Exhibit B-2
(Execution Copy)
CONFIDENTIAL
INTERCONNECTION AGREEMENT
By and Among
FE ACQUISITION CORP and
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
and
PENNSYLVANIA ELECTRIC COMPANY
for the
Seneca Station
Dated October 30, 1998
TABLE OF CONTENTS
Page
1.0 Definitions................................................2
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2.0 Term...................................................... 8
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3.0 Continuing Obligations and Responsibilities............... 8
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3.1 Interconnection Service...........................8
3.2 Access, Easements, Conveyances, Licenses, and
Restrictions.................................... 8
3.3 Facility and Equipment Maintenance................ 9
3.4 New Construction or Modifications.................10
3.5 Inspections.......................................12
3.6 Information Reporting Obligations.................13
3.7 Local Services....................................13
3.8 Company Provided Local Services...................14
3.9 Producer Provided Local Services..................16
3.10 Spare Parts.......................................16
3.11 Emergency Procedure...............................16
3.12 Interconnection Service Interruptions.............17
3.13 Scheduled Maintenance Notification and
Coordination......................................17
3.14 Safety............................................18
3.15 Environmental Compliance and Procedures...........19
4.0 Operations.................................................20
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4.1 General...........................................20
4.2 Producer's Operating Obligations..................20
4.3 Auditing of Accounts and Records..................22
4.4 Transmission Services.............................22
5.0 Cost Responsibilities and Billing Procedures...............22
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5.1 Cost Responsibility for Interconnection Service............22
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5.2 Cost Responsibilities for Local Services..........22
5.3 Billing Procedure.................................23
5.4 Payment of Invoices ..............................23
5.5 Interest on Unpaid Balances.......................23
5.6 Default...........................................23
6.0 Documentation..............................................24
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6.1 Drawings..........................................24
7.0 Confidentiality............................................24
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7.1 Confidentiality of the Company ...................24
7.2 Confidentiality of the Producer...................25
7.3 Confidentiality of Audits.........................25
7.4 Remedies..........................................25
8.0 Events of Default..........................................26
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9.0 Indemnification............................................27
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9.1 Producer's Indemnification........................27
9.2 Company's Indemnification.........................28
9.3 Indemnification Procedures........................28
9.4 Survival..........................................28
10.0 Insurance..................................................28
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11.0 Force Majeure..............................................29
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12.0 Disputes...................................................30
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13.0 Representations............................................30
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13.1 Representations of the Company....................30
13.2 Representations of the Producer...................31
13.3 Representations of Both Parties...................32
14.0 Assignment/Change in Corporate Identity....................32
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15.0 Subcontractors.............................................33
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16.0 Labor Relations............................................33
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17.0 Independent Contractor Status..............................33
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18.0 Limitation on Damages......................................34
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19.0 Notices....................................................34
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20.0 Headings...................................................35
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21.0 Waiver.....................................................35
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22.0 Counterparts...............................................36
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23.0 Governing Law and Construction.............................36
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23.1 Laws and Regulations..............................36
24.0 Severability...............................................36
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25.0 Amendments.................................................36
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26.0 Entire Agreement...........................................37
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27.0 No Third Party Beneficiaries...............................37
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28.0 Conflicts.....................................................37
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29.0 Further Assurances............................................38
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SCHEDULES
Schedule A - Interconnection Facilities
Schedule B - Insurance Requirements
INTERCONNECTION AGREEMENT
This Interconnection Agreement (the "Agreement"), dated as of October
30, 1998, by and between FE Acquisition Corp., an Ohio corporation ("FEAC"), and
The Cleveland Electric Illuminating Company, an Ohio corporation ("CEI"), (FEAC
and CEI being referred to collectively herein as the "Producer"), and
Pennsylvania Electric Company d/b/a GPU Energy ("Company"), a Pennsylvania
corporation, (the Producer and the Company each being referred to herein as a
"Party", and collectively, as the "Parties"),
WITNESSETH:
WHEREAS, the FEAC and the Company have entered into an Purchase and
Sale Agreement (the "PSA"), dated as of October 30, 1998, pursuant to which the
Company has agreed, among other things, to sell its 20% undivided interest (the
"Interest") in the Seneca Pumped Storage Generating Station (the "Station") to
FEAC, and FEAC has agreed to purchase such interest from the Company;
WHEREAS, CEI currently owns an 80% undivided interest in the station
and will continue to do so after the Closing Date;
WHEREAS, CEI and the Company are parties to that certain Facilities
Agreement (the "Facilities Agreement"), dated as of October 21, 1966, pertaining
to the Station;
WHEREAS, the Producer plans to own and operate the Station on and after
the Closing Date;
WHEREAS, the Company intends to continue to operate its transmission
business from its present location on and after the Closing date;
WHEREAS, the Station is interconnected to the Company's Transmission
System and the Company and the Producer desire to keep the Station
interconnected to such Transmission System on the terms set forth herein; and
WHEREAS, the Company and FEAC have agreed in the PSA that the Company
and the Producer shall execute this Agreement in order to establish the
requirements, terms and conditions for the interconnection of the Station with
the Company's Transmission System.
NOW THEREFORE, in consideration of the mutual representations,
covenants and agreements hereinafter set forth, and intending to be legally
bound hereby, the Parties hereto agree as follows:
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ARTICLE 1
DEFINITIONS
1.0 Definitions. Wherever used in this Agreement with initial capitalization,
the following terms shall have the meanings specified or referred to in this
Article 1.
1.1 "Affiliate" shall mean, with respect to a corporation, partnership,
or other entity, each other corporation, partnership, or other entity that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such corporation, partnership,
or other entity.
1.2 "Agreement" shall mean this Interconnection Agreement dated as of
October 30, 1998 by and between the Company and the Producer, including all
schedules attached hereto and any amendments hereto.
1.3 "Closing Date" shall mean the date on which the Interest is
transferred from the Company to FEAC pursuant to the PSA.
1.4 "Company Facilities" shall mean those transmission, distribution,
substation, and communication facilities and related equipment located on the
Station site which will be retained by the Company, and which are described or
referred to in Section 2.2 of the PSA, including the Company Interconnection
Facilities, and any additions, modifications or replacements thereto.
1.5 "Company Interconnection Facilities" shall mean the structures,
facilities, equipment, devices and apparatus owned or leased by, or under
contract to, the Company or its Affiliates, including those that are identified
as Company Interconnection Facilities or as Joint Use Facilities owned by the
Company in Schedule A, as amended from time to time, which are necessary to
interconnect, and to facilitate the interconnection of, the Station to the
Transmission System.
1.6 "Sublicense Agreements" shall mean the Sublicense Agreements
pursuant to which the Producer and the Company each grant to the other certain
licenses and sublicenses under which the Company and Producer have the right to
keep, maintain and use certain equipment and systems on property being used by
the other Party under licenses from the U.S. Forest Service.
1.7 "ECAR" shall mean the East Central Reliability Council, a
reliability council under Section 202 of the Federal Power Act, established
pursuant to the East Central Area Reliability Coordination Agreement.
1.8 "Emergency" shall mean (a) with respect to the Company, a
condition or situation which the PJM OI or the Company deems imminently likely
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to (i) endanger life or property, or (ii) adversely affect or impair the
Transmission System, the Company's electrical systems or the electrical or
transmission systems of others to which the Transmission System or the Company's
electrical systems are directly or indirectly connected, which requires that the
output of the Station be adjusted to avoid or mitigate, and (b) with respect to
the Producer, a condition or situation which the Producer deems imminently
likely to (i) endanger life or property, or (ii) adversely affect or impair the
Station. Such a condition or situation includes, but is not limited to,
overloading or potential overloading, excessive voltage drop or unusual
operating conditions.
1.9 "Environmental Laws" shall mean Federal, state, and local laws,
regulations, rules, ordinances, codes, decrees, judgments, directives, or
judicial or administrative orders relating to pollution or protection of the
environment, natural resources or human health and safety, including, without
limitation, laws relating to Releases or threatened Releases of Hazardous
Substances (including, without limitation, Releases into or onto ambient air,
surface water, groundwater, land, surface and subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
Release, transport or handling of Hazardous Substances.
1.10 "FERC" shall mean the Federal Energy Regulatory Commission or its
successor.
1.11 "Good Utility Practice" shall mean, in the following order of
precedence, any of the applicable practices, methods and acts:
(a) required by NERC, the Transmission Operator, PJM
Interconnection, L.L.C., PJM OI, PAPUC, ECAR, MAAC, FERC, and OSHA, or
the successor of any of them, whether or not the Party whose conduct is
at issue is a member thereof;
(b) required by the policies and standards of the Company and
Producer relating to Emergencies copies of which, as amended, shall be
provided from time to time by each Party to the other; or
(c) 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 at
the time the decision was made, could have been expected to accomplish
the desired result at a reasonable cost consistent with law, regulation,
good business practices, generation, transmission, and distribution
reliability, safety, and expedition. Where the practices, methods or
acts required or otherwise engaged in or approved by one of the
foregoing bodies is inconsistent with the practices, methods or acts
required or otherwise engaged in or approved by another one or more of
the foregoing bodies, the practices, methods or acts required or
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engaged in or approved by the body with the highest precedence shall
govern. 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 practices, methods, or acts generally accepted by the electric
utility industry in the region.
1.12 "Hazardous Substances" shall mean: (a) any petrochemical or
petroleum products, oil, radioactive materials, radon gas, asbestos in any form
that is or could become friable, urea formaldehyde foam insulation and
transformers or other equipment that contains dielectric fluid that may contain
polychlorinated biphenyls; (b) any chemicals, materials or substances defined as
or included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "hazardous constituents", "restricted hazardous
materials", "extremely hazardous substances", "toxic substances",
"contaminants", "pollutants", "toxic pollutants" or words of similar meaning and
regulatory effect under any applicable Environmental Law; or (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any applicable Environmental Law.
1.13 "Interconnection Service" shall mean the service provided by the
Company to interconnect the Station with the Transmission System.
Interconnection Service shall not mean transmission service, ancillary services,
losses, or any other service which is available and/or required under the PJM
Tariff, or any retail wheeling tariff, including any distribution or other
transmission service tariff or contract, in each case as amended from time to
time.
1.14 "Joint Tag List" shall mean the list of personnel approved from
time to time by the Company, in accordance with Good Utility Practice, who meet
the Company's requirements to switch, tag, and ground electrical equipment.
1.15 "Joint Use Facilities" shall mean equipment, identified as Joint
Use Facilities in Schedule A, as amended from time to time, which are owned by
either the Company or the Producer and which are primarily used for generation
operations but which are also essential to the operational reliability of the
Transmission System and are, therefore, jointly-operated by the Company and the
Producer.
1.16 "Jointly-operated" shall mean to either operate or request
operation.
1.17 "MAAC" shall mean the Mid-Atlantic Area Council, a reliability
council under Section 202 of the Federal Power Act, established pursuant to the
MAAC Agreement, dated August 1, 1994, or any successor thereto.
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1.18 "Maintain" shall mean construct, reconstruct, install, inspect,
repair, replace, operate, patrol, maintain, use, modernize, expand, or upgrade,
or undertake other similar activities.
1.19 "NERC" shall mean North American Electric Reliability Council.
1.20 "PSA" shall have the meaning assigned to such term in the first
recital hereof.
1.21 "Producer" shall have the meaning assigned to such term in the
first paragraph hereof.
1.22 "Producer's Generating Facilities" shall mean the Station, and any
additions, modifications or replacements thereto.
1.23 "OSHA" shall mean the Occupational Safety and Health
Administration.
1.24 "PJM" shall mean the Pennsylvania-New Jersey-Maryland
interconnected power pool operated under the PJM Agreement.
1.25 "PJM Agreement" shall mean the Pennsylvania-New Jersey-Maryland
Interconnection Agreement, dated September 26, 1956, as amended by the Operating
Agreement of PJM Interconnection, L.L.C., dated as of April 1, 1997 and as
amended and restated as of June 2, 1997, and as may be further amended or
superseded from time to time.
1.26 "PJM Control Area" shall mean the control area recognized by NERC
as the PJM Control Area.
1.27 "PJM Interconnection, L.L.C." shall mean the entity formerly known
as the PJM Interconnection Association which was converted into a limited
liability company pursuant to the Delaware Limited Liability Company Act, Title
6, Sections 18-101 et seq. of the Delaware Code, by virtue of the filing of both
the Certificate of Formation and Certificate of Conversion with the Secretary of
State of Delaware, effective as of March 31, 1997.
1.28 "PJM OI" shall mean the Office of the Interconnection as
supervised by the Board of Managers of the PJM Interconnection, L.L.C., acting
pursuant to the PJM Agreement.
1.29 "PJM Tariff" shall mean the PJM Open Access Transmission Tariff
filed by the PJM Interconnection, L.L.C. with the FERC on July 14, 1997, in
Docket No. 0A97-261-000 as amended and effective April 1, 1998, and as further
modified, amended or superseded from time to time, under which transmission
service is provided within the PJM Control Area.
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1.30 "PAPUC" shall mean the Pennsylvania Public Utility Commission.
1.31 "PCF" shall mean Pool Controlled Facilities.
1.32 "Company" shall have the meaning assigned to such term in the
first paragraph herein.
1.33 "Point of Interconnection" shall mean each point of demarcation
where capacity, energy, and ancillary services each are transferred between the
Station and the Transmission System. The Points of Interconnection are specified
in Schedule A to this Agreement, but may be modified from time-to-time by mutual
written agreement of the Parties.
1.34 "Pool Controlled Facilities" or "PCFs" shall mean those Company
Interconnection Facilities over which the PJM OI, or any successor entity,
exercises operational control in accordance with the applicable agreement or
tariff, or any successor agreement or tariff, as such facilities are designated
in Schedule A to this Agreement.
1.35 "Qualified Personnel" shall mean individuals trained for their
positions by the Producer and/or Company pursuant to Good Utility Practice.
1.36 "Release" shall mean release, spill, leak, discharge, dispose of,
pump, pour, emit, empty, inject, xxxxx, dump, or allow to escape into or through
the environment.
1.37 "Revenue Meters" shall mean all MWh, MVARh meters, pulse isolation
relays, pulse conversion relays, transducers used by the PJM OI, Producer or the
Company for billing purposes, and associated totalizing equipment and
appurtenances (including voltage transformers and current transformers) used to
measure the transfer of energy between the Parties.
1.38 "Right-of-Way Access" shall mean gates, roadways, paths, or other
means of access used or required to gain entry to the transmission or
distribution system rights-of-way with respect to a Party's property or
facilities.
1.39 "Routine Inspection and Maintenance" shall mean any inspection,
certification, test and/or work required pursuant to Good Utility Practice on
either Party's property or facilities to ensure (a) reliable substation,
transmission, and distribution operations, and (b) transmission and distribution
system integrity.
1.40 "Secondary Systems" shall mean control or power circuits that
operate below 600 volts, ac or dc, including, but not limited to, any hardware,
control or protective devices, cables, conductors, electric raceways, secondary
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equipment, panels, transducers, batteries, chargers, and voltage and current
transformers.
1.41 "Spill Prevention Control and Countermeasure Plan" or "SPCC" shall
mean a plan to be implemented for on shore facilities that includes physical
structures and other measures to respond to and to prevent spills of oil from
reaching navigable waters as defined in Section 502(7) of the Federal Water
Pollution Control Act, or adjoining shorelines.
1.42 "Switching, Tagging, and Xxxx-Up Rules" shall mean the Company's
Safety Manual, Section 6: Tagging Rules Operating Division, as amended from time
to time.
1.43 "System Operator" shall mean the energy control center staff
responsible for central dispatch as provided in PJM Agreement, as amended or
superseded.
1.44 "Transmission Operator" shall mean the person, or persons,
designated by the Company, who coordinate the day-to-day interconnection of the
Station with the Transmission System.
1.45 "Transmission System" shall mean the facilities, including PCFs,
owned, controlled, or operated by the Company, either jointly or individually,
for purposes of providing transmission service, including services under PJM
Tariff, and Interconnection Service.
ARTICLE 2
TERM
2.0 Term.
2.1 Subject to required regulatory authorizations, if any, this
Agreement shall become effective when signed by the Parties except that the
obligations to provide Interconnection Service and any other services described
herein shall become effective on the Closing Date, as defined in the PSA. This
Agreement shall continue in effect until a mutually agreeable termination date
not to exceed the retirement date for the Station, unless terminated on an
earlier date by mutual agreement of the Parties or otherwise in accordance with
the terms of this Agreement. The Company shall file this Agreement with the FERC
as a Rate Schedule within the meaning of 18 C.F.R. Part 35. The Producer agrees
to support such filing, to reasonably cooperate with the Company with respect to
such filing, and to provide any information, including the filing of testimony,
reasonably required by the Company to comply with applicable filing
requirements. If the PSA is validly terminated pursuant to its terms prior to
the Closing Date, as defined in the PSA, then this Agreement shall also
terminate as of the date of such termination of the PSA.
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2.2 If (a) the FERC, any State or State regulatory commission, the
System Operator, PJM Interconnection, L.L.C., or PJM OI implements a change in
any law, regulation, rule or practice, or (b) the Company complies with a change
in any law, regulation, rule or practice, which change or compliance, affects,
or may reasonably be expected to affect, the Company's performance under this
Agreement, then the Company and the Producer shall negotiate in good faith any
amendments to this Agreement that are necessary to adapt the terms of this
Agreement to such change, and the Company shall file such amendments with the
FERC. If the Parties are unable to reach agreement on such amendments, the
Company shall have the right to make a unilateral filing with the FERC to modify
this Agreement pursuant to Section 205 or any other applicable provision of the
Federal Power Act and the FERC's rules and regulations thereunder; provided that
the Producer shall have the right to oppose such filing by the Company and to
participate fully in any proceeding established by the FERC to address such
amendments.
2.3 The applicable provisions of this Agreement shall continue in
effect after cancellation or termination hereof to the extent necessary to
provide for final xxxxxxxx, billing adjustments, and the determination and
enforcement of liability and indemnification obligations arising from acts or
events that occurred while this Agreement was in effect.
ARTICLE 3
CONTINUING OBLIGATIONS AND RESPONSIBILITIES
3.0 Continuing Obligations and Responsibilities.
3.1 Interconnection Service.
3.1.1 The Company shall provide the Producer with
Interconnection Service over the Company Interconnection Facilities.
Interconnection Service shall be provided under this Agreement, for the Station
and any additions to (including additional units at the site of the Station),
upgrades of, or repowerings of the Station, but not for any other generating
unit, wherever located; provided, however, that the expiration date of this
Agreement shall not be extended by any such addition, upgrade or repowering of
the Station.
3.1.2 The Company shall provide Interconnection Service at the
Points of Interconnection specified in Schedule A. The Company shall permit the
Producer to continue to receive Interconnection Service for the Station as long
as (a) the Producer continues to Maintain the Producer's Generating Facilities
as required by, and in accordance with, Good Utility Practice, and (b) the
Producer has not committed a material event of default under this Agreement,
which default continues after written notice of default and a reasonable
opportunity to cure has been afforded to the Producer.
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3.1.3 The Producer shall be responsible for (a) making
arrangements under the applicable tariffs for transmission and ancillary
services associated with the delivery of capacity and/or energy produced by the
Station, which services shall not be provided under this Agreement, (b)
obtaining capacity and/or energy to satisfy its station service, or other
requirements, and (c) making arrangements under applicable tariffs for
transmission services, losses, and ancillary services associated with the use of
the Transmission System for the delivery of capacity and energy to the Station
for the purpose of supplying station service or for any other use by the
Producer. The Company shall reasonably cooperate with Producer with respect to
such agreements.
3.1.4 The Company does not guarantee the non-occurrence of, or
warrant against, and the Producer releases the Company from any and all claims
or damages associated with: (a) any interruption in the availability of the
Company Interconnection Facilities or the Transmission System; or (b) damage to
the Producer's Generating Facilities resulting from electrical transients,
including, without limitation, short circuits (faults), or events of force
majeure as defined in Article 11, except to the extent caused by the Company's
gross negligence or willful misconduct.
3.2 Access, Easements, Conveyances, Licenses, and Restrictions.
3.2.1 General. Points of Interconnection, and certain
operation procedures and practices for the Company Interconnection Facilities,
are set forth in Schedule A to this Agreement. The Company and the Producer have
granted to each other certain licenses and sublicenses for access regarding the
Producer's Generating Facilities and the Company Facilities, which grants are
memorialized in the Sublicense Agreement.
3.2.2 The Company shall be entitled to operate and/or purchase
from the Producer such DC power systems, protection and metering circuit
components, Supervisory Control and Data Acquisition ("SCADA") equipment,
transformers, Secondary Systems, communications equipment, building facilities,
software, documentation, structural components; and other facilities and
appurtenances that are necessary for the Company to Maintain the Transmission
System if: (a) the Producer shall commence any case under federal bankruptcy
laws or other proceeding under any similar law of any jurisdiction for the
relief of debtors, or shall petition or apply for the appointment of a trustee
or other custodian, liquidator, or receiver for the Producer or for any
substantial part of the Producer's Generating Facilities; (b) a decree or order
for relief shall be entered in respect of the Producer in an involuntary case
under federal bankruptcy laws, or in any other proceeding under any similar law
of any jurisdiction for the relief of debtors, or a decree or order shall be
entered appointing a trustee or other custodian, liquidator, or receiver for
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the Producer or for any substantial part of the Producer's Generating Facilities
and such decree or order is not dismissed within 60 days after it is entered;
(c) the Producer shall cease its operations for more than 30 consecutive days
without having an assignee, successor, or transferee in place; or (d) the
Producer, or the Producer's assignee, successor, or transferee, shall fail to
comply with the material obligations or duties set forth in this Agreement for
more than two consecutive days, which failure adversely affects the Transmission
System.
Upon the occurrence of any of the foregoing events, the
Company shall give the Producer or the Producer's assignee, successor or
transferee written notice, pursuant to Article 19, of their intent to implement
their rights under this Section 3.2.2, which notice shall specify the actual or
alleged failure of the Producer to comply with its obligations or duties. If the
failure endangers life or property, or impairs or creates a significant risk to
the safety, reliability, stability, or integrity of the Transmission System, the
Company may implement this Section 3.2.2 without such prior notice as necessary
in their judgment to avert such condition.
3.2.3 The Company shall return operational control of such
facilities to the Producer as soon as practicable after the event permitting the
Company to exercise such operational control has ceased, or the underlying
default has been cured. The Company shall operate such facilities in accordance
with Good Utility Practice and applicable, material agreements to which the
Producer is a party.
3.3 Facility and Equipment Maintenance.
3.3.1 The Company shall operate and maintain the Company
Interconnection Facilities in a safe and efficient manner and in accordance with
Good Utility Practice. The Producer shall Maintain its own property, equipment,
facilities and appurtenances at the Station that might reasonably be expected to
have an impact on the operation of the Company Interconnection Facilities in a
safe and efficient manner, as required by and in accordance with Good Utility
Practice. The Producer shall Maintain all common-use roadways and plant accesses
in or about the Station.
3.3.2 At their sole expense, the Producer shall maintain in
full force and effect all permits, licenses, rights-of-way, and other
authorizations as may be required to Maintain the Producer's Generating
Facilities.
3.3.4 Equipment Testing Obligations
3.3.4.1 The Company may reasonably request, pursuant
to Good Utility Practice, that the Producer test, calibrate, verify, or validate
the Station, and the Producer
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shall promptly comply with such a request. The Producer shall be responsible for
all costs of testing, calibrating, verifying or validating the Station.
3.3.4.2 Pursuant to the foregoing Section 3.3.4.1,
the Producer shall supply the Company, at the Company's
request and at no cost to the Company, copies of inspection reports,
installation and maintenance documents, test and calibration records,
verifications, and validations related to the Producer's Generating Facilities.
The Company shall supply to the Producer, at the Producer's request and at no
cost to the Producer, copies of inspection reports, installation and maintenance
documents, test and calibration records, verifications, and validations related
to the Company's Interconnection Facilities.
3.4 New Construction or Modifications.
3.4.1 Unless otherwise required by law, regulation, or Good
Utility Practice, the Company shall not be required at any time to upgrade or
otherwise modify the Company Interconnection Facilities.
3.4.2 The Company may undertake additions, modifications, or
replacements of the Company Interconnection Facilities. If such additions,
modifications, or replacements might reasonably be expected to affect the
Producer's operation of the Station, the Company shall provide written notice
thereof to Producer as far in advance of undertaking such additions,
modifications or replacements as is practicable, but in no event less than 60
days, and otherwise in a manner consistent with the requirements of FERC Order
No. 889. Any such additions, modifications, or replacements shall comply with
Good Utility Practice. The Company shall use reasonable efforts during and with
respect to such addition, modification, or replacement to minimize any adverse
impact on the Station.
3.4.3 In the event the Producer plans to increase the capacity
of the Station, the Producer shall submit to the Company any and all plans and
specifications that the Company may reasonably request related to such increase.
Such specifications and plans shall be submitted by the Producer to the Company
not later than twelve (12) months prior to the respective commercial operation
date for additions, modifications, or replacements to the Station that will
result in such increase, except as otherwise agreed to by the Company. Any such
additions, modifications, or replacements shall comply with Good Utility
Practice.
3.4.4. If the Producer plans any additions, modifications, or
replacements to the Station that will not increase its capacity, but could
reasonably be expected to affect the Company Interconnection Facilities, the
Producer shall give the Company reasonable notice, but not less than sixty (60)
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days' prior written notice thereof; provided, however, that the Producer shall
provide the Company with at least twelve (12) months' prior written notice, and
shall submit to the Company the plans and specifications for such additions,
modifications, or replacements if they will involve an outage of the Station for
thirty (30) days or more. All such additions, modifications, or replacements
shall (i) comply with Good Utility Practice, (ii) be accompanied by appropriate
information and operating instructions, and (iii) be subject to review and
acceptance by the Company, which review shall be based on Good Utility Practice
and which acceptance shall not unreasonably be withheld or delayed.
3.4.5 The Company's acceptance of the Producer's
interconnection plans and specifications for any proposed additions,
modifications, or replacements to the Station and the Company's participation in
interconnected operations with the Producer are not and shall not be construed
as: (a) confirmation or endorsement of the design of the Station; (b) a warranty
of safety, durability or reliability of the Station; or (c) responsibility for
strength, details of design, adequacy, or capability of the Station.
3.4.6 Notwithstanding anything to the contrary set forth
herein, all work performed in connection with the construction, installation,
and maintenance of additions, modifications or replacements to the Station that
requires the performance of any activities on, or which may physically affect,
the Transmission System or the Company Interconnection Facilities, or any part
thereof, shall be performed only by the Producer or by contractors selected by
the Producer, subject to the acceptance of the Company, which shall not be
unreasonably withheld or delayed.
3.4.7 The Company shall inform the Producer of any additions,
modifications, or replacements to the Transmission System or the Company
Interconnection Facilities, that are necessary as a result of the addition,
modification, or replacement to the Station made pursuant to Sections 3.4.3 or
3.4.4. The Producer shall compensate the Company for all reasonable costs
associated with any modifications, additions, or replacements made to the
Company Interconnection Facilities or the Transmission System to the extent made
necessary by any additions, modifications, or replacements to the Producer's
Generating Facilities. The Company shall provide an estimate of such costs as
early as practicable, but in any event not less than 30 days prior to the
initiation of such addition, modification or replacement.
3.4.8 The Producer shall modify, at its sole cost and expense,
the Station as may be reasonably required to conform with (i) changes to Good
Utility Practice, or (ii) with additions, modifications, or replacements of the
Transmission System or the Company Interconnection Facilities reasonably
12
required by Good Utility Practice or implemented in accordance with this
Agreement, (including, without limitation, changes to the voltages at which the
Transmission System is operated.)
3.4.9 Upon completion of any addition, modification, or
replacement to the Station that may reasonably be expected to affect the
Transmission System or the Company Interconnection Facilities, but no later than
ninety (90) days thereafter, the Producer shall issue "as built" drawings to the
Company. Upon completion of any addition, modification, or replacement to the
Transmission System or the Company Interconnection Facilities, that may
reasonably be expected to affect the operation of the Station, but no later than
ninety (90) days thereafter, the Company shall issue "as built" drawings to the
Producer.
3.5 Inspections.
3.5.1 General. The Company shall, at its own expense, have the
right to inspect or observe all maintenance activities, equipment tests,
installation work, construction work, and modification work to the Producer's
Generating Facilities. If the Company observes any deficiencies or defects with
respect thereto that might reasonably be expected to adversely affect the
Company Interconnection Facilities, the Company shall notify the Producer, and
the Producer shall make immediately any corrections necessitated by Good Utility
Practice.
3.5.2 The Producer shall, at its own expense, have the right
to inspect or observe all maintenance activities, equipment tests, installation
work, construction work, and modification work to the Company's Interconnection
Facilities. If the Producer observes any deficiencies or defects with respect
thereto that might reasonably be expected to adversely affect the Station, the
Producer shall notify the Company, and the Company shall immediately make any
corrections necessitated by Good Utility Practice.
3.5.3 Joint Use Facilities.
3.5.3.1 Joint Use Facilities are identified in
Schedule A to this Agreement. The Party owning such Joint Use Facilities shall
Maintain those facilities pursuant to Good Utility Practice. Each Party agrees
to perform joint inspections of the Joint Use Facilities one year from the
Closing Date, and annually thereafter, or as otherwise mutually agreed upon. The
Company and the Producer shall bear their respective costs of participating in
such inspections.
3.5.3.2 The Party owning such Joint Use Facilities
shall provide to the other Party copies of all written reports made by or for
the first Party summarizing such inspections and describing any problems,
deficiencies or other observed defects. Unless the Parties agree that
13
an alternative to such correction is preferable, the Party owning such Joint Use
Facilities shall be responsible for correcting any noted deficiencies within
sixty (60) days from the date of discovery thereof, or within such other period
mutually agreeable to the Parties. The Party owning such Joint Use Facilities
shall bear the costs of such correction.
3.6 Information Reporting Obligations.
3.6.1 In order to maintain Interconnection Service, the
Producer shall promptly provide the Company with all relevant information,
documents, or data regarding the Station that would be expected to affect the
Transmission System, and which is reasonably requested by NERC, MAAC, the PJM
OI, PJM Interconnection, L.L.C., ECAR, the PAPUC, , the System Operator, the
Transmission Operator, or the Company, which disclosure shall be subject to
reasonable restrictions, acceptable to the Company and the Producer, regarding
the disclosure of commercially sensitive information provided by the Producer.
3.6.2 The Producer shall supply accurate, complete, and
reliable information in response to reasonable data requests necessary for
operations, maintenance regulatory requirements, and analysis of the
Transmission System. Such information may include metered values for MW, MVAR,
voltage, current, amperage, automatic voltage regulator status, automatic
frequency control, dispatch, frequency, breaker status indication, or any other
information reasonably required by the Company for reliable operation of the
Transmission System pursuant to Good Utility Practice.
3.6.3 Information pertaining to generation, operating
parameters shall be gathered for electronic transmittal to the Company using one
or more of the following: SCADA equipment, remote terminal unit ("RTU")
equipment, or remote access pulse recorders or telemetry. Information pertaining
to generation operating parameters shall be provided by the Producer in
accordance with Schedule A.
3.6.4. The Producer shall be responsible for the maintenance,
and any required replacements or upgrades, of the field devices and equipment
used to gather information regarding generation operating parameters.
3.7 Local Services.
3.7.1 General. The Company and the Producer agree that, due to
the integration of certain control schemes, Revenue Metering applications, and
communication networks, it is cost effective for them to provide each other with
the services set forth in Sections 3.8 and 3.9 below at the prices referenced
therein.
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3.7.1.1 The Company and the Producer shall use their
best efforts to ensure that services provided pursuant to Sections 3.8 and 3.9
shall be available at all times and in the manner and at the prices specified
herein. Notwithstanding the foregoing, either Party may change such services,
provided that (a) there is no cost to the receiving Party as a result of such
change, (b) the quality, reliability, and integrity of the replacement services
are equivalent to the services replaced, and (c) there is otherwise no
materially adverse effect on the receiving Party.
3.7.1.2 Neither the Company nor the Producer shall
terminate any services set forth in Sections 3.8 and
3.9 below without the other Party's written consent, which consent shall not be
unreasonably withheld or delayed, or without, in the case of the services set
forth in Sections 3.8 and 3.9, at least twelve (12) months' prior written
notification; provided, however, that if either Party no longer needs or desires
a particular service provided under Section 3.8 or 3.9, that Party shall notify
the other Party, and the providing Party shall terminate that service as soon
thereafter as practicable.
3.7.2 Temporary Suspension of Section 3.8 and 3.9 Services.
The Party providing the services set forth in Sections 3.8 and 3.9 below shall
notify and obtain approval, which approval shall not be unreasonably withheld or
delayed, from the affected Party of any scheduled temporary suspension of
services at least five (5) working days in advance of such suspension. Such
notification shall include an estimated time duration for a return to normal
conditions. The Party temporarily suspending the service shall use reasonable
efforts to minimize the duration of the suspension.
3.7.2.1 In the event of any unplanned or forced
suspension of the services set forth in Sections 3.8 and 3.9 below, the Party
providing the service shall immediately notify the other Party first verbally
and then in writing in accordance with Article 19. The providing Party shall use
all reasonable efforts to minimize the duration of that suspension.
3.7.2.2 The Company and the Producer agree to
use all reasonable efforts to complete any repairs, modifications, or
corrections that are necessary to restore to the other Party as soon as
reasonably practicable, any services set forth in Sections 3.8 and 3.9 below
that have been suspended.
3.8 Company Provided Local Services.
Local services required to be provided by the Company shall include the
services identified in Schedule A and the services listed below.
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3.8.1 Building Services. At no cost to the Producer, the
Company shall provide heating, ventilation, air conditioning, lighting, and
other building services, as and to the extent provided immediately prior to the
Closing Date, to the Producer's Generating Facilities located within the Company
Facilities.
3.8.2 Revenue Metering. The Company shall, at Producer's
expense: (a) own and Maintain, and have the right to change the location of all
Revenue Meters, instrument transformers and appurtenances associated with
Revenue Meters, and analog equipment (transducers and telemetry), (b) conduct
meter accuracy and tolerance tests, and (c) prepare all calibration reports
required for equipment that measures energy transfers between the Producer and
Company. All meter accuracy and tolerance testing hereunder shall be in
accordance with Good Utility Practice and shall be conducted, at the Producer's
request, in the presence of a Producer's representative.
3.8.2.1 The Company and the Producer agree that, if
the Revenue Meters and analog equipment and the Point of Interconnection are not
at the same location electrically, the metering data shall be adjusted, or the
Revenue Meters shall be compensated, as the Company shall deem appropriate, to
record delivery of electricity in a manner that accounts for the total (load
plus no-load) electrical energy losses occurring between the metering point and
the Point of Interconnection, both when the Station is delivering energy to the
Company and when the Company is delivering station service electricity to the
Producer for the Station, or for any other use, which adjustment shall be
pursuant to the methodology set forth in Schedule A.
3.8.2.2 If at any time any Revenue Metering and
analog equipment is found to be inaccurate by a margin of greater than that
allowed under the applicable criteria, rules, and standards of good Utility
Practice, such Revenue Metering and analog equipment shall be made accurate or
replaced at the Producer's expense. Meter readings for the period of inaccuracy
shall be adjusted insofar as the extent of the inaccuracy can be reasonably
ascertained; provided, however, no adjustment shall be made for meter readings
made prior to the point in time halfway between the time of the last test that
showed the Revenue Metering and analog equipment in question to be functioning
accurately and the time the subsequent inaccuracy is corrected, except by
agreement of the Parties. Each Party shall comply with any reasonable request of
the other concerning the sealing of Revenue Meters, the presence of a
representative of the other Party when the seals are broken and the tests are
made, and other matters affecting the accuracy of the measurement of electricity
delivered from or to the Station. If either Party believes that there has been a
Revenue Meter or analog equipment failure or stoppage, it shall immediately
notify the other Party thereof.
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3.8.2.3 The Parties shall each keep and maintain
accurate and detailed records relating to the delivery of energy for a period of
not less than seven (7) years. Such records shall be made available for
inspection by either Party or any governmental agency having jurisdiction with
respect thereto during normal business hours upon reasonable notice.
3.8.2.4 The Company shall own and Maintain, at the
Producer's expense, all additional or updated metering and associated equipment
needed in the reasonable discretion of the Company exercised in accordance with
Good Utility Practice.
3.8.2.5. The Company shall own and Maintain, at
the Producer's expense, equipment for real-time communications, real-time
reactive power, hourly MWh information, and such other information as required
by the PJM OI, System Operator, or Transmission Operator, or as reasonably
required by the Company. The Producer shall Maintain, at its own expense,
operating telephone links to provide information deemed necessary by the PJM OI,
System Operator, or Transmission Operator, or as reasonably deemed necessary by
the Company to integrate operation of the Station with the Transmission System.
3.9 Producer Provided Local Services.
Local services required to be provided by the Producer shall
include the services identified in Schedule A and the services listed below.
3.9.1 Building Services. At no cost to the Company, the
Producer shall provide the Company Facilities located within the Station with
heating, ventilation, air-conditioning, lighting, potable water, sewage
treatment, paging and other building services as and to the extent provided
prior to the Closing Date.
3.9.2 Substation Operations. The Company may request and the
Producer shall provide the Company with substation operating and maintenance
services at a mutually agreed upon cost.
3.9.3 Meter Data. At no cost to, and if requested by the
Company, the Producer shall provide the Company with meter data at locations
that require a manual read as set forth in Schedule A to this Agreement.
3.9.4 Storage and Office Space. The Producer shall provide to
the Company, at no cost to the Company, the use of storage areas and building
spaces for spare parts and administrative uses related to the Company's
Interconnection Facilities at the locations in place immediately prior to the
Closing Date.
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3.10 Spare Parts.
Where practicable and available, and subject to applicable
regulatory and other approvals, the Company and the Producer shall make
available to the other Party such spare parts as are available to the Company
and the Producer in the event of Emergencies or equipment failures. The Parties
shall mutually agree upon payment for, or replacement of, such spare parts.
3.11 Emergency Procedure.
3.11.1 The Company, through the Transmission Operator, shall
provide the Producer with prompt verbal notification of Emergencies affecting
either Transmission System that may reasonably be expected to affect the
Producer's operation of the Station or the Joint Use Facilities owned by the
Producer, and the Producer shall provide the Company prompt verbal notification
of Emergencies which might reasonably be expected to affect the Company's
operation of the Transmission System or the Company Interconnection Facilities.
Such notification shall describe the Emergency, the extent of the damage or
deficiency, the anticipated length of the outage, and the corrective action
taken and/or to be taken, and shall be followed as soon as practicable with
written notification in accordance with Article 19.
3.11.2 If in the good faith judgment of a Party, an Emergency
endangers or might endanger life or property, the Party recognizing the problem
shall take such action as is reasonable and necessary to prevent, avoid, or
mitigate injury, danger, and loss. If, however, the Emergency involves
transmission or distribution electrical equipment, the Producer shall notify the
Transmission Operator, and shall obtain the consent of such personnel, prior to
performing any switching operations.
3.11.3 The Company may, consistent with Good Utility Practice,
have the Transmission Operator take whatever actions or inactions the Company
deems necessary during Emergency operating conditions to (a) preserve public
safety, (b) preserve the integrity of the Transmission System, (c) limit or
prevent damage, and (d) expedite restoration of service. The Company shall use
reasonable efforts to minimize the effect of such actions or inactions on the
Station.
3.12 Interconnection Service Interruptions.
3.12.1 If at any time, in the reasonable exercise of the
Transmission Operator's judgment or the Company's reasonable judgment exercised
in accordance with Good Utility Practice, the operation of the Producer's
Generating Facilities would have an adverse impact on the quality of service
rendered by the Company (including transmission or distribution services and
services provided to end users), or would interfere with the safe and reliable
operation of the Transmission System, the Company may discontinue
Interconnection Service and/or curtail, interrupt or reduce energy delivered
18
from the Station until the condition has been corrected. Unless the Transmission
Operator, or the Company, perceives that an Emergency exists or that the risk of
one is imminent, the Company shall give the Producer reasonable notice of their
intention to discontinue, curtail, interrupt or reduce energy delivery in
response to the interfering condition and, where practical, allow suitable time
for the Producer to remove the interfering condition before any such
discontinuation, curtailment, interruption or reduction commences. The Company's
judgment with regard to any discontinuation, curtailment, interruption or
reduction of service under this paragraph shall be made pursuant to Good Utility
Practice. In the event of any discontinuation, curtailment, interruption or
reduction the Company shall promptly confer with the Producer regarding the
interfering conditions that gave rise to the discontinuation, curtailment,
interruption or reduction and the Company shall give the Producer the Company's
recommendation concerning the timely correction thereof. The Company shall
restore Interconnection Service or, if applicable, cease the curtailment,
interruption or reduction of energy delivery upon notification by the System
Operator, PJM OI, as applicable, that the interfering condition no longer
exists.
3.13 Scheduled Maintenance Notification and Coordination.
3.13.1 Local Routine Inspection and Maintenance. The Company
and Producer agree that, due to the integration of certain control and
protective relaying schemes between the Producer's Generating Facilities and the
Company Interconnection Facilities, it will be necessary for them to cooperate
in the inspection, maintenance and testing of these areas of integration. Each
Party will provide advance notice to the other Party before undertaking any work
in these areas, especially in electrical circuits involving circuit breaker trip
and close contacts, current transformers or potential transformers.
3.13.2 Transmission System Maintenance. Subject to applicable
FERC regulations and policy, and the requirements under the PJM OI, the Company
shall, as soon as practicable, give written notice to the Producer regarding the
timing of any scheduled maintenance of the transmission facilities which might
reasonably be expected to affect the operation of the Station. The Company
shall, to the extent practicable, schedule any testing, shutdown, or withdrawal
of those facilities to coincide with the Producer's scheduled outages of the
Station. To facilitate such notification, in June of each year, or on another
date mutually acceptable to the Parties, the Producer shall furnish the Company
with non-binding preliminary maintenance schedules for the Station covering the
upcoming two years. The Producer shall furnish the Company with non-binding
updates to such schedules to reflect significant changes thereto. In the event
the Company is unable to schedule the outage of its facilities to coincide with
the Producer's schedule, the Company shall use all reasonable efforts to notify
19
the Producer inadvance of the reasons for the facilities' outage, of the time
scheduled for the outage to take place, and of its expected duration. The
Producer shall give notice to the Company regarding any scheduled maintenance of
the Producer's Generating Facilities which might reasonably be expected to
affect the operation of the Company Interconnection Facilities or the
Transmission System.
3.14 Safety.
3.14.1 General. The Company and the Producer agree to be
solely responsible for, and assume all liability for, the safety and supervision
of their own employees, agents, representatives, and subcontractors, except that
neither Party shall be responsible or liable hereunder for any injury to the
extent caused by the act or omission of the other Party or that Party's
respective contractors or agents.
3.14.1.1 The Company and the Producer agree that all
work performed by either Party which might reasonably
be expected to affect the operations of the other Party shall be performed in
accordance with all applicable laws, rules, and regulations pertaining to the
safety of persons or property, and Good Utility Practice.
3.14.2 Switching, Tagging, and Xxxx-Up. The Producer shall
comply with the Switching, Tagging and Xxxx-Up Rules at all Points of
Interconnection.
3.14.2.1 The Producer shall be responsible for all
switching on the Producer's side of the Points of Interconnection, as such
points are set forth in Schedule A to this Agreement. The Company shall be
responsible for all switching on the Company's side of the Points of
Interconnection. The Parties owning the equipment at the Points of
Interconnection shall be responsible for its switching. The respective tagging
and xxxx-up responsibilities of the Company and the Producer are set forth in
the Switching, Tagging and Xxxx-Up Rules.
3.14.2.2 The Company and the Producer, in accordance
with the Company's Switching, Tagging and Xxxx-up
Rules, shall be responsible for training and testing their respective operators
for inclusion on a Joint Tag List. Either as changes occur or annually, each
Party shall provide the other Party with an updated list of its employees
qualified for inclusion on the Joint Tag List.
3.15 Environmental Compliance and Procedures.
3.15.1 On and after the Closing Date, the Producer and the
Company shall each be responsible for (a) complying with all Environmental Laws
applicable to the Producer's Generating
20
Facilities and the Company Facilities, respectively, (b) obtaining and
maintaining in force all applicable and required permits and approvals under
such Environmental Laws applicable to the Producer's Generating Facilities and
the Company Facilities, respectively, and (c) making all required reports and
notifications applicable to the Producer's Generating Facilities and the Company
Facilities, respectively, required by those laws and regulations.
3.15.2 A Party (the "Releasing Party") which Releases or
causes a Release of any Hazardous Substance, or which engages in any remediation
activities, either of which may physically affect the other Party's facilities
or which may endanger persons present or entering upon the other Party's
facilities, shall notify the other Party of such Release or remediation
activities as soon as possible after the occurrence of such Release or the
commencement of such remediation activities. A Party receiving such notice shall
keep it confidential, except to the extent reasonably required to protect such
Party's property or to prevent or minimize risk of extent injury. A Releasing
Party shall provide to the other Party copies of any reports filed with
governmental agencies to the extent such reports cover Releases or remediation
activities described above, and the Party receiving such copies shall keep them
confidential, except to the extent reasonably required to protect such Party's
property or prevent or minimize risk of personal injury.
3.15.3 Each Party shall not take any actions which might
reasonably be expected to have a material adverse environmental impact upon the
operations of the other Party without prior written notification and agreement
between the Parties.
3.15.4 The Producer shall not require the Company to modify
any substation SPCC physical structures, including containment systems, unless
required by law or regulation.
3.15.5 the Company and the Producer agree to coordinate with
each other concerning any regulatory obligations or filings. However, if such
coordination cannot be achieved, each Party will be responsible for assuring
compliance with its individual obligations.
ARTICLE 4
OPERATIONS
4.0 Operations.
4.1 General. The Company shall operate the Company Interconnection
Facilities, and the Producer shall operate the Producer's Generating Facilities,
in a safe and efficient manner and in accordance with all applicable Federal,
state, and local laws, and Good Utility Practice, and otherwise in accordance
with the terms of this Agreement.
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4.1.1 The Producer shall be required to comply with the
requests, orders, and directives of the Company regarding the operation of the
Company Interconnection Facilities to the extent such requests, orders or
directives are (a) issued pursuant to Good Utility Practice, (b) not unduly
discriminatory; and (c) otherwise in accordance with applicable tariffs.
4.1.2 In the event the Producer believes that a request,
order, or directive of the Company exceeds the limitations in Section 4.1.1, it
shall nevertheless comply with the request, order, or directive of the Company
pending resolution of the dispute under Article 12. The Parties agree to
cooperate in good faith to expedite the resolution of any disputes arising under
this Section 4.1.
4.2 Producer's Operating Obligations.
4.2.1 General. The Producer shall request permission from the
Company, Transmission Operator, the System Operator or PJM OI, as applicable,
prior to opening and/or closing circuit breakers in accordance with applicable
switching and operations procedures. The Producer agrees to operate the Station
in accordance with the directives of the Company, Transmission Operator, System
Operator and PJM OI and in accordance with Good Utility Practice.
4.2.1.1 The Producer shall carry out all switching
orders from the Transmission Operator in a timely
manner.
4.2.1.2 The electrical supply to the Point of
Interconnection shall be in the form of three-phase 60 Hz alternating current at
the nominal system voltage at the Point of Interconnection.
4.2.1.3 The Producer's equipment shall conform to
industry standards for harmonic distortion and voltage
fluctuation.
4.2.1.4 The Producer shall comply with the GPU
Transmission Operations Interconnection Requirements and
System Protection and Control Interconnection Requirements, as amended from time
to time, and with related Company directives.
4.2.2 Voltage or Reactive Control Requirements. Unless
otherwise agreed to by the Parties, the Producer shall operate the Station with
automatic voltage regulation equipment in service at all times. The voltage
regulation equipment will control voltage at the Points of Interconnection
consistent with the range of voltages prescribed by the Company, or the
Transmission Operator, from time to time. The Company, or the Transmission
Operator, may require the Producer to provide reactive power from the Station or
to absorb reactive power from the Transmission System, provided that, in either
case, the
22
Station is operating within its reactive generating capability and not violating
any electric constraints. Producer shall be compensated for the provision of
such services under the PJM Tariff for reactive power and voltage control
services. If the PJM Tariff does not provide for compensation for such services
or the PJM Tariff does not apply to the Producer's Generating Facilities, then
the Producer shall be compensated for such services in accordance with a
cost-based rate accepted for filing by FERC.
4.2.2.1 The Producer shall operate the Station in
accordance with the voltage schedules prescribed by the
Company, provided that meeting such voltage schedules would not cause the
Station to operate outside of its reactive generating capability or violate any
electrical constraints. Should the producer fail to meet the requirements in the
preceding sentence, the Company will provide written notice to the Producer of
such failure. If the Producer does not promptly commence appropriate action
after receiving such notice to remedy such failure, the Company may then take
any action necessary at the Producer's expense to remedy such failure, including
the installation of capacitor banks or other reactive compensation equipment
necessary to ensure the proper voltage or reactive supply at the Station. The
Company shall take, to the extent feasible, reasonable efforts to minimize the
impact of such action on the operation of the Station.
4.2.2.2 The Producer shall notify the Transmission
Operator, to the extent required by the Transmission
Operator, if any or all generating units at the Station reaches a VAR limit, if
there is any deviation from the assigned voltage schedule, or if any automatic
voltage regulator is removed from or restored to service.
4.2.3 The Company, or the Transmission Operator, may from time
to time reasonably request, order, or direct the Producer to adjust generator
controls that impact the Transmission System, such as excitation, droop, and
automatic generation control settings. The Producer agrees to comply with such
requests, orders, or directions.
4.2.2.3 The Producer shall keep the Company advised
of the Station's capability to participate in system
restoration and of the Station's block start capability and shall adhere to the
Company's service restoration plan and black start criteria, as amended from
time to time.
4.2.4 Producer acknowledges that the Transmission Operator has
the right to require reduced or increased generation of the Station in
accordance with the PJM Agreement or the PJM Tariff, as applicable, or in
accordance with applicable rules of the Transmission Operator.
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4.3 Auditing of Accounts and Records. Within two (2) years following a
calendar year, the Producer and the Company shall have the right, during normal
business hours, to audit each other's accounts and records pertaining to
transactions under this Agreement at the offices where such accounts and records
are maintained; provided, however, that appropriate notice shall have been given
prior to any audit, and provided further that the audit shall be limited to
those portions of such accounts and records that relate to services provided
under this Agreement for that calendar year. The Party being audited will be
entitled to review the audit report and any supporting materials. To the extent
that audited information includes confidential information, the auditing Party
shall designate an independent auditor to perform such audit.
4.4 Transmission Services. It is the intention of the Parties that this
Agreement govern the interconnection of the Station with the Transmission System
and the operation of the Company Interconnection Facilities and, to the extent
the operation thereof affects the Company Interconnection Facilities or the
interconnection of the Station to the Transmission System, the Station. This
Agreement is not intended to govern the transmission services which are or may
be provided by the Company to FEAC or CEI. Transmission services for FEAC will
be governed by applicable rules and tariffs of PJM or the FERC and any separate
agreement between FEAC and the Company. Transmission services for CEI are
governed by the Facilities Agreement, which shall be unaffected by this
Agreement.
ARTICLE 5
COST RESPONSIBILITIES AND BILLING PROCEDURES
5.0 Cost Responsibilities and Billing Procedures.
5.1 Cost Responsibility for Interconnection Service.
5.1.1 Except as otherwise provided in this Agreement, the
Producer shall compensate the Company for all reasonable costs, expenses and
fees required to enable the Company to fulfill its obligations under this
Agreement, including, without limitation, any tax liability, any costs of
acquiring land necessary for the Company Interconnection Facilities and the
costs and fees of all permits, licenses, franchises, or regulatory or other
approvals necessary for the construction, maintenance, and operation of any
Company Interconnection Facilities.
5.2 Cost Responsibilities for Local Services.
5.2.1 Each Party shall be responsible for the costs for
services provided to the other Party in Sections 3.8 and 3.9 as set forth in
those sections.
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5.2.2 For services which have identified price/rate schedules
set forth herein, said payment shall be in accordance with said schedules as in
effect from time to time. For services which require reimbursement but do not
have identified price/rate schedules, the Parties shall use reasonable efforts
to agree upon the price/rate to be paid prior to the performance or provision of
said services.
5.3 Billing Procedures
5.3.1 General. Within a reasonable time after the first day of
each month, each Party shall prepare an invoice for those reimbursable services
provided to the other Party under this Agreement during the preceding month.
5.3.2 Each invoice shall delineate the month in which the
services were provided, shall fully describe the services rendered, and shall be
itemized to reflect the services performed or provided.
5.3.3 The invoice shall be paid within thirty (30) days of
issuance. All payments shall be made in immediately available funds payable to
the other Party, or by wire transfer to a bank named and account designated by
the invoicing Party.
5.3.4 Disputed amounts shall be placed in an interest-bearing
escrow account, subject to resolution.
5.4 Payment of Invoices. Payment of an invoice shall not relieve the
paying Party from any responsibilities or obligations it has under this
Agreement, nor shall such payment constitute a waiver of any claims arising
hereunder.
5.5 Interest on Unpaid Balances. Interest on any unpaid amounts
(including amounts placed in escrow) shall be calculated in accordance with the
methodology specified for interest on refunds in FERC's regulations at 18 C.F.R.
ss.35.19a(a)(2)(iii). Interest on delinquent amounts shall be calculated from
the due date of the xxxx to the date of payment. When payments are made by mail,
bills shall be considered as having been paid on the date of receipt by the
other Party.
5.6 Default. In the event either Party fails to make payment to the
other Party on or before the due date, as described above, and such failure of
payment is not corrected within thirty (30) calendar days after the Party
notifies the Party in default to cure such failure, a default by said Party
shall be deemed to exist and the provisions of Article 8.0 shall apply.
5.6.1 In the event of a billing dispute between the Company
and the Producer, each Party shall continue to provide services as long as the
other Party (a) continues to make all payments not in dispute, and (b) pays into
25
an escrow account the portion of the invoice in dispute, pending resolution of
such dispute.
ARTICLE 6
DOCUMENTATION
6.0 Documentation.
6.1 Drawings.
6.1.1 Drawings that exclusively describe the Producer's
Generating Facilities and are not the proprietary information of third parties
will be transferred by the Company to the Producer prior to the Closing Date.
Drawings that exclusively describe the Company Facilities, including the Company
Interconnection Facilities, will be retained by the Company. Drawings describing
the Station and the Company Facilities on the same drawing will be identified
and marked as "common drawings." The Company shall retain a copy of the common
drawings and shall provide a copy of same to the Producer prior to the Closing
Date.
6.1.2 Each Party shall be responsible for updates and
corrections to its respective drawings and shall provide copies thereof to the
other Party as soon as practicable after the updates or corrections are made.
Before the Closing Date, the Parties shall develop mutually agreeable procedures
for updating drawings.
6.1.3 Except as otherwise noted on the document or drawing,
the Company make no representations as to the accuracy, detail, or completeness
of the documents or drawings provided to the Producer at or before the Closing
Date, and the Producer hereby releases the Company from any liability arising as
a result of the Producer's use of such documentation or drawings.
ARTICLE 7
CONFIDENTIALITY
7.0 Confidentiality.
7.1 Confidentiality of Company. The Company shall hold in confidence,
unless compelled to disclose by judicial or administrative process or other
provisions of law, all documents and information furnished by the Producer in
connection with this Agreement, except to the extent that such information or
documents are (a) generally available to the public other than as a result of a
disclosure by the Company, (b) available to the Company on a non-confidential
basis prior to disclosure to the Company by the Producer, or (c) available to
the Company on a non-confidential basis from a source other than the Producer,
26
provided that such source is not known, and by reasonable effort could not be
known, by the Company to be bound by a confidentiality agreement with the
Producer or otherwise prohibited from transmitting the information to the
Company by a contractual, legal or fiduciary obligation. The Company shall not
release or disclose such information to any other person, except to its
employees on a need-to-know basis, in connection with this Agreement who has not
first been advised of the confidentiality provisions of this Section 7.1 and has
agreed in writing to comply with such provisions. In no event shall such
information be disclosed in violation of the requirements of FERC Orders 889 and
889-A, and any successor thereto. The Company shall promptly notify the Producer
if they receive notice or otherwise conclude that the production of any
information subject to this Section 7.1 is being sought under any provision of
law. The Company may utilize information subject to this Section 7.1 in any
proceeding under Article 12, subject to a confidentiality agreement with the
participants.
7.2 Confidentiality of the Producer. The Producer shall hold in
confidence, unless compelled to disclose by judicial or administrative process
or other provisions of law, all documents and information furnished by the
Company in connection with this Agreement, except to the extent that such
information or documents are (a) generally available to the public other than as
a result of a disclosure by the Producer, (b) available to the Producer on a
non-confidential basis prior to disclosure to the Producer by the Company, or
(c) available to the Producer on a non-confidential basis from a source other
than the Company, provided that such source is not known, and by reasonable
effort could not be known, by the Producer to be bound by a confidentiality
agreement with the Company or otherwise prohibited from transmitting the
information to the Producer by a contractual, legal or fiduciary obligation. The
Producer shall not release or disclose such information to any other person,
except its employees on a need-to-know basis in connection with this Agreement,
who has not first been advised of the confidentiality provisions of this Section
7.2 and has agreed to comply in writing with such provisions. The Producer shall
promptly notify the Company if it receives notice or otherwise concludes that
the production of any information subject to this Section 7.2 is being sought
under any provision of law. Producer may utilize information subject to this
Section 7.2 in any proceeding under Article 12, subject to a confidentiality
agreement with the participants.
7.3 Confidentiality of Audits
The independent auditor performing any audit, as referred to
in Section 4.3, shall be subject to a confidentiality agreement between the
auditor and the Party being audited. Such audit information shall be treated as
confidential except to the extent that its disclosure is required by regulatory
or judicial order, for reliability purposes pursuant to Good Utility Practice,
27
pursuant to applicable FERC rules and regulations, as amended from time to time,
or as required by the Company. Except as provided herein, neither Party will
disclose the audit information to any third party without the other Party's
prior written consent. Audit information in the possession of the Party not
being audited shall be subject to all provisions of Article 7.
7.4 Remedies.
The Parties agree that monetary damages would be inadequate to
compensate a Party for the other Party's breach of its obligations under this
Article 7. Each Party accordingly agrees, subject to Section 18.0, that the
other Party shall be entitled to equitable relief, by way of injunction or
otherwise, if the first Party breaches or threatens to breach its obligations
under this Article 7, which equitable relief shall be granted without bond or
proof of damages, and the receiving Party shall not plead in defense that there
would be an adequate remedy at law.
ARTICLE 8
EVENTS OF DEFAULT
8.0 Events of Default.
8.1 Any one of the following shall constitute an event of default
under this Agreement:
(a) The failure to pay any amount when due;
(b) A breach of any material term or condition of this
Agreement, including but not limited to any material breach of a representation,
warranty or covenant made in this Agreement, including the Appendices. Failure
by a Party to provide any required schedule, report or notice hereunder may
constitute a material breach hereof if such failure is not cured within thirty
(30) days after notice to the defaulting Party;
(c) The appointment of a receiver or liquidator or trustee for
either Party or of any property of a Party, and such receiver, liquidator or
trustee is not discharged within sixty (60) days;
(d) The entry of a decree adjudicating a Party bankrupt or
insolvent, and such decree is continued undischarged and unstayed for a period
of sixty (60) days;
(e) The filing of a voluntary petition in bankruptcy under any
provision of any federal or state bankruptcy law by a Party; or
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(f) The failure or refusal of the Producer to permit the
Company's representatives access to information, or to the Station, as necessary
for the Company to operate the Transmission System.
8.2 (a) Upon the occurrence of an event of default, the Party not in
default may give written notice of the default to the defaulting Party. Such
notice shall set forth, in reasonable detail, the nature of the default and,
where known and applicable, the steps necessary to cure such default. Except
with respect to a payment default as described in Section 8.1(a), the defaulting
Party shall have thirty (30) days following receipt of such notice either to (i)
cure such default, or (ii) commence in good faith all such steps as are
reasonable and appropriate to cure such default in the event such default
cannot, in the reasonable judgment of such non-defaulting Party, be completely
cured within such thirty (30) day period. With respect to the payment default
described in Section 8.1(a), the defaulting party shall have ten (10) days from
receipt of such default notice to cure such default.
(b) If the defaulting Party fails to cure such default or take
such steps as provided under subparagraph (a) above, this Agreement may be
terminated by written notice to the Party in default hereof. This Agreement
shall thereupon terminate and the non-defaulting Party may exercise all such
rights and remedies as may be available to it to recover damages, subject to
Article 18 of this Agreement, caused by such default.
(c) Upon the occurrence of any such event of default, the
non-defaulting Party shall be entitled (i) to commence an action to require the
defaulting Party to remedy such default and specifically perform its duties and
obligations hereunder in accordance with the terms and conditions hereof, and
(ii) to exercise such other rights and remedies as it may have at equity or at
law.
8.3 Notwithstanding anything in this Agreement to the contrary, the
Producer's failure to comply with the provisions of Sections 4.1 and 4.2 of this
Agreement shall constitute an event of default, and if such event of default is
reasonably likely to have an immediate and material adverse effect on the
Company or the Transmission System, (a) the Company shall have no obligation to
permit the Producer an opportunity to cure that event of default, and (b) the
Company shall have the right to take immediately all reasonable steps and/or to
exercise immediately all remedies available under this Agreement, or at law or
in equity, including the right to disconnect the Station from the Transmission
System, in order to cure such default, and (c) the Producer shall be liable to
the Company, despite the provisions of Section 18.0, for all damages, costs and
expenses incurred by the Company (including damages, costs, and expenses related
to a claim by a third party) as a result of such event of default.
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ARTICLE 9
INDEMNIFICATION
9.0 Indemnification.
9.1 Producer's Indemnification.
The Producer shall indemnify, hold harmless, and defend the
Company, its parent and its Affiliates, as the case may be, and their respective
officers, directors, employees, agents, contractors, subcontractors, invitees,
successors and permitted assigns from and against any and all claims,
liabilities, costs, damages, and expenses (including, without limitation,
reasonable attorney and expert fees, and disbursements incurred by any of them
in any action or proceeding between the Company and a third party or the
Producer) for damage to property, injury to or death of any person, including
the Company's employees or any third parties (collectively, "Company's
Damages"), to the extent caused wholly or in part by any act or omission,
negligent or otherwise, by the Producer and/or its officers, directors,
employees, agents, and subcontractors arising out of or connected with the
Producer's performance or breach of this Agreement, or the exercise by the
Producer of its rights hereunder. In furtherance of the foregoing
indemnification and not by way of limitation thereof, the Producer hereby waives
any defense it might otherwise have under applicable workers' compensation laws.
9.2 Company's Indemnification.
The Company shall indemnify, hold harmless, and defend the
Producer, its parent and its Affiliates, as the case may be, and their
respective officers, directors, employees, agents, contractors, subcontractors,
invitees, successors and permitted assigns from and against any and all claims,
liabilities, costs, damages, and expenses (including, without limitation,
reasonable attorney and expert fees, and disbursements incurred by any of them
in any action or proceeding between the Producer and a third party or the
Company) for damage to property, injury to or death of any person, including the
Producer's employees or any third parties (collectively, "Producer's Damages"),
to the extent caused wholly or in part by any act or omission, negligent or
otherwise, by the Company and/or their officers, directors, employees, agents,
contractors, subcontractors and invitees arising out of or connected with the
Company's performance or breach of this Agreement, or the exercise by the
Company of their rights hereunder. In furtherance of the foregoing
indemnification and not by way of limitation thereof, the Company hereby waives
any defense it might otherwise have under applicable workers' compensation laws.
9.3 Indemnification Procedures.
If either Party intends to seek indemnification under this
Article 9.0 from the other Party, the Party seeking indemnification shall give
the other Party notice of such claim within ninety (90) days of the commencement
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of, or the Party's actual knowledge of, such claim or action. Such notice shall
describe the claim in reasonable detail, and shall indicate the amount
(estimated if necessary) of the claim that has been, or may be sustained by,
said Party. To the extent that the other Party will have been actually and
materially prejudiced as a result of the failure to provide such notice, such
notice will be a condition precedent to any liability of the other Party under
the provisions for indemnification contained in this Agreement. Neither Party
may settle or compromise any claim without the prior consent of the other Party;
provided, however, said consent shall not be unreasonably withheld or delayed.
9.4 Survival. The indemnification obligations of each Party under this
Article 9.0 shall continue in full force and effect regardless of whether this
Agreement has either expired or been terminated or canceled.
ARTICLE 10
INSURANCE
10.0 Insurance.
10.1 The Parties agree to maintain, at their own cost and expense,
fire, liability, worker's compensation, and other forms of insurance relating to
their property and facilities in the manner, and amounts, and for the durations
set forth in Schedule B to this Agreement, as both Parties may, from
time-to-time, agree to amend.
10.2 The Parties agree to furnish each other with certificates of
insurance evidencing the insurance coverage set forth in Schedule B, and the
Parties agree to notify and send copies to the other of any policies maintained
hereunder written on a "claims made" basis. Each Party may require the other
Party to maintain tail coverage for five years on all policies written on a
"claims made" basis.
10.3 Every contract of insurance providing the coverages required in
Schedule B shall contain the following or equivalent clause: "no reduction,
cancellation or expiration of the policy shall be effective until ninety (90)
days from the date written notice thereof is actually received by said Party."
Upon receipt of any notice of reduction, cancellation or expiration, the Party
shall immediately notify the other Party in accordance with Article 19.
10.4 Each Party, and its Affiliates, shall be named as additional
insureds on the general liability insurance policies set forth in Schedule B as
regards liability under this Agreement.
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ARTICLE 11
FORCE MAJEURE
11.0 Force Majeure.
11.1 Notwithstanding anything in this Agreement to the contrary,
neither the Producer nor the Company shall be liable in damages, or otherwise
responsible to the other Party, for its failure to carry out any of its
obligations under this Agreement, other than any obligation to pay an amount
when due, if and only to the extent that it is unable to so perform or is
prevented from performing by an event of force majeure.
11.2 The term "force majeure" as used herein means those causes beyond
the reasonable control of the Party affected, which by the exercise of
reasonable diligence, including Good Utility Practice, that Party is unable to
prevent, avoid, mitigate, or overcome, including the following: any act of God,
labor dispute (including a strike), act of the public enemy, war, insurrection,
riot, fire, storm or flood, explosion, breakage or accident to machinery or
equipment, electric system disturbance, order, regulation or restriction imposed
by governmental, military or lawfully-established civilian authorities, or any
other cause of a similar nature beyond a Party's reasonable control.
11.3 If a Party shall rely on the occurrence of an event or condition
described above as a basis for being excused from performance of its obligations
under this Agreement, then the Party relying on the event or condition shall (a)
provide prompt written notice of such force majeure event to the other Party,
including an estimation of its expected duration and the probable impact on the
performance of its obligations hereunder; (b) exercise all reasonable efforts in
accordance with Good Utility Practice to continue to perform its obligations
under this Agreement; (c) expeditiously take action to correct or cure the event
or condition excusing performance, provided, however, that settlement of labor
disputes will be completely within the sole discretion of the Party affected by
such labor dispute; (d) exercise all reasonable efforts to mitigate or limit
damages to the other Party; and (e) provide prompt notice to the other Party of
the cessation of the event or condition giving rise to its excuse from
performance. All performance obligations hereunder shall be extended by a period
equal to the term of the resultant delay.
ARTICLE 12
DISPUTES
12.0 Disputes.
12.1 Any claim or dispute, which either Party may have against the
other, arising out of the Agreement shall be submitted in writing to the other
Party not later than sixty (60) days after the circumstances which gave rise to
the claim or dispute have taken place. The submission of any claim or dispute
32
shall include a concise statement of the question or issue in dispute, together
with relevant facts and documentation to fully support the claim.
12.2 If any such claim or dispute arises, the parties shall use their
best efforts to resolve the claim or dispute, initially through good faith
negotiations or upon the failure of such negotiations, through Alternative
Dispute Resolution ("ADR") techniques in accordance with the Model Procedure for
Mediation of Business Disputes as published by the Center for Public Resources;
however, either Party may terminate its participation in ADR during any stage of
ADR and proceed under section 12.3.
12.3 If any claim or dispute arising hereunder is not resolved pursuant
to section 12.2, either Party may, upon giving the other Party at least ten (10)
days prior written notice, initiate litigation to submit such claim or dispute
for decision by a court of competent jurisdiction.
ARTICLE 13
REPRESENTATIONS
13.0 Representations.
13.1 Representations of the Company. The Company represents and
warrants to the Producer as follows:
13.1.1 Organization. The Company is a corporation duly
organized, validly existing, and in good standing under the laws of the
Commonwealth of Pennsylvania, and the Company has the requisite corporate power
and authority to carry on its businesses as now being conducted;
13.1.2 Authority Relative to this Agreement. The Company has
the requisite power and authority to execute and deliver this Agreement and,
subject to the procurement of applicable regulatory approvals, to carry out the
actions required of each by this Agreement. The execution and delivery of this
Agreement and the actions it contemplates have been duly and validly authorized
by all required corporate action. The Agreement has been duly and validly
executed and delivered by the Company and, assuming that it is duly and validly
executed and delivered by the Producer, constitutes a valid and binding
Agreement of the Company;
13.1.3 Regulatory Approval. The Company has obtained
any and all approvals of, and given any notices to, any public authority that
are required for the Company to execute and deliver this Agreement;
13.1.4 Compliance With Law. The Company represent and
warrant that it is not in violation of any applicable law, statute, order, rule,
regulation or judgment promulgated or entered by any federal, state, or local
33
governmental authority, which violation would affect the Company's performance
of its obligations under this Agreement. The Company represent and warrant that
they will comply with all applicable material laws, rules, regulations, codes,
and standards of all federal, state, and local governmental agencies having
jurisdiction over the Company or the transactions under this Agreement.
13.2 Representations of the Producer. The Producer represents and
warrants to the Company as follows:
13.2.1 Organization. Each of CEI and FEAC is a corporation
duly organized, validly existing, and in good standing under the laws of Ohio,
and each of CEI and FEAC has the requisite corporate power and authority to
carry on its business as now being conducted;
13.2.2 Authority Relative to this Agreement. Each of CEI and
FEAC has the requisite power and authority to execute and deliver this Agreement
and, subject to the procurement of applicable regulatory approvals, to carry out
the actions required of it by this Agreement. The execution and delivery of this
Agreement and the actions it contemplates have been duly and validly authorized
by all required corporate action. This Agreement has been duly and validly
executed and delivered by each of CEI and FEAC and, assuming that it is duly and
validly executed and delivered by the Company, constitutes a valid and binding
Agreement of CEI and FEAC;
13.2.3 Regulatory Approval. Each of CEI and FEAC has
obtained any and all approvals of, and given any notices to, any public
authority that are required for CEI and FEAC to execute and deliver this
Agreement;
13.2.4 Compliance With Law. CEI and FEAC each represents and
warrants that it is not in violation of any applicable, law, statute, order,
rule, regulation or judgment promulgated or entered by any federal, state, or
local governmental authority, which violation would affect the performance by
CEI and FEAC of their obligations under this Agreement. CEI and FEAC represent
and warrant that they will comply with all applicable laws, rules, regulations,
codes, and standards of all federal, state, and local governmental agencies
having jurisdiction over CEI or FEAC or the transactions under this Agreement.
13.3 Representations of Both Parties. The representations and
warranties in Sections 13.1.4 and 13.2.4 shall continue in full force and effect
for the term of this Agreement.
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ARTICLE 14
ASSIGNMENT/CHANGE IN CORPORATE IDENTITY
14.0 Assignment/Change in Corporate Identity.
14.1 This Agreement and all of the provisions hereof shall be binding
upon, and inure to the benefit of, the Parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests, or obligations hereunder shall be assigned without the prior
written consent of the other Party; which consent shall not be unreasonably
withheld or delayed. Any assignment of this Agreement in violation of the
foregoing shall be, at the option of the non-assigning Party, void.
Notwithstanding the foregoing, (i) Producer may assign all of its rights and
obligations hereunder to any majority-owned subsidiary (direct or indirect)
which acquires all, or substantially all, of Producer's interest in the Station
and upon the Company's receipt of notice from Producer of any such assignment,
such assignee will be deemed to have assumed, ratified, agreed to be bound by
and perform all such obligations, and all references herein to "Producer" shall
thereafter be deemed to be references to such assignee, in each case without the
necessity for further act or evidence by the Parties hereto or such assignee,
and (ii) Producer or its permitted assignee may assign, transfer, pledge or
otherwise dispose of its rights and interests hereunder to a trustee or lending
institution for the purposes of financing or refinancing the Producer's
Generating Facilities, including upon or pursuant to the exercise of remedies
with respect to such financing or refinancing, or by way of assignments,
transfers, pledges, or other dispositions in lieu thereof, provided, however,
that no such assignment described in (i) and (ii) of this Section 14.1 shall
relieve or discharge the Assignor from any of its obligations hereunder. The
Company agrees to execute and deliver, at the Producer's expense, such documents
as may be reasonably necessary to accomplish any such assignment, transfer,
pledge, or other disposition of rights hereunder for purposes of the financing
or refinancing of the Producer's Generating Facilities, so long as the Company's
rights under this Agreement are not thereby altered, amended, diminished or
otherwise impaired.
14.2 No assignment, transfer, conveyance, or disposition of rights or
obligations under this Agreement by a Party shall relieve that Party from full
liability and financial responsibility for the performance thereof after any
such transfer, assignment, conveyance, or disposition unless and until the
transferee or assignee shall agree in writing to assume the obligations and
duties of that Party under this Agreement and the non-assigning Party has
consented in writing to such assumption and to a release of the assigning Party
from such liability.
14.3 If any of the Company, CEI or FEAC terminates its existence as a
corporate entity by merger, acquisition, sale, consolidation, or otherwise, or
if all or substantially all of such party's assets are transferred to another
person or business entity (a "Successor") without complying with this Article
35
14, the Company, in the case of such action having been taken by CEI or FEAC,
and the Producer, in the case of such action having been taken by the Company,
shall have the right, enforceable in a court of competent jurisdiction, to
enjoin the Successor from using the property in any manner that interferes with,
impedes, or restricts the other Party's ability to carry out its ongoing
business operations, rights, and obligations. Where applicable, the Company
shall have the right, as set forth in Section 3.2.2, to operate such equipment
set forth in Section 3.2.2 which is necessary for the Company to Maintain the
Transmission System.
ARTICLE 15
SUBCONTRACTORS
15.0 Subcontractors
15.1 Nothing in this Agreement shall prevent a Party from utilizing the
services of such subcontractors as it deems appropriate to perform its
obligations under this Agreement; provided, however, that each Party shall
require its subcontractors to comply with all applicable terms and conditions of
this Agreement in providing such services.
15.2 The creation of any subcontractor relationship shall not relieve
the hiring Party of any of its obligations under this Agreement. Each Party
shall be fully responsible to the other Party for the acts and/or omissions of
any subcontractor it hires as if it itself had acted and/or omitted to act. Any
applicable obligation imposed by this Agreement upon a Party shall be equally
binding upon, and shall be construed as having application to, any subcontractor
of such Party.
ARTICLE 16
LABOR RELATIONS
16.0 Labor Relations.
The Company and the Producer agree to immediately notify the other
Party, verbally and then in writing, of any labor dispute or anticipated labor
dispute of which its management has actual knowledge that might reasonably be
expected to affect the operations of the other Party with respect to this
Agreement.
ARTICLE 17
INDEPENDENT CONTRACTOR STATUS
17.0 Independent Contractor Status.
Nothing in this Agreement shall be construed as creating any
relationship between the Company and the Producer other than that of independent
contractors.
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ARTICLE 18
LIMITATION OF LIABILITY
18.0 Limitation on Damages.
Except for indemnity obligations set forth in Article 9 and as set
forth in Section 8.3, neither the Company nor the Producer, nor their respective
officers, directors, agents, employees, parents, affiliates, or successors or
assigns of any of them, shall be liable to the other Party or its parent,
subsidiaries, affiliates, officers, directors, agents, employees, successors or
assigns for claims, suits, actions or causes of action for incidental, punitive,
special, indirect, multiple or consequential damages (including, without
limitation, attorneys' fees or litigation costs) connected with, or resulting
from, performance or non-performance of this Agreement, or any actions
undertaken in connection with or related to this Agreement, including, without
limitation, any such damages which are based upon causes of action for breach of
contract, tort (including negligence and misrepresentation), breach of warranty
or strict liability. The provisions of this Section 18.0 shall apply regardless
of fault and shall survive termination, cancellation, suspension, completion, or
expiration of this Agreement.
ARTICLE 19
NOTICES
19.0 Notices.
19.1 On or prior to the Closing Date, each Party shall indicate to the
other Party, by notice, the appropriate person and their telephone numbers
during each eight-hour work shift to contact in the event of an Emergency, a
scheduled or forced interruption, or reduction in services. The notice last
received by a Party shall be effective until modified in writing by the other
Party.
19.2 All notices, requests, claims, demands, invoices, and other
communications hereunder shall be in writing and shall be given (and except as
otherwise expressly provided herein, will be deemed to have been duly given if
so given) by hand delivery, cable, telecopy (confirmed in writing) or telex, or
by mail (registered or certified, postage prepaid) to the respective Parties as
follows:
If to the Company:
GPU Energy
0000 Xxxxxxxxxx Xxxx
X.X.Xxx 00000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx
Phone (000) 000-0000
Fax: (000) 000-0000
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If to the Producer:
FirstEnergy Corp.
00 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000
Attention: Xxx X. Xxxxxxxx
Vice President, Fossil Generation
Telecopier: 000-000-0000
with a copy to:
Xxxxx X. Xxxxxxx, Esq.
Associate General Counsel
FirstEnergy Corp.
00 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000
Telecopier: 000-000-0000
or such other address as is furnished in writing by such Party; and any such
notice or communication shall be deemed to have been given as of the date so
mailed.
ARTICLE 20
HEADINGS
20.0 Headings.
The descriptive headings of the Articles and Sections of this Agreement
have been inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement.
ARTICLE 21
WAIVER
21.0 Waiver.
Except as otherwise provided in this Agreement, any failure of a Party
to comply with any obligation, covenant, agreement, or condition herein may be
waived by the Party entitled to the benefit thereof only by a written instrument
signed by such Party granting such waiver, but such waiver shall not operate as
a waiver of, or estoppel with respect to, any subsequent failure of the first
Party to comply with such obligation, covenant, agreement, or condition.
ARTICLE 22
COUNTERPARTS
22.0 Counterparts.
This Agreement may be executed in two or more counterparts, all of
which will be considered one and the same Agreement.
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ARTICLE 23
GOVERNING LAW AND CONSTRUCTION
23.0 Governing Law and Construction..
23.1 Laws and Regulations.
This Agreement and all rights, obligations, and performances
of the Parties hereunder, are subject to all applicable federal and state laws,
and to all duly-promulgated orders and other duly-authorized action of
governmental authorities having jurisdiction.
23.2 When not in conflict with or preempted by federal law, this
Agreement will be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania without giving effect to the conflict of law
principles thereof. Except for those matters covered in this Agreement and
jurisdictional to FERC or the appellate courts having jurisdiction over FERC
matters, any action arising out of or concerning this Agreement must be brought
in the courts (state or federal) of the Commonwealth of Pennsylvania. Both
Parties hereby consent to the exclusive jurisdiction of the Commonwealth of
Pennsylvania for the purpose of hearing and determining any action not preempted
by federal law.
ARTICLE 24
SEVERABILITY
24.0 Severability.
In the event that any of the provisions of this Agreement are held to
be unenforceable or invalid by any court or regulatory authority of competent
jurisdiction, the Parties shall, to the extent possible, negotiate an equitable
adjustment to the provisions of this Agreement, with a view toward effecting the
purpose of this Agreement, and the validity and enforceability of the remaining
provisions hereof shall not be affected by such holding.
ARTICLE 25
AMENDMENT
25.0 Amendments.
25.1 Except as provided in Article 2:
25.1.1 The rates, terms, and conditions contained in this
Agreement are not subject to change under Sections 205 or 206 of the Federal
Power Act, as either section may be amended or superseded, absent the mutual
written agreement of the Parties. It is the intent of this Section 25.1 that, to
the maximum extent permitted by law, the rates, terms and conditions in this
39
Agreement shall not be subject to change, regardless of whether such change is
sought (a) by the FERC acting sua sponte on behalf of a Party or third party,
(b) by a Party, (c) by a third party, or (d) in any other manner.
25.1.2 This Agreement may be amended, modified, or
supplemented only by written agreement of both the Company and the Producer.
ARTICLE 26
ENTIRE AGREEMENT
26.0 Entire Agreement.
This Agreement constitutes the entire understanding between the Parties
with respect to the subject matter hereof or thereof, and supersedes any and all
previous understandings, oral or written, which pertain to the subject matter
contained herein or therein.
ARTICLE 27
NO THIRD PARTY BENEFICIARIES
27.0 No Third Party Beneficiaries.
Nothing in this Agreement, express or implied, is intended to confer on
any person, other than the Parties, any rights or remedies under or by reason of
this Agreement.
ARTICLE 28
CONFLICTS
28.0 Conflicts.
Notwithstanding any provision of this Agreement to the contrary, this
Agreement shall not affect any of the Producer's rights and obligations under
(a) the PJM Tariff, and related agreements, (b) the Sublicense Agreements, (c)
applicable FERC orders, regulations or policy, or (d) the Facilities Agreement
(such agreements, orders, regulations, and tariffs referred to collectively as
the "Ancillary Documents"). In the event of a conflict between any provision of
this Agreement and any provision of one or more Ancillary Documents, which
conflict is not permissible or has not been waived by the appropriate regulatory
agency, the provision of the Ancillary Document shall control.
40
ARTICLE 29
FURTHER ASSURANCES
29.0 Further Assurances.
The Parties hereto agree to execute and deliver promptly, at the
expense of the Party requesting such action, any and all other and further
information, instruments and documents that may be reasonably requested in order
to effectuate the transactions contemplated hereby.
41
IN WITNESS WHEREOF, the Parties have caused their authorized
representatives to execute this Agreement as of the date first above written.
Pennsylvania Electric Company d/b/a/ GPU Energy
Name:
Title:
FE Acquisition Corp.
Name:
Title:
The Cleveland Electric Illuminating Company
-------------------------------------
Name:
Title:
42
Schedule B
Insurance Requirements
1. The Producer shall keep the Station and the Company shall keep the
Company Interconnection Facilities continuously insured against loss or damage
in amounts and for risks that property of similar character is usually so
insured by entities owning and operating like properties.
2. The Company and the Producer, or the operator of the Station (if
other than the Producer) and their respective successors and assigns shall
procure or cause to be procured and shall maintain in effect continuously during
the term of this Agreement the following minimum insurance coverages:
Type of Coverage Liability Limits
---------------- ----------------
Worker's Compensation Statutory
Employer's Liability $500,000 per occurrence/injury
Comprehensive/General $1,000,000 combined single limit,
Liability including: each occurrence $2,000,000
aggregate limit applicable
for the Facility
Bodily Injury
Property Damage
Blanket Contractual
Underground Explosion and
Collapse Hazard
Products and Completed
Operations Hazard
Board Form Property Damage
Personal Injury
Automobile Liability
B-1
(Owned, Hired, Non-Owned) $1,000,000 combined
Bodily Injury single limit
Property Damage
Commercial Umbrella Liability $9,000,000 per occurrence
following the form of
Commercial General Liability,
Automobile Liability and
Employers Liability
3. All insurance policies identified in paragraph 2, except Worker's
Compensation Insurance, shall name the other Party as additional insureds.
4. Each Party shall provide, and shall continue to provide to the other
Party, during the term of the Agreement (including any extensions), by
delivering to its corporate office at:
FOR PRODUCER: FirstEnergy Corp.
00 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000
Attention: Xxx X. Xxxxxxxx
Vice President, Fossil Generation
Telecopier: 000-000-0000
with a copy to:
Xxxxx X. Xxxxxxx, Esq.
Associate General Counsel
FirstEnergy Corp.
00 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000
Telecopier: 000-000-0000
FOR COMPANY: GPU Energy
0000 Xxxxxxxxxx Xxxx
X.X. Xxx 00000
Xxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx
B-2
properly executed and current certificates of insurance relative to insurance
policies. Certificates of insurance shall provide the following information:
(a) Name of insurance company, policy number and expiration
date;
(b) The coverage required and the limits on each, including
the amount of deductibles or self-insured retentions.
(c) A statement indicating that the other Party shall receive
at least thirty (30) days prior written notice of cancellation or reduction of
liability limits with respect to said insurance policies; and
(d) To the extent applicable, a statement indicating that
the other Party have been named as an additional insured.
7. A copy of each insurance policy, certified as a true copy by an
authorized representative of the issuing insurance company, or in lieu thereof
or in addition thereto, at the Company's discretion, a certificate in form
satisfactory to the Company certifying to the issuance of such insurance, shall
be furnished to the Company not less than ten (10) days prior to the
interconnection of the Station and fifteen (15) days prior to the expiration
date of each such policy and/or certificate.
8. Each Party shall have the right to inspect the original policies of
insurance applicable to this Agreement at the other Party's place of business
during regular business hours.
B-3