EXHIBIT 10.116
Contract No. DE-MS79-94BP94521
PNW AC INTERTIE CAPACITY OWNERSHIP AGREEMENT
executed by the
UNITED STATES OF AMERICA
DEPARTMENT OF ENERGY
acting by and through the
BONNEVILLE POWER ADMINISTRATION
and
PUGET SOUND POWER & LIGHT COMPANY
Index to Sections
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SECTION PAGE
1. Definitions..........................................................4
2. Term and Termination................................................15
3. Capacity Rights.....................................................16
4. Scheduling..........................................................22
5. Upgrades............................................................24
6. Sale or Assignment..................................................28
7. Operation, Maintenance, and Management..............................29
8. Existing Agreements.................................................31
9. Payment Provisions..................................................32
10. Transmission Losses.................................................49
11. Remedial Actions....................................................50
12. Capacity Owners' Committee..........................................52
13. Operating Plan and Amendments to the Operating Plan.................56
14. Arbitration.........................................................70
15. Nonbinding Arbitration..............................................75
16. Audit Rights........................................................85
17. Protected Areas.....................................................90
18. Establishment and Maintenance of Rates and Relief from
Regulatory Action...................................................91
19. Exhibits...........................................................102
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20. Rules of Law.......................................................104
21. Notices............................................................105
22. Waiver.............................................................106
23. Miscellaneous......................................................106
Exhibit A (CO-94, AC-93, IS-93 Rate Schedules and General
Transmission Rate Schedule Provisions)
Exhibit B (Annual Costs Rate)
Exhibit C (Capacity Ownership Share, Capacity Ownership Percentage,
Scheduling Percentage, and Scheduling Share)
Exhibit D (Lump Sum Payment Calculation)
Exhibit E (Transmission Loss Factors)
Exhibit F (Bonneville's PNW AC Intertie)
Exhibit G (Capacity Owners)
Exhibit H (Provisions Required by Statute or Executive Order)
Exhibit I (Bonneville's PNW AC Intertie Costs)
Exhibit J (Puget's Initial Transaction with California Utility)
This PNW AC INTERTIE CAPACITY OWNERSHIP AGREEMENT (Agreement) is
entered into as of ____________, 1994, by the UNITED STATES OF AMERICA,
Department of Energy, acting by and through the BONNEVILLE POWER
ADMINISTRATION (Bonneville or BPA) and PUGET SOUND POWER & LIGHT COMPANY
(Puget), a corporation of the state of Washington. Each of Bonneville and
Puget is sometimes referred to individually in this Agreement as "Party";
Bonneville and Puget are sometimes referred to together in this Agreement as
"Parties."
W I T N E S S E T H :
WHEREAS Bonneville, Portland General Electric Company (Portland), and
PacifiCorp Electric Operations (PacifiCorp) planned and constructed
improvements and additions to the Northwest portion of the PNW-PSW Intertie;
and
WHEREAS such construction was completed in December 1993 resulting in
1600 MW of additional PNW AC Intertie Rated Transfer Capability in a north-
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to-south direction and 1225 MW of additional PNW AC Intertie Rated Transfer
Capability in a south-to-north direction; and
WHEREAS pursuant to the Northwest Intertie Agreements, Bonneville
operates the PNW AC Intertie, in coordination with Portland and PacifiCorp,
as a single system so as to maximize PNW AC Intertie Rated Transfer
Capability and Operational Transfer Capability consistent with Prudent
Utility Practice; and
WHEREAS Bonneville has developed a proposal to offer to PNW non-Federal
scheduling utilities and joint agencies capacity ownership rights in 725 MW
of Bonneville's PNW AC Intertie Rated Transfer Capability; and
WHEREAS such proposal has been studied in Bonneville's Final Non-
Federal Participation Environmental Impact Statement, dated January 1994,
and was the selected alternative in the Administrator's Record of Decision,
dated March 25, 1994; and
WHEREAS Bonneville and Puget executed a Memorandum of Understanding, DE-
MS79-91BP93466, dated September 18, 1991, which, among other things, sets
forth the principles for Puget's capacity ownership rights in Bonneville's
PNW AC Intertie; and
WHEREAS interest expressed in capacity ownership by PNW non-Federal
scheduling utilities and joint agencies exceeded the 725 MW of Bonneville's
PNW AC Intertie Rated Transfer Capability offered by Bonneville, and as a
result Bonneville developed and applied an allocation methodology selected
in the Administrator's Capacity Ownership Record of Decision, dated March
25, 1994; and
WHEREAS concurrent with the execution of this Agreement, Bonneville and
Puget are executing Contract No. DE-MS79-94BP93947 to provide Puget with,
among other things, network wheeling between the John Day Substation and
Puget's transmission system; and
WHEREAS Bonneville is authorized pursuant to law to dispose of electric
power generated at various Federal hydroelectric projects in the PNW, or
acquired
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from other resources, to construct and operate transmission facilities, to
provide transmission and other services, and to enter into agreements to
carry out such authority;
NOW, THEREFORE, Bonneville and Puget agree as follows:
1. DEFINITIONS
(a) "Adjusted Capacity Ownership Price" means the price calculated
pursuant to column 2, section B of Exhibit D and section IV.B of
the CO-94 rate in Exhibit A.
(b) "Adjusted Lump Sum Payment" means the Adjusted Capacity Ownership
Price multiplied by Puget's Capacity Ownership Share (in
kilowatts), as described with more particularity in section D of
Exhibit D.
(c) "Allocated Direct Costs" means for each fiscal year the Operations
Cost as allocated to Bonneville's PNW AC Intertie in accordance
with section I.C of Exhibit I for such fiscal year. Allocated
Direct Costs are not included in Direct Costs, Indirect Costs, or
Overhead Costs.
(d) "Allowance for Funds Used During Construction" or "AFUDC"
constitutes interest on the funds used for utility plant under
construction. The AFUDC rate approximates the cost of money being
used to finance current construction work in progress and is
calculated in accordance with FERC's Uniform System of Accounts,
18 CFR, Part 101, Electric Plant Instructions 3.A(17), or its
successors. AFUDC shall be capitalized in accordance with
Bonneville's accounting procedures and practices, and in any event
consistent with FERC's Uniform System of Accounts, 18 CFR, Part
101, Electric Plant Instructions 3.A(17), or its successors.
(e) "Billing Provisions" means those provisions set forth in Exhibit
B, Part B.
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(f) "Bonneville's PNW AC Intertie" means facilities of the PNW AC
Intertie owned partially or entirely by Bonneville specified in
Exhibit F together with the equipment and facilities installed in
or connected to such facilities specified in Exhibit F, to the
extent such facilities are necessary for the transmission of power
on the PNW AC Intertie.
(g) "Bonneville's PNW AC Intertie Operational Transfer Capability"
means Bonneville's PNW AC Intertie Rated Transfer Capability as
reduced by limitations beyond the control of the Parties, and by
operational limitations (as determined by Bonneville in accordance
with the agreement between Bonneville and PacifiCorp, Contract No.
DE-MS79-94BP94332, as amended from time to time pursuant to the
terms thereof, and with the agreement between Bonneville and
Portland, Contract No. DE-MS79-87BP92340, as amended from time to
time pursuant to the terms thereof, and in accordance with Prudent
Utility Practice) resulting from, among other things, line or
equipment outages, stability limits, or loopflow.
(h) "Bonneville's PNW AC Intertie Rated Transfer Capability" means
Bonneville's share of the PNW AC Intertie Rated Transfer
Capability as determined in accordance with the agreement between
Bonneville and PacifiCorp, Contract No. DE-MS79-94BP94332, as
amended from time to time pursuant to the terms thereof, and with
the agreement between Bonneville and Portland, Contract No. DE-
MS79-87BP92340, as amended from time to time pursuant to the terms
thereof.
(i) "Capacity Owner" means each of the parties listed in Exhibit G to
the extent that such party has entered into a Capacity Ownership
Agreement.
(j) "Capacity Ownership Agreement" means, in the singular, this
Agreement or the agreement, substantially identical to this
Agreement, entered into by each Capacity Owner (other than Puget)
and Bonneville, and in the plural, this Agreement and all such
substantially identical agreements entered into respectively by
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Capacity Owners (other than Puget) and Bonneville, as each such
agreement may be amended or supplemented from time to time
pursuant to the terms of such agreement, concerning (among other
things) the rights of such Capacity Owner with respect to the PNW
AC Intertie.
(k) "Capacity Ownership Percentage" means, as of the Effective Date,
in the singular, the percentage of Bonneville's PNW AC Intertie
Rated Transfer Capability owned by Puget pursuant to this
Agreement, which percentage is determined by dividing Puget's
Capacity Ownership Share as of the Effective Date by Bonneville's
PNW AC Intertie Rated Transfer Capability as of the Effective Date
(such percentage being subject to change pursuant to the terms of
this Agreement), and in the plural, the percentages of
Bonneville's PNW AC Intertie Rated Transfer Capability owned by
the other Capacity Owners, respectively, pursuant to their
respective Capacity Ownership Agreements (other than this
Agreement), which percentages are set forth in Exhibit G (each of
such percentages being subject to change pursuant to the
respective terms of such Capacity Ownership Agreements).
(l) "Capacity Ownership Rights" means the rights of Puget pursuant to
this Agreement.
(m) "Capacity Ownership Share" means, except as such term is otherwise
used in sections III.A and III.B of the CO-94 rate set forth in
Exhibit A on the Effective Date, in the singular, the MW amount of
Bonneville's PNW AC Intertie Rated Transfer Capability owned by
Puget pursuant to this Agreement, which MW amount is set forth in
Exhibit C (such amount being subject to change pursuant to the
terms of this Agreement), and in the plural, the MW amounts of
Bonneville's PNW AC Intertie Rated Transfer Capability owned by
the other Capacity Owners, respectively, pursuant to their
respective Capacity Ownership Agreements (other than this
Agreement), which amounts are set forth in Exhibit G (each of such
amounts being subject to
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change pursuant to the respective terms of such Capacity Ownership
Agreements).
(n) "Committee" has the meaning set forth in subsection 12(a).
(o) "Contracts and Rates Costs" means, upon and after the effective
date of Exhibit B pursuant to this Agreement, for any fiscal year
Bonneville's total contracts and rates costs (as described in
section VI of Exhibit I) for such fiscal year as functionalized
and allocated in accordance with section VI of Exhibit I to
determine Contracts and Rates Costs for Bonneville's PNW AC
Intertie.
(p) "Direct Costs" means any costs incurred by Bonneville which are
readily identifiable, or obviously traceable to, and directly
benefit, a specific Bonneville program, project, or other cost
objective. Direct Costs are not included in Allocated Direct
Costs, Overhead Costs, or Indirect Costs. The methods for
determining Direct Costs for Bonneville's PNW AC Intertie are set
forth in sections II.B and III.A of Exhibit I.
(q) "Effective Date" means the date as of which this Agreement becomes
effective pursuant to section 2.
(r) "End of Term Costs" means, upon and after the effective date of
Exhibit B pursuant to this Agreement, Bonneville's costs
associated with decommissioning the PNW AC Intertie determined in
accordance with section VIII of Exhibit I.
(s) "FERC" means the Federal Energy Regulatory Commission or its
regulatory successor.
(t) "General Plant Cost" means, upon and after the effective date of
Exhibit B pursuant to this Agreement, for any fiscal year any
costs (including direct costs, indirect costs, overhead costs, and
AFUDC) for Bonneville's general plant investment for such fiscal
year. The
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method for determining General Plant Cost is set forth in section
IV of Exhibit I.
(u) "GTRSP" or "GTRSPs" means Bonneville's General Transmission Rate
Schedule Provisions, set forth in Exhibit A, as such provisions
may be revised from time to time.
(v) "Indirect Costs" means any costs incurred by Bonneville which
indirectly benefit and are directly charged to a specific
Bonneville program, project, or other cost objective for which a
Direct Cost or Allocated Direct Cost is charged. Indirect Costs
shall not be included in Allocated Direct Costs, Direct Costs, or
Overhead Costs. The methods for determining Indirect Costs for
Bonneville's PNW AC Intertie are set forth in sections I.D, II.D,
and III.B of Exhibit I.
(w) "Initial Capacity Ownership Price" means $215 per kilowatt, the
calculation of which charge is set forth in column 1, section B of
Exhibit D and in section III.A of the CO-94 rate in Exhibit A.
(x) "Initial Lump Sum Payment" means the Initial Capacity Ownership
Price multiplied by Puget's Capacity Ownership Share (in
kilowatts), as described with more particularity in section C of
Exhibit D.
(y) "Interconnection Agreement" means the "Interim Interconnection
Agreement Between Certain California-Oregon Transmission Project
Participants and Northwest Participants," Contract No. DE-MS79-
91BP93158, as amended or superseded.
(z) "Joint AC Intertie" is as defined in the agreement between
Bonneville and Portland, Contract No. DE-MS79-87BP92340, as
amended from time to time pursuant to the terms thereof.
(aa) "Joint Intertie Scheduling Office" or "JISO" means the group of
Bonneville, Portland, and PacifiCorp schedulers, which, among
other things, accepts PNW-PSW Intertie Preschedules.
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(bb) "Maintenance Cost" means, upon and after the effective date of
Exhibit B pursuant to this Agreement, for any fiscal year any
maintenance Direct Costs for Bonneville's PNW AC Intertie,
maintenance Indirect Costs for Bonneville's PNW AC Intertie, and
maintenance Overhead Costs for Bonneville's PNW AC Intertie for
such fiscal year, each being determined in accordance with section
II of Exhibit I.
(cc) "MW" means megawatt.
(dd) "Northwest Intertie Agreements" means the agreement between
Bonneville and PacifiCorp, Contract No. DE-MS79-94BP94332, as
amended from time to time pursuant to the terms thereof, and the
agreement between Bonneville and Portland, Contract No. DE-MS79-
87BP92340, as amended from time to time pursuant to the terms
thereof.
(ee) "Operating Plan" means, subject to subsection 13(o), with respect
to any fiscal year commencing on or after the day on which the
annual costs rate set forth in Exhibit B has been approved on an
interim or final basis by FERC, the written document containing
the information described in subsection 13(c), as such document
may be amended pursuant to section 13, 14, or 16.
(ff) "Operations Cost" means, upon and after the effective date of
Exhibit B pursuant to this Agreement, for any fiscal year any
Allocated Direct Costs for Bonneville's PNW AC Intertie,
operations Indirect Costs for Bonneville's PNW AC Intertie, and
operations Overhead Costs for Bonneville's PNW AC Intertie for
such fiscal year, each being determined in accordance with section
I of Exhibit I.
(gg) "Other Costs" means, upon and after the effective date of
Exhibit B pursuant to this Agreement, Bonneville's other costs for
Bonneville's PNW AC Intertie described in and determined pursuant
to section V of Exhibit I.
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(hh) "Overhead Cost" means administrative and general costs, support
service costs, or other costs similar in nature which are
distributed or allocated by Bonneville to Bonneville's PNW AC
Intertie. Overhead Costs are not included in Direct Costs,
Allocated Direct Costs, or Indirect Costs. The methods for
determining Overhead Costs are set forth in sections I.E, II.E,
and III.B of Exhibit I.
(ii) "Pacific Northwest" or "PNW" means the area defined as the Pacific
Northwest in the Pacific Northwest Electric Power Planning and
Conservation Act, 16 U.S.C. section 839a(14).
(jj) "Pacific Time" means Pacific Standard Time and Pacific Daylight
Time as each is in force.
(kk) "PNW AC Intertie" means facilities including, but not limited to,
the following: two 500 kV transmission lines extending from John
Day Substation to the Malin Substation and to the California-
Oregon border; portions of John Day, Grizzly, and Malin
Substations and the Sand Springs, Fort Rock, and Sycan
Compensation Stations; a portion of the Buckley-Summer Lake 500 kV
transmission line and associated substations; portions of the
Buckley-Marion and Marion-Alvey 500 kV transmission lines and
associated facilities; a portion of Bonneville's capacity rights
in the Summer Lake-Malin 500 kV transmission line; Bonneville's
rights in the Meridian-Malin 500 kV transmission line and
Bonneville's share of ownership of the Alvey-Meridian 500 kV
transmission line; Captain Jack Substation; the 500 kV
transmission line from Captain Jack Substation to the California-
Oregon border; and any modifications, additions, improvements, or
other alterations thereto.
(ll) "PNW AC Intertie Operational Transfer Capability" means the PNW AC
Intertie Rated Transfer Capability as reduced by limitations
beyond the control of the Parties, and operational limitations (as
determined by Bonneville in accordance with the agreement between
Bonneville and PacifiCorp, Contract No. DE-MS79-94BP94332, as
amended from time to time pursuant to the terms thereof, and with
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the agreement between Bonneville and Portland, Contract No. DE-
MS79-87BP92340, as amended from time to time pursuant to the terms
thereof, and in accordance with Prudent Utility Practice)
resulting from, among other things, line or equipment outages,
stability limits, or loopflow.
(mm) "PNW AC Intertie Rated Transfer Capability" means the north-to-
south and south-to-north capability of the PNW AC Intertie to
transfer power in a reliable manner as determined consistent with
Prudent Utility Practice.
(nn) "Pacific Northwest-Pacific Southwest Intertie" or "PNW-PSW
Intertie" means the DC transmission line between the Celilo
Converter Station in The Dalles, Oregon, and the Sylmar Converter
Station near Los Angeles, California, the PNW AC Intertie, and the
AC Intertie in California including, without limitation, the
California-Oregon Transmission Project.
(oo) "Pacific Northwest Non-Federal Utility" means any electric utility
that serves retail load in the region consisting of (1) the states
of Oregon, Washington, and Idaho, the portion of the state of
Montana west of the Continental Divide, and such portions of the
States of Nevada, Utah, and Wyoming as are within the Columbia
River Basin drainage basin, and (2) any contiguous areas, not in
excess of seventy-five air miles from the area referred to in (1)
above, which areas are a part of the service area of a rural
electric cooperative power customer served by Bonneville on the
effective date of the Pacific Northwest Power Planning and
Conservation Act (P.L. 96-501) having a distribution system from
which it serves both within and without such region.
(pp) "Power Scheduling Costs" means, upon and after the effective date
of Exhibit B pursuant to this Agreement, Bonneville's total power
scheduling costs (as described in section VII of Exhibit I) as
functionalized and allocated in accordance with section VII of
Exhibit
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I to determine Power Scheduling Costs for Bonneville's PNW AC
Intertie.
(qq) "Preschedule" means the schedule submitted by Puget to the JISO
pursuant to paragraph 4(b)(1) for transactions prepared each
Working Day for the period beginning 2400 hours of the current
Working Day through 2400 hours of the next Working Day.
(rr) "Prudent Utility Practice" means, at any particular time, the
generally accepted practices, methods, and acts in the electrical
utility industry in the Western Systems Coordinating Council area
prior thereto that would achieve the desired result or, if there
are no such practices, methods, and acts, the practices, methods,
and acts which, in the exercise of reasonable judgment in the
light of facts known at the time the decision was made, could have
been expected to achieve the desired result consistent with
reliability and safety.
(ss) "Real-time Schedule" means a schedule, or change to the
Preschedule, submitted during the period which begins when the
Preschedule is deemed by the JISO to be complete and concludes at
2400 hours on the day for which the Preschedule is submitted by
Puget.
(tt) "Reinforcement" means any transmission plant modification,
addition, improvement, or other alteration to the Federal Columbia
River Transmission System which is not a Replacement or an Upgrade
and which is made pursuant to subsection 7(c).
(uu) "Reinforcement Costs" means, upon and after the effective date of
Exhibit B pursuant to this Agreement, for any Reinforcement, the
Direct Costs, Indirect Costs, Overhead Costs, and AFUDC for such
Reinforcement, all capitalized to plant-in-service together with
(1) simple interest on the foregoing costs accrued from the date
on which Bonneville stops accruing AFUDC on the foregoing costs
until the due date of the bill to Puget for the foregoing costs
pursuant to subparagraph 9(b)(2)(B) and (2) the costs of removal
and any salvage credit with respect to any PNW AC Intertie
facility removed on
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account of such Reinforcement. Reinforcement Costs do not include
capitalized general plant cost. The method for determining
Reinforcement Costs for Bonneville's PNW AC Intertie is set forth
in section III of Exhibit I.
(vv) "Replacement" means for any transmission plant addition,
betterment, renewal and equipment or facility that takes the place
of or adds to any existing equipment or facility on Bonneville's
PNW AC Intertie that does not increase Bonneville's PNW AC
Intertie Rated Transfer Capability.
(ww) "Replacement Costs" means, upon and after the effective date of
Exhibit B pursuant to this Agreement, for any Replacement, the
Direct Costs, Indirect Costs, Overhead Costs, and AFUDC for such
Replacement, all capitalized to plant-in-service together with (1)
simple interest on the foregoing costs accrued from the date on
which Bonneville stops accruing AFUDC on the foregoing costs until
the due date of the bill to Puget for the foregoing costs pursuant
to subparagraph 9(b)(2)(B) and (2) the costs of removal and any
salvage credit with respect to any PNW AC Intertie facility
removed on account of such Replacement. General Plant Cost is not
included in Replacement Costs. The method for determining
Replacement Costs for Bonneville's PNW AC Intertie is set forth in
section III of Exhibit I.
(xx) "Revised Adjusted Capacity Ownership Price" means a price
calculated pursuant to column 3, section B of Exhibit D and
section IV.B of the CO-94 rate in Exhibit A.
(yy) "Revised Adjusted Lump Sum Payment" means a Revised Adjusted
Capacity Ownership Price multiplied by Puget's Capacity Ownership
Share (in kilowatts), as described with more particularity in
section E of Exhibit D.
(zz) "Scheduler" means the person authorized by a Party to accept or
submit schedules pursuant to section 4 and authorized to
implement,
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interpret, and vary the scheduling procedures set forth in such
section pursuant to this Agreement.
(aaa) "Scheduling Percentage" means the percentage of the PNW AC
Intertie Rated Transfer Capability owned by Puget pursuant to this
Agreement, which percentage is determined by dividing Puget's
Capacity Ownership Share by the PNW AC Intertie Rated Transfer
Capability.
(bbb) "Scheduling Share" means, for any given hour, the MW amount equal
to the product of Puget's Scheduling Percentage and the PNW AC
Intertie Operational Transfer Capability for such hour.
(ccc) "Scheduling Utility" means either (i) a Pacific Northwest Non-
Federal Utility that serves a retail service area and operates a
generation control area, or (ii) a Pacific Northwest Non-Federal
Utility designated by Bonneville as a "computed requirements
customer" or its equivalent.
(ddd) "Term" means the period of effectiveness of this Agreement set
forth in subsection 2(a).
(eee) "Third AC Intertie" means the Third AC Intertie Project, which
project increased the PNW AC Intertie Rated Transfer Capability by
1600 MW in a north-to-south direction and by 1225 MW in a south-to-
north direction.
(fff) "Third AC Intertie Project" means the Third AC Intertie System
Reinforcement and the construction of the Alvey-Meridian 500 kV
transmission line and of facilities related to such transmission
line during the period from July 1984 through December 1993.
(ggg) "Third AC Intertie System Reinforcement" means the improvements,
additions and modifications to the PNW AC Intertie constructed
during the period from July 1984 through December 1993 plus the
construction of the Captain Jack substation and of facilities
related to
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such substation during the period from July 1984 through December
1993.
(hhh) "Upgrade" means any MW increase to Bonneville's PNW AC Intertie
Rated Transfer Capability which arises from or is related to an
increase to the PNW AC Intertie Rated Transfer Capability.
(iii) "Working Day" means any day other than Saturday, Sunday, and a
legal holiday recognized by the Federal government or Puget.
2. TERM AND TERMINATION
(a) This Agreement shall become effective as of the later of (1) the
date of execution and delivery of this Agreement by both of the
Parties, and (2) the date by which this Agreement has, with
respect to Puget, been approved, accepted for filing or otherwise
permitted to become effective by FERC; provided, that if FERC
approves this Agreement for filing or otherwise permits this
Agreement to become effective with any change or new condition,
this Agreement shall not be or become effective unless both of the
Parties have agreed in writing, and until the date by which both
of the Parties have so agreed to such change or new condition. To
the extent Puget is required to submit this Agreement to FERC,
Puget shall submit this Agreement to FERC for approval no later
than three Working Days after the date on which this Agreement is
executed and delivered by both Parties. Bonneville shall provide
Puget with a copy of the executed Agreement on the next Working
Day after Bonneville executes the Agreement. Without limiting any
of the foregoing, Puget shall use best efforts to obtain from FERC
on the earliest possible date (following the date on which Puget
is required to submit this Agreement to FERC pursuant to this
subsection 2(a)) FERC's acceptance for filing or permission that
this Agreement become effective in accordance with this subsection
2(a). This Agreement shall continue in effect so long as any
facilities of the PNW AC Intertie are in existence and operable,
unless otherwise
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earlier terminated by written agreement of both of the Parties or
unless terminated pursuant to the terms of this Agreement. All
liabilities incurred under this Agreement shall be preserved until
satisfied.
(b) Notwithstanding subsection 2(a), no Capacity Ownership Rights may
be exercised by Puget until payment is made by Puget pursuant to
paragraph 9(a)(1) and received by Bonneville.
(c) If Bonneville does not receive the payment from Puget pursuant to
paragraph 9(a)(1), then Bonneville shall have the option to
terminate this Agreement by delivering to Puget written notice of
such termination.
(d) Notwithstanding subsection 2(a), if Bonneville incurs End of Term
Costs, the following provisions of this Agreement, and all rights
and obligations thereunder, shall continue in full force and
effect until Bonneville renders its final bill to Puget pursuant
to subsection 9(b), unless this Agreement is earlier terminated by
mutual agreement of the Parties: subsections 2(b), 2(c), and
2(d), sections 1, 7, 8, 9, 12, 13, 14, 15, 16, 18, 19, 20, 21, 22,
and 23, and Exhibits A, B, C, D, F, G, H, and I. All liabilities
incurred under such provisions of this Agreement shall be
preserved until satisfied.
(e) If this Agreement has not become effective pursuant to subsection
2(a) within 12 months following the date upon which Bonneville
executes and delivers this Agreement to Puget, this Agreement
shall be void ab initio and of no force or effect.
3. CAPACITY RIGHTS
(a) Purchase and Sale of Capacity
Pursuant to the terms and conditions of this Agreement, Puget
purchases from Bonneville and Bonneville sells to Puget the
Capacity Ownership Rights.
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(b) Right to Wheel for Third Parties
No later than 30 days after the Effective Date, Puget shall notify
Bonneville in writing of Puget's decision to utilize its
Scheduling Share pursuant to either paragraph 3(b)(1) or paragraph
3(b)(2), and Puget shall have the right to utilize its Scheduling
Share pursuant to the paragraph Puget elects. Prior to
Bonneville's receipt of such notification, Puget shall utilize its
Scheduling Share pursuant to paragraph 3(b)(1). If Puget fails to
make an election within the prescribed time period, Puget shall be
deemed to have elected the option set forth in paragraph 3(b)(1).
(1) No Third Party Wheeling
(A) Except as expressly provided in subparagraph 3(b)(1)(B),
Puget shall not use its Scheduling Share to transmit
power or energy (except for inadvertent power flows)
that Puget does not own at the California-Oregon border
or for which transmission Puget receives any revenue
that would be reportable in Puget's accounting system
where revenues received for wheeling for other entities
would be booked.
(B) If Puget's Scheduling Share is not fully utilized by
Puget in any hour, Bonneville may schedule for such hour
Bonneville's transactions (including, without
limitation, Bonneville wheeling for other entities) and
wheel such transactions over the unused portion of
Puget's Scheduling Share for such hour but no longer
than such hour. Puget shall be compensated for such
wheeling solely by the payments as described in sections
3(b)(1)(B)(i) and (ii) below. For purposes of this
subparagraph 3(b)(1)(B), Puget's Scheduling Share shall
be deemed to be not fully utilized in a given hour to
the extent that Puget has not scheduled, or does not
schedule, on a Preschedule or Real-time Schedule basis,
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any transaction for such hour on any MW amount of
Puget's Scheduling Share. In return for Puget's
Scheduling Share being made available to Bonneville
pursuant to this subparagraph 3(b)(1)(B), Bonneville
shall pay Puget
(i) an amount equal to the product of (1) all
wheeling revenues received by Bonneville from
providing short term wheeling in a north-to-south
direction under the IS-93 rate, section II.A, or
its successor to other entities in such hour, and
(2) the ratio of Puget's unused Scheduling Share
in such hour to the total amount of PNW AC
Intertie Operational Transfer Capability made
available by Bonneville for such wheeling in such
hour, and
(ii) an amount equal to the product of (1) all
wheeling revenues received by Bonneville from
providing short term wheeling in a south-to-north
direction under the IS-93 rate, section II.A or
its successor to other entities in such hour, and
(2) the ratio of Puget's unused Scheduling Share
in such hour to the total amount of PNW AC
Intertie Operational Transfer Capability made
available by Bonneville for such wheeling in such
hour; provided, however, that Bonneville shall not
be required to make payments for such south-to-
north wheeling pursuant to this section
3(b)(1)(B)(ii) earlier than two years after the
Effective Date.
Bonneville shall make payments pursuant to this
subparagraph 3(b)(1)(B) in accordance with paragraph
9(f)(1).
18
(C) During an outage resulting from maintenance activities
on the PNW AC Intertie performed by Bonneville other
than maintenance activities undertaken due to
emergencies or uncontrollable forces, the following
shall apply:
(i) When Puget's Scheduling Share for any given hour
is reduced as a consequence of such outage which
reduces in Bonneville's PNW AC Intertie
Operational Transfer Capability such that Puget's
Scheduling Share for such hour is less than the MW
amount of the aggregate of Puget's net firm
transactions identified by Puget to Bonneville
pursuant to section 3(b)(1)(C)(iv) for such hour,
Bonneville shall, subject only to sections
3(b)(1)(C)(ii) and (iii) and to the immediately
succeeding sentence, wheel on a firm basis that
portion of Puget's firm transactions that equals
the difference between Puget's Scheduling Share
for such hour and the MW amount of the aggregate
of Puget's firm transactions for such hour up to,
but not in excess of, Puget's Capacity Ownership
Share. Notwithstanding the foregoing, Bonneville
shall only be obligated to provide such wheeling
to the extent that each party with whom Puget is
conducting such firm transactions has received a
sufficient AC Intertie capacity allocation in
California to accommodate such transactions.
Puget shall pay the IS-93 rate, section II.A, or
its successor for such wheeling pursuant to this
section 3(b)(1)(C)(i) in accordance with
subsection 9(d).
(ii) Bonneville shall not be obligated to provide such
wheeling to Puget pursuant to section
19
3(b)(1)(C)(i) if no PNW AC Intertie Operational
Transfer Capability is available to Bonneville
after Bonneville has scheduled all of Bonneville's
Firm Schedules. For purposes of this section,
"Bonneville's Firm Schedules" shall mean schedules
for assured delivery or other firm transmission
contracts pursuant to the Long-Term Intertie
Access Policy, as revised or amended, or its
successor, and schedules for Bonneville's firm
power and energy sales and exchange transactions.
(iii) Bonneville shall not be obligated to provide such
wheeling to Puget pursuant to section
3(b)(1)(C)(i) until Bonneville has successfully
developed software to allow Bonneville to provide
such wheeling to Puget or until October 1, 1994,
whichever occurs sooner.
(iv) No later than ten Working Days prior to the first
day of deliveries under a firm transaction, Puget
shall identify such firm transaction to
Bonneville. Puget shall identify such firm
transaction to Bonneville by providing to
Bonneville a copy of Puget's contract for such
firm transaction (after information considered
proprietary by Puget has been redacted by Puget).
Bonneville shall review such contract to verify
that the transaction is firm. If Puget and its
contractor represent or state in writing that the
transaction set forth in their contract is firm,
Bonneville shall accept that written
representation or statement as dispositive of the
question of whether such transaction is firm.
Implementation of such procedures in this section
3(b)(1)(C)(iv) may be varied by the
20
mutual agreement of the Parties' Schedulers.
Such mutual agreement may, but need not, be
written.
(D) Puget retains any and all rights of access which it
would otherwise have to Bonneville's PNW-PSW Intertie
through the Long-Term Intertie Access Policy, as revised
or amended, or its successor.
(2) Third Party Wheeling
(A) Puget may use its Scheduling Share to transmit any and
all power and energy, whether or not such power or
energy is owned by Puget. Puget shall have no
obligation under this Agreement to make available to
Bonneville any portion of Puget's Scheduling Share which
is unused in any hour, and Bonneville shall not schedule
over Puget's Scheduling Share without Puget's prior
consent.
(B) Puget hereby waives any and all rights of access to
Bonneville's PNW-PSW Intertie through the Long-Term
Intertie Access Policy, as revised or amended, or its
successor; provided, however, that Bonneville may, at
its option, provide Puget with access to Bonneville's
PNW-PSW Intertie pursuant to any provision of the Long-
Term Intertie Access Policy, as revised or amended, or
its successor.
(C) Puget shall provide Bonneville with the information set
forth in sections 3(b)(2)(C)(i) through 3(b)(2)(C)(iii)
when Puget uses its Scheduling Share to export from the
Pacific Northwest energy or power received from third
parties. Such exports of energy or power on a real-time
basis or for durations of less than four months are
excluded from this obligation. For exports of four
21
months or longer duration made on behalf of third
parties pursuant to paragraph 3(b)(2), such information
shall include:
(i) the name and business address of the third party;
(ii) the amount of power or energy and the duration of
the transaction; and
(iii) the name of the recipient or purchaser of such
power.
Any additional information needed by Bonneville will be
obtained from such third party.
4. SCHEDULING
(a) Puget (and only Puget) shall be entitled to schedule on the PNW AC
Intertie, in any hour, a MW amount up to Puget's Scheduling Share
for such hour. The MW amount of Puget's Scheduling Share deemed
to be scheduled on the PNW AC Intertie pursuant to this Agreement,
in any hour, shall be determined as the net of Puget's north-to-
south schedules and south-to-north schedules (net schedules) for
such hour.
(b) Puget shall submit all schedules of its Scheduling Share on its
own behalf in accordance with the procedures set forth in
paragraphs 4(b)(1) and 4(b)(2). Such procedures may be varied by
the mutual agreement of the Parties' Schedulers. Such mutual
agreement may, but need not, be written. All hours referenced in
paragraphs 4(b)(1) and 4(b)(2) are Pacific Time.
(1) Preschedules
(A) Bonneville shall make available to Puget on each Working
Day as soon as practicable after 0800 hours
22
information regarding the PNW AC Intertie Operational
Transfer Capability with respect to Preschedules. In
the event an emergency or uncontrollable force causes a
change in the PNW AC Intertie Operational Transfer
Capability, Bonneville shall notify Puget of such change
as soon as practicable.
(B) If Long-Term Intertie Access Policy Condition 1 Formula
Allocation Procedures or their successor (Condition 1)
are expected by Bonneville to become effective,
Bonneville shall so notify Puget no later than 0930
hours on the Working Day prior to the day on which
Condition 1 is expected to become effective. Bonneville
shall notify Puget no later than 0930 hours on the
Working Day prior to the day on which Condition 1 ceases
to be in effect.
(C) Puget shall submit its Preschedule to the Joint Intertie
Scheduling Office no later than 1000 hours on each
Working Day if Condition 1 is in effect. If Condition 1
is not in effect, Puget shall submit its Preschedule to
the JISO no later than 1430 hours on each Working Day.
(2) Real-time Scheduling
(A) Real-time Schedules shall be arranged through
Bonneville's real-time scheduling office. Bonneville's
real-time Scheduler shall make reasonable efforts to
receive Real-time Schedules; provided, however, that
Bonneville's real-time Scheduler may, but is not
required to, accept Real-time Schedules between 1500 and
2200 hours on the Working Day preceding the day for
which such Real-time Schedule is submitted.
23
(B) Real-time Schedules shall be arranged for a full hour.
Arrangements shall be completed no later than 30 minutes
prior to that hour.
(C) Puget shall use best efforts to keep schedule changes to
a minimum; provided, however, that for purposes of this
subparagraph 4(b)(2)(C), "best efforts" shall not be
deemed to refer to efforts made regardless of their
economic effect.
(D) The requirements set forth in subparagraphs 4(b)(2)(B)
and 4(b)(2)(C) do not preclude schedule changes at other
times as may be deemed necessary by any control area
operators or other entities involved in effectuating
such schedule changes. Such control area operators and
other entities shall be notified by Bonneville of such
schedule changes as soon as practicable in accordance
with Prudent Utility Practice for purposes of
coordinating ramps and proper accounting. Such schedule
changes shall be deemed to occur at mid-ramp. The mid-
ramp time and the integrated value for the hour shall be
subject to the mutual agreement by such control area
operators and other entities.
(E) Subject to compliance with subparagraphs 4(b)(2)(A)
through 4(b)(2)(D) and with other applicable PNW AC
Intertie scheduling practices then in effect, Bonneville
shall make Puget's schedule change.
24
(c) Bonneville shall make deliveries of power or energy to the
California-Oregon border or the John Day Substation, as
appropriate, pursuant to schedules submitted in accordance with
this section 4; provided, however, that Bonneville shall not be
required to make such deliveries in an hour to the extent that
Puget's schedule exceeds Puget's Scheduling Share for such hour,
except as may be expressly provided pursuant to subparagraph
3(b)(1)(C).
5. UPGRADES
(a) Bonneville shall consult with the Committee one time each year
regarding any plans for Upgrades.
(b) Prior to the completion of an Upgrade, Bonneville shall provide to
Puget information in writing regarding estimated costs and the MW
amount of such Upgrade, to the extent that such information is
available to Bonneville.
(c) As soon as practicable following the completion of an Upgrade,
Bonneville shall notify Puget in writing of the following: (1)
the MW amount of such Upgrade; (2) the capital and related costs
(less any amount of such costs collected by Bonneville through
rates or charges other than pursuant to the CO-94 rate in Exhibit
A), if any, to Bonneville for completing or implementing such
Upgrade; and (3) calculations of (A) Puget's Capacity Ownership
Percentage multiplied by the MW amount of such Upgrade and (B)
Puget's Capacity Ownership Percentage multiplied by the capital
and related costs, if any, to Bonneville for completing or
implementing such Upgrade. Puget may elect to acquire a share of
such Upgrade in an amount up to Puget's Capacity Ownership
Percentage multiplied by the MW amount of such Upgrade. Within
100 days from receipt of such written notice from Bonneville,
Puget shall notify Bonneville in writing of Puget's decision
regarding such acquisition. If Puget elects to acquire, pursuant
to this subsection 5(c), a portion of such Upgrade, Puget's notice
to Bonneville shall include the percentage of such Upgrade that
Puget elects to acquire (Acquisition Percentage). If
25
Puget fails to notify Bonneville within such 100-day period, Puget
shall be deemed to have elected not to acquire any of such
Upgrade.
(d) If Puget elects to acquire a portion of an Upgrade pursuant to
subsection 5(c), the cost to Puget shall be Puget's Acquisition
Percentage multiplied by the capital and related costs for such
Upgrade pursuant to the CO-94 rate and subsection 9(c) (less any
amount of such cost collected by Bonneville through rates or
charges other than pursuant to the CO-94 rate in Exhibit A), if
any, incurred by Bonneville for completing or implementing such
Upgrade. Puget shall pay such costs pursuant to such payment
terms as may be mutually agreed to in writing by the Parties.
(e) If Puget's Acquisition Percentage with respect to an Upgrade
equals its Capacity Ownership Percentage and the Acquisition
Percentage of any other Capacity Owner with respect to such
Upgrade is less than its Capacity Ownership Percentage, then the
following shall apply:
(1) Bonneville shall, in a timely manner, provide written notice
simultaneously to Puget and to each other Capacity Owner
(whose Acquisition Percentage equals its Capacity Ownership
Percentage) of the MW amount equal to 100 percent of that
portion of an Upgrade offered to, but not acquired by, the
Capacity Owners pursuant to subsection 5(c) (Unacquired
Share). If Puget and each of such other Capacity Owners have
agreed in writing to an apportionment as among themselves of
the Unacquired Share (Apportionment), Puget may, within 45
days following receipt of such written notice from
Bonneville, by written notice request Bonneville to offer in
writing to Puget such portion of the Unacquired Share as has
been apportioned to Puget pursuant to the Apportionment, and
Bonneville shall offer to Puget such portion of the
Unacquired Share.
(2) If Bonneville does not receive from Puget and from each
Capacity Owner referred to in paragraph 5(e)(1) the requests
for offer pursuant to paragraph 5(e)(1) within the 45-day
period
26
specified in such paragraph, Bonneville shall, in a timely
manner, offer in writing simultaneously to Puget and to each
other Capacity Owner (whose Acquisition Percentage equals its
Capacity Ownership Percentage), respectively, a portion of an
Upgrade offered to, but not acquired by, the other Capacity
Owners pursuant to paragraph 5(e)(1) (Second Unacquired
Share) up to the "Additional Share Offered" determined as
follows:
Additional Share Offered = (A divided by B) x C
where: A = Puget's Capacity Ownership Percentage.
B = Percentage equal to the sum of Capacity
Ownership Percentages of Capacity Owners that
acquired respectively an Acquisition Percentage
equal to their Capacity Ownership Percentage.
C = Second Unacquired Share.
(3) Within 30 days following Puget's receipt of Bonneville's
written offer pursuant to paragraph 5(e)(2), Puget shall
notify Bonneville in writing of Puget's decision regarding
acquisition of the Additional Share Offered. If Puget fails
to notify Bonneville within such 30-day period, Puget shall
be deemed to have elected not to acquire any of the
Additional Share Offered. If Puget elects pursuant to this
paragraph 5(e)(3) to acquire any or all of the Additional
Share Offered, then:
(A) Puget shall include in its notice to Bonneville pursuant
to this paragraph 5(e)(3) such share (Additional Share
Acquired) of the Additional Share Offered as Puget
elects to acquire pursuant to this paragraph 5(e)(3),
and
(B) the cost to Puget with respect to such acquisition shall
be equal to the proportion of the Additional Share
Acquired to such Upgrade multiplied by the capital and
related costs for such Upgrade pursuant to the CO-94
27
rate and subsection 9(c) (less any amount of such costs
collected by Bonneville through charges other than
payments by Puget pursuant to subsection 5(d) or
subparagraph 5(e)(3)(B)), if any, to Bonneville for
completing or implementing such Upgrade. Puget shall
pay such costs pursuant to such payment terms as may be
mutually agreed to in writing by the Parties.
(f) All capacity offered but not acquired pursuant to subsections 5(c)
and (e) shall for purposes of this Agreement remain with
Bonneville.
(g) After Puget has either accepted or declined all offers of capacity
by Bonneville pursuant to subsections 5(c) and (e), Puget's
Capacity Ownership Share, Capacity Ownership Percentage, and
Scheduling Percentage in Exhibit C shall be revised to reflect
changes resulting from Puget's elections pursuant to subsections
5(c) and (e). Revision of Exhibit C shall be pursuant to
subsection 19(d). Exhibit G shall be revised accordingly pursuant
to subsection 19(i).
6. SALE OR ASSIGNMENT
(a) This Agreement or any interest herein shall not be transferred,
sold, alienated, or assigned by Puget to any person without
Bonneville's prior and express written consent. Such consent
shall not be unreasonably withheld. In determining whether to
grant its consent under this subsection 6(a), Bonneville shall
take into consideration information including, but not limited to,
whether the person or entity to whom this Agreement or any
interest therein is proposed to be transferred, sold, alienated,
or assigned is a person or entity entitled to request and receive
transmission services pursuant to section 211 of the Federal Power
Act, whether such person or entity can either provide its own
scheduling services or has contracted with another entity to
provide such scheduling services, whether such person or entity
has the financial capability to meet the payment obligations under
this Agreement, and whether the person or entity is either
electrically interconnected to Bonneville's transmission system or
has
28
contractual arrangements for wheeling with others who are
electrically interconnected to Bonneville's transmission system.
This Agreement shall inure to the benefit of and be binding upon
the Parties, their respective legal representatives, permitted
assigns, and successors in interest. Any transfer, sale,
alienation, or assignment made by Puget in violation of this
section 6 shall be void ab initio and without any force or effect
whatsoever.
(b) Bonneville hereby consents to the transfer, sale, alienation, or
assignment by Puget to any other Capacity Owner of all or part of
its Capacity Ownership Share and all of Puget's rights and
obligations pursuant to this Agreement with respect thereto.
Bonneville hereby further consents to the transfer, sale,
alienation, or assignment by Puget of the entire Agreement and of
all of Puget's rights and obligations under this Agreement to a
Scheduling Utility.
(c) Bonneville hereby consents to the assignment by Puget of this
Agreement or of any of Puget's rights under this Agreement as
security for any indebtedness, whether present or future, of Puget
pursuant to any mortgage, trust, security agreement or similar
instrument of indebtedness (each such instrument, a Debt
Instrument) made by and between Puget and any mortgagee, trustee,
secured party or holder of such instrument of indebtedness,
respectively; provided, however, that if Puget has defaulted in
the performance of its obligations under any Debt Instrument, such
that the mortgagee, trustee, secured party or holder of such Debt
Instrument, as the case may be, would be entitled at that time to
accelerate the amount of indebtedness under such Debt Instrument,
Puget shall give Bonneville prompt written notice in reasonable
detail of such default and shall, at Bonneville's election, enter
into good faith discussions with Bonneville regarding the cure of
such default.
(d) If Puget transfers, sells, alienates, or assigns, with
Bonneville's consent, all or any portion of this Agreement and any
rights and obligations pursuant to this Agreement to any person or
party, Puget shall give Bonneville written notice of such
transfer, sale, alienation,
29
or assignment within 10 days after the execution and delivery of
the agreement effectuating such transaction by all parties to such
transaction.
7. OPERATION, MAINTENANCE, AND MANAGEMENT
(a) Pursuant to the terms and conditions of the Northwest Intertie
Agreements, Bonneville is the operator of the PNW AC Intertie. As
such, Bonneville is responsible for the dispatch of the PNW AC
Intertie in accordance with Prudent Utility Practice.
Bonneville's duties as operator of the PNW AC Intertie shall
include, but are not limited to, consistent with Prudent Utility
Practice and Northwest Intertie Agreements: (1) determining the
PNW AC Intertie Operational Transfer Capability; (2) implementing
and assisting in rectifying emergency outages on the PNW AC
Intertie due to system emergencies or uncontrollable forces; (3)
implementing maintenance outages; and (4) giving and receiving
switching orders on the PNW AC Intertie. In making any
determination or in taking any other action referred to in the
immediately preceding sentence, Bonneville shall give fair
consideration to Puget's interests to the extent such interests
have been expressed to Bonneville in writing. Bonneville shall
operate, maintain, and manage Bonneville's PNW AC Intertie, and
study, plan, and implement Upgrades, consistent with Prudent
Utility Practice.
(b) Bonneville shall determine and revise as necessary the PNW AC
Intertie Rated Transfer Capability consistent with Prudent Utility
Practice and engineering studies based on then existing
reliability criteria developed by the North American Electric
Reliability Council, the Western Systems Coordinating Council, the
Northwest Power Pool, and Bonneville. In the event the PNW AC
Intertie Rated Transfer Capability is changed, Bonneville shall
promptly notify Puget in writing of such change and the new PNW AC
Intertie Rated Transfer Capability. If and to the extent that the
reliability criteria for determining the PNW AC Intertie Rated
Transfer Capability
30
change substantially, Bonneville shall notify Puget in writing of
such change.
(c) If at any time during the Term, Bonneville's PNW AC Intertie Rated
Transfer Capability becomes less than 3450 MW, or if at any time
during the Term there is an imminent likelihood that Bonneville's
PNW AC Intertie Rated Transfer Capability would become less than
3450 MW, then Bonneville shall reinforce the Federal Columbia
River Transmission System so as to raise Bonneville's PNW AC
Intertie Rated Transfer Capability to 3450 MW or otherwise to
prevent Bonneville's PNW AC Intertie Rated Transfer Capability
from becoming less than 3450 MW. Puget's Capacity Ownership Share
shall not be decreased on account of any failure by Bonneville to
reinforce the Federal Columbia River Transmission System pursuant
to this subsection 7(c).
(d) In the event that Bonneville implements a Reinforcement pursuant
to subsection 7(c), Bonneville shall equitably allocate the
Reinforcement Cost for such Reinforcement between Bonneville and
Puget based on factors including, but not limited to, load
responsibility, contractual obligation and generation integration
responsibility. Any equitable allocation or agreed to allocation
(pursuant to the immediately succeeding sentence) of a
Reinforcement Cost pursuant to this subsection 7(d) shall be
reflected as a Reinforcement Cost in an Operating Plan proposed by
Bonneville pursuant to section 13. To the extent that Bonneville
and Puget have agreed in writing to an allocation of a
Reinforcement Cost incurred by Bonneville pursuant to an agreement
or modification referred to in subsection 8(b), the Reinforcement
Cost so allocated shall not be subject to arbitration pursuant to
section 14 or section 15. Any Reinforcement Cost not allocated to
Puget pursuant to this subsection 7(d) shall not be payable by
Puget pursuant to this Agreement.
(e) Bonneville shall provide Puget notice of maintenance outages in
accordance with the accepted standards for notice on the PNW AC
Intertie. Such notice shall include an evaluation of the impact
on
31
Puget's Scheduling Share. In scheduling or planning maintenance
on PNW AC Intertie, Bonneville shall give fair consideration to
Puget's interests to the extent such interests have been expressed
to Bonneville in writing.
8. EXISTING AGREEMENTS
(a) Bonneville shall use good faith efforts to maintain in effect the
Interconnection Agreement or its successor.
(b) Bonneville shall use its best efforts to maintain Puget's rights
under this Agreement (i) by making no modification to the
Northwest Intertie Agreements, (ii) by not entering into any other
agreement with respect to the ownership, operation, maintenance,
or management of the PNW AC Intertie, and (iii) by making no
modification to the agreements referred to in the immediately
preceding clause (ii) that would have a substantial negative
impact on Puget's rights pursuant to sections 3, 4, 7, or to
subsection 9(b), 9(c), or 11(a) without Puget's prior written
consent. Without limiting, modifying, or otherwise affecting any
of its rights pursuant to sections 9, 13, 14, 15, and 16, Puget
hereby consents to Bonneville's modification of the Northwest
Intertie Agreements or Bonneville's entering into other agreements
or modification to such Agreements with respect to the ownership,
operation, maintenance, or management of the PNW AC Intertie to
the extent that such modification or such agreement is made or
entered into by Bonneville for the purpose of performing
Bonneville's obligations pursuant to subsection 7(c).
9. PAYMENT PROVISIONS
As full compensation for their respective payment obligations under
this Agreement, Puget shall make payments to Bonneville in accordance
with the provisions of this section 9, and Bonneville shall make
payments and refunds to Puget in accordance with the provisions of this
section 9.
32
(a) Lump Sum Payment
(1) As soon as practicable after the Effective Date, Bonneville
shall render a bill to Puget for the Initial Lump Sum Payment
(less the negotiation deposit, if any, with applicable
interest as described in section C of Exhibit D) and such
bill shall include as an attachment and as part of such bill
a completed section C of Exhibit D, setting forth the
calculation of such Initial Lump Sum Payment due Bonneville
in accordance with section IV.A of the CO-94 rate set forth
in Exhibit A. Puget shall make such payment pursuant to the
CO-94 rate and the applicable GTRSPs set forth in Exhibit A.
Each of Bonneville and Puget agrees that section C of Exhibit
D is consistent with the CO-94 rate set forth in Exhibit A on
the Effective Date.
(2) Calculation and Billing of the Adjusted Capacity Ownership
Price
(A) Approximately December 1995, or as soon as practicable
thereafter, Bonneville shall, in accordance with section
IV.B of the CO-94 rate set forth in Exhibit A, calculate
the Adjusted Capacity Ownership Price to reflect actual
construction costs of the facilities listed in section A
of Exhibit D and the actual AFUDC with respect to such
facilities. Such calculation shall be made in
accordance with column 2, section B of Exhibit D.
(B) Promptly after Bonneville has calculated the Adjusted
Capacity Ownership Price pursuant to subparagraph
9(a)(2)(A), Bonneville shall render a bill or refund
voucher to Puget, and such bill or refund voucher shall
include as an attachment and as part of such bill or
refund voucher section A of Exhibit D (with a completed
column 2), section B of Exhibit D (with a completed
column 2), and a completed section D of Exhibit D
reflecting the Adjusted Lump Sum Payment. If the
33
Adjusted Lump Sum Payment is greater than the Initial
Lump Sum Payment, Puget shall pay to Bonneville, within
45 days from the date of such bill or within such other
time period to which the Parties may mutually agree, the
amount set forth in such bill, which amount shall be
equal to the amount set forth on line 7, section D of
Exhibit D (such amount including interest as set forth
on line 6, section D of Exhibit D). If the Adjusted
Lump Sum Payment is less than the Initial Lump Sum
Payment, Bonneville shall pay to Puget, within 30 days
after the date of such refund voucher, the amount set
forth in such refund voucher, which amount shall be
equal to the amount set forth on line 7, section D, of
Exhibit D (such amount including interest as set forth
on line 6, section D, of Exhibit D). Each of Bonneville
and Puget agrees that sections A, B, and D of Exhibit D
are consistent with the CO-94 rate set forth in Exhibit
A on the Effective Date.
(3) Calculation and Billing of the Revised Adjusted Capacity
Ownership Price
(A) After payment is made by Puget pursuant to subparagraph
9(a)(2)(B), or a refund is made by Bonneville to Puget
pursuant to subparagraph 9(a)(2)(B), Bonneville may, in
accordance with the CO-94 rate set forth in Exhibit A,
make one or more adjustments to the Adjusted Capacity
Ownership Price; provided, that any such adjustment
shall be made by Bonneville within 30 days after the
date on which (i) Bonneville receives, pursuant to any
audit with respect to the Third AC Intertie Project by
Bonneville, Transmission Agency of Northern California,
PacifiCorp or any other entity performing work for
Bonneville on the Third AC Intertie Project, payment
from Transmission Agency of Northern California,
PacifiCorp, or any other entity performing work for
Bonneville on the Third AC Intertie Project, or
(ii) Bonneville pays, pursuant to any audit with respect
to the Third AC Intertie Project by Bonneville,
Transmission Agency of Northern California, PacifiCorp,
or any other entity performing work for Bonneville on
the Third AC Intertie Project, any amount to
Transmission Agency of Northern California,
34
PacifiCorp, or any other entity performing work for
Bonneville on the Third AC Intertie Project; and
provided, further, that no adjustment of the Adjusted
Capacity Ownership Price or of any Revised Adjusted
Capacity Ownership Price shall be made by Bonneville
after December 31, 2005.
(B) Promptly after Bonneville has calculated a Revised
Adjusted Capacity Ownership Price, Bonneville shall
render to Puget a bill or refund voucher with respect to
such Revised Adjusted Capacity Ownership Price and such
bill or refund voucher shall include as an attachment
and as part of such bill or refund voucher section A of
Exhibit D (with a completed column 2 and a completed
column with respect to each Revised Adjusted Capacity
Ownership Price), section B of Exhibit D (with a
completed column 2 and a completed column with respect
to each Revised Adjusted Capacity Ownership Price), and
a completed section E of Exhibit D reflecting the
current Revised Adjusted Capacity Ownership Price and
the current Revised Adjusted Lump Sum Payment. If the
current Revised Adjusted Lump Sum Payment with respect
to such Revised Adjusted Capacity Ownership Price is
greater than the Adjusted Lump Sum Payment or the
immediately preceding Revised Adjusted Lump Sum Payment,
as the case may be, then Puget shall pay to Bonneville,
within 45 days from the date of such bill or within such
other time period to
35
which the Parties may mutually agree, the amount set
forth in the bill referred to in this subparagraph
9(a)(3)(B), which amount shall be equal to the amount
set forth on line 7, section E, of Exhibit D with
respect to the current Revised Adjusted Lump Sum Payment
(such amount including interest as set forth on line 6,
section E, of Exhibit D). If the current Revised
Adjusted Lump Sum Payment is less than the Adjusted Lump
Sum Payment or the immediately preceding Revised
Adjusted Lump Sum Payment, as the case may be,
Bonneville shall pay to Puget, within 30 days after the
date of such refund voucher, the amount set forth in the
refund voucher referred to in this subparagraph
9(a)(3)(B), which amount shall be equal to the amount
set forth on line 7, section E of Exhibit D with respect
to the current Revised Adjusted Lump Sum Payment (such
amount including interest as set forth on line 6,
section E of Exhibit D). Each of Bonneville and Puget
agrees that section E of Exhibit D is consistent with
the CO-94 rate set forth in Exhibit A on the Effective
Date.
(4) For purposes of implementing the CO-94 rate, the following
shall apply:
(A) the calculations pursuant to paragraphs 9(a)(2) and
9(a)(3) shall be deemed to be the adjustment "to reflect
the difference between the actual and the estimated
Capacity Ownership Price" required under section IV.B of
the CO-94 rate;
(B) the calculations of interest pursuant to footnote 2 of
section D of Exhibit D and footnote 2 of section E of
Exhibit D shall be deemed to be the computation of
"interest using the weighted average interest rate on
Bonneville's outstanding bonds" required pursuant to
section IV.B of the CO-94 rate;
36
(C) the calculations of the Adjusted Capacity Ownership
Price and of the Revised Adjusted Capacity Ownership
Price pursuant to paragraphs 9(a)(2) and 9(a)(3) shall
be deemed to be the determination of the "actual
Capacity Ownership Price" required pursuant to section
IV.B of the CO-94 rate;
(D) as used in the CO-94 rate, the terms "Bonneville's PNW
AC Intertie," "PNW AC Intertie," "Third AC Intertie,"
"Third AC Intertie Project," and "Third AC Intertie
System Reinforcement" shall be deemed to have the
respective meanings of such terms set forth in section
1;
(E) as used in the CO-94 rate, the term "Capacity Ownership
Share" shall be deemed to mean "Capacity Ownership
Percentage" as defined in section 1;
(F) the indirect costs and overhead costs described in
footnote 5 of section B of Exhibit D shall be deemed to
be the indirect costs and overhead costs referred to in
section III.A of the CO-94 rate; and
(G) the last paragraph of section I.B of the General
Transmission Rate Schedule Provisions set forth in
Exhibit A shall be deemed to read in its entirety as
follows:
The meaning of terms used in the transmission rate
schedules shall be as defined in the Agreement or
in provisions which are attached to the Agreement
or, if not defined therein, such terms shall be as
defined in any of the above Acts.
37
(5) For purposes of application of the CO-94 rate set forth in
Exhibit A, no provision of the General Transmission Rate
Schedule Provisions set forth in Exhibit A, other than the
following provisions of the General Transmission Rate
Schedule Provisions set forth in Exhibit A (or their
successors in substance), shall have any application or
effect with respect to this Agreement:
(A) section I;
(B) section III.A;
(C) the last three sentences of section IV.A, without regard
to subsections 1, 2, 3, 4, 5, 6 and 7 of such section
IV.A;
(D) subsection 4 of section IV.A;
(E) the first paragraph and the first sentence of the second
paragraph of subsection 5 of section IV.A; and
(F) for purposes of subsection 16(e) of this Agreement and
as deemed necessary by Bonneville to correct
mathematical and computational errors on bills,
subsection 7 of section IV.A.
(b) Annual Charges
(1) Payments Pursuant to AC-93 Rate
(A) From and after the first Working Day after Bonneville
receives payment from Puget pursuant to paragraph
9(a)(1), Bonneville shall bill Puget on the monthly
power bill in accordance with the AC-93 rate set forth
in Exhibit A. Puget shall pay such bill in accordance
with the applicable GTRSPs set forth in Exhibit A.
38
(B) For purposes of application of the AC-93 rate, no
provision of the General Transmission Rate Schedule
Provisions set forth in Exhibit A, other than the
following provisions of the General Transmission Rate
Schedule Provisions set forth in Exhibit A (or their
successors in substance), shall have any application or
effect with respect to this Agreement:
(i) section I;
(ii) section III.A;
(iii) the last three sentences of section IV.A,
without regard to subsections 1, 2, 3, 4, 5, 6
and 7 of such section IV.A;
(iv) the first sentence of subsection 3 of section
IV.A;
(v) subsection 4 of section IV.A;
(vi) the first paragraph and the first sentence of
the second paragraph of subsection 5 of section
IV.A;
(vii) the first paragraph of subsection 6 of section
IV.A; and
(viii) as deemed necessary by Bonneville to correct
mathematical and computational errors on bills,
subsection 7 of section IV.A.
(C) The last paragraph of section I.B of the General
Transmission Rate Schedule Provisions set forth in
Exhibit A shall be deemed to read in its entirety as
follows:
39
The meaning of terms used in the transmission rate
schedules shall be as defined in the Agreement or
in provisions which are attached to the Agreement
or, if not defined therein, such terms shall be as
defined in any of the above Acts.
(D) Bonneville hereby agrees that the provisions of the AC-
93 rate shall have no application or effect with respect
to the following:
(i) any replacement of the series capacitor banks
containing polychlorinated biphenyl at the Sand
Springs, Sycan and Fort Rock Substations; and
(ii) any replacement commenced prior to the Effective
Date or not completed prior to September 30, 1995.
(E) Upon and after the effective date of the annual costs
rate set forth in Exhibit B, Bonneville shall cease
billing Puget pursuant to the AC-93 rate.
(2) Payments Pursuant to Annual Costs Rate
From and after the date the annual costs rate set forth in
Exhibit B becomes effective, the following shall apply:
(A) Operations Costs, Maintenance Costs, General Plant
Costs, Other Costs, Contracts and Rates Costs, Power
Scheduling Costs, and End of Term Costs
(i) During each fiscal year during the Term,
Bonneville shall bill Puget on the monthly power
bill, and Puget shall pay, pursuant to Exhibit B,
40
forecast Operations Costs, forecast Maintenance
Costs, General Plant Costs, forecast Other Costs,
forecast Contracts and Rates Costs, forecast Power
Scheduling Costs, and forecast End of Term Costs
for such fiscal year. Such costs shall be,
respectively, the forecast Operations Costs,
forecast Maintenance Costs, General Plant Costs,
forecast Other Costs, forecast Contracts and Rates
Costs, forecast Power Scheduling Costs, and
forecast End of Term Costs set forth in the
Operating Plan for the fiscal year in which such
month occurs.
(ii) Within eight months after the end of each fiscal
year during the Term (such fiscal year being
hereinafter referred to as a "Fiscal Year"),
Bonneville shall determine and calculate, pursuant
to Exhibit I, Schedules A, B, D, E, F, G, and H,
actual Operations Costs, actual Maintenance Costs,
General Plant Costs, actual Other Costs, actual
Contracts and Rates Costs, actual Power Scheduling
Costs, and actual End of Term Costs for the Fiscal
Year most recently ended.
(iii) If, based on the calculation performed pursuant
to section 9(b)(2)(A)(ii), the sum of the forecast
Operations Costs, forecast Maintenance Costs,
General Plant Costs, forecast Other Costs,
forecast Contracts and Rates Costs, forecast Power
Scheduling Costs, and forecast End of Term Costs
for the Fiscal Year is greater than the sum of the
actual Operations Costs, actual Maintenance Costs,
General Plant Costs, actual Other Costs, actual
Contracts and Rates Costs, actual Power Scheduling
Costs, and actual End
41
of Term Costs for the Fiscal Year, Bonneville
shall refund to Puget the difference between such
forecast costs and such actual costs as a lump sum
payment, with interest pursuant to section
9(b)(2)(A)(vi), within 30 days after the date on
which the calculation referred to in section
9(b)(2)(A)(ii) is made. Bonneville shall,
promptly following the date on which the
calculation of such difference is made, provide
Puget written notice of such refund. Within the
30-day period referred to in the first sentence of
this section 9(b)(2)(A)(iii), Bonneville shall
provide to Puget an Operating Plan amended in
accordance with subsection 13(k) containing
revised schedules in the format set forth in
Exhibit I, Schedules A, B, D, E, F, G, and H,
respectively, with a completed last column
reflecting the difference between actual and
forecast Operations Costs, actual and forecast
Maintenance Costs, General Plant Costs, actual and
forecast Other Costs, actual and forecast
Contracts and Rates Costs, actual and forecast
Power Scheduling Costs, and actual and forecast
End of Term Costs for the Fiscal Year.
(iv) If, based on the calculation performed pursuant
to subparagraph 9(b)(2)(A)(ii), the sum of the
actual Operations Costs, actual Maintenance Costs,
General Plant Costs, actual Other Costs, actual
Contracts and Rates Costs, actual Power Scheduling
Costs, and actual End of Term Costs for the Fiscal
Year is equal to or less than 105 percent, but
greater than 100 percent, of the sum of the
forecast Operations costs, forecast Maintenance
Costs, General Plant Costs, forecast Other Costs,
forecast Contracts and
42
Rates Costs, forecast Power Scheduling Costs, and
forecast End of Term Costs in the Operating Plan
for the Fiscal Year, Bonneville shall bill to
Puget on the monthly power bill the difference
between such actual costs and such forecast costs
as a lump sum charge, with interest pursuant to
section 9(b)(2)(A)(vi), within 30 days after the
date on which the calculation referred to in
section 9(b)(2)(A)(ii) is made. Puget shall pay
such bill in accordance with the Billing
Provisions. Within the 30-day period referred to
in the immediately preceding sentence, Bonneville
shall provide to Puget an amended Operating Plan
containing revised schedules in the format set
forth in Exhibit I, Schedules A, B, D, E, F, G,
and H, respectively, with a completed last column
reflecting the difference between actual and
forecast Operations Costs, actual and forecast
Maintenance Costs, General Plant Costs, actual and
forecast Other Costs, actual and forecast
Contracts and Rates Costs, actual and forecast
Power Scheduling Costs, and actual and forecast
End of Term Costs for the Fiscal Year.
(v) If, based on the calculation performed pursuant
to section 9(b)(2)(A)(ii), the sum of the actual
Operations Cost, actual Maintenance Cost, General
Plant Costs, actual Other Costs, actual Contracts
and Rates Costs, actual Power Scheduling Costs,
and actual End of Term Costs for the Fiscal Year
is greater than 105 percent of the sum of the
forecast Operations Cost, forecast Maintenance
Cost, General Plant Costs, forecast Other Costs,
forecast Contracts and Rates Costs, forecast Power
Scheduling Costs, and forecast
43
End of Term Costs for the Fiscal Year, Bonneville
shall bill to Puget on the monthly power bill the
difference between such actual costs and such
forecast costs as a lump sum charge, with interest
pursuant to section 9(b)(2)(A)(vi), within 30 days
after the date on which the calculation referred
to in section 9(b)(2)(A)(ii) is made. Puget shall
pay such bill in accordance with the Billing
Provisions; provided, however, that Bonneville
shall not bill Puget pursuant to this section
9(b)(2)(A)(v) any amount which exceeds 105 percent
of the sum of the forecast Operations Costs,
forecast Maintenance Costs, General Plant Costs,
forecast Other Costs, forecast Contracts and Rates
Costs, forecast Power Scheduling Costs, and
forecast End of Term Costs set forth in the
Operating Plan for the Fiscal Year unless and
until such amount which exceeds 100 percent of the
sum of the forecast Operations Costs, forecast
Maintenance Costs, General Plant Costs, forecast
Other Costs, forecast Contracts and Rates Costs,
forecast Power Scheduling Costs, and forecast End
of Term Costs set forth in the Operating Plan for
the Fiscal Year has been included in an Operating
Plan amended pursuant to subsection 13(k).
(vi) Simple interest shall be accrued on payments or
refunds due pursuant to this paragraph 9(b)(2)
with respect to any fiscal year during the Term
using the weighted average interest rate on
Bonneville's outstanding bonds or other debt
instruments then used by Bonneville and such
interest shall accrue from (and including) the
date of the last day of such fiscal year to (but
44
excluding) the date of refund to Puget or to (but
excluding) the due date of a payment due
Bonneville.
(B) Replacement Cost and Reinforcement Cost
Bonneville shall bill Puget on the monthly power bill
Replacement Costs for any Replacement and Reinforcement
Costs for any Reinforcement. Bonneville shall render
such bill within 15 months following the date on which
the project work order for such Replacement or such
Reinforcement, as the case may be, is closed. Puget
shall pay such bill pursuant to Exhibit B and sections
9(b)(2)(B)(i), 9(b)(2)(B)(ii), 9(b)(2)(B)(iii) and
9(b)(2)(B)(iv).
(i) If the forecast Replacement Cost for a
Replacement is greater than the actual Replacement
Cost for such Replacement or if the forecast
Reinforcement Cost for a Reinforcement is greater
than the actual Reinforcement Cost for such
Reinforcement, Bonneville shall bill Puget the
actual Replacement Cost for such Replacement or
the actual Reinforcement Cost for such
Reinforcement, as the case may be. Bonneville
shall provide to Puget an Operating Plan amended
in accordance with subsection 13(k) containing a
revised schedule in the format set forth in
Exhibit I, Schedule C, reflecting the actual and
forecast Replacement Cost for such Replacement or
the actual and forecast Reinforcement Cost for
such Reinforcement, as the case may be.
(ii) If, for each Replacement or Reinforcement, the
actual Replacement Cost or actual
45
Reinforcement Cost is equal to or less than 105
percent, but greater than 100 percent, of the
forecast Replacement Cost or forecast
Reinforcement Cost, Bonneville shall bill Puget
such actual Replacement Cost or such actual
Reinforcement Cost, as the case may be, on the
monthly power bill and Puget shall pay such bill
pursuant to subparagraph 9(b)(2)(B). Bonneville
shall provide to Puget an amended Operating Plan
containing a revised schedule in the format set
forth in Exhibit I, Schedule C, reflecting the
difference between the actual and forecast
Replacement Cost for such Replacement or the
actual and forecast Reinforcement Cost for such
Reinforcement.
(iii) If, for each Replacement or Reinforcement, the
actual Replacement Cost or actual Reinforcement
Cost is greater than 105 percent of the forecast
Replacement Cost or forecast Reinforcement Cost,
Bonneville shall bill Puget such actual
Replacement Cost or such actual Reinforcement
Cost, as the case may be, on the monthly power
bill and Puget shall pay such bill pursuant to
subparagraph 9(b)(2)(B); provided, however, that
Bonneville shall not bill Puget pursuant to this
subparagraph 9(b)(2)(B) any amount which exceeds
105 percent of the forecast Replacement Cost or
forecast Reinforcement Cost, as the case may be,
unless and until such amount which exceeds
100 percent of such forecast Replacement or such
forecast Reinforcement Cost, as the case may be,
has been included in an amended Operating Plan
pursuant to subsection 13(k).
46
(iv) Charges pursuant to sections 9(b)(2)(B)(i), (ii)
and (iii) for Replacement Costs and Reinforcement
Costs shall accrue simple interest pursuant to
section III.D of Exhibit I.
(c) Upgrade Charges
For purposes of implementing the CO-94 rate, the following shall
apply:
(1) as used in the CO-94 rate, the term "upgrade" shall be deemed
to mean "Upgrade" as defined in section 1, the term "rated
transfer capability" shall be deemed to mean "PNW AC Intertie
Rated Transfer Capability" as defined in section 1 and the
term "AFUDC" shall be deemed to have the meaning set forth
for such term in section 1;
(2) the "Capacity Ownership Share of the capital and related cost
of the upgrade," referred to in section III.B of the CO-94
rate shall be deemed to be the costs pursuant to subsection
5(d) and subparagraph 5(e)(3)(B), as applicable; and
(3) "construction costs (including direct, indirect and overhead
costs) and AFUDC" referred to in section III.B of the CO-94
rate and "related costs" referred to in section III.B of the
CO-94 rate together shall be deemed to be Upgrade costs and
shall be determined in the same manner in which Replacement
Costs are determined pursuant to section III of Exhibit I;
provided, however, that expenses that are properly allocable
to an Upgrade (i.e., "related costs" referred to in section
III.B of the CO-94 rate) in accordance with generally
accepted accounting principles (as defined in Exhibit I) may
be included by Bonneville in Upgrade costs for such Upgrade.
47
(d) Payments of Charges Pursuant to Section 3(b)(1)(C)(i)
Bonneville shall bill Puget for wheeling provided pursuant to
section 3(b)(1)(C)(i) on Puget's monthly power bill in accordance
with the IS-93 rate, section II.A, or its successor, set forth in
Exhibit A and Puget shall pay such bill in accordance with the IS-
93 rate, section II.A, or its successor, set forth in Exhibit A;
provided, however, that under any successor to the IS-93 rate,
Puget shall not be obligated to pay any rate or charge greater
than the rate or charge payable by any other party to which
Bonneville provides nonfirm wheeling services on Bonneville's PNW
AC Intertie for such party's nonfirm transaction of a duration
similar to Puget's wheeling transaction pursuant to section
3(b)(1)(C)(i).
(e) Suspension for Failure to Perform
(1) If at any time during the term of this Agreement Bonneville
does not receive payment due and owing to Bonneville pursuant
to paragraph 9(a)(2) or 9(a)(3) or to subsection 9(b) or
9(d), Bonneville shall be entitled to suspend performance of
its obligations to Puget pursuant to section 4 without
incurring any liability to Puget therefor; provided, that
Bonneville shall not be entitled to suspend performance
pursuant to this paragraph 9(e)(1) earlier than five Working
Days following receipt from Bonneville by Puget of written
notice of such suspension. Such suspension shall continue in
effect until the next Working Day following the Working Day
on which Puget makes payment in full to Bonneville of the
balance owed to Bonneville pursuant to paragraph 9(a)(2) or
9(a)(3) or to subsection 9(b) or 9(d). During the period of
such suspension, Puget shall not be entitled to participate
through the Committee in any review of an Operating Plan
commenced by the Committee pursuant to section 13 during such
period of suspension, or to participate in any arbitration
commenced by the Committee pursuant to sections 14 and 15
during such period of suspension, or to participate in any
audit commenced
48
by the Committee pursuant to section 16 during such period of
suspension.
(2) If during any period in any month Bonneville fails to make
deliveries in accordance with subsection 4(c), Puget shall be
entitled, without incurring any liability to Bonneville
therefor, to delay any payment due and owing to Bonneville by
Puget pursuant to subsection 9(b) or 9(d) for a period, equal
to the period during which Bonneville failed to make such
deliveries, commencing on the date the monthly power bill for
such month would otherwise be payable by Puget pursuant to
this Agreement; provided, however that Puget's entitlement
pursuant to this paragraph 9(e)(2) shall apply only with
respect to the amount of such monthly power bill to be paid
directly to Bonneville or its agent.
(f) Payments or Refunds by Bonneville
(1) Bonneville shall make any payment to Puget pursuant to
subparagraph 3(b)(1)(B) within 30 days following the end of
the month in which such payment becomes due to Puget pursuant
to subparagraph 3(b)(1)(B).
(2) Bonneville shall pay to Puget, in a lump sum, any refund due
to Puget pursuant to subsection 16(e) or paragraph 16(f)(2)
within 30 days following the date on which such refund
becomes due to Puget pursuant to subsection 16(e) or
paragraph 16(f)(2), respectively.
(3) Bonneville shall pay any refund, credit, or payment due to
Puget under section 18 pursuant to the terms and conditions
set forth in section 18.
(4) Each payment, credit or refund due to Puget by Bonneville
pursuant to this Agreement shall be made by Bonneville, at
Bonneville's option, (A) by check payable to the order of
Puget,
49
(B) by electronic funds transfer of immediately available funds
into such account as may be designated in writing by Puget
from time to time for such purpose or (C) by crediting the
amount of such payment, credit or refund on Puget's power
bill.
10. TRANSMISSION LOSSES
(a) To compensate Bonneville for transmission losses incurred by
Bonneville in making deliveries scheduled by Puget pursuant to
this Agreement, Puget shall make available, or arrange to have
made available, to Bonneville, at any point mutually acceptable to
the Parties at which the respective electric systems of Puget and
Bonneville are interconnected, on the corresponding hour 168 hours
later or on another hour to be agreed upon, the amounts of
electric power equal to Puget's net PNW AC Intertie schedule
multiplied by the appropriate loss factor specified in Exhibit E.
Puget's net PNW AC Intertie schedule shall be, for any given hour,
the absolute value of the sum of Puget's north-to-south schedules
(positive) and south-to-north schedules (negative) for such hour.
(b) Upon the conclusion of any review by Bonneville of the loss factor
in Exhibit E, Part A, pursuant to subsection 19(f), Bonneville
shall present the results of its review, including any revisions
to the loss factor in Exhibit E, Part A, to the Committee as part
of the Operating Plan provided to the Committee pursuant to
section 13. The Committee may make recommendations regarding such
results and any revisions to the loss factor in Exhibit E, Part A.
Only recommendations regarding assumptions (including, without
limitation, data inputs and source of date) made by Bonneville in
its review or revision of the loss factor in Exhibit E, Part A,
and recommendations regarding the results of such review or
revision shall be subject to arbitration pursuant to section 14.
(c) Puget's Scheduling Share shall not be reduced by any amount of
losses returned to Bonneville pursuant to subsection 10(a).
50
11. REMEDIAL ACTIONS
(a) Bonneville's Responsibilities
(1) Within five days after the Effective Date, Bonneville shall
notify Puget in writing of the plan for remedial actions
required to maintain the PNW AC Intertie Rated Transfer
Capability, which plan shall be consistent with Western
System Coordinating Council standards and Prudent Utility
Practice. If and to the extent that such plan is amended,
modified, or replaced, Bonneville shall, promptly following
such amendment, modification, or replacement, provide written
notice to Puget of such amendment, modification, or
replacement, as the case may be. Bonneville shall be
responsible for providing a capability to arm and having
available appropriate remedial actions, which may include
generator dropping, load tripping, or other acceptable
remedial actions, required to maintain the portion of
Bonneville's PNW AC Intertie Rated Transfer Capability not
purchased by Capacity Owners. Such remedial actions shall be
consistent with Western System Coordinating Council standards
and Prudent Utility Practice.
(2) Bonneville shall be responsible for generating appropriate
control signals for transmission to Puget for purposes of
effectuating remedial actions pursuant to this section.
(b) Puget's Responsibilities
(1) Puget shall be responsible for providing a capability to arm
and having available appropriate remedial actions, which may
include generator dropping, load tripping, or other remedial
actions required to maintain Puget's Capacity Ownership
Share. Such remedial actions shall be consistent with
Western System Coordinating Council standards, the plan
referred to in paragraph 11(a)(1) and Prudent Utility
Practice. Bonneville
51
may perform engineering analyses to confirm Puget's providing
capability to arm and having available appropriate remedial
actions pursuant to this paragraph 11(b)(1).
(2) In any given hour, Puget shall be responsible for providing
sufficient remedial actions, which may include generator
dropping, load tripping, or other acceptable remedial
actions, to maintain Puget's schedule on the PNW AC Intertie
for such hour. To the extent that load tripping or generator
dropping is required as a remedial action by Puget pursuant
to this paragraph 11(b)(2) in any given hour, the required
amount of such load tripping or such generator dropping shall
be determined by dividing the amount of power scheduled by
Puget on Puget's Scheduling Share in such hour by the total
amount of power scheduled on the PNW AC Intertie in such hour
and multiplying the result by the total amount of generation
or load (in MW) to be armed for the PNW AC Intertie in such
hour.
(3) Puget shall provide, design, operate, and maintain the
necessary equipment to accept control signals from Bonneville
and to transmit such signals to Puget's generator dropping,
load tripping, or other remedial action sites, and to arm and
initiate the appropriate control action(s). Such design,
operation, and maintenance shall be consistent with Western
System Coordinating Council standards, the plan referred to
in paragraph 11(a)(1), and Prudent Utility Practice.
(4) Puget and Bonneville may mutually agree that Bonneville will,
pursuant to terms and conditions mutually acceptable to the
Parties, provide the remedial actions required of Puget
pursuant to subsection 11(b).
52
12. CAPACITY OWNERS' COMMITTEE
(a) Composition of Committee
Puget may appoint one representative (and an alternate who may act
in the absence of such representative) as a member of the Capacity
Owners' Committee (Committee). If during any period Puget fails
to appoint a representative to the Committee, Puget waives any and
all rights during such period that would otherwise have accrued to
it, individually or as a member of the Committee, pursuant to
sections 12, 13, 14, 15, and 16 of this Agreement. Puget hereby
appoints as its representative pursuant to this subsection the
following representative and alternate to the Committee:
Representative: Vice President Power Planning
Alternate: Manager Power Contracts
(b) Convening Meetings
(1) Any Capacity Owner that has appointed a representative to the
Committee may convene a meeting of the Committee pursuant to
the procedures set forth in subsection 12(e). The Capacity
Owner convening a Committee meeting shall be responsible for
preparing any necessary notices, identifying the subject
matter and issues to be discussed, and transmitting notices
and relevant documents to the other Committee members and, if
appropriate, to Bonneville.
(2) At the written request of any Capacity Owner that has
appointed a representative to the Committee, Bonneville shall
attend Committee meetings.
(3) The Committee may conduct business only at a properly
convened meeting at which a quorum, as defined in subsection
12(c), is present. The Committee shall make or convey any
53
request, designation, recommendation, notice, appointment,
submission, audit report or exception, or statement to which
Bonneville is required to respond or which creates or
triggers an obligation of Bonneville, pursuant to this
Agreement, only upon a decision of the Committee made at a
properly convened meeting at which a quorum is present.
(4) Each fiscal year, Bonneville shall convene an annual meeting
of the Committee. The purpose of such annual meeting shall
be to discuss the Operating Plan delivered, pursuant to
subsection 13(b), to each Capacity Owner that has appointed a
representative to the Committee. Bonneville shall convene
such annual meeting no earlier than 15 days, but no later
than 30 days, following the date of such delivery of the
Operating Plan.
(5) In addition to the meeting referred to in paragraph 12(b)(4),
Bonneville may, at its discretion, convene meetings of the
Committee, pursuant to the procedures set forth in
subsection 12(e), to present to the Committee any information
Bonneville deems relevant.
(c) Meeting Quorum
The respective representatives of all of the Capacity Owners that
have appointed a representative to the Committee, less one, shall
constitute a quorum.
(d) Meetings by Telephone Conference
Committee meetings pursuant to the Capacity Ownership Agreements
may be conducted by telephone provided all Capacity Owners and, if
appropriate, Bonneville, are notified pursuant to the procedures
set forth in subsection 12(e) of any such meeting.
54
(e) Meeting Notices
(1) All Committee meeting notices pursuant to the Capacity
Ownership Agreements shall be provided in writing no less
than 14 days prior to such meeting.
(2) Any Committee meeting notice required by this section shall
be deemed properly made if delivered in person, by electronic
facsimile, or by mail or other qualified delivery service,
postage prepaid, to the person specified below:
If to Bonneville:
Group Vice President for Marketing, Conservation and
Production
Bonneville Power Administration
905 NE 11th Avenue
Portland, OR 97232
Telephone (503) 230-5152
Facsimile (503) 230-5207
If to Puget:
Vice President Power Planning
Puget Sound Power & Light Company
411 108th Avenue NE 15th Floor
Bellevue, WA 98004-5515
Telephone (206) 462-3137
Facsimile (206) 462-3175
If to Seattle:
Director, Power Management Division
Seattle City Light
1111 Third Avenue, Room 420
Seattle, WA 98101
Telephone (206) 386-4530
Facsimile (206) 386-4955
55
If to PNGC:
Director of Power Management
Pacific Northwest Generating Cooperative
711 NE Halsey Street, Suite 200
Portland, OR 97232
Telephone (503) 288-1234
Facsimile (503) 288-2334
If to Snohomish:
Manager of Power Supply
Public Utility District No. 1 of Snohomish
County, Washington
2320 California Street
P.O. Box 1107
Everett, WA 98201
Telephone (206) 258-8211
Facsimile (206) 258-8305
If to Tacoma:
Light Division Superintendent
Tacoma Public Utilities
3628 S. 35th Street
Tacoma, WA 98411
Telephone (206) 502-8294
Facsimile (206) 502-8628
Attendance at a meeting by a representative of a Capacity
Owner constitutes waiver by such Capacity Owner of notice of
such meeting.
(3) Either Party may, by written notice to the other Party and to
the Capacity Owners other than Puget, change the designation,
address, or facsimile number of the person so specified by it
in subsection 12(a) or paragraph 12(e)(2).
56
13. OPERATING PLAN AND AMENDMENTS TO THE OPERATING PLAN
(a) The provisions of this section shall become effective commencing
August 1, 1995; provided, however, that unless and until the
annual costs rate set forth in Exhibit B is approved by FERC on an
interim basis, Bonneville shall not have any right pursuant to
this Agreement to bill or charge to Puget, and Puget shall not
have any obligation pursuant to this Agreement to pay to
Bonneville, any amount pursuant to any Operating Plan.
(b) Delivery of Operating Plan
(1) On or before August 1, 1995, Bonneville shall deliver to each
Capacity Owner that has appointed a representative to the
Committee an Operating Plan for Bonneville's PNW AC Intertie
for fiscal year 1996 and an Operating Plan for Bonneville's
PNW AC Intertie for fiscal year 1997.
(2) Not later than one year preceding the first day of each
fiscal year, other than the fiscal years specified in
paragraph 13(b)(1), Bonneville shall deliver to each Capacity
Owner that has appointed a representative to the Committee an
Operating Plan for Bonneville's PNW AC Intertie for such
fiscal year.
(c) Each Operating Plan delivered pursuant to subsection 13(b) shall
contain the following information for Bonneville's PNW AC Intertie
with respect to forecast costs for the fiscal year to which such
Operating Plan pertains, and such Operating Plan may contain such
other information as Bonneville may deem relevant; and each
amendment of an Operating Plan delivered pursuant to subsection
13(k) shall contain the following information for Bonneville's PNW
AC Intertie with respect to forecast or actual costs, as
appropriate, for the fiscal year to which such Operating Plan
pertains, and such amendment may contain such other information as
Bonneville may deem relevant:
57
(1) a forecast of, or the actual, Allocated Direct Cost of
Operations Cost (pursuant to section I.C of Exhibit I),
Indirect Cost of Operations Cost (pursuant to section I.D of
Exhibit I), and Overhead Cost of Operations Cost (pursuant to
section I.E of Exhibit I) in the format set forth in Exhibit
I, Schedule A;
(2) a forecast of, or the actual, Direct Cost of Maintenance Cost
(pursuant to section II.B of Exhibit I), Indirect Cost of
Maintenance Cost (pursuant to section II.D of Exhibit I), and
Overhead Cost of Maintenance Cost (pursuant to section II.E
of Exhibit I) in the format set forth in Exhibit I, Schedule
B;
(3) a forecast of, or the actual, Direct Cost of Replacements and
Reinforcements (pursuant to section III.A of Exhibit I),
Indirect Cost and Overhead Cost of Replacements and
Reinforcements (pursuant to section III.B of Exhibit I), and
AFUDC of Replacements and Reinforcements (pursuant to section
III.C of Exhibit I) in the format set forth in Exhibit I,
Schedule C, for each Reinforcement and Replacement which is
expected to be, in the fiscal year to which the Operating
Plan pertains, a planned new start, construction work in
progress on a previously initiated Reinforcement or
Replacement, as the case may be, or a closed work order. The
forecast shall include for each such Reinforcement or
Replacement an estimate of the total cost of construction and
the cost to be incurred with respect to such Reinforcement or
Replacement during each fiscal year until the work order for
such Reinforcement or Replacement has been closed.
Bonneville may elect, but shall not be required, to include
in any such forecast the information set forth in the
immediately preceding sentence regarding any Replacement and
Reinforcement which is expected to be planned a new start in
any fiscal year following the fiscal year to which the
Operating Plan pertains. In the event Bonneville elects to
forecast Direct Cost, Indirect Cost, and Overhead Cost of any
Reinforcement or Replacement which is expected to be a
58
planned new start in any fiscal year subsequent to the fiscal
year to which the Operating Plan pertains, Bonneville shall
provide to the Committee such forecast costs, in the format
set forth in Exhibit I, Schedule C (together with additional
information pertinent to such forecast costs as required by
paragraph 13(c)(9)), 30 days prior to the date such Operating
Plan is delivered to the Committee pursuant to subsection
13(b). In addition, Bonneville shall include such forecast
costs in the Operating Plan delivered to the Committee
pursuant to subsection 13(b);
(4) the General Plant Cost (pursuant to section IV of Exhibit I)
in the format set forth in Exhibit I, Schedule D;
(5) a forecast of, or the actual, Other Costs (pursuant to
section V of Exhibit I) in the format set forth in Exhibit I,
Schedule E;
(6) a forecast of, or the actual, Contracts and Rates Costs
(pursuant to section VI of Exhibit I) in the format set forth
in Exhibit I, Schedule F;
(7) a forecast of, or the actual, Power Scheduling Costs
(pursuant to section VII of Exhibit I) in the format set
forth in Exhibit I, Schedule G;
(8) a forecast of, or the actual, End of Term Costs (pursuant to
section VIII of Exhibit I) in the format set forth in Exhibit
I, Schedule H. Such forecast shall include Bonneville's
proposed apportionment of such End of Term Costs among Puget
and Capacity Owners other than Puget and Bonneville's
rationale for such apportionment;
(9) additional information pertinent to the forecast costs,
actual costs, and General Plant Cost provided pursuant to
paragraphs 13(c)(1) through 13(c)(8), including, without
limitation, descriptions of the activities or projects and
explanations of the
59
costs comprising the Direct Cost components of such forecast
costs, actual costs, and General Plant Cost, and explanations
of MFU counts; and
(10) if Bonneville has reviewed the loss factor in Exhibit E, Part
A, pursuant to subsection 19(f), the Operating Plan shall
contain the results of such review, including any revision to
the loss factor in Exhibit E, Part A, pursuant to subsection
10(b), and any additional information pertinent to such
review.
(d) Requests by Committee
(1) No later than 15 days after the date on which the annual
meeting was convened pursuant to paragraph 12(b)(4), the
Committee may make a single request of Bonneville in writing
for:
(A) such supporting documentation, data, and information as
may be reasonably necessary to analyze (i) the Operating
Plan, or its constituent parts, delivered to the
Committee pursuant to subsection 13(b), or (ii) any
amendment to an Operating Plan pursuant to subsection
13(k); and
(B) such documentation, data, and information relating to
Bonneville's present or past activities or practices
concerning Bonneville's PNW AC Intertie and to
alternatives considered by Bonneville to costs or
activities described in the Operating Plan or any
amendment to an Operating Plan as may be reasonably
necessary for the Committee to formulate recommendations
pursuant to subsection 13(e);
provided, however, that with regard to requests for
documentation, data, and information pursuant to this
paragraph 13(d)(1), the Committee must designate in such
60
request the specific item in the Operating Plan or in any
amendment to an Operating Plan to which such requested
documentation, data, or information is directly related and
explain the need for such documentation, data, or
information. Such single request may contain multiple parts.
(2) The Committee shall use reasonable efforts to minimize and
limit the scope and number of parts of the request for
documentation, data, and information made pursuant to
paragraph 13(d)(1).
(3) Bonneville shall have 20 days from the date it receives any
request pursuant to paragraph 13(d)(1) to provide the
documentation, data, and information requested; provided,
however, that Bonneville shall be under no obligation (A) to
create additional documentation, data, or information, (B) to
provide documentation, data, or information that is not
readily available to it, (C) to provide to the Committee
documentation, data, or information that Bonneville has
previously provided to the Committee, or (D) to provide
documentation, data, or information that Bonneville would not
otherwise be required to provide or that would otherwise be
exempted from disclosure pursuant to the Freedom of
Information Act, 5 U.S.C. section 552 (including, without
limitation, the Freedom of Information Reform Act of 1986),
as amended or superseded, or any regulation and Executive
Order applicable to Bonneville.
(4) The Committee in such request shall designate one of its
members to be its representative for the sole purpose of
receiving such documentation, data, or information from
Bonneville pursuant to this subsection 13(d). Bonneville
shall deliver such documentation, data, or information to the
representative designated by the Committee to receive such
materials.
61
(5) For purposes of this subsection 13(d) and subsection 13(f),
each of Bonneville and the Committee shall cooperate and use
reasonable efforts to, in a timely manner, resolve disputes
regarding, and clarify requests for, documentation, data, and
information and responses to such requests.
(e) The Committee shall have 20 days from the date on which it
receives documentation, data, or information from Bonneville
pursuant to subsection 13(d) or, if none was requested, 50 days
from the date on which the annual meeting was convened pursuant to
paragraph 12(b)(4), whichever date is later, to recommend to
Bonneville in writing a revision or revisions to any forecast cost
or General Plant Cost in the Operating Plan. The Committee shall
have the time periods set forth in subsection 13(m) to recommend
to Bonneville in writing a revision or revisions to a forecast
cost or actual cost or General Plant Cost in any amendment to an
Operating Plan. Such recommendation shall set forth, at a
minimum, the exact revisions to the forecast cost or General Plant
Cost proposed by the Committee and the reasons for such revisions.
Failure of the Committee to recommend a revision or revisions to
all or any portion of a forecast cost or General Plant Cost in the
Operating Plan or a forecast cost or actual cost or General Plant
Cost in any amendment to an Operating Plan within the applicable
time limit set forth above shall be deemed to constitute
acceptance by the Committee of all portions of the forecast costs
and General Plant Cost of the Operating Plan for which the
Committee has not recommended a revision.
(f) No later than 15 days after receipt of a Committee recommendation
made pursuant to subsection 13(e), Bonneville may make a single
request (which may contain multiple parts) in writing of the
Committee for such supporting documentation, data, and information
as may be reasonably necessary to analyze the Committee's
recommendation, including without limitation, any estimated costs
or forecast costs contained in such recommendation; provided,
however, that the Capacity Owners that have appointed a
representative to the Committee shall be under no obligation (1)
to create additional
62
documentation, data, or information, (2) to provide documentation,
data, or information that is not readily available to the
Committee or to any Capacity Owner that has appointed a member to
the Committee, (3) to provide to Bonneville documentation, data,
or information that the Committee has previously provided to
Bonneville; provided, further, that with regard to requests for
documentation, data, and information pursuant to this subsection
13(f), (1) Bonneville must designate in such request the specific
item in the Committee's recommendation to which such requested
documentation, data, or information is directly related and
explain the need for such documentation, data, or information, and
(2) Bonneville shall use reasonable efforts, consistent with
Bonneville's needs as set forth in this subsection 13(f), to
minimize and limit the scope and number of parts of the request
for documentation, data, and information made pursuant to this
subsection. Such single request shall be made of the Committee by
delivering a copy of the request to each Capacity Owner that has
appointed a representative to the Committee. The Committee shall
have 20 days from the date of its receipt of Bonneville's request
to provide a single response containing the documentation, data,
and information requested.
(g) If the Committee makes any recommendation in writing pursuant to
subsection 13(e), Bonneville shall have the greater of 15 days
from the date of receipt of the requested documentation, data, and
information requested pursuant to subsection 13(f) or, if none was
requested, 30 days from the date of receipt of the Committee's
recommendations made pursuant to subsection 13(e) to, by written
notice to each Capacity Owner that has appointed a representative
to the Committee, accept the recommendation, accept the
recommendation in part, reject the recommendation, or propose an
action that is responsive to the Committee's recommendation and
that is different from Bonneville's proposal contained in the
Operating Plan. If Bonneville makes such a proposal, Bonneville
shall set forth in such written notice the exact revisions to the
Operating Plan. The Committee shall have 7 days from the date of
receipt of Bonneville's proposal to make any requests in writing
for supporting
63
documentation, data, and information as set forth in subsection
13(d). Bonneville shall have 7 days to respond to those requests
as set forth in subsection 13(d). Failure of Bonneville to
respond in writing to any recommendation of the Committee within
the applicable time period set forth in this subsection 13(g)
shall be deemed to constitute rejection of such recommendation.
(h) If Bonneville rejects all or any portion of the Committee's
recommendation, or if the Committee elects not to accept a
proposal made by Bonneville pursuant to subsection 13(g), then the
Committee may
(1) elect by written notice to Bonneville to refer to binding
arbitration, pursuant to section 14 and consistent with
subsections 13(i) and 14(b), that portion of such
recommendation of the Committee not accepted by Bonneville or
that portion of a recommendation of the Committee to which
Bonneville responded with a proposal pursuant to subsection
13(g); and
(2) elect by written notice to Bonneville to refer to nonbinding
arbitration pursuant to section 15 and consistent with
subsections 15(a) and 15(d), that portion of such
recommendation of the Committee not accepted by Bonneville or
that portion of a recommendation of the Committee to which
Bonneville responded with a proposal pursuant to subsection
13(g).
Failure of the Committee to elect to refer to arbitration
(A) such portion of any recommendation of the Committee not
accepted by Bonneville within 15 days following Bonneville's
rejection or acceptance in part of such recommendation of the
Committee pursuant to subsection 13(g), or
64
(B) any proposal made by Bonneville pursuant to subsection 13(g)
within 15 days following Bonneville's written notice of such
proposal or, if documentation, data, or information was
requested by the Committee pursuant to subsection 13(g),
within 15 days following receipt by the Committee of such
documentation, data, or information pursuant to subsection
13(g),
shall be deemed to constitute acceptance by the Committee of
Bonneville's rejection or acceptance in part of the recommendation
of the Committee or of Bonneville's proposal and waiver by the
Committee of any right pursuant to this section 13 or to section
15 to arbitrate such recommendation or portion thereof.
(i) The Committee may, subject to the immediately succeeding sentence,
arbitrate, pursuant to subsection 13(h), any recommendation by the
Committee concerning a revision pursuant to this Agreement to a
loss factor set forth in any Operating Plan or in any amendment to
an Operating Plan or concerning any forecast cost or actual
(allocated or otherwise) cost set forth in any Operating Plan or
in any amendment to an Operating Plan (including the following
costs and related items set forth in any Operating Plan, or in any
amendment to an Operating Plan, pursuant to Exhibit I, Schedule A,
lines 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13; Exhibit I,
Schedule B, lines 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14
and 15; Exhibit I, Schedule C, lines 1, 2, 3, 4 and 5; Exhibit I,
Schedule D, lines 3, 4, 5, 6, 7, 8, 9, 10 and 11; Exhibit I,
Schedule E, lines 2 and 3; Exhibit I, Schedule F, lines 1, 2, 3,
4, 5, 6, 7, 8, and 9; Exhibit I, Schedule G, lines 1, 2, 3, 4, 5,
6 7, 8, and 9; and Exhibit I, Schedule H, lines 1, 2, 3, and 4).
The Committee's right pursuant to this subsection 13(i) to
arbitrate any such recommendation shall be subject to the
following limitations:
(1) if such recommendation, or portion thereof, includes a
Replacement Cost for a Replacement or a Reinforcement Cost
for a Reinforcement, and such Replacement Cost or
Reinforcement Cost was included in a previous Operating Plan
65
(either of such costs, a Previous Operating Plan Cost), the
Committee may arbitrate pursuant to this subsection 13(i)
such recommendation, or portion thereof, only to the extent
that such recommendation, or portion thereof, includes any
Replacement Cost or Reinforcement Cost in excess of the
Previous Operating Plan Cost;
(2) the Committee may arbitrate pursuant to this subsection 13(i)
any such recommendation, or portion thereof, pertaining to a
revision to a loss factor pursuant to this Agreement only to
the extent such arbitration is permitted by subsection 10(b);
(3) the Committee may arbitrate pursuant to this subsection 13(i)
any recommendation, or portion thereof, concerning an Other
Cost only to the extent that such Other Cost is a cost set
forth in an Operating Plan or amendment to an Operating Plan
pursuant to Exhibit I, Schedule E, line 2 and such
recommendation, or portion thereof pertains to whether such
Other Cost is properly allocated to Bonneville's PNW AC
Intertie pursuant to Exhibit I, section V;
(4) if the sum of the actual Operations Costs, actual Maintenance
Costs, General Plant Costs, actual Other Costs, actual
Contracts and Rates Costs, actual Power Scheduling Costs, and
actual End of Term Costs in any Operating Plan exceeds 105
percent of the sum of the forecast Operations Costs, forecast
Maintenance Costs, General Plant Costs, forecast Other Costs,
forecast Contracts and Rates Costs, forecast Power Scheduling
Costs, and forecast End of Term Costs set forth in such
Operating Plan or in any amendment to an Operating Plan, the
Committee may arbitrate pursuant to this subsection 13(i) any
such recommendation, or portion thereof, concerning any
actual cost for any activity or project described in such
Operating Plan only to the extent that such actual cost
exceeds 105 percent of the forecast cost for such activity or
such project; provided, however, that, without limiting any
of Puget's rights
66
and benefits pursuant to subsection 16(c), the Committee may
not arbitrate pursuant to this subsection 13(i) any
recommendation, or portion thereof, concerning any actual
cost for any activity or project described in such Operating
Plan or in any amendment to an Operating Plan if such actual
cost is less than 105 percent of the forecast for such
activity or such project;
(5) the Committee may not arbitrate, pursuant to this subsection
13(i), (a) the allocation by Bonneville pursuant to this
Agreement of any of its costs to overall overhead costs or to
overall indirect costs, or (b) the allocation by Bonneville
pursuant to this Agreement of a portion of Bonneville's
overall overhead costs and overall indirect costs to its
total system operations costs, its total system maintenance
costs, its total capital costs or its total indirect and
overhead power scheduling costs; provided, however, that
nothing in this paragraph (5) shall be deemed to prevent or
restrict the Committee from arbitrating pursuant to this
subsection 13(i) the level (rather than the allocation) of
any of Bonneville's Exhibit I, Schedule A, line 9 total
system operations indirect costs and line 11 total system
operations overhead costs; Bonneville's Exhibit I, Schedule
B, line 11 total system maintenance indirect costs and line
13 total system maintenance overhead costs; Bonneville's
total capital costs; Bonneville's Exhibit I, Schedule F,
line 6 total indirect contracts and rates costs and
Bonneville's Exhibit I, Schedule F, line 7 total overhead
contracts and rates costs; or Bonneville's Exhibit I,
Schedule G, line 6 total indirect power scheduling costs and
Bonneville's Exhibit I, Schedule G, line 7 total overhead
power scheduling costs;
67
(6) the Committee may not arbitrate any recommendation, or any
portion thereof, regarding any amendment to an Operating Plan
made pursuant to sections 9(b)(2)(A)(iv) and 9(b)(2)(B)(ii),
or subsection 14(j), 16(e), or paragraph 16(f)(2);
(7) the Committee may not arbitrate any such recommendation, or
portion thereof, to the extent that in doing so the
arbitrators would be required to decide a matter of law in
order to render a decision pursuant to subsection 14(h). If,
subsequent to the Effective Date, Bonneville is given legal
authority to submit to binding arbitration matters of law,
Bonneville shall enter into good faith negotiations with
Puget and Capacity Owners other than Puget regarding a
revision to this paragraph 13(i)(7) enabling arbitration of
matters of law pursuant to this subsection 13(i) consistent
with such legal authority; and
(8) the Committee may not arbitrate any recommendation, or
portion thereof, regarding an allocation of a Reinforcement
Cost to the extent prohibited by subsection 7(d).
In arbitrating any recommendation, or portion thereof, pursuant to
this subsection 13(i), the Committee may raise in support of such
recommendation arguments regarding whether any forecast or actual
cost should be based upon activities different in degree, but not
in kind, from the activities upon which such forecast or actual
cost in the Operating Plan is based.
(j) Each Operating Plan provided pursuant to subsection 13(b) which
has completed the Committee review process set forth in
subsections 13(d) through 13(g) shall take effect on the first day
of the fiscal year to which such Operating Plan pertains and shall
remain in effect for the duration of such fiscal year.
(k) At any time during the fiscal year in which an Operating Plan is in
effect, or within 8 months after the end of such fiscal year,
Bonneville may amend such Operating Plan, pursuant to subsections
13(l) through 13(n), to reflect a different forecast or actual
Operations Cost, Maintenance Cost, General Plant Cost, Other Cost,
Contracts and Rates Cost, Power Scheduling Cost, or End of Term
Cost in such Operating Plan. At any time during the fiscal year
an Operating Plan
68
is in effect, or within 30 months after a work order for a
Replacement or Reinforcement is closed, Bonneville may amend such
Operating Plan, pursuant to subsections 13(l) through 13(n), to
reflect a different forecast cost or actual cost component for
such Replacement or Reinforcement.
(l) Any amendment made to any Operating Plan pursuant to subsection
13(k) shall be provided by delivery of a copy in writing of such
amendment by Bonneville to each Capacity Owner that has appointed
a representative to the Committee.
(m) Consideration of amendments to the Operating Plan pursuant to
subsection 13(l) shall be consistent with the procedures set forth
above in subsections 13(c) through 13(k), except that the time
limits set forth in such subsections shall be reduced as follows:
15 days shall be 7 days, 20 days shall be 10 days, 30 days shall
be 15 days, and 50 days shall be 25 days. For purposes of
computing the time limits in this subsection 13(m), the date
Bonneville provides the Capacity Owners with a proposed amendment,
pursuant to subsection 13(k), shall be deemed to be the date the
annual meeting was convened for purposes of paragraph 13(d)(1) and
subsection 13(e).
(n) Without limiting any of Puget's rights and benefits pursuant to
subsection 13(i) and sections 14 and 15, any Operating Plan
amended pursuant to section 9(b)(2)(A)(v) or 9(b)(2)(B)(iii), or
subsection 13(k) shall take effect when such amendment is accepted
by the Committee pursuant to subsection 13(e) or 13(h). Any
Operating Plan amended pursuant to section 9(b)(2)(A)(iii),
9(b)(2)(A)(iv), 9(b)(2)(B)(i), or 9(b)(2)(B)(ii), or subsection
14(j), 16(e), or paragraph 16(f)(2) shall take effect as soon as
such amendment is delivered by Bonneville to each Capacity Owner
that has appointed a representative to the Committee.
(o) An Operating Plan shall, during the fiscal year in which such
Operating Plan is in effect, establish the costs which Puget is
obligated to pay pursuant to the terms and conditions of this
69
Agreement. In no event shall such Operating Plan, or any portion
thereof, contain or constitute an obligation of Bonneville to
undertake, or to expend funds on, activities described or
indicated in such Operating Plan.
14. ARBITRATION
(a) During any arbitration process conducted pursuant to this section
14, Puget shall act through the Committee. Each of Bonneville and
Puget agrees to be bound by any decision rendered by the
arbitrators in any arbitration brought pursuant to
subsection 13(i) and this section 14.
(b) The Committee may initiate arbitration pursuant to subsection
13(i) by taking the following actions:
(1) an affirmative vote to initiate arbitration by at least the
respective representatives of all of the Capacity Owners that
have appointed representatives to the Committee, less one;
and
(2) either of the following:
(a) giving written notice to Bonneville of the Committee's
decision to initiate arbitration pursuant to subsection
13(i) within the applicable time period established in
subsection 13(h); or
(b) giving written notice to Bonneville of the Committee's
decision to initiate arbitration within 20 days after
the date on which Bonneville notifies in writing each
Capacity Owner that has appointed a representative to
the Committee of Bonneville's disagreement with any
exception pursuant to subsection 16(f).
The notice referred to in this subsection 14(b) shall set forth in
detail the matter or matters to be arbitrated and the name, street
address and telephone number of the arbitrator appointed by the
Committee.
70
(c) Bonneville shall, within 10 Working Days after receipt of the
notice by the Committee referred to in subsection 14(b), appoint a
second arbitrator and provide by written notice to each Capacity
Owner that has appointed a representative to the Committee the
name, street address and telephone number of the arbitrator
appointed by Bonneville. The two arbitrators appointed by the
Committee and by Bonneville, respectively, shall appoint a third
arbitrator within 15 days after the date of the appointment of an
arbitrator by Bonneville.
(1) If the arbitrators appointed by the Committee and by
Bonneville, respectively, fail to appoint a third arbitrator
within 15 days after the date of the appointment of an
arbitrator by Bonneville, then within 30 days after the date
of the appointment of an arbitrator by Bonneville, the
Committee may apply to the Chief Judge of the United States
District Court for the District of Oregon for appointment of
a third arbitrator.
(2) If Bonneville fails to appoint an arbitrator within 15 days
after receipt of the notice by the Committee referred to in
subsection 14(b), then within 30 days after the date of such
notice, the Committee may apply to the Chief Judge of the
United States District Court for the District of Oregon for
appointment of two arbitrators.
(3) If, pursuant to either paragraph 14(c)(1) or 14(c)(2), the
Committee applies to the Chief Judge of the United States
District Court for the District of Oregon for appointment of
one or more arbitrators, then the Committee shall give
Bonneville written notice of such application within 5 days
after the date of filing such application.
(d) The three arbitrators appointed pursuant to subsections 14(b) and
14(c) shall select by a majority vote an alternative pursuant to
subsection 14(g).
71
(e) Within 10 days after the appointment of a third arbitrator
pursuant to subsection 14(c), the arbitrators shall establish a
schedule for submission of written positions by Bonneville and
Puget, respectively. The arbitrators must establish a schedule
for such submissions pursuant to this subsection 14(e) that will
allow the arbitration to be concluded, and the decision of the
arbitrators rendered pursuant to subsection 14(g), within 120 days
following the date of the appointment of the third arbitrator. A
copy of any submission by the Committee to the arbitrators
pursuant to this section 14 shall be simultaneously served by the
Committee on Bonneville, and a copy of any submission by
Bonneville to the arbitrators pursuant to this section 14 shall be
simultaneously served by Bonneville on each Capacity Owner that
has appointed a representative to the Committee. The Committee
shall state, in a letter to the arbitrators, as its proposed
alternative to each Bonneville proposal in dispute, the
recommendation proposed by the Committee pursuant to subsection
13(g) and rejected in whole or in part by Bonneville pursuant to
subsection 13(g). Bonneville shall state its position and
proposed resolution of the dispute in a letter to the arbitrators.
If Bonneville made a proposal in response to such recommendation
of the Committee pursuant to subsection 13(g), then such position
and proposed resolution shall set forth such proposal, or if
Bonneville made no such proposal, then such position and proposed
resolution shall set forth the relevant portion of the Operating
Plan. If, however, the arbitration concerns an exception pursuant
to paragraph 16(f)(3), then the positions and proposed resolutions
of Bonneville and the Committee shall be as established pursuant
to such subsection. The Committee may then submit a response to
Bonneville's letter, and Bonneville may thereafter submit a reply
to the Committee's response. Bonneville and the Committee shall
have an equal number of days to prepare and serve their replies.
(f) No submission by either the Committee or Bonneville to the
arbitrators pursuant to subsection 14(e) shall be more than 50
pages in length (not including exhibits). If requested in writing
by either the
72
Committee or Bonneville, and for good cause shown, the arbitrators
may permit any submission by such Party to exceed 50 pages.
(g) The arbitrators shall select, as between the Committee's
recommendation pursuant to subsection 13(e), on the one hand, and
the portion of Bonneville's proposed Operating Plan to which the
Committee's recommendation pertains or Bonneville's proposal
pursuant to subsection 13(g) not accepted by the Committee, on the
other, the alternative which
(1) is consistent with the provisions of this Agreement and
(2) (A) in conformity with the generally accepted practices,
methods, and acts in the electrical utility industry in the
Western Systems Coordinating Council area prior thereto,
would better achieve the desired result consistent with
safety, reliability, and cost-benefit or (B) if there are no
such generally accepted practices, methods, and acts in the
electrical utility industry in the Western Systems
Coordinating Council area, would, in the exercise of
reasonable judgment in light of the facts known at the time
the decision is made, be reasonably expected to better
achieve the desired result consistent with safety,
reliability, and cost-benefit.
(h) In applying the standards set forth in subsection 14(g), the
arbitrators shall take into consideration, among other things (a)
that Bonneville and Puget each have responsibilities for service
to customers within and without the Pacific Northwest region in
accordance with applicable law, (b) that Bonneville and others
jointly own the PNW AC Intertie and Bonneville owes contractual
obligations to those parties regarding the PNW AC Intertie, (c)
that Bonneville must operate, as a practical matter, the PNW AC
Intertie in coordination with the operation of the interconnected
intertie facilities in California, and (d) that the PNW AC
Intertie is a major import-export facility important to the
service of loads in and out of the region.
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(i) In any arbitration pursuant to this section 14, the arbitrators
shall choose, pursuant to subsection 14(g), only between the
alternatives proposed by Bonneville and the Committee and shall
have no authority to resolve such arbitration other than by
selecting an alternative proposed by either Bonneville or the
Committee.
(j) Upon selection by the arbitrators of an alternative pursuant to
subsection 14(g), then Bonneville shall amend the Operating Plan
to cause it to conform to the decision of the arbitrators.
(k) If the arbitrators have not made a selection of an alternative
pursuant to subsection 14(i) before the date on which the
Operating Plan becomes effective pursuant to subsection 13(j),
then Puget shall make payments of annual charges pursuant to such
Operating Plan. If the arbitrators subsequently select the
Committee's alternative, then Bonneville shall, subsequent to
amending such Operating Plan pursuant to subsection 14(j), refund
to or bill Puget its pro rata share of the amount of the
incremental difference between the costs set forth in such
Operating Plan as amended pursuant to subsection 14(j) and 105
percent of the costs set forth in such Operating Plan, prior to
its amendment pursuant to subsection 14(j), to the extent that
such costs were incurred during the period from the first day of
effectiveness of such Operating Plan pursuant to subsection 13(j)
to the date of the arbitrators' decision, such refund to be made
pursuant to subsection 9(f) and such payment to be made pursuant
to subsection 9(b).
(l) Bonneville shall be responsible to pay a fraction of the costs for
the services and expenses of the arbitrators pursuant to this
section 14 equal to 1 (n + 1), where "n" equals the number of
Capacity Owners. The Committee shall be responsible to pay the
balance of the costs for the services and expenses of the
arbitrators. Each of Bonneville and the Committee shall pay its
own expenses related to the arbitration proceeding including,
without limitation, attorney fees, costs incurred in development
and preparation of documents, staff costs, and compensation for
consultants.
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(m) Any judgment rendered by a court of competent jurisdiction upon an
award made by the arbitrators pursuant to this section 14 may be
entered in any court having jurisdiction thereof.
15. NONBINDING ARBITRATION
(a) The Initiating Party (as defined in paragraph 15(e)(1)) may,
subject to the immediately succeeding sentence, elect by written
notice to Responding Party (as defined in paragraph 15(e)(1)) to
refer to nonbinding arbitration pursuant to the other provisions
of this section 15 the following: (i) if the Initiating Party is
the Committee, any recommendation by the Committee, or any portion
thereof, concerning any forecast cost or actual cost set forth in
any Operating Plan or in any amendment to an Operating Plan
pursuant to Exhibit I, Schedule A, lines 9 and 11; Exhibit I,
Schedule B, lines 11 and 13; Exhibit I, Schedule D, lines 1 and 2;
Exhibit I, Schedule F, lines 6 and 7; and Exhibit I, Schedule G,
lines 6 and 7 and (ii) any other issue, dispute, or controversy
regarding the Parties' respective rights and obligations pursuant
to this Agreement. The Initiating Party's right pursuant to this
subsection 15(a) to arbitrate any recommendation or any issue,
dispute or controversy shall be subject to the following
limitations:
(1) the Initiating Party may not arbitrate pursuant to this
subsection 15(a): (A) any recommendation with respect to an
Operating Plan or any amendment to an Operating Plan or
(B) any issue, dispute, or controversy, which recommendation,
issue, dispute or controversy may be arbitrated pursuant to
subsection 13(i) or 16(f);
(2) the Initiating Party may not arbitrate pursuant to this
subsection 15(a) any recommendation not permitted to be
arbitrated pursuant to paragraphs 13(i)(1), 13(i)(3),
13(i)(4), and 13(i)(8);
(3) the Initiating Party may not arbitrate pursuant to this
subsection 15(a) any recommendation, issue, dispute, or
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controversy concerning a loss factor or revision to a loss
factor set forth in Exhibit E, Part A or Part B pursuant to
this Agreement;
(4) the Committee may not (but the Puget or Bonneville may)
arbitrate pursuant to this subsection 15(a) any
recommendation, issue, dispute, or controversy concerning any
right or obligation of Puget pursuant to this Agreement that
is not a right or obligation, as the case may be, of each
other Capacity Owner under its respective Capacity Ownership
Agreement; or
(5) if the sum of the actual Operations Costs, actual Maintenance
Costs, General Plant Costs, actual Other Costs, actual
Contracts and Rates Costs, actual Power Scheduling Costs and
actual End of Term Costs in any Operating Plan exceeds 105
percent of the sum of the forecast Operating Costs, forecast
Maintenance Costs, General Plant Costs, forecast Other Costs,
forecast Contracts and Rates Costs, forecast Power Scheduling
Costs and forecast End of Term Costs set forth in such
Operating Plan, the Committee may arbitrate pursuant to this
subsection 15(a) any recommendation, or portion thereof,
concerning any actual cost for any activity or project set
forth in any Operating Plan or in any amendment to an
Operating Plan pursuant to Exhibit I, Schedule A, lines 9 and
11; Exhibit I, Schedule B, lines 11 and 13; Exhibit I,
Schedule D, lines 1 and 2; Exhibit I, Schedule F, lines 6 and
7; and Exhibit I, Schedule G, lines 6 and 7 only to the
extent that such actual cost exceeds 105 percent of the
forecast for such activity or such project; provided,
however, that, without limiting any of Puget's rights and
benefits pursuant to section 16(f), no Initiating Party may
arbitrate pursuant to this subsection 15(a) any
recommendation, or portion thereof, concerning any actual
cost for any activity or project set forth in any Operating
Plan or in any amendment to an Operating Plan pursuant to
Exhibit I, Schedule A, lines 9 and 11; Exhibit I, Schedule B,
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lines 11 and 13; Exhibit I, Schedule D, lines 1 and 2;
Exhibit I, Schedule F, lines 6 and 7; and Exhibit I, Schedule
G, lines 6 and 7 if such actual cost is less than 105 percent
of the forecast for such activity or such project; and
(6) the Initiating Party may not arbitrate pursuant to this
subsection 15(a) any issue, dispute, or controversy (A)
concerning matters of ratemaking (for purposes of this
subsection 15(a), the term "ratemaking" shall mean the
determination of matters appropriately determined pursuant to
section 7(i) of the Regional Act, including (i) Bonneville's
revenue requirements (including without limitation
Bonneville's depreciation and repayment standards and planned
net revenues for risk, but excluding program level issues
determined in the Federal budget process), (ii) Bonneville's
cost of service analysis (including functionalization,
segmentation, and allocation of costs contained in such
analysis, but excluding any allocation of costs contemplated
in Exhibit I), (iii) Bonneville's rate design, and (iv) any
related environmental analysis of proposed rates; (B)
concerning a final action of Bonneville, which final action
is not itself performance of any obligation of Bonneville or
Bonneville's Administrator under this Agreement; or (C)
concerning, or requiring the decision of, a matter not
arising under this Agreement or the other Capacity Ownership
Agreements.
(b) Except as otherwise provided in paragraph 15(a)(4), all
arbitrations pursuant to this section 15 shall be between
Bonneville and the Committee.
(c) A copy of any submission (including, without limitation, any
statement of position or any brief) by the Initiating Party or the
Responding Party to the arbitrators pursuant to this section 15
shall be simultaneously served by such party on the Responding
Party or Initiating Party, respectively. No submission by either
the Initiating
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Party or the Responding Party to the arbitrators shall be more
than 50 pages in length (not including exhibits). If requested in
writing by either the Initiating Party or the Responding Party,
and for good cause shown, the arbitrators may permit any
submission by such party to exceed 50 pages.
(d) With respect to any arbitration pursuant to this section 15 of any
forecast cost or actual cost set forth in any Operating Plan or in
any amendment to an Operating Plan pursuant to Exhibit I, Schedule
A, lines 9 and 11; Exhibit I, Schedule B, lines 11 and 13; Exhibit
I, Schedule D, lines 1 and 2; Exhibit I, Schedule F, lines 6 and
7; and Exhibit I, Schedule G, lines 6 and 7, the following shall
apply:
(1) Only the Committee may initiate arbitration with respect to
any forecast cost or actual cost set forth in any Operating
Plan or in any amendment to an Operating Plan pursuant to
Exhibit I, Schedule A, lines 9 and 11; Exhibit I, Schedule B,
lines 11 and 13; Exhibit I, Schedule D, lines 1 and 2;
Exhibit I, Schedule F, lines 6 and 7; and Exhibit I, Schedule
G, lines 6 and 7. The Committee may initiate nonbinding
arbitration pursuant to this section 15 by taking the
following actions:
(A) an affirmative vote to initiate arbitration pursuant to
this section 15 by the respective representatives of all
of the Capacity Owners that have appointed
representatives to the Committee, less one; and
(B) either of the following:
(i) giving written notice to Bonneville of the
Committee's decision to initiate arbitration
pursuant to this section 15 within the applicable
time period set forth in subsection 13(h); or
(ii) giving written notice to Bonneville of the
Committee's decision to initiate arbitration
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within 20 days after the date on which Bonneville
notifies in writing each Capacity Owner that has
appointed a representative to the Committee of
Bonneville's disagreement with any exception
pursuant to subsection 16(f).
The notice referred to in this subparagraph 15(d)(1)(B)
shall (x) indicate that such vote has been taken and (y)
set forth in detail the matters to be arbitrated and the
name, street address and telephone number of the
arbitrator appointed by the Committee.
(2) The respective rights and obligations of the Committee and of
Bonneville with respect to arbitration pursuant to this
subsection 15(d), unless otherwise provided in this
subsection 15(d), shall be as set forth in subsections 14(d)
through 14(l).
(e) With respect to any arbitration pursuant to this section 15 of any
issue, dispute, or controversy other than with respect to any
forecast cost or actual cost set forth in any Operating Plan or in
any amendment to an Operating Plan pursuant to Exhibit I, Schedule
A, lines 9 and 11; Exhibit I, Schedule B, lines 11 and 13; Exhibit
I, Schedule D, lines 1 and 2; Exhibit I, Schedule F, lines 6 and
7; and Exhibit I, Schedule G, lines 6 and 7, the following shall
apply:
(1) The party (which term, for purposes of this subsection 15(e),
shall refer to Bonneville, on the one hand, and to the
Committee or Puget, on the other) initiating arbitration
(Initiating Party) shall initiate arbitration pursuant to
this section 15 by serving written notice on the other party
(Responding Party) of its initiation of arbitration. If the
Committee is the party initiating arbitration, the Committee,
in addition to serving such notice, shall initiate such
arbitration by an affirmative vote to do so of at least the
respective representatives of all of the Capacity Owners that
have appointed representatives to the Committee, less one.
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The Committee shall indicate that such vote has been taken in
such notice to Bonneville. Any such notice by an Initiating
Party shall set forth in detail the following: (A) the
issue, dispute, or controversy to be arbitrated and the
Initiating Party's position regarding such issue, dispute, or
controversy; (B) the relief sought by the Initiating Party;
and (C) the name, street address, and telephone number of the
arbitrator appointed by the Initiating Party. The Responding
Party shall, within 15 days after receipt of the notice by
the Initiating Party referred to in this subsection 15(e),
appoint a second arbitrator and provide written notice to the
Initiating Party and to the arbitrator appointed by the
Initiating Party of the name, street address and telephone
number of the arbitrator appointed by the Responding Party.
The arbitrators appointed by the Initiating Party and by
Bonneville, respectively, shall appoint a third arbitrator
within 15 days after the date of the appointment of an
arbitrator by the Responding Party.
(A) If the arbitrators appointed by the Initiating Party and
by the Responding Party, respectively, fail to appoint a
third arbitrator within 15 days after the date of the
appointment of an arbitrator by the Responding Party,
then within 30 days after the date of the appointment of
an arbitrator by the Responding Party the Initiating
Party may apply to the Chief Judge of the United States
District Court for the District of Oregon for
appointment of a third arbitrator.
(B) If the Responding Party fails to appoint an arbitrator
within 15 days after receipt of the notice by the
Initiating Party referred to in paragraph 15(e)(1), then
within 30 days after the date of such notice the
Initiating Party may apply to the Chief Judge of the
United States District Court for the District of Oregon
for appointment of two arbitrators.
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(C) If, pursuant to either subparagraph 15(e)(1)(A) or
15(e)(1)(B), the Initiating Party applies to the Chief
Judge of the United States District Court for the
District of Oregon for appointment of one or more
arbitrators, then the Initiating Party shall give the
Responding Party written notice of such application
within one day after the date of filing such
application.
(2) The three arbitrators appointed pursuant to paragraph
15(e)(1) shall decide any issue, dispute, or controversy by
majority vote.
(3) Within 20 days after the appointment of a third arbitrator
pursuant to paragraph 15(e)(1) with respect to any
arbitration pursuant to this subsection 15(e), the
arbitrators shall establish a schedule for the completion of
such arbitration. The first day pursuant to such schedule
shall be hereafter referred to in this subsection 15(e) as
the "Arbitration Commencement Date."
(4) No later than 15 days after the Arbitration Commencement
Date, the Initiating Party may make a single request in
writing to the Responding Party for documentation, data, and
information relevant to or reasonably necessary to support
the Initiating Party's position communicated to the
Responding Party pursuant to paragraph 15(e)(1). Such single
request may contain multiple parts. The Initiating Party
shall use reasonable efforts to minimize and limit the scope
and number of parts of the request for documentation, data,
and information pursuant to this paragraph.
(5) The Responding Party shall have 20 days from the date it
receives the request from the Initiating Party pursuant to
paragraph 15(e)(4) to provide the documentation, data, and
information requested; provided, however, that the Responding
Party shall be under no obligation pursuant to this paragraph
15(e)(5)(A) to create additional documentation, data, or
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information, (B) to provide documentation, data, or
information that is not readily available to it, (C) to
provide to the Committee documentation, data, or information
that Bonneville has previously provided to the Initiating
Party or (D) if Bonneville is the Responding Party, to
provide documentation, data, or information that Bonneville
would not otherwise be required to provide or that would
otherwise be exempted from disclosure pursuant to the Freedom
of Information Act, 5 U.S.C. section 552 (including, without
limitation, the Freedom of Information Reform Act of 1986),
as amended or superseded, or pursuant to any regulation and
Executive Order applicable to Bonneville.
(6) No later than 15 days after the Arbitration Commencement
Date, the Responding Party may make a single request in
writing to the Initiating Party for documentation, data and
information relevant to Initiating Party's position
communicated to the Responding Party pursuant to subsection
15(e)(4). Such single request may contain multiple parts.
The Responding Party shall use reasonable efforts to minimize
and limit the scope and number of parts of the request for
documentation, data and information pursuant to this
paragraph.
(7) The Initiating Party shall have 20 days from the date it
receives the request from the Responding Party pursuant to
paragraph 15(e)(6) to provide the documentation, data and
information requested; provided, however, that the Initiating
Party shall be under no obligation pursuant to this paragraph
15(e)(7) (A) to create additional documentation, data, or
information, (B) to provide documentation, data or
information that is not readily available to it, (C) to
provide to the Responding Party documentation, data, or
information that the Initiating Party has previously provided
to the Responding Party or (D) if Bonneville is the
Initiating Party, to provide documentation, data, or
information that Bonneville would not
82
otherwise be required to provide or that would otherwise be
exempted from disclosure pursuant to the Freedom of
Information Act, 5 U.S.C. section 552 (including, without
limitation, the Freedom of Information Act of 1986), as
amended or superseded, or pursuant to any regulation and
Executive Order applicable to Bonneville.
(8) For purposes of this subsection 15(e), each of the Initiating
Party and the Responding Party shall cooperate and use
reasonable efforts to, in a timely manner, resolve disputes
regarding, and clarify requests by it for, documentation,
data, and information and responses to such requests.
(9) Within 65 days following the Arbitration Commencement Date,
each of the Initiating Party and the Responding Party may
state in reasonable detail its position regarding any issue,
dispute or controversy to be arbitrated pursuant to this
subsection 15(e) in a letter to the arbitrators and to the
other party to the arbitration of such issue, dispute, or
controversy Within 85 days following the Arbitration
Commencement Date, each of the Initiating Party and the
Responding Party may submit a letter to the arbitrators and
to the other party responding to the letter that the other
submitted to the arbitrators pursuant to the immediately
preceding sentence.
(10) The arbitrators shall resolve any issue, dispute, or
controversy pursuant to this subsection 15(e) by deciding
(taking into consideration, among other things, any letter
submitted by the Initiating Party or the Responding Party
with respect to such issue, dispute, or controversy) whether
the position of the Initiating Party or the position of the
Responding Party regarding the action taken or proposed to be
taken by the Responding Party conforms more closely with the
standard for such action set forth in this Agreement. The
arbitrators shall have no authority to fashion a resolution
of such arbitration other than pursuant to this paragraph
15(e)(10).
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(f) Any selection by the arbitrators of an alternative pursuant to
subsection 15(d) and any decision by the arbitrators pursuant to
subsection 15(e) shall be reported by the Initiating Party to the
Bonneville Administrator (Administrator) for review within 30 days
after such selection or decision is made. The Administrator shall
either accept or reject in writing such selection or decision. If
the Administrator fails to either accept or reject such selection
or decision, as the case may be, within 90 days after such
selection or decision is made, such selection or decision, as the
case may be, shall be deemed to be accepted by the Administrator.
(g) If the Administrator accepts any selection by the arbitrators of
an alternative pursuant to subsection 15(d) or any decision by the
arbitrators pursuant to subsection 15(e), such selection or
decision shall become binding upon Puget and Bonneville at the
time of its acceptance.
(h) The Administrator may reject any selection by the arbitrators of
an alternative pursuant to subsection 15(d) or any decision by the
arbitrators pursuant to subsection 15(e) only for one or more of
the following reasons:
(1) the arbitrators did not follow the arbitration procedures set
forth in this section 15;
(2) the arbitrators decided a matter that is not a matter arising
under this Agreement as set forth in paragraph 15(a)(6);
(3) the arbitrators did not completely apply the appropriate
standard for arbitration pursuant to this section 15;
(4) the arbitrators granted relief in contravention of this
Agreement; 84
(5) the arbitrators' decision is not supported by substantial,
competent evidence; or
(6) implementation of the arbitrators' decision would cause
Bonneville to violate a statutory obligation of Bonneville's
or would cause Bonneville to breach a contractual obligation
not in contravention of this Agreement.
(i) Bonneville shall be responsible to pay a fraction of the costs for
the services and expenses of the arbitrators pursuant to this
section 15 equal to 1 divided by (n + 1), where "n" equals the
number of Capacity Owners. The Committee shall be responsible to
pay the balance of the costs for the services and expenses of the
arbitrators. Each of Bonneville and the Committee shall pay for
its own expenses related to the arbitration proceeding, including,
without limitation, attorney fees, costs incurred in development
and preparation of documents, staff costs, and compensation for
consultants.
(j) If the Initiating Party elects to arbitrate any issue, dispute, or
controversy pursuant to this section 15, the Initiating Party must
initiate arbitration of such issue, dispute, or controversy within
one year following the occurrence of the event giving rise to such
issue, dispute, or controversy. Failure of the Initiating Party
to initiate arbitration of any such issue, dispute, or controversy
within such one-year period shall constitute a waiver of the
Initiating Party's right to arbitrate such issue, dispute, or
controversy pursuant to this section 15.
16. AUDIT RIGHTS
(a) The Committee shall have the right to perform an audit of
Bonneville's books, records, and documents used in or relating to
the determination of the Adjusted Capacity Ownership Price, or
used in or relating to any billing or refund with respect to the
Adjusted Capacity Ownership Price. Such audit shall be performed
within 24 months
85
after the date of Bonneville's bill or refund voucher rendered by
Bonneville pursuant to subparagraph 9(a)(2)(B).
(b) The Committee shall have the right to perform an audit of
Bonneville's books, records and documents used in or relating to
the determination of any Revised Adjusted Capacity Ownership
Price, or used in or relating to any billing or refund with
respect to any Revised Adjusted Capacity Ownership Price. Such
audit shall be performed within 24 months after the date of
Bonneville's bill or refund voucher rendered by Bonneville
pursuant to subparagraph 9(a)(3)(B).
(c) The Committee shall have the right to audit Bonneville's books,
records, and documents (i) used in or relating to the
determination of any charge (including, without limitation, any
MFU count made pursuant to section I.A of Exhibit I) billed to
Puget pursuant to paragraph 9(b)(2) and subsection 9(c), or
(ii) used in or relating to any billing or refund with respect to
any such charge. Such audit shall be performed within 36 months
after the date of Bonneville's bill or refund voucher for such
charge rendered by Bonneville to Puget pursuant to paragraph
9(b)(2) or subsection 9(c), as the case may be.
(d) Bonneville shall not be responsible to pay any of the expenses
incurred by any of the Capacity Owners in performing any audit
pursuant to this section 16. Bonneville shall not directly charge
Puget or any Capacity Owner other than Puget for Bonneville's
costs incurred by Bonneville with respect to any audit pursuant to
this section 16 unless Bonneville develops a general practice of
charging, through direct charges, each of its customers for such
costs incurred by Bonneville in connection with audits undertaken
pursuant to those customers' respective contracts with Bonneville.
(e) After completing any audit specified above, the Committee shall
promptly provide to Bonneville a written report of the results of
such audit. If such audit report includes any exception taken as
a result of such audit and Bonneville agrees with such exception,
Bonneville
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shall, within 30 days following Bonneville's receipt of such audit
report and consistent with such audit exception,
(1) if such exception is with respect to the Adjusted Lump Sum
Payment or to any Revised Adjusted Lump Sum Payment, render
to Puget a revised bill or refund voucher pursuant to
paragraph 9(a)(2)(B) or 9(a)(3)(B), respectively, with
respect to such Adjusted Lump Sum Payment or such Revised
Adjusted Lump Sum Payment, and
(2) if such exception is with respect to an Operating Plan, amend
the Operating Plan to which such exception pertains and
either (A) render to Puget a revised bill, consistent with
such Operating Plan, pursuant to the applicable GTRSPs set
forth in Exhibit A and to the Billing Provisions set forth in
Part B of Exhibit B or (B) cause to be refunded to Puget as a
lump sum payment, within 30 days after the date on which such
Operating Plan is so amended, an amount consistent with such
Operating Plan (multiplied by Puget's Capacity Ownership
Percentage).
The amount of any refund or bill payable pursuant to this
subsection 16(e) shall be paid with interest on such amount
calculated at a rate equal to the weighted average of Bonneville's
then-outstanding bonds or other debt instruments from (and
including) the date on which such audit report is received by
Bonneville to (but excluding) the date on which such amount is
refunded to Puget.
(f) If an audit report provided to Bonneville by Puget pursuant to
subsection 16(e) includes any exception taken as a result of such
audit and Bonneville does not agree with such exception, then the
following shall apply:
(1) Bonneville may, within 30 days following its receipt of such
audit report, propose to the Committee a resolution of any
87
inconsistency noted in any exception taken as a result of
such audit;
(2) If the Committee accepts such resolution proposed by
Bonneville, then Bonneville shall, within 30 days following
Bonneville's receipt of such audit report and consistent with
such resolution,
(A) if such exception is with respect to the Adjusted Lump
Sum Payment or to any Revised Adjusted Lump Sum Payment,
render to Puget a revised bill or refund voucher
pursuant to subparagraph 9(a)(2)(B) or 9(a)(3)(B),
respectively, with respect to such Adjusted Lump Sum
Payment or such Revised Adjusted Lump Sum Payment, and
(B) if such exception is with respect to an Operating Plan,
amend the Operating Plan to which such exception
pertains and shall either (i) render to Puget a revised
bill, consistent with such Operating Plan, pursuant to
the applicable GTRSPs set forth in Exhibit A and to the
Billing Provisions set forth in Part B of Exhibit B or
(ii) cause to be refunded to Puget as a lump sum
payment, within 30 days after the date on which such
Operating Plan is so amended, an amount consistent with
such Operating Plan (multiplied by Puget's Capacity
Ownership Percentage).
The amount of any refund or bill payable pursuant to this
paragraph 16(f)(2) shall be paid with interest on such amount
calculated at a rate equal to the weighted average of
Bonneville's then-outstanding bonds or other debt instruments
from (and including) the date on which such resolution is
accepted by the Committee to (but excluding) the date on
which such amount is refunded to Puget; and
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(3) If the Committee does not accept such resolution, if any,
proposed by Bonneville with respect to any such exception, or
if Bonneville does not propose any such resolution, then the
Committee
(A) shall have the right to arbitrate, pursuant to section
14, any cost with respect to which such exception is
taken to the extent that such cost is permitted to be
arbitrated pursuant to subsection 13(i); and
(B) shall have the right to arbitrate, pursuant to section
15, any cost with respect to which such exception is
taken to the extent that such cost is permitted to be
arbitrated pursuant to section 15.
The Committee must refer to arbitration pursuant to subparagraph
16(f)(3)(A) or 16(f)(3)(B) any cost to which exception is taken as
a result of any audit within eight months after the date the
Committee commences such audit. Failure of the Committee to elect
to so refer to arbitration any cost within such eight-month period
shall be deemed to constitute waiver by the Committee of any right
pursuant to this section 16 to arbitrate such cost.
(g) Puget shall have the right to participate in any audit pursuant to
this section 16 only by acting through the Committee. If Puget
chooses not to participate in any audit undertaken by the
Committee, then Puget shall accept the findings of the Committee
with respect to such audit and any resolution by the Committee and
Bonneville of any inconsistency noted in any exception taken as a
result of such audit.
(h) Any audits undertaken by the Committee shall be upon reasonable
notice to Bonneville and at reasonable times and shall commence no
more frequently than once in any 24 consecutive months. The audit
rights provided in this section shall not be construed to permit a
general audit of Bonneville's books, records, and documents.
Audits shall be in conformance with generally accepted auditing
standards.
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Prior to and for the duration of any audit, Bonneville shall
retain all pertinent books, records, and documents prepared in the
normal course of business. After commencement of an audit
pursuant to subsection 16(a), 16(b), or 16(c), the Committee may
request and Bonneville shall promptly provide reasonably available
supporting documentation for any cost or charge subject to audit.
If the Committee fails to commence an audit pursuant to subsection
16(a), 16(b), or 16(c) within the time periods set forth in
subsection 16(a), 16(b), or 16(c), such failure shall constitute
waiver by Puget of any right pursuant to this section 16 to
arbitrate any charge or refund billed or refunded by Bonneville.
(i) If Puget is operating pursuant to paragraph 3(b)(1), Bonneville
shall have the right, at its own expense, to review Puget's books,
records, and documents that directly pertain to the revenue
reportable in Puget's accounting system where revenues received
for wheeling for other entities would be booked for the purpose of
verifying compliance with paragraph 3(b)(1). Bonneville shall
have the right to perform such audit no more frequently than once
every 36 months.
17. PROTECTED AREAS
Puget shall not use its Scheduling Share for transmission of power on
the PNW AC Intertie from new hydroelectric projects which are
constructed in Columbia River Basin Protected Areas after designation
thereof by Bonneville unless Puget is required by regulatory authority
to purchase or provide transmission for the output of such project or
unless Bonneville receives sufficient demonstration that a particular
project would provide benefits to Bonneville's existing or planned fish
and wildlife investments or the Pacific Northwest Electric Power and
Conservation Planning Council's Fish and Wildlife Program. The Parties
agree that System Sales shall not be taken into consideration in any
determination of whether Puget has used its Scheduling Share for
transmission of power on the PNW AC Intertie from the hydroelectric
projects referred to in the immediately preceding sentence. For
purposes of this section 17, "System Sale" means any sale of power or
energy to Puget or by a seller of power or energy, which power or
energy is not
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resource-specific and is delivered to Puget at a point that connects
one or more resources or transmission systems.
18. ESTABLISHMENT AND MAINTENANCE OF RATES AND RELIEF FROM REGULATORY
ACTION
(a) Bonneville shall use good faith efforts to maintain in effect such
of the following rates that has been approved by FERC on an
interim or final basis, during the rate approval period
established by FERC for such rate:
(1) any rate containing the terms set forth in Exhibit B, Part A
and Part B, on the Effective Date;
(2) the Initial Successor Rate;
(3) the Alternative Successor Rate; and
(4) the Bonneville Successor Rate.
(b) If Bonneville's Administrator submits to FERC a rate that is
different from that set forth in Exhibit B, Part A and Part B, on
the Effective Date, as the first rate proposed by Bonneville
(Initial Successor Rate) to replace the AC-93 rate set forth in
Exhibit A or that is for a rate approval period which is less than
the remainder of the Term following the expiration of the AC-93
rate, Puget may, within 90 days after Bonneville submits the
Initial Successor Rate to FERC and without regard to FERC's
interim or final disposition of such rate, elect by written notice
to Bonneville to terminate this Agreement and shall in such notice
to Bonneville elect to exercise one of the two following options:
(1) Puget may elect to proceed pursuant to paragraphs 18(f)(1),
18(f)(2), and 18(f)(3); or
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(2) Puget may elect to have its Initial Lump Sum Payment,
Adjusted Lump Sum Payment, or any Revised Adjusted Lump Sum
Payment, whichever has been most recently paid by Puget to
Bonneville pursuant to subsection 9(a), refunded by
Bonneville subject to the following terms and conditions:
(A) This Agreement shall terminate upon the date Bonneville
receives Puget's notification to terminate this
Agreement pursuant to this subsection 18(b) except for
those rights and obligations set forth in this paragraph
18(b)(2).
(B) Bonneville shall refund within the next three succeeding
rate periods but, in any event, within 8 years after
Puget has made its election for such refund (such period
to begin no later than the 25th month after Bonneville's
receipt of Puget's notification to terminate this
Agreement and to end on the 96th month after
Bonneville's receipt of such notification) in equal
monthly amounts an amount equal to the "Refunded Lump
Sum Payment" calculated as follows:
A-((B/540)XA)+ I = Refunded Lump Sum Payment
where:
A = The Initial Lump Sum Payment, Adjusted Lump Sum
Payment, or any Revised Adjusted Lump Sum Payment,
whichever has been most recently paid by Puget to
Bonneville pursuant to subsection 9(a).
B = The number of months between the Effective Date
and the termination date of this Agreement
pursuant to this subsection 18(b).
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540 = 12 months X 45-year period over which Bonneville
will amortize the Initial Lump Sum Payment,
Adjusted Lump Sum Payment, or such Revised
Adjusted Lump Sum Payment, as the case may be.
I = Interest on A-((B/540)XA), accruing from (and
including) the date of Bonneville's receipt of
Puget's Initial Lump Sum Payment to (but
excluding) the date on which Bonneville receives
Puget' notification to terminate this Agreement
pursuant to this subsection 18(a), at the 5-year
Treasury note rate in effect on the date on which
Bonneville receives Puget's Initial Lump Sum
Payment.
(C) Bonneville shall, subject to the immediately succeeding
sentence, pay interest on the Refunded Lump Sum Payment
at a rate equal to Bonneville's weighted average
interest rate on Bonneville's then-outstanding bonds and
on Bonneville's then-outstanding debt instruments. Such
interest payable pursuant to this subparagraph
18(b)(2)(C) shall be paid by Bonneville on the amount of
each monthly amount of the Refunded Lump Sum Payment
payable by Bonneville pursuant to subparagraph
18(b)(2)(B).
(D) Bonneville shall refund the Refunded Lump Sum Payment
pursuant to paragraph 9(f)(4).
(E) At any time during the repayment period referenced in
subparagraph 18(b)(2)(B), Bonneville may accelerate
payment to Puget of the amount of the Refunded Lump Sum
Payment.
If Puget elects to proceed under this paragraph 18(b)(2),
Bonneville shall not develop a rate or charge that would
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inequitably allocate to Puget and Capacity Owners other than
Puget, or to any of them, the cost to Bonneville of the
Refunded Lump Sum Payment; provided, however, that such
allocation shall not be deemed to be inequitable solely
because it causes the recovery of a portion of the cost to
Bonneville of the Refunded Lump Sum Payment from Puget or any
Capacity Owner other than Puget.
(c) If FERC approves the Initial Successor Rate, the Alternative
Successor Rate (as defined in subsection 18(d)), or the Bonneville
Successor Rate (as defined in subsection 18(d)) for a term less
than the remainder of the Term following the expiration of the AC-
93 rate, and if Bonneville's Administrator thereafter submits to
FERC a rate (Replacement Rate) that is different from the Initial
Successor Rate, the Alternative Successor Rate or the Bonneville
Successor Rate (whichever had been approved by FERC on an interim
or final basis) or that is for a rate approval period which is
less than the remainder of the Term following the expiration of
the Initial Successor Rate, the Alternative Successor Rate or the
Bonneville Successor Rate (whichever had been approved by FERC on
an interim or final basis), Puget may, within 90 days after
Bonneville submits such rate to FERC and without regard to FERC's
interim or final disposition of such rate, elect by written notice
to Bonneville to terminate this Agreement and shall in such notice
to Bonneville elect to exercise one of the two following options:
(1) Puget may elect to proceed pursuant to paragraphs 18(f)(1),
18(f)(2), and 18(f)(3); or
(2) Puget may elect to have its Initial Lump Sum Payment,
Adjusted Lump Sum Payment, or any Revised Adjusted Lump Sum
Payment, whichever has been most recently paid by Puget to
Bonneville pursuant to subsection 9(a), refunded by
Bonneville subject to the following terms and conditions:
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(A) This Agreement shall terminate upon the date Bonneville
receives Puget's notification to terminate this
Agreement pursuant to this subsection 18(c) except for
those rights and obligations set forth in this paragraph
18(c)(2).
(B) Bonneville shall refund within the next three succeeding
rate periods but, in any event, within 8 years after
Puget has made its election for such refund (such period
to begin no later than the 25th month after Bonneville's
receipt of Puget's notification to terminate this
Agreement and to end on the 96th month after
Bonneville's receipt of such notification) in equal
monthly amounts an amount equal to the "Refunded Lump
Sum Payment" calculated as follows:
A-((B/540)XA)+ R = Refunded Lump Sum Payment
where:
A = The Initial Lump Sum Payment, Adjusted Lump Sum
Payment, or any Revised Adjusted Lump Sum Payment,
whichever has been most recently paid by Puget to
Bonneville pursuant to subsection 9(a).
B = The number of months between the Effective Date
and the termination date of this Agreement.
540 = 12 months X 45-year period over which Bonneville
will amortize the Initial Lump Sum Payment,
Adjusted Lump Sum Payment, or such Revised
Adjusted Lump Sum Payment, as the case may be.
R = 2.5 times the amount paid pursuant to
subparagraphs 9(b)(2)(A) and 9(b)(2)(B) for the
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immediately preceding fiscal year times the ratio
of (a) the amount forecast to be paid pursuant to
subparagraphs 9(b)(2)(A) and 9(b)(2)(B) for the
first fiscal year during the proposed rate
approval period pursuant to the rate submitted by
Bonneville to FERC to replace the immediately
preceding annual costs rate over (b) the amount
forecast to be paid pursuant to subparagraphs
9(b)(2)(A) and 9(b)(2)(B) for the same fiscal year
were the immediately preceding annual costs rate
to remain in effect; provided, however, that the
ratio of (a) over (b) shall in no event be less
than one for purposes of this subsection.
(C) Bonneville shall, subject to the immediately succeeding
sentence, pay interest on the Refunded Lump Sum Payment
at a rate equal to Bonneville's weighted average
interest rate on Bonneville's then-outstanding bonds and
on Bonneville's then-outstanding debt instruments. Such
interest payable pursuant to this subparagraph
18(c)(2)(C) shall be paid by Bonneville on the amount of
each monthly amount of the Refunded Lump Sum Payment
payable by Bonneville pursuant to subparagraph
18(c)(2)(B).
(D) Bonneville shall refund the Refunded Lump Sum Payment
pursuant to paragraph 9(f)(4).
(E) At any time during the repayment period referenced in
subparagraph 18(c)(2)(B), Bonneville may accelerate
payment to Puget of the amount of Refunded Lump Sum
Payment.
If Puget elects to proceed under this paragraph 18(c)(2),
Bonneville shall not develop a special rate or charge that
would inequitably allocate to Puget and Capacity Owners other
than
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Puget, or to any of them, the cost to Bonneville of the
Refunded Lump Sum Payment; provided, however, that such
allocation shall not be deemed to be inequitable solely
because it causes the recovery of a portion of the cost to
Bonneville of the Refunded Lump Sum Payment from Puget or any
Capacity Owner other than Puget.
The terms of this subsection 18(c) shall be effective through
December 31, 2040.
(d) If (i) FERC remands or approves a rate which materially differs
from the rate schedule and Billing Provisions set forth in Exhibit
B, Part A and Part B, on the Effective Date, or (ii) FERC grants
final approval to a rate containing the terms set forth in
Exhibit B, Part A and Part B, on the Effective Date, or to the
Initial Successor Rate for a rate approval period of less than the
remainder of the Term following the expiration of the AC-93 rate,
or (iii) FERC remands or disapproves the Initial Successor Rate,
then in any such event Bonneville, Puget, and Capacity Owners
other than Puget shall use good faith efforts to develop an
alternative successor rate (Alternative Successor Rate) which
would place Puget in substantially the same position with respect
to Puget's rights and obligations under this Agreement as if the
rate schedule and Billing Provisions set forth in Exhibit B, Part
A and Part B, on the Effective Date, had been approved by FERC for
the remainder of the Term following the expiration of the AC-93
rate. Bonneville, Puget, and Capacity Owners other than Puget
shall use good faith efforts to reach agreement on an Alternative
Successor Rate within 6 months after the date of the FERC order
regarding the Initial Successor Rate contemplated in this
subsection 18(d) or within the time period established in such
FERC order, whichever is earlier.
(1) If Bonneville, Puget, and Capacity Owners other than Puget
reach such an agreement regarding an Alternative Successor
Rate within the applicable time period referred to in the
immediately preceding sentence, then Bonneville shall,
subject
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to section 7(i) of the Regional Act, submit such Alternative
Successor Rate to FERC for approval and confirmation.
(2) If Bonneville, Puget, and Capacity Owners other than Puget do
not reach such an agreement regarding an Alternative
Successor Rate within the applicable time period referred to
in the immediately preceding sentence, Bonneville shall
develop a rate, which, among other things, in Bonneville's
judgment, protects the rights and obligations of Puget and
Capacity Owners other than Puget and, subject to section 7(i)
of the Regional Act, shall submit such rate (Bonneville
Successor Rate) to FERC for approval and confirmation.
Nothing in this subsection 18(d) shall limit or otherwise affect
any provisions of subsection 18(b) or 18(c).
(e) If Bonneville, Puget, and Capacity Owners other than Puget are
unable to agree upon an Alternative Successor Rate pursuant to
subsection 18(d), or if FERC approves the Alternative Successor
Rate for a period of less than 15 years or with terms and
conditions that differ from the terms and conditions of the
Alternative Successor Rate, or if FERC remands the Alternative
Successor Rate, or if FERC approves the Bonneville Successor Rate,
Puget may elect, within 6 months of any of the foregoing events,
to terminate this Agreement and execute a long-term contract with
Bonneville for firm wheeling on the PNW-PSW Intertie for a term
not less than the remaining term of the agreement(s) specified in
Exhibit J for wheeling of an amount of power on the PNW-PSW
Intertie up to Puget's Capacity Ownership Share, pursuant to
subsection 18(f).
(f) Should Puget elect to proceed pursuant to paragraph 18(b)(1) or
18(c)(1) or subsection 18(e), the Parties shall take the following
steps:
(1) Puget shall provide Bonneville with written notification of
its election to terminate this Agreement and with a written
request for a long-term contract for firm wheeling on the PNW-
PSW
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Intertie for a period not less than the remaining term of the
agreement(s) specified in Exhibit J for wheeling of an amount
of power on the PNW-PSW Intertie up to Puget's Capacity
Ownership Share.
(2) As soon as practicable after receipt by Bonneville of the
written notice sent pursuant to paragraph 18(f)(1),
Bonneville shall offer to Puget a long-term contract for firm
wheeling on the PNW-PSW Intertie of an amount of power equal
to the amount of power specified in Puget's written request
pursuant to paragraph 18(f)(1), such offered contract to
contain other terms and conditions substantially similar to
those then being offered by Bonneville to its other firm
wheeling customers for transactions on the PNW-PSW Intertie.
The termination date of this Agreement shall be the same date as
the effective date of the long-term contract for firm wheeling
referred to in this paragraph 18(f)(2), and such date shall in any
event be no more than 6 months after Bonneville's receipt of
Puget's notification pursuant to paragraph 18(f)(1).
(3) The long-term contract for firm wheeling offered to Puget
pursuant to paragraph 18(f)(2) shall also contain provisions
which:
(A) Require Bonneville to credit or pay (any such payment to
be made pursuant to paragraph 9(f)(4)), in equal monthly
amounts during the term of such long-term contract for
firm wheeling, against the amount payable by Puget to
Bonneville pursuant to such long-term wheeling agreement
an amount equal to the "Credited Lump Sum Payment"
calculated as follows:
A-((B/540)XA)= credited Lump Sum Payment
where:
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A = The Initial Lump Sum Payment, Adjusted Lump Sum
Payment, or any Revised Adjusted Lump Sum Payment,
whichever has been most recently paid by Puget to
Bonneville pursuant to subsection 9(a).
B = The number of months between the Effective Date
and the termination date of this Agreement
pursuant to this subsection 18(e).
540 = 12 months X 45-year period over which Bonneville
will amortize the Initial Lump Sum Payment,
Adjusted Lump Sum Payment, or such Revised
Adjusted Lump Sum Payment, as the case may be.
(B) Require Bonneville, subject to the immediately
succeeding sentence, to credit or pay interest on the
Credited Lump Sum Payment at a rate equal to
Bonneville's weighted average interest rate on
Bonneville's then-outstanding bonds and on Bonneville's
then-outstanding debt instruments. Such interest to be
credited or paid pursuant to this provision shall be
credited or paid by Bonneville on the amount of each
monthly amount of the Credited Lump Sum Payment to be
credited or paid by Bonneville pursuant to the provision
set forth in subparagraph 18(f)(3)(A).
(C) Permit Bonneville to accelerate payment to Puget of the
amount of Credited Lump Sum Payment which remains
uncredited at any time during the term of such long-term
contract for firm wheeling.
(g) Puget's right to terminate this Agreement pursuant to subsections
18(d) through 18(f) is a one-time only right that must be
exercised after FERC action pursuant to subsection 18(d). If
Puget fails to
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terminate the Agreement pursuant to subsection 18(e) as prescribed
therein as a result of FERC action, Puget shall have no future
rights to terminate the Agreement under this section 18 as a
result of FERC action.
(h) Bonneville shall use best efforts to establish and maintain in
effect the AC-93 rate, set forth in Exhibit A, during the
remainder of the Term, but only until the annual costs rate set
forth in Exhibit B, or other rate submitted to FERC, pursuant to
subsections 18(b) through 18(d), that is confirmed and approved by
FERC on an interim or final basis, becomes effective. If FERC
does not confirm and approve on a final basis the AC-93 rate for a
rate approval period of sufficient duration so that the AC-93 rate
is effective until the annual costs rate set forth in Exhibit B,
or such other rate, becomes effective, then upon expiration of the
rate approval period of such AC-93 rate, Bonneville shall submit
to FERC a rate based on the methodology used to determine the AC-
93 rate (revised AC-93 rate) and shall use best efforts to obtain
a rate approval period for the revised AC-93 rate of sufficient
duration so that the revised AC-93 rate is effective until the
annual costs rate set forth in Exhibit B, or other rate submitted
to FERC, pursuant to subsections 18(b) through 18(d), becomes
effective. If, at any time during the Term, FERC does not confirm
and approve on an interim or final basis the AC-93 rate or revised
AC-93 rate for any reason other than the duration of the rate
approval period, Bonneville and Puget shall use best efforts to
develop a rate that would replace the AC-93 rate or revised AC-93
rate, and Bonneville shall submit such rate to FERC, pursuant to
section 7(i) of the Regional Act, for confirmation and approval if
such rate is agreed to by Bonneville, Puget and Capacity Owners
other than Puget. If Bonneville and Puget do not succeed in
developing such rate, Bonneville shall submit to FERC, pursuant to
section 7(i) of the Regional Act, a rate which in Bonneville's
judgment recovers Bonneville's costs. Bonneville shall bill
Puget, and Puget shall pay Bonneville, in accordance with the AC-
93 rate or, if FERC does not confirm and approve on an interim or
final basis the AC-93 rate, the rate confirmed and approved by
FERC on an interim or final basis. Bonneville shall revise
Exhibit A so that it contains, at a given time, the AC-93 or other
rate confirmed and approved by FERC on an interim or final basis.
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19. EXHIBITS
(a) Exhibits A through J attached to this Agreement are by this
reference made a part of this Agreement. In the event of a
conflict between any provision in Exhibits A through J and the
provisions of sections 1 through 23 of this Agreement, the
provisions of sections 1 through 23 of this Agreement shall
prevail.
(b) Bonneville shall revise Exhibit A pursuant to subsections 18(g)
and 18(h) and this subsection 19(b). The rate schedules attached
hereto as Exhibit A have been conditionally or finally confirmed
by FERC. If the final rate schedules which are approved by FERC
are an amendment or modification of the initial rate schedules,
the applicable amended or modified rate schedules and associated
GTRSPs shall be attached to and made part of this Agreement
effective as of the date specified in FERC's approval. The rate
schedules and GTRSPs included in Exhibit A shall be replaced by
successor rate schedules and provisions in accordance with the
provisions of section 7(i) of the Regional Act and FERC rules.
(c) Upon interim or final approval by FERC of any rate submitted to
FERC pursuant to subsections 18(a) through 18(g), Bonneville shall
revise Exhibit B so that Exhibit B contains such rate approved by
FERC as contemplated in this subsection 19(c). For purposes of
this Agreement, such rate shall be effective as of the date of
effectiveness specified in FERC's approval of such rate. Subject
to the provisions of subsections 18(a) through 18(g), the rate
schedule set forth in Exhibit B, Part A and Part B, on the
Effective Date, shall be replaced by successor rate schedules and
provisions pursuant to section 7(i) of the Northwest Power Act and
applicable FERC rules.
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(d) Bonneville shall revise or modify Exhibit C from time to time to
reflect changes hereafter agreed to in writing by the Parties in
Puget's Capacity Ownership Share, Capacity Ownership Percentage,
Scheduling Percentage, and Scheduling Share.
(e) Bonneville shall revise Exhibit D pursuant to subsection 9(a).
Revision or modification of Exhibit D shall not require an
executed amendment or revision to this Agreement.
(f) Not more frequently than annually, Bonneville shall review and, as
appropriate, revise Exhibit E, Part A, in accordance with
Bonneville's standard methodology and formula for calculation of
average losses incurred by Bonneville in providing transmission on
Bonneville's PNW AC Intertie. Such methodology and formula are
intended to forecast average annual actual losses incurred by
Bonneville in providing transmission on Bonneville's PNW AC
Intertie Operational Transfer Capability. Any changes to the loss
methodology or formula, other than numerical values, shall be made
only after consultation with the Committee. During such
consultation, Bonneville shall provide to the Committee material
pertinent to such changes to the loss methodology or formula.
Upon conclusion of any review of the loss factor in Exhibit E,
Part A, Bonneville shall present the results of its review,
including any revisions to the loss factor in Exhibit E, Part A,
to the Committee as part of the Operating Plan pursuant to section
13. If the Committee pursues arbitration pursuant to subsection
10(b) and section 14, Bonneville shall revise Exhibit E, Part A,
to reflect the selection of the arbitrators pursuant to subsection
14(j).
(g) Bonneville shall revise the loss factor in Exhibit E, Part B, as
necessary to equal the same factor for average losses as
Bonneville generally applies to transmission over Bonneville's
share of the PNW-PSW Intertie. Revision of Exhibit E, Part B,
shall not require an executed amendment or revision to this
Agreement.
(h) Bonneville shall revise Exhibit F as appropriate to reflect the
facilities in Bonneville's PNW AC Intertie. Revision or
modification of
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Exhibit F shall not require an executed amendment or revision to
this Agreement.
(i) Bonneville shall revise Exhibit G as appropriate to reflect the
complete list of all of the Capacity Owners and their respective
Capacity Ownership Shares and Capacity Ownership Percentages from
time to time pursuant to this Agreement.
(j) Bonneville shall revise Exhibit H as appropriate to reflect all
provisions required by statute or Executive Order. Revision or
modification of Exhibit H shall not require an executed amendment
or revision to this Agreement.
(k) Bonneville shall revise Exhibit I to reflect changes as agreed to
in writing by Puget and Capacity Owners other than Puget.
(l) Bonneville shall revise Exhibit J as mutually agreed to in writing
by the Parties.
20. RULES OF LAW
(a) Bonneville and Puget agree that each fully participated in the
drafting of each provision of this Agreement. The rule of law
interpreting ambiguities against the drafting Party shall not be
applicable to or utilized in resolving any dispute over the
meaning or intent of this Agreement or any of its provisions.
(b) This Agreement shall not be construed to establish a partnership,
association, agency relationship, joint venture, or trust.
Neither Party shall be under the control of or shall be or
represent itself as, the agent of, or have a right or power to
bind, the other Party without the other's express written consent,
except as provided in this Agreement.
(c) All applicable law is incorporated in and made part of this
Agreement.
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21. NOTICES
(a) Unless the Agreement requires otherwise, any notice, demand or
request provided for in this Agreement, or served, given or made
in connection with it, shall be in writing and shall be served,
given, or made if delivered in person or sent by acknowledged
delivery, or sent by registered or certified mail, postage
prepaid, to the persons addressed as set forth below:
To Bonneville:
Group Vice President for Marketing, Conservation and Production
Bonneville Power Administration
905 NE 11th Avenue
Portland, OR 97232
To Puget:
Vice President Power Planning
Puget Sound Power & Light Company
411 108th Avenue NE 15th Floor
Bellevue, WA 98004-5515
To Seattle:
Director, Power Management Division
Seattle City Light
1111 Third Avenue, Room 420
Seattle, WA 98101
To PNGC:
Director of Power Management
Pacific Northwest Generating Cooperative
711 NE Halsey Street, Suite 200
Portland, OR 97232
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To Snohomish:
Manager of Power Supply
Public Utility District No. 1 of Snohomish
County, Washington
2320 California Street
P.O. Box 1107
Everett, WA 98201
To Tacoma:
Light Division Superintendent
Tacoma Public Utilities
3628 S. 35th Street
Tacoma, WA 98411
(b) Either Party may, by written notice to the other Party pursuant to
subsection 21(a), change the address set forth in subsection 21(a)
for the notifying Party.
(c) All notices pursuant to this Agreement shall be effective on the
date of receipt.
22. WAIVER
Any waiver at any time by a Party of its rights with respect to any
matter arising in connection with this Agreement shall not be deemed a
waiver with respect to any subsequent or other matter. Except as
otherwise provided herein or as agreed in writing by the Parties, no
provision in this Agreement may be waived except as documented or
confirmed in writing.
23. MISCELLANEOUS
(a) Effect of Section Headings
Section headings and subheadings appearing in this Agreement are
inserted for convenience only and shall not be construed as
interpretations of provisions of this Agreement.
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(b) Amendments
Except as may be expressly otherwise provided in this Agreement,
this Agreement may be amended only with the express written
consent of both of the Parties, and no provision of this Agreement
shall be varied or contradicted by any oral agreement, course of
dealing or performance or any other matter not hereafter set forth
in a written agreement signed by both of the Parties.
(c) Entire Agreement
This Agreement constitutes, on and as of the date hereof, the
entire agreement of the Parties with respect to the subject matter
of this Agreement, and all prior understandings or agreements,
whether written or oral, between the Parties with respect to the
subject matter of this Agreement are hereby superseded in their
entireties.
(d) No Third Party Beneficiaries
There are no third party beneficiaries of this Agreement. This
Agreement shall not be construed to create rights in, or to grant
remedies to, any third party as a beneficiary of this Agreement or
of any duty, obligation, or undertaking established herein.
(e) Regulatory Approvals
Each Party shall use its best efforts to obtain and maintain in
effect regulatory approvals that are necessary to permit such
Party to perform its obligations under this Agreement in
accordance with its terms and conditions. Neither Party shall
oppose in any way or seek to alter or amend the terms and
conditions of this Agreement by application to or participation in
any application of any regulatory authority or court having
jurisdiction. Puget shall not oppose in any way or seek to alter
or amend the terms or conditions of the annual costs rate set
forth in Exhibit B, the CO-94 rate, the AC-93 rate, or
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any rate described in section 18 that is agreed to by the Parties
subsequent to each entering into this Agreement, in any proceeding
pursuant to section 7 of the Pacific Northwest Electric Power
Planning and Conservation Act before FERC or in any court of
competent jurisdiction.
(f) Other Capacity Ownership Agreements
If Bonneville offers to enter into (i) a Capacity Ownership
Agreement with any other Capacity Owner or (ii) any written
amendment of any Capacity Ownership Agreement (other than this
Agreement), then Bonneville shall offer to Puget an amendment of
this Agreement that contains the terms and conditions of such
Capacity Ownership Agreement with such other Capacity Owner or of
such written amendment, as the case may be. Bonneville shall
advise, and use reasonable efforts to consult with, Puget during
the development or consideration of any offer to any Capacity
Owner other than Puget to enter into a Capacity Ownership
Agreement or any amendment of such agreement.
(g) Singular and Plural Forms
For purposes of interpreting and construing this Agreement, the
singular form of a word shall include its plural and the plural
form of a word shall include its singular, unless otherwise
expressly provided by this Agreement.
(h) Performance Pending Dispute
Except as otherwise expressly provided in this Agreement, pending
resolution of any dispute, issue, or controversy arising under
this Agreement, the Parties shall each continue performance of
their respective obligations pursuant to this Agreement.
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(i) Time Periods
For purposes of calculating any time period prescribed by this
Agreement, if the last day of the time period falls on a day that
is not a Working Day, then the last day of the time period shall
be the first Working Day following such day as would otherwise be
the last day of the time period.
(j) Double Counting
In developing rates or charges under section 7 of the Pacific
Northwest Electric Power Planning and Conservation Act for any
rate period, Bonneville shall not set rates or charges that
recover, more than once, the costs associated with capital
projects that are paid or forecast to be paid under the CO-94 rate
and the AC-93 rate and annual costs rate set forth in Exhibit B,
or the remaining Bonneville's PNW AC Intertie costs forecast to be
paid under the AC-93 rate and annual costs rate set forth in
Exhibit B. Bonneville's forecast of revenues chargeable under the
CO-94 rate, AC-93 rate, and annual costs rate set forth in Exhibit
B shall be based on the best available information, including
information provided pursuant to section 13 of this Agreement.
In the event Bonneville proposes any wheeling rate for
transmission service on Bonneville's main grid that includes costs
of the PNW AC Intertie, such proposed rate shall include a credit
or other mechanism that ensures that Puget is not charged any of
the PNW AC Intertie costs for deliveries of power that utilize up
to the Puget's Capacity Ownership Share, as that term is defined
in this Agreement.
(k) Committee Action
Each of the Parties agrees that to the extent it is provided in
sections 13, 14, and 16 that the Committee shall take any action
or shall make any decision, such action or decision shall be taken
or made, as the case may be, by the Committee, and not by Puget
acting individually.
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(l) Fiscal Year
For purposes of this Agreement, the term "fiscal year" shall mean
Bonneville's fiscal year.
(m) Rights and Remedies Cumulative
All rights and remedies of either Party under this Agreement and
at law and in equity shall be cumulative and not mutually
exclusive and the exercise of one right or remedy shall not be
deemed a waiver of any other right or remedy. Nothing contained
in any provision of this Agreement shall be construed to limit or
exclude any right or remedy of either Party (arising on account of
the breach or default by the other Party or otherwise) now or
hereafter existing under any other provision of this Agreement, at
law or in equity.
110
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement.
UNITED STATES OF AMERICA
Department of Energy
Bonneville Power Administration
By Walter E. Pollock
-------------------------
Group Vice President for
Marketing, Conservation and
Production
Name Walter E. Pollock
-------------------
(Print/Type)
Date October 11, 1994
------------------
Puget Sound Power & Light Company
By J. R. Lauckhart
-------------------
Name J. R. Lauckhart
-----------------
(Print/Type)
Title V. P. Power Planning
----------------------
Date 9/26/94
---------
Effective Date _________________
Exhibit A, Page 1 of 14
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
Schedule CO-94
CAPACITY OWNERSHIP RATE SCHEDULE
SECTION I. AVAILABILITY
This schedule applies to all agreements which provide life-of-facilities
capacity rights to non-Federal participants (Capacity Owners) in 725 MW
of Bonneville's PNW AC Intertie and any upgrades thereto. Service under
this schedule is subject to Bonneville's General Transmission Rate
Schedule Provisions.
SECTION II. RATE
The charge for capital and related costs for non-Federal capacity
ownership in Bonneville PNW AC Intertie shall be determined by the
methodologies set out in Section III below.
SECTION III. DETERMINATION OF RATE
A. Capacity Ownership Price
The charge for capacity ownership in Bonneville's PNW AC Intertie shall
be the Capacity Ownership Share of the actual capital and related costs
of facilities as determined by the formula shown below. The Capacity
Ownership Share shall be determined pursuant to the Capacity Ownership
agreement.
(A-B)+C+D
--------- = Capacity Ownership Price in $/kW
E
Capacity Ownership Price in $/kW x number of kW contracted for by
Capacity Owner = Capacity Owner's payment to Bonneville.
Where:
A = Bonneville's cost of new facilities for the Third AC
Intertie, which increased the rated transfer capability
of the PNW AC Intertie by approximately 1600 MW, is the
construction costs (including direct, indirect and
overhead costs) of the facilities associated with the
Third AC Intertie System Reinforcements and the Alvey-
Meridian Transmission Line (also known as Eugene-Medford
500 kV Transmission Line), referred to jointly as the
Third AC Intertie Project.
Exhibit A, Page 2 of 14
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
B = Bonneville's cost of new facilities needed for the first
800 MW increment of the 1600 MW Third AC Intertie
Project, which includes a portion of the construction
costs (including direct, indirect and overhead costs)
associated with the Third AC Intertie System
Reinforcement.
A-B = The cost of new facilities for the second 800 MW
increment of the 1600 MW Third AC Intertie Project
(presented in Exhibit C of the Capacity Ownership
agreement).
C = Allowance for Funds Used During Construction (AFUDC)
constitutes interest on the funds used for the Third AC
Intertie Project while it was under construction. AFUDC
is calculated and capitalized consistent with FERC
requirements as described in FERC's Uniform System of
Accounts, 18 CFR, Part 101, Electric Plant Instructions,
3.A(17). The AFUDC applies to that amount capitalized on
the second 800 MNW increment of the 1600 MW Third AC
Intertie Project, or A-B.
D = Book value of existing Bonneville support facilities that
are dedicated to the PNW AC Intertie equal to
$19,100,000.
E = 725,000 kW, which equals Bonneville's share of the second
800 MW of the Third AC Intertie.
B. PNW AC Intertie Upgrade Price
The charge for upgrades to Bonneville's PNW AC Intertie facilities that
occur after December 1993, and which result in an increase of rated
transfer capability, shall be the Capacity Ownership Share of the capital
and related costs of the upgrade. The Capacity ownership Share of any
upgrades shall be determined pursuant to the Capacity Ownership
agreement. The capital costs shall consist of the construction costs
(including direct, indirect and overhead costs) and AFUDC (as described
in Section III.A. Above) of the facilities associated with such upgrades.
Exhibit A, Page 3 of 14
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
SECTION IV. ADJUSTMENTS AND SPECIAL PROVISIONS
A. Initial Lump Sum Payment
Capacity Owners shall make an initial, lump sum payment of an estimate of
the Capacity Ownership Price equal to $215/kW pursuant to the Capacity
Ownership agreement.
B. Adjustment to Reflect Actual Construction Costs
Approximately December 1995 or as soon as practicable thereafter, the
Capacity owner's initial lump sum payment shall be adjusted to reflect
the difference between the actual and the estimated Capacity ownership
Price. The actual Capacity Ownership Price shall be determined pursuant
to Section III.A. above. There will be no adjustment for the book value
of the support facilities dedicated to the PNW AC Intertie. Capacity
Owners will either receive a refund, with interest, from Bonneville or
make an additional payment, with interest, to Bonneville. Bonneville
shall compute interest using the weighted average interest rate on
Bonneville's outstanding bonds.
C. PNW AC Intertie Upgrade Payments
Capacity Owners shall pay a share of the upgrades to Bonneville's PNW AC
Intertie in the manner and time to be determined when participation in
such upgrades are agreed to pursuant to the Capacity Ownership agreement.
Exhibit A, Page 4 of 14
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
Schedule AC-93
Southern Intertie Annual Cost
SECTION I. AVAILABILITY
This schedule is applicable to all parties (New Owners) that execute PNW AC
Intertie Capacity Ownership Agreements (Agreements) and will be effective on
the date described in the Agreement. Service under this schedule is subject
to BPA's General Transmission Rate Schedule Provisions.
SECTION II. RATE
The rate charges reflect the terms of the Memorandum of Understanding (MOU),
signed in the fall of 1991, between BPA and potential New owners. The MOU
provides for the payment by New Owners of their prorated share of: (1) BPA's
annual operations, maintenance and general plant expense (including
applicable (overheads) properly chargeable to the AC Intertie facilities; and
(2) BPA's share of capitalized replacements on the AC Intertie. The monthly
charge shall be the sum of the charges specified in sections II.A. and II.B.
A. Operations, Maintenance, and General Plant
The monthly charge shall equal $325 per megawatt of billing demand.
B. Replacements
The monthly charge shall equal $0 per megawatt of billing demand.
SECTION III. ADJUSTMENT TO REPLACEMENT RATE
A. Determination of Billing Adjustment
New Owners will receive a billing adjustment if BPA incurs AC Intertie
replacement cost during the rate period. The Replacements Rate
Adjustment equals
AC Intertie work orders ($000) * %
----------------------------------
725 MW * # months
where
"# months" equals: (1) the number of months that this
rate is in effect during the fiscal year for the Initial
Replacements Rate Adjustment; or (2) the number of
months in the rate period for the Final Replacements
Rate Adjustment; and
"%" equals the New Owners' percentage share of BPA's
total AC Intertie Rated Transfer Capability as specified
in the Agreements.
Exhibit A, Page 5 of 14
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
B. Initial Replacements Rate Adjustment
New Owners will receive a billing adjustment for each fiscal year that
BPA incurs AC Intertie replacement cost. At the end of each fiscal year,
the cost associated with AC Intertie capital replacement work orders that
have closed during the fiscal year will be determined. The unit rate
that would result using these closed work orders is the basis of the
Initial Replacements Rate Adjustment.
1. Notice Provisions
Following each fiscal year, BPA shall notify all New Owners by
December 15, of the proposed Replacements Rate Adjustment. BPA will
provide the calculation of the adjustment and a short description of
the work performed and the associated cost used as the basis for the
billing adjustment. In addition to written notification, BPA may,
but is not obligated to, hold a public meeting to clarify its
determinations.
Written comments on the Initial Replacements Rate Adjustment will be
accepted through the end of January. Consideration of comments
submitted by the New Owners may result in the billing adjustment
differing from the initially proposed adjustment. BPA shall notify
all New Owners of the Initial Replacements Rate Adjustment by the
last day of February.
2. Adjustment of Monthly Bills
An adjustment will be made on the New Owner's monthly bill prepared
during March. The Initial Replacements Rate adjustment will be
multiplied by the sum of the monthly billing factors from the
relevant fiscal year (i.e., the New Owner's share in megawatts of
BPA's PNW AC Intertie Rated Transfer Capability multiplied by the
numbers of months that this rate schedule is effective during the
fiscal year). The Initial Replacements Rate Adjustment will appear
as a charge to the New Owner on the monthly bill prepared during
March.
C. Final Replacements Rate Adjustment
The actual costs associated with the AC Intertie capital replacement work
orders that occur during the rate period may change after BPA performs
its final analysis of the work orders. BPA shall compare the unit rate
for the rate period using the results of the final work order analysis to
the weighted average of the unit rates from the Initial Replacements Rate
Adjustments.
1. Notice Provisions
BPA shall notify all New Owners in May 1998 of the results of the
calculations, an explanation of work order changes(s), and any
Exhibit A, Page 6 of 14
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
resulting billing adjustment. Written comments from New Owners will
be accepted through the end of June. BPA shall notify all New Owners
of the Final Replacements Rate Adjustment by July 31. Consideration
of comments submitted by the New Owners may result in the Final
Replacements Rate Adjustment differing from the initially proposed
adjustment.
2. Adjustment of Monthly Bills
If the absolute value of the Final Replacements Rate Adjustment is
greater than or equal to $1 per megawatt per month, an adjustment
will be made on the New Owner's monthly bill prepared during August.
For each New Owner, the Final Replacements Rate Adjustment will be
multiplied by the sum of the monthly billing factors from the
relevant fiscal years (i.e., the New Owner's share in megawatts of
BPA's PNW AC Intertie Rated Transfer Capability multiplied by the
number of months that this rate schedule is effective during the
fiscal years). The Final Replacements Rate Adjustment will appear as
a charge or credit to the New Owner on the monthly bill prepared
during August. Interest, as determined by BPA's Office of Financial
Management, will be included in any adjustment.
SECTION IV. BILLING FACTOR
The billing demand shall be the New Owner's capacity ownership share in
megawatts of BPA's PNW AC Intertie Rated Transfer Capability as specified in
the Agreement.
Exhibit A, Page 7 of 14
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
SCHEDULE IS-93
SECTION I. AVAILABILITY
This schedule supersedes IS-91 and is available for all transmission on the
Southern Intertie. Service under this schedule is subject to BPA's General
Transmission Rate Schedule Provisions.
SECTION II. RATE
A. Nonfirm Transmission Rate
The charge for nonfirm transmission of non-BPA power shall be 3.11 mills
per kilowatthour of billing energy. This charge applies for both north-
to-south and south-to-north transactions.
B. Firm Transmission Rate
The charge for firm transmission service shall be $0.706 per kilowatt per
month of billing demand and 1.69 mills per kilowatthour of billing
energy. Firm transmission will only be made available to customers under
this rate schedule who have executed a contract with BPA specifying use
of the Firm Transmission rate for either north-to-south or south-to-north
transactions.
SECTION III. BILLING FACTORS
A. For services under Section II.A. the billing energy shall be the monthly
sum of the scheduled kilowatthours, plus the monthly sum of kilowatthours
allocated but not scheduled. The amount of allocated but not scheduled
energy that is subject to billing may be reduced pro rata by BPA due to
forced Intertie outages and other uncontrollable forces that may reduce
Intertie capacity. The amount of allocated but not scheduled energy that
is subject to billing also may be reduced upon mutual agreement between
BPA and the customer.
B. For services under Section II.B. the billing demand shall be the
Transmission Demand as defined in the Agreement. The billing energy
shall be the monthly sum of scheduled kilowatthours, unless otherwise
specified in the Agreement.
Exhibit A, Page 8 of 14
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
General Transmission Rate Schedule Provisions
SECTION I. ADOPTION OF REVISED TRANSMISSION RATE SCHEDULES AND GENERAL
TRANSMISSION RATE SCHEDULE PROVISIONS (GTRSPs)
A. Approval of Rates
These rate schedules and GTRSPs shall become effective upon interim
approval or upon final confirmation and approval by FERC. BPA will
request FERC approval effective October 1, 1993.
B. General Provisions
These 1993 Transmission Rate Schedules and associated GTRSPs are
virtually identical to and supersede BPA's 1991 Transmission Rate
schedules and GTRSPs (which became effective October 1, 1992) but do not
supersede prior rate schedules required by agreement to remain in force.
Transmission service provided shall be subject to the following Acts, as
amended: the Bonneville Project Act, the Regional Preference Act (P.L.
88-552), the Federal Columbia River Transmission System Act, and the
Pacific Northwest Electric Power Planning and Conservation Act, and the
Energy Policy Act of 1992, Pub. L. 102-486, 106 Stat. 2776 (1992).
The meaning of terms used in the transmission rate schedules shall be as
defined in agreements or provisions which are attached to the Agreement
or as in any of the above Acts.
C. Interpretation
If a provision in the executed Agreement is in conflict with a provision
contained herein, the former shall prevail.
SECTION II. BILLING FACTOR DEFINITIONS AND BILLING ADJUSTMENTS
A. Billing Factors
1. Scheduled Demand
The largest of hourly amounts wheeled which are scheduled by the
customer during the time period specified in the rate schedules.
2. Metered Demand
The Metered Demand in kilowatts shall be the largest of the 60-minute
clock-hour integrated demands measured by meters installed at each
POD during each time period specified in the applicable rate
schedule. Such measurements shall be made as specified in the
Agreement. BPA, in determining the Metered Demand, will exclude any
abnormal readings due to or resulting from: (a) emergencies or
Exhibit A, Page 9 of 14
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
breakdowns on, or maintenance of, the FCRTS; or (b) emergencies on
the customer's facilities, provided that such facilities have been
adequately maintained and prudently operated as determined by BPA.
If more than one class of power is delivered to any POD, the portion
of the metered quantities assigned to any class of power shall be as
agreed to by the parties. The amount so assigned shall constitute
the Metered Demand for such class of power.
3. Transmission Demand
The demand as defined in the Agreement.
4. Total Transmission Demand
The sum of the transmission demands as defined in the Agreement.
5. Ratchet Demand
The maximum demand established during the previous 11 billing months.
Exception: if a Transmission Demand or Total Transmission Demand has
been decreased pursuant to the terms of the Agreement during the
previous 11 billing months, such decrease will be reflected in
determining the Ratchet Demand.
B. Billing Adjustments
Average Power Factor
The adjustment for average power factor, when specified in a transmission
rate schedule or in the Agreement, shall be made in accordance with the
average power factor section of the General Wheeling Provisions.
To maintain acceptable operating conditions on the Federal system, BPA
may restrict deliveries of power at any time that the average leading
power factor or average lagging power factor for all classes of power
delivered to such point or to such system is below 85 percent.
SECTION III. OTHER DEFINITIONS
Definitions of the terms below shall be applied to these provisions and the
Transmission Rate Schedules, unless otherwise defined in the Agreement.
A. Agreement
An agreement between BPA and a customer to which these rate schedules and
provisions may be applied.
Exhibit A, Page 10 of 14
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
B. Eastern Intertie
The segment of the FCRTS for which the transmission facilities consist of
the Townsend-Garrison double-circuit 500 kV transmission line segment
including related terminals at Garrison
C. Electric Power
Electric peaking capacity (kW) and/or electric energy (kWh).
D. Federal Columbia River Transmission System
The transmission facilities of the Federal Columbia River Power System,
which include all transmission facilities owned by the government and
operated by BPA, and other facilities over which BPA has obtained
transmission rights.
E. Firm Transmission Service
Transmission service which BPA provides for any non-BPA power except for
transmission service which is scheduled as nonfirm. If the firm service
is provided pursuant to the Agreement, the terms of the Agreement may
further define the service.
F. Integrated Network
The segment of the FCRTS for which the transmission facilities provide
the bulk of transmission of electric power within the Pacific Northwest,
excluding facilities not segmented to the network as shown in the
Wholesale Power Rate Development Study used in BPA's rate development.
G. Main Grid
As used in the FPT and IR rate schedules, that portion of the Integrated
Network with facilities rated 230 kV and higher.
H. Main Grid Distance
As used in the FPT rate schedules, the distance in airline miles on the
Main Grid between the POI and the POD, multiplied by 1.15.
I. Main Grid Interconnection Terminal
As used in the FPT rate schedules, Main Grid terminal facilities that
interconnect the FCRTS with non-BPA facilities.
J. Main Grid Miscellaneous Facilities
As used in the FPT rate schedules, switching, transformation, and other
facilities of the Main Grid not included in other components.
Exhibit A, Page 11 of 14
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
K. Main Grid Terminal
As used in the FPT rate schedules, the Main Grid terminal facilities
located at the sending and/or receiving end of a line exclusive of the
Interconnection terminals.
L. Nonfirm Transmission Service
Interruptible transmission service which BPA may provide for non-BPA
power.
M. Northern Intertie
The segment of the FCRTS for which the transmission facilities consist of
two 500 kV lines between Custer Substation and the United States-Canadian
border, one 500 kV line between Custer and Monroe Substations, and two
230 kV lines from Boundary Substation to the United States-Canadian
border, and the associated substation facilities.
N. Point of Integration (POI)
Connection points between the FCRTS and non-BPA facilities where non-
Federal power is made available to BPA for wheeling.
O. Point of Delivery (POD)
Connection points between the FCRTS and non-BPA facilities where non-
Federal power is delivered to a customer by BPA.
P. Secondary System
As used in the FPT and IR rate schedules that portion of the Integrated
Network facilities with operating voltage of 115 kV or 69 kV.
Q. Secondary System Distance
As used in the FPT rate schedules, the number of circuit miles of
Secondary System transmission lines between the secondary POI and the
Main Grid or the secondary POD, or the Main Grid and the secondary POD.
R. Secondary System Interconnection Terminal
As used in the FPT rate schedules, the terminal facilities on the
Secondary System that interconnect the FCRTS with non-BPA facilities.
S. Secondary System Intermediate Terminal
As used in the FPT rate schedules, the first and final terminal
facilities in the Secondary System transmission path exclusive of the
Secondary System Interconnection terminals.
Exhibit A, Page 12 of 14
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
T. Secondary Transformation
As used in the FPT rate schedules, transformation from Main Grid to
Secondary System facilities.
U. Southern Intertie
The segment of the FCRTS for which the major transmission facilities
consist of two 500 kV AC lines from John Day Substation to the Oregon-
California border, a portion of the 500 kV AC line from Buckley
Substation to Summer Lake Substation; when completed, the Third AC
facilities which include Captain Jack Substation and the Alvey-Meridian
500 kV AC line; one 1,000 kV DC line between the Celilo Substation and
the Oregon-Nevada border, and associated substation facilities.
V. Transmission Service
As used in the MT rate schedule, Transmission Service is as defined in
the Western Systems Power Pool Agreement.
SECTION IV. BILLING INFORMATION
A. Payment of Bills
Bills for transmission service shall be rendered monthly by BPA. Failure
to receive a bill shall not release the customer from liability for
payment. Bills for amounts due of $50,000 or more must be paid by direct
wire transfer, customers who expect that their average monthly bill will
not exceed $50,000 and who expect special difficulties in meeting this
requirement may request, and BPA may approve, an exemption from this
requirement. Bills for amounts due BPA under $50,000 may be paid by
direct wire transfer or mailed to the Bonneville Power Administration,
P.O. Box 6040, Portland, Oregon 97228-6040, or to another location as
directed by BPA. The procedures to be following in making direct wire
transfers will be provided by the Office of Financial Management and
updated as necessary.
1. Computation of Bills
The transmission billing determinant is the electric power quantified
by the method specified in the agreement or Transmission Rate
Schedule. Scheduled power or metered power will be used.
The transmission customer shall provide necessary information to BPA
for any computation required to determine the proper charges for use
of the FCRTS, and shall cooperate with BPA in the exchange of
additional information which may be reasonably useful for respective
operations.
Demand and energy billings for transmission service under each
applicable rate schedule shall be rounded to whole dollar amounts, by
Exhibit A, Page 13 of 14
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
eliminating any amount which is less than 50 cents and increasing any
amounts from 50 cents through 99 cents to the next higher dollar.
2. Estimated Bills
At its option, BPA may elect to render an estimated bill to be
followed at a subsequent billing date by a final bill. The estimated
bill shall have the validity of and be subject to the same payment
provisions as a final bill.
3. Billing Month
For charges based on scheduled quantities, the billing month is the
calendar month. For charges based on metered quantities, the billing
month is defined as the interval between scheduled meter-reading
dates. The billing month will not exceed 31 days in any case. While
it may be necessary to read meters on a day other than the scheduled
meter-reading date, for determination of billing demand, the billing
month will cease at 2400 hours on the last scheduled meter-reading
date. Schedules will be predetermined. The customer must give 30
days notice to request a change to the schedule.
4. Due Date
Bills shall be due by close of business on the 20th day after the
date of the bill (due date). should the 20th day be a Saturday,
Sunday, or holiday (as celebrated by the customer), the due date
shall be the next following business day.
5. Late Payment
Bills not paid in full on or before close of business on the due date
shall be subject to a penalty charge of $25. In addition, an
interest charge of one-twentieth percent (0.05 percent) shall be
applied each day to the sum of the unpaid amount and the penalty
charge. This interest charge shall be assessed on a daily basis
until such time as the unpaid amount and penalty charge are paid in
full.
Remittances received by mail will be accepted without assessment of
the charges referred to in the preceding paragraph provided the
postmark indicates the payment was mailed on or before the due date.
Whenever a power bill or a portion thereof remains unpaid subsequent
to the due date and after giving 30 days' advance notice in writing,
BPA may cancel the contract for service to the customer. However,
such cancellation shall not affect the customer's liability for any
charges accrued prior thereto under such agreement.
6. Disputed Billings
In the event of a disputed billing, full payment shall be rendered to
BPA and the disputed amount noted. Disputed amounts are subject to
Exhibit A, Page 14 of 14
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
the late payment provisions specified above. BPA shall separately
account for the disputed amount. If it is determined that the
customer is entitled to the disputed amount, BPA shall refund the
disputed amount with interest, as determined by BPA's Office of
Financial Management.
BPA retains the right to verify, in a manner satisfactory to the
Administrator, all data submitted to BPA for use in the calculation
of BPA's rates and corresponding rate adjustments. BPA also retains
the right to deny eligibility for any BPA rate or corresponding rate
adjustment until all submitted data have been accepted by BPA as
complete, accurate, and appropriate for the rate or adjustment under
consideration.
7. Revised Bills
As necessary, BPA may render a revised bill.
a. If the amount of the revised bill is less than or equal to the
amount of the original bill, the revised bill shall replace all
previous bills issued by BPA that pertain to the specified
customer for the specified billing period and the revised bill
shall have the same date as the replaced bill.
b. If a revision causes an additional amount to be due BPA or the
specified customer beyond the amount of the original bill, a
revised bill will be issued for the difference and the date of
the revised bill shall be its date of issue.
Exhibit B, Page 1 of 9
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
ANNUAL COSTS RATE
A. PROPOSED SOUTHERN INTERTIE ANNUAL COST RATE
SECTION I. AVAILABILITY
This schedule is applicable to each party (Capacity Owner) that executes a
PNW AC Intertie Capacity Ownership Agreement (Agreement). Billings pursuant
to this schedule is subject to the Billing Provisions in Exhibit B of the
Agreement. This rate schedule shall be effective on the first day of the
fiscal year following the earlier of interim or final FERC approval of this
rate schedule. Unless otherwise defined in this rate schedule, capitalized
terms used in this rate schedule shall have the respective definitions set
forth in section 1 of this Agreement.
SECTION II. RATE
A. OPERATIONS
The monthly charge equals:
Operations Cost * Capacity Ownership Percentage
-----------------------------------------------
Months
Where
"Months" is equal to 12, or, if the Operating Plan has, during the
fiscal year to which such Operating Plan pertains, been amended
with respect to Operations Cost, the number of full months
remaining in the fiscal year after such amended Operating Plan
becomes effective for which Capacity Owners have not been billed.
"Operations Cost" means, upon and after the effective date of Exhibit
B pursuant to this Agreement, for any fiscal year any Allocated
Direct Costs for Bonneville's PNW AC Intertie, operations Indirect
Costs for Bonneville's PNW AC Intertie, and operations Overhead
Costs for Bonneville's PNW AC Intertie for such fiscal year, each
being determined in accordance with section I of Exhibit I.
"Capacity Ownership Percentage" is as defined in subsection 1(k) of
each Capacity Owner's Agreement.
The monthly charge for the Operations rate shall be calculated using the
forecast Operations Cost in the Operating Plan in effect during the
month for which the monthly charge is calculated; provided, however, if
the Operating Plan is amended during the fiscal year to which such
Operating Plan pertains, the monthly charge for Operations Cost shall be
calculated using the forecast Operations Cost less the Operations Cost
Exhibit B, Page 2 of 9
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
already billed for such fiscal year for the remaining months of the
fiscal year following such amendment.
B. MAINTENANCE
The monthly charge equals:
Maintenance Cost * Capacity Ownership Percentage
------------------------------------------------
Months
Where
"Months" is equal to 12, or, if the Operating Plan has, during the
fiscal year to which such Operating Plan pertains, been amended
with respect to Maintenance Cost, the number of full months
remaining in the fiscal year after such amended Operating Plan
becomes effective for which Capacity Owners have not been billed.
"Maintenance Cost" means, upon and after the effective date of
Exhibit B pursuant to this Agreement, for any fiscal year any
maintenance Direct Costs for Bonneville's PNW AC Intertie,
maintenance Indirect Costs for Bonneville's PNW AC Intertie, and
maintenance Overhead Costs for Bonneville's PNW AC Intertie for
such fiscal year, each being determined in accordance with section
II of Exhibit I.
"Capacity Ownership Percentage" is as defined in subsection 1(k) of
each Capacity Owner's Agreement.
The monthly charge for the Maintenance rate shall be calculated using
the forecast Maintenance Cost in the Operating Plan in effect during the
month for which the monthly charge is calculated; provided, however, if
the Operating Plan is amended during the fiscal year to which such
Operating Plan pertains, the monthly charge for Maintenance Cost shall
be calculated using the forecast Maintenance Cost less the Maintenance
Cost already billed for such fiscal year for the remaining months of the
fiscal year following such amendment.
C. GENERAL PLANT
The monthly charge equals:
General Plant Cost * Capacity Ownership Percentage
--------------------------------------------------
Months
Where
"Months" is equal to 12, or, if the Operating Plan has, during the
fiscal year to which such Operating Plan pertains, been amended
Exhibit B, Page 3 of 9
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
with respect to General Plant Cost, the number of full months
remaining in the fiscal year after such amended Operating Plan
becomes effective for which Capacity Owners have not been billed.
"General Plant Cost" means, upon and after the effective date of
Exhibit B pursuant to this Agreement, for any fiscal year any costs
(including direct costs, indirect costs, overhead costs, and AFUDC)
for Bonneville's general plant investment for such fiscal year.
The method for determining General Plant Cost is set forth in
section IV of Exhibit I.
"Capacity Ownership Percentage" is as defined in subsection 1(k) of
each Capacity Owner's Agreement.
The monthly charge for the General Plant rate shall be calculated using
the General Plant Cost in the Operating Plan in effect during the month
for which the monthly charge is calculated; provided, however, if the
Operating Plan is amended during the fiscal year to which such Operating
Plan pertains, the monthly charge for General Plant Cost shall be
calculated using the General Plant Cost less the General Plant Cost
already billed for such fiscal year for the remaining months of the
fiscal year following such amendment.
D. OTHER COSTS
The monthly charge equals:
Other Costs * Capacity Ownership Percentage
-------------------------------------------
Months
Where
"Months" is equal to 12, or, if the Operating Plan has, during the
fiscal year to which such Operating Plan pertains, been amended
with respect to Other Cost, the number of full months remaining in
the fiscal year after such amended Operating Plan becomes effective
for which Capacity Owners have not been billed.
"Other Costs" means, upon and after the effective date of Exhibit B
pursuant to this Agreement, Bonneville's other costs for
Bonneville's PNW AC Intertie described in and determined pursuant
to section V of Exhibit I.
"Capacity Ownership Percentage" is as defined in subsection 1(k) of
each Capacity Owner's Agreement.
The monthly charge for the Other Costs rate shall be calculated using
the forecast Other Costs in the Operating Plan in effect during the
month for which the monthly charge is calculated; provided, however, if
the Operating Plan is amended during the fiscal year to which such
Operating Plan pertains, the monthly charge for Other Costs shall be
Exhibit B, Page 4 of 9
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
calculated using the forecast Other Costs less the Other Costs already
billed for such fiscal year for the remaining months of the fiscal year
following such amendment.
E. CONTRACTS AND RATES
The monthly charge equals:
Contracts and Rates Costs * Capacity Ownership Percentage
---------------------------------------------------------
Months
Where
"Months" is equal to 12, or, if the Operating Plan has, during the
fiscal year to which such Operating Plan pertains, been amended
with respect to Contracts and Rates Cost, the number of full months
remaining in the fiscal year after such amended Operating Plan
becomes effective for which Capacity Owners have not been billed.
"Contracts and Rates Costs" means, upon and after the effective date
of Exhibit B pursuant to this Agreement, for any fiscal year
Bonneville's total contracts and rates costs (as described in
section VI of Exhibit I) for such fiscal year as functionalized and
allocated in accordance with section VI of Exhibit I to determine
Contracts and Rates Costs for Bonneville's PNW AC Intertie.
"Capacity Ownership Percentage" is as defined in subsection 1(k) of
each Capacity Owner's Agreement.
Contracts and Rates Cost is determined in accordance with section VI of
Exhibit I as of the Effective Date. If Exhibit I is amended pursuant to
subsection 19(k) of the Agreement to provide that the Contracts and
Rates Cost determined in accordance with section VI of Exhibit I (and
reflected in the Operating Plan for the fiscal year to which such
Operating Plan pertains) is directly assigned to the Capacity Owners
pursuant to such amended Exhibit I (and reflected in the Operating Plan
for the fiscal year to which such Operating Plan pertains), the Capacity
Ownership Percentage in the monthly charge calculation for such fiscal
year shall be replaced by the ratio of (a) each Capacity Ownership Share
to (b) the sum of all Capacity Ownership Shares.
The monthly charge for the Contracts and Rates rate shall be calculated
using the forecast Contracts and Rates Costs in the Operating Plan in
effect during the month for which the monthly charge is calculated;
provided, however, if the Operating Plan is amended during the fiscal
year to which such Operating Plan pertains, the monthly charge for
Contracts and Rates Cost shall be calculated using the forecast
Contracts and Rates Cost less the Contracts and Rates Cost already
billed for such fiscal year for the remaining months of the fiscal year
following such amendment.
Exhibit B, Page 5 of 9
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
F. POWER SCHEDULING
The monthly charge equals:
Power Scheduling Costs * Capacity Ownership Percentage
------------------------------------------------------
Months
Where
"Months" is equal to 12, or, if the Operating Plan has, during the
fiscal year to which such Operating Plan pertains, been amended
with respect to Power Scheduling Cost, the number of full months
remaining in the fiscal year after such amended Operating Plan
becomes effective for which Capacity Owners have not been billed.
"Power Scheduling Costs" means, upon and after the effective date of
Exhibit B pursuant to this Agreement, Bonneville's total power
scheduling costs (as described in section VII of Exhibit I) as
functionalized and allocated in accordance with section VII of
Exhibit I to determine Power Scheduling Costs for Bonneville's PNW
AC Intertie.
"Capacity Ownership Percentage" is as defined in subsection 1(k) of
each Capacity Owner's Agreement.
Power Scheduling Cost is determined in accordance with section VII of
Exhibit I as of the Effective Date. If Exhibit I is amended pursuant to
subsection 19(k) of the Agreement to provide that the Power Scheduling
Cost determined in accordance with section VII of Exhibit I (and
reflected in the Operating Plan for the fiscal year to which such
Operating Plan pertains) is directly assigned to the Capacity Owners
pursuant to such amended Exhibit I (and reflected in the Operating Plan
for the fiscal year to which such Operating Plan pertains), the Capacity
Ownership Percentage in the monthly charge calculation for such fiscal
year shall be replaced by the ratio of (a) each Capacity Ownership Share
to (b) the sum of all Capacity Ownership Shares.
The monthly charge for the Power Scheduling rate shall be calculated
using the forecast Power Scheduling Costs in the Operating Plan in
effect during the month for which the monthly charge is calculated;
provided, however, if the Operating Plan is amended during the fiscal
year to which such Operating Plan pertains, the monthly charge for Power
Scheduling Cost shall be calculated using the forecast Power Scheduling
Cost less the Power Scheduling Cost already billed for such fiscal year
for the remaining months of the fiscal year following such amendment.
G. END OF TERM
The monthly charge shall equals:
End of Term Costs * Capacity Ownership Percentage
Exhibit B, Page 6 of 9
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
-------------------------------------------------
Months
Where
"Months" is equal to 12, or, if the Operating Plan has, during the
fiscal year to which such Operating Plan pertains, been amended
with respect to End of Term Costs, the number of full months
remaining in the fiscal year after such amended Operating Plan
becomes effective for which Capacity Owners have not been billed.
"End of Term Costs" means, upon and after the effective date of
Exhibit B pursuant to this Agreement, Bonneville's costs associated
with decommissioning the PNW AC Intertie determined in accordance
with section VIII of Exhibit I.
"Capacity Ownership Percentage" is as defined in subsection 1(k) of
each Capacity Owner's Agreement.
The monthly charge for the End of Term rate shall be calculated using
the forecast End of Term Costs in the Operating Plan in effect during
the month for which the monthly charge is calculated; provided, however,
if the Operating Plan is amended during the fiscal year to which such
Operating Plan pertains, the monthly charge for End of Term Costs shall
be calculated using the forecast End of Term Costs less the End of Term
Cost already billed for such fiscal year for the remaining months of the
fiscal year following such amendment.
H. REPLACEMENTS AND REINFORCEMENTS
1. For each Replacement, the charge equals:
Replacement Cost * Capacity Ownership Percentage
2. For each Reinforcement, the charge equals:
Reinforcement Cost * Capacity Ownership Percentage
Where
"Replacement Cost" means, upon and after the effective date of
Exhibit B pursuant to this Agreement, for any Replacement, the
Direct Costs, Indirect Costs, Overhead Costs, and AFUDC for such
Replacement, all capitalized to plant-in-service together with (1)
simple interest on the foregoing costs accrued from the date on
which Bonneville stops accruing AFUDC on the foregoing costs until
the due date of the bill to Capacity Owner for the foregoing costs
pursuant to subparagraph 9(b)(2)(B) and (2) the costs of removal
and any salvage credit associated with removal or replacement of
Exhibit B, Page 7 of 9
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
existing facilities. Replacement Cost does not include capitalized
general plant cost. The method for determining Replacement Costs
for Bonneville's PNW AC Intertie is set forth in section III of
Exhibit I.
"Reinforcement Cost" means, upon and after the effective date of
Exhibit B pursuant to this Agreement, for any Reinforcement, the
Direct Costs, Indirect Costs, Overhead Costs, and AFUDC for such
Reinforcement, all capitalized to plant-in-service together with
(1) simple interest on the foregoing costs accrued from the date on
which Bonneville stops accruing AFUDC on the foregoing costs until
the due date of the bill to Capacity Owner for the foregoing costs
pursuant to subparagraph 9(b)(2)(B) and (2) the costs of removal
and any salvage credit associated with removal or replacement of
existing facilities. Reinforcement Cost does not include
capitalized general plant cost. The method for determining
Reinforcement Costs for Bonneville's PNW AC Intertie is set forth
in section III of Exhibit I.
"Capacity Ownership Percentage" is as defined in subsection 1(k) of
each Capacity Owner's Agreement.
The charge for the Replacements and Reinforcements rate shall use the
actual Replacement Cost and Reinforcement Cost in the Operating Plan.
SECTION III. ADJUSTMENTS
If an amendment to the Operating Plan results in a net amount that
Bonneville owes the Capacity Owners pursuant to sections II.A-G or
pursuant to section II.H, Bonneville shall refund such net amount
pursuant to paragraph 9(f)(4) of the Agreement.
The monthly charges assessed Capacity Owners under sections II.A-G shall
be adjusted, and payment or refund made with interest, pursuant to
paragraphs 9(b)(2) or 9(f)(4) of the Agreement, to reflect amendments to
the Operating Plan that occur after the year to which such Operating
Plan pertains. A Capacity Owner's share of the adjustment shall be
determined using the same Capacity Ownership Percentage used in the
billings under sections II.A-G during the fiscal year that such
Operating Plan is effective.
B. BILLING PROVISIONS
I. General Provisions
A. Approval of Rates
The annual costs rate shall become effective upon interim approval or
upon final confirmation and approval by FERC. Bonneville will request
FERC approval of such rate schedule effective on the first day of a
Bonneville fiscal year.
Exhibit B, Page 8 of 9
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
B. Application of Billing Provisions
These Billing Provisions shall apply to bills rendered by Bonneville
pursuant to the annual costs rate.
C. Definition of Terms
The meaning of terms used in the AC-95 rate shall be as defined in the
Agreement or, if no definition is provided by the Agreement, such terms
shall be defined according to applicable Federal law.
II. Billing Information
Payment of Bills
Charges pursuant to the AC-95 rate shall be included in Bonneville's
monthly power bill to Capacity Owner. Failure to receive a power bill
shall not release Capacity Owner from liability for payment. Power
bills for amounts due of $50,000 or more must be paid by direct wire
transfer. If Capacity Owner anticipates special difficulties in meeting
this requirement, Capacity Owner may request and Bonneville may approve
an exemption from this requirement. Power bills for amounts due
Bonneville under $50,000 may be paid by direct wire transfer or mailed
to the Bonneville Power Administration, P.O. Box 6040, Portland, Oregon
97228-6040, or to another location as directed by Bonneville. The
procedures to be followed in making direct wire transfers will be
provided by Bonneville's Financial Services Group and updated as
necessary.
(1) Computation of Bills
(a) Bonneville shall bill Capacity Owner in accordance with the
annual costs rate.
(b) Capacity Owner shall provide necessary information to
Bonneville for any computation required to determine proper charges
pursuant to the Agreement and shall cooperate with Bonneville in
the exchange of additional information which may be reasonably
useful for respective operations.
(c) Bills rendered pursuant to this Agreement shall be rounded to
whole dollar amounts, by eliminating any amount which is less than
50 cents and increasing any amounts from 50 cents to 99 cents to
the next higher whole dollar.
(2) Billing Month
For charges pursuant to the annual costs rate the billing month shall be
the same as for the power bill rendered by Bonneville to Capacity Owner.
(3) Due Date
Exhibit B, Page 9 of 9
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Charges pursuant to the annual costs rate shall be included in the power
bill rendered by Bonneville to Capacity Owner and shall be due as part
of the power bill when such power bill is due.
(4) Late Payment
The penalties for failure to pay a bill in full on or before close of
business on the due date shall be the same as those contained in the
late payment provisions in Bonneville's General Transmission Rate
Schedule Provisions in effect on the date of the bill; provided,
however, that no other provision of any such General Transmission Rate
Schedule Provisions, including, but not limited to, provisions regarding
cancellation, termination, or suspension of service, shall have
application with respect to the payment of any rate or charge pursuant
to the annual costs rate set forth in Exhibit B. Bonneville's right to
suspend service for late payment under the Agreement shall be pursuant
to paragraph 9(e)(1) of this Agreement, which right shall in no way be
limited by this section.
(5) Disputed Bills
In the event of a disputed bill, full payment shall be rendered to
Bonneville and the disputed amount noted. Disputed amounts are subject
to the late payment provisions specified in section II(4) of the Billing
Provisions of this Exhibit B. Bonneville shall separately account for
the disputed amount. If it is determined that Capacity Owner is
entitled to the disputed amount, Bonneville shall refund the disputed
amount with interest, such interest to be determined by Bonneville's
Financial Services Group. In the event that Bonneville and Capacity
Owner do not resolve such dispute, Capacity Owner shall not be
prevented by this section II(5)of the Billing Provisions of this Exhibit
B from initiating arbitration pursuant to and to the extent allowed by
section 15 of this Agreement.
(6) Revised Bills
If Bonneville determines that it has over- or under-charged Capacity
Owner due to a computational error or pursuant to an amendment to the
Operating Plan in any given billing month, Bonneville may render to
Capacity Owner a revised bill.
(i) If the amount of the revised bill is less than or equal to the
amount of the original bill for such billing month, the revised
bill shall replace the original bill issued by Bonneville. The
revised bill shall have the same date as the original bill.
(ii) If the amount of the revised bill is greater than the amount
of the original bill for such billing month, a new bill will be
issued for the difference between the revised bill and the original
bill. The date of the new bill shall be its date of issuance, and
Capacity Owner shall make payment to Bonneville as specified in the
Billing Provisions of this Exhibit B.
Exhibit C, Page 1 of 1
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
CAPACITY OWNERSHIP SHARE, CAPACITY OWNERSHIP PERCENTAGE
SCHEDULING PERCENTAGE, AND SCHEDULING SHARE
Capacity Ownership
Share = 400 MW
Capacity Ownership
Percentage = Capacity Ownership Share divided by
Bonneville's PNW AC Intertie Rated
Transfer Capability (1)
Scheduling Percentage = Capacity Ownership Share divided by
PNW AC Intertie Rated Transfer Capability
Scheduling Share = Scheduling Percentage PNW AC Intertie
Operational Transfer Capability
- --------------------
(1) As of the Effective Date, Bonneville's PNW AC Intertie Rated Transfer
Capability in a north-to-south direction, calculated in accordance with
the Northwest Intertie Agreements equals 3450 MW (total PNW AC Intertie
Rated Transfer Capability (4800MW) - Portland's PNW AC Intertie Rated
Transfer Capability (950 MW) - PacifiCorp's PNW AC Intertie Rated
Transfer Capability (400 MW)).
Exhibit D, Page 1 of 5
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
LUMP SUM PAYMENT CALCULATION
A. SECOND 800 MW COSTS, ESTIMATED (1), ACTUAL (2), AND REVISED ACTUAL (3)
($ in Thousands)
(2) BPA's
(1) BPA's Costs
FACILITIES WHOSE COSTS WILL BE ADJUSTED BPA's Costs Costs Revised
Using Change Between Estimate And Actual Estimated Actual Actual
- ---------------------------------------- ----------- -------- -------
1. Alvey (Marion-Alvey Caps) $5,739
2. Slatt (Loop in - Breaker) 3,044
3. Grizzly (BPA Breakers) 11,044
4. Loop into Slatt 656
5. Malin-Meridian loop into Captain Jack 982
6. Alvey Substation - BPA 8,168
7. Dixonville - PacifiCorp 8,635
8. Meridian - PacifiCorp 6,548
9. Power System Control 3,575
10. Alvey-Spencer - BPA 1,346
11. Spencer-Dixonville - PacifiCorp 20,388
12. Dixonville-Meridian - PacifiCorp 32,140
-------
SUBTOTAL 102,265
FACILITIES WHOSE COSTS WILL BE ADJUSTED USING CHANGE
BETWEEN ESTIMATE AND ACTUAL, MULTIPLIED BY 50 PERCENT
13. Captain Jack (BPA Breakers) $14,335
14. Captain Jack (Communication
and Control) 5,100
15. Captain Jack (Series Capacitors) 722
16. Power System Control 5,596
17. Captain Jack line to
Oregon-Calif. border 5,724
------
SUBTOTAL $31,477
50 PERCENT OF SUBTOTAL 15,739
-------
TOTAL $118,004
-------
- --------------------
(1) Based on mid-1989 program planning levels.
(2) Actual costs will be available approximately December 1995, or as soon as
practicable thereafter. Supporting documentation will be provided
including work orders and accounting data for each line item.
(3) For each calculation of the Revised Adjusted Capacity Ownership Price,
Bonneville will include the revised actual costs of facilities pertaining
to each such calculation of the Revised Adjusted Capacity Ownership
Price.
Exhibit D, Page 2 of 5
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
B. INITIAL, ADJUSTED, AND REVISED ADJUSTED CAPACITY OWNERSHIP PRICE (1)
($ in Millions)
(1) (2) Revised
Initial Adjusted Adjusted
Capacity Capacity Capacity
Ownership Ownership Ownership
Price Price Price
COST ITEM
1. Second 800 MW $118 $___ $___
2. AFUDC(3) on Second 800 MW + 19 + ___ + ___
3. Existing Support Facilities + 19.1 + 19.1(4) + 19.1(4)
--- --- ---
4. Total Cost(5) $156 $___ $___
5. PRICE PER KW (CO-94)(6) $215 $___ $___
- --------------------
(1) Initial, Adjusted, and Revised Adjusted Capacity Ownership Price are
determined in accordance with the CO-94 rate in Exhibit A.
(2) Bonneville may make multiple calculations of the Revised Adjusted
Capacity Ownership Price pursuant to paragraph 9(a)(3). For each
calculation of the Revised Adjusted Capacity Ownership Price, Bonneville
will include the column pertaining to such calculation and the columns
for any previous calculations of the Revised Adjusted Capacity Ownership
Price.
(3) AFUDC will be calculated in accordance with the CO-94 rate in Exhibit A.
(4) Not adjusted in calculating the Adjusted Capacity Ownership Price or the
Revised Adjusted Capacity Ownership Price.
(5) Bonneville's indirect costs and overhead costs shall be included. Such
indirect costs and overhead costs shall be allocated or distributed to
the Third AC Intertie Project using the indirect and overhead allocation
and distribution methodologies employed by Bonneville to allocate and
distribute indirect and overhead costs to all of Bonneville's other
capital projects during the time the Third AC Intertie Project was under
construction. Such allocation or distribution methodologies shall not be
required to meet any stricter standard of benefit to Bonneville's Third
AC Intertie Project than with respect to any other transmission projects
under construction at the same time.
(6) Price per kW is derived by dividing the Total Cost by 725 MW.
Exhibit D, Page 3 of 5
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
C. INITIAL LUMP SUM PAYMENT
1. Puget's Capacity Ownership Share = 400 MW
2. Initial Capacity ownership Price
X $215 ($215,000/MW)
3. Initial Lump Sum Payment (1)
= $86,000,000
4. Deduction:
Negotiation Deposit with Interest (2) -
5. Due to Bonneville: =
- --------------------
(1) Initial Lump Sum Payment is calculated in accordance with section IV.A of
the CO-94 rate in Exhibit A.
(2) Interest is calculated as specified in Bonneville's April 23, 1993,
letter to Puget. The rate of interest for the computation is the
interest rate applicable to 3-month Treasury Bills as specified in the
FEDERAL RESERVE Statistical Release G.13. The rates are determined for
the 3-month yield reported on the first day of the month of receipt of
the negotiation deposit and on the first day of each subsequent third
month thereafter. Interest is compounded quarterly from May 11, 1993,
through the date Bonneville receives payment pursuant to paragraph
9(a)(1).
Exhibit D, Page 4 of 5
No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
D. ADJUSTED LUMP SUM PAYMENT
1. Puget's Capacity Ownership Share = 400 MW
2. Adjusted Capacity Ownership Price
X $
3. Adjusted Lump Sum Payment (1) =
4. Initial Lump Sum Payment - ______________
5. SUBTOTAL due to Bonneville, or Refund
Due to Puget =
6. Interest (2) +
7. Due to Bonneville, or Refund
Due to Puget =
- --------------------
(1) Adjusted Lump Sum Payment is calculated in accordance with the CO-94 rate
in Exhibit A.
(2) Interest will be calculated in accordance with the CO-94 rate in Exhibit
A using the weighted average interest rate on Bonneville's outstanding
bonds. Simple interest will be accrued from the date Bonneville receives
payment pursuant to paragraph 9(a)(1) through the date Bonneville or
Puget receives payment pursuant to subparagraph 9(a)(2)(B).
Exhibit D, Page 5 of 5
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
E. REVISED ADJUSTED LUMP SUM PAYMENT
1. Puget's Capacity Ownership Share = 400 MW
2. Current Revised Adjusted Capacity
Ownership Price x $
3. Current Revised Adjusted Lump Sum
Payment (1) =
4. Adjusted Lump Sum Payment/immediately - ____________________
preceding Revised Adjusted Lump Sum
Payment
5. SUBTOTAL due to Bonneville, or Refund
Due to Puget =
6. Interest (2) +
7. Due to Bonneville, or Refund
Due to Puget =
- --------------------
(1) Revised Adjusted Lump Sum Payment is calculated in accordance with the CO-
94 rate in Exhibit A. Bonneville will calculate a Revised Adjusted Lump
Sum Payment each time a Revised Adjusted Capacity Ownership Price is
calculated pursuant to paragraph 9(a)(3).
(2) Interest will be calculated in accordance with the CO-94 rate in Exhibit
A using the weighted average interest rate on Bonneville's outstanding
bonds. Simple interest will be accrued from (a) the date Bonneville or
Puget receives payment with respect to the Adjusted Lump Sum Payment
pursuant to paragraph 9(a)(2)(B) or (b) the date Bonneville or Puget
receives payment with respect to the Revised Adjusted Lump Sum Payment
immediately preceding the current Revised Adjusted Lump Sum Payment
through the date Bonneville or Puget receives payment with respect to the
current Revised Adjusted Lump Sum Payment pursuant to subparagraph
9(a)(3)(B).
Exhibit E, Page 1 of 1
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
Transmission Loss Factors
A. The transmission loss factor to be applied to Puget's schedules for
transactions transmitted on Puget's Scheduling Share shall be 2.5
percent.
B. The transmission loss factor to be applied to Puget's schedules for
transactions transmitted pursuant to subparagraph 3(b)(1)(C) shall be
3.0 percent.
Exhibit F, Page 1 of 10
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
BONNEVILLE'S PNW AC INTERTIE
A. TRANSMISSION LINE FACILITIES
% APPLICABLE TO
% BPA OWNED PNW AC INTERTIE
----------- ---------------
1. McNary-John Day 500 kV Line 100 100
---------------------------
Loop into Slatt:
---------------
McNary-Slatt Str. 108/1 to
substation dead end tower,
155 meters
Slatt-John Day Str. 1/1 to
substation dead end tower,
194 meters
2. John Day-Grizzly No. 1 500 kV 100 100
3. John Day-Grizzly No. 2 500 kV 100 100
4. Grizzly-Captain Jack No. 1 500 kV 100 100
5. Captain Jack-Malin No. 1 500 kV 100 100
6. Buckley-Grizzly 500 kV 100 57
7. Grizzly-Summer Lake 500 kV 100 57
8. 500 kV double circuit between 100 25
Buckley and Marion that supports
the Buckley-Marion No. 1 and the
Ashe-Marion No. 2 500 kV circuits
(Str. No. 1/3 to Marion, 159 km)
9. Marion-Alvey 500 kV 100 50
10. Captain Jack-COB (10 km) 500 kV 100 100
11. Alvey-Dixonville 500 kV 50 100
12. Dixonville-Meridian 500 kV 50 100
B. SUBSTATION FACILITIES (1)(2)
% APPLICABLE TO
% BPA OWNED PNW AC INTERTIE
----------- ---------------
1. SLATT 500 kV (Dispatch one-line
diagram No. 228962)
John Day line terminal
----------------------
New Breaker D#5021 100 100
Existing 500 kV MOD D#5020/7022 100 100
New 500 kV MOD D#5022 100 100
Existing 500 kV MOD D#5019 100 50
Existing Breaker D#5018 100 50
Exhibit F, Page 2 of 10
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
% APPLICABLE TO
% BPA OWNED PNW AC INTERTIE
----------- ---------------
Associated Terminal Arresters 100 100
Associated Line PTs 100 100
McNary line terminal
--------------------
500 kV MOD D#5023/7847 100 100
Associated Terminal Arresters 100 100
Associated Line PTs 100 100
Station General
2. JOHN DAY 500 kV (Dispatch one-line
diagram No. 132281)
Grizzly No.2 line terminal
--------------------------
Breaker D#4131 100 50
Breaker D#4134 100 100
MOD D#4132 100 50
MOD D#4133/7867 100 100
MOD D#4135 100 100
Associated Line PTs 100 100
Grizzly No.1 line terminal
--------------------------
Breaker D#4140 100 50
Breaker D#4143 100 100
MOD D#4141 100 50
MOD D#4142/7869 100 100
MOD D#4144 100 100
Associated Terminal Arresters 100 100
Associated Line PTs 100 100
Station General
3. BUCKLEY 500 KV, GAS INSULATED
SUBSTATION (Dispatch one-line
diagram No. 232583)
Slatt No. 1 line terminal
-------------------------
Breaker D#4967 100 57
Isolating switch D#4966/7328 100 57
Isolating switch D#4968/7355 100 57
Ground switch D#7415 100 57
Associated Terminal Arresters 100 57
Associated Line PTs 100 57
Summer Lake No. 1 line terminal
-------------------------------
Breaker D#4961 100 57
Exhibit F, Page 3 of 10
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
% APPLICABLE TO
% BPA OWNED PNW AC INTERTIE
----------- ---------------
Isolating switch D#4960/7312 100 57
Isolating switch D#4962/7313 100 57
Ground switch D#7311 100 57
Associated Terminal Arresters 100 57
Associated Line PTs 100 57
Marion No. 1 line terminal
--------------------------
Breaker D#4964 100 57
Isolating switch D#4963/7314 100 57
Isolating switch D#4965/7321 100 57
Ground switch D#7477 100 57
Associated Terminal Arresters 100 57
Associated Line PTs 100 57
Station General
4. MARION 500 kV (Dispatch one-line
diagram No. 136180)
Buckley line terminal
---------------------
Breaker D#4389 100 50
Breaker D#4386 100 25
MOD D#4387 100 25
MOD D#4390 100 50
MOD D#4388/7751 100 50
Associated Line PTs 100 50
Alvey line terminal
-------------------
Breaker D#4374 100 50
Breaker D#4377 100 25
MOD D#4376 100 25
MOD D#4375/7922 100 50
MOD D#4373 100 50
Associated Line PTs 100 50
Station General
5. ALVEY 500 kV (Dispatch one-line
diagram No. 121424)
Bank No. 5 terminal
-------------------
Breaker D#5081 50 100
MOD D#5080 50 100
MOD D#5082 50 100
MOD D#5090 50 100
Exhibit F, Page 4 of 10
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
% APPLICABLE TO
% BPA OWNED PNW AC INTERTIE
----------- ---------------
MOD D#5089/8157 50 100
Associated Terminal Arresters 50 100
Associated Line PTs 50 100
Marion No. 1 line terminal
--------------------------
Breaker D#5084 50 100
MOD D#5083/8155 50 100
MOD D#5085 50 100
Associated Terminal Arresters 50 100
Associated Line PTs 50 100
Dixonville No. 1 line terminal
------------------------------
Breaker D#5087 50 100
MOD D#5086/8156 50 100
MOD D#5088 50 100
Associated Terminal Arresters 50 100
Associated Line PTs 50 100
500 kV Series Capacitor Bank 50 100
---------------------------
(Marion-Alvey 500 kV line)
MODs D#5100/8160,5101/8159,
5102/8158 50 100
Bypass breaker D#5103 50 100
Station General
6. BPA/PACIFICORP DIXONVILLE 500 kV STATION
(PacifiCorp's one-line diagram PD-40020)
Note: PacifiCorp will be invoicing BPA for any future replacements of
these items listed consistent with Exhibit C of Bonneville-PacifiCorp
Amendatory Agreement No. 2 to Contract No. DE-MS79-86BP92299, as revised
or amended.
For Alvey and Meridian line terminals
-------------------------------------
Breakers 11U1, 11U2, 11U3 50 100
Isolating MODs 11U701, 11U700/ 11U507,
11U702, 11U703/11U505, 11U704, 11U705/
11U506, 11U706, 11U707, 11U708/11U501 50 100
Two sets of line terminal PTs 50 100
Two sets of line terminal arresters 50 100
Exhibit F, Page 5 of 10
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
% APPLICABLE TO
% BPA OWNED PNW AC INTERTIE
----------- ---------------
Series Capacitor Bank in Alvey- 50 100
Dixonville 500 kV line and
associated isolating devices
180 MVAR Shunt Reactor Bank S664, 665, 50 100
666, 667 and associated arresters,
PTs, and isolating devices
Station General
7. BPA/PACIFICORP MERIDIAN 500 kV
YARD (PacifiCorp's one-line diagram
PD-32976)
Note: PacifiCorp will be invoicing BPA for any future replacements of
these items listed consistent with Exhibit C of Bonneville-PacifiCorp
Amendatory Agreement No. 2 to Contract No. DE-MS79-86BP92299.
For Dixonville line terminal
---------------------------
Breakers 11R2, 11R6 50 50
Isolating MODs 11R702, 11R703/ 100 100
11R501, 11R704, 11R710, 11R711
One set of line PTs 50 100
One set of line terminal arresters 50 100
for the Dixonville line and one set
for the Captain Jack line
180 MVAR Shunt Reactor Bank S690, 50 100
691 ,692, 693 and associated
arresters, PTs, and isolating devices
Series Capacitor Bank in the 50 100
Dixonville- Meridian 500 kV line
and associated isolating devices.
Station General
8. GRIZZLY 500 kV (Dispatch one-line
diagram No. 103924)
John Day No. 1 line terminal
----------------------------
Breaker D#4058 100 100
Breaker D#5040 100 100
MOD D#4059 100 100
MOD D#4057/7848 100 100
Exhibit F, Page 6 of 10
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
% APPLICABLE TO
% BPA OWNED PNW AC INTERTIE
----------- ---------------
MOD D#4056 100 100
MOD D#5039 100 100
Associated Terminal Arresters 100 100
Associated Line PTs 100 100
John Day No. 2 line terminal
----------------------------
Breaker D#4042 100 100
Breaker D#4046 100 100
MOD D#4043 100 100
MOD D#4044/7845 100 100
MOD D#4045 100 100
MOD D#4047 100 100
Associated Terminal Arresters 100 100
Associated Line PTs 100 100
Buckley No. 1 line terminal
---------------------------
Breaker D#5031 100 100
Breaker D#5028 100 100
MOD D#5032 100 100
MOD D#5030/8122 100 100
MOD D#5029 100 100
MOD D#5027 100 100
Associated Line PTs 100 100
Captain Jack No. 1 line terminal
--------------------------------
Breaker D#5037 100 100
Breaker D#5034 100 100
MOD D#5038 100 100
MOD D#5036/8123 100 100
MOD D#5035 100 100
MOD D#5033 100 100
Associated Terminal Arresters 100 100
Associated Line PTs 100 100
Summer Lake line terminal
-------------------------
Breaker D#5025 100 100
MOD D#5026/8121 100 100
MOD D#5024 100 100
Associated Terminal Arresters 100 100
Associated Line PTs 100 100
Exhibit F, Page 7 of 10
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
% APPLICABLE TO
% BPA OWNED PNW AC INTERTIE
----------- ---------------
180 MVAR Reactor Bank No. 1 100 100
---------------------------
Breaker D#4222 100 100
Isolating Switch D#4060 100 100
Associated Arresters 100 100
300 MVAR Reactor Bank No. 2 100 100
---------------------------
Breaker D#4720 100 100
Isolating Switch D#4719 100 100
Associated Arresters 100 100
300 MVAR Reactor Bank No. 3 and 100 100
Neutral Reactor
Breaker D#4038 100 100
Isolating Switch D#4062 100 100
Neutral isolating switch D#4109/4081 100 100
Associated Arresters 100 100
Associated PTs 100 100
North Main Bus 500 kV PTs 100 100
South Main Bus 500 kV PTs 100 100
Station General
9. SAND SPRING 500 kV COMPENSATION
STATION (Dispatch one-line
diagram No. 142239)
Series Cap.Bank No. 1 100 100
---------------------
(Grizzly-Captain Jack line)
and associated equipment
Series Cap. Bank No. 3 100 100
----------------------
(Grizzly-Summer Lake line)
and associated equipment
Station General
10. FORT ROCK 500 kV COMPENSATION STATION
(Dispatch one-line diagram No. 142237)
Series Cap. Bank No. 1 100 100
----------------------
(Grizzly-Captain Jack line)
and associated equipment
Series Cap. Bank No. 3 100 100
---------------------------
(Grizzly-Summer Lake line)
and associated equipment
Station General
11. SYCAN 500 kV COMPENSATION STATION
(Dispatch one-line diagram No. 142238)
Exhibit F, Page 8 of 10
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
% APPLICABLE TO
% BPA OWNED PNW AC INTERTIE
----------- ---------------
Series Cap. Bank No. 1 100 100
----------------------
(Grizzly- Captain Jack line) and
associated equipment
Series Cap. Bank No. 3 65 100
----------------------
(Summer Lake-Malin line) and
associated equipment but EXCLUDING
the bypass MOD D#5065 and
transmission tower
Station General
12. SUMMER LAKE 500 kV (Dispatch one-
line diagram No. 232667)
Grizzly line terminal
----------------------
(formerly Buckley-Ponderosa Tap)
Breaker D#4959 100 57
MOD D#4955 100 57
MOD D#4956/7309 100 57
Associated Terminal Arresters 100 57
Associated Line PTs 100 57
Malin line terminal
-------------------
Line protective relays 0 100
Station General
13. MALIN 500 kV (Dispatch one-
line diagram No. 103923)
Captain Jack No. 1 line terminal
--------------------------------
Breaker D#4066 100 100
Breaker D#4064 100 100
MOD D#4068 100 100
MOD D#4067/7849 100 100
MOD D#4065
Associated Terminal Arresters 100 100
Associated Line PTs 100 100
Round Mountain line No. 1 terminal
----------------------------------
Breaker D#4186 50 100
MOD D#4063/7970 100 100
MOD D#4185 50 100
MOD D#4187 50 100
Associated Terminal Arresters 100 100
Associated Line PTs 100 100
Round Mountain line No. 2 terminal
----------------------------------
Exhibit F, Page 9 of 10
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
% APPLICABLE TO
% BPA OWNED PNW AC INTERTIE
----------- ---------------
Breaker D#4582 50 100
MOD D#4583 50 100
MOD D#4581 50 100
MOD D#4074/7856 75 100
Grizzly No. 2/Round Mountain No. 2
----------------------------------
line position
-------------
Breaker D#4072 75 100
MOD D#4073 75 100
North Main Bus 500 kV PTs 100 100
-------------------------
South Main Bus 500 kV PTs 50 100
-------------------------
300 MVAR Shunt Reactor Bank No. 1 100 100
---------------------------
and associated arresters and
isolating devices (D#4327, 4393) 100 100
2-239 MVAR Shunt Cap. Banks and
---------------------------
associated isolating devices (D#4183,
4181, 4184, 4182, 8065, 8066)
Line protective relays for Summer 0 100
---------------------------------
Lake line
---------
Station General
14. CAPTAIN JACK 500 kV (Dispatch one-line
diagram No. 248548)
Series Cap. Bank No. 1
----------------------
(Captain Jack-Olinda line) 100 100
MODs D#4974/8101, 4973/8099, 100 100
4975/ 8100
Bypass breaker D#4971, 4972
Grizzly No. 1 line terminal
---------------------------
Breaker D#4990 100 100
Breaker D#4993 100 100
MOD D#4989 100 100
MOD D#4991/8104 100 100
MOD D#4992 100 100
MOD D#4994/8105 100 100
Associated Terminal Arresters 100 100
Associated Line PTs 100 100
Malin No. 1 line terminal
-------------------------
Breaker D#4996 100 100
Exhibit F, Page 10 of 10
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
% APPLICABLE TO
% BPA OWNED PNW AC INTERTIE
----------- ---------------
MOD D#4995 100 100
MOD D#4997 100 100
Associated Terminal Arresters 100 100
Associated Line PTs 100 100
Olinda No. 1 line terminal
--------------------------
Breaker D#4977 100 100
Breaker D#4980 100 100
MOD D#4976 100 100
MOD D#4978 100 100
MOD D#4979 100 100
MOD D#4981 100 100
Associated Terminal Arresters 100 100
Associated Line PTs (2 sets) 100 100
North Main Bus 500 kV PTs 100 100
-------------------------
South Main Bus 500 kV PTs 100 100
Station General
15. CHIEF JOSEPH SUBSTATION (Dispatch 100 100
one-line diagram No. 124313)
230kV, 1400 MW Braking Resistor
-------------------------------
Includes breaker dispatch No. A-594,
a high speed vacuum switch and one 230 kV
isolating switch in Bay 12
-----------------------------
(1) Station General will be allocated to each substation according to
Bonneville's standard methodology.
(2) Each substation includes associated relays.
Exhibit G, Page 1 of 1
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
CAPACITY OWNERS
CAPACITY CAPACITY
CONTRACT OWNERSHIP OWNERSHIP
CAPACITY OWNER NUMBER SHARE (MW) PERCENTAGE
PNGC DE-MS79-94BP94523 50 1.4
Puget DE-MS79-94BP94521 400 11.6
Seattle DE-MS79-94BP94522 160 4.6
Snohomish DE-MS79-94BP94525 42 1.2
Tacoma DE-MS79-94BP94524 41 1.1
PNGC: Pacific Northwest Generating Cooperative
Puget: Puget Sound Power & Light Company
Seattle: City of Seattle, City Light Department
Snohomish: Public Utility District No. 1 of Snohomish County
Tacoma: Tacoma Public Utilities
Exhibit H, Page 119 of
6
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
Provisions Required by Statute or Executive Order
1. Contract Work Hours and Safety Standards Act (40 U.S.C. & 327, et seq.).
-----------------------------------------------------------------------
(a) Overtime Requirements.
---------------------
Puget, contracting for any part of the contract work which may require
or involve the employment of laborers or mechanics, shall not require or
permit any such laborers or mechanics in any workweek in which the
individual is employed on such work to work in excess of 40 hours in
such workweek unless such laborer or mechanic receives compensation at a
rate not less than 1-1/2 times the basic rate of pay for all hours
worked in excess of 40 hours in such workweek.
(b) Violation: liability for unpaid wages; liquidated damages.
----------------------------------------------------------
In the event of any violation of the provisions set forth in section 1
of this Exhibit H, Puget and any subcontractor responsible therefore
shall be liable for the unpaid wages. In addition, Puget and such
subcontractor shall be liable to the United States for liquidated
damages. Such liquidated damages shall be computed with respect to each
individual laborer or mechanic employed in violation of the provisions
set forth in section 1 of this Agreement in the sum of $10.00 for each
calendar day on which such individual was required or permitted to work
in excess of the standard workweek of 40 hours without payment of the
overtime wages required by provision set forth in section 1 of this
Exhibit.
(c) Withholding for unpaid wages and liquidated damages.
---------------------------------------------------
The person designated in writing by Bonneville's Administrator with the
Authority to enter into, administer, modify, suspend or terminate this
Exhibit, make related determinations and findings and bind Bonneville
only to the extent of delegated authority shall upon his or her own
action or upon written request of an authorized representative of the
Department of Labor withhold or cause to be withheld, from any moneys
payable on account of work performed by Puget or its subcontractor, if
any, under any such contract or any other federal contract subject to
the Contract Work Hours and Safety Standards Act which is held by the
same prime contractor, such sums as may be determined to be necessary to
satisfy any liabilities of Puget or such subcontractor for unpaid wages
and liquidated damages as provided in section 2 of this Exhibit.
2. Convict Labor (Exec. Order No. 11755, Dec. 29, 1979).
----------------------------------------------------
In connection with the performance or work under this Agreement, Puget
and any subcontractor, if any agrees not to employ any person undergoing
sentence of imprisonment except as otherwise provided by law.
Exhibit H, Page 2 of 6
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
3. Equal Opportunity (Exec. Order No. 11246, Sep. 24, 1965).
--------------------------------------------------------
(a) If , during any 12-month period (including the 12 months preceding
the award of this contract), Puget has been or is awarded nonexempt
federal contracts and/or subcontracts that have an aggregate value in
excess of $25,000.00, Puget shall comply with sections 3(b)(1) through
3(b)(11) below. Upon request, Puget shall provide information necessary
to determine the applicability of this clause.
(b) During performance of this Agreement, Puget agrees as follows:
(1) Puget shall not discriminate against any employee or applicant
for employment because of race, color, religion, sex or national
origin.
(2) Puget shall take affirmative action to ensure that applicants
are employed, and that employees are treated during employment,
without regard to their race, color, religion, sex or national
origin. Such action shall include, but not be limited to:
(1) employment; (2) upgrading; (3) demotion; (4) transfer;
(5) recruitment or recruitment advertising; (6) layoff or
termination; (7) rates of pay or other forms of compensation; and
(8) selection for training, including apprenticeship.
(3) Puget shall post in conspicuous places, available to employees
and applicants for employment, the notices that explain this
clause, such notices to be provided by the person designated in
writing by Bonneville's Administrator with the authority to enter
into, administer, modify, suspend or terminate this Agreement, make
related determinations and findings and bind Bonneville only to the
extent of delegated authority (Contracting Officer).
(4) Puget shall, in all solicitations or advertisements for
employees placed by or on behalf of Puget, state that all qualified
applicants will receive consideration for employment without regard
to race, color, religion, sex or national origin.
(5) Puget shall send, to each labor union or representative or of
workers with which it has a collective bargaining agreement or
other contract or understanding, the notice provided by the
Contracting Officer advising the labor union or workers'
representative of Puget's commitments under this clause, and post
copies of the notice in conspicuous places available to employees
and applicants for employment.
(6) Puget shall comply with Executive Order No. 11246,
Sep. 24, 1965 (30 Fed. Reg. 12319), as amended, and the rules,
regulations and orders of the Secretary of Labor.
(7) Puget shall furnish to Bonneville all information required by
Executive Order No. 11246, as amended, and by the rules,
regulations and orders of the Secretary of Labor. Standard Form
Exhibit H, Page 3 of 6
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
100 (EEO-1), or any successor form, is the prescribed form to be
filed within 30 days following the award of this contract, unless
filed within 12 months preceding the date of the award of this
contract.
(8) Puget shall permit access to its books, records and accounts
by Bonneville or the Office of Federal Contract Compliance Programs
(OFCCP) for purpose of investigation to ascertain Puget's
compliance with such rules, regulations and orders.
(9) If the OFCCP determines that Puget is not in compliance with
this clause or any rule, regulation or order of the Secretary of
Labor, this Agreement may be canceled, terminated, or suspended in
whole or in part and Puget may be declared ineligible for further
Government contracts, under the procedures authorized in Executive
Order No. 11246, as amended. In addition, sanctions may be imposed
and remedies invoked against Puget as provided in Executive Order
No. 11246, as amended, the rules, regulations and orders of the
Secretary of Labor, or as otherwise provided by law.
(10) Puget shall include the terms and conditions of sections
3(b)(1) through 3(b)(11) of this Exhibit in every subcontract or
purchase order that is not exempted by the rules, regulations, or
orders of the Secretary of Labor issued under Executive Order No.
11246, as amended, so that these terms and conditions will be
binding upon each subcontractor or vendor.
(11) Puget shall take such action with respect to any subcontract
or purchase order as may direct as means of enforcing these terms
and conditions, including sanctions for noncompliance: Provided,
that if Puget becomes involved in, or is threatened with,
litigation with a subcontractor or vendor as a result of any
direction, Puget may request the Government to enter into the
litigation to protect the interest of the United States.
(c) Notwithstanding any other clause in this Agreement, disputes
relative to this clause will be governed by the procedures in 41 CFR
66-1.1.
4. Certification of Non-segregated Facilities (48 CFR Section 22.810).
------------------------------------------------------------------
(a) Puget certifies that it does not and will not maintain or provide
for employees any segregated facilities at any of its establishments and
that it does not and will not permit its employees to perform their
services at any location under its control where segregated facilities
are maintained. Puget agrees that a breach of this certification is a
violation of section 3 (the Equal Opportunities Clause) of this Exhibit.
(b) Puget agrees that it will (1) obtain identical certifications from
proposed subcontractors prior to the award of subcontracts exceeding
$10,000.00 which are not exempt from the provisions of the Equal
Exhibit H, Page 4 of 6
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
Opportunity Clause; (2) retain such certifications in its files (3)
forward the following notice to such proposed subcontractors,
except where the proposed subcontractors have submitted identical
certifications of specific time periods:
"Notice to Prospective Subcontractors of Requirement for
Certifications of Non-segregated Facilities.
"A Certification of Non-segregated Facilities must be submitted
prior to the award of a subcontract under which the subcontractor
will be subject to the Equal Opportunity clause. This
certification may be submitted either for each subcontract or for
all subcontracts during a period (i.e., quarterly, semiannually or
annually)."
5. Officials Not to Benefit (41 U.S.C. Section 22).
-----------------------------------------------
No member of or delegate to Congress, or resident commissioner, shall be
admitted to any share or part of this Agreement or to any benefit
arising from it. However, this clause does not apply to this Agreement
to the extent that this Agreement is made with a corporation for the
corporation's general benefit.
6. Bonneville's Obligations Not General Obligations of the United States
---------------------------------------------------------------------
(16 U.S.C. Section 839(j)).
-------------------------
None of the offerings of obligations, or promotional materials for such
obligations, which may be offered by Puget to fund its activities
pursuant to this Agreement, shall be construed to be, general
obligations of the United States, nor are such obligations intended to
be or are they secured by the full faith and credit of the United
States.
7. Small Business Act (15 U.S.C. Sections 631 and 637).
---------------------------------------------------
(a) It is the policy of the Government that small business concerns
owned and controlled by socially and economically disadvantaged
individuals shall have the maximum practicable opportunity to
participate in the performance of contracts let by any federal agency.
(b) Puget hereby agrees to carry out the policy set forth in 7(a) in
awarding subcontracts to the fullest extent consistent with the
efficient performance of this Agreement. Puget further agrees to
cooperate on any studies or surveys as may be conducted by the United
States Small Business Administration or Bonneville as may be necessary
to determine the extent of Puget's compliance with this clause.
(c) As used in this agreement the term "small business concern" shall
mean a small business as defined in section 3 of Small Business Act
Exhibit H, Page 5 of 5
Exhibit H, Page 5 0f 6
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
(15 U.S.C. Section 632) and relevant regulations promulgated pursuant
thereto. The term "small business concern owned and controlled by
socially and economically disadvantaged individuals" shall mean a small
business concern:
(1) which is at least 51 percent owned by one or more socially
disadvantaged individuals; or, in the case of any publicly owned
business, at least 51 percent of the stock of which is owned by one
or more socially or economically disadvantaged individuals; and
(2) whose management and daily business operations are controlled
by one or more such individuals.
Puget shall presume that socially and economically disadvantaged
individuals include Black Americans, Hispanic Americans, Native
Americans, Asian Pacific Americans and other minorities, or any
other individual found to be disadvantaged by the United States
Small Business Administration pursuant to section 8(a) of the Small
Business Act.
(d) Puget acting in good faith may rely on written representations by
its subcontractor regarding its status as either a small business
concern or a small business concern owned and controlled by socially and
economically disadvantaged individuals.
8. Other Statutes, Executive Orders and Regulations.
------------------------------------------------
(a) Puget agrees to comply with the following statutes, executive
orders and regulations to the extent applicable:
(1) False Claims Act, 31 U.S.C. Section 3729, et seq. Whoever
makes or presents to any person or officer in the civil military or
naval service of the United States, or to any department or agency
thereof, any claim upon or against the United States, or any
department or agency thereof, knowing such claim to be false,
fictitious or fraudulent, shall be fined not more than $10,000.00
or imprisoned not more than 5 years, or both;
(2) Rehabilitation Act of 1973, 29 U.S.C. Section 793, as amended,
Executive Order No. 11758, Jan. 15, 1974, and the regulations of
the Secretary of Labor, 41 CFR Part 60-250, et seq., which concern
affirmative action for handicapped workers;
(3) Vietnam Era Veterans Readjustment Assistance Act of 1972,
38 U.S.C. Sections 101, 102, 240, 241, 1502, 1504, 1507, as
amended, and the clauses contained in 41 CFR Part 60-250, et seq.,
which concern affirmative action for disabled veterans and veterans
of the Vietnam Era;
(4) Executive Order No. 11625, Oct. 13, 1971, and implementing
regulations which concern utilization of small disadvantaged
business concerns;
Exhibit H, Page 6 of 6
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
(5) Anti-Kickback Act, 41 U.S.C. Section 51, et seq.; and
(6) Privacy Act of 1974, 5 U.S.C. Section 552a
(b) Puget agrees to comply with requirements deemed necessary by
Bonneville in order to implement Bonneville's obligations under the
National Historic Preservation Act of 1966, U.S.C. Section 470, et seq.
Exhibit I, Page 1 of 15
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
BONNEVILLE'S PNW AC INTERTIE COSTS
All costs in sections I through VIII of this Exhibit I shall be subject to
the following provisions:
PURPOSE
- -------
Bonneville shall determine and calculate Operations Costs, Maintenance Costs,
Replacement Costs and Reinforcement Costs, General Plant Costs, Other Costs,
Contracts and Rates Costs, Power Scheduling Costs, and End of Term Costs with
respect to Bonneville's PNW AC Intertie in accordance with this Exhibit I.
None of Operations Costs, Maintenance Costs, Replacement Costs and
Reinforcement Costs, General Plant Costs, Other Costs, Contracts and Rates
Costs, and End of Term Costs (each of the foregoing for purposes of this
sentence, a Cost) shall include any other Cost.
SOURCE OF INFORMATION AND COSTS
- -------------------------------
Bonneville shall forecast in accordance with this Exhibit I the costs
reflected in any Operating Plan pursuant to Schedules A through H of this
Exhibit using the most detailed information available to Bonneville from its
budget process at the time the forecast is made. Bonneville shall determine
the actual costs reflected in any Operating Plan pursuant to Schedules A
through H, using Bonneville's then existing accounting system in accordance
with this Exhibit I. All costs reflected in Schedules A through H shall be
net of credit.
Bonneville shall determine its overall overhead and overall indirect costs.
A portion of Bonneville's overall overhead and indirect costs shall be
allocated to such total system operations costs (pursuant to section I
below), total system maintenance costs (pursuant to section II below), total
capital costs (pursuant to sections III and IV below), Other Costs (pursuant
to section V below), Contracts and Rates Costs (pursuant to section VI
below), Power Scheduling Costs (pursuant to section VII below), and End of
Term Costs (pursuant to section VIII below) using Bonneville's normal
allocation or distribution methodologies for such costs, as such
methodologies may be changed by Bonneville from time to time. Such
allocations or distribution methodologies shall not be required to meet any
stricter standard of benefit to Bonneville's PNW AC Intertie than with
respect to other transmission facilities.
Bonneville shall record its costs into its accounting systems in accordance
with generally accepted accounting principles. For purposes of this
Agreement, "generally accepted accounting principles" means the common set of
accounting concepts, standards, and procedures that are adopted by entities
(such as the utility industry) for purposes of financial statement
disclosure.
Whenever Bonneville alters its accounting system or methods to permit costs
referred to in this Exhibit I, which were previously allocated to functions
Exhibit I, Page 2 of 15
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
and activities, to be directly assigned to function and activities, then in
that event Puget and Bonneville shall, in concert with the Capacity Owners
other than Puget, in good faith negotiate revisions to this Exhibit I to
include such directly assigned costs.
COSTS
- -----
I. Operations Costs
----------------
A. Operations Costs - Allocation Factor
The allocation factor (Schedule A, line 3) used to determine the
Allocated Direct Cost of Operations Cost, Indirect Cost of Operations
Cost, and Overhead Cost of Operations Cost is the ratio of major
facility units (MFUs) of Bonneville's PNW AC Intertie operated by
Bonneville to MFUs of the Federal Columbia River Transmission System.
An MFU (Schedule A, lines 1 and 2) is any of the following major
pieces of power system equipment which, at any given time, is
installed on and is a part of the Federal Columbia River Transmission
System: substation switchgear (such as power circuit breakers;
potential devices; disconnects, load interrupters, hot-stick operated
bus links; switching devices, circuit switchers, ground switches; and
switchyard equipment terminals); protective equipment (such as
grounding devices; reactors; arrestors and resistors; voltage
regulators; engine generators and motor generators; and high voltage
fuses); transformation equipment (such as power transformers; diesel
generators; grounding transformers; regulators and shunt reactors;
synchronous condensers; and shunt or series capacitors); station
equipment (such as switchyard lighting, batteries and chargers, air
compressors, station service equipment, and lightening arrestors);
instruments, control, and supervisory equipment (such as switchboards,
instruments, and control panels; relay panels, transfer trip, and
single-pole relaying; and oscillographs; fault detectors and locators;
sequential events recorders, supervisory control, and data acquisition
equipment; and indicating meters, instruments, and loggers); and
equipment specific to direct current and static var compensator
stations (such as mercury arc valves; thyristor systems; air handling
packages; water control packages; harmonic filtering systems; motor
control centers, such as fans, pumps, and dampening resistors; and
valve damping resistors); or devices that perform similar types of
functions.
Once each fiscal year, Bonneville shall count the number of MFUs on
Bonneville's PNW AC Intertie (exclusive of facilities operated by
others) (Schedule A, line 1) and the number of MFUs on the Federal
Columbia River Transmission System (Schedule A, line 2). In
calculating the forecast Allocated Direct Cost, Indirect Cost, and
Overhead Cost components of Operations Costs, Bonneville shall use the
most recent MFU count available at the time of such calculation in
Exhibit I, Page 3 of 15
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
developing its initial Operating Plan for a given fiscal year. For
each Operating Plan which is for the same fiscal year, Bonneville
shall use the same MFU count in calculating the forecast and actual
Allocated Direct Cost, Indirect Cost, and Overhead Cost components of
Operations Costs.
B. Operations Costs - Operations Functionalization Factor
For each Operating Plan, Bonneville's total system operations direct
cost, indirect cost and overhead cost (Schedule A, lines 7, 9, and 11)
shall be adjusted by an operations functionalization factor
(Schedule A, line 6) so that Capacity Owners pay only transmission-
related system operations costs. The operations functionalization
factor shall be based on a ratio of costs from Bonneville's general
rate case most recently approved by FERC on an interim basis. Using
the costs developed for the last year of the rate period for which
Bonneville has developed rates, the operations functionalization
factor shall be the ratio of (a) Bonneville's total system operations
cost functionalized to transmission (Schedule A, line 4) over
(b) Bonneville's total system operations cost (Schedule A, line 5).
For each Operating Plan, Bonneville shall use the same
functionalization factor in calculating the forecast and actual
Allocated Direct Cost, Indirect Cost, and Overhead Cost components of
Operations Costs.
C. Operations Costs - Allocated Direct Costs
For each Operating Plan, Bonneville shall allocate its total system
operations direct costs as set forth in Schedule A, lines 7 and 8, to
determine Allocated Direct Costs of Operations Cost (Schedule A, line
8).
Schedule A, line 7, shall reflect Bonneville's total system operations
direct costs for a fiscal year. Bonneville's total system operations
direct costs for a fiscal year shall include all system operations
expenses for such fiscal year for any of the following: salaries,
wages, employee benefits, overtime pay, travel, service contracts,
consulting contracts, materials, spare parts, tools, direct support
services (including equipment use activities, general shops
activities, and heavy mobile equipment maintenance), and other
expenses, each of which being incurred by Bonneville in connection
with the performance of any of the following activities: substation
operations (which provides for, among other things, making equipment
adjustments to maintain loads and voltages within acceptable limits,
switching to de-energize lines and equipment during maintenance
outages, isolating damaged equipment, restoring service to customers,
visually inspecting equipment, and reading meters that record line and
equipment loading and voltages), power system control and dispatching
(which provides for, among other things, central dispatching, control,
Exhibit I, Page 4 of 15
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
and monitoring of the electric operation of the Federal transmission
system; load, frequency, and voltage control of Federal generating
plants; the operating of the system control and data computers at the
Dittmer and Eastern Control Centers; and modification and maintenance
of the operation-related computers), and operations standards and
engineering (which provides for, among other things, analyzing system
loads, voltage levels, outage information, stability levels, and other
data; making policy recommendations for system operations; planning
operations' practices, restoration plans and disturbance ports;
development of control center requirements for centralized automation
of substations and generation; and Bonneville's participation with
other utilities in developing utility operating standards and guides);
and other system operations activities undertaken by Bonneville that
are consistent with system operations activities similar to the above-
listed activities undertaken by utilities in the Western Systems
Coordinating Council.
Schedule A, line 8, shall reflect Allocated Direct Cost of Operations
Cost.
D. Operations Costs - Indirect Costs
For each Operating Plan, Bonneville shall allocate its total system
operations indirect costs as set forth in Schedule A, lines 9 and 10,
to determine Indirect Costs of Operations Costs.
Schedule A, line 9, shall reflect Bonneville's total system operations
indirect costs for a fiscal year. Bonneville's total system
operations indirect costs for a fiscal year shall include all system
operations indirect expenses for such fiscal year for any of the
following: salaries, wages, employee benefits, overtime pay, travel,
service contracts, consulting contracts, materials, tools, direct
support services (including equipment use activities, general shops
activities, and heavy mobile equipment maintenance), and other
expenses, each of which being incurred by Bonneville in connection
with the performance of any of the following activities: general
supervision and management, office support, planning, budgeting,
training, direction of facilities' operation, and other system
operations activities undertaken by Bonneville that are consistent
with system operations activities similar to the above-listed
activities undertaken by utilities in the Western Systems Coordinating
Council.
Schedule A, line 10, shall reflect Indirect Cost of Operations Cost.
Exhibit I, Page 5 of 15
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
E. Operations Costs - Overhead Costs
For each Operating Plan, Bonneville shall allocate its total system
operations overhead costs as set forth in Schedule A, lines 11 and 12,
to determine Overhead Costs of Operations Costs.
Schedule A, line 11, shall reflect Bonneville's total system
operations overhead costs for a fiscal year. Bonneville's total
system operations overhead costs for a fiscal year shall include all
system operations overhead expenses for such fiscal year for any of
the following: salaries, wages, employee benefits, overtime pay,
travel, service contracts, consulting contracts, materials, spare
parts, and other expenses, each of which being incurred by Bonneville
in connection with any of the following activities and services of
Bonneville: (a) support services (including services with respect to
mainframe computers, microcomputers, laboratories, building
management, materials and procurement, Electric Power Research
Institute, fixed-wing aircraft, helicopter, tools, and work
equipment); (b) general and administrative activities (including
general and administrative activities with respect to the office of
the Administrator, the Washington DC office, and the offices of:
contracts and property management; fish and wildlife; equal employment
opportunity; information resources; environment; internal audit;
external affairs; general counsel; quality improvement; planning
council liaison; financial management; power sales; energy resources;
management services; area offices; operations, maintenance, and
construction; and engineering); and (c) other system operations
overhead activities undertaken by Bonneville that are consistent with
system operations activities similar to the above-listed activities
undertaken by utilities in the Western System Coordinating Council.
Schedule A, line 12, shall reflect Overhead Cost of Operations Cost.
Schedule A, line 13, shall reflect Operations Cost.
II. Maintenance Costs
-----------------
A. Maintenance Costs - Power System Control Maintenance
Functionalization Factor
For each Operating Plan, the Power System Control (PSC) maintenance
cost (Schedule B, line 4) shall be adjusted by a PSC maintenance
functionalization factor (Schedule B, line 3). PSC maintenance is the
testing, repair, and engineering support for Bonneville's
communications and control systems. The PSC maintenance
functionalization factor shall be based on a ratio of costs from
Bonneville's general rate case most recently approved by FERC on an
interim basis. Using costs for the last year of the rate period for
which Bonneville has developed rates, the PSC functionalization factor
Exhibit I, Page 6 of 15
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
shall be the ratio of (a) Bonneville's total PSC maintenance cost
functionalized to transmission from such general rate case
(Schedule B, line 1) over (b) Bonneville's total PSC maintenance cost
from such general rate case (Schedule B, line 2).
B. Maintenance Costs - Direct Costs
The Direct Costs of Maintenance Costs for a fiscal year (Schedule B,
line 7) shall be Bonneville's direct costs of maintaining Bonneville's
PNW AC Intertie and shall include all maintenance expenses for such
fiscal year for any of the following: salaries, wages, employee
benefits, overtime pay, travel, service contracts, consulting
contracts, materials, spare parts, transportation of spare parts,
tools, direct support services (including equipment use activities,
general shops activities, and heavy mobile equipment maintenance), and
other expenses, each of which being incurred by Bonneville in
connection with the performance of any of the following activities for
maintenance of Bonneville's PNW AC Intertie: transmission line
maintenance; substation maintenance; power system control maintenance;
nonelectric plant maintenance; pollution control and abatement; and
other system maintenance activities related to preventive and
corrective maintenance of Bonneville's PNW AC Intertie undertaken by
Bonneville that are consistent with activities similar to the above-
listed activities undertaken by utilities in the Western Systems
Coordinating Council.
With the exception of PSC maintenance costs, Bonneville shall
specifically identify the direct costs of maintaining Bonneville's PNW
AC Intertie (Schedule B, line 7). To determine PSC direct maintenance
cost for Bonneville's PNW AC Intertie (Schedule B, line 6), the total
PSC direct maintenance cost (Schedule B, line 4) shall be multiplied
by (a) the PSC maintenance functionalization factor (Schedule B, line
3) and (b) the MFU allocation factor (Schedule B, line 5) set forth in
Schedule A, line 3. The Direct Costs of Maintenance Costs (Schedule
B, line 8) shall be the sum of (a) PSC direct maintenance cost for
Bonneville's PNW AC Intertie (Schedule B, line 6) and (b) the direct
cost of maintaining Bonneville's PNW AC Intertie excluding PSC
maintenance cost (Schedule B, line 7).
C Maintenance Costs - Allocation Factor
The allocation factor (Schedule B, line 10) used to determine Indirect
Cost of Maintenance Cost and Overhead Cost of Maintenance Cost shall
be the ratio of the Direct Cost of Maintenance Cost (Schedule B, line
8) to Bonneville's total system maintenance direct cost (Schedule B,
line 9), as described below.
Schedule B, line 9, shall reflect Bonneville's total system
maintenance direct costs for a fiscal year. Bonneville's total system
maintenance direct costs for a fiscal year shall include all
Exhibit I, Page 7 of 15
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
maintenance expenses for such fiscal year for any of the following:
salaries, wages, employee benefits, overtime pay, travel, service
contracts, consulting contracts, materials, spare parts,
transportation of spare parts, tools, direct support services
(including equipment use activities, general shops activities, and
heavy mobile equipment maintenance), and other expenses, each of which
being incurred by Bonneville in connection with the performance of any
of the following activities: transmission line maintenance;
substation maintenance; power system control maintenance; nonelectric
plant maintenance; establishing, monitoring, and updating system
maintenance standards, policies, and procedures; pollution control and
abatement; and other system maintenance activities related to
preventive and corrective maintenance of the Federal Columbia River
Transmission System undertaken by Bonneville that are consistent with
system maintenance activities similar to the above-listed activities
undertaken by utilities in the Western Systems Coordinating Council.
Schedule B, line 10, shall reflect the percentage which shall be used
to allocate Bonneville's total system maintenance indirect cost and
total system maintenance overhead cost to Bonneville's PNW AC
Intertie.
D. Maintenance Costs - Indirect Costs
For each Operating Plan, Bonneville shall allocate its total system
maintenance indirect costs as set forth in Schedule B, lines 11 and
12, to determine Indirect Costs of Maintenance Costs.
Schedule B, line 11, shall reflect Bonneville's total system
maintenance indirect costs for a fiscal year. Bonneville's total
system maintenance indirect costs for a fiscal year shall include all
system maintenance indirect expenses for such fiscal year for any of
the following: salaries, wages, employee benefits, overtime pay,
travel, service contracts, consulting contracts, materials, spare
parts, administration of spare parts, transportation of spare parts,
tools, tools procurement and administration, direct support services
(including equipment use activities, general shops activities, and
heavy mobile equipment maintenance), and other expenses, each of which
being incurred by Bonneville in connection with the performance any of
the following activities: supervision and management, office support,
technical analyses, engineering studies, program analyses, planning,
budgeting, training, and other system maintenance activities
undertaken by Bonneville that are consistent with system maintenance
activities similar to the above-listed activities undertaken by
utilities in the Western Systems Coordinating Council.
Schedule B, line 12, shall reflect Indirect Cost of Maintenance Cost.
Exhibit I, Page 8 of 15
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
E. Maintenance Costs - Overhead Costs
For each Operating Plan, Bonneville shall allocate its total system
maintenance overhead costs as set forth in Schedule B, lines 13 and
14, to determine Overhead Costs of Maintenance Costs.
Schedule B, line 13, shall reflect Bonneville's total system
maintenance overhead costs for a fiscal year. Bonneville's total
system maintenance overhead costs for a fiscal year shall include all
system maintenance overhead expenses for such fiscal year for any of
the following: salaries, wages, employee benefits, overtime pay,
travel, service contracts, consulting contracts, materials, spare
parts, and other expenses, each of which being incurred by Bonneville
in connection with any of the following activities and services of
Bonneville: (a) support services (including services with respect to
mainframe computers, microcomputers, laboratories, building
management, materials and procurement, Electric Power Research
Institute, fixed-wing aircraft, helicopter, tools, and work
equipment); (b) general and administrative activities (including
general and administrative activities with respect to the office of
the Administrator, the Washington DC office, and the offices of:
contracts and property management; fish and wildlife; equal employment
opportunity; information resources; environment; internal audit;
external affairs; general counsel; quality improvement; planning
council liaison; financial management; power sales; energy resources;
management services; area offices; operations, maintenance, and
construction; and engineering); and (c) other system maintenance
overhead activities undertaken by Bonneville that are consistent with
system maintenance activities similar to the above-listed activities
undertaken by utilities in the Western System Coordinating Council.
Schedule B, line 14, shall reflect Overhead Cost of Maintenance Cost.
Schedule B, line 15, shall reflect Maintenance Cost.
III. Replacement Costs and Reinforcement Costs
-----------------------------------------
A. Replacement Costs and Reinforcement Costs - Direct Costs
The Direct Costs for Replacements and Reinforcements for a fiscal year
(Schedule C, line 1) shall be Bonneville's direct capital costs for
Replacements and Reinforcements for such fiscal year and shall include
all costs for any of the following: salaries, wages, employee
benefits, overtime pay, travel, service contracts, consulting
contracts, land, materials and equipment, spare parts, administration
of spare parts, transportation of spare parts, tools, tools
procurement and administration, direct support services (including
equipment use activities, general shops activities, and heavy mobile
equipment maintenance), and other costs, each of which being incurred
by Bonneville in connection with the performance of the following
Exhibit I, Page 9 of 15
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
activities: planning, environmental analyses and mitigation, survey,
design, land, materials and equipment, turnkey contracts, contract
construction, force account construction, and other reinforcement and
replacement activities undertaken by Bonneville that are consistent
with reinforcement and replacement activities similar to the above-
listed activities undertaken by utilities in the Western Systems
Coordinating Council. The Direct Costs for any Replacement or
Reinforcement for a fiscal year shall also include the costs of
removal and any salvage credits with respect to any PNW AC Intertie
facility removed on account of such Replacement or Reinforcement.
B. Replacement Costs and Reinforcement Costs - Indirect Costs and
Overhead Costs
For each Replacement and Reinforcement project, the Indirect Costs and
Overhead Costs for Replacements and Reinforcements (Schedule C, line
2) shall be allocated or distributed to such Replacements and
Reinforcements using the indirect and overhead allocation and
distribution methodologies employed by Bonneville to allocate and
distribute indirect and overhead costs to all of Bonneville's other
capital projects during the time the Replacements and Reinforcements
are under construction. Schedule C, line 2, shall reflect the
Indirect Costs and Overhead Costs of Replacements and Reinforcements.
Indirect Costs of Replacements and Reinforcements shall include all
costs for any of the following: salaries, wages, employee benefits,
overtime pay, travel expenses, service contracts, consulting
contracts, administration of materials, tools, tools procurement and
administration, direct support services (including equipment use
activities, general shops activities, and heavy mobile equipment
maintenance), and other costs, each of which being incurred by
Bonneville in connection with the performance of any of the following
activities: supervision, technical analyses, engineering studies,
program analyses, planning, budgeting, training, and other
reinforcement and replacement activities undertaken by Bonneville that
are consistent with reinforcement and replacement activities similar
to the above-listed activities undertaken by utilities in the Western
Systems Coordinating Council.
Overhead Costs for Replacements and Reinforcements shall include all
costs for any of the following: salaries, wages, employee benefits,
overtime pay, travel, service contracts, consulting contracts,
materials, spare parts, and other costs, each of which being which
being incurred by Bonneville in connection with any of the following
activities and services of Bonneville: (a) support services
(including services with respect to mainframe computers,
microcomputers, laboratories, building management, materials and
procurement, Electric Power Research Institute, fixed-wing aircraft,
helicopter, tools, and work equipment); (b) general and administrative
activities (including general and administrative activities with
Exhibit I, Page 10 of 15
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
respect to the office of the Administrator, the Washington DC office,
and the offices of: contracts and property management; fish and
wildlife; equal employment opportunity; information resources;
environment; internal audit; external affairs; general counsel;
quality improvement; planning council liaison; financial management;
power sales; energy resources; management services; area offices;
operations, maintenance, and construction; and engineering); and (c)
other replacement and reinforcement activities undertaken by
Bonneville that are consistent with replacement and reinforcement
activities similar to the above-listed activities undertaken by
utilities in the Western System Coordinating Council.
C. Replacement Costs and Reinforcement Costs - Allowance for Funds
Used During Construction (AFUDC)
Schedule C, line 3, shall reflect AFUDC for Replacements and
Reinforcements. At the beginning of each fiscal year, Bonneville
shall calculate the AFUDC rate for such fiscal year. Bonneville shall
apply such AFUDC rate monthly to the costs in accounts for
construction work in progress for Replacements and Reinforcements.
D. Replacement Costs and Reinforcement Costs - Interest
Schedule C, line 4, shall reflect the interest cost payable by Puget
pursuant to this Agreement with respect to any Replacement or
Reinforcement. Such interest cost for any Replacement or any
Reinforcement shall be simple interest calculated at a rate equal to
the weighted average interest rate on Bonneville's then outstanding
bonds or other debt instruments and such interest shall accrue from
the date Bonneville stops accruing AFUDC (approximately the date the
work order for such Replacement or such Reinforcement is closed) with
respect to such Replacement or such Reinforcement to the due date of
the monthly power bill containing the charge for such Replacement or
such Reinforcement.
IV. General Plant Costs
-------------------
For each Operating Plan, Bonneville shall adjust, amortize, and
allocate Bonneville's total general plant investment (as described
below) and Bonneville's Dittmer control equipment investment as set
forth in Schedule D, lines 1 through 11, to determine General Plant
Cost.
Schedule D, line 1, shall reflect for a fiscal year Bonneville's total
cumulative general plant investment. Bonneville's total general plant
investment shall include Bonneville's investments in any of the following:
land-general plant, structures/improvements-general plant, office furniture
and equipment, transportation equipment, stores equipment, tools/shop/garage
equipment, laboratory equipment, power operated equipment, communication
equipment, miscellaneous equipment
Exhibit I, Page 11 of 15
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
(including equipment or apparatus used in Bonneville's utility
operations which are not includable in any other general plant
investment category), and other similar investment made by Bonneville
that is consistent with general plant investment made by utilities in
the Western Systems Coordinating Council.
Schedule D, line 2, shall reflect for a fiscal year Bonneville's
cumulative investment in Dittmer control equipment.
Schedule D, line 3, shall reflect Bonneville's total general plant
investment and Bonneville's Dittmer control equipment investment
functionalized to generation using the methodology for functionalizing
general plant as set forth in Bonneville's general rate case most
recently approved by FERC on an interim basis.
Schedule D, line 4, shall reflect any general plant investment
recovered from all Capacity Owners under the CO-94 rate as such
general plant investment is unitized by Bonneville; provided, however,
for the first two Operating Plans Bonneville shall estimate the amount
of the general plant investment included in the Initial Capacity
Ownership Price, which estimate shall be reflected in Schedule D, line
4, and Bonneville shall modify such Operating Plans by December 1995,
or as soon as practicable thereafter, to reflect in Schedule D, line
4, the actual general plant investment included in the Adjusted
Capacity Ownership Price.
Schedule D, line 5, shall reflect any general plant investment
recovered from Capacity Owners pursuant to section 5 for Upgrades.
The agreements referred to in subsection 5(d) and subparagraph
5(e)(3)(B) shall specify the portion of costs of an Upgrade that will
be considered general plant investment.
Schedule D, line 6, shall reflect Bonneville's adjusted general plant
investment functionalized to transmission and shall be calculated by
adding line 1 and line 2, and from the sum of line 1 and line 2
subtracting line 3, line 4, and line 5.
Schedule D, line 7, shall reflect Bonneville's annual cost of
Bonneville's adjusted general plant investment functionalized to
transmission (Schedule D, line 6). Such annual cost shall be the sum
of the annual interest and amortization amounts for each category of
adjusted general plant investment. The annual interest and
amortization amounts for each category shall be calculated by using
the investment amounts for each such category, the weighted average
interest rate for all Bonneville then outstanding bonds, and the
average service lives for each such category from Bonneville's most
recent depreciation study. If Bonneville changes its practice of
financing general plant investment with bonds, the interest rate used
in the calculation referred to in the immediately preceding sentence
shall reflect the weighted average interest rate for all of
Bonneville's then outstanding debt instruments.
Exhibit I, Page 12 of 15
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
Schedule D, line 8, shall reflect for a fiscal year Bonneville's total
cumulative transmission plant-in-service investment (not including
general plant investment). Bonneville's total transmission plant-in-
service investment shall include Bonneville's investment in any of the
following items reflected as total transmission plant-in-service (not
including general plant investment) in the Segmentation Study (from
Bonneville's general rate case most recently approved by FERC on an
interim basis: land and land rights-transmission plant,
structures/improvements-transmission plant, station equipment, towers
and fixtures, poles and fixtures, overhead conductor, underground
conductor, roads and trails, and other transmission plant investment
made by Bonneville that is consistent with transmission plant
investments made by utilities in the Western Systems Coordinating
Council.
Schedule D, line 9, shall be the annual cost ratio of Bonneville's PNW
AC Intertie transmission-related general plant derived by dividing
Schedule D, line 7, by Schedule D, line 8.
Schedule D, line 10, shall reflect Bonneville's PNW AC Intertie
investment. Bonneville's PNW AC Intertie investment shall include
Bonneville's investment in any of the following items reflected as
Bonneville's PNW AC Intertie plant-in-service in the Segmentation
Study from Bonneville's general rate case most recently approved by
FERC on an interim basis (or the successor to the Segmentation Study,
as determined by Bonneville): land and land rights-transmission
plant, structures/improvements-transmission plant, station equipment,
towers and fixtures, poles and fixtures, overhead conductor,
underground conductor, roads and trails, and other transmission plant
investment made by Bonneville that is consistent with transmission
plant investments made by utilities in the Western Systems
Coordinating Council.
V. Other Costs
For each Operating Plan, Bonneville shall include Other Costs
associated with Bonneville's PNW AC Intertie for a fiscal year. Such
Other Costs (Schedule E, line 3) for a fiscal year shall include for
such fiscal year any of the following: (1) the costs of operation;
maintenance; capital replacements, reinforcements, additions,
betterments, renewals; or related costs which Bonneville is obligated
to pay pursuant to the Northwest Intertie Agreements or other
contracts referred to in subsection 8(b) of this Agreement; and (2)
costs paid by Bonneville including monetary judgments, settlements,
binding awards, non-contract penalties, contract penalties, liquidated
damages, or forfeiture costs, and Bonneville's costs related to such
monetary judgments, settlements, binding awards, non-contract
penalties, contract penalties, liquidated damages, or forfeiture costs
Exhibit I, Page 13 of 15
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
assessed against or incurred by Bonneville as a facilities owner of,
or the operator of, the PNW AC Intertie; provided, however, that Puget
shall not be obligated to pay a share of any such costs that are not
properly allocated to Bonneville's PNW AC Intertie.
Bonneville shall forecast its share of operations, maintenance,
capital, and related costs for activities that PacifiCorp performs on
Bonneville/PacifiCorp jointly-owned PNW AC Intertie facilities based
on forecasts received from PacifiCorp or on actual costs for the most
recent 12 consecutive month period prior to preparation of an
Operating Plan.
VI. Contracts and Rates Costs
-------------------------
A. Contracts and Rates Costs - Functionalization Factor
For each Operating Plan, Bonneville's total contracts and rates direct
costs, indirect costs, and overhead costs (Schedule F, lines 5, 6, and
7) shall be adjusted by a contracts and rates functionalization factor
(Schedule F, line 3). The contracts and rates functionalization
factor shall be based on a ratio of costs from Bonneville's general
rate case most recently approved by FERC on an interim basis. Using
costs developed for the last year of the rate period for which
Bonneville has developed rates, the contracts and rates
functionalization factor shall be the ratio of (a) Bonneville's total
transmission-related contracts and rates cost (Schedule F, line 1)
over (b) Bonneville's total contracts and rates cost (Schedule F, line
2). For each Operating Plan, Bonneville shall use the same
functionalization factor in calculating the forecast and actual
Contracts and Rates Cost.
B. Contracts and Rates Costs - Allocation Factor
The allocation factor (Schedule F, line 4) shall be the allocation
factor established in Schedule A, line 3.
C. Contracts and Rates Costs - Total Contracts and Rates Costs
Bonneville's total contracts and rates costs for a fiscal year
(Schedule F, line 8) shall include Bonneville's expenses (including
direct, indirect, and overhead costs) for such fiscal year for any of
the following: salaries, wages, employee benefits, overtime pay,
travel, service contracts, consulting contracts, materials, tools, and
direct support services (including equipment use activities, general
shops activities, and heavy mobile equipment maintenance), and other
expenses, each of which being incurred by Bonneville in connection
with the performance of the following activities: rate filings with
FERC, development of rates customers pay Bonneville for electric power
and for wheeling their own power on Bonneville's transmission system;
Exhibit I, Page 14 of 15
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
negotiation, administration, and coordination of contracts for power
sales, power exchanges, conservation, wheeling and resource services;
and analyzing, processing, and issuing all customer power bills; and
other activities undertaken by Bonneville that are consistent with
activities similar to the above-listed activities undertaken by
utilities in the Western Systems Coordinating Council.
Schedule F, line 9, shall reflect Contracts and Rates Cost.
VII. Power Scheduling Costs
----------------------
For each Operating Plan, Bonneville's total power scheduling direct
costs, indirect costs, and overhead costs (Schedule G, lines 5, 6, and
7) shall be adjusted by a power scheduling functionalization factor
(Schedule G, line 3). The power scheduling functionalization factor
shall be based on a ratio of costs from Bonneville's general rate case
most recently approved by FERC on an interim basis. Using costs
developed for the last year of the rate period for which Bonneville
has developed rates, the power scheduling functionalization factor
shall be the ratio of (a) Bonneville's total transmission-related
power scheduling cost (Schedule G, line 1) over (b) Bonneville's total
power scheduling cost (Schedule G, line 2). For each Operating Plan,
Bonneville shall use the same functionalization factor in calculating
the forecast and actual Power Scheduling Cost.
B. Power Scheduling Costs - Allocation Factor
The allocation factor (Schedule G, line 4) shall be the allocation
factor established in Schedule A, line 3.
C. Power Scheduling Costs - Total Power Scheduling Costs
Bonneville's total power scheduling costs for a fiscal year (Schedule
G, line 8) shall include Bonneville's expenses (including direct,
indirect, and overhead costs) for such fiscal year for any of the
following: salaries, wages, employee benefits, overtime pay, travel,
service contracts, consulting contracts, materials, tools, and direct
support services (including equipment use activities, general shops
activities, and heavy mobile equipment maintenance), and other
expenses, each of which being incurred by Bonneville in connection
with the performance of the following activities: scheduling and
marketing power to Bonneville customers and interconnected utilities,
forecasting the hourly power requirements of Bonneville customers and
the interchange of power with the region's interconnected electric
utilities and with utilities outside the region, scheduling power to
be generated at each Federal plant, weather and streamflow
forecasting, controlling the reservoirs, implementing the intertie
access policy, coordinating power production with the multi-purpose
operation of the Federal power system, seasonal load/resource
planning, developing current short-term operating plans, short-term
Exhibit I, Page 15 of 15
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
marketing of Bonneville's surplus firm power, exchanges, and nonfirm
energy, and other activities undertaken by Bonneville that are
consistent with activities similar to the above-listed activities
undertaken by utilities in the Western Systems Coordinating Council.
Schedule G, line 9, shall reflect Power Scheduling Cost.
VIII. End of Term Costs
-----------------
When all facilities of the PNW AC Intertie are determined, in
accordance with Northwest Intertie Agreements, to be no longer
operable, Bonneville shall include a forecast of all Bonneville's
costs associated with decommissioning the PNW AC Intertie and credits
resulting from such decommissioning in the Operating Plan for each
fiscal year that such End of Term Costs are to be incurred.
Bonneville's End of Term Costs for a fiscal year (Schedule H, line 4)
shall include Bonneville's costs (including direct, indirect, and
overhead costs) for such fiscal year for any of the following:
salaries, wages, employee benefits, overtime pay, travel, service
contracts, consulting contracts, materials, spare parts,
transportation of spare parts, tools, direct support services
(including equipment use activities, general shops activities, and
heavy mobile equipment maintenance), and other costs, each of which
being incurred by Bonneville in connection with the performance of any
of the following activities: decommissioning, razing structures,
disposal of debris, site restoration, meeting all requirements of
Federal, state, or local applicable law relating to the foregoing
activities, and other decommissioning activities undertaken by
Bonneville that are consistent with decommissioning activities similar
to the above-listed activities undertaken by utilities in the Western
Systems Coordinating Council.
Exhibit I, Schedule A
Page 1
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
Line
No.1 Forecast Actual Difference
SCHEDULE A FOR FY XXXX
I. Operations Costs
A. Allocation Factor
MFUs of Bonneville PNW AC
Intertie 1 ________
MFUs of the FCRTS 2 ________
Allocation factor 3 ________
(Line 1/Line2)
B. Operations
Functionalization Factor
Bonneville's total 4 ________
transmission-related
system operations cost
from rate case
Bonneville's total systems 5 ________
operations cost from rate
case
Operations functionalization 6 ________
factor (Line 4/Line5)
C. Allocated Direct Cost
Bonneville's total system 7 ________ ________ __________
Allocated Direct Cost of 8 ________ ________ __________
Operations Cost
(Line 3*Line 6*Line 7)
Exhibit I, Schedule A
Page 2
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
Line
No.1 Forecast Actual Difference
D. Indirect Cost
Bonneville's total system 9 ________ ________ __________
operations indirect cost
Indirect Cost of Operations Cost 10 ________ ________ __________
(Line 3*Line 6*Line 9)
E. Overhead Cost
Bonneville's total system 11 ________ ________ __________
operations overhead cost
Overhead Cost of Operations Cost 12 _________ ________ __________
(Line 3*Line 6*Line 11)
F. Operations Cost 13 _________ ________ __________
(Lines 8+10+12)
Exhibit I, Schedule B
Page 1
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
SCHEDULE B FOR FY XXXX
Line
No.1 Forecast Actual Difference
II. Maintenance Cost
A. Power System Control (PSC)
Maintenance Functionali-
zatio Factor
Bonneville's transmission- 1 ________
related PSC maintenance
cost from rate case
Bonneville's total PSC 2 ________
maintenance cost from
rate case
PSC maintenance 3 ________
functionalization factor
(Line1/Line2)
B. Direct Cost
Total PSC direct cost 4
cost
MFU Allocation Factor 5 ________
(Schedule A, line 3)
PSC direct maintenance 6 ________ ________ __________
cost for Bonneville's
PNW AC Intertie
(Line 4*Line 3*Line 5)
Bonneville's direct cost of 7 ________ ________ __________
maintaining Bonneville's
PNW AC Intertie excluding
PSC maintenance cost
Direct Cost of Maintenance 8 ________ ________ __________
Cost (Line 6+Line 7)
Exhibit I, Schedule B
Page 2
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
C. Allocation Factor
Bonneville's total system 9 ________ ________ __________
maintenance direct cost
Allocation factor for 10 ________ ________ __________
Indirect Cost and
Overhead Cost
(Line 8/Line9)
D. Indirect Cost
Bonneville's total 11 ________ ________ __________
system maintenance
indirect cost
Indirect Cost of 12 ________ ________ __________
Maintenance Cost
(Line 11*Line 10)
E. Overhead Cost
Bonneville's total system 13 ________ ________ __________
system maintenance
overhead cost
Overhead Cost of 14 ________ ________ __________
Maintenance Cost
(Line 13*Line 10)
F. Maintenance Cost 15 ________ ________ __________
(Lines 8+12+14)
Exhibit I, Schedule C
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
SCHEDULE C
Line
No.1 Forecast Actual Difference
III. Replacement Costs and
Reinforcement Costs
A. Direct Cost
Direct Costs of Replace- 1 ________ ________ _________
ments and Reinforcements
B. Indirect Costs and Overhead
Costs
Indirect Costs and Overhead 2 ________ ________ ________
Costs of Replacements
and Reinforcements
C. AFUDC
AFUDC of Replacements and 3 ________ ________ ________
Reinforcements
D. Interest
Interest Cost of Replacements 4 ________
and Reinforcements
E. Total Replacement Costs and 5 ________ ________ ________
Reinforcement Costs
(Lines 1+2+3+4)
Notes:
A separate Schedule C will be provided in the Operating Plan for each
Replacement and Reinforcement.
Forecasts of Replacement Costs and Reinforcement Costs will be provided;
Capacity Owners shall be billed for Replacements and Reinforcements
using actual cost pursuant to section 9(b)(2)(B).
Exhibit I, Schedule D
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
SCHEDULE D FOR FY XXXX
Line Allocated
No. Actual
IV. General Plant Cost
Bonneville's total general plant 1 __________
investment
Bonneville's Dittmer control 2 __________
equipment investment
General plant investment of lines 1 3 __________
and 2 functionalized to generation
General plant investment recovered 4 __________
from all Capacity Owners in Adjusted
Capacity Ownership Price and Revised
Adjusted Capacity Ownership Price
General plant investment recovered 5 __________
from Capacity Owners for Upgrades
Adjusted general plant investment 6 __________
functionalized to transmission
(Line 1 + Line 2 - Line 3 - Line 4
- Line 5)
BPA total annual cost of Line 6 7 __________
general plant investment
BPA total transmission plant-in- 8 __________
service investment (not including
general plant investment) from
Segmentation Study
ACR for Bonneville's PNW AC 9 __________
Intertie (Line 7/Line 8)
Bonneville's PNW AC Intertie 10 __________
Investment from Segmentation Study
General Plant Cost 11 __________
(Line 9*Line 10)
Exhibit I, Schedule E
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
SCHEDULE E FOR FY XXXX
Line
No.1 Forecast Actual Difference
V. Other Costs
A. PacifiCorp and related costs 1 ________ ______ __________
B. Other PNW AC Intertie costs 2 ________ ______ __________
C. Total Other Costs 3 ________ ______ __________
Exhibit I, Schedule F
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
SCHEDULE F FOR FY XXX
Line
No.1 Forecast Actual Difference
VI. Contracts and Rates Costs
A. Contracts and Rates
Functionalization Factor
Transmission-related 1 ________
contracts and rates cost
from rate case
Total contracts and rates 2 ________
cost from rate case
Contracts and rates cost 3 ________
functionalization factor
(Line 1/Line 2)
B. Allocation Factor
MFU allocation factor 4 ________
(Schedule A, line 3)
C. Total Contracts and
Rates Costs
Contracts and rates direct 5 ________ ________ __________
costs
Contracts and rates 6 ________ ________ __________
indirect costs
Contracts and rates overhead 7 ________ ________ __________
costs
Bonneville's total contracts 8 ________ ________ __________
and rates costs
(Line 5 + Line 6 + Line 7)
D. Contracts and Rates Cost 9 ________ _________ __________
(Line 8 * Line * Line 4)
Exhibit I, Schedule G
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
SCHEDULE G FOR FY XXXX
Line
No.1 Forecast Actual Difference
VII. Power Scheduling Costs
A. Power Scheduling
Functionalization Factor
Transmission-related power 1 ________
scheduling costs from rate
case
Total power scheduling cost 2 ________
from rate case
Power scheduling cost 3 ________
functionalization factor
(Line 1/Line 2)
B. Allocation Factor
MFU allocation factor 4 ________
(Schedule A, line 3)
C. Total Power Scheduling Costs
Power scheduling direct costs 5 ________ ________ _________
Power scheduling indirect costs 6 ________ ________ _________
Power scheduling overhead costs 7 ________ ________ _________
Bonneville's total power 8 ________ ________ _________
scheduling costs
(Line 5 + Line 6 + Line 7)
D. Power Scheduling Cost 9 ________ ________ _________
(Line 8 * Line 3 * Line 4)
Exhibit I, Schedule H
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the effective date of Exhibit B
SCHEDULE H FOR FY XXXX
Line
No.1 Forecast Actual Difference
VIII. End of Term Costs
A. Direct Cost
Direct Cost of End of Term 1 ________ ________ __________
Costs
B. Indirect Costs and Over-
head Costs
Indirect Costs and Overhead 2 ________ ________ __________
Costsof End of Term costs
C. Credits
Credits from decommissioning 3 ________ ________ __________
PNW AC Intertie facilities
D. End of Term Costs 4 ________ ________ __________
<Page
Exhibit J, Page 1 of 1
Contract No. DE-MS79-94BP94521
Puget Sound Power & Light Company
Effective on the Effective Date
Puget's Initial Transaction with California Utility
Name of parties: Puget/Pacific Gas & Electric Company
Terms of Contract: Variable
Date of Execution: October 25, 1991
Amount of Transaction (MW): 300 MW