Exhibit 10(a)54
AMENDMENT NUMBER FOUR, DATED AS OF DECEMBER 31, 1990,
TO THE PLANT ROBERT W. SCHERER UNITS NUMBER ONE AND TWO
PURCHASE AND OWNERSHIP PARTICIPATION AGREEMENT
among
GEORGIA POWER COMPANY, OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP GENERATION & TRANSMISSION CORPORATION),
MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA and
CITY OF DALTON, GEORGIA
AMENDMENT NUMBER FOUR
TO THE PLANT ROBERT W. SCHERER UNITS NUMBER ONE AND TWO
PURCHASE AND OWNERSHIP PARTICIPATION AGREEMENT
TABLE OF CONTENTS
Section No. Page
1. Certain Definitions . . . . . . . . . . . . . . . . . . 2
2. Amendment to Section 1 . . . . . . . . . . . . . . . . . 2
3. Amendment to Section 3(c) . . . . . . . . . . . . . . . 13
4. Amendment to Section 5(e) . . . . . . . . . . . . . . . 14
5. Amendment to Section 5(f) . . . . . . . . . . . . . . . 14
6. Amendment to Section 5(g) . . . . . . . . . . . . . . . 14
7. Amendment to Section 5(h) . . . . . . . . . . . . . . . 14
8. Amendment to Section 5(i) . . . . . . . . . . . . . . . 15
9. Amendment to Section 5(j) . . . . . . . . . . . . . . . 16
10. Amendment to Section 5(k) . . . . . . . . . . . . . . . 17
11. Amendment to Section 5(n) . . . . . . . . . . . . . . . 22
12. Amendment to Section 5(p) . . . . . . . . . . . . . . . 33
13. Amendment to Section 6(g) . . . . . . . . . . . . . . . 44
14. Amendment to Section 9 . . . . . . . . . . . . . . . . . 45
15. Amendment to Section 10(a) . . . . . . . . . . . . . . . 49
16. Effectiveness of this Amendment . . . . . . . . . . . . 49
17. Miscellaneous . . . . . . . . . . . . . . . . . . . . . 49
EXHIBITS
I. Existing Contracts
APPENDIX
A. Capital Budget
THIS AMENDMENT, dated as of December 31, 1990, is by and
among Georgia Power Company ("GPC"), a corporation organized and
existing under the laws of the State of Georgia, OGLETHORPE POWER
CORPORATION (AN ELECTRIC MEMBERSHIP GENERATION & TRANSMISSION
CORPORATION), an electric membership corporation organized and
existing under the laws of the State of Georgia ("OPC"), the
MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA, a public corporation and
an instrumentality of the State of Georgia ("MEAG"), and the CITY
OF DALTON, GEORGIA, an incorporated municipality in the State of
Georgia acting by and through its Board of Water, Light and
Sinking Fund Commissioners ("Dalton"), and is Amendment Number
Four to that certain Plant Robert W. Scherer Units Numbers One
and Two Purchase and Ownership Participation Agreement, dated as
of May 15, 1980 (as previously amended, the "Ownership
Agreement"), among GPC, OPC, MEAG and Dalton.
W I T N E S S E T H:
A. The Participants have previously entered into the
Ownership Agreement and have previously entered into the
Operating Agreement providing, among other things, for GPC to
have sole authority to arrange for and acquire all fossil fuel
for the Units and for all Participants and Additional Unit
Participants to participate in the Plant Scherer Coal Stockpile.
B. The Participants mutually desire to provide that certain
Participants and Additional Unit Participants may elect to
maintain separate coal stockpiles for accounting and other
purposes and for purposes of payment of Separate Coal Stockpile
Costs and to provide for such Participants and Additional Unit
Participants to procure coal for use in connection with their
undivided ownership interests in the Units and the Additional
Units.
NOW, THEREFORE, in consideration of the promises and the
mutual agreements herein set forth, the Participants, intending
to be mutually bound among themselves and to the Additional Unit
Participants, hereby agree and amend the Ownership Agreement as
follows:
1. Certain Definitions. Capitalized terms and
phrases used and not otherwise defined in this Amendment shall
have the respective meanings assigned to them by the Ownership
Agreement, the Operating Agreement, or both, unless the context
or use clearly indicates otherwise. All rules of interpretation,
construction, or both, set forth in the Ownership Agreement shall
apply with equal force and effect to this Amendment.
2. Amendment to Section 1 of the Ownership Agreement.
(a) Section 1(h) of the Ownership Agreement is hereby
amended to delete the words "a 50% undivided ownership
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interest in the Plant Scherer Coal Stockpile (provided,
however, that from and after any contribution to the Plant
Scherer Coal Stockpile pursuant to clause (i) or (ii) of
Section 5(p) hereof, only that portion of the Plant Scherer
Coal Stockpile that is owned by the owners of undivided
ownership interests in Unit No. 2 pursuant to clause (iii)
of Section 5(p) hereof shall constitute a part of Scherer
Unit No. 2)".
(b) Section 1(i) of the Ownership Agreement is hereby
amended to delete the words "fuel (including a 50% undivided
interest in the Plant Scherer Coal Stockpile)" and
"provided, however, that from and after any contribution to
the Plant Scherer Coal Stockpile pursuant to clause (i) or
(ii) of Section 5(p) hereof, only that portion of the Plant
Scherer Coal Stockpile that is owned by the owners of
undivided ownership interests in Unit No. 1 pursuant to
clause (iii) of Section 5(p) hereof shall constitute a part
of Scherer Unit No. 1".
(c) Section 1 of the Ownership Agreement is hereby
amended by adding the following to the end thereof:
(s) COMMON COAL STOCKPILE. "Common Coal Stockpile" shall
refer to that portion of the Plant Scherer Coal Stockpile
attributable to the ownership interests of the Common Coal
Stockpile Participants from time to time pursuant to Section 5(p)
of this Ownership Agreement.
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(t) COMMON COAL STOCKPILE COSTS. "Common Coal Stockpile
Costs" shall mean all costs incurred by GPC on its own behalf and
as agent for the other Common Coal Stockpile Participants (or by
a Common Procurement Participant in connection with any contract
for fuel entered into in accordance with the provisions of
Section 2(c)(i) of the Operating Agreement) that are allocable to
the acquisition, processing, transportation, delivering,
handling, storage, accounting, analysis, measurement and disposal
of coal for the Common Coal Stockpile, including, without
limitation, any advance payments in connection therewith, less
credits related to such costs applied as appropriate, and
including, without limitation, that portion of administrative and
general expenses which is properly and reasonably allocable to
acquisition and management of coal for the Common Coal Stockpile
and for which the incurring party has not been otherwise
reimbursed by the other Common Coal Stockpile Participants.
Common Coal Stockpile Costs shall not include Other Fuel Costs,
Separate Coal Stockpile Costs and amortization of the Plant
Scherer initial fossil fuel supply, (including, without
limitation, unrecoverable base coal).
(u) COMMON COAL STOCKPILE PARTICIPANTS. "Common Coal
Stockpile Participants" shall mean such Participants and
Additional Unit Participants as are participating in the Common
Coal Stockpile from time to time pursuant to Section 5(p) of this
Ownership Agreement.
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(v) COMMON PROCUREMENT. "Common Procurement" shall have
the meaning assigned in Section 5(n)(i) of this Ownership
Agreement.
(w) COMMON PROCUREMENT PARTICIPANT. "Common Procurement
Participant" shall mean, initially, the Common Coal Stockpile
Participants and each Separate Coal Stockpile Participant (i)
which has not exercised its rights under Section 2(c)(iii) of
the Operating Agreement, Section 3(c), SEPARATE FUEL PROCUREMENT,
of the Unit Three Operating Agreement or Section 3(c), SEPARATE
FUEL PROCUREMENT, of the Unit Four Operating Agreement, (ii)
which has not otherwise been found by a vote of a majority of the
Pro Forma Ownership Interest in Plant Scherer of the then Common
Procurement Participants (excluding the Pro Forma Ownership
Interest in Plant Scherer of the Common Procurement Participant
under consideration), to have violated the policies and rules for
Common Procurement Participants established from time to time by
the Plant Scherer Managing Board or (iii) which has been
reestablished as a Common Procurement Participant pursuant to
Section 5(n) hereof.
(x) CO-OWNERS' CONSENTS. "Co-Owners' Consents" shall mean
those certain Consents, Amendments, and Assumptions Nos. 1-4
dated December 30, 1985 among GPC, OPC, MEAG, Dalton, Gulf Power
Company, and Wilmington Trust Company and NationsBank of Georgia,
N.A. (as successor to William J. Wade) as Owner Trustees, and
those certain Amendment to Consents, Amendments, and Assumptions
Nos. 1-4 dated August 16, 1993, among GPC, OPC, MEAG, Dalton,
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Gulf Power Company, Jacksonville Electric Authority and Florida
Power & Light Company and Wilmington Trust Company and
NationsBank of Georgia, as Owner Trustees.
(y) FERC. The "FERC" shall mean the Federal Energy
Regulatory Commission or any entity succeeding to the powers and
functions thereof.
(z) GEORGIA INTEGRATED TRANSMISSION SYSTEM. "Georgia
Integrated Transmission System" shall mean the integrated
transmission system owned by GPC, OPC, MEAG and Dalton and
established and operated pursuant to those certain Agreements
between GPC and OPC dated as of January 6, 1975 and June 9, 1986,
those certain Agreements between GPC and MEAG dated as of August
27, 1976, and those certain Agreements between GPC and Dalton
dated as of August 27, 1976, as any one or more of those
Agreements may be amended, modified, revised, restated or
superseded from time to time, or any successor transmission
system thereto.
(aa) Governmental Authority. "Governmental Authority"
shall mean any local, state, regional or federal administrative,
legal, judicial, or executive agency, court, commission,
department or other entity, but excluding any agency, commission,
department or other such entity acting in its capacity as lender,
guarantor, mortgagee and excluding any Participant or Additional
Unit Participant.
(ab) LESSOR. "Lessor" shall have the meaning assigned in
the Co-Owners' Consents.
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(ac) LESSOR POSSESSION DATE. "Lessor Possession Date" shall
have the meaning assigned in the Co-Owners' Consents.
(ad) OPERATING AGREEMENT. "Operating Agreement" shall refer
to the Plant Robert W. Scherer Units Numbers One and Two
Operating Agreement, dated as of May 15, 1980, among GPC, OPC,
MEAG and Dalton, as amended as of December 31, 1985 and as of
December 31, 1990.
(ae) OPERATING COSTS. "Operating Costs" shall mean the
aggregate of Scherer Unit No. 1 Operating Costs, Scherer Unit No.
2 Operating Costs and Common Facilities Operating Costs, but
shall not include Common Coal Stockpile Costs, Separate Coal
Stockpile Costs and Other Fuel Costs nor any costs and expenses
attributable to the Additional Units nor any costs and expenses
in connection with the improvement of the land described in
Exhibit G of this Ownership Agreement or in connection with the
operation, maintenance, care, abandonment or removal of any
improvements thereto (whether or not completed). "Scherer Unit
No. 1 Operating Costs, "Scherer Unit No. 2 Operating Costs," and
"Common Facilities Operating Costs" shall mean, respectively, all
costs and expenses incurred by GPC on its own behalf and as agent
for the other Participants in respect of the management, control,
operation or maintenance of (i) Scherer Unit No. 1, in the case
of Scherer Unit No. 1 Operating Costs, (ii) Scherer Unit No. 2,
in the case of Scherer Unit No. 2 Operating Costs, and (iii) the
Plant Scherer Common Facilities, in the case of Common Facilities
Operating Costs, in each case including without limitation that
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portion of administrative and general expenses incurred by GPC
which is properly and reasonably allocable to Scherer Unit No. 1,
Scherer Unit No. 2, and the Plant Scherer Common Facilities,
respectively, for which GPC has not been otherwise reimbursed by
the other Participants, and which are properly recordable in
accordance with the Operating Expense Instructions and in
appropriate accounts as set forth in the Uniform System of
Accounts.
(af) OTHER FUEL COSTS. "Other Fuel Costs" shall mean all
costs and expenses, other than Common Coal Stockpile Costs and
Separate Coal Stockpile Costs, incurred by GPC on its own behalf
and as agent for the other Participants and Additional Unit
Participants that are allocable to the acquisition, processing,
transportation, delivering, handling, storage, accounting,
analysis, measurement and disposal of fossil materials required
for Plant Scherer, including, without limitation, any advance
payments in connection therewith, less credits related to such
costs applied as appropriate, and including, without limitation,
that portion of administrative and general expenses which is
properly and reasonably allocable to acquisition and management
of fossil fuel (other than coal for the Common Coal Stockpile and
the Separate Coal Stockpiles) for Plant Scherer. Other Fuel
Costs shall not include Common Coal Stockpile Costs, Separate
Coal Stockpile Costs and amortization of the Plant Scherer
initial fossil fuel supply (including, without limitation
unrecoverable base coal).
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(ag) OWNER TRUSTEE. "Owner Trustee" shall have the meaning
assigned in the Co-Owners' Consents.
(ah) OWNER TRUSTEE'S COAL SUPPLY. "Owner Trustee's Coal
Supply" shall have the meaning assigned in Section 9(x) of this
Ownership Agreement.
(ai) OWNERSHIP AGREEMENT. "Ownership Agreement" shall refer
to the Plant Robert W. Scherer Units Numbers One and Two Purchase
and Ownership Agreement, dated as of May 15, 1980, among GPC,
OPC, MEAG and Dalton, as amended as of December 30, 1985, July 1,
1986, August 1, 1988 and as of December 31, 1990.
(aj) PLANT SCHERER MANAGING BOARD AGREEMENT. The "Plant
Scherer Managing Board Agreement" shall mean the Plant Scherer
Managing Board Agreement, dated as of the date hereof, by and
among the Participants and the Additional Unit Participants as
such agreement may be amended from time to time.
(ak) PLANT SCHERER PARTICIPATION AGREEMENTS. "Plant
Scherer Participation Agreements" shall mean this Ownership
Agreement, the Operating Agreement, the Unit Three Ownership
Agreement, the Unit Three Operating Agreement, the Unit Four
Ownership Agreement, the Unit Four Operating Agreement, the Co-
Owners' Consents and the Plant Scherer Managing Board Agreement.
(al) PRO FORMA OWNERSHIP INTEREST IN PLANT SCHERER. "Pro
Forma Ownership Interest in Plant Scherer" shall mean for each
Participant and Additional Unit Participant the percentage
obtained by dividing by four the sum of (A) such Participant's or
Additional Unit Participant's percentage undivided ownership
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interest, if any, in Scherer Unit No. 1, plus (B) its percentage
undivided ownership interest, if any, in Scherer Unit No. 2, plus
(C) its percentage undivided ownership interest, if any, in
Scherer Unit No. 3, plus (D) its percentage undivided ownership
interest, if any, in Scherer Unit No. 4.
(am) SEPARATE COAL PROCUREMENT. "Separate Coal
Procurement" shall mean the procurement of coal pursuant to the
standards and procedures set forth under Section 2(c)(iii) of the
Operating Agreement.
(an) SEPARATE COAL STOCKPILE. "Separate Coal Stockpile"
shall have the meaning assigned in Section 5(p) of this Ownership
Agreement.
(ao) SEPARATE COAL STOCKPILE COSTS. "Separate Coal
Stockpile Costs" shall mean with respect to each Separate Coal
Stockpile Participant all costs incurred by GPC as agent for such
Separate Coal Stockpile Participant or by a Common Procurement
Participant in connection with any contract for fuel entered into
in accordance with the provisions of Section 2(c)(i) of the
Operating Agreement that are allocable to the acquisition,
processing, transportation, delivering, handling, storage,
accounting, analysis, measurement and disposal of coal for such
Separate Coal Stockpile Participant, including, without
limitation, all costs incurred by GPC in administering fuel and
transportation contracts entered into by such Separate Coal
Stockpile Participant pursuant to any one or more of Sections
5(n) or 5(p) of this Ownership Agreement or Section 2(c)(iii) of
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the Operating Agreement, and including any advance payments in
connection therewith, less credits related to such costs applied
as appropriate, and including that portion of administrative and
general expenses which is properly and reasonably allocable to
acquisition and management of coal for such Separate Coal
Stockpile Participant's Separate Coal Stockpile and for which the
incurring party has not otherwise been reimbursed. Separate Coal
Stockpile Costs shall not include Common Coal Stockpile Costs,
Other Fuel Costs and amortization of the Plant Scherer initial
fossil fuel supply, including, without limitation, unrecoverable
base coal.
(ap) SEPARATE COAL STOCKPILE PARTICIPANT. "Separate Coal
Stockpile Participant" shall mean the Participants and Additional
Unit Participants making an election to discontinue participation
in the Common Coal Stockpile pursuant to Section 5(p) hereof or
pursuant to the applicable provisions of the other Plant Scherer
Participation Agreements, or which has otherwise entered into an
agreement with GPC to become a Separate Coal Stockpile
Participant pursuant to subsection (vii) of Section 5(p) of this
Ownership Agreement. Such Participants and Additional Unit
Participants are referred to individually as a "Separate Coal
Stockpile Participant" and collectively as "Separate Coal
Stockpile Participants".
(aq) SEPARATE PROCUREMENT PARTICIPANT. "Separate
Procurement Participant" shall mean each Separate Coal Stockpile
Participant (i) which has exercised its rights under Section
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2(c)(iii) of the Operating Agreement; Section 3(c), SEPARATE FUEL
PROCUREMENT, of the Unit Three Operating Agreement; or Section
3(c), SEPARATE FUEL PROCUREMENT, of the Unit Four Operating
Agreement or (ii) which has been found by a vote of a majority of
the Pro Forma Ownership Interest in Plant Scherer of the Common
Procurement Participants (excluding the Pro Forma Ownership
Interest in Plant Scherer of the Common Procurement Participant
under consideration) to have violated the policies and rules for
Common Procurement Participants established from time to time by
the Plant Scherer Managing Board and which has not been
reestablished as a Common Procurement Participant pursuant to
Section 5(n) of this Ownership Agreement.
(ar) SPOT COAL. "Spot Coal" shall mean all coal purchased
for the Common Coal Stockpile or any Separate Coal Stockpile
under an arrangement of acquisition for a period of less than one
year, or some other period agreed to by the written approval or
consent of those members of the Plant Scherer Managing Board
which collectively own at least a 76% Pro Forma Ownership
Interest in Plant Scherer.
(as) UNIFORM SYSTEM OF ACCOUNTS. The "Uniform System of
Accounts" shall mean the FERC Uniform System of Accounts
prescribed for Public Utilities and Licensees subject to the
provisions of the Federal Power Act, as the same now exist or may
be hereafter amended by the FERC.
(at) UNIT FOUR OPERATING AGREEMENT. "Unit Four Operating
Agreement" shall refer to the Plant Robert W. Scherer Unit Number
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Four Operating Agreement, dated as of December 31, 1990, among
GPC, FPL, and JEA as the same may be amended from time to time.
(au) UNIT FOUR OWNERSHIP AGREEMENT. "Unit Four Ownership
Agreement" shall refer to the Plant Robert W. Scherer Unit Number
Four Amended and Restated Ownership Agreement, dated as of
December 31, 1990, among GPC, FPL, and JEA as the same may be
amended from time to time.
(av) UNIT THREE OPERATING AGREEMENT. "Unit Three Operating
Agreement" shall refer to the Plant Robert W. Scherer Unit Number
Three Amended and Restated Operating Agreement, between GPC and
Gulf, dated as of December 31, 1990.
(aw) UNIT THREE OWNERSHIP AGREEMENT. "Unit Three Ownership
Agreement" shall refer to the Plant Robert W. Scherer Unit Number
Three Amended and Restated Ownership Agreement, between GPC and
Gulf, dated as of December 31, 1990."
3. Amendment to Section 3(c) of the Ownership
Agreement. Section 3(c) of the Ownership Agreement is hereby
amended to add the following language to the definition of
"Common Facility Cost of Construction" contained therein. In
subsection (ii) of the definition, insert the language "prior to
the completion of Plant Scherer" directly after the phrase "all
amounts paid to SCSI in respect of engineering design services
related to Plant Scherer."
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4. Amendment to Section 5(e) of the Ownership
Agreement. Section 5(e) of the Ownership Agreement is hereby
amended by adding the following at the end of such Section 5(e).
"Notwithstanding the foregoing provisions of this
Section 5(e) with respect to information to be provided by GPC
and applicable times and dates, the matters set forth in Appendix
A attached hereto, as the same may be revised from time to time
by agreement among all of the Participants and GPC as agent for
the Participants, shall govern and control any such conflicting
or contrary provisions of this Section 5(e)."
5. Amendment to Section 5(f) of the Ownership
Agreement. Section 5(f) of the Ownership Agreement is hereby
amended to delete the words "Fuel Costs" throughout and to
substitute the words "Common Coal Stockpile Costs, Separate Coal
Stockpile Costs and Other Fuel Costs" therefor.
6. Amendment to Section 5(g) of the Ownership
Agreement. Section 5(g) of the Ownership Agreement is hereby
amended to delete the words "and Fuel Costs" throughout and to
substitute the words "Common Coal Stockpile Costs, Separate Coal
Stockpile Costs and Other Fuel Costs" therefor.
7. Amendment to Section 5(h) of the Ownership
Agreement. The first sentence of Section 5(h) of the Ownership
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Agreement is hereby amended to delete the words "and Fuel Costs"
and to substitute the words "Common Coal Stockpile Costs (which
shall be available only to the Common Coal Stockpile
Participants), Separate Coal Stockpile Costs (which shall be
available only to each Separate Coal Stockpile Participant with
respect to its Separate Coal Stockpile Costs) and Other Fuel
Costs" therefor.
8. Amendment to Section 5(i) of the Ownership
Agreement. Section 5(i) of the Ownership Agreement is hereby
amended as follows:
(a) The second sentence of Section 5(i)(iii) of the
Ownership Agreement is hereby amended to delete the words
"Fuel Costs" and to substitute the words "Common Coal
Stockpile Costs or Separate Coal Stockpile Costs, as the
case may be, Other Fuel Costs" therefor.
(b) The second sentence of Section 5(i)(iv)(1) of the
Ownership Agreement is hereby amended to delete the words
"Fuel Costs" and to substitute the words "Common Coal
Stockpile Costs or Separate Coal Stockpile Costs, as the
case may be, Other Fuel Costs" therefor.
(c) The second sentence of Section 5(i)(iv)(2) of the
Ownership Agreement is hereby amended to delete the words
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"Fuel Costs" and to substitute the words "Common Coal
Stockpile Costs or Separate Coal Stockpile Costs, as the
case may be, and Other Fuel Costs" therefor.
(d) The first sentence of Section 5(i)(ix) of the
Ownership Agreement is hereby amended to delete the words
"and Fuel Costs" and to substitute the words "Common Coal
Stockpile Costs, Separate Coal Stockpile Costs and Other
Fuel Costs" therefor.
(e) The third sentence of Section 5(i)(xii) of the
Ownership Agreement is hereby amended to delete the words
"Fuel Costs, or both," and to substitute the words "Common
Coal Stockpile Costs, Separate Coal Stockpile Costs and
Other Fuel Costs" therefor.
9. Amendment to Section 5(j) of the Ownership
Agreement. Section 5(j) of the Ownership Agreement is hereby
amended as follows:
(a) To delete the words "and Fuel Costs" throughout and
to substitute the words "Common Coal Stockpile Costs,
Separate Coal Stockpile Costs and Other Fuel Costs"
therefor.
(b) To add the following at the end thereof:
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"Provided, however, in no event shall the
provisions of this Section 5(j) apply to any proposed
sale of an undivided ownership interest in either or
both of the Additional Units."
10. Amendment to Section 5(k) of the Ownership
Agreement. Section 5(k) of the Ownership Agreement is hereby
amended by deleting such Section 5(k) in its entirety and by
substituting, in lieu thereof, the following:
(k) Damage or Destruction. Subject to the receipt of all
requisite approvals of any Governmental Authority having
jurisdiction:
(i) Decision to Repair or Reconstruct the Units.
In the event the Units (each of which Scherer Unit No. 1 and
Scherer Unit No. 2 are defined to include a 50% undivided
ownership interest in the Unit Common Facilities) or any
portion thereof are damaged or destroyed, and the cost of
repairs or reconstruction is estimated to be fully covered
by the aggregate amount of insurance coverage procured and
maintained by the agent on behalf of the Participants (and
for this purpose neither the existence nor the amount of any
deductibles shall be taken into account in determining the
aggregate amount of insurance coverage) covering such
repairs or reconstruction, then, unless Participants owning
at least in an aggregate 75% undivided ownership interest in
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the Units, including MEAG, so long as MEAG owns at least a
15.1% undivided ownership interest in the Units, determine
not to repair or reconstruct the Units, the Units shall be
repaired or reconstructed.
(ii) Decision not to Repair or Reconstruct the
Units. In the event the Units (each of which Scherer Unit
No. 1 and Scherer Unit No. 2 are defined to include a 50%
undivided ownership interest in the Unit Common Facilities)
or any portion thereof are damaged or destroyed, and the
cost of repairs or reconstruction is estimated to be more
than the aggregate amount of insurance coverage procured and
maintained by the agent on behalf of the Participants (and
for this purpose neither the existence nor the amount of any
deductibles shall be taken into account in determining the
aggregate amount of insurance coverage) covering such
repairs or reconstruction, then, unless Participants owning
at least in an aggregate 75% undivided ownership interest in
the Units, including MEAG, so long as MEAG owns at least a
15.1% undivided ownership interest in the Units, determine
to repair or reconstruct the Units, the Units shall not be
repaired or reconstructed.
(iii) Incomplete Identity of Ownership or
Different Undivided Ownership Interests in Unit No. 1 and
Unit No. 2. Notwithstanding the foregoing voting
provisions, at such times as (a) there is not complete
identity of ownership between the Participants which own
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undivided ownership interests in Unit No. 1 and the
Participants which own undivided ownership interests in Unit
No. 2, or (b) a Participant owns a percentage undivided
ownership interest in Unit No. 1 which is different from
such Participant's percentage undivided ownership interest
in Unit No. 2 (or owns an undivided ownership interest in
either, but not both, of Unit No. 1 and Unit No. 2) a
decision not to repair or reconstruct Unit No. 1 shall be
made by Participants owning not less than an aggregate 75%
undivided ownership interest in Unit No. 1, including MEAG,
so long as MEAG owns at least a 15.1% undivided ownership
interest in Unit No. 1, a decision not to repair or
reconstruct Unit No. 2 shall be made by Participants owning
not less than an aggregate 75% undivided ownership interest
in Unit No. 2, including MEAG, so long as MEAG owns at least
a 15.1% undivided ownership interest in Unit No. 2.
(iv) Decision to Repair or Reconstruct the Plant
Scherer Common Facilities. In the event the Plant Scherer
Common Facilities or any portion thereof are damaged or
destroyed, and the cost of repairs or reconstruction is
estimated to be fully covered by the aggregate amount of
insurance coverage procured and maintained by the agent on
behalf of the Participants and Additional Unit Participants
(and for this purpose neither the existence nor the amount
of any deductibles shall be taken into account in
determining the aggregate amount of insurance coverage)
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covering such repairs or reconstruction, then, unless
Participants and Additional Unit Participants owning at
least an aggregate 76% undivided ownership interest in the
Plant Scherer Common Facilities, including MEAG, so long as
MEAG owns at least a 15.1% undivided ownership interest in
the Plant Scherer Common Facilities determine not to repair
or reconstruct the Plant Scherer Common Facilities, the
Plant Scherer Common Facilities shall be repaired or
reconstructed.
(v) Decision not to Repair or Reconstruct the
Plant Scherer Common Facilities. In the event the Plant
Scherer Common Facilities or any portion thereof are damaged
or destroyed, and the cost of repairs or reconstruction is
estimated to be more than the aggregate amount of insurance
coverage procured and maintained by the agent on behalf of
the Participants and Additional Unit Participants (and for
this purpose neither the existence nor the amount of any
deductibles shall be taken into account in determining the
aggregate amount of insurance coverage) covering such
repairs or reconstruction, then, unless Participants and
Additional Unit Participants owning at least an aggregate
76% undivided ownership interest in the Plant Scherer Common
Facilities, including MEAG, so long as MEAG owns at least a
15.1% undivided ownership interest in the Plant Scherer
Common Facilities determine to repair or reconstruct the
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Plant Scherer Common Facilities, the Plant Scherer Common
Facilities shall not be repaired or reconstructed.
(vi) Reimbursement of the Repairing or
Reconstructing Participants and Additional Unit
Participants. If as a result of the preceding subsections
(i) through (v), Scherer Unit No. 1, Scherer Unit No. 2, the
Unit Common Facilities, the Plant Scherer Common Facilities
or any combination of them are not to be repaired or
reconstructed but one or more Participants or Additional
Unit Participants desire the repair or reconstruction
thereof, Scherer Unit No. 1, Scherer Unit No. 2, the Unit
Common Facilities, the Plant Scherer Common Facilities or
any combination thereof, as the case may be, shall be
repaired or reconstructed; provided, however, that the
Participants or Additional Unit Participants desiring to
repair or reconstruct the Scherer Unit No. 1, Scherer Unit
No. 2, the Unit Common Facilities, or the Plant Scherer
Common Facilities, as the case may be, shall bear the full
cost of such repair or reconstruction (after taking into
account available insurance proceeds of such Participants
and Additional Unit Participants); and provided further,
that if any other Participant or Additional Unit Participant
should thereafter desire to obtain its entitlement of energy
from its Unit or Additional Unit but would not have been
able to obtain such entitlement but for the repairs or
reconstruction effected pursuant to this paragraph (vi),
21
such other Participant or Additional Unit Participant shall
reimburse the repairing or reconstructing Participants and
Additional Unit Participants their pro rata share of the net
book value of the costs of such repairs or reconstruction,
including the cost of capital actually incurred, of such
repairing or reconstructing Participant or Additional Unit
Participant. Except as otherwise agreed to by the
Participants and Additional Unit Participants, the
Participants may not repair or reconstruct the Additional
Units or the Additional Unit Common Facilities and the
Additional Unit Participants may not repair or reconstruct
the Units or the Unit Common Facilities."
11. Amendment to Section 5(n) of the Ownership
Agreement. Section 5(n) of the Ownership Agreement is hereby
amended by deleting such Section 5(n) in its entirety and
substituting, in lieu thereof, the following:
(n) Fossil Fuel.
(i) (A) Coal and Transportation Procurement by
GPC - Initiation Until Receipt of Offers. Subject to
the provisions of Section 4(c) of this Agreement and
the provisions of Sections 2(c) and 4(c) of the
Operating Agreement, GPC, on its own behalf and as
agent for the other Participants, shall have sole
authority to and shall arrange for and acquire all
22
fossil fuel and fuel transportation for the Units
consistent with such policies and procedures with
respect thereto as may be adopted from time to time by
the Plant Scherer Managing Board and shall have sole
authority to administer all fuel and fuel
transportation standards for fossil fuel for the Units
consistent with such standards with respect thereto as
may be adopted from time to time by the Plant Scherer
Managing Board. GPC, on its own behalf and as agent
for the other Participants and Additional Unit
Participants, shall procure coal and transportation
from time to time for the Common Coal Stockpile and for
each of the Separate Coal Stockpile Participants which
is at such time a Common Procurement Participant. At
such times as GPC deems it appropriate to procure coal
or transportation for the Common Coal Stockpile, GPC
shall consult with each of the Separate Coal Stockpile
Participants which are then Common Procurement
Participants to determine their procurement
requirements for their Separate Coal Stockpiles and to
determine the procurement strategy desired by each of
the Common Procurement Participants. At any other time
a Separate Coal Stockpile Participant which at such
time is also a Common Procurement Participant may
request that GPC commence a coal or transportation
procurement for the requirements of such Separate Coal
23
Stockpile Participant's Separate Coal Stockpile, and
GPC likewise shall consult with the other Separate Coal
Stockpile Participants which are then Common
Procurement Participants to determine their procurement
requirements for their Separate Coal Stockpiles and to
determine the procurement strategy desired by each of
the other Common Procurement Participants. In each
case, GPC, on its own behalf and as agent for the other
Common Coal Stockpile Participants and for the Separate
Coal Stockpile Participants which are then Common
Procurement Participants expressing a desire to
participate in such Common Procurement, shall use its
reasonable best efforts to develop a procurement
strategy to accommodate the requirements and
procurement strategies of GPC for the Common Coal
Stockpile and of the Separate Coal Stockpile
Participants which are then Common Procurement
Participants expressing a desire to participate in such
Common Procurement; provided, however, that GPC shall
not be required to accommodate the requirements or
procurement strategy of any Separate Coal Stockpile
Participant which is a Common Procurement Participant
that is incompatible with the guidelines with respect
to Common Procurement adopted from time to time by the
Plant Scherer Managing Board or which is incompatible
with the requirements or procurement strategy desired
24
by the Common Procurement Participants initiating the
Common Procurement. GPC, on its own behalf and as
agent for the other Common Coal Stockpile Participants
and for the Separate Coal Stockpile Participants which
are then Common Procurement Participants electing to
participate in such Common Procurement, shall then
initiate a Common Procurement in an effort to obtain
offers from coal vendors to sell coal, offers from
transporters to provide transportation, or both
(individually, an "Offer" and collectively, "Offers")
to meet the requirements and procurement strategy of
GPC for the Common Coal Stockpile and of each of the
Separate Coal Stockpile Participants which are Common
Procurement Participants electing to participate in
such Common Procurement for its Separate Coal
Stockpile.
(B) Coal and Transportation Procurement by
GPC - After Receipt of Offers. Upon receipt of one or
more Offers, GPC, on its own behalf and as agent for
the other Participants and Additional Unit
Participants, shall offer the Separate Coal Stockpile
Participants which are Common Procurement Participants
electing to participate in such Common Procurement the
opportunity to participate in each such Offer. If two
or more of such Common Procurement Participants
(including, without limitation, GPC on behalf of the
25
Common Coal Stockpile) elect to participate in any
particular Offer, GPC, as agent for the Common Coal
Stockpile and each Separate Coal Stockpile Participant
which is a Common Procurement Participant shall have
the right to participate in such Offer up to the
proportion that such Common Procurement Participant's
Pro Forma Ownership Interest in Plant Scherer bears to
the aggregate of the Pro Forma Ownership Interests in
Plant Scherer of all Common Procurement Participants
electing to participate in such Offer, and for such
purpose, in computing GPC's Pro Forma Ownership
Interest in Plant Scherer there shall be added to GPC's
Pro Forma Ownership Interest in Plant Scherer the Pro
Forma Ownership Interest in Plant Scherer of the other
Participants and Additional Unit Participants which are
then Common Coal Stockpile Participants. If GPC, as
agent for the Common Coal Stockpile, or any of the
Separate Coal Stockpile Participants which are Common
Procurement Participants elect to participate in any
such Offer on a timely basis, GPC will negotiate with
the supplier of such Offer in an effort to develop
final contract terms and conditions satisfactory to
GPC, as agent for the Common Coal Stockpile, and the
Separate Coal Stockpile Participants which are Common
Procurement Participants electing to participate in
such Offer, and GPC, as agent for the Common Coal
26
Stockpile, and each participating Separate Coal
Stockpile Participant which is a Common Procurement
Participant shall enter into a separate contract with
such supplier, which contract for such Separate Coal
Stockpile Participant shall provide that GPC shall be
the exclusive agent on behalf of such Separate Coal
Stockpile Participant for the administration of such
contract upon such terms and conditions as are
satisfactory to GPC; provided, however, that except as
otherwise set forth herein and in the Operating
Agreement, such Separate Coal Stockpile Participant
shall have sole authority, subject to the policies and
procedures adopted or revised from time to time by the
Plant Scherer Managing Board, to make or direct major
economic decisions which are not administrative in
nature, including, without limitation, to extend,
terminate or renegotiate the contract or exercise
options thereunder and to sue the supplier. GPC makes
no representation or warranty that any Common
Procurement effort will satisfy either the requirements
or the procurement strategy of any Participant or
Additional Unit Participant, and GPC shall have no
liability to any Participant or Additional Unit
Participant in these regards.
(C) Separate Procurement. Upon (i) exercise by
any Separate Coal Stockpile Participant of a Separate
27
Procurement under Section 2(c)(iii) of the Operating
Agreement or (ii) violation by any Separate Coal
Stockpile Participant, which has been found by a vote
of a majority of the Pro Forma Ownership Interest in
Plant Scherer of the Common Procurement Participants
(excluding the Pro Forma Ownership Interest in Plant
Scherer of the Common Procurement Participant under
consideration), of any policy or rule for Common
Procurement Participants established from time to time
by the Plant Scherer Managing Board, such Separate Coal
Stockpile Participant shall immediately cease to be a
Common Procurement Participant, and GPC shall have no
obligation to procure coal or transportation on behalf
of such Separate Coal Stockpile Participant other than
for Spot Coal. The remaining Common Procurement
Participants owning in the aggregate more than 50% Pro
Forma Ownership Interest in Plant Scherer out of the
total Pro Forma Ownership Interest in Plant Scherer of
the then remaining Common Procurement Participants may
vote to reestablish such Separate Coal Stockpile
Participant's status as a Common Procurement
Participant. Otherwise, GPC shall have no obligation
to procure coal or transportation on behalf of any
Separate Coal Stockpile Participant which has ceased to
be a Common Procurement Participant, other than for
Spot Coal. A Separate Procurement Participant shall
28
have no right to receive or review any information
relating to any Common Procurement effort or any Offers
or contracts resulting from a Common Procurement effort
except as may otherwise be provided in subsection
(i)(E) of this Section 5(n) relating to Spot Coal.
(D) Review of Offers. Any Common Procurement
Participant that initiates a Common Procurement and any
Common Procurement Participant (other than GPC as
agent) that elects to review information relating to
any Offer shall pay that portion of the costs of the
Common Procurement resulting in such Offer in the
proportion that such Common Procurement Participant's
Pro Forma Ownership Interest in Plant Scherer bears to
the aggregate of the Pro Forma Ownership Interests in
Plant Scherer of the Common Procurement Participants
participating in such Common Procurement or reviewing
any information relating to any Offer, whether or not
such Common Procurement Participant elects to
participate in any such Offer and all other Common
Procurement Participants electing to participate in any
such Offer (which shall include the Common Coal
Stockpile Participants if GPC, as agent for the Common
Coal Stockpile, elects to participate in such Offer)
shall each pay a portion of such costs computed on the
same basis. Upon request, GPC shall inform a Separate
Coal Stockpile Participant which is a Common
29
Procurement Participant that did not initiate the
subject Common Procurement of the approximate cost to
review the information pertaining to the Offer. No
Participant or Additional Unit Participant shall use
any information furnished to it by or on behalf of GPC,
or any other Common Procurement Participant concerning
any such Offers in a manner to prejudice the efforts of
GPC and the other Common Procurement Participants in
any Common Procurement effort. As to any particular
information such prohibition shall terminate two years
following the date such information was received by
such Participant or Additional Unit Participant.
(E) Spot Coal Procurement. Notwithstanding the
foregoing provisions of this Section 5(n), the
provisions of Section 5(p) of this Agreement and the
provisions of Section 2(c) of the Operating Agreement,
GPC shall be the exclusive agent to act on behalf of
itself and all other Participants and Additional Unit
Participants for the procurement, transportation and
delivery of Spot Coal. All Offers to sell Spot Coal
shall be made available to GPC on its own behalf and on
behalf of the other then Common Coal Stockpile
Participants, and to each Separate Coal Stockpile
Participant (whether or not such Separate Coal
Stockpile Participant is then a Common Procurement
Participant) on the same basis that an Offer under a
30
Common Procurement is made available to the Common
Procurement Participants. GPC shall remain a Common
Procurement Participant (both as buyer and seller) so
long as there remains one or more other Common
Procurement Participants.
(ii) Each Participant and each Additional Unit
Participant shall have the right to make whatever financial
arrangements it may desire, whether by lease, security
transaction or otherwise, for the discharge of its fossil
fuel payment obligations so long as such arrangements do not
adversely affect the rights of the other Participants and
Additional Unit Participants.
(iii) Except as otherwise agreed by the Common Coal
Stockpile Participants or as otherwise provided in Sections
3(b) and 3(d) of the Operating Agreement, the Common Coal
Stockpile Participants shall pay Common Coal Stockpile Costs
and shall own coal in the Common Coal Stockpile in
proportion to their respective undivided ownership interests
in the Common Coal Stockpile.
(iv) Except as otherwise agreed to by the Participants
and Additional Unit Participants or as otherwise provided in
Section 3(b) and 3(d) of the Operating Agreement, each
Separate Coal Stockpile Participant shall pay all Separate
31
Coal Stockpile Costs which are properly and reasonably
allocable to such Separate Coal Stockpile Participant's
Separate Coal Stockpile, determined in accordance with GPC's
standard accounting practices, which shall comply with the
Uniform System of Accounts in effect from time to time
except as provided in subsection (viii) of Section 5(p)
hereof.
(v) Except as otherwise agreed to by the Participants
and Additional Unit Participants or as otherwise provided in
Section 3(b) and 3(d) of the Operating Agreement, the
Participants and Additional Unit Participants shall pay
Other Fuel Costs and shall own fossil fuel (other than coal
allocated to the Common Coal Stockpile and to the Separate
Coal Stockpiles) in proportion to their respective Pro Forma
Ownership Interest in Plant Scherer.
(vi)(A) If on or prior to 30 days following OPC's
receipt of approval of this Amendment from the Administrator
of the Rural Electrification Administration, any Participant
or Additional Unit Participant exercises its election to
become a Separate Coal Stockpile Participant, then within
six months following the date of the first election by a
Separate Coal Stockpile Participant, or (B) if earlier with
respect to Section 3(e)(viii) of the Unit Four Operating
Agreement GPC shall develop written procedures for Separate
32
Coal Procurement and Common Procurement and shall submit
such procedures to the Plant Scherer Managing Board which
shall adopt such procedures by vote of Participants and
Additional Unit Participants owning at least an aggregate
85% Pro Forma Ownership Interest in Plant Scherer within two
months of submission or which shall revise such procedures,
such revisions to be approved by Participants and Additional
Unit Participants owning at least an aggregate 85% Pro Forma
Ownership Interest in Plant Scherer. In the absence of such
adoption or approval of revisions within two months of
submission, the procedures submitted by GPC shall go into
effect as the procedures adopted by the Plant Scherer
Managing Board and may be revised thereafter only by
approval of such revisions by Participants and Additional
Unit Participants owning at least an aggregate 76% Pro Forma
Ownership Interest in Plant Scherer."
12. Amendment to Section 5(p) of the Ownership
Agreement.
Section 5(p) of the Ownership Agreement is hereby amended by
deleting such Section 5(p) in its entirety and by substituting,
in lieu thereof, the following:
33
"(p) Common Coal Stockpile and Separate Coal
Stockpiles.
(i) In order to provide for the ownership by the
Participants and the Additional Unit Participants of
interests in a Common Coal Stockpile and to provide for
the sharing among the Participants and Additional Unit
Participants of Common Coal Stockpile Costs, the
Participants agree that initially, all Participants and
all Additional Unit Participants shall participate in
the Common Coal Stockpile.
GPC shall cause an adjustment to be made to the
account of each Common Coal Stockpile Participant (A)
so that the quantity of coal in the Common Coal
Stockpile shall thereafter be allocated to the Common
Coal Stockpile Participants according to such Common
Coal Stockpile Participant's percentage undivided
ownership interest in the Common Coal Stockpile as set
forth in the following sentence, and (B) so that the
average cost per ton or, following a division of the
Plant Scherer Coal Stockpile into the Common Coal
Stockpile and one or more Separate Coal Stockpiles
pursuant to Section 5(p)(iii) of this Agreement, the
average cost per British Thermal Unit ("Btu") of the
coal in the Common Coal Stockpile is the same for each
Common Coal Stockpile Participant, with appropriate
charges and credits to be made to the accounts of such
34
Common Coal Stockpile Participants, all in accordance
with GPC's standard accounting practices which shall
comply with the Uniform System of Accounts in effect
from time to time except as provided in subsection
(viii) of Section 5(p) hereof. Following each such
allocation, each Common Coal Stockpile Participant
shall own a percentage undivided ownership interest in
the Common Coal Stockpile in the proportion that such
Common Coal Stockpile Participant's Pro Forma Ownership
Interest in Plant Scherer bears to the aggregate of all
Common Coal Stockpile Participants' Pro Forma Ownership
Interest in Plant Scherer.
(ii) All Common Coal Stockpile Costs incurred in
connection with the Common Coal Stockpile shall be
allocated among the Common Coal Stockpile Participants
at the time such Common Coal Stockpile Costs are
incurred in the same respective percentages of each
Common Coal Stockpile Participant's undivided ownership
interest from time to time in the Common Coal Stockpile
at that particular time and, subject to the provisions
of Sections 3(b) and 3(d) of the Operating Agreement,
the Common Coal Stockpile Costs shall be paid as
provided in Sections 5(f) and 5(n) of this Agreement;
provided, however, that at the end of each calendar
month, GPC shall cause an adjustment to be made among
the Common Coal Stockpile Participants in accordance
35
with the amount of coal (or, following a division of
the Plant Scherer Coal Stockpile into the Common Coal
Stockpile and one or more Separate Coal Stockpiles
pursuant to Section 5(p)(iii) of this Agreement, the
amount of Btus) actually consumed by each of the Common
Coal Stockpile Participant's undivided ownership
interest in each of the Units and each of the
Additional Units, all in accordance with GPC's standard
accounting practices which shall comply with the
Uniform System of Accounts in effect from time to time
except as provided in subsection (viii) of Section 5(p)
hereof.
All Other Fuel Costs incurred in connection with
the Units and the Additional Units shall be allocated
among the Participants and Additional Unit Participants
at the time such Other Fuel Costs are incurred in the
same respective percentages of each Participant's and
Additional Unit Participant's Pro Forma Ownership
Interest in Plant Scherer at that particular time, and
the Other Fuel Costs shall be paid as provided in
Sections 5(f) and 5(n) of this Agreement; provided,
however, that at the end of each calendar month, GPC
shall cause an adjustment to be made among the
Participants and Additional Unit Participants in
accordance with the amount of fuel (other than coal)
actually consumed by each of the Participants and
36
Additional Unit Participants all in accordance with
GPC's standard accounting practices which shall comply
with the Uniform System of Accounts in effect from time
to time except as provided in subsection (viii) of
Section 5(p) hereof.
(iii) Each Participant (other than GPC) and each
Additional Unit Participant (other than GPC) may elect
to discontinue participation in the Common Coal
Stockpile by delivery of written notice to GPC of such
election not later than 30 days following OPC's receipt
of approval of this Amendment from the Administrator of
the Rural Electrification Administration. Within six
months following the date of the first election by a
Separate Coal Stockpile Participant, GPC, as agent for
the other Participants and other Additional Unit
Participants, shall cause an adjustment to be made to
the Common Coal Stockpile and to the account of each
Separate Coal Stockpile Participant so that (A) the
quantity of coal allocated to the Common Coal Stockpile
will equal the percentage undivided ownership interests
of the remaining Common Coal Stockpile Participants and
so that the quantity of coal allocated to each Separate
Coal Stockpile Participant's account will equal its
percentage undivided ownership interest in the Common
Coal Stockpile at the time such adjustment is made, and
(B) the average cost per ton and average cost per Btu
37
for the Common Coal Stockpile and for each Separate
Coal Stockpile are the same. GPC shall notify each of
the Participants and Additional Unit Participants
immediately after such an adjustment has been made of
(l) the quantity of coal in the Common Coal Stockpile
and in each Separate Coal Stockpile and (2) the average
cost per ton and average cost per Btu for the Common
Coal Stockpile and for each Separate Coal Stockpile.
Thereafter, each Separate Coal Stockpile Participant
shall be entitled only to use coal available in its
Separate Coal Stockpile account for the operation of
its undivided ownership interests in the Units and the
Additional Units, and the remaining Common Coal
Stockpile Participants shall be entitled to use only
coal available in the account of the Common Coal
Stockpile for the operation of their undivided
ownership interests in the Units and the Additional
Units. Except as otherwise provided in subsection (ii)
of this Section 5(p), no Participant or Additional Unit
Participant shall be required to sell or otherwise
supply coal to any other Participant or Additional Unit
Participant; however, GPC, on its own behalf and as
agent for the other Common Coal Stockpile Participants,
and each Separate Coal Stockpile Participant may buy,
sell, trade or otherwise supply coal in the Plant
Scherer Coal Stockpile from their respective accounts
38
to one another upon such terms as they may agree and
upon prior written notice to GPC; provided, however,
that all offers to sell coal by a Common Procurement
Participant must be offered to all of the Common
Procurement Participants on the same basis as an Offer
under a Common Procurement. There shall be allocated
to each Separate Coal Stockpile Participant's account a
portion of subsequent deliveries and associated costs
(including, without limitation, "buy-out" costs, if
any) from coal contracts identified in Exhibit I hereto
(the "Existing Contracts") existing on September 1,
1990 equal to such Separate Coal Stockpile
Participant's Pro Forma Ownership Interest in Plant
Scherer, and there shall be allocated to each Separate
Coal Stockpile Participant's account all coal procured
on behalf of such Separate Coal Stockpile Participant
by GPC pursuant to Section 5(n) of this Agreement or
procured by such Separate Coal Stockpile Participant
pursuant to Section 2(c)(iii) of the Operating
Agreement; provided, however, that there shall not be
added to any Separate Coal Stockpile Participant's
Account any additional quantities of coal from Existing
Contracts, over and above the deliveries called for
from the Existing Contracts, as a result of amendments
or modifications to the Existing Contracts after
September 1, 1990 without the approval of the Plant
39
Scherer Managing Board by vote of Participants and
Additional Unit Participants owning an aggregate of at
least 85% Pro Forma Ownership Interests in Plant
Scherer. GPC shall account for all coal allocated to
the account of each Separate Coal Stockpile Participant
and for coal consumed by such Separate Coal Stockpile
Participant's undivided ownership interests in the
Units and the Additional Units, all in accordance with
GPC's standard accounting practices which shall comply
with the Uniform System of Accounts in effect from time
to time except as provided in subsection (viii) of
Section 5(p) hereof. No Separate Coal Stockpile
Participant nor any purchaser of an undivided ownership
interest in the Units or the Additional Units from a
Separate Coal Stockpile Participant may elect to become
a Common Coal Stockpile Participant without the written
consent of a majority of the Pro Forma Ownership
Interest in Plant Scherer of the then remaining Common
Coal Stockpile Participants, including, without
limitation, GPC so long as GPC is a Participant or
Additional Unit Participant.
(iv) Except as otherwise provided in subsection
(vi) of this Section 5(p), unless otherwise agreed to
by Participants and Additional Unit Participants owning
in the aggregate at least an 85% Pro Forma Ownership
Interest in Plant Scherer, the Participants recognize
40
and agree, as among themselves and for the benefit of
the Additional Unit Participants, that the division of
the Common Coal Stockpile and each Separate Coal
Stockpile is for the purposes only of accounting,
payment and settlement of costs and entitlement to use;
that there will be no physical separation of coal at
Plant Scherer among the Common Coal Stockpile and the
Separate Coal Stockpiles and that the Common Coal
Stockpile and the Separate Coal Stockpiles will be
physically combined and commingled into one common coal
stockpile at Plant Scherer; and that existing coal and
future deliveries of coal at Plant Scherer allocated
among the Common Coal Stockpile and the Separate Coal
Stockpiles will all be physically commingled and may be
used for the operation of the undivided ownership
interests of any Participant or Additional Unit
Participant so long as the account of such Participant
or Additional Unit Participant demonstrates that there
is sufficient coal credited to its account for such
operation. Nothing in this Agreement or the Operating
Agreement shall preclude Participants and Additional
Unit Participants owning in the aggregate at least an
85% Pro Forma Ownership Interest in Plant Scherer from
agreeing, upon such terms and conditions as they may
agree to, to physically separate the Plant Scherer Coal
Stockpile.
41
(v) All discrepancies between the book inventory
and the physical inventory of the Plant Scherer Coal
Stockpile shall be charged or credited, as appropriate,
among the Common Coal Stockpile and the Separate Coal
Stockpiles and to the respective accounts of each
Participant and each Additional Unit Participant in
accordance with the amount of coal actually consumed by
the undivided ownership interests of each Participant
and each Additional Unit Participant during the
physical inventory period to which such discrepancy
relates, all as determined in accordance with GPC's
standard accounting practices which shall comply with
the Uniform System of Accounts in effect from time to
time except as provided in subsection (viii) of Section
5(p) hereof.
(vi) In the event GPC should be removed as agent
for the Participants with respect to the Units, the
Plant Scherer Common Facilities or both, the Additional
Unit Participants shall have the right at any time
thereafter, by vote of whatever percentage such
Additional Unit Participants may agree to, not to
utilize the Plant Scherer Coal Stockpile, the Common
Coal Stockpile, or both, and, in such event, none of
the other provisions contained in this Section 5(p)
shall thereafter apply to the Additional Units or the
Additional Unit Participants; provided, however, that
42
the Additional Unit Participants shall not be released
from paying Common Coal Stockpile Costs and Separate
Coal Stockpile Costs for which such Additional Unit
Participants are otherwise obligated under this Section
5(p).
(vii) GPC and each of the other Common Coal
Stockpile Participants or any purchaser of an undivided
ownership interest in the Units or the Additional Units
may enter into whatever other arrangements GPC and such
other Common Coal Stockpile Participant (or purchaser)
may agree to with respect to such Common Coal Stockpile
Participant's (or purchaser's) ownership interest in
the Common Coal Stockpile, including, without
limitation, the creation of further Separate Coal
Stockpiles without requiring the consent of any other
Participant or Additional Unit Participant, so long as
such arrangement provides for Common Coal Stockpile
Costs to be paid as contemplated by this Agreement.
(viii)(A) If on or prior to 30 days following
OPC's receipt of approval of this Amendment from the
Administrator of the Rural Electrification
Administration, any Participant or Additional Unit
Participant exercises its election to become a Separate
Coal Stockpile Participant, then within six months
following the date of the first election by a Separate
Coal Stockpile Participant, or (B) if earlier with
43
respect to Section 6(i)(viii) of the Unit Four
Ownership Agreement, GPC shall develop written
procedures for Separate Coal Stockpile accounting and
Common Coal Stockpile accounting and shall submit such
procedures to the Plant Scherer Managing Board which
shall adopt such procedures by vote of Participants and
Additional Unit Participants owning at least an
aggregate 85% Pro Forma Ownership Interest in Plant
Scherer within two months of submission or which shall
revise such procedures, such revisions to be approved
by Participants and Additional Unit Participants owning
at least an aggregate 85% Pro Forma Ownership Interest
in Plant Scherer. In the absence of such adoption or
approval of revisions within two months of submission,
the procedures submitted by GPC shall go into effect as
the procedures adopted by the Plant Scherer Managing
Board and may be revised thereafter only by approval of
such revisions by Participants and Additional Unit
Participants owning at least an aggregate 76% Pro Forma
Ownership Interest in Plant Scherer."
13. Amendment to Section 6(g) of the Ownership
Agreement. The first sentence of the second paragraph of Section
6(g) of the Ownership Agreement is hereby amended to delete the
words "and Fuel Costs" and to substitute the words "Common Coal
44
Stockpile Costs, Separate Coal Stockpile Costs, and Other Fuel
Costs" therefor.
14. Amendment to Section 9 of the Ownership Agreement.
(a) The second sentence of Section 9(u) of the
Ownership Agreement is hereby amended to delete the words "Fuel
Costs" and to substitute "Common Coal Stockpile Costs, additional
Separate Coal Stockpile Costs, additional Other Fuel Costs"
therefor.
(b) Section 9 of the Ownership Agreement is hereby
amended by adding the following new subsection (x) to the end of
such Section 9 as follows:
"(x) Lessor in Possession. In the event that
there occurs a Lessor Possession Date, the Owner Trustee, or
any successor to the Owner Trustee's interest in Scherer
Unit No. 2, shall become immediately and automatically a
Common Coal Stockpile Participant, a Common Dispatch
Participant and a Common Procurement Participant for all
purposes under this Agreement and under the Operating
Agreement. The parties hereto acknowledge that Section 3.1
of the Co-Owners' Consents requires the Owner Trustee to
purchase from OPC, and OPC to sell to Owner Trustee, within
120 days after the Lessor Possession Date an amount of coal
with a million Btu value equal to X (the "Owner Trustee's
Coal Supply"). The amount of coal to be purchased and sold
45
as the Owner Trustee's Coal Supply will be determined by the
formula, X = (OT/Y) x Z where:
"OT" is equal to the Owner Trustee's Pro Forma
Ownership Interest in Plant Scherer;
"Y" is equal to the aggregate of the Pro Forma
Ownership Interests in Plant Scherer of the then Common
Coal Stockpile Participants other than the Owner
Trustee (and for this purpose, if there are no Common
Coal Stockpile Participants at such time, Y shall be
equal to GPC's Pro Forma Ownership Interest in Plant
Scherer); and
"Z" is equal to the total number of million Btu's in
the Common Coal Stockpile (and for this purpose, if
there is no Common Coal Stockpile at such time, Z shall
be equal to the number of million Btus in GPC's
Separate Coal Stockpile);
provided, however, if the result of the foregoing
calculation would be X = 0, then the Owner Trustee's Coal
Supply shall be (and X shall be) equal to the Million Btus
in OPC's Separate Coal Stockpile at such time multiplied by
a fraction the numerator of which shall be the Owner
Trustee's percentage undivided ownership interest in Unit
No. 2, and the denominator of which shall be OPC's aggregate
46
percentage undivided leasehold and ownership interest in
each of Unit No. 1, Unit No. 2, Unit No. 3 and Unit No. 4
immediately prior to the Lessor Possession Date. If upon a
Lessor Possession Date, OPC's coal supply attributable to
its interest in Scherer Unit No. 2 is in a Separate Coal
Stockpile, the Owner Trustee's Coal Supply shall be
calculated as of such Lessor Possession Date and shall
immediately and automatically be added to and become a part
of the Common Coal Stockpile and shall be accounted for as
having been contributed at the then average price per
Million Btu of the Common Coal Stockpile. If upon such
Lessor Possession Date there are no other Common Coal
Stockpile Participants with respect to Scherer Unit No. 2,
GPC's coal supply attributable to its interest in Scherer
Unit No. 2 shall immediately and automatically be added to
and become a part of the Common Coal Stockpile. From and
after such Lessor Possession Date, the Owner Trustee shall
be a Participant and shall be entitled and subject to the
rights and obligations thereof, and the Owner Trustee (and
GPC as agent for the Owner Trustee) shall be entitled to use
such coal contributed to the Common Coal Stockpile for the
benefit of the Owner Trustee even though the purchase and
sale of such coal has not been consummated, and from and
after such Lessor Possession Date, the Owner Trustee (and
its successors and assigns) shall pay its proportionate
share of Common Coal Stockpile Costs and Other Fuel Costs.
47
Notwithstanding the foregoing provisions of this Section
9(x), if at such Lessor Possession Date either (i) GPC is no
longer a Participant or an Additional Unit Participant, or (ii)
GPC has been removed as agent for the Units, and the Additional
Unit Participants have discontinued using the Plant Scherer Coal
Stockpile; and there is no longer a Common Coal Stockpile for the
Units, then the Owner Trustee shall be a Separate Coal Stockpile
Participant, the Owner Trustee's Coal Supply shall be equal to
OPC's Separate Coal Stockpile as of such Lessor Possession Date
multiplied by a fraction, the numerator of which shall be the
Owner Trustee's percentage undivided ownership interest in Unit
No. 2, and the denominator of which shall be OPC's aggregate
percentage undivided leasehold and ownership interest in each of
Unit No. 1, Unit No. 2, Unit No. 3 and Unit No. 4 immediately
prior to the Lessor Possession Date, and the Owner Trustee shall
pay its proportionate share of Separate Coal Stockpile Costs and
Other Fuel Costs. OPC hereby agrees to indemnify and hold
harmless the other Participants and the Additional Unit
Participants (including, without limitation, GPC, as agent,
whether it then is or is not a Participant or an Additional Unit
Participant) from and against any and all loss, cost, expense or
damage (including, without limitation, attorneys' fees and
expenses, Cost of Construction, Operating Costs, Separate Coal
Stockpile Costs, Common Coal Stockpile Costs or Other Fuel Costs)
resulting directly or indirectly from the operation of this
subsection, such Lessor's assumption of possession, or both."
48
15. Amendment to Section 10(a) of the Ownership
Agreement. Section 10(a) of the Ownership Agreement is hereby
amended to delete the last sentence of such Section 10(a).
16. Effectiveness of this Amendment. Neither this
Amendment nor any of the obligations of the parties hereto shall
be effective until the receipt of all requisite approvals,
including, without limitation, the approval of the Securities and
Exchange Commission under the Public Utility Holding Company Act
of 1935, the written approval of the Administrator of the Rural
Electrification Administration and the approval of all other
persons and entities having a right to approve or consent to an
amendment to the Ownership Agreement, but upon receipt of such
approvals this Amendment and the obligations of the parties
hereto shall be effective. The parties hereto agree to use their
respective best efforts to expeditiously obtain all such
requisite approvals.
17. Miscellaneous. Any and all notices, requests,
certificates and other instruments executed and delivered after
the execution and delivery of this Amendment may refer to the
Ownership Agreement without making specific reference to this
Amendment, but nevertheless all such references shall be deemed
to include this Amendment unless the context shall otherwise
require.
49
This Amendment shall be construed in connection with and as
a part of the Ownership Agreement, and all terms, conditions and
covenants contained in the Ownership Agreement, except as herein
modified, shall be and remain in full force and effect, and the
parties hereto agree that they are bound by the terms and
conditions of the Ownership Agreement as amended hereby.
This Amendment may be executed in any number of
counterparts, each executed counterpart constituting an original
but altogether one and the same instrument.
[This space intentionally left blank.]
50
IN WITNESS WHEREOF, the undersigned Parties hereto have duly
executed this Amendment under seal as of the date first above
written.
Signed, sealed and delivered GEORGIA POWER COMPANY
in the presence of:
______________________________ By: __________________________
______________________________ Name:_________________________
Notary Public Title:________________________
Attest: ______________________
Name:_________________________
Title:________________________
(CORPORATE SEAL)
Signed, sealed and delivered OGLETHORPE POWER CORPORATION
in the presence of: (AN ELECTRIC MEMBERSHIP
GENERATION & TRANSMISSION
CORPORATION)
______________________________ By: __________________________
______________________________ Name:_________________________
Notary Public Title:________________________
Attest: ______________________
Name:________________________
Title:_______________________
(CORPORATE SEAL)
[Signatures continued on next page]
51
[Signatures continued from previous page]
Signed, sealed and delivered MUNICIPAL ELECTRIC AUTHORITY
in the presence of: OF GEORGIA
______________________________ By: __________________________
______________________________ Name:_________________________
Notary Public Its: _________________________
Attest: ______________________
Name:_________________________
Its:__________________________
(OFFICIAL SEAL)
Signed, sealed and delivered CITY OF DALTON, GEORGIA
in the presence of:
______________________________ By: __________________________
______________________________ Name:_________________________
Notary Public Its:__________________________
Attest: ______________________
Name:_________________________
Its:__________________________
(OFFICIAL SEAL)
Signed, sealed and delivered BOARD OF WATER, LIGHT AND
in the presence of: SINKING FUND COMMISSIONERS
______________________________ By: __________________________
______________________________ Name:_________________________
Notary Public Its:__________________________
Attest: ______________________
Name:_________________________
Its:__________________________
(OFFICIAL SEAL)
52
EXHIBIT I
EXISTING CONTRACTS
The following is a listing of the coal purchase contracts in
existence on September 1, 1990.
1. That certain contract effective on March 31, 1977 among
Shell Mining Company, A.T. Massey Coal Company, Inc., Marrowbone
Development Company and Georgia Power Company as amended on
January 3, 1977, September 25, 1979, March 23, 1982, January 28,
1983, December 6, 1983, January 12, 1984, February 19, 1985,
September 9, 1985, December 11, 1985, December 18, 1985, March
10, 1987, April 16, 1987, October 30, 1987, November 10, 1987,
January 31, 1989, April 18, 1989, April 23, 1990, May 30, 1990,
and the undated "Agreement To Provide For the Extension Of
Negotiations Between GPC and Shell Mining Company."
2. That certain contract effective December 1, 1987 among Delta
Coals Equity Company, Inc., Humphreys Enterprises, Inc., Greater
Wise, Inc., Red River Coal Company, Inc., Pardee Coal Company,
Inc., Delta Coals, Inc., and Georgia Power Company as amended on
November 6, 1987 (Notice of Assignment), November 6, 1987 (Notice
of Designation of Agent), November 23, 1987 (Response to Notice
of Assignment), June 17, 1988, April 7, 1989, and July 24, 1990.
3. That certain contract effective July 1, 1989 between Mingo
Logan Coal Company and Georgia Power Company as amended on
August 21, 1990.
APPENDIX A
TO OWNERSHIP AGREEMENT
CAPITAL BUDGET
By August 15 of each calendar year, GPC shall use its
reasonable best efforts to provide to each Participant a written
budget estimate of capital costs anticipated to be incurred for
the five-year budget period for Scherer Unit No. 1 and Scherer
Unit No. 2. Each budget estimate shall be based on information
reasonably available. Also to be included in the capital budget
are any projects which may be charged to a Participant on the
basis of its ownership pursuant to the Ownership Agreement. This
budget estimate is to consist of project estimate sheets for each
project. For the five-year budget period, a summary of estimates
of capital expenditures and retirements will be provided, the
first year by month and the remaining four years by annual total.
The date for giving GPC written notice of approval or
disapproval of such capital budget estimate shall be September 15
and the date for submission by the Participants of alternative
capital budget estimates shall be October 15. All approvals,
disapprovals and submissions of alternative capital budgets shall
be by the percentages specified in Section 5(e) of the Ownership
Agreement.
Each budget estimate and final budget estimate shall be in a
format such that for the next calendar year each month's
estimated costs are listed by reference to the applicable Uniform
System of Accounts account number. In addition, each budget
estimate and final budget estimate shall be in a format showing
expected amounts that the Participant will be billed.
Section 5.1 and Appendix A of the Plant Scherer Managing
Board Agreement dated as of December 31, 1990, as amended from
time to time, shall govern and control any conflicting or
contrary provisions of the Ownership Agreement with regard to
capital budgets for the Plant Scherer Common Facilities.