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EXHIBIT 10.10
POWER ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇ ENRICHMENT CORPORATION
THIS CONTRACT, made and entered into as of October 12, 1995,
between TENNESSEE VALLEY AUTHORITY (TVA), a corporation created and existing by
virtue of the Tennessee Valley Authority Act of 1933, as amended, and UNITED
STATES ENRICHMENT CORPORATION (USEC), a corporation created and existing by
virtue of the Energy Policy Act of 1992;
W I T N E S S E T H:
WHEREAS, USEC has been purchasing power from TVA under Power
Contract DE-AC05-760R03761, TV-30614A, dated December 1, 1967, as amended (1967
Contract), providing for a portion of the supply of electric power for the
operation of facilities in the Paducah Area (Paducah Project) leased by USEC
from the United States Department of Energy (DOE); and
WHEREAS, the parties wish to replace the 1967 Contract with a new
contract under which TVA will continue to make non-firm power (NFP) available to
USEC;
NOW, THEREFORE, for and in consideration of the premises and of
the mutual agreements hereinafter set forth, the parties mutually agree as
follows:
SECTION 1 - AVAILABILITY OF POWER
1.1 NFP. Subject to the other provisions of this contract, TVA shall
make available and USEC may schedule NFP in such amounts as USEC
requests and TVA, in its sole judgment, is able to supply.
1.2 NFP Attachment. Various additional provisions governing the supply
of NFP to USEC are set out in the attachment entitled "NFP Attachment,"
which is a
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part of this contract. As used in the NFP Attachment, "Company" shall be
deemed to refer to USEC.
SECTION 2 - TERM OF CONTRACT
This contract shall become effective as of 0000 hours CST on January 1,
1996 and shall continue in effect through the meter reading time for the
month of December 2005, unless sooner terminated by either party upon at
least 90 days' written notice.
SECTION 3 - CONDITIONS OF DELIVERY
3.1 Delivery Point. The delivery point for power and energy made
available under this contract shall be the interconnection of TVA's
161-kV facilities and the 161-kV facilities leased by USEC in DOE's
161-kV substations, except as otherwise agreed from time to time. Each
party will be responsible for providing, or causing to be provided, at
its own expense all facilities on its side of the delivery point, except
as otherwise agreed.
3.2 Delivery Voltage. The power made available under this contract shall
be delivered at a nominal voltage of 161,000 volts, subject to the
provisions of section 1 of the attached Terms and Conditions. However,
in lieu of the 7 percent voltage variation tolerance provided for in
said section 1, except for temporary periods of abnormal operating
conditions, voltage variations on the C-31 bus shall be within 5 percent
of 161,000 volts and voltages at the C-33 bus and the C-37 bus shall be
within 5 percent of mutually agreed voltages.
3.3 Metering. TVA shall, at its expense, own and maintain metering
equipment to measure the power and flow of energy between TVA and USEC
as provided in section 3 of the attached Terms and Conditions. In
addition, USEC shall (1) own (or lease) and maintain (or cause to be
maintained) the necessary metering current and voltage transformers with
conduit, secondary wiring, and auxiliary devices; (2) own (or lease) and
maintain (or cause to be maintained) the metering panels and furnish
suitable space thereon for TVA's equipment; and (3) make available to
TVA
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certified copies of calibration and test data on each instrument
transformer.
3.4 Interconnections and Load Coordination. It is recognized that in
addition to TVA, Electric Energy, Inc. (EEInc.), provides power for the
Paducah Project. The 161-kV facilities through which USEC takes delivery
of power and energy for that project are electrically connected to TVA's
and EEInc.'s 161-kV transmission facilities through DOE's buses and
operated in parallel. It is also recognized that TVA's obligation in
this respect shall be contingent upon (1) USEC's providing or causing to
be provided, without expense to TVA, any special facilities which in
TVA's judgment, and consistent with good utility practice, are necessary
to permit efficient parallel operation and which TVA would not otherwise
be justified in providing and (2) the existence of adequate contractual
arrangements, mutually satisfactory to the parties and EEInc., for such
parallel operation, including, without limitation, procedures for TVA
and EEInc. to account and settle for any differences (resulting from
scheduled transfers between them, from the physical characteristics of
interconnected operations, or otherwise) between the amounts of power,
energy, and reactive power physically delivered to USEC over TVA's own
facilities and the amounts scheduled by USEC in accordance with this
contract.
It is further recognized that in accordance with the contractual
arrangement between TVA and EEInc., TVA and EEInc. will regulate their
hourly pro rata portion of USEC's total load. Under this contract, USEC
will schedule NFP from TVA and, regardless of anything which may be
construed to the contrary, TVA's obligation to supply the USEC load in
any clock hour will be limited to the amount of NFP scheduled for that
hour. It is further recognized that in the event TVA reduces a schedule
for NFP, during the period of that reduction, TVA's obligation regarding
power supply to the USEC load shall be limited to that portion of the
NFP schedule not reduced. Similarly, if a schedule for NFP is
discontinued by TVA, TVA has no obligation regarding power supply to the
USEC load from TVA's system during any such period of discontinuance.
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SECTION 4 - MONTHLY PAYMENT OF CHARGES
In accordance with the provisions of section 2 of the attached Terms and
Conditions, Company shall pay TVA monthly for NFP scheduled under this
contract (as such schedules may be modified, reduced, or discontinued in
accordance with the provisions of this contract).
SECTION 5 - NOTICES
5.1 Persons to Receive Notice. Any notice required by this contract
shall be deemed properly given if mailed, postage prepaid, to the Power
Manager, USEC, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ on behalf of
USEC; or to the Manager of Industrial Marketing, Tennessee Valley
Authority, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, on behalf of TVA.
5.2 Certain Notices May Be Oral. Notices between the authorized
operating representatives of the parties may be oral, except for notice
of termination under section 2 of this contract which must be in
writing. Notices that may be oral shall be confirmed in writing.
5.3 Changes in Persons to Receive Notice. The designation of the person
to be so notified, or the address of such person, may be changed at any
time and from time to time by any party by similar notice.
SECTION 6 - MUTUAL LIABILITY
USEC and TVA each agree to indemnify the other against and save the
other harmless from any and al claims by or liability to any other
person arising out of the negligence of the indemnifying party or its
agents or contractors.
SECTION 7 - OPERATION OF DOE'S FACILITIES LEASED BY USEC
USEC's operation of DOE's 161-kV facilities will be in accordance with
written operating procedures which are mutually satisfactory to TVA and
USEC, and all its circuit breakers, relays, communication and
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telemetering facilities, and related equipment connected directly or
indirectly to TVA's system will at all times be operated and maintained
in coordination with said system. All tests, settings, and adjustments
on such equipment shall be subject to the approval of TVA. TVA shall
have the privilege of having its engineers present when such tests,
adjustments, or settings are made, or TVA, upon the request of USEC and
at the expense of USEC, shall make the necessary tests, adjustments, or
settings.
USEC agrees that TVA shall be permitted to use the DOE 161-kV lines and
buses leased by USEC which interconnect parts of TVA's system, together
with associated facilities, for the purposes of delivering power under
this contract and transferring other power between said parts of TVA's
system.
SECTION 8 - RIGHTS-OF-ACCESS
USEC shall cooperate with TVA in obtaining all easements and rights of
access (at agreed upon locations) in, over, and across DOE property,
including DOE property leased by USEC, which are necessary for TVA to
install, operate, protect, maintain, repair, replace, and remove any of
its facilities constructed for supplying power to the delivery point
provided for under this contract or for transferring power between any
of TVA's facilities and other facilities of TVA or those of other
electric systems. However, USEC reserves the right to refuse access to
restricted process areas and agree to perform at it sown expense any
work which TVA is unable to perform because of lack of such access.
USEC shall exercise reasonable care to avoid damaging TVA facilities and
shall pay the cost of any necessary repairs or replacements in the event
of loss of or damage to such facilities arising from its failure to
exercise such reasonable care. Upon termination of this contract, TVA
may, at its option and expense, remove any of its facilities.
TVA shall exercise reasonable care, in the exercise of its rights under
this section to avoid damaging
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any USEC property (including DOE property leased by USEC) and shall pay
the cost of any necessary repair or replacements in the event of loss of
or damage to any such property arising from its failure to exercise such
reasonable care.
SECTION 9 - TERMS AND CONDITIONS
9.1 Incorporation. The attached Terms and Conditions are a part of this
contract. As used in the Terms and Conditions, "Company" shall be deemed
to refer to USEC.
9.2 Metering. It is recognized that if Company requests additional tests
under the second paragraph of section 3 of the Terms and Conditions, TVA
will bear the expense of those tests if they do not show that the
measurements are accurate within 1 percent fast or slow at the average
load during the preceding 30 days. Further, it is recognized that the
replacement, repair, or readjustment of metering equipment provided for
under the last paragraph of said section 3 shall be at TVA's sole
expense.
9.3 Force Majeure. The force majeure billing relief provisions contained
in subsection 4(c) of the Terms and Conditions shall not be applicable
to NFP. Where Company is unable to utilize the amount of NFP scheduled
because of the occurrence of a "force majeure" as defined in section 4
of the Terms and Conditions, the provisions of section E of the NFP
attachment shall be applicable.
9.4 Resale of Power. Notwithstanding the provisions of section 5 of the
Terms and Conditions, USEC may furnish limited amounts of power to
contractors and subcontractors performing work for USEC and/or DOE at
the Paducah Project; provided, that USEC shall reimburse TVA for the
amounts of any additional payments in lieu of taxes made by TVA under
Section 13 of the TVA Act as amended, by reason of any resale of power
by USEC. Use of power in the operation of production plants and
associated facilities at the Paducah Project by others on behalf of USEC
will not be considered a violation of section 5 of the Terms and
Conditions.
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9.5 Conflicts. In the event of any conflict between the body of this
contract and the Terms and Conditions, the former shall control.
SECTION 10 - PREVIOUS CONTRACT
10.1 Termination. Except to the extent provided in 10.2 below, the 1967
Contract shall terminate effective as of 0000 hours CST on January 1,
1996.
10.2 Scheduled Transactions. Any transactions agreed upon by the parties
under the provisions of Supplement 24 of the 1967 Contract and confirmed
by them in writing prior to January 1, 1996, shall continue in full
force and effect, subject to and in accordance with the provisions of
said Supplement 24 and the other provisions of the 1967 Contract.
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IN WITNESS WHEREOF, the parties hereto have caused this contract
to be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
TENNESSEE VALLEY AUTHORITY
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Senior Vice President
Customer Group
Attest: UNITED STATES ENRICHMENT CORPORATION
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Title: Executive Vice President
Operations
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