Exhibit 10(a)58
PLANT MCINTOSH
COMBUSTION TURBINE
OPERATING AGREEMENT
between
GEORGIA POWER COMPANY
and
SAVANNAH ELECTRIC AND POWER COMPANY
Dated as of December 15, 1992
Plant McIntosh
Combustion Turbine
Operating Agreement
TABLE OF CONTENTS
Section
No. Page
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 1
(a) ADDITIONAL PLANT MCINTOSH CTS . . . . . . . . . . 1
(b) AFFILIATE . . . . . . . . . . . . . . . . . . . . 3
(c) AGENCY FUNCTIONS . . . . . . . . . . . . . . . . . 3
(d) AGENT . . . . . . . . . . . . . . . . . . . . . . 3
(e) ASSIGNMENT OF CT PURCHASE AGREEMENT . . . . . . . 3
(f) BUDGET . . . . . . . . . . . . . . . . . . . . . . 3
(g) BUSINESS DAY . . . . . . . . . . . . . . . . . . . 3
(h) CAPITAL ACCOUNT . . . . . . . . . . . . . . . . . 4
(i) CAPITAL BUDGET . . . . . . . . . . . . . . . . . . 4
(j) CLOSING . . . . . . . . . . . . . . . . . . . . . 4
(k) COMMERCIAL OPERATION . . . . . . . . . . . . . . . 4
(l) CONSTRUCTION ACCOUNT . . . . . . . . . . . . . . . 4
(m) CONSTRUCTION BUDGET . . . . . . . . . . . . . . . 5
(n) COST OF CONSTRUCTION . . . . . . . . . . . . . . . 5
(o) CT COMMON FACILITIES . . . . . . . . . . . . . . . 5
(p) CT COMMON FACILITIES SITE . . . . . . . . . . . . 6
(q) CT FUEL SUPPLY . . . . . . . . . . . . . . . . . . 6
(r) EXECUTION AND DELIVERY . . . . . . . . . . . . . . 6
(s) FERC . . . . . . . . . . . . . . . . . . . . . . . 6
(t) FORCE MAJEURE EVENT . . . . . . . . . . . . . . . 6
(u) FUEL COSTS . . . . . . . . . . . . . . . . . . . . 6
(v) FUEL OIL TANK . . . . . . . . . . . . . . . . . . 7
(w) FUEL PLAN . . . . . . . . . . . . . . . . . . . . 7
(x) GOVERNMENTAL AUTHORITY . . . . . . . . . . . . . . 7
(y) GPC PLANT MCINTOSH CTS . . . . . . . . . . . . . . 7
(z) GPC PLANT MCINTOSH CTS SITE . . . . . . . . . . . 7
(aa) GPSC . . . . . . . . . . . . . . . . . . . . . . . 7
(ab) INTERCOMPANY INTERCHANGE CONTRACT . . . . . . . . 8
(ac) LEGAL REQUIREMENTS . . . . . . . . . . . . . . . . 8
(ad) OPERATING ACCOUNT . . . . . . . . . . . . . . . . 8
(ae) OPERATING BUDGET . . . . . . . . . . . . . . . . . 8
(af) OPERATING COSTS . . . . . . . . . . . . . . . . . 8
(ag) OWNERSHIP AGREEMENT . . . . . . . . . . . . . . . 9
(ah) PARTICIPANTS . . . . . . . . . . . . . . . . . . . 9
(ai) PARTY . . . . . . . . . . . . . . . . . . . . . . 9
(aj) PLANT MCINTOSH . . . . . . . . . . . . . . . . . . 9
(ak) PLANT MCINTOSH CT NOS. 01 AND 02 . . . . . . . . . 9
(al) PLANT MCINTOSH CT NOS. 03 AND 04 . . . . . . . . . 9
(am) PLANT MCINTOSH CT NOS. 05 AND 06 . . . . . . . . . 9
(an) PLANT MCINTOSH CT NOS. 07 AND 08 . . . . . . . . . 9
(ao) PLANT MCINTOSH CT PROJECT . . . . . . . . . . . . 10
(ap) PLANT MCINTOSH CTS . . . . . . . . . . . . . . . . 10
(aq) 1994 PLANT MCINTOSH CTS . . . . . . . . . . . . . 10
(ar) 1995 PLANT MCINTOSH CTS . . . . . . . . . . . . . 10
(as) PLANT MCINTOSH SITE . . . . . . . . . . . . . . . 10
(at) PRIME RATE . . . . . . . . . . . . . . . . . . . . 10
(au) PRO FORMA OWNERSHIP INTEREST . . . . . . . . . . . 11
(av) PRUDENT UTILITY PRACTICE . . . . . . . . . . . . . 11
(aw) PURCHASE PRICE . . . . . . . . . . . . . . . . . . 11
(ax) SAVANNAH PLANT MCINTOSH CTS . . . . . . . . . . . 11
(ay) SAVANNAH PLANT MCINTOSH CTs SITE . . . . . . . . . 12
(az) SCSI . . . . . . . . . . . . . . . . . . . . . . . 12
(ba) SEC . . . . . . . . . . . . . . . . . . . . . . . 12
(bb) SITE REPRESENTATIVE . . . . . . . . . . . . . . . 12
(bc) THE SOUTHERN COMPANY . . . . . . . . . . . . . . . 12
(bd) UNIFORM SYSTEM OF ACCOUNTS . . . . . . . . . . . . 12
(be) VARIABLE OPERATING COSTS . . . . . . . . . . . . . 12
2. OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . 12
(a) AGENT . . . . . . . . . . . . . . . . . . . . . . 12
(b) COMMITTEES . . . . . . . . . . . . . . . . . . . . 13
(c) DEVELOPMENT OF BUDGETS, PLANS AND SCHEDULES . . . 13
(d) RECORD KEEPING . . . . . . . . . . . . . . . . . . 14
3. AUTHORITY AND RESPONSIBILITY FOR OPERATION . . . . . . . 15
(a) OPERATION . . . . . . . . . . . . . . . . . . . . 15
(b) OTHER CONTRACTS . . . . . . . . . . . . . . . . . 17
(c) FOSSIL FUEL . . . . . . . . . . . . . . . . . . . 17
4. INTENTIONALLY OMITTED . . . . . . . . . . . . . . . . . 18
5. OPERATION, RIGHTS AND OBLIGATIONS . . . . . . . . . . . 18
(a) AVAILABILITY OF OUTPUT . . . . . . . . . . . . . . 18
(b) SCHEDULING AND DISPATCHING . . . . . . . . . . . . 18
(c) FUEL PLAN . . . . . . . . . . . . . . . . . . . . 18
(d) MAINTENANCE SCHEDULE . . . . . . . . . . . . . . . 19
(e) BILLING AND ACCOUNTING . . . . . . . . . . . . . . 20
(f) METERING . . . . . . . . . . . . . . . . . . . . . 20
(g) SHARING OF COSTS - GENERAL . . . . . . . . . . . . 21
(h) PAYMENT AND SETTLEMENT OF OPERATING COSTS . . . . 22
(i) OPERATING ACCOUNT . . . . . . . . . . . . . . . . 23
(j) PAYMENT AND SETTLEMENT OF COST OF CONSTRUCTION . . 25
(k) CAPITAL ACCOUNT . . . . . . . . . . . . . . . . . 27
(l) NONPAYMENT . . . . . . . . . . . . . . . . . . . . 28
(m) INSURANCE . . . . . . . . . . . . . . . . . . . . 31
6. CERTAIN ADDITIONAL AGREEMENTS AMONG THE PARTICIPANTS . . 33
(a) NO ADVERSE DISTINCTION . . . . . . . . . . . . . . 33
(b) COOPERATION . . . . . . . . . . . . . . . . . . . 33
(c) LIABILITY, REMEDIES AND LIMITATIONS OF LIABILITY . 33
(d) INDEMNIFICATION . . . . . . . . . . . . . . . . . 35
(e) AVAILABILITY OF RECORDS . . . . . . . . . . . . . 35
(f) RIGHT TO COPIES . . . . . . . . . . . . . . . . . 36
(g) COMPLIANCE WITH LAWS AND ENVIRONMENTAL MATTERS . . 36
(h) SAFETY . . . . . . . . . . . . . . . . . . . . . . 37
(i) MANAGEMENT AND OPERATING AUDITS . . . . . . . . . 38
Section
No. Page
(j) ON-SITE OBSERVATION AND INSPECTION . . . . . . . . 38
(k) PLANT TOURS . . . . . . . . . . . . . . . . . . . 39
7. ASSIGNMENT AND TERMINATION. . . . . . . . . . . . . . . . 39
(a) LIMITATION ON ASSIGNABILITY . . . . . . . . . . . 39
(b) TERM . . . . . . . . . . . . . . . . . . . . . . . 39
8. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . 40
(a) GOVERNING LAW . . . . . . . . . . . . . . . . . . 40
(b) NO DELAY . . . . . . . . . . . . . . . . . . . . . 40
(c) NOTICE . . . . . . . . . . . . . . . . . . . . . . 40
(d) SECTION HEADINGS NOT TO AFFECT MEANING . . . . . . 41
(e) NO PARTNERSHIP . . . . . . . . . . . . . . . . . . 41
(f) AMENDMENTS . . . . . . . . . . . . . . . . . . . . 41
(g) SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . 41
(h) COUNTERPARTS . . . . . . . . . . . . . . . . . . . 41
(i) TIME IS OF THE ESSENCE . . . . . . . . . . . . . . 41
(j) FURTHER ASSURANCES . . . . . . . . . . . . . . . . 41
(k) COMPUTATION OF PERCENTAGE UNDIVIDED OWNERSHIP
INTEREST . . . . . . . . . . . . . . . . . . . . 41
(l) SUCCESSOR AGENT . . . . . . . . . . . . . . . . . 42
(m) SEVERAL AGREEMENTS . . . . . . . . . . . . . . . . 42
(n) SPECIAL PROVISIONS RELATING TO THE CT COMMON
FACILITIES . . . . . . . . . . . . . . . . . . . 42
(o) CONSTRUCTION OF "INCLUDING" . . . . . . . . . . . 43
(p) EQUAL EMPLOYMENT OPPORTUNITY AND CIVIL RIGHTS . . 43
(q) THE PLANT MCINTOSH CT UNITS . . . . . . . . . . . 43
THIS PLANT MCINTOSH COMBUSTION TURBINE OPERATING AGREEMENT
("Agreement"), dated as of December 15, 1992, is between GEORGIA
POWER COMPANY, a corporation organized and existing under the
laws of the State of Georgia ("GPC") and SAVANNAH ELECTRIC AND
POWER COMPANY, a corporation organized and existing under the
laws of the State of Georgia ("Savannah").
W I T N E S S E T H:
A. GPC and Savannah have heretofore entered into that
certain Plant McIntosh Combustion Turbine Purchase and Ownership
Participation Agreement dated as of the date hereof providing for
the ownership by them of their respective undivided ownership
interests in the Plant McIntosh CT Project.
B. As set forth in the Ownership Agreement, Savannah and GPC
are to have undivided ownership interests and are to share the
costs of the Plant McIntosh CTs, the CT Common Facilities, and
the CT Fuel Supply as provided for in the Ownership Agreement and
this Agreement. By this Agreement, the Participants intend to
provide for the management, control, operation, maintenance,
renewal, addition, replacement, modification and disposal of the
Plant McIntosh CTs, the CT Common Facilities and the CT Fuel
Supply in all respects not covered by the Ownership Agreement and
for the entitlement and use of capacity and energy from the Plant
McIntosh CT Project and the sharing of the costs thereof by the
Participants in accordance with their respective undivided
ownership interests.
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, GPC and Savannah hereby agree as
follows:
1. DEFINITIONS.
In addition to the terms defined elsewhere in this Agreement,
the following terms have the meanings indicated which meanings
shall be equally applicable to both singular and plural forms of
such terms except as otherwise expressly provided:
(a) ADDITIONAL PLANT MCINTOSH CTS. The "Additional Plant
McIntosh CTs" shall consist of:
(i) That certain real property upon which may be
constructed and located one or more of eight (8) complete
combustion turbine-generator units to be known as the
Additional Plant McIntosh CTs, the exact legal description for
which land shall be determined upon completion of such
construction, and which shall comprise a parcel of land
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approximately 800 feet by 300 feet, and which parcel is
approximately shown as crosshatched and labeled as the
"Additional CTs Parcel" on Exhibit A9-16 hereof and
incorporated herein (which parcel shall be reduced, as
necessary, to suit the actual number of individual Additional
Plant McIntosh CTs constructed), together with all such
additional land, appurtenant easements or other rights therein
as may hereafter be acquired for the purposes specified in
subsection (iii) of this Section 1(a). GPC and Savannah agree
that the exact legal description for the aforedescribed parcel
of land shall be substituted for Exhibit A9-16 hereof upon
completion of the survey of such parcel of land and the
approval of such survey by GPC, and such legal description
shall become a part hereof automatically upon such
substitution;
(ii) All personal property comprising the combustion
turbine-generator units to be known as the Additional Plant
McIntosh CTs, including, without limitation, eight complete
combustion turbine-generator units, the enclosures housing the
same and the main step-up transformers which are to be used
solely in connection with the Additional Plant McIntosh CTs,
all as the foregoing list of personal property may be modified
or supplemented at the closing;
(iii) Such additional land, easements or other rights
therein as may be acquired, and such additional facilities and
other tangible property as may be acquired, constructed,
installed or replaced solely in connection with the Additional
Plant McIntosh CTs or any one or more of them; provided that
(A) the cost of such additional land, easements or other
rights therein or of such additional facilities or other
tangible property shall be properly recordable in accordance
with the Uniform System of Accounts, (B) such additional land,
easements or other rights therein or such additional
facilities or other tangible property shall have been
acquired, constructed, installed or replaced for the use of
the Participants having an ownership interest in the personal
property comprising the Additional Plant McIntosh CTs under
and subject to the provisions of this Agreement, and (C) the
acquisition of such additional land, easements or other rights
therein or the acquisition, construction, installation or
replacement of such additional facilities or other tangible
property shall (1) be necessary in order to keep the
Additional Plant McIntosh CTs (or any one or more of them) in
good operating condition or to satisfy the requirements of any
Governmental Authority having jurisdiction over the Additional
Plant McIntosh CTs, or (2) be agreed to by the Participants
having an ownership interest in the personal property
comprising the Additional Plant McIntosh CTs; and
(iv) Existing intangible property rights, and such
additional intangible property rights as may be hereafter
acquired, associated with the planning, licensing, design,
construction, acquisition, completion, testing, startup,
management, control, operation, maintenance, renewal,
addition, replacement, modification and disposal of any of the
items in this Section 1(a).
(b) AFFILIATE. An "Affiliate" of a Participant shall mean
any corporation, partnership (limited or general) or other person
or entity controlling, under common control with, or controlled
by such Participant.
(c) AGENCY FUNCTIONS. The "Agency Functions" shall mean
those activities which the Agent shall undertake on behalf of the
Participants which relate to the planning, design, licensing,
procurement, acquisition (other than acquisition by GPC of a
leasehold interest in the GPC Plant McIntosh CTs Site and the CT
Common Facilities Site and of an undivided ownership interest in
certain of the CT Common Facilities equipment pursuant to the
Ownership Agreement), construction, completion, testing, startup,
management, control, operation, maintenance, renewal, addition,
replacement, modification and disposal of the Plant McIntosh CTs,
the CT Common Facilities and the CT Fuel Supply, as the case may
be, under this Agreement and the Ownership Agreement.
(d) AGENT. "Agent" shall mean Savannah or its successors
with respect to its rights and obligations in the performance of
the Agency Functions on behalf of the Participants with respect
to the Plant McIntosh CTs, the CT Common Facilities and the CT
Fuel Supply. The term "Agent" shall also mean and refer to
Savannah (or its successor as Agent) acting on its own behalf
with respect to the Savannah Plant McIntosh CTs, the CT Common
Facilities and the CT Fuel Supply for so long as Savannah (or its
successor as Agent) owns an undivided ownership interest in the
Plant McIntosh CTs, the CT Common Facilities, and the CT Fuel
Supply, respectively.
(e) ASSIGNMENT OF CT PURCHASE AGREEMENT. The "Assignment of
CT Purchase Agreement" shall refer to that certain Assignment of
Contract between SCSI and Savannah dated April 22, 1992 under
which SCSI assigned to Savannah that certain Agreement for the
Purchase and Sale of Combustion Turbine Generators and
Auxiliaries between ABB Energy Services, Inc. and SCSI, dated as
of January 31, 1991, as amended by that certain Amendment Number
One, dated as of April 22, 1992.
(f) BUDGET. A "Budget" shall mean any Capital Budget or
Operating Budget.
(g) BUSINESS DAY. A "Business Day" shall be any Monday,
Tuesday, Wednesday, Thursday or Friday other than a day which has
been established by law or required by executive order as a
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holiday for any commercial banking institution in the State of
Georgia.
(h) CAPITAL ACCOUNT. The "Capital Account" shall refer to
the separate, interest bearing account or accounts, in a bank or
banks, the deposits in which are insured, subject to applicable
limits, by the Federal Deposit Insurance Corporation and which
meets or meet all applicable requirements imposed upon
depositories of Savannah, established by Savannah as Agent,
pursuant to the terms of this Agreement, for the payment of
additional Cost of Construction and Fuel Costs.
(i) CAPITAL BUDGET. The "Capital Budget" shall refer to the
Budgets pertaining to additional Cost of Construction and Fuel
Costs for that portion of the Plant McIntosh CT Project which has
achieved Commercial Operation to be delivered to the Participants
pursuant to the terms of Section 2(c), DEVELOPMENT OF BUDGETS,
PLANS AND SCHEDULES, of this Agreement.
(j) CLOSING. The "Closing" shall have the meaning assigned
in Section 3(c), CLOSING, of the Ownership Agreement.
(k) COMMERCIAL OPERATION. "Commercial Operation" shall
refer to the date or dates when any of the Plant McIntosh CTs are
completed and declared fully operable by Savannah, as Agent for
the Participants with respect to construction; provided, however,
that none of the Additional Plant McIntosh CTs shall be included
in the Plant McIntosh CTs until such time as one or more
Participants provide written notice to the other Participants
that they are planning to construct one or more of the Additional
Plant McIntosh CTs, as the case may be, in order to serve such
Participants' energy needs. It is the intent of the Parties that
Plant McIntosh CT Nos. 07 and 08 achieve Commercial Operation on
January 24, 1994 (unit No. 08) and February 28, 1994 (unit No.
07), that Plant McIntosh CT Nos. 05 and 06 achieve Commercial
Operation on March 9, 1994 (unit No. 06) and April 7, 1994 (unit
No. 05), that Plant McIntosh CT Nos. 03 and 04 achieve Commercial
Operation on May 5, 1994 (unit No. 04) and June 3, 1994 (unit No.
03), and that Plant McIntosh CT Nos. 01 and 02 achieve Commercial
Operation on April 13, 1995 (unit No. 02) and May 26, 1995 (unit
No. 01).
(l) CONSTRUCTION ACCOUNT. The "Construction Account" shall
refer to the separate, interest bearing account or accounts, in a
bank or banks, the deposits in which are insured, subject to
applicable limits, by the Federal Deposit Insurance Corporation
and which meets or meet all applicable requirements imposed upon
depositories of Savannah, established by Savannah as Agent,
pursuant to the terms of the Ownership Agreement, for the payment
of Cost of Construction.
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(m) CONSTRUCTION BUDGET. The "Construction Budget" shall
refer to the budgets pertaining to the Cost of Construction to be
delivered to the Participants pursuant to the terms of
Section 6(j), CONSTRUCTION BUDGETS AND SCHEDULES, of the
Ownership Agreement.
(n) COST OF CONSTRUCTION. The "Cost of Construction" shall
refer to all costs incurred by Savannah, as Agent, for the
Participants in connection with the planning, design, licensing,
procurement, acquisition, construction, completion, testing,
startup, renewal, addition, modification, replacement or disposal
of the Plant McIntosh CTs and the CT Common Facilities, or any
portion thereof, including, without limitation, that portion of
administrative and general expenses incurred by Savannah, as
Agent, which is properly and reasonably allocable to the Plant
McIntosh CTs and the CT Common Facilities and for which Savannah
has not been otherwise reimbursed by the Participants, which
costs are properly recordable in accordance with the Electric
Plant Instructions and in appropriate accounts as set forth in
the Uniform System of Accounts, and shall also include all costs
incurred by Savannah, as Agent for the Participants in connection
with the purchase and acquisition of (i) the initial supply of
fuel for the Plant McIntosh CTs to the extent such fuel is
consumed by any of the Plant McIntosh CTs prior to the respective
dates of Commercial Operation of such Plant McIntosh CTs,
including, without limitation, that portion of administrative and
general expenses incurred by Savannah, as Agent, which is
properly and reasonably allocable to such acquisition of fuel for
the Plant McIntosh CTs and for which Savannah has not been
otherwise reimbursed by the Participants, and (ii) the initial
supply of spare parts, and any replacements for such spare parts
utilized during pre-Commercial Operation construction activities,
for the Plant McIntosh CTs and the CT Common Facilities,
including, without limitation, that portion of administrative and
general expenses incurred by Savannah, as Agent, which is
properly and reasonably allocable to such acquisition of spare
parts and for which Savannah has not been otherwise reimbursed by
the Participants; provided, however, that Cost of Construction
shall not include (i) costs incurred by Savannah in connection
with the draining and cleaning (except sand-blasting) of the
existing Fuel Oil Tank as preparatory to its becoming part of the
CT Common Facilities, (ii) interest cost attributable to the
carrying of any Participant's respective investment in the Plant
McIntosh CTs or the CT Common Facilities, or (iii) costs and
expenses incurred by any Participant in connection with the
development of this Agreement, the Ownership Agreement or the
Assignment of CT Purchase Agreement.
(o) CT COMMON FACILITIES. The "CT Common Facilities" shall
have the meaning assigned in Section 1(p), CT COMMON FACILITIES,
of the Ownership Agreement.
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(p) CT COMMON FACILITIES SITE. The "CT Common Facilities
Site" shall refer to so much of the CT Common Facilities as
constitutes real property.
(q) CT FUEL SUPPLY. The "CT Fuel Supply" shall mean the
fossil fuel supply of oil maintained in the fuel oil storage tank
or of natural gas provided by pipeline, as the case may be, for
the Plant McIntosh CTs pursuant to Section 3(c), FOSSIL FUEL,
hereof.
(r) EXECUTION AND DELIVERY. The "Execution and Delivery"
shall have the meaning assigned in Section 4(c), EXECUTION AND
DELIVERY, of the Ownership Agreement.
(s) FERC. The "FERC" shall mean the Federal Energy
Regulatory Commission or any entity succeeding to the powers and
functions thereof.
(t) FORCE MAJEURE EVENT. A "Force Majeure Event" shall
refer to any event which occurs due to no fault of the Party
asserting the occurrence of such event, and which is beyond the
reasonable control of such Party, including, but not limited to:
strike or other labor difficulty or dispute; lockout; act of God;
change in Legal Requirements; absence as of any particular time
of precise engineering and scientific knowledge generally
available to fashion a method for compliance with Legal
Requirements or absence as of any particular time of appropriate
technology generally available which may be required for
compliance with Legal Requirements; act or omission of any
Governmental Authority; act or omission of any third party other
than the Party asserting a Force Majeure Event; act of a public
enemy; expropriation or confiscation of facilities; riot;
rebellion; sabotage; embargo; blockade; quarantine; restriction;
epidemic; accident; wreck or delay in transportation;
unavailability or shortage of fuel, power, material or labor;
equipment failure; declared or undeclared war; or damage
resulting from wind, lightning, fire, flood, earthquake,
explosion or other physical disaster; provided, however, that no
Party shall be required by the foregoing provisions to settle a
strike, lockout or other labor difficulty or dispute except when,
according to its own best judgment, such a settlement seems
advisable.
(u) FUEL COSTS. The "Fuel Costs" shall mean all costs
incurred by the Agent for the Participants that are allocable to
the acquisition, processing, transportation, delivering,
handling, storage, accounting, analysis, measurement and disposal
of fuel for the CT Fuel Supply, 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
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expenses which is properly and reasonably allocable to
acquisition and management of fuel for the CT Fuel Supply and for
which the Agent has not been otherwise reimbursed by the
Participants; provided, however, that Fuel Costs shall not
include any costs allocable to the purchase and acquisition of
the initial supply of fuel oil for the Plant McIntosh CT Project
to the extent such fuel is consumed by any of the Plant McIntosh
CTs prior to the respective dates of Commercial Operation of such
Plant McIntosh CTs.
(v) FUEL OIL TANK. The "Fuel Oil Tank" shall refer to the
existing nine million gallon fuel oil storage tank, wholly owned
by Savannah prior to the Closing, a percentage undivided
ownership interest in which will be conveyed to GPC at the
Closing, and which shall be used to store water for the Plant
McIntosh CTs.
(w) FUEL PLAN. The "Fuel Plan" shall refer to the fuel
supply plan covering at least a five-year period that the Agent
shall prepare and submit annually to the Participants as set
forth in Section 5(c), FUEL PLAN, hereof.
(x) GOVERNMENTAL AUTHORITY. A "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 or
mortgagee.
(y) GPC PLANT MCINTOSH CTS. The "GPC Plant McIntosh CTs"
shall refer collectively to Plant McIntosh CT Nos. 01 and 02,
Plant McIntosh CT Nos. 03 and 04, Plant McIntosh CT Nos. 07 and
08, and one or more of the Additional Plant McIntosh CTs, any one
of which shall be a GPC Plant McIntosh CT; provided, however,
that none of the Additional Plant McIntosh CTs shall be included
in the GPC Plant McIntosh CTs until such time as GPC provides
written notice to Savannah that GPC is planning to construct one
or more Additional Plant McIntosh CTs, as the case may be, in
order to serve GPC's energy needs; and provided, further, that
the GPC Plant McIntosh CTs shall not include any GPC Plant
McIntosh CT which GPC decides shall not be constructed and which
is so identified in a written notice to Savannah.
(z) GPC PLANT MCINTOSH CTS SITE. The "GPC Plant McIntosh CTs
Site" shall refer to so much of the GPC Plant McIntosh CTs as
constitutes real property.
(aa) GPSC. The "GPSC" shall mean the Georgia Public Service
Commission or any governmental agency succeeding to the powers
and functions thereof.
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(ab) INTERCOMPANY INTERCHANGE CONTRACT. The "Intercompany
Interchange Contract" shall refer to that certain "Southern
Company System Intercompany Interchange Contract" entered into on
October 31, 1988 by and among Alabama Power Company, GPC, Gulf
Power Company, Mississippi Power Company, Savannah and SCSI, as
the same may be amended from time to time.
(ac) LEGAL REQUIREMENTS. "Legal Requirements" shall mean all
laws, codes, ordinances, orders, judgments, decrees, injunctions,
licenses, rules, permits, approvals, regulations and requirements
of every Governmental Authority having jurisdiction over the
matter in question, whether federal, state or local, which may be
applicable to Savannah, as Agent, or any Participant, as required
by the context in which used, or to the Plant McIntosh CT
Project, or to the use, manner of use, occupancy, possession,
planning, licensing, design, procurement, construction,
acquisition, testing, startup, operation, maintenance,
management, control, addition, renewal, modification, replacement
or disposal of the Plant McIntosh CT Project, or any portion or
portions thereof.
(ad) OPERATING ACCOUNT. The "Operating Account" shall refer
to the separate, interest bearing account or accounts, in a bank
or banks, the deposits in which are insured, subject to
applicable limits, by the Federal Deposit Insurance Corporation
and which meets or meet all applicable requirements imposed upon
depositories of Savannah, established by Savannah as Agent,
pursuant to the terms of this Agreement, for the payment of
Operating Costs.
(ae) OPERATING BUDGET. The "Operating Budget" shall refer to
the Budgets pertaining to Operating Costs to be delivered to the
Participants pursuant to the terms of Section 2(c), DEVELOPMENT
OF BUDGETS, PLANS AND SCHEDULES, of this Agreement.
(af) OPERATING COSTS. The "Operating Costs" shall mean all
costs and expenses (other than Cost of Construction and Fuel
Costs) incurred by Savannah, as Agent for the Participants in
respect of the management, control, operation or maintenance,
including, without limitation, scheduling and dispatching, of the
Plant McIntosh CTs or the CT Common Facilities, or both,
including, without limitation, that portion of administrative and
general expenses incurred by Savannah, as Agent, which is
properly and reasonably allocable to the Plant McIntosh CTs or
the CT Common Facilities, or both, and which costs and expenses
are properly recordable in accordance with the Operating Expense
Instructions and in appropriate accounts as set forth in the
Uniform System of Accounts and, to the extent practicable,
Operating Costs shall be properly allocated among each Plant
McIntosh CT and the CT Common Facilities; provided, however, that
there shall not be included as Operating Costs any costs
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attributable to Plant McIntosh exclusive of the Plant McIntosh CT
Project.
(ag) OWNERSHIP AGREEMENT. The "Ownership Agreement" shall
refer to that certain Plant McIntosh Combustion Turbine Purchase
and Ownership Participation Agreement, dated as of the date
hereof, between GPC and Savannah, as such agreement may be
amended from time to time.
(ah) PARTICIPANTS. "Participant" and "Participants" shall
refer individually or collectively, as the case may be, to GPC
and Savannah (in their capacities as owners of one or more of the
Plant McIntosh CTs) and to any permitted transferee or assignee
of either of them of an ownership or leasehold interest in the
Plant McIntosh CT Project pursuant to Section 6(c), ALIENATION
AND ASSIGNMENT, of the Ownership Agreement made in conformity
with those provisions of this Agreement and the Ownership
Agreement pertaining to the Plant McIntosh CTs, the CT Common
Facilities and the CT Fuel Supply, provided, however, such
references shall only refer to an entity for so long as said
entity has an ownership or an ownership and a leasehold interest
in the Plant McIntosh CT Project.
(ai) PARTY. A "Party" shall refer to any entity which is now
or hereafter a party to this Agreement; provided, however, such
reference shall only refer to an entity for so long as such
entity is a party to this Agreement.
(aj) PLANT MCINTOSH. "Plant McIntosh" shall consist of the
Plant McIntosh Site plus all improvements thereon including,
without limitation, the Plant McIntosh CT Project and that
certain Plant McIntosh 170 Mw coal-fired generating plant owned
by Savannah, together with its supporting facilities and
equipment.
(ak) PLANT MCINTOSH CT NOS. 01 AND 02. "Plant McIntosh CT
Nos. 01 and 02" shall have the meaning assigned in Section 1(an),
PLANT MCINTOSH CT NOS. 01 AND 02, of the Ownership Agreement.
(al) PLANT MCINTOSH CT NOS. 03 AND 04. "Plant McIntosh CT
Nos. 03 and 04" shall have the meaning assigned in Section 1(ao),
PLANT MCINTOSH CT NOS. 03 AND 04, of the Ownership Agreement.
(am) PLANT MCINTOSH CT NOS. 05 AND 06. "Plant McIntosh CT
Nos. 05 and 06" shall have the meaning assigned in Section 1(ap),
PLANT MCINTOSH CT NOS. 05 AND 06, of the Ownership Agreement.
(an) PLANT MCINTOSH CT NOS. 07 AND 08. "Plant McIntosh CT
Nos. 07 and 08" shall have the meaning assigned in Section 1(aq),
PLANT MCINTOSH CT NOS. 07 AND 08, of the Ownership Agreement.
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(ao) PLANT MCINTOSH CT PROJECT. The "Plant McIntosh CT
Project" shall refer to the Plant McIntosh CTs, the CT Common
Facilities and the CT Fuel Supply.
(ap) PLANT MCINTOSH CTS. The "Plant McIntosh CTs" shall
consist collectively of Plant McIntosh CT Nos. 01 and 02, Plant
McIntosh CT Nos. 03 and 04, Plant McIntosh CT Nos. 05 and 06,
Plant McIntosh CT Nos. 07 and 08, and any one or more of the
Additional Plant McIntosh CTs, any one of which shall be a Plant
McIntosh CT; provided, however, that none of the Additional Plant
McIntosh CTs shall be included in the Plant McIntosh CTs until
such time as one or more Participants provide written notice to
the other Participants that they are planning to construct one or
more of the Additional Plant McIntosh CTs, as the case may be, in
order to serve such Participants' energy needs; and provided,
further, that the Plant McIntosh CTs shall not include any Plant
McIntosh CT which the Participant owning such unit decides shall
not be constructed and which is so identified in a written notice
to the other Participant.
(aq) 1994 PLANT MCINTOSH CTS. The "1994 Plant McIntosh CTs"
shall refer to Plant McIntosh CT Nos. 07 and 08, Plant McIntosh
CT Nos. 05 and 06, and Plant McIntosh CT Nos. 03 and 04, any one
(of the six) of which shall be a 1994 Plant McIntosh CT;
provided, however, that the 1994 Plant McIntosh CTs shall not
include any 1994 Plant McIntosh CT which the Participant owning
such unit decides shall not be constructed and which is so
identified in a written notice to the other Participant.
(ar) 1995 PLANT MCINTOSH CTS. The "1995 Plant McIntosh CTs"
shall refer to Plant McIntosh CT Nos. 01 and 02, either one of
which shall be a 1995 Plant McIntosh CT; provided, however, that
the 1995 Plant McIntosh CTs shall not include any 1995 Plant
McIntosh CT which the Participant owning such unit decides shall
not be constructed and which is so identified in a written notice
to the other Participant.
(as) PLANT MCINTOSH SITE. The "Plant McIntosh Site" shall
refer to the real property which is described in Exhibit F
attached to the Ownership Agreement.
(at) PRIME RATE. The "Prime Rate" shall mean the per annum
rate of interest announced from time to time by Chemical Bank as
its prime rate, and with respect to any payment or reimbursement
to be made hereunder to which interest is to be added (other than
an adjustment to the Purchase Price), shall be determined as of
the date such payment or reimbursement is due, and with respect
to any adjustment to the Purchase Price as to which interest is
to be added pursuant to the terms hereof, shall be determined as
of the date of the Closing for which such adjustment is to be
made. The Prime Rate shall be calculated on the basis of a 365-
- 10 -
day year for the actual number of days that the payment,
reimbursement or purchase price adjustment, as the case may be,
has not been made.
(au) PRO FORMA OWNERSHIP INTEREST. A "Pro Forma Ownership
Interest" shall mean for each Participant the number of the Plant
McIntosh CTs (whether or not completed) owned by such Participant
divided by the total number of Plant McIntosh CTs (whether or not
completed); provided, however, that none of the Additional Plant
McIntosh CTs shall be included in the calculation of Pro Forma
Ownership Interest until such time as one or more Participants
provide written notice to the other Participants that they are
planning to construct one or more of the Additional Plant
McIntosh CTs, as the case may be, in order to serve such
Participants' energy needs; provided further that, for purposes
of this definition of Pro Forma Ownership Interest, no Plant
McIntosh CT shall be included which has been cancelled by the
Participant owning such Plant McIntosh CT and which is identified
in a written notice of cancellation to the other Participants.
(av) PRUDENT UTILITY PRACTICE. "Prudent Utility Practice" at
a particular time shall mean any of the practices, methods and
acts engaged in or approved by a significant portion of the
electric utility industry prior to such time, or any of the
practices, methods and acts, which in the exercise of reasonable
judgment in light of the facts known at the time the decision was
made, could have been expected to accomplish the desired result
at the lowest reasonable cost consistent with good business
practices, reliability, safety and expedition. "Prudent Utility
Practice" is not intended to be limited to the optimum practice,
method or act to the exclusion of all others, but rather to be a
spectrum of possible practices, methods or acts having due regard
for, among other things, manufacturers' warranties and the
requirements of Governmental Authorities of competent
jurisdiction and the requirements of this Agreement and the
Ownership Agreement. Compliance by Savannah with the provisions
of any Budget estimate which has been altered by the Participants
pursuant to this Agreement or the Ownership Agreement, as the
case may be, from any such estimate submitted by Savannah shall
not, in and of itself, constitute a breach by Savannah of its
obligation to discharge its responsibilities as Agent for the
Participants hereunder in accordance with Prudent Utility
Practice.
(aw) PURCHASE PRICE. The "Purchase Price" shall have the
meaning assigned in subsection (i) of Section 3(b), PURCHASE
PRICE AND PAYMENT, of the Ownership Agreement.
(ax) SAVANNAH PLANT MCINTOSH CTS. The "Savannah Plant
McIntosh CTs" shall refer to Plant McIntosh CT Nos. 05 and 06 and
one or more of the Additional Plant McIntosh CTs, any one of
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which is a Savannah Plant McIntosh CT; provided, however, that
none of the Additional Plant McIntosh CTs shall be included in
the Savannah Plant McIntosh CTs until such time as Savannah
provides written notice to GPC that Savannah is planning to
construct one or more of the Additional Plant McIntosh CTs, as
the case may be, in order to serve Savannah's energy needs;
and provided, further, that the Savannah Plant McIntosh CTs shall
not include any Savannah Plant McIntosh CT which Savannah decides
shall not be constructed and which is so identified in a written
notice to GPC.
(ay) SAVANNAH PLANT MCINTOSH CTs SITE. The "Savannah Plant
McIntosh CTs Site" shall refer to so much of the Savannah Plant
McIntosh CTs as constitutes real property.
(az) SCSI. "SCSI" shall mean Southern Company Services,
Inc., a corporation organized and existing under the laws of the
State of Alabama, and any successor corporation.
(ba) SEC. The "SEC" shall refer to the Securities and
Exchange Commission or any governmental agency succeeding to the
powers and functions thereof.
(bb) SITE REPRESENTATIVE. "Site Representative" shall refer
to the term as described in Section 6(j), ON-SITE OBSERVATION AND
INSPECTION, hereof.
(bc) THE SOUTHERN COMPANY. "The Southern Company" shall
refer to The Southern Company, a corporation organized and
existing under the laws of the State of Delaware.
(bd) UNIFORM SYSTEM OF ACCOUNTS. The "Uniform System of
Accounts" shall mean the FERC Uniform System of Accounts
prescribed for Public Utilities and Licensees (Class A and Class
B), as the same now exists or may be hereafter amended by the
FERC.
(be) VARIABLE OPERATING COSTS. "Variable Operating Costs"
shall mean those Operating Costs identified as variable operation
and maintenance expenses from time to time in the Intercompany
Interchange Contract.
2. OPERATIONS.
(a) AGENT. Subject to the terms of this Agreement and of
the Ownership Agreement, the Participants hereby irrevocably
appoint Savannah as their Agent in connection with the Plant
McIntosh CT Project, to act on behalf of the Participants in
performing the Agency Functions. Savannah hereby accepts such
appointment and agrees that it shall discharge its
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responsibilities as Agent in accordance with this Agreement, the
Ownership Agreement and Prudent Utility Practice.
(b) COMMITTEES. From time to time the Participants may
appoint and charge committees to study and make recommendations
on any subject, as the Participants may designate. The purpose,
charge and duty of each committee so appointed shall not exist
for more than one year unless the committee is reappointed by the
Participants.
(c) DEVELOPMENT OF BUDGETS, PLANS AND SCHEDULES. Prior to a
reasonable period in advance of the date when the Agent is
required under this Agreement to deliver any Budget, plan or
schedule to the Participants, each Participant shall have the
right to provide the Agent information (whether in writing or in
person, as determined by the Participants) to be used in the
formation of the subsequent year's Operating Budget, the Capital
Budget and such other plans and schedules as the Participants
shall reasonably request, including, without limitation, the Fuel
Plan and the maintenance schedule. Taking into account such
information from the Participants, Savannah, as Agent, shall
prepare proposed Capital Budgets (including separate Capital
Budgets for each Participant's Plant McIntosh CTs and for the CT
Common Facilities), a proposed Operating Budget, and other
appropriate proposed plans and schedules and shall submit them to
the Participants as provided below. Such Budgets, plans and
schedules shall be based upon information reasonably available
and shall contain such information as is reasonably adequate for
the purpose of each Participant's reasonable review thereof.
The proposed Budgets, plans and schedules for each calendar
year shall be submitted to the Participants by August 1 of the
preceding year, beginning on August 1, 1993. On or before
September 1 of each year, beginning with September 1, 1993, the
Participants shall approve by mutual agreement or disapprove each
Budget, plan and schedule separately, other than the Capital
Budgets for each Participant's Plant McIntosh CTs which shall be
approved or disapproved by the respective Participants owning the
personal property comprising such Plant McIntosh CTs. In the
event that any proposed Budget, plan or schedule as submitted is
disapproved, the Participants shall have until October 1 of each
year to agree on revised Budgets, plans or schedules, as the case
may be, which shall comply with Prudent Utility Practice and
Legal Requirements. In the event that the Participants are
unable to agree on complete revised Budgets, plans or schedules
which comply with Prudent Utility Practice and Legal Requirements
by October 1 of each year, then the Budgets, plans and schedules
to be utilized shall consist only of such portions of the
Budgets, plans and schedules on which the Participants agree.
The Agent shall have reasonable day-to-day discretion with
respect to individual expenditures, provided that such
- 13 -
expenditures shall be generally consistent with the guidelines
set forth in such Budgets and, unless otherwise approved by the
Participants (or, in the case of any of the Plant McIntosh CTs,
by the respective Participants owning the personal property
comprising such Plant McIntosh CTs), such aggregate expenditures
for Operating Costs or Cost of Construction, as the case may be,
shall not exceed 100% of the Capital Budgets (excluding any
budgeted amount for Fuel Costs) or Operating Budget, as the case
may be, without the approval of the affected Participants.
Notwithstanding the foregoing, Savannah, as Agent, may make or
incur such expenditures as are reasonably required to respond
appropriately to emergencies, and the Participants shall make
payment for such expenditures as Operating Costs or Cost of
Construction; provided, however, that any expenditures beyond the
period of the emergency may not be incurred without the prior
approval of the affected Participants. The Participants and
Savannah, as Agent, agree to cooperate with one another to
revise, to the extent practicable, any Budget, plan or schedule
in effect from time to time to accommodate changed circumstances.
The Agent shall provide the Participants with such other
information as the Participants may reasonably request; provided,
however, that such information shall be provided only for the
convenience of the Participants except as the Agent may otherwise
agree from time to time. Notwithstanding the foregoing,
Savannah, as Agent, makes no representation, warranty or promise
of any kind as to the accuracy of any estimate contained in any
Budget, plan or schedule or in any revision thereto or that any
information referred to in the preceding sentence will be
sufficient, and in no event shall Savannah, as Agent, have any
liability to any of the Participants in these regards.
(d) RECORD KEEPING. In furtherance of its duties as Agent,
Savannah shall also keep and maintain appropriate plant records
in accordance with applicable Legal Requirements and Savannah's
record retention policies, and upon request from time to time by
a Participant, Savannah will inform such Participant of the
location of such records and provide access thereto. To the
extent that any Participant would like to retain records for
longer periods of time than Savannah would retain such records,
then, upon written request from such Participant, Savannah shall
provide such Participant, at such Participant's sole expense,
with originals or copies as appropriate of such records on or
prior to the date that Savannah would dispose of such records.
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3. AUTHORITY AND RESPONSIBILITY FOR OPERATION
(a) OPERATION. Subject to the provisions of this Agreement
and the Ownership Agreement, Savannah, as Agent for the
Participants, shall have sole authority and responsibility with
respect to the Agency Functions, and in respect thereof,
Savannah, as Agent, is authorized to take and shall take, in the
name and on behalf of the Participants all reasonable actions
which, in the discretion and judgment of Savannah, are deemed
necessary or advisable to effect the Agency Functions, including,
without limitation, the following:
(i) The making of such agreements and modifications of
existing agreements, other than this Agreement and the
Ownership Agreement, and the taking of such other action as
Savannah, as Agent, deems necessary or appropriate, in its
sole discretion, or as may be required under the regulations
or directives of any Governmental Authority having
jurisdiction, with respect to the Agency Functions, which such
agreements and modifications, together with all such existing
agreements, shall be held by Savannah as Agent; provided,
however, that Savannah will develop procedures, with respect
to the purchase of equipment and materials and the supply of
services, which are mutually acceptable to the Participants
and which shall provide opportunity for the Participants to
participate in procurement decisions;
(ii) With respect to the disposal (including, without
limitation, retirement and salvaging) of all or any part of
the Plant McIntosh CTs (other than the Savannah Plant McIntosh
CTs), the making of such agreements and modifications of
existing agreements (other than this Agreement and the
Ownership Agreement) and the taking of such other action as
may be required under the regulations or directives of any
Governmental Authority having jurisdiction or as Savannah, as
Agent, deems necessary or appropriate, with the consent in
each case of the Participants owning such Plant McIntosh CTs,
which such agreements and modifications, together with such
existing agreements, shall be held by Savannah, as Agent;
provided, however, that Savannah shall not be required to
obtain the consent of any Participant prior to disposing of
any machinery, apparatus, supplies, equipment, tools or
implements which are (1) valued at less than $50,000.00
(original book cost), and (2) replaced or substituted for with
similar property of value at least equal to that of the
disposed property; provided, further, that Savannah is not
authorized by GPC to have any direct contact with the GPSC on
behalf of GPC without the written consent of GPC;
(iii) With respect to the disposal (including, without
limitation, retirement and salvaging) of all or any part of
- 15 -
the CT Common Facilities and the CT Fuel Supply, the making of
such agreements and modifications of existing agreements
(other than this Agreement and the Ownership Agreement) and
the taking of such other action as may be required under the
regulations or directives of any Governmental Authority having
jurisdiction or as Savannah, as Agent, deems necessary or
appropriate, with the consent in each case of all the
Participants, which such agreements and modifications,
together with such existing agreements, shall be held by
Savannah, as Agent; provided, however, that Savannah shall not
be required to obtain the consent of any Participant prior to
disposing of any machinery, apparatus, supplies, equipment,
tools or implements which are (1) valued at less than
$50,000.00 (original book cost), and (2) replaced or
substituted for with similar property of value at least equal
to that of the disposed property;
(iv) The execution and filing, with any Governmental
Authority having jurisdiction (except the GPSC on behalf of
GPC), of applications, amendments, reports and other documents
and filings in or in connection with the licensing and other
regulatory matters with respect to the Plant McIntosh CTs, the
CT Common Facilities, the CT Fuel Supply or any combination
thereof;
(v) The receipt of any notice or other communication
from any Governmental Authority having jurisdiction (except
the GPSC on behalf of GPC), as to any licensing or other
similar matter with respect to the Plant McIntosh CTs, the CT
Common Facilities, the CT Fuel Supply or any combination
thereof; and
(vi) The provision of, or contracting with any third
party to purchase or provide, any equipment or facilities or
perform services in connection with the Plant McIntosh CTs,
the CT Common Facilities, the CT Fuel Supply or any
combination thereof.
GPC and Savannah agree that all such agreements which relate
to the Plant McIntosh CTs, the CT Common Facilities or the CT
Fuel Supply, described in this Section 3(a) which are entered
into after the effective date hereof shall, by their terms, be
made assignable by Savannah, as Agent, to any replacement or
successor Agent for the Agency Functions, pursuant to this
Agreement and the Ownership Agreement; provided, however, that
any agreements between Savannah, as Agent, and its Affiliates
shall not be made assignable to any replacement or successor
Agent who is not also an Affiliate of Savannah.
Savannah, as Agent, shall also, at all times, be responsible
for ensuring the continued availability of any equipment and
- 16 -
services necessary to support the operation and maintenance of
the Plant McIntosh CT Project (including, without limitation,
fire protection, potable water and the intake structure), which
equipment and services are to be supplied from portions of Plant
McIntosh wholly owned by Savannah.
(b) OTHER CONTRACTS. In discharging its obligations as
Agent hereunder, Savannah shall have the right, on behalf of the
Participants, to provide, or contract with any of its Affiliates
to purchase or provide, at cost, any equipment or facilities or
to perform, or contract with any of its Affiliates to perform, at
cost, services in connection with the Plant McIntosh CTs, the CT
Common Facilities, the CT Fuel Supply or any combination thereof.
(c) FOSSIL FUEL.
(i) Savannah, as Agent, shall have sole authority to and
shall arrange for and acquire all fossil fuel and fuel
transportation for the Plant McIntosh CT Project consistent
with such policies and procedures with respect thereto as may
be adopted from time to time by the Participants by mutual
agreement, and shall have sole authority to administer all
fuel standards for fossil fuel for the Plant McIntosh CT
Project consistent with such standards with respect thereto as
may be adopted from time to time by the Participants by mutual
agreement.
(ii) Each 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.
(iii) The Participants shall pay Fuel Costs and shall own
fuel in the CT Fuel Supply in proportion to (A) their
respective undivided ownership interests in the personal
property comprising the 1994 Plant McIntosh CTs prior to the
last Commercial Operation date of the 1995 Plant McIntosh CTs,
and (B) their respective Pro Forma Ownership Interests in the
Plant McIntosh CT Project after the last Commercial Operation
date of the 1995 Plant McIntosh CTs.
(iv) All Fuel Costs incurred in connection with the CT
Fuel Supply shall be allocated among the Participants at the
time such Fuel Costs are incurred in accordance with
subsection (iii) of this Section 3(c) and such Fuel Costs
shall be paid as provided in Section 5(j), PAYMENT AND
SETTLEMENT OF COST OF CONSTRUCTION, hereof; provided, however,
that at the end of each calendar month Savannah, as Agent,
shall cause an adjustment to be made among the Participants in
- 17 -
accordance with the amount of fuel actually consumed by each
Participant, all in accordance with Savannah's standard
accounting practices which shall comply with the Uniform
System of Accounts in effect from time to time.
(v) At least once each calendar quarter, Savannah, as
Agent, shall cause a physical inventory of the CT Fuel Supply
to be performed. All discrepancies between the book inventory
and the physical inventory of the CT Fuel Supply shall be
charged or credited, as appropriate, among the respective
accounts of each Participant in accordance with their
respective undivided ownership interests (determined as
provided in subsection (iii) of this Section 3(c)) during the
physical inventory period to which such discrepancy relates,
all as determined in accordance with Savannah's standard
accounting practices which shall comply with the Uniform
System of Accounts in effect from time to time.
4. INTENTIONALLY OMITTED.
5. OPERATION, RIGHTS AND OBLIGATIONS.
(a) AVAILABILITY OF OUTPUT. Subject to the further
provisions of this Agreement and the provisions of the Ownership
Agreement, at any given time each Participant shall each be
entitled to (i) the net capacity of such Participant's Plant
McIntosh CTs, as specified in the Ownership Agreement, and (ii)
the net energy output of such Participant's Plant McIntosh CTs
dispatched in accordance with the provisions of Section 5(b),
SCHEDULING AND DISPATCHING, hereof.
(b) SCHEDULING AND DISPATCHING. The Plant McIntosh CTs will
be dispatched in order of costs regardless of ownership to meet
Southern electric system requirements. If the Plant McIntosh CTs
have no cost differences, the Agent, upon notification by the
Southern electric system dispatcher of the need for generation
from the Plant McIntosh CTs, will dispatch the required number of
Plant McIntosh CTs using its reasonable best efforts to ensure
that over the operating lives of the Plant McIntosh CTs each
Plant McIntosh CT accumulates equivalent operating hours and
equivalent numbers of starts.
(c) FUEL PLAN. In connection with the development of each
Operating Budget and Capital Budget beginning with the first such
Budgets, Savannah, as Agent, shall prepare and submit annually to
the Participants for their approval, in accordance with the
provisions in Section 2(c), DEVELOPMENT OF BUDGETS, PLANS AND
SCHEDULES, hereof, a Fuel Plan covering at least a five-year
period for the Plant McIntosh CT Project. Each Fuel Plan shall
- 18 -
describe such reasonable information as the Participants may
request and each action or contemplated action and payment and
the estimated dates thereof relating to the acquisition,
transportation, delivery, storage and inventory of fossil fuel
for the Plant McIntosh CT Project, the entitlement (or estimates
thereof) of each Participant to the energy generated by such
Participant's Plant McIntosh CTs for each calendar year of the
Fuel Plan pursuant to Sections 5(a), AVAILABILITY OF OUTPUT, and
5(b), SCHEDULING AND DISPATCHING, hereof, a cash flow analysis of
forecasted expenditures and credits for each Participant for each
major cost component of the Fuel Plan by year for the period
covered by the Fuel Plan, and cash flow by month (or other period
as agreed to by the Agent and the Participants) for the first
three years of each such period. Savannah, as Agent, shall
attempt to acquire, transport, deliver and store fuel for the
Plant McIntosh CT Project in accordance with the Fuel Plan to the
extent reasonably practicable; provided, however, that Savannah,
as Agent, makes no representation, warranty or promise of any
kind as to the accuracy of any estimate or forecast or other
information contained in any Fuel Plan or that any attempt to
acquire, transport, deliver and store fuel for the Plant McIntosh
CT Project in accordance with the Fuel Plan will be successful,
and in no event shall Savannah, as Agent, have any liability to
any of the Participants in these regards.
(d) MAINTENANCE SCHEDULE. In connection with the
development of the Operating Budget and Capital Budgets,
beginning with the first such Budgets, and after receiving and
taking into consideration input from the Participants, Savannah
shall submit annually for approval by the Participants, in
accordance with the schedule provided in Section 2(c),
DEVELOPMENT OF BUDGETS, PLANS AND SCHEDULES, hereof, a
maintenance plan which covers all planned and potential
maintenance for the succeeding two years for such portion of the
Plant McIntosh CT Project as is in Commercial Operation. To the
extent that the desired maintenance plan of any Participant
adversely affects any other Participant, Savannah, as Agent, and
the Participants shall prioritize the maintenance work to be
performed giving due regard to the relative burdens on and
benefits to the Participants, including, without limitation, the
effect of the timing and duration of scheduled outages, and
giving due regard to past burdens and benefits which resulted
from the resolution of prior similar conflicts. Such
prioritization shall take place and be communicated in a timely
manner to limit any unreasonable delays in the maintenance
schedule.
Each such maintenance plan shall describe, in reasonable
detail, the contemplated time and duration of each outage and
maintenance work to be done and the estimated cost thereof. The
maintenance plan for the Plant McIntosh CTs and the CT Common
- 19 -
Facilities shall be subject to approval, rejection or revisions
as provided in Section 2(c), DEVELOPMENT OF BUDGETS, PLANS AND
SCHEDULES, hereof; provided, however, that any rejection of or
revisions to such recommended plan shall comply with the
requirements of Prudent Utility Practice and the other
requirements of this Section 5(d). Proposed changes to the
maintenance plan may be submitted by Savannah, as Agent, or by
any Participant, from time to time. Such proposed changes shall
be prioritized as provided in this Section 5(d). Savannah, as
Agent, makes no representation, warranty or promise of any kind
as to the accuracy of any estimate or other information contained
in any maintenance plan, and in no event shall Savannah, as
Agent, have any liability to any of the Participants in these
regards.
(e) BILLING AND ACCOUNTING. Notwithstanding any reference
to Savannah's standard accounting practices contained herein, all
billing and accounting matters, including, without limitation,
payments to be made by the Participants and the Agent, shall be
carried out in a manner consistent with Section 13(b) of the
Public Utility Holding Company Act of 1935, as amended.
(f) METERING. Savannah, as Agent, shall install and
maintain the necessary metering equipment so as to determine (i)
the gross output, auxiliary requirements, net output and reactive
power of each Plant McIntosh CT each hour to the transmission
grid in the State of Georgia, and (ii) the monthly power, fuel
and water consumption of each Plant McIntosh CT. All metering
equipment shall meet the standards set by the Participants which
shall be consistent with Prudent Utility Practice. Each meter
used pursuant to this Section 5(f) shall, by comparison with
accurate standards, be tested and calibrated by Savannah, as
Agent, at approximately 12-month intervals. If a meter is found
not registering within 1% accuracy, it shall be restored to an
accurate condition or an accurate meter shall be substituted.
Any meter tested and found to be within 1% accuracy shall be
considered to be accurate. If, as a result of any test, any
meter is found to register not within 1% accuracy, Savannah, as
Agent, shall meet with the affected Participant or Participants,
as soon as practicable, after the meter has been repaired or
replaced to resolve any correction for measurement inaccuracy.
The correction shall be calculated from the day the inaccurate
meter was repaired or replaced, working back to the last meter
reading date that was deemed accurate, as agreed to between
Savannah, as Agent, and the affected Participant or Participants.
The energy produced during the time of any electrical meter error
shall be calculated in whole megawatt-hours and scheduled for
payback either to or from Savannah in a time frame agreeable to
Savannah and the affected Participant or Participants. All
metering records and tests shall be available to authorized
representatives of the Participants. All costs incurred in
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connection with such metering equipment and compliance with the
provisions of this Section 5(f) shall be Cost of Construction or
Operating Costs, as appropriate, and as such shall be paid by the
Participants in accordance with the provisions of Section 5(g),
SHARING OF COSTS - GENERAL, hereof.
(g) SHARING OF COSTS - GENERAL. Except as otherwise
provided in this Section 5, each Participant shall be responsible
for the payment of its respective percentage share of all
Operating Costs and Cost of Construction in accordance with this
Agreement and the Ownership Agreement. Notwithstanding the
foregoing sentence, the allocation among the Participants of all
Variable Operating Costs for any given month shall be adjusted at
the end of such month such that each Participant pays that
fraction of such Variable Operating Costs equal to the twelve-
month rolling average of gross generation of such Participant
ending in such month divided by the total twelve-month rolling
average of gross generation of all Participants ending in such
month. The Participants shall be responsible for the payment of
Fuel Costs in accordance with the provisions of Sections 3(c),
FOSSIL FUEL, and 5(j), PAYMENT AND SETTLEMENT OF COST OF
CONSTRUCTION, hereof.
It is the absolute intent of the Participants to share all
items of cost, obligation and liability incurred in connection
with the Plant McIntosh CT Project (other than the financing of
each Participant's respective ownership or leasehold interests in
the Plant McIntosh CT Project), which are not otherwise expressly
provided for in this Agreement or in the Ownership Agreement in
proportion to their respective Pro Forma Ownership Interests, as
they may appear from time to time; provided, however, that any
such cost, obligation or liability incurred at the request of and
for the sole benefit of a particular Participant shall be the
sole responsibility of such Participant and such Participant
hereby agrees to indemnify all other Participants against any
claims, costs, damages, expenses, losses or any other liability
of any kind arising from such costs, obligations or liability.
Notwithstanding the foregoing provisions of this Section 5(g)
or any other provision of this Agreement, in the event any
Participant sells or conveys to any other person (including,
without limitation, a Participant) any ownership or ownership and
leasehold interest in the Plant McIntosh CT Project in accordance
with the provisions of Section 6(c), ALIENATION AND ASSIGNMENT,
of the Ownership Agreement (other than a sale or conveyance as
security for an indebtedness or in connection with the financing
of pollution control or solid waste disposal facilities), such
selling or conveying Participant's rights and obligations
hereunder as a Participant, including, without limitation, the
obligation to make payments of the Operating Costs, Cost of
Construction and Fuel Costs and any other costs to be shared by
- 21 -
the Participants hereunder, shall be reduced to the extent of the
ownership or ownership and leasehold interests so sold or
conveyed, and the Agent and all Participants shall look solely to
such purchaser for payment of the corresponding portion of the
Operating Costs, Cost of Construction and Fuel Costs and other
costs to be shared by the Participants hereunder.
(h) PAYMENT AND SETTLEMENT OF OPERATING COSTS.
(i) Savannah, as Agent, shall be responsible for making,
and shall make, payment to third parties of all Operating
Costs only to the extent that funds are available therefor in
the Operating Account.
(ii) As Agent for the Participants, Savannah will, from
and after the first Commercial Operation date, and on or
before the first day of each month thereafter, notify the
Participants of the Operating Costs anticipated to be due and
payable during the succeeding calendar month, plus or minus
any adjustments of Operating Costs incurred in prior months
but not previously charged or credited to the Participants
under the provisions of this Section 5(h), with separate
computations as to each of the Plant McIntosh CTs and the CT
Common Facilities. Each Participant shall make payment into
the Operating Account in immediately available funds during
such succeeding month, in accordance with the schedule
determined and delivered to it by Savannah, as Agent, of its
respective percentage share of such Operating Costs. Each
Participant shall pay all Operating Costs associated with the
Plant McIntosh CTs owned by such Participant. Each
Participant's share of the Operating Costs associated with the
CT Common Facilities shall be equivalent to the proportion
which the number of Plant McIntosh CTs in Commercial Operation
owned by such Participant bears to the total number of Plant
McIntosh CTs in Commercial Operation. Each such notification
made by Savannah, as Agent, of anticipated Operating Costs and
adjustments shall be accompanied and adjusted by an accounting
of the Operating Costs incurred and credits, if any, accrued
for preceding months.
(iii) Each Participant shall have until (A) the 180th day
after the furnishing of such accounting by Savannah, as Agent,
for any charge or credit made to it pursuant to this Section
5(h), or (B) such time as the Parties may otherwise agree, to
question or contest the correctness of such charge or credit
after which time the correctness of such charge or credit
shall be conclusively presumed. In the event that any
Participant by timely notice questions or contests the
correctness of any such charge or credit, Savannah shall
promptly review the questioned charge or credit and shall
within 55 days following notice from a Participant questioning
- 22 -
or contesting such charge or credit notify each Participant of
the amount of any error and the amount of reimbursement, if
any, that each Participant is required to make or is entitled
to receive in respect of such error. Not later than the fifth
Business Day after receipt of such notice from Savannah, as
Agent, each Participant required to make reimbursement shall
deposit the amount specified in such notice into the Operating
Account in immediately available funds. Any such
reimbursement required to be made by Savannah, as Agent, shall
be so deposited by Savannah, as Agent, not later than the
fifth Business Day after Savannah, as Agent, notifies the
Participants of the amount of such reimbursement that they are
required to make. From the amount so deposited, Savannah, as
Agent, shall immediately thereafter distribute the amount that
each Participant is entitled to receive (or if the amount so
deposited is insufficient to reimburse in full all
Participants entitled to receive reimbursement, Savannah, as
Agent, shall distribute the amount so deposited among the
Participants entitled to receive such reimbursement pro rata
in accordance with each Participant's entitlement to
reimbursement in respect of such error), except that if any
such Participant is then in default in respect of any payments
required to be made under this Agreement or the Ownership
Agreement, an amount equal to such defaulting Participant's
share of the amount so deposited with respect to such
reimbursement shall be retained in the Operating Account and
distributed in accordance with the provisions of Section 5(i),
OPERATING ACCOUNT, hereof. Savannah shall have no
responsibility or liability for the failure of any Participant
(other than itself) to deposit funds as provided in this
subsection (iii) of Section 5(h).
(iv) Savannah, as Agent, will provide each Participant
with such information as is reasonably required by such
Participant in order to account for payments made pursuant to
this Section 5(h) on such Participant's books.
(i) OPERATING ACCOUNT. Prior to the first Commercial
Operation date, Savannah, as Agent, shall establish the Operating
Account. All monies paid by the Participants for Operating Costs
shall be deposited by the Participants in the Operating Account
and, unless otherwise agreed to by the Participants with respect
to Operating Costs, Savannah, as Agent, shall withdraw and apply
funds therefrom only as necessary to pay Operating Costs. In the
event that during any month the balance in the Operating Account
is insufficient to pay the Operating Costs required to be paid
that month (other than as the result of the non-payment by a
Participant of amounts due pursuant to Section 5(h), PAYMENT AND
SETTLEMENT OF OPERATING COSTS, hereof), Savannah, as Agent, shall
promptly so notify the Participants by telephone or telecopy of
the amount required to be paid by each Participant and thereafter
- 23 -
promptly confirm the same in writing, together with a description
of the cause of the deficit. Each of the Participants shall pay
its respective share of such deficit into the Operating Account
in immediately available funds not later than the fifth Business
Day after receipt of such telephone or telecopy notice from
Savannah, as Agent. Savannah, as Agent, shall have no
responsibility or liability to make up any such deficit out of
its own funds in excess of the proportionate share of such
deficit which it owes as a Participant.
Until retirement of the Plant McIntosh CT Project and
settlement of all the obligations relating to Operating Costs,
each Participant shall continue to own and maintain its undivided
ownership interest in the Operating Account (other than amounts,
if any, deposited in the Operating Account pursuant to subsection
(iii) of Section 5(h), PAYMENT AND SETTLEMENT OF OPERATING COSTS,
hereof, which amounts shall be owned solely by the Participants
to whom such amounts are to be distributed as provided in such
subsection); provided, however, that Savannah, as Agent, shall
have the sole right and authority to make withdrawals from the
Operating Account; and provided further, that a Participant shall
not own any undivided ownership interest in any amount in the
Operating Account in respect of interest paid into such Operating
Account by or on behalf of such Participant pursuant to the
provisions of Section 5(l), NONPAYMENT, hereof, which amount, in
the event there are two Participants, shall be owned by the other
Participant and credited against payments required to be made
into such account by such other Participant in the performance of
its obligations under this Agreement, and which amount, in the
event there are three or more Participants, shall be owned in
common by, and credited against payments required to be made into
such account by, the other Participants not then in default in
the performance of their obligations under this Agreement in the
proportion which their respective Pro Forma Ownership Interests,
as they may appear at the time, bear to the aggregate of their
Pro Forma Ownership Interests, as they may appear at the time.
Savannah, as Agent, shall not commingle any funds deposited in
the Operating Account with any other funds owned or maintained by
Savannah unless otherwise agreed to by the Participants.
Upon retirement of the Plant McIntosh CTs and settlement of
all the obligations relating to Operating Costs and payment of
all decommissioning costs, Savannah, as Agent, shall close the
Operating Account and distribute to each Participant its
undivided ownership interest of any balance remaining in such
Operating Account (exclusive of amounts therein, if any, in which
such Participant shall not own any undivided ownership interest),
except that if a Participant shall then be in default with
respect to any payment required to be made under this Agreement
or under the Ownership Agreement, an amount equal to the
liability of such defaulting Participant on account of such
- 24 -
default (of if such amount exceeds such Participant's share of
the balance in the Operating Account, its entire share of such
balance) shall first be distributed to the non-defaulting
Participant, or, if there is more than one non-defaulting
Participant, to the non-defaulting Participants in the proportion
which their respective Pro Forma Ownership Interests, as they may
appear at the time, bear to the aggregate of their Pro Forma
Ownership Interests, as they may appear at the time.
(j) PAYMENT AND SETTLEMENT OF COST OF CONSTRUCTION.
(i) Savannah, as Agent, shall be responsible for making,
and shall make, payment to third parties of all additional
Cost of Construction only to the extent that funds are
available therefor in the Capital Account.
(ii) As Agent for the Participants, Savannah will, from
and after the first Commercial Operation date, and on or
before the first day of each month thereafter, notify the
Participants of the nature and amount of all additional Cost
of Construction anticipated to be incurred during the
succeeding calendar month, including, without limitation, that
portion of the Plant McIntosh CTs and the CT Common Facilities
to which reference is made in subsection (iii) of Section
1(an), PLANT MCINTOSH CT NOS. 01 AND 02, of the Ownership
Agreement, subsection (iii) of Section 1(ao), PLANT MCINTOSH
CT NOS. 03 AND 04, of the Ownership Agreement, subsection
(iii) of Section 1(ap), PLANT MCINTOSH CT NOS. 05 AND 06, of
the Ownership Agreement, subsection (iii) of Section 1(aq),
PLANT MCINTOSH CT NOS. 07 AND 08 of the Ownership Agreement
and subsection (ii) of Section 1(p), CT COMMON FACILITIES, of
the Ownership Agreement, respectively, in respect of
completions, renewals, additions, replacements, modifications
or disposals of the Plant McIntosh CTs, the CT Common
Facilities, or any portion or portions thereof and the amount
of Fuel Costs anticipated to be incurred during such
succeeding calendar month, plus or minus any adjustments for
costs incurred in prior months but not previously charged or
credited to the Participants under the provisions of this
Section 5(j) with separate computations as to each of the
Plant McIntosh CTs and the CT Common Facilities. Savannah, as
Agent, will give each Participant as much notice as is
reasonably practicable of any major anticipated cost. Each
Participant shall make payment into the Capital Account in
immediately available funds of its respective percentage
shares of such additional Cost of Construction and its
respective share of such Fuel Costs in accordance with the
provisions of this Section 5(j) during the succeeding month in
accordance with the schedule determined and delivered to it by
Savannah, as Agent. Each Participant shall pay all such
additional Cost of Construction associated with the Plant
- 25 -
McIntosh CTs owned by such Participant. Each Participant's
share of the additional Cost of Construction associated with
the CT Common Facilities shall be equivalent to the Pro Forma
Ownership Interest of such Participant, as it may appear at
the time. Each Participant's share of Fuel Costs shall be as
provided in Section 3(c), FOSSIL FUEL, hereof. Each such
notification made by Savannah, as Agent, of anticipated costs
and adjustments shall be accompanied and adjusted by an
accounting of costs incurred and credits, if any, received for
preceding months.
(iii) Each Participant shall have until (A) the 180th day
after the furnishing of such accounting by Savannah, as Agent,
for any charge or credit made to it pursuant to this Section
5(j), or (B) such time as the Parties may otherwise agree, to
question or contest the correctness of such charge or credit
after which time the correctness of such charge or credit
shall be conclusively presumed. In the event that any
Participant by timely notice questions or contests the
correctness of any such charge or credit, Savannah, as Agent,
shall promptly review the questioned charge or credit and
shall within 55 days following notice from a Participant
questioning or contesting such charge or credit notify each
Participant of the amount of any error and the amount of
reimbursement, if any, that each Participant is required to
make or is entitled to receive in respect of such error. Not
later than the fifth Business Day after receipt of such notice
from Savannah, as Agent, each Participant required to make
reimbursement shall deposit the amount specified in such
notice into the Capital Account in immediately available
funds. Any such reimbursement required to be made by
Savannah, as Agent, shall be so deposited by Savannah, as
Agent, not later than the fifth Business Day after Savannah,
as Agent, notifies the other Participants of the amount of
such reimbursement that it is required to make. From the
amount so deposited, Savannah, as Agent, shall immediately
thereafter distribute the amount that each Participant is
entitled to receive (or if the amount so deposited is
insufficient to reimburse in full all Participants entitled to
receive reimbursement, then Savannah, as Agent, shall
distribute the amount so deposited among the Participants
entitled to receive such reimbursement pro rata in accordance
with each Participant's entitlement to reimbursement in
respect of such error), except that if any such Participant is
then in default in respect of any payments required to be made
under this Agreement or the Ownership Agreement, an amount
equal to such defaulting Participant's share of the amount so
deposited with respect to such reimbursement shall be retained
in the Capital Account and distributed in accordance with the
provisions of Section 5(k), CAPITAL ACCOUNT, hereof. Savannah
shall have no responsibility or liability for the failure of
- 26 -
any Participant (other than itself) to deposit funds as
provided in this Section 5(j).
(iv) Savannah, as Agent, will provide each Participant
with such information as is reasonably required by such
Participant in order to account for payments made pursuant to
this Section 5(j) on such Participant's books.
(k) CAPITAL ACCOUNT. Prior to the first Commercial
Operation date, Savannah, as Agent, shall establish the Capital
Account. All payments (for which provision is made in
Section 5(j), PAYMENT AND SETTLEMENT OF COST OF CONSTRUCTION,
hereof) of additional Cost of Construction and Fuel Costs
incurred by the Participants shall be deposited by the
Participants in the Capital Account and unless the Participants
shall otherwise agree, Savannah, as Agent, shall withdraw and
apply funds from the Capital Account only as necessary to pay
additional Cost of Construction and Fuel Costs in accordance with
the provisions of Section 5(j), PAYMENT AND SETTLEMENT OF COST OF
CONSTRUCTION, hereof. In the event that during any month the
balance in the Capital Account is insufficient to pay such
additional Cost of Construction and Fuel Costs required to be
paid that month (other than as a result of the nonpayment by a
Participant of an amount due from it pursuant to Section 5(j),
PAYMENT AND SETTLEMENT OF COST OF CONSTRUCTION, hereof),
Savannah, as Agent, shall promptly so notify the other
Participants by telephone or telecopy of the amount required to
be paid by each Participant and thereafter promptly confirm the
same in writing, together with a description of the cause of such
deficit. Each of the Participants shall pay its respective share
of such deficit into the Capital Account in immediately available
funds not later than the fifth Business Day after receipt of such
telephone or telecopy notice from Savannah, as Agent. Savannah
shall have no responsibility or liability to make up any such
deficit out of its own funds in excess of the proportionate share
of such deficit which it owes as a Participant.
Until retirement of the Plant McIntosh CT Project and
settlement of all obligations relating to Cost of Construction
and Fuel Costs, each Participant shall continue to own and
maintain its undivided ownership interest in the Capital Account
(other than amounts, if any, deposited in the Capital Account
pursuant to subsection (iii) of Section 5(j), PAYMENT AND
SETTLEMENT OF COST OF CONSTRUCTION, above, which amounts shall be
owned solely by the Participants to whom such amounts are to be
distributed as provided in such subsection); provided, however,
that Savannah, as Agent, shall have the sole right and authority
to make withdrawals from the Capital Account; and provided
further, that a Participant shall not own any undivided ownership
interest in any amount in the Capital Account in respect of
interest paid into such Capital Account by or on behalf of such
- 27 -
Participant pursuant to the provisions of Section 5(l),
NONPAYMENT, hereof, which amount shall, if there is only one
other Participant, be owned entirely by such other Participant
and credited against payments required to be made into such
Capital Account by such other Participant in the performance of
its obligations under this Agreement, and which amount shall, if
there are three or more Participants, be owned in common by, and
credited against payments required to be made into such Capital
Account by, the other Participants not then in default in the
performance of their obligations under this Agreement in the
proportion which their respective Pro Forma Ownership Interests,
as they may appear at the time, bear to the aggregate of their
Pro Forma Ownership Interests, as they may appear at the time.
Savannah, as Agent, shall not commingle any funds deposited in
any Capital Account with any other funds owned or maintained by
Savannah unless the Participants shall otherwise agree.
Upon retirement of the Plant McIntosh CT Project and
settlement of all obligations relating to Cost of Construction
and Fuel Costs, including, without limitation, all costs incurred
in the disposal of the Plant McIntosh CTs, the CT Common
Facilities and the CT Fuel Supply, Savannah, as Agent, shall
close the Capital Account and distribute to each Participant its
undivided ownership interest of any balance remaining in the
Capital Account (exclusive of amounts therein, if any, in which
such Participant shall not own any undivided ownership interest),
except that if a Participant shall then be in default with
respect to any payment required to be made under this Agreement
or under the Ownership Agreement, an amount equal to the
liability of such defaulting Participant on account of such
default (or if such amount exceeds such Participant's share of
the balance in the Capital Account, its entire share of such
balance) shall first be distributed to the non-defaulting
Participant or, if there is more than one non-defaulting
Participant, to the non-defaulting Participants in the proportion
which their respective Pro Forma Ownership Interests, as they may
appear at the time, bear to the aggregate of their Pro Forma
Ownership Interests, as they may appear at the time.
(l) NONPAYMENT.
(i) Payments due from a Participant hereunder and
payments due from the Agent to the Participants, if any, not
made when due shall bear interest, compounded monthly until
paid, at a rate per annum equal to the lesser of (A) the
highest interest rate allowed by law, or (B) the higher of
(1) a rate five percentage points above the average yield on
the issue of six-month United States Treasury Bills, as
reported by the Federal Reserve Bank of New York, at the sale
of such Treasury Bills by the United States Treasury next
preceding the due date of such payment, or (2) a rate five
- 28 -
percentage points above the highest of the net interest costs
on the most recent issue of bonds or other long-term
obligations by any Participant or the Agent. Such interest
shall accrue and is and shall be expressed in simple interest
terms per annum in accordance with Section 7-4-2(a) of the Official
Code of Georgia Annotated (1989), as amended.
(ii) A nonpaying Participant shall have no right to any
output of capacity and energy of the Plant McIntosh CT Project
or to exercise any other right of a Participant until all
amounts overdue from that Participant have been paid, together
with interest at the rate provided in subsection (i) of this
Section 5(l), into the Construction Account, the Operating
Account, the Capital Account or to another Participant if it
has paid such overdue amount on behalf of such nonpaying
Participant, as appropriate. Such overdue amounts, together
with such interest, shall be paid into the Construction
Account, the Operating Account or the Capital Account, as
appropriate, only to the extent that such amounts have not
been paid by another Participant pursuant to the further
provisions of this Section 5(l). Notwithstanding any of the
provisions of this Section 5(l), if Savannah is the nonpaying
Participant, Savannah, as Agent for the other Participants,
shall continue to renew, add, replace, modify, manage,
control, operate, maintain and dispose of the Plant McIntosh
CT Project in accordance with the provisions of this Agreement
and the Ownership Agreement.
(iii) Any output of capacity and energy of the Plant
McIntosh CTs of any nonpaying Participant may be sold or
utilized by any non-defaulting Participant, at its option
(provided that if two or more Participants elect to exercise
such right, it shall be exercised pursuant to the fourth
sentence of this subsection (iii) of this Section 5(l)), to
reduce the liability of the nonpaying Participant until all
amounts due from such nonpaying Participant, together with
interest at the rate provided in subsection (i) of this
Section 5(l), have been paid. Each Participant (A) electing
to sell the energy of a nonpaying Participant shall endeavor
to make such sales at then prevailing market prices, and (B)
electing to utilize the energy of a nonpaying Participant
shall pay on behalf of or credit the nonpaying Participant in
an amount equal to the hourly decremental energy cost of the
Participant utilizing such energy. If two or more
Participants wish to exercise the aforesaid right of sale or
utilization, unless such Participants shall otherwise agree,
they shall be entitled to the benefits of such sale or
utilization on a pro rata basis in accordance with the
proportion which their respective Pro Forma Ownership
Interests, as they may appear at the time, bear to the
aggregate of their Pro Forma Ownership Interests, as they may
- 29 -
appear at the time. The net proceeds of such sale or
utilization shall be applied to reduce the liability of such
nonpaying Participant arising from such nonpayment (including,
without limitation, interest as provided in subsection (i) of
this Section 5(l)) as follows: (A) If any Participant or the
Agent exercising such right of sale or utilization has
advanced monies into the Construction Account, the Operating
Account or the Capital Account on behalf of the defaulting
Participant, then the net proceeds of sale or credit from
utilization shall be applied to reduce the liability of such
defaulting Participant; and (B) To the extent that no such
liability is owed to any Participant or the Agent exercising
such right of sale or utilization, then the net proceeds of
such sale or, in the case of utilization, the amount payable
with respect to such utilization, shall be paid into the
Construction Account, the Operating Account or the Capital
Account, as appropriate, to reduce the liability of the
defaulting Participant. Any such net proceeds from sale or
amounts payable for utilization in excess of the amount of
such liability of the nonpaying Participant shall be applied
as a credit against such nonpaying Participant's share of
future Operating Costs or Cost of Construction, as
appropriate. Notwithstanding the foregoing provisions of this
subsection (iii) of this Section 5(l), any non-defaulting
Participant shall have the right, but not the obligation, to
advance monies into the Construction Account, the Operating
Account, the Capital Account, or both, on behalf of any
nonpaying Participant and to be reimbursed therefor
(including, without limitation, interest as provided in
subsection (i) of this Section 5(l)) and to exercise the right
of sale or utilization set forth in this subsection (iii) of
this Section 5(l) to the exclusion of all Participants which
have not advanced monies on behalf of such nonpaying
Participant and been fully reimbursed therefor; provided,
however, that if more than one Party elects to advance monies
pursuant to this sentence, the Parties advancing such monies
shall be entitled to exercise such right of sale or
utilization in proportion to the respective amounts advanced
by them (including, without limitation, interest as provided
in subsection (i) of this Section 5(l)) which remain
outstanding from time to time; provided further, however, in
the event the Participants do not elect to advance all such
monies due from time to time from nonpaying Participants, the
Agent shall also have the right, but not the obligation, to
exercise the rights described in this sentence.
(iv) In addition to all other rights of the Participants
pursuant to the foregoing provisions of this Section 5(l), the
other Participant or Participants shall have the right,
subject to the receipt of all requisite regulatory approvals,
but not the obligation, to make any payment of interest or
- 30 -
principal due and owing (A) to Chemical Bank, as Trustee under
GPC's First Mortgage Bonds, pollution control revenue bonds,
or other lender or trustee, as the case may be, if any, from
GPC in respect of such First Mortgage Bonds, or other bonds or
notes for financing GPC's obligations hereunder, which GPC
fails to make when due, or (B) to NationsBank of Georgia,
National Association, as Trustee under Savannah's First
Mortgage Bonds, or other lender or trustee, as the case may
be, if any, from Savannah in respect of such First Mortgage
Bonds, pollution control revenue bonds, or other bonds or
notes for financing Savannah's obligations hereunder, which
Savannah fails to make when due, or (C) to the corresponding
lenders or trustees from any other Participant hereunder in
respect of a financing of such Participant's obligations
hereunder, which such Participant fails to make when due, and
in each such case to be promptly reimbursed in full therefor
by GPC, Savannah or such other Participant, as the case may
be, together with interest at the rate provided in
subsection (i) of this Section 5(l).
(v) No remedy referred to in this Section 5(l) is
intended to be exclusive of any other remedy set forth in this
Section 5(l), but every such remedy herein provided shall be
cumulative and may be exercised from time to time and as often
as may be deemed expedient except where the exercise of any
one of such remedies precludes its further exercise or the
exercise of any other remedy. No delay or failure to exercise
any remedy herein provided shall impair the right to exercise
any such remedy or be construed to be a waiver of such right
or of any default by a Participant or by the Agent.
Notwithstanding the foregoing, the remedies which are set
forth in this Section 5(l) shall constitute the sole and
exclusive remedies of the Participants, legal or equitable,
for the failure of any Participant to make any payment when
due under this Agreement.
(vi) Notwithstanding the foregoing provisions of this
Section 5(l), any Participant who disagrees with or disputes
the amount of any payment claimed by the Agent to be due
pursuant to this Agreement shall make such payment under
protest and shall be reimbursed, together with all accrued
interest at the Prime Rate from the date of payment to the
date of reimbursement, for any amount charged in error after
the settlement of such disagreement or dispute as provided in
Sections 5(h), PAYMENT AND SETTLEMENT OF OPERATING COSTS, and
5(j), PAYMENT AND SETTLEMENT OF COST OF CONSTRUCTION, hereof,
as appropriate.
(m) INSURANCE. Except as may otherwise be agreed to by the
Participants, during the period of its construction and operation
of the Plant McIntosh CT Project, Savannah, as Agent, shall carry
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in the name of the Participants as their interests appear,
insurance covering (i) workers' compensation, which shall include
employers' liability, (ii) commercial general liability, which
shall include broad form contractual and products/completed
operations liability, and (iii) "all risk" property, which shall
include coverage for boiler and machinery, in such amounts and
with such deductible or self-insurance features as is consistent
with The Southern Company's customary practices, provided such
insurance shall have the following minimum limits of liability:
(w) workers' compensation, statutory limits; (x) employers'
liability, $100,000 per accident; (y) commercial general
liability, which shall include broad form contractual and
products/completed operations liability, $50,000,000 combined
single limit per occurrence; and (z) "all risk" property
insurance, $200,000,000 per occurrence; or such greater limits as
may be determined, from time to time, by mutual agreement of the
Participants. The maximum aggregate deductible amount under all
insurance policies for any occurrence shall be an amount
consistent with industry practice for utilities of similar size
and exposure provided that such insurance is obtainable with a
deductible amount not exceeding such maximum deductible amount
and at commercially reasonable premiums. The aggregate cost of
all such insurance shall be considered (i) Cost of Construction
for any such costs which are incurred with respect to any portion
or portions of the Plant McIntosh CT Project which has not yet
entered Commercial Operation, and (ii) Operating Costs for any
such costs which are incurred with respect to any portion or
portions of the Plant McIntosh CT Project which has entered
Commercial Operation, and shall be paid in accordance with the
provisions of Section 6(k), PAYMENTS MADE DURING CONSTRUCTION, of
the Ownership Agreement, or Section 5(h), PAYMENT AND SETTLEMENT
OF OPERATING COSTS, hereof, as appropriate. For any policy
furnished by Savannah, the Participants shall each be designated
as an additional insured (including, without limitation, for
purposes of protecting their interests as owners) and such policy
shall be endorsed to be primary to any insurance which may be
maintained by any Participant.
Each other Participant may also maintain additional or other
insurance, at its own cost and expense, which it deems necessary
or advisable to protect its respective interest in any portion of
the Plant McIntosh CT Project, provided that such additional
insurance does not reduce or diminish in any way the coverage of
the insurance procured and maintained by Savannah pursuant to
this Section 5(m).
Notwithstanding the foregoing, each Participant (other than
Savannah) shall separately procure and maintain in force, at its
own expense, workers' compensation and employer's liability
insurance for its Site Representatives and its other employees
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visiting the Plant McIntosh CT Project with the minimum limits of
liability set forth above.
6. CERTAIN ADDITIONAL AGREEMENTS AMONG THE PARTICIPANTS.
The Agent and the Participants hereby covenant and agree as
follows:
(a) NO ADVERSE DISTINCTION. Notwithstanding any other
provision of this Agreement, in discharging their respective
responsibilities pursuant to this Agreement, neither Savannah, as
Agent or as a Participant, nor any other Participant, shall make
any adverse distinction between that portion of the Plant
McIntosh CT Project in which it has an interest, and any other
portion of the Plant McIntosh CT Project because of its ownership
of (or ownership and leasehold interest in) a portion of the
Plant McIntosh CTs or an undivided share of the CT Common
Facilities with the other Participants.
(b) COOPERATION. The Participants and Savannah, as Agent,
will cooperate with each other in all activities relating to the
Plant McIntosh CT Project, including, without limitation, the
execution and filing of applications for authorizations, permits
and licenses with Governmental Authorities having jurisdiction
(except that Savannah is not authorized to have any contact with
the GPSC on behalf of GPC without the written consent of GPC),
fuel procurement and the execution of such other documents as may
be reasonably necessary to carry out the provisions of this
Agreement. Without Savannah's written consent, no other
Participant shall incur any obligation in connection with the
Plant McIntosh CT Project which would or could obligate Savannah
to any third party.
(c) LIABILITY, REMEDIES AND LIMITATIONS OF LIABILITY.
(i) Notwithstanding any provision of law or any
provision of this Agreement, (A) in the event Savannah, as
Agent, fails to comply at any time with the provisions of
Section 6(a), NO ADVERSE DISTINCTION, hereof, or (B) in the
event Savannah fails at any time to perform its duties,
responsibilities, obligations or functions hereunder as Agent
in accordance with Prudent Utility Practice, or (C) in the
event that Savannah conveys all of its undivided ownership
interest in the Plant McIntosh CT Project, then the
Participants shall have the right as their sole and exclusive
remedy to remove Savannah, as Agent, hereunder and under the
Ownership Agreement in accordance with all of the provisions
of subsection (iv) of this Section 6(c).
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GPC, in performing services, or acting as agent, for
Savannah in connection with the Plant McIntosh CT Project,
shall have equivalent limitations on its liability as are set
forth above for Savannah, as Agent.
(ii) The limitations upon the liability of Savannah and
GPC herein shall also apply to the work performed by Savannah
and GPC prior to the date hereof and prior to the Execution
and Delivery with respect to the Plant McIntosh CTs, the CT
Common Facilities and the CT Fuel Supply.
(iii) In the event that any particular application of any
of the limitations of liability contained in this Section 6(c)
should be finally adjudicated to be void as a violation of the
public policy of the State of Georgia, then such limitation of
liability shall not apply with respect to such application to
the extent (but only to the extent) required in order for such
limitation of liability not to be void as a violation of such
public policy, and such limitations of liability shall remain
in full force and effect with respect to all other
applications to the fullest extent permitted by law.
(iv) The removal and replacement of Savannah as Agent
under this Agreement and under the Ownership Agreement
pursuant to any provisions of this Agreement or the Ownership
Agreement authorizing such removal and replacement, shall be
conducted in accordance with all of the following provisions
of this subsection (iv) of Section 6(c):
(A) The removal of Savannah as Agent under this Agree-
ment and under the Ownership Agreement with respect to the
Plant McIntosh CT Project (other than the Savannah Plant
McIntosh CTs) and the appointment of a successor Agent
shall be effected, subject to approval of any Governmental
Authority having jurisdiction, upon written notice to
Savannah executed by the Participant or Participants owning
the Plant McIntosh CT Project (other than Savannah). Any
such notice must identify the date upon which such removal
and appointment shall be effective, the cause for such
removal and the provisions hereof or of the Ownership
Agreement or both upon which such removal is based, and
either the name of the successor Agent appointed to replace
Savannah, as Agent, or the names of two potential successor
Agents, one of whom shall be appointed to replace Savannah,
as Agent. In the event such notice of removal identifies
two potential successor Agents, the Participant or
Participants owning the Plant McIntosh CT Project (other
than Savannah) shall notify Savannah in writing of the
identity of the one appointed to replace Savannah, as
Agent, forthwith upon its appointment, which shall occur no
later than the date upon which the removal of Savannah, as
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Agent, is to be effective as set forth in such notice of
removal.
(B) Except as provided in the preceding paragraph (A),
Savannah shall have no obligation to continue as Agent
under this Agreement or under the Ownership Agreement from
and after the date upon which its removal as Agent is to be
effective as set forth in such notice of removal. In
addition, from and after the date upon which such removal
of Savannah, as Agent with respect to the Plant McIntosh CT
Project (other than the Savannah Plant McIntosh CTs), is to
be effective as set forth in the notice of removal, the
Participants (other than Savannah) shall indemnify and hold
Savannah harmless from and against any loss, cost and
expense resulting from the failure of the successor Agent
to assume such position on such effective date.
(C) Savannah agrees that it will cooperate with the
successor Agent in facilitating the assumption of such
position by the successor Agent and in generally
familiarizing the successor Agent and its employees and
agents with the Plant McIntosh CTs or the CT Common
Facilities, as the case may be, and with their physical
orientation and operation.
(d) INDEMNIFICATION. Except as provided in subsection (iii)
of Section 6(c), LIABILITIES, REMEDIES AND LIMITATIONS OF
LIABILITY, hereof, in the event Savannah, in its performance as
Agent hereunder, or any Participant in its capacity as such, or
GPC in performing services, or acting as agent, for Savannah,
incurs any liability to any third party, any reasonable amount
paid on account of such liability shall, to the extent such
liability would be classified as Operating Costs under the
Uniform System of Accounts, be considered an Operating Cost and
apportioned among the Participants pursuant to Section 5(h),
PAYMENT AND SETTLEMENT OF OPERATING COSTS, hereof, and to the
extent such liability would be classified as a Cost of
Construction under the Uniform System of Accounts, be considered
a Cost of Construction and apportioned among the Participants
pursuant to Section 6(k), PAYMENTS MADE DURING CONSTRUCTION, of
the Ownership Agreement and Section 5(j), PAYMENT AND SETTLEMENT
OF COST OF CONSTRUCTION, hereof, as appropriate.
(e) AVAILABILITY OF RECORDS. Savannah, as Agent, will at
all times make available to each Participant and its duly
authorized agents and representatives, and each Participant and
its duly authorized agents and representatives may audit all
books and records regarding Cost of Construction, Operating Costs
and Fuel Costs sufficiently to allow it to determine that such
costs and expenditures attributed to the Plant McIntosh CTs
(other than the Savannah Plant McIntosh CTs), the CT Common
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Facilities, the CT Fuel Supply or any combination thereof by
Savannah, as Agent, pursuant to Sections 5, OPERATION, RIGHTS AND
OBLIGATIONS, or 3, AUTHORITY AND RESPONSIBILITY FOR OPERATION,
hereof, are appropriate or as needed to satisfy requests from
Governmental Authorities. No payment made pursuant to the
provisions of such Section 5 or such Section 3 shall constitute a
waiver of any right of a Participant to question or contest the
correctness of any charge or credit by Savannah, as Agent.
(f) RIGHT TO COPIES. Any Participant and any successor
Agent hereunder or under the Ownership Agreement shall be
entitled to copy (i) any and all contracts, books, records,
reports and other documents and papers to which such
Participants, their respective officers, employees, duly
authorized agents or representatives and consultants or any
successor Agent is permitted access, or which Savannah has agreed
shall be available for audit, under the terms of this Agreement
or the Ownership Agreement, and (ii) any and all planning,
licensing, construction, testing, architectural, engineering and
design drawings and specifications that have been or shall
hereafter be prepared in connection with the Plant McIntosh CTs,
the CT Common Facilities, the CT Fuel Supply, or any combination
thereof.
(g) COMPLIANCE WITH LAWS AND ENVIRONMENTAL MATTERS.
(i) The Participants acknowledge and agree that
Savannah, as Agent, shall plan, design, license, procure,
construct, acquire, complete, test, startup, manage, control,
operate, maintain, add to, renew, modify, replace and dispose
of the Plant McIntosh CT Project substantially in accordance
with all local, state and federal laws, regulations,
ordinances or orders now or hereinafter in effect; provided,
however, that any failure to substantially comply with such
local, state or federal laws, regulations, ordinances or
orders shall not be deemed a breach of this Operating
Agreement if, and so long as, such failure is (A) caused by a
Force Majeure Event, or (B) in accordance with a court order
or decree, or a formal agreement with the regulatory agency
having jurisdiction over the subject matter of noncompliance
or having authority to issue the required approval.
(ii) Each Participant shall be solely responsible for
providing any Allowances required to operate such
Participant's Plant McIntosh CTs in compliance with the Clean
Air Act, as amended, and any regulations and requirements
arising thereunder, at the operating level utilized by such
Participant. "Allowance" shall have the meaning set forth in
Title IV of the Clean Air Act. Savannah, as Agent, shall
develop procedures mutually agreeable to the Participants for
determining the volume of the emissions attributable to each
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Participant for the purpose of determining the Allowances
required of each Participant. Each Participant shall provide
information reasonably satisfactory to the Agent that such
Allowances are or will be available in order to operate such
Participant's Plant McIntosh CTs at the actual and anticipated
levels of operation.
Each Participant, in addition to the Agent, shall be a
permittee for any air quality permit(s) issued for such
Participant's Plant McIntosh CTs by a Governmental Authority
if such Governmental Authority determines that the
Participants are required to be joint permittees.
(iii) The Agent shall not use, treat, store, dispose, or
recycle at the Plant McIntosh CT Project any Environmental
Material (as hereinafter defined) in amounts or under
circumstances requiring notification of, or a permit, license,
or approval from, any Governmental Authority of competent
jurisdiction unless such Environmental Material was generated
at the Plant McIntosh CT Project or related to the generation
of electric power at the Plant McIntosh CT Project. For
purposes of this subsection (iii) of Section 6(g),
"Environmental Material" shall mean and include asbestos,
radioactive material, petroleum, petroleum products, petroleum
fractions, petroleum distillates, and any substance, material
or waste designated as hazardous under the Comprehensive
Environmental Response, Compensation, and Liability Act and
amendments thereto, or designated as toxic or hazardous or
otherwise regulated under the Toxic Substances Control Act and
amendments thereto, the Resource Conservation and Recovery Act
and amendments thereto, the Clean Water Act and amendments
thereto, the Clean Air Act and amendments thereto, the Georgia
Air Quality Act and amendments thereto, the Georgia Hazardous
Waste Management Act and amendments thereto, or the Georgia
Water Quality Control Act and amendments thereto.
(h) SAFETY. The Participants acknowledge and agree that in
the management, control, operation, maintenance, renewal,
addition, replacement, modification or disposal of the Plant
McIntosh CT Project pursuant to this Agreement, Savannah shall at
all times take all reasonable precautions for the safety of
employees on the work site and of the public, and shall comply
with all applicable provisions of federal, state, and municipal
safety laws and building and construction codes, including,
without limitation, all regulations of the Occupational Safety
and Health Administration. The requirements of this paragraph
shall be for the sole benefit of the Participants only and shall
not create or impose any standard of care or duty to any third
party or to any employee or subcontractor's employee or to the
public, beyond the duty incumbent upon Savannah which would exist
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under applicable law without reference to any term or provision
of this Agreement.
(i) MANAGEMENT AND OPERATING AUDITS. Each Participant shall
have the right from time to time to conduct management and
operating audits, at its own cost, of Savannah's performance as
Agent hereunder, either by its own officers and employees or
through its duly authorized agents or representatives. Savannah
shall cooperate with each Participant in the conducting of any
such audit and, subject to the applicable regulations of any
Governmental Authority having jurisdiction, give each Participant
reasonable access to all contracts, records, and other documents
relating to the Plant McIntosh CTs (other than the Savannah Plant
McIntosh CTs), the CT Common Facilities, the CT Fuel Supply or
any combination thereof.
(j) ON-SITE OBSERVATION AND INSPECTION.
(i) Each Participant shall be entitled to have a
reasonable number of Site Representatives at the Plant
McIntosh CT Project, on a full or part time basis (whether on
site or off site), as determined by the Participant.
Reasonable office space and facilities shall be made available
to such Site Representatives and the Participant represented
by such Site Representatives shall be solely responsible for
the Operating Costs and Cost of Construction, if construction
of such office space is required, for such office space.
Each Site Representative shall have the right to review
expenditures, audit records, inspect equipment, advise on
repairs required for equipment, review the progress of
outages, review maintenance and operating practices and
otherwise observe all activities respecting the Plant McIntosh
CTs (other than the Savannah Plant McIntosh CTs), the CT
Common Facilities and the CT Fuel Supply.
(ii) Each Participant shall also be entitled to have its
employees and other authorized representatives, including,
without limitation, outside consultants, visit the Plant
McIntosh CT Project site at reasonable times to observe and
inspect the Plant McIntosh CTs (other than the Savannah Plant
McIntosh CTs), the CT Common Facilities and the CT Fuel Supply
and the activities by Savannah, as Agent; provided, however,
that such employees and representatives shall be subject to,
and required to conduct themselves in accordance with, the
directives of Savannah's senior site official to the end that
their on-site activities shall not interfere with Savannah's
performance of its obligations as Agent hereunder and under
the Ownership Agreement.
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(k) PLANT TOURS. Upon prior approval of Savannah (which
approval shall not be unreasonably withheld), any Participant may
schedule plant tours and visits (for individuals other than the
Site Representatives) at the Plant McIntosh CT Project, subject
to the rules and regulations of Governmental Authorities.
7. ASSIGNMENT AND TERMINATION.
(a) LIMITATION ON ASSIGNABILITY. If, pursuant to the
Ownership Agreement, any Participant makes a sale, transfer or
assignment of all or any portion of its ownership or leasehold
interests in the Plant McIntosh CT Project (other than solely as
security for indebtedness or to facilitate the financing of
pollution control or solid waste disposal facilities), such
Participant shall also assign this Agreement pro tanto, and shall
cause the transferee to assume to the same extent the rights and
obligations of such Participant hereunder; provided, however,
that Savannah shall not assign its responsibilities as Agent
hereunder without the prior written approval of the Participants
which shall not be unreasonably withheld. No other assignment of
this Agreement shall be made except in connection with a sale,
transfer or assignment of the assignor's interest in the Plant
McIntosh CT Project pursuant to the Ownership Agreement. Any
attempted or purported assignment of this Agreement not in
compliance with this Section 7(a) shall be null and void and of
no force or effect whatsoever.
(b) TERM. Subject to the provisions of Section 8,
CONDITIONS PRECEDENT TO EXECUTION AND DELIVERY, and Section 9,
CONDITIONS PRECEDENT TO CLOSING, of the Ownership Agreement, this
Agreement shall become effective upon the Execution and Delivery
of the Lease pursuant to Section 4(c), EXECUTION AND DELIVERY, of
the Ownership Agreement and shall remain in effect until final
retirement and decommissioning of the Plant McIntosh CT Project.
Upon termination of this Agreement in connection with the
retirement and decommissioning of the Plant McIntosh CT Project,
Savannah, as Agent, shall retain such powers hereunder as shall
be necessary in connection with the decommissioning of the
property included in the Plant McIntosh CT Project at the time of
such termination, and the respective rights and obligations of
the Participants hereunder shall continue with respect to any
action taken hereunder in connection with such decommissioning,
and for all necessary expenses incurred in connection with such
decommissioning.
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8. GENERAL.
(a) GOVERNING LAW. The validity, interpretation and
performance of this Agreement and each of its provisions shall be
governed by the laws of the State of Georgia.
(b) NO DELAY. No disagreement or dispute of any kind
between or among any of the Participants concerning any matter,
including, without limitation, the amount of any payment due from
any Participant or the correctness of any charge made to any
Participant, shall permit such Participant to delay or withhold
any payment pursuant to this Agreement.
(c) NOTICE.
(i) Except as otherwise provided in Sections 5(i),
OPERATING ACCOUNT, and 5(k), CAPITAL ACCOUNT, hereof, any
notice, request, consent or other communication permitted or
required by this Agreement shall be in writing. All notices
pertaining to or affecting the provisions of this Agreement
shall be deemed given when deposited in the United States Mail
and sent by registered or certified mail to the Parties at the
following addresses:
GPC:
Georgia Power Company
333 Piedmont Avenue
Atlanta, Georgia 30308
Attention: Senior Vice President - Bulk Power Markets
Telephone Number: (404) 526-6599
Telecopy Number: (404) 526-7407
Savannah (in its capacity as a Participant and as Agent):
Savannah Electric and Power Company
600 East Bay Street
Savannah, Georgia 31402
Attention: Vice President - Operations
Telephone Number: (912) 238-2250
Telecopy Number: (912) 944-1378
(ii) Any Party shall be entitled to specify a different
officer or address upon notice in writing to the other
Parties.
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(d) SECTION HEADINGS NOT TO AFFECT MEANING. The descriptive
headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall in no way
modify or restrict any of the terms or provisions hereof.
(e) NO PARTNERSHIP. Notwithstanding any provision of this
Agreement, none of the Parties intend to create hereby any joint
venture, partnership, association taxable as a corporation, or
other entity for the conduct of any business for profit either
among themselves or with any one or more of the Participants.
(f) AMENDMENTS. This Agreement may be amended by and only
by a written instrument duly executed by each of the Parties.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of and be binding upon each of the Parties and their
respective successors and upon their assigns pursuant to the
provisions of Section 7(a), LIMITATION ON ASSIGNABILITY, hereof.
Nothing in this Agreement, express or implied, is intended to
confer upon any other person any rights or remedies hereunder,
except that any transferee of an ownership or an ownership and
leasehold interest in the Plant McIntosh CT Project or any
portion or portions thereof, from any Participant in accordance
with the Ownership Agreement and pursuant to an agreement under
which the other Participants have been made third-party
beneficiaries of such transferee's obligations thereunder shall
be a third-party beneficiary of such other Participants'
respective obligations hereunder and shall be deemed a
Participant for all purposes of this Agreement.
(h) COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall
be deemed an original but all of which together shall constitute
one and the same instrument.
(i) TIME IS OF THE ESSENCE. Time is of the essence of this
Agreement.
(j) FURTHER ASSURANCES. From time to time after the date
hereof, each Party will execute and deliver such instruments of
conveyance and other documents, upon the request of another
Party, as may be necessary or appropriate to carry out the intent
of this Agreement.
(k) COMPUTATION OF PERCENTAGE UNDIVIDED OWNERSHIP INTEREST.
Notwithstanding any other provision of this Agreement, whenever,
pursuant to any provision of this Agreement, any action is
required to be agreed to or taken by any one or more of the
Participants hereunder (other than any action to be taken by
Savannah in its capacity as Agent hereunder), (i) only those
Participants not in default in the payment of any amounts
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(together with interest, if appropriate) required under any
provisions of this Agreement or the Ownership Agreement at the
time such action is to be agreed to or taken shall have the right
to participate in such agreement or the taking of such action,
and (ii) the computation of the aggregate Pro Forma Ownership
Interests in the Plant McIntosh CT Project of the Participants
agreeing to or taking any such actions shall be based solely upon
the Pro Forma Ownership Interests in the Plant McIntosh CT
Project of the Participants not so in default.
(l) SUCCESSOR AGENT. In the event that Savannah (or any
successor Agent) is removed as Agent for the Participants
hereunder or under the Ownership Agreement, or in the event that
Savannah (with prior written approval from the Participants which
approval shall not be unreasonably withheld) assigns its
responsibilities as Agent, any successor Agent for the
Participants as contemplated hereby shall exercise all of the
rights and powers and shall be subject to all of the duties and
obligations of Savannah, as Agent, hereunder or under the
Ownership Agreement and shall be subject to removal by the
Participants in the same manner as Savannah, and Savannah shall
take all action and execute (and file where appropriate) all
documents and instruments which shall be reasonably requested by
the successor Agent to effect the transfer to such replacement or
successor Agent of such rights, powers, duties and obligations,
including, but not limited to, taking such actions and executing
such documents and instruments necessary to enable the successor
Agent to operate and maintain those facilities and equipment of
Plant McIntosh owned by Savannah which provide support services
to the Plant McIntosh CT Project.
(m) SEVERAL AGREEMENTS. The agreements and obligations of
the Participants set forth in this Agreement shall be the
several, and not joint, agreements and obligations of the
Participants.
(n) SPECIAL PROVISIONS RELATING TO THE CT COMMON FACILITIES.
(i) The CT Common Facilities shall be used for the
mutual benefit and enjoyment of the Participants and in such a
manner as will not unreasonably interfere with the use,
benefit and enjoyment of any Participant. No area of the CT
Common Facilities may be used exclusively by less than all the
Participants without the approval of all Participants;
provided, however, that if such use is essential to the
operation of any of the Plant McIntosh CTs, such approval will
not be unreasonably withheld.
(ii) For purposes of the various provisions of this
Agreement and of the Ownership Agreement permitting or
requiring the vote, consent, concurrence or approval of the
- 42 -
Participants owning a designated percentage undivided
ownership interest in the Plant McIntosh CT Project, the Plant
McIntosh CTs or CT Common Facilities, a Participant's
percentage undivided ownership interest in the Plant McIntosh
CT Project, the Plant McIntosh CTs or the CT Common Facilities
at any particular time shall be deemed to be equivalent to
that Participant's Pro Forma Ownership Interest at such time.
(o) CONSTRUCTION OF "INCLUDING". Wherever the term
"including" is used in this Agreement such term shall not be
construed as limiting the generality of any statement, clause,
phrase or term and shall not be deemed to exclude any person or
thing otherwise within the meaning of the statement, clause,
phrase or term which it modifies.
(p) EQUAL EMPLOYMENT OPPORTUNITY AND CIVIL RIGHTS.
Savannah, as Agent, shall conform to the requirements of the
Equal Employment Opportunity clause in Section 202, Paragraphs 1
through 7 of Executive Order 11246, as amended, and applicable
portions of Executive Orders 11701 and 11758, relative to Equal
Employment Opportunity and the Implementing Rules and Regulations
of the Office of Federal Contract Compliance Programs.
(q) THE PLANT MCINTOSH CT UNITS. In the event that at any
time the same party shall not serve as Agent with respect to all
the Plant McIntosh CTs, the Participants mutually agree (and
agree to exercise their reasonable best efforts to obtain the
agreement of any other Agent), if any or more than one of them is
an Agent with respect to any of the Plant McIntosh CTs, to
exercise the rights, powers, duties and obligations of an Agent
hereunder and under the Ownership Agreement in such a manner as
will not unreasonably interfere with the rights of any
Participant under this Agreement or the Ownership Agreement.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the Parties hereto have duly executed this
Agreement under seal as of the date first above written.
Signed, sealed and GEORGIA POWER COMPANY, as a
delivered in the Participant
presence of:
By:_________________________
_____________________________
Attest:_____________________
_____________________________
Notary Public (CORPORATE SEAL)
Signed, sealed and SAVANNAH ELECTRIC AND POWER
delivered in the COMPANY, as Agent and as a
presence of: Participant
By:__________________________
_____________________________
Attest:______________________
_____________________________
Notary Public (CORPORATE SEAL)
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