Exhibit 2.1
May 24, 2007
James C. Fleming, Esq.
Executive Vice President and General Counsel
Wisconsin Electric Power Company
231 West Michigan Street
Milwaukee, Wisconsin 53203
Dear Jim:
Reference is made to the Asset Sale Agreement among Wisconsin Electric Power Company (WEPCO), FPL Energy Point Beach, LLC (FPLE-PB), and FPL Group Capital, Inc. dated December 19, 2006 (ASA). Capitalized terms used and not otherwise defined in this letter shall have the respective meanings ascribed to such terms in the ASA.
This letter confirms our understanding and agreement regarding changes to certain terms of the ASA.
The Parties anticipate that the IRS will grant, prior to the Closing Date, a private letter ruling that will include a ruling in substance determining that, if WEPCO transfers less than 100 percent of the assets of Seller's Qualified Decommissioning Fund to Buyer or Buyer's Nonqualified Decommissioning Fund, the IRS will exercise its discretion under Treas. Reg. section 1.468A-5(c)(1) to disqualify the Seller's Qualified Decommissioning Fund in its entirety as of the Closing Date or immediately prior to any transfer of assets of Seller's Qualified Decommissioning Fund to Buyer or the Buyer's Nonqualified Decommissioning Fund (the "Alternate Requested Ruling").
For purposes of this letter, the term "Nonqualified Decommissioning Fund" shall mean the external trust fund that does not meet the requirements of Code Section 468A or Treas. Reg. 1.468A-5, maintained by the Seller with respect to the Facilities prior to Closing pursuant to Seller's Decommissioning Trust Agreement or that is maintained by the Buyer with respect to the Facilities after Closing pursuant to Buyer's Post-Closing Decommissioning Trust Agreement.
The Parties hereby agree that if the Alternate Requested Ruling is obtained prior to the Closing Date, Seller shall have the option of proceeding under the Alternate Requested Ruling. Seller shall notify Buyer in writing at least 10 days prior to the Closing Date of its intent to exercise this option. In the event that the Alternate Requested Ruling is obtained and Seller exercises this option:
- Seller shall transfer to the Trustee, on the Closing Date, under the Post-Closing Decommissioning Trust Agreement an amount equal to the "Decommissioning Target." For purposes of this letter, the "Decommissioning Target" means the greater of: (a) an amount equal