EXHIBIT B-1(a)
AMENDMENT NO. 1 TO
STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 1, dated as of March 23, 2004, to the STOCK PURCHASE
AGREEMENT, dated as of February 2, 2004, is entered into by and among Ameren
Corporation, a Missouri corporation ("Purchaser"), Illinova Corporation, an
Illinois corporation ("Seller"), Illinova Generating Company, an Illinois
corporation ("IGC"), and Dynegy Inc., an Illinois corporation ("Dynegy").
Dynegy, IGC and Seller are referred to herein as the "Dynegy Parties".
W I T N E S S E T H:
WHEREAS, Purchaser and the Dynegy Parties entered into a Stock Purchase
Agreement, dated February 2, 2004 (the "Original Agreement"), providing for the
sale to Purchaser of all of the capital stock of Illinois Power Company, an
Illinois corporation, held by Seller, and IGC's 20% share of Electric Energy,
Inc., an Illinois corporation; and
WHEREAS, Purchaser and the Dynegy Parties wish to amend the Original
Agreement as set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual terms,
conditions and agreements set forth herein, the parties hereto hereby agree as
follows:
Section 1 Defined Terms. All capitalized terms used and not defined
herein have the meanings set forth in the Original Agreement.
Section 2 Amendments to Section 1.1.
A. The definition of "Ancillary Agreements" included in
Section 1.1 of the Original Agreement is amended to add the following
after the reference to the "Tier 2 Memorandum,":
"the Interim PPA Rider,".
B. Section 1.1 of the Original Agreement is amended to add the
following definition after the definition of Intercompany Note:
""Interim PPA Rider" means the agreement between DMG and IPC in
the form of Exhibit I, with such changes as may be required by
Governmental Authorities as a condition to approving the transactions
or any portion thereof contemplated by this Agreement and the
Ancillary Agreements that are required to be accepted by Seller or by
Purchaser, pursuant to the provisions of Section 5.3 or are otherwise
accepted by Seller and by Purchaser.".
Section 3 Amendment to Section 5.21. Section 5.21(b) of the Original
Agreement is amended by changing the reference to "30 days" in the second
sentence to "90 days".
Section 4 Amendment to Section 8.2(j). Section 8.2(j) of the Original
Agreement is amended by deleting such Section and replacing it with the
following:
"Solely if the Closing occurs after September 10, 2004, the ▇▇▇▇▇▇
Assets, or IPC's rights, interests, assets, liabilities and
obligations with respect to the electric generating equipment and real
estate at the ▇▇▇▇▇▇ Energy Center, shall have been transferred to DMG
and IPC shall have no remaining obligations with respect to the ▇▇▇▇▇▇
Assets. For avoidance of doubt, it is the intent of this
Section 8.2(j) that all of IPC's rights, interest, assets, liabilities
and obligations with respect to the ▇▇▇▇▇▇ Assets, or IPC's rights,
interests, assets, liabilities and obligations with respect to the
electric generating equipment and real estate at the ▇▇▇▇▇▇ Energy
Center, shall have been transferred to or otherwise come to be held by
DMG, excluding only those rights, interests, assets, liabilities and
obligations of IPC as a public utility that are necessary for the
continued operation by DMG of the ▇▇▇▇▇▇ Energy Center, including
IPC's rights, interests, assets, liabilities and obligations under the
Interconnection Agreement and the gas service contracts listed on
Schedule 3.19. Nothing herein shall preclude DMG from acquiring the
▇▇▇▇▇▇ Assets, or the electric generating equipment and real estate at
the ▇▇▇▇▇▇ Energy Center, at any time prior to September 10, 2004."
Section 5 Amendment to Schedule 5.3(b). Schedule 5.3(b) to the
Original Agreement is amended as set forth in Exhibit 1 hereto.
Section 6 Amendment to Schedule 5.15. Schedule 5.15 to the Original
Agreement is amended as set forth in Exhibit 2 hereto.
Section 7 Amendment to Schedule 8.1(b). Schedule 8.1(b) to the
Original Agreement is amended as set forth in Exhibit 3 hereto.
Section 8 Amendment to Schedule 8.2(b). Schedule 8.2(b) to the
Original Agreement is amended as set forth in Exhibit 4 hereto.
Section 9 Amendment to Exhibit B. Exhibit B to the Original Agreement
is amended by changing the reference to "thirty (30) days" in the bracketed
note at the top of page 1 of Exhibit B to "ninety (90) days".
Section 10 Amendment to Exhibit F. Exhibit F to the Original Agreement
is amended by replacing the agreement attached as Exhibit F with the Form
of Blackstart Agreement attached hereto as Exhibit 5.
Section 11 Addition of Exhibit I. The Original Agreement is amended by
adding, immediately following Exhibit H, a new Exhibit I containing the
form of Interim PPA Rider attached hereto as Exhibit 6.
Section 12 No Other Amendments. Except as set forth herein, the
Original Agreement remains in full force and effect.
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Section 13 Counterparts. This Agreement may be executed in one or more
counterparts, and by the parties in separate counterparts, each of which
when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, Seller, IGC, Dynegy and Purchaser have caused this
Amendment No. 1 to the Original Agreement to be executed as of the date first
written above by their respective officers thereunto duly authorized.
ILLINOVA CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Senior Vice President &
Treasurer
ILLINOVA GENERATING COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Senior Vice President &
Treasurer
DYNEGY INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Senior Vice President &
Treasurer
AMEREN CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President,
Regulatory Policy,
General Counsel &
Secretary
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EXHIBIT 1
Amendment to Schedule 5.3(b)
The following is added at the end of Schedule 5.3(b):
"8. The balance sheet and income statement impacts of purchase
accounting entries "pushed down" to the financial statements
of IPC will not serve, individually or in the aggregate, to
increase or decrease rate base, cost of service or any other
factor upon which IPC's rates will be determined in future
ICC proceedings (except as provided in clause (v) of Part I
of Schedule 8.2(b) to the Agreement).".
EXHIBIT 2
Amendments to Schedule 5.15
The paragraphs describing the first and second steps are deleted
in their entireties and the following are inserted in lieu thereof:
"First, the principal amount of the Intercompany Note will be
reduced or offset by (i) the amount of certain payables owed by
IPC to Seller or other Affiliates of Dynegy and (ii) the amount
of interest that has then been paid by Seller to IPC on the
Intercompany Note but has not been earned.
Second, Dynegy and Seller will, and Seller will cause IPC to,
immediately following such reduction, eliminate or reduce the
remaining balance of the Intercompany Note to zero, which
elimination or reduction may occur (in whole or in part) through
one or more of the following: (i) distribution of the
Intercompany Note (net of any prepaid interest) to Dynegy or
Seller; (ii) a repurchase of common equity by IPC from Seller;
(iii) the assignment of the Intercompany Note by IPC, after the
balance thereof has been reduced by the amount of any prepaid
interest thereon theretofore paid by Seller, to Dynegy or one of
its Affiliates and subsequent elimination of the Intercompany
Note; (iv) a release of Seller by IPC from Seller's remaining
obligations under the Intercompany Note; or (v) other means
reasonably acceptable to Dynegy and Purchaser. In furtherance of
eliminating or reducing the Intercompany Note, Dynegy and its
Affiliates shall be freely permitted to assign to Seller any
obligations of IPC or claims against IPC that they hold.".
EXHIBIT 3
Amendment to Schedule 8.1(b)
The following is added at the end of paragraph 2 of Schedule 8.1(b): "and
the Interim PPA Rider".
EXHIBIT 4
Amendment to Schedule 8.2(b)
The following is added at the end of clause (iv) of the section of
Schedule 8.2(b) captioned "I. ICC APPROVALS":
"For purposes of this clause (iv), the expression "Purchaser's
proposed IPC accounting entries associated with the acquisition" shall
refer to (1) the application of purchase accounting to the acquisition
and the "push-down" of associated accounting entries to the financial
statements of IPC, which together shall, among other things, cause the
retained earnings balance of IPC to be zero immediately after the
Closing, after giving effect to purchase accounting adjustments
established in accordance with GAAP, and (2) the entries associated
with the effect of the 338(h)(10) election on IPC's deferred tax
balances. Purchaser shall commit, and the ICC shall find, that the
balance sheet and income statement impacts of purchase accounting
entries "pushed down" to the financial statements of IPC will not
serve, individually or in the aggregate, to increase or decrease rate
base, cost of service or any other factor upon which IPC's rates will
be determined in future ICC proceedings (except as provided in
clause (v) of this Part I of Schedule 8.2(b)).".
EXHIBIT 5
Form of Blackstart Agreement
BLACK START SERVICE AGREEMENT
BY AND BETWEEN
ILLINOIS POWER COMPANY AND
DYNEGY MIDWEST GENERATION, INC.
This Black Start Service Agreement is entered into as of the day of
, 2004, by and between Illinois Power Company, an Illinois
corporation ("Illinois Power"), and Dynegy Midwest Generation, Inc., an Illinois
corporation ("DMG"), for the purpose of DMG providing Black Start Service to
Illinois Power for purposes of system re-energization and restoration following
a system-wide blackout on the Illinois Power T&D System.
W I T N E S S E T H:
WHEREAS, Illinois Power is the owner and operator of the Illinois Power T&D
System;
WHEREAS, DMG is the owner and operator of certain fossil-fueled generating units
that are listed on Schedule A which have the capability to be started without
taking electric energy from the Illinois Power T&D System;
WHEREAS, such DMG generating units are interconnected to the Illinois Power T&D
System;
WHEREAS, Illinois Power desires to have DMG provide Black Start Service
for purposes of the re-energization and restoration of the Illinois Power T&D
System following a system-wide blackout on the Illinois Power T&D System and DMG
desires to provide such Black Start Service;
WHEREAS, Illinois Power and DMG have agreed to execute this Agreement in order
to establish the terms and conditions of DMG's provision of Black Start Service
to Illinois Power.
NOW, THEREFORE, in consideration of the mutual representations, covenants, and
agreements hereinafter set forth, and intending to be legally bound hereby,
Illinois Power and DMG covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND USAGES
----------------------
1.1 Definitions. Whenever used with initial capitalization in this Agreement,
the following terms shall have the following meanings:
"Agreement" shall mean this Black Start Service Agreement between Illinois
Power and DMG, including all Schedules attached hereto, and any amendments
hereto or thereto.
"ADR" shall mean Alternative Dispute Resolution.
"Applicable Laws and Regulations" shall mean all duly promulgated
applicable federal, state and local laws, regulations, rules, ordinances,
codes, decrees, judgments, directives, or judicial or administrative
orders, permits and other duly authorized actions of any Governmental
Authority.
"Black Start Capable" shall mean an electric generating unit that is
capable of being started without electrical energy being supplied from the
Illinois Power Transmission System or the Illinois Power Distribution
System.
"Black Start Service" shall mean the services provided by DMG to Illinois
Power under the terms of this Agreement to deliver electric energy to
Illinois Power at the Interconnection Point(s) following a Blackout.
"Blackout" shall mean a total or partial loss or interruption of electric
power on the Illinois Power T&D System that requires the delivery of
electric energy from one or more of the Units to restart Designated
Generation Resources to re-energize and restore the Illinois Power T&D
System to normal operating condition.
"Breaching Party" shall have the meaning assigned to such term in
Section 11.2 of this Agreement.
"Claim" shall have the meaning assigned to such term in Section 10.2.1 of
this Agreement.
"Confidential Information" means any plan, specification, pattern,
procedure, design, device, list, concept, policy or compilation relating to
the present or planned business of a Party regardless of whether such
Confidential Information is conveyed orally, electronically, in writing,
through inspection, observed by either Party while visiting the premises of
the other Party, or otherwise deduced by the other Party.
"Default" shall have the meaning assigned to such term in Section 11.2 of
this Agreement.
"Designated Generation Resource" shall mean the generating unit listed on
Schedule A as being the generating resource to be started with electric
energy supplied by the applicable Unit or Units.
"Designated Transmission Path" shall mean the direct transmission circuit
between the Interconnection Point for the applicable Unit(s) and the
Designated Generation Resource as listed on Schedule A.
"DMG" shall have the meaning assigned to such term in the first paragraph
hereof.
"Effective Date" shall mean the date on which this Agreement becomes
effective in accordance with Section 2.1.
"Emergency" shall mean a condition or situation that, in the exercise of
reasonable judgment, is deemed imminently likely to: (1) endanger public
health, life or property; or (2) adversely affect or impair the Illinois
Power T&D System, the Facilities, or the transmission and distribution
systems of others to which the Illinois Power T&D System is directly or
indirectly connected; provided, however, that conditions or situations
caused solely by economic reasons shall not constitute an Emergency.
"Facility" or "Facilities" shall mean the Units and the generation-related
assets used, owned and/or leased by DMG in connection with the Units and
shall include such generation-related assets acquired by DMG after the
Effective Date for use in connection with the Units.
"FERC" shall mean the Federal Energy Regulatory Commission or any successor
to the authority thereof.
"Force Majeure" shall mean an event or occurrence or circumstance beyond
the reasonable control of and without the fault or negligence of, and that
could not have been avoided by reasonable foresight and/or diligence by,
the Party claiming Force Majeure, including, but not limited to, acts of
God, labor dispute (including strike), flood, earthquake, storm, fire,
lightning, epidemic, war, riot, civil disturbance, sabotage, acts of public
enemy, or explosion, which, in any of the foregoing cases, by the exercise
of due diligence, including the taking of actions in accordance with Good
Utility Practice, such Party is unable to overcome, and which wholly or in
part prevents such Party from performing its obligations under this
Agreement. Mere economic hardship of a Party does not constitute Force
Majeure.
"Good Utility Practice" shall mean any of the practices, methods and acts
engaged in or approved by a significant portion of the electric industry
during the relevant time period, or any of the practices, methods and acts
which, in the exercise of reasonable judgment in light of the facts known
at the time the decision was made, could have been expected to accomplish
the desired result at a reasonable cost consistent with good business
practices, reliability, safety and expedition. Good Utility Practice is not
intended to be limited to the optimum practice, method, or act to the
exclusion of all others, but rather to be acceptable practices, methods, or
acts generally accepted in the region. Good Utility Practice shall include,
but not be limited to, compliance with Applicable Laws and Regulations,
applicable standards, the National Electric Safety Code, and the National
Electrical Code, as they may be amended from time to time, including the
criteria, rules and standards of any successor organizations.
"Governmental Authority" shall mean any federal, state, local or other
governmental regulatory or administrative agency, court, commission,
department, board, or other governmental subdivision, legislature,
rulemaking board, tribunal, or other governmental authority having
jurisdiction over the Parties, their respective facilities, or the
respective services they provide.
"ICC" shall mean the Illinois Commerce Commission or any successor to the
authority thereof.
"Indemnified Party" shall have the meaning assigned to such term in
Section 10.2.1 of this Agreement.
"Indemnifying Party" shall have the meaning assigned to such term in
Section 10.2.1 of this Agreement.
"Illinois Power" shall have the meaning assigned to such term in the first
paragraph hereof.
"Illinois Power Distribution System" shall mean the facilities owned,
controlled, or operated by Illinois Power, either jointly or individually,
for the purposes of providing distribution services.
"Illinois Power Transmission System" shall mean the facilities owned,
controlled, or operated by Illinois Power, either jointly or individually,
for purposes of providing point-to-point or network transmission service
under the OATT or the tariffs of an RTO.
"Illinois Power T&D System" shall mean the Illinois Power Transmission
System and the Illinois Power Distribution System, collectively.
"Interconnection Points" are those points identified as Interconnection
Points in the Second Revised Interconnection Agreement by and between
Illinois Power Company and Dynegy Midwest Generation, Inc. dated as of
November 30, 2000, as revised as of March 29, 2001 and revised as of
January 8, 2004, and as such agreement that may be amended from time to
time.
"MAIN" shall mean the Mid-America Interconnected Network, a regional
reliability governing body, or any successor to the authority thereof.
"NERC" shall mean North American Electric Reliability Council or any
successor to the authority thereof.
"Net Electric Output" shall mean the total output of electric energy of
each Unit identified in Schedule A, net of the auxiliary electric load of
the applicable Facility, including transformer and other losses.
"Non-Breaching Party" shall have the meaning assigned to such term in
Section 11.2 of this Agreement.
"OATT" shall mean Illinois Power's Open Access Transmission Tariff, on file
with FERC, as it may be amended or superseded from time to time, under
which transmission service is provided by or for Illinois Power over the
Illinois Power T&D System, or any future transmission tariff on file with
FERC governing transmission service over the Illinois Power T&D System,
including, but not limited to, an RTO transmission tariff.
"Parties" shall mean Illinois Power and DMG collectively.
"Party" shall mean Illinois Power and DMG individually.
"Permitted Recipient" shall have the meaning assigned to such term in
Section 14.3.
"Restoration Plan" shall have the meaning assigned to such term in
Section 3.5.
"RTO" shall mean the regional transmission organization, if any, that
assumes responsibility for operating the transmission systems of its
transmission-owning members, including Illinois Power.
"Schedule" shall mean any of the schedules, designated as Schedule A and B,
attached to this Agreement and which are incorporated herein by reference.
"Transmission Providers" shall mean those entities that own, operate, or
control facilities used for the transmission of electric energy in
interstate commerce and are subject to the requirements of FERC Order No.
888, as amended, either by operation of law or voluntary submission to its
requirements.
"Transmission Operator" shall mean the persons or entity designated by
Illinois Power who coordinate the interconnection of the Facilities with
the Illinois Power T&D System.
"Units" shall mean those Black Start Capable fossil-fueled generating units
listed on Schedule A.
1.2 Interpretation. The following terms and conditions shall apply in any
interpretation and construction of this Agreement.
1.2.1 Unless preempted by federal law, this Agreement, and the legal
relations between the Parties with respect to this Agreement, shall be
performed, interpreted and enforced in accordance with internal laws
of the State of Illinois without regard to rules concerning conflicts
of law that would direct the application of the laws of any other
jurisdiction.
1.2.2 This Agreement sets forth the entire understanding and agreement of
the Parties as to the subject matter of this Agreement and merges and
supersedes all prior written and oral understandings, offers,
agreements, commitments, representations, writings, discussions or
other communications of every kind between the Parties pertaining to
Black Start Service and any such prior agreements, understandings,
offers, agreements, commitments, representations, writings,
discussions or other communications shall not be used in interpreting
or construing this Agreement.
1.2.3 This Agreement may be amended or modified only by a writing executed
by the authorized representatives of both Parties. Any purported
amendment or modification that is not in writing and so executed shall
be null and void from its inception.
1.2.4 No provision, condition or requirement of this Agreement may be waived
except by mutual agreement of the Parties as expressed in writing and
signed by both Parties. No waiver by either Party of the performance
of any provision, condition or requirement herein shall be
interpreted, construed or deemed to be a waiver of, or in any manner
release the other Party from, performance of any other provision,
condition or requirement herein; nor shall it be interpreted,
construed or deemed to be a waiver of, or in any manner release the
other Party from future performance of the same provision, condition,
or requirement; nor shall any delay or omission of a Party in
exercising any right hereunder in any manner impair the exercise of
any such right or any like right accruing to it thereafter.
1.2.5 The headings, captions and titles of this Agreement are inserted for
convenience only and shall not be deemed part thereof or be taken into
consideration in the interpretation or construction of this Agreement.
1.2.6 Whenever used herein the singular number shall include the plural, the
plural shall include the singular, and the use of any gender shall
include all genders.
1.2.7 Wherever in this Agreement provision is made for a communication to be
"written" or "in writing" this means any hand-written, typewritten or
printed communication, including telex, cable and facsimile
transmission, provided in accordance with Article 17.
1.2.8 Wherever in this Agreement provision is made for the giving of notice,
consent or approval by any person, such notice, consent or approval
shall be in writing and the word "notify" shall be construed
accordingly, unless the text specifically allows or requires the
notice, consent or approval to be given in a form other than writing.
1.2.9 References to day or days are references to calendar days, and unless
otherwise noted, specifically include weekends, holidays, or other
non-work days.
1.2.10 A reference to an Article, Section, Paragraph or Schedule is, unless
otherwise noted, to an Article, Section, Paragraph or Schedule of or
to this Agreement.
1.2.11 A reference to any agreement or document is to that agreement or
document (including attachments, exhibits and schedules thereto and,
where applicable, any of its provisions) as amended, novated,
supplemented, assigned or replaced.
1.2.12 A reference to any Party to this Agreement includes its permitted
substitutes, successors and assigns.
1.2.13 Where an expression is defined, another part of speech or grammatical
form of that expression has a corresponding meaning.
1.2.14 References to "include" and "including" shall be construed as
"include, without limitation" and "including, without limitation."
1.2.15 A reference to any statute, regulation, proclamation, ordinance, or
order includes all statutes, regulations, proclamations, ordinances,
or orders varying, consolidating, or replacing such statute,
regulation, proclamation, ordinance, or order and a reference to a
statute includes all regulations, proclamations, ordinances, and
orders issued under that statute.
1.2.16 A reference to any authority, association or body whether statutory or
otherwise shall, in the event of any such authority, association or
body ceasing to exist or being reconstituted, renamed or replaced or
the powers or functions thereof being transferred to any other
authority, association or body, be deemed to refer respectively to the
authority, association or body established or constituted in lieu
thereof or as nearly as may be succeeding to the powers or functions
thereof.
1.2.17 All Schedules referred to in this Agreement are expressly incorporated
herein by reference as if set forth in full, whether or not attached
hereto. In the event of any conflict between the terms and conditions
of this Agreement and the terms and conditions of any exhibit,
schedule or other documents referenced herein, the terms and
conditions of this Agreement shall govern and control.
1.2.18 If any provision of this Agreement is held to be illegal, invalid, or
unenforceable and such invalidity or unenforceability does not have a
material and substantial negative impact on the rights, duties and
obligations of either Party hereto (a) such provision shall be fully
severable, (b) this Agreement shall be construed and enforced as if
such illegal, invalid, or unenforceable provision had never comprised
a part of this Agreement, and (c) the remaining provisions of this
Agreement shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its
severance from this Agreement. Furthermore, (i) in lieu of such
illegal, invalid, or unenforceable provision, there shall be added
automatically as a part of this Agreement a provision as similar in
terms to such illegal, invalid, or unenforceable provision as may be
possible and as may be legal, valid, and enforceable and (ii) such
illegality, invalidity or unenforceability shall not affect the
validity or enforceability in that jurisdiction of any other provision
of this Agreement nor the validity or enforceability in other
jurisdictions of that or any other provision of this Agreement.
1.2.19 This Agreement shall be considered for all purposes as prepared
through the joint efforts of the Parties, and shall not be construed
against one Party or the other as a result of the preparation,
submittal or other event of negotiation, drafting or execution of this
Agreement.
ARTICLE 2
EFFECTIVE DATE; TERM; REGULATORY FILING
---------------------------------------
2.1 Effective Date. This Agreement shall be effective on ,
2004, subject to acceptance by the FERC.
2.2 Term. This Agreement shall continue in effect until the earlier of
December 31, 2006 or termination:
(i) pursuant to Article 12; or
(ii) upon mutual agreement of the Parties.
Any termination under this Section 2.2 shall not take effect until FERC either
authorizes any request for termination of this Agreement in accordance with its
terms or accepts a written notice of termination.
2.3 Regulatory Filing. Following its execution by the Parties, DMG shall file
this Agreement with FERC as required by the Federal Power Act. To the extent
deemed necessary by Illinois Power, Illinois Power may file this Agreement with
the ICC following its execution by the Parties. The Parties agree to reasonably
cooperate with each other with respect to such filing and provide any
information, including the filing of testimony, reasonably required by the
filing Party to comply with applicable filing requirements.
ARTICLE 3
BLACK START SERVICE
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3.1 Purpose of Service. The Parties acknowledge and agree that the purpose of
this Agreement is solely to provide to Illinois Power at the Interconnection
Points the electric energy necessary to start the Designated Generation
Resources following a Blackout and that DMG is assuming no obligations with
respect to the Units, the Designated Generation Resources or otherwise except as
expressly set forth in this Agreement.
3.2 Service Provided. Subject to the terms and conditions of this Agreement,
DMG shall provide Illinois Power with Black Start Service from the Units at the
applicable Interconnection Points for the term of this Agreement.
3.3 Other Service Excluded. Black Start Service as provided for in this
Agreement shall not include any other generating, capacity or ancillary
services, and the provision of any such services by DMG to Illinois Power shall
be pursuant to the terms and conditions of a separate agreement(s) for such
service(s).
3.4 No Fees or Charges. DMG shall have no obligation to pay Illinois Power any
wheeling or other fees, charges or compensation for electric power and/or energy
transferred through Illinois Power's equipment or facilities pursuant to this
Agreement, and Illinois Power waives any right it might otherwise have to
collect such charges.
3.5 Restoration Plan. Illinois Power shall develop a plan, consistent with the
terms and conditions set forth in this Agreement, including procedures and
sequencing of actions and studies, modeling or simulations to confirm same, for
re-energization and restoration of the Illinois Power T&D System to normal
operation following a Blackout in consultation with DMG ("Restoration Plan").
Such Restoration Plan shall not obligate DMG to any service or requirements of
Black Start Service over and above those set forth in this Agreement. Upon
finalization of the Restoration Plan, Illinois Power shall provide DMG a copy of
the Restoration Plan, including any studies, modeling or simulations performed
in development of the Restoration Plan. The Restoration Plan shall become
effective thirty (30) days after its receipt by DMG; provided, however, if the
Restoration Plan requires substantial retraining of DMG personnel to implement,
such Restoration Plan shall become effective upon completion of such training.
3.6 Restoration Plan Requirements. Both Parties acknowledge and agree that DMG
acquired the Units from Illinois Power and that, although the Units have been
sufficiently tested, studied and modeled to be determined to be Black Start
Capable, the capabilities of the Units have not been tested, studied or modeled
to determine the capabilities of the Units under all conditions. Consequently,
the Parties agree that the following requirements shall be reflected in the
Restoration Plan.
3.6.1 Because the Units are not designed to, or capable of,
maintaining voltage and frequency on the Illinois Power T&D
System by themselves, Illinois Power shall ensure that the
Designated Transmission Path:
(i) is de-energized and free of any faults prior to issuing any
instructions to DMG pursuant to Article 5;
(ii) permits a steady state no load voltage of .95 per unit to be
maintained by the Unit(s) at the Designated Generation
Resource;
(iii) has sufficient load connected to it as is necessary to
maintain stability and adequate voltage of the Designated
Transmission Path once a Unit(s) has begun delivering
electric energy to an Interconnection Point(s) of the
Designated Transmission Path; and
(iv) is the lowest practical impedence transmission path to the
applicable Designated Generation Resource.
3.6.2 Each Unit will deliver its Net Electric Output to the applicable
Interconnection Point. Except as permitted pursuant to Paragraph
3.6.1(iii) above, a Unit will not be required to pick up any load
other than the auxiliary electric load of the applicable
Facility, including transformer and other losses, and starting
loads of the Designated Generation Resource(s). Furthermore, the
Unit(s) and the Facilities shall not be solely responsible for
(i) re-energizing and/or restoring the Illinois Power T&D System
to normal operating condition, (ii) maintaining voltage and
frequency on the Illinois Power T&D System, (iii) picking up
Illinois Power native load, or (iv) restoring transmission paths
and interties with other electric transmission systems.
Notwithstanding the immediately preceding sentence, each Unit
shall continue to deliver electric energy to the applicable
Interconnection Point pursuant to Illinois Power's instructions
for the duration of the re-energization and restoration of the
Illinois Power T&D System following the Blackout.
3.6.3 If any Unit is not able to comply with the requirements of the
Restoration Plan, the Party becoming aware of such noncompliance
shall notify the other Party in writing. Following such
notification, the Parties shall make a mutual determination of
the Unit's ability to comply with the Restoration Plan regarding
this parameter as of the date of the initial Black Start
Capability verification test pursuant to Section 4.3 for the
Unit. If such determination indicates that a Unit operating
parameter did not permit compliance with the Restoration Plan as
of the date of such test, the Restoration Plan shall be revised
such that the determined capability regarding this parameter as
of the date of such test shall become the standard for that Unit
in determining compliance with the Restoration Plan.
Notwithstanding the foregoing, DMG, consistent with Good Utility
Practice, shall not knowingly cause or through degradation allow
the Units to become unable to operate in a manner not in
compliance with the Restoration Plan.
3.7 Electric Energy Output. Illinois Power shall have sole responsibility for
the Net Electric Output of the Unit(s) providing Black Start Service following
its delivery to Illinois Power as set forth in Section 5.4 below.
3.8 Compensation for Black Start Service. Illinois Power shall pay DMG for
Black Start Service in accordance with Article 6 of this Agreement.
ARTICLE 4
BLACK START REQUIREMENTS AND TESTING
------------------------------------
4.1 General. Subject to the terms and conditions of this Agreement, DMG shall
demonstrate the capability of each Unit to provide Black Start Service to the
Illinois Power T&D System at the applicable Interconnection Point on an annual
basis.
4.2 Black Start Capability Requirements. Each Unit shall be required to meet
the following criteria.
4.2.1 Each Unit shall have the ability to start within the time
specified on Schedule A for that Unit without the input of
electric power from another source that requires the delivery of
such electric power over the Illinois Power T&D System.
4.2.2 Each Unit shall have the ability to close into a dead
(de-energized) bus.
4.2.3 Each Unit shall have specific procedures for the initiation,
maintenance and cessation of Black Start Service pursuant to
this Agreement on site.
4.3 Black Start Capability Testing. Each Unit shall be tested as required by
MAIN, NERC, or the applicable RTO to verify that it meets the requirements set
forth in Section 4.2 above. Black Start Capability tests shall be scheduled by
DMG in consultation with Illinois Power; provided, however, DMG shall have the
right to final determination of test dates and schedules. Illinois Power shall,
at its own expense, have the right to observe the testing of the Units and DMG
shall provide Illinois Power notice of each test not less than five (5) business
days prior to each initial test and as much notice as practicable of any retest
pursuant to Section 4.3.5 below. Illinois Power shall own and have sole
responsibility for the electric energy output of the Unit(s) during testing and,
unless otherwise agreed by the Parties in advance of the test, shall pay DMG for
such testing in accordance with Article 6 of this Agreement; provided, however,
DMG shall not be entitled to compensation from Illinois Power for any test that
is not successfully completed.
4.3.1 Annual Black Start Capability tests shall, at a minimum, include:
(i) starting and bringing the Unit to synchronous speed without
an electrical feed from the Illinois Power T&D System; and
(ii) simulating switching needed to connect the Unit to the
Interconnection Point following a Blackout.
4.3.2 The ability of a Unit to close into a dead (de-energized) bus as
required under Paragraph 4.2.2 above may be demonstrated by
opening the breaker on the high side of the Unit's generator
step-up transformer and then closing the generator breaker on the
low side of the Unit's generator step-up transformer without the
generator breaker tripping open.
4.3.3 If a Unit fails to successfully complete a Black Start
Capability test, DMG shall have a seven (7) day grace period
within which it may retest the Unit without financial penalty. If
the Unit does not successfully complete a new Black Start
Capability test within the seven (7) day grace period immediately
following a failed Black Start Capability test, DMG shall not be
entitled to compensation from Illinois Power for the period from
the time of the first unsuccessful test until the Unit
successfully completes a Black Start Capability test other than
compensation for any test that is successfully completed.
4.3.4 DMG shall provide Illinois Power records of all Black Start
Capability tests for each Unit. Such records shall include for
each test:
(i) Unit location;
(ii) Unit name;
(iii) date(s) of the test;
(iv) method used to start Unit (diesel, compressed air, high
pressure natural gas, etc.);
(v) duration of the test from start of the test until test
terminated, including
(a) time test started (de-energization of all sources of AC
power to Unit);
(b) time Unit startup initiated;
(c) time Unit reached nominal voltage and frequency;
(d) time breaker closed to energize equipment or load (if
applicable); and
(e) time Unit shut down or test concluded/terminated.
(vi) whether the Unit was able to start without being connected
to the Illinois Power T&D System;
(vii) whether the Unit was able to close a circuit breaker into a
dead (de-energized) bus, if applicable;
(viii) if a breaker was closed to energize equipment or load, a
description of equipment or load energized;
(ix) whether the Unit successfully started;
(x) whether the Unit was able to reach nominal voltage and
frequency under no load conditions and capable of supplying
power;
(xi) an explanation of the cause(s) of any failed test and
corrective actions taken; and
(xii) unless previously provided, a copy of the black start
procedures for the Unit.
ARTICLE 5
BLACK START OPERATIONS AND MAINTENANCE
--------------------------------------
5.1 General. Illinois Power shall operate, maintain and control the Illinois
Power T&D System and DMG shall operate, maintain and control the Units: (i) in a
safe and reliable manner; (ii) in accordance with Good Utility Practice;
(iii) in accordance with NERC and MAIN operational and/or reliability criteria,
protocols, and directives applicable to black start operations; and (iv) in
accordance with this Agreement. Consistent with the proceeding sentence, DMG has
sole authority to determine whether and to what extent any Unit is available for
operation and the extent and timing of any maintenance of the Units. DMG shall
provide to Illinois Power reports concerning Unit maintenance as may be
reasonably requested by Illinois Power.
5.2 Request for Black Start Service. Upon notice from Illinois Power of the
existence of a Blackout, Illinois Power may request that DMG place the start up
and operation of the Units under the control of Illinois Power's dispatcher or
its designated representative for the duration of the re-energization and
restoration of the Illinois Power T&D System following the Blackout. Illinois
Power's control of a Unit shall be implemented in a manner consistent with the
Restoration Plan, Good Utility Practice, safe operating procedures, the design
limits and equipment warranties of the Unit, and Applicable Laws and
Regulations, including, but not limited to, the emissions limitations for the
Unit as reflected in the Unit's air permit, and DMG shall have no obligation to
comply with any operational request of Illinois Power that is not consistent
therewith or that would place any Unit at risk. In addition, Illinois Power
shall not unduly discriminate between the Units and other generating facilities
providing similar service(s) to the Illinois Power T&D System; provided,
however, that nothing in this provision shall require Illinois Power to request
the start up and operation of a Unit to provide Black Start Service before
requesting similar service(s) from other generating facilities connected to the
Illinois Power T&D System.
5.3 Initiation of Black Start Service. Subject to the requirements and
limitations of Section 5.2 above, DMG shall comply with the operational
instructions of Illinois Power's dispatcher or its designated representative
related to Black Start Service for the duration of the re-energization and
restoration of the Illinois Power T&D System following the Blackout. Upon
receiving instructions to commence Black Start Service from a particular
Unit(s), DMG shall use best efforts to man the Unit(s), prepare for black start
operations, start the Unit(s) and be ready to commence generation of electric
energy within the time specified in Schedule A.
5.4 Re-energization. Upon instructions from Illinois Power, DMG shall commence
generation of electric energy with the specified Unit(s) and shall deliver same
to the Interconnection Point associated with the Unit in question. Unless
otherwise provided in the Restoration Plan, Illinois Power shall be responsible
for taking all actions necessary to deliver electric energy generated by the
Unit(s) from the Interconnection Point to the Designated Generating Resource
over the Designated Transmission Path , including maintaining the Designated
Transmission Path in a fault free condition, closing of any breakers on the
Illinois Power T&D System and balancing connected load on the Designated
Transmission Path to maintain stability thereon during and after startup of the
Designated Generating Resource.
5.5 Cessation of Black Start Service. Upon DMG's receipt of notice from
Illinois Power's dispatcher or its designated representative that the Illinois
Power T&D System has been re-energized and restored to normal operation, DMG
shall cease provision of Black Start Service to Illinois Power and resume its
normal delivery schedule.
5.6 System Restoration Drills. DMG shall participate in any drills initiated by
Illinois Power or its designated representative designed to simulate restoration
of the Illinois Power T&D System following a Blackout; provided, however, DMG
shall not be required to start or test any Unit(s) in conjunction with such
drills. Illinois Power shall coordinate such drills with DMG.
ARTICLE 6
COMPENSATION, BILLING AND PAYMENT
---------------------------------
6.1 Compensation. As compensation for DMG Black Start Service pursuant to this
Agreement, Illinois Power shall pay DMG the amount calculated pursuant to
Schedule B for Black Start Services provided to Illinois Power under this
Agreement during the preceding month. In the event that any reference number or
amount set forth in Exhibit D is no longer determined or published, DMG and
Illinois Power shall mutually agree on the reference to be substituted for such
reference number or amount. In addition, Illinois Power shall waive any and all
charges under any agreement between Illinois Power and DMG, that DMG may incur
in assisting Illinois Power in restoration of the Illinois Power T&D System
following a total or partial blackout on the Illinois Power T&D System.
6.2 Invoices. Within a reasonable time after the first day of each month, DMG
shall prepare and promptly deliver to Illinois Power an invoice for Black Start
Services provided to Illinois Power under this Agreement during the preceding
month. Each invoice shall delineate the month in which the Black Start Services
were provided, fully describe the Black Start Services rendered, and be itemized
to reflect the Black Start Services performed or provided.
6.3 Payment. Each Black Start Services invoice shall be paid within fifteen
(15) days of its receipt by Illinois Power. All payments shall be made by
Illinois Power in immediately available funds payable to DMG, or by wire
transfer to a bank named and account designated by DMG.
6.4 Payment Disputes. Illinois Power shall have until two (2) years after it
receives an invoice to contest in good faith the correctness of any charge on
such invoice. If Illinois Power disputes an invoice, or an adjustment thereto,
Illinois Power will, if it has not yet paid such invoice, pay the full amount of
the invoice, including the disputed portion thereof and immediately provide DMG
with notice of the disputed amount and the basis for such dispute. DMG will
promptly review the dispute, and will notify Illinois Power of any error in the
invoice and refund the amount, if any, that Illinois Power is due as a result of
such redetermination. If Illinois Power disagrees with DMG's redetermination,
then Illinois Power may submit the matter to senior officers of Illinois Power
and DMG for good faith discussion and resolution of the dispute. If such senior
officers are unable to resolve the dispute following good faith discussions to
do so, then either Party may proceed under the provisions of Article 16 for
purposes of achieving a final resolution of such dispute. DMG will make any
refunds required hereunder to Illinois Power no later than the fifteenth (15th)
day after the later of: (i) receipt by Illinois Power of such notice of
redetermination; (ii) resolution of such dispute by senior officers of Illinois
Power and DMG; or (iii) final resolution of such dispute pursuant to Article 16.
Refunds by DMG to Illinois Power under this Section 14.4 will include interest
from the date of the original payment until the date such refund, together with
interest thereon, is made, which interest will accrue at the rate provided for
in Section 14.6.
6.5 Waiver. Payment of an invoice shall not relieve Illinois Power from any
other responsibilities or obligations it has under this Agreement, nor shall
such payment constitute a waiver by Illinois Power of any claims it may have
arising under this Agreement.
6.6 Interest. Interest on any unpaid amounts shall be at a rate equal to two
(2) percentage points above the then effective monthly prime commercial lending
rate per annum announced by Citibank, NA, New York, New York office, from time
to time; provided, that for any period that such rate exceeds any applicable
maximum rate permitted by law, the rate shall equal said applicable maximum
rate. Interest on delinquent amounts shall be calculated from the due date of
the ▇▇▇▇ to the date of payment compounded quarterly. When payments are made by
mail, invoices shall be considered as having been paid on the date of receipt of
payment by DMG.
6.7 Default. In the event Illinois Power fails to make payment to DMG on or
before the due date, as set forth above, and such failure of payment is not
corrected within thirty (30) calendar days after DMG notifies Illinois Power to
cure such failure, a default by said Party shall be deemed to exist and the
provisions of Article 11 shall apply.
6.8 Service During Dispute. In the event of a billing dispute between Illinois
Power and DMG under Section 14.4, DMG shall continue to provide Black Start
Service as long as Illinois Power complies with the provisions of Section 6.4.
6.9 Rebilling. DMG reserves the right to issue a revised invoice in the event
the original invoice was inaccurate for any reason, provided such revised
invoice is issued within two (2) years following the date on which the invoice
to be corrected became due and payable. All invoiced amounts and payments under
an invoice shall be deemed true and correct two (2) years following the date on
which the invoice became due and payable and no revision thereof shall be made
thereafter.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
------------------------------
7.1 DMG. DMG is duly organized and validly existing under the laws of the State
of Illinois. DMG is qualified to do business under the laws of the State of
Illinois, is in good standing under the laws of the State of Illinois, has the
power and authority to own its properties, to carry on its business as now being
conducted, and to enter into this Agreement and the transactions contemplated
herein and perform and carry out all covenants and obligations on its part to be
performed under and pursuant to this Agreement, and is duly authorized to
execute and deliver this Agreement and consummate the transactions contemplated
herein.
7.2 Illinois Power. Illinois Power is duly organized, validly existing and
qualified to do business under the laws of the State of Illinois, is in good
standing under its certificate of incorporation and the laws of the State of
Illinois, has the corporate authority to own its properties, to carry on its
business as now being conducted, and to enter into this Agreement and the
transactions contemplated herein and perform and carry out all covenants and
obligations on its part to be performed under and pursuant to this Agreement,
and is duly authorized to execute and deliver this Agreement and consummate the
transactions contemplated herein.
7.3 The Agreement. This Agreement is the legal, valid and binding obligation of
each Party upon its execution by both Parties, and upon its acceptance by the
FERC becomes enforceable in accordance with its terms, except as limited by
Applicable Laws and Regulations.
ARTICLE 8
ASSIGNMENT
----------
8.1 Successors and Assigns. This Agreement, and the rights and obligations
created thereby, shall bind and inure to the benefit of the successors and
permitted assigns of the Parties hereto.
8.2 Assignments Requiring Consent. Except as provided in Sections 8.3 and 8.4
below, neither Party shall voluntarily assign its rights nor delegate its duties
under this Agreement, or any part of such rights or duties, without the written
consent of the other Party, which consent shall not be unreasonably withheld or
delayed, and any such assignment or delegation made without such written consent
shall be null and void.
8.3 Assignments Not Requiring Consent.
---------------------------------
8.3.1 Either Party may assign its rights or delegate its duties under
this Agreement, or any part of such rights or duties, without the
written consent of the other Party to any person or entity that
purchases or otherwise acquires, directly or indirectly, all or
substantially all of the outstanding assets, shares of stock or
other ownership interest, as applicable, of the assigning Party;
8.3.2 DMG may assign this Agreement or portion of this Agreement, as
applicable, in conjunction with the sale of any Unit or all or
any portion of the Facilities not rising to the level of "all or
substantially all" of its assets, stock or other ownership
interest without Illinois Power's written consent as long as the
creditworthiness of the assignee, or any person or entity
guaranteeing the assignee's obligations under this Agreement, if
any, is equal to or better than that of DMG at the time of the
sale, or Illinois Power shall receive other adequate assurance,
in a form reasonably acceptable to DMG in its sole discretion, of
such assignee's ability to fulfill all of the obligations of DMG
under this Agreement with respect to such Unit or Facility(ies).
DMG may also assign this Agreement or portion of this Agreement,
as applicable, to any wholly-owned direct or indirect affiliate
of DMG's parent which acquires DMG or any of the Units or
Facilities without the written consent of Illinois Power.
8.3.3 Illinois Power may assign this Agreement to any wholly-owned
direct or indirect affiliate of Illinois Power's parent which
acquires Illinois Power or all of the Illinois Power T&D System
or Illinois Power's business without the written consent of DMG.
Further, if Illinois Power transfers operational control of all
or any portion of the Illinois Power T&D System to an RTO,
Illinois Power may assign this Agreement or portion of this
Agreement, as applicable, to the RTO without the written consent
of DMG, provided the RTO assumes in writing all or the duties and
obligations of Illinois Power, existing and future, under this
Agreement. The foregoing sentence notwithstanding, nothing
contained herein shall limit the DMG's right to defend this
Agreement or to challenge such assignment, or the terms or
conditions thereof.
8.4 Financing or Refinancing.
------------------------
8.4.1 Notwithstanding the provisions of Section 8.2, DMG may, without
the written consent of Illinois Power, assign, transfer, pledge
or otherwise dispose of its rights and interests hereunder to any
lender, whether as security for amounts payable or otherwise,
under a financing, which financing may include without
limitation, one or more leases (whether capital, operating,
synthetic or otherwise), subleases, mortgages, loans, equity
and/or debt issues (including bonds), the proceeds of which are
used for purposes of financing or refinancing any or all of the
Units or Facilities subject to this Agreement, including upon or
pursuant to the exercise of remedies under such financing or
refinancing, or by way of assignments, transfers, conveyances of
dispositions in lieu thereof.
8.4.2 Illinois Power agrees, if requested by DMG, to enter into an
agreement (in a form reasonably acceptable to Illinois Power)
with the lender, pursuant to which Illinois Power will
acknowledge the creation of security over DMG's rights under this
Agreement and agree that, upon breach of this Agreement or any
loan documents by DMG or the insolvency of DMG, the lender shall:
(i) have the right within a reasonable period of time as
specified therein to cure any breach of this Agreement,
provided the lender agrees to perform DMG's obligations
under the Agreement during the cure period; and
(ii) have the right, upon cure any such breach of this Agreement,
to assume all the rights and obligations of DMG under this
Agreement.
8.5 Obligation of Continued Performance. Except for assignments that do not
require the other Party's written consent, no assignment or transfer of rights
or obligations under this Agreement by either Party shall relieve that Party
from full liability and financial responsibility for the performance thereof
after such transfer or assignment unless and until the transferee or assignee
shall agree in writing to assume all of the obligations and duties, existing and
future, of the assigning or transferring Party and (i)(a) the non-assigning
Party shall have received all amounts then due and payable to it under this
Agreement, if any; and (b) the creditworthiness of such assignee, or any person
or entity guaranteeing the assignee's obligations under this Agreement, if any,
is equal to or better than that of the assignor at the time of the sale, or the
non-assigning Party shall have received other adequate assurance of such
assignee's ability to fulfill all of the obligations, including monetary
obligations, of the assignor under this Agreement, in a form reasonably
acceptable to the non-assigning Party in its sole discretion, or (ii) the
non-assigning Party has consented in writing to release the assigning Party from
liability and financial responsibility for the performance of the assigning
Party's obligations under this Agreement, such consent not to be unreasonably
withheld.
ARTICLE 9
FORCE MAJEURE
-------------
9.1 Force Majeure Events. Notwithstanding anything in this Agreement to the
contrary, neither Party shall be liable in damages or otherwise responsible to
the other Party for a failure to carry out any of its obligations under this
Agreement, other than the obligation to pay an amount when due, if and only to
the extent that it is unable to so perform or is prevented from performing by a
Force Majeure Event. Such exclusion from liability shall extend only for the
period of time necessitated by such Force Majeure Event. Nothing herein shall be
construed to require any Party to settle a labor dispute, lockout or strike.
9.2 Notice. The Party claiming Force Majeure shall give notice to the other
Party of any Force Majeure Event as soon as reasonably practicable, but not
later than two (2) days after the date on which such Party knew of the
commencement of the Force Majeure event.
9.3 Procedures for Force Majeure Event. If a Party claims the occurrence of a
Force Majeure Event as a basis for being excused from performance of its
obligations under this Agreement, then such Party shall: (i) provide prompt
written notice of such Force Majeure Event to the other Party giving an
estimation of its expected duration and the probable impact on the performance
of its obligations hereunder; (ii) exercise all reasonable efforts to continue
to perform its obligations under this Agreement; (iii) expeditiously take all
reasonable action to correct or cure the Force Majeure Event; and (iv) provide
prompt notice to the other Party of cessation of the Force Majeure Event. All
performance obligations hereunder shall be extended by a period equal to the
period during which either Party's obligations were suspended as a result of a
Force Majeure Event.
ARTICLE 10
LIABILITY AND INDEMNIFICATION
-----------------------------
10.1 Limitation of Liability. Except as otherwise expressly provided in this
Agreement, neither Illinois Power nor DMG, nor their respective officers,
directors, agents, employees, parents, affiliates, or successors or assigns of
any of them, shall be liable to the other Party or its parent, subsidiaries,
affiliates, officers, directors, agents, employees, successors or assigns for
claims, suits, actions or causes of action for incidental, punitive, special,
indirect, or consequential damages (including, without limitation, attorneys'
fees or litigation costs, loss of profits or revenue on work not performed, for
loss of use of or under-utilization of the other Party's facilities, or loss of
use of revenues or loss of anticipated profits), resulting from either Party's
performance or non-performance of an obligation imposed on it by this Agreement
, including, without limitation, any such damages which are based upon causes of
action for breach of contract, tort, breach of warranty or strict liability,
save and except to the extent that such damages are caused by the negligence or
willful misconduct of Illinois Power, or DMG, or their respective officers,
directors, agents, employees, parents or affiliates. The provisions of this
Section 10.1 shall survive termination, cancellation, suspension, completion, or
expiration of this Agreement.
10.2 Indemnification.
---------------
10.2.1 Mutual Obligation. Each Party ("Indemnifying Party") shall
indemnify, defend and hold the other Party, its parent,
affiliated and subsidiary and its and their partners, directors,
officers, employees, stockholders, representatives, servants, and
agents (including but not limited to contractors and their
employees) (each and "Indemnified Party") harmless from and
against all liabilities, damages, losses, penalties, claims,
demands, costs or expenses (including court costs, reasonable
attorneys' fees and other costs of defense), suits and
proceedings of any nature whatsoever for any personal injury
(including death) or any property damage ("Claim") that occurs or
arises out of or otherwise results from or is in any manner
connected with the performance or nonperformance of this
Agreement by the Indemnifying Party save and except to the extent
that such injury or damage is attributable to the gross
negligence or willful, wanton or purposeful misconduct of the
Indemnified Party.
10.2.2 Indemnification Procedures.
--------------------------
10.2.2.1 Notice. The Indemnified Party shall give the
Indemnifying Party prompt notice of the assertion of a
Claim or of the commencement of any action or
proceeding with respect to a Claim. Such notice shall
describe the claim in reasonable detail, and shall
indicate the amount (estimated if necessary) of the
claim that has been, or may be sustained by, the
Indemnified Party. In the event that the Indemnified
Party fails to provide prompt notice of a Claim and the
Indemnifying Party is actually and materially
prejudiced as a result, the Indemnifying Party shall
have no further liability under the indemnification
provisions of this Agreement with respect to such
Claim.
10.2.2.2 Defense of Claim. Promptly after receipt by the
Indemnifying Party of notice of any Claim or notice of
the commencement of any action, administrative or legal
proceeding, or investigation with respect to a Claim,
the Indemnifying Party shall assume the defense thereof
with counsel designated by the Indemnifying Party and
satisfactory to the Indemnified Party, such
satisfaction not to be unreasonably withheld; provided,
however, that if the defendants in any such action
include both the Indemnified Party and the Indemnifying
Party and the Indemnifying Party shall have reasonably
concluded that there may be legal defenses available to
the Indemnified Party with respect to a Claim which are
different from or additional to, or inconsistent with,
those available to the Indemnifying Party, then the
Indemnifying Party shall so notify the Indemnified
Party and the Indemnified Party shall have the right to
select separate counsel to participate in the defense
of such Claim on behalf of the Indemnified Party at the
expense of the Indemnifying Party. Except as provided
in Section 10.2.2.4 below, neither Party may settle or
compromise any claim without the prior consent of the
other Party; provided, however, such consent shall not
be unreasonably withheld or delayed.
10.2.2.3 Right to Assume Defense. If a Party believes itself
entitled to indemnification under this Agreement with
respect to a Claim, and the Indemnifying Party fails or
refuses to assume the defense of such Claim after
receiving notice of same pursuant to Section 10.2.2.1,
the Indemnified Party shall have the right, but not the
obligation, to contest or settle such Claim and submit
the issue of indemnification for resolution pursuant to
Article 16.
10.2.2.4 Indemnified Amount. In the event that a Party is
obligated to indemnify and hold the other Party and its
successors and assigns harmless under this Article 10,
the amount owing to the Indemnified Party will be the
amount of the Indemnified Party's actual out-of-pocket
loss net of any insurance proceeds received or other
recovery actually received by or applied for the
benefit of the Indemnified Party.
10.2.3 Employees. Each Party shall comply with applicable worker's
compensation laws, and the indemnities of this Article 10 shall
be fully applicable to all claims and payments arising under such
laws.
10.2.4 Survival. The indemnification obligations of each Party under
this Article 10 shall continue in full force and effect
regardless of whether this Agreement has either expired or been
terminated or canceled.
ARTICLE 11
BREACH, CURE AND DEFAULT
------------------------
11.1 Breach. A breach of this Agreement shall occur upon the failure by a Party
to perform or observe any material term or condition of this Agreement. A breach
of this Agreement shall include:
11.1.1 The failure to pay any amount when due;
11.1.2 The failure to comply with any material term or condition of
this Agreement, including but not limited to any material breach
of a representation, warranty or covenant made in this Agreement;
11.1.3 The appointment of a receiver or liquidator or trustee for the
Party or of any property of the Party, and such receiver,
liquidator or trustee is not discharged within sixty (60) days;
11.1.4 The filing of a case in bankruptcy or any proceeding under any
other insolvency law against the Party by a third-party, and such
case or proceeding has not been stayed or dismissed within sixty
(60) days of filing; or
11.1.5 The filing of a voluntary petition in bankruptcy under any
provision of any federal or state bankruptcy law by the Party.
11.2 Cure and Default. Except for breaches set forth in Sections 11.1.3, 11.1.4,
and 11.1.5 above, upon a Party's breach of its obligations under this Agreement,
the other Party ("Non-Breaching Party") shall give the Party in breach
("Breaching Party") a written notice describing such breach in reasonable
detail, including the nature of the breach and, where known and applicable, the
steps necessary to cure such breach, and demanding that the Breaching Party cure
such breach. The Breaching Party shall be deemed to be in "Default" of its
obligations under this Agreement if: (1) it fails to cure its breach within
thirty (30) days after its receipt of such notice, or (2) where the breach is
such that it cannot be cured within such thirty-day period, the Breaching Party
does not commence in good faith all such steps as are reasonable and appropriate
to cure such breach within such thirty-day period and thereafter diligently
pursue such action to completion. Breaches set forth in Sections 11.1.3 and
11.1.4, above shall become a "Default" upon the expiration of the time period
set forth in such section. Breaches set forth in Section 11.1.5 above shall
become a "Default" immediately upon the occurrence of the breach.
11.3 Right to Compel Performance. Notwithstanding the foregoing, upon the
occurrence of a Default, the non-defaulting Party shall be entitled to (i)
commence an action to require the Defaulting Party to remedy such Default and
specifically perform its duties and obligations under this Agreement in
accordance with the terms and conditions hereof, and (ii) exercise such other
rights and remedies as it may have in equity or at law.
ARTICLE 12
TERMINATION OF SERVICE
12.1 Expiration of Term. Except as otherwise specified in this Article 12, this
Agreement may only be terminated at the conclusion of the Term of this Agreement
stated in Article 2 hereof.
12.2 Termination Upon Default. Subject to the limitations set forth in Section
12.3, in the event of Default by DMG, Illinois Power may only terminate this
Agreement upon the later of:
12.2.1 Its giving of written notice of termination to DMG and any
affected regulatory agency;
12.2.2 The filing at FERC of a notice of termination for the Agreement,
which filing must be accepted by FERC; or
12.2.3 The receipt of any other regulatory approvals required for the
termination of the Agreement.
12.3 Dispute As To Default. If a Party disputes that it is in Default, no
termination of this Agreement may occur absent final resolution of such dispute
pursuant to Article 16 and upon the satisfaction of all the conditions stated
above in Section 12.2.
12.4 Survival of Rights. Termination of this Agreement shall not relieve either
Party of any of its liabilities and obligations arising hereunder prior to the
date such termination becomes effective. Any provision of this Agreement that by
its terms survives termination of this Agreement shall survive such termination.
ARTICLE 13
LABOR RELATIONS
---------------
Each Party shall promptly notify the other Party, orally and then in
writing, of any labor dispute or anticipated labor dispute of which its
management has actual knowledge that might reasonably be expected to affect the
operations of the other Party with respect to this Agreement.
ARTICLE 14
CONFIDENTIALITY
---------------
14.1 General. Except as otherwise provided in this Section, each Party shall
hold in confidence and shall not disclose to any person Confidential
Information, regardless of whether such Confidential Information was conveyed to
the Party prior, or subsequent, to the execution of this Agreement.
14.2 Scope. Confidential Information shall not include information that the
receiving Party can demonstrate: (1) is generally available to the public other
than as a result of a disclosure by the receiving Party; (2) was in the lawful
possession of the receiving Party on a non-confidential basis before receiving
it from the disclosing Party; (3) was supplied to the receiving Party without
restriction by a third Party, who, to the knowledge of the receiving Party,
after due inquiry, was under no obligation to the other Party to keep such
information confidential; (4) was independently developed by the receiving Party
without reference to Confidential Information of the disclosing Party; or (5)
was disclosed with the prior written approval of the disclosing Party.
14.3 Release of Confidential Information. Neither Party shall release or
disclose any Confidential Information of the other Party: (1) to any persons
other than its employees, agents, representatives, RTO, other Transmission
Providers, MAIN, or NERC (each, a "Permitted Recipient"); provided that: (1) any
such disclosure to a Permitted Recipient will be only on a need-to-know basis in
connection with this Agreement, and (2) such Permitted Recipient has first been
advised of the confidentiality provisions of this Article 14 and has agreed to
comply with such provisions, is bound by another confidentiality agreement
acceptable to the Parties in their reasonable discretion, or by FERC Standards
of Conduct regarding disclosure of information; or (2) as specifically provided
in Section 14.7 below.
14.4 Rights. Each Party retains all rights, title and interest in the
Confidential Information that each Party discloses to the other Party. The
disclosure by each Party to the other Party of Confidential Information shall
not be deemed a waiver by either Party or any other person or entity of the
right to protect the Confidential Information from public disclosure.
14.5 No Warranties. By providing Confidential Information, neither Party makes
any warranties or representations as to its accuracy or completeness; provided,
however that the Party receiving such Confidential Information shall be entitled
to rely on such Confidential Information for the purposes of its performance of
this Agreement. In addition, by supplying Confidential Information, neither
Party obligates itself to provide any particular information or Confidential
Information to the other Party nor to enter into any further agreements or
proceed with any other relationship or joint venture.
14.6 Standard of Care. Each Party shall use at least the same standard of care
to protect Confidential Information it receives as that it uses to protect its
own Confidential Information from unauthorized disclosure, publication or
dissemination. Each Party may use Confidential Information solely to fulfill its
obligations under this Agreement and not for any other purpose.
14.7 Order of Disclosure. If a Party is legally required to disclose
Confidential Information of the other Party by law, rule, regulation, order or
other governmental action, or action of any entity with the right, power, and
authority to do so, including but not limited to subpoena, oral deposition,
interrogatories, requests for production of documents, or administrative order,
that Party shall provide the other Party with prompt notice of such request(s)
or requirement(s) so that the other Party may seek an appropriate protective
order or waive compliance with the terms of this Agreement. In the absence of a
protective order or waiver, the disclosing Party shall disclose such
Confidential Information which in the opinion of its counsel the Party is
legally required to disclose. Each Party will use reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded any Confidential
Information so furnished.
14.8 Termination of Agreement. Upon termination of this Agreement for any
reason, each Party shall, within thirty (30) days of receipt of a written
request from the other Party, destroy, erase or delete (with such destruction,
erasure and deletion certified in writing to the other Party) or return to the
other Party, without retaining copies thereof, any and all written or tangible
Confidential Information received from or on behalf of the other Party.
14.9 Remedies. The Parties agree that monetary damages would be inadequate to
compensate a Party for the other Party's breach of its obligations under this
Article 14. Each Party accordingly agrees that the other Party shall be entitled
to equitable relief, by way of injunction or otherwise, for any breach or
threatened breach of the obligations of confidentiality imposed by this
Article 14, which equitable relief shall be granted without bond or proof of
damages, and the receiving Party shall not plead in defense that there would be
an adequate remedy at law. Such remedy shall not be deemed to be an exclusive
remedy for the breach of this Article 14, but shall be in addition to all other
remedies available at law or in equity. The Parties further acknowledge and
agree that the covenants contained herein are necessary for the protection of
legitimate business interests and are reasonable in scope. No Party, however,
shall be liable for indirect, incidental or consequential or punitive damages of
any nature or kind resulting from or arising in connection with this Article 14,
unless disclosed through a Party's gross negligence or willful, wanton or
purposeful conduct.
14.10 Press Releases. Each Party agrees to coordinate with the other Party all
press, news, or other releases to the media related to this Agreement and to
allow the other Party to review such releases prior to release.
ARTICLE 15
AUDIT RIGHTS
------------
Subject to the requirements of confidentiality under Article 14 of this
Agreement, either Party shall have the right, during normal business hours, and
upon prior reasonable notice to the other Party to audit each other's accounts
and records pertaining to either Party's performance and/or satisfaction of
obligations arising under this Agreement within two (2) years from the date of
such performance or satisfaction of such obligation. Said audit shall be
performed at the offices where such accounts and records are maintained and
shall be limited to those portions of such accounts and records that relate to
obligations under this Agreement.
ARTICLE 16
DISPUTES
16.1 Submission. Any claim or dispute which either Party may have against the
other arising out of the Agreement shall be submitted in writing to the other
Party within sixty (60) days after the claim or dispute initially arises. In the
event of a dispute over payment, the Parties shall first utilize the dispute
resolution provisions of Section 6.4 before utilizing the provisions of this
Article 16. The submission of any claim or dispute under this Section 16.1 shall
include a concise statement of the question or issue in dispute, together with
relevant facts and documentation to fully support the claim.
16.2 Alternative Dispute Resolution. If any such claim or dispute arises, the
Parties shall use their best efforts to resolve the claim or dispute, initially
through good faith negotiations or upon the failure of such negotiations,
through mutually agreed to ADR techniques; however, either Party may terminate
its participation in ADR during any stage of ADR and proceed under Section 16.3.
16.3 Arbitration. If any claim or dispute arising hereunder is not resolved
within sixty (60) days after notice thereof to the other Party, either Party may
demand in writing the submission of the dispute to binding arbitration in
Chicago, Illinois, or some other mutually agreed upon location and shall be
heard by one neutral arbitrator under the American Arbitration Association's
Commercial Arbitration Rules.
16.4 Time Limitation. Unless the Parties otherwise agree, the arbitration
process shall be concluded not later than six (6) months after the date that it
is initiated and the award of the arbitrator shall be accompanied by a reasoned
opinion if requested by either Party. The arbitrator shall have no authority to
award punitive or treble damages or any damages inconsistent with the provisions
of this Agreement. The arbitration shall be conducted as a common law
arbitration and the decision of the arbitrator rendered in such a proceeding
shall be final. Judgment may be entered upon it in any court having
jurisdiction.
16.5 Procedures. The procedures for the resolution of disputes set forth herein
shall be the sole and exclusive procedures for the resolution of disputes;
provided, however, that a Party may seek a preliminary injunction or other
preliminary judicial relief if in its judgment such action is necessary to avoid
irreparable damage or to preserve the status quo. Despite such action, the
Parties will continue to participate in good faith in the procedures specified
herein. All applicable statutes of limitations and defenses based upon the
passage of time shall be tolled while the procedures specified herein are
pending. The Parties will take any action, if any, required to effectuate such
tolling. Each Party is required to continue to perform its undisputed
obligations under this Agreement pending final resolution of a dispute. All
negotiations pursuant to these procedures for the resolution of disputes will be
confidential, and shall be treated as compromise and settlement negotiations for
purposes of the Federal Rules of Evidence and state rules of evidence.
ARTICLE 17
NOTICES AND COMMUNICATIONS
--------------------------
17.1 Notices. All notices required or permitted under this Agreement shall be in
writing unless otherwise specified in this Agreement and shall be personally
delivered or sent by certified or registered first class mail with postage
prepaid, facsimile transmission, or overnight express mail or courier service
addressed as follows:
To DMG: To Illinois Power:
Notices Notices
------- -------
Dynegy Midwest Generation, Inc. Illinois Power Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Att: Senior Vice President Att:
---------------------------------
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
Illinois Power Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Att: Transmission Operator
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
All such notices shall be deemed given upon receipt by the addressee.
17.2 Change of Address. Either Party may change its address and telephone
numbers for notices by notice to the other in the manner provided above.
17.3 Oral Notice. Notwithstanding Section 17.1, any notice hereunder, with
respect to an Emergency or other occurrence requiring prompt attention of the
Party receiving such notice, or as necessary during day-to-day operations, may
be made orally provided that such notice is confirmed in writing promptly
thereafter. Notice in an Emergency, or as necessary during day-to-day
operations, shall be provided, (i) if by Illinois Power, to a shift leader in
the control room at the appropriate Facility and (ii) if by a Facility, to the
Transmission Operator.
ARTICLE 18
MISCELLANEOUS PROVISIONS
------------------------
18.1 Compliance With Law. This Agreement and all rights and obligations of the
Parties hereunder are subject to all applicable state and federal laws and all
applicable duly promulgated orders and regulations and duly authorized actions
taken by the executive, legislative or judicial branches of government, or any
of their respective agencies, departments, authorities or other
instrumentalities having jurisdiction and in performing its obligations under
this Agreement each Party shall comply with all such laws, orders and
regulations.
18.2 Federal Power Act Rights Preserved. Nothing contained in this Agreement
shall be construed as affecting in any way the ability of any Party to this
Agreement to exercise its rights under the Federal Power Act and pursuant to
FERC's rules and regulations promulgated thereunder, including but not limited
to, each Party's unilateral right to make application to FERC for a change in
the rates, terms and/or conditions of this Agreement; provided, however, that
the "public interest" standard of review set forth in United Gas Pipe Line Co.
v. Mobile Gas Service Corp., ▇▇▇ ▇.▇. ▇▇▇ (1956), and Federal Power Commission
v. Sierra Pacific Power Co., 350 U.S. 348 (1956) (the "Mobile-Sierra" doctrine),
shall not be applicable to either Party's application to FERC for a change in
the rates, terms and/or conditions of this Agreement.
18.3 Taxes. Each Party agrees to pay any and all local, state, federal sales,
use, excise or any other taxes which are now, or in the future may be, assessed
and legally owed by such Party pertaining to goods provided and/or the services
performed under this Agreement. Each Party shall be responsible for any income
taxes that apply to the monies it receives hereunder.
18.4 Relationship of the Parties. Nothing in this Agreement is intended to
create a partnership, joint venture or other joint legal entity making any Party
jointly or severally liable for the acts of the other Party. Unless otherwise
agreed to in a writing signed by both Parties, neither Party shall have any
authority to create or assume in the other Party's name or on its behalf any
obligation, express or implied or to act or purport to act as the other Party's
agent or legal empowered representative for any purpose whatsoever. Each Party
shall be solely liable for the payment of all wages, taxes, and other costs
related to the employment of persons by that Party, including all federal,
state, and local income, social security, payroll and employment taxes and
statutorily-mandated workers' compensation coverage. Except as expressly
provided for herein, neither Party shall be liable to any third party in any way
for any engagement, obligation, commitment, contract, representation or for any
negligent act or omission to act of the other Party.
18.5 No Third Party Rights. No person or Party shall have any rights or
interests, direct or indirect, in this Agreement or the services or facilities
to be provided hereunder, or both, except the Parties, their successors, and
authorized assigns. The Parties specifically disclaim any intent to create any
rights in any person or Party as a third-party beneficiary to this Agreement or
to the services or facilities to be provided hereunder, or both.
18.6 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.
IN WITNESS WHEREOF, the Parties' duly authorized representatives have
executed this Agreement as of the Effective Date.
DYNEGY MIDWEST GENERATION, INC. ILLINOIS POWER COMPANY
By: By:
------------------------------ -------------------------------
Name: Name:
------------------------------ -------------------------------
Title: Title:
------------------------------ -------------------------------
SCHEDULE A
to
Black Start Service Agreement
between
Illinois Power Company and Dynegy Midwest Generation, Inc
Dated __________________, 2004
--------------- --------------------------------- ------------------------- ------------------------------------------------------
UNIT DESIGNATED TRANSMISSION PATH DESIGNATED GENERATION START TIME
RESOURCE(S)
--------------- --------------------------------- ------------------------- -------------------------- --------------------------
▇▇▇▇▇▇▇ 1 138 kV Line 1516 Hennepin 1 90 Minutes - Manned Start Time when ▇▇▇▇▇▇▇ 1
120 Minutes - Unmanned is first Unit started
--------------- --------------------------------- ------------------------ ------------------------- --------------------------
▇▇▇▇▇▇▇ 2 138 kV Line 1516 Hennepin 1 120 Minutes - Manned Start Time when ▇▇▇▇▇▇▇ 1
150 Minutes - Unmanned is running and ▇▇▇▇▇▇▇ 2
is second Unit started
--------------- --------------------------------- ------------------------ ------------------------- --------------------------
▇▇▇▇▇▇▇ 3 138 kV Line 1516 Hennepin 1 150 Minutes - Manned Start Time when ▇▇▇▇▇▇▇ 1
180 Minutes - Unmanned and 2 are running and
▇▇▇▇▇▇▇ 3 is third Unit
started
--------------- --------------------------------- ------------------------ ------------------------- --------------------------
▇▇▇▇▇▇▇ 4 138 kV Line 1516 Hennepin 1 180 Minutes - Manned Start Time when ▇▇▇▇▇▇▇
210 Minutes - Unmanned 1, 2 and 3 are running
and ▇▇▇▇▇▇▇ 4 is fourth
Unit started
--------------- --------------------------------- ------------------------ ------------------------- --------------------------
▇▇▇▇▇▇▇▇▇ 1 138 kV Line 1456 Wood River 1-4 90 Minutes - Manned
120 Minutes - Unmanned
--------------- --------------------------------- ------------------------ ------------------------- --------------------------
▇▇▇▇▇▇▇▇▇ 2 138 kV Line 1456 Wood River 1-4 90 Minutes - Manned
120 Minutes - Unmanned -
Unmanned
--------------- --------------------------------- ------------------------ ------------------------- --------------------------
▇▇▇▇▇▇▇▇▇ 3 138 kV Line 1456 Wood River 1-4 90 Minutes - Manned
120 Minutes - Unmanned
--------------- --------------------------------- ------------------------ ------------------------- --------------------------
▇▇▇▇▇▇▇▇▇ 4 138 kV Line 1456 Wood River 1-4 90 Minutes - Manned
120 Minutes - Unmanned
--------------- --------------------------------- ------------------------ ------------------------- --------------------------
--------------- --------------------------------- ------------------------- ------------------------------------------------------
UNIT DESIGNATED TRANSMISSION PATH DESIGNATED GENERATION START TIME
RESOURCE(S)
--------------- --------------------------------- ------------------------- -------------------------- --------------------------
--------------- --------------------------------- ------------------------ ------------------------- --------------------------
▇▇▇▇▇▇ 1 138 kV Line 1572 ▇▇▇▇▇▇▇▇▇▇ 1-2 90 Minutes - Manned Start Time when ▇▇▇▇▇▇ 1
180 Minutes - Unmanned is first Unit started
--------------- --------------------------------- ------------------------ ------------------------- --------------------------
▇▇▇▇▇▇ 2 138 kV Line 1572 ▇▇▇▇▇▇▇▇▇▇ 1-2 120 Minutes - Manned Start Time when ▇▇▇▇▇▇ 1
150 Minutes - Unmanned is running and ▇▇▇▇▇▇ 2
is second Unit started
--------------- --------------------------------- ------------------------ ------------------------- --------------------------
▇▇▇▇▇▇ 3 138 kV Line 1572 ▇▇▇▇▇▇▇▇▇▇ 1-2 90 Minutes - Manned Start Time when ▇▇▇▇▇▇ 3
180 Minutes - Unmanned is first Unit started
--------------- --------------------------------- ------------------------ ------------------------- --------------------------
▇▇▇▇▇▇ 4 138 kV Line 1572 ▇▇▇▇▇▇▇▇▇▇ 1-2 120 Minutes - Manned Start Time when ▇▇▇▇▇▇ 3
150 Minutes - Unmanned is running and ▇▇▇▇▇▇ 4
is second Unit started
--------------- --------------------------------- ------------------------ ------------------------- --------------------------
▇▇▇▇▇▇▇▇▇▇ 3 Local Bus ▇▇▇▇▇▇▇▇▇▇ 1-2 90 Minutes
--------------- --------------------------------- ------------------------ ------------------------- --------------------------
SCHEDULE B
to
Black Start Service Agreement
between
Illinois Power Company and Dynegy Midwest Generation, Inc
Dated __________________________, 2004
Compensation
------------
1. Compensation to be paid by Illinois Power to DMG under Article 6 of the
Agreement shall be calculated pursuant to the following formula:
Compensation = ({[(Fixed Black Start Costs)/12] + [(Variable Black Start
Costs)/12] + [(Training Costs)/12] + [(Fuel Storage &
Carrying Costs)/12] + (Energy Costs)} x [1+ Incentive Factor])
2. The Fixed Black Start Costs shall be calculated as follows:
Fixed Black Start Costs = CDR x 365 x Unit Cap x BSAF
where:
CDR is the Capacity Deficiency Rate applicable in the PJM Interconnection,
L.L.C. market for the year in question (i.e., the annualized per MW capital
cost component of new combustion turbine).
Unit Cap is the generating units installed capacity.
BSAF is the black start allocation factor, which varies by unit type. The
following values shall be used for the BSAF:
hydro: 0.01
diesel generator: 0.02
CT: 0.02
3. Variable Black Start Costs shall be calculated as follows:
Variable Black Start Costs = (Unit O&M x Y)
where:
Y is the variable O&M factor.
Y = 1% (.01) unless another value is supported by the documentation of
costs
4. Training Costs shall be calculated as follows:
Training Costs = [(50 staff-hours/year x 3 blackstart training
locations x $75/hour)/12]
If DMG proposes the use of other variables, the basis for the variables
proposed for use for a specific Unit must be documented.
5. Fuel Storage & Carrying Costs shall be calculated as follows:
FS&C Costs = (Run Hours) x (Fuel Burn Rate) x (12 Month Forward Strip +
Basis) x (Interest Rate/12)
where:
Run Hours are actual run hours required for Unit to run; provided, however,
Run Hours shall not be less than 16 hours unless mutually agree by Illinois
Power/RTO and DMG
Fuel burn rate is actual Unit fuel burn rate.
12 Month Forward Strip is the average of the forward prices for the actual
fuel burned in the Unit.
Basis is the transportation costs from the location referenced in the
forward price data to the Unit plus any variable taxes.
Interest Rate will be a representative annual interest rate.
If DMG proposes the use of other variables, the basis for the variables
proposed for use for a specific Unit must be documented.
Note: This component applies only to oil-fired units as it is assumed that
there is an inherent reserve available for hydro and gas units and
that there would be no additional fuel storage or carrying charges
necessary to maintain black start capability.]
6. Energy Costs shall be calculated as follows:
Energy Costs = (Run Hours) x (Energy Cost)
where:
Run Hours is the greater of 16 hours or the actual run hours of the Unit
from start until restoration of the Illinois Power T&D System to normal
operation.
Energy Cost is the price reported in as the "ComEd, into" price in Megawatt
Daily under the "Day-ahead markets " column for the day and hour (On-Peak
or Off-Peak) in question.
7. Incentive Factor
An incentive factor, Z, is applied to the cost values to incentivize DMG to
provide Black Start Service.
Z = 10%
where:
Z is an incentive factor initially set to the above level and which will be
periodically reviewed by Illinois Power and DMG, but all revisions must be
mutually agreed. The defined black start costs are multiplied by the
incentive factor to determine the incentive.
EXHIBIT 6
Exhibit I - Form of Interim PPA Rider
Dynegy Midwest Generation, Inc. Original Sheet No. 1
Rate Schedule FERC No. __
INTERIM PPA RIDER THIS INTERIM PPA RIDER (this "Agreement"), dated as of
_______________, 2004, between ILLINOIS POWER COMPANY, an Illinois corporation
("IP"), and DYNEGY MIDWEST GENERATION, INC., an Illinois corporation ("DMG");
(IP and DMG are sometimes referred to herein individually as a "Party" and
collectively as "Parties");
WITNESSETH:
WHEREAS, IP and DMG's predecessor in interest, Illinova Power Marketing,
Inc. ("WESCO"), are parties to that certain Power Purchase Agreement dated
October 1, 1999, pursuant to which DMG sells capacity and energy to IP (the
"PPA");
WHEREAS, IP and DMG are parties to that certain Negotiated Tier 1
Memorandum dated May 14, 2000, pursuant to which DMG sells capacity and energy
to IP;
WHEREAS, IP and DMG are parties to that certain Negotiated Tier 2
Memorandum 2003-1 dated May 27, 2003, pursuant to which DMG sells energy to IP;
WHEREAS, Ameren Corporation, Illinova Corporation, Illinova Generating
Company, and Dynegy Inc. are parties to that certain Stock Purchase Agreement
dated February 2, 2004, pursuant to which Ameren Corporation will acquire all of
the common and preferred stock of IP owned by Illinova Corporation (the "IP
Sale"); and
WHEREAS, between the time of closing of the IP Sale and January 1, 2005,
the Parties desire that DMG dispatch its electric generating units, rather than
permitting IP to dispatch such units, except during situations necessitating
reliability dispatch;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, the Parties agree as follows:
1. Effective upon the closing of the IP Sale and continuing through
December 31, 2004:
(A) Section 7 of the PPA shall be amended to read, in its entirety, as
follows:
7. Capacity and Energy Scheduling and Dispatch
-------------------------------------------
(a) Scheduling of IP Load
---------------------
IP shall provide to WESCO hourly schedules of Scheduled IP Load for
each Day by 8:00 A.M. Central Prevailing Time of the immediately preceding
Day. IP shall be entitled to revise a previously submitted schedule for any
hour by notice given to WESCO no later than 45 minutes prior to the start
of such hour. The Scheduled IP Load in effect for an hour as of 44 minutes
and 59 seconds prior to the start of such hour shall be the Final Scheduled
IP Load for such hour. In the event IP fails to provide WESCO an hourly
schedule by the required time, the forecasted IP Load specified for the
applicable Day in the most recent rolling 10-Day Forecast, pursuant to
Section 7(g), shall be deemed to be the hourly schedule of Scheduled IP
Load for such Day.
(b) WESCO Daily Capacity Schedule
-----------------------------
For each Day, WESCO shall provide to IP, by 11:00 A.M. Central
Prevailing Time of the immediately preceding Day, a Daily Capacity
Schedule, setting forth the Units and other electric capacity resources
available to WESCO that will be available on such Day to serve IP Load. The
Daily Capacity Schedule shall state any Operating Limits on the capacity or
availability of a Unit below its Net Dependable Capacity set forth on
Appendix 1, and any limits on the availability of any other electric
capacity resource included on such Daily Capacity Schedule. Such Daily
Capacity Schedule shall designate, in the aggregate, available electric
capacity which shall equal or exceed the sum of (i) Adjusted Tier 1
Capacity plus (ii) Negotiated Tier 2 Capacity, if any, for such Day.
(c) Removal or Reduction of Capacity Designated in Daily Capacity
-------------------------------------------------------------
Schedule
--------
Issued by: [tbd] Effective: Date of Closing of Ameren Corporation
Issued on: February 27, 2004 Acquisition of Illinois Power Company
Dynegy Midwest Generation, Inc. Original Sheet No. 2
Rate Schedule FERC No. __
WESCO shall inform IP as soon as possible of any Operating Limits or
other occurrences which require that a Unit or other electric capacity
resource available to WESCO be removed from service or limited in its
availability or capacity below the level designated on the Daily Capacity
Schedule. Subject to the provisions of Section 7(e), WESCO shall have sole
authority to determine whether and to what extent a Unit or other electric
capacity resource available to WESCO is available to serve IP Load and to
impose Operating Limits on the availability or operation of any Unit. In
the event the imposition of any such Operating Limit, or any other
occurrence, causes the actual aggregate available electric capacity of the
Units and other electric capacity resources otherwise designated as being
available on the Daily Capacity Schedule to fall below the sum of the (i)
Adjusted Tier 1 Capacity plus (ii) Negotiated Tier 2 Capacity, if any,
WESCO shall immediately designate to IP sufficient additional electric
capacity resources to eliminate such Capacity Deficiency. IP shall take
reasonable actions, consistent with Good Utility Practice, to maintain the
balance of electric supply and electric load on the IP System and in the IP
Control Area, including but not limited to obtaining replacement or
additional capacity and energy to replace all or a part of any electric
capacity resource designated by WESCO on a Daily Capacity Schedule that has
become unavailable or limited in its availability or capacity in any case
in which WESCO fails to immediately designate sufficient additional
generation resources to eliminate a Capacity Deficiency. WESCO shall
reimburse IP for all costs incurred by IP in obtaining any replacement
capacity or energy in accordance with this Section.
(d) Dispatch to Serve IP Load
-------------------------
Except as provided in Section 7(e), WESCO shall control the level of
generation of the Units based on information provided by IP for purposes of
ensuring reliability and balance of aggregate load and generation within
the IP System and the IP Control Area, subject to any hourly or annual
limits on WESCO's obligation to supply capacity and energy pursuant to this
Agreement. WESCO shall Dispatch the Units in the manner required to support
compliance with applicable requirements and guidelines of NERC, MAIN, any
other regional reliability council of which the IP System or IP Control
Area is a member, and the Independent System operator, and, subject to the
foregoing requirements. WESCO shall Dispatch the Units: (i) in accordance
with principles of economic dispatch, and (ii) subject to (a) the Design
Limits set forth in Appendix 3, (b) any Operating Limits, and (c) any other
limits imposed by WESCO in accordance with Sections 7(b) or 7(c).
(e) Reliability Dispatch
--------------------
IP shall be authorized to direct WESCO (i) to Dispatch any Unit listed
on the Daily Capacity Schedule out of economic order up to the limit of its
available capacity, and (ii) to direct WESCO to delay the start of a
Planned Outage for a Unit set forth in a Planned Outage Schedule previously
established by the Parties in accordance with Section 12(a) and to Dispatch
such Unit, if and to the extent either such Dispatch is necessary in the
sole judgment of IP to maintain the integrity of the IP System, or to
fulfill a requirement of the Open Access Transmission Tariff or other
applicable tariff, or a requirement or directive of NERC, MAIN, any other
regional reliability council of which the IP System or IP Control Area is a
member, or the Independent System Operator, notwithstanding that such
Dispatch may be contrary to principles of economic dispatch or to a
previously-established Planned Outage Schedule; provided, that in no case
Issued by: [tbd] Effective: Date of Closing of Ameren Corporation
Issued on: February 27, 2004 Acquisition of Illinois Power Company
Dynegy Midwest Generation, Inc. Original Sheet No. 3
Rate Schedule FERC No. __
shall WESCO be required to operate any Unit in a manner which exceeds the
Design Limits, the Operating Limits, or any other limits imposed by WESCO
in accordance with Sections 7(b) or 7(c), or which, in WESCO's judgment,
jeopardizes the safety of personnel or the integrity of the Unit. WESCO
shall be entitled to Reliability Compensation in accordance with Section
15(d) for Reliability Dispatch Energy. Redispatch of a Unit to provide
reactive power support, including emergency redispatch or non-emergency
redispatch, is covered in and subject to the Second Revised Interconnection
Agreement, dated as of January 9, 2004, between IP and Dynegy Midwest
Generation, Inc., as may be amended from time to time.
(f) Dispatch Protocols
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IP and WESCO shall develop and implement such protocols and procedures
for communication of information and other operational matters as may be
needed from time to time to facilitate the Dispatch of the Units as
provided herein.
(g) Rolling 10-Day Forecast
-----------------------
By 8:00 A.M. Central Prevailing Time each Day, IP shall submit to
WESCO a non-binding 10-day forecast of the hourly IP Load to be provided by
WESCO under this Agreement
(B) The definition of "Daily Sales Schedule" as set forth in
Subsection 1(a) of the PPA shall be deleted, and the following definitions set
forth therein shall be amended to read, in their entirety, as follows:
"Capacity Deficiency" means a condition or circumstance in which the
actual aggregate available electric capacity of the Units, within and
subject to the Design Limits and any Operating Limits imposed on a Unit by
WESCO, within any limitations otherwise agreed to by IP in this Agreement,
and consistent with Good Utility Practice, and the other electric capacity
resources otherwise designated by WESCO as being available on the Daily
Capacity Schedule is less than the sum of (i) Adjusted Tier 1 Capacity plus
(ii) Negotiated Tier 2 Capacity.
"Daily Capacity Schedule" means a schedule provided by WESCO to IP for
each Day, in accordance with Section 7(b), which sets forth the available
capacity of the Units, within and subject to the Design Limits, within any
Operating Limits imposed on a Unit by WESCO, within any limitations
otherwise agreed to by IP in this Agreement, and consistent with Good
Utility Practice, and other electric capacity resources available to WESCO
to serve IP Load for such Day.
"Dispatch" means WESCO's or IP's, as applicable, right and obligation
to control the generating level of each Unit, and of the Units as a group,
within and subject to the Design Limits, to any Operating Limits imposed on
a Unit by WESCO, within any limitations otherwise agreed to by IP in this
Agreement, and consistent with Good Utility Practice, as provided in this
Agreement.
2. Section 7 and the definitions of Capacity Deficiency, Daily Capacity
Schedule, Dispatch in Section 1(a) of the PPA are the only sections of the
PPA amended by this Agreement, and all other sections of the PPA shall
remain in full force an effect, in accordance with the terms of the PPA.
IN WITNESS WHEREOF the Parties hereto, by their duly authorized
representatives, have signed this Agreement as of this ___ day of __________,
2004.
ILLINOIS POWER COMPANY DYNEGY MIDWEST GENERATION, INC.
Issued by: [tbd] Effective: Date of Closing of Ameren Corporation
Issued on: February 27, 2004 Acquisition of Illinois Power Company
Dynegy Midwest Generation, Inc. Original Sheet No. 4
Rate Schedule FERC No. __
By:__________________________________ By:___________________________________
Name:________________________________ Name: ________________________________
Title:_______________________________ Title:________________________________
Issued by: [tbd] Effective: Date of Closing of Ameren Corporation
Issued on: February 27, 2004 Acquisition of Illinois Power Company