Exhibit B
DRAFT
9/18/95
RECIPROCAL SUPPORT AGREEMENT AMONG
NORTHEAST NUCLEAR ENERGY COMPANY,
NORTH ATLANTIC ENERGY SERVICE CORPORATION,
CONNECTICUT YANKEE ATOMIC POWER COMPANY,
YANKEE ATOMIC ELECTRIC COMPANY AND
NORTHEAST UTILITIES SERVICE COMPANY
This Reciprocal Support Agreement is made as of _________,
1995, by and among Northeast Nuclear Energy Company ("NNECO"), a
Connecticut corporation, North Atlantic Energy Service
Corporation ("NAESCO"), a New Hampshire corporation, Connecticut
Yankee Atomic Power Company ("CYAPC"), a Connecticut corporation,
Yankee Atomic Electric Company ("YAEC"), a Massachusetts
corporation, acting by and through its Nuclear Services Division
("NSD"), and Northeast Utilities Service Company ("NUSCO"), a
Connecticut corporation.
WHEREAS, NNECO is a wholly owned service company subsidiary
of Northeast Utilities ("NU") that operates and manages Millstone
Units 1, 2, and 3 (individually a "Millstone Unit" and
collectively the "Millstone Units"); and
WHEREAS, NAESCO is a wholly owned service company subsidiary
of NU that operates and manages Seabrook Station (Seabrook); and
WHEREAS, CYAPC is an electric utility affiliate of NU and
New England Electric System ("XXXX") that owns and operates the
Connecticut Yankee Atomic Power Plant ("Connecticut Yankee"); and
WHEREAS, YAEC is an electric utility affiliate of NU and
XXXX that owns the Yankee Nuclear Power Station ("Yankee Nuclear
Power Station") and, acting through NSD, provides technical
services to Yankee Nuclear Power Station and other nuclear
facilities (each of the Millstone Units, Seabrook, Connecticut
Yankee and Yankee Nuclear Power Station being referred to herein
as a "Nuclear Plant" and collectively as the "Nuclear Plants");
and
WHEREAS, NUSCO is a wholly owned service company subsidiary
of NU that provides legal, accounting and other administrative
services to companies in the NU system; and
WHEREAS, NNECO, NAESCO, CYAPC AND YAEC (each an "Operator"
and collectively the "Operators") each has employees with
specialized knowledge and expertise regarding nuclear plant
procurement, engineering, licensing, construction, operations,
maintenance, decommissioning, design, inspection, testing,
planning and other relevant and related skills that they wish to
make available to each other in a mutually cooperative fashion;
and
WHEREAS, each of the Operators has certain equipment, tools,
and components that are used in connection with plant operation
or maintenance (excluding specifically equipment, spare parts and
consumables held in inventory) (collectively "Equipment"), on
hand for use in its Nuclear Plant that may be required by another
Operator from time to time in the course of operating and
maintaining its Nuclear Plant, and the Operators are willing to
make Equipment available to each other in a mutually cooperative
fashion to meet their respective needs; and
WHEREAS, increased economies and efficiencies and improved
plant reliability will result from the sharing of expertise,
technical resources, personnel and Equipment by and among the
Operators;
NOW THEREFORE, in consideration of the mutual promises
contained herein and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the
Operators and NUSCO (each a "party" and collectively the
"Parties") agree as follows:
ARTICLE I - SERVICES AND EQUIPMENT
Section 1.1 - Any Operator may request another Operator to
make available, on a temporary basis, specified personnel, or
personnel having specified expertise, to assist the requesting
Operator in any aspect of the requesting Operator's procurement,
engineering, licensing, construction, operation, maintenance,
decommissioning, design, inspection, testing or planning
activities or other relevant and related skills (collectively
"Operator Services"). Additionally, any Operator may request
another Operator to furnish, for temporary use and not for
permanent transfer or installation, a specified article, kind, or
quality of Equipment to meet the requesting Operator's needs. It
is not intended that this Agreement be used as a vehicle for the
permanent acquisition or use of Equipment by any Nuclear Plant.
Prior to making a request for Operator Services or Equipment, an
Operator shall give appropriate consideration to whether it would
be more advantageous to obtain such services or equipment from a
third party vendor (instead of from another Operator) in light of
relevant factors, such as cost, delivery schedule, design,
quality, warranty protection and assurance of supply.
Section 1.2 - Any Operator receiving a request for Operator
Services or Equipment shall make reasonable efforts to
accommodate such request, subject to the receiving Operator's own
needs and requirements and the availability of appropriate
personnel or Equipment, as the case may be. No Operator shall be
required to comply with a request for Operator Services or
Equipment, but each Operator shall cooperate in good faith with
the other Operators to maximize the potential benefits of this
Agreement to all Operators by making requested personnel
available on a temporary basis or providing available Equipment
on a temporary basis when it is reasonably possible to do so.
All Operator Services and Equipment will be furnished on a
mutually agreeable schedule pursuant to a master purchase order
or service request issued by the Operator requesting the Operator
Services or Equipment that refers to this Agreement and
incorporates its terms by reference. A copy of such master
purchase order or service request shall be sent to NUSCO at the
time Operator Services are requested. Any Equipment that is
furnished in a decontaminated condition shall be returned to the
furnishing Operator in the same condition. Any Equipment that is
furnished in a contaminated condition may be returned to the
furnishing Operator in the same condition.
Section 1.3 - Personnel of an Operator who are made
available to another Operator to provide Operator Services shall
at all times remain the employees of the Operator who makes them
available and shall not become employees of the requesting
Operator, but such personnel shall be subject to the supervision
and control of the requesting Operator while Operator Services
are being provided at the requesting Operator's Nuclear Plant.
Except as explicitly provided in this Agreement, no Operator who
receives Operator Services shall become responsible for any
wages, salary, benefits, expenses or other costs associated with
the personnel providing such Operator Services, all of which
shall remain the responsibility of the Operator who is furnishing
such Operator Services.
ARTICLE II - PAYMENT FOR SERVICES
Section 2.1 - Any Operator that furnishes Operator Services
or Equipment to another Operator shall provide a report to NUSCO
or through the Northeast Utilities financial system (currently
the "Management Information and Budgeting System") (with a copy
to the Operator who received the Operator Services or the
Equipment) no later than the twentieth (20th) day after the end
of each calendar month in which Operator Services or Equipment
are provided containing a statement of cost reflecting the
following factors or information for such calendar month: (A) in
the case of Operator Services, (1) the name and cost control
center of each employee who furnished Operator Services; (2) a
description of the Operator Services furnished by each employee;
(3) the direct labor costs for the period; and (4) a statement of
any out-of-pocket costs reasonably incurred at each cost control
center; and (B) in the case of Equipment, (1) a description of
the Equipment furnished; (2) the operating cost of such
equipment; and (3) the cost of any shipping, handling, insurance,
storage or other operating costs associated with its delivery to
the requesting Operator.
Section 2.2 - Within ten (10) days after receipt of such
report, the Operator who received such Operator Services or
Equipment will be invoiced by the furnishing Operator or through
the Northeast Utilities financial system for all direct costs
reflected in such report (including, but not limited to, wages,
salaries and out-of-pocket costs in the case of Operator
Services, and operating costs, plus the cost of shipping,
handling, insurance and other costs in the case of Equipment),
which will be payable directly to the Operator who furnished the
Operator Services or Equipment within 30 days after receipt of
such invoice. NUSCO may take such actions as it deems
appropriate to verify the information contained in any cost
report or invoice furnished hereunder.
Section 2.3 - All amounts invoiced for Operator Services or
Equipment provided under this Agreement shall be billed "at
cost", as defined in the Public Utility Holding Company Act of
1935 (the "Act") and the rules and regulations promulgated
thereunder. The indirect and overhead costs associated with
Operator Services (including without limitation costs of capital)
shall be calculated and allocated on a reasonable and equitable
basis in accordance with the requirements of the Act, and shall
be invoiced periodically by the Operator furnishing such Operator
Services or Equipment, by NUSCO or through the Northeast
Utilities financial system to each Operator who received Operator
Services hereunder, but in no event later than January 31 of each
calendar year for the preceding calendar year. All such invoices
shall be payable in the amounts and to the Operators specified
therein within thirty (30) days after receipt.
Section 2.4 - It is the intention of the Parties that
NUSCO's role under this Agreement shall be limited to the
billing, accounting and facilitating activities specifically
described herein ("NUSCO Services"), and NUSCO shall not provide
any other services, unless NUSCO is requested to provide Operator
Services by another Operator. Furthermore, to the extent
possible, all NUSCO Services shall be accomplished automatically
through the NU financial system. All NUSCO Services provided
hereunder and not otherwise provided under any other agreement
shall be billed "at cost" to the Operators who receive Operator
Services or Equipment hereunder during each calendar year.
Direct charges will be made for NUSCO Services where a direct
assignment of cost is possible. Charges for NUSCO Services not
directly assignable (including without limitation costs of
capital) shall be calculated and allocated on a periodic basis
(but no less frequently than annually) by NUSCO on a reasonable
and equitable basis in accordance with the requirements of the
Act. NUSCO shall allocate costs for NUSCO Services not directly
assignable among the Operators in proportion to the direct
charges made for NUSCO Services received by each Operator during
the relevant period. Each Operator that received Operator
Services or Equipment during a calendar year shall be invoiced
for the cost of NUSCO Services no later than January 31 of the
following year, and all such invoices shall be payable within
thirty (30) days after receipt.
Section 2.5 - In order to permit each of the Operators to
make informed decisions about possible requests for Operator
Services and Equipment hereunder, on or before November 1 of each
calendar year (or in the case of the calendar year in which this
Agreement becomes effective, within thirty (30) days after the
effective date of this Agreement), each Operator and NUSCO shall
provide a written notice to each other Operator and to NUSCO of
the categories of expense that will be included in indirect and
overhead costs for the next calendar year (or for the remainder
of the calendar year in the case of the calendar year in which
this Agreement becomes effective) identified by cost control
center or other appropriate means. Xxxxxxxx for indirect and
overhead costs during the next calendar year (or for the
remainder of the calendar year in the case of the calendar year
in which this Agreement becomes effective) shall be made in a
manner consistent with such notices. Xxxxxxxx for indirect and
overhead costs may be based upon reasonable estimates, subject to
true-up no later than March 1 of the following calendar year.
Section 2.6 - Each of the Operators and NUSCO shall keep
complete and accurate accounts of all receipts and expenditures
hereunder in respect of Operator Services, NUSCO Services
(collectively with Operator Services, the "Services") and
Equipment in accordance with the regulations of the Securities
and Exchange Commission ("SEC") and the Uniform System of
Accounts prescribed for Public Utilities and Licensees subject to
the provisions of the Federal Power Act, as amended from time to
time.
Section 2.7 - All sales, use, excise, gross receipts,
franchise or other similar taxes which may be applicable to the
Services or Equipment provided by any Party to another Party
shall be borne by the recipient of such Services or Equipment.
In no event shall any Party be responsible for any federal, state
or local income tax of any other Party incurred with respect to
Services or Equipment.
Section 2.8 - Any joint owner, participant or shareholder in
a Unit that has received Operator Services or Equipment may, at
its expense, perform or cause to be performed an audit of the
accounts and records of the furnishing Operator and/or NUSCO
relating solely to the performance of such Operator's or NUSCO's
obligations under this Agreement at such Operator's or NUSCO's
offices, at reasonable times, by an independent public accountant
or other representative; provided that any such audit shall not
include the right to examine any accounts or records of such
Operator or NUSCO which are not related to such Operator's or
NUSCO's xxxxxxxx to such Nuclear Plant under this Agreement.
ARTICLE III - STANDARD OF PERFORMANCE
Section 3.1 - Each Operator and NUSCO shall, at all times
during the term of this Agreement perform Services and furnish
Equipment in accordance with the standard of "Prudent Utility
Practice." As used herein, the term "Prudent Utility Practice"
shall, at a particular time, mean any of the practices, methods
or acts which, in the exercise of reasonable judgment in the
light of the facts known to an Operator or NUSCO at the time the
decision was made, could have been expected to accomplish the
desired result at a reasonable cost and consistent with federal
and state legal, licensing and regulatory requirements,
environmental considerations, reliability, safety and expedition
and taking into account the interests of all affected Parties.
In determining whether any practice, method or act is in
accordance with Prudent Utility Practice, due consideration shall
be given to the fact that the design and other aspects of the
operation of nuclear electric generating units involve the
application of advancing technology and are subject to changing
regulatory and environmental limitations. Prudent Utility
Practice is not intended to be limited to the optimum practice,
method or act to the exclusion of all others but rather to
encompass a spectrum of possible practices, methods of acts,
including those involving the use of new concepts or technology.
Section 3.2 - ALL OPERATOR SERVICES AND EQUIPMENT FURNISHED
HEREUNDER SHALL BE FURNISHED "AS IS, WHERE IS" WITHOUT
REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO QUALITY,
MERCHANTABILITY, FITNESS FOR INTENDED PURPOSE, ABSENCE OF
DEFECTS, OR OTHERWISE. Any Operator providing Equipment to
another Operator shall assign to the receiving Operator any
manufacturer's, vendor's or supplier's warranty that is
assignable and assist the receiving Operator in the enforcement
of such warranty.
ARTICLE IV - EFFECTIVE DATE, TERM AND MODIFICATIONS
Section 4.1 - The term of this Agreement shall commence as
of the date hereof, and, unless earlier terminated in accordance
with the provisions of this Article, shall continue in effect
until the last to expire of the NRC operating licenses for the
Nuclear Plants. Any Party to this Agreement may terminate its
participation hereunder, with or without cause, upon written
notice given not less than ninety (90) days prior to the
effective date of such termination.
Section 4.2 - This Agreement shall also be subject to
termination and shall terminate, without any action by any Party,
to the extent and from the time that performance may conflict
with the Act or with any rule, regulation or order of the SEC
adopted before or after the making hereof. Notwithstanding the
foregoing, the Parties will use reasonable efforts to negotiate
any amendments to this Agreement which are necessary for this
Agreement to comply with the Act or any rule, regulation or order
thereunder.
Section 4.3 - Modifications to the terms of this Agreement
may be made at any time only by written agreement among the
Parties.
ARTICLE V - LIMITATION OF LIABILITY AND SET-OFF
Section 5.1 - Notwithstanding any provision of this
Agreement to the contrary, for and in consideration of the fact
that each of the Parties is undertaking its responsibility for
the Services or Equipment provided hereunder without compensation
or charge other than recovery of its costs for those Services or
Equipment, no Party, nor any shareholder or joint owner on its
behalf, shall be entitled to recover from any other Party, or the
directors, trustees, officers, employees, agents or affiliates of
such other Party (or the directors, trustees, officers, employees
or agents of such affiliates) (collectively, the "Protected
Parties") any damages resulting from the performance or non-
performance of its responsibilities hereunder or for any damage
to any Nuclear Plant, any curtailment of power, or any other
damages of any kind, including direct, incidental, consequential,
special, indirect or punitive damages, whether occurring during
the course of the provision of Services or Equipment hereunder or
otherwise or arising out of the performance or non-performance of
this Agreement, unless such damages shall have resulted directly
from the willful misconduct of such other Party, or, to the
extent legally attributable to such Party, directly from the
willful misconduct of a Protected Party.
Section 5.2 - Notwithstanding any provision of this
Agreement to the contrary, all provisions of this Agreement
providing for limitation of, or protection against, liability
shall apply to the full extent permitted by law, regardless of
fault, and shall survive either termination pursuant to this
Agreement or expiration.
ARTICLE VI - ASSIGNMENT AND THIRD PARTY BENEFICIARIES
Section 6.1 - This Agreement shall be binding upon and inure
to the benefit of each of the Parties and their successors and
permitted assigns. None of the Parties shall assign its rights
or obligations hereunder without the prior written consent of the
other Parties, and any attempted assignment in violation of this
provision shall be null and void.
Section 6.2 - The provisions of this Agreement are solely
for the benefit of the Parties and are not intended to benefit or
create rights in any third parties, except for the benefits
accruing to Protected Parties under Section 5.1.
ARTICLE VII - MISCELLANEOUS
Section 7.1 - This Agreement shall be governed by and
construed in accordance with the laws of the State of Connecticut
regardless of any conflicts of laws provision to the contrary.
Section 7.2 - EXCEPT AS SET FORTH IN SECTION 3.1, NO
WARRANTIES OF ANY KIND, WHETHER STATUTORY, EXPRESS, WRITTEN, ORAL
OR IMPLIED (INCLUDING, WITHOUT LIMITATION, WARRANTIES OF
QUALITY, ABSENCE OF DEFECTS, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE) SHALL APPLY TO THE SERVICES OR EQUIPMENT
FURNISHED HEREUNDER. The foregoing shall not be deemed to affect
in any manner any warranties provided by manufacturers, vendors
or suppliers.
Section 7.3 - This Agreement constitutes the entire
agreement of the Parties with respect to the furnishing of
Services or Equipment hereunder.
Section 7.4 - This Agreement shall be subject to the
approval of any federal or state regulatory body whose approval
is a legal prerequisite to its execution, delivery, and
performance.
Section 7.5 - Notices and other communications required or
permitted to be given or made under this Agreement shall be in
writing, and shall be deemed to have been duly made or given when
delivered personally or when made or given by telex, telegraph or
telecopier, or certified or first class mail, prepaid, at the
address shown for each Party in Exhibit A hereto, or at such
other address as a Party may from time to time designate by a
written notice that complies with this Section 7.5.
Section 7.6 - In the event that any clause or provision of
this Agreement, or any part thereof, shall be declared invalid or
unenforceable by any regulatory body or court having
jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remaining portions
of this Agreement.
Section 7.7 - Any number of counterparts of this Agreement
may be executed and each shall have the same force and effect as
the original.
Section 7.8 - Nothing contained herein shall evidence any
intent to effect a change in control of any of the Nuclear Plants
operated by the Parties.
Section 7.9 - Nothing contained herein shall be deemed to
abrogate, modify or amend the provision of any existing agreement
by or among any of the Parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, by their respective officers
thereunto duly authorized, all as of the day and year first above
written.
NORTHEAST NUCLEAR ENERGY
COMPANY
By_________________________
Name:
Title:
NORTH ATLANTIC ENERGY
SERVICE CORPORATION
By_________________________
Name:
Title:
CONNECTICUT YANKEE ATOMIC
POWER COMPANY
By_________________________
Name:
Title:
YANKEE ATOMIC ELECTRIC
COMPANY
By_________________________
Name:
Title:
NORTHEAST UTILITIES SERVICE
COMPANY
By_________________________
Name:
Title:
EXHIBIT A
Northeast Nuclear Energy Company
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
Attention:
With a copy to:
North Atlantic Energy Service Corporation
X.X. Xxx 000
Xxxxxxxx, XX 00000
Attention:
With a copy to:
Connecticut Yankee Atomic Power Company
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
Attention:
With a copy to:
Yankee Atomic Electric Company
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention:
With a copy to:
Northeast Utilities Service Company
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
Attention:
With a copy to:
