ELECTRIC POWER SUPPLY AGREEMENT Between The Cleveland Electric Illuminating Company, Ohio Edison Company, Pennsylvania Power Company, The Toledo Edison Company, Sellers And FirstEnergy Services Corp. , Buyer
Exhibit 10-9
FirstEnergy
Operating Companies
FERC Electric
Tariff, Original Volume No.2
Service Agreement
No.73
[Execution
Copy]
Between The
Cleveland Electric Illuminating Company, Ohio Edison
Company,
Pennsylvania Power Company, The Toledo Edison
Company,
Sellers
And
FirstEnergy
Services Corp. , Buyer
This
Electric Power Supply Agreement ("Agreement") effective as
ofJanuary 1, 2001, is made by and between The Cleveland Electric Illuminating
Company, Ohio Edison Company, Pennsylvania Power Company, The Toledo Edison
Company ("the FirstEnergy Operating Companies" or "Seller"), and FirstEnergy
Services Corp. ("Services" or "Buyer"). The FirstEnergy Operating Companies and
Services may be identified collectively as "Parties" or individually as a
"Party." This Agreement is entered into in connection with the transfer of
operating control and ultimately ownership of the FirstEnergy Operating
Companies' generation assets to Services pursuant to Ohio electric restructuring
legislation and FirstEnergy's transition plan approved by the Ohio Public
Utilities Commission in Case No. 99-1212-EL-ETP, et at.
(hereinafter, "Ohio
Transition Plan").
WHEREAS,
the FirstEnergy
Operating Companies are in the process of restructuring their operations in
accordance with the Ohio Transition Plan by selling all of the output of their
nuclear generating facilities and the output of CEI and TE' s leasehold interest
in the Mansfield generating facilities (collectively "the Generating
Facilities") to Services; and
WHEREAS,
it is not feasible
for Seller to transfer ownership or control of its nuclear generating
facilities, or to sublease CEI and TE's leasehold interest in the Mansfield
generating facilities, at the current time; and
WHEREAS,
Buyer desires to
obtain the entire electric output of the Seller's Generating Facilities pursuant
to the rates, terms and conditions set forth herein.
It is agreed as
follows:
I. |
TERM |
The sale and
purchase of electric power pursuant to this Agreement shall begin on January
1,2001, or such later effective date authorized by the Federal Energy Regulatory
Commission, and shall remain in effect until December 31, 2005, or such earlier
date as terminated by either Party upon at least sixty days written notice to
the other Party.
II. |
SALE
AND PURCHASE OF CAPACITY AND
ENERGY |
A. |
Seller shall
make available or cause to be made available to Buyer all of the electric
Capacity and Energy that is available from its Generating Facilities and
Buyer shall purchase and pay for such Capacity and Energy in accordance
with the terms of this Agreement. Seller shall make such firm Capacity and
Energy available at the Delivery Points. Buyer shall arrange and will be
responsible for all transmission service at and from the Delivery Points.
Seller will also provide all Real Power Losses required by Buyer at and
from the Delivery Points. The Capacity, Energy, and Real Power Losses
supplied by Seller are collectively referred to as Buyer's "Power Supply
Requirements". Electric Capacity and Energy supplied shall be sixty-hertz,
three phase alternating current. The Power Supply Requirements will be
provided in accordance with Good Utility Practice, and where applicable,
the provisions of American Transmission Systems, Incorporated's Open
Access Transmission Tariff (OATT). |
III. |
SCHEDULING
AND SYSTEM PLANNING |
A. |
In order for
Services to be able to plan adequately to market and sell all of the
Capacity and Energy available from Seller, Seller shall notify Services on
or before November 1 of each year during the term of this Agreement of the
amount of Capacity and Energy it expects to have available in each month
of the next calendar year. |
B. |
On or before
April 1, Seller shall update its initial annual forecast of available
Capacity and Energy for any full month(s) remaining in the calendar
year. |
IV. |
PRICE |
Seller shall
charge, and Buyer shall pay, for Buyer's Power Supply Requirements, as
follows:
A. |
Capacity
Charges |
Buyer will pay
Seller one twelfth of the Capacity charge set forth in Exhibit A for each kW of
installed generation as identified in Exhibit C.
B. |
Energy
Charges |
In
addition to the Capacity charges specified above, Buyer shall pay Seller the
Energy charge per MWh set forth in Exhibit A for all Energy supplied by Seller
to Buyer. The Energy supplied by Seller includes Real Power Losses. Buyer shall
provide Seller aggregated metered sales in sufficient detail for Seller to
determine after the fact, the quantity of Energy supplied to Buyer during a
billing period. Buyer and Seller will abide by all applicable Code of Conduct
provisions in exchanging this data, and such data will be considered
Confidential Information under Section 7.3 of this Agreement.
2
C. |
Other
Charges |
1. |
Taxes.
If a revenue
or per MWH tax is imposed on Capacity or Energy sold under this Agreement,
the Buyer will reimbursed the Seller for such
taxes. |
D. |
Unless
otherwise specifically agreed upon by the Parties, the calendar month
shall be the standard period for all payments under this Agreement. As
soon as practicable after the end of each month, the Seller will render an
invoice to Buyer for the amounts due for Power Supply Requirements for the
preceding month. Payment shall be due and payable within ten days of
receipt of the invoice or, if such day is not a Business Day, then on the
next Business Day. Buyer will make payments by electronic funds transfer,
or by other mutually agreeable method(s) to the account designated by
Seller. Any amounts not paid by the due date will be deemed delinquent and
will accrue interest at the Interest Rate until the date of payment in
full. |
E. |
Each Party
shall keep complete and accurate records of its operations under this
Agreement and shall maintain such data as may be necessary to determine
the reasonableness and accuracy of all relevant data, estimates, or
invoices submitted by or to it hereunder. All records regarding this
Agreement shall be maintained for a period of two years from the date of
the invoice or payment, or such longer period as may be required by
law. |
F. |
Buyer shall
have the right, at its own expense and during normal business hours, to
audit the accounts and records of Seller that reasonably relate to the
provision of service under this Agreement. If the audit reveals an
inaccuracy in an invoice, the necessary adjustment in such invoice and the
payments therefor will be promptly made. No adjustment will be made for
any invoice or payment made more than two years from rendition thereof.
This provision shall survive the termination of this Agreement for a
period of two years from the date of termination for the purpose of such
invoice and payment objections. To the extent that audited information
includes Confidential Information, the Buyer shall keep all such
information confidential under Section 7.3. |
G. |
Nothing
contained herein shall be construed as affecting in any way the right of
the Party furnishing service under this Agreement to unilaterally make
application to the Federal Energy Regulatory Commission for a change in
rates under Section 205 of the Federal Power Act and pursuant to the
Commission's Rules and Regulations
thereunder. |
V. |
Metering |
Generation metering
shall be installed, operated and maintained in accordance with the applicable
interconnection agreement between the FirstEnergy Operating Companies and ATSI.
Metering between control areas shall be handled in accordance with the
applicable Open Access Transmission Tariff. Retail metering shall be provided in
accordance with applicable state law. Nothing in this Agreement requires Seller
or Buyer to install new metering facilities.
VI. |
Notices |
All notices,
requests, statements or payments shall be made as specified below. Notices
required to be in writing shall be delivered by letter, facsimile or other
documentary form. Notice by facsimile or hand delivery shall be deemed to have
been received by the close of the Business Day on which it was transmitted or
hand delivered (unless transmitted or hand delivered after close in which case
it shall be deemed received at the close of the next Business Day). Notice by
overnight mail or courier shall be deemed to have been received two Business
Days after it was sent. A Party may change its addresses by providing notice of
same in accordance herewith.
3
NOTICES &
CORRESPONDENCE:
To
Seller: FirstEnergy
Operating Companies
President
00 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000 |
To
Buyer: FirstEnergy
Services Corp.
Manager,
Wholesale Energy
000 Xxxxx
Xxxx
Xxxxx, Xxxx
00000 |
INVOICES &
PAYMENTS:
To
Seller: FirstEnergy
Operating Companies
President
00 Xxxxx Xxxx
Xxxxxx
Xxxxx, Xxxx 00000 |
To
Buyer: FirstEnergy
Services Corp.
Manager,
Wholesale Energy
000
Xxxxx Xxxx
Xxxxx, Xxxx
00000 |
SCHEDULING:
To
Seller: FirstEnergy
Operating Companies
President
00 Xxxxx Xxxx
Xxxxxx
Xxxxx, Xxxx 00000 |
To
Buyer: FirstEnergy
Services Corp.
Manager, Wholesale Energy
000
Xxxxx Xxxx
Xxxxx, Xxxx 00000 |
VII. |
MISCELLANEOUS |
7.1 |
Performance
Excused |
If either Party is
rendered unable by an event of Force Majeure to carry out, in whole or part, its
obligations hereunder, then, during the tendency of such Force Majeure but for
no longer period, the Party affected by the event (other than the obligation to
make payments then due or becoming due with respect to performance which
occurred prior to the event) shall be relieved of its obligations insofar as
they are affected by Force Majeure. The Party affected by an event of Force
Majeure shall provide the other Party with written notice setting forth the full
details thereof as soon as practicable after the occurrence of such event and
shall take all reasonable measures to mitigate or minimize the effects of such
event of Force Majeure; provided, however, that this provision shall not require
Seller to deliver, or Buyer to receive, Power at Delivery Points other than
those Delivery Points designated under this Agreement.
Force Majeure shall
be defined as any cause beyond the reasonable control of, and not the result of
negligence or the lack of diligence of, the Party claiming Force Majeure or its
contractors or suppliers. It includes, without limitation, earthquake, storm,
lightning, flood, backwater caused by flood, fire, explosion, act of the public
enemy, epidemic, accident, failure of facilities, equipment or fuel supply, acts
of God, war, riot, civil disturbances, strike, labor disturbances, labor or
material shortage, national emergency, restraint by court order or other public
authority or governmental agency, interruption of synchronous operation, or
other similar or dissimilar causes beyond the control of the Party affected,
which causes such Party could not have avoided by exercising good electric
operating practice. Nothing contained herein shall be construed to require a
Party to settle any strike, lockout, work stoppage, or other industrial
disturbance or dispute in which it may be involved or to take an appeal from any
judicial, regulatory or administrative action.
4
7.2.
Transfer of
Title and Indemnification
Title and risk of
loss related to the Power Supply Requirements shall transfer to the Buyer at the
Delivery Points. Seller warrants that it will deliver the Power Supply
Requirements to Buyer free and clear of all liens, security interests, claims
and encumbrances or any interest therein or thereto by any person arising prior
to the Delivery Points. Each Party shall indemnify, defend an hold harmless the
other Party from and against any claims arising from or out of any event,
circumstance, act or incident first occurring or existing during the period when
control and title to the Power Supply Requirements is vested in the other
Party.
7.3
Confidentiality
Neither Party shall
disclose to third parties Confidential Information obtained from the other Party
pursuant to this Agreement except in order to comply with any applicable law,
regulation, or any exchange, control area, or independent system operator rule,
or in connection with any court or regulatory proceeding. Provided, however,
that each Party shall to the extent practicable use reasonable efforts to
prevent or limit the disclosure required to third parties.
7.4
Further
Assurances
Subject to the
terms and conditions of this Agreement, each of the Parties hereto will use
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and effective the transactions contemplated
hereby.
7.5
Amendment
This Agreement may
be amended only by a written agreement signed by the Parties.
7.6 Assignment
Unless mutually
agreed to by the Parties, no assignment, pledge, or transfer of this Agreement
shall be made by any Party without the prior written consent of the other Party,
which shall not be unreasonably withheld, provided, however, that no prior
written consent shall be required for (i) the assignment, pledge or other
transfer to another company or affiliate in the same holding company system as
the assignor, pledgor or transferor, or (ii) the transfer, incident to a merger
or consolidation with, or transfer of all (or substantially all) of the assets
of the transferor, to another person or business entity; provided, however, that
such assignee, pledgee, transferee or acquirer of such assets or the person with
which it merges or into which it consolidates assumes in writing all of the
obligations of such Party hereunder and provided, further, that either Party
may, without the consent of the other Party (and without relieving itself from
liability hereunder), transfer, sell, pledge, encumber or assign such Party's
rights to the accounts, revenues or proceeds hereof in connection with any
financing or other financial arrangements.
5
7.7
Governing
Law
The interpretation
and performance of this Agreement shall be according to and controlled by the
laws of the State of Ohio regardless of the laws that might otherwise govern
under applicable principles of conflicts of laws.
7.8
Counterparts
This Agreement may
be executed in two or more counterparts and each such counterpart shall
constitute one and the same instrument.
7.9 Waiver
No waiver by a
Party of any default by the other Party shall be construed as a waiver of any
other default. Any waiver shall be effective only for the particular event for
which it is issued and shall not be deemed a waiver with respect to any
subsequent performance, default or matter.
7.10 No
Third Party Beneficiaries
This Agreement
shall not impart any rights enforceable by any third party (other than a
permitted successor or assignee bound to this Agreement).
7.11
Severability
Any provision
declared or rendered unlawful by any applicable court of law or regulatory
agency or deemed unlawful because of a statutory change will not otherwise
affect the remaining lawful obligations that arise under this
Agreement.
7.12
Construction
The term
"including" when used in this Agreement shall be by way of example only and
shall not be considered in any way to be a limitation. The headings used herein
are for convenience and reference purposes only.
IN WITNESS
WHEREOF, the Parties have
caused their duly authorized representatives to execute this Electric Power
Supply Agreement on their behalf as of December 29,2000.
FirstEnergy
Services Corp.
By:
________________________________
Xxxxxx X.
Xxxxxxxx
President |
The Cleveland
Electric Illuminating Company
Ohio Edison
Company
The Toledo
Edison Company
By:
_________________________________
H. Xxxxx
Xxxx
President |
6
Pennsylvania
Power Company
By:
______________________________
H. Xxxxx
Xxxx
Chairman of
the Board |
7
Exhibit
A
1. |
Capacity
Charges |
Year |
Annual
Price |
2001 |
$57,836,418 |
2002 |
$57,836,418 |
2003 |
$57,836,418 |
2004 |
$57,836,418 |
2005 |
$57,836,418 |
$57,836,418 |
2. |
Energy
Charges |
2001 |
0000 |
0000 |
0000 |
0000 | |
$/MWH |
24.33 |
22.58 |
25.39 |
25.90 |
24.47 |
3. |
Taxes |
Will be charged on
a per MWH Basis if applicable.
8
Exhibit B
DEFINITIONS
In addition to
terms defined elsewhere in this Agreement, the terms listed below are defined as
follows:
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 fifty percent (50%) of the outstanding capital stock or other equity
interests having ordinary voting power or ability to direct the affairs of the
affiliate.
American
Transmission Systems, Inc. or ATSI means the wholly
owned subsidiary of FirstEnergy Corp. that owns, operates, or controls
facilities used for the transmission of Energy within the FirstEnergy Control
Area.
Business
Day means any day on
which Federal Reserve member banks in New York City are open for
business.
Capacity
means the resource
that produces electric Energy, measured in megawatts.
Delivery
Point means, where
Capacity and Energy are supplied from generating facilities
owned or controlled
by the Seller within the FirstEnergy Control Area, the point of interconnection
between the generating facility and the transmission facilities of American
Transmission Systems, Inc. Delivery Point means, where Capacity and Energy are
supplied from generating resources outside of the FirstEnergy Control Area, the
interface between the facilities of the adjacent control area and the facilities
of American Transmission Systems, Inc.
Energy
means electric
energy delivered under this Agreement at three-phase, 60-hertz alternating
current measured in megawatt hours.
FERC means The Federal
Energy Regulatory Commission or its regulatory successor.
FirstEnergy
Control Area means
the electric power system owned or controlled by affiliates of FirstEnergy Corp.
to which a common automatic generation control scheme is applied in order
to:
l) |
match, at all
times, the power output of the generators within the electric power
system, and Capacity and Energy purchased from entities outside the
electric power system, with the load within the electric power
system; |
2) |
maintain
scheduled interchange with other control areas within the limits of Good
Utility Practice; |
3) |
maintain the
frequency of the electric power system within reasonable limits in
accordance with Good Utility Practice; and |
4) |
provide
sufficient generating capacity to maintain operating reserves in
accordance with Good Utility Practice. |
Force
Majeure has the meaning
given in Section 7.1.
9
Good
Utility Practice means any of the
practices, methods and acts engaged in or approved by a significant portion of
the electric utility industry during the relevant time period or any of the
practices, methods and acts which, in the exercise of reasonable judgment in
light of the facts known at the time the decision was made, could have been
expected to accomplish the desired result at a reasonable cost consistent with
good business practices, reliability, safety, and expedition. Good Utility
Practice is not intended to be limited to the optimum practice, method or act to
the exclusion of all others, but rather to be acceptable practices, methods or
acts, generally accepted in the region and consistently adhered to by utilities
in the region.
Interest
Rate means the lesser
of Prime Rate plus two percent and the maximum lawful rate permitted by
applicable law.
NERC means The North
American Electric Reliability Council.
Power means Capacity
and/or Energy.
Prime
Rate means for any
date, the per annum rate of interest announced from time to time by Citibank,
N.A., as its prime rate for commercial loans, effective for such date as
established from time to time by such bank.
Real Power
Losses means Capacity and
Energy supplied to compensate for losses that occur when Power is delivered over
transmission and distribution facilities.
Taxes means all ad
valorem, property, occupation, utility, gross receipts, sales, use, excise and
other taxes, governmental charges, licenses, permits and assessments, other than
taxes based on net income or net worth.
Transmission
Provider means the utility
or utilities, including ATSI, transmitting Power on behalf of Buyer to or from
the Delivery Point(s) under this Agreement.
10
Exhibit
C
Installed
Generation
Unit |
Net
Demonstrated
Capability
(MW) |
|||
Beaver Valley
Unit 1
Beaver Valley
Xxxx 0
Xxxxx
Xxxxx
Xxxxxxxxx
Xxxx 0 *
Mansfield
Xxxx 0*
Xxxxxxxxx
Xxxx 0*
Perry |
810
820
883
51
358
355
1,254 |
|||
Total |
4,531 |
*CEI and TE
leasehold interest only.