Proprietary and Confidential
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Exhibit 10.1
SERVICES AGREEMENT
between
PECO ENERGY COMPANY
and
GREAT BAY POWER CORPORATION
This Services Agreement (the "Agreement") between PECO Energy
Company, a Pennsylvania corporation, ("PECO"), and Great Bay
Power Corporation, a New Hampshire corporation, ("Great Bay") is
made and dated this third day of November, 1995. PECO and Great
Bay may be referred to individually as a "Party" and
collectively as the "Parties."
WHEREAS, Great Bay has an approximately twelve percent (12%)
ownership interest in the Seabrook 1 Nuclear Power Plant
("Seabrook"), which generates approximately 140 MW of capacity
and energy;
WHEREAS, Great Bay desires that PECO serve as Great Bay's agent
in arranging for the sale to third parties of capacity and
energy owned by Great Bay which is not presently committed, as
provided herein;
WHEREAS, PECO desires to act as Great Bay's agent to arrange for
the sale of such capacity and energy subject to the terms and
conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Parties hereto, intending to be legally bound hereby, do hereby
agree as follows:
SECTION 1: Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
"Additional Power Amount" shall mean capacity and/or energy or
agreements to acquire capacity and/or energy that meet the
following criteria: (i) it originates from generating facilities within the
states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, or
Vermont; (ii) the cost to PECO to acquire such capacity and/or energy net
of all Transmission Costs and Ancillary Services Costs, determined in
accordance with the terms and conditions of the purchase agreement pursuant
to which
Proprietary and Confidential
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
such power was acquired, would be $*****/MWh or less; and (iii)
the term of the purchase of such capacity and/or energy would be
one year or longer.
"Additional Seabrook Capacity" shall mean (i) Seabrook capacity
purchased by Great Bay other than Great Bay's existing 12.1324%
ownership in Seabrook, and (ii) as mutually agreed to by the Parties in
writing, capacity purchased by Great Bay at nuclear facilities other than
Seabrook which have substantially the same pressurized water reactor design,
historical operating performance, and operating costs as Seabrook.
"Agreement" shall mean this Services Agreement, and all of the
attachments hereto, as the same may be amended in accordance
with the terms hereof.
"Ancillary Services" shall mean generation capacity and/or
energy, or control area services, which are purchased to
maintain reliable delivery of Transactions within or between control areas,
including but not limited to, reactive power support, spinning reserve, load
following, and transmission line losses (if not included with Transmission).
"Ancillary Services Costs" shall mean all costs incurred in
connection with the purchase of Ancillary Services.
"Annual Hours" shall mean 8760 for any full calendar year other
than 1996 in which the Agreement is in effect; and shall equal,
for any partial calendar year, other than 1996, in which the
Agreement is in effect, the product of (i) 8760 and (ii) a
fraction, the numerator of which is the number of days during
the applicable calendar year in which the Agreement is in effect
and the denominator of which is 365. During 1996, Annual Hours
shall equal the product of (i) 8784 and (ii) a fraction, the
numerator of which is the number of days from the Service
Commencement Date through December 31, 1996, and the denominator
of which is 366.
"Annual True-Up Amount" shall mean the amount to be paid by
PECO to Great Bay, subject to the terms of Section 9, for
underpayment to Great Bay of the share of Net Sales Revenue due
to Great Bay during the previous calendar year, as calculated
pursuant to Section 9(b) and Attachment l to the Agreement.
"Back-Up Power" shall mean capacity and/or energy delivered to
Customers during periods in which the Initial Power Amount is
partially or totally unavailable.
"Customer" shall mean any party that purchases or utilizes any
portion of the Initial Power Amount.
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"Delinquent Amounts" shall mean, for any month, the amount of
Gross Receipts receivable from Customers which are not collected
by the fourteenth (14th) day of the immediately following month.
"Enabling Agreements" shall mean agreements between Great Bay
and third parties which, upon execution by Great Bay and such
parties, enable PECO to arrange for the direct sale of the
Initial Power Amount to such parties.
"Firm Energy Performance Payment" shall mean the amount payable
by PECO to Great Bay for PECO's failure to achieve the Winter
1996 Firm Sales Target, and shall be calculated according to the
terms of Section 8.
"Firm Energy Transaction" shall mean a Transaction (i) in which
energy is guaranteed to be available for a period of time or may
be called by the Customer during agreed-upon periods, and (ii)
requires that energy delivery not be interrupted for reasons of
economy or unit outage during periods in which delivery is guaranteed.
"Great Bay" shall mean Great Bay Power Corporation.
"Gross Receipts" shall mean all dollar amounts receivable from
all Transactions during a relevant period.
"Half-Year True-Up Amount" shall mean the amount to be paid by PECO to
Great Bay each July during the term of the Agreement, subject to the
terms of Section 9, for underpayment to Great Bay of the share of Net
Sales Revenues payable to Great Bay during January through June of each
applicable calendar year, as calculated pursuant to Section 9(a) and
Attachment l to the Agreement.
"Initial Power Amount" shall mean the approximately 140 MW of Seabrook
capacity and associated energy generated by Great Bay's 12.1324% ownership
of Seabrook, less capacity and associated energy committed under the
contractual agreements listed in Attachment 2 hereto.
"MW" shall mean megawatts of capacity.
"MWh" shall mean megawatthour(s) of energy.
"NEPEX" shall mean the Northeast Power Exchange, or its successor entity.
"NEPOOL" shall mean the New England Power Pool, or its successor entity.
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"Net Power" shall mean the MWh produced by Seabrook, less station service
expressed in MWh, as reported by Seabrook's operators in the Seabrook
Station Status Report, or any successor report thereto.
"Net Sales Revenues" shall mean, for the relevant period, the
difference between (i) the sum of Gross Receipts and Reservation
Fees and (ii) the sum of Transmission Costs and Ancillary
Services Costs.
"Non-Seabrook Power" shall mean capacity and/or energy purchased by Great Bay
which is neither an Additional Power Amount nor Additional Seabrook Capacity.
"On-Peak Periods" shall mean Monday through Saturday from the hour ending
0700 through the hour ending 2200, unless otherwise mutually agreed between
PECO and Great Bay.
"Other NEPOOL Supply" shall mean capacity and/or energy purchased or
callable by PECO, other than an Additional Power Amount, which Great Bay
elects not to participate in with PECO, which originates from generating
facilities within Connecticut, Maine, Massachusetts, New Hampshire,
Rhode Island, or Vermont.
"Outage" shall mean a period in which Seabrook does not generate energy.
"PECO" shall mean PECO Energy Company.
"Real Time Information" shall mean information which is made
available on a periodic or real-time basis to Seabrook owners or
NEPOOL members relating to (i) Seabrook availability and
production level and (ii) NEPEX operating conditions; the
availability, production level, and cost of NEPEX-dispatched
generating units; and the availability, flows, and constraints
on transmission systems owned by NEPOOL members.
"Reservation Fee" shall mean the fee payable by PECO to Great Bay for the
right to arrange for the sale of the Initial Power Amount, as defined in
Section 6(a) herein.
"Reservation Fee Rebate" shall mean the amount, if any, PECO is owed for
overpayment of Reservation Fees, as determined under Section 9(c) herein.
"Seabrook" shall mean the Seabrook l Nuclear Power Project in
Seabrook, New Hampshire.
"Seabrook Capacity Factor" shall mean the actual operating performance
of Seabrook, as determined under Section 9(c).
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"Seabrook Station Rated Capacity" shall mean the capability rating for
Seabrook as determined by the NEPOOL operations committee pursuant to
the NEPOOL Agreement at the beginning of each NEPOOL summer and winter
capability period.
"Seabrook Station Status Report" shall mean the daily report published by
Seabrook's operator reporting gross energy production, station load
consumption, and average net power produced by Seabrook, or any successor
report containing the same or substantially similar information.
"Service Commencement Date" shall mean the latest of (i) the return to
service of Seabrook from the refueling outage presently scheduled to
commence on or about November 5, l995, (ii) the date upon which the
termination of the Marketing Agent Agreement, dated April 26, 1993
between Great Bay and UNITIL, becomes effective, as determined by Great
Bay, and (iii) the completion of data links and receipt of authorizations
to enable PECO to receive Real Time Information on an ongoing basis.
"Service Fee" shall mean the portion of Net Sales Revenues payable to PECO
as compensation for services provided by PECO to Great Bay, as calculated
pursuant to Section 6(b) herein.
"Spot Market Performance Payment" means the amounts payable by PECO to
Great Bay as calculated pursuant to Section 8(c).
"Termination True-Up Amount" shall mean the amount to be paid by PECO to
Great Bay upon termination of the Agreement pursuant to Section 16 for
underpayment to Great Bay of the share of Net Sales Revenues payable
to Great Bay, as calculated pursuant to Section 16(c) and Attachment l
to the Agreement.
"Transaction" shall mean a sale or utilization of all or any portion of
the Initial Power Amount pursuant to the terms of the Agreement arranged
by PECO to a Customer.
"Transmission" shall mean the right to utilize, or the actual use of,
transmission and/or distribution systems, as defined by the Federal
Energy Regulatory Commission, to deliver the Initial Power Amount to
points of delivery agreed upon with Customers.
"Transmission Costs" shall mean the cost of Transmission, including
payments to reserve transmission capacity and adder payments to
transmission providers for actual transmission usage and/or
transmission line losses.
"UNITlL" shall mean the UNITIL Corporation and its affiliates
and subsidiaries.
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"Warrant" shall mean the warrant purchased by PECO under the Warrant
Purchase Agreement, the execution of which shall occur at the same
time as execution of this Agreement.
"Warrant Expiration Date" shall mean the earliest of the following to
occur: (i) September 30, 1996, if Seabrook Capacity Factor for the
period from the Service Commencement Date through September 15, 1996 is
equal to or greater than 60%; (ii) December 3l, l996, if Seabrook Capacity
Factor for the period from the Service Commencement Date through December 15,
1996 is equal to or greater than 60%; (iii) two (2) business days following
the first date after December 31, 1996 upon which Seabrook Capacity Factor
for the immediately preceding twelve months is equal to or greater than
60%; or (4) December 3l, 1997.
"Warrant Purchase Agreement" shall mean the agreement which the Parties
enter into concurrently with this Agreement, pursuant to which PECO shall
purchase a Warrant which, upon exercise, shall enable PECO to purchase
a 4.99% ownership of Great Bay common stock.
"Warrant Shares" shall mean the shares of Great Bay common stock which
PECO shall have the right to purchase pursuant to the Warrant Purchase
Agreement.
"Winter 1995 Sales Price" shall mean the average price received by Great
Bay during the Winter 1995 period for the sales of capacity and/or energy
owned by Great Bay identified in Attachment 3, as calculated pursuant
to Section 8.
"Winter 1996 Firm Sales Target" shall mean the product of (i) twenty-five
percent (25%), (ii) the Initial Power Amount and (iii) the number of
hours in the Winter 1996 Period.
"Winter 1996 Sales Price" shall mean the average sales price received by
Great Bay for Transactions during the Winter 1996 Sales Period, as
calculated pursuant to Section 8.
"Winter 1996 Sales Period" shall mean the period commencing on the later of
(i) January 1, 1996 and (ii) the Service Commencement Date, and concluding
on March 31, 1996.
SECTION 2. Term of the Agreement.
a. Initial Term. The Agreement shall be effective upon execution, and
subject to subparagraph (b), shall terminate on December 31, 1997.
Services under the Agreement shall commence upon the Service
Commencement Date.
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b. Extension or Early Termination of the Agreement. If PECO purchases
the Warrant Shares on or before the Warrant Expiration Date, the Agreement
shall terminate on December 31, 1998. If Seabrook Capacity Factor from
the Service Commencement Date through September 15, 1996 exceeds 60% and
PECO does not purchase the Warrant Shares on or before September 30, 1996
for reasons other than Great Bay's failure to satisfy Section 5 of the
Warrant Purchase Agreement, Great Bay shall have the right, but not the
obligation, to terminate the Agreement on December 31, 1996, and shall
notify PECO by October 20, 1996 whether Great Bay so elects to terminate
the Agreement. If the Warrant Expiration Date occurs after September 30,
1996, Great Bay shall inform PECO by the twentieth (20th) day following
the Warrant Expiration Date, if PECO does not purchase the Warrant Shares on
or before the Warrant Expiration Date, whether Great Bay elects to terminate
the Agreement. If Great Bay so elects to terminate, the Agreement shall
terminate on the ninetieth (90th) day following the Warrant Expiration Date.
SECTION 3. General Obligations of Great Bay.
a. Provision of Initial Power Amount. For the term of the Agreement,
Great Bay shall appoint PECO as Great Bay's exclusive agent to arrange for
the sale of the Initial Power Amount. Unless otherwise agreed between the
Parties, Great Bay shall make the Initial Power Amount available to PECO
at Seabrook.
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b. PECO Exclusivity. During the term of the Agreement, Great Bay shall
not: (i) retain a party other than PECO to serve as Great Bay's agent to
sell, or arrange for Transactions utilizing, the Initial Power Amount,
(ii) enter into arrangements with a party other than PECO to provide, in
connection with offers for sale or the actual sale of the Initial Power
Amount, any of the services which PECO shall provide pursuant to Section 4
herein, (iii) enter into an agreement except with PECO for the purchase by
Great Bay, or for the delivery to a Customer, of Back-Up Power with respect
to a Firm Energy Transaction, (iv) engage in any negotiations with a
potential Customer nor make any offers with respect to the terms and
conditions for sale of the Initial Power Amount without PECO's prior written
consent, or (v) enter into an agreement that would cause the Initial Power
Amount to deviate from the amount set forth in Attachment 2 hereto, unless
otherwise agreed to in writing by PECO.
c. Transfer of Title to Initial Power Amount. Great Bay shall retain
title and ownership of the Initial Power Amount unless and until some or
all of such title and/or ownership is transferred to other parties pursuant
to the terms of a Transaction.
d. Provision of Transactional Capabilities. To the extent permissible,
Great Bay shall make available to PECO, for PECO's use in arranging
Transactions, all Real-Time Information; transactional capabilities; and
rights to purchase from, or sell to, NEPEX which are accorded to Great Bay as
a NEPOOL member. In addition, Great Bay shall provide PECO the necessary
authorizations to enable PECO to act as Great Bay's agent for Transactions
or interactions with NEPOOL members, including the right to broker and
schedule Transactions utilizing NX-7 Agreement(s) between Great Bay and
a NEPOOL member(s). Great Bay shall provide to PECO a copy of the Seabrook
Station Status Report, or any successor report thereto, immediately following
Great Bay's receipt thereof.
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e. Notification of Plant Outages. Great Bay shall notify PECO promptly
of any planned Outages upon learning from Seabrook operators that such an
Outage is planned, including the expected nature and duration of such an
Outage. Great Bay shall notify PECO immediately upon learning that any
unplanned Outage or reduction in Seabrook output that has or will occur,
including the expected nature and duration of such an Outage or reduction.
With respect to the Outage presently scheduled to commence on or about
November 5, 1995, Great Bay shall provide PECO notice of Seabrook's
expected return to service not less than five (5) business days prior
to such scheduled in-service date.
SECTION 4. Services Provided by and General Obligations of PECO.
Upon execution of the Agreement, PECO shall provide the following services to
Great Bay:
a. Brokering Services. PECO shall use its reasonable best efforts to
arrange for the sale of the entire Initial Power Amount in one or more
Transactions, provided however, that PECO shall purchase any portion of
the Initial Power Amount not sold in Transactions. PECO shall use the
same care and diligence in arranging Transactions as it uses in the sale of
capacity and/or energy owned by PECO. PECO is authorized and required to
perform all services necessary to arrange Transactions including to exercise
reasonable judgment during the negotiation and scheduling of Transactions.
PECO shall arrange for Transmission and/or Ancillary Services as necessary
under the terms and conditions of each Transaction. At the request of Great
Bay, PECO shall offer for sale or use all or any portion of uncommitted
Initial Power Amount on such terms and conditions as Great Bay shall direct,
provided that the offer for sale is for a term of at least six (6) months
in duration and that Great Bay shall not compel PECO to offer a Firm Energy
Transaction, ("Great Bay Directed Offer"). If PECO, in its sole business
judgment, does not believe that the terms and conditions of a Great Bay
Directed Offer maximize the value of the Initial Power Amount, PECO shall
notify Great Bay in writing of such belief and shall have the right, but not
the obligation, at the time that such a Great Bay Directed Offer is
transmitted to the potential Customer, to exercise its right to terminate
the Agreement pursuant to Section 16(b). PECO shall not complete
arrangements for a Transaction with a duration of one year or more withouT
the prior written consent of Great Bay.
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b. Provision of Firm Supply. In connection with offering any portion of
the Initial Power Amount, PECO shall offer to arrange Firm Energy
Transactions which in its sole business judgment will maximize the value of
the Initial Power Amount; provided, however, that in no event shall Great
Bay have the right to compel PECO to offer for sale a Firm Energy
Transaction. During periods in which the Initial Power Amount is partially
or totally unavailable, PECO shall arrange for the delivery of Back-Up
Power to Customers which have entered into a Firm Energy Transaction
arranged by PECO. Unless otherwise agreed to by the Parties, PECO shall
bear all costs associated with the purchase and transmission of Back-Up Power
and shall retain all revenue received from delivery of Back-Up Power.
Revenue received by PECO for Back-Up Power shall not be included in the
calculation of Gross Receipts under Section 7(a). Great Bay shall have no
obligation to purchase or arrange for Back-Up Power to replace portions of
the Initial Power Amount which cannot be supplied during periods in which
Initial Power Amount is partially or totally unavailable.
c. Bundling of Initial Power Amount. If at any time (i) a portion of the
Initial Power Amount is available but is not committed to a Transaction,
(ii) PECO has Other NEPOOL Supply available for use in a sale, and
(iii) PECO can arrange a sale which could be served with energy from the
Initial Power Amount or the Other NEPOOL Supply, then PECO shall be
obligated to serve each such sale with both the Initial Power Amount and the
Other NEPOOL Supply until the Initial Power Amount is fully utilized.
d. Economic Disincentive. If at any time (i) a portion of the Initial
Power Amount is not committed to a Transaction, (ii) PECO simultaneously
owns uncommitted Other NEPOOL Supply and (iii) PECO would retain more margin
from a pending sale by utilizing such Other NEPOOL Supply than it would
retain by utilizing the uncommitted portion of the Initial Power Amount,
then PECO shall notify Great Bay of such circumstances.
e. Billing. Except as otherwise provided in this Section 4, PECO shall
xxxx Customers for each Transaction and shall collect from them such billed
amounts. PECO shall be responsible for maintaining accurate records of each
Transaction. At either Party's written request, the Parties shall retain a
third party trustee agent to maintain an account into which Gross Receipts
shall be
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paid, and out of which the monthly payment to Great Bay, pursuant to
Section 7(c), and the monthly payment to PECO, pursuant to Section 7(b),
shall be disbursed. The cost of trustee agent services shall be treated as
an Ancillary Service Cost for the purpose of calculating Net Sales Revenues,
up to an annual cost of $36,000. The Party which requests retention of a
trustee agent shall bear costs for trustee agent services in excess of
$36,000 during any calendar year, or portion thereof, in which the
Agreement is in effect.
f. Transaction Administration. PECO shall provide administration services
including scheduling of Transactions with relevant control area
administrators, and filing documentation enabling Transactions with control
areas or power pool administrators, as necessary. PECO shall have the right
to negotiate Enabling Agreements on Great Bay's behalf (such as NX-7
Agreements), which are required by control areas or power pools other than
NEPOOL, although any such agreements would only become effective upon Great
Bay's consent, which consent shall not be unreasonably or untimely withheld.
SECTION 5: Restrictions on Certain PECO Actions.
PECO acknowledges that it is acquiring the Warrant (and if it exercises the
Warrant, will acquire the Warrant Shares) for investment purposes and that
it is not acquiring the Warrant (and if it exercises the Warrant, the
Warrant Shares) with the intent or objective of affecting the management
or control of Great Bay. In furtherance of the foregoing, PECO covenants
that so long as the Agreement is effective, except for a change in control
of Great Bay, in connection with the Warrant Shares it shall not directly
or indirectly, and shall not permit any of its affiliates or associates
(as such terms are defined in Rule l2b-2 promulgated under the Exchange
Act), directly or indirectly, without the prior consent of the board of
directors of Great Bay, to:
a. purchase, acquire or own, or offer or agree to purchase, acquire or
own, any securities of Great Bay or any of its subsidiaries which are
entitled to, or may be entitled to, vote or by the terms thereof are
convertible into or exchangeable for securities which are entitled to vote
(collectively, "Voting Securities"), other than (i) the Warrant Shares;
(ii) securities which may be issued with respect to the Warrant Shares as
a result of any stock splits, dividends, distributions, recapitalizations or
similar events; and (iii) additional Voting Securities provided
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
that the aggregate of all Voting Securities owned by PECO and its
affiliates, after giving effect to any proposed purchase, does not and will
not exceed 9.9% of the total of all of Great Bay's issued and outstanding
Voting Securities at any time;
b. make, or in any way participate in, any "solicitation" of "proxies" or
be a "participant" in an "election contest" or "solicitation" (as such
terms are defined or used in Regulation 14A under the Securities Exchange
Act of 1934, as amended, the "Exchange Act") with respect to Great Bay, or
initiate, propose, communicate with or otherwise solicit stockholders of
Great Bay for the approval of one or more stockholder proposals or induce or
attempt to induce any other person to initiate any stockholder proposal; or
c. form, join, in any way participate in, or encourage the formation of,
a group (as such term is defined in Section 13(d)(3) of the Exchange Act)
with respect to any Voting Securities; or
d. deposit any Voting Securities into a voting trust, or subject any Voting
Securities to any agreement or arrangement with respect to the voting of
any Voting Securities or other agreement having similar effect, except as
provided herein; or
e. except for services to be provided hereunder, otherwise act, alone or in
concert with others, to affect or influence control of the management or the
Board of Directors of Great Bay or its subsidiaries.
SECTION 6. Definition of Fees.
a. Reservation Fee. In consideration for retaining PECO as its exclusive
agent to broker the Initial Power Amount, PECO shall pay to Great Bay a
Reservation Fee of $** per MWh, for each hour or portion thereof, during
which Seabrook generates energy from the Service Commencement Date to the
date of termination of the Agreement. PECO shall not pay a Reservation Fee
for energy associated with a Seabrook Capacity Factor equal to or greater
than 90.0%.
b. Service Fee. In consideration for providing the services specified
above, PECO shall be paid by Great Bay a Service Fee, which during each
calendar year, or portion thereof, in which the Agreement is in effect
equals the product of (i) **%, (ii) Net Sales Revenues,
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and (iii) the lesser of Seabrook Capacity Factor and 85.0%; plus the
product of (i) **%, (ii) Net Sales Revenues, and (iii) the amount by which
Seabrook Capacity Factor is greater than 85.0% and less than 90%. PECO
shall not be paid a Service Fee for the portion of total Net Sales Revenues
associated with a Seabrook Capacity Factor equal to or greater than 90.0%.
SECTION 7. Monthly Payment to Great Bay and PECO.
a. Monthly Statement. Not later than fifteen (15) days following the end
of each calendar month, PECO shall render to Great Bay a monthly statement
detailing for the prior month: (i) Gross Receipts, (ii) Reservation Fee
payments due Great Bay, and (iii) the description and cost of Transmission
and/or Ancillary Services associated with that month's Transactions. PECO
shall provide with each monthly statement the terms and conditions of each
Transaction during the relevant month, unless the terms and conditions of
a Transaction have been provided to Great Bay in a previous Monthly
Statement, and if any Transaction is of the type described in Section 4(c),
PECO shall include in its description the amount and the terms and conditions
upon which PECO's Other NEPOOL Supply was sold as part of the Transaction.
b. Monthly Payment to Great Bay. At the time each monthly statement is
due to Great Bay, PECO shall pay to Great Bay an amount equal to the
product of (i) ********** percent (**%) and (ii) the difference between, for
the prior month, Net Sales Revenues and Delinquent Amounts; plus the product
of (i) ********** percent (**%) and (ii) any Delinquent Amounts collected
during the prior month.
c. Monthly Payment to PECO. At the time each monthly statement is due to
PECO, PECO shall retain from Gross Receipts an amount equal to the product
of (i) *********** percent (**%) and (ii) the difference between, for the
prior month, Net Sales Revenues and Delinquent Amounts; plus the product of
(i) *********** percent (**%) and (ii) any Delinquent Amounts collected
during the prior month.
SECTION 8. Performance Payment to Great Bay.
a. Statement of Winter 1996 Performance.
Coincident with the monthly statement which PECO renders to Great Bay for
Transactions during March 1996, PECO shall render a
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statement detailing (i) the amount of Initial Power Amount sold in Firm
Energy Transactions with durations of at least three months, and (ii) the
Winter 1996 Sales Price. The Winter 1996 Sales Price shall equal the
quotient of (i) Net Sales Revenues Due to Great Bay for the Winter 1996
Period divided by (ii) the amount of Initial Power Amount energy
(expressed in MWhs) delivered in Transactions.
b. Performance Standard. Except as provided in Section 8(d), if (i) PECO
has not arranged for the sale of a total of at least twenty-five percent
(25%) of the Initial Power Amount in Firm Energy Transactions of at least
three months in duration, or (ii) the Winter 1996 Sales Price is less than
the Winter 1995 Sales Price, then PECO shall pay to Great Bay the lesser of
(i) the Firm Energy Performance Payment and (ii) the Spot Market Performance
Payment. For purposes of determining the Winter 1996 Firm Sales Target,
any Firm Energy Transaction of at least three months in duration which
(i) PECO has completed contractual negotiations for but which Great Bay,
pursuant to Section 4(a) elects not to enter into, or (ii) has been
contracted for but which has not become effective due to any action or
inaction of the Federal Energy Regulatory Commission or any state or local
regulatory body with competent jurisdiction, shall be deemed to have been
arranged by PECO and shall be included in the calculation of the 1996 Firm
Sales Target. The Winter 1995 Sales Price shall equal, for the Winter
1995 Period, the quotient of (i) net sales revenues actually paid to Great
Bay for the Winter 1995 Period and (ii) the amount of MWh sold by Great Bay
to third parties during the Winter 1995 Period, other than the amount of
MWh purchased from Great Bay by UNITIL pursuant to the UNITIL Power Purchase
Agreement, dated April 16, 1993. If during the Winter 1996 Period there
are no Firm Energy Transactions, or PECO is excused from paying a Firm
Energy Performance Payment pursuant to Section 7(d), PECO shall pay to
Great Bay the Spot Market Payment, if any.
c. Calculation of Payments. The Firm Energy Performance Payment shall be
in an amount equal to the product of (i) the difference between the Winter
1996 Firm Sales Target and the amount of MWh proposed to be sold by PECO,
or actually sold, in Firm Energy Transactions of three months or longer
during the Winter 1996 Period, and (ii) the average sales price for Firm
Energy Transactions of three months or longer. The Spot Market Performance
Payment shall be an amount equal to the
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product of: (i) the difference between the Winter 1996 Sales Price and
the Winter 1995 Sales Price, and (ii) the amount of energy, expressed in
MWh sold in Transactions during the Winter 1996 Period.
d. Payments Excused. PECO's obligation to pay a Firm Energy Performance
Payment (but not the Spot Market Performance Payment) shall be excused in
the event that Great Bay, for any reason, does not enter into those Enabling
Agreements required by PECO to satisfy the Winter 1996 Firm Sales Target.
In addition, PECO's obligation to pay a Spot Market Performance Payment shall
be excused in the event that (i) Great Bay and PECO mutually agree in
writing that the value of the Initial Power Amount may be maximized through
on-peak spot market transactions and (ii) Seabrook Capacity Factor during
such On-Peak Periods is below 80%.
SECTION 9. Bi-Annual Revenue Sharing True Up.
a. Half Year True-Up. Not later than fifteen (15) business days following
June 30th of each calendar year during the Agreement term, PECO shall
determine the Half Year True-Up Amount based on actual Seabrook operating
performance during January through June of the applicable year, and shall
pay Great Bay, as provided in this Section 8 and Attachment l, the portion of
Net Sales Revenues received by PECO during the preceding six months equal
to the difference between (i) revenues owed Great Bay during January through
June, inclusive, of each calendar year (as calculated pursuant to Attachment
l hereto) and (ii) the total amount of Net Sales Revenues received by Great
Bay during the relevant January through June period. Great Bay shall be paid
the Great Bay Half-Year Delinquent Share determined in accordance with
Step 16 of the calculation of the Half-Year True-Up provided in Attachment l.
b. Annual True-Up. Not later than fifteen (l5) business days following
December 31st of each calendar year during the Agreement term, PECO shall
determine the Annual True-Up Amount based on actual Seabrook operating
performance during the preceding calendar year, and shall pay Great Bay,
as provided in this Section 9 and Attachment l, a portion of Net Sales
Revenues equal to (i) revenues owed Great Bay during each calendar year of
the Agreement term (as calculated pursuant to Attachment l) less (ii) the
total amount of Net Sales Revenues received by Great Bay during the relevant
calendar year, less (iii) the Half Year True-Up Amount, less (iv) the
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result of the Half Year Delinquent Amount True-Up. Great Bay shall be paid
the Great Bay Delinquent Share determined in accordance with Step 17 of the
calculation of the Annual True-Up provided in Attachment 1.
x. Xxxxxxxx Capacity Factor. Seabrook Capacity Factor shall be expressed as
a percentage and shall equal total Net Power produced during the relevant
period divided by the product of (i) Seabrook Station Rated Capacity for
the relevant period and (ii) the number of hours in the relevant period.
x. Xxxxxxxx Capacity Factor Statement. Not later than the seventh (7th)
business day following June 30th and December 31st of each year of the
Agreement term, Great Bay shall render to PECO a statement of Seabrook
Capacity Factor during, respectively, the preceding six months, and the
preceding calendar year. This statement shall be utilized by PECO to
determine (i) the amount Great Bay is owed for under recovery of Net Sales
Revenues as a result of a Seabrook Capacity Factor equal to or greater than
85.0% during the relevant period, and (ii) the Reservation Fee Rebate owed
to PECO. PECO shall not compute the Half-Year True-Up Amount, the Annual
True-Up Amount, or the Reservation Fee Rebate if Seabrook Capacity Factor
is less than 85.0% during the relevant period.
e. Reservation Fee Rebate. The Reservation Fee Rebate shall equal the
difference between (i) total Reservation Fee Payments by PECO to Great Bay
and (ii) the amount of Reservation Fee payments owed by PECO to Great Bay
as a result of actual Seabrook Capacity Factor during each applicable
calendar year.
f. Calculations. The methodology for calculating the Half-Year True-Up
Amount, the Annual True-Up Amount, and the Reservation Fee Rebate is
provided in Attachment l hereto.
SECTION 10. Late Payments.
Interest on due and owing unpaid amounts shall accrue daily from the due
date of such unpaid amount until the date paid at a rate equal to 110% of
the then current prime interest rate per annum of The Chase Manhattan Bank
(National Association) or its successor.
-16-
SECTION 11. Continuing Obligations.
Notwithstanding termination or expiration of this Agreement, Great Bay and
PECO shall each be obligated to perform their respective obligations under
Transactions contractually agreed to in writing by PECO during the Agreement
term.
SECTION 12. PECO's Right to Renegotiate.
If at any time during each calendar year of the Agreement term, PECO has
arranged a Firm Energy Transaction utilizing the Initial Power Amount and
(i) PECO can demonstrate that Seabrook is not capable of achieving at
least a sixty percent (60%) Seabrook Capacity Factor during the applicable
calendar year or (b) Seabrook generates insufficient energy to meet firm
obligations arranged by PECO for sixty (60) consecutive days, PECO shall
have the right to negotiate an adjustment in the Service Fee to reflect
a more equitable payment for PECO's brokering services. During 1997, the
number of hours equal to the planned duration of the 1997 Seabrook refueling
Outage, as reported by Great Bay to PECO in writing fifteen (15) days prior
to commencement of such planned Outage, shall be exempted from calculation
of Seabrook Capacity Factor for the purposes of this Section 12.
SECTION 13. PECO and Great Bay Obligations for Future Joint Opportunities.
a. Joint Purchase of Additional Power. PECO shall be obligated to
provide Great Bay with the opportunity to participate in all purchases of
Additional Power Amounts. PECO and Great Bay shall enter into good faith
negotiations for a period of thirty (30) days following the execution of
a letter of intent between PECO and a third party for the purchase of an
Additional Power Amount, during which time PECO and Great Bay shall
negotiate terms and conditions for the ownership, sharing of costs, and
sharing of revenues associated with each Additional Power Amount; provided,
however, that if PECO and Great Bay cannot agree on such terms in a timely
manner, PECO shall not be prevented from (i) unilaterally entering into
such a purchase and executing all documents to implement such purchase and
(ii) allocating to Great Bay, as part of any cost and revenue sharing to
which PECO and Great Bay may mutually agree at a later date, costs and
revenues associated with the Additional Power Amount commencing on the date
which PECO entered into the purchase. PECO shall serve as the Parties'
exclusive agent in arranging for the
-17-
sale of capacity and/or energy associated with each Additional Power
Amount which the Parties participate in jointly.
b. Great Bay Purchase of Additional Seabrook Capacity. Additional
Seabrook capacity purchased by Great Bay shall be governed by the
Agreement, and shall be incorporated into the definition of Initial Power
Amount as set forth in Attachment 2.
c. Great Bay Purchase of Additional non-Seabrook power. Great Bay shall
provide PECO with the opportunity to serve as Great Bay's exclusive agent
in arranging for the sale of additional Non-Seabrook Power purchased by
Great Bay. PECO and Great Bay shall enter into good faith negotiations
for a period of thirty (30) days following the execution of a letter of
intent between Great Bay and a third party for the purchase of
Non-Seabrook Power, during which time PECO and Great Bay shall negotiate
the terms and conditions under which PECO would serve as Great Bay's
exclusive agent in arranging the sale of Non-Seabrook Power. If PECO and
Great Bay cannot agree to such terms at the end of thirty (30) days, Great
Bay shall be able to enter into negotiations with a third party to arrange
for the sale of such a Non-Seabrook Power purchase.
d. Joint Pursuit of Other Opportunities. PECO and Great Bay agree to use
good faith efforts to maximize the value of the Initial Power Amount
including joint acquisition of generating assets, or subject to Section 13(a)
and Section 13(c), joint participation in the purchase of additional
power. The Parties agree to meet each quarter during the term of the
Agreement to discuss portfolio expansion opportunities in the NEPOOL region.
SECTION 14. Transaction Costs and Expenses.
Each Party shall be liable for its own costs with respect to the execution
and performance of the Agreement unless specifically provided otherwise
herein.
SECTION l5. Liability and Indemnification.
Each Party shall be liable to the other Party for direct damages only, and
in no event shall either Party be liable to the other Party for any
indirect, consequential, punitive, or exemplary damages in tort, for
Initial Power Amount or otherwise. Great Bay shall indemnify, hold
harmless and defend PECO against all claims, liability, costs or expense
-18-
for loss, damage or injury to persons or property in any manner directly
or indirectly connected (a) with or growing out of, the generation or
distribution of the Initial Power Amount, except in the event that such
claim, liability, cost or expense was a result of PECO's gross negligence
and willful misconduct hereunder or for a breach hereunder, which breach
is the cause of such claim, liability, cost or expense, and (b) with the
termination of any existing brokering or marketing arrangements with third
parties relating to the Initial Power Amount. The limitations set forth
in the first sentence of this Section 14 shall not apply with respect to
subparagraph (b).
SECTION 16. Termination.
a. Termination for Failure to Meet Material Obligations. In addition
to any other remedy, if any Party fails to perform its material obligations
under the Agreement, then the non-defaulting Party may provide written
notice of an intent to terminate the Agreement within thirty (30) days
of the occurrence of a material default, and the defaulting party shall
have fifteen (l5) days to cure such default. If the default is not cured
within such fifteen (l5) days, the non-defaulting Party may terminate the
Agreement. Termination, or expiration of this Agreement in accordance
with its terms, will not excuse pre-existing liabilities of either Party,
provided that: (i) for capacity and/or energy associated with the Initial
Power Amount which is generated after the Agreement is terminated or expired
in accordance with its terms, PECO shall not pay a Reservation Fee, and
100% of Net Sales Revenues from the sale of such energy and/or capacity
shall be paid to Great Bay; (ii) 100% of revenues from delivery of Back-Up
Power shall be paid to PECO; (iii) if Great Bay materially breaches this
Agreement, and as a result thereof, PECO terminates this Agreement pursuant
to Section 16(a), PECO shall have the right not to exercise the Warrant and
Great Bay shall refund to PECO the Purchase Price of the Warrant, as
defined in the Warrant Purchase Agreement; and (iv) PECO's rights under
the Warrant Purchase Agreement shall not be adversely affected by such
termination. Any other bilateral agreements between PECO and Great Bay
shall not be adversely affected by termination of the Agreement.
b. Termination for Convenience. At any time prior to the Warrant
Expiration Date, Great Bay may terminate the Agreement upon thirty (30)
days' prior written notice to PECO. Upon such event, the provisions
set forth in
-19-
subparagraphs (a)(i), (ii), and (iii) of this Section 16 shall apply to
such termination. In addition, upon presentment of the notice of
termination to PECO, Great Bay shall refund to PECO the Warrant Purchase
Price plus interest accrued pursuant to Section 10 herein, and the
Warrant and the Warrant Purchase Agreement shall be of no further force
and effect. If at any time prior to September 30, 1996, Great Bay
requires PECO to make a Great Bay Directed Offer after PECO has provided
Great Bay with such notice under Section 4(a), PECO may terminate the
Agreement upon ninety (90) days' prior written notice to Great Bay. Upon
such event the provisions set forth in subparagraphs (a)(i), (ii) and
(iii) of this Section 16 shall apply to such termination. In addition,
upon presentment of the notice of termination to Great Bay, Great Bay shall
refund to PECO a pro rata portion of the Warrant Purchase Price and the
Warrant Purchase Agreement shall be of no further force and effect. The
pro rata portion of the Warrant Purchase Price to be paid to PECO shall
be an amount equal to the product of (i) the Warrant Purchase Price and
(ii) a fraction, the numerator of which is the number of days from the
date upon which notice of termination is presented to Great Bay through
September 30, 1996, and the denominator of which is the number of days
from the Service Commencement Date through September 30, 1996.
c. True-Up Upon Termination. Not later than fifteen (l5) days following
termination of the Agreement pursuant to subparagraphs (a) and (b) of
this Section l5, PECO and Great Bay shall conduct a Termination True-Up.
The Termination True-Up Amount shall be determined using the same
methodology as provided in Section 9 and Attachment l for an Annual True
Up, except that the relevant period for determining the Termination
True-Up Amount shall be (i) the period since the most recent prior Half
Year True-Up, if termination occurs in July through December, or (ii) the
period since the most recent prior Annual True-Up, if termination occurs
in January through July.
SECTION l7. Confidentiality.
The Parties agree to keep the terms and conditions of the Agreement
(the "Confidential Information") confidential, provided that either Party
may disclose any Confidential Information to its consultants and advisors
who agree to be bound by this provision. If either Party is required by
law or judicial or administrative proceeding to disclose Confidential
Information to a third party which may be
-20-
obligated to make such information public, the disclosing Party shall so
inform the other Party; shall use its reasonable best efforts to disclose
only that portion of the Confidential Information that is required to be
disclosed to such third party; and shall be relieved of its obligations
hereunder with respect to that Confidential Information that was required to
be disclosed.
SECTION 18. Representations Warranties and Covenants.
Each Party represents and warrants to the other as follows:
a. Due Organization. It is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation
or organization, is duly licensed and qualified to hold property and
transact business and is in good standing in each jurisdiction where the
failure so to qualify would (i) materially adversely affect its ability
to perform any of its obligations under the Agreement; (ii) materially
adversely affect the rights of either Party hereto, (iii) materially
adversely affect the transactions contemplated by the Agreement; or (iv)
materially adversely affects its financial condition; and it has full power
and authority to enter into, and perform its obligations under, the Agreement.
b. Due Authorization: Enforceability; No Violation. This Agreement is duly
authorized, executed and delivered by it and, assuming the due authorization,
execution and delivery thereof by the other Party hereto, is, or will
be, as the case may be, its legal, valid and binding obligation enforceable
against it in accordance with its terms, except to the extent that the
enforceability of such Agreement may be limited by (i) applicable bankruptcy,
insolvency, receivership, fraudulent conveyance or other similar laws relating
to or affecting the rights and remedies of creditors generally or (ii) general
principles of equity (regardless of whether considered in a proceeding in
equity or at law). The execution and delivery by it of the Agreement, and
the performance by it of its obligations under the Agreement will not
be, in violation of its charter or bylaws or other governing documents, do
not and will not contravene any applicable federal or state law, rule,
regulation or order of any jurisdictional regulatory authority and do not
and will not contravene or result in any breach of any provision of, or
constitute a default or result in the creation of any lien under, any
indenture, mortgage, material contract or other material
-21-
instrument to which it is a party or by which it or its property may be
bound, or require the consent or approval of any trustee or holders of its
indebtedness or obligations, except for such consents or approvals as have
been duly obtained, given or accomplished.
c. No Approvals, Notices and Filings. Except for termination of the
Marketing Agent Agreement, dated April 1, 1993, with UNITIL, no consent or
approval of, giving of notice to, registration with, or taking of any action
in respect to or by any federal, state or local governmental authority or
agency or any other person is, or will be, required with respect to the
execution, delivery or performance by it of the Agreement.
d. Litigation. There are no actions, suits, or proceedings pending or,
to its knowledge, threatened against, or affecting it in any court or
before any governmental commission, that if adversely determined would
materially adversely affect its ability to perform any of its obligations
under the Agreement.
e. Compliance. It is not in default under any indenture, mortgage or
loan agreement, nor is it in default under any other agreement or
instrument to which it is now a party or by which it is bound, nor is it
in violation of any law, order, injunction, decree, rule or regulation
applicable to it of any court or administrative body, which default or
violation would (i) materially adversely affect its ability to perform any of
its obligations under the Agreement; (ii) materially adversely affect the
rights of the other Party hereto, or (iii) materially adversely affect the
transactions contemplated under the Agreement, and no event has occurred
and is continuing which, under the provisions of any such indenture, mortgage
or loan agreement, or other agreement or instrument, with the lapse of time or
the giving of notice, or both, would constitute such a material default
thereunder and would have such a material adverse effect.
SECTION 19. Agreements of Each Party.
Each Party agrees as follows:
a. Further Assurances. Each Party shall execute, acknowledge, deliver,
file and record all such further acts, conveyances, documents, instruments,
or similar statements and assurances as the other Party hereto may from
time to time reasonably request in order to carry
-22-
out more effectively the intent and purpose of this Agreement. In
particular, Great Bay shall use its reasonable best efforts to cooperate
with PECO to obtain Enabling Agreements with Customers.
b. No Conflicting Agreements. It shall not enter into any agreement which
would be violated or breached by the performance of its obligations hereunder
or any instrument or document to be delivered by it hereunder.
c. Payment of Taxes and Claims. It shall prepare and timely file all
federal, state andlocal tax returns and/or information statements required
to be filed by it and pay and discharge all taxes, assessments and other
governmental charges or levies imposed upon it or in respect of any of its
assets, which the failure to discharge may have a material adverse effect on
its ability to perform its obligations hereunder.
d. Notification of Litigation and Adverse Business Development. It shall
give prompt written notice to the other Party of (i) any action, proceeding
or investigation pending or, to the best of its knowledge, threatened,
against it before any court or governmental instrumentality or other
administrative agency which would have a material adverse effect on its ability
to perform its obligations hereunder.
SECTION 20. Notices.
All notices and other communications required or permitted by this Agreement
or by law to be served upon or given to a Party hereunder shall be deemed
duly served, given and received (i) on the date of service, if served
personally or sent by telex or facsimile transmission (with appropriate
confirmation of receipt) by the Party hereto to whom notice is to be given,
or (ii) on the fourth (4th) day after mailing, if mailed by first class
registered or certified mail, postage prepaid or (iii) on the next day if
sent by a nationally recognized courier for next day service and so addressed
and if there is evidence of acceptance by receipt addressed as follow
if to PECO:
PECO Energy Company
0000 Xxxxxxxxxxx Xxxxxxxxx
Xxxx xx Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esquire
-23-
if to Great Bay:
Great Bay Power Corporation
00 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxxx, President
or at such other address as any Party hereto may from time to time designate
by notice duly given in accordance with the provisions of this Section 20
to the other Party hereto.
SECTION 2l. Miscellaneous.
a. Headings. The headings used in this Agreement have been inserted for
convenience of reference only and in no way shall restrict or otherwise modify
any of the terms or provisions hereof.
b. Time of the Essence. All times and dates in this Agreement shall be of
the essence.
c. Entire Agreement. The Warrant Purchase Agreement and this Agreement
comprise the entire understanding and agreement among the Parties and
supersede all prior and contemporaneous discussions, negotiations, agreements
and communications among the Parties, whether oral or written, with respect
to the subject matter herein.
d. Amendment. This Agreement may be amended only upon the consent of each
Party hereto, expressed in writing.
e. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, as applied to
contracts among residents of Pennsylvania wholly to be performed within
that Commonwealth.
f. Severability. If any provision of this Agreement is determined to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, to achieve the intent of the Parties. In any event, all of the
other provisions shall be deemed valid and enforceable to the greatest
possible extent.
g. Construction. All references herein to any agreement shall be to such
agreement as amended, supplemented or modified from time to time.
All references to a particular entity shall include a reference to such
entity's successors. The words "herein," "hereof" and"hereunder" shall refer
to the Agreement as a whole and
-24-
not to any particular section or subsection of this Agreement. The singular
shall include the plural and the masculine shall include the feminine and
neuter, and vice versa. "Includes" or "including" shall mean"including,
without limitation."
h. Cross-References. All cross-references in this Agreement, unless
specifically stated otherwise, refer to provisions of this Agreement.
i. Further Assurances. Each Party hereby represents and warrants that
the individual signing this Agreement on its behalf is duly authorized to
execute and deliver this Agreement on behalf of such Party.
j. Waiver. No waiver of any provision of this Agreement shall be deemed
effective unless contained in a writing signed by the Party against whom the
waiver is sought to be enforced. No failure or delay by any Party in
exercising any right, power or remedy, and no waiver of any breach or
failure to perform shall be deemed a waiver of any subsequent breach or
failure to perform or of any other right arising under this Agreement.
k. Not for Benefit of Third Parties. The provisions of this Agreement
are intended only for the regulation of relations among the Parties hereto.
This Agreement is not intended for the benefit of third parties and does not
grant any rights to third parties
l. Interpretation. Each Party and its counsel have reviewed this
Agreement and accordingly the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement.
m. Exhibits and Schedules. All of the exhibits and schedules attached hereto
are incorporated herein by this reference.
n. Except with respect to a Party's assignment of this Agreement to a
successor organization which includes substantially the same personnel and
assets as the assigning Party's existing organization, neither Party shall
assign this Agreement without the prior written consent of the non-assigning
Party.
-25-
IN WITNESS WHEREOF, the Parties hereto have each caused this Agreement to be
duly executed by their respective representatives thereunto duly authorized as
of the respective dates set forth below.
PECO ENERGY COMPANY GREAT BAY POWER CORPORATION
By:_/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxx X.Xxxxxxxxxxx
Xxxxx X. Xxxxxxx Xxxx Xxxxxxxxxxx
Vice-President President
Date: 11/3/95 Date: 11/3/95
-26-
Attachment 1:
Methodology for Computation of True-Up Amounts.
Half-Year True-Up Amount
The following methodology will be utilized to determine the Half-Year True-Up
Amount. During 1996, the period over which the Half-Year True-Up Amount will be
determined will be adjusted to reflect the Service Commencement Date.
Step Calculation to be Made: Variable Name Formula
1. Determine the number of Half-Year Hours = E January - June
hours during the (Hours in each month)
half-year period.
2. Determine the amount of Half-Year GB = E January - June 30
MWhs of Seabrook energy Power (Initial Power Amount* number of
owned by Great Bay hours, or portions thereof,
during the half-year during each day in which
period Seabrook generated power)
3. Determine Seabrook Net Half-Year SB = E January - June 30
Power during the Power (Amount of Net Power generated
half-year period. by Seabrook each day)
4. Determine Half-Year Half-Year SCF = Half-Year SB Power
Seabrook Capacity (Seabrook Rated Capacity during
Factor period* Half-Year Hours)
If Half-Year SCF is less than 85.0%, the Half-Year True-Up Amount shall
equal $0.
Step Calculation to be Made: Variable Name Formula
5. Determine the amount of Step 5 Result If(Half-Year SCF-85%>5%),
Half-Year SCF which is then=5%
greater than 85% but less
than 90%.
6. Determine the amount of Step 6 Result If(Half-Year SCF-85%<5%),
Half-Year SCF which is then=Half-Year SCF-85%
greater than 90%.
-27-
Proprietary and Confidential
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
7. Determine Half-Year Great Bay =[(84.99%***%)=(Step 5 Result
Revenue Share for PECO Half-Year Revenue ***%)=(Step 6
and Great Bay Share Result****%)]/Half-Year SCF
(expressed as a %age)
PECO Half-Year =1-Great Bay Half-Year Revenue
Revenue Share Share
8. Determine Half-Year Net Half-Year NSR =E January-June (Net Sales
Sales Revenue Revenue for each month)
9. Determine Delinquent Half-Year DA =Delinquent Amounts as of June
Amounts outstanding as 30
of June 30 of relevant
calendar year
10. Determine Reservation Half-Year RFR If Half-Year SCF=or>90%,
Fee Rebate. No =(Half-Year SCF-90%)*Half-Year
Reservation Fee Rebate GB Power *$**
is owed if Half-Year
Seabrook Capacity
Factor is less than 90%
11. Determine Half-Year Half-Year =Half-Year NSR - Half-Year DA -
True-Up Basis Distribution Half-Year RFR
Basis
12. Determine Service Fee =Half-Year Distribution Basis*
Owed to PECO PECO Half-Year Revenue Share(%)
13. Determine Revenue Share Half-Year GB =Half-Year Distribution
Owed to Great Bay Revenue Owed Basis*Great Bay Half-Year
Revenue Share (%)
14. Determine revenue GB Revenue =E January - June (Monthly
received by GB during Received Payment to GB for each month)
the relevant calendar
year.
15. Determine True-Up Half-Year True-Up =Half-Year GB Revenue Owed - GB
Amount Amount Revenue Received
16. Determine Sharing of GB Half-Year =Half-Year DA*Great Bay Half-
unpaid Delinquent Delinquent Share Year Revenue Share (%)
Amounts
PECO Half-Year =Half-Year DA*PECO Half-Year
Delinquent Share Revenue Share (%)
Annual True-Up Amount
The following methodology will be utilized to determine the Annual True-Up
Amount. During 1996, the period over which the Annual True-Up Amount is
determined will be adjusted to reflect the actual Service Commencement Date.
-28-
Proprietary and Confidential
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Step Calculation to be Made: Variable Name Formula
1. Determine the number of Annual Hours =8760, unless the year is a
hours during the year. leap year, in which case,=878
2. Determine the amount of Annual GB Power =E January 1 - Dec 31
MWhs of Seabrook energy (Initial Power Amount*number of
owned by Great Bay hours, or portions thereof,
during the year. during each day in which
Seabrook generated power)
3. Determine Seabrook Net Annual SB Power =E January 1 - Dec 31
Power during the year. (Amount of Net Power
generated by Seabrook each
day)
4. Determine Annual Annual SCF = Annual SB Power
Seabrook Capacity (Seabrook Rated Capacity
Factor during period*Annual Hours)
If Annual SCF is less than 85.0%, the Annual True-Up Amount shall equal $0.
Step Calculation to be Made: Variable Name Formula
5. Determine the amount of Step 5 Result If(Annual SCF-85%>5%),then = 5%
Annual SCF which is
greater than 85% but If(Annual SCF-85%<5%),then =
less than 90%. Annual SCF-85%
6. Determine the amount of Step 6 Result If(Annual SCF-85%<5%),then = 0%
Annual SCF which is
greater than 90%. If(Annual SCF-85%>5%),then =
Annual SCF-90%
7. Determine Annual Great Bay Annual =[(84.99%***%)(Step 5 Result***%)
Revenue Share for PECO Revenue Share + (Step 6 Result****%)]/Annual SC
and Great Bay
(expressed as a %age). PECO Annual =1-Great Bay Annual Revenue Share
Revenue Share
8. Determine Annual Net Annual NSR =E January - December
Sales Revenue (Net Sales Revenue for each month)
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Proprietary and Confidential
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
9. Determine Delinquent Annual DA =Delinquent Amounts as of
Amounts outstanding as December 31
of December 31 of
relevant calendar year.
10. Determine Reservation Annual RFR If Annual SCF is=or>90%,Annual
Fee Rebate. N o RFR=(Annual SCF-90%)*Annual GB
Reservation Fee Rebate Power*$**
is owed if Annual
Seabrook Capacity
Factor is less than 90%.
11. Determine Annual Annual =Annual NSR-Annual DA-Annual RFR
True-Up Basis Distribution
Basis
12. Determine Service Fee =Annual Distribution Basis*PECO
Owed to PECO Annual Revenue Share (%)
13. Determine Revenue Share Annual GB Revenue =Annual Distribution Basis*Great
Owed to Great Bay Owed Bay Annual Revenue Share (%)
14. Determine what share of Half-Year DA =(Half-Year DA*Great Bay Annual
Half-Year Delinquent True-Up Revenue Share)-GB Half-Year
Amount GB should have Delinquent Share
been paid at the Annual
GB Revenue Share rate.
15. Determine revenue GB Revenue =E January - December (Monthly
received by GB during Received Payment to GB for each month)
the relevant calendar
year.
16. Determine Annual Annual True-Up =Annual GB Revenue Owed-GB Revenue
True-Up Amount Amount Received-Half-Year True-Up
Amount+Half-Year DA True-Up
17. Determine Sharing of GB Delinquent =Annual DA*Great Bay Annual
unpaid Delinquent Share Revenue Share
Amounts
PECO Delinquent =Annual DA*PECO Annual Revenue
Share Share
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Termination True-Up Amount
The Termination True-Up Amount shall be calculated utilizing the same
methodology as the Half-Year True-Up Amount. The start date for the period
for which the Termination True-Up Amount is calculated shall be (i) January
1, if the most recent true-up performed before the date of termination was an
Annual True-Up, and (ii) July 1, if the most recent true-up performed before
the date of termination was a Half-Year True-Up. The end date for the period
for which the Termination True-Up Amount is calculated shall be the date of
termination.
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Attachment 2
Schedule of Great Bay Agreements
Exempt from Inclusion in Initial Power Amount
1. Purchased Power Agreement between Great Bay Power Corporation and
UNITIL Power Corp. dated April 26, 1993 for purchase of 0.8696% of the
capacity and associated energy from Seabrook (representing approximately
10 MW).
2. Purchased Power Option Agreement between Great Bay Power Corporation
and UNITIL Power Corporation dated April 26, 1993 for option to purchase
1.3043% capacity and associated energy from Seabrook (representing
approximately 15 MW) during the period commencing November 1, 1998 through
and including October 31, 2018.
3. Purchased power agreement between Great Bay Power Corporation and
Bangor Hydro-Electric Company for 10 MW during the winter months
(November-March) commencing January 1, 1996 through March 1998 (with option
for two additional years) at variable energy rates pursuant to terms of
the Final Offer dated October 4, 1995 attached hereto.
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
CONFIDENTIAL 10/4/95
FINAL OFFER
ATTACHMENT 2
PRICING SCHEDULE 2: Variable Energy Rates
_____________________________________________________________________________
CONTRACT YEAR CAPACITY CAPACITY ENERGY TOTAL
PERIOD CHARGE CHARGE RATE
(MW) ($/kW-yr) ( /kW-yr) ( /kWh)
[1] [2] [3] [4] [5]
_____________________________________________________________________________
INITIAL 95/96 Jan-Mar 10 10 **** ****
CONTRACT 96/97 Nov-Mar 10 10 **** ****
TERM 97/98 Nov-Mar 10 10 **** ****
_____________________________________________________________________________
OPTION 00/00 Xxx-Xxx 00 00 **** ****
TERM 99/00 Nov-Mar 10 65 **** ****
_____________________________________________________________________________
NOTES:
[1] The Initial Contract Term is 2 yr & 10 mon beginning January 1, 1996 with
an option to extend for an additional one or two years. The exercise date of
the option is 10 days prior to the start of the Option Term. On or prior to
the exercise date BHE will notify GBPC of its intent to exercise and the term
for which BHE wishes to purchase the option.
15 Revision
BHE shall have the option to increase its Seabrook entitlement each winter
NEPOOL capacity period by 5 MW. BHE may exercise this option by providing
notice to GBPC 30 days prior to the start of each NEPOOL capability period.
[2] BHE's Seabrook entitlement will be a percentage of the Unit(i.e.
approximately 0.8696% for 10 MW). BHE will specify the annual capacity it
wishes to purchase during the Initial Contract Term and the Option Term at
the time of executing the agreement. BHE's annual entitlement may vary
between 10 MW and 25 MW in each year of the Initial Contract Term. (BHE has
selected 10 MW). The capacity reserved under the Option Term may not exceed
the maximum annual capacity purchased during the Initial Contract Term.
Upon the loss of certain customers specified in the agreement, BHE may
reduce its Seabrook entitlement on a pro-rata basis.
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Delivery will be to the low voltage side of the Seabrook station transformer
in accordance with Joint Owner's Agreement. BHE arranges and pays for PTF
transmission service to the BHE service territory.
[3] The capacity price will be assessed on the kW entitlement reserved by
BHE in each year. Capacity payments will be monthly. BHE will receive a pro
rata capacity credit from unscheduled outages longer than 3 days.
[4] Energy Charge Rates are estimates based on a forecast for 1% sulfur No. 6
fuel oil. The accrual Energy Charge Rate for each month will be calculated
as follows:
Energy Rate ($/kWh) = Xxxxx'x Price ($/bbl) X 9,000 (Btu/kWh)
_____________________________________
6,400,000 (Btu/bbl
where Xxxxx'x Price is the monthly average of the daily mean prices of
1% sulfur No. 6 oil (cargo) in $/bbl from Xxxxx'x Oilgram Price Report for New
York/Boston district.
[5] Total rate assumes an 85% annual capacity factor and is shown for
comparison purposes only.
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Proprietary and Confidential
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Attachment 3
Great Bay Sales Revenue during the Winter 1995 Period
Energy Delivered Price Sales Average Price
MW sold (MWh) ($/MWh) Revenue ($/MWh)
January
NEPCO 75.00 55,919 ***** *********
Bangor Hydro 35.00 26,096 ***** *******
Northeast Utilities 19.52 14,556 ***** *******
96,571 ********* *****
February
NEPCO 75.00 50,763 ***** *********
Bangor Hydro 35.00 23,690 ***** *******
Northeast Utilities 19.52 13,214 ***** *******
87,667 ********* *****
March
NEPCO 75.00 56,284 ***** *********
Bangor Hydro 35.00 26,266 ***** *******
Northeast Utilities 19.52 14,651 ***** *******
97,201 ********* *****
Less: Marketing Fees 77,000
TOTAL/Avg. Price 281,439 ********* *****
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