POWER PURCHASE AGREEMENT
BETWEEN
ENTERGY NUCLEAR GENERATION COMPANY
AND
MONTAUP ELECTRIC COMPANY
FOR PILGRIM NUCLEAR POWER STATION
TABLE OF CONTENTS
ARTICLE 1. Definitions 1
ARTICLE 2. Purchase and Sale of Installed Capability,
Operable Capability and Energy 3
ARTICLE 3. Term, Termination 4
ARTICLE 4. Purchase Rate for Installed Capability,
Operable Capability and Energy 4
ARTICLE 5. Dispatch 5
ARTICLE 6. Billing, Meter Reading 5
ARTICLE 7. Limitation of Liability; Indemnification;
Insurance; Relationship of Parties 7
ARTICLE 8. Miscellaneous Provisions 7
ARTICLE 9. Assignment 8
ARTICLE 10. Force Majeure 9
ARTICLE 11. Default 9
ARTICLE 12. Governing Law, Dispute Resolution 10
ARTICLE 13. Waiver 10
ARTICLE 14. Corporate Authorization 11
ARTICLE 15. Notice 11
POWER PURCHASE AGREEMENT
BETWEEN
ENTERGY NUCLEAR GENERATION COMPANY
AND
MONTAUP ELECTRIC COMPANY
AGREEMENT entered into this 18th day of November 1998 by and between
Entergy Nuclear Generation Company , a Delaware corporation (hereafter referred
to as "Seller"), and Montaup Electric Company, a Massachusetts corporation
having its principal place of business at W. Bridgewater, Massachusetts 02379,
(hereafter referred to as "Company").
WHEREAS, Seller wishes to purchase from Boston Edison Company ("Boston
Edison") the specific generating facility known as Pilgrim Nuclear Power
Station (the "Facility"), pursuant to the terms of a certain Purchase and Sale
Agreement dated November 18, 1998 by and between Boston Edison and Seller (the
"Purchase and Sale Agreement"); and
WHEREAS, Company contemplates that in connection with such purchase by Seller
it will be necessary to terminate Company's rights and obligations under a
certain power sale agreement with Boston Edison initially entered into on
August 1, 1972, which provides for the sale of power from the Facility by
Boston Edison to Company (the "Power Sale Agreement"); and
WHEREAS, Company and Boston Edison have agreed to amend the Power Sale
Agreement in order to effectuate such termination pursuant to the terms of the
Third Amendment to the Power Sale Agreement dated November 18, 1998 by and
between Company a nd Boston Edison ("Third Amendment"); and
WHEREAS, as a condition to, and upon such termination and the closing
of, the sale of the Facility to Seller, Seller wishes to sell to Company and
Company wishes to purchase from Seller Installed Capability, Operable
Capability and Energy fro m the Facility;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, Seller and Company hereby agree as follows:
ARTICLE 1. Definitions
When used with initial capitalizations, whether in the singular or in
the plural, the following terms shall have the meanings set forth below.
(a) Agreement: This document, including its appendices, as amended
from time to time.
(b) Capability Audit: The procedure used pursuant to the NEPOOL
Agreement to determine the Summer Net Capability and the Winter
Net Capability of the Facility as currently set forth in the
NEPOOL Standards.
(c) Company's Entitlement: The percentage specified below of the
Installed Capability, Operable Capability and Energy of the
Facility for the applicable calendar years.
1999 11.00000%
2000 11.00000%
2001 11.00000%
2002 8.80000%
2003 5.50000%
2004 5.50000%
(d) Energy: The actual hourly electricity production of the
Facility adjusted for station service use and transformer
losses.
(e) Delivery Point: The point where capacity and energy generated
by the Facility is delivered to the Pool Transmission
Facilities, as defined by the NEPOOL Agreement.
(f) Facility: The Pilgrim Nuclear Power Station, a 670 MW nuclear
generating facility located in Plymouth, Massachusetts.
(g) FERC: The Federal Energy Regulatory Commission.
(h) Installed Capability: The Winter Net Capability during the
Winter Period and the Summer Net Capability during the Summer
Period.
(i) ISO-NE: The Independent System Operator of New England
provided for in the NEPOOL Agreement, or its successor.
(j) MDTE: The Massachusetts Department of Telecommunications and
Energy.
(k) NEPOOL: The New England Power Pool, established by the NEPOOL
Agreement, or its successor.
(l) NEPOOL Agreement: The agreement, dated September 1, 1971, as
amended from time to time, governing the operation of NEPOOL,
as in full force and effect.
(m) NEPOOL Standards: All Criteria, Rules and Standards (CRS),
NEPOOL Automated Billing System Procedures (NABS), Operating
Procedures (OP), and Market Rules (MR) issued or adopted by
NEPOOL, ISO-NE and its satellite agencies, or their successors,
as amended from time to time and all successor regulations,
rules and standards.
(n) Operable Capability: The portion of Installed Capability of
the Facility which is operating or available to respond within
an appropriate period (as defined by NEPOOL) to the ISO-NE call
to meet the Energy requirements of the NEPOOL operating area.
(o) Party: Seller or Company and its respective successors or
assigns.
(p) Prime Rate: That rate as announced by BankBoston (or its
successor) as its prime rate in effect on the first day of the
month.
(q) Prudent Utility Practice: Any practices, methods and acts
engaged in or approved by a significant portion of the electric
utility industry during the relevant time period, or any of the
practices, methods and acts which, in the exercise of
reasonable judgment in light of facts known at the time the
decision was made, could have been expected to accomplish the
desired result at a reasonable cost consistent with good
business practices, reliability, safety and expedition and
giving due regard for the requirements of governmental agencies
having jurisdiction. Prudent Utility Practice is not intended
to be limited to the optimum practice, method, or act to the
exclusion of all others, but rather to be acceptable practices,
methods, or acts generally accepted in the electric utility
industry.
(r) Summer Net Capability (Capability): The Maximum Claimed
Capability, as defined in NEPOOL CRS - 4 , of the Facility
during the Summer Period, expressed in kilowatts, and as
determined by Capability Audit, exclusive of the capacity
required for Facility use.
(s) Summer Period: Summer Period shall have the meaning set forth
in the NEPOOL Agreement.
(t) Winter Net Capability (Capability): The Maximum Claimed
Capability, as defined in NEPOOL CRS - 4 , of the Facility
during the Winter Period, expressed in kilowatts, and as
determined by Capability Audit, exclusive of the capacity
required for Facility use.
(u) Winter Period: Winter Period shall have the meaning set forth
in the NEPOOL Agreement.
ARTICLE 2. Purchase and Sale of Installed Capability, Operable Capability
and Energy
(a) Seller agrees to sell and to deliver and Company agrees to
purchase and to accept delivery of the Company's Entitlement at
the Delivery Point, for Company's own use and/or sale to others
for the term of this Agreement.
(b) Seller shall use Prudent Utility Practices in all aspects of
the management and operation of the Facility. Seller shall use
commercially reasonable efforts to maintain the Facility's
Installed Capability at the level demonstrated by the most
recent Capability Audit at the time of the Purchase and Sale
Agreement and use its commercially reasonable efforts to make
Energy and Operable Capability available to Company on an
ongoing basis. Notwithstanding the foregoing, Seller may
permanently retire the Facility upon 30 days written notice to
the Company, at which time this Agreement will terminate.
(c) Periodically after the execution of this Agreement, Seller
shall undergo Capability Audits pursuant to NEPOOL Standards to
demonstrate and audit the Summer Net Capability and/or the
Winter Net Capability of the Facility. The Capability Audit
shall be performed pursuant to NEPOOL Standards or standards
mutually agreed to by the Parties if NEPOOL ceases to establish
such standards. Seller agrees to provide to Company the
results of the demonstrations and audits (NX-17s and supporting
material).
(d) Seller shall schedule maintenance activities in accordance with
NEPOOL Standards. As soon as practically possible, Seller
shall provide advance notice of planned maintenance activities
and unplanned outages by telephone or telecopy to Company's
designated agent.
ARTICLE 3. Term, Termination
The obligations of the Parties under this Agreement shall
commence on the Effective Date as defined in the Third Amendment and, subject
to the termination provisions set forth in this Agreement, shall continue
through December 31, 2004. In addition, applicable provisions of this
Agreement shall remain in effect after termination hereof, including Article 7
and provisions necessary to provide for final billings, billing adjustments,
and payments.
ARTICLE 4. Purchase Rate for Installed Capability, Operable Capability and
Energy
(a) Company shall pay Seller monthly (on a $/Mwh basis) for
Installed Capability, Operable Capability and Energy, according
to the following formula:
TMAt = Pt x Ut
where:
TMAt = Total monthly amount due in month (t)
Pt = The Purchase price expressed in $/Mwh
= 35.00 $/Mwh for all the months in the year 1999
= 38.00 $/Mwh for all the months in the year 2000
= 35.19 $/Mwh for all the months in the year 2001
= 38.89 $/Mwh for all the months in the year 2002
= 43.52 $/Mwh for all the months in the year 2003
= 47.22 $/Mwh for all the months in the year 2004
Ut = The Energy portion of the Company's Entitlement delivered to
Company in month (t) expressed in megawatthours.
ARTICLE 5. Dispatch
(a) Seller shall make the Facility available for dispatch by ISO-
NE.
(b) Seller shall comply with all NEPOOL Standards applicable to
Seller.
(c) Seller shall submit all forms to ISO-NE with a copy to Company.
(d) Seller's and Company's designated agent shall mutually agree to
any revision to the existing ISO-NE NX-12B Forms to be
submitted to ISO-NE in accordance with the provisions of the
NEPOOL Agreement and NEPOOL Standards.
(e) Whenever Company's system or the systems with which it is
directly interconnected experience an emergency, as designated
by the affected utility, or whenever it is necessary to aid in
the restoration of service on Company's system or on the
systems with which it is directly or indirectly interconnected,
or, whenever requested by ISO-NE, Seller or its designee shall
curtail or interrupt the delivery of all or a portion of the
production of electricity at the Facility provided such
curtailment or interruption shall continue only for as long as
reasonably necessary to deal with the emergency.
(f) Whenever Seller's Facility experiences an emergency, Seller or
its designee shall have the right to curtail or interrupt all
or a portion of Seller's obligation hereunder, provided such
curtailment or interruption shall continue only for so long as
reasonably necessary to deal with the emergency, and provided
Seller promptly notifies Company of the occurrence of such an
emergency.
ARTICLE 6. Billing, Meter Reading
(a) Seller shall deliver Company's Entitlement to the Delivery
Point. Seller is responsible for maintaining metering and
telemetering equipment at the Facility. The metering equipment
shall be capable of registering and recording instantaneous,
and time-differentiated electric energy and other related data
from the Facility, and shall comply with the requirements of
NEPOOL's Standards as may be issued or revised from time to
time. The telemetering shall be capable of transmitting such
data to location(s) specified by Company.
(b) Each day, Seller shall be required to provide Company with
hourly integrated megawatt hour readings for each hour of the
previous day. Seller shall record hourly meter readings and
log sheets and, upon Company's request, provide copies of daily
meter recordings and log sheets by electronic means with hard
copy back-up. All metering equipment installed shall be
routinely tested in accordance with Prudent Utility Practice.
Any meter tested and found to register within one-half o f one
percent (0.5%) of the recognized comparative standard shall be
considered correct and accurate. If at any time, any metering
equipment is found to be defective or inaccurate, Seller shall
cause such metering equipment to be made accurate or re placed
at Seller's expense. Notwithstanding subarticle (e) below, in
such event, a billing adjustment shall be made by Seller
correcting all measurements made by the defective meter for
either: (i) the actual period during which inaccurate
measurements were made, if such period is determinable to the
mutual satisfaction of the Company and Seller; or (ii) if such
period is not determinable, for a period equal to one-half the
time elapsed since the prior test, but in no event greater than
six months.
(c) Seller shall submit, by telecopy or other agreeable same day
delivery mechanism, an invoice for all applicable Article 4
charges to Company as soon as practicable after the end of each
calendar month that shall include the time and date of the
meter readings. This invoice shall include such reasonable
detail to enable the Company to determine the basis for the
charges of such month. Seller and Company agree to provide
additional information reasonably requested by the other Party
as necessary for billing purposes or data verification.
Invoices may be rendered on an estimated basis. Each invoice
shall be subject to adjustment for any errors in arithmetic,
computing, estimating or otherwise. Seller and Company shall
include any such invoicing adjustments as promptly as
practicable.
(d) All payments shown to be due on such invoice, except amounts in
dispute, shall be due and payable as shown on the invoice.
Company shall pay by wire transfer per instructions on the
invoice on or before ten (10) days after receipt of the
invoice.
(e) Any undisputed amounts unpaid after the Due Date shall bear
interest at a rate equal to the Prime Rate then in effect on
the Due Date, compounded on a monthly basis. Company may
dispute all or any part of any invoice by written notification
to Seller within 30 days of receipt of such invoice. All
amounts paid by the Company which are subsequently determined
to have been improperly invoiced by Seller under this Agreement
shall be subject to refund with interest at a rate equal t o
the Prime Rate then in effect on the Due Date, compounded on a
monthly basis.
(f) Seller shall keep complete and accurate records and meter
readings of its operations and shall maintain such data for a
period of at least one (1) year after invoice for the final
billing is rendered. Company shall have the right, upon five
(5) business days prior notice, during normal business hours,
to examine and inspect all such records and meter readings in
so far as may be necessary for the purpose of ascertaining the
reasonableness and accuracy of all relevant data, estimates or
statements of charges submitted to it hereunder but shall not
impair or interfere with the operation of the Facility owned by
Seller.
ARTICLE 7. Limitation of Liability; Indemnification; Insurance;
Relationship of Parties
(a) Notwithstanding subarticle (b) hereof or any other provision
of this Agreement to the contrary, neither Company nor Seller
nor their respective officers, directors, agents, employees,
parent, subsidiaries or affiliates or their officers,
directors, agents or employees shall be liable or responsible
to the other Party or its parent, subsidiaries, affiliates,
officers, directors, agents, employees, successors or assigns,
or their respective insurers, for incidental, indirect,
exemplary, punitive or consequential damages, connected with or
resulting from performance or non-performance of this
Agreement, or anything done in connection therewith including,
without limitation, claims in the nature of lost revenues,
income or profits (other than payments expressly required and
properly due under this Agreement), and increased expense of,
reduction in or loss of power generation production or
equipment used therefor, irrespective of whether such claims
are based upon breach of warranty, tort (including negligence,
whether of Seller, Company or others), strict liability,
contract, operation of law or otherwise, but excluding acts of
gross negligence or willful misconduct.
(b) Each Party (the "Indemnifying Party") shall defend, indemnify
and save the other Party (the "Indemnified Party"), its
officers, directors, agents, employees and affiliates and their
respective officers, directors, agents and employees harmless
from and against any and all claims, liabilities, demands,
judgments, losses, costs, expenses (including reasonable
attorneys' fees), suits, or damages arising by reason of bodily
injury, death or damage to third party property sustained by
any person or entity (whether or not a party to this Agreement)
caused by or attributable to a breach of this Agreement by the
Indemnifying Party or an action of gross negligence or willful
misconduct of the Indemnifying Party or an officer, direct or,
agent or employee of Indemnifying Party.
(c) Seller shall maintain insurance coverage at its sole expense.
(d) The rights, obligations and protections afforded by subarticles
(a) and (b) above shall survive the termination, expiration or
cancellation of this Agreement, and shall apply to the full
extent permitted by law.
(e) Nothing in this Agreement shall be construed as creating any
relationship between the Parties other than that of independent
contractors for the sale and purchase of Installed Capability,
Operable Capability and Energy generated at the Facility. The
Parties do not intend to create any rights, or grant any
remedies to, any third party beneficiary of this Agreement.
ARTICLE 8. Miscellaneous Provisions
(a) The Parties hereto agree that time shall be of the essence of
this Agreement.
(b) This Agreement may not be modified or amended except in writing
signed by or on behalf of both Parties by their duly authorized
officers, and if applicable, after obtaining any required
regulatory approvals.
(c) It shall be the responsibility of Seller to take all necessary
actions to satisfy any regulatory requirements which may be
imposed on Seller by any statute, rule or regulation concerning
the sale of Installed Capability, Operable Capability and
Energy. Company shall cooperate with Seller and provide
information or such other assistance, without cost to Company,
as may be reasonably necessary for Seller to satisfy regulatory
requirements relating specifically and only to the sale of
Installed Capability, Operable Capability and Energy from the
Facility. Seller shall cooperate with Company and provide
information or such other assistance, without cost to Seller,
as may be reasonably necessary for Company to satisfy
regulatory requirements relating specifically and only to the
purchase of Installed Capability, Operable Capability and
Energy from the Facility.
(d) Notwithstanding subarticle (c) above, Seller agrees to provide,
at no cost to Company, all necessary forms, data, and other
information reasonably requested of Company by ISO-NE, NEPOOL,
or any governmental or regulatory agency or authority having
jurisdiction.
ARTICLE 9. Assignment
(a) Neither Party shall have the right to assign this Agreement or
its rights or obligations hereunder without the express written
consent of the other Party. Such consent shall not be
unreasonably withheld. No assignment shall be effective until
any and all necessary regulatory approvals of the assignment
have been obtained.
(b) Notwithstanding the provisions in Section 9(a) above:
(i) Seller may assign this Agreement to any affiliate to
whom the Facility is transferred, without the Company's
prior consent; provided that Seller shall not be
released from liability hereunder without the Company's
prior written consent.
(ii) Seller may collaterally assign its rights in this
Agreement to its lenders.
(iii) The Company has the right to assign or transfer all of
its rights and obligations under this Agreement,
without the consent of Seller, provided that Company
shall first provide Seller with thirty (30) days prior
written notice of the proposed assignment or transfer
and documentary evidence of the assignee's or
transferee's financial capacity to satisfy any and all
obligations so assigned; and provided further that such
documentary evidence may be that such assignee or
transferee has a current agency report indicating an
investment grade rating from any two of the following:
Standard & Poor's, Moody's, Duff & Phelps, or Fitch.
Any assignment or transfer by the Company shall include
an explicit requirement that the assignee or transferee
agrees to undertake each and every obligation that the
Company has under this Agreement. The Seller
understands and acknowledges that the Company intends
to assign or transfer all of its rights and obligations
under this Agreement.
ARTICLE 10. Force Majeure
(a) If either Party is rendered wholly or partly unable to perform
its obligations under this Agreement because of a Force Majeure
event, that Party shall be excused from whatever performance is
affected by the Force Majeure event to the extent so affected,
provided that the non-performing Party shall: (i) provide
prompt notice to the other Party of the occurrence of the Force
Majeure event giving an estimation of its expected duration and
the probable impact on the performance of it s obligations
hereunder and submitting good and satisfactory evidence of the
existence of the Force Majeure event; (ii) exercise all
reasonable efforts to continue to perform its obligations
hereunder; (iii) expeditiously take action to correct or cure
the Force Majeure event and submit good and satisfactory
evidence that it is making all reasonable efforts to correct or
cure the Force Majeure event; (iv) exercise all reasonable
efforts to mitigate or limit damages to the other Party to the
extent such action shall not adversely effect its own
interests; and (v) provide prompt notice to the other Party of
the cessation of the Force Majeure event; provided further that
any obligations of either Party which arose before the
occurrence of the Force Majeure event causing non-performance
shall not be excused as a result of the occurrence of a Force
Majeure event.
(b) "Force Majeure" means the failure or imminent threat of failure
of facilities or equipment, flood, freeze, earthquake, storm,
fire, lighting, other acts of God, epidemic, war, acts of a
public enemy, riot, civil disturbance or disobedience, strike,
lockout, work stoppages, other industrial disturbance or
dispute, sabotage, restraint by court order or other public
authority, and action or non-action by, or failure or inability
to obtain the necessary authorizations or approvals from, any
governmental agency or authority, which by the exercise of due
diligence such Party could not reasonably have been expected to
avoid and by exercise of due diligence its effect can not be
overcome. Nothing contained herein shall be construed so as to
require the Parties to settle any strike, lockout, work
stoppage or any industrial disturbance or dispute in which it
may be involved, or to seek review of or take an appeal from
any administrative or judicial action. In no event shall the
lack of funds or an inability to obtain funds or any action by
any governmental authority that disallows, prevents or limits
the recovery through rates of all or any portion of the charges
imposed by this Agreement be a Force Majeure event.
ARTICLE 11. Default
(a) "Event of Default" shall mean in relation to a Party (the
"Defaulting Party"):
(i) the Defaulting Party fails to perform any of its
material obligations hereunder, and such failure is not
excused by Force Majeure and continues for thirty (30)
days after the Defaulting Party receives written notice
from the Non-Defaulting Party of such failure;
provided, however, if a period in excess of thirty (30)
days is required to cure such failure, the Defaulting
Party shall have an additional amount of time, not to
exceed 180 days, as may be necessary to cure such
failure, provided t hat the Defaulting Party uses
reasonable diligence to remedy such failure and
provided further that, the foregoing "cure" provisions
shall not apply to: y) failure by Company to make
payments to Seller pursuant to Article 6, or z) failure
by Seller to make available and deliver Company's
Entitlement; or
(ii) the Defaulting Party makes an assignment or general
arrangement for the benefit of creditors, files a
petition, or otherwise commences any proceeding, in
bankruptcy or under similar law, otherwise becomes
bankrupt (however evidenced) or is unable to pay its
debts as they fall due.
(b) Upon an Event of Default, the Non-Defaulting Party may resort
to all remedies available at law or in equity, including,
without limitation: (i) the termination of service; (ii)
specific enforcement of the provisions of this Agreement ;
and/or (iii) the recovery of damages except to the extent such
damages are waived or limited pursuant to this Agreement.
ARTICLE 12. Governing Law, Dispute Resolution
(a) The interpretation and performance of this Agreement shall be
in accordance with, and controlled by the law of, the
Commonwealth of Massachusetts, notwithstanding its conflicts of
law's principles.
(b) If any dispute, disagreement, claim or controversy exists
between Seller and Company arising out of or relating to this
Agreement, such disputed matter shall be submitted to a
committee comprised of one designated agent of each Party.
Such committee shall be instructed to attempt to resolve the
matter within twenty (20) days thereafter. If Company's and
Seller's designees do not agree upon a decision within thirty
(30) days after the submission of the matter to them, either
Party may institute formal legal proceedings.
ARTICLE 13. Waiver
The failure of either Party to require compliance with any provision of
this Agreement shall not affect that Party's right to later enforce the same.
It is agreed that the waiver by either Party of performance of any of the terms
of this Agreement, or of any breach thereof, shall not be held or deemed to be
a waiver by that Party of any subsequent failure to perform the same, or any
other term or condition of this Agreement, or of any breach thereof.
ARTICLE 14. Corporate Authorization
Prior to or simultaneous with the Effective Date of this Agreement, the
Parties shall provide sufficient evidence to each other that each has the legal
power and authority to perform this Agreement, that their respective officers
executing this Agreement have been duly authorized to do so and that this
Agreement, upon execution and delivery, shall be legally binding and
enforceable.
ARTICLE 15. Notice
Except as otherwise provided herein, any notice, invoice or other
communication which is required or permitted by this Agreement shall be in
writing and delivered by personal service, telecopy, or mailed certified or
registered first class mail, postage prepaid, properly addressed as follows:
a) In the case of Company to:
Montaup Electric Company
c/o EUA Service Corp.
W. Bridgewater, Massachusetts 02379 U.S.A.
Attention: Robert P. Clarke
Telecopy No: 508-583-2356
b) In the case of Seller to:
Carolyn C. Shanks, CPA
Vice President, Finance and Administration
Entergy Nuclear Generation Company
P.O. Box 31995
Jackson, MS 39286-1995
Street Address:
1340 Echelon Parkway
Jackson, MS 39213
Telecopy No: 601-368-5323
Another address or addressee may be specified in a notice duly given as
provided. Each notice, invoice or other communication which shall be mailed,
delivered or transmitted in the manner described above shall be deemed
sufficiently given an d received for all purposes at such time as it is
delivered to the addressee (with return receipt, the delivered receipt, the
affidavit of the messenger or with respect to a telecopy, the answer back,
being deemed conclusive evidence of such delivery ) or at such time as delivery
is refused by the addressee upon presentation.
IN WITNESS WHEREOF the Parties have executed this Agreement as of the date
first written above.
ENTERGY NUCLEAR GENERATION COMPANY
By: /s/ Donald C. Hintz
Name: Donald C. Hintz
Title: President and Chief Executive Officer
MONTAUP ELECTRIC COMPANY
By: /s/ Kevin A. Kirby
Name: Kevin A. Kirby
Title: Vice President