EXHIBIT 10.1(i)-1
August 7, 1997
Mr. Neil D. Nelson
Vice President- Operations
Upper Peninsula Power Company
600 Lakeshore Drive
P.O. Box 130
Houghton, MI 49931-0130
Dear Mr. Nelson:
This letter is to confirm your verbal acceptance of our offer dated August
4, 1997, for the supply of Negotiated Capacity. Per our mutual agreement,
ComEd will add a provision to its offer making it contingent upon ComEd
obtaining Firm Transmission over ComEd's system and UPPCo obtaining Firm
Transmission over WEPCO's system as provided below. For ease of contract
administration, this offer dated August 7, 1997, restates and supersedes our
offer of August 4, 1997, and adds the transmission contingency provisions.
In response to your request for proposals, ComEd offers to supply Upper
Peninsula Power Company ("UPPCO") Negotiated Capacity at a 100% capacity
factor for the Supply Period starting January 1, 1998, and ending December
31, 1998, as follows:
Transaction Contract
Contract Period Period Amount
--------------- ----------- ---------
January 1 - March 31, 1998 ATC 55 MW
April 1, - June 30, 1998 On-Peak 55 MW
Off-Peak 45 MW
July 1, - September 30, 1998 ATC 55 MW
October 1, - December 31, 1998 On-Peak 55 MW
Off-Peak 45 MW
The Around the Clock (ATC) Transaction Period is defined as all hours of
every day. A Day shall be defined as the twenty-four hour period starting
at 12:00 Midnight. The On-Peak Transaction Period is defined as the period
starting 6:00 A.M. and ending 12:00 Midnight, Sunday through Saturday. The
Off-Peak Transaction Period is defined as the period starting at 12:00
Midnight and ending at 6:00 A.M. Sunday through Saturday. All times are
prevailing Eastern Time.
The Demand Charge shall be $4,100/MW-month and the Energy Charge shall be
$16.10/MWh.
If UPPCo timely accepts the offer, ComEd will sell and UPPCO will purchase
electric power and energy (referred to herein as "Negotiated Capacity") on
the terms and conditions set forth below. Such terms and conditions shall
constitute and govern the parties' agreement ("Agreement"). Negotiated
Capacity will be provided under this Agreement pursuant and subject to
ComEd's FERC Power Sales and Reassignment of Transmission Rights Tariff,
PSRT-1 (the "Tariff") including Power Sales Schedule 4, to the Tariff. The
terms and conditions contained herein are intended to be consistent with,
and supplemental to, the terms and conditions stated in the Tariff; however,
if there should nonetheless be any conflict between the terms and conditions
contained herein and the terms and conditions contained in the Tariff, the
applicable term or condition contained in the Tariff shall govern. Except
as provided herein, this Negotiated Capacity shall have the same degree of
firmness as Firm Power, Power Sales Schedule 1. In Power Sales Schedule 1,
the supply of Firm Power is subject to curtailment or interruption only in
extreme emergencies caused by events or circumstances beyond ComEd's control
and the supply shall be curtailed only in proportion to the amount that
ComEd's other non-interruptible load is curtailed. Thus, the supply of this
Negotiated Capacity shall have the same degree of firmness as ComEd's supply
to its native load.
UPPCO shall pay for the Contract Amount at the Demand Charge and the Energy
Charge for each hour of the Transaction Periods for the duration of the
Supply Period.
ComEd will make arrangements to deliver the Negotiated Capacity hereunder at
ComEd's point of interconnection with WEPCO. Further delivery of this
Negotiated Capacity from this delivery point shall be arranged and paid for
by UPPCO. Transmission of electricity under this agreement over ComEd's
transmission system will be provided on a firm basis and may be interrupted
by ComEd for any reason which permits ComEd to interrupt transmission
service provided to third parties under ComEd's FERC Open Access
Transmission Tariff ("OATT") as in effect from time to time. Failure to
deliver Negotiated Capacity under this agreement due to such an interruption
in transmission shall be deemed to be an event of force majeure excusing
performance.
This offer uses the current quote for Firm Point-to-Point transmission of
$1,400/MW-Month on the ComEd transmission system. Any increase in Firm
Transmission service charges incurred by ComEd above the quote of $1,400/MW-
Month will be passed on directly to UPPCO.
If Firm Transmission Service for delivery of this Negotiated Capacity over
WEPCO's system to UPPCO's system is unavailable to UPPCO, and UPPCO so
notifies ComEd no later than November 30, 1997, UPPCO may terminate this
Agreement by providing to ComEd such notice of unavailability.
If Firm Transmission Service for delivery of this Negotiated Capacity from
ComEd's system to WEPCO's system is unavailable to ComEd, and ComEd so
notifies UPPCO no later than November 30, 1997, ComEd may terminate this
Agreement by providing to UPPCO such notice of unavailability.
ComEd requires that the information in this proposal be kept confidential.
Applicable law may, however, require some form of public disclosure by ComEd
or UPPCO.
Please indicate that this is your understanding of our Agreement by signing
and returning this Agreement to the undersigned. If you desire to retain an
original copy of this Agreement, we will provide a duplicate original copy
upon request.
If you have any questions regarding this proposal, you may contact Fred
Hillger, (312)394-5913.
Very truly yours,
Robert E. Tyler
Bulk Power Marketing
Vice President
Agreed:
Upper Peninsula Power Company
By /s/ Neil D. Nelson
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Neil D. Nelson
Title Vice President-Operations
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