EXHIBIT 10(i)112)
AGREEMENT BETWEEN
CENTRAL XXXXXX GAS & ELECTRIC CORPORATION
AND NIAGARA MOHAWK POWER CORPORATION
THIS AGREEMENT made as of March 30, 1994, by and
between Central Xxxxxx Gas & Electric Corporation, a New York
corporation (Central Xxxxxx), having an office at 000 Xxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxx Xxxx 00000 and Niagara Mohawk Power
Corporation, a New York corporation (Niagara Mohawk), having an
office at 000 Xxxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000.
WITNESSETH:
WHEREAS, Central Xxxxxx, Consolidated Edison Company of
New York, Inc. (Con Edison) and Niagara Mohawk entered into an
agreement dated as of October 31, 1968 (Basic Agreement)
concerning the Roseton Electric Generating Plant (Plant);
attached to the Basic Agreement and made a part thereof are a
number of related agreements including Appendix B Roseton
Operating Agreement (Operating Agreement) and Exhibit VI, Option
Agreement (Option Agreement);
WHEREAS, the Option Agreement was executed on May 14,
1969 and recorded in the Orange County Clerk's Office on May 27,
1969 in Liber 1820 of Deeds at page 846; and
WHEREAS, Central Xxxxxx and Niagara Mohawk had
previously amended the Option Agreement through that certain
agreement made as of September 9, 1987 (Roseton Transfers
Agreement) to, among other things, supersede the Option Agreement
as among themselves by such Roseton Transfers Agreement; and
WHEREAS, in recognition of changed circumstances since
the execution of the Roseton Transfers Agreement, Central Xxxxxx
and Niagara Mohawk find it to be desirable to terminate and
cancel the Roseton Transfers Agreement;
NOW, THEREFORE, in consideration of the mutual
covenants herein contained, and other good and valuable
consideration, the parties hereto agree that the Roseton
Transfers Agreement made as of September 9, 1987 is hereby
terminated and cancelled. Niagara Mohawk and Central Xxxxxx
shall cooperate in the preparation, filing with and support
before the Public Service Commission of a request to withdraw the
"Joint Petition of Central Xxxxxx Gas & Electric Corporation and
Niagara Mohawk Power Corporation" dated February 28, 1988 and to
close the proceedings in Public Service Commission Case 88-E-036.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement by their duly authorized officers as of the day and
year first above written.
Attest: CENTRAL XXXXXX GAS &
ELECTRIC CORP
(SGD.) XXXXXX X. UPRIGHT (SGD.) XXXXX X. PAGE
XXXXXX X. UPRIGHT XXXXX X. PAGE
Attest: NIAGARA MOHAWK POWER
CORPORATION
(SGD.) XXXX X. XXXXX (SGD.) XXXXXXX X. XXXXXX
XXXX X. XXXXX XXXXXXX X. XXXXXX
NIAGARA MOHAWK
March 30, 1994
Xx. Xxxxx X. Page
Central Xxxxxx Gas & Electric Corporation
000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Dear Xxxxx:
This Letter of Understanding ("Agreement") will memorialize
our understanding with regard to the disposition of the September
9, 0000 Xxxxxxx Xxxxxxxxx Agreement ("Amendment") between Niagara
Mohawk and Central Xxxxxx. The Amendment requires approval of
the Public Service Commission ("PSC"). Central Xxxxxx and
Niagara Mohawk ("Parties") filed a Joint Application for approval
with the PSC which has not been acted upon by the PSC as of the
date of this Letter. Instead of continuing to pursue approval of
the Joint Application, Niagara Mohawk and Central Xxxxxx have
agreed to terminate the Amendment in consideration of the mutual
covenants and understandings set forth below and have
contemporaneously executed a separate agreement terminating the
Amendment.
1. The covenants and understandings set forth in this letter
shall in no way contravene the rights of all three cotenants
under the Agreement dated October 31, 1968 by and between
Central Xxxxxx Gas & Electric Corporation, Consolidated
Edison Company of New York, Inc. and Niagara Mohawk Power
Corporation dealing with the Roseton Electric Generating
Plant ("1968 Agreement") which includes all related
agreements, including but not limited to Appendix B, Roseton
Operating Agreement and, other than as specifically affected
by paragraph 7 hereof, Exhibit VI Option Agreement. Nothing
in this Agreement shall be construed to diminish in any
fashion the authority of Central Xxxxxx under the 1968
Agreement.
2. Central Xxxxxx will discuss as soon as possible with Niagara
Mohawk and Con Edison, pursuant to ARTICLE 8.3 of the
Operating Agreement, the operation of Units 1 and 2 of the
Plant on an alternating six-month basis.
3. The Parties agreed to enter into the power sales
transactions specified on Attachments 1, 11, and III of this
Agreement, which are incorporated herein and made a part of
this Agreement, under Niagara Mohawk's wholesale power sales
Tariff filed with the Federal Energy Regulatory Commission
("FERC") in FERC Docket NO. ER93-313-000, as may be amended
or refiled.
4. Central Xxxxxx has advised that if one or both units at the
Roseton Plant are not expected to generate it will
periodically solicit competitive bids for meeting its load
requirements by issuing requests for proposals during the
May 1995 through April 2004 time period. Based on Central
Xxxxxx'x current load requirement Central Xxxxxx will
solicit bids for firm power deliveries for which the minimum
amounts will be the following:
I. 50 MW at 1 00% capacity factor and
II. 50 MW at 1 00% capacity factor for all on peak hours
and 30% capacity factor for all off peak hours.
Future bids may differ from amounts and schedules stipulated
in I and 11 herein. Niagara Mohawk shall have the right to
better any offer (or offers) selected in response to
solicitations up to 21 0 MW by Central Xxxxxx. It is the
understanding of the Parties that a better offer shall be
any offer by Niagara Mohawk that has a total purchase cost
that is less than the offer(s) selected by Central Xxxxxx.
In the event that multiple offers are required to achieve
Central Xxxxxx'x desired capacity, up to 000 XX, Xxxxxxx
Xxxxxx must only better each of the separate offers selected
by Central Xxxxxx.
5. Central Xxxxxx shall have the right to an option, beginning
1/l/98 and extending through 12/31/04 for up to the annual
amounts indicated under Reserved Capacity in the table
below. However, in no instance, shall the amount selected
by Central Xxxxxx for the next year be less than the amount
selected in the current year. Central Xxxxxx will pay
Niagara Mohawk $.XX per KW per month as a "Reservation
Charge" for these options beginning 1/l/98 in accordance
with the following:
YEAR RESERVED MAXIMUM
CAPACITY RESERVATION CHARGE
PAYMENT
1/l/98 XX MW $ XX,XXX
1/1/99 XX MW $XXX,XXX
1/1/00 XX MW $XXX,XXX
1/1/Ol XX MW $XXX,XXX
1/l/02 XX MW $XXX,XXX
1/l/03 XX MW $XXX,XXX
1/l/04 XX MW $XXX,XXX
XX XXXXXXXXXXX XXXXXX XXXXX XX XXX XXXXX XXX XXXX XXXX.
Central Xxxxxx shall provide Niagara Mohawk with at least
one years prior notice to exercise its option for a given
year. Should Central Xxxxxx elect to exercise the capacity
and/or energy option in a given year in accordance with the
requirements above, the related Reservation Charge shall
cease. Payment for energy and capacity shall be at a rate
which is the lower of either the full cost of electricity
supplied from the Roseton Station or a price offered by
Niagara Mohawk which may be developed to better a bid
selected by Central Xxxxxx. XXX XXXXXXXXXXX XX XXX XXXX
XXXX XX XXXXXXX XXXX XX XXXXX XXXX XXXXXXXX XXXXXXX XXXXXXX
XX XXX XXXXXXXX XXXX XX XXX XXXXXXXX XXXX XXXXXXXXX XXX
XXXXXXXXXXX XXXXXXX ("XXXXXXXX XXXXXX") XXXX XXXX XXXXXXX.
A sample calculation shall be developed as part of the Power
Sales and Option Agreement.
6. Central Xxxxxx shall have the option to purchase a block(s)
of capacity and associated energy (which individually or
collectively shall not exceed) a total of 150 megawatts,
unless Niagara Mohawk determines, as set forth below, that
capacity is not available. The term of the purchasers)
under the option(s) shall commence on January 1, 2001 and
terminate December 31, 2004.
Capacity will be considered available based on Niagara
Mohawk forecasts of the availability of capacity above own
load at the time of notice from Central Xxxxxx plus
wholesale sales obligations as of May 1, 1994 (191 MW) plus
reserve requirements. Central Xxxxxx shall provide Niagara
Mohawk with at least three years advance notice to exercise
its right to receive delivery of capacity and associated
energy unless mutually agreed otherwise. Central Xxxxxx may
solicit competitive bids for this capacity. In the event
that Central Xxxxxx solicits competitive bids for capacity,
Niagara Mohawk shall have the right to better any offer
selected by Central Xxxxxx in response to this solicitation.
Such rates for energy and capacity shall be capped at the
full cost of electricity supplied from the Roseton Station
as defined in Section 5.
7. The 1968 option is hereby amended by and between the Parties
hereto as set forth herein and superseded by such amendment
as to the Parties hereto. The Option Agreement continues in
full force and effect as to Central Xxxxxx and Con Edison is
not affected hereby.
As between Niagara Mohawk and Central Xxxxxx, Central Xxxxxx
shall not exercise its option under the 1968 Agreement with
respect to Niagara Mohawk's 25% interest and Niagara Mohawk
shall have an option to retain its 25% interest in the
plant. Niagara Mohawk shall give Central Xxxxxx written
notice by May 31, 1999 that Niagara Mohawk is exercising its
option. In the event that Niagara Mohawk does not provide
Central Xxxxxx with such written notice that it is retaining
its 25% interest, that interest shall then be subject to
exercise by Central Xxxxxx of its option in regard to
Niagara Mohawk's 25% interest in the 1968 Agreement. The
Parties shall cooperate in obtaining all necessary
approvals.
Niagara Mohawk, for the period 2005 - 201 0, shall have the
right to better any offer (or offers) selected in response
to bid solicitations. It is the understanding of the
Parties that a better offer shall be any offer by Niagara
Mohawk that has a total purchase cost that is less than the
offer(s) selected by Central Xxxxxx.
The provisions of Paragraphs 4, 5, 6, and 7 of this
Agreement will be memorialized in a separate agreement
(Power Sales and Option Agreement) to be completed by the
Parties on or about July 1, 1994. Niagara Mohawk will file
the Power Sales and Option Agreement with FERC and the
Parties will use their best efforts to obtain FERC
acceptance of such agreement. If the Parties fail to agree
or FERC does not accept the Power Sales and Option Agreement
or will accept R only with material modifications, the
Parties will use their best efforts to agree on alternative
terms. Niagara Mohawk will make all necessary filings with
the New York State Public Service Commission except any
informational filings Central Xxxxxx must make as a
purchaser hereunder.
8. Niagara Mohawk has advised Central Xxxxxx that it utilizes
an evaluation procedure termed Core Process Redesign (CPR)
process to identify cost reduction opportunities at its
generating stations. Niagara Mohawk will provide Central
Xxxxxx with background information on the CPR evaluation
technique. Central Xxxxxx will consider this process for
the purpose of evaluating and improving the efficiencies of
the operating and maintenance processes associated with the
Roseton Generating Station. To the extent that it is judged
to be applicable, Central Xxxxxx will use its best efforts
to complete an evaluation of the Roseton plant by December
31, 1994. Central Xxxxxx'x evaluation will entail the full
discussion of its findings with the other two cotenants
indicating actions that Central Xxxxxx will plan to take as
appropriate to reduce costs.
9. The Parties shall use their best efforts to identify and
complete any additional documentation and agreements
required to fully implement the understandings and
agreements set forth herein. Further, the Parties shall
cooperate and use their best efforts to obtain any necessary
regulatory approvals to allow all of the terms and
conditions of this Agreement to take effect.
10. The Parties recognize that the prices and rate terms for the
purchases and sales of capacity and associated rights for
the sale and purchase of power contemplated by this
Agreement (collectively referred to as 'Transactions")
constitute the commercially sensitive information of Niagara
Mohawk. Accordingly, Central Xxxxxx shall treat the price
or rate terms of all Transactions hereunder or any related
discussions/positions taken during the negotiation of a
Transaction ("Confidential Material) as confidential.
Confidential Matter furnished by Niagara Mohawk shall be for
the sole and exclusive use of Central Xxxxxx and Central
Xxxxxx shall not publish, disclose, or otherwise divulge the
Confidential Matter to any person at any time prior to two
years following the termination of a transaction without the
prior written consent of an officer of Niagara Mohawk except
as expressly provided herein.
Central Xxxxxx shall employ procedures established to
prevent unauthorized disclosure or use of the Confidential
Matter.
If required by an order of a governmental or judicial body
of competent jurisdiction, Central Xxxxxx may release to
such body Confidential Matter required by such order
provided that it shall use its best efforts to cause that
body to treat such information in a confidential manner and
prevent such information from becoming part of the public
domain. Upon receiving a request for any Confidential
Matter from any governmental authority or subdivision or
from any party in a proceeding pending before any court or
administrative agency, Central Xxxxxx shall provide Niagara
Mohawk with notice and copies of said request for
Confidential Matter and responses as soon as reasonably
practicable. Central Xxxxxx shall reasonably cooperate with
Niagara Mohawk in exercising any applicable rights to oppose
the disclosure of Confidential Matter in any such proceeding
or before any such body.
This Paragraph shall not apply to Confidential Matter (a)
which was in the public domain at the time of disclosure
hereunder; or (b) after it passes into the public domain by
acts other than the acts of or caused by Central Xxxxxx.
11. Nothing in this agreement is intended to waive Central
Xxxxxx'x rights, under the Federal Power Act, as a purchaser
under the Niagara Mohawk FERC tariff.
12. It is understood that with respect to any solicitation of
bids as may be provided in this Agreement, that there may be
full disclosure to all bidders of any right of Niagara
Mohawk to better any offer (offers) selected by Central
Xxxxxx.
If the terms and conditions set forth above are consistent
with our understanding, please indicate your acceptance by
signing this letter in the space provided and returning one
copy to me.
Sincerely
(SGD.) XXXXXXX X. XXXXXX
Xxxxxxx X. Xxxxxx
Vice President
Power Transactions and
Planning
Attachments
Accepted by Central Xxxxxx Gas and Electric Corporation:
(SGD.) XXXXX X. PAGE
XXXXX X. PAGE 4/11/94
MARCH 30, 1994
Attachment I
NIAGARA MOHAWK POWER CORPORATION
POWER SALES TERMS
AMOUNT: XX XX
XXXXX: $XX.XX per MWH
TRANSACTION START DATE: May 1, 1994
TRANSACTION START TIME: Hour ending 0100
TRANSACTION STOP DATE: April, 30, 1995
TRANSACTION STOP TIME: Hour ending 2400
SCHEDULING NOTES
1. Transaction is at 100% capacity factor, must take, no cut
unless mutually agreed otherwise.
Acknowledged and Agreed to on behalf of
Central Xxxxxx Gas & Electric Corporation:
By: (SGD.) XXXXX X. PAGE
Title: VICE PRESIDENT-CORPORATE SERVICES
Date: 4/11/94
MARCH 30, 1994
ATTACHMENT II
NIAGARA MOHAWK POWER CORPORATION
POWER SALES TERMS
AMOUNT: XX XX
XXXXX: 1. $XX.XX XXX XXX XXX XXX XX XXXX
XXXXX XXXXXX XXXXXXX XXXXXXXX, XXXX
XXXXXX XXXX XXXXXXX XXXX XXXXXX
XXXX
2. $XX.XX XXX XXX XXX XXX XXX XXXX
XXXXX XXXXXX XXXXXXX XXXXXXXX, XXXX
XXXXXX XXXX XXXXXXX XXXX XXXXXX
XXXX, XXX XXX XXXXXX XXX XXXXXXXXXX
XXXXXXXXXX XXXXXXXX.
TRANSACTION START DATE: May 1, 1994
TRANSACTION START TIME: Hour ending 0100
TRANSACTION STOP DATE: April, 30, 1995
TRANSACTION STOP TIME: Hour ending 2400
SCHEDULING NOTES:
1. Transaction is at 1 00% capacity factor, must take, no cut
during on peak hours unless mutually agreed otherwise.
2. Transaction is at 30% capacity factor must take for off peak
hours unless mutually agreed otherwise.
3. Estimated off peak schedule will be provided by Central
Xxxxxx to Niagara Mohawk by Friday at 1000 hours, detailing
hours for the following week (Monday through Sunday) meeting
30% weekly capacity factor. Central Xxxxxx may make changes
to the hourly schedule on shift.
Acknowledged and Agreed to on behalf of
Central Xxxxxx Gas & Electric Corporation:
By: (SGD.) XXXXX X. PAGE
Title: VICE PRESIDENT CORPORATE SERVICES
DATE: 4/11/94
March 30, 1994
ATTACHMENT III
NIAGARA MOHAWK POWER CORPORATION
POWER SALES TERMS
AMOUNT: Up to XXX XX
XXXXX: XXXXXXX XX XXXXXX XXXXXXXXX XXX XXXXXX
XXX XXXXXXXX XX XXXXXXXXXXX XX
XXXXXXXXXXXX.
TRANSACTION START DATE: May 1, 1994
TRANSACTION START TIME: Hour ending 0100
TRANSACTION STOP DATE: April, 30, 2004
TRANSACTION STOP TIME: Hour ending 2400
SCHEDULING NOTES:
1. Central Xxxxxx will provide Niagara Mohawk with daily,
weekly or monthly requirements. Weekly requirements shall
be provided (Monday through Sunday) by the previous Thursday
at 1200 hours.
2. Niagara Mohawk will provide Central Xxxxxx with amounts and
prices by the previous Friday at 1000 hours for the
designated time period.
3. The accepted schedule will be provided by Central Xxxxxx to
Niagara Mohawk by Friday at 1200 hours.
Acknowledged and Agreed to on behalf of
Central Xxxxxx Gas & Electric Corporation:
By: (SGD.) XXXXX X. PAGE
Title: VICE PRESIDENT-CORPORATE SERVICES
Date: 4/11/94
