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EXHIBIT 10.2b
[CONEMAUGH LOGO]
OPERATING AGREEMENT WITH GENCO
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ANY CHANGE MADE TO THIS AGREEMENT MADE AFTER
12/5/94 MUST BE FILED WITH THE FERC.
UPDATE REVISION CHART WITH CHANGES.
THIS IS A TRUE REPRESENTATION OF THE CONEMAUGH OPERATING AGREEMENT
ORIGINALLY MADE AS OF DECEMBER 1, 1967
INCLUDING THE FOLLOWING AMENDMENTS:
Date of Amendment Amended Section(s)
- ----------------- ------------------
June 4, 1969 Articles 2.1, 6.1 & 7.2
May 8, 1973 Article 3.1(f)
February 27, 1978 Article 4.4*
December 1, 1978 Article 10.1
June 30 ,1983 Article 2.1, 4.4
The above amendments to the original agreement are indicated by underlining.
CONEMAUGH OPERATING AGREEMENT
ARTICLE TITLE PAGE NO.
1 Effective Date and Duration of Contract 4
2 General 4
3 Services To Be Provided 5
4 Payments 7
5 Audit 9
6 Scheduling of Operations 9
7 Insurance and Indemnity 10
8 Assignment 12
9 Waiver of Rights 12
10 Notices and Communications 12
11 Governing Law 14
* Amendment superceded by June 30, 1983 amendment.
April 28, 1986
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THIS AGREEMENT made as of the first day of December, 1967, by and
between PENNSYLVANIA ELECTRIC COMPANY, a Pennsylvania corporation (hereinafter
called "Penelec"), party of the first part, and ATLANTIC CITY ELECTRIC COMPANY,
a New Jersey corporation, BALTIMORE GAS AND ELECTRIC COMPANY, a Maryland
corporation, DELMARVA POWER & LIGHT COMPANY, a Virginia and Delaware
corporation, METROPOLITAN EDISON COMPANY, a Pennsylvania corporation,
PENNSYLVANIA POWER & LIGHT COMPANY, a Pennsylvania corporation, PHILADELPHIA
ELECTRIC COMPANY, a Pennsylvania corporation, POTOMAC ELECTRIC POWER COMPANY, a
district of Columbia and Virginia corporation, PUBLIC SERVICE ELECTRIC AND GAS
COMPANY, a New Jersey Corporation, and UGI CORPORATION (formerly THE UNITED GAS
IMPROVEMENT COMPANY), a Pennsylvania corporation (hereinafter referred to
collectively as the "Owners" and individually as an "Owner"), parties of the
second part.
WITNESSETH: THAT:
WHEREAS, the parties of the second part are owners in common of
undivided interest in Conemaugh Steam Electric Station being constructed in
Indiana County, near New Florence, Pennsylvania, which will consist of two units
with a nominal capacity of 900,000 kw each, the first of which is expected to be
in service in February, 1970 and the second in February 1971 (said Station,
including all appurtenant or related facilities owned by the Owners as tenants
in common, such as, but not limited to, the Conemaugh Switching station, being
hereinafter referred to as the "Generating Station"); and
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WHEREAS, the parties of the second part are also owners in common of
undivided interests in the Conemaugh Switching Station, being constructed
adjacent to the Generating Station in Indiana County, near New Florence,
Pennsylvania, which will initially consist of eight (8) 500 KV circuit breakers
in a breaker-and-a-half arrangement with two (2) generator circuits and three
(3) line circuits (said Conemaugh Switching Station, including all appurtenant
or related facilities owned by the Owners as tenants in common, being
hereinafter referred to as the "Switching Station"); and
WHEREAS, the Generating Station and the Switching Station are
hereinafter referred to as the "Station"; and
WHEREAS, as tenants in common each Owner is entitled to a share of the
installed capacity, available capacity, operating capacity and hourly generation
(measured on the basis of net station output as of the 500 kv bus in the
adjacent Conemaugh Switching Station) proportional to its undivided interest in
the Station; and
WHEREAS, the parties of the second part desire that Penelec shall
operate the Station in accordance with the terms and conditions hereinafter set
forth; and
WHEREAS, Penelec is willing to operate the Station on such terms and
conditions; and
NOW, THEREFORE, the parties hereto mutually agree as follows:
ARTICLE 1 - EFFECTIVE DATE AND DURATION OF CONTRACT
1.1 This Agreement shall become effective as of December 1, 1967, and
shall continue in effect until the expiration of five (5) years from the date on
which the first unit of the Station shall go into
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commercial operation, and thereafter from year to year, subject to termination
at the end of such five (5) year period or at the end of any year thereafter by
Penelec or by the Owners upon not less than three (3) years' written notice by
Penelec to the Owners or by the Owners to Penelec, as the case may be. The
Owners shall cause to be given to Penelec confirmation in writing of the date on
which the first unit of the Station goes into commercial operation promptly
after that event and such date shall be controlling under this Agreement in all
cases in which that date is material.
1.2 This Agreement shall also be subject to termination on six months'
written notice if its performance is in conflict with any rule, regulation, or
order of the Securities and Exchange Commission applicable to this Agreement,
under the Public Utility Holding Company Act of 1935, unless within such time
this Agreement is so revised by mutual agreement as to eliminate the conflict.
(The said Act and rules thereunder are applicable to this Agreement solely
because Penelec is a "subsidiary" of a registered holding company and an
"associate" of Metropolitan Edison Company.)
ARTICLE 2 - GENERAL
2.1 Penelec shall operate and maintain the Station in accordance with
good utility practice and pursuant to operating plans (including goals,
objectives, improvement programs and budgets) developed and updated annually by
Penelec and Owners and approved by Owners. In performing such operation and
maintenance, Penelec shall act as an independent contractor responsive to the
interests of Owners.
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ARTICLE 3 - SERVICES TO BE PROVIDED
3.1 Penelec agrees that it will:
(a) Select, hire, control and (when it deems such action appropriate)
discharge personnel, including supervisors, as required in the performance
of this Agreement, such personnel to be sole employees of Penelec.
(b) Schedule deliveries of and handle fuel supplies to the Station
under contracts entered into by the Owners, and procure and handle any
additional spot fuel which may be necessary for the operation of the Station.
(c) Purchase operating and ordinary maintenance materials, supplies,
and services (the latter including, for example, necessary coal analysis,
communications, and plant protection).
(d) Perform or if deemed desirable by Penelec contract for maintenance,
renewals and replacements required to keep the Station in safe and efficient
operating condition and to protect the property. Specific advance approval
of the Owners will be required unless
(i) A prompt decision is required to prevent hazardous
conditions or substantial reduction in generation; or
(ii) the need was unforeseen and arises in the course of
operation and the net expenditure for the complete job is
expected to be not more than $25,000; or
(iii) provision has been made therefor in an approved budget.
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(e) Prepare annual budgets as required for operating expenses,
maintenance, capital expenditures and retirements to be submitted to the Owners
for approval.
(f) Administer land, land right and real estate matters with respect to
station property, including any related services pertaining to oil and gas
leases, property taxes, land records management and similar functions, but
excluding the right to acquire or sell land or grant easements.
(g) Perform any additional services related to the operation,
maintenance, renewals, replacements, additions, and retirements pertaining to
the Station which the Owners shall, by a written notice to Penelec, request
Penelec to undertake and which Penelec shall agree, in writing, to undertake.
(h) Perform such accounting as is required for the Station and furnish
reports with respect thereto to the Owners which will enable each Owner to meet
its accounting and statistical requirements including the requirements of any
regulatory bodies having jurisdiction over such Owner. Duplicate records if
desired shall be provided for any Owner at its expense.
(i) Prepare bills in reasonable detail to the Owners for cost of
services performed including an appropriate allowance for Penelec's overheads,
as mutually agreed to, applicable to this Agreement and fairly and equitably
allocated thereto as provided in Section 4.3.
3.2 Matters and questions arising in connection with the operation and
maintenance of the Station which are not within the scope of the responsibility
of Penelec as an independent contractor under this
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Agreement and are not specifically provided for in this Agreement shall be
referred to the Owners.
3.3 As a general rule, any decision or approval of the Owners in order
to be effective shall be unanimous, provided, however, that in case of
disagreement among the Owners as to any matter likely to impede or interfere
with Penelec's operation of the Station the decision of the Owners having a
collective ownership interest in the Station in excess of 75% shall be final and
binding on Penelec and all Owners.
ARTICLE 4 - PAYMENTS
4.1 It is agreed by the parties hereto that the individual liability of
any one Owner for any liability hereunder to Penelec shall be that portion of
the total liability of the Owners which is equal to that one Owner's percentage
of undivided ownership in the Station, such percentages being as follows:
Atlantic City Electric Company 3.83%
Baltimore Gas and Electric Company 10.56%
Delmarva Power & Light Company 3.72%
Metropolitan Edison Company 16.45%
Pennsylvania Power & Light Company 11.39%
Philadelphia Electric Company 20.72%
Potomac Electric Power Company 9.72%
Public Service Electric and Gas Company 22.50%
UGI Corporation 1.11%
TOTAL 100.00%
4.2 Penelec shall be reimbursed by the Owners for any cost (as
determined in accordance with Section 4.3) incurred by it hereunder
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during the construction period and prior to the time the first unit at the
Station is placed in commercial operation, such reimbursements to be effected by
the prompt payment by the Owners of monthly bills submitted by Penelec.
4.3 After the first unit of the Station goes into commercial operation,
Penelec shall be reimbursed by the Owners for its cost in carrying out this
Agreement as determined in accordance with sound methods of determining cost.
Such costs shall include any overheads, as mutually agreed to, of Penelec
applicable to this Agreement and fairly and equitably allocated thereto, but
shall not exceed the limitations imposed by Rule 91 of the Securities and
Exchange Commission under the Public Utility Holding Company Act of 1935.
4.4 Penelec shall establish and maintain for purposes of this Agreement
a bank account, subject to withdrawals by Penelec, in a bank satisfactory to
Penelec and the Owners, with funds supplied by the Owners in proportion to their
respective percentages of undivided ownership of the Station. Prior to the date
the first generating unit is placed in commercial operation, Penelec shall
request of each Owner the amount of funds to be deposited initially by each
such Owner in the bank account in order to activate the account and to cover
Penelec's estimated current disbursements. From time to time thereafter, Penelec
shall in similar manner request replenishment of the bank account by the Owners.
In determining the dates and amounts of such replenishments, Penelec shall
endeavor to avoid carrying in the bank account funds in excess of a reasonable
minimum balance for periods of time longer than necessary to provide for the
orderly payment of bills. All bills in
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connection with the performance of this Agreement shall be paid by Penelec from
this account.
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ARTICLE 5 - AUDIT
5.1 An audit shall be made each year of the accounts and records kept
by Penelec for its operations under this Agreement by an independent certified
public accountant retained by the Owners to verify the accuracy of the expenses
and costs charged to the Owners on account of this Agreement. The independent
certified public accountant shall report to each Owner, who shall advise
Penelec, within three months of receipt of such report, of any exception or
objection to any item of such expenses and costs in the period covered by such
report.
ARTICLE 6 - SCHEDULING OF OPERATIONS
6.1 Under normal conditions, Penelec shall operate the Generating
Station in accordance with schedules providing for operation at maximum economy
with the other stations of the Interconnected System of which the Owners'
systems are a part. Initially, such schedules (i.e., operating periods,
scheduled maintenance outage periods, and hour-to-hour generation) shall be
prepared by the Office of the Pennsylvania-New Jersey-Maryland Interconnection,
subject, however, (a) to the making of other arrangements for scheduling by the
Owners and (b) to overriding directions by the Owners at any time.
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6.2 During operating conditions which Penelec in its sole judgment
deems abnormal, Penelec shall take such action as it deems appropriate to
safeguard equipment and to maintain service.
ARTICLE 7 - INSURANCE AND INDEMNITY
7.1 Penelec shall have sole responsibility for withholding from the
compensation of its employees engaged in performing the services under this
Agreement any taxes or contributions which are required by law to be withheld,
and, sole responsibility for paying such withheld amount and taxes applicable
to the compensation of such employees imposed by law upon Penelec to the proper
governmental authority, and shall indemnify and save harmless the Owners from
and against any liability on account thereof.
7.2 Penelec shall provide workmen's compensation insurance for its
employees engaged in performing the services under this Agreement in accordance
with the laws of the Commonwealth of Pennsylvania and shall arrange with its
compensation insurer for specific segregation and allocation of costs of this
insurance. The policy shall contain an "All States" endorsement and subrogation
waiver as follows: "It is understood and agreed that the Company shall not
proceed against the Owner or Owners of Conemaugh Steam Electric Station and the
Conemaugh Switching Station for recovery of any loss or losses paid under this
policy." Evidence of this insurance is to be furnished to Owners. Costs of this
insurance shall be included in Penelec's expenses reimbursable by the Owners
under this Agreement.
7.3 Owners shall provide comprehensive public liability insurance in
amounts to be determined from time to time by the Owners.
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Such insurance shall cover liability arising out of the ownership and operation
of the Station and associated activities, including the use of automobiles,
owned, non-owned and hired, and shall name as insureds Penelec and Owners.
Owners shall furnish a certified copy of this policy to Penelec which will
submit to the insurer any reports and arrange for any inspections necessitated
thereby.
7.4 Owners shall provide such insurance as they deem necessary against
the hazards of fire, explosion, boiler and machinery accidents and such other
hazards of physical loss or damage to the Station, except Penelec's own
property and that of its employees. Such insurance shall include a waiver of
the insurer's right of subrogation against Penelec for such loss or damage even
though due to the negligence of Penelec. Owners shall furnish a certified copy
or copies of such insurance to Penelec. Penelec shall arrange with the insurers
for any inspections necessitated thereby and shall promptly report any losses
to each Owner's representative appointed in accordance with Article 10 hereof,
and shall assist and cooperate in the adjustment and settlement thereof.
7.5 Penelec shall provide an employee's fidelity bond in the amount of
$1,000,000. Costs of this bond shall be included in Penelec's expenses
reimbursable by the Owners under this Agreement.
7.6 Penelec shall not be liable for any injury, death, loss or damage
arising out of the operation of the Station except to the extent of the
amount, if any, received from an insurer or insurers under insurance required
to be carried by it. The Owners shall indemnify and hold Penelec harmless
against any loss, expense or damage (including personal injury to and death of
third persons and damage of property) of
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any kind whatsoever arising out of or connected with services performed by it,
except loss or damage of Penelec's own property and that of its employees and
except as provided in Section 7.1 hereof and in the preceding sentence.
ARTICLE 8 - ASSIGNMENT
8.1 The rights and obligations of this Agreement shall be subject to
assignment at any time by any of the Owners in connection with a transfer of
any such Owner's interest in the Station, but shall not be assignable by
Penelec without the written consent of the Owners.
ARTICLE 9 - WAIVER OF RIGHTS
9.1 The failure of either the Owners or Penelec to insist in any one
or more instances upon strict performance of any of the provisions of this
Agreement or to take advantage of any rights hereunder shall not be construed as
a waiver of any such provisions or the relinquishment of any such rights, but
the same shall continue and remain in full force and effect.
ARTICLE 10 - NOTICES AND COMMUNICATIONS
10.1 Each Owner, by written notice signed by an executive officer and
delivered to Penelec and to each other Owner, shall designate one
representative and an alternate (to act in the absence of such representative)
to serve on the Keystone-Conemaugh Owners Representatives Committee with
authority to act for it in all matters pertaining to this agreement and to
receive notices and communications from Penelec with respect to the subject
matter of this Agreement and to
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deliver to Penelec, on behalf of such Owner through the Keystone-Conemaugh
Owners Representatives Committee, notices, communications, decisions and
approvals concerning the subject matter of this Agreement. The manner of making
any decision by any Owner or giving any approval by any Owner shall be
determined by such Owner for itself but any communication received by Penelec
and/or the other Owners from a person designated by an Owner pursuant to the
preceding sentence (unless such designation shall have been previously revoked
as provided in Section 10.3) may be conclusively relied upon by Penelec and the
other Owners as having been authorized by said Owner.
10.2 Penelec, by written notice signed by an executive officer
delivered to each of the Owners, shall designate one representative and an
alternate to receive notices and communications from the Owners and to deliver
to the Owners notices and communications concerning the subject matter of this
Agreement. The manner of making any decision by Penelec shall be determined by
Penelec for itself but any communication received by the Owners from a person
designated by Penelec pursuant to the preceding sentence (unless such
designation shall have been previously revoked as provided in Section 10.3) may
be conclusively relied upon by the Owners as having been authorized by Penelec.
10.3 Any designation by an Owner or Penelec pursuant to Sections 10.1
and 10.2 may be revoked by such Owner or Penelec, as the case may be, by
designating a substitute representative or alternate by written notice signed
by an executive officer and delivered to each of the other signatories to this
Agreement.
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ARTICLE 11 - GOVERNING LAW
11.1 It is agreed by the parties hereto that this Agreement shall be
construed, interpreted and controlled by the laws of the Commonwealth of
Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers thereunto duly authorized as of
the day and year first above written.
PENNSYLVANIA ELECTRIC COMPANY
ATLANTIC CITY ELECTRIC COMPANY
BALTIMORE GAS & ELECTRIC COMPANY
DELMARVA POWER & LIGHT COMPANY
METROPOLITAN EDISON COMPANY
PENNSYLVANIA POWER & LIGHT COMPANY
PHILADELPHIA ELECTRIC COMPANY
POTOMAC ELECTRIC POWER COMPANY
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
UGI CORPORATION
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CONSENT
This CONSENT is given this 30th day of January, 1995, by the Keystone
Generating Station and Conemaugh Generating Station (hereinafter collectively
referred to as "Owners' Facilities") Owners: Atlantic City Electric Company,
Baltimore Gas and Electric Company, Delmarva Power and Light Company, UGI
Utilities, Inc. Metropolitan Edison Company, Jersey Central Power & Light
Company, Pennsylvania Power & Light Company, PECO Energy Co., Potomac Electric
Power Company and Public Service Electric & Gas Company (hereinafter referred to
as "Owners")
to
Pennsylvania Electric Company ("Penelec") and GPU Generation Corporation
("GPUGC").
WITNESSETH:
WHEREAS, Penelec operates Owners' Facilities pursuant to the following
agreements:
1. The Keystone Operating Agreement, dated December 1, 1965, as
amended or supplemented (and as it may be amended or
supplemented from time to time hereafter).
2. The Conemaugh Operating Agreement, dated December 1,
1967, as amended or supplemented (and as it may be amended or
supplemented from time to time hereafter).
(hereinafter referred to as the "Agreements"); and
WHEREAS, Penelec is a Pennsylvania electric utility operating company,
a part of the General Public Utilities Corporation ("GPU") System and an
affiliate of GPUGC; and
WHEREAS, the GPU System is combining the operation of all the GPU
System's fossil fuel-fired and hydroelectric generating stations (including
Penelec's operation of the Owners' Facilities) into a single unified management
structure under GPUGC; and
WHEREAS, Penelec intends to assign the Agreements to GPUGC and GPUGC
intends to accept such assignment; and
WHEREAS, pursuant to Sections 8.1 of the Agreements, Penelec seeks the
written consent of the Owners to the assignment of its rights and obligations
under the Agreements to GPUGC and the Owners are willing to provide such
consent.
NOW THEREFORE, in consideration of the premises and promises contained
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herein and intending to be bound hereby, the Owners:
Hereby consent to Penelec's assignment of its rights and obligations
under the Agreements to GPUGC and to GPUGC's acceptance of such
assignment. Such assignment shall not effect any and all rights and
obligations of Penelec and of the Owners accrued as of the effective
date of the assignment.
IN WITNESS WHEREOF, the parties hereto have caused this Consent to be signed
and attested as of the day and year first above written.
ATLANTIC CITY ELECTRIC COMPANY ATTEST:
By: /s/ H. C. SCHWEMM, JR. /s/ L. M. WALTERS
------------------------------ ----------------------------
H. C. Schwemm, Jr. L. M. Walters,
Vice President Assistant Secretary
Power Generation & Fuels Management
BALTIMORE GAS AND ELECTRIC COMPANY
By: /s/ [ILLEGIBLE] 1/3/95
------------------------------
[ILLEGIBLE]
1/3/95
DELMARVA POWER AND LIGHT COMPANY
By: /s/ Claire R. Williamson
------------------------------ Commission Expires 3/27/95
UGI UTILITIES INC. Sworn to and subscribed
before me this 3rd day of
January, 1995.
By: /s/ /s/ DAVE J. DANIELS
------------------------------ ----------------------------
Notary Public
[STAMP]
METROPOLITAN EDISON COMPANY ATTEST:
By: /s/ RJ TOOLE By: /s/
------------------------------ ------------------------
Vice President Assistant Secretary
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JERSEY CENTRAL POWER & LIGHT COMPANY ATTEST:
By: /s/ RJ TOOLE By: /s/
------------------------------ ---------------------------
Vice President Assistant Secretary
PENNSYLVANIA POWER & LIGHT COMPANY
By: /s/ By: /s/ DIANE M. KOCH
------------------------------------ ---------------------------
PECO ENERGY CO.
By: /s/ By: /s/ M. C. PRICE
------------------------------------ ----------------------------
POTOMAC ELECTRIC POWER COMPANY
By: /s/ By:
------------------------------------ ---------------------------
PUBLIC SERVICE ELECTRIC & GAS COMPANY
By: /s/
------------------------------------
Attest:
By: /s/ LINDA J. DECIBUS
------------------------------------
Linda J. Decibus
Assistant Secretary
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AMENDMENT TO CONEMAUGH OPERATING AGREEMENT
SECTION 1. Reference is made to the Conemaugh Operating
Agreement dated December 1, 1967, as amended and supplemented from time to time
(the "Operating Agreement") by and among the Owners (as such term is defined in
the Operating Agreement) and GPU Generation Corporation ("Genco"), as assignee
of Pennsylvania Electric Company.
SECTION 2. Capitalized terms used herein and not otherwise
defined shall have the meanings set forth in the Operating Agreement.
SECTION 3. The parties hereto agree that Section 3.3 of the
Operating Agreement shall be deleted and the following substituted therefor:
3.3 As a general rule, any decision or approval of
the Owners in order to be effective shall be unanimous; provided,
however, that in case of disagreement among the Owners as to any matter
likely to impede or interfere with Genco's operation of the Station,
any action by the Owners under or in connection with the Operating
Agreement or any other agreement between the Owners and any other party
or parties shall be deemed to be the action of all of the Owners and to
be binding upon and inure to the benefit of, all of the Owners, if such
action is approved by vote of either (a) Owners holding in the
aggregate at least 75% of the ownership interests in the Station or (b)
the total number of Owners minus one; it being understood and agreed
that for purposes of this provision, the votes of any affiliated
entities shall be aggregated such that any group of two or more
affiliated entities shall be entitled to a single vote. For purposes
hereof, the term "affiliated" with respect to any entity, shall mean
any entity controlling, controlled by or under common control with,
such entity.
SECTION 4. Except as modified hereby, the Operating Agreement
shall remain in full force and effect:
Dated: March 25, 1998
BALTIMORE GAS & ELECTRIC
ATLANTIC CITY ELECTRIC COMPANY COMPANY
By /s/ H. CARTER KRESGE By /s/
--------------------------------- ---------------------------------
Title Manager - External Operations Title Vice President
------------------------------ ------------------------------
DELMARVA POWER & LIGHT
COMPANY METROPOLITAN EDISION COMPANY
By /s/ H. CARTER KRESGE By /s/ R J TOOLE
--------------------------------- ---------------------------------
Title Manager - External Operations Title Vice President
------------------------------ ------------------------------
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PECO ENERGY COMPANY POTOMAC ELECTRIC POWER COMPANY
By /s/ By /s/
------------------------------------- --------------------------------
Title Mgr - Joint Owner Affairs Title Gen Mgr Bulk Power Mgmt
---------------------------------- -----------------------------
PUBLIC SERVICE ELECTRIC AND
PP&L, INC. GAS COMPANY
By /s/ By /s/
------------------------------------- --------------------------------
Title Mgr - Engr's Tech Svcs Title Vice President - Fossil
---------------------------------- -----------------------------
UGI UTILITIES, INC.
By /s/
-------------------------------------
Title
----------------------------------
GPU GENERATION CORPORATION
By R J TOOLE
-------------------------------------
Title VP Generation
----------------------------------
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[KEYSTONE-CONEMAUGH PROJECTS LETTERHEAD]
April 3, 1998
Mr. Ronald J. Toole
GPU Generation, Inc.
1001 Broad Street
Johnstown, Pennsylvania 15907
Dear Mr. Toole:
RE: TERMINATION WAIVER
We would appreciate your confirming on behalf of GPU Generation, Inc.
("GENCO"), by signing below, the following, which was agreed to at the
Keystone-Conemaugh Owners meeting of March 4, 1998.
GENCO has agreed with the Owners of the Conemaugh Generating Station
("Owners") that, notwithstanding any provision in the respective Operating
Agreement to the contrary, the Owners and GENCO shall each have the right to
terminate the Operating Agreement between the Owners and GENCO effective as of
December 31, 2001 by giving written notice thereof to the other party no later
than JUNE 30, 1999. In other words, each of the parties has agreed to waive its
right under the Operating Agreement to demand that notice of termination
effective December 31, 2001 be delivered no later than December 31, 1998. This
waiver will permit the Owners and GENCO additional time to determine the impact
on the Operating Agreement of a potential divestiture by GPU, Inc. and its
subsidiaries of their ownership interests in the stations and any related
change in the ownership or operation of GENCO. Each of the parties understand
that their waiver of their rights to demand earlier notice of termination does
not constitute a waiver of any of their other rights under the Operating
Agreement.
Please sign eleven copies of this letter where indicated below and return ten
signed originals to us for our files.
Sincerely,
Conemaugh Generating Station Owners
Acknowledged and agreed to:
GPU Generation, Inc.
By: /s/ RONALD J. TOOLE
------------------------
Ronald J. Toole
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ATLANTIC CITY ELECTRIC COMPANY BALTIMORE GAS & ELECTRIC COMPANY
By /s/ By /s/
------------------------------------- --------------------------------
Title Manager - External Operations Title Vice President -
--------------------------------- Fossil Energy
3-19-98 ----------------------------
DELMARVA POWER & LIGHT COMPANY METROPOLITAN EDISON COMPANY
By /s/ By /s/ R J TOOLE
------------------------------------- --------------------------------
Title Manager - External Operations Title VP Generation
--------------------------------- ----------------------------
3-19-98
PECO ENERGY COMPANY PP&L, INC.
By /s/ By /s/
------------------------------------- --------------------------------
Title General Manager Title VP-PP&E
--------------------------------- ----------------------------
POTOMAC ELECTRIC POWER COMPANY PUBLIC SERVICE ELECTRIC AND GAS
COMPANY
By /s/ By /s/
------------------------------------- --------------------------------
Title Title V.P. Fossil Generation
--------------------------------- ----------------------------
UGI UTILITIES, INC.
By /s/
-------------------------------------
Title
---------------------------------
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AMENDMENT
OF THE
CONEMAUGH OPERATING AGREEMENT
DATED AS OF
NOVEMBER 24, 1999
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AMENDMENT
OF THE
CONEMAUGH OPERATING AGREEMENT
This AMENDMENT OF THE CONEMAUGH OPERATING AGREEMENT ("Amendment"),
dated as of the 24th day of November, 1999, by and between Pennsylvania Electric
Company ("Penelec"), a Pennsylvania corporation, and GPU Generation, Inc., a
Delaware corporation ("Genco"), parties of the first part, and Atlantic City
Electric Company, a New Jersey corporation, Baltimore Gas & Electric Company, a
Maryland corporation, Delmarva Power & Light Company, a Virginia and Delaware
corporation, Metropolitan Edison Company, a Pennsylvania corporation, PP&L,
Inc., a Pennsylvania corporation, PECO Energy Company, a Pennsylvania
corporation, Potomac Electric Power Company, a District of Columbia and Virginia
corporation, Public Service Electric & Gas Company, a New Jersey corporation,
and UGI Utilities, Inc., a Pennsylvania corporation (each an "Owner", and
collectively, the "Owners"), parties of the second part,
WITNESSETH:
WHEREAS, the Owners are owners in common of undivided interests in the
Conemaugh Steam Electric Station (said Conemaugh Steam Electric Station,
excluding the Switching Station, as defined herein, the "Generating Station")
located in Indiana County, near New Florence, Pennsylvania; and
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WHEREAS, the Owners are also owners in common of undivided interests in
the Conemaugh Switching Station, a high-voltage electric switching station
located adjacent to the Generating Station and consisting of nine (9) 500 KV
circuit breakers in a breaker-and-a-half arrangement with two generator
circuits, three line circuits and one capacitor bank (said Conemaugh Switching
Station, including all appurtenant and related facilities owned by the Owners as
tenants in common, the "Switching Station"); and
WHEREAS, as of the date hereof, Genco operates the Generating Station
and the Switching Station for the Owners as Penelec's assignee under the
Conemaugh Operating Agreement, dated as of December 1, 1967, as amended and
assigned by Penelec to Genco (said Conemaugh Operating Agreement, as amended
prior to the date hereof and assigned by Penelec to Genco, the "Operating
Agreement"); and
WHEREAS, Metropolitan Edison Company has agreed, among other things, to
sell (the "Asset Sale") its undivided interest in the Generating Station, but
not the Switching Station, to Sithe Energies, Inc., a Delaware corporation
("Sithe"), pursuant to that certain Purchase and Sale Agreement (the "PSA"),
dated as of October 29, 1998, and GPU, Inc. has agreed to concurrently sell to
Sithe (the "Stock Sale") all of the outstanding capital stock of Genco pursuant
to that certain Stock Purchase and Sale Agreement (the "SPA"), dated as of
October 29, 1998; and
WHEREAS, Sithe and the Owners other than Metropolitan Edison Company
desire that after the Asset Sale and Stock Sale are consummated (the "Closing"),
Genco shall continue to operate the Generating Station, but not the Switching
Station, under the Operating Agreement.
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NOW, THEREFORE, In consideration of the premises, the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I - Amendment of the Operating Agreement.
1.1 In the event the PSA and SPA are terminated and no Closing occurs,
then this Amendment shall terminate concurrently with such terminations of the
PSA and SPA, and the Operating Agreement shall remain in effect in accordance
with its terms.
1.2 The right and obligation of Penelec, and of Genco as Penelec's
assignee, to operate and maintain the Switching Station under the Operating
Agreement shall terminate as of the Closing. The parties to the Operating
Agreement shall use reasonable efforts to settle all accounts and wind-up all
transactions under said agreement relating to the Switching Station as promptly
as practicable after the Closing.
1.3 The right and obligation of Genco, as Penelec's assignee, to
operate and maintain the Generating Station under the Operating Agreement shall
continue under the Operating Agreement in accordance with its terms as of and
after the Closing. Notwithstanding Penelec's status as assignor of the Operating
Agreement to Genco, Penelec shall have no obligation or liability as of and
after the Closing for, or in connection with, the operation and maintenance of
the Generating Station or the Switching Station under the Operating Agreement,
and, effective as
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of the Closing, the Owners hereby release and discharge Penelec from any and
all liabilities and obligations of every kind and nature arising out of or in
connection with the operation and maintenance of the Generating Station and the
Switching Station under the Operating Agreement after the Closing. Nothing
herein shall affect the liability, if any, of Penelec arising in connection with
the operation and maintenance of the Generating Station and Switching Station
prior to the closure.
ARTICLE II - Governing Law.
2.1 This Amendment shall be governed by, and construed and enforced in
accordance with, the laws of the Commonwealth of Pennsylvania without giving
effect to the conflict of laws principles thereof.
ARTICLE III - Counterparts.
3.1 This Amendment may be executed by one or more of the parties hereto
in any number of separate identical counterparts, no one of which need be signed
by all of the parties so long as each of the parties has signed at least one
counterpart. Each such counterpart, when signed and delivered by one or more of
the parties hereto shall constitute an original instrument and all such
counterparts shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by the undersigned officers thereunto duly authorized as of the day and
year first above written.
PENNSYLVANIA ELECTRIC COMPANY GPU GENERATION, INC.
By /s/ R J TOOLE By /s/ R J TOOLE
-------------------------------- --------------------------------
Title V.P. Generation Title V.P. Generation
----------------------------- -----------------------------
CONEMAUGH GENERATING STATION OWNERS:
BALTIMORE GAS & ELECTRIC
ATLANTIC CITY ELECTRIC COMPANY COMPANY
By /s/ H. CARTER KRESGE By /s/
-------------------------------- --------------------------------
Title Manager - External Operations Title Vice President
----------------------------- -----------------------------
DELMARVA POWER & LIGHT COMPANY METROPOLITAN EDISON COMPANY
By /s/ H. CARTER KRESGE By /s/ R J TOOLE
-------------------------------- --------------------------------
Title Manager - External Operations Title V. P. Generation
----------------------------- -----------------------------
PP&L, INC. PECO ENERGY COMPANY
By /s/ By /s/
-------------------------------- --------------------------------
Title Title VP Fossil Ops
----------------------------- -----------------------------
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PUBLIC SERVICE ELECTRIC AND
POTOMAC ELECTRIC POWER COMPANY GAS COMPANY
By /s/ By /s/
---------------------------------- ------------------------------
Title General Manager Title VP - Fossil Generation
------------------------------- ---------------------------
Bulk Power Management
UGI UTILITIES, INC.
By /s/
----------------------------------
Title VP & CM [ILLEGIBLE]
-------------------------------