Second Restated Partial Requirements Agreement
Exhibit 10.6
Second
Restated Partial
Requirements
Agreement
This SECOND RESTATED
PARTIAL REQUIREMENTS AGREEMENT (this "Agreement"), dated January 1, 2007,
is entered into among Metropolitan Edison Company, a Pennsylvania corporation
("MetEd"), Pennsylvania Electric Company, a Pennsylvania corporation
("Penelec"), on behalf of itself and The Waverly Electric Power and Light
Company, a New York corporation ("Waverly," and together with MetEd and
Penelec, "Buyers"), and FirstEnergy Solutions Corp., an Ohio corporation
(“Seller”), all wholly owned subsidiaries of FirstEnergy Corp., an Ohio
corporation. The Buyers and Seller may individually be referred to as a
“Party” or collectively as “Parties” in this
Agreement.
WHEREAS, Buyers are
electric distribution companies with an obligation to serve retail customers
under New York and Pennsylvania law (hereinafter “Provider of Last Resort
Obligation”);
WHEREAS, Seller is
authorized to sell wholesale capacity, energy, and ancillary services to Buyers
under First Revised Service Agreements Nos. 1 and 2, effective June 1, 2002
("Service Agreements"), pursuant to Seller's FERC Electric Tariff,
Original Volume No. 1, and is authorized under the Service Agreements to require
a "Confirmation Letter" to document transactions thereunder;
WHEREAS, Buyers
currently obtain from Seller some or all of the wholesale capacity and energy
(such resources, the "Resources") necessary to satisfy their retail
Provider of Last Resort Obligation;
WHEREAS, the Parties
previously entered into a Restated Partial Requirements Agreement, dated January
1, 2003, among the Parties (as amended, modified or supplemented prior to the
date hereof, the "Requirements Agreement");
WHEREAS, Buyers wish
to amend the Requirements Agreement to allow them to engage in NUG Sales (as
defined below) and to have Seller provide energy to replace energy sold in NUG
Sales to the extent Buyers need replacement energy to satisfy their Provider of
Last Resort Obligation; and
WHEREAS, the
Requirements Agreement is a "Confirmation Letter" as such term is used in the
Services Agreements, and the Parties desire to amend and restate their
obligations under the Requirements Agreement by entering this Agreement, which
also constitutes a "Confirmation Letter" as such term is used in the Service
Agreements.
NOW
THEREFORE, in consideration of the mutual agreements, covenants and conditions
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
Buyers and Seller hereby agree as follows:
1. Purchase.
Buyers agree to purchase Resources from Seller (such Resources, "Seller
Resources") to satisfy their Provider of Last Resort Obligation to the
extent that Buyers have a need for Resources in excess of Resources otherwise
committed or available to satisfy such obligation (such committed or available
Resources, "Committed Resources"). For purposes of this Agreement,
Committed Resources include, but are not limited to, Resources produced by or
pursuant to non-utility generation under contract to Buyers ("NUG
Generation"), Buyer-owned generating facilities, existing or new purchased
power contracts with persons other than Seller (including capacity, energy and
related services obtained by Seller as agent for Buyers), and distributed
generation.
2. Agency.
Buyers may authorize Seller to act as agent for Buyers in obtaining capacity,
energy and related services on Buyers' behalf when the Parties agree that such
capacity, energy and related services are reasonable and economic. Buyers shall
authorize Seller to act as agent by giving Notice to Seller of such
authorization, including its scope and duration.
3. Sale.
(a) Seller agrees to supply Resources not
to exceed the total Resources required to meet the Buyers’ Provider of Last
Resort Obligation, less any Committed Resources used to satisfy such Provider of
Last Resort Obligation, on the terms and conditions set forth in this Agreement,
and will comply with all requirements of the Federal Energy Regulatory
Commission ("FERC"), the New York Public Service Commission and the
Pennsylvania Public Utility Commission and with the applicable requirements of
PJM Interconnection, LLC ("PJM") in supplying Seller Resources.
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(b) If a
Buyer gives Notice to Seller that the Buyer intends to sell NUG Generation to
third parties other than pursuant to the Buyer's Provider of Last Resort
Obligation (such sales, "NUG Sales") at least 10 business days prior to
the first such NUG Sale and if Seller does not object in writing to such NUG
Sales within 5 business days of receiving the Buyer's Notice, (i) the Buyer may
engage in the NUG Sales described in the Buyer's Notice; and (ii) such NUG Sales
shall be excluded from the calculation of Committed Resources used to satisfy
the Buyer's Provider of Last Resort Obligation, and Seller shall provide
replacement energy required by the Buyer; provided, that Seller shall not
be responsible for supplying capacity or capacity credits to replace any
capacity or capacity credits sold by the Buyer as part of its NUG
Sales.
4. Forecast
of Provider of Last Resort Obligation and Committed Resources. No later than
sixty days prior to the beginning of any calendar year, Buyers shall provide
Seller a forecast (“Annual Forecast”) of the Resources necessary to
satisfy their Provider of Last Resort Obligation, the Seller Resources to be
purchased and their Committed Resources for that calendar year. The Annual
Forecast will be provided in the format and detail agreed upon by the Parties.
Buyers will update the Annual Forecast no less frequently than monthly for known
changes, including but not limited to the changes described in Section
3(b).
5. (a)
Delivery Points. Seller shall inform Buyers telephonically by 8:00 A.M.
East Coast time each day on which Seller Resources are scheduled to be sold to
Buyers within the following twenty-four (24) hour period of the points at which
Seller shall deliver Seller Resources to Buyers (such points, the "Delivery
Points").
(b) Transfer of Title; Transmission and
Scheduling. Title and risk of loss for Seller Resources shall pass to Buyers
at the Delivery Points. Seller shall sell and deliver, or cause to be delivered,
and Buyers shall purchase and receive, or cause to be received, Seller Resources
at the Delivery Points. Seller shall be responsible for any costs or charges
imposed on or associated with Seller Resources or their delivery up to the
Delivery Points, including any costs or charges associated with transmission
service or scheduling services. Buyers shall be responsible for any costs or
charges imposed on or associated with Seller Resources or their receipt at and
from the Delivery Points, including any costs or charges associated with
transmission service or scheduling services.
6. Price
for Provider of Last Resort Service.
(a) Direct Sales. MetEd and Penelec
shall pay Seller $41.65 and $41.41 per megawatt-hour, respectively, for all
Seller Resources. The Parties will agree upon a transfer date for the funds
remitted to Seller that will be no less frequently than monthly.
(b) Procurement as Agent. Buyers
shall reimburse Seller for all costs, charges and fees Seller incurs in
procuring Committed Resources on Buyers' behalf under Section 2 of this
Agreement. For the avoidance of doubt, Seller shall not charge Buyers any
▇▇▇▇-up, profit fee, or commission for Seller's services in procuring Committed
Resources pursuant to Section 2 of this Agreement.
7. Other
Services Provided by Seller. Subject to receiving any necessary approvals or
waivers from FERC, (a) Seller may provide Buyers technical advice and assistance
and other services as may be reasonably necessary to assist Seller in minimizing
its costs of providing Seller Resources, such services including but not limited
to price forecasting, risk management advice, management of congestion costs and
related services, and (b) Buyers shall provide Seller with data necessary to
perform such services. No fee or charges in addition to those imposed by other
terms of this Agreement shall be imposed for services provided by Seller
pursuant to this Section 7.
8. Effective
Date and Term. This Agreement shall be effective January 1, 2007 and will
remain in effect until December 31, 2007. This initial term will be
automatically extended for successive periods of one year unless any Party gives
sixty days' notice of termination to the other Parties prior to the end of the
calendar year then in effect. Unless otherwise agreed by the Parties, such
termination shall not affect or excuse the performance of transactions entered
into on behalf of either Party prior to notice of termination. This Agreement
shall remain in effect until both Parties have fully performed their obligations
under said transactions.
9. Regulatory
Out Termination. In the event that a Party’s obligations under this
Agreement are materially and adversely affected by a change in law, rule,
regulation, or other action by a governmental authority or regulatory agency,
the adversely affected Party may terminate this Agreement upon sixty days'
written notice to the other Party.
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10. Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania without regard to the choice of law
rules thereof.
11. Execution
in Counterparts; Facsimile Signatures. This Agreement
may be executed in multiple counterparts, each of which shall be considered an
original instrument, but all of which shall be considered one and the same
agreement, and shall become binding when all counterparts have been signed by
each of the Parties and delivered to each Party hereto. Delivery of an executed
signature page counterpart by telecopies or e-mail shall be as effective as
delivery of a manually executed counterpart.
12. Representation
and Warranties. Each Party represents and warrants
that it has full authority and right to enter into this Agreement.
13. Effect
of Agreement. This Agreement supersedes and replaces all prior agreements
among the Parties with respect to the subject matter hereof, including the
Requirements Agreement, that certain Notice of Termination Tolling Agreement
dated November 1, 2005 among the Parties, and that certain Notice of Termination
Tolling Agreement dated April 7, 2006 among the Parties.
14. Notice.
All notices and other communications under this Agreement ("Notices")
shall be in writing and shall be deemed duly given (a) when delivered personally
or by prepaid overnight courier, with a record of receipt, (b) the fourth day
after mailing if mailed by certified mail, return receipt requested, or (c) the
day of transmission, if sent by facsimile, telecopy or e-mail (with a copy
promptly sent by prepaid overnight courier with record of receipt or by
certified mail, return receipt requested), to the Parties at the following
addresses or telecopy numbers (or to such other address or telecopy number as a
Party may have specified by notice given to the other Parties pursuant to this
provision):
If
to Buyers:
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Tel. No.: (▇▇▇)
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with copies (which
shall not constitute Notice) to:
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to Seller:
FirstEnergy
Solutions Corp.
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FirstEnergy
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[Signature pages
follow]
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IN
WITNESS WHEREOF, this Agreement has been executed and delivered by the duly
authorized officers of the Parties as of the date first above
written.
FirstEnergy
Solutions Corp.
By:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (s) .
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
‘
Title:
President .
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the duly
authorized officers of the Parties as of the date first above
written.
Pennsylvania
Electric Company
The Waverly
Electric Power and Light Company
By:
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ (s) .
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
‘
Title:
President, Pennsylvania Operations .