EXHIBIT B-1.5
UTILITY SERVICE AGREEMENT
This Service Agreement (this "Agreement") is entered into as of the 1st
day of January, 2001, by and between Louisville Gas and Electric Company
("LG&E"), a public utility organized under Kentucky law; and LG&E Energy
Services Inc., a Kentucky corporation ("LG&E Energy Services").
WHEREAS, LG&E Energy Services is a direct or indirect wholly owned
subsidiary of LG&E Energy Corp.;
WHEREAS, LG&E Energy Services has been formed for the purpose of
providing administrative, management and other services to subsidiaries and
affiliates of LG&E Energy Corp.;
WHEREAS, LG&E believes that it is in the interest of LG&E to provide
for an arrangement whereby LG&E may, from time to time and at the option of
LG&E, agree to purchase such administrative, management and other services from
LG&E Energy Services; and
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. SERVICES. LG&E Energy Services supplies, or will supply, certain
administrative, management or other services to LG&E similar to those supplied
to other subsidiaries or affiliates of LG&E Energy Corp. Such services are and
will be provided to LG&E only at the request of LG&E. Exhibit A hereto lists and
describes all of the services that are available from LG&E Energy Services.
2. PERSONNEL. LG&E Energy Services provides and will provide such services
by utilizing the services of their executives, accountants, financial advisers,
technical advisers, attorneys and other persons with the necessary
qualifications.
If necessary, LG&E Energy Services, after consultation with LG&E, may
also arrange for the services of nonaffiliated experts, consultants and
attorneys in connection with the performance of any of the services supplied
under this Agreement.
3. COMPENSATION AND ALLOCATION. As and to the extent required by law, LG&E
Energy Services provides and will provide such services at fully allocated cost.
Exhibit A hereof contains rules for determining and allocating such costs.
4. COMPLIANCE. All contracts, agreements, or arrangements of any kind,
hereafter required to be filed with and/or approved by the Securities and
Exchange Commission ("SEC") pursuant to the Public Utility Holding Company Act
of 1935, as subsequently amended, between Louisville Gas and Electric Company or
Kentucky Utilities Company, and any affiliate,
associate, holding, mutual service or subsidiary company, within the same
holding company system, as these terms are defined in 15 U.S.C. Section 79b as
it presently exists or as subsequently amended, shall contain and be
conditioned upon the following without modification or alteration:
Louisville Gas and Electric Company ("LG&E") and Kentucky Utilities
Company ("KU") will not seek to overturn, reverse, set aside, change or
enjoin, whether through appeal or the initiation or maintenance of any
action in any forum, a decision or order of the Kentucky Public Service
Commission, or the Virginia State Corporation Commission which pertain
to recovery, disallowance, allowance, deferral or ratemaking treatment
of any expense, charge, cost or allocation incurred or accrued by LG&E
or KU in or as a result of a contract, agreement, arrangement, or
transaction with any affiliate, associate, holding, mutual service or
subsidiary company on the basis that such expense, charge, cost or
allocation: (1) has itself been filed with or approved by the SEC or
(2) was incurred pursuant to a contract, agreement, or allocation
method which was filed with or approved by the SEC.
5. TERMINATION AND MODIFICATION. Any party to this Agreement may terminate
this Agreement by providing 60 days written notice of such termination to the
remaining parties.
This Agreement is subject to termination or modification at any time to
the extent its performance may conflict with the provisions of the Public
Utility Holding Company Act of 1935, as amended, or with any rule, regulation or
order of the Securities and Exchange Commission adopted before or after the
making of this Agreement. This Agreement shall be subject to the approval of any
state commission or other state regulatory body whose approval is, by the laws
of said state, a legal prerequisite to the execution and delivery or the
performance of this Agreement.
6. SERVICE REQUESTS. LG&E and LG&E Energy Services will prepare a Service
Request on or before December 31 of each year listing services to be provided to
LG&E by LG&E Energy Services and any special arrangements related to the
provision of such services for the coming year, based on services provided
during the past year. LG&E and LG&E Energy Services may supplement the Service
Request during the year to reflect any additional or special services that LG&E
wishes to obtain from LG&E Energy Services, and the arrangements relating
thereto.
7. BILLING AND PAYMENT. Unless otherwise set forth in a Service Request,
payment for services provided by LG&E Energy Services shall be by making
remittance of the amount billed or by making appropriate accounting entries on
the books of LG&E and LG&E Energy Services. Billing will be made on a monthly
basis, with the ▇▇▇▇ to be rendered by the 25th of the month, and remittance or
accounting entries completed within 30 days of billing. Any amount remaining
unpaid after 30 days following receipt of the ▇▇▇▇ shall bear interest thereon
from the date of the ▇▇▇▇ at annual rate of A1/P1 30-day Commercial Paper.
8. NOTICE. Where written notice is required by this Agreement, all
notices, consents, certificates, or other communications hereunder shall be
in writing and shall be deemed given
when mailed by United States registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
1. To LG&E:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
2. To LG&E Energy Services:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Kentucky, without regard to their
conflict of laws provisions.
10. MODIFICATION. No amendment, change or modification of this Agreement
shall be valid, unless made in writing and signed by all parties hereto.
11. ENTIRE AGREEMENT. This Agreement, together with its exhibits,
constitutes the entire understanding and agreement of the parties with respect
to its subject matter, and effective upon the execution of this Agreement by the
respective parties hereof and thereto, any and all prior agreements,
understandings or representations with respect to this subject matter are hereby
terminated and canceled in their entirety and are of no further force and
effect.
12. WAIVER. No waiver by any party hereto of a breach of any provision of
this Agreement shall constitute a waiver of any preceding or succeeding breach
of the same or any other provision hereof.
13. ASSIGNMENT. This Agreement shall inure to the benefit and shall be
binding upon the parties and their respective successors and assigns. No
assignment of this Agreement or any party's rights, interests or obligations
hereunder may be made without the other party's consent, which shall not be
unreasonably withheld, delayed or conditioned.
14. SEVERABILITY. If any provision or provisions of this Agreement shall be
held by a court of competent jurisdiction to be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall in no way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of this 1st day of January, 2001.
LG&E Energy Services Inc.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Louisville Gas and Electric Company
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President, Energy Services
EXHIBIT A
DESCRIPTION OF SERVICES AND ALLOCATION FACTORS
Cost Assignment
LG&E Services' costs accumulated for each activity, project, programs,
or work order will be directly assigned, distributed or allocated as follows:
(i) Costs accumulated in an activity, project, program or work
order for services specifically performed for a single Client
Entity will be directly assigned and charged to such entity.
(ii) Costs accumulated in an activity, project, program or work
order for services specifically performed for two or more
Client Entities will be distributed among and charged to such
Client Entities using methods determined on a case-by-case
basis consistent with the nature of the work performed and
based on one of the allocation methods described below.
(iii) Costs accumulated in an activity, project, program or work
order for services of a general nature which are applicable to
all Client Entities or to a class or classes of Client
Entities will be allocated among and charged to such Client
Entities by application of one or more of the allocation
methods described below.
Allocation Methods
The following methods will be applied, as indicated in the Description
of Services section that follows, to allocate costs for services of a general
nature.
1. INFORMATION SYSTEMS CHARGEBACK RATES - Rates for services, including but not
limited to software, consulting, mainframe and personal computer services, are
based on the costs of labor, materials and information services overheads
related to the provision of each service. Such rates are applied based on the
specific equipment employed and the measured usage of services by Client
entities. These rates will be determined annually based on actual experience and
may be adjusted for any known and reasonably quantifiable events, or at such
time as may be required due to significant changes.
2. NUMBER OF CUSTOMERS RATIO - A ratio based on the number of retail electric
and/or gas customers. This ratio will be determined annually based on the actual
number of customers at the end of the previous calendar year and may be adjusted
for any known and reasonably quantifiable events, or at such time as may be
required due to significant changes. In some cases, the ratio may be calculated
based on the type of customer class being served (i.e. Residential, Commercial
or Industrial).
3. PAYROLL RATIO - Based on the sum of the payroll at the end of each month for
the immediately preceding twelve consecutive calendar months, the numerator of
which is for an operating company or an affected affiliate company and the
denominator of which is for all operating companies and affected affiliate
companies. This ratio will be determined annually, or at such time as may be
required due to significant changes.
4. THREE FACTOR FORMULA - This formula will be determined annually based on the
average of gross property (original cost of plant in service, excluding
depreciation), payroll charges (salaries and wages, including overtime, shift
premium and holiday pay, but not including pension, benefit and company-paid
payroll taxes) and gross revenues during the previous calendar year and may be
adjusted for any known and reasonably quantifiable events, or at such time as
may be required due to significant changes.
5. TELECOMMUNICATIONS CHARGEBACK RATES - Rates for use of telecommunications
services other than those encompassed by Information Systems Chargeback Rates
are based on the costs of labor, materials, outside services and
telecommunications overheads. Such rates are applied based on the specific
equipment employment and the measured usage of services by Client entities.
These rates will be determined annually based on actual experience and may be
adjusted for any known and reasonably quantifiable events, or at such time as
may be required due to significant changes.
6. GAS SALES RATIO - A ratio based on the actual number of MCF of natural gas
sold by the applicable gas distribution or marketing operations. This ratio will
be determined annually based on actual results of operations for the previous
calendar year and may be adjusted for any known and reasonably quantifiable
events, or at such time, based on results of operations for a subsequent
twelve-month period, as may be required due to significant changes.
7. TRANSMISSION CONSTRUCTION EXPENDITURES RATIO - A ratio based on transmission
construction or capital expenditures, net of reimbursements, for the immediately
preceding twelve consecutive calendar months. The numerator is equal to such
expenditures for a specific Client entity and the denominator is equal to such
expenditures for all applicable client entities. This ratio will be determined
annually, or at such time as may be required due to significant change.
8. DISTRIBUTION CONSTRUCTION EXPENDITURES RATIO - A ratio based on distribution
construction or capital expenditures, net of reimbursements, for the immediately
preceding twelve consecutive calendar months. The numerator is equal to such
expenditures for a specific Client entity and the denominator is equal to such
expenditures for all applicable Client entities. This ratio will be determined
annually, or at such time as may be required due to a significant change.
9. SUBSTATION CONSTRUCTION EXPENDITURES RATIO - A ratio based on substation
construction or capital expenditures, net of reimbursements, for the immediately
preceding twelve consecutive calendar months. The numerator is equal to such
expenditures for a specific Client entity and the denominator is equal to such
expenditures for all applicable Client entities. This ratio will be determined
annually, or at such time as may be required due to a significant change.
10. ELECTRIC MWh GENERATION RATIO - A ratio based on the sum of electric MWh
generated during each month for the immediately preceding twelve consecutive
calendar months. The numerator is equal to the electric MWh generated by a
specific Client entity and the denominator is equal to all electric MWh
generated by all applicable Client entities. This ratio will be determined
annually, or at such time as may be required due to significant changes.
11. ELECTRIC SALES RATIO - Based on firm kilowatt-hour electric sales, excluding
inter-system sales, for the immediate preceding twelve consecutive calendar
months, the numerator of which is for an operating company or and affiliate and
the denominator of which is for all operating companies and affected affiliate
companies. This ratio will be determined annually, or at such time as may be
required due to a significant change.
12. TRANSPORTATION RATIO - Based on the actual usage of vehicles in the fleet
for the immediately preceding twelve consecutive calendar months, the numerator
of which is for an operating company or an affiliate and the denominator of
which is for all operating companies and affected affiliate companies. This
ratio will be determined annually, or at such time as may be required due to a
significant change.
13. NUMBER OF EMPLOYEES RATIO - A ratio based on the number of employees
benefiting from the performance of a service. This ratio will be determined
annually based on actual counts of applicable employees at the end of the
previous calendar year and may be adjusted for any known and reasonably
quantifiable events, or at such time as may be required due to significant
changes. In some cases, a two-step assignment methodology is utilized to
properly allocate SERVCO employee costs to the proper legal entity.
14. DEPARTMENTAL CHARGE RATIO - A specific SERVCO department ratio based upon
various factors such as labor hours, labor dollars, departmental or Client
entity headcount, etc. The departmental charge ratio typically applies to
indirectly attributable costs (defined in Section V, Cost Apportionment
Methodology) such as departmental administrative, support, and/or material and
supply costs that benefit more than one affiliate and that require allocation
using general measures of cost causation. Methods for assignment are
department-specific depending on the type of product or service being performed
and are documented and monitored by the PUHCA Compliance Manager on a monthly
basis to ensure consistent and proper application and periodic true-up, where
necessary, for SERVCO billing purposes.
15. ELECTRIC PEAK LOAD RATIO - Based on the sum of the monthly electric maximum
system demands for the immediately preceding twelve consecutive calendar months,
the numerator of which is for an operating company and the denominator of which
is for all operating companies. This ratio will be determined annually, or at
such time as may be required due to a significant change.
16. REVENUE RATIO - Based on the sum of the revenue at the end of each month for
the immediately preceding twelve consecutive calendar months, the numerator of
which is for an operating company or an affected affiliate company and the
denominator of which is for all
operating companies and affected affiliate companies. This ratio will be
determined annually, or at such time as may be required due to significant
changes.
17. TOTAL ASSETS RATIO - Based on the total assets at year end for the preceding
year, the numerator of which is for an operating company or affected affiliate
company and the denominator of which is for all operating companies and affected
affiliate companies. This ratio will be determined annually, or at such time as
may be required due to significant changes. In the event of joint ownership of a
specific asset, asset ownership percentages will be utilized to assign costs.
18. CONTRACT RATIO - Based on the sum of the physical amount (i.e. tons of coal,
cubic feet of natural gas) of the contract for both coal and natural gas at the
end of each month for the immediately preceding twelve consecutive calendar
months, the numerator of which is for an operating company or an affected
affiliate company and the denominator of which is for all operating companies
and affected affiliate companies. This ratio will be determined annually, or at
such time as may be required due to significant changes.
19. SHAREHOLDER RATIO - Based on the average number of preferred shareholders at
the end of each month for the immediately preceding twelve consecutive calendar
months, the numerator of which is for an operating company or an affected
affiliate company and the denominator of which is for all operating companies
and affected affiliate companies. This ratio will be determined on an annual
basis, or at such time as may be required due to significant changes.
20. SUPPLIER SPEND RATIO - Based on the sum of dollars spent with suppliers for
the immediately preceding twelve consecutive calendar months, the numerator of
which is for an operating company or an affected affiliate company and the
denominator of which is for all operating companies and affected affiliate
companies. This ratio will be determined on a monthly basis, or at such time as
may be required due to significant changes.
21. NUMBER OF TRANSACTIONS RATIO - Based on the sum of transactions occurring in
the immediately preceding twelve consecutive calendar months, the numerator of
which is for an operating company or an affected affiliate company and the
denominator of which is for all operating companies and affected affiliate
companies. This ratio will be determined on a monthly basis, or at such time as
may be required due to significant changes. For example, services with regard to
Procurement and Major Contracts would define a transaction as the number of
contracts negotiated. Services pertaining to Materials Logistics would define
the transaction as the number of items ordered, picked and disbursed out of the
warehouse. Services pertaining to Accounts Payable would define the transaction
as the number of invoices processed. Similar to the Departmental Charge Ratio,
defined previously, the PUHCA Compliance Manager is responsible for maintaining
and monitoring specific product/service methodology documentation and periodic
true-up requirements for actual transactions related to SERVCO ▇▇▇▇▇▇▇▇.
22. RETAIL REVENUE RATIO - Based on utility revenues, excluding energy marketing
revenues, for the immediate preceding twelve consecutive calendar months, the
numerator of
which is for an operating company or an affiliate and the denominator of which
is for all operating companies and affected affiliate companies. This ratio will
be determined annually, or at such time as may be required due to a significant
change.
23. ENERGY MARKETING RATIO - Based on the absolute value of equivalent megawatt
hours purchased or sold for the immediate preceding twelve consecutive calendar
months, the numerator of which is for an operating company or an affiliate and
the denominator of which is for all operating companies and affected affiliate
companies. This ratio will be determined annually, or at such time as may be
required due to a significant change.
24. REGULATORY MANDATE RATIOS - Based on Federal or state mandated percentage
allocations based on regulatory proceedings and requirements. These ratios are
typically developed in concert with regulatory authorities representing the
results of merger or joint asset ownership negotiations and are supported by
specific contracts regarding legal entity allocation requirements. Contract
terms and periodic updates, if necessary, are maintained and monitored by the
PUHCA Compliance Manager and SERVCO departmental management.
25. PROJECT RATIO - Based on the total costs for any departmental or affiliate
project at the end of each month for the immediately preceding twelve
consecutive calendar months, the numerator of which is for an operating company
or an affected affiliate company and the denominator of which is for all
operating companies and affected affiliate companies. This ratio will be
determined on a monthly basis, or at such time as may be required due to
significant changes.
26. TRANSPORTATION RESOURCE MANAGEMENT SYSTEM CHARGEBACK RATE - Rates for use of
transportation equipment are based on the costs associated with providing and
operating transportation fleet for all affiliated companies including developing
fleet policy, administering regulatory compliance programs, managing repair and
maintenance of vehicles and procuring vehicles. Such rates are applied based on
the specific equipment employment and the measured usage of services by Client
entities. These rates will be determined annually based on actual experience and
may be adjusted for any known and reasonably quantifiable events, or at such
time as may be required due to significant changes.
27. NON-FUEL MATERIAL AND SERVICES EXPENDITURES - A ratio based on non-fuel
material and services expenditures, net of reimbursements, for the immediately
preceding twelve consecutive calendar months. The numerator is equal to such
expenditures for a specific Client entity and/or line-of-business as appropriate
and the denominator is equal to such expenditures for all applicable Client
entities. This ratio will be determined annually, or at such time as may be
required due to a significant change.
28. NUMBER OF METERS RATIO - Ratio based on the number or types of meters being
utilized by all levels of customer classes within the system for the immediately
preceding twelve consecutive calendar months. The numerator is equal to the
number of meters for a specific Client entity and the denominator is equal to
such expenditures for all applicable client entities. This ratio will be
determined annually, or at such time as may be required due to significant
change.
29. RESIDENTIAL SALES RATIO - Based on firm kilowatt-hour electric sales to
residential customers for the immediate preceding twelve consecutive calendar
months, the numerator of which is for an operating company or an affiliate and
the denominator or which is for all operating companies and affected affiliate
companies. This ratio will be determined annually, or at such time as may be
required due to a significant change.
30. BUSINESS SALES RATIO - Based on firm kilowatt-hour electric sales to
business customers that purchase less than 250 kilowatts for the immediate
preceding twelve consecutive calendar months, the numerator of which is for an
operating company or an affiliate and the denominator of which is for all
operating companies and affected affiliate companies. This ratio will be
determined annually, or at such as may be required due to a significant change.
31. LARGE COMMERCIAL & INDUSTRIAL SALES RATIO - Based on firm kilowatt-hour
electric sales to large commercial and industrial customers that purchase
greater than 250 kilowatts for the immediate preceding twelve consecutive
calendar months, the numerator of which is for an operating company or an
affiliate and the denominator of which is for all operating companies and
affected affiliate companies. This ratio will be determined annually, or at such
time as may be required due to a significant change.
32. CONSTRUCTION EXPENDITURES RATIO - Based on construction or capital
expenditures, net of reimbursements, for the immediately preceding twelve
consecutive calendar months, the numerator of which is for an operating company
or an affected affiliate company and the denominator of which is for all
operating companies and affected affiliate companies. This ratio will be
determined annually, or at such time as may be required due to a significant
change.
33. TOTAL COMMON EQUITY RATIO - Based on the sum of the common equity at the end
of each month for the immediately preceding twelve calendar months, the
numerator of which is for an operating company or an affected affiliate company
and the denominator of which is for all operating companies and affected
affiliate companies. This ratio will be determined annually, or at such time as
may be required due to significant changes.
34. WHOLESALE REVENUE RATIO - Based on the sum of the electric wholesale revenue
at the end of each month for the immediately preceding twelve consecutive
calendar months, the numerator of which is for an operating company or an
affected affiliate company and the denominator of which is for all operating
companies and affected affiliate companies. This ratio will be determined
annually, or at such time as may be required due to significant changes.
35. INDUSTRIAL REVENUE RATIO - Based on the sum of the electric industrial
revenue at the end of each month for the immediately preceding twelve
consecutive calendar months, the numerator of which is for an operating company
or an affected affiliate company and the denominator or which is for all
operating companies and affected affiliate companies. This ratio will be
determined annually, or at such time as may be required due to significant
changes.
36. ELECTRIC kWh PURCHASED POWER RATIO - Based on the sum of electric kWh
purchased power during each month for the immediately preceding twelve
consecutive calendar months,
the numerator of which is for an operating company and the denominator of which
is for all operating companies. This ratio will be determined annually, or at
such time as may be required due to significant changes.
Description of Services
A description of each of the services performed by LG&E Energy
Services Inc., which may be modified from time to time, is presented below. As
discussed above, where identifiable, costs will be directly assigned or
distributed to Client Entities. For costs accumulated in an activity, project,
program or work order which are for services of a general nature that can not
be directly assigned or distributed, the method or methods of allocation are
also set forth. Substitution or changes may be made in the methods of allocation
hereinafter specified, as may be appropriate, and will be provided to state
regulatory agencies and to each affected Client Entity.
1. Information Systems Services - Provides electronic data processing services.
Costs of a general nature are allocated using the following method(s):
Information Systems Chargeback Rates
2. Customer Services - Provides billing, mailing, remittance processing, call
center and customer communication services for customers. Costs of a general
nature are allocated using the following method(s): Number of Customer Ratio,
Revenue Ratio
3. Marketing and Sales - Establishes strategies, provides oversight for
marketing, sales and branding of utility and related services, conducts
marketing and sales programs, and economic development. Costs of a general
nature are allocated using the following method(s): Departmental Charge Ratio
4. Employee Services - Includes Human Resources which establishes and
administers policies and oversees compliance with regulations in the areas of
employment, compensation and benefits, processes payroll and administers
corporate training. Also includes employee communications, facilities management
and mail services. Costs of a general nature are allocated using the following
method(s): Number of Employees Ratio, Departmental Charge Ratio
5. Corporate Compliance - Oversees compliance with all laws, regulations and
policies applicable to all of LG&E Energy Corp.'s businesses and directs
compliance training.
6. Purchasing - Provides procurement services. Costs of a general nature are
allocated using the following method(s): Non-Fuel Materials and Services
Expenditures Ratio, Number of Transactions Ratio
7. Financial Services - Provides treasury, accounting, tax, financial planning,
regulatory and auditing services. Costs of a general nature are allocated using
the following method(s): Revenue, Total Assets and Payroll Ratios, Departmental
Charge Ratio, Number of Transactions Ratio, Number of Employees Ratio, Project
Ratio, Retail Revenue Ratio
8. Risk Management - Provides insurance, claims, security, and safety services.
Costs of a general nature are allocated using the following method(s):
Outsourced - Direct charges only
9. Public Affairs and Regulatory - Maintains relationships with government
policy makers, provides regulatory analysis and compliance filings, conducts
lobbying activities and provides community relations functions. Costs of a
general nature are allocated using the following method(s): Revenue Ratio
10. Legal Services - Provides various legal services and general legal
oversight; handles claims. Costs of a general nature are allocated using the
following method(s): Departmental Charge Ratio
11. Investor Relations - Maintains relationships with the financial community
and provides shareholder services. Costs of a general nature are allocated using
the following method(s): Shareholder Ratio
12. Telecommunications - Provides telecommunications services, primarily the use
of telephone equipment. Costs of a general nature are allocated using the
following method(s): Information Systems Chargeback Rates
13. Gas Supply and Capacity Management - Provides gas supply and capacity
management services.
14. Transmission, Substation Construction, Maintenance & Operations - Provides
management services for transmission and substation construction, maintenance
and operations areas. Costs of a general nature are allocated using the
following method(s): Departmental Charge Ratio
15. Meter Reading, Repair and Maintenance - Provides services related to meter
reading and the repair and maintenance of meters. Costs of a general nature are
allocated using the following method(s): Departmental Charge Ratio, Number of
Meters Ratio
16. Design Engineering - Designs and monitors construction of electric
generation assets and transmission and distribution lines and substations. Costs
of a general nature are allocated using the following method(s): Total Assets
Ratio, Departmental Charge Ratio, Electric Peak Load Ratio
17. Substation Engineering and Support - Provides management support services to
the Substation Engineering and Support organizations of the Operating Companies.
Costs of a general nature are allocated using the following method(s):
Departmental Charge Ratio
18. Resource Acquisition and Analysis - Procures coal, natural gas and oil for
the generation facilities of Client Entities. Also ensures compliance with price
and quality provisions of fuel contracts and arranges for transportation of fuel
to the desired location, and completes analyses as required on all fuel used for
generation. Costs of a general nature are allocated using the following
method(s): Contract Ratio, Departmental Charge Ratio
19. Purchased Power and Electric Trading - Purchases power and provides electric
trading services to the Operating Companies' electric generation systems and all
other trading functions. Costs of a general nature are allocated using the
following method(s): Energy Marketing Ratio, Regulatory Mandate Ratio
20. Strategic Planning - Develops corporate strategies and business plans. Costs
of a general nature are allocated using the following method(s): Direct Charge
Only
21. Executive - Provides executive and general administration services. Costs of
a general nature are allocated using the following method(s): Departmental
Charge Ratio
22. Environmental Affairs - Performs analyses and advocacy of regulatory and
legislative issues in the areas of environment. Communicates final regulatory
requirements to Operating Groups. Provides assistance, support and compliance
review in meeting those requirements. Oversees hazardous substance site
investigations and remediation activities. Costs of a general nature are
allocated using the following method(s): Departmental Charge Ratio
23. Energy Supply - Coordinates the use of the generating, transmission and
interconnection facilities to provide economical and reliable energy. Costs of a
general nature are allocated using the following method(s): Regulatory Mandate
Ratio
24. Transportation - Operates transportation fleet for the Operating Companies
and affiliates. Provides engineering, support, mechanical servicing of vehicles,
and procurement of vehicles. Costs of a general nature are allocated using the
following method(s): Transportation Resource Management System Chargeback Rates
25. Media Relations - Performs all media relations with local and national media
organizations according to established policies and procedures. Costs of a
general nature are allocated using the following method(s): Departmental Charge
Ratio
26. Office Furniture and Equipment - Provides office furniture and equipment for
the Operating Companies and affiliates. Costs of a general nature are allocated
using the following method(s): Departmental Charge Ratio
FORM OF INITIAL SERVICE REQUEST
The undersigned request all of the services listed in Exhibit A from
LG&E Energy Services Inc., except for
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. The services requested hereunder
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shall commence on and be provided through
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.
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Louisville Gas and Electric Company
By:
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Name:
Title: