EXHIBIT B-3
Execution Copy
2001 AMENDATORY AGREEMENT
This 2001 Amendatory Agreement, dated as of September 21, 2001 between
VERMONT YANKEE NUCLEAR POWER CORPORATION ("Vermont Yankee"), a Vermont
corporation, and ______________, a ___________ corporation (the "Purchaser"),
amending both the Power Contract, dated February 1, 1968, as heretofore amended
by eight amendments dated June 1, 1972, April 15, 1983, April 24, 1985, June 1,
1985, May 6, 1988, June 15, 1989 and December 1, 1989 between Vermont Yankee and
the Purchaser (the "Power Contract") and the Additional Power Contract, dated as
of February 1, 1984, between Vermont Yankee and the Purchaser (the "Additional
Power Contract").
For good and valuable consideration, the receipt of which is hereby
acknowledged, it is agreed as follows:
1. Basic Understandings.
Vermont Yankee was organized in 1966 to provide for the supply of power to
its sponsoring utility companies, including the Purchaser (collectively, the
"Purchasers"). It constructed a nuclear electric generating unit, having a net
capability of approximately 510 megawatts electric (the "Unit") at a site in
Vernon, Vermont. Vermont Yankee was issued a full-term, Facility Operating
License for the Unit by the Atomic Energy Commission (now the Nuclear Regulatory
Commission, which, together with any successor agencies, is hereafter called the
"NRC"), which license is now stated to expire on March 21, 2012 (the "End of
License Term"). The Unit has been in commercial operation since December 1, 1972
and continues to operate.
The names of the Purchasers of Vermont Yankee and their respective
interests ("entitlement percentages") in Vermont Yankee and the net capacity and
output of the Unit are as follows:
Purchaser Entitlement Percentage
--------- ----------------------
Central Vermont Public Service Corporation 35.0%
Green Mountain Power Corporation 20.0%
New England Power Company 22.5%
The Connecticut Light and Power Company 9.5%
Central Maine Power Company 4.0%
Public Service Company of New Hampshire 4.0%
▇-▇-▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ Electric Company 2.5%
Cambridge Electric Light Company 2.5%
The Unit was conceived to supply economic power on a cost of service
formula basis to the Purchasers. Pursuant to the Power Contract, Vermont Yankee
has agreed to supply to the Purchaser and, pursuant to separate power contracts
substantially identical to the Power Contract except for the names of the
parties (collectively, as amended through the date hereof, the "Initial Power
Contracts"), to the other Purchasers all of the capacity and the electric energy
available from the Unit for a thirty year term extending through November 30,
2002.
Pursuant to the Additional Power Contract, Vermont Yankee has agreed to
supply to the Purchaser, and pursuant to separate additional power contracts
substantially identical to the Additional Power Contract except for the names of
the parties (collectively, as amended through the date hereof, the "Additional
Power Contracts"), to the other Purchasers all the capacity and electric energy
available from the Unit during an operative term stated to commence on December
1, 2002 (when the Initial Power Contracts terminate) and extending until a date
which is 30 days after the later of the date on which the last of the financial
obligations of Vermont Yankee has been extinguished or the date on which Vermont
Yankee is finally relieved of any obligations under the last of the licenses
(operating or possessory) which it holds, or hereafter receives, from the NRC
with respect to the Unit. The Additional Power Contracts also provide, in the
event of their earlier cancellation, that the decommissioning cost obligation
and the other applicable provisions of the Additional Power Contracts shall
remain in effect to permit final ▇▇▇▇▇▇▇▇ of costs incurred prior to such
cancellation.
Pursuant to the Initial Power Contracts and the Additional Power
Contracts, the Purchasers are entitled and obligated to take their respective
entitlement percentages of the capacity and net electrical output of the Unit
during the service life of the Unit and are obligated to pay therefor monthly
their respective entitlement percentages of Vermont Yankee's cost of service,
including decommissioning costs, whether or not the Unit is operated.
On August 14, 2001, the Board of Directors of Vermont Yankee, which
includes representatives of the Purchasers (including the Purchaser), after
conducting a thorough review of the economics of continued operation of the Unit
until End of License Term in comparison to other alternatives (including the
early shut-down of the Unit) available to Vermont Yankee and evaluating the
competing bids received in a formal auction of the Unit commenced in April,
2001, voted to approve a Purchase and Sale Agreement (the "PSA"), dated as of
August 15, 2001, among Vermont Yankee and Entergy Nuclear Vermont Yankee, LLC
("ENVY") and Entergy Corporation, as guarantor, pursuant to which the Unit and
related assets of Vermont Yankee, including a pre-funded decommissioning trust,
would be sold to ENVY. The PSA also provided that Vermont Yankee would enter
into a Power Purchase Agreement (the "PPA") with ENVY to purchase 100% of the
actual net output of the Unit up to its present operating level of approximately
510 megawatts electric, together with the related ancillary products available
from
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the Unit, for a period from the Effective Date (as hereinafter defined) to the
End of License Term or the earlier shutdown of the Unit, all such energy and
ancillary products to be resold at wholesale by Vermont Yankee to the Purchasers
pursuant to the Initial Power Contracts and the Additional Power Contracts as
amended hereby.
As a consequence of the PSA and the PPA, Vermont Yankee and the Purchaser
propose to further amend the Power Contract and the Additional Power Contract in
various respects in order (i) to release Vermont Yankee from any further
obligations under said contracts with respect to the operation and
decommissioning of the Unit, (ii) to clarify and confirm provisions for the
recovery under said contracts of the remaining unamortized costs previously
incurred by Vermont Yankee in providing capacity and energy from the Unit prior
to the Effective Date, (iii) to provide for the recovery of any costs or
liabilities assumed by Vermont Yankee under the PSA and PPA and of Vermont
Yankee's on-going administrative expenses, and (iv) to provide for the resale at
cost by Vermont Yankee to the Purchaser of the Purchaser's entitlement
percentage of the aforesaid output and ancillary products of the Unit to be
purchased by Vermont Yankee from ENVY pursuant to the PPA.
Vermont Yankee and the Purchaser have agreed to enter into this 2001
Amendatory Agreement. Concurrently herewith each of the other Purchasers is
entering into an amendatory agreement which is identical hereto except for the
necessary changes in the names of the parties.
2. Parties' Contractual Commitments.
Vermont Yankee and the Purchaser each acknowledge that the other has
faithfully performed its obligations under the Power Contract. The Purchaser
hereby reconfirms its obligations under the Power Contract and the Additional
Power Contract to pay its entitlement percentage of Vermont Yankee's unamortized
costs of the Unit as deferred payment in connection with the capacity and net
electrical output of the Unit previously delivered by Vermont Yankee and agrees
that the decision to sell the Unit as described in Section 1 hereof did not give
rise to any cancellation right under Section 9 of the Power Contract or Section
10 of the Additional Power Contract. Vermont Yankee and the Purchaser further
agree that the Purchaser shall continue to be entitled and obligated to purchase
its entitlement percentage of the aforesaid output and ancillary products
available from the Unit during the terms of the Power Contract and Additional
Power Contract as hereinafter provided, and to pay a like percentage of Vermont
Yankee's costs therefor, and that Vermont Yankee shall continue to be obligated
to resell such output and ancillary products to the Purchaser during such terms.
Recognizing that the PSA, by transferring ownership and operating responsibility
for the Unit, changes the nature of the costs that Vermont Yankee will incur,
including those to obtain such output and ancillary products from the Unit of
which a portion is being resold hereunder to the Purchaser, Vermont Yankee and
the Purchaser further agree that this Amendatory Agreement sets forth the
necessary and appropriate provisions for the continuation of the foregoing
entitlements and obligations.
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Except as expressly modified by this Amendatory Agreement, the provisions
of the Power Contract and the Additional Power Contract remain in full force and
effect.
3. Effective Date.
Subject to receipt of FERC approval, this 2001 Amendatory Agreement shall
become effective concurrently with the Closing under the PSA (the "Effective
Date").
4. Power Contract Amendments.
The Power Contract is hereby amended as follows:
(a) In recognition of the sale of the Unit being effected pursuant to the
PSA and the intention of the parties to release Vermont Yankee from any further
obligations with respect to operation of the Unit, the text of each of Sections
3, 4, 5, 6, 8, 9 and 10 of the Power Contract is hereby deleted and, in lieu
thereof in each instance the words "Intentionally Deleted and This Section Left
Blank" shall be inserted; provided, however, that the pre-existing text shall
remain in effect for purposes of settling any accounts between the parties for
periods prior to the Effective Date.
(b) A new section 10A is hereby inserted immediately following Section 10
to read as follows:
"10A. Definitions.
Unless the context otherwise specifies or requires,
capitalized terms not otherwise defined herein shall have the
meanings provided in the PPA and each term defined below, when used
in this contract, shall have the meaning indicated below:
"Closing" means the Closing as defined in the PSA.
"Effective Date" has the meaning provided in Section 3 hereof.
"End of License Term" means March 21, 2012.
"End of Term Date" means the earlier of the End of License Term or
the date on which the Unit is permanently removed from service.
"ENVY" means Entergy Nuclear Vermont Yankee, LLC, a Delaware limited
liability company.
"Entitlement percentage" has the meaning provided in Section 1
hereof.
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"Future Power" means the aggregate energy, capacity and ancillary
products actually produced by, or available from, the Unit in
accordance with the PPA.
"Net capacity" means for any period the actual level at which the
Unit is operated, less station service use, transformer losses and
generator lead losses.
"PPA" means the Power Purchase Agreement, dated as of August 15,
2001, between Vermont Yankee, as buyer, and ENVY, as seller, a
complete copy of which is attached hereto as Exhibit B.
"PPA Entitlement Percentage" means the Sub-Entitlement or, if
applicable, the portion of the post-Uprate Company Entitlement (as
those terms are defined in the PPA) allocated to the Purchaser in
accordance with the PPA.
"PPA Obligations" means the obligations of Vermont Yankee to ENVY
under the PPA other than the purchase price payable pursuant to
Article 5 thereof, a schedule of which is set forth on Exhibit A
hereto.
"PSA" means the Purchase and Sale Agreement, dated as of August 15,
2001, among Vermont Yankee, ENVY and Entergy Corporation, as
guarantor, as amended from time to time.
"PSA Obligations" means the obligations of Vermont Yankee to ENVY
under the PSA, a schedule of which is set forth on Exhibit A hereto.
"PSA Transactions" means the conduct of the auction process
commenced in 2001 to sell the Unit, the proceedings to obtain
regulatory approval of the transactions resulting from such auction,
and the services of consultants, advisors and legal counsel with
respect thereto.
"Purchasers" means the sponsoring utilities named in Section 1
hereof or their respective successors or assigns.
(c) In recognition of the Purchaser's continuing obligation to reimburse
Vermont Yankee for its entitlement percentage of certain of Vermont Yankee's
costs as deferred payment for the capacity and net electrical output of the Unit
previously delivered by Vermont Yankee and to reflect the change in the manner
in which Vermont Yankee will incur costs to supply the Purchaser with its
aliquot share of the Future Power to be purchased pursuant to the PPA by Vermont
Yankee from ENVY, the provisions of Sections 7 and 7A of the Power Contract are
hereby deleted and new Sections 7, 7A and 7B are inserted in lieu thereof as
follows:
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"7. Reimbursed Costs
With respect to each month during the balance of the term of
this contract, the Purchaser will pay Vermont Yankee an amount equal
to the Purchaser's entitlement percentage of each of (A) the portion
of Vermont Yankee's Closing Net Unit Investment allocable to such
month, if any, together with one-twelfth of the composite percentage
for such month of the Closing Net Unit Investment as most recently
determined in accordance with this Section 7, (B) Vermont Yankee's
Total Transaction Costs Obligation, if any, for such month, (C)
Vermont Yankee's total operating expenses for such month, (D)
Vermont Yankee's PSA Obligations, if any, for such month, (E)
Vermont Yankee's PPA Obligations, if any, for such month, (F)
Vermont Yankee's Total Revolver Costs for such month, if any, and
(G) to the extent not duplicative of any payment made under clause
(A) above, an amount equal to one-twelfth of the equity percentage
for such month of the Purchaser's entitlement percentage of the
equity investment, as most recently determined in accordance with
this Section 7.
"Composite percentage" shall be computed as of the Effective Date
and as of the last day of each month thereafter (the "computation
date") and for any month the composite percentage shall be that
computed as of the most recent computation date. "Composite
percentage" as of a computation date shall be the sum of (i) the
equity percentage as of such date multiplied by the percentage which
equity investment as of such date is of the total capital as of such
date, plus (ii) the stated interest rate per annum of each principal
amount of indebtedness bearing a particular rate of interest
outstanding on such date for money borrowed from persons other than
Purchasers multiplied by the percentage which such principal amount
is of total capital as of such date.
"Equity percentage" as of any date shall be whatever percentage per
annum may be authorized from time to time by FERC.
"Common stock equity investment" as of any date shall consist of
equity investment as of such date less the aggregate par value of
all issues of preferred stock outstanding on such date.
"Equity investment" as of any date shall consist of the sum of (i)
all amounts theretofore paid to Vermont Yankee for all capital stock
theretofore issued (taken at the total par value thereof plus the
total of all amounts in an excess of such par value paid thereon);
plus all capital contributions, loans and advances theretofore made
to Vermont Yankee by the Purchasers, less the sum of any amounts
distributed by Vermont Yankee to the Purchasers or stockholders in
the form of stock repurchases or redemptions, return of capital or
repayments of loans and advances; plus (ii) any credit balance in
the capital surplus account (not included
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under (i)) and in earned surplus account on the books of Vermont
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
from other than the Purchasers.
"Uniform System" shall mean the Uniform System of Accounts
prescribed by the Federal Power Commission for Class A and Class B
Public Utilities and Licensees as in effect on the date of this
contract and as said System may be hereafter amended to take account
of private ownership of special nuclear material.
Vermont Yankee's "operating expenses" shall include all expenses
incurred by Vermont Yankee after the Effective Date (i) for
administrative and general expenses which would be properly
chargeable by an operating electric utility, less any applicable
credits thereto, in accordance with the Uniform System and (ii) for
expenses, if any, resulting from the settlement of claims of
dissenting shareholders.
The "net Unit investment" shall consist, in each case with respect
to the Unit, of (i) the aggregate amount properly chargeable at the
time in accordance with the Uniform System of Vermont Yankee's
electric plant accounts (including construction work in progress),
less the sum of (x) the aggregate amount included in operating
expenses from the plant completion date to the date in question on
account of depreciation accruals (and amortization, if any, of
property losses) reduced by the aggregate of all amounts charged
during such period against the accumulated provision for
depreciation plus (y) the amount of net available cash; plus (ii)
the aggregate amount properly chargeable at the time in accordance
with the Uniform System to accounts representing fuel assemblies and
components (including nuclear materials) and other materials and
supplies, less the balance, if any, at the time of the accumulated
amortization thereof; plus (iii) such reasonable allowances for
prepaid items and cash working capital as may from time to time be
determined by Vermont Yankee; less (z) the net proceeds received
from the sale of any assets properly included in said electric plant
accounts. However, for purposes of this contract, the net amount
included at any date after the plant completion date in net Unit
investment under clause (i) of the immediately preceding sentence
shall in no event be less than the excess of:
(a) the amount properly chargeable at the plant completion
date in accordance with the Uniform System to electric plant
accounts (including construction work in progress) with
respect to the Unit,
over
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(b) the sum of (x) the aggregate minimum amount required by
this Section 7 to be included in operating expenses from the
plant completion date to the date in question on account of
depreciation accruals (and amortization, if any, or property
losses) plus (y) the amount of net available cash.
The net Unit investment shall be determined as of the plant
completion date and thereafter as of the commencement of each
calendar year, or, if Vermont Yankee elects, at more frequent
intervals.
"Closing Net Unit Investment" means the amount of net Unit
investment determined as of the Effective Date, which amount shall
be amortized in equal monthly amounts during the period beginning on
the Effective Date and ending on the End of License Term.
"Net available cash" means, at any date as of which the amount
thereof is to be determined, the excess of (a) the aggregate amount
received by Vermont Yankee after the plant completion date and prior
to two years before the determination date as insurance proceeds on
account of loss or damage to the Unit or as the proceeds of a sale
or condemnation of a portion of the Unit, over (b) the aggregate
amount expended after the plant completion date and prior to the
determination date on account of rebuilding, repairs, replacements
and additions to the Unit, provided that insurance proceeds received
with respect to a particular loss shall be taken into account for
purposes of the foregoing computation only if the amount received
with respect to the loss exceeds $150,000.
"Closing Expenses" means the funds, if any, required to defray any
closing adjustments payable by Vermont Yankee in accordance with the
PSA.
"Sale Costs" means the funds, if any, required to defray the costs
incurred in connection with the pre-2001 efforts to sell the Unit
and the PSA Transactions, including the refunding of such costs to
the Purchasers to the extent previously billed to, and paid by, the
Purchasers.
"Transaction Costs" means the sum of (a) the Closing Expenses plus
(b) the Sales Costs.
"Total Transaction Costs Obligation" for any month shall mean the
amount attributable to such month for the payment of principal and
interest, if any, on the Transaction Costs, calculated on the basis
of amortizing such liability in equal monthly amounts over the
period from the Effective Date to the End of License Term.
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"Short-term Revolver" means one or more borrowings by Vermont Yankee
during the term of this contract to obtain funds to meet short-term
operating cash needs.
"Total Revolver Costs" for any month means the amount attributable
to such month for the payment of principal, interest and other fees,
if any, due on the Short-term Revolver.
7A. Purchase of Future Power, Delivery and Payments.
(a) Purchase of Future Power: With respect to each month
during the period commencing on the Effective Date and ending on the
earlier of the End of Term Date or the end of the operative term of
this contract, the Purchaser will be entitled and obligated to take
its PPA Entitlement Percentage of the Future Power. The Purchaser's
PPA Entitlement Percentage of the Future Power will be delivered to
and accepted by it at the Producer's Delivery Point (as defined in
the PPA). All deliveries will be made in the form of 3-phase, 60
cycle, alternating current at a nominal voltage of 345,000 volts.
The Purchaser will make its own arrangements for the transmission of
its share of the Future Power. In accordance with the PPA, ENVY will
be responsible for maintaining metering and telemetering with
respect to the Future Power.
With respect to each month during the aforesaid period,
Purchaser will pay Vermont Yankee for the Future Power actually
delivered to the Purchaser an amount equal to its PPA Entitlement
Percentage of (a) the purchase price calculated pursuant to Article
5 of the PPA plus (b) any applicable Governmental Charges allocable
to Vermont Yankee pursuant to Section 18(b) of the PPA.
(b) Contingent Option to Terminate Purchase. Pursuant to
Article 4(c) of the PPA, Vermont Yankee was granted an option to
negotiate for release from all or part of its obligations to
purchase power under the PPA effective as of February 28, 2005 and a
further option to negotiate for release of any balance of such
obligations effective December 31, 2007, each such option being
exercisable by written notice to the ENVY at least 180 days prior to
its effective date (each such notice date being referred to herein
as an "exercise date"). Those options affect the Sub-Entitlements of
each of the Purchasers. Vermont Yankee hereby grants the Purchaser
the right to direct Vermont Yankee to exercise such option with
respect to the Purchaser's Sub-Entitlement as follows:
If the Purchaser desires to direct Vermont Yankee to negotiate
the release of the Purchaser's Sub-Entitlement under the PPA
pursuant to such option, the Purchaser shall give written notice to
that effect to Vermont Yankee at least 90 days in advance of the
relevant exercise date. Upon receipt of such notice from the
Purchaser, Vermont Yankee shall confer with all other Purchasers
giving
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similar notices to ascertain the scope of negotiating discretion
granted by such Purchasers and shall thereafter give timely written
notice to the ENVY indicating Vermont Yankee's desire to negotiate
the release of the Sub-Entitlements of those Purchasers that have
given Vermont Yankee the required notice. Vermont Yankee shall
thereafter negotiate in good faith with the ENVY for release of said
Sub-Entitlements from the PPA and shall maintain close coordination
with the Purchaser and other affected Purchasers to assure that the
terms of such release are acceptable. Any final release agreement
between Vermont Yankee and the ENVY shall be subject to ratification
by each of the Purchasers affected thereby. If the Purchaser fails
to ratify the release agreement within the time provided by such
agreement, its Sub-Entitlement shall be excluded from the release
agreement.
Vermont Yankee and the Purchaser hereby further agree that:
(a) after such a release agreement has been ratified by the
Purchaser, the Purchaser will pay to Vermont Yankee the Purchaser's
proportionate share of the payments, if any, due to the ENVY in
connection with such release; and (b) from and after the effective
date of any release affecting the Purchaser's Sub-Entitlement
Percentage, the Purchaser shall no longer be obligated, pursuant to
clause (a) above, to take and pay for any Future Power delivered
after such effective date.
(c) ISO Filing. Vermont Yankee agrees to submit this contract
to the market system maintained by the Independent System Operator
of New England provided for in the NEPOOL Agreement.
(d) Adequate Assurance. In the event that ENVY exercises its
right under Article 7(h) of the PPA to request adequate assurance
with respect to Purchaser's PPA Entitlement Percentage of the Future
Power, then Vermont Yankee shall be deemed to have commercially
reasonably grounds for insecurity concerning Purchaser's ability to
perform its obligations under this Section 7A and may provide
Purchaser with written notice requesting adequate assurance
("Adequate Assurance") of due performance of Purchaser's obligations
under this Section 7A for the benefit of Vermont Yankee and/or ENVY.
Upon receipt of such notice by mail postage prepaid, facsimile,
telecopy or hand delivery, Purchaser shall have twelve (12) Business
Days to provide such Adequate Assurance to Vermont Yankee and ENVY.
7B. Billing.
Vermont Yankee will submit, by telecopy or other agreeable
same day delivery mechanism, to the Purchaser, as soon as
practicable after the end of each month, an invoice for the
aggregate amount payable by the Purchaser pursuant to Sections 7 and
7A hereof with respect to the particular month. Such bills will be
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rendered in such detail as the Purchaser may reasonably request and
may be rendered on an estimated basis subject to corrective
adjustments in subsequent billing periods. All payments shown to be
due on such invoice, except amount in dispute, shall be due and
payable by wire transfer per instructions on the invoice on or
before the later of the eighteenth (18th) day of each month, or the
eighth (8th) day after receipt of the invoice, or if either such day
is not a Business Day, then on the next Business Day.
(d) Section 14 of the Power Contract is hereby amended by adding the
following at the end thereof:
"Notwithstanding the foregoing, (a) Purchaser (or its assigns) may
assign its interest under Section 7A of this contract only (i) to a
third party that has a credit rating equal to the higher of that of
the assignor or of investment grade as determined by a nationally
rated service, or (ii) to a single purpose entity whose obligations
hereunder are guaranteed by a parent that has such a credit rating,
or (iii) in connection with a merger, consolidation or sale of
substantially all its assets to another party that has a credit
rating at least equal to that of the Purchaser (or its assigns).
The Purchaser hereby consents to Vermont Yankee creating a
security interest in Vermont Yankee's interest in this contract for
the benefit of ENVY and/or the lenders under the Short-term Revolver
and agrees that Purchaser's obligations hereunder shall not be
affected thereby."
(e) Section 20 of the Power Contract is hereby amended by deleting the
first sentence thereof and deleting the word "other" from the second sentence
thereof.
5. Additional Power Contract Amendments.
The Additional Power Contract is hereby amended as follows:
(a) In recognition of the sale of the Unit being effected pursuant to the
PSA and, the intention of the parties to release Vermont Yankee from any further
obligations with respect to operation of the Unit, the text of each of Sections
3, 4, 5, 6, 8, 9, 10 and 11 of the Additional Power Contract is hereby deleted
and, in lieu thereof in each instance the words "Intentionally Deleted and This
Section Left Blank" shall be inserted.
(b) A new section 10A is hereby inserted immediately following Section 10
to read as follows:
"10A. Definitions.
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Unless the context otherwise specifies or requires,
capitalized terms not otherwise defined herein shall have the
meanings provided in the PPA and each term defined below, when used
in this contract, shall have the meaning indicated below:
"Closing" means the Closing as defined in the PSA.
"Effective Date" has the meaning provided in Section 3 hereof.
"End of License Term" means March 21, 2012.
"End of Term Date" means the earlier of the End of License Term or
the date on which the Unit is permanently removed from service.
"ENVY" means Entergy Nuclear Vermont Yankee, LLC, a Delaware limited
liability company.
"Entitlement percentage" has the meaning provided in Section 1
hereof.
"Future Power" means the aggregate energy, capacity and ancillary
actually produced by, or available from, the Unit in accordance with
the PPA.
"Initial Power Contracts" means the several Power Contracts, dated
as of February 1, 1968, as amended, between Vermont Yankee and each
of the Purchasers.
"Net capacity" means for any period the actual level at which the
Unit is operated, less station service use, transformer losses and
generator lead losses.
"Operative term" has the meaning provided in Section 2 hereof.
"PPA" means the Power Purchase Agreement, dated as of August 15,
2001, between Vermont Yankee, as buyer, and ENVY, as seller, a
complete copy of which is attached hereto as Exhibit B.
"PPA Entitlement Percentage" means the Sub-Entitlement or, if
applicable, the portion of the post-Uprate Company Entitlement (as
those terms are defined in the PPA) allocated to the Purchaser in
accordance with the PPA.
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"PPA Obligations" means the obligations of Vermont Yankee to ENVY
under the PPA other than the purchase price payable pursuant to
Article 5 thereof, a schedule of which is set forth on Exhibit A
hereto.
"PSA" means the Purchase and Sale Agreement, dated as of August 15,
2001, among Vermont Yankee, ENVY and Entergy Corporation, as
guarantor, as amended from time to time.
"PSA Obligations" means the obligations of Vermont Yankee to ENVY, a
schedule of which is set forth on Exhibit A hereto.
"PSA Transactions" means the conduct of the auction process
commenced in 2001 to sell the Unit, the proceedings to obtain
regulatory approval of the transactions resulting from such auction,
and the services of consultants, advisors and legal counsel with
respect thereto.
"Purchasers" means the sponsoring utilities named in Section 1
hereof or their respective successors or assigns.
(c) Section 2 of the Additional Power Contract is hereby amended in full
to read as follows:
"The operative term of this contract shall commence on December 1,
2002 notwithstanding the fact that the Unit has been sold to ENVY
and shall terminate 30 days after the date on which the last of the
respective financial obligations of Vermont Yankee and the Purchaser
which constitute elements of the reimbursed costs calculated
pursuant to Section 7 hereof and the purchase price for Future Power
calculated pursuant to Section 7A hereof has been extinguished."
(d) In recognition of the Purchaser's continuing obligation to reimburse
Vermont Yankee for its aliquot share of certain of Vermont Yankee's costs as
deferred payment for the capacity and net electrical output of the Unit
previously delivered by Vermont Yankee and to reflect the change in the manner
in which Vermont Yankee will incur costs to supply the Purchaser with its
entitlement percentage of the Future Power to be purchased pursuant to the PPA
by Vermont Yankee from ENVY, the provisions of Section 7 of the Additional Power
Contract are hereby deleted and new Sections 7, 7A and 7B are inserted in lieu
thereof as follows:
"7. Reimbursed Costs
With respect to each month during the operative term of this
contract, the Purchaser will pay Vermont Yankee an amount equal to
the Purchaser's entitlement percentage of each of (A) the portion of
Vermont Yankee's Closing Net Unit Investment applicable to such
month, if any, together with one-twelfth of
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the composite percentage for such month of the Closing Net Unit
Investment as most recently determined in accordance with this
Section 7, (B) Vermont Yankee's Total Transaction Costs Obligation,
if any, for such month, (C) Vermont Yankee's total operating
expenses for such month, (D) Vermont Yankee's PSA Obligations, if
any, for such month, (E) Vermont Yankee's PPA Obligations, if any,
for such month, (F) Vermont Yankee's Total Revolver Costs for such
month, if any, and (G) to the extent not duplicative of any payment
made under clause (A) above, an amount equal to one-twelfth of the
equity percentage for such month of the Purchaser's entitlement
percentage of the equity investment, as most recently determined in
accordance with this Section 7.
"Composite percentage" shall be computed as of the Effective Date
and as of the last day of each month thereafter (the "computation
date") and for any month the composite percentage shall be that
computed as of the most recent computation date. "Composite
percentage" as of a computation date shall be the sum of (i) the
equity percentage as of such date multiplied by the percentage which
equity investment as of such date is of the total capital as of such
date, plus (ii) the stated interest rate per annum of each principal
amount of indebtedness bearing a particular rate of interest
outstanding on such date for money borrowed from persons other than
Purchasers multiplied by the percentage which such principal amount
is of total capital as of such date.
"Equity percentage" as of any date shall be whatever percentage per
annum may be authorized from time to time by FERC.
"Common stock equity investment" as of any date shall consist of
equity investment as of such date less the aggregate par value of
all issues of preferred stock outstanding on such date.
"Equity investment" as of any date shall consist of the sum of (i)
all amounts theretofore paid to Vermont Yankee for all capital stock
theretofore issued (taken at the total par value thereof plus the
total of all amounts in an excess of such par value paid thereon);
plus all capital contributions, loans and advances theretofore made
to Vermont Yankee by the Purchasers, less the sum of any amounts
distributed by Vermont Yankee to the Purchasers or stockholders in
the form of stock repurchases or redemptions, return of capital or
repayments of loans and advances; plus (ii) any credit balance in
the capital surplus account (not included under (i)) and in earned
surplus account on the books of Vermont 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
from other than the Purchasers.
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(b) "Uniform System" shall mean the Uniform System of Accounts prescribed
by the Federal Power Commission for Class A and Class B Public Utilities and
Licensees as in effect on the date of this contract and as said System may be
hereafter amended to take account of private ownership of special nuclear
material.
Vermont Yankee's "operating expenses" shall include all ordinary and
necessary expenses incurred by Vermont Yankee during the term of
this contract (i) for administrative and general expenses which
would be properly chargeable by an operating electric utility, less
any applicable credits thereto, in accordance with the Uniform
System and (ii) for expenses, if any, resulting from the settlement
of claims of dissenting shareholders.
The "net Unit investment" shall consist, in each case with respect
to the Unit, of (i) the aggregate amount properly chargeable at the
time in accordance with the Uniform System of Vermont Yankee's
electric plant accounts (including construction work in progress),
less the sum of (x) the aggregate amount included in operating
expenses from the plant completion date to the date in question on
account of depreciation accruals (and amortization, if any, of
property losses) reduced by the aggregate of all amounts charged
during such period against the accumulated provision for
depreciation plus (y) the amount of net available cash; plus (ii)
the aggregate amount properly chargeable at the time in accordance
with the Uniform System to accounts representing fuel assemblies and
components (including nuclear materials) and other materials and
supplies, less the balance, if any, at the time of the accumulated
amortization thereof; plus (iii) such reasonable allowances for
prepaid items and cash working capital as may from time to time be
determined by Vermont Yankee; less (z) the net proceeds received
from the sale of any assets properly included in said electric plant
accounts. However, for purposes of this contract, the net amount
included at any date after the plant completion date in net Unit
investment under clause (i) of the immediately preceding sentence
shall in no event be less than the excess of:
(a) the amount properly chargeable at the plant completion
date in accordance with the Uniform System to electric plant
accounts (including construction work in progress) with
respect to the Unit),
over
(b) the sum of (x) the aggregate minimum amount required by
this Section 7 to be included in operating expenses from the
plant completion date to the date in question on account of
depreciation accruals (and amortization, if any, or property
losses) plus (y) the amount of net available cash.
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The net Unit investment shall be determined as of the plant
completion date and thereafter as of the commencement of each
calendar year, or, if Vermont Yankee elects, at more frequent
intervals.
"Closing Net Unit Investment" means the amount of net Unit
investment determined as of the Effective Date, which amount shall
be amortized in equal monthly amounts during the period commencing
on the Effective Date and ending on the End of License Date.
"Net available cash" means, at any date as of which the amount
thereof is to be determined, the excess of (a) the aggregate amount
received by Vermont Yankee after the plant completion date and prior
to two years before the determination date as insurance proceeds on
account of loss or damage to the Unit or as the proceeds of a sale
or condemnation of a portion of the Unit, over (b) the aggregate
amount expended after the plant completion date and prior to the
determination date on account of rebuilding, repairs, replacements
and additions to the Unit, provided that insurance proceeds received
with respect to a particular loss shall be taken into account for
purposes of the foregoing computation only if the amount received
with respect to the loss exceeds $150,000.
"Closing Expenses" means the funds, if any, required to defray other
closing adjustments under the PSA.
"Sales Costs" means the funds, if any, to defray the costs incurred
in connection with pre-2001 efforts to sell the Unit and the PSA
Transactions, including the refunding of such costs to the
Purchasers to the extent previously billed to, and paid by, the
Purchasers.
"Transaction Costs" means the sum of (a) the Closing Expenses plus
(b) the Sale Costs.
"Total Transaction Costs Obligation" for any month shall mean the
amount attributable to such month for the payment of principal and
interest, if any, on the Transaction Costs, calculated on the basis
of amortizing such liability in equal monthly amounts over the
period from the Effective Date to the End of License Term.
"Short-term Revolver" means one or more borrowings by Vermont Yankee
during the term of this contract to obtain funds to meet short-term
operating cash needs.
"Total Revolver Costs" for any month means the amount attributable
to such month for payment of principal, interest and other fees, if
any, due on the Short-term Revolver.
▇-▇-▇▇
▇▇. ▇▇▇▇▇▇▇▇ of Future Power, Delivery and Payments.
(a) Purchase of Future Power: With respect to each month
during the period commencing on December 1, 2002 and ending on the
End of Term Date, the Purchaser will be entitled and obligated to
take its PPA Entitlement Percentage of the Future Power. The
Purchaser's PPA Entitlement Percentage of the Future Power will be
delivered to and accepted by it at the Producer's Delivery Point (as
defined in the PPA). All deliveries will be made in the form of
3-phase, 60 cycle, alternating current at a nominal voltage of
345,000 volts. The Purchaser will make its own arrangements for the
transmission of its shares of the Future Power. In accordance with
the PPA, ENVY will be responsible for maintaining metering and
telemetering with respect to the Future Power.
With respect to each month during the aforesaid period,
Purchaser will pay Vermont Yankee for the Future Power actually
delivered to the Purchaser an amount equal to its PPA Entitlement
Percentage of (a) the purchase price calculated pursuant to Article
5 of the PPA plus (b) any applicable Governmental Charges allocable
to Vermont Yankee pursuant to Section 18(b) of the PPA.
(b) Contingent Option to Terminate Purchase. Pursuant to
Article 4(c) of the PPA, Vermont Yankee was granted an option to
negotiate for release from all or part of its obligations to
purchase power under the PPA effective as of February 28, 2005 and a
further option to negotiate for release of any balance of such
obligations effective December 31, 2007, each such option being
exercisable by written notice to the ENVY at least 180 days prior to
its effective date (each such notice date being referred to herein
as an "exercise date"). Those options affect the Sub-Entitlements of
each of the Purchasers. Vermont Yankee hereby grants the Purchaser
the right to direct Vermont Yankee to exercise such option with
respect to the Purchaser's Sub-Entitlement as follows:
If the Purchaser desires to direct Vermont Yankee to negotiate
the release of the Purchaser's Sub-Entitlement under the PPA
pursuant to such option, the Purchaser shall give written notice to
that effect to Vermont Yankee at least 90 days in advance of the
relevant exercise date. Upon receipt of such notice from the
Purchaser, Vermont Yankee shall confer with all other Purchasers
giving similar notices to ascertain the scope of negotiating
discretion granted by such Purchasers and shall thereafter give
timely written notice to the ENVY indicating Vermont Yankee's desire
to negotiate the release of the Sub-Entitlements of those Purchasers
that have given Vermont Yankee the required notice. Vermont Yankee
shall thereafter negotiate in good faith with the ENVY for release
of said Sub-Entitlements from the PPA and shall maintain close
coordination with the Purchaser and other affected Purchasers to
assure that the terms of such release are acceptable. Any final
release agreement between Vermont Yankee and the
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ENVY shall be subject to ratification by each of the Purchasers
affected thereby. If the Purchaser fails to ratify the release
agreement within the time provided by such agreement, its
Sub-Entitlement shall be excluded from the release agreement.
Vermont Yankee and the Purchaser hereby further agree that:
(a) after such a release agreement has been ratified by the
Purchaser, the Purchaser will pay to Vermont Yankee the Purchaser's
proportionate share of the payments, if any, due to the ENVY in
connection with such release; and (b) from and after the effective
date of any release affecting the Purchaser's Sub-Entitlement
Percentage, the Purchaser shall no longer be obligated, pursuant to
clause (a) above, to take and pay for any Future Power delivered
after such effective date.
(c) ISO Filing. Vermont Yankee agrees to submit this contract
to the market system maintained by the Independent System Operator
of New England provided for in the NEPOOL Agreement.
(d) Adequate Assurance. In the event that ENVY exercises its
right under Article 7(h) of the PPA to request adequate assurance
with respect to Purchaser's PPA Entitlement Percentage of the Future
Power, then Vermont Yankee shall be deemed to have commercially
reasonably grounds for insecurity concerning Purchaser's ability to
perform its obligations under this Section 7A and may provide
Purchaser with written notice requesting adequate assurance
("Adequate Assurance") of due performance of Purchaser's obligations
under this Section 7A for the benefit of Vermont Yankee and/or ENVY.
Upon receipt of such notice by mail postage prepaid, facsimile,
telecopy or hand delivery, Purchaser shall have twelve (12) Business
Days to provide such Adequate Assurance to Vermont Yankee and ENVY.
7B. Billing.
Vermont Yankee will submit, by telecopy or other agreeable
same day delivery mechanism, to the Purchaser, as soon as
practicable after the end of each month, an invoice for the
aggregate amount payable by the Purchaser pursuant to Sections 7 and
7B hereof with respect to the particular month. Such bills will be
rendered in such detail as the Purchaser may reasonably request and
may be rendered on an estimated basis subject to corrective
adjustments in subsequent billing periods. All payments shown to be
due on such invoice, except amounts in dispute, shall be due and
payable by wire transfer per instructions on the invoice on or
before the later of the eighteenth (18th) day of each month, or the
eighth (8th) day after receipt of the invoice, or if either such day
is not a Business Day, then on the next Business Day.
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(e) Section 15 of the Additional Power Contract is hereby amended by
adding the following to the end thereof:
"Notwithstanding the foregoing, (a) Purchaser (or its assigns) may
assign its interest under Section 7A of this contract only (i) to a
third party that has a credit rating equal to the higher of that of
the assignor or of investment grade as determined by a nationally
rated service, or (ii) to a single purpose entity whose obligations
hereunder are guaranteed by a parent that has such a credit rating,
or (iii) in connection with a merger, consolidation or sale of
substantially all its assets, to another party that has a credit
rating at least equal to that of the Purchaser (or its assigns).
The Purchaser hereby consents to Vermont Yankee creating a
security interest in Vermont Yankee's interest in this contract for
the benefit of ENVY and/or the lenders under the Short-term Revolver
and agrees that Purchaser's obligations hereunder shall not be
affected by thereby."
(f) Section 17 of the Additional Power Contract is hereby amended by
deleting the first sentence thereof and deleting the word "other" from the
second sentence thereof.
6. Government Regulation. This Amendatory Agreement and all rights and
obligations of the Parties hereunder are subject to all applicable federal,
state and local laws and all duly promulgated orders and duly authorized actions
of governmental authorities having proper and valid jurisdiction over the terms
of this Amendatory Agreement. Purchaser will be obligated to make all payments
to Vermont Yankee for purchases at wholesale of capacity, energy and ancillary
products hereunder regardless of whether or not the Purchaser is permitted to
pass along or recover those payments from its customers. Each of Vermont Yankee
and Purchaser shall not propose, advance or support, and shall vigorously oppose
and defend against, any action by any legislature, agency, commission,
(including the Federal Energy Regulatory Commission), entity or court that would
adversely affect the Parties' rights and benefits hereunder and each of Vermont
Yankee and the Purchaser will vigorously pursue all actions and remedies to
overturn or cure any such action. In addition, the rates, terms, and conditions
contained in this Amendatory Agreement are not subject to change under Sections
205 or 206 of the Federal Power Act, as either section may be amended or
superseded, absent the mutual written agreement of the Parties or a finding by
the Federal Energy Regulatory Commission, that this Amendatory Agreement is not
in the public interest.
7. Confidentiality. Except as otherwise required by law or for implementation of
this Amendatory Agreement, the Parties must keep confidential the transactions
undertaken pursuant hereto; provided, however, that the Purchaser may disclose
such information on a confidential basis to third parties in connection with
good faith negotiation for the assignment of Purchaser's interests hereunder.
Nothing herein shall preclude the Purchaser from disclosing the substance of
this Amendatory Agreement to third parties on a confidential basis in connection
with the
B-3-19
negotiation of the assignment of any of its interests herein. Any information
provided by either Party to the other Party pursuant to this Amendatory
Agreement and labeled "CONFIDENTIAL" will be used by the receiving Party solely
in connection with the purposes of this Amendatory Agreement and will not be
disclosed by the receiving Party to any third party, except with the providing
Party's consent. This Section 7 of this Amendatory Agreement will not prevent
either Party from providing any confidential information received from the other
Party to any court or in accordance with a proper discovery request or in
response to the reasonable request of any governmental agency with jurisdiction
to regulate or investigate the disclosing Party's affairs, provided that, if
feasible, the disclosing Party will give prior notice to the other Party of such
disclosure and, if so requested by such other Party, will have used all
reasonable efforts to oppose or resist the requested disclosure, as appropriate
under the circumstances, or to otherwise make such disclosure pursuant to a
protective order or other similar arrangement for confidentiality.
8. Miscellaneous.
(a) Mitigation of Damages. In the event of any default by Purchaser,
Vermont Yankee shall have the right to sell the Purchaser's entitlement
percentage of any energy and ancillary products and apply the proceeds thereof
against the amounts owing from the Purchaser.
(b) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
B-3-20
IN WITNESS WHEREOF, the parties have executed this Amendment by their
respective officers hereto duly authorized, as of the date first above written.
VERMONT YANKEE NUCLEAR POWER
CORPORATION
By __________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
Address: ▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[___________]
By ____________________________________
Name:
Title:
Address:
B-3-21
EXHIBIT A
TO
2001 AMENDATORY AGREEMENT
I. PSA Obligations:
The PSA Obligations comprise those set forth in the following
sections of the PSA:
Section 2.4 Excluded Liabilities
Section 6.11(b) One-time fee due to DOE under the DOE Standard Contract
Section 6.12 DOE Decontamination and Decommissioning fees
Section 9.1 Indemnification obligations
II. PPA Obligations:
The PPA Obligations comprise those set forth in the following sections of
the PPA:
Section 3(g) Transmission charges for Station Use Energy.
Section 7(h) Adequate assurance
Section 9 Indemnification obligations
B-3-22
EXHIBIT B
TO
2001 AMENDATORY AGREEMENT
[Attach copy of PPA]
B-3-23