Composite Conformed Copy
------------------------
Yankee Atomic Electric Company
POWER CONTRACT
[The following is a composite Power Contract as amended
through Amendment No. 7 dated as of February 1, 1992. Please
note that the "whereas" clauses for each amendment have been
omitted, and that conforming signature data for the original
counterpart only is included in the Appendix. Also please note
that Amendment No. 3 restated the entire power contract. This
composite power contract has been prepared as a resource tool and
is not the formal contract among the parties.]
POWER CONTRACT dated June 30, 1959, as revised April 1,
1975, between YANKEE ATOMIC ELECTRIC COMPANY ("Yankee") and (the
names of the Customers appear in the attached Appendix) (the
"Customer").
"Yankee is a Massachusetts electric company, organized in
1954, which has constructed and placed in operation a nuclear
power plant, the output of which is sold to the New England
utilities which are its stockholders. The plant is located at a
site owned by Yankee in Rowe, Massachusetts, and consists of a
pressurized water reactor and associated steam electric
generating, transformation and auxiliary equipment have a net
electrical capacity of 176,000 KW (the "plant"). The Atomic
Energy Commission has authorized operation of the plant during an
initial 40-year term extending to November 4, 1997, pursuant to
License No. DPR-3.
The percentages of Yankee's outstanding stock held by the
Customer and other stockholders of Yankee and the percentages of
the capacity and net electrical output of the plant being
purchased by them are as follows:
Stock Power
Percentage Percentage
New England Power Company 30.0% 30.0%
The Connecticut Light and Power Company 24.5* 24.5*
Boston Edison Company 9.5 9.5
Central Maine Power Company 9.5 ---**
Western Massachusetts Electric Company 7.0 7.0
Public Service Company of New Hampshire 7.0 16.5**
Montaup Electric Company 4.5 4.5
Commonwealth Electric Company 2.5 2.5
Cambridge Electric Light Company 2.0 2.0
Central Vermont Public Service Corporation 3.5 3.5
100.0% 100.0%
*Represents the consolidation of two prior existing contracts,
one with The Connecticut Light and Power Company for 15% and one
with The Hartford Electric Light Company for 9.5%, those two
companies having merged.
**Public Service Company of New Hampshire has agreed to supply
power to Central Maine Power Company in amounts equivalent to
9.5% of the net electrical output of the Yankee plant, after
appropriate allowance for transmission losses.
The parties hereto agree as follows:
1. Scope of Contract
-----------------
Yankee will sell and deliver to the Customer and the
Customer will take and pay for its power percentage of the net
electrical output of the plant during the term of this contract.
2. Term of Contract
----------------
This contract shall continue in full force and effect until
the expiration of any license as issued by the Nuclear Regulatory
Commission, or any successor agency, with respect to the plant
under applicable provisions of the Atomic Energy Act of 1954, as
amended from time to time, provided, however, that if the
stockholders of Yankee, by vote of not less than 75% in interest
of the outstanding stock having general voting rights, shall at
any time vote to discontinue the operation of the plant or to
liquidate Yankee and wind up its affairs, the obligations of the
parties hereunder shall thereupon terminate. Notwithstanding the
foregoing, the applicable provisions of this contract shall
continue in effect after any termination hereof to the extent
necessary (I) to complete the ▇▇▇▇▇▇▇▇ and payments required
hereunder with respect to the Customer's obligation to pay its
power percentage of the full cost of decommissioning the plant in
accordance herewith and (ii) to permit final ▇▇▇▇▇▇▇▇ and
adjustments hereunder with respect to all other obligations of
the parties hereunder, including all ▇▇▇▇▇▇▇▇ and adjustments
with respect to the recovery of Yankee's total cost of service,
as provided in Section 6 hereof, until the non-salvageable
investment in plant, nuclear fuel and materials and supplies or
other assets has been fully amortized in accordance herewith.
3. Operation of the Plant
----------------------
Yankee will operate and maintain the plant in accordance
with good utility practice and all applicable laws and rules and
regulations thereunder, including the applicable provisions of
the Atomic Energy Act of 1954.
Yankee reserves the exclusive right to control scheduling of
the operation and maintenance of the plant, including outages for
inspection, maintenance, refueling, and repairs and replacements.
Subject to the foregoing, and until otherwise determined by
Yankee's board of directors, the plant shall be subject to
central dispatch pursuant to Section 12 of the New England Power
Pool Agreement dated as of September 1, 1971, as from time to
time amended.
4. Customer's Entitlement
---------------------
The Customer shall be entitled, throughout the term of this
contract, to its power percentage of the capacity and net
electrical output of the plant.
5. Deliveries and Metering.
-----------------------
Deliveries will be made in the form of three-phase, 60-
cycle, alternating current at a nominal voltage of 115,000 volts,
at a step-up substation owned by Yankee at the plant site. The
Customer will make suitable arrangements for the transmission of
the electricity so delivered to it by Yankee.
Yankee will supply all necessary metering equipment for
determining the quantity and conditions of supply of all
electricity delivered hereunder, and will maintain the accuracy
of such equipment within limits of 2% up or down. In addition to
regular routine tests, Yankee will have any such meter tested at
any time upon the written request of the Customer, and if such
meter shall prove to be accurate within 2% up or down, the
expense of the test shall be borne by the Customer. Yankee will
furnish the Customer monthly, or oftener if requested by the
Customer, with a summary of the meter readings relating to the
services rendered hereunder, and upon request will make available
its metering records for the Customer's inspection and review.
6. Payment
------
With respect to each month commencing on and after April 1,
1985, the Customer will pay Yankee an amount equal to the
Customer's power percentage of the total cost of service for such
month to all customers of Yankee.
The "total cost of service" for any month shall be the sum
of (a) Yankee's operating expenses for such month with respect to
the plant, plus (b) an amount equal to one-twelfth of the
composite percentage for such month of the net plant rate base.
"Uniform System" shall mean the Uniform System of Accounts
prescribed by the Federal Energy Regulatory Commission for Class
A and Class B Public Utilities and Licensees, as from time to
time in effect.
Yankee's "operating expenses" shall include all amounts
properly chargeable to operating expense accounts, less any
applicable credits thereto, in accordance with the Uniform
System; it being understood that for purposes of this contract
"operating expenses" shall include (I) depreciation or
amortization accrued at a rate at least sufficient to fully
amortize over the estimated remaining useful life of the plant
Yankee's non-salvageable investments in plant nuclear fuel and
materials and supplies or other assets, provided, however, that
if a decision is made to cease electricity production at the
plant prior to July 9, 2000, then such remaining non-salvageable
investments shall be amortized over a period extending to July 9,
2000; (ii) obligations incurred in connection with the leasing of
fuel inventory; and (iii) interest charges not associated with
outstanding indebtedness; and (iv) costs incurred in connection
with decommissioning the plant, including (a) the direct and
indirect costs of operating, maintaining or dismantling the spent
fuel storage facilities and other plant facilities after the
cessation of electricity production and (b) the accruals to any
reserve established by Yankee's board of directors to provide for
physical decommissioning of the plant over the estimated
remaining useful life of the plant, provided, however, that if a
decision is made to cease electricity production at the plant
prior to July 9, 2000, then the accruals to the reserve referred
to in clause (b) shall be made over a period extending to July 9,
2000. The parties agree that the timing and amount of any
▇▇▇▇▇▇▇▇ by Yankee of the accrual referred to in the preceding
clause (iv), and the Customer's continuing obligation to pay the
same, are subject to the jurisdiction of the Federal Energy
Regulatory Commission or its successor agency as provided by law.
The aggregate amounts of the annual accrual to the
decommissioning reserve shall be as from time to time approved by
the Federal Energy Regulatory Commission, such amounts to be
accrued in equal monthly installments. Consistent with
paragraphs 1 and 2 of Section 6 of this Power Contract, monthly
payments by the Customer to the decommissioning reserve shall be
equal to the Customer's power percentage of the total
decommissioning accrual for that month.
Composite percentage shall be computed as of the last day of
each month (the "computation date") and for any month the
composite percentage shall be that computed as of the last day of
the previous month. Composite percentage as of a computation
date shall be the sum of (I) the annual percentage rate for
return on equity then in effect as authorized by the Federal
Energy Regulatory Commission multiplied by the percentage which
equity investment (excluding any equity investment which relates
to construction work in progress not included in net plant rate
base) as of such date is of the total capital as of such date;
plus (ii) the effective interest rate per annum of each principal
amount of indebtedness (excluding any principal amount of
indebtedness which relates to construction work in progress not
included in net plant rate base) outstanding on such date for
money borrowed multiplied by the percentage which such principal
amount is of total capital as of such date.
"Equity investment" as of any date shall consist of the sum
of (I) all amounts theretofore paid to Yankee for all capital
stock theretofore issued, plus all capital contributions, less
the sum of any amounts paid by Yankee in the form of stock
retirements, repurchases or redemptions or return of capital;
plus (ii) any credit balance in the capital surplus account not
included under (I) and any credit balance in the earned surplus
account on the books of Yankee as of such date.
"Total capital" as of any date shall be the equity
investment plus the total of all indebtedness then outstanding
for money borrowed.
The "net plant rate base" shall be determined monthly and
shall consist of (I) the aggregate amount properly chargeable to
Yankee's utility plant accounts, including nuclear fuel accounts,
in accordance with the Uniform System; less (ii) the amount of
any accumulated provisions for depreciation and for amortization
of nuclear fuel assemblies (exclusive of any decommissioning
reserve); plus or less (iii) amounts recorded in accumulated
deferred income tax accounts, as appropriate, in accordance with
the applicable section of the regulation issued by the Federal
Energy Regulatory Commission (which as of the date hereof is
codified at 18 C.F.R. section 35.25); plus (iv) such allowances
for materials, supplies, and prepaid items as may from time to
time be determined by Yankee's board of directors; plus (v)
allowances for cash working capital as permitted from time to
time by the Federal Energy Regulatory Commission or its successor
agency; plus (vi) the amount of any unamortized deferred
expenses, as permitted from time to time by the Federal Energy
Regulatory Commission or its successor agency; plus (vii) to the
extent not provided for elsewhere in this paragraph, the
remaining unamortized amount of the non-salvageable investment in
plant, nuclear fuel and materials and supplies and other assets.
Payments shall be made in cash promptly after receipt by the
Customer of statements rendered by Yankee in such detail as the
Customer may reasonably require. Such statements may be rendered
on an estimated basis subject to corrective adjustments in
subsequent billing periods. Simple interest at the prime rate
then in effect at The First National Bank of Boston shall accrue
on any payment delayed beyond thirty days after receipt by the
Customer of a monthly statement. If any payment (other than
amounts in dispute) shall be delayed beyond six months, Yankee
may, by written notice, terminate this contract at the end of the
next succeeding calendar month.
Notwithstanding any other provision of this contract, the
treatment of construction work in progress for purposes of any
calculations relevant to the computation of monthly payments
under this Section 6 shall conform to the applicable section of
the Federal Energy Regulatory Commission's regulations respecting
such items (which as of the date of this Amendment hereof is
codified at 18 C.F.R. section 35.26), as such regulations may be
modified from time to time.
7. Audit
-----
Yankee's books and records, insofar as they pertain to the
service rendered hereunder or to any charges made therefor, shall
be open to the Customer's inspection and audit.
8. Arbitration
-----------
In case any dispute shall arise as to the interpretation of
this contract which cannot be settled by mutual agreement, such
dispute shall be submitted to arbitration. The parties shall, if
possible, agree upon a single arbitrator. In case of failure to
agree upon an arbitrator within 15 days after the deliver by
either party to the other of a written notice requesting
arbitration, either party may request the American Arbitration
Association to appoint the arbitrator. The arbitrator, after
opportunity for each of the parties to be heard, shall consider
and decide the dispute and notify the parties in writing of his
decision. Such decision shall be binding upon the parties, and
the expense of the arbitration shall be borne equally by them.
9. Regulation
----------
Performance of this contract is subject to all applicable
state and federal laws and to all rules, regulations and orders
properly issued thereunder by any governmental agency having
jurisdiction in the premises.
10. Effective Date
--------------
This revised contract shall become effective on April 1,
1985, subject to any suspension order duly issued by the Federal
Energy Regulatory Commission.
11. Amendments
----------
Upon authorization by its board of directors of a uniform
amendment to all customer power contracts, Yankee shall have the
right to amend the provisions of Section 6 hereof by serving an
appropriate statement of such amendment upon the Customer and
filing the same with the Federal Energy Regulatory Commission (or
such other regulatory agency as may have jurisdiction in the
premises) in accordance with the provisions of applicable laws
and any rules and regulations thereunder, and the amendment shall
thereupon become effective on the date specified therein, subject
to any suspension order duly issued by such agency. All other
amendments to this contract shall be by mutual agreement,
evidenced by a written amendment signed by the parties hereto.
12. Interpretation
--------------
The interpretation and performance of this contract shall be
in accordance with and controlled by the laws of the Commonwealth
of Massachusetts.
13. Addresses
---------
Except as the parties may from time to time otherwise agree,
any notice, request, demand, statement, ▇▇▇▇ or payment provided
for in this contract or any other notice which either party may
desire to give to the other, shall be in writing and shall be
effective upon delivery to the other party. Any such
communication shall be considered as duly delivered when mailed
by either registered or ordinary mail to the respective post
office addresses shown following the signatures of the parties
hereto.
14. Corporate Obligation
--------------------
This contract is the corporate act and obligation of the
parties hereto, and any claim hereunder against any stockholder,
director or officer of either party, as such, is expressly
waived."
IN WITNESS WHEREOF the parties have executed this revised
contract by their respective officers thereunto duly authorized
as of the captioned date.