(As filed November 24, 1999)
File No. 70-9513
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 1
("POS-AMC")
to
FORM U-1
APPLICATION OR DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
ALLIANT ENERGY CORPORATION
222 West Washington Avenue
Madison, Wisconsin 53703
IES UTILITIES INC.
Alliant Tower
Cedar Rapids, Iowa 52401
(Names of companies filing this statement and addresses of principal
executive offices)
---------------------------------------------------
ALLIANT ENERGY CORPORATION
(Name of top registered holding company parent)
----------------------------------------------------
Erroll B. Davis, Jr.
President and
Chief Executive Officer
Alliant Energy Corporation
222 West Washington Avenue
Madison, Wisconsin 53703-0192
(Name and address of agent for service)
The Commission is requested to send copies of all notices, orders and
communications in connection with this Application or Declaration to:
Barbara J. Swan, General Counsel William T. Baker, Jr., Esq.
Alliant Energy Corporation Thelen Reid & Priest LLP
222 West Washington Avenue 40 West 57th Street
Madison, Wisconsin 53703-0192 New York, New York 10019
<PAGE>
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION.
-----------------------------------
A. Background.
----------
By order dated October 26, 1999 (Holding Company Act Release No.
27096), Alliant Energy Corporation ("Alliant Energy"), a registered holding
company under the Public Utility Holding Company Act of 1935, as amended (the
"Act"), was authorized to acquire, indirectly through a newly-organized,
wholly-owned subsidiary, a 25% membership interest in Nuclear Management
Company, LLC ("NMC"), a Wisconsin limited liability company formed in February
1999 by three unaffiliated companies1 which own (or whose affiliates own)
nuclear power plant units located in Wisconsin and Minnesota for the purpose of
consolidating into one service organization the specialized nuclear power plant
personnel and resources of such companies. IES Utilities, Inc. ("IES"), a
public-utility subsidiary of Alliant Energy, was also authorized to enter into a
services agreement ("Services Agreement") and related employee lease agreement
with NMC pursuant to which IES provides services and specialized personnel to
NMC and, in turn, purchases from NMC various types of administrative and
technical services required in connection IES's operation of the Duane Arnold
Energy Center ("DAEC"), a 535 MW boiling water reactor located in Palo, Iowa, in
which IES holds a 70% ownership interest.
Specifically, the Services Agreement lists ten categories of support
services from which, subject to study by Service Development Teams, certain
basic support services ("Basic Services") would be identified which could be
provided by NMC on a centralized basis to IES and the other members of NMC (or
their utility affiliates) (collectively, the "NMC Plant Owners") on a cost
- ---------------------------
1 The initial members of NMC were Northern States Power Company, WEC Nuclear
- - Corp., a subsidiary of Wisconsin Energy Corporation, and WPS Nuclear
Corporation, a subsidiary of WPS Resources.
- 2 -
<PAGE
effective basis. In addition, the Services Agreement provides that NMC may offer
additional services ("Optional Services") to the members or the members'
affiliates.
IES and NMC now request approval to enter into a Nuclear Power Plant
Operating Services Agreement ("Operating Services Agreement"), the form of which
is filed herewith as Exhibit B-3, pursuant to which NMC would provide
operations, maintenance, capital improvement and decommissioning services
("Operating Services") to IES, as an owner of the DAEC. NMC will enter into
essentially identical Operating Services Agreements with each of the other NMC
Plant Owners. In the future, NMC may admit additional members and/or offer
similar types of operating services at competitive rates to third parties who
are not, and whose affiliates are not, members of NMC.
As more fully explained below, the Operating Services will be provided
to IES at cost, as determined in accordance with Rules 90 and 91, on terms that
are substantially the same as set forth in the existing Services Agreement,
which the Operating Services Agreement will replace. In this regard, although
IES and the other members of NMC could have requested the additional operating
services as Optional Services under the terms of the existing Services
Agreement, they concluded that, for purposes of making required submissions to
the Nuclear Regulatory Commission ("NRC") and in order to address
comprehensively the responsibilities of NMC for nuclear plant safety and certain
employee-related issues that will arise when NMC assumes responsibility for
operational (as opposed to purely administrative) functions at the nuclear
facilities, it was preferable to amend and restate the existing Services
Agreement.
B. Description of Operating Services Agreement.
--------------------------------------------
Under the Operating Services Agreement, NMC shall act as agent of IES
and each of the other NMC Plant Owners (defined in the agreement as a
"Contracting Owner") in connection with the operation, management, maintenance,
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<PAGE>
and repair of the nuclear plants owned by the Contracting Owner, to make capital
improvements to the Contracting Owner's nuclear plant facilities, and to perform
decommissioning work required upon the retirement of such facilities. The
Contracting Owners shall, pursuant to NRC regulations, transfer operating
responsibility for the nuclear plants to NMC, subject to receipt of NRC
approval. Following the transfer, NMC shall be obligated to obtain and maintain
all necessary licenses required by the NRC and other governmental bodies. NMC,
as supplier of operating services to each Contracting Owner, shall have the sole
authority to make all decisions relating to the public health, safety, and
security of the nuclear facilities, including, without limitation, the decision
to reduce capacity or shut down a unit in order to protect the health, safety,
and security of the public and plant personnel. In addition, subject to the
limitations described immediately below, the Contracting Owners will grant NMC,
as their agent, the power and authority to execute, modify, amend or terminate
any contracts, licenses, purchase orders, or permits relating to the operations
of or capital improvements to a unit.
Notwithstanding the foregoing rights, responsibilities and authority of
NMC, NMC may not, without the prior written approval of a Contracting Owner: (a)
obligate the Contracting Owner to pay costs of operation or costs of capital
improvements that are either in excess of or materially different in scope from
the expenditures agreed to in the annual budget approved by the Contracting
Owner, (b) obligate the Contracting Owner to pay costs of capital improvements
that have not been approved in accordance with the Contracting Owner's policy
requiring board of directors approval, (c) modify, amend or terminate any
contracts executed by a Contracting Owner that are in existence prior to the
effective date of the Operating Services Agreement, or (d) sell, encumber or
otherwise dispose of any property or equipment which comprises any nuclear
- 4 -
<PAGE>
plant, except to the extent replaced by similar equipment or property of
comparable value. In addition, the Contracting Owner shall have exclusive
authority to direct NMC to retire a plant and commence decommissioning activity,
to operate a plant at a reduced capacity, and to review and approve contracts
that NMC may enter into with respect to acquisitions of equipment, property,
materials and inventories.
A Contracting Owner shall at all times during the term of the agreement
remain the owner of, and shall be entitled to all of, the capacity and energy
associated with any plant owned by such Contracting Owner. Further, the
Contracting Owner shall at all times (subject to NMC's exclusive right to shut
down a plant for safety reasons) have the right to determine the electric output
from a plant (i.e., dispatch control).
The agreement provides that, upon the effective date, a Contracting
Owner shall transfer to NMC its on-site non-union employees and contractors
responsible for the licensed obligations of its plant. In the event NMC
terminates any transferred employee within three years following the effective
date, the transferring Contracting Owner would be solely responsible for any
severance liabilities; thereafter, severance liabilities with respect to any
terminated employee would be allocated to all Contracting Owners based on the
amount of time such employee that was allocated to each plant operated by NMC.
NMC shall prepare each year an annual budget for operating expenses and
capital improvements for each plant for the following year, which shall be
subject to review and approval by the Contracting Owner. Any adjustments or
modifications to the budget during the budget year must be approved by the
Contracting Owner. For the services performed by NMC, a Contracting Owner shall
be obligated to reimburse NMC for the costs of operation and costs of any
capital improvements. Costs of operation of a plant include salaries and
- 5 -
<PAGE>
employee benefits, the direct cost of contractors engaged by NMC, all
administrative and overhead costs and an allocable portion of the return on and
of the investment by NMC in capital items owned by NMC, based on a composite of
the authorized overall pre-tax capital returns of the Contracting Owners, plus
the costs of inventory purchased by NMC for any particular Contracting Owner.
The agreement specifies certain allocators that will be applied to costs in
various service categories, including number of labor hours, number of units and
number of plants. All such costs of operation shall be calculated and allocated
in accordance with Rules 90 and 91.
NMC's compensation under the agreement shall not be based in whole or
in part on the revenues, income or electrical output from operations of any
plant that it manages, nor shall NMC be responsible (except as agent for a
Contracting Owner) for supplying or procuring fuel or other resources necessary
to operate, maintain and improve any plant.
A Contracting Owner may terminate the agreement, without cause, upon
one full calendar year's notice, or for cause in the event of any unremedied
material breach, which includes the failure by either party to make any payment
required under the terms of the agreement, or the failure of either party to
perform its material undertakings.
No changes will be made in the way in which NMC maintains its books and
records and system of accounts, as previously directed by the Commission in the
October 26, 1999 order. Further, no change in the types of services or methods
of allocating costs to associate companies, or, except as previously provided,
in the types of companies for which it agrees to provide services, shall be made
unless and until NMC shall first have given the Commission written notice of the
proposed change not less than 60 days prior to the proposed effectiveness of any
such change. If, upon receipt of any such notice, the Commission shall notify
NMC within the 60-day period that a question exists as to whether the proposed
- 6 -
<PAGE>
change is consistent with the provisions of Section 13 of the Act, or any rule,
regulation or order thereunder, then the proposed change shall not become
effective unless and until NMC shall have filed with the Commission an
appropriate application regarding such proposed change and the Commission shall
have authorized such change.
The Applicants submit that NMC will not become an "electric utility
company," as defined in Section 2(a)(3) of the Act, by reason of the performance
of its duties and responsibilities under the Operating Services Agreement. In
this regard, the Commission has previously considered the status of other
similar nuclear operating companies that have been formed to perform the same
functions as NMC and has concurred that such companies would not be "electric
utility companies" if they did not have full operating control over any nuclear
power station, did not function as a utility (i.e., did not make sales of
electricity), and did not receive fees for their services other than
reimbursement of costs.2
ITEM 2. FEES COMMISSIONS AND EXPENSES.
-----------------------------
The estimated fees, commissions and expenses to be incurred in
connection with the filing of this Post-Effective Amendment is $5,000.
- ---------------------------
2 See STP Nuclear Operating Co., SEC No-Action Letter dated June 18, 1997,
- - 1997 SEC No-Act. LEXIS 686, and Wolf Creek Operating Corp., SEC No-Action
Letter dated December 11, 1995, 1995 SEC No-Act. LEXIS 918. The rights,
responsibilities and duties of NMC under the Operating Services Agreement
are similarly limited, consistent in all material respects with the
agreements which the Division of Investment Management reviewed in
connection with the no-action letter requests in those cases.
- 7 -
<PAGE>
ITEM 4. REGULATORY APPROVAL.
-------------------
No state commission and no federal commission, other than this
Commission, has jurisdiction over the transaction proposed herein as it relates
to Alliant, IES or NMC. Certain of the NMC Plant Owners (other than IES) have
filed applications with the Wisconsin and Minnesota public service commissions
seeking authorization to enter into the Operating Services Agreement. All NMC
Plant Owners will be required to apply to the NRC for approval to transfer
operating licenses to NMC.
ITEM 5. PROCEDURE.
---------
Applicants request that the Commission's supplemental order in this
proceeding be issued as soon as is permitted by the Rules and that there be no
30-day waiting period between the issuance of the Commission's supplemental
order and the date on which it is to become effective. Applicants submit that it
is unnecessary that the Commission publish a notice of the proposed transaction
as all aspects thereof were contemplated as a part of the original transaction
approved in the Commission's October 26, 1999 order. Applicants hereby waive a
recommended decision by a hearing or other responsible officer of the Commission
and consent that the Division of Investment Management may assist with the
preparation of the Commission's decision and/or order with respect to this
matter unless such Division opposes the matters covered hereby.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
----------------------------------
The following additional exhibit is filed as a part of this
Post-Effective Amendment:
(a) Exhibits
--------
B-3 Form of Nuclear Power Plant Operating Services Agreement.
- 8 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, as amended, the undersigned companies have duly caused this Application
or Declaration filed herein to be signed on their behalf by the undersigned
thereunto duly authorized.
ALLIANT ENERGY CORPORATION
By: /s/ Erroll B. Davis, Jr.
------------------------
Name: Erroll B. Davis, Jr.
Title: Chief Executive Officer
IES UTILITIES, INC.
By: /s/ Eliot J. Protsch
------------------------
Name: Eliot J. Protsch
Title: Chief Executive Officer
Date: November 24, 1999
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Description
-------- -----------
B-3 Form of Nuclear Power Plant Operating Services Agreement.
Exhibit B-3
NUCLEAR POWER PLANT OPERATING SERVICES AGREEMENT
BETWEEN
ALLIANT ENERGY - IESU
AND
NUCLEAR MANAGEMENT COMPANY, LLC
(NOVEMBER, 1999)
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 - DEFINITION OF TERMS................................................
ARTICLE 2 - NMC'S AUTHORITY AND RESPONSIBILITY WITH RESPECT TO OPERATION OF
THE PLANT
2.1 Authority for Operation.................................................
2.2 Limitation on NMC's Authority...........................................
2.3 Form of NMC Purchases and Contracting Owner Review of Proposed
Contracts...............................................................
2.4 Execution, Disclosures in Third-Party Contracts.........................
2.5 Enforcement of Rights...................................................
2.6 NMC's Responsibilities at Other Plants..................................
2.7 Transfer of Organization and Staff......................................
2.8 Membership and Participation in Industry Organizations..................
2.9 NMC Oversight...........................................................
ARTICLE 3 - CONTRACTING OWNER'S RESPONSIBILITY AND OBLIGATIONS..................
3.1 Payment.................................................................
3.2 Site Access and Control.................................................
3.3 Compliance With Operating License and Regulations.......................
3.4 Support Services from Contracting Owner.................................
3.5 No Changes to Facilities, Procedures or Practices.......................
3.6 Off-Site Power Supply...................................................
3.7 Contracting Owner's Represented Employees...............................
ARTICLE 4 - OWNERSHIP OF CAPACITY AND ENERGY....................................
4.1 Ownership of Capacity and Energy........................................
4.2 Determination of Output.................................................
ARTICLE 5 - PAYMENT, AUDIT AND INSPECTION RIGHTS................................
5.1 Payment Obligation......................................................
5.2 Payment and Billing.....................................................
5.3 Bank Accounts...........................................................
5.4 Audit and Adjustments...................................................
ARTICLE 6 - LIMITATION ON LIABILITY; INDEMNIFICATION............................
6.1 Exclusive Warranties and Remedies.......................................
6.2 Waiver and Disclaimer of Damages........................................
6.3 Indemnity...............................................................
6.4 Survival................................................................
ARTICLE 7 - INSURANCE AND NUCLEAR LIABILITY PROTECTION..........................
7.1 NMC Coverage............................................................
7.2 Nuclear Protection......................................................
7.3 Notice of Claim.........................................................
7.4 Insurance Renewal.......................................................
ARTICLE 8 - TERM AND TERMINATION................................................
8.1 Term....................................................................
8.2 Termination Without Cause...............................................
8.3 Termination Because of Governmental or Judicial Acts....................
8.4 Termination for Cause...................................................
8.5 Mutual Agreement........................................................
8.6 Transition and Survival.................................................
8.7 NMC Employee Severance..................................................
ARTICLE 9 - COMPLIANCE WITH LAWS, REGULATIONS AND SITE
REQUIREMENTS............................................................
9.1 General.................................................................
9.2 Energy Reorganization Act...............................................
ARTICLE 10 - REPRESENTATIONS AND WARRANTIES.....................................
10.1 Representations of NMC..................................................
10.2 Representations of Contracting Owner....................................
ARTICLE 11 - CONTRACTING OWNER'S PERFORMANCE AUDIT..............................
ARTICLE 12 - CONFIDENTIALITY....................................................
12.1 Nondisclosure...........................................................
12.2 Notification............................................................
12.3 Permitted Disclosures...................................................
ARTICLE 13 - MISCELLANEOUS......................................................
13.1 Restricted Data.........................................................
13.2 Assignment and Successors...............................................
13.3 Governing Law...........................................................
13.4 No Delay in Payments....................................................
13.5 Notices.................................................................
13.6 Amendments..............................................................
13.7 Relationship............................................................
13.8 Counterparts............................................................
13.9 Force Majeure...........................................................
13.10 Termination of Services Agreement.......................................
13.11 Intellectual Property Rights............................................
13.12 Arbitration.............................................................
13.13 Entire Agreement........................................................
13.14 Waiver..................................................................
13.15 Certain Interpretive Matters............................................
13.16 No Third Party Beneficiaries............................................
EXHIBITS
Exhibit A - NMC Cost Allocators..............................................A-1
Exhibit B - Plant Support Services Agreement.................................B-1
Exhibit C - Emergency Services Agreement.....................................C-1
Exhibit D - List of Applicable Contracting Owner Policies....................D-1
Exhibit E - Legal or Regulatory Proceedings..................................E-1
<PAGE>
NUCLEAR POWER PLANT OPERATING SERVICES AGREEMENT
This Nuclear Power Plant Operating Services Agreement (hereinafter
referred to as "NPPOSA") is made and entered into as of _____________, 1999
between Nuclear Management Company, LLC, a Wisconsin limited liability company
(hereinafter referred to as "NMC") and Alliant Energy -IESU ( hereinafter
referred to as "Contracting Owner").
WHEREAS, Contracting Owner, a public utility subject to regulation by
the State of Iowa Utility Board, generates, transmits and distributes
electricity in the State of Iowa and operates a nuclear power plant located near
Palo, Iowa ("the Plant"); and
WHEREAS, Contracting Owner is the holder of Facility Operating
License, number DPR-49, issued by the NRC; and
WHEREAS, NMC's goals are to achieve enhanced reliability and continued
safe operation, to pursue overall excellence in nuclear power operations, as
well as to identify efficiencies in the provision of operating services to
nuclear facilities; and
WHEREAS, Contracting Owner desires to transfer to NMC certain
operating responsibility for, but not ownership of, the Plant and ISFSI; and
WHEREAS, Contracting Owner desires that such operating responsibility
transferred to NMC be consistent with Contracting Owner's obligations and
responsibilities under all pertinent state and federal law; and
WHEREAS, Contracting Owner desires to contract with NMC so as to
enable NMC to have physical control of, use, Operate, and Decommission the Plant
as Contracting Owner's agent, but that, except as may be necessary for reasons
of safety, NMC not have any authority to determine the electrical output of the
Plant and NMC desires to undertake such responsibility, all subject to and in
accordance with the terms and conditions set forth herein;
NOW THEREFORE, IN CONSIDERATION of the mutual obligations set forth
herein, the parties hereto agree to the following:
<PAGE>
ARTICLE 1
Definition of Terms
As used herein:
1.1 "Affiliate" means any Person coming within the definition of
"affiliated interests" with respect to any Owner, and/or any Person who is an
affiliate of, or affiliated with, any Owner under the meaning of any provision
of the laws, rules or regulations of any state concerning the regulation of
public utilities, or under the Public Utility Holding Company Act to which the
Company or any Member is subject or by which the Company or any Member is bound.
1.2 "Application" means the Application of Contracting Owner
(consented to by NMC) before the Nuclear Regulatory Commission for consent to
the transfer of the Operating License and conforming amendments to the Operating
License so as to authorize and reflect in the Operating License the change from
Contracting Owner to NMC as the Co-licensee authorized to Operate the Plant, as
previously or hereafter supplemented or amended.
1.3 "Capital Improvements" means improvements, additions,
modifications or replacements of property at the Plant that are properly
capitalized and recorded on Contracting Owner's books of account as assets in
accordance with generally accepted accounting principles, and that are in
accordance with applicable rules and regulations of any regulatory or other
authority having jurisdiction in the matter.
1.4 "Co-licensee" shall mean, with respect to a nuclear power plant
for which the NRC has issued a license to own or possess to one person and a
license to use and operate to another person, each of such persons.
1.5 "Costs of Capital Improvements" means all costs of Capital
Improvements as defined in Section 1.3 herein.
1.6 "Costs of Operation" or "Cost of Operation" means all costs of
Operation, Decommissioning and any related fees, charges, or taxes incurred or
accrued under or with respect to this NPPOSA and attributable or allocable to
the Plant and properly recordable in expense accounts in accordance with
generally accepted accounting principles and applicable rules or regulations of
any regulatory or other authority having jurisdiction. These costs shall
include, without limitation, any costs incurred by NMC in connection with the
Operation of the Plant, including, but not limited to, the salaries and benefits
of NMC employees, the direct cost of contractors retained by NMC to work on or
for the Plant (except as such contractor cost may be included in Costs of
Capital Improvements), all administrative and overhead costs, and an allocable
portion of the return on and of the investment by NMC in capital items owned by
NMC used for NMC's operation or in connection with or in support of the
Operation of the Plant, based on a composite of the authorized overall pre-tax
capital returns of the Owners, and including the cost of inventory purchased by
NMC for Contracting Owner, but excluding amounts paid directly by Contracting
Owner for Nuclear Fuel that is owned by Contracting Owner or leased directly by
Contracting Owner from one or more third parties. For purposes of calculating
the outstanding investment of NMC in capital items, deferred income taxes
relative to such capital items recorded on the books of NMC Members shall be
considered. All of such Costs of Operation shall be calculated, and allocation
of such amounts shall be made, consistent with the principles and methodology
set forth in Exhibit A attached hereto and made a part hereof, as the parties
shall from time to time agree, and shall be made in accordance with any
applicable rules and regulations of the Securities and Exchange Commission under
the Public Utility Holding Company Act of 1935, the FERC under the Federal Power
Act and other regulatory authorities having jurisdiction in the matter.
1.7 "Decommission" means all activities associated with the
entombment, decontamination, dismantlement, removal, and disposal of the
structures, systems, and components of the Plant in compliance with the rules
and orders of the NRC and other regulatory authorities having jurisdiction in
the matter, including engineering and other planning activities to remove a
facility or site safely from service and reduce residual radioactivity to a
level that permits (1) release of the property for unrestricted use and
termination of the NRC license; or (2) release of the property under restricted
conditions and termination of the NRC license.
1.8 "Effective Date" means the effective date of this NPPOSA as
determined pursuant to Section 8.1.
1.9 "FERC" means the Federal Energy Regulatory Commission or its
successor.
1.10 "Force Majeure" shall have the meaning set forth in Section 13.9.
1.11 "Good Utility Practice" means any of the practices, methods and
acts engaged in or approved by a significant proportion of the electric utility
industry or, as appropriate, the domestic nuclear electric power industry, at
the time of the reference, 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 reliability, safety and expedition. Good
Utility Practice shall apply not only to functional parts of the Plant, but also
to appropriate structures, landscaping, signs, lighting and other facilities.
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 a spectrum of
prudent and acceptable practices, methods or acts.
1.12 "INPO" means the Institute of Nuclear Power Operations and any
successor organization.
1.13 "Market Price" means the generally prevailing price for similar
services or products in the region served by NMC.
1.14 "Member" means a person who is a member, as defined in Section
183.0102(5), Wis. Stats., of NMC.
1.15 "Misconduct" means any act or omission by or authorized by a
party's officers, persons reporting directly to such officers or its Board of
Directors that is performed, authorized or omitted consciously with prior actual
knowledge, or with reckless disregard of facts indicating, that such conduct or
omission is likely to result in actionable damages or injury to persons or
property or to result in a violation of laws or regulations.
1.16 "NMC's Business Plan for Plant" means a forward looking operating
plan including the three-year operating budget and five-year capital budget for
the Plant prepared by NMC, or, if requested by Contracting Owner, budgets
covering longer than (i) three years for operation, or (ii) five years for
capital.
1.17 "NMC Personnel" means NMC employees or contractors to NMC.
1.18 "NRC" or "Nuclear Regulatory Commission" means the United States
Nuclear Regulatory Commission or its successor having responsibility for
administration of the licensing and regulation of the operation of nuclear
utilization facilities under the Atomic Energy Act of 1954 and amendments
thereto.
1.19 "Nuclear Fuel" means any source, special nuclear or by-product
material as defined in the Atomic Energy Act of 1954 and any amendments thereto,
including any ores, mined or unmined, uranium concentrates, natural or enriched
uranium hexafluoride, or any other material in process containing uranium, and
any fuel assemblies or parts thereof, any of which are required for the
generation of electricity at the Plant.
1.20 "Operate" and its derivatives, including "Operator," "Operation,"
and "Operating," means to have physical control of, use, manage, control,
maintain, repair, operate and Decommission a nuclear power plant consistent with
the authority and responsibility as set forth in Section 2.1.
1.21 "Operating License" means the Facility Operating License No.
DPR-49, including Plant Technical Specifications and amendments thereto as
issued from time to time by the NRC.
1.22 "Operating Services" means the making of Capital Improvements,
Operation of the Plant and Decommissioning.
1.23 "Owner" means a person which: (a) owns an interest in a nuclear
power plant located in the United States; (b) if there is more than one person
who owns an interest in such nuclear power plant facility, is the person
designated as the "operator," "operating company" or "managing member" under the
applicable ownership agreement for such nuclear power plant facility; and (c) is
a Member or an Affiliate of a Member of NMC (other than solely by reason of the
relationship of such person and a Member with NMC).
1.24 "Plant Emergency Plan" shall mean a plan required to demonstrate
compliance with the standards described in 10 CFR 50.47 that defines readiness
requirements and emergency response actions intended to protect members of the
public, plant personnel, and plant equipment in the event of a radiological
emergency.
ARTICLE 2
NMC's Authority and Responsibility with Respect to Operation of the Plant
-------------------------------------------------------------------------
2.1 Authority for Operation.
-----------------------
(a) NMC and Contracting Owner agree that NMC shall act as the agent of
Contracting Owner to take all actions necessary to Operate the Plant and to make
Capital Improvements, each in accordance with Good Utility Practice, in the best
interest of Contracting Owner, and in compliance with all applicable laws,
regulations, the Operating License and other applicable licenses, and permits,
as well as the provisions of this NPPOSA. Contracting Owner hereby grants NMC
the authority to take any and all action, in Contracting Owner's name and on
Contracting Owner's behalf, necessary to obtain and/or maintain the Operating
License and all licenses and permits issued by the NRC or other regulatory
bodies relating to the Plant and necessary to comply with all applicable
regulations of the NRC and other governmental bodies having jurisdiction over
any aspect of the Cost of Operation, Cost of Capital Improvements, making of
Capital Improvements and/or Operation of the Plant.
(b) Without limiting the foregoing delegation, NMC shall act as the
agent for Contracting Owner in all matters related to the Operating License and
NRC regulation of the Plant. Furthermore, NMC shall provide Contracting Owner
with data and assistance as may be requested by Contracting Owner to enable
Contracting Owner to satisfactorily discharge, as Contracting Owner and
Co-licensee of the Plant, its responsibilities with regard to the Plant,
including its responsibilities to its securities holders, to regulatory
authorities and others.
(c) Notwithstanding any other provisions to the contrary in this
NPPOSA or any other agreement, on and after the Effective Date, NMC shall have
the sole authority, as the Operator of the Plant, to make all decisions relating
to public health, safety, and security, and is hereby exclusively authorized to
take such actions in the Operation of the Plant, including without limitation to
Operate the Plant at a reduced capacity or to place all or part of the Plant in
a safe shutdown condition at any time, as NMC in its sole discretion deems
necessary to protect the health, safety, and security of the public, including
the personnel engaged in the Operation and maintenance of the Plant, and to
protect the property at the Plant or to comply with the Operating License or
other requirements of the NRC, the Atomic Energy Act, or other applicable laws
or regulations. In order that NMC may meet such responsibility and implement
such authority, Contracting Owner shall provide NMC with financial resources in
accordance with the terms of this NPPOSA and shall otherwise cooperate with NMC
in meeting such responsibility and implementing such authority. NMC agrees to
seek the consent of Contracting Owner when time is available, or, in the event
of an emergency, to immediately notify Contracting Owner of any such actions
taken pursuant to this provision. All costs incurred by NMC in taking such
action relating to Operation at reduced capacity, shutdown of the Plant, or
Decommissioning shall be considered Costs of Operation or Costs of Capital
Improvements, as the case may be.
(d) Subject to the provisions of Sections 2.2 and 2.3 herein, in
order to enable NMC to fully and effectively perform its duties hereunder, NMC
shall have, and Contracting Owner does hereby grant to NMC, as agent for
Contracting Owner, the power and authority to exercise in accordance with
applicable laws, the rights of Contracting Owner under, and to execute, modify,
amend or terminate, any contracts, including, without limitation, leases,
easements, agreements, purchase orders, licenses, permits and privileges
relating to the Operation of, and making of Capital Improvements to, the Plant.
NMC shall and will cause NMC Personnel to comply with applicable
Contracting Owner policies, as may be amended from time to time, including,
without limitation, policies applicable to personnel granted unescorted access
to the Plant. Such policies are identified on Exhibit D attached hereto and made
a part hereof. NMC Personnel providing Operating Services under this NPPOSA
shall all be qualified by education, training, or experience, and shall be
capable of performing to industry and/or applicable professional standards. Such
NMC Personnel also shall meet all applicable requirements of the Operating
License, NRC, Plant Technical Specifications, and other applicable regulatory
requirements and commitments. Qualification of NMC Personnel shall be subject to
audit by Contracting Owner and NMC Personnel shall not engage in activities for
which they are not qualified. Contracting Owner shall have the right to approve
of, or request removal of, either or both of the highest ranking NMC employees
at the Plant, which generally shall be NMC Site Vice President and NMC Plant
Manager, provided that any such denial of approval or request for removal shall
be reasonably exercised.
The duties of Contracting Owner and NMC hereunder shall be subject in
all events to receipt of any further necessary consents or regulatory approvals.
Subject to NMC's obligations and responsibilities under this NPPOSA, the
Operating License and applicable laws and regulatory requirements, NMC agrees
that it shall comply with directions from Contracting Owner relating to the
Operation of, and making of Capital Improvements (including the costs thereof)
to, the Plant.
2.2 Limitation on NMC's Authority. Notwithstanding Section 2.1 above,
-----------------------------
except for such action pursuant to Section 2.1(c), NMC shall have no authority
under this NPPOSA, without the written approval (or verbal approval promptly
confirmed in writing) of Contracting Owner, to:
a) obligate Contracting Owner to pay Costs of Capital Improvements and
Costs of Operation that are either in excess of or materially different in scope
from the expenditures to be agreed upon pursuant to Section 5.1 herein,
b) obligate Contracting Owner, to pay Costs of Capital Improvements
that have not been approved in accordance with Contracting Owner's policy with
respect to Contracting Owner's Board of Directors' approval of capital
expenditures,
c) modify, amend or terminate any contracts executed by Contracting
Owner that are existing or were in effect prior to the Effective Date, and/or
d) sell, encumber or otherwise dispose of any real property or any
equipment or personal property comprising the Plant, provided that this
provision shall not apply to any equipment or personal property, as the case may
be, which is replaced in a timely fashion, by equipment which is of like kind
and of value at least equal to that of the disposed of equipment or personal
property.
In addition, Contracting Owner shall have exclusive authority to
define the economic life and to determine when the economic life of the Plant
has ended and, in its sole discretion, may direct NMC, in writing or verbally,
immediately confirmed in writing, to retire and Decommission the Plant or to
Operate the Plant at reduced capacity (except that written confirmation is not
required for dispatch orders in the normal course of business, unless
Contracting Owner's policies require such), and/or to place the Plant in a safe
shutdown condition. Contracting Owner shall have exclusive authority to
determine whether or not to amend the Operating License to extend the licensed
life of the Plant.
2.3 Form of NMC Purchases and Contracting Owner Review of
-----------------------------------------------------
Proposed Contracts. With respect to acquisitions by NMC, as agent for
- ------------------
Contracting Owner of Capital Improvements and other equipment or property,
including, but not limited to, materials, supplies and spare parts inventories,
for the Plant, Contracting Owner's Chief Financial Officer, or his or her
designee, shall provide NMC from time to time as necessary with instructions or
guidelines as to the preferred financial structure of such acquisitions (i.e.,
purchase, lease, etc.), with which NMC shall reasonably attempt to comply in
making such acquisitions. It is further agreed that the Chief Financial Officer
of Contracting Owner, or his or her designee, shall notify NMC in writing of the
contracts or types of contracts related to the Plant that are to be executed by
NMC, in its capacity as Contracting Owner's agent, that Contracting Owner
desires to review and approve prior to execution and/or to monitor thereafter.
Accordingly, NMC agrees to provide Contracting Owner copies of such contracts
within a reasonable time prior to NMC's proposed execution thereof.
2.4 Execution; Disclosures in Third-Party Contracts. Contracts
-----------------------------------------------
relating to the Operation of the Plant, including, without limitation, any
contracts for Capital Improvements or contracts for the sale, lease or
acquisition of materials, inventories, supplies, spare parts, equipment, fuel,
Nuclear Fuel (excluding contracts for the financing through lease or otherwise
for Nuclear Fuel) or services, shall be executed by NMC, as agent for
Contracting Owner or by Contracting Owner, upon NMC's reasonable request. If a
contract subject to Section 2.1 relates to both the Plant and one or more other
power plants that are Operated by NMC, such contracts ("Multi-Plant Contracts")
shall be executed by Contracting Owner at NMC's request, on reasonable grounds,
or by NMC, on reasonable grounds, on behalf of Contracting Owner, and the owners
of the other applicable plants. NMC further agrees that with respect to
Multi-Plant Contracts, NMC will not enter into such Multi-Plant Contracts
without the prior written consent of Contracting Owner unless such contract
contains a provision for several but not joint liability of the owners of the
plants under such Multi-Plant Contracts in proportion to the costs allocated to
the various power plants under such contracts.
Subject to the limitations in Section 2.2 and 2.3, above, in order to
induce third parties to contract with NMC with regard to the performance of
NMC's obligations under this NPPOSA, Contracting Owner hereby expressly agrees
to be bound by the terms of all contracts executed by NMC in accordance with its
agency authority as described herein (including, without limitation, any
provisions that limit or protect against a third party's liability, provisions
granting indemnity to third parties and limitations or exclusions of warranties)
to the same extent as if Contracting Owner were an original signatory to such
contract. In addition, if Contracting Owner's signature is deemed by NMC to be
necessary to induce a third party to contract with NMC, Contracting Owner agrees
to not unreasonably refuse to execute such third-party agreements as NMC may
request from time to time.
2.5 Enforcement of Rights.
---------------------
a) Contracting Owner hereby recognizes that, except with respect to
facts and circumstances existing, or litigation instituted by or against
Contracting Owner, prior to the Effective Date, NMC has complete and exclusive
authority with respect to the handling of the defense, prosecution and/or
settlement of disputes with third parties relating in any way to the Operation
of the Plant, provided that NMC shall obtain Contracting Owner's written consent
and direction prior to instituting or settling any lawsuit, claim, proceeding or
action relating to the Plant which is of a type categorized as material by
Contracting Owner, and Contracting Owner shall have the right to participate in
such material lawsuit, claim, proceeding or action or to institute such action
if NMC has not done so.
b) With respect to litigation relating in any way to the Plant that
arises out of facts or circumstances existing prior to the Effective Date,
Contracting Owner shall, after consultation with NMC, decide in its sole
judgment upon the appropriate manner of defending, prosecuting or settling such
litigation.
c) Except as to matters for which indemnification of NMC is not
applicable pursuant to Article 6, it is further agreed that to the extent NMC
incurs any liability to a third party in performing its duties under this
NPPOSA, amounts paid by NMC because of such liability and NMC's expenses in
defending claims by third parties or prosecuting claims against third parties
shall be considered Costs of Operation.
2.6 NMC's Responsibilities at Other Plants. NMC's duties and
--------------------------------------
responsibilities under this NPPOSA shall not be construed to interfere with
NMC's authority and responsibility to Operate any other plants for which it has
Operating responsibility. NMC agrees that it shall not knowingly take or fail to
take any action in connection with the Plant that is inconsistent with Good
Utility Practice or where such action or inaction would be reasonably expected
to put Contracting Owner or the Plant at a disadvantage to any other plant which
NMC Operates or to which it provides Operating Services, or which jeopardizes
the safety, integrity, or reliability of the Plant's Operations. NMC agrees that
in providing Operating Services under this NPPOSA, NMC will comply with all
applicable governmental rules and regulations regarding Contracting Owner's
Plant. If NMC believes it may not be able to fulfill its obligations under this
NPPOSA, it shall promptly notify Contracting Owner.
It is recognized that NMC is or shall be Operating multiple nuclear
power plants for Owners under agreements substantially similar to the NPPOSA.
NMC shall, consistent with Good Utility Practice, and in conformance with
applicable laws and regulations, facilitate the coordination of the outage
schedules of such nuclear power plants as agreed to by each such Owner,
recognizing that an Owner may also need to coordinate its nuclear power plant
outage with those of its other generating facilities, with other power plant
owners, with transmission system operators, or with regional reliability
organizations. NMC shall comply with any outage scheduled by Contracting Owner.
2.7 Transfer of Organization and Staff. On the Effective Date,
----------------------------------
Contracting Owner shall transfer substantially intact to NMC and, subject to
Section 3.7, NMC shall accept the Contracting Owner's on-site organization,
including Contracting Owner's employees and contractors (to the extent allowed
under the applicable agreements), responsible for licensed activities at the
Plant. Prior to the Effective Date, Contracting Owner and NMC shall in
cooperation take all measures necessary to effect such transfer without
disruption and as efficiently as possible. After the Effective Date, NMC shall
maintain such organization until such time as NMC in its sole discretion
determines that changes in the organization or personnel are appropriate. All
changes in NMC Personnel or in the assignments of NMC Personnel shall be in
accordance with all applicable laws and regulations and subject to the
provisions of the NPPOSA.
2.8 Membership and Participation in Industry Organizations. NMC
------------------------------------------------------
intends to be a member of INPO and is hereby authorized to participate in all
applicable INPO programs which will benefit the Plant, including programs
conducted by the National Academy for Nuclear Training. NMC is also authorized
to participate as Contracting Owner's agent or in lieu of Contracting Owner in
other industry groups which will benefit the Plant. As mutually agreed, NMC will
take the place of Contracting Owner in INPO, NEI, Westinghouse Owners' Groups,
and other similar groups. The costs of such membership and participation shall
be included in the Costs of Operation.
2.9 NMC Oversight. Contracting Owner understands that NMC may
-------------
establish a nuclear oversight function which may consist of a committee of NMC's
Board of Directors. Contracting Owner agrees to cooperate fully with such
nuclear oversight function and its staff members.
ARTICLE 3
Contracting Owner's Responsibility and Obligations
--------------------------------------------------
3.1 Payment. In consideration of the services rendered by NMC
-------
hereunder, and subject to the provisions of this NPPOSA, Contracting Owner
hereby agrees to pay the Costs of Operation and Costs of Capital Improvements
incurred by NMC pursuant to Article 5 hereof.
3.2 Site Access and Control. In order for NMC to Operate the
-----------------------
Plant in accordance with the Operating License and other applicable regulatory
requirements, Contracting Owner grants NMC unrestricted access to and the
exclusive right to use and control the use of the property constituting the
Plant, including, without limitation, the real property and the switchyard (or
substation), facilities, equipment and personal property located on the Plant
site, and to determine all activities within the site boundary of the Plant. As
required by or provided in the Operating License and applicable statutes and NRC
regulations, Contracting Owner grants NMC unrestricted access to and the
exclusive right to use and exercise control over the Exclusion Area, as defined
in the Final Safety Analysis Report for the Plant, as may be updated and amended
from time to time.
The parties understand that Contracting Owner is, may or may be
required to, become a member of an independent transmission system owner or
operator or other similar entity which may operate and have control over
Contracting Owner's electric transmission facilities, which may include all or a
portion of the Plant switchyard (or substation). Contracting Owner shall obtain
the agreement of any such entity to provide NMC such access to and control of
the Plant switchyard (or substation) as will meet NRC requirements or
Contracting Owner's licensing basis commitments.
Contracting Owner shall notify NMC of any proposed conditions on
access to or control of the Plant switchyard (or substation) or on the Operation
of the Plant as may be suggested or proposed by an independent transmission
system owner or operator and shall allow NMC to review and provide input.
3.3 Compliance With Operating License and Regulations. Contracting
-------------------------------------------------
Owner shall be and remain in compliance with the Operating License and all
licenses, statutes, and regulations which pertain to or affect its ownership of
the Plant or the Operation of the Plant by NMC, including, without limitation,
maintaining compliance with the licensing basis of the Plant and funding and
maintaining the Plant's Decommissioning Trust Funds in accordance with
applicable NRC regulations and other state and federal requirements.
3.4 Support Services from Contracting Owner. Contracting Owner agrees
---------------------------------------
that it will cooperate with NMC in a manner so that NMC may exercise its
authority and fulfill its responsibilities pursuant to this NPPOSA. In this
connection, Contracting Owner further agrees to provide or cause another entity
to provide (1) the Plant switchyard, substation, switching station, and
transmission line services and other support in accordance with a separate
agreement to be executed by the parties contemporaneously with the execution of
this NPPOSA, a form of which is attached hereto as Exhibit B, as such agreement
may be hereafter supplemented or amended, (2) support for the Plant Emergency
Plan and emergency training, drills, and exercises in accordance with a separate
agreement to be executed by the parties contemporaneously with the execution of
this NPPOSA, a form of which is attached hereto as Exhibit C, as such agreement
may be hereafter supplemented or amended.
Contracting Owner agrees to provide, subject to their reasonable
capability and availability, additional services or assistance required by NMC
and agreed to by Contracting Owner in writing in connection with the Operation
of the Plant, including, without limitation, the following: (1) communications
access and support, (2) transportation support, (3) payroll and personnel
assistance, and (4) other services as may be required in order to allow NMC to
conduct safe, economic and efficient Operations at the Plant. NMC agrees to pay
Contracting Owner to the extent such additional services or assistance are used
to provide services to any other Owner.
3.5 No Changes to Facilities, Procedures or Practices. So that NMC
-------------------------------------------------
will be capable of Operating the Plant in accordance with the Operating License
and other applicable regulatory requirements, Contracting Owner agrees that it
will not make, and shall obtain commitments from any future independent
transmission system owner or operator or other similar entity, as applicable,
that it will not make, any changes to facilities, procedures or practices that
affect compliance with NRC regulations or commitments, including, but not
limited to, physical changes to the electrical transmission or distribution
facilities that directly provide an off-site power supply to the Plant without
prior consultation with and written consent from NMC, which consent NMC shall
not unreasonably withhold.
3.6 Off-Site Power Supply. Contracting Owner agrees that at its own
---------------------
cost it shall provide the Plant with an assured source of off-site power,
sufficient to meet the requirements of the Operating License and NRC
regulations, in accordance with procedures to be agreed upon, from time to time,
by the parties.
3.7 Contracting Owner's Represented Employees. Contracting Owner may
-----------------------------------------
have employees at the Plant who may be represented by one or more labor unions,
which employees may not be NMC employees. In such event, Contracting Owner shall
place such employees under the supervision of NMC; however, such employees shall
remain employees of Contracting Owner. The Contracting Owner hereby designates
NMC and its supervisory/management employees as its agents to direct and
supervise the work of its bargaining unit employees at the Plant. NMC and
Contracting Owner agree to cooperate in the resolution of disputes under the
Labor Agreement(s). Contracting Owner shall identify to NMC the types of labor
disputes for which notice shall be given to Contracting Owner prior to
resolution. NMC shall be responsible for complying with NRC regulations
regarding Contracting Owner's employees including, but not limited to,
maintaining a safety conscious work environment and an employee concerns
program.
Contracting Owner shall keep NMC informed of the progress of any
grievances, disciplinary action or proceeding involving a represented employee
of Contracting Owner at the Plant, and shall also keep NMC informed of the
status of labor negotiations involving Contracting Owner's bargaining unit
employees at the Plant. Any change in costs in Plant Operations due to
Contracting Owner's agreed-upon changes to a Labor Agreement or to a new Labor
Agreement shall be immediately reflected in a corresponding change to the
approved annual budget.
ARTICLE 4
Ownership of Capacity and Energy
--------------------------------
4.1 Ownership of Capacity and Energy. Contracting Owner at all times
--------------------------------
during the term of this NPPOSA, shall be and remain the owner of, and shall be
entitled to all of, the capacity and energy from the Plant.
4.2 Determination of Output. Contracting Owner shall at all times,
-----------------------
subject to NMC's obligations under Article 2, determine the electric output from
the Plant. "Net Positive Output" of the Plant shall be the gross electric power
generation of the Plant, less station service requirements, and less adjustments
for losses experienced. In the event the Net Positive Output is negative (i.e.,
station service and losses exceed the gross generation), Contracting Owner shall
be responsible for providing necessary power at the Plant during such period in
accordance with Good Utility Practice and Section 3.6 herein.
ARTICLE 5
Payment, Audit and Inspection Rights
------------------------------------
5.1 Payment Obligation. On or before July 15 (or such other dates
------------------
as may be agreed to by the parties) of each year during the term of this NPPOSA,
(1) NMC will submit for Contracting Owner's review and approval the total
proposed annual budget for the Plant for the following year, which shall consist
of the annual operating and capital programs (as used herein the term "annual
operating and capital programs" shall include details of the budgeted costs for
those programs) for the Plant, and NMC's Business Plan for Plant, and (2) NMC
and Contracting Owner, within 90 days after such submittal, will agree in
writing upon the annual budget for the following budget year and NMC's Business
Plan for Plant. Subject to the provisions of this Section 5.1, the annual
operating and capital programs portion of the budget shall constitute a cap
respectively on the (i) Costs of Operation and (ii) Costs of Capital
Improvements. Should the Contracting Owner and NMC fail to reach agreement on
the annual budget, the amount for annual operating programs for such year, and
the capital programs budget for such year shall be the amounts for such year as
contained in the latest agreed upon NMC Business Plan for Plant, increased as
necessary to complete capital projects in progress at the beginning of such year
(subject to cancellation of the project by Contracting Owner) and the cost of
any capital projects which NMC certifies are required for the safe Operation of
the Plant, unless Contracting Owner has decided the Plant is to be permanently
shut down prior to such budget year.
Contracting Owner and NMC recognize that mutually agreeable
adjustments may be made to the previously approved annual budget, or the
components of NMC's Business Plan for Plant, from time to time during any budget
year, to reflect the impact of Force Majeure, unforeseen circumstances,
financial constraints or other events. Any such agreements must be in writing
and executed by the Contracting Owner and NMC.
NMC shall provide, on or before the fifth working day of each month, a
report of actual expenditures charged or allocated directly to Contracting Owner
in the preceding month. NMC shall provide, on or before the tenth working day of
each month, a comparison of such actual expenditures and the budget submitted by
NMC and approved by the Contracting Owner for the previous month. NMC shall
provide, on a monthly basis, a report showing year to date expenditures and
shall provide forecasts of expenditures over the remainder of the year. Each
monthly report shall address the specific month and year-to-date expenditures
and shall provide forecasts of expenditures over the remainder of the year. NMC
shall specifically identify any areas in which expenditures are, or are
forecasted by the end of the year to be, more than five percent over or under
budget and to identify any types of expenditures which differ, or are forecast
to differ, materially from the types of expenditures in the approved budget. It
is further agreed that NMC will keep Contracting Owner timely informed of costs
and obtain Contracting Owner's approval regarding projects which are reasonably
anticipated to cause a material change to the components of the then-current NMC
Business Plan for Plant as previously approved by Contracting Owner.
Without limiting Contracting Owner's obligations under Article 6,
Contracting Owner agrees to pay any and all Costs of Operation and Costs of
Capital Improvements. Based on NMC's monthly financial reports or on such other
information which leads Contracting Owner to reasonably conclude that either the
Costs of Capital Improvement will exceed by more than five percent the annual
capital programs portion of the approved annual budget or that the Costs of
Operation will exceed by more than five percent the annual operating portion of
the approved annual budget, Contracting Owner may notify and direct NMC to
limit, control, or modify its expenditures so as to not exceed 105 percent of
the approved annual budget. NMC agrees to use best efforts, consistent with
safety and the timing of such notice and direction from Contracting Owner, to
limit its expenditures to no more than 105 percent of the approved annual budget
in a manner which has the least effect on the Net Positive Output of the Plant.
Should NMC fail to so limit its expenditures following notice and direction from
Contracting Owner, despite having adequate time to do so, NMC's actions or
inactions shall be deemed to constitute Misconduct.
The parties recognize that the date upon which this NPPOSA becomes
effective may occur at a time which is inconsistent with the annual budget
submission, review, and approval dates described above. In such event, the
parties agree to use best efforts to arrive at an annual budget prior to the
beginning of the first year and also agree that for the remainder of the year in
which the NPPOSA becomes effective, NMC shall adopt the Contracting Owner's
budget. Also, during the initial period of its Operation of the Plant, it is
understood that NMC may not have developed its own Business Plan for the Plant,
and in such event, NMC shall use applicable plans prepared by Contracting Owner.
5.2 Payment and Billing. Subject to Section 5.1 above and in
-------------------
accordance with procedures to be agreed upon in writing by the parties, NMC
hereby agrees to furnish Contracting Owner, at such times as may be required by
Contracting Owner, estimates of the Costs of Operation and Costs of Capital
Improvements expected to be owed for the next succeeding period. Contracting
Owner shall promptly deposit in the bank account(s) to be established pursuant
to Section 5.3 such funds as the parties determine from time to time is
necessary to pay NMC and third parties on a timely basis with respect to Costs
of Capital Improvements and Costs of Operation. Payments of the Costs of Capital
Improvements and Costs of Operation specified herein shall be made
notwithstanding the availability or lack of availability of the Plant to produce
power. No payment made pursuant to this Operating Agreement shall constitute a
waiver of any right of Contracting Owner to question or contest the correctness
of Costs of Capital Improvements and Costs of Operation charged hereunder.
The Costs of Capital Improvements and Costs of Operation billed to
Contracting Owner by NMC shall be based upon the actual costs incurred by NMC.
Contracting Owner and NMC agree that NMC's actual costs shall be deemed to be
the Market Price.
5.3 Bank Accounts. The parties agree that one or more special bank
-------------
accounts may be established and maintained in one or more banks of Contracting
Owner's choice, in a manner that will indicate the custodial nature of the
accounts, for the deposit by Contracting Owner and disbursement by NMC or
Contracting Owner of Costs of Capital Improvements and Costs of Operation.
5.4 Financial Audit and Adjustments. NMC shall maintain books and
-------------------------------
records to support the Costs of Capital Improvements and Costs of Operation for
such period of time as Contracting Owner shall direct. From time to time,
Contracting Owner may, and NMC shall permit, at Contracting Owner's option and
expense as appropriate (in accordance with any applicable established auditing
policies agreed upon by the parties), conduct or cause to be conducted by
others, including regulatory authorities having jurisdiction, audits of the
books and records of NMC. Such audits shall be conducted at reasonable mutually
agreed upon times, with agreement not being unreasonably withheld. Further, NMC
shall make available to Contracting Owner a copy of any audit reports prepared
by or at the request of NMC concerning its books and records relating to the
Operation of the Plant, and the cost of preparing such audit reports shall be a
Cost of Operation payable pursuant to this Article 5. NMC, at least annually,
shall credit Contracting Owner with recoveries, whenever received, from third
parties and shall charge or credit Contracting Owner with any underpayments or
overpayments of Costs of Capital Improvements and Costs of Operation, as the
case may be. Force Majeure shall not excuse failure by NMC to credit Contracting
Owner with third-party recoveries or overpayments of Costs of Capital
Improvements and Costs of Operation owing to Contracting Owner at any time.
ARTICLE 6
Warranties, Remedies, Limitations on Liability, and Indemnification
-------------------------------------------------------------------
6.1 Exclusive Warranties and Remedies. NMC shall provide qualified and
---------------------------------
experienced personnel to perform its obligations pursuant to this NPPOSA. Names
and backgrounds of personnel providing Services shall be provided to Contracting
Owner upon request. All Operating Services provided by NMC hereunder shall be
performed in a professional and competent manner consistent with Good Utility
Practice. If any Operating Services provided by NMC to Contracting Owner fail to
conform to this standard, NMC shall, at the option of Contracting Owner, either
correct or reperform such deficient Operating Services at Contracting Owner's
sole cost, and such reperformance or correction shall be the sole and exclusive
remedy available to Contracting Owner hereunder for defective performance,
regardless of whether any claims are based on negligence, breach of warranty,
breach of contract, tort, strict liability or any other legal theory, except for
Misconduct as provided in Section 6.2.
THE WARRANTIES SET FORTH IN THIS SECTION 6.1 CONSTITUTE THE SOLE AND
EXCLUSIVE WARRANTIES MADE TO CONTRACTING OWNER AND ARE IN LIEU OF ALL OTHER
WARRANTIES OF ANY KIND, WHETHER STATUTORY, EXPRESS OR IMPLIED, INCLUDING ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ALL
WARRANTIES ARISING FROM ANY COURSE OF DEALING OR USAGE OF TRADE.
6.2 Waiver and Disclaimer of Damages. Contracting Owner expressly
--------------------------------
agrees and acknowledges that NMC, its Members, and any officers, directors or
employees of NMC or its Members shall not be liable to Contracting Owner for any
expenses, losses, liabilities, or damages of any kind whatsoever arising out of
the performance of this NPPOSA, including direct, indirect, punitive, special or
consequential damages, economic losses, lost profits, cost of replacement power,
cost of capital, or as a result of fines or penalties imposed by the NRC or
other governmental authority, even if NMC has been notified of the possibility
of such damages or losses and regardless of whether such damages, losses, or
costs are based upon NMC's negligence, breach of warranty, tort, strict
liability or any other legal theory, except (a) for direct damages resulting
from the Misconduct of NMC, (provided that NMC shall not be liable for direct
damages that are covered under the insurance which Section 7.2 requires
Contracting Owner to have in place), or (b) if NMC breaches its obligation to
pay Contracting Owner for resources provided pursuant to Section 3.4,
Contracting Owner may recover such amounts with interest (determined based on
Contracting Owner's pre-tax cost of capital).
6.3 Indemnity. Contracting Owner hereby agrees to indemnify and hold
---------
harmless NMC, its Members, and any officers, directors, employees and agents of
NMC and its Members to the fullest extent permitted by applicable law, from the
payment of any sum or sums of money to Contracting Owner or any third party on
account of, or resulting from, actions, claims, expenses, losses, liabilities or
damages of any kind whatsoever, and regardless of whether based upon NMC's
negligence, breach of warranty, breach of contract, tort, strict liability or
any other legal or equitable theory in connection with or related to any claim
brought by any third party in connection with Operating Services provided by or
through NMC pursuant to this NPPOSA; provided, however, that the indemnity
obligation of Contracting Owner shall not apply to:
(a) any failure of NMC to make appropriate federal and state
employment tax withholding and contributions as may be required; or
(b) any claims for personal injuries suffered by NMC employees to the
extent such personal injuries are covered by the proceeds of the workers'
compensation policy required to be maintained by NMC; or
(c) any other claims to the extent covered by insurance proceeds of
either party.
(d) direct damages resulting from the Misconduct of NMC, except as are
covered under the types of insurance which Section 7.2 requires Contracting
Owner to have in place, whether or not such insurance is sufficient to cover the
damages.
6.4 Survival. The provisions of this Article 6 shall specifically
--------
survive the expiration or termination of this NPPOSA for any reason.
ARTICLE 7
Insurance and Nuclear Liability Protection
------------------------------------------
7.1 NMC Insurance. NMC shall obtain and maintain in full force and
-------------
effect, the following insurance coverages, or its equivalent satisfactory to
Contracting Owner, with minimum limits as indicated, (which may also be revised
to reasonable amounts consistent with similar industry practice at the
Contracting Owner's discretion from time to time) at all times during the term
of this NPPOSA and beyond, as required.
(a) NMC shall maintain worker's compensation and employer's
liability insurance as required by appropriate state law.
(b) NMC shall maintain commercial general liability (CGL)
insurance (or its equivalent satisfactory to Contracting
Owner) and, if necessary, commercial umbrella or excess
insurance with a total limit of not less than $2,000,000
each occurrence. Contracting Owner shall be included as an
additional insured under the CGL insurance.
(c) NMC shall maintain automobile liability insurance (or its
equivalent satisfactory to Contracting Owner) and, if
necessary, commercial umbrella or excess liability insurance
with a combined single limit (or equivalent) of not less
than $2,000,000 each accident. Contracting Owner shall be
included as an additional insured.
(d) NMC waives all rights against Contracting Owner and its
agents, officers, directors, and employees for recovery of
damages to the extent these damages are covered by any of
the insurance required above.
NMC shall furnish the Contracting Owner with duly executed
Certificates of Insurance certifying that such insurance has been provided and
that the insurance companies will give the Contracting Owner thirty (30) days
prior written notice of any material change in, or cancellation of, such
insurance coverage. Such certificate shall also specify the dates when such
insurance commences and expires. Certificates should be delivered to the
Contracting Owner pursuant to Section 13.5.
NMC agrees that such insurance shall be maintained throughout the
entire term of this Agreement and beyond, as required. The cost of all insurance
procured by NMC, including, without limitation, any deferred or retrospective
premium assessments, shall be included in the Costs of Operation.
7.2 Contracting Owner Insurance. At no cost to NMC, Contracting
---------------------------
Owner will maintain or cause to be maintained nuclear liability financial
protection, nuclear decontamination and property damage insurance, and
government indemnification of nuclear liability arising from the operation and
maintenance of the Plant, in forms and amounts required by the NRC or other
regulatory bodies. NMC shall be a named insured on such insurance and
indemnification unless such insurance or indemnification provides coverage to
all persons held legally liable. Contracting Owner shall require its insurers to
waive all right of subrogation against NMC and its subcontractors, regardless of
fault, for all claims, including, without limitation, decontamination of,
physical damage to, or loss or destruction of any property at the location of
the Plant as defined in the decontamination and property damage insurance policy
for the Plant, and, if Contracting Owner obtains and maintains insurance for the
cost of replacement power, for all costs of replacement power. Contracting Owner
further hereby waives rights of recovery, including any right to which another
may be subrogated, for decontamination of, physical damage to, or loss or
destruction of any property at the location of the Plant as is or may be insured
under its decontamination and property damage insurance policies arising
directly or indirectly out of Operating Services provided pursuant to this
NPPOSA.
7.3 Notice of Claim. NMC shall promptly inform Contracting Owner in
---------------
writing of every employee's workers compensation or tort liability claim for
bodily injury, including, but not limited to these, allegedly caused by a
nuclear energy hazard arising out of the nuclear facility, or in the course of
transporting nuclear material to or from the nuclear facility.
NMC's written notice shall provide:
1. Name and address of claimant;
2. Time and place of alleged exposure to nuclear energy hazard, if
known; and
3. Description of alleged bodily injury.
7.4 Insurance Renewal. NMC and Contracting Owner will cooperate fully
-----------------
in the renewal and administration of the Contracting Owner's insurance program
as it relates to the Plant and NMC's insurance program relating to the Plant. At
the direction of Contracting Owner, NMC will establish necessary procedures,
cooperate with the insurers and otherwise comply with requirements of the
insurers.
ARTICLE 8
Term and Termination
--------------------
8.1 Term. This NPPOSA shall become effective on the earlier of a
----
date mutually agreed upon by Contracting Owner and NMC, and the first day of the
month beginning more than 120 days following (i) receipt of all necessary
regulatory approvals, each of which, in the sole determination of Contracting
Owner, does not contain unacceptable terms or conditions or which cause or would
cause this NPPOSA to be modified in any way unacceptable to Contracting Owner,
and (ii) receipt of all necessary regulatory approvals, each of which, in the
sole determination of Contracting Owner, does not contain unacceptable terms or
conditions or which cause or would cause or require this NPPOSA to be modified
in any way unacceptable to Contracting Owner, applicable to one or more nuclear
power plants owned by one or more different Members of NMC (other than
Contracting Owner) or an Affiliate of such Member pursuant to which NMC shall
also be named as the licensed Operator of such other plant. Unless sooner
terminated as provided hereinafter, this NPPOSA shall remain in effect, subject
to Section 8.2 below, until the Plant shall have been retired and Decommissioned
in accordance with all applicable regulatory and governmental requirements and
the parties hereto agree in writing, with agreement not to be unreasonably
withheld, that all responsibilities hereunder have been fulfilled.
8.2 Termination Without Cause. Contracting Owner may terminate this
-------------------------
NPPOSA without cause by providing NMC with written notice of intent to terminate
at the end of one full calendar year following the date of notification.
Termination shall occur on the later of the date one full year after the date of
notification and the expiration of a reasonable transition period to allow
Contracting Owner to engage another operator for the Plant or to resume
operational control itself, including time for any regulatory approvals and
license transfers. Upon such termination, Contracting Owner shall pay to NMC any
Costs of Capital Improvements and Costs of Operation incurred prior to the
effective date of termination, as well as an "exit fee" which shall consist of
the net present value of (a) the stream of future payments related to
depreciation and/or amortization of capital investments, return on such capital
investments, and/or leases relating to NMC infrastructure as allocated to
Contracting Owner based upon the Composite Allocator under Exhibit A then in
effect, and (b) the stream of future payments related to depreciation or
amortization of capital investments, and return thereon, made and owned by NMC
for the benefit of the Plant and the nuclear generating facilities of one or
more other Owners, as allocable to Contracting Owner. The discount factor for
the present value calculation shall be the composite after-tax cost of capital
of the Owners, as of the date of termination. The composite after-tax cost of
capital shall be developed by using the composite pre-tax cost of capital most
recently authorized by the state utility regulatory authority in which each of
the Owners' nuclear power plants are located, but adjusted for federal income
taxes based on the current maximum marginal tax rate and a uniform state
effective income tax rate of 5%. Any "exit fees" paid to NMC shall be treated as
an offset to the related capital investments for purposes of calculating future
charges for depreciation/amortization and the return thereon to the other
Owners.
8.3 Termination Because of Governmental or Judicial Acts. If any
----------------------------------------------------
term or provision of this NPPOSA should be declared invalid or unenforceable by
a court of competent jurisdiction or by other governmental or regulatory action
or policy or if performance hereof by either party is prohibited or
substantially impaired by an order of a regulatory or governmental body having
jurisdiction, the parties agree that, to the extent practical, they will
renegotiate this NPPOSA in good faith to permit this NPPOSA to be performed or
the terms to be implemented as close as possible to the original intent and in a
manner that will be consistent with applicable laws, regulations, and court or
regulatory agency rulings. However, if such renegotiation is not possible or
practical, or the parties cannot reach agreement on the terms of the revised
agreement, either party may terminate this NPPOSA effective upon written notice
to the other party and the expiration of a reasonable transition period to allow
Contracting Owner to engage another operator for the Plant or to resume
operational control itself, including time for any regulatory approvals and
license transfers. Any such termination, however, shall not relieve a party from
its obligation to pay for Operating Services provided, incurred or committed to
prior to the date of termination.
8.4 Termination For Cause. Either party may terminate this NPPOSA if
---------------------
the other party commits a "material breach" of its obligations under this
NPPOSA, provided that the terminating party must first provide written notice of
the "material breach" as defined herein and must allow the other party at least
60 days to cure or provide a remedy for any such "material breach." If after the
applicable cure period, the "material breach" has not been remedied or if the
parties agree in writing that a longer period of time is to be allowed to remedy
such "material breach," then if it is not corrected within such reasonable time
as may be agreed upon by the parties, this NPPOSA may be terminated effective
upon written notice of termination and the expiration of a reasonable transition
period to allow Contracting Owner to engage another operator for the Plant or to
resume operational control itself, including time for any regulatory approvals
and license transfers.
Upon termination of this NPPOSA by NMC due to a material breach by
Contracting Owner, Contracting Owner shall pay to NMC any Costs of Capital
Improvements and Costs of Operation incurred prior to the effective date of
termination, as well as an "exit fee" which shall consist of the net present
value of (a) the stream of future payments related to depreciation and/or
amortization of capital investments, return on such capital investments, and/or
leases relating to NMC infrastructure as allocated to Contracting Owner based
upon the Composite Allocator under Exhibit A then in effect, and (b) the stream
of future payments related to depreciation or amortization of capital
investments, and return thereon, made and owned by NMC for the benefit of the
Plant and the nuclear generating facilities of one or more other Owners, as
allocable to Contracting Owner. The discount factor for the present value
calculation shall be the composite after-tax cost of capital of the Owners, as
of the date of termination. The composite after-tax cost of capital shall be
developed by using the composite pre-tax cost of capital most recently
authorized by the state utility regulatory authority in which each of the
Owners' nuclear power plants are located, but adjusted for federal income taxes
based on the current maximum marginal tax rate and a uniform state effective
income tax rate of 5%. Any "exit fees" paid to NMC shall be treated as an offset
to the related capital investments for purposes of calculating future charges
for depreciation/amortization and the return thereon to the other Owners.
For purposes of this NPPOSA, the term "material breach" shall mean the
following:
(a) the failure of either party to make any payment required to
be made in accordance with the terms hereof; or
(b) the failure of either party to perform, keep or fulfill any
other material undertakings, obligations or conditions set forth in this NPPOSA,
including without limitation, the obligations of the parties regarding
compliance with applicable Contracting Owner policies, record-keeping
requirements, insurance and indemnification requirements, confidentiality
requirements, representations, and warranties.
8.5 Mutual Agreement. This NPPOSA shall be terminated at any time and
----------------
for any reason if mutually agreed upon in writing by duly authorized
representatives of both parties.
8.6 Transition and Survival. Prior to termination for any reason, the
-----------------------
parties shall work in good faith to insure a satisfactory transfer of
responsibility and work in process and obtaining approval from any regulatory
agency or judicial or governmental body if required for such transfer. NMC
agrees that the Operating License and any and all licenses, permits, records,
books, privileges or rights acquired by NMC relating to Operation of the Plant
shall be assigned or otherwise transferred to Contracting Owner upon termination
of this NPPOSA. The indemnification, release, and limitation of liability
provisions contained in Article 8 shall survive termination to the extent they
pertain to events giving rise to such indemnification, release and liability
that occurred during the term of this NPPOSA.
8.7 NMC Employee Severance. In the event that NMC terminates an
----------------------
employee that was formerly an employee of the Contracting Owner for any reason
during the first 36 months following the effectiveness of the NPPOSA, except if
the termination or cause thereof would not qualify the employee for severance
pay under the Contracting Owner's then existing severance plan, then Contracting
Owner shall pay to NMC a Severance Amount for each NMC employee which NMC
terminates from its employ, except if Contracting Owner offers such employee a
comparable job to that which he/she had with NMC. The Severance Amount shall be
based on Contracting Owner's then current severance policy with respect to its
own employees who qualify for a severance payment, giving credit to the NMC
employee under such severance policy for time worked for both Contracting Owner
and NMC. Such severance payment shall be the sole charge to Contracting Owner
for NMC employee severance due to termination of employees in the 36-month
period. NMC shall pay such Severance Amount to the severed employee and any such
employee is intended to be a third party beneficiary of this provision of the
NPPOSA.
Should NMC terminate an employee who has provided Operating Services
to the Plant after the first 36 months following the effectiveness of this
NPPOSA, the provisions of NMC's severance policy, if any, shall apply and
Contracting Owner shall bear its allocated share of any severance payments based
on the amount such NMC employee's time was allocated to the Plant compared to
such employee's total time employed by NMC.
ARTICLE 9
Compliance with Laws, Regulations and Site Requirements
-------------------------------------------------------
9.1 General. Both parties shall observe and comply with all
-------
applicable Plant health, safety and security rules, programs or procedures and
shall abide by all applicable laws, federal, state and local and the rules and
regulations of any lawful regulatory body in connection with Services provided
pursuant to this NPPOSA.
9.2 Energy Reorganization Act. Without limiting the generality of
-------------------------
Section 9.1 above, both parties specifically agree to comply with Section 211 of
the Energy Reorganization Act of 1974, as amended (the "Act"), that prohibits
NRC licensees and their contractors and subcontractors from discharging or
otherwise discriminating against any employee engaging in protected activities
described in the Act. If either party's employees, agents, subcontractors or
suppliers makes any allegations or files a complaint with the Department of
Labor pursuant to the provisions of Section 211 of the Act and if such
allegation or complaint is made either directly or indirectly in connection with
Operating Services performed pursuant to this NPPOSA, then the party first
obtaining knowledge or receiving notice of such allegation or complaint shall
promptly notify the other party of the complaint and the parties shall keep each
other advised as to all significant developments regarding such allegation or
complaint. Both parties further agree that neither party will enter into any
agreement affecting compensation, terms, conditions and privileges of
employment, including any agreement to settle any claim, allegation or complaint
filed by an employee with the Department of Labor pursuant to Section 211 of the
Act that contains any provisions prohibiting or otherwise discouraging an
employee from providing the NRC with information on hazardous conditions,
potential violations or any other matters within the NRC's regulatory
responsibilities.
ARTICLE 10
Representations and Warranties
------------------------------
10.1 Representations of NMC. NMC hereby represents and warrants to
----------------------
Contracting Owner as follows:
(a) NMC is a limited liability company, duly organized under the
laws of the State of Wisconsin.
(b) NMC has taken all action necessary to enter into this NPPOSA
and to perform its obligations hereunder.
(c) This NPPOSA has been duly authorized, executed and delivered
and constitutes the valid and binding obligation of NMC, enforceable against NMC
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium and other similar laws affecting the rights
of creditors generally and as may be set forth on Exhibit E hereto.
(d) The execution and delivery of this NPPOSA and the performance
by NMC of its obligations hereunder will not violate any contract to which NMC
or any of its Members or their Affiliates is a party, or any law, order,
judgment or decree of any federal, state or local court, or require any
regulatory approval, except as set forth on Exhibit E hereto.
(e) Except as may be set forth on Exhibit E hereto, there are no
actions, suits, or proceedings pending or threatened against NMC before any
federal, state, local or other governmental department, regulatory agency or
judicial body that would, if decided adversely have a material adverse affect on
NMC, its business or its ability to perform this NPPOSA.
10.2 Representations of Contracting Owner. Contracting Owner
------------------------------------
represents and warrants to NMC as follows:
(a) Contracting Owner is a corporate body, duly organized and
existing under the laws of Iowa.
(b) Contracting Owner has taken all corporate action necessary to
enter into this NPPOSA, to perform its obligations hereunder and to consummate
the transactions contemplated by this NPPOSA including, for multiple owner
plants, that Contracting Owner has all necessary authority under the Plant's
ownership agreement to execute this NPPOSA.
(c) This NPPOSA has been duly executed and delivered by
Contracting Owner and constitutes the valid and binding obligation of
Contracting Owner, enforceable against Contracting Owner in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
moratorium and other similar laws affecting the rights of creditors generally
and as may be set forth on Exhibit E hereto.
(d) The execution and delivery of this NPPOSA, the performance by
Contracting Owner of its obligations hereunder will not violate any contract or
agreement to which Contracting Owner or any of its affiliates is a party or any
law, order, judgment or decree of any federal, state or local court or require
any regulatory approval, except as set forth on Exhibit E hereto.
(e) Except as set forth on Exhibit E hereto, there are no
actions, suits or proceedings pending or threatened against Contracting Owner or
its Affiliates before any federal, state, municipal or any other governmental
department, regulatory agency or judicial body that would if decided adversely
have a material adverse affect on Contracting Owner, its business or its ability
to perform this NPPOSA.
ARTICLE 11
Contracting Owner's Performance Oversight
-----------------------------------------
Notwithstanding anything in this NPPOSA to the contrary,
Contracting Owner, its agents, employees, independent contractors, members of
its Board of Directors, subcommittees, or special committees of its Board of
Directors:
(a) May at all reasonable times have access to the Plant and such
of NMC's employees Operating or supporting the Operation of the Plant (whether
located at the Plant or another location) as Contracting Owner, its agents,
employees, independent contractors, members of its Board of Directors,
subcommittees, or special committees of its Board of Directors deem necessary or
desirable for the purpose of reviewing or auditing the Operation of the Plant;
(b) Shall have the right of access to and copies of any and all
reports or evaluations, whether or not deemed confidential by the preparer,
concerning the Plant or its Operations prepared by or for NMC or others,
including, but not limited to, the NRC, INPO, American Nuclear Insurers, or
Nuclear Electric Insurance Limited.
(c) Shall have the right to be present at and participate in all
meetings, inspections, exit interviews, and other interactions by and between
NMC and regulatory or other entities such as, but not limited to, the NRC, INPO,
American Nuclear Insurers, or Nuclear Electric Insurance Limited, concerning or
related to the Operation of the Plant.
Should Contracting Owner, in its sole judgment, have concerns over NMC's past,
present, or future Operation of the Plant or the Plant's performance,
Contracting Owner shall have the right to raise such concern with NMC, NMC staff
responsible for Operating the Plant, or directly with NMC's Board of Directors.
Contracting Owner may raise its concerns either verbally or in writing, except
if such concerns are raised with NMC's Board of Directors, they shall be in
writing addressed to Secretary, NMC, with a copy to the President, NMC. Upon
receipt of Contracting Owner's concerns, NMC shall respond promptly, addressing
each concern, stating its agreement or disagreement, and if NMC agrees a concern
is valid, identifying how NMC will address the concern to the satisfaction of
Contracting Owner.
ARTICLE 12
Confidentiality
---------------
12.1 Nondisclosure. In order for NMC to carry out this NPPOSA,
-------------
Contracting Owner may need to share confidential and proprietary business
information with NMC but shall do so only to the extent needed to carry out the
purposes of the Agreement. For purposes of this Agreement, such information
shall include Plant specific cost information related to the Operating Services
which may be offered by NMC and procedures or operations regarding such
Operating Services, as well as information on cost or price of items to be
jointly procured by NMC on behalf of Owners. Either party may, from time to
time, come into possession of information of the other party that is
confidential or proprietary (including, without limitation, Safeguards
Information as defined in 10 C.F.R. Part 73). Safeguards Information relative to
the Plant shall be controlled and protected in accordance with 10 C.F.R. 73.21.
NMC shall maintain the confidentiality of all proprietary, non-public
data and information relating to the Plant and the business affairs of
Contracting Owner which NMC may have access to or receive from Contracting
Owner. NMC shall treat all data, reports and other written documents developed
by NMC and provided to Contracting Owner as part of Operating Services pursuant
to this Agreement, as the proprietary information of Contracting Owner. NMC
shall not publish or otherwise disclose to any third parties except to its
agents, attorneys or consultants who are under obligations of confidentiality,
without the prior written consent of Contracting Owner, any of the proprietary,
non-public information provided to NMC by Contracting Owner or developed by NMC
pursuant to this NPPOSA. NMC shall take steps to assure that proprietary
information of Contracting Owner is reviewed only by NMC Service Personnel with
a need to see such information to carry out these duties described herein.
12.2 Notification. The parties further agree to notify each other of
------------
any requests by a third party, including any court or regulatory body, for the
disclosure of any information to be treated as confidential pursuant to this
Article 12 and to reasonably cooperate with each other in attempting to preserve
the confidentiality of such information to the greatest extent consistent with
applicable court orders, laws and/or regulations.
12.3 Permitted Disclosures. Notwithstanding anything to the contrary
---------------------
herein, neither party nor the employees of either of them shall be restricted in
any way from providing (i) safety or other information to the NRC on matters
within the NRC's regulatory responsibilities or (ii) from disclosing information
to INPO or (iii) from disclosing information to the extent required for
compliance with court orders, laws or regulatory requirements.
ARTICLE 13
Miscellaneous
-------------
13.1 Restricted Data. NMC and Contracting Owner agree that, unless
---------------
otherwise required by law, they will not permit any person to have access to
Restricted Data, as defined in 42 U.S.C. ss.2014.y, until the federal Office of
Personnel Management shall have made an investigation and report to the NRC on
the character, associations and loyalty of such person and the NRC shall have
determined that permitting such person to have access to Restricted Data will
not endanger the common defense and security.
13.2 Assignment and Successors. This NPPOSA shall not be assignable by
-------------------------
a party hereto without the prior written consent of the other party and without
first obtaining all necessary regulatory approval, and any attempted assignment
without such consent and approval shall be void, except that this NPPOSA may be
assigned by Contracting Owner to a third party to whom all or substantially all
of the Plant's assets have been transferred. Subject to the preceding sentence,
this NPPOSA shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns.
13.3 Governing Law. The validity, interpretation and performance
-------------
of this NPPOSA and each of its provisions shall be governed by the laws of the
State of Wisconsin.
13.4 No Delay in Payments. No disagreement or dispute of any kind
--------------------
between the parties concerning any matter, including, without limitation, the
amount of any payment due from Contracting Owner to NMC or from NMC to
Contracting Owner, as the case may be, or the correctness of any charge made to
Contracting Owner or NMC, or any reason, excuse or circumstance, including Force
Majeure, shall permit either party to delay or withhold payment due and owing
under this NPPOSA, except that Contracting Owner shall have the right to make
any payments required of it under protest and to reserve its rights to conduct
audits in accordance with Section 5.4.
13.5 Notices. Any notice, request, consent or other communication
-------
permitted or required by this NPPOSA shall be in writing or made electronically
or by facsimile if promptly confirmed in writing. Written notices shall be
deemed to have been given when deposited in the United States mail, first class,
postage pre-paid and, until written notice of a new address is given, shall be
addressed as follows:
If to NMC:
Nuclear Management Company, LLC
(NMC headquarters address)
Attention: Secretary
If to Contracting Owner:
Alliant Energy - IESU
200 1st Street SE
Cedar Rapids, IA 52406
13.6 Amendments. This NPPOSA may be amended only by a written
----------
instrument duly executed and delivered by the parties hereto and with any and
all necessary regulatory approvals previously obtained.
13.7 Relationship. Nothing herein shall be construed to create a
------------
partnership or joint venture between NMC and Contracting Owner or to impose a
trust, fiduciary or partnership duty, obligation or liability upon NMC and
Contracting Owner or to create any agency relationship except as expressly
granted herein.
13.8 Counterparts. This NPPOSA may be executed simultaneously 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.
13.9 Force Majeure. Without limiting rights of termination pursuant to
-------------
Sections 8.2, 8.3, or 8.4, above, either party shall be excused from any failure
or delay in performing its obligations under this NPPOSA, except for delay in
payment of compensation owed for Services previously performed or resources
previously provided pursuant to this NPPOSA, where the delay or failure is
caused by an event beyond the affected party's reasonable control, including,
but not limited to, events such as inability to obtain any necessary regulatory
approvals, accidents, explosions, acts of God, and acts of any governmental body
mandating the termination or delay of performance under this NPPOSA.
13.10 Termination of Services Agreement. Upon the Effective Date of
---------------------------------
this NPPOSA, the Services Agreement between Contracting Owner and NMC dated
April 9, 1999 is terminated and neither party to such Services Agreement shall
have any further obligation to the other party except to pay for services
rendered or resources provided prior to such termination.
13.11 Intellectual Property Rights. Any trade secrets, technology,
----------------------------
software applications or other intellectual property developed by or on behalf
of NMC in the course of performing duties pursuant to this and other NPPOSAs or
the Services Agreement with Owners (collectively referred to herein as
"Intellectual Property") shall be owned jointly by each of NMC Members that have
funded (directly or indirectly) NMC operations during or prior to the
development of such Intellectual Property by NMC; provided however, that NMC
shall retain a nonexclusive license to use such Intellectual Property at any
plants which NMC may operate or provide Operating Services and Contracting Owner
shall also retain a nonexclusive license to use such Intellectual Property at or
for the Plant. Any trade secrets, technology, software applications, or other
intellectual property developed by Owner prior to the effective date of this
Agreement are the Intellectual Property of Owner, and to the extent NMC wishes
to utilize such property to carry out its obligations under this NPPOSA, Owner
and NMC agree to negotiate in good faith a separate license agreement to allow
for such use by NMC.
13.12 Arbitration. Any dispute or controversy arising out of or
-----------
relating to this Agreement shall be determined and settled by third party
arbitration, and judgment upon the award rendered by the Arbitrator(s) may be
entered in any court of competent jurisdiction. Such arbitration shall be
conducted with three arbitrators in accordance with the then effective
Commercial Arbitration Rules of the American Arbitration Association.
13.13 Entire Agreement. This NPPOSA, including Exhibits A, B, C, D and
----------------
E shall constitute the entire understanding and agreement between the parties
superseding any and all previous understandings and agreements, oral or written,
between the parties with respect to the subject matter hereof.
13.14 Waiver. No provision of this NPPOSA shall be deemed waived nor
------
breach of this NPPOSA consented to unless such waiver or consent is set forth in
writing and executed by the party hereto making such waiver or consent.
13.15 Certain Interpretive Matters. The descriptive captions of the
----------------------------
various articles and sections of this NPPOSA have been inserted for convenience
of reference only and shall in no way modify or restrict any of the terms and
provisions hereof. The term "includes" or "including" shall mean "including
without limitation." The words "hereof", "herein" and "hereunder" and words of
similar import shall refer to this NPPOSA as a whole and not to any particular
provision. Other capitalized terms used in this NPPOSA and not defined in
Article 1 shall have the meanings assigned to them elsewhere in this NPPOSA.
Unless the context otherwise requires, the definitions contained in this NPPOSA
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such term. Any
agreement, instrument, statute, regulation, rule or order defined or referred to
herein or in any agreement or instrument that is referred to herein means such
agreement, instrument, statute, regulation, rule or order as from time to time
amended, modified and supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes, regulations,
rules or orders) by succession of comparable successor statutes, regulations,
rules or orders and references to all attachments thereto and instruments
incorporated therein. References to a Section, Article, or Exhibit shall mean a
Section, Article, or Exhibit of this NPPOSA.
13.16 No Third Party Beneficiaries. Except for the first paragraph of
----------------------------
Section 8.7, the provisions of this NPPOSA are for the benefit of the parties
hereto and not for any other person.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this NPPOSA by their
duly authorized representatives.
NUCLEAR MANAGEMENT COMPANY, LLC
BY: __________________________________
TITLE:__________________________________
DATE: __________________________________
ALLIANT ENERGY - IESU
BY: __________________________________
TITLE:__________________________________
DATE: __________________________________
<PAGE>
EXHIBIT A
NMC COST ALLOCATORS
I. NMC will maintain an accounting system for accumulating all costs on
an activity, project, program, work order, or other appropriate basis.
To the extent practicable, time records of hours worked by NMC
employees will be kept by activity, project, program or work order.
Charges for salaries will be determined from such time records and
will be computed on the basis of employees' effective hourly rates,
including the cost of fringe benefits and payroll taxes. Records of
employee-related expenses and other costs will be maintained for each
functional group within NMC.
NMC will develop and maintain written guidelines to govern the methods
and procedures for charging and allocating costs. NMC will subject
transactions to internal auditing procedures on a periodic basis for
compliance with the NPPOSA, written guidelines and orders and rules of
regulatory agencies.
II. NMC costs accumulated for each particular project or activity will be
charged as follows:
1. Direct assignment. Costs accumulated to provide services or
benefits to a particular plant will be directly charged to
that particular Contracting Owner.
2. Costs or services which cannot be directly attributed to a
particular plant will be allocated and charged to each
Contracting Owner by application of one or more of the
allocation ratios described in paragraphs III and IV of this
Exhibit A.
II. The following ratios will be applied as specified in paragraph IV of
this Appendix A to allocate costs of services that can not be
attributed to a particular plant. For the first year of operation, the
ratios will be determined based on historical information.
Subsequently, the ratios will be based on budgeted information and
trued up for actual results, or at such other time as may be required
due to a significant change.
1. Number of Units
A ratio based on the number of generating units, the
numerator of which is for a specific Contracting Owner and
the denominator of which is for all NMC generating units.
2. Number of Plants
A ratio based on the number of plants, the numerator of
which is for a specific Contracting Owner and the
denominator of which is for all NMC generating plants.
3. Number of Labor Hours
A ratio based on the number of labor hours worked at each
plant (this includes labor hours from NMC employees, as well
as labor hours of utility employees who work at the Plant)
the numerator of which is labor hours worked at Contracting
Owner's Plant and the denominator of which is total hours
worked for all plants operated by NMC.
4. Direct Dollars Billed
A ratio based on the number of non-fuel operating and
maintenance dollars incurred at each plant, the numerator of
which is non-fuel operating and maintenance dollars incurred
at each plant and the denominator of which is total non-fuel
operating and maintenance dollars incurred for all NMC
plants.
5. Composite Allocator
One-third allocated by the Number of Units, one-third
allocated by the Number of Labor Dollars and one-third
allocated by the Direct Dollars Billed.
III. A description of each functional group activity which may be modified
from time to time by NMC is set forth below. As described in paragraph
II number 1 of this Exhibit A, where identifiable, costs will be
directly charged to a particular Contracting Owner. For costs
accumulated in activities, projects, programs, or work orders which
are for services of a general nature or for services performed that
are not directly chargeable to a particular Contracting Owner the
method of allocation will be based upon the applicable allocation
ratio (described in paragraph III) set forth below by functional
activity.
Nuclear Support Services
------------------------
Special Programs Number of Units
Fuels Number of Units
Outage Support Number of Units
Security Number of Plants
QA Number of Plants
NRC Number of Plants
Licensing Number of Plants
Regulatory Number of Plants
Training Number of Labor Hours
Administrative Support Services
-------------------------------
Officer Composite Allocator
Accounting Composite Allocator
Communications Composite Allocator
Finance Composite Allocator
Legal Composite Allocator
Records Management Composite Allocator
Risk Management Composite Allocator
Procurement/Warehousing Composite Allocator
Human Resources Number of Labor Hours
Information Technology Number of Labor Hours
Administrative Support Services Number of Labor Hours
Return on & of common investment Composite Allocator
All other costs Composite Allocator
<PAGE>
EXHIBIT B
This Exhibit B (Section 1 through 7) relates to Paragraph 3.4 of the Nuclear
Power Plant Operating Services Agreement (NPPSOA) between the NMC and the
Contracting Owner and further defines the respective commitments and
responsibilities of the NMC and the Contracting Owner regarding the Plant
switchyard, switchyard control building, and transmission line facilities
serving the Plant and the Plant Exclusion Area as defined in the Updated Final
Safety Analysis Report ("UFSAR").
Section 8.0 of this Exhibit B relates to Paragraph 3.4 of the NPPOSA
between the NMC and Contracting Owner and further defines additional services
and assistance, which may be required by the NMC and provided by the Contracting
Owner.
1.0 SWITCHYARD ACCESS
1.1 The authority of the NMC, set forth in Paragraph 3.2 of the
NPPOSA, to exercise complete control over access to the switchyard, other
property in the vicinity of the switchyard, and the Plant Exclusion Area,
includes the authority to conduct interactions with law enforcement agencies
which are deemed necessary by the NMC and the authority to file associated civil
or criminal complaints against third parties as deemed necessary by the NMC. The
NMC and the Contracting Owner will cooperate in good faith as jointly determined
appropriate to support prosecution of any such complaints.
1.2 The NMC and the Contracting Owner shall maintain switchyard
perimeter fence gates in a locked closed condition except when attended or to
allow ingress or egress. Switchyard access will be controlled in accordance with
the Plant procedures.
1.3 The NMC will make routine security patrols of the switchyard.
1.4 The NMC will provide appropriate security measures for the
Switchyard, including potential situations caused by needed maintenance, repair,
or replacement of security devices or equipment.
1.5 Authorized personnel entering the switchyard for the
performance of duties or activities will do so in accordance with Plant
procedures
1.6 The Contracting Owner will not exercise their right to use
the surface, subsurface, or overhead area within the switchyard or Plant
Exclusion Area for any purpose without approval from the NMC.
2.0 SWITCHYARD OPERATION
2.1 NMC personnel will make regular rounds of the switchyard,
switchyard control building, and transmission line facilities for which the NMC
is responsible, as identified in Section 3.0 of this Exhibit B, to carry out the
following activities:
a) make observations of equipment,
b) obtain and log readings of appropriate equipment
parameters,
c) conduct other routine activities at the request of
the Contracting Owner, and
d) provide the Contracting Owner with appropriate
reports as to the findings of these activities.
2.2 The Contracting Owner will make regular rounds of the Plant
switchyard, switchyard control building, and transmission line facilities for
which the Contracting Owner is responsible, as identified in Section 3.0 of this
Exhibit B, to carry out the following activities:
a) make observations of equipment,
b) obtain and log readings of appropriate equipment
parameters, and
c) provide the NMC with appropriate reports as to the
findings of these activities.
2.3 The NMC and the Contracting Owner will operate equipment in
the switchyard as follows:
a) The NMC and the Contracting Owner will coordinate
the operation of all 34.5KV, 161KV, and 345KV
transmission equipment (e.g. breakers,
disconnects, transformers, relaying, etc.) in the
switchyard.
b) The NMC will be the exclusive operator of the
Station Main (1X1), Auxiliary (1X2), Startup
(1X3), Standby (1X4), Low Level Radwaste (T3), and
Construction Transformers (T4), associated output
breakers, supply breakers, and disconnect switches
and the load side distribution equipment being
supplied by these transformers.
c) The Contracting Owner will normally operate (or
provide for operation of) all 161KV and 345KV
switchyard breakers and associated equipment,
including disconnects, other than the equipment
noted in Paragraphs 2.3 (a) and (b) of this
Exhibit B, remotely or locally. Authorized NMC
personnel will operate any such breakers or, other
equipment in the switchyard, locally at the
Contracting Owner's request.
d) The Contracting Owner and the NMC will inform each
other in advance of the operation of all switchyard
breakers and disconnects to remove equipment from
service.
e) The NMC will provide other operating and
maintenance support for the switchyard at the
request of the Contracting Owner.
2.4 The Contracting Owner and the NMC will coordinate the
operation of switchyard equipment, as necessary, for maintenance to be performed
in accordance with Section 3.0 of this Exhibit B, below.
3.0 SWITCHYARD MAINTENANCE AND ENGINEERING
3.1 The NMC will have maintenance and engineering responsibility
(including necessary repair or replacement, configuration control, and related
engineering functions) for the Main, Auxiliary, Startup, Standby, Low Level
Radwaste, and Construction plant transformers and their associated
equipment/components, up to and including the first breaker(s) located in the
switchyard.
3.2 The Contracting Owner and the NMC will share maintenance and
engineering responsibility (including necessary repair or replacement,
configuration control, identifying preventive maintenance activities. and
related engineering functions) for all other equipment located in the
switchyard, as specified in the Switchyard Component Testing Procedure, SCTP-00
(agreement between DAEC and the Contracting Owner)
3.3 The Contracting Owner will be responsible for procuring parts
and, if needed contractor services for the maintenance of equipment beyond the
first breaker(s) out from the plant transformers.
3.4 Maintaining an appropriate inventory of spare parts for the
equipment identified in Section 3.0 of this Exhibit B will be the
responsibility of the party that is
responsible for maintaining the equipment as specified in this Section.
4.0 COORDINATION OF SWITCHYARD LOADING
4.1 The NMC will coordinate scheduled Plant load reductions with
the Contracting Owner.
4.2 The Contracting Owner will coordinate with the NMC all
activities which will directly affect power supply to the Plant. At a minimum,
the Control Room Shift Manager will be informed by the Contracting Owner's
system dispatchers or maintenance crew during the planning stage of these
activities. Activities which cannot be planned in advance, and detailed in the
conduct of planned activities, shall be coordinated with the Control Room Shift
Manager. These activities include but are not limited to:
a) removal from service of any transmission line
terminating in the switchyard,
b) breaker switching which can affect power supply to
the Plant (i.e. switching of lines identified in
Item (a) above), and
c) maintenance activities which can affect the power
supply to the Plant.
5.0 REVIEW AND APPROVAL OF CHANGES OR TESTS
5.1 The Contracting Owner will obtain NMC review and approval of
procedure changes, design changes, tests or changes in the conduct of other
activities which might affect compliance with regulatory requirements, the UFSAR
and/or commitments involving the switchyard and associated transmission lines
and equipment which could affect off-site power supply to the Plant prior to
implementing such changes or commencing such tests. This includes any design
changes or tests that could affect the grid stability at the Plant.
5.2 The NMC will review these proposed changes and tests in
accordance with applicable commitments and regulatory requirements and will
obtain prior NRC approval if required.
6.0 ASSURED SOURCE OF SUPPLY
The Contracting Owner will continue to be responsible for
maintaining an offsite power supply to the Plant, which must satisfy the
requirements of 10CFR50 Appendix A's General Design Criteria 17 - Electric Power
Systems and the Plant Technical Specifications. The Contracting Owner agrees to
provide the Plant with an assured source of offsite power in accordance with the
current operating practices and procedures. These operating practices and
procedures include, but not are not limited to, voltage, frequency, and VAR
controls and operating limits during normal and switching operations, minimum
interconnection requirements for the switchyard, and other stability
considerations. The Contracting Owner recognizes that it must respond to the
critical need to provide power to the Plant in an emergency and provide
assistance to the plant in responding to offsite power emergencies (e.g. Loss of
Offsite Power, Station Blackout). The Contracting Owner will ensure that
procedures are promulgated, and training conducted, to make their maintenance
and dispatch personnel aware of such emergency support needs.
7.0 TRAINING
7.1 The NMC will provide training (on a schedule jointly agreed
to by the Contracting Owner and the NMC) to Contracting Owner's dispatcher and
maintenance personnel to explain the critical need for power at the Plant during
emergencies, the regulatory requirements associated with the Plant power supply,
switchyard security and access controls, and associated procedures.
7.2 The Contracting Owner will make appropriate dispatcher and
maintenance personnel available to receive the training discussed in Paragraph
7.1 of this Exhibit B.
8.0 GENERAL SUPPORT
In accordance with Section 3.4 of the NPPOSA, the Contracting
Owner agrees to provide personnel, supplies, and services, subject to their
reasonable availability, as required by the NMC in order to conduct safe,
economic and efficient operations at the Plant and to otherwise carry out its
responsibilities under the NPPOSA. Such services and assistance will be
provided, as requested by the NMC and agreed to by the Contracting Owner, and
may include services relating to engineering, communications, transportation,
accounting, payroll and personnel assistance, environmental, land management of
the site and surrounding property, and other services as necessary to operate
the Plant.
9.0 GENERAL
This Exhibit B is intended to supplement the NPPOSA. Prior to any
changes being made to this Exhibit B, the NMC will review the proposed change to
assure that it is in compliance with its licensing commitments and regulatory
requirements applicable to the Plant. If regulatory approval is needed, the NMC
will obtain that approval prior to the changes being made.
<PAGE>
EXHIBIT C
EMERGENCY SERVICES AGREEMENT
This Exhibit C relates to Paragraph 3.4 of the NPPOSA between the
NMC and the Contracting Owner and further defines the respective commitments and
responsibilities of the NMC and the Contracting Owner regarding the Emergency
Preparedness, Planning, Equipment and Facilities supporting the Plant, as
defined in the Plant Emergency Plan.
1.0 EMERGENCY PLANNING EQUIPMENT AND FACILITIES
1.1 Access. Paragraph 3.2 of the NPPOSA grants the NMC
unrestricted access to equipment and facilities located at the Plant site
including, without limitation, equipment and facilities relied on to execute the
Plant Emergency Plan. The Contracting Owner shall allow unrestricted access to
all off-site Emergency Support Facilities by NMC personnel as required for
supporting the Duane Arnold Energy Center Emergency Plan.
1.2 Inventory. An inventory of the specific off-site equipment
and facilities, which will be made available to the NMC, shall be provided by
the Contracting Owner and maintained by the Plant's Manager of Emergency
Planning. The inventory may be revised as necessary to reflect changes in the
needs of the Plant Emergency Plan or changes in the availability of the
equipment and facilities. Such revisions shall only be made with the written
concurrence of the NMC and the Contracting Owner.
1.3 Connections to Offsite Services. Contracting Owner shall
provide, and maintain in good working order, connections from the emergency
facilities to offsite services including but not limited to, electrical power,
water, sewer, gas, telephone and microwave communication services.
1.4 Facilities. Contracting Owner shall be responsible for
maintaining Offsite primary and alternate emergency facilities as delineated in
the Duane Arnold Energy Center Emergency Plan. Any changes in these facilities
shall only be made with the written concurrence of the NMC and the Contracting
Owner and will require a review and/or revision of the DAEC Emergency Plan to
ensure compliance with any previous Emergency Plan regulatory commitments.
1.5 Letters of Agreement. The Contracting Owner shall be
responsible for all emergency support requirements specified in the current
letters of agreement with the offsite emergency response agencies. The
Contracting Owner will be initially responsible for maintaining these letters of
agreement and agrees to work with the NMC as future changes are made to the
existing agreements or in negotiating any new letters of agreement required in
support of the DAEC Emergency Plan.
2.0 CONTRACTING OWNER PERSONNEL SUPPORTING THE PLANT EMERGENCY
PLAN
2.1 Personnel Support. The Contracting Owner will provide
personnel to support the Plant Emergency Plan, including, without limitation,
appropriate personnel to staff the Joint Public Information Center, Emergency
Operations Facility, Offsite Labs, Offsite Relocation Centers, and other such
support called for in the Emergency Plan. These personnel shall also be provided
by the Contracting Owner upon request from the NMC to support emergency training
exercises and emergency drills for the Plant and on a first priority basis for
an actual emergency.
2.2 Personnel Roster. A roster of the specific Contracting Owner
personnel that will provide the support described in Paragraph 2.1, above, shall
be provided by the Contracting Owner and maintained by the Plant's Manager of
Emergency Planning. The roster may be revised as necessary to reflect changes in
the needs of the Plant Emergency Plan or changes in the availability of
personnel. Such revisions shall only be made with the written concurrence of the
NMC and the Contracting Owner.
3.0 GENERAL
This Exhibit C is intended to supplement the Nuclear Power Plant
Operating Services Agreement. Prior to any changes being made to this Exhibit C,
the NMC will review the proposed change to assure that it is in compliance with
its licensing commitments and regulatory requirements, applicable to the Plant.
If regulatory approval is needed, the NMC will obtain that approval prior to the
changes being made.
<PAGE>
EXHIBIT D
LIST OF APPLICABLE CONTRACTING OWNER POLICIES
This Exhibit D relates to Paragraph 2.1.d of the Nuclear Power
Plant Operating Services Agreement (NPPOSA) between the NMC and the Contracting
Owner and further defines the respective commitments and responsibilities of the
NMC Personnel regarding compliance with the Alliant Energy's Corporate Policies.
Upon transfer of operating authority to the NMC, the existing DAEC plant
administrative and operating policies and procedures will be the responsibility
of the NMC. The attached list is provided as Alliant Energy's current
ADMINISTRATIVE POLICIES AND PROCEDURES that will also be applicable to the NMC's
operation of the Duane Arnold Energy Center. It is anticipated that the NMC will
develop its own set of policies and procedures covering one or more of the
topics addressed by the policies listed below. In such an event, and subject to
Alliant Energy approval, the NMC policy shall replace and superceded the
applicable Alliant Energy policy listed below.
ALLIANT CORPORATE POLICIES:
o POL 125 AUTHORIZATION FOR CAPITAL EXPENDITURE - 7/1/99
o POL 100 CONFIDENTIALITY OF INFORMATION - 1/18/99
o POL 138 CONTRACTS - GENERAL - 8/18/99
o POL 158 E - MAIL - 7/26/99
o POL 112 ENVIRONMENTAL - 1/18/99
o POL 102 EQUAL EMPLOYMENT OPPORTUNITY/NO HARASSMENT - 5/11/99
o POL 144 ESTABLISHING APPROVAL AUTHORITY - 5/11/99
o POL 133 ETHICAL SOURCING PRACTICES - 6/7/99
o POL 132 HEALTH AND SAFETY POLICY - 6/15/99
o POL 129 INTERNET - 7/21/99
o POL 134 LEASES - 6/15/99
o POL 147 RECORDS MANAGEMENT - 6/27/99
o POL 106 SMOKE FREE WORKPLACE - 1/18/99
o POL 131 SUBSTANCE ABUSE -7/26/99
o POL 153 USE OF CORPORATE EQUIPMENT AND FACILITIES - IN PROGRESS
o POL 109 WORKPLACE VIOLENCE -1/18/99
