Exhibit 10.7.1
Form of
Maine Yankee Atomic Power Company
Amendment No. 1
to
POWER CONTRACT
AMENDMENT, dated as of March 1, 1983, between MAINE YANKEE
ATOMIC POWER COMPANY ("Maine Yankee"), a Maine corporation, and
(the "Purchaser") to the Power Contract, dated as of May
20, 1968, between Maine Yankee and the Purchaser.
W I T N E S S E T H
WHEREAS, Maine Yankee has heretofore established a trust pursuant to
an Indenture of Trust dated as of October 12, 1982 (the "Maine Yankee
Trust") to make provision for financing the decommissioning of its Unit in
accordance with the rules and regulations of the Nuclear Regulatory
Commission (the "NRC") and to assure its financial ability to meet the
obligations to the NRC, other applicable regulatory bodies, the general
public and its customers in connection with said decommissioning, such
trust to hold all payments made to it and any earnings thereon solely for
the purpose of meeting such decommissioning expenses and thereafter for the
benefit of the wholesale purchasers of power from Maine Yankee in
accordance with the terms and conditions ordered by any governmental
regulatory body having jurisdiction; and
WHEREAS, in order to provide for the accrual of an appropriate fund
for decommissioning the Unit at the end of its useful life, Maine Yankee
and each of its other Sponsors are contemporaneously entering into
Amendments which are identical to the Amendment except for the necessary
changes in the names of the parties; and
WHEREAS, pursuant to an Order (the "Order") issued by the Federal
Energy Regulatory Commission ("FERC") on August 3, 1982 (Docket No. ER 82-
15-000), Maine Yankee began collecting estimated costs of decommissioning
the Unit through rates effective on November 1, 1981, which amounts have
been paid into the Maine Yankee Trust except such amounts as are necessary
to be used to pay federal and state income taxes on moneys collected as
decommissioning charges unless and until it is ultimately determined that
such moneys are not subject to tax.
NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, receipt of which is hereby acknowledged, the
parties hereto agree that the Power Contract is hereby amended as follows:
1. Terms used herein and not defined shall have the meanings set
forth in the Power Contract.
2. The second paragraph of Section 7 is hereby amended to insert
the clause "or, in the case of payments under clause (b) below, commencing on
or after the date authorized by the Federal Energy Regulatory Commission
("FERC"), formerly the Federal Power Commission," and the clause "plus
(b) the Total Decommissioning Costs for the month with respect to the
Unit," and to reletter the two final clauses, so that the entire paragraph
reads as follows:
"With respect to each month commencing on or after the plant
completion date or, in the case of payments under clause (b)
below, commencing on or after the date authorized by the Federal
Energy Regulatory Commission ("FERC"), formerly the Federal Power
Commission, the Purchaser will pay Maine Yankee an amount equal
to the Purchaser's entitlement percentage of the sum of (a) Maine
Yankee's total fuel costs for the month with respect to the Unit,
plus (b) the Total Decommissioning Costs for the month with
respect to the Unit, plus (c) Maine Yankee's total operating
expenses for the month with respect to the Unit, plus (d) an
amount equal to one-twelfth of the composite percentage for such
month of the net Unit investment as most recently determined in
accordance with this Section 7."
3. Section 7 is further amended by inserting therein immediately
preceding in the last paragraph thereof the following three paragraphs:
"Total Decommissioning Costs" for any month shall mean the
sum of (x) an amount equal to all accruals in such month to any
reserve, as from time to time established by Maine Yankee and
approved by its board of directors, to provide for the ultimate
payment of the Decommissioning Expenses of the Unit plus
(y) Decommissioning Tax Liability for such month. It is
understood (i) that such funds may be held by Maine Yankee or, if
required, by an independent trust or other separate fund, as
determined by said board of directors, (ii) that, upon compliance
with Section 21 hereof, the amount, custody and/or timing of such
accruals may from time to time during the term hereof be modified
by said board of directors in its discretion or to comply with
applicable statutory or regulatory requirements or to reflect
changes in the amount, custody or timing of anticipated
Decommissioning Expenses, and (iii) that the use of the term "to
decommission" herein encompasses compliance with all requirements
(other than those relating to spent nuclear fuel) of the Nuclear
Regulatory Commission or its successors (NRC) for permanent
cessation of operation of a nuclear facility.
"Decommissioning Expenses" shall include:
(1) All costs and expenses of removing the Unit from service,
including without limitation, dismantling, mothballing,
removing radioactive material (excluding spent nuclear fuel)
to temporary and/or permanent storage sites,
decontaminating, restoring and supervising the site, and any
costs and expenses incurred in connection with proceedings
before governmental regulatory authorities relating to any
authorization to decommission the Unit or remove the Unit
from service;
(2) All costs of labor and services, whether directly or
indirectly incurred, including without limitation services
of foremen, inspectors, supervisors, surveyors, engineers,
security personnel, counsel, and accountants, performed or
rendered in connection with the decommissioning of the Unit
and the removal of the Unit from service, and all costs of
materials, supplies, machinery, construction, equipment and
apparatus acquired or used (including rental charges for
machinery, equipment or apparatus hired) for or in
connection with the decommissioning of the Unit and the
removal of the Unit from service, and all administrative
costs, including services of counsel and financial advisers,
of any applicable independent trust or other separate fund;
it being understood that any amount, exclusive of amounts
received in respect of proceeds of insurance, realized by
Maine Yankee as salvage on any machinery, construction
equipment and apparatus, the cost of which was charged to
Decommissioning Expense, shall be treated as a reduction of
the amounts otherwise chargeable on account of the costs of
decommissioning of the unit; and
(3) All overhead costs applicable to the Unit during its
decommissioning period, including without limiting the
generality of the foregoing, taxes (other than taxes on or
in respect of income), licenses, excises, and assessments,
casualties, surety bond premiums and insurance premiums.
"Decommissioning Tax Liability" for any month shall be an
amount established by Maine Yankee and approved by its board of
directors to meet possible income tax obligations, which amount
shall not exceed: the amount to be included in the clause (x)
portion of Total Decommissioning Costs for such month multiplied
by a fraction whose numerator is equal to the combined highest
statutory federal and state marginal income tax rate and whose
denominator is equal to one minus the combined highest statutory
federal and state marginal income tax rate. Maine Yankee will
use its best efforts to obtain as promptly as possible favorable
tax treatment of the payments for total decommissioning costs
hereunder so that Decommissioning Tax Liability may be minimized.
Without limiting the generality of the foregoing, any other
amounts expended or to be paid with respect to decommissioning of
the Unit or removal of the Unit from service shall constitute
part of the Decommissioning Expenses if they are, or when paid
will be, either (i) properly chargeable to any account related to
decommissioning of a nuclear generating unit in accordance with
the Uniform System or generally accepted accounting principles as
then in effect, or (ii) properly chargeable to decommissioning of
a nuclear generating unit in accordance with then applicable
regulations of the NRC or FERC or any other regulatory agency
having jurisdiction.
4. A new Section 7A is hereby inserted therein immediately
following Section 7 thereof as follows:
"7A. Decommissioning Fund
Maine Yankee agrees to pay to, or cause to be paid to, the
Maine Yankee Trust or any successor trust approved by the board
of directors of Maine Yankee all funds collected hereunder for
the express purpose of decommissioning the Unit or removing the
Unit from service and further agrees that, after the tax
consequences of decommissioning collections have been resolved,
any funds collected hereunder to meet Decommissioning Tax
Liability which are not used for that purpose will be refunded to
Purchaser to the extent required by FERC."
5. The last four lines of the first paragraph of Section 9
following clause (iii) thereof are hereby amended to read as follows:
"then and in any such case, the Purchaser may cancel the
provisions of this contract, except that in all cases other than
those described in clause (ii) above, the provisions relating to
the payment of Total Decommissioning Costs shall, whether or not
the Unit is operated or operable and notwithstanding any earlier
termination of the service life of the Unit, remain in full force
and effect until January 1, 2003 or the completion of
decommissioning, whichever is earlier. Such cancellation shall
be effected by written notice given by the Purchaser to Maine
Yankee. In the event of such cancellation, all continuing
obligations of the parties (other than the obligations relating
to the payment and application of Total Decommissioning Costs to
the extent that such obligations remain in full force and effect
pursuant to the second preceding sentence, but including the
Purchaser's obligations to continue payments pursuant to
clauses (a), (c) and (d) of the second paragraph of Section 7
hereof) shall cease forthwith. Any dispute as to the Purchaser's
right to cancel this contract pursuant to the foregoing
provisions shall be referred to arbitration in accordance with
the provisions of Section 13.
6. A new Section 21 is inserted therein as follows:
"21. Amendments
Upon authorization by Maine Yankee's board of directors of
uniform amendments to all the sponsor power contracts, Maine
Yankee shall have the right to amend the provisions of Section 7
hereof insofar as they relate to the amounts collectible by Maine
Yankee pursuant to clause (b) of the second paragraph of
Section 7 hereof or to the timing of such collections by serving
an appropriate statement of such amendment upon the Purchaser and
filing the same with FERC (or such other regulatory agency as may
have jurisdiction in the premises) in accordance with the
provisions of applicable laws and any rules and regulations
thereunder, and the amendment shall thereupon become effective on
the date specified therein, subject to any suspension order duly
issued by such agency. All other amendments to this contract
shall be by mutual agreement, evidenced by a written amendment
signed by the parties hereto."
This Amendment No. 1 shall become effective on ,
1983, subject to any suspension order duly issued by the Federal Energy
Regulatory Commission.
IN WITNESS WHEREOF, the parties have executed this amendment by their
respective officers duly authorized as of the day of
, 1983.
MAINE YANKEE ATOMIC POWER COMPANY
By
President
PURCHASER
By