EXHIBIT 10.2
POWER PURCHASE AGREEMENT
DATED AS OF __________, 2001
AMONG
COMED GENERATION COMPANY LLC
EXELON GENERATION COMPANY, LLC
AND
COMMONWEALTH EDISON COMPANY
TABLE OF CONTENTS
PAGE
1. Definitions and Interpretation.......................................................1
(a) Definitions...................................................................1
(b) Interpretation................................................................4
(c) Titles and Headings...........................................................4
2. Term.................................................................................5
(a) Term..........................................................................5
(b) Provisions Surviving Termination..............................................5
3. Character of Electric Energy; Scope of Service.......................................5
(a) Electric Energy...............................................................5
(b) Requirements..................................................................5
(c) Ancillary Services............................................................5
(d) Black Start Capability........................................................6
4. Annual Load Plan.....................................................................6
(a) Annual Load Plan..............................................................6
(b) Genco Response................................................................6
(c) Shortfalls....................................................................7
(d) Updates.......................................................................7
5. Transmission.........................................................................7
(a) Network Resource Designation..................................................7
(b) Genco Responsibility..........................................................7
(c) Interface of Control Area with Genco..........................................7
6. Delivery; Title; Metering............................................................7
(a) Delivery and Title............................................................7
(b) Measurement...................................................................8
7. Billing..............................................................................8
(a) Billing.......................................................................8
(b) Disputes......................................................................8
(c) Offsetting Charges............................................................8
(d) Records; Inspection...........................................................9
8. Information; Outrage.................................................................9
(a) MAIN..........................................................................9
(b) Information...................................................................9
(c) Outage Scheduling.............................................................9
9. Compensation.........................................................................9
(a) Energy Charge through December 31, 2002.......................................9
(b) Energy Charge from January 1, 2003 through December 31, 2004..................9
(c) Energy Charge During Partial Requirements Term................................9
(d) Ancillary Services............................................................9
(e) Competitive Transition Charge.................................................9
10. Limitation of Liability.............................................................10
i
11. Assignment..........................................................................10
12. Default; Termination and Remedies...................................................10
(a) Genco's Default..............................................................10
(b) ComEd Default................................................................10
(c) Remedies and Remedies Cumulative.............................................11
13. Representations and Warranties......................................................11
(a) Representations and Warranties of Genco......................................11
(b) Representations and Warranties of ComEd......................................12
14. Indemnification.....................................................................13
15. Notices.............................................................................13
16. Disagreements.......................................................................14
(a) Administrative Committee Procedure...........................................14
(b) Arbitration..................................................................14
(c) Obligations to Pay Charges and Perform.......................................16
(d) Preliminary Injunctive Relief................................................16
(e) Settlement Discussions.......................................................16
17. Governing Law.......................................................................16
18. No Third Party Beneficiaries........................................................16
19. Partial Invalidity..................................................................16
20. Waivers.............................................................................17
21. WAIVER OF JURY TRIAL................................................................17
22. Entire Agreement and Amendments.....................................................17
APPENDICES:
Appendix A: Prices through December 31, 2002
Appendix B: Prices from January 1, 2003 through December 31, 2004
ii
POWER PURCHASE AGREEMENT
THIS POWER PURCHASE AGREEMENT (this "AGREEMENT") dated as of January 1,
2001 among (i) COMED GENERATION COMPANY LLC, a Delaware limited liability
company ("COMED GENCO"), (ii) EXELON GENERATION COMPANY, LLC, a Pennsylvania
limited liability company ("EXELON GENCO"), and (iii) COMMONWEALTH EDISON
COMPANY, an Illinois corporation ("COMED");
W I T N E S S E T H:
WHEREAS, ComEd has transferred its interest in the Nuclear Stations to
ComEd Genco pursuant to the provisions of a Contribution Agreement dated as of
January 1, 2001 between ComEd and ComEd Genco; and
WHEREAS, ComEd desires to receive and purchase, and ComEd Genco desires
to deliver and sell, electric energy to meet ComEd's requirements to serve its
customers; and
WHEREAS, immediately following the execution and delivery of this
Agreement, ComEd Genco is to be merged into and with Exelon Ventures Company,
LLC, a Delaware limited liability company ("EXELON VENTURES") and the surviving
entity in such merger pursuant to the terms of an Agreement and Plan of Merger
dated as of the date hereof between ComEd Genco and Exelon Ventures; and
immediately thereafter, Exelon Ventures will contribute all of the assets
constituting the Nuclear Stations to Exelon Genco, which will then own and
operate the Nuclear Stations;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, the parties hereto agree as follows:
1. DEFINITIONS AND INTERPRETATION
(a) DEFINITIONS. As used in this Agreement, (i) the ten as set forth
below in this Section 1(a) shall have the respective meanings so set forth and
(ii) the terms defined elsewhere in this Agreement shall have the meanings
therein so specified.
"ANCILLARY SERVICES" has the meaning specified in Section 3(c).
"ANNUAL LOAD PLAN" has the meaning specified in Section 4(a).
"BANKRUPTCY" means any case, action or proceeding, under any
bankruptcy, reorganization, debt arrangement, insolvency or receivership
law or any dissolution or liquidation proceeding commenced by or against
a Person and, if such case, action or proceeding is not commenced by
such Person, such case or proceeding shall be consented to or acquiesced
in by such Person or shall result in an order for relief or shall remain
undismissed for 90 days.
"BLACK START SERVICE" means the provision and operation of
equipment that is necessary to reestablish the ability of the
transmission and distribution systems to deliver
1
electric energy after a large-scale interruption, and includes the
maintenance and use of the equipment necessary to allow the
interconnected grid to be restored to operation absent an external
source of power to the generating units that support the grid.
"BUSINESS DAY" means each weekday (Monday through Friday) except
the days on which the following holidays are observed: New Year's Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
"CHANGE OF LAW" means the adoption, promulgation, modification or
reinterpretation of any law, rule, regulation, ordinance, order or other
Requirement of Law of any Governmental Authority which occurs subsequent
to the Effective Date but excluding any change in law relating to
taxation of net income.
"COMED EVENT OF DEFAULT" has the meaning specified in Section
12(b).
"CONTRACT YEAR" means, in the case of the First Contract Year,
the period beginning on the Effective Date and ending on December 31 of
the calendar year in which such Effective Date occurs; and, in the case
of subsequent Contract Years, means a calendar year beginning on January
1 and ending on December 31. First Contract Year refers to the first
such period commencing on the Effective Date; Second Contract Year
refers to the calendar year immediately following such First Contract
Year; and so on.
"CPT" means Central Prevailing Time, being the time then
prevailing in the Central Time Zone of the United States, whether
central, standard time or central daylight savings time.
"DEFAULT RATE" means (i) the "Prime Rate" as published from time
to time in the "Money Rates" section of THE WALL STREET JOURNAL plus
(ii) 1.0% (100 basis points) per annum.
"EFFECTIVE DATE" means January 1, 2001.
"ELECTRIC ENERGY" has the meaning specified in Section 3(a).
"FERC" means the Federal Energy Regulatory Commission.
"FULL REQUIREMENTS TERM" means the period commencing on the
Effective date through December 31, 2004.
"GENCO" shall mean (i) upon execution of this Agreement until the
consummation of the transfer referred to in clause (ii) of this
definition, ComEd Genco and its successor, Exelon Ventures, and (ii)
following the consummation of the transfer of the Nuclear Stations to
Exelon Genco, Exelon Genco and its successors and permitted assigns.
"GENCO EVENT OF DEFAULT" has the meaning specified in Section
12(a).
"GENERATING FACILITIES" has the meaning specified in Section
4(b).
2
"GOVERNMENTAL AUTHORITY" means any foreign, federal, state, local
or other governmental authority or regulatory agency, commission,
department, or other governmental subdivision, court, tribunal or body,
but excluding Genco and any subsequent owner(s) of the Generating
Facilities (if otherwise a Governmental Authority under this
definition).
"ISO" means any Person that becomes responsible under applicable
FERC guidelines for the transmission system serving ComEd customers.
"MAIN" means the Mid-America Interconnected Network.
"NERC" means the North American Electric Reliability Council.
"NON-SUMMER MONTH"" means any month other than a Summer Month.
"NUCLEAR STATION" and "NUCLEAR STATIONS" have the meaning
specified in Section 3(b)(ii).
"OFF-PEAK PERIOD" means, with respect to each day of a calendar
week, the off-peak period as defined in Appendix 1F of NERC Policy 1
and, in addition, shall include all hours on Saturday.
"PARTIAL REQUIREMENTS TERM" means the period commencing on
January 1, 2005 through December 31, 2006.
"PARTY" shall mean each, and "PARTIES" shall mean all, of (i)
ComEd Genco and its successor, Exelon Ventures, until such time as the
Nuclear Stations are transferred to Exelon Genco, at which time ComEd
Genco and Exelon Ventures shall cease to be parties to this Agreement,
(ii) Exelon Genco and its successors and permitted assigns and (iii)
ComEd and its successors and permitted assigns.
"PEAK PERIOD" means, with respect to each day of a calendar week,
the on-peak period as defined in Appendix 1F of NERC Policy 1, but shall
exclude all hours on Saturday.
"PERMITS" means all licenses, permits, franchises, approvals,
authorizations, consents, waivers, exemptions, variances or orders of,
or filings by Genco and required by, or otherwise issued by any
Governmental Authority.
"PERSON" means any natural person, corporation, partnership,
firm, association, trust, unincorporated organization, Governmental
Authority or any other entity whether acting in an individual, fiduciary
or other capacity.
"PRUDENT UTILITY PRACTICES" means any of the practices, methods
and acts engaged in or approved by a significant portion of the electric
utility industry in the United States of America during the relevant
time period, or any of the practices, methods or acts which, in the
exercise of reasonable judgment in light of the facts known at the time
the
3
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. "PRUDENT UTILITY PRACTICES" 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 electric utility industry
in the United States of America.
"REQUIREMENT OF LAW" means any foreign, federal, state and local
laws, statutes, regulations, rules, codes or ordinances enacted,
adopted, issued or promulgated by any federal, state, local or other
governmental authority or regulatory body (including those pertaining to
electrical, building, zoning, environmental and occupational safety and
health requirements) or an applicable tariff filed with any federal,
state, local or other governmental authority or regulatory body.
"SUMMER MONTH" means each of June, July, August and September.
"TAXES" means all federal, state, local, foreign and other net
income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, withholding, payroll, employment, excise, property,
customs, duties or other taxes, fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to
tax or additional amount with respect thereto.
"TERM" has the meaning specified in Section 2.
(b) INTERPRETATION. In this Agreement, unless a clear contrary
intention appears:(i) the singular includes the plural and vice versa; (ii)
reference to any Person includes such Person's successors and assigns but, in
the case of a Party, only if such successors and assigns are permitted by this
Agreement, and reference to a Person in a particular capacity excludes such
Person in any other capacity or individually; (iii) reference to any gender
includes each other gender; (iv) reference to any agreement (including this
Agreement), document, instrument or tariff means such agreement, document,
instrument or tariff as amended or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms hereof; (v)
reference to any Requirement of Law means such Requirement of Law as amended,
modified, codified or reenacted, in whole or in part, and in effect from time to
time, including, if applicable, rules and regulations promulgated thereunder;
(vi) reference to any Section means such Section of this Agreement, and
references in any Section or definition to any clause means such clause of such
Section or definition; (vii) "hereunder", "hereof', "hereto" and words of
similar import shall be deemed references to this Agreement as a whole and not
to any particular Section or other provision hereof or thereof; (viii)
"including" (and with correlative meaning "include") means including without
limiting the generality of any description preceding such term; and (ix)
relative to the determination of any period of time, "from" means "from and
including", "to" means "to but excluding" and "through" means "through and
including".
(c) TITLES AND HEADINGS. Section and Appendix titles and headings in
this Agreement are inserted for convenience of reference only and are not
intended to be a part of, or to affect the meaning or interpretation of, this
Agreement.
4
2. TERM
(a) TERM. This Agreement shall have a term (the "TERM")
commencing on the Effective Date and ending on December 31, 2006 unless
terminated earlier as provided in Section 12(c) or Section 9(c).
(b) PROVISIONS SURVIVING TERMINATION. The provisions of Sections
7(d) (Records; Inspection), 10 (Limitation of Liability), 12 (Default,
Termination and Remedies), 14 (Indemnification) and 16 (Disagreements) shall
survive any termination of this Agreement.
3. CHARACTER OF ELECTRIC ENERGY; SCOPE OF SERVICE.
(a) ELECTRIC ENERGY. All electric energy ("ELECTRIC ENERGY")
provided by Genco under this Agreement shall be in the form of three-phase
alternating current having a nominal frequency of sixty cycles per second and a
harmonic content consistent with the requirements of the Institute of Electrical
and Electronic Engineers Standard No. 519.
(b) REQUIREMENTS.
(i) For the Full Requirements Term, Genco shall provide to
ComEd, and ComEd shall purchase from Genco, a quantity of Electric
Energy and capacity equal to the amount required by ComEd to meet its
service obligations to its retail and wholesale customers and the energy
imbalance requirements of the ComEd "control area" (after taking into
account deliveries from other Persons of Electric Energy and capacity
that ComEd is required to accept under any Requirement of Law).
(ii) For the Partial Requirements Term, Genco shall provide
to ComEd, and ComEd shall purchase from Genco, Electric Energy and
capacity from the ▇▇▇▇▇, Braidwood, LaSalle, Quad Cities and Dresden
nuclear generating stations (individually, a "NUCLEAR STATION" and
collectively, the "NUCLEAR STATIONS") equal to the amount required by
ComEd to meet its service obligations to its retail and wholesale
customer, subject in all events to the available capacity of the Nuclear
Stations, and in the case of Quad Cities Nuclear Station, to the rights
of such Station's co-owner. Genco shall have no obligation under this
Agreement to provide Electric Energy or capacity from any other source
during the Partial Requirements Term if the amount required by ComEd to
meet such service obligations exceeds the available capacity of the
Nuclear Stations. In addition, it is the intent of the Parties that
during the Partial Requirements Term the Nuclear Stations shall be
utilized as "base load" facilities to meet such service obligations and
not as peakers, and that the Annual Load Plan, and the protocols and
practices developed pursuant to Section 5(c), for each Contract Year
during the Partial Requirements Term shall reflect such intent.
(c) ANCILLARY SERVICES. As directed by ComEd, Genco shall provide
the following additional services (the "ANCILLARY SERVICES") during the Full
Requirements Term:
(i) Reactive supply and voltage control from generation
sources service;
(ii) Regulation and frequency response service.
5
(iii) Energy imbalance service;
(iv) Operating reserve - spinning reserve service;
(v) Operating reserve - supplemental reserve service; and
(vi) Black Start Service.
The requirements of the services set forth in clauses (i) through (v)
(inclusive) shall be as stated in ComEd's Open Access Transmission Tariff as
filed with FERC, and any other Requirement of Law and any requirements of MAIN,
NERC, any ISO and any successors to the functions thereof.
(d) BLACK START CAPABILITY. Genco shall prepare and maintain a
written plan setting forth the procedures that would be used to restart its
generation after a system-wide blackout. Genco shall provide a copy of such plan
to ComEd for its review and approval (which shall not be unreasonably withheld
or delayed) as to its overall feasibility (after such approval, the "BLACK START
PLAN"). ComEd shall provide for system restoration in accordance with the Black
Start Plan. In addition, ComEd may request that Genco implement a test of such
plan from time to time. Genco shall cooperate with ComEd, or any other entity
performing the restoration function, in integrating the Black Start Plan into a
system restoration plan and shall participate in training and restoration
drills. In the event that system restoration is necessary, Genco shall respond
to all directions from the entity performing the restoration.
4. ANNUAL LOAD PLAN
(a) ANNUAL LOAD PLAN. On or before (i) the Effective Date, in the
case of the First Contract Year, and (ii) the October 1 immediately preceding
the commencement of a Contract Year, in the case of each Contract Year after the
First Contract Year, ComEd shall deliver to Genco a written load plan (the
"ANNUAL LOAD PLAN") for such Contract Year, which shall set forth (i) the
maximum peak load expected in each week in each calendar month (or portion of a
calendar month) during such Contract Year, (ii) the expected requirements for
the Ancillary Services in each calendar month (or portion of a calendar month)
during such Contract Year and (iii) the average of maximum load day, average of
average load day and average of minimum load day data for each of the following
time periods in each calendar month (or portion of a calendar month) during such
Contract Year: the weekday peak(16 hours) period, the weekday off-peak (hours)
period and the weekend off-peak period. In the event that the Effective Date
shall occur after September 1 in a year and prior to the immediately following
January 1, then, in addition to an Annual Load Plan for the First Contract Year,
ComEd shall also deliver an Annual Load Plan for the Second Contract Year.
(b) GENCO RESPONSE. Following the receipt of an Annual Load Plan,
Genco may request that representatives of ComEd meet with its representatives
for purposes of discussing and reviewing the Annual Load Plan. In any event,
Genco shall, within thirty days of its receipt of an Annual Load Plan, identify
(i) the generating facilities ("GENERATING FACILITIES") that it desires that
ComEd designate as "network resources" for the Contract Year in question and
(ii) the generating facilities from which it will provide Ancillary Services. In
connection with the development of the Annual Load Plan for a Contract Year,
ComEd and Genco may discuss and
6
agree upon specific terms and values associated with the implementation of
voluntary curtailment actions for the Contract Year in question. Such terms and
values may be adjusted by agreement of the Parties as appropriate during the
applicable Contract Year.
(c) SHORTFALLS. The Parties acknowledge that an Annual Load Plan is
designed to provide a reasonable basis on which to estimate ComEd's service
requirements to its customers for the Contract Year in question, but shall not
relieve Genco from its obligations under Section 3(b)(i) or (ii) to provide
ComEd's actual full or partial requirements, as the case may be, needed to meet
its service obligations to its retail and retained wholesale customers during
such Contract Year.
(d) UPDATES. ComEd shall provide monthly updates to Genco regarding
an Annual Load Plan to reflect any changes in expectations or circumstances.
5. TRANSMISSION
(a) NETWORK RESOURCE DESIGNATION. ComEd shall designate as "network
resources" for a Contract Year any Generating Facilities identified by Genco
under Section 4(b) in respect to an Annual Load Plan. Notwithstanding any such
designation, such Generating Facilities may or may not be used by Genco, at
Genco's sole discretion, to meet ComEd's requirements for Electric Energy,
PROVIDED, HOWEVER, any sales of electric energy made by Genco to third parties
from any such Generating Facility designated as a "network resource" shall be
interruptible prior to sales of Electric Energy to ComEd under this Agreement.
(b) GENCO RESPONSIBILITY. Except as otherwise provided in Section
5(a), Genco shall be responsible for arranging any transmission service required
in order to deliver Electric Energy to ComEd under this Agreement, including
transmission service on systems not owned by ComEd. With respect to Generating
Facilities designated as "network resources," Genco shall be responsible for
arranging all necessary transmission service on transmission systems not owned
by ComEd in order to ensure that such Generating Facilities qualify as "network
resources" under ComEd's Open Access Transmission Tariff and any other
Requirement of Law applicable thereto.
(c) INTERFACE OF CONTROL AREA WITH GENCO. The Parties acknowledge
that certain operating and interface protocols and practices may need to be
developed between ComEd, as the control area operator, and Genco, including with
respect to, among other items, load forecasting, resource commitments, the
sources and availability of Ancillary Services and the ability, pursuant to
terms and conditions agreed to by the Parties, to obtain load reductions through
voluntary customer load curtailments. The Parties agree to establish jointly
from time to time in accordance with Prudent Utility Practices such operating
and interface protocol as may be necessary with respect to control area
operations and dispatch.
6. DELIVERY; TITLE; METERING
(a) DELIVERY AND TITLE. Electric Energy shall be delivered by Genco
to ComEd, and title to such Electric Energy shall pass to ComEd, at its point of
interconnection with ComEd's transmission system.
7
(b) MEASUREMENT. The amount of Electric Energy delivered by Genco to
ComEd under this Agreement during a given hour shall be determined by:
(i) taking the total for such hour of Electric Energy
delivered by or on behalf of Genco from (x) outside the ComEd control
area to an interconnection with the ComEd transmission system, as
established by scheduled deliveries of such Electric Energy at such
interconnection, for delivery into the ComEd control area, and (y)
generating facilities in the ComEd control area, as established by
readings from meters at such facilities; and
(ii) subtracting therefrom the total for such hour of
scheduled deliveries of Electric Energy (grossed-up for line losses, if
not already so grossed-up) delivered by or on behalf of Genco to (x) an
interconnection between the ComEd transmission system and the
transmission system of a third party, for delivery outside of the ComEd
control area and (y) non-ComEd customers in ComEd's control area.
7. BILLING
(a) BILLING.
(i) Within fifteen days after the end of each calendar
month, Genco shall render an invoice to ComEd setting forth (a) all
amounts due to Genco pursuant to this Agreement for the immediately
preceding calendar month and all amounts remaining unpaid from previous
calendar months and (b) the amount, if any, by which the amount set
forth in clause (a) has been reduced as a result of any offset
calculated in accordance with Section 7(c). Failure by Genco to render
an invoice within such fifteen-day period shall not preclude Genco from
subsequently rendering an invoice for the relevant calendar month.
(ii) ComEd shall pay any balance set forth in any such
invoice by wire transfer of immediately available funds to the account
specified in the invoice within fifteen days after receipt of the
invoice, subject to the provisions of Section 7(b).
(b) DISPUTES. Within ten days after receiving an invoice pursuant to
Section 7(a), ComEd may, by written notice to Genco, dispute, in good faith, any
amount set forth in such invoice, PROVIDED that ComEd shall pay all undisputed
amounts pursuant to Section 7(a)(ii). If the dispute relates to any charge
payable by ComEd to Genco hereunder, and such dispute is not resolved by the
Parties within five days of the receipt of written notice by Genco, then the
dispute shall be resolved as provided in Section 16. If the dispute (or any
portion thereof) is resolved against ComEd, ComEd shall within three days of the
date of such resolution pay to Genco amounts corresponding to such portion of
the dispute which has been resolved against ComEd plus interest on such amounts
from the date payable pursuant to Section 7(a) through the date paid at the
Default Rate.
(c) OFFSETTING CHARGES. Each Party shall have the right to set-off
against amounts payable to the other Party (i) any amounts paid by such Party
for, or on behalf of, such other Party, (ii) any amounts due such Party from
such other Party, whether under this Agreement or otherwise, and (iii) any
overpayment by such Party to such other Party which is either undisputed
8
by such other Party or which has been determined to constitute an overpayment in
accordance with Section 6(b).
(d) RECORDS; INSPECTION
(i) Each Party shall keep and maintain all records as may be
necessary or useful in performing or verifying any calculations or
charges made pursuant to this Agreement, or in verifying such Party's
performance hereunder. All such records shall be retained by each Party
for at least three calendar years following the calendar year in which
such records were created. Each Party shall make such records available
to the other Party for inspection and copying at the other Party's
expense, upon reasonable notice during such Party's regular business
hours. Each Party and its agents, including auditors, shall have the
right, upon thirty days written notice prior to the end of an applicable
three calendar year period to request copies of such records. Each Party
shall provide such copies, at the other Party's expense, within thirty
days of receipt of such notice or shall make such records available to
the other Party and its agents, including auditors, in accordance with
the foregoing provisions of this Section.
(ii) Each Party (and its representative(s)) shall have the
right, at its sole expense, upon reasonable notice and during normal
working hours, to examine the records of the other Party to the extent
reasonably necessary to verify the accuracy of any statement, charge
or computation relating to charges under this Agreement.
8. INFORMATION; OUTAGE SCHEDULING
(a) MAIN. For generating capacity that is located within the MAIN
region and is part of the resources proposed to be used to meet an Annual Load
Plan, Genco shall, to the extent it has the right to do so, require the
operator(s) of such capacity to comply with all MAIN Guides and policies.
(b) INFORMATION. Genco shall, upon reasonable request, assist ComEd
in providing information to MAIN, NERC, any ISO or any Governmental Authority as
may be required, or considered by ComEd to be necessary.
(c) OUTAGE SCHEDULING. Genco shall undertake to schedule and/or
adjust outages in the sources of generating capacity for a Contract Year in
accordance with Prudent Utility Practice and so as to minimize outages during
the Summer Months.
9. COMPENSATION
ComEd shall pay to Genco, in respect of each calendar month during the
Term, the following amounts:
(a) ENERGY CHARGE THROUGH DECEMBER 31, 2002. For Electric Energy
sold to ComEd under this Agreement from the Effective Date through December
31, 2002:
(i) during Peak Periods in such month, an amount equal to
the product of the number of megawatt-hours delivered to ComEd during
such Peak Period (determined as provided in Section 6(b)),
multiplied by the price per megawatt hour shown for such Peak Period
on Appendix A and
(ii) during Off-Peak Periods in such month, an amount
equal to the product of the number of megawatt-hours delivered to
ComEd during such Off-Peak Period (determined as provided in Section
6(b)), multiplied by the price per megawatt hour shown for such
Off-Peak Period on Appendix A.
(b) ENERGY CHARGE FROM JANUARY 1, 2003 THROUGH DECEMBER 31, 2004.
For Electric Energy sold to ComEd under this Agreement from January 1, 2003
through December 31, 2004:
(i) during Peak Periods in such month, an amount equal to
the product of the number of megawatt-hours delivered to ComEd during
such Peak Period (determined as provided in Section 6(b)),
multiplied by the price per megawatt hour shown for such Peak Period
on Appendix B and
(ii) during Off-Peak Periods in such month, an amount
equal to the product of the number of megawatt-hours delivered to
ComEd during such Off-Peak Period (determined as provided in Section
6(b)), multiplied by the price per megawatt hour shown for such
Off-Peak Period on Appendix B.
(c) ENERGY CHARGE DURING PARTIAL REQUIREMENTS TERM. Prior to
December 31, 2004, the Parties shall meet and discuss the energy charge(s)
and any other charges (including charges for any "competitive transitional
charges" (as defined in Illinois Public Act 90-561)) to be applied during the
Partial Requirements Term. Such prices shall be reflective of market prices
for electirc energy delivered in the geographic region served by ComEd in the
quantities contemplated under this Agreement for the Partial Requirements
Term. Such market prices (E.G., market indices or power exchange prices) that
may exist at the time. ComEd may terminate this Agreement as of December 31,
2004 in the event that the Parties are unable to arrive at an agreement by
July 1, 2004 (or such later date as the Parties may determine) as to the
pricing to be applied to Electric Energy to be delivered during the Partial
Requirements Term.
(d) ANCILLARY SERVICES. For any Ancillary Services sold to ComEd
for its own use under this Agreement, it is agreed that the price for such
Ancillary Services is the same price as ComEd is entitled to collect for such
Ancillary Serive under the provisions of its Open Access Transmission Tariff
as filed with FERC or, in the case of the Ancillary Service described in
Section 3(c)(vi), ComEd's Rate RCDS, and that the energy charge calculated
under Section 9(a) or (b), as the case may be, includes such prices. For any
Ancillary Services sold to ComEd for the use of a third party transmission
customer of ComEd, Genco shall be entitled to receive the amount which ComEd
receives from such third party in respect of such Anicllary Service under the
provisions of ComEd's Open Access Transmission Tariff or, in the case of the
Ancillary Service described in Section 3(c)(vi), ComEd's Rate RCDS.
(e) COMPETITIVE TRANSITION CHARGE. The prices set forth in
Section 9(a) and (b) have been calculated inclusive of an amount for the
"competitive transition charge" (as defined in Illinois Public Act 90-561).
9
10. LIMITATION OF LIABILITY
In no event or under any circumstances shall either Party (including
such Party's affiliates and such Party's and such affiliates' respective
directors, officers, employees and agents) be liable to the other Party
(including such Party's affiliates and such Party's and such affiliate's
respective directors, officers, employees and agents) for any special,
incidental, exemplary, indirect, punitive or consequential damages or damages in
the nature of lost profits, whether such loss is based on contract, warranty or
tort (including intentional acts, errors or omissions, negligence, indemnity,
strict liability or otherwise). A Party's liability under this Agreement shall
be limited to direct, actual damages, and all other damages at law or in equity
are waived.
11. ASSIGNMENT
Neither Party may assign its rights or obligations under this Agreement
without the prior written consent of the other Party, which shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, a Party shall
have the right to assign its rights and obligations hereunder without the
consent of the other Party to any affiliate of such Party.
12. DEFAULT; TERMINATION AND REMEDIES
(a) GENCO'S DEFAULT. The occurrence and continuation of any of the
following events or circumstances at any time during the Term, except to the
extent caused by, or resulting from, an act or omission of ComEd in breach of
this Agreement, shall constitute an event of default by Genco ("GENCO EVENT OF
DEFAULT"):
(i) Genco fails to pay any sum due from it hereunder on the
due date thereof and such failure is not remedied within 10 Business
Days after receipt of written notice thereof from ComEd;
(ii) Genco's Bankruptcy; or
(iii) Genco fails in any material respect to perform or comply
with any other obligation in this Agreement on its part to be observed
or performed which failure materially and adversely affects ComEd, and
if reasonably capable of remedy, is not remedied within 60 days after
ComEd has given written notice to Genco of such failure and requiring
its remedy; PROVIDED, HOWEVER, that if such remedy cannot reasonably be
cured within such period of 10 days, such failure shall not constitute a
Genco Event of Default if Genco has promptly commenced and is diligently
proceeding to cure such default.
(b) COMED DEFAULT. The occurrence and continuation of any of the
following events or circumstances at any time during the Term, except to the
extent caused by, or resulting from, an act or omission of Genco in breach of
this Agreement, shall constitute an event of default by ComEd ("COMED EVENT OF
DEFAULT"):
10
(i) ComEd fails to pay any amount due from it pursuant to
Section 9 hereof on the due date thereof and such failure is not
remedied within 10 Business Days after receipt of written notice thereof
from Genco;
(ii) ComEd's Bankruptcy; or
(iii) ComEd fails in any material respect to perform or comply
with any other obligation in this Agreement on its part to be observed
or performed which failure materially and adversely affects Genco, and
if reasonably capable of remedy, is not remedied within 60 days after
Genco has given written notice to ComEd of such failure and requiring
its remedy; PROVIDED, HOWEVER, that if such remedy cannot reasonably be
cured within such period of 60 days, such failure shall not constitute a
ComEd Event of Default if ComEd has promptly commenced and is diligently
proceeding to cure such default.
(c) REMEDIES AND REMEDIES CUMULATIVE. Upon the occurrence and
during the continuation of a Genco Event of Default, ComEd may at its discretion
(i) terminate this Agreement upon 30 days prior written notice to Genco and (ii)
exercise any other rights and remedies available to it at law or in equity. Upon
the occurrence and during the continuation of a ComEd Event of Default, Genco
may seek money damages from ComEd but may not terminate this Agreement.
13. REPRESENTATIONS AND WARRANTIES
(a) REPRESENTATIONS AND WARRANTIES OF GENCO. Genco hereby makes the
following representations and warranties to ComEd:
(i) Genco is a limited liability company duly organized and
validly existing under the laws of the State of Delaware and has the
legal power and authority to own its properties, to carry on its
business as now being conducted and to enter into this Agreement and
carry out transactions contemplated hereby and perform and carry out all
covenants and obligations on its part to be performed under and pursuant
to this Agreement.
(ii) The execution, delivery and performance by Genco of this
Agreement have been duly authorized by all necessary corporate action.
(iii) The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the fulfillment
of and compliance with the provisions of this Agreement, do not and will
not conflict with or constitute a breach of or a default under, any of
the terms, conditions or provisions of any legal requirements, or any
organizational documents, agreement, deed of trust, mortgage, loan
agreement, other evidence of indebtedness or any other agreement or
instrument to which Genco is a party or by which it or any of its
property is bound, or result in a breach of or a default under any of
the foregoing.
(iv) This Agreement constitutes the legal, valid and binding
obligation of Genco enforceable in accordance with its terms, except as
such enforceability may be
11
limited by bankruptcy, insolvency, reorganization or similar laws
relating to or affecting the enforcement of creditors' rights generally
or by general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(v) There is no pending, or to the knowledge of Genco,
threatened action or proceeding at or proceeding affecting Genco before
any Governmental Authority, which purports to affect the legality,
validity or enforceability of this Agreement.
(vi) Genco has all necessary approvals from Governmental
Authorities for it to perform its obligations under this Agreement.
(b) REPRESENTATIONS AND WARRANTIES OF COMED. ComEd hereby makes the
following representations and warranties to Genco:
(i) ComEd is a corporation duly organized, validly
existing and in good standings under the law of the State of
Illinois and has the legal power and authority to own its
properties, to carry on its business as now being conducted and to
enter into this Agreement and carry out the transactions
contemplated hereby and perform and carry out all covenants and
obligations on its part to be performed pursuant to this Agreement.
(ii) The execution, delivery and performance by ComEd of this
Agreement have been duly authorized by all necessary corporate action.
(iii) The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the fulfillment
of and compliance with the provisions of this Agreement do not and will
not conflict with or constitute a breach of or a default under, any of
the terms, conditions or provisions of any legal requirements, or its
articles of incorporation or bylaws, or any deed of trust, mortgage,
loan agreement, other evidence of indebtedness or any other agreement or
instrument to which ComEd is a party or by which it or any of its
property is bound, or result in a breach of or a default under any of
the foregoing.
(iv) This Agreement constitutes the legal, valid and binding
obligation of ComEd enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement
of creditors' rights generally, or by general equitable principles,
regardless of whether such enforceability is considered in a proceeding
in equity or at law.
(v) There is no pending, or to the knowledge of ComEd,
threatened action or proceeding affecting ComEd before any Governmental
Authority, which purports to affect the legality, validity or
enforceability of this Agreement.
(vi) ComEd has all necessary approvals from Governmental
Authorities for it to perform its obligations under this Agreement.
12
14. INDEMNIFICATION
Each Party shall indemnify and hold harmless the other Party, and its
officers, directors, agents and employees from and against any and all claims,
demands, actions, losses, liabilities, expenses (including reasonable legal fees
and expenses), suits and proceedings of any nature whatsoever for personal
injury, death or property damage to each other's property or facilities or
personal injury, death or property damage to third parties caused by the
negligence or willful misconduct of the indemnifying Party that arise out of or
are in any manner connected with the performance of this Agreement, except to
the extent such injury or damage is attributable to the negligence or willful
misconduct of, or breach of this Agreement by, the Party seeking indemnification
hereunder. Title, and all risk relating to, all Electric Energy purchased by
ComEd under this Agreement shall pass to ComEd at the Applicable Point of
Delivery. ComEd shall indemnify Genco for liability from Electric Energy once
sold and delivered at the applicable point pf delivery set forth in Section
6(a); and Genco shall indemnify ComEd for liability from Electric Energy prior
to its delivery at delivery at such point of delivery.
15. NOTICES
Unless otherwise provided in this Agreement, any notice, consent or
other communication required to be made under this Agreement shall be in writing
and shall be sent by facsimile transmission, delivered or sent to the address
set forth below or such other address as the receiving Party may from time to
time designate by written notice:
If to ComEd, to:
Commonwealth Edison Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President, Exelon Energy Delivery
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Commonwealth Edison Company
One Financial Place
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
13
If to Genco, to:
Exelon Generation Company, LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer and President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Exelon Generation Company, LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
All notices shall be effective when received.
16. DISAGREEMENTS
(a) ADMINISTRATIVE COMMITTEE PROCEDURE. Except to the extent
otherwise provided in Section 7(b), if any disagreement arises on matters
concerning this Agreement, the disagreement shall be referred to one
representative of each Party, who shall attempt to timely resolve the
disagreement. If such representatives can resolve the disagreement, such
resolution shall be reported in writing to and shall be binding upon the
Parties. If such representatives cannot resolve the disagreement, such
resolution shall be reported in writing to and shall be binding upon the
Parties. If such representatives cannot resolve the disagreement within a
reasonable time, or a Party fails to appoint a representative within 10 days of
written notice of the existence of a disagreement, then the matter shall proceed
to arbitration as provided in Section 16(b).
(b) ARBITRATION. If pursuant to Section 16(a), the Parties are
unable to resolve a disagreement arising on a matter pertaining to this
Agreement, such disagreement shall be settled by arbitration in Chicago,
Illinois. The arbitration shall be governed by the United States Arbitration Act
(9 U.S.C. ss. 1 ET SEQ.), and any award issued pursuant to such arbitration may
be enforced in any court of competent jurisdiction. This agreement to arbitrate
and any other agreement or consent to arbitrate entered into in accordance
herewith will be specifically enforceable under the prevailing arbitration law
of any court having jurisdiction. Notice of demand for arbitration must be filed
in writing with the other Party to this Agreement. Arbitration shall be
conducted as follows:
(i) Either Party may give the other Party written notice in
sufficient detail of the disagreement and the specific provision of this
Agreement under which the disagreement arose. The demand for arbitration
must be made within a reasonable time after the disagreement has arisen.
In no event may the demand for arbitration be made if the institution of
legal or equitable proceedings based on such disagreement is barred by
14
the applicable statute of limitations. Any arbitration related to this
Agreement may be consolidated with any other arbitration proceedings
related to this Agreement.
(ii) The Parties shall attempt to agree on a person with
special knowledge and expertise with respect to the matter at issue to
serve as arbitrator. If the Parties cannot agree on an arbitrator within
ten days, each shall then appoint one person to serve as an arbitrator
and the two thus appointed shall select a third arbitrator with such
special knowledge and expertise to serve as Chairman of the panel of
arbitrators; and such three arbitrators shall determine all matters by
majority vote; PROVIDED, HOWEVER, if the two arbitrators appointed by
the Parties are unable to agree upon the appointment of the third
arbitrator within five days after their appointment, both shall give
written notice of such failure to agree to the Parties, and, if the
Parties fail to agree upon the selection of such third arbitrator within
five days thereafter, then either of the Parties upon written notice to
the other may require appointment from, and pursuant to the rules of,
the Chicago office of the American Arbitration Association for
commercial arbitration. Prior to appointment, each arbitrator shall
agree to conduct such arbitration in accordance with the terms of this
Agreement.
(iii) The Parties shall have sixty days from the appointment
of the arbitrator(s) to perform discovery and present evidence and
argument to the arbitrator(s). During that period, the arbitrator(s)
shall be available to receive and consider all such evidence as is
relevant and, within reasonable limits due to the restricted time
period, to hear as much argument as is feasible, giving a fair
allocation of time to each Party to the arbitration. The arbitrator(s)
shall use all reasonable means to expedite discovery and to sanction
noncompliance with reasonable discovery requests or any discovery order.
The arbitrator(s) shall not consider any evidence or argument not
presented during such period and shall not extend such period except by
the written consent of both Parties. At the conclusion of such period,
the arbitrator(s) shall have forty-five calendar days to reach a
determination. To the extent not in conflict with the procedures set
forth herein, which shall govern, such arbitration shall be held in
accordance with the prevailing rules of the Chicago office of the
American Arbitration Association for commercial arbitration.
(iv) The arbitrator(s) shall have the right only to interpret
and apply the terms and conditions of this Agreement and to order any
remedy allowed by this Agreement, but may not change any term or
condition of this Agreement, deprive either Party of any right or remedy
expressly provided hereunder, or provide any right or remedy that has
been expressly excluded hereunder,
(v) The arbitrator(s) shall give a written decision, to the
Parties stating their findings of fact and conclusions of law, and shall
furnish to each Party a copy thereof signed by him (them) within five
calendar days from the date of their determination. The arbitrator's(s')
decision shall be final and binding upon the Parties.
(vi) Each Party shall pay the cost of the arbitrator(s) with
respect to those issues as to which they do not prevail, as determined
by the arbitrator(s).
15
(c) OBLIGATIONS TO PAY CHARGES AND PERFORM. If a disagreement should
arise on any matter which is not resolved as provided in Section 16(a), then,
pending the resolution of the disagreement by arbitration as provided in Section
16(b), Genco shall continue to provide Electric Energy in a manner consistent
with the applicable provisions of this Agreement and pay all charges and perform
all other obligations required in accordance with the applicable provisions of
this Agreement.
(d) PRELIMINARY INJUNCTIVE RELIEF. Nothing in this Section 16 shall
preclude, or be construed to preclude, the resort by either Party to a court of
competent jurisdiction solely for the purposes of securing a temporary or
preliminary injunction to preserve the status quo or avoid irreparable harm
pending arbitration pursuant to this Section 16.
(e) SETTLEMENT DISCUSSIONS. The Parties agree that no statements of
position or offers of settlement made in the course of the dispute process
described in this Section 16 will be offered into evidence for any purpose in
any litigation or arbitration between the Parties, nor will any such statements
or offers of settlement be used in any manner against either Party in any such
litigation or arbitration. Further, no such statements or offers of settlement
shall constitute an admission or waiver of rights by either Party in connection
with any such litigation or arbitration. At the request of either Party, any
such statements and offers of settlement, and all copies thereof, shall be
promptly returned to the Party providing the same.
17. GOVERNING LAW
Except as provided in Section 16, this Agreement shall be construed in
accordance with, and governed by, the laws of the state of Illinois without
regard to its conflicts of laws provisions.
18. NO THIRD PARTY BENEFICIARIES
This Agreement is intended to be solely for the benefit of the Parties
and their successors and permitted assigns and is not intended to and shall not
confer any rights or benefits on any third party not a signatory hereto. The
Parties' successors and permitted transferees shall be bound by the provisions
of this Agreement.
19. PARTIAL INVALIDITY
Wherever possible, each provision hereof shall be interpreted in such
manner as to be effective and valid under applicable law, but in case any one or
more of the provisions contained herein shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such provision shall be
ineffective to the extent, but only to the extent, of such invalidity, legality
or unenforceability without invalidating the remainder of such invalid, illegal
or unenforceable provision or provisions or any other provisions hereof, unless
such a construction would be unreasonable. In the event that such a construction
would be unreasonable or would deprive a Party of a material benefit under this
Agreement, the Parties shall seek to amend this Agreement to remove the invalid
provision and otherwise provide the benefit unless prohibited by any Requirement
of Law.
16
20. WAIVERS
The failure of either Party hereto to enforce at any time any provision
of this Agreement shall not be construed to be a waiver of such provision, nor
in any way to affect the validity of this Agreement or any part hereof or the
right of a Party thereafter to enforce each and every such provision. A waiver
under this Agreement must be in writing and state that it is a waiver. No waiver
of any breach of this Agreement shall be held to constitute a waiver or
subsequent breach.
21. WAIVER OF JURY TRIAL
THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR
ACTIONS OF THE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH OF THE
PARTIES TO ENTER INTO THIS AGREEMENT.
22. ENTIRE AGREEMENT AND AMENDMENTS
This Agreement supersedes all previous representations, understandings,
negotiations and agreements either written or oral between the Parties or their
representatives with respect to the supply and delivery of Electric Energy and
constitutes the entire agreement of the Parties with respect thereto.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date set forth at the beginning of this Agreement.
COMMONWEALTH EDISON COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
COMED GENERATION COMPANY LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
EXELON GENERATION COMPANY, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
17