Exhibit 10.5
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Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
POWER SALES AGREEMENT
THIS POWER SALES AGREEMENT ("Agreement" or "PSA"), made and entered
into as of June 1, 2001, by and between Allegheny Energy Supply Company, LLC, a
Delaware limited liability company, hereinafter referred to as "AE Supply" or
"Seller" and Monongahela Power Company, doing business as Allegheny Power,
hereinafter referred to as "AP" or "Buyer" (individually, the "Party" and
collectively, the "Parties").
WITNESSETH:
WHEREAS, AE Supply is an owner and operator of electric generating
facilities and desires to sell such electric energy and capacity through an
agreement with AP; and
WHEREAS, AP maintains Default Service obligations in its Ohio
franchised service territory and desires to purchase electric energy and
capacity through an agreement with AE Supply; and
WHEREAS, the rules and procedures governing the supply and consumption
of generation-sourced Ancillary Services in AP's franchised service territory,
in the context of this Agreement, are contemplated as they exist on the date of
this Agreement; and
WHEREAS, the Parties desire to set forth certain terms and conditions
between the Parties:
ARTICLE 1
DEFINITIONS
In addition to terms defined elsewhere in this Agreement, the following
definitions shall apply hereunder:
"AFFILIATE" means with respect to any person, any other person (other
than an individual) that, directly, or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such person. For purposes of the foregoing definition, "control" means the
direct or indirect ownership of more than five percent (5%) of the outstanding
capital stock or other equity interests having ordinary voting power.
"ANCILLARY SERVICES" means those services necessary to support the
transmission of capacity and energy from source to load while maintaining
reliable operation of the transmission system in accordance with Good Utility
Operating Practices. As used herein, Ancillary Services shall be as defined by
Order 888A issued by the Federal Energy Regulatory Commission (FERC) on March 4,
1997.
"AVAILABLE CAPACITY RESOURCES" means megawatts of net capacity from
owned or contracted for generating facilities, or load (including pumped storage
hydroelectric generation in the pumping mode) subject by contract to
interruption, or contingency assistance capacity made available by contract, all
of which are defined by and accredited pursuant to the procedure set forth in
Schedule 4 of the PJM West Reliability Assurance Agreement.
"BUSINESS DAY" means any day on which Federal Reserve member banks in
New York City are open for business.
"COMPETITIVE DEFAULT SUPPLIER" means an electric generation supplier,
other than the electric
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
distribution company (AP) that provides Default Service to retail customers.
"CONSUMPTION ENERGY IMBALANCE" means the difference between the Default
Service Schedule and the actual metered consumption of the Default Service load
plus applicable transmission and distribution losses, according to the
Monongahela Power Company Certified Supplier Coordination Tariff, as it may
change from time to time.
"CONTROL AREA" means an electric system or combination of electric
systems to which a common automatic generation control scheme is applied in
accordance with Good Utility Operating Practices to:
(1) match, at all times, the power output of the generators within
the electric system(s) and Power purchased from entities
outside the electric system(s), with the load within the
electric system(s);
(2) maintain scheduled interchange with other Control Areas;
(3) maintain the frequency of the electric system(s) within
reasonable limits; and
(4) provide sufficient generating capacity to maintain spinning and
operating reserves.
"CONTROL AREA OPERATOR" means an operator of a Control Area.
"COSTS" means, with respect to the Non-Defaulting Party, brokerage
fees, commissions and other similar third-party transaction costs and expenses
reasonably incurred by such Party either in terminating any arrangement pursuant
to which it has hedged its obligations or entering into new arrangements due to
failure to deliver or receive Power hereunder, determined in a commercially
reasonable manner; and all reasonable attorneys' fees and expenses incurred by
the Non-Defaulting Party in connection with failure to deliver or receive Power
hereunder.
"DEFAULT SERVICE" means AP's obligation to provide generation service
to all retail customers within its Ohio jurisdiction, according to statutory and
regulatory requirements as well as the Settlement less any amounts of such
obligation as AP may have satisfied through a selection of an alternate Power
supplier pursuant to that Settlement. Any purchases by AP from alternate Power
suppliers shall provide for: an all-inclusive package of products having the
same service characteristics as provided by AE Supply and denoted as Power under
this Agreement (specifically including the AP obligation of Available Capacity
Resources contained in the definition of Power); a constant percentage of AP's
"around the clock" Provider of Last Resort obligations during the term of the
purchase; and a purchase term of at least one fiscal or calendar year or full
year multiples thereof, unless otherwise mutually agreed by the Parties. If such
purchases are made by AP, formal written notice of the contract quantities must
be provided to AE Supply at least 180 days (or a mutually agreeable notice
period less than 180 days) in advance of the commencement dates of such
purchases.
"FINANCIAL GAINS" means, with respect to any Party, an amount equal to
the present value of the economic benefit to it, if any (exclusive of Costs),
resulting from the failure to deliver or receive Power hereunder, determined in
a commercially reasonable manner.
"FINANCIAL LOSSES" means, with respect to any Party, an amount equal to
the present value of the economic loss to it, if any (exclusive of Costs),
resulting from the failure to deliver or receive Power hereunder, determined in
a commercially reasonable manner.
"GOOD UTILITY OPERATING PRACTICE" (GUOP) means any of the applicable
practices, methods, standards, guides or acts:
(a) required by any Governmental Authority, regional or national
reliability council, including NERC, ECAR, or the successor of
any of them, or other applicable regional reliability council
for AP's Control Area whether or not the Party whose conduct is
at issue is a member thereof;
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
(b) otherwise engaged in or approved by a significant portion of
the electric utility industry, during the relevant time period
which in the exercise of reasonable judgment, in light of the
facts known, or that should have been known at the time a
decision was made, could have been expected to accomplish the
desired result in a manner consistent with Applicable Laws and
Regulations, good business practices, generation, transmission,
and distribution reliability, safety, environmental protection,
economy, and expediency.
(c) such other acts or practices as are reasonably necessary and
mutually agreed upon to maintain the reliability of the
Transmission System or of the Project.
(d) Good Utility Practice is intended to be acceptable practices,
methods, or acts generally accepted in the region, and is not
intended to be limited to the optimum practices, methods, or
acts to the exclusion of all others.
"INTEREST RATE" means, for any date, the lesser of (a) two percent (2%)
over the per annum rate of interest equal to the prime lending rate as may from
time to time be published in THE WALL STREET JOURNAL under Money Rates on such
day (or if not published on such day on the most recent preceding day on which
published), and (b) the maximum rate permitted by applicable law.
"NERC" means the North American Electric Reliability Council or any
successor organization thereto.
"ON-PEAK" means Monday through Friday (excluding NERC holidays)
hour-ending 0800 through hour-ending 2300 (5x16).
"OFF-PEAK" means Monday through Friday hour-ending 2400 through
hour-ending 0700 and including Saturday, Sunday, and NERC holidays hour-ending
0100 through 2400.
"OPERATING COMMITTEE" means the standing committee of one
representative each from Buyer and Seller as referenced in Article 9.
"OPERATING LEASE" means the Operating Lease Agreement, dated June 1,
2001, by and between Monongahela Power Company and Allegheny Energy Supply, LLC,
as it exists and as it may be renewed or amended, from time to time.
"PJM WEST" shall mean the aggregate of the control areas, recognized by
the North American Electric Reliability Council or any successor thereto, of the
PJM West Transmission Owners.
"PJM-WESTERN HUB" means the aggregation of selected busses at the
Western interface region within the PJM Control Area that provides a common
point for commercial energy trading in the PJM Energy Market.
"POWER" means electric capacity and energy of the type commonly known
as three-phase, sixty-cycle, alternating current together used to satisfy real
time load specifically including any Available Capacity Resources for which AP
is made responsible by its Control Area after AP joins and is experiencing on a
real time basis the rules of a functioning Regional Transmission Organization or
RTO (RTO as defined by the Federal Energy Regulatory Commission).
"POWER RESOURCES" means the sources of Power (including identification
of the Control Area) with which Seller has made arrangements in order to provide
Power under this Agreement. AE Supply may source Power under this Agreement, in
whole or in part, at any time, from any number of suppliers in the wholesale
generation market, provided applicable North American Electric Reliability
Council (NERC), East Central Area Reliability Council (ECAR), or other pertinent
regional and sub-regional rules are observed.
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
"REGULATORY APPROVALS" means all applicable state and federal
regulatory authorizations, consents, or approvals required for this Agreement.
"SCHEDULE" or "SCHEDULING" means communicating with and confirming with
all Transmitting Utilities as well as between Buyer and Seller that a particular
amount of Power is to be delivered or received and providing all such
information and satisfying all such requirements as may be necessary to cause
such parties to recognize and confirm the delivery or receipt of the Power. All
scheduling of services with Transmitting Utility(s) shall be accomplished in
compliance with the scheduling rules of those service providers. Between Seller
and Buyer, scheduling day-ahead shall be accomplished no later than 11:30 EPT,
one (1) business day before delivery, or scheduling hourly no later than twenty
(20) minutes before the start of the intended Power flow or as per other rules
as the Buyer and Seller may jointly agree to from time to time.
"SETTLEMENT" means the settlement in Monongahela Power Company Case No.
00-02-EL-ETP.
"SUPPLY ENERGY IMBALANCE" means the difference between a Default
Service Schedule and associated Schedule(s) according to the Monongahela Power
Company Certified Supplier Coordination Tariff, as it may change from time to
time.
"TAXES" means all ad valorem, property, occupation, utility, gross
receipts, sales, use, excise and other taxes or governmental charges, licenses,
permits and assessments, other than taxes based on net income or net worth.
"TRANSITION PERIOD" means with respect to AP's Default Service
obligation, the period beginning 12:01 am, January 1, 2001 through midnight,
December 31, 2005.
"TRANSMITTING UTILITY" means the utility or utilities and their
respective Control Area Operators and their successors, transmitting Power that
is sold hereunder.
ARTICLE 2
PRODUCT DESCRIPTION
2.1 SERVICE CHARACTERISTICS. AE Supply will provide AP firm Power, through
any means available including purchases, in amounts equal to the
Contract Quantity as specified in Section 2.2. The provision of firm
Power will be in amounts adjusted on a real time basis to compensate
for all losses and energy imbalances (whether Supply Energy Imbalance
or Consumption Energy Imbalance), but shall specifically exclude all
other Ancillary Services. The prices established in Section 7 shall be
the total compensation for all services contemplated in this Section
2.1.
2.2 CONTRACT QUANTITY. AE Supply will be responsible to meet all Default
Service Schedules provided by AP that meet the notification guidelines
of the AP Control Area Operator and AE Supply. AE Supply may of its own
accord actually modify the Default Service Schedules through its
dealings with the AP Control Area as long as it accepts the Consumption
Energy Imbalance charge consequences of doing so.
2.3 FIRM POWER. All deliveries hereunder shall be deemed firm and a Party
may only be excused from delivering or receiving Power hereunder for
reasons of Force Majeure, as defined in Section 13.1. In the event a
Party fails to deliver or receive Power hereunder for reasons other
than Force Majeure, then the interrupting Party shall have the
obligations set forth in Article 5.
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
2.4 ANCILLARY SERVICES. The Buyer shall be responsible for Ancillary
Services (other than those mentioned in 2.1 as being the responsibility
of Seller). Buyer may contract with Seller and/or other parties to
supply all or part of the Ancillary Services required to support its
Default Service obligations. However, Buyer will make use of the supply
of those Ancillary Services provided under the PURCHASE AND SALE
AGREEMENT FOR ANCILLARY SERVICES BETWEEN ALLEGHENY POWER AND ALLEGHENY
ENERGY SUPPLY COMPANY, LLC DATED APRIL 26, 2000, as long as that
agreement is still in effect contemporaneously with Buyer's need for
Ancillary Services and provided that the prices for such Ancillary
Services are as specified in the agreement.
2.5 TRANSMISSION AND DISTRIBUTION LOSSES. Seller shall be responsible for
any transmission losses and loss charges relating to the transmission
of Power to the Delivery Point(s) and shall make available sufficient
Power at the Delivery Point(s) to compensate for the average
distribution losses incurred in Buyer's provision of Power to the
Default Service load.
ARTICLE 3
SCHEDULING AND FORECASTING
3.1 DEFAULT SERVICE SCHEDULES. Daily Default Service Schedules will be
submitted by AP to AE Supply by 11:30 EPT, one (1) business day prior
to delivery. Schedules shall be submitted to:
AE Supply 24-Hour Scheduling Desk: 000-000-0000
FAX: 000-000-0000
EMAIL: XXXXXXXXXX@XXXXXXXXXXXXXXX.XXX
or such other phone and fax numbers as shall be provided in writing
from Seller to Buyer.
3.2 POWER TRANSMISSION AND SCHEDULING. Seller shall arrange and be
responsible for transmission service to the Delivery Point(s) and shall
Schedule or arrange for Scheduling service with its Transmitting
Utility, in accordance with the practice of the Transmitting Utility,
to deliver the Power to the Delivery Point(s). Buyer's obligation shall
be to arrange for transmission service with the AP Control Area and
pertinent transmission service provider at and from the Delivery
Point(s). Unless provided sixty (60) prior days written notice to the
contrary by Buyer, AE Supply will act as agent for AP with respect to
scheduling the requisite amount of real-time transmission service at or
from the Delivery Point(s) for Default Service with the AP Control Area
and pertinent transmission service provider or their successors deemed
necessary by the Control Area or AE Supply.
3.3 DEFAULT SERVICE FORWARD FORECASTS. AP will provide AE Supply a rolling
twenty-four (24) month forecast of its anticipated Default Service load
by the first business day of each month prior to the start of the
rolling 24-month period. AP does not guarantee maximum or minimum load.
AE Supply's obligation is to provide the real-time amount of Default
Service Power required to satisfy the Default Service Schedule
irrespective of the amount forecasted by AP. If any purchases are made
by AP which would reduce the contract quantities, formal written notice
must be provided to AE Supply at least 180 days (or a mutually
agreeable notice period less than 180 days) in advance of the
commencement dates of such purchases, and any reductions in the
contract quantities will be reflected in the Default Service Forward
Forecasts.
3.4 DEFAULT SERVICE 7-DAY FORECASTS. Upon request and ninety (90) days
notice, AP will provide AE Supply a rolling
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
seven-day forecast of its anticipated Default Service load by 10:00AM
EPT each business day. AP will update the rolling seven-day forecast as
soon as new information becomes available. AP does not guarantee
maximum or minimum load. AE Supply's obligation is to provide the real
time amount of Default Service Power required to satisfy the Default
Service load irrespective of the amount forecasted by AP.
ARTICLE 4
SPECIAL TERMS AND CONDITIONS
4.1 WHOLESALE ARBITRAGE. This is a "services provision" product that is
designed and priced to provide the flexibility necessary to serve a
variable retail load. The inherent flexibility of this product is not
intended to permit AP the ability to pursue arbitrage opportunities in
any power market. Such arbitrage activities are prohibited.
4.2 DEFAULT SERVICE LOAD MANAGEMENT. To minimize the risk to AE Supply,
hereunder, AP agrees to enforce its applicable tariff provisions with
customers taking Power under tariff, enforce contract provisions with
customers taking Power under contract, exercise interruptible and
curtailable contract rights, promote the use of off-peak load riders,
support regulatory initiatives that would result in a decrease in the
Default Service obligation or an increase in the Price to Compare,
encourage customers to choose alternate generation suppliers and actively
manage Default Service by among other things avoiding the extension of
retail contracts or commitments whenever it is possible for AP to do so
through its unilateral action. In addition, as mutually agreeable to the
Parties, AP shall undertake Utility Initiated Programs ("UIPs") to reduce
its Default Service Load during peak periods. UIPs may include but are not
limited to a generation service buy-back program. The Parties will share
the net energy price benefits of UIPs equally by ascertaining and splitting
on a 50:50 basis the hourly difference between the weight average price to
be charged Buyer to support the load that otherwise would have been
incurred and the proxy price for real power market energy which shall be
corresponding PJM Western Hub hourly posting. In calculating the price that
Buyer would have been charged otherwise hourly to support the load, there
will be an appropriate apportionment to that load of any energy charged at
other than PTC prices during that period according to Section 7.1(c) of
this Agreement. Any capacity commodity benefits (including Available
Capacity Resources) that may accrue from UIPs after AP becomes subject to
the rules of an operating RTO will, however, be the exclusive property of
AE Supply, during the term of this Agreement.
4.3 INTERRUPTIBLE AND CURTAILABLE LOADS. AP may have special arrangements
with certain retail customers that permit interruption or curtailment for
economic reasons. AE Supply will notify AP by 9:00 am, one business day
prior to delivery of its desire to interrupt these customers. AP will reply
to AE Supply no later than 10:30 am specifying the quantity of load
available for interruption according to applicable contract or tariff terms
and conditions. AP shall interrupt the quantity of load requested by AE
Supply for the duration requested by AE Supply, up to the amount of load
available for interruption. AP will provide sufficient documentation to
verify the load interrupted. Any capacity commodity benefits (including
Available Capacity Resources) that may accrue from
Interruptible/Curtailable Loads after AP becomes subject to the rules of an
operating RTO will, however, be the exclusive property of AE Supply, during
the term of this Agreement.
4.4 PJM WEST OR RTO. The Parties agree that the terms of this Agreement
shall be modified by the Operating Committee, as required, to comport with
the operating requirements of PJM West or any other applicable RTO.
Further, the Parties agree and maintain that any such modifications shall
be accomplished in a manner that minimizes the material effects on this
Agreement.
4.5 PJM WEST OR RTO VOTING RIGHTS. During the term of this Agreement, the
Operating Committee shall determine the allocation, between AP and AE
Supply, of any and all voting rights and privileges assigned to AP under
any PJM West or other applicable RTO agreement.
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
4.6 SPECIAL CONTRACTS. The Parties agree that AE Supply will support via
this Agreement AP's obligation to provide generation service for Eramet
under its current Electric Service Agreement, at the unbundled generation
rate of $10.11/MWh plus the Fuel Component (inclusive of losses), through
September 1, 2004, unless such Electric Service Agreement is sooner
terminated. The Operating Committee shall oversee the methodology for
calculating the Fuel Component, hereunder, assuring that the necessary data
are available and such calculation is performed in accordance with the
agreements that are in effect between AP and Eramet. This provision shall
survive termination of this Agreement, unless termination occurs pursuant
to ss.8.2. The Parties also agree that if AP cannot or does not avoid under
the provisions of Section 4.2 above the extension of the Eramet Electric
Service Agreement beyond its present termination date, then AE Supply's
obligation to continue to supply Power for such Eramet load hereunder shall
cease effective September 1, 2004.
ARTICLE 5
INTERRUPTIONS OF DELIVERIES OR RECEIPTS
5.1 INTERRUPTIONS OF FIRM TRANSACTIONS. With respect to the unauthorized
failure to Schedule and deliver or receive in whole or in part
deliveries or receipts in accordance with this Agreement:
a. For reasons other than Force Majeure, if Seller fails to
Schedule for delivery and actually deliver the Contract
Quantity, then Seller shall incur any penalties and
charges that may be imposed on Buyer by the AP Control
Area or its successor Control Area, or other organization
with the authority to impose such charges or penalties,
including but not limited to the aforementioned
Consumption Energy Imbalance charge and Supply Energy
Imbalance charge that may result from such failure. For
reasons other than Force Majeure, if Buyer fails to use
its best efforts to facilitate Seller's submittal of an
accurate Schedule for receipt of the Contract Quantity
(while Seller is acting as Buyer's scheduling agent) or
Buyer fails to use its best efforts to submit an accurate
Schedule (should Buyer decide to schedule itself or hire
another party to do so for it), Buyer shall pay Seller an
amount for each unit of such deficiency equal to the
difference between (i) the price at which Seller is able
to sell comparable supplies of Power using commercially
reasonable efforts or, absent a sale, the market price at
the PJM-Western Hub or such other market proxy
established within the PJM West region as commercially
appropriate at the xxxx Xxxxxx learns of the failure to
Schedule for receipt of the Contract Quantity, in whole
or in part, at which Seller is or would be able to sell
comparable supplies of Power at a commercially reasonable
price, and (ii) the applicable Contract Price (as
adjusted to reflect reasonable differences in
transmission costs, if any). Evidence of Buyer's best
efforts to schedule properly shall be its continuous
production and timely provision of load forecasts
according to standards that would be acceptable under
GUOP standards and to include proper netting of
Competitive Default Supplier load from Schedules set. In
no event shall amounts paid by Buyer or Seller include
any self-styled penalties, ratcheted demands or similar
charges. The Parties agree further that such payments
will become due and payable hereunder in accordance with
the provisions of Article 10 for Buyer's non-performance
and in the case of Seller's non-performance, within
twenty (20) days after the month in which Seller failed
to so perform or twenty (20) days after Seller receives
Buyer's notice of said non-performance, whichever is
later. The aggrieved Party shall provide the
non-performing Party a demand for payment setting forth
the basis and calculation of the amount demanded, such
demand to be sent in accordance with Section 18.3.
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
b. Both Parties hereby stipulate that the damages set forth
in Section 5.1(a) above are reasonable in light of the
anticipated harm and the difficulty of estimation or
calculation of actual damages and each Party hereby
waives the right to contest such damages as an
unreasonable penalty.
c. In the event either Buyer or Seller fails to pay to the
other Party any undisputed amounts in accordance with
Section 5.1(a) above when due, the aggrieved Party shall
have the right to (i) suspend performance until such
amounts plus interest calculated at the Interest Rate
have been paid, and/or (ii) exercise any remedy available
at law or in equity to enforce payment of such amount
plus interest calculated at the Interest Rate.
ARTICLE 6
DELIVERY POINTS AND RELIABILITY GUIDELINES
6.1 DELIVERY POINT(S). AE Supply will deliver firm Power to AP into the AP
Control Area at any AP transmission interconnection(s) and/or generator
step-up transformer(s) interconnections within AP. AE Supply, at its
sole discretion, may schedule the delivery of firm Power to AP in any
combination of MW amounts and at any combination of delivery points, to
satisfy the total Power supply requirements under this Agreement.
6.2 RELIABILITY GUIDELINES. Each Party agrees to adhere to Good Utility
Operating Practice and specifically adhere to the applicable operating
policies, criteria and/or guidelines of the NERC, the Control Area
Operator and any regional or subregional requirements.
ARTICLE 7
PRICE AND TITLE
7.1 PRICE. The Contract Price for Power supplied hereunder by Seller shall
be determined for the categories of Power as follows:
a. For all Power delivered in any calendar year during
Off-Peak periods, the applicable Contract Price shall be
the weighted average of all Shopping Credits, by rate
classification, and including retail special (non-tariff)
contracts customers, including, but not limited to a
Shopping Credit equal to the unbundled generation rate
for the Eramet contract provided in Section 4.6
(collectively "PTC"). With respect to Buyer's retail
tariff customers, the PTC shall be equal to the Shopping
Credits established by the Public Utilities Commission of
Ohio in the Settlement. All PTCs shall be less Ancillary
Services until such time as AP is subject to the rules of
a functioning RTO (including any separately traded
capacity products such as Available Capacity Resources
whether they are strictly called Ancillary Services or
not). Once AP is subject to the rules of an RTO on a real
time basis, AP will provide all revenues it collects from
its Default Service customers for Ancillary Services to
AE Supply as part of the PTC calculation and/or cause
that revenue to flow to AE Supply under a separate
agreement, provided that AE Supply is actually performing
as supplier of those Ancillary services. In exchange for
the payment of Ancillary Services revenues to AE Supply
hereunder (if there is any), AE Supply shall provide the
quantity of Ancillary Services needed by the Default
Service customers that provide the revenue stream that AE
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
Supply actually receives from AP (otherwise the
provisions of any separate agreement for Ancillary
Services shall prevail).
The Parties agree that should AP be permitted to increase the rates it
charges some or all of its customers specifically for the purpose of
recovering the market expense for Available Capacity Resources or any
other generation services, AP shall pay any additional revenues
collected specifically for Available Capacity Resources or other
generation services market expenses to AE Supply if AE Supply is
supplying them. Notwithstanding anything herein, should AP be permitted
to increase the rates it charges its customers such that AP recognizes
no income benefits, now or in the future, from such increase, AP shall
retain and accrue such additional revenues for the future benefit of
its customers; provided however, the Contract Price shall be no less
than the PTCs for each calendar year established in the Settlement, by
customer class, plus any additional revenues (per MWh) that AP is
permitted to collect specifically for Available Capacity Resources,
Ancillary Services or other generation services market expenses, where
AE Supply is the supplier.
The methodology used to develop a weighted average PTC at any point in
time is as provided in Section 7.1.d below.
b. For a fixed amount of Power delivered in any calendar
year during On-Peak periods (called the "Base Level
On-Peak Power"), the applicable Contract Price shall be
the weighted average of all PTCs pertaining to that
calendar year as explained in 7.1.a. above. The fixed
amounts of Base Level On-Peak Power for each calendar
year are as follows:
Year MWhS
---- ---------
2001 800,000
2002 600,000
2003 300,000
2004 200,000
2005 100,000
If the actual amount of calendar year Power consumed during
On-Peak periods is less than or equal to the pertinent Base Level
On-Peak Power, the Contract Price pertinent to all of said Power
shall be the PTC.
a. For all Power delivered during On-Peak periods during
each calendar year beyond the Base Level On-Peak Power,
the applicable Contract Price shall be at market-based
rates, within a range bounded by: 1) that calendar year's
weighted average PTC; and 2) the straight arithmetic
average of the forward on-peak firm power calendar year
prices posted by Energy Argus (or equivalent publicly
available forward market price publication) prospectively
for that calendar year for the PJM-Western Hub, or such
other hub or market proxy as deemed appropriate by the
Operating Committee, provided any such hub is established
and maintained by the PJM Office of Interconnection and
is commercially recognized in the marketplace for trading
within the PJM West region, on each Monday in the four
(4) consecutive weeks beginning in November prior to the
start of the calendar year ("Posted Price Average", or
PPA). Should a price not be published on each Monday, the
most recent published price prior to that Monday will be
used. In the event that the PPA for any calendar year is
greater than the PTC, the Operating Committee may, at its
discretion, establish the Contract Price within this
range.
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
b. Weighted average PTCs for each calendar year shall be
calculated by weighting the PTC, by rate classification,
and including retail special (non-tariff) contracts
customers by the amount of MWhs consumed by each rate
class relative to the total MWhs consumed by all Default
Service customers in that calendar year. With respect to
Buyer's retail tariff customers, the PTC shall be equal
to the Shopping Credit established by the Public
Utilities Commission of Ohio as per the Settlement.
Prospective weighted average PTCs will be calculated so
that concurrent, real-time billing can occur between
Seller and Buyer. Unless the Operating Committee
determines otherwise, the prospective calendar year PTCs
shall be as follows:
Year PTC/ MWh
---- ---------
2001 $24.24
2002 $24.24
2003 $24.24
2004 Q1-Q3 $23.95
2004 Q4 $32.93
2005 $32.93
It shall be the Operating Committee's responsibility to set
real-time weighted average PTC's each calendar year and at various
times intra-year, if necessary, with the intention of minimizing
year-end billing adjustments. If intra-year PTC adjustments are
made, then the actions specified in Section 7.1.c shall be
repeated from that adjustment date forward. Payments made,
hereunder, shall be net of any payments made under the Operating
Lease for the same period.
7.2 TITLE TRANSFER. Title to, possession of, and risk of loss (except for
electrical system distribution losses) of Power Scheduled and received
or delivered hereunder shall transfer from Seller to Buyer at the
Delivery Point(s). Seller warrants title to the Power sold and
delivered hereunder and the right of Seller to sell such Power.
ARTICLE 8
TERM OF AGREEMENT
8.1 TERM. Subject to the other provisions of this Agreement, the term of
this Agreement shall commence June 1, 2001 and shall remain in effect
through the Transition Period, except as provided under ss.4.6.
8.2 TERMINATION. In the event of an attempted hostile takeover of AP as
determined by the Board of Directors of AP, AP shall provide notice to AE
Supply of such attempted hostile takeover. Should said takeover attempt be
successful and not be approved by the board of directors of AP, AE Supply
may terminate this Agreement upon ninety (90) days' written notice, which
notice shall be provided within thirty (30) days after the successful
completion of said hostile takeover.
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
ARTICLE 9
OPERATING COMMITTEE
9.1 OPERATING COMMITTEE. An Operating Committee consisting of one
representative each from Buyer and Seller shall be established for
purposes of administering this Agreement. The representatives shall be
indicated by the Parties to one another in writing on the first day
that this Agreement becomes effective and each time thereafter that a
Party wishes to make a change in representation. Each representative
shall be an officer of the source organization empowered to commit that
organization to decisions made by the Committee. Affirmative actions of
the Operating Committee can be taken only upon the agreement of both
Buyer's and Seller's representatives. The duties of the Operating
Committee shall include, but are not limited to, rendering needed
decisions that otherwise might require some form of alternative dispute
resolution, proposing amendments to this Agreement as required to
accommodate RTO or other requirements as set forth in section 4.4
herein, acquiring necessary data, making calculations and determining
values as required to implement the provisions of Article 7, overseeing
the calculation of the Fuel Component according to ss.4.6 and any other
items necessary to the proper administration of this Agreement.
ARTICLE 10
BILLING AND PAYMENT
10.1 PAYMENTS AND STATEMENTS. Each Monday or next subsequent business day if
Monday is a Banking or Company holiday, for the preceding seven-day
period Sunday through Saturday AE Supply shall notify AP via email of
the amount to be prepaid based on the transactions Scheduled or a
reasonable estimate for the pertinent period ("Prepayments"). AP shall
pay the requested prepaid amount within twenty-four (24) hours of
notification. On or before the eighth working day of each calendar
month, AE Supply shall calculate the amount due for the actual
deliveries to AP for the previous calendar month. That amount shall
then be reconciled with the total prepaid amounts received from AP
during the previous calendar month. Any payment or credit due as the
result of such reconciliation shall be made by the end of the twentieth
(20th) calendar day of the month. Payment shall be made to the account
designated by Seller in Section 18.3 by wire transfer.
10.2 PAST DUE AMOUNTS. Any undisputed amounts, other than Prepayments, both
principal and interest, not paid by the due date shall be deemed
delinquent and will accrue interest calculated at the Interest Rate,
such interest to be calculated daily from the due date to the date the
unpaid amount is paid in full.
10.3 DISPUTES AND ADJUSTMENTS OF INVOICES. A Party may, in good faith,
dispute the correctness of any invoice or adjustment to an invoice
rendered under this Agreement or adjust any invoice for any arithmetic
or computational error within six (6) months from the date of the
invoice. If Buyer, in good faith, disputes any part of any statement,
Buyer shall provide a written explanation of the basis for the dispute
and pay the portion of such statement conceded to be correct no later
than the due date as calculated in accordance with Section 10.1. If any
amount disputed by Buyer, other than Prepayments, is determined to be
due to Seller, it shall be paid by Buyer within two (2) Business Days
of such determination, together with interest calculated at the
Interest Rate from the original due date until the date paid. If Buyer
fails to pay amounts due to Seller in a timely manner, other than
Prepayments, Seller may suspend performance pending receipt of full
payment (and shall have no further duty to the Buyer as a result of
such action).
10.4 AUDIT. Each Party or third party representative of a Party has the
right, at its sole expense and during normal working hours, to examine
the records of the other Party to the extent reasonably necessary to
verify accuracy of any statement, charge or computation made pursuant
to the provisions of this Agreement. If any such examination reveals
any inaccuracy in any statement, the necessary adjustments in such
statement and the payments thereof shall be made promptly and shall
bear interest calculated at the Interest Rate from the date
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
overpayment or underpayment was made until paid; provided, however,
that no adjustment for any statement or payment will be made unless
objections to the accuracy thereof were made prior to the lapse of
twelve (12) months from the rendition thereof, and thereafter any
objection shall be deemed waived.
10.5 RECORDS. Each Party shall keep such records as may be necessary to
afford the other a clear history of all deliveries of Power hereunder.
10.6 RECORDING. Each Party acknowledges and agrees that either Party may
create a tape or electronic recording of conversations between the
Parties to this Agreement, with proper audible notice as required by
law, that may be submitted in evidence in any proceeding or action
relating to this Agreement.
ARTICLE 11
INDEMNIFICATION
11.1 SELLER'S INDEMNIFICATION. Seller hereby agrees to indemnify, defend and
hold harmless Buyer, its agents, servants, affiliates, officers,
directors, employees and representatives, (collectively, "Buyer's
Indemnitees") of each, from and against any and all losses, claims,
damages or liabilities to third parties (including reasonable
attorneys' fees actually incurred and including, without limitation,
penalties or fines imposed by government authorities) arising out of
the fraud, gross negligence or the willful misconduct of Seller
relating to Power delivered under this Agreement until such Power has
been delivered to Buyer at the Delivery Point(s) including, without
limitation, the loss or claims for loss or damage to property, except
to the extent caused by the fraud, negligence or the willful misconduct
or breach of obligation under this Agreement of the Buyer's Indemnitees
and provided that Seller shall be promptly notified in writing of any
such claim or suit brought against any such Buyer's Indemnitees. The
foregoing notwithstanding, Seller's obligations under this Agreement
towards any Buyer's Indemnitees are conditioned upon such Buyer's
Indemnitees providing such cooperation as Seller may reasonably request
in connection with its defense or settlement of the claim or suit
against such Buyer's Indemnitees.
11.2 BUYER'S INDEMNIFICATION. Buyer hereby agrees to indemnify, defend and
hold harmless Seller, its agents, servants, affiliates, directors,
employees, and representatives, (collectively, "Seller's Indemnitees")
of each, from and against any and all losses, claims, damages or
liabilities to third parties (including reasonable attorneys' fees
actually incurred and including, without limitation, penalties or fines
imposed by government authorities) arising out of the fraud, gross
negligence, or willful misconduct of Buyer relating to Power delivered
under this Agreement after such Power has been delivered to Buyer at
the Delivery Point(s) including, without limitation, the loss or claims
for loss or damage to property, except to the extent caused by the
fraud, negligence or the willful misconduct or breach of obligation
under this Agreement of the Seller's Indemnitees and provided that
Buyer shall be promptly notified in writing of any such claims or suit
brought against any such Seller's Indemnitees. The foregoing
notwithstanding, Buyer's obligations under this Agreement towards any
Seller's Indemnitees are conditioned upon Seller's Indemnitees
providing such cooperation as Buyer may reasonably request in
connection with its defense or settlement of the claim or suit against
such Seller's Indemnitees.
ARTICLE 12
ASSIGNMENT AND SUCCESSION
12.1 ASSIGNMENT AND SUCCESSION. Neither Party shall assign this Agreement or
its rights hereunder without the prior
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
written consent of the other Party, provided, however, either Party
may, without the consent of the other Party (and without relieving
itself from liability hereunder), (i) transfer, sell, pledge, encumber
or assign this Agreement or the accounts, revenues or proceeds hereof
in connection with any financing or other financial arrangements; (ii)
transfer or assign this Agreement to an affiliate of such Party which
affiliate's creditworthiness is equal to or higher than that of such
Party; (iii) except as provided in Section 8.2 hereof, transfer or
assign this Agreement to any person or entity succeeding to all or
substantially all of the Party's assets provided that Party has at
least a S&P rating of BBB- or Baa3 from Xxxxx'x (or their equivalents
should those agencies change their rating designations). Upon any
assignment made in compliance with this Section 12.1, this Agreement
shall inure to and be binding upon the successors and assigns of the
assigning Party. References to any Party named herein shall include
such Party's successors and assigns.
ARTICLE 13
LIMITATION OF LIABILITY AND FORCE MAJEURE
13.1 FORCE MAJEURE. To the extent either Party is prevented by Force Majeure
from carrying out, in whole or in part, its obligations hereunder and
such Party (the Claiming Party) gives notice and details of the Force
Majeure to the other Party as soon as practicable, then the Claiming
Party shall be excused from the performance of its obligations (other
than the obligation to make payments then due or becoming due with
respect to performance prior to the Force Majeure). The term Force
Majeure shall mean an event or circumstance which prevents one Party
from performing its obligations hereunder, which event or circumstance
was not anticipated, which is not within the reasonable control of or
the result of the negligence of the Claiming Party and which, by the
exercise of due diligence the Claiming Party is unable to overcome or
avoid or cause to be avoided. Force Majeure shall not be based on (i)
the loss of Buyer's markets; (ii) Buyer's inability economically to use
or resell the Power purchased hereunder; (iii) the loss or failure of
Seller's supply; or (iv) Seller's ability to sell the Power at a more
advantageous price. Neither Party may raise a claim of Force Majeure
based in whole or in part on interruption by a Transmitting Utility
unless (i) such Party has contracted for firm transmission with a
Transmitting Utility for transmission of the Power to be delivered to
or received at the Delivery Point(s) and (ii) such interruption is due
to Force Majeure or similar term as defined under the Transmitting
Utility's tariff.
13.2 LIMITATION OF LIABILITY. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES
AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE
ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN
EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY
OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE
OBLIGOR'S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION AND
ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO
REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR IN A
TRANSACTION, THE OBLIGOR'S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL
DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND
EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY
ARE WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED, NEITHER PARTY SHALL BE
LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT
DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY
STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR
OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN
IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE
CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY,
WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR
PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE
LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR
IMPOSSIBLE TO DETERMINE AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE
A REASONABLE APPROXIMATION OF THE HARM OR LOSS.
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
ARTICLE 14
TAXES
14.1 COOPERATION. Each Party shall use reasonable efforts to implement the
provisions of and to administer this Agreement in accordance with the
intent of the Parties to minimize Taxes, so long as neither Party is
materially adversely affected by such efforts.
14.2 TAXES. Seller shall pay or cause to be paid all taxes, fees, levies,
penalties, license or charges imposed by any governmental authority
("Taxes") on or with respect to the Power arising prior to the Delivery
Point(s). Buyer shall pay or cause to be paid all Taxes on or with
respect to Power at and from the Delivery Point(s) other than ad
valorem, franchise or income taxes which are related to the sale of the
Power and are, therefore, the responsibility of the Seller. In the
event Seller is required by law or regulation to remit or pay Taxes
which are Buyer's responsibility hereunder, Buyer shall promptly
reimburse Seller for such Taxes. If Buyer is required by law or
regulation to remit or pay Taxes that are Seller's responsibility
hereunder, Buyer may deduct the amount of any such Taxes from the sums
due to Seller hereunder. Nothing shall obligate or cause a Party to pay
or be liable to pay any taxes for which it is exempt under the law.
ARTICLE 15
DEFAULT AND RESPONSIBILITY
15.1 EVENTS OF DEFAULT. An event of default shall mean, with respect to a
Party ("Defaulting Party") the occurrence of any of the following:
(a) the failure to make, when due, any undisputed payment, other
than Prepayments, required pursuant to this Agreement if such
failure is not remedied within five (5) Business Days after
written notice;
(b) any representation or warranty made by a Party herein shall be
false or misleading in any material respect when made; and
(c) the failure to perform any material covenant or obligation set
forth in the Agreement (except to the extent constituting a
separate event of default and except for a Party's obligations
to deliver or receive the Power, the exclusive remedy for which
is provided in Section 5.1) if such failure shall not be cured
within five (5) Business Days after written notice.
15.2 REMEDIES. If an event of default shall have occurred and shall be
continuing, the Non-Defaulting Party may, in its sole discretion, (i)
designate a day, no earlier than the day such notice is effective and
no later than twenty (20) days after such notice is effective, as an
early termination date ("Early Termination Date") to liquidate and
terminate this Agreement between the Parties, and (ii) withhold any
payments due to the Defaulting Party under this Agreement. The
Non-Defaulting Party shall calculate, in a commercially reasonable
manner, a Settlement Amount as of the Early Termination Date (or, to
the extent that in the reasonable opinion of the Non-Defaulting Party
portions of this Agreement are commercially impracticable to liquidate
and terminate or may not be liquidated and terminated under applicable
law on the Early Termination Date, as soon thereafter as is reasonably
practicable).
15.3 NET OUT OF SETTLEMENT AMOUNTS. The Non-Defaulting Party shall aggregate
all Settlement Amounts into a single net amount ("Net Amount") and
notify the Defaulting Party of the Net Amount owed or owing. If the
Non-Defaulting Party's aggregate Financial Losses and Costs exceed its
aggregate Financial Gains, the Defaulting Party shall within three (3)
Business Days of receipt of such notice, pay the Net Amount to the
Non-Defaulting Party, which Net Amount shall bear interest calculated
at the Interest Rate from the Early Termination Date until paid. If the
Non-Defaulting Party's aggregate Financial Gains exceed its Financial
Losses and Costs, if
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
any, resulting from the event of default, the Non-Defaulting Party
shall pay the Net Amount to the Defaulting Party on the next regularly
scheduled payment date.
15.4 DISPUTES WITH RESPECT TO NET AMOUNT. If the Defaulting Party disputes
the Non-Defaulting Party's calculation of the Net Amount, in whole or
in part, the Defaulting Party shall, within two (2) Business Days of
receipt of the Non-Defaulting Party's calculation of the Net Amount,
provide to the Non-Defaulting Party a detailed written explanation of
the basis for such dispute; provided, however, that if the Net Amount
is due from the Defaulting Party, the Defaulting Party shall first
transfer collateral satisfactory to the Non-Defaulting Party in an
amount equal to the Net Amount to an escrow account to an agent
acceptable to both Parties.
15.5 SUSPENSION OF PERFORMANCE. Notwithstanding any other provision of this
Agreement, after the occurrence of (i) an event of default so long as
the event of default is continuing and has not been cured or (ii) an
event which, with notice or the passage of time or both, would
constitute an event of default, the Non-Defaulting Party, upon written
notice to the Defaulting Party, shall have the right to suspend
performance hereunder and to exercise any remedy available at law or in
equity, except as provided in Article 16.
ARTICLE 16
ARBITRATION
16.1 COMPULSORY BINDING ARBITRATION. All disputes of every kind and nature
between the Parties arising out of or in connection with this Agreement
shall be submitted to binding arbitration pursuant to the Commercial
Arbitration Rules of the American Arbitration Association (as the same
may be amended from time to time, the "AAA Rules"). If and to the
extent that the provisions of this Agreement are inconsistent with the
AAA Rules, the provisions of this Agreement shall control in any
arbitration proceeding.
16.2 DEMAND FOR ARBITRATION. Either party may make demand for arbitration in
writing to the other party, setting forth the nature of the dispute,
the amount involved, if any, the remedies sought and the name of the
arbitrator appointed by the party demanding arbitration. Copies of such
notice shall also be given to the American Arbitration Association as
required by the AAA Rules.
16.3 ARBITRATORS.Within ten (10) days after any demand for arbitration under
Section 16.2, the other party shall name its arbitrator, or in default
thereof, such arbitrator shall be named forthwith pursuant to the AAA
Rules. The two arbitrators so selected shall name a third arbitrator
within seven (7) days after selection of the second arbitrator from the
National Panel of Arbitrators of the American Arbitration Association
or, in the absence of such agreement on a third arbitrator by the two
arbitrators so appointed, a third arbitrator shall be appointed
pursuant to the AAA Rules. At least one of the three arbitrators named
or appointed under this Section shall be an attorney-at-law.
16.4 RULES FOR ARBITRATION. The Federal Rules of Civil Procedure and the
Federal Rules of Evidence shall apply to all proceedings of any
arbitration hereunder, including discovery proceedings. Depositions in
advance of the hearing shall be permitted for purposes of preparing
testimony, but shall be limited in number so as to avoid any delay in
achieving the time periods for decisions required hereunder. All
questions relating to discovery and disclosure shall be referred to one
of the arbitrators, who shall be chosen for such purpose by the
arbitrators and shall be an attorney-at-law; and his or her
determination shall be final.
16.5 HEARING AND AWARD. The arbitration hearing shall be held in Pittsburgh,
Pennsylvania, and shall commence not later than forty (40) days after
the date of the original demand under Section 16.2. The award of the
arbitrators shall be made not later than thirty (30) days after the
date of closing of the hearing, or if oral hearings have been waived,
after the date of transmitting the final statements and proof to the
arbitrators; provided, however, that in no event shall any award be
made later than eighty (80) days after the date of the original demand
for arbitration under Section 16.2.
16.6 ARBITRATOR'S AUTHORITY. In the event the arbitrators find a breach of
the terms and conditions of this Agreement to have occurred and be
continuing, the arbitrators shall have express authority to order (i)
specific performance; and (ii) the payment of damages to compensate the
non-breaching party for any loss; provided, in the event the
arbitrators find either Party's actions to be in breach of the terms
and conditions of this Agreement, that Party shall promptly comply with
the arbitrators' decision and order (including in the event the
arbitrators order specific performance, correcting any action taken
during such proceeding inconsistent with the arbitrator's decision).
Any payment of damages ordered by the arbitrators shall bear interest
at the Interest Rate from the date as of which such damages are
calculated to the date on which the party entitled thereto receives
payment thereof in full.
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
16.7 PERFORMANCE DURING ARBITRATION PROCEEDINGS. During the pendency of
arbitration under this Article, (a) Buyer and Seller shall continue to
perform their respective obligations hereunder, without setoff during
the pendency of such arbitration of any amount so disputed, and (b)
neither Buyer nor Seller shall exercise any other remedies hereunder
arising by virtue of the matters in dispute.
ARTICLE 17
CREDIT AND COLLATERAL REQUIREMENTS
17.1 FINANCIAL INFORMATION. If requested by a Party, the other Party shall
deliver (i) within one hundred and twenty (120) days following the end
of each fiscal year, a copy of such Party's or such Party's parent
company's annual report containing audited consolidated financial
statements for such fiscal year and (ii) within sixty (60) days after
the end of each of its first three fiscal quarters of each fiscal year,
a copy of such Party's quarterly report containing unaudited
consolidated financial statements for such fiscal quarter. In all cases
the statements shall be for the most recent accounting period and
prepared in accordance with generally accepted accounting principles or
such other principles then in effect, provided, however, that should
any such statements not be available timely due to a delay in
preparation or certification, such delay shall not be an event of
default so long as such Party diligently pursues the preparation,
certification and delivery of the statements.
17.2 CREDIT ASSURANCES. If a Party ("Requesting Party") has commercially
reasonable grounds to believe that the other Party's creditworthiness
or performance under this Agreement has become unsatisfactory, the
Requesting Party will provide the other Party with written notice
requesting collateral in the form of cash, letter of credit or other
security acceptable to Requesting Party in an amount reasonably
determined by the Requesting Party. Upon receipt of such notice the
other Party shall have three (3) Business Days to remedy the situation
by providing such collateral to the Requesting Party as reasonably
determined by the Requesting Party. In the event that the other Party
fails to provide such collateral or guarantee or other credit assurance
acceptable to the Requesting Party within three (3) Business Days of
receipt of notice, then the Requesting Party may suspend receipts or
deliveries hereunder.
17.3 GRANT OF SECURITY INTEREST AND REMEDIES. To secure its obligations
under this Agreement and to the extent either or both Parties deliver
collateral hereunder, each Party hereby grants to the other Party a
present and continuing security interest in and lien on (and right of
setoff against), and assignment of all cash collateral and cash
equivalent collateral and any and all proceeds resulting therefrom or
the liquidation thereof, whether now or hereafter held by, on behalf
of, or for the benefit of, such other Party, and each Party agrees to
take such action as the other Party reasonably requires in order to
perfect the other Party's first priority security interest in, and lien
on (and right of setoff against), such collateral and any and all
proceeds resulting therefrom or from the liquidation thereof. Upon or
any time after the occurrence or deemed occurrence and during the
continuation of an event of default or an Early Termination Date, the
Non-Defaulting Party may do any one or more of the following: (i)
exercise any of such rights and remedies of a secured party with
respect to all collateral, including any such rights and remedies under
law then in effect; (ii) exercise its rights of setoff against any and
all property of the Defaulting Party in the possession of the
Non-Defaulting Party or its agent; (iii) draw on any outstanding letter
of credit issued for its benefit; and (iv) liquidate all collateral
then held by or for the benefit of the secured Party (free from any
claim or right of any nature whatsoever of the Defaulting Party,
including any equity or right of purchase or redemption by the
Defaulting Party).
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
ARTICLE 18
MISCELLANEOUS
18.1 REPRESENTATIONS AND WARRANTIES. As of the date and year first written
above, each Party represents and warrants to the other Party that:
(a) it is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its formation;
(b) it has all regulatory authorizations necessary for it to
legally perform its obligations under this Agreement;
(c) the execution, delivery and performance of this Agreement are
within its powers, have been duly authorized by all necessary
action and do not violate any of the terms and conditions in
its governing documents, any contracts to which it is a party
or any law, rule, regulation order or the like applicable to
it;
(d) this Agreement and other documents executed and delivered in
accordance with this Agreement constitute its legally valid and
binding obligations enforceable against it in accordance with
their terms.
18.2 GOVERNING LAW. This Agreement and the rights and duties of the Parties
hereunder shall be governed by and construed, enforced and performed in
accordance with the laws of the State of Ohio, without regard to
principles of conflicts of law.
18.3 NOTICES. Any notice, request, demand, statement or payment provided for
in this Agreement shall be confirmed in writing, unless otherwise
noted, and shall be made as specified below; provided, however, that
notices of interruption and communications to Transmitting Utilities
may be provided verbally, effective immediately and, upon request,
confirmed in writing. A notice sent by facsimile transmission shall be
deemed received by the close of the Business Day on which such notice
was transmitted or such earlier time as is confirmed by the receiving
Party unless it confirms a prior verbal communication in which case any
such notice shall be deemed received on the day sent.
Party: AE Supply Company, LLC
Account Name: AE Supply Company
Bank: PNC Bank
ABA #: 000000000
Account #: 1008969371
Invoices:
AE Supply Company LLC
0000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000-0000
ATTN: Xxxxxxx Xxxxxx
Party: Allegheny Power
Account Name: Monongahela Power Company
Bank: Mellon Bank
ABA#: 000000000
Account#: 19107
Invoices:
Monongahela Power Company
000 Xxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
ATTN: Xxxxxxxx Xxxxxx
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
Or to such other address as Buyer or Seller shall from time to time
designate by letter properly addressed.
18.4 ENTIRETY. This Agreement constitutes the entire agreement between the
Parties hereto. There are no prior or contemporaneous agreements or
representations affecting the same subject matter other than those
herein expressed. Except for those matters which, in accordance with
this Agreement, may be resolved by the Parties and documented
electronically, it is further agreed that no amendment, modification or
change herein shall be enforceable, except as specifically provided for
in this Agreement, unless produced in writing and executed by both
Parties.
18.5 NON-WAIVER. No waiver by either party hereto of any one or more
defaults by the other in the performance of any of the provisions of
this Agreement shall be construed as a waiver of any other default or
defaults whether of a like kind or different nature.
18.6 SEVERABILITY. Except as otherwise stated herein, any provision, article
or section declared or rendered unlawful by a court of law or
regulatory agency with jurisdiction over the Parties, or deemed
unlawful because of statutory change, will not otherwise affect the
lawful obligations that arise under this Agreement.
18.7 HEADINGS. The headings used for the Articles herein are for convenience
and reference purposes only and shall in no way affect the meaning or
interpretation of the provisions of this Agreement.
18.8 CONFIDENTIALITY. Neither Party shall disclose the terms or conditions
of this Agreement to a third party (other than the Party's employees,
lenders, counsel, accountants, or advisors who have a need to know such
information and have agreed to keep such terms confidential) except in
order to comply with any applicable law or regulation, or any exchange,
Control Area or other regional or sub-regional requirements.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in duplicate
originals effective as of the day and year first written above.
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
Allegheny Energy Supply Company, LLC
Electric Rate Schedule FERC No. 10
MONONGAHELA POWER COMPANY ALLEGHENY ENERGY SUPPLY COMPANY, LLC
D/B/A ALLEGHENY POWER
By: /s/ Xxx Xxxxxxxx By: /s/ Xxxxx X. Xxxxxx
-------------------------------- --------------------------------
Name: Xxx Xxxxxxxx Name: Xxxxx X. Xxxxxx
-------------------------------- --------------------------------
Title: Vice President Title: Vice President
-------------------------------- --------------------------------
Date: Date:
-------------------------------- --------------------------------
Issued by: Xxxxx X. Xxxxxx, Vice President Effective: June 1, 2001
Issued on: June 29, 2001
