Common use of Cost Recovery Protection Clause in Contracts

Cost Recovery Protection. Pursuant to this Agreement, AEP and Customer will cooperate regarding the planning, provision and utilization of transmission and local delivery facilities needed to reliably deliver power and energy to Customer’s loads connected to AEP’s facilities. As such, AEP may be required to construct or otherwise expand transmission and local delivery facilities, predicated upon Customer’s planned use of such facilities, including the Customer's planned use of external and internal generating capacity. If the Customer alters its use of the transmission and/or local delivery service facilities, through the transfer of load to the system of another service provider, AEP shall be entitled to compensation for “Stranded Costs” to the extent such load transfer causes AEP’s revenues to be reduced. Any such claim for Stranded Costs by AEP shall be net of the present value of any incremental transmission revenue that AEP will receive by providing transmission or local delivery service to other customers using the transmission or local delivery capacity freed up by the Customer's load change.