to act as Agent for the Companies;
NOW,
THEREFORE, the parties hereto mutually agree as follows:
ARTICLE
I
TERM
OF
AGREEMENT
1.1 This
Agreement shall become effective on such date as is established by the Federal
Energy Regulatory Commission. This Agreement shall continue in force and effect
for a period of five (5) Years from the effective date hereinabove described,
and continue from Year to Year thereafter until terminated by one or more of
the
parties upon one (1) Year written notice to the other parties.
1.2 This
Agreement is intended to cover only the acquisition, disposition, planning,
design, construction, operation and maintenance of the Generating Units and is
not to affect those matters that are the subject of orders of the United States
Securities and Exchange Commission authorizing certain cost allocation methods
for AEPSC xxxxxxxx.
ARTICLE
II
DEFINITIONS
For
the
purposes of this Agreement and of Schedules A through J which are attached
hereto and made a part hereof, the following definitions shall
apply:
2.1 Agent
for
the
Companies shall be AEPSC.
2.2 Agreement
shall be
this Agreement including all attachments and schedules applying hereto and
any
amendments made hereafter.
2.3 Buyer's
Decremental Energy Value
shall be
the cost that a buying Company avoids by reducing the generation of Energy
from
its Company Operating Capability or by reducing its purchase of Energy from
others.
2.4 Capacity
Commitment
shall be
generating capacity committed by a Company to provide capability to enable
another Company to attain its Planning or Prorated Reserve Level, whichever
shall be lower.
2.5 Capacity
Commitment Charge
shall be
the charge made by a Company supplying a Capacity Commitment to the Company
receiving the Capacity Commitment.
2.6 Central
Control Center
shall be
a center operated by the Agent for the optimal utilization of System resources
for the supply of Power and Energy.
2.7 Chief
Executive Officer (CEO)
shall be
the Chief Executive Officer of American Electric Power Company, Inc. or the
CEO's designee.
2.8 Company
shall be
any one of the American Electric Power Company, Inc. operating companies and
Companies
shall be
the American Electric Power Company, Inc. operating companies
collectively.
2.9 Company
Capability
shall
be:
(a) The
sum
of the Company net plant capability in megawatts; plus
(b) The
megawatt amount of purchases and exchanges without
reserves, under contract from other systems; less
(c) The
megawatt amount of sales and exchanges without reserves, under contract to
other
systems.
2.10 Company
Demand
shall
be:
(a) The
clock-hour demand in megawatts of a Company's system represented by the
simultaneous hourly input in megawatt-hours from all sources into the system
of
a Company; less
(b) The
sum
of the simultaneous hourly output in megawatt-hours to other systems (exclusive
of any wholesale requirements obligations of the Company).
2.11 Company
Hourly Capability
for a
Company shall be:
(a) The
megawatt amount of dependable capability of the Company's generating units
on
line, including its shares of Joint Units and its shares of units owned jointly
with non-associated entities, during the Hour; plus
(b) The
megawatt amount of capability committed to the Company by other Companies or
non-associated suppliers during the Hour; less
(c) The
megawatt amount of capability committed by the Company to other Companies or
non-associated purchasers during the Hour; less
(d)
Any
capability required to provide operating reserves.
2.12 Company
Load Responsibility
shall be
as follows:
(a) Company
Peak Demand; less
(b) The
difference between Company Peak Demand and Company Demand at the time of System
Peak Demand; less
(c) The
megawatt-hour output of the Company served on an interruptible basis during
the
hour of Company Peak Demand plus;
(d) The
contractual amount of sales and exchanges with reserves during the period to
other systems less;
(e) The
contractual amount of purchases and exchanges with reserves during the period
from other systems.
2.13 Company
Operating Capability shall
be
the dependable net capability in megawatts of Generating Units of a Company
carrying load or ready to take load.
2.14 Company
Operating Reserve
shall be
the excess of Company Operating Capability over Company Demand expressed in
megawatts.
2.15 Company
Peak Demand
for a
period shall be the highest Company Demand for any Hour during the
period.
2.16 Day
shall be
a calendar Day.
2.17 Economic
Dispatch
shall be
the distribution of total generation requirements among alternative sources
for
system economy with due consideration of incremental generating costs,
incremental transmission losses, and system security.
2.18 Energy
shall be
work and shall be expressed in megawatt-hours (MWH).
2.19 Entitlement
Energy
shall be
the Energy from a Joint Unit to which a Company is entitled by reason of its
ownership position in that unit, expressed in megawatt-hours.
2.20 Generating
Unit
shall be
an electric generator, together with its prime mover and all auxiliary and
appurtenant devices and equipment designed to be operated as a unit for the
production of electric Power and Energy. The above is to include equipment
necessary for connection to the transmission system.
2.21
Hour
shall be
a clock-hour.
2.22 Internal
Economy Energy
shall be
Energy supplied and sold by one Company to another Company, under Economic
Dispatch, to meet a portion of the purchasing Company's Own Load that could
otherwise be supplied internally by the purchasing Company.
2.23 Joint
Resource Plan
shall be
the formal documented plan developed from time to time for all future Generating
Units and other power supply and demand management resources.
2.24 Joint
Unit
shall be
any Generating Unit jointly owned by two or more of the Companies.
2.25
(a) Margin
on Sales
shall be
the difference between:
(1)
the
revenue from off-System Energy sales made pursuant to Section 6.7 and (2) the
Seller's Incremental Energy Cost incurred in making such sales.
(b) Margin
on Purchases
shall be
the difference between (1) the
Buyer's Decremental Energy Value avoided as a result of off-System Energy
purchases made pursuant to Section 6.7 and (2) payments for off-System
Energy purchases made pursuant to Section 6.7.
(c) Margin
for a
given period shall be the sum of the amounts developed in accordance with
Sections 2.25 (a) and 2.25 (b).
2.26 Month
shall be
a calendar Month.
2.27 Operating
Committee
shall be
the organization established pursuant to section 5.1 and whose duties are more
fully set forth therein.
2.28 Own
Load
shall be
Energy required to meet Company Demand plus Energy associated with sales or
exchanges with reserves less Energy associated with purchases or exchanges
with
reserves.
2.29 Parent
Company
shall be
American Electric Power Company, Inc.
2.30 Planning
Reserve Level
shall be
the megawatt amount of required Reserve Capacity for a Company, expressed as
a
percentage of its forecasted Company Load Responsibility.
2.31
Pool
Energy
shall be
the Energy supplied and sold by one Company to another Company to enable the
purchasing Company to meet a portion of its Own Load that such other Company
cannot or does not plan to serve with its other resources. There shall be two
categories of Pool Energy. Emergency Pool Energy shall be the Energy required
by
a Company that becomes deficient because of an unplanned occurrence (such as
a
generator unit trip or a missed load forecast). Planned Pool Energy shall be
the
Energy required by a Company to meet portions of its Own Load when it determines
that (a) it will be short of capacity when planning for future operations or
(b)
such Energy can be taken to economic advantage.
2.32 Power
shall be
the rate of doing work and shall be expressed in megawatts (MW).
2.33 Prorated
Reserve Level
shall be
a percentage reserve level for each Company that when divided by that Company's
Planning Reserve Level gives the same quotient as that for all other
Companies.
2.34 Reserve
Capacity (Company or System
shall be
that amount in megawatts by which Company or System Capability exceeds Company
or System Load Responsibility.
2.35 Seller's
Incremental Energy Cost
shall be
the Variable Cost which a selling Company incurs in order to supply energy
for
resale.
2.36 System
shall be
the coordinated Generating Units of the Companies.
2.37 System
Capability
shall be
the arithmetical sum in megawatts of the individual Company
Capabilities.
2.38 System
Demand
shall be
the arithmetical sum of the Companies' clock-hour demand in megawatts
represented by:
(a) The
simultaneous hourly input in megawatt-hours from all sources into the System;
less
(b) The
sum
of the simultaneous hourly outputs in megawatt hours to other systems (exclusive
of any wholesale requirements obligations of the Companies).
2.39 System
Load Responsibility
shall be
as follows:
(a) System
Peak Demand; less
(b) The
megawatt-hour output of the Companies served on an interruptible basis during
the Hour of System Peak Demand; plus
(c) The
arithmetic sum in megawatts of all of the Companies’
contractual amount of sales and exchanges with reserves during the period to
other systems less;
(d) The
arithmetic sum in megawatts of all the Companies’ contractual amount of
purchases and exchanges with reserves during the period from other
systems.
2.40 System
Operating Capability
shall be
the arithmetical sum in megawatts of the individual Company Operating
Capabilities.
2.41 System
Operating Reserve
shall be
the arithmetical sum of the individual Company Operating Reserves, expressed
in
megawatts.
2.42 System
Peak Demand
for a
period shall be the highest System Demand for any hour during the
period.
2.43 Variable
Cost
shall be
a Company's incremental generation cost or purchased energy cost.
2.44 Year
shall be
a calendar Year.
ARTICLE
III
OBJECTIVES
3.1 Purpose
The
purpose of this Agreement is to provide the contractual basis for the
coordinated planning, construction, operation and maintenance of the System
to
achieve optimal economies, consistent with reliable electric service, reasonable
utilization of natural resources, and environmental requirements.
ARTICLE
IV
AGENT
4.1 Responsibility
of the Agent
The
Companies hereby designate AEPSC as their Agent for the purpose of:
(a) coordinating
the acquisition, disposition, planning, design, construction, operation and
maintenance of the Generating Units of the Companies, including any Joint Units;
and
(b) supervising
the design, construction, operation and maintenance of the Central Control
Center.
4.2
Delegation
and Acceptance of Authority
The
Companies hereby delegate to the Agent and the Agent hereby accepts
responsibility and authority for the duties listed in Section 4.1 and elsewhere
in this Agreement. Except as herein expressly established otherwise, the Agent
shall perform each of those duties in consultation with the Operating Committee.
The Agent shall also perform each of those duties in accordance with the
standards of conduct described in 18 C.F.R. § 37.4.
4.3 Reporting
The
Agent
shall provide periodic summary reports of its activities under this Agreement
to
the Companies and shall keep the Companies and the Operating Committee currently
informed of situations or problems that may materially affect the outcome of
these activities. Furthermore, the Agent agrees to report to the Companies
or to
the Operating Committee in such additional detail as is requested regarding
specific issues or projects under its supervision as Agent.
ARTICLE
V
OPERATING
COMMITTEE
5.1 Operating
Committee
The
Operating Committee is the organization established to ensure the coordinated
operation of the System by making recommendations to the CEO regarding
operations under this Agreement, thereby providing the basis for the CEO's
direction of the Agent in the performance of the Agent's duties under this
Agreement and for the performance of the CEO's responsibilities described
herein. The Operating Committee members will be designated by the CEO, and
shall
include a chairperson and at least one member from the Agent and from each
Company. Operating Committee decisions shall be by a majority vote of those
present and shall be in the form of recommendations to the CEO. However, any
member not present may vote by proxy. In any non-unanimous decision the
principles of the difference shall be reported to the CEO. The chairperson
shall
vote only in case of a tie.
5.2 Delegation
of CEO Duties
The
CEO
may delegate to other officers or employees of the Agent or of any Company
the
obligation to carry out the CEO's duties hereunder, including without limitation
approving capacity purchases and sales pursuant to Section 6.4(b).
ARTICLE
VI
OPERATIONS
6.1 Planning
and Authorization of Production Facilities
(a) Each
Company shall forecast the amount of generating capability required to meet
its
Company Load Responsibility and its Planning Reserve Level in future
years.
(b) A
current
Joint Resource Plan will be maintained that will state the current forecasted
System Load Responsibility including the Planning Reserve Level and the required
resources.
(c) All
Generating Units placed in service after the date of this Agreement shall be
in
accordance with the then current Joint Resource Plan. Joint Units shall be
authorized by the Board of Directors of the Parent Company prior to the
commencement of detailed engineering of the units.
(d) For
the
purpose of this Agreement the Generating Units listed in Schedule B are not
Joint Units.
(e) The
organization designated by the CEO shall be responsible for the staffing,
operation and maintenance of each authorized Joint Generating Unit.
6.2 Planning
Reserve Levels
The
Operating Committee shall periodically review the Planning Reserve Level for
each Company and recommend any modifications of such to the CEO.
6.3 Provision
to Achieve Planning Reserve Levels
(a) Each
Company shall own, or have available to it under contract; such generating
capability and other facilities as are necessary to supply its Company Load
Responsibility plus its Planning Reserve Level.
(b) The
Joint
Resource Plan shall be periodically reviewed and adjusted to provide the
Companies their required Planning Reserve Levels. Any Company with Reserve
Capacity in excess of its Planning Reserve Level for a future Year shall commit
such excess capacity to Companies with insufficient Reserve Capacity to meet
their Planning Reserve Level during that Year or any portion thereof. The
deficit Companies shall make payments to the excess Companies in respect of
each
Month of the Year to which the commitment applies in the amount of the Capacity
Commitment Charge in accordance with Schedule C. In the event that the System
Capability, including outside capacity purchases, is insufficient to meet such
Planning Reserve Levels the System Capability shall be allocated to provide
each
Company its Prorated Reserve Level.
(c) The
ownership percentages in future Joint Units are established in accordance with
Schedule A, but may be reallocated in the Joint Resource Plan by recommendation
of the Operating Committee and authorization by the CEO.
6.4 Capacity
Sales and Purchases and Reserve Shortfalls
(a) The
Agent
shall coordinate and otherwise assist the Companies in making off-System
capacity sales and purchases.
(b) All
capacity purchases and sales effective beyond July 1, 1984 shall be coordinated
by the Agent, recommended by the Operating Committee, and approved by the
CEO.
(c) The
System Reserve Capacity shall be at the disposal of any Company requiring such
capacity. Should the system be short of capacity as a result of an emergency
and
be unable to purchase the deficit, each Company shall take such actions as
are
necessary to bring System load and generation into balance.
6.5 Energy
Exchanges Among the Companies
The
Agent
shall schedule the Energy output of System Capability to obtain the lowest
cost
of Energy for serving System Demand consistent with each Company's operating
and
security constraints, including voltage control, stability, loading of
facilities, operating guides as recommended by the Operating Committee and
approved by the CEO, fuel commitments, environmental requirements, and
continuity of service to customers.
6.6 Energy
Exchange Pricing
For
the
purpose of pricing Energy exchange among the Companies, System resources shall
be utilized to serve System requirements in the following order:
(a) Those
Generating Units which are designated not to be operated in the order of lowest
to highest Variable Cost due to Company operating constraints shall be allocated
to the Company requiring the Generating Unit.
(b) The
lowest Variable Cost generation of each Company's Hourly Capability shall first
be allocated to serve its Own Load.
(c) The
next
lowest Variable Cost portion of each Company's remaining Hourly Capability
shall
be allocated to serve Pool Energy requirements of Companies under System
Economic Dispatch. Pool Energy shall be priced in accordance with
Schedule D.
(d) The
next
lowest Variable Cost portion of each Company's remaining Hourly Capability
shall
be used to supply Internal Economy Energy to Companies under System Economic
Dispatch. Internal Economy Energy shall be priced in accordance with Schedule
E.
6.7 Energy
Exchanges with Non-Associated Entities
The
Agent
shall coordinate and direct off-System purchases of Energy necessary to meet
System requirements or improve System economy, after Internal Economy Energy
transactions have been effected. The Agent shall coordinate and direct
off-System sales of Energy available after meeting all of the requirements
of
the System including the Energy associated with contractual requirements for
off-System capacity sales. Such off-System Energy purchases or sales shall
be
implemented by decremental or incremental System Economic Dispatch as
appropriate. Any Margin on Energy purchases from off-System utilities or Margin
on Energy sales to off-System utilities shall be distributed to the Companies
in
accordance with Schedule F. Price quotations for such Energy sales shall be
determined in accordance with Schedule J.
6.8 Communications
and Other Facilities
The
Companies shall provide communications and other facilities necessary
for:
(a) The
metering and control of the generating and transmission facilities;
(b) The
dispatch of electric Power and Energy; and
(c) For
such
other purposes as may be necessary for optimum operation of the
System.
ARTICLE
VII
CENTRAL
CONTROL CENTER
7.1 Central
Control Center
The
Agent
shall provide and operate a Central Control Center adequately equipped and
staffed to meet the requirements of the Companies for efficient, economical
and
reliable operation as contemplated by this Agreement.
7.2 Expenses
All
expenses for operation of the Central Control Center shall be paid by the Agent
and billed monthly to each Company, in accordance with Schedule G.
ARTICLE
VIII
GENERAL
8.1 Regulatory
Authorization
This
Agreement is subject to certain regulatory approvals and each Company and the
Agent shall diligently seek all necessary regulatory authorization for this
Agreement.
8.2 Effect
on Other Agreements
This
Agreement shall not modify the obligations of any Company under any agreement
between that Company and others not parties to this Agreement in effect at
the
date of this Agreement, nor shall it modify any agreement between or among
the
Companies under any transmission tariff or other agreement filed with the
Federal Energy Regulatory Commission.
8.3 Schedules
The
basis
of compensation for the use of facilities and for the Power and Energy provided
or supplied by a Company to another Company or Companies under this Agreement
shall be in accordance with arrangements agreed upon from time to time among
the
Companies. Such arrangements shall be in the form of Schedules, each of which,
when signed by the parties thereto and approved or accepted by appropriate
regulatory authority, shall become a part of this Agreement.
8.4 Xxxxxxxx
Bills
for
services rendered hereunder shall be calculated in accordance with applicable
Schedules, and shall be issued on or before the tenth working Day of the Month
following that in which such service was rendered and shall be payable on or
before the twentieth Day of such Month. After the thirtieth Day, interest shall
accrue on any balance due until paid at the latest rate approved by the United
States Securities and Exchange Commission for loans among Companies in the
American Electric Power System. Billings in good faith disputed and paid shall
be deemed to have been paid under protest.
8.5 Waivers
Any
waiver at any time by a Company of its rights with respect to a default by
any
other Company under this Agreement shall not be deemed a waiver with respect
to
any subsequent default of similar or different nature, nor shall it prejudice
its right to deny waiver of similar default to a different Company.
8.6 Successors
and Assigns; No Third Party Beneficiary
This
Agreement shall inure to and be binding upon the successors and assigns of
the
respective parties hereto, but shall not be assignable by any party without
the
written consent of the other parties, except upon foreclosure of a mortgage
or
deed of trust. Nothing expressed or mentioned or to which reference is made
in
this Agreement is intended or shall be construed to give any person or
corporation other than the parties hereto any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained, expressly or by reference, or any Schedule hereto, this Agreement,
any such Schedule and any and all conditions and provisions hereof and thereof
being intended to be and being for the sole and exclusive benefit of the parties
hereto, and for the benefit of no other person or corporation.
8.7 Amendment
It
is
contemplated by the parties that it may be appropriate from time to time to
change, amend, modify or supplement this Agreement or the Schedules which are
attached to this Agreement to reflect changes in operating practices or costs
of
operations or for other reasons. This Agreement may be changed, amended,
modified or supplemented by an instrument in writing executed by all of the
parties.
8.8 Independent
Contractors
It
is
agreed among the Companies that by entering into this Agreement the Companies
shall not become partners, but as to each other and to third persons, the
Companies shall remain independent contractors in all matters relating to this
Agreement.
8.9 Responsibility
and Liability
The
liability of the parties shall be several, not joint or collective. Each party
shall be responsible only for its obligations, and shall be liable only for
its
proportionate share of the costs and expenses as provided in this Agreement,
and
any liability resulting herefrom. Each party hereto will defend, indemnify,
and
save harmless the other parties hereto from and against any and all liability,
loss, costs, damages, and expenses, including reasonable attorney's fees, caused
by or growing out of the gross negligence, willful misconduct, or breach of
this
Agreement by such indemnifying party.
IN
WITNESS WHEREOF, each of the Companies has caused this Agreement and the
attached Schedules to be signed in its name and on its behalf by its President
attested to by its Secretary, both being duly authorized, and AEPSC has caused
this Agreement and the attached schedules to be signed in its name and on its
behalf by its Chief Executive Officer attested by its Secretary, both being
duly
authorized. This Agreement and attached Schedules shall become effective on
such
date as is established by the Federal Energy Regulatory Commission.
|
PUBLIC
SERVICE COMPANY OF OKLAHOMA
|
||
|
Attest
|
||
|
/s/
Xxxxxx X. Xxxxxxxxxx
|
By:
|
/s/
Xxxxxx Xxxxxxx
|
|
Assistant
Secretary
|
President
|
|
|
SOUTHWESTERN
ELECTRIC POWER COMPANY
|
||
|
Attest
|
||
|
/s/
Xxxxxx X. Xxxxxxxxxx
|
By:
|
/s/
Xxxxxxxx X. Xxxxx
|
|
Assistant
Secretary
|
President
|
|
|
AMERICAN
ELECTRIC POWER SERVICE CORPORATION
|
||
|
Attest
|
||
|
/s/
Xxxxxx X. Xxxxxxxxxx
|
By:
|
/s/
J. Xxxxx Xxxxx
|
|
Assistant
Secretary
|
Senior
Vice President
|
|
-
A-1
-
SCHEDULE
A
JOINT
UNIT
9.1 Purpose
The
purpose of this Schedule is to provide the basis for the Companies'
participation in Joint Units.
9.2 Ownership
(a) Every
Joint Unit shall be owned by the Companies participating in the Joint Unit
as
tenants in common. Ownership shares in each Joint Unit shall be allocated
insofar as practical to achieve a Prorated Reserve Level for all Companies
participating in the unit. The allocation shall be recommended by the Operating
Committee and authorized by the CEO prior to the time the unit is authorized
by
the Board of Directors of the Parent Company. However, each Company shall own
at
least fifty (50) megawatts of each Joint Unit unless otherwise agreed to by
the
Operating Committee. Each Company shall be responsible for its pro rata
share of the costs of construction of the unit and shall contribute such funds
to the Agent as billed.
(b) When
a
new Joint Unit is installed at a site already occupied by one or more existing
Generating Units the Agent, in consultation with the Operating Committee, shall
identify any existing facilities that will be common to the new Joint Unit
and
the portion of the common facilities to be allocated to the new Joint Unit.
The
owners of the new Joint Unit shall compensate the owners of the existing common
facilities for the use of those common facilities.
9.3 Contracts
The
Companies shall execute a joint ownership agreement for each Joint Unit, such
agreement to set out all of the rights and obligations of the parties relating
to the specific Joint Unit, including the allocation of fuel costs, the
allocation of other operation costs and the allocation of maintenance costs
among the owners.
-
B-1
-
SCHEDULE
B
COMPANY
UNITS THAT ARE NOT JOINT UNITS
10.1
Purpose
The
purpose of this Schedule is to list the Generating Units, to be placed in
service after the date of the original Operating Agreement dated September
28,
1983, which are not Joint Units.
10.2
Company
Units That Are Not Joint Units
The
Company units that are not Joint Units are as follows:
Dolet
Hills Unit Number 1 - SWEPCO
Xxxxxx
Unit Number 1 - SWEPCO
-
C-1
-
SCHEDULE
C
CAPACITY
COMMITMENT CHARGE
11.1
Purpose
The
purpose of this Schedule is to establish the basis for Capacity Commitments
between the Companies and the rates for the Capacity Commitment Charge and
associated Energy.
11.2
Basis
for Capacity Commitment
A
committing Company shall make available to a receiving Company unit capacity
consisting of a portion of the output of one or more specific Generating Units.
The receiving Company shall be entitled to receive Energy from the specified
Generating Unit(s) up to an amount equal to an annual load factor of sixty
(60)
percent or such other amount as is mutually agreeable. The capacity commitment
shall be for a twelve-month period or as otherwise mutually agreed.
11.3
Provisions
for Capacity Commitment Charge
The
monthly Capacity Commitment Charge for each specific Generating Unit(s) from
which capacity is committed shall be determined pursuant to the following
formula:
A
=
(1/12) (B) (C/D) (E)
Where:
A
=
Monthly Capacity Commitment Charge for the specified unit to be due each month
regardless of the availability of the specific unit.
B
=
0.1772 (fixed charge rate for the committing Company).
-
C-2
-
C
=
Committing Company's total dollar investment, at original cost, in the specific
Generating Unit as of December 31 of the year prior to the year of the Capacity
Commitment, certified by the Chief Financial officer of the
Company.
D
= Rated
net dependable capability of the specific Generating Unit in
megawatts.
E
=
Megawatts of capacity committed from the specified unit.
11.4
Provision
for Energy Charge
The
rate
for Energy received by a receiving Company from specified unit(s) shall be
the
Variable Cost of Energy produced from each specified unit(s) plus ten (10)
percent of such costs or three (3) xxxxx per kilowatt-hour, whichever is
less.
-
D-1
-
SCHEDULE
D
PAYMENTS
AND RECEIPTS FOR POOL ENERGY EXCHANGES
AMONG
THE
COMPANIES
12.1
Purpose
The
purpose of this Schedule is to provide the basis for determining payments and
receipts among the Companies for Pool Energy exchanges.
12.2
Hourly
Calculations
The
payments and receipts of Section 12.3 are calculated Hourly, but are accumulated
and billed Monthly among the Companies.
12.3
Receipts
and Payments
A
selling
Company shall receive from a purchasing Company one hundred and ten percent
(110%) of the Seller's Incremental Energy Cost for Pool Energy sold. A
purchasing Company shall pay for Pool Energy received one hundred and ten
percent (110%) of its portion of the aggregate of the Seller's Incremental
Cost
for Pool Energy. Where Pool Energy is purchased simultaneously by more than
one
Company these charges shall be pro rated in proportion to the
megawatt-hours of Pool Energy purchased by each buyer.
-
E-1
-
SCHEDULE
E
PAYMENTS
AND RECEIPTS FOR INTERNAL
ECONOMY
ENERGY EXCHANGES AMONG THE COMPANIES
13.1
Purpose
The
purpose of this Schedule is to provide the basis for determining payments and
receipts among the Companies for Internal Economy Energy exchanges.
13.2
Hourly
Calculations
The
payments of Section 13.3 and receipts of Section 13.4 shall be calculated
Hourly, but are accumulated and billed Monthly among the Companies.
13.3
Payments
A
purchasing Company shall pay the following amount for Internal
Economy Energy bought:
(a) The
purchasing Company's portion of the aggregate of Sellers' Incremental Energy
Costs for Internal Economy Energy where such charges are pro rated in proportion
to the amount of Internal Economy Energy purchased by each Company; plus
(b) One-half
of the difference between:
(1) The
Buyer's Decremental Energy Value for Internal Economy Energy purchased; and
(2) The
amount determined in Section 13.3 (a).
-
E-2
-
13.4
Receipts
A
selling
Company shall receive the following amount for Internal Economy Energy
sold:
(a) The
Seller's Incremental Energy cost for Internal Economy Energy sold;
plus
(b) One-half
of the difference between:
(1) The
selling Company's portion of the aggregate of the Buyers' Decremental Energy
Values for Internal Economy Energy purchased where such values are prorated
in
proportion to the amount of Internal Economy Energy sold by each Company;
and
(2) The
amount determined in Section 13.4 (a).
-
F-1
-
SCHEDULE
F
DISTRIBUTION
OF MARGIN FOR OFF-SYSTEM
ENERGY
PURCHASES AND SALES
14.1 Purpose
The
purpose of this Schedule is to establish the basis for distributing among the
Companies the Margin on off-System Energy purchases and sales.
14.2
Distribution
of Margin
Any
Margin on off-System Energy purchases and sales shall be distributed to the
Companies in proportion to the relative magnitude of the sums for each Company
of the Energy generated or not generated by such Company in order to participate
in Internal Economy or off-System purchases or sales.
-
G-1
-
SCHEDULE
G
DISTRIBUTION
OF OPERATING EXPENSES
OF
THE
CENTRAL CONTROL CENTER
15.1 Purpose
The
purpose of this Schedule is to provide a basis for the distribution among the
Companies of the costs incurred by the Agent in operating the Central Control
Center.
15.2 Costs
Costs
for
the purpose of this Schedule shall include all costs incurred in maintaining
and
operating the Central Control Center including, among others, such items as
salaries, wages, rentals, the cost of materials and supplies, interest, taxes,
depreciation, transportation, travel expenses, consulting, and other
professional services.
15.3
Distribution
of Costs
All
costs
shall be billed by Agent to the Companies in proportion to the average of the
maximum Company Peak Demands experienced during the three previous calendar
Years with the following exception. In the event the Central Control Center
makes a study or performs a special service in which all Companies are not
thus
proportionately interested, any resulting cost shall be distributed to the
interested parties in accordance with the standard procedures of Agent
authorized by the United States Securities and Exchange Commission.
-
H-1
-
SCHEDULE
H
CAPACITY
COMMITMENT UNITS
16.1 Purpose
The
purpose of this Schedule is to identify the Generating Units of the Companies
from which Capacity Commitments shall be made pursuant to Section 6.3 and with
reference to which the Capacity Commitment Charge shall be determined in
accordance with Schedule C.
16.2
Commitment
Units
Listed
below are the Generating Units from which each of the Companies shall commit
Capacity to other Companies pursuant to Section 6.3. Capacity Commitments shall
be made from the first listed unit of the committing Company unless or to the
extent that such unit is not expected to be available during the commitment
period. In such event, Capacity Commitments shall be made from the second listed
unit of the committing Company.
|
COMPANY/UNIT
NAME
|
RATING
(MW)
|
YEAR
INSTALLED
|
|
PSO
|
||
|
Riverside
#2
|
465
|
1976
|
|
Riverside
#1
|
457
|
1974
|
|
SWEPCO
|
||
|
Know
Xxx #5
|
344
|
1974
|
|
Xxxxxx
#3
|
351
|
1971
|
-
I-1
-
SCHEDULE
I
PLANNING-RESERVE
CRITERIA
17.1 Purpose
The
purpose of this Schedule is to identify the criteria which shall be used by
the
Companies in determining their respective Planning Reserve Levels for purposes
of determining their respective Capacity Commitment obligations under Section
6.3.
17.2
Planning
Reserve Criteria
The
Planning Reserve Level for each of the Companies shall be equal to 15% of
Company Load Responsibility.
-
J-1
-
SCHEDULE
J
STATEMENT
OF PRACTICE
REGARDING
OFF-SYSTEM ENERGY SALES
18.1 Purpose
The
purpose of this Schedule is to identify the basis upon which price quotations
for energy sales to a non-associated entity will be determined when any such
a
non-associated entity makes a request of a Company or the Agent to purchase
System Energy. The prices for sales made shall be set by negotiation or in
accordance with filed rate schedules of the Companies and may include standard
industry adders.
18.2
Determination
of Energy Price Quotations
The
AEP
Central Control Center will predispatch System Energy requirements based upon
an
estimate of on-line System generation and such System Energy requirements.
Any
request for the purchase of System Energy will result in a price quotation
based
upon the incremental running cost of the next least costly to operate System
Generating Unit (that will be available to make the sale requested during the
time period that is the subject of the request by the non-associated entity)
after System needs have been met. In determining whether a Generating Unit
will
be available to make a requested sale, the matters listed in Section 6.5 and
the
availability of adequate transmission capacity on the System and on the systems
of other utilities shall be considered.
