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EXHIBIT 10.39
ADMINISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT, effective as of the 1st day of January, 1992, by and
between Northern States Power Company, a Minnesota corporation
(hereinafter called "NSP"), and NRG THERMAL CORPORATION, a Minnesota
corporation (hereinafter called "Thermal") supersedes and replaces the
Administrative Services Agreement dated January 1, 1985, between NSP and
NORENCO Corporation, Thermal's predecessor in interest, which had been
previously approved by the Minnesota Public Utilities Commission ("MPUC")
pursuant to its Order dated March 18, 1986 in Docket No. E-002/M-86-21.
WITNESSETH:
WHEREAS, Thermal is a wholly-owned subsidiary of NRG Group, Inc., a
wholly-owned subsidiary of NSP, and is authorized to engage in general
non-utility business activities including, but not limited to, the design,
construction, ownership and operation of steam transmission and supply
facilities; and
WHEREAS, Thermal needs from time to time to retain the services of
certain NSP employees; and
WHEREAS, NSP is ready and willing to provide and assign
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such employees to Thermal if and when NSP determines such employees are
available; and
WHEREAS, the parties desire to enter into an agreement to provide for
the rendering of and charging for certain services by each party to the other
party, which services are not provided for in any other agreement between the
parties; and
WHEREAS, it is the intent of the parties that each party recover from
the other party any administrative and general costs actually incurred by one
party on behalf of the other party.
NOW THEREFORE, the parties agree as follows:
ARTICLE I
PERSONNEL ASSIGNED
1.01 If available and upon request, NSP agrees to provide and
assign certain NSP employees to Thermal. Determination of availability of such
employees shall be at NSP's sole discretion. The NSP employees assigned to
Thermal are specified in attached Appendix A which is incorporated by reference.
Appendix A will be updated and amended from time to time by the mutual agreement
of the parties.
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ARTICLE II
SERVICES RENDERED
2.01 If available and upon request or ratification, each party
will, at its cost, render management, supervisory, construction, engineering,
accounting, legal, financial and other similar services to the other party.
ARTICLE III
CHARGES
3.01 The charges to be billed and paid under this Agreement shall
consist of actual costs for labor, transportation and employee expenses,
materials and supplies and other expenses. These expenses are defined in
attached Appendix B which is incorporated by reference. Thermal shall be charged
according to the procedures specified in this Article III and in the attached
Appendix C which is incorporated by reference.
When one party renders services for which the other party is
proportionately chargeable, the party receiving the services shall pay the
proportional actual costs of the services.
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Bills shall be rendered by the 20th of the month following the
month in which the costs were incurred. Each month's xxxx shall be increased by
1% to cover handling costs, working capital requirements and miscellaneous
costs. Bills shall be paid no later than 10 days following the date of the
rendered xxxx.
Interest shall accrue on payments which are overdue at the daily
commercial prime rate in effect at the Norwest Bank of Minnesota, N.A. from the
date that interest first accrues through the date of payment.
ARTICLE IV
REGULATION
4.01 This Agreement is subject to the review of any regulatory
body which has jurisdiction.
ARTICLE V
ASSIGNMENT
5.01 This Agreement shall not be assigned by either party
without first obtaining the written consent to the assignment from the other
party.
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ARTICLE VI
TERM
6.01 This Agreement shall continue in effect unless cancelled by
either party upon sixty (60) days prior written notice to the other party or by
mutual agreement of the parties.
ARTICLE VII
GOVERNING LAW
7.01 This Agreement shall be construed in accordance with and be
governed by the laws of the State of Minnesota.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
their respective corporate names by their respective duty authorized officers on
the day and year below written.
NRG THERMAL CORPORATION NORTHERN STATES POWER COMPANY
By Xxxxxx X. Will By Xxxxx X. Daudiet
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Xxxxxx X. Will Xxxxx X. Daudiet
Executive Vice President - Finance
Its President and CEO Its and Chief Financial Officer
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Date February 24, 1992 Date February 24, 1992
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APPENDIX A
NSP PERSONNEL ASSIGNED
January 1, 1992
NRG THERMAL CORPORATION
None
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APPENDIX B
COMPONENTS OF ACTUAL COSTS
Labor
Charges for engineering services shall be for time charged at an agreed upon
billing rate by classification of employee. The billing rate shall include an
average salary, by employee classification, plus engineering and supervision
costs and indirect labor costs. The engineering services billing rates shall be
reviewed and adjusted annually and at other times as necessary.
Labor costs for all services, other than engineering services, shall be for
the time charged at actual salary and wage rates paid to employees plus indirect
labor costs.
Indirect labor costs shall consist of non-productive labor costs (e.g.,
vacation, sickness and holidays) and other employee benefit costs (e.g., major
medical, pension and life insurance).
Transportation and Employee Expenses
Transportation costs charged to either party shall be for actual miles or
hours used.
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Employee expenses shall consist of meals, lodging, transportation and other
miscellaneous costs incurred by and reimbursable to employees when rendering
services to the receiving party.
Materials and Supplies
The cost of materials and supplies charged to either party shall be actual
costs plus purchasing and warehousing expenses and shipping expense.
Other Expenses
Costs included in the "other expenses" category shall include communication
services, accounting, printing, postage, permits, and other miscellaneous costs
directly attributable to work performed for the other party. Other Expenses also
shall include miscellaneous proratable operating expenses, such as invoiced
services, computer services, engineering, construction, research, testing lab,
etc.
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APPENDIX C
ACCOUNTING AND CHARGING PROCEDURES
Expenses as set forth below may be charged directly or through special work
orders. Special work orders are issued to record costs for functions which are
not assignable solely to either party. These work order costs shall be prorated
on a proper ratio reflecting the benefit to the respective parties. Whenever a
new work order is initiated involving costs that are assignable to both parties,
it shall be approved by the appropriate officer or department head of each
party. Work orders and applicable prorates shall be reviewed and revised as
needed, and at least annually.
LABOR
Employees of one party may charge time to the other party on either a fixed
payroll distribution basis or on an exception basis. Employees of one party
charging time to the other party on a fixed payroll distribution basis should
not charge time on an exception basis to the other party unless the
service performed was not contemplated in determining the fixed payroll
distribution.
Employees of one party who engage in work solely or primarily for the
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benefit of the other party on a regular basis, may charge their time on a fixed
payroll distribution basis, based upon a time analysis. The hours charged shall
be subject to review whenever the employee's duties change, whenever the
function of the department changes, and on an annual basis.
The party receiving charges for time should be advised of the name of the
employee (or in the case of engineering services the classification of the
employee), the service he or she performs and the percent of time engaged in
work for the other party. These charges will be subject to review and
approval by the department head or an officer of the party receiving those
charges.
Exception time charges must be reviewed and approved by the department head
from which the service originates. Exception time charges received from one
party also will be subject to review and approval by the department head or an
officer of the receiving party.
Charges for time from employees on bi-weekly and weekly payrolls should be
handled in the same manner as described above.
Transportation and Employee Expenses
Transportation shall be recorded on transportation sheets for the actual
miles or hours used for the benefit of the receiving company. The miles or
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hours used shall be charged at prevailing rates.
Employee expenses shall be charged on the basis of expenses submitted for
reimbursement by employees and approved by the appropriate department head or
officer.
Materials and Supplies
Materials and supplies provided by one party for the benefit of the other
party shall be received by and charged upon the basis of requisition orders.
Other Expenses
Approved copies of invoices for materials or services or other appropriate
documentation shall provide the accounting basis for these charges.
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