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Exhibit 10.25
Memorandum of Understanding
This MEMORANDUM OF UNDERSTANDING is made and entered into as of June
26, 2000, by and between PPL EnergyPlus, LLC, a Pennsylvania limited liability
company, having its principal business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇, hereinafter referred to as "Buyer" or "PPL EnergyPlus," and PPL
Montana, LLC, a Delaware limited liability company, having its principal
business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ hereinafter
referred to as "Seller" Or "PPLM" (individually, the "Party" and collectively,
the "Parties").
WHEREAS, PPLM and PPL EnergyPlus are affiliates, and neither has a
franchised service territory;
WHEREAS, PPLM owns certain generating facilities ("the Generating
Facilities") and desires to sell or make exclusively available all or a portion
of the output of those facilities to PPL EnergyPlus so that PPL EnergyPlus may
market such output in a manner that is beneficial to PPLM and PPL EnergyPlus;
WHEREAS, PPLM is authorized by FERC to sell electric energy,
capacity and ancillary services at market-based rates and to resell transmission
rights and associated ancillary services pursuant to PPLM's FERC Electric
Tariff, Original Volume No. 1 ("Market-Based Rate Tariff"); and
WHEREAS, PPLM and PPL EnergyPlus have executed a Service Agreement
under PPLM's Market-Based Rate Tariff; and
WHEREAS, the Parties desire to set forth certain terms and
conditions applicable to the sale and marketing of the Contract Products.
NOW THEREFORE, in consideration of the mutual agreements, covenants
and conditions herein contained, and intending to be legally bound, PPL
EnergyPlus and PPLM hereby agree as follows:
Article 1
Definitions
The following terms shall have the meanings ascribed to them:
"Contract Product Price" means the price of each Contract Product as
set forth in Article 3.
"Contract Products" means: wholesale energy, capacity and ancillary
services produced from the Generating Facilities.
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"Contract Quantity" shall mean the quantity of Contract Products as
determined under Sections 2.1 and 2.2 of this MOU.
"FERC" means the Federal Energy Regulatory Commission or any
successor agency.
"PPL EnergyPlus Supply Obligation" means a contractual obligation of
PPL EnergyPlus to supply Contract Products to retail customers.
"Transfer Price" shall have the meaning set forth in Section 3.2.
Article 2
Commitments of the Parties
2.1 Energy and Capacity. PPLM shall sell to PPL EnergyPlus a
Contract Quantity of energy and capacity equal to: The retail load requirements
of PPL EnergyPlus in the Western Systems Coordinating Council region. Provided,
however that the amount sold to PPL EnergyPlus is net of the quantity of energy
and capacity that PPLM is required to sell to third parties under its then
existing wholesale contracts.
2.2 Ancillary Services. PPLM shall sell to PPL EnergyPlus a Contract
Quantity of ancillary services equal to: The requirements for ancillary services
in the Western Systems Coordinating Council region. Provided, however that the
amount sold to PPL EnergyPlus is net of the quantity of ancillary services that
PPLM is required to sell to third parties under its then existing wholesale
contracts.
2.3 Retail Sales. PPL EnergyPlus may resell the Contract Products at
retail and shall have the sole authority to enter into and responsibility for
such sales.
Article 3
Contract Product Price
3.1 Transfer. PPL EnergyPlus shall transfer on a monthly basis to
PPLM an amount equal to the product of (a) the Contract Product Price, and (b)
the Contract Quantity for each Contract Product sold in such month.
3.2 The Contract Product Price. The Contract Product Price for
Contract Products that PPL EnergyPlus purchases from PPLM shall be either a
fixed or floating rate based upon the pricing structure of the underlying supply
obligation between PPL EnergyPlus and its customer and shall be as follows:
(a) Fixed Price. For any PPL EnergyPlus Supply Obligation that is
based on a flat, fixed price the Contract Product Price shall be the Mid-C
forward market price based on the term of the PPL EnergyPlus Supply Obligation
in effect as of the date such obligation arose. Such Mid-C forward market price
shall be agreed
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to by both PPL EnergyPlus and PPLM. The Fixed Price shall not be adjusted or
amended during the term of the transaction.
(b) Floating Price. For any PPL EnergyPlus Supply Obligation that is
based on a floating price the Contract Product Price shall vary throughout the
term of the PPL EnergyPlus Supply Obligation and shall be adjusted monthly based
upon the average daily Mid-C settlement price for the then current month plus
$1.00/MWh.
(c) Combination Fixed Price and Floating Price. For any Contract
Product purchased by PPL EnergyPlus from PPLM that is based upon a PPL
EnergyPlus Supply Obligation that combines flat and index pricing, the Fixed
Price and Floating Price mechanisms referenced previously in this section will
apply to such fixed and index portions of the PPL EnergyPlus Supply Obligation.
Article 4
Term of MOU
The term of this MOU shall commence on the first full day that PPLM
owns the Generating Facilities and shall remain in effect until December 31,
2000;
Article 5
Credit and Risk Management
Transactions undertaken pursuant to this MOU shall be in accordance
with the Risk Management Protocol issued by the PPL Corporation Risk Management
Committee.
Article 6
Assignment and Succession
Neither Party shall assign this MOU or its rights hereunder.
Article 7
Miscellaneous
7.1 Regulatory. It is understood by the Parties that this MOU and
performance hereunder is subject to all present and future valid and applicable
laws, orders, statutes, and regulations of courts or regulatory bodies (state or
federal) having jurisdiction over PPL EnergyPlus, PPLM, this MOU or any
Transaction hereunder.
7.2 Authorizations. The Parties hereto represent that they have, or
will have at the time of documentation of any transaction and at the time of
scheduling, delivery or receipt of the Contract Products, all appropriate
authorizations necessary or proper to consummate this MOU.
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7.3 Monitoring and Recording. Each Party acknowledges and consents
to the monitoring and recording of all telephone conversations between its
representatives and the representatives of the other Party.
7.4 Notices. Any notice given pursuant to this MOU shall be in
writing and delivered to the following:
PPL EnergyPlus:
NOTICES & CORRESPONDENCE INVOICES
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PPL EnergyPlus, LLC PPL EnergyPlus, LLC
Two North Ninth Street Two North Ninth Street
Allentown, PA 18101-1179 ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Manager, Electric Trading (GENTW2O) Attn: Cash Receipts (GENN2B)
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
PPLM:
NOTICES & CORRESPONDENCE PAYMENTS
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PPL Montana, LLC PPL Montana, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ Two North Ninth Street
Billings, MT 59101 ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: General Counsel Attn: Cash Receipts (GENN2B)
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
7.5 Non-Waiver. No waiver by either Party hereto of any one or more
defaults by the other in the performance of any of the provisions of this MOU
shall be construed as a waiver of any other default or defaults whether of a
like kind or different nature.
IN WITNESS WHEREOF, each Party has caused this MOU to be signed by
its duly authorized officer as of the date first above written. This MOU may be
executed in counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument.
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OFFICE OF
GENERAL COUNSEL
BY: /s/ ILLEGIBLE
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DATE: 6/29/00
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PPL Energy Plus, LLC PPL Montana, LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: President - PPL Energy Plus, LLC Title: V.P & General Counsel
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