Exhibit 10.3 As Executed
SYSTEM COORDINATION
AND
OPERATING AGREEMENT
Among
IES Utilities Inc.
Interstate Power Company
Wisconsin Power & Light Company
Alliant Services, Inc.
-April 11, 1997-
SYSTEM COORDINATION AND
OPERATING AGREEMENT
TABLE OF CONTENTS
Article I
Term of Agreement
Article II
Definitions
2.01 Agent
2.02 Agreement
2.03 Capacity Commitments
2.04 Capacity Commitment Charge
2.05 Central Control Center
2.06 Chief Executive Office (CEO)
2.07 Company and Companies
2.08 Company Capability
2.09 Company Demand
2.10 Company Hour Capability
2.11 Company Load Responsibility
2.12 Company Operating Capability
2.13 Company Operating Reserve
2.14 Company Peak Demand
2.15 Day
2.16 Economic Dispatch
2.17 Energy
2.18 Entitlement
2.19 Generating Unit
2.20 Hour
2.21 Intertransmission Facilities
2.22 Joint Facilities Plan
2.23 Joint Unit
2.24 Margin
2.25 Month
2.26 Net Plant Capability
2.27 Open Access Transmission Tariff
2.28 Operating Committee
2.29 Own Load
2.30 Parent Company
2.31 Planning Reserve Level
2.32 Pool Energy
2.33 Power
2.34 Prorated Reserve Level
2.35 Reserve Capacity (Company or System)
2.36 Seller's Incremental Energy Cost
2.37 System
2.38 System Capability
2.39 System Demand
2.40 System Load Responsibility
2.41 System Operating Capability
2.42 System Operating Reserve
2.43 System Peak Demand
2.44 Total Energy Cost
2.45 Transmission Services Organization
2.46 Variable Energy Cost
2.47 Year
Article III
Objectives
3.01 Purpose
Article IV
Agent
4.01 Responsibility of the Agent
4.02 Delegation and Acceptance of Authority
4.03 Reporting
4.04 Delegation to the Transmission Services Organization
4.05 Delegation to Services
Article V
Operating Committee
5.01 Operating Committee
Article VI
Operations
6.01 Planning and Authorization of Production Facilities
6.02 Planning Reserve Levels
6.03 Provision to Achieve Planning
6.04 Capacity Sales and Purchases and Reserve Shortfalls
6.05 Energy Exchanges Among Companies
6.06 Energy Exchange Pricing
6.07 Energy Exchanges with Non-Affiliated Utilities
Article VII
Transmission
7.01 Availability of Intertransmission Facilities
7.02 Availability of Direct Assignment Facilities
7.03 Transmission Service Revenue
7.04 Communications
7.05 Network Transmission Service Reservation
7.06 Point-to-Point Transmission Services
7.07 Ancillary Services
7.08 Intertransmission Facilities
7.09 Transmission Losses
Article VIII
Central Control Center
8.01 Central Control Center
8.02 Expenses
8.03 Communication and Other Facilities
Article IX
General
9.01 Regulatory Authorization
9.02 Effect on Other Agreements
9.03 Schedules
9.04 Measurements
9.05 Billings
9.06 Waivers
9.07 Successors and Assigns; No Third Party Beneficiary
9.08 Independent Contractors
9.09 Responsibility and Liability
9.10 Affiliate Transaction Pricing
Schedules
A Joint Unit
B Company Units
C Capacity Commitment Charge
D Payments and Receipts for Pool Energy
Exchanges Among the Companies
E Distribution of Margin for Off-System Energy Purchases
and Sales
F Distribution of Operating Expenses of the Central Control
Center
G Transmission Revenue Allocation
SYSTEM COORDINATION
AND
OPERATING AGREEMENT
Among
IES Utilities, Inc.
Interstate Power Company
Wisconsin Power & Light Company
Alliant Services, Inc.
THIS AGREEMENT is made and entered into this 11th day of
April 1998, by and among IES Utilities, Inc., hereinafter called
IES; Interstate Power Company, hereinafter called IPC; Wisconsin Power &
Light Company, hereinafter called WPL; and Alliant Services, Inc.,
hereinafter called Services; all of whose common stock is to be owned by
Interstate Energy Corporation d/b/a Alliant Corporation.
WHEREAS, IES, IPC, and WPL are the owners and operators of electric
generation, transmission, and distribution facilities with which they are
engaged in the business of generating, transmitting, and selling electric
Energy to the general public and to other electric utilities; and
WHEREAS, upon consummation of the merger transactions that will
establish them as subsidiaries of Interstate Energy Corporation; the
Companies can achieve a greater realization of economic benefits for their
customers through operation as a single integrated and centrally
dispatched system, and through a greater level of coordinated planning,
construction, operation and maintenance of their electric supply
facilities; and
WHEREAS, the foregoing benefits will be more economically achieved
and their attainment will be facilitated by having certain services
performed by an agent for the Companies; and
WHEREAS, the Companies believe that Services is qualified to perform
such services for them, as Agent.
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein, the parties hereto mutually agree as
follows:
ARTICLE I
TERM OF AGREEMENT
1.01 This Agreement shall become effective upon the
consummation of the merger transactions described in the Agreement and
Plan of Merger by and among WPL Holdings, Inc., IES Industries, Inc., and
Interstate Power Company, or such later date as may be fixed by any
requisite regulatory approval or acceptance for filing. This Agreement
shall continue in force and effect for a period of 5 Years from the
effective date herein above described, and continue from Year to Year
thereafter until terminated by one or more of the parties upon 5 Years
written notice to the other parties.
1.02 This Agreement will be reviewed periodically by the
Operating Committee to determine whether revisions are necessary to meet
changing conditions. In the event that revisions are made by the parties
hereto, and after requisite approval or acceptance for filing by the
appropriate regulatory authorities, the Operating Committee will
thereafter, for the purpose of ready reference to a single document,
prepare for distribution to the Companies an amended document reflecting
all changes in and additions to this Agreement with notations thereon of
the date amended.
ARTICLE II
DEFINITIONS
For the purpose of this Agreement and of the Service Schedules which
are attached hereto and made a part hereof, the following definitions
shall apply:
2.01 Agent for the Companies shall be Services.
2.02 Agreement shall be this Agreement with all attachments and
schedules applying hereto and any amendments made hereafter.
2.03 Capacity Commitment shall be generating capacity committed by a
Company to provide capability for other Companies to attain their Planning
or Prorated Reserve Levels, whichever shall be lower.
2.04 Capacity Commitment Charge shall be the charge made by a Company
supplying a Capacity Commitment to the Company receiving the Capacity
Commitment.
2.05 Central Control Center shall be a center operated by the Agent
for the optimal utilization of System resources for the supply of Power
and Energy.
2.06 Chief Executive Officer (CEO) shall be the Chief Executive
Officer of Interstate Energy Corporation.
2.07 Company shall be one of the Interstate Energy Corporation
operating companies and Companies shall be the Interstate Energy
Corporation operating companies collectively.
2.08 Company Capability shall be:
(a) The sum of the Company net plant capability in megawatts, plus
(b) The megawatt amount of purchases and exchanges without reserves,
under contract from other systems; less
(c) The megawatt amount of sales and exchanges without reserves,
under contract to other systems.
2.09 Company Demand shall be the demand in megawatts of all retail
and wholesale power customers on whose behalf the Company, by statute,
franchise, regulatory requirement, or contract, has undertaken an
obligation to construct and operate its system to meet the reliable
electric needs of such customers, integrated over a period of one hour,
plus the losses incidental to that service.
2.10 Company Hourly Capability for a Company shall be:
(a) The megawatt amount of dependable capability of the Company's
generating units on line, including its shares of Joint Units with
associated Companies and its shares of joint units with non-associated
companies, during the Hour; plus
(b) The megawatt amount of capability available to the Company under
contract from non-associated companies during the Hour; plus
(c) The megawatt amount of capability available from other Companies
in the form of Capacity Commitments during the Hour; less
(d) The megawatt amount of capability available from the Company to
non-associated companies under contract during the Hour; less
(e) The megawatt amount of capability available from the Company to
other Companies in the form of Capacity Commitments during the Hour.
2.11 Company Load Responsibility shall be as follows:
(a) Company Peak Demand; less
(b) Interruptible load including direct load control included in (a)
above; plus
(c) The contractual amount of sales and exchanges including
applicable reserves during the period to other systems; less
(d) The contractual amount of purchases and exchanges including
applicable reserves during the period from other systems.
2.12 Company Operating Capability shall be the dependable net
capability in megawatts of Generating Units of a Company carrying load or
ready to take load.
2.13 Company Operating Reserve shall be the excess of Company
Operating Capability over Company Load Responsibility expressed in
megawatts.
2.14 Company Peak Demand for a period shall be the highest Company
Demand for any hour during the period.
2.15 Day shall be a continuous 24-Hour period beginning at
midnight (0000). NORMALLY CALLED MIDNIGHT AS MEASURED IN CENTRAL
PREVAILING TIME.
2.16 Economic Dispatch shall be the distribution of total
generation requirements among alternative sources for system economy with
due consideration of incremental generating costs, incremental
transmission losses, and system reliability.
2.17 Energy shall be a measure of work expressed in megawatt-hours
(MWH).
2.18 Entitlement Energy shall be the Energy from a Joint Unit to
which a Company is entitled by reason of its ownership position in that
unit, expressed in megawatt-hours.
2.19 Generating Unit shall be an electric generator, together with
its prime mover and all auxiliary and appurtenant devices and equipment
designed to be operated as a unit for the production of electric Power and
Energy. The above is to include equipment necessary for connection to the
transmission system. The high side of the step-up transformer is the
intended point of connection to the transmission system.
2.20 Hour shall be a clock-hour.
2.21 Intertransmission Facilities shall be those transmission
facilities which are required for the effective utilization of System
resources in the economic exchange of capacity and Energy among the
Companies and with other systems.
2.22 Joint Facilities Plan shall be the formal documented plan
developed from time to time for all future Generating Units of the
Companies and other resources and all additional Intertransmission
Facilities.
2.23 Joint Unit shall be any Generating Unit and its outlet
transmission that is jointly owned by two or more of the Companies.
2.24 (a) Margin on Sales shall be the difference between: (1) the
revenue from non-firm off-System Energy sales and (2) the Seller's
Incremental Energy Cost incurred in making such sales.
(b) Margin on Purchases shall be the difference between (1) the
Buyer's Decremental Energy Value avoided as a result of non-firm off-
System Energy purchases and (2) payments for non-firm off-System Energy
purchases.
(c) Margin for a given period shall be the sum of the amounts
developed under 2.24 (a) and 2.24 (b).
2.25 Month shall be a calendar Month consisting of the applicable
24-hour periods as measured by Central Prevailing Time as required by the
appropriate reliability region.
2.26 Net Plant Capability shall be the capability measured in
megawatts (MW) as tested by procedures agreed upon by the Operating
Committee, and as required by the reliability region.
2.27 Open Access Transmission Tariff (OATT) shall be the Open
Access Transmission Tariff filed with the Federal Energy Regulatory
Commission by Services on behalf of the Companies.
2.28 Operating Committee shall be the organization established
pursuant to Section 5.01 and whose duties are more fully set forth
therein.
2.29 Own Load shall be Energy required to meet Company Demand plus
any off-System firm Energy served by the Company under contract existing
as of the effective date of this agreement.
2.30 Parent Company shall be Interstate Energy Corporation d/b/a
Alliant Corporation.
2.31 Planning Reserve Level shall be the megawatt amount of
required Reserve Capacity for a Company, expressed as a percentage of its
forecasted Company Load Responsibility.
2.32 Pool Energy shall be the Energy supplied and sold by one
Company to another Company to enable the purchasing Company to meet that
portion of its Own Load that could not be served by the purchasing
Company's other resources.
2.33 Power shall be the rate of doing work and shall be expressed
in megawatts (MW).
2.34 Prorated Reserve Level shall be a percentage reserve level
for each Company that when divided by that Company's Planning Reserve
Level gives the same quotient as that for all other Companies.
2.35 Reserve Capacity (Company or System) shall be that amount in
megawatts by which Company or System Capability exceeds Company or System
Load Responsibility.
2.36 Seller's Incremental Energy Cost shall be the Variable Energy
Cost or purchased Energy cost which a selling Company incurs in order to
supply energy for resale.
2.37 System shall be the interconnected coordinated electric
generation and transmission systems of the Companies.
2.38 System Capability shall be the arithmetical sum in megawatts
of the individual Company Capabilities.
2.39 System Demand shall be the arithmetical sum in megawatts of
the individual Companies' clock-hour demand.
2.40 System Load Responsibility shall be as follows:
(a) System Peak Demand; less
(b) Interruptible load including direct
load control included in (a) above; plus
(c) The arithmetic sum of all of the Companies' contractual amount
of sales and exchanges with applicable reserves during the period to other
systems; less
(d) The arithmetic sum of all of the Companies' contractual amount
of purchases and exchanges with applicable reserves during the period from
other systems.
2.41 System Operating Capability shall be the arithmetical sum in
megawatts of the individual Company Operating Capabilities.
2.42 System Operating Reserve shall be the arithmetical sum of the
individual Company Operating Reserves, expressed in megawatts.
2.43 System Peak Demand for a period shall be the highest System
Demand for any hour during the period.
2.44 Total Energy Cost shall be the total cost of all fuel
consumed by the unit in such month divided by the net kilowatt hours that
month plus an amount established by the Operating Committee to cover (1)
the average production cost other than fuel and (2) the incremental
transmission losses incurred in supplying the participant's on any other
system.
2.45 Transmission Services Organization shall be an organization
within Services which is the Designated Agent for the Companies as
Transmission Providers under the OATT.
2.46 Variable Energy Cost shall be the incremental delivered fuel
cost for the last generated MW, variable O&M cost, any associated start up
cost, incremental losses and relevant emissions cost.
2.47 Year shall be a calendar Year.
ARTICLE III
OBJECTIVES
3.01 Purpose
The purpose of this Agreement is to provide the contractual basis for
coordinated planning, construction, operation and maintenance of the
System to achieve optimal economies, consistent with reliable electric
service, reasonable utilization of natural resources, and environmental
requirements.
ARTICLE IV
AGENT
4.01 Responsibility of the Agent
The Companies hereby designate Services as their Agent for the
purpose of:
(a) coordinating the planning, operating and maintaining of the
Generating Units and Intertransmission Facilities of the Companies;
(b) design and construction of the Joint Units; and
(c) design, construction, operation and maintenance of the Central
Control Center.
4.02 Delegation and Acceptance of Authority
The Companies hereby delegate to the Agent and the Agent hereby
accepts responsibility and authority for the duties listed in Section 4.01
and elsewhere in this Agreement. The Agent shall perform each of those
duties in consultation with the Operating Committee except as herein
expressly established otherwise.
4.03 Reporting
The Agent shall provide periodic summary reports of its activities
under this Agreement to the Companies and shall keep the Companies and the
Operating Committee currently informed of situations or problems which may
adversely affect the planning, construction, operation or maintenance of
the System. The Agent shall report to the Companies or to the Operating
Committee in such additional detail as is requested on specific issues or
projects under its supervision as Agent.
4.04 Delegation to the Transmission Services Organization
Services shall delegate to the Transmission Services Organization the
responsibility and authority to act as Transmission Provider on behalf of
the Companies for all of the requirements and purposes of the Open Access
Transmission Tariff.
4.05 Delegation to Services
The Companies shall delegate to Services the responsibility and
authority to act as Customer on behalf of the Companies for all of the
requirements and purposes of the Open Access Transmission Tariff.
ARTICLE V
OPERATING COMMITTEE
5.01 Operating Committee
The Operating Committee is the organization established to ensure the
coordinated operation of the System by making recommendations to the CEO
regarding operations under this Agreement, thereby providing the basis for
the CEO's direction of the Agent in the performance of the Agent's duties
under this Agreement. The Operating Committee members will be designated
by the CEO and shall consist of a chairperson, plus one representative
from each Company plus one representative from the Agent. Operating
Committee decisions shall be by a majority vote of those present and shall
be in the form of recommendations to the CEO. However, any member not
present may vest his vote with a proxy. In any non-unanimous decision the
principles of the difference shall be reported to the CEO. The
chairperson shall vote only in case of a tie.
ARTICLE VI
OPERATIONS
6.01 Planning and Authorization of Production Facilities
(a) Each Company shall forecast the generation requirements to meet
its Load Responsibility and its Planning Reserve Level.
(b) A current Joint Facilities Plan will be maintained that will
provide for the current forecasted System Load Responsibility including
the Planning Reserve Level. The Generating Units and purchases identified
in Schedule B shall be integrated into the plan.
(c) All Generating Units committed to and placed in service after
the effective date of this Agreement and all outside capacity purchases
contracted after the effective date of this agreement shall be in
accordance with the then current Joint Facilities Plan. Joint Units shall
be authorized by the Board of Directors of the Parent Company prior to the
commencement of detailed engineering of the units.
(d) For the purpose of this Agreement the Generating Units listed in
Schedule B are not Joint Units.
(e) The Company designated by the CEO shall be responsible for the
staffing, operation and maintenance of each authorized Joint Generating
Unit.
6.02 Planning Reserve Levels
The Operating Committee shall periodically review the Planning
Reserve Level for each Company and recommend any modifications of such to
the CEO.
6.03 Provision to Achieve Planning Reserve Levels
(a) Each Company shall own, or have available to it under contract,
such generating capability and other facilities as are necessary to supply
its Company Load Responsibility plus its Planning Reserve Level.
(b) The Joint Facilities Plan shall be periodically reviewed and
adjusted to provide the Companies their required Planning Reserve Levels.
Any Company with Reserve Capacity in excess of its Planning Reserve Level
for a future Year shall offer to commit such excess capacity to Companies
with insufficient Reserve Capacity to meet their Planning Reserve Level
during that Year. The deficit Companies if they choose to purchase such
capacity shall make payments to the excess Companies each Month of the
Year the commitment applies in the amount of the Capacity Commitment
Charge in accordance with Schedule C. In the event that the System
Capability, including outside capacity purchases, is insufficient to meet
such Planning Reserve Levels, the companies with excess capability shall
commit only that excess capability to the companies with insufficient
reserve capacity.
(c) The Ownership percentages in future Generating Units are
established in accordance with Schedule A, but may be reallocated in the
Joint Facilities Plan by recommendation of the Operating Committee and
authorization by the CEO.
6.04 Capacity Sales and Purchases and Reserve Shortfalls
(a) The Agent is hereby authorized to operate the system as a single
control area and shall coordinate and assist the Companies in off-System
capacity sales and purchases as may be required by the System to market
excess System Capability or meet System Capability deficiencies.
(b) All capacity purchases and sales effective beyond the effective
date of this Agreement shall be coordinated by the Agent, recommended by
the Operating Committee, and approved by the CEO.
(c) The System Reserve Capacity shall be at the disposal of any
Company requiring such capacity. Should the System be short of capacity
as a result of an emergency and be unable to purchase the deficit, each
Company shall take such actions as are necessary to bring system load and
generation into balance.
6.05 Energy Exchange Among the Companies
The Agent shall schedule System Energy output to obtain the lowest
cost of Energy for serving System Demand consistent with each Company's
operating and security constraints, including voltage control, stability,
loading of facilities, operating guides as recommended by the Operating
Committee and approved by the CEO, environmental requirements and
continuity of service to customers.
6.06 Energy Exchange Pricing
For the purpose of pricing Energy exchange among the Companies,
System resources shall be utilized to serve System requirements in the
following order:
(a) Those Generating Units which are designated not to be operated
in the order of lowest to highest Variable Cost but are required due to
Company operating constraints shall be allocated to the Company requiring
the Generating Unit.
(b) The lowest Variable Cost generation of each Company's capability
shall first be allocated to serve its Own Load.
(c) The next lowest Variable Cost portion of each Company's
remaining capability shall be allocated to serve Pool Energy requirements
of Companies under System Economic Dispatch. Pool Energy shall be priced
in accordance with Schedule D.
6.07 Energy Exchanges With Non-Affiliated Utilities The Agent
shall coordinate and direct off-System purchases of Energy necessary to
meet System requirements or improve System economies. The Agent shall
coordinate and direct off-System sales of Energy available after meeting
all of the requirements of the System including the energy associated with
contractual requirements for off-System capacity sales. Any off-System
economy Energy purchases or sales shall be implemented by decremental or
incremental System Economic Dispatch as appropriate. Any Margin on Energy
purchases from off-System utilities or Margin on Energy sales to off-
System utilities shall be distributed to the Companies in accordance with
Schedule E.
ARTICLE VII
TRANSMISSION
7.01 Availability of Intertransmission Facilities
Each Company shall make its Intertransmission Facilities available to
the Transmission System Operator.
7.02 Availability of Direct Assignment Facilities
Each Company shall make Direct Assignment Facilities available to the
Transmission System Operator as may be required to provide transmission
service to Non-Affiliated Utilities.
7.03 Transmission Service Revenues
(a) The Companies shall share all transmission service revenues
obtained from the use of the intertransmission facilities that comprise
the IEC transmission system in proportion to their respective Company
Transmission Revenue Requirements as shown on Schedule G. The Schedule G
Annual Transmission Revenue Requirements shall be revised whenever there
is a change to the Annual Transmission Revenue Requirements in Attachment
H to the IEC Open Access Transmission Tariff.
(b) Revenues received for third-party use of Direct Assignment
Facilities shall be distributed to the Companies owning such facilities.
(c) The distribution to the Companies of revenues received for
stranded costs received from third-party customers under the OATT shall be
determined on a case-by-case basis.
(d) The distribution to the Companies of revenues received for new
facilities and redispatch costs received from third-party customers under
the OATT shall be determined on a case-by-case basis.
7.04 Communications
All communications by the Companies with the Transmission Services
Organization concerning the use of the transmission system shall be
through the Open Access Same Time Information System. This restriction
does not apply to communications concerning (1) system operating problems;
(2) emergency conditions; (3) the Network Operating Agreement and the
status of a Company=s particular contracted for transaction; and (4)
confidential or proprietary information.
7.05 Network Transmission Service Reservation
(a) Each Company shall join in a single reservation for Network
Integration Transmission Service, to be submitted by Services to the TSO.
(b) Each Company=s Network Loads shall be the Company Demand as
defined in Section 2.09.
(c) Each Company=s Network Resources shall be the Generating Units
and Purchased Power Contracts as permitted by Section 30.1 of the Open
Access Transmission Tariff, as reflected in Schedule B.
(d) Services shall act as Customer Agent for the Companies for all
transmission and ancillary service-related actions under the OATT.
(e) Services shall bill each of the Companies on a Load Ratio Share
basis for the amount due to the TSO in each month for Network Services.
Payment for other services under the OATT may be directly assigned to a
specific Company.
7.06 Point-to-Point Transmission Services
(a) Each Company shall enter into PTP Capacity Reservations, with
Services acting as Agent, for all Load Responsibility that is not included
in Company Peak Demand.
(1) The cost of Transmission on the IEC
System for off-System capacity sales by a Company shall be borne by the
selling Company.
(2) The cost of third-party PTP
Transmission for off-System capacity sales by a Company shall be borne by
the selling Company.
(b) Services shall enter into firm and non-firm transmission service
reservations with the TSO and third parties as may be required to enter
into Energy Exchanges with Non-Affiliated Utilities. The costs incurred
for such transmission services shall be distributed to the Companies on
the same bases as any Margin on Energy purchases or sales, in accordance
with Schedule E.
7.07 Ancillary Services
(a) Each Company shall make Regulating, Spinning and Supplemental
Reserve generating capacity available to the TSO to meet:
(1) each Company=s proportionate share of
the Reserve Margin Requirements associated with the IEC Companies= Network
Integration Transmission Service reservation, and
(2) such additional quantities of
Regulating, Spinning and Supplemental Reserve generating capacity as may
be requested by the TSO to meet the Minimum Operating Reserve Requirements
of third-party Transmission Customers, and
(3) such additional quantities of
Regulating, Spinning and Supplemental Reserve generating capacity as may
be determined by the Company, TSO or by Services to be reasonable, prudent
and necessary to accomplish the purposes of this Agreement, the OATT, and
Regional Reliability Council rules, guidelines and agreements.
(b) Where revenues are received from Non-Affiliated Utilities for
the provision of Operating Reserves, revenues for each type of service
shall be distributed by the TSO on a Network Load Ratio basis unless a
single Company is designated as the supplier in which case the revenues
will be directly assigned to the supplying Company.
(c) Revenues received for the provision of Scheduling and Reactive
Power from Generation Sources Services shall be distributed by the TSO to
the Companies on a Network Load Ratio basis unless and until a more
appropriate cost allocation method is identified.
(d) Revenues received from the TSO by Services for the provision of
Energy Imbalance Service shall be distributed to the Companies in
accordance with Schedule E, as Energy Exchanges With Non-Affiliated
Utilities, after Services has first directly assigned revenues to each
Company equal to the incremental costs incurred to provide this service.
7.08 Intertransmission Facilities
(a) The ownership of Intertransmission Facilities existing as of the
effective date of this agreement shall be in accordance with ownership
prior to this agreement.
(b) The Agent shall make periodic studies of bulk Power supply
transmission facilities and shall report to the Operating Committee the
results of such studies including any additional Intertransmission
Facilities identified as necessary.
7.09 Transmission Losses
Transmission losses occasioned by the transfer of Power and Energy
among and between the Companies when recommended by the Operating
Committee shall be determined and accounted for in accordance with the IEC
Transmission Tariff and procedures developed by the Agent, recommended by
the Operating Committee, and approved by the CEO.
ARTICLE VIII
CENTRAL CONTROL CENTER
8.01 Central Control Center
The Agent shall provide and operate a Central Control Center
adequately equipped and staffed to meet the requirements of the Companies
for efficient, economical and reliable operation as contemplated by this
Agreement.
8.02 Expenses
All expenses for operation of the Central Control Center shall be
paid by the Agent and billed monthly to each Company, in accordance with
Schedule F.
8.03 Communications and Other Facilities
The Companies shall provide communications and other facilities
necessary for:
(a) The metering and control of the generating and transmission
facilities;
(b) The dispatch of electric Power and Energy; and
(c) For such other purposes as may be necessary for optimum
operation of the System.
ARTICLE IX
GENERAL
9.01 Regulatory Authorization
This Agreement is subject to certain regulatory approvals and each
Company and the Agent shall diligently seek all necessary regulatory
authorization for this Agreement.
9.02 Effect on Other Agreements
This Agreement shall not modify the obligations of any Company under
any agreement between the Company and others not parties to this Agreement
in effect at the date of this Agreement.
9.03 Schedules
The basis of compensation for the use of facilities and for the Power
and Energy provided or supplied by a Company to another Company or
Companies under this Agreement shall be in accordance with arrangements
agreed upon from time to time among the Companies. Such arrangements
shall be in the form of Schedules, each of which, when signed by the
parties thereto and approved or accepted by appropriate regulatory
authority, shall become a part of this Agreement.
9.04 Measurements
All quantities of Power and Energy exchanged or flowing between the
systems of the Companies, shall be determined by meters installed at each
interconnection, unless otherwise agreed to by the Companies involved.
9.05 Billings
Bills for services rendered hereunder shall be calculated in
accordance with applicable Schedules, and shall be issued on a monthly
basis for services performed during the preceding month.
9.06 Waivers
Any waiver at any time by a Company of its rights with respect to a
default by any other Company under this Agreement shall not be deemed a
waiver with respect to any subsequent default of similar or different
nature, nor shall it prejudice its right to deny waiver of similar default
to a different Company.
9.07 Successors and Assigns; No Third Party Beneficiary
This Agreement shall inure to and be binding upon the successors and
assigns of the respective parties hereto, but shall not be assignable by
any party without the written consent of the other parties, except upon
foreclosure of a mortgage or deed of trust. Nothing expressed or
mentioned or to which reference is made in this Agreement is intended or
shall be construed to give any person or corporation other than the
parties hereto any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained, expressly or
by reference, or any Schedule hereto, this Agreement, any such Schedule
and any and all conditions and provisions hereof and thereof being
intended to be and being for the sole exclusive benefit of the parties
hereto, and for the benefit of not other person or corporation.
It is contemplated by the parties that it may be appropriate from
time to time to change, amend, modify or supplement this Agreement of the
Schedules which are attached to this Agreement to reflect changes in
operating practices or costs of operations or for other reasons. This
Agreement may be changed, amended, modified or supplemented by an
instrument in writing executed by all of the parties after requisite
approval on acceptance for filing by the appropriate regulatory
authorities.
9.08 Independent Contractors
It is agreed among the Companies that by entering into this Agreement
the Companies shall not become partners, but as to each other and to third
persons, the Companies shall remain independent contractors in all matters
relating to this Agreement.
9.09 Responsibility and Liability
The liability of the parties shall be several, not joint or
collective. Each party shall be responsible only for its obligations, and
shall be liable only for its proportionate share of the costs and expenses
as provided in this Agreement, and any liability resulting here from.
Each party hereto will defend, indemnify, and save harmless the other
parties hereto from and against any and all liability, loss, costs,
damages, and expenses, including reasonable attorney's fees, caused by or
growing out of the gross negligence, willful misconduct, or breach of this
Agreement by such indemnifying party.
9.10 Affiliate Transaction Pricing
The Companies and Services, having made certain commitments to the
Federal Energy Regulatory Commission concerning transfer pricing among
affiliates, agree as follows with respect to non-power goods and services:
(1) the affiliates or associates of the public utility subsidiaries will
not sell non-power goods or services to the public utility subsidiaries at
a price above market price; and (2) sales of non-power goods or services
by the public utility subsidiaries to their affiliates or associates will
be at the public utility=s cost for such goods and services or the market
value for such goods and services, whichever is higher.
In witness whereof, each of the Companies has caused this Agreement
to be signed in its name and on its behalf by its President attested by
its Secretary, both being duly authorized.
IES UTILITIES, INC.
Attest
__________________________________ By_______________________________
Secretary President
INTERSTATE POWER COMPANY
Attest
__________________________________ By_______________________________
Secretary President
WISCONSIN POWER & LIGHT COMPANY
Attest
__________________________________ By_______________________________
Secretary President
ALLIANT SERVICES, INC.
Attest
__________________________________ By_______________________________
Secretary President
A-1
SCHEDULE A
JOINT UNIT
10.01 Purpose
The purpose of this Schedule is to provide the basis for the
Companies' participation in Joint Units.
10.02 Ownership (a) Every Joint Unit shall be owned by the
Companies participating in the Joint Unit as tenants in common. Ownership
shares in each Joint Unit shall be allocated insofar as practical to
achieve a Prorated Reserve level for all Companies participating in the
unit. The allocation shall be recommended by the Operating Committee and
approved by the CEO prior to the time the unit is authorized by the Board
of Directors of the Parent Company. However, each Company participating
shall own at least 25 megawatts of each Joint Unit unless otherwise
agreed to by the Operating Committee. Each Company shall be responsible
for its prorata share of the costs of construction of the unit and shall
contribute such funds to the Agent as billed.
(b) When a new Joint Unit is installed at a site already occupied by
one or more existing Generating Units the Agent, in consultation with the
Operating Committee, shall identify any existing facilities that will be
common to the new Joint Unit and the portion of the common facilities to
be allocated to the new Joint Unit. The owners of the new joint Unit
shall compensate the owners of the existing common facilities for the use
of those common facilities.
A-2
10.03 Contracts
The Companies shall execute a joint ownership construction and
operation and maintenance agreement for each Joint Unit, such agreement to
set out all of the rights and obligations of the parties relating to the
specific Joint Unit, including the allocation of fuel costs, the
allocation of other operation costs and the allocation of maintenance
costs among the owners.
IES UTILITIES, INC.
Attest
__________________________________ By______________________________
Secretary President
INTERSTATE POWER COMPANY
Attest
__________________________________ By_______________________________
Secretary President
WISCONSIN POWER & LIGHT COMPANY
Attest
__________________________________ By_______________________________
Secretary President
ALLIANT SERVICES, INC.
Attest
__________________________________ By_______________________________
Secretary President
B-1
SCHEDULE B
IES UTILITIES
EXISTING GENERATING UNITS
Station Unit Station Unit
Burlington 1 Grinnell CT 1
Grinnell CT 2
Prairie Creek 1*
Prairie Creek 2 Marshalltown CT 1
Prairie Creek 3 Marshalltown CT 2
Prairie Creek 4 Marshalltown CT 3
Sutherland Station 1 Red Cedar Cogen 1**
Sutherland Station 2
Sutherland Station 3 Ames Diesel 1
Ames Diesel 2
Sixth Street Station 2
Sixth Street Station 4 Centerville Diesel 1
Sixth Street Station 7 Centerville Diesel 2
Sixth Street Station 8 Centerville Diesel 3
Burlington CT 1 Marshalltown Diesel 1
Burlington CT 2 Marshalltown Diesel 2
Burlington CT 3
Burlington CT 4 Lakehurst Dam 1
Lakehurst Dam 2
Centerville CT 1
Centerville CT 2 Anamosa Hydro 1
Agency Street CT 1 Iowa Falls Hydro 1
Agency Street CT 2
Agency Street CT 3
Agency Street CT 4
* Retired in October 1995; will be replaced during 1997
** Operational during the 2nd quarter of 1996
B-2
SCHEDULE B
IES UTILITIES
EXISTING GENERATING UNITS
JOINTLY OWNED
Station Unit
Duane Arnold Energy Center 1 Note: Jointly owned with Central
Power Cooperative and Corn Belt
Power Cooperative
Ottumwa 1 Note: Jointly owned with
MidAmerican Energy
Neal 3 Note: Jointly owned with
MidAmerican Energy; operated by
MidAmerican Energy
B-3
SCHEDULE B
IES UTILITIES
EXISTING PURCHASE POWER CONTRACTS
Year Company MW Type
1996 Ottumwa Hydro 1 System Firm
1996 Union Electric 80 System Firm
1996 Basin Electric 50 Unit Participation
1997 Ottumwa Hydro 1 System Firm
1997 Union Electric 60 System Firm
1997 Basin Electric 75 Unit Participation
1998 Ottumwa Hydro 1 System Firm
1998 Basin Electric 100 Unit Participation
B-4
SCHEDULE B
INTERSTATE POWER COMPANY
EXISTING GENERATING UNITS
Station Unit
Lansing 1
Lansing 2
Lansing 3
Lansing 4
ML Kapp 1
ML Kapp 2
Dubuque 1
Dubuque 2
Dubuque 3
Fox Lake 1
Fox Lake 2
Fox Lake 3
Lime Creek CT 1
Lime Creek CT 2
Montgomery CT 1
Fox Lake CT 4
Dubuque Diesel 1
Dubuque Diesel 2
Lansing Diesel 1
Lansing Diesel 2
Hills Diesel 1
Rushford Diesel 1
New Albin Diesel 1
B-5
SCHEDULE B
INTERSTATE POWER COMPANY
EXISTING GENERATING UNITS
JOINTLY OWNED
Station Unit
Neal 4 Note: Jointly owned with MidAmerican Energy,
Cornbelt Power Coop, Algona Municipal,
Cedar Falls Municipal, North Iowa
Municipal Electric Coop Assoc., Northwest
Iowa Power Coop, and Northwestern Public
Service Company; operated by MidAmerican
Energy.
Louisa 1 Note: Jointly owned with MidAmerican Energy,
Central Iowa Power Cooperative, and the
Municipals of: Waverly, Geneseo,
Eldridge, Tipton and Harlan; operated by
MidAmerican Energy.
B-6
SCHEDULE B
INTERSTATE POWER COMPANY
EXISTING PURCHASE POWER CONTRACTS
Year Company MW Type
1996 Northwest Iowa Power Coop 25 Unit Participation
1996 Windom 3 Unit Participation
1996 United Power Association 100 Unit Participation
1996 Minnesota Power 55 Unit Participation
1996 MidAmerican Energy 100 Unit Participation
1997 Northwest Iowa Power Coop 25 Unit Participation
1997 Windom 3 Unit Participation
1997 United Power Assoc. 100 Unit Participation
1997 Minnesota Power 55 Unit Participation
1997 MidAmerican Energy 100 Unit Participation
1998 Northwest Iowa Power Coop 25 Unit Participation
1998 Windom 3 Unit Participation
1998 United Power Assoc. 100 Unit Participation
1998 Minnesota Power 55 Unit Participation
1998 MidAmerican Energy 100 Unit Participation
B-7
SCHEDULE B
WISCONSIN POWER & LIGHT COMPANY
EXISTING GENERATING UNITS
Station Unit
Edgewater 3
Nelson Dewey 1
Nelson Dewey 2
Rock River 1
Rock River 2
Blackhawk 3
Blackhawk 4
Rock River CT 3
Rock River CT 4
Rock River CT 5
Rock River CT 6
Sheepskin CT 1
South Fond du Lac CT 2
South Fond du Lac CT 3
Prairie du Sac Hydro 1-8
Kilbourn Hydro 1-4
Janesville Hydro 1
Rockton Hydro 1
Beloit Blackhawk Hydro 1
Shawano Hydro 1
B-8
SCHEDULE B
WISCONSIN POWER & LIGHT COMPANY
EXISTING GENERATING UNITS
JOINTLY OWNED
Kewaunee 1 Note: Jointly owned with Wisconsin Public
Service Corporation (WPS) and Madison Gas
& Electric (MGE); operated by WPS.
Columbia 1 Note: Jointly owned with WPS and MGE.
Columbia 2 Note: Jointly owned with WPS and MGE.
Edgewater 4 Note: Jointly owned with WPS.
Edgewater 5 Note: Jointly owned with Wisconsin Electric
Power Company (WEP).
South Fond
du Lac CT 1 Note: Owned by Wisconsin Public Power
Inc. (WPPI); operated by WPL.
Petenwell Hydro 1 Note: Jointly owned by WPL, WPS and
Consolidated Paper Company; operated by
Wisconsin River Power Company.
Castle Rock Hydro 1 Note: Jointly owned by WPL, WPS and
Consolidated Paper Company; operated by
Wisconsin River Power Company.
B-9
SCHEDULE B
WISCONSIN POWER & LIGHT COMPANY
EXISTING PURCHASE POWER CONTRACTS
Year Company MW Type
1996 Minnesota Power 30 System Firm
1996 Commonwealth Edison 50 System Firm
1996 Basic Electric 140 System Firm
1997 Minnesota Power 30 System Firm
1997 Commonwealth Edison 75 System Firm
1998 Minnesota Power 75 System Firm
1998 Commonwealth Edison 90 System Firm
C-1
SCHEDULE C
CAPACITY COMMITMENT CHARGE
11.01 Purpose
The purpose of this Schedule is to establish the basis for Capacity
Commitments between the Companies and the rates for the Capacity
Commitment Charge and associated energy.
11.02 Basis for Capacity Commitment
Prior to January 1 of each year (or more frequently if mutually
agreed to by the companies) companies will review their capacity
requirements for the coming year to determine whether they have excess
system capacity available (AExcess Companies@) or whether they are in a
deficit system capacity condition (ADeficit Companies@). Excess Companies
will reserve such system capacity for use by Deficit Companies for a
period of 30 days. If a Deficit Company wishes to purchase system
capacity from an Excess Company it shall so notify the Excess Company to
negotiate an agreement for purchase of the excess system capacity. If an
Excess Company has not received a request to purchase the excess capacity
from a Deficit Company within 30 days, the Excess Company shall have the
right to sell its excess capacity to any interested third party.
11.03 Provisions for Capacity Commitment Charge
The monthly Capacity Commitment Charge shall be at a rate no higher
than the prevailing market price for equivalent capacity delivered to the
IEC System, but in no case more than the embedded cost price cap for
capacity supplied by the Excess Company. The embedded cost price cap will
be determined by applying the following formula:
C-2
A = (1/12) [(BxC) + E] (F/D)
Where:
A = Monthly Capacity Commitment Charge for the company
providing capacity
B = Levelized fixed charge rate for the committing Company
providing capacity including:
a. Current cost of capital
b. Sinking fund depreciation
c. Property taxes
d. Property insurance
e. Income taxes and
f. Applicable state gross receipts taxes
C = Total Plant Fixed cost of capacity provided as of December
31 of the year prior to the year of the Capacity
Commitment.
D = Rated net dependable capability of capacity provided in
megawatts.
E = Annual Plant Fixed O&M Cost (to be determined by the
Operating Committee).
F = Megawatts of capacity provided.
The capacity used to determine the Monthly Capacity Commitment charge
will be a weighted mix of the non nuclear generation units.
11.04 Contracts
The Companies shall execute an agreement for each such commitment of
capacity, where such agreement will set out all of the pertinent costs,
rights, and obligations of the parties relating to this transaction and
file such contract with the Federal Energy Regulatory Commission as a
supplement to this Agreement.
C-3
IES UTILITIES, INC.
Attest
_____________________________ By_______________________________
Secretary President
INTERSTATE POWER COMPANY
Attest
_____________________________ By_______________________________
Secretary President
WISCONSIN POWER & LIGHT COMPANY
Attest
_____________________________ By_______________________________
Secretary President
ALLIANT SERVICES, INC.
Attest
_____________________________ By_______________________________
Secretary President
D-1
SCHEDULE D
PAYMENTS AND RECEIPTS FOR POOL ENERGY EXCHANGES
AMONG THE COMPANIES
13.01 Purpose
The purpose of this Schedule is to provide the basis for determining
payments and receipts among the Companies for Pool Energy exchanges.
13.02 Hourly Calculations
The payments and receipts of Section 13.03 are calculated Hourly, but
are accumulated and billed Monthly among the Companies.
13.03 Receipts and Payments
A selling Company shall receive from a purchasing Company the
Seller's Variable Energy Cost for Pool Energy sold. Where Pool Energy is
purchased simultaneously by more than one Company these charges shall be
prorated in proportion to the megawatt-hours of Pool Energy purchased by
each buyer.
IES UTILITIES, INC.
Attest
_____________________________ By__________________________________
Secretary President
INTERSTATE POWER COMPANY
Attest
_____________________________ By__________________________________
Secretary President
D-2
WISCONSIN POWER & LIGHT COMPANY
Attest
_____________________________ By__________________________________
Secretary President
ALLIANT SERVICES, INC.
Attest
_____________________________ By__________________________________
Secretary President
E-1
SCHEDULE E
DISTRIBUTION OF MARGIN FOR OFF-SYSTEM
ENERGY PURCHASES AND SALES
14.01 Purposes
The purpose of this Schedule is to establish the basis for
distributing among the Companies the Margin on off-System Energy purchases
and sales.
14.02 Off-System Energy Purchases
Any Margin on off-System Energy purchases during an hour shall be
distributed to the Companies in proportion to the megawatt-hours of
generation reduced by each Company during the Hour as a result of the
purchases.
14.03 Off-System Energy Sales
Any Margin on off-System Energy sales during an hour shall be
distributed to the Companies in proportion to the energy generated by each
Company for the sales.
IES UTILITIES, INC.
Attest
_____________________________ By__________________________________
Secretary President
INTERSTATE POWER COMPANY
Attest
_____________________________ By___________________________________
Secretary President
E-2
WISCONSIN POWER & LIGHT COMPANY
Attest
_____________________________ By____________________________________
Secretary President
ALLIANT SERVICES, INC.
Attest
_____________________________ By____________________________________
Secretary President
F-1
SCHEDULE F
DISTRIBUTION OF OPERATING EXPENSES
OF THE CENTRAL CONTROL CENTER
15.01 Purpose
The purpose of this Schedule is to provide a basis for the
distribution among the Companies of the costs incurred by the Agent in
operating the Central Control Center.
15.02 Costs
Costs for the purpose of this Schedule shall include all costs
incurred in maintaining and operating the Central Control Center
including, among others, such items as salaries, wages, rentals, the cost
of materials and supplies, interest, taxes, depreciation, transportation,
travel expenses, consulting, and other professional services.
15.03 Distribution of Costs
All costs shall be billed by Agent to the Companies in proportion to
the firm kilowatt hour electric sales for the preceding calendar year with
the following exception. In the event the Central Control Center makes a
study or performs a special service in which all Companies are not thus
proportionately interested, any resulting cost shall be distributed to the
interested parties in accordance with the standard procedures of Agent
authorized by the United States Securities and Exchange Commission,
subject to the Commitments made by the Companies to the Federal Energy
Regulatory Commission set forth in Section 9.10.
F-2
(b) Costs incurred by Services and the Transmission Services
Organization shall be distributed to the Companies in proportion to their
respective Company Transmission Revenue Requirements as shown on
Schedule G.
IES UTILITIES, INC.
Attest
______________________________ By________________________________
Secretary President
INTERSTATE POWER COMPANY
Attest
______________________________ By_________________________________
Secretary President
WISCONSIN POWER & LIGHT COMPANY
Attest
______________________________ By_________________________________
Secretary President
ALLIANT SERVICES, INC.
Attest
______________________________ By__________________________________
Secretary President
G-1
SCHEDULE G
TRANSMISSION REVENUE ALLOCATION
16.01 Purpose
The purpose of this section is to provide a basis for the allocation
of transmission revenues among the Companies in proportion to the costs
included by each Company in the Annual Transmission Revenue Requirement
shown on Attachment H to the IEC Open Access Transmission Tariff.
16.02 Company Transmission Revenue Requirements
Until modified by the Companies, the Annual Transmission Revenue
Requirement of each Company shall be:
IES Utilities Inc.: $ 33,700,000
Interstate Power Company: $ 20,900,000
Wisconsin Power & Light Company: $ 27,600,000
Total IEC Companies: $ 82,200,000
16.03 Modification of Revenue Requirements
Services shall modify the Company and Total IEC Transmission Revenue
Requirements from time to time, but no less frequently than whenever the
Annual Transmission Revenue Requirement shown on Attachment H to the IEC
Open Access Transmission Tariff is modified.
G-2
IES UTILITIES, INC.
Attest
_______________________________ By_______________________________
Secretary President
INTERSTATE POWER COMPANY
Attest
_______________________________ By________________________________
Secretary President
WISCONSIN POWER & LIGHT COMPANY
Attest
_______________________________ By________________________________
Secretary President
ALLIANT SERVICES, INC.
Attest
_______________________________ By________________________________
Secretary President