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Exhibit 10.66
INTERCONNECTION AGREEMENT
BY AND BETWEEN
THE CONNECTICUT LIGHT AND POWER COMPANY
AND
NRG ENERGY, INC.
July 1, 1999
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INTERCONNECTION AGREEMENT
This Interconnection Agreement (the "Agreement"), dated July 1, 1999 by
and between The Connecticut Light and Power Company ("Seller"), a Connecticut
corporation-with a principal place of business located at 107 Selden Street,
Berlin, Connecticut and NRG Energy, Inc., a Delaware corporation with its
principal place of business atl22l Nicollet Mall, Suite 700, Minneapolis,
Minnesota ("Buyer"). The Seller and the Buyer are each referred to herein as a
"Party" or, collectively, the "Parties."
WITNESSETH:
WHEREAS, Seller and Buyer have entered into a Purchase and Sale
Agreement dated July 1, 1999 (the "Purchase and Sale Agreement") for the sale of
certain of Seller's generating assets; and
WHEREAS, Seller and/or its Affiliates intend to continue to operate
their transmission and distribution businesses from their present locations; and
WHEREAS, in the Purchase and Sale Agreement, Seller agreed to transfer
to Buyer certain designated real and personal properties, contracts, rights and
licenses pertaining to Seller's generating assets and to retain certain
designated real and personal properties, contracts, rights and licenses related
to Seller's transmission and distribution operations; and
WHEREAS, the Parties have agreed to enter into a mutually acceptable
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Demarcation Agreement evidencing their agreement as to the demarcation between
certain of such transferred and retained assets that will not be situated wholly
on real property owned or to be owned by the respective owners of such assets
after the Closing under the Purchase and Sale Agreement ("Asset Demarcation
Agreement"); and
WHEREAS, Buyer needs Interconnection Service from Seller for the assets
it is acquiring; and
WHEREAS, Seller and its Affiliates need access to parts of the assets
being acquired by the Buyer and the Buyer needs access to the assets that are
being acquired that are located on the property of the Seller; and
WHEREAS, the Parties agreed in the Purchase and Sale Agreement to
execute this mutually acceptable Interconnection Agreement in order to provide
for the Seller's interconnection service to the Buyer and to define the
continuing responsibilities and obligations of each Party with respect to the
use of the other Party's property, assets and facilities.
NOW THEREFORE, in order to carry out the transactions contemplated by
the Purchase and Sale Agreement, the Asset Demarcation Agreement, and this
Agreement, and in consideration of the premises and mutual promises herein made,
the Seller and the Buyer agree as follows:
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1. DEFINITIONS
Whenever used in this Agreement as capitalized terms, the following
terms shall have the meanings specified in this section. Capitalized terms used
but not otherwise specifically defined herein shall have the meaning ascribed to
them in the Purchase and Sale Agreement.
"Access Rights" shall mean all Easements, the Reserved Easements, the
Granted Easements, all licenses granted pursuant to Section 3.2.1 and all other
easements granted by one Party to the other.
"Acquired Assets" has the meaning set forth in Section 2.1 of the
Purchase and Sale Agreement.
"AC Service Power" means the AC service power purchased by the Buyer
from its suppliers for purposes of backing-up station service loads on a
generation site.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under j the Securities Exchange Act (17 C.F.R. 240-12b-2).
"Closing" means the closing of the transactions contemplated by the
Purchase and Sale Agreement.
"Closing Date" means the date and time at which the Closing actually
occurs.
"CONVEX" means the Connecticut Valley Electric Exchange or any
successor organization which operates as a satellite to or the ISO.
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"Distribution System" means those electric energy delivery facilities
not classified as Transmission System by Seller that are owned, controlled or
operated by Seller or its Affiliates and that provide delivery service to or
from the Transmission System.
"Environment" means soil, land surface or subsurface strata, real
property, surface waters, groundwater, wetlands, sediments, drinking water
supply, ambient air (including indoor air) and any other environmental medium or
natural resource.
"Environmental Claim" means a claim by any Person based upon a breach
of Environmental Law or an Environmental Liability alleging loss of life, injury
to persons, property .or business, damage to natural resources or trespass to
property.
"Environmental Laws" means all applicable Laws and any binding
administrative or judicial interpretations thereof relating to: (a) the
regulation, protection and use of the Environment; (b) the conservation,
management, development, control and/or use of land (including zoning laws and
ordinances), natural resources and wildlife; (c) the management, manufacture,
possession, presence, use, generation, transportation, treatment, storage,
disposal. release, threatened release, abatement, removal, remediation, or
handling of, or exposure to, any Hazardous Substances; or (d) noise; and
includes, without limitation, the following federal statues (and their
implementing regulations): the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended; the
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Solid Waste Disposal Act, as amended, 42 U.S.C. Section 6901 et seq.; the
Federal Water Pollution Control Act of 1972, as amended, 33 U.S.C. Section 1251
et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. Section
2601 et. seq.; the Clean Air Act of 1966, as amended, 42 U.S.C. Section 740 1
et. seq.; the Federal Insecticide, Fungicide, and Rodenticide Act, as amended, 7
U.S.C. Section 136 et. seq.; the Coastal Zone Management Act of 1972, as
amended, 16 U.S.C. Section 1451 et seq.; the Oil Pollution Act of 1990 as
amended, 33 U.S.C. Section 2701 et seq.; the Rivers and Harbors Act of 1899, as
amended, 33 U.S.C. Section 401 et seq.; the Hazardous Materials Transportation
Act, as amended, 49 U.S.C. Section 1801 et seq.; the Endangered Species Act of
1973, as amended, 16 U.S.C. Section 1531 et seq.; and the Safe Drinking Water
Act of 1974, as amended, 42 U.S.C. Section 300(f) et seq.; and all analogous or
comparable state statutes and regulations, including, without limitation, the
Connecticut Transfer Act, as amended, CGS Section 22a-134 et seq.; and the
Connecticut Remediation Standard Regulations, RCSA Section 22a-l33k-l et seq.
"Environmental Liabilities" means any Liability under or related to
Environmental Laws arising as a result of or in connection with (i) any
violation or alleged violation of Environmental Law; (ii) any Environmental
Claims caused (or allegedly caused) by the presence or Release of Hazardous
Substances; (iii) the investigation and/or Remediation of Hazardous Substances;
(iv) compliance with Environmental Laws; (v) any Environmental Claim arising
from or relating to the
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off-site disposal, treatment, storage, transportation, discharge, Release or
recycling, or the arrangement for such activities, of Hazardous Substances; and
(vi) the investigation and/or remediation of Hazardous Substances that are
generated, disposed, treated, stored, transported, discharged, Released,
recycled, or the arrangement of such activities at any Offsite Disposal
Facility.
"FERC" means the Federal Energy Regulatory Commission, or any successor
thereto.
"Fossil Stations" means that portion of the Acquired Assets (subject to
the Easements and the Excluded Assets, as defined in the Purchase and Sale
Agreement) consisting of the Seller's Montville, Middletown, Devon, and Norwalk
Harbor Facilities.
"Good Utility Practice" means any of the practices, methods and acts
engaged in or approved by a significant portion of the electric utility industry
during the relevant time period which, in the exercise of reasonable judgment in
light of the facts known at the time the decision was made, could have been
expected to accomplish the desired result at a reasonable cost consistent with
good business practices, reliability, safety, and expedition. Good Utility
Practice is not intended to be limited to the optimum practice, method, or act
to the exclusion of all others, but rather to be acceptable practices, methods,
or acts generally accepted in the region.
"Hazardous Substance" means (a) any petrochemical or petroleum
products,
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oil, waste oil, asbestos in any form that is or could become friable, urea
formaldehyde foam insulations, lead-based paint and polychlorinated biphenyls;
(b) any products, mixtures, compounds, materials or wastes, air emissions, toxic
substances, wastewater discharges and any chemical, material or substance that
may give rise to liability pursuant to, or is listed or regulated under, or the
human exposure to which or the Release of which is controlled or limited by
applicable Environmental Laws; and (c) any materials or substances defined in
Environmental Laws as "hazardous", "toxic", "pollutant", or "contaminant", or
words of similar meaning or regulatory effect.
"Indemnifying Party" has the meaning set forth in Section 10.1.
"Interconnection Facilities" means facilities or portions of facilities
located between each Interconnection Point and the PTF that are identified as
Interconnection Facilities and Associated Equipment in Schedule A hereto, as
amended from time to time.
"Interconnection Facilities Charge" has the meaning set forth in
Schedule 5.1.1.
"Interconnection Point" means the point for each Acquired Asset at
which the electric energy generated by such Acquired Asset enters the Seller's
Transmission System or Distribution System. The Interconnection Points are as
specified in Schedule A to this Agreement.
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"Interconnection Service" means all of the services necessary for the
purpose of interconnecting the Buyer's Acquired Assets with the Transmission
System or the Distribution System and delivering the output of the Acquired
Assets over the Interconnection Facilities to the PTF.
"ISO" means ISO New England Inc., the independent system operator for
the New England control area, or its successor.
"Joint Tag List" means the personnel approved by Buyer and Seller who
meet the requirements to switch, tag, and ground electrical equipment set forth
in CONVEX Operating Instruction No. 6401, Protective Switching and Tagging
Procedures, effective September 1, 1992.
"Leased Equipment" means hardware or software leased by Seller from
various third-party suppliers which is not directly transferable or assignable
to Buyer.
"Local Services" has the meaning set forth in Section 3.9.1.
"Maintain" means construct, reconstruct, install, inspect, repair,
replace, operate, patrol, maintain, use, modernize, expand, upgrade, or other
similar activities.
"NEPOOL" means the New England Power Pool, established by the NEPOOL
Agreement, or its successor.
"NEPOOL Agreement" means the New England Power Pool Agreement dated as
of September 1971, as amended by the Restated NEPOOL Agreement filed with FERC
on July 22, 1998 as finally approved by FERC and, as further amended
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from time to time.
"NEPOOL Tariff" means the Restated NEPOOL Open Access Transmission
Tariff as filed with FERC on July 22, 1998 and as it may be amended from time to
time.
"NERC" means the North American Electric Reliability Council, or any
successor thereto.
"NPCC" means Northeast Power Coordinating Council, or any successor
thereto.
"OASIS" means Open Access Same Time Information System.
"Pool Transmission Facilities" or "PTF" means the transmission
facilities of Seller and other transmission owners in New England, as defined by
the NEPOOL Agreement.
"Primary System" means bulk power equipment such as transformers,
circuit breakers, rigid or strain bus, conductors, cables and other equipment
operating at 2,400 volts or above.
"Qualified Personnel" has the meaning set forth in 29 C.F.R.Section
19l0.269(x).
"Rate 30" means the rate charged by Seller attached hereto as Schedule
J, or its successor rate.
"Release" means any actual, threatened or alleged spilling, leaking,
pumping, pouring, emitting, dispersing, emptying, discharging, injecting,
escaping, leaching,
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dumping, or disposing of any Hazardous Substance into the Environment that may
cause an Environmental Liability (including the disposal or abandonment of
barrels, containers, tanks or other receptacles containing or previously
containing any Hazardous Substance).
"Remediation" means any or all of the following activities to the
extent required to address the presence or Release of Hazardous Substances: (a)
monitoring, investigation, assessment, treatment, cleanup containment, removal,
mitigation, response or restoration work as well as obtaining any permits,
consents, approvals or authorizations of any Governmental Authority necessary to
conduct any such activity; (b) preparing and implementing any plans or studies
for any such activity; (c) obtaining a written notice from a Governmental
Authority with competent jurisdiction under Environmental Laws or a written
opinion of a (i) Licensed Environmental Professional (as defined in C.G.S.
Section 22a - 133v) as contemplated by the relevant Environmental Laws and in
lieu of a written notice from a Governmental Authority, that no material
additional work is required; and (d) any other activities reasonably determined
by a party to be necessary or appropriate or required under Environmental Laws.
"Revenue Meters" means all kWh, kVAh, and kVARh meters, pulse isolation
relays, pulse conversion relays, associated totalizing and Remote Access Pulse
Recorder (RAPR) equipment required to measure the transfer of energy between the
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Parties.
"Right of Way Access" means use of existing gates, roadways, paths or
other means of access to gain entry to the Transmission System and Distribution
System rights of way from the Buyer's property or facilities.
"Routine Inspection and Maintenance" means any inspection,
measurements, meter readings and/or maintenance work in the exercise of Good
Utility Practice on either Party's property or facilities to ensure reliable
substation, Transmission System and Distribution System operations and
Transmission System and Distribution System integrity.
"SCADA Equipment" means Supervisory Control and Data Acquisition
equipment.
"Secondary Systems" means control or power circuits that operate below
600 volts, AC or DC, including but not limited to any hardware, control or
protective devices, cables, conductor, electric raceways, secondary equipment
panels, transducers, batteries, chargers, and voltage and current transformers
whose signals or energy may be used by Buyer, Seller, or their respective
Affiliates.
"Structural Facilities" has the meaning set forth in Section 3.7.
"Switching, Tagging, and Grounding Rules" has the meaning set forth in
CONVEX Operating Instruction #640 1, Protective Switching and Tagging
Procedures, effective September 1, 1992, or relevant successor provisions as in
effect
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from time to time. A copy of the existing Switching, Tagging and Grounding Rules
is attached hereto as Schedule D and incorporated by reference as if fully set
forth herein.
"T&D Assets" means the Seller's transmission, distribution,
communication, substation and other assets which are not Acquired Assets and
which are not necessary to the operation of the Acquired Assets and/or which are
necessary to the operation of the Transmission System or the Distribution
System.
"Transmission System" means the PTF and non-PTF facilities owned,
controlled or operated by Seller or its Affiliate for purposes of providing
point-to-point transmission service, network integration transmission service,
and Interconnection Service, including services under the NEPOOL Open Access
Tariff.
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2. TERM OF AGREEMENT
2.1. Term and Termination of Agreement. The obligations of the
Parties under this Agreement shall commence on the Closing Date and shall remain
in effect until such time as both Parties mutually agree to terminate them;
provided, however, that this Agreement shall terminate (x) with respect to any
Acquired Asset, or unit thereof, upon the date such Acquired Asset is
decommissioned, or (y) in accordance with Section 13. If (i) a change in law or
other circumstance substantially affects Seller's provision of Interconnection
Service, or (ii) FERC requires a modification to this Agreement that is
unacceptable to either Party, the Parties will negotiate in good faith to amend
this Agreement in a manner acceptable to FERC.
3. CONTINUING OBLIGATIONS AND RESPONSIBILITIES
3.1. Interconnection Service. The Seller agrees to provide
Interconnection Service to the Acquired Assets in accordance with the operating
procedures and practices set forth in Schedules E and F hereto and Good Utility
Practice. Each of the Acquired Assets for which Buyer is requesting
Interconnection Service shall require the associated Interconnection Facilities
described in Schedule A. Seller shall connect the Acquired Assets to the
Transmission System or the Distribution System at the respective Interconnection
Points specified in Schedule A. Seller agrees to permit Buyer to interconnect
the Acquired Assets for so long as Buyer continues to operate the Acquired
Assets in accordance with Good Utility Practice.
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Interconnection Service shall enable Buyer to receive generating station service
from Buyer's supplier at the respective Interconnection Points if Buyer does not
supply its own generating station service to the Acquired Assets in a manner
that does not use the Transmission System or Distribution System. Buyer or its
supplier shall be responsible for making arrangements under the applicable
tariffs for transmission and ancillary services associated with the receipt of
generating station service using the Transmission System or Distribution System
or the PTF.
Seller shall operate and maintain the Interconnection Facilities in
accordance with Good Utility Practice. In the event Seller reasonably determines
that modifications by Buyer to its existing generation interconnection requires
an addition to or modification of the Interconnection Facilities, Seller shall
notify Buyer of the necessity of the addition or modification and the resulting
change in the effective Interconnection Facilities Charge. Seller is not aware
of any material additions to or modifications of the Interconnection Facilities
which are or in the foreseeable future may be required for the interconnection
of the Acquired Assets, other than as may be required for maintenance of the
Interconnection Facilities in accordance with Good Utility practice. If Buyer
agrees on the need for the addition or modification or a dispute is resolved in
accordance with Section 13 in favor of the need therefor, Seller shall file the
necessary amendments to this Agreement with FERC, and upon FERC acceptance for
filing of such amendment, Seller shall install the modification or
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addition and Buyer shall pay the costs thereof in accordance with Section 5.
Seller shall have no responsibility for any diminution in the quality of
Interconnection Service directly attributable to the absence of such addition or
modification. Significant changes in the Acquired Assets or their capacity will
require Buyer to follow NEPOOL Section 18.4 procedures where applicable.
3.2. Access, Easements. Conveyances, Licenses, and Restrictions.
3.2.1. Access. (a) The Parties agree to grant to each
other access, including Right of Way Access, to such of their respective
facilities, properties, equipment and records as may be necessary to enable each
Party to Maintain its respective facilities, properties, equipment and records
in a manner consistent with Good Utility Practice. Such access shall be provided
in a manner that does not unreasonably interfere with the ongoing business
operations, rights and obligations of the other Party.
(b) Buyer hereby grants to Seller and its Affiliates a
license for its Qualified Personnel to gain . access to all of their substation
equipment, Transmission System or Distribution System, Secondary Systems and
telecommunications systems and facilities that are located on Buyer's property.
(c) Seller hereby grants to Buyer a license for Buyer's
Qualified Personnel to gain access to all of the Acquired Assets located on
property of the Seller.
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(d) The Access Rights are intended to be permanent and
shall not be revoked, nor shall either Party take any action that would impede,
restrict, diminish, or terminate the rights of access or use granted by such
Access Rights. Notwithstanding the foregoing, (i) should either Party or its
successor decide to permanently abandon the use of any Access Right or portion
thereof, such Party shall give the other Party written notice of its
abandonment, shall remove its properties from the area to be abandoned, perform
any Remediation required by applicable Environmental Laws, and shall cause a
release of such Access Rights or any portion thereof to be recorded in the
appropriate Registry of Deeds; and (ii) the Parties may mutually agree to
relocate or expand any or all of the Access Rights locations within a Fossil.
Station, provided, however, that the Party requesting the relocation or
expansion shall pay all reasonable costs and expenses associated therewith, and
the Parties shall execute or obtain, in a form reasonably satisfactory to both
Parties, all instruments necessary to establish the new easement location. Both
Parties agree to use their best efforts to establish a mutually agreeable
location if so requested.
(e) Buyer shall grant Seller and Seller shall grant
Buyer such additional conveyances, easements, or licenses as are reasonably
necessary for ownership, possession, maintenance, operation, or repair of the
respective Party's equipment and facilities as long as such conveyances,
easements or licenses do not have a material adverse impact upon the other
Party's operations and are consistent
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with the purpose of this Agreement and the Purchase and Sale Agreement.
3.2.2. Each Party shall provide the other Party keys,
access codes, or other means of access necessary to enter each other's
facilities or properties. Access shall be granted only to Qualified Personnel.
If personnel who are not Qualified Personnel require access, Qualified Personnel
shall escort them while on site.
3.2.3. Neither Party shall make changes to the site
topography or accesses, including but not limited to grading or drainage, that
could reasonably be expected to materially adversely affect the other Party's
facilities or common use drainage or pollution control systems, without the
prior written consent of the other Party, such consent not to be unreasonably
withheld.
3.2.4. Each Party shall have the right to use and maintain
its control cables in existing underground duct banks located on the property of
the other Party, including duct banks between Seller's substation and the first
point of termination in a Fossil Station.
3.3. Facility and Equipment Maintenance.
Each Party shall Maintain its equipment and facilities and
perform its maintenance obligations that could reasonably be expected to affect
the operations of the other Party pursuant to Good Utility Practice. Buyer shall
be responsible for maintenance of all common use roadways and plant accesses in
or about the Fossil Stations. Unless otherwise specified herein, or unless the
parties mutually agree to a
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different arrangement, neither Party shall be responsible for the maintenance of
the other Party's equipment or Secondary Systems, regardless of their location.
3.4. Equipment Testing.
Each Party may request, pursuant to Good Utility Practice,
that the other Party test, calibrate, verify or validate its telemetering, data
acquisition, protective relay, control equipment or systems or other equipment
or software pursuant to Good Utility Practice (which currently requires such
action on an annual basis) or for the purpose of troubleshooting problems on
interconnected facilities, consistent with the other Party's obligation to
Maintain its equipment and facilities. Each Party shall be responsible for all
costs to test, calibrate, verify or validate its equipment or software at
intervals required by NEPOOL, NERC or NPCC. The requesting Party shall be
responsible for all costs of the other Party associated with more frequent
requests. Each Party shall supply the other Party requesting the test, at no
cost to such Party, with copies of the resulting inspection reports,
installation and maintenance documents, test and calibration records,
verifications and validations of the telemetering, data acquisition, protective
relay, or other equipment or software connected to the Transmission System or
Distribution System.
3.5. New Construction or Modifications.
Seller may construct or modify its Transmission System and
Distribution System, including associated telecommunication facilities, pursuant
to
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Good Utility Practice, and Buyer may construct or modify its Acquired Assets
pursuant to Good Utility Practice. Notwithstanding the foregoing, no
modifications to or new construction of facilities or access thereto, including
but not limited to rights of way, fences or gates shall be made by either Party
which might reasonably be expected to adversely affect the other Party with
respect to its rights, obligations and responsibilities under this Agreement,
without prior written notification and without providing the other Party with
sufficient information regarding the work prior to commencement to enable such
Party to evaluate the effect of the proposed work on its operations.
If a proposed modification would reasonably be expected' to affect the
Transmission System or Distribution System, both Parties agree to comply with
Good Utility Practice in a manner that complies with NEPOOL CRS 43, the NPCC's
"Basic Criteria for Design and Operation of Interconnected Power Systems," or
any successor criteria and all applicable operating rules, regulations
procedures and interconnection standards of the Seller as each may be modified
from time to time. For all construction work, major modifications, or circuit
changes involving new or existing facilities, equipment, systems or circuits
that could reasonably be expected to affect the operation of either Party, the
Party desiring to perform such work shall provide the other Party with drawings,
plans, specifications, and other necessary documentation for review at least
sixty days prior to the beginning of construction;
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provided that if either Party contemplates a modification that would require the
other Party to make associated changes at its facilities, that Party shall
promptly provide written notice thereof to the other Party and shall keep the
other Party fully informed as its plans develop. The Parties shall cooperate in
good faith to coordinate the start of construction required by each Party in
connection with such proposed modification. If Seller constructs new or upgraded
transmission or distribution facilities at the request of Buyer, Buyer shall pay
the costs thereof in accordance with Section 5.
3.6. Inspections.
Each Party shall have the right to inspect or observe, at its
own expense, the maintenance activities, equipment tests, installation,
construction, or other modifications to the other Party's Acquired Assets or T&D
Assets and associated telecommunication facilities, as the case may be, which
might reasonably be expected to adversely affect the observing Party's
operations or liability. The Party desiring to inspect or observe shall notify
the other Party in accordance with the notification procedures set forth herein.
If the Party inspecting the equipment, systems, or facilities observes any
deficiencies or defects that might reasonably be expected to adversely affect
the operations or liability of the observing Party, that Party shall notify the
Party owning the equipment or systems, and the owning Party shall make any
corrections necessitated by Good Utility Practice.
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3.7. Common Structural Facilities.
The Asset Demarcation Agreement delineates certain facilities
that will be part of the Acquired Assets or the T&D Assets, which are supported
on or within structures or buildings belonging to the other Party (the
"Structural Facilities"). Each Party shall maintain the Structural Facilities
that it owns in accordance with Good Utility Practice. The Parties shall conduct
an initial inspection of all such Structural Facilities prior to Closing. Seller
shall then make any corrections necessitated by Good Utility Practice. In the
case of Structural Facilities owned by Buyer upon which Seller has installed
Transmission System or Distribution System or telecommunications equipment,
Seller shall have the right to inspect such Structural Facilities annually
pursuant to Section 3.6 and provide Buyer with a report documenting any
deficiencies. Buyer shall then make any corrections necessitated by Good Utility
Practice, In the case of Structural Facilities owned by Seller upon which Buyer
has installed Acquired Assets, Buyer shall have the right to inspect such
Structural Facilities annually pursuant to Section 3.6 and provide Seller with a
report documenting any deficiencies. Seller shall then make any corrections
necessitated by Good Utility Practice.
3.8. Information Reporting Obligations.
Notwithstanding anything to the contrary in this Agreement,
any obligation set forth in this Agreement of Buyer to provide information,
reports, or
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data to Seller shall be subject to the following limitations: (a) such
information, reports, or data shall be subject to the provisions of Section 7
concerning confidentiality; (b) Buyer shall be required to provide such
information, reports or data only to the extent Seller reasonably requires such
information to operate, maintain, or plan its Transmission System or the
Distribution System pursuant to Good Utility Practice; (c) Seller shall request
information, reports, and data from Buyer on a non-discriminatory basis with
respect to generators interconnected to the Transmission System or Distribution
System, as necessary, in Seller's reasonable judgment, for the purposes set
forth in clause (d), below; (d) Seller shall use any information provided by
Buyer pursuant to this Agreement only for the purposes of operating, maintaining
and planning the Transmission System or the Distribution System pursuant to Good
Utility Practice; and (e) if and to the extent that any of the functions for
which Seller requires certain information, reports, or data is no longer
performed by Seller, which function has been adequately assumed by the ISO,
Buyer's provision of such information, reports, or data to the ISO shall satisfy
its corresponding obligation under this Agreement.
3.8.1. In order to maintain Interconnection Service, Buyer
shall promptly provide Seller with all information which could reasonably be
expected to affect the Transmission System and which is reasonably requested by
NERC, NPCC, NEPOOL, CONVEX, the ISO, or Seller's dispatching functions. Buyer
shall also
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provide to Seller or to the ISO at Seller's or the ISO's request 'all
information regarding its generating facilities needed by the 1SO to model and
study transmission system responses to system contingencies and disturbances.
3.8.2. Buyer shall supply accurate, complete, and reliable
information in response to data requests necessary for operations, maintenance,
regulatory requirements and analysis of the Transmission System or the
Distribution System. Such information may include metered values for MW, MVAR,
voltage, current, frequency, breaker status indication, or any other information
reasonably required by Seller for reliable operation of the Transmission System
or of the Distribution System pursuant to Good Utility Practice. To Seller's
knowledge, the equipment for the reporting of real-time information in response
to data requests existing on the Effective Date is adequate to meet such
information requirements.
3.8.3. Buyer shall gather information pertaining to
generation, transmission and distribution operating parameters for transmittal
to Seller using existing remote access systems.
3.8.4. Seller shall provide information to Buyer
concerning the status and/or condition of the Transmission System and parts
thereof in accordance with the requirements of FERC Orders 888 and 889 and any
successors thereto, including in particular any requirements pertaining to the
provision of information affecting the availability of transmission services
over an OASIS maintained by Seller or the ISO
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on Seller's behalf.
3.9. Local Services.
3.9.1. In addition to the Interconnection Service, the
Parties agree that, due to the integration of certain control schemes, revenue
metering applications, and communication networks, it is desirable to provide
each other with the services set forth in Sections 3.10 and 3.11 ("Local
Services") at no cost. The Parties shall use their best efforts to ensure that
such Local Services are available at all times in the manner specified herein.
Notwithstanding the foregoing, either Party, upon notice to the other, may
change the Local Services it provides, provided that there is no cost to the
receiving Party and the quality, reliability and integrity of the replacement
Local Services are equivalent to the then existing services. If service could be
interrupted as a result of the change, the Party proposing to make the change
shall give ten working days prior written notice of the change to the other
Party. Neither Party shall terminate its Local Services without the other
Party's written consent; provided, however, if either Party no longer needs or
desires a particular Local Service, such Party shall notify the other Party and
the Party providing the Local Service shall terminate such service as soon
thereafter as practicable.
3.9.2. Temporary Suspension of Section 3.10 and 3.11
Services. The Party. providing the Local Services set forth in Sections 3.10 and
3.11 below shall
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notify and obtain approval from the other Party of any scheduled temporary
suspension of Local Services at least five working days in advance of such
suspension. Such notification shall include an estimated time duration for a
return to normal conditions. In the event of any unplanned or forced suspension
of the Local Services set forth in Sections 3.10 and 3.11 below, the Party
providing the Local Service shall immediately notify the other Party first
orally and then in writing. The notifying Party shall use all reasonable efforts
to minimize the duration of such suspension. The Parties~agree to use all
reasonable efforts to complete any repairs, modifications or corrections that
are necessary to restore suspended Local Services pursuant to Section 3. 10 and
3.11 below to the other Party as soon as reasonably practicable. The Party
temporarily suspending the Local Services shall reimburse the other Party for
the reasonable costs incurred by the other Party in obtaining equivalent Local
Services.
3.10. Seller Provided Local Services.
3.10.1. Delivers' Service. At Seller's expense, Seller shall
maintain the facilities necessary for it to deliver to Buyer the AC Service
Power in the quantities, at the levels, and in the substation locations where
such power is provided over facilities included in the T&D Assets immediately
prior to Closing. At no cost to Buyer, Seller shall allow Buyer's relays and
controls that are currently dependent upon Seller's batteries for DC service
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power to continue to take such DC service power from Seller's facilities (or
shall otherwise provide such service) in the quantities, at the levels and in
the locations where such power is provided from the Seller's facilities
immediately prior to the Closing.
3.10.2. Building Services. At Seller's expense, Seller
shall provide Buyer with heating, ventilation, air conditioning, lighting, and
other building services at the levels in existence for winter and summer
conditions immediately prior to Closing, for Buyer's storage spaces, offices and
relay or control equipment within Seller's T&D Assets. If Buyer desires a higher
level of service, Buyer and Seller shall mutually agree upon the upgrade and
price for such upgrade and Buyer shall pay Seller for the upgrade.
3.10.3. Metering. Buyer shall acquire and own all revenue
metering equipment and Seller shall own all metering equipment for AC Service
Power if used solely for that purpose. Seller shall maintain, control and repair
all revenue meters and station service meters, conduct meter accuracy and
tolerance tests, and prepare all calibration reports required for equipment that
measures energy transfers between Buyer and Seller. Such reports shall be in
accordance with NEPOOL CRS-13, as amended from time to time, and any applicable
requirements of state public utilities commissions. The Parties agree that if
the meter equipment and the Interconnection Point are not at the same location
electrically, the meter shall be compensated to record delivery of electricity
in a mutually agreed upon manner that accounts for
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energy losses occurring between the meter and the Interconnection Point, both
when the generating unit is delivering energy to Seller and when Seller is
delivering AC Service Power to the Buyer.
If at any time any metering equipment owned by the Buyer is
found to be inaccurate by a margin of error greater than that allowed under the
applicable NEPOOL Criteria, Rules and Standards and ,such equipment cannot be
repaired, Seller shall cause such metering equipment to be replaced at Buyer's
expense. Meter readings for the period of inaccuracy shall be corrected so far
as corrections can be reasonably ascertained, provided that the period for which
such corrections are made shall not exceed twelve (12) months. Each Party shall
comply with any reasonable request of the other concerning the sealing of
meters, the presence of a representative of the other Party when the seals are
broken and the tests are made, and other matters affecting the accuracy of the
measurement of electricity delivered to or from each Acquired Asset. If either
Party believes that there has been a meter failure or stoppage, it shall
immediately notify the other. Revenue Meter locations at the Effective Date are
set forth on Schedule B hereto.
In order for Seller to meet its reporting obligations to the
ISO, Buyer shall provide Seller daily telephone access to hourly interval data
recording meters enabling Seller to derive (1) net generation at the
Interconnection Point and (2) generating station service loads when a plant is
not generating. The data recording
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meters may be either net generation meters or a combination of gross generation
and generation station service load meters. In the event of telephone
communication failure, Buyer shall report the hourly interval net generation
data values to Seller by facsimile by 8:00 a.m. on the day following the day of
generation. In the event of meter failure, Buyer shall provide Seller informed
and intelligent estimates of the hourly net generation data by 8:00 a.m. on the
day following the day of generation. Seller is engaged, on the Effective Date,
in completing efforts to install, prior to the Closing Date, appropriate revenue
meters at each location where such meters are required such that all meters and
other equipment and facilities necessary for Buyer to comply with its
obligations under this paragraph shall be met by the Closing Date.
3.10.4. Line Operation Information. Both Parties shall
require remote access to available site specific line operation information at
Seller's facilities. Seller shall make such information available to Buyer over
OASIS in accordance with FERC Order 889 and any successor orders thereto.
3.10.5. Remote Terminal Units. Seller may continue to own
and operate remote terminal units (RTU's) that are associated with CONVEX
control at each of Buyer's Fossil Stations where such RTUs are located
immediately prior to the Closing.
3.10.6. Relaying Systems. Seller shall own, maintain and
test all protective relaying equipment that protects its T&D Assets. Where
protective
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relaying equipment protects property of both Parties, the ownership of such
equipment shall be as set forth in the Asset Demarcation Agreement.
3.11. Buyer Provided Local Services.
3.11.1. Seller's Facility Support. For so long as the
Acquired Assets continue to operate as an electric generation facility, at no
cost to Seller, Buyer shall allow Seller's facilities that are currently
dependent upon the Acquired Assets for station service support to continue to
take AC and DC station service power from the Acquired Assets in the quantities,
at the levels and in the locations where such power is provided from the
Acquired Assets immediately prior to the Closing. If Buyer decorn.missions any
Acquired Asset such that it is no longer operating as an electric generating
facility, Buyer shall permit Seller to continue to obtain station service power
from Buyer's facilities at a cost to be agreed upon by the Parties. Any upgrade
in the level of support hereafter requested by Seller shall be mutually agreed
upon by the Parties.
3.11.2. Building Services. At no cost to Seller, Buyer
shall own, repair, maintain and provide Seller with heating, ventilation, air
conditioning, lighting, and other building services at the levels in existence
for winter and summer conditions, immediately prior to Closing, for areas within
Buyer's Acquired Assets used by the Seller for relay, control and communications
equipment and cables, offices, control rooms, or other related transmission
functions. Seller shall have the
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right to expand its equipment and facilities within the control room space
existing at the Closing Date which it will share with Buyer with the written
consent of Buyer, which consent shall not be unreasonably withheld. If Seller
desires a higher level of service, Seller and Buyer shall mutually agree upon
the upgrade and Seller shall pay for such upgrade.
3.12. Communications Services.
3.12.1. General. Buyer shall acquire and maintain
appropriate channels of communication as required by the ISO and CONVEX. Buyer
may at its option use Seller's communication equipment for necessary microwave
services, on the condition that Buyer will become a participant in the Shared
Telecommunications Network (SIN) and will abide by the terms and conditions of
the SIN Agreement dated June 1, 1990, a copy of which is attached hereto as
Schedule D and incorporated by reference as if fully set forth herein.
3.12.2. Radio Licenses. Existing radio licenses shall be
retained by Seller or its Affiliates. Buyer shall establish its own separate
frequencies.
3.12.3. Upgrades. Seller shall, after providing notice to
Buyer in accordance with this Agreement, at its own expense, have the right to
modify, add or upgrade communication equipment including but not limited to
antennas, waveguides and cables on Buyer's Acquired Assets as required for
Transmission System or Distribution System operations, provided that such
upgrades have no
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adverse impact upon Buyer's operation of its Acquired Assets, shall not require
Buyer to incur any costs, unless reimbursed by Seller for such costs, shall not
result in any liability for the Buyer, and are installed, operated and
maintained by the Seller in accordance with applicable laws, regulations, rules
and permits.
3.12.4. Maintenance. Seller shall be responsible for
maintaining equipment and cables necessary to connect its communication
equipment to other equipment in the Buyer's facility to which communication
services are provided or to access an outside facility or telecommunication
service provider for communication purposes.
3.13. Spare Parts.
Where practicable and available, each Party shall provide the
other Party with spare parts in the event of emergencies or equipment failures.
The Parties shall mutually agree upon payment for or replacement of such spare
parts. If Buyer desites Seller to maintain spare parts that are not in Seller's
possession, and if Seller has the physical space to do so, Seller shall maintain
such parts, at Buyer's expense.
3.14. Emergency Procedure.
Seller shall provide Buyer's designee under Section 19 with
prompt oral notification of Transmission System or Distribution System
emergencies which may reasonably be expected to affect Buyer's immediate
operation of the Acquired Assets and Buyer shall provide Seller's designee under
Section 19 with prompt oral
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notification of generation equipment emergencies which may reasonably be
expected to affect Seller's or its Affiliates' operations. Such oral
notification shall be followed within 24 hours by written notification. The
written notification shall describe the extent of damage or deficiency,
anticipated length of outage and the corrective action.
If in the good faith judgment of either Party, an emergency
endangers or could endanger life or property, the Party recognizing the problem
shall take such action as may be reasonable and necessary to prevent, avoid, or
mitigate injury, danger, or loss in accordance with CONVEX Operating
Instructions, No. 6401, Section l.D.
Seller may, consistent with Good Utility Practice, request
that the ISO take whatever actions or inactions it deems necessary during
emergency operating conditions to: (i) preserve public safety; (ii) preserve the
integrity of the Transmission System, (iii) limit or prevent damage, or (iv)
expedite restoration of service.
3.15. Interconnection Service Interruptions.
If the ISO, CONVEX, or, with respect to portions of the
Transmission System or the Distribution System subject to Seller's dispatch,
Seller, reasonably determines that the Buyer's operation of its Acquired Assets
is inconsistent with Good Utility Practice and will have an adverse impact on
the quality of service or
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interfere with Seller's safe and reliable operation of the Transmission System
or the Distribution System, Seller may discontinue Interconnection Service until
the condition has been corrected. Unless the ISO, CONVEX, or Seller determines
that an emergency exists or the risk of an emergency is imminent, Seller shall
give Buyer reasonable notice of its intention to discontinue Interconnection
Service and, where practicable, allow suitable time for Buyer to remove the
interfering condition. Seller's judgment with regard to the interruption of
service under this paragraph shall be made pursuant to Good Utility Practice. In
the case of such interruption, Seller shall immediately confer with Buyer
regarding the conditions causing such interruption and its recommendation
concerning timely correction thereof. In the event Interconnection Service is
interrupted under this section due to Buyer's failure to operate and maintain
the Acquired Assets pursuant to Good Utility Practice, Buyer shall compensate
Seller for all costs reasonably incurred by Seller directly attributable to the
interruption and restoration of Interconnection Service; provided, however that
such costs shall not include the costs of replacement energy or capacity. Seller
shall restore the Interconnection Service as it was before the interruption once
the interfering condition ceases to exist.
3.16. Non-Dispatchability Notification.
If any Fossil Station is not dispatchable by NEPOOL or the
ISO, Buyer shall notify Seller, to the extent feasible, at least 48 hours in
advance of its
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intent to take the unit temporarily off-line, and it shall provide Seller with a
schedule of when generation operations will be resumed. In the event of a forced
outage, Buyer shall notify Seller of its generating unit's temporary
interruption of generation as soon as practicable; and it shall provide Seller,
as soon as practicable, with a schedule of when generation will be resumed.
3.17. Scheduled Maintenance Notification and Coordination.
3.17.1. Transmission System Maintenance. Seller shall
consult with Buyer regarding timing of scheduled maintenance of the Transmission
System which might reasonably be expected to affect the Fossil Stations. Seller
shall, to the extent practicable, schedule any testing, shutdown, or withdrawal
of such facilities to coincide with Buyer's scheduled outages. To facilitate
such consultation and to the extent the information is not available from the
ISO in a timely manner, in June of each year, or on another date mutually
acceptable to the Parties, Buyer shall furnish Seller with non-binding
preliminary generator maintenance schedules covering the upcoming two years.
Buyer shall furnish Seller with non-binding updates to such schedules to reflect
significant changes.
In the event Seller is unable to schedule the outage of its
Transmission System to coincide with Buyer's schedule, Seller shall use all
reasonable efforts to notify Buyer, in advance, of the reasons for the outage,
the time scheduled for it to take place, and its expected duration. Seller shall
use due diligence to restore such
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facilities to operation as quickly as possible.
3.17.2. Local Routine Inspections and Maintenance. Seller
shall provide advance notice to Buyer's designee provided in Section 19 by
telephone before Seller's personnel enter a Fossil Station for Routine
Inspection and Maintenance and all other non-disruptive work that does not
require equipment, outages. Buyer shall provide advance notice by telephone to
Seller's dispatch personnel (or equivalent) before Buyer's personnel enter
Seller's T&D Assets for routine measurements, inspections, and meter reads. For
work that will require equipment outages or that is reasonably expected to
affect the security of the other Party's operations, the Party desiring to
perform the Routine Inspection and Maintenance shall provide the other Party
with at least 48 hours prior written notification in accordance with Section 19.
3.18. Safety.
3.18.1. General. Subject to the provisions of Section 10,
each Party shall be solely responsible for and shall assume all liability for
the safety and supervision of its own employees, agents, representatives, and
subcontractors. All work performed by either Party that could reasonably be
expected to affect the operations of the other Party shall be performed in
accordance with all applicable laws, rules, and regulations pertaining to the
safety of persons or property, including, without limitation, compliance with
the safety regulations and' standards adopted
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under the Occupational Safety and Health Act of 1970 (OSHA) as amended from time
to time, the National Electrical Safety Code (NESC) as amended from time to time
and Good Utility Practice.
3.18.2. Switching, Tagging and Grounding. Each Party shall
comply with Seller's Switching, Tagging and Grounding Rules, as in existence on
the Closing Date and as it may be modified from time to time at all utility
Primary System and Secondary System Interconnection Points or demarcation
points. A copy of the existing Switching, Tagging and Grounding Rules is
attached hereto as Schedule D and incorporated by reference as if fully set
forth herein. Seller will notify Buyer of any changes in its Switching, Tagging
and Grounding Rules.
3.18.3. Training. Each Party, in accordance with Schedule
D, shall be responsible for training, testing, and certifying operators for
inclusion on a Joint Tag List. Every six months, each Party shall provide the
other Party with an updated list of employees qualified for inclusion on the
Joint Tag List. Buyer shall Maintain and be responsible for all switching,
tagging and grounding on Buyer's side of the Interconnection Point and Seller
shall Maintain and be responsible for all switching, tagging and grounding at
the Interconnection Point and on Seller's side thereof.
3.19. Environmental Compliance and Procedures.
During the term of this Agreement, each Party shall notify
the other Party of any releases of Hazardous Substances, asbestos or lead
abatement, or
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requirements for or commencement of Remediation activities by oral
notification within twenty-four hours, followed by written notification within
forty-eight hours of discovery or initiation or sooner when necessary to permit
the other Party to comply with applicable laws or regulations. Except as
required by law or any federal or state agency, neither Party shall knowingly
take any action referred to in the next preceding sentence which might
reasonably be expected to have an adverse effect upon the operations of the
Acquired Assets or T&D Assets, as the case may be, of the other Party hereunder
without prior written notification and agreement between the Parties. Neither
Party shall require the other to modify any physical structures, including
containment systems, unless required by law. The Parties agree to coordinate
with each other concerning any site regulatory required plans. Each Party shall
promptly remove any oil or jet fuel remaining from any tank whose use is
permanently discontinued, except that Seller shall have no obligation to remove
oil from transformers that are temporarily removed from service. Buyer shall
operate, maintain and inspect the cathodic protection systems installed to
protect underground tanks from corrosion and shall permit Seller to review
records pertaining to those systems. Each Party shall comply in all respects
with all Environmental Laws and obtain and maintain all Permits required under
all applicable Environmental Laws with respect to the properties that it owns.
To the extent necessary, the Parties shall cooperate in all compliance and
filings under Environmental Laws.
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Each Party shall indemnify, hold harmless and defend the other Party,
its parent and Affiliates and their respective officers, directors, trustees,
employees, contractors, subcontractors and agents, from and against any claims
or liability for damage to property, injury to or death of any person or any
other liability, including all expenses and reasonable attorney's fees incurred
by such Indemnified Party, to the extent caused by any act or omission of the
Indemnifying Party, its parent and Affiliates and their respective officers,
directors, trustees, employees, contractors, subcontractors or agents that
violates the Indemnifying Party's undertakings under this Section 3.19. The
indemnification procedures set forth in Section 10.2 shall also be applicable to
this Section 3.19.
3.20. NEPOOL/ISO
From and after the Closing Date, the Buyer agrees to maintain
membership in good standing in NEPOOL and to submit to the governance of the ISO
as established by the NEPOOL Agreement. From and after the Closing Date, if the
Buyer decides to effect a permanent or long-term shut-down or substantial
reduction in existing generation capacity of the Norwalk Harbor or Cos Cob
facilities, the Buyer shall give twenty-four months prior written notice of such
decision to the Seller, to the Connecticut Department of Public Utility Control,
and to the ISO. The Buyer shall fully comply with all rules and regulations of
the ISO related to shutdown of generating facilities. Other than as set forth in
this Section
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3.20 or as may be required to preserve system reliability or to comply with the
requirements of the ISO or NEPOOL, the Seller shall not interfere with Buyer's
efforts to expand or modify generation capacity at any of the Sites.
4. OPERATIONS.
4.1. General. The Parties agree to operate all equipment that could
reasonably be expected to have an impact on the operations of the other Party or
an Affiliate of Seller in accordance with all applicable federal, state, and
local laws, governmental agency rules, regulations, and codes, and Good Utility
Practice. Notwithstanding anything to the contrary in this Agreement, any
obligation of Buyer to carry out or comply with requests, orders, or directives
of Seller shall be subject to the following limitations: (a) Seller shall issue
such requests, orders or directives to Buyer pursuant to Good Utility Practice
and applicable tariffs; (b) Seller shall issue requests, orders, or directives
to Buyer on a non-discriminatory basis, with respect to generators
interconnected to the Transmission System or the Distribution System, as
necessary, in Seller's judgment, exercised reasonably and in good faith based on
information available to Seller at the time, (i) to operate the Transmission
System and the Distribution System safely, reliably, and effectively, or (ii) to
conduct necessary inspection, testing, repair, maintenance, modification, or
replacement of Transmission System or Distribution System facilities. To the
extent Seller ceases to perform any function authorized by this Agreement to
issue requests, orders, or
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directives to Buyer, which function has been adequately assumed by the ISO,
Buyer's compliance with the requests, orders, and directives of the ISO shall
satisfy its corresponding obligation under this Agreement.
4.2. Buyer's Operating Obligations.
4.2.1. General. Buyer shall operate the Fossil Stations
that are connected to the Distribution System in accordance with the CONVEX
Operating Instructions for each such station as revised from time to time.
Copies of the effective CONVEX Operating Instructions for each such station are
attached hereto as Exhibit E. Buyer shall carry out all switching orders from
Seller's dispatch personnel, the ISO, or CONVEX issued pursuant to the CONVEX
Operating Instructions in a reasonably timely manner. Buyer shall keep Seller
advised of its generating unit's capabilities of participation in system
restoration and if it has black start capability. The electrical supply to the
Point of Interconnection shall be in the form of three phase 60 Hertz
alternating current. Buyer's equipment shall conform to industry standards for
harmonic distortion and voltage fluctuation.
4.2.2. Voltage or Reactive Control Requirements. Unless
otherwise agreed by the Parties, Buyer shall operate its existing interconnected
Acquired Assets with automatic voltage regulators. The voltage regulators will
continuously control voltage at each of the Interconnection Points consistent
with the range of voltage set forth in Schedule E as it may be amended by
Seller, the ISO or CONVEX from time
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to time; provided, however, that Buyer's conforming to such range of voltage
does not cause any Fossil Station to operate outside its generating capacity or
to violate any electrical constraints. Unless otherwise required by CONVEX or
the ISO the voltage regulator shall be in automatic mode and continuously
regulating the voltage schedules. Seller is not aware of any material additions
to or modifications of the Acquired Assets which are or in the foreseeable
future may be required to enable them to operate with automatic voltage
regulators of a type which are sufficient to comply with the foregoing
requirements. Buyer acknowledges that the ISO or CONVEX may direct Buyer to
deactivate the automatic voltage regulator and to supply reactive power pursuant
to a schedule provided by the ISO or CONVEX. If Buyer fails to operate a
generating facility included in the Acquired Assets in accordance with Schedule
E, and to the extent the generating facility is operating, Seller will provide
written notice to Buyer to remedy that situation. If Buyer does not commence
appropriate action within seven days of receiving such notice, Seller may then
take necessary action, at Buyer's expense, to remedy Buyer's default, including
the installation of capacitor banks or other reactive compensation equipment
necessary to ensure the proper voltage or reactive supply at the generating
facility. Buyer shall notify CONVEX or the ISO, to the extent required by CONVEX
or the ISO, (i) if a generating unit reaches a VAR limit; (ii) if there is any
deviation from the assigned voltage schedule; (iii) if the voltage regulator is
placed in
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manual mode; or (iv) if any voltage regulator is removed from or restored to
service. In addition to voltage regulation, Buyer shall adhere, to the extent
possible within its generating capacity, to CONVEX or the ISO's service
restoration plan and black start criteria, as amended from time to time. A copy
of the plan in existence immediately prior to Closing is attached hereto as
Schedule F and is incorporated by reference as if fully set forth herein. Buyer
acknowledges that CONVEX and the ISO may have the right to require reduced or
increased generation from the Acquired Assets in accordance with the NEPOOL
Tariff and applicable rules of NEPOOL and the ISO.
4.3. Seller's Operating Obligations. All operations, including
start-up, shutdown and determination of hourly generation, will be coordinated
by the ISO, or, if the ISO is not doing so, by Seller's designated agent. Seller
reserves the right, in accordance with Good Utility Practice, to reasonably
specify generator controls that affect the Transmission System or the
Distribution System, such as excitation, droop and automatic generation control
settings, as modified from time to time. Buyer agrees to comply with such
reasonable specifications at Buyer's expense to the extent consistent with Good
Utility Practices and the requirements of the ISO and NPCC.
4.4. Auditing of Accounts and Records. Within two years following
each calendar year, Buyer and Seller shall have the right to audit each other's
accounts and records pertaining to the transactions under this Agreement in that
calendar year. Such audits shall take place at the offices where such accounts
and records are
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maintained during normal business hours. Appropriate notice under Section 19
shall be given prior to any audit. The Party being audited will be entitled to
review the audit report and any supporting materials. Any audit hereunder shall
be subject to Section 7, and, to the extent that audited information includes
confidential information, the auditing Party shall designate an independent
auditor to perform such audit.
5. COST RESPONSIBILITIES AND BILLING PROCEDURES.
5.1. Buyer's Interconnection Cost Responsibilities.
5.1.1. Interconnection Facilities Charge. Buyer shall pay
all costs related to Buyer's use of the Interconnection Facilities through the
assessment of Interconnection Facilities Charges. The Interconnection Facilities
Charge applicable to Seller's Non-PTF Transmission Facilities shall be assessed
in accordance with the Northeast Utilities System Companies Open Access
Transmission Service Tariff No. 9, attached hereto as Schedule G, as it may be
revised from time to time.
The Interconnection Facilities Charge applicable to each of
the Fossil Stations shall be as specified in Schedule H, a copy of which is
attached hereto and incorporated by reference as if fully set forth herein.
5.1.2. Removal from Service. If Buyer permanently removes
from service a Fossil Station for which it pays Seller an Interconnection
Facilities Charge, Buyer may, at its option, terminate its obligation to pay the
Interconnection Facilities
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Charge by paying Seller a lump sum payment based on the cost of the
Interconnection Facility as shown on Seller's books of account, reduced by an
allocated portion of accumulated depreciation. Upon reasonable request by Buyer,
Seller shall furnish Buyer with an estimate of the amount of the lump sum
payment that would be due upon the retirement or mothballing of any such Fossil
Station, including a description of the methodology employed to calculate such
amount.
5.1.3. Leased Telephone Lines. Buyer and Seller shall
share equally the cost of telephone lines used by both Parties to transmit the
status of generation and transmission operations to CONVEX. Buyer and Seller
shall share the costs of telephone lines used by both Parties for other purposes
in a manner proportionate to their use of such lines.
5.2. Delivery of AC Service Power. In the event that Buyer obtains
AC Service Power for the Acquired Assets, Seller shall deliver such AC Service
Power to the Acquired Assets at Seller's Rate 30, attached hereto as Schedule J,
for demand for AC Service Power up to the maximum demand covered by such rate,
or at the appropriate rate applicable to Buyer's actual demand for AC Service
Power, plus any applicable NEPOOL charges.
5.3. Cost Responsibilities for Local Services.
Each Party shall bear its cost for Local Services provided to
the other Party as provided in Sections 3.10 and 3.11. For Local Services that
require
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reimbursement but for which price or rate schedules are not included in this
Agreement, the Parties shall agree upon the price or rate to be paid before
performing or providing such Local Services. Work performed by Seller on Buyer's
Acquired Assets shall be paid for by Buyer at applicable rates unless performed
for Seller's purpose or a joint purpose, in which case each Party shall pay its
ratable share of the cost.
5.4. Billing Procedures. Within a reasonable time after the first
day of each month, each Party shall prepare an invoice for those reimbursable
services rendered to the other Party under this Agreement during the preceding
month. Each invoice shall state the month in which the services were rendered,
shall be itemized to reflect the nature of the services rendered, and shall
fully describe the services rendered. Each invoice shall be paid within thirty
days of receipt. All payments shall be made in immediately available funds
payable to the other Party, or by wire transfer to a bank named by such Party.
When payments are made by mail, invoices shall be deemed paid on the
date payment is received. Payment of an invoice shall not relieve the paying
Party from any responsibilities or obligations it has under this Agreement; nor
shall it constitute a waiver of any claims arising hereunder.
5.5. Billing Disputes, Interest on Unpaid Balance. In the event of
a billing dispute between Seller and, Buyer, Seller and Buyer will continue to
provide services
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as long as the other Party (i) continues to make all payments not in dispute,
and (ii) pays into an escrow account the amount of the invoice in dispute,
pending resolution of such dispute. If Buyer fails to meet these two
requirements for continuation of Interconnection Service, then Seller may
provide notice to Buyer of its intention to suspend service in sixty (60) days,
in accordance with then applicable FERC policy. Interest on any unpaid amounts
(including amounts placed in escrow) shall be calculated in accordance with the
methodology specified for interest on refunds in FERC regulations at 18 C.F.R.
Section 35.19a(a)(2)(iii). Interest on delinquent amounts shall be calculated
from the due date for payment set forth in Section 5.3 to the date of payment.
5.6. Default. In the event either Party fails to make payment of
the costs identified in this Section 5 to the other Party on or before the due
date as described above (except for amounts in dispute under Section 5.5), an
event of default by such Party under Section 13.1 shall be deemed to exist.
6. DOCUMENTATION.
6.1. Obligation to Provide Documentation. Whenever a Party makes a
modification to its Acquired Assets or T&D Assets, as the case may be, that
could reasonably be expected to affect the other Party's operations hereunder,
the Party making the change shall provide notice to the other party and
appropriate documentation for such changes, in the form of written test records,
operation and
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maintenance procedures, drawings, materials lists, or descriptions. Before
making any modification to equipment or portions of the facilities that are
identified in the Asset Demarcation Agreement, the Party desiring to make the
change shall submit the proposed change to the other Party for review. The Party
initiating the change shall allow the other Party 30 days to review the proposed
change. Upon completion of any modifications to equipment or facilities that are
identified in the Asset Demarcation Agreement, the Party initiating the
modifications shall issue "as built" drawings to the other Party. The "as built"
drawings shall be issued within 90 days of completion, unless otherwise agreed
by the Parties. Each Party shall be responsible for its own equipment,
inspections, maintenance, construction, and modifications, and the other Party's
review of or comments on any document provided by the initiating Party shall not
relieve the initiating Party of its responsibility for the correctness and
adequacy of the work to be performed.
6.2. Drawings. Before the Closing Date Seller shall identify,
number, and provide Buyer with a duplicate set of the most current drawings,
labeled as "Common" that represent 'equipment or facilities that are identified
as in the Asset Demarcation Agreement. Such drawings shall consist, at a
minimum, of one or more of the following:
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System One-Lines Single page format drawings used for dispatch
and operation purposes.
One-Line Drawings Prints used in conceptual design which provide
detail on Interconnection Facilities and
Interconnection Points.
Meter and Relay Drawings Prints which provide a higher level of detail
than one-line drawings and identify on a
single line basis current and voltage
transformer locations, protection relay types,
and meter and control connections.
Current and Voltage Drawings Prints which provide the highest level of detail
for the facilities in a three line format with
specific current and voltage transformer
connections, relay and meter terminations.
Control Drawings Prints which provide information on apparatus
controls, switch developments, etc.
Secondary Wiring Drawings Prints which describe the physical panel layout,
relay, terminal block and device locations,
wiring and other details.
Other Physical Drawings Prints which include information on foundations,
equipment layouts, grounding, panel construction,
etc.
Each Party shall be responsible for updating and correcting its own
drawings and shall provide copies of all updated and corrected drawings to the
other Party as soon as practicable thereafter. Seller shall provide Buyer with
technical maintenance or operations documentation, if available, for protection,
communications and Primary electrical equipment.
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7. CONFIDENTIALITY
7.1 Confidentiality of Seller. Seller shall hold in confidence,
unless compelled to disclose by judicial or administrative process or other
provisions of law, all documents and information furnished to it by Buyer in
connection with this Agreement. All such information shall be deemed
confidential except to the extent that such information or documents are (i)
generally available to the public other than as a result of a disclosure by
Seller, (ii) made available to Seller on a non-confidential basis prior to
disclosure to Seller by Buyer, or (iii) made available to Seller on a
non-confidential basis from a source other than Buyer, provided that such source
is not known, and by reasonable effort could not be known, by Seller to be bound
by a confidentiality agreement with Buyer or otherwise prohibited from
transmitting the information to Seller by a contractual, legal or fiduciary
obligation. Seller shall not release or disclose such confidential information
to any other person, except to its employees on a need-to-know basis in
connection with this Agreement. Each such employee shall first be advised of the
confidentiality provisions of this Section 7.1 and shall agree in writing to
comply with, such provisions. In no event shall such information be disclosed in
violation of the requirements of FERC Order 889 or any other applicable
standards of conduct and any successor(s) thereto. Seller shall promptly notify
Buyer if it receives notice or otherwise concludes that the production of any
information subject to this Section 7.1 is being sought under any
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provision of law. Seller may use information subject to this Section 7.1 in any
arbitration proceeding under Section 13, subject to a confidentiality agreement
with the arbitrator and other participants.
7.2 Confidentiality of Buyer. Buyer shall hold in confidence,
unless compelled to disclose by judicial or administrative process or other
provisions of law, all documents and information furnished to it by Seller in
connection with this Agreement. All such information shall be deemed
confidential except to the extent that such information or documents are (i)
generally available to the public other than as a result of a disclosure by
Buyer, (ii) made available to Buyer on a non-confidential basis prior to
disclosure to Buyer by Seller, or (iii) made available to Buyer on a
non-confidential basis from a source other than Seller, provided that such
source is not known, and by reasonable effort could not be known, by Buyer to be
bound by a confidentiality agreement with Seller or otherwise prohibited from
transmitting the information to Buyer by a contractual, legal or fiduciary
obligation, Buyer shall not release or disclose such confidential " information
to any other person, except its employees on a need-to-know basis in connection
with this Agreement. Buyer shall promptly notify Seller if it receives notice or
otherwise concludes that the production of any information subject to this
Section 7.2 is being sought under any provision of law Buyer may use information
subject to this Section 7 2 in any arbitration proceeding under Section 13,
subject to a confidentiality
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agreement with the arbitrator and other participants.
7.3 Confidentiality of Audits. An independent auditor
performing any audit shall enter into a confidentiality agreement with the Party
being audited. Information disclosed to the auditor subject to the
confidentiality agreement shall be treated as confidential except to the extent
that its disclosure is otherwise permitted under this Agreement. Except as
provided herein, neither Party shall disclose audit information to any third
party without the other Party's prior written consent. Audit information in the
hands of the Party not being audited shall be subject to all provisions of
Section 7.1 or 7.2, as applicable.
7.4 Remedies. The Parties agree that monetary damages would be
inadequate to compensate either Party for the other Party's breach of its
obligations under Section 7.1 or 7.2. Each Party accordingly agrees, subject to
Section 18, that a Party shall be entitled to equitable relief, by way of
injunction or otherwise, if the other Party breaches or threatens to breach its
obligations under Section 7.1 or 7.2.
8. DAMAGE TO CONTROL CABLES FROM SUBSTATIONS TO POWER PLANTS
Costs for physical damage to or destruction of control cables owned by
either Party or its Affiliate from substations to the first point of termination
in a Fossil Station shall be shared equally by the Parties for repair and/or
replacement costs up to $25,000 per incident. Costs in excess of $25,000 per
incident shall be borne by
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the Party causing the damage or destruction. If neither Party is at fault or if
both Parties are partially at fault for damage or destruction that costs more
than $25,000 per incident to repair or replace, the costs shall be shared by
both Parties on a pro rata basis based upon their use of such cables. The
obligations under this section shall not be limited in any way by any limitation
on either Party's insurance.
9. PERSONAL INJURY AND PROPERTY DAMAGE
As between the Parties, each Party shall be liable for any physical
damage to or destruction of equipment, facilities or property owned solely by it
or its Affiliates, and for any claims for personal injury or death asserted
against it or its Affiliates arising out of equipment, facilities or property
owned by it or its Affiliates, to the extent caused by the other Party's or its
Affiliates' negligence or willful or wanton acts or omissions. The obligations
under this section shall not be limited in any way by any limitation on either
Party's insurance.
10. INDEMNIFICATION
10.1 General. To the extent of the responsibility and liability
assumed in Sections 8, 9 and 15 of this Agreement, each Party (the "Indemnifying
Party") shall indemnify, hold harmless and defend the other Party, its parent
and Affiliates and their respective officers, directors, trustees, employees,
contractors, subcontractors and agents, from and against any claims or liability
for damage to property, injury to or death of any person or any other liability,
including all expenses, and reasonable
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attorneys' fees incurred by such indemnified Party, to the extent caused by the
negligence or willful or wanton acts or omissions of the Indemnifying Party, its
parent and Affiliates and their respective officers, directors, trustees,
employees, contractors, subcontractors, or agents, arising out of or connected
with the operation of the Indemnifying Party's or its Affiliates' facilities,
equipment or properties, Acquired Assets or T&D Assets, as the case may be, or
the Structural Facilities, or arising out of or connected with the Indemnifying
Party's performance or breach under this Agreement; provided, however the
Indemnifying Party shall not have any liability for damages or losses arising
out of negligence or willful misconduct by the other Party, its parent and
Affiliates and their respective officers, directors, trustees, employees,
contractors, subcontractors or agents.
10.2 Indemnification Procedures. If either Party intends to seek
indemnification under this Section 10 from the other Party with respect to any
claim or action, the Party seeking indemnification shall give the other Party
notice of such claim within fifteen days of the commencement of, or actual
knowledge of, such claim or action. Such notice shall describe the claim 'in
reasonable detail, and shall indicate the amount (estimated if necessary) of the
claim that has been or may be sustained by such Party. To the extent that the
other Party is actually and materially prejudiced as a result of failure to
provide such notice, such notice will be a condition precedent to any liability
of the other Party under the indemnification
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provisions of this Agreement. Neither Party may settle or compromise any claim
for which it is seeking or intends to seek indemnification under this Section 10
without the prior consent of the other Party; provided, however, such consent
shall not be unreasonably withheld. The indemnification obligations of each
Party shall continue in full force and effect regardless of whether this
Agreement has expired or been terminated or canceled and shall not be limited in
any way by any limitation on insurance, on the amount or types of damages, or by
any compensation or benefits payable by the Parties under Worker's Compensation
Acts, disability benefit acts or other employee acts.
11. INSURANCE
The Parties agree to maintain, at their own cost and expense, fire,
liability, worker's compensation, and other forms of insurance relating to their
property and facilities in the manner, and amounts set forth in Schedule I
attached hereto and incorporated by reference as if fully set forth herein.
Schedule I may be amended from time to time by agreement of the Parties. The
Parties agree to furnish each other with certificates of insurance evidencing
the insurance coverage set forth in Schedule I, and to notify and provide copies
to the other of any policies maintained hereunder written on a "claims made"
basis. The Parties shall be required to maintain tail coverage for five years on
all policies written on a "claims made" basis. Every contract of insurance
providing the coverages required in Schedule I shall
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contain the following or equivalent clause: "No reduction, cancellation or
expiration of the policy shall be effective until ninety (90) days from the date
written notice thereof is actually received by the insured." Upon receipt of any
notice of reduction, cancellation or expiration, each Party shall immediately
notify the other Party in accordance with Section 19. Each Party and its
Affiliates shall be named as additional insureds on the general liability
insurance policies set forth in Schedule I as regards liability under this
Agreement; and each Party shall waive its rights of recovery against the other
for any loss covered by such policy. Each Party shall have the right to inspect
the original policies of insurance applicable to this Agreement at the other
Party's place of business during regular business hours. Each Party shall have
the right to self-insure all, or a portion, of the required insurances indicated
in this Schedule I, to the same amount or extent that it does so in its other
insurance programs.
Failure of either Party to comply with the foregoing insurance
requirements, or the complete or partial failure of an insurance carrier to
fully protect and indemnify the other Party or its affiliates or the inadequacy
of the insurance, shall not in any way lessen or affect the obligations or
liabilities of each Party to the other. The Parties on behalf of themselves,
their parents, and Affiliates, each waive any right of subrogation under their
respective insurance policies for any liability each has agreed to assume under
this Agreement. Evidence of this requirement shall be
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noted on all certificates of insurance.
12. FORCE MAJEURE
Notwithstanding anything in this Agreement to the contrary, Buyer and
Seller shall not be liable in damages or otherwise or responsible to the other
for failure to carry out any of its obligations under this Agreement if and only
to the extent that it is unable to so perform or is prevented from performing by
an event of force majeure. The term "force majeure," as used herein, means those
causes beyond the reasonable control of the Party affected, which by the
exercise of reasonable diligence that Party is unable to prevent, avoid,
mitigate, or overcome, including the following: any act of God, labor
disturbance, act of the public enemy, war, insurrection, riot, fire, storm or
flood, explosion, breakage or accident to machinery or equipment, order,
regulation or restriction imposed by governmental, military or lawfully
established civilian authorities, or any other cause of a similar nature beyond
a Party's reasonable control.
If a Party shall rely on the occurrence of an event or condition
described above, as a basis for being excused from performance of its
obligations under this Agreement, then the Party relying on the event or
condition shall: (i) provide prompt written notice of such force majeure event
to the other Party giving an estimation of its expected duration and the
probable impact on the performance of its obligations hereunder; (ii) exercise
all reasonable efforts to continue to perform its obligations
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under this Agreement, (iii) expeditiously take action to correct or cure the
event or condition excusing performance; provided that settlement of strikes or
other labor disputes will be completely within the sole discretion of the Party
affected by such strike or labor dispute; (iv) exercise all reasonable efforts
to mitigate or limit damages to the other Party; and (v) provide prompt notice
to the other Party of the cessation of the event or condition giving rise to its
excuse from performance. All performance obligations hereunder shall be extended
by a period equal to the term of the resultant delay.
13. DEFAULT AND DISPUTE RESOLUTION.
13.1 Events of Default. Any of the following shall constitute an
event of default under this Agreement:
(a) The failure to pay any amount when due (including as set
forth in Section 5.5);
(b) A breach of any material term or condition of this
Agreement. Failure by a Party to provide any schedule, report or notice
hereunder may constitute a material breach if such failure is not cured within
thirty (30) days after notice to the defaulting Party.
(c) Either Party shall commence any voluntary case under
federal bankruptcy laws or other proceeding under any similar law of any
jurisdiction for the relief of debtors or shall petition or apply for the
appointment of a trustee or other
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custodian, liquidator, or receiver for such Party or for any substantial part of
the Acquired Assets or T&D Assets, as the case may be;
(d) A decree or order for relief shall be entered in respect
of either Party in an involuntary case under federal bankruptcy laws or in any
other proceeding under any similar law of any jurisdiction for the relief of
debtors or a decree or order shall be entered appointing a trustee or other
custodian, liquidator, or receiver for either Party or for any substantial part
of the Acquired Assets or T&D Assets, as the case may be;
(e) Either Party shall cease its operations without having an
assignee, successor, or transferee in place; or
(f) Either Party shall terminate its existence as a corporate
entity by acquisition or sale, or if all or substantially all of such Party's
assets are transferred to another person or business entity, without complying
with Section 14.
13.2 Remedies for Default.
(a) Upon the occurrence of an event of default, the party not
in default may give written notice of default to the defaulting Party. Such
notice shall set forth in reasonable detail the nature of the default and, where
known and applicable, the steps necessary to cure such default. Except with
respect to an Interconnection Facilities Charge default (as described under
Section 5.6) and a Buyer default (as described under Section 4.2.2), the
defaulting Party shall have
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thirty (30) days following receipt of such notice either to (i) cure such
default, or (ii) commence in good faith all such steps as are reasonable and
appropriate to cure such default in the event such default cannot, in the
reasonable judgment of such non-defaulting Party, be cured within such thirty
(30) day period. With respect to a default under Section 5.6, the defaulting
Party shall have twenty (20) days to cure such default, and with respect to a
Buyer default under Section 4.2.2, Buyer shall have seven (7) days to cure such
default.
(b) If the defaulting Party fails to cure such default or
take such steps as provided under subparagraph (a) above, the following remedies
may be exercised; (i) the non-defaulting Party may terminate this Agreement,
(with respect to any Buyer's default, Seller may initiate a proceeding with FERC
to terminate service, but shall not terminate service until FERC authorizes any
such request), (ii) with respect to a default by Buyer under Section 13.1(c),
(d) or (e), Seller shall be entitled to operate and/or purchase from Buyer such
DC power systems, components of protection and metering circuits, SCADA
Equipment, Secondary Systems and related components, communication equipment and
building facilities, software, documentation, and structural components
associated with the foregoing, as are necessary for Seller or its Affiliates to
operate and/or maintain its transmission and distribution business; provided,
however, that if Seller elects to exercise such rights (A) Seller shall at all
times operate such equipment in accordance with Good Utility
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Practice and applicable agreements to which the Buyer is a party and (B) Seller
shall return operational control of Buyer's equipment to Buyer if the event
permitting Seller to exercise such control has ceased, or if Buyer has cured its
default, within thirty (30) days after Seller's exercise of its rights
hereunder; and (iii) with respect to a default by Buyer under Section 13.1(0 or
Section 4.2.2, Seller shall be entitled to exercise its rights set forth under
Section 4.2.2, but only to the extent necessary for Seller to maintain the
voltage supply to its Transmission System and Distribution System as such supply
was maintained prior to Buyer's default.
(c) Notwithstanding the foregoing, upon the occurrence of any
event of default, the non-defaulting Party shall have the right (i) to commence
an action to enjoin the defaulting Party from continuing with the defaulting
action or to require the specific performance of the defaulting Party' defaulted
obligations hereunder, and (ii) to exercise any other rights and remedies as it
may have hereunder or at equity or law.
13.3 Arbitrable Claims. Any disagreement between the Parties as to
their rights and obligations under this Agreement shall first be addressed by
the Parties. In the event that representatives of Buyer and Seller are unable in
good faith to satisfactorily resolve their disagreement within 30 days, they
shall refer the matter to their respective senior management. If after using
their best efforts to resolve the dispute, senior management cannot resolve the
dispute in 30 days, independent
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arbitration proceedings shall be used to resolve the dispute as set forth below
Notwithstanding the foregoing, physical accidents or events giving rise to
negligence or intentional tort claims for the recovery of property damages
and/or damages for personal injury shall not be considered "Arbitrable Claims."
However, disputes regarding the interpretation or scope of any indemnification
clause in this Agreement shall be subject to arbitration, even if the dispute
relates to whether one Party must indemnify the other for property damages
and/or damages for personal injury, the recovery of which was or will be
determined in a court of law.
13.4 Arbitration Process. Any arbitration initiated under this
Agreement shall be conducted before a single neutral arbitrator appointed by the
Parties. To the extent that the subject matter of the arbitration involves FERC
jurisdictional issues, the arbitrator shall be selected and the arbitration
shall be conducted pursuant to Section 605 of the FERC Rules of Practice and
Procedure, 18 C.F.R. Section 3 86.605, as amended. For purposes of this
Agreement an arbitrator shall be considered "neutral" only if the arbitrator has
not previously served as an arbitrator for a dispute involving the Parties and
is not a present or former lawyer, employee or consultant of a Party or any of
its Affiliates. Notwithstanding the foregoing, if the Parties fail to agree upon
a single, neutral arbitrator within sixty (60) days of the referral of the
dispute to arbitration, each Party shall choose one arbitrator who shall sit on
a three-member arbitration panel. The two arbitrators so chosen shall within
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twenty (20) days select a third arbitrator to chair the arbitration panel. In
either case, the arbitrators shall meet the definition of a "neutral" in Section
604 (c) of the FERC Rules of Practice and Procedure, 18 C.F.R. Section 3
85.604(c) and in this Section 13.4 of this Agreement and shall be knowledgeable
in electric utility matters, including electric transmission and bulk power
issues, and shall not have any current or past substantial business or financial
relationships with any party to the arbitration.
Except as provided in Section 13.7, the arbitrator(s) shall provide
each of the Parties an opportunity to be heard and, except as otherwise provided
herein, the arbitrator(s) shall conduct the arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. Any
arbitration hereunder shall be conducted in Hartford, Connecticut unless
otherwise agreed by both Parties. Unless otherwise agreed, the arbitrator(s)
shall render a decision within ninety (90) days of appointment and shall notify
the Parties in writing of such decision and the reasons therefor. The
arbitrator(s) shall be authorized only to interpret and apply the provisions of
this Agreement or any related agreements entered into under this Agreement and
shall have no power to modify or change them in any manner. The decision of the
arbitrator(s) shall be final and binding upon the Parties, and judgment on the
award may be entered in any court having jurisdiction. The decision of the
arbitrator(s) may be appealed solely on the grounds that the
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conduct of the arbitrator(s), or the decision itself, violated the standards set
forth in the Federal Arbitration Act and/or the Alternative Dispute Resolution
Act of 1990, as amended. Each Party shall be responsible for its own costs
incurred during the arbitration process and for the following costs, as
applicable: (i) the cost of the arbitrator chosen by the Party to sit on the
three-member panel and one half of the cost of the third arbitrator chosen; or
(ii) one half the cost of the single arbitrator jointly chosen by the Parties.
13.5 Remedies. Any award of damages by the arbitration panel shall
be determined, limited and controlled by Section 18. The arbitration panel shall
not award punitive damages or multiple damages or any other damages not measured
by the prevailing Party's actual damages. The arbitrator panel may, in its
discretion, award pre-award and post-award interest on any damages award;
provided, however, that the rate of pre-award or post-award interest shall not
exceed a rate equal to the rate provided for postjudgment interest by 28 U.S.C.
ss. 1951 as published from time to time by the Administrative Office of the
United States Courts based on the equivalent coupon issue yield for auctions of
52-week Treasury bills.
13.6 Confidentiality. The existence, contents, or results of any
arbitration hereunder may not be disclosed without the prior written consent of
both Parties; provided, however, either Party may make such disclosures as may
be necessary to fulfill regulatory or other legal obligations to any
governmental authority having
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jurisdiction, and may inform their lenders, Affiliates, auditors, and insurers,
as necessary, under pledge of confidentiality, and may consult with experts as
required in connection with the arbitration under pledge of confidentiality. If
any Party seeks preliminary injunctive relief from any court to preserve the
status quo or to avoid irreparable harm pending mediation or arbitration, the
Parties agree to use best efforts to keep the court proceedings confidential, to
the maximum extent permitted by law.
13.7 FERC Jurisdiction Over Certain Disputes. Nothing in this
Agreement shall preclude any Party from filing a petition or complaint with FERC
with respect to any arbitrable claim over which FERC has jurisdiction. In such
case, the other Party may request FERC to reject or to waive jurisdiction. If
FERC rejects or waives jurisdiction with respect to all or a portion of the
claim, the portion of the claim not so accepted by FERC shall be resolved
through arbitration, as provided in this Agreement. To the extent that FERC
asserts or accepts jurisdiction over the claim, the decision, findings of fact,
or order of FERC shall be final and binding, subject to judicial review under
the Federal Power Act, and any arbitration proceedings that may have commenced
prior to the assertion or acceptance of jurisdiction by FERC shall be stayed,
pending the outcome of the FERC proceedings. An arbitration panel shall have no
authority to modify, and shall be conclusively bound by, any decision, finding
of fact, or order of FERC. However, to the extent that a decision, finding of
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fact, or order of FERC does not provide a final or complete remedy to the Party
seeking relief, such Party may proceed to arbitration to secure such remedy,
subject to the FERC decision, finding, or order.
13.8 Preliminary Injunctive Relief. Nothing in this Section 13
regarding arbitration shall preclude, or be construed to preclude, the resort by
either Party to a court of competent jurisdiction solely for the purposes of
securing a temporary or preliminary injunction to preserve the status quo or
avoid irreparable harm pending arbitration.
14. ASSIGNMENT/CHANGE IN CORPORATE IDENTITY.
14.1 Assignment. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests, or
obligations hereunder shall be assigned by either Party (other than by operation
of law), except by Seller to an Affiliate of the Seller that owns the T&D Assets
used in the Transmission System and Distribution System or by Buyer to one or
more Affiliates of the Buyer that own the Acquired Assets, without the prior
written consent of the other Party, such consent not to be unreasonably
withheld. Any assignment of this Agreement in violation of the foregoing shall
be void at the option of the non-assigning Party. Notwithstanding the foregoing,
Buyer or its permitted assignee may assign, transfer, pledge or otherwise
dispose of its rights and interests hereunder to a trustee or
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lending institution(s) for the purposes of financing or refinancing the Acquired
Assets, including upon or pursuant to the exercise of remedies under such
financing or refinancing, or by way of assignments, transfers, conveyances or
dispositions in lieu thereof~ provided, however, that no such assignment or
disposition shall relieve or in any way discharge Buyer or such assignee from
the performance of its duties and obligations under this Agreement. Seller
agrees to execute and deliver such documents as may be reasonably necessary to
accomplish any such assignment, transfer, conveyance, pledge or disposition of
rights hereunder for purposes of the financing or refinancing of the Acquired
Assets, so long as Seller's rights under this Agreement are not thereby altered,
amended, diminished or otherwise impaired.
14.2 Assumption. Except as set forth in Section 14.1 above, no
assignment or transfer of rights or obligations under this Agreement by either
the Buyer or the Seller shall relieve such Party from full liability and
financial responsibility for the performance thereof after any such transfer or
assignment unless and until the transferee or assignee shall agree in writing to
assume the obligations and duties of the assigning or transferring Party under
this Agreement and the other Party has consented in writing to such assumption,
such consent not to be unreasonably withheld.
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15. CONTRACTORS AND SUBCONTRACTORS.
Nothing in this Agreement shall prevent either Party from utilizing
the services of such contractors or subcontractors as it deems appropriate;
provided, however, that all such contractors or subcontractors shall comply with
the terms and conditions of this Agreement. The creation of any contract or
subcontract relationship shall not relieve the Party retaining the contractor or
subcontractor of any of its obligations under this Agreement. Any obligation
imposed by this Agreement upon the Parties, where applicable, shall be equally
binding upon and shall be construed as having application to any contractor or
subcontractor. No contractor or subcontractor is intended to be deemed a third
party beneficiary of this Agreement.
16. LABOR RELATIONS.
Each Party agrees to immediately notify the other Party, orally and
then in writing, of any labor dispute or anticipated labor dispute or job action
which may reasonably be expected to affect the operations of the other Party.
17. INDEPENDENT CONTRACTOR STATUS.
Nothing in this Agreement shall be construed as creating any
relationship between Seller and Buyer other than that of independent
contractors.
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18. LIMITATION OF LIABILITY.
Except for the indemnification obligations under Section 3.19 and
Section 10 hereof, to the fullest extent permitted by law and notwithstanding
any other provision of this Agreement, neither Seller nor Buyer, nor their
respective officers, directors, trustees, agents, employees, parent or
Affiliates, successors or assigns, or their respective officers, directors,
trustees, agents or employees, successors or assigns, shall be liable to the
other Party or its parent, subsidiaries, Affiliates, officers, directors,
agents, employees, successors or assigns, for claims, suits, actions or causes
of action for incidental, punitive, special, indirect, multiple or consequential
damages (including attorneys' fees or Litigation costs) connected with or
resulting from performance or non-performance of this Agreement, or any actions
undertaken in connection with or related to this Agreement, including without
limitation any such damages which are based upon causes of action for breach of
contract, tort (including negligence and misrepresentation), breach of warranty,
strict liability, statute, operation of law, or any other theory of recovery.
The provisions of this Section 18 shall apply regardless of fault and shall
survive termination, cancellation, suspension, completion or expiration of this
Agreement. The remedies set forth in this Agreement are the exclusive remedies
for the liabilities of each Party arising out of or in connection with this
Agreement.
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19. NOTICES.
At or prior to the Closing Date, each Party shall indicate to the
other Party, by notice, the appropriate person during each eight-hour work shift
to contact in the event of an emergency, a scheduled or forced interruption or
reduction in services, or Routine Inspections and Maintenance as provided in
Section 3.17.2. The notice last received by a Party shall be effective until
modified in writing by the other Party. Unless otherwise specified in this
Agreement, all notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and will be deemed to have
been duly given if so given) by hand delivery, cable, telecopy (confirmed in
writing) or telex, or by mail (registered or certified, postage prepaid) to the
respective Parties as follows:
If to the Seller:
The Connecticut Light and Power Company
c/o Northeast Utilities Service Company
P.O. Box 270 Hartford, CT 06141-0270
Attention: Vice President -- T & D Operations
Copy to:
The Connecticut Light and Power Company
c/o Northeast Utilities Service Company
P.O. Box 270
Hartford, CT 06141-0270
Attention: Senior Vice President, Secretary and General Counsel
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If to the Buyer:
NRG Energy, Inc.
1221 Nicolet Mall, Suite 700
Minneapolis, Minnesota 55403-2445
Attn: President and General Counsel
Copy to:
or such other address as is furnished in writing by such Party; and any such
notice or communication shall be deemed to have been given as of the date so
mailed.
20. SURVIVAL.
The liabilities and obligations assumed in Section 3.19, 8, 9, 10 and
15 of this Agreement with respect to events which occur during the term of this
Agreement shall survive the termination of this Agreement.
21. HEADINGS.
The descriptive headings of the sections of this Agreement are
inserted for convenience only and do not affect the meaning or interpretation of
this Agreement.
22. WAIVER.
Except as otherwise provided in this Agreement, any failure of any
Party to comply with any obligation, covenant, agreement, or condition herein
may be waived by the Party entitled to the benefits hereof only by a written
instrument signed by the Party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, covenant, agreement, or
condition shall not operate
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as a waiver of, or estoppel with respect to, any subsequent or other failure.
23. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, all of
which will be considered one and the same Agreement and each of which will be
deemed an original.
24. GOVERNING LAW.
This Agreement and all rights, obligations, and performances of the
Parties hereunder are subject to all applicable federal and state laws and to
all duly promulgated orders and other duly authorized action of governmental
authority having jurisdiction. This Agreement will be governed by and construed
in accordance with the laws of the State of Connecticut when not in conflict
with or pre-empted by federal law, without giving effect to the conflict of law
principles thereof. Except for those matters covered in this Agreement and
jurisdictional to FERC or which must first go to arbitration pursuant to Section
13 herein, any action arising out of or concerning this Agreement must be
brought in the courts of the State of Connecticut. Both Parties hereby consent
to the jurisdiction of the State of Connecticut for the purpose of hearing and
determining any action not pre-empted by federal law; and to the jurisdiction of
FERC for those matters governed by FERC rules and regulations or by the Federal
Power Act.
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25. EQUAL EMPLOYMENT OPPORTUNITY.
The Parties agree to comply with all applicable federal, state, and
other applicable anti-discrimination laws, the standards and regulations issued
thereunder, and the amendments thereto.
26. SEVERABILITY.
In the event that any of the provisions of this Agreement are held to
be unenforceable or invalid by any court of competent jurisdiction, the Parties
shall, to the extent possible, negotiate an equitable adjustment to the
provisions of this Agreement, with a view toward effecting the purpose of this
Agreement, and the validity and enforceability of the remaining provisions
hereof shalt not be affected thereby.
27. AMENDMENTS.
Seller may unilaterally make application to FERC under Section 205
of the Federal Power Act and pursuant to the FERC rules and regulations
promulgated thereunder for a change in any rates, terms and conditions, charges,
classification of service, rule or regulation for any services Seller provides
under this Agreement over which FERC has jurisdiction. Buyer may unilaterally
exercise its rights under Section 206 of the Federal Power Act and pursuant to
FERC rules and regulations promulgated thereunder with respect to any rate,
term, condition, charge, classification of service, rule or regulation for any
services provided under this
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Agreement over which FERC has jurisdiction. Except as provided in the foregoing,
this Agreement may be amended, modified, or supplemented only by written
agreement signed by both Seller and Buyer.
28. ENTIRE AGREEMENT.
This Agreement, together with the Purchase and Sale Agreement and
the Related Agreements as defined therein, and the Asset Demarcation Agreement
and the Schedules attached thereto, constitutes the entire understanding between
the Parties, and supersedes any and all previous understandings, oral or
written, which pertain to the subject matter contained herein or therein: If
there is any conflict in such documents, the Purchase and Sale Agreement shall
have precedence over the others.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be signed by
their respective duly authorized officers as of the date first above written.
NRG Energy, Inc. The Connecticut Light and Power Company
By: /s/ Craig A. Mataczynski By: /s/ John B. Keane
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Name: Craig A. Mataczynski Name: John B. Keane
Title: Senior Vice President Title: Vice President -- Administration
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