EXHIBIT 10.7
THIRD AMENDMENT
to the
INTERCONNECTION AGREEMENT
,dated May 1, 1992,
among
INDIANAPOLIS POWER & LIGHT COMPANY
and
PSI ENERGY, INC.
and
CINERGY SERVICES, INC.
Dated June 30, 1995
INDIANAPOLIS POWER & LIGHT COMPANY
FEDERAL ENERGY REGULATORY COMMISSION
Rate Schedule FERC No. 23
CINERGY COMPANIES
FEDERAL ENERGY REGULATORY COMMISSION
Rate Schedule FERC No. 10
INDEX
SECTION ONE: Agreement As Amended
Interconnection Agreement Between
Indianapolis Power & Light Company, and
The Cincinnati Gas & Electric Company,
PSI Energy, Inc., and CINergy Services, Inc.,
dated June 30, 1995
SECTION TWO: Agreement As Signed
Interconnection Agreement Between
Indianapolis Power & Light Company, and
The Cincinnati Gas & Electric Company,
PSI Energy, Inc., and CINergy Services, Inc.,
dated June 30, 1995
THIRD AMENDMENT
TO THE
INTERCONNECTION AGREEMENT
AMONG
INDIANAPOLIS POWER & LIGHT COMPANY
and
PSI ENERGY, INC.
AND CINERGY SERVICES, INC.
0.01 THIS THIRD AMENDMENT, dated on the 30th day of June
1995, among INDIANAPOLIS POWER & LIGHT COMPANY (hereinafter referred to as
"IPL"), a corporation organized and existing under the laws of the State of
Indiana and PSI ENERGY, INC. (hereinafter referred to as "PSI"), a
corporation organized and existing under the laws of the State of Indiana,
and CINERGY SERVICES, INC. (hereinafter referred to as "CINergy Services"), a
corporation organized and existing under the laws of the State of
Delaware. IPL, PSI and CINergy Services are sometimes hereinafter referred
to individually as "Party" and collectively as "Parties" where
appropriate.
W I T N E S S E T H:
0.02 WHEREAS, There is now in force and effect between IPL
and PSI an Interconnection Agreement, dated as of May 1, 1992, (said
Interconnection Agreement being the Ninth Supplement to the 1962
Interconnection Agreement between IPL and PSI, herein called the
"1992 Agreement"); and
0.03 WHEREAS, The Cincinnati Gas & Electric Company ("CG&E")
and PSI merged on October 24, 1994, and formed CINergy Corp. with CG&E
and PSI now being called the "CINergy Operating Companies"; and
0.04 WHEREAS, CG&E, PSI and CINergy Services are parties to
a Service Agreement, dated March 2, 1994, which has been approved by the
Securities and Exchange Commission and the Indiana Utility Regulatory
Commission (IURC), under which CINergy Services will act as PSI s agent in
administering PSI s interconnection agreements and the three companies are
also parties to an Operating Agreement, dated March 2, 1994, on file with
and accepted by the FERC and approved by the IURC under which CINergy
Services will dispatch the generating units of CG&E, PSI and CINergy
Services; and
0.05 WHEREAS, the Parties desire to modify the 1992 Agreement, as
hereinafter set forth; and
0.06 NOW, THEREFORE, in consideration of the premises and mutual
covenants and agreements of the Parties, as herein set forth, the Parties
hereby agree as follows:
ARTICLE 1
PROVISIONS FOR, AND CONTINUITY OF
INTERCONNECTED OPERATION
1.01. Interconnection Points. The respective 138,00 volt and
345,000 volt transmission systems of IPL and PSI are presently interconnected
at the following points:
(i) The 138kV Five Points Interconnection Point
(ii) The 345kV Whitestown Interconnection Point
(iii) The 345kV Gwynneville Interconnection Point
(iv) The 138kV Petersburg Interconnection Point
(v) The 345kV Petersburg Interconnection Point
(vi) The 138kV Centerton Interconnection Point
(vii) The 138kV Carmel Tap Point
1.02. Future Interconnection Points. The services provided for
by the 1992 Agreement may also be rendered through such other points of
interconnection as the Parties may later agree upon by amending the 1992
Agreement.
1.03. Synchronous Operation. The Parties mutually agree that,
except as provided in Service Schedule D hereof, their respective systems
will be continuously operated in parallel (except in cases of interruption
of such parallel operation due to mutually agreed upon maintenance or due
to causes beyond the control of either Party, or due to the necessity of an
interruption of parallel operation in order that the native load directly
served by either Party may continue to receive adequate service from such
Party). If synchronous operation of the systems through a particular line
or lines become interrupted either manually or automatically because of any
of the above-stated reasons, the Parties shall cooperate so as to remove the
cause of such interruption as soon as practicable and restore such line or
lines to normal operating condition.
1.03.1. Inadvertent Flow. It is recognized that in
interconnected system operation, power and reactive flow
will exist on an interconnection due to scheduled power flow from
either Party to third parties or between third parties. This
inadvertent power flow depends mainly on the design of the internal
systems of the Parties and the interconnected system, and the
schedules of power flows on the interconnections.
1.03.2. Interruption of Operation. If, in the sole judgment
of either Party, the power or reactive flow over the interconnection
facilities of either Party is excessive to the extent that it
jeopardizes the reliability of either Party's service to its
customers, the Parties shall attempt to agree upon adequate corrective
measures to eliminate or control such excessive power or reactive
flow; provided, however, that in the event such a situation exists,
the Party so burdened shall have the right, with notice when possible
to the other Party, to open and leave open one or all of the
interconnections between the respective systems of the Parties until
corrective action has been taken. The Parties further agree to study
and negotiate the installation, ownership, and cost of any additional
equipment necessary to effect a long-term solution to any such
excessive loading as herein described in the event either Party
determines that this interconnection contributes to the excessive
loading and requests such negotiation.
1.04. Maintenance of Equipment. Each of the Parties shall
keep, or shall cause to be kept, the transmission lines together with all
associated equipment and appurtenances that are located on their respective
sides of the Interconnection Points specified in Section 1.01 hereof, or
agreed upon pursuant to Section 1.02 hereof, in a suitable condition of
repair at all times, each at its own expense, in order that said
transmission lines will operate in a reliable and satisfactory manner and
in order that reduction in the effective capacity of said transmission lines
will be avoided to the extent practicable.
ARTICLE 2
SERVICES TO BE RENDERED
2.01. Interconnection Services Schedules. It is the purpose
of the Parties to seek and realize, on an equitable basis, all benefits
which may be practicably effected through coordination in the operation and
development of their respective systems. It is understood by the Parties
that such benefits may be realized by each of them by carrying out under
stated terms and conditions various interconnection services and transactions
that may from time to time include among others:
(i) The furnishing of emergency service,
(ii) The interchange, sale, and purchase of energy to effect
operating economies,
(iii) The sale and purchase of short term electric power and energy
available on the system of one Party and needed on the system
of the other, and
(iv) The transmission of power and energy on the basis of simultaneous
transfers.
In furtherance of such purpose, the Parties shall create, and continue the
functioning of, an Operating Committee, as provided in Article 7 hereof.
2.02. Specific Terms and Conditions. Since the specific
services to be rendered in furtherance of such purpose will vary during the
term of the 1992 Agreement, and the terms and conditions applicable to such
services may require modification from time to time, it is intended that
such specific services and the terms and conditions applicable thereto will
be set forth in Service Schedules mutually agreed upon between the parties.
Such Service Schedules, unless and until changed, terminated, or
supplemented, shall be those specified in Section 2.03 hereof. If a Service
Schedule under the 1992 Agreement is changed or supplemented, such Service
Schedule shall be fully restated in order to reflect such change or
supplement.
2.03. Service Schedules. The respective Service Schedules
designated
Service Schedule A - Emergency Service
Service Schedule B - Interchange Energy
Service Schedule C - Short Term Power and Energy
Service Schedule D - Carmel Southeast Tap Power & Energy Transfer
have been agreed upon between the Parties, are identified as Exhibits I, II,
III, and IV, respectively, to the 1992 Agreement and are attached hereto and
made a part hereof the same as if incorporated herein. It is contemplated
by the Parties that all additional mutually agreed upon Service Schedules
will be made a part of the 1992 Agreement upon presentation and acceptance
thereof.
2.04. Out-Of-Pocket Costs. The term "Out-of-Pocket Cost" of
energy from generating units on the system of a Party shall consist of any
costs that are directly incurred by IPL or PSI by reason of its generation
of such energy and which otherwise would not have been incurred by such
system including, but not limited to, fuel, labor, operation, maintenance,
start-up, fuel handling, taxes, regulatory commission charges, and emission
allowances.
"Out-of-Pocket Cost" of energy purchased from a third party by the supplying
Party shall consist of the total amount paid therefore by the supplying
Party which otherwise would not have been paid by such Party, plus any cost
which otherwise would not have been incurred, including, but not limited to,
regulatory commission charges, emission allowances, transmission losses and
taxes related to such transaction.
Tax expenses will be the expenses that are incurred as taxes either in
connection with the sale or production of such energy.
2.05. Emission Allowances. The federal Clean Air Act, as amended,
42 U.S.C. Section 7401 et seq. (hereinafter referred to as "Clean Air Act"),
establishes certain annual maximum sulfur dioxide ("SO2") levels, stated in
terms of required emission allowances, for flue gases emitted by electric
generating units, including units operated by IPL, PSI and other electric
utilities who may supply electric energy for transactions under this 1992
Agreement. The generator of the electric energy supplied and delivered
under this 1992 Agreement is required by the Clean Air Act to have adequate
"allowances" (as defined by Section 402(3) of the Clean Air Act in
conjunction with Section 403(f) of the Clean Air Act) in order to generate
such electric energy. To the extent that either IPL or PSI are required by
the Clean Air Act to have additional allowances by reason of its generation
of electric energy to be supplied by it under this 1992 Agreement, which
allowances would otherwise not have been required by such supplying Party,
then, unless the supplying Party otherwise agrees in advance in writing, at
the discretion of the supplying Party, the Party receiving such energy shall
be responsible for the cost or the actual furnishing (without cost to the
supplying Party) of adequate allowances to the supplying Party in order for
such Party to supply such energy under this Agreement. The Parties shall
establish, by mutual agreement, appropriate procedures in order to carry out
the provisions of this Section 2.05, including a statement of costs before
any transactions under the Service Schedules attached hereto are started.
Also, prior to implementation of every transaction under the Service
Schedules attached hereto, the purchasing Party must declare whether they
will pay in cash or return SO2 Allowances in-kind for any consumption of SO2
Allowances directly attributed to such transaction, if any.
It shall be the responsibility of the supplying Party to provide the
receiving Party, before the transaction begins, with a statement of the
estimated emission allowance charges associated with the transaction which
the supplying Party is seeking to add to the rates to be charged under the
applicable Service Schedule. Failure of the supplying Party to provide a
statement of such charges before the transaction begins shall constitute a
waiver of the recovery of any such costs. In establishing such procedures,
the Parties shall recognize that the determination of the additional
allowances required in order to generate the electric energy to be supplied
hereunder is subject to variables contingent upon the loading and operating
conditions on the system where the actual generation occurs. The procedures
so established by the Parties shall be in accord with sound engineering
principles of power plant and system operation, and shall require the
furnishing of such additional allowances at such times and in such amounts
as will be equitable to the supplying Party.
When IPL is the supplier of energy and emission allowances, the recovery of
the applicable costs for the actual furnishing of adequate allowances in
order for IPL to generate and supply such energy will be implemented in the
following manner:
(1) The Buyer shall compensate IPL for the consumption of Sulfur
Dioxide Emissions Allowances ("SO2 Allowances") directly attributed to
electric energy sales by IPL to Buyer under the Service Schedules. Such
compensation shall, at Buyer s option, be made by either supplying IPL with
the number of SO2 Allowances directly attributed to such energy sales, or
by reimbursing IPL for the incremental cost of such number of SO2
Allowances, rounded to the nearest whole SO2 Allowance.
(1) If Buyer opts to reimburse IPL in cash for SO2 Allowances associated
with Buyer s energy purchases for the month, the cash amount due
at billing will be determined by multiplying the number of SO2
Allowances attributed to the sale by the incremental cost of the
SO2 Allowances, as determined in Subsection 2(b) of this Section
2.05, at the time of the sale.
If Buyer opts to reimburse IPL in SO2 Allowances, Buyer will record
or transfer to IPL s account, the number of SO2 Allowances calculated
below, at the time cash settlement for the energy is due. In all
cases, Buyer will transfer to IPL s account the number of SO2
Allowances due IPL for calendar year no later than January 15
of the following year. "Transfer to IPL s account" shall mean, for
purposes of the Amendment, the transfer by the USEPA of the requisite
number of SO2 Allowances to IPL s Allowance Tracking System account
and the receipt by IPL of the Allowance Transfer Confirmation.
(2) Determination of SO2 Emission Allowances Due IPL
(a) Number of SO2 Allowances
The number of SO2 Allowances directly attributed to an energy
sale made by IPL shall be determined for each hour, by
determining the contribution from each of the unit(s) from
which the energy sale is being made for that hour. For each
unit, the emission rate in pounds of SO2 per million Btu will
be determined each month, from fuel sulfur content, control
equipment performance, and continuous emissions monitoring
data. The emission rate and the unit heat rate will be used to
determine the SO2 Allowances used per megawatt-hour ("MWH").
The energy from each unit attributable to the sale, and the SO2
Allowances per MWH for each unit, will be used to determine the
number of SO2 Allowances attributable to the sale.
(b) Cost of SO2 Allowances
The incremental SO2 Allowance cost used to determine economic
dispatch of IPL s generating units in any month, will also be
the basis used to determine compensation for IPL s energy
sales. The incremental SO2 Allowances cost, in dollars per ton
of SO2, shall be determined each month and will be based on the
Cantor Fitzgerald offer price for SO2 Allowances, or if such is
not available, then another nationally recognized SO2 Allowance
trading market price or market price index, at the beginning of
the month. The SO2 Allowance value may be changed at any time
during the month to reflect the more current incremental cost,
or market price, for SO2 Allowances. Buyer will be notified of
the new SO2 Allowance value prior to dispatch of IPL energy to
Buyer.
When PSI is the supplier of energy and emission allowances, the
recovery of the applicable costs for the actual furnishing of adequate
allowances in order for PSI to generate and supply such energy will
be implemented in the following manner:
(1) The current Environmental Protection Agency ("EPA") auction price to
value emission allowances will be used for energy sales transactions.
The dispatch criteria may be revised from time to time if the
emission allowance purchases on the average are determined to be
significantly different than the EPA auction price.
(2) For each hour in which there is a transaction for energy services
using an Out-of-Pocket Cost rate under this 1992 Agreement, PSI will:
(a) identify the generation sources used to provide the
transaction s energy by identifying the energy that would not
have been used had the transaction not been in effect that hour
by using the same after-the-fact incrementing costing model
that is used to calculate the incremental cost of fuel under
this 1992 Agreement;
(b) determine, using the following formula, the quantity of
emission allowances related to the energy transaction:
(i) by calculating an incremental heat rate for the appropriate
generating unit and the corresponding incremental SO2 emission
levels, as determined by the computer based tools, for the
identified units dispatched to serve the transaction; (ii)
applying the following formula for each such unit; (iii) adding
together the total number of tons of SO2 produced per million
BTU (i.e., British Thermal Unit) of fuel burned by each such
unit for the transaction; and (iv) letting one (1) emission
allowance equal one (1) ton of SO2 so produced.
# OF UNITS
The sum of [MBTU SALE - MBTU NO SALE] * [SO2] * [100%-SE]
100%
MBTU SALE = Million BTU consumed on unit n with sale.
MBTU NO SALE = Million BTU consumed on unit n without sale.
SO2 = Tons of SO2 produced per million BTU of fuel burned.
SE = Scrubber Efficiency in %.
PSI will perform periodic tests to maintain the accuracy and
validity of such emission rate information. Because some
generating sources may not be subject to the Clean Air Act
during Phase I or Phase II thereunder, there will be no
emission allowance charges included for the utilization of such
an energy source while it is not subject to such requirements.
One (1) emission allowance shall be assigned to each ton of SO2
emitted to serve the transaction. Fractions of emission
allowance tons will be rounded up to the next whole number when
the fraction is equal to or greater than .5 and rounded down
when the fraction is less than .5.
(3) The purchasing Party of energy shall have the option of purchasing
or providing emission allowances for each transaction. The
purchasing Party shall notify PSI of its election to purchase or
provide emission allowances prior to the start of the transaction.
The running quantity of emission allowances charged or furnished
will be shown on the monthly invoices to the purchasing Party.
(4) When the purchasing Party of energy elects to purchase the
emission allowances from PSI, then the quantity of emission
allowances used will be included as part of the charges on the
monthly invoices to the purchasing Party.
(5) By January 15th of the year following the calendar year in
which the transaction occurred, the purchasing Party of energy
shall transfer the appropriate emission allowances to PSI for
the emission allowances used when the allowances are provided
in kind.
(6) PSI has adopted the same incremental cost calculation to value
emission allowances for dispatch criteria as for billing energy
transactions.
ARTICLE 3
SERVICE CONDITIONS
3.01. Control of System Disturbance. Each Party shall maintain and
operate its system so as to minimize, in accordance with sound operating
practice, the likelihood of disturbance originating in either Party s system
which might cause impairment to the service of the system of the other Party
or of any system interconnected with the system of the other Party.
3.02. Control of Kilovar Exchange. It is the intent that neither
Party shall be obligated to deliver kilovars for the benefit of the other
Party; also that neither Party shall be obligated to receive kilovars when
to do so may introduce objectionable operating conditions on its system.
The Operating Committee shall be responsible for the establishment of
operating procedures and schedules in respect of carrying kilovar loads by
one Party's system for the other Party's system in order to secure adequate
service and economical use of facilities of both Parties' systems and in
respect of proper charges, if any, for the use of facilities carrying
kilovar loads. In discharging such duties, the Operating Committee shall
recognize that in the transmission and delivery of power and energy
hereunder the carrying of kilovar loads by either Party, in harmony with
sound engineering principles of transmission operation with their systems
interconnected, is subject to numerous variables contingent upon loading and
operating conditions existing simultaneously on the systems of both Parties.
The operating procedures and schedules so established by the Operating
Committee shall be in accord with such principles and shall require each
Party to carry kilovar loads at such times and in such amounts as will be
equitable to both Parties.
3.03. Control of Unscheduled Power Deliveries. The Parties shall
exercise due diligence and foresight in carrying out all matters related to
the providing and operating of their respective electric power resources so
as to minimize to the extent practicable deviations between actual and
scheduled deliveries of electric power and energy between their systems.
The Parties shall provide and install on their respective systems such
communication and telemetering facilities as are essential to so minimize
such deviations and, in developing and executing operating procedures that
will enable the Parties to avoid to the extent practicable deviation from
scheduled deliveries, shall fully cooperate with each other and with third
parties whose systems are either directly or indirectly interconnected with
the systems of the Parties and who of necessity, together with the Parties,
must unify their efforts cooperatively to achieve effective and efficient
interconnected operation. The Parties recognize, however, that, despite
their best efforts to prevent the same, unscheduled deliveries of electric
energy from one Party to the other may occur. In such event, electric
energy delivered hereunder shall be settled for by the return of equivalent
energy. Equivalent energy shall be returned at times when the load
conditions of the Party receiving it are equivalent to the load conditions
of such Party at the time the energy for which it is returned was delivered
or, if such Party elects to have equivalent energy returned under different
conditions, it shall be returned in such amounts, to be agreed upon by the
Operating Committee, as will compensate for the difference in conditions.
ARTICLE 4
DELIVERY POINTS, MEETING POINTS,
AND METERING
4.01. Delivery Points. All electric energy delivered under the 1992
Agreement shall be of the character commonly known as three-phase sixty
Hertz energy, and shall be delivered at the Interconnection Points specified
under Section 1.01 hereof, at a nominal voltage of 138,000 volts at the Five
Points and Centerton Interconnection Points, at the 138KV Petersburg
Interconnection Point, and at the Carmel Tap Point; and at a nominal voltage
of 345,000 volts at the Whitestown and Gwynneville Interconnection Points,
and at the 345KV Petersburg Interconnection Point; and at such other points
and voltages as hereafter may be agreed upon by the parties pursuant to
Section 1.02 hereof.
4.02. Billing Based on Scheduled Transaction. As IPL and PSI systems
are interconnected with other systems forming a network, it is recognized
that, because of the physical and electrical characteristics of the
facilities involved, a part or all of the energy being transferred from one
Party to the other may flow through such other systems rather than through
the point or points of connection between the systems of the Parties. A
part or all of the power being transferred between other systems in the
network may flow through the point or points of connection between the
systems of the Parties, and as a result be included in the demand and energy
meter readings at the point or points of interconnection. Therefore, all
billings shall be based on scheduled transactions or upon methods determined
by the Operating Committee which may result from development of arrangements
with other interconnected systems and which provide a basis for accounting
for the power and energy transfers actually contracted for between the
Parties.
4.03. Metering Points. Electric power and energy supplied and
delivered under the 1992 Agreement shall be measured by suitable metering
equipment which shall be provided, owned and maintained by PSI or ILP as
designated below at the following metering points:
(i) 138,000 volt metering equipment installed by PSI at the Five
Points Substation; 138,000 volt metering equipment installed by
PSI at the Centerton Substation; 138,000 and 345,000 volt
metering equipment installed by IPL at the Petersburg Station;
345,000 volt metering equipment installed by IPL at its
Sunnyside Substation and at PSI s Gwynneville and Whitestown
Substations; and 12.47kV metering equipment installed by PSI at
its Carmel Southeast Substation, and
(ii) At such other locations as hereafter may be agreed upon by the
Parties pursuant to Section 1.02 hereof.
4.04. Metering Equipment. Suitable metering equipment at the metering
points as described in Section 4.03 above shall include electric meters,
potential and current transformers, and such other appurtenances as shall
be necessary to give for each direction of flow the following quantities:
(i) an automatic record of the kilowatt-hours for each clock-hour, and (ii)
a continuous integration record of the kilowatt-hours.
4.05. Measurement of Electric Energy. Measurements of electric energy
for the purpose of effecting settlements under the 1992 Agreement shall be
made by standard types of electric meters installed and maintained (unless
otherwise provided for in the Agreement) by the owner at the metering points
described in Section 4.03 above. The timing devices of all meters having
such devices shall be maintained in time synchronism as closely as
practicable.
The meters shall be sealed and the seals shall be broken only upon
occasions when the meters are to be tested or adjusted. for the purpose of
checking the records of the metering equipment installed by one of the
Parties as hereinabove provided, the other Party shall have the right to
install check metering equipment at the aforesaid metering points. Metering
equipment so installed by one Party on the premises of the other Party,
unless otherwise provided for in the 1992 Agreement, shall be owned and
maintained by the Party installing such equipment. Upon termination of the
1992 Agreement, the Party owning such metering equipment shall remove it
from the premises of the other Party. Authorized representatives of both
Parties shall have access at all reasonable hours to the premises where the
meters are located and to the records made by the meters.
4.06. Testing and Access to Meters and Records. The aforesaid
metering equipment shall be tested by the owner at suitable intervals and
its accuracy of registration maintained in accordance with good practice.
On request of either Party, a special test may be made at the expense of the
Party requesting such special test. Representatives of both Parties shall
be afforded the opportunity to be present at all routine or special tests
and upon occasions when any readings, for purposes of settlements hereunder,
are taken from meters not bearing an automatic record.
4.07. Adjustments Due to Inaccuracies. If at any test of metering
equipment an inaccuracy shall be disclosed exceeding two percent, the
account between the Parties for service theretofore delivered shall be
adjusted to correct for the inaccuracy disclosed over the shorter of the
following two periods: (i) for the thirty (30) day period immediately
preceding the day of the test, or (ii) for the period that such inaccuracy
may be determined to have existed. Should the metering equipment described
in Section 4.04 above at any time fail to register, the electric power and
energy delivered shall be determined from the check meters, if installed,
or otherwise shall be determined from the best available data.
ARTICLE 5
RECORDS AND STATEMENTS
5.01. Records. In addition to records of the metering provided for
in Article 4 hereof, the Parties shall keep in duplicate such other records
as may be needed to afford a clear history of the various deliveries of
electric energy made by one Party to the other and of the clock-hour
integrated demands in kilowatt-hours delivered by one Party to the other.
In maintaining such records, the Parties shall effect such segregations and
allocations of demands and electric energy delivered into classes
representing the various services and conditions as may be needed in
connection with settlements under the 1992 Agreement. The originals of all
such records shall be retained by the Party keeping the records and the
duplicates shall be delivered monthly to the other Party, except that the
Parties may agree upon a different time interval for such delivery.
5.02. Statements. As promptly as practicable after the end of each
calendar month, the Parties shall prepare a statement setting forth the
electric power and energy transactions between the Parties during such month
in such detail and with such segregations as may be needed for operating
records or for settlements under the provisions of the 1992 Agreement.
ARTICLE 6
BILLINGS AND PAYMENTS
6.01. Billing Period. Unless otherwise agreed upon by the Parties, the
calendar month shall be the standard billing period for all settlements
under the 1992 Agreement.
6.02. Billing Scheduled Transactions. All billing shall be based on
scheduled transactions unless otherwise determined as provided in Section
4.02 hereof.
6.03. Billing Payments. All bills for amounts owed by one Party to
the other Party shall be due on the first business day following the
twentieth (20th) day after the end of the calendar month or period service
was rendered, or on the fifteenth (15th) business day following receipt of
a bill, whichever is later. Payments shall be made by electronic transfer
or by such other mutually agreeable method as shall cause such payment to
be available for the account of the payee on or before the due date.
Interest on unpaid amounts, both principal and interest, shall accrue daily
at the then current prime interest rate per annum of The Chase Manhattan
Bank, N.A., New York, New York, plus two percent (2%) per annum, or the
maximum rate permitted by law, whichever is less, from the date due until
the date upon which payment is made.
6.04. Estimated Billing Factors. In order that bills may be rendered
promptly after the end of the each month, it may be necessary, from time to
time, to estimate certain factors involved in calculating the monthly
billing. Adjustments for errors in such estimates shall be included in the
bill for the month following the time when information becomes available to
make such corrections or adjustments in the billing for the preceding month
or months.
6.05. Billing Disputes. If a Party disputes the correctness of a
bill, such Party will, nevertheless, pay the undisputed portion of such
bill, plus a minimum of one-half (1/2) of the disputed amount, and shall
submit to the other Party a written statement detailing the items disputed.
If the Parties are unable to agree upon the disputed items, such items shall
be submitted to the Operating Committee for further action consistent with
the 1992 Agreement.
ARTICLE 7
OPERATING COMMITTEE
7.01. Operating Committee Organization and Duties. To coordinate the
operation of their respective generation, transmission, and substation
facilities in order that the benefits of the 1992 Agreement may be realized
by the Parties to the fullest practicable extent, the Parties shall
establish a committee of authorized representatives to be known as the
Operating Committee. Each of the Parties shall designate in writing
delivered to the other Party, the person who is to act as its authorized
representative (the "OC Representative") on said committee (and the person
or persons who may serve as Alternate whenever the OC Representative is
unable to act). The OC Representative and Alternate or Alternates shall
each be persons familiar with the generation, transmission, and substation
facilitates of the system of the Party he represents, and each shall be
fully authorized (i) to cooperate with the other OC Representative (or
Alternates) and (ii) as the need arises and subject to the declared
intentions of the Parties as herein set forth and to the terms hereof and
the terms of any other agreements then in effect between the Parties, to
determine and agree from time to time upon the following:
(i) All matters pertaining to the coordination of maintenance of
the generation and transmission facilities of the Parties.
(ii) All matters pertaining to the control of time, frequency,
energy flow, kilovar exchange, power factor, voltage, and other
similar matters bearing upon the satisfactory synchronous
operation of the systems of the Parties.
(iii) Such other matters not specifically provided for herein upon
which cooperation, coordination and agreement as to quantity,
time, method, terms and conditions are necessary, in order that
the operation of the respective systems of the Parties may be
coordinated to the end that the potential benefits anticipated
by the Parties will be realized to the fullest extent practicable.
7.02. Operating Committee Access. For the purpose of inspection and
reading of meters, checking of records, and all other pertinent matters, the
OC Representative and their Alternates shall have the right of entry at any
reasonable time to all property of the Parties used in connection with the
performance of the 1992 Agreement.
7.03. Unanimous Action. All actions taken by said Operating Committee
must be by unanimous vote or consent of all OC Representatives (including
Alternates acting during OC Representatives' absence).
7.04. Expenses. The expenses for establishing and maintaining the
Operating Committee shall be the responsibility of each individual Party as
regards to its respective personnel. Any expenses jointly incurred by said
Operating Committee in carrying out its duties, other than for the Parties
personnel, shall be shared equally by the Parties.
7.05. Authority to Amend or Supplement. The Operating Committee may
recommend changes to the 1992 Agreement, but said Operating Committee shall
not have authority to amend or supplement the 1992 Agreement.
ARTICLE 8
CONTINUITY AND SUSPENSION OF SERVICE
RELATIVE RESPONSIBILITIES AND
LIABILITY LIMITS
8.01. Continuity and Suspension of Service. Each Party shall exercise
reasonable care and foresight to maintain continuity of service as provided
in the 1992 Agreement. In no event shall one Party be liable to the other
Party or its customers for loss or damage arising from failure to provide
or for the interruption or suspension of any service provided for herein.
Each Party reserves the right to suspend service without liability at such
times and for such periods and in such manner as it deems advisable,
including, without limitation, suspensions for the purpose of making
necessary adjustments to, changes in, or repairs on, its facilities and to
suspend service in cases where, in its sole opinion, the continuance of
service to the other Party would endanger persons or property. Both Parties
shall use their best efforts to provide each other with reasonable notice
in the event of suspension of service.
8.02. Relative Responsibilities. Each Party assumes all
responsibility for receipt and delivery of electricity on its system to and
from the Points of Interconnection specified in Section 1.01 hereof or
agreed upon pursuant to Section 1.02 hereof. Neither Party assumes any
responsibility with respect to the construction, installation, maintenance
or operation of the system of the other Party or of the systems of third
parties, in whole or in part. In no event shall one Party be liable to the
other Party for damage or injury to any person or property, whatsoever,
arising, accruing or resulting from, in any manner, the receiving,
transmission, control, use, application or distribution of said electric
power and energy. Each Party shall use reasonable diligence to maintain its
facilities in proper and serviceable condition, and shall take reasonable
steps and precautions for maintaining the services agreed to be provided and
received under the 1992 Agreement. Each Party shall be responsible for its
own compliance with all applicable environmental regulations and shall bear
all costs arising from its failure to comply with such environmental
regulations.
8.03. Limitation of Liability. In no event shall one Party be liable
to the other Party for any indirect, special, incidental or consequential
damages with respect to any claim arising out of the 1992 Agreement.
ARTICLE 9
TERM OF AGREEMENT
9.01. The term of the 1992 Agreement and of the annexed Service
Schedules shall begin as of May 1, 1992 and (except for Service Schedule D)
shall continue through April 30, 2022 (the "Initial Term"); thereafter, the
Agreement and Service Schedules (except Service Schedule D) shall continue
for successive terms of three (3) years each unless and until terminated by
either Party by giving notice to the other Party of its intention to
terminate the 1992 Agreement at least two (2) years prior to the end of the
Initial Term or any successive term; provided, that the 1992 Agreement shall
not be deemed to have terminated until all prior commitments for sales or
purchases of power and energy hereunder shall have been fulfilled and all
payments shall have been made. The term of Service Schedule D shall be as
provided therein. Any notice of termination hereunder shall be given to the
President or Chief Operations Officer of a Party with a copy to the OC
Representative of such Party.
ARTICLE 10
WAIVERS
10.01. Any waiver at any time by either party of their rights
with respect to a default under the 1992 Agreement, or with respect to any
other matter arising in connection with the 1992 Agreement shall not be
deemed a waiver with respect to any subsequent default or matter. Any
delay, short of the statutory period of limitation, in asserting or
enforcing any right under the 1992 Agreement shall not be deemed a waiver
of such right.
ARTICLE 11
TAXES
11.01. If at any time during the term hereof there should be
levied or assessed against either Party any direct tax by any taxing
authority on the capacity or energy (or both) generated, purchased, sold,
transmitted, interchanged or exchanged by it, which tax is in addition to
or different from the forms of such direct tax as are being levied or
assessed as of the date hereof and such direct tax results in increasing the
cost of either or both the Parties in carrying out the provisions of the
1992 Agreement, then such increase shall be reflected in the charges for
capacity or energy (or both) furnished by one Party to the other hereunder
as is necessary in order to make adequate and equitable allowances for such
tax.
ARTICLE 12
NOTICES
12.01. Notices Relating to Provisions of the 1992 Agreement.
Except as herein otherwise provided, any notice which may be given to or
made upon either Party by the other Party, under any of the provisions of
the 1992 Agreement, shall be in writing unless it is otherwise specifically
provided herein, and shall be treated as duly delivered when the same is
either (a) personally delivered to the President or Chief Operations Officer
of the other Party or (b) deposited in the United States mail, postage
prepaid and properly addressed to the President or Chief Operations Officer
of the other Party; provided, however, that either Party may alter its
recipient for notice hereunder by written notice to the other Party in
accordance with the provisions of this Section 12.01.
12.02. Notices of An Operating Nature. Any notice, request or
demand pertaining to matters of an operating nature may be served in person
or by United States mail, messenger, telephone, or telegraph, facsimile
transmission or orally, as circumstances dictate, from the OC Representative
of one Party to the OC Representative of the other Party; provided, that
should the same not be written, confirmation thereof shall be made in
writing as soon as practicable thereafter, upon request of the Party being
served.
ARTICLE 13
REGULATORY AUTHORITIES
13.01. Regulatory Authority. The 1992 Agreement is made subject
to the authority of the Federal Energy Regulatory Commission or any other
governmental regulatory agency having jurisdiction in the premises and, if
any of the terms and conditions hereof are altered or made impossible of
performance by order, rule, or regulation of any such regulatory agency, and
the Parties hereto are unable to agree upon a modification of such terms and
conditions that will satisfy such order, rule, or regulation, then neither
Party shall be liable to the other for failure thereafter to comply with
such terms and conditions; provided, that if either Party deems that the
failure of such performance results in a substantial breach of the 1992
Agreement, then the 1992 Agreement may be terminated forthwith upon thirty
(30) days advance written notice.
13.02. Amendments. The 1992 Agreement and the annexed Service
Schedules may be amended by mutual agreement of the Parties, which amendment
shall be in writing and shall become effective in accordance with Section
13.01 hereof. The rates and charges set forth in the annexed Service
Schedules are subject to amendment and change, and each party reserves the
right from time to time to seek unilaterally, from any regulatory agency
having jurisdiction, amendments or changes in its rates and charges set
forth therein in accordance with the applicable law. Nothing contained in
the 1992 Agreement, any annexed Service Schedule or any supplements thereto
shall be construed as affecting in any way the right of either Party
unilaterally to make application to the Federal Energy Regulatory Commission
(or any successor regulatory agency having jurisdiction) for a change in
rates under Section 205 of the Federal Power Act and pursuant to the
Commission s Rules and Regulation promulgated thereunder (or under
comparable statutes and regulations of a successor regulatory agency having
jurisdiction).
ARTICLE 14
MISCELLANEOUS
14.01. No Partnerships; Tax Matters. Notwithstanding any
provision of the 1992 Agreement to the contrary, the Parties do not intend
to create hereby any joint venture, partnership, association taxable as a
corporation, or other entity for the conduct of any business for profit, and
any construction of the 1992 Agreement to the contrary which has an adverse
tax effect on either Party shall render the 1992 Agreement null and void
from its inception.
14.02. Computation of Time. In computing any period of time
prescribed or allowed by the 1992 Agreement, the day of the act, event, or
default from which the designated period of time begins to run shall be
excluded but the last day of such period shall be included, unless it is a
Saturday, Sunday, or legal holiday, in which event the period shall run
until the end of the next business day which is not a Saturday, Sunday, or
legal holiday.
14.03. Section Headings Not to Affect Meaning. The descriptive
headings of the Articles, Sections, Subsections and paragraphs of the 1992
Agreement have been inserted for convenience only and shall not modify or
restrict any of the terms and provisions thereof.
ARTICLE 15
ASSIGNMENT
15.01. The 1992 Agreement shall inure to the benefit of, and be
binding upon, the respective successors and assigns of the Parties, but the
assignment thereof by a Party shall not relieve such Party, without the
written consent of the other Party, of any obligation to supply, or to take
and pay for, as the case may be, the services hereunder.
ARTICLE 16
ENTIRE AGREEMENT CONTAINED HEREIN
16.01. The 1992 Agreement contains the entire agreement between
the Parties in respect of the subject matter hereof, and there are no other
understanding or agreements between the Parties in respect thereof;
provided, however, that nothing contained in the 1992 Agreement shall be
deemed to affect in any manner whatsoever any rights or claims either Party
may have against the other Party pursuant to any other agreement in effect
before the effective date of the 1992 Agreement with respect to any matter,
including any right or claim to payments after the effective date of the
1992 Agreement pursuant to other preexisting agreements.
ARTICLE 17
1962 AGREEMENT SUPERSEDED
17.01. The 1992 Agreement constitutes an amendment to and
complete restatement of the 1962 Agreement and, as such, supersedes the 1962
Agreement from and after the date the 1992 Agreement becomes effective.
ARTICLE 18
AGENCY OF CINERGY SERVICES, INC.
18.01. CINergy Services joins in the execution of this Agreement
for the sole purpose of serving and acting as agent for PSI.
IN WITNESS WHEREOF the Parties have caused the 1992 Agreement to be executed
by their respectable duly authorized officers and their respective corporate
seal to be hereunder affixed as of the date first above mentioned.
INDIANAPOLIS POWER & LIGHT
(IPL)
By: /s/ John R. Brehm
John R. Brehm
Senior Vice President
Finance and Information Services
Attest:
By: /s/ Bryan G. Tabler
Bryan G. Tabler
Senior Vice President
Secretary and General Counsel
CINERGY SERVICES, INC.
(CINergy Services)
By: /s/ Terry E. Bruck
Terry E. Bruck
Group Vice President
PSI ENERGY, INC.
(PSI)
By: /s/ John M. Mutz
John M. Mutz
President
EXHIBIT I
(First Revision)
SERVICE SCHEDULE A
EMERGENCY SERVICE
SECTION 1 - DURATION
1.1 This Service Schedule A, being a part of and under the Interconnection
Agreement (referred to herein as the "1992 Agreement"), dated as of May 1,
1992, among Indianapolis Power & Light Company (hereinafter called "IPL")
and PSI Energy, Inc., formerly named Public Service Company of Indiana, Inc.
(hereinafter called "PSI") and CINergy Services, Inc. (hereinafter called
"CINergy Services"), shall become effective as of the effective date of the
Third Amendment, dated June 30, 1995, to the 1992 Agreement and shall
continue in effect throughout the duration of the 1992 Agreement. IPL, PSI
and CINergy Services are sometimes hereinafter referred to individually as
"Party" or collectively as "Parties" where appropriate.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Conditional Service. Subject to the provisions of Subsection 2.2 of
this Section 2, in the event of a breakdown or other emergency in or on the
system of any Party involving either sources of power or transmission
facilities, or both, impairing or jeopardizing the ability of the Party
suffering the emergency to meet the loads of its system, another Party shall
deliver to such Party electric energy that it is requested to deliver;
provided, however, that a Party shall not be obligated to deliver such
energy which, in its sole judgment, it cannot deliver without interposing
a hazard to or economic burden upon its operations or without impairing or
jeopardizing the other load requirements of its system and provided further,
that a Party shall be obligated to deliver electric energy to another Party
for a period in excess of forty-eight (48) consecutive hours during any
single emergency.
2.2 Non-performance. The Parties recognize that the delivery of electric
energy as provided in Subsection 2.1 of this Section 2 is subject to two
conditions which may preclude the delivery of such energy as so provided:
(a) the Party requested to deliver electric energy may be suffering an
emergency in or on its own system as described in said Subsection 2.1, or
(b) the system of a Party may be delivering electric energy, under a mutual
emergency interchange agreement, to the system of another interconnected
company which is suffering any emergency in or on its system. Under
conditions as cited under (a) above, a Party shall not be considered to be
in default hereunder if it is unable to comply with the provisions of said
Subsection 2.1. Under conditions as cited under (b) above, a Party shall
not be considered to be in default hereunder if it is unable to comply with
the provisions of said Subsection 2.1; provided, however, that such Party
shall make every effort consistent with the terms of its contract with said
other interconnected company to make the electric energy as provided in
Subsection 2.1 available to another Party hereto as soon as possible.
2.3 Reserve Generating Capacity Review. If at any time the record over a
reasonable prior period shows clearly that one of the Parties has failed to
deliver energy in accordance with and subject to the provisions of
Subsection 2.1 and Subsection 2.2 of this Section 2, a Party, by written
notice given to another Party, may call for a joint study by the Parties of
the reserve generating capacity in and provided for their respective systems
and of their respective system transmission facilities affecting the supply
and delivery of power and energy under the 1992 Agreement. It shall be the
purpose of such study to determine the adequacy or inadequacy of reserve
generating capacity and transmission facilities being provided to meet the
requirements of the Parties respective systems, reflecting obligations under
the 1992 Agreement, and, if inadequate, the extent of the burden that a
Party may be placing upon another Party. If it should be found that a Party
is placing an unreasonable burden upon another Party, the Party causing such
burden shall take such measures as are necessary to remove the burden from
another Party, or the Parties shall enter into such arrangements as shall
provide for equitable compensation to the Party being burdened.
SECTION 3 - COMPENSATION
3.1 When IPL is the Supplying Party:
3.11 Emergency Energy delivered that is generated by IPL shall be
settled for, at the option of IPL, either by the return of equivalent energy
at a mutually acceptable time upon request of IPL or by payment of the
greater of (a) 110% of the Out-Of-Pocket Cost (such cost being as of the
delivery point or points, as referred to in Section 4.01 of the 1992
Agreement, taking into account electrical losses incurred from the source
or sources of such energy to the delivery point or points) of supplying such
energy, or (b) $0.10 per kilowatt-hour.
3.12 Emergency Energy delivered that is purchased by IPL from a third
party shall be settled for by payment of an energy charge of 100% of the
Out-Of-Pocket Cost paid therefor by IPL, plus an amount to be agreed upon
by the Parties at the time of the transactions of up to 4.6 mills per
kilowatt-hour (consisting of up to 3.6 mills per kilowatt-hour for bulk
transmission charge plus 1 mill per kilowatt-hour for difficult to quantify
energy-related costs), plus any transmission losses resulting on IPL's
system on account of the transaction, and plus any taxes incurred by IPL on
account of the transaction.
3.2 When PSI is the Supplying Party:
3.21 Emergency Energy delivered that is generated by PSI shall be
settled for by payment of the greater of (a) 110% of the Out-Of-Pocket
Cost (such cost being as of the interconnection point or points, as
referred to in Section 4.01 or the 1992 Agreement, taking into account
electrical losses incurred from the source or sources of such energy
to the interconnection point or points) of supplying such energy.
Non-firm transmission service per the provisions of the CINergy
Services, Inc., FERC Electric Tariff, Original Volume No. 3, Non-Firm
Point-to-Point Transmission Service Standard Tariff - NFT (or any
successor transmission tariff of similar service) must be obtained,
or (b) $100 per megawatt-hour.
3.22 Emergency Energy delivered that is purchased by PSI from a third
party shall be settled for by payment of the greater of (a) of an
energy charge of 100% of the Out-Of-Pocket Cost paid therefor by PSI
plus $1.00 per megawatt-hour (for difficult to quantify energy-related
costs), plus any transmission losses resulting on the system of the
CINergy Operating Companies on account of the transaction. Non-firm
transmission service per the provisions of the CINergy Services, Inc.,
FERC Electric Tariff, Original Volume No. 3, Non-Firm Point-to-Point
Transmission Service Standard Tariff - NFT (or any successor
transmission tariff of similar service) must be obtained, and
plus any regulatory commission charges and taxes incurred by PSI on
account of the transaction, or (b) $100 per megawatt-hour.
3.3 If the option of returning electric energy under Subsection 3.11 is
exercised, then it shall be returned at times when the load conditions of
the Party receiving it are equivalent to the load conditions of such Party
at the time the energy for which it is returned was delivered or, if such
Party elects to have equivalent energy returned under different conditions,
it shall be returned in such amounts, to be agreed upon by the Operating
Committee under the Agreement, as will compensate the Party for the
difference in conditions.
EXHIBIT II
(First Revision)
SERVICE SCHEDULE B
INTERCHANGE ENERGY
SECTION 1 - DURATION
1.1 This Service Schedule B, being a part of and under the Interconnection
Agreement (referred to herein as the "1992 Agreement"), dated as of May 1,
1992, among Indianapolis Power & Light Company (hereinafter called "IPL")
and PSI Energy, Inc., formerly named Public Service Company of Indiana, Inc.
(hereinafter called "PSI") and CINergy Services, Inc. (hereinafter called
"CINergy Services"), shall become effective as of the effective date of the
Third Amendment, dated June 30, 1995 to the 1992 Agreement and shall
continue in effect throughout the duration of the 1992 Agreement. IPL, PSI
and CINergy Services are sometimes hereinafter referred to individually as
"Party" or collectively as "Parties" where appropriate.
SECTION 2 - SERVICES TO BE RENDERED
Economy Energy
2.1 It is recognized that from time to time that any of the Parties may
have electric energy (herein called "Economy Energy") available from surplus
capacity either on its own system or from sources outside its own system,
or both, and that Economy Energy could be supplied to another Party at a
cost that would result in operating savings to such another Party. Such
operating savings would result from the displacement of electric energy that
otherwise would be supplied from capacity either on such other Party's
system or from sources outside its own system, or both. To promote the
economy of electric power supply and to achieve efficient utilization of
production capacity, any Party, whenever it in its sole judgment determines
Economy Energy is available, may, but shall not be obligated to, offer
Economy Energy to another Party. Promptly upon receipt of any such offer
said Party shall notify the offering Party of the extent to which it desires
to use such Economy Energy, and schedules providing the periods and extent
of use shall be mutually agreed upon by the Parties. Such energy is non-
firm and may be withdrawn by the supplying Party with a ten (10) minute
notification. A transaction made by PSI and CINergy Services under this
Service Schedule B shall not extend beyond twelve (12) months.
Non-Displacement Energy
2.2 It is further recognized that from time to time occasions will arise
when the effecting of transactions, as provided in Subsection 2.1 of this
Section 2, will be impracticable, but at the same time one of the Parties
may have electric energy (herein called "Non-Displacement Energy") which it
is willing to make available from surplus capacity either on its own system
or from sources outside its own system, or both, that can be utilized
advantageously for short intervals by another Party. It shall be the
responsibility of the Party desiring the receipt of Non-Displacement Energy
to initiate the receipt and delivery of such energy. Any Party desiring
such receipt of energy shall inform another Party of the extent to which it
desires to use Non-Displacement Energy, and whenever in its sole judgment
such another Party determines that it has Non-Displacement Energy available,
schedules providing the periods and extent of use shall be mutually agreed
upon by the Parties. Any Party shall not be obligated to make any Non-
Displacement Energy available to another Party.
2.3 PSI may reduce or discontinue the supply of Hourly Non-Displacement
Energy at any time. To the extent possible, however, PSI shall advise IPL
of its intention to reduce materially or discontinue the supply of Hourly
Non-Displacement Energy.
2.4 PSI shall supply Daily and Weekly Non-Displacement Energy for three (3)
hours after they have notified IPL of its intention to discontinue such
supply of energy; however, PSI shall be under no obligation to continue the
supply of said energy for more than three (3) hours after said notification.
2.5 A transaction made by PSI under Subsection 2.2 above shall not extend
beyond twelve (12) months.
SECTION 3 - COMPENSATION
Economy Energy
3.1 The charge for Economy Energy purchased by a Party from another Party
shall be based on the principle that the Party purchasing it shall pay the
Out-Of-Pocket Cost (including all operating, maintenance, tax, regulatory
commission charges, transmission losses and other expenses incurred that
would not have been incurred if the energy had not been supplied) being at
the interconnection points (as defined in Article 4 of the 1992 Agreement),
of the Party supplying such energy and that the resulting savings to the
receiving Party shall be equally shared by the supplying and receiving
Parties. Prior to any transaction involving the delivery and receipt of
Economy Energy, authorized representatives of the Parties shall determine
and agree upon the compensation applicable to such transaction.
Compensation so agreed upon shall not be subject to later review or
adjustment. PSI shall dedicate an amount at the time of the transactions
for non-firm transmission service per the provisions of the CINergy
Services, Inc., FERC Electric Tariff, Original Volume No. 3, Non-Firm Point-
to-Point Transmission Service Standard Tariff - NFT (or any successor
transmission tariff of similar service) from its portion of the resulting
savings.
3.2 When Economy Energy is obtained from or delivered to other systems
interconnected with the Parties, but not signatories to the 1992 Agreement,
payments shall be based on the Out-Of-Pocket Cost of the supplying Party or
system providing the energy and an allocation of the gross savings which are
defined as the difference between (1) what such Out-Of-Pocket Costs of the
receiving Party or system would have been to generate such energy, and (2)
such Out-Of-Pocket Costs of the supplying Party or system providing the
energy. Such allocation shall be made as provided in Subsections 3.21 and
3.22 hereinbelow:
3.21 The transmitting Party shall be paid (a) its costs of purchasing
the energy supplied, plus (b) its costs of
additional transmission losses plus (c) the following:
(1) When IPL is such transmitting Party: Fifteen percent
(15%) of the gross savings remaining after deducting all
such payments for transmission losses.
(2) When PSI is the transmitting Party, they shall receive
the greater of (a) 15% (such charge pertains to the
reservation of transmission) of the gross savings
remaining after deducting all such payments for
transmission losses or (b) the sum of a demand charge
rate per megawatt reserved per hour at the time such
Economy Energy is reserved for non-firm transmission
service per the provisions of the CINergy Services, Inc.,
FERC Electric Tariff, Original Volume No. 3, Non-Firm
Point-to-Point Transmission Service Standard Tariff - NFT
(or any successor transmission tariff of similar
service), plus $1.00 per megawatt-hour (for difficult to
quantify energy-related costs), plus any transmission
losses resulting on the system of the CINergy Operating
Companies on account of the transaction and plus any
regulatory commission charges and taxes incurred by PSI
on account of the transaction.
3.22 The supplying Party or system shall be paid its Out-Of-Pocket
Cost of providing the energy, plus one-half of the gross
savings remaining after deducting all (b) and (c) payments made
under Subsection 3.21. The receiving Party or system shall be
entitled to the other one-half of the gross savings remaining
after deducting all (b) and (c) payments made under Subsection
3.21.
Non-Displacement Energy
3.3 Non-Displacement Energy delivered hereunder shall be settled for either
by the return of equivalent energy (only in the case where IPL is the
supplying Party) or, at the option of the Party that supplied such energy,
by payment of an energy charge of up to 110% of the Out-Of-Pocket Cost (such
cost being as of the delivery point or points, as provided in Section 4.01
of Article 4 of the 1992 Agreement, taking into account electrical losses
incurred from the source or sources of such energy to said delivery point
or points) to the supplying Party generating such energy plus (the
applicable demand charge rates per this Subsection are limited by
Subsections 3.7 and 3.8):
3.31 When IPL is the supplying Party:
3.31.1 IPL, at its option, may impose a demand charge of up to
48.6 mills per kilowatt reserved per hour, but the total demand
charge in any one day shall be no more than the product of
$0.778 times the highest amount in kilowatts reserved in any
hour during the day. Or,
3.31.2 IPL, at its option, may choose to supply such energy
without imposing a demand charge in which case no additional
payment is included. However, if this option is chosen, the
cost of such energy will be calculated as 110% of the actual
Out-Of-Pocket Cost (such cost being as of the delivery point or
points, as provided in Section 4.01 of Article 4 of the 1992
Agreement, taking into account electrical losses incurred from
the source or sources of such energy to said delivery point or
points) to the supplying Party generating such energy.
3.32 When PSI is the supplying Party by payment of the following:
(1) For energy generated, the agreed upon demand charge rate of up
to $50 per megawatt-hour (such charge pertains to the production
component only), the total demand charge in any one
day shall be no more than the product of $797 and the greatest
amount of megawatts reserved in any hour during said day and
the total charge in any one week shall be no more than the
product of $4,781 and the greatest number of megawatts reserved
in any hour during said week. Non-firm transmission service
per the provisions of the CINergy Services, Inc., FERC Electric
Tariff, Original Volume No. 3, Non-Firm Point-to-Point
Transmission Service Standard Tariff - NFT (or any successor
transmission tariff of similar service) must be obtained;
(2) For daily energy which is purchased by PSI from a third party
for economic reasons to meet system needs but in subsequent
system resources accounting calculations is determined to have
been used to supply a Daily Non-Displacement Energy transaction
and for which PSI stands by to supply from its own resources:
(a) the amount paid by PSI to the third party for such energy,
plus (b) the cost of transmission losses, regulatory commission
charges and taxes incurred which would not otherwise have been
incurred, plus (c) $1.00 per megawatt-hour for difficult-to-
quantify energy related costs, and, plus (d) up to $50 per
megawatt-hour (such charge pertains to the production component
only), the total charge in any one day shall be no more than
the product of $797 and the greatest number of megawatts
reserved in any hour during said day and the total charge in
any one week shall be no more than the product of $4,781 and
the greatest number of megawatts reserved in any hour during
said week. Non-firm transmission service per the provisions of
the CINergy Services, Inc., FERC Electric Tariff, Original
Volume No. 3, Non-Firm Point-to-Point Transmission Service
Standard Tariff - NFT (or any successor transmission tariff of
similar service) must be obtained.
3.33 If equivalent energy is returned to IPL, it shall be returned
at times when the load conditions of the Party receiving it are
equivalent to the load conditions of such Party at the time the
energy for which it is returned was delivered or, if such Party
elects to have equivalent energy returned under different
conditions, it shall be returned in such amounts, to be agreed
upon by the Operating Committee, as will compensate for the
difference in conditions.
3.4 Non-Displacement Energy delivered under Subsection 2.2 above that is
purchased by the supplying Party from another interconnected system which
is not a signatory to the 1992 Agreement ("Third Party") at the request of
the receiving Party shall be settled for as follows:
3.41 When IPL is the supplying Party, by a payment of 100 percent of the
amount paid to such Third Party, plus a demand charge in an amount to
be agreed upon by the Parties at the time of the reservation of up to
3.6 mills per kilowatt reserved per hour, but the total demand charge
in any one day shall be no more than the product of $0.058 times the
highest amount in kilowatts reserved in any hour during the day, plus
1 mill per kilowatt-hour (for difficult to quantify energy-related
costs), plus the cost of any quantifiable transmission losses, taxes,
and other expenses incurred that would not have been incurred if such
transaction had not been made.
3.42 When PSI is the supplying Party: by (a) non-firm transmission service
per the provisions of the CINergy Services, Inc., FERC Electric
Tariff, Original Volume No. 3, Non-Firm Point-to-Point Transmission
Service Standard Tariff - NFT (or any successor transmission tariff
of similar service) must be obtained and (b) an energy charge of 100%
of the Out-of-Pocket Cost paid therefor by PSI, plus $1.00 per
megawatt-hour (for difficult to quantify energy-related costs), plus
any transmission losses resulting on the system of the CINergy
Operating Companies on account of the transaction, and plus any
regulatory commission charges and taxes incurred by PSI on account of
the transaction.
3.5 Notwithstanding the rates stated in Subsection 3.3 above, when IPL is
the supplying Party, if the "demand charge" option of Section 3.31.1 is
chosen, the sum of the demand and energy charges for each specific
reservation made pursuant to Section 2.2 of this Service Schedule B which
includes a demand charge shall not:
(1) exceed the total of:
(i) The product of the number of kilowatts reserved for such
reservation times the maximum hourly demand charge
specified above in Subsection 3.3; and
(ii) The product of the number of kilowatt-hours supplied for
such reservation times 110% of the average cost per
kilowatt-hour of energy generated by IPL's Petersburg
Unit No. 4 for the last preceding month during which it
was run; or
(2) be less than 100% of the total Out-Of-Pocket Cost of supplying
the Non-Displacement Energy for such reservation.
3.6 Notwithstanding the rates stated in Subsection 3.3 above, when PSI and
CINergy Services are the supplying Party, the sum of the demand and energy
charges for each specific reservation made pursuant to Section 2.2 of this
Service Schedule B shall not:
(1) exceed the total of:
(i) The product of the number of megawatts reserved for such
reservation times the maximum hourly demand charge
specified above in Subsection 3.3; and plus
(ii) The product of the number of megawatt-hours supplied for
such reservation times 110% of the average cost per
megawatt-hour of energy generated by the CINergy
Operating Companies Zimmer Unit No. 1 and Gibson Unit
No. 5 for the preceding month; nor
(2) be less than 100% of the total Out-Of-Pocket Cost of supplying
the Non-Displacement Energy for such reservation.
3.7 The aggregate instant total capacity of all IPL sales under this and
other Service Schedules which are a part of this and other IPL Agreements,
for which the rates charged have been supported on the basis that total
revenues will not exceed the costs of Petersburg Unit No. 4, is limited to
515 MW.
3.8 The total power of all sales by the CINergy Operating Companies and
CINergy Services under this and other agreements of the CINergy Operating
Companies and CINergy Services, for which the agreed upon demand charge is
determined based on Zimmer Unit No. 1 and Gibson Unit No. 5, is limited to
925 MWs (CINergy Operating Companies Zimmer Unit No. 1 Net Demonstrated
Capability of 612 MWs and Gibson Unit No. 5 Net Demonstrated Capability of
313 MWs) on an hourly basis. For sales in excess of the capacity limitation
of 925 MWs noted above, the rate shall consist of an energy charge of up to
110% of Out-of-Pocket Cost and a demand charge of up to $ 13 per megawatt
per hour (such charge pertains to the production component only), the total
charge in any one day shall be no more than the product of $209 and the
greatest number of megawatts reserved in any hour during said day and the
total charge in any one week shall be no more than the product of $1,252 and
the greatest number of megawatts reserved in any hour during said week.
Non-firm transmission service per the provisions of the CINergy Services,
Inc., FERC Electric Tariff, Original Volume No. 3, Non-Firm Point-to-Point
Transmission Service Standard Tariff - NFT (or any successor transmission
tariff of similar service) must be obtained; but in no event shall the total
revenue (energy charge and demand charge combined) be less than 100% of the
Out-of-Pocket Costs for supplying the Non-Displacement Energy for such
reservation. Notwithstanding all previous Subsections, when power is sold
under both this Subsection and Subsection 3.3 in any month, the total demand
charge will be the applicable weighted average demand charges in this
Subsection and Subsection 3.3. Such weighting will be developed by adding
the number of hours that power was provided under this Subsection times the
applicable demand charge under this Subsection and the number of hours that
power was provided under Subsection 3.3 times the applicable demand charge
in Subsection 3.3, with the sum being divided by the applicable number of
hours of the transaction (month, week, day or hours).
EXHIBIT III
(First Revision)
SERVICE SCHEDULE C
SHORT TERM POWER AND ENERGY
SECTION 1 - DURATION
1.1 This Service Schedule C, being a part of and under the Interconnection
Agreement (referred to herein as the "1992 Agreement"), dated as of May 1,
1992, among Indianapolis Power & Light Company (hereinafter called "IPL")
and PSI Energy, Inc., formerly named Public Service Company of Indiana, Inc.
(hereinafter called "PSI") and CINergy Services, Inc. (hereinafter called
"CINergy Services"), shall become effective as of the effective date of the
Third Amendment, dated June 30, 1995, to the 1992 Agreement and shall
continue in effect throughout the duration of the 1992 Agreement. IPL, PSI
and CINergy Services are sometimes hereinafter referred to individually as
"Party" or collectively as "Parties" where appropriate.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Any Party, by giving the other Parties notice, may reserve from the
other Parties (a) electric power ("Weekly Short Term Power") for periods of
one or more weeks or (b) electric power ("Daily Short Term Power") for
periods of one or more days whenever the Party requested to reserve the same
is willing to make such power available. Under ordinary circumstances such
reservation shall extend for not less than a calendar week if it begins with
Sunday or for the balance of the calendar week if it begins with any day
subsequent to Sunday; however, under unusual circumstances, the Parties may
mutually agree upon a reservation of Daily or Weekly Short Term Power for
a lesser number of days. In all cases the Party asked to supply Daily or
Weekly Short Term Power shall be the sole judge as to the amounts and
periods that it has electric power available that may be reserved by another
Party as Short Term Power. A transaction made by any Party under this
Service Schedule C shall not extend beyond twelve (12) months.
2.11 Prior to each reservation of Weekly or Daily Short Term Power,
the number of megawatts to be reserved, the period of the reservation, the
terms of such reservation, and the source of such power if the supplying
Party is in turn reserving such power from another interconnected system
which is not a signatory to the 1992 Agreement ("Third Party"), shall be
determined by the Parties. Such reservation shall be confirmed in writing
at the request of any Party. If during such period the conditions arise
that could not have been reasonably foreseen at the time of the reservation
and cause the reservation to be burdensome to the supplying Party, such
Party may by oral notice to the reserving Party, such oral notice to be
later confirmed in writing if requested by any Party, reduce the number of
megawatts reserved by such amount and for such time as it shall specify in
such notice, but kilowatts reserved hereunder that the supplying Party is
in turn reserving from a Third Party may be reduced only to the extent they
are reduced by such Third Party.
2.12 During each period that Weekly or Daily Short Term Power has
been reserved, the Party that has agreed to supply such power shall
upon call by the reserving Party deliver associated electric energy
("Weekly or Daily Short Term Energy") to the reserving Party as of the
interconnection point or points, as provided in Section 4.01 of
Article 4 of the 1992 Agreement at a rate during each hour of up to
and including the number of megawatts reserved.
SECTION 3 - COMPENSATION
3.1 Weekly Short-Term Power and Energy
3.1.1 Except as otherwise provided in Subsection 3.1.3 below, when
IPL is the supplying Party, PSI shall pay all of the following which
are applicable (the applicable demand charge rate per this Subsection
is limited by Subsection 3.5):
(a) for any week that Weekly Short-Term Power and Energy is
reserved, a demand charge rate to be agreed upon by the
Parties at the time such Weekly Short-Term Power and
Energy is reserved, at a rate of up to $3.89 per kilowatt
reserved, except, for each day (other than Sunday) during
any part of which the amount of such Weekly Short-Term
Power and Energy is reduced by IPL, the total demand
charge shall be reduced by one-sixth (1/6) of said agreed
upon demand charge rate for each megawatt of the reduction;
(b) for Weekly Short-Term Energy delivered that is generated
by IPL, an energy charge to be agreed upon by the Parties
at the time of the transaction of up to 110% of the Out-
Of-Pocket Cost (such cost being as of the interconnection
point or points, as defined in Article 4 of the 1992
Agreement, taking into account electrical losses incurred
from the source or sources of such energy to the
interconnection point or points) of supplying such
energy;
(c) for Weekly Short-Term Energy delivered that is purchased
by IPL from a Third Party, an energy charge of 100% of
the Out-Of-Pocket Cost paid therefor by IPL, plus one (1)
mill per kilowatt-hour of such purchased energy (for
difficult to quantify energy-related costs), plus any
transmission losses resulting on IPL s system on account
of the transaction, and plus any taxes incurred by IPL on
account of the transaction.
3.1.2 Except as otherwise provided in Subsection 3.1.3 below, when
PSI is the supplying Party, IPL shall pay all of the following which
are applicable (the applicable demand charge rate per this Subsection
is limited by Subsection 3.6):
(a) for any week that Weekly Short-Term Power and Energy is
reserved, a demand charge rate to be agreed upon by the
Parties at the time such Weekly Short-Term Power and
Energy is reserved. Said demand charge rate shall be at
a rate of up to $4,781 per megawatt reserved (such charge
pertains to the production component only), except for
each day (other than Sunday) during any part of which the
amount of such Weekly Short-Term Power and Energy is
reduced by PSI, the total demand charge shall be reduced
by one-sixth (1/6) of said agreed upon demand charge rate
(rounded to the nearest $0.10 per megawatt) for each
megawatt of the reduction. Non-firm transmission service
per the provisions of the CINergy Services, Inc., FERC
Electric Tariff, Original Volume No. 3, Non-Firm Point-
to-Point Transmission Service Standard Tariff - NFT (or
any successor transmission tariff of similar service)
must be obtained;
(b) for Weekly Short-Term Energy delivered that is generated
by PSI, an energy charge to be agreed upon by the Parties
at the time of the transaction of up to 110% of the Out-
Of-Pocket Cost (such cost being as of the interconnection
point or points, as defined in Article 4 of the 1992
Agreement, taking into account electrical losses incurred
from the source or sources of such energy to the
interconnection point or points) of supplying such
energy;
(c) for Weekly Short-Term Energy delivered that is purchased
by PSI from a Third Party, an energy charge of 100% of
the Out-Of-Pocket Cost paid therefor by PSI, plus $1.00
per megawatt-hour of such purchased energy (for difficult
to quantify energy-related costs), plus any transmission
losses resulting on the system of the CINergy Operating
Companies on account of the transaction, and plus any
regulatory commission charges and taxes incurred by PSI
on account of the transaction.
3.1.3 When Weekly Short-Term Power and Energy is purchased by the
supplying Party from a Third Party specifically for the reserving
Party, the reserving Party shall pay the supplying Party all of the
following which are applicable:
(a) the demand charge paid therefor by the supplying Party tothe
Third Party for such electric power and energy;
(b) when IPL is the supplying Party:
(1) for any week such Weekly Short-Term Power and Energy is
reserved, a demand charge rate per kilowatt to be agreed
upon by the Parties at the time such Weekly Short-Term
Power and Energy is reserved, at a rate of up to $0.29
per kilowatt reserved (such charge pertains to the
reservation of transmission). In the event the amount of
such Weekly Short-Term Power and Energy is reduced by
IPL, said demand charge shall be reduced by the sum of
(i) one-sixth (1/6) of the said agreed upon weekly rate
per kilowatt of the reduction for each day (other than
Sunday) during which such reduction is in effect, and
(ii) the reduction, if any, in the demand charge paid by
IPL to the Third Party;
(c) when PSI is the supplying Party:
(1) Non-firm transmission service per the provisions of the
CINergy Services, Inc., FERC Electric Tariff, Original
Volume No. 3, Non-Firm Transmission Service Standard
Tariff - NFT (or any successor transmission tariff of
similar service) must be obtained. In the event the
amount of such Weekly Short-Term Power and Energy is
reduced by PSI, said demand charge shall be reduced by
the sum of (i) one-sixth (1/6) of the said agreed upon
weekly rate per megawatt of the reduction for each day
(other than Sunday) during which such reduction is in
effect, and (ii) the reduction, if any, in the demand
charge paid by PSI to the Third Party;
(2) for each megawatt-hour purchased by PSI from a Third
Party to supply Weekly Short-Term Energy delivered during
such period, an energy charge of 100% of the Out-Of-
Pocket Cost paid therefor by PSI, plus $1.00 per
megawatt-hour (for difficult to quantify energy-related
costs), plus any transmission losses resulting on the
system of the CINergy Operating Companies on account of
the transaction, and plus any regulatory commission
charges and taxes incurred by PSI on account of the
transaction.
3.2 Daily Short-Term Power and Energy
3.2.1 Except as otherwise provided in Subsection 3.2.3 below, when
IPL is the supplying Party, PSI shall pay all of the following which
are applicable (the applicable demand charge rate per this Subsection
is limited by Subsection 3.5):
(a) for any day that Daily Short-Term Power and Energy is reserved,
a demand charge rate to be agreed upon by the Parties at the
time such Daily Short-Term Power and Energy is reserved, at a
rate of up to $0.778 per kilowatt reserved, except, for any day
during any part of which the amount of such Daily Short-Term
Power and Energy is reduced by IPL, the agreed upon demand
charge will only be paid for the power still available;
(b) for Daily Short-Term Energy delivered that is generated by IPL,
an energy charge of up to 110% of the Out-of-Pocket Cost (such
cost being as of the interconnection point or points, as
defined in Article 4 of the 1992 Agreement, taking into account
electrical losses incurred from the source or sources of such
energy to the interconnection point or points) of supplying
such energy;
(c) for Daily Short-Term Energy delivered that is purchased by IPL
from a Third Party, an energy charge of 100% of the Out-of-
Pocket Cost paid therefor by IPL, plus one (1) mill per
kilowatt-hour of such purchased energy (for difficult to
quantify energy-related costs), plus any transmission losses
resulting on IPL s system on account of the transaction, and
plus any taxes incurred by IPL on account of the transaction.
3.2.2 Except as otherwise provided in Subsection 3.2.3 below, when PSI is
the supplying Party, IPL shall pay all of the following which are applicable
(the applicable demand charge rates per this Subsection are limited by
Subsection 3.6):
(a) for any day that Daily Short-Term Power and Energy is reserved,
a demand charge rate to be agreed upon by the Parties at the
time such Daily Short-Term Power and Energy is reserved. Said
demand charge rate shall be at a rate of up to $797 per
megawatt reserved (such charge pertains to the production
component only), the total charge in any week shall be no more
than the product of $4,781 and the greatest number of megawatts
reserved in any day during said week, except for any day during
any part of which the amount of such Daily Short-Term Power and
Energy is reduced by PSI, the agreed upon demand charge will
only be paid for the power still available. Non-firm
transmission service per the provisions of the CINergy
Services, Inc., FERC Electric Tariff, Original Volume No. 3,
Non-Firm Point-to-Point Transmission Service Standard Tariff -
NFT (or any successor transmission tariff of similar service)
must be obtained;
(b) for Daily Short-Term Energy delivered that is generated by PSI,
an energy charge of up to 110% of the Out-of-Pocket Cost (such
cost being as of the interconnection point or points, as
defined in Article 4 of the 1992 Agreement, taking into account
electrical losses incurred from the source or sources of such
energy to the interconnection point or points) of supplying
such energy;
(c) for Daily Short-Term Energy delivered that is purchased by PSI
from a Third Party, an energy charge of 100% of the Out-of-
Pocket Cost paid therefor by PSI, plus $1.00 per megawatt-hour
of such purchased energy (for difficult to quantify energy-
related costs), plus any transmission losses resulting on the
system of the CINergy Operating Companies on account of the
transaction, and plus any regulatory commission charges and
taxes incurred by PSI on account of the transaction.
3.2.3 When Daily Short-Term Power and Energy is purchased by the
supplying Party from a Third Party specifically for the reserving
Party, the reserving Party shall pay the supplying Party all of the
following which are applicable:
(a) the demand charge paid therefor by the supplying Party to the
Third Party for such electric power and energy;
(b) when IPL is the supplying Party:
(1) for any day such Daily Short-Term Power and Energy is
reserved, a demand charge per kilowatt to be agreed upon by the
Parties at the time such Daily Short-Term Power and Energy is
reserved, at a rate of up to $0.058 per kilowatt reserved (such
charge pertains to the reservation of transmission). In the
event the amount of such Daily Short-Term Power and Energy is
reduced by IPL, said demand charge shall be reduced by the sum
of (i) one-sixteenth (1/16) of the said agreed upon daily rate
per kilowatt of the reduction for each hour in any day during
which such reduction is in effect, such reduction not to exceed
the agreed upon demand charge for such day, and (ii) the
reduction, if any, in the demand charge paid by IPL to the
Third Party;
(2) for each kilowatt-hour purchased by IPL from a Third Party
to supply Daily Short-Term Energy delivered during such period,
an energy charge of 100% of the Out-of-Pocket Cost paid
therefor by IPL, plus one (1) mill per kilowatt-hour (for
difficult to quantify energy-related costs), plus any
transmission losses resulting on IPL's system on account of the
transaction, and plus any taxes incurred by IPL on account of
the transaction;
(c) when PSI is the supplying Party:
(1) Non-firm transmission service per the provisions of the
CINergy Services, Inc., FERC Electric Tariff, Original Volume
No. 3, Non-Firm Transmission Service Standard Tariff - NFT (or
any successor transmission tariff of similar service) must be
obtained. In the event the amount of such Daily Short-Term
Power and Energy is reduced by PSI, said demand charge shall be
reduced by the sum of (i) one-sixteenth (1/16) of the said
agreed upon daily rate per megawatt of the reduction for each
hour in any day during which any such reduction is in effect,
such reduction not to exceed the agreed upon demand charge for
such day, and (ii) the reduction, if any in the demand charge
paid by PSI to the Third Party;
(2) for each megawatt-hour purchased by PSI from a Third Party
to supply Daily Short-Term Energy delivered during such period,
an energy charge of 100% of the Out-of-Pocket Cost paid
therefor by PSI, plus $1.00 per megawatt-hour (for difficult to
quantify energy-related costs), plus any transmission losses
resulting on the system of the CINergy Operating Companies on
account of the transaction, and plus any regulatory commission
charges and taxes incurred by PSI on account of the transaction.
3.3 Notwithstanding the rates stated in the Subsections 3.1.1, 3.1.3, 3.2.1
and 3.2.3 above, when IPL is the supplying Party, the sum of the demand and
energy charges for each specific reservation made pursuant to Section 2 of
this Service Schedule C shall not:
(1) exceed the total of:
(i) the product of the number of kilowatts reserved for such
reservation times the maximum Weekly or Daily demand charge,
whichever is applicable, specified above in Subsections 3.1.1,
3.1.3, 3.2.1 and 3.2.3, as appropriate; and
(ii) the product of the number of kilowatt-hours supplied for
such reservation times 110% of the average cost per kilowatt-
hour of energy generated by IPL's Petersburg Unit No. 4 for the
last preceding month during which it was run; or
(2) be less than 110% of the total Out-Of-Pocket Cost of supplying
the Short Term Energy for such reservation.
3.4 Notwithstanding the rates stated in Subsections 3.1.2, 3.1.3, 3.2.2 and
3.2.3 above, when PSI and CINergy Services are the supplying Party, the sum
of the demand and energy charges for each specific reservation made pursuant
to Section 2 of this Service Schedule C shall not:
(1) exceed the total of:
(i) the product of the number of megawatts reserved for such
reservation times the maximum Weekly or Daily demand charge,
whichever is applicable, specified above in Subsections 3.1.2,
3.1.3, 3.2.2 and 3.2.3, as appropriate, and plus
(ii) the product of the number of megawatt-hours supplied for
such reservation times 110% of the average cost per megawatt-
hour of energy generated by the CINergy Operating Companies
Zimmer Unit No. 1 and Gibson Unit No. 5 for the preceding
month; nor
(2) be less than 100% of the Out-Of-Pocket Costs of supplying the
Short Term Energy for such reservation.
3.5 The aggregate instant total capacity of all IPL sales under this and
other Service Schedules which are a part of this and other IPL Agreements,
for which the rates charged have been supported on the basis that total
revenues will not exceed the costs of Petersburg Unit No. 4, is limited to
515MW.
3.6 The total power of all sales by the CINergy Operating Companies and
CINergy Services under this and other agreements of the CINergy Operating
Companies and CINergy Services, for which the agreed upon demand charge is
determined based on Zimmer Unit No. 1 and Gibson Unit No. 5, is limited to
925 MWs (CINergy Operating Companies Zimmer Unit No. 1 Net Demonstrated
Capability of 612 MWs and Gibson Unit No. 5 Net Demonstrated Capability of
313 MWs) on an hourly basis. For sales in excess of the power limitation
of 925 MWs noted above, the rate shall consist of an energy charge of up to
110% of Out-of-Pocket Cost and a demand charge of up to $1,252 per megawatt
per week or a demand charge of up to $209 per megawatt per day, the total
charge in any one week shall be no more than the product of $1,252 and the
greatest number of megawatts reserved in any hour during said week (such
charge pertains to the production component only). Non-firm transmission
service per the provisions of the CINergy Services, Inc., FERC Electric
Tariff, Original Volume No. 3, Non-Firm Point-to-Point Transmission Service
Standard Tariff - NFT (or any successor transmission tariff of similar
service) must be obtained; but in no event shall the total revenue (energy
charge and demand charge combined) be less than 100% of the Out-of-Pocket
Costs of supplying the Short-Term Energy for such reservation.
Notwithstanding all previous Subsections, when power is sold under both this
Subsection and Subsection 3.1.2 in any week, the total demand charge will
be the weighted average demand charges in this Subsection and Subsection
3.1.2. Such weighting will be developed by adding the number of hours that
power was provided under this Subsection times the demand charge under this
Subsection and the number of hours that power was provided under Subsection
3.1.2 times the demand charge in Subsection 3.1.2, with such sum being
divided by the total number of hours in the week. Also, when power is sold
under both this Subsection and Subsection 3.2.2 in any day, the total demand
charge will be the weighted average demand charges in this Subsection and
Subsection 3.2.2. Such weighting will be developed by adding the number of
hours that power was provided under this Subsection times the demand charge
under this Subsection and the number of hours that power was provided under
Subsection 3.2.2 times the demand charge in Subsection 3.2.2, with such sum
being divided by the total number of hours in the day.
EXHIBIT IV
(SECOND REVISION)
SERVICE SCHEDULE D
CARMEL SOUTHEAST TAP NETWORK POWER AND ENERGY TRANSFER
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of and under the Interconnection
Agreement (referred to herein as the "1992 Agreement") dated as of May 1,
1992 between Indianapolis Power & Light Company (hereinafter called "IPL")
and PSI Energy, Inc., formerly named Public Service Company of Indiana,
Inc., (hereinafter called "PSI") and CINergy Services, Inc. (hereinafter
called "CINergy Services"), shall become effective as of the earlier date
of either September 1, 1995 or the effective date of the Third Amendment,
dated June 30, 1995, and shall continue in effect through August 31, 1996,
unless extended as provided in Section 6 hereof. IPL, PSI and CINergy
Services are sometimes hereinafter referred to individually as "Party" or
collectively as "Parties" where appropriate.
SECTION 2 - FACILITIES TO BE PROVIDED
2.1 PSI shall provide, install, operate and maintain, at its own expense,
during the term of this Service Schedule D as defined in Section 6 hereof,
the following facilities:
(i) At its Carmel Southeast Substation - a 138,000 volt three-phase
interrupting device, a 24/40 MVA transformer, 12,470 volt metering
equipment, relaying, switching, a supervisory control remote terminal unit,
a communication circuit from the supervisory unit to IPL s Load Dispatch
Office and appurtenant equipment, all of which shall be subject to the prior
approval of IPL. PSI shall be responsible for installing, owning and
maintaining all necessary protection equipment required by IPL to protect
IPL s facilities associated with Carmel Tap. PSI s remote terminal unit
shall provide data acquisition, remote status and control of the load and
allow PSI to provide real time dispatch of their generation to their load
as well as load control while IPL will be provided real time breaker status
and load data.
(ii) A 138,000 volt transmission line extending from Carmel
Southeast Substation to Transmission Tower Number 7 (Map
Section 173A) on IPL's 138,000 volt North-River Road (132-57)
transmission line, together with a 138,000 volt tap at such
tower, to be known as the Carmel Tap Point.
2.2 IPL shall provide, install, operate and maintain, as direct assignment
facilities at the sole benefit and expense of PSI, during the term of the
Carmel Tap Point as defined in Section 6 hereof, a 138,000 volt two-way
switching point with supervisory controlled 138,000 volt line interrupting
disconnect switches and associated facilities such as a switch tower,
supervisory terminal unit and communication circuit at the Carmel Tap Point.
SECTION 3 - SERVICES TO BE RENDERED
3.1 The Parties hereto mutually agree that their respective radial
distribution systems will not be operated in parallel through the Carmel Tap
Point. Electric energy supplied by IPL to PSI at the Carmel Tap Point will
be treated as capacity and energy simultaneously transferred into IPL's
system by PSI through the other interconnection points of the Parties and
will be used only to supply the ultimate consumers of PSI who are or may be
served from PSI's Carmel Southeast Substation. Any capacity or energy
delivered by IPL to PSI through the Carmel Tap Point shall be simultaneously
supplied by PSI to IPL through any of the interconnection points of the
Parties. PSI s supplied energy shall include an adder of approximately 3%-
5% to the capacity and energy delivered to the Carmel Tap by IPL to
compensate IPL for capacity and energy losses occurring on IPL's system and
PSI s tapped transmission line and transformer bank (metered at secondary
voltage) due to the transfer of energy to the Carmel Tap Point.
3.2 IPL shall provide PSI with the following services:
1) Firm, network transmission service including a capacity
reservation (34,500 volt, 138,000 volt and above) of up to and
including 20 MW s (measured at the other IPL/PSI
interconnection points as defined in the 1992 Agreement). Said
service and reservation shall be planned for and provided on
the same basis as IPL s firm native load customers only during
the term of this service schedule as set forth in Section 6
herein of this Agreement.
2) Non-firm transmission service (34,500 volt, 138,000 volt and
above) up to and including 30 MW s (measured at the other
IPL/PSI interconnection points in the 1992 Agreement) in
addition to the firm transmission listed in Point 1 above.
Said non-firm service shall be on an as available,
interruptible basis when requested by PSI.
Upon IPL s request, PSI shall immediately curtail and/or interrupt its firm
load served by the 20 MW firm network transmission and reservation service
on the same basis as IPL s firm native load customers. If PSI's demand
exceeds their reservation (herein called "excess loading") PSI shall
demonstrate that all such demand exceeding their reservation is 1)
immediately interruptible by contract or 2) that such excess loading
occurred due to emergency switching lasting less than a total of two (2)
weeks within any six-month period. Otherwise such excess loading shall be
treated as having automatically increased PSI's reservation, for billing
purposes only, until IPL is satisfied PSI has taken actions to permanently
eliminate such excess loading. IPL shall coordinate non-emergency
maintenance outages with PSI and provide a minimum notification by 12:00
noon of the day before the scheduled outage.
3.3 IPL and PSI shall periodically conduct independent and/or joint studies
of their future systems to serve the Indianapolis northeast metropolitan
area. PSI shall annually update and provide IPL with their ten year demand
projections for the Carmel Tap Point. If such studies indicate problems due
to PSI's 20 MW reservation or projected increase in reservation, then IPL
and PSI shall jointly or independently, as soon as practicable, develop
plans and estimates of cost for the installation of any additional equipment
or facilities necessary to effect a long term solution to such problem so
that transmission services hereunder may be reliably continued in accordance
with IPL standards.
IPL's studies of this service cover the first five years and identified
facilities during that period which may need to be upgraded if area demand
grows faster than presently projected. If facility upgrades are required,
PSI shall pay annual carrying costs on a monthly basis during the time
period from the in-service date of the facilities until IPL's area load
increases by the amount of PSI s 20 MW reservation plus actual and projected
increases in reservation (herein called "period of advancement") after which
the remaining costs shall be rolled into IPL s rate analysis. Any time
PSI s reservation, as determined under 3.2 above, requires IPL to install
facilities in advance of its need, PSI shall pay annual carrying cost on
such facilities during the period of advancement. Increased reservations
beyond 20 MWs shall be treated as interruptible until all necessary
facilities to reliably accommodate these loads are placed in service. IPL
will not increase or upgrade the capacity of its existing or planned
transmission facilities in order to provide service under this Agreement if
doing so would unduly 1) impair IPL s system reliability or 2) jeopardize
the benefits of service or 3) increase the cost of service to IPL's Native
Load Customers and other customers to whom IPL has a pre-existing contractual
obligation.
In the event PSI does not elect to continue its reservation after the term
of this Service Schedule, PSI shall pay 1) the stranded cost of all IPL's
facilities directly assignable to providing firm service for PSI's
reservation and 2) the remaining annual cost on a monthly basis of all
system improvements from the termination date until IPL's area load increase
equals the amount of PSI's reservation. In the event IPL can obtain
regulatory approvals for facility modifications needed to increases PSI's
reservation, then firm service shall not be provided for the amount of the
increased service reservation.
3.4 PSI shall provide for ancillary services such as dynamic reactive
var/voltage support, all generation reserves, real time generation dispatch,
load following and dispatch control services needed to support the operation
of the Carmel Tap Point.
3.5 IPL shall file with the FERC an amendment to Service Schedule D for all
direct assignment facilities (not covered in Section 2.2) to be provided for
PSI by IPL under this Service Schedule and for all costs for advanced system
improvements during the "period of advancement" due to the PSI transmission
reservation provided under Service Schedule D. FERC s failure to accept the
cost assignments for either direct assignment facilities and/or advanced
system improvements due to the PSI network load service provided in this
Service Schedule D shall result in 1) IPL terminating its obligation to
provide and plan for PSI s transmission reservation as covered in Section
3.2 and Section 3.3 above or 2) PSI may elect to reduce the level and/or
firmness of PSI s transmission reservation so that additional direct
assignment facilities and/or system improvement facility advancements won t
be needed or 3) PSI may elect to terminate service provided hereunder
provided that upon termination of this Service Schedule D by PSI, PSI shall
remain responsible for paying IPL all costs remaining for all direct
assignment facilities provided by IPL and all remaining costs for all
advanced system improvements attributed to PSI during the period of
advancement where said facilities have been filed with and accepted by the
FERC including the direct assignment facilities provided initially under
Section 2.2. The stranded cost of the direct assignment facilities provided
under Section 2.2 shall be calculated and marked up for tax effects as shown
in Attachment 1 and shall be paid by PSI within 30 days of receipt of the
bill from IPL.
SECTION 4 - DEVIATIONS IN DELIVERIES AT CARMEL TAP POINT
4.1 The Parties agree that with respect to the Carmel Tap Point, PSI shall
simultaneously supply (including adjustments for losses) to IPL from PSI s
other interconnection points with IPL the capacity and energy delivered to
PSI by IPL. The Parties recognize, however, that despite their best efforts
to simultaneously supply and deliver capacity and energy (including
adjustments for losses) deviations between actual and scheduled energy
transfers may occur. Electric energy resulting from such deviations shall,
at the option of IPL, be settled for either by return of equivalent energy
or by payment of Out-Of-Pocket Costs. If equivalent energy is returned, it
shall be returned at times when the generating costs of IPL are equivalent
to the generating costs of IPL at the time of the deviations or, if IPL
elects to have equivalent energy returned under different conditions, it
shall be returned in such amounts, to be mutually agreed upon, as will
compensate IPL for the difference in conditions.
IPL, at its option, may elect to bill for such Out-Of-Pocket Costs, plus ten
percent of such cost, for any energy supplied over and above that scheduled
by PSI for any hour or hours during the billing period. Such costs shall
be determined at the Carmel Tap Point by taking into account electrical
losses incurred from the source or sources of such energy to said Tap Point.
4.2 If IPL elects to bill for any energy supplied over and above that
scheduled by PSI for any hour or hours during the billing period where the
energy was supplied by a Third Party then in accordance with the FERC Order
84 the maximum amount to be billed by IPL to PSI shall be 100% of the Third
Party demand and energy charge plus 1 mill/kwhr (the 1 mill/kwhr adder is
applicable only to transactions with a duration of less than one year) plus
IPL's network transmission rate as accepted by the FERC under this Service
Schedule D.
SECTION 5 - COMPENSATION
5.1 FIRM SERVICE - Electric power measured in kilowatts supplied by PSI and
delivered at the Carmel Tap Point under the 1992 Agreement by IPL to PSI
shall be billed on a monthly basis the annual cost of IPL's transmission
system multiplied by the ratio of the sum of PSI s twelve 20 MW reservations
divided by IPL s annual system peak demand which equals $283,200 annually
as calculated in the cost support Appendix A. The loss factors consisting
of a 3-5% adder, as noted in Section 3.1 hereof, shall include PSI's radial
transmission line and transformer bank associated with the Carmel Tap Point
and IPL s 34,500 volt and above transmission system. The loss factors shall
include PSI s radial transmission line and transformer bank associated with
the Carmel Tap Point and IPL s transmission system. The loss factors shall
be determined by the annual transmission system loss studies performed by
IPL and PSI. Also, increases in PSI s reservation shall be billed by using
the same methodology.
5.2 NON-FIRM SERVICE - Electric power measured in kilowatts supplied by PSI
and delivered at the Carmel Tap Point under the 1992 Agreement by IPL to PSI
shall be billed at $1.18 per kilowatt-month plus $0.01 per kilowatt-month
for IPL dispatch control. This demand charge for non-firm service applies
to usage above PSI s firm service reservation and shall be based upon the
difference in maximum hourly demand in kilowatts measured and the amount of
PSI's reservation in the calendar month of billing. The loss factors
consisting of a 3-5% adder, as noted in Section 3.1 hereof, shall include
PSI s radial transmission line and transformer bank associated with the
Carmel Tap Point and IPL s 34,500 volt and above transmission system. The
loss factors shall be determined by the annual transmission system loss
studies performed by IPL and PSI.
5.3 DIRECT ASSIGNMENT FACILITIES - PSI shall pay IPL on a monthly basis
IPL's annual charges on the total installed cost of the facilities provided
in Section 2.2 above multiplied by IPL's annual carrying charges as
calculated in Attachment 1 and revisions will be filed with the FERC.
SECTION 6 - TERM OF AGREEMENT
6.1 This Service Schedule shall terminate August 31, 1996 unless PSI
notifies IPL at least six (6) months prior to such termination date that it
desires to continue service to the Carmel Tap Point; provided however, that
any continued service is subject to such terms and conditions as are
mutually agreed to by the Parties.
THIRD AMENDMENT
to the
INTERCONNECTION AGREEMENT
,dated May 1, 1992,
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
PSI ENERGY, INC.
_____________________________________
Dated June 30, 1995
INDIANAPOLIS POWER & LIGHT COMPANY
FEDERAL ENERGY REGULATORY COMMISSION
Rate Schedule FERC No. 23
PSI ENERGY, INC.
FEDERAL ENERGY REGULATORY COMMISSION
Rate Schedule FERC No. 247
THIRD AMENDMENT
to the
INTERCONNECTION AGREEMENT
among
INDIANAPOLIS POWER & LIGHT COMPANY
and
PSI ENERGY, INC.
AND CINERGY SERVICES, INC.
0.01 THIS THIRD AMENDMENT, dated on the 30th day of June 1995,
among INDIANAPOLIS POWER & LIGHT COMPANY (hereinafter referred to as
"IPL"), a corporation organized and existing under the laws of the State
of Indiana and PSI ENERGY, INC. (hereinafter referred to as "PSI"), a
corporation organized and existing under the laws of the State of
Indiana, and CINERGY SERVICES, INC. (hereinafter referred to as "CINergy
Services"), a corporation organized and existing under the laws of the
State of Delaware. IPL, PSI and CINergy Services are sometimes
hereinafter referred to individually as "Party" and collectively as
"Parties" where appropriate.
W I T N E S S E T H:
0.02 WHEREAS, There is now in force and effect between IPL and PSI
an Interconnection Agreement, dated as of May 1, 1992, (said
Interconnection Agreement being the Ninth Supplement to the 1962
Interconnection Agreement between IPL and PSI, herein called the "1992
Agreement"); and
0.03 WHEREAS, The Cincinnati Gas & Electric Company ("CG&E") and
PSI merged on October 24, 1994, and formed CINergy Corp. with CG&E and
PSI now being called the "CINergy Operating Companies"; and
0.04 WHEREAS, CG&E, PSI and CINergy Services are parties to a
Service Agreement, dated March 2, 1994, which has been approved by the
Securities and Exchange Commission and the Indiana Utility Regulatory
Commission (IURC), under which CINergy Services will act as PSI s agent
in administering PSI s interconnection agreements and the three companies
are also parties to an Operating Agreement, dated March 2, 1994, on file
with and accepted by the FERC and approved by the IURC under which
CINergy Services will dispatch the generating units of CG&E, PSI and
CINergy Services; and
0.05 WHEREAS, the Parties desire to modify the 1992 Agreement, as
hereinafter set forth; and
0.06 NOW, THEREFORE, in consideration of the premises and mutual
covenants and agreements of the Parties, as herein set forth, the Parties
hereby agree as follows:
SECTION 1 Section 2.04 of the 1992 Agreement shall be amended by
deleting the current language in its entirety and inserting in lieu
thereof replacement language, thereby amending Section 2.04 to read as
follows:
"2.04. Out-Of-Pocket Costs. The term "Out-of-Pocket Cost"
of energy from generating units on the system of a Party shall
consist of any costs that are directly incurred by IPL or PSI by
reason of its generation of such energy and which otherwise would
not have been incurred by such system including, but not limited
to, fuel, labor, operation, maintenance, start-up, fuel handling,
taxes, regulatory commission charges, and emission allowances.
"Out-of-Pocket Cost" of energy purchased from a third party by the
supplying Party shall consist of the total amount paid therefore by
the supplying Party which otherwise would not have been paid by
such Party, plus any cost which otherwise would not have been
incurred, including, but not limited to, regulatory commission
charges, emission allowances, transmission losses and taxes related
to such transaction.
Tax expenses will be the expenses that are incurred as taxes either
in connection with the sale or production of such energy."
SECTION 2 Section 2.05 of the 1992 Agreement shall be amended by
deleting the current language in its entirety and inserting in lieu
thereof replacement language, thereby amending Section 2.05 to read as
follows:
"2.05. Emission Allowances. The federal Clean Air Act, as
amended, 42 U.S.C. Section 7401 et seq. (hereinafter referred to as
"Clean Air Act"), establishes certain annual maximum sulfur dioxide
("SO2") levels, stated in terms of required emission allowances,
for flue gases emitted by electric generating units, including
units operated by IPL, PSI and other electric utilities who may
supply electric energy for transactions under this 1992 Agreement.
The generator of the electric energy supplied and delivered under
this 1992 Agreement is required by the Clean Air Act to have
adequate "allowances" (as defined by Section 402(3) of the Clean
Air Act in conjunction with Section 403(f) of the Clean Air Act) in
order to generate such electric energy. To the extent that either
IPL or PSI are required by the Clean Air Act to have additional
allowances by reason of its generation of electric energy to be
supplied by it under this 1992 Agreement, which allowances would
otherwise not have been required by such supplying Party, then,
unless the supplying Party otherwise agrees in advance in writing,
at the discretion of the supplying Party, the Party receiving such
energy shall be responsible for the cost or the actual furnishing
(without cost to the supplying Party) of adequate allowances to the
supplying Party in order for such Party to supply such energy under
this Agreement. The Parties shall establish, by mutual agreement,
appropriate procedures in order to carry out the provisions of this
Section 2.05, including a statement of costs before any
transactions under the Service Schedules attached hereto are
started. Also, prior to implementation of every transaction under
the Service Schedules attached hereto, the purchasing Party must
declare whether they will pay in cash or return SO2 Allowances in-
kind for any consumption of SO2 Allowances directly attributed to
such transaction, if any.
It shall be the responsibility of the supplying Party to provide
the receiving Party, before the transaction begins, with a
statement of the estimated emission allowance charges associated
with the transaction which the supplying Party is seeking to add to
the rates to be charged under the applicable Service Schedule.
Failure of the supplying Party to provide a statement of such
charges before the transaction begins shall constitute a waiver of
the recovery of any such costs. In establishing such procedures,
the Parties shall recognize that the determination of the
additional allowances required in order to generate the electric
energy to be supplied hereunder is subject to variables contingent
upon the loading and operating conditions on the system where the
actual generation occurs.
The procedures so established by the Parties shall be in accord with
sound engineering principles of power plant and system operation, and
shall require the furnishing of such additional allowances at such times
and in such amounts as will be equitable to the supplying Party.
When IPL is the supplier of energy and emission allowances, the
recovery of the applicable costs for the actual furnishing of
adequate allowances in order for IPL to generate and supply such
energy will be implemented in the following manner:
(1) The Buyer shall compensate IPL for the
consumption of Sulfur Dioxide Emissions
Allowances ("SO2 Allowances") directly attributed
to electric energy sales by IPL to Buyer under
the Service Schedules. Such compensation shall,
at Buyer s option, be made by either supplying
IPL with the number of SO2 Allowances directly
attributed to such energy sales, or by
reimbursing IPL for the incremental cost of such
number of SO2 Allowances, rounded to the nearest
whole SO2 Allowance.
If Buyer opts to reimburse IPL in cash for SO2
Allowances associated with Buyer s energy
purchases for the month, the cash amount due at
billing will be determined by multiplying the
number of SO2 Allowances attributed to the sale
by the incremental cost of the SO2 Allowances, as
determined in Subsection 2(b) of this Section
2.05, at the time of the sale.
If Buyer opts to reimburse IPL in SO2 Allowances,
Buyer will record or transfer to IPL s account,
the number of SO2 Allowances calculated below, at
the time cash settlement for the energy is due.
In all cases, Buyer will transfer to IPL s
account the number of SO2 Allowances due IPL for
calendar year no later than January 15 of the
following year. "Transfer to IPL s account"
shall mean, for purposes of the Amendment, the
transfer by the USEPA of the requisite number of
SO2 Allowances to IPL s Allowance Tracking System
account and the receipt by IPL of the Allowance
Transfer Confirmation.
(2) Determination of SO2 Emission Allowances Due IPL
(a) Number of SO2 Allowances
The number of SO2 Allowances directly attributed
to an energy sale made by IPL shall be determined
for each hour, by determining the contribution
from each of the unit(s) from which the energy
sale is being made for that hour. For each unit,
the emission rate in pounds of SO2 per million
Btu will be determined each month, from fuel
sulfur content, control equipment performance,
and continuous emissions monitoring data. The
emission rate and the unit heat rate will be used
to determine the SO2 Allowances used per
megawatt-hour ("MWH"). The energy from each unit
attributable to the sale, and the SO2 Allowances
per MWH for each unit, will be used to determine
the number of SO2 Allowances attributable to the
sale.
(b) Cost of SO2 Allowances
The incremental SO2 Allowance cost used to
determine economic dispatch of IPL s generating
units in any month, will also be the basis used
to determine compensation for IPL s energy sales.
The incremental SO2 Allowances cost, in dollars
per ton of SO2, shall be determined each month
and will be based on the Cantor Fitzgerald offer
price for SO2 Allowances, or if such is not
available, then another nationally recognized SO2
Allowance trading market price or market price
index, at the beginning of the month. The SO2
Allowance value may be changed at any time during
the month to reflect the more current incremental
cost, or market price, for SO2 Allowances. Buyer
will be notified of the new SO2 Allowance value
prior to dispatch of IPL energy to Buyer.
When PSI is the supplier of energy and emission allowances, the
recovery of the applicable costs for the actual furnishing of
adequate allowances in order for PSI to generate and supply such
energy will be implemented in the following manner:
(1) The current Environmental Protection Agency
("EPA") auction price to value emission
allowances will be used for energy sales
transactions. The dispatch criteria may be
revised from time to time if the emission
allowance purchases on the average are determined
to be significantly different than the EPA
auction price.
(2) For each hour in which there is a transaction for
energy services using an Out-of-Pocket Cost rate under
this 1992 Agreement, PSI will:
(a) identify the generation sources used to provide
the transaction s energy by identifying the
energy that would not have been used had the
transaction not been in effect that hour by using
the same after-the-fact incrementing costing
model that is used to calculate the incremental
cost of fuel under this 1992 Agreement;
(b) determine, using the following formula, the
quantity of emission allowances related to the
energy transaction: (i) by calculating an
incremental heat rate for the appropriate
generating unit and the corresponding incremental
SO2 emission levels, as determined by the
computer based tools, for the identified units
dispatched to serve the transaction; (ii)
applying the following formula for each such
unit; (iii) adding together the total number of
tons of SO2 produced per million BTU (i.e.,
British Thermal Unit) of fuel burned by each such
unit for the transaction; and (iv) letting one
(1) emission allowance equal one (1) ton of SO2
so produced.
# OF UNITS
The sum of [MBTU SALE - MBTU NO SALE] * [SO2] * [100%-SE]
100%
MBTU SALE = Million BTU consumed on unit n with sale.
MBTU NO SALE = Million BTU consumed on unit n without
sale.
SO2 = Tons of SO2 produced per million BTU of fuel
burned.
SE = Scrubber Efficiency in %.
PSI will perform periodic tests to maintain the
accuracy and validity of such emission rate
information. Because some generating sources may
not be subject to the Clean Air Act during Phase
I or Phase II thereunder, there will be no
emission allowance charges included for the
utilization of such an energy source while it is
not subject to such requirements. One (1)
emission allowance shall be assigned to each ton
of SO2 emitted to serve the transaction.
Fractions of emission allowance tons will be
rounded up to the next whole number when the
fraction is equal to or greater than .5 and
rounded down when the fraction is less than .5.
(3) The purchasing Party of energy shall have the option of
purchasing or providing emission allowances for each
transaction. The purchasing Party shall notify PSI of
its election to purchase or provide emission allowances
prior to the start of the transaction. The running
quantity of emission allowances charged or furnished
will be shown on the monthly invoices to the purchasing
Party.
(4) When the purchasing Party of energy elects to purchase
the emission allowances from PSI, then the quantity of
emission allowances used will be included as part of
the charges on the monthly invoices to the purchasing
Party.
(5) By January 15th of the year following the calendar year
in which the transaction occurred, the purchasing Party
of energy shall transfer the appropriate emission
allowances to PSI for the emission allowances used when
the allowances are provided in kind.
(6) PSI has adopted the same incremental cost calculation
to value emission allowances for dispatch criteria as
for billing energy transactions."
SECTION 3 A new Article 18 is hereby inserted in the 1992
Agreement as follows:
"ARTICLE 18
AGENCY OF CINERGY SERVICES, INC.
18.01. CINergy Services joins in the execution of this
Agreement for the sole purpose of serving and acting as agent for
PSI."
SECTION 4 The following Service Schedules, attached to and made a
part of the 1992 Agreement and designated as Exhibits I, II and III, are
hereby cancelled and terminated:
Description Exhibit
A: Emergency Service I
B: Interchange Energy II
C: Short Term Power and Energy III
SECTION 5 The following Service Schedules, attached hereto and
designated as Appendices I, II and III to this Third Amendment, are
hereby made a part of the 1992 Agreement:
Exhibit
Description (First Revision)
A: Emergency Service I
B: Interchange Energy II
C: Short Term Power and Energy III
SECTION 6 Service Schedule D - Carmel Southeast Tap Network Power
and Energy Transfer, which is presently Exhibit IV (First Revision) to
the 1992 Agreement, is hereby replaced in its entirety by a new Exhibit
IV (Second Revision) which is attached hereto and designated as Appendix
IV to this Third Amendment.
SECTION 7 The Emission Allowance guidelines filed by the Parties
with the FERC in Docket No. PL95-1-000 (IPL - Second Amendment and PSI -
Appendix EA) are hereby cancelled and withdrawn with respect to the
Parties. The guidelines are replaced with the new language contained in
Section 2.05 of the 1992 Agreement.
SECTION 8 The Third Amendment shall be effective from the time it
is accepted for filing by the Federal Energy Regulatory Commission, or as
otherwise specified by such Commission in accordance with its Rules and
Regulations, to the expiration date of the 1992 Amendment.
SECTION 9 Except as hereinabove modified and amended, all of the
terms and conditions of the 1992 Agreement shall remain in full force and
effect.
SECTION 10 This Third Amendment shall inure to the benefit of, and
be binding upon, the successors and assigns of the respective Parties
hereto.
IN WITNESS WHEREOF, the Parties have caused this Third Amendment to
be executed by their duly authorized officers and attested (as
necessary), as of the date first above mentioned.
INDIANAPOLIS POWER & LIGHT CINERGY SERVICES, INC.
(IPL) (CINergy Services)
By: /s/ John R. Brehm By: /s/ Terry E. Bruck
John R. Brehm Terry E. Bruck
Senior Vice President Group Vice President
Finance and
Information Services
Attest: PSI ENERGY, INC.
(PSI)
By: /s/ Bryan G. Tabler By: /s/ John M. Mutz
Bryan G. Tabler John M. Mutz
Senior Vice President President
Secretary and
General Counsel
EXHIBIT I
(First Revision)
SERVICE SCHEDULE A
EMERGENCY SERVICE
SECTION 1 - DURATION
1.1 This Service Schedule A, being a part of and under the
Interconnection Agreement (referred to herein as the "1992 Agreement"),
dated as of May 1, 1992, among Indianapolis Power & Light Company
(hereinafter called "IPL") and PSI Energy, Inc., formerly named Public
Service Company of Indiana, Inc. (hereinafter called "PSI") and CINergy
Services, Inc. (hereinafter called "CINergy Services"), shall become
effective as of the effective date of the Third Amendment, dated June 30,
1995, to the 1992 Agreement and shall continue in effect throughout the
duration of the 1992 Agreement. IPL, PSI and CINergy Services are
sometimes hereinafter referred to individually as "Party" or collectively
as "Parties" where appropriate.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Conditional Service. Subject to the provisions of Subsection 2.2 of
this Section 2, in the event of a breakdown or other emergency in or on
the system of any Party involving either sources of power or transmission
facilities, or both, impairing or jeopardizing the ability of the Party
suffering the emergency to meet the loads of its system, another Party
shall deliver to such Party electric energy that it is requested to
deliver; provided, however, that a Party shall not be obligated to
deliver such energy which, in its sole judgment, it cannot deliver
without interposing a hazard to or economic burden upon its operations or
without impairing or jeopardizing the other load requirements of its
system and provided further, that a Party shall be obligated to deliver
electric energy to another Party for a period in excess of forty-eight
(48) consecutive hours during any single emergency.
2.2 Non-performance. The Parties recognize that the delivery of
electric energy as provided in Subsection 2.1 of this Section 2 is
subject to two conditions which may preclude the delivery of such energy
as so provided: (a) the Party requested to deliver electric energy may
be suffering an emergency in or on its own system as described in said
Subsection 2.1, or (b) the system of a Party may be delivering electric
energy, under a mutual emergency interchange agreement, to the system of
another interconnected company which is suffering any emergency in or on
its system. Under conditions as cited under (a) above, a Party shall not
be considered to be in default hereunder if it is unable to comply with
the provisions of said Subsection 2.1. Under conditions as cited under
(b) above, a Party shall not be considered to be in default hereunder if
it is unable to comply with the provisions of said Subsection 2.1;
provided, however, that such Party shall make every effort consistent
with the terms of its contract with said other interconnected company to
make the electric energy as provided in Subsection 2.1 available to
another Party hereto as soon as possible.
2.3 Reserve Generating Capacity Review. If at any time the record over
a reasonable prior period shows clearly that one of the Parties has
failed to deliver energy in accordance with and subject to the provisions
of Subsection 2.1 and Subsection 2.2 of this Section 2, a Party, by
written notice given to another Party, may call for a joint study by the
Parties of the reserve generating capacity in and provided for their
respective systems and of their respective system transmission facilities
affecting the supply and delivery of power and energy under the 1992
Agreement. It shall be the purpose of such study to determine the
adequacy or inadequacy of reserve generating capacity and transmission
facilities being provided to meet the requirements of the Parties
respective systems, reflecting obligations under the 1992 Agreement, and,
if inadequate, the extent of the burden that a Party may be placing upon
another Party. If it should be found that a Party is placing an
unreasonable burden upon another Party, the Party causing such burden
shall take such measures as are necessary to remove the burden from
another Party, or the Parties shall enter into such arrangements as shall
provide for equitable compensation to the Party being burdened.
SECTION 3 - COMPENSATION
3.1 When IPL is the Supplying Party:
3.11 Emergency Energy delivered that is generated by IPL shall be
settled for, at the option of IPL, either by the return of
equivalent energy at a mutually acceptable time upon request of IPL
or by payment of the greater of (a) 110% of the Out-Of-Pocket Cost
(such cost being as of the delivery point or points, as referred to
in Section 4.01 of the 1992 Agreement, taking into account
electrical losses incurred from the source or sources of such
energy to the delivery point or points) of supplying such energy,
or (b) $0.10 per kilowatt-hour.
3.12 Emergency Energy delivered that is purchased by IPL from a
third party shall be settled for by payment of an energy charge of
100% of the Out-Of-Pocket Cost paid therefor by IPL, plus an amount
to be agreed upon by the Parties at the time of the transactions of
up to 4.6 mills per kilowatt-hour (consisting of up to 3.6 mills
per kilowatt-hour for bulk transmission charge plus 1 mill per
kilowatt-hour for difficult to quantify energy-related costs), plus
any transmission losses resulting on IPL's system on account of the
transaction, and plus any taxes incurred by IPL on account of the
transaction.
3.2 When PSI is the Supplying Party:
3.21 Emergency Energy delivered that is generated by PSI shall be
settled for by payment of the greater of (a) 110% of the Out-Of-
Pocket Cost (such cost being as of the interconnection point or
points, as referred to in Section 4.01 or the 1992 Agreement,
taking into account electrical losses incurred from the source or
sources of such energy to the interconnection point or points) of
supplying such energy. Non-firm transmission service per the
provisions of the CINergy Services, Inc., FERC Electric Tariff,
Original Volume No. 3, Non-Firm Point-to-Point Transmission Service
Standard Tariff - NFT (or any successor transmission tariff of
similar service) must be obtained, or (b) $100 per megawatt-hour.
3.22 Emergency Energy delivered that is purchased by PSI from a
third party shall be settled for by payment of the greater of (a)
of an energy charge of 100% of the Out-Of-Pocket Cost paid therefor
by PSI plus $1.00 per megawatt-hour (for difficult to quantify
energy-related costs), plus any transmission losses resulting on
the system of the CINergy Operating Companies on account of the
transaction. Non-firm transmission service per the provisions of
the CINergy Services, Inc., FERC Electric Tariff, Original Volume
No. 3, Non-Firm Point-to-Point Transmission Service Standard Tariff
- NFT (or any successor transmission tariff of similar service)
must be obtained, and plus any regulatory commission charges and
taxes incurred by PSI on account of the transaction, or (b) $100
per megawatt-hour.
3.3 If the option of returning electric energy under Subsection 3.11 is
exercised, then it shall be returned at times when the load conditions of
the Party receiving it are equivalent to the load conditions of such
Party at the time the energy for which it is returned was delivered or,
if such Party elects to have equivalent energy returned under different
conditions, it shall be returned in such amounts, to be agreed upon by
the Operating Committee under the Agreement, as will compensate the Party
for the difference in conditions.
EXHIBIT II
(First Revision)
SERVICE SCHEDULE B
INTERCHANGE ENERGY
SECTION 1 - DURATION
1.1 This Service Schedule B, being a part of and under the
Interconnection Agreement (referred to herein as the "1992 Agreement"),
dated as of May 1, 1992, among Indianapolis Power & Light Company
(hereinafter called "IPL") and PSI Energy, Inc., formerly named Public
Service Company of Indiana, Inc. (hereinafter called "PSI") and CINergy
Services, Inc. (hereinafter called "CINergy Services"), shall become
effective as of the effective date of the Third Amendment, dated June 30,
1995 to the 1992 Agreement and shall continue in effect throughout the
duration of the 1992 Agreement. IPL, PSI and CINergy Services are
sometimes hereinafter referred to individually as "Party" or collectively
as "Parties" where appropriate.
SECTION 2 - SERVICES TO BE RENDERED
Economy Energy
2.1 It is recognized that from time to time that any of the Parties may
have electric energy (herein called "Economy Energy") available from
surplus capacity either on its own system or from sources outside its own
system, or both, and that Economy Energy could be supplied to another
Party at a cost that would result in operating savings to such another
Party. Such operating savings would result from the displacement of
electric energy that otherwise would be supplied from capacity either on
such other Party's system or from sources outside its own system, or
both. To promote the economy of electric power supply and to achieve
efficient utilization of production capacity, any Party, whenever it in
its sole judgment determines Economy Energy is available, may, but shall
not be obligated to, offer Economy Energy to another Party. Promptly
upon receipt of any such offer said Party shall notify the offering Party
of the extent to which it desires to use such Economy Energy, and
schedules providing the periods and extent of use shall be mutually
agreed upon by the Parties. Such energy is non-firm and may be withdrawn
by the supplying Party with a ten (10) minute notification. A
transaction made by PSI and CINergy Services under this Service Schedule
B shall not extend beyond twelve (12) months.
Non-Displacement Energy
2.2 It is further recognized that from time to time occasions will arise
when the effecting of transactions, as provided in Subsection 2.1 of this
Section 2, will be impracticable, but at the same time one of the Parties
may have electric energy (herein called "Non-Displacement Energy") which
it is willing to make available from surplus capacity either on its own
system or from sources outside its own system, or both, that can be
utilized advantageously for short intervals by another Party. It shall
be the responsibility of the Party desiring the receipt of Non-
Displacement Energy to initiate the receipt and delivery of such energy.
Any Party desiring such receipt of energy shall inform another Party of
the extent to which it desires to use Non-Displacement Energy, and
whenever in its sole judgment such another Party determines that it has
Non-Displacement Energy available, schedules providing the periods and
extent of use shall be mutually agreed upon by the Parties. Any Party
shall not be obligated to make any Non-Displacement Energy available to
another Party.
2.3 PSI may reduce or discontinue the supply of Hourly Non-Displacement
Energy at any time. To the extent possible, however, PSI shall advise
IPL of its intention to reduce materially or discontinue the supply of
Hourly Non-Displacement Energy.
2.4 PSI shall supply Daily and Weekly Non-Displacement Energy for three
(3) hours after they have notified IPL of its intention to discontinue
such supply of energy; however, PSI shall be under no obligation to
continue the supply of said energy for more than three (3) hours after
said notification.
2.5 A transaction made by PSI under Subsection 2.2 above shall not
extend beyond twelve (12) months.
SECTION 3 - COMPENSATION
Economy Energy
3.1 The charge for Economy Energy purchased by a Party from another
Party shall be based on the principle that the Party purchasing it shall
pay the Out-Of-Pocket Cost (including all operating, maintenance, tax,
regulatory commission charges, transmission losses and other expenses
incurred that would not have been incurred if the energy had not been
supplied) being at the interconnection points (as defined in Article 4 of
the 1992 Agreement), of the Party supplying such energy and that the
resulting savings to the receiving Party shall be equally shared by the
supplying and receiving Parties. Prior to any transaction involving the
delivery and receipt of Economy Energy, authorized representatives of the
Parties shall determine and agree upon the compensation applicable to
such transaction. Compensation so agreed upon shall not be subject to
later review or adjustment. PSI shall dedicate an amount at the time of
the transactions for non-firm transmission service per the provisions of
the CINergy Services, Inc., FERC Electric Tariff, Original Volume No. 3,
Non-Firm Point-to-Point Transmission Service Standard Tariff - NFT (or
any successor transmission tariff of similar service) from its portion of
the resulting savings.
3.2 When Economy Energy is obtained from or delivered to other systems
interconnected with the Parties, but not signatories to the 1992
Agreement, payments shall be based on the Out-Of-Pocket Cost of the
supplying Party or system providing the energy and an allocation of the
gross savings which are defined as the difference between (1) what such
Out-Of-Pocket Costs of the receiving Party or system would have been to
generate such energy, and (2) such Out-Of-Pocket Costs of the supplying
Party or system providing the energy. Such allocation shall be made as
provided in Subsections 3.21 and 3.22 hereinbelow:
3.21 The transmitting Party shall be paid (a) its costs of
purchasing the energy supplied, plus (b) its costs of additional
transmission losses plus (c) the following:
(1) When IPL is such transmitting Party: Fifteen percent
(15%) of the gross savings remaining after deducting
all such payments for transmission losses.
(2) When PSI is the transmitting Party, they shall receive
the greater of (a) 15% (such charge pertains to the
reservation of transmission) of the gross savings
remaining after deducting all such payments for
transmission losses or (b) the sum of a demand charge
rate per megawatt reserved per hour at the time such
Economy Energy is reserved for non-firm transmission
service per the provisions of the CINergy Services,
Inc., FERC Electric Tariff, Original Volume No. 3, Non-
Firm Point-to-Point Transmission Service Standard
Tariff - NFT (or any successor transmission tariff of
similar service), plus $1.00 per megawatt-hour (for
difficult to quantify energy-related costs), plus any
transmission losses resulting on the system of the
CINergy Operating Companies on account of the
transaction and plus any regulatory commission charges
and taxes incurred by PSI on account of the
transaction.
3.22 The supplying Party or system shall be paid its Out-Of-Pocket
Cost of providing the energy, plus one-half of the gross savings
remaining after deducting all (b) and (c) payments made under
Subsection 3.21. The receiving Party or system shall be entitled
to the other one-half of the gross savings remaining after
deducting all (b) and (c) payments made under Subsection 3.21.
Non-Displacement Energy
3.3 Non-Displacement Energy delivered hereunder shall be settled for
either by the return of equivalent energy (only in the case where IPL is
the supplying Party) or, at the option of the Party that supplied such
energy, by payment of an energy charge of up to 110% of the Out-Of-Pocket
Cost (such cost being as of the delivery point or points, as provided in
Section 4.01 of Article 4 of the 1992 Agreement, taking into account
electrical losses incurred from the source or sources of such energy to
said delivery point or points) to the supplying Party generating such
energy plus (the applicable demand charge rates per this Subsection are
limited by Subsections 3.7 and 3.8):
3.31 When IPL is the supplying Party:
3.31.1 IPL, at its option, may impose a demand charge of up
to 48.6 mills per kilowatt reserved per hour, but the total
demand charge in any one day shall be no more than the
product of $0.778 times the highest amount in kilowatts
reserved in any hour during the day. Or,
3.31.2 IPL, at its option, may choose to supply such energy
without imposing a demand charge in which case no additional
payment is included. However, if this option is chosen, the
cost of such energy will be calculated as 110% of the actual
Out-Of-Pocket Cost (such cost being as of the delivery point
or points, as provided in Section 4.01 of Article 4 of the
1992 Agreement, taking into account electrical losses
incurred from the source or sources of such energy to said
delivery point or points) to the supplying Party generating
such energy.
3.32 When PSI is the supplying Party by payment of the following:
(1) For energy generated, the agreed upon demand charge rate
of up to $50 per megawatt-hour (such charge pertains to
the production component only), the total demand charge
in any one day shall be no more than the product of
$797 and the greatest amount of megawatts reserved in
any hour during said day and the total charge in any
one week shall be no more than the product of $4,781
and the greatest number of megawatts reserved in any
hour during said week. Non-firm transmission service
per the provisions of the CINergy Services, Inc., FERC
Electric Tariff, Original Volume No. 3, Non-Firm Point-
to-Point Transmission Service Standard Tariff - NFT (or
any successor transmission tariff of similar service)
must be obtained;
(2) For daily energy which is purchased by PSI from a third
party for economic reasons to meet system needs but in
subsequent system resources accounting calculations is
determined to have been used to supply a Daily Non-
Displacement Energy transaction and for which PSI
stands by to supply from its own resources: (a) the
amount paid by PSI to the third party for such energy,
plus (b) the cost of transmission losses, regulatory
commission charges and taxes incurred which would not
otherwise have been incurred, plus (c) $1.00 per
megawatt-hour for difficult-to-quantify energy related
costs, and, plus (d) up to $50 per megawatt-hour (such
charge pertains to the production component only), the
total charge in any one day shall be no more than the
product of $797 and the greatest number of megawatts
reserved in any hour during said day and the total
charge in any one week shall be no more than the
product of $4,781 and the greatest number of megawatts
reserved in any hour during said week. Non-firm
transmission service per the provisions of the CINergy
Services, Inc., FERC Electric Tariff, Original Volume
No. 3, Non-Firm Point-to-Point Transmission Service
Standard Tariff - NFT (or any successor transmission
tariff of similar service) must be obtained.
3.33 If equivalent energy is returned to IPL, it shall be returned
at times when the load conditions of the Party receiving it are
equivalent to the load conditions of such Party at the time the
energy for which it is returned was delivered or, if such Party
elects to have equivalent energy returned under different
conditions, it shall be returned in such amounts, to be agreed upon
by the Operating Committee, as will compensate for the difference
in conditions.
3.4 Non-Displacement Energy delivered under Subsection 2.2 above that is
purchased by the supplying Party from another interconnected system which
is not a signatory to the 1992 Agreement ("Third Party") at the request
of the receiving Party shall be settled for as follows:
3.41 When IPL is the supplying Party, by a payment of 100 percent
of the amount paid to such Third Party, plus a demand charge in an
amount to be agreed upon by the Parties at the time of the
reservation of up to 3.6 mills per kilowatt reserved per hour, but
the total demand charge in any one day shall be no more than the
product of $0.058 times the highest amount in kilowatts reserved in
any hour during the day, plus 1 mill per kilowatt-hour (for
difficult to quantify energy-related costs), plus the cost of any
quantifiable transmission losses, taxes, and other expenses
incurred that would not have been incurred if such transaction had
not been made.
3.42 When PSI is the supplying Party: by (a) non-firm
transmission service per the provisions of the CINergy Services,
Inc., FERC Electric Tariff, Original Volume No. 3, Non-Firm Point-
to-Point Transmission Service Standard Tariff - NFT (or any
successor transmission tariff of similar service) must be obtained
and (b) an energy charge of 100% of the Out-of-Pocket Cost paid
therefor by PSI, plus $1.00 per megawatt-hour (for difficult to
quantify energy-related costs), plus any transmission losses
resulting on the system of the CINergy Operating Companies on
account of the transaction, and plus any regulatory commission
charges and taxes incurred by PSI on account of the transaction.
3.5 Notwithstanding the rates stated in Subsection 3.3 above, when IPL
is the supplying Party, if the "demand charge" option of Section 3.31.1
is chosen, the sum of the demand and energy charges for each specific
reservation made pursuant to Section 2.2 of this Service Schedule B which
includes a demand charge shall not:
(1) exceed the total of:
(i) The product of the number of kilowatts reserved for
such reservation times the maximum hourly demand charge
specified above in Subsection 3.3; and
(ii) The product of the number of kilowatt-hours sup-plied
for such reservation times 110% of the average cost per
kilowatt-hour of energy generated by IPL's Petersburg
Unit No. 4 for the last preceding month during which it
was run; or
(2) be less than 100% of the total Out-Of-Pocket Cost of
supplying the Non-Displacement Energy for such reservation.
3.6 Notwithstanding the rates stated in Subsection 3.3 above, when PSI
and CINergy Services are the supplying Party, the sum of the demand and
energy charges for each specific reservation made pursuant to Section 2.2
of this Service Schedule B shall not:
(1) exceed the total of:
(i) The product of the number of megawatts reserved for
such reservation times the maximum hourly demand charge
specified above in Subsection 3.3; and plus
(ii) The product of the number of megawatt-hours supplied
for such reservation times 110% of the average cost per
megawatt-hour of energy generated by the CINergy
Operating Companies Zimmer Unit No. 1 and Gibson Unit
No. 5 for the preceding month; nor
(2) be less than 100% of the total Out-Of-Pocket Cost of
supplying the Non-Displacement Energy for such reservation.
3.7 The aggregate instant total capacity of all IPL sales under this and
other Service Schedules which are a part of this and other IPL
Agreements, for which the rates charged have been supported on the basis
that total revenues will not exceed the costs of Petersburg Unit No. 4,
is limited to 515 MW.
3.8 The total power of all sales by the CINergy Operating Companies and
CINergy Services under this and other agreements of the CINergy Operating
Companies and CINergy Services, for which the agreed upon demand charge
is determined based on Zimmer Unit No. 1 and Gibson Unit No. 5, is
limited to 925 MWs (CINergy Operating Companies Zimmer Unit No. 1 Net
Demonstrated Capability of 612 MWs and Gibson Unit No. 5 Net Demonstrated
Capability of 313 MWs) on an hourly basis. For sales in excess of the
capacity limitation of 925 MWs noted above, the rate shall consist of an
energy charge of up to 110% of Out-of-Pocket Cost and a demand charge of
up to $ 13 per megawatt per hour (such charge pertains to the production
component only), the total charge in any one day shall be no more than
the product of $209 and the greatest number of megawatts reserved in any
hour during said day and the total charge in any one week shall be no
more than the product of $1,252 and the greatest number of megawatts
reserved in any hour during said week. Non-firm transmission service per
the provisions of the CINergy Services, Inc., FERC Electric Tariff,
Original Volume No. 3, Non-Firm Point-to-Point Transmission Service
Standard Tariff - NFT (or any successor transmission tariff of similar
service) must be obtained; but in no event shall the total revenue
(energy charge and demand charge combined) be less than 100% of the Out-
of-Pocket Costs for supplying the Non-Displacement Energy for such
reservation. Notwithstanding all previous Subsections, when power is
sold under both this Subsection and Subsection 3.3 in any month, the
total demand charge will be the applicable weighted average demand
charges in this Subsection and Subsection 3.3. Such weighting will be
developed by adding the number of hours that power was provided under
this Subsection times the applicable demand charge under this Subsection
and the number of hours that power was provided under Subsection 3.3
times the applicable demand charge in Subsection 3.3, with the sum being
divided by the applicable number of hours of the transaction (month,
week, day or hours).
EXHIBIT III
(First Revision)
SERVICE SCHEDULE C
SHORT TERM POWER AND ENERGY
SECTION 1 - DURATION
1.1 This Service Schedule C, being a part of and under the
Interconnection Agreement (referred to herein as the "1992 Agreement"),
dated as of May 1, 1992, among Indianapolis Power & Light Company
(hereinafter called "IPL") and PSI Energy, Inc., formerly named Public
Service Company of Indiana, Inc. (hereinafter called "PSI") and CINergy
Services, Inc. (hereinafter called "CINergy Services"), shall become
effective as of the effective date of the Third Amendment, dated June 30,
1995, to the 1992 Agreement and shall continue in effect throughout the
duration of the 1992 Agreement. IPL, PSI and CINergy Services are
sometimes hereinafter referred to individually as "Party" or collectively
as "Parties" where appropriate.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Any Party, by giving the other Parties notice, may reserve from the
other Parties (a) electric power ("Weekly Short Term Power") for periods
of one or more weeks or (b) electric power ("Daily Short Term Power") for
periods of one or more days whenever the Party requested to reserve the
same is willing to make such power available. Under ordinary
circumstances such reservation shall extend for not less than a calendar
week if it begins with Sunday or for the balance of the calendar week if
it begins with any day subsequent to Sunday; however, under unusual
circumstances, the Parties may mutually agree upon a reservation of Daily
or Weekly Short Term Power for a lesser number of days. In all cases the
Party asked to supply Daily or Weekly Short Term Power shall be the sole
judge as to the amounts and periods that it has electric power available
that may be reserved by another Party as Short Term Power. A transaction
made by any Party under this Service Schedule C shall not extend beyond
twelve (12) months.
2.11 Prior to each reservation of Weekly or Daily Short Term
Power, the number of megawatts to be reserved, the period of the
reservation, the terms of such reservation, and the source of such
power if the supplying Party is in turn reserving such power from
another interconnected system which is not a signatory to the 1992
Agreement ("Third Party"), shall be determined by the Parties.
Such reservation shall be confirmed in writing at the request of
any Party. If during such period the conditions arise that could
not have been reasonably foreseen at the time of the reservation
and cause the reservation to be burdensome to the supplying Party,
such Party may by oral notice to the reserving Party, such oral
notice to be later confirmed in writing if requested by any Party,
reduce the number of megawatts reserved by such amount and for such
time as it shall specify in such notice, but kilowatts reserved
hereunder that the supplying Party is in turn reserving from a
Third Party may be reduced only to the extent they are reduced by
such Third Party.
2.12 During each period that Weekly or Daily Short Term Power has
been reserved, the Party that has agreed to supply such power shall
upon call by the reserving Party deliver associated electric energy
("Weekly or Daily Short Term Energy") to the reserving Party as of
the interconnection point or points, as provided in Section 4.01 of
Article 4 of the 1992 Agreement at a rate during each hour of up to
and including the number of megawatts reserved.
SECTION 3 - COMPENSATION
3.1 Weekly Short-Term Power and Energy
3.1.1 Except as otherwise provided in Subsection 3.1.3 below, when
IPL is the supplying Party, PSI shall pay all of the following
which are applicable (the applicable demand charge rate per this
Subsection is limited by Subsection 3.5):
(a) for any week that Weekly Short-Term Power and Energy is
reserved, a demand charge rate to be agreed upon by the
Parties at the time such Weekly Short-Term Power and
Energy is reserved, at a rate of up to $3.89 per
kilowatt reserved, except, for each day (other than
Sunday) during any part of which the amount of such
Weekly Short-Term Power and Energy is reduced by IPL,
the total demand charge shall be reduced by one-sixth
(1/6) of said agreed upon demand charge rate for each
megawatt of the reduction;
(b) for Weekly Short-Term Energy delivered that is
generated by IPL, an energy charge to be agreed upon by
the Parties at the time of the transaction of up to
110% of the Out-Of-Pocket Cost (such cost being as of
the interconnection point or points, as defined in
Article 4 of the 1992 Agreement, taking into account
electrical losses incurred from the source or sources
of such energy to the interconnection point or points)
of supplying such energy;
(c) for Weekly Short-Term Energy delivered that is
purchased by IPL from a Third Party, an energy charge
of 100% of the Out-Of-Pocket Cost paid therefor by IPL,
plus one (1) mill per kilowatt-hour of such purchased
energy (for difficult to quantify energy-related
costs), plus any transmission losses resulting on IPL s
system on account of the transaction, and plus any
taxes incurred by IPL on account of the transaction.
3.1.2 Except as otherwise provided in Subsection 3.1.3 below, when
PSI is the supplying Party, IPL shall pay all of the following
which are applicable (the applicable demand charge rate per this
Subsection is limited by Subsection 3.6):
(a) for any week that Weekly Short-Term Power and Energy is
reserved, a demand charge rate to be agreed upon by the
Parties at the time such Weekly Short-Term Power and
Energy is reserved. Said demand charge rate shall be
at a rate of up to $4,781 per megawatt reserved (such
charge pertains to the production component only),
except for each day (other than Sunday) during any part
of which the amount of such Weekly Short-Term Power and
Energy is reduced by PSI, the total demand charge shall
be reduced by one-sixth (1/6) of said agreed upon
demand charge rate (rounded to the nearest $0.10 per
megawatt) for each megawatt of the reduction. Non-firm
transmission service per the provisions of the CINergy
Services, Inc., FERC Electric Tariff, Original Volume
No. 3, Non-Firm Point-to-Point Transmission Service
Standard Tariff - NFT (or any successor transmission
tariff of similar service) must be obtained;
(b) for Weekly Short-Term Energy delivered that is
generated by PSI, an energy charge to be agreed upon by
the Parties at the time of the transaction of up to
110% of the Out-Of-Pocket Cost (such cost being as of
the interconnection point or points, as defined in
Article 4 of the 1992 Agreement, taking into account
electrical losses incurred from the source or sources
of such energy to the interconnection point or points)
of supplying such energy;
(c) for Weekly Short-Term Energy delivered that is
purchased by PSI from a Third Party, an energy charge
of 100% of the Out-Of-Pocket Cost paid therefor by PSI,
plus $1.00 per megawatt-hour of such purchased energy
(for difficult to quantify energy-related costs), plus
any transmission losses resulting on the system of the
CINergy Operating Companies on account of the
transaction, and plus any regulatory commission charges
and taxes incurred by PSI on account of the
transaction.
3.1.3 When Weekly Short-Term Power and Energy is purchased by the
supplying Party from a Third Party specifically for the reserving
Party, the reserving Party shall pay the supplying Party all of the
following which are applicable:
(a) the demand charge paid therefor by the supplying Party
to the Third Party for such electric power and energy;
(b) when IPL is the supplying Party:
(1) for any week such Weekly Short-Term Power and
Energy is reserved, a demand charge rate per
kilowatt to be agreed upon by the Parties at the
time such Weekly Short-Term Power and Energy is
reserved, at a rate of up to $0.29 per kilowatt
reserved (such charge pertains to the reservation
of transmission). In the event the amount of
such Weekly Short-Term Power and Energy is
reduced by IPL, said demand charge shall be
reduced by the sum of (i) one-sixth (1/6) of the
said agreed upon weekly rate per kilowatt of the
reduction for each day (other than Sunday) during
which such reduction is in effect, and (ii) the
reduction, if any, in the demand charge paid by
IPL to the Third Party;
(2) for each kilowatt-hour purchased by IPL from a
Third Party to supply Weekly Short-Term Energy
delivered during such period, an energy charge of
100% of the Out-of-Pocket Cost paid therefor by
IPL, plus one (1) mill per kilowatt-hour (for
difficult to quantify energy-related costs), plus
any transmission losses resulting on IPL s system
on account of the transaction, and plus any taxes
incurred by IPL on account of the transaction;
(c) when PSI is the supplying Party:
(1) Non-firm transmission service per the provisions
of the CINergy Services, Inc., FERC Electric
Tariff, Original Volume No. 3, Non-Firm
Transmission Service Standard Tariff - NFT (or
any successor transmission tariff of similar
service) must be obtained. In the event the
amount of such Weekly Short-Term Power and Energy
is reduced by PSI, said demand charge shall be
reduced by the sum of (i) one-sixth (1/6) of the
said agreed upon weekly rate per megawatt of the
reduction for each day (other than Sunday) during
which such reduction is in effect, and (ii) the
reduction, if any, in the demand charge paid by
PSI to the Third Party;
(2) for each megawatt-hour purchased by PSI from a
Third Party to supply Weekly Short-Term Energy
delivered during such period, an energy charge of
100% of the Out-Of-Pocket Cost paid therefor by
PSI, plus $1.00 per megawatt-hour (for difficult
to quantify energy-related costs), plus any
transmission losses resulting on the system of
the CINergy Operating Companies on account of the
transaction, and plus any regulatory commission
charges and taxes incurred by PSI on account of
the transaction.
3.2 Daily Short-Term Power and Energy
3.2.1 Except as otherwise provided in Subsection 3.2.3 below, when
IPL is the supplying Party, PSI shall pay all of the following
which are applicable (the applicable demand charge rate per this
Subsection is limited by Subsection 3.5):
(a) for any day that Daily Short-Term Power and Energy is
reserved, a demand charge rate to be agreed upon by the
Parties at the time such Daily Short-Term Power and
Energy is reserved, at a rate of up to $0.778 per
kilowatt reserved, except, for any day during any part
of which the amount of such Daily Short-Term Power and
Energy is reduced by IPL, the agreed upon demand charge
will only be paid for the power still available;
(b) for Daily Short-Term Energy delivered that is generated
by IPL, an energy charge of up to 110% of the Out-of-
Pocket Cost (such cost being as of the interconnection
point or points, as defined in Article 4 of the 1992
Agreement, taking into account electrical losses
incurred from the source or sources of such energy to
the interconnection point or points) of supplying such
energy;
(c) for Daily Short-Term Energy delivered that is purchased
by IPL from a Third Party, an energy charge of 100% of
the Out-of-Pocket Cost paid therefor by IPL, plus one
(1) mill per kilowatt-hour of such purchased energy
(for difficult to quantify energy-related costs), plus
any transmission losses resulting on IPL s system on
account of the transaction, and plus any taxes incurred
by IPL on account of the transaction.
3.2.2 Except as otherwise provided in Subsection 3.2.3 below, when
PSI is the supplying Party, IPL shall pay all of the following
which are applicable (the applicable demand charge rates per this
Subsection are limited by Subsection 3.6):
(a) for any day that Daily Short-Term Power and Energy is
reserved, a demand charge rate to be agreed upon by the
Parties at the time such Daily Short-Term Power and
Energy is reserved. Said demand charge rate shall be
at a rate of up to $797 per megawatt reserved (such
charge pertains to the production component only), the
total charge in any week shall be no more than the
product of $4,781 and the greatest number of megawatts
reserved in any day during said week, except for any
day during any part of which the amount of such Daily
Short-Term Power and Energy is reduced by PSI, the
agreed upon demand charge will only be paid for the
power still available. Non-firm transmission service
per the provisions of the CINergy Services, Inc., FERC
Electric Tariff, Original Volume No. 3, Non-Firm Point-
to-Point Transmission Service Standard Tariff - NFT (or
any successor transmission tariff of similar service)
must be obtained;
(b) for Daily Short-Term Energy delivered that is generated
by PSI, an energy charge of up to 110% of the Out-of-
Pocket Cost (such cost being as of the interconnection
point or points, as defined in Article 4 of the 1992
Agreement, taking into account electrical losses
incurred from the source or sources of such energy to
the interconnection point or points) of supplying such
energy;
(c) for Daily Short-Term Energy delivered that is purchased
by PSI from a Third Party, an energy charge of 100% of
the Out-of-Pocket Cost paid therefor by PSI, plus $1.00
per megawatt-hour of such purchased energy (for
difficult to quantify energy-related costs), plus any
transmission losses resulting on the system of the
CINergy Operating Companies on account of the
transaction, and plus any regulatory commission charges
and taxes incurred by PSI on account of the
transaction.
3.2.3 When Daily Short-Term Power and Energy is purchased by the
supplying Party from a Third Party specifically for the reserving
Party, the reserving Party shall pay the supplying Party all of the
following which are applicable:
(a) the demand charge paid therefor by the supplying Party
to the Third Party for such electric power and energy;
(b) when IPL is the supplying Party:
(1) for any day such Daily Short-Term Power and
Energy is reserved, a demand charge per kilowatt
to be agreed upon by the Parties at the time such
Daily Short-Term Power and Energy is reserved, at
a rate of up to $0.058 per kilowatt reserved
(such charge pertains to the reservation of
transmission). In the event the amount of such
Daily Short-Term Power and Energy is reduced by
IPL, said demand charge shall be reduced by the
sum of (i) one-sixteenth (1/16) of the said
agreed upon daily rate per kilowatt of the
reduction for each hour in any day during which
such reduction is in effect, such reduction not
to exceed the agreed upon demand charge for such
day, and (ii) the reduction, if any, in the
demand charge paid by IPL to the Third Party;
(2) for each kilowatt-hour purchased by IPL from a
Third Party to supply Daily Short-Term Energy
delivered during such period, an energy charge of
100% of the Out-of-Pocket Cost paid therefor by
IPL, plus one (1) mill per kilowatt-hour (for
difficult to quantify energy-related costs), plus
any transmission losses resulting on IPL s system
on account of the transaction, and plus any taxes
incurred by IPL on account of the transaction;
(c) when PSI is the supplying Party:
(1) Non-firm transmission service per the provisions
of the CINergy Services, Inc., FERC Electric
Tariff, Original Volume No. 3, Non-Firm
Transmission Service Standard Tariff - NFT (or
any successor transmission tariff of similar
service) must be obtained. In the event the
amount of such Daily Short-Term Power and Energy
is reduced by PSI, said demand charge shall be
reduced by the sum of (i) one-sixteenth (1/16) of
the said agreed upon daily rate per megawatt of
the reduction for each hour in any day during
which any such reduction is in effect, such
reduction not to exceed the agreed upon demand
charge for such day, and (ii) the reduction, if
any in the demand charge paid by PSI to the Third
Party;
(2) for each megawatt-hour purchased by PSI from a
Third Party to supply Daily Short-Term Energy
delivered during such period, an energy charge of
100% of the Out-of-Pocket Cost paid therefor by
PSI, plus $1.00 per megawatt-hour (for difficult
to quantify energy-related costs), plus any
transmission losses resulting on the system of
the CINergy Operating Companies on account of the
transaction, and plus any regulatory commission
charges and taxes incurred by PSI on account of
the transaction.
3.3 Notwithstanding the rates stated in the Subsections 3.1.1, 3.1.3,
3.2.1 and 3.2.3 above, when IPL is the supplying Party, the sum of the
demand and energy charges for each specific reservation made pursuant to
Section 2 of this Service Schedule C shall not:
(1) exceed the total of:
(i) the product of the number of kilowatts reserved for
such reservation times the maximum Weekly or Daily
demand charge, whichever is applicable, specified above
in Subsections 3.1.1, 3.1.3, 3.2.1 and 3.2.3, as
appropriate; and
(ii) the product of the number of kilowatt-hours supplied
for such reservation times 110% of the average cost per
kilowatt-hour of energy generated by IPL's Petersburg
Unit No. 4 for the last preceding month during which it
was run; or
(2) be less than 110% of the total Out-Of-Pocket Cost of
supplying the Short Term Energy for such reservation.
3.4 Notwithstanding the rates stated in Subsections 3.1.2, 3.1.3, 3.2.2
and 3.2.3 above, when PSI and CINergy Services are the supplying Party,
the sum of the demand and energy charges for each specific reservation
made pursuant to Section 2 of this Service Schedule C shall not:
(1) exceed the total of:
(i) the product of the number of megawatts reserved for
such reservation times the maximum Weekly or Daily
demand charge, whichever is applicable, specified above
in Subsections 3.1.2, 3.1.3, 3.2.2 and 3.2.3, as
appropriate, and plus
(ii) the product of the number of megawatt-hours supplied
for such reservation times 110% of the average cost per
megawatt-hour of energy generated by the CINergy
Operating Companies Zimmer Unit No. 1 and Gibson Unit
No. 5 for the preceding month; nor
(2) be less than 100% of the Out-Of-Pocket Costs of supplying the
Short Term Energy for such reservation.
3.5 The aggregate instant total capacity of all IPL sales under this and
other Service Schedules which are a part of this and other IPL
Agreements, for which the rates charged have been supported on the basis
that total revenues will not exceed the costs of Petersburg Unit No. 4,
is limited to 515MW.
3.6 The total power of all sales by the CINergy Operating Companies and
CINergy Services under this and other agreements of the CINergy Operating
Companies and CINergy Services, for which the agreed upon demand charge
is determined based on Zimmer Unit No. 1 and Gibson Unit No. 5, is
limited to 925 MWs (CINergy Operating Companies Zimmer Unit No. 1 Net
Demonstrated Capability of 612 MWs and Gibson Unit No. 5 Net Demonstrated
Capability of 313 MWs) on an hourly basis. For sales in excess of the
power limitation of 925 MWs noted above, the rate shall consist of an
energy charge of up to 110% of Out-of-Pocket Cost and a demand charge of
up to $1,252 per megawatt per week or a demand charge of up to $209 per
megawatt per day, the total charge in any one week shall be no more than
the product of $1,252 and the greatest number of megawatts reserved in
any hour during said week (such charge pertains to the production
component only). Non-firm transmission service per the provisions of the
CINergy Services, Inc., FERC Electric Tariff, Original Volume No. 3, Non-
Firm Point-to-Point Transmission Service Standard Tariff - NFT (or any
successor transmission tariff of similar service) must be obtained; but
in no event shall the total revenue (energy charge and demand charge
combined) be less than 100% of the Out-of-Pocket Costs of supplying the
Short-Term Energy for such reservation. Notwithstanding all previous
Subsections, when power is sold under both this Subsection and Subsection
3.1.2 in any week, the total demand charge will be the weighted average
demand charges in this Subsection and Subsection 3.1.2. Such weighting
will be developed by adding the number of hours that power was provided
under this Subsection times the demand charge under this Subsection and
the number of hours that power was provided under Subsection 3.1.2 times
the demand charge in Subsection 3.1.2, with such sum being divided by the
total number of hours in the week. Also, when power is sold under both
this Subsection and Subsection 3.2.2 in any day, the total demand charge
will be the weighted average demand charges in this Subsection and
Subsection 3.2.2. Such weighting will be developed by adding the number
of hours that power was provided under this Subsection times the demand
charge under this Subsection and the number of hours that power was
provided under Subsection 3.2.2 times the demand charge in Subsection
3.2.2, with such sum being divided by the total number of hours in the
day.
EXHIBIT IV
(SECOND REVISION)
SERVICE SCHEDULE D
CARMEL SOUTHEAST TAP NETWORK POWER AND ENERGY TRANSFER
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of and under the Interconnection
Agreement (referred to herein as the "1992 Agreement") dated as of May 1,
1992 between Indianapolis Power & Light Company (hereinafter called
"IPL") and PSI Energy, Inc., formerly named Public Service Company of
Indiana, Inc., (hereinafter called "PSI") and CINergy Services, Inc.
(hereinafter called "CINergy Services"), shall become effective as of the
earlier date of either September 1, 1995 or the effective date of the
Third Amendment, dated June 30, 1995, and shall continue in effect
through August 31, 1996, unless extended as provided in Section 6 hereof.
IPL, PSI and CINergy Services are sometimes hereinafter referred to
individually as "Party" or collectively as "Parties" where appropriate.
SECTION 2 - FACILITIES TO BE PROVIDED
2.1 PSI shall provide, install, operate and maintain, at its own
expense, during the term of this Service Schedule D as defined in Section
6 hereof, the following facilities:
(i) At its Carmel Southeast Substation - a 138,000 volt three-
phase interrupting device, a 24/40 MVA transformer, 12,470
volt metering equipment, relaying, switching, a supervisory
control remote terminal unit, a communication circuit from
the supervisory unit to IPL s Load Dispatch Office and
appurtenant equipment, all of which shall be subject to the
prior approval of IPL. PSI shall be responsible for
installing, owning and maintaining all necessary protection
equipment required by IPL to protect IPL s facilities
associated with Carmel Tap. PSI s remote terminal unit shall
provide data acquisition, remote status and control of the
load and allow PSI to provide real time dispatch of their
generation to their load as well as load control while IPL
will be provided real time breaker status and load data.
(ii) A 138,000 volt transmission line extending from Carmel
Southeast Substation to Transmission Tower Number 7 (Map
Section 173A) on IPL's 138,000 volt North-River Road (132-57)
transmission line, together with a 138,000 volt tap at such
tower, to be known as the Carmel Tap Point.
2.2 IPL shall provide, install, operate and maintain, as direct
assignment facilities at the sole benefit and expense of PSI, during the
term of the Carmel Tap Point as defined in Section 6 hereof, a 138,000
volt two-way switching point with supervisory controlled 138,000 volt
line interrupting disconnect switches and associated facilities such as a
switch tower, supervisory terminal unit and communication circuit at the
Carmel Tap Point.
SECTION 3 - SERVICES TO BE RENDERED
3.1 The Parties hereto mutually agree that their respective radial
distribution systems will not be operated in parallel through the Carmel
Tap Point. Electric energy supplied by IPL to PSI at the Carmel Tap
Point will be treated as capacity and energy simultaneously transferred
into IPL's system by PSI through the other interconnection points of the
Parties and will be used only to supply the ultimate consumers of PSI who
are or may be served from PSI's Carmel Southeast Substation. Any
capacity or energy delivered by IPL to PSI through the Carmel Tap Point
shall be simultaneously supplied by PSI to IPL through any of the
interconnection points of the Parties. PSI s supplied energy shall
include an adder of approximately 3%-5% to the capacity and energy
delivered to the Carmel Tap by IPL to compensate IPL for capacity and
energy losses occurring on IPL s system and PSI s tapped transmission
line and transformer bank (metered at secondary voltage) due to the
transfer of energy to the Carmel Tap Point.
3.2 IPL shall provide PSI with the following services:
1) Firm, network transmission service including a capacity
reservation (34,500 volt, 138,000 volt and above) of up to
and including 20 MW s (measured at the other IPL/PSI
interconnection points as defined in the 1992 Agreement).
Said service and reservation shall be planned for and
provided on the same basis as IPL s firm native load
customers only during the term of this service schedule as
set forth in Section 6 herein of this Agreement.
2) Non-firm transmission service (34,500 volt, 138,000 volt and
above) up to and including 30 MW s (measured at the other
IPL/PSI interconnection points in the 1992 Agreement) in
addition to the firm transmission listed in Point 1 above.
Said non-firm service shall be on an as available,
interruptible basis when requested by PSI.
Upon IPL s request, PSI shall immediately curtail and/or interrupt its
firm load served by the 20 MW firm network transmission and reservation
service on the same basis as IPL s firm native load customers. If PSI s
demand exceeds their reservation (herein called "excess loading") PSI
shall demonstrate that all such demand exceeding their reservation is 1)
immediately interruptible by contract or 2) that such excess loading
occurred due to emergency switching lasting less than a total of two (2)
weeks within any six-month period. Otherwise such excess loading shall
be treated as having automatically increased PSI s reservation, for
billing purposes only, until IPL is satisfied PSI has taken actions to
permanently eliminate such excess loading. IPL shall coordinate non-
emergency maintenance outages with PSI and provide a minimum notification
by 12:00 noon of the day before the scheduled outage.
3.3 IPL and PSI shall periodically conduct independent and/or joint
studies of their future systems to serve the Indianapolis northeast
metropolitan area. PSI shall annually update and provide IPL with their
ten year demand projections for the Carmel Tap Point. If such studies
indicate problems due to PSI s 20 MW reservation or projected increase in
reservation, then IPL and PSI shall jointly or independently, as soon as
practicable, develop plans and estimates of cost for the installation of
any additional equipment or facilities necessary to effect a long term
solution to such problem so that transmission services hereunder may be
reliably continued in accordance with IPL standards.
IPL s studies of this service cover the first five years and identified
facilities during that period which may need to be upgraded if area
demand grows faster than presently projected. If facility upgrades are
required, PSI shall pay annual carrying costs on a monthly basis during
the time period from the in-service date of the facilities until IPL s
area load increases by the amount of PSI s 20 MW reservation plus actual
and projected increases in reservation (herein called "period of
advancement") after which the remaining costs shall be rolled into IPL s
rate analysis. Any time PSI s reservation, as determined under 3.2
above, requires IPL to install facilities in advance of its need, PSI
shall pay annual carrying cost on such facilities during the period of
advancement. Increased reservations beyond 20 MWs shall be treated as
interruptible until all necessary facilities to reliably accommodate
these loads are placed in service. IPL will not increase or upgrade the
capacity of its existing or planned transmission facilities in order to
provide service under this Agreement if doing so would unduly 1) impair
IPL s system reliability or 2) jeopardize the benefits of service or 3)
increase the cost of service to IPL s Native Load Customers and other
customers to whom IPL has a pre-existing contractual obligation.
In the event PSI does not elect to continue its reservation after the
term of this Service Schedule, PSI shall pay 1) the stranded cost of all
IPL s facilities directly assignable to providing firm service for PSI s
reservation and 2) the remaining annual cost on a monthly basis of all
system improvements from the termination date until IPL s area load
increase equals the amount of PSI s reservation. In the event IPL can t
obtain regulatory approvals for facility modifications needed to
increases PSI s reservation, then firm service shall not be provided for
the amount of the increased service reservation.
3.4 PSI shall provide for ancillary services such as dynamic reactive
var/voltage support, all generation reserves, real time generation
dispatch, load following and dispatch control services needed to support
the operation of the Carmel Tap Point.
3.5 IPL shall file with the FERC an amendment to Service Schedule D for
all direct assignment facilities (not covered in Section 2.2) to be
provided for PSI by IPL under this Service Schedule and for all costs for
advanced system improvements during the "period of advancement" due to
the PSI transmission reservation provided under Service Schedule D.
FERC s failure to accept the cost assignments for either direct
assignment facilities and/or advanced system improvements due to the PSI
network load service provided in this Service Schedule D shall result in
1) IPL terminating its obligation to provide and plan for PSI s
transmission reservation as covered in Section 3.2 and Section 3.3 above
or 2) PSI may elect to reduce the level and/or firmness of PSI s
transmission reservation so that additional direct assignment facilities
and/or system improvement facility advancements won t be needed or 3) PSI
may elect to terminate service provided hereunder provided that upon
termination of this Service Schedule D by PSI, PSI shall remain
responsible for paying IPL all costs remaining for all direct assignment
facilities provided by IPL and all remaining costs for all advanced
system improvements attributed to PSI during the period of advancement
where said facilities have been filed with and accepted by the FERC
including the direct assignment facilities provided initially under
Section 2.2. The stranded cost of the direct assignment facilities
provided under Section 2.2 shall be calculated and marked up for tax
effects as shown in Attachment 1 and shall be paid by PSI within 30 days
of receipt of the bill from IPL.
SECTION 4 - DEVIATIONS IN DELIVERIES AT CARMEL TAP POINT
4.1 The Parties agree that with respect to the Carmel Tap Point, PSI
shall simultaneously supply (including adjustments for losses) to IPL
from PSI s other interconnection points with IPL the capacity and energy
delivered to PSI by IPL. The Parties recognize, however, that despite
their best efforts to simultaneously supply and deliver capacity and
energy (including adjustments for losses) deviations between actual and
scheduled energy transfers may occur. Electric energy resulting from
such deviations shall, at the option of IPL, be settled for either by
return of equivalent energy or by payment of Out-Of-Pocket Costs. If
equivalent energy is returned, it shall be returned at times when the
generating costs of IPL are equivalent to the generating costs of IPL at
the time of the deviations or, if IPL elects to have equivalent energy
returned under different conditions, it shall be returned in such
amounts, to be mutually agreed upon, as will compensate IPL for the
difference in conditions.
IPL, at its option, may elect to bill for such Out-Of-Pocket Costs, plus
ten percent of such cost, for any energy supplied over and above that
scheduled by PSI for any hour or hours during the billing period. Such
costs shall be determined at the Carmel Tap Point by taking into account
electrical losses incurred from the source or sources of such energy to
said Tap Point.
4.2 If IPL elects to bill for any energy supplied over and above that
scheduled by PSI for any hour or hours during the billing period where
the energy was supplied by a Third Party then in accordance with the FERC
Order 84 the maximum amount to be billed by IPL to PSI shall be 100% of
the Third Party demand and energy charge plus 1 mill/kwhr (the 1
mill/kwhr adder is applicable only to transactions with a duration of
less than one year) plus IPL s network transmission rate as accepted by
the FERC under this Service Schedule D.
SECTION 5 - COMPENSATION
5.1 FIRM SERVICE - Electric power measured in kilowatts supplied by PSI
and delivered at the Carmel Tap Point under the 1992 Agreement by IPL to
PSI shall be billed on a monthly basis the annual cost of IPL s
transmission system multiplied by the ratio of the sum of PSI s twelve 20
MW reservations divided by IPL s annual system peak demand which equals
$283,200 annually as calculated in the cost support Appendix A. The loss
factors consisting of a 3-5% adder, as noted in Section 3.1 hereof, shall
include PSI s radial transmission line and transformer bank associated
with the Carmel Tap Point and IPL s 34,500 volt and above transmission
system. The loss factors shall include PSI s radial transmission line
and transformer bank associated with the Carmel Tap Point and IPL s
transmission system. The loss factors shall be determined by the annual
transmission system loss studies performed by IPL and PSI. Also,
increases in PSI s reservation shall be billed by using the same
methodology.
5.2 NON-FIRM SERVICE - Electric power measured in kilowatts supplied by
PSI and delivered at the Carmel Tap Point under the 1992 Agreement by IPL
to PSI shall be billed at $1.18 per kilowatt-month plus $0.01 per
kilowatt-month for IPL dispatch control. This demand charge for non-firm
service applies to usage above PSI s firm service reservation and shall
be based upon the difference in maximum hourly demand in kilowatts
measured and the amount of PSI s reservation in the calendar month of
billing. The loss factors consisting of a 3-5% adder, as noted in
Section 3.1 hereof, shall include PSI s radial transmission line and
transformer bank associated with the Carmel Tap Point and IPL s 34,500
volt and above transmission system. The loss factors shall be determined
by the annual transmission system loss studies performed by IPL and PSI.
5.3 DIRECT ASSIGNMENT FACILITIES - PSI shall pay IPL on a monthly basis
IPL s annual charges on the total installed cost of the facilities
provided in Section 2.2 above multiplied by IPL s annual carrying charges
as calculated in Attachment 1 and revisions will be filed with the FERC.
SECTION 6 - TERM OF AGREEMENT
6.1 This Service Schedule shall terminate August 31, 1996 unless PSI
notifies IPL at least six (6) months prior to such termination date that
it desires to continue service to the Carmel Tap Point; provided however,
that any continued service is subject to such terms and conditions as are
mutually agreed to by the Parties.
APPENDIX I
SERVICE SCHEDULE A
EMERGENCY SERVICE
EXHIBIT I
(First Revision)
APPENDIX II
SERVICE SCHEDULE B
INTERCHANGE ENERGY
EXHIBIT II
(First Revision)
APPENDIX III
SERVICE SCHEDULE C
SHORT TERM POWER AND ENERGY
EXHIBIT III
(First Revision)
APPENDIX IV
SERVICE SCHEDULE D
CARMEL SOUTHEAST TAP
NETWORK POWER AND ENERGY
EXHIBIT IV
(Second Revision)