JOINT DISPATCH
AND
POWER SALES AGREEMENT
AMONG
MONONGAHELA POWER COMPANY
THE POTOMAC EDISON COMPANY
WEST PENN POWER COMPANY
AND
DUQUESNE LIGHT COMPANY
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JOINT DISPATCH
AND
POWER SALES AGREEMENT
AMONG
MONONGAHELA POWER COMPANY
THE POTOMAC EDISON COMPANY
WEST PENN POWER COMPANY
AND
DUQUESNE LIGHT COMPANY
THIS AGREEMENT is made and entered into this 1st day of August, 1997,
by and between MONONGAHELA POWER COMPANY ("MP"), an Ohio corporation, THE
POTOMAC EDISON COMPANY ("PE"), a Maryland and Virginia corporation, WEST PENN
POWER COMPANY ("WP"), a Pennsylvania corporation and DUQUESNE LIGHT COMPANY
("DL"), a Pennsylvania corporation, referred to collectively as "Parties" and
singularly as "Party".
WHEREAS, DQE, INC. and Allegheny Power System, Inc., parent companies
of Parties, have entered into an Agreement and Plan of Merger, dated April 5,
1997; and
WHEREAS, Pursuant to the Agreement and Plan of Merger, DQE, Inc.
("DQE") will become wholly-owned subsidiaries of Allegheny Power System, Inc.
("APS"), a Maryland corporation; and
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WHEREAS, Parties are the owners and operators of electric generation,
transmission and distribution facilities and are engaged in the business of
generating, transmitting, distributing and selling electric energy to the
general public, electric utilities, municipalities and cooperatives; and
WHEREAS, MP, PE and WP are already parties to a Power Supply Agreement
dated January 1, 1968, as amended, under which they jointly operate and dispatch
their electric systems; and
WHEREAS, to maximize efficiency, and to achieve merger related savings,
WP, MP, PE and DL will be operated as an integrated control area, will
economically commit and dispatch the combined Generating Resources, and will
economically utilize power and energy available to the Combined System to
transact with other utilities and wholesale entities in order to operate the
Combined System in a reliable, efficient, and economic manner;
NOW, THEREFORE, in consideration of the covenants and premises herein
set forth, the Parties mutually agree as follows:
ARTICLE I
DEFINITIONS
For the purpose of this Agreement, and the Appendices and Service
Schedules which are a part hereof, the following definitions shall apply:
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1.01 AGENT means Allegheny Power Service Corporation.
1.02 AGREEMENT means this Joint Dispatch Agreement together with all
Appendices and Service Schedules applying thereto and any amendments made
hereafter.
1.03 PSA means the Power Supply Agreement dated January 1, 1968 among
MP, PE and WP and all amendments and schedules thereto.
1.04 COMBINED SYSTEM means the combined Generating Resources and
Transmission Plant of the Parties.
1.05 CONTROL AREA means the combined electric systems of MP, PE, WP and
DL as bounded by interconnection (tie line) metering and telemetry, such that
the Generating Resources are controlled directly to maintain the interchange
schedule with other control areas to contribute to frequency regulation of the
interconnected system.
1.06 GENERATING RESOURCES means all power generating facilities owned
by a Party available to meet the Load Requirements of the Parties.
1.07 GENERATING UNIT means an electric generator, together with all
auxiliary devices and equipment designed to be operated for the production of
electric power and energy.
1.08 INCREMENTAL COST means any costs incurred by a Party solely by
reason of its generation of an incremental amount of energy, which may include
but shall not be limited to, costs of fuel, labor, operation, maintenance,
start-up, fuel handling, taxes, regulatory commission charges, transmission
losses and emissions allowances.
1.09 LOAD REQUIREMENTS means the demand and energy which each Party is
obligated to provide to satisfy regulated retail service territory commitments.
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1.10 OFF-SYSTEM PURCHASES means purchases from a third party of energy
and/or associated capacity to reduce costs or to provide reliability for the
system or as required by law.
1.11 OFF-SYSTEM SALES means all wholesale sales of power and energy to
third parties.
1.12 OPEN ACCESS TRANSMISSION TARIFF means the Allegheny Energy
transmission tariff filed with the FERC on behalf of MP, PE, WP and DL to
provide transmission service over the Combined System in compliance with FERC
Order No. 888.
1.13 SYSTEM DISPATCH means the centralized, economic commitment and
dispatch of the Combined System's Generating Resources and Off-System Purchases.
1.14 TRANSMISSION PLANT means the facilities owned, controlled or
operated by MP, PE, WP, and DL that are used to provide transmission service.
1.15 UNREGULATED LOAD is demand and energy which any Party serves on a
competitive basis as a result of retail competition.
ARTICLE II
TERM OF AGREEMENT
2.01 This Agreement shall take effect as soon as practicable after the
merger between DQE and APS becomes effective, and shall continue in full force
and effect for a minimum of one year, continuing thereafter until terminated by
one or more of the Parties with at least 30 days written notice.
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2.02 This Agreement will be reviewed periodically by the Parties to
determine whether revisions are necessary or appropriate.
ARTICLE III
PURPOSE
The purpose of this Agreement is to provide the contractual basis for
coordinated operation of the Combined System to achieve economies consistent
with the provision of reliable electric service.
ARTICLE IV
AGENT
4.01 RESPONSIBILITY OF THE AGENT
As soon as the merger becomes effective, DL shall execute a service
agreement with APSC for the purpose of, among other things:
a) coordinating the System Dispatch;
b) maintaining the reliability of the Combined System through
monitoring and security assessments;
c) scheduling Off-System Purchases and Off-System Sales;
d) coordinating the provision of transmission service;
e) the development of all bills and billing related information between
the Parties and with other transacting entities;
f) operation and maintenance of a central control center to achieve
these purposes; and
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g) other such activities and duties as may be necessary or as assigned
by the Parties.
4.02 EXPENSES
All expenses incurred by the Agent in the performance of its
responsibilities shall be settled in accordance with the arrangements provided
for in the service agreement, between DL and APSC, dated as of the effective
date of the merger.
ARTICLE V
COORDINATED OPERATION
5.01 OPERATION OF THE COMBINED SYSTEM
The Agent shall administer the System Dispatch of the Combined System
for Load Requirements in accordance with the provisions of Article II of the
PSA. The Agent shall administer a separate System Dispatch for the Unregulated
Load of DL and WP.
5.02 COMMUNICATIONS AND OTHER FACILITIES
The Parties shall provide communications, metering and other facilities
necessary for the metering and control of the Generating Resources and
interconnected transmission facilities. Each Party shall be responsible for any
expenses it incurs for the installation, operation and maintenance of facilities
at its own Generating Units and interconnected transmission facilities. Any
expenses incurred due to facilities required at or for the central control
center to operate the Combined System shall be settled in accordance with the
arrangements made by the Parties for compensation for services provided among
and on behalf of the Parties.
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ARTICLE VI
ASSIGNMENT OF COSTS AND BENEFITS
OF COORDINATED OPERATIONS
6.01 ACCOUNTING FOR ENERGY COSTS OF DL GENERATING RESOURCES
Where DL Generating Resources are dispatched to serve Load Requirements
of WP, MP or PE, DL shall be compensated at Incremental Cost by WP. WP shall
treat this purchase as an own account purchase under the PSA. Where MP, PE, or
WP Generating Resources are dispatched to serve DL Load Requirements, DL shall
pay at Incremental Cost as an own account sale from WP under the PSA and WP
shall be compensated for its Incremental Costs under the terms of the PSA.
6.02 FIXED COSTS OF EXISTING GENERATING RESOURCES
All fixed costs of DL's Generating Resources shall remain the
responsibility of DL.
6.03 OFF-SYSTEM ENERGY SALES
When the Combined System is dispatched to serve an Off-System Sale,
the benefits of that sale shall be shared by WP with DL on the following basis.
WP's benefits received under Article V of the PSA shall be shared with DL on the
basis of the ratio of average peak DL Load Requirements for the twelve (12)
coincident monthly peaks preceding the Off-System Sale (DL Peak Load Average)
over the sum of the DL Peak Load Average, plus the average peak WP Load
Requirements for the twelve (12) coincident monthly peaks preceding the
Off-System Sale.
6.04 UNREGULATED LOAD SALES When DL's and WP's Generating Resources are
dispatched to serve Unregulated Load Requirements, the benefits of the
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sale shall be shared by WP and DL on the basis of the ratio of the average peak
DL Unregulated Load Requirements for the twelve coincident monthly peaks
preceding the sale (DL Unregulated Peak Load Average) over the sum of the DL
Unregulated Peak Load Average, plus the average peak WP Unregulated Load
Requirements for the twelve coincident monthly peaks preceding the sale.
ARTICLE VII
ASSIGNMENT OF TRANSMISSION SERVICE REVENUES
7.01 REVENUE FROM THE COMBINED SYSTEM'S OPEN ACCESS TRANSMISSION TARIFF
Revenue from the Combined System's Open Access Transmission Tariff
("Tariff") and any other applicable transmission service revenues shall be
assigned to DL consistent with the "network customer-owned transmission
facilities" requirements of Section 30.9 of the Tariff. Each Party to this
Agreement recognizes that all Parties have significant transmission investments
that qualify as network customer owned transmission facilities under the Tariff.
ARTICLE VIII
BILLING PROCEDURES
8.01 RECORDS
The Agent shall maintain such records as may be necessary to determine
the assignment of costs and benefits of coordinated operations pursuant to
Article VI of this Agreement. Such records shall be made available to the
Parties upon request.
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8.02 MONTHLY STATEMENTS
As promptly as practicable after the end of each calendar month, the
Agent shall prepare a statement setting forth the monthly summary of the costs
and revenues allocated or assigned to the Parties in sufficient detail as may be
needed for settlements under the provisions of this Agreement.
8.03 TAXES
Should any federal, state, or local tax, in addition to such taxes as
may now exist, be levied upon the electric power, energy, or service to be
provided in connection with this Agreement, or upon the provider of service as
measured by the power, energy, or service, or the revenue therefrom, such
additional tax shall be included in the net billing.
ARTICLE IX
FORCE MAJEURE
No Party shall be liable to the other Parties for or on account of any
loss, damage, injury, or expense resulting from or arising out of a delay or
failure to perform, either in whole or in part, any of the agreements
covenants, or obligations made by or imposed upon the Parties by this Agreement,
by reasons of or through strike, work stoppage of labor, failure of contractors
or suppliers of materials (including fuel), failure of equipment, environmental
restrictions, riot, fire, flood, ice, invasion, civil war, commotion,
insurrection, military or usurped power, order of any Court granted in any bona
fide adverse legal proceedings or action, or of any civil or military authority
either
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de facto or de jure, explosion, Act of God or the public enemies, or any
cause reasonably beyond its control and not attributable to its neglect. Any
Party experiencing such a delay or failure to perform shall use due diligence to
remove the cause or causes thereof. However, no Party shall be required to add
to, modify, or upgrade any facilities, or to settle a strike or labor dispute
except when, according to its own best judgment, such action is advisable.
ARTICLE X
INDUSTRY STANDARDS
The Parties agree to conform to all applicable NERC and ECAR
principles, guides, criteria, and standards and industry standard practices of
reliable system operations as they affect the implementation of this Agreement.
ARTICLE XI
GENERAL
11.01 NO THIRD PARTY BENEFICIARIES
This Agreement does not create rights of any character whatsoever in
favor of any person, corporation, association, entity or power suppliers, other
than the Parties, and the obligations herein assumed by the Parties are solely
for the use and benefit of said Parties. Nothing in this Agreement shall be
construed as permitting or vesting, or attempting to permit or vest, in any
person, corporation, association, entity or power suppliers, other than the
Parties, any rights hereunder or in any of the Generating Resources or
Transmission Plant owned by the Parties or the use thereof.
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11.02 WAIVERS
Any waiver at any time by any Party of its right with respect to a
default under this Agreement, or with respect to any other matter arising in
connection with this Agreement, shall not be deemed a waiver with respect to any
subsequent default or matter. Any delay, short of the statutory period of
limitation, in asserting or enforcing any right under this Agreement, shall not
be deemed a waiver of such right.
11.03 SUCCESSORS AND ASSIGNS
This Agreement shall inure to the benefit of and be binding upon the
Parties only, and their respective successors and assigns, and shall not be
assignable by any Party without the written consent of the other Parties except
to a successor in the operation of its properties by reason of a merger,
consolidation, sale or foreclosure where substantially all such properties are
acquired by or merged with such a successor.
11.04 LIABILITY AND INDEMNIFICATION
Subject to any applicable state or federal law which may specifically
restrict limitations on liability, each Party shall release, indemnify, and hold
harmless the other Parties, their directors, officers and employees from and
against any and all liability for loss, damage, or expense alleged to arise
from, or incidental to, injury to persons and/or damage to property in
connection with its facilities or the production or transmission of electric
energy by or through such facilities, or related to performance or
non-performance of this Agreement, including any negligence arising hereunder.
In no event shall any Party be liable to the other Parties for any indirect,
special incidental, or consequential damages with respect to any claim arising
out of this Agreement.
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11.05 GOVERNING LAW
The validity, interpretation and performance of this Agreement and each
of its provisions shall be governed by the applicable laws of the commonwealth
of Pennsylvania.
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ARTICLE XII
REGULATORY APPROVAL
12.01 REGULATORY AUTHORIZATION
This Agreement shall be subject to the approval of the regulatory
agencies having jurisdiction. In the event that this Agreement is not accepted
in its entirety by all such agencies, any Party may terminate this Agreement
immediately.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed and attested by their duly authorized officers on the day and year
first above written.
MONONGAHELA POWER COMPANY
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ BY /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Secretary Vice President
THE POTOMAC EDISON COMPANY
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ BY /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Secretary Vice President
WEST PENN POWER COMPANY
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Secretary Vice President
DUQUESNE LIGHT COMPANY
By_____________________________________
President and Chief Executive Officer
WEST PENN POWER COMPANY
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Secretary Vice President
DUQUESNE LIGHT COMPANY
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Secretary President and Chief Executive Officer